RETURNq TO REPORTS DE R EST RI CT ED WITHIN L U 1 Report No. PA-10* ONE WEEK This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION LIVESTOCK DEVELOPMENT PROJECT ZAMBIA May Z7, 1969 Agriculture Projects Department CURRENCY EQUIVALENTS US$ 1 = Zambia Kwacha 0. 714 Zambia Kwacha 1 = US$ 1. 40 Zambia Kwacha 1 = Ngwee 100 Zambia Kwacha 1, 000, 000 US$ 1, 400, 000 WEIGHTS AND MEASURES - IMPERIAL SYSTEM 1 Acre = 0.405 Hectares 1 Imperial Gallon = 4. 7 Liters 1 Square Mile 2. 590 Square Kilometers 1 Mile = 1. 609 Kilometers 1 Pound = 0. 453 Kilograms 1 Long Ton = 1. 016 Metric Tons 1 Short Ton 0. 907 Metric Tons ABBREVIATIONS ADC - Agricultural Development Corporation CSB _ Cold Storage Board DCO _ Dominion Colonial and Overseas DPB - Dairy Produce Board ZCDL _ Zambia Cattle Development Limited ZAMBIA LIVESTOCK DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. SUMMARY I. INTRODUCTION .......................................... 1 II. BACKGROUND ................., 1 A. General ......... ................................ 1 B. The Beef and Dairy Cattle Industry .... .......... 2 C. Animal Health ................................... 4 D. Agricultural ServiCLes ........................... 5 E. Government Policy for Livestock Development ..... 6 III. THE PROJECT ..................., 8 A. Project Description .............................. 8 B. Project Areas and Land Tenure .... ................. 8 C. Detailed Features of Beef Ranch and Dairy Farm Developments ................................. 9 D. Cost Estimates .................................. 11 E. Financing ....................................... 12 F. Procurement ..................................... 14 G. Disbursements and Auditing ...................... 14 H. Corporate Structure and Management .... .......... 15 I. Technical Services and Training .... ............. 17 IV. MARKETS AND PRICES ................................... 18 V. ECONOMIC BENEFITS AND JUSTIFICATION .... .............. 19 VI. CONCLUSIONS AND RECOMMENDATIONS ...................... 20 This appraisal report was prepared by Messrs. J. Edwards and A. Schumacher (IBRD) and C. Chisholm (Livestock Consultant). -2- A M?IEXES 1. IThe Cattle Industry 2. Marketing of Beef and Milk 3. The Grazier Scheme 4. Government Policies for Livestock Development 5. Project Technical Aspects: Maize Feeding, Pasture Tmprovements and Artificial Tnsemination 6. Beef and Dairy Herd Projections Table 1 - Breeding/leaning Ranches (Consolidated) Table 2 - Bull Stud Ranch Table 3 - Breeding/Fattening Ranches (Consolidated) Table 4 - Breeding/Weaning Ranches (Model) Table 5 - Dairy Farm (Model) Table 6 - Gravetts Dairy Farm 7. Beef Ranch and Dairy Farm Acreages 8. Operating Costs Table 1 - Beef Ranches Table 2 - Dairy Farms 9. Project Tnvestments Table 1 - Investmen-t Categories Table 2 - Artificial Insemination - Cost Estimates Table 3 - Pasture Development Program Table 4 - Phasing 10. Corporate Organization of the Agricultural Development Corporation and its Subsidiary, the Zambia Cattle Development Limited Chart 1 - Project Organizational Chart 11. Zambia Cattle Development Limited - Financial Projections Table 1 - Cash Flowy Table 2 - Pro-Yorma Balance Sheets, 1969-1975 12. Economic and Financial Return Calculations 13. Production Benefits MAPS 1. The Project Areas ZAMBIA LIVESTOCK DEVELOPMENT PROJECT SUMMARY i. The Government of Zambia has requested a loan to help finance production of beef and milk by the development of twelve beef ranches and five dairy farms. Nine of the beef ranches would concentrate upon ma&cimizing numbers and quality of weaners for sale to Zambian tarmers. Two ranches would only produce fat steers and the remaining one vould specialize in bull-breeding. The dairy farms, besides their milk output, vould feed out their steer calves for beef production. ii. Finance would be provided for on-ranch roads, firebreaks, fencing, buildings, machinery and water supplies as well as for breeding stock in the early stages. Semen for both beef and dairy herds would be imported. Funds would be included for technical services. iii. The Project is estimated to cost about US$5.8 million of which US$5.2 million would be for ranch and farm development, US$0.2 million for technical services and US$0.4 million for working capital, the latter fi- nanced entirely from local sources. The proposed IBRD loan of US$2.5 million would provide about 43% of the total Project cost and would cover in full the foreign exchange component. The remaining 57% of the Project coat would be met by Government, the Zambia branch of Barclays DCO, and the Zambia Cattle Development Ltd. (ZCDL). iv. The proceeds of the IBRD loan would be lent by Government to the ZCDL. This Company, wholly owned by Government, would operate the ranches and farms and would administer the Project. V. The Project is sound and would yield satisfactory returns to ZCDL (12%) and the national economy (16%). Subject to obtaining certain assur- ances during negotiations, the Project is suitable for a loan of US$2.5 mil- lion repayable over 15 years including five years of grace. The Borrower would be she Government of Zambia. The Project is intended to be the first major stage of Zambia's national program of livestock development. ZAMBIA LIVESTOCK DEVELOPMENT PROJECT I. INTRODUCTION 1.01 The Government of Zambia has requested a loan to help finance the development and expansion of beef and milk production. In 1964 the Ministry of Rural Development and the Cold Storage Board (CSB) began the development of a number of ranches and dairy farms, and in 1966 approached the Indus- trial Development Corporation to acquire and run, them. Government then decided to create the Agricultural Development Corporation (ADC), owned entirely by Government, to exploit new projects in agriculture. ADC in turn formed a wholly owned subsidiary company, Zambia Cattle Development Limited (ZCDL) to take over and develop a number of beef and dairy operations previous- ly run by Government. These included the Ministry and CSB ranches offered earlier to the Industrial Development Corporation. During this period, the Agricultural Developient Service (ADS), an affiliate of the IBRD's Permanent Mission in Eastern Africa (PMEA), was requested to study the feasibility of operating these ranches and farms as commercial operations. Its report was presented early in 1968. PMEA organized a follow-up preparation mission in June 1968. The Project was appraised in October/November 1968 by a mission consisting of Messrs. J. Edwards and A. Schumacher (IBRD) and Messrs. C. Chisholm and G. Kahl (Consultants). As explained in paras. 3.07 and 3.08 of the report, the Project as submitted was reformulated and somewhat expanded in the course of appraisal vith the agreement of the Zambian authorities. This reformulation and expansion of ZCDL's development program will enable the company's operations to be closely integrated into the national program of livestock development (Annex 4). II. BACKGROUND A. General 2.01 Only about 4 million Zambians inhabit a country which is almost the combined size of France and Germany. Although consumption levels of beef and milk are low, there is a shortage of both. Imports of one-third of present needs of these products are required at an annual cost of US$8 million equivalent. The population grows at 3% per annum - it has doubled s:Lnce 1940 - and the demand for beef and milk is increasing in the industrial and urban centers of the country, especially in the "copper-belt" where wages are high. 2.02 Zambia is a landlocked country. It is 600 miles from the sea at Beira, Mozambique and 1,000 from Dar es Salaom, Tanzania. Altitude ranges from 3,000 to 4,000 feet. The topography over large areas is slightly un- dulating. There are three distinct seasons: a dry cool period begins in April and is followed by a dry hot spell from July until early November w-lth a wet season up to March. -2- 2.03 There are wide differences between the productivity and income of farmers. These are low among the Zambian farmers living in widely scattered tribal areas of the country, and higher - close to western levels - for the much smaller numbers of non-Africans farming along the 'line of rail' 1/. Although agriculture contributes less than 10% of GDP, 80% of the population derives its livelihood from the land. By contrast, almost 50% of GDP is derived from mining, mainly copper. As a result of the dominance of the copper industry, an extended decline in the copper price would have serious consequences for the economy and affect its ability to pay for imports. Agricultural exports in 1967 accounted for about 3% of all exports whereas agricultural imports were about 4% of all imports. Annual earned income varies greatly according to occupation, being highest for mining (US$1,240 equivalent) and lovest for agriculture (US$246 equivalent). The latter, although it compares favorably with other East African countries, could be brought closer to non-farm earnings within Zambia with the increasing devel- opment of the agricultural sector. B. The Beef and Dairy Cattle Industry 2/ The Beef Sub-Sector 2.04 There are approximately 1.2 million cattle in Zambia beef-producing herds. The great majority - 1.1 million - are owned by traditional African farmers and their productivity is low. Slaughter cattle offtake from this sector is about 3-4% annually compared vith 17-18% from the commercial herds of European farmers in vhich the balance of the country's beef cattle are found. The contribution from each source is therefore: Number Cattle Commercially Source Numbers Slaughtered Traditional 1,085,000 43,4ao Commercial 130,000 22,750 The indigenous breeds - Tonga, Barotse and Angoni - are well adapted to their environment and cross productively with exotic breeds. Of the latter,. the Africander, pure and crossed, accounts for 90% of the "blood" of beef herds in the commercial sector. In the last 10 years, this sector has used in- creasingly bul:Ls and semen of the Hereford, Boran, Brahman, South Devon and Charolais breeds. 1/ The 'line of rail' describes the land running along both sides of the railway from the 'copper-belt' in the North to Livingstone in the South. 2/ Annex 1, The Cattle Industry, gives further detail. -3- 2.05 Communal grazing is characteristic of the traditional sector of the industry. Steers reach slaughter age at 5 to 7 years. Fenced grazing is typical of the comme*cial sector and cattle are often fed on maize for up to 120 days to reach sll'kughter age at 2½ years. Exceptionally, on mc,re in- tensive maize feeding, they may be killed at 15 months in sharp contrast to the extensive beef production system prevailing in Eastern Africa. 2.06 Beef is in short supply in Zambia even at the current low annual consumption level of 12 lb per person compared to 20 lb per person in East Africa. About two-thirds of total requirements of 100,000 carcasses annually have been met from Zambian sources and the remainder from imports 1/. The Govrernment has estimated (taking into account increases in population and incomes) that internal consumption will rise about 8% per year and will call for a supply of 165,000 carcasses in 1975 and as many as 300,000 by 1985. Most of this increase will have to come from greater imports - perhaps 80,000 carcasses in 1975 and 160,000 by 1985. National production schemes, however strongly supported, cannot match such a steep rise in demand. The cost in foreign exchange at current prices of these imports of beef, now running at US$6.0 million, may rise to US$12.0 million by 1975 and US$25.0 million by 1985. 2.07 The marketing of beef as well as feeder steers 2/ and breeding cattle have developed rapidly since 1964 and, with the firm market conditions now existing, is likely to gain further momentum. At the center is the CSB which has played a major role in the stabilization and development of the livestock industry. Besides being responsible for 60% of the slaughtering of home-produced beef, it has been importing increasing supplies (as live cattle and carcass beef) to meet rising demand. The CSB does not retail beef but it has managed well the distribution, throagh butchers, of supplies for national consumption. Butchers also buy cattle from ranchers privately for retail sales. Butcher purchases have amounted to 17,000 head annually (25% of cattle slaughtered) in recent years. Annex 2 gives further detail on beef marketing. The Dairy Sub-Sector 2.08 Compared with the national beef herd, the national dairy herd is small, comprising about 10,000 cows of milking age. All are owned by European farmers on land along the 'line of rail'. Apart from eight herds in the Southern Zambia area, commercial milk production does not exist ex- cept in this area. Numbers of producers supplying milk to the Dairy Produce Board (DPB) declined from 140 in 1962 to 89 in 1968. However, over this period the size of herds increased (from 70 to 100 milking cows on average) so that numbers of cows in milk were not greatly affected and annual sales per herd increased from 20,9700 gallons to 42,700 gallons. Productivity is 1/ Zambia carcasses average about 400 lbs cold dressed weight. Imported carcasses are somewhat heavier, averaging 450 lbs cold dressed weight. 2/ Castrated males varying in age from 8 months to 2½ years. -'4- best in Zambia's 'maize belt' running from Kabwe in the North to Mazabuku in the South. In the copper-belt area it is less profitable because of poorer soil and higher labor and feed costs. Milk production is based on the feeding of home-grown maize and maize silage plus pasture in season supple- mented by purchased cotton seed cake, groundnut cake and mineral supplements. Average annual milk yields are about 600 gallons/cow in most Friesian herds wbich is somewhat higher than average yields from similar grades of cows in Kenya and Uganda, but lower than average yields of nearly 1,000 gallons from Friesian in the U.K. However, some better managed herds attain up to 1,000 gallons/per cow per year. A small number of commercial dairy farmers have started dairy steer fattening programs - a profitable operation with the higher beef price levels prevailing in Zambia since early in 1968. 2.09 Until 1965, supplies of fresh milk were in surplus at certain times of the year and were used by the DPB to make butter and cheese. The Cheap Milk Scheme, by which milk is subsidized 25% to low-income consumers in urban areas, altered this radically after its introduction in 1965. From a virtually non-existent demand from these consumers (800 gallons/day) sales grew to 8,500 gallons/day, whereas the higher income consumers maintained their demand at 6,000 gallons/day. As a result, milk has had to be recons- tituted from imported ingredients. In this form it accounts, at present, for 32% of total annual consumption. The demand for milk, like the demand for beef, will probably continue to grow as the population increases and purchasing power improves. 2.10 The DPB is supposed to have sales coverage over all Zambia, but in practice, its marketing activities, both at factory and retail level, are confined to the 'line of rail' area and its 800,000 inhabitants. A new milk processing factory is being constructed in Lusaka with a starting (one shift) capacity of 16,000 gallons/day. An ultra high temperature pasteurizing process will be used to achieve longer milk life. The three million inha- bitants living in the rural areas, who receive little milk at the present time, will benefit from this type of milk. C. Animal Health 2.11 ZambLa has been free for many years from the major diseases of Foot-and-Mouth, Contagious Bovine Pleuropneumonia and Rinderpest. It is al- most completely free from East Coast Fever. The risk of, introduction of East Coast Fever, is controlled by means of a ban imposed by Covernment on the in- ternal movement of live cattle. This ban prohibits the movement of cattle into the South from areas North of the 12 line of latitude and into the West from the! area east of the Luangwa River (see Map 1). Other diseases (tick borne aAd otherwise) which exist in the country n)ay be controlled by good, ranch management and hygiene. Cattle are not kept in Zambia's diminishing tsetse fly are-3s and loBses from trypanosomiasis in contiguous zones may be reduced by prophylactic treastment. 2.12 The main cause of low productivity in the traditional sector is poor nutrition which results in a low calving rate and a high death rate among calves, before they reach one year of age. Maintaining herd numbers is difficult under such conditions. Adult mortality is 2% to 3%. Deficiencies of minerals such as cobalt, iron and phosphorus exist in several parts of the country. Cattle, grazing depleted pastures in the long dry season, also suffer a severe defi-iency of protein. Both conditions may be leusened by improved management consisting in the feeding of a compound of urea and minerals for about 210 days. D. Agricultural Services 2.13 The Ministry of Rural Development has four departments relevant to the Project: Agriculture, Marketing, Veterinary Services and Lands. The Department of Lands issues leases on state land and is responsible for alienating trust and reserve lands. The Ministry also has responsibility for a number of important Boards dealing with marketing of grain, tobacco, beef and milk 1/. The Ministry's Agricultural tepartment runs the extension staff including the animal husbandry personnel. 2.14 The research program for livestock and pasture development which, until Independence, was centered in Salisbury, Southern Rhodesia, is now a responsibility of the Ministry of Rural Development and its Agriculture Research Council. The Animal fiusbandry Central Research Station at Mazabuku contains experimental herds of all indigenous and exotic breeds kept in the country. Experiments with these are in progress and should yield information of value to Zambia's developing cattle industry. The center is also used to performance test young bulls (140 a year) for their growth rates under Zambian conditions and provides facilities for producers who use artificial insemination - mainly commercial farmers - for beef and dairy cattle breeding. The Center imports and distributes to producers frozen semen from the U.K., Kenya and the U.S.A. 2.15 Education and training facilities for the livestock industry are still limited. As there is no degree course in Veterinary Science or Agriculture at the University, all professional staff must be trained abroad. However, diploma and certificate level courses are provided for by the Natural Resources Development College and the Masabuka Veterinary Training School. From the annual output of 15 graduates in Animal Management from the Development College, it will be possible to select qualified assistant ranch managers for Project ranches who can eventually be promoted to full- time management responsibilities. The College of Agriculture (Monze) pro- vides courses for extension workers in Animal Husbandry at the certificate level. 2.16 The agricultural sector will require the services of non-Zambian professional and technical staff for some years to come. The professional 1/ For a description of the operations of the Cold Storage Board (beef) and the Dairy Produce Board (milk) see Annex 2. - 6 - staff of the Animal Husbandry and Veterinary Services comprises 24 non- Zambians and 2 Zambians despite efforts to increase numbers in the latter category 1/. The limited availability of qualified Zambians is most acute in the fields of education, planning and research. The necessary combination of commercial experience and professional skills required by those running large development projects and commodity boards is at a premium. 2.17 Credit for the agricultural sector and livestock industry is provided by the Credit Organization of Zambia (Government owned) and by the commercial banks operating in Zambia. The Credit Organization of Zambia recently absorbed the Land Bank, thereby giving it facilities to lend medium- and long-term as well as seasonally to sub-borrowers. However, this Organization has some staffing and organizational problems and has recently experienced problems in collecting its seasonal loans in rural areas. It is likely to be some years before it can become an effective agricultural credit institution. The commercial banks have supplied the bulk of the short-term credit to agriculture. Most have been reluctant to extend medium-term development credit. Recently, though, Barclays Bank DCO appointed an agricultural development adviser and is now preparing to provide medium-term credit for the livestock industry, to qualified Zambian farmers and viable grazing associations. The principal source of livestock credit is provided through the Grazier Scheme currently run by the CSB. Some 52,000 breeding cows and store cattle worth US$3 million equivalent are now fattened and bred by the local ranching sector under this Scheme (Annex 3). E. Government Policies for Livestock Development 2.18 Government investment in livestock development has been on a small scale, being only one-half of 1% of total development expenditure of US$458 million equivalent (1966-1968). It is now realized that this is in- adequate and an expanded program is being embarked upon by the Ministry of Rural Development (Annex 4). Perhaps the most important step taken in 1968 was the increase of 38% in the minimum price for beef to the Zambian producer to bring this closer to the price of imported beef. Government guarantees minimum prices, in three quality grades, to the producer and these are the prices paid by the CSB. Butchers buying privately offer as much as 10-20% above this and provide very effective competition for the 1/ The Department of Veterinary Services has an establishment of 16 professional veterinarians (including 2 Zambians) and numbers of Zambian field staff in support totalling about 240 in grades ranging from senior veterinary assistants to tsetse control orderlies. The field staff of the Animal Husbandry e'tension service consists of 10 provincial officers and senior technical officers, all non-Zambians, as well as 50-60 Zambians as technical and agricultural assistants. -7- CSB as vell as being able to be very selective in the cattle they purchase. Although Government also attempts to fix a maximum retail price in urban areas, this is difficult to control because of the many different values of the variety of cuts and joints in a carcass. 2.15 In late 1968, a National Livestock Development Group was cr'ated by the Ministry of Rural Development to bring together the many organizations in Government, business and research concerned with developing the, cattle industry. The Assistant Secretary, Ministry of Rural Development, is Chairman and he reports directly to his Permanent Secretary 1/. The National Live- stock Development Group has no independent financial or policy authority. It is comprised mainly of civil servants of the Ministry of Ruixal Development meeting regularly in Ministry offices. Its current functions Lre to coor- dinate existing programs for livestock production, marketing, research, ex- tension and education, to prepare a medium-term livestock development program for the beef and dairy industries and to consider if parts of this program may be eligible for local and/or international funding. Plans being consid- ered by this Group include technical and financial encouragement to emergent Zambian ranchers, grazier associations and cattle cooperatives with the objective of placing 5% (60,000 cattle) of the traditional herd under commer- cial management within 10-15 years. Government also intends to extend dairy production in remote rural areas by creating 40-cow herds. Current thinking by ADC is that these dairy herds would be owned and managed by a separate subsidiary of ADC. The market would comprise mainly schools, hos- pitals and the staff and families of local and regional provincial adminis- trative officers. 2.20 However, any long term plan to tap the considerable cattle reserves of the traditional areas depends for its success on changes, currently being considered, in prevailing land tenure systems. Only 6% of the land area of Zambia can be legally alienated with freehold or leasehold title. This category of land is referred to as state land, which is either in the hands of Government or allocated by Government to individuals on long-term leases or sold straight freehold. The remainder (94%) is still operated under re- serve and trust land legislation. These latter cat&gories are administered under traditional and tribal land-use rules in which grazing rights are normally communal. Government recognized this problem soon after Independence in 1964 and appointed a Commission to report to the Cabinet with recommen- dations. The Report, issued in August 1967, concluded that freehold or lease- hold titles should be granted for agricultural land in the reserve and trust areas to those now occupying their lands under customary tribal rules. 1/ Principal members of the Group include the Chairmen of the Commercial Farmers Bureau (a rancher), the directors of the Ministry's Veterinary, Animal Husbandry and Agricultural Projects Services, the General Manager, ZCDL, and the head of the Cattle Department of the Cold Storage Board. There ELre representatives also of the Government Departments of Planning and Cooperatives and of the Agricultural Research Council and its Research stations at Mt. Mkulu and Mazabuku. - 8 - III. THE PROJECT A. Project Description 3.01 The Project includes the development of 12 beef cattle ranches and 5 dairy farms under the management of Zambia Cattle Development Ltd. (ZCDL). It would support ZCDL's livestock development program and would comprise the first major stage of Zambia's national program of livestock development. Because of the need for fqeder stock by existing producers, both in the commercial and traditional sectors, emphasis would be on producing weaner steers for sale from 12 to 24 months of age on the company's beef ranches. The dairy farms would produce milk as well as beef from intensively fattened dairy steer calves. 3.02 In addition, the Project would include limited pilot pasture prov- ing trials (100 acres on each of the ranches) and a 50-acre selected legume seed multiplication plot to be located on one of the beef ranches. To supple- ment the numbers of quality bull stock in Zambia which are in short supply, frozen semen of suitable breeds would be imported for use in the company beef and dairy herds. The purchase of breeding cows and heifers during the devel- opment years of the Project as well as initial working capital would be in- cluded under the ProJect. The Project would also provide for technical services. On-ranch investments would be spread over 5 years, phased with the annual availability of breeding stock for purchase. 3.03 As a complement to the Project, the National Livestock Development Group would prepare plans for the technical and financial encouragement of emergent Zambian farmers, grazier associations and cattle cooperatives (para. 2.19). These activities would be undertaken with technical assistance funded from proceeds of the proposed loan. The work of this Group should provide the basis for a broader scope second stage of Zambian livestock development. B. Project Areas and Land Tenure The Project Areas 3.04 The beef ranches and dairy farms comprising the Project are spread throughout Zambia (see Map I). The climate in the ranching areas is sub-tropical vith annual average rainfalls varying from 30" in Southern Province to 530' in Northern Province. Most of these gains fall between November and April. Temperatures range from about 64 F in the cool season to 95 F in summer. Most of the ranches and dairy farms are in gently un- dulating country. About 80% of the soil is light granite sand (sand veldt) and 20% is broad shallow river flood plains referred to locally as "dambos", containing impeded drainage of gray clay looms and peat. The sand veldt areas carry about a 60% higl and lov tree cover. The predominant grass in the sand veldt area is a thin cover of Hyparrhenia, an indigenous grass of - 9 - moderate nutritional value. Most of the Project ranches are subject to annual bushfires, which can reduce ranch carrlying capacity up to 30%. This hazard has been allowed for in estimating rarch stocking rates. Land Tenure 3.05 Seven of the existing nine beef cattle ranches and Gravetts dairy farx are located on state land. Government is in the process of granting les,.sehold titles to the ZCDL for these properties. ZCDL has now surveyed a number of suitable areas on state land for the location of the four other dairy farms and the two additional 55,000 acre breeding/weaning ranches allowe4 for in the P oject (paras. 3.07 and 3.08). Assurances were obtained during negotiations that Government would submit certified documentation that each of the Project ranches and dairy farms on state land included in the Pro- ject is covered by a 99 year leasehold title prior to requesting disbursement of loan funds for that particular ranch or dairy farm. 3.06 Two existing Project beef ranches, Solwezi and Chishinga, are on trust land. Under the Trust Land Ordinance of 1961, authority over the rights of occupancy on trust land is vested in the President who has author- ized the Commissioner of Lands to make and execute disposition of trust land. All the land comprising Chishinga and Solwezi ranches is empty and the Attor- ney General saw no problem in granting ZCDL 99 year rights of occupancy for these ranches. Nevertheless, assurances were obtained from Government that such rights of occupancy would be issued to ZCDL and that certified documen- tation would be received in the IBRD attesting to these rights prior to ZCDL requesting disbursement of loan funds for these two ranches. C. Detailed Features of Beef Ranch and Dairy Farm Developments 1/ Selection of Ranches and Dairy Farms 3.07 The loan request originally submitted by Government proposed a financial program for the further development of nine beef ranches and two dairy farms. Development work on these ranches and farms has been started by Government. Government selected the sites for these ranches and dairies with a view to providing milk to urban areas, beef to deficit meat areas and breeding stock and feeder steers for fattening to existing and future beef ranchers. In view of the availability of breeding stock and in light of the strong demand for weaner stock, the Project was expanded to include two additional breeding/weaning beef ranches 2/. Due to the shortage of improved 1/ Annex 5 gives further details on technical aspects of the Project. 2/ If demand for weaner steers and heifers slackened for any reason in the foreseeable future, ZCDL would have no difficulty, in light of suitable empty veldt available near its ranches, in grass fattening these weaners to slaughter age. - 10 - breeding bulls in Zambia, Government requested the inclusion of a bull stud ranch located at Monze in the Project during the visit of the appraisal mission. Seven breeding/weaning ranches and two breeding/fattening ranches already exist and are operated by ZCDL (Annex 6 Tables 1-3). Sites for two additional breeding/weaning ranches of approximately 55,000 acres are currently being selected from a number of sites tentatively identified (Annex 6 Table 4). 3.08 Two dairy farms, Kafubu and Gravetts, were originally proposed for inclusion in the Project. Kafubu is located 32 miles south of Kitwe in Nortbern Zambia. Gravetts is close to Lusaka. Because of the high costs of development and production on the Kafubu (8,800 acres) dairy farm proposed by Government, it was dropped from the proposal in agreement with Government. It would be replaced with four economic sized units of 2,500 acres each (Annex 6 Table 5). Thus, five dairy farms, including Gravetts, which remains in the Project, would be developed under the Project. Sites for the four other dairy farms mentioned above are being selected from a list of eight "line of rail" locations in Central and Southern provinces submitted to ZCDL by the Ministry of Rural Development. During negotiations, assurances were obtained that ZCDL would submit to the IBRD for final review and approval its plans for the development of four dairy farms and two beef breeding/weaning ranches no later than 6 months from date of signing. Detailed Features (Annex 7) 3.09 The typical Project breeding/weaning ranch would be about 50,000 acres, carrying an adult herd before development of about 1,400 head, buil.ding up to about 5,000 head after 8 years at a stocking rate of 1 animal unit to 10 acres. This typical ranch (of which there would be 9) would produce about 1,000 weaner steers for fattening and 500 surplus heifera3 for sale annually to the national livestock sector. 3.10 The two Project breeding/fattening ranches are located in areas where movement of cattle to other regions is restricted by veterinory autho- rities. Each is about 110,000 acres, carrying an adult herd before develop- ment of 1,500 head, building up to a 6,000 head when totally stocked at atout the sevsnth year. These ranches would each market annually about 800 heac of grass-fattened 3 to 4 year old slaughter steers, as well as 300 surplus weaner heifers for brceding. At full production these ranches would carry one animal unit on fifteen' acres. See Annex 8 Table 1 for annual operating costs. 3.11 Specialized bull breeding would be organized as a service to Project beef ranches and would later alE o be available to interested beef ranchers. A suitable bull breeding ranch df some 20,000 acres carrying one animal unit on seven acres has been selected near Monze in the Southern Province (see Map) for this purpose. Fully developed, this ranch will have about 500 improved bulls available for use on Project ranches and for sale to local ranchers to upgrade their herds. A herd of 1,300 stud breeding cows will be maintained on this ranch. - 11 - 3.12 The existing Project dairy farm, Gravetts (mentioned in para. 3.08), is located some 8 miles south cof Lusaka. The farm comprises about 1,500 acres. Maximum use is to be made of farm grown fodder crops, temporary leys and the natural veldt. About 200 acres is planted in maizO each year. A herd of about 400 cows would be kept. At full development, this farm should provide some 196,000 gallons of milk annually, plus 155 fat yearling steers for slaughter. 3.13 There would be four other Project dairy farms with an average size of 3,500 acres which would be operated by experienced dairy mahagers under ZCDL direction. Much of the feed requirements (maize and maize silage) would be grown on the farm for milk production as well as for rearing and feeding young steer calves through to slaughter at an estimated 12 to 14 months of age. These Project dairy farms would be intensively developed and at full development, year 7, would produce 280,000 gallons per annum of milk and about 190 fat yearli9g steers for slaughter. This intensity of production would only be achieved if a high level of management is maintained. The scale of the Project dairy farm operations is suitable for company type manage- ment control only and would not be considered as a model for development of individual dairy farms suitable for Zambian producers. See Annex 8 Table 2 for annual operating costs. On-Ranch Improvements 3.14 On-ranch improvements for the beef cattle operations would include roads, firebreaks, fencing, water facilities, stock handling and animal health control facilities, tractors, vehicles, ranch buildings and radio communi- cations equipment. On the dairy farms, silage pits, milking equipment, land clearance, cooling facilities and grain storage bins would be included, in addition to the type of equipment and facilities provided above for the beef cattle operations. In addition, funds for an artificial insemination program and a pasture development program would be provided (see Annex 9 Tables 1, 2 and 3 for details of the on-ranch and farm investments, artificial insemination program and pasture development plan respectively). D. Cost Estimates 3.15 The total investment proposed under the Project, equivalent to US$5.8 million, is detailed in Annex 9 and briefly summarized below by major investment categories. Cost estimates are based on prices prevailing in Zambia. A contingency provision of about 10% is included to cover possible unforeseen costs. The foreign exchange component is about US$2.5 million, roughly 43% of the estimated Project cost. About 70% of the proposed in- vestments would be for development of beef cattle operations, the remaining 30% for the dairy farm component. The total Project cost estimates are as follows: - 12 - Total Project Cost 1/ Category Local Foreign Total Local Foreign Total - - - (K '00)… - - - - - - (US$'000 EquivalentT - Development Capital Physical Inputs 423 1,115 1,538 592 1,561 2,153 Livestock Purchases 1,413 243 1,656 1,978 340 2,318 Pasture Improvement Program 38 50 88 53 70 123 Contingencies 170 150 320 238 210 448 Subtotal 2,o44 1,558 3,602 2,861 2,181 5,042 Technical Services - 147 147 - 206 206 Artificial Insemination - 82 82 - 114 114 Working Capital 300 - 300 420 - 420 Subtotal 300 229 529 420 320 740 Grand Total 2,344 1,7B 4,131 3,281 2,501 5 782 l/ See Annex 9 Table 1 for details. E. Financing 3.16 The proposed IBRD loan of $2.5 million would cover 43% of total estimated Project cost with Barclay's Bank, DCO lending 21% and ZCDL providing 10%. The Government vould make available the remainder of the Project's financial requirements and would receive equity shares in return for funds it provides ZCDL under the Project. Work on beef ranch and dairy farm dev- elopment and cattle purchases costing in all approximately $300,000 have taken place since January 1, 1969 (when ZCDL took over from Government) and have been paid from Government sources. Of the total, 37% (approximately $110,000) would be eligible for reimburse4ent under the proposed IBRD loan. The project cost of US$ 5.8 million would be financed as follows: - 13 - Government ZCDL Barclays DCO IBPD Total Category Amount % Amount % Amount % Amount % - - - (US$ Million Equivalent)-- Development Expenditure I. Equipment in- cluding vehicles, water pipes, fencing wire 1/ - - - - - - 0.5 100 0.5 100 II. Technical Services - - - - - - 0.2 100 0.2 100 III. Artificial Insemination - - - - - - 0.1 100 0.1 100 IV. Other Devel- opment Expen- ditures 1.5 33 o.6 13 0.8 17 1.7 37 4.6 100 Working Capital _ - - - 0.4 100 - o0.4 100 Total Project Costs2/ 1.5 26 o.6 10 1.2 21 2.5 43 5.8 100 1/ This category comprises all goods purchased for the Project on which expenditure is 100% foreign exchange. 2/ See Annex 9 Table 4 for phasing of Project cost estimates. 3.17 The IBRD loan would be made to the Government for 15 years including a grace period of 5 years and, would be relent to ZCDL on the same terms and conditions. The loan term and grace period are based on the estimated financial ability of ZCDL to service the loan to the Government. Assurances were ob- tained that the Government would relend the proceeds of the IBRD loan to ZCDL on these terms and would contribute the residual of ZCDL's annual development expenditure costs under the Project to that company in return for further equity shares. 3.18 Barclays Bank, DCO would lend ZCDL development expenditures of US$0.8 million equivalent from its local resources for a term of 15 years including a grace period of 5 years. An interest rate of 0.25% above prime (currently 7%) was tentatively agreed between Government, ZCDL and Barclays Bank, with a ceiling of 8.25% and a floor of 6.25%. The loan would be made direct to ZCDL with Barclays securing its note by a charge over ZCDL's fixed assets plus a chattel mortgage over the cattle. Barclays Bank, DCO has also undertaken tc, supply the working capital needs of ZCDL as required by that company up to us$0.4 million with an interest rate of 0.5% below prime; this interest rate is the same as offered by commercial banks in Zambia to Govern- ment corporations. The terms and conditions of Barclays Bank's proposed loan - 14 - to ZCDL would be acceptable to the IBRD. The IBRD would have sole responsi- bility for supervision of the Project. The lending operations and disburse- ment procedures of each lender were agreed during negotiations. Assurances vere obtained during negotiations that the effectiveness of the loan agree- ment between ZCDL and Barclays Bank DCO would be a cohdition of effectiveness of the loan agreement between the Government and the IBRD. F. Procurement 3.19 International competitive bidding would be required for the purchase of all goods, except livestock, procured under any single contract of value in excess of US$25,000 equivalent. To the extent feasible, ZCDL will bulk up its development input requirements for international bidding. Indications are that fencing wire, water piping, radio equipment, ranch vehicles and tractors for Project ranches and dairy farms will be purchased by international compe- titive bidding. Any physical inputs required, not purchased under interna- tional competitive bidding, would be subject to local competitive bidding. In the latter case bidding notices would be published in local newspapers and circulated to representatives of foreign governments in Zambia. Adequate local representation of international agricultural equipment firms exists in Zambia to ensure effective competition. Private contractors are available for construction of ranch roads and for the installation of boreholes. 3.20 For the beef ranches, purchases of about 10,000 breeding heifers and cows and 1,300 bulls are contemplated. Development of the Project dairy farms would require purchase of 2,200 dairy heifers and cows. Dairy bull require- ments can be met from local sources, from imports and by use of artificial insemination. As the type and quality of beef and dairy stock suitable for Zambian conditions can only be o,btained from local areas, international tender- ing would not be appropriate for livestock procurement. An assessment of the availability of beef and dairy stock for Project ranches was made and the development phasing of Project ranches was adjusted to ensure that it would be in line with the conservative estimates made of annual livestock avail- ability. An assurance was obtained during negptiations that any livestock imported to the Project would be subjected to quarantine and other veterinary regulations in force at the time and acceptable to the Bank; that purchases of beef cattle within Zambia would be msde after veterinary consultation; and that of dairy cattle to be purchased would be subjected to veterinary inspec- tion and health tests. G. Disbursements and Auditing 3.21 Disbursements woul4 be spread over five years. The proposed IBRD loan of US$ 2.5 million would finance (a) 100% of the direct foreign exchange costs of the project estimated at US$ 800,000 a3nd (b) 37% of the remaining development expenditure. This latter percentage represents the estimated foreign exchange component of the expenditure in this category. Thus, the - 15 - IBRD loan would amount to 43% of the total cost of the Project. All documen- tation would be certified by the General Manager or the Senior Beef and Dairy Managers of ZCDL and by the appropriate official in the Ministry of Finance. 3.22 Independent commercial auditing services are available in Zambia. However, there is a shortage of qualified accountants which is giving rise to delays of up to four months in the audit of accounts of Government and commercial firms. Currently, the local branch of Cooper Brothers has been retained by ZCDL to audit its accounts and to advise the company on financial and accounting procedures. Assurances were obtained during negotiations that ZC(DL would maintain separate accounts for each Project beef ranch and dairy farm, arrange for the auditing of these accounts and the accounts of ZCDL by arn accounting firm aeceptable to IBRD and would forward the audited accounts no later than six months after the close of ZCDL's fiscal year. H. Corporate Structure and Management 3.23 In July 1968, ADC established its first subsidiary ZCDL, as a company limited by shares under the Companies Ordinance of Zambia (Para. 1.01). See Chart I for details of ZCDL's organizational aspects. Currently all its shares are owned by ADC. ADC, in turn, is wholly owned by Government. ZCDL by ordinary resolution can issue regular shares and shares with special rights to private investors. Thus, ZCDL could issue preferred or redeemable shares to qualified investors if ZCDL's Board approves the terms of such addi- tional equity investment. 3.24 ZCDL's main activity is beef ranching. It has undertaken to build up a limited dairy operation which should contribute to its overall cash flow and profitability in the early years of beef ranch development while revenues from beef cattle operations rise. ZCDL also maintains a small sheep operation at; Mbala Ranch and has taken over a profitable pig unit as an adjunct to the bull breeding ranch. ZCDL also produces maize on its dairies and on a few rEnches where soil conditions and marketing make this profitable. 3.25 ZCI)L would be responsible for planning, organizing and implementing the development program under the Project for the beef cattle ranches and dairy farms. Annex 10 gives further details on its corporate structure. ZCDL hes now taken over the existing livestock and fixed assets from the Ministry of Rural Development and CSB. A new capital structure has been agreed between ADC and ZCDL. Authorized capital for ZCDL is now US$5.6 million equivalent with paid-up capital standing at US$2.7 million equivalent as of January 22, 1969. The creation of a new corporate organization and the consolidation of the assets formerly run by the Ministry of Rural Development and Cold Storage Bcoard should make for more efficient and commercial management as well as facilitate the financing of development and permit a proper evaluation of operational and financial results. - 16 - Management 3.26 ZCDL's policy is determined by its Board of Directors appointed separately from its parent ADC's Board. Currently ZCDL's Board has a purely nominal membership. In view of the likely size of ZCDL's operations and the importance of ZCDL's production to the future development of the livestock industry, agreement was reached with the ADC and the Permanent Secretary of the Ministry of Rural Development that ZCDL's Board would be reconstituted and strengthened to include two representatives of the Zambia cattle industry, one representative of the financial community, one representative of the Ministry of Rural Development and one representative of ADC (Chairman). Assur- ances were obtained during negotiations that the Board of ZCDL has been strength- ened and reorganized with financial and livestock expertise acceptable to the IBRD (Annex 10 para. 12). 3.27 ZCDL's Chief Executive Officer is the General Manager who would be responsible, subject to general direction by the Board, for carrying out ZCDL's functions. His duties, responsibilities and authorities are given in Annex 10. ZCDL has filled the General Manager's position with a staff member of the Agri- cultural Development Service (ADS-Nairobi). An assurance was obtained during negotiationn that ZCDL would appoint and maintain a General Manager whose duties, powers and qualifications as well as his terms and conditions of em- ployment are acceptable to the IBRD from the date of signing of the loan. 3.28 The General Manager is assisted at headquarters by an accountant, a secretary and an administrative assistant (See Annex 10, Chart 1 for details of ZCDL's organization). The General Manager would select a Senior Beef Ranch Manager and a Senior Dairy Manager who, in addition to their responsi- bilities for running their respective beef ranch and dairy farm, would act also in a wider capacity, as deplaties in these specialty fields as required. In view of the importance of senlor management in ensuring the success of the Project, assurances were obtained during negotiations that ZCDL would consult the IBRD on the appointments of the Senior Dairy and Beef Ranch Managers. Individual managers, recruited in Zambia, would direct the day- to-day operations of each beef ranch and dairy farm. Financial Operations 3.29 ZCDL has not been operating long enough to issue any trading accounts. ZC.L's cash flow over the life of the Project is shown in Annex 11 Table 1. ZCDLis opening balance sheet (January 22, 1969) and estimates of ZCDL's projected balance sheets are given in Annex 11 Table 2. 3.30 As the accounts of most of the beef ranches and Gravetts dairy farm were part of the Ministry of Rural Development's recurrent expenditure and capital accounts apd the Ministry of Finance's General Revenue Accounts, an accurate assessment of the operating costs and revenues prior to their transfer to ZCDL has been difficult to ascertain. Based on cattle inventories, capital costs, as well as trading and profit and loss accounts provided by the Ministry of Rural Development's accountant for six of the project ranches plus Gravetts dairy farm for 1967 and 1968, financial estimate have been constructed for the ranches 4nd dairy farm as a group. - 17 - 3.31 As a group, the seven beef ranch and dairy operations had an esti- maLted gross trading profit of about US$126,000 fdr 1968, due mainly to the 38% price increase for slaughter stock in effect frodi January 1968. If compa- rable standard valuations to 1967 are used, the ranching and dairy operations would have incurred a trading loss of about US$196,000 for 1968. For 1967, the ranches and dairy showed a trading loss of about US$177,800 when live- stock was valued at the same standard values at the beginning and at che end of the year. Given current prices and if developed as planned,under the proposed Project, ZCDL, with its respo!asible management, shoulet be able to convert these operations into a viable company. Annex 11 Table 1 indicates that ZCDL should achieve a small cash surplus in the second year of the Project before payment of interest on bzrrowed capital. After payment of interest, ZCDL should achieve a cash surplus in the sixth Project year. Since ZCDL is a new untested company, an assurance was obtained during negotiations that Z(DL's debts (maturing over one year) would not be permitted to exceed the value of its paid-up capital. Corporate Benefits 3, 32 Given adequate management, the current pattern of beef and milk prices should ensure that ZCDL's operations are profitable. The financial rate of return on the new investment, calculated after taxes, is estimated at 12% (Annex 12). The return on capital employed varies, but after taxes and at full development in the eighth year, ZCDL should earn an estimated l:L% to 14% on its paid-up share capital. The cumulative cash build up at the end of twrenty years, available either for reinvestment or payable annually as dividends to the shareholder (ADC), is estimated at about US$7 million equiv- alent. The paid-up c'apital stock of the ZCDL will be about US$4 million at the end of the disbursement period of the proposed loan. The long-term debt of the ZCDL at the end of the sixth year of the Project would be about US$3 million equivalent. This would result in a ratio of debt-to-equity of 1 to 1.3, which is satisfactory. I. Technical Services and Training 3.33 Technical direction of ZCDL would be part of the responsibility of its General Manager. His salary and other expenses are included in the capital costs of the Project. Finance is also provided on the same basis foDr short term consultant services, to assist the General Manager in the establishment of a pasture improvement program on Project beef ranches, for planning the four unspecified dairy farms and the two unspecified breeding/ weaning ranches and for organizing beef ranch and dairy farm watering facil- ities. A practical training program conducted on Project ranches would be organized to prepare candidates for assistant ranch manager positions. To bie appointed assistant ranch managers, successful trainees would require com- pletion of at least one year of a training program on a Project ranch. - 18 - IV. MARKETS AND PRICES Beef 4.01 Producer price levels now provide adequate incentives to ZCDL to expand production. In January 1968, the CSB increased its guaranteed minimum prices by an average of 38%, with lower grades going up 45% and the higher grades about 20%. The value received by the producer (averaging US$31 equivalent per 100 lb cold dressed weight) is now roughly equivalent to world export prices of US$550-600 per metric ton fob, but still below the landed cost in Zambia of imported beef of equivalent grade of US$720 per metric ton. To ensure a steady throughput to CSB abattoirs, a seasonal price differential is paid to producers. Ranchers holding their cattle through to the end of the dry season receive a 13% premium. In view of the importance of adequate prices for beef cattle and milk for the viability of the Project, an assurance was obtained during negotiations that Government would consult regularly with the IBRD concerning producer prices and would not place any restrictions on the movement of cattle, except for disease reasons within Zambia, without consulting the IBRD. 4.02 Besides the price of the finished product, there is the important consideration of credit facilities for financing the purchase and lending of breeder, weaner and fattening stock which are currently provided through the CSB's Grazier Scheme. In June 1968, some 52,000 head of cattle were held by commercial ranchers and grazier associations. The CSB retains title to the cattle and insures through the grazier agreement signed by the borrower, by branding with CSB's mark and by periodi( inspections, that the cattle are well maintained. The CSB's interest, fees and principal are recouped at slaughter and the borrower receives the balance as profit. This scheme has been the princ'.pal force in stabilizing the commercial herd in recent years. The size of the credit operation is likely to grow as the industry expands, including nev financing required for the increased output of the Project ranches when at full production. 4.03 The value of the cattle held by ranchers under the Grazier Scheme is currently about US$3.0 million equivalent. The average term of the contract is about 4 years for all cattle financed. Current practice is for the CSB to borrow on 90-day Treasury Bills and to revolve them to finance this medium- term operation. The Treasury has been relatively well supplied with short- term money and the method has worked well. Nevertheless, this situation could change. Without access to credit, the Grazier Scheme would not be able to expand. Since the current Project, as well as the future expansion of the industry, is dependent in part on the smooth functioning of the Scheme, assur- ances were obtained during negotiations that Government would ensure that the Grazier Scheme would be refinanced within a year from the date of signing of the IBRD loan, on terms yhich reflect Ihe 3 to 5 year maturity of Ihe contracts granted ranchers participating in the Grazier Scheme. Currently, Government is organizing a subsidiary company of ADC, to be called the Cattle Finance Company of Zambia, to take over the operations of the Grazier Scheme. - 19 - Milk 4.o4 The DPB provides adequate price incentives to the efficient milk producer. Cuirrently the price offered including quality premiums is equiv- alent to US$0.52 per gallon at the farm gate. This is above the Kenya price of US$0.35 and Uganda of US$0.42. All milk production from Project dairies would be gold to the DPB. The DPB has ample milk tankers to make daily pick- Ups. Dairy Beef 4.0-`6 The Projec4 dairy farms will also be fattening their Friesian steer calves. Experience on similar commercial operations in Zambia in- dicates that such fat steers bring nearly US$200 equivalent sold to local butchers, giving a margin over direct and ind.irect costs of nearly US$50, a profitable operation at these currently prevailing prices. V. ECONOMIC BENEFITS AND JUSTIFICA*ION 5.01 The principal direct benefits resulting from the Project would be the increased production of beef and dairy products, of weaners for fattening and of improved breeding stock. The total extra annual beef out- put from all the ranches due to the Project at full production is about 1,600 tons worth about US$900,000. In addition, approximately 13,000 weaner steers and heifers and 500 improved bulls would be available for sale to Zambian ranchers annually worth together nearly US$1 million equivalent. From the dairy farms, the five herds will be in full production in year 5, with an estimated increased output of 20 tons of whole milk per day worth about US$750,000 annually. These farms will also have available for sale to Zambians annually 360 su-plus dairy heifers in-calf worth us$60,000. Thus the total extra value of the production generated by the Project per year at maturity is about US$2.T million equivalent. The return to the economy of Zambia is 16% over the twent--r year life of the Project (Annex 12). 5.02 Nine of the ranches would produce annually at the seventh year of the Project about 8,500 feeder steer weaners and 4,000 surplus weaner heifers fo:r breeding. Two ranches, located in Northern Zambia, would produce about 3,000 head of grass fattened slaughter stock per annum by the seventh year of the Project. The remaining beef ranch would be developed fully as a bull breeding ranch, making available to the industry 500 improved herd bulls and 400 surplus stud heifers by the seventh year (Annex 13). Currently, the ranches and farms are about 30% developed. They would achieve full carrying capacity in the first 10 years of the Project. On-ranch investments and application of improved management practices aim at increased beef output of approximately 10% per annum over an 8-10 year development period. This would be brought about by an increase in calving rate of 10%, a reduction of 2% in the herd mortality rate and increasing cattle offtakes to about 25% in the eighth year of the Project. - 20 - 5.03 The beef and dairy output from Project ranches and farms would partially meet the rapidly rising demand for these products in Zambia. The production of beef from the ranches at Mbala, Chishinga and Solvezi is particularly required by hospitals, schools and other institutions in those districts which have no other local commercial source of meat. The pro- duction of weaners would provide emergent ranching cooperatives and indi- vidual African ranches with a source of fattening and breeding stock. Esti- mated foreign exchange savings, net of annual foreign exchange outlays directly attributable to the Project, would be Us$1.6 million per annum at full development. VI. CONCLUSIONS AND RECOMMENDATIONS 6.01 The Project is sound and suitable for an IBRD loan. The rates of return accruing to the investment in ZCDL and to the economy are satis- factory. A Loan of US$2.5 million equivalent is appropriate. The Loan would be about 43% of the total Project cost. The Borrower would be the Government of Zambia and it would relend the funds to ZCDL. 6.02 During negotiations, assurances were obtained that: (a) The Government would: (i) Submit evidence to the IBRD of ZCDL's rights of occupancy on Solwezi and Chishinga ranches located on trust lands and evidence of leasehold titles for each Project beef ranch and dairy farm prior to requesting disbursements from the IBRD for investments on that ranch or dairy (paras. 3.05 and 3.06); (ii) on-lend the proceeds of the loan to ZCDL for 15 years in- cluding five years of grace and contribute, the residual of ZCDL's annual ranch development capital expenditures to that company in return for further equity shares (para. 3.17); (iii) not restrict cattle movements within Zambia except for disease nor reduce the producer price offered to ZCDL for beef cattle or for dairy produce without consultation with the IBRD (para. 4.01) and (iv) strengthen the financial structure of the Grazier Scheme no later than 12 months from the date of signing of the Loan Agreement (para. 4.03). (b) The ZCDL would: (i) submit to the IBRD for review and approval its plans for the development of the four unspecified dairy farms and the two unspecified beef breeding/weaning ranches no later than 6 months from the date of signing of the Loan Agreement (Para. 3.08); - 21 - (ii) undertake international competitive bidding for all goods, except livestock, purchased for Project ranches on all single contracts over US$25,000 and subject purchases of inputs not purchased by international tender to local competitive bidding (para. 3.19); (iii) submit purchases of breeding stock for the approval of ZCDL's General Manager and meet all necessary veterinary requirements according to source anc' kind of stock (para. 3.20); (iv) maintain separate accounts for each Project beef ranch and dairy farm, arrange for the auditing of these accounts and the accounts of ZCDL by an accountant acceptable to the IBRD, and forward the audited accounts to the IBRD not later than six m6nths after the close of ZCDL's fiscal year (para. 3.22); (v) not incur any debt maturing over one year which would increase the amount of the company's debt beyond its paid-up capital (para. 3.31); (vi) maintain an individual as General Manager whose duties, powers and qualifications as well as the terms and conditions of his employment would be subject to the approval of the IBRD from the date of signing to the end of the loan (para. 3.27); and (vii) consult with the IBRD on the appointments of the Senior Beef Ranch Manager and Senior Dairy Manager for Project ranches (para. 3.28). (c) The Barclays Bank DCO would: (i) conclude a loan agreement acceptable to the IBRD, with ZCDL indicating that they vould provide 17% of development expen- dituire ($770,000 equivalent) to ZCDL; the effectiveness of this loan agreement between Barclays Bank DCO and ZCDL to be a condition of effectiveness of the IBRD loan (para. 3.18). ANNEX 1 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT The Cattle Industry A. Introduction 1. The cattle industry in Zambia has a dual structure of comprising commercial and traditional type production. In the commercial sector, about 500 European beef ranchers maintain 130,000 cattle on holdings ranging from 3,000 to 100,000 acres. Currently there are about 85 commercial dairy farms with milking herds averaging 100 cows. The bulk of Zambia's cattle herd, 1.1 million head, is grazed in the traditional sector on communal and tribal lands. In the traditional sector, there is 10 small-scale dairy production for commercial sales in towns or urban areas. 2. As a result of growing incomes in both the urban and mining sectors, Zambia has in recent years experienced increasing deficits of meat and milk supplies, requiring substantial imports of beef and powdered milk. Government, anxious to narrow the deficit, has raised producer prices of be,ef substantially and is drawing up a long-range program of financial and technical encouragement to aid both the commercial and traditional producer. B. Land Distribution 3. Land in Zambia is divided into four categories. These are State Land, Trust Land, Reserves and tribally controlled land in Barotse Province. Th,e following table is the present distribution pattern of the four cate- gories. Area Category (Million Acres) Distribution and Use 1. State Land 11.7 3.5 freehold 2.5 leasehold and/or licenses 5.7 still under Government control 2. Reserves 35.7 Communal and traditional use 3. Trust Land 107.4 As for Reserves 4. Barotse Province 31.2 Under control of Paramount Chief of Barotse Peoples, who distri- bute land under a tribal law system TOTAL 186.0 ANNEX 1 Page 2 At present the land tenure and distribution system is under review and a new policy may be implemented sometime in 1969. C. The National Herd 4. Zambia's national herd of cattle is approximately 1.2 million head of which traditional producers own 1.1 million and commercial producers (mainly Europeans with some commercial Zambian farmers) the balance of some 130,000 head. Tonga, Barotse and Angoni are the three main types of cattle indigenous to Zambia, comprising about 70% of the national herd. The break- down is as follows: Breed or Type Estimated No. % of National Herd TONGA - Short & Medium horned Sanga 1/ type 445,000 35 BAROTSE - Long horned Sanga 275,000 21 ANGONI - Short horned & polled humped Zebu type 175,000 14 TOTAL 895,000 70 1/ Sanga is a type of cattle irndigenous to African countries, evolvea over the centuries from continuous crossing of Bos Indicus and Bos Taurus strains. 5. Of the total 895,000 head of indigenous type cattle, 99% are owned by the traditional sector. The most popular of the breeds is the Angoni, followed by the Barotse, both types havi.ng demonstrated their ability to stand up to the rigors of poor management, low levels of nutrition and traditional herding and husbandry techniques. Of the two, the Angoni appears to have the best prospects for development and improvement. Although a small animal, its fertility performance is good, coupled with its inherent tolerance of local conditions. Crossed or upgraded with Boran or Brahman bulls over several generations, this breed could become the basis of future Zambian herd development vither for an animal suited to local conditions for distribution to emergent Zambian farmers or as the female side of a hybrid beef breeding program using exotic type bulls. 6. Afrikander, Boran, Hereford, Charolais, South Devon, Sussex and Brahman are the main imported breeds to Zambia, distributed mainly among thie commercial rancherp. Afrikander influences in these have predominated, whereby about 90% of the commercial herd comprises Afrikander blood. Al- though this breed has contributed substantiall- to the national herd im- provement, it is felt that Afrikander has sevee-e limitations in fertility under uncontrolled breeding practices. ANNEX 1 Page 3 7. There is an increasing use of Boran which is proving beneficial in improving quality, However, general use of this breed is limited mainly by the veterinary restrictions applied to the importation of these animals from Kenya. One method to overcome this limi,tation is to adopt artificial insemination. It has been determined that acequate quantities of frozen Boran semen could be available from Kenya at economic prices. 8. Of the other imported breeds in use for ctoss-breediag, Hereford, Charolais and Sussex have demonstrated value and popularity. A greater use of these and other breeds will contribute significantly to the national tonnage output of beef over the next decade. Howfever, careful attention is required in distributing surplus breeding females from these crosses to the Zambian farmer sector. Genetic deterioration by uncontrolled,breeding policies could be' ralid, as well as mortality increases due to lover levels of herd management. CarefuL planning and control is necessary to ensure against this. D. Livestock Distribution 9. From the census taken in 1965 and 1966, the classification of the 1.2 million head national herd is approximately: Bulls 38,500 3% of herd Cows and heifers 573,300 48% of herd Oxen 355,700 30% of herd Calves 232,400 19% of herd TOTAL 1.2 million 100% of herd The Commercial Beef Herd 10. The commercial beef herd numbers have decreased from approximately 213,000 head in 1961 to 130,000 in 1966 due mainly to the exodus of European farmers, a secondary result of which was the slaughtering of female breeding stock to realize maximum capital before leaving. However, since 1966, as a result of legislation whereby female stock of departing ranchers is now rescued and also due to a renewal of confidence in the country by the re- maining ranchers, the cattle population of the commercial sector has stab- ilized, This herd is almost exclusively concentrated along the 'line of rail' areas and in Southern Province. Of the 130,000 head in the total comnercial beef herd approximatley 60,000 head are breeding females, of which the Cold Storage Board (CSB) has lent out to commercial ranchers and farmers about 38,000 or 63% of the total cow herd. The balance is owned by these farmers and other private ranchers. ANNEX 1 Page 4 The Commercial Dairy Herd 11. The commercial dairy herd is small, comprising about 10,000 breed- ing females, of which 85% are Friesian and the remainder Jersey and Guernseys, with Southern African blood in all breeds. There is almost no milk pro- duction for sale from the traditional sector. It is not clear in which direction the expansion of dairy farming will take place, particularly in relation to the emergent Zambian farmer. However, plans are being drawn up by Government for the establishment of a series of 40-cow units in different rural areas. Experiments are currently taking place in developing dairy cross.breeds suitable for small farmer production. The steer calf resulting from these crossbred animals will be suitable for beef production. 12. In the past, it was common practice in the commercial dairy herds to slaughter calves at birth. With the increase in beef prices in 1968, a number of dairymen have found it profitable to fatten their dairy steer calves for sale at 12 to 14 months. As long as the current price advantage is maintained Project ranches will feed their Friesian steer calves under an intensive rearing system to slaughter when about 12 to 14 months of age at 850 lb liveweight. The Traditional Beef Sector 13. The traditional herd of about 1.2 million is distributed mainly through Southern and Barotse Provinces. Most of these cattle are kept under communal grazing systems. The overall distribution pattern is as follows, % of Province No. of Head Total Herd Southern 483,000 41 Barotse 284,000 25 Eastern 172,000 16 Central 118,200 11 Northern 50,500 5 North Western 12,300 1 Western 3,000 0.5 Luapula 2,800 0.5 TOTAL 1.2 million 100 ANNEX 1 Page 5 E. Livestock Offtakes and Reproduction Rates 14. The offtakes are fairly satisfactory in the commercial sector at 17-18% per annum whilst the traditiona4 herd is very low at 4%. By contrast the offtake rate on the Zambia Cattle 5evelopment Lta. ranches,included in the Project are expected to rise to 25% in the first 8-10 yeari3 of the Project. The low offtake in the traditional herd can be generally attributed to calf mortalities and a tendency of the sector as a whdle still to regard cattle as their wealth. The following table indicates the pattern of offtakes over the past 4 years. Commercial Sector total Total Herd Slaughterings Offtake Year ('000) ('000) % 1964 190 29 i5 1965 156 26 17 1966 150 27 18 1967 150 27 18 Average 161 27 17 Traditional Sector Known Estimated Bush Total Total Head Slaughterings Slaughterings Slaughterings Offtake Year ('000) ('000) ('000) ('000) % 1964 1,112 1965 1,100 16 32 68 4.3 1966 1,150 18 36 54 4.9 1967 1,200 18 36 54 4.9 Average 1,103 17.7 34.6 52 4.7 15. In the commercial sector effective calving percentages (weaning rates)-range from about 62% to 83%, with an average of around 70%. These figures, although low by U.S. standards are comparable to efficiently menaged ranches in East African and Latin American countries. In the ANNEX 1 Page 6 traditional areas, however, weaning rates are much lower. For example, in Barotse Province the calving percentage (at birth) is around 40% with an effective weaning rate of only about 24%, representing a calf mortality of about 50% of all calves born. These figures are generally the pattern throughout the traditional sector. A great deal of attention is required of Government to improve the performance of the sector, as it is a major undeveloped livestock resource. ANNEX 2 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT Marketing of Beef and Milk Meat Marketing 1. The marketing of livestock and meat has evolved rapidly since 1964. The principal factors of this evolution are rapid rise in consumer demand, the drop in local supplies due to the depart,ure of a number of non- Zambian ranchers, the expanded role of the Cold Storage Board (CSB) into live cattle maLrketing and beef carcass importing, and finally the decision by Government in 1968 to raise its producer support price for beef by an average of 38%. 2. Cattle are slaughtered and marketed in three ways - 37% of total consumption by CSB, about 20% by private butchers and 20% in village slaughterings The balance is made up from imported carcasses. Cor_sumer Demand for Beef 3. The internal demand for beef in Zambia has been expanding. About 88.000 carcasses were consumed in 1964, increasing to 96,800 in 1967. How- ever, domestic supplies dropped from 74,200 to 59,400 over the same period, requiring a 164% increase in beef imports. The principal reasons for this expansion have been rising incomes, the relatively low price of beef (prior to 1968) compared to protein substitutes such as mutton, pork and poul'ry, general population increases (3% per annum), and rapid urbanization 1/. 1/ The projection made by the Zambian Ministry of Agriculture on the future demand for beef was based on the following assumptions: changes in aggregate national income and the price of beef relative to close substitutes for it are assumed to be the principal determinants of beef demand. These assumptions should be qualified as the use of aggregate income as an explanatory variable neglects population changes, especially since a relative increase in young population will alter the average de- mand for meat. In addition, shifts in population between regions and occupations can affect demand insofar as urbanization (Lusaka and Livingstone) and the expanding copper industry have an impact on con- sumption patterns. However, it is difficult to allow for these factors in light of the inadequate data available. Therefore, a constant income elasticity of demand for beef of 1.2 was assumed - e.g. a 1% rise in total private consumption of all commodities will give rise to a 1.2% rise in the consumption of beef. This assumption accords with FAO elasticity estimates for East African countries ranging from 0.9 to 1.3. ANNEX 2 Page 2 It is clear that the magnitude of recent increases of annual internal consumption of beef is likely to continue for some years to come. Beef Consumption: Carcass Equivalents Actual Projected 1964 88,308 1969 120,000 1965 89,662 1970 130,000 1966 85,955 1975 165,000 1967 96,810 1985 300,000 1968(est) 110,000 Even assuming demand at 300,000 carcasses by 1985, this level would still only provide an average consumption of beef per person of roughly 20 pounds, equivalent to consumption levels now achieved in Kenya, Uganda and Tanzania. 4. From the slaughter stock sources of both the commercial and tradi- tional sectors, about 55,000 head are available at present with prospects of increasing this to about 76,000 head by 1970, as a result of: (a) the Project ranches and dairy farm contributions at peak production levels; and (b) by the reasonable assumptions that the traditional herd will continue to increase at about 2% per annum and that offtake will be held at 4% per annum. 5. These output estimates would still be insufficient to meet the demand projected of about 130,000 head in 1970. By 1975, local supplies should rise to perhaps 80,000 head which would require about 85,000 carcass eqgivalents to be imported if present trends in demand persist, which is considered likely by knowledgeable Zambian agricultural planning officials. Beef Imports 6. Imports of beef are projected to increase rapidly as domestic supplies fail to match likely internal consumption. Recent estimates indicate that import requirements (now running at nearly 40,000 carcass equivalents annually) are likely to reach 85,000 by 1975, rising to perhaps 160,000 carcasses by 1985. Based on a cif estimate of US$700 per metric ton, the cost in foreign exchange of these imports, now averaging the equivalent of US$6.0 million, would rise to over US$12.0 million in 1975 and may cost the balance of payments nearly US$25 million annually by 1985. The CSB has a mtonopoly on beef imports to Zambia. The bulk of imports, which are equivalent to Zambia's middle grade (standard), come from South Africa, Botswana and Swaziland. ANNEX 1 Page 3 CeLttle Movement 7. Beef cattle are moved to colhsuming areas by trekking, truck and reil. The ofMftake from Baroste Province is normally walked out to Living- stone. Cattle in Central and Southerni Provinces are normally trekked to the rail line and railed to Lusaka and the Copperbelt. While no problem is expected in shifting cattle under the proposed Project, it is likely that expanded development of the livestock industry will run into a transport bottleneck, both in the lack of adequate stock routes and the shortage of cattle transport vehicles. Government is aware of !this problem and is drawing up proposals to improve the situation as part of its national livestock development program. The Cold Storage Board of Zambia and its Role in Meat Marketing 8. The CSB was established in January 1964 comprising in the main the Zamibian prorated assets and liabilities of the former Federal Cold Storage Commission. Legally, it is constituted (under Ordinance No. 1 of 1964, and regulated by the Cold Storage Commission Act of 1960) as a Statutory Board of Government, working under a board of directors appointed by the Minister of Rural Development. 9. The CSB has no monopoly powers to buy live cattle in Zambia. There is, therefore, considerable pressure of competition for slaughter stock from local butchers who offer prices to producers above CSB minimum support price. About 17,000 cattle are purchased annually by private butchers for slaughter, approximately 20% of cattle marketed in Zambia annually in recent years. This competition in the marketing of live cattle between CSB and private butchers is praiseworthy and should be encouraged. Ab,attoirs 10. The CSB maintains abattoirs at Lusaka, Livingstone, Kitwe and Chipata. Another smell abattoir is planned for Kasama in Northern Province. The CSB has established 80 saleyards throughout the major cattle centers of the country to service these abattoirs. These saleyards appear to be fwuctioning adequately in relation to the total cattle population. After the increase in cattle prices, a noticeable increase in offtake has occurred in Baroste Province. 11. Currently, total CSB abattoir capacity is 500 head per day, with an additional 50 head per day envisaged for Kasama. The Danish Government is assisting CSB in expanding the Lusaka abattoir to 350 head per day capacity. CSB will then have the capacity to slaughter 170,000 head per year. This would be sufficient for the foreseeable future as current live cattle supplies average 50,000 to 60,000 head per annum. Local butchers are encouraged, on a fee basis, to use the CSB facilities for slaughtering their own purchases. ANNEX 2 Page 4 12. The value of CSB's operations has almost tripled from 1964 to 1967. This expansion has been due to the overall increase in its slaughter- ing as well as the doubling in the number of cattle placed under grazier agreements during this period. The trading losses incurred in 1966 and 1967 were due principally to the rapid rise in imported cattle and carcasses marketed by CSB prior to the January 1968 increase in prices. These losses should be minimal since the rise. For 1968, the CSB was estimated to break even. Under the provisions of the legal ordinance establishing the Cold Storage Board as a statutory board, Governiment is obliged to cover any operat- ing losses incurred by the Board. The Ministry of Finance has now instituted an overall review of the organizational and financial structure of all Govern- ment statutory boards, including the CSB. One of the issues being covered in this review is the financing of CSB's Grazier Scheme. Milk and Dairy Produce Marketing 13. Similar to the marketing of beef, the marketing of milk and dairy products has undergone substantial changes since 1964. As described later, the role of the Dairy Produce Board (DPB) has greatly expanded. Most noteworthy has been the rapid expansion of milk consumption by the lower income groups through the effective introduction by Government of a Cheap Milk Scheme. This increase in demand has necessitated substantial imports of milk powder for reconstituting in Zambia into liquid milk to meet this demand. Due to the relatively low price of such powder, the DPB has carried out such reconstitution at little or no financial loss. Supply and Demand for Milk and Milk Products 14. Fresh milk supply within the DPB area developed in the following manner since 1959: (Million Gallons per Year) 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 2.9 3.1 2.7 2.9 3.2 3.5 4.0 3.9 3.7 3.8 These figures show that more or less since 1964 fresh milk supply has been fairly constant in absolute terms, despite the fact that the nupiber of dairy farmers decreased from 140 in 1962 to 89 in autumn of 1968. This was mainly due to the fact that, smaller dairy farmers went out of business with the remaining farmers buying up their herds. 15. During the late 1950's and early 1960's the fresh whole milk market was in constant surplus at an average producer price of about US$0.52 equivalent per gallop and consumer prices of US$0.12 gquiv4lent per pint in thei Copperbelt and US$0.10 equivalent elsewhere. Only about 60% of fresh m;ilk supply was then consumed as whole milk with the balance going into butter and cheese production. This surplus was reversed after the introduction of the Cheap Milk Scheme on Tuly 1, 1965. The average producer price was then reduced to US$0.49 equivalent per gallon and milk ANNEX 2 F'age 5 became available at US$0.8 equivalent per pint in the high den:3ity areas, and at US$0.10 equivalent per pint in low density areas (US$0.12 equivalent on the Copperbelt), resulting in whole milk supply falling by about 5%, whilst total consumption of whole railk increased nearly 25%. To reverse this effect of decreasing supplies, the basic producer price was again increased to an average of US$0.52 equivalent per gallon, with an output of more than 4 million gallons hoped for 1966 and 1967. However, this expectation did not materialize. Milk intake reached only 3.9 million gallons in 1966 and declined further to 3.7 million gallons. This decline was mainly due to farmers reluctance to invest additional capital in their operations in view of political uncertainties. 16. Since June of 1966 monthly milk consumptidIn has increasingly exceeded whole milk supplies and the deficit had to be made up by increased reconstitution of imported ingredients. Reconstitution of milk started in June 1966 with a daily average total of 770 gallons going up to 3,200 gallons daily by December 1966, to 5,867 in September 1967 and to a daily average of 6,840 gallons in October of 1968. The corresponding supply figures for fresh whole milk intake can be seen in the following tabulation: Daily average in- Daily average recon- take of fresh whole stitution of milk/ Month milk/gallons gallons June/66 10,300 770 December/66 10,280 3,200 September/67 9,240 5,867 October/68 9,058 6,840 If the maximum natural herd increase is attained, the supply of fresh milk is unlikely to meet milk demand. The deficits in fresh whole milk supply are likely to increase from approximately 4.0 millibn gallons in 1969 to 17.5 million gallons by 1980, given an estimated increase of demand from 7.5 million gallons for 1969 to 24.2 million gallons by 1980 1/. 1/ This demand increase is based on the following assumptions: (a) stability of the present (1968) retail price of 8 ngwee per pint for low density areas and 6 ngwee per pint for high density areas; (b) high price demand; 5% per year increase; and (c) low price demand: 50% per year, old price elasticity of 0.75 for 1967/68, thereafter 25% per year to 1972, then 10% per year increase to 1980. ANNEX 2 Page 6 17. Due to the success of the cheap milk scheme since 1965, the surplus of fresh whole milk that used to be processed into butter, cheese, ice cream and other dairy products no longer exists and Zambia's necessities in these fields must be 99% imported. The value of total annual imports of dairy products increased from US$1.4 million in 1964 to US$2.7 million by the end of 1967. Condensed milk imports increased from US$258,500 in 1964 to US$506,800 in 1967. Skimmed and full cream milk powder imports increased three and a half times from a total of 1.7 million lb in 1964 to 5.8 million lb by the end of 1967. Despite the likelihood that reconstituted milk will become increasingly popular in tropical countries, the recent substantial increase in production of milk powders in Europe should ensure that the price of ingredients does not rise appreciably in excess of US$0.49 per gallon in the immediate future. It has been calculated that Zambia can produce milk competitively with this import parity price, although it is unlikely that it will have either the capital or enough organizational ability to displace imports for some years yet. On the assumptions that commercial production is unlikely to increase rapidly in the near future, and that Zambia shall be unable to develop dairy production rapidly enough to offset the expected short-fall in supply, the reconstitution of imported ingredients will continue to be an important source of supply of milk, certainly until after 1970. The Dairy Produce Board (DPB) 18. The Dairy Produce Board was created by Ordinance in 1964 as ^ statutory Government body. The members of its Board are appointed by the Minister of Rural Development. Its main functions are (a) to guarantee minimum prices to producers which are normally reviewed and set annualy by Government; (b) to ensure an adequate supply of milk and of other dairy products to consumers on a national scale; (c) to control and guarantee the quality of dairy produce; (d) to administer the different subsidies of Govern- ment paid to consumers and producers. 19. The DPB is manaeed by a General Manager, a Secretary/Chief Accountant, a Marketing Manager, a Production Manager and three Factory Managers. They operate four factories in Kitwe, Broken Hill, Lusaka and Mazabuka and handle a fairly complete range of dairy products, selling butter, 12 different types of cheese, condensed milk, skim milk pow,der, full cream milk powder, ice cream, fresh whole milk (principally packed in tetrapak cartons) and yoghurt ("Lacto"). 20. The DPB made a trading profit of US$260,000 equivalent during fiscal 1967/68 compared to a loss of US$74,000 equivalent during the previous year. As a result, the accumulated deficit pf the first three years of operation was eliminated with US$24,000 equivalent carried forward on the balance sheet. The improved trading position was brought about by two main factors. First, the increased volume of activity of the Dairy Produce Board during fiscal 1967/68 had reduced operating costs per unit, and second, the DPB was able to gain from the continued slump of world market prices of dairy products, which it has been importing in increasing ANNEX 2 Page 7 amounts, mainly for reconstitution of milk. The Dairy Produce Board collects, partially with its own trucks, milk from farmers in the four producing areas around Kitwe, Broken Hill, Lusaka and Mazabuku. Producer Prices 21.. Farmers are being paid monthly by DPB. The present producer price paid for farm-fresh whole milk to dairy farmers on average is US$0.49 equivalent pet gallon. In hddition, premiums of US$0.03 equivalent per gallon (payable by the DPB) are given for quelity tested milk. On average only about one-third of the farmers receive these premiums. This producer price, on average, meets a farmer's cost and with a well-managed operation, provides him with an adequate incentive and return on his capital. Milk Distribution 22. Distribution of milk in Zambia is difficult due to the wide geographic spIead of its population. DPB has tried to reach the target fixed by the Government and to supply the greatest number of consumers possible with a reasonable quantity of milk of good quality. Before the Cheap Milk Scheme was launched in June 1965, the demand for fluid milk was remLarkably steady but with regular variances resulting from: (a) the habits of population, especially the Zambian sector which spends, mainly in the Copperbelt, a great amount of its monthly wages within the first week after the first of the month when they receive their paycheck. This leads to a much greater demand during the first ten days of each month with the consumption then slowing down to a rather constant level for the rest of the month, and (b) the effects of the seasonal temperature differences which increase demand during summer and lower it during the rainy season between November and April. 23. In addition, there are only a few suppliers in the Copperbelt. Demand being greatest in this area, necessitates that milk from Mazabuku and Lusaka factories be transported by road tanker to the Kitwe factory. To a certain extent this problem is counteracted by a price differential paid to Copperbelt producers of us$0.06 equivalent per gallon in order to encourage them to enlarge their dairy herds. This area differential is likely to be paid as long as Copperbelt demand outstrips local fresh milk supply. 24. In order to increase its sales coverage as much as possible, the Dairy Produce Board plans considerable investments in the near future. Between now and 1971 the Board plans to invest approximately US$1.4 miLlion equivalent for new machinery, new buildings, land acquisition and a long- life milk factory to be operational by 1972, which wiLl permit the marketing ANNEX 2 Page 8 in the outlying areas so far not served by DPB of milk that can be exposed to heat and be stored for up to six weeks without souring. The start-up capacity of this factory, which will be located in Lusaka, will be 16,000 gallons per shift and could easily be doubled to 32,000 gallons by introduc- tion of a second shift. ANNEX 3 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT The Grazier Scheme Introduction 1.. Since 1964 the Cold Storage Board (CSB) has played a major role in the development of the beef cattle indlustry. One of its most important fmnctions has been the distribution of live cattle through its Grazier Scheme, udder which it iAndeE'takes to: (a) purchase weaners and store cattle for lending as feeders at commercial interest rates to individual ranchers and grazing associations; (b) guarantee minimum prices to producers for live cattle which Are reviewed annually by Government; and (c) preserve female stock from slaughter in order to stabilize the national herd, oil-lending them to ranchers at commercial rates of interest. The Scheme at Present 2. Under the operating structure of the CSB Grazier Scheme, surplus cattle are purchased from commercial ranchers and the traditional sector for lending at commercial interest rates to qualified individual ranchers and grazing associations. The CSB retains title to the cattle and ensures, through the grazier agreement signed by the borrower, by branding with CSB's brand, and by periodic inspections, that the cattle are well maintained and are only marketed through the CSB slaughter facilities. The CSB interest, fees and principal are recovered at slaughter with the residual profit (or loss) accruing to the borrower. 3. This Scheme has been the principal force in stabilizing the commercial herd in recent years. It will also be playing a key role in any significant expansion of the beef cattle industry, unless alternative, competitive functions develop within the framework of the national livestock industry to provide credit along ordinary banking lines. 4. There are five types of cattle operations conducted under the Grazier Scheme. These are: (a) weaner steers for growing out and fattening; (b) store cattle for grass fattening or maize finishing; (c) weaner heifers for growing, breeding and fattening when culled; ANNEX 3 Page 2 (d) adult females for breeding and fattening when culled; and (e) the financing of bull breeding stock. This system of operation has developed successfully insofar as it has widened significantly the continuity of supply of the right type of beef at the right time of year to the CSB and that it has done so in a manner which ensures the CSB's ability to recoup its capital investment. 5. At present the Grazier Scheme has a total of 256 accounts involving an encumbered herd to CSB of 52,538 head worth about US$3.1 million equiv- alent. The borrowers' categories are as follows: Category Number Number of Head Emergent African farmers, Ranchers and Cooperatives 11 2,037 Europeans 197 35,891 Private Companies 22 5,866 Government Ranches, Institutions, etc. 26 8,744 Total 256 52,538 The! breakdown of the cattle and funds employed under this scheme is: Cattle Class Number Loan Value Outstanding (K) (US$ Equivalent) Steers 14,219 587,106 821,948 Females 38,319 1 05,934 2,248,308 Total 52,538 2,193,040 3,070,256 Credit Mechanism 6. The normal livestock limits allowed to ranchers are approximately 300 head to a new subscriber representing an approximate value of K 14,000 (US$19,600) and 450 head to an established and proven rancher representing an approximate value of K 20,000 (US$28,000). A balanced loan of 50% males on a short term agreement and 50% females on a medium term agreement (up to 5 years) is usually applied to a rancher application. Ideally, if the weaners and store cattle were available, the scheme could evolve into a fast moving steer fattening credit system. However, the steers are not currently avail- able to achieve this. The longest period of agreement for a livestock loan is 5 years. ANNEX 3 Page 3 7. Secondly, the CSB undertakes credit financing to the producer known as "advance deals". Advance credit is made against a producer's own unencumbered stock, as distinct from stock purchased with Board assistance from another producer. Livestock under evaluation for advanced credit to a producer are assessed on the same basis as for the normal support credit. However, a maximum limit is set of two-thirds of the total value of current livestock prices. Finally, bull purchases can be financed on ',he basis of equivalent liveweight prices/100 lb of commercial grade cattle. 8. In all three forms of cretdit, livestock covered by advances are branded with the CSB registered brand and CSB retains the legal title of the livestock. Interest on the outstanding balances financed by CSB on behalf of the grazier is charged at 7% per annum. The grazier, in the case of females, also agrees to produce 18 months after the signing of an agreement, a certain number of weaners (male and female) and thereafter each breeding year, until stkch time as the female is fattened and sold back to the CSB as a cull. These weaners will also be branded by CSB. All calves born during the agreement become the property of CSB. If cattle should die, be lost, stolen or otherwise, the amount of loss is met by CSB and deducted from proceeds due to the rancher when stock under the scheme is remarketed through the CSB. In practice, usually the first calf only is branded by CSB and none at all are branded if the outstanding commitment on the cow by the grazier is less than US$28. Current and Future Financial Structure 9. The CSB has built up the Grazier Scheme to its present level (US$3 million equivalent) by revolving 90-day Treasury bills costing 6¼%. Each 90 days the CSB and Government automatically revolve the notes and frequently add to the outstanding balance as the Scheme expands. While the copper price has been high and Government has been relatively well supplied with surplus funds from tax revenues and commercial banks taking up Treasury bills, the CSB has been relatively safe in relying on such short-term fiinancing. 10. However, there are two dangers in continued reliance on such financing. First, the Grazier Scheme itself has expanded into lending females vhich are a longer term (up to 5 years) loan operation than revolving fattening stock (6 to 18 months). And second, the surpluses in commercial banks can easily be lent directly by them as new credit demands arise in the private and public sector and copper prices, always volatile, could fall precipitously, both factors contributing to a future possible Government inability to continue to revolve and expand its short term financing of a basically medium-term (average 3 years) cattle lending operation. 11. Since the Scheme has contributed substantially to the stabilization of the commercial breeding herd and is likely to play a major credit role in the future expansion of the livestock industry, it is important that the Scheme be financed with a loan whose term is appropriately matched with the term of the cattle loans outstanding. Informal discussions were held with ANNEX 3 Page 4 Government, CSB and commercial banks in Zambia and London. The banks indicated their willingness to discuss with Government appropriate financial and institutional arrangements, including provision of both loan and equity finance, to a possible restructured Grazier Scheme organized as a company (with minority or majority government participation) whose main business would be to purchase and lend cattle to carefully selected and supervised ranchers. ANNEX 4 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT Government Policies for Livestock Development Existing Government Policy 1. The total Government authorized development expenditure for 1966- 1968 was US$458 million equivalent. Of this, about 10% (US$48 million equivalent,) was earmarked for agricultural development; from this amount US$2.3 million equivalent was allottedi for livestock development. The range of Government sponsored livestock projects underway to date is reflected below: (a) The CSB Grazier Scheme: (See Annex 3) (b) Southern P&ovince Grazing Associations: Currently, there are two grazing associations in operation in Southern Province. Each has a membership of about 60 members with long waiting lists. About 300 cattle are involved in each association, 100 of which are store cattle on loan from the CSB Grazier Scheme. The minimum inputs of fencing, dips and water facilities are supplied by the Ministry of Rural Development on credit. Direct management is the responsibility of the association membership, assisted by the Ministry's extension staff. The participants are enthusiastic to expand this type of scheme. Land tenure and the shortage of weaner steers and heifers appear to be the principal constraints in the short run to such expansion. (c) The Eastern Province Grazier Scheme: This Scheme is designed to convert surplus maize and groudnut cake grown in Eastern Province into beef and to expand the already successful Zambian farmer's role in Eastern Province in growing out weaner stock and finishing them for slaughter under feedlot conditions. Under this scheme cattle are lent out to selected Zambian farmers as weaners which, in turn, are grazed and grown out to about 3½ year olds in the farmers' own herd, after which the farmers put these steers on feed under lot conditions for about 120 days. The ration consists of snapped corn and groundnut cake. The whole growing/fattening cycle is conducted under the supervision of the Provincial Animal Husbandry Officer, who also assists in designing the facilities. The average size of the operation involves between 5-10 head with a total cycle time of about 3 years. When cattle are slaughtered, all costs including purchase price, interest, feed costs and administration are deducted and the balances are distributed to the farmer. Experience has shown that the farmer nets between US$35 and US$40 equivalent per head. The major constraint acting on the development of this successful scheme is the shortage of weaner stock to meet the African farmers' demand in Eastern Province. ANNEX 4 Page 2 (d) Cooperative Ranches: Except for one scheme adjoining the Chisamba Ranch in Central Province and two in Southern Province, cooperative schemes in livestock have proven difficult to organize. (e) The Barotse Summer Grazing Scheme: This Scheme was devised to ease grazing pressure on flood plain areas of Barotse. Suitable high region timbered grazing areas were negotiated by Government with the Paramount Chief, on which Government supplied inputs of manage- ment, water, dips, fences, etc. Stock is moved on to these areas by the owner, when the flood plain country is seasonally flooded from the Zambesi river. This scheme, although meeting difficulties in securing farmer support, is beginning to become effective. (f) The Barotse Ranching Development Scheme: This Scheme is an attempt to establish a large scale dry area unit ranch of approximately 400 sq miles in size. The site adjoins the Angola border in a sand veldt area estimated to carry about 1 head to 60 acres. 2,000 sq ml is available to expand this concept. No results are available, as fencing and water improvements are still being installed. 2. Among the policies and projects (now being reviewed and worked up by the Ministry of Rural Development) which are likely to form the basis for a second phase program are the following: (a) a final review and formalization of the land tenure system, neces- sary to ensure an orderly expansion of livestock development; (b) the encouragement (financial and technical) of qualified in- dividual Zambian cattle owners to expand and/or to take up suit- able abandoned ranches located in Central and Southern Provinces; (c) an expansion of the Eastern Province Gra.zing Scheme; (d) financial and management consolidation of CSB Grazier Scheme as a marketing mechanism for live cattle, both feeder and breeding stock; (e) an expanded ran Thing Project in Western Barotse to embrace a 2,000 sq ml ran'ch unit, developed initially on the North Australian large scale ranch concept; (f) technical and economic research into improved pasture systems, leading to large scale land clearing and pasture establishment projects, with priority emphasis on tsetse clearances and con- solidation in Eastern Province; (g) the establishment of ranching settlement schemes in Eastern and Southern Provinces similar in concept to the successful Ankole/Masaka scheme in Uganda; ANNEX 4 Page 3 (h) the improvement of cattle movement facilities, both through better stock routes and improved roads for trucking cattle out of Barotse Province; and (1) the technical and financial support of additional grazing associatiohs in Southern and Central Provinces. 3. To assist the recently created National Lilvestock Development Group in reviewing these proposals and in incorporating the most viable projects and policies (with detailed physical and financial breakdowns) into a program of national livestock development, with subprojects suitable for financing, funds have been made available in the proposed loan for three- man-years of internationally qualified consultant services. ANNEX 5 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT Project Technical Aspects: Maize Feeding, Pasture Itprgvement and Artifical Insemination Maize for Beef Feeding 1. In Zambia it is Government policy to maina;ain an annual reserve of 100,000 tons of maize as well as to satisfy other needs within the country and to take advantage of possible export opportunities, particularly in the Congo. Between 1958 and 1963 deliveries of maize to the Grain Marketing Board increased from 143,000 short tons to 203,000 tons. After Independence Government price encouragement (and the provision of hybrid seed-(S.R. 52)- and fertilizer through credit schemes to large and small farmers) caused de:Liveries to rise as follows: 1964/65 214,000 short tons 1965/66 280,000 short tons 1966/67 410,000 short tons The Central and Southern Provinces account for 60% of all maize grown. At the subsistence 'chitimene' 1/ level of farming, yields may amount to only one bag (200 lb) to the acre; yields can be raised to 14 bags with fertilizer an(d hybrid seed. On good land under commercial production yields are much higher - 25 bags on average and up to 45 bags with good soils and management. 2. The ratio of the price of maize to the price of cattle has moved in favor of maize-feeding as a result of the 1968 increase in the beef price. This as much as any other factor is causing a renewed interest in the practice on both commercial and traditional farms. The comparative beef/maize price ratios of several beef producing countries are as follows: Spain 1:7.7 France 1:8 U.S. 1:11.8 Zambia (a) cost of production of maize 1:14.5 (b) selling price of maize 1:12 From the above, it appears that price returns are relatively favorable, in which farmers grow maize and keep cattle or as maize growers, farmers and cooperatives can buy cattle for finishing. The amount of grain needed to 1/ Chitimene is a cropping rotation system used by the traditional sector. The individuals clear a circle of bush, crop the cleared area until the soil fertility declines and then move on to new areas on which the process is repeated. ANNEX 5 Page 2 produce 1 lb of liveweight gain at a typical fattening age is 8-8½ lb, so that a unit price ratio of 1:8 or lower is not likely to be profitable. The implications of maize feeding in relation to the Project are of importance in raising dairy calves to slaughter weight at 12 to 14 months of age and in finishing steers for slaughter. Pasture Improvement 3. Considerable areas of legume trials have been undertaken through- out Zambia in recent years, both in Government research institutions and on private ranches. Legumes such as stylothanses guyanensis (s. gracilis), phaseolus atropurpureus (siratro) and glycine Javanica are on trial, as well as introductions to veldt and established pastures of Rhodes, Buffel and Star Grasses. Success has been achieved from the technical view point, certainly enough to warrant economic proving trials on Zambia Cattle Develop- ment Ltd. ranches. Provision has been made in the loan to test the following: (a) the economics of a pasture improvement experimental program under ranch conditions; (b) the most suitable species of grasses and legumes for large scale applications; (c) a multiplication scheme for selected types with which to extend the trials to a commercial scale; and (d) fertilizer applications (qualitative and quantitative) for an expanded project and cost determinations on a ranch broad acre basis. 4. Little work has been done by the research organizations or ranchers on determining viable cos0; inputs in land clearing, seed-bed preparation, fertilizer levels, regrowth control, pasture maintenance, expected carrying capacities, all of which are necessary before considering an extended use of pasture improvement principles. Accordingly, funds would be made avail- able under the Project to undertake the following; (a) prepare trial plots of about 80-100 acres on each ranch, broken down into 4 sub-plots, in order to test for pasture responses to the varying soil conditions which exist on each ranch; (b) supplying sufficient seed and fertilizer and application costs for the proving trials on all of the ranches; and (c) sufficient funds for seed bed preparation, including land clearing, burning, windrowing etc. The result!; of these experiments should be recorded closely and compared with other areas of the world. Modern up-to-date techniques should be evaluated. ANNEX 5 Page 3 International sources of legume and grass seed should also be identified and priced for use in any second stage project, which may be justified as a result of these proving trials. Provision would also be made for the services of an experienced pasture consultant as well as a short-term consultant experienced in large scale, low-cost land clearing and preparation techniques. Artificial Insemination 5. Two years ago the Zambian Government established an Artificial breeding center at Mazabuku Research Station. Facilities were established to (a) receive and store semen imported from U.K., U.S.A., and Europe; (b) manufacture and distribute liquid nitrogen, with sufficient capacity to meet the Project's requirements and make available surplus production to meet future demand; (c) train ranch managers and personnel, commercial farmers etc. in artificial breeding techniques; and (d) eventually expand into semen collection, dilution and preservation. Local responses to this new facility have been good in that about 4,000 head of cows in the national dairy herd were settled last year with im- ported semen. Initial target for this program have been determined at settling 75% of the national dairy herd of 10,000 head and increasing quantities of beef cows. The overall average conception rate appears to be about 60% to date on the limited information available to the mission. This is fairly satisfactory considering the newness of the Project and the inexperience of the personnel associated with it in Zambia. Liquid nitrogen supplies are available at 4 centers throughout the country, Mazabuku Research Station, Lusaka, Kitwe and Livingstone, which is adequate for an expanded project. 6. To complement the lack of suitable bulls for the Project ranches, an artificial inseminating scheme costing about US$113,000 equivalent has been included. 35,000 ampules of imported beef and dairy semen would be financed including equipment and services costs, representing 690 bull equivalents over the 5 years of the program. An experienced Australian technician is available in the proposed management of the Project, who gained his experience in Brazil as a ranch manager with King Ranch, breeding 4,000 Zeh.u beef cowt per annum by artificial insemination. 7. This program will assist greatly in accelerating at economic cost the herd improvement program of ZCDL ranches. ZA.PELA ANNEX 6 127VEST00K DEVELWP!&T PROJCT Seven Bralaiasj meBe.Cnoiae/ 08,800 huron UNITS Qew"lcpmnt 1 2 3 L56 7 6.20 BFElA COMPOSTION flredtng Co... lie. 6,610 7,949 10,507 12,660 15,629 ia,6 7J. 19,000O 19,000 I.?, o0 Buill Noi50 369 397 525 633 78.1 93', 950 910 951 CalvOi ~~~~~~ ~ ~~~~No. 15 (3,337) (5,1? 735) (,6) (10,9,0) (13,07:) (13,300) (131,300) (13, 309~) 9 -2, month oifers NO. 30 1,359 3,i68 3,133 1s* 728 5,681. 5,170 3,821 3,021 3,B21 9-21 ,,oth Steers no. 35 66? i,669 2,581 3,677 L,131 5,170 6,535 6,650 6,65co 21- 36 month 11etfer~/ No. 75 - -------- 21,- 36 -oth ersNo. 52 36 ------- 36- 15 month Sneers NO. 80 29 31 - - - - - - Fatterltng Jail Femaiss NO. .35 341, 647 763 1,009 1,229 2,271 2,717 7.765 2,765 tOtAl. ff098112 12,941 19.031 25,167 31i569 3e5490 65,667 16,323 t6,1686 1416,- tOTAl AlIMLA 2TY175 (A/IFs) 94132 13,561 17,530 22,202 26,936- 31,6822 31,661 31,803' 31,11L3 Coos go. 340 310 318 4,20 380 461 160 570 570 Boils No. 18 18 16 21 19 23 28 29 29 9? - 21 month Heifers No.: 68 68 127 137 212 idI 161 115 ijI 9 - 21 month Staeer No. 33 33 6? 103 110 133 161, 196 20kj 21- 36 month Beifers No. - ---- --- 2n- 36 month Steers No. 2 2 ------- 36- LB month Ntoors NO. I 1 I - - - - - Fantoaln CLil EeDassN. 1? 17 26 11 30 37 6882 83 TOM,A- No. 179 179 555 713 681 826 981 992 997 FUR1CB&SE3O Breeding Females 8 - 21, months NO. 50 - 1,500 850 1,050 1,010 - -- - BreedIng Co." NO. 90 - 900 750 650 150 - - -- Breedablo Bulls (tocal~' No. 33- 11 82 19 28 252 io u 6 T03k, BL - 2,531 1,782 1,679 1,72,8 252 i8o i68 165 SA LES Steers 9 - 2, nonthsk' No. 60 - 631 1,602 2,681 3,567 k.298 5,306 6,339 6,450 Surplus Boifers 9 -21 months No. 50 - -- - - - 2, 712, 2,829 2,829 Su-plus Bettears 21 36 sootb. no. 75 - - - - 1 - 2.269 - - Steers 36 - Lemonths No. 110 l8 18 33 -- - - - - cull Betters 9 - 24 monthse No. 30 65 65 152 165 2,59 532 531 371 371 cull Breeding Coos No. 95 j21, 3237 621 732 979 1,191 2,206 2,635, 2,662 Bulls NO. 90 iS BB 38 50 6i. 16 136 139~ 139 TorA. Na, 425 1,132 2,116 3,128 5.8066 6,097 12,162 22,323 22,.7 HLIDS (50% of deaths) 210 210 27B 356 310 413 192 196 198 PBUEICTIOB At fe,hnlcal C-.fflieo.te 9 Itrtollty (adultcattle) % 5 ,1333 caloms uetanod rate 6 60 60 6, 65 70 70 70 70 70 70 CoaandBolleoiie&i 5 25- 10 10 10 15 15 11 15 liefam n .e (91-21 months) 9 5 3 5 5 10 1o 10 10 10 Carrying Copacity AnImal unlts/core 1,20 1,20 1,20 1,17 1,15 2:13 1,13 1:13 1:13 St-ocking Rate Arissal trnite,enre 1s13 1,30 1,23 1.18 1;,15 1:13 1,17 1:13 1:12 Offt,akc 9 3 6 10 11 13 13 26 27 27 Bulls JOcined No/Breedina Cows 1:18 1:20 1:20 1,20 1:20 1:20 1%20 1:.20 1:20 VALLE tF SAtESAM 2 PURICHASES lin D?ACUA) A. Parcchase, Brmeedng Femalesa 9 - 2), months 50 - 75,Om 12,502 52,503 52,500 - -- Brsedlo0 team 90 - SI,O 67,500 12,5D3 10,500D- Breedable Dol-ls 300 - 0,200 51,6o0 53,700 66,100 75,603 51,00o 50,10(2 20 100 70111. P81R125125 196,20D 166.600 146,700 162,100 75.W0 51,000 50,2,0 50,4000 3.solesa Steers 9-2L months 60 - 38,012 86,1i20 18, 860 211,,020 257,880 318,36o 380,310 , ~ 7B, Oo Surplus HeifTers 9-21 monthes 50 -- - -- 135,703 111,150 14,4,l,t Surplos 4ette.rs 2.-36 months 75 - ---- 95,175 - - Steers 36-L8 months 110 1,980 - -- - --- Cull SeLlers 9-24, months 30 1,950 1,950 1,560 1,950 13,770 15,960 15,930 11,130 11,130 Call Breeding Cowe 95 30,780 31.065 58, 95 69,510 93,006 113,11,5 209,5710 250,325 251,790 Cull Bails 90 1,62D 7,920 3,420 L,500 5,190 6,82,0 i2,260 12,510 12,510 TO-ottL sag 36,330 78,975 16.6j9og 227,850 326,285 393,625 766,975 795,755 606 .BS0 l/ 'Before develapmnet:' represents the. date of appraisal and is the begnnsslng of the first development year with toe herd composition shoen as opening in-rntory 2'At appraisal approximately 50% of toes had calved. rherefore, cats-SIng figures are estimates anPlied to the breeding herd daring that year 3/ (ettr3 are rela,etfled Into the breeding hierd and am too calf' as 2-3 year oldsa LiBreedabie bulls Include artlifcial lnsestnattoh -opilementatten for the first 5 years of the Project ~/Steer. are sold at about 14& months of age at ahoot 530 lb. liveweight During Tear I of the prjojet, Oj, order to clean up the herd, 2589 of boll battery, Is coiled and 10% of cow herd. Thereafter 110-15% beak for hetm hlsad cow,s LIVNSTOCS DSVEL4PIBN? PMOnO? Bull Breed ,nh 1 010 acre. B.efors1 Value HEM) COmnsa6C?oN Stud Breeding Cown No. 100 1,272 1,266 1,385 1,380 1,300 1,300 1,300 1, 300 Bulls So. 200 64 63 69 69 65 65 65 65 Calve&'/ So. 25 979) C 97k) (1, co) (1,105) (1,105) (1,105) (1,105) (1,1L05) 9_-21 monyth Heifers NO. So 351. L89 169 99 163 163 163 163 9 -24 mon'th Bulls no. 130 102 490 4.78 544 553 553 553 553 9 -24 aonith Steers Mo. 55 292 -- - - - - - 2..-36 'sooth Hale frs M/ o. 100 - -- --- 24-36 amuth Bull No. 200 61 95 1.56 1.16 507 51.2 542 542 24-36 montLb Steera No. so 92 - - - - - - - Fattening Cual Fenaiss NO. 85 318 312 310 136 135 12B 128 126 TOTAl NIrMBS 3,534 ),48, 3,956 3,7T79 3,828 3,856 3,856 3,856 TOTAL ANIMAL UNITS (Wus) 2,396 2,559 2, 712 2,606 2,656 2,687 2,687 2,687 DEATHS5 Cows No. 25 25 25 27 27 26 26 26 Bulls3 No. 1 1 2 2 2 2 2 2 9 -21.mntnhlHe tfen Sao. 7 7 10 10 9 10 10 10 9 -2Lhon:h Bulls So. 2 2 10 9 11. 11 11 41 9 -24 month Steers no. 6 6 ---- - 2t-36 mon'th Heifers Bo. ------- 21.-36mon,6h Bulls so. 1 1 -2 9 9 10 10 10 24-36 month Steena Nt. 1 1 - - ---- Fattening Cull Femmale SO. 6 6 6 6 3 3 3 3 707*1L So. 4.9 49 55 63 61 62 62 62 tE C HASES Breedirg lieAers 9-21. months Nto.--- - ---- Breeding Cows No. - ------- Breedable Bulls (Local) o.300 a 10 18 12 8 12 12 12 Breadabla Bulls (Impots)eo - -------- to TE No. a 10 18 1 2 8 1 2 1 2 1 2 SALES Surplus Holfere 9-21. asaths No. 60 ---287 1.91. 363 363 363 Surplus MoiLfere 21.-36 months NO. 100 - - - ----- Surplus Buills 9-21. months No. 20 - - - - - - - - Surplus Bulls 21.-36 nmoths So. 300 - - 93 1.7 1.7 L97 531 531 Steern 9-21. maths NO. 65 286 286 -.-- - CulllHsifoirm 9-21.maths No, 1.01 16 25 23 21. 27 27 27 CulliBulls 9-21.maths No. 65 5 5 25 23 26 27 27 27 CullBuhlls (ageda &Wsterile) No. 90 9 9 10 10 10 10 11 311 Cuall fatteining Cows No. 95 312 312 306 301. 133 132 125 125 Steers 214-36 mcniths No. 85 92 92 - -- - - - TC'AI No. 720 720 1.59 1,091. 1,121. 1.0o56 1,084 1.081. HIDES (50% ot deaths) 21. 21. 27 32 30 31 31 31 PRUETXTON 111TA cttltialattle) S 2 2 2 2 2 2 2 2 Calves Veerd Sate % 77 77 80 50 85 85 85 55 Cres culled 5 25 25 25 10 10 10 10 10 Bulls culled 5 10 10 15 15 15 15 15 15 Bull Cslvasculled % 5 5 5 5 5 5 5 5 HBerer culled (9-24 months) % 5' 5 5 5 5 5 5 5 Car3yiog CapCity Animal Untits/ekon 1:17 1. 7 1.? 17 10 7 1:7 1,?17 Stccirwi Bat. Animal AUita/aem Is? 147 1.7 1s7 1.7 1:7 1:? 1:7 Oittake % 20 16 12 29 29 2) 28 28 Bulls 3oimnd No/Breeding Cow 1, 120 1:20 1:20 1:20 1: 20 1:20 1,2 120 VALUE CIP PIICKLS&S AM) SALES (in MC") A. Purchases 1m-flw1e Bulls 2.1400 3,000 5,1.oo 3,600 2,4.00 3,600 3,600 3,600 E. Sales lUrplus Belfars 9-24 flotha 60 - - 1,220 29,640 21,780 21, 780 21,780 Surplus Bulls 24-36 months 300 - - 19,600 89,1.00 87,1.oo 99,100 106,200 106,200 Steers 9-21 anoths 65 18,590 18.590 - ----- Cull Heifars s0 6(AO 61.0 1,000 920 960 1,080 1,060 1,080 Cull Bulls 9.21. months 65 325 325 1,625 1,1.95 1,560 1,755 1,755 1,755 Cull Bulls (sterile) 90 81 810 900 901 goo 900 900 900 Cull Cow 95 29,61O 29,61.0 29,070 28,880 12,635 12,540 11,875 11,8375 steers 24-36 math 85 7,620 7,820 - - - - - - TOTAL. 51155 57,825 57.825 52,195 138,815 133,095 137,1.55 143,590 143,590 I/ "Before developaent" represents the date of appraisal and in the begisaing of the first davelOPment yeaLr with the herd ca¶posltion sho,wn as opening inventory / Lti apprateal approximately 50% of cows had caIlsd. Therefore, ealybng figures are sestimates applied to tim broeding herd during that year /Heifers are reclassified into the breeding herd and are in cal-f as 2-3 year olds /Breedable bulls include artificial insemlnatlon supplementation for the first 5 years of the Project O.0'.'.J,C '--00 '2 ~ '.0 0'. '.0' ~ .0 0 '.-. '.fl0'.Q,.'.40~ 44 44 CJ414OIQ "-.4.04 C - - - - .0- .0'. 4-'-4'.-4 04 a 0 - I'Ll~~~~~~~~~~~~~4; w: ii.- 0- I-K 0-~~~~~~~~~ N N~ 4- 5 as~~~~l040 N H N E~~~~~~~~~~~~~~~~~~~~~~l Tli~~~ 400 00 !51~*'r tc - A?IN ii 6 Timwodel tmoo-rledM BndnWai1ecm 10.000 acorns EDL OF SIMOH YEARS Before URTS D~~ovelw tV I2 3 1.5 6 2 Breeding Cows No. 1,160 1,656 2,680 4,122 6,915 6,300 6,300 6,300 Balla 21 No. IND u~~~~~69 8Th 13 2`0t 21.5 315 315 313 -a. Month lettfers go. j0 348 668 1.,47 1,855L 2,574 1,26' 1,26' 1.2167 9 -Us nwth Steers .1 J. 4 31.6 637 601 1,339 1,721 2,205 3, 2015 2L,-36 mnIbtheHOn;.o. 50 33 - - - 36-IL6 montih Steers Mo. 80 326 - - - Futisoing Doll Peffals. it. 85 113 110 138 252 602 715 907 I,--.T" 3m as ~ ~ ~ ~ ~ ~ ~ ~ .3¶3 3 409 6,18 PO'9,522 22,.119 -IL,'2 S.U.aL 15,lLL Tin& also wa.S (vs/f 262.1 25 -80 4,80" IL.Uj 2371 5,096: !0,545 lo, 5J. Cove no. 5t S 73 107 165 167 189 169 Bulls go: 3 2 4 5 7 99 9 .32, month Holeifr go. 17 17 32 59 76 77 318 )a 9 -24aonthBSteers lit. 17 17 17 17 32 Lo 52 66 24-36 month Holfers No. - - - -- 26-36 mactb Steers NO. 17 17 - Fatteclcu WIl FesLlse Be. 6 6 6 6 10 lB 21 78 Stesro (36-4e months) NO. 16 16 - - - -- torn Ai o. lIt133 132 191. 269 289 309 330 PURCHAISE Breading Notfone 9-264 mnths go. 50 -300 1,050 1,050 1.231, - - - BReading Cow,' No. 90- 15 50 45 0 5 ---- Bread&bls DullsA lbcl)5. 300 - 2 25 90 72 c6 60G4c 'WAl ~~~~No. L 92 1,575 1,690 L.36 96a L: JO Steer ldoo re 9-26 amonh sa. 60 -331. 331 1.20 722 1,299 1,669 2,139 surplus Hatfers 9-24 man tos i o. 50 -- - - - 453 936 938 Surplus Heifers 24-36 monts Mc. 73 5 - - - - - - Cull Heifers 9-24 months No. 30 17 17 31 72 1-28 250 123 123 Coll fattesd Cows Ito. 95 55 107 106 1,32 267 564 69)4 659 cull Bulls go. 90 3 1.1 7 13 20 26 30 3 Steers 26-36 months Ma. 82 - 321 -- - - - - Stears 36.48 months No. 110 312 312 - - ---- MAIL 387 1,096 473 637 1,217 2,610 3,b55 6,1203 iimEs (50% of dona)ha. 67 66 66 97 165 165 15L. i65 tcn caCo-rffloionta SUFT~- 2ta.1catt1E) % 5 $ 5 1 ,323 oalres (Vstand rate) % 60 60 60 65 70 710 70 C.0~ Cow and fls cullot/ 5 20S 10 1a iS 13 25 15 Helferscul.led (9-21,n,tha) 5 5 5 5 10 10 10 IC2 .anytna capacity Animal. lotte/smor 1,12 1t12 1,12 1.10 1,104 1,11C tao 1:12' So-king Rate Animal tnite/acre 1.42 L143 I2,23 1,2. 25:12:I 1:11110 1:10 Itf tako % 12 31 7 6 9 it 22 77 Buxlls 3oimd HO/Breeding cows 2,26 1,20 1:20 1,20 1i20 1:20 1:2c 1:22 VALLUE OF 1A188 JL80 FORCaES (inmAHA Tr*'CTW- Hailers 50 - 15,ooo 52,Soo 52,500 61.70) Breeadial Cows 90- 13,500i 40,500 W,50) Breedabl.a Bulls 300 -12,600 22,500 27,000 21,60o 29,400 12,0D0 12,O00 TorAL r'oromss - 61,10 2,500 1i2, 00 53,300 29,400 12,000 12,000 I~mr.Vusnsn 9-24 ,mthm 60 - 19,860 19,861 25,200 46,320 77,94.0 100,16,0 128,060 39surpla tsfere9-24& mnths 50 -- - - - 22,650 46,900 L6,900 Ctll awaten 9.t21 amotJ 30 610 510 930 2,160 5,340 7,500 3,690 3,690 Cull fatnemod Oem ~~~ ~~~ ~~~~96 ,2 10,165 9,880 12,540 23,465 55,1,80 65,930 6h4,55 Coll lULls 910 270 990 630 1,170 1,800 2,200 2,9L.5 2,945 Steine 24-36 'mtto 52 .-2,2 Steer (fat) 36-66 months 2n0 245320 34,320 ------ "OAL *185 1.0325 92,2647 31,3CM 41t,070 76,925 166,850 213,605 066,03 1)/ 'Eeform do"an1osm. rmrpresnts the, date Or anPnLimal ad 1o Usw beginning of toe first do-lepysnt roar wItb the her cap.10achesm gpetinm nvenc At spraoalo,pozlater 50 ofcow ha caled Therefore, csaving figures &ar estimates enPiled to the breeding herd durng, that yeAr ~/Heifers are reclassified into the brooding bard and are in calf am 2-3 yeaLr aids Breeder bolsL include arttifiil Insemination supplementation for the first 5 years of tho project YSteers are sold at about 16 month. of age at about 500 lb livmmightv During Year I of toe ,ntJect, In ardor io clewn up the herd, 25% af hall battery to culled and 10% of aow hard, Ylenaftsr 10-15% peak for both bulls and -os ZAMBIA ~~~~~~~~~~~~~~~AThINK5 6 it-BIA ~~~~~~~~~~~~~Table S LrvES¶0CK flfltO!`IfNT REJECT Dairy Fare Moe b-(oo Milking Cows (,htR Acres) - ------ Dairy F a rmYearr s ---------- ----- 1 2 3 1 ~ ~ ~~~~~~~~~~~~~~~~~~~~~~5 67-" Herd Cornpouition (and of year) 26 7 1 7 7 7 7 CDws in Milking Fiw ') ~265 3147 1 7 7 77 (C.v. tn Milk Dailyl/ 2 (302(330) (363) {oo() ,..,Cn) (Ccw.vsL-9 Mik aiy) 3 65d. 12 ou57 512 'I~ He, fers (8-2k months) 111: 166S 199 208 225 Steers (5-14 macthe) -119 166 159 703 Total 639 1,07 1,266 i,Wo :,L89 1,5321 1,5,32 Animal Units 131 782 931k 1,010o 1,089 1,125 I'll?, Purc]hases (No. ) 7sifere Cmn-calf) Improved (180K) 165 100 - --- Heifers (tn-calf) Local (120K) 100 35---- Heilfers (8-2h months) (BOX) ill - - - - - Total 379 135---- Deaths 6/ Milking Herd IC5 9 10 11 'Ii1 Calves 10 23 33 37 hi 1,5 Hefers (8-24 months) 1 3 3 5 6 6 7 Steers (8-14 -months) - 5 6 6 7 Total1 15 35 10 58 6),5 7) Technical Coefficients Calving Intervl (onths)5, 13.5 13.5 13.5 13.5 13.5 11.5 -3.5 Calving Rate (S) (annual)>128 88 88 3 8 83 89 8 $81 Lactation Length (amoths) 10 10 10 10 10 11) I 0 Cows in Milk (5 7O 70 70 75 70) 70 73) Mortality Rate -calves ()9 9 9 9 9 9 Mortality Rate -cows ()2 2 2 2 2 2 Mortality Rate - hefers(%) 3 3 3 3 3 3 Mortality Rate -asteers (5) 3 3 3 3 3 3 21 Culling Rate - cows (5 10 10 10 10 20 20 20 Culling Rate - halfars(%) 1:0 10 10 13 13 1 Average Marketed Milk Producticn per Milking Cow - daily/gallons 1.6 3.8 1.9 1.9 1.9 1.91 1.9 Average Marketed Milk Production per Milking Cow - annual/gallon 600 650 700 700 700 700 7'0 Sales (No.)7901930230025,020,0 2800 Milk (gallons)- 7920 29630 31600 2541028,020002 n) Colt Covens6h65 112 112 112 Cull Helfers - 11 11 16 18 222? Surplus Heifers - - - 32 42 53 77 Fattened Steers - los 161 183 202 222 222 Revenue (K) lTT-k (0.37 per gallon)9/ 29,300 72,600 85,500 91,100 103,600 103,601 103,600, cull cows (ll0)±2/ - 2,900 5,100 5,600 12,300 12,301 12,300 Cull Heifers (70) -800 800 1,100 1,300 IL,L5O 1, 500 Surplus Heifers (120)1 -- - 3,800 5,000 6,Lc0 9,205 Fa,ttened Stersr (125)-1 - 114.00 20.100 22.90C 25,200 27,500 27L,570 Total 29.300 90, 700 111,500 127.500 147.100 151.500 15.100 I/ Of total 'ICows in Milking Herd" 70% will be in milk as a daily average during the year except for thes first year whlse 508 of dove,, calving heifer, (purchased) will be i. milk. Calving is all the year and not seassnally. 2/ In Tsar 1, 260 out of 265 purehaeed in-calf hetters win calve doswn during the year. Osn average, 50% (132) of these purchases will be in mnilk daily duerThg this year. The 11.1 hetters (8-21 months) purchased in this year will be inseminated to calve in Year 2. 3/ About 7(15 (231) of herd cantied forward frms previous year (331 will be in milk dailyr during year plus 50% (68) of in-calf heiters purchased (135) duoring year. 4i Calves equal to 0.2 of animal unit. j/ About 95% of purchased in-cal-f hei-ferm calve in year plum 88% of milking herd broaght forward fros. prevw-isa year. 6/ Deaths in Year 1 are equal to one-half of normal mortality for full year as it Is estimated that the full samber of purchases will he phased ini over the year, 7/ All replacement heifers asauned to be in salf. G/ on averbge, cows in milk will produce 750 gallons per acornt of Which 50 gallane will be needed for calf rearing. 9/ Rasic producer price of K 0.35 plus K 0.02 per gallon premium for qusality test. I2/ Cull1 cows - 1,100 lb liveweight X 50% cdw X K 0.20/lb - K 110. 11/ Fattenedi dairy steers 80 lb liveweight I 56% edv I K 26 - K 125 sold to Cold Storage Board. u11NNEX 6 Z.M4BIA Tahle r LIVESTCCK DEVE0PMENT 7ROJECT (1,t5nO Acrets) Before - - - - - - - - --P r o e c t Y e a r s - - - - - - - - - - - - - - - - - - - Development 1 2 3 8 S 6 7->) Herd Composition (end of year) Cows in Milking Herd11 72 h00 377 h00 OO 400 5 on50 (Cows ir. Milk Daily)- (So) (211)2/ (280)) (280) (280) 230) (290) Calves ' 63 386 352 332 352 352 352 392 Heifers (8-24 months) 28 28 175 160 150 160 169 It Steers (8-lh months) 29 29 176 160 151 160 160 Total 192 80 l,8Bo 1,052 1,052 1,072 1,0?2 Aninal Units (a.u.) 2 798 786 771 790 792 79' Purchases (No.) Heifers (in-calf) Improved (IBOK) - 2r0 - _ _ _ _ Heifwes (in-calf) Local (120K) - 0 Heifers (8-2l months) ( 8OK) - - _ - - _ _ Total 320 Deatho (No.) Milking Herd 2 2 8 7 8 8 8 3 Calves 6 6 35 32 30 32 32 32 Heifers (8-2A months) 1 1 1 5 5 5 Steers (8-lb mon-hs) 1 1 _ 5 5 5 Total 10 10 86 h7 h7 h9 50 5:1 Techunic.al Ccefficients Calving Interval (months)4 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 Calving Rate (8) (annual)> 88 88 88 88 88 8r 83 3' Lactation Length (months) 10 10 10 1C 1 1J 10 ID Cows in Milk 1%) 70 7n 70 70 70 7C7 70 79 Mortality Rate - calves (%) 9 9 9 9 9 9 0 Mortality Rate - covs (S) 2 2 2 2 2 2 2 7 Mortality Rate - heifers(%) 3 3 3 3 3 3 3 3 Mortality Rate - steers (%) 3 3 3 3 3 3 3 3 Cuoling Rate - cows (5) 20 20 10 20 20 2n 20 f2` Cuoling Rate - heifers (8) 10 10 10 10 10 10 10 10 Average Marketed Milk Production per Milking Cow - daily/gallons 1.9 1.6 1.8 1.9 1.9 1.9 1.9 1.9 Average Marketed Milk Production per Milking Cow - annual/gallons 700 600 650 700 700 700 700 7 C Sales (Nc.) MillX (gallons)-/ 35,000 128,LOO 196,000 196,000 106,000 196,000 196,0o0 196, oo Cill Co.s 18 lb hO 71 78 79 73 7 Cull Heifers 3 3 3 17 16 15 16 16 Surplus Heifers 8 - - SO 53 85 53 5 Fattened Steers 28 28 171 155 107 155 155 154 Revenue 6/ MS1lk (K D.37 per 9llonP 12,900 87,500 72,500 72,500 72,500 72,500 72,500 72,50(c Cull Cows (K 110)_ 1,500 1,500 8,400 8,100 8,600 8,6oo 8,6oo 3I r6 Cull Heifers (K 70) 200 200 200 1,200 1,100 1,100 1,100 1, 120 Surplus Heifers (K 120) 1,000 - - 6,000 6,800 5,hOO 6,100 6,400 Fattened Steers (K 125)- 35°0 3,500 21,400 19,400 18,h0 19,8h0 19, 00 19,hO- Total 19,100 52,700 98,500 107,200 107,300 107,000 108 o000 l0P,-)_ 1/ Of total "Cows in Milking Herd' 70% will be in milk as a daily average during the year except for the first year when 521 of purchased in-calf heifers will re in milk. Calving is all the year and not seasonally. 2/ In Year 1, 316 out of the 320 purchased in-calf heifers will calve down during the first year of the Pro7ect. On average, 5o% (158) of these will be in milk dail during the year plus 70% (56) of the milking herd carried forward (80) from the previous year. 3/ Calves equal to 0.2 of an anrmal unit. / All replacement heifers assumed to be in calf. 5/ On average, cows in milk will produce 750 gallons per annsm of which 50 gallons will be needed for calf rearing. About 20% will give 600 gallons, 20S 700 gallons and 60% 800 gallons. 6/ Basic producer price of K 0.35 plus X 0.02 per gallon premixe fLwr quality test. 7/ Cull cows * 1,100 lb liveweight 1 5o% cdv X K 3.20/1b - K 110. 8/ Fattened dairy steers * 850 lb liveweight X 56 cdw X K 26 - X 125 sold to Cold Storage Board. ANNEX 7 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT Ranch and Dairy Farm Areas and Capacities Area Carrying Capacity Category and Name Province (Acres) (Animal Units) Breeding/Weaning Ranches Chisamba Central 37,510 2,800 Kitwe North Western 70,000 5,300 Mkushi Central 46,250 3,500 Solvezi North Western 106,770 7,000 Kalomo Southern 80,000 6,000 Mugoto/Wolverton Southern 20,000 2,800 Katete/ChinJara Eastern 48,260 4,700 No. 8 Southern or Central 55,000 5,300 No. 9 Southern or Central 55,000 5,300 Breeding/Fattening Ranches Mbala Northern 109,000 6,000 Chishinga Luapula 104, 770 5,800 Bull Breeding Ranch Monze Southern 20,000 2,700 Dairy Farms Gravetts Central 1,500 800 No. 2 Southern or Central 3,500 1,000 No. 3 Southern or Central 3,500 1,000 No. 4 Southern or Central 3,500 1,000 No. 5 Southern or Central 3,500 1,000 ANNEX8 Table 1 Z&MBIA LrVVSTCK DEVELOP?W1T P!WJRCT Beef Raniche. Op-rting Coati; units 1 2 3 65 6 7 Breading Weaning Ranchee (408,790 acre.) Headq-aters Coat 35,800 35,800 35,800 35,800 35,800 35,800 35,800 35,809) Ranch Managanent 70,280 70,280 70,280 70,280 70,280 70,280 70,280 70,28') Rent 4,088 6,088 4,088 6,088 6,088 6,088 6,088 L-8 Labor 43,890 67,888 56,875 68,892 76,067 77,008 76,529 7L,5291 Dipping 0.57 7,902 10,153 12,655 15,354 18,059 19,596 18,182 19,132 Veterinary 0.6 0,318 10,687 13,321 16,162 19,009 20,627 19,139 1,3 S.pple,et.ry Feeding end Mineral. 3.00 41,592 53,636 66,606 80,808 95,0646 103,136 95,697 95,617 Tractor Operating 0.33 6,575 5,878 7,327 8,889 10,655 11,365 10,527 10',527 Water Oeaig0.20 2,773 3,562 6,660 5,387 6,336 6,876 6,380 6,3Rn Ranch Ornperating 8,900 8,900 8,900 8,900 8,900 8,900 8,900 9,Q"0 Mntrenean rt-15,610 23,538 27,738 29,760 30,810 30,986 30,996 30,986 Horses 1,800 2,070 2,190 2,490 2,690 2p.90 2,0.0 2,600 Repl-ac.eet Costa - - - - - 1,016 18,016 19,016 Boll Porch.... - - - - - 56,000 50,600 51,!,00 Subtotal 265,328 276,280 310,220 346,790 375,360 663,166 665.616 665,611 Contingencies (10%) 26,533 27,628 31,022 36,679 37,536 66,315 L6,561 46,511 Total 269,861. 303,908 361,262 381,669 612,876 509,661 .,89, 955 105~'9,55 k-srge Cost in K per A.0. 19.5 17.1 15.6 16.2 13.0 16.8 15.6 I15.;, Br-ding Fattening Ranches (216,'000 a-re)I B.adqOartewoCost 13,600 13,4.00 13,6,00 13,6,00 13,6,00 13,100 13,600 13,100 Bench Mmnagemoent 26,160 26,160 26,160 26,160 26,160 26,160) 26,16o 26,160 Rent, 2,160O 2,16,0 2,1610 2,160 2,160 2,160 2.1L0 2,110 Labor 12,673 16,056 15,003 21,027 22,665 27,626 27,666 27,716 Dipping 0.60 2,577 3,607 3,975 5,330 6,301 7,031 6,935 7,085 Veterinary 0.63 2,706 3,577 4,176 5,597 6,616 7,382 7,282 7,665 Supplementary Feeding an Minerals 6.20 18,039 23,868 27,825 37,313 66,108 69,216 68,566 69,596 Tractor Operating 0.37 1,589 2,101 2,651 3,287 3,886 6,336 6,276 6,369 Water OprsrtlnL/ 0.07 301 37 4666 622 735 820 809 827 Rmanh7rasop ort~ 2,700 2,700 2,700 2,700 2,700 2,700 2,700) 2,700) M aItnance 2 6,022 8,600 9,797 10,655 10,966 11,676 11,676 11,067 Horses 480 560 720 720 860 860 860 9650 Rep Iaesment Costa - - - 6,067 6.067 6,067 BoIL Purchaaea - - - - -15,300 12,900 12,910 3ubtotal 88,787 100,926 108,809 128,751 160,675 176,676 170,975 172,699 Contingencies (10%) 8,879 10,093 10,881 12,875 16,067 17,667 17,270 17,270 total 97,666 111,019 119,690 161,626 156,522 191,921 188,265 189,969 Aeer.ge Coot in K per k. U. 22.7 19.6 18.1 15.9 16j.7 16.1. i6.i 16.i Breeding Weaning Ranches (110,100 acres) Headquarter. Coat - 16,000 16,000 16,000 16,000 16,000 16,000 16,99)'0 Ranch Managesment -15,280 27,280 27,280 27,280 27,280 27,280 27,251) Ren t- 1,100 'o 1,100 1,100) 1,100 1,100 1,1001,0 Labior - 10,9158 13,185 16,002 22,173 23,126 26,077 26,077 Dlipping 0.57 -1,671 2,760 6,055 5,345 5,677 6,011 6,011 Veterinaxry 0.60o 1,568 2,886 6,268 5,626 5,976 6,327 6,327 Supplementary Feeding end Minerala 3.00 -7,760 16,621 21,362 28,131 29,880 31,635 31.635 Tra-tor Operating 0.33 -851 1,586 2,3468 3,096 3,287 3,680 3,690 Wat-. Operating, 0.20 -516 961 1,623 1,875 1,992 2,109 0,1009 Smoob Traingrt6( 2.6D0 2,400 2,600 2,600 2,600 2,607 2,609 Maintenance- 4 ,266 6,368 9,212 9,778 9,806 9,826 9,926 Horase - 680 4.80 860 860 86 0 8691,0 Replacement -Costs - - - - 6,807 6,807 6,807 Bull Purchases - - - -- 12,000 12,000 12,000 !3ubtata1 - 60,608 87,405 106,270 121,662 162,189 065,892 165,092 Contingencies (10%) - 6,061 8,760 10,427 12,166 16,219 16,589 16,589 Total. - 66,669 96,165 116,697 133,806 156,608 160,68i 160,181 RrA-ge Coet in K per A. LT. - 25.8 20.0 16.1 16.3 15.7 15.2 15.2 Boll Brooding Raneh (18,600 acres) Headquarters Cost 3,000 3,000 3,000 3,000 3,000 3,000 3,D00 3,077 Bench Management 11,600 11,600 11,600 11,600o 11,600 11,600 11.600 11,610 Rent 186 18 184 18 186 186 186 186 Labor 7,825 7,122 7,016 7,066 7,0917 7,097 7,097 7,097 Dipping 0.57 1,947 1,566 1,685 1,516 1,532 1,532 1,532 1,532 Veterinary 0.60 2,049 1,627 1,564 1,596 1,612 1,612 1,612 1,612 Supplesenta,ry Fssding end Rizasra.s 3.60 12,296 9,763 9,382 9,562 9,673 9,673 9,673 9,673 Tractor Operating 0.33 1,127 895 860 876 887 887 887 887 Wtatr Operating, 0.20 683 562 521 531 537 537 537 537 Reach. Traoqrt,!/ 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Maintenance- 3,042 6,500 4,5o0 6,5oo 6,500 6,500 6,500 6,500 Horses 680 6480 680 680 680 680 680 690 Replacessent Coot. - - --- 2,205 2,205 2,205 B,1ll Purchase.s - - - - 3,600 3,600 3,600 .Iubt.tal 65,731 62,759 62,0912 62,607 62,602 1,8,607 68,607 68,607 Conhingencieo (10%) 6,573 6,276 4,209 6,261 4,260 6,861 6,861 6,861 7otal 50,3014 67,035 66,301 66,668 66,862 53,268 53,268 53,218 Av'eirag Cost In K per A. [J. 16.7 17.3 17.8 17.6 17.4 19.8 10.8 19.8 Total Oporating Coate 617,8131 528,631 603,378 686,660 768,066 911,038 893,653 893,653 71/ Frm M&ng.-tn and g.eneral-vetic1e running est- incIoiaing fnel, oil., reais oplaoemot ca aicln.nb, Y/' Calcolated on capital coat,, at the fol1osing percentages - fencing 6%, rod % ater 5%, buIldings 2V~, handlng unita and spray races 5%, ffasitosoving eao11hjmery 10%, ao-mwooving machinery 5%. LIVES7OCK DEV FM,0 UT PIOJECT Daryer,a t b~.tn Caste o i 2 3 4i 5 67 " Iravette Dairy Pare. Hleadqaartsrs Cant 2,300 2,300 2, 300 2,300 2,300 2,300 2,30'1 "no02 0' Pa- K-age.eit 6,000 6,000o 6,000 6,700o 6,000 6,000o 6,0, ON 000 Rmt ~~~ ~~~~~15 is is5 1 5 15 1 5 105 10q L:!bonr 750 3,150 3,960 6, 200 6,200 4,200 6,200) 11 In'0" Veternryad Spraying 150 630 790 860 860 960 98671 Purchased Feed 1, 000 6,200 5,280 5,600 5,600 5, 6oo 5,600, - Cropping end Pature. Feed 2,000 8,600 10,560 11,200 11,200 11,200 11,20) 01, T,-enert 250 1,050 1,320 1,600 1,600 1 b.600 1,40") I Mai~tenance 850 3,570 6,690 6760 6,760 6,760 6,767 -."" Ro!plane-tet Caste 900 - - - -- toOL) I'l Ar~tificial Instain200 -- - - - 1,207 1 5 H.12w ReI.rn 1,600 1,600 8,010 7,200 8,000 9,000 307 St,eer Rearing 200 2,030 11,200 1010 11,200 11,200 11,20') i Sobctatl 17,815 27,365 53,915 53.665 s5.iso 05,180 61,753 061 - C-ntingencies (10%) 1,800 2,700 5,4oo 5,400 5, 5o0 5,500 6,20') 6,) 00 Total (rounded) 19,600 30.ODD 59,300 59,100 60,700) 60,700 68,00 "'00E.-, Dairy Fan, No. I HoIadqu.rt-r bet - 2,900o 2,90 2,900 2,900 2,900 0,900 2,0%) 2,900 F-ro Maoag.geit - 7,000 7,0M0 7,000 7,000 7,0)0 7,00) 7),"00 0 000 R-ot -25 25 25 25 25 25 7 la,bor 3,000 5,200 4,6D0 5,700 6,000 6,000' 6.000fY0 Ve~terinary and Spraying -6C00 1,00 900 1,100 1,200 t,20) 1,2-00 P.rohased Peed - 6000 6,900 6,100 7,600 8,000 8,00M 8.00 I,00 Cropping and Pasture Peed - 8,000 13,800 12,200 15,100 16,000 16,007 16.00 100 Transpor~t - 1,000 1,700 1,500 1,900 2, 000 2,000 2.7200 Maintenance - - - - - ~~~~~~ ~~~~~ ~ ~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~6,800 6,Ro,) 6,60 6,000n Artificial Insenination--- - - - 1,700 1.7"1) 1,700 Hetfer Rearing - 5,700 5,900 6,300 9,600 11tIrn 11,4071 11.607) 1110 Siter Rearing -- 8,300 11,600 13,200 16,600o 16,000 16.770 ISo"' Subwtotl - 32,225 52,725 55,125 63,925 75,925 06,020 91,07C 9L6725 Conti,igenciea (10%) - 3,200 5,300 5,000 6,600 7, 600 6,600 610 , ,10"'L Total (minded) - 35,600 58,000 60,708 30,300 93,500 00,40) 02,1,hn0,0 Dairy Perot No. 2 Meadquamtera Cost - - 2,900 2,900 2,900 2,900 2,900, 2,700o 2 ,700) Pa- Mangenet -- 7,000 7,000 7,000 7,020 7,000 7,0"') 7,00.0 Rent --25 25 25 25 20 70 70 L.bor -- 3,000 5,2n0 6,600 5,700 6,007 6,0)0 Oct Vetwrinary and Spraying --600 1,000 900 1,100 1,207 1.0.)1,20 P-rhase d Peed 4 ,000 6,900 6,100 7,600 8,001 P 8,o)orno Cropping and Paetere Ped -- 8,000 13,800 12,200 15,100 16,000 16,000 16,Yrn transp,t -- 1,000 1,700 1,500 1,900 2,001j 27.000 2,000I Maintenance - - - - - - - 6,6cco 6,300 Replacene.t Ca.st------- 5,000o 5-000 Artificial lnseninetion - ------170 1,700 leifer Rearing - - 5,700 5,900 8,300, 9,600o 1140o1,.0 1, Steer R.a-Ing - - - 8,300 i1,600 13,200 16,6o0 1,07 1,0 Subtotal - - 32,225 52,125 55,125 63,9125 78,928 61,020 0,0C25 C-oteige,oiss (10%) - - 3,200 5,300 5,500 6,600 7.603 0.1000, Tontal (r-,adei) - - 35,600) 50,000 60,700 70,300 83,501 92,100 72,100, P.r ame No. 3 Headquarters Coat - - 2,900 2,900 2,900 2,900 2. 900 2, 0)0 7,107 Par. Managenet - 7,000 7,000 7,000 7,0OOC 7,000 7,070 7,00)O Rent --25 25 25 25 25 70 " Lab or -- 3,0O0 5,200 6,600 5,700 6,O00 0.010 0,0-I Veterinary and Spraying -- 600 l,000 900 1,100 1,200 1,2')0 1, 200 Poochased Feed- - 6,000 6,90 go 6,100 7,600 8,000 8,1000 8,ooŽ~ Cropping and Pasture Peed -- 8,000 13,800 12,200 15,100 16,Ooo 16,ono 16,000r Traneport -- 1,000 1,700 1,500 1,900 2,000 2,0 2,000 Artificial Insein.ntien--- - - - 1, 7oo 1,70) Heifar Rearing -- 5,700 5,900 8,300 9,600 11,600 11,600 11,1L"" Steer Rearing --- 8,300 fl,600 13,200 l6,60o 16,000o 16, " Subtotal - - 32,225 52,725 55,125 63,925 75,925 96,020 86,120 lontingmoiee (10%) - - 3,200 5,300 5,500 6,600 7,600 8,beo 8o,60 Total (rounded) - - 35,600 58,000 60,700 70,300 83,500 92,1,00 72,110 Dairy Far Nio. 6 Headquarters Cost - - -2,900 2,900 2,900 2,900 2 , -0 2, 900 Pare. Managent - - 7,000 7,0DO 7,000 7,0O0 7,7", 200 lent - 25 25 25 25 20 25 Labor --- 3,000 5,200 6,600 5,700 S co)n' 9eterlary anM Spraying ---600 1,000 900 1,100 1,220 1,200 Purcha-ed Peed -4 ,000 6,9o0 6,100 7,600 Sooc 8,0co Croppin,g and Pasta,r Peo,d - ,000 13,800 02,200 15.300 16,oc,o i6,cooo Traspor t --- 1,000 1,700 1,500 1,900 2,000 2 ,000 ,AIntenanne - -- -0 Nepiaceieot Costes 5,700 Artificial Iniialo---- - - --1,700 Heifer Rearing -5 ,700 5,900 8,300 52,~00 11,60) 11.400 Steer Rearing - - ,300 11,600 13.200 1lOO6 1iSs0c Subtotal --- 32,225 52,725 55,125 63,925 75,028 I, 81.25 Contingencl-e (108) - ,200 5,300 5,500 6.600 7,6')0 9.100 Total r,sooded) - 5,600 58,000 60,700 70,300 83,5SOo q2,100 LIVESTOCK DEVEI,OPPEXT PR0JF(.T PR-ojct I0r5,tAfnnts (K) Boul Breading/ B-.d1,g/ Or-ott. Daliry Dairy Dairy' Dairy Por.ign Total. CATMIOR! 3.4ota/ KttO.! Brooding bemning Washing Dairy Fare Fa- F-r F-r, us Dola'r axhshage Freig,. Chi ... a WoIsrtou lUnoahi 1010cc titos Sow-i ml4cl Chiahinga. Chinjure Ranch Ranch Reach Fae i i o v Total. fa-lsa t az -- P.oi,,g 3,610 - 4,280 30,000 12,300 3900 10,90 36,500 17,700 - 13,000 13,000 500 11,100 11,100 11,100 11,100 228,220 315,310 80 252,210 tireb.oakz 610 3,t01 700 8,500 4.200 8,200 1, 700 6,200 1, 500 3,100 3,100 1.00 - - - - 43,940 61,520 6,0 36,910 Road, 250 330 2,020 8,600 2,100o 10, 70 200 6,5ou 600 - 7500 2, 500 - 13~-02 1,300 1,300 1, 300 Li.800o 58,520 70 L0, 60 Water 12,310 5,000 12,950 17,000 27,600 25,80I0 21,900 9, 700 16,100. 25,300 13,100 13,400 5,200 15,500 15,5010 15,500) 15,500) 257,660 360, 720 70 252,500 Buildings 7,500 - 9,50D 17,900 19,600 39,200 16,800 28,200 13,100 - 13,100 13,100 14,500 53,100 53,400 53,100 53,100O LOS, oo 568,540 50 201,270 Spra R.a.e UAn Handling Tard. 2,000 - 2,000 10,200 2,000 9,500 2,100D 8,10 LOD L ) - 3,100 3,100O - - - - - 17,(000 65,800 5 o 32, ~00 rrnot.rm, maih.,achnery 5,820 7,870 5,250 29,400 8,6o0 13,200 12,700 9,300 19,800o 32,100D 10,300 18,300 9,900 12,200 12,200 12.200 42,200 359,610 503,500 100 503,500 Offics ,OWIPeet - - - 1,1.0D 1,WO 1,500D - 1,700 3,000 4,100 3,100 3,100 - 2,100 2,100 2,100 2,100 30,00 12,000 60 25,3013 -ocs n oqip-et 210 600 - 2,800 600 1,0ODD 1,900 2,300 2,100 300 2,100 2,100 --- - - 16,010 22,1L60 30 6,738 Radio *qipc0nt 1,00 - 1,000 1,300 - 1,000 1,100 1.000 1,000 - 1,00 1,~ ODD- - 9,1400 13,160 100 13,160 Land cl,o-ing- - - - - - - - 5,600 -- -5,600 7,840 90 7,056 silngs pit. 1, 900 3,600 3,600 3,600 3,600 16, 300 22,820 50o 11,L10 Blalry sOsoip,et - - - - - -- ---- 17,900 17,900 17,900 17,900 fl,600 100,210 90 20,220 9iectricity i-otallatio - -- -- - 2,00 2,000 8,000 2,000 8,000 11,200 L0 1,150 So.b-?oiuj 33,100 1.6,8000 37,700 129,800 78,300 1.19,100 69,300 109,800 81,900 52,100 73,00 73, M 37,900 1.9,100 1319,100 149,100 119,100 1,538,300 2,153,630 - 1, 561, 5 ,, Beef 33,600 2h,000 58,300 217,100 121,400 163,00 101,000 89,800 126,6o) 18,0)0 179,100 179,100 - I. - 1,312,600 1,837,610 - Dairy - - -~~~~~~~~~~~~~~~~~~~~~~~9, W 31,0 17- 0 19-0 ?0-( 70,15,007,007,0 7,0 7,0 313,000 160,200 70 33,0 total 67,000 10,800 96,000 317,800 199,700 312,100 171,100 199,600 200,500 70,100 252,100 252,100 88,300 222,2930002 222,2002.20 222,200 222,2000 3,191,000 1,171,170 - 1.8897661 contlngssoie. 6,700 1,100 9,600 35, 000 20,000 31,200 17,100 20,0 21, 7,000 0,0 520 890 2,0 220 2,0 220 3000 1., 1,0 riot .)t.r 73,0)"190 10,60 8220 219,700 313,300 188,100 219,600 229,500 73,100 277,60) 277,60) 97,200 21,100 241,100 211,100 211,10_ 3,51140 199,3t - o30o9 T1.gui-- a.n8 Cosuta... ,h 87,600 122,6b0 60 70,0OM Buhiadinat aun 81, 30 113,820 100 113,823 - ~~~~~~~~.t.al 3,829,900 5,361,730 - -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~389,0 531,3 300,oo 620,000 - Total 1,129,900 5,780,730 13 2,h97,301 Oftit. -d Costs ~~~~~~~~~~Cnst/nu,it a/ PRouical InneR.. Unit. .8 Costs Dofta J~~~(K N., of thoOt. b/ Technical _ersice for TOOL G.0Ooraa Mmsagn,t pant (,tts,aialyq li e 1..m gtofivsok praeo 916 Y""~~- o yer t Iccha 18,000 '- year hRich t.0l1dd,s salar, haousng, medical, end educational aJo j...lav n r..cingV N~~~~~~ ~ ~ ~~il. 216 91160 Crtl, sol'tant serUico t- gaSsit ZCDL And Na-ti0nal Livestock,DelpetGopI paigft.rnh. 20 1,0 aryf- atincal liestock secor py-ag~ra-, tijtfijcial jo~ ineanatl,DMcrap.., lir-sot0k atiring facilities an-d Miles 200 209 ~~~~~~~~~~~~~~~~~~~Peator i.ProsMent schome. Thre e.-er ticlc ot( n abc,.) o Kech l9~ Planning fto rmcnsohtact BualMr .- Ranh Uni t. 15,157 17 sa f nat.ohl119qalifiepar yearr efpsotir fields Spray Raeas Unihts I 27,073 15 1t---t''l -fd' h~ --i il. STractorse. c, UnIt, 2,000 26 rOctor,, Usicla. I-har52Rnh Unit, 21,155 17 H.r as -I qoipt Rsnch Un,its 2,00r) 12 HRadio S qp ljt Head 180 89 Raio Clearing Units 1,000 10 1,nd. Pitsar A-re 20 200 UUT &Qipmmt.6/ ~~Unit. 1,800 9 211.6tPicty 6 DLIry Units 17,900 1, Ilactrlcity ~~~~~~~~~Dairy Uhits 2,000 l/I nCl.d.. artern.1 and internal f-ecing 2/ I-clodeS track,, grids, bridgee, et-c. I-cI.des borehole., dens, ceir,, PiPIng, PnoPS, c1ndBills, troughs. etc. Includes housing, offices and store, 2/ Include, tractor,, land coe,pl-ghl, ag rioIttoa1 sq.ipsent, gradsr, tanker,, etc. 6/ Incud.hes ier gbceco, separators etc. ZAMBIA LIVESTOCK DEV0ELOP RT D?OJECT Artificial Innemination Proeram - Cost Estimates (Ii) Y e a r Total I t e m Quantity K US$ 1 2 3 5 Capital Items Land Rover 1 2,500 3,500 2,500 -_ 2,500 3,500 Large Storage Canister 3 500 700 1,000 - 500 1,500 2,100 Ranch Canisters 17 160 202 3,060 - - _ _ 3,o60 4,28 Microscopes 11 100 140 1,100 - - - - 1,100 1,540 A.I. & Veterinary Equipment 2 1,000 1,400 1,000 - - 1,000 - 2,000 2,800 Electro Ejaculator 1 L62 65j 6o2 - - - - 462 660 Portable Generator 1 2 80 200 - - - - 200 280 Semen Roran Charollaise Bralmuan ex Kenya (2,700 doses) (3,400 doses) (6,000 doses) (7,500 doses) (8,400 doses) (Beef Ranches)1/ 2B,ooo 0.70 0.98 1,9O0 2,380 6,200 5,250 5,88o 19,600 27,660 Bull Equivalents 65 85 150 182 210 692 Dairy Farms (300 doses) (900 doses) (1,500 doses) (2,100 doses) (2,400 doses) Friesian Progeny Tested?! 7,200 3 4.20 900 2,700 6,500 6,300 7,200 21,600 30,240 Freight Costs (Estimates only) 35,200 60 84 180 258 450 576 668 2,112 2,956 Liquid Nitrogen3' 7,850 0.t5 0.3r) 707 707 707 707 707 3,535 4,945 (Liters) (per liter) 1570/annum) Labor Technicians4/ 10 1 1.40 2,830 2,830 2,830 2,830 2,830 14,150 19,810 Bonus/Cow Settledl 10,501 0.20 0.28 199 307 625 538 631 2,100 2,961 (Cows settled) (per cow settled) Subtotal 16,029 9,182 13,612 17,201 17,896 73,919 103,696 Contingencies - about 10% 1,672 918 1,388 1,699 1,706 7,381 10,604 Total 17,700 10,100 15,000 18,900 19,600 S1,300 113,900 1/ 20% of beef cow herd bred by A.I. allowing 2 amoules of frozen semen/cow 2/ 100% of dairy cow herd bred by A.T. allowing 1.5 amoules of frozen semen/cow 3/ Assessed on 110 liters/month required for canister for storage and transportation, i.e. for 19 canisters 1,570 liters ner annum s Y 0.L5/liter of liquid nitrogen / Allowance has been made for 35 ngwee (us$ 0.69)/per day over the normal daily rate for ranch labor of 65 ngwee (US1 0.91)/per day for a total daily wage of K 1 (US$ 1.40)/day, working 283 days per annum. Also includes total wage benefits 5/ A bonus incentive has been allowed of K 0.20 for every cow settled (not served) by A.I. This is shared by irisesinating technicians aid herdsmen resnronsible for heat detection 6/ For Iroject years 6-20, sufficient bulls will be available from local sources and/or ranch bred for natural service. ,ontinued A.l. costs for dairying are included under dairying operating estimates 'A 0 ZAMBIA LI'fESTfi-v DF rj?H34B T "ROJECT Pasture Development Proving Trials Unit lb/ Tear 1 Year 2 Year 3 Year b T o t a 1 Inputs Cost Acre Acre Cost Acre Cost Acre Cost Acre Cost Acre Cost Land Preparationl/(l,OOO acres) Clearing and Windrowing 17.50 - 550 9,625 350 6,125 100 1,750 _ __ 1,0OO 17,500 Grubbing and Root Raking 17.00 - 50 850 - -- - - _ _ _ 850 Seed Bed 18,00 - 550 9,900 350 6,300 100 1,800 _ _ _ 18,000 Planting Fertilizer Cost 45/ton 300 550 3,712.50 350 2,362.50 100 675 _ _ _ 6,750 Legume and Inoculant Sced Cogt2/ 2/lb 8 50 800 - - - - - - - 800 Grass Seed Plus Legume./ 3/lb 3 500 L,500 350 3,150 100 900 - - _ 8,550 Harvesting Legume Seed 1/lb 100 - - 50 5,000 50 5,000 50 5,000 - 15,000 Grass Seed .20 30 - - 100 600 100 600 100 600 - 1,800 Maintenance Regrowth (mechanical) 1/acre - - - 550 550 350 550 100 100 - 1,200 Regrowth (chemical) 1.50/acre - 550 825 350 525 100 150 - - - 1,500 Fertilizer 15/ton 150 - - 550 1,856.25 350 1,181 100 328 - 3,365 Reseeding S50/acre 1 - - 550 225 350 175 100 50 - [50 Subtotal - - - 30,213 - 26,691 - 12,781 - 6,078 - 75.766 Contingencies 5% - - 1,510 - 1,335 - 6s0 - 30u - 3,789 Consultants 2,000/annum - - 2,000 - 2,000 - 2,000 - 2,000 - 8,000 Total -- - - 33,723 - 30,029 - 15,421 - 8,382 1,000 87,555 1/ Costs supplied by Ministry of Agriculture, Machinery Section, should not be usea as indicative of second stage large-scale oroject, as modern low cost land clearing techniques unknown to Zambia at oresent would be used. 2/ Estimates based on Kenya Source cif costs 3 Estimates applicable to Australia plus freight to Zambia 93]; ID v 'fi ZA,Ve33A AIMEX 7 LIVrSTOCK DEVtLOP?IENT P1OJEcr R',asin sO Fro act Inct Unl T e a r s ' 2 3 L , D7 2c 1. B6SEMING/WNla1ING FiNCH0S TF77T:._ Input, 31.500 300 30D 700 -133 , ,00) Livestock _ 5,hoo o,LoO 8,6L9 8,L90 3 I61 ff. aI -upZts 13,100 30c 2,200 300 630 0 Livestock _ _ 7,200 8,10 Lo,0 2. r. O l. Ihushi Ptsical Inputs 35,500 3c0 300 700 D0 - 'n Live-to-k 1,800 26,500 9,600 10,200 10,203 .2,510 D. Kal o,o Physical inputs 80,200 35,200 9, 700 4,000 70 12- tn Lreasto:k 70 ,500 3L,Soo 3,600 66,200 12,600 210,1.20 0, Iats. pSystcao Iopcnpts LL 600 33L, 70 500 500 1,900 71i, '0 L!veotock 8, 300 2L,900 19, ,00 35,0oO 10,500 121, 10 P. Sol,qzl PFlca31 inputs 52,a8o 10,3L70 U8,900 29,100 5,000 IL,. I 1 Livestock 40,200 36,5o0 39,300 29,L00 17,600 16 i P4iysicai inputs 32,900 35,300 9,300 3, 00 1,60'L ol, 8 Livestock 35,Loo 33,800 29,200 20, 00 '600 ill, £03 TOTAL PFHYSiCAL IPsJTS 287.600 116,60D n 290 38,300 13,500 527010 1oTAL V152TOcK 196,200 16L,600 1l66700 161,1L00 75,6o_ 711, oO Sub-Totaa L83,500 281,000 217,900 199,700 85,900 1,271,300 :3. BR&8,fi0/FAt5EI1L0 RANCHLS A. .(tbLa vaical inputs 26,200 30,500 5,400 3,200 1,030 6o, no Livestock 32,500 37,o00 S,400 12,000 C 1,.Oi 101,7(10 B. cOlaIhiga a i Inputs 53,400 400 20,400 800 3L, 8100 500 Lia'tock 25,300 36,500 13,200 7,800 6,200 86,303 TOTAL NYSICAL inPUrS 79,600 30,900 28,500 6,00 35,500 S 73,10 TOTAL LIVE3TOCK 58,300 7L,200 21,600 19,800 17,6on 191,gil 3ub-To-al 137,30D 105,loo 50,600 23,800 53.1,00 371,607 111. BULL, BRELDING RANCE 68,200 700 700 700 1,500 52,100 Livestock 3, 007 5,40o 3,603 2,100 3,600 1iS,n 3ul'--o-> 51,203 6,lcO ,300 ,1,00 1,103 30,1DC rv. 2 kIREEDINGl/WANIO RANiCHES Physical iu,pT - 60S0Do 36,000 30, OO 20 ,00 166, 30 Livestock 4 60,100 115,500 120, 00 83,303 35S, 3gn Sub-Total - 100,100 151,503 150,000 103,30D 50oL, -0n1 V. OPAVEOTS LAIRY PARK 1ysical Inputs 27,900 7,200 700 1,700 L0C 37, ni - vestock 15,100 16,000 13,900 0,200 2,L.0C 0 o Sub-Total 43,000 23,200 14,600 L,900 2,800 58,SOO VI. 11ODEL DAITR FAPJ5 .i Fp. S, P5s$icaYl T6.ps S2,200 52,200 13,30D 1,400 - 1S?, 00 Liveatock 50,a0x 22,300 - _ 73, 00 Dai ~rs a No. .2 ?Walccl 3Lputs 82,200 52,200 13,300 1,LDO 96I0,1 Livestock - 36,000 37,100 - - 73,1CO Dair Fanu No 3 Phyafc l Inpu:s - 82,200 52,200 13,300 1,400 413,100 Livestock - 50,.00 22,300 - - 73,100 Dalr7 Form lO. 4 IPhy:icrLnputs - - 82,200 52,200 11,700 1L3,17 Livestock - _ 5,800 22, 300 - 73,1DD TOTAL PHYSICAL INPUTS 82,200 216,600 199,90G 80,200 17,500 596,6o0 tOAL ]L'iSTOcX 50,800 123,500 95 .90 22,300 - 292, .X Oub-TatOaa 133,00M 3.0,500 295,390 102,5s0 17,530 558,830 TOTAL 068.900 856.oo 736.000 484,ooo 271.300 3,196, 200 coNrINa3Kc:Es 85,0o0 56,0ow 73,000 48,009 27,000 320,09o PASTURE INPROVEMEST PROGRAM - 33,70c 30,000 15,500 5,OOO S7,66' ARTIFI51L L.:SEltNATION PROGRAM 17,700 10,100 05,900 18,909 19,600 31,309 TECINIZAL SEEVIZES 63,000 36,0ow 36,o09 16,30o 16,300 167,003 WORKINO CAPITAL 200,tX3 100000 - - - 30000 G0AIID TOTAL 1.194,t00 1.121.800 885,ooo 582 ,1 312.300 4.130.100 -ot;s .V not rdd d-c *. rru.dc n ANNEX 10 ZAMBIA LIVESTOCK DEVELOPMENT PROJECT Corporate Organization of the Agric!ltural Development Corporation and its Subsiiiiary, the Zambia Cattle Developm'ont Ltd. Agricultural Development Corporation 1. The Agricultural Development Corporation (ADC) was formed on Mar,2h 28, 1968, as a company of limited liability under the Companies Ordinance (Chapter 216 of the Laws of Zambia). The principal function of ADC is to develop and manage, on a strictly commercial basis, soundly con- ceived agricultural end agro-industrial enterprises which would contribute to the development of the agricultural sector. The Company's Memorandum and Articles of' Association give it broad powers to achieve this objective by conducting business either alone or in association with any other person or body. 2. As provided for in the Articles of Association, ADC's Board of Directors, appointed by Government, presently consists of 10 members: 6 private farmers and 4 representatives of Government (the Permanent Secretaries of the Ministries of Commerce, Rural Development, Natural Resources and the Director of Agriculture of the Ministry of Rural Development). The Chairman is elected by vote of the Board. A director may hold office until he resigns or is removed. 3. Business operations are being conducted by a staff of six: a general manager, an agricultural development adviser, a director of admin- istration, a financial adviser and two accountants. The General Manager is a former Agricultural Officer of the Ministry of Rural Development. 4. On present activity, this staff is sufficient, as some of the companies which ADC was supposed to have started in 1968 have not yet been organized. Staff for future executive positions will be recruited as neces- sary both from Zambia and abroad. As yet there is no provision for the post of Deputy General Manager, who would play a major role in financial matters of DOC. 5. Until ADC can become a self-financing corporation, it will need to rely heavily on Government funds to finance the development of its projects and to cover any operating deficits of ADC and its subsidiary companies. ADC has been pstablished with an authorized share capital of K 14 million (US$19.6 million) and Government transfers of existing assets to ADC is tak:Lng the form of equity. ANNEX 10 Page 2 Zambia Cattle Development Ltd. 7. In July 1968, ADC established its first subsidiary, the Zambia Cattle Development Ltd. (ZCDL) as a livestock company limited by shares under the Companies Ordinance of Zambia. See Chart I for details of ZCDL's organi- zational aspects. Currently all its shares are owned by ADC. Under the Memorandum and Articles of Association of ZCDL, the number of members of the company cannot exceed 50. The Company by ordinary resolution can issue regular shares and shares with special rights to private investors. Thus, ZCDL could issue preferred shares to qualified investors if ZCDL's Board approves the terms of such additional equity investment. Financial Operations 8. ZCDL has not been operative long enough to issue any trading accounts. Estimates of ZCDL's opening and projected balance sheets are given in Annex 11 Table 2. ZCDL's estimated cash flow for the life of the Proj:ct are included in Annex 11 Table 1 for Project activities. With the 1968 price increase for beef and under proper management, the return on ADC's equity capital should vary annually between 11 and 14%. 9. As the accounts of most of the beef ranches and Gravetts dairy farm were part of the Ministry of Rural Development's recurrent expenditure and capital accounts and the Ministry of Finance's General Revenue accounts, an accurate assessment of the operating costs and revenues prior to their trans- fer to ZCDL has been difficult to ascertain for each ranch. On the basis of the data on cattle inventories, capital costs, as well as trading and profit and loss accounts provided by the Ministry of Rural Development's accountant for six of the project ranches plus Gravetts dairy farm for 1967 and 1968, it has been possible to make an estimate for the ranches and dairy farm as a group. 10. As a group, the seven ranch *nd dairy operations had an estimated gross trading profit of about US$126,000 for 1968, due mainly to the 38% price increase for slaughter stock in effect from January 1968. If compa- rable standard valuations to 1967 are used, the ranching and dairy operations would have incurred a trading loss of about US$196,000 for 1968. For 1967, the ranches and dairy showed a trading loss of about US$177,800 when live- stock was valued ~t the same standard values at the beginning and at the end of the year. Annex 11 Table 1 gives the projected improvements in Project financial operations of the ranches and dairy farms with the Project now under tae control of ZCDL's mIanagement. Capital Structure 11. ADC had previously established ZCDL with a nominal share capital of US$11,200 equivalent with the remainder cf its required capital to be in the form of loans from ADC. Such a capital struci;ure had a number of disadvan- tages. If the loan from ADC were to cover thp existing assets and new develop. ment capital and were to bear interest, a heavy burden would have been placed on the company in its early years. Also, the new company would not have a ANNEX 10 Page 3 capital structure on which a realistic return on capital could be measured. And, finally, ZCDL would find it difficult to, enter into partnership 4dth other interests, local and foreign, for the promotidn ot joint ventur,ls. Accordingly, Government and ADC have agreed to re-capitalize ZCDL in order to reflect the value of its existing assets, counterpart equity contributions to possible external loan finance and a portion of its permanent working capital requirements. ZCDL's authorized share capital now stands at US$5.6 million, which is adequate. While this required a registration fee of approx- imately US$7,000, the benefits of a properly capitalized ZCDL should be considerable. 12. ADC had originally set up the Board of ZCDL, appointed by the Minister of Rural Development in consultation with ADC, as a purely nominal board. However, in view of the likely size of ZCDL's operations and the im- portance of ZCDL's production contribution to future development of the live- stock industry, agreement was reached with the ADC and the Permanent Secretary of the Ministry of Rural Development that ZCDL's Board has been reconstituted and strenghtened to include two representatives of the Zambia cattle industry, one representative of the financial community, one represertative of the Min- istry of Rural Development and one representative of ADC (Chairman). 13. In May of 1968, ADC requested PMEA to second an ADS staff member to fill the position of General Manager of its proposed livestock subsidiary company. He reported to ADC in July 1968 and is at present assisted at headLquarters by an accountant, a secretary and by an administrative assistant. The General Manager would be directly responsible for implementing the finan- cia]., marketing, livestock and development policy for the beef ranches and dairy farms. 14. The General Manager of Zambia Cattle Development Ltd. who would be directly responsible to the Board of Zambia Cattle Development Ltd., would have the responsibility for implementing and executing the livestock develop- ment; project. I. The General Manager will have the tolloving specific duties and powers: (a) to propose policy and other matters, as necessary, to the Board; (b) to execute the Project in accordance.with the poli- cies and procedures set forth in the loan documents; (c) to hire, subject to such conditions as the Board may impose, the staff including accountant staff consid- ered necessary to carry out the Project; (d) to establish the duties and responsibilities of each ranch and dairy farm manager, and of each assistant manager and of the staff; ANNEX 10 Page 4 (e) to train ranch and dairy farm managers and assistant managers in the practical aspects of livestock devel- opment and management; (r) to review development plans and to suggest to the Board such modifications as are necessary to the exist- ing ranches and dairy farms and to prepare development plans for the additional ranches and farms included in the Project; (g) to insure the successful completion of each development plan in accordance with the terms of the loan documents; (h) to establish and maintain records for the Project ranches and farms, as needed for project evaluation; (i) to propose policy, for consideration of the Board, with respect to: (i) the selection, promotion, demotion, location, suspension, or removal of project staff; and (ii) the preparation of annual budgets and five-year budgets for the needs of the Project ranches and dairy farms. (j) to prepare quarterly and annual progress reports for transmission to the Bank after approval by the Board; and (k) to establish the terms of reference for the consultants with the apprqval by the Board and (i) to organize the implementation of their studies for the efficient dev- elopment of pasture improvement programs (including land clearance and bush control measures) and for the preparation of the development plans for future ranches and dairy farms, and (ii) to evaluate the effectveness of livestock watering facilities for the Project ranctles and dairy farms, as well as the problems involved in instituting an artificial in- semination program for the Project ranches. 2. The General Manager will have the following qualifications: (a) a good training in agriculture or allied science such as animal husbandry; (b) broad experience in pasture and livestock development, including several years' experience in pertinent fields such as land development, soil Cultivation, pasture ANNEX 10 Page 5 maintenance and use, as vell as in the more practical and economic aspects of livestock production, preferably ob- tained in regions of the world ecologically similar to the Project area"; and (c) successful experience in the management of large-scale livestock development projects. ZAMBIA: LIVESTOCK DEVELOPMENT PROJECT AGRICULTURAL DEVELOPMENT CORPORATION (ADC) AND ZAMBIA CATTLE DEVELOPMENT LTD. (ZCDL) ORGANIZATION CHART s | bl~~~~~INISTRY OF RURAL DEVELOPMENT| AGRICULTURAL DEVELOPMENT NATIONAL LIVESTOCK CORPORATION DEVELOPMENT GROUP BOARD-IO MEMBERS GENERAL MANAGER AND STAFF ZAMBIA CATTLE I ~~~DEVELOPMENT LTD. FUTURE SUBOSIDUR BOARD-6 MEMBERS -L … ---- GENERAL MANAGER ACCOUNTANT INISTRATI E ~ ~ ~ BEEIN/WANNG MUOT/WLVRTI I~~~~~~~~~~~~~~ L :ASISAT SEColRE ITARY SENIOR DAIRY SENIOR RANCH MANAGER MANAGER GRAVETT'S DAIRY FARM BULL STU D RANCH DAIRY FARM o I DAIRY FARM No 2 MBALA RANCH CHISHANGA RANCH MKUSHI RANCH CHtSAMBA RANCH BREEDNG/WEANING MUGTO/WOLVRTO 3REFD~NGWEAN,NG KATETE/CHINJARA | DAIRY FARM No 5 |DAIRY FARM No 4 |OLWEZI RANCH KALOMO RANCH PITWE N RANC | RANCH COMPLEX IR)I I RR D-4 2N6 5 _AC "NE1 11 ZAMBIA Table 1 LnV .TOCK DEVBOPKNT PP)JECT Cash Flow Projectimn for Zanbia Cattle De.lopau.t Limited (K' 000) B.fwre - - - - - - - - - - -e c t T e a r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - De-elopnt 1 2 3 4 _ 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Cash Tnflow Beef Re.-ene. 161.6 171.6 381.7 475.5 581.7 733.5 1294.0 1b.17.0a 1500.9 1515.0 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 1521.9 Dairy Remrmes 19.1 82.0 247.8 429.4 548.2 620.9 681.8 712.8 722.7 725.6 725.6 725.6 725.6 725.6 725.6 725.6 725.6 725.6 725.6 725.6 725.6 IERD Loan - 462.0 466.0 41..o 270.0 167.0 - - - - - - - - - - - - - - - Barclays Bank DO Loan - 1Sl.0 146.0 125.0 82.0 46.o - - - Covernnert (wdimry & pafwrm *w") r ,. 510.0 400.0 200.0 - Barclays Bank CO i Working Capital - 200.0 100.0 - - - Total 180.2 1511.6 181.5 Mo180,9 i681.9 1567.4 1975.8 2129.8 2223.6 2240.6 2247.5 2247.5 2247.5 22b7.5 2247.5 2247.5 2217.5 2217.5 2247.5 22bL7.5 22b7.5 C.ah Outflow Beef Operating Costa 258.0 417.8 5 603.4 684.b 7.8.1 911.0 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 893.6 Dairy Operating Costa 20.0 65.1 W 271.2 310.1 345.5 397.2 128.7 137.6 137.6 137.6 137.6 437.6 137.6 437.6 b37.6 437.6 b37.6 137.6 437.6 b37.6 Ranch nd Dairy De,elop.; t - 952.0 985.0 851.0 565.0 326.0 - - - - - - - _ _ - _ - - _ _ Tech.ical Sericeos - 43.0 37.0 37.0 17.0 16.0 Subtotal 278.0 1178.2 178.7 1762.6 1576.8 1135.6 1308.2 1332.3 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 1331.2 Surpluw (Deficit) 97.8 o0.4 111.8 78.3 105.1 11.8 667.6 797.5 892.4 909.4 916.3 916.3 916.3 916.3 916.3 916.3 916.3 916.3 916.3 716.3 916. 3 Total 180.2 1518.6 1851.5 1840.9 1681.9 1567.4 1975.8 2129.8 2223.6 2240.6 2247.5 2247.5 22b7.5 22.7.5 2247.5 2247.5 2247.5 2217.5 2247.5 2247,5 22b7.5 Interest a.d A.ortisation IRRD Comitrwnt F? e (O.75%) - 10.0 6.0 3.0 1.0 - - - - - - - - - - - Intereet (6.5%) and aortiatioo - - 30.0 60.0 87.0 104.0 241.0 244.0 244.o 244.0 244.0 244.0 244.0 244.0 244.0 244.0 - - _ _ _ P rcla Bank (Loan) coi2tznt l. (0.5) - 2.0 1.0 1.0 - - - _ _ _ Intermst(7.25%) aDd A-tiatito - - 10.0 21.0 31.0 37.0 76.o 76.o 76.0 76.0 76.0 76.0 76.0 76.0 76.0 76.o _ _ Barclays Bank (Workig Capital) Interest (6.5%) - - 13.0 19.0 19.0 19.0 15.0 10.0 6.0 - - - - - Reductimn of Wo.rkng Capital Loan D - - - - - 100.0 10o.0 100.0 - - - - _ Total Interest amd Amortization _ 12.0 60.0 1014.0o 38.0 160.0 435.0 430.0 426.0 320.0 320.0 320.0 320.0 320.0 320.0 320.0 Prooioion forr eserves-" - - - Provinim for Permaent Working Capital - - - - - - 100.0 100.0 100.0 - - - _ _ _ _ _ _ _ _ Corporate Tanes _- - 150.0 250.0 250.0 250.n 250.0 250.0 252.0 250.0 1.70.S !10.. hOO.^ boo.0 OO.O Surplus (Deficit) - 28.4 52.8 (25.7) (32.9) (28.2) 132.6 267.5 216.4 339.1 316.3 346.3 316.3 316.3 346.3 346.3 516.3 516.3 516.3 516.3 516.3 r-ulotive Cash Balance - 28.4 81.2 55.5 22.6 (5.6) 127.0 394.5 610.9 950.3 1296.6 1642.9 1989.2 2355.5 2681.8 3028.1 3544.4 4060.7 4577.0 5093.3 5609.6 ZAMBIA LIV.ESID CC DEVELOPMENT PROJBCT ZCDL - Actual Balance Sheet January 1969 and Pro Forma Estimates December 31, 1969-December 31, 1975 (K '000) January 22, - - - - - - - - - - - - - - - - - - - - December 31, - - - - - - - - - - - - - - - - - - - … - ASSETS 1969 1969 1970 1971 1972 1973 1974 1975 Fixed (Less Depreciation) Buildings and Capital Works 300 1460 510 680 690 660 680 690 Machinery, Equipmsent and Vehicles 328 480 600 680 665 603 680 665 Livestock Beef Cattle 1,280 2,035 3,017 3,484 3,906 4,210 4,082 4,190 Dairy Stock 25 124 248 496 620 620 620 620 Sheep, Pigs and Horses 20 21 22 23 24 25 26 27 Other Current Assets Permanent Working Capital - - - - - - 100 200 Cash and Bank Balances 30 45 50 50 50 50 50 50 Stocks aid Stores 50 60 70 70 80 80 80 80 Total 2,033 3,225 4,547 5,483 6,035 6,248 6,318 6,522 LIABILITIES Long Term Loans IBRD - 462 928 1,339 1,609 1,776 1,676 1,576 Barclays Bank DCO - 140 286 411 493 539 1469 400 Current Overdraft and Short Term Loans - 200 300 300 300 300 200 100 Creditors and Accrued Charges 100 100 100 100 100 100 100 100 Provision for Taxes - - - - - - - 400 Capital Ordinary Shares 1,933 2,323 2,833 3,233 3,433 3,433 3,433 3,433 Reserves - - 100 100 100 100 100 100 Profit (Loss) - - - - - - 340 413 Total 2,033 3,225 IJ,547 5,483 6,035 6,248 6,318 6,522 Return on Ordinary Shares - - - - - - 10%I,% Debt: Fquity Ratio (%) - 26:74 35:65 40:60 41:59 43:57 41:59 38:62 ZAMBIA LIJVBI CK DEVLM?tM1WT PMIJERT Scociouic and Financial Rates of Return (K '000) P r o j ect Y e a r s 1 2 3 4. 5 6 7 8 9 10 11 tO 13 11. 15 16 17 13 19 20 Incremental Net Operating Tnc.-e after Taxes (250) (115) 27 157 354 778 '907 712 695 716 708 708 708 708 708 560 560 560 560 560 Total Lovaataent (848) (910) (1,139) (696) (359) - - - _ _ Working Capital (100) (125) ( 60) - - - - - - _ - _ _ - _ _ _ - Increase in Herd Value - - - _ - - - - 4 _ _ - - - _ - _ - _ 4,500 Physical Input 3Slege VinIs - - - - - - - - _ _ - _ - - _ _ _ _ _ 200 Net Csh FloW (1,198) (1,150) (1,172) (539) ( 5) 7?8 907 712 695 716 708 708 708 708 708 560 560 56o 560 5,260 Financial Rate of RBtorn 12% Incraentai Net Operating Inc.eV/ (230) (100) 28 185 390 S20 960 1,058 1,077 1,103 1,103 1,103 1.103 1,103 1,103 1,103 1,103 1,103 1,103 1,103 Ranch insstawit (818) (910) (1,139) (696) (359) - - - - - - - - - - - - Working Capital (100) (125) ( 60) - - - - - _ _ _ _ _ _ _ - _ _ Less Deeeioapent SubsidyV ( 61) ( 19) l 18) ( 10) C 9) I.crease in Herd Value - _ _ _ _ _ _ _ _ - _ - _ _ _ - _ _ _ ,500 Physical Input Salvage Value - - - - - - - - - - - - - - - - - - 20O Lees REtra Cost of Government Servioesal ( 15) ( 15) ( 15) C 20) C 25) ( 25) l 30) l 30) ( 30) l 30) ( 30) ( 30) ( 30) (-30) ( 30) ( 30) ( 30) 30) C So) (3D) Net Cach flo C1,227) (1,169) ,T,20I)J (5I1) l 3) 795 930 1,028 1,017 1,073 1,073 1,073 1.073 1,073 1,073 1,073 1,073 1,073 1,073 5,802 Esnon-ic Rati of Return 16% 11 The value of the extra beef produaed as e result of the Project -as adjusted -ooords by 14% to reflect the equivalent value of the landed coot of the inoortod b,o It could rcplace 2/ The itoPt subsIdies paid by Gosernont to Z0DL deoloping its rancoes and dairy fats. has been deducted ao ao internal transfor 3/ An estimate oas made of the extra costs of flosenoment services required (such as ceteritrry 00s01) 0s 0 result of msvoteect io the ProJect ZAMB IA LIVESTOCK DEVELOPMN'r PROJECr Project Production Senefits At Maturity I BEEF RANCHES I DAIRY FARMS I I I I ! I I I I I I rotal I Produc tion I Increased I Total PRODLETION CLASSIFICATION I Breeding/Weaner I Breeding/Fattening I Bull Breeding ! I h Dairy I Production I before I Production due I Slaughter Ranches Ranches Ranches j Gravetts I Farms at Maturity Development ! to Project I Production ............................................................. (He d).............................................................. (Mead Itric rons) A. LIVFSTOCK PROLUCrION (Nos) 1. Slaughter Stock cul Buls- 111 36 11 - - 158 35 123 h6 Cull Cows (beef and dairy) 2,029 726 125 78 h558 3,h06 536 2,870 72h Fat Steers (beef herds) - 1,597 - - - 1,597 644 953 395 Fat Steers (dairy calves) - - - 155 888 1,053 28 1,015 h 7 Total 2,15O 2,359 136 233 1,336 6,20h 1,243 h,961 1,512 2. Breeding and Fattenirg Stock Weaner Steers 8,585 - - - - 8,585 286 8,298 Weaner Heifers (beef) 3,767 659 363 - - h,77) - 5,779 Surplus Heifers (dairy) - - - 53 308 360 361 - Herd Bulls (upgraded) - - 531 - - 531 - 531 Cull Bull Calves - 27 - - 27 5 22 - Cull Heifers h9h 170 27 - - 691 135 557 - Total 12,855 819 9.B 53 308 15,973 h25 11,548 rOTAL LIVESTOCK TURNOFF 15,985 3,178 1,085 286 1,645 21,177 1,668 19,509 _ B. mI13 PRODLCTION (Gals) - - 196,000 1,120,000 1,316,000 35,000 1,281,000 I Z A M 5 1 A - ~~~~~~~~~~~~~~~~~~~~~~~~ S\ CS4L F~~~~~~~~~.A A.VCANYIJtA ZAMBIA LIVESTOCK DEVELOPMENT PROJECT iT A N Z A N Z A PROJECT RANCHES AND DAIRY FARM / ! MBAL Proj cc raoc he, and dairy farm £ |A C | ; Areas frersahici c;arie fnoerit, \ arc restricted by ectcrroary rep- aN\,Z IHS4i 'va(! ulato CHIHIGA Main roads ) KAWAMSWA RANCH I1.-- …---- Secondary roads da i eapa LUIN _AAM 0cY --A ISKA DEMOCRATIC REPUaL IC~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I' WINILUNGA ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~HIJR A NC G L A | 09 , iRAI NDDLARANCH CPOPjIO I ' MANKOYA - ~ IR _ TTSLU4 S YA J A > _ t C H S~~~~~~O A M B IO |E<,_..\ I - WA ______________\ 1}\\& , Tf 9K~OTSWA|BL BeDNA \.,C dasada, l9a9 I OCC-- 6N BALOVALE KN/