CFC/ICO/15 Progress Report January-December 2007

CFC/ICO/15 Progress Report January-December 2007

CFC/ICO/15– Progress Report January-December 2007

AnnualReportJanuary-December 2007

January 2008

Pilot Rehabilitation of Neglected Coffee Plantations into Small Family Production Units in Angola (CFC/ICO/15)

Eng. João Ferreira da Costa Neto (INCA)

Dr. George Oduor (INCA)

Pilot Rehabilitation of Neglected Coffee Plantations into Small Family Production Units in Angola

CFC/ICO/15

Annual Report January-December 2007

Submitted by:Instituto Nacional do Café (INCA)

Prepared by:Eng. João Ferreira da Costa Neto

Dr. George Oduor

PROGRESS REPORT

I.Project Summary:

Title: Pilot rehabilitation of neglected coffee plantations into small family production units in Angola

Number: CFC/ICO/15

PEA: Instituto Nacional do Café (INCA).

Participating country: Angola

Starting date: March 2006

Completion date:February 2009

Financing:

Total Project CostUS$8,531,477

of which,

CFC FinancingUS$4,749,989 (Loan: 2,760,016 and Grant: 1,989,973)

Counterpart contributionsUS$3,781,488

II.Period covered by this report:

From: January 2007To: December 2007

Periods covered by previous reports:

From: March 2006 To: June 2006

From: March 2006 To: December 2006

From: January 2007 To: June 2007

III. Status of Project Implementation

Planned activities / Targets set / Present status / Remarks
Component I: Production (Rehabilitation) of Coffee

Activity 1.1

Conduct socioeconomic baseline survey

/ Gather production related socio-economic data in project area / Survey undertaken and report written / Target fully met

Activity 1.2

Produce coffee seedlings

/ Avail at least 4 million coffee seedlings for rehabilitation, renovation and experiments / Additional 6 million planting bags paid for and 2.55 million delivered. / Delays caused by non-availability of loan funds. To be continued in next reporting period.

Activity 1.3

Undertake analysis of soil

/ Identify soil properties at selected sites in project area. / Soil samples analysed at MoARD (Angola) and OMNIA (S. Africa)and report submitted / Activity on going

Activity 1.4

Improve coffee crop husbandry

/ Train farmers on correct agronomic and post harvest practices / Technical Brigade training farmers / Activity on going
Activity 1. 5
Rehabilitate smallholder coffee farms / Identify and rehabilitate farms / Training on improved agronomic practices on going. Transplanting of seedlings from nursery to the field commenced. / Activity on going
Activity 1.6
Renovate unproductive coffee plantations / Identify and renovate farms / Training on improved agronomic practices on going. Transplanting of seedlings from nursery to the field commenced. / Activity on going

Activity 1.7

Rehabilitate abandoned coffee plantations within resettlementschemes

/ Identify and rehabilitate abandoned farms / Same as Activity 1.5 / Same as Activity 1.5
Component II: Commercialisation of Coffee

Activity 2.1

Undertake coffee marketing study

/ Collect information on flow of coffee from producer to exporter, identifying the processing methods and marketing structure and recommending ways of improving this. / Study undertaken and report written. / Target fully met
Activity 2.2
Collate coffee market information / Regularly collect and analyse information on national and international coffee market, compile and disseminate reports / Template for information gathering and use has been developed on Access computer programme. / Activity on going.
Activity 2.3
Improve coffee hulling facility / Procure, install coffee processing equipment/machinery and train on the same / Activity to be implemented in next reporting period / Procurement of machinery/equipment delayed due to lack of funds
Activity 2.4
Introduce coffee quality improvement measures / Train key extension staff on proper pre- and post-harvest procedures that enhance coffee quality / Consultant engaged and trained INCA staff of coffee improvement techniques / Target fully met.
Activity 2.5
Support internal marketing of coffee / Provide fiducial funds for use by farmers to commercialise their coffee / INCA and BPC signed an agreement for the administration of the loan funds (for micro credit). Loans to traders will assist in commercialisation. / Activity on going
Component III: Settlement Scheme
Activity 3.1
Identify and select suitable land for settlement / Government to identify suitable land on which to settle dislocated farmers. / Appropriate land identified and divided into parcels in Gabela / Target fully met.
Activity 3.2
Select appropriate settlers / Identify people who escaped fighting and temporarily held at a camp in Sumbe, who are willing to continue with farming, especially coffee. / Displaced people willing to continue with farming activities identified by Government, transported to and settled in Gabela / Target fully met
Activity 3.3
Organise selected settlers into associations / Settlers encouraged to join existing Associations or newly formed one, to increase their bargaining power / Farmers organised into 220 solidarity groups, 86 Associations and 11 Cooperatives and are currently being trained on the running of farmer groups as business entities. / Activity on-going.
Activity 3.4
Facilitate concession of title deeds to settlers/farmers / Assist farmers to have titles to their individual land parcels / Contacts made with MoARD staff to facilitate survey of project area and subsequent issuing of titles. / Activity on-going.
Activity 3.5
Construct houses for settlers / Assist resettled farmers to construct houses / Most of the resettled farmers have already constructed some form of housed. Project need to assist in improving some of these structures / Activity to be implemented as soon as materials purchased and delivered
Activity 3.6
Construct social infrastructure / Improve the infrastructure in the project area especially roads, schools, health posts / Procurement of materials not done yet. / Activity to be implemented as soon as materials purchased and delivered
Activity 3.7
Initiate agricultural production / Provide agricultural inputs like seeds and tools to enable farmers commence production of food / Horticultural seeds procured and delivered to farmers. Additional farm equipments to be procured. / Activity to be intensified as soon as inputs purchased and delivered
Activity 3.8
Undertake food for work / Encourage local population to assist in the improvement of the local infrastructure (roads, schools, health post) in return for food / Procurement of materials and food not done yet. Farmers however prefer payment in cash for labour rendered. / Activity to be implemented as soon as materials and funds availed.
Component IV: Support Services

Activity 4.1

Form new/strengthen existing farmer organisations / Same as Activity 3.3 / CLUSA training farmer group members and officials. / Activity on going
Activity 4.2
Provide support to research and experimentation / Identify and undertake demand-driven research aimed at addressing farmer constraints (on improved coffee varieties, soil requirements, etc) / Collection of coffee varieties maintained, needs of coffee seed production at INCA (Gabela) identified. Varietal trial installed, soil analysis commenced and INCA staff trained on-the-job. / Activity on going
Activity 4.3
Strengthen coffee related services for technical assistance (including procurement) / Improve the dissemination of research findings from researchers to farmers as well as increasing farmers access to credit / Technical Assistants in the area of rural credit and rural extension undertook studies and wrote final reports. / Target fully met.
However equipment still to be procured.
Component V: Institutional Support
Activity 5.1
Establish market information system / Set up a system that avails appropriate coffee marketing information for various coffee stakeholders / Technical Assistant set up market information system, to be improved and used by INCA / Target fully met
Activity5.2
Establish and use management information system / A system developed within INCA to ensure the proper and timely implementation of the project / INCA identified Mr Jose Mahinga to be involved in the project and he underwent training in Information Management in the UK. / Activity on going
Activity5.3
Train INCA staff / Train 2 staff in coffee liquoring / On-the-job training of INCA staff byQuality Coffee consultant done at INCA. / Activity on-going.
Activity 5.4
Undertake exchange visits to relevant international institution / INCA staff member to visit and learn more at an international organisation / Staff identified / Activity planned for next reporting period when funds are available
Activity 5.5
Procure and distribute equipment and materials / Purchase equipment needed for the implementation of the project / Some equipment not purchased and distributed. / Purchases not completed due to non availability of funds.
Component VI: International Technical Assistance
Activity 6.1
Identify and contract long term Chief Technical Advisor (CTA) / A long-term Technical Advisor engaged and based in Angola to supervise the implementation of the project activities / Dr George Oduor (of CAB International) continued to offer technical and administrative backstopping. / Target fully met
Activity 6.2
Identify and select short term technical assistants / Specific short term project activities undertaken by qualified consultants / Market Information system, and Quality Coffee consultants undertook studies and wrote reports / Target fully met
Component VII: Project Management
Activity 7.1
7.1 Organise and hold project planning workshop / Project formally inaugurated and popularised. / Project successfully launched in Luanda in May 2006 and officially opened by Minister of MoARD / Target fully met
Activity 7.2
Establish Project Management Unit to coordinate and organise project implementation / A full complement PMU in place to coordinate the implementation of the project. / New project accountant engaged and trained.
PMU relocated to Gabela in November / Search for alternative PMU staff ongoing.
Activity7.3
Organise and supervise short term consultancies / Specific pieces of work undertaken by qualified consultants / Consultants undertook studies under the supervision of the CTA / Target fully met
Activity7.4
Establish and implement administrative and accounting procedures and train in the same / Project implemented effectively following the CFC Financial and Administrative procedures / Administrative and accounting procedures in use. Project accountant trained by CTA. / Activity on going
Activity7.5
Organise and coordinate staff training / Ensure that project staff are trained / Organisation and supervision of training of staff done. / Target fully met
Activity7.6
Develop detailed workplans and budgets / Activities to be implemented in a given year, together with available resources developed participatorily / Workplans and budgets for 2008 developed. / Workplans and budgets were to be approved by PSC which is still to be convened.
Activity 7.7
Establish and implement effective monitoring and evaluation processes / M&E system developed and used. / System including visits, meetings, etc utilised. / Activity on-going
Activity 7.8
Hold PSC meeting / PSC constituted and meet regularly to oversee the effective implementation of the project / PSC meeting not held due non-availability of some members. / Activity postponed
Activity 7.9
Host ICO annual supervision visits / Organise visit by ICO to project area to monitor progress / Supervision done by ICO, CFC and IACO between 29thMay and 4th June. / Target fully met
Activity 7.10
Prepare regular reports / Progress reports written regularly and sent to CFC/ICO and collaborators. / Third progress report (Jan-June) and annual report (this one) written. / Target fully met

IVResource utilization (in US$)

Summary utilisation Year 2, excluding contingency funds (January – December 2007) by Component

Please note:Actual expenditure of funds from CFC Loan and Angola Government include funds budgeted for 2006, hence the negative some balances.A table showing utilisation of Grant resource by category, according to re-imbursement claims submitted by the PEA appears in Annex 1 at the end of this report

As in the previous reporting period, resource utilisation wasdisrupted by the delayed availability of funds. Whereas the grant funds weredisbursed in a timely manner, the loan was availed in late June (a sum of US$ 1,760,000.00) and only part ofthe Government co-financing (US$ 597,024) was availed late the following month. Co-financing budgeted for the first year was not released.

Delays in the release,or total lack, of funds, made it impossible to acquire project equipment promptly, many of which have elaborate procurement procedures. This led to apparent underspends in some budget lines (Grant). However, with the transfer of the availing of loan and Government contributions, the procurement of equipment as well as awarding micro credit to farmers were promptly implemented.

Expenditure incurred on implementing activities which were planned for the previous reporting period, is included in this reporting period’s resource utilisation.

The delayin the co-financing from the Government led to lack of undertaking certain season specific activities such as the procurement and planting of subsistence crops.

VPEA’s Assessment of Project Progress & Prospects:

V.1Assessment of Technical Progress:

V.1.1 COMPONENT I: Production (Rehabilitation) of Coffee

Activity 1.1 – Conduct socioeconomic baseline survey:

Activity undertaken fully and final report bound and distributed.

Activity 1.2 – Produce coffee seedlings:

Production of coffee seedlings is a major activity in the rejuvenation of coffee farms in the project area. This activity went on in the three designated categories of farms namely those to be rehabilitated ( principally in Assango, Mato Grosso, Manuela, Quipuco, Kuwa, Hengue, Manga, Maria Ganza Quiitandala, and Kamondo), those to be rehabilitated and previously part of large estates (Damba do Congulo, Congulo, Gonga, Nova Ereira, Boa Lembrança, Monte Estoril and Mucuco) and finally those to be renovaed (Saydi Mingas, Maria Augusta, Cecilia,Filipa, Manuela, Samba, Vungi, Kikanda, Kipindo, Zunzua, Londa and part of Honga).This activity continued despite the heavy rains which ended in May.

Due to the renewed interest brought about by the project, additional farmer groups (besides those identified as collaborators in the project) have gone ahead and set up their own nurseries, especially in the Assango area. The project encouraged this and provided necessary material and technical support to these groups, which numbered 14. Besides planting seeds, or transplanting seedlings, into individual planting bags, other activities in the nurseries included shade construction, pest control and irrigation.

To enable planting of coffee seeds,funds were delivered to a local company for the manufacture of 6 million planting bags. Of these 2.55 million have been delivered and distributed. The rest will be distributed as soon as they are made available by the supplying company. To date a total of 4.3 million bags have been distributed and used for the production of seedlings.

Unlike in the previous year where all nurseries were managed communally, this year several farmers have opted to set up their individual coffee nurseries, a decision that was supported by the project. These nurseries (communal and individual) are mainly in the areas of Assango (20), Escarpa (24) and Honga (19). The target in either type of nursery is for every farmer to raise at least 2,000 seedlings – to enable the rehabilitation or renovation of at least 2 ha (i.e. 1,666 plants/ha at a spacing of 3X2 m).

A hand-pulper was procured to facilitate the production of seeds at the INCA station at Gabela. Production of quality seeds at the station began at the initiation of the harvest season in June. A total of 400kg of high quality seeds were produced.

Using Government funds a total of 7,650 machetes, 5,153 hoes, 50 files, 516 axes, 300 watering buckets and 2 chain saws were procured and distributed to farmers. These are for managing nurseries as well as opening and maintain coffee farms.

Activity 1.3 – Undertake analysis of soil:

Soil samples collected during the previous reporting period have been analysed both in S. Africa as well as in Luanda, Angola. Results show that the soils are very acidic (pH as low as 3.1) and generally lack Calcium, Magnesium and Phosphorus, among other elements. Based on these results a South African Company OMNIA has recommended a formulation of fertilisers appropriate for the project area. However, the farmers apparently still do not appreciate the benefits of using fertilisers.

Soil sampling and analysis kits were procured. These are portable ones and will enable soil analysis to be undertaken even in the field.

Activity 1.4 – Improve coffee crop husbandry:

The coffee nurseries were attacked by low levels of Epicampoptera sp and Zonocerus sp, both of which were managed by Polytrim. Improved agronomic practices are important right from the nursery to harvest. Weeds,especially during the rainy season, have also had to be managed by uprooting in nurseries and slashing in plantations. Proper pruning and harvesting have also been maintained. These activities are on going at the sites with nurseries and demonstration fields, which also serve as locations for training farmers.

Activity 1.5 – Rehabilitate smallholder coffee farms:

The coffee nurseries are already producing coffee seedlings ready for transplanting into the field. Over 750,000 such seedlings were produced and transported either by hand to neighbouring fields or by tractor bought by the project to more distant fields. These fields were carefully selected to ensure that only those that were ready to receive the seedlings (weeded, pruned, with some shade and existing coffee trees, etc) were used. Over 50 such field have been thus rehabilitated.Farmers are happy with the farm inputs (hoes, machetes, axes, etc) distributed

Activity 1.6 – Renovate unproductive coffee plantations:

Farms to be renovated were included during this reporting period, and will receive seedlings that are still being raised. These farmers, however, have received the farm tools (alongside those whose farms are to be rehabilitated) and have already identified the sites to be cleared for the planting of the coffee seedlings.

Activity 1.7 – Rehabilitate abandoned coffee plantations within resettlement schemes:

Same as for Activity 1.5.

V.1.2. COMPONENT II:Commercialisation of Coffee

Activity 2.1 - Undertake coffee marketing study:

Activity undertaken fully and report distributed.

Activity 2.2 - Collate coffee market information:

Following the consultancy of the Coffee Processing and Marketing and Market Information expert (see Activity 5.1), electronic templates were developed using Access computer programme for collating coffee information, including coffee prices. This is an ongoing activity.

Activity 2.3 - Improve coffee hulling facility:

The first loan disbursement to the project was done in June and the procurement procedure initiated. Through announcements in a daily newspaper (Journal de Angola) and individual contacts in August and September, a loan of US$ 200,000 for the setting up of a coffee processing unit (pulper, mucilage remover, huller, etc) in the project area was offered. No applications were received. It is thought that the high interest rate (12%), inclusion of a viable business plan, as well as the lack of interest in wet-processing of coffee contributed to the lack of applications for the loan. It was agreed that the loan be broken into smaller ones for the procurement of several hullers.