World Bank Document

ReportNo. 340a-MLI FILECOPY Appraisalof Integrated RuralDevelopment Project

Public Disclosure Authorized Mali

May 13, 1974 Agriculture ProjectsDepartment West Africa RegionalOffice Not for PublicUse Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Document of the InternationalBank for Reconstructionand Development InternationalDevelopment Association

This report was preparedfor officiai use only by the BankGroup. Rt may not be published, quoted or cited without BankCroup authorization.The BankCroup dors not dacept responsibility for the accuracyor completenessof the report. CURRENCY EQUIVALENTS

US$ 1 = MF 500 MF 100 US$ 0.200

WEIGHTS AND MEASURES

1 metric ton 0.984long ton 1 kilometre = 0.6215 mile 1 hectare 5 2.47acres

ABBREVIATIONS AF Alphabétisation Fonctionnelle EDM Banque de Développement du Mali BDPA Bureau pour le Développement de la Production Agricole DGP Direction Générale de la Production DNS Direction Nationale de la Santé DNTP Direction Nationale des Travaux Publics FAC Fonds dtAide et de Coopération FED Fonds Européen de Développement GERDAT Groupement d'Etudes et de Recherches pour le Développement de l'Agronomie Tropicale ICRISAT International Crops Research Institute for the Semi Arid Tropics (Hyderabad, India) 1ER Institut d'Economie Rurale IFAC Institut Français de Recherches Fruitières Outremer IRAT Institut de Recherches Agronomiques Tropicales et des Cultures -Vivrières IROT Institut de Recherches du Coton et des Textiles Exotiques IRHO Institut de Recherches pour les Huiles et Oléagineux OA Opèration Arachide OACV Op'érationArachide et CulturesVivrières OC OpérationCoton OD Opérationde Développement OPAM Officedes ProduitsAgricoles du Mali OSRP Officede Surveillanceet de Regulationdes Prix RCFM Regie des Cheminsde Fer du Mali SCAER Sociétéde CréditAgricole et d'EquipementRural SEPOM Sociétéd'Exploitation des ProduitsOléagineux du Mali SoMIEX Société Malienne d'Import Export STR Service des Travaux Routiers

FISCALYEAR

January 1 to December 31 MALI

INTEGRATED RURAL DEVELOP`ENT PROJECT

TABLE OF CONTENTS

Page No.

SUMTARY AND CONCLUSIONS ...... i- v

I. INTRODIJCTION ...... 1

II. BACKGROUND ...... *...... 1

A. General ...... B. The Agricultural Sector ...... 2 C. D)evelopment Options ...... 4 ',). Institutions ...... 4 E. Agricultural Research ...... 5

III. T-IEPROJECT AREA ...... 6

A. General ...... 6 B. Operation Arachide ...... 8

IV. TIE PROJECT ...... 9

A. Description ...... 9 B. Detailed Features ...... o...... 10 C. Credit Arrangements and Supply of Inputs ..... 12

V. COST ESTIMATES AND FINANCING ...... 14

A. Project Costs ...... 14 B. Financial Arrangements ...... 16 C. Procurement and Disbursement ...... 19 D. Project Accounts and Audits ...... 20

VI. ORGANIZATION AND MlANAGEMFNT - STAFFING AND TRAINING 21

A. Organization and Management. .. . 21 B. Staffing and Training ...... 23

VIl. YIELDS AND PRODUCTION, MARKETING, FARMERS' BENEFITS AND GOVERNMENT REVENUES ...... 24

A. Yields TABLE OF CONTENTS(Cont'd)

A. Yields and Production ...... 24 B. Marketing and Prices ...... 25 C. Farmers' Benefits ...... 27 n. Impact of Project on Government Revenues and Expenditures ...... 28

VIII. BENEFITS AND JUSTIFICATIONS ...... 29 lx. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 30

ANNEXES

1. Agriculture in %`ali

Table 1 Production and Marketing of Main Crops (1967 to 1972) Table 2 Official Producer Prices for Principal Commodities Table 3 Agriculture Sector Contribution to Exports Table 4 Volume of Grain Imports (1969 to 1973) Table 5 Groundnut Production and Marketing (1953 to 1973)

2. Operation Arachide

Table 1 Area, Production, Yields, Marketing Table 2 Inputs Table 3 Financing

3. Cropping Pattern, Inputs, Yields and Production

Table 1 Cultivation Schedule Table 2 Labor Requirements for Groundnut and Cereal Production Table 3 Area of Groundnuts Grown under OACV Supervision by Sectors Table 4 Area under Groundnuts: Diffusion of Modern Techniques Table 5 Estimated Production and Yield of Groundnuts Table 6 Incremental Groundnut Production Induced Directly by the Project Table 7 Area of Sorghum and Millet Grown under OACV Supervision Table 8 Area under Sorghum and Millet: Diffusion of Modern Techniques Table 9 Estimated Production and Yield of Sorghum and Millet Table 10 Incremental Sorghum and Millet Production Induced Directly by the Project ANNEXES (Cont'd)

4. Improvementof Rural Tracks

Table 1 Length of Roads and Tracks in the Western and Central Sectors Table 2 Roads Classifiedin 1972 Table 3 Improvementof FeedierRoads 1974/77Program Table 4 Tracks for Improvementsand Proposed Third Highway Project Table 5 Roads and Tracks Technical Characteristics Table 6 Scope of Works Table 7 Analysis of Trucking Costs in Project Zone (for 7 t lorry)

5. FunctionalLiteracy 6. Research Programs 7. Medical Assistance ~8. VeterinaryAssistance 9. EvaluationUnit 10. GroundnutSeed Production 11. AgriculturalInputs and Credit

Table 1 Cost Prices and Sales Prices of Farm Inputs Table 2 ComparativeTable of Loans and Repayments Table 3 SCAER CondensedBalance Sheets Table 4 SCAER CondensedOperating and Profit and Loss Accounts Table 5 Farm ImplementRequirement, Costs and Medium-TermCredit Table 6 Seasonal Inputs Requirements,Costs and Seasonal Credit Table 7 Sumary of IncrementalFarm inputs, Co0ts and Financing

12. Project Costs

Table 1 Project Costs Table 2 Buildings and Equipment Table 3 Vehicles Table 4 Technical Assistance Table 5 Local Staff Table 6 Operating Expenses Table 7 Rural Tracks Improvements Table 3 FunctionalLiteracy Table 9 AgriculturalResearch Table 10 'IedicalAssistance Table 11 VeterinaryAssistance rable 12 EvaluationUnit Table 13 IncrementalFarm Inputs Cost and Financing Table 14 RevolvingFund Table 15 Contingencies Table 16 Import Duties and Taxes ANNEXES (Cont'd)

13. Financing

Table 1 Financing per Ileading Table 2 Sources of Financing Table 3 IDA Disbursement

14. Market and Prices for Project Commodities

Table 1 Bareme Arachide (GroundnutSchedule) Table 2 Producer Prices for Groundnuts Table 3 InternationalPrices of Groundnuts,Groundnut Oil and Groundnut Cake Table 4 Croundnut Economic Farm-gate Price (1973-1980onwards) Table 5 Destinationof Marketed Production Table 6 OSRP Groundnut Reserve Account (1969-1972) Table 7 Price and Marketing Structure for Sorghum/Millet- Domestic Price Structure Table 3 Cereal Producer Price in Mali and Neighboring Countries 1972/73 Table 9 Sorghum/Millet- Economiç Farm-gate Price (1973-1978onvards)

15. Farm Models and Budgets

Table 1 Farm under Manual CultivationAdopting Improved Techniques Tab;Le2 Farm under Ox-Powered Cultivation Table 3 Cash Flow for Farm under Ox-Drawn Cultivation

16. Impact on GovernnentBudget

Table 1 Impact of Project on ConsolidatedGovernment Finance Table 2 Detailed Proceeds from Taxes and Levies on Groundnuts Table 3 Foreign Exchange Benefits

17. Rate of Return Calculation

Table 1 Project Economic Cash Flow Table 2 Economic Cash Flow Calculation- Project Benefits Table 3 IncrementalFarm Labor

CHART Project Organization

MAL'S

1. Project Area 2. Rainfall 3. On-going and Planned Road Improvement MIALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Summary and Conclusion i. Mali has asked IDA to help finance a project under which Government's ongoing "Operation Arachide" (OA) would be intensifiedand extended to new areas. OA is aimed at improving the productivityand incomes of farmers for whom groundnuts are the main cash crop. The intensifiedsecond phase program would emphasize the application of modern techniques to the cultivation of Mali's principal cereal crops, millet and sorghum as well as58 groundnuts.

ii. The project would be carried out over the five years 1973/74 to 1977/78, cover an area of approximately125,000 km2 and benefit about one million of some of the very poorest people in the world. Average per capita income in the project area is about US$30.

iii. Mali suffers from several developmentconstraints, the principal of which are:

(a) distance from the sea, the closest sea ports are Dakar and Abidjan, both about 1,200 km from the capital, Bamako;

(b) lack of mineral and other natural resources; and because of low and variable rainfall and generally poor soils, a weak agriculturalbase;

(d) problems of communicationsdue to the size of the country, and its inadequate road anQ telecommunicationssystems.

On the other hand, Mali has the advantage of a hardworking population accus- tomed to living under harsh climatic conditions and with a minimum of social services.

iv. Serious droughts, more frequently the result of ill-distributed, than of insufficienttotal rainfall plague the country. Such droughts affected Mali adversely in 1968, 1970, 1972 and 1973, as a consequence food shortages occurred and massive bilateral and international food aid vas required. External aid alone has enabled Mali to withstand the vagaries of the weather in recent years, and it is essential that the country's productive capacity be strengthened. This would be the main objective of the proposed project. - li - v. Agriculture,including livestock and fisheries,is the mainstay of Mali's economy, and the sector accounts for nearly half the country's GDP - 43% lin1972, and for virtually all foreign exchange earnings,US$54 million equivalentin 1972. Rural activitiesprovide a livelihoodfor about 85% of total populationand the vast majority of farms are less than 5 ha. About 85% of the 2 million ha under cultivationis devoted to food crops, principallymillet and sorghum, and iinthe river valleys rice. Cotton and groundnuts are the principal cash crops, and in a normal year extend to about 90,000 ha and 250,000 ha respectively. vi. In the long run Mali could develop a strong agriculturalbase through using the large surface water resources of the Senegal and Niger Rivers systems for intensive irrigatedagrizulture. This however will be very expensive, and even if fînance became available the rate at which such developmentcould be introducedwould be slow. Thus in the meantime Govern- ment lisconcentrating on improving rainfed farming which sustains the great bulk of Mali's people. vii. The project, renamed "Operation Arachide et Cultures Vivrieres" (OACV) to reflect better its expanded responsibilities, would be managed by the current management team which is satisfactoryand would obtain technical assistancefrom "Bureau pour le Developpementde la ProductionAgricole" (BDPA). BDPA, a French consultingfirm, has supplied such assistance to OA since the latter's inception in 1967. The results of this collaboration have been good and fully to Government'ssatisfaction. Principal components of the proposed project would be:

(a) intensifyingOA activities in areas now served by the program;

(b) extending OA services into new areas;

(d) supplying equipmenton credit to selected blacksmiths in the project area;

(e) improving the 1,500 km of tracks in the project area;

(f) expandingan ongoing functional literacy progran;

(g) implementinga program of agriculturalresearch to supple- ment the current national program;

(h) improvingmedical facilitiesin the project area;

(i) limp-ovingveterinary services linthe project area; and

(j) establishlnga project evaluationunit. - iii - viii. The proposed IDA credit of US$8 million would cover 42% of total project costs which are estimated at US$18.9 million, including import duties and taxes totallingUS$1.3 million, and 75% of the foreign exchange component of project costs which is estimated at US$10.6 million. Remaining coasts, estimated at US$10.9 million, would be covered by a FAC grant of US$2.5 million, Government contributionstotalling US$4.3 million and farmers' contributions of US$4.1 million. Thg IDA credit would be provided by Government as a grant to OACV to finance technicalassistance, operating costs, buildings, seeds, improvement of rural tracks, functional literacy, research and medical and veterinary assistance. U';$4.0million would be held as a contingency reserve. ix. Project vehicles and graders amounting to US$1.5 million would ,âe procured on the basis of internationalcompetitive bidding in accordance with IDA guidelines. Equipment and furniturevalued at US$0.4 million and for which there is a satisfactorydegree of local competition,would be procured by local competitivebidding. Contracts for the constructionof project offices, houses, stores and garages evaluated at about US$1.9 million are not suitable for internationalcompetitive bidding due to the dispersed location of the work and the small size of individual contracts, and would be awarded under local competitive bidding. A satisfactory degree of competition between experienced local contractorscould be expected. In appraisal of bids, domestic civil works contractors would be allowed a preference margin of 7.5%. Farm inputs (fertilizers, agrocides) and implements for draft animals amounting to US$3.5 million, to be financed by Government and farmers, would be procured by SCAER as part of the country's total requirements. SCAER purchase procedure, which is based on satisfactorycompetitive bidding, would continue under the project. An informal understanding was reached that IDA would be consulted on the preparationand publicity of tender documents and the evaluation of bids for the SCAER procurement. Seeds required by the project costing an estimated US$1.3 million would be locally produced and distributed under OACV supervision. Cart bodies valued at US$319,000 would be supplied or purchased locally by farmers. Technical assistance and consultant services to the project are expected to cost US$2.5 million; it is proposed that a contract should be made with BDPA, which has successfullyassisted the ongoing project, to supply experts required by OACVcosting an estimated US$2 million. Similarly, GERDAT, which is currently assisting Mali in agricultural research, would supply the experts required at an estimated cost of US$150,000. Internationallyrecruited staff and consultants at a cost of about US$390,000would be recruited under procedures acceptable to IDA to evaluate the functional literacy literacy program, to provide accountancy assistance to OACV, to head the evaluation unit and to carry out a study on cereal producer prices and marketing arrangements. A total of US$3.5 million would cover Malian staff and operating expenses, credit for blacksmiths' equipment, motorcyclesand bicycles for the extension staff. The rural track improvementand maintenance program would be carried out by force account, which is the only practical means for timely and proper execution of this program. An amount of US$4.0 milliqp would be unallocated. - iv - x. The proceeds of the IDA credit would be disbursed during the four year period 1974/75 through 1977/78 to cover:

(a) 100% of foreign expendituresor 66% of total expendituresfor vehicles and graders imported for the project - US$0.8 million.

(b) 18% of the incrementalcost of seeds - US$0.2 million.

(d) 85% for the salaries of internationallyrecruited staff and consultants for project management - US$1.7 million.

(e) 100% of foreign expenditures for a proposed cereal marketing study and accountancy services - US$0.1 million.

(f) 75% of incrementalexpenditures for local staff - US$0.8 million.

(g) 80% of incrementaloperating costs of Project - US$1.6 million.

US$1.4 million of the credit would be unallocated to cover contingencies. Except for local staff, operating costs and seeds, allocations for disbursement would be supported by contracts, shipping and other appropriate documents. Applicationsfor reimbursementof local and related co0ts would be supported by certificatesissued by the project manager.

Xi. The principal direct benefits of the project would be induced incremental production of cereals and groundnuts. By maturity of the project, eight years after its inception, such production is estimated at 65,000 tons of groundnuts and 39,000 tons of cereals annually, and to have a net foreign exchange earnings or savings value of MF 5.5 billion (US$11.8 million). The economie rate of return from investment in the project is estimated at 91% over a project lîfe of 15 years. This high return is partly attributableto the importance of previous and ongoing investmentswhich are sunk costs to the project and the high degree of technical proficiency of farmers resulting from previous extension efforts. Also instrumentalare the relatively high projected groundnut and sorghum long-term internationalprices. The sensitivity of the return to such factors and other variables has been tested. The return shows a relatively high sensitivity to changes in prices, but it can withstand substantialand adverse deviations from appraisal estimates and still remain acceptable. xii. At full development,some 107,000 farming families, involvîng about one million people in all, would participate in the project compared to 52,000 farming families and 490,000 people served by OA in 1972/73. Total incremental cash income from groundnutsand cereals, assuming all are sold, and accruing to participatingfamilies would a»ount to about MF 2.5 billion (US$5 million) annually. The great differencesin levels of technology adopted by farmers -v -

and in the physical and human conditions prevailing in the project area make the determination of "typical farm bidgets" difficult. Nonetheless It appears that the per capita incomes of farn ,'amilies prepared to implement the technical recommendationsof OACV would increase between two and threefold. xiii. Agreements reached and recommendationsare in Chapter IX. The proposed project is suitable for an IDA credit of US$8 million. vZ

MALI

INTEGRATED RURAL DEVELOPMFENTPROJECT

I. INTRODUCTION

1.01 Mali has asked IDA to help finance a project under which Govern- ment's ongoing "Operation Arachide" (OA) wvould be intensified and expanded into new areas. OA is aimed at improving the productivity and incomes of farmers for whom groundnuts are the main cash crop. The intensified program would emphasize the applicationof modern cultivationtechniques to millet and sorghum as well as to groundnutsand other crops. The project vould also include spot improvementof rural tracks, a functionalliteracy program, improvementof medical and veterinary services,an agriculturalresearch component and a project evaluationunit.

1.02 The project would be carried out over the five years 1973/74 through 1977/78 and benefit about one million of some of the very poorest people in the world. Average per capita incomes in the project area are about MF 14,700 (US$3C). The proposed project would be the Bank Group's second lending operation for agriculturein Mali. In 1972 IDA made a credit (277 MLI) for the improvementof irrigatedrice production. This project is proceedingsatis- factorily.

1.03 The project was identifiedby the Bank's Permanent Mission in Western Africa (PMWA) and prepared by Coverrimentassisted by consultantsfinanced by the French Fonds d'Aide et de Cooperation (FAC). This report is based on the findings of an appraisalmission that visited Mali during June/July 1973 com- posed of Messrs. M. Huas and F. Agueh (IDA), Mr. J. Doyen, (PMWA),Mr. J. Guilmoto (credit consultant)and Messrs. M. Casse and C. Gassion (FAC).

II. BACKGROUND

A. General

2.01 The Republic of Mali i some 1.2 million km2 in area and has a populationof about 5.2 million. It is landlocked,and Dakar in Senegal and Abidjan in Ivory Coast are its principal outlets, both road and rail, to the sea. The northern half of the country ls almost uninhabited. In the south, rainfall is better, but only 25% of the country receives more than the 550 ma per year needed for growing sorghum and millet, the staple foods. With the exceptionof the Niger river valley, where irrigationand flood recession cropping is possible, and the southernmostregion where annual rainfall exceeds 1,300 mm, most of the 25% of the country is suitable only for fast-growing, drought-tolerantcrops such as millet, sorghum, cotton and groundnuts. With a per capita GDP of about US$70, Mali 'is one of the poorest countries in Africa and one of the world's 25 "least developed"countries, s0 identîfîedby the United Nations General Assembly. 2.02 The country suffers from several development constraints,the principal of which are: (i) distance from the sea, the closest sea ports are Dakar and Abidjan, both about 1,200 km from Bamako the capital; (fi) lack of mineral and other natural resources,and because of low and variable rainfall and generally poor soils, a weak agriculturalbase; (iii) a serious shortage of skilled manpower, both technicaland management; and (iv) problems of communicationsdue to the size of the country, and its inadequateroad and telecommunicationssystems.

On the other hand, Mali has a hardworking populationaccustomed to living under harsh climatic conditions and with an absolute minimum of social services.

2.03 Serious droughts, frequently the result of ill-distributedthan of insufficientrainfall, seriously affected Mali in 1968, 1970, 1972 and 1973. As a consequence,food shortages have occurred and in the north many animals and some human lives have been lost. Most of the remaining population is undernourishedand consequently,in poor health. Massive bilateral and international food aid alone has enabled Mali to withstand the vagaries of the weather in recent years, and it is e:3sentialthat the country's productive capacity be rehabilitatedand strengthened;this would be the main objective of the project described in this report. On November 13, 1973 IDA approved a drought relief fund project under which Mali receîved a credit of US$2.5 million to finance activities concerned principallywith: (1) construction and rehabilitationof small-scale irrigation schemes; (ii) purchase of equipment and supplies for the veterinary services; and (iii) the equipment of well constructionand repair teams.

B. The AgriculturalSector

2.04 Agriculture, including livestock and fisheries is the mainstay of Mali's economy, and accounts for nearly half the country's GDP, 43% in 1972; and for virtually all foreign exchange earnings, US$54 million equivalent in 1972. Rural activitiesprovide a livelihoodfor about 85% of total population. earm sîzes vary greatly but generally 60 to 70% of holdings are less than 4 ha. About 35% of the 2 million hectares under cultivationare devoted to food crops, principallymillet and sorghum, and in the river valleys rice. Cotton and groundnutsare the principal cash crops, and in a normal year about 90,000 ha and 250,000 ha respectivelyare grown.

2.05 In recent years performance of the sector has been determined by fluctuationsin weather conditions. The main feature, however, has been an imbalancebetween a rapid development of production for export, and the significant decline in food crop production. Thus despite adverse weather, production of seed cotton rose from 39,000 tons in 1967 to 74,000 tons in 1971, and that of undecorticatedgroundnuts from 81,000 tons to 152,000 tons (see Annex 1). Both cotton and groundnutshave benefited from well coordinatedprograms carried out by adequately staffed and financed "Operationsde Developpement" (OD), see para 2.11, which have supplied extension assistance and modern inputs; efficient marketing channels have been set up and producer prices established which have given good incentives to farmers. -3-

2.06 In contrast all evidence points to a decline in foodcrop;production. Millet and sorghum production peaked in 1967 and since then has declined steadily, the average for the period 1968 - 1972 being 600,000 tons annually. Foodstuffshandled by official marketing channels decreased sharply in the same period, from 60,000 tons in 1967 to an annual average of 15,000 tons. Rice production also fluctuatedbut showed a slightly upward trend, probably as a consequenceof substantial investment in programs such as the IDA financed Mopti rice project. Production increased from 172,000 tons in 1967 to 198,000 tons in 1971.

2.07 The major constraints to increasingcereal production probably are the marketing and pricing mechanisms. The official producer price for millet/ sorghum of MF 20/kg is far too low relative to actual prices for cereals in unofficial trade, see para 7.08, the prices paid to producers in neighboring countries, and producer prices for export crops in Mali. This and ineffectual but restrictiveGovernment marketing controls undoubtedlyhave seriously hindered the expansion of cereal and other food crop production. The following table gives gives an indication of the return per hectare of the principal crops grown in Mali under traditionalmethods.

kg/ha MF/kg /1 Revenue Seeds and Return /2 per ha tools per ha MF MF MF

Millet/sorghum 600 35 21,000 500 20,500

Rice 700 25 17,500 500 17,000

Groundnut 500 30 15,000 500 14,500

Cotton 400 50 20,000 500 19,500

Improved cultural methods under the supervisionof extension service would result in increased returns per hectare as follows MF 17,500 (150%) for millet/sorghum,MF 34,500 (200%) for rice, MF 29,500 (200%) for groundnut and MF 44,500 (225%) for cotton.

/1 Government fixed prices except for millet/sorghum which takes into account prices available in unofficial trade.

/2 Before labor costs. C. DevelopmentOptions

2.08 The shortage in the supply of cereals and consequent large importe, have convinced Covernment of the need to increase domestic food production. Governnent has now set an objective of attaining self-sufficiencyin cereals by 1978/79. This will require increasing millet, sorghum and maize production bv 200,000 tons and paddy output by 100,000 tons. To achieve this, Governiaent plans to (i) concentrateon improving food crop production within the frame of existing "Operationsde Developpement";(ii) create "Operationsde Develop- pemént" for millet and sorghum production; these will be difficult to implement in t:heabsence of improved high-yieldingvarieties acceptable to the local taste. Ultimately, the success of Government'splan to expand food production depends largely on its ability to provide adequate financial incentives to producers and efficientmarketing services. The proposed project would help achieve some of the Governnent'sobjectives.

2.09 Other Government priorities are (i) rehabilitationand expansion of livestock and inland fishing industries severely damaged by recent droughts; (ii) exploitationof Mali's substantialwater resources mainly the Senegal and Niger rivers systems for intensive irrigated agriculture;this however, will be very expensive and if finance became available, the rate at which such development could be introducedwould be slow; and (iii) improvingvalue added through agriculturalprocessing. Studies and projects preparation in these E;ectorsare underway within the framework of the next five year plan which is expected to be completed early in 1974.

D. Institutions

2.10 MInistry of Production. Most official agriculturalactivity i8 managed and controlled by the Ministry of Production. The Ministry's Direction Generale de la Production (DGP) controls the so-called "Operations de Developpement"(OD) through its Service de l'Agricultureto which the managers of OD report directly. The Institut d'Economie Rurale (IER), has responsibilityfor planning and preparing development projecte and programs. IER also coordinatesand controls agriculturalresearch, Governnent-owned farms, and agriculturaleducation.

2.11 Operations de Developpement.(OD) A number of national or regional developmentprograms have been initiated during the past eight years to increase agriculturalproduction. The OD are administrativeentities with a high degree of management and financial autonomy. The OD are concerned essentially with a single cash crop such as groundnuts,cotton, rice, tobacco, and fruit, but subsequentlyusually diversify to foodcrops, grown traditionally by the farmer. There are now 16 OU which are all organized on the same pattern and typicallyprovide all support services needed by farmers: inputs; credit; training for staff and farmers; crop purchase and collection. By and large the OD have been successful. - 5 -

2.12 Societe de Credit Agricole et d'EquipementRural (SCARR). SCAER is controlledby the Ministry of Finance and Trade, and i an autonorous state company. SCAER supplies farm equipmentand inputs on credit or cash. SCAER financialresources are its capital - all provided by Government-the proceeds of specific levies on cotton and groundnutspurchased by the OD; 1/ operationalrevenues, and grants from aid agencies. SCAER benefits from rediscounting facilitiesprovided by the Central Bank. SCAER provides credit only to farmers partlcipatingin an OD, other farmersmust purchase lnputs for cash. Further details on SCAER are at para 4.13 to 4.17.

2.13 Societe Malienne d'Import Export (SOMIEX). Also controlledby the M4inistryof Finance and Trade, SOMIEX has a monopoly for groundnutpur- chasing outside OA areas and monopoliesfor the export of groundnutsand cotton and import of a wide range of products including sugar and cement. SOMIEX sells imported goods at standard prices over the whole country, and losses incurred in these transactionsare met by profits generated by exported products and by Governmentsubsidies.

2.14 Office des Produits Agricoles du Malî (OPAM). Another Mlnistry of Finance and Trade-controlledstate company, OPAM has a monopoly on the local marketing of cereals. This may be exercised until OPAM supplies meet the country'sbuffer stock requirements. OPAM has also a monopoly for the import and export of cereals, and fruits. OPAM has generally failed to make cereals available to consumers at reasonable costs because of the unrealistie producer price policies and poor managementand usually OPAM is forced to resort to coercive measures to obtain its cereal requirements. Currently the major role of OPAM.,given its problem in marshallingdomestic supplies, is to distribute foreign relief supplies of cereals.

E. AgriculturalResearch

2.15 Agriculturalresearch in Mali is monitored hy "Directionde la Recherche" (DGR), a division of IER.,but ie carried out primarily by members of the French Groupementd'Etudes et de Recherchespour le Developpementde l'Agronomietropicale (GERDAT). These are Institut Francais de Recherches FrnitieresOutremer (IFAC) for fruit and market gardening research; Institut de Recherchesdu Coton et des Textiles Fxotiques (IRCT) for cotton and other fibers and Institut de RecherchesAgronomiques Tropicales et des Cultures Vivrieres (IRAT) and Institut de Recherchespour les Huiles et Oleagineux (IRHO) for food crope and groundnutsrespectively.

1f /F/4,OOOper ton of seed cotton and MF 2,000 per ton of undecorticated groundnuts. - 6-

2.16 Groundnut research started in Mali in 1962 and has emphasized variety improvementwork. The long cycle variety 28.206, selected and suitable for most of the OA area, has yielded up to 2.9 T/ha; and the short cycle variety 47.10 chosen for the driest parts of the project area has produced yields of 2 T/ha under experimentalconditions, Other research programs cover selection for rosette virus disease resistance, the use of seed dress- ings, and tbihtrials with fertilizers and herbicides. Research on millet and sorghum is directed mainly towards the selection of high-yieldingvarieties with a short growing cycle, and a graîn palatable to the taste of the consumer. Yield improvementhas been achieved, but varieties with generally acceptable grain qualities so far have been elusive. Hopefully, the InternationalCrops Research Institute for the Semi-Arid Tropics (ICRISAT)at Hyderabad in India which receives financial support from the Bank vill produce results that will be applicable in Mali.

III. THE PROJECT AREA

A. General

3.01 Location. The project area is situated in the Western part of Mali and covers about 125,000 km2. From an East-West line, Tominian-Sadiola,approximately 850 km in distance and running from the boundary of Upper Volta to that of Senegal, the project area extends 50 to 200 km North and South (see map). The project area represents 10% of the country's total area, and 20% of its populated areas, and comprises part of the administrativedistricts of Segou, Bamako and Kayes.

3.02 Climate. The project area is situated in the Sudan zone, an eco- climatic zone distinguîshedby a single rainy season extending from March/ ApriL to September/October. Annual rainfalls increase from 550 mm in the northern part of the project area (Mourdiah) to 1,300 mm at Faraba In the South (see rainfall map). Rainfall is very erratic, however, being ill- distributed and unreliable. Tenperaturesvary from minima of between 12'C and 20'C in December/January,to maxima of between 38°C and 43C in April/May. Humîdity is lowest in April--25 to 35%--and highest in November--60 to 82%. Evapotranspirationis high, but in a normal year water i adequate for cultivation of a wide range of annual crops during the period of May-September.

3.03 Water. The Niger and Senegal rivers and tributariesflow through the project area (see map); but there are no permanent surface water sources in the northern section of the project area. Ground water is available over the whole of the project area, and generally can be reached at lesa than 20 m in the east, but only at greater depths in the north and west. Traditional wells are adequate in the wet seasons of years of normal rainfall, but due to restricted depth, many dry up in the average dry season. 7 -

3.04 Topography,soil and vegetation. Generally fiat ïn the north and east, moving west and south the project area becomes undulatingand then hilly and dissected by winding rivers and streams. No general soil survey has been carried out in Mali, and knowledge of the project area's soîls is based on limited surveys and on the extrapolationof data from countrieswith similar soli conditions. About half the project area i cultivable,and soîls are mainly leached ferruginoustropical soils of medlum fertility suitable for millet, sorghum and groundnut.

3.05 Population. Population of the project area was estîmated at 1,000,000 in 1972, or about 20% of Mali's total population, and to be growing at 3% annually, including migration from less favored zones. About 90% of the work force is employed solely in agriculture. Project farmers are consideredamong the best in the Sudano-Saheliancountries, being hard-working and receptive to innovations. Health conditionsare about average for the drier parts of West Africa, i.e. better than in the forest areas. Malaria, measles, bilharzia, various intestinal diseases, and tuberculosisare all common. Onchocerciasisi present in the area but confined to limited and sparsely populated areas along parts of the Senegal River and its tributaries. None of the project area is included in the internationallyfinanced onchocer- ciasis eradicationcampaign; but the disease is not considered a constraint teoeffective project development.

3.06 Land tenure. The basis of the system is that all unused land belongs to the State, and that individualsestablish a right of usufruct by occupyîng and cultivating land. This right is fairly permanent and may be translated into official ownership through deliveranceof a land title.

3.07 Farming system. Direct exploitationof the land by family labor and the occasionalhiring of outside labor, is almost universal in the project area. There are some 200,000 farms in total, of which 60 to 75% support and sustain one to 10 persons, 25 to 35% - 11 to 25 persons, and about 5% more than 25 people. Farm sizes vary greatly but generally 60 to 70% are less than 4 ha. The principal crops, in order of importance,are millet, sorghum, groundnut,maize, rice, cotton, cassava and sweet potatoes. The land, once cleared, is cultivated for 5 to 7 years under a rather irregular'system of crop rotation and then left fallow for 15 to 20 years. There is no land shortage and the only constraintto farm increase would occasionallybe availabilityof labor. All farmers keep goats, sheep and poultry. There is no trypanosiomasis in the project zone and 50% of the farmers keep cattle.

3.08 Communications. The railway line of "Regie des chemins de fer du Mali" (RCFM) linking Koulikoro and Bamako with Kayes and the seaport of Dakar in neighboring Senegal passes through the center and west of the project area. The railway constitutesMali's main outlet to the sea. The performanceof the railwqayhas declined recently, but it is hoped that it will improve as a result of ongoing projects in Senegal and Mali assisted by the Bank Group (Credîts 384-MLI and 314-SEN and Loan 835-SEN). The railway would transport inputs imported for the project and all project induced exports. The main road network in the project area, comprisingabout 2,200 km of classified roada - 8 -- maintainedby Direction Nationale des Travaux Publics (DNTP), is being improved under an IDA financed highway project (Credit 383 - US$ 7.7 million), and a FAC grant of MF 931 million. IDA is consideringanother highway project which would extend the existing main road network in the project area. Secondary roads and tracks, linking villages with one another and with main roada, are adequate in the east of the project zone but are insufficientin extent and generallyin poor condition in the center and much of the west. Most secondary roads and tracks are impassablein the wet season. The local authoritiesres- ponsible for the maintenance of secondaryroads and tracks can do little because of lack of equipment and funds. The proposed project therefore, includes the improvementof the worst part of some 1,500 km of tracks.

3.09 Health services. In the project area, which includes Bamako, there are six hospitalswith 1,135 beds, 18 maternity centers with 168 beds, 25 hlealthcenters with 116 beds and 125 dispensaries. These facilities are insufficient for the needs of the population, and the health services lack both funds and qualified staff. The proposed project therefore includes a modest program to improve medical facilities in the remotest parts of the prolect area.

3.10 Education. The literacy rate in the project area, as in Mali as a whole is low at 10%. Literacy among rural people is even lower than the national average, and the literate farmer is an exception. In order to facilitate the adoption of new agricultural techniques essential to achieve objectives, OA, with the help of Government and outside financing, has started a functional literacy program, see para 4.07. This program is generally regarded 25 useful and an important contribution to the success of "Operation Arachide," although a detailed evaluation has still to be made.

B. Operation Arachide

3.11 Following a steady decline in groundnutproduction and exports after a record crop of 138,000 tons in 1957, Government tried unsuccessfully to rehabilitate the groundnut industry. Finally, "Operation Arachide" (OA) was established in June 1967. Fonds d'Aide et de Cooperation (FAC) of France provided part of the financingand "Bureau pour le Developpement de la Produc- tion Agricole" (BDPA), a French company, the technical assistance. OA was initially directed to reorganizatinggroundnut marketing as deficienciesin this were principalreasons for a loss of farmer interest in groundnuts as a cash crop. This effort was supported by a 25% increase in the producer price for groundnuts in 1969 and subsequentlyOA proceeded to promote improved farming methods and modern inputs. Additionally,attention was paid to farmers' education, particularlythrough the functional literacy program. By the 1972 growing season, 52,000 OA farmers growing 99,000 ha of groundnutsproduced 76,500 tons of groundnuts,or about 51% of Mali's production. In 1972/73,OA collected 80% of ali's marketed production of the crop. In that same season 50% - 9 - of OA farmers sowed at the prescribed time, 30% at the recommendcddenaity, 36% applied fertilizersand 32% used seed dressingson groundnuttiand 20% seed dressingson millet and sorghum. In the five years of OA operation the distributionof improvedseeds increased 12 fold, yields increased from 500 kg/ha in 1968 to 814 kg/ha in 1971, the area under the supervisionof OA doubled, and as a result of this, national productionincreased from 81,000 tons in 1967 to 153,000 tons in 1972 (see Annex 2).

3.12 OA achievementshave been excellent in spite of adverse weather conditions. Its farmer support services are efficient and honest, and most key positionsare now filled by local staff, with some expatriatesremaining as advisers. However, OA administrationneeds improvement,particularly accounting and credit control.

IV. THE PROJECT

A. Description

4.01 The project would be a second phase, April 1973 to March 1978, of Operation Arachide in which OA's activïtieEwould be intensifiedand extended to new areas. The project is underway and disbursement of the proposed IDA credit would commence in Project Year 2 (PY 2), see para 5.09. Principal project activitieswould be:

(a) intensifyingOA activities in areas now served by the program, to cover not only groundnutsbut all principal farming activitiesespecially the productionof basic cereals and livestock;the name of OA would be changed to "OperationArachide et Cultures Vivrieres"(OACV) to stress the importanceof foodcrop productionin the project;

(b) expandingOACV services into new areas;

To support, the above, the project would include also:

(d) a rural track improvementprogram, under which spot repaire and improvementof about 1,500 km of tracks;

(e) a functionalliteracy program;

(f) a program of agrîculturalresearch to supplementthe current national program; - 10 -

(g) improvementof medical facilitiesin the project area;

(h) improvementof veterinary services in the project area;

(i) supply of equipment on credit to selected backsmiths; and

(j) establishmentof a project evaluationunit.

The project would also finance a study on millet and sorghui producer prices and marketing arrangements (see para. 7.08).

B. Detailed Features

4.02 Agricultural developmentprogram. The hectarages of groundnut, millet and sorghum that would be grown under improved techniqueswithin the OACV program and the incrementalhectarage attributabledirectly to the project are summarizedbelow; details are in Annex 3.

Project Year (PY) Pre- 1 2 3 4 5 6 7 8

(hectares'OOO) 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 rounded

Total on which OACV recommended practices employed:

Groundnut 100 105 138 157 172 182 187 191 191 Millet/Sorghum 114 117 234 245 255 264 267 270 270

'ncremeratalhectarage attributableto project:

Groundnut - 1 3 8 16 23 28 32 32 Millet/Sorghum - - - 3 7 10 13 17 18

Tlueabove estimates assume that even without the project there would be growth in the use of improved farming techniques.

4.03 Improved agriculturalpractices. Participatingfarmers would move through stages of improved practices. The pace at which they would do so would depend on their current cultivationmethods, receptivenesa to advice, and credit worthiness in so far as this would govern their use of improved inputs. All participantswould grow millet and/or sorghum in rotation with groundnuts and would receive technical advice on how to maximise yields. A range of improved practices has been introducedby OA over the past five years and consequently those now recommendedhave been fully tested and proven. The recommended practices for groundnutsinclude early and dense sowing, timely weeding, fungicidalseed dressing, fertilizer; applicationand the use of improved seeds; it is expected at full development - 1'1- that at least 70% of farmers would us such seeds. For millet and sorghum, and in the absence of better varieties, timely sowing and weeding, and seed dressing are the basic recommendedpractices. However, these crops benefit from the residual effect of fertilizersapplied to groundnut and the better seedbed produced when using ox-drawn equipment for seedbed preparation. Ox- drawn equipment would be available to qualified project farmers on credit.

4.04 Administrativestructure. The project area would be divided into nine sectors. Each sector would have two to five sub-sectors,giving a total of 26 sub-sectors and 308 extension agents for the project as a whole. Each extension agent, would supervise an average of about 8 villages wîth some 45 farmers per village. For the project overall the ratio of extensionworkers to farmers would be 1:350.

4.05 Constructionprogram. The program would include the construction of a headquartersoffice in Bamako, 27 offices, 29 sheds and 33 houses in Bamako, sectors and sub-sectors,4 workshop-grages,and the extension of OACV's central workshop and garage in Bamako. All these buildings would be appropriately equipped and furnished.

4.06 Rural track improvementprogram. (Annex 4) The program (Annex 4) carried out over three years starting in PY2, would improve the worse parts of some 1,500 km of tracks located in the Western and Central Sectors of the project area. These tracks are essential for efficient crop collection, general trade and the effective use of extension services, and of medical and veterinary personnel.

4.07 Functional literacy program. (Annex 5) The main objective of functional literacy (Alphabetisationfonctionelle - AF) programs is to help individualsincrease their productivityby teaching them the elements of reading, writing and arithmetic needed for a better understandingof their work or business through "out-of school" courses carried out in their native language. In agriculture an AF program helps farmers to better understand and thus apply more efficiently technical innovationsrecommended by extension workers. Thus, an effectiveAF program should significantly reinforce the impact of the extension services. It is estimated that by the end of 1973 some 30,000 farmers in OACV areas will have completed AF courses. An evaluation of AF programs in Mali in general and within OACV in particular has not been made. Thus the-program to be financed under the project would be restricted to (a) the evaluation of past and ongoing OA/AF programs and (b) pending the conclusion of this evaluation,establishing, staffing and equipping an additional 500 AF centers in PY1 through PY3. If as expected the evaluation confirms the effectivenessof AF a further 200 centers would be established.

4.08 Research programs. (Annex 6) The research prograæs would be divided into (i) applied studies on diversificationof agriculturalproduction in the project area by the introduction,in longer than traditionallyemployed rotations, of crops such as cotton, maize, cowpeas as well as fodder crops; (ii) - 12 - continuationof work on groundnut for unproving local varieties and adapting materials developed in countrieswith smilar conditions;pesticides and fertilizers trials and (iii) soil surveys.

4.09 Improvementof medical facilities. (Annex 7). This would consist of a modest program to improve the activities and quality of existing health services in the rerotest parts of the project area. The pur- posc of the improved facilitieswould be to detect and combat at the earliest possible stage outbreaks of infectiousdiseases. These usually affect the project area's population at the beginning of the cultivation season with the onset of the rains. The program would also provide train-- ing for farm families in basic hygiene. Additional staff, dispensaries, vehicles, equipment,medicines and operating costs required for the above purposes would be provided under the project.

4.10 Improvement of veterinary services. (Annex 8) Existing veterinary services which generally lack funds for equipment and medicines would be strengthenedunder the project. Such strengtheningis essential given the planned development of ox-drawn cultivation in the project area. In addlitionto improved veterinary care for work oxen farmers would be trained in animal husbandry. Additional staff, dips, vehicles, equipment, veterinary medicines (for which farmers would be charged) and operating costs would be provided under the project.

4.11 Evaluationunit. (Annex 9) The effects of the proposed project on the population in OACV areas and on the economy of Mali would be subject to study by an Evaluation Unit that would be established under the project. This unit would measure among others the impact of the project on the income and well being of participatingfarmers and generally assess changes in economic and social indicators. This unit would be autonomousbut would be attached to the Institut d'EconomieRurale and work in close cooperationwith this institute.

4.12 Environnentand health. The project should have amall but beneficial impacts on environment and health. Moderate improvements in health care would result from the medical program and since in areas covered by OACV its agents are empowered to prevent the clearing and cultivationof slopes subject to soil erosion, the dangers of soil degradationwould be diminished.

C. Credit Arrangements and Supply of Inputs

4.13 Sale of farm inputs to farmers, either for cash or on credit, is a nationwidemonopoly of Societe de Credit Agricole et d'EquipementRural (SCAER). Since April 1971, SCAER has acted primarily as a central supply .lgencyfor the "operations,"such as OA, which themselvesdeliver the inputs to farmers, collect cash payments and credit repaymentsand hold stocks of inputs on belialfof SCAER (see Annex 11). - 13 -

4.14 Credit operations in OA areas have suffered from the following problems: (i) inadequatecoordination between SCAER and OA maniagingstocks of inputs which led to shortages in some areas and surpluses in others; (ii) a proportion of overdue debts, of about 20% of all loans made to groundnut farmers since 1968, compared with 2% for cotton farmers in "operation cotton" 1/ areas; (iii) continuing controversybetween SCAER andl OA over the financing of credit for groundnut seed; OA has retained, over the objections of SCAER, funds from repayment of other loans to finance credit for seed. Recently, however, a "reciprocalservice agreement" has been prepared and accepted in principle by both parties, which defines more clearly the responsibilities of OA and SCAER. An improved system of input ordering and stock management is being implemented,and Government has agreed that more legal pressure may be put on defaulting farmers. A condition of credit effectivenesswould be that a "reciprocal service agreement" satisfactoryto IDA and defining the responsibilitiesand obligationsof both parties had been signed between OACV and SCAER.

4.15 Under the project, farm inputs and equipment, except seeds would continue to be procured by SCAER and supplied to farmers, both for cash and on credit, by OACV. The arrangementswould be financed by SCAER through re- discountingwith the Central Bank. The Banque de Developpementdu Mali (BDM) serves as intermediary,and charges 1.5% on top of the Central Bank rediscount rate which currently is 3.5%. Effectively BDM is engaged in an almost risk- less operation and its charge should thereforebe reduced. Informal assurances were obtained that the terms and conditions under which BDM would finance farm inputs and equipment procured by SCAER for the project should be satisfactory to IDA. Credit for seeds would be the direct responsibilityof OACV and be financed from a revolving fund that would be set up by OACV for this purpose. It was agreed that "Office de Surveillanceet de Regulation des Prix" (OSRP) would take over responsibilityfor all outstanding debts of OA to SCAER in respect of seed (effectivelywriting off past losses incurred in seed distributionoperations) and that no later than six months after signature of the proposed IDA credit responsibilityfor supplying seed, and credit for seed, would be transferred from SCAER to OACV which is best equipped for this purpose. The project would include provision for strengtheningOACV's existing credit organizationand staff, including the finance to upgrade training of credit staff. All project farmers would be eligible for credit for seasonal inputs. No credit would be provided for draft animal purchase since most farmers possess such animals and, as at present, applicants for medium-term credit for farm equipmentwould be required to prove possession of a pair of oxen and of at least 1.5 ha of destumped land.

1/ Cotton, unlike groundnut, can be sold only to a single processing agent, CFDT, and can be used to only a very limited extent by the producer himself. Consequently,credit is easily collected by CFDT through deducting repayments from the growers sales proceeds. - 14 -

4.1,5 Subsidies. Farm inputs, and spare parts for equipment, are sold by SCAER at prices higher than cost delivered to farmer. Only in the cases of seeds and of ox-drawn implements are prices lower than cost and a subsidy involved. On average the farmer pays about 60% of the cost of seeds and implements,and the subsidies for the whole country currently amount to about MF 500 million a year, partially covered by Government levies on produce sales, and in the past the balance has been met by FAC, FED and when necessary by Government contributions. In future FAC and FED intend to reduce and eventually cease their grants for these subsidies. Government cortributionwould therefore be increased tnless the subsidies are reduced or the levies raised, as happened recently. Total subsidies in project costs are covered by Government contributions. Given the critical need for farmers to use improved seed, and the desirabilityof sponsoring ox-drawn equipment it would be undesirable to take any measures that would increase the cost to the farmers of these items at this time, and it was agreed that IDA would be consulted on any changes proposed by Government in policy regarding the prices of, and subsidies on, production inputs.

4.17 Interest rate. No formal interest is charges on seasonal and mediu=- tern credit made to OA farmers, but financial costs (equal to 8.5% of cost price delivered to farmers) and other charges including operating expenses, provision for losses and bad debts, and an adequate spread are included in SCAER cost prices. A feature of the arrangement,however, is that as financial charges and provision for bad debts apply equally to both cash and credit sales, they discourage farmers from buying for cash. It was agreed that in future the prices of Inputs and equipment sold for cash would be appropriately discounted to encourage cash sales. Such discount should reflect savings generated by cash purchases roughly estimated at 7-9% of cost price delivered to farmers.

V. COST ESTIMATES AMDFINANCING

A. Poect Co8tS

5.01 Project cost estimates are detailed in Annex 12 and summarized irn the following table. Costs are based on mid-1973 prices. The estimates incLiet provision for price escalation 1/ for various project items. A phys kal contingency of 5% has been applied to all project costs. Total contingencies amount to US$4.0 million or 27% of total costs before con- tin'encies. Project costs include import duitiesand taxes which are estimated at about MF 649 million (US$1.3 million).

1/ rhe followinR rates of price increase have been used: Technical Eiuîpment Civil Works Assistance Others 1973 10 12 7 3 1974 14 18 7 6 1975 il 15 7 6 1976-80 7.5 12 7 6 -15-

SUMMARY PROJECT COST ESTIMATE

% Foreign Local For. Total Local For. Total Exchange ------MF Million------US$ '000------

1. MAIN SUBPROJECT Buildings 643.6 262.9 906.5 1,287 526 1,813 29 Furniture & Equipment 62.1 93.1 155.2 125 186 311 60 Vehicles 184.8 277.3 462.1 369 555 924 60 Tech. Assistance 201.4 818.8 1,020.2 402 1,638 2,040 80 Local Staff 1/ 352.5 - 352.5 705 - 705 - OperatingCosts 1/ 321.1 362.1 683.2 642 724 1,366 53

Total 1 1,765.5 1,814.2 3,579.7 3,530 3,629 7,159 51

2. ANCILLARY SUBPROJECTS 1/ Tracks Improvement 201.2 209.4 410.6 402 419 821 51 Functional Literacy 92.7 92.7 185.4 186 185 371 50 Research 107.5 99.2 206.7 216 198 414 48 Med. Assistance 94.4 77.3 171.7 188 155 343 45 Vet. Assistance 65.1 62.5 127.6 130 125 255 49 Evaluation Unit v» 89.4 67.4 156.8 V/ 178 135 313NX 43 Studies 2/ - 45.0 45.0 - 90 90 100

Total 2 650.3 653.5 1,303.8 1,300 1,307 2,607 50

Total 1 & 2 2,415.8 2,467.7 4,883.5 4,830 4,936 9,766 51

3. FARM INPUTS 1/ Equiptnent 212.8 1,206.0 1,418.8 426 2,412 2,838 85 Seasonal Inputs 619.5 512.8 1,132.3 1,24- 1,025 2,265 45

Total 3 832.3 1,718.8 2,551.1 1,666 3,437 5,103 67

4. REVOLVING FUND _ 20.7 31.1 51.8 42 62 104 60

Total 1 to 4 3,268.8 4,217.6 7,486.4 6,538 8,435 14,973 56

5. CeNTINGENCIES Price 714.3 896.5 1,610.8 1,429 1,793 3,222 56 Physical 163.4 210.7 374.1 327 421 748 56

Total 5 877.7 1,107.2 1,984.9 1,756 2,214 3,970 56

GRAND TOTAL 4,146.5 5,324.8 9,471.3 8,294 10,649 18,943' 56

1/ Incremental Costs, except for Evaluation Unit 2/ Cereal producer prices and marketing arrangements study and accountancy assistance to OACV Blacksmith equipment and motorcycles and bicycles for staff. - 16 -

5.02 As the project is a continuationand expansionof an existing program, project costs are those that are additional to the costs of maintaining the ongoing program at its current level of activity. An exception, however, is the case of technical assistancewhere total costs reflect the requirementsto implement the project.

B. FinancialArrangements

5.03 It is proposed that IDA should make a credit of US$8.0 million to meet 42% of total project costs. The credit would be equivalent to 75% of project foreign exchange costs which are estimated at MF 5,324.8 million (US$10.6million). Project financingwould be completed by FAC providing 13% of project costs, Government 23% and farmers 22%. Details of the proposed financing are set out in the following table and in more detail in Annex 13. IALI

INTEGRATEDRURAL DEVEIDPtENT PROJECr

SUMNARYOF PROJECT FINANCING

IDA FAC GOVERNNENT PARNERS GRANDTOTAL

My m us$ looo % MFn US$'000 MNF m us$ 0ooo X Mp . US$ '000 . MF u US$ '000 Z

Buildings 672.8 1,346 70 90.2 180 10 194.6 389 20 - - - 957.6 1,915 100 Equipment and Furniture - - - 121.6 244 59 84.4 169 41 - - - 206.0 4f3 100 Vehicles 397.4 795 55 73.0 146 10 258.8 518 35 - - - 729.2 1,459 100 Technical Assistance 860.6 1,721 70 361.1 722 30 ------1,221.7 2,443 100 Malian Staff 403.4 807 70 124.6 249 21 51.6 103 9 - - - 579.6 1,159 100 Operating Costs 818.7 1,637 72 231.1 462 20 94.6 189 8 - - 1,144.4 2,288 100 Cart Bodies ------159.6 319 100 159.6 319 100 Farm Inputs 1/ ------748.1 1,496 43 1,001.1 2,002 57 1,749.2 3,498 100 Seeds 103.8 208 16 - - - 214.5 429 33 324.0 648 51 642.3 1,285 100 Revolving yund 2/ - - - - _ _ 51.8 104 100 - - - 51.8 104 100 5tudies il 45.0 90 00- - - . - - 45.0 9C 100

Sub-Total 3,301.7 6,604 44 1,001.6 2,003 13 1,698.4 3,397 23 1,484.7 2,969 20 7,486.4 14,973 100

Contingencies 698,3 1.396 35 257.8 516 13 449.3 899 23 579.5 1.159 29 1.984.9 3.970 100

GRANDTOTAL 4.000.0 8.000 42 1.259.4 4.296 23 2,064.2 4.128 22 9.471.3 18.943 100

The above percentages refer to total project costs. Percentages on project costs during IDA disbursement period (PY 2 to PY 5) are detailed in Annex 13.

Exchange rate: US$ 1 = MF 500.

1/ Incremental farm inputs (excluding seeds) at full costs; Government contribution include cost of subsidies

2/ Revolving Fund for blacksmiths' equipment and motorbicycles and bicycles for extension staff. y/ Cereal producer prices and marketing arrangements study and accountancy assistance to OACV. - 18 -

5.04 The contributions proposed for farmers and Governnent appear high given the tight financial situation of both. However, farmers' contributions include repaymentsfor inputs and equipment totallingMF 983 million; the remainder of their contributionMF 1,081 million would be the down payments, the purchase of inputs for cash, the costs of cart bodies and contingencies. Government'scontribution would include about MF 444 million that it is estimated SCAER would rediscountwith the Central Bank in connectionwith its providing farm equipment on medium term credit. MF 645 million of Governnent's contributionwould be offset by the import duty and added value taxes component of project costs; a furtherMF 1,036 million would accrue to Government/OACV from the "bareme arachide"and serve to meet the cost of extension services.

5.05 Bareme Arachide (Groundnutschedule) the governmentafter consultation with OA and OSRP establishesannually a list of the estimated expenses covering the various operations from the groundnut producer to CIF Europe. The list, called Bareme Arachide, for the 1973/74 season is at Annex 14 table 1. Under this arrangementGovernment/OACV would receive a cess of MF 7,600 per ton of undecorticatedgroundnut marketed by OACV, which would generate an estimatedMF 1,036 million on the incrementalmarketed project production during the period 1973/74 through 1977/78. Surpluses arising when the CIF price exceed the schedule price accrue in fact to SOMIEX and shortfallsare met by Government. It was agreed that the annual Bareme Arachide would be establishedin consultationwith IDA.

5.06 It is proposed that an IDA credit of US$8 million be made on standard terms to Governmentwhich will pass it on to OACV. The IDA credit would be disbursed during the four-yearperiod 1974/75 through 1977/78, the first year costs being financed by FAC and Government. Funds to meet recurrent operating costs, after 1977/78 until full production is reached in 1980/81 would total MF 810 million. Governmentshould have no problem in finding these funds from project revenues and there would be no point in extending the IDA credit disbursementperiod beyond 1977/78.

5.07 To ensure the efficient and timely execution of the project against the background of very tight budgetary constraints,it is proposed that IDA should prefinance project activities. To that effect, immediatelyafter credit effectiveness,an initial IDA disbursementof US$200,000equivalent would be made into a special account that Governmentwould establish for this purpose; from this account Governmentwould be able to finance project expenditures. IDA would replenish the special account upon reception of satisfactoryevidence that such expendituresare eligible for financingout of the proceeds of the credit. Ilowever,should any disbursementout of the special account fail to meet the criteria of eligibility,IDA would refuse reimbursement,and Governmentwould be under the obligation to deposit the correspondingamount into the special account. Agreement was reached to that effect. A conditionof effectivenessof the credit would be that the special account has been established. - 19 -

C. Procurementand Disbursement

5.08 Procurement. Project vehicles and graders amounting to US$1.5 million would be procured on the basis of internationalcompetitive bidding in accordance with IDA guidelines.

Equipment and furniture valued at US$0.4 million and for which there is a satisfactorydegree of local competition,would be procured by local competitivebidding. Contracts for the constructionof project offices, houses, stores and garages evaluated to about US$1.9 million are not suitable for internationalcompetitive bidding due to the dîspersed location of the work and the small size of individual contracts and would be awarded under local competitivebidding. A satîsfactorydegree of competitionbetween experienced local contractorscould be expected. In appraisal of bids, domestic civil works contractorswould be allowed a preference margin of 7.5%.

Farm inputs (fertilizers,agrocides) and implements for draft animals amounting to US$3.5 million, to be financed by Government and farmers, would be procured by SCAER as part of the country's total requirements. SCAER purchase procedure, which is based on satisfactorycompetitive bidding, would continue under the project. An informal understandingwas reached that IDA would be consulted on the preparation and publicity of tender documents and the evaluation of bids for the SCAER procurement. Seeds required by the project costing an estimated US$1.3 million would be locally produced and distributed under OACV supervision. Cart bodies valued at US$319,000 would be supplied or purchased locally by farmers.

Technical assistance and consultant services to the project is expected to cost US$2.5 million; it is proposed that a contract should be made with BDPA, which has successfullyassisted the ongoing project, to supply experts required by OACV and costing an estimated US$2 million. Similarly, GERDAT, which is currently assistingMali in agriculturalresearch, would supply the experts required at an estimated cost of US$150,000. Internationally recruited staff at a cost of about US$390,000 would be recruited under procedures acceptable to IDA to evaluate the functional literacy program, to provide accountancyassistance to OACV, to head the evaluation unit and to carry out a study on cereal producer prices and marketing arrangements.

A total of US$3.5 million would cover Malian staff and operating expenses, credit for blacksmiths'equipment, motorcycles and bicycles for the extension staff. The rural track improvementand maintenance program would be carried out by force account, which is the only practical means for tiimelyand proper execution of this program.

An amount of US$4.0 million would be unallocated. - 20 -

5.09 Disbursementof the IDA credit would start in 1974/75, the second year of the project. The proceeds of the credit would cover expenditures during the four-year period on the following basis:

(a) 100% of foreign expenditures or 66% of total expenditures for vehicles and graders imported for the project - US$795,000.

(b) 18% of the incremental cost of seeds - US$208,000.

(d) 85% for the salaries of internationallyrecruited staff and consultants for project management- US$1,721,000.

(e) 100% of foreign expendituresfor a proposed cereal marketing study and accountancy services - US$90,000.

j (f) 75% of incremental expendituresfor local staff - US$807,000.

" (g) 80% of incrementaloperating costs of Project - US$1,637,400.

US$1,389,000of the credit would be unallocatedto cover contingencies.

5.10 Applicationsfor disbursementsunder categories (a), (c) and (e) would be supported by contracts and shipping and other appropriate documents. For categories (b), (d), (f) and (g), applicationswould be supported by certificates issued by the Project Manager that expenditures had been incurred for project purposes. Documents supporting applications under categories (b), (f) and (g) would not be submitted for review but would be available for inspectionby IDA. A schedule of estimated disbursementsby semester is in Annex 13.

D. Project Accounts and Audit

5.11 OACV accounts require to be improved and an accurate opening balance sheet established. An informal understandingwas reached that an independent accountancy firm or consultant would be engaged under the project for this purpose.

5.12 Project accounts would be kept by OACVin accordance with established accountingprinciples, would be audited by a firm of independent auditors satisfactoryto IDA, and would be submitted together with the auditors report to IDA within four months of the close of each financial year. The accounts of Office de Surveillanceet de Regulation des Prix (OSRP) are audited by the government Audit Service. To enable IDA to - 21 - assess arnually the amount of the groundnut reserve (see para 7.05) these would be submitted together with the auditors report to IDA within four months of the close of each financial year. Agreement to this effect was reached with Government.

VI. ORGANIZATIONAND MANAGEMENT- STAFFING MND TRAINING

A. Organization and Management

6.01 Project entity. The project would be managed by "Operation Arachide et Cultures Vivrieres" (OACV), see para 4.01. As OA's performancehas been satisfactoryin the past, no significantchanges are proposed in its organization and administration.

6.02 Board of Directors. OA has a Board of 20 directors which meets at least twice a year to consider general policy and to determine program details and budgets. Board members are 13 Governmentofficials, three technical experts, three farmers' representativesand one representativeof OA staff; the chairman is the Minister of Production. In order to ensure the efficient execution of project componentsinvolving other agencies, the Board would co-opt as needed representativesof (i) DirectionNiationale des Travaux Publics (DNTP); (ii) Direction de l'AlphabetisationFonctionnelle; (iii) Institut d'EconomieRurale (IER); (iv) Direction Nationale de la Sante (DNS); and (v) Service de l'Elevage et de la Sante Animale (SESA). The manager of "Office de Surveillanceet de Regulation des Prix" (OSRP) would be one of the three technical experts. Agreement was reached that (i) the Board would co-opt, as necessary, representativesof other governmentagencies; and (ii) the manager of OSRP would become a permanent Board member.

6.03 HO Management. The general manager, as now, would report to the Service de l agriculture of the Ministry of Production. He would be assisted by a deputy general manager, a technicalmanager and a chief accountant. The deputy general manager would be responsible for general and personnel administration and credit operations; the technicalmanager, assisted by a specialist in animal-poweredmechanisation, for all technical aspects of the program and the chief accountantfor all project and farmers' credit accounts (see Organi- zation Chart).

6.04 Field management. Field managementwould be effected through nine sectors, each headed by a sector chief assisted by sub-sector chiefs. The latter, in turn, would instruct and control the activitiesof extension agents. For administration,accounting and credit operations, sector and sub-sector chiefs would be assisted by "agents sociaux economiques",a type of bookkeeper with responsibilityfor marketing and credit transactions. - 22 -

6.05 Rural tracks improvement program. A special unit, the "Service des Travaux Routiers"will be establishedwithin OACV Hleadquartersto plan and supervise its track improvement activities. The unit will be headed by an experienced road technician (Inspecteurdes Travaux Routiers), seconded from the DNTP, who will assume broad responsibilitiesfor the organization,planning and supervisionof the activities, and for the efficient use of the road gangs and of the equipment. He will also be responsible for coordinationof the annual track improvementand maintenance program with the DNTP. The proposed program will include schedules for use of the two graders procured under the project, and for rental of DNTP equipment, such as bulldozers. Each of the four road gangs will be attachei to one sector of the OACV, and will operate under the administrativeautho-ity of the Chief of Sector who will supply them with funds, materials and fuel, and will control their expenditure. Each gang will be headed by a gang leader to be seconded from DNTP. It was agreed that a road inspector and four road gang leaders with qualificationsand experience satisfactoryto IDA would be seconded from DNTP to the project for the duration of the tracks program.

6.06 Functional literacy program. Annual functional literacy programs and associatedbudgets would be prepared by the Directorateof Functional Literacy in consultationwith the deputy general manager of OACV. It would be the responsibilityof the latter to arrange for the effective monitoring of the program, and to recommend such modificationsas may appear appropriate. The authorizationof expenditureswithin the agreed budget for the functional literacy program would rest with OACV. e.07 Research program. The details and budgets of annual research programs financed under the project would be prepared by the Directorateof agriculturalresearch of the Institut d'Economie Rurale in consultationwith <)ACV. The Technical Manager would be responsiblefor ensuring that the agricultural research program reflected project needs, and for helping to locate aZnd estabLish field triais. Financial control of research expenditureswithin the acreed budget would be the responsibility of the Directorate of AgriculturalPesearch.

'.(03 Improvement of Mledical Facilities. Annuai medical programs and budgets woutid he established by the firectorate of Medical Services and submitted for approval to OACV which jointly witlh the I)irectorate of medical services would control the execution nE the program. Financial control of medical program expenditureswithin the agreed budget, would rest with the Directorate of aedical services.

6.09 Improvement of VeterinaryServices. The annual veterinary programs and budgets of the project would bc establishedjointly by the Service de l'Elevage et de la Sante Animale (SFSA) and OACV. OACV's specialist in animal- pzoweredmechanisation would ensure that the program is satisfactorilycarried out. F'inancialcontrol of veterinary program expenditures,within the agreed budget, would be the responsibilityof SESA. - 23 -

B. Staffing and Training

6.10 Senior Staff. The positions of OA (to be OACV) General Manager, Deputy General M4anager and Chief Accountant are filled by experienced TMalians. Ail Sector Chiefs are also Malian. Nine senior positions in OA continue to be held by expatriates supplied by BDPA, these are: adviser to the Ceneral Manager, Technical Manager, specialist in animal-powered mechani- zation, administrator and five field advisers. In view of the critical importance of efficient management to the success of the project, it was agreed that during the disbursement period of the IDA credit the positions of OACV Ceneral Manager, Deputy General Manager, Teclhnical Manager and Chief Accountant, would be filled by persons with experience and qualifications satisfactory to IDA and under terns of reference and conditions of employment mutually acceptable to Cnvernment and IDA. Currently persons filling these positions and their terns of reference and conditions of employment are satisfactory to IDA.

6.11 Technical Assistance. BDPA provided technical assistance to OA for tlhe five years 1967/68 to 1972/73, and is continuing to do so under interim arrangements expiring in ilarch 1974. This interim period corresponds with the first year of the project (PY 1) reviewed in this report. BDPA performance lias been satisfactory, and thus it is proposed that BDPA be employed for the four years of the ID)A credit disbursement period (PY2 through PY5). Under the project the level of assistance from BDPA would increase from nine expatriates, six advisers and three executives, as at present in PY 1, to 12 in PY2, and thereafter decline to 10 in PY 3, 7 in PY 4 and finally to six in PY 5. SIPA expatriates would not be replaced, or their tenure extended, when their contracts expired, and project cost estimates are based on the assump- tioni that expatriates would not be retained beyond the IDA credit disbursement period. BDPA teclnical assistance would include visits by BDPA specialists to deal with specific problems. An informal understanding was reached that (i) Government would contract BDPA to supply technical assistance to OACV under terms of reference and in accordance with a staffing schedule acceptable to IDA; (ii) that the contract would permit a reduction in the number of expatriates if so requested by Governnent in agreement with IDA; and (iii) that Government would discuss and agree annually with IDA the number and deploynent of technical assistance staff supplied by BDPA.

6.12 Evaluation and Research. The consultants required to (i) evaluate the functional literacy program and (ii) to carryout a study on cereal producer prices and marketing arrangements, and the agricultural economist who would head the Evaluation Unit of OACV, would be recruited internationally under terms and conditions satisfactory to IDA. Technical assistance for the rcsearch component of the project would be supplied by GERDAT under terms and conditions of service satisfactory to IDA. Agreement was reached with Government to this effect. - 24 -

,.13 Junior Staff. ,Tostexisting junior positions in OA are now filled by adequately trained and experienced personnel. As a consequence bf the pro jects, however, an additionai 120 extension agents would be required. 'fost of these would be recruited frorm the "Centres d'Apprentissage ligricole" (CAU) 1/. Promotions from the ranks of extension agents and graduates from lthe "Institut Polytechnique Rural" (IPR) of Katibougou woul(d fill the eight additional positions of sub-sector chief that would be created under the project. Difficulties are not foreseen in recruiting the other junior support staff required.

!',. 1 4 Training. BDPA has always laid great emphasis on the in-service traiaiirç of Malian personnei, and a permanent program for all categories of staff .ias been established and works well. This in-service trai;aing system wouLd be continued and extended. Training programs for the "agents sociaux economiques" would pay particular attention to farm credit control, which woul(d also be given greater prominence in the training sessions for extension staff.

VII. YIELDS MID PRODUCTION, MARKETING,

FAUMERS' BENEFITS AND GOVFRNMENTREVENUES

A. Yields and Production

7.01 Groundnuts. The vield of groundnuts has increased substantially whcre OA recommendations have been followed. The average yield in 1972/73 was 767 kg/ha of undecorticated groundnuts 2/, somewhat lower than the peak of '14 kg/ha achieved during the previous season when the weather was better. These yields compare with a 500 lkg/ha average on farms using traditional cultivation methods and represent increases of 53% and 63% respectively. By the end of the project development period, it is estimated that further improvements will occur; in existing OA areas where an estimated 100,000 ha of groundnuts are now grown, yields will increase to an average 950 kg/ha (24, more than in 1972/73). A substantial increase is anticipated in new areas where yield is estinated to increase fromn 500 kg/ha to 835 kg/ha (a 67% increase); it is estimated that about 91,000 ha of groundnuts would be grown in tliese areas by the end of the project development period. If the foregoing tarc;ets are achieved the vield of all OACV farmers would average 895 kg/ha

1/ Thiere are 3CAA in Mali. The courses last 3 years and about 30 students graduate annually from each CAA.

_/ Undercorticated groundnuts are groundnuts in shell as harvested and after drying. Dccorticated groundnuts are 65 to 75% in weight of undecorticated groundnuts depending on variety. In Mali the average ratio is 68 to 70%. Decorticated groundnuts produce, after milling, about 40% of oil and 60% of cake. % - 25 - by PY 6 representing an average increase of 255 kg/ha or 40% over 1972/73. This estimate is conservative in view of neighboring countries' experience where yields of over 1,100 kg/ha are obtained under similar programs and of the results of locally conducted field trials where vields of 1,500 kg/ha are regularly obtained. As shown in Annex 3 table 4, project induced incremental grotndnut production is estimated to reach 65,000 tons annually at full development in PY 8.

7.02 Millet and sorghum. Yield and production estimates for millet and sorghum are in Annex 3 table 7. The average yield of millet and sorghum with the project is expected to increase from the current national average of 600 kg/ha 1/ to about 725 kg/ha (20% increase) by the development period end. At ful1 development in 1930/81 (PY 8) prodLction induced by the project is estinated to reach 38,600 tons annually. Yield improvement would stem from seeé dressing, the residual effects of fertilizers used on groundnuts and the benefits of better cultivations brought about by using ox-drawn equipment. Tlhe imnpactof these improvements on cereal yields lias been demonstrated by trials carried out by IRAT in Bambey (Senegal) and in IRAT field trials in the- iroject area and elsewhere in IJest Africa.

1B. Mfarketing and Prices

7. 03 Croundnut. OACV wouild have responsibility for the marketing of *,roundnuts produced in the project. Problems are not foreseen and produce collection and evacuation should be facilitated by the ongoing IDA, FAC and Government Financed road prograrms as well as by the project' s track improvement progran. As roads are improved in the project area it is anticipated tLat a greater part of road transport would be assumed by the private sector and OACV involvement in this field gradually reduced. An informal understanding was reached that OACV's involvement in road transport of marketed groundnuts would gradually be reduced when road improvement in the project area would permit transport by the private sector.

7.04 It is estimated that 65% of increimental project production would be marketed hy project farmers by PY8. (This proportion allows for the retention of scéd, ihome consumption and losses) and thus some 111,000 tons of undecorti- catcdl -roundnuts collected compared with an average of 60,000 tons in recent years. Ns a consequence of the project, Mali's share in world groundnut exports woulid increase from 2'% to about 3.5% by 1930/81. This should not result in anv significant imbalance in the worl(l groundnut trade, and an increase of this magnitude would bring Mali's share of world trade back to that it enjoyed until 1961. Prices used in project calculations are based on forecasts made by tlie Bank's Economic Analysis and Projections Department (BEAPD); Annex 14 contains further details of price projections, and gives a description of the prospects for groundnuts in the world's fats and oil trade.

1/ A wceighted average of 500 kg/ha for milLet and 650 kg/ha for sorghuin. - 26 -

7.05 The BEAPD predicts that world market prices for decorticated groundnuts will decline from their current price of CIF Europe US$393 per metric ton to TJS$235 in 1980 (1973 real prices). If this fall occurs, Mali groundnut exports would still make a significant contribution to Government revenues (see Annex 16). The "Office cie Surveillance et de Regulation des Prix" (OSRP) is designed to cushion the impact of fluctuationsin world prices; but the reserve accumulated to date, about MF 520 million, is far below the estimated 4.5 billion 1/ (US$9 million) required for adequate functioning of the OSRP. Assuming that the price decline expected by the Bank takes place and that the current producer price is maintained, an additional MF 4.8 billioi would accrue to OSRP over the 15-year project period.

7.06 Producer price for undecorticatedgroundnuts, fixed by Government, is currently 'F 30 per kg. This has provided sufficient incentive to farmers as the groundnutproducer price is more beneficial than prices paid for other crops and compares favorablywith prices paid for groundnuts in neighboring countries (Annex 1, Table 2 and Annex 14, Table 2). Return to groundnut producers would further increase with improved productivityand marketing. Should prices paid for other crops be increased, some shift from groundnuts would occur, however, where cither the alternative cash crop could be profit- ably grown, currently the only scrope for this is cotton in the west of the project area, or where a mnarketexists for increased food crop production.

Agreement was reached that priority would be given to accumulating and riaintainingthe Groundnut StabilizationFund at an adequate level, and that Governmentwould consult IDA annually on a producer price for the Coming season and submit a schedule of payments into or from OSRP for approval.

7.07 !illetand sorghum. Incrementaldemand for cereals by 1978/79 is estimated at between 200,000 and 300,000 tons, with millet and sorghum accounting for about 75%. Consequently there would be no problem in disposing of project induced production, about 39,000 tons annually. In calculating the project's economic benefits, cereal production has been valued alt ',;'API)estimated( world prices plus the costs of transportation to Mali. *;y 19Q30/81, the economie farm gate price of cereals is estimated at MF 50,700/ ton (Ur$ 101), see Annex 14 table 9.

7.0 Producer prices for cereals are fixed by Government, and were MT 20/k,; in 1972/73. This was about half the average price paid by private .inofficialdealers; at times cereals unofficially traded have fetched as UCl as 'T 90/kg. The high prices ruling in unofficial trade make it impossible for "Office tles Produits Agricoles du Mali" (OPAM) to exert its cereal narketing nonopoly and what purchases it makes are generally through coercive means. In effect, OPAM's role is counterproductive since, apart from its many admtinistrative deficiencies, through attempting to enforce iirealistically Low producer prices it restricts the volume of grain

1/ Based on average return to producers in the three preceding years. - 27 - available for sale, and causes a nationwide black market and artificially high price for cereals. To ensure the success of the important foodcrop component of the project, it was agreed that (i) sorghum and millet producer prices would be increased from MF 20 per kg to a minimum of MF 25 per kg effective from November 1974, and the increase would be publicized in May before the planting period; (ii) a study on millet and sorghum producer prices and marketing arrangements, to be completed by April 30, 1975, would be carried out by consultants and under terms of reference acceptable to IDA. This studly would provide the basis for further decisions on both producer prices and marketing arrangements which should be satisfactory to IDA.

In the farm budgets at Annex 15, a producer price for sorghum averaging MF 35/kg is used reflecting their unofficial trade value.

C. Farmers' Benefits

7.09 At full development, some 107,000 farming families, involving about one million people in ail, would participate in the project compared to 52,000 farming families and 490,000 people served by OA in 1972/73. Total incremental income accruing to producers from marketed groundnuts would appro- ximate ME 1.6 billion (US$3.2 million) annually at current producer prices, and the value of project induced millet and sorghum would be about MF 0.9 billion (US$1.8 million). Determina'ion of a "typical farm" of the project area is difficult. Nonetheless the niodels in Annex 15 are considered reason- ably representative of the situation of participating farmers in the project area. Two models are compared with the traditional "pre-project" farm. First, a farm using hand cultivation and a second one using oxen for cultivations. vor the former, it is assumed that the area under millet/sorghum would remain at 2 ha but that of groundnut would increase from 1.2 ha to 2 ha under the stimulus of favorable cash incomes from groundnut production and that productivity would improve steadily over a four year period. In the case of the faim using an ox-drawn multipurpose cultivator and seeder it is assumed that the area cropped would expand fromt 4 to 6 ha over a four-year period as a consequence of the farm family switching from hand to animal-powered cultivation and that 50% of the land would be used for cereals and the balance for groundnuts. The following table summarizes the information in Annex 15. - 28 -

Farm Income at Full Development

Without the Project With the Project Traditional Manual Ox-Powered Cultivation Cultivation Cultivation

Farm area 3.2 ha 4 ha 6 ha Total farm income /1 MF 56,500 117,000 177,400 Farm cash income /2 MF 8,250 65,700 126,200 Per capita income /3 MF 6,650 13,760 20,870 US$ 14 28 42 Other income per capita /4 US$ 8 10 15

Total per capita income US$ 22 38 57

/1 Net value of production from groundnut and cereals only in the case of ox-powered cultivation,after amortizationof equipment. /2 Total farm income less value of food consumed by family and taxes paid by 2 adults. /3 Fanily of 8.5, providing 3.5 adult labor equivalent. /4 Representedby production from other crops, kitchen garden, poultry, fruit and cattle.

7.10 Farn labor requirementswould increase as a consequence of the project despite the increase in animal drawn cultivationas labor savings in cultivationswould be more than offset by the extra labor needed in maintaining and harvesting the expansion in cropped area. It is anticipated that additional labor would be supplied by the farm family supplementedas necessary by available hired labor. The return per manday worked, would rise from about MF 253 under traditionalcultivation to MF 302 on hand cultivated, and 409 on ox- cultivated farms using OACV recommendations(see Annex 15).

D. Iract of Project on Government Revenues and Expenditures

7.11 Annex 16 contains estimates of consolidatedGovernment revenues and expenditures resulting from the project. The project would generate net cashi surpluses after debt servicing rising from MF 137 million (US$0.3 million) in Year 1 to MF 1.1 billion (US$2.3 million) by end of project period in 1987/88and would average MF 1 billion (US$2.0 million) thereafter. - 29 -

VIII. BENEFITS AND JUSTIFICATIONS

8.01 The principal benefits of the project would be the project induced increases in groundnutsand cereal production shown in Annex 3. With these valued at the economic prices shown in Annex 14, Tables 4 and 9 and savings resulting from track improvementreflected in marketing costs, the internal rate of return investmentin the project is estimated at 91% over a project life of 15 years, see Annex 17. This high return is partly attributableto the importanceof previous and ongoing investmentswhich are sunk costs to the project and the high degree of technical proficiencyof farmers resulting from previous extension efforts. Also instrumentalare the relativelyhigh projected groundnut and sorghum long-term internationalprices. Costs used in the calculationsare net of taxes but include all subsidies from which farmers benefit and expendituresincurred in the improvementof medical and veterinary services, although no separate benefits have been assumed from these expenditures. Costs include both the incrementalcosts of OA services at the current levels of expendituresas well as 2/3 of the current cost of OA services. The latter are treated as project costs since without the project OA costs probably could be reduced eventuallyby about 60 percent without a fall-off in production in OA areas. Incrementallabor requirements whether family or hired have been valued at MF 200/manday;this appears appropriateas labor is in relativelyshort supply in the project area during the cropping season. MF 200/mandaycorresponds to the estimated earnings of the "navetane" the traditionalhired labor and is about 60 percent of the legal minimum wage of MF 350/manday for casual labor in rural areas.

8.02 The sensitivity of the rate of return has been tested using a range of variations in benefits and cost from that employed in the standard calculations. The results are shown below.

Lenefits (percent)

- Croundnut 100 100 100 100 90 80 75 90 90 80 75 - 'Millet/sorghum 100 100 100 100 90 130 50 90 90 80 50

Costs (percent) 100 110 120 130 100 100 100 110 130 120 110

"atu of neturn 91 69 54 44 67 49 30 52 33 29 21

Fuels and fertilizers accouat for 7% of project expenditures ex- cluclingcontingencies. Assuming that the prices of these two commnodities are (loubled total costs would be increased by 6.4%.

3.03 The project would generate substantial foreign exchange earnings and savings the first through the export of grourndnuts,and tne second from the substitutioliof ,sillet/sorghuimproduction for imports. Net foreign ex- chan,e h)enefits fromr groundnut exports and savings oS1 cereal imports would anount to about MF 5.2 billion (US$10.4 million) from PY 6 onwards. Given Mlahils limfitedexport possibilities the foreign exchange characteristic of tlUeproject are of major significance. - 30 -

IX. AGREEMENTSREACIED AND RECOMMENDATIONS

9.01 Conditionsof Credit effectivenessare:

(a) a "recinrocal service agreement"satisfactory to IDA and defining the responsibilitiesand obligationsof Operation Arachide et Cultures Vivrieres (OACV) and Societe de Credit et d'Equipement Rural (SCAER)has been signed between both parties (para 4.14);

(b) a special bank account has been establishedby Government (para 5.07).

9.02 Agreementwas reached during negotiationson the followingprincipal points:

(a) IDA would be consulted on any change proposed by Governmentin policy regarding the prices of and subsidies on production inputs (para 4.16);

(b) the "Bareme Arachide" would be established annually in consultation with IDA (para 5.05);

(c) Government would replenish the special account for expenditures not eligible for financing out of the proceeds of the credit (para 5.07);

(d) during the disbursementperiod of the IDA credit the positions of OACV General Manager, Deputy General Manager, technical manager and chief accountant would be filled by persons with experience and qualifications satisfactory to IDA and under terms of reference and conditionsof employmentmutually acceptable to Governmentand IDA (para 6.10);

(e) the consultants to assist OACV; the specialists required for the agricultural research component; the economist to head the OACV evaluation unit; the consultantsrequired to evaluate the functional literacy program and for the millet and sorghum producer prices and marketing arrangements study and the firm to provide accountancy assistance to OACV would be acceptable to IDA and employed under terms and conditions satisfactory to the Association (paras 6.11 and 6.12);

(f) priority would be given to the accumulation of groundnut reserves in OSRP to a level which would be adequate to counteract price variations and that Government would consult with IDA annually on a producer price for the coming season and submit a schedule of payments into or from OSRP for approval (para 7.06); - 31 -

(g) no later than September 1974 Governmentwould fix producer prices for millet/sorghumat no less than MF 25 per kg; it would carry out a study on the producer prices and marketing arrangements of millet and sorghum and would agree with IDA no later than Mav 31, 1975 on changes in the producer prices and marketing arrangements based on the study's findings and agree on a time- table for their implementation(para 7.08).

9.03 Informal assurances were also obtained including inter alia:

(a) Banque de Developpement du Mali (BDM) would enable Societe de Credit Agricole et d'EquipementRural (SCAER) to finance farm inputs and equipment required by the project under terms and conditions satisfactory to IDA and would consult with IDA to that effect (para 4.15);

(b) Government would contract Bureau pour le Developpementde la Production Agricole (BDPA) to supply technicalassistance to OACV (para 6.11).

9.04 The proposed project constitutesa suitable basis for an IDA credit of US$8 million equivalent under the usual IDA terms. The borrower would be the Government of Mali.

ANNEX1 Table 1

MALI

INTEGRATEDRURAL DEELOPMENT PROJECT

Agriculture in Mali

Production and Marketing of Main Crops (1967 to 1972)

(lî'O0 ton)

1967 1968 1969 1970 1971 197221

Millet/SorghumT

Production 830 556 603 600 750 500

Marketed through official channel 60 8 26 10 30 5 Marketed on free market 55 46 68 80 60 16

Total marketed 115 54 84 90 90 21

Paddy

Production 172 134 161 148 198 110

Marketed through officia} channel 2& 18 29 40 52 30 Marketed on free market 52 38 h1 30 30 17

Total marketed 80 56 70 70 82 47

Seed Cotton

Production 39 50 51 60 74 70 Marketed 33 hi 42 53 68 66

Undecorticated Groundnuts

Production 81 99 133 156 152 150 Marketed 30 28 56 74 60 50 Source: Ministry of Production

1] Preliminary

/ Estimates

September 10, 1973 MALI

INTE1RATEDRURAL DEV LOPM1T PROJECT Agriculture in Mali Official Producer Prices for Principal Commodities (Value: current lD?/kg; index 196b - 100)

1964 1965 1966 1967 1968 1969 1970 1971 1972

Millet/Sorghum: V il il 15 16 18 18 18 18 20 I 100 100 136 145 163 163 163 163 182

'White Paddy V 12.5 12.5 16 18 25 25 25 25 25 I 100 100 128 144 200 200 200 200 200

Groundnuts V 13 13 16 24 3h 30 30 30 30 (unshelled) I 100 100 123 184 230 230 230 230 230

Cotton V 34 34 34 40 4h 45 50 50 50 (Grade 1) I 100 100 100 117 117 117 132 147 147

Source: Ministry of Produaction

September 10, 1973 il ANNEX 1 Table 3

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Agriculture in Mali

Agriculture Sector Contribution to Exports

(MF billion) 1°68 1-69 ly70 19,71 1972

Cotton (lint and seed) 3.3 4.6 5.2 6.4 7.9

Groundnuts and Groundnut Products 1.5 i1 3.0 4.8 4.o

Live animals 2.0 4.0 4.9 4.8 4.7

Fish (dried and smoked) 1.3 1.6 1.4 1.3 0.9

Others .8 1.7 3.7 4.2 5.2

rotal recorded exports 8.9 13.3 18.2 21.5 22.7

Groundnuts and Groundnut Products as a % of total exports 16.8 10.5 16.5 22.3 17.6

Cotton as a % of total exports 37.0 34.5 28.5 29.7 34.8

j Preliminary

W Includes in main: karite products, arabic gum, kola nuts.

Note: Uirecorded exports, mainly livestock, fish and food grains,have been estimated as follows: (MF billion) 9.7 8.7 8.4 7.5 8.0

Source: Bank's Economic Report. Banque Centrale du Mali, Rapport dfactivité 1972.

September 10, 1973 A3NEX 1 Table 4

MALI

INTEGRATEDRURAL DEVELOPIENT PROJECT

Agriculture in Mali

Volume of Grain Iniports (1969 to 1973) ('000 tons)

1969 1970 1971 1972 1973 /

Millet/Sorghum 31 1 15 32 125

Rice Voiume 16 - 21 31 45

Total 47 1 36 63 170

Total Value (MF billion) 3.4 0.6 1.9 3.8 13

As a % of total food products imports 41% 7.6% 18% 30% 57

As a % of total domestic cereal production 5 - 3 9 27

j Estimated.

NOTE: Most Millet/Sorghumis supplied through assistance progranis(FAC,US-AID, PAM, EEC).

SOURCE: Ministry of Production,Central Bank annual reports.

December 17, 1973 AlNNEX1

MALI

I:NTEGRATEDRURAL D)EVKLOP1P1EM¶T PtOJiCT Agricul ture iri islali

(roundnut ?roductiori and llarketing 1 9253-73 (i.indecorLicated)

Total Production Marketed

Share ot Year Total AOperationacfl Quant,Lt-y 1953 102.500 8.63.9J 19514 90.000 55.000 1955 117.500 8d.oou

1 95k 120.000 85.500

1957 1 24.000 83.400

1958 138.000 97.000

1959 125.000 85.800

1960 90.000 50.1-où

1961 125.000 135.700

1962 -108.000 66.900

1963 117.500 73.600

19614 117.000 72.100 1965 9C.000 144.800

1966 75.000 27.900

1967 87.500 3o.f0l 15.of-

1968 81.000 30.000 -3 .5(00o 35

1969 98.500 28.000 114.5oo 52

1970 132.500 56.600 30.100 o

1971 156.000 714.000 e. 000 1972 152.000 59.00 h.oco 7o 1973 150.000 50000 l(t'JÛ0 20

ANNEX 2 Page i

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

OPERATION ARACHIDE

Articles of Decree No. 116-PG-RMof September 16, 1972 establishingOperation Groundnut

Article 1. There is hereby establisheda Rural DevelopmentOperation entitled Operation Groundnut and intended to promote the cultivation of groundnutsin particular and agriculturalproduction in general in the area to which it applies. The operation shall be under the supervision of the Minister for Rural Development.

Article 2% The objectivesof the Operation,in the area concerned,shall be to:

- take all necessary steps for the developmentof groundnut cultivationand agriculturalproduction in general;

- organize marketing and farm credit;

- promote and encourage the farm communitiesby working with the Cooperation (extension)services to establish professional structuresenabling farmers eventually to control the collec- tive productionand marketing facilities;

- train the Operation'ssupervisory staff and farm workers by means of refresher courses, seminars, various specialised training courses, and basic literacy classes;

- propose and perform, with prior approval from the Supervisory A4inister,all action relating to the various aspects of groundnut developmentin the area.

Article 3. Operation Groundnut is subject to the provisions of Decree No. 33/PG-RM of March 25, 1972 referred to above.

ADMINISTRATION

Article 4. Operation Groundnut shall have a Board of Directorswith the following membership: ANNEX 2 Page 2

The Supervisory Minister or his representative

The Minister of Finance and Commerce or his representative

The Minister of Information or his representative

The Managing Director of the Mali DevelopmentBank or his representative

The Minister of Transport or his representative

lTheGovernors of the regions concerned,or their representatives

The Director of Agriculture

The Director of Rural Engineering

The Director General of Societe de Credit Agricole et d' Equipement Rural (SCAER) or his representative

The Director General of Societe d'Exploitationdes Produits Oleagineux du Mali (SEPOM) or his representative

The Director General of Cooperation

Three experts appointed by the SupervisoryMinister

Three representativesof the farmers

One representativeof the workers

The Director of the Operation shall attend meetings of the Board with the right to speak.

Article 5. The Board of Directorsshall:

- Take decisions regarding the programs and budget of the Operation.

- Examine the technical and financial reports on its activities.

- Authorize changes in the program.

- Rent or lease, without commitmentof purchase, all moveables and real estate.

- Take decisions on any financial,technical or administrative matters affecting the Operation.

The Council shall meet when convoked by its Chairman, at least twice yearly. ANNEX 2 Page 3

The decisions of the Board of Directors shall be taken by simple majority. In the case of a tie, the chairman shall cast the deciding vote.

The Board's proceedingsshall be recorded in Minutes entered in a special book and signed by the secretary of the meeting.

Article 6. The decisions of the Board of Directors shall not be enforceable until approved by the Supervisory Minister,within a maximum of 15 days if he did not chair the meeting.

MANAGEMENT

Article 7. Operation Groundnut shall be headed by a Director appointed by a Decree adopted in Council of Ministers at the proposal of the Minister for Rural Development. The Director shall be under the authority of the Director General of Agriculture.

Article 8. The Director of the Operation shall each year prepare a program of activities in consultationwith the Departmentsand Organizationscon- cerned. This program shall relate to:

(a) Production and marketing activities in the Operation's areas.

(b) Extension of all or part of the Operation'sactivities to new areas.

(c) The possible extension of the scope of the Operation to other aspects of groundnut production, in accordancewith its objectives.

(d) Preparationof the annual operating budget.

Article 9. Each year at the end of the season the Director shall submit a report on the performance of the annual program. He shall also prepare a financial balance sheet. These documents shall be forwarded to the Public Auditor for examinationand submitted to the Board of Directors for approval.

Article 10. Operation Groundnut is established for an unlimited duration. In the event that it be dissolved, return of the property shall be settled by the Board of Directors after consultationwith the Government.

Article 11. The Ministers of Finance and of Rural Developmentare responsible, each in 1hisown field, for implementationof this Decree, which shall be recorded, published and communicatedwherever necessary.

Operation -4rac&ii4ae

Area - eroduction, Yields, ,.arketLincig

1 967 1968 1 969 1 970 1971 1972/

Area under groundnuts(ha) hS65046,h0 71,630 102,63 92,360 99600

Production(tons) 23,Coe"u 24,30U 54,0UU0 6c3,"0 75,20W 76,370

Yi'eld', kg/hna 313 7L4 663 8 767i i~Ia-rketed Production (tons) 1 u,"OtJ 14.,u0 3d,100U 4b,0Uu 44~,uuu- hu , uuu

Source: MiLnistèrede la e9roduction.,Operation Arachide. lA1972being aniexceptionally bad year.,figures quoted for this year are partlyestimrated on the basis of past trend.

September26, 1973 MALI INTEGRATEDRURAL DEVLOPMD4T PRDJECT

Operation Arachide

1967 1968 1969 1970 1971 1972

Use of Fungicides/Insecticides

Groumdnut area (ha) 6,,000 10,000 i ,000 19,000 22,000 32,000

% of total area 14 20 15 18 24 32

- on sorghun/milletarea (ha) 2,000 10,000 13,000 11,000 20,000 23,000

% of total area - - - - - 20.u

Use of Fertilizers (groundnuts)

Area (ha) 2,000 5,000 ' 6,0o0 19,000 23,000 36,000

% of total area 4 10 8 19 25 36

Distribution of Improved Seeds (tons) 133 812 1,042 1,540 1,501 1,580 Ox-Draim ImplementsDistributed (numier of units)

Multicultivators -9 ô46 7u9

Seeders - _ _ 213 544

Litters 3 19

Carts - 132 157 395 60`19

Source: Ministère de la Production - Operation Arachide

SepteIrtber 26, 1973 MALI

INTEGRATEDRURAL DEVELOIkMT PROJECT

Operation Arachide Financig

1967 1968 1969 1970 1971 1972 Total

FAC

Capital inrvestments b2.2 51.9 110.7 15.7 4o.3 15.d 316.6 Personnel costs 195.5 163.1 223.0 212.7 230.5 188.5 1,213.3 Operating costs 75.3 60.0 89.6 75.2 75.5 36.8 412.4

Subtotal 353.v 27b.u 4z3.3 3u3.6 346.3 z41 .1 1j942-3 FED

Capital investments 3.1 z1.3 ô.4 1.3 3z.;e 51.7 118.0 Personnel costs 45.2 - - - 45.2 Subtotal 48.3 21.3 8.4 1.3 32.2 51.7 163.2 Governmenti/ 163.0 163.0 163.0 163.0 223.0 216.0 1,091.0

Farmers' Contribution 13.0 37.0 57.0 110.0 160.0 203.0 580.0

TOTAL 577.3 496.3 651,7 577.9 761.5 711 .d 3,776.5

j,/ Very tentative estimate quoted by Operation Arachide. No reliable accounts exist to support these figures. i/ Farmers' contribution: f ai.a inputs bought for cash or on credit - fertilizers, fungicides, seeds, ox-drawn equipment. September 26, 173

H I't

ANNEX3 Page .1

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

CROPPINGPATTERNS, INPUTS, YIELDS AND PRODUCTION

A. Cropping Pattern and Crop Rotation

1. The main cash crops grown in the project area would continue to be groundnuts,millet and sorghum. Some cotton and maize are grown in the South Western part of the project area where yearly rainfall exceeds 900 mm; and rice is grown in areas along the River Niger. Data on labor requirements and cultivationschedule are given in Tables 1 and 2. Informationon farm sizes and cropping patterns is scant. Annex 15 provides some informationon these points.

2. Cropping pattern and crop rotatioa varies according to the different ecologicalzones of the project area; and wbuld tend to change on participants' farms as the farmers move through the various technical stages of development. In general, however, the cropping pattern employed would be designed to achieve the following:

(i) self sufficiency in food crops for the farm family;

(ii) eliminationof labor bottlenecks at times of land preparation,weeding, and harvesting;

(iii) permit cereals following groundnuts in the rotation to benefit from the residual effect of fertilizerapplied to the groundnuts.

3. A typical rotation for a farm using fertilizerwould thus be: Year 1 (Y1) groundnuts;Y2, millet/sorghum;Y3, groundnuts;Y4 millet/sorghum; Y5 and 6, bare fallow. This rotation is almost universal in the project area.

B. Technical Recommendationsto be made under the Project

4. The technical project recommendationsare the result of continuing research and experimentationand field results in Mali and elsewhere in Western Africa. Recommendedtiming of critical operationsare shown in Table 1 and the estimated impact of recommended techniqueson yield is at section C.1. Principal recommendationsare as follows: ANNEX 3 Page 2

Groundnuts

If correctly implemented.therecommended improvements would increase the basic yield at least by a factor of 2.4. Key elements are:

(a) Early sowing. Duration of rainfall is the most important constraint, and early sawing is the only means of ensuring that the complete grotndnut growing cycle falls within the rainy season. The optimal period for sowing is from end of May to the end of the first two weeks of June; within this range optimum dates have been determined and publicized for each OA sector. Sowing at the correct time increases the basic yield of 500 kg/ha by a minimum of 20% or 100 kg/ha. After the recommendeddeadline for planting, every day of delay re- duces the potential yield by an estimated 1%.

(b) Spacing. One of the causes of the low yield from groundnutetradi- tionally cultivatedis wide spacing, usually about 40,000 plants/ha, against optimums of 90,000 to 110,000 plants/ha for the heavily branched type 28-206 groundnuts;and 150,000 to 170,000 plants/ha for the less heavily branched type 47-10 varieties. These densities representseed rates of 100 and 150 kg of seed per hectare respectively, compared with about 40 kg dndertraditional cultivation. Dense sowing, which is also the beSt method for combatting the rosette virus disease, improves the basic yield by a minimum of 40% or 200 kg/ha.

(c) Improved varieties. Two varieties suited to the ecological conditions of the groundnut zone in Mali have been selected, and are distributedto growers:

(i) for the southern area with more than 700 mm of rain per year, the Virginia type, variety 28-206, with a long 120-day growing cycle. This variety is suitable for most of the groundnut zone (nearly 70% of the proJect atea);

(ii) for the northern area with less than 700 mm of rain per year, the Spanish-typevariety 47-10, with a short 90-day cycle; 47-10 is hardier and more drought resistant than 28-206.

Farmers can retain their own seed of the above varieties but seeds of the 28-206 variety need replacing every four years and those of the 47-10 variety possibly every three years. By the end of the project developmentperiod, about 70% of farmers in the project area are expected to be using seed of improved varieties. The use of improved seeds will increase the basic yield by a minimum of 20% or 100 kg/ha. ANNEX - Page 3

(d) Seed dressing. After sowing, untreatedseeds are subject to attack ,)yvarious pests; often farmershave to sow a second time, or as a minimum to fill in gaps. In order to ensure a full stand, it is recommendedthat seed is dressed with Thioral at a rate of 1OOg/kg of undecorticatedseed nuts. The active ingredientsof Thioral are an equal mixture of an insecticide (heptachlor)and a fungicide (Thirame). Thioral is very persistent and provides good protection even if sowing is followed by a period of drought and germination delayed. Farmers will also be recommendedto use a benzene hexa- chloride insecticide,at a rate of 50 g/100 kg of seed to protect their seed stocks. The use of fungicidewill increase the basic yield by a minimum of 10% or 50 kg/ha.

(e) Mineral fertilizer. Heretofore,the groundnutoperation had recommended a complex and expensiveNPK fertilizerat a do3age of 110 kg/ha. More recent researchhas revealed that single superphosphate (21% P205) applied at a rate of 65 kg/ha has had the same beneficial impact on yield at a cost of some 30% lower. 1/ This fertilizer,distributed to farmers at present,would continue to be used under the project and will contribute to increase the basic yield by a minimum of 50% or 250 kg/ha. Researchwill continue in an endeavour to seek more economical fertilizerformulas adapted to the various soils and crop rotationsof the project area.

(f) Ox-drawn implements. The use of ox-drawn implements is spreading in Mali, and demand for ox-drawn implements increasingrapidly. Distributionof implements,on credit, under the project will, however, be subject to closer supervisionthan in the past. In particularas a prerequisiteto qualifying for implements farmers must meet the followingcriteria: (i) have at least 1.5 ha cleared and stumped; (ii) possess 2 young oxen suitable for work; (iii) be able to contributea down payment of 1/3 of the cost of implements. The basic implement unit would comprise a seed-drill,which will ensure proper spacing; a multipurposetoolbar with a plowshare (for cereals);hoeing and cultivatingtynes. These implementspermit timely land preparationand thus early sowing; but their use has not shown any effect on groundnutyield. A groundnut lifter and a 1,000 kg capacity cart frame with tires would be optional items availableto farmers on credit. The quantity and estimated cost of implementsto be supplied under the project are shown in Annex 11.

1/ Nitrogen, the principal requirementof cereals, is provided by the ground- niutswhich respond particularlyto phosphate application. ANNEX 3 Page 4

Cereals

6. It is the purpose of the project to achieve a closer association between the production of groundnuts and cereals. The mechanism in the absence of high yielding varieties of cereals accepted for consumptionin Mali, is based on the cereals benefitting from better cultivation,seed dressing, and the residual effects of fertilizer used on groundnuts:

(a) Residual fertilizereffect. A rotation scheme is recommendedin which millet and sorghum follow,groundnuts, to permit the former to benefit from the residual effects of mineral fertilizerapplied to groundnuts. The resulting effect on yield has been "stimated at 150 kg/ha or an increase of about 25% on the basic yield. Using this rotation, the nutrient reserves of the soil are better utilized by the succession of two plants with different requirements. In the absence of acceptable varieties responsive to fertilizers (at least at present cereal prices) it is not proposed to promote the direct applicationof fertilizersto millet and sorghum under the project. Indeed the only new input employed would be seed dressing.

(b) Seed dressing. Farmerswould be recommendedto use Green Thioral whlch is a compound of insecticide,fungicide and bird repellent (anthaquenone). It ensures more regular germination, especially in dry periods and an average yield increase estimated at 90 kg/ha.

(c) Deeper plowing. Made possible by ox-drawn implements,deeper plowing has been shown to have a positive effect on yields of millet and sorghum. The effect is very apparent, has been demonstratedat Bambey in Senegal and confirmed by observations iu the 0À operational area. Yield increase from deeper cultivation has been estimated as being as much as 175 kg/ha.

(d) Other recommendations. Other rec.emmendations made to farmers would be concerned with the maintenance of soil structure and fertility,and combattingsoil erosion as land clearing increases and more intelisivecultivation develops. Along these lines, a minimum 2 year fallow would be recommended,and OACV staff would prohibit clearing and uprooting of cover on slopes of more than 1%. Contour plowing would be recommended.

C. Yields and Production

Y ields

7. The table below summarizes the anticipatedeffect on yields of groundnutsand millet/sorghumof the techniques and inputs recommendedunder the project. ANNEX 3 Page 5

Estimatesof Impact of RecommendedTechniques on Yield

Croundnuts Millet/Sorghum Z. kg/ha Z kg/ha

Basic Yield 100 500 100 600

Early Sowing 20 100 - - Correct Density 40 200 - - Use of Fungicides 10 50 15 90 Improved Seeds 20 100 - - Fertilizer Application i and Residual Effect 50 250 25 150 Deep Plowing Implements - - 30 175

Total 240 1,200 170 1,015

Production

8. Calculationsof project production are based on annual estimates of the distributionof project farmers by categories using recommeitdedprac- tices and inputs. This distributionis shown in Tables 4 and 8. F'rojectpro- duction estimates are given in Tables 5 and 9.

ANNEX3 Table 1

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Cultivation Schedule

May June July Aug. Sep. Oct. Nov.

1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3

Groundnuts: 28-206 variety

Land Preparation

Sowing

1st weeding and fertilizer

2nd weeding

3rd weeding (optional)

Harvesting

Groundnuts: 47-10 variety

Land Preparation

Sowing

lst weeding and fertilizer

2nd weeding

Harvesting

Sorghum/Millet

Land Preparation

Sowing

1st weeding

2nd weeding - thinning & earthing

Harvesting MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Labor Requirements for Groundnut and Cereal Production (per hectare) Time Required

Procedure Manual Cultivation With Ox-Drawn Implements Man Days Man Days Animal Days

Groundnuts

Land preparation 12.50 13.00 3.75 Seed shelling 8.50 8.50 - Seed dressing .25 .25 - Sowing 10.00 2.00 1.00 Fertilizer application and Ist weeding 3.00 1.00 - 2nd weeding 25.00 10.50 3.00 3rd weeding 18.75 6.00 3.00 Harvesting/Threshin, 26.25 22.50 2.50 Internal transport - 12.00 5.75 2.00

Total 116.25 69.50 15.25

Sorghum/Millet -2

Land preparation 12.05-8.50 10.00-6.50 4.00-3.25 Sowing 2.05 2.00 1.00 lst weeding 12.00 6.00 3.00 Thinning 3.00 3.00 _ Earthing 6.25 2.00 1.00 2nd weeding 12.00 6.00 3.00 Harvesting/Threshing 19.00-25.75 24.00-27.25 - Internal transport 10.00- 9.00 5.75 2.00

Total 77.25-79.00 58.75-58.50 13.25-14.00

1/ Based on a 1,200 kg/ha yield both under manual and ox-powered cultivation. Ox-drawn implements include: multicultivator, seeder, groundnut lifter and cart.

2/ In the cases where two figures are quoted, the first refers to sorghum and the second (D to millet. Labor requirements for harvesting operations and transport are based on a 900 kg/ha yield for sorghum and a 725 kg/ha yield for millet.

Source: IRAT - Operation Arachide

September 21, 1973 MALI

INTEGRATEDRURAL DEVELOPMENT PRUJECT

Area of Groundnuts Grown under QACV Supervision by Sectors

and Years in Project Area Pre (hectare) PY7 Sectors Prolect Pyl PY2 PY3 Onwards_P6

Koulikoro - Banamba 16,900 18,300 20,550 24,300 27,000 28,200 29,000 29,400

Kolokami 19,700 21,300 24,150 26,750 28,700 29,700 30,400 30,800

Kita 37,500 38,200 39,000 39,750 40.,600 41h,300 42,200 42,900

Kayes - Kenieba -Bafoulabe25,500 26,800 28,400 36,000 39,100 40,h400 41,200 42,100

San Segou - 26,000 30,000 37,000 42,000 44,150 45,85o

Total 99,600 104,600 138,100 156,800 172,400 181,600 186,950 191,050

The above table could be read to imply that as a result of the project the area of groundnuts grown under improved methods would increase from 99,600 to 191,050 ha. Tbis is not 80, since vithout the project additional,but fewer,farmers would adopt the improved techniques; thus in calculating the economic rate of return, see Annex 16, an adjustment has been made to take this into account.

b 9 October 5, 1973 W HALl

INTEGRATED RURAL DEVELOPtEST PROJECT

Area under Oroundnuts: Diffusion of Modern Techniques in Project Area

Pre Project pyl pyil/ PY4 Prc M PY7 Onwards

ha 7. ha 7 ha % ha % ha 2 ha 2 ha % ha 2

Total area cropped 99,600 100 104,600 100 138,100 100 156,800 100 172,400 100 181,600 100 186,950 100 191,050 100

Timely sowing 49.900 50 57,500 55 62,100 45 78ï400 50 94,800 55 108,900 60 112,100 60 114,600 60

Correct density 30,100 30 36,600 35 41,400 30 54,800 35 77,500 45 90,800 50 93,400 50 95,500 50

Using fungicides 32,350 32 43,900 42 55,200 40 70,500 45 86,200 50 99,800 55 102,800 55 105,000 55

Using improvedpseeds 49,000 49 60,600 58 75,900 55 94,000 60 120,600 70 127,100 70 130,800 70 133.700 70

Applying fertilizers 36,150 36 49,100 47 55,200 40 79,500 45 94,800 55 99,800 55 102,800 55 105,000 55

Ox-powered cultivation 2,400 2 4,350 4 7,450 5 13,200 8 20,950 12 30,400 17 35,000 19 46,300 24

1/ Decreased in percentages due to the addition of 26,000 ha of the San Segou sectors where no improved techniques are used.

See footnote to Table 3.

October 8, 1973

zIi MALI

INTEGEATED RURAL DEVELOPMENTPROJECI

Estir ted Production .ad Yi.ld of Croundeut in Prriect Area

(are. ie he; production in m tee., yield ie kg/ho)

Production with-rt improv.eent ------n_t------_- otp Due to Mode- Tec niq ------Total Production -nd Average Yield under Proiect

Tinely Soving Correct Density Use of Fongicides Use of Improved Seeds Appliration of Pertilîcems

Total are. Years cropped Production i. Are. Production Area Prodction 3 Ares Production _/ Aret Production _ Are. Production Total Production Average Yield

Preproject 99,600 49,800 49,900 4,990 30,100 6,020 32,350 1,620 49,000 4,900 36,150 9,040 76,370 767

pY I 104,600 52,300 57,500 5,750 36,600 7,320 43,900 2,195 60,600 6,060 49,100 12,275 85,900 821

py2 138,100 69,050 62,100 6,210 41,400 8,280 55,200 2,760 75,900 7,590 55,200 13,800 107,690 780

PS 3 156,800 78,400 78,400 7,840 54,800 10,960 70,500 3,525 94,000 9,400 70,500 17,625 127,750 815

py4 172,400 86,200 94,800 9,480 77,500 15,500 86,200 4,310 120,600 12,060 94,800 23,700 151,250 877

0Y57 181,600 90,800 108,900 10,890 90,800 18,160 99,800 4,990 127,100 12,710 99,800 24,950 162,500 895

py6 186,950 93,475 112,200 11,210 93,400 18,680 102,800 5,140 130,800 13,080 102,800 25,700 167,285 895

PY7 191,050 95,525 114,600 11,460 95,500 19,100 105,000 5,250 133,700 13,370 105,000 26,250 170,955 895

1/ Basic yield 500 kg/ha .edecortic.ted 2/ Additi .al yieldc 100 kg/ha 3/ 200 kg/h. 4/ " 50 kg/ho 3/ O 100 kg/h. 6/ "a , 250 kg/ha

Se. footnote to Table 3

October 8, 1973 MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Incremental Groundnut Production Induced Directly by the Project

Pre PY7 Area (ha) Proiect PY1 PY2 PY3 PY4 PY5 PY6 Onwards

- without the project 1 99,600 103,700 135,200 2/ 148,700 21 156,400 159,000 159,000 159,000 - with the project - 104,600 138,100 156,800 172,400 181,600 186,950 191,050

Increment - 900 2,900 8,100 16,000 22,600 27,950 32,050

Average Yield (kg/ha undecorticated) rounded

- without the project 767 756 697 6697 3 670 667 667 667 - with the project - 821 780 815 877 895 895 895

Increment - 65 83 118 207 228 228 228

Production rounded

- without the project 76,370 78,430 94,170 100,920 104,770 106,070 106,070 106,070 - with the project - 85,900 107,690 127,750 151,250 162,500 167,285 170,955

Increment - 7,470 13,520 26,830 46,480 56,430 61,215 64,885

1/ Without project situation assumes that some additional farmers will grow groundnuts under improved methods, and some existing farmers now using improved methods would further increase their hectarage and productivity. 2/ Sharp increase in PY2 and PY3 reflects inclusion of Segou Region in project area in PY2 (26,000 ha) and Kenieba district in PY3 (6,650 ha).

3/ Average yield declines due to inclusion of Segou Region and Kenieba district with their low traditional and non-improved yields. |

October 8, 1973 MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Area of Sorghum and Millet grown under OACVSupervision

by Sectors and Years in Project Area

(ha) PY8 Pre PY4 PY5 py6 PY7 Onwards Sectors Project pyl PY2 PY3

25,250 27,850 28,230 28,670 28,870 Koulikoro - Banamba 19,050 19,650 20,250 21,700 30,900 32,900 33,3h0 33,780 33,980 Kolokani 26,000 26,700 27,450 29,150 45,850 46,390 >47,050 >47,400 Kita 40,5°00 41,300 42,800 43,700 45,)450 35,450 36,800 36,840 37,400 37,670 Kayes - Kenieba - 28,450 29,100 29,550 33,850 Bafoulabe 118,150 120,250 1 21.,670 123,000 123,850 San Segou - - 114,250 116,000 266,470 269,900 271 ,770 Total 114,000 116,750 234,300 244,400 255,200 263,650

of the project the area of The above table could be read to imply that as a result increase from 114,000 to 271 ,770 ha. millet and sorghum grown under improved methods would but fewer farzners would adopt the This is not so since-without the project additional rate of return, see Annex 16, an improved techniques; thus in calculating the economic adjustment has been made to take this into account.

October 11, 1973 J NALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Area under Soro_hur and Millet: Diffusion of Modern Techniques in Pro,ject Area

Pre PYH Project F?Y1 PY2 1 PY3 PYL PY; PY6 PY1 Onwards Total % Total % Total % Total % Total % Total % Total 5 Total % Total %

Area cropped 114,000 100 116,750 100 234,300 100 24U,900 100 255,200 100 263,650 100 266,470 100 269,900 100 271,770 100

Usirg fungicides 22,950 20 36,150 31 67,100 29 87,o50 36 109,600 43 130,800 50 133,200 50 135,000 50 135,800 50

Fertilizer Residual effect 22,500 20 27,100 23 40,000 17 44,500 18 54,500 21 69,300 26 85,200 32 86,400 35 87,000 32

Deep ploughing 2,800 2 2,950 3 5,200 2 11,900 5 20,350 8 28,000 11 37,050 14 41,750 15 47,950 18

1/ Decreases in percentages due to the addition of 1,114 ha of the San Segou sectors where no improved techniques are used. See footnote to Table 7.

October 9, 1973 t , (D1 MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

Estimated Production and Yield of Sorghum and Millet in Project Area

(area in ha, production in m tons, yield in kg/ha)

Production without Improvement ------Incremental Output Due to Modern Techniques------Total Production/Average Yield under Project Use of Fungicides Fertilizer Residual Effect Deep Plowing

Total Incrementa 3 Incrementa , IncrementO 3 Total Aver. Years Area Production 1/ Area Output Area Output Area Output - Production Yield

Preproject 114,000 68,400 22,950 2,065 22,500 3,375 2,800 490 74,330 652

Pi 1 116,750 70,050 36,150 3,255 27,100 4,065 2,950 515 77,885 667

PY 2 234,300 140,580 67,100 6,040 40,000 6,000 5,200 910 153,530 655

PY3 244,900 146,940 87,050 7,835 44,500 6,675 11,900 2,085 163,535 668

PY4 255,200 153,120 109,600 9,865 54,500 8,175 20,350 3,560 174,720 685

py 5 263,650 158,190 130,800 11,770 69,300 10,395 28,000 4,900 185,255 703

PY6 266,470 159,880 133,200 11,990 85,200 12,780 37,050 6,485 191,135 717

py7 269,900 161,940 135,000 12,150 86,400 12,960 41,750 7,305 194,355 720

PY 8 onwards 271,770 163,060 135,800 12,220 87,000 13,050 47,450 8,305 196,635 724

1/ Average yield: 600 kg/ha. 2/ Average incremental yield: 90 kg/ha. 3/ Average incremental yield: 150 kg/ha. 4/ Average incremental yield: 175 kg/ha. See footnote to Table 7.

October 11, 1973 MALI

INTEGRATEDRURAL DEVELOPMe1NI IEOJECT

Incremental Sorghum and Millet Production Induced Directly by the Project

Area(ha) P~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Y8

Area (ha) tPre PY1 PY2 PY3 MYP PY5 PY6 PY7 onwards

- Without the Proiectl/ .11h1000 116,750 233,930 2/ 242,320 2/ With 2h7,950 253,450 253,450 253,450 253,450 the Project - 116,750 234,300 2t44,9o0 255,200 263,650 266,470 269,900 271,770

Increment - - 370 2,580 7,250 10,200 13,020 16,450 18,320

Yield (Kg/ha threshed grains)

- Without the Project 652 652 626 2/ 624-/ 624 623 623 623 624 - With the Project - 667 655 668 685 703 717 720 724

Increment - 15 29 44 61 80 94 97 100

Production (Tons threshed grains)

- Without the Project 74,330 75,980 146,510 151,320 154,700 158,000 158,000 158,000 158,000 - With the Project - 77,885 153,530 163,535 174,720 185,255 191,135 194,355 196,635

Increment - 1,905 7,020 12,215 20,020 27,255 33,135 36,355 38,635

1/ Without project situation assumes that some additional farmers will grow groundnuts under imuroved methods and some existing farmers now using improved methods would further increase their hectarage and productivity. 2/ Sharp increase in PY2 and PY3 reflects inclusionof Segou Region in project area in PY2 (114,250 ha) and Keniebo Llistrictin PY3 (3,700 ha). 3/ Average yield declines due to inclusion of Segou Region and Kenieba district with their low traditional and non-improved yields.

October 9, 1973

ol ANNEX 4 Page 1

MALI

LINTERGRATEDRURAL DEVELOPMENTPROJECT

IMPROVEMENTOF RURAL TRACKS -

A. General

1. OA, until now has relied for its extension and marketing activities on deterioratedsecondary roads, and natural tracks created by the recurrent passage of vehicles travelling cross-countrythrough open bush and savannah.

2. Transportationcosts on the roads and natural tracks are very high; OA has been able to support these only because its truck fleet has been largely financed by external grant funds. A requisite of smooth implementationof the proposed project lies in the betterment of road conditions throughout the project ar~éa. Government is aware of the need to improve roads, and since 1970 has undertaken a comprehensiveprogra. (financed by IDA Credit 197-MLI) to strengthen màintenance and improve selectid roads in the groundnut area. These programs, however, require extension and intensification.

B. Transport Infrastructure

3. The project area covers about 125,000 km of Western Mali, along a line Tominian-Sadiola. It is divided into nine sectors which are the UA basic field units; the condition of,the transport infrastructurevaries ïreatly botl-within and between these sectors.

4. The railway line of the Regie des Chemins de Fer du Mali (RCFM), passes through most of the project area. RCFMIand the connecting Senegalese railway are Mali's main outlet to the seaport of Dakar in neighboring Senegal. Thiecapacity and efficiencyof these railways are expected to improve gradually over the next few years as ongoing programs, partly financed by the Bank Group (Credits 384-MLI and 314-SEN and Loan 835-SEN) are implemented.

1/ The transport aspects and the road component of the proposed project were reviewed during the appraisal mission by a special task force which included Mr. Ouatarra from the Direction Nationale des Travaux Publics (DNLP), rlr.Kante from "Operation Archide" (OA), and Hr. Doyen from PMWA. This annex is based on the task force's report, and on a recent study andertakenby consultants (BCEOM) who were employed by DNTP to identify t:ierequirements for road improvementsin the project area in addition to those being undertaken in ongoing or planned IDA and FAC-financed programs; for details of the latter see Appendix 2. ,A!NEX4 Page 2

5. In the hinterland of the Western Sectors (Kayes, Kita, Bafoulabe and Kenieba), the transport system is based on roads and tracks serving railway stations. Road transportationin this zone will improve markedly in the future as the DNTP progresseswith implementationof its road betterment programs, mostly financed by external aid. The Central Sectors (Koulikoro,Banamba and Kolokani) are linked with Bamako and Koulikoroby gravel roads, but need more and better roads which will be provided under DNTP road betterment programs. TlieEastern Sectors (Segou and San) are served by a dense network of roads. Tiheinfrastructures of the Eastern Sectors are adequate to support the project and will not be subject to project financed rural track improvement. The extent of the road and track network in the Western and Central Sectors is given at Tables 1, 2, 3, and 4.

6. Roads in the project area are classified in two broad categories (see Table 5):

(a) Major feeder roads - comprising roads which carry sufficient traffic, roughlymore than 2,000 t per year, to warrant some form of permanent improvementand continuousmechanized maintenance. Two levels of improvementhave been defined:

(i) Type A (Normal) for roads with more than 4,000 t of traffic per year;

(il) Type B (Minimal)for roads carrying'roughlybetween 2,000 t and 4,000 t annually.

(b) Rural tracks - includingunclassified rural roads and natural tracks, link villages with one another and with major roads. Although-not qualifying for permanent improvements even to minimal Type B standards, these are essential for crop marketing.

The length, classificationand proposed improvementlevels of roads serving the Western and Central Sectors of the project area are given in Tables 2 to 4. The project area is served by:

(i) about 2,200 km of major feeder roads which are (or would be on completionof ongoing betterment programs) under the responsibility of DNTP; (see Table 3 - IV) and,

(ii) about 1,500 km of rural tracks which would be subject to spot improvementsunder the project (see Table 4).

7. Governmentpolicy is (i) to make DNTP fully responsiblefor the constructionand subsequent maintenanceof mejor feeder roads; and (ii) to leave spot improvements(occasional repairs carried out mainly by manual labor) of tracks to local authoritiesor to agriculturaldevelopment agencies. ANNEX 4 Page 3

8. The DNTP road program under the IDA-financedHighway Maintenance Project, is progressingmore slowly and at higher costs than expected; and by June 1974 only about 600 km out of tie total of 1,450 kmlplanned for betterment under the project are expected to be completed. The remaining sections plus an additional800 km probably will be consideredunder a possible Third Highway Project, tentativelyscheduled for appraisal during the second semester of 1974.

9. If, as expected, the remaining 1,200 km are subject to a project bettermentprogram beginning later in 1975, all major feeder roads serving the area would be improved to adequate standardsby 1978; and the program for improving the roads serving the western part of the project area along the railway, where transport problems currently are most acute, would be largely completed by 1976.

C. Improvementof Rural Tracks rhe Program

10. Small scale spot improvementson 1,500 km of rural tracks would be financed under the project and carried out directly by OA. Executionwould be through small road gangs equipped with tipper trucks and a stock of manual tools. Their tasks would be limited to simple manual operationssuch as quarrying, loading, spreading laterite and arranging rubble stones. The gangs' activitieswould be divided into:

(i) programmedimprovement works on selected tracks in the period from April to October;

(ii) maintenanceand emergency repairs from November to March in direct support of the marketing campaign, and farm input distribution.

11. Rural tracks to be improved under the project have been classified in two categoriesaccording to the amount of traffic they carry (see Table 5):

(i) TypeC - tracks carrying between 500 t to 2,000 t annually, comprising mostly links between marketing points and major feeder roads;

(ii) Type D - less important tracks, carrying less than 500 t, mainly those linking villages with marketing points.

The aim of the improvements, (details are in Table 6) would be: ANNEX 4 Page 4

(i) for Type C tracks - to provide a reasonable level of serviceability for trucks during the dry season and to ensure year-round passage of general purpose vehicles (except during the height of the rainy season); and

(ii) for Type D tracks - to allow the passage of heavy trucks without risk of heavy damage during the crop marketing period (i.e. in the dry season).

12. Provisionwould be made under the project to procure two graders, one For the Kita region, and the other for the Kolokani region. The DNTP lquipment Departmentwould be contracted for the repair and maintenance of these graders. DNTP would lease other equipment as requested, in particular bulldozers, to the OACV.

13. Average quantities of works needed to improve a typical 10 km section of rural track to C or D standard are given in Table 6. The size of the gangs and their distributionwere determined on the basis of an estimate of the size of programmed works throughout the project developmentperiod. The proposed road gangs and graders would provide the project with adequate capacity to carry out all programmed improvementsof C and D tracks over the period 1974 - 1977, and,to maintain and repair roads and tracks on an ad hoc basis during the marketing season. The equipment and personnel to be attached under the project to various sectors are as follows:

Kolokani and Banamba Kita Bafoulabe Kenieba Total

Road Gangs 1 1 1 1 4

Trucks (7 t) 5 5 4 3 17 .`anpower 29 29 22 20 100

Grader (120 hP) 1 1 - - 2

Cost Estimate

14. Estimated capital costs for equipment and tools required to establish the four road gangs are given in Annex 12 Table 7. The direct costs of programmed improvement works and unprogrammed maintenance and repairs have been estimated together on the basis of the annual operating cost of the four road gangs and the rental cost of the two graders and bulldozers; these are summarized below: ANNEX 4 Page 5

.Istimatedincremental cost of rural tracks improvement

(MF Million) Foreign as % of Local Foreign Total total

Vehicles and equipment 37 /1 147 184 80 Staff 39 - 39 - Operating Expenses /2 94 94 188 50 Cost 170 241 411 59

/1 Includinglocal handling charges, taxes and duties.

/2 Including taxes, salaries, fuels, lubricants,maintenance and repair of trucks, constructionmaterials, hand tools, etc.

D. OrganizationalArrangements

15. A special unit, Service des Travaux Routiers,would be established within OACV headquartersto plan and supervise the road activities of the project. The unit would be headed by an experiencedroad inspector (Inspecteur des Travaux Routiers),seconded from the DNTP. The road inspectorwould assume broad responsibilitiesfor the organization,planning and supervisionof all track improvementactivities of the project and for the efficient use of the road gangs and of the equipment. He would be responsiblefor coordinationof the project's annual track improvementprogram with DNTP. The proposed annual program would be submitted first to DNTP for comment and then for agreement on DNTP's support. The proposed programwould include schedules for the use of the two graders procured under the project, and for the rental of other DNTP equipment, in particularbulldozers. Each of the four road gangs would be attached to a sector of the project and ;ould operate under the administrative authorityof the Sector Chief who would supply them with funds, materials and fuel, and control their expenditures. Each gang would be headed by a gang leader to be seconded from DNTP.

E. Road Transport Costs in the Project Area

10. Road transportcosts on classified roads are expected to decrease by 30 to 40% over the period 1973 - 1978, as a result of DNTP programs for tihebetterment of major feeder roads and for strengtheningroad maintenance. The use of unclassifiedroads and rural tracks would be facilitatedby small scale improvementsfinanced under the project. Estimates of trucking costs for varîous types of roads in years 1972 and 1978 are given in Table 7. ANNEX 4 Page 6

Official freight rates have been set consistentlylower than actual vehicle operating costs. This, together with the very poor condition of the road network, has discouragedprivate truckers from participatingin the collection of the groundnut crop. Thus, OA has been compelled to organize its own fleet, which operates currently at low capacity and high costs. In the future, however, and as road conditions improve, OACV would attempt to gradually reduce its involvementin trucking.

17. Existing freight price regulationi concerningroad transport will be studied under IDA's Second Highway Project (Credit 383-MLI). This study is expected to provide the basis for revising eixistingprices so as to encourage the developmentof a trucking industry of adequate capacity.

F. Economic Evaluationof the Road Component of the Project

18. The rural track improvementprogram is essentially a maintenance cum bettermentwork (average cost is about US$600/km). However, since the program is a major component of the entire project and involves an initial capital investmentof about US$400,000, a brief economic evaluation of it Itasbeen separatelyperformed.

19. The economic benefits from road improvementsconsist of: a) operating cost savings to vehicles used (i) for transportingagricultural products and farm inputs, and (ii) in OACV's operations;and b) induced increase ir groundnuts productiondue both to increased acreage under productionand more effective use of extension services, medical and veterinary personnel.

On the basis of savings in vehicle operating costs above, the investmentin thLe-. ural tracks yields an economic return of over 15% which indicates that the inciusionof the improvementprogram is economicallyjustifiable. ANNNEX4 Table 1

MALI

INTEGRATEDRURAL DEVELOP 7T PROJECT

IMPROVEMEITOF RUiLALTRACKS

Length of Roads and tracks in the Western and Central Sectors (kilometres)

Classifii4 For To be Proposed Sectors in 1973 !/ Improvemerot Classified under 1974/77 g/ inI 1978 21 IDA ProjectM

Western 656 997 1,437 935

Central 6] 388 41 2 743 565

TOTAL 1,04h 1,409 2,180 1,500

1] Classified roads are the responsibility of DNTP - see Table 2. g/ Roads for improvement by DNTP under ongoing or planned programs mostly financed by external aids. Sane roads already classified in 1973 would be improved : Western Sector 216 km, Central Sector 57 kn (total 273 km), see Table 3.

3/ Roads classified in 1978 will include roads classified in 1972 plus roads imnproved in 1974/77 and not already classified in 1972, see Table 3.

1K/ Tracks of types C and D to be improved by road gangs financed under the IDA project, see Table 4.

5] Wes tern Sectors : Kayes, Bafoulabe, Kenieba, Kita.

6] Central Sectors : Koulikoro, Banamba, Kolokani.

December 16, 1973 ANNEX4 Table 2

MAI

INTEGRATEDRURAL DEVELOPMENT PROJECT

IMPROVEMENTOF RURALTRACKS

Roads Classified in 1972

Sectors Designation t Kilometres

WESTERN Bafoulabe - Djibourou - Kenieba (Guinee) 184 Kayes - Sadiola - Djibourou 1 87 Kati - Sebekoro - Kita 70 Kita - Toukoto - Segeto 160 Kita - Sirakoto (Guinee)

Total Western Sectors 656

CENTRAL Bamako - Kati - Kolokani i 124 Kolokani - Didieni 65 Koulikoro - Banamba 90 Banamba - Borou - Bamandjoujou 109

Total Central Sectors 388

GRANDTOTAL | o,044

i _ __

..xc;L;er >, 1,)73 ANNEX4 Table 3

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

Iprrove-n-t cf Rural Tre-ko

Improvemnnt uf Feeder ROeds 1974/77 Proara,

I INCLUDED 1N IDA CREDIT 383 1/

Ki lu,eetnes Tons SECTDdS TYPES DESIGNATION Ysar ITset Total

WESTERN 21 A Kit. - Didjan - Blti.klnak 10,000 (29) 30 Kit. - Kokof.ta 7,000 60 90

B Didjan - NRmbiri 2,700 (19) 21 B.ti,kalsa - NataI. 2,500 13 Batia.kasa - Ta.fssadaga 3,000 13 Kita - Sageberi 3,800 77 Olanko - Bamafele 2,800 115 Mahins - Tantidji 2,100 (;15) 121 360 Total Western Secture 450

CENTRAL / A Kolokuni - Sirakorola (B) 8,500 (64) 54 Masaant.ol - Tioribougou - Niokona - Niokna (B) 4,700 (55) 57

B Niokon- - Faladie (C) 2,500 (19) 20 Rolokani - Sebekoro 2,200 42 Sirakorola - Niasi.u 2,600 71 133 Total Csntrel Se-tors 244

GRAND TOTAL 694

1/ Ses report PTR-52 a uf MNy 1970. Appraisal cf e Highway nuiotenans projeot - Republo cf MIli 2/ Western Setotrs Kayet, BRfoolube, Kenieba, Kita 3/ Central Sectore KRolikora, B.asabe, Kolokani 4/ Type A Western Sertore 90 km Central Se-to-s 111 km 201 ku

Type B Western Sectors 360 kl Ceotral etotrs 133 ko 493 km. Grand Total 694

; rvised nu-ber uf kilometres II INCLUDED IN FAC PROGRAM Kilometres

SECTORS TYPES DESTGNATION yT-ar Inset Total

WESTERN B Tokukoto- Sefets 2,500 87 Toukouto - Ta.bAge 2,200 60 Tookouto- Tondidji 2,000 75 Msmbetr - Koorooninkoto 2,500 66 Kayes - SOdiole - Dialufera 2,100 150

GRsND TOTAL -

III RECAPITULATION

1) Type A IDA 201 kl DNTP-1/16 km - 217 kmc

2) Type B IDA 493 ke FAC 438 ks DNTP1/ 261 km 1,192 ke

TOTAL 1,409 kn

1/ Total 277 km cf which 273 km alreedy ole.sified in 1973 (addititn 4 km)

IV ROADS CLA8SIFIED IN 1978

1) Ruads olaeoifisd i 1973 (.ee teble 2) 1,044 kb

2) IDA Ctedit 383 (see S ub-ve) 694 km

3) FAC Progran (ses ET abuvu) 438 km

4) DNTP Progran (ses 1/ cf III abuve) 4 kb

2,180 kl

Outober 7, 1973 ANNEX L Table 4 MALI

INTEGRATED RtRAL DEVELOPMENTPROJECT

Improvement of Rural Traclzs

TRACKS FOR IMPROVEMENTS Kilome tres Tons/ Sectors Types Designation vear Inset Total

WESTERN Il C Sagabari - Balega 800 60 Namala - Bangassikoro 1,600 20 Djibouroa - Dialafora 1,900 34 Sikoto - Toubafinian 600 25 Djimekourou - Herokoto 1,500 54 193

D Sebekoro - Madina - Moro Moro 450 90 Safeto - Dialan 200 40 Sagobari - Karo - Kakofata 400 50 Bougaribaya - Kokofata 450 10 Sabagari - Gale 250 40 Makariako - Segoune 400 10 Kokofata - Bafing Kana 450 60 Samboula - Yatera - Kassama 400 23 Samboula - Tamboula 150 15 Dialokoto - Faraba 450 40 Toubafinian - Kouroukoto 100 43 Makina - Neguetabali - Koulangoulan 450 65 Solinte - Walia - Fatafing 400 82 Kamansdo - Bamafele 450 38 Malina - Kale 450 25 Heroko - Moussala 150 14 Tantidji - Bamafele 400 17 Sadiola - Kakadian - Moussala 200 35 Same - Ndagassenon 200 45 742 Total Western Sectors 935

CENTRAL 2/ C Didieni - Falon 600 82 Bananiba - Kiban 1,100 10 Bananiba - Toubakoura 600 12 104

D Niokona - Fassa - Kolokani 100 50 Sagabala - Samantara 200 35 Kiban - Toukouroba 400 40 Kiban - Toubakoro - Sebete 400 63 Douraba - Koula - Tamani 100 33 Massantola - Sirakoroba - Bamaniba 200 35 Bamandjoujou - Mourdiak 400 30 Mourdiak - Falou 100 70 Koulikoro - Tougouni - Katiola 200 105 461 Total Central Sectors 565

GRAND TOTAL 3/ 1,500

i/ Western Sectors: Kayes, Bafoulabe, Kenieba, Kita

2/ Central Sectors: Koulikoro, Banamba, Kolokani

32 Type C - Western Sectors - 193 kms Central Sectors - 104 kms 297

Type D - Western Sectors - 742 kms Central Sectors - 461 km 1,203

GRAND TOTAL 1,500 MALI

INTEGRATEDRURAL DEvOEPFNT PROJECT Improvements of Rural Tracks

Roads and Tracks Technz.cal Characteristics

Type of -i,oade A B C - D

1. Tons per year 4,000 to 10,000 2,000 to 4,000 500 te 2,000 less than 500 2. Clearingwidtii m 9 7 5 4 3. Roadway widty m 5.5 4 3.50 3 4. Surfacingand ancillary Continuouslaterite Discontinuouslaterite Spot improvements Minimum spot to works 15 cm thick; 12 cm thick to insure passage & improvements Continuous ditches, outlets Ditches and outlets on improve riding cond- ineure passage; pipe and culverts, dikes and grade sections, small itions; annual ad hoc repairs concrete fords dikes and stone fords grading and repairs

5. Serviceability for 7T throughout the year, except during dry season during dry season during dry ti'uck during & immediately after season rains i) loading capacity 75 to 90% 70 to 85% 60 ta 75% 50% ii) average spe Pe. 35 to 50 ka/h 20 to 40 km/h 15 to 25 km/h 15 to 25 km/h iii) average transportcost MF/kma 124 124 155 178 20h

6. Average cost of iniprove- ments (MF million/km)

i) operatingcost 1.5 to 1.7 0.55 to 0.65 0.15 to 0,18 0.075 to 0.10 ii) total cost (incliding technical assis ance & to 0.135 tG o.16 equiptenl ) 2.ic tG 2.35 o.o0 to 0.9U 0.25 0.28

7. Main use for CACV Transportof siieliedground- Transport of groundnuts fransport cf Transport of activities. nuts frorisecondarj solrage froinmarketing potnts .e groundnuts frorL grolundnutsfrom point, (seccas) to railway seccos and froinseccos sarrair marketing villages to stazionIs & oil milIs ,o railway sDaînons points to seccos marketing poirtzs

October 7, 1l9'i x\7Jr ANN1X4 Table 6

MALI

INTEGRATEDRURAL DEVELOPME!ÇT PROJWCT

Improvement of Rural Tracks

Scope of Works

JI fspe C Track

1) Works to be carried out

i) clearing of 5 m width ,i) filling of potholes and hollows, reloading sandy stretchesvith laterite gravel iii) construction of small dikes and fords across low points with rubble iv) erasing rock outcrops

42) Average quantities for 1G lkmstretch

i) truck loads of laterite gravel : 65 to 120 ii) truck load of rubble : 30 iii) rock outerops 50 m iv) number of working days 10 to 13

I ~TypeD Track

1) t4orksto be carried out

.)' rîinimuwrnclearing to al:low truck passage il) filling of hoMlows and reloading sandy stretches with laterite gravel -ii.) construction of small dikes and fords with rubble

2) Average guantities for 10 km stretch

i) truck loads of laterite gravel : 30 to 60 i. r,ruck loads of rubble : 30 iiii nunber of working days 6 to 8

IlT'2asks ta be periÙmed by road gan

i) oul.-ting and removing trees and bushes ii) quarrying and preparation of laterite and rubble iii) loading and unloading of trucks iv) spreading and compacting of laterite, arranging rubble

October 7, 1973 ANIEX 4 Table 7

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Improvement of Rural Tracks

Analysis of Trucking Costs in Project Zone (for 7T lorry)

` era,e uniJt costs for various types of roads and tracks (1972 value)

Operating Operating Loading Transport Cost Cost % on Capacity Cost (MF/Km)]/ Paved roads % (MF/TK)?/

Paved 86.8 100 up to 10C) 24.8 iïnprovedgravel road 10v.6 125 85 - 95 32.6 Feeder road Type A 124.2 145 80 - 95 4o.7 B 154.8 170 75 - 85 52.5 Track l C 1783 210 60 - 75 69.1 D 203.8 240 60 - 70 85.7 'nriaintainedtertiary road 220.8 260 50 - 70 99.8 Nat,uraltrack 233.5 275 50 - 60 115.2

1/ Including ail taxes and duties (representing about 22%), depreciationsand drivers wages. 2/ As for L] and assuming trucks only loaded on return trip tno payload carried on the way to marketing points or villages). Operating c6st reduced by 10% for empty loads on roads beyond type B.

B. Estimates of average transport costs in project zone in 1972 and 1978

Western Sectors Central Sectors Eastern Sectors

1972 1978 1972 1978 1972 1978 i) Gathering (If/TK) 100 72 104 72 78 66

Dif'`erence between 1978 & 1972 28% 31% 15%

2) Deli.very (S,'/TK) 68 47 73 47 52 43

Differerice between 1978 & 1972 30% 36% 18%

October 7, 1973

ANNEX5 Page 1

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

FUNCTIONALLITERACY PROGRAM

A. Background

1. Functionalliteracy programs were introducedto Mali in 1968 under the patronage of UNESCO, FAC and FED. The main objective of a functional literacy program is to help individuals increase their productivityby teaching them the elements of reading, writing and arithmeticneeded for a better understandingof their work or business through "out-of-school"courses carried out in their native language. In countries with a limited educational infrastructureand serious financial constraints,such as Mali, a system of functionalliteracy, if correctly managed, could be a satisfactorymeans of spreading basic education at a low cost. In agriculture,the objective of a functionalliteracy program is to help the farnierbetter understand,and thus apply more efficiently, teclnical innovations recommended by agricultural extension services, and provide him with a knowledge of matters such as weights and measures that prevents him from being the prey of the unscrupulous.

B. Organization

2. National Level. Responsibilityfor education in 1Maliis split between the Ministry of Basic Education, Youth and Sports, and the Ministry of Secondàry and Higher Education and of Scientific Research. The latter controls Direction Nationale de l'Alphabetisation Fonctionnelle (DNAF). DNAF comprisestwo units: (i) a managementunit which, at the request of and in close cooperationwitli Operations de Developpement,or industrial and commercialenterprises, carries out preliminary surveys, prepares programs, and generally implementsAF programs and assesses their results; and (ii) a visual and audio aid production unit, which prepares and distributes posters, and other educationalinaterials, including making radio broadcasts,necessary for the support of AF programs.

3. Rejqonsand zones. Mali is divided into AF regions in which a manager is responsible for the organizationand control of all AF programs. The regional manager works in close cooperationwith the managers of Opera- tions de Developpementand other enterprises for which AF programs are being undertaken, and directs and coordinates the work of the chiefs of Functional Literacy Zones (ZAF). In turn each ZAF comprises one or two AF districts, each with an average of about 40 AF Centers (CAF). ANNEX5 Page 2

4. FunctionalLiteracy Centers. A CAF, which is the basic unit of the AF program, is establishedin a village when requestedby,the villagers, who elect an AF Committeeand choose two literate volunteers (animateurs)to teach the AF courses. The villagers, led by the commlttee, build a shed to house the CAF. Here, the animateurs,after training by staff of ZAF, give AF courses with the help of educationalmaterial and equipment supplied by the DNAF, anà1with the assistance and under the supervisionof both staff of AF and the ciperationsde developpementor other agency involved. The animateurs are not paid but are given food.

C. Operation Arachide

5. OA requested a functionalliteracy program geared to its requirements in 1969. During the first year of the program emphasis vas laid on explaining to farmers, using practical demonstrations, the systeus employed by OA in crop marketing and credit distribution and collection; importantly, in this phase farmers vere taught such things as how to read the scals used to weigh their produce and to check payments made for their produce. Follow- ing this relativelysuccessful first attempt, AF vas extended to other villages, and the curriculum enlarged to cover improved methode of cultivation being recommendedby OA extension staff. OA basic sector chiefs act as animateurs for the first two months of operation of any new CAF, and thereafter remain as close adviser to the regular animateurs and attend the classes. The animateurs are subject to the supervision of the ZAF chief, who makes regular visits, and they attend training sessions at the Regional AF office. The AF program and its supporting educational naterial are the subject of continuing review, to take into account OA requirements and farmersV needs and reactions. An AF program cycle extends over two years, and is Limited to the dry season when field work in at a minimum. It is estimated that, at the end of 1973, 30,000 farmers will have completed AF cycles connected vith Operation Arachide. The joint OA/AF target is to educate at least one active member of each farm family through the AF system.

D. AF Program in the Proposed Project

6. lp to now, a complete evaluation of the value of AF programa ln Mali in general, and within OA in particular,has not been made. For this reason, Government's request that an additional 3,000 CAF be establlshed vithin the five year project development perlod could not be accepted at appraisal. Such a program vould be very expensive,an estimated MF 1.2 billion (US$ 2.9 million), and expenditures at such a level would be unvise vithout a careful assessment of the effectivenessof AF. Consequently,a componentof the proposed project would be an evaluationof past and ongoing AF programa, and pending the conclusion of this evaluation,a limited prograi of expansion for CAF in PY1 through PY3 as followa: ANNEX 5 Page 3

1973 1974 1975 TOTAL New 1 2 1 2 1 2 Centers

Existing Centers 249 ------" ~ "i 115 115 115 - - - - " 225 225 225 225 - - -

New Centers - 265/1 265 265 265 - 265 "l "155 155 155 155 155 100 100 100 100 100 100 100 100 100 Total Centers in operation 589 605 760 745 620 455 -

Total New Centers 720

/1 Already committed at appraisal.

At the end of 1974, and after considerationof the findings of the evaluation study, a decision would be made whether the last 200 CAF scheduled for 1975 would be opened or not. In the former case, alternative financing would have to be found for their continuationafter 1975, but at this time and if the findings of the study vere positive, Mali's AF program as a whole probably could be the subject of a major functional education project.

7. Cost of the proposed Functional Literacy Program. The coste of the AF component of the project are estimated at MF 185 million (US$ 441,000); these costs are summarlzed in Annex 12, Table 8.

ANNEX 6 Page 1

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

RESEARCH PROGRAMS

A. Background

1. Institut d'Economie Rurale (IER) of the Ministry of Production is responsiblefor agriculturalresearch through its Divisions des Recherches Agronomiques (DRA). DRA is divided into 7 sections: (i) nurseries; (ii) seeds; (iii) plant introductions; (iv) regional trials; (v) fruit crops and market gardening; (vi) cotton and fibres; and (vii) food crops. Under the proposed project OACV would liaise closely with the seeds sections which are responsible for the multiplicationof seed of improved crop varieties; the seeds section operates seed farms, c,ntrols stores and distributes the seed it produces. The seed section assists OA in supervising the production of seed produced by OA sponsored seed growers. Cooperation in the past between OA and the section has been satisfactoryand would continue during the proposed project. The project would also maintain permanent relations with the food crops research section.

2. Food Crops Section. This section is managed by an expatriate research worker provided by Institut de Recherches AgronomiquesTropicales et des Cultures Vivrieres (IRAT). The section comprises four units: (t) a soils unit, with a station at Sobuta, and managed by an IRAT staff member; (ii) an oil seeds unit, with a main station at Katibougou and a substation at Kita, managed by an expatriate supplied by Institut de Recherches des Huiles et Oleagineux (IRHO); (iii) a maize, millet and sorghum unit managed by a Malian research worker with a main station at Sotuba and a substation at Seno, and (iv) a rice unit managed by an IRAT staff member wtth principal stations at Mopti and Kogari, and a substation at Sikasso. All units have field trials located strategicallythroughout the country.

3. Research Programs.

(i) Groundnut. Past and ongoing research has concentratedon varietal improvementand this continues with new varieties being screened for yield potential, growing cycle and resistance to rosette disease and drought. Other wark is concerned with fertilizers,pest control, cultural methods and use of ox-drawn equipment. New varieties or methods that give promising results at Katibougou or Kita are tested on local adaptation trials before being issued or recommended te farmers. The adaptation,or so-called multilocal, trials are carried out at 2 or 3 sites per ANNEX 6 Page 2

sector under conditions similar to those prevailingon a good average farm in the sector. These trial sites also serve as demonstration farms in the training of project. staff and farmers.

(ii) Millet and sorghum. Research with these crops is to firid new high yielding varieties suited to the country's ecological conditionsand with tastes and other qualities acceptable to the local population. Some ten local millet varieties exhibitingyield potentialsof between 2 and 3 tons/ha under experimentalconditions have been retained for further developmentbut so far have not exhibited sufficient promise to warrant their distributionto farmers 1/. Research on sorghum has produced more promising results; but so far no high yielding variety acceptable to local tastes has emerged. In the absence of high yield potential varieties the units' work on fertilization,rotations, soil fertility maintenance,and use of ox-drawn equipment etc., while interesting,is of linited practical application.

B. Project Research Component

4. The research component of the project would be to assist the continuationand intensificationof ongoing research programs on groundnuts and crop rotations and help the soils unit to conduct the soil surveys and prepare the soils maps needed for OACV's and other agricultural development programs:

(a) Groundnut work. The project would provide financial assistance for the following:

varieties: continuationof variety trials on high yield potentialmaterial;

agrocides: trials with fungicides,insecticides and herbicides;

fertilizers: nutrient requirements,timing of applications, residual effect on cereals in rotation;

cultural techniques: timing, plant population, soil preparation;

1/ This is not a peculiar to Mali; measures to improve the productivity of millet have proved singularlyunrewarding elaewhere. ANNEX 6 Page 3

equipment: testing of hullers, washers for confectionery groundnut, and seed sorting equipment;

quality: control of aflatoxin; control, preparation and packing of groundnut for confectionery; control of seeds; control of groundnutoil.

(b) Rotation. Research on millet, sorghum, maize and rice is satisfactorily financed and could not be substantiallyimproved under the project; on the other hand, the possibilitiesof diversifying farm productionneed close examination: in particular,rotations of longer duration than the traditionalsorghum/cereal type and including such food crops as maize, cowpea, foddercropsand other cash crops such as cotton. Work is required to determine the optimum rotational combinationof these crops with groundnuts, millet and sorghum and to assess the financial and economic advan- tages of the alternatives. This type of work has been instituted successfullyin Senegal. The program would require about 4 field trials of some 2 hectares in each of OACV's main sectors.

(c) Pedologicalmaps. Under the project the soils unit would receive financial and technicalassistance for soil surveys and to produce the pedologicalmaps which are so badly needed in Mali to plan the best use of its natural resources. The objectives of this assistance would be (i) to define the large morphopedologicalunits of the areas under study, (ii) to evaluate the potential fertility of the various soils, (iii) to select the soils most suited for agricultureintensification, (iv) study the economic risks due to the shifting of traditionalitinerant cultivation with long rotation periods to intensivecultivation on permanent fields. This assistance would in addition offer the marked advantage of forming a starting point for a general mapping of the soils of Mali which has not yet been done. The scale chosen would be 1 : 200,000which correspondsto the scale used for existing topographicmaps and this is well suited to the country's need. On pedologistcan, when working on this scale, prospect 14,000 km per year. The Malian authoritieswould indicate the boundaries of the zones to be studied and specify their priority and supply the corresponding aerial photographs. The project would provide funds for a two year survey by a pedolog cal team which should complete the required work over 28,000 km representingabout 21% of the project area.

ANNEX 7 Page 1

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

MEDICAL ASSISTANCE

1. Organization. The Ministry of Public Health and Social Affairs is responsiblefor all medical and social services in Mali. The minister and his cabinet are especially in charge of legislationdrafting, planning, control of inspectors,doctors, medicines and pharmacies, relationswith internationalhealth organizationsand foreign countries providing technical assistance,education and training. The ministry is divided in two departments: Direction Nationale de la Sante (DNS), responsible for medical and health services, and Direction des Affaires Sociales (DAS), in charge of social services; their work is coordinatedby a bureau of studies made up of the directors and division heads of both departments. DNS is responsible for the execution of the health, sanitary and medical programs prepared by the Minist:er,the administrativeand technical supervisionof hospitals and health centers, and the control and applicationof medical regulations. DNS is also responsible for suggesting and preparing health programs and regulations, maintaining medical statistics and generally for dealing wîth all matters concerningmedical and health matters. In each of the six regions IDS is representedby a Regional Director of Health who is the Governor's health adviser and controls hospitals, health centers and medical staff of the region. In each of the 42 administrativedistricts of the country the health services are headed by a health district chief who i8 a doctor or a dresser, depending on staff availability. There is a dispensaryand in some cases a maternity unit managed by a dresser in each sector. The public health services are divided into two branches: (i) medical care dealing with first aid, treatmentsand surgery in dispensaries,maternities and hospitals; (ii) medical prevention, dealing with transmissiblediseases (responsibility for tracking these down), vaccination and cure. The program i carried out bv means of regular visits planned annually in advance, with the aim of examining all the inhabitants of the sector for which the medical prevention team is responsible. When warranted, mass vaccinationsare undertaken against smallpox, yellow fever, measles, tuberculosisand cholera, which are the most prevalent diseases in Mali. Both branches are generally under-staffedand under-equippeddue to lack of funds, which are also insufficientto meet operating expenses. Consequently,medical services are often inefficient.

2. Proposed project. In the project area, there is one dispensary for 15,000 inhabitantsand 3 hospital beds for 5,000. These health facilities however benefit only a small minority of the people who live nearby. The proposed project would provide funda for staff seconded from DNS and working under OACV administrativecontrol, for purchase of vehicles, equipment and medicines, for the constructionof dispensariesand for operating expenses. This would help the medical care branch to extend its sphere of activities and to give attention to people heretofore outside its scope. The proposed ANNEX 7 Page 2 project would also assist the medical prevention branch and vould allow more detection visite, more regular vaccination cmpaigns and better education on sanitationand healthamong the populationsvisited by the prevention teams. The annual programs and budgets would be established jointly by DNS and the deputy general manager, who vould insure,through the project extension service staff and with the help of DNS local staff, that the program is satisfactorily executed. Financial control of medical program expenditure within the agreed budget would be the responsibility of DNS. ANNEX 8

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

VETERINARY ASSISTANCE

1. Organization. Service de l'Elevage et de la Sante Animale (SESA) is one of the four divisions of the Directorate Generale of Production of the Ministry of Production and is in charge of the development of animal production. SESA's main responsibilitiesare (i) animal health; (ii) improvement of animal production; and (iii) meat inspection. At the national level SESA comprises two sections (i) animal health; and (ii) animal husbandry. In the field there is a veterinary coordinatorin each region, a livestock sector chief in each sector and a district veterinary at district level. As for all other agriculturalservices, staff and funds are insufficientto insure adequate services.

2. Cattle. SESA estimated that at the end of 1972 and before the full impact of the drought was felt, the national cattle herd totalled 5.2 million, made up of 30% males and 70% females, of which 55% vas less than one year old. The reproductionrate is low at 66%, and the death rate, while a reasonable 3% for cattle of over two years, is 33% for animals of under one year. The survey of the effects of the drought has not yet been completed,but SESA estimates that in northern areas of the country losses have been in the order of 40%, and that a period of 5 to 10 years vill be needed to re- establish the pre-drought livestock population of these areas. In the southern and western regions, the effects of the drought have been much less serious and are estimated at somewhere between 5 and 10% of total numbers. Cattle heads in the project area are estimated at 1.4 million; most of these are consideredas "saving accounts" by their owmers, and before OA was initiatedwere seldom employed as draft animals. Since then farmers have shown remarkable ability in training their cattle for work with advice and assistance from the ox-drawn equipment staff of the OA extension service.

3. Proposed project. The proposed project would provide staff seconded from the SESA and working under OACV administrativecontrol, with vehicles, veterinary equipment and a revolving fund for the purchase of veterinary medicines; and funds for the constructionof spray races and operation expenses. The revolving fund would be replenished through charges paid by farmers for veterinary medicines. The main duties of the staff would be to provide for the health of cattle in the project area, through preventive inoculations, but also some curative treatment, and to advise farmers on animal husbandry. Annual programs and budgets would be established jointly bv SESA and OACV. The ox-drawn equipment specialist vould act for OACV in the latter arrangement and, through his own staff at sector and sub- sector levels, would monitor animal health and control.

ANNEX 9 Page 1

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

EVALUATION UNIT

1. The proposed IntegratedRural DevelopmentProject would have importanteffects on the populationin the project area and on the economy of Mali. These effects cannot however be estimatedwith accuracy and therefore an EvaluationUnit would be establishedunder the project as from PY 2 to assess the actual results and compare them with project forecasts. As no organizationcan satisfactorilyevaluate itself, the EvaluationUnit would be independentfrom project managementalthough working closely together.

2. The function of the EvaluationUnit would be:

(a) to follow project development;

(b) to assess the actual results for comparisonwith project forecasts;

(d) to reappraiseproject goals and if required to suggest modificationsof project objectivesand organization;

(e) to study the rural developmentprocess for future planning and development;and

(f) to help project managementin establishingproject goals and schedulingof project activities.

3. The evaluationwould include:

(a) participatingfarmers: modificationsin their gross and net incomes, in their consumption,in their participationin education,etc., and generally in their well being;

(b) changes in volume and value of production,efficiency of the marketing system;

(d) impact of ancillarysubprojects;

(e) changes in employment,in volume and type of business;

(f) clianges in tax revenues and expenditures and,

(g) generally any changes in economic and social indicators showing direct and indirect re8ults of project activities. ANNEX 9 Page 2

Some of the informationrequired would be available from project records, other data would be collected by surveys and from sources outside the project, but the methods of data collectionand assessmentswould be determinedby the EvaluationUnit.

4. The EvaluationUnit would be headed by an agroeconomistwith experienceof West Africa and knowledge of statistics and social economy. He would be recruited internationallyfor a period of 4 years (PY 2 through PY 5) and as from PY 6 would be replaced by a Research Assistant engaged in PY 5. HIewould be assisted by a statisticianat headquarters,and by 2 supervisorsand 20 enumerators in the field. As funds are not available to cover the field activitiesover the whole project area, the agroeconomist will select, in consultationwith project management, the sectors in which the enumeratorswill operate during the project. The Evaluation Unit head would recruit his staff and train them, he would design record documents, develop data collectionsystem, instruct and control hie staff, consult withiproject management, governmentofficials and IDA personnel. He would prepare reports and recommendationsfor submission to OACV Board and, after Board approval, for distribution to IDA and project management. The Evalu- ation Unit would work in close cooperationwith IER and would investigate the possibilitiesof obtaining additional support from the Universityof Mali. The head of the unit would be professionallyresponsible to the director of IER. (See project organizationchart).

5. Detailed estimated costs are at Annex 12, Table 12. OACV would pay the expenses of the EvaluationUnit, within the limit of the annual budget, after approval by the Evaluation Unit head. ANNEX10 Page 1

kALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

GROUNDNUTSEED PRODUCTION

1. A principal objective of OACVis to replace entirely local groundnut varieties or mixtures of varieties used by farmers with selected varieties, and thereafter to maintain varietal purity at a satisfactorylevel. This is needed not only for reasons of productivitybut to facilitate shelling and to obtain an homogeneous production that can be sold easily on the world market.

2. Selected varieties. The two varieties chosen by OperationArachide (OA) for distributionare well suited for Malian conditions;they are 28-206 and 47-10. These, pending the selection of still better varieties, will be sold to farmers on seasonal credit terms at subsidized prices. The two varieties are:

- 28-206, a Virginia type, 120 day cycle, rosette resistant, yields up to 3 T/ha in field experiments,grown for oil production.

- 47-10, a Spanish type, 90 day cycle, rosette resistant,yields up to 2 T/ha in field experiments,is grown for confectionery and sells for a higher price than that obtained for 28-206. Suitable for the northern and drier part of the project area.

Seed rates are 100 kg/ha for 28-206, and 150 kg/ha for 47-10. At the end of the project development period the total annual seed requirementvould be some 21,000 tons of which OA would provide 4.740 tons and the balance would be produced by the farmers.

3. Multiplication stages. Stage (A) Parent material

(i 28-206. Parent material until 1972 was maintained at Bambey (Senegal)but is now establishedat the Centre d'ApprentissageRural (CAR) at Sirakola.

(ii) 47-10. Parent material until 1972 was maintained at the M'Pesoba farm. As from 1973 parental stocks will be kept at the Didieni CAR.

Stage (B) Elite 1

(i) 28-206. Elite seed is produced at the Sirakola, Kolokani and Didieni CAR. ANNEX 10 Page 2

(ii) 47-10. Elite seed is now produced by selected farmers but as soon as possible will be produced at Mourdiah directly by OACV.

Stage (C) Elite 2. This multiplicationstage is by farmers chosen from among the best and most reliable. These farmera grow seeds under contract under the close supervision of extension staff and OA seed agents. Records of dates of planting and of field operations are maintained for each seed farm. As payment grovers receive fertilizer and other inputs frea but their crop is bought at the standard rate. In 1972 OA had 400 ha of Elite 2 seed produced in this way.

These 3 stages should enable limited quantities of selected seeds to be produced as economically as possible. Those obtained from the two last stages are regularly controlled by the division of selected seeds of IER and IRHO staff.

4. Diffusion stage. The following two stages regulate distributionof selected seeds produced at *trategic points to reduce transport costs.

(i) Stage (D) first multiplication. Seeds produced from stage (C) are sold to selected farmers at sub-sector levels and used for the next multiplicationstage.

(Mi) Stage (E) second multiplication. Seeds produced from stage (D) are widely distributed to farmers with the best performance at basic sector level and the seeds produced at this stage are then mass-distributed,through OA control, to all the farmers of an area previously cleaned of groundauts. The productionfrom these seeds is used for another crop which is not used for further sowing; new seeds are then brought in. ANNEX 11 Page 1

2ALI

INTEGRATED RURAL DEVELOPMEUTPROJECT

AGRICULTURAL ISPUTS AND CREDIT

A. Organization and Operation of Agricultural Credit

Organizationof the Societe de Credit Agricole et d'EquipementRural (SCAER)

1. Societe de Credit Agricole et d'EquipementRural (SCAER)became an independentagency in April 1971, following recommendationsby Caisse Centrale de CooperationEconomique (CCCE) following a study of the agriculturalcredit situation in Mali.

2. SCAER is legally and financiallyautonomous and is authorized to make use of the rediscount facilitiès offered by the Central Bank; its main functions include:

(a) Acting as the central supply agency for production goods, such as agriculturalequipment, fertilizers,insecticides and fungicides, and controlling certain imports on behalf of Government;

(b) distributing these production goods either directly through its 26 retail outlets throughout the country, or indirectly through the "Operations de Developpement"which, acting on behalf of SCAER, holds stocks for sale on cash or credit terms, recovers credit repaymentsat the time of crop collection,and makes small individual loans to farmers either from its own funds or from special credit funds, but this activity has been deferred until adequate guarantees can be obtained for recovery of the loans.

3. The distributionof agriculturalproduction goods and the provision of short-term credit constitutes SCAER's major activity. Responsibilityfor these functions is divided between SCAER and the Operations as follows:

(a) SCAER, in close cooperation with the Operations (i) places orders, after consultationand local or international competitivebidding, and delivers the goods to the Operations; (ii) finances purchases and stocks; (iii) obsorbs the financial risks involved in credit operations; ANNEX 11 Page 2

(b) the Operations (i) manage and control stocks deposited with them; (ii) sell goods to farmers on credit or for cash, at their discretion; and (iii) recover the credit amounts d'iewhen the crop is marketed.

SCAER reimburses the Operations for the cost of their services through a 5% rebate on the selling price of goods.

4. Uniform selling prices for agriculturalproduction goods are fixed by Government (see Table 1). Since these prices are on average 9% lower than the cost price delivered Bamako, SCAER's operating account is credited vith the following:

(a) domestic subsidies financed from cotton (MF 4,000 per ton of seed cotton purchased) and groundnuts (

(b) contributionsfrom FAC and FED which are provided specifically to finance subsidies. The expected production increases of both groundnutsand cotton, together with increased selling prices, is expected to compensate for a decrease in FAC and FED assistance.

5. There are two factors, which result from the geographical isolation of Mali, contributingto SCAER's high costs:

(a) transportation,which adds an average 27% to the ex-factory price;

(b) financial charges on working capital which increase the cost of 6% borrowings to more than 8%, as 20 months elapse between the placing of orders and the first credit reimbursements.

Operation Arachide - Organizationof Credit Operations

6. At the Operations' central offices at Bamako, the following departmentsdeal with the distributionof production goods:

(a) the administrativedepartment, which coordinates requirements, places orders through SCAER, and takes delivery and distributes the goods;

(b) the credit department, which records the quantities and value of all productiongoods. ANNEX 11 Page 3

7. Locally, each sector of the Operation constitutesan administrative unit in which the sector chiefs and bookkeepersplay a major role in the distributionof production goods and the recovery of credit repayments fromn farmers:

(a) thc sector chief is responsible for: (i) cash sales of fungicidiesand spare parts, (il) credit sales of equipment, fertilizersand seed;

(b) the bookkeepersworking at sector and sub-sectorlevels record these activities and carry out periodie stock checks.

3. This system should provide both SCAER and the Operation management with adequate control data. In particular, a monthly statement of stock movements for each sub-sectorpermits detailed checking of deliveries and sales. lUowever,there are two serious shortcomingsin the system:

(a) overdue debts total about 20% of total loans to farmers as compared with about 2% under "Operation Cotton";

(b) coordinationbetween SCAER and OA is weak.

OA is taking steps to reduce bad debts and hopes to establish a system of mutual guarantees. In the meantime, individuaisor groups with a poor credit repayment record should be banned from receiving further credit, and legal action should be taken against defaulters. The project provides for the strengtheningand training of personnel in charge of credit operations as field level. A statement of SCAER loans and repayments for the period 1963 through 1971 is at Table 2.

B. Financial Position of SCAER

9. SCAER's opening balance sheet, which was approved by the Government and the Board of Directors, showed that equity contributionsfinanced all fixed assets and 95% of stocks. The position was further improved by a government grant of MF 350 million, representingworking capital (MF 150 million) and an equipment subsidy (MF 200 million). Balance sheets and operating and profit and boss accounts for 1971 and 1972 are summarized in Tables 3 and 4.

10. Cash requirementsare met by special rediscountingarrangements witii the Central Bank through the intermediary of Banque de Developpement du Mali (BDM). These arrangements,which are subject to review every six months, lave been regularly increased. However, bank overdraft facilities impose heavy financial charges as BDM does not allow SCAER a preferential rate. ANNEX 11 Page 4

11. The drought conditions in '1972and 1973 adversely affected credit repayments and caused a heavy increase in stocks and working capital. It is imperative for SCAER to maintain strict control of annual orders since the accumulationof stocks may endanger the financial position. This would allow SCAER accounts to remain positive. SCAER's operating account should remain in credit provided the ratio of orders to sales is adjusted and moderate increases are made in sales prices.

C. IntegratedRural Development Project Credit Requirements

12. Details of farm implements,other inputs and credit requirements eo he supplied by SCAER and improved seeds to be supplied by OACV are detailed in Tables 5, 6, and 7.

D. Recommendationsfor Credit Organizationand Operations

13. Accurate records should be kept of stocks held by SCAER's retail outlets and OA sectors. This would be taken care of in the SCAER/OA reciprocal service agreement and it is necessary that this agreement be promptly agreed and signed.

14. SCAER and OA should ensure that the annual orders for production goods should not exceed productionneeds to reduce working capital requirements. OA should also take steps to reduce credit repayment defaults to an acceptable level (about 5% of loans). MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Cost Prices and Sales Prices of Farm Inputs (MF)

Measure- Price ex- Selling Price as % ment factory2/ Del. Bamako Del. to Farmers Selling PriceY of Full Cost

Multicultivator Unit 38,430 40,351 49,794 30,000 60%

Tyne Unit 3,800 4,230 4,,750 4,750 100%

1,000 kg cartwheel set Unit 25,537 26.,814 33,088 32,800 99%7-

Seeder Unit 24,930 26,177 32,302 18,500 57% Groundnutlifter Unit 4,860 5,103 6,297 6,075 - 96% 37,469 40hO,0 107% Superphosphate21% Ton 17,000 31,270 53,,8h6 144 Red Thioral (Groundnuts) Kg 680 720 900 1,500 W 107%

Green Thioral (Sorghum) Kg 570 604 759 2,000 W 263% 200% Gammafrain (Lindane) Kg 190 200 250 500 Si

Groundnut selected seed Kg - - 47.5 34.50 50 73%

j/ 1973 orders. / Excluding tax, including freight. ~/ Excluding tax, including costs to SCAER (financial charges and management costs) and a 5% delivery comiass-on for "Operation Arachide". V|Government approved 1973 SCAh scales. Selling price fixed by "Operation Arachide".

October 10, 1973 MALI

INTEGRATEDRU RPAI DEVEOPMT PROJECT

Comparative Table of Loans and uYmeLnIt_ on Nov._ition 3 1972 Outstanding Debta as a % of loans Totals for Year Cumulative Totals Loan Repayment1 s Outstanding Loans Repaymèeits Outatanding for year Cumulative 1968 17,849,070 12,352,185 5,496,885 17,,849,070 12,352,185 5,496,885 31 31 1969 55,324,325 49,298,070 6,026,255 73,173,395 61,650,255 11 ,523,140 11 16

1970 11i4,223,570 99,405,625 14,817,945 187,396,965 161,055,880 26,341,085 13 14

1971 142,473,570 103,637,295 38,836,275 329,870,535 264;693,175 65,177,360 27 20

Breakdownas of November30, 1972

Loans Repayments Outstanding Outstanding Debt/Loans

Seeds 169,086,305 137,102,135 31,983,970 19%

Fertilizers134,138,305 112,535,125 21,603,180 16% Equipment 26,645,925 15,055,915 11,590,010 43.5% Total 329,870,535 264,693,175 65,177,160

Actual overdue debts include all outstanding debts on seeds and fertilizers and only a portion of outstanding debts on equipment;theaverage overdue debts are about 18%.

>31 MALI

IN'TEGRATED RURAL DEVELpPMET PRO!ECT

Soc-ete de Credit Agricole et d'Equipement Rurail

Condensed Balance Sheets MF'000,000

Assets Jan. 1,1971 Dec. 31, 1971 June 30, 1?72 Dec. 31, 1972 Liabilities Jan. 1, 1971 Dec. 31, 1971 June 6, 1972 Dec. 31, 1?73 Fixed Assets 50 181 427 311 Owners' Equity 1,2h1 1,25h, 1,718 1,713

Net value of fixed assets 1/ 13 18 1h 23 Long Terri 1 0 10 1')

Other fixed assets 37 163 411 288 Current 1, 4h 98tc 1,392 2,h85

Inventories 2/ 1,260 802 1,711 2,521 Resu]ts - 113 24 24

Receivables/Cash 1,448 1,380 1,006 1 _4__

TOTAL 2,758 2,363 3,L, 44,237 2,758 2,3u3 3,1Lh 4,23?

1/ As'ter allowance for depr ciatio n. a) Net workinF 2/ After provision for reserves. capital 1,204 1,1ut) 1,325 1,441 a) Current inventories and current receivablcs and cash. b) Ratio net working b) Net working capital/inventories and accounts rece;vable nnci cash. capital/gross 4hh 55>%4 48> ieorkinr capital

o ci £. 'kLI

Societe de Credit_ et d'34uipernent Rural

Ooridensea(0nerqtin and Profit and Loss Accounts MF' 00, 080

Dec. 31, 1 .une {, 1'72 Dec, 31, 1972 Dec. 31, 1371 June o, 1972 Dec. 31, 1972

1. Operatin: Xcccurits

BeEinning inventory 1,260' 82 1,711 Closing inventory 8C2 1,711 2,521 Purchases 678 1,99h 1,021 Sales 1,22h 71h3 211 2S2 115 Operatirs costs 129 107 h2 OperatirE subsidies 158 _ Financ-al' charges 1 34 60 Additional income 2 - Depreiitîtion 5 2 Financial income 14 1 Xoserves - 24 - Results 127 - 17 Results - 258 -

TOVXL 2,20n 2,963, 2,851 2,200 2,9u' 2,83i

2. Profit snd Loss .ccounts 17 Operatinilosses 258 Operatbq7- 127-rLt, Non-rocurrent. losses 14 Non-recurrent profits u7 h Price support subsidy 21' Profits for the year 113 24 21

TOEUSL 127 282 21 127 282 21

--Si O I 2~ o-I' ANNEX 11 Table 5

MALI

INTEGRATEDRURAL DEVELOPMENTPROJECT

Farm Implement Requirement, Costs and Medium-Term Credit

------Years------0 1 2 3 4 5

I. Quantities

Multi-cultivators - 1,300 2,050 2,550 3,100 3,750 Tynes - 950 1,700 2,195 2,740 3,385 Groundnut lifters - 400 600 745 930 1,125 Seeders - 1,000 1,670 2,100 2,570 3,080 Set of cart wheels - 650 1,025 1,280 1,550 1,875

II. Values (000,000 MF) 1/ (Full cost delivered to farmers)

Multi-cultivators - 64.7 102.1 127.0 154.4 186.7 Tynes - 4.6 8.2 10.5 13.2 16.2 Groundnut lifters - 2.5 3.8 4.7 5.9 7 n Seeders - 32.3 54.0 67.8 83.0 99.5 Cart wheels - 21.5 33.9 42.4 51.3 62.0 Cart boxes 2/ - 16.3 25.6 32.0 38.8 46.9

Total - 141.9 227.6 284.4 346.6 418.3

III. Financing

- Cash Sales 3/ - 16.3 25.6 32.0 38.8 46.9 - Down payment 4/ 5/ - 28.6 45.9 57.5 70.1 84.6 - Farmers' Repayment- - - 28.7 74.7 103.0 127.5 Net Medium-term Credit Total - 57.3 63.4 40.4 36.8 41.8 - Subsidies to SCAER - 39.7 64.0 79.8 97.9 117.5 Total 141.9 227.6 284.4 346.6 41b.3

1/ See Annex 11 Table 4 inputs price list.

2/ Made by local artisans at about MF 25,000 per unit.

3/ Includes card box costs.

4/ One-third of the value of implements.

5/ Two-year term loan. ANNEX Il Table 6

MAtI

INTECRATEDRURAL DEVELOPMENTfPROJECT

Seasonal Inputs Requirements. Costs and Seasonal Credit

------Years ------

(> (;roendnuts O i 2 3 4 5 6 7 Onwards

1, fuertijicers (P,05, 21.; tons) 2,350 3,195 3,590 4,585 6,165 6,490 6,690 6,825 6,825

2. foingicides (kg) _/ 3,560 4,830 6,070 7,560 9,480 10,980 11,310 11,550 11,550

3. l.icdacn fkg) 2/ 755 2,420 3,040 3,780 4,740 5,490 5,660 5,780 5,780

4 sers lotal (1t ani 4/ 10,950 11,500 15,190 17,250 18.960 19,980 20,560 21,020 21,020

Srrds probluerd by formers _/ 9,370 8,805 11,580 12,795 !4,010 14,275 15,760 16,260 16,260

I.rovexl -pîieda.-ds sc 1 bu O.A. 6/ 1,580 2,695 3,610 4,455 4,950 5,705 4,800 4,760 4,760

hu Porgi lcî/Mi lin

1. SciAs (tos, '7/ proniluvcI bu farît.rs( 1,540 1,575 3,165 3,305 3,445 3,560 3,600 3,645 3,670

. Igiit iL s (kg) B/ 575 905 1,675 2,175 2,740 3,270 3,470 3,555 3,590

1 I VAL19 r "'rI-as i tees on i noo,'0000MIF) 2/

I. cri lihirS

AL fr11 osi 11')/ 88.1 120.0 134.6 172.0 231.2 243.4 250.9 256.0 256.0

At offi,iai sclling price 94.0 127.8 143.6 183.4 246.6 259.6 267.6 273.0 273.0

ILofits 5.9 7.8 9.0 11.4 15.4 16.2 16.7 17.0 17.0

2. cutirAtiol ilFugieids-

At i,i1l -os I 3.2 4.4 5.5 6.8 8.5 9.9 10.2 10.4 104

Ai 1.ffiiial scIling pri,e 5.3 7,2 9.1 11.3 14.2 16.5 17.0 17.3 17.3

l'rofits 7.1 2.8 3.6 4.5 5.7 6.6 6.8 6.9 6.9

3. Liodane

At fuit -est 0.2 0.6 0.8 0.9 1.2 1.4 1.4 1.5 1.5

At: officiai seliog prite 0.4 1.2 1.5 1.9 2.4 2.7 2.8 2.9 2.9

Profits 0.2 0.6 0.7 1.0 1.2 1.3 1.4 1.4 1.4

4. .rondoont fouedauion Sends J4/

At fsil osi 10/ 75.0 128.0 171.5 211.6 235.2 271.0 228.0 226.1 226.1

At official selling price 54.5 93.0 124.5 153.7 170.8 196.8 165.6 164.2 164.2

SPbsidies (losses) 20.5 35.0 47.0 57.9 64.4 74.2 62.5 61.9 61.9

5. Sorghum Fongicides

At full cost 0.4 0,7 1.1 1.7 2.1 2.5 2.6 2.7 2.7

At official selling price 1.2 1.8 3.4 4.4 5.5 6.5 6.9 7.1 7.1

Profits 0.8 1.1 2.1 2.7 3.4 4.0 4.3 4.4 4.4

111TlREDlT REQU'IREMLNT12/

Total 148.5 220.8 268.1 337.1 417.4 456.4 433.2 437.2 437.2

Net Yearly Incremeni 148.5 72.3 47.3 69.0 80.3 39.0 (23.2) 4.0 -

!/ 65 kg/ha. 2/ 100 g of Thioral (red) for 100 kg of seeds. 3/ Lindane: 50 g for 100 kg of seeds. 4/ 100 kg/ha for the 28-206 ariety and 150 kg/ha for the 47-10 variety, in average 110 kg/ha S/ Serds prod-ed by farmers bot, improved and unimproved. 6/ î7oa,titsnecessarv for replacing seeds previously distributed and expanding area under improved secds. 7/ 13.5 kg/ha iii average; 10 kg/ha for millet and 15 kg/ha for sorghon. 8/ Abo-t 185 g of Thioral (green) for 100 kg of seeds. 9/ S4c Alnon fable , inputs price list. 10/ ncieldes SCAER finanrial and administrative costs, delivery charges and 57.conmission for "OperaLion, Arachide". Il/ Send srîppl and fina-cing is the responsibility of "Operation Arachide" while SCAER is respoosihll for other inputs. 12/ finl ferîllizers and improved seeds are supplied on credit. Official selling prices bave hein used for rompuîting credit requirement. MALI

INTEGRATEDRURAL DEVELOPMENTPROJECT

Summary of Incremental Farm Inputs Cost and Financing 1/ (MF Million)

Year 1 2 3 4 5 TOTAL

I. Equipment: Total 2/ 141.9 227.6 284.4 346.6 418.3 1,418.8 (unsubsidized)

Farmers' contribution 3/ 44.9 100.2 164.2 211.9 259.0 780.2

Medium term credit 4/ 57.3 63.4 40.4 36.8 41.8 239.7

Subsidies 39.7 64.0 79.8 97.9 117.5 398.9

II. Seasonal Inputs: Total (unsubsidized) 86.8 146.8 226.1 311.3 361.3 1,132.3

Farmers' contribution 3/ 3.3 79.4 130.3 203.8 287.7 704.5

Incremental credit 72.3 47.3 69.0 80.3 39.0 307.9

Subsidies 11.2 20.1 26.8 27.2 34.6 119.9

III. Total Parm Inputs (I & II) (unsubsidized) 228.7 374.4 510.5 657.9 779.6 2,551.1

Farmers' contribution 3/ 48.2 179.6 294.5 415.7 546.7 1,484.7

Incremental credit by SCAER 4/ (MT & Seasonal) 91.1 79.2 80.2 100.0 54,8 405.3

Seasonal credit by OA (seeds) 38.5 31.5 29.2 17.1 26.0 142.3

Subsidies 5/ 50.9 84.1 106.6 125.1 152.1 518.8

1/ Excluding spare parts and millet and sorghum seeds supplied by farmers. e > 2/ Includes implements and cost of cart boxes. 3/ Cash sales, down payment and repayment. ( 4/ Net incremental credit requirement. 5/ Mainly for seeds, taking into account profits on other inputs.

MALI

INTEGRATED RURAL DEVELOFMENT PROJECT

PROJECT COSTS (MF Million)

Reference TOTAL Foreign Exchange Tables 1 2 3 4 5 (.F Million) (US$'000) % MF (Million) US$ 000

I. MAIN SUBPROJECT

Buildings 2 103.3 392.6 404.6 6.0 - 906.5 1,813 29 262.9 526 Equipment and Furniture 2 6.6 73.0 71.7 3.9 - 155.2 311 60 93.1 186 Vehicles 3 104.7 160.9 30.7 46.7 119.1 462.1 924 60 277.3 555 Technical Assistance 4 191.3 263.0 227.8 173.8 164.3 1,020.2 2,040 80 818.8 1,638 Local Staff 1/ 5 14.1 63.3 85.6 92.5 97.0 352.5 705 - - _ Operating Costs 1/ 6 90.8 160.4 166.8 141.4 123.8 683.2 1,366 53 362.1 724

Total I 510.8 1,113.2 987.2 464.3 504.2 3,579.7 7,159 51 1,814.2 3,629

II. ANCILLARY SUBPROJECT

Rural tracks improvement 1/ 7 - 256.6 73.0 73.0 8.0 410.6 821 51 209.4 419 Functional literacy 1/ 8 55.8 86.8 42.8 - - 185.4 371 50 92.7 185 Research 9 34.7 44.7 56.3 45.3 25.7 206.7 414 48 99.2 198 Medical Assitance 1/ 10 - 39.1 39.2 38.1 55.3 171.7 343 45 77.3 155 Veterinary Assistance 1/ il 43.0 26.0 14.8 26.5 17.3 127.6 255 49 62.5 125 Evaluation pnit 12 - 25.4 38.6 38.2 54.6 156.8 313 43 67.4 135 Studies 2/ - - 45.0 - - - 45.0 90 100 45.0 90

Total Il 133.5 523.6 264.7 221.1 160.9 1,303.8 2,607 50 653.5 1,307 Total I and II 644.3 1.636.8 1,251.9 685.4 665.1 4,883.5 9.766 51 2.467.7 4,936

III. FARM INPUTS 2 13 228.7 374.4 510.5 657.9 779.6 2,551.1 5,103 67 1,718.8 3,437

IV. REVOLVING FMND I 14 24.2 14.0 4.7 8.9 _ 51.8 104 60 31.1 62

Total I to IV 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4 14,973 56 4,217.6 8,435

V. CONTINGENCIES

Price 59.6 261.4 304.9 402.9 582.0 1,610.8 3,222 56 896.5 1,793 Physical 44.8 101.1 88.4 67.6 72.2 374.1 748 56 210.7 421

Total Contingencies 104.4 362.5 393.3 470.5 654.2 1,984.9 3,970 56 1,107.2 2,214

GRAND TOTAL MF Million 1,001.6 2,387.7 2,160.4 1,822.7 2,098.9 9,471.3 - 56 5,324.8 US$ '000 2,003 4.775- 4.321 3,645 4.199 - 18.943 56 - 10,649

VI. IMPORT DUTIES AND TAXES 16 78.0 233.0 169.5 84.7 81.6 646.8 129.4

I/ Incremental Coats.

Y Cereal producer prices and marketing arrangements study and accourntancy assistance to OACV. - 3/ Incremental at unsubsidized costs. 4/ For staff motorcycles, bicycles and for blacksmith equipment.

April 25, 1974 ANNEX 12 Table 2

MALI

INTEGRATED RURAL DEVIELOPMENTPROJECT

Buildings and Equipment (MF Million)

Unit Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL Cost Unit Cost Unit Cost Unit Cost Unit Cost Unit Cost Unit Cost

A. BUILDINGS

2 1. Sheds: 180 m 9.8 1 9.8 1 9.8 2 100 m 5.9 2 11.8 1 5.9 3 17.7 5 35.4 2 75 m 4.3 19 81.7 1 4.3 2 8.6 22 94.6

Subtotal 103.3 10.2 26.3 139.8

2 2. Housing: 165 m 19.4 4 77.6 4 77.6 2 140 m 15.0 6 90.0 6 90.0 2 130 m 14.0 7 98.0 7 98.0 80 n2 8.9 12 106.8 3 26.7 15 133.5

Subtotal 372.4 26.7 399.1

3. Offices: H.Q. 200.0 1 200.0 1 200.0 5 Rooms 8.4 3 25.2 3 25.2 3 Rooms 5.4 5 27.0 5 27.0 2 Rooms 3.8 18 68.4 18 68.4

Subtotal 320.6 320.6

4. Garages & W.rkshops

Bamako 4.0 4.0 Banamba 6.0 6.0 Kita 20.0 20.0 Mahina 11.0 11.0 Kenieba 6.0 6.0

Subtotal 10.0 31,0 6.0 47.0

Total Buildings 103.3 392.6 404.6 6.0 906.5

B. FURNITURE & EOUIPMENT

2 1. Sheds: 75 m 0.3 19 5.7 1 0.3 2 0.6 22 6.6 2 100 m 0.4 1 0.4 1 0.4 3 1.2 5 2.0 2 180 m 0.5 1 0.5 1 0.5

Subtotal 6.6 0.7 1.8 9.1

2 2. Housing: 165 m 2.8 4 11.2 4 11.2 2 130 m 2.4 7 16.8 7 16.8 2 80 n 1.9 12 22.8 3 5.7 15 28.5

Subtotal 50.8 5.7 56.5

3. Offices: H.Q. 25.0 1 25.0 1 25.0 5 Rooms 2.0 3 6.0 3 6.0 3 Roons 1.2 5 6.0 5 6.0 2 Rooms 0.5 18 9.0 18 9.0

Subtotal 46.0 46.0

4. Garages & Workshops

Bamako 9.1 9.1 Banamba 3.9 3.9 Kita 11.7 11.7 Mahina 6.5 6.5 Kenieba 3.9 3.9

Subtotal 13.0 18.2 3.9 35.1

5. Equipment for Training 8.5 - _ 8.5

Total Furniture & Equipment 6.6 73.0 71.7 3.9 155.2

GRANDTOTAL 109.9 465.6 476.3 9.9 1,061.7

September 20, 1973 MALI

INTEGRATEDRURAL DEVELOPHENT PROJECT

VEHICLES (MF Million) Unit Price Import A. HEAD OFFICE TYPE inc. Imp. DutiÉs Duties 1 2 3 4 5 TOTAL

General Manager Station wagon 2.5 0.6 1 2.5 1 2.5 2 5.0 Deputy General Manager Station wagon 2.5 0.6 1 2.5 1 2.5 Deputy Technical Manager Pick-up 2.2 0.5 1 2.2 1 2.2 2 4.4 Deputy Ox-Drawn Cultivation Head Pick-up 2.2 0.5 1 2. ' 1 2.2 2 4.4 Chief Personnel Light wagon 1.6 o.4 1 1.6 1 1.6 2 3.2 Chief Accountant Light wagon 1.6 0.4 1 1.6 1 1.6 2 3.2 Chief Clerk Light wagon 1.6 04 1 1.6 1 1.6 2 3.2 Adminis trator Light wagon 1.6 0.4 1 1.6 1 1.6 Mechanical Engineer Four wheel drive 3 6 1.3 1 3.6 1 3.6

- - - 4 7.9 2 3.8 1 2.5 5 9.5 3 7-4 15 31.1

B. FIELD

Sector Light lorries 3.3 G.8 4 13.2 1 3.3 - - 4 13.2 1 3.3 10 33.0 Sector, sub-sector chiefa,) 4-wheel drive 3.6 1.3 1 3.6 22 79.2 6 21.6 2 7.2 22 79.2 53 1y0.8 ox-drawn equipment heads, ) pick-up 2.2 C.5 h 8.8 10 22.0 2 h.4 h 8.8 10 22.0 30 66.0 garage head.

9 25.6 33 104.5 8 26.0 10 29.2 33 104.5 93 289.8

Subtotal 13 33.5 35 108.3 9 28.5 15 38.7 36 111.9 108 320.9

C. LORRIES 7T 7.9 2.0 8 63.2 h 31.6 12 94.8

Subtotal 21 96.7 39 139.9 9 28.5 15 38.7 36 111.y 120 415.7

D. V?HICLES FOR EXPATRIATES 3 8.0 7 21.0 1 2.2 3 8.0 2 7.2 16 46.4 (see Table 3) D

GRANJ)TOTAL VEHICLES 24 104.7 h6 160.9 10 30.7 18 46.7 38 119.1 136 h62.1

October 6, 1973 ANNE2 12 Table 4

MALI

INTRATSD niIL DEVEIDPMENT PP0JSOT

Technicai Assistance (NF Million)

A. STAFF Basic Year1y Emoluments 1 2 3 4 5 TOTAL 1. Sead Office

Adviser te G.M. 22.50 1 22.50 1 22.50 - - - Head teohnical department 20.00 1 20.00 1 20.00 1 20.00 1 20.00 1 20.00 Head ox-drawn coltivation 13.00 1 13.00 1 13.00 1 13.00 Administrator 15.50 1 15.50 1 15.50 - - - 2 31.00 Eqoip.ent adviser 15.50 - 1 15.50 1 15.50 - - 2 31.00

2. Field

Teohiioal advisers (sone) 15.50 4 62.00 5 77.50 5 77.50 3 46.5o 3 46.50 20 310.00 TechnicaI advisers (sector) 13.30 1 13.30 2 26.60 2 26.60 2 26.60 1 13.30 e 106.4C

Subtctal 9 146.30 12 190.60 10 152.60 7 106.10 6 92.8C 44 688.43

3. Supporting Mission

- Technical 2.70 2.70 2.70 2.70 2.7C 13.50 - TraLning 3.30 3.30 3.30 3C30 3.30 16.50 - IPiO 3.10 3.10 3.10 3.1C 3.10 15.50

Subtotal 9.10 9.10 9.10 9.10 9.10 45.50

Subtotal 155.40 199.70 161.70 115.20 101.90 733.90

Incre.eot 7% comp. 10.90 29.00 36.40 35.90 41.00 153.20

Sintstai 166.30 228.70 198.10 151.10 142.Y0 8B7.10

Agency Feso 15% 25.00 34.30 29.70 22.71 21.40 133.10

Total Staff 191.30 263.00 227.80 173.80 164.30 1,020.20

B. VEHIfLAS Unit Price Type C(ic. impert Import 1. Head Office duties) Duties

Adviser to G.M. Station uagon 2.50 0.60 - - SeaS technical dept. Pick np 2.20 0.50 1 2.20 _ - 1 2.20 _ 2 4.4° :lead o-dras colt. Pick up 2.20 0.50 - - 1 2.20 - - 1 2.20 Adm-nistrator Light car 1.60 0.40 ------Equipsent adviser 4 wheel drive 3.60 1.30 - 1 3.60 - - - 1 3.60

2. F-eld

Technical advisers Pici np 2.20 0.50 1 2.20 3 6.60 - 1 2.20 - 5 11.00 4 eheel drive 3.60 1.30 1 3.60 3 10.80 - 1 3.60 2 7.20 7 25.20

Total 3 8.00 7 21.00 1 2.20 3 8.oo 2 7.20 16 46.40

3. Isort DSUties Pick up 0.50 0.50 2 1.00 3 1.50 1 0.50 2 1.00 - 8 4.00 4 ,heel drive 1.30 1.30 1 1.30 4 5.20 - 1 1.30 2 2.60 8 10.40

Total Vehicles 3 2.30 7 6.70 1 0.50 3 2.30 2 2.60 16 14.40

-. OPSRATING COSTS

1. Rent and Upkep Heouses

a) Head office 1 i.80 1 1.80 - - _ 2 3.62

Adviser to G.M. 1.80 1 1.80 1 i.80 - - - 2 3.60 Head technical dept. i.80 1 1.80 1 1.80 1 1.8C 1 1.80 1 i.80 5 9.02 Hesd os-dsrwn colt. 1.56 1 1.56 il 1.56 1 1.56 1 1.56 1 1.56 5 7.a2 Administrator 1.56 1 1.56 1 i.56 - - - 2 3.12 Equipm.ent adviser 1.56 - 1 1.56 1 1.56 - - 2 3.12

Subtoctl 4 6.72 5 5.28 3 4.92 2 3.36 2 3.36 16 26.64

b) Field

Technical advisers Carne) 0.60 4 2.40 5 3.00 5 3.00 3 1.80 3 1.80 20 12.00 Technical adviser Csotor) 0.30 1 0.30 2 o.60 2 0.60 2 o.60 1 0.30 a 2.40

Subtotal - 5 2.70 7 3.60 7 3.60 5 2.40 4 2.10 28 14.40

Subtotal 9 9.42 12 11.88 10 8.52 7 5.76 6 54.6 44 41.04

2. Vehicles Maintenaece and Operation cost/ke cost per yeer (5F) (MC'FOO) o) Hesd office

Adviser to O.M. (St.W) 70 1.75 1 1.75 1 1.75 - - - 2 3.50 Head technical dept. (P.U.) 70 1.75 1 1.75 1 1.75 1 1.75 1 1.75 1 1.75 5 8.75 Head ox-drawn cilt. (P.U.) 70 1.75 1 1.75 1 1.75 1 1.75 1 1.75 1 1.75 5 8.75 Administrator (L.C.) 50 1.25 1 1.25 1 1.25 - - - 2 2.51 Mechanical engineer (4 W.D.) 90 2.25 - 1 2.25 1 2.25 - - 2 4.50

Subtotal - - 4 6.5o 5 8.75 3 5.75 2 3.50 2 3.50 16 28.00

b) Field

Pick up 70 1.75 1 1.75 3 5.25 3 '5.25 2 3.50 2 3.50 il 19.25 o 4 eheel drive 9O 2.25 4 9.00 4 9.00 4 9.00 3 6.75 2 4.50 17 38.25 .

Subtotol 5 10.75 7 14.25 7 14.25 5 10.25 4 8.00 28 57.50

Subtotal 17.25 23.00 20.00 13.75 11.50 85.50

Tbtal Oporating Costs 26.67 34.88 28.52 19-51 16.96 126.54

GRAND TOTAL 225.97 318.88 258.52 201.31 188.46 1,193.14

Octeber 6, 1973 ANNEX12 Table 5

MALI

INTmRATE.0 RURALDKVELOPMENT PROJEC T

LOCALSTAFF

1 Tm-p =000) Annua I ~~~~~~1 A. H. Q. Salarv I 2 3 4 s Total

General mmnager 1,920 1 1,920 1 1,920 1 1,920 1 1,920 1 1,920 5 9,600 Dy general manager 1,500 1 1,500 1 1,500 1 1,500 1 1,500 1 1,500 5 7,500 Dy technical assistant 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300 Asst. technical manager 1,1140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700 Dy ox-drani cultivation head 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300 Chief personnel 1,260 1 1,260 1 1,260 1 1,260 .1 1,260 1 1,260 5 6,300 Chief accountant 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300 Accountant 1,140 - - 1 1,140 1 1,140 1 1,140 1 1,140 4 4,560 Chief clerk 1,140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700 Chief statistics 1,140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700 Book-keepers 630 8 5,040 8 5,040 a 5,040 8 5,040 a 5,040 40 25,200 Secretaries (E) 3,0C0 2 6,000 1 3,000 - _- 3 9,000 Secretaries 420 2 840 4 1,680 6 2,520 6 2,520 6 2,520 24 10,080 Drivers 400 10 4,000 9 3,600 9 3,600 8 3,200 8 3,200 44 17,600 Office messengers 145 4 580 h 580 4 580 4 580 4 580 20 2,900 Watchmen 145 8 1,160 8 1,160 8 1,160 8 1,160 8 1,160 40 5,800 Laborers 100 10 1,000 10 1,000 10 1,000 10 1,00O 10 1,000 50 5,000 Audio visual technician 1,150 1 1,150 1 1,150 1 1,150 1 1,150 1 1,150 5 5,750

Total H. Q. Staff 54 31,650 55 30,230 56 28,070 55 27,670 55 27,670 275 145,290

B. Field

Sector chiefs 1,260 6 7,560 8 10,080 9 11,340 9 11,340 9 11,340 41 51,660 Sub-sector chiefs 745 18 13,410 23 17,135 26 19,370 26 19,370 26 19,370 119 88,655 Basic sector chiefs 240 191 45,840 278 66,720 308 73,920 308 73,920 308 73,920 1,393 334,320 Book-keepers 630 23 14,490 28 17,640 35 22,050 41 25,830 46 28,980 173 108,990 Ox-drawn cultivation agents 630 8 5,040 10 6,300 il 6,930 il 6,930 il 6,930 51 32,130 Secretaries 420 8 3 360 10 4,200 il 4,620 il 4,620 il 4,620 51 21,420 Drivers 4°° 38 15,200 54 21,600 54 21,600 54 21,600 54 21,600 254 101,600 Watchmen 145 23 3,335 29 4,205 34 4,930 34 4,930 34 4,930 154 22,330 Messengers 145 23 3,335 29 4,205 34 4,930 34 4,930 34 4,930 154 22,330 Laborers 100 28 2,800 34 3,400 40 4,000 47 4,700 53 5,300 202 20,200

Total field staff 366 114,370 503 155,485 562 173,690 575 178,170 586 181,920 2,592 803,635

C. Garages and borkshops

1) H. Q. Technical inspector 1,260 - - 1 1,260 1 1,260 1 1,260 1 1,260 4 5,o40 Clerks (stores-accounte) 420 - - 1 420 2 840 2 840 2 840 7 2,940 2) Field Senior garage chiefs 630 - - - - 1 630 2 1,260 2 1,260 5 3,150 Junior garage chiefs 480 3 1,440 3 1,440 3 1,440 3 1,440 3 1,440 15 7,200 Mechanics 420 5 2,100 5 2,100 8 3,360 10 4,200 10 4,200 38 15,960 Electricians 420 1 420 1 420 2 840 2 840 2 840 8 3,360 Mechmic assistant 240 7 1,680 8 1,920 9 2,160 10 2,400 10 2,400 44 10,560 Storeman/clerk 240 - - 2 480 2 480 2 480 2 480 8 1,920 Pump attendant 145 3 435 3 435 4 580 5 725 5 725 20 2,900 Watchmen 145 - - 3 435 4 580 4 580 5 725 16 2,320 Laborers 100 - - 3 300 4 400 4 400 5 500 16 1,600

Total garage and workshops staff 19 6,075 30 9,210 40 12,570 45 14,425 47 14,670 181 56,950

Total 439 152,095 588 194,925 658 214,330 675 220,265 688 224,260 3,048 1,005,875

D. Social Charges 15% 22,815 29,240 32.150 33.040 33.640 150,885

GRANDTOTAL 174,910 224,165 246,480 253,305 257,900 1,156,760

Coet of ongoing project 1' 160,860 160,860 160,860 160,860 160,860 804,300

Incremental costs 14,050 63,305 85,620 92,445 97,040 352,460

1/ H 139,874,00G plus 15% social charges.

July 26, 1973 ANNS 1 2 Table 6

MALI

INTEGRATED RURAL DEVRLOPMENTPROJECT

Operating Eenses {MFMMllion) TOTAL A. GENERAL EXPENSES 1 2 3 4 5 (1 to 5) 1. Head Office

Stationery, stamps, telephone 9.6 12.6 12.6 12.6 12.6 60.0 Electricity, gas, water 2.8 3.0 3.0 3.0 3.0 14.8 Upkeep office 1.0 1.5 2.0 2.0 2.0 8.5 housesb 1.0 1.5 2.5 2.5 2.5 10.0 Training 10.5 22.5 23.5 10.5 10.5 77.5 Medical expenses 1.5 1.7 2.0 2.0 2.0 9.2 Local travels 1.4 1.5 1.6 1.6 1.6 7.7 Audit 18.0 16.0 14.0 12.0 60.0

Subtotal 27.8 62.3 63.2 48.2 46.2 247.7 2. Field

Stationery, stamps, telephone 1.5 2.0 3.0 3.0 3.0 12.5 Slectricity, gas, water o.6 1.0 2.0 3.0 3.0 9.6 Upkeep houses, offices, sheds 1.0 1.5 2.0 2.5 3.0 10.0

Subtotal 3.1 4.5 7.0 8.5 9.0 32.1

3. Garages

Stationery, stamps, telephone o.5 1.0 1.5 1.5 1.5 6.0 Electricity, gas, water 0.5 1.0 2.0 2.5 2.5 8.5 Ulpkeep buildings 1.0 2.0 3.0 3.5 4.0 13.5 Materials, tools, fuels, lubricants lubricants 2.0 3.0 4.0 5-0 6.o 20.0

Subtotal 4.0 7.0 10.5 12.5 14.0 48.0

Total general expenses 34.9 73.8 80.7 69.2 69.2 327.8 B. VEHICLES (Maintenance & Operation)

MF/kl NF'OOO/y

1. Head Office (25,000 kam/y)

Station wagon 70 1,750 2 3.5 2 3.5 2 3.5 2 3.5 2 3.5 10 17.5 Pick up 70 1,750 2 3.5 2 3.5 2 3.5 2 3.5 2 3.5 10 17.5 Light wagon 60 1,500 3 4.5 3 4.5 3 4.5 4 6.0 4 6.0 1,7 25.5 4 wheel drive 90 2,250 - - - 1 1 2.2 1 2.3 2 4.5

Total head office vehicles M x 0 7 11.5 7 11.5 7 11.5 9 15.2 9 15.3 39 65.0 2. Field and Garages (20,000 kle/y)

Pick up 70 1,750 8 14-o 16 28.0 16 28.0 16 28.0 16 28.0 72 126.0 4 wheel drive 90 2,250 22 49.5 23 51.7 29 65.3 30 67.5 30 67.5 134 301.5 Light lorries 110 2,750 4 11.0 5 13.7 5 13.7 5 13.8 5 13.8 24 66.o Subtotal 34 74.5 44 93.4 50 107.0 51 109.3 51 109.3 230 493.5

Subtot al 86.0 104.9 118.5 124.5 124.6 558.5

Reduction in cost following roads improvements % 5 10 20 -

86.0 104.9 88 112.6 112.1 99.7 515.3

Motorcycles 90 63 5.7 74 6.7 88 7.9 99 8.9 109 9.8 433 39.0 Bicycles 30 155 4.6 171 5.1 252 7.6 265 8.0 260 7.8 1;103

10.3 11.8 15.5 16.9 17.6 72.1

Lorries, sundry transport (4,ooo im/y) 130 520 57 29.6 61 31.7 56 29.1 49 25.5 47 24.4 270 140.0 Reduction in cost following roads improvesente % 1.0 20.0 30.0 roads improvements Total field and garages vehicles M x 0 29.6 31.7 26.2 20.4 17.1 125.0

Total vehicles M x 0 125.9 148.4 154.3 149.4 134.4 712.4

Total 108.8 210.2 222.0 218.6 203.6 1,035.2

Expenses on ongoing project 96.7 96.7 96.7 96.7 96.7 483.5

Incremental cost 84.1 113.5 125.3 121.9 106.9 551.7

C. OPERATING EPENSES FOR EXPATRIATES 26.7 34.9 28.5 19.5 16.9 126.5 (see Table 4)

GRAND TOTAL 90.8 160.4 166.8 141-4 123.8 683.2

September 20, 1973 MALI

INTERATED RURALD2ELMOPM$NT PROJECT

RURALTRiACKS IMPROVDOENTS (HF' 000)

Price/unit (includin import duties) duties/unit 1 2 3 4 5 Total

1. Vehicles and Equipment

Tipper trucks 7T 7,500 1,500 17 127,500 17 127,500 Initial stock of spare parts 16,000 3,000 - 16,000 16,000 Graders(120 HP) 17,000 3,500 2 34,000 2 34,000 Small equipmrnt and tools 3,000 500 3,000 3,000 h wheel drive 3,600 1,300 1 3,600 3,600 Subtotal 184,100 184,100

2. Staff (annual salary)

Road inspectors 1,260 1 1,260 1 1,260 1 1,260 3 3,780 Clerk/typist/bookeeper 420 2 840 2 840 2 840 6 2,520 Gang leaders 480 h 1,920 4 1,920 4 1,920 4 1,920 16 7,680 Mechanics 420 4 1,680 4 1,680 4 1,680 12 5,040 Driver 400 1 400 1 400 1 400 3 1,200 Watchmen 145 8 1,160 8 1,160 8 1,160 24 3,480 Laborers 100 68 6,800 68 6,800 68 6,800 32 3,200 236 23,600 Casuals 3.000 1.000 1,000 1,000 6.000 Subtotal 3,000 15,060 15,060 15,060 5,120 53,300

3. Operating Expenses

Tippertrucks (20,000 km/y) RF/lm 130 MF 2, 6 00,000/y 7,000 17 44,200 17 6 44,200 17 44,200 4 10,400 150,000 Graders(200 days/y) MF/d 33,500 MF ,700,000/y 2 13,400 2 13,400 2 13,400 1,480 41,680 Bulldozers30 days/y) MF/d 77,000 MF 2 ,300,000/y 2 4,600 2 4,600 5 2 4,600 13,800 4 wheeldrive (25,000 km/y) MF/km 90 MF 2,2 0,000/y 1 2,250 1 2,250 1 2,250 6,750 Upkeep and renewal small equipment and tools 500 1,000 1,000 500 3,000 Construction materials 2,000 2,000 2,000 500 6,500 Office expenses 500 500 500 1,500

Subtotal 7,000 67,450 67,950 67,950 12,800 223,230 Total 10,000 266,610 83,010 83,010 18,000 1460,630

Expenses on ongoing project 10,000 10,000 10,000 10,000 10,000 50,000 '

GRANDTOTAL - 256,610 73,010 73,010 8,000 410,630 CDX

4. FAC Road Proiect L1 600,000 331,000 - - - 931,000

/L This FAC grant would rehabilitate438 km of type B road in the Western sectors of the project erea. The cost of this FAC program is not included in the cost of the proposed IRD project which only covers spot improvements on rural tracks. It is however mentioned for record as it was specially designed to facilitate OA activitiesin an area lacking in road communications. Similar IDA road projects which would likewise assist in the project development are also excluded from the cost of the proposed IRD project.

December 30, 1973 MALI

INTEGRATEDRURAL DSVELOPMENT PROJECT

FUNCTIO;SALLITEACY (MF' 000)

Unit Cost 1 2 3 4 5 TOTAL

1. Evaluation Study - 45,000 - - - 45,000

2. Investments:

Equipment 36 490 17,640 255 9,180 200 7,200 - - 945 34,020

Vehicles 6,360 - - - - 6,360

24,000 9,180 7,200 - - 40,380

3. Training:

2 animatorsper center 9 980 8,820 510 4,590 400 3,600 - - 1,890 17,010 h. Technical Visits

By expatriates 10,000 9,000 9,000 - - 28,000 5. Staff

HQ - zones and regions 28,000 32,000 34,000 - - 94,000

6. Recurrent Expenditure

HQ - zones and regions 18,000 20,000 22,000 - - 60,0oo

88,820 119,770 75,800 - - 284,390

7. Expenses on Ongoing Project 33,000 33,000 33,000 - - 99,000

8. IncrementalCost 55,820 86,770 42,800 - - 185,390

July j 1973

vo ANNZX12 Table 9

MALI

I;TEGRATEDFr33kAL D5SVELOPMENT PZOJZT Agriculturaiesearcn Z,OO)

A. CEfLsALSASEARCH 1 2 3 4 5 Total

1. Vehicles

Pick ap 2,200 1 2,200 - _ _ _ _ 2,202

2. Soostatacos

Land prepara'ton, fPncie.g, sheds 2,500 1,000 3,50C 3. q:pr"et - Fornltre 500 1,000 1,500

Z3. Staff

A-csstfa 1,14Z 1 1,140 1 1,40C 1 1,140 1 1,140 1 1,14G0 5,700 Heodesoan 2L'J 14 860 4 86088o 4. 86880 4, 8 144 862 20 4,30G ittcrohn 1145 4 580 4 580 4 520 J 580 4 580 22 2,gr ,, Lottr 100 8 Boo 8 800 6 800 8 8o0 H Bo 14: Z,000 3siuais 50 40 2,000 Co 2,000 42 2,000 4O 2,000 40 2,000 20^ 12,000

Suroot-l 5,380 5,380 5,380 5,380 5,380 26,900

j . 0peraa:r g 3xp enses

Pot ut (10,0 C kr/y) 4F/Ie/y 70 p.y. 1 700 1 700 1 700 1 700 1 700 3,500 600 60C 6uO 600 60C 3,0 ZO Feeaailzera,s,sedeù, fuLn2 ,icides etc.

.iacttt 1,300 1,30v 1,300 1,300 1,3OÙ ,g506

.ozi ceea rlsearhe11,880 8,680 6,630 6,680 6 F80 4u,60û

r hG'.ZND!3.1 n lSFURCIJ k. 0600012AKAAOz

3 Z`;ck p 2,200 1 2,200 - - 1 2,200eo,143 -

_. autcceSt - oFrnitur- 1,700 1 1 1 O1,700 *. Staff

I0HO fessorval a.: 1stance 8,00e 8,030 8,00f #4 oor 5,000 8,0" ,4u,uuO L. ho-rat-ry :essistasto O5c/y 6 3,000M 3,002 6 3,002 6 3,200 f 3,30') 1C5, Cleek 1420/y 1 1420 1 020 1 20) 1 1422 1 1420: 2, I Oriver 1400/y 1 400 1 LOO 1 400 1 40C 1 LOO ?,tr Watcnma,ca 1J5/y 1 1J5 I 145 1 î145 1 145 1 1LS 725 Lator 100/y 7 700 / 702 7 700 7 700 7 702 3,5_u

12,665 12,665 12,665 13,665 1e, (5 e3,3l5

Operticg zrpenses

Pick up - (20,ÙOU kt/y) MF/km 70 1,400/y 1,4uO 1,LUV 1,4LU 1,1400 1,i4D. 2, W Local transport 5O` 500 5:5502 503 2,50' Office erpe-ses 500 500 500 500 5VJ 50:J Hoo-es, upkeep, rnt, electrieaty 2,000 2,3u0 2,CûO 2,000 c,000 1J,OJU Sr.ll equipment LOO 400 400 400 430 2,000 Laborotoey ee0 uieeets 400 aJOO 401 400 40lu 2,> 0 Seeda, fertalleera, foagicioe etc. 200 200 20u 203 200 1,uJOU 02.oesiaoo oea fo,.ar analysis 700 700 700 300 3,530 6,300 6,300 6,300 6,320 6,363 31,5u0

Totai Groandeut Reee.,ch 22,865 18,95 1î8,965 21,165 S,95e5 10,925

C. PEDOLOGY

1. Vehicles

4 wheel drive 3,600 3,600 3,800

2. mIn.ent 350 150 500

3. Staff IRAT TecenicalI asciosacce 9,000 18,0@0 9,0Ou 36,JO0 Assistant 1,140 1,114 2,280 1,140 4,560 Driver 400 400 Bou 400 1,60u Labor 100 200 500 200 800

10,740 21,480 10,740 142,960

4. Operoting Fxpenses

4 wheel drive (23,000 km/y) M1F/em90 2,250/y 1,125 2,250 1,125 4,500 Analyses 1,200 2,400 1,200 4,800 Report oad top preparation 4,403 4,400 8,800

2,325 9,050 6,725 15,100 ,|

Total Pedology 17,015 30,680 17,465 65,160

GkANDTOTA.L 314,7345 44,660 56,325 45,31û 25,645 206,685

Septenber 4, 1973 MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Medic al Assistance (MF '000)- Unit Cost 1 2 3 1. Vehicles t 5 TOTAL

h wheel drive 3,600 - 3 10,800 2 7,200 (3) 10,800 8 28,800 2. Buildings

Dispensaries 5,000 5,000 10,000 15,000 35,000 3. Equipment

Technical 1,800 600 Camping 2,400 1.000 500 1,500

2,800 600 500 3,900 4. Staff

Governnent stafî 10,432 10,432 10,432 10,432 10,432 52,160 Assistants 405 - 6 2,430 8 3,240 10 4,050 10 4,050 34 13,770

10,432 12,862 13,672 14,482 14,482 65,930 5. Operation

4 wheel drive (25,000 km/y) MF/ln 90 3 6,750 5 11,250 Motorcycles 5 11,250 5 11,250 18 40,500 MF/m 7,500 6 540 8 720 10 Bicycles 900 10 900 314 3,060 MF/m 2,500 18 540 24 720 30 900 30 Upkeep existing buildings 900 102 3,060 4,750 4,750 4,750 4,750 New buildings 4,750 23,750 250 500 1,000 1,750 3,500 4,750 12,830 17,940 18,800 19,550 73,870 6. Medicines 10,000 10,000 10,000 10,000 40,000 Total 15,182 54,292 54,412 53,282 70,332 247,500 7. Expenses on Ongoing Project 15,182 15,182 15,182 15,182 15,182 75,910 INCREMENTALCOSTS - 39,110 39,230 38,100 55,150 171,590

b 7M

October 7, 1973 INTEGRATEDRURAL DEVELOPIMENT PROJECT

Veterinary Assictance (MF'000)

Year: 1 2 3 4 5

Ur.it Cost Total

1. Construction: Spray races 1,400 7 9,800 2 2,800 9 12,600

2. Vehicles

Pick up 2,200 2 4,400 1 2,200 2 4,400 1 2,200 6 13,200 4 wheel drive 3,600 i 7,200 2 7,200 4 14,400

11,600 2,200 11,600 2,200 27,600

3. Equipment

Freezers 400 7 2,800 2 800 9 3,600 Small equipment & ice boxes 60 il G60 3 180 2 120 3 180 4 240 23 1,380

- 3,460 980 120 180 240 4,980

4. Staff (An. Sal.)

Veterinary assistants j! 405 4 1,620 5 2,025 5 2,025 5 2,025 5 5,025 24 9,720 Dressers 1/ 321 3 963 4 1,284 4 1,284 4 1,284 4 1,284 19 6,o99 Vaccinators 2/ 101 8 808 10 1,010 10 1,010 10 1,010 10 1,010 48 4,848

- 3,391 4,319 4,319 4,319 4,319 20,667

5. Operation

Vehicles (25,000 km/y) MF/kmc 90 4 9,000 5 11,250 5 11,250 5 11,250 5 11,250 24 54,000 Motorcycles MF/month 7,500 il 990 14 1,260 14 1,260 14 1,260 14 1,260 67 6,030 Upkeep spray races & sundries - 200 300 400 500 600 2,000

10,190 12,810 12,910 13,010 13,110 62,030

6. Medicines - 7,100 5,500 12,600

Subtotal 45,541 28,609 17,345 29,015 19,869 140,477

7. Sxpenses on Ongoing Project 2,583 2,583 2,583 2,583 2,583 12,915

Incremental Costs 42,958 26,026 14,766 26,526 17,286 127,562

Taxes: Vehicies Pick up 500 2 1,000 1 500 2 1,000 1 500 6 3,000 4 vheel drive 1,300 2 2,600 2 2,600 - h 5,200

3,600 500 3,600 500 8,200

Squipment: Freezers 100 7 700 2 200 9 900 Small equip. 15 11 165 3 45 2 30 3 45 4 60 23 345

- 865 245 30 45 60 1,245

4,465 145 30 3,645 560 9,445

1/ Malian budgJet 2/ On contract

JuIy 7, 1973 MAL I

INTEGRATED RURAL DEVELOPMENT PROJECT

Evaluation Unit (MF'0O0)

1 2 3 4 5 TOTAL

I. STAFF (Annual Salaries)

A- H.Q. Economist 15,000 - 1/2 7,500 1 15,000 1 15,000 1 15,000 3.5 52,500 Research Assistant 1,140 - - - - - I 1,140 1 1,140 Statistician 1,000 - 1/2 500 1 1,000 1 1,000 1 1,000 3.5 3,500 Clerk 630 - 1/2 315 1 630 1 630 1 630 3.5 2,205 Typist 420 - 1/2 210 1 420 1 420 1 420 3.5 1,470

Total A - 8,525 17,050 18,190 18,190 60,815

B-Field Supervisors 900 - I 900 2 1,800 2 1,800 3 2,700 8 7,200 Enumerators 500 - 10 5,000 20 10,000 20 10,000 30 15,000 80 40,000 Clerk/Typist 420 - 1 420 2 840 2 840 3 1,260 8 3,360

Total B - 6,320 12,640 12,640 18,960 50,560

Total I - 14,845 29,690 29,690 37,150 111,375 Unit Price ) (Import) II VEHICLES (Ind. Imp. duties) (duties) Station Wagon 2,500 600 - 1 2,500 - - I 2,500 2 5,000 Light Water 1,600 400 - 2 3,200 - - 3 6,800 5 8,000 Office Furn. & Equipment - - - - 500 400 - - - - 900

Total II - 6,200 400 - 7,300 13,900

III. OPERATING COSTS Rent and upkeep House - 780 1,560 1,560 1,560 5,460 Rent and upkeep Offices - 300 600 600 700 2,200 Stationery, Stamps, Telephone - 100 200 200 200 700 Maintenance & Operation - -Station Wagon(MF 1.75 million/Y) - 875 1,750 1,750 1,750 6,125 -Light Wagon (MF 1.5 Million/Y) - 1,500 3,000 3,000 4,500 12,000 -Bicycles (MF 90,000/Y) - 450 900 900 900 3,150 -Motorrycles (MF 30,000/Y) - 150 300 300 300 1,050 Sundries _ 200 200 200 200 800 N

Total III - 4,355 8,510 8,510 10,110 31,485

GRAND TOTAL - 25,400 38,600 38,200 54,560 156,760

December 28, 1973 AN1NEX12 Table 13 MALI

INTEGEATED RURAL DEVELOPMFNT PROJECT

IncrementalFarm Inputs 1/ Cost and Financing (MF Million)

A) Costs 1 2 3 4 5 Total Seasonai Inputa S o Inuiters 31.9 hi6.5 83.9 1h3.1 155.3 460.7 Seeds 53.0 96.5 136.6 160.2 196.0 642.3 Fungicides, Insecticides 1.9 3-8 5.6 8.0 -0.0 29.3 Sub Total 86.8 146.8 226.1 311.3 361.3 1132.3

Far, Imalemente Cart boxe-2/ 16.3 25.6 32.0 38.8 46.9 159.6 Implements 125.6 202.0 252.4 307.8 371.4 1259,2 Sub Total 141.9 227.6 284.4 346.6 418.3 1418.8 GrandTotal 228.7 374.4 510.5 657.9 779.6 2551.1

B) Financing 3/ 3Sales/Parchase on Cash- 19.6 32.7 42.7 54.o 65.7 214.7 MediumnTern Credit Farmers'down payYments 28.6 45.9 57.5 70.1 84.6 286.7 Farmers'Repayments 28.7 74.7 103.0 127.5 333.9 NIediumTerm Credit/SChER 57.3 63.4 40o4 36.8 htî.8 239.7

3ub Total 85.9 138.0 172.6 209.9 253.9 860.3

SeasenalCredit Farmera' Re-rdnaent - 72.3 119.6 1R8.6 268.9 649.4 Met Credit/SCAER 33-8 15.8 39.8 63.2 13.0 165.6 Net CreditCA 38e5 31.5 29.2 17.1 26.0 142.3 Sub Total 72.3 1-19.6 188.6 268.9 307.9 957.3 Subsidies Impements V 39.7 64.o 79.8 97.9 117.5 398.9 OeasonalInput - 11.2 20.2 26.8 27.2 34.6 119.9

3ub Total 50.9 84h1 106.6 125.1 152.1 518.8

Grand Total 228.7 374h4 510.5 657.9 779.6 2551.1

1/ Full cost deliveredto farmers; excludesspare parts for ir.plementsand self suppliedseeds. Details are in ANIEX 11, Tables5 and 6. 2/ Cart boxes are made by village craftsmen 3/Valueof cart boxes and actual sale price for fungicides/insecticides. LV Net subsidiesmainly for seeds,taking into accountprofits on otherinputs. Noveinber19, 1973 HALI

INTBGRATED RURAL DEVELOPMENTPROJECT

Revol ingFun (MFI'OCO()

Unit Cost 1 2 3 4 5 Total A. Vehicles: Motorcycles 118 57 6,726 34 4,012 76 8,968 47 5,546 86 10,148 300 35,400 Bicycles 36 93 3,348 96 3,456 180 6,480 115 4,140 175 6,300 659 23,724

Total 10,074 7,468 15, 448 9,686 16,448 59,124

Disbursements 1/ 17,542 15,448 9,686 16,448 - 59,124 Refunds 2/ 5,037 8,771 11,458 12,567 13,067 50,900

Credit 12,505 6,677 (1,772) 3,881 (13,067) 8,224

B. Blacksmith Equipment

Phase 1 30 33 990 62 1,860 77 2,310 81 2,430 95 2,850 348 10,440 Phase 2 150 33 4,950 30 4,500 56 8,400 69 10,350 73 10,950 261 39,150 Phase 3 200 7 1,400 6 1,200 11 2,200 14 2,800 38 7,600

Total 66 5,940 99 7,760 139 11,910 161 14,980 182 16,600 647 57,190

Disbursements 1/ 13,700 11,910 14,980 16,600 _ 57,190 Refunds 2 1,980 4,566 8,537 11,550 14,496 41,129

Credit 11,720 7,344 6,443 5,050 (14,496) 16,061

GRANDTOTAL 24,225 14,021 4,671 8,931 (27,563) 24,285

Revolving Fund 24,225 14,021 4,671 8,931 51,848

1/ Disbursements one year in advance (years 1 and 2 together in year 1).

2/ Refunds: Motorcycles monthly allowance MF 7,500, monthly refund MF 6,500, half price refunded equally in the year of purchase and in the following year. Bicycles : monthly allowance MF 2,500, monthly refund MF 2,000, " " " " " " " " " ""

Blacksmith equipment : refunds in one third of the price per year starting in the year of purchase.

September 5, 1973 INTEGRATED RURAL DEVELOPMENTPROJECT

Contingencies (MF Million)

1 2 3 4 5 TOTAL

A. Price Contingencies 1/

I. Equipment: Furniture and equipment 29.9 90.9 80.1 4.1 0.7 205.7 Ox-drawn equipment, fertilizers, agrocides 159.4 252.3 341.9 458.9 536.7 1,749.2 Vehicles 127.1 364.3 37.9 60.5 139.4 729.2

Sub-Total 316.4 707.5 459.9 523.5 676.8 2,684.1 Contingencies % 10.0 17.7 28.0 44.0 55.0 (33.0)

31.6 125.2 128.6 232.4 373.6 891.4

II. Civil Works: Buildings 115.6 401.4 409.6 16.0 15.0 957.6 Contingencies / 12.0 22.0 27.0 61.0 80.0 (25.0)

Total 13.9 88.3 112.0 9.8 12.0 236.0

III. Miscellaneous: Malian Staff 41.6 115.0 148.5 137.1 137.4 579.6 Operating Costs 120.8 278.7 298.0 261.9 185.3 1,144.7 Cart Bodies 16.3 25.6 32.0 38.8 46.9 159.6 Seeds 53.0 96.5 136.6 160.2 196.0 642.3 Revolving Fund 24.2 14.0 4.7 8.9 - 51.8 Studies - 45.0 - - - 45.0

Sub-Total 255.9 574.8 619.8 606.9 565.6 2,623.0 Contingencies % 5.5 8.3 10.3 26.5 34.7 (18.0)

Total 14.1 47.9 64.3 160.7 196.4 483.4

IV. Technical Assistance 209.3 341.5 277.8 205.8 187.3 1.221.7

V. TOTAL; Project Costs 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4 Price Contingencies 59.6 261.4 304.9 402.9 582.0 1,610.8

B. Physical Contingencies

Total Project Costs 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4 Contingencies % 5 5 5 5 5 5

Total 44.8 101.1 88.4 67.6 72.2 374.1

C. GRAND TOTAL CONTINGENCIES 104.4 362.5 393.3 470.5 654.2 1.984.9

1/ Price contingencies = average 22% on total costs or 26% on total costs less technical assistance.

2/ Grand total contingencies = average 27% on total coasts.

April 25, 1974 AINEX 12 Table 16

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Import Duties and Taxes (MF Million)

Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL L

Buildings 17.4 64.2 65.5 2.6 2.4 124.6 16%

Equipmentand Furniture 8.9 27.3 24.0 1.2 - 61.4 30%

Vehicles 33.8 94.0 12.5 16.8 45.5 202.6 28%

OperatingCosts 17.9 47.5 67.5 64.1 33.7 225.7 20%

TOTAL 78.0 233.0 169.5 84.7 81.6 646.8 MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT ANNEX 13 Table 1 Financing per Heading (MF Million)

TOTAL Years 2- 5 Years - 5

Years 1 2 3 4 5 % - %

1. Buildings IDA - 320.3 327.7 12.8 12.0 80 672.8 70 672.8 FAC 90.2 ------10 90.2 Mail 25.4 B1.1 81.9 3.2 3.0 20 169.0 20 194.6

Total 115.6 401.4 409.6 16.0 15.0 100 B42.0 100 957.6

2. Furmiture and Esuipuent IDIA ------FAC 3.3 60.1 54.9 2.8 0.5 67 118.3 59 121.6 Mali 26.6 30.8 25.4 1.3 0.3 33 57.8 41 84.4

Total 2 29.9 90.9 80.3 4.1 0.8 100 176.1 100 206.0

3. Vehicles IDA - 240.5 25.0 39.9 92.0 66 397.4 55 397.4 FAC 73.0 ------10 73.0 Mail 54.1 123.8 12.9 20.6 47.4 34 204.7 35 258.8

Total 127.1 364.3 37.9 60.5 139.4 100 602.1 100 729.2

4. Teehnical Assistance 1/ IDA - 290.4 236.1 174.8 159.3 85 860.6 70 860.6 FAC 209.3 51.1 41.7 31.0 28.0 15 151.8 30 361.1

Total 209.3 341.5 277.8 205.8 187.3 100 1,012.4 100 1,221.7

5. Maltan Staff IDA - 86.2 111.4 102.8 103.0 75 403.4 70 403.4 FAC - 25.9 33.9 31.0 33.8 23 124.6 21 124.6 Mali 41.7 3.1 3.1 3.1 0.6 2 9.9 9 51.6

Total 41.7 115.2 148.4 136.9 137.4 100 537.9 100 579.6

6. Operatin Coests IDA - 222.7 238.3 209.6 148.1 80 818.7 72 818.7 FAC 63.8 43.7 47.4 40.3 35.9 16 167.3 20 231.1 Mali 56.9 12.1 12.2 12.2 1.2 4 37.7 8 94.6

Total 120.7 278.5 297.9 262.1 185.2 100 1,023.7 100 1,144.4

7. Farmers 16.3 25.6 32.0 38.8 46.9 100 143.8 100 159.6

8. Ox-Drawn Equipment Fertilizers and Agrocides Mali 127.5 136.8 149.4 181.2 153.2 39 620.6 43 748.1 Fasmers 31.9 115.5 192.5 277.7 383.5 61 969.2 57 1.001.1

Total 159.4 252.3 341.9 458.9 536.7 100 1,589.8 100 1,749.2

9. Seeds IDA - 31.5 29.2 17.1 26.0 18 103.8 16 103.8 Mali 53.0 26.5 37.4 43.9 53.7 27 161.5 33 214.5 Farmers - 38.5 70.0 99.2 116.3 55 324.0 51 324.0

Total 53.0 96.5 136.6 160.2 196.0 100 589.3 100 642.3

10. Revolvine Fund Mali 24.2 14.0 4.7 8.9 - 100 27.6 100 51.8

Il. Studies 2/ IDA - 45.0 - - - 100 45.0 100 45.0

TOTA IDA - 1,236.6 967.7 557.0 540.4 50 3,301.7 44 3,301.7 FAC 439.6 180.8 177.9 105.1 98.2 8 562.0 13 1,001.6 Mal. 409.4 428.2 327.0 274.4 259.4 20 1,289.0 23 1,698.4 Farmers 48.2 179.6 294.5 415.7 546.7 22 1.436.5 20 1.484.7

897.2 2,025.2 1,767.1 1,352.2 1,444.7 100 6,589.2 100 7,486.4

12. Contingenctes IDA - 114.2 183.3 168.8 232.0 37 698.3 35 698.3 FAC 14.4 64.0 57.8 55.9 65.7 13 243.4 13 257.8 Mali 85.8 119.7 62.0 83.2 98.6 19 362.5 23 449.3 Farmers 4.2 64.6 90.2 162.6 257.9 31 575.3 29 579.5

Total 104.4 362.5 393.3 470.5 654.2 100 1,880.5 100 1,984.9

GRA1IDTOTAL IDA - 1,350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0 FAC 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4 Mali 495.2 547.9 389.0 357.6 358.0 ~ 19 1,652.5 23 2,147.7 Farmers 52.4 244.2 384.7 578.3 804.6 24 2.011.8 22 2,064.2

1.001.6 2.387.7 2,160.4 1.822.7 2.098.9 100 8.469.7 100 9.471.3

Il Technical assistance: This includes - Technical assistance for the main subproject MF 1,020.2 milli Economist for the evaluation of the project MF 52.5 million Consultants for the appraisal of the functional literacy ongoing program MF 73.0 million Specialista for the research program MF 76.0 million

Cereai producer priaes and marketing arrangements study and Total MF 1.221.7 million accountacy assistance to OACV. MALI

INTEGRATEDRURAL DEVELOPM9ElTPROJECT ANNEX 13

Sources of Financing

TOTAL Years 2 - 5 Years 1 - 5 1 2 3 4 5

1. IDA

Buildings - 320.3 327.7 12.8 12.0 80 672.8 70 672.8 Vehicles - 240.5 25.0 39.9 92.0 66 397.4 55 397.4 Technical Assistance _ 290.4 236.1 174.8 159.3 85 860.6 70 860.6 Malian Staff - 86.2 111.4 102.9 103.0 75 403.4 70 403.4 Operating Costs - 222.7 238.3 209.6 148.1 80 818.7 72 818.7 Seeds - 31.5 29.2 17.1 26.0 18 103.8 16 103.8 Studies 1/ - 45.0 - - - 100 45.0 100 45.0

Sub-Total _ 1,236.6 967.7 557.0 540.4 50 3,301.7 44 3,301.7 Contingencies _ 114.2 183.3 168.8 232.0 37 698.3 35 698.3

Total - 1.350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0

Il. FAC

Buildings 90.2 ------10 90.2 Furniture and Equipment 3.3 60.1 54.9 2.8 0.5 67 118.3 59 121.6 Vehicles 73.0 ------10 73.0 Technical assistance 209.3 51.1 41.7 31.0 28.0 15 151.8 30 361.1 Malian Staff - 25.9 33.9 31.0 33.8 23 124.6 21 124.6 Operating Costa 63.8 43.7 47.4 40.3 35.9 16 167.3 20 231.1

Sub-Total 439.6 180.8 177.9 105.1 98.2 8 562.0 13 1,001.6 Contingencies 14.4 64.0 57.8 55,9 65.7 13 243.4 13 257.8

Total 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4

111. AlI_OVERNMENT

Buildings 25.4 81.1 81.9 3.2 3.0 20 169.2 20 194.6 Furniture and Equipment 26.6 30.8 25.4 1.3 0.3 33 57.8 41 84.4 Vehicles 54.1 123.8 12.9 20.6 47.4 34 204.7 35 258.8 Malian Staff 41.7 3.1 3.1 3.1 0.6 2 9.9 9 51.6 Operating Expenses 56.9 12.1 12.2 12.2 1.2 4 37.7 8 94.6 Ox-drawn equipsent, fertilizers and agrocides 127.5 136.8 149.4 181.2 153.2 39 620.6 43 748.1 Seeds 53.0 26.5 37.4 43.9 53.7 27 161.5 33 214.5 Revolving Fund 24.2 14.0 4.7 8.9 - 100 27.6 100 51.8

Sub-Total 409.4 428.2 327.0 274.4 259.4 28 1,289.0 23 1,698.4 Contingencies 85.8 119.7 62.0 83.2 98.6 19 363.5 23 449.3

Total 495.2 547.9 389.0 357.6 358.0 19 1,652.5 23 2,147.7

IV. FARMERS

Cart Bodies 16.3 25.6 32.0 38.8 46.9 100 143.3 100 159.6 Ox-drawn equipuent. fertilizers and agrocides 31.9 - 115.5 192.5 277.7 383.5 61 969.2 57 1,001.1 Seeda - 38.5 70.0 99.2 116.3 55 324.0 51 324.0

Sub-Total 48.2 179.6 294.5 415.7 546.7 22 1,436.5 20 1,484.7 Contingencies 4.2 64.6 90.2 162.6 257.9 31 575.3 29 579.5

Total 52.4 244.2 384.7 578.3 804.6 24 2,011.8 22 2,064.2

V. GRANDTOTAL

IDA - 1,350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0 FAC 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4 Mali 495.2 547.9 389.0 357.6 358.0 19 1,652.5 23 2,147.7 Farmers 52.4 244.2 384.7 578.3 804.6 24 2.011.8 22 2.064.2

1.001.6 2.387.7 2.160.4 1,822.7 2.098.9 100 8.469.7 100 9.471.3

1/ Cereal producer prices and marketing arrangements study & accountancy assistance to OACV. AENEX13 Table 3

MAIJ

INTEGRATEDRURAL DEVELOPMENT PROJECT

Schedule of IDA Disbursements (US$ '000)

Cumulative Fiscal Year Disbursements per Disbursements & Semester Semester at end of Semester

1975: lst 1,000 1,000 2nd 1,300 ,300

1976: lst 1,h00 3,700 2nd 1,200 4,900

1977: lst 1,000 5,900 2nd 800 6,70C

1978: lst 500 7,200 2nd 500 7,700

1979: lst 300 8,000 2nd

April 26, 1974

ANiNEX14 MALI Page 1

INTEGRATED RURAL DEVELOPMENTPROJECT

MARKET AND PRICES FOR PROJECT COi'4MODITIES

A. Fats and Oils - Past Trends and Future Prospects of Demand and Supply

1. Total estimated consumptionof fats and oils expanded steadily at a trend rate of 2.9 percent from 1960 to 1970, but both the geographic and the product compositionof demand changed during this period. While total consuinptionin both the developed and the developinggroups of countries rose at a trend rate of 3.2 percent, in centrally planned economies the trend rate of growth was only 1.8 percent.

2. The product compositionof supply and use also changed substantially during the past decade. Consumptionof animal fats and marine oils rose much more slowly than consumption of vegetable oils. Within the vegetable oils group the compositionof usage also changed in response to availabilities of the different oils and to a number of economic and non-economicfactors.

3. The rise in consumptionof vegetable oils mainly reflected some countries growing demand for them as substitutes for animal fats in food uses. higher food consumptionof vegetable oils (in the form of margarine, shortening and other cooking oils) compared with animal fats seems to reflect, at least in some major consuming countries, the concern of consumers with excesive cholesterolintake. Other factors have played a role, however, such as the increased consumption of convenience foods. In North America, concern over cholesteroland the development of conveniencefoods both seem reasonable explanationsfor the fact that consumption per head of vegetable oils, notably in the form of margarine and shortening, lias risen rapidly during the last decade while consumption of butter has fallen. In other major developed consuming areas the pattern was different. In the enlarged EEC the evidence of a change in consumer preferences is less marked. In Japan, consumption of animal as well as vegetable oils and fats rose rapidly in the last decade, mainly reflecting income growth.

4. The shift of demand away f'romanimal fats and oils and to vegetable oils opens opportunitiesfor virtually any of these oils in view of the high degree of substitutionbetween them. For each individual oil the rate of growtlîof supplies compared with that of competing oils does have an influence on its relative price, but this influence is less the closer the balance between total supply and total demand of all vegetable oils. ANNEX 14 Page 2

5. According to Bank staff projections,world demand for ali fats and cils will continue to grow at the sane rate as in the 1960s, reaching a total of 56 million tons in 1980. The Bank's estimate is higher than the FAO's by 2.4 million tons, because we expect a stronger rise of demand in developed countries. The FAO has projected that the share of vegetableoils will rise to 69.5% of the total, which would imply world consumptionof vegetablE oils in 1980 of about 39 million tons. The increase in the share of vegetable oils compared with other fats and oils is due to a number of factors which are likely to be felt more in developed than in developing countries. However, future demand for vegetable oils in developing countries is also expected to increase considerablyfaster in this decade, reflecting the rise in incomes in these countries and the fact that the income elasticity of demand for the oils tend to be relativelyhigh at low income levels. The assumed rate of increase of overall demand for vegetable oils is 3.8 percent per year from 1970 to 1980 in developing countries.

6. The changing distributionof world demand between different fats and oils over the last decade has been accompaniedby changes in the supply availabilitiesnot related to changes in prices or demand of the different commodities. World production of animal fats and oils increasedslowly compared to vegetable oils. On the who]e production of butter has remained almost stagnant,though there were increases in particular areas such as the ESC under the stimulus of high support prices which merely led to stock accumulationand the need to subsidize consumption. The growth of lard production also has been very slow partly as a result of production practices which have led to a decline in fat per animal. The output of marine oil products increased rapidly in recent years, but these are mainly consumed as animal feeds. The rise in production of marine oil products and animal fats and oils is expected to be slow in the decade to 1980. For butter, lard and marine oils combined, production is expected to grow at the rate of 1.9 percent per year, against 3.5 percent a year for vegetable oils. On the basis of estimated productiontrends world supply of all fats and oils combined in 1980 is expected to be roughly in balance with world demand at the level of 56 million tons oil or fat equivalent. Consequentlythe expected increase of supplies of fats and oils will be absorbed in the market without persistent downward pressure on the prices of these commoditiesas a group.

7. Within the vegetable oil group, productionhas grown comparatively slowly except for sunflowerseedoil, rapeseed oil, soybean oil and palm oil. World output of groundnuts increasedat a diminishingrate in the last decade, particularlyafter 1967. lWorldexports of groundnutoil have been stagnant since 1955, except for an increase during 1966-68. Production is not expected to rise again at rates comparable to those of the 1950s in the coming decade, unless vigorous expansion plans are undertaken. World coconut production remained stagnant from the mid 1950s to 1970, and the improvementnoted in 1971-72,which was attributableto favorableweather conditions,was expected to be short-lived. The developmentand use of high-yield hybrid varieties could increase production but the effect will not be felt until ANNEX 14 Page 3

after 1980. The productionof cottonseed oil has grown slowly in the past decade at the rate of less than 1 percent a year. A rise in supply occurred in 1972 and is expected to continue into 1973 due to favorableweather conditions and to the diversion of cottonseed fr?m direct feeding to oil extraction in some countries. However, the long-term growth, which is linked to the growth of output of cotton, is not expected to exceed 1.7 percent per annum. Sunflowerseedis produced mainly in centrally planned economies and the rate of growth of output has tended to level off towards the end of the last decade. The recent trend in output of sunflowerseedoil is expected to continue in the period to 1980 as yields stabilizeand the area under sunflower in the USSR will probably not be greatly expanded beyond present levels. The possibility of a large scale introductionof sunflower plantings in the United States still seems remote. The reverse tendency was shown by output of rapeseed, whiclhoriginates mainly in Canada, Western and Eastern Europe, the USSR, and centrallyplanned economies ih Asia and SoutheastAsia. Most of the future expansion of output is expected in Canada, Western Europe, the USSR and Eastern Lurope and this may provide cômpetition for other vegetable oils in developed markets. UIowever,even at recent growth rates the increase in output of rapeseed will not be sufficient to capture a large share of the growing market for oils.

8. In contrast, the output of both palm oil and soybean oil, which has grown rapidly in the 1960s is expected to follow a strong upward trend in the coming decade. The important producing countries planted large areas to oil jlalmin the 1960s, and have currentlyon hand plans supported in most cases by the necessary financial arrangements- to plant more areas in the next few years. This planting is in addition to other forms of rehabilita- tion of the oil palm industry. World soybean output has risen from 26.5 million tons in 1956-60 to 43 million tons in 1966-70, a rise of 65 percent. The largest quantity increase was recorded in the United States where production doubled, rising from 14.2 million tons in 1956-60 to 28.7 million tons in 1966-70. Brazil's output of soybean rose fastest in percentage terms during the same period (+521 percent),but this country's total output in 1966-70 was still less than a million tons. The United States' soybean output is expected to rise to about 48 million tons in 1980; Brazilian output is also expected to continue rising sharply, to about 10 million tons in 1980. These increases are mainly in response to demand for animal feeds both in the producing countries and abroad, but much output of soybean oil will also result as a by-product of bean crushing for cake manufacture. The production of soybeans in China has remained at about the same level of 9 to 10 million tons throughout the last two decades and future output is likely to be tailored to domestic needs. If this is so, China will become neither a net exporter nor a net importer of soybeans or soybean cake and oil in the next decade. Total world output, includingthat of China, is forecast to reach roughly 70 to 75 million tons of soybeans hy 1980, or 11 million tons oil equivalent. ANNEX.14 Page 4

9. Since the supply of most other vegetable oils is expected to grow slowly, the greater part of the increase in world demand for oils in the next decade will be met by palm oil and soybean oil. The 1971 and the projected 1980 snares of the different oils in world output of fats and oils are shown in the following table:

Commodity 1971 1980 Output Z of Total /1 Output Z of Total /1

Edible Vegetable Oils 26.00 60.46 36.8 65.71 Soybean 7.10 16.51 11.0 19.64 Sunflower 3.55 8.26 5.0 8.93 Groundnut 3.05 7.09 4.1 7.32 Cottonseed 2.50 5.81 4.0 7.14 Rapeseed 2.50 5.81 3.3 5.89 Coconut 2.30 5.35 3.0 5.36 Palm 2.10 4.88 2.9 5.18 Olive 1.55 3.60 1.9 3.39 Sesame 0.70 1.63 0.9 1.61 Palm Kernel (Incl.babasu)0.65 1.51 0.7 1.25

Animals Fats 14.10 32.79 15.8 28.21 Tallow/Greases 5.00 11.63 5.9 9.64 Butter (Fat Content) 4.90 11.39 5.4 8.04 Lard 4.20 9.77 4.5 10.54

Industrial Olls 1.70 3.95 2.0 3.57 Linseed 1.25 2.91 1.3 2.32 Castor 0.35 0.81 0.5 0.89 Tung 0.10 0.23 0.2 0.36

M^larineOhis1.25 2.90 1.4 2.50

Total 43.00 100.00 56.0 100.0

/1 'Llllionmetric tons oil or fat equivalent ANNEX 14 Page 5

B. Groundnuts

Marketing

10. Groundnutswere Mali's leading export crop until 1961 but they are now second after cotton. Data on past and estimated future groundnut production and marketing are shown in Annexes 1, 2 and 3. The average officially marketed production of undecorticatedgroundnuts for the period 1968/1972was nearly 30,000 tons compared with,z111,000 tons in the project area at full development.

11. Marketing of groundnuts is carried out by Operation Arachide in areas under its supervision. This includes collection to the market place, and evacuation to the dumps (seccos) of the Societe Malienne d'Import Export (SOIIIEX)or the Societe d'Exploitationdes Produits Oleagineux du Mali (SEPOM). Tlheseactivities are expected to decrease as road development in the project area enables private transportersto play a more active role. Elsewhere collection is carried out by SOMIEX licensed agents, who operate without supervision. These agents supply less than 25% of unshelled groundnutsmarketed through officials channels. The role of the licensed agents will diminish as OA activities expand.

12. The estimated production marketed through official channels varies from area to area, depending mainly on the density and efficiency of the marketing network. It is estimated that marketed production of unshelled groundnuts in the project area will increase from about 60% in 1972/73 to 65% witlhincreased production and improvementsin marketing facilities. The difference between harvested and marketed production is accounted for by:

- Seed requirements (about 100 - 150 kg/ha)

- Home consumption, estimated at 10 - 15 kg per capita per year, depending ouithe availabilityof other food crops

- Sales on other markets, which are estimated to range between 10,000 and 30,000 tons, to meet the demand of non-groundnuts producing areas in Mali and neighboring countries, mainly Mauritania.

Processing

13. Decorticatingof unshelled groundnuts is carried out by SOMIEX, or by SEPOM which uses the shells as fuel. SEPOM operates a crushing mill at Koulikoro with a capacity of 30,000 tons of unshelled groundnuts and about 10,000 tons for other seeds (karite, cotton seed). This mill is currently working at full capacity. A second mill, with the same capacity, is planned for the Kita area in 1976. This would be financed with the assistance of tne German Federal Agency for Development Aid. Even after completion of ANNEX 14 Page 6 the second miil large quantities of groundnutswould still have to be exported unprocessed, since total crushing capacity would represent about 54% of the total quantity marketed officially and 35% of estimated production of the project area. SEPOtIexports oil and cake and supplies refined oil to SOMIEX for distribution on the domestic market.

Present Prices and Price Mechanism

14. As for other commodities,groundnut prices are establishedby government decree. A "Bareme Arachide" (Groundnutschedule) which is published annually contains producer prices, the prices to be paid by SOMIEX/SEPOMto OA against delivery (includingthe levies for OA and SCAER and reimbursement of marketing costs) and a theoretical CIF price applicable to SOMIEX. The schedule for the 1972/73 campaign is shown in Table 1.

15. The producer price for undecorticatedgroundnuts was fixed at MF 30/kg in 1968/69 and to date has remained unchanged. This has provided sufficient incentive to farmers as the groundnut producer price is more beneficial than prices paid for other crops (Annex 1, Table 2) and compares favorably with groundnut producer prices paid in neighboring countries (Table 2). The 1967 devaluation of the Malian Franc enabled the Government to raise producer prices and to earmark revenues from groundnut sale proceeds for OA and the Office de Surveillance et de Regulation des Prix (OSPR).

16. OSPR was established in 1968 by merging the Groundnut and Cotton Stabilization Funds and the Caisse de Perequation; the latter organization was responsible for stabilizing petroleum products and certain basic consumer goods. The Groundnut StabilizationFund is financed by a levy of MF 7,000/ton on exported decorticatedgroundnuts and MF 1,800/toncrude oil exported. The Croundnut StabilizationFund's revenues, expendituresand reserves to date are shown in Table 6. The net reserves amounted to MF 520 million at the end of fiscal year 1972. Hlowever,these reserves are not sufficient to support variations in export prices predicted for the future.

Future Prices

17. Mali ranks far behind major West African groundnuts producing countries suclias Nigeria, Senegal, Niger and Gambia. The estimated total marketed productionfrom the project at full developmentwould represent about 3.5% of world exports compared to 2% at present; future annual world groundnut production and export are not expected to differ greatly from those of the last six years, the estimated rate of growth in volume of world groundnuts and oil exports being 1.5% per annum over the period 1969/1980. This compares with an annual growth of 3.5% for the 10 years period 1960-70, and a forecast growth rate of 12% per annum for palm oil. Thus groundnuts are expected to still be in relativelyshort supply by 1980, although substitutionbetween different oils may keep prices for groundnut products in step with other fats and oils. On this basis the projected increase in groundnut production in Mali is expected to have little impact on world market prices. ANNEX 14 Page 7

18. The Bank's Economic Analysis and ProjectionsDepartment predicts a decline in world groundnutprices from the unprecedentedUS$393 per m ton (CIF Europe) in 1973 to US$235 in 1980 (in constant 1973 terms). If this predictionholds the economic price at farm gate (see Table 4) will fall from 'IF 105,480/tonundecorticated in 1973 to MF 53,250/tonat full development in 1980. This decline in world price is taken into account in the calculation of the economic rate of return.

C. Millet and Sorghum

Marketing

19. Sorghum, millet and, to a lesser extent, rice, are the major staple food crops in Mali. Details of productionand marketing from 1967 chrough 1972 are shown in Annex 1, Table 1. In recent years estimatedmillet and sorghum productionhas averaged 600,000 tons compared with annual requirements of 750,000-800,000tons. The reduction in production is mainly due to the unfavourableweather conditionsexperienced in Mali during the past five years. However it is difficult to assess whether the short fall has not been accentuatedby the disincentivesof the official marketing system or smuggling to neighboringcountries.

20. Only 5% of current productionis marketed for each. Although the Office des Produits Agricoles du Mali (OPAM) has a marketing monopoly on cereals, and movement of grains i subject to strict controls, it has been unable to operate effectively in view of the wide disparitybetween official and black market prices, poor organizationaid financial difficulties. OPAM is also responsiblefor distributingcereals supplied by aid donor countries or importedwith Government funds. The volume of millet and sorghum handled by OPAM in the eight years period to 1973 is shown in the following table:

Millet/SorghumHandled by OPAM

TMetricTons 1965/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73

Domestic Production 25,000 56,000 60,000 8,000 26,000 10,000 30,000 5,000

Imports /1 - - - 17,000 - 25,000 37,000 200,000

/1 .,stimatedfigures; inports consist mainly of aid donations. ANNEX 14 Page 8

Prices

21. Producer and consumer prices fer millet and sorghum are fixed annually by Government, which also determines freiLght rates for transportation of cereals. Table 7 shows the millet/sorghum price schedule for 1972/73. The official prices for cereals are very low compared to prices paid for other crops, such as cotton and Qroundnuts, black market prices and the prices prevailing in neighboring countries (see Table 8). This is a major disincentive to the production and marketing of cereals. Although acknowledging the need to raise cereal prices government is reluctant to do so because of the impact on the cost of living (cereals account for about 34% of the cost of living index) and on salaries. As a first step the producer price for millet and sorghum was raised from MF 18 to 20 in 1972/73, and further increases to -F 25-26/kg are under considerationfollowing recommendations by governnent services and USAID experts. This, togetherwith a reorganizationof OPAM to provide proper price stabilization,would do much to improve cereal production and marketing.

Arrangements under Project

22. To insure the success of the important cereal componentof the project, Government has agreed that (i) sorghum and millet producer prices would be increased from MF 20 per kg to a minimum of MF 25 per kg effective from November 1974, although the increase would be publicized in May before the planting period; (ii) a study on millet and sorghum producer prices and n!arketing arrangements, to be completed by April 30, 1975, would be carried otit by consultants and under terms of references acceptable to IDA. This study would provide the basis for further decisions on both producer prices :.Àndmarketing arrangementswhich should be satisfactoryto IDA.

23. There should be no difficulty in disposing of project production as estimatedannual deficits in 1978/79are 200,000 tons for millet, sorghum and maize (300,000 tons taking into account buffer stocks requirements). Project productionwould represent 12% of the estimated shortfall.

24. For the rate of return calculationimport substitutionprices based on the Bank's Economic Analysis and ProjectionsDepartment, have been u-sed. Details are shown in Table 9. ANNEX14 Table 1 MA1I

INTEGRATEDRURAL DEVELOPMENT PROJECT

Bareme Arachide (GroundnutSchedule)

Seasons 1973/74 (MF/mt)

Undecorticated Decorticated

Producer Price 30,000

"tOperationArachide" cess 77,600 Collection Costs 3,556 Handling/Bagging 390 Buying Allowance 900 SCAER cess 2/ 2,000 Selling Price to SOMIEX/SEPOM 44v44 Bag Allownace 585 Dessication/loss 1,335

Cost Price Delivered to DecorticatingDump2/ 45,781 67,325 DecorticatingCost 4/ 1,775 Handing/Onloading l,250 Inland Transport/Insurance 556 Financial Charges 1,458 Waste 10 Road/E'ailFreight to Malian Border 5,552 Government Taxes 5/ 8,951 StabilizationFund Levy 10,000 Rail Freight Border to Port 6,880 Port Charges 3,,526

FOB Cost Price 107$293

Cost from FOB to CIF 15,280

CIF Cost Price 122,563

1/ This amount is levied only on groundnuts marketed through nOperationArachide?, and covers OA extension service expenses and seed treatment and handling costs.

2/ Levied both in "OperationArachide" area and outside to partly cover the subsidies on farm inputs. 3/ Rate decorticatedto undecorticated68%. I4/ Machine decorticatedby SOMIEX. g/ Consists of i) taxes: MF 4,901;ii) export tax: 4,o50. ANNEX 1 Table 2

MALI

INTERATEDRURAL DEVEL JNT ÂRJECT

keroducer iFrices ror Uroundnuts rrices raict to Producer in Mali and Neigfboring Countries (MF/kg - 1972/73 Canmaign)

Unlhelled Hand-Shelled Machine-Shelled

Mali 3 40

Niger 32 48

Senegal 4b.:e

Upper Volta zô - 3e 49-54

1/ r~rice paid to the producer in Senegal was raised recently and would be MF 51/kg for the 1973/74 canpaign. ANNEX14 MALI - Table3

INTEGRATEDRURAL DEVELOPMENT PROJECT Internatonal Prices of~ Groundniuta (ondinlt,

and Groundiut Cake

(US$ per metric ton)

Groundnut 01l Groundnuts Groundnut Cake

Annual Averages (1) (2) (3)

1960 327 197 89 1961 330 196 86 1962 274 171 97 l9O3 268 172 100 1964 315 187 104 1965 325 206 106 1966 297 187 103 r67( dOi .1(9 Lnn 1968 270 166 97 1969 332 207 100 1970 378 229 109 1971 446 254 105 1972 433 271 117 1973 546 393 296

Forecasts

1980 CudrrentTerms 787 425 267 1973 ConstantTerms 435 235 147

(1) Up to December1971 Nigerian,3-5% bulk, n.f.s. c.i.f. Europe. From January 1972 Nigerian/Gamxbian/anyorigin, c.i.f., U. K.

(2) Nigerian shelledn.f.s. c.i.f. Europe

(3) Argentina,50% exmorters,n.f.s. c.i.f. North EuropeanPorts.

Source: F. A. 0. CCP: OF/ST ?3/CRS.2 and Bank's Economic Analysis and Projections Department (April 1974). MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

GROUNDNUTPRICE STRUCTURE

Economic Farm Gate Price (Constant 1973 MF and m ton)

1973 1974 1975 1976 1977 1978 1979 1980 Onwards

CIF European Port US$ -/ 390 340 300 280 265 255 245 235

Equivalent MF 2/ 195,000 170,000 150,000 140,000 132,500 127,500 122,500 117,500

Ocean Freight/Insurance 3/ 12,925 12.550 12.250 l2.100 11,990 11,910 11,840 11,760

FOB Dakar 182,075 157,450 137,750 127,900 120,510 115,590 110,660 105,740

Transport Border/Port and Port Charges 4/ 11,500 11,500 11,500 11,500 11,500 11,500 11,500 11,500

Exporter/Seller Commission 5/ 3.650 3,650 3,650 3,650 3,650 3,650 3,650

Available at Malian Border 166,925 142,300 122,600 112,750 105,360 100,440 95,510 90,590

DecorticatLng/Transport from dump to border 4/ 6,950 6,950 6,950 6,950 6.950 83,640 -- Value at dump 159,975 135,350 115,650 105,800 98,410 93,490 88,560

-- Equivalent unshelled (70%) 111,980 94,745 80,955 74,060 68,890 65,440 61,990 58,550

-- Marketing cost from farm to dump 6/ 6,500 6,400 6,200 5,900 5,600 5.OO 5,300 5,300

Economic Farm Gate Price 105,480 88,345 74,755 68,160 63,290 60,140 56,690 53,250

1/ Bank's Ecnomic Department Projections as of April 5, 1974. 2/ Conversion rate US$ 1 = MF 500. 3/ MF 10,000/m ton + 1.5% of CIF value for insurance. 4/ Actual charges net of tax; includes road and rail freight, insurance and handling. 5/ Estimate: 2% FOB value (rounded) for SOMIEX overheads. 6/ Transport coEts, based on economic vehicle operating costs, are higher than Government fixed freight rates. They are expected to dectine as a result of general road improvement program and project ad hoc road improvements. Other marketing costs estimated to MF 2,500/ton include buying costs, and other allowances.

February 15, 1974

Crz C- MALI

INTEGRATEDRURAL DEVELO'ENT PROJECT

Groundnut Destination of Marketed Production

1973 1974 1975 1976 1977 1978 1979 1980

Total Production * (Unshelled) 86,000 108,000 128,000 151,000 162,000 167,000 171,000 171,000

Marketed (Unshelled) 55,000 65,000 79,000 97,000 106,000 109,000 111,000 111,000

Maximum Crushing Cap. (Unshelled) 30,000 30,000 30,000 45,o000.- 60,000 60,000 60,000 60,000

Available for Export (Unshelled) 25,000 35,000 49,000 52,000 46,oO 49,000 51 ,000 51 ,000

Equivalent Shelled 17,500 24,500 34,300 36,400 32 ,200 34,300 35,700 35,700

Crushing Mill Output i/ a) Groundnut cake 12,700 12,700 12,700 19,000 25,300 25,300 25,300 25,300 b) Crude Oil Total 8,700 8,700 8,700 13,000 17,300 17,300 17,300 17,300

- For export (3,700) (3,600) (3,500) (7,600) (11,700) (11,500) (11,300) (11,100)

- Domestic use (5,000) (5,100) (5,200) (5,400) (5,600) (5,800) (6,000) (6,200)

* Rounded figures. j Assxniing that the projected Kita crushing mill will be operational in 1976 and will function at full capacity in 1977. Conversion rates: 1 ton unshelled = 70U kg shelled 1 ton shelled = 410 kg of crude oil and 600 kg of cake (the additional weight 10 kg is made of shell load) September 1 9, 15'V3 ANNEX1h Table b

MALI

INTEGRATEDRURAL DEVLOPMENT PROJECT

Office de Surveillance et de Regulation des Prix

Groundnut Reserve Account (1969-1M72) (NF)

I Income

Receipts from former Groundnuts Stabilization Funds (as of Jan. 1, 1970) 192,72L,946

Receipts of fiscal year 1970 144,000,955 il s' " " 1971 175,231 ,825 ih ti Il t" 1972 1 34,351 ,225

Total Revenue as of EndFi8cal Year 1972 646,312,951

II Expenditures (1970-1971-1 972)

Personnel 3,665,650 Stationery/Operating 2,585,1 35 Aid to Production 4,390,000 Contribution to Debt Management Fund 41,123,410 Actual Lisbursements/Groundnuts 57,055,043 Other Contributions 16,524,410

Total Expenditures 125,343,648 Balance as of End Fiscal Year 1972 520,969,303

Source: Office des Prix et de Regulation.

Note: No expenditure breakdown per year is available. The Office des Prix et de Regulation total net reserves amounted to MF 2,597 million of which 562 million for cotton accounts, as of Fiscal 1972 end. ANNEX 1h. Table 7

MALI

INTEGRATED LRUALDEVELOP*NiT PROJECT

Price and Marketing Structure for Sorghum/Mil Let

Domestic Price Structure

I. Price Schedule (Bareme) for Sorghum/Millet 1972/73

Producer Price 20, Bulking and Delivery 3,200 Losses (5%), Bag, Financial Charges 2,50o0 OPAM Overheads 5,O00 3'0,700 âoun*ed1: 31 000 Retail Margin Consumer Price/Production Areas 32,500 Consumer Price in Bamako 37,000 Consumer Price in Kayes 39,OO0 Consumer Price in Region vi (GAO) 45,000

II. Retail Prices in Cooperatives and on Bamako Market 19O5-1 973 (Current MF/kg)

1965 1966 1967 1968 1969 1970 1971 1972 1973 (Jaln -May) Cooperatives

Sorghum 17.5 17.5 22 29 29.5 31 32 33 37 Rice RM 440 - - - - - 78 85.25 85.2N 8'.25

Market

Sorghum 47 56 46 39 46 41 60 73 102 Rice RM 40 91 111 113 114 87 96 113 123 145

Source: Office de surveillance et de Regulation des prix (OSRP).

December 30, 1973 ANNEX 14 Table 8

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

Price and Marketing Structure for Sorghum/millet

Cereal Producer Price in Mali and Neighboring Countries 1972/73 (Governnent fixed prices MF/kg)

Millet/Sorghum Maize Paddy (Grade I)

Mali 20 20 25

Niger 24-36 - 3

Senegal 30-34 32 42

Upper Volta 28 30 43 ANNEX14 Table 9

MAII

INTEGRATEDRURAL DEVELOPMENT PROJECT

Price and Marketing Structure for Sorghum/Millet

Economic Farm Gate Price (Constant1973 I'Fand MT)

73/75 7G')7/78 79 Onwards

FOB US Gulf: US$ 95 85 70

Ocean freight insurance (US$) 25 25 25

CIF Dakar US$ 120 110 95

Equivalent MF: 60,000 55,000 47,50,D

Porterage/Harbordues: 2,900 2,900 2,900

Transport Bamako./Delivery 10,500 10,500 10,500

Economic value Bamako (bulk) 73,4OO 68,400 60,900 Transportfrom productionareaSto consumptioncenters 8,200 8,200

Intermediaries margin 2,000 2,000

Economic Farm Gate Price 63,200 58,200 &,Q,700

Note:

(a) Conversionrate: US$ 1 = MF 500

(b) Cost from Dakar to Bamako are actual charges net of taxes.

(c) Transportationfrom productionareas to consumptioncenters are based on the followingassumptions: long distancehaulaSe: 230 Lm (Sikasso/ Segou-Bamako). Collection:30 km on feeder roads ,AB) and 20 km on tracks. Costs are based on avera'e transportcosts shown in Annex L, Table 7, adjusted to 1973 price level.

December 28, 1973

ANNEX 15 Page 1

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

Farm Models and Budgets

Basic Data

1. Data on population, farm size and farm activity in Mali are either scant or conflicting. The following informationwas compiled from the 1969/70 rural survey, the consultantsIntegrated Rural Development project feasibilitystudy, "Operation Arachide" records and other sources.

(i) Population. Farm population in the OA area in 1972/73 (Year O) is estimated at 486,000 (about 85% of total population) and the number of farm units (or households) at 52,000, the average household consisting of 9.3 persons. At full development,the total farm population in the expanded project area is expected to increase to nearly 1 million in 107,000 farm units.

(ii) Area cropped and farm size. Total project area cropped in 1972/73 (project year 0) was 213,600 ha, the average farm size being 4.1 ha (2.2 under millet and sorghum and 1.9 under groundnuts). At full development this would increase to nearly 463,000 ha (average farm size 4.3 ha). Without the project the estimated average farm size would be 3.8 ha of which 1.4 under groundnuts.

Basic Assumptions

2. (a) The farm models and budgets show the impact of the project on:

(i) subsistence farmers shifting from traditional cultivation practices to improved techniques and inputs recommended by the project (Farm budget A); Table 1.

(ii) advanced farmers proficient in improved cultivation techniques and adopting ox-powered cultivation (Farm budget s). The latter case would apply either to the new farmers after, say year 4 or to farmers already supervised by OA (Table 2). The cash flow projection for this category of farm is shown in Table 3.

(b) A summary of technical progression for the farmer in situation A (subsistence,farmer, manual cultivation)and the change in area for the farmer in situation B (proficient farmer using ox-drawn implements and expanding area cropped) is shown below: AçNEX 15 Page 2

Budget A

Technical Progression for a Subsistence FarnmerAdopting Improved Techniques

Groundnuts Sorghum/Millet

Year O traditional cultivation traditional cultivation practices practices

Year 1 timely sowing and correct traditional cultivation practices density

Year 2 use of improved seed and traditional cultivation practices fungicides

Year 3 application of fertilizers use of fungicides

Year 4 full development rotation to take advantage of fertilizer residual effect

Year S full development full develop.ent

Budget B

Changes in Area Cropped due to Ox-drawn Implements

Total area (ha) YO Yi Y2 Y3 Y4 Y5

Groundnuts 2 2 2.5 3 3 3 Sorglhum/Millet 2 2 2 2.5 3 3

Total 4 4 45.5 6 6 of which ox- cultivated Groundnuts O 0 1.5 2.5 3 3 Sorghum/Millet O 1.5 1.5 2.5 3 3

Total O 1.5 3 5 6 6

improved cultivation practices have been completed in Year O. ANNhX 15 Table 1

INTREGlTED RURAL DEVELOPMENTPROJ0T

ParoIDudget A

Ftrm Under Manual Cultivat5qa Adoptineg itoroved Techniques ./

° ; 2 -~~~Years______4______

1. trop Yield. Production sud Value

Groundnuts

area (ha) 1.2 1.2 1.5 2 2 2

yield (kg/ha) S00 800 950 1,200 1,200 1,200

production (kg) 600 960 1,425 2,400 2,400 2,400

value (at MF 30/kg) 18,000 28,800 42,750 72,000 72,000 72,000

Sorehus/Millet

rea (ha) 2 2 2 2 2 2

yield (kg) 605 605 605 695 845 845

production (kg) 1,210 1,210 1,210 1,390 1,690 1,690

value (et MFi35/kg) 42,350 42,350 42,350 59,650 59,150 59,150

Total value of Produ-titu 60,350 71,150 85,100 120,650 111,150 131,150

2. Production costs

Seeds 2/

Groundnuts (MF) 2,340 3,960 5,692 6,600 6,600 6,600

SorghP=/Millet (MF) 700 9L5 9bS 94c 9?Is q4c

Funglcideo&

Groondnuto - - 253 338 338 338

Sorghuo/oillet - - - 100 100 100

Fertilioors - - - 5,200 3,200 5,200

Overall îoceooeeaL 800 800 875 1000 1.000 1.000

Total 3,840 5,705 7,765 14,183 14,183 15,183

3. Net Volue of Production 56,510 65,445 77,335 106,467 116, 9k7 11 6,07

Fa-ily Consu_ptio aod Taxes

1 FaoilyCoosueptioon 45,475 45,475 L8,45o 48,45o 18,450 48,450 Head taxeo / 2.800 2.800 2800280 800 2.800 2.800

Total 58,275 48,275 51,250 51,250 51,250 51,250

5. Net Caoh Onco

Annual 8,235 17,170 26,094 55,217 65,717 65,717

Gunulative 8,235 25,405 51,59° 106,707 172,424 238,1ù1

6. Retor ta Labac

- Labor requicenent~

- Groundnuts 97 120 158 232 232 232

- Ooeghu,o/colllet 126 136 136 142 156 156

Total 223 256 294 374 388 388

Net Reveoue/Maoday Worked (M4F) 253.4 255.6 263.0 284.7 301.S 301,5

Net Cash InconeeManday Worked (Mi7) 36.9 67.1 88.7 147.6 169.4 169.4 6 Net Revon.e/Cap,ta (MF) £,648 7, 9; 9,098 12,526 13,761 13,761

NRt Rsvenue/OCpita (uS$) 16 18 22 30 33 33

/ Basic assucptinos: si.e cf holding: 3 to 4 ha, fanily of o.5 persons of which 3.5 active and 2 taxahle.

Soedo. Grcucdnu; 65 kg/ha in yeor 0, thceasfter 110 kg/ha. Millt/sccghu- 10 kg/ha ij yeaT 0, theroafter 13.5 kg/ho et 2' 35. In year 2, pur-hase cf grour.drut improved seedo o ME' 34.5/kc; seeds rp-aced ecoh fo-r-h year, o-hbr-o-e c`' 30/kg.

3 lt presernt officiol seiig price.

Elotir-e:-d et MF 250/ha for touis.

5t Groundnuts: 15 kg/capita/year valued ut 'M 30/kg. Sorghun/milet: 14O kg/capite/year, incr..eamg to 150 ig/capi;Ca/er foc; year 2; valuei at MF 35/kg.

j MF 1 ,4S/c.e adult.

,/ ee Accex 3, talle 1:.

Beecbar c, 19733 O 11 1 1 1, 1 , o tz hbb b X h n hi hi J

h Z Ch an i1> h n. h |r i h h

Dn>n--o > S _,œH a- O | ,t- ' h ho'hC0 °OhtO-|> en- o 5 n o e, a e C o. t ieh

Ch °. Oh o. . O'o o o- c o Ho ° w 9 o,o nwo o o. n hi~~ o ~~ - h F

C~~OIwnHo W ' n o' w xo c ô co > 1u Q \~~~~~, k -w- .- ~h-l- oi b- koooôc°o .

gOeoflhee ~~~~~~~~~~~~~~~~~~~~~'ht, -~~~~~~~~~~~ ANNEX15 Tabe 3

MALI

INTEGRATEDRURAL DEVELOPMENT

Farm Budget B

Cash Flvm for Farm under Ox-1ravis Cultivation Y

I Cash Outflow - - ______----Years------0 1 2 3 4 5 6 7 8 9 10

- Production inputs 14,228 8,238 9,748 11,407 22,942 11,557 11,557 11,557 22,942 11,557 11,557

- Equipme-t/ Draft p270,000 53,500 5,000 5,000 40,000 40,000 23,500 5,000 5,000 40,000 40,000 Animais - Taxes 2,800 2,800 2 .800 2,800 2 2,8.800 2J89Q 2,800 2.800 2J800 2.800

Slb-total 87,028 64,538 17,548 19,207 65,742 54,357 37,857 19,357 30,742 54,357 54,357

/3 Oown Paymient- 16 ,166 ------/4 Seasanai Credit 12,79n 5,200 6,500 7,800 19,185 7,800 repayment Medioe Tenu Credit - 16,167 16,167 - - repayisen t--- Total Outflo. '15,984 85,905 40,215 27,007 84,927 62,157 37,857 19,357 30,742 54,357 54,357

T1 'ashi Infini. /5 Slaes (net) 75,935 74,575 90,925 117,660 139,065 129,165 129,165 129,165 139,065 129,165 129,165

lth.Incomes/ 50,000 - - - 50,000 50,000 - - - 50,000 50,000

Seasonal Crndit 12,963 5,200 6,500 7,800 19,185 7,800

Mediun Term Credit - - _- -- -

Total Inflnw 138,898 112,109 97,425 175,460 208,250 186,965 129,165 129,165 139,065 129,165 129,165

JII Cash Balance

Annual 22,914 26,204 57,210 98,453 123,323 124,808 91,308 109,808 108,323 74,808 74,808

CuIulative 22,914 49,118 106,328 204,781 328,104 452,912 528,035 637,843 746,166 820,974 895,782

/L Basic assh-ptions see ANNEX3.

12 Purchase of a pair ef oxen in year 0, repla.ement in years 4/5 and 9/10, purchase uf mnitieultivator and - seeder in year 1; purchase of spare parts the following years.

/3 One-third of total cost of eqoipent.

/4 Ioput and implement price cents include financial charges and delivery cout.

/5 Excloding home consumption, animal feed and seeds.

/6 Savings froi previo.s year in Year 0, proceeds nf ox sales for years after Year 0.

August 31, 1973

MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

Impact of Project on Consolidated Govermnaent Finance 1/ (MF Million)

Year: 1 2 I 4 S 6 7 8 9 10 il 12 - 21 22 - 51 Yr1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85- 1994/95- 1993/94 2023/24

INFLOWS

Proceeds from taxes on groundnuts 2/ 553.7 827.1 1,147.7 1,639.6 1,700.3 1,649.8 1,535.3 1,346.4 1,346.4 1,346.4 1,346.4 1,346.4 1,346.4

Duties and taxes on project expenditure 78.0 233.0 169.5 84.7 81.6 53.6 53.6 35.0 32.0 28.9 24.9 24.9 24.9

FAC Grant 454.0 244.8 235.7 161.0 163.9 ------

IDA Credit - 1,350.8 1,151.1 725.8 772.4 ------

Farmers' contribution to increaiental farm inputs costs 3/ 34.7 209.6 343.8 524.9 734.2 482.2 389.8 309.1 309.1 309.1 309.1 309.1 309.1

Total Inflows 1.120.4 2.865.3 3.047.8 3,136.0 3,452.4 2.185.6 1.978.7 1,690.5 1,687.5 1.684.4 1.680.4 1.680.4 1.680.4

OUTFLOWS

Incremental farm inputs cost (unsubsidized) 4/ 212.4 348.8 478.5 619.1 732.7 324.7 329.8 329.8 329.8 329.8 329.8 329.8 329.8

Project administration 5/ 644.3 1,636.8 1,251.9 685.4 665.1 292.3 292.3 225.1 197.9 170.4 139.9 139.9 139.9

Revolving fund for blacksmith and extension workers' vehicles 24.2 14.0 4.7 8.9 (27.6) (18.8) (5.4) ------

Contingencies 103.0 353.5 383.4 455.9 631.0 ------

Total Outflows 983.9 2,353.1 2,118.5 1,769.3 2,001.2 598.2 616.7 554.9 527.7 500.2 469.7 469.7 469.7

Net Flow before Application of Debt Service 136.5 512.2 929.3 14,366.7 1,451.2 1,587.4 1,362.0 1,135.6 1,159.8 1,184.2 1,210.7 1,210.7 1,210.7

Debt Service (service charge + repayment) - 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 65.6 140.6

Net Cash Flow 136.5 484.1 901.2 1,338.6 1,423.1 1,559.3 1,333.9 1,107.5 1,131.7 1,156.1 1,182.6 1,145.1 1,070.1

Cumulative Cash Flow 136.5 620.6 1,521.8 2,860.4 4,283.5 5,842.8 7,176.7 8,284.2 9,415.9 10,570.0 11,754.6 23,205.6 55.308.6

1/ Government Budget, Stabilization Fund, Operation Arachide and SCAER. 2/ Levies on the proceeds from taxes and levies on groundnuts - see Table 2. 3J Inputs supplied through SCAER and Operation Arachide only: includes cash purchases, down payaent and repayments. 4/ Governaent expenditure for farm inputs including credit and subsidies. 5/ Project, capital and operating costs.

April 26, 1974 - MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Impact of Proiect on Consolidated Government Finance

Detailed Proceeds from Taxes and Levies on Groundnuts (MF Million)

1 2 3 4 5 6 7 8 9 10 11 - 15 I. Marketed Output 1/ (tons undecorticated)

- vith project 55,000 64,600 79,200 96,800 105,830 108,740 111,120 111,120 111,120 111,120 111,120 - vithout project 47.840 50,850 54,500 55.530 56,230 56,230 56,230 56.230 56,230 56,230 56,230

Increment 7,160 13,750 24,700 41,270 49,400 52,510 54,890 54.890 54,890 54,890 54,890 II. Proceeds

Value at market 2/ 768.5 1,239.6 1,888.7 2,877.7 3,182.3 3,225.1 3,182.0 2,993.1 2,993.1 2,993.1 2,993.1 Paid to producer 3/ 214.8 412.5 741.0 1,238.1 1,482.0 1,575.3 1,646.7 1,646.7 1,646.7 1,646.7 1,646.7

Accruing to Government 553.7 827.1 1,147.7 1,639.6 1.700.3 1,649.8 1,535.3 1.346.4 1,346.4 1,346.4 1,346.4

TII, Allocation of Proceeds 4/

To Government Budget

- Export taxes 44.9 86.1 154.8 258.6 309.5 329.0 343.9 343.9 343.9 343.9 343.9 - Taxes on Marketing Operations 3.9 7.6 13.7 22.8 27.3 29.0 30.3 30.3 30.3 30.3 30.3

To OA & SCAER 68.7 132.0 232.1 396.2 474.2 504.0 526.9 526.9 526.9 526.9 526.9

To Stabilization Fund 50.1 96.3 172.9 288.8 345.8 367.6 385.7 385.7 385.7 385.7 385.7

To SOMIEX (profits retained) 386.1 505.1 574.2 673.2 543.5 420.2 248.5 59.6 59.6 59.6 59.6

TOTAL 553.7 827.1 1,147.7 1,639.6 1.700.3 1,649.8 1,535.3 1,346.4 1,346.4 1346.4 1.346.4

1/ Marketed output without project is assumed to decrease from 61% (current ratio before project) to 53% as larger areas without adequate marketing facilities are considered. Inversely, marketed output with project will rise to 64% and after a decline in Year 2 and 3 (60 and 62%) will level off at 65%.

2/ Projected value at farm gate plus costs of transportation from farm to market place see Annex 14.

3/ Prices to producer are assumed at MF 30/kg undecorticated groundnut (present official price at market). eX

4/ Based on existing levies (Bareme 1973/74) Rate of taxes for Government budget assumed unchanged. MALI

INTEGRATEDRURAL DEVELOPMENTPROJECT

Foreign Exchange Benefits 1/ (MF Million)

Year: 1 2 3 4 5 6 7 8 9 10 11 - 15

Foreign Exchange Benefits from Croundnuts 1/ 836.6 1,369.6 2,119.7 3,257.2 3,643.3 3,691.9 3,669.8 3,480.7 3,480.7 3,480.7 3,480.7

from Millet/Sorghum 2/ 126.8 441.7 771.6 1,181.6 1,610.0 1,985.2 1,883.8 2,001.4 2,001.4 2,001.4 2,001.4

Total Benefits 963.4 1,811.3 2,891.3 4,438.8 5,253.3 5,677.1 5,553.6 5,482.1 5,482.1 5,482.1 5,482.1

Foreign Exchange Costs 3/ 560.9 1,337.1 1,209.8 1,020.7 1,175.4 322.4 325.1 290.2 276.0 261.7 245.9

Net Foreign Exchange Benefits 402.5 474.2 1,681.5 3,418.1 4,077.9 5,354.7 5,228.5 5,191.9 5,206.1 5,220.4 5,236.2

1/ Based on ineremental marketed output and value at Malian border from Annex 14, Table 4.

2/ Based on net incremental output and value at Malian border derived from Annex 14, Table 9.

3/ See Annex 12.

April 26, 1974.

ANNEX17 Page 1

MALI

INTEGRATEDRURAL DEVELOPMENT PROJECT

RATE OF RETURNCALCULATION

1. Table 1 shows details of Benefits and Expenditures used in calculatingthe economic rate of return for the project.

2. The following assumptionshave been used in the calculations

(a) Project life. The economic life of the project is assumed to be 15 years from project year 1 (1973/74). This takes into account the useful life of the major investments of the project.

(b) Project Benefits. (see Table 2)

(i) Yields and outputs used in the calculationsare shown in Annex 3. Requirementsfor seeds and grains for animal feed have been deducted from production.

(ii) Prices used in the calculationsare the economic prices at farm gate shown in Annex 14, Tables 4 & 8. They are based on internationalprices forecast by the Bank's Economic Analysis and Projections Department. Benefits from groundnutshave been computed on an export basis, no account being taken of any benefit from processing into oil. Benefits from millet and sorghum have been computed on an import substitutionbasis.

(iii) Benefits from the project road improvement component have been treated on the basis of direct transport and vehicles operating cost savings. For return on the road improvement alone see Annex 4.

(i) All costs used in the calculation exclude identified direct taxes, import duties and price contingencies.

(ii) The full unsubsidizedcost of farm inputs and implements, including adequate distributioncosts, has been charged to the rate of return. ANNEX 17 Page 2

(iii) Incremental farm labor requirementand cost are shown in Table 3. The wage rate of MF 200/manday used in costing labor represents the estimated average earning of the "Navetane," a seasonal migrant farm worker; the "Navetanat" is a major source of hired farm labor in Mali. This rate is regarded as a fair compensation for the disutility involved in the additional effort required from farmers in the project. It compares with the return to labor for a farmer using almost no modern inputs (see Annex 15) and represents 57% of the official daily rate for casual laborers in rural areas (MF 350).

(iv) Project administrationcosts include costs of supporting services provided through the ancillary subprojects. The main subproject costs have been adjusted to include the proportionof ongoing project extension staff and operating costs which would have been given other developmentassignments in the absence of the new project. This proportion is estimated to 2/3 of 1972/73 extension staff and operating costs.

3. Under the foregoing assumptions the estimated economic rate of return of the project is 91.2% over 15 years and 91.3% over 20 years. The senisitivityhas been tested over wide varieties of conditionsand the ftol1owinçare considered the most representative.

Costs Benefits from R/R Groundnuts MfilletSorghum (%)

110 100 100 69 120 100 100 54 130 100 100 44 100 90 90 67 100 80 80 49 100 75 50 30. 110 90 90 53 130 90 90 33 120 80 80 29 110 75 50 22 MALI

TINTEGRATEDRURAL DEVELO0PMENTPROJECT

Project Economic Cash Flow (MF Million)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 ïear 11-15 1983/84- 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1987/88

I Project Benefits

Value of'incremiental production Groundnut 758.1 1,024.7 1,773.9 2,873.9 3,229.5 3,335.7 3,326.9 3,125.0 3,125.0 3,125.0 3,125.0 Millet/Sorghum 115.6 402.5 703,2 1,068.6 1,456.1 1,795.5 1,680.0 1,784.9 1,784.9 1,784.9 1,784.9

Total T 873.7 1,427.2 2,477.1 3,942.5 4,685.6 5,131.2 5,006.9 4,909.9 4,909.9 4,909.9 4,909.9

II Project Expenditures a) Project AdministrationCosts Developsientexpenditures 2 68.5 1,,605.8 1,256.6 694.3 665.1 292.3 292.3 225.1 197.9 170.4 139.9 OA expendltures-3/ 193.2 193.2 193.2 193.2 193.2 193.2 193.2 148.8 1-30.8 112.6 92.5

Subtotai 861.1& 1,799.0 1,449.8 887.5 858.3 485.5 485.5 373.9 328.7 283.0 232.4 Taxes on project expenditure~-' 78.0 233.0 169.5 84.7 81-.6 53.6 53.6 35.0 32.0 28.9 24.9 Taxes on OA expenditure ~/14.5 -4.5 î4.5 14.5 14.5 14.5 14.5 11.2 9. 8.4 6.9

Subtotal 92.5 247.5 184.0 99.2 96.i 68.1 68.1 46.2 41.8 37.3 31.8

Total administrationcost 769.3 1,551.5 1,265.8 788.3 762.2 417.4 417.4 327.7 286.9 245.7 200.6

b) On FarsiCosts

Incremsentalfarm labor 5/76.0 327.6 517.4 790.0 927.0 1,026.0 1,037.8 i,042.8 1,042.8 1,042.8 1,042.8

Incrementalfarm inputs and equipment 6/ 211.8 348.3 480.3 639.1 766.4 360.4 365.5 365.5 365.5 365.5 421.5

Sondry expenditures 8.6 22.2 38.9 59.4 84.2 92.3 95.7 96. 96. 9689

Su.bto+&i 296.4 698.1 1,036.6 1,488.5 1,777.6 1,478.7 1,499.0 1,505.1 1,505.1 1,505.1 1,561.i

c) Physical Contingencies 44.8 101.1 88.4 67.6 72.2 ------

Total II 1,110.5 2,350.7 2,390.8 2,344.4 2,612.0 1,896.1 1,916.4 1,832.8 1,792.0 1,750.8 1,76i.7

TII Net EconomicBenefits (236.8) (923.5) 86.3 1,598.1 2,073. 3,235.1 3,090.5 3,077.1 3,117.9 3,159.1 3,148.2

EcononiicRate of Return: 15 years; 91.2%; 20 years; 91.S

1/ See Table 2. See Annex 12. 2/3 of ongoin'gCA staff and operating costs see Annex 12. About 20% of operating costs.

February 14, 1974HH MALI

INTEGRATED RURAL DEVELOPMENTPROJECT

Economic Cash Flow Calculation

Project Berefits

A. Quantities (Tons)

Groundnuts Year: 1 2 3 4 5 6 7 8

Incremental Production 7,470 13,520 26,830 46,480 56,430 61,215 64,885 64,885 Incremental Seeds 283 1921 3100 4.316159 5,748 6199 6,199

Net Increment 7,187 11,599 23,730 42,164 51,271 55,467 58,686 58,686

Millet

Incremental Production 1,905 7,020 12,215 20,020 27,255 33,135 36,355 38,635 Incremental Seeds 10 425 484 566 625 663 710 735 Animal Feed /L 66 226 604 1,092 1,610 1,622 2,508 2,694

Net Increment 1,829 6,369 11,127 18,362 25,020 30,850 33,137 35,206

B. Vlalue (MF'000,000) /2

Groundnuts 758.1 1,024.7 1,773.9 2,873.9 3,229.5 3,335.7 3,326.9 3,125.0 Millet/Sorghum 115.6 402.5 703.2 1.068.6 1,456.1 1,795.5 1.680.0 1,784.9

Total 873.7 1,427.2 2,477.1 3,942.5 4,685.6 5,131.2 5,006.9 4,909.9

/1 See Table 3.

/2 Economic farm-gate prices used for computation are in Annex 14, Tables 4 anc 9.

December 28, 1973 |x o MALI g INTEGRATED RURAL DEVELOPMENTPROJECT

Incremental Farm Labor

'-o Year: 1 2 3 4 5 6 7 8

Labor Requirement 1/ ('000 of Mandays)

Groundnuts 303 841 1,594 2,620 3,054 3,413 3,342 3,342 Millet/Sorghum 77 797 993 1,330 1,720

Total 380 1,638 2,587 3,950 4,635 5,133 5,189 5,214

Value (F'O000,000) (Using MF 200/manday) 76 327.6 517.4 790.0 927.0 1,026.6 1,037.8 1,042.8

Oxen Feed Requirement

Incremental Working Days (000)

Groundnuts 30 77 165 283 427 497 670 670 Millet/Sorghum 3 36 137 263 378 314 584 677

Total 33 113 302 546 805 811 1,254 1,347

Feed Requirement 2/ (Tons of grains) 66 226 604 1,092 1,610 1,622 2,508 2,694

1/ Net increment, taking into account saving due to ox-powered cultivation. 2/ 2 kg of millet/sorghum/pair of oxen/working day.

@,Iz

MALI INTERGRATED RURAL DEVELOPMENTPROJECT PROJECT ORGANIZATION

PRODUCTIONMINISTER

r GeneralDirectorate Institu te of of Agriculture Rural Economy

I ~~~~~~~~~~~~~~~IN

Boardof _ _ _ Project GeneralManager _ _ _Evaluation Unit Directors /

Deputy GeneralManager

Chief of Personnel TechnicalManager Chief Accountant andsocial matters

Head Dy.Technical Credit Accounts O Training STR ODC-:1 Manager

Sector _ _ _ 0.D.C._ _ _Sector .__ . . . __ Sector _ _ Road Agents Chief Bookkeeper Gangs

_`2SubSector_ __ _ SubSector Chief Bookkeeper _

BasicSector Chiefss- - - -

FARM E- =_

ANCILLARY SUB PROJECTS

A. Research Jointly with Directorateof Agricultural Researchof l.E.R. B. Rural track improvement Direction Nationaledes TravauxPublics (DNTPi C. Functional literacy Direcorateof Functional Literacy D. Medical Assistance Directorateof Medical Service E. Veterinary Assistance Servicede le levageet de la Sante Animale (SESA)

STR = Servicedes Travaux Routiers 2/ ODC = Ox Drawn Cultivation World Bank-8320

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4 ~~~~~~~~~~~~~REPUBLIC0F MALI INTEGRATED RURAL ~~~~~~~~~~~~~~~~~~~DEVELOPMENTPROJECT 13 RAINFALL

sTrArECAPITAL

(4j REGIONAL CAPITAL12 12' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~@ o ADMINISTRATIVE CENTER 0F CERCLE 4o SREGIONAL - - ~~~~~~~~~- - BOUNDARIES ALGERIA 6 7H'AR'A~~~~~~~~- INTERNATIONAL BOIUNDARIES - ANNUAL RAINFALL IN MILLIMETERS MAURITANIA REPUBLIC III ~~~~~~RIVERS ALI ~ ~~ ~ ~~ ~ ~~ ~ ~~ ~~~~~~~~~~~~~~~~~~~~~ L~~~~~~~~~~~~~~~~~~COLOGICALZONES ALI N 1 G E R

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