B- W~~~~~~~..., t U/ V I X

Document of The World Bank

FOROFFICIAL USE ONLY

Public Disclosure Authorized MICROFICHE COPY ReportNo. 9618-UNI Report No. 9618--UNI Type: (SAR) RANADE, C./ X34486 / J-5241/ AF4AD

STAFF APPRAISAL REPORT

Public Disclosure Authorized FEDERAL REPUBLIC OF

NATIONAL FADAMADEVELOPMENT PROJECT

FEBRUARY 4, 1992 Public Disclosure Authorized

Agriculture Operations Division Public Disclosure Authorized Country Department IV

|Ths document has a restdted distdbudon and may he ued by redplenu only in the perfonnance of t . . '--I' II J[. I a I I II CURRENCY EOUIVALENTS

!.urrency Unit k Naira (N) US$1 = N9.50 N1 (100 kobos) US$0.105

WEIGHTS AND MEASURES

Unless otherwise stated all weights and measures used in this report are metric.

1 metric ton (m ton) = 2,205 pounds Qb) 1 hectare (ha) = 2.47 acres (ac) 1 kilometer (km) = 0.62 mile (mi) 1 meter (m) = 3.28 feet (ft)

1 millimeter(mm) - 0.04 inch (in)

FISC:ALYEAR

January 1 - December31 FOR OFFICIALUSE ONLY FEDERALREPUIC OF NGERIA

NATIONAL FADAMA DEVELOPMENT PROaIEi

LIST OF ACRONYMS

ADP AgriculturalDevelopment Project APMEU AgriculturalProjects Monitoringand Evaluation Unit BASIRDA Integrated Rural DevelopmentAuthority BSADP Bauchi State AgriculturalDevelopment Program CPA CooperativeFinancing Agency EA EnvironmentalAssessment EC European Community FACU Federal AgriculturalCoordinating Unit FDA Federal Departmentof Agriculture FDD Fadama DevelopmentDepartment FGN Federal Governmentof Nigeria FID Fadama InfrastructureDivision FMAWRRD Federal Ministryof Agriculture, Water Resourcesand Rural Development FUA Fadama Users Association FUAD Fadama Users AssociationDivision FASCOM Farmers Supply Company IFAD InternationalFund for Agricultural Development ILO InternationalLabour Organization KNARDA Agriculturaland Rural DevelopmentAuthority LGA Local GovernmentArea LGC Local GovermnentCouncil MANR Ministry of Agriculturaland Natural Resources MSADP Multi-StateAgricultural DevelopmentProject NACB Nigerian Agricultural and CooperativeBank NATSP National AgriculturalTechnology Support Project NFDP National Fadama DevelopmentProject NFF National Fadama Facility NFFCC National Fadama Fund CoordinatingCommittee ODA Overseas DevelopmentAdministration (U.K.) PCC Project CoordinatingCommnittee PMU Project MonitoringUnit RBDA River Basin DevelopmentAuthority RDA Rural DevelopmentAuthority SAP StructuralAdjustment Program SARDA Agriculturaland Rural DevelopmentAuthority SG State Government SIA State ImplementationAgency TSC TechnicalServices Contract UNDP United Nations DevelopmentProgramme

of their officialduties. Its contents may not otherwise be disclosedwithout WorldBank authorization. FEDERAL REPUBLIC OF NIGERIA

NATIONAL FADAMA DEVYELOPMENTPROJECT

TABLE OF CONTENTS

Page No.

LOAN AND PROJECT SUMMARY...... iv - vi

I. BACKGROUND ...... 1

A. Introduction ...... 1 B. AgriculturalSector and EconcnnicEnvironment ...... 1 C. Government's AgriculturalPolicies and. the Bank's Sector AssistanceStrategy ...... 3 D. Donor Funded Projects in Agriculture ...... 4

II. FADAMA SUBSECTOR: EXPERIENCE,VISION AND TRANSMON. 7

A. Description. 7 B. Need for Irrigation ...... 8 C. Techniquesof Small-ScaleIrrigation in Fadamas ...... 8

1. Lift Irrigation by Direct Pumping ...... 9 2. Pumpingfrom ShallowAquifer ...... 9 3. ControlledFlooding ...... 10

D. Expansionof Fadama Irrigation ...... 10 E. Future Vision, Reasons for Market Failure and Transition Steps ......

1. GovernmentSupport ...... 11 2. Technologyand Extension ...... 1.....1 3. Fadama Infrastructure ...... 12 4. Financial Intermediation ...... 12 5. Farmer Organizations ...... 14 6. ContractingFadama Development.14 7. EnvironmentalProtection .15

The report is based on the findings of an appraisalmission which visited Nigeria in March 1991, comprisingMessrs. C.G. Ranade (MissionLeader), L. Campbell, R. Tillman, D. Ilebani (World Bank); A. Schumacher,M. Hossain and G. Schokman(consultants); Q. Umar, M. Nasim and P. Yadav (FACU). Messrs. S. Barghoutiand R. Deshpandewere the peer reviewers. Ms. M.L. Ahkee provided assistancein the cost tables of the report and Mmes. A. Bagai and Ellen Storm provided the secretarialsupport. Messrs. J. Joyce and E. Lim are the managingDivision Chief and the Departnent Director, respectively, for the operation. - ii

Page No.

III. THE PROJECT ...... 18

A. Project Rationale and Objectives ...... 18 B. Project Area ...... 18 C. Detailed Description ...... 20

1. ShallowTubewells ...... 20 2. Fadama Infrastructure ...... 21 3. InstitutionalDevelopment ...... 22 4. Planning, Monitoringand Evaluation ...... 22 5. NationalFadama Fund ...... 24

IV. COST ESTIMATESAND FINANCIALARRANGEMENTS ...... 25

A. Project Costs ...... 25 B. Financing Plan ...... 25 C. Procurement ...... 26 D. Disbursement...... 28 E. Auditingand Reporting Requirements...... 29

V. PROJECT IMPLEMENTATION.31

A. Implementationof the Fadama DevelopmentPrograms through the ADPs .31 B. Federal CoordinatingRole .32 C. Implementationof Specific Components ...... 32 D. Mid-Term and CompletionReviews .36

VI. FINANCIALAND ECONOMICANALYSIS .37

A. Markets .37 B. Financial Analysis.37 C. EconomicAnalysis .38

VIl. BENEFITS,JUSTIFICATION AND RISKS . .40

A. Indirect Benefits.40 B. Direct Benefits.41 C. Risks .42

VIII. AGREEMENTSREACHED AND RECOMMENDATION...... 44 ANNE=

Annex I - Potential Irrigable Area Annex11 - IrrigatedArea in 1990 Annex III - Area BroughtUnder ShallowTubawells, Direct Pumping and Controlled Flooding in Bauchi, Kano and Sokoto During 1983-1990 Annex IV - Future Vision, Current Status and Transition Steps for Fadama Development AnnexV - EnvironmentalOverview Annex VI - Functionsand Workingof Fadama Users Associations Annex Vn - EligibilityCriteria for Allocationof Funds Under the National Fadama Fund AnnexVIII - Project Cost Tables Annex IX - Estimated Scheduleof Disbursement AnnexX - OrganizationalChart Annex XI - Terms of Referencefor EnvironmentalAssessment Annex XH - Terms of Referencefor Irrigation Engineer, Irrigation Agronomist, and Contract Administrator Annex XmI - Technical Assistanceand Local Consultants Annex XIV - Project ImplementationSchedule Annex XV - Project MonitoringRequirements Annex XVI - Project Supervision Annex XVII - Tables on Financial and Economic Returns Annex XVm - Cost Recovery Arrangements Annex XIX - DocumentsAvailable in Project File

IBRD NO. 23119 - Nigeria: Project States IBRD NO. 23158 - Nigeria: GroundwaterProvinces - iv-

rEDERAL REPUBLICOF NIGERIA

NATIONALFADAMA DEVELOPMENT PROJECT

LOAN AND PROJECT SUMMARY

B>orrowel: Federal Republic of Nigeria

Beneficiarie: Federal Republicof Nigeria, and Bauchi, Jigawa, Kano, Kebbi, Sokotoand other eligible States.

Amnt: US$67.5 million

Terms: Payable over 20 years, includinga five-year grace period at the Banlk'sstandard variable rate.

On-LendingTerms: The Federal Govermnentwould on-lend, on the same terms as the Bank loan, US $55 million to Bauchi, Jigawa, Kano, Kebbi and Sokoto States, with each being eligible for at least US $3.5 million with additionalamounts being drawn from the balance of US $37.5 million on a first-come-first-servedbasis. An amount of US $5.9 million for a NationalFadama Facility would be on-lent to other states, on the same terms as the Bank loan, on the basis of specific eiigibilitycriteria, such as completionof a shallow aquifer survey and availabilityof qualified and experiencedstaff to implementthe project. The states would bear the foreign exchangerisk. The Federal Govermmentwould retain US$6.6 million for environmentalassessment, monitoring and studies.

Project Description: The project would construct about 50,000 shallow tubewells in Bauchi, Jigawa, Kano, Kebbi, Sokoto and other eligible states over a period of four years. The maximumirrigation potential would be 100,000 ha, but in practice it is unlikelythat this potential would be fully realized, and a conservativeassumption of 50,000 ha of irrigated cropping has been used for calculatingthe project benefits. In addition to providing for new irrigation, the project would: (a) privatize drilling; (b) construct fadamaand access roads and marketinginfrastructure; (c) simplify drilling technologyfor shallowtubewells, conduct aquifer studies and upgrade irrigation technologies; (d) organize fadama farmers for irrigation management, cost recovery and better access to credit, marketing and other services; and (e) complete a full environmentalassessment of future fadama development.

Estimatb Ca

Local Forie Qn (US$ Million)

A. ShallowTubewells ,/ 29.0 28.3 57.3 B. Fadama Infrastructure 3.2 6.6 9.8 C. InstitutionalDevelopment 3.0 3.8 6.8 D. Planning, Monitoringand Evaluationk/ 2.6 7.4 10.0 E. National Fadama Facility 4.0 3.7 7.7

Total Base Costs: 41.8 49.8 91.6

Physical Contingencies 3.9 4.4 8.3 Price Contingencies 2.3 3.7 6.0

Total Project Costs: q/ 48.0 57.9 105.9

.a Includes the cost of pumps. k/ Includes US$ 1.6 million for environmentalassessment. c/ Of which US$ 3.8 million in duties and taxes.

Financing Pla IBRD 9.6 57.9 67.5 Federal Government 4.7 0.0 4.7 Farmers 29.2 0.0 29.2 State Governments 4.5 _ 4,

Total: 48 0L.9L 15 - vi -

Esiatw DDsurmet

IBRD Fiscal Year EY2 EFY9 FY94 EY9 EX26 EY9

Annual 4.0 19.5 13.5 18.0 11.3 1.2 Cumulative 4.0 23.5 37.0 55.0 66.3 67.5

Benefits and Risks: The project would contributeto food security and poverty alleviation by increasingproduction and the incomes of smallholders. It would help transfer simple but appropriate technologyfor small-scale irrigationwhich is much cheaper than large-scaleirrigation which has so far failed to meet its potential. The environmentalassessment (EA) of future fadama developmentat nationallevel would help in developing a nationalcapacity for implementingEA to ensure effective compliancewith environmentalrequirements in fadama development. Possible risks include: (a) overuse and/or mis- location of groundwaterpumping units; and (b) poor cost recovery. These risks would be minimizedunder the project by the program of monitoringwater resources, formation of Fadama Users Associations,use of indirect means for full cost recovery and various up-front actions in major areas before loan effectiveness.

EconomicRate of R]eun: 24%

MaM: IBRD No. 23119 - Nigeria: Project States IBRD No. 23158 - Nigeria: GroundwaterProvinces FEDERAL REPUBLICOF NIGERIA

NATIONALFADAMA DEVELOPMENTPROJECT

STAFF APPRAISALREPORT

I. ,BACKGR9QUN

A. Introduction

1.1 The Federal governmentof Nigeria (FGN) has requested a Bank loan of US $67.5 million equivalentto finance a project for developingfadama lands (flood-plains)by introducingsmall-scale irrigation. The project would be implementedmainly in Bauchi, Jigawa, Kano, Kebbi and SokotoStates, which have pioneeredfadama developmentunder the earlier Bank funded Agricultural DevelopmentProjects (ADP). It would also begin fadama developmentin other eligible states.

1.2 One of the successfulinitiatives of the Bank-fundedADPs in Nigeria has been small- scale, low-cost, farmer-managedirrigation in the fadamas. This has contrastedwith the large- scale irrigation schemesdeveloped by the River Basin DevelopmentAuthorities (RBDAs), which have involved high capital costs and long periods to put lands under irrigation. Small- scale irrigation in the fadamnashas been identifiedas a key source of agriculturalgrowth for the northern states. So far, only about 7 percent of the potential has been exploited. This project aims at acceleratingthe pace of fadamadevelopment by: (a) improvinginfrastructure into and within the fadamas; (b) using improvedbut simpletechnology for developmentof shallowtubewells; (c) privatizingdrilling activitiesand buildingthe capacity of state and federal institutionsin support of fadamadevelopment; (d) improvingirrigation management through water users associations;(e) conductingaquifer studies and monitoringand upgrading irrigation technologies;and (f) undertakingenvironmental assessment for further expansionof irrigated agriculture.

1.3 The project was prepared by the Federal AgriculturalCoordinating Unit (FACU) with active involvementof Sokoto, Kano and Bauchi State Governmentsand assistance from FAO/CP and the Bank. It was appraised by the Bank in March 1991.

B. Agricultural Sector and EconomicEnvironment

1.4 Agriculture is the dominantsector of the Nigerian economy. It accounts for 35 percent of the GDP and employstwo-thirds of the Nigerian labor force. Smallholdersare the backboneof the agricultural sector, who presently cultivateland by traditionalmethods under rainfed conditions. The country is endowedwith a wide range ot agro-ecologicalzones permittinga diversifiedfarming system with annual crops, such as cassava, yam, sorghum, millet, maize, rice, wheat, cowpeas, groundnutand cotton, and perennial crops of cocoa, oilpalm, rubber, etc. Livestockproduction is mainly from migratory cattle herders. A recent -2 -

sector reportl/ has shown that the country has a strong comparativeadvantage in production of the above crops, and proven technologiesexist for increasingproduction and productivity in such a well diversified agricultureunder rainfed conditions. However, future growth based entirely on the rainfed farming is likely to fall short of the needs of the rapidly growing population. The report, however, recognizesthat there are substantialsurface and groundwaterresources in the fadamas, particularlyalong the northern rivers and that harnessingthese resourcesby developingsmall-scale, private irrigation can make a major contributionto increasingfood supplies.

1.5 The agricultural sector's performancehas changed inversely with the rise and fall in oil revenues. Agriculturesuffered severely during the oil boom of the seventiesbecause of its reduced ability to retain labor due to the appreciationof the Naira, increases in non-farm wages and concentrationof public expenditurein sectors other than agriculture. The share of agriculture in GDP fell from 45 percent to 27 percent between 1970-82,while exports became insignificantwith a sharp decline in the productionof cash crops. The output of seven staple food crops - sorghum, millet, maize, rice, wheat, yam and cassava - rose between 1970-82, but at an average rate of only 1.2 percent per year; far less than the populationgrowth of 3.4 percent. Even after oil exports fell in the early eighties, the Naira remained over-valued, while the Governmenttaxed the export crop sector through the operations of commodity boards. A policy of cheap food was also followed, which resulted in a tenfold increase in imports during the seventies.

1.6 The Structural AdjustmentProgram (SAP) which started in 1986, resulted in significantimprovements in incentivesfor the agriculturalsector. The Naira depreciated considerablyfrom NI = US$1 in October 1986 to N9.50 = US$1 by March 1991. Abolitionof the commodityboards brought about a significantincrease in producer prices for several export crops. Import restrictions were broadened to includebans on the import of wheat, maize, rice, vegetableoil, poultry and animal feed. Interest rate ceilings on rural loans were removed, while exporters were allowed to retain foreign exchangeearnings in local accounts for financingimports.

1.7 These measureshad a positive impact on agriculture. The total value of exports of major agriculturalcommodities in 1988 increasedby 100 percent over 1987 levels in current Naira. The export increase has been concentratedon cocoa, but the output of rubber, palm oil and cotton has also increased. Furthermore, a number of manufacturingenterprises has begun to use local agriculturalproducts, with backward integrationand investmentin the sector. In the case of food crops, the abolitionof the commodityboards had no direct impact on prices and, in effect the depreciationof the Naira shifted incentivesin favor of cash crops. Moreover, poor weather in 1987 had an adverse effect on crop yields. However, food output recovered and increased by 5.5% in 1988.

1.8 Current indicationssuggest continuedgrowth in agriculture. However, to achieve it, several constraintswill need to be removed. These are: (a) continuedpublic sector control of fertilizer distribution; (a) weak policy planning capacity and the related lack of prioritization

1/ The World Bank 'Niaeria - Strategy for AgriculturalGrowth", Report No. 7988-UNI, dated December27, 1989. of public investment;(c) poorly developedinfrastructure; (d) imperfectionsin the rural finance market which limits access to institutionalcredit; and (e) weak agricultural services, especiallyresearch.

C. GoverMMent'sAericultural Policies and the Bank's SectorAssistance Slrateg2

1.9 The Governmentis aware of the continuingconstraints to agriculture and recognizes that the sector must grow substantiallyto feed and provide employmentfor a population increasing at around 3.4 percent p.a. and also to produce raw materials for industrialdevelop- ment. In January 1987, the Governmentissued a Statementof Agricultural Policy which includedthe following key objectives: (a) self-sufficiencyin basic food commodities(b) increasedagricultural production for export and raw industrialmaterials for local use; and (c) prevention of environmentaldegradation. The recent macro-economicpolicies pursued by the Government, which support these objectives,provide incentivesto growers and exporters. In line with the privatizationpolicy under SAP, the Governmentproposes to withdrawfrom direct investmentsin production and to limit its equity participationin state-ownedenterprises. 'The strategy for fadamadevelopment is in line with the government's privatizationpolicy.

1.10 Followingpublication of the AgriculturalPolicy, the Bank and the Government have held three sectoral consultationsand arrived at an agreed policy framework and operational strategy for the Bank's sector assistance to Nigeria. To achieve an agriculturalgrowth rate of four percent per annum over the mediumterm, the Bank assistanceis targeted at the following key actions:

(a) intensifyingefforts to improve agriculturalextension, build national research capacity, improve quality seed supply, and streamline input distribution;

(b) accelera.;ng the ongoing private small-scaleirrigation program in fadamas and developmentof a prioritized program of high return investmentsto put to full use past investmentsin medium and large-scale water and irrigation projects;

(c) launchinga new fertilizer sector action plan which focusseson improved availability, reduced subsidies,private and cooperativedistribution, and improved location-specificingredient formulation and recommendations;

(d) launchinga new livestocksector action plan with active participationof ADPs and focus on policies and programs for achievingcrop/livestock integration and improveddraft power availability;

(e) developingan environmentalaction program to ensure sustainabilityof agriculturalgrowth;

(f) improvingrural marketingsystems through accelerationof the program for rural feeder roads, rural market developmentand increased private and cooperativestorage; -4-

(g) strengtheningthe systemsof rural credit supplyto encourage capital formation and increasedprivate sector investmentsin agriculture; and

(h) improvingagricultural technologies, particularly those that are attainableby smatlholdersand can be sustained.

1.11 Investmentin small-scaleirrigation in the fadamas and reforms in the fertilizer sector are crucial for rapidly acceleratingagricultural growth. This project would be a major step forward by the Bank and the Covernmentin support of small-scaleirrigation. The Bank has also been in dialogue with the FGN on the issue of fertilizer pricing and marketingpolicy. The governmenthas recently doubled the farm gate price of fertilizer but the subsidy is still high, estimatedto be at least 84% for importedfertilizer. Privatizationof fertilizer distributionhas been constrainedby slow progress towards eliminationof the subsidy. The governmenthas appointeda task force on privatizationof fertilizer distributionbut a coherent policy for marketingand rapid reduction in the subsidy has not yet been decided.

D. Donor Funded Projects in Agriculture

1.12 Other Donors. The Bank has been the major external funding source for Nigeria's agriculture. Other donors includethe European Community(E.C.), the InternationalFund for AgriculturalDevelopment (IFAD), African DevelopmentBank, United Nations DevelopmentProgramme (UNDP), Food and AgricultureOrganization (FAO), International Labour Organization(ILO), and the UK Overseas DevelopmentAdministration (ODA). The EC is now fundingthree rural developmentprojects amountingto about US$180 million and four other projects which are: Sokoto EnvironmentProject (US$34 million), Katsina AfforestationProgram (US$9.5 million), MambillaTea IrrigationProject (US$3 million), and Extension and Research Liaison (US$34million). IFAD has financed a small componentfor fadama developmentin the CommunityDevelopment Project recently negotiatedfor (US$12.2million). This is the only other small-scaleirrigation project externally funded other than by the World Bank. IFAD has also identifliedprojects for Kano, Sokoto and middle-beltstates which are similar to the CommunityDevelopment Project in Katsina. Two other on-going IFAD projects are the Cassava Program (US$12million) and the Small- scale Fishery Project (US$15.0million). The FAO and UNDP have several small on-going and proposed projects in the followingareas: agriculturalcommunication, fisheries, agriculturaldata bank, settlementof Fulani pastoralist, developmentof wheatlessbread, study of the impact of the SAP, forest resource survey, ginger seed, utilizationof wood residues, preventionof post-harvestlosses, oil palm research, preparatoryassistance for the establishmentof a national agriculturalland resourcesgeographic information system and assistanceto the NationalBureau for Plant GeneticResources. Except for the first three projects, which receive finance of US$3.36 million, US$2.17 million and US$1.25 million respectively,all other UNDP/FAO projects receive less than one million dollars.

1.13 Bank Operations. Since 1975, Nigeria has received Bank assistance in the following areas: AgriculturalSector Loan (US$9 million); Forestry (US$102million); Livestock (US$102million); Tree Crops (US$229million); AgriculturalDevelopment Projects (US $1.16 billion); Fertilizer Imports (US$250million); Seed Project (US$14million); and AgriculturalResearch (US$78million). The main focus of the lending program has been on the state-levelADPs, whose principal objectivehas been to increase smallholderincome and the state-levelADPs, whose principal objective has been to increasesmallholder income and food crop production through a package of support services with emphasison extension, seed multiplication,rural infrastructureand input supply. The Bank has not yet financed any free- standing irrigation project in Nigeria. Its lending through the ADPs for small-scale irrigation in fadama, although recognizedas a success story, has been modest and estimated to be less than one percent of the total lending for agriculture.

1.14 Lessons Learnt from ADPs. Key lessons from the completedADPs, as well as from the supervisionof various componentsof the on-going ADPs, can be grouped as follows: 2/ Extension: (i) technical packages must be based on proven technologyacceptable to farmers; (ii) appropriate on-farm research programs should be used to test improvementsto accepted practices; (iii) close linkages must be developedwith national research institutesso that their programs respond to problems experiencedat farm level; and (iv) extension services should be unified to ensure a single source of technical adviceto reduce overlap and inefficiency. Fadama Development: althoughone of the most successfulcomponents, it needs to be strengthenedto give high priority and special focus to farmer organization, private sector participationand supporting infrastructurefor achieving optimumdevelopment impact. Sate Operated Institutions: (i) the distributionof agriculturalinputs should be privatized for efficient and sustained delivery; and (ii) the process of privatizationshould be accompaniedby a review of state public expendituresthrough all key agriculturalinstitutions. Rural InfrastructureDevelopment: there is a need for examiningmore sustainablemethods of road constructionand maintenance,such as the constructionby private contractorsand maintenance by LGCs with beneficiary participationwhere feasible.

1.15 The above lessons have been incorporatedin the design of more recent projects such as the Multi-StateAgricultural Development Projects (MSADP)II and III, which became effective in 1989 and 1990 respectively, and in the redesign of other on-going ADPs.

1.16 Continuityin various ADP activities is being achieved in Bauchi, Kano and Sokoto, and several other states by bringing them under newly-formedRural DevelopmentAuthorities (RDAs) which function as implementingarms of the state Ministriesof Agricultureand Natural Resources(MANR). The nationalprojects in key areas such as research, seed services, technologydissemination, fadama development and rural infrastructure, including input supply, will continueto be implementedthrough ADPs. Two national projects in research and seed services are already effective. Technologydissemination and fadama developmentwill be implementedthrough a proposed National AgriculturalTechnology SupportProject (NATSP) and the proposed NationalFadama DevelopmentProject, respectively. A nationalproject for supportingAgricultural Marketing is under preparation and includes: (a) a program of privatizationof input supply; (b) support for rural infrastructurelinked to a program of transferringeventual responsibilityto the local governmentauthorities (LGAs): and (c) a review of public expenditureand state institutions, includingstate-operated farm input supply companies,for strengtheningthe state MANRs. A NationalProject for Natural ResourcesManagement is also under preparation. A separate project on agricultural educationis also under preparationfor meeting human resource developmentneeds of the sector.

2/ See World Bank, Project CompletionReports for Bauchi. Kano and SokotoADPs, June 1991. -6 -

1.17 Lessons Lea from Past Irrigation in Sub-SaharanAfrica. A pervasive theme emerging from experiencesin irrigation in Sub-SaharanAfrica is the relatively successful record of small-scaleprivate irrigation systems in contrast to the spotty record of large-scale public schemes. Experience with irrigationdevelopment, in Nigeria as well as in other African countries, demonstratesthat the sub-sectoris sufferingfrom a number of technical, financial, institutionaland human resource weaknesses.a/ Such weaknessesare present in the context of small-scaleirrigation in fadamas in Nigeria and are elaborated in the next chapter.

I/ S. Barghouti and G. Le Moigne, Irrigation in Sub-Saharan.Africa: The Development of Public and Private System, World Bank TechnicalPaper No. 123, 1990; and World Bank "AnnualReview of EvaluationResults for 1989", Agricultureand Rural DevelopmentSector Working Paper, OED, August 29, 1990. - 7 -

11. EADAMASUBSECTOR: EXPERIENCE.VISION AND TRANSITION

A. Desgription

2.1 In the northern states, the fadamas are mainly low-lyingflood plains composedof fluvial deposits and containingextensive exploitable aquifers. Elsewhere in the North any low-lyingseasonally flooded area is known as a fadama. Major fadamas occur along the flood plains of the Niger, Sokoto-Rima,Benue and Yobe river systems. They vary in width from a few hundred meters to as much as 20 km and encompassthe land and water resources that could be developedfor irrigated agriculture. Fadama formation is a geomorphological phenomenonthat has resulted from the combinationof slow river bed accretion and periods of high rainfall that caused extensive,high velocity flooding and depositionof sorted materials over the flood plains. Most of the coarse sands that constitutethe matrix of productive aquifers were depositedduring the Pleistocenepluvials. Subsequentflooding has overlain these with a mixtureof generally finer sands, silts and clays. These vary in thickness from about one meter to seven or eight meters. Depositionof sedimentswas accompaniedby raising the base levels of the rivers. The shallow aquifers constitutedby the sands generally lie below the flood levels and are hydraulicallyconnected to river systems. Many are thus subject to rechargeduring the wet season floods.

2.2 EcQlogy. Fadamas are remarkablydifferent from adjacent uplands in terms of their ecology and micro-climate. They are low-lying,flood-prone, slow-drainingareas and generally possess finer textured and less acid soils. These factors have resulted in fadama soils with a markedly different moisture regime from upland soils. As a result, the natural vegetationcover has been characterizedby a compositeof thick acacia scrubland, open grassland and open seasonallyor permanentlyponded areas with sedges and reeds. Traditionaluse of fadamas by pastoralists and their herds as well as by settled agriculturists and fishermen has had a dramatic effect on the ecology. The original scrub has been replaced in many places by grasslands. The land adjacent to the numerousvillages that dot the margins of fadamas has been entirely cleared for arable farming and is availableto pastoralists only after the crops are harvested. The retained moisture in the fadamasoils as well as their relative fertility, due in part to seasonal flooding in the past, supports good quality fodder well into the dry season, when the uplands resources would have been largely exhausted. They thus form an essentialelement in the pasturing cycle of pastoralists. Farmers have traditionallyworked in river margins of the fadamas, where they could raise water with shadoofsto irrigate small parcels of vegetablesand rice.

2.3 Extensiveshallow depressionalponds that are a feature of some fadamas receive flood waters in the wet season and retain it well into the dry season. Fish of various species migrate into ponded areas with in-flowingwater and find an ample supply of feed in vegetable matter and insects that have colonizedthe area in dry periods. As a result of this migration of fish, many of the settlementsin and along the margins of fadamas have come to depend on fish as an important dietary component. It is also probable that these wetlandsprovided, and continueto provide at a reduced level, an importanthabitat for waterfowl and other migratory palearctic species. They also play an importantrole in the recharge of the shallow groundwatersystem through infiltration. As ponded water dries out, the inhabitantsof the - 8 -

area cultivatethe margins of the ponds to produce rice and vegetables. Thus in many communitiesalong the fadamas people have practiced dual occupationsof agriculture and fishing. Recent changes in river regimes brought about by dams and by cyclic or permanent climatic changes have drastically reduced the area, depth and duration of annual floodings. This has affected communitieswhich depended on these pondedfadamas for fish and cultivablewet lands. It has also reduced the habitat area for migratory birds and other wildlife.

B. Need for Irrigation

2.4 The northern states of Nigeria are located in the Sudanian and Sahelianecological zones with mainly dry savannahvegetation and a mean annual rainfall of between 400 and 1,000 mm, concentratedin four to five months (May to September). Evaporationand evapotranspirationin these zones are high. As a result, these states are prone to strong to moderate drought risks. Vagaries of weather, particularlythe timing of rainfall, limit the profitabilityof rainfed crops inputs. Consequently,irrigation is not only essential for crop production in the dry season, but can also reduce crop risks in the wet season.

C. Techniquesof Small-ScaleIrrigation in Fadamas

2.5 Crop production in the fadamas has traditionallydepended on rainfall in the wet season and on residual moisture after flood recession in the dry season. In areas with easily accessibleshallow groundwater or surface water, traditionalwater lifting devices, such as sadouf and calabash,are used to lift water onto the land. While such devices are low cost and depend mostly on farmer labor for constructionand operation, their irrigation potential is limitedto small plots. Water lifting by such devices is laborious and the irrigated area is limited to about 0.1 ha per shadouf.

2.6 Since the beginningof 1975, ADPs have begun to address this water constraint. Initially, programs focused on upland conservationby controllingsurface runoff during the rainy season and providing measuresfor improvingthe total infiltrationand augmentingthe soil storage capacity. These programs of maximizingretention of rainfall for crops did not achieve the best results in increased crop production. Technicalexperts working in these projects, who were familiar with successfuldevelopments in low-cost, simple technologiesfor exploitingshallow groundwater developed in South Asia, made greater efforts to apply this technology. They introducedlow cost tubewelldrilling and irrigation by pumps into the traditional fadamafarming areas with very encouragingresults. The key results of these activities were: (a) the introductionof supplementaryirrigation in the wet season which significantlyreduces the risk of crop failure from drought; and (b) the potential for introducinga dry-season crop. Initially,the success rate of good yieldingtubewells (sustained dry season yield of at least 20 g.p.m.) was less than 50%. This was primarily due to inadequateunderstanding and definition of the shallow aquifers in the fadamas. It was, therefore, necessaryto undertakedetailed hydro-geologicalsurveys to define aquifer characteristics,including boundaries, more accurately, to improve tubewellsuccess rates. Such surveys have recently been completedin the states of Bauchi, Jigawa and Kano (1987), Sokoto, Kebbi and Plateau (1988) and Katsina (1990). Similar surveys are in progress for other states. - 9 -

2.7 Based on the shallow aquifer surveys and other studies, FACU has estimated that in the middle and northern zone states about 3.14 million ha are availablein the fadamas out of which about 2.06 million ha are potentiallyirrigable using the three types of small-scale irrigation techniquesdiscussed below (Annex 1, Table 1). 4/

Lift Irgigationby Direct Pumping

2.8 For lift irrigation, the farmers place their pumps on the borders of rivers, lakes and shallow-dugwells and irrigate small plots normallywithin 100 meters of the water source. Small water channels may sometimesbe necessary to maintain access to water when its level subsides. In order to avoid major land levelling, small basins (of 1.0 m X 2.0 m or less) are used to contain and manage the water. Water distributionis through crude unlined field ditches or PVC pipes. Fields are irrigatedonly in daylight, once or twice a week, and pumps are usually removed for safekeepingat night. Pumping units are portable, weigh 20 kg to 30 kg, and consist of 2" or 3" self-primingcentrifugal pumps driven by 3 hp to 5 hp petrol engines. Maximumcapacities are from 9 and 15 liters per second at zero head to 7 and 12 liters per second at total dynamic heads halfway to their maximumof 23 m and 26 m, respectively. Fuel consumptionfor a typical 5-6 hour day of irrigation is 3-6 liters of gasoline. There has been a tendency in the past for minimalmaintenance of pumps and engines, and this accounts for their reportedly short life span of three to five years. With proper handling and maintenance,this should be longer. Such a culture is beginning to re- emerge in the society with the substantialdevaluation of the Naira bringing about a tenfold increase in capital costs in local currency terms.

Pumping from Shallow Aquifer

2.9 ShallowTubewells by Washboring. Washbore technologyis simple and low-cost (N750/well comparedto N4,500/well for drilled tubewells), but its applicationis limitedto areas where aquifers are at depths of less than 7 m and overlain mainly by coarse or moderatelycoarse textured materials. The mode of constructionis to excavate more resistant surficial materials, if present, with a soil auger or other hand tools and then to pump water through a 50 to 75 mm rigid PVC pipe fitted with a nozzle inserted into the excavationto jet out deeper granular material. Under favorable conditions,such as in the dry river beds, this jetting process can start from the surface and is very rapid. The extensionof a well to a depth of seven or eight meters can be achieved in less than half an hour. Once the requisite well depth has been achieved,jetting is continuedlong enoughto flush out all suspended particles. The jetting pipe is then withdrawnand a well casing with with screen is inserted in its place to the full depth of excavation. This casing consistsof rigid 50 to 75 rnm diameter PVC pipe, in which the bottom 1.5 m has been slotted with 0.5 mm slots and a plug inserted at the end. Coarse sand backfill is placed around the casing to the top of the aquifer layer and finer materials above that. The pump intake can then be coupled directly to the casing.

2.10 ShallowTubewells by Drilling. Rotary or percussion (bailer) rigs have to be used wherever washboringis not feasible because of the depth of the aquifer or the resistance of the overlying materials. The bailer is simple and inexpensiveand can be made locally and steel pipes are used as casing. It can drill up to 15 meters and provides good stratigraphical information. The major disadvantageof this method is the slow rate of penetration. Rotary

4/ FACU. Small-ScaleIrrigation Developmentin Nigeria, 1988. - 10-

rigs are used to establish wells to depths of 10 to 16 m through relatively hard materials. PVC or galvanizedsteel casing 100 mm with a slotted screen is inserted into the well during drilling. A 50 mm pump Intake tubing is inserted into the casing. A concrete collar is generally placed at the surface in order to secure the casing and drain spillage away from the well head, thus minimizingthe potential for contamination. The major disadvantageof rotary drilling systems is the cost of the equipment($40,000) and the need for sophisticated maintenanceservice.

ControlledFlooding

2.11 While irrigation makes the fadamas productivein the dry season, floodingand water recession have been the basis for a very active agriculture in extensive natural depressions and oxbows. Water retained in these locations,sometimes well into the dry season, has provided habitat for fish, birds and other wildlife. This generally uncontrolledflooding of the fadamas has diminished,largely as a result of the constructionof upstreamdam projects (Annex V). It is possible to rehabilitatethe functions of some of the fadamnadepressions, however, by improvingwater inflow channels and providingcontrol structures to retain water at desired levels. This would also help to rehabilitatefishing activity affectedby the dams (para 2.3). The cost of excavatingchannels and buildingstructures for controlled flooding is about N2,200 per ha. and involves mostly local material and labor. This has to be properly coordinatedwith the operation of the upstream dams which are managedby the RBDAsunder the Federal Ministryof Agriculture,Water Resourcesand Rural Development(FMAWRRD).

2.12 Among the three types of small-scaleirrigation techniquesdescribed above, the lift irrigation has the largest potential (1.03 million ha), shallowtubewells have the second largest (0.87 million ha) and the controlled floodinghas the smallest (0.17 million ha.) (Annex I). The potential for the extensiveirrigation schemes operatedby the RBDAs is only 300,000 ha, comparedwith the total of about 2 million ha for small scale activities in the fadamas.

D. Expansionof Fadama Irrigation

2.13 The Strategy for AgriculturalGrowth report has shown that, for irrigation to make a significant impact on agriculturalproduction, at least 40,000 ha each year would have to be brought under irrigation in the northern states. In the long term, the expansionrate of irrigable land would have to be increasedto 60,000 ha per annum. Before 1990, about 163,000 ha, only about seven percent of the potentiallyirrigable area, had come under small- scale irrigation (Annex II). About 80% of this was by direct pumping from surface water. The developmentof washbores and tubewellsprogressed at a much slower pace and only about 18,000 ha have come under irrigationfrom these sources, amountingto less than two percent of the potential.

2.14 There is substantialvariation in fadama areas under irrigation among the states: Bauchi, Kano (now Kano and Jigawa) and Sokoto (now Sokotoand Kebbi), which were the first three states to have the statewideADPs, have performed better than the rest and account for at least 60 percent of the total irrigated land in the fadamas (Annex III). Gongola and Kwara, which were the last states to have ADPs, have the smallestarea under irrigation in spite of the substantialpotential. The rate of progress in irrigationdevelopment during 1983- 90 in the geographicalarea covered by the states of Bauchi, Jigawa, Kano, Kebbi and Sokoto suggests that, if the same rate continues, it would take between 30 and 70 years respectively, - I1I- to exhaust the potential for small-scaleirrigation. For the other states, this period would be substantiallylonger.

E. Future Vision. Reasons for Market Failure and Transition Steps

2.15 Supervisionof on-goingprojects has shown that there is a rapidly-growingdemand from small farmers for developingsmall-scale irrigation because of high financial returns. The economicrate of return from fadama irrigation is also high (at least 30 percent). The public and private sectors have, however, not adequatelyresponded to the demand. The followingparagraphs give a future vision, current status and transition steps needed for a rapid and sustainablefadarna development(and in Annex IV this is presented in the form of a matrix). The transition steps, of which this project is the first, are designed on the basis of past experience.

Government Support

2.16 Even though the ADPs, which are public sector agencies, pioneeredfadama development,the state and federal governmentsgenerally did not support small-scale irrigationand instead allocateda sizeable share of public resources to large-scale irrigation schemes. This situation is now changingbecause of the enthusiasticresponse of small farmers to ADP efforts. The change is reinforcedby the low cost of small-scaleirrigation (US$1,000 per ha), comparedto the high cost (US$10,000per ha at 1990 prices) associatedwith large- scale irrigation schemes, and the large areas of fadamathat are potentiallyavailable for irrigationdevelopment. The recently completedBauchi, Kano and Sokoto ADP projects have far exceededtheir combinedappraisal target of about 67,000 ha. and have actually developed about 97,000 ha under small-scaleirrigation. However, the target itself was very modest compared with the potential, and the ADPs have built only a limited capacity for fadama development. As a first transitionstep, the state and federal governmentsshould increase expenditureon fadama developmentby augmentingtheir resources with donor finance. Subsequently,the burden on public expenditurewill decline as the private sector increasingly provides services.

Technology& Extension

2.17 The rapid spread of small-scaleirrigation practicesrequires accurate assessmentof the potential and appropriate exploitationpractices. It also requires properly directed research and extension for various types of small-scaleirrigation and related farming practices. While shallowaquifer studies at macro-levelhave been completedin Bauchi, Kano, Katsina, Sokoto and Plateau states, micro studies are now needed. The key technical constraintsare at two levels: (a) drilling; and (b) irrigated farming productivity. Drilling services have been constrainedby lack of participationby the private sector (for the reasons mentionedin paras 2.33 and 2.34) and by the limitedcapacity of the ADPs to manage and maintain drilling rigs efficiently.

2.18 Tillage requirements,as well as the need for modem inputs like fertilizer, are substantiallyhigher under intensifiedirrigated fadama agriculture than under rainfed agriculture. A large part of the tillage (50-60%) is by hand with the short-handledhoe, which requires 30-40 man-daysto complete 1 ha. Much of the remainder is by government-owned tractor pools. Very little attempt has been made to introduceanimal traction into the fadama - 12 -

lands, as has been done in the upland areas. This appears to stem mainlyfrom the lack of appropriatetillage equipmentrather than from a scarcity of livestockor familiaritywith animal tillage. Animal-poweredtillage of the,e heavy clay soils, especially when they are wet, is difficult with existing equipment. Added to the labor constraint, the erratic fertilizer supply has been adversely affectingreturns on investmentin irrigation. The result is that the fadama farmers do not fully utilize individualholdings under pump irrigation.

2.19 In order to achievethe full potentialof irrigated fadamas, state and federal governmentswill have to increase future investmentsin: completionof shallow aquifer studies at macro and micro level in the remainingstates for assessmentof various water harvestingmethods; and research and extensionefforts on irrigation technologyand improvingirrigated farming productivity.

Fadama Infrastructure

2.20 Sustainabledevelopment of the fadama infrastructure, which includes roads, drilling for groundwater, and marketingand storage facilitiesfor the fadama crops, is crucial to the realizationof full irrigationpotential. Full cost recovery, maintenanceby Local Government Councils (LGCs) and farmers, and direct interface between private contractorsand farmers are goals to be achievedthrough ADP investmentin the fadama infrastructure.

2.21 Fadama roads are essential for the transport of inputs and outputs as well as for providing access for drilling rigs and maintenanceequipment. There has been virtually no constructionof fadama roads by the ADPs except for the recent pilot work by force account by KadunaADP. The past constructionof feeder roads was entirely in upland areas because so little importance was ascribed to fadama development. ADPs have only recently started feeder road constructionand drilling by contract. The response from the private sector has been very enthusiastic. With.proper access and contract administration,the present relatively high cost of construction,can be reduced substantially.

2.22 Some LGCs have constructedsmall storage facilitieson the fadamas in Kano and Sokoto for vegetablesand are leasing them to farmers. Mechanismsfor effective cost recovery can be introducedthrough the market fees charged by LGCs in the assembling markets.

2.23 In future, state governmentswill contract to LGCs the constructionof access as well as fadama roads, and hand over maintenanceto LGCs, as and when they are able to take the responsibility. Farmer groups could also be involvedwith maintenanceparticularly of the fadama roads. Farmer groups will be trained in designing and administeringthe contracts for maintenance.

Financial Intermediation

2.24 Smallholdersdo not have adequatecash to invest in small-scaleirrigation and need medium-to long-term credit for drilling wells and buying pumps. They also need banking facilities for savingsresulting from profitablefadama cultivation. Informal sources of credit i,nthe project area, which includerelatives, private money lenders and traders, are important because of the ease with which access to them is available and the minimum formalities involved. However, as corroboratedby several studies, informalsources do not provide medium-to long-term credit and interest rates are usually very high (up to 80% in most - 3 - cases). The formal sources of credit in the project area includecommercial banks, the Nigerian Agriculturaland CooperativeBank (NACB), Peoples' Bank, CooperativeSocieties and the CooperativeFinancing Agencies. Commercialbank credit for agriculture is governed by the credit guidelinesissued by the Central Bank of Nigeria and covered under the guidelineson sectoral credit allocations. To increase availabilityof credit, the government introducedthe AgriculturalCredit GuaranteeScheme (AGCS) and the Rural Banking Scheme in 1977, but these schemes have had little impact on small farmers who dominate fadama cultivationand who need medium-to long-termcredit for irrigation. Small farmers find it difficult to meet the rigid conditionslaid down by the banks because they do not generally have the required collateral.

2.25 Land Tenure. The process required to obtain a certificateof occupancy(land title) is cumbersomeand relatively expensive, which is why most farmers do not pursue this course as security to obtain credit. The limited number of bank branches, the scarcity of competent technicalstaff and the lack of transport for field visits also contributeto slow processingof loan applications. Absenceof formal land titles is a constraintfor banks in the provision of long-termcredit to farmers. It is also possibly, in some cases, a contributorto the abuse of land because of the transient nature of land ownershipor occupancy. As a generalization, it may be consideredthat there are two major types of land tenure: (a) StatutoryRights; and (b) Traditional Usufruct Rights of Occupancy. Under StatutoryRights, the occupantenters into a 99-year agreement with the Governmentfor the use of the land. Under traditional use, the tenure is recognizedby the communitythrough the local leader by virtue of the individualor family use of a particular piece of land. These rights can be bought, sold or inherited and the governmentcan expropriatethe land at any time with the paymentof appropriate compensation. Most land is held under this form of tenure and cannot be used for collateral unless the farmer gets a certificate of occupancy. Conmmercialbanks have started accepting group guaranteesw!ienever farmers are organized, which is a good substitutefor the requirementof land as collateral.

2.26 ADPs have to make special efforts to organize farmers who lack familiarity with the procedures for group lending by banks. Bauchi, Borno, Kadunaand Sokoto ADPs have successfullyorganized farmer groups which are either informal or formal as in the case of CooperativeFinancing Agencies. In some cases, where ADPs have provided a credit liaison service, loan recovery is as high as 90%. The efforts to organize farmers, however, have been on a limited scale and need to be expanded to have a greater impact on fadama development.

2.27 In order to correct the market failure in the case of financial intermediaries,ADPs will act on several fronts during the transitionperiod as follows. They will: (a) finance irrigationdevelopment which involvesdrilling and installationof pumps and fully recover the cost from farmers and traders by using hire-purchasescheme on their own or by using banks as their agents; (b) organize fadama farmer groups; (c) provide credit liaison service; and (d) contract cadastral survey of fadamas with the assistanceof the State Departmentof Lands as a first step in the provisionof a formal record of ownership. Specialprograms need to be designedby the Federal Governmentfor strengtheningrural financial markets which are beyond the scope of fadama developmentactivity. ADPs will then have to progressively withdraw from financingirrigation developmentat farm level as the financial intermediaries start to supply the services required by farmers. - 14 - Farmer Organizations

2.28 Individualfadama farms average around 0.5 ha, comparedto 2 ha for upland farms. As a result, the fadama farmers need to be organizedto provide an adequatescale of operationfor drillers, financial intermediariesand produce buyers. Examplesof successful farmer groups which have previouslybeen organized for specificpurposes include: farmer organizationsfor washboringand marketing in Kano; credit and marketing in Bauchi and Borno; tubewelldrilling in Sokotoand Kaduna; and surface irrigation in Kwara and Anambra. These farmer organizationshave been formed mainly by ADPs. The lessons learnt from these efforts would be used in organizingfadama farmers under the proposed project.

2.29 The ADPs, in organizingfadama farmers would involvethe private sector, NGOs and cooperativedepartments with the objective of creating such capacity in them so that the ADPs could eventuallyphase out from this role.

ContractingFadama Development

2.30 The goal is that ADPs will in time phase out from various constructionactivities for fadamadevelopment. Instead, they and farmer organizationswill design and administer appropriate contractingarrangements which will augmentexisting private sector capacity. This now exists in the marketing of pumps, drilling wells and in marketingfadama crops. Except for these few examples, the capacity of the private sector has not been used much in the past.

2.31 Fums. The private sector plays a significantrole in wholesale and retail supply of irrigationpumps, all of which are imported. Pumps are sold by private traders at many locationsin larger settlementswhere irrigation is practiced. Dealers also stock adequate spares and deal in second-handand reconditionedequipment; the latter is an important service. The dealers, however, complainthat foreign exchangeis not availablein a timely manner and in adequateamounts. Public sector agenciessuch as Farmers Supply Companies (FASCOMs),which dominatethe market for irrigation pumps, import these through local representativesof foreign pump manufacturersand so do not completelyby-pass the private sector in which a hierarchy of importers, distributorsand retailers exists. They have never used the private retail trade to supply pumps but had in fact undercut them by retailing pumps at subsidizedprices. Over the years, the difference betweenthe price charged by FASCOMs and private traders has narrowedsubstantially and is now insignificant. This has been achieved as part of the policy of FASCOMstowards commercialization. In spite of this, the private trade in pumps has been growing because irrigation by the direct pumpingof surface water has grown more rapidly than tubewell irrigation and the private sector provides more efficient services. ADPs shouldgradually privatize FASCOMsat the retail level or refrain from selling in order to remove distortionsfrom the pump market.

2.32 Constructionof ShallowTubewells by Drilling and Washbores. Practiceshave varied from state to state regarding the use of contractors. Bauchi, Kano and Sokotostates have carried out substantialborehole programs by force account, but Sokoto ADP successfullyused a private driller to complete 2,500 boreholes in 1990. In all cases, the cost of wells to farmers, whether drilled by ADPs or by contractors,had an element of direct or indirect subsidy. The recent contract implementedby Sokoto ADP shows, however, that the cost can be further reduced and the subsidy be eliminated. - 15 - 2.33 In Bauchi and Kano States, some private washbore technicians, includingsome farmers, were trained by the ADP, but there is still an unfulfilleddemand for these services. Pump operators complamn,however, of encounteringdry conditionsand others of having wells fail due to their proximityto existingwells. From this, it is evidentthat the small-scale drillers require further orientation, particularlyin siting and managingwells, Monitoring water use is also essentialfor sustainabledevelopment of fadama irrigation.

2.34 The recent experience of Sokoto ADP in contracting4,000 tubewell for drillings to a Nigerian-basedmulti-national firm demonstratesthat: (a) a rapid expansion in the drilling is possiblewith the involvementof the private sector; (b) the private contractorswill undertake drilling if an adequatescale of operation is available; (c) farmer organizationsare crucial for creating the scale, monitoringprogress and quality of constructionand ensuring cost recovery; (d) private contractorshave neither experiencenor find it cost effective to organize farmers on their own to generate adequateeconomies of scale for the drilling operation; (e) the cost of drilling by contract can be brought down by ensuringparticipation of drillers who are active in Nigeria but who have been primarily involvedin the drilling of deep boreholes for drinking water; (f) farmers are keen to participate in drilling contractsand are willing to pay full costs if a deferred payment facility is provided over a period of at least four years and after a down payment of at least 10 percent; and (g) shallow aquifer studies need to be supplementedby detailed local groundwaterstudies in order to reduce the frequencyof dry wells.

2.35 For the time being, the ADPs should continue with contractingthe drilling. In future, they should introducevariations in contractsfor drillers to undertakethe tasks of organizing farmers, cost recovery and marketing output. ADPs should also assist in creating capacity in farmer organizationsto design and administercontracts and undertakecost recovery so that their own contractingactivities could eventuallybe phased out.

2.36 Maketing. At present, there is a relatively good market for most of the crops produced in the area. However, there is significantprice fluctuation in perishable crops such as tomatoes as a result of inadequatestorage and glut at harvest times. Kano ADP has organizedeffective linkages between farmers on the one hand and traders, supermarkets, hotels and a canning factory on the other for ensuring stable demand to farmers. This shows that a creative use of farmer organizationscan play a key role in solving market bottlenecks faced by the farmers. In several states, private processingfactories exist with adequate capacity for absorbingthe rapidly growing tomato producticn and they are willingto enter into productioncontracts with farmer groups. A trading company in Kano has developed a business for export of fresh vegetablesgrown on an area of 500 ha in Kadawa. The company air freights the produce to London and has its own cleaning, grading and cooling facility. It is unable to meet the demand in London alone and has estimated that much larger demand exists elsewhere in the U.K. and the rest of Europe. It is also unable to expand the business becauseof financingconstraints and also because it does not have the capacity to organize outgrowers. A goal of fadama developmentis to create an environmentfor contractingby such companieswith fadama farmers for assuring a stable marketing arrangement.

EnvironmentalProtection

2.37 In the past, environmentalimpacts were not consideredsignificant by the ADPs in implementingthe fadama program since they were small and taking place at a very slow rate. The acceleratedexploitation of the shallow groundwaterresources could, however, have some social and environmentalimpact and this has been taken into account in the design of this - 16 -

project. Provision is being made for specificstudies before further expansionof fadama irrigation beyond the project targets takes place (Annex V).

2.38 Impactof irrigatingExisting Arable Land. It is unlikely that the introductionof irrigation into the already cultivatedareas of the fadamas will have any profound ecological impact. This land has long been under continuousfarming and supports little or no native vegetation. The project would be restricted to such areas. After harvest, the crop residues have traditionallybeen removed, leaving the surface of the land clear and dry, with little or no grazing for nomadiclivestock. Conflictsbetween pastoralistsand settled agriculturists, because of the demand on fadama in other areas, as described in paragraph 2.2, is somewhat sporadic and results from the straying of cattle onto crops or incursionsof farmers onto establishedcattle rights of way. This type of limitedand localizedconflict will undoubtedly continue with some increasedpotential for incursionof cattle into irrigated crops. The existing social mechanismsfor the settlementof such conflictsshould be able to handle this situation. However, the major problem for the pastoralistsis likely to arise as arable cropping, with or without irrigation, is extendedinto new areas. This will deprive them of pasture and provide more opportunityfor livestockto stray onto crops. The potential for increasedconflict could assuredly accompanysuch a development.

2.39 Soil Degradationand Soil Mapping. Soil salinizationor other degradation as a result of irrigation has not yet occurred in fadamas. While it is unlikely to be a problem if only replenishableshallow aquifers are used, a program of monitoringis essential. The program should include soil surveys to provide an improvedunderstanding of the nature of the soils being used and of the baseline conditionsthat shouldbe maintained. This survey information would also provide a basis for the establishmentof priorities for areas that should be developed.

2.40 Soil and Water Contamination. The increasedcapital requirementsof farmers in irrigated crop production and the pressure to repay loans will in all probability increase the use of yield increasingchemicals, particularlypesticides and fertilizers. Residuescould enter the surface water and shallow groundwatersystems and, therefore, it is essentialthat the monitoringof the groundwaterinclides the monitoringof nitrates, pesticide degradation products and faecal bacteria.

2.41 Wildlife Impacts. Concern has been expressed about the effects of the fadama irrigationon migratorywaterfowl and other waterbirds. Attentionhas focussed on the Hadeija-Nguruwetlands of Jigawa State. This contains the Hadeija WetlandsGame Reserve for which there are existingagreements in place between the FGN and the International Councilfor Bird Preservationand the Royal Societyfor the Protectionof Birds, for the creation of the Hadeija-NguruWetlands Project. The project will not affect these wetlands. There may well be other areas, however, that are threatened, shouldthere be significant expansionof irrigated arable agriculture outside the present boundariesof this land use, and they should be protected.

2.42 Fadama Basins and Fish. The drawdown of the river systemsresulting from fadama irrigation may impacton resident fish populations. Some of this will occur as a result of direct pumping from rivers and some as a result of additionalcontributions to aquifer recharge. The major impact on the fish populationsis likely to have occurred, however, with the constructionof the dams referred to previously (para 2.3), which have reduced the areas of annuallyflooded fadama basins. A program of fadama basin rehabilitationthrough - 17 - controlledflooding shQuldmake a positivecontribution to re-establishingthe role of these basins in aquifer recharge. It shouldalso provide the opportunityto re-establishthe fishery that existed previouslyas well as to enhancethis through the introductionof aquaculture techniques. This program would also serve to re-establishsome of the bird habitat discussed in the previous paragraph.

2.43 Impact Outside the Fadamas, The upland areas adjacent to the fadamas are being progressivelycleared of the few remainingtrees for fuel. It is likely that the increasing populationon the fadamas could contributeto acceleratingthis as people seek firewoodfor cooking.

2.44 Public Halth. Research carried out on the BakaloriDam Project suggeststhat there was significantlyincreased incidenceof water-bornediseases below that dam. 5/ The developmentof the groundwaterfor irrigation is, however, unlikely to be associatedwith such problems because the technologyleaves no free-standingwater to support diseases or their vectors.

2.45 EnvironmentalAssessment Studies. In the light of the above considerations,ADPs in collaborationwith appropriate federal agenciessuch as FACU should undertakea full environmentalassessment (EA) of fadama development,and establish monitoringsystems in the ADPs as well as at the national level. Initially, further project-financedfadama irrigation developmentshould focus only on the undergroundwater in areas which are cultivatedin the wet season and are not in use for grazing in the dry season in order to avoid conflict among farmers, pastoralist and fishermen, and also adverse effect on wildlife. Subsequently,with completionof the full EA, fadama irrigationcould be expandedto the environmentallysafe areas.

51 Essien E.S. and P. Singha, 1990. Impact of Large-ScaleIrrigation Project on Human Health. Departmentof CommunityMedicine, Faculty of Medicine, AhmaduBello University, Zaria. Paper presented at a NationalWorkshop on "Farmer participation in Irrigation Developmentand Management",held at the Institute for Agricultural Research (IAR) Samaru, May 7-9, 1990. - 18 -

III. THE PROJECT

A. Project Rationaleand Objectives

3.1 One of the successfulinitiatives of the Bank-fundedADPs in Nigeria has been the developmentof small-scaleirrigation in the fadamas through the introductionof low-costpetrol- driven pumps, along with various types of drilling technologiesfor tapping shallowgroundwater. Rapid spread of small-scaleirrigation will be a key source of agriculturalgrowth and poverty alleviationfor small farmers who are otherwise dependenton low and erratic rainfall. This source of growth, if tapped fully, could increasethe productivityof land and reduce the need for extendingland use for feeding the rapidly growing population,and hence will help in protecting soils, forests and the environment.

3.2 The pace of small-scale irrigationdevelopment has, however, been so slow to date that it would take several decades to fully exploit the potential. The following constraintshave contributedto market failure in fadama developmentin spite of growing demand from farmers: (a) lack of governmentsupport through public expenditure;(b) low investmentin technology dem opment and extension for irrigated agriculture; (c) poor fadama infrastructure; (d) weak financial intermediation;(e) poorly organized fadamafarmers causing lack of financiallyattractive scales of operation for the private sector; and (f) limited access to foreign exchangefor importing irrigation equipment(para 2.16 to 2.36). Chapter 11describes the transition steps for fulfillingthe goal of acceleratedagricultural growth based on e-avironmentally,financially and institutionally sustainablefadama development. This project is designed as the first necessary transition step in the provision of needed services and capital.

3.3 The project would install 50,000 shallowtubewells by drilling and washboring in fadamas over a period of four years by: (a) simplifyinguilling technologyfor shallow tubewells, (b) constructingfadama infrastructure; (c) organizingfadama farmers for irrigation management,cost recovery and better access to credit, marketingand ther services; and (c) conductingaquifer studies and monitoring,and upgrading irrigation tecr.nalogies. The project would also complete a full environmentalassessment of the future fadama de%elopment. The tubewells thus developed would create capacity for irrigating a maximumof abc. r 100,000 ha of fadama land out of which at least 50,000 ha would come under irrigation during the project life.

B. Priect Ara

3.4 The project initially would be implementedin Bauchi, Jigawa, Kano, Kebbi and Sokoto States which meet the followingkey criteria for the participationin the project: (a) completionof the fadama componentsin on-going Bank-fundedProjects; and (b) completionof shallow aquifer studies demonstratingpotential for fadama development. A small amount of funds would be provided to begin the process of fadama developmentby installing8,000 shallowtubewells in the states which meet eligibilitycriteria (Annex VII). The states of Anambra, Imo and Akwa Ibom and other eligible states, as well as the Federal Capital Territory of Abuja are likely to meet the criteria. - 19 -

3.5 The project would focus only on the fadamnaswhich are presently cultivatedin the wet season, have shallow groundwaterfor irrigation and are not in use by pastoralists. The project would not have harmful environmentaleffect (Aiuiex V). Crop records show that at least 100,000 ha of rice is cultivated in the wet season in such fadamas. Maize, sorghum, vegetables and some sugar cane are also cultivated,although there are no reliable statisticson the area covered by these crops.

3.6 Water. The pump tests carried out in fadamas in Kebbi and Sokoto states, have demonstratedthat the movementof water in aquifers range between 200 and 5,000 ml/day. 6/ Continuedand more detailed work will be required to define the sustainableyield of the individualaquifers for the variety of climatic conditionslikely to be encounteredonce the irrigation schemes are in place. The recharge rate is in most cases a function of the height and duration of flooding that occurs over the main stems of the rivers as well as into the fadama back- swamp areas. For this reason, prevailingclimatic conditionshave a singular effect on the sustainableyield from the aquifers. Prolongeddrought is likely to reduce the degree of drought- proofing offered to the farmers by the use of the system. Care will have to be taken to ensure that the aquifers are not over-exploitedand for this reason the developmentof a proper managementplan is essential. As explainedbelow, the project design includes the monitoringof the water resource and the developmentof managementplans based on the experiencethat is gained through this process (paras 3.29 to 3.32).

3.7 Population. Populationdensities in all five states are high, when the general aridity of the climate and the amount of uncultivableland is taken into account. Kebbi and Sokoto together have a mean density of 1.13 persons per ha, Jigawa and Kano together have a mean density 3.2 and Bauchi 0.85. The agriculturalpopulation likely to benefit from this project consists principallyof small farmers who cultivatesmall areas of 1 ha or less per family on the fadamas. TAheyfrequently also cultivatea somewhatlarger area of upland. Pressure on the land adjacent to the fadamas is high, due both to the limitedfertility of this land as well as to the dense population that lives on it. Part of the fadamas have traditionallybeen used as dry season grazing by pastoralistswho practice a form of transhumance. They occupy permanent settlements in the northern states in which they live and to which they return wheneverpasture and water conditions are favorable. It is a common practice to split herds as the dry season progresses. Part moves southwards in search of better pasture, while the other part moves into the fadama lands. In the dry season, the fadamnasmay carry large numbersof livestock, some of which are permanent residents while others are temporary residents. Fadamas that are used for dry season pasture are excluded from the project.

3.8 Cropping Pattern. Before the introductionof modern irrigation systems, some fadama lands were used for wet season production of arable crops, includingrice, maize and vegetables (tomatoes,onions, garlic, okra and peppers). Most of these, with the exceptionof rice, were produced as mixed crops, although some of the crops were produced entirely on residual moisture after the wet season floodinghad subsided. Irrigated crops were also grown using water raised from rivers or groundwaterby means of the shadoof. The elevationof water by this means is laborious and limits the irrigable area to about 0.1 ha per shadoof. Farmers' attentionswere thus focussedprimarily on the cultivationof the upland areas, on which the staple crops of sorghum

6/ Wardrop Engineering Inc., 1988. SokotoFadama ShallowGroundwater Study. Sokoto Agriculturaland Rural DevelopmentAuthority. - 20 -

and millet are planted. The introductionof pump irrigationdramatically changes the cropping patterns on the fadamas, permittingthe introductionof double cropping as well as supplementary irrigation of the wet season crops. It has also made k possibleto grow new crops like wheat and chickpeason the fadamas. The timing of land preparation for the rice and other crops may be brought forward in June to ensure harvesting in time to prepare the land for the plantingof wheat and vegetables in November. Since the implementationof the "AcceleratedWheat Production Program in 1987", there has been an upsurge in the wheat crop. This may be reduced dramaticallyonce the existinggovernment supports for wheat prices and other subsidies are reduced. Red onions, garlic, green peppers and tomatoes have also been grown as dry season crops with some attempt by farmers to stagger plantingdates to avoid market gluts. Maize and okra are grown as minor wet season crops. Minor areas of sugar cane are grown mainly for the fresh market.

3.9 InstitutionalFramework. The institutionalstructure already exists in the project states with considerableexperience in fadama development. In all the project states, state agricultural and rural developmentauthorities have establishedfadama developmentunits, either as a part of their agriculturalservices departmnent(for Bauchi, Jigawa and Kano) or engineeringservices department (for Kebbi and Sokoto). The technical (agricultural)services department of these authoritieshave a well-establishedprogram of On-Farm Adaptive Research Trials and extension. The farmer supply companies(FASCOMs) and CooperativeFinancing Agencies(CFAs) have undertaken a few initiativesof organizingfarmers for developingirrigation infrastructure,access to credit from banks and marketing, which can be used as a buildingblock for organizingfuture farmer organizations.

C. Detailed DescriDtion

Shallow ubewells (US $67.3million) 7/

3.10 ShallowTubewells by Washboring. The project would develop about 18,000 shallow tubewellsby washboring in Bauchi, Jigawa, Kano, Kebbi and Sokotostates. Additional4,500 shallow tubewells would be installed by washboring in other eligible states under the National Fadama Facility (NFF) (para 3.26). This technique is sufficientlysimple that village level artisans and even farmers are capable of executingsmall scale contracts. The State ImplementationAgencies (SIAs) would also provide potential contractors with training in skills required for this activity. The cost of well washboringand land developmentis estimated at N 2,750. Dry wells would inevitablybe encounteredand the cost of which would be charged to successfulwells. Areas to be developedby washboringduring the first year program have already been demarcatedand the SIAs have prepared a list of potential artisans to participate in the program.

3.11 ShallowTubewells by Drilling. The project would develop about 24,000 shallow tubewells by drilling in the states of Bauchi, Jigawa, Kano, Kebbi and Sokoto. Additional3,500 shallow tubewells would be drilled in eligible states under the operation of the NFF (para 3.26). Tubewells would be drilled wherever washboringis not feasible because of the depth of the aquifer or the resistanceof the overlying materials. Tubewells can be drilled by either bailer or

7/ Includes the cost of pumps. - 21 - mechanicalrotary rigs (para 2.10). The contractorswould be supervisedby consultantsappointed with the Bank's approval. Areas to be drilled by tubewells in the first year of the project life were selected before negotiations(para 8.1 (b)). As long as the rotary rigs are used to full capacity, their cost of drilling per well is similar to that by bailer rigs. Otherwisethe former method is costlier than the latter. The cost of drilling and land developmentis currently estimated to be N6,500 per well. About 10% of the installedwells are expected to be dry, and fifty percent of the cost of dry wells would be charged to the successfulwells while the driller would recuperate the remaining fifty percent through the reclamationof the casings.

3.12 Each shallow tubewellwould have potential to irrigate two hectares and therefore by installing50,000 tubewells the project would create capacity for irrigating 100,000 ha in the project states. However, because of labor and tillage constraintsand low levels of irrigation technologyand efficiency among potential irrigation farmers, it is very unlikely that each tubewell would irrigate more than one hectare in the foreseeable future. A proposed National Agricultural TechnologySupport Project (NATSP) is designedto educatefarmers in irrigation technologyand labor saving devices like animal traction which would improve capacity utilizationof the installed shallow tubewells.

Fadama Infrastructure(US $11.06 million)

3.13 Fadama and Access Roads. For the proposed fadama irrigation developmentto be successfulit is essentialthat a reliable system of roads be in place. This is required to transport the farm produce to the markets as well as to permit movementof inputs to farms. Because the fadamas are frequentlysituated at some distance from main roads much of the project-assisted road constructionwould be of access roads across upland areas benefitingboth fadana and upland farmers. Road constructionon such terrain tends to be simple because of the sandy nature of the soils and their relative stability. It is essential, however, to provide adequatemarginal drainage and culverts to ensure that water does not pond on road surfaces or cause road-bed erosion. The constructionof roads on the fadamas themselvesis more problematicbecause of the unstable soil conditionsand susceptibi!ityof these areas to flooding. Where roads are to be constructedon the fadamas it is necessaryto construci a base of laterite or other stable material which adds considerablyto their cost. Fadama and access roads would be constructedby contract and not by force account. The project would financethe constructionof 540 km. of roads in three states. These would consist of 405 km of access roads and 135 km of fadama roads. The estimated cost of access roads is N45,000/km and that of fadama roads N 119,000/km. It is estimated that 270 km of existingtracks would be rehabilitatedby installationof 135 culverts in depressionsand reconstructionof approach roads. Each culvert would cost N9,000.

3.14 Shelters. Storage and Cooling Facilities. Along the sides of the fadama roads, the project would also finance the constructionof 78 shelters, 45 drying and storage sheds and 3 evaporative cooling facilities for vegetables. The shelters, and drying and cooling facilities would be initially maintainedby the Fadama Users Associations(FUAs) and leased out to farmers. The evaporative cooling sheds would be first tested by the State ImplementationAgencies (SIAs) implementingthe project and would be leased out to the private traders.

3.15 Watari Irrigation. The project would finance up to US$4.0 million for the completionof the constructionof spillway and distributioncanals for the Watari Irrigation Scheme started under the Bank-financedKano ADP, which was closed on December31, 1989. The scheme could not - 22 -

be completedbecause of unexpectedfloods which had damagedthe main distributioncanal of the scheme. The scheme would irrigate about 1,200 ha and is estimated to have ERR of 23 %. 8/

InstitutionalDevelopment (US $7.45 million)

3.16 Fadama Users Associations(FUA). The project would finance the expenditureon spearhead teams appointedby SIAs to organize fadama farmers into FUAs which would serve as a link between the fadamafarmers and SIAs in: (a) identifyingfadama farmers interested in participatingin the project; (b) administeringactivities such as drilling, and constructionand maintenanceof fadama infrastructure;(c) full cost recovery from the fadama users for the drilling of washbore/tubewelland installationof pumpsfinanced by SIAs; and (d) monitoringof water resources.

3.17 FUAs wouldbe village based organizations,organized around existingformal or informal groups. Details of key steps required for organizingFUAs, and the functions and working of FUAs are given in Annex VI. SIAs would provide the necessarytraining to FUAs for performing various functionsas well as for generating adequatecash-flow. The Fadama User AssociationDivision (FUAD) of the SIAs would be in charge of organizingFUAs. The FUAD would be responsiblefor the full cost recovery of drilling, and pump installationfinanced by the project. It would collect at least 10 percent of the cost in cash as down payment from fadama farmers. Recovery of the remainingamount and the interest rate charged at market rate would be done over a period of not more than four years.

3.18 Cadastral Sure. Funds would be provided to the SlAs to undertake cadastral surveys in the project areas. Mappingfor this wouldbe carried out at a minimumscale of 1:10,000, and land title and other relevant informationwould be recorded on a suitable computerizeddata base for easy retrieval and updating. The verificationand the issuanceof Certificatesof Occupation, based on these surveys, wouldbe the responsibilityof the State Ministriesof Lands and Surveys. -TheFUAs woulduse the results of the survey to educate the farmers in availing of the commercialbank credit settingthe stage for the second transition step of fadamadevelopment (para 2.27). The terms of reference for the cadastral survey were finalized at negotiations(para 8.1 (f)).

3.19 Fadama Administration. Under this component,the project would finance all staff in the fadama program includingoperating expenses. The provisionhas been made for about 72 man months of internationallyrecruited experts per state in contract administrationfor drilling and road construction,irrigation engineering,irrigation agronomy and farmer organization.These positions are critical for developingthe capacity of the SIAs in fadama development. The candidatesfor positions of contract administratorand irrigationengineer were selectedprior to the negotiations(para 8.1 (a)). The size of fadama administrationhas been kept deliberately small by introducingcontracting of various activitiesfinanced by the project.

8/ See World Bank-KNARDA"Watari Irrigation Project: Final Report on Updatingof Feasibility Study," October 1987. - 23 -

Planning. Monitoring. and Evaluation (US $10.74 million)

3.20 The project would finance certain planning, monitoringand evaluationprograms at state and federal level which would help in the implementationof the project as well as in accelerating fadama developmentin a sustainablemanner. At the state level an amount of US$2.57 has been provided for monitoring, conductingstudies on marketingof crops and shallow aquifers at micro level, and for training the project staff. At the federal level, the followingprovisions have been made: (a) EA_CUhas been provided with US $2.70 million for a full environmentalassessment of future fadamadevelopment; coordination of fadama developmentin the project states; appraisalof the projects financedunder NFF; technicalassistance of 120 months of irrigation engineers; and conductingspecific studies such as local manufacturingof pumps, potential for irrigation by recharge of fadamas by controlledflooding and pastoralist-farmerrelationship; (b) FMAWRRD has been provided with US $4.26 million for its Water ResourcesDepartment to develop monitoringsystems at national level; and (c) APMEU has been provided with US$1.21 million for performancemonitoring of the project.

3.21 EnvironmentAssessment of Future Fadama Development. The assessmentwould be done in three phases. The first phase would be completed in the first year for the northern project states and Katsina State which lies between Kano and Sokoto. Phases 11and III, which would cover the EA for the middle belt and southern states, respectively,would be completed in the subsequentyears. Completionof the EA for the whole country would facilitate the implementationof the second transitionstep of fadamadevelopment (Annex V). Close liaison would be maintainedwith the EA study team and specificrecommendations made by that team would be reviewed with them and incorporatedinto the implementationof this project. Actions would be taken in any case to safeguardagainst the potential environmentalimpacts that have already been identifiedduring the appraisalof the project, which include: (a) the potential for some conflict between farmers and pastoralists;(b) soil degradationthrough salinization;(c) depletionof shallow aquifers and recharge characteristicsof shallow aquifers, and hydraulic relationshipsbetween shallow aquifer systems and surface water systems; and (d) soil and water contaminationwith agro-chemicals. FACU would organize workshops on the findings of the EA study according to the time-tableagreed with the Bank (para 8.2 (j)).

3.22 Monitoring at State level. The project would financephysical monitoring,project performance monitoringand project evaluationat state level (Annex XV). The physical monitoringof shallow aquifer levels, and soil and water quality would be carried out by the SIAs in conjunctionwith FUAs in order to upgrade managementpractices and ensure sustainabilityof irrigated farming systemsthrough proper husbandry of soil and water resources. The proposed establishmentof the physical monitoringprograms would includesoil surveys and water table monitoring. The terms of reference for soil survey and the study on relationshipbetween farmers and pastoralistwere finalized before negotiations(para. 8.1 (f)).

3.23 SIA's Monitoringand EvaluationUnit, supportedby APMEU would carry out baseline surveys, followed by annual surveys to measure cropping intensities, yields and production, crop inputs and farm income of different types of irrigation, namely tubewell,pumping from surface water and fadama rehabilitation. APMEU would prepare annual reports on fadama development based on terms of reference agreed with the Bank. - 24 -

3.24 Water Monitoringat the Federal Level. The Water ResourcesDepartment of FMAWRRD has responsibilitiesfor monitoring, planning, allocatingand regulatingthe use of the country's water resources. In order to ensure adequatecapacity in the Departmentfor the water monitoring requirementsof this project, funds are being made availablefor: (a) establishingthe necessary field and office physical facilitiesfor regular measurementof stream flows and ground water status in the five project states of Bauchi, Jigawa, Kano, Kebbi and Sokoto; and (b) strengthening the staff for collectingand analyzingthe required data. Concurrent with the training of local staff, the project would fund the recruitmentof an experiencedhydrologist to assist with establishingthe monitoringfacilities, and analytic system which would operated by local staff after satisfactorytraining.

3.25 Project Evaluation. The technicalperformance and cost effectivenessof various componentsof the project would be evaluatedby APMEU using the SIA's monitoringand evaluationunits based on terms of reference agreed with the Bank.

National Fadama Facility (IJS $9.38 million)

3.26 The facility would be used for fadama developmentin states where the current phase of Bank assistance is coming to an end. Anambra, Bendel, Imo and Akwa Ibom states, and the Federal Capital Territory have been appraised for installingabout 4,500 shallow tubewells by washboring and 3,500 shallowtubewells by drilling. The fund would be administeredby FMANR through a National Fadama Facility CoordinatingCommittee (NFFCC) to be appointed by the Federal Minister responsiblefor Agriculture(para 8.3 ()). The committee would include officialsof FMWR as members. SIAs requiring funds would develop their own proposals by using criteria outlined in Annex VII. Eligibilitycriteria for selection of the states under the NFF would include completionof shallowaquifer studies, full-scaleenviromnental assessment, demarcationof areas for fadama developmentand establishmentof the FUAs (para 8.3 (g)). FACU would provide the NFFCC Secretariatand operationalsupport under a senior staff attached to its Program and PlanningDepartment. The Secretariatwould be responsiblefor scrutinizing and appraisingproposals either through its own resources or with assistance from other consultants. The project would financepurchase of vehicles, computers, office equipment and furniture of NFFCC and its Secretariat, includingcosts of appraising proposals either through its own resources or hired consultants. IV. COST ESTIMATESAND FINANCIALARRANGEMENTS

A. Project!Costs

4.1 Project base costs for the four-year disbursementperiod are estimatedat N870 million (US$91.6 million) with a foreign exchangeamount of N473 million (US$49.8million), i.e., 54% of base costs. Except for the costs associatedwith salaries, studies, and technical assistance, all other costs have been estimatedwith a 10% physical contingency. Price contingencieshave been estimatedusing 20%, 15%, 10%, 10%, 10%, respectively, for local costs from 1991 through 1995; and 9.5%, 2.59%,4.6%, 4.1%, 4.1%, respectively,for 1991 through 1995. Except for specificcapital items (mainlyagricultural machinery and equipment)which enjoy some duty concessions,project costs includeall identifiableduties and taxes. Cost estimatesare based on the first quarter of 1991 local quotationsfor office supplies, construction,staff salaries and allowancesas well as internationalsuppliers' quotationsfor vehicles, machinery and equipment. Furthermore, a 12-monthlag has been assumedbetween appraisal and project effectiveness. In determiningproject financial costs, a nominalexchange rate of N9.50 = US $1.0 has been used for March 1991 with gradual depreciationto N 12.2 by 1995. Based on the above assumptions, total project costs, includingall contingencies,would amount to N 1,228 million (US $105.9 million) (Annex VIII).

4.2 At least seventy three percent of total project costs is for investmentin irrigation at farm level for wells and irrigation pumps in Bauchi, Jigawa, Kano, Kebbi, Sokoto, and eligible states under the National FadamnaFacility. Of the remainingcosts, 10%, 7% and 10%, respectively, would be incurred on fadama: (a) infrastructure;(b) institutionaldevelopment; and (c) planning, monitoring,and evaluation.

B. Financing Plan

4.3 The Bank loan of US$67.5 million would finance about 64% of the total project costs. The loan would have a maturity of 20 years includinga five-yeargrace period. The loan would cover 100% of foreign exchangeand 20% of local costs. The Bank would finance only the capital cost of the project, while the recurrent cost would be entirely the responsibilityof the state and federal governments. As indicated in the financingplan below, state government(SG) contributions includinglocal salaries and other operatingcosts would amount to only 4% of total costs (US $4.5 million). Beneficiarycontributions towards investmentin irrigation would amount to US $29.2 million (27% of the total costs). The remainingamount of US $4.7 million (4% of total costs) would be financedby the FGN. 2/

4.4 The Bank loan of US $67.5 million would be made to the FGN. US $55.0 million would be on-lent by FGN under subsidiaryloan agreementsbetween the FGN and the states of Bauchi, Jigawa, Kano, Kebbi and Sokoto in such a way that each state is first allocatedUS $3.5 million and the remaining amount of US $37.5 million is on-lent without limit to any of the five states on a first come first serve basis in accordancewith specific criteria (Annex VII) which are included in the subsidiaryloan agreement (Annex VII). Onlendingto the state governmentsfrom the FGN would be at the same terms as the Bank loan. It is a conditionfor loan effectivenessthat at least one state would have completed subsidiaryagreements with FGN providing for the on-lending of

2/ This includes US$3.9 million on duties and taxes. 26 -

Bank loan designatedfor each state (para. 8.2 (a)). An amount of US $5.9 million for the NationalFadama Facility would be on-lent to other eligible states, on the same terms as the Bank loan, on the basis of the eligibilitycriteria set out in Annex VII. FMAWRRD,with FACU's assistance, would oversee the use of the funds by the states. The states would bear the foreign exchangerisk. The FGN would retain US $6.6 million for project monitoringand coordination of the project activities at state level; for various studies includingEA to be done by FACU and APMEU; and for capacity buildingof the Natural ResourcesDepartment of the FMAWRRD. In order to ensure timely funding, it was agreed at negotiationsthat State and Federal Government contributionsto the State ImplementationAgencies (SIAs) would be accountedfor in their respective annual budgets and disbursementswould be made under the above procedures as agreed at negotiations.

C. Procurement

4.5 All procurementunder the Bank loan would be in accordancewith Bank guidelinesfor procurement. Adequate local capacityexists in washbores which are low cost and require little capital for development. Given the low returns and wide geographicdistribution, foreign firms are not likely to bid for washboringcontracts and therefore the developmentof shallow-tubewells by washbores would be contractedlocally by following local competitivebidding (LCB) procedures. In the case of shallowtubewell drilling, there are very few local firms with adequate capital and skills, and therefore, internationalfirms would be given an opportunityto participate. All contractingfor drilling tubewells would be by InternationalCompetitive Bidding (ICB). All pumps would be importedunder ICB (para 8.3 (a)). Domesticallymanufactured goods and civil works procured under ICB would be allowed a 15 percent preference or the applicable import duty, whichever is lower, for purposes of bid evaluation. Given the wide geographicdistribution, the number of individualcontracts (12-15 a year averaging about US$350,000), and phasing over duration of the project, foreign firms are not likely to bid for fadama road constructioncontracts and therefore contractsfor new fadama roads would be through local competitivebidding (LCB) procedures acceptableto the Bank. This would include: (a) standard LCB documents as agreed with FACU; (b) local advertisingof bid invitationsand provision that foreign bidders would not be excluded; (c) public bid opening; and (d) award to the lowest evaluated responsivebidders. The Fadama InfrastructureUnit of each SIA would prepare bidding documentsfor one or more contract in each state to be put to tender, followingBank guidelines. The documentswould specify post-qualificationstandards (for ICB). All road constructionwould be primarily by LCB. There are inaccessiblefadama areas which are geographicallyscattered and where private contractorswould not be interestedin bidding for the works. However, since exact locationsof such areas and the related costs of constructionare not yet known, the Borrower may, as and when the situation arises, seek Bank approval for financing the constructionof roads by force account.

4.6 For civil works for drilling and for procurementof imported items, such as vehicles, plant, equipment and spare parts, contractsof US $200,000 or more, totalling US $51.4 million1 , would be awarded under ICB guidelines. Civil works includethe constructionof spillway and distributioncanals for Watari Irrigation Project. Domestic contractorsunder ICB would be allowed a 7.5 percent preference for purposes of bid evaluation. Drilling would be contracted primarily under ICB and, as and when there is a case for LCB, the Bank would give due considerationto the Borrower's request (para. 8.3(a)). Contracts below US $200,000, but above US $60,000, and totallingUS $8.3 million, would generally be awarded through accepted LCB guidelines. Acquisitionof technicalassistance (US $0.7 million), EnvironmentalAssessment (US - 27 -

$1.6 million), and monitoringand studies (US $4.7 million) consistingof consultancyservices and internationally-recruitedexperts, would be in accordance with Bank guidelinesfor the employmentof consultants. Chief Executiveof SIA, Financial Controller, IrrigationEngineer, and all other technical assistancestaff (whether short-term or residential), ProcurementOfficer, auditors and study teams recruited under the project, would have qualifications,experience and terms of reference acceptableto the Bank (para. 8.3 (1)). Contracts for goods and civil works over US $200,000 equivalentwould be subject to prior review by the Bank (para. 8.3 (m)).

Amountsand Method of Procurement (US$ million) (Bank share in parenthesis)

m 1,.2 Others TtQal Vehicles 2.48 0.28 2.76 (2.48) (2.48) Equipment 3.66 0.41 4.07 (3.66) (3.66) Washboring - 1.62 10.28 11.90 (1.62) (1.62) Drilling 12.01 17.92 29.93 (12.01) (12.01) Pumps 25.22 - 0.27 25.49 (25.22) (25.22) Fadama Infrastructure 4.00 7.06 11.06 (4.00) 10/ (5.68) (9.68) Technical Assistance - - 0.75 0.75 (0.68) (0.68) Monitoring and Studies - - 5.31 5.31 (4.69) (4.69) Environmental Assessment 1.63 1.63 (1.47) (1.47) Operating Costs - - 3.66 3.66

NationalFadama Facility 11/ 4.00 1.95 3.43 9.38 (4.00) (0.95) (1.04) (5.99)

Total: 51.37 10.63 43.94 105.93 (51.37) (8.25) (7.88) (67.50)

4.7 Creative contractingto progressivelytransfer a greater part of fadama development activities to the private sector would be developedby the SIAs with assistancefrom FACU and in consultationwith the Bank (para 8.3 (k)). SIAs submittedat negotiationsa detailed procurement

IQ/ Fadama infrastructurefor Watari Irrigation.

11/ The National Fadama Facility would be used for financingdrilling activity and pumps. - 28 -

4.7 Creative contractingto progressivelytransfer a greater parnof fadama development activities to the private sector would be developedby the SIAs with assistance from FACU and in consultationwith the Bank (para 8.3 (k)). SIAs submittedat negotiationsa detailed procurement schedule for the life of the project at negotiationsgiving items and quantitiesrequired, sources of funds, timing and procurementmethods, whether ICB or other (para. 8.1 (g)).

4.8 RetroactiveFinancing. Withdrawalsup to a total of US$2.0 million would be made on accountof payments made after appraisal in March 1991 for fadama irrigation (category 1), civil works (category2), plant, equipment,vehicles and spare parts (category3), and technical assistance(category 5).

D. Disbursement

4.9 The Bank Loan of US $67.5 million would be disbursed over a four and a half year period from the fourth quarter of FY92 to the first quarter of FY97 (Annex IX). This would be the first transitionalstep of a 10-15 year program of fadama development. An acceleratedrate of disbursementis expected under this project comparedto that of the Bank's standard disbursement profile in Nigeria because all the states have had long experiencewith previous Bank projects, and the major part of the project is to be implementedby contract. The recent performanceof Sokotoshows that what was achieved in five years by force accountwas achieved within a single year under a drilling contract. Bauchi state will qualify for disbursement,provided Bauchi State ADP Executive Committeewould be reconstitutedto have at least two representativesof the FMAWRRD(paras. 5.1 and 8.2(c)). Establishmentof NFFCC and its secretariat is a condition of disbursementunder the NFF component(para 8.2 (d)).

4.10 A Special Account, which would be denominatedin US dollars would be establishedby each SIA in local commercialbanks into which the Bank would make initialdeposits. The deposits would be used solely to pre-financegoods and services which are reimbursableunder the loan. The amount of initial depositsfor each of the states of Bauchi, Jigawa, Kano, Kebbi and Sokoto would be US$0.3 million, and for FMAWRRDwould be US$0.2 million, and would be approximatelyequal to about four monthsof eligible expenditures. The special accounts would be operatedunder terms and conditionsacceptable to the Bank. Should any disbursementmade from this account be found to be ineligiblefor financingFGN would cause the respectivestate governmentto deposit the correspondingamount into the account before submissionof any further replenishmentapplications.

4.11 Disbursementsof the Bank loan includingthe Special Accountwould be fully documented, except for contracts valued at less than US $60,000 equivalent with a ceiling of US $0.5 million for each state, which would be against Statementsof Expenditure(SOEs). Withdrawal applicationsfor fadama roads contractswould be supportedby FACU certificationthat the work has been carried out to specificationand in accord with the contract. The project is expectedto be completedby March 31, 1996, and loan closing date would be September30, 1996. The proposed allocationof loan proceeds and the disbursementpercentages are summarizedbelow: - 29 -

Summaryof DisbursementSchedule (US$ million)

Amount Percentageof Expenditure CA = Allocated to be financed

1. Civil Works for Fadama Irrigation 12.9 100% of foreign and 90% of local for washbores; 100% of foreign expenditures;and 15% of local for tubewells

2. Civil Works (Padama 10.0 100% of foreign and Infraatructure)12/ 90% of local

3. Vehcles and Equipment 5.0 100% of foreign and 100% ex- factory for locally-manufactured goods

4. Pumps 25.0 100% of foreign and 100% ex- factory for locally-manufactured goods

5. Technical Assistance

(a) Monitoring, Studies 4.0 100% of foreign and and Training (excluding 90% of local TSC Staff)

(b) TSC Staff 0.6 100% of foreign and 90% of local

6. NationalFadama Facility 5.0 Similarpercentages as shown for other cate- gories in this table

7. Unallocated 5.0

Total: 67.5

E. Auditingand ReportingRequirements

4.12 Each of the SIAs, FACU, APMEU and FMAWRRDwould keep financial records in accordancewith sound accountingpractices to reflect their operations and financial positions, and would have the accounts audited annuallyby a firm of independentexternal auditors acceptableto

12/ Includes Watari Irrigation. - 30 - the Bank (para 8.3 (n)). The audited accounts and the auditor's report, includingthe Management Letter (Long Form), and a statement as to whether or not Bank funds had been used for their Intendedpurpose and a separate opinion with respect to statementsof expenditure and Special Account would be submittedto the Bank within six monthsof the end of the fiscal year. Assurancesto this effect were obtainedduring negotiations(para 8.3 (n)).

4.13 Each SIA, FACU, APMEU and FMAWRRDwould prepare annual budgets and work programnsbased on appraisal estimates, as amended. With the assistanceof FACU, a uniform budget format for each SIA would be introducedin the first project year, which would adequately portray project activities,unit costs, budget variancesby cost centers, benefits, and productivity; and form the basis of a proper managementinformation and accountingsystem. This program would be submittedalong with the annual budget to Bank for information. Assurancesto the above were obtained at negotiations(para 8.3 (k)). SIAs would prepare quarterly cash flow statements, which would be submittedto IBRD and FACU, and would operate on the basis of these statements. On the basis of the approved budgets and procurementprogram, FGN and the SGs would make budgetary allocationsand thereafter would release the necessaryfunds monthly in advance.

4. t4 Each SIA, FACU, APMEU and FMAWRRDwould submit quarterly reports and managementaccounts to IBRD showing actual and budgeted expenditures,statements of progress achieved and objectivesfor the forthcomingquarter by each project component. Quarterly reports would contain summariesof expendituresand use of funds to date. The managementaccounts would contain key operating ratios, particularlyon inventories,down-time, and turnover. FACU would provide the necessaryformat for such reports to the SIAs. - 31 -

V. PROJECTIMPLEMENTATION

A. Implementationof the Fadama DevelopmentPrograms at State Level.

5.1 For Bauchi, Kano and SokotoStates, respectively,Bauchi State IntegratedRural DevelopmentAuthority (BASIRDA),Kano State Agricultural and Rural Development Authority (KNARDA)and SokotoState Agriculturaland Rural DevelopmentAuthority (SARDA)would be the state implementationagencies (SIAs). All three agenciesalready exist and have implementedBank-financed ADPs. Agriculturaland Rural Development Authorities which will serve as SIAs in the new states of Jigawa (JARDA) and Kebbi (KARBA) are being established and staff recruitment is in progress. In the case of Bauchi State, the on-goingBank-financed Second Multi-State Agricultural Development Project is implementedby Bauchi State Agricultural Development Program (BSADP) which is a part of BASIRDA. Experience with this project as well as the earlier Bank- financed project shows that project implementationhas been constrainedby a lack of clear authority to the Program Manager of BSADP vis-a-vis the ManagingDirector of BASIRDA. The Government of Bauchi State has given the Bank the assurance that Bauchi State ADP would have the full authorityto implementthis project in Bauchi State and be answerabledirectly to the Governorwho would chair a reconstitutedBauchi State ADP Executive Committeeto include at least two representativesof the FMAWRRD. Bauchi State would, therefore, be eligible for disbsursementunder the project once the Executive Committee has been reconstituted to include the two representatives of the FMAWRRD(paras. 4.9 and 8.2(c)).

5.2 At the state level, the existingADP Executive Committee(ADPEC) responsible to the State Covernor in Councilwould oversee the project. The ADPEC is chairedby the State Governor or his nomineeand other members are the State Commissionersfor Agriculture,Local Government,Finance and EconomicPlanning, Works and Transport, Commerce and Industry, the Secretaryto the State Government,the Director of FDA, the Head of FACU, the General Managerof the relevantRBDA, General Managerof the State Water Corporation, the State Director of the Directorate of Food, Roads, and Rural Infrastructure (DIFRRI), the Director General of MANR, Director General, Local Government,and ManagingDirector of SIA as member/secretary. The ADPEC would meet at least once every three months to review policy, financial and coordination matters. It would approvebudgets, work plans and the appointmentof principal staff and ensure that adequate funds are available for continuingoperations. Each SIA has an Internal Tenders Committee (ITC) nominated from among its Management Unit and chaired by the ManagingDirector. These SIAs would hire a ContractAdministration and Procurement Officer who would also become a member of the ITC. The ITC is responsible for the pre-award evaluation of all contracts under LCB or ICB. After evaluationand approval by this committeeall contractsvalued at more than US $200,000 would be approved by the respective ADPECs. Contracts valued between US $60,000 and US $200,000 would be cleared by the State Commissionersof Agriculture serving as deputy Chairman of the ADPEC while for the contracts less than US $60,000 would be cleared by the Program Manager. The Chief Administrative Officer serves as secretary to the tenders committee.

5.3 The organizationalstructures of BASIRDA, KNARDAa-Id SARDA are shown in Annex X. Organizationalstructures of JARDA and KARBAas expectedto follow the model of KNARDAand SARDA. Under the overall directionof the ManagingDirector, the Program Managers would oversee the Fadama Development Department (FDD) which would have the responsibilityof implementingthe NFDP. The FDD has been reorganized to have a Fadama InfrastructureDivision and a Fadama Users Association - 32 -

Division. Completionof this reorganizationwas a conditionof negotiations(para. 8.1 (a)). The Fadama InfrastructureDivision would be responsible for the constructionof fadamaroads; storage and cooling facilitiesfor crops; rehabilitationof buildings;and the managementof drilling and pump supply contracts. The Fadama Users Association Division would have a prime responsibility for the promotion of Fadama Users Associationsand for liaisonwith them and training support once they are in place. They would also play a major role in cost recovery of members' debts. Their activitieswould be very closely coordinatedwith those of the divisionsof the Agriculture Department however. The TechnicalServices Division would be responsiblefor Land Use Planning, and Seed Multiplication.This Division would also prepare the terms of reference for monitoringand the soil and cadastralsurveys, although in each case the contracts would be arranged between the Fadama DevelopmentDepartment and the executing agencies. The On-Farm Adaptive Research Division, dealing with both the upland and fadamna crops, would be responsiblefor Animal Traction research as well as other work to be undertakenin threshing and post-harvesttechnologies, soil ana water managementand pest managementunder the proposed NationalAgricultural Technology Support Project (NATSP). The work on adaptiveresearch and seed multiplicationcarried out in the past would be continuedwith specificemphasis of the needs of the fadamafarmers. The SlAs also have four support units covering: (a) administrationand training; (b) finance; (c) internalaudit; and (d) planning, monitoringand evaluationwhich wouldparticipate in the support of the NFDP.

5.4 The implementationof the project in the field would be achieved through the zonal offices of the SIAs of which there are four in each state. In addition, the SIAs would nominate specializedstaff to provide technicaland financial supervision. These would consist of a Chief Engineer, a Fadama DevelopmentCoordinator, a Procurement Officer, a Principal Fadama Officer, a TechnicalOfficer and a Mechanical Superinten- dent. The Fadana Users AssociationDivision would be headed by a Chief Administrator who wouldbe responsiblefor the managementof all activitiesassociated with the Fadama Users Associations.Although a GL15 staff member, this officer would answer to the Chief engineer for all administrativepurposes.

B. Federal CoordinatingRole

5.5 The FMAWRRDis responsiblefor federal funding, monitoringand assistance in project executionand for coordinationof various implementinginstitutions. It would play a crucial role in the budgeting process, ensuring that the agreed level of federal funds is budgetedannually for this project and also that the funds are released quarterly on a timely basis to variousentities involved. The Federal administrativestructures that are in place for the Bank-fundedADPs are also applicableto this project (Annex X). The Project CoordinationCommittee (PCC) that has been establishedfor the ADPs would play an essentialrole in ensuring the coordinationof various Federal entities that would be required to have inputs to this project. The PCC is chaired by the Director of FDA, and its composition is shown in Annex X. The PCC would meet semi-annuallyand would review the progress of the NFDP at these meetings. Federal involvementwould also be required for project monitoringfunctions through: (a) the monitoringand evalua- tion unit of the SIAs; and (b) the Water ResourcesDepartment of the FMAWRRDwhich would be responsiblefor the monitoringof river flows and the impactof abstractionfrom groundwaterand rivers for irrigation purposes.

C. ImDlementationof SpecificComponents - 33 -

5.6 Selectionof Locationsfor GroundwaterDevelopment. The SIAs undertookthe selection of the priority areas for the first year's drilling program, before negotiations, on the basis of the informationavailable from the shallowgroundwater surveys and on the strength of demand from farmers. Farmer demand was assessedwith help from the FUAs. The FUAs would be formed well in advance of any drilling activities and the formation of 40 such groups was a condition for negotiations (para. 8.1 (d)). The following criteria would be observed in the selection of fadamas and farmers: (a) the lands would already be cultivatedin the dry season, have a proven adequate supply of groundwater, and would not be subjectto a dispute betweenfarmers and pastoralists;(b) as far as possible, the lands shouldbe near to villages and integrated into single blocks that are unlikely to impede the passage of livestock; (c) each participant would be permitted not more than 2 tubewells so that all smallholderswould have an opportunity to fully participate in the project; (d) farmers would be members of FUAs; and (e) farmers would agree to pay the full cost of shallow tubewells installed on their farm includingthe pump (para. 8.1 (b)).

5.7 Contracting Shallow Tubewell Drilling. All tubewell drilling would be by qualifiedprivate contractorsselected on the basis of ICB. The SIAs would be responsible for contracting tht supply of pumps which would be imported directly, or provided throughjoint agreementswith private dealers. Drilling would be primarily with rotary rigs which would permit developmentof three to five wells per rig per day. Because of the high capital cost of the drilling equipment, it is expected that this type of drilling activity would be undertaken solely by larger contractors, some of which would be entirely local and others would be local branches of offshore companies. Where the soil conditionsare suitableand there is indigenouscapability, drilling would be by bailer rigs. Allowance has been made for training operators of small rotary rigs and bailer rigs currentlyowned by the SIAs. To mitigatethe effect of possible layoffs of drilling staff currentlyworking for the SIAs, they may lease or sell surplus drilling equipmentto these staff, who would be trained to participate in ICB for drilling. The SIAs, through their Fadama Infrastructure Divisions and their respective Tenders Committees would be responsiblefor preparing and issuingthe tenders, for the evaluationof the bids and the selection of the qualified bidders. Supervisionof contracts would be done by the ContractAdministration and ProcurementOfficer, or by private consultantsengaged for this specific purpose. This work would be the responsibilityof the Infrastructure Division. It is assumed that about 10 percent of the wells would be abortive, but in almostall cases it would be possibleto recover casingsfor use elsewhere. Consequently, a total loss of only 10 percent has been budgeted for and would be included in the contract. As a part of the contract it would be obligatory for the drillers to prepare detailed logs of the materials that are encounteredand the depths at which they occur. Records of the depths of the aquifer surfaces and pump test results would also be required. The draft bidding documents for the drilling contracts would be agreed with the Bank before effectiveness(para. 8.2 (b)).

5.8 Contracting Shallow Tubewell Washboring. The relative simplicity and low capital requirements of the washbore technology make it accessible to a much wider range of potential contractors. The SIAs would undertake the training of potential contractorsand assist the farmers in providingquality control. The Fadama Infrastruc- ture Division would be responsible for the contracting of these small-scale drillers through price quotationsfor jobs worth less than US $60,000.

5.9 Cost Recovery. The project would recover the full cost of irrigationdevelopment from farmers, which includes the cost of drilling/washboringincluding failed wells and pumps (Annex XVIII). Full cost recovery would be essential for sustainabilityof the - 34 - project investmentsand institutions. The cost recovery for the tubewellprogram would be designedin such a way that cash rebates would be built in for farmers who pay either on the delivery of the pumps and completionof well drilling, or immediatelyafter the first harvest of the dry season. Such incentiveswould be communicatedto farmers well in advance by FUAs. For farmers seeking deferred payments the project would charge the full cost of financeapplied by commercialbanks for loans coveringsimilar activities. Based on the ADPs' past experience of fadama development, it is expectedthat only a few farmers would be able to pay cash on delivery, but their numbers are difficult to estimate. Most farmers would seek deferred payments, but would be in a position to make a down paymentof at least 25 percent and repay the remaining cost within four years. The down paymentmay includethe cost of land developmentwhich is expected to be mostly in the form of farmers' labor and the incrementalinput needs for fadama irrigation. The funds recovered from the farmers would be deposited into a separate specialaccount of the SIAs to be used for further fadamadevelopment and repaymentof the Bank loan. The account would be monitored by the NFFCC Secretariat. The statement of accounts would be submitted quarterly to the Bank, FDA and FMFED through NFFCC.

5.10 The project would ensure that there are sufficient safeguardsto avoid farmers' default in repayment of amounts due to SIA. The following four-pronged approach would be adopted to ensure full cost recovery: (a) pumps would be pledged; (b) at least three farmers from the same FUA would provide mutual guaranteesfor repayment; (c) LGCs would guarantee a part of the marketcess collectedat local marketson the fadama crops, for example vegetables, as payment against defaulted loans; and (d) defaulting farmers would be barred from future assistancein irrigation. Preparationof a program of full cost recovery from farmers based on the guidelines given in Annex XVIII satisfactory to the Bank was a condition of negotiations (para. 8.1 (e)). During negotiations,it was agreed that the agreed cost recovery programswould be implemented in a manner satisfactoryto the Bank (para 8. 1(e)).

5.11 Fadama Infrastructure. The preliminaryidentification and survey of fadamaroad alignmentstogether with preliminaryengineering design, financialand economicanalysis, would be done by the Fadama Infrastructure Division in each of the states. Tender documents would be prepared with the assistance of the Contract Administrationand ProcurementOfficer, for roads demonstratingpositive benefits and selectedby the SIAs for implementation. Fadama roads and access roads would be constructedby contract and not by force account. The contracts would be bulked per state and put to local tender. There are adequate numbers of interested local contractors, some with internationalaffiliates, to provide a competitiveenvironment. The SIAs with assistance of FACU would prepare an annual rural road works program which would decide the location of roadwork, and submit it to the Bankevery year no later than August 31 (para 8.9). Bank funding has been provided to ensure that contract supervisors could be employedby each of the SIAs and that rigorous contractingand procurementprocedures are followed.

5.12 LGCs are constitutionallyresponsible for maintainingfeeder, includingfadama, roads and markets in their jurisdiction. SIAs, with assistancefrom FACU, would assist LGCs with agreed qualifyingcriteria to carry out routine maintenanceof fadama roads, shelters, and cooling facilities. The project would finance the recruitmentand training of LGC engineeringstaff under technicalassistance as necessary, and provide each LGC with necessaryhand tools and simplemachines (non-hydraulic) and equipmentfor routine road maintenance. Once FUAs are established, they would undertake the routine maintenanceof fadama roads, leaving the accesEroads to LGCs. - 35 -

5.13 Training. The Fadama DevelopmentDepartment would be assignedthe task of developing and implementingtraining programs. The principal aims of the trainiag program would be to: (a) increase the maintenancecapability for pumps and small motors within the area by training mechanics; (b) train farmers and sm-41,-s-ale contractorsin the techniquesof developingshallow tubewells by drilling and w.,shbores, and maintainingthem; (c) improve water managementthrough the introductiono f animal traction and specific soil and water managementprograms (these would be do-eloped during the courseof the project by the proposed NATSP);(d) train farmers in procedures to be followedin monitoringaquifer a ;pths and in taking water and soil samples; and (e) train farmer groups in accountingand financial managementprocedures for the operation of group credit management. These activities would be organized by the Fadama Technical Officers. Courses would be conductedin the villages as well as at the Zonal offices and as far as possiblewould be organized through the FUAs.

5.14 Technology Development. The proposed National Agricultural Technology SupportProject (NATSP) would be implementedby SIAs in tandemwith the NFDP and would be responsiblefor fundingand administeringtechnology development, evaluation and promotion activities designed to overcome technological constraints to fadama development. The major componentsof this activity would be: (a) the identification, adaptation and promotion of animal-drawntillage equipment and techniques; (b) the adaptation and promotionof suitable threshing equipmentand associatedharvested crop handling and storagetechniques for use in the fadamaareas; and (c) the investigationand promotion of improved soil and water management techniques for use in irrigated fadamas.

5.15 Fadama Users Associations. It is essential that the FUAs are developed on the basis of free associationamong farmers and that these have well-definedaims and roles servicing a commonpurpose of fadama farmers that can only be fulfilled by associating rather than through acting independently. Unless these conditionsare fulfilled they are unlikely to be sustainable. Each FUA is expected to have approximately25 farmers. The FUA Division would have the responsibilityfor promotingFUAs as village-based organizationsthrough a bottom-upprocess and for this purpose the Divisionwould form spearheadteams of the staff (Annex VI). Each spearheadteam would have three to four staff and would contact fadama farmers to explain the project, establish a common purpose for forming an associationand start the process of formingFUAs. The common purpose includes pooled purchase of drilling services; transport of inputs such as fertilizer; mutual guarantees for loan repayment; regulation of water use; maintenance of fadamainfrastructure including roads, pumpsand storage; and transport and marketing of output. Four spearhead teams would be able to form about 25 to 30 FUAs. SLAs would recruit experiencedconsultants as advisors to the FUA Division who would help in formationand working of the spearheadteams. The spearheadteams would be formed from the existing staff of SIAs who have experience in organizing farmers. The staff would mostly come from the existingCooperative Divisions of the SIAs, but some new staff may have to be recruited. New staff would be trainedby the advisors while on the job as well as by organizing special training programs at ARMTI and other training institutes in Nigeria and as necessary abroad. For sustainabilityof FUAs, assurances were received at negotiationsthat: (a) FUAs would be independentorganizations and would not receive any subventionfrom government(para. 8.3 (d)); (b) essentialfeatures of the by-laws of the FUAs should be satisfactory to the Bank and would include appropriateprovisions for revenue generationexplained in Annex VI (para. 8.3 (e)); and (c) the FUA Division would submit to FACU, APMEU and the Bank every six months a report outliningtheir activities(para. 8.2 (f)). Finalizationof the by-laws of FUAs was a conditionof negotiations(para. 8.1 (c)). - 36 -

5.16 National Fadama Facility. The National Fadama Facility Coordinating Committee (NFFCC) would be responsible for the administrationof the fund. The chairperson of the committee,to be appointedby the HonorableMinister FMAWRRD, would be an independentperson of eminencein agriculture. It would additionallyconsist of up to twelve members including: Director, Federal Department of Agriculture, FMAWRRD;Director, Federal Departmentof Livestock,FMAWRRD; Director, Federal Departmentof Irrigationand Drainage, FMAWRRD;Director of AgriculturalSciences, in the national agency responsible for agricultural research; Director of one of the agricultural research institutes (nominated by the national agency responsible for agricultural research); two Managing Directors of the SlAs (nominated by the FMAWRRDon recommendationsfrom FACU) on a two year term; Head of Unit, APMEU;one activesmall-medium scale farmer nominatedby FUAs, who has in the past been awarded the best farmer prize in the state; and two private pump traders who are also, wherever possible, drillers to be selected by Managing Directors of SlAs on the committee. The Director of the Program and PlanningDepartment of FACU would be the membersecretary of the NFFCC. The chairperson, ManagingDirectors, the Institute Director, farmer member and private traders would be initiallyappointed for two years, renewablefor another term of two years. The NFFCC would meet as necessary.

5.17 NFFCC Secretariat. FACU would provide a secretariatto service the NFFCC. The Head of FACU would be assisted by the Program Development and Planning Department where a discrete cell (consisting of a coordinator at GL14, a technical assistantat GLO8and a secretaryat GL05) would be establishedto provide the day-to-day support to the NFFCC. Establishmentof the NFFCC and its secretariat is a c ndition of disbursement against the National Fadama Facility component(para 8.2(d)). The project would meet NFFCC costs.

5.18 Operation of the National Fadama Facility. Proposals submitted by the SlAs would be first scrutinized by the NFFCC Secretariat and appraised by a tearn of specialists using criteria establishedjointly by the Government and the Bank. These would essentiallybe similarto thoseused for appraisingthe Bauchi, Jigawa, Kano, Kebbi and Sokoto components. The team would comprise FACU specialists,augmented with additionalexternal consultantswhenever necessary. A list of suggestedeligibility criteria is given in Annex Vll. The first five applicationsfor financingunder the NFF would be sent to the Bank for agreement after FACU appraisal and approval by the NFFCC. Thereafter, only proposals costing more than US$1 million would be jointly appraised by the Bank and the Government. Assurancesto this effect were received at negotiations (para 8.3 (i)).

D. Mid-Term and CompletionReviews

5.19 The review would focus on assessingthe successof various componentsof NFDP in: (a) movementtowards transitionstep II of fadamadevelopment; (b) increasingtotal farm productivity;and (c) establishmentof FUAs and implementationof EA would also be evaluated. At negotiation,assurances were receivedthat FACU would coordinatethe preparationof comprehensiveprogress reports by the participatingagencies for the mid- term review of the project which would be completed no later than March 31, 1994 by a joint Government/Bankteam (para. 8.3 (o)). - 37 -

VI. FINANCIALAND ECONOMICANALYSIS

A. Markets

6.1 Rice, wheat and vegetablesproduced by the project would not face any major market constraint as the country is presently in deficit in these commodities. Moreover, because they have high income elasticityof demand they will experiencegrowing demand along with growth of the economy. Althoughhigh demand for domestically-producedwheat and rice is mainly due to the current ban on their import, productivityof the fadamas is such that the domesticrice grown there would be able to compete with imported rice if the bans were lifted. Similarly, wheat produced on the fadamas would be able to competewith importedwheat whenever the yield is at least two tons per hectare and farm size is at least one hectare (Annex XVII). Such yield levels have been achieved by Sokotoand Kano farmers.

6.2 Farmers are expectedto produce three main types of vegetables: tomatoes, onions and peppers. At full developmentof the project, production is likely to be 100,000 tons, which is less than one percent of the total productionof vegetablesin the country. Onions and pepper would be able to competewith those imported as a part of the border trade with Nigeria's neighbors. No firm estimates of such trade are, however, available. A private trader in Kano has developed a vegetablefarm for export to London and is planning to expand his business. There is also a growing domestic demand for vegetables which the project would be able to meet. Traders from as far away as Port Harcourt travel to the project area to buy vegetables.

6.3 Tomatoesand peppers, which are perishable, pose a special problem, in contrast to onions which can remain fresh for a longer time. The followingactions by the project are expected to alleviatethe problem of glut and resulting decline in prices faced by farmers: (a) the project would develop market infrastructuresuch as shades and cooling facilitieswhich would help to prevent losses; (b) there are private-sectorfood processingfacilities in the project area which would provide steady demand, and the FUAs would develop long-termcontracts with these facilities; and (c) as part of creative drilling contracts,the project would develop links with the local traders for marketingthe produce at an assured price domesticallyas well as for export to Europe as is presently occurring on a modest scale in Kano.

B. Financial Analysis

6.4 Combinationsof two cropping patterns and two farm sizes have been analyzed on the basis of: (a) prices for the first quarter of 1991; (b) paddy in the wet season; and either a combination of 50:50 for wheat and vegetablesor all grains in the dry season; and (c) the price of pumps at N4,500; (d) the cost of drilling of washboresand tubewells, respectively, at N750 and M4,500; and (e) the cost of land development,which is mostly farmer labor, at N 2,000 (Annex XVIII). The financial rate of return for farms growing paddy in the wet season and only vegetablesin the dry season, not reported in the table, is always higher than that for the farms growing a combinationof grains and vegetables in the dry season. Sensitivityanalysis for a decline in the farmgate output price by 30% is presented in the followingtable: - 38 -

Financial Rates of Return

Vegetables& Grains------All Grains------

Decline in Decline in Output Output Farm Size 1991 Prices Price by 30% 1991 Prices Price by 30% (Ha) (%) (9) (%) (%)

ShallowTubewells by Drillin!

1.0 / 86 56 0.5 93 63 37 20 0.2 29 16 3 -5

ShallowTubewells by Washboring

1.0 , A/ 90 0.5 / a! 64 40 0.2 53 30 17 7

,/ More than 100%.

6.5 Assuming a 21 percent cost of financing, when the farmers grow only vegetables, or a combinationof vegetablesand grains, the financial returns are attractive for all farm-sizes with washbores. The financial returns are also attractive for farm sizes greater than 0.5 ha with only grains. The financial returns are not attractivefor grains when output prices decline by 30% for farms less than or equal to 0.50 ha. This shows that water-sharingor sharing of pumps would play a key role for farms less than 0.50 ha and that FUAs should help farmers to develop this sharing mechanismthrough a rental market for pumps. The analysis also shows that for farms of less than or equal to 0.5 ha the risk of price fluctuationsis high if irrigation is based on the drilled shallowtubewell. Thus the full cost recovery mechanismelaborated in Annex XVIII is financiallyviable for farm sizes greater than 0.5 ha. For smaller farms, water sharing or sharing of the pump would play a crucial role. Most of the fadama farmers who have farm sizes greater than 0.5 ha, would find the project financiallyattractive without sharing wells or selling water to others.

C. EconomicAnalysi

6.6 For the economicanalysis at farm level, the cost of tubewells, by drilling and washboring, along with the pump, has been estimatedto be N 10,362 and N6,837, respectively, which takes into accountthe shadow exchangerate (USS 1.00 = N 12.5) and the shadow cost of labor (Annex XVII). The followinganalysis reveals that washboringis justified for vegetablesand grain crop combinationsfor all farm sizes, while drilling is not justified for all crop combinations for the farm size less than 0.50 ha. Only farm sizes greater than one hectare are viable when farmers grow only grain in both seasons. However, that is not the case with the tubewells drilled for farm sizes less than 1.0 ha when only grains are grown, and tubewells by washboring for - 39 -

farm sizes less than 0.5 ha. For such farms, sharing of water and pumps at a market clearing rate would be crucial for economicviability, and the FUAs have a major role to play in developingsuch sharing mechanisms. Moreover, since the grains require substantiallyless labor input than vegetables it is feasible to irrigate more than 0.5 ha per shallowtubewell.

6.7 The economicrates of return are substantiallyless than the financial rates of return. For example, the FRR for the farm size of 0.5 ha. with shallowtubewell by drilling and for a cropping pattern of grains and vegetablesis 93%, while the ERR is 62%. The difference is more pronouncedfor the farms growing only grains. Substantiallysubsidized prices of fertilizer, which is a crucial input for irrigated agriculture, and the restrictionson the import of grains, particularly wheat, are the reasons for such differences. The differencebetween the border price ar-d the farmgateprice of rice is not significantwhile that for wheat is significant (Annex XVII). The eliminationof the fertilizer subsidywould not adversely affect the demand for fertilizer by fadama farmers because of high returns on fadama farming as long as they allocate some land for vegetablesor achieve economiesof scale in water use if they have to grow only grans. Lifting of the import bans would affect the financial viabilityof tubewellson farms of less than 1.0 ha and growing only grains. However, as the general practice in Nigerian agriculture is to grow a combinationof grains and vegetables,the lifting of the import bans would not make the investmentin tubewelts financiallyunattractive. Moreover, increase in the yield of various grains, expectedto be achievedby 20-70% under the proposed NATSPbecause of adoption of improved practices, would substantiallyincrease the rate of return from grain production. The followingtable shows that if the present yield of grains increases by 10% shallow tubewells drilled for the farm size of 0.5 ha become economicallyviable. Farmers can also grow a third crop of cowpeasper year after wheat is harvested. This would further increase the economic returns.

Economic Rates of Return at Farm Level (1991 Prices)

Farm Sizes Vegetablesand Grains All Grains (Ha) (%) (%) 10% increse Present yield in yield

ShallowTubewells by Drilling

1.0 / 20 39 0.5 62 - 1 12 0.2 15 -15 -9

ShallowTubewells by Washborine

1.0 A 43 71 0.5 a/ 14 30 0.2 36 -5 2

, More than 100%. VII. BENEFITS.JUSTIFICATION AND RISKS

A. Indirect Benefits

7.1 Contributionto Food Security and Poverty AlleviationGoals. I3/ Because of its limited scope, this project would not have a direct impact of major proportionson Nigerian agriculture. Its importance lies in the fact that it would establish a model for rapid further developmentof the fadamas. As the fadamas are Nigeria's major undevelopedagricultural resource and when developedfor irrigation may contributeup to 2 percent per year to the growth of agriculturalproduction, they are extremely importantfor increasing incomesof farmers and achieving food security. Furthermore, the fadamas in Kano and Sokoto are located in the Sahelianzone where, because of low and erratic rainfall, the returns to upland agriculture are very low and off-seasonunemployment is high and therefore the majority of the farmers are poor. Fadama irrigationwould substantiallyincrease incomes of these farmers and would also increasethe demand for labor. In contributingto the overall food supply in the country, the developmentof small-scaleirrigation on the fadamas would help ease the pressure to farm more marginal land and thereby contribute to the preservationof land resources. In this context it is importantthat this project be implementedand that it succeeds. This fortuitouscombination of soils and water resources is too importantand too valuable to be developed on an ad hoc basis which might result in a number of environmental and social abuses and fail to meet the full potentialto satisfy the needs of Nigeria.

7.2 Benefitsto Farmers. The availabilityof pumped irrigation water to farmers not only enables them to double their cropping intensities,but also provides them with a high degree of protection from drought and risk reduction. This is very important in this Sahelian region in which the risk of drought is very high and the consequencessevere because of the individual farmer's very limitedfood or financial reserves. This benefit also spills over very directly to the remainder of the community,because of the high populationdensity in Kano and Sokoto States and the large numbers of people that depend on locally-grownstaples.

7.3 The individualfarmer's ownershipof the wells and the pumpsetsgives him considerableindependence in selectingcrops, cropping patterns and times of planting. Within the limitationsapplied by the climate, this enables him to adjust his crop timing to try for maximumbenefit from market conditionsand labor availability. It also enables him to adjust irrigation schedules in accordancewith observed crop needs rather than being tied to a type of strict rotation of large-scale irrigation schemes, where the farmer has limitedcontrol over water allocation. In theory, this should lead to improveduse of the water resource. These choices that become availableto the farmer also demand a certain sophisticationand expertise that may not be available at the outset of the project. Training and experience will be required for the farmers to gain the full benefit from their access to irrigation water.

7.4 TechnologyTransfer. The tubewelland washbore technologythat forms the basis for this project is simple yet effective. It has provided the foundation of extensive and successful developmentof irrigated agriculturein India, Pakistan and other countries, and has proven to be very successfulon a limited scale in Nigeria. The simplicityof the technologyhas been

13/ World Bank, "Strategy for Food and NutritionSecurity", Report No. 9040-UNI, November 10, 1990. - 41 -

the key to its success elsewhere and there is no reason why it should not make a major contributionto the increasedfood production in Nigeria. It is very much cheaper than large- scale irrigation and is less prone to bureaucraticcontrol. The specificareas for technology transfer in this project are: water well drilling; water management;improved tillage technologies;and improvedcrop management.

7.5 The participationof Nigerian and internationalcompanies in tubewelldrilling, and the training and experienceassociated with this, wouldexpand local capabilitiesin rotary rig drilling technologies. At the same time, the training of small-scalecontractors for bailer rigs and washbore drilling woulddevelop a capabilityin this type of operation. By the conclusion of this project it is envisagedthat there would be ample indigenouscapability to maintainthe existingwells and to establishthose required for future fadamaexpansion.

7.6 Health The farmers owning wells in fadama areas already developedfor small-scale irrigation report that one of the major benefits they experience is the access to clean domestic water. Groundwateris uncontaminatedand contributesto a marked improvementin public health, particularlywith respect to gastro-intestinalcomplaints. During irrigation, pumped water from the wells is delivered directly into the field where the retention time of ponded water is relativelyshort, especiallyin the dry season when most of the irrigation will be practiced. There are no canals or night storage facilities which might act as breeding grounds for mosquitoesor snails. As a result, the incidenceof malaria and schistosomiasisthat is frequently associatedwith tropical irrigationsystems is unlikely to be increased above present levels and may even be reduced.

7.7 EnvironmentalImnagt. The past developmentof fadamas was not based upon a proper EA in terms of its effect on other users of fadamas such as pastoralist, fishermen and wildlife. The EA of fadamadevelopment at national level will help in developinga national capabilityfor implementingEAs.

B. Direct Benefit

7.8 EconomicRate of Return. The economicrate of return (ERR) for the entire project excludingthe cost of full-scaleEA of future fadamadevelopment is estimated to be 24% assumingthat the life of the small irrigation pump is five years and the life of wells is 10 years (Annex XVII). All investmentsmade in tapping shallow groundwaterat farm level within the project area will, therefore, have been replaced with new pumps within eight years.

7.9 The ERR is calculatedon the basis of: (a) net incrementalbenefits with and without the project; (b) farm inputs priced without subsidiesor taxes; and (c) labor inputs and other local costs convertedto shadow values using an SCF of 0.85. The prevailing market wage rate for 1991, the year for whichthe data are used, was N20.0 per day, while the economic wage rate is taken to be N117per day. Project benefits derived from incrementaloutputs of paddy, wheat and vegetableswere valued at border farm-gateprices.

7.10 For estimatingincremental output it was assumedthat each pumpset would irrigate only 0.5 ha with an equal area under wheat and vegetables in the dry season, as against its potentialfor irrigating 2.0 ha. Given these very conservativeassumptions, the ERR of 24% is attractive. This ERR wouldbe substantiallyincreased by bringing all of the area of - 42 -

100,000 ha developedby the project under irrigation during the dry season which would require the removal of constraintson tillage at the farm level and increasingthe yield of wheat and vegetablesfrom the 2 t/ha and 9 t/ha, that have been assumedhere, to the realizable potential of 2.5 t/ha and 15 t/ha. at farm level. Such technologicalchange in dry- season cultivationrequires special efforts which are planned under the proposed NATSP. Sensitivityanalysis with respect to costs and output prices shows that, when the costs increase by 10 percent and the ouput prices decrease by 10%, the ERR drops to 15 percent. Thus the project remains economicallyviable.

7.11 Increased CrooDingIntensities and yields. At present almostall the land that will be developedfor small-scaleirrigation is used for a single crop during the wet season, giving a cropping intensityof about 1. The introductionof irrigation can safely be assumedto double intensitybecause farmers will grow wheat and vegetablessuch as tomatoes, onions and peppers in the dry season as a cash crop. Several other types of vegetable can be grown, such as chick peas, green peas, and spinach. More industriousfarmers may also opt for a third, short-seasoncrop such as cowpeas, lettuce or other leafy vegetable frcm April to June, between the wheat harvest and the planting of the rice. In calculatingthe project benefits it has been assumedthat this intensitywould not be achieved within the project life, because of constraints imposedby the scarcity of labor at key times and the scarcity of amimalor mechanicaltraction.

7.12 Rice yields are likely to increase significantlyas a result of the introductionof irrigation and the farmer's ability to compensatefor dry periods in the croppiingseason by deliveringwater to the crop. In additionto this, however, it is assumed that management would improve as a result of the programs that have been includedin the project for the improvementof tillage, water managementand pest control. With irrigation, the paddy yields are expectedto increase from the current rather low figure of 2.5 t/ha to abou.t3.5 t/ha.

7.13 EmploymentGeneration. The project would generate additional emplDymentof about 3.7 million man-daysbecause of the high labor-intensityof fadamacultivatior, under irrigation.

C. Risks

7.14 Excessive Use of the Resources. The enthusiasmof farmers for fadama irrigation could lead to localizedoveruse of the groundwaterresources. The precise behavior and capabilitiesof all the aquifers is not known at present due to the exploratorynature of the groundwatersurveys carried out to date. It is thus possible that slow recherge and excessivelyclose locationof wells would from time to time result in the failure of the wells. The same may happen as a result of extendedperiods of drought. The potential for such occurrencesadds an element of urgency to the monitoringand water managementstudies that have been includedin the project design.

7.15 Poor Cost Recovery. It is possible that there would be some fa-mers who fail to repay loans provided by the project for drilling wells and for pumps. This risk would be greatly reduced by ensuringthat measures specifiedfor orderly debt service are put in effect. These include: (a) the pledging of the pumps to the SIAs until their costs are fully repaid; (b) - 43 - the locking of wells for defaultingusers; and (c) the use of WUAs to monitor and ensure required debt service of its members. -44 -

VIll. ASSURANCESAND RECOMMENDATION

8.1 Bauchi, Jigawa, Kano, Kebbi and Sokotostates have already met the following conditions:

(a) employmentby the SIAs of an irrigation engineer and contract administrator under the TSC, and completionof the internal reorganizationof the Fadama DevelopmentDepartment (paras 3.19 and 5.3);

(b) selectionof 2,000 ha of fadamas and farmers by using the agreed criteria (para 5.6);

(c) finalizationof the by-laws for FUAs (para 5.15);

(d) organizationof 40 FUAs (para 5.6);

(e) preparation of a program of full-cost recovery from farmers, based on the guidelinesgiven in Annex XVIII (para 5.10);

(f) finalizationof the terms of reference for soil survey, cadastral survey, and the study on the relationshipbetween farmers and pastoralists (paras 3.18 and 3.22); and

(g) completionof the procurementschedules for the life of the project (para 4.7).

8.2 During negotiations, ihe following assurancesand agreementswere obtained:

By Effectiveness

(a) at least one state will have signedthe subsidiaryloan agreement (para 4.4); and

(b) the draft bidding documentsfor contractsfor drilling, import of pumps and road constructionwill have been prepared in a manner satisfactoryto the Bank (para 5.7);

At Disbursement

(c) for Bauchi State, Bauchi State ADP Executive Committeewould be reconstitutedto have at least two representativesof the FMAWRRD(paras. 4.9 and 5.1); and

(d) under the NFF, the FGN will have establishedNFFCC and its Secretariat (paras. 4.9 and 5.17). - 45 -

Other Assurancesand Agreements

8.3 (a) The shallow tubewellprogram will be implementedentirely by contract by ICB. However, as and when there is a case for LCB, the Bank will give due considerationto the Borrower's request (paras 4.5 and 4.6);

(b) Farmers under the shallow tubewellprogram will be selected by using the agreed criteria (para 5.6);

(c) SIA's will finance drilling and installationof pumps and fully recover the cost from farmers by implementingthe agreed cost-recoveryprogram (para 5.10);

(d) FUAs will be independentorganizations and will not receive any subvention from the Government(para 5.15);

(e) FUAs will adopt by-laws satisfactoryto the Bank, includingappropriate provisionsfor revenue generation (para 5.15);

(f) The FUA Divisionwill submit to FACU, APMEU and the Bank, every six months, a report outliningits activities (para 5.15);

(g) Eligibilitycriteria for the selection of the states under the NFF will include completionof shallowaquifer studies, full-scaleEA studies, demarcationof areas for fadama developmentand establishmentof the FUAs of interested farmers (para 3.26);

(h) The NFF will be administeredby the NFFCC (para 3.26);

(i) The first five applicationsfor financingunder the NFF will be sent to the Bank for review after approval by the NFFCC. Thereafter, only proposals costing more than US$1.0 million will be jointly appraised by FACU and the Bank (para 5.18);

(j) FACU will organize workshopson results of EA studies in accordance with the schedule agreed with the Bank (para 3.21);

(k) The SIAs with assistanceof FACU will prepare and submit to the Bank, every year no later than August 31, an annual work program for: (i) the areas to be drilled; and (ii) fadama infrastructureto be constructed(paras 4.13 and 5. 11), includingcreative contractingto progressivelytransfer the greater part of fadama developmentactivities to the private sector, to be developedby the SIA, along the lines of Chapter 2 of the SAR and in consultationwith the Bank (para 4.7);

(I) All key staff such as Program Manager, Financial Controller, Irrigation Engineer, Irrigation Agronomist,Contract Administrator,other technical assistancestaff and ProcurementOfficer, auditors and study teams will have qualifications,experience and terms of reference acceptable to the Bank (para 4.6); - 46 -

(m) All bidding packagesfor goods and works over US$200,000equivalent will be subject to prior review by Bank (para 4.6);

(n) Each SIA, FACU and APMEU will have its accounts audited annuallyby a firm of independentexternal auditors acceptableto the Bank. Audited accounts will be submittedto the Bank within six months of the end of each fiscal year (para 4.12); and

(o) A mid-term review of the project will be prepared by March 31, 1994 by a joint FACU/World Bank team (para 5.19).

8.4 Based on the above agreementsand conditions,the project is suitablefor a loan to the Federal Republicof Nigeria of US$67.5 million on standard IBRD terms with 20 years maturity. - 47 -

PageI of I

ANNEX I

Table1 PotWil bigable Am (ha.) I/ in Middle nd Notthtn Zone Stw

SWt. Total Available IRIUOATONPaO NTIAL Fadam Wuahbo Lift Flood Total . Iri. Control Tub"wells (Dizet & Other Pumpins Methoda

BDetchi 235000 71000 100000 10000 IS1000 Dmuae 298000 70000 1S0000 10000 230000 Bomo 5SO000 100000 100000 55000 2S5000 agolA 995000 330000 350000 20000 700000 ICadUnh 81000 5085 40000 7800 52885 Kano 163000 26000 8O00 20000 132000 Ka:bi 46000 25000 11000 4000 40000 KWaM 100000 12150 50000 50C0 67150 Niger 110000 17150 14700 27150 59000 Plateu 166000 70000 80000 8000 158000 Sokot 400000 140000 16000 800 164000

Tota 3144000 866385 997700 174950 2039035

1/ Thedata are for thestates in middleand northern zone stat prior to the rmtionof newstates in August1991. - 48 - Annex II Page 1 of 1

ANNEX II Table 2 Irrigated Area in 1990 (ha.) in Middle and Northern Zone States 1/ …______States2/ Washbores Lift Irrig. Diversions Total & (Direct Flood Control Tubewells Pumping) and Other Methods …------Bauchi 4700 15000 1000 20700 Benue 0 2000 500 2500 Borno 1050 16500 3050 20600 Gongola 100 1300 2000 3400 Kaduna 300 12000 0 12300 Kano 5500 54000 3700 63200 Katsina 250 500 0 750 Kwara 0 400 0 400 Niger 0 2500 5600 8100 Plateau 141 10500 1000 11641 Sokoto 6000 13000 500 19500 Total 18041 127700 17350 163091

1/ Zero means the area under that particular type is negligible.

2/ The data are for the middle and northern zone states prior to the creation of new states in August 1991. - 49 -

Tdle 3: = lm ~ ~~~~~~~~~~~~~~so so

1963 80 - SO 1914 300 632 32 964 1985 500 944 136 1,So0 196 470 1,002 663 2,135 196? 460 700 875 2,035 1968 1,138 567 531 1,736 2969 1,177 1.200 1,000 2,877 1990 / 600 SOO 2,500 3,600

Totat 4,725 S,545 S,737 15,007

Potentil 71,000 26,000 140,000 237,000 umzUUwuauuUsguuauuuUwuuuuumSaRaSuauuusinuauamau

Direct Plim Surfte Wter

1963 115 2,000 2,115 1964 95 3,368 3,463 1965 1,230 6,056 1,304 9.S90 1986 1,630 4,000 1,289 6,919 1967 3,125 8,300 934 12.359 1988 2,912 5,543 1,000 9,455 ¶969 3,000 6,000 1,000 10,000 i99 3,200 6,900 1,000 11,600

Total 15,307 42.167 7,527 77.501

Potential 100,000 86,000 16,000 202,000

,FlootCatrel ond OtherNhtha

1983 l94 1985 1966 IS0 1,100 S0 1,300 1987 150 1,100 100 1,350 198 260 600 125 965 1989 290 500 125 915 1990 150 400 100 .650 TotaL 1,000 3,700 500 5,200

Potential 10,000 20,000 6,000 38,000

-

For erstibf te,ioKod dsootostates prior to cretion of newstates in A t 1991.

Thedata are an the i, r of webboresad thlwrts drilted uto Septembr 1990. AUMI IVRITIME VISII, CWOEllTSTATS ANDlUIASTIS STPS FOII FADMM WNW

Vision Current Stats. Tramition Stqe mid lemon I 11 III f3toSl ) ) (bout6yrs) (bt5y S

MISJECTXiWIRRIIATIs SI.EC T

with the prsent high Agricultural grwut. with Aost ubanteIlly amp" ADPs reduc tlwir irwolvemat UPf population groth In Nigeria coqetely withdria from *mil c_ ntribution of thelr epmniture an fad_ In those fadme detelopnt the activitles done by agricuttural groth entirely Irrigation is *lmot the by _awsing their resources activities wber bsd private setor privete sector awd other on rainfed famirn entirely basd an reInted with the wbrld un finsnce. Is increaing Its rote in meting speciatized It not niremttoly falng. agencies. the dmnd f rem farers for sutainable beos It DOPfdlep pr_w for ervices for irrigtion leads to a rapid ares Tere is gong d for widwr participation of develosnt ejipansion d_mglng sois f1d Irrigaticn but tbe private sctor In fadi & forest. This could he public nd privete ectwo dleq_mt awvded by eaploitine haw not adequately repd the untapped high petentilt by providing adeute service Accelerate pae of irriagtion Accelerate pac of irrigation Accelerate for the wall-scale, frm pace of Irrigation such #s: dv_lq -ntto bring a total dvelqPent to bring a total dwelopent to bring a mnagsd, highly profitable (I) techtology extension, total of 30,000 be. pe awm In Of 0.000 IMh.par o Au ibiCh irripion in the of 60000 ha. at nationat fads. (11) fad infrwtructure. sauchl. Jigl_, KNOi KMbl are, nvirmumty safe lfvlt per nit Ich ae (III) Credit, Sokoto hew Up.t av coleted wwiro,untally safe. The gwovnent shuld give (iv) arketinge piaoring pror of mi_- Ewiranwal ation plan for hilh priority to ftma _ Cv) I aim ant protection scale irritption f dI d _m t i irriation in sltocetiq opt lpawted. publi sctor resouce for Past pulic setor resou Enwirhwstel Assesment Is activities thick belon to skosdly altocated tesud comleted the public sctor. tl bigh ot, lou return lerga-escee Irrigatfon schem

Aru tly 80,000 he. ned piontredl n prtinw to, be bswt under f_m I fted_ h irrigation7 1 1 but tbe , *; *eed ,OiC trr1utimn. pce of deetopment has been slto idth les then 15.000be. Irrigation deselormmt beIta brous*t anu lly wader ohould be uwirmen telly. the fdm Irrigation. Nxairm tmtitutlonmtiy nW eapital _aeniltureper ADP fi mmislly sustainable. per wuon ha bem onlty 1 n. on fad develop ent coqpsred to theneed allocation of at lteet*5 mdilion

EawIrm.entsl .utamb tlIty of Irrigatimn dvleaprmtat * rapid pao Is yet to be assessd.

The fadm irrigation at fam level is sustainblo In term of mintennc. becuse It fs entirely asgedby farmrs. Institutional ustainmbilty of *ccelerated pac of Irrigation deelopment woud reqyire Invelv_nt of the private sector & gncles like Swim.

Progrm Is financsltly sustainable becae except for fewuAPe the cost is fully recoveredfrom frmner.

CUKOSAlK SECTO LENDING STRATEGY ......

Vision of the Bank Soetor Eachstate. except for bauchi. hatforol level projects Continuation of ftdrmproject Continmatfonof feadbproject -0 strategy is the ma os JiueawaKo. Knebbi& Sokoto with few ceonents an areas to iptlement Transition to implementTransition w ha .Alti-cqxsnent RAPswith auch as teclinclogy s port Step 11 describedbelow. Step III dcribed belo. X

'0 mIt fedm dlpet & fa_ deelo_nt to be component Ispli ted throuhAPf. tetlonat level projects Matlontl level projects an technology, upprtand an tecrnoleofg pport and Agricultural Deelopi nt tusd protectfen of raturel resource protectlen of neturel r eurc for lpervng stategoenmnt Iupuiwitur. DF It

Sector wert on rural financlol tural financigl Sector Loan I tural firnuria Sectortoan it _rkets.

Fertiliter Sletor Adjustmnt Credit.

Preparationof sectorstrategy Project on large-scale for large-cte Irrigation Irrigation. program.

1. NEEDEDSEVICE: TECIoLOGY & EXTENSION tp-to-date esaesennt of DPet such as those In Bauchi. Cowpletionof sheilo *aqulfer Completionof shalloi aquifer irrigation potential which Jl_gaw Kduse wanaKebbi & studies In romainng states studies in remainingstates Includs techniqes like Sokotobae completedehalleu direct pimping frm surtfce aquifer urveys nd have Micro studies on shalluow icro studies on shellow Micro studies an shallow aterr groundumt*rpmping introdUced sleple technique of aquifer In states Aeremcro aquifers In states Wwere*acro aqufers in states inheremero a other water hrve tin drilling butwith limited studies ha ben cospleted studies hae been completed studies haewbeen completed ethods. cvevreg for reducing Incidance of for reducing Incidence of for reducing Incidenceof dry milledhile drilling drywalls WAile drilling drywells Aille drilling Easyacsess to farers A Limitedasssment of potential privatetrader to the forvarlous water harvesting Coptteothe assesent of cowpleteasessment of various tehnology& related *cthodsIn fadeoasha ben variouwater harvesting waterharvesting _ thods Information an irriagtion dne. methods. developmnt such as the grourdsater resources, Post efforts focussedm_inly on Morerearch nd *xtenslon Nore research nd extension Morereseearb *nd extens ion drilling techniques etc. agronmy for rainfed crop. on driling I water harvesting on drilling I water harvesting en drilling S water harvesting x and irrigation agroneey. technology, irrigation technology, Irrigation technology, irrigation w x

00 No training proegrm designed agronoy & groumnduter agronomy& groundsmater agronomy & erouxhmter for private drillers, artisan & Information involving farers informtien involving farmers inform_tion Involving famner traders by the lDPs. A other private sector people. & other private sector peopte. & other private sector people.

2. NtEDEDSERVICE: FDANA INFEASTRCTUItE

Swataindete davetcont of Secaue little wsw nokn about ADPs contract out both access ADPs contract out both access ADPs contract out both access Infrastrucutre which includes the potential for fd m a-nd fadb road construction and fdem road construction and fademe road construction m_inly rood construction devlo nt unttil recently to private constructors, nd to private constructors, *d to private constructors, nd drilling activitie & market virtually no construction of studydirect or Indirect cost operatiolenize direct cost operationt1ize full devilopo nt. fadm roads uas undertaken recovery mechanisms, recovery mechanismfrom cost recovery mechanismfrom by the ADPs except for the beneficiaries, beneficiaries. Indirect cost LOPs contract out the recent work done by KadunaADP. Mointenance of roads by recovery mechanismswould w construction to the private Pest feeder reed construction FIJAs& LtCs. Maintenance of fedema roads include market cess, profit sector. prorer focussed entirety on ADPr provide technical by FUAs& access roads sharing between FuAs the upland areas. assistance. by LCCs. LDPs provide technical & ADPs/LGCsetc. Naintenance & wher aver assistwnce. possible the cost recoevry Som experence exists now In AOPscontract out driling to Maintenwnce of fadamsroads by to be don by the LOCs. contracting out feeder road private sector on behalf of ADPs contract out dritilng to FUlAs& access roads contruction formers 9 recover the cost private sector on behalf of by LCCs. AOPsprovide Full coat recovery of fd o fully from farers. Farmers farmers Individoally or technical assistance. roads from formrs Atils Recently 4000 ha. of fedia put initial deposit. In groms only In areas were cces roads from the LGs. Irdwe su ccessfully contracted private contractors are not Orilling activity Is entirely to the privatesctor for Pank to mnitor financial m_rketing drilling activities, left to the private sector. orillingactivities to be tu _ lls by the SokotoADP conditionof AWPs nd mke Farmersput initialdepsit. contractedby farmers here the cost Is to be fully s*bsdies. If uw. transperent. directlyto privatedrillers. recovered fro farmers. otherwiseIn other states DPs ADPs dertakestudies for drill mills for farmers. market development for fadma Pace of drilling by ADPs has crops sAich include, storage la >. benv vry slow de to ltack of nd agro-processing of fadamo b 2 adequateInstitutional support. crops. |

0< 3. lEU SERVICEU:FIAClIAL IUTEUSiATIIE

dM & twn tem cedit Infhrml swAa of credit DAPsfinwnc irriptimn Wh f liinen* only traders ud AIPs copletety uithdra n of farme I trader pride ewly wrt tam credit dweetlI t at fam llt a_d drii ls for Irrigation from financing famr for developing V dm we beause of the perceived rfsk of fully recovwrthe acot from delopent ieo reowverthe for fadm dmlqwnt m_t by existfrg forwat A recovery for the _mdtus to lons farmes & trader by using cost fran farme. ed le the tsk to the Informa lontitut10n. term credit. Collateral * other hire*purcha sre *Itbhe n finwcisl Institutins. Uilth rapid ovwth In procedural requirsm_nts as well their amu or by usiln formal APs proresively Iulthdr" Inco from fadme o Infrastructure of fomt institutien &£ru as their frmo tinning Irrigation Irrligtion farmer mitt n financial intermdIaries re ant. dsvelp nt * the forml adequate fuclities to sav inadbqpate for meeting the demand fin ncial intermedlries a pert of theIr inom. for the term loan & savins ar strengthened throuok of their Income frm their. fre _ml, scattered * special project asistmei. iliterate faersrs & troders. for Incressingly oeeting the Ln demandfor the tero loane SomeAM have tried hire- ADfs comsseIon cadestral with better effIilency than purchs schemefor pAus while surveye to facilitate lesnce ADPs. othe to provicde credit of the certificae of liaiso service to farme. occurrncy by L*CC. Special proog are *anka are willing to provide Special pogrm wre desipird Ioplamnted to strengthen financat credit If farme provide mutual to strwethen fiinciatl mrket. mrket. ntee or certific te of Ocancy.

4. NEEDED0UVIEs U IZINGFARKAS

Individia fadm fam There we smral successful IIDP oranie ftedm form ADPsorganize fadam farmrs ADPecontract out the activity ar* very _tll In site & do exlan of fwrr group at villas ltenl by building at village levl durlng the of orgnlzing formr to not offer ad_t salet for minly fored by VWes for an th existire infolmal t proces of contracting the privete sector Ofto ad technicallt nd ocomically activities, *e.. ushbor formal grops. duirn the irrigation d lowmnt nd cooperative deprtmnt I IPs optli_ use of drilling in KInoe veetable marketing proces of contracting the rolated cost recovery, ph" out their direct role oo

o C 0 equpwints p_qp, credit In KIno md Iuehl term Ion rrigation dlepmnt wnd In the eanexcept for & maketing facitities. from Banks in auchi wi morn, the rolated coat recovry. DPsincreasingly inwolve keepinga smtl progrm of In viet of this censtraint tubmwil drilling in KaIdu private sector. NMOs& trainins. ijority of fadn faes and Sekotow controlled ADPslIwolve privte sector, cooperatives in orgniting vill form assciatio for flooding In Kbo. Sustainabillity GO I cooperatiw departments ferwes in order to create facilltating cntracting of of such groups is uncertain. by contracting out the activity such capacity in those Irrigation daplont to of orgnizing farmrs in agencies. private sector, setting tem Fed farerse n their amndo order to creastesuch capacity credit, mrketing seter, not take Intitiatives In formIng in thoe agenciles. monitor ater use _rketing asocitions becaus of lack of ouspt etc. ctear knowtede about modern tectniqe of Irrigation & hoe to orgnize thmelves for using thoae technique

Foral farmer cooperatives are largely Inactive.

5. NEEDEDSERVICE: CONTACTING FADAIA DEVELOPMENT

Foarr organizationsS Except for the most recent ADPsdesign nd administer AOPsphase out the activity of Except for keeinga small the pLlic sector gwencs contract for tiemeell drilling various contracts for fad. designing a*tministering trining unit in contracting like ADPsdsign varlous reparedby SokotoADP, the developent. In doing so they contracts for fad_s developeent ADPsphase out the activity of creative contracts for AOPthav done lIttle in create capcity in farmer as the farmerorganizations designing & adinistering optlmlly using C set ts involving the private setor. orgnizations for acinistering develop the related skills. fadas developent aupmnting the private sctor the contracts, as the farmer organizatiIons capcity in fadt Private sector cpacity exists develop the related skills. In mrketing of psqa, drittling wells, d mrketing loctally a wel as exporting crops.

OQ : x Os o 4

0< So VEES UENVICE:IULY OF 11Pl

Marketing of puips is ADPe hav nev e utilized the ADPe operate a foreign echW AnDPsoperate a forelgn exchange aDP operate foreign ecsange coptetely privatized. existing private trade for pump window at lotl banksto window at local banksto windw at local wtst to except for lopwrtingin bulk for finance Importsof pAupnd fliwcne private sector Inports finance privae* sector poerts FASCtEsusin the Sank loan. stop aahsidized sales of of irripgtion eq.ipeients. of irrigation *uIpment. FASCOOU*tlls at retail FASCONs. levelat subsidlzed prices Project finaning for Project financing for undercutting traders. in AOPs privwttse FAesrS at local ennufcturing of pqpe. local m_rufacturingof pAps. spite of this the private retail le el trading for pops hos been growing and Irrigation FACA coasI lons studyon the by the direct pting of rwrface feasibility of local waterboo grown at much faster msncufacturlng of pu ps. rate than tubewell Irrigation. This Is because the former needwno investment In servlce like drilling.

Sb NEBO VECltE: PUKPINSTALLATIOU

Privet, drillers meet the Private sector capacity exists AOPs contract wit drilling AfPs start rAisino out DPs rcoeletely withdraw from dmesod for instatlltion of but the farmr Idmnuis not met but provide pumpswd financing of the pup the instaltation activity once pump from faromr at price. due to lack of economies of recover the full coat from Installation and mow tomards the vision is realized. aff ordable to both. scale perceived by the private farer contractingout drilling & sector nd *socisted risk. pwp upply on bihatf of Nomwee ADPsmintafn a smel Thls hs affected overall ADPt introduice ncentives in fareer ganizattlon; Wille training unit In drilling poce of dsvelopment of the contrSot for driiler to finwncing and cost recovery tdchnology. Irrigation. provide pA r 0d pertly is dbn by the bones. undertake the risk of > orgmainizi farms °"

0 < recovering costs.

ADPsprovide technical aselatenceto farmer organiation in the design & adeinistration of centracts

ADPetrain local artlsans in s*Iple Instalistion techniques like uashbores,bailer rigs etc. andalso m_intenanceof wells.

Sc NEEDEDSERVICE: NAIKETIUG OF CROPS

-1 High value crop like Due to poor storage and ADPsfinance construction of ADPs finance construction of ALPs phaseout the activity vegetables are, mrketing infrastructure storage by contract & hand storage by contract & hand of contract design & orownon fadme ich eermnyt mes farmers find It over meintenanceto the FUIs over maintenanceto the FURs awhinistrationbutmaintain hae goodstore and difficultto getremunerative whichfarmer organizations a smalltraining unit. m*rketing Infrastructure, prices forperishable crops like latertake over. nd stable nd groaing vegetables. d nd Fewtraders in Kano have ADP organize fadmJ farmers AoPsorganize fadei farmers successfully ventured into nd contract fed a andcontract fede outgrouer progrmafor fadim develop nt to traders for developoentto traders for crops for *eort to London ougrowerprogrem for export ougrowerprogrem for export share large untappeddemnd marketing and/or agro- marketingand/or agro- exists. Thesetraders are processing. processingWio fully recover Interested In expandingtheir costfor IDAs. buiness but are constrained by financial resources& ADPstrain farmer AOPstrain farmer capacity to further organize organizations in output organizations In output outgromers. marketing. marketing.

0 6. NEEDEDSEtVICE: EWVIRONMENTALPROTECTION

Faed development does not At present there is no system of Undertakea full environmental Expend fadam irrigation In luplement fadbe develop nt have signiflcently advers monitoring of environmental assessmnt nd establish In areas presently not cultivated in alt sreas whichare Iqmct an enviroment aucb Impact. ADP monitoring system but are environeentatly safe. enviromentally safe. as rapid depletion of aqpifers. satinlzation of In same places activities like focusfada.. developmentby Introduce a comprehensive Futl iqlementation of a solla, _rginalization of controlled flooding have introducing irrigation for dry environmenatt monitoring system comprehensive envirornentat pastoralfstA fisheran positivelyhelped envirorment by season only In areaspresently for smallas well as largescale smnitoring for smal ILlarge wild life nd pubilc health. the recharge of fadams. hflie urder farming In wet season. irrigation. irrigation schemesinvolving In sow places conflicts betuemn all conrenfed agencies. Fadm development leads to farers & pastoralit have been a positive lict on reported over cultivation In the environment. fadams previously used for O grazing.

(ID

oC

M - 59 -

ANNEX V Page I of 4

NATIONALFADAMA DEVELOPMENT PROJECT

ENVIRONMENTALOVERVIEW I/

A. EicologizcalContext

1. The flood-proneand poorly drained fadamas are favored with a higher soil moisture contentthan adjacentupland soils and are, therefore, more agriculturallyproductive. Under natural hydrologicalconditions in the past, the rivers also deposited rich sediments in the fadamas during wet season floods which aided in maintainingsoil fertility. Grazing animals, domesticand wild, sought the rich fadama vegetationfor forage and in the process added organic and mineral componentsto the soil in the form of manure.

2. Fadamas were not only importantto terrestrial plants and animals since many riverine fish species must use fadama areas for spawningvia lateral migrationsfrom the river channel into the temporarily-floodedfadama depressions. Fish that were trapped in the fadamas as the flood waters receded were easily harvested by fishermen and became an important food and incomesource for communitieswithin or adjacent to fadama areas.

3. Prior to their conversionto cultivation,the fadamas supportedhighly productive natural vegetation consistingof dense acacia scrubland,open grasslandand seasonallyor permanentlyflooded open bodies of water supportingdense emergent vegetation including rushes, sedges and reeds. The fadamas were an importantdry season source of water and forage for pastoral livestockherds moving into or through the areas from regions to the north. In addition,the fadamas with natural vegetationsupported large and diverse resident or transient wildlife populationsincluding large herbivores and their associatedpredators. Even today, the fadamas are known to be important wintering areas for a vast number of migratory paleoarctic birds. The Hadejia-Nguruwetlands are one of the few remainingwetlands of appreciablesize in northern Nigeria which has not been converted to cultivation. This wetland is a focus for a conservationproject supported by the InternationalUnion for the Conservationof Nature (IUCN), the Royal Society for the Preservationof Birds (RSPB)and the state governmentsof Kano and Borno. The intent of this project is to conserve some of the wetlands for migratory birds and other wildlife while encouragingsmall-scale development projects for the benefit of local human populations.

4. Fadamas were a very importanthydrological element in the floodplainecosystems and to a lesser degree, they retain this function today. By trapping flood waters, the fadamas dampenedthe downstreamferocity of flooding and helped to maintain dry season flows as some the trapped water eventuallypercolated into the groundwaterand then moved laterally to river channels. This hydrologicalfunction has been altered by the constructionof numerous dams which will be discussed in more detail in subsequentparagraphs. It is clear that the annual river flooding and fadamas are vital for the recharge of the shallowaquifer.

I/ Kano and Sokoto states mentionedin this annex are erstwhile Kano and Sokoto states prior to the creation of the new Jigawa and Kebbi States from within the area of the two old states in August 1991. - 60 - ANNEX V Page 2 of 4

5. If much of the fadama area remained in an unalteredstate, NFDP would have posed risks to biological diversity, fishery reduction, social patterns and hydrologicalregimes. However, owing to extensivefadama clearing for agriculture and the constructionof numerouslarge dams on the river systems,the natural conditionsthat prevailed in the past no longer exist. The various riverine ecosystemshave been altered so extensivelythat wildlife and wildlifehabitat has basicallydisappeared, fisheries have already been severely reduced, social conflictsare becoming more intense and the hydrologicalregime bears little resemblanceto natural conditions. NFDP would improve economicdevelopment in northern Nigeria without further environmentalharm.

B. Land Use Before Dam Construction

6. Becauseof their relativelyhigh soil moisture and fertility, fadamas lands were prized areas in developingfloodplain agriculture. In fadamaareas, farmers were able to grow one crop (usually rice or maize) during the rainy season and then plant dry season crops on the margins of flooded fadamas utilizingthe residual soil moisture to secure a second harvest. The rich natural vegetationwhich provided forage for resident and transient livestock populationswas convertedto agriculturalcrops. As more and more fadamas were cleared and planted, competitionfor land increasedbetween livestockowners (resident and pastoral) and settled farmers. However, pastoralists were able to continuetheir migratory paterns by utilizingcrop residues from rainy season cropland and from natural forage from the few remainingareas of uncultivatedfloodplain. The conversionof fadamas to cropland has continueduntil the present where a point has been reached that most fadamas have now been fully convertedto wet season rainfed agriculture while a small amount is used for dry season irrigated cropland.

7. Even before their conversionto agriculture, fadamas were important in household economies. Constructionmaterial and fuel wood were extracted for local use, reed and grasses were harvested for roofing materialand householditems. Hunters and trappers harvested wildlifepopulations for bushmeat and womengathered natural plants for food, medicineand ornaments. Now, very little natural vegetation and precious little wildlife remains in the densely-populatedproject states. Bush meat is still a prized dietary item and as a result of uncontrolledhunting and trapping, most of the larger wild vertebrates have been exterminatedincluding resident bird populations.

8. Many fadamas retained open water well into the dry season as a result of the fairly impermeableunderlying soils. In these open water bodies which often covered tens of hectares, trapped fish prosperedon the rich aquatic vegetationand prolific invertebrate populations. As the water was lost through percolationand evaporation,fishermen (often women and children) were able to take advantageof large fish yields using relatively primitivefishing gear. The fish, usually sun-dried, were either sold at local markets to supplementhousehold incomeor were used for family consumption. The fadama and river fish provided a major portion of householddietary protein.

C. Post-Dam Ln,d US

9. During the past two decades, the state and federal governmentshave embarkedon an ambitiousprogram of dam constructionwith the intent of using reservoirs to support large - 61 -

ANNEX V Page 3 of 4

scale irrigation projects on fadama and adjacent dryland areas. Over thirty dams have been constructedin the three project states with the largest being Bakolori Dam in SokotoState. Further dam constructionis being planned. These dams, funded without Bank assistance, were not subjectedto environmentalassessment prior to construction. The ecologicalchanges within these highly productivefloodplains are far-reaching, mostly with adverse environmental,social and economiceffects. For a variety of reasons, irrigation development did not occur at expected rates and presently, most of the reservoirs are either not utilized or are under-utilizedfor irrigation. Except for Bakolori, none of the dams were designedfor hydropowergeneration.

10. The dams have significantlyaltered the floodplainhydrology. Annual floods still occur, but at reduced intensityand duration. As a consequence,recession agriculture on the floodplainhas been seriouslycurtailed, both in respect to area under cultivationand the market value of crops being planted. For instance, in some places where farmers previously cultivatedwet season rice, they are now obliged to cultivatesorghum or millet owing to the reduced flood water and the consequentloss of residual soil moisture. Rechargeof the underlying aquifer still takes place, but in a more restricted zone along the river. Since environmentalstudies were not conductedprior to dam construction,there are no baseline data on the floodplainhydrology from which to make an accurate comparisonof hydrological,or for that matter, agriculturalchanges. However, anecdotal evidence gained from farmer interviewsin the floodplainmakes it clear that the changes were not beneficial either socially or economically.

11. The impoundmentseffectively trap the sedimentsthat were formerly deposited on fadamas during flood periods. The floodwatersno longer spread the same amount of enriched silt over the cropland, thereby reducing the natural maintenanceof soil fertility. Increasingly,farmers find it necessaryto purchase more fertilizer in order to avoid reduced yields. It is difficult to measure this effect quantitativelysince farmers are growing different crops (mostly of reduced value) as a result of the hydrologicalchanges wrought by the dams.

12. Since the water released from the impoundmentsis carrying less suspended solids, it is more erosive. Field visits indicate that the river channels have been cut deeper in the downstreamstretches as a result of increasedchannel bed erosion or river scour. This scouring lowers the river level relative to the land, thus flood waters will not spread as far laterallywith a consequentreduction of the depth of water in flooded depressions. This reduction in area and depth limits the amount of lateral fish migrationand duration of open water in the floodplaindepressions. Both of these actions have reduced the amount of fish biomass which is harvested from the fadamaflood pools. Withoutbaseline fishery data from environmentalassessments, it would be difficultto quantify the reductionof fish harvests from the fadamas. Interviewswith local fishermen indicate that the losses have been substantial.These losses are unfortunateas fish provide a relatively low cost source of dietary protein for poor farming households. These protein losses can only be replacedthrough the purchaseof higher priced livestockproducts. Compensatoryreservoir fisheries have not developedas expected.

13. The lower river level also may have had detrimentaleffects on groundwaterlevels. At lower river level, lateral groundwatermovement toward the river would cause more rapid flood recession than it would have occurred before the rivers were regulated by dams and - 62 - ANNEX V Page 4 of 4

reservoirs. The river channel has become so deeply scoured in some places that it is possible to observe the groundwaterpassing from beneath the fadamnaareas to the river surface during the dry season. This prematuredraining of groundwaterto the river reduces the amount of residual soil moistureavailable for dry season cropping.

D. EnvironmentalConsiderations of Fadama Irrigation

14. The project will not have harmful environmentaleffects as long as care is taken to monitorthe aquifer so that expansiondoes not exceed the aquifers capacity to supply irrigation water. The project has taken this potentialhazard into accountby includingan extensivegroundwater monitoringsystem to be implementedby the Federal Ministryof Water Resources. No new fadama clearing will take place as the criteria for farmer selection requires that only fadama currently under cultivationwill be eligiblefor the pumps and tubewells supplied through the project. The groundwatermonitoring system will indicate the sustainablelimit for the expansionof fadama irrigation. An environmentalassessment (EA) will be conductedas a part of the NFDP to determine if there are other ecologicaland social limits to sustainablefadama expansion.

15. Expandingfadama irrigation in the dry season is likely to intensifyconflicts between livestock owners and farmers. The conflictsbetween pastoral livestockherders and settled farmers are already consideredto be serious problems, especiallyby the farmers themselves. The traditionalmethods of resolving the conflictsmay break down if fadama irrigation expands too rapidly and will cause an increasein civil actions. The project has recognized this potentialfor increasedsocial conflict and one project componentwill include a social monitoringstudy of the interactionsbetween newly establishedfadama irrigation plots and the pastoral livestockherders. Many of the livestockincursions on irrigated land stems from locally owned livestock. The local mechanismsfor compensatingdamage work quite well and althoughthese livestockdamage incidentsare likely to increase, the local systemswill adjust as well to keep serious conflictsto a minimum.

16. As this overview shows, the fadama environmentshave already undergonesevere modification,mostly to the detriment of local communitiesand households. To a degree, NFDP is a means of compensatingfor natural resources in the recent past without jeopardizing use of the resources for the future. The groundwatermonitoring system is a critical element to any successfulexpansion of fadama irrigation. During project supervision, it is essentialto determine that this monitoringis providing effective and timely feedbackto the project management.The project criteria for spacing tubewellsor washboreswill be effective in reducing the threat of localizedgroundwater depletion, but the project can not control spacingof water sources done in the private sector without project assistance. Yet, even this possibilityhas been taken into accountthrough the provision of the groundwater monitoringsystem. Thus, in the overall contextof project and environment,the project will not pose any severe environmentalthreats, but it will improve regional and local economic developmentconditions. - 63 - ANNEX Vl Page 1 of 4

NIGERIA

NATIONALFADAMA DEVELOPMENTPROJECT

Functionsand Working of Fadama Users Association1/

A. Functionlsof FUA

I1. The tasks to be performed by Fadama Users AssociationUnit of the ADPs in organizingfarmers are:

(a) prepare a list of fadama farmers along with their land holding;

(b) conducthousehold survey to find out non-loaneepotential fadama farmers;

(c) compiledata and present the results to fadama farmers;

(d) identifyproblems and discuss with fadamafarmers to find out the solution to the identifiedproblems;

(e) test the idea of forming FUA/fadamafarmers coop. as a means to solve problem unitedly;

(f) adopt resolutionsto form society;

(g) help adopt by-laws;

(h) collect downpaymentfrom fadamafarmers;

(i) help open books and records;

fj) introducepass books for members;

(k) open bank account;

(Il) assist in depositingshare, members' contribution,savings and other money in bank;

(m) help prepare individualand group loan plans

I/ For the details of these as well as by-laws of FUAs, see Working Paper No. 3 Functionsand Workingof Fadama Users Associationsin the Documentsin the Project File. - 64 - ANNEX VI Page 2 of 4 (n) plan for the loans for investmentto be availed from SIA and bank;

(o) disburse loans;

(p) prepare repaymentschedule and circulate at the time of disbursement;

(q) attend weekly/fortnightlyand monthlymeeting to discuss problems and ensure collectionof loans;

(r) help members to act as bookkeepers;

(s) register FUAs; and

(t) monitorwater use.

B. Physical Target and Manpower

2. During appraisalof NFDP, the organogramof the SIAs was reviewed and it was pointed out that there is a need for reorganizationof FDD. The existing manpowerwould be adequateto carry out the work of organizingfadama farmers into groups provided existing vacanciesare filled up and the staff are made mobile by providing necessaryvehicles (motorcycle). A critical look into the manpowerand the task to be accomplishedto achieve project targets suggests that additional staff will not be required in FDD if the project activitiesare synchronizedwith the on-goingcooperative re-activization program. There are numerouscooperatives already in the project area which can be reactivatedfor the purpose. During reorganization,the function of the Fadama DevelopmentDivision and the Fadama Users AssociationUnit might be demarcatedas follows:

(a) Identificationof fadama land and identificationof fadama farmers along with their land boundariesshould fall within the jurisdiction of the Infrastructure Unit.

(b) Preparationof the list of potential fadama farmers from the Infrastructure Unit; householdsurveys to check non-loaneefarmers; assessmentof the resource base; motivationof non-loaneefarmers to form groups, keep records, and adopt bylaw; assistancein the preparationof applicationfor tubewell, loan application,repayment, etc. should fall under the FUA Unit.

3. On the basis of the above demarcationand delineationof responsibilities,the job descriptionof the officials of the FUA Unit should be prepared in line with the project targets. The present job descriptionwill need modifications. As this is an internal administrativematter, this can be designed by wneChief of the Division.

C. Cash Flow of One FUA

4. The purpose of creating farmers organizationsis to build an internal system for continuityand sustainability. This is true particularlyin the case of activitiesto be completed - 65 - ANNEXYVl Page 3 of 4 within a limitedperiod of time, but their continuitygoes beyond the time span of the project. The participationof the beneficiariesis not only essential beyondthe project ife but is also an integral and indispensiblecomponent to carry out the activitiesduring the implementationof the project. The important element that is required for an organizationto sustain and continue is finance and financial viability is the key to sustainability.

5. In view of the above, a mode cash flow model for one FUA has been worked out in the followingtable. The assumptionshave been formulatedon the basis of the facts and informationgathered from different sources such as discussionswith banks, cooperative officials, and cooperativeleaders. The model shows that FUA can attain a break-even position from the first year. - 66 - ANNEX VI Page 4 of 4

CASH FLOW OF A PRIMARYFADAMA USERS ASSOCIATIONS (FUAS)

A. INCOME ...... _ YEAR--- - No. Iteme 1 2 3 4 5 6 7 8 9 10 _~~~~~~~~~~~~~~~~~~~~. _. ___.___*...... _.....

1. Regiation Fee / 250 ------2. Membershipcontribution 3/ 1300 1300 1300 1300 1300 1300 1300 1300 1300 1300 3. Share / 7500 1ooo0 12500 15000 17500 20000 2250 25000 27500 30000 4. SavingsI/ 1000 2000 3000 4000 S5O0 6000 7000 8000 9000 10000 5. Loan inveat re(TL) _/ 125000 125000 ------6. Loan Recovered 2/ - 41666 83332 83334 41668 - - - . 7. Short-tem lon invotrment3/ S0000 s5000 s5000 5M0 5s000 50000 25000 25000 25000 25000 8. Short-erm loan repaynent 2/ - 50000 50000 5000s 50000 50000 25000 25000 25000 25000 9. IntereA (TL)j1 - 21250 35416 21258 7884 - - -_ 10. Interm (ST) 11/ - 10500 10500 10500 10500 1OS00 5250 5250 5250 5250 11. Service chrge on TL - 213 354 213 71 - - - . 12. Servicecharge on Sr I - 105 105 105 105 53 53 53 53 53 13. Interest on depoit _l/ A - 1995 2520 3045 3570 4095 4620 5145 5670 6195 15 on (1+2+3+4) B.l - 998 1260 1523 1785 2048 2310 2573 2835 3098

Total income (a) 1550 2616 3019 3141 3262 3453 3663 3926 4188 4451

3. EXPENDITURE .~~ ~~ ~ ~ ~ ~ ~~~~ ~ ~ ~ ~ ~~~~ ~ ~~~~~ * . ~~~~~~~~~~~~~~_ _ -__ ------..

1. Booksa Stzionry 300 200 150 150 150 150 150 150 150 Iso 2. Honorariumfor the Offico 200 1000 1400 1400 1400 1500 1600 1800 1800 2000 Beaer 3. Office Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 4. Travel cost

Total expenditure(b) 1500 2200 2550 2550 2550 2650 2750 2950 3150 35SO

NET CASH FLOW(a) - (b) (N) 50 416 469 591 712 803 913 976 1138 1301

Assumptions:

I. The FFCS will have 25 mnemben. 2. N 10 per member, once for the whole membership. 3. NI permember per wedc. 4. N7500 as initil shae capital to got the asociation regitered. 5. N I per memberper week and 80% of the toal memberwill save. 6. N 10000per mnemberfor punp and TubeweUas term loan and 50% of the member will borrw in the Ist year and 50% in the 2nd year. 7. 1/3 of the loan will be epaid by 100% borrower in 2nd year and 2/3 in 3rd year and the rest in 4th year. 8. 50% memberwiU borrow short term crop loan 0 N4000per member. 9. 100% borrowerswiU repay loan along with intert. 10. Intreston tem loan 17%. 11. Intaer ton shos tern loan 21%. 12. Servicechage I% of the accruedinterest of the term and short term loan. 13a. Intereston deposit 15% per annum. 13b. 50% of the inteet earnedon deposit asshare of the society andof the remaining50% to be refuinededto members asinterest on savingsand sharedeposit. ~~~~~h a

s # ~~~I ii.Xlj I i e l 11111| a k ffi~I 1111 - 68 - Annex Vl Page 2 of2 (iv) Covenants Up-to-dateon all legal covenants,especially financialaudits and quarterlyreports on existingexternal loan funds; or any other outstandingcovenant on recentlycompleted projec(s) financedusing extenal funds.

C. Fadam RffjbR=t

(i) Completionof shallowaquifer studies establishingthat potentialfor fadamairrigation exist. (ii) Completionof full environmentassessment. (iii) Completionof identificationof areas for drillingand a list of interestedfarmers. (iv) Completefill reviewof rural organization.

D. M_ _ __x.DeIeunmtmndlraining

Ava.ilbilityof a long-termhuman resource developmentplaa witD clearly idendfied annual trainingschodules for all major activides.

E. mu &WV

(i) SeedProduction and Phasingout of Government/ADPowned farms Marketing for cerdfiedseed production and evidenceof full cost recoveryof seed procuredand marketedby ADP. (ii) Market of OtherInputs Evidenceof progres in the privadzationof publiclyowned input distribudon activities. miNim. rM I

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A. 3m - - 64.S 76.6 - - M1. 2.4 3. 0. - 2.9 -13.7 *. ALLIANCU- 6166 55.3 _ 533 44.7 1,150.4 1.1 - 1.014 115.0 C. PKMLAI ISE I N 195.5 1.2 - - .4 19. 243.3 0.2 71n. 147.5 24.4 It ElES O t11N$- - 519.4 6U. - - 73 27 324 5.7 e.3 333.4 427.7 34.6 to Sm9 WCRATINSm - - 416.4 1.1 - - 6.1 23. 5.5 0.6 - 52. 13.5

Total yEIE UI - - 2,453.3 6.1 - - 1203.632.Y9 3h16.9 I.5 435.3 29.5 36.2 tSl 3INuU. 67,431.663.7 43.0 4.3 29,233.227.6 4 ,7. 44. 103936.6340. .7,923.3 44152.4 3oU3.4

Am 4.IM 14125

0 H '-4 '-I - 74 - AnnexIX Page I of I

NIGIERIA NATIONALFADAMA DEVELOPMENT PROJECr

Diibun.mentSchedule by Ouarter1/

Cumulative IBRD Cumulative Diabumnment Stan FX Ouuter Disbrnement Disbu n1 S % of Loan DiAbu,reementPmfilc Zt

92 IV 4.0 4.0 6 0

93 1 6-2 10.2 nI 5.1 15.3 IIm 5.2 20.5 IV 3.0 23.5 35 10

94 1 3.0 26.5 n 3.0 29.5 m 3.0 32.5 IV 4.5 37.1 55 22

95 1 4.6 41.6 n 4.6 46.2 m 4.6 50.8 IV 4.2 55.0 82 38

96 1 3.6 58.6 n1 3.6 62.2 ;11 2.1 64.3 IV 2.0 66.3 98 54 r9 i 1.2 67.5 100

m IV 74 'SI 98 1 n m HIV6NV 86 991X m IV 94

100 IV 100

I/ Loan effectiveness,completion and closingdates assumed to beMarch 31, 1992, Mach 31 1996and September 30,1996, respctively. 21 Sourc Standard Disbbm _netProfiles, CODMO,July 11, 1991. Refers to the profile for agriculture project In NigerIa. [30)i]0[!]1 r------

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*.'.':YX ; - 9L - - 77 - ANNEX X Page 3 of 4

WmE O1ZATION for *TIUOLFMD OEMNU n=1C

I cm

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I I - in VA_N 9IB~ 1 1

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jo a~Be * 0J - - 79 - ANNEX XI

NIGE&Lk-

NATIONALFADAMA DEVELOPM T PROJECT

TlERMSOF REFERENCEFOR ENVIRONMENTALASSESSMENT

Background

1. In a review of the potential for small-scale irrigation in Nigeria the Federal Agricul- tural CoordinatingUnit (FACU)' has identifiedthe existence of approximately2 million ha of land that could be developedfor this purpose, half of which could be easily exploited. Tfhisland is locatedprimarily in flood plain areas known as fadamas that lie adjacentto the major river sys- tems. Some 40 percent of this land is locatedin the five northernstates of Bauchi, Jigawa, Kano, Kebbi and Sokoto. It is estimatedby FACUthat 115,600ha of this land have been, ot are being, developed for small scale irrigation in these states alone. This is being achieved primarily through the exploitationof surface and shallowgroundwater sources using small petrol driven pumps. 2

2. A request has been made to the Bank by the Government of Nigeria to provide financial assistance for the developmentof a further 100,000 ha of such small-scale irrigation. this would be divided between Bauchi, Jigawa, Kano, Kebbi and Sokoto. In this proposal approximately48 percent of the land would be serviced by shallow groundwatersystems using tubewells (32%) and washbores (16%) and 38 percent would be serviced by surface water involvingthe extraction of water from rivers of ponds. In both these situationswater would be deliveredonto the land by small 2 and 3 inch pumps. A smallerarea (14%) has been identified as having potential for fadamarehabilitation. This would require the clearing of waterwaysand the constructionof small control structuresto allowflood waters to once again enter fadama areas that are naturally flooded. In the past these were very extensiveand supported rice production and an active fishery and were probably importantto the recharge of underlying aquifers. They tend not to be flooded any longer because upstream dam constructionand storage as well as climatic changes have caused reduction of the flood flows in the rivers 3. The ponded areas would once more be used for fisiLingand crops would be producedalong the flood margin as the water recedes.

3. The review of the project by the pre-appraisalmission raised concerns with respect to a number of potential environmental impacts that could result from its implementation. Specific areas in which these could occur include:

- the potential for increased conflict between farmers and pastoralists as land is convertedfrom pasture to arable land;

1 FACU. 1988. Small-scaleIrrigation Developmentin Nigeria.

2 FACU. 1990. Project Proposals for Fadama DevelopmentUnder the ADF (Bauchi, Kano and Sokoto States).

3 Pilon P.G. and R.A. Bullock. 1987. MonitoringLand Use Changein the Sokoto- Rima Basin, Nigeria. In, McDougallA. E. (Ed) 1990. SustainableAgriculture in Africa. Africa World Press, Inc. - 80 -

- the impact of displacedpastoralists and their herds on available rangelands as they are concentratedin smallerareas within and adjacent to the fadamas and as the tradi- tional transhumance routes are impinged upon; conflict between farmers and fishermen over water managementin the flooded fadama areas;

- the effect of the proposed project on fish habitat and the potentialof the project to destroy or to enhance fish habitationthe potential for contaminationof surface and groundwaterwith fertilizers and/or other agrochemicalsused for intensiveirrigated crop productionon the fadamas.

- the potential for the project to provide incentivesfor the destruction of the habitat of waterfowland other migratoryand non-migratorybirds depending on the extensive fadama wetlands;

- the destructionof the habitat of other terrestrial species that inhabit the fadamas;

- changes in the patterns of water-bornediseases.

4. The operationof the irrigationschemes will influenceriver flows and may also result in aquifer depletion and soil salinization. These are basic operationalas well as environmental concerns, that are fundamentalto the sustainabilityof the systems. Monitoringprograms and facilitiesmust therefore, be included in the design of the project in order to be able to identify the nature of changes that occur and to take appropriateaction.

5. Reviewof the checklistprovided in Annex A2 of OD 4.00 which is attached, shows that the items identified above correspondto at least seven of the issues that are subject to Bank policies. These are: (a) agrochemicals;(b) biological diversity; (i) internationaltreaties and agreements on the environment and natural resources; (o) tribal peoples; (q) watersheds; (r) wetlands; and (s) wildlands. It is possiblethat there are other environmentalissues that have not been identified, which will become evidentas a result of the EA process.

6. Preliminary screeningof the project by the Bank's AFTEN staff in accordance with OperationalDirective 4.00, Annex A, has resulted in the project being accorded a Category A status. This signifies that, for the project apraisal process to proceed it is necessary for the Government of Nigeria to undertake the appropriate environmental studies and produce an environmentalassessment report. The drafts and final reports of these studies will be presented to the Bank for review, discussionand approval. Annex Al of OD 4.00 is attached to provide an indicationof the thematic componentsthat would be have to be included in the report. An executingagency within GON will be nominatedto finance, organize and manage the EA. This will presumablybe FACU, which has overall responsibilityfor the project at the Federal level. It is recommendedthat FACU closely co-ordinatethe activitiesof this EA team with that for the NationalLivestock Project. Both projects must consider pastoralistand farmer conflictsas a key issue. This will avoid duplicationof effort, and result in a more global review of the nature of these conflicts, thus providingthe opportunityfor exploring a wider variety of solutions.

7. It is foreseen that FACU will assemblea team of experts to carry out the EA and that they will be drawn from the ranks of Nigerian universities,research institutions,and consultants and may also include the use of foreign experts where required and justified. - 81 -

Objectives

8. The objectiveof this environmentalassessment is to identifythe ecologicaland social impactsthat this project would have in the fadamaareas, assess the risk associatedwith these and formulatenecessary mitigativeactions for inclusionin the project design. The EA will cover the States of Sokoto, Kano and Bauci, It will also include Katsina State. This state is not not currently participating in the fadama project, but its geographicallocation between Kano and Sokoto makes its inclusionessential. The adherenceto the EA process is designed to ensure: (a) the sustainabilityof the project; (b) that the project is implementedin a manner that is in the best long-terminterests of all Nigerians;and (c) that the people of the area affectedby the project have an opportunityto participatein project design; (d) that the Governmentof Nigeria and the World Bankare full appraisedof the all potential environmentalimpacts and risks associatedwith this project and are able to respond to concerns expressedby national and internationalinterest groups.

9. Public participationwill be a key element to the executionof all the componentsof this EA. Conflictbetween pastoralists and farmers, and to a much lesser extentbetween farmers and fishermen, have already been identified as major social concerns. In view of this factor alone, it is essential that these interest groups are intimately involved, in the process of identifying the sources of conflict and formulating potential solutions. In addition to this, however, the implementationof any measures designedto mitigatethe impactsof the project, or otherwiseprotect the environment,will dependon the support and co-operationof the people of the area. They must therefore be intimately involved in identifyingthe potential impacts and formulatingthe appropriate solutions.

10. It is recognizedthe there will be hydrologicalimpacts arising from the implementa- tion of this project. However, the degree to which these river systemshave been altered through dam buildinghas alreadyhad a profoundinfluence on their hydrology. It is consideredimportant therefore that the needs and impactsof the proposed fadamadevelopments be taken into account in terms of overall river basin management. It is intendedthat this matter be included in the upcoming National Water ResourcesManagement Project.

The Study Team

11. The study team will consist of five specialists: a team leadet who will also be a tropical range managementspecialist; a social anthropologist:a freshwater fisheries biologist: a wildlifebiologist and a public health specialist. It is essentialthat this team approachesits task with the understandingthat the outcomemust be an integratedEA whichrecognizes the full range of inter-relationshipsthat exist in the environmentand are likely to be impactedby the proposed development.

12. Oualifications

leam leader will be a recognizedauthority on the use and managementof rangelands by nomadicpastoralists. This person will also be experiencedin evaluatingthe problems faced by herdsmenthrough alienationof the land for agriculturalpurposes and the formulationof strategies for avoiding conflict through settlement, range improvement, livestock marketing, herd improvement,or other means. - 82 -

The Social AnthropoIo.gitwill be an authority on the pastoralists of Northern Nigeria with a thorough knowledgeof their customsand social structures, preferably with fluency in the Fulani language. He must also be familiar with the relationshipsthat exist betweenthe pastoralistsand settled agriculturalistsand have the ability to work effectivelywith both groups.

The freshwaterfisheries specialist will have recognizedexpertise and experiencein the assessment and managementof river fisheriesin West Africa. This specialistwill also have appropriateex- perience in the assessment of water quality particularly in the evaluation of the impacts of agrochemicals.

The Wildlife Biologistwill be a recognizedauthority on the habitat requirementsfor migratory and resident waterfowl and ether birds of the fadamas. This person will also have the requisite expertise in terrestrial ecology to be able to identifythe impactsof the project on other wildlife that inhabit the fadamas or the adjacent upland areas.

The Public Health Specialist will have had experience in the identificationof health problems resulting from the modificationof physical environmentsin Nigeria, particularlywith respect to the dynamicsof water borne diseases associatedwith the developmentthe irrigation projects.

13. Ilski

(a) Team Leader/ RangelandManagement Specialist

(i) Lead the mission, co-ordinatingthe work of the other team members and providing liaison with FACU and the World Bank. Make travel and accommodationarrange- ments for the team as required. Take overall responsibilityfor the compilationof the final report and recommendationsof the team. Take a lead role in the workshopsat the beginning and end of the EA studies.

(ii) Collect and review availableinformation on the use and managementof the fadamas with special emphasison the needs of the Fulani pastoralists (the delineationof the existing land uses on the fadamasand of the areas scheduledfor small scale irrigation developmentis essential).

(iii) Review the proposed project designs to ensure that soil and water issues will be adequately addressed in project implementation.

(iv) Review current activities of state and federal governments (through NLPD) with respect to the programs aimed at alleviatingthe problemsfaced by the pastoralists.

(v) Meet with pastoralist leaders and with representativetribal groups on a formal and informal basis to review livestock management practices and problems, fodder requirements, and sources of conflict with arable farmers and to explore possible solutions.

(vi) Meet with representative farmer groups to review, amongst other things, their livestockmanagement practices, fodder requirements,causes of conflictwith pastora- lists and potential solutions.

(vii) Review the current use and condition of pastures in the fadamas and the extent of dependenceof pastoralistson crop residues from existing farms. - 83 -

(viii) Identify naturallyoccurring products of the fadamaareas that are used by the inhabit- ants of these areas for medicinalpurposes or as dietary supplements.

(ix) Evaluate the potential for the creation and managementof fodder banks in the fadamas and the involvementof the pastoralists in irrigated fodder production.

(x) Review with the pastoralistsany other options which might enable them to improve livestockmanagement, and qualityon the fadamaswhile avoiding confrontationwith the sedentaryfarmers. This will be carried out in close co-ordinationwith the Social Anthropologist.

(xi) Prepare a report containing: (a) an evaluation of the impact of full project develop- ment on the availability of pasture to the pastoralists (b) recommendationson the measuresthat shouldbe taken to avoidconflict through pasture and livestockmanage- ment: (c) potential for the incorporation of herdsmen into the irrigation system throughthe developmentof fodderbanks or other meansof achievingmore sedentary managementpractices, includingdairying.

(b) Social Anthropologist

(i) Engage in discussionswith ADP staff and other relevant officialsto identify specific incidentsof conflictsbetween farmers and herdsmen and those areas in which social tension already exists.

(ii) Be responsiblefor organizing the public participationprocess for the EA. In this process potential environmentalimpacts and measuresfor avoidingor mitigatingthe effects of these will be discussedwith the communities.

(iii) Engage in discussionswith Fulani leaders and leadersof the agriculturalcommunities as well as with other representativegroups to identifyexisting sources of conflict and tension and the mechanismsthat have been used to defuse these.

(iv) Identify and quantify the numbers of herdsmen and stock population that use the areas scheduledfor developmentand the timesof year in which these areas are used.

(v) Through discussionswith the leadershipof the Fulani in the fadama areas explore the cultural and resource constraints to changing or maintaining present livestock managementpractices.

(vi) Engage in discussionswith womens' groups to evaluate the potential impact of the project on women with respect to womens' involvement in farm work, income generationopportunities and householdactivities.

(vii) Together with the range management specialist evaluate measures that might practically be implemented by the Fulani to improve livestock and pasture management,engage in more sedentary livestockmanagement - including dairying and avoid conflict with the farmers.

(viii) Hold discussions with farmers, fishermen and village leaders in sample fadamas designated for flood rehabilitation. This will be done to evaluate the extent of conflict that exists over water managementprocedures and elucidate their opinions on the mechanismsthat should be applied to avoid conflicts. - 84 -

(ix) Prepare a report specifically identifying the extent of the potential for conflict betweenherdsmen and farmers in the areas and participateas required in workshops.

(c) Freshwater FisheriesBiologist

(i) Review pertinent informationwith respect to the size and life cycles of resident fish populationsin the affected river systems. This should includethe identificationof their habitat requirementsfor breeding and feeding purposes.

(ii) Identify the role played by flooded fadama in providing permanent or temporary habitat to individualspecies and assess the impact of past losses of flooded fadama on these species.

(iii) Identify the impactof altered river regimes on purely riverine species.

(iv) Identify the potential impact of fertilizers, herbicides and insecticides on the fish populationsand on the potential for secondary effects on human populationsusing these fish.

(v) Identify the relative importanceof the fish species in the rivers and the fadamas to the adjacent popultationsand assess the value of this fishery in terms of the nutrient supply to these people.

(vi) In associationwith the social anthropologistidentify the degree to which fishing is a specializedoccupation or an integral part of the farming activities.

(vii) Define water quality guidelinesthat should be maintainedin the managementof the groundwaterand surface water sources. This may require consultationwith specific authorities in the case of residues from agrochemicals.

(viii) Identify proceduresthat should be used in monitoringwater quality and institutions that are capable of providing the requisite laboratoryservices.

(ix) Prepare a report, detailing the potential impacts from project development and providingrecommendations on mitigativemeasures that must be adopted by the im- plementingagency or other state or federal institutions.

(d) Wildlife Biplgisgt

(i) Review the informationavailable on waterfowland other bird species that inhabitthe fadama wetlands for part or all of the year.

(ii) Identify areas of specificimportance to waterfowland other avian species that might be impacted by the implementationof the project. Particular importance should be given to those areas that are covered by internationalconvention.

(iii) Conduct field reviews of the potentiallysensitive areas, particularly in the Hadeija- Nguru wetlandsto determine the extent of farmer incursion into these areas. - 85 -

(iv) In conjunctionwith ADP and other state staff develop guidelinesfor ensuring that incursion into sensitive areas is stemmedand that these areas are protected during future development.

(v) Identify the terrestrial species that inhabitthe fadamas, the numbers of these and the potential impact of fadama irrigation on these populations.

(vi) Identify the extent to which local populationsdepend on wildlife for food or other uses.

(vii) Work through the public participationprocess organizedby the social anthropologist to identifyconcerns and formulateappropriate wildlife management and or conserva- tion measures.

(viii) Prepare a report detailing the potentialimpacts of the project on avian and terrestrial species and recommendmeasures that must be taken to mitigate these.

(e) Public Health Specialist

(i) Review informationalready available in Nigeria and elsewhere with respect to the incidence of disease in irrigation systems with characteristicssimilar to that being proposed.

(ii) Design appropriate field samplingand survey methodologyfor the evaluationof the incidenceof water borne and other disease in the areas in which shallow ground water is already being used for irrigation.

(iii) Execute field surveys to evaluate the existinghealth conditionsin the areas irrigated with shallowgroundwater and the changesthat mighthave occurred as a result of the implementationof this activity.

(iv) Design a monitoringprogram to be followed at intervals through the course of the project.

(v) Prepare a report making recommendationsfor public health measuresthat should be implementedas part of the project.

Scheduleof Activities

14. The major activitiesto be undertakenduring the course of this EA and the timing of these and the staff assignmentsare shown in Figure 1. The environmentalassessment will be carried out between mid-Octoberand the end of February 1990. The team leader's assignment will be for an additionalone monthsand within this time he will have completedthe report. The assignmentsof the other team members will be as shown in Figure 1. Each team member will present the team leader with a completed report covering their activities, findings and recommendationsat the completionof their assignments.

(a) Review Terms of Reference

FACU will submit the terms of reference to appropriateagencies of the Governmentof Nigeria fnr their review and comment. The avencies consulted in this manner will include, but not be - 86 -

limited to, the Nigerian EPA, the Ministry of Health, the National Livestock Development Agency, the Forestry Department(for wildlifeconcerns), the Ministryof Water Resources and the four state ADPs, namelyKano, Sokoto,Bauchi and Katsina, to ensure that importantelements have not been overlooked. It is recommendedthat FACU organize a workshop to which the representativesof these agencies are invited and at which the TORs and the specific concerns expressed in them are explored and discussed. A revised TOR will be prepared on the basis of this and submittedto the Bank for further review.

(b) Mobilize EA Team

The project team will be mobilized as soon as all the members have been nominated and all parties have agreed to the TORs.

(c) Data Review and Design of Field Programs

Each memberof the EA team will be responsiblefor reviewingthe documentationrelevant to the project and to their general area of concem. In consultationwith the team leader they will prepare a program of field activities which will include samplingdesigns, staff and vehicle requirementsand a scheduleof activities. All membersof the team will co-operateclosely with the social anthropologistin planning and coordinatingtheir activitiesto achieve as much public input as possible.

(d) Executionof Field Programs

The field survey programswill be undertakenas soon as the prev-iouslydescribed activitieshave been completed. It is strongly recommendedthat all these field activitiesbe undertakensimul- taneously in order to make the best use of the available transportationother resources and also to be able to co-ordinate, as far as possible, meetings that would constitute the most important public participationcomponent of this assessment.

(e) Data Analysis and Report Preparation

The team members will undertake analysis of the field data and other relevant informationthat they have collectedas soon as they have completedtheir individualfield activities. These Reports will be submitted to the team leader for inclusion into a single integrated draft EA report correspondingto the attached outline.

(f) Preparation of MitigationPlan

The mitigationplan will form an integral part of the draft report that is to be prepared by each of the team members. It will describe the actions to be taken to avoid and mitigatethe potential environmentalimpacts identified as a result of the EA studies. Each of the specialistson the EA team will review the mitigation plan with the other members of the team and with relevant agenciesof the state and federal governmentsto ensure that they are fully understoodand that they are implementable. (g) Draft Report Review and Final Repoeparation

The draft report will be presented at a single project completion workshop (or a series of workshopsorganized on a state by state basis). The participantswill not only includegovernment - 87 - and non-governmentalagencies but also the other parties that may be affected the development and through whom aspects of the project or the environmentalmitigation plan will have to be implemented. At this workshopthe findingsof the team and the mitigationplans proposed will be reviewed in detail and input sought on ways in which the mitigation measures or the implementationof these may be improved. These suggestionswill be incorporatedinto the final draft report that will be reviewed by FACU with assistance from other institutionsof the GON which they may wish to involve. It will also be reviewed by the Bank staff. Commentswill be submitted to the team leader for inclusion in the final report in accordance with the schedule shown in Figure 1. - 88 - Annex XII NIGERIA Page I of 6

NATINAL FADAMA DEVELOPMENT PROJEA

=RQ&ON ENGINE

1. The primary objectivesof the assipment are to asist the SUI to develop internal capacityto designand installpractical, low cost and tecbnicallyefficient field-level irrigation systemsand to assistfarmers to optimizeproduction. In addition,the irrigationengineer will be requiredto supervisedrilling contracts and to experimentwith irrigation techniques with a view to improvingthose already in use by farmers.

AialgmsiLaak

2. The IrrigationEngineer will report to the ProjectManager and work as an advisorto the Directorof Engneering. Thetasks to be undertakenduring the courseof the assignment will include,but not be limitedto the following:

(a) Assistthe SIA engineeringstaff withthe identificationof fadamaareas for drilling,the preparationof technicalspecifications of tenderdoauments for ibewelland washboredrilling, the btehnicaleaustion of bids and the supevisionof contractors.

(b) TrainSIA etension staffand farmersin the design,field constructionand mintenan of smallscale irrigtion and drainagedistribution systems.

(c) Train SIA extensionstaff and farme in techniquesfor the proper operation andmaiance of pumps.

(d) Supervisethe selectionand establishmentof demonstrationplots at representativesites. Cooperateclosely with the IrrigationAgronomist and extensionstaff in the developmentof programsto demonstratewater management,crop management,tillage and harvestingtechniques to farmers.

(e) Reviewfield water managementprcices and identifymeans of improving these throughfield levellingand improvedtillage and seedbed preparaion. (t) Reviewgroundwater use patternsand monitoring data to asist the Fadama Use Associationsto makedecisions with respect to wateruse practicesand water consrvation.

(g) Reviewthe post harvestmagement andsore of crowp d ast in the design of improved handlingand storae failities, includingthe establishment - 89 - Annex Xll Page 2 of 6

of a pilot storage facility using evaporativecooling for prolonging the storage of vegetables.

(h) Cooperate closely with the National AgriculturalTechnology Support Project (NATSP) particularly with respect to the research undertaken for the selection of small-scaletUlage equipmentsuitable for applicationwith animal traction or small motor traction in the faWamas.

(i) Assist the SIA and the FUA in the identificationof soil and water management meaures that would contributeto the conservationof the environmental components of the fadamas. This might require actions on such diverse matters as measures to protect the groundwater from contaminationto the safe disposal of waste lubricants.

Oalalihicat'

3. The candidate for this assignmentshould have at least a first degree from a University with a well recognized school of agricultural engineeringor irrigation technology. He should have at least ten years practical experience in irrigation with emphasis on small farmer systems and the exploitationof shallow groundwaterof which a minimulmof five years should be in the countries with similar conditionsas Nigeria. Experience with the establishmentand operation of demonstrationplots and small machine operation and maintenancewould be a great asset. - 90 -

Page 3 of 6 IRRGATQNARONOM~IS

4. The primaryobjectives of the assignmentis to usist the SIA to developthe necessary expertisein the managementof irigated cropsso that they canprovide asistance to farmers on a sustained basis after the completionof the project. Thisis required because of the relaive noveltyof groundwaterirrigatimn in the rogionand prius emphais on the productionof uplandcrops.

-- TARflIMk

S. The rrigation Agronomistwil report to the Project Manaer and work s an advisor to the Directorof AgriculturalServices. The emphasisof the IrrigationAgronomists work will be on the train of the SIA staffand the developmentof a awarenessand capability that wi}lpermit them to successfullyexecute the futurepbhses of the project. Ihe task to be undertae duringthe coune of the assignmentwill include,but not be limitedto the following:

(a) Reviewthe techniquescurrealy used for the managementof irrigatedcrops in the area and devisemeans of imroving on thesein a mannerthat will contributepositively to the famers' welfare. (b) introducenew cropsunder fadma irrigaion.

(c) Reviewavailable market iformaion withrespect to actualad potel croppingsym in order to identifythe mostappropriate crops for fames to be growing,a wella the mostappropriate sequencing and timingof crops.

(d) Reviewthe soiUaalytical data, with particularemphasis on the nutrientand micr-nutrient stanasof the soils, in orderto establishfertlizer requirement basd on the rea, ratherthan perceived,needs of the crops. Alsotrain staff and farmes to recognizethe symptomsof soil salinityand/or sodicity from analyticaldata and fieldobservations and to take appropriateactions.

(a) Asist the SIA staff in the reviewof the majorpests that currendyafflict rrigatedcraps in the regionand the scticides and herbicidesused to combatthese. Genrate rom os for the use and selectionof paticides andwith the emphasison integratedpest mangement wherever posible and lo on the mesure that shouldbe adoptedto assurepersonal healthand safety d enronmal protection. (t) Coopae closdy withthe irrigationengineer In the sdectionand evaluation of imprved tilago, land and water maagemet techniques. - 91 - Annex XlII Page 4 of 6 (g) Cooperate closely with the irrigation engineeringstaff in the establishmentand managementof demonstrationplots.

(h) Review harvesting and post-harvest managementof crops to identify how these might be improved in order to increase returns to the farmer.

(i) Cooperate closely with the NATSP to ensure that appropriate and applicable tillage and crop managementpractices are incorporated into the irrigated fadama systems.

Oualificatins

6. The candidate for this assignmentshould have at least a first degree from a University with a well recognized faculty of agriculture. He should have at least ten years practical experience in irrigated crop managementunder arid conditionswith emphasis on small-farmer systems. Experience with the establishmentand operation of demonstrationplots and working with farmer groups would be a great asset. - 92 - AnUnx Page S of 6 CONTRACT ADMINIMA3MR

01i2= OfdeAim 7. The Candidatewho would report directly to the ProjectManger SIA willbe required to assistthe SIA in the executionof all phasesof contractexecution and to ensurethat this is done in a technicallyad commerciallysound manner, consistent with the WorldBank's procurementprocedurs andNigerian law on such matters. The contractsto be administered will requirefmiliaity withthe IntenationalCompetitve Bidding Procedures (ICB), under whichwell drilling, pump purchasing and certain consulting sarvices wil be purchased. Familiaritywith Local Competitve Bidding (LC3) will also be requiredfor the contractingof road construction,well drillingand localpurchase of goodsand services. In addition,the candidateshould be familiarwith local shopping procedures and have the capabilityto assist the SIAsprepare creative contracts. Thesemay be requiredfor purchasingsuch servicesas the contractingof drillingservices with fadama user goups and small-scaleoperators who wouldbe usingrotary, bailer or washboring rigs leasedor purchasedfrom the SIAs.

intIAkS 8. The assignmentwill include,but not be limitedto the followingta: (a) Becomethoroughly familiar with the projectdoce on includingthe staff apprai reportand the loanagreemenL (b) Be thoroughlyfamiliar with the Bank'sprocrement guidelinesand the prcedures to be followed in the prWeation of evaluadonreports. (c) Preparea procuremet schedulefor the life of the project.

(d) Preparebidding documents for all goodsand technicalservices to be purchasedby the SIA in accordancewith the Bank'stechnical specifications. (e) Preparebid invitadoncalls.

(f) Prepare short-lists of qualified suppliersof the requiredgoods and services.

(g) Prere letters of invitationfor contuction services using stndard Bank sampledoumen.

(h) Evaluatetenders and proposalsand adviseon slection of conrctos, consulta or suppliersof the requiredservices and goods. (i) Preparea manualwhich will includea checklistand guidelina for contract supervision, quality control and reporing procedures iuding certificationof satactory work completionin support of paymet documents. - 93 -

Annex XllI Page 6 of 6 (j) Prepare a program includingjob descriptionsfor staff of SIA responsible for constructionsupervision, quality control and progress monitoringof road works. Review the capacity of the existing staff to undertake the program and if found inadequate in quality and numbers, prepare a proposal to fill these inadequaciesby locally recruited consultants. In associationwith the internationally recruited irrigation engineer, prepare a similar program for the tubewell development.

kk) Prepare inncvative contracts for special driling services to be provided by the SIA's surplus operating staff and drill rigs in such a manner that competition with the small scale contractors of the private sector will be on equal terms and conditions.

Q) Train SIA staff in contracting and contract administrationprocedures so that by the completionof the contract there is a cadre of appropriatelytrained staff within the SIA capable of preparing, administeringand evaluating contracts.

Oualificat

9. The candidate for this assignmentshould have at least a first degree preferably civil engineering from a University. He should have at least ten years practical experience in civil egineering contracting work and in managementof contracts of which five years should be as a project manager or team leader of a contracting or consultingorganization. Experience in Nigeria or under similar conditionas Nigeria will be preferred. - 94 -

Annex 2911 page I of I

NATION FADAMADEVI,OMENT PROEC

TECHNICALASSISTANCE AND LOCALCONSULTANCIES

A. TochnicalAssitnc: Scheduloof Activitice

Activity Nlo.of MonthsAssiftnce by Year 1. _ 4 I l TueeiDay-o1pment in Bauchi. KMaoand Sokoto

Jir i -O inuw 36 36 36 0 106 Inigation Agrnoit 36 36 36 0 108 Ckus Adminiobstion 36 36 0 0 72 Fonrtion of PUAs 12 12 12 0 36 Study on Maetin of V.gables 0 12 0 0 12 Federa Minictrv of W r Resoures

Hydologixt 12 12 12 12 48

Consultationby FACU

rigadon EnginertHQ 12 12 12 0 36 gasgionEngineer at ICaduna 12 12 12 0 36 Studyon Local Man*factuinS of PwMp 0 4 0 0 4 Pwioralit-Famer Rekaionsip 0 6 6 0 14

472

3. Lwc Colancies: Schedule of Activities

Activity No. of Month Asance by Year

I a 2 4 Enavir_onmuntAsist 12 12 12 12 48 Moitoring of Waw Table 6 6 12 12 36

Soil Suvey 12 12 12 12 48

Caal Svmey 24 24 36 36 120 bnpe ctof Fadam 0 0 12 12 24 Developmentof Fmr Incomee

A.iu1 of Pojt by NFFCC 0 6 6 6 IS

294 Annex XIV Page 1 of 2

NIGERIA

NATIONALFADAMA DEVEMEU) TROIECr

Pronkdlmdemnlabo Scbedue

Pmjed Year PtM l 2 3 4 5 IBRDFicl Year 91192 92193 93194 94n95 95196 96/97 Clendar Year 91 92 93 94 95 96 QuvA I13 2 4 I 2 3 4 1 2 3 4 2 3 4 2 3 4 1 2 3

- Negaudaion * BonsdPzuuetstan *Effectivencu *ConqiottinDate -

PROlEC IMPLEMENTAN u Shlbt Tciwl Dc"kdneZ * CoanVkdinof aquifor dsA - Selectionof keyTSC inK - Seledaiof fadnma &umM for jeadypma. - Pinalizatioof lederdoemmi - Seletio of coamon A secation of driling

-Inv- ttli. of ADP dlleing . .mu

Sekdion of ko*ionr roe *sd* andmuktd sh. - Fimliml of lenderdommeb. - Canion of nftmrotum ... *...... EUM .Fodtionof FUA_ ,...... _ * CowRcoUwa Effoet. _ Lusg3 &MadWMa_-tin= m * = = - * = = ------Annex XIV Page 2 of 2

Pjed Yest PM l 2 3 4 S IBllDFind Yccr 91192 92193 93194 94195 95196 96/9t CakWs Yar 91 92 93 94 95 96 las.tcr1 2 3 4 l 2 3 4 l 2 3 4 l 2 3f4 l 2 3 4 1 2 3 4

- Fel Wouk in: (a) NodtbnaSates (b) MM&dlheft amu (a)SwAeM aim -Seadqpot an EAo toe Bak (a) Nodbenam * (b)Middle hekt ai (c)sobu s _ _ ADPIeel wodishi onEA (a) modbhm aeAs (b)Middis. be. ai* ..... (c)SouAhernM m-

.Sojuri r.** *Psiorslid-FamwiRelaionhip .. *- *Sixan"o, pwinimaapwou I…

v*jg.wRenodings an Auditl L- Mid-Tur Raview - oilinReview

- AmWAuitAccownts- - - d - 97 - Annex XV Page 1 of 4

PROlECrMQNrrORING RE MENT

1 The momisoringwtivitie relaoedto thisprojac csis of four meo elem: (a) montring for project sup.rviWn; (b) mitodng of projectpl achievement;(c) monitoringof oils ad dallow quifer conditios and (4) montoringof mofae wate at a nver basinlvel. ls ams of all th monitoring activitis mil, vi, toaist tihoe piblo for theongoing __.sgmuu to maintsina coio_u chuckan the prps of the proe, nd to allowt_ to antpat pria .. ad to dua withthe in a timelymar. The resp bilityfor th eeuon of the nmoing prorm fNll tho specific intiuions tht rquin the iormaton for thir decision king proces-m. These wil be shw in th followin paraaphs. in ac cs, however,it is esuentialthat identifiable ad quanih idito we esblid at the ta of the proect andfom the 1baisof which to m_sarm proS.. Tu1 indiato muatt bereviwed at rog1ar inava throughoutth courseof te poct in orde to gaeo the requisitemanagement feedback.

I MmniIorinfor Proiw Suon wi PAriorto ProiecbMnoliention upoe: To moe the Dk tht the preconditionsfor facng we w t by to State and Fedwml Governments. Responsible: Banksaff withthe asistao of FACUand ADPrpot. Componets (1) esabliont of conditionsfor negotatio (m Figr 1); (2) eAblhmemt of condiiaonsfor proect fenasgjsRaa disbusemt (seeFigur 1) Baowtion Themonitorin will be carrd outby th provi to th Dnk of - pastsof the activitie of the ADPs nd FACU with respectto th prop towads th dsirnd milsoeL If ncoe y, Bank stff willvisit thm ins out pior to eoiions loanefective to _r themeves tat thospcified actione, infect b tko Actios: Go/no-g decion bwthe Bankwith rpect to te fiancig of the pojecL

Purpose: (1) To evaluatethe progrs of the pojct with _pect to disbursementsad achievemnot of estblidod mnilson. (2) To evl_u tbe impactof th projecton to welbeingof the inteded bficisaes

Respoible: Dak sff, ADPs,APMEU, FACU.

-a (1) Basine itdion

1 - 98 - Annex XV Page 2 of 4

(2) Physicalgoal achievent (woUsdrilled, pump suppliedetc.) ) Projectimpacts (effects of projecton wollbeingof participanu. Execution: Th trakng of oalottinmet willbe achievedthrough the combinationof the detiled meview of td ul moitoringuports gpnertd by the ADPsthemselves in coordinaionwith APMEU (paagrph 3) andthe field reviewof the projoctby Bankstff. Baline conditionswill be sablishd immediatelyafter projectunplemnttaion.

Actions: r1 1o_maionsto FONwith rpt to o-going executionof the project.Dcison with qectPo fuur disbursementfor endcomosition of fams imitian projets.

3 fr1_MA_

Pupos: (1) Trcking of estblishedproject milest in term of dbursmntsand physil tuget chiovemt (wellsdrilled, pumps wppliod,rods co)nicted e) (2) To eluat the impactof the projecton the welbeingof tho ieded beneficiarie. Responible: ADPstough theirown mton ng unitswith m oancfrom APMEU.

Compoeets: (1) Balie conditions:the baline conditionsfor eac of the projct componn au to be stablisedduring firt six monthsaftw effectivemees. (2) Pbysicalgoa chieveomtby Component

(a) Dillig prgr ad pumpsupply (numbers achieved;

(b) PFdeu ifeacur (rods, somae dheds. cd strg); (c) FadPaUses Asoit (numbenformed ad nmblerof pariipan); (d) MonitonSgand Sdies (tblishm and opeaoo of data colction sysm sUtti withwet depth mplig nd soilad wate samplingby FU); (3) Rat of pojectd mnt

(4) Impct onPaticipa (blin daa rquud for th eution of thieseipact): (a) Ilopt on frmr wellbein

(b) Evio_ tal andsocial impat monitorng(including accermof Fadam

(e) Effecive of NFDPoriational stuct withi ADPs.

Executio (I) asline_meum t andmotoring of componntsa tod wiUlbe cid ou annually blythe ADP mitoing umtswith th astoe of APMEU. Ahma reot wil be

2 Annex XV 99 - Page 3 of 4

prepared for presentationto FACU and the Bank.

(2) Environmentaland social impact monitoring should initially be done by competent instiutions, suchas universitiesunder contract to FACU.Annual reports will be prepared for presentationto FACU and the Bank.

Action: Docisions by ADPs and FACU with respect to ongoing managementof the projects and adjustments required in order to meet project objectives more effectively. Input to bank for project supervisionpurposes.

4 Monitorina of Soil and Water Conditions in Fadamas

Purpose: To ensure the sustainabilityof the project through the maintenanceof aquifers and of soil and water conditionssuitable for crop production.

Responsible: (1) FUAs to record water table levels with assistanceof ADP staff.

(2) FUAs to samplesoils and water with assistanceof ADP staff.

(3) FUAs for the recordingof crop yieldswith assistanceof ADP extensionstaff.

(4) ADPs for contractinganalytical services for soils and water

(S) ADPs for data processingand storage.

Execution: The ADPswill undertakethe trainingof farmers in the FUAsin water depth recordingtechniques and in soil and water samplingtechniques. They will coordiLatethe accumulationof samplesand data and the distributionof samples to laboratories. The ADPs in coopertion with FACU will seek specialized assistance to review data and make appropriatemanagement decisions to be communicatedto farmers through extensionsystem. All water table monitoring data will be passed on to FMWR for inclusionin river basin monitoringactivities.

Actions: Decisions with respect to water and soils managementh assure long-term sustinability of irrigation systems.

S Monorini of SurfaCeWater Resources.

Purpose: The collectionof data for input to river basin managementplans and operations. This monitoring will provide the basis for ensuring that the needs of aUwater users are met in so far as is possible wd that adequatebasejows are maintaited in the rivers.

Responsible: The Water Resources Department of the FMAWRRD, through the individual river basin authorities. ADPs will provide to the Water Reources Department data collected in irrigated fadamas on the numbers of farmers irrigating, cropping sequences used and depths of shallow acquifers. Components: (1) Monitoing of river flows.

(2) Monitoringof rainfall and other climatic data that determineriver flow conditions.

3 - 100 - Annex XV Page 4 of 4

(3) Monitoringof allother users of thewater resoumes,water nghts andallocations.

Execution: Support will beprovidod through the allocation of Bankfunds to FMWR to develop the required nioitoring capacity. River basin conditionsshould be monitoredcontinuously with data recorded onto daa bow for analysisusing appropriat GIS (at state level). These proceduresshould be used for the ontinuousupdating and adjustmentof water allocations.

Actions: (1) FMWR with the istance of the Bank will ppare a plan for institutionalstrengthening to pumit them to executethe requisitemonitoring activities. This will includedetails of the rquirements for; staff trining, computersystems, transportation,office space and equipot.

(2) FMWR will prepaer a monitoring plan and st to execute this to coincide with the implementadonof the N:DP. A101 X

Page 1 of I

NATIOAL FADAJA DEVELOPMEN EROECT NQIGERIA

SuDervision Plan

1. Bank supervisionof the project would be closely linked to the implementation schedule presented in Annex XIV. The schedule of supervisionmissions presented below includes three visits during the first year of the project, to monitorsatisfactory progress towards the conditionsof effectivenessand disbursementdealing with various up-front actions for selection of fadamas, farmer organization, finalizationof drilling contracts and staffing. Subsequently,there will be two supervisionmissions each year. The project will also benefit from one thematic supervisioneach year related to rural infrastructure, audit and privatization. The project supervisionmissions will require ten staff weeks each year of Rural Credit Specialist and Irrigation Engineer, and five staff weeks of Project Economist/Officer. The supervisionmissions for NATSP will also complementsupervision of this project in terms of the assessmentof the impact at farm level.

cY 1992 1993 1994 1995 1996 Quarter 1234 1234 1234 1234 1234

1. Project LaunchingWorkshop 2. SupervisionMission s * * * * * S S 3. ThematicSupervision missions S * * * * for rural infrastructure, audit, privatization 4. Mid-Term Review * lKa Indicators

2. FACU andAPMEU will be responsiblefor collectingthe data on various key indicators dicussedin Annex XV. The Mid-Term Review of the project will particulaly review, apart from the components covered in Annex XV, progress made towards (i) privatization of in-house drilling teams of SIAs; (ii) full cost recovery; (iii) innovative conuacts for drilling; and (iv) the use of NFF. - 102 - Annex XV'lI Page 1 of4

TABLE 1: CALCULATIONS FOR PARITY PRICES (FOR MARCH1991)

Rice Wheat

Foreign Reference market Bangkok Gulf World Price(S/ton) 320 134 Freight, Insurance($/ton) 60 62 C.I.F.Lagos($/ton.) 380 196

C.I.F. Lagos(N/ton) 4750 2450 Source to Port Engugu Kaduna Kms from Source 240 500 Rate/mt/km(N/ton) 0.5 0.5 Transport Cost 120 250 Intrastate Transport Cost 100 100 Transport & Storage Losses(2%) 95 49 2 months Interest 142.5 73.5

Economic' Farmgate Price (N/ton) 5107.5 2822.5

Financial Farmgate Price (n/ton) 5000.0 5000.0 - 103 -

Annex XVII TABLE 2: FINANCIAL & ECONOMIC RETURNS FOR PADDY ------WITHOUT IRRIGATION Page 2 of 4

CROPS: PADDY Financial Economic Quantity per Price Price ha in kg. (price per kg.) Output 2500.0 3.3 3.3

Input Planting Material 100.0 3.0 3.0 Urea 50.0 0.8 4.8 Compound 100.0 0.8 4.8 Packaging Material 100kg/bag 6.0 9.0 Labor 100.0 20.0 17.0 Fuel 0.7 0.7

Total Cos(N/ha.) 2570.0 2945.0 Profit (N/ha.) 5555.0 5342.5 _ 104 - Annex XVII Page 3 of 4

TABLE 3: FINANCIAL AND ECONOMICRETURNS WITH IRRIGATION N BEFORE TAKING INTO ACCOUNT THE CAPITAL COSTOF DRILLING L PUMPS

CROPS: PADDY WHEAT

Financial Economfic Financial Economic Quantity is in Price Price Quantit is in Price Price kg/he. (price per kg.) kg/he. (price per kg.)

*...*...... Output 3500.0 3.3 3.3 2000.0 5.0 2.8

Input Oty/he Input

Planting Planting Material 100.0 5.0 5.0 Iateria 100.0 3.5 2.9 Urea 100.0 0.8 4.8 Urea 100.0 0.8 4.8 Co,rpound 300.0 0.8 4.8 Cipoumn 300.0 0.8 4.8 Packaging Packaging 100kg/bag c Material 100kg/bag 6.0 9.0 Material 6.0 9.0 Labor 120.0 20.0 17.0 Labor 80.0 20.0 17.0 Fuel 55.0 0.7 0.7 Fuel 220.0 0.7 0.7

Total Cost per ha. 3469 4813.5 2544.0 3901.0

Profit per ha. 7906.5 6789.0 7456.0 1699.0

COWPEA VEGETABLES

Financils Economic financial Economic Quantity is in Price Price Ountit is in Price Price kg/ha. (price per ko.) kg/ha. (price per kg.)

1200.0 4.5 3.8 9000.0 4.0 3.4

Input Input

Planting Plantin Materiat 40.0 7.0 7.0 Nateria 0.5 300.0 300.0 Copmoad 200.0 0.8 4.8 Urea 250.0 0.8 4.8 Ch_icals 7.0 70.0 60.0 Coawpoea 250.0 0.8 4.8 Packaging Packagig 100kg/bag Material 100.0 6.0 9.0 oaterial 6.0 9.0 Labor t00.0 20.0 17.0 Labor 240.0 20.0 17.0 Fuet 220.0 0.7 0.7 Fuel 220.0 0.7 0.7

Total Cost per ha 3156 3622.0 6044.0 7594.0

Profit per ha. 2244 968.0 29956.0 23006.0 - 105 - Annex XVII Page 4 of 4

TABLE4: ECONOMICRATE OF RETURNFOR DEVELOPING50,000 MA. OF IRRIGATEDLAND

BenefitsL Returns at 1991 Prices (in N million) Year 1 2 3 4 5 6 7 8 9

Incre. enefits 48298 110396 224242 353267 353267 304969 249771 142555

Stavlesvatue 10125 12574 24563 28125 for WettI

...... Total 0 48298 110396 224242 353267 353267 304969 249771 142555 ...... Inecr. Costs Capitat 225883 160006 249666 221201 Recurrent 4467 5307 5869 6058 6058 6058 6058 6058 6058 ,...... TotatCost at 1991 Prices 230351 165313 255535 227258 6058 6058 6058 6058 6058 ,......

Net Incr. lenfits -230351 -117015 *145139 .3017 347209 347209 298911 243713 136497 ......

ERR 24.34 - 106 - AnnexXVIII Page I of 1

b3GERIA

NATIONAL FADAMA DEVE?4EN PROJE$; Cost RecoveryArrangements

1. The followingfull cost recoveryarrangements are proposedfor variouscomponents of the projectfinanced by the Bank, and state and federalgovernments. The arrangementscover the direct cost recoveryfrom farmersas wellas indirectcost recoverymeasures. The details of the cost recoveryarrangements will be finalizedat negotiations.

2. On-FanMInvestment (USS51.5). This includes the cost of shallow-tubewellswith pumpsfrom the loan, whichwill be fullyrecovered from farmers over a repaymentperiod of not longerthan five years. Farmerswill be chargedan interestrate whichwill not be less thanthe interestrate chargedby commercialbanks for similarloans with similarpurpose. At present,the interestrate chargedby commercialbanks on mediumto longterm loansvary between18% to 21%. The presentinterest rate on the WorldBank loan is about8% and the projectedaverage rate of depreciationof Naira is 7% per annum. Therefore,if the farmers are charged21% interestrate, the SlAs willreceive the marginof about6% after allowing for depreciationof Naira. Assumingthat farmerswill haveto repayto SIAsover five years, the SIAswill earn aboutUS$15 million from this interestspread. This amountis adequateto recoverthe total cost of fadamaroads and marketingand storageinfrastructure (US$3.5 million),institutional development (US$7.5 million) and monitoringat state level(US$2.6 million),as well as unforeseencontingencies. Any changesin the interestrate structurewill be communicatedto the Bank.

3. AccessRoads (US$7.1 million). Thebenefits of accessroads accrue to fadamaas well as adjacentupland farmers and hencethe relatedcosts, amountingto aboutUS$3.5 million,will not be recovereddirectly from fadamafarmers. Suchcosts will be indirectly recoveredby LGAsthrough their collectionof marketcess. Thepresent market cess is N20 per ton of agriculturalcommodities. Assuming that the farmersirrigate 0.5 ha of land per shallow-tubewelland grow paddy in wet season,and wheatand vegetablesin the dry season; it is estimatedthat LGAswill be able to collectcess of US$0.3million per annumbecause of this project. This amountis adequateto recoverthe fullcost of accessroads over their life. 4. Intutional Development(USS7.5 million). As indicatedin para 2, this cost will be filly recovereddirectly from beneficiaries.

5. Planning.Monitoring and Evaluation(USS8. 1 million). This comprisesof the cost of planning,monitoring and evaluation,and studiesincluding environmental assessment at federallevel. Ihese costswill be met throughgeneral revenues not specificallycharged to the project. - 107 - AnnexXfX Page 1 of 2

FEDERAL REPUBLIC OF NIGERIA

NAEONAL FADAMA DEYELODPrENTPROJECT

DOCUMENTS AVAILABLE IN PROlECT FILE

A. uckgrgound

1. Strategy for Agricultural Growth in Nigeria World Bank Agricultural Sector Report No. 7988-UNI, December 1989

2. Agricultural Policy for Nigeria Ministry of Agriculture and Natural Resources (formerly Federal Ministry of Agriculture, Water Resources and Rural Development), January 1987, Lagos

3. Sub-Saharan Africa: From Crisis to Sustainable World Bank, Growth - A Long-Term Perspective Study Washington, D.C., November 1989

4. Small-Scale Irrigation Development for Nigeria FACU, 1988

5. Food Security and Nutrition Study for Nigeria World Bank, 1991

6. Project Completion Reports for Bauchi, Kano FAO/CP, 1991 and Sokoto ADPs

7. Draft Initiating Memorandum for Fertilizer World Bank, 1990 Sector Adjustment Loan for Nigeria

B. Project Identification and Preparation Renort

1. Small Scale Irrigation Component (Fadama FACU, 1991 Development) ADF I - 108 - Annex Page 2 of 2

2. Thematic SupervisionMission of Fadama FAO/CP, 1989 Component in ADPs

3. Watari Irrigation Project: Final Report KNARDA, October on Updating of Feasibility Study 1987

4. Project Completion Reports for Bauchi, Kano and Sokoto ADPs

C. W.rlking Papars

1. Supply of Credit for Fadama Developentin Project States 2. Role of Private Sector in Fadama Development 3. Functions and Working of FUAs 4. EnvironmentalImpact Analysis of Fadama Development in Bauchi, Jigawa, Kano, Kebbi and Sokoto

; MAP SECTION

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