CFC/ICO/15 Progress Report January-December 2007

Annual Report January-December 2007 January 2008

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

Eng. João Ferreira da Costa Neto (INCA) Dr. George Oduor (INCA) CFC/ICO/15– Progress Report January-December 2007 Pilot Rehabilitation of Neglected Coffee Plantations into Small Family Production Units in Angola

CFC/ICO/15

Annual Report January - December 2007

Submitted by: Instituto Nacional do Café (INCA)

Prepared by: Eng. João Ferreira da Costa Neto Dr. George Oduor

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

PROGRESS REPORT

I. Project Summary:

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

Number: CFC/ICO/15

PEA: Instituto Nacional do Café (INCA).

Participating country: Angola

Starting date: March 2006

Completion date: February 2009

Financing:

Total Project Cost US$ 8,531,477 of which, CFC Financing US$ 4,749,989 (Loan: 2,760,016 and Grant: 1,989,973) Counterpart contributions US$ 3,781,488

II. Period covered by this report:

From: January 2007 To: December 2007

Periods covered by previous reports:

From: March 2006 To: June 2006 From: March 2006 To: December 2006 From: January 2007 To: June 2007

III. Status of Project Implementation

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

Activity 1.1 Conduct Gather production Survey undertaken Target fully met socioeconomi related socio- and report written c baseline economic data in survey project area Activity 1.2 Produce Avail at least 4 Additional 6 million Delays caused by coffee million coffee planting bags paid non-availability of seedlings seedlings for for and 2.55 million loan funds. To be rehabilitation, delivered. continued in next renovation and reporting period. experiments Activity 1.3 Undertake Identify soil Soil samples Activity on going analysis of soil properties at analysed at MoARD selected sites in (Angola) and project area. OMNIA (S. Africa) and report submitted Activity 1.4 Improve Train farmers on Technical Brigade Activity on going coffee crop correct agronomic training farmers husbandry and post harvest practices Activity 1. 5 Rehabilitate smallholder Identify and Training on Activity on going coffee farms rehabilitate farms improved agronomic practices on going. Transplanting of seedlings from nursery to the field commenced. Activity 1.6 Renovate unproductive Identify and Training on Activity on going coffee plantations renovate farms improved agronomic practices on going. Transplanting of seedlings from nursery to the field commenced. Activity 1.7 Rehabilitate Identify and Same as Activity 1.5 Same as Activity 1.5 abandoned rehabilitate coffee abandoned farms plantations within resettlement schemes Component II: Commercialisation of Coffee Activity 2.1 Undertake Collect information Study undertaken Target fully met

coffee on flow of coffee and report written. marketing from producer to study exporter, identifying the processing methods and marketing structure and recommending ways of improving this. Activity 2.2 Collate coffee market Regularly collect Template for Activity on going. information and analyse information information on gathering and use national and has been developed international coffee on Access computer market, compile and programme. disseminate reports Activity 2.3 Improve coffee hulling Procure, install Activity to be Procurement of facility coffee processing implemented in next machinery/equipmen equipment/machiner reporting period t delayed due to lack y and train on the of funds same Activity 2.4 Introduce coffee quality Train key extension Consultant engaged Target fully met. improvement measures staff on proper pre- and trained INCA and post-harvest staff of coffee procedures that improvement enhance coffee techniques quality Activity 2.5 Support internal Provide fiducial INCA and BPC Activity on going marketing of coffee funds for use by signed an farmers to agreement for the commercialise their administration of the coffee loan funds (for micro credit). Loans to traders will assist in commercialisation. Component III: Settlement Scheme Activity 3.1 Identify and select Government to Appropriate land Target fully met. suitable land for identify suitable land identified and settlement on which to settle divided into parcels dislocated farmers. in Gabela Activity 3.2 Select appropriate Identify people who Displaced people Target fully met settlers escaped fighting willing to continue and temporarily held with farming at a camp in activities identified Sumbe, who are by Government, willing to continue transported to and with farming, settled in Gabela especially coffee. Activity 3.3 Organise selected Settlers encouraged Farmers organised Activity on-going. settlers into to join existing into 220 solidarity associations Associations or groups, 86 newly formed one, Associations and 11 to increase their Cooperatives and bargaining power are currently being

trained on the running of farmer groups as business entities. Activity 3.4 Facilitate concession of Assist farmers to Contacts made with Activity on-going. title deeds to have titles to their MoARD staff to settlers/farmers individual land facilitate survey of parcels project area and subsequent issuing of titles. Activity 3.5 Construct houses for Assist resettled Most of the resettled Activity to be settlers farmers to construct farmers have implemented as houses already constructed soon as materials some form of purchased and housed. Project delivered need to assist in improving some of these structures Activity 3.6 Construct social Improve the Procurement of Activity to be infrastructure infrastructure in the materials not done implemented as project area yet. soon as materials especially roads, purchased and schools, health delivered posts Activity 3.7 Initiate agricultural Provide agricultural Horticultural seeds Activity to be production inputs like seeds procured and intensified as soon and tools to enable delivered to farmers. as inputs purchased farmers commence Additional farm and delivered production of food equipments to be procured. Activity 3.8 Undertake food for work Encourage local Procurement of Activity to be population to assist materials and food implemented as in the improvement not done yet. soon as materials of the local Farmers however and funds availed. infrastructure prefer payment in (roads, schools, cash for labour health post) in rendered. return for food Component IV: Support Services Activity 4.1 Form new/strengthen Same as Activity 3.3 CLUSA training Activity on going existing farmer farmer group organisations members and officials. Activity 4.2 Provide support to Identify and Collection of coffee Activity on going research and undertake demand- varieties experimentation driven research maintained, needs aimed at addressing of coffee seed farmer constraints production at INCA (on improved coffee (Gabela) identified. varieties, soil Varietal trial requirements, etc) installed, soil analysis commenced and INCA staff trained

on-the-job. Activity 4.3 Strengthen coffee Improve the Technical Assistants Target fully met. related services for dissemination of in the area of rural However equipment technical assistance research findings credit and rural still to be procured. (including procurement) from researchers to extension undertook farmers as well as studies and wrote increasing farmers final reports. access to credit Component V: Institutional Support Activity 5.1 Establish market Set up a system that Technical Assistant Target fully met information system avails appropriate set up market coffee marketing information system, information for to be improved and various coffee used by INCA stakeholders Activity 5.2 Establish and use A system developed INCA identified Mr Activity on going management within INCA to Jose Mahinga to be information system ensure the proper involved in the and timely project and he implementation of underwent training the project in Information Management in the UK. Activity 5.3 Train INCA staff Train 2 staff in On-the-job training Activity on-going. coffee liquoring of INCA staff by Quality Coffee consultant done at INCA. Activity 5.4 Undertake exchange INCA staff member Staff identified Activity planned for visits to relevant to visit and learn next reporting period international institution more at an when funds are international available organisation Activity 5.5 Procure and distribute Purchase Some equipment Purchases not equipment and equipment needed not purchased and completed due to materials for the distributed. non availability of implementation of funds. the project Component VI: International Technical Assistance Activity 6.1 Identify and contract A long-term Dr George Oduor Target fully met long term Chief Technical Advisor (of CAB Technical Advisor engaged and based International) (CTA) in Angola to continued to offer supervise the technical and implementation of administrative the project activities backstopping. Activity 6.2 Identify and select short Specific short term Market Information Target fully met term technical project activities system, and Quality assistants undertaken by Coffee consultants qualified consultants undertook studies and wrote reports

Component VII: Project Management Activity 7.1 7.1 Organise and hold Project formally Project successfully Target fully met project planning inaugurated and launched in Luanda workshop popularised. in May 2006 and officially opened by Minister of MoARD Activity 7.2 Establish Project A full complement New project Search for Management Unit to PMU in place to accountant engaged alternative PMU staff coordinate and organise coordinate the and trained. ongoing. project implementation implementation of PMU relocated to the project. Gabela in November Activity 7.3 Organise and supervise Specific pieces of Consultants Target fully met short term work undertaken by undertook studies consultancies qualified consultants under the supervision of the CTA Activity 7.4 Establish and Project implemented Administrative and Activity on going implement effectively following accounting administrative and the CFC Financial procedures in use. accounting procedures and Administrative Project accountant and train in the same procedures trained by CTA. Activity 7.5 Organise and Ensure that project Organisation and Target fully met coordinate staff training staff are trained supervision of training of staff done. Activity 7.6 Develop detailed Activities to be Workplans and Workplans and workplans and budgets implemented in a budgets for 2008 budgets were to be given year, together developed. approved by PSC with available which is still to be resources convened. developed participatorily Activity 7.7 Establish and M&E system System including Activity on-going implement effective developed and visits, meetings, etc monitoring and used. utilised. evaluation processes Activity 7.8 Hold PSC meeting PSC constituted and PSC meeting not Activity postponed meet regularly to held due non- oversee the availability of some effective members. implementation of the project Activity 7.9 Host ICO annual Organise visit by Supervision done by Target fully met supervision visits ICO to project area ICO, CFC and IACO to monitor progress between 29th May and 4th June. Activity 7.10 Prepare regular reports Progress reports Third progress Target fully met written regularly and report (Jan-June) sent to CFC/ICO and annual report and collaborators. (this one) written.

IV Resource utilization (in US$)

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

SUMMARY in US$ Component Budget for Period Jan - Dec' 07 Actual for Period Jan - Jun' 07 Balance Angola CFC Grant CFC Loan Angola Govt CFC Grant CFC Loan CFC Grant CFC Loan Angola Govt Govt

Component 1 0.00 303,235.00 78,327.00 5,132.91 1,155,629.76 20,579.58 -5,132.91 -852,394.76 57,747.42 Component 2 10,950.00 205,000.00 10,400.00 2,000.00 200,000.00 0.00 8,950.00 5,000.00 10,400.00 Component 3 0.00 0.00 46,000.00 0.00 0.00 239,667.88 0.00 0.00 -193,667.88 Component 4 76,266.00 0.00 282,467.00 79,509.00 155,254.71 58,754.43 -3,243.00 -155,254.71 223,712.57 Component 5 31,900.00 0.00 101,300.00 15,501.01 12,230.08 16,398.99 0.00 89,069.92 Component 6 15,900.00 0.00 1,600.00 0.00 0.00 15,900.00 0.00 1,600.00 Component 7 251,700.00 0.00 48,500.00 89,990.19 239,267.43 161,709.81 0.00 -190,767.43 Contingencies (5%) 19,336.00 25,412.00 28,430.00 19,336.00 25,412.00 28,430.00 Total 406,052.00 533,647.00 597,024.00 192,133.11 1,510,884.47 570,499.40 194,582.89 -1,002,649.47 -1,905.40

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

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

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

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

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

V PEA’s Assessment of Project Progress & Prospects:

V.1 Assessment of Technical Progress:

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

Activity 1.1 – Conduct socioeconomic baseline survey:

Activity undertaken fully and final report bound and distributed.

Activity 1.2 – Produce coffee seedlings:

Production of coffee seedlings is a major activity in the rejuvenation of coffee farms in the project area. This activity went on in the three designated categories of farms namely those to be rehabilitated ( principally in Assango, Mato Grosso, Manuela, Quipuco, Kuwa,

Hengue, Manga, Maria Ganza Quiitandala, and Kamondo), those to be rehabilitated and previously part of large estates (Damba do Congulo, Congulo, Gonga, Nova Ereira, Boa Lembrança, Monte Estoril and Mucuco) and finally those to be renovaed (Saydi Mingas, Maria Augusta, Cecilia,Filipa, Manuela, Samba, Vungi, Kikanda, Kipindo, Zunzua, Londa and part of Honga). This activity continued despite the heavy rains which ended in May.

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

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

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

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

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

Activity 1.3 – Undertake analysis of soil:

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

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

Activity 1.4 – Improve coffee crop husbandry:

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

Activity 1.5 – Rehabilitate smallholder coffee farms:

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

Activity 1.6 – Renovate unproductive coffee plantations:

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

Activity 1.7 – Rehabilitate abandoned coffee plantations within resettlement schemes:

Same as for Activity 1.5.

V.1.2. COMPONENT II: Commercialisation of Coffee

Activity 2.1 - Undertake coffee marketing study:

Activity undertaken fully and report distributed.

Activity 2.2 - Collate coffee market information:

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

Activity 2.3 - Improve coffee hulling facility:

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

The project has purchased a coffee liquoring unit (composed of a small roaster, huller, grinder, etc) from Colombia and installed it at the INCA laboratory in Luanda. A staff member of INCA was trained on coffee classification and tasting in Brazil in the last reporting period, and Coffee Quality Expert visited the project and gave further advice on how to utilise this facility.

Activity 2.4 - Introduce coffee quality improvement measures:

A Coffee Quality Technical Assistant/Expert was engaged in July following an international call. He trained staff at INCA’s Gabela station on different aspects of coffee

11 CFC/ICO/15– Progress Report January-December 2007 quality (pre- and post-harvest) including proper coffee harvesting, drying, storing and measures of quality control such as the use of moisture meters. A detailed technical report was compiled, including recommendations on how the quality of Angola coffee can be improved.

Activity 2.5 – Support internal marketing of coffee:

The first disbursement of the loan was made to the project in June. This was after the project opened an account at Banco de Poupanca e Credito (BPC) which will serve as the intermediary in channelling the loan to, and repayments from, the beneficiaries (farmers and traders of coffee). Mechanisms of operationalising the credit system were developed and will be finalised and used in the next reporting period.

V.1.3 COMPONENT III: Settlement Schemes for Displaced Farmer Families

Activity 3.1 – Identify and select suitable land for settlement:

Land has been identified, subdivided and occupied by farmers.

Activity 3.2 – Select appropriate settlers:

Previously dislocated and “local” farmers have been selected and allocated plots.

Activity 3.3 – Organise selected settlers into associations:

To facilitate this, INCA signed an agreement with the Cooperative League of the USA (CLUSA). CLUSA organised the collaborating farmers into 220 solidarity groups (10-30 members each). These were further organised into 86 Associations and in turn into 11 Farmer Cooperatives. The registration of these farmers groups as legal entities was initiated. Farmer Associations members were assisted to open bank accounts during which a sum of over US$ 20,000 was deposited into their accounts. Training of association members and officials (Chairperson, Secretary and Treasurer) were also initiated, including training in developing business plans and soliciting credit from banks.

Activity 3.4 – Facilitate concession of title deeds to settlers/farmers:

It is important that farmers are organised into legally constituted associations before they are issued with titles to their individual pieces of land. Both INCA and CLUSA are working with the relevant government institutions and the local headmen (“sobas”) to acquire the titles. The farmers could then use these titles as collaterals when applying for loans.

Activity 3.5 – Construct houses for settlers:

Almost all the settlers already have houses, some of which the project hopes to improve. A complete list of all the farmers collaborating in the project in the different associations/farmer groups has been compiled. After consultations with the beneficiaries, it was agreed that corrugated iron sheets be provided to help in the rehabilitation of the farmers’ houses. This activity will be enhanced during the next reporting period.

Activity 3.6 – Construct social infrastructure:

As recommended by Dr Elverskov (the Socio Economics and Rural Development Consultant),and agreed upon by the local community, it is more appropriate to lay more

12 CFC/ICO/15– Progress Report January-December 2007 emphasis on the improvement of existing infrastructure (schools, health posts, etc) instead of constructing new ones. However, discussions with collaborators from 14 selected sites, indicated that they would rather have new infrastructure constructed, given the remoteness of the locations (far away from CADA and Gabela). Improvement of schools was identified as the priority and 4 beneficiary schools (Quitandala, Chulo, Damba de Congulo and Maria Agusta) identified. The project procured 70 doors/frames, 170 windows/window frames, 200 bags of cement, 30 bags of lime, 120l paint, 100 iron sheets, etc. as well as food for locals who help in the construction. Besides the items bought by the project, the local communities also provided sand, building stones, etc.

An budget for the rehabilitation of 2 health posts (Nova Ereira and Congulo) was also developed and will be implemented in the next reporting period.

The roads are in bad shape, and some are impassable during the rains.

Activity 3.7 – Initiate agricultural production:

The project also encourages the farmers to produce food crops like beans, maize and bananas. Government funding is awaited to assist in the purchase of seeds of these crops, as well as goats. This will supplement the seeds of horticultural crops (cabbage, tomato, onion, etc) which the project bought and distributed to farmers in the previous reporting period.

Activity 3.8 – Undertake food for work:

Recent visit to the area found out that farmers were requesting for food to work on their own coffee fields. The Project Management explained to the farmers that this was not intended to be the case as the proposed food was to be provided by the project to pay for the labour required to construct houses, health posts, schools, etc.

As explained in Activity 3.6 this was done. Over 400kg maize flour, 100kg rice and 48l of vegetable oil were delivered to the community.

V.1.4 COMPONENT IV: Support Services

Activity 4.1 – Form new/strengthen existing farmer organisations:

CLUSA will undertake this activity in close collaboration with other Government institutions like the Confederação das Associações de Camponeses Agropecuaria de Angola (UNACA) and the Agrarian Development Institute (IDA). Besides formation of associations/cooperatives, members of such organisations will be trained in business skills. Also see Activity 3.3.

Activity 4.2 – Provide support to research and experimentation:

A hand-held coffee pulper was procured and delivered to the INCA station of Gabela. This was to improve the speed and efficiency of producing quality coffee seeds. The pulper was used from the beginning of the harvest season.

A field trial to evaluate seven Arabica coffee varieties (Caturra, Red Catuai, Hybrid Timor, Catimor “Line”, Icatu, Tupi, and NP1) and one Robusta variety (Amboim) was set up at Gabela in July, after the procurement of irrigation equipment/materials. This trial was planted in a randomised block design at a spacing of 2 X 2m for all varieties. Factors to be evaluated are incidences and severities of pests, diseases as well as yield and bean quality.

INCA staffs (scientists, extensionists, etc) are actively involved in all the field activities and as such acquire important on-the-job training including soil sampling techniques, experimental design, data collection, pest and disease identification, propagation techniques, etc.

Activity 4.3 – Strengthen coffee related services for technical assistance (including procurement):

Final Technical Reports of both the Rural Extension and Rural Credit consultants were finalised, bound and distributed to stakeholders.

Twenty demonstration plots were set up to demonstrate the advantages of improved agricultural practices.

The project is designed such that any success in the project area can be replicated in other parts of Angola and indeed other countries as well. To facilitate this, technicians from all stations of INCA in Angola congregated at Gabela to learn more about the activities the project was involved in in the Municipality of Amboim. This was with the view to encouraging the initiation of similar activities in areas outside the Municipality of Amboim (the project area).

In September INCA senior staff ran a one week ToT training course for 35 INCA coffee extensionists, with emphasis on extension/dissemination techniques. These extensionists will in turn train other exensionists.

Using the Loan component of the project funds, 4 Toyota single-cabin vehicles were procured and distributed to the project area (Gabela). From the Loan component, 3 tractors, trailers, harrows and ploughs and 10 motorbikes were procured. The Government of Angola provided three Toyota 4X4 Station Wagon and one Toyota double cabin vehicles for use by the project staff. This will significantly alleviate the transport problem experienced previously. Further office equipment and furniture were procured using funding from the Government.

With the first loan disbursement effected, negotiations with Banco de Poupanca e Crédito (BPC) on how to manage the fiduciary fund were finalised. An agreement for the management of the project loan was signed between INCA and BPC.

Both CLUSA and BPC assisted in the sensitising he farmers on the role of micro credit on the development of rural communities. The operation of the credit system was explained and channelling of funds to farmers and repayment to banks discussed. Following these, loans totalling about US$ 1,070,000 were given to 2,300 members of the formed farmer groups (loans of up to US$ 500).

V.1.5 COMPONENT V: Institutional Support

Activity 5.1 – Establish market information system:

After placing an international call in the internet, Mr. James Erejo Chiria emerged the successful Market Information System consultant to set up a system at INCA that avails appropriate coffee marketing information to stakeholders in Angola. The consultant assessed the current Market Information System capability and use in Angola, developed strategies for information sharing between the producers and buyers, set up a market information system at INCA and trained staff in Market Information to ensure that the system is used sustainably. A detailed final technical report was submitted to INCA.

14 CFC/ICO/15– Progress Report January-December 2007 Activity 5.2 – Establish and use management information system:

Together with information learned from the Market Information consultant, Mr Jose Mainga (INCA Agronomist) developed a template to be used in the management of information in the project.

Activity 5.3 – Train INCA staff:

Several INCA staff were trained by the Market Information Consultant in Luanda. Staff also broadened the developed system to see how to develop a database on other non- market related information. Further training by Quality Coffee expert was undertaken in July.

Several members of the Technical Brigade at Gabela also received training on-the-job.

Activity 5.4 – Undertake exchange visits to relevant international institution:

This activity will commence later, when counterpart funds are availed.

Activity 5.5 – Procure and distribute equipment and materials:

Most of the equipment (vehicles, computers, electrical stabilizers, etc) was procured and distributed.

V.1.6 COMPONENT VI: International Technical Assistance

Activity 6.1 – Identify and contract long term Chief Technical Advisor (CTA):

Based in Luanda, the CTA (Dr George Oduor) continued to coordinate and provide technical backstopping to INCA.

Activity 6.2 – Identify and select short term technical assistants:

Two Technical Assistants were engaged during the reporting period. The CTA developed the specific Terms of Reference of each Assistant, which formed part of the advertisements circulated internationally to acquire the most qualified consultants. The selected consultants were Mr James Erejo Chiria (Market Information System) and Mr Luswata Kanakulya Al-Raschid (Coffee Quality).

V.1.7 COMPONENT VII: Project Management

Activity 7.2 – Establish Project Management Unit to coordinate and organise project implementation:

Dr João Ferreira da Costa Neto was appointed the new DG of INCA (and Coordinator of this project) in August, and replaced the former coordinator Eng. Manuel Dias.

The Project Management Unit (PMU) should be constituted by the CTA, an accountant, a secretary, driver and a support staff. Identifying and contracting qualified staff in Angola is extremely difficult. An advertisement for the post of accountant was published in the local Journal de Angola daily newspaper but only a few candidates applied. These applicants were either not qualified or did not accept the terms (including relocating from Luanda). The CTA performed the duties of the accountant until 21st of May, when Mr Lukoki

Ndombaxi Felix was recruited. He was however replaced by Ms Catarina Saldanha in September.

The PMU relocated from Luanda to Gabela in November.

Activity 7.3 – Organise and supervise short term consultancies:

The CTA developed the Terms of Reference for the 2 consultancies. Recruitment and supervision of TAs were done from February. The CTA also thoroughly reviewed the reports by the Technical Assistants.

Activity 7.4 – Establish and implement administrative and accounting procedures and train in the same:

The CTA established an administrative and accounting procedure at INCA in line with the CFC Project Management Manual. The CTA also trained the new accountant on the CFC Financial and Administrative Procedures.

Activity 7.5 – Organise and coordinate staff training:

The only training done was that for the Technical Brigade (on-the-job) and INCA staff by the Market Information System as well as the Coffee Quality consultants. The consultants proved very successful/popular as the staff found the training very useful.

Activity 7.6 – Develop detailed workplans and budgets:

Detailed workplans and budgets for 2008 was developed for approval by the Project Steering Committee.

Activity 7.7 – Establish and implement effective monitoring and evaluation processes:

M&E processes, following the CFC Project Management Manual, have been initiated. It is planned that the internal M&E will be effected by various units including the Management Information System at INCA, PMU, the Project Steering Committee as well as field visits by Luanda-based INCA staff. External M&E will be done by ICO, CFC and independent consultants.

A supervisory visit was made between 29th May and 4th June by Mr Caleb Dengu (CFC), Dr. Denis Seudieu (ICO) and Madam Josefa Sacko (IACO). The visit included meeting the Minister of Agriculture and Rural Development, INCA staff in Luanda as well as INCA staff (scientists and technicians) and farmers based in Gabela. Specific recommendations made by the mission were as follows;

1. Counterpart funds from the Government should be availed immediately to enable timely implementation of the project. The project should follow-up on the Minister’s promise to the Team to pursue the issue with the Ministry of Finance. 2. The Project Steering Committee meeting should be convened as soon as possible. Constraints in the project should be discussed and relevant members charged with finding solutions. 3. Pending contracts with CLUSA and BPC should be finalised and signed so that farmers are organised into business groups (associations), trained and prepared to benefit from the micro-credit scheme.

4. INCA should read the reports from the consultants and provide written comments to CFC/ICO, within 2 weeks. The role of the consultants should be viewed in its correct context – help INCA to help farmers and other coffee stakeholders better. 5. INCA to develop week-long training courses for field extensionists (with complete training manual). This should aim at both informing extensionists as well as improving their ability to disseminate this knowledge to farmers. 6. Project Management to revisit the budget to incorporate (without additional costs) identified additional/modified activities including training of extensionists and motivation of field staff (a percentage of current salary and based on performance). Efforts should be made to increase the number of such extensionists, given the number of farmers that they have to reach.

The mid-term review of the project is scheduled for June 2008, when most of the project activities will have already commenced.

Activity 7.8 – Hold PSC meetings:

The scheduled PSC meeting was not held due to unavoidable circumstances.

Activity 7.9 – Host ICO annual supervision visits:

See Activity 7.7.

Activity 7.10 – Prepare regular reports:

The January-June progress and January-December reports (this one) were compiled.

V.2. Assessment of Resource Utilisation:

As indicated earlier, release of funds was delayed. The co-financing by the Government to cover activities of 2006 was not released and the loan component reached the project in June. Piecemeal release of funds affected the timely implementation of the project workplan. Delays due to lengthy government procurement procedures and the fact that most of the items have to be imported also led to delays in expenditure. Hopefully these problems will be overcome in the following reporting period, to avoid a massive under spend.

However, the release of funds spurred project activities.

As indicated elsewhere, the Supervision Mission in May/June recommended that the Project revisit the budget to see how to include certain activities requested for by the PEA.

Please also refer to Section IV above for additional information.

V.3. Assessment of Project Co-ordination and Management:

A lot was achieved in terms of setting up and beginning to use structures that will assist in the implementation of the project. As such several legal or administrative hurdles, like those that accompanied the first disbursement of the loan, were overcome. Complying with the government regulations with respect to receiving the loan from CFC, although drawn out, was a worthwhile success. Binding agreements with BPC and CLUSA should now pave the way for more effective operationalisation of the credit system, involving legally established entities (farmer associations).

However, the success was accompanied by several challenges, some of which the supervision mission was alerted on. The frequent unavailability or inability of PEA staff to undertake specific project activities made implementation, and therefore coordination, difficult. The PEA management’s inability to monitor staff to ensure that activities agreed upon are actually undertaken further complicated the coordination. The project has not yet been fully incorporated into the PEA’s realms.

Although the funds from the loan component reached the project in June 2007, those from the Government were received only in part (US$500K). This led to a delay in or inability to procure of equipment/materials making it impossible to undertake activities on time, leading to the loss of entire years, since certain activities like application of fertiliser and harvesting of coffee must be done only at specific times (seasons) of the year. Further, availing of materials and allowances to enable extension staff to undertake their duties were delayed leading to loss of motivation.

Finding a qualified accountant for the project is extremely difficult – the few available are already with employers offering better terms. The need for the project accountant to be based in Gabela, further discourages candidates as all want to work in Luanda. The CTA therefore had to undertake the duties of an accountant from November 2006 to May 2007. The performance of the new accountant is being closely observed.

The performance of CLUSA is encouraging, while that of BPC worrying.

Due to their past experience, the concept of credit and especially repayment of loans is still not fully appreciated by many farmers. They are used to gifts/grants or “assistance” and being expected to repay for what they receive is still foreign to them. Further training of the farmers should overcome this misconception.

V.4. Social and Environmental Effects of Project Implementation:

Increased returns from the sale of higher quality coffee are expected to improve the income of the coffee farmers. Resettling of previously dislocated persons should give them hope and make them more productive and socially more content. No adverse effects to the environment are envisaged, especially with the reluctance of the farmers to wet-process their coffee.

V.5. Forward Planning of Project Implementation:

The mid term evaluation of the project will be undertaken by CFC and ICO in April 2008.

With the delivery of more planting bags, more seedlings will be raised by the farmers. Transplanting of seedlings into the fields will be intensified. This will be for both farms to be rehabilitated as well as those to be renovated. These farms will also adopt improved coffee management techniques including appropriate pruning, weeding, pest control, harvesting and processing.

More efforts will be made to secure co financing from the Government.

The Market Information System at INCA will be improved and utilised. This together with the Management Information System will significantly facilitate the running of the project.

Farmers Associations will be formed and existing ones strengthened. This will be accompanied by training of members on how to manage associations as business entities.

Farmers will receive individual titles to their farms.

On-farm trials and demo plots will be monitored and reported on.

Equipment for the coffee processing plant and social buildings (schools, houses, health posts) will be procured, delivered and installed/used, as soon as funds are made available. This will be accompanied by training of farmers, extensionists and/or farm managers on how to operate and manage this coffee processing equipment.

INCA scientists and extensionists will be trained in modern coffee production, processing and marketing methods.

Overall coordination of the project will continue including, holding PSC meeting, and providing technical and administrative backstopping. Progress made in the project in 2008 as well as the workplans and budgets for a possible extension of the project beyond 2009 will be discussed and agreed upon.

Ex post project evaluation by CFC/ICO will be organised.

Annual & Final (up to March 2009) Audits of project accounts will be undertaken.

Regular and final reports will be prepared.

III. Conclusions and Recommendations:

The Supervision Mission was useful. More active participation by the PEA staff will improve their skills, make coordination easier and enhance the sustainability of current activities beyond the lifespan of the project. Although the project had a slow beginning, activities will be implemented faster with the acquisition of the project equipment/materials.