Document of The World Bank

FOR OFFICIAL USE ONLY

RqwetNo. 7752-MOR Public Disclosure Authorized

STAFF APPRAISALREPORT

KINGDO4OF MOROCCO

SECONDFORESTRY DEVELWPIEMT PROJECT Public Disclosure Authorized

November 28, 1989 Public Disclosure Authorized

Agriculture Operations Division Country Department II Europe, Middle East and North Africa Regional Office Public Disclosure Authorized

TKs dounet bo a rested JIstdbuton and may be used by recipients only In the performnce of dutls.klat onotets may not otherwise be discled wiout Word Bank autborlaion. CURRENCY EOUIVALENTS (February1289)

US$ 1.00 - Dirham (DH) 8.25

DH 1 - USS 0.121

WEIGHTSAND MEASURES

The metric system is used throughout this report

GLOSSARYOF ABBREVIATIONS

ASAL - AgriculturalSector Adjustment Loan B - Billion (thousandmillions) CHB - Compte Hors Budget (extra-budgetaryfund) CRABVF - Regional Center for Watershed and Forest Management Planning CRIA - Regional Center for Forest Inventoryand Management Planning DEFCS - Departmentof Forestry and Soil Conservation DPA - ProvincialDepartment of Agriculture FAO - Food and AgricultureOrganization of the United Nations FAO/CP - FAO/WorldBank CooperativeProgramme FNF - National Forestry Fund H - million MARA - Ministry of Agricultureand Agrarian Reform MOI - Ministry of the Interior UNDP - 7nited Nations DevelopmentProgram U.b. - Under bark, i.e. the volume wood excludingthe bark

GOVERNMENTOF MOROCCO

FISCAL YEAR

January 1 to December 31 FOR OFFICALULSE ONLY

STAFF APPRAISALREPORT

KINGDOMOF NOROCCO

SECONDFORESTRY DEVELOPMENT PROJECT

Loan and Proiect Summary

Amr-ower: Kingdom of Morocco

Amount: US$ 49 million equivalent

ITrms: Repaymentin 20 years, including5 years of grace, with interestat the Bank's standard variable rate.

ExecutingAfency: Departmentof Forestry and Soil Conservation (DEFCS)

ProiectDescription: The Project representspriority investmenLsfrom DEFCS's 5-year investmentbudget plus forestry investmentsfinanced by the communes and executedby DEFCS. The project would strengthen forestryplanning and policies and assist Morocco in maintainingand improving its forestrypotential and meet the country'swood needs and protect its watersheds in harmony with other demands on the areas such as domestic stock grazing. Main components are (a) forestry planning (includingnational forest inventory, forest demarcation,forest management planning and a national reforestationplan; (b) field operations,including those paid by the communes,consisting of regenerationof natural forest (36,000ha), plantationestablishment (32,000ha), watershed management (development of low cost techniqueson some 10,000 ha), forest range management (works 57,000 ha, plans 97,000 ha), pest management (25,000ha), stabilisationof dunes (370 ha), forest road construction(580 km) and rehabilitation(1,450 km); and (c) support activities,including nature conservation,forest research,staff housing rehabilitation,equipment purchases, trainingand technicalassistance.

This document has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bankauthorization. - (ii) -

Project Risks: The two major risksfacing the projectare a slowerthan projected growth rate for project plantationsand continuedgovernment failure to provideadequate and timelyfunding. The former risk is reducedby the introductionof vegetativelyreproduced (clonal) planting material,which has dramaticallyincreased yieldsin othercountries, and the fundingrisk is lessenedby the fact that projectinvestments are in the Government'score investmentprogram. The potentialrisk of failureof the forest populationsto participateand to complywith plansto organiselivestock grazing in project areas has been taken into account in the project designby choosingareas where the populations are :-avourableto projectoperations and by priornegotiated agreements. Estimated Project Costs S

Loual Eoxeign Total ------US$ million ------

A. Forestry Planning 4.5 3.1 7.6 B. Forest Operations Regeneration of Natural Forest 8.3 1.3 9.6 Plantation Establishment 13.8 7.5 21.3 Watershed Management 3.9 1.3 5.2 Forest Range Development 6.2 1.9 8.1 Forest Roads 3.2 2.3 5.5 Communal Component 10.8 4.6 15.4 C. Support Activities Nature Conservation 0.5 0.5 1.0 Forest Research 2.1 0.9 3.0 Institution Development 0.1 - 0.1 Housing & Equipment 2.6 1.7 4.3 Training Q.7 0A1 0.

Base Costs 56.7 25.2 81.9 Physical Contingencies 3.2 1.4 4.6 Price Contingencies 9.4 4.1 13.5

Total Project Costs 69.3 30.7 100.0

Financing Plan

Local oireifn Total - USA million --

Goverment 31.2 1.0 32.2 Rural Communes 18.8 - 18.8 Bank 12.3 29.7 49.0

Total ,69.3 30.7 100.0

Estimated Disbursements

FY90 PY91 FY92 F FY94 FY95 FY96

Annual 0.6 5.4 8.0 9.0 10.0 9.0 7.0 Cummulative 0.6 6.0 14.0 23.0 33.0 42.0 49.0

Rate of Return: 39%

Mag Number: IBRD 21506 a/ Includes US$19.9 million of taxes and duties. STAPP APPRAUSALREPORT

KIIoDOM OF MOROCCO

SECOND FORESTRY DEVZLOPMENTPROJECT

Table of Contents

Page no

I. INTRODUCTION ...... 1

II. FORESTRY IN MOROCCO ...... 1

A. Forest Resources ...... 1 B. Contributionto the Economy ...... 2 C. Forestry Institutions...... 3 General.. ... Forest Department (DEFCS) ...... 3 D. Forest Operations ...... 5 E. Marketingof Forest Products ...... 8 F. The Forest Industry ...... 9 G. Forestry Legislationand Policies ...... 11 Forestry Legislation ...... 11 Financingof Forest Operations ...... 13 GovernmentPlans and Policies ...... 14 H. Constraintsto Development ...... 15 I. Bank Involvementin Agriculturein Morocco ...... 15 J. Lessons Learned ...... 17

III. THE PROJECT AREA ...... 18

A. General ...... 18 B. Climate, Soils and SpeciesDistribution ...... 18 C. Populationand Infrastructure...... 19

This report is based on the findings of an appraisalmission which visited Morocco in January-February1989. Mission memberswere: Harald Stier (Task Manager), Colin Holloway (ForestrySpecialist) and Isabelle Schirmer (Economist)Bank, and Gilles Mille (ForestManagement Specialist),Consultant. The forest range managementand nature conservationcomponents were essentiallyappraised during an earliermission, in September-October1988 by Philippe Ardouin-Dumazet(Livestock Specialist) FAO/Bank CooperativeProgramme and Maryla Webb (NatureConservation Specialist) Consultant, respectively. i -

Table of Contents (continued) - E~~~~~~~~~~aLe_no

IV. THE PROJECT...... 20

A. Objectives,Rationale and Main Features.20 Objectives ...... 20 Rationale for Bank Involvement ...... 20 Main Components ...... 20 B. Detailed Description.21 Forestry Planning.21 ForestryOperations .22 Support Activities .26 C. ProjectCosts .30 D. Financing.32 E. Procurement.33 F. Disbursements.35 G. Accounts and Audit .36

V. ORGANIZATIONAND MANAGEMENT.37

A. Project Irplementationand Operation ...... 37 B. Participation of Local Populations and Social Issues . . . 38 C. Consultancy Services ...... 39 D. Monitoringand Evaluation .. 40 E. Status of Project Preparation...... 40

VI. PRODUCTIONMARKETS, PRICES AND FINANCIALRESULTS ...... 41

A. Yields and Management.41 PlantationEstablishment .41 Regeneration.41 Silvo-pastoralDevelopment ...... 42 B. Production .42 C. Markets.44 D. Prices ...... 44 E. Impact on GovernmentBudget and Cost Recovery ...... 45

VII. BENEFITS AND JUSTIFICATION.46

A. Benefits and Beneficiaries.46 Productionand Foreign Exchange Savings ...... 46 EmploymentCreation .46 Environmentaland Other Benefits ...... 47 B. Economic Analysis.48 C. SensitivityAnalysis .49 D. Project Risks .50

VIII. AGREEMENTSAND RECOMMENDATION...... 50 iii -

STAFFAPPRAISAL REPORT

KINGDOMOF MOROCCO

SECONDFORESTRY DEVELOPMENT PROJECT

LIST OF ANNEXES

ANNE 1 - BACKGROUNDDATA

Table 1: Action Taken on WJater Catchments

ANNEX 2 - COST ESTIMATES

Table 1: Project Cost Summary Table 2: Project Components by Year Table 3: Summary Accounts by 'Year Table 4: DisbursementSchedule

ANNEKX3 - PROJECT PROGgaMS

Table 1: Regeneration of Natural Forest Table 2: Annual Program of New Boundary Marking Table 3: Annual ReforestationProgram by Forest Serviee and Model Table 4: Annual WatershedManagement Program Table 5: Research Components:Annual PhysicalTargets and Unit Costs

ANNEX 4 F-FINANIAL ANTDECONOMIC RESULTS Table 1: Internal Rates of Return and Net Present Valu4 of Project Components Table 2: Cost Recovery for Regenerationand PlantationComponents Table 3: Cost Recovery for BouhasoussenForest SilvopastoralDevelopment Table 4: Distributionof the Pro*iction nerementalWood Productionfrom the Project Table 5: Selected Project Streams Table 6: Economic and FinancialPrices for Selected Outputs and Inputs

ANNEX 5 - LIST OF DOCUMENTSIN PROJECT FILE

CHART Organisation of Forest Services (WB 44431)

Project Sites-IBRD21506 SAP APPRAISALRO

KINGDOMOF MOROCCQ

SECONDFORESTRY DEVELOPMENT PROJECT

I. INTRODUCTION

1.01 With active Bank encouragement,Morocco has been giving increasing priority to natural resourcemanagement and forestryover the last decade or so. During this period, the Bank has supportedforestry through important (.omponentsin four rural developmentprojects (Fes-Karia-TissaFY 79, Loukkos rF 80, Middle Atlas FY 82 and Oulmes-RommaniFY 83). The experiencefrom the earlier of these project componentswas included in a first forestryproject (Gharb-Mamora,FY 82) for a loan of US$27.5 million which is expected to close on June 30, 1990. All of these projects includedexperimental or innovative improvedpractices for forestry plantations,exploitation, soil conservation, pest management,eX.c., and institutionbuilding. Technically,implementation of these forestry activitieswas successfuland, in the anticipationof their completion,a Bank mission visited Morocco in October 1985 to discuss further Bank assistanceto the forestry sector in the country. After having defined a forest developmentstrategy, the Governmentrequested the assistanceof FAO/CP, which fielded a mission in March-April,1988 to prepare the project. Appraisal of the project took place in February 1989.

II. FORQETRY IN MOROCCO

A. Forest Resources

2.01 Morocco's substantialforest and woodland occupy 5.8 M ha (8%) of the comntry'stotal land area of just over 71 M ha. These are mainly concentratedto the north-westernpart of the cnuntrywhere the climate is rooler and more humid and where the forest covers about 20-30X of the land area. Forest plantationsrepresent some 0.5 M ha of the above total. In addition there are about 3.2 M ha of esparto grass in the east and 0.5 M ha of mainly acacia based pre-Saharanshrubs in the south. Vir.ually all of the natural forest and esparto grass area is owned by the state although,based on tradition,local and nomed populationsusually exercise grazing rights and their domestic stock largelyprevents natural regenerationand contributesto the degenerationof the vegetativecover in Morocco. Of the plantationarea, about 77X belongs to the state, 16X to collectivesand 7X to private owners.

2 02 The availabilityof data on the forest resources in Morocco is incompleteand out of date, still being largely based on the work by P. Baudy in the 1940s which has been partiallyrevised and updated. Only 40X of the forest area has been inventoriedsince then (around1980) and the full effects ._fthe increasingpopulation and grazing pressureson the forests, about 20X of which are not even demarcated,has not been taken fully into account. Availableestimates suggest that about 45X of the natural forests and 402 of the esparto grass areas are suitable for commercialexploitation; most of the remainingarets having mainly a protective,soil conservationfunction. The main indigenousforest tree species are, holm oak (1.4 H ha), thuya (0.6 H ha), cork oak (0.3 M ha), cedar (0.1 M ha), pines (0.1 M ha), junipers (0.3 H ha) and, in the south, argan (0.8 M ha). the areas not necessarily reflectingthe economic importanceof the species. Somewhat more than half of the plantationspecies are eucalypt (0.2 M ha) and other hardwoods (0.2 M ha) and the remainderconiferous (0.1 M ha). mainly pines and some cypress.

A. Contributionto the economv.

2.03 While directly quantifiablebenefits are important,the forest's most importantcontribution to the economy is probably ecological:the protectionof watershedsand safeguardingof water supplies,agricultural production and wildlife and the arrestingof the erosion of Morocco's sensitivesoils. The share of value added by forestry i-.Morocco's gross domestic product is estimatedto be about 21, which is 12X of the agricultural value added and equivalentto about DH 2.7 B, if one includes its unrecorded contributionto the Kingdom'senergy and forage supply, which particularly benefits the poorer strata of the population. It has been estimated that 85Z of Morocco'sdomestic energy needs are met from firewood and agricultural wastes, equivalentto some 10 N m? of wood, worth DH 0.7 B (US$ 85 M), which clearly exceeds the national forest'ssustainable yield of some 3 M m3 of wood for all purposes and is the major contributingcause of the ongoing deforestation. Forest rangelandscontribute more than one-sixth (DH 1 B) of the national forage production. Forest operationsalso provide an estimated7 M man-days of work and income for the rural poor and the wood processing industriesrequire another 9 M man-days of work per year.

2.04 Morocco'swood productionmeets domestic needs of firewood,and for cork (4Z of world production)the country is an importantsupplier of the world markets, exportingDH 90 M (US$ 10 M) worth in 1987. Some DH 330 M (US$ 40 M) of pulp is also exported. Until recentlypulp procuctionwas wholly based on domesticwood but now some 602 of the raw material requirementsare imported. In fact, domestic forest productiononly meets one-thirdof demand for sawnwood,pulpwood and other wood products,with net imports amountingto DH 625 N (US$ 75 M) in 1987. Such imports represent72 of raw materials and semi-finishedgoods, or 2.52 total Moroccan imports. Table 2.1 below shows imports and exports of raw materialsand semi-finishedforestry products. - 3 -

Table 2-1: FOREST PRODUCTSTRADE (DH Million, current prices)

Exports 215 363 483 Imports 527 m Deficit (312) (532) (625)

C. Forestry Ilistitutions

General

2.05 The Hinistrv of Agricultureand Agrarian Reform (MARA)has the overall responsibilityfor the developmentof the forestry sector. Ihk Ministry of the Interior (MOI also plays an importantrole through its jurisdictionover the provincialadministration, the communes and the tribal collectives. Coordinationamong the ministriesin forestrymatters is provided by a National Forest Council (para 2.08). Morocco is administrativelydivided into more than 40 provincesheaded by a governor who reports to the MOI and who has the responsibilityfor the developmentof his province. The governor approves the decisionsof local authorities,including communalbudgets which also include forestry investments. MOI also has the trusteeshipof lands owned collectivelyby tribes and plays a key role in the implementationof any forest plantationand pasture developmentthereon. MARA operates in the provinces through its ProvincialDepartments of Agriculture (DPA), which are headed by a director and who, for the budget and for technicalpurposes, depend on MARA in the central administration.

Forest Degartment (DEFCS)

2.06 The Ministry of Agricultureexercisas its responsibilitiesin the forestry sector primarily through its Forest Department (DEFCS),which is headed by a Director and who reports to the Minister via the SecretaryGeneral (OrganizationalChart 1B 44431). The Forest Departmentat headquartersin Rabat, in addition to its administrativeservices, is divided into 5 technical divisionsresponsible for:

(a) forest management,exploitation and the marketing of wood products;

(b) inventory,management of forest infrastructure,legal and other questionsconcerning the forest estate;

(c) soil conservationand reforestation; (d) hunting, fishingand nature conservationand;

(e) research.

DEFCS is representedin the provincesthrough its forest service which is one of the divisions in the DPA. The provincial forest services are generally,at their headquarters,organised into 4 sectionswhich research apart, correspond to the DEFCS divisionsin Rabat. In the field, the 35 forest services in Morocco operate at three levels, the sub-division(65) headed by a forest engineer,the district (187) headed by a district forest officer "lid the beat (651) operated by a beat forest officer. The size of a beat may vary from 2,500 to 15,000 ha, dependingon the nature of the forest. Ta total, the Forest Departmentand the provincialforest serviceshave 4,360 permanent staff of which 315 are forestry graduates,1,220 are forestry techniciansand 735 are mounted guards1. The present staffing levels appear sufficient to carry out the program included in the 1988-92 IndicativeDevelopment Plan, the main constrainton Morocco's forestry operationsbeing the shortage of funds.

2.07 The Forest Department'smain responsibilitiesinclude the manage.dentand protectionof Morocco's forest estate, the protection of the country'swatersheds and the prevention of the gradual desertificationof its sensitive soils. To do this properly requires informationand data on existing resourcesand constraintsand plans for their development. The lack of forest inventoryand data has alreadybeen referred to (para 2.02). Only 10 of the forest area is coveredby managementplans, some of which already need revision. Watershed managementand silvo-pastoraldevelopment are also constrainedby the absence of plans. Forest planning and the developmentof necessarymarketing knowledge has been neglected in the past. The present forest management is aware of this and aims to correct the situationas part of the project. Already, the existing regional centers for Forest and Inventoryand ManagementPlanning (CRIA) at Meknes and T6touan are being complementedwith four additionalRegional Centers for Watershed and Forest Management Planning (CRABVF)which are being establishedwith UNDP/FAO assistance. DEFCS has also submitteda proposal for the restructuringof its organisationto meet the needs of the Department'sprogram. However, this proposal has never been approvedby the Governmentand is now out of date. This would be addressed in the project (para 4.22).

2.08 To coordinateand reinforcethe efforts by the Governmentand the local populationsto develop and conserve forest resources in Morocco, a National Forest Council and ProvincialForest Councils were created under a 1976 law (para 2.26). Concernedministries, government agencies and three representativeseach for the Governors,the ProvincialForest Councils and for the Communal ;ouncils,are members of the National Forest Council, which is chaired by the Minister of Agricultureand with the Director DEFCS being its Secretary. According to the law, it should meet at least once a year, and

Only 100 of whom have mounts at present. after a gap of a few years without sessions2,it has now met in 1988 and 1989. Each concernedprovince has its ProvincialForest Council which is chairedby the Governor and where the members are representativesfor concerned authoritiesat the provinciallevel and for the communal councils within its jurisdiction. The provincialcouncils meet at least twice a year as required by law. At the communal level, the law of 1976 prescribes the responsibility of the Communal Council in forestry matters.

2.09 Formal forest- training is carried out by the Royal Forestry School (ERF) for techniciansand by the National School of Forest Engineers (ENFI' for officers;both schoolsare at Sal6. ERF graduatesabout 20 each of junior and medium level tWchniciansannually, who have followed one- and two-year courses, respectively. After agronomicalstudies at the Hassan II NationalAgricultural and VeterinaryInstitute (INAV),ENFI provides three-yearcourses (other combinationsexist) and graduatesabout five engineersyearly. Senior forest officers undertakefurther degree courses at the Hassan II National Agriculturaland VeterinaryInstitute. The capacity for formal forestry training is suf'icientand the quality is good and does not constitute a constrainton the sector. However, refreshercourses for all levels of forestry staff are completelylacking and this void would be addressedby the project (para 4.27).

D. Forest Operations

2.10 Wood Extraction. In Morocco wood extraction is carried out by private loggers under DEFCS supervision(paras 2.19, 2.23). Holm oak stands and eucalypt plantationsare clear cut periodically,usually every 40-50 years and every ten years respectivelyand allowed to coppice, i.e. regenerate from the stump. In other, high forest,wood extractionis performed through two basic cuts. First through thinningsand cleaningswhich help produce a good qualityproduct at the final harvestingand secondlythrough regeneration fellingwhich includesboth harvestingof final product and regeneration operations.

2.11 PlantationProgram. Forest plantationestablishment started in Morocco in the early 1940's to providemining timber (pine) for the phosphate company and pulpwood (eucalypt)for the proposedpulpmill in the Gharb region. Annual programs rose from around 5,000 ha in the early 1950's to over 20,000 ha in the early 1970's. From 1960-70,pine plantations(notably Pinus pinaster,P. haleRansis and P. g#rsXXiasis) increasedand graduallyovertook eucalypts (Eucalyptuscamaldulensis and EucalX2tusgomphocephala), as the most widely planted species. Other broadleavedspecies comprise Acacia spp and poplars. By mid-1988, there were some 95 forest nurseries in Morocco with an annual capacity of around 100 million plants and a total planted area of 507,000ha, comprisingabout 212,000ha (421) of eucalypts, 56,000 ha (1lX) of other broadleavedspecies and 239,000ha (471) of pines.

2 Mainly because the position of Director DEFCS was vacant. - 6 -

2.12 PlantingTeniaues. Until 1982,all forestplantations in Morocco were establishedmanually. Land is prepared by cutting and, sometimes,stumping the indigenousvegetation. Holes (usually0.5 x 0.5 x 0.5 in in size) are dug at a densityof around1,000/ha into which tree seedlings (normallyfive to elevenmonths old) are plantedat the start of the rains. The treesare weededir. the firsttwo years and, if survivalis below 80X, failedtrees are replaced.Following a furtherthree to five yearsof guarding,primarily against stock grazing, the plantationis regardedas established.The need to increasewater retention,aid growthand reducethe soil erosionhezard, has encouragedthe preparationof primitiveterraces in associationwith plantingholes on steepslopes. Since1982, mechanizedland preparation(normally stumping old eucalyptplantations) prior to manualtree plantinghas been practisedin Gharb/Mamora.There are severalvariations but essentiallythree operations are involved:(a) root undercuttingby a stump ploughdragged by a 200-300hp trackedtractor; (b) stumpingand windrowingof stumpswith a front-endrake on a 170 hp trackedtractor; and (c) soil levellingwith a harrowdrawn by a four-wheeldrive or tracked110 hp tractor. 2.13 WatershbdManagement. Morocco suffers from serioussoil erosion, by wind in the arid areas in the southand by water in the water-catchmentsin the mountainsin the northwhere the majorityof dams are located. It is estimatedthat some 50 M m3 of soil is depositedin Moroccandam impoundments everyyear, which is equivalentto 0.51 of the country'stotal dam capacity and correspondsto an annualloss of 5,000ha of irrigationpotential and 10-15,000ha of cultivableland up-stream. At the same time the heavy erosion reducesthe groundwaterretention and threatensthe freshwater supplyto the populationand wild-lifein the area. With regardto the dams, threedams have alreadybeen raisedin heightto reestablishtheir capacities lost by sedimentation.Treatment of the catchmentsof the 34 existingdams to reduce capacitylosses, therefore, has high priority. In the same vein, the Governmenthas recentlydecided that financingfor all new dams --14 are programmedto be builtby the year 2000-- must includefunds for the managementof theirwater catchments.Availability of studiesand appropriate cheaptechniques combined with a lack of fundingare seriousconstraints to actualsoil conservationworks. To date,only four watershedshave been fully studiedand have a masterplan for theirdevelopment (for dams on the rivers of Loukkos,Mhadar, Nekkor and I1sa)and fivewatersheds have had summary studiesmade ( Lakhdar,N'fiss, L'Abid and Tassaout).For detailson the dams see Annex 1, Table 1. 2.14 A major effortto come to gripswith the erosionproblem in the Rif was made with the DERROproject launched in the early 1960'swith UNDP/FAO and bilateralassistance. The projectwas an integratedrural development projectwhich set out, over a 25-yearperiod to treatsome 2 M ha against erosionwhile providing populations with means to improvetheir standardof living. Althoughthe projecthad some successes,it fell short of reaching its targetsand in the early1970's, FAO and the bilateralassistance graduallycame to an end. Sincethen Governmentinterest in the projectseem to have lessenedand now only sporadicactivities continue under DERROunder the Ministryof the Interior. Soil conservation works by DEFCSon catchments - 7 - of dams date only from 1976 and have mainly concernedLoukkos (with a total catchmentarea of 1,800 kmn),Nekkor (780 kn') and Tetla (180 lmn), and to a degree also Issen (1,300 kmn) and N'Fiss (1,700 kmn). The type of soil conservationtreatments given and the approximateachievements are: pasture improvement(2,500 ha), forage plantation(5,700 ha), fruit tree plantations (15,400ha), reforestation(7,800 ha), silt traps- large (52,000in),- small (54,000units), primitive terraces (88,500m ) and dirt roads (280 km). Anti-erosiontreatments of water catchmentsnow run at an average of an annual level of some 10,000 ha and, in total, only some 320,000ha have been covered, which appears negligibleagainst the estimatedtotal watershed area of 20 M ha, of which the extent of the area needing treatmentis not known for lack of studiesbut the order of magnitudewould be at least 10-15 M ha. This aim will never be achievedwith Governmentfunds alone and it becomes essentLalto develop new, cheaper approachesenlisting the full participationof the interestedlocal populations. This need would be addressedunder the project (paras 4.12 and 4.19).

2.15 Forest Rane. Management. Morocco'sforest area represents40X of the livestockrange area in the countrywhich has about 0.7 H cattle and 3.5 M each of sheep and goats. Because of increasedpopulation pressure on agriculturalland, the period spent yearly by livestockin the forests has been steadily increasing. Increasedpopulation pressure has also contributed to a dilution of traditionalauthorities over collectiverangeland management and a gradual abandonmentof range rotation. All this has led to a decrease in the productivityof forest range lands, helped prevent natural regeneration of the forests and through browsing and lopping contributedto the destruction of trees. On the positive side, the continuouslivestock ranging in the undergrowthof the forests contributesconsiderably to limiting fires and Morocco loses only on average 2-3,000ha of forest per year to this hazard.

2.16 Only some 0.2 H ha of the 5 H ha forest range area has been subject to silvo-pastoralmanagement studies. Actual works on improving forest ranges are even more limited and results are mixed. For example, in the west Mamora area (30,000ha studied) some 1,100 ha have been given different treatments including the removal of non palatable brush, fertilisation, seeding of grasses, plantation of forage shrubs and the establishment of rotationaland deferred grazing. After four years of work, the program finally failed for social reasons, the populationsrefusing a reductionin the grazing intensity. Under the Middle Atlas project (loan 2082-MOR)in Bouhasoussen,14,000 ha of forest range were to be improved throughbetter management of forage resources (rotationaland deferred grazingand control of stocking rates), 2,000 ha through the planting of forage shrubs, 6,000 ha through fertilisationand 15,000 ha through the thinning of holm oak. Some other minor areas were also treated under the project. After a slow start due to the reticenceof the populationsthe program may now be considereda definitivesuccess in organisingthe herdsmen, both technicallyand socially. Forage productionhas increasedsignificantly, convincedand satisfiedherdsmen pay their user fees, which have been doubled, and maintain installedfences. They now want to extend this experienceto larger areas. At Sahel des Doukkala,under the government'ssoil conservation program, 18,000 ha of rangelandhave been treated through the planting of -8- forage shrubs, protectedby lines of wind breaks, and rotatiinalgrazing. The beneficiarieshave a contractualagreement with the governmentunder which it recoversthe investmentcosts without interest,through user fees and from the sale of wood. Also this experiencehas been successfuland to date, all costs incurredby DEFCS between 1965 and 1971 for this purpose have been recovered. The experien:egained has been used in the developmentof project actions (para 4.13).

2.17 Hunting. fishingand nature conservationfall within the jurisdictionof the DEFCS technicaldivision of this name. Hunting is by far the best staffed of the three subjects. The ProvincialForest Serviceshave some 50 game wardens, -ormally attached to sub-divisions. There are some 11.0 million ha of hunting reserve (136 permanentand 113 open to hunting every three years) and approximately500,000 ha of State land leased for hunting by private hunting societies. There are about 50,000 Moroccan and 1,000 visiting hunters each year. The division controlsboth sport and commercial fishing in Moroccan rivers and dam impoundmentsprimarily through the game wardens. Several thousand fishing licences are issued each year. There are 15 protectedareas (nationalparks or nature reserves)ranging in size from three to 220,000 ha. Negligiblenumbers of staff are specificallyassigned to them and to nature conservationin general. This would be addressedby the proposed project (para 4.18).

2.18 Forest Research The ForestryResearch Division of DEFCS (para 2.06) has a complex of offices and laboratorieson the outskirtsof Rabat, a wood technologycenter at M'Keinza-Rabat,poplar field stAtions at Kenitra and Beni Mellal and its first regional researchcenter at Marrakech. It has two services in the Division at Rabat (Silviculture& Soil Service and Genetics & Plant Improvement)and 11 specializedoffices on wood technology,wood chemistry,entomology, mycology, biometry, silviculture, soils, climatology, physiology,poplars and arboreta. Over 80X of its present work is on eucalypt and its managementbut in the past it has studieda variety of topics that include indigenous,productive forest (primarilycork oak and cedar), exotic plantationspecies (primarilyeucalypt and pines), ecology of sites (especiallyin Gharb/Mamora,the Rif and Middle Atlas) and the biology and control of various forest insect pests a-idpathogens. Results of these studieshave been published in the Division'sscientific journal Annales de la RechercheForestiere au Maroc. Over the past decade, the Research Division has suffered from an increasingnumber of organisationalproblems. This has been addressed through the recent appointmentof a new division chief.

E. MARKETINGOF FOREST PRODUCTS

2.19 Sale of wood products from state-managedforests is administered by the Forest Department(DEFCS) throughannual descending auctions. To the basic auctionprice are added (a) an ad valorem 1OX tax which is transferred to the National Forestry Fund (FNF) (para 2.28) and (b) various administrativefees and taxes amountingto around 5X of the basic sale price. Primary wood products are sold at stump while raw cork is sold stacked in -9

DEFCS warehouses. Auctions f.orprimary wood products are usually held at the provinciallevel where loggers purchase and later resell lumber to other operators for processing(sawing, slicing, and peeling) or wholesale marketing in the case of building poles. What remains is used for fuelwood,most of which is transformedto charcoal on-site and sold in the country'surban centers. However, less than 10 of the estimatedfuelwood consumptionis marketed this way, most fuelwoodbeing collecteddirectly by the rural populationsfor thei: own needs. The markets are free except for eucalypt (see para 2.20). Auctions for cork are held once a year at the national level. Cork harvest, which used to be performedunder force account, is now contractedout to private operatorswho are responsiblefor harvesting, transportationand stacking in the warehouses.

2.20 Pulpwood,is used by the single pulpmill in Morocco, la Cellulose du Maroc, which requires 350,000ml a year. The mill has a contract with the Ministry of Agricultureuntil September1993, whereby (a) the DEFCS is responsiblefor the supply of the required quantitiesof pulpwood and (b) the price of wood paid by the mill is fixed by a formula linking the local price to the internationalpulp price and adjusted on a yearly basis. In practice the DEFCS sells the eucalypt stand to loggerswho are required by contract to deliver 55X of the standingwood volume in debarked logs of specified dimensionsto the mill, at the fixed price, allowing for transportationcosts. This fixed stumpage price is about half the price commandedby the same eucalypt as utility wood or standingpoles on the free market.

2.21 Over the recent years, as the pulpmill expanded its capacity much faster than pulpwood productioncould increase,it proved impossibleto meet the mill demand with domestic productionand the mill now imports about 60% of its raw material. The supply contract induces substantialdistorsion in the domestic eucalypt market. The negative implicationsare two-fold (i) the use of substantialDEFCS financialand human resourcesfor the establishmentand managementof pulpwood plantationsto accommodatethe needs of a private pulpmill and (ii) the market distorsionwhich results in higher free market prices for other end-users. In consequence,this contract should not be renewed after it expires. Governmentand Cellulosedu Maroc are studying means (i) to enable la Cellulosedu Maroc in the long term to grow most of its own wood requirementsusing state land and (ii) in a transitionperiod to provide la Cellulosewith a guaranteeof a certain portion of its needs from the domestic market, at a price determinedby a study and taking into account prices paid by other local users of eucatyptwood and by foreign pulp industries(para. 4.11).

F. THE FOREST INDUSTRY

2.22 Morocco's forest products industriescan be divided into (a) mechanicalwood processingindustries, sawmilling and panel manufacturing, which provide semi-processedproducts for packaging,carpentry, furniture and construction,(b) wood pulp and paper making, and (c) cork processing industries. There is a sharp contrast between (i) industrieswhich import - 10 - most of their raw material or export most of their output (wood panels, pulp, and cork), which are medium-scalemodern and rather efficient industriesand (li) industriesprocessing domesticwood for the home market which are small-scaleand usually inefficientindustries.

2.23 The weakest segment of the forest products chain is the logging and sawm_llingof domestic-forest.Loggers run small operations,have usually neither technicalexpertise nor adequate equipmentand employ unqualified casual labor on a piece work basis, using only hand tools. Generally inefficientexploitation and loggingmethods have led to irregularmill supplies. In turn, sawmillsrelying on domestic supplies are old and inefficientand work only part of the year. To make better use of the locally produced logs it is essentialto improve the quality of domestic wood supply by better silviculturaltechniques and to reorganizeand modernize the logging and sawmillingindustry.

2.24 In Morocco the primary processing industriesfor forest products include about 30 sawmills,five wood-basedpanel products enterprises,one pulpmill,and eight cork p:ocessing industries. Except for the few sawmills convertingimported logs, the mills saw local cedar and pine with recovery rates as low as 40 to 50X whereas at least some 701 ought to be obtained with better organisation. They produce about 40,000 m3 of sawnwood per year. Average annual productionof veneers and plywood is about 50,000 mJ of which about 851 is used locally and the remaining15X is exported. Annual productionof particle board is about 25,000 m3 of which only 5 is exported. The pulpmill produces about 100,000 tons of bleached chemical hardwood pulp which at present commands high prices in world markets. Of the production, 801 is exported to European and Mediterraneancountries, and the remaining 20X is sold on the local market. Morocco importsmost of the pulp it consumes. Raw cork is processed in Morocco and exported as cork panels and cork. The main problems encounteredare (a) keen competitionfrom other producers, particularlyPortugal and Spain, and mostly (b) irregularityand variable quality of raw material supply. Table 2.2 below indicatesthe compositionof Moroccan trade in forest products in 1987. . 11 -

Table 2.2 TRADE IN FOREST PRODUCTS 1987

Value Share of Total (DH M) (X)

1. IMPORTS (CIF)

Roundwood 304 (27) Sawnwood 611 (55) Veneers & Plywood 44 (4) Others 45 (5) Subtotal 1004

Pulp 104 (9)

TOTAL Imports 1108 (100)

2. EXPORTS (FOB)

ProcessedWood Products 63 (13) Cork Products 87 (18) Pulp 333 (69)

TOTAL Exports 483 (100)

G. Forestry Letislationand Policies

ForestryLegislation

2.25 The basic law governingforests in Morocco is the Law (Dahir)of October 10, 1917, as amended, and related implementingdecrees and orders, on the conservationand use of forests. This law provides that all forests are in the public domain and vests MARA with the responsibilityfor their oversight. It codifies the traditionalusufruct of the forests, which includesgrazing and gatheringof forestryproducts for personal use within the limits of availableresources, as determinedby MARA. HARA is required to establish, in consultationwith the concernedcommunities, plans for each forest,outlining those areas in which grazing and gathering is permitted, the extent to which such activitiesin those areas are allowed, those areas to be closed off for regenerationactivities and measures to improve forest pastures. To lessen the impact of forest regenerationactivities on forest users, HARA customarilyensures that no more than 20X of the forest is closed at any given time to such users. The law also allows the governmentto restrict the clearing and logging of privately-or collectively-ownedwoods, as well as grazing in such woods, if necessaryfor soil conservation,erosion control or other environmentalprotection purposes, and to undertake - 12 -

reforestationactivities i:. tLese areas. The law provides penalties for the unauthorizeduse of the Forest and forest products and vests the responsibilityfor enfotcingthe law with MARA's forestry service. Finally, the law provides rules for the sale of forest products.

2.26 The basic law is supplementedby the Laws of March 4, 1925 and March 28, 1951 on the protectionand demarcationof the argan forests (which cover and protect the pre-Saharandunes in the south), the Laws of August 15, 1928 and June 20, 1930 on the conservationand use of esparto grass areas (in the east), the Law of September8, 1928 concerningthe protection and use of walnut trees, the Law of September1934 providingfor the creation of national parks, the Law of September12, 1949 establishinga National Forestry Fund (FNF) for reforestationactivities funded by taxes imposed on revenuesderived from investmentsin the forestrysector, Law No. 1-69-170 of July 15, 1969 on soil conservationand erosion control, and Law No. 1-76-350 of September 20, 1976 providingan organizationaland financialframework for the participation of local communitiesin the managementof forests. The Law of July 15, 1969 on soil conservationand erosion control authorizesthe government to designateas a protectedarea any area of land threatenedwith erosion and to I undertakeworks in this area to prevent erosion. It also authorizes the governmentto carry out conservationworks on non-governmentalland, at the expense of the requestingparty, pursuant to agreementsentered into with the land owners. Subsidiesmay be provided to such land owners. The Law of September20, 1976 on local participationin forestry managementprovides for the establishmentof ProvincialForest Councils,each comprisedof the governor of the concernedprovince and representativesof local legislative and administrativebodies, as well as of the central government,and of a National Forestry Council comprisedof the Ministers of Agriculture,Interior and Finance, and representativesof the provincialgovernors, the provincial forestrycouncils, and local governments(para 2.08). The national council proposes policies and measures for the developmentof forests and mediates conflictsbetween governmentand forest users. The law vests the local communal councils with responsibilityfor organizingthe use of the forests within the parametersestablished by ARA. The law finally provides that all revenues derived from a forest (eg., from the sale of wood products, etc.) are allocatedto the budget of the commune in the territorialjurisdiction of which the forest is located. The commune in turn is required to apply at least 20X of these revenues to investmentsin the forestry sector (para. 2.30). Although well intended,the law has rather reduced than increased public resourcesavailable for the managementof the country'sforest resources;whereas previouslythe treasury receivedall forest revenues,now they go to the communeswithout any deductionfor the cost of maintenanceand regenerationof forest resourceswhich still is paid from the government budget. More generally in forest legislation,the gap that has developed between the law and the actual practice is a source of potential contentions which contributeto preventingan effectivedevelopment of the country's forest resources. The National Forest Council, therefore,has recommended that forest legislationbe reviewed and brought in line with present needs (see also para. 2.32). Draft amendmentsto the forestry laws have been prepared in the DEFCS and are now being discussedin the Government. - 13 -

Financingof Forest Ogerations

2.27 Reforestationactivities are mainly financed from the government budget under various headings but other sources also exist. Of the presently reforestedarea of 0.5 M ha, about 60X has been financedover DEFCS's general budget for reforestation,about 20% from the National Forestry Fund (FNF), some 101 under soil conservationprograms and most of the remainderunder various projects or by the communes and only about 1 by private sources. A distributionof some 5 M seedlingsto private individualsby the DEFCS should be added to this number. The IndicativePlan 1988-92 provides about DH 240 K per year for the DEFCS investmentbudget, of which about DH 90 N for reforestation.

2.28 Several funds have been establishedto finance DEFCS's activities. The most importantof these is the National Forestry Fund (FNF) which is establishedin a special, extra budgetary,account (CHB no.35-16), which was created to promote reforestationon public, collectiveand private lands. The fund's resourcesare statutorilydivided into two sub-accounts such that 102 of the resources are for forest research (35-16/1)and 901 of the resourcesare for reforestation(35-16/2). The fund was originally financed througha 102 tax on the auction price of forest products (para 2.19 viz. wood, cork and esparto grass). More recently,a matching duty of 101 on wood importswas considered to boost the funds available for reforestation that fell far short of needs but so far only 6X has been levied as part of the measures taken under ASAL-I. The proceeds from the sales tax and import duty are presently of the order of DH 20 M and DH 40 M, respectively. The FNF may also be replenishedfrom the budget.

2.29 Since FNF advatnes funds for reforestationagainst projected revenues for the year, the annual allocationsmust receive prior approval by the Ministry of Finance. Approved funds are disbursedinto a special operationalaccount (CHB no. 36-00), from which they are spent. CHB 36-00 is also replenishedfrom reimbursementsfor DEFCS plantationson collectiveor private lands (para 2.16). There are a number of other CHB accounts of less importance. CHB 35-15, the forest road maintenancefund, has annual revenues (and expenditures)of about DR 1.5 K from a user fee paid by the loggers. For the purpose of this project this fee was recentlydoubled. CHB 35-50, the hunting fund. has annual revenuesof some DH 5 N from hunting taxes, licenses, leases, fees and fines. CHB 36-01, the soil conservationfund, is replenished throughbudgetary allocationsand reimbursementsfor works on collective and private lands. Annual expendituresare of the order of DH 8 M. The accounts with numbers startingwith 35- need annual budget approvalsby the Ministry of Financewhereas the 36- accounts may be used as long as there are funds. An advantagewith all these funds for DEFCS is that remainingfunds at the end of the year can be carried over into the followingyear.

2.30 Another source of funds are the communes,which receive all the revenues from sales of forestryproducts originatingfrom within their territoriallimits (para. 2.26). In return they should invest at least 201 of these proceeds into reforestation,forest rangeland improvement,forest infrastructuresgch as roads, shelters and water-holes,fruit tree plantation - 14 - and greenspaces, at the commune'sdiscretion. This formulahas resultedin a majordlversion of fundsfrom reforestationand in fact,between 1977 and 1984 it is estimatedthat only 2X (DH 10 M) of forestrevenues (DH 570 H) has been investedin reforestation.However the communes'attitude has changedand presentlyit is estimatedthat some lOX of revenues,which are now at the levelof aboutDH 130 N per year,are being investedin reforestation.

GovernmentPlans and Policies 2.31 Moroccois facedwith a rapiddeforestation, decreasing productivityof forestrangeland and growingerosion damage and in consequence,the governmenthas been givingincreasing priority to the forestrysector. This is reflectedin the risingshare of publicinvestments in agriculturebeing devotedto forestry,which has increasedfrom 7.3X to 8.5Z and 121 over the threepublic investment plan periodsof 1973-77,1981-85 and 1988-92,respectively. Accordingto Morocco'sindicative investment plan 1988-92,which allocates DH 1.3 B of publicfunds to forestry,the main long- termobjectives of the sectorinclude: (i) Protectionand conservationof naturalresources throughmeasures against deforestation, soil erosion and desertification; (ii) Ensuringthe maintenanceof forestcover by demarcationof the forestestate, by rationalisation of wood exploitationand forestrange management and by an increasein the regenerationof the natural forestand in plantationestablishment; and (iii) For this purpose,improving the forestinfrastructure and strengtheningforest management based on forest inventorystudies and the preparationof forest managementplans. 2.32 The Plan expressesthe need for an updatingand complementingof forestlegislation (see also para. 2.26)to address,in particular,the problemsof desertificationand of the developmentand financingof the sector. As one measureto protectthe forestfrom over-exploitation,the Plan considersthe buyingback from beneficiaries,the usufructof productive forestscovering more than one millionha. The registrationof the forest range users is also proposed. Other p.anned measures includeincreased participationof the ruralcommunes in the financingof fencingwhere needed to protectzhe forestand to rationaliseforest range management. Generally, the Plan expressesthe need for encouragingprivate initiatives to investin the forestrysector, notably in the areasof industrialreforestation and wood processing.To ensureimport needs of sawnwoodit expressesthe need to encouragedomestic wood indwxries to exploitconcessions which Morocco has obtainedin some Africancountries. Subsidies are also being consideredfor - 15 - industriesswitching -v non-wood energy sources. Many of these objectivesand measures lack concrete proposals for implementationand this is being addressedwith Bank support under ASAL II and in the proposed project.

H. Constraintsto Develoge nt

2.33 The main ;onstraintsto a forestrydevelopment program commonsuratewith Morocco's needs may be summarisedas follows:

(a) Increasinghuman and livestockpressure and non-participationof populations;

(b) lack of sector plans and lack of data for planning;

(c) inadequatefunding;

(d) obsolete and incompleteforest legislation;and

(e) difficultciimatic and ecologicalconditions restricting forest productivity.

2.34 The climatic and ecologicalconditions cannot be changed but more research is needed to develop suitable technologiesthat are more productiveand better adapted to this environment. The active participation of the local populationsis a sine gua n for a successfulforest development program. Not only are they a potential source of investmentfunds but also their sometimesoutright hostility to reforestationwhich involves the closing of forest rangeland for extended periods of time needs to be changed through infcrmationprograms. In some areas these attitudeshave already been successfullychanged (para. 2.16). The severe governmentbudget constraints make it necessary to seek other sources of finance, particularlythe involvementof the wood processing industryand other private initiatives(eg. social and farm forestry)need to be promoted. However, in order to arrest the rapid deforestationand soil erosion in Morocco and to maintain existing assets and establishnew forest resources in target-orientedprograms, a comprehensive planning frameworkis requiredwithin which such activities can take place. The necessary data for such a planning frameworkare lackingand need to be generated. Also, the existing legislativeframework is not always conduciveto an effectiveresource management or is not properly applied. The Government is already reviewing forest legislation(para. 2.26) and the project would address the other constraints.

I. Bank Involvementin Agriculturein Morocco

2.35 Bank Group lending to Morocco began in 1965. To date, 94 loans and creditshave been made, supportedby US$4.4 B Bank and IDA funds (US$45.2 H of IDA credits),net of cancellations. In agriculture,15 projects have . 16 - been completed,10 are being implemented,and one has just been signed, totallingUS$1.3 B of Bank Group lending. These include: eight irrigation grojects,Sidi Slimane (FY65),Sebou (FY70),Souss Groundwater(FY75), Doukkala I (FY76) and II (FY77),all completed,Two Small- and Medium-Scale Irrigation(FY83 and FY88) and a Large Scale IrrigationImprovement Project (FY86); seven agriculturalcredit projects (FY66, FY73, FY77, FY79, FY84, all completed,and FY86 and FY89), five rainfed aariculturaldeve1ooment projects in the Meknes (FY75),and Loukkos (FY80) completed,Fes-Karia-Tissa (FY79), Middle- Atlas (FY82) and Oulmes RouruAni(FY83) areas; an agro-industrialand flood control project, Sebou 1I (FYt..completed);a vejetable and marketing groiect (FY80 completed);a forestrygroiect (FY82); and two agricultural sector adjusta4ntloans (FY86 and FY88) one of which has been satisfactorily completed. An agriculturalresearch and extension2roiect was signed in September1989 but is not yet effective.

2.36 Performanceof Bank-financedprojects in agriculturehas generallybeen satisfactory. Performancein irrigationprojects has been good once initial problems of land distributionand organisationaldelays in constructionand in procurementof irrigationequipment were overcome. The Project PerformanceAudit Report (PPAR) for the Sebou I Project (Loan 643-MOR) stresses the project'ssuccess in institutionbuilding and in contributingto increasingcrop production.The PPAR of the Sebou II Project (Loan 1018-MOR) notes that the project was successfulin introducingcommercial sugarcane productionand processingbut stresses the vulnerabilityof investmentsin commoditieslike sugar which are subject to wide price fluctuations. An OED Impact EvaluationReport for Doukkala I and II projects (Loans 1201- and 1416- MOR) concluded that the projects complementedwell Government'sobjectives of investingin large-scaleirrigation to enhance domestic food self-sufficiency, boost export earnings and expand rural employmentopportunities. The PPAR of the Souss GroundwaterProject (Loan 1123-MOR)stresses the successfulprivate land consolidationand public land distributionand cooperativeestablishment but highlightsthe neglect of maintenancedue to inadequatefunding and staff. This problem was subsequentlyaddressed country-wide through the Large Scale IrrigationImprovement Project 'Loan 2656 MOR). Performanceof the five completed agxicultural gredit projects has been good and the PPARs stress the contributionmade to the country'sagricultural development by the successful expansion of credit to small farmers.

2.37 Rural DevelonmentProjects. In the rainfed sector,thefitst project (Meknes, Credit 555-MOR)experienced considerable delays due to land redistributionproblems, insuffic:.entproject preparation,optimistic implementationtargets and managermentinexperience in Morocco. The following four projects, Fes-Karia-Tissa,Loukkos, Middle Atlas and Oulmes Rommani (Loans 1602, 1848, 2082 and 2217-MOR),which all have importantforestry and soil conservationcomponents, were designed to minimise such organisational and managementproblems and are progressingsatisfactorily (Loukkos is completed) except that the completion dates have been considerably extended due to delays caused by the general financial crisis from which Morocco is now - 17 - emerging. In the Fes-Karia-Tissaproject, although the agricultural componentshave been successfullyexecuted, the project has suffered particuiardelays to permit the implementationof the component for water supply to difflcultaccess areas.

2.38 Fo£estry. The four rural developmentprojects referred to above, all includedexperimental or innovative,improved practices for forestryplantations, exploitation, soil conservation,range management,pest management,etc., and institution-building.Their implementation,although slowed down, has been technicallysuccessful. The experiencefrom the earlier of these project componentswas included in the Forestry I Proiect (Gharb-Mamora,FY82 Loan 2110-MOR for US$27.5 M, extended two years and closing June 30, 1990). The main objectivesof the Forestry I project were (a) to establishplantations to increase the productionof pulpwood for the local mill and of industrialtimber and fuelwood to meet domesticneeds and (b) to strengthenplanning and managementin the sector. The project componentsincluded the stumping and replantingof 20,000 ha of low-yielding eucalyptplantations, reforestation of 10,000 ha of degraded cork oak forest with eucalypt,acacia and pines, upgradingand constructionof 180 km of forest roads and maintenanceof 500 km, pasture improvementof 2,600 ha, research,training and studies (range management,training needs, forest inventory,rationalisation of forest management and financingof forestry operations).

2.39 Technically,the implementationof the Forestry I project has been successful,although it has suffereddelays which do not reflect poor performanceby the Forest Departmentbut are due to budgetaryshortfalls imposedby Morocco'sfinancial problems (para 2.37). About two-thirdsof the plantationand road constructionprogram had been achievedby the end of November 1988. The methods developedfor the stumpinghave proven to be very effectiveand thLecosts are effectivelycovered from the revenres obtained from the sale of the stumps for fuelwood.The recommendationsfrom the range managementstudy on cork oak grazing are being implementedand financed by the communes;so far more than 2,000 ha have been improved. The training objectivesand course materials,which came out of the training study will be implementedalthough the deliverywill be modified. Some progress is being made on the recommendationsfrom the studies on self-financingbut this objectivecan only be achieved over time, consideringall the vested interests involved. The forest inventoryhas been a victim of the budget constraints but a contract has now been signed and the activitywill be pursued and completed under the proposed Second Forestry Developmentproject.

J. LessonsLearned

2.40 The lessons learnedby the Bank in eleven years of experience with forestryprojects and componentsin Morocco have been taken into account in the design of the proposed project, including:

(a) Bank financing does not guarantee that sufficient funds will actually be available for the project since Bank funds . 18-

cover only part of the project costs and since anyway, to be authorised,all expendituresneed to appear in the Governmentbudget, exposing then to general budget cuts (para 7.09).

(b) Remedy to degradationof forests and deforestationcan be applied more readilyafter precise identificationof where it is happening (through inventory)and its causes (Paras 4.04; 4.06).

(c) Unless state f0orestsare clearly demarcated,encroachments are difficultto prevent (Para . 05).

(d) Technical success in treating relativelysmall water catchmentareas and forest ranges is not enough to guarantee its replicability and to ensure a real impact on the very large tracts requiringinterventions in Morocco. For this purpose the methods used need to be cheap, requiringa minimum of budget funds and relying to a maximum extent on self-financingand the participation of the local populations(paras 4.12 and 4.19).

(e) Managementof the forest resource requires an integrated approach, taking into account the various demands on it, e.g. domestic stock grazing (para 4.13).

III. THE PROJECTAREA

A. Genneral

3.01 The project area comprisesall of Morocco but, research apart, most project activities are taking place in the forest area in 21 out of Morocco's more than 40 provinces (Map IBk) no. 21506). Essentiallythe forests are linked to the relief. From souzh-westto north-eastthey occur in the High Atlas, the Anti Atlas, the Middle Atlas and the Debdou chain in the east. Forests also occur in the Rif mountains in the north and the central high plains. This accounts for 4.2 M ha of the forest area. The remaining some 1 M ha is divlded between one area around Larache and Souk-el-Arba in the north, another including Mamora and Ben Slimane, inland from Rabat, and yet another in the south in the regions of Essaouira,Agadir and Tiznit.

B. Climate. Soils and SgeciesDistributi -

3.02 The climate and soils are the main determinantsfor the distributionof tree speciesand their potentialproduction. One may distinguishthree groups of trees, those which grow in the relativelyhigh rainfall areas (500-1,800 mm per year), in semi arid areas (250-500mm) and in arid areas (100-250 m). The high rainfall areas with humid and sub-humid - 19 - climate are in the mountainswhere the principalspecies is holm oak which may grow from 1,000-2,000m altitude.with scatteredstands of zen oak and maritime maghreb pines. Cedar is the other importantmountain species from 1,400-2,200m, occuring mixed with holm oak at lower altitudesand pure higher up. Semi-aridareas form a belt around the slopes of the mountains and extend far into the Atlantic plains from Agadir to Fes as well as into the Medlterraneancoast from Tetouan to the Algerian border. Junipers and Aleppo pines grow where winters are relativelycooler, the latter requiringmore rainfall (400-600mm). Where winters are milder both are replaced by Thuya. Cork oak overlaps the subhumid (Rif, Larache)and semi-arid (Mamora,Ben Slimane)climates and requires acid and well drained soils. In the arit areas, argan is the main tree species in the south covering the regions of Essaouira,Agadir and Tiznit sand,in the north-east,esparto grass is the principalvegetation on the steppes.

C. Populationand Infrastructure

3.03 Morocco has a populationof 24 N growing at about 2.4X per annum. About half is rural concernedmainly with agricultureand livestock activities. The forestry law limits the usufruct of forest rangeland (para.2.25)to membexs of a tribe bordering the forest or those traditionally visiting the forest during seasonalmigrations. However, as explained in para 2.15, increasedpopulation pressure has led to increasinguse of the forest by these and other people and a consequentdecreasing productivity of forest range lands and has preventednatural regenerationof Morocco's indigenous forests.

3.04 Taking due account of market demand and social constraints,the selected sites for project plantationsare those with climatic and soil characteristicssuch as to give highest yields. The same factors, and the need to ensure the active participationof the local populations,have been taken into account in the selectionof forest regenerationand range management activities.

3.05 The forest road network,which is the responsabilityof the DEFCS, is of low density and is poorly maintainedbecause of lack of funds but the project would develop the forest infrastructurenecessary to support its activities. Outside the forest, Morocco has a good network of main and secondary roads which serve the whole country. - 20 -

IV. THE ECT

A. Obiectives.Rationale and MaLn Features

OblectivesL

4.01 The objectivesof the project are (a) to support environmentally sound managementand developmentof Morocco's forest resourcesand (b) to prepare and test components for a national watershed management program aimed at addressingsoil erosion in the country'swacer catchments. The project representspriority investmentsfrom DEFCS's 5-year investmentprogram. It would (a) strengthenferestry planning and policies, (b) assist Morocco in maintainingand improvingits forestrypotential to meet the country'swood and energy needs and protect its soils and watersheds in harmony with other demands on the resourcessuch as domestic stock grazing and (c) support an investmentprogram towards these goals.

Rationale for Bank Involvement

4.02 The project is includedamong the investmentpriorities under the Medium-TermAgricultural Sector AdjustmentProgram defined under the Bank's Second AgriculturalSector AdjustmentLoan and in the Government's target investmentprogram (PIC) identifiedunder the StructuralAdjustment Loan. It is an importantelement in the Governmentand Bank energy strategy and in Morocco's 5-year plan strategy for the conservationand more efficient utilisationof the country'snatural resources. Under the forestry components in earlier Bank projects and the Forestry I project 'paras. 2.37 and 2.38), the Bank has assisted in the introductionand pilot applicationof new techniquesand practiceswith the objectiveof a wider application,if successful. The proposed project is a logical sequence to generalise the improvementsmade and lessons drawn from earlierprojects on a country-wide basis. The planning and institutionbuilding process and the strengtheningof the Forest Department (DEFCS)is a relativelylong-term endeavour not yet completed. To this end, Morocco needs continuedsupport and the Bank would provide centinuity in this assistanceand is uniquely placed to inject experiencefrom neighbouringcountries and from elsewhere in the world into Morocco's forestry operations.

Main Components

4.03 To achieve the project'sobjectives, priority investmentshave been defined from the DEFCS 5-year investmentprogram for inclusionin the project. The project accounts for just over half (DH 672M) of DEFCS's capital budget for the period, and also includes investments(DH 155M) financedby the local communitiesand executed by DEFCS. It would include the followingmain components: - 21 -

(a) Forestrv Planning- (i) Forest Inventory; (ii) Forest Demarcation; (iii) Forest Management Planning; (iv) National Reforestation Plan;

(b) Forest Ooerations- (i) Regeneration of Natural Forests; (ii) Plantation Establishment; (iii) Watershed Managasment; (iv) Forest Range Development; (v) Forest Roads; (vi) Communal Component;

(c) Support Activities- (i) Nature Conservation; (ii) Forest Research and Fuelvood Study; (iii) Training; (iv) Institutional Development; (v) Housing and Equipment.

B. Detailed Descrintion

Forestry Planning

4.04 Forest Inventorv. Morocco has never had a national forest inventory (para 2.02). The proposed project would provide funds for the completion of the inventory to be started under the Forestry I project which would cover the entire national forest area with an intensity giving at least 85X precision. It would use aerial photographs, satellite imagery and ground surveys to prepare two sets of maps of 1:100,000 and 1:500,000 scales. Existing photos taken after 1980 would be used together with new aerial photography which would be taken on a 1:20,000 scale over about 1 M ha of the Rif, the region mostly subjected to illicit clearance in recent years. A team of three forestry graduates and five technicians from DEFCS would work full time with the consultants chosen to carry out the study after having been trained by them. An important training program to permit the effective use, maintenance and updating of the inventory would also be provided. The service order (ordre de service) for the inventory has been issued and DEFCS has already established an Inventory Monitoring and Management Unit. Assurance was obtaint,d at negotiations that this unit would at all times be maintained to maintair and update the inventory. The Inventory would be completed within four years. (For dotails, see Project File, Item 2, Annex 1 and Item 5.)

4.05 Demarcation of Forest Estate. The project would contribute towards the demarcation of the entire forest area by demarcating about half of the remaini,- undemarcated area or about 373,000 ha, and by consolidating the old boundaries of another 74,000 ha. Most of these demarcations would be in the Rif area in the north where illicit clearance has been most severe. The work would be carried out under force account and twenty new demarcation teams would be trained to augment DEFCS's existing 18 teams. The project would provide for the manufacture of the pilla's and for labour and transport for their placing. (For details, see Project File, Item 2, Annex 2.) - 22 -

4.06 legyaration of Forest Manageen=t Plan.. Working plans would be progressively prepared to permit the effective management and exploitation of the forests. The project would previde for the preparation of working plans for about 686,000 ha of priority forests and for the revision of plans for another 61,000 ha. Y-odern, operationally more suitable and less costly plans would be introduced to replace conventional very complex management plans from before the computer age. The new management plans would be of three basic categories. 'Simple plans," including all the data needed for modern forest management, would be prepared for indigenous forests of "noble species" (i.e. cedar, cork oak and pine) which have been demarcated (167,000 ha). Secondly, "basic"plans, including the mapping and division of the forest area into compartments for management purposes, would be prepared for other demarcated indigenous species (219,000 ha). Third, working plans would be prepared for those plantations (300,000 ha) which are not already covered. The CRABVF centres, including those that were recently established for this purpose with UNDP/FAOassistance (para. 2.07) would share the work, as required, with private consultants. Assurance was obtained from the Government at negotiations that modern management plans would be prepared with termsof reference acceptable to the Bank and that prescribed treatments would actually be carried out. (For details, see Project File Item 2, Annex 1.) 4.07 National Reforestation Plan. The last such plan was adopted in 1971. Drawing on the experience gained since then and making use of the inventories and studies carried out in connection with the project, a new updated version of the National Reforestation Plan whica takes account of present realities would be prepared under the project, by June 30, 1995. Assurance to this end was obtained at negotiations.

Forest ODerations 4.08 Regeneration of Natural Forest. Population and livestock pressure on Morocco's forests almost excludes the possibility of natural regeneration of much of the country's most valuable forest (para. 3.03). Recently progress has been made in regenerating some natural cedar and cork oak areas by involving the local populations and overcoming their hostility to DEFCS's efforts in this respect (paras 5.07 and 6.02). Regeneration can only be successful if the area is closed to livestock for an extended number of years to allow the undisturbed regrowth of the young plants. Continuing this approach, the project would contribute to rejuvenating and preserving Norocco's unique and most valuable forests and provide for the regeneration of about 13,400 ha of cedar and 5,000 ha of cork oak (Table 4.1). - 23 -

Table 4.1: REGENERATIONOF NATURALFOREST (hectares)

Soecies Yes 1 2 3 4n 5 l

Cedar 2560 2650 2650 2740 2770 13370

Cork Oak 750 .10A12 5000

3310 3500 3650 3890 4020 18370

4.09 The work consists of first fencingoff the area that is to be regenerated. For cedar, the natural regenerationthat is thus allowed to take place undisturbedis then either "complemented'by filling in the relatively few gaps (about 200 per ha) with seedlingsraised at DEFCS's nurseries, or "aided"where 700 to 1100 seedlingsare planted per ha. On broken ground,the holes are at the ends of hoed terraces,4 m long and 1 m wide, but mostly the holes can be dug directly. For cork oak, more thoroughland preparationis usually necessaryusing destumpingand mechanicalsoil preparationwith a ripper, after which the acorns are sown in pits. In some 250 ha, however, where density of old trees is less than 50 stems/ha,trees will be cut without stumping and comparisonswill be made of land preparationcosts and subsequent seedling growth by the Research Division. Weeding is required in the two springs followingthe planting:hoeing for cedar and harrowing for cork oak. (For details, see Project File, Item 2, Annex 3.)

4.10. PlantationEstablishment. Some 20,000 ha of fast-growing plantationsof eucalyptsare to be establishedunder the project, comprising 7,000 ha of clones of Eucalytus caaldulengis and of hybrids with E grandis and E globulus,and 13,000 seedlingsof L. camaldulensisand L 9=phoceghala (Table 4.2). The program will cover four provinces.

Table 4.2: ANNUAL REFORESTATIONPROGRAM OF EUCALYPT (hectares)

Year 1 2 3 4 5 Total SRecies E. clones 1,400 1,400 1,400 1,400 1,400 7,000 E. camaldulensis 2,200 2,200 2,200 2,200 2,200 11,000 E. gomphocephala 400 400 400 400 400 2L000 Total 4,000 4,000 4,000 4,000 4,000 20,000 - 24 -

4.11 The first three models of eucalypt plantationsare concerned primarilywith wood production in sub-humidand semi-arid zones of old plantationareas on governmentland. They will be establishedwith mechanised land preparation(stumping) and managed on three rotationsof ten years for productionof pulpwood,agricultural posts, poles and fuelwood. The fourth eucalyptmodel is designed to to be establishedon collectiveland and provide windbreak for forage shrubs and for land reclamationand requires mechanised ripping of the soil to break a superficialcalcareous crust. (For details, see ProjectFile, Item 2, Annex 4.). The project also includesa program of measures to promote reforestationby the private sector so as to increase funding availablefor reforestation,commensurate with Morocco's needs. It includesa study on prices to be charged by DEFCS for wood supplied to La Cellulose. Assurancewas obtained at negotiationsthat the governmentwould by December 31, 1992, implementmeasures satisfactoryto the Bank designed to promote the carrying out of reforestationactivities on state land by La Celluloseand other private sector enterprises(para 2.21). These measures includemaking land availableto such enterprisesfor plantationof trees needed in their operations. Also, assuance was obtained at negotiationsthat the Government shall (i) not later than December 31, 1992, complete the study on prices to be charged to La Cellulose;and, (ii) ensure that upon the expirationof the protocol for pulpwood supply in 1993, any transitional arrangementsto supply the companywith pulpwood be at prices based on the study and agreed upon between the Governmentand the Bar.n

4.12 WatershedManagement. To help develop approachesand low cost technologiessuitable for a future large-scalewatershed management effort which would ir-'olvethe populations,the projectwould include experimental and demonstrationfield works and a watershedmanagement study (para 4.19). The field works to be carried out in two typicalwatersheds, Loukkos and Lalk&dar(para 2.13), would provide a full scale testingground for differernt approachesand techniquesand close collaborationwould be maintainedwith the respectiveregional watershed management centers (CRABVFs)at Tetouan and Marrakech (para 2.07). The watershedmanagement operations would comprise: (a) reforestationof about 3,100 ha (primarilyAcacia cvanophvlla,Pinus hale2ensis and P. canariensis);(b) silvo-pastoraloperations up to a total of 1,200 ha of forage shrubs,permanent grasslandsand improvementof natural grasslandsby seeding, fertilisationand rotationalgrazing; (c) mechanical treatmentof ravines involvingthe establishmentof some 1,400 units of large and small silt traps, installationof discontinuousstone walls and small dams and the digging of small terraces to improve rainwaterinfiltration; (d) biological treatmentof ravines, essentiallyinvolving the planting of the flanks with &, cyanoRhyllaover 20,000 linear metres; and (e) about 5,000 ha fruit trees would be establishedin each of the two watersheds (see Table 4.3). (Detailsare given in Project File, Item 2, Annex 5.) * 25 -

Table 4.I: ANNUAL WATERSHED MANAGFJENTPROGRAM

1 2 3 4 5 Total

Reforestation(ha) 500 500 600 600 800 3,000 Mechanical Treatment (units) 200 300 300 300 300 1,400 Blological Treatment (units)1,500 2,500 4,000 5,500 6,500 20.000 Sllvo-pastoral Treatment (ha) 150 .50 250 250 400 1,200 Fruit Tree Plantation(ha) 1,500 1,800 2,000 2,200 2.500 10,000

4.13 EForst Range Management. The silvo-pastoralcomponent of the project would help develop intensifiedforest range uanagement to produce substitutefeed for domestic stock, compensatingfor the closing of forests for natural regenerationor reforestation. For this purpose the project would provide:

(a) silvo-pastoraldevelopment operations in the two areas where adequate studieo are available,namely about 17,000 ha in the forest of Bouhasoussenand 10,000 ha at Sahel des Doukkala;

(b) the strengtheningof the silvo-pastoralseed farm at M'Da; and

(c) seven silvo-pastoraldevelopment studies covering in total 97,000 ha and one pilot study of the argan forest area in a selected rural commune.

In the Bouhasoussenforest, the project works would include the fencing of 17,000 ha of which 2,000 ha would be fertilisedand 500 ha planted with forage shrubs. Project funds would also be provided for 78 km of forest roads, 12 water points, five simple sheds and, in order to strengthen the management unit, for 12 new staff, two four-wheel drive vehicles and some small equipment. At Salhel des Doukkala, operations would include the establishment of 2,000 ha of wind-break eucalypt plantation (para 4.10) and the planting of 6,400 ha of forage shrubs. Two fuur-wheeldrive vehicles and small equipment would also be provided. Training would be provided for staff at both locations. The project would provide equipment for the K'Da seed farm and rehabilitate its buildings, establish 50 ha of forage shrub 'orchards' and rejuvenateexisting annual (50 ha) and perennial (100 ha) seed production plantations. The seven silvo-pastoraldevelopment studies would help to remedy the present constrainton more extensiveforest range development, * 26 - which is the lack of plans. The argan forest fills an important role in the economyof southernMorocco, particularlyfor women and is presently the subjectof a Ba6k, Women in Development,sector study. (For details, see ProjectFile, Item 2, Annex 6:)

4.14 The argan tree is also importantas protection of the sand dunes against erosion. However, little is known on how to conserve and regenerate this forest as an integralpart of the local populations'agricultural and livestockactivities. The proposed socio-oconoic cum technicalintegrated argan forest study is coordinatedwith and would support the Women in Developmentsector work. It would be carried out in a selected commune in the Essaouiraprovince and would propose an agro-silvo-pastoralapproach within the context of the local economy. All the studieswould be carried out by outside consultants. To plan and coordinatethe work, the headquarters' forest range managementunit would be strengthenedby September 30, 1990 to includeone socio-economistand one livestockspecialist. Assurauce to thls end was obtained at negotiations.

4.15 Egrest.aBRoA. The density of forest roads in Morocco is very low and DEFCS, which is responsiblefor such roads, has a long term objective to double the existing network by the construction of 14,000 km of new roads. As a result of budgcearyconstraints, the existing forest road network is also in a bad state of repair. The project would provide funds for the construction of 250 km of new roads in the project areas according to standard DEFCS specificationsand for the rehabilLtationof 1,450 km of existing roads.

4.16 Communal Investments. In project preparation, efforts were made to find new investmentfunds for forestry,outside DEFCS's budget. In response to joint efforts by the ministriesof Agricultureand of the Interior and with the understandingof participationin a World Bank Project, the local populationswho derive part of their incomesfrom the forests (para 2.30), with DEFCS's help prepared a 5-year forestry investmentprogram which would be financed over their communalbudgets. Under this componentthe project would establish about 11,000 ha of plantations,regenerate some 14,000 ha of indigenouscedar and cork oa'kforests, develop about 500 ha of forest ranges, stabilise370 ha of dunes, rehabilitate100 km of forest roads. The location of the sites within the respectivecommunes have been defined and all operationswould be executedby the Forest Department. Most operationswould follow the sam,-models and be executed to the same standards as the correspondingcomponents financed over DEFCS'sbudget. Only dune fixation- aoes not have any such correspondingcomponent but would be carried out followingnormal DEFCS practices,which are satisfactoryto the Bank. The Ministry of the Interiorhas confirmedthat sufficientcommunal resources would be availablefor project investmentsunder this component.

SUPPORT ACTIVITIES

4.17 Nature Conservatign. Although the whole project would have beneficial environmentaleffects and help to conserve and develop Morocco's forest resourcesand natural environment,this componentwould specifically - 27 -

address environmentalissues and contributeto the preservationand enhancementof the Kingdom'snature with its unique and varied flora and fauna. Under the project simple managementplans would be prepared for protected areas and their equipmentneeds assessed. The project would provide equipmentand infrastructurefor the protectionand managementof two such areas (or more, dependingon the costs of their needs). As a first step for the managementof Morocco's fauna and flora, inventorieswould be carried out and priority actions would be determined. Forest management plans would be reviewed to ensure that due considerationis given to nature conservation and the preservationof endangeredspecies. The project would initiatean effort to inform and sensitisethe populationsand the bureaucraticapparatus (e.g. customs, postal services for exports of endangeredspecies etc.) on nature conservationissues.

4.18 To execute this program the projectwould strengthenthe existing organisationand would establisha new nature research and management unit of five professionals,which would be attached to the Forest Posearch Division (Chart WB44431). Assurancewas obtained at negotiationsthat the unit would be establishedby September30, 1990, with at least 5 professional staff. Terms of reference for the unit are in Project Files. The project would equip the unit with one four-wheeldrive vahicle, two light vehicles (of which one for a mobile extensioncentre), audio-visualaids, fiel4-, laboratory- and training equipment, a micro computer with basic software and a basic scientific reference library. The project would provide operating funds for the unit including vehicle operatingexpenses and staff travel allowances and displacementallowances for local consultants. Twenty-fourman months of short term training overseas and nine man-monthsof technicalassistance, would also be provided for the nature conservationprogram. A small task force would be set up to define measures to strengthen the management of the two protectedareas selected to be equipped. (For details, see Project File, Item 2, Annex 7.)

4.19 Forest Research. The projectwould support research in five main areas, namely: (a) genetic improvementof tree species, (b) production of fuelwood,(¢) silvo-pastoralmanagement, (d) watershedmanagement; and (e) silviculturaltreatment of young coniferplantations (for details on the researchprogram see Project File, Item 2, Annex 8). Under the first topic, the projectwould establishprovenance trials for eucalypt (300 ha) and pines (300 ha). The project would also provide one light- and three four-wheel drive vehicles,vehicle operatingcosts, and salaries,travel allowancesand training for three researchers at the Sidi Amira Tree MultiplicationCentre. Under (b) the project would provide labour, staff travel allowancesand vehicle operating costs for studies of the most effective silvicultural treatmentof certain indigenousspecies (holm oak, argan and thuya) for increasingfuelwood production. Under (c) the project would strengthenthe scientificexperimentation and monitoringof silvo-pastoralmanagement in order to improve and develop replicableforest range management techniques. For this purpose the project would provide two four-wheeldrive vehicles, a micro computer and small research equipment,labour and soil and other laboratoryequipment for field experiments,vehicle operating costs, staff travel allowances,short-term training and seminars overseas and 10 man- 28 - months of technicalassistance. The aim under (d) is to promote cheap, acceptablemeans of soil conservation(e.g. vetiver grass) or appropriateland use among the farming communitiesin Moroccan watersheds,primarily through synthesesof soil conservationtechniques and of organizational/management measures,for which the projectwould provide technicalassistance, equipment, vehicles and travel funds. Finally,under (e) the project would finance the study of cleaning,thinning, pruning and marking of final crop trees ln young conifer plantationsand would provide vehiclas, tools and casual labor to support DEFCS's initiativesto improve the productionof conifer plantations. For the purpose of the project, the Research Division would maintain at all times experts in forest range management,soil conservacion,biometry and one economistand a sociologist. Assuranceto this end was obtained at negotiations. The Ministry of Agricultureand DEFCS have reviewed the forest researchpriorities and prepared (a) a forest research program, (b) a detailed proposal for the watershedmanagement study and (c) a detailed proposal for a research program on silviculturaltreatment of young conifer plantations,all of which are satisfactory.

4.20 uselwoodStudy. Little informationip available on household usage of fuelwood although this is one of the major factors responsiblefor the deforestationand desertificatior.in Morocco (para 2.03). To permit the effectiveplanning of meeting the fuelwoodneeds of the populations,the project would provide consultanciesto carry out a detailed study which would complementa USAID/Bank/GOMjoint household energy study presently being undertaken. The study would be in two parts, the first part would collect and analyse data on the present situationwhich would then be used in the second part for defining an action program. Terms of reference for the study are available in Project Files.

4.21 InstitutionDevelopment. At present, the director of DEFCS has little assistancein the central coordinationof planning and the prioritising of investmentdemands. The project unit establishedunder Forestry I would thereforebe maincainedand strengthenedwith one economistand one officer in charge of extensionactivities to serve as Programmin&and MonitoringUnit (PMU). Initially the unit would plan, coordinateand monitor project activitiesbut as more experienceis gained it is expected that it would cover all DEFCS's activities. For its data collection,storage and processing needs, the PYU would be equippedwith one of the 25 IBM compatibleXT-type personal computerswith printers,software and ancillarymaterials provided under the project. The project would provide 3 man-monthsof local consultancyto the unit for cost accountancytraining and 10 man-monthsof consultancyto determinethe data storage and processingneeds of the DEFCS, draw up equipmentspecifications and provide training.

4.22 The reorganisationof governmentalservices in Morocco requires long and difficultadministrative procedures and therefore only minor ad hoc adjustmentshave been made in DEFCS'sao nisation (not requiring such procedures)to meet changing needs. In consequence,the present organisation does not permit DEFCS to discharge its now more diversifiedresponsibilities in the most effectivemanner. A study, with terms of reference satisfactory to the Bank would, therefore,be carried out on the organisationalstructure - 29 -

of the DEFCS. Organisatlonalproposals for the forest service, includingjob descriptionsfor key staff, would be made for discussionwith the Bank and the agreed recommendations would be implemented by the Government by June 30, 1992. An assuranceto this end was obtained at negotiations.

4.23 Because of the increasedpopulation pressure and the resulting over-exploitationof Morocco's forest and soll resources there is an added need for informingand sensitisingthe populationsabout the sustainable managementof the national forest wealth and for disseminatingadvice on the planting of trees at homesteadsor vlllagea for fuelwood and other needs, on the managementof forest ranges, on soil conservatlonmeasures etc. The projectwould initiate an extensionpro;rm. for DEFCS to utllise the existing agriculturalextension service (presentlybeing strengthenedunder the Bank's AgriculturalResearch and Extensionproject) in the inistry of Agriculture for the disseminationof such information. Use would be made of the extension agents' regular visits to the farmersunder the adapted T&V system where :here would be sufficient capacity to include forestry information among the messages transmitted to the farmers. Forest officers in the DPA's would serve as subject-matterspecialists and participatein the training of extension staff in forestrymatters. The project would provide one extension officer at DEFCS headquartersto manage the program (para 4.21) and messages would be prepared by the various divisions in the DEFCS, notably the research division and reviewed and approvedby the technicalconsultative research committee, modified as required, Information would also be disseminated via regional radio programs and 'spots' on the national TV. The costs of pamphlets, brochuresand other informationmaterials and advertisementswould not be very high and would be financed over DEFCS's regular budget. A program for forestry extensionhas been preparedby DEFCS and the AgriculturalExtension Service and is acceptableto the Bank.

4.24 The extensionprogram would also benefit women who would be subject to an expanded extensioneffort based on the results of a nationwide study commissionedby the Government and carried out with FAO support and which would be completedby the end of 1989. Each DPA now has a women's section. The role of women in forestryvaries from one region of Morocco to another. Women are particularlyactive in livestockmanagement in some regions and often are responsiblefor the collectionof minor forest products (honey,mushrooms, acorns etc.) and fuelwoodand would play a major role in homestead tree planting.

4.25 Staff Housing. To permit the protection and effective management of the forest, field staff are provided housing in the forest areas. Most forestryhouses in Morocco are old and have gradually fallen into disrepair,creating much dissatisfactionamong staff that has not been conduciveto loyalty and good work performance. To help remedy thls situation a start has be-n made to repair and to refurbishthe houses and the project would provide funds for the rehabllitationof 600 of the 1,325 forest houses that exist. - 30 -

4.26 Vehicles and Eguii Cent.Of the existing 243 four-wheeldrive and 92 light vehicles, 40X are more than 10 years old and ln poor working order. The project would orovide 88 four-wheeldrive and 10 light cars of which 12 and 8, respectively,are for special activitiesspecified undet other components in this chapter but most are for replacement. Eight four-wheel drive vehicles would be fitted for firefightingin the provinces. Ten man-months of consultancy has been included in the project to determine the data collection,storage and retrievalneeds of the DEFCS and the project would provide 25 IBU compatiblePC XT-type computers with printers, software and ancillarymaterial.

4.27 Staff Training. In addition to the training provided under the respectivecomponents, the project would provide, annually, two five-day in-servicetraining sesslons for forestry graduatesand one five-day lession for forestry tochnlcians. DEFCS has approximately 300 graduates and 1,100 technicians, which in a full year amounts to 8,500 man-days of training. (For details on Housing, Equipment,and Training, see Project File, Item 2, Annex 9.)

C. Projegt Costs

4.28 Total costs of the project, includingcontingencies, are estimatedat DH 827 M (US$100.0K equivalent),of which DH 253 M (US$30.7M) would be foreign exchange costs and DH 165 M (US$19.9M) duties and taxes. The cost estimatesare based on 1989 prices. Physical co tingencies (averaging61 of basb costs) have been applied to civil works (101) and other items (51) except for vehicles and training (01). Price contingenciesare based on expected domestic and forelgnprice increasesand are shown below:

Table 4.4: INFLATIONRATE (X)

FY89 FY90 FY91 FY92 FY93+ Local 4.5 5.0 5.0 5.0 5.0 International 5.3 5.3 4.1 4.1 4.1 - 31 -

Table 4.S: PROJECT COST SUIKRY

-0 Ni ion------u9 * iUlo--- Local Foreiqn lotal Leael Foreiqn otal z ore TXtotal

FoRESaY PLAMNV

1. tnventry & For"t Plan 2 12 14 0.3 1.4 1.7 3

Forest kar'eatimn 20 10 '0 2.3 1.3 3.6 35 4

3. Forest Mneagement Plans 10 3 19 1.9 0.4 2.3 1s 3

FOST OPEtaT oSS

L. RA. rattn of Naturel Foret 46 t0 70 8.3 1.3 9.6 13 i2

2. Plantation gBtablishtet 114 61 175 13.5 7.1 21.3 29 26

3. blaterShs l anaQet 32 11 43 3.9 1.3 1.2 25 6

4. Forw-t Rang. Os.lo_mnt 51 14 67 6.2 1.9 6.1 23 10

5. Forest Ro"s 2.6 19 45 3.2 2.3 5.5 43 7

&. Co.mnal Comowent 69 39 12 L0.0 4.4 15.4 :0 19 SUPPORT ACTIVtItES

1. Nature Con"rvatton 5 4 9 0.° 0.5 1 49 1

2. Research R Fuiwo-I Study 17 7 _4 2.1 0.9 3 *0 4

3. institution -v-eloem_t I - L 0.1 - 0.1 12 0

4. Housing & Equtment 22 14 34 2.6 1.7 4.3 29 s

S. Training 6 1 7 0.7 0.1 O.'si I DAIS agj 449 207 674 16.7 :5.2 91.9 S 1 100

Phsical Centsngencies 26 12 Z6 3.2 1.4 4.4 1 6

Price Cantigencies 7 34 t13 9.4 4.1 13.5 :0 l&

Total PISEG CSI 174 253 627 49.3 :0.7 1o1 21 122 - 32 -

D. Financing

60X of total 4.29 The proposed Bank loan of US$49 H would finance about exchange project costs excludingtaxes and duties. This includesforeign of local costs estimatedat DH 245 M (US$29.7M) and DH 160 M (US$19.3M) M because costs. The loan amount has been specificallyreduced by US$1.0 used by the procurementprocedures inconsistentwith Bank Guidelineswould be for vehicle procurement(para 4.33). Of the remainingDH 422 H Government M) would be (US$ 51 M) of costs (includingtaxes and duties) DH 267 M (US$32.2 in its annual financed throughbudget allocationsby the Governmentof Morocco communes investmentprogram and DH 155 M (US$18.8M) by the participating through their annual budgets.

Retroactivefinancing of up to US$0.5 H would be provided to allow 4.30 after early project start-up and would cover eligibleexpenditures incurred June 30, 1989. the Agreementwas reached at negotiationsthat in order to ensure 4.31 may timely availabilityof funds to meet project expenditures,the Borrower to the open a SpecialAccount in Dirhams on terms and conditionssatisfactory in Bank. The authorisedallocation to be d.epositedin the SpecialAccount would be the Dirhams, representingabout four months of project expenditures, equivalentof US$2.5 H (DH 21 M). - 33 -

E. Procurement

4.32 Procurementarrangements would be as shown in Table 4.6 and detailed below:

Table 4.6: PROCUREMENTTABLE (US$ M)

ProcurementMethod

Proiect element ICB LIB LCB Other 1/ N.A. Total Cost

Civil works (Roads, - 8.9 4.6 - 13.5 buildings and wells) (7.1) ( - ) (7.1) Field operations 42.1 6.7 - 48.8 (31.1) ( - ) (31.1) Vehicles - 1.9 - 1.9 ( -) (-) Equipment, tools, materials, farm inputs and books 0.2 1.8 0.9 - 2.9 (0.1) (1.1) (0.5) (1.7) TechnicalAssistance and Studies - 7.6 - 7.6 (7.6) (7.6) Training - 1.5 - 1.5 (1.5) (1.5) Incrementalstaff salariesand operating costs - - 5.0 5.0 (-) ( ) Communal component 18.8 18.8 (-) (-)

0.2 52.8 42.0 5.0 100.0 (0.1) (39.3) (9.6) (-) (49.0)

/ Force account for Civil Works and Field Activities,reserved procurement for vehicles and local shopping or direct purchase (US$0.2M)for Equipment, tools, etc.

Note: Figures in paranthesisare amounts &isbursedby the Bank and include a prorated share ef unallocatedfunds in Table 4.7. - 34 -

4.33 All procurementunder the projectwould be carried out by DEFCS except for the communal component (not disbursedagainst) which is the responsibilityof the respectivecommunes. Civil Works (US$13.5M)include rehabilitationwork on staff houses and the constructionand repair of simple forest toads and would be small, remote and dispersedboth geographicallyand over time and based on experiencefrom the Forestry I project is unlikely to be of interest to foreign bidders. Therefore,contracts not to exceed US$2M each, would be let after competitivebidding advertisedlocally according to Governmentprocedures but with certain modificationsto ensure that they are satisfactoryto the Bank. The local contractingindustry is well developed and adequate competitionshould be offered. However, for small items, not disbursedagainst under the loan, the work would be carried out using DEFCS' own staff and resources (US$4.6M). Forest operations (US$42.1M), including stumping,soil preparation,planting and plantatiunmaintenance, which are dispersedboth in time and geographicallyand which have attractedno foreign bidders in previous projects,would be carried out under contractsnot to exceed US$2M each let through competitivebidding advertised locally according to Governmentprocedures modified as stated above. The aggregateamount of all contracts let under LCB for civil works and forest operationswould not exceed US$51M equivalent. Research and nursery operations (US$6.7M) would be under DEFCS' own staff and resources. The Communal component (US$18.8M) consists essentiallyof field activitierwhich would be carried out by DEFCS in the same manner as such activitiesfinanced over its own budget. Vehicles (US$1.9M) would be procured throughprocedures inconsistentwith Bank Guidelinesmaking them ineligiblefor Bank financing,and Computers (US$0.2M), would be procured through limited internationalbidding, in accordancewith Bank guidelines. Other equipment.tools.materials, farm inputs and books (US$2.7M) , would be of assorted nature with individualcontracts not exceedingUS$100,000 and required at differenttimes in small lots throughout the project area and would be procured followingGovernment's local procurementprocedures, involving LCB of US$1.8 M. Local shopping would be permitted for contractsbelow US$5,000 for a total of US$0.9 M. In cases of proprietaryor highly specializeditems, such as seeds requiring special qualitiesand books, direct purchase would be used; the amount involved is estimatedat US$0.2M. Consultants(US$7.6 M) would be employed in accordance with Bank guidelines. TraininE (US$ 1.5M) and incrementalstaff salaries. oReratingand maintenancecosts (US$5.0M) would not involve procurementand would be handled followingnormal Governmentpractices. Assurancewas obtained at negotiationsthat procurementfor Bank financed items would be carried out under proceduresacceptable to the Bank.

4.34 Contract Review. About 200 contractsare expected for civil works and plantationactivities. Since they would all be procured according to standard proceduresby DEFCS with only slight modifications(para 4.33), and were already used in the Forestry I project,prior Bank review would only be required for the first contract for works, the first contract for goods let under LCB and any contract awardedunder ICB or exceedingthe value of US$0.5 M. The balance of contractswould be subject to random checking in the field in the course of Bank supervisionmissions. - 35 -

F. Disbursements

4.35 Disbursementsunuer the project would extend over six and a half years and be completedby June 30, 1996. This compares to the eight-year period required accordingto the EMENA profile for agriculturalprojects and is justifiedby the time-slicenature of the project which has only included priority investmentsfrom DEFCS's five-yearinvestment program.

Table 4.7: PROJECTDISBURSEMENTS

Loan Allocation 1 of Expenditures (USS 000) to be financed

1. Civil Works (Roads and Buildings) under contract 6,000 80X

2. Forest Operations under contract 30,000 80X

3. Equipment,Tools, Materials, Farm Inputs & Books 1,800

a) Directly Imported 1001 of foreign b) Locally Manufactured 1001 of ex-factory c) Locally Procured 80% of local

4. ConsultancyServices, Studies & Training 8,700 1001

5. Unallocated 2.500

49,000

4.36 Disbursementsagainst expendituresfor the following items would be against certifiedstatements of expenditure:

(a) payments under contractsfor civil works and plantationactivities not exceedingUS$500,000 equivalent; - 36 -

(b) locallyprocured equipment, tools, materials, farm inputs and books under contractscosting US$50,000 or less; and

(c) local and overseas trainingcosts.

Supportingdocuments for these items would be retained by the implementing agencies and made available to Bank missions for their inspection. Withdrawal applicationsfor other items would be fully documented. If a SpecialAccount is established(par&. 4.31), all loan disbursementsshould be channelled throughthe SpecialAccount except that large expenditureswhich would cause it to be significantlydepleted may be submittedfor payment directlyby the link. Applicationsfor replenishmentof the Special Account would be submittedwhen the amounts withdrawnexceed about one-thirdof the authorised allocation (initialdeposit) or every three months, whichever comes first. Disbursementapplications for expendituresfinanced through the Special Account should be accompanied by: (a) a statement of transactions on the Special Account since the previous application, with the balance certified by the Treasury.

(b) a reconciliation showing that the balance represents thc amount deposited in the account at the beginning of the project (or subsequentyears) less payment awaiting Bank reimbursement.

G. Accounts and Audits

4.37 DEFCS, which would have overallcoordinating responsibilities for project implementation,would set up a project informationsystem to maintain all project related accounts,in accordancewith sound accountingprinciples, from the start of project implementation.The project would finance the cost of establishingthe system and of training accountants(para 4.21). Project accountswould be audited annuallyby independentauditors acceptableto the Bank along with the SpecialAccount, and the statementsof expendituressent to the Bank for disbursementsunder the Bank loan. Audited financial statementswould be submittedto the Bank, with the audit report, within six months after the end of each fiscal year. Assurance to this effect was obtained at negotiations. - 37 -

V. ORGANISATIONAND MAVAG|N

A. Pro1ect Implementatlonand Operation

5.01 The Ministry of Agriculture,through its Forest Department(DEFCS) would have the primary responsibilityfor the overall execution of the project, including the communal component,and the Director, DEFCS, would be the Project Director. Institutionbuilding being one project objective ° and since the project essentiallyrepresents DEFCS's priority investmentprogram - the existing organisationwould to the extent possible be used for project implementation. Because of the many other responsibilitiesof the Director of DEFCS, the head of the ProgrammingaLld Monitoring Unit (PHU) (para 4.21) would be a senior officer and functionas his deputy and project manager, assisting him and being responsiblefor priject planning, coordination,day to day implementation,and monitoring. Under the Director, the head of PMU would also be responsiblefor the relationswith the Bank, includingprocurement, disbursements, periodic progress reportingand to ensure compliancewith Loan Agreement conditions. The deputy director,head of PMU and project marager, has already been nominated. Assurancewas obtained at negotiationsthat the PNU would be staffed at all times with the deputy director, an extension specialist,and not later than September30, 1990, an economist.

5.02 The implementationof the various project componentswould generally,and to the extent possible,follow proceduresnormally used in DEFCS for such activities. DEFCS would also receive the budget for the project except for the communal componentwhich would be budgeted directly by the communes. The presidentsof the respectivecommunal councils have approved the budgets for the communal investmentcomponent which must still receive formal approval of the communal councils. The planning studieswould be carried out by consultingcompanies or, in the case of forest and watershed management, the UNDP/FAD supportedregional centres (CRABVF,para 2.07) would progressively,in step with their imrrovingability, prepare such plans. Project field works, includingthe communal component,would be programmedby DEFCS' division chiefs and executedby the provincialforest services (para 2.06). DEFCS would also prepare procurementdocuments for works and goods under the communal component but tenders would be issued by the Presidentof the Communal Council and the contractors would be paid directly by the communes. The iMinistryof the Interior,as tutor of collectivelands and the rural communes would play a key role in helping to organise the participation of the local populations. (Coordination with the Ministry of the Interior is assured through working level contacts at headquarters between DEPCS and concerned Departments in the Ministry of the Interior (Local Collectivesand Rural Communes). The National and Provincial Forestry Councils (para 2.08) and the CommunalCouncils would continue to play important roles in coordinating the various concerned ministries, agencies and other bodies and populationsat the respectiveadministrative levels at which they are operating. - 38 -

5.03 Forest range improvement would also be the responsibility of DEFCS and the provincial forest services. However, the active participation of, and coordination with, the Livestock Department would required. At the center, coordination between the Livestock and Forest Departments would be assured by a small task force (cellule de coordination) of members which has already been nominated from each department through Ministerial decision. Assurance was obtalned that this task force would be maintained. Coordination within the Provincial Department of Agriculture in the project areas at Bouhasoussen and Sahel des Doukkala, would siLmilarly be maintained through the nomination of small Project Units to which two technicians each would be attached specifically for the affected populations already mobilised and organised into grazing associations on tribal basis. At Bouhasoussen where forest range management activities are on government lend, the forest range area has been divided into compartments based on recognised usufruct enjoyed by tribal groups. The users and tteir livestock have been registered and each association has an elected board to llaise wlth the authorlties. At Sahel des Doukkala, project activities are on land owned collectively by tribal units and managed by tribal councils. A contracc for project works would be negotiated by DEFCSwith the trlbal collectives and signed by the dinlstry of the Interior on their behalf. AsuancAe&was obtained at negotiations that for project actlvities on non-government land suitable arrangements would be made with the owners to ensure proper implementation of such activities. 5.04 The forest research program would be planned jointly between the concerned operational divislon in DEFCSand the Research Division and executed by the latter with the assistance of the provincial forestry services, as required. For silvo-pastoral improvement, the Research Division would coordinate all research activities which would also involve the National Agriculture and Veterinary Institute (INAVHassan II) and the school for forest engineers (ENFI). A proposal by the bureau for forest range management in DEFCSfor the division of research responsibilities between the three bodies is also being considered. The Nature Research and Management unit set up under the project would work closely with the Division for Hunting, Fishing and Nature ConservatLon in the establishment and executlon of lts program. B. Participationof Local Populations and Soclal Issues 5.05 The social acceptabillty of project forest operations to the affected populations is of key importance. To the extent that the closing of forest land deprives the local populations of thelr llvellhood they will be hostile to such interventions. To ensure herdsmen a minimm of forage during forest closures for large-scale regeneration or other operations in state forests, no more than 20X of the forest used by any usufruct beneficiaries are at any time to be closed (para. 2.25). In practice this limit is not achieved and forest closures due to works under the project wouLd be well below this number, thus they are not expected to cause any majorhardship to the users. Moreover, once the area to be closed is identified, but before any works in the area are undertaken, the DEFCS(a) informs the concerned communal councils of the selected area so that they may establish suitable grazing arrangements for users in the remaining 80X of the forest, and (b) meets with the concerned - 39 -

communalcouncils and users to obtaintheir support for and participationin the regenerationactivities to be carriedout. Assurancewas obtainedat negotiationsthat the Governmentshall make arrangementssatisfactory to the Bank with the individualswho use forestsin whlch regenerationunder the projectis to takeplace for grazingpurposes, to ensurethat the grazing activitiesin the forestsare carriedout in a mannerconsistent with the forestregneration activities. 5.06 The silvo-pastoralschemes included in the projectwere chosen preciselybecruse the socialenvironment was favourable,in fact the local populationsasKed for them and projectworks are extensionsof earlier successfuloperations. In the somewhatlonger term, such schemeswould of courseproduce forage which shouldmore than compensatefor any forest closuresin the area for regenerationor otherpurposes. As for ref2restation,a survey has been carriedout of the land availablefor reforestationin the 13 ecologicallymost favourableprovinces and classified accordingto whetherthere were any constraints(mainly social) or not. Of the 0.8 M ha suitablefor reforestation,somewhat more thanhalf did not have any such limitationsand projectplantations have been selectedto take place in th4seareas without social constraints. 5.07 For both cedarend cork regeneration,the traditionalopposition of localpopulations has changedover recentyears due to the Forest Department'sefforts to establishcloser cooperation with the users. The resulthas been the introductionof fencing,often paid for by the communes. The fact that the communesare preparedto fullyfinance 18,000 ha of regeneration(para 4.16), in additionto the 18,370financed under the Forest Departmentbudget (para4.08) is a good indicationof the interestthat the localpopulation have in this activity.The watershedmanaghment and soil conservationoperations are the major areaswhere the localpopulation's supportcannot yet be fullyrelied upon, hence theirexperimental nature and the strongresearch support (paras 4.12 and 4.19). The plantingof fruit treeshas becomepopular among the farmersbut more work is requiredto find other sociallyacceptable soil conservationtechniques. This would be done as part of the projectand the socio-economistand the sociologist(para 4.19) would addressthe socialand economicissues for watershedmanagement as well as for the other operations. C. ConsultancyServices 5.08 The projectwould include41 man-monthsof internationally recruited consultancy services to be appointed by the Forest Department. The services would cover the following specialities:

NW2-Months GeneticResearch 12 Silvo-Pastoral Research 10 NatureConservation 9 Data Management 12 41 - 40 -

Terms of referencefor the above are given in the Project Flle and cost details appear under the respectivecomponents.

D. Monitoringand Evaluation

5.09 The Programmingand MonitoringUnit (paras 4.21 and 5.01) in the Forest Department(DEFCS) would be responsiblefor the monitoringof overall project progress, includingthe communal components,based on information obtained from th& various responsibleDEFCS divisions. Monitoring would be carried out accordingto a format acceptableto the Bank and would focus on progresswith project works, procurementof equipmentand materials, recruitment and impleamentation of consultancyservices, comparing actual implementation dates and costs with the original appraisal estimates and where applicable, with revised estimates. DEFCSwould collect data on plantation and range management activities, including areas fenced, stumped and prepared, fertilised, sown or planted, weeded and managed, compared to project targets; survival rates, nursery production, unit and total cost of these activities compared to appraisal estimates. Financial monitoringwould include budgetary allocations and releases, payment delays for Government funds and Special Account operations. Project progress would be reported in semi-annualreports in an accaptable format which would be submitted to the Bank. Progress on the communal component would be reported separately.

E. Status of Prolect PreparatLon

5.10 The project consists essentiallyof priority investmentsfrom DEFCS' regular five-yearinvestment program and little special project preparationis thereforeneeded. Also, the project is a second, albeit enlarged,phase of the Forestry I project and would build on its administrativestructure. Most staff and the infrastructure for project implementationis in place. Land for plantation and range management activities has been selected and is under Government control. Grazing associations have been or are being establishedin range management project areas. For natural forest regenerationareas, the local populationsstill need to be mobilised.DEFCS would initiateaction on this with the help of the Ministry of the Interior (para 5.05). Procurementof goods and services are of a routine nature, requiringlittle time for preparation.The consultant contract for the forest inventoryhas been signed and terms of reference for other consultanciesand studies have been prepared. - 41 -

VI. PRODUCTION.MAIRETS. PRICES AND FINANCIALRESULTS

A. YIELDS AND MANAGEYME PlantationEstablishment

6.01 There is ample experience in Morocco with eucalypt plantations. The proposed management techniques and anticipated yields are based on historical experience and new research results. Eucalypt plantations would be managed on three rotations of ten years and produce pulpwood, sawnwood, constructionpoles, stakes and fuelwood.The mean annualincrements are estimatedat 11 m?/hafor plantsraised from seed and 15 and 20 nP/hafor clones. Also, stumpingof aged eucalyptplantations would yield about 50 t/ha of fuelwood.

Reggnratin

6.02 Past attempts to regenerate cedar have had aixed results, but recent experiments with complementary or aided regeneration have been successful and the techniqueis now replicable.As for cork oak, several hundredsof hectareswere fencedand sucessfullyartificially regenerated in the late 50's and early 60's and a techniquehas been availableall this time. However,the regenerationprogram was not implementedfor fear of opposition from the publicwho are dependentupon this forestfor many of their activitiesthroughout the year. Now improvedrelationships between the Forest Service,the communes,and the beneficiariesmake it possibleto fenceand regeneratecork oak forests. 6.03 Cork Oak Regeneratio: First,the finalharvesting of the "reproduction"cork and the clearfellingand stumpingof the existingcork oak standwould yield about 50 t of fuelwood,5 t of "male"cork, 3 and 20 t of stumpsper ha. Secondly,after a firstthinning at 24 years,the new cork standwould be harvestedfrom year 32 until year 72 and "reproduction"cork yieldswould increasefrom 0.5 to 2.3 t/ha over this period. 6.04 CedarRegeneration: Felling of the existingstand for regenerationwould be carriedout in three successivesteps, in years 1, 9 and 16. In the case of complementaryregeneration (para. 4.09), total felling output would include 220 u3 of cedar and 30 t of holm oak fuelwood, in the case of aided regeneration where the existing stand is poorer, the total outputwould consistof 100 m3 of cedar and 30 t of oak fuelwood.

3 The *male nork is obtainedfrom the firstand "reproduction"cork from the follnaingstrippings of the corkoak. 'Male"cork is used in making corkpanels for insulation,"reproduction" cork uses includecorks and decorativepanels. 42

Ilvog-pastoralDevelonMent

6.05 The silvo-pastoraldevelopment techniques proposed have been sucessfullyused in on-going developmentschemes in both the Sahel des Doukkala and the Bouhasoussenforest (para 2.16) and would be further developedunder the Project. In the Sahel des Doukkala range productivity would improve from about 180 forage units (FU) at present to about 700 FU per ha at full developmentin the areas treated,which would increase the total suprly of forage units in the overall area by about 30X. The eucalypt wir.dbreakswould provide shelter for forage shrubs and for reclamationof land, they would also provide wood in three fifteenyear rotationswith a 6 m 3/ha mean annual increment. In the Bouhasousdenforest, average range productivity would increase from 330 UF/ha to about 430 UF/ha at full project 6;vbiopment. Additional benefits would arise from the thinning of oak, which would yield about 20 t/ha comprising half timber and half fuelwood.

B. PEQDUCTIO

6.06 Productionunder the project would consist of eucalypt and cedar wood, stumps, fuelwood,raw cork, acorns and forage units. Eucalypt and cedar wood would yield in turn pulpwood,sawlogs, constructionpoles, stakes and fuelwood. Stumps would be used as fuelwood.Wood productionoccurs in a discrete fashion at time of thinningsor clear felling. Cedar production would occur in the early years (1-25),while eucalyptproduction would mostly occur during the first half of the project life (years 10 through 35). New cork stands start producingmale cork after year 25 and reproductioncork after year 40, the fellingof existing cork stands yield both reproductionand male cork. Table 6.1 below indicatesincremental production from the project (for details see Annex 4, Table 4), and the equivalentannual productionas a percentage of national production. Incrementalproduction of fuelwood and forage units would be almost negligible,incremental production of cedar and reproductioncork would be sr-.ll. Incrementalproduction of male cork would be substantialbecause of the large male cork quantitiesyielded by the felling of existing stands. Incrementaleucalypt production would be large because of the high productivityincreases expected from eucalypt clones. . 43 -

1&1.*eL6.1: INCREMENTALPRODUCTION FROM THE PROJECT

Male "Reproduction" Forage Cork Cork Cedar Eucalypt Fuelvood (Million ('o00 t) (P000 t) ('000 m3) ('000 .3) V000 3) FU)

Total Production over the project life 25.2 127.1 232.0 7504.4 1.4 416.9

Equivalentannual production 0.3 1.7 3.1 9.9 19 5.5

As X of national production 1988 (2X) (301) (4X) (30X) negl. (0.41)

Table 6.2: END USES OF PROJECT CEDAR AND EUCALYPT PRODUCTION ('000 m3)

Pulp Panel Utility Sawlogs Fuel-

Total production over project life 3580 170 1730 520 1740

Equivalentannual production 45 2 20 7 23 as 1 of national production1988 (351) n.a. (101) (51) negl. -44.

C. Markets

6.07 As most forest products are at present in short supply in Morocco no difficulty is foreseen in marketing the project output of forest products. Incrementalproduction of pulpwood,panelwood and saw logs would substitutefor imporus. Eucalypt productionfrom the project would initially help reduce the need for pulpwood imports and it would also alleviatethe shortage of eucalypt utility wood. Incrementalproduction of cork and forage would be easily consumed by the cork industry and herdsmen. Incremental -roduction of fuelwood would be negligible relative to the overall national deficit. During the first five years the project would also produce substantialquantities of stumps which would be easily marketed to bakeries, hammams, etc...

D. Prices

6.08 The 1989 prices used in the financialanalysis and cost recovery analysis are listed in the table 6.3 below.

Table 6.3: FINANCIALPRICES FOR SELECTED PROJECT OUTPUT

QUtDut XUic2L(DH)

Cedar m3 600 E. camadutlensis m3 245 E. gomphocephala m3 190 Reproductioncork t 2140 Male cork t 475 Fuelwood cork oak m3 310 Fuelwoodholm oak m3 154 Stumps t 50 Acorns Kg 1.8 Forage unit 0.67

Except for acorns and the forage unit, the prices are auction prices, includingtaxes, averaged over the last two years. Cedar, cork oak and fuelwood prices are national averages,eucalypt prices are regional averages for the project area. The acorn price is the market price in the project area. The forage unit value has been derived from the value of the feed it substitutes for (barley). Prices are conservatively assumed to remain constant in real terms, except that the fuelvood price is expected to rise in real terms at the same rate as energy prices as projected by the World Bank (3.5X p.a. until the year 2000 and constant thereafter). 45

E. Imnacton Government Budpgt and Cost Recovery

6.09 The overall budgetarv inact of the project during the investment period, for the central government and the communes taken together, would be positive as shown in Table 6.4 below. This is mainly due to the regeneration of cedar and cork oak forests under the project, which permlts the harvesting of degenerating mature stands. However, all govermnent forestry investments contribute to a resource transfer to the rural forest areas, since all (non-tax) forest revenues accrue to the communes. On the other hand, a rough estimate of the effect of the communal project component, in@icates that the taxes paid by then on works and sales revenues would reduce the overall central government net budget outlay of OH 390 I by about half to DH 200 M. Tbleg 6.4.: IMPACTON GOVERNHNT BUDGET (excluding communal component) ( DHmillion)

1990 1991 1992 1993 1994 Total

Project Costs 113 137 148 139 135 672 of which taxes .2A _8 _2 .Zi26 213 Net Project Costs 85 109 117 113 110 534 Project Revenues, of which 178 18b 192 203 209 968 Government taxes 27 28 29 31 31 146 Balanes Overall 93 77 75 90 99 434 Coomunes 151 158 163 172 178 822 Covercnnt (58) (81) (88) (82) (79) (388)

6.10 Most project works are carried out on state land where cost recovery is not normally an issue. The overall financial results from the project are favourable with a net present value in excess of DH0.5 B. However, except for Sahel, as explained above (para 6.09 and also in paras 2.26 and 2.30), the commns are the main beneficiaries of forest revenues. Of productive investments, the regeneration and plantation activitieshave an overall cost - 46 -

recovery of 600X', of which the central Government recovers one-fifth through taxes, which Is a cost recovery of 1202 on its investments. For range managementon state land (Bouhasousson),total cost recovery is 562, from which the Governmentrecovers 26X of its investmentcosts through taxes. This is consideredsatisfactory considering that such range managementis a neces&aryactivitr to permit regenerationoperations. (For details see Annex 4, Table 3). At Sahel des Doukkala (or elsewherewhere DEFCS undertakes forestry operatiouson private or collectiveland), a contract is signed where the total (undisc3unted)face value of costs are recoveredby the government from the sales proceeds of the output and the user fees generatedthrough the investment (para 2.16).

VII. BENEFITSAND JUSTXIFICATION

A. Benefits and Leneficiaries

Productionand Foreign Exchange Savings

7.01 The direct quantifiablebenefits from the project would arise from increasedproduction of forest and livestockproducts. Over the project life of 75 years incrementalcedar and eucalyptproduction would substitute for (a) 3.6 N m' of importedpulpwood and panelwoodrepresenting about DH 1.2 B in foreign exchange savings, and (b) some 5 N in of imported sawlogs, representingabout DH 870 M in foreign exchange savings. Additional foreign exchange savingswould come from increasedexport of cork products. The project would also produce about 3.1 8 mn of fuelwood,equivalent to 0.3 K t of liquifiedpetroleum gas for householduse, which would cost Morocco about DH 470 M in imports. Also future forest revenues of collectivesand communes within the project area would be substantiallyincreased.

Emplo ent Creation

7.02 Over the five year implementationperiod the Project is expected to generate about 2.2 N man-days of direct employment for the rural poor in the project area. Furthermore,over the life of the project, logging of project output and cork harvestingwould provide about 4.3 N man-days of labor, and charcoal productionanother 8.4 X man-days to local forestry workers who belong to the poorest strata of the rural population.

' The terms of net present value (NPV) of revenues divided by the NVP of costs.

' Data available did not permit a detailed separate calculation of the benefitsfrom the communalcomponent (192 of projectcosts), which are therefore, not included in the above figures. However, since similar models are used for operationsundir the communal component,results would be similar to the main part of the project which is financed over the DEFCS budget. If the communal componentwas included,project output would be some 25X above the output figures describedabove. - 47 -

Rnvironmental and Other Benefits 7.03 Benefits have been quantified for tho key productive project components, namely regeneration, plantation establishment, rnd silvo-pastoral development. The forestry planning, research, and nature conservation components would also make substantial contribution to the development of the Moroccan forestry sector but the specificimpact cannot be reasonably quantified. 7.04 First, the undertaking of the forest inventory and the fuelwood study, along with the on-going marketing study would establish a firm knowledge base on the state of the forest resource and its use, including the extent of its degradation. Building on this knowledge the DEFCSwould be able to devise a sound development strategy incorporating both production and environmental (protection and recreation) objectives. The expanded demarcation of the forest estate, the development of simplified management plans, and the strengthening of the DEFCSwould provide the essential tools to improve the institutional capacity to implement this strategy. 7.05 The research component, including genetic improvement, fuelwood production, the silvo-pastoral development, and the M'DAforage seed farm subcomponent would bring increases in productivity and quality of natural forests, plantations, and forest ranges to meet increased production objectives.

7.06 Furthermore, the reduction of forest degradation which would result from the planning and research components as well as the watershed protection and nature conservation components would help preserve and enlarge the environmental benefits provided by the forsst resource. Expanded demarcation would limit agricultural encroachment. Increase in fuelwood and forage productivity and therefore production, would help check the two main causes of forest degradation, overcutting and overgrazing. As a result large areas would be kept under forest cover thereby performing essential functions in the ecosystem such as soil conservation and providing many secondary products which are collected by the rural populations. Moroccan watersheds show erosion rates among the highest in the Mediterranean basin which jeopardize the benefits expected from reservoirs. The watershed protection component, including studies and physical operations, would help prevent further soil erosion and siltation of the dam impoundments in the areas treated, which would yieldboth upstream and downstream benefits. Morocco has valuable wildlands with unique ecosystems and endemic species, which are threatened by misuse and neglect as resources allocated for nature conservation have been almost inexistent so far. The nature conservation component would be a first step towards buildvngthe capacity to protect these resources without draining limited fiscal resources. - 48 -

B. Economic Analysis

7.07 The overall economic rate of return of the project is estimated to be 39S. Individual economic rates of return (ERR) for the project components have been calculated where possible and are shown in Table 7.1 below. Table ?.1: ECONOMICRETURNS

ERR NPV at 121 I (million DHI

Total Project 39 485 Regeneration over 50 421 Cedar over 50 405 Cork over 25 17 Plantation Establishment 31 224 Silvo-pastoral Development 15 11 Bouhasot;ssen Forest 18 7 Sahel des Doukkalas 14 5

All values are in 1989 constant prices. The economic analysis has been made in border prices, with international prices converted to dirhams at the exchange rate of US$ 1 - DH 8.25. Because of prevailing unemployment and under-employment in Morocco, the market rate for labour has been adjusted by a factor of 0.8 to reflect its opportunity cost. Traded goods and services have been valued at their cif import- or fob export price as appropriate. Non-traded goods and services have been adjusted by appropriate conversion factors (Annex 4, Table 6). Since llorocco will face increasing shortages of fuslvood, its economic price has been calculated on the basis of a substitute source of energy for household use, namely the cif import price of butane gas, adjusted for calorific value differences. Economic prices are assumed to remain constant in real terms for all inputs and for some outputs, namely cork, acorns and forage. Fuelwood economic price is assumed to increase in real terms at the same rate as petroleum products as projected by the Bank forecast, i.e. 3.75Z annual rate over the 1988-2000 period and remain stable thereafter. Eucalypt, pulpwood, imported softwood, and imported hardwood prices are assumed to increase in real terms at a rate of 11, 0.81, and 2.5S respectively over the 1988-2010 period, and remain stable thereafter. - 49 -

C. Sensitivity Anallsis

7.08 As illustratedby Table 7.2, the economic viability of the project is fairly insensitive to reductionor delay of project benefits and even more so to cost increases. The net present value of project cash flows remains positive for cost increaseor benefit reduction in excess of 50X and for benefits la8ged by more than five years. The plantationestablishment component would remain economic even in the unlikely event that all the output were to be sold as fuelwood.

Tablg. 7.2: SEISITIV1TY ANALYSIS switching values Total Prgiect Total benefits,prices or yields -60X Total costs 1381 Regeneration.Cork and Cedar Total benefits,prices or yields -911 Total costs 10001 Plantation establishment Total benefits, prices or yields -711 Total costs 2481

I&an&2manag2Met Total benefits, prices or yields -251

Total costs 331

Net present value Economic Rate at 121 (H M} of Return

Total grolect: Base case An 39 Total benefits, prices or yields down 101 403 34

down 501 78 n.a.

lagged 1 year 398 28

lag8ed 5 years 135 n.a.

Total costs up 501 320 n.a - 50-

D. proQject Risks

7.09 The major risks facing the project relate to the environment in which the project is implemented: A slower than projected growth rate for project plantations and continued Goverment failure to provide adequate and timely financing. The former is minimised by the introduction of vegetatively reproduced planting stock (clones), which has dramatically increased yields in other countries where this technology has been developed, and through improved plantation techniques and maintenance of the plantations (para 2.12 and 4.06). The funding risk is reduced by the fact that, helped by the Bank adjustment operations, the Government budget situation has considerably improved in 1989 and further improvements are expected. Also, the proposed project is included in the Government's target investment program (PIC) identified under the Structural Adjustment Loan (Loan 3001-MOR)and, in addition, it has been defined to represent priority investments from DEFCS's 5 year investment program. Another potential risk is the failure of the forest populations to participate and to comply with plans for restricting and organising livestock grazing in project areas. This risk has been taken into account in the design of the project and is minimised through the choice of sites for project operations, generally where there have been previous successful experiences with similar works or where the populations have asked for the project (paras 5.05-5.07). Arrangements would also be made with concerned populations to minimize this risk (paras. 5.03, 5.05). 7.10 The sustainability of forest range management works is a problem commonto all such investments on commonaccess land. The choice of Sahel des Doukkala and Bouhasoussen for inclusion in the proposed project would help to increase the likelihood for longer term sustainability. Doukkala has started similar works already in 1965 which are still maintained (para. 2.16). In Bouhasoussen forest range development works started only in the early 19809 (para. 2.16) but the fact that the local populations are maintaining fences and other project works at their expense, that they ask for additional investments and are prepared to pay higher user fees are all encouraging factors. The organisation of the herdsmen, which has already started in the two areas, and the strict technical supervision provided under the project, are key elemnts which will help ensure the sustainability of the investments. VIII. &=&ES ANDRCOIENQH DATION

8.01 During negotiations assurances were obtained from the Government and agreement were reached that: (a) an Inventory Monitoring and Management Unit would at all times be maintained to maintain and update the inventory (para 4.04). - S1 -

(b) modern management plans would be prepared with terms of reference acceptable to the Bank and that prescribed treatments would actually be carried out (para 4.06);

(C) a national reforestation plan would be prepared by June 30, ;995 (para. 4.07);

(d) Governmentwould before December 31, 1992 implement measures satisfactory to the Bank designed to promote the carrying out of reforestationactivities on state land by la Cellulose and other private sector enterprises(para 4.11);

(e) (i) Government would not later than December 31, 1992, carry out a study, under terms of reference satisfactory to the Bank, to develop a suitable structure of prices to be charged for wood supplied by DEFCS to La Collulose; and, (ii) ensure that upon the expiration of the protocol for pulpwood supply in 1993, any transitional arrangements to supply the company with pulpwood would be at prices based on the study and agreed upon between the Government and the Bank (para 4.11);

(f) the forest range management unit in DEFCS would be strengthened to include one socio-economist and one livestockspecialist by September30, 1990 (para. 4.14);

(g) a nature reearch management unit of at least five professional staff would be established not later than September 30, 1990 (para. 4.18);

(h) the research dlvision would at all times be staffedwith experts in forest range management,soil conservation, biometry, and one economistand a sociologist(para. 4.19);

(i) a study, with term of reference satisfactory to the Bank, would be carried out on the organisationalstructure of the DWFCSand organisational proposals for the forest service, includingjob descriptionsfor key staff, would be made for discussion with the Bank and the agreed recouuendations would be implementedby the Governmentby June 30, 1992 (para 4.22);

(j) a Special Account may be established on terms and conditions satisfactory to the Bank (para 4.31);

(k) procurement of Bank financed ites under the project would be carried out under procedures acceptable to the Bank (para 4.33); - 52 -

(1) separateproject account& would be maintainedby DEFCS, they would be audited by an independentauditor satisfactoryto the Bank and a detailed report of such audit would be submittedto the Bank within six months after the end of the fiscal year (para 4.37);

(m) the PMUvwould be staffed at all times with the deputy director,an extensionspecialist and not later than September30, 1990, an economist (para 5.01);

(n) for project activitieson non-governmentland suitable arrangementswould be made with the owners to ensure proper implementationof such activities (para. 5.03);

(o) a task force would be maintained for the coordination beetween the Forest and LivestockDepartments (para 5.03);

(p) the Governmentwould make arrangements,satisfactory to the Bank, with individualswho use, for grazing purposes, forests in which regenerationactivities are to be carried out (para. 5.05).

8.02 With the above assurancesand covenants,the project would be suitable for a Bank Loan of US$ 49 N to the Kingdom of Morocco. The project is expected to be completedby June 30, 1995. KINGM Oflori SaicoCcaa FOIfT0YDIVIL00eNM1 PELECT Ixistin an rletdO Action taknR I tr CtcIA-LNnt

Annujal £stimted Capac11) year leter- Accumi- 3ngojd. .e An- Tranhe Sedi- Lift divided Order cinned shad lated capacity .... iedi- Iwrte mnt- trache by of Darn iliac ~~~zSakL 8C3Ar -- Ja1l- LnainA1 I munIatimL Vaim alia --MKcA- TN Prarct ksczLMm (tell E3/lSt/yr MINIX (N.031 (Mal3 1.N.I Cn.V. I/

*. =te ac.ano a tde I. xitaineGammtaneeir.arayFle 1. d V foulwya 1957 4 9.20 323.0 725.00 16.12 235.0 6.8 0.0 raised I 2. Mmw Eddbi ora Hn IS. 144.0 667.60 2.15 24.6 0.9 0.0 * S. " mssnAddaj1l Zia 191 4;400 250.0 369.00 1.10 20.0 5.5 2.0 3 * 4 ha raised 4. t1 Kantra get l9S3 4.40 27S.0 330.00 1.25 21. 5.S 0.0 5.NgellahWish M931 1 10.0 1.60 0.15 - - 0.0 5 Om raising projected 107 3.271.0 13.06 0.35 6.7 5.2 0.0 6 hil. To . hla utkbhl 1961 filled Cesation 7. Tisi-o-Ostine Tassaout 1901 9 970.0 S.00 1.40 1.2 100.0 0.0 * 7 by H. vousef

aistn train mrte t totallyfilled 2. Om 1 Study started 1. Al N sira Oam.E.Rabla 1979 17.n 270.0 2.n24.00 2.50 480.0 1.5 52.0 48.0 2 Om raisin V 2. Sidi M.O. Cou Seereg 1974 9.000 211.0 493.00 2.65 100.0 2.6 26.0 19.0 Abdallab projeted 3 Study starteo 3. ldriss ler Inau^ene 1973 3.640 554.0 1.212.00 2.1S 150.0 1.2 11.0 12.0 4. Voussef B. Tacfin mass& 1973 3.504 144.0 320.00 0.50 20.0 2.5 27.0 12.0 4 - 0.1 3.6 27.9 0.03 6 Cwpensatien 5. OhtMl Issen 1966 105 450.0 0.725 0.036 Abdel uMsi

c F. ,u 1. Mit Youb Sebou 4.705 191.0 50.00 0.90 45.0 2.0 50.0 1.6 5 269.6 110.00 1.20 65.0 2.2 46.0 2.4 3 C1MI. ftadir 2. Auualoua So0ss 4.450 pj 3. ",lisJaor oha 6 300 1.721.3 3.0.o0 1O.5 2230. 1.4 69.0 66.0 I forestry U SrSir n5 2.666.6 43.00 0.20 5.0 4.0 25.0 1.2 4 C31 lTetouan 4. GUZ isstson S. 1Maut Machet 230 23123.9 300.00 0." 30.0 1.2 64.0 10.0 a CLVWf fes 4 6. Ctber ol Oaud Omm.E.abla 3.290 460.0 740.00 1.55 Sebou 20.000 140.50 7. Lal Aichb mutcrtai S. £1 ornes 28 12.400 200.00 alresAw H. t tMnts Studed raised 1. Lalla Tekeuat 51F55 1935 1.707 300.0 62.00 0.51 4.0 12.7 0.0 raised 0 SS5" 3 SS 2. ain £1 Ouidan UAbid 1953 6.400 550.0 1 404.00 3.25 .324.0 1.1 63.0 25.0 1977 1.441 1.013.0 195.00 1.46 24.0 6.1 5t0. 25.0 4 SS I Nuloy vOs5tf Tassoout I SO" Al UbMasn L"oukos 1929 1.020 60.0 002.00 1.02 20.5 1.1 .*.0 67.0 4. 4.0 6 s0 S. 1fn dattouta ear 1992 175 2.753.0 43.60 0.49 10.6 4.9 11.0 a. SidiN.S.A. 0 so bSttdbi MetAtor 3951 750 1.410.0 43.00 1.10 4.6 24.4 0.0 raIsod 7.6 29.0 2 So55 _1E loumn Issen 190l 1.300 616.0 216.00 G."o A 1.0 0.4 1.263 192.0 7.00 0.66 3.1 15.0 2 5 3.0 2 SS u Sidi Swiss Lakhdar 1903 4 0 6.0 5 Ss w. Milay nassan lor Lakhdar 1927 1.667 504.0 270.00 0.54 40.0 2.1

a .. directeur I* C z capacity o0 = life of da s tranche morte V Study for the praration of st, J.' SO a _ec prepared - SS * simry study done / Also called hit Choswit - 54 -

Annex 2 Table 1

rojeotCoss _ur

teotL total 8 t.ntp am, 2 osts s e tLemm ?qelIa tot-al Mosbz Cos" L-oL ForegnaTotal b.3se Costs

A. 70315 NNING ______.._____.

1. 1 WW1vapco166 hOWN"I 3uicnAtA1 no 2.363 11.616 14.076 M6 1.416 1.707 63 2 a. yaw oauBmAI 10550 10.444 30.000 3 4 2.370 1.260 3.636 3s . 3. 103S3 N*Aint RAI663I 15.565 3.450 MOSS t1 1.600 . l0 e.347 1o 3 Sub-Tot 7I5! RtII 37.534 as.56 es.114e * 6 .50 3sUS 7.650 41 0 a. IOt! o In m i. ins or w a&IU coo 33a? 50.357 3.7n 53.3U I U 4 6 a c n Zmuti 17.657 7.36 2 42.1 a 4 2.140 664 3.034 2s * ------.v-...... ---- ss.au 1o.213 76.466 1 1. am.214I S" 6.513 13 12 * . a.6ANasM U326ILSIM 113.661 61.365 175.366 3 26 I3."1 7.444 31.35 55 as *3. K IImAU.ls 10.716 42.610 3a 6 S.6 *.6 5.1*6 25as a *. loan A Ouv*U *

umnaa0 FM" 17.236 4.37r6 a21 S e.0m 1 e Uo as _ S SAMm. *OU5M 16.730 6.443 MISS6 3 4 CM56 1.145 5.3533S 4 113 oiU A 6 10tW 13.004 514 13.519 3 1.570 6t3 .401 4 3 ,Do.Sew ram 1.365 1.206 3.361, * a 16 134 260 43 a ... . tV - -. Sub?ultal. tU OZYnU! 51.327 15.261 68.53" a 10 6.631 i.6m 6.071 23 10 S. MOSUT3OUD 26.1u5 16.315 45.500 4 7 3.14.1 3.346 5.515 43 1 S. CO.OAL CIU1U!I4 6.974 55.132 1*1.105 3 1o 16.765 4.622 15.40 so to .-...... Sub-tot.alFOOT 013A110 330.774 155.135 535.6061 2 76 .6.154 10.804 6.056 30 is

1 I= lsmA flo 4.373e.46 '.110° 1 550 40e 1.020 40 1

Raamaoh- Gameates?qpnowumt 3.636 2.710 6.666 4 1 477 535 613, 41 1 e eS.lOel 2eS 2s.a.os-UiIwPmtesela1 co3Ztas,mtlnSolmtIlo 6113e 6oz 2.704 2.5S" 5.2669 a 1 320 311 630 46 1 3g.egg-UvlwWstoss Int.s,intsom.Affd3am.. 1.042 300 1.441 a 0 1In 43 175 26 0 1..maiolu*linIh3otlam 327 160 407 4. 0 36 33 40 44 01 Iftearzsb-10006PlintatAl 1.746 740 2.494 3 0 312 00 303 30 0 woorob-ftLersbed Nesessamt 23436 555 3.903 I 0 2 6?7 363 t0 0 I4...Zob Su.4~dy Wmam .000 .0 I.. 606 - 60 I

Sub.tea MD16OMo= Fr a3 17.064. 7.204 34.303 3 2.073 673 2.94 30 4 3. ssUt?Uts 0293.2M! ... ____..______. _66U AO Io11063 U_ An U 60 123 1.022 I 0 10 1 U4 U a 13511UU*L 0203033? 5103? 30 * 30 0 - 4- L Sbe-to. SITUN Z _ 0N5 12 1.0 1 0 113 1s 12 12 C 4. 60M A W! IUS AODWV fl 21.176 12.167 33.365 3 5 3.567 1.477 4.044 37 CU@U2IUZZ 770 1.664 2.434 a 0 93 202 295 6 I Sub-Total =ItAn t utS 21,046 13.61 35.76 S .3309 39 5. T1W5 6.035 1.065 7.100 I 1 732 U1 "61 i

Sub?oteL 3010 _ 50.303 2t366 76.745 3 t1 6.107 3.195 0.303 34 1

sLee CmetsingmZem 70.344 33.68 113.030 3 17 9.36S 3.093 13.361 30 1 ... .. , , ... ~~...... - .. .____ ------. ______Total ca1 574.3 25.35 1 6357 30.523 09.64 31 12 .______...... _ ___.______..______.... __ _ _ _ ---. ------Octe 31. 166 1:2A gloom or Noa h.et. Cam-"S bp Vow

(U '0001 (23.~~~~to'000) low 16go 191 10f2 19o3 100" Totl logO 1901 1ion 1063 1064

A. 61 AMMING

- Io.5Su 580 So1 414 431 3.096 1. rmatI 1U1U AM3 U&UU*L"33165A01 KM 4.634 4.1090 3.422 3.593 4.010 1.024 6.014 9.112 9,601 38.735 491 gm0 1.010 1.101 1.142 4.071 2. NO= OSinA&1iu 1.410 23.54 2333 402 10 60 Su 2.604 S. RUIT aM iMNT' K110U 1.911 3.205 S.5SU 4.340 1.021 1.206 1.057 2,202 2.433 1.8Wt *.31 Sd1e4W1 MANKIN 1.563 15.20 10.0 20,181 1,3.090

1. U5210 or 14123*1 51320 7ut 10.410 12.346 13.081 14.296 15.300 65.446 1.211 1.501 1.504 1.711 1.62 ON sinina?1 30.651 ,50 501 136 60 1.022 1.140 Gm5 smUA%10 3.748 4.0)0 6.096 1.403 6.611 96.200 1.129 2.096 2.322 2.610 2.033 11.611 sd-to4ak Mnin TIOMOr 3413*1 IL 14,159 MM16 10.183 21.780 23.965 41.405 43.600 45.911 48.365 214.059 4.246 5.0$. 5.216 S.513 5.151 33.603 2. HAIIAIIO Ut*3LIUI34.111 52.69 00S 1.040 1. 215 1.31S 1.104 .311 S. 23 WARniOOnP 1,211 S.5$14 10.533 11.450 15.001 4. I S1X1 in1UOLUUI 351 So81 158 613 3.221 -am 3,754 4.511 4.601 6,312 1.344 26.122 458 -0~ 1 35.195 413 68 011 1.011 013 4.31) at=m aw luma 3.074 1.242 6.022 6,415 6.161 2.414 5.326 4.523 3.501 210 16.905 10 050 546 420 32 1.632 P32* iaSImc ANDBlo313$ 2.116 212 52 31 39 31 337 01,11 84.4 Fe= 1.412 420 306 321 311 1.406 2.138 2.131 2.234 1.015 S.03 OM81 DBVflIIITM- 11.31-4 1150 11.653 16.000 16. 196 61.301 8W-TOtL4 110028 0.101 11.650 10.411 6.020 3.466 56.031 1.123 3.160 2.351 124 414 0.196 S. I ? IMm U2.446 34.090 154.161 3.401 3.504 3,141 3.605 4.052 10.0M VI 0. Co60UhL 13IBIJT 21.900 20.432 30.903 136.233141.113 055.402 12.706 10.104 11.112 16.354 16.110 10.146 &&-1.as1 10038 oUaIIous 104.618131.805 141.343 C. -PN WISVTIM 0o0 10.101 '141 452 205 a32 96 1.224h 1. MIMSEainuAnIM 1.206 3.100 2.438 1.02 a. .ma aunInM MD 13L30W STUD? 2,414 1.606 1.114 1.032 1.002 1.610 105 log 215 124 130 959 06gg.mb- SmeUCS tmpvww t. 0.250 210 133 15 121 132 151 ...egdr-0p1wp..1.aseia.vmlaaSt.Lt 0pat 1.161 3,961 1.241 1.054 1.208 215 303 250 458 406 1.114 34 31 30 S$ 50 214 3...egb-b~rnrnege1Int.umVewieam*id ZA.s 0 12 11 32 a2 Um.u.h-Vuslu.oiIwoAtetImi ~~~ ~~~~3063 06 130 162 Su2 4 213 66" S" 120 050 1.013 33 61 S0 00 101 310 mToga &h1o ?11a1lms 10M 0 20 31 42s 1 Magin.t 160 1.515 Ge1 245 251 3.406 B1 - 5.045 134 2a3 264 - pit1 ftle us* 1.00 2.316 2.432 2 ;08 012 622 854 430 413 3.466 8W-la".oa luST 1 O MAN uMaussi S.6W6 ).5S4 1.0,54 348.;10 S. tnwum= uaimini 1.193 50 20 31 22 23 145 mNWWm.nMDmamnmIbmfMITAam iION 4)8 161 115 104 103 ------...... IUIIIUIIUM. usouini~ ~ ~ ~ ~~~~~-t 33------.... ------1.23 ox 20 21 22 23 140 8W-.4it06IImwlIiDh sit?1 161 115 I"4 1to

1.053 .- SIt 113 03 744 4.033 Sl06Nas VICLfl 15.004 4.314 6.302 6.011 S.2 30.010 .gulmuanm 030 1.501 316 120 13 2.631 so 196 38 15 10 144 3.111 16.653 5.066 6.080 1.030 0.301 42.143 2.033 120 a11 045 2010 118 Sub-To"k, Woun meipJlRBu 361 2.150 2.264 2.311 2.40 00653 44 203 214 25at . S. ="Em20 15.111 MOTS1 a2."? 3.099 2.381 2.255 1.622 1.645011.213 Moh'ToSa SWIM &CTSIVt1s as.360 16.540 10.620 1.0 0602060$ 1.6 0362.5 20.599 20.001 96.660 1.1.1 too=~ 6061 14.0 6.5 1.6 ------;;- - ;... ; ---- -; - -.

1969i I?t* 0051 100 ilL It? 33*lt 016'1 93531 Woft£60 9561 UES1f96A 19131gh

St 0 0? * 1 o~00iLl St7 in1 31 0 383118g 361 It 5, 60 9 9 t00 09 65t Ste N" Ift It' 09?065 (31 99 36001 615'?~~i 056' NO' £01 It$ @930 39893939U9511£19316

00? 55 3 ml,0 6t9 @15 991 -9 .10.u'gTOII: it 5 0' 01 61 1 $009 16l 35$ 09 3it 99 3301599619905rA

1 0......

to06 it So10 09 65 9 191 Get'sw In5$ £55t ot'r615""MD1 S *olwz" 1303:1

961?119 003 lo~t 0or 9 9006 got' 5000 00l "15' 6'930993939 0U10 b911I

------~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... ------

its' 01$'O stg'1i 1661 £561l 91091 01605 695'91 611'3 01301f 01?'il $9105t u 391191e ""

or -i 9 9 6 i lot* S$ 6$ cc O9633U'3low 1M&'

sit . 66 60? 31 311 035' At1' i0' 600' 06 1~063 1£*

6651s Stf, i' 160t' It35' 1 Uvs o A- .Mo 66$'s 60191i 'OWL0U50 RS993919169

lo$? 05g' U91 69i' its I 9 3'l snt139't 510,9 33$ WI t ISttoie' "vso 6SNT311'tS. '@5 61.. 6? 9? 3? 635~...... 9..90 .....W.. 61... :55"0901 191'1iio'1 66 66' 009'£5 £066 661' 115 0'St 6353919319

56?. ------6 I" 61 t"1631 19" lt 369,1 1931ifl 9 A "I-3 9 6~~ 3 $ 516 61 055 61 1' 19 £51 051~~~~~~~~~; ND"""

...... ~ ... ~ ...... ~ . ~~~~~~......

1655 09$ 616? Is Its., 3056 66*1 £01 gOt got5 PM To"" '3 MvI93s$t6sl Ste1 0 9 50 59'? £t1016 M's 96t' 306o 665twsn "o toS'S 1051 611i All' £9. 66£ 103091 or9's 1 950 oio'. UtS'S Set90 89 '1 0 6 CST' 4"11 ot got'eal I Sort tot'to 691 Su A010mgma10buq7 1r I69166 131£ ' uren acum 'a

3in3110;;; 3011913U3@1910 WI1IO1 09?o3 @19151 .;; "I t to 9 el 650?31 13.I M£8'Igig get ~~XSIIUV S - -~~~~I - 57 - Annex 2 Table 4

KINGDOM OF MOROCCO

SECOND FORESrRY DEVELOPMENTPROJECT Disbursement Schedule

(US$ M)

Calendar Bank Disbursement Year Quarter FY Quarter For Quarter Cumulative 2

I FY 90 III - - - 1990 II IV - 0.6 - 0.6 III FY 91 I - 0.8 - 1.4 IV II 1.0 2.4

1991 I III 1.6 4.0 II IV 2.0 6.0 III FY 92 I 2.0 8.0 IV II 2.0 10.0

1992 I III 2.0 12.0 II IV 2.0 14.0 III FY 93 I 2.0 16.0 IV II 2.0 18.0

1993 I III 2.5 20.5 II IV 2.5 23.0 III FY 94 I 2.5 25.5 IV II 2.5 28.0

1994 I III 2.5 30.5 II IV 2.5 33.0 III FY 95 I 2.5 35.5 IV II 2.5 38.0

1995 I III 2.0 40.0 II IV 2.0 42.0 MII FY 96 I 2.0 44.0 IV II 2.0 46.0

1996 I III 2.0 48.0 II IV 1.0 49.0 - 58 *,,, ^~~~~~~~~~~~~~~~~~~nn.3

KINODOKor NORocCO &scoN FORESTRYDKLOPKI PROJECT

*EaEEAAtinl NtURL Pamisy

6SIU1hi~oP atural Pru, end art Oa I AimOl Prea t1,6-94

crbtoi$t S Complmtary t06 200 200 230 336 (1.0

Al usetme Complemtary 400 460 oe 430 430 2. 4"

Ivane Compleentary 706 710 10 650 750 3.700

Aid" 406 460 40 4464 0 2.07

Ero" Cowl _ ary 406 466 ' 00 G6 ' 06 30 "2 3.600

Aide0d6 36ao 3 L 306 ' 2 t' 1.440

tSZI&1 tasrns st^tf 1,900 1.9f0 1.950 3.010 2.030 . 9. eo .lAmd 4640 76 766 730 740 3.136

C1l aJA (Ceder egteneration): 2.166 3.416 1.410 2.740 2.t?0 13.376

Kenttra ("aMra): high density forest G06060 o 71t0 906 '" 1.000.. 2"716

Low density forest 56 So S1 S6 S0o56

rVta (ab Aar)&r: Maual retorestattmo 600 200 200 200 200 1.006

Ql1lLJ5YiL (Cork Oak Regeneratton): 716 856 1.0l6 1.150 1.316 S.000

" fencng (N gSUIse euxgluud from costs (to be paid fr Coanal budget). 1 Fencing (ON $Ihda exclud"e fr Costs tn 240 hadye&r (to @e 0aid from Coima udget) I.e. fro 1.200ha in total. - - ~ ~ ~ Vi uw'atft n. J JNJS"S it* "a 1 t 1 'SJi4 148 Wt I 1 6e31. JoPM 6W*anIs JOif- J4-ie m^Jo PM all it1 tr ~~~~~~~~~~~~~'"10X1n3 01jSP j3 q its' MalZ 1 941 3voidt1 04 iun' /T V/, iM :IS3 stun 4 o g gee,,, NOW Urn o t", wo :isoe CID~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

nOu oC,** 5'ut t 3t WY101 91 t InOz 0 w _O'n nO nOU

5 5 ~ ~~ M*00 Mot9 Mot9 NO9* NO, NOVI 1099to I ItiSNO

ITI t U GINMIW * 2 r 1 ~ ~~@2035 0000SWONOs NOWOO"I'S* N'l n'oNto NOb1Not NO'Sp"Not n5U'ZI ,Of

t n I it £ OWI 099 Noo NOIR @If 099 NObm',et1 1

3 9 m3019 NOW0 Mot,I Nll NOZI9 NOZI0 NO',I NIVeI S t flISfl ~~~~~~~~~~~...... _ .

_I n /1 n_ _9 M," n e " 090, 0 _ mm1 100 nV sAtn e sts en~~~~~~~~64el *n NOt NO'4 I 4 now * l ' _ | ",_|@it NOt - NOt NO': OWl 't §g'2 n lo000 un' 1110I el" ' ' _'

NOtI IT UShNOI~ ~~~~9 'W1 0WOS 010 0"fI"OL SW13 u NO.1t 3 sqesi Ie pwuG I Ps"

011 W-eu111"rnpma imjuugtw

z.xuoll-i iM d"33RS KI*

9'.-. 8~~I _ _ - -.- -- UX~

_ Z ~~~~~

-,-- - Slt Scl

KINGDOMOF MOROCCO PROJECT SECONDFOIESTRY DEVELOMEN

300 300 30 1.S00, 71.40/a 300 30 SU 14M fteforeslateon I.os*oS 2QI 3 3 a (".1 L it 2,n1

t00 109 ISo goo 10 lOo Treatant L 0se 3,./Muntt m M Z° MechanIcal 3.4/wlt in 23 "ViaS tuilts L*mr 10.000 2.000 2.500 o.000 261/ 1.400 1,506 LA" la-se Dialotical Treatumnt LouAks -A0 L90 2 ln 26.68 Lathd.r 25/ra 4.,mf 5I," 6568 lawSass (-l oWa1 1.6 2,68 I5 200 00 100 100 M1 Loulkkos 3.001/ha in 21U js SIlvo-Pasloral S.AW8/ s 25* 4" 1.264 Improvmnl (be) LaShar ISO I" 2s

3.050 1.000 S.000 13,0 1.06 13.000 toukkos 1 345/ha" LM 10 1401 4.10 fruitTree 3.345/hbe"'.40 __ 2.56, 6.6041 P8ntattons (ha) Lakldar I.66 2.,06 2.2U4 IOLAI5 IA.6

(1 totalCost of 0StabliskuMAL/bal Cosl Lt thebroject il! - 62 - |~~~~~~~~~~~~~~~~~~~~~~~~~altS

siEmfl FORlltItY A3vRLo~6t 9e01U FOolsTtY RESIAMI=

1.* GENT!C !IPOWET Unit zI4VIsTESNTEXPENIOtTURE Unul 11Z I ISM I" Tetal 5 (014'000)

A. P!3anlLtSkin

Pine provenance trials - (Year 1) ha - 40 40 40 - 120k. 7.0 Eucalypt provenance trials (Year 1) ha - 40 40 40 - 120 7.0 Fcaing provenance trials ha -s 80 80 - 240 1.8 Pine provenance trials (Year2) ha - - 40 40 40 120 0.5 Eucalypt provenance trials (Year 2) ha - - 40 40 40 120 OS Guarding provenance trials my - 04 08 16 16 44 5.8 Eucalypt seed selection m 01 - - - - 01 60

I. yvehicle

4 WO vehicles unit 03 - - - - 03 175 Lightvehicles unit 01 - - - - 01 40

C. niecnelAssistance Consultants mm 04 02 02 02 02 12 80 Training n 06 - - - - 04 40

RECURRENTEXPENOITURE Onaratin I Waintenanee

New researchers: salaries my 03 03 03 03 03 1S 72 Researchers: displacement allowances md 90 300 300 300 300 1290 0 Occasionallabour md - 1SO 300 450 450 1350 0 Fencing mintenance ha - - 80 160 240 480 0 Runningcosts: 4 WO vehicles OOOkG 30 90 90 90 90 390 2;s Running costs: Light vehicles 000km 10 30 30 30 30 130 1.3

2. rugLUOIPROfleTIn NATURALFOREST

RECURRUNTEXNITURE onerAtion S. Maintenance

Agent technique: displace- ment allownce md 80 160 240 320 400 1200 0 Researchers: displacemnt allowane md 10 20 30 40 SO 1SO 0 Occasional labour d 160 320 480 G40 800 2400 0 Running costs:4 WS vehicle oookm 08 16 24 32 40 120 2.5 - 63 -

Page 2 of 2

O.U r SehtCmmWmt_M nu aPhnltal rfar and unitfotg 10fs -14%

2. YO_Uc 0LhuAT l ThiAmi Unit ZMWISTIHTpuZU ia ua 1, lS iA 11 Totl (0M 000)

4 UD VehiCle unit 01 - - _ 01 17S Pruning slaws other hand toolS SuN 30 10 - - - 40 01

RECUSRiNtTCEPIUfITUREi A. Plantations

Cleaning (7-10 yrs) ha 100 200 200 250 250 1008 0.3 1rashing/Cleaning (7-10 yrs) ha 100 200 200 250 2S0 1000 0.2 Thinning (16-l1 yrS) ha 200 300 400 500 600 2000 0.4 Pruning (16-15 yrs) ha 200 300 400 S00 600 2000 finalcrop inrttng 0.2 (16-18 yrs) ha 200 300 400 500 600 2000 0.1 S. OfUI Resarchelr: displace- rant allaance ad 30 100 130 10 130 S20 0 Occasional labour md loe 200 200 300 300 l100 Running costs: 4 I vehicle COOOm 10 30 30 30 30 130 2.5 , - 4. WAT 1I MINAMM I(IVES5nT EXPEmITUR A. Valhtle WO 4 vehicles unit 01 - - - - 01 175 Lightvehicles unit 01 - - - 01 70 S. TechnehaIAssistane

Consultants Om 03 09 - - - 12 08 fellowships M- 03 06 03 - - !2 04 C. £miint

Equtpinnt purchase & installation suN 0.3 0.6 0.1 - Publication - 01 1000 u - _ 30 - - 30 01

RECURRENtEXPIISITUME 0npratians

Newreseardhers slaries gy 03 03 03 01 01 11 72 OEFresearchers: die- placeint allowaunes md 120 330 330 100 100 980 0 other r*e5archers: dis- olacemt as lloa ad 200 800 800 - - 1800 0 Occasional labour ae 200 400 400 :1000 Running costs: 4 " 0 vehicle OOmO 10 30 30 30 30 130 Running Costs: Light ' 2.5 vehicle oOOb. 10 30 30 30 30 130 1.3 Other operating Costs sum 0.2 0.6 Niscellanous 0.2 - - - 200 costs suN 0.4 0.4 0.2 - - _ 100

S. ILVO-PARraa. Motes

Nanagm_ntplIns 'OSh 24.5 27.0 15.6 25.1 Arg4n 9.t5 85 tree study OOha 29.S 29.5 59.0 60 - 64 - An ez 4 Table 1

KINGDOMOF MOROCCO

SECONDFORESTRY DEVELOPMENT PROJECT INTERNALRATES OF RETURNAND NET PRESENTVALUE Co PROJECTCOMPONENTS FINANCIAL ECONOMIC

IRn NPV at 122 ERR NPV at 12% % million DR 2 million DH

1. REGENERATION

Cedar

Complementaryregeneration - 206 over 50 -. 342 Assisted regeneration - 34 over 50 63 Subtotal Cedar - 240 over 50 405

Cork

Bab Azhar - 9 over 25 3 Mamora high density - 31 over 2S 13 Mamoralow density - 2 overS . I Subtotal Cork - 40 over 25 17

Resenerationsubproject - 282 over 50 421

2. PLANTATIONS

Eucalypt

El / 22 15 32 37 E2 2/ 19 36 29 73 E3 3/ 17 60 33 124 Plantationcomponent 20 111 31 224

3. SILVOPASTORALIMPROVEMENT

Bouhasous*en Forest 16 4 18 7 Sahel des Doukkalas 9 -9 14 5 Silvonastoral suborolect 10 -5 15 12 Total project 41 39 485

1/ Eucalyptus Camaldulensis or Eucalyptus hydrids (clones) sub-humid, fast growth. 2/ Eucalyptus Camaldulensis or Eucalyptus hydrids (clones) semi-arid, fast growth. 3/ EucalyptusCamaldulensis, semi-arid, fast growth. 4/ Excludingthe Communal Component (192 of project costs) due to lack of data. However similar models are used for this component and results should thereforebe similar to those presented in this table. 65

Annex 4

*K!UAf _F _ DUMea sxamiaatsT OIWLONMKT PROJEC?

QIemv ra flcIufRATIN MNDPLMTATION COMPONENTS

NIn Present Valuet at Cost and RdLv&nU& I/ (moillion ON)

Cost Taxes on Sales Taxes C6munal Proceeds Cost Proceeds Revenue Revenue earmarked for forestry I/

Cedar Regeneration 40 8 745 127 619 . 198

Cork Regeneration 1. 3 5 4a a 4e

Subtotal £ eata&ALU Ss8 ll.S 793 135 659 211

Plantation (Eucalypt) 1in is lU t 12 Al Total Rsumza&AJ and Plantation 186 37 1030 175 8SS 274

L/ at 12 over S0 years. rounded 2/ 6overne nt Revenuc: about 171 taxes on sales proceeds and 201 taxes on costs I/ Proceeds earmarked for reinvestment in forest"ry: FN tax (101 of sales proceeds) + 201 of communal revenues

Caut Recovery Rat0as

overall Recovery Central Subsector 1/ Government Recovery Recovery 2/ 1/

Cedar Regeneration 1801X 3401 5001

Cork Regeneration 2671 65S 711

Total Regeneration 13786 2541 3671

Plantation (Eucalypt) 184X 511 491 Total Regeneration end Plantation 5531 1141 1471

1/ NPV of total revenue as a 1 of NPV of total cost. 2N PV of C.G. Revenue (taxes on costs and wood sales proceeds) as a X of total cost. NIPV ot reveues earmrked for reinvestmnt in the forestry sector as a X of total cost. - 66 -

lingg= OF sgcamaSM31 WLOPWN aac ~ ageojity FO S?LVOPAS1OBALCOMPONENT

I.OnUIASOUSSIU FOREST

- *.py ~~~atcstand RavenupsJ/ ('000 ON)

Total Cost Contributi_a to costs Central Wood Taxes Range Total froU from Goverment Sales On Sales User Revenue Comnu"es Herders Cost 3/ Proceeds Proceeds Fees 25 S74 229 3 203 22 142 8 430 1 433 S 796 14 226 i/ at 12% over 35 years. rounded 2/ Total Cost - Contribution to costs trom cinunes and herders

cost Recover Rails

Overall Recovery CentralGovernanant SubsectorRecovery

1/ UI I/ 56% 26% 25%

1/ NPV of total revenue as a % of NPV of total cost. V/ NPV of C.G. Revenue (taxes on costs and wood sales proceeds) as a % of C.G. Cost. 1/ NPV of revenues earmarkedfor reinvestment in forest range improvmant (10% of commnal revenuesfrom wood sales proceedsplus user fees) as a % of total cost. 67 Annex 4 Table IEGDOSMOF MOROCO SECONDF.OURY DEVELOPENTPROJEC DISTRIBUTIONOF THE PRODUCTION (2)

Pulpwood Panelwood BuLlding Sawlog Fuelwood Total Poles

Cedar 452 55S 100

Eucalyptus

Caualduleunss 53S 2S 202 5% 20S . 100

Eucalyptus Gompbocepbala 5S 102 10S 352 100

INCRMETAL OODPRODUCTION FRO TRE PRWECT (total productionover the project life) ('000a )

Total Pulpwood Panelwood Building Sawlog Fuelwood Production Poles

Cedar 232 104 128

Eucalyptus Canildulensis 6,750 3,578 135 1,350 338 1,350

Eucalyptus Gompbocephala 754 38 377 75 264

Total 7,736 3,578 173 1,727 517 1,742 KI.NGDWOf .!0OROCCO_ 68- A

SECONDFORESTRY OEVELO S'VPROJECT Tale S

SEECTLIDPROJECT STREAAS

3wis,u*.ftt Cs.c* ttt.X td1 totjl tdI f (b) (c) F poam% rewt rro.ct vRlt Ill!.tWI ll*LIV

t -1to 1o7 55 447 990 -344 2 -31t, 9024 59055 49014 1062 -tV (s) Senefit s from the 3 -297 9"211 3174 5OU13 lS?4 -350 RPgulratiou Component 4 -123 1M it"97 56561 14 -n 5 -30 74016 7V11 5973 1449 431 (b) lkaitits from the * -93 11941 2'6? 6 , ,? Plantation Component ? -Imr 6323 4353 90 31 4540 6 -23 59 3010 -232 s9 (c) Bft ts fros the 9 tam62 041 139643 1762 0 9264 S1'@op"toral Developesi 10 332141 02 33I2 19401 13734 I0234 Cowo@U it 3370n 7111 3441W 1946 IM2 10335 12 349M 3"6 35721 206 1404 10470 13 3441" 74 371595 2199 1419W 10462 14 14634 712 15410 346 140 192 1s 32m 7190 154 332 0 064m 14 1llt 5444 1251 110340 0 20, 17 12411 13 114" Il4 0 20 1 12M 5277 133W43 11937 0 2397 1 131W 532 1101 12771 0 :01I 20 23U14 5401 12516 -49115 170 ?3 21 -152 sm -W -132 729 7463 22 -196 6343 -12667 -19 17391S 7142 23 -254 6363 -1"79 -20W 1719S15 4t 24 -309 6431 -2427 -2041S 1795 9453 25 -23 7125 4794 -15" 0 95= 24 -421 41S 4394 -20" 0 944 27 -7n 473 3 -2504 0 95 23 -1144 46 34 -277 0 91i 29 2269 469 7133 7" 0 9"0 30 1493 474 1429 104 344 VW1 31 140 303 149W 610 13644 194 32 14313 3303 14076 -1413 364 1t94 n2 142662 330s 1446 -170 1366 l964 34 142441 363 14434 -2150 1364 1963 a -347 A" -45 -.59t 0 2"9 3t -413 3303 -334 -22 0 290 37. -410 33 333 647 0 29O -434 3633 39 6 3 203 3 -39 3303 3405 8 0 I90 40 -1"24 3303 -194221 -194767 0 29 41 -2433 3303 -200=50 -. 0344 0 290 42 -2o0s M03 -20090 -203234 0 o03 43 -21127 363 -207474 -.10022 0 290 44 -213 3603 -207" 22329 20 4 63 303 1042 194 0 1403 44 d4 33 10446 9 2 t103 47 61 3633 10454 "a I1NV 46 766 33 11490 1744 140t7 49 764 360 11407 1341 1403 is m 3S03 47 20 ; 2"0

.*.* *.* - 69 - Takle6

scaro E_ESM gmrm ffu

(0iha, perunit 1989prices )

Unit Financial Conversion gconomic Assumd Real Price Price Faetor Price Increases After 1990 1989 1989

1. OUTPUTS(at stump)

Cedar m3 600 1.4 8S0 +2.6% per annum until 2010 Eucalyptus Camldul nsis m3 24S 1.1 280 +1% per annum until 2010 Eucalyptus Gomphocephala .3 190 1.7 31S +0.8% per annum until 2010 Reproduction cork stirs 275 1.3 349 4 Male cork stirs S0 1.3 64 Fuelwood hole oak stire 105 1.0 100 +4.4% Pteg nnum until 2000 Stumps mt S0 1.0 5S +6% pr annum until 2000 Acorns kg 1.8 1.0 1.8

2. INPUTS

Casual Labor day 21 0.8 16.8 Transport.inputs at & km 0.7s 0.7 0.54 Transport. people km 1.4 0.9 1.3

Seedlings, cedar Il0 86.8 0.9 79.9 Seedlings eucalypt. regular 1l00 SS.3 0.9 S0.9 Seedltngs eucalypt, clones 100 200 0.9 184 Acorns for cork regeneration kg 1.6 0.9 1.7 forage Shrub Seedlings '100 60 0.9 SS Forage Seeds kg 1S 0.9 14

FertIlier. npk kg 1.64 1.3 2.05 Fertilizer Plantation year 1 kg 1.19 1.4 1.67 Fertilizer Plantation )-ar 2 kg 1.46 1.0 1.46

Mechanization. 09 hour 293 0.8 229 Mechanization. land leveling hour 171 0.8 133 Mechanization. tractor hour 80 0.8 62 Vehicule. 4 wheels drive unit 1759000 0.S 87.750 Vehicule. light unit 70,000 0.S 37.800

Road construction km 80.000 0.9 68.000 Houses Rehabilitation unit 32.500 0.8 26.97S - 70 -

KCIN=DOO OROC

SECONDFORFSTRY DEV INENT PRCOJICT

LIST OF ZxL:jN=TS IN PROJECMT7E

1. Preparation Reports in two volums prepared by FAO/CP, June 8, 19U6.

2. XIplu_tatlon Volume Annexes

Annex 1: Forest Inventory and Hanagement Plans (in French) Annex 2: Forest Demarcation Annex 3: Regeneration of Natural Forest Annrx 4: Forest Plantation Establishment Annex 5: Wtershed Nanagemnt Annex 6: Forest Range Mngement (in French) Anex 7: Conservationof Nature Aanex 8: Forestry Research Annes 9: Strengthening of Forest Serv.ces Ane 10: FinancialAnalysis, Budget Impact and Cost Recovery Aumnx 11: SconomlcAnalysis Annex 12: Wood Markets Annex 13: Cost Tables

3. Conseil National des For6ts, cliquibmesession, 10 mars 1988 and sixiin session, Scptobre 1989.

4. Extralt de la l6gislatlonan .atire de forfts de chasse at de p6che.

S. National Forest Inventory,Lavalln International a) technical proposal b) adbn&stratlve proposal a) cntract documents

6. Docuomts prepared by DEFCS for negotiations. r--. - nO

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