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World Bank Document Report No. 1494 TO FILECaPY Appraisalof a RuralDevelopment Projeçt in Cotton Areas Togo August26, 1977 Public Disclosure Authorized RegionalProjects Department Western Africa RegionalOffice FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank Ihis document hasa restricteddistribution and may be usedby recipients only in the performanceof their official duties.Its contents maynot otherwise he disclosedwithout Worid Bankauthorization. CURRENCY EQUIVALENTS US$ 1.00 = CFAF 245 CFAF 100 = us$ o.4o8 WEIGHTS AND MEASURES Metric System 1 millimeter (mm) = 0.0394 inches 1 meter (m) = 39.37 inches 1 kilometer (km) = 0.62 miles 1 hectare (ha) = 2.47 acres 1 square kilometer (km2) = 0.386 sq. miles 1 kilogram (kg) = 2.205 pounds 1 ton (t) = 2,205 pounds 1 liter (1) = 0.26 gallons ABBREVIATIONS CNCA = Caisse Nationale de Crédit Agricole CFDT = CompagnieFrançaise des Fibres Textiles (France) FAC = Fonds d'Aide et de Coopération (France) FED = Fonds Européen de Développement IBRD = InternationalBank for Reconstructionand Development IDA InternationalDevelopment Association IITA = InternationalInstitute of Tropical Agriculture (Nigeria) IRAT = Institut de RecherchesAgronomiques Tropicales et Cultures Vivrières (France) IRCT = Institut de Recherchessur le Coton et Textiles (France) IRHO = Institut de Recherchessur les Huiles et Oléagineux (France) MAR Ministère de l'AménagementRural (Ministryof Rural Improvement) MDR = Ministère du DéveloppementRural (Ministryof Rural Development) OPAT = Office des Produits Agricoles Togolais SONAPH = Société Nationale du Palmier à Huile SORAD Société Régionale d'Aménagementet de Développement SOTOCO = Société Togolaise du Coton SRCC = Société pour la Rénovation du Café et du Cacao au Togo UNDP United Nations DevelopmentProgram TOGO FOR OFFICIAL USE ONLY RURAL DEVELOPMENTPROJECT IN COTTON AREAS TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ............................ i - iv I. INTRODUCTION ...................................................1 Il. BACKGROUND ......................................... 1 A. General .......e.................. .......................... 1 B. Regional Characteristies ...................... 2 C. The Institutional Framework ................... 3 D. Sectoral Objectives and Strategies ........... 5 E. Input Pricing Policy ..... ..................... 5 III. THE PROJECT * ........................................ 6 A. The Project Area ...... ................ 6 B. Project Description ........ ............. 7 C. Detailed Features ............................. 8 IV. ORGANIZATION AND MANAGEMENT ............. s........... 12 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .......... 17 A. Cost Estimates ......................... ....... 17 B. Proposed Financing .............. *.... 18 C. Procurement ....... ............. ............... 19 D. Disbursements ................................. 19 E. Accounts and Audits ................ ............ 20 VI. FINANCIAL BENEFITS AND OUTLOOK ... 21 A. Government Cash Flow ...... o................... 21 B. Farmers Benefits .................. 21 VII. YIELDS AND OUTPUTS, MARKETS AND PRICES ............. 22 A. Yields and Outputs . ........................ Ob* 22 B. Markets and Prices ...............,........... 23 VIII. ECONOMIC JUSTIFICATION ........................ ...... 24 IX. AGREEMENTS REACHED AND RECOMMENDATION .............. 25 This staff report is based on the findings of an appraisal mission, comprising Messrs. R. Simsolo and O. Honisch (IDA), and T. Vollrath (Consultant), which visited Togo in October 1976. This documenths a rtrictd distributionsad maybe usd by recipientsonly in the performance of theirofcial duties.Its contentsmay not otherwis be dischaedwithout Worid Bank àuthorization. -2- ANNEXES 1. Progress of AgriculturalProjects Financed by IDA 2. SOTOCO Chart - Project Organization Table 1 - Balance Sheet and OperatingAccount Table 2 - Lama Kara Gin - Operational Account Table 3 - Marketing Price-Structure 3. Project Area Table 1 - Main Physical Data and Crops of Project Area Chart 16759 - Rainfall Figures for Plateau Region Chart 16760 - Rainfall Figures for Central, Kara and Savanna Regions 4. Farm and Crop Development Table 1 - Data on Project Farm Models Chart 16761 - Available and Required Labor on Farm Mlodelsin PY 5 Table 2 - Crop Labor Requirements Table 3a - Crop Production Characteristics - Plateau Region Table 3b - Farm Budget - Plateau Region Table 4a - Crop Production Characteristics - Central Region Table 4b - Farm Budget - Central Region Table 5a - Crop Production Characteristics - Kara Region Table 5b - Farin Budget - Kara Region Table 6a - Crop Production Characteristics - Savanna Region Table 6b - Farm Budget - Savanna Region Table 6c - IncrementalReturns of Ox-drawn Cultivation- Savanna Region Table 7 - Summary of Net Farm Returns Table 8 - Projections of Farmers, Crop Areas and Production - Plateau Region Table 9 - Projections of Farmers, Crop Areas and Production - Central Region Table 10 - Projections of Farmers, Crop Areas and Production - Kara Region Table 11 - Projections of Farmers, Crop Areas and Production - Savanna Region Table 12 - Projections of Farmers, Crop Areas and Production - All Regions 5. Ox-drawn Cultivation 6. Seed Multiplicationand Research Table 1 - Phasing of Seed Production Stages and Seed Requiremen,ts Table 2 - Seed Utilization in PY 1-10 7. Seed Cotton Ginning, Transport, Marketing - 3- 8. Feeder Roads Program Table 1 - Equipment List Table 2 - Calculation of Road ImprovementCosts Table 3 - List of Plateau Region Roads Table 4 - List of Central Region Roads Table 5 - List of Kara Region Roads Table 6 - List of Savanna Region Roads Table 7 - Road Maintenance Table 8 - Yearly Building Program and Costs Table 9 - Summary of Costs 9. Project Costs Table 1 - Summary of Project Costs Table 2 - Investments - Buildings Table 3 - Investments - Vehicles and Trucks Table 4 - Investments - Others Table 5 - Existing Staff and Project Requirements Table 6 - Project Staff Costs Table 7 - Operating Expenditure Table 8 - Vehicle Operating Expenditure Table 9 - Ox-drawn Cultivation Table 10 - Field Trials and Seed Multiplication Table 11 - Training, Monitoring,and Evaluation Table 12 - AgriculturalInput Requirements Table 13 - Costs of On-Farm Inputs Table 14 - Operation of Special Account for Procurement of Inputs Table 15 - SOTOCO Financing Plan Table 16 - Project Financing Plan 10. Project Cash Flow Table 1 - Government Cash Flow Table 2 - Financial Results of Cotton Marketing Table 3 - Post-Project Costs Table 4 - Project Foreign Exchange Income 11. Markets and Prices Table 1 - Cotton: Growth Rates of Production Table 2 - Cotton: Summary of Production and Consumption Table 3 - Detailed Price Calculation for Cotton - 1977 Table 4 - Price Structurefor Cotton Table 5 - Reference Prices for Food Crops Table 6 - Price Structurefor Maize Table 7 - Price Structure for Sorghum Table 8 - Price Structurefor Groundnuts -4- 12. Economic Rate of Return Table 1 - Economic Benefits and Costs Table 2 - Rate of Return and SensitivityTests 13. Schedule of Credit Disbursemnents 14. Audit Terms of Reference 15. Draft Terms of Reference for the Project Monitoring and Evaluation Unit 16. Reporting Requirements MAFS 12608 - AdministrativeDistricts with Population Density 12609 - SOTOCO InstitutionalInfrastructure, Primary Road Network 12610 - Main Soil Groups 12611 - Main Crops and Climatic Zones TOGO APPRAISAL OF A RURAL DEVELOPMENTPROJECT IN COTTON AREAS SUMMARYAND CONCLUSIONS i. The Government of Togo has asked for IDA's assistance in financing the development of agriculture in cotton growing areas. The prime objective would be to improve and extend production of cotton and food crops. Agricul- ture has high priority for investment because it employs about 75% of the active population and accounts for about 30% of both GDP and export earnings. ii. The project area would include most of the Savanna, Kara, Central, and Plateau regions. This area is well suited for cotton and food crop pro- duction. iii. The proposed project, carried out over five years (including the FAC-financed start-up period), would endeavor to improve living conditions in the area on a broad scale. Basic infrastructure would be improved by building new roads, improving and maintaining existing ones, and the drilling of wells for the supply of drinking water would be ensured. Traditional farming would be improved by introducing better cultivation methods, including use of oxen, and promoting higher yields through the use of inputs and improved seeds and the integration of food crops with cotton into a simple, well-balanced rota- tion. Some 53,000 farm families -- over 400,000 people -- would be reached representing about 36% of the expected rural population in the project area in PY5. iv. The project would be executed by a Government agency, SOTOCO. The main project features would be: (a) strengthening SOTOCO, by providing: (i) buildings and equipment for SOTOCO headquarters and field offices, storage facilities, housing, vehicles and equipment; and (ii) additional management and field staff, training and operating expenses; (b) establishing a seed-multiplication system including equipment and vehicles and carrying-out adaptive field trials; (c) providing ox-cultivation training including demonstration equipment and credit to farmers for acquisition of ox-drawn equipment; (d) supporting project monitoring and evaluation; (e) building and improving about 700 km of feeder
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