C.'>> RESTRICTED ReportNo. SOL.: Ap-7A
MsThi8Report.has beon propered for ASIAN D)EVEI:LOPMENT BFANiK the extclusiveuse of the Bankc. Public Disclosure Authorized ASIAN DEVELOPMENT BANK
APPRAISAL
Public Disclosure Authorized OF THE
RURAL SERVICES PROJECT
IN
SOLOMON ISLANDS
(PART A OF AGRICULTURAL DEVELOPMENT PROJECT) Public Disclosure Authorized
September 1983 Public Disclosure Authorized CUIRRN(;Y Mr1!TVAL.t*rTS (Af. of Ir) Atuguett, 1983)
Currency Unit - Solomon Telands Dollar (SI$O SE$1.0o - US$0.83 1is$l . nn - IST1.2Q
For purposes of calculation in this Report, a rate of US$1.00 to ST81.15 has been used.
The Solomon Islands Dollar was introduced in 1977. The exchange rate is determined on the basis o4 a weighted basket of currencies of the major trading partners or the Solomon Islands.
ABBREVIATIONS
ATIJ - Agriculture Information IJnit AR - Afio-Rokera, Malaita Province CFO - Chief Field Officer CRO - Chief Research Officer FA - Field Assistant FTC - Farmer Training Center t.K - Hakama, Central Province JDA - International Development Association (World Bank) IFAD - International Fund for Agricultural Development W{AND - Ministry of Home Affairs and National Development MS -larau Sound, Guadalcanal Province NATI - National Agricultural Training Institute NCG - Natlonal. Coordinating Croup
NWP - Northwest Peninsula, Hakira Province PII - Prolect Implementation UJnlt RDC - Rural Development Center RH - Rendova Harbor, Western Province SC - Santa Cruz, Temotu Province SK - Susubona-Kaevanga, Santa Isabel.
-VI
N y T E
The Government's fiscal year ends on 31 December. 'I P1W,rgcr FOCUS, DFSIt(U AN) RAVt0OAL.P
Agriculture provides over 90 per cent of Solonon Islands exports, contributes 70 per cenrt to its GDP and is the source of livelihood to the 90 per cent of the covuntry'spopulatiorn that lives in rural areas. Against the t,ackgroundor a limited agricultural land base, the population is increasing at a rate of 3.4 per cent per annum; its staple foods are sweet lpotato, taro and yam, but productivity is low because technical inputs are non-existent and traditional cultural practices still prevail. As the populatUon increases, the food crop cultivation cycle decreases; thus, in the suallholder traditional farming sestem, the soil is impoverished and rural poverty is aggravated. The main source of cash earning has traditionally been copra, whose productivityin older plantations is declining at a time when the- international price of copra has been continuously falling since the peak of t979. Vithin such a framework the focus of the Project i.s on increased productivity and inconie from agricultural productionsthrough crop diversificationand intensification.
Another major constraint to development is the scattered and wides-iread location of populatloni over the country'. seven provinces which themselves are located, far apart. Trainsportation and communicationfacilities are limited and there are w-.de variatlons in culture and language, not to mention differences in agro-climatic features and soil conditions. To cope with such a situation, the Project is designed to develop appropriate infrastructuTe, with features suited to local needs in each of the seven provinces, to help the local population participate in its owE development and thereby provide the means of producing and marketing more and better fooderopsand earning additional cash income. It is the policy of the Government to decentralize its development program as expeditiously as possible; however, resources and manpower are limited nor is much experience available of implementing decentralized development programs. The Project is specificallydesigned to cope with these difficultiesand to proomote the Government's developimentstrategy, but because of the constraints,it has been kept modest in scale, its scope.including: (a) the establishmentof seven Rural DevelopmentCenters -- one in each of the seven provinces,to provide the facilitiesnecessary for stimulating the development of rural settlements/villages; (b) strengthening research in major agro-clinatic2ones on staple and new foodcrops and cash crops; (c) strengthening a-nd improvement of the training of extension personnel and farmers; (d) establishing an Agricultural Infor-mation Unit; and (e} establishing a Project Implenentation Unit in the Ministry of -HomeAffairs and National Development, the Executing Agencv for the Project.
The total cost of the Project, which will be implementedover six years, is estimated at tUS$11.65million comprising tTS95.93 million in foreign exchange cost and USS5.72 million in local cost. of this, external financing is estimated at the equivalentof ITSSln0.15million. The Bank will finance the equivalent of US$5.15 million coniprising USS2.95 million in foreign exchange cost and the equivalent of USS2.20 million in local carTency cost. IDA and IPAD will respectivelyfund the equivatent of US$3.5 million and 1.5 million. Taking the type of Project components and Its implementRtion schedule into conslderation, parallel F iiancing by the co-financiersis proposed.
The Project benefits are both non-quantifiable as well as quantifiabl.e. Benefits from Project investment in agricultural research, extension training and information, though immense, are largely of long-term nature. For selected components of the Project on which the returns are amenable to quantification, EfRR is high. A typical subsistence smallholder participating in the Project or taking advantage of Project facilities would get a net benefit of US$181 per Year. The :>roJect, which constitutes Part A of the loan for Agricultural Development (Part B being the Livestock Development Project, also to be financed by the Bank) will provlde several other benefits including additional employment, the participation of the rural population, the creation of decentralized centers for economic and social activities, the creation of an institutional base in the rural areas, and the emergence of a trained and skilled supply of manpower. The Project will thus have a multiplier effect in many fields of economic and social development.
The main risks likely to be encountered in Project implementation relate to: (a) the availability of land for siting the RDCs and other Project facilities; and (b) the implementation capacity of the Government.
The Project incorporates measures to guard against these risks. The availability cf land has been reasonably well assured except for two RDC sites where, nevertheless, given a little time, the covernment is confident of acquiring the necessary land (it is proposed to start these two RDCs in the 4th year). Consultancy services, training, fellowship, study tours, etc. have been provided in the Project to meet the risk of manpower shortages. * (~~i)
TABLE OF CONTENTS
PaYe
~4P(ii,
I. INTRODUCTION 1
II. BACKGROUND 2
A. Characteristicsof the Rural Economy 2 B. The Agricultural Sector 3 C. Marketing and Pricing of Agricultural Produce 4 D. Constraints to Agriculture Development 5 E. Agricultural Development Policy and Strategy 6 F. The Project Area 7
III. THE PROJECT 11
A. Objectives and Scope 11 B. Project Description 11 C. Cost Estimates and Financing Plan 18 D. Environmental Impact 22 E. Energy Impact 22
IV. PROJECT INPL*IlENTATION 23
A. Executing Agency 23 B. National Coordinating Group 23 C. Project Organization 23 D. ImplementationSchedule 24 E. Project ImplementationArrangements 24 F. Manpower Requirements 26 G. Procurement 27 R. Imprest Account 28 I. Account, Audits and Reports 29 J. Project Benefit Monitoring and Evaluation (PBNE) Unit 30 K. Operation and Maintenance 30
V. PROJECT JUSTIFICATION 31
A. Overall Justifi-.^ation 31 B. Benefits and Benoficiaries 31 C. Economic Analysis 33 D. Project Risks 33
VI. CONCLUSIONS AND RECOMENDATIONS 34
LIST OF APPENDIXES 37 J I I *
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I. INTRODUCTION
Concerned over the declining .productivity and income from agricultural products, the Government requested Bank's technical assistance in 1981 for a study on research, extension and support facilities. Thi7 technical assistance was approved by the Bank in Septembex 1981.- International Services for National Agricultural Research (ISNAR) from Netherlands was engaged to conduct the feasibility study which began in October 1982 and was completed in December 1982. The Bank received the final report in February 1983. In April 1982, the Government requested another technical assistance for the establishment of Rural Development Centers throughout the irntry.The Bank approved this technical assistance in July 1982.- The services of an international consuLting firm (DevelopmentAlternatives, Inc. - U.S.A.) were engaged for the conduct of a feasibility study which was completed by the consultants during March-June 1983, the draft final report being received by the Bank early in June 1983. Following the receipt of two feasibility reports (on Research, Extension and Support Facilities and Rural Development Centers) and the review by staff, a Bank Fact-Finding Mission visited Solomon Islands from 30 May - 10 June 1983 to discuss with the Government the main findings and recormmendationsemerging from two feasibility studies. Considering the nature and scope of the two projects and their implementation arrangements, it was considered desirable to combine them into a single project for further processing by che Government and the Bank.
2. At the request of the Government, an Appraisal Mission visited Solomon Islands from 3-20 July 1981. The Mission comprised Messrs. Harpal Singh (Mission Chief), Julius Ordona (Financial Analvst), Yathay Pin (Project Engineer), K. Auckland (Agronomist),John Bevan (ExtensA..i Training Specialist/Consultant),and H.M.A.B. Fernando (Agro-Processing SpecialistJConsultant). The Mission was later joined by Messrs. O.R.I. Bako (Senior Country Officer), E. Suzuki (Senior Counsel), and S.C. Jha (Manager).
3. This Report is based on a review of the consultants' feasibility reports, the Mission's findings, discussions held with concerned Government officials at various levels and field observations. The Report shows some major deviations from the project scope and the level of investment proposed in the two feasibility studies conducted under the two Bank-financed TAs mentioned earlier. The feasibility report on Agricultutal Research, Extension and Support Facilities had proposed an investment of US$9.4 million, the ConsultaTnt'S Report on the Rural Development Centers an investment of about US$11.0 million for the establishment of lI RDC6 including enlarged facilities. Taking into consideration the absorptive capacity of the Government, the nature and scope of the Project vis-a-vis implementation capability includlng manpower constraint, it was considered desirable to reduce the scope of the Project in the manner now reflected in this Report.
I/ TA No. 413-SOL for US$150,000, 14 September 1981. 2/ TA No. 470-SOL for US$200,000, 16 Jnly 1982. r I _ACKC.tOUNJR
A. Characteristics of the RuTal Econo,y
4. The country' s economy is basically rural. About 90 per cent of the ,otal population lives in villages. Although the overall density of population is low at 9 persons per sq km, the inter-provincial variations are large. Amongst the rural population, the literacy rate is very 1;,. which has made the dissemination of knowledge on agricultural husbandry very difficult. As the population is largely concentres\ted in the narrow strips along the sea-coast, cultivable land lying aloag these areas already shows signs of over-exploitation and declining fertility.
5. The rural population is distributed over 5,000 rural settlements/villageswhich on an average have a population of about 40 people. F'ifty-fourper cent of the villages are inhabited by less than 20 people each and 80 per cent by less than 50. The low density of population, the small size of rural settlements, and the sparse and scattered locations of the dwellings, have significant implications for economic development. Investment in social and economic infrastructures becomes high in relation to the number of beneficiaries. The archipelagic nature of the country, combined with the widespread dispersal of producer smallboldings, creates communication problems which have an inhibiting effect on the movement of supplies and the processing and marketing of farm produce so leading to farmers receiving lower prices for their products than would otherwise have been the case.
6. The total income of rural households comprises cash as well as non-cash components. The main sources of non-cash income are foodcrops, fish, timber and other farm, forestry and sea products. Cash income is generated mainly by copra sale. Few opportunitieslexist for cash earnings :Lnvillages. A survey conducted in 1974-19754- suggested that only 7.4 per cent of the people in rural households had received cash income from employment during the preceding 0 months. On the basis of available information, a World Bank Report- concluded that the per capita cash income in rural areas Was about one-eighth of that in urban areas. Whlen account is taken of subsistence production, the average per capita income of urban Solomon Islanders (excluding expatriates whose incomes are many times higher) is about twice the level in rural areas and there is evidence that this disparity has widened in recent years. 4 Disparity of income also exists between provinces: average cash income per household in Malaita province Was only 26 per cent of income in the
I/ G. Eele, Ilinistryof Finance, Statistics Office: "1974-75 Agric.ulturalStatistics Survey", published in 1978. 2/ World Bank, "The Solomon Islands - An Introductory Economic REort", April 1980. Western province. The difference in cash earning opportunities'can be largely explained by the variations in land availability per household for cash crop production and the distribution of foreign investment in plantatlol agriculture and timber and fish.
7. Disparities in income and employment opportunities, physical separation and cultural diversity resulted in demands for provincial autonomy. Rural people were, and still are, unaware of the development opportunities potentially available to them as they are isolated from the capital towns (central and provincial) where all major decisions are taken. In consequence, the Provincial Government Act 1981 was enacted to devolve certain powers and responsibilities from the Central to the Provincial Governments and at the same time strengthening the powers of the provincial executive relative to the provincial assembly. A certain degree of ambiguity however remains concerning the division of functions between the Central and Provincial governments. The extension service comprising the staff recruited and paid by the provinces as well as officers seconded by the Center has now come under the authority of provincial governments. This has given rise to fears in some and expectations in others. The provincializationof the extension service has implications for the organization of suitable in-service and pre-service training, the coordination of research and extension work and the organization of effective communication flows both between the central officers in-charge of extension and the provincial extension staff and the smallholdersand the extension staff within each provlnce.
B. The Agricultural Sector
8. Agriculture, including forestry, fishery and livestock, accounts for 70 per cent of the GDP, over 90 per cent of exports, and provides one-third of total paid employment. A vast tract of land is under forest and cultivable land is limited. The average farm unit per household consists of 0.15 to 0.25 ha of food garden and 1.5 to 2.0 ha of coconut plantations. Subsistence food production, mainly of the root crops, sweet potatoes (Kumara), taro and yam, forming the staple diet, and some vegetables, is based essentially on a system of shifting agriculture or agriculture with bush fallow. The total garden area Is estimated at about 7,000 hectares. Under the pressure of population increase (3.4 per cent per annum\1and the need to earn some cash income, the cycle of the fallow period- is being shortened leading to soil J depletion and reduced yields though the latter is also attributable to traditional cultural practices, non-adoption of improved crop varieties and non-application of technical inputs. Considerable scope clearly exists to enhance food production, nutrition and income through the application of technological improvements.
I/ The inter-crop fallow period which was earlier 15-20 years is reported to have been shortened to 5-10 years. There is evidence in many areas that under pressure of population, the smallholders are resorting to almost continuous cropping. -4-
9. SSmallholdercash crop productionis primarilyof coconut,but this is being gradaallysupplemented by cocoas Of the total area of 52,000 hectares under coconut, about 38,000 hectares are of smallhol.ders.Plantations,, generally along the littoralrarely, extend more thank four to tive km inland; trees on the approximately 11,000 heetarer3planted or replanted dfiring1965-1977 under various subsidy schemes are relatively yourig with promiise of higher output. Elsewhere trees are rather old and low yielding. According to a 1974/75survey, over 65 per cent of all rural households were involved in coconut growing. Total production of copra on smallholderplantations is estimatedat 46,000 tons. CoconIutis riotcnly a source of cash income but also of food. Of the total coconutproducticn, about 30 per cent is self-consumed,50 per cent is exportedand the remaining20 per cent, neither consumednor made inta copra, is probablygoing to waste due to lack of satisfactoryharvesting, marketing and procesBingfacilities. 10. Smallholdersaccount for about 70 per cent of the total export of copra and to most of them, copra sale is the only source of cash income. Static outputcoupled with consistentlydeclining prices, have led to a significantfall in the cash income of smallholderhouseholds in recent years. Increasing population and falling income have exacerbatedthe hardshipsof smallholderswho in consequence,migrate in increasingnumbers to Honiaraand other smallerurban centers. I1. Having assessed the price prospects for coconoitand the potentialfor other crops and primaryproducts, the Governmentachieved commendable diversificationof exports during the last decade; in consequence,the share of copra in total exports declined from 93 per cent in 1965 to only 14,.3per cent in 1982. Fish, timber,palm oil and rice, on the other hand, grew from almost zero to about four-fifthof the total. This diversificationdid not, however, significantlyhelp smallholderswho scarcelyparticipated in the expansionof timber,palm oil, fish and rice production,commercial plantations accounting for the bulk of timber,estates for palm oil and rice while local involvementin fishingis limited. However,as the unit value index,not only of copra but also of timber logs, palm oil and to a less extent fish, declined after peaking in 1979, the benefitsof the otherwisecommendable export diversificationwere limited; diversificationwas unfortunately achieved within too limited a range of products. Hence, even the benefits of export diversification did not reach the smallholder.
C. Marketing and Pricing of Agricultural Produce
12. Most of the food produced by smallbolders does not travel far from the garden where it originates. Some is exchanged within kinship groups, some bartered locally or sold at local markets. About 30 per cent of total coconut production is consumed within the family, the rest (excluding the unharvested waste), after being dried into copra, is transported by road or canoe to collection points for reshipment and export. Under the Copra Board Ordinance (1953), the Copra Board was set -5-
up to: (i) secure the most favorable arrangement for the purchase, grading, export and selling of copra produced; (iU) purchase such copra and sell or export the same; and (iii) assist in the development of copra and coconut products for the overall economic benefit. Specific powers of the Board include: (a) fixing of prices to be paid from time to time to producers; (b) purchase of copra directly or through an agent; (c) selling of copra including marketing, cleaning, storing for export, shipping, etc.; and (d) appointment of agents for the purchase, storage and export of copra on behalf of the Board. Its main function is to reduce fluctuationsitin producer price by smoothing out the variations in export price- by building reserves when export prices realizationsare high and liquidatingthat reserve to supplementthe price received by the producer when export price is low (Appendix 1, Table 1). The Board thus helps to cutshtionthe indigenous producer against wild fluctuations in the world price of copra.
13. From February 1980, the Board has been implementinS a freight equalization policy by compensating for the transport cost from different zones into which the country has been divided for the purpose. A Government Bill, scheduled for early introduction into Parliament, proposes to widen the Board's scope to include all commodities and to redesignate it as the Commodity Board. Except for copra and cattle, there is at present no fixing of agricultural commodity prices which are left to settle solely by iarket forces. The urban population being small and largely concentrated at Honiara (the national capital), markets within the country for crops other than copra are in any case small, isolated and unorganized and both producers and consumers suffer from the consequent wide variations in product prices; improvement in the market structure is much required.
14. General agricultural price policies are discussed in Appendix 2. In Appendix 1, Table 1, export prices of copra during 1971-81, shows that prices, which were high in 1974, fell to a very low level in 1975, but then rose to reach a peak in 1979. In 1980, the price was 35 per cent and in 1981 43 per cent lower than in 1979. In 1982, the prices fell a further 16 per cent below the already low level of 1981. In the second quarter of 1983 copra prices have, however, shown a trend of recovery. According to the latest World Bank projections (Appendix 1, Table 2 - June 1983), price prospects of copra in the long-run are good.
D. Constraints to Agriculture DevelopZent
15. 'While there is need to increase fooderop output in the subsistence sector by at least 3.4 per cent per annum to match the population growth rate, research information is lacking on improved seed varieties for different foodcrops that might be used to upgrade cultivation in the various agro-climatic regions/provinces. Similarly,
1/ Ministry of Home Affairs and National Development, Honiara, Solomon Islands, "Coconut Workshop", December 1981. .there is a lack of tn forinatlon at pne.kuges of improved cultural. prnetfcen necesma,ry for realiLing optimum yields and maximum benefits frot different foodcrops. Thus, a strengthenedand well organized researcheffort on foodcTopsin the main agro-clUmaticregions is needed to generatethe location specific informationon foodcropcultivation that could help tap the vast unutilized yield potential known to exist in varlouscrops. 16. Research on coconut and cocoa is largelybeing conductedin the private corporate sector with assistancefrom Government. With world copra prlces depressedslnce 1979, a need exists to diversifythe productionof low-volumehigh unit-valuecash crops to offset high transportationcosts. Though, crop, such as ginger,chillies, cardamom, coffee,turmeric, would seen to have good prospects,research on them Is negligtbl.eand confinedto a single locationwhen, in fact, researchon such alternativecrops should equallybe pursued in other agro-climatic regionsas well. 17. Research on food and cash crops must be strengthenedif smallholder farm production goals are to be realized, Inadequate extension support limits the disseminationof research findings. At field level, the extension service (consistingof Field and Village Assistants) is extrem.ly weak both in terms of numbers and training. There is no regular system to ensure the flow of information from researchto extensionand of feedbackfrom farmersto research. There is an urgent need to upgrade and Improve the training of the field extensionagency, to provide it with better amenities, such as housing and equipment,and to arrange for the efficient flow of information among researchworkers, extension agents and smallholders. 18. Developmentis often restrainedby the factor of tocation. The provinces,being located widely, and the populationper village being sparse,the volume of crop productionis small causingdiseconomy of scale in collection,processing, grading, and marketingof produce. Diseconomiesare also involved in the distribution,transport, storage and sale of inputs, i.e., seed, plantingtaterials, insecticides, etc. This justifies the need to develop nodally situated, multi-facility growth cettereto meet the production,consumption 9 educationand skill trainingneeds of smallholderseffectively. F. AgricilturalDevelopment Policy and Strategy 19. To overcome the developmentconstraints of the past, the Governmenthas adopted the strategy of establishing the required infrastructurein the rural areas. The main thrust is on strengthening the productionbase, through increasedand diversifiedproduction, and product and market diversification.Agricultural extension is to be upgraded so that knowledge of better seeds, crops, fertilizer and planting materials may be disseminated. In addltion, training facilitieswill be provided to improve farmers'and fisherm.en'sskills 7
and expertise. The strategy also calls 2or the devolution of power and functions to the provincial governments and the development of improved marketing infrastructure. In the subsistence sector, it calls for more research to identify foodcrops for development and to extend knowledge about them to producers, as well as for the organization of interisland trade with appropriate rural markets. More information on imnroved cultivation pr6ctices is to be generai.edon a variety of new crops and extended to producers. This will require better processing, shipping, marketing and quality control. The production program is, be supported by construction/improvementsof rural roads and markets,
20. The Government, however, finds it difficult to implement the 1981 ag-iL..!lturaland rural development policy and program of action. In constant prices, while the recurrent expenditure of the Government has grown by 14 per cent during 1979-82 (most of it between 1981 and 1982 when the economy as a whole did not grow at all), development expendiPre has fallen by 33 per cent in real terms in the same period.- There has been a significant rise in the salaries and other benefits of personnel. On the other hand, overseas cash aid for development, paricularly from UK, the principal donor, declined sharply from about US$9 million in 1978 to less than US$5 million in 1981.- Irresistible pressure from increased recurrent expenditure, declining foreign aid, and reduced earnings from export duties particularly since 1979, have compelled the Government to launch the agricultural development program on a much reduced scale and in a phased manner. The proposed Project is in line with the Government's strategy and is accorded high investment priority.
F. The Project Area
21. Of the major components of the Project, i.e., (i) Rural Development Centers (RDCs); (ii) Agricultural Research; (iii) Extension; and (iv) Agriculture Information, the Last three will serve the country as a whole with long-term benefits. Therefore, the description of the Project area, as normally provided, is not relevant here. However, since each of the seven proposed RDCs will have its primary area of influence (though its benefits will nrt remain confined to this primary area), some description of main characteristics of the site vicinities is appropriate. The location of seven RDCs is shown in the map attached.
1. Marau Sound (GuadalcanalProvince)
22. Marau Sound is located in the southeast of Guadalcanal Province about 90 km from Honiara, the capital, by sea. The area to be
1/ Government of Solomon Islands, "Programme of Action 1981-84", Nov. 1981 and "National Economic Development Policy", Dec. 1981. 2/ Central Bank of Solomon Islands, "Annual Report 1982", p. 11. 3/ Government of Solomon Islands - Ministry of Finance, 1982 StatisticalYear Book. -8-
covered by the RDC extends from the village of Msrau west along the "weather coast'. Agriculture is confined to the narrow coastal belt and inland for short distances along river valleys. The soils in the area are sandy with low productivity. Heavy rains give rise to frequent flooding.
23. Copra, psoduced by smallholders and several scattered plantations, is the main product of the area. Marketing problems arise from lack of transport and storage facilities. ltaaddition to the usual garden foodstuffs, spices such as turmeric, ginger and vanilla are currently being tested; with markets available, they could prove to be an alternative cash crop.
24. The area along the coastal belt and the inland waterways has a high population, with about 4,000 people in the area to be covered by RDC. The main obstacles to smallholder development are mark-etaccess, storage facilities, knowledge of Improved coconut production and improved food and cash crops. Population pressure on available land is high. Scope exists for rural industries and fishing.
2. Northwest Peninsula (Makira Province)
25. The Northwest Peninsula is at the extreme northwest of Makire Island close to two agricultural opportunity areas mieasuring17,000 ha, 90 per cent of which is at present unused. Cattle, cocoa and coconut development projects are being promoted and financed by the Development Bank of Solomon Islands (DBSI).
26. The population of the Northwest Peninsula is estimated at 3,250. Most villages are along the coast, west and northwest of Arosi plateau. Although Interisland shipping reaches the site, smallholders complain that their copra often gets spoiled waiting for ships to arrive. The area needs a road to connect the agricultural potential areas to the wharf which itself needs reconstruction, storage and market points, training and better extension on food and cash crop improvement.
3. Afio-Rokera (Malaita Province)
27. Afio-Rokera, population 4,375, is located In the south of Malaita, the most densely populated province, and is the site of Rokera Agricultural Opportunity Area covering 2,800 ha of land.
28. The regions of high population density are along the coast. Copra production and marketing suffer from irregular shipping schedules. Lack of operational support for extension service, the need to improve marketing and shipping, and the desirability of integrating agricultural opportunity and high population areas are among the major problems and concerns of both smallholders and provincial officers. The Provincial government ownes 114 ha of land under perpetual lease. - 9 -
4. Rendova Harbor (Western Province)
29. Rendova Harbor site is proposed to be located at the northwest tip of Rendova Island, south of Munda in the New Georgia Island Group. The topographicalfeatures are characterized by coastal plains, alluvial deposits, raised coral terraces and steep dissected hills. The Provincial Government has recently acquired a 666 ha plantation producing coconut and cocoa and raising,cattle with the intention of making it a focal point for agricultaral developmeat and training, tak_..gadvantage of its central locatAon and the representative land system. The natural harbor has two wharves which, though functional, need repair. At the plantation, some housing and other social and economic infrastructure have already been built. The Provincial administration has recognized the potential of the site for addressing smallholder concerns such as low coconut production, the fragile balance between food and cash crops, training and plantation rehabilitation.
5. Hakama (Central Island Province)
30. Hakama is located in Ngella Pile (Small Gella) on the Mboli passage. Since soils are shallow, crop production would be limited to shallow rooted crops. Land under coconut is scarce and production very low. Both coconuts and foodcrops are produc'-don steep hills.
31. The population of Small Gella, estimated at 3,000, relies on small urban centers such as Tulagi anel Honiara to provide employment. Most of the wood canoes built by local villagers are m keted In these centers. The Provincial Government has a small agricultural training center at Hakama. The existing natural resources and activities as carried out by the smallholder disclose a serious need to improve the quality and variety of gardens; to introduce high fibre protein components into their diet; to teach them skills useful in their small industries; to provide seed material for cash crops; and to develop basic infrastructureto promote marketing and improve shipping.
6. Susubona-Kaevanga(Isabel Province)
32. Situated between Susubona village and the mid-portion of the Octega Channel on the southern coast of Isabel Island, the site comprises three minor development areas (Susubona, Kaipito and Kosisi) covering 5,400 ha of land of low soil fertility. Agricultural development in Kaipito has been greatly stimulated by the road from Kaevanga to Kolomola. Coconut paddocks, cattle and cocoa development projects, peanuts and orange provide income to the smallholder population living along the road.
33. The population of the Susubona-Kaevangaregion is estimated at 975; its distribution is uneven with low overall density. Two wharves, both in need of extensive repa:.r,serve the areas. Shipping services are erratic creating problems for smallholders producing copra. Considering the size of the area to be benefited, the extension support will be thin and inadequate. -10-
7. Santa Cruz - Reef islands (Temotu Province)
34. TelnotuProvince contains a number of well separated islands of varying size. The proposed site contains the Graciosa Bay Agricultural Opportunity Area covering close to about 18,300 ha of potentially medium to good land. Agricultural activity ia mostly in the coastal plains. Coconut production is low. Smallholders' food gardens mainly grow root crops. The population to be served by the Project on Reef Islands number about 3,000. Overall, the relative isolation of the islands in Temotu Province creates a serious transportationand logistical problems that will affect the exploitation of development opportunities. There is a seed garden and a research substation is being established at the site. - 11.-
111. THE PROJECT
AL. Objectives and Scope
35. The broad objectives of the Project are twofold: (i) to provide the rural people with the opportunity of effectively exploiting available land and human resources in the pursuit of increased productivity and income and improved standards of living; and (ii) to develop and expand Government's capability to provide agricultural support services and facilities over a vider area. Within the above objectives, the project aims (a) to generate and extend information concerning the diversification of food and cash crop systems and to increase production through a mix of services and inputs; and (b) to create centers of activity which will help market, process, store and transport produce, to train local people in improved techniques of agricultural production and to assist the.n to take up allied agro-industry activities. Further, the PToject will provide an institutional base facilitating smallholder participation in local development.
36. To meet the above objectives, the Project scope will broadly constitute: (i) establishment of seven Rural Development Centers and their proper equipping with necessary services and facilities; (ii) the establishment of research, extension, information and training facilities; and (iii) the provision of facilities and services for project implementation.The details of the Project scope are as follows:
B. Project Description
37. The facilities to be developed under various Project components are described in the following paragprahs.
1. Rural Development Centers
38. The Project will provide for the establishment and equipping of seven Rural Development Centers (RDCs) with one RDC in each of the seven provinces of the country. These will act as growth centers or growth foci in the respective rural areas helping to stimulate the multi-faceted development of the neighborhood villages. The selection of sites for establishiag RDCs has been based inter alia on (a) the availability of land for developing site facilities as well as agricultural demonstratlon plots, etc.; (b) the presence of a concentrated smallholders population able to take advantage of the RDC; (c) potential for future development; and (d) availability or otherwise of complementary infrastructure - existing and planned. In the selection of sites as well as of facilities to be provided, the officers of the provincial governments, village chiefs and other village people were consulted. It is, however, desirable to retain a degree of flexibility on the actual siting of SDCs and the provision of various - 12 - inrtriotrtLeturesand faciLitiee to nllow modOficationsto be made as the Project proceeds. The exact sites of RDCe will, where necessary,be reconfirmedby the Governmentin consultationwith the Bank. Given such fLexibility, the Project provides for the siting of RDCs at the followingplaces:
RendovaHarbor .n WesternProvince Marau Sound in G2adalcanalProvince Afio-Rokerain Malaita Province NorthwestPeninsula in Makira Province Santa Cruz in Temotu Province Susubona-Kaevangain Isabel Province Hakama in CentralProvince. 39. The RendovaHarbor RDC wil'.also have a Fanmer TrainingCenter (FTC) relocatedfrom its present site at Barakoma,under the extension componentof the Project. The RDC at Santa Cruz will also complement and strengthenthe activitiesof a coconut seed garden and a research sub-stationwhich it is proposed to set-up under the researchcomponent of the Project. 40. The Projectwill provide at a centralplace at each RDCs such facilities as housing, internal roads and sheds, classrooms, dormitories,demonstration farm plots, stores,machinery, equipment for trainingsmallholders and extensionstaff, office with furniture,radio for communications,canoe and tractors. The site-specificfacilities that the Project will finance, are given in Appendix 3. A brief description of the facilities grouped under different categories accordingto impact follows:
(a) Production,Processing and MarketingFacilities 41. To expand the smallholdersproduction base and to facilitate the processingand marketing of produce available in differentplaces around the Centers, the Project will encompassvarious facilitiesfor demonstratingimproved techniques of production and processing and providingfacilities to the smallholders,for marketing,storage, drying and fermenting,shipment, etc. Some infrastructureunder this component will address itself to training and imparting skills in non-farm occupationssuch as small rural industries,engine repairs, wood work, saw milling,boat construction,etc. 42. The followingspecific facilities will be provided under this sub-component:
(i) constructionof storagefacilities at Marau Sound and Northwest Peninsula; and developmentof market and collectionpoints; - 13 -
(11) lnisteIat:ion of coprn dIryers, cocoa dryers and fermenters at Rendova Hiarbor, Afio-Rokera, Santa Cruz sad Subuwova- Kaevanga;
(iii) provision of tractors with trailers at six RDCs i.e, Rendova Harbor, Marau Sound, Afio-Rokera, Northwest Pen.insula, Santa Cruz and Susubona-Kaevanga and of sail boats only where necessary such as at Afio-Rokera and Marau Sound;
(iv) rehabilitation of a provincial plantation of about 80 ha at Rendova Harbor to yield more production and income,
(v) provision of portable saw mills at Rendova Harbor, Afio Rokera, Northwest Peninsula, Santa Cruz and Susubona- Kaevanga; and
(vi) construction of appropriate technology centers at Marau Sound, Santa Cruz and Hakama with facilities for repair and skill training in various rural crafts and artisanal trades.
(b) Transport Infrastructure
43. Transport -- both by land and sea -- constitutes a serious bottleneck to the full exploitation of the Agricultural Opportunity Areas, the collection and transport of copra and the supply of improved plants and seeds and dissemination of extension and infonnation. The Project will provide the following facilities:
I) construction of a road 4 m wide at Northwest Peninsula (18 kis) and at Susubona (6 kms);
(ii) rehabilitation of existing wharves at Rendova Harbor, Afio-Rokera and Susubona-Kaevanga, and construction of new wharves at Northwest Peninsula and Hakama; and
(iii) provision of a rubber wheel Bulldozer for the maintenance of the coastal road at Marau Sound.
(c) Training and Consultancy
44. The Project provides for necessary consultancy and training for supporting its RDC component. Short-term consultancy of 10 mammonthb in the fields of village arts and crafts and community organizations, etc. will be funded by the Project.
45. In addition to the above, other suitable activities may also be undertaken within the framework of the overall objectives of the Projects. As can be seen from Appendix 3, however, all the above cited activities are not being undertaken at all the seven RDCs. - 14 -
(d) Apolication of Appropriate Technology
46. The three RDCs at Marau Sound, Santa Cruz, and Hakama, which will provide training courses and facilities on appropriate technology application, will be staffed by skill training specialists and will. provide workshop facilities 80 as to help villagers to acquire skills in carpentry, mechanics and related fields that will tontribute to increased productivity in the villages. Other possible skills might be the development of water supply and sewage systems, building kionstruction,fabrication of furniture and farm equipment, and repair of small engines and other equipment.
47. The "Appropriate Technology" to be tried by the RIDC will include ideas and methods designed to develop creative technical skills that will fit into the village environment harmoniously. Emphasis will thus be placed on the use of water, solar and wind power (in sailboats) as sources of energy for encouraging the maximum use of locally available inputs, and contributing to the enhanced economic capacity of the villages.
2. Agricultural Research and Extension
(a) Agricultural Research
48. The Government's agricultural research activities have been centered at Dodo Creek Research complex and its field experiment station at Tena-ruin Guadalcanal Province, since 1975. The research prograns, organized by disciplines (soil science, agronomy, pathology, entomology, plan breeding) across crops, has been directed mainly at the genetic improvement of the staple root crops, the control of pests and diseases in food and cash crops and the investigation of nutrTientinputs required for optimum growth and production of food crops.
49. The following significant gaps in agricultural research remain however:
(i) the failure to undertake research on whole farming systems and the dearth of socio-economic base-line data on smallholder production systems within the different provinces of Solomon Islands;
(ii) the lack of multilocational adaptive research in agro-climatic environments other than the Guadalcanal plains;
(iii) the neglect of research into crop diversification and the economics of new crop production; and
(iv) the lack of a dynamic agricultural research policy for Solomon Islands. - 15 -
50. tNotwithst&ndingthese gape, the ongoing agricultural research program is basically sound and warrants support to increase its capability of makling an effective, contribution to the agricultural development of Solomon Islands.- The Project, which has been fonmulated to achieve this,end, thus provides for:
(1) improvement and expansion of the research facilitiesat Dodo Creek Research Station and Tenaru Pield Experiment Stations; and establishment of four adequately equipped and well managed research sub-stations sited in differing agro-clityticenvironments outside the Guadalcanal plains;-
(ii) consultancy services of an Agricultural Economist (36 manmonths), a Foodcrop Agronomist (36 mannouths), and in various specialized disciplines (for about 9 man- months); and
(iii) provision of overseas staff study tours and conference attendance (10 man-months) and inter-island travel.
5I. The agricultural research component will also include: (a) the provision of new offices, laboratories,a libTary, a workshop, resthouse for visiting agricultural research scientists, staff and laborers' houses etc.
(b) Agricultural Extension
52. Traditionally, eltension services in Solomon Islands bave been target-oriented and have promoted the development of individual cash crops usually by a coiibirationof grants and subsidies. Often, these have taken the form of subsidized or free planting materials and/or fertilizers. Emphasis has also been placed on individual crops as against the whole faramingsystem. Many of the present staff of the extension service have been poorly trained within a system which over-emphasized the specific crop and target approach. It wiLl not therefore be easy for them to change their approach and develop a new focus viewing the farming system as a whole within which specific components can be streesed at any particular time. In addition, the recent devolution of reBponsibility for extension work on the provinces emphasized the need to expand and improve training facilities for the extension staff and at the Farmer Training Centers. Further, the extremely poor housing and demonstration equipment available to the extension personnel has produced a feeling of frustration in the service whose present training, Morale and logistic support is inadequate to
I1 See Appendix 4 for present status of research and rationale for strengtheningand expansion. 2/ See Appendix 4, Chart 2 for details of the location of research and sub-research stations and the soil cLimatic characteristicsof the locations. - 16 -
enable It to successfully undertake the tasks involved in improving the produiction,income and standard of living of a smatlholder population spread thinly throughout the country.
53. lTo reaLi.e the objective of providing better traixning facilities relating to the new focus on farm systems, including even livestock, and to improve the conditions of living and work, the Project will provide for the following components: (Detairs of rationale, existing set-up, constraints, components and NATI are given in Appendix 5).
(a) Establishment of a National Agricultural Training Institute (NATI) at Dala (Malaita Province)
54. The Project will establish the National Agricultural Training Institute (NATI) at Dala in Kalaita Province and provision will be made for the establishment of a research sub-station of the Center under its research component. The provincial government already owns about 100 hectares of land under 100 years lease with 43 years still to run and renegotiable if necessary. The Project will finance:
- The construction and/or rehabiltiation of offices, 4 dormitory block for 24 trainees, a lecture room, a library, a mess block, workshops and staff houses;
- Provision of farm, office and transport equipment, and teaching materials and equipment; and
- Provision of the services of an expatriate Principal, one deputy as under study and two other teaching staff.
55. In its early years, NATI will offer (a) twd courses a year of 2 to 3 months duration providing basic pre-service training for about 40 Field Assistants/Dewonstrators; (b) 4 refresher courses per year of 2 weeks duration for 80 existing staff; and (c) 10 courses per year of l week duration for 150 advanced smallholders. Later, hovever, the aim is to provide training leading to a certificate/diploma in agriculture geared to the specific needs of the country. At present, the country has to send people to Fiji, Papua New Guinea, Australia, etc. for such courses.
(b) Relocation of a Farmer Training Center (FTC) from Barakomu to Rendova Harbor
56. Four FTCs in Solomon Islands provide both in-site and in- village training for farmers as well as for the village extension workers - the lowest extension functionary at the village level. One such FTC, at Barakoma in the 'WesternProvince, is on land whose lease expires in 1985. Since the smallholders want their land back, the existing FTC will have to be relocated. The Project will, therefore, support relocation of the FTC at Rendova Harbor where Governuent owned developed - 17 -
land of 666 ha is already available together with other facilitlel. The FeTCwill also benefit from the location of the RIOC and th ReeL3arch Sub-station proposed under the Project. Funding will include the construction of an office, a 24 bed-dormitory, a lecture room, a mess block and six staff houses; and provision of farm and teaching equipment.
(c) Provision of Facilities for Field Assistants
57. To attract people into the extension service and provide them with adequate status, particularly at village level, suitable accommodation is required for Field Assistants. In many cases, the absence of suitable accommodation in the villages has resulted in people leaving the service or in low morale among those who continue to live under difficult working conditions. The Project will, therefore, fund: (a) construction of 30 houses for Pield Assistarnts; and (b) the provision of 60 sprayers and a range of agro-chemicals to cover five years of field of demonstration.
(d) Training and Consultancy
58. The Project provides for the services of an expatriate Principal of NATI for 48 manmonths and 6 manmonths of fellowships. During this period, a local Vice PrincipaL-designate will receive on-the-job training before taking over as Principal.
3. Establishmentof an Agricultural Information Unit (AIU)
59. An Agricultural InformatiornUnit (AIU) functioned until the early 70s when, despite the continuing need for it, budgetary cutbacks caused its closure. At present, there is little linkage between research and extension, and between research and the farmers. The need is strongly felt for (a) popularized exposition of specific findings and handbook type reference materials for field extension staff and farmers; (b) development of training aids for extension and farmers; (c) expertise in programming use of radio and other media to explain and support development programs; and, of central importance, (d) expertise In producing or arranging for the production of effective public informationimateriAls. With the high rate of adult-illiteracy and the inaccessibllity of several locations/villages, it is necessary that smallholders should be approached through communication medi& such as simple posters, radio talks, etc. The specific tasks of the AIU will thus be organized into three areas: receiving essential Inputs; sharing and coordinating information within the organization; and moving the output to extension personnel, farmers and, where possible, others. The last is the area in which the AIU would be most used. The Project will support the establishment of an AIU at Honiara in the NHAND with facilities for an office, printing, transport and information processing and retrieval. - 18 -
60. The Project will provide for the services of an expstriate Agricultural Information Specialist (36 man-onths), two Infornation Assistants, overseas staff study tours and training fellowships (30 man-months) and travel.
4. Project Implementation Unit (PIU)
61. The Project, comprising the establishment and operation of Rural Development Centers, the strengtheniug of a research station and the establishment of four research s'.ib-stations.one National Agricultural Training Institute, the reloc.ationof one Farmer Training Center and the establishment of an Agricultural Lnformation Unit in a coordinated and timely marner, wiLl necessitate the establishment of a Project Implementatiori Unit (PIU). It will be headed by a local Project Director assisted by two expatriates: one Project Adviser (36 man-months) and one consultant on Engineering and Conetruction (24 man-months). Some aduministrative support will be provided to PIU including an Administrative Officer, typist/clerk, driver, transport, etc. Further details of the functions of PIU are given in Chapter IV. The Terms of Reference of all the consultants In the Project are in Appendix 6.
C. Cost Estimates and Financing Plan
1. Cost Estimates
62. The total cost of the Project is estimated at US$11.65 million equivalent of which about US$5.93 million (50.9 per cent) will be required as foreigrn exchange cost and about US$5.72 million (49.1 per cent) equivalent will be required as local currency cost. The cost estimates are sun=marized in Table 1 below. Detailed cost estimates are shown in Appendix 8. The cost estimatesare inclusiveof seTvice charge during construction on the Bank's loan and are without taxes and duties. The cost estimates are also inclusive of the maximumbalance amount of US$50,000 to be recovered from the technical assistance of US$200,000 provided by the BayY. The exact amount would be determined after final accounts are made.-
1/ Loan Agreement, Schedule 4, para 7. - 19 -
Table Its Suuaraitet Cost tInates (US$'000)
Foreign Local Per Cent I______t. a n Exchanme Curretncy Total of Total
A,. Rural Develo'nnt Center
1. Center facilities 513 784 1,297 11.1 2. Production, procesBing and warketing 204 59 263 2.3 - 3. Transport infrastructures 163 276 439 3.8 4. Training asd consultancy 285 204 489 4.2 5. Operating costs 305 545 850 7.3 Subtotal (A) 1,470 1,868 3,338 28.7
B. Research and Extension 1. Research stations 394 413 807 6.9 2. Farmers' training center 71 79 150 1.3 3, Field Assistants' housing 118 168 286 2.4 4. National Agricultural Training Institute 135 163. 298 2.6 5. Training and consultancy 927 102 1,029 8.8 6. Operating costs 336 591 927 8.0 Subtotal (B) 1.981 1,516 3,497 30.0 C. Agricultural Information U'nit i. Civil works and equipment 42 34 76 0.7 2. Training and consultancy 291 32 323 2.8 3. Operating costs 55 87 142 1.2 Subtotal (C) 388 153 541 4.7 D. Project Inplementation Unit 1. Equipment 45 5 50 0.4 2. Consultancy 561 139 700 6.0 3. Operating costs 70 210 280 2.4 Subtotal (D) 676 354 1S,030 8.8
Tctal Base Cost (A + B + C 4 D) 4,515 3,891 8,406 72.2 Physical Contingency a/ 284 490 774 6.6 Price Escalation b/ 931 1,339 2,270 19.5 Service Charge during Construction 150 - ISO 1.3 Recovery of part cost of Preparatory Technical Assistance c/ SO 5 0.4 Total Project Cost 53930 5,720 11.650 100.0
aI/ Physical contingencies are calculated at 15 per cent of civil works and staff costs, and 10 per cent of equipment and other recurrent costs. b/ Price escalatioxnis calculated at 8.0 per cent for 1983, 7.5 per cent for 1984, 7.0 per cent for 1985 and 6.0 per cent per annum thereafter for foreign exchange costs; and at 8.0 per cent pet annum for 1983 and 1984, and 6.0 per cent per annum thereafter for local currency costs. cJ Represents an allowance for naxiramuanount recoverable pending establishment of actual cost incurred. 20
2. ProposedFinancin an 63. The packagingof financingarrangementi is given in Table 2. Tn the light of the nature of the Project wherein the differentmajor cotlponentr4,i.e. RTCs, AgriculturalResearch, NAT!, FTC,ATU, etc. are (thoughIntegrated) to be independentlyimplomented, it is proposedthat parallel financingarrangerm-ents be made with IDA and IFAD. In view, however,of the integratednature of the variouscomponents, it would be desirableto ensure that funds from the no-financiersbecome available irntlme. Governmenthas given an aosurancethat it would make other arrangementsto commit necessary funds lp/ case of unavailabilityor delays of funds froa other co-financiers.- Taking the preferenceof co-financiersinto consideration,the financingarranL-ments will be on the followinglines: IDA: Establishmentand equippingof ResearchStation and four ResearchSub-Stations, establishment of an AgriculturalInformation Unit, and construction and equippingof residentialaccommodation for Field Assistants(Extension). 1FAD:Establishmentand equippingof the NationalAgricultural .5raininghnstitute (WATI) and the relocationof the ?armerTraining Center (FTC) from Barak.omato Rendova Harborin WesternProvince.
1/ loan Agreemiient,Schedule 8, Para 22. - 21 -
'I'abLe 2. Proposed Financing Plan (US$ million)
ADB IDA IFAD Gov't. Total
A, Rural Development Centers Foreign exchange 2.12 2.12 Local currency 1.90 0.98 2.88 Subtotal 4.02 0.98 5.00
B. Agricultural Research and Extension 1. Research Foreign exchange 1.44 1.44 Local currency 1.06 0.13 1.19 Subtotal 2.50 0.13 2.63 2. National Agricultural Training Institute Foreign exchange 0.80 - 0.80 Local currency 0.47 0.12 0.59 Subtotal 1.27 0.12 1.39 3. Farmers' Training Center Foreign exchange 0.12 - 0.12 Local currency 0.11 0.03 0.14 Subtotal 0.23 0.03 0.26 4. Field Assistants' Housing Foreign exchange 0.15 - 0.15 Local currency 0.21 0.02 0.23 Subtotal 0.36 0.02 0.38
C. Agricultural Information Unit Foreign exchange 0.47 - 0.47 Local currency 0.17 0.04 0.21 Subtotal 0.64 0.04 0.68
D. Project ImplementationUnit Foreign exchange 0.83 0.83 Local currency 0.30 0.18 0.48 Subtotal 1.13 0.18 1.31 Total Foreign exchange 2.95 2.06 0.92 5.94 Local currency 2.20 1.44 0.58 1.50 5.72 Total 5.1' 3.50 1.50 1.50 11.65
Per cent of total 44.20 30.00 12.90 12.90 100.00 - 2a -
D. EnvironmentalImpact 64. Althoughthe countryhas a very low populationdensity, most settlementis concentratedin coastalareas where, in consequence,there is some evidence of over-use of soll and depletion of its nutrient contents. The present smallholderfarming practice, including that followed in tree-crops plantationsand food gardens under shifting cultivation,has resulted in poor land management in certain places. The Project,with its componentsof agriculturalresearch, extension, agriculturalinformation, and Rural DevelopmentCenters should help to developand disseminateinformation to smallholderson the whys and hows of maintainingsoil cover and fertility,and of adoptingcrop rotations and farming systems that replenish soil fertility and improve soil profile. The adoptionof nutritiveleguminous and green vegetablesby smallholdezswill improve the nutritive value of Solomon Islanders' diets, thus promotingthe health and well being of old and young alike. The Project should certainly have a beneficial effect on the environment. E. EnergyImpact 65. The energyrequirements of the Projectwill includethat used during the conszructlonphase and needed to operateand maintainProject facilities. It is estimated that during the Project implementation period (year 1-6) about 6.3 GWh will be required or an equivalentof 3.800 bbl of petroleum fuel. From year 7 onwards the operationof Project facilitieswill require about 1.0 GWh per year. The energy output of the Projectwill be in the form of the calorificcontent of the incrementalagricultural production. Starting in year 11 it is estimated that the amount of incrementalproduction due to better varietiesof sweet potato and taro will begin to be realized,resulting in a positivenet energybalance every year thereafter. -23-
TV. PROJECT IMPLEMENTATION
A. Executing Agency
66. The Ministry of Home Affairs and National Development (MHAND) will be the overall Executing Agency for the implementation of the Project.l/ The organizational chart of the Ministry is given in Appendix 9.
B. National Coordinating Group (NCG>
67. As the Project includes coaponents necessitating the coordination of more than one agency such as the ministries of Finance and Transport, Conmunications and Government utilities, the National Planning,Office,Provincial Ministries, the Copra Board, etc. as well as cooperation from the land owners of Project sites for its efficient implementation, a Natinal Coordinating Group (NCG), chaired by the Permanent Secretary, MHAND, will be set up at central level.2/ The Project Director who will head the Project Implementation Unit (PtU) will be the ex-officio Secretary of the NCG responsible for raising issues for debate and resolution. The Group will coordinate the activities of both this and the parallel Project on Livestock Development though separate sub-committeeswill be established for each Project under the Chairmanship of the Permanent Secretary, MHAND, to st.etain the interest and active participation of those concerned.31 Major policy and operational guidelines for Project execution will be initiated and monitored by the NCG.
C. Project Organization (PIU)
1. Project ImplementationUnit
68. PIU will be set up ia. the MHAND on a full-time basis to plan, implement and supervise the different activities and components of the Project in a coordinated and timely manner. It will be headed by a Project Director who will be a senior local officer with experience in the management of multi-component development projects, involving coordinationboth with different agencies and with the provinces.4/ As the Project includes provincial inputs and coordination with provincial secretaries, it is considered necessary that the Project Director be recruited in Level 10 5/ of the salary scales. The Project Director will report to the Permanent Secretary, MHAND, and will be responsible for the planning, coordination and implementation of th Project.6/ The
I/ Loan Agreement, Schedule 8, para 1. 2/ Loan Agreement, Schedule 8, para 1. 3/ Loan Agreement, Schedul.e8, para 2. 4/ Loan Agreement, Schedule 8, para 3. 5/ The salary scales in Solomon Islands are divided into different levels beginning from Level 1 to Level 11. Level 10 is the salary scale generally held by Under Secretaries to Ministries and Provincial Secretaries. Permanent Secretaries are in the L-11 or super scale. 6/ Loan Agreement, Schedule 8, para 4. -24-
job requirements and qualifications of the Project Director are given at Appendix 7.
69. The organizational chart of the PIU is given at Appendix 10. The Project Director will be assited by two expatriates -- one Project Adviser for overall Project management with experience of directly managing rural development projects and one consultant on engineering and construction.l/ In addition, the PiU will have its own nucleus administrative support staff comprising one procurement officer, one administrativeofficer and four supporting staff, typists, driver, etc.
D. ImplementationSchedule
70. The Project will be implemented over a period of six years from the date of loan effectiveness. The first six months will be spent on the establishment of PIU (recruitmentof the Project Director and PIU Staff), recruitment of Project consultants inlcuding the Project Advisor and the Engineering and Construction Consultants and initiation of the PBME baseline survey. The training of PIU staff, preparation of tender documents for procurement, procurement of equipment and supplies in consuLtation with the provincial governmetns, will be undertaken during the preparatory stage. All construction activities planned for the same site, such as the construction of the research substation and RDC in Santa Cruz, will be coordinated during the same construction period. The phasing and implementation schedule of the various components are given in Appendix 11.
E. Project ImplementationArrangements
1. Rural Development Centers (RDCs)
71. For the first two years, the Project Director, with the assistance of the expatriate Project Adviser, should be able to supervise the establishment of two RDCs. In the third year, as the number of EDCs to be established and operated increases, a manager of RDCs will be appointed to look after the RDC component. Work on the establishment of the first RDC at Rendova Harbor will begin at the beginning of the second year. Work on the Susubona Kaesanga and Hakama RDCs is scheduled to start In the fourth year to allow sufficient time for processing land acquisition. The RDC at Santa Cruz in Temotu Province will also be initiated at the beginning of the fourth year as the site is far from Hioniaraand the Government believes that experience gained overtime is needed before its establishment should start. In view of the island's wide dispersal, a period of about two to three years is considered necessary to complete the construction and equipping of each RDC. Availability of Land with the Goverment for the siting of RDC facilities either owned or acquired under long term lease is reasonably well assured at five out of seven sites proposed for establishing RDCs. In the remaining two sites, i.e., at Susubona-Kaevanga and Hakama, the provincial governments assured that the land for the site would be acquired though it may take sometime before all the formalities are completed. The RDCs at these two sites will thus be established later in the fourth year of the Project.
I/ Loan Agreenent, Schedule 8, para 5. -25-
Government has undertaken to ensure that the required land will be made tivail;alhte,before the start of constrnction. free from any impediment.l/ The exact sites of RDCs wilL, where necessary, be reconfirmed in consultation with the Bank.
72. The input of provincial government in regard to the siting and operation of the RDCs is regarded as crucial. At provincial level, the provincial Secretary will, enlist and coordinate the support and involvement of all concerned officers and local level officials as well as non-officials in siting and operation of RDCs2/ and may constitute a coordinating body at the provincial level. Each RDC will have a Project Officer or Project-in-Charge in Level 5.3/ As the Project progresses, the Borrower may, in consultation with the Bank, decide alternative forms of management of RDCs.
73. The involvement of smallholders and other rural people, including women and youth, in the planning and implementation of each RDC and its activities is central to the success of the Project. Without imposing direction from above, it is anticipated that a council or association of rural households with eventual representationof rural women and youths will he formed to: (a) plan various activities and facilities at the RDC site; (b) provide feedback about the users' views and suggestions to modify the program; and (e) to disseminate the meaning and concept of RDC.
2. Research and Extension
(a) Research Component
74. The Chief Research Officer (CRO) in the M!AND is in charge of all agricultural research activities under the Under Secretary (Agri.). He will become responsible for implementing the research component of the Project under the direction of the Project Director. As far as the implementation of Project component on research is concerned, the CR0 will be under the Project Director.4/ In technical matters, however, the CR0 will receive guidance and direction from the Under Secretary (Agri.).
(b) Extension
(i) Establishment of the National Agricultural Training Institute (NATI)
75. The Chief Field Officer (CFO) under the Under Secretary (Agri.) is in charge of all extension activities in the country. He is assisted by the Principal Field Officer and the Senior Field Officer (Education and Training). The existing team of CFO will implement the NATI component of the Prnject and for this purpose, CFO will be responsible to the Proiect Director. As in the case of research, as far as technical matters such as course content, period of training, are concerned, the CFO will seek guidance from the Under Secretary (Agri.).
1/ Loan Agreement, Schedule 8, para 18. 2/ Loan Agreement, Schedule 8, para 14. 3/ Loan Agreement, Schedule 8, para 13. 4/ Loan Agreement, Schedule 8, paras 6 and 7. -Z6-
The Project will provide for the recruitment of an expatriate Principal of NATI, to assist the CFO and the Project Director in the establishment of NATI, design courses, formulate methods of training and review and coordinate the training provided by NATI, FTC, etc.l/ In the meantime, but as early as possible, a suitable Principal-designate should be recruited and appointed as Deputy Principal for on-the-job training. On the expiry of a 48 months contract period. the expatriate Principal2/ will leave and the local Deputy Principal will take over. The qualifications and joe requirements of the expatriate Principal are given in Appendix 7. (il) Relocation of Farmer Training Center at at Rendova Harbor
76. In the case. of VATI, the CFO will be responsible for the relocation of the FTC from Barakoma to Rendova Harbor in coordination with the provincial staff. Where the implementation of this component of the Project is concerned, the CFO will again be accountable to the Project Director.31
(iii) Rousing for Field Assistants CExtensiou)
77. As In the case of the other extension components in the Project, CFO, in consultationwith the Principal Field Officer-in-Charge of provinces, will select the sites of FA's housing. Priority will be given to aras where housing is a serioas problem with adverse effects on the efficiency of extension staff. For this component also, CFO will be accountable to the Project Director and will work under his guidance.41
3. Agricultural Information Unit (AIU)
78. AIU will be set up at Honiara in the Agriculture Division of KHMW. The Project Director with assitance from the Senior Field officer (Education and Training) will implement this component. As soon as possible, however, an expatriate Agriculture Information Specialist will be appointed for three years. His responsibilities will include assistance in establishing AIU as indicated in his 7erms of Reference at Appendix 6. During the period, a local person will be sent for training in Agriculture Information so that he may take over as Senior Agriculture Information Officer when the services of the expatriate Agricultural Information Specialist are completed.5/
F. Manpower Requirements
79. Apart from the requirement for consultants which have been discussed in Chapter III under the respective components, the incremental staffing needs of the Project for all components are modestly set at 47 professionals at job classification levels 4 and above. If Level 4 posts, which include Field Assistants, were excluded from the category of professional staff, the requirement of the Project -,'uldbe reduced to only 25. The breakdown of all the essential
I/ Loan Agreement, Schedule 8, paras 6 and 8. 2/ Loan Agreement, Schedule 8, paras 6 and 9. 31 Loan Agreement, Schedule 8, paras 6 and 10. 4/ Loan Agreement, Schedule 8, paras 6 and 11. 5/ Loan Agreement, Schedule 8, paras 6 and 12. -27-
staffing requirements from Levels 2 to 10 is given in Appendix 12. 1In the hissiom'a view, persons In the required numbers should liot be difficult to recruit but that recruitment will have to be planned carefully by the PIU during the preparation phase. The post of Project Director in Level 10 is crucial to the success of the Project.
G. Procurement
80. The Project Implementation Unit (PIU) will be responsible for the procurement of all goods and services required under the Project.
1. Equipment and Materials
81. The procurement of equipment, vehicleG and materials und&x the Bank! loan will be carried out in accordance with the Bank's Guidelines on Procurenent except for s3ome minor itemsl/ which will be obtained through off-the shelf procurement. Where appropTiate, equipment and supplies for the Project vlll be ordered in bulk and stored until actual site implementation takes place. Before the commencement of procurement, PIU will furnish the Bank with a list of goods and equipment to be procured and the proposed grouping of such goods and equipment under the Bank loan. The total base cost of the equipment, vehicles and materials to be procured through International Competitive Bidding and International Shopping is estimated at about US$450,000. Minor items and materials to be obtained through off-the shelf procurement should cost around US$130,000. Appendix 13 summarizes the allocation of Bank loan proceeds by procurement methods.
2. Civil Works
82. Civil works to be undertaken under the Project include land preparation, construction of building and utilities, feeder roads, and the construction and rehabilitation of wharves. The individual civil works are of a relative simple nature, small in size, dispersed over different provinces, and phased over a period of six years. It is unlikely that internationalcontractors would be interested in tendering for such contracts. The Government has therefore requested that, in view of the capabilities of local contractors, the construction of civil works be undertaken by locally registered contractors selected by local competitive bidding in accordance with the procedures satisfactory to the Bank, or by force account where ncessary. The Mission found the local contractors capable of undertaking the civil works involved in the Project. Under the Bank's loan, the total base cost of such civil works is estimated at about US$1,500,000.
3. Consultants
83. The Project will need about 235 man-z.aonthsof consultants' services, 216 man-months being long-term and 19 man-mouths short-term. Long-term consultants will be required in the fields of Project management, engineering and construction, agricultural economics, food crop agronomy, agricultural information and extension training; short-term consultants in tilefields of community organization, specific
1/ Such as furniture,ssall office equipment Loan Agreement, Schedule 6, paras 2 an.d8. -28-
agticulturalresearch disciplines, etc. The selection and engagement of their services to be financed under the Bank loan will be subject to the Bank's Guidelines on the Use of Consultants.1/ The general terms of reference for the consultants and-the adviser, as agreed on by the Governuent and the Bank, are in Appendix 6.
4. Fellowships
84. The Project will provide overseas training fellowships under the different Project components for about 85 man-months. The fellowshipswill cover the following fields:
Project Component/Courses Estimated Man-Months
Rural DevelopmentCenters
FieLd Extension Officer Training 20 Appropriate Technology 12 Rural,Development 8
Research ard Extensioa
Agricultural Research 10 Agricultural Extension 5
&gricultural Information
Agricultural Communications 30
Total 85
85. The staff to be awarded fellowshipswill mainly be from MKARD assigned to the Project. Procedures and criteria for selecting candidates will be agreed upon between the Government and the Bank. Before the overseas training programs start, the Government will furnish to the Bank a 14 st of fellowship recipients and the places and duration of training foT Bank Approval.2/
H. Iprest Account
86. The Government earlier had deficits on current account which was being met out of capital receipts including foreign aid but it has now succeeded in eliminating external support to meet current expenditure. It would, however, be extremely difficult for the Government to finance the Project and later on claim reilmbursementsfrom the Bank. Its budgetary position does not allow for the liquidity that would enable advance payments to be made for expenses incurred under externaLly financed projects. The depressed prices of commodity exports have already increased pressure to reduce export duties. The Government, therefore, proposed and the Mission recommends that the Bank establish an imprest account for the Project. The following procedures will apply:3/
1/ Loan Agreement, Schedule 7, para 2. i/ Loan Agreement, Schedule 8, para 16. 3/ Loan Agreement, Schedule 8, para 20. -29-
(i) the Project Impreat Account will be established at an authorized depository bank of the Government;
(ii) the funds required will be deposited itithe account on the basis of anticipated quarterly empend1tures and expected quarterly withdrawals;
(iii) the account, as established, and the funds, as deposited, will be operated and maintained in accordance with terms and conditions acceptable to the Government and the Bank and in particular, such conditions will include the provision that any withdrawal of funds from the account will be supplementedby simultaneous release of Governowet's budgetary allocation to the Project, representing Government's share jf Project financing.
1. Account, Auditg and Reports
87. In addition to the standard reports required by the Bank, the following reports will be furnished to the Bank at the time intervals indicated below:l/
(i) quarterly progress reports summnrizing the status of the Project and the physical progress of construction,procurement, formation and activities of Farmers' Associations, services rendeted by the RDCs, including problems encountered and proposals for solving such problems;
(ii) half-yearly reports summarizing the budgetary allocations and expenditures, and stating the balance remaining in the ProjectImprest Account; and
(iit) a Project Completion Report to be submitted within three months following physical completion of the Project.
88. Government will maintain records and accounts adequate to identify the goods and services financed out of the proceeds of the loan, to disclose the use thereof in the Project, to record the progress of the Project (includlng the cost thereof), and to reflect, in accordance with consistently maintained sound accounting principles, its operations and financial condition.2/
89. The Government has given assurances that the Executing Agency will establish and maintain separate account of expenditures for each major component of the Project. These accounts will be audited annually by an auditor acceptable to the Bank. The Executing Agency will submit to the Bank an audit report on the Project accounts in such details as the Bank may reasonably request. The Audit Report will be submitted to
1/ Loan Agreement, Schedule 8, para 17, and Section 4.07(c). 2/ Loan Agreement, Section 4.06(a). -30)-
the Bank not later than nine months after the close of the relevant fiscal year.l/
J. Project Benefit Monitoring and Evalustion (PBME) Unit
90. The Project will benefit smallholders in particular and the whole country in general. It will be necessary to monitor the progress of the Project and evaluate its impact on various categories of target groups, i.e., smallholders, food crops producers, cash croppers, village women, youth, etc. A PBME Unit, which will monitor the benefits and evaluate the impact of this, as well as of the Livestock Development Project, will be established in the National Planning Office. Properly trained and experienced, this Unit could be used for simila. work on other Bank assisted projects in the agriculture and rural development sectors. Details of the Unit's work as well as of the proposed * technical assistance grant of US$90,000 to the Government are given in the Appraisal Report of the Livestock Development Project (Appendix 16).
K. Operation and Maintenance
91. The recurrent expenditure for the central research facilities at Dode C.-eek,the Agricultural Information Unit and NATI and for the research sub-stations at Dala, Rendova Harbor, Santa Cruz and Avu-Avu will be financedunder the Projectfor five years. The RendovaHarbor FTC and all RDC8 will be financed under the Projectfor two-and-a-half years.
92. The Goveraeunt has given an assurance that the Project facilities and equipment will be operated and maintained in accordance with sound financial, engineering and agricultural practices.2/
93. To that end, after the loan fivancing period, the Government will provide annually and on a timely basis, sufficient financial allocations and staff to meet the operation and maintenance requirements of the Project.3/
1/ Loan Agreement, Section 4.06(b). 2/ Loan Agreement,Schedule 8, para 19. 3/ Loan Agreement,Schedule 8, para 15 and 19. -31-
V. PROJECT JUISTIFICATION
A. Overall Justification
94. The Government considers it imperative that more people should be brought into the mainstream of development. Being the predominant sector of the economy, agriculture is viewed as the main vehicle for translating this policy into action. The Project is mainly Judtified on the basis of its emphasis on crop diversification and intensification as strategic methods of expanding the agricultural produtetionbase and thereby increasing the income derived from food and cash crops by the predominantly rural population of the country. The components of the Project are designed to result not only in better incomes but also improved living conditions for the majority of the rural people, particularly the subsistence smallholders.
B. Benefits and Beneficiaries
95. The Project will yield a number of benefits to the rural people, particularly those within the areas of influence of the RDCs which will promote the increased productivity of food crops as well as the cultivation of other suitable cash crops. The improved marketing system brought about by a better transport infrastructure, proper storage facilities, and a new communication system will facilitate the entry of more surplus agricultural production into the monetized economy, thus increasing smallholders' cash income. RDC training programs will provide farmers with the knowledge and skills that will enable them to undertake alternative or supplementary economic activities.
96. The research, extension and information components will eventually benefit the entire rural population of the country. Though some of these components will have a medium to long gestation period, they will in the end result in improved agricultural production.
1. Ouantified Benefits
97. The development of 80 ha of provincial farm in Rendova Harbor will result in an incremental production of about 320 mt of copra and 90 mt of cocoa per year. The 5 portable sawmills will produce annually about 15,000 cu m of sawn timber with a net value added of about US$870,000. The transport infrastructure provided in the Project will improve access to markets especially for input supplies. More efficient turn-around of ships will result from the construction of wharves so redu.cingstorage time.
2. Non-QuantifiedBenefits
98. Several benefits accruing from the Project are largely unquantifiable or difficult to quantify. The proposed activities of the RDCs include the operation of market point facilities such as radios, copra dryers and storage facilities, the provision of engine repair and maintenance services and development of prototype sailboats, all of which will benefit farmers with marketable surplus production. Tt has -32- been conservativelyreckoned that the operations of the marknt point facilitiesaxnd the small engine maintenanceservices will be fitiancially self-sustaining. It is planned to operate the sailboats as cargo vessels on a trial baais for a year at two RDC sites. The outcome of this componentis howeverdifficult to predict. 99. Among the rsearch activiLtiesto be conducted in the various research stationsand substationswilL be the developmentof varieties of food crops suitable to the agro-climaticconditions of the various parts of the country. The anticipatedbenefits though likely to be significantw4b11 be of long gestationperiod and have not thereforebeen quantified.
100. The training activities in the RDCs will include courses for farmersin appropriatetechnology and rural life improvementintended to develop creative technicalskills appropriateto,a village environment and provide the educationalbase from which individualand conmunity heelth can be improved. 101. The extensioncomponents, including the relocationof the FTC from Barakoma to Rendova Harbor, the provision of Field Assistants' housing and the trainingcourses of NATI, will all yield secondaryand multiplier effect benefits. These componentswill provide for the availability of a cadre of well-informed and effective extension personnel. Similarly, the AIU through its informationdissemination functionwill generatebenefits of a non-quantifiablenature. 3. Impacton Beneficiaries
102. The influenceof the Project will be spread by the seven Rural Development Centers which will generate an impetus for agricultural developmentamong some 3,700 smallholderfamilies. These familieswill benefit from the transport infrastructureto be provided under the Projecr, access to extension services, and the demonstration effect of good agri-ultural practices around the RDCs. Over the six-year implementationperiod, over 2,280 farmers will be able to attend at least one two-week training course in the RDC on any cf several specializedtraining programs. About the same nuimberof farmerswill be exposed to training on alternativeeconomic skills under appropriate technology training courses. About 1,000 farmers'wives, as well as other interestedadults, will be able to participatein rural life adult educationtraining courses. 103. The field extensionstaff are expected to benefitconsiderably from the Project. About 30 Field Assistants will be provided with permanent houses and Field Assistants assigned to RDCs will receivie specialextension training. 4. EmploymentCreation 104. For the constructionof the civil works required for the Project, it is estimated that 420 man-years of unskilled labor and 80 man-yearsof skilledlabor will be required. The operationof the seven RDCs will require25 incrementalpermanent staff of levels 4 and 5. The -33-
PIU will need 4 staff at levels 4 and above during the six-year implementationperiod. The reeearch stations, NATI and AIU, will togetherneed 18 new staff at levels4, 5 And 6. 5. ForeignExchange Generation 105. It is etstimatedthat the increimentalcopra and cocoa productionof the provincialfarm at RendovaIarbox would generateabout US$255,000 in foreign exchange annually. The sawn timber produced annually by the portable sawmills would have an internationalmarket value (F0 Honiara) of about US$1.5 million. The transport infrastructuresand trainingcourses on copra drying will improve the qualityand quantityof copra producedby the benefitedfarmers by about 10 per cent, the resultingincremental revenues due to this shouldbe in tiieorder of US$180,000per year in copra exports. C. Economic Ana.ysis 106. The main assumptions underlying the economic analysis are discussed in Appendix 14 and are summarized as follows: (i) the Project implementation period is six years; (ii) imported materials are valued at CIF Honiara prices plus adjustmentsfor domestic transportation; exportedproducts are valued at FOB Honiaraprices with adjustuanatfor loca transportcosts; (iii) locallytraded commodities like sweet potato and taro are valued at domestic financial prices; and (iv) only quantifiablebenefits have been included in the anmAyses. 107. The economic internalrate of return (EIRR)of the provincial farm is estimated to be 20 per cent as shown in Table 4, Appendix 14; that for the sawmillsis over 300 per cent (Table5, Appendix14).
D. Project Risks 103. The main risks likely to be encountered in Project implementationinclude: (i) inadequacyof the implementingcapability of the Government;and (ii) difficultiesin land acquisition. The Pro-ect has been designed in such a manner as to deal with these constraints. Taking the productivityand incoie raisingneeds of the country into consideration,the Projectprovides for the minimum package that Will create a significantimpact on the productivityand inconeof smallUoldersnow facingacute poverty. Implementationwill Tequirethe recruitmentof 47 professionalstaff and adequate provisionhas been made to ensure that there will be a minimum rilskin the availabilityof staff. First, the recruitmentperiod iB spread over four years, thus allowingtbetter planning and preparation for hiring. Second, the Project includes fellowships for key staff to be trained overseas so strengthening their technical and management capability. Finally, provisiouthas been made for consultantsto guide and train the Project staff in implementationfunctions. 109. There is some degree of uncertaintywith regard to the availabilityof land to the provincialgovernments concerned at two RDC sites (Susubona-Kaevangaand Hakama). In case this ahould lead to delay, the implementationof both RDC8 has been scheduledfor year 4 of Projectimpl.ementation. -34-
VI. CONCLUSI AM iECOMMENDATI01S
110. Agriculture provides over 90 per cent of the exports, contributing 70 per cent to the GDP and sustains 90 per cent of the country'spopulation. Even when the GDP grew by over 7 per cent per annum during 1972-79,smallholders did not benefit to such an extent. After 1979, when the world price of copra was depressedand GDP fell by over 2 per cent per annum, the hardshipof the large subsistencesector increased. The Government,therefore, formulated a policy in late 1981 placingemphasis on researchand extensionin regardto existingand new food crops, the improvementand diversificationof cash crops, and the need to providemarket and other supportfacilities and infrastructures in,rural areas,on a decentralizedbasis. Unfortunately,implementation of this policy was handicapped by shortages of funds and initial manpower. The Project,which is completelyin line with the Government priorities,will help the rural householdsto intensifyand diversify agriculturalproduction and Improvetheir incomeand standardof living.
111. The total cost of the Project is estimatedat US$11.65million equivalent,compriaing US$5.93 million as foreignexchange cost and the equivalentof US$5.72million as local cost. External financingwill amount to US$10.15 million, the remaining US$1.50 million equivalent being contributedby the Government. Of the total external fiuancing, the Bank loan is proposed at US$5.15 million, IDA's share at US$3.5 million, and that of IFAD at US$1.5 million. Parallel co-financing arrangementsare proposed. The Bank will financethe establishmentof the Rural Development Centers and the setting-up of the Project ImplementationUnit. In view of the integratednature of the Project, Governmenthas given an assurancethat it willlobtain the requiredfunds from IDA and IFAD in a timely ianner or make other arrangements(Loan Agreement,Schedule 8, para 22).
112. The Project has both quantifiable as well as non-quantifiable benefits. It will increasethe productionof both food and cash crops and create the potential for the sustained development of thF smallholders'economy. Besides creating additional employment, the Project will result in the generation of foreign exchange, improvement of soil fertiLity, better nutrition for the people, use of unused agricultureopportunity areas and the establishmentof multi-facility centers of conomic and social activities on decentralized basis. The Projectwill also lay the foundationsfor buildingup a supplyof better trainedand more skilledmanpower. 113. In addition to the standard provisions and assurances,the followingspecific assurances have been receivedfrom the Government on mattersof importanceto the Project: (i) The Governmentwill set up a NationalCoordinating Group (NCG) at centrallevel under the Permanent Secretary,Ministry of Home Affairsand National Development (MHAND) for the overall coordination and implementation of the Project (Loan Agreement, Schedule S, paras 1 and 2).
Y , (ii) The Government will establish within the MHAND a Project ImplementationUnit on full-time basis for the planning, implementationand direct supervision of the Project components and will appoint a senior level local person as Project Director to head the PIU (Loan Agreement Schedule 8, Part B, paras 3 and 4).
(iii) At the provincial level, the Borrower will ensure that the provincial secretary shall enlist and coordinate the support and involvement of all concerned officers and local level officials and non-officials (Loan Agreement, Schedule 8, para 14).
(iv) The Borrower has given an assurance that it will make efforts to obtain funds from other co-financiers, i.e., IDA and IFAD, on a timely basis. In the event of any difficulties, the Borrower will make alternative arrangements for the same (Loan Agreement, Schedule 8, para 22).
(v) The Borrower has also given an assurance that all land, properties, rights of way, etc. required for the Project will be mpde available free from any impediment in the Project (Loan Agreement, Schedule 8, para 18). -36 -
LIST OF APPENDIXES
Appendix
1 Commodity Prices 37
2 Agricultural Price Policies 39
3 RDC Sites and Activities 41
4 Agricultural Research in the Solomon Islands 42
5 Agricultural Extension and Training in the Solomon Islands 51
6 Terms of Reference for Consultants 57
7 Job Description for Project Director (Local) 63
8 Detailed Cost Estimates 64
9 Organization Chart: Ministry of. Home Affairs and National Development 67
10 Project Organization - Rural Services Project 68
11 R-uralServices Project - Project Implementation 69
12 Staff Requirements by Year 76
13 Allocation of Proceeds of Bank Loan 77
14 Economic and Financial Analyses 78
l~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -37- ~~Appendix.1 Page 1 COMO0DITYPRICXS
Table 1: Anuual Average Prices of Copra (Sl per m. ton)
Local Price Export Price Difference between 1st Grade (CIP) Export & Local Price
1971 117.29 163.93 46.64 1972 74.23 114.21 39.98 1973 129.99 237,71 107.72 1974 282.79 454.31 171.52 1975 129.52 190.05 60.53 1976 120.34 221.61 101.27 1977 191.07 351.33 160.26 1978 233.32 398.33 165.01 1979 331.95 571.11 337.79 1980 318.39 373.94 55.55 1981 272.75 323.77 51.02
Source: Government of Solomon Island - Ministry of Finasnce, 1982 Statistical Year Book, p. 85.
(Reference in text: page 5, paras 12 and 14) a/ Table 2: CODMMODITYPRICES AND PRICE PROJECTIOYT S (in 1981Constant Dollars)
Short Run Long Run Average Commuodity 1983 1984 1985 1990 1995 1960 - 1970
Cocoak' Constant 2,020 1,990 1,750 1,450 1,730 1,930 Current 2,040 2,200 2,120 2,400 3,820 580
Copra-/ Constant 424 407 447 506 495 662 Current 428 450 541 836 1,094 199
CoconutOil-/ Constant 589 592 618 696 687 1,077 Current 595 655 748 13150 1,518 323
Palm Oll.' Constant 426 482 542 582 580 753 Current 430 533 656 962 1,282 226
Palm Kernel-/ Constant 335 321 330 369 359 520 a Current 338 355 399 610 793 156
a/ IBRD,Half-Yearly Revision of CommodityPrice Forecasts, June 1983. All pricesare US$ per mt. bI Cocoa (ICCO),Daily Price, average, New York and London,nearest futures trading months. c/ Copra, Philippines/Indonesia,bulk, CIP NW Europe. d/ CoconutOil, Philippines/Indonesia,bulk, CIF Rotterdam. IV eJ Palm Oil, Malaysia,5% bulk,CIF NW Europe. fJ Palm Kernels,Nigerian. CIF UK.
(Referencein text: page c, para 14) - 39 -
Appendix 2 Page 1
AGRICULTURAL PRICE POLICIES
1. General
1. The Government has no specific statement of policy with regard to agricultural prices and related issues. From several actions of the Government on agricultural pricing, consumer pricing, and tax aspects, it may be inferred that the Government aims, inter alia, to: (i) provide incentives to farmers; (ii) increase foreign exchange earnings through exports; and (iii) keep prices of essential commodities to consumers at reasonable levels.
2. The Government is involved under joint ownership, in the production of a number of agricultural commodities including rice, cocoa, copra and fish through shareholding in various agribusiness enterprises. On the marketing side, there is a state monopoly on copra export.
2. Producer Prices
(a) Copra 3. The Copra Board, a state-owned organization is at present the only exporter of copra. Its control of the export market allows it to dictate the buying prices of copra throughout the country. In setting the buying price, it aims to establish a uniform farmgate price to copra producers regardless of distance to the loading ports and to minimize adverse effects to farmers of extraordinary fluctuations of copra price in the world market. Thus, during periods of relatively high copra prices in the world market, the Board builds up a copra reserve fund from its profit margins. During the periods of low copra prices, the Board is able to offer buying prices that vould mean operating losses to the Board,.at the expense of drawing down on the reserve fund.
4. The copra pricing system has apparently functioned well since copra production, which is dominated by the smallbolders, did not drop inordinately during the period 1980-1982 when world copra prices were badly depressed. Following the experience gained in copra, the!a Copra Board is now in the process of being transformed into a Commodity Board that may be involved in the marketing of other agricultural commodities as well.
(b) Other Agricultural Commodities
5. For the past few years the Government, through the Cattle Development Authority, has controlled the price of beef in an effort to
(Reference in text: page 5, para 14) - 40 -
Appendix 2 Page 2 support its cattle development programs. Beef prices were particularly low up to the early part of 1983 when they were allowed to rise by an average of 15 per cent. For other agricultural commodities, the forces of the open market are allowed to determine prices.
3. Subsidies and Taxes
6. There are at present no direct subsidies on agricultural inputs to farmers. The Government allows the importation of fertilizers,agrochemicals, agricultural production supplies and livestock medications on a tax-exempt basis.
4. Consumer Prices
7. The prices of several main consumer commodities (milk, sugar, meat, fish, cooking oil, soap, rice and bread) are being controlled in Honiara. The controlling body is the Price Advisory Control Office under the Ministry of Finance. The allowable maximum retail prices are designated as given percentages over CIF prices which are calculated as an average of several traders. There is a plan to extend the price control to other geographical zones in the country. - 41 Apgendi2L-3
RDC SITES AND ACTIVITIES
Rendova Harau Afio- Northwest Santa Suubana Hiarbor Sound Rokera Peninsula Cruz Kasevanga HaUkaw Guaddl- Provicct Western Canal Malaita Makira Temotu Isabel Central
1. Provincial ar&ri- cultural training x x x
2. Agricultural extension x x x K x
3. Appropriate technology x x
4. Rural life adult education c x x
Production, Processing amd Marketing
5. Provincial farm x
6. Portable sawmill I xx x x
7. Engine maintenance x
8. Sailboat x x
9. Market point x x
Transport Infrastructure
10. Wharf x x xx x
11. Road x x x
(Reference in text: page 12, para. 40) (Page 12, para 45). _ 42 -
Appendix 4 Page 1
AGRICULTURAL RESEARCH IN THE SOLOMON ISLANDS
I. The Existing Situationi
A. Background
1. The Government's agricultural research program conducted fron the Dodo Creek Research Complex, Guadalcanal Province, which was opened in 1975, directs itself mainly to:
(i) the genetic improvement of the staple root crops (sweet potato, taro, yams and cassava);
(ii) the control of pests and diseases in these food crops;
(i4i) specific pathological and entomological problems of the major cash crops (coconut, oil palm and cocoa) and rice; and
(iv) soil classification, soil surveys and the investigation of nutrient inputs required for optimum growth and production.
The laboratories at Dodo Creek are reasonably well equipped for the current work loatdand the staff have access to the newly established but partially developed experiment farm at Tenaru, 7 km from Dodo Creek and to a cocoa plantation at Black Post close to Tenaru.
2. The commercial sector imports appropriate technology and conducts its own adaptive research on the important cash crops (coconuts, cocoa and oil palm) and rice (which is not a staple food outside the towns). The three major agri-business companies are joint ventures between external capital and government equity. B. Organization of Government Research and Staffing
3. The research program, headed by a Chief Research Officer, is organized by disciplines across crops. The disciplines are soil science, horticulture, pathology and entomology. A plant breeder is attached to the research program and is financed by the UNDP/FAO, under the South Pacific Commission's Root Crops Program. Pasture research, now ended, was conducted by an agronomist supported by the University of Queensland/ Australian Development Assistance Bureau.
(Reference in text: page 15, para 50) - 43 -
Appendix 4 Page 2
C. Research Programs
1. Cash Crops
4. Coconuts: Much of the work by Level Solomons Ltd. has been directed, over the last three decades, to the collection of genetic material and the production and testing of hybrids. This led to the identification of a hybrid between Rennell Tall male and Red Malaysian Dwarf female * which is dwarf, high yielding and precocious. Large scale plantings of this hybrid have been undertaken by the commercial sector. For indi- vidual plantings by the small-holder farmer, where inputs for hybrids are either not available or too expensive, another Yandina hybrid Rennell Tall x Local Solomons Tall, an improved tall palm, is recommended. 5. The Agriculture Division's work on coconuts has concentrated on the biological, chemical, or cultural control of the Southern Hemisphere rhinocerous beetle (Scapanes grossepunctatus),the premature nut fall insect (Amblypeltacocophaga), the coconut spathe borer (Axiagastus cambellil), the coconut moth (Tirabatha rufivena), the coconut weevil (Pantorhytes biblagiatus) and coconut leaf beetle (Brontispa longissima). Control of Scapanaswith 6.5% gamma HiCHis effective and is recommended at present but there are encouraging signs that the release of the virus Baculovirus oryctes in the New Georgia Islands is reducing the population of Scapanes beetles. All the other coconut pests appear to be susceptible to biological control, at least in new plantations, by introducing the yellow tree nesting ant Oecophylla smargadina, which is particularly antagonistic to Amblypelta cocophyga, the cause of premature nut fall.
6. The export of hybrid nuts overseas and to other provinces in the Solomon Islands was depressed by an outbreak of the pathogen Marasmiellus cocophilus, causing basal stem rot in seedling coconuts, in the 1980/81 nursery on the Russel Islands. Studies of the aetiology and control of Marasmiellus are being undertaken by the Division of Agriculture.
7. Oil Palm: The Agriculture Division is not undertaking any current research on oil palm. A notable past achievement was the successful introduction,multiplication and release of the oil palm * pollinating weevil, Elaedobius Kamerunicus, from West Africa in 1981. The presence of this insect has now eliminated the need for hand pollination within the Solomon Islands Plantation Ltd. (SIPL) estates on the Guadalcanal plain. SIPL is undertaking research into an anomalous situation which exists in that low levels of available potass'um are not reflected either visually or in the chemical composition of the oil palm leaves. 44 _
AppendLx 4 Page 3
8. Cocoa: The original planttingsof "Trinitarios" in the Solomon Islands proved to be highly nusceptible to black pod and stem canker disease caused by the fungus Yqhytophthorapalmivora and have now been largely replaced by the resistarit"Amelonados". The main research undertaking of the Division of Agric.altureat present is the evaluation of hybrid progenies of Sabah parentage which appear to be more precocious and higher yielding than Amelonado in the seasonally dry environment of the Guadalcanal plains. 9. Rice: Brewer Solomons Apsociates Ltd. undertake research on their up to 2,000 ha crop. The intensive cropping rate of 2.7 crops per yesarand the overlapping of crops has resulted in incre4sed populations of the brown plant hopper (Nilaparvata lugens). The Research Section Of MHAND has assisted with research on this pest and BSAL evaluates ctltivars in standard IRRI tests. l'J. Other Cash Crops: A wide range of new cash crops can be grown by smallholders in the Solomon Islands and the Research Section has undertaken introduction and varietal testing of Giner, Tumeric, Cardamon, Nutmeg, Capsicum pepper and Robusta coffee. Diversification of cash crop production will depend upon the availability of markets and to date only Robusta coffee can be assured of a market (a minimum quota of 1,500 tons annually could be obtained from the International Coffee Organization).
2. Food Crops
I1. Taro (Colocasia esculenta): Prior to 1946 and the arrival of the destructive taro blight pathogen, Phytophthora colocasiae, and its rapid spread throughout the country, taro was the most widely cultivated and preferred staple root crop. Taro blight has been estimated to cause field losses of 40 to 60 per cent of corn yield and storage losses of up to 80 per cent within 5 days after harvest. Taro is still preferred as the staple food to sweet potato which of necessity has replaced it and now occupies some 65% of the land area devoted to food crops. 12. Germplasm collections of taro have in the past been screened for yield, susceptibility to taro blight, virus diseases, taro beetle (Papuana inermis) and storage characteristics. Due .o the difficulty of maintaining field collections in the presence of a lethal virus disease, the germplasm is stored as seed at Dodo Creek and dup'icates sent to India and the International Institute of Tropical Agriculture (IITA). Taro tissue culture techniques were however developed and it is now possible to eliminate virus disease from taro clones and maintain taro plantlets in culture media.
13. The only known immunity to taro blight came from a clone of wild C. esculenta var. antiquorum originating in Thailand. The resistance is conferred by a monogenic dominant and is relatively easy to transfer to cultivated taros. The Thai clone has disadvantages, however, 45 -
Appendix 4 Page 4
is that it does ntotproduce a corm and contains a high percentage of calcium oxalate crystals which are culinarily undesirable. In order to transfer the resistance to blight and eliminate the aforementioned disadvantages a backcrops program with the cultivated taro as the recurrent parent was initiated. This program has now reached the BC(2)F2 gene- ration and some segregants innoculated in the greenhouse have blight resistance and reasonably good corms. It is anticipated that the BC(2)F3 generation will produce segregants with blight resistance and good agronomic and culinary characteristics: the future availability of such cultivars would have an important impact upon subsistence agri- culture in the South Pacific Region as a whole. 14. The germplasm collections was screened for resistance to virus diseases and two groups of cultivars identified. One group consists of a majority of cultivars which are generally high yielding but sus- ceptible to a lethal virus disease known locally as "alomae". Diseased plants are infected with two types of bacilliform particles: a rhabado virus transmitted by a plant hopper and a smaller vacilliform particle transmitted by a mealy bug. The second group of cultivars contains low yielding clones which are resistant to "alomae" but susceptible to a non-lethal disease, locally called "bobone" which is caused by the rhabado virus alone. The Fl hybrids between the two groups of cultivars have all died utuderfield conditions indicating that resistance to ".alomae"is recessive. The breeding work on this problem is to be intensified.
15. Sweet Potato: Germplasm collections have been screened for resistance to sweet potato weevil (Cylas formicarius) and a witches' broom type disease known as "little-leaf disease" caused by a mycoplasma- like organism and transmitted by a Jassid (Orosius sp.) vector. A breeding program was started by crossing local and exotic cultivars with the objectives of improving yield and other agronomic traits as well as the production of clones with res:;lstanceto little-leaf disease and weevil. One cultivar from AVRDC is resistgtntto little-leaf disease and one cultivar from IITA resistant to weevil. F3 progeny lines growing at Tenaru shows yields ranging from Clto 50 mt/ha: this variability which exceeds the yield capabilities of the parental cultivars augers wel'l for the success of the breeding program.
16. Yams (Dioscorea spp.) Germplasm collections of both the Greater Yam (D. alata) and the Chinese Yam (D. esculenta) have been made locally and introductionsmade from abroad. Resistance in the GtBater Yam to anthracuose disease caused by Collectotrichum gloeosporioides is being sought but breeding programs are not envisaged. 46 -
A nix 4 Page 5
17. Cassava. Thls crop is gaining in popularity and a small germplasm screening program of local cultivars is maintained at Tenaru. An unknown "mozaic" occured on cassava grown on Choiseul Island and may be a cause for concern: its vector has not yet been identified. 18. Vegetables and Fruits. These are not major items of food for the main part of the population who obtain much of their protein and vitamin requirements from fish and coconuts. Only bush cabbage (Abelmoschusmanihot) and the longbean (Vigna unguiculata, subspecied sequipe\dalis)are widely grown in significant amounts. A collection of local cultivars of bush cabbage of DrodoCreek is maintained and various fruit trees are being established on the new farm at Tenaru.
3. Soils and Plant Nutrition
19. Current emphasis in soils and plant nutrition research is on the evaluation of crops on different soil types, and the investigation of nutrient inputs required for optimum growth and production. Soil surveys of coconut plantations for redevelopment of proposed sites for research substations and of the Guadalcanal plains are in progress. A land suitability classification for crops grown by small holders has been prepared for use by extension staff.
It. Existing Constraints and Program Weaknesses 20. Adaptive Research. The research sector has grossly inadequate capabilitiesfor multilocation adaptive research. In particular it lacks adequately equipped and managed experiment stations in the important environmentsoutside the Guadalcanal plain. It is noteworthy that the soil and rainfall regime of the Guadalcanal plain is atypical of the rest of the Solomon Islands and is the only part of the country with a marked dry season. Many of the research findings at Dodo Creek Research complex are awaiting facilities to enable them to be tested in the field over diverse environments.
21. Communications. There are no established channels of com- munication whereby (i) research results can be disseminated to the extension service, small holder farmers, commerce or the general public; or (ii) government can be informed of research progress and its relevance to agriculture development. Many research findings have not yet been transmitted to farmers.
22. Farming Systems. Population increase is leading to an inten- sification of crop production, the period of fallow break is being reduced and a decline in soil fertility ensuing. Farming systems research to establish methods of maintaining and enhancing soil fertility in the notoriously fragile environment of the wet lowland tropics has not yet been undertaken and is urgently needed. _ 47 _
Appendix 4 Page 6
23. Econ mics. The research sector lacks capability for the economic analysi;3of cuarrentfarming systems and any new technologywhich might be recommentdedfor them. Little socio-economic base line data on smallholder prodtuctionsystems within the different provinces of the Solomon Islands ere available. There can be no diversificationof cash crop production without assured markets for their produce and market research and the economics of production of new crops &Xso needs to be undertaken.
24. Crop )iversificationand Genetic Resources. Research on potential new cashlcrops and food crops is inadequate at present. There is a need for screening a wider range of germplasm of legumes, vegetables, fruits, spices end nuts. The collection and ro;tine maintenance of genetic resources conflicts with legitimate research programs of the Plant Breeders, Pathologists and Agronomists and it is important that a substantive position for a Genetic Resources Officer be established: such an officer iE.to be funded by another Donor Agency.
III. Rationale for Support to Agricultural Research 25. Notwithstanding the aforementiouedconstraints the ongoing research program is basically sound and warrants support to increase its capabilities to make effective contributions to agricultural deve- lopment in the Solomon Islands. The Project's inputs for agricultural research have been formulated in order to remove the constraints and provide a service with the following objectives:
(i) in general terms, to undertake multi-disciplinary research conducted from the Dodo Creek Research complex, which is relevant to food and cash crop production l/ by small holders and the communal plantation sector;-
(ii) more particularly, to conduct adaptive, multi-location research over diverse environments at Tenaru, Dala,
1/ See Chart 1 for Organization of Research Program. 2/ See Chart 2 for the characteristicsof these stations which were chosen upon consideration of the following factors:
a) adequate representationof major agricultural soils and climates; b) optimal diversity for the assessment of genotype x environment interactions; c) population distribution- about 90% of Solomon Islands live in the Western, Malaita, and Guadalcanal Provinces; and d) ease of access bearing in mind that travel and communication are difficult throughout the country.
Provision is not made for a high altitude station because the high altitude interior areas of Malaita end Guadalcanal have not yet been developed and are inaccessible: a considerable altitude zonation of temperature would be found with some heights just below 3,000 meters. _ 48 _
Appen4dix4 Page 7
Rendova.Rarbor, Santa Cruz and Avu Avu; 2/ and to conducteconomic analysis so as to identifythe constraintsto maintainingself-sufficiency in food productionand deviseways to integratefood and cash crop productionwith stable, economicallyefficient and viable farmingsystems; and
(iii) to collaboratewith retearchin the commercial sector, both to utilizeor ada.Vtthe productsof such research for small holders and cotwiunalplantations, and to provideon requestscientific advisory services for their joint ventures.
,
N ORCAMIITION01 KDAUACR I
__T _ SEJ~~~5WCan d1 *wn Awnu Adli.atction
~~~~~~~~~~~~~~~~~1~~~~~~4
7plnt'redekAronxut* irooxis'tcu Agricultural"r-ii: (FoodCropi)(fod Craps) Horticulturist(FoodCrsaDODO CrOoIsp) Econoniat bP.,.aoj'sist Pscientistt
I.Tart 1. farming System 1. Cash Crop Husbandry 1. Soci.o-aeoonouic 1. Food CtoP 1. food Crop 1. fartUeil ser 1. PastWS. 2. Sweet potato Z. Food Crap lvm- 2. FrarmingSystem data Patsa Diseases 4&Nutrients Qassagib 3. Van baadry 3. Diversifrcatiou 2. Fam Iuss 2. C&asCrop 2. Cash Crop 2. Soil Surveys 4. Cassava 3. Diversificatim (fruits, ices. (food 4. cash Pasts Diseases 3. Soil Cla. I- tlaws ~- - t cr_p_Cnuts) t-- - ca tals, maize) 3. Market researc & aconosics of production of er" diversification 4. R3eearch Vale 2So policy 4 Crt.DPIFAa input (urdr the South PacifiC COin LtOR, to ot Crops PrOPs.).
"ADDProjet Input tQ ** Australian Devlopmet Asstance Input o i0
I x Cd-pcl1mtic a* site specific characterlatics of te ChartCbart 2. Solom Islands esearch Field Erermt Stations
Statin Climate 1/ Soils Site Characteristics
-% I TEIU: CUADALCAA Rainfall 2.000 sm/annum. Moet rain Alluvial The climate is reprentative of the C.adalcanl plains wbih PR SIU (Field Statixo fells duriS the VW looa. Dry (Chromstort) is the min ae for corcabl agrictlture (cocoa ol palm. for Dodo Crek) mon dul the S.E. 1oon ecma.s 6 rne)i the Solin Islads. TMe vertie siUs (0 Period are reresettiwe of tbo usetero end of the Guadolcml '5 ~~~~~~~~~~~~~~~~~~~~~~plat"s. II. DAI: MAUIAA fWVNCK Rai-fall 3.000 lsenum. Continuouly rowaish clays Meet of tbe populatio of the Solosu Ilam" is now touen- aet but wetter In 1W.u bnsoon. over uplifted tratod in area with a rainfall regim similar to that of Del coral limstne. and scb of the agricAture coIfied to soils overlying (Tropudalf) 11isto rocks. lotesiu. Is defIcaft in thes sois. It. REOOVAMM VESTRI Rainfall 3.500 ulanam. Continuously Reddish clays The stroWly wAtued sofla oa wvlcai rok an wey diD- rt PROVINCE vat, but w.ttr In N.l. a0eoon, ovae volcanic cributed in the Werw ftovince an the is1meX of Sweft". X rocks. Csplor- Now Georgiao, _lelangeraA Vil Lsyvlls mad arm ertemsawely thor) use for ciakr as ell as food sarde. pasture 6 cocoa. They arm Ikely to be Iscressisgly usd for food Arde. Phoaphorona is deficient Is tim soils md acidty I a problems TV. SANACAUZ: TEN= Manfall 4.000 _m/rn. Contnuously Volcanic as This tye of oil Is lmted in extat am hs differet pro- VI > pitOVICE vt. but wetter in vs. monsoon. over uplifted peTtnSg fr. othr Sobln tabs wous, but is siMilr to coral limsone that of V_-t . Mm popaitl diomsuty em e of tchse is- (flydrandept) lands is the highest In the comatey sod lend pressure s r sever. V. AVUAMU GuALCDEI Rainfall 6,000 /anaus. Contuouly Alluwir and This site in climatically rWreeatatve of tho dislpy pops- PR6OVTh wee. =oer rein In S.E. !.aoo. colIzvIM. lated smother coSt' of Cuadlceama £ hkiralsmd. Dee to Pt coeamat clom,. tl solar ralintios regift is 1mm the in 0u oter Pau of the solo Ids_m" ad yelds of I to"ed uW crp varietie_ (weet potato & tcer) are _dboptiml. Rat ° eb same" after S mm. in moot aret takes P me. ea the watr et"se there in an urgelt seed to bred vaie of food ep adapted t thi gro-clisatic a. 1i th WorXtWest Wouoon cc r fom 1s,de to ApilL. The South East Mozooomoccur fru Kay to October.
.-I
S ~~~~~~~~ :> - 51 - Appendix 5 Page I
AGRICULTURAL EXTENSION AND TRAINING IN THE SOLOM0N ISLANDS
A. The Existin Situaion
Extension Services
1. The Solomon Islands' extension services have been modeled on the multipurpose type of organization with priority given to centrally determined development programs particularly in tree ctops (coconut and cocoa) and to some extent livestock. Targets were set and the extension effort concentrated in areas which are more likely to be responsive to the demands of the program. The education-information activities of the extension service tend to be neglected in order to meet production targets.
2. Land planted with tree crops or used for cattle is no longer available for food crop gardens. As a result, the latter have tended either to be pushed further and further away from the villages or alternatively, fallow periods have been shortened with the attendant risks of nutrient depletion. Crovernmentpolicy is now tending to move towards promoting the overall well-being of the smallholders with respect to botlhcash and food crop production. Greater emphasis will tlherefore need to be given to the catering of the needs of farming households and to integrated farming groups ratfiirthan to production targets for specific crops.
Staff Training
(a) Pre-Service Selection and Training
3. Applicants who are Form V school leavers with school certificates enter the pre-service year in February and are attached to a range of agricultural activities including some in the private sector, until Decenber. During this period students submit written reports at the end _ of each assignment. This gives a record of the subject matter con- cerned and demonstrates the student's absorptive ability. The super- visory officer also submits a confidential report so that over the year a good assessment can be made of the student's suitability for further training overseas (PNG, Fiji and Australia) to certificate/ diploma level. Most overseas training institutions now make this pre- service training a prerequisite for acceptance. The certificate course covers two years and the diploma three years. A student gaining a certificate will be offered a level 4 position as a Field Assistant; a diploma student would qualify for a level 5 position of Assistant Field Officer. (b) In-Service Training
4. In-country courses, either arranged domestically or sub- regionally have been offered in farm management and economics, and special courses for land use development have been held by the land resources division of the Overseas Development Administration of the UK. Staff in-service training needs are also provided at the 4 existing provincial Farmers Training Centers (FTC)as shown in Table 1.
(Reference in text: page 16, para 53) &pejndix 5 Page 2
Table 1. In-Service Training Courses-b at - Farmer Training Centers
Year Number of Courses Staff Attending
1978 6 95
1979 7 138
1980 11 228
1981 8 149
1982 6 133
1/ One or two week duration
5. Short out-of-country courses provide specialist training In beef cattle nanagenient, pig husbandry, crop protection, rural develop- ment and project planning. None exceed 3 months duration and tend ito be informal in nature and do not offer certificates or diplomas leading to promotion. Long out-of-country courses are of at least one academic year's duration and usually lead to promotion. Examples of this type of training are post-certificate diploma, PNG; diploina/MSC in extension UK; diploma in teaching (agriculture) PNG; MSC (crop protec- tion) UR. Of the 164 Solomon Islatndsmembers of staff, 59 (about 35 per cent) have undertaken in-service training overseas since 1978.
Farmer Training
6. There are at present 4 Farmer Training Centers (FTC) located at Dodo Creek, Dala, Barakoma, and Kaonasughu. The centers each have between 16 to 20 ha of developed farm land and have accommodation and classrooms for about 24 trainees. Each center is manned by an assistant Z-ieldofficer (AFO) and a field assistant plus a small supportstaff of cook/laborers. Not all the AFOs have received formal teacher training and this should receive urgent attention, - 53 - Appendix 5 Page 3
5. Farmer training takes place at the training center or at village level 4 Courses at the centers are of a relatively short duration (one or two weeks); they are essentially of a practical nature and classroom work is kept to a minimum. Taking the courses/demonstrations to the villages enables the program to be formed around an actual farming situation. However, to be really effective the extension staff should not only know the cultural practices but must be skilled in putting over the subject matter. At present hardly any of the Field Assistants have received adequate extension teaching training. This lack of training in extension methods is recognized and every effort must be made to strengthen this aspect of the extension serive. The proposed National Agricultural Training Center (NATI) would need to give this particular attention (see below). More emphasis i.s now being given to fooderops and courses given at centers and at villages are being directed towards the womenfolk - the subject matter comprising a combination of rootcrop and vegetable production, human nutrition and rural life. Unfortunately there is only one trained female Field Assistant available to conduct these courses. There is therefore, an urgent need to increase the number of female Field Assistants with formal teaching training.
Table 2. Breakdown of Fanmer Training Courses At Centers and Villages
Cattle Cocoa Minor Cash Crops Vegetables Year Atten- Atten- Atten- Atten- Courses dance Courses dance Courses dance Courses dance
1978 8 122 14 214 7 65 3 23
1979 11 167 19 277 3 41 - -
1980 11 125 17 208 2 30 5 58
1981 15 177 19 250 2 22 8 120
1982 16 193 15 261 2 20 9* 132
* In 1982 an additional 118 women attended 12 courses in vegetable cultivation, nutrition and Tural life. Appendix 5 Page 4
6. It would therefore appear that the existing extension services are ill-equippedto exencutea significant transfer of technology to an expanding rural community. The existing service has an insufficientnumber of well trained staff and lacks the support services (particularlyinformation) needed to provide them with well presented advisory material. Many of the existing staff were trained within a system that tended to emphasize selected cash crop development. Such a narrow/specific approach can often result in programs concentrating on the more advanced innovators or early adopters at the expense of the ordinary smallholder. These extension workers will need to be retrained to orient them towards viewing the farming community as a whole and to include foodcrops, casb crops and livestock as these appear in the different farming systems.
B. Future Role.of the Extension Service
7. The increasing population and the depressed prices (1979-82)of many of the primary covmodities exported by the Solomon Islands have added an urgency to increase and diversify the production of foodcrops and to process and market cash crops efficiently and economically. It is the policy of the Government to bring more people into agricultural development in order to increase fooderop production - particularly the basic root crops - and also expand opportunities for earning larger incomes from a wide range of cash crops8
8. However, if the agricultural potential of the Solomon Islands is to be realized, then substantial change in attitudes and advances in skills must be introduced into the farming system. This can, however, be achieved by (a) an adequately staffed and well trained extension service making regular contact at farm/villagelevel; and (b) provision of regular well designed farmer training courses at formal training centers and also at village level.
C. The bNeed for Improved Training Facilities
9. The poor standards of communications, the scattered popula- tion and the generally low standard of literacy and numeracy amongst rural communities places unusually severe demands on extension staff. The extension service has a crucial role to play in making available improved farm management practices. However, at present, a substantial proportion of the staff are not equipped to carry out these tasks effectively. Even those that have received formal training require regulat augmentationuf their knowledge if they are to keep up with technologicaladvances being made in agricultural practices. There is also a need to provide well-designed training in management for the more advanced farmers. - 55 -
Appendix 5 Page 5
10. As discussedearlier, theFTC at Dodo Creek is currently used to provide some specific specialist training in cocoa establishment/ production; pasture and livestock development, etc. for Field Assistant/ Demonstrators. However, none of the existing FTCs is equipped to pro- vide a broad based training that would cover basic principles of biology, basic husbandry practices for the food crops and the main cash crops, the essential elements of farm management and extension methods. At present no facilities exist in the Solomon Islands to provide this type of initial training for Field Assistant/Demonstrators.
11. Whilst training courses are offered overseas they are not oriented sufficiently to the specific needs of the Solomon Islands. The provision of an agricultural training facility concentrating on practical in-service training w.;'d go a long way to overcome some of the constraints to agricultural develupment arising from the inadequacies of the extension staff.
12. The proposed National Agricultural Training Institute (NATI) would meet this requirement. In its early years, NATI would concentrate on courses which would lead to the improvement of the overall ability of the extension staff with respect to both technical and extension skills. Ultimately, however, the aim should be the provision of training leading to the award of a certificate geared to the specific needs of the Solomon Islands agriculture. 13. Initially courses would be structured to meet specific needs; they would be of an essentially practical nature and would be of short duration ranging from two weeks to 2 or 3 months. Provision would be made for initial broad based training for level 3 staff and remedial training for levels 3 and 4; in addition provision would be made for advanced farmer training. Staff returning from overseas training would also be given an orientation course.
14. NATI should be in a position to offer (a) two courses/year of 2/3 months duration to provide basic training for about 40 Field Assistants/Demonstrators;(b) four courses/year of two week duration for about 80 existing staff requiring refresher/orientationtraining; and (c) ten courses/year of one week duration for about 150 advanced farmers. The balance of the time-about 8 weeks- would be required for conferences, syllabi preparation/revisionand leave, etc. As far as the Field Assistant/Demonstratorsare concerned, if it is assumed that there would be a 10 per cent annual wastage, then the net increase in farmerlvillagelevel extension staff would amount to around 35 per annum and this would certainly strengthen the extension service's ability to provide additional village level group training/demonstration. - 56,_
Appendix 5 Page 6
15. Responsibility for the administration of NATI would remain under Central Governiment with UANDas the executive authority. This would ensure uniformity in the standard of instruction complementary to that already being provided at the Farmer Training Centers (FTCs), simplify procuremaentof tutorial staff as required from time to time and ensure that the needs of all the provinces are catered for within the syllabi developed. 16. NATI would be headed by a Principal (see terms of reference in Appendix 6) with a deputy as an understudy. The teaching strength would be made up of an addltional deputy and one male and one female teacher. The second deputy wotuldbe responsible for running the farm with the assistance of a farm manager (level 5 or 6). This may appear to be a large complement fot-the teaching load but it should be recog- nized that the Principal will be responsible (over a 4-year period) for developing the physical facilities of the institute and the curriculum to be followed as well as organizing, along with the senior field officer (education and training), all the training courses for the extension service and leading farmers. His understudy would be avail- able to assist but would be outside the country on study tours for quite long periods. It Is envisaged that during years three and four of the Institute's existence the deputy would gradually take over from the Principal who would be phased out after 4 years. _ 57 -
Appendix 6 Page 1 TERMS OF REFERENCE FOR CONSULTANTS
A. Project Advisor
MHAND would require the assistance of a Project Advisor in the ove3all coordination and implementationof the Rural Services Project. He would advise and work closely with the Project Director. He would be knowledgeable in project management and rural development and would be experienced in projects involving the coordinationof several government agencies. The Project Advisor would be required for about 36 months. His main functions and responsibilitieswould include but not be limited to the following:
(i) Advise the Project Director on strategies and approaches in implementing the Project components;
(ii) Coordinate the consultancy work of the long-term and short-term consultants for the Project;
(iii) Work closely and directly with the Project Director in supervising and controlling the Project progress;
(iv) Offer solutions to problems that may arise in Project implementation;
(v) Determine alternative actions in cases of Project implementationdifficulties;
(vi) Assist in preparing monthly implementationplans;
(vii) Assist in tendering for equipment and services for the Project;
(viii) Assist the implementingagency in preparing regular Project progress reports;
(ix) Assist in implementingin-country training courses related to the Project
(Referencein text: page 18, para 61) _ 58 -
Appendix 6 Page 2
B. Construction and Engineerina Consultant
The services of a Construction and Engineering Consultant would be necessary in the implementationof the RuaralServices Project, to assist the Project ImplementationUnit to undertake constructionof the civil works including wharves, roads and buildings provided for diffe- rent components of the Project. The Advisor will be a senior civil engineer and his service will be required for at least 24 man-months. His main function and responsibilitieswould include but not be limlited to the following:
(i) Review the civil works requirements and assist in the choice of their final location and alignment (road) for the various project components;
(ii) Assist in the formulation of a detailed implementation schedule for the civil works - and in the determination and recruitment of the local technical staff and field level supervision needed for Project implementation;
(iii) Recommend appropriate methods for the execution of the civil works, e.g. contractual arrangements and/or force account; and assist in the preparation of civil works packages to be tendered for engineering and construction contracts;
(iv) Assist in the preparation of technical specifications and tender documents for engineering and construction contracts, and in the evaluation of bids;
(v) Review design and cost estimates changes as they are needed;
(vi) Assist in the supervision of the construction of the civil works according to adopted schedules and technical specifications, and review physical and financial progress reports for all civil works construction;
(vii) Assist in the preparation of project progress reports for submission to Central Government and external financing institutions;
(viii) Assess existing maintenance arrangements for civil works in each concerned province and assist in the formulation of a program for maintenance of roads, wharves, and building in the different project areas, to ensure their adequate maintenance after completion. - 59 _ A22endi-x 6 Page 3
C. Aricultural Economist The consultant should have a post-graduate degree in agricultural economics. He should have had at least ten years experience as an agricultural economist in a developing country in the study of smallholdersand should be cognizant of the aims and aspirations of small farmers, their psychology, their culture and the constraints which may, despite sound extension programs, preclude achieving high and remunerativecrop yields.
In general, throughoutSolomon Islands, the task of providing food is traditionally the responsibilityof women while men are involved in the production of various cash crops. Attitudes towards traditional roles are changing in some areas and these have been necessitatedby the decline of soil fertility in over-populatedareas and the production of food gardens further and further away from the coastal lowlands and the homesteads. The small proportion of the total land area suitable for arable farming in the wet lowland, tropical environment together with the 3.4 per cent annual population growth do not auger well for the nation's future ability to maintain self-sufficiencyin home grown food. Statistical information on present smallholderproduction systems is scant and is urgently needed for the quantificationof constraints to agri- cultural development and devising of appropriate agriculturalresearch programs. He will be part of the multi-disciplinaryteam of research workers, based at Dodo Creek, under the direction of the Chief Research Officer. His duties will include but not be limited to the following: (i) Establish socio-economicbase line data on present day smallholder production systems within the different areas of Solomon Islands; (ii) Draw up farm budgets and establish net returns per hectare for the important food and cash crops produced by smallholder farmers in different areas of the country;
(iii) Liaise with his co-research workers from other disciplines in assessing the socio-economicbenefits of improved varieties, potential new crops for diversification, methods of fertility maintenance and recommended changes to existing cropping systems;
(iv) Assess the practicabilityand possible impact of locally derived and imported new technology and quantify the constraints to agri- cultural development on smallholder farms;
(v) Assume responsibilityfor running the computer facilities in the Research Department;
(vi) Assist, as required by the AgriculturalDivision of the Ministry of Home Affairs and National Development, in staff and farmers training programs; and
(vii) Assist MHAND in developing an agriculturalresearch policy For 'dolomonIslands. - 60 - Appendix 6 Page 4
D. Agronomist (Food Crops)
The consultant should have a post-graduate degree in agriculturalscience, soil science, agronomy or related disciplines. He should have had several years of exper.ienceas a field crop agronomist. At least five years of his experience should have been in a developing country and he should, preferably,have under- taken agronomic research on determinants of yield in root/tuber crops, their macro- and micro-nutrientrequirements and their effect an soil fertility in various cropping systems.
It has been customary in Solomon Islands to grow the staple food crops (swee, -tato, taro, yams and cassava) after secondary forest for crop cycles of 1 or 2 .s followed by a fallow break for as long as 20 years. -The period of fallow bre .;has decreased commensurate with the increase in population and pressure from cash crops and cattle and this has resulted in a rapid decline in soil.fertility during the first cropping cycle. This fertility decline on soils overlying uplifted coral limestone has been marked especiallyby a widespread deficiency of potassium, an anomalous sufficiency of nitrogen, and a reduction in crop yields.
The consultant agronomist who will have special responsibilityfor food crops within a farming system research team will undertake studies to:
(i) establish methods of maintaining and enhancing soil fertility under shifting cultivation smallholder systems over the range of soil types and rainfall regimes within Solomon Islands;
(ii) investigat.ethe best methods of cultivation for maximizing the yield of smallholder crops under present day and improved systems over the range of soil types and rainfall regimes within Solomon Islands; and
(iii) assess the feasibility of introducing new legume, vegetable and cereal crops.
He will be part of the multi-disciplinaryteam of research workers based at Dodo Creek under the direction of the Chief Research Officer, and will be expected to liaise with:
(i) the Agronomist responsible for agronomic research on present cash crops (mainly tree crops at present) and potential new crops and to jointly undertake investigationson the inter-croppingof cash crops with food crops;
(ii) the Soil Scientists, particularly in his investigationsinto macro- and micro-nutrientdeficiencies and the deficiency toxitv inter- action of minor elements in root crops;
(iii) the Economist in assessing the socio-economicaspects of presert systems of cultivation and the effects of any new recommended systems; and (iv) the Pathologist and Entomoligst. - 61 -
Ax6 Page 5
E. Agr r mtnpi alist
MHAND will need the services of a consultant on agriculture information. He will help establish an Agriculture Information Unit (AIU) in MHAND and initiate the implementationof an appropriate agriculture information processing and disseminationprogram for the country. His services will be required for about 36 man-months. His main functions and responsibilitieswill include but not be limited to the following:
(i) Assist in establishing the objectives of an agricultural information system appropriate for the requirements of Solomon Islands;
(ii) Design and develop the institutionalarrangement and determine the physical requirements of AIU;
(iii) Assist in recruiting the staffing requirement of AIU;
(iv) Recommend the overseas fellowship requirements for senior information staff;
(v) Determine the information needs of extension and research services of the Government and develop appropriate information processing and dissemination means;
(vi) Maintain information reception or exchange arrangements with international data banks or sources;
(vii) Liase with extension workers, farmers' training ceiLtersand other possible information users on informationneeds;
(viii) Arrange with various domestic media on appropriate dissemination programs;
(ix) Train an understudy Information Officer to take charge of the AIU upon termination of the Agricultural Information Specialist's tenure; and
(x) Be responsible for the day to day operations of the AIU during its first three years of operations.
Qualifications
University degree in mass communications,agriculturaljournalism, agricultural extension, or related fields. At least 10 years experience in agricultural communications,preferably with exposure to a developing country.
(Reference in text: page 26, para 78) 62 - Appendix6 Page 6'
F. Principal for the National Agricultural TrainingInstitute (NATl)
MHAND will require the services of an expatriate Principal National Agricultural Training Institute (NATI). He will mainly assist in establishing the institute and developing the educational curricula along objectives to be set by MHAND. He will be required for a minimum of 48 man- months. His main functions and responsibilitieswill include but not be limitedto the following: (i) AssistXHAND i,.developing objectives of NATT and main educationalprograms to be undertaken;
(i.i) Be responsible for the overall development of the physical featuresof the institute; (iii) Developcurricula and syllabifor major educationprograms leadingto dgreesin agriculturalextension and relatedfields; (iv) Recommendteaehing aid materialsand equipment; (v) Assist in recruitingfaculty and support staff for ilAlI; (vi) Assist in developingin-service training courses for demonstrators,field extensionstaff and advancedfarmers; (vii) Assist in developingorientation courses for traineesor new staff in agricultural fields of the public service; (viii) Be responsiblefor the day to day overalladministration of NATI;
(ix) Preparebudgest and be responsiblefor financialoperations of NATI; (x) Liaise with other Governmentagencies such as the Ministry of Education,Training, and CulturalAffairs in matters concerningcommon disciplineareas; (xi) AdviseMHAND on the institutionaland technicalarrangements necessaryin the event that NATI shouldever be .absorbed into the nationaleducational system. (xii) To reviewand coordinatethe differenttraining courses and programsbeing organizedby NATI, FTC, etc. Qualifications Graduatedegree in AgriculturalExtension, Agriculture, or related field. Must have a minimumof 10 years of teachingexperience with at least 3 years at the level of SeniorTeacher or Principal in a tertiary establishment.
(Reference in text: page 26, para 75) - 63 -
Appendix 7
JOB DESCRIPTION FOR PROJECT DIRECTOR (LOCAL)
Main ResponsibilitY The Project Director will be responsible for the overall implementation of the Rural Services Project. He will ensure that the individual Project components are implemented in accordance with the general design and time frame in consultationwith the National CoordinatingGroup and with the resources made available for the Project.
His main responsibilitiesand functionswould include but not be limited to the following:
(i) Participate as ex-officio in the meetings of the National CoordinatingGroup as its Secretary;
(ii) Supervise the activities of the Project AdministrativeSupport Staff;
(iii) Assist MHAND in recruiting consultants and Project Advisor;
(iv) Prepare implementation schedules for all Project components;
(v) Review and approve all requests for Project procurement;
(vi) Review and recommend for approval all engineering and procurement contracts related to the Project;
(vii) Review the progress of implementationof all Project components;
(viii) Act as Project Manager for all RDCs being implementedwhile such position remains unfilled;
(ix) Participate in meetings of the Provincial CoordinatingGroups wherever set-up; and
(x) Prepare physical and financial progress reports for submission to the Central Government as well as to external financing institutions.
Qualifications
A degree in Public Administration,Business Administration, Management, Economics, Engineeringor Agriculture. At least 10 years experience in Project Management or Government service in a supervisoryposition.
(Reference in text: page 24, para 68) - 64 -
Appendix 8 Page 1
TETAtI. H') COST ESTIMAT1.S (US$ -000)
Foreign Local Item Exchange Curreacy Total
A. Rural Development Centers
1. Center facilities Civil works 309 719 1,028 Equipment 204 65 269 2. Production, processing and marketing Civil works 16 38 54 Equipment 188 21 209 3. Transport infrastructure Civil works 116 271 387 Equipment 47 5 52 4. Training and consultancy 285 204 489 5. Staff Costs - 414 414 6. Other recurrent costs 305 131 436 Base cost 1,470 1,868 3,338 Physical contingency 141 240 381 Price escalation 191272 1J6.1 'otal 2.000 2,880 4,880
B. Research and Extension
1. Research stations Civil works 116 388 .554 Equipment 228 25 253 Training and consultancy 569 63 632 Staff costs - 278 278 Other recurrent costs 188 81 269 Base cost 1,151 835 1,986 Physical contingency 67 112 179 Price escalation 222 243 465
Total 1.440 1,190 2,630
(Reference in text: page 18, para 62) -65-
Appendix 8 Page 2
Foreign Local.. Item Exchange Currency Total
2. Parmers' Training Center Civil works 29 67 96 Equipment 42 12 54 Other recurrent costs 23 24 47 Base cost 94 103 197 Physical contingency 11 14 25 Price escalation 15 23 38
Total 120 140 260
3. Field assistants' housing Civil works 59 136 195 Equipment 59 32 91
Base cost . 118 168 286 Physical contingency 15 24 39 Price escalation 17 38 55
Total 150 230 380
4. National Agricultural Training Institute Civil works 66 155 221 Equipment 69 8 77 Training and consultancy 358 39 397 Staff costs - 153 153 Other recurrent costs 125 55 180 Base cost 618 410 1,028 Physical contingency 29 52 81 Price escalation 153 128 281
Total 800 590 1,390 C. Agricultural Information Unit Civil works 14 31 45 Equipment 28 3 31 Training and consultancy 291 32 . 323 Staff costs - .64 64 Other recurrent costs 55 23 78 Base cost 388 153 541 Physical contingency 10 17 27 Price escalation 72 40 112
Total 470 210 6a0 -66-
Azppvrnd1x8 page 3
Item Exchange CurrencY Total D .lProject Implenentation Unit
Equipment 45 5 S0 Consultancy 561 139 700 Staff costs - 180 180 Other recurrentcosts 70 30 100 Base cost 676 354 1,030 Physicalcontingency 11 31 42 Priceescalation 113 95 _ 208 Total 800 480 280 Total (A to D)
Base cost 4,515 3,891 8,406 Physicalcontingecy a/ 284 490 774 Priceescalatio b/ 981 1,939 2.320 Total 5,780 5.720 11.500 ServiceCharge during construction 150 1S0 Recoveryof part of cost of PreparatoryTechnical
Assistancecl ( 50) -o Total PToject Cost 5,930 5,720 11,650
a/ Physicalcontingencies are calculatedat 15 per cent of civil works and staff costs and 10 per cent of equipmentand other recurrentcosts. b/ Price escalation is calculatea at 8.0 per cent for 1983, 7.5 per cent for 1984, 7.0 per cent for 1985 and 6.0 per cent per annum thereafter for foreign exchangecosts- and at 8.0 per cent per annum for 1983 gad 1984,and 6.0 per cent per annum thereafterfor local currency costs. c/ Representsan allowancefor maximum amountrecoverable pending establishment of actual cost incurred;amount is estimatedto be coveredby contingency allowance for price escalation. ORGANIZATIONCHiART: MINISTRY -OF ROME AFFAIRSAND NATJONAL DEVLLOQPKT
Permnent
n f a D 1sVeterlaro f ath ouer cProvincialAte FCterl ettl Division Division Division Z~tV lnig Division Dvlo's rt Dlvls ~~~~~~Division unit Auhoity x. U J J .,
e9~~~~~~~~~~~~~~~~~~~~~~~~~~~tr
S~~~~~
,' -.uJ Appendix 10
PROJECT ORGANIZATION
| *nnan.nt | IGIAND _ _ _ _ _ , Cootdfinatl" I
Pgwc - ImIIemeaa&aionProJeeI 9iincSor~~~~~~rou
LIII'-_ _ , 1 Mu~~~~~~~~~~~~~~~~~~~~~
,o4aa~ - Gru MATI MaugaE~~~~~~~F~je 0' ld l q w ~~~~~~~~~~.,.." tf HarbElCoo dinasalno _ sieng lu _ _ .__GuedUcan
RDC
man" sRaw
DOC
__ -_ - -- C.oMdiaWM
Center kl- ,
~~~~rd.Gr~~~~~~~~~~~~~~~~~~~pog 4,00r_Group* i II SnS's
I~ a
11 Ma1lybr t llrd up en Vie: 1. -2 National Aitulluioa Training Instltute (Reference in text: page 24, para 69) Chart 1: Project ImplementationCPM Netwolk Diugtd
2 34 T 6 ransgetFTC from gj(Jioma :o Acndova Harbor
cquap'rnent' Osign,conUftuct and establish kendova Harbor RSC------
eu eqt uipmnt,in constusnstructs atndov Habr S i Proor rr
|ocue wqDmsagn. construct and esraublthAio.RokeS a RS - t~~~~~~~~~1 < Pooure c
g7 I _C tOrf m e qi sis.construct ndestabish Nort ftnint4i CSe
CD WatDsi tonsslutt A eNablishSanta fu… RSC… PnU,rec;u-. establis Rts.araf Substation a SantaCna Consultants ,/
.. 1 \ equipmcnt D5esign,cttrttns wandemoshalf .wbonaKm RSC vna A
Px\\ S rabl~isimPfovtetenhs at AjH lb \' Do do CSru tsurch Suaion 11 ESaibliShimprovtemnts Al a i,
Procurt - 17 IC equptnentEstablish Aqru-avu Resc-h Substation__
O I \ ~~~~~Esrt>bt'snAIU l _Priurt 1IU
teqwtpmr' CilbEish NA'Il - - -
1 ConsitrucIFsFA houws sr XI \~~Cntuc Ahoe ______J I (Ut -s~- n -- ………e -. -AXnual g asuUlL ---- o 4____o _ 70 - Ai,pendix 11 Page 2
ProJect Activiti±es-J_by Source of External Financinp
Sourct ofExternal SourcSe of External Financing ~'Activity Description Activity 'Number 1. Asian DevelopmentBank 1 - 2 Establish PIU; recruit consiltants 2 - 5 Procure equipment 5 - 29 Design, construct and establish Rendova Harbor RDC 6 - 8 Procure equipment 8 - 33 Design, construct and establish Harau Sound RDC 9 - 12 Procure equipment 12 - 36 Desi$n, construct and establish Af ro-Rokera RDC 13 - 17 Procure equipment 17 - 38 Design, construct and establish Northwest Peninsula RDC 18 - 23 Procure equipment 23 - 41 Design, construct -atd establish Santa Cruz RDC 21 - 31 Procure equipment 31 - 45 Design, construct and establish Susubona-Kaevanga RDC 22 - 32 Procure equipment 32 - 45 Design, construct and establish Hakama RDC 2. International Development Association 1 - 2 Recruit consultants 2 - 19 Establish improvements at Dodo Creek Research Station 2 - 20 Establish improvements at Dala Research Substation S - 30 Establish Research Substation at Rendova Harbor 10 - 14 Procure equlpment 14 - 37 Establish Avu-avu Research Substation 23 - 42 Establish Research Substation at Santa Cruz 2 - 11 Establish Agricultural Information Unit 2 - 25 Construct Field Assistants' houses 3. International Fund for Agricultural Development 5 ** 28 Tran4fer Farmers' TrainIng Center fr'irn narakoma to iVendova Harbor 2 -;7 Procure equlpment 7 - 24 Establish the National Agricultural Tra ining Institute -71- Ar,nrdix1 Page 3
4. ADB Technic' ai-_tan 3 _ 4 Conduct baselin sur?vey 15 - 16 Conduct annuaL survey 26 - 27 Conduct annual survey 34 - 35 Conduct annual survey 39 - 40 Conduct asnual survey 43 - 44 Conduct terminai survey
a/ See CPM Network Diagramn for sequence and numbering of activities.
f _ 72 - Appendix 11 Page 4
Chart 2: Implementation Schedule by Project Component
1984 1985 1986 1987 1988 1989
A. Rural Development Centers
1. Rendova Harbor Civil works
Center facilities r- t; 'i Housing .____ Wharf Equipment Farm machinery Office equipment Transport equipment Furniture . Training
2. Marau Sound Civil works ; Center facilities Housing Road maintenance L_' L__ Equipment . Farm machinery Office equipment Transport equipment Furniture
Training ___
3. Afro-Rokera . . Civil workslw Center facilities 1 = Housing ______Wharf _ Equipment Farm machinery Office equipment Transport equipment Furniture £Z=
Training _ _,_!_ _ - 73 - Appendix.1I Page .5
_984 1985 1986 1987 1988 ,989
4. Northwest Peninsula Civil works Center facilities ------Housing =--__ Road = Wharf. . . Equipment Farm machinery Office equipment Transport equipment Furniture Training ___. _
5. Santa Cruz Civil works
Center facilities __ .______Housing _ __. __ ._ Equipment Farm machinery Office equipment Transport equipment Furniture Training
6. Susubona-Kaevanga Civil works
Center facilities L Housing _ __ . Road C __.: ___ Wharf
* Equipment Farm machinery Office equipment r- Transport equipment Furniture Training 747 _ Appendix 11 Page 6
f a-$ .__ ._6 1984 1985 1986 1987 1988 1989
7. Hakama Civil works Center facilities Housing Wharf L_I__ Equipment Farm machinery Office equipment - Transport equipment __ _ Furniture Training
B. Research and Extension
1. Research Civil works Dodo Creek r Dala Rendova Harbor Avu-avu r_,._. _____ Santa Cruz Equipment Farm machinery ,Laboratory equipment Office equipment Transport equipment Furniture:
Training and Consultanrcy . . Agricult'iralEconomis It__._J Agronomist I___- ____ Short Term Fellowships
2. Farmer's Training Center Civil works _._._I__ Equipment Farm machinery -1 Other equipment __=_,_| , I ______!__ - 75 _
Page 7
1984 1985 1986 1,987 988 1989
3. Field Assistants' Housing Civil works L = =ZZ, Equipment
4. National Agricultural Training InstAtute Civil wv: =ks Equipment ___= = Training and Consultancy Principal 5 _ = . :_ Pe llowshipa
C. ricultural Tnforuatiom Un t Civil works Equipment Training and Consultancy Agri. info. Specialist
Fellowships = __ _
D. Project IUlesentation Unit Equipment Training and Consultancy
Project Advisor : 1 = Construction Advisor C = _____i Short Term Consultants I Fellowships __=_=_L Workshops __ __ - -
Note: Dividing line in civil works bar indicates design and tendering period. -76-Apndx1
Table Is STAFF RtUIREMENTS BY YEAR
1984 1985 1986 1907 Total
Ruraltiuvelugmetn Centers L-5> 2 3 4 9 L-4 3 5 8 16 L-3- 5 4 5 14 *L-2 7 7 10 24 Subtotal 17 19 27 63
L-5 4 1 1 1 7 L-4 3 1 4 1.-3 , 6 6 6 4 22 L-5 3 3 Subtotal 16 8 7 S 36
N'ALLooal Agricultural Training institute *i-6 2 2 L-5 2 2 L-4 I I L-3 3 3 Subtotal 8 8 Agricultural lnformation Unit 1.-6 1 1 1 2 L-3 2 2 Subtotal 1 3 4 ProAect LElementation Unit 1.- IO 1 L-5 2 . 2 L-4 * 1 L-3 3 3 S~lItoiLc1l 7 7
Total PIroject I.-IU 1 1 L-6 1 3 4 1.-5 6 5 4 5 20 .- 4 4 5 5 8 22 _~-3 9 16 10 9 44 L-2 .3 7 7 10 27 Total 24 36 26 32 118
(Reference in text: page 2 7 , par& 79) 0LLOCATIOU OF Appendix 13
.LLOCATION OF PROCEEDS OF BANK LOAN Total Base Cost Amt6untof Bank Loan TProcuremsat, Category/Item (US$9000) _$4D) Method
At. Civil Works
1. Rural,Development Centers
S. Center facilities 1,028 776 LCB ,b. Piroduction,processing and marketing 54 51 LCB c. Transport Infrastructure 387 292 LCB/FA Subtotal (A) 1,469 1,109 .3B. EquIpment
1. Rural Development Centers
a. Cetnterfacilities 2C69 246 ICB/IS/LP b. Production, processing and marketing 209 202 ICB/IS/LP c. Transport Infrastructure 52 50 TS
i. Project Implementation Unit 50 48 IS/LP Subtotal (B) 580 546
C. Training and Consultancy
1. Rural Development Centers
a. Training 389 328 BG b. Consultancy 100 96 BC
2. Project Implementation Unit
a. Training 160 149 BG b. Consultancy 540 502 BG Subtotal (C) 1,189 1,075
D. Operatiag Cost
1. Rural Development Centers
a. Staff costs 414 269 no dtract proculemern b. Other recurrent costs 436 390
2. Project Implementation Unit
a. Staff costs 180 117 b. Administrative costs 100 90 Subtotal (D) 1,130 866 Total Base Cost 4,368 3,596 Contingencies 1,792 1,404 IDC 150 Total 6,160 5.150 _- LCB - Local competitive bidding LS - International Shopping FA - Force Account LP - Local Purchase ICB - International Competitive Bidding EG - Bank Guidelines
(Reference in Text: page 27, para 81) - 78 -
Appendix 14 Page 1
ECONOMIC AND FINANCIAL ANALYSES
1. The economic and financial analyses of the Project and its components have teen carried out based on assumptions which are discussed below. The Project is to be implemented over a six--year period from 1984 to 1989.
1. Commodity Prices
2. The financial prices of agricultural inputs and outputs are based on prices currently prevailing in Honiara and average transport costs to the different provinces. Some of these prices (e.g. for copra and cocoa) are fixed by the Government whereas others are influenced by market forces. The financial and economic prices of these inputs and outputs are shown in Table 1. The economic prices of imported materials such as fertilizer are derived from world market prices with adjustments for transport and handling. Similarly world market prices of exported commodities are adjusted for transport and handling to obtain economic prices. Economic prices of other products are taken to be the same as the financial prices.
2. Wages
3. Labor supply in the rural areas of Solomon Islands is adequate to meet the apparent demand for labor; underemploymenthas been observed especially when buying prices for prime cash crops (mainly copra) have been inordinately low. The current rate for farm and unskilled labor is SI$2.50 per man-day. The "wage reservation rate" is generally close to SI$2.00 per man-day, thus the economic cost of agricultural labor is taken at 80 per cent of the market wage rate.
3. Farm Budgets
4. The typical farm household crop budget is shown in Table 2. The household has access to 1.0-2.0 ha of coconut stands and about 0.25 ha of garden plot in which are raised sweet potato (70 per cent), taro (20 per cent) and yam (10 per cent). All the copra produced and half of the garden products are sold.
4. Quantified Benefits
(a) Provincial Farm
5. The financial and economic analyses ;f the operations of a rehabilitated provincial farm of 80 ha in Rendova Harbor are presented in Tables 3 and 4. The 80 ha of farm land now planted with old (circa 1908) coconuts will be replanted with hybrid coconuts. The coconuts will be
(Reference in text: page 33, paras 105 and 106) 79 -
Appendix 14 Page 2
intercropped with cacao and cattle (75 heifers and 3 bulls) will be raised underneath. The coocnuts will start bearing in year 6 and cacao in year 8. Peak annual yields will be 4.0 mt/ha of copra, 1.13 mt/ha (at 75 per cent effectivity for intercropping yield) of cocoa, and 3 nt of beef. The operating and management requirements of the farm will v include 5 permanent staff, 20,000 man-days per' year by year 11, and about 9.0 mt of TSP and 25.4 mt of MOP fertilizers per year.
(b) Portable Sawmills
6. There will be a portable sawmill in each of five RDCs. Conservatively, a portable sawmill would be able to produce about 3,000 eu m of sawn timber at the rate of 20 cu m per day and about 150 working days. _ AC) - ~pA jj 14 Page 3
Table 1. Input and Output Prices (1983 SI Dollars)
Financial Economic World Harket I t e m Unit Price Price Price a/
Fert i1izer (Honiara) Amnmoniumsulfate mt 267 282 127 TSP mt 431 402 247 MOP mt 297 294 139
Farm labor md 2.50 2.00
Products (Farmgate) Copra mt 220 480 641 Cocoa mt 1,000 1,550 1,838 Beef, weaner (liveweight) mt 900 1,105 Beef, cull cow (liveweight) mt 650 800 Sawn timber cu a 25 100 444 Sweet potato Mt 130 130 Taro Mt 440 440 Yam Mt 150 150
aI World Bank estimates for 1990 at 1983 constant prices.
/ - 81 - Ag£gdix 14 PBS& 4
Table 2 . Crop Budgets, Swallholder Farm, With anld Without Project (SI Dollars)
With Training & With Without Infrastructure Research Project Benefits Benefits : ______(Year 1) (Year 6) (Year 11)
Production (Mnt) Copra, 1.0-2.0 ha 1.000 1.100 1.100 Sweet potato, 0.17 ha, 2 crolps 3.400 3.740 6.800 Taro, 0.05 ha 0.125 0.,138 0.200 Yom, 0.03 hia 0.300 0.330 0.330
Revenues a/ Copra 220 242 242 Sweet potato 221 243 442 Taro 28 31 44 Yam 22 24 24 Total Revenues 491 540 752
Expenses Labor Transport 90 90 143 Total Expenses 90 90 143
Net Cash Flow 401 450 609
Incremental Benefit - 49 208 a/ Assusming all copra produced and half the garden products are sold. - 82 - AJMdi 14 Page 5
Table 3. Casb Flows, Rendova Harbor Provincial Fan; (SI$ '000)
1 2-5 6 7 8 9 10 11-25
Production (mt) Copra 40 80 120 176 240 320 Cocoa 9 12 45 90 Beef, weiner 2 2 2 2 2 2 2 Beef, cull cows 1 1 1I 1 1 1 Revenues Copra 8.8 17.6 26.4 38.7 52.8 70.4 Cocoa. 9.0 12.0 45.0 90.0 Beef 2.7 2.7 2.7 2.7 2.7 2.7 2.7 To1tal 2.7 11.5 20.3 38.1 53.4 100.5 163.1
Expenses Capital costs 45.0 Personnel costs Staff salaries 18.0 18.0 18.0 18.0 18.0 18.0 18.0 18.0 Labor wages 18.0 10.0 20.0 26.0 32.0 38.0 44.0 50.0 Fuel and equipment maintenance 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 Fertilizer 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 Total 104.5 51.5 61.5 67.5 73.5 79,5 85.5 91.5 Net Cash Flow (104.5) ( 48.8) ( 50.0) (47.2) < 35.4) ( 26.1) 15.0 71.6
FIRR: 7%
.~~~ - 83 - Aeedix 14 Page 6
Table 4. Econmc;k Internal Rate of Return: Rendeva Harbor ProVincial Farm (SI$ '000)
1 2-5 6 7 8 9 10 11-25
Benefits Copra 19 38 58 b4 115 154 Cocoa 14 19 70 140 Beef 3 3 3 3 3 3 3 Total 3 22 41 75 106 188 291
Costs Capital Costs 45 Personnel costs Staff 18 18 18 18 18 18 18 18 Labor 14 e 16 21 26 30 35 40 Fuel and equipment maintenance 9 9 9 9 9 9 9 9 Fertilizer 13 13 13 13 13 13 13 13 Total 99 48 56 61 66 70 75 80
Net Benefits (99) (45) ( 34)( 20) 9 36 113 217
EIIR: 20Z
(Reference in text: page 33, para 107) _ 84 ,, , , . X~~~~~~~~Apedix1'4 g , ~~~~~~~~~~~Page8
Table 5: Internal Returns - Mobile Sawmill-/ (SI$ '000)
Capital Operating Gross Net FIRR/ Year Cost Cost Benefits Benefits EIRR (%)
A. Iinancial Internal Rate of Return
1 10 ( 10) 2 21 (21) 3-21 l11 165 54
FIRR 120
B. Economic Internal Rate of Return
1 10 ( 10) 2 20 (20) 3-21 100 300 200
ElIRR 300
a/ One sawmill producing 3,900 cu m of sawn timber per year.
(Reference in text: page 33, para 107)