World Bank Document

RE'TURNTOf RETURN~ro RESTRICTED REPORTS DESK| Report No. PA-99 WITHIN FILECOPY ONE WEEK Public Disclosure Authorized

This report is for official use only by the Bank Group and specificallyauthorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibilityfor the accuracy or completenessof the report.

INTERNATIONALBANK FOR RECONSTRUCTIONAND DEVELOPMENT INTERNATIONALDEVELOPMENT ASSOCIATION Public Disclosure Authorized

APPRAISAL OF

THE ZOU-BORGOU COTTON PROJECT

DAHOMEY Public Disclosure Authorized

January 21, 1972 Public Disclosure Authorized

Agriculture Projects Department CURRENCYEQUIVALENTS

Before January lot 1972 Since January lot 1972 US$1 . CFAF 277.71 CFAF 255.79 CFA! 1 _ US$0.0036 US$0.0039 CFAF 1 million - US$3,600 US$3,9094

WEIGRTSAND MEASURES

Metric System

CONVERSIONRATES

1 ton of seed cotton - about 380 kg cotton lint 550 kg cotton seed for sale 70 kg losses and seed for sowing 1 ton of paddy - 650 kg rice 1 ton of unshelled groundnuts - 700 kg shelled groundnuts

ABBREVIATIONS

BCEAO - Banque Centrale des Etats de l'Afrique Occidentale BDD - Banque Dahomeenne de Developpement CARDER - Centre d'Action Regional pour le Developpement Rural CCCE - Caisse Centrale de Cooperation Econonique CFDT - Compagnie Francaise pour le Developpement des Fibres Textiles CIDR - Compagnie Internationale de Developpement Rural FAC - Fonds d'Aide et de Cooperation FAS - Fonds Autonome de Stabilisation et de Soutien des Prix des Produits a l'Exportation FED - European Development Fund IRAT - Institut de Recherches Agronomiques Tropicales et des Cultures Vivrieres IRCT - Institut de Recherches du Coton et des Textiles Exotiques IRRO - Institut de Recherches pour les Huiles et Oleagineux OCAD - Office de Commercialisation Agricole du Dahomey ORSTOM - Office de la Recherche Scientifique et Technique d'Outre- Mer PMWA - IBRD's Permanent Mission to Western Africa PWD - Public Works Department SATEC - Societe d'Aide Technique et de Cooperation SONACO - Societe Nationale Agricole pour le Coton SONADER - Societe Nationale pour le Developpement Rural du Dahomey

FISCAL YEAR

January 1 - December 31 DARGMEY

ZOU-BORGOUCOTTON PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS...... i-ii

1. INTRODUCTION...... 1

II. BACKGROUND... 1

III. THE PROJECT AREA 3...... 3

IV. THE PROJECT ...... o...o...... 4

A. Description ...... 4 B. Detailed Features .5...... 5 C. Field Operations ...... 7 D. Credit Arrangementsand Supply of Inputs .... 8 E. Development Schedule...... 9

V. COST ESTDMATES AND FINANCING ...... 9

A. Project Costs...... 9 B. Financial Arrangements ...... il C. Procurement and Disbursement ...... 12 D. Accounts and Audits ...... 13

VI. ORGANIZATION AND MANAGEMENT ...... 14

A. Project Entities ...... 14 B. Staffing and Training ...... 16

This report is based on the findings of an IDA appraisalmission composed of Messrs. K. Haasjes and K. Ringskog (IDA), M. Palein (PMWA),J. Cantournet and R. Chateau (consultants)which visited Dahomey in January/February1971. In January 1972, the report vas revised to take into accouantthe effects of the dollar devaluation. -2-

Page No.

VII. YIELDS AND PRODUCTION,MARKETING, FARMERS' BENEFITS AND GOVERNMENTREVENUES ...... 17

A. Yields and Production . . .17 B. Markets and Prices . . .17 C. Farmners' Benefits . . .18 D. Impact of Project on Government Revenues and Expenditures.. 19 VIII. BENEFITS ANDJUSTIFICATION .19

IX. AGREEMENTSREACHED AND RECOMMENDATION .20

ANNEXES

1. General Agricultural Statistics Table 1 Agricultural Exports 1965-1969 Table 2 1970 Production and Average Yields of Annual Crops Table 3 Cotton Areas, Production and Yields (1961-1970) Table 4 Estimated Value of Crops (1966-1970)

2. Societe Nationale Agricole pour le Coton (SONACO)

3. Agricultural Credit Table 1 Terms for Lending to Farners or Village Groupe

4. Fonds Autonome de Stabilisation et de Soutien des Prix des Produits a l'Exportation (FAS) Table 1 Minimum Producer Prices and Total Price Support

5. Project Costs Table 1 Project Cost Estimates Table 2 Housing and Building Construction Table 3 Project Staff Requirements Table 4 Vehicle Requirements Table 5 Revolving Agricultural Credit Fund Table 6 Total Agricultural Extension Costs Table 7 Construction Costs Ginneries and Costa of Rice Hullers Table 8 Road Improvement Costs Table 9 Research Cos ts

6. Cotton Ginneries Table 1 Existing and Proposed Ginneries Table 2 Cotton Production and Ginning Capacity in the Project Area - 3 -

7. CroppiftgPatterns, Inputs, Yields, Production and Prices Table 1 Labor Requirementfor Various Crops Table 2 Areas, Yields and Production Projectionsfor Project Crops Table 3 Areas, Yields and Production Projections for Cotton in the Zou (1971-1974) Table 4 Areas, Yields and Production Projections for Cotton in the Borgou (1971-1974)

8. Feeder Road ImprovementProgram Table 1 Proposed Program Table 2 Equipment to be Hired Table 3 Economic Analysis

9. Research Institutes and Proposed Subjects for Research

10. Farm Models and Budgets Table 1 Areas Cropped on a Typical Farm Table 2 Typical Farm Budgets for the Zou Table 3 Typical Farm Budgets for North Borgou Table 4 Typical Farm Budgets for South Borgou Table 5 Minimum Producer Prices 1970/71

11. Cotton Seed Production

12. Project Financing and Disbursement Table 1 Project Financing Table 2 Disbursement IDA Credit Table 3 Estimated Schedule of Disbursement

13. Compagnie Francaise pour le Developpementdes Fibres Textiles (CFDT)

14. Societe d'Aide Technique et de Cooperation (SATEC)

15. Arrangements between Government and CFDT Table 1 Projected Benefits and Profit Sharing from Cotton Export

16. Cotton Market Prospects Table 1 Recent Trends in the World Cotton Economy Table 2 Recent Trends in World Cotton Prices

17. Economic Rate of Return Calculation Table 1 Economic Rate of Return Table 2 Surplus on Ginning, Marketing and Exporting of Incremental Output Table 3 Ginning and Exporting Costs, Cotton Production and Ginning Outturn Table 4 Actual and Projected Sales Prices of Cotton Lint and Seed Table 5 Foreign Exchange Benefits -4 -

18. Impact on GovernmentBudget Table 1 GovernmentExpenditures and Revenues Table 2 Fiscal Revenues

CHART

Project Organization

MAPS

1. Agriculture and Rainfall 2. AdministrativeUnits and Project Area 3. Feeder Road Program DAHOMEY

ZOU-BORGOUCOTTON PROJECT

SUMMARYAND CONCLUSIONS

i. This report appraises a project for the developmentof cotton and food crop production in the Center and North of Dahomey. The project-would be the Bank Group's second operation for agriculturein Dahomey. 1/ Under the project the cotton area would expand from 29,000 ha on 29,000 farms to 59,Q00 ha on 41,000 faris, and project area production would increase from 25,0 tons in 1910 to 56,000 tons of seed cotton by 1974. Cotton is Dahomey's main export earner after oil palm products -- and recently cocoa smuggled from Nigeria - and accounts for 14% of exports. Production generatedby the project would amount, by 1974, to about 67% of the country's total cotton prQd3Âctàon.Project produced cotton would be exported but this would not have a significant impact on world market prices since Dahomey's exports of the crop would constitute only about 0.3% of world trade. The project represents one of the best means, foreseeableat this time, of substantiallyim- eproving the standard of living of a large segment of the rural population and improving Dahomey's balance of payments.

ii. The project would be the final phase of a long term program designed to establish a cotton industry in Dahomey capable of competing efficientlyon world markets. Until now, the program, which started in 1964, has been supported largely with financial aid from France and from the European Common Market. The project would be carried out over a four-year period commencing in 1971. Production would be increased by expanding the cotton area; by împrovîng credit, extension and marketing services, as well as communicationsin the project area in coordinationwith the IDA-financed highway maintenanceprogram; and by providing cotton ginning facilities. The project would also provide rice milling facilities; funds for applied research; and funds for a feasibility study for diversification in the project area.

iii. Project costs are estimated at US$12.7 million with a foreign exchange component of 60%, or US$7.6 million; about US$5,9 million would be for creating, initial staffing and equipping Societe Nationale Agricole pour le COTONQSONACO) to administer extension, credit and marketing services in the project area. Direct investments in ginneries, housing, offices, equipment and road improvementaccounts for 27% of project costs. IDA would finance 48% of total project costs; FAC 24.5%; and Government, largely from project generated funds, 27.5%. The½prôposedIDA credit would meet costs of building construction,purchase of equipment and vehicles, feeder road construction,revolving farm credit fund, research, and the feasibility

1/ IDA granted a credit of US$4.6 million for oil palm and food crop development in 1969 (144-DA,Hinvi Project). j i - study, and would be equivalent to 80% of the project's foreign exchange cost. Procurement would be by international competitive bidding where orders and contracts are of a sufficient value to justify this procedure, and goods and services procured in this way are estimated to have a value of US$8.0 million. 1/ iv. The Ministry of Rural Developmentand Cooperationwould be responsiblefor the project through the recently establishedSociete Nationale Agricole pour le Coton (SeNACO--ihic-Iwoul-d iégage--Cotpagnie Francaise pour le Developpement des Fibres Textiles (CFDT) and Societe d'Aide Technique et de Cooperation (SATEC), both non-profit oriented French technical assistance agencies, to provide personnei to manageg operations in the two pro4ect districtswhere they have been responsiblefor agricultural developmentsince 1965. A joint venture arrangementwould be established under which CFDT w-uld manage ail ginneries in the project area: three owned by CFDT, and three owned by Governmentincluding the two new ginneries to be constructedunder'the project. Most project funds would be handled throughSONACO. v. At full developmentthe project would double foreign exchange earnings from cotton and it vould raise the income of about 41,000 partici- pating farmers. Dahomey'sannual export earnings from cotton at the end of the project developmentperiod are estimated at US$20 million as compared to estimatedexport earnings from cotton of US$9.5 million in 1970/71. Based on the Bank's price forecastsand assuming a project life of 10 years the economic rate of return from investmentin the project is estimated at 34%. A sensitivityanalysis shows that, if cotton yields or prices were 10% less than projected, the return would be 19Z. The return is calculatedon the basis of incremental benefits generated by the project. These are high rates of return because of (i) previous sunk investments made by the Government with French assistance, particularly in extension services, processing facilities and roads, and (ii) the high family labor component. vi. Estimated revenues to Government from project operations would permit Government to maintain present producer prices up to 1977 despite anticipateddownward trends in world cotton prices and, in addition, to finance fully extension costs and gradually decreasingfertilizer subsidies. The average yield of seed cotton in the project area is estimated to increase from 880 kg/ha in 1970 to 950 kg/ha in 1974. Other crops would also benefit from the project, principallyfrom the residual effect of fertilizerapplied to cotton. The average farm net cash income is estimated to increase from a range of CFAF 3-10,000 (US$12-40)at present to one of CFAF 20-60,000 (US$78-234)by 1974. vii. The project is suitable for an IDA credit of US$6.1 million.

1/ This includes all purchases of annual farm inputs financed by the revolving credit fund during the credit disbursementperiod. DAHOMEY

ZOU-BORGOUCOTTON PROJECT

I. INTRODUCTION

1.01 The Dahomey Governmenthas requested an IDA credit to help finance further developmentof the productionof cotton and food crops. The project vas identifiedin 1967 and, at the requestof "theGovernment, prepared in 1970 by the Bank's Permanent Mission in Western Africa (PMWA), assisted by the Compagnie Francaise pour le Developpementdes Fibres Textiles (CFDT) and the Societe d'Aide Technique et de Cooperation (SATEC). Delay vas due' to political instability. The proposed project would be the Bank Group's second operation in agriculture in Dahomey. IDA granted a credit of US$4.6 million for oil palm and food crops developmentin 1969 (144-DA,Hinvi Project). Problems are being experiencedwith the Hinvi Project. While oil palm plantings have been made as planned and are well maintained,the annual crop program is far behind schedule, and, in addition, a substantial cost over-run has been incurred on the palm oil mill which is to be financed under the Credit 144. The project is under close supervision,and several changes in organizationand operation are underway.

1.02 This report is based on the findings of an IDA appraisal mission composed of Messrs. K. HaasJ*BaandK. Rîngskog (IDA), M. Palein (PMWA), J. Cantournetand R. Chatéan (consultants),whîch visited Dahomey in January/February1971. Messrs. Darribere and Casse (FAC) appraised the project at the same time for possible FAC participationin its financing.

II. BACKGROUND

2.01 General. Dahomey has an area of approximately120,000 km, broadly divided into two ecological zones: tropical rain forest in the South including the Zou district and savannah in the North (Borgou and Atakora districts; see Map 1). Soils are generally poor.

2.02 Population in 1970 was about 2.8 million; it is growing at about 2.8% annually; and 50% of it is concentrated in the three southern districts which account for only 10% of the country's total area (see Map 2). The vast majority of the population is engaged in agriculture.

2.03 In 1970 GDP totalled CFAF 69 billion (US$250 million), equivalent to US$80 per capita, of which agriculture contributed 40%. The Government's poor financialposition is a major constraint for development. The 1969 budget deficit reached an all time high of about CFAF 1,360 million (US$4.9 million). France, through direct budget support amnountingto about US$1.8 million per annum in recent years has been absorbing a large part of such deficits. Developmentprograms have been mainly financed from foreign sources, such as the European DevelopmentFund (FED), the French Fonds d'Aide et de Cooperation(FAC), and IDA. Debt service payments have risen somewhat over recent years and are estimatedto have required 10% of export earnings in 1970.

2.04 AgricultureSector. Over the last five years GDF has increasedby 5.5% per annum. The rate of growth in agriculturewas 8% in 1969, and 5.6% in 1970. Agriculturalproducts which provide about 90% of all exporteswere valued in 1969 at US$30 million equivalent,with palm products accounting for about 31% and cotton for about 14Z (see Annex 1, Table 1). Other agricultural exports include groundnuts,and cocoa smuggled from Nigeria. Annual rice imports amount to about 7,000 tons valued at US$1 million, as compared to national productionof some 1,300 tons in 1970. Food crops, mainly for subsistence,occupy about 66Z of the cultivated area, about 10% of the country's total area. Maize is the main commodity- nearly 70% of cereal production (see Annex 1, Table 2). Livestock is importantin the North, but Dahomey is a net importer of about 10,000 head of cattle annually from Niger, mainly for urban consumptionin the South.

2.05 Cotton Production. Seed cotton production grew rapidly from 1,400 tons in 1964 to 35,000 tons in 1970. Cotton acreagehas expanded considerably, and productionincreases have been brought about by higher yielding varieties of superior staple length and lint output 1/; improved extension services; and efficient arrangements for providing credit and inputs to farmers, and for purchasing, ginning and marketing the crop.

2.06 National average yields increased from 270 kg/ha in the period 1961-1964 to 815 kg/ha in 1968/69, and rose to a record level of 918 kg/ha in 1970 (Annex 1, Table 3). Cultivationmethods have reached a relatively high level; use of insecticidesis mandatory throughout the country, and in 1970 fertilizerswere used on 66% of total cotton area.

2.07 Institutions. Responsibility for agricultural development policy and planning is shared by the Ministry of Economic Affairs and Planning - broad policy - and the Ministry of Rural Development and Cooperation - detailed agricultural planning. Neither Ministry has had much impact,_and what development has occurred has been due to aid donors requiring that the projects they finance are carried out by autonomous development agencies within the frameworkof policies agreed with the two Ministries. In the case of oil palm development,for example, the agency concernedis Dahomean, SocieteNationale pour le DeveloppementRural du Dahomey (SONADER),but even in this case the agency has received much foreign technical assistance in planning. In the case of cotton programs, foreign developmentcompanies have been used, SATEC in the Zou region, and CFDT in the Borgou. Recently Government estab'iishda national ageney, Societe Nationale Agricole pour le Coton (SONACO)to take responsibilityfor cotton development (see para 6.02 and Annex 2).

1/ Allen-333 (1"-1/32" staple, 38% lint to seed cotton) in the South (introduction in the Zou started in 1962); BJA-592 (1"-1/16"utaple, 38% lint to seed cotton) in the North (introduction in the Borgou started in 1965). -3-

2.08 In the absence of its own national research agency, Dahomey contractsout its agriculturalresearch to well establishedand experienced French institutes, sharing the cost with the French Government. This system is common to most francophone countries in the West Africa and works satisfactorily. In the case of the project described in this report research bajk-up would be provided by Institut de Recherches Agronomiques Tropicales et des Cultures Vivrieres (IRAT) - food crops; Institut de Recherches du Coton et des Textiles Exotiques (IRT) - cotton; and Institut de Recherches pour les Huiles et Oleagineux (IR}IO) - groundnuts.

2.09 Institutional credit has not been available for agricultural production since 1963 when the Banque Dahomeene de Developpement(BDD) ceased lending for agriculturedue to poor loan recovery. SATEC and CFDT operate heavily_supeervisedcredit schemes for cotton growers.-Tiése work we11t'since seasonal farm input credits are made in kind at 8% interest and repayments deducted mandatorily from borrovers' cotton sales proceeds. Details of these credit operations are at Annex 3. Funds for these credit operations are provided by Fonds Autonome de Stabilisationet de Soutien des Prix des Produits a l'Exportation(FAS) from the surpluses it accrues in its export commodity price stabilizatfiônactivities. These activitiesinvolve fixing, in conjunction with the Ministry of Economic Affairs and Planning, annual producer prices. When export proceeds exceed the sum of the producer price and export costs, funds accrue to PAS; when proceeds are lower, FAS meets the deficit. As shown in Annex 4, FAS operations are small in scale. The role of FAS in cotton marketing and in the proposed project is described in para 6.06.

2.10 There are few fully fledged cooperativesocieties in Dahomey; but some 400 village groups, a form of mutual guaranteesociety without legal status, aré inÏexistenceand have a total of more than 13,000 members. This movement is most advanced in the Zou where farmers must be group members to participatein the cotton developmentprogram. SATEC channels its cotton credits through these groups and the recovery ratio of such credits is 100%. In the Borgou about 25% of cotton farmers are group members.

III. THE PROJECT AREA

3.01 Location, Population and Land Tenure. The proJect area is situated in the Center and North, covers about 70,000 km -- 60% of the country's total area -- and comprises the departments Zou and Borgou (see Map 2). Population is estimated at about 840,000 in 1969.-

3.02 The project area produces the bulk of Dahomey's cotton. 0f a total of about 85,500 farms, 29,000 now grow cotton. Average farm family size in the Borgou is 11 persons who cultivate,on average, 5 ha annually;and in the Zou seven persons who cultivate 3.5 ha. Most farmers have rights of usufruct to their land and this does not impede the adoption of improved farming practices. - 4 -

3.03 Climate and Soils. Annual rainfall is about 900 mm in a single wet season in the Borgou and about 1,300 mm in the Zou in two seasons. The project area covers four climatic zones ranging from a savannah-type in the North to a tropical coastal climate in the South. Soils and climate are suitable for cotton cultivation.

3.04 Communications. The main road network in the project area comprises about 1,600 km of national roads maintainedby the Public Works Department (PWD). PWD is being reorganizedand equipped under an IDA-financedhighway maintenance program (IDA Credit No. 215-DA; US$3.5 million). National roads serve the four existing ginning centers: Kandi, Savalou, Parakou and Bohicon (see Map 3). All are linked by road to Cotonou and the two latter have rail connections. More than 3,000 km of departmental or tertiary roads link fields to villages, and villages to national roads. Many tertiary roads are impass- able by trucks in the wet season. While sub-prefecturesare supposed to maintain these roads, they do little for lack of equipment and funds. About 1,000 km of these roads serve as "cotton roads", and a tertiary road improvement program would be initiated under the proposed project.

IV. THE PROJECT

A. Description

4.01 The project comprises increasingthe area of cotton grown in the Zou and Borgou departmentsby some 30,000 ha to 59,000 ha. The expansion in area would be brought about by increasingthe number of cotton growers from 29,000 at present to 41,000 in 1974, and by increasingthe area under cotton on existing farms. The additional cotton growers would come from farmers already in the two regions but who do not grow cotton at present. In addition to increasingcotton production, the productivityof other crops grown in rotationwith cotton would be improved through the residual effects of fertilizersapplied to the cotton. A further component of the project would be the increase of rice production through clearing and improvingwater control on some 3,300 ha of low lying land, and providing rice milling facilities. The project would be the final phase of a cotton development project initiated by French technicalassistance in 1963 and financed since that time by France and the Government. Apart from the changes in organization described in Chapter VI, project procedureswould be those proven over the last seven years in the project area. France, through the medium of its Fonds d'Aide et de Cooperation (FAC)would co-financethe project.

4.02 The project would be carried out over the four-year period 1971- 1974 and its principal componentswould be:

(a) staffing and equipping the recently established Societe Nationale Agricole pour le Coton (SONACO) to administer extension, credit and primary marketing services in the project area; - 5 -

(b) establishing a revolving fund to provide cotton growers with seasonal'credits for insecticides and fertilizers; and medium-term credit for,_he purchase of agricultural- -- equipment;

(c) constructing two additional ginneries in the project area to increase annual ginning capacity from 43,000 tons 1/ of seed cotton to 67,000 tons; and providingsix small rice hullers to process 3,600 tons of paddy annually;

(d) rehabilitatingabout 610 km of tertiary roads;

(e) carrying out field trials throughout the project area to adapt research results for practical applicationby project participants;and

(f) preparing an agriculturaldiversification project in Borgou and Zou.

4.03 S0NACO would be responsiblefor overall administrationof the project and for handling agricultural credit funds, and would contractSATEC r project operations in the Zou, and CFDT for-operationsin the Borgou. CFDT would supervise constructionof the two ginneries. The teriaUIryroad rëhabilitationprogram would be carried out by PWD with technical assistanceprovided under the project. IRCT would be responsiblefor cotton research and cotton seed multiplication;IRAT for research on food crops and the use of ox-drawn implements;and IRAT assisted by IRHO for research on groundnuts. Governmentwould engage consultantsto prepare the crop diversificationproject. Organizationalarrangements are described in Chapter VI.

B. Detailed Features

4.04 Staffing and Equipping SONACO. SONACO would assume responsibility for all cotton developmentwork in the project area. Staff numberswould increase from the total of 487 now employed to 555 by 1974; giving a final and satisfactoryratio of one extensionworker to 100 farmers, see ChapterVI and Annex 5, Table 3. After'1974 it shiouidbe possible to decrease the number of extensionworkers since by that time farmers will have had 10 years of close supervision. Three houses and offices for SONACO headquarterswould be built at Parakou; and a total of 62 stores, two offices and 13 senior staff houses in the Zou and Borgou, see Annex 5, Table 2. Vehicles would be purchased in line with the needs of project activitiesand it is estimated that 92 new and replacementvehicles would be required.

4.05 Credit Fund. Details of seasonal and medium-term credit requirements are given in Annex 5, Table 5. An amount of CFAF 737 million (US$2.88 million) woldJ be- ednee-Lfinance the revolving credit fund. 1/ After completionof CFDT's expansion program; see Annex 6, para 2. - 6 -

4.06 Ginneries. Project area cotton is now ginned at four ginneries at Parakou, Kandi, Bohicon and Savalou (see Map 2) with a total capacity of 36,000 tons. CFDT is expanding capacity at existing plants by 7,000 tons. To process further incremental project production two new Government-own'ed ginneries would be constructed: an 1 8,000-ton capacity plant in Glazoue ir: 1472, and a 6,000-ton capacity plant at Banikoara in 1973. This shoul?a provide adequate ginning capacity until 1976/1977. Annex 6 gives dsta1is of the present ginning situation, and the justificationfor locatjcuad capacitiesof the ginneries to be constructed. Assuranceswere obt.-î-- during negotiations that planning, design, and supervision of the coc, Lr-ictico(t of the ginnerieswould be the responsibilityof CFDT.

4.07 Rice Hullers. At present m»st paddy is hulled by pestle and1 o This is excessively labor consuming and produces very low quality ric- due to the high percentageof broken grain. To hull project production sIx rice hullers with a capacity of 800 kg of paddy per hour each would be operated under CFDT's supervision. These should provide adequate milling cap:^cîty until 1975. Details of the rice program are given in Annex 7.

4.08 Rehabilitationof Tertiary Roads. The road improvementprogram would involve about 610 km of roads used for cotton evacuationand would entail grading and reshaping, improvement of drainage, and where necessary, improving sections by regraveling,building culverts and fords, and other auxiliaryworks. Road works would be carried out by PWD which would establish and maintain, under the authority of its Director, a Special Unit for this purpose. The Special Unit would recruit under terms of reference and conditions acceptableto IDA, two highway technicianswho would be responsible for planning and supervisingthe road works and coordinatingwith SONACO. The project would provide supplementalequipment for use by PWD. The feeder road improvementprogram is described in detail in Annex 8. During negotiations assuranceswere obtained that during the development period a program of road improvement to be carried out by PWD would be agreed annually by SONACO and IDA, and that the project area roads would be adequatelymain- tained.

4.09 Applied Research. The research program would include trials on the efficiencyand economy of cotton pest control; improved research on maize, rice, and groundnuts,and tests on the impact of ox-drawn implementson farming systems. Further details of the research program and of IRCT and IRAT are given in Annex 9. During negotiationsassurances were obtained that research programs would be reviewed annually with IDA.

4.10 Preparation of Crop DiversificationProject. By the end of the 1974 season the potential for cotton developmentin the Zou will be exhausted. Further development in the departmentwill thus depend upon identifyingother viable agriculturalprojects - cattle, rice and maize production appear to lend themselves to improvement. Consequently,international consultants, satisfactoryto IDA, would be employed to identify, establish the viability of, and prepare a crop diversificationproject for the Zou, and in addition for the Borgou which would benefit greatly from the diversificationof its cash crop production. Assurances to these effects were obtained during negotiations.

C. Field Operations

4.11 Extension Methods. Extensionmethods used would be those already proven in Dahomey. Since all cotton farmers are required by law to use insecticides,this is considered to be DevelopmentStage 1. Extension is aimed at inducing growers to move through three more stages of progressively increasing production intensity:

Stage 2 - using fertilizersin addition to insecticides;

Stage 3 - growing cotton in blocks and observing crop rotations; and

Stage 4 - using animal drawn farm implements.

Each stage results in higher cotton production, and the residual effect of cotton fertilizers increases the yields of the crop following cotton in the rotation. Consequently,areas planted to food crops decline and land freed is then planted to cotton and other cash crops. Details of crop rotations and the use of inputs are given in Annex 7. Project extensionworkers would also provide advice and services for both food and cash crops. In the Zou all farmers use fertilizersand most are in Stage 3; since the bulk of cotton cultivation is in closely supervised blocks, all new farmers in the Zou would start off in this Stage. However, due to tse-tse incidence and lack of knowledge of Zou farmers of animal husbandry few, if any would move to Stage 4. In the case of the Borgou where cattle cultivationis used, but where block farming is practiced to a lesser extent than in the Zou it is estimated that no participantswould remain in Stage 1 at the end of the project development period; and that about 74% would be in Stage 2; 16% in Stage 3 and 10% would use ox-drawn implements -- Stage 4. Farm models for the various ecological zones are given in Annex 10.

4.12 Seed Supplies. Cotton seed would be distributed free to farmers and the cost recovered in fixing producer prices. Annex 11 describes the seed multiplicationprocess in detail. In the absence of improved varieties durirg the project developmentperiod, most farmers would use their own groundnut and maize seed. IRAT would be responsiblefor the supply of rice seed, with SONACO coordinatingseed multiplicationand supply activities.

4.13 Fertilizers. Project farmers would use a single annual application of 150 kg/ha NPS 20-25-12 compound fertilizer, costing about CFAF 5,000.

4.14 Pesticides. In the North at least five, and in the South at least six annual sprays would be applied with hand-operated knapsack sprayers. In both regions annual spraying programs are organized by CFDT which provides sprayers and insecticides (sprayersare owned by Government and both sprayers - 8 -

and insecticidesare financed by FAS, see para 2.09; under the project SONACO would take over ownership of the sprayers); and cotton farmers do the spraying under supervision of extension agents. Currently a DDT-Endrin mixture is used, costing about CFAF 1,000/ha per spray. Both DDT and Endrin are "hard" insecticides, but they are cheap and efficient. During the project development period trials would be made with less persistent and dangerous insecticides (Endosulfan-Methylparathion)and researchwould continue to seek improved and economic methods of pest control (see para 4.09).

D. Credit Arrangementsand Supply of Inputs

4.15 Seasonal Credit. In the Borgou a fixed amount per kg of seed cottoii produced is deducted from growers' sales proceeds to pay for pest control. This system penalizes good farmers since the costs of spraying per ha are the saie, and the higher the yield the more the farmer pays. When suitable arrangementscan be made, the costs of sprayingwould be charged on the basis of actual costs incurred on the pesticides as is now the practice in the Zou. Seasonal credit facilities for fertilizers would be extended to all project participants.

4.16 Medium Term Credit. Basic qualificationsfor obtainingmedium term credit for farm implementswould be that the farmer grows cotton and owns a pair of oxen. SONACO would manage a revolvingfund adequate to meet all "projected seasonal and medium term credit needs. Details are given in Annex 5, Table 5.

4.17 Appraisal Procedures. All project participants would be obliged to use cotton insecticides and would be eligible automatically for such credit. Applications for fertilizer and medium term credit would be appraised by the local extension worker or Village Group, and final approval would rest with SONACO's Sector Chief. Criteria considered would be the farmer's general standing in the community and his technical capability.

4.18 Interest Rates and Terms of Loans. A commission of 5% on the value of fertilizer and insecticides supplied on credit would be charged. Taking into account a repayment period of about eight months, this is equivalent to an annual interest rate of about 8%. Medium term loans would be repayable vithin either two years (individual farmers) or three years (members of Village Groups), and beneficiaries would be required to make down payments of 33.3% and 25% respectively of the value of materials supplied. The interest rate would be 8%. In addition Village Groups would charge a fee of CFAF 600 for each loan; these fees would be credited to the group's loan guarantee fund.

4.19 Credit Recovery. On behalf of SONACO CFDT (Borgou) and SATEC (Zou) would keep individual farmer loan records, and in the Borgou repaymentswould be deducted from farmers' cotton sales proceeds. In the Zou Village Groups would be responsibleas nov for loan repaymentsof their members. It would be necessary for farmers in both departments to sell their cotton to CFDT; in practice there is no alternativemarket. During negotiations,assurances were obtained that, unless IDA agreed to their modification,the above credit appraisal, issue and recovery arrangementswould be employed by SONACO, and that SONACOwould charge 12% interest on repayments overdue and recover equipment financed once repayments are 12 months overdue.

4.20 Supply of Inputs and Equipment. Farm equipment, fertilizers and insecticides would be procured by SONACOon the basis of estimates prepared by CFDT and SATEC. Inputs would be stocked at district stores from where they would be issued to farmers by CFDT and SATEC on behalf of SONACO.

E. DevelopmentSchedule

4.21 The cotton area is estimated to increase from 29,000 ha in 1970 to 59,000 ha in 1974; rice from 1,000 ha to 3,900 ha; maize from 24,000 ha to 34,000 ha; and groundnuts from 13,100 ha to 19,700 ha. The new Glazoue ginnery would start operation in 1972; the Banikoara ginnery in 1973, and final project ginning capacity would be 67,000 tons of seed cotton annually. Five rice mills would be installed in 1972 and one in 1973, and final hulling capacity would be 3,600 tons of paddy.

V. COST ESTIMATESAND FINANCING

A. Project Costs

5.01 Project cost estimates and their foreign exchange component are shown in the following table and are elaborated further in Annex 5, Table 1. Project costs are based on recent experience in Dahomey and include provisions for price escalation equivalent to 5% compoundedper annum on agriculturalextension, processing plants and research costs; and 10% compounded per annum for road construction;physical contingenciesof 5% on the total costs of buildings, ginnery construction, and road construction. All costs include duties and taxes with the exception of ginnery installations, rice hullers, inputs and farm implements and vehicles which Govern- ment would exempt from import duties. Confirmationto this effect was obtained during negotiations. Project costs include salaries and allowances of all staff engaged in the project, staff training coats, SATEC and CFDT fees and project operating costs for the project period 1971-74. _ 10 -

SUIUARY PROJECT COST ESTIMATE

---- CFAF millions ------US$ thousands------Foreign Local Foreign Total Local Foreign Total Exchange

1. Agricultural Extension Houses, Offices,Stores 64.3 31.7 96.0 251.-3 124.0 375.3 33 Furniture, Office Equipment 4.9 9.2 14.1 19.1 36.o 55.1 65 Vehicles 14.4 50.9 65.3 56.3 199.0 255.3 78 Salaries- Expatriate 96.7 386.7 483.4 378.2 1,511.7 1,889.9 80 - Local Staff 600.6 - 600.6 2,348.0 - 2,348.0 - Vehicle OperatingCosts 91.5 74.9 166.4 357.7 292.8 650.5 45 Rents,Utilities, etc. 57.9 24.8 82.7 226.4 96.9 323.3 30 Sub-total 930_3 578.2 1,508.5 3,637.0 2,260.4 5,897.4 3d 2. IncrementalFarm Inputs Fertilizer 14.7 278.2 292.9 57.5 1,087.5 1,145.1 95 Insecticides 18.3 347.4 365.7 71.5 1,358.1 1,429.6 95 Equipment 3.9 74.1 78.0 15.3 289.7 305.0 95 Sub-total 36.9 699.7. 736.6 144.3 2,735.4 2,879.7 95 3. ProcessingPlants Ginneries 137.h 257.4 394.8 537.2 1,006.2 1,543.4 67 Rice Hullers 15 _ 8.8 10.3 5.9 34.4 40.3 85 Sub-total 138.9 266.2 405.1 543.1 1,040.6 1,583.7 6b 4. Feeder.Rtad Improvement 35.9 142.9 178.8 140.3 558.7 699.0 80 5. Research 34.5 138.1 172.6 134.9 539.9 674.8 80

6. Studies 3.0 12.0 15.0 11.7 46.9 58.7 80 Total 1,179.5 1,837.1 3,016.6 4,611.2 7,182.0 11,793.2 61 7. Contingencies Physical 16.1 28.1 44.2 62.9 109.9 172.o 63 Price 95 4 86.7 182.1 373.0 339.0 LVZ.8 48 Sub-total 111.5 114.8- 226.3 435.9 448.9 /ô84.5 51

Grand Total 1,291.0 1,951.9 3,242.9 5,047.1 7,630.9 12,678.0 60

Jawuary 19,1972 - il -

B. FinancialArrangements

5.02 It is proposed that IDA should make a credit of US$6.1 million. Since the project would be carried out in the period 1971 through 1974 with FAC and the Governmentmeeting 1971 costa, the IDA credit would meet 48% of total project coste and be equivalent to 80% of the project's foreign exchange cost of US$7.6 million. FAC would finance 24.5Z of project costs and Govern- ment, largely from project gen-ratedfunds, 27.5%. During the disbursement periods, when the Governmenthas to provide CFAF 895 million, it is estimated that the project will earn CFAF 929 million for the Government. FAC's con- tributiQn of CFAF 795 million (US$3.1million) would be a grant to the Governmnntof_which CFAF 289 million (US$1.04million) would be applied to meet the bulk of project costs in llU. Details of the proposed financing are set out below and in more detail in Annex 12.

IDA Credit FAC Grant Government Total CFAFm US$m Z CFAFm US$m % CFAPm US$m % CFAFm US$m Z

Equipment, Machinery, Vehicles 280.1 1.09 85.0 48.1 .19 15 - - - 328.2 1.28 100 Construc- tion Costs 378.3 1.48 87.9 51.9 .20 12.1 - - - 430.2 1.68 100

Extension Salaries -expatriate - - - 483.4 1.89 100 - - - 483.4 1.89 100 -local - - - 66.6 0.26 11.1 534.0 2.09 88.9 600.6 2.35 100

Extension Operating Costs - - - 48.7 0.19 19.6 200.3 0.78 80.4 249.0 0.97 100 Incremental Farm Input 662.9 2.59 90 - - - 73.7 0.29 10.0 736.6 2.88 100

Research, Studies 131.0 .52 69.8 47.6 0.19 25.4 9.0 0.03 4.8 187.6 0.74 100

Contin- gencies 100.4 0.39 44.4 48.2 0.19 21.3 77.7 0.30 34.3 226.3 0.88 100 Total 1,552.7 6.07 795.5 3.11 894.7 3.49 3,242.9 12.67 5.03 The proposed IDA credit would be made on standard terms to the Gov- ernment of Dahomey. The Government would apply proceeds of the credit together with its own and FAC's contribution as follows: (a) to the Ministr: of Rural Development and Cooperation (M) CFAF 405 million (US$1.6 million) for construction and equipment of the proposed ginneries and rice hullers; - 12 -

(ii) CFAF 172.6 million (US$0.7 million) to meet costs of applied research in the project area;

(iii) CFAF 15 million (US$59,000)to meet costs of the feasibilitystudy for a diversificationproject;

(iv) CFAF 736.6 million (US$2.9million) to be used for establishing a revolving fund for seasonal and medium term credits, of which-CFAF 658.6 million for seasonal credits made in kind; and CFAF 78 million for medium term loans for equipment;and

(v) CFAF 1,508.5 million (US$6.0million) to meet SONACO investment costs and its project extension salaries and operating costs.

(b) to the Ministry in charge of Public Works, CFAF 178.8 million (US$0.7million) to meet the costs of the feeder road rehabilitationprogram.

5.04 Funds required for the feeder road rehabilitationprogram would be made available to the Ministry in charge of Public Works, and for SONACO operations to the Ministry of Rural Development quarterly and in advance. Allocations would be based on estimates prepared by CFDT and SATEC and approved by SONACOand IDA, and the Ministry of Rural Development would establish a project account with a banking institution satisfactory to IDA, from which SONACO would be authorized to draw.

5.05 Cotton FertilizerSubsidies. Farmers now benefit from subsidies on cotton fertilizer,but during the developmentperiod prices paid for fertilizers by farmers would be increased progressivelyfrom CFAF 20/kg in 1971 to CFAF 25/kg by 1974, and further increases to CFAF 35/kg by 1977 are assumed. Actual 1970 fertilizercosts were CFAF 30/kg in the South and CFAF 35/kg in the North (see Annex 7, para 5). Up to now and for 1971 fertilizersubsidies have been financed by FED. FED has discontinued its subsidy policy, but Governmentwould be able to finance the new levels of subsidies proposed at least up to 1980, through the margin earned by Governmenton its cotton industry operations; (see Annex 18, Table 1). A sharp increase in fertilizer prices to farmers is undesirable since it could cause a drop in fertilizer use and a commensuratedecline in cotton production. Consequently,it is proposed that subsidy arrangementsshould continue, albeit at a progressively declining level. During negotiations assurances were obtained that the cotton fertilizer subsidies would be reviewed annually with IDA in the light of farmers' financial results with the objective of their eliminationby 1981.

C. Procurement and Disbursement

5.06 Procurement of fertilizers, insecticides, sprayers, farm equipment, corrugated steel culverts, vehicles, ginneries and rice hullers (total- ling about US$8.0 million) 1/ would be by international competitive bidding. 1/ This includes all purchases of annual farm inputs financed by the revolving credit fund during the credit disbursement period. - 13 -

Tenders for the constructionof stores, houses and offices, valued at about US$0.3 million, would be let locally since the individual contracts (which probably would not exceed US$15,000)would be too small to justify seeking bids from outside Dahomey. Other goods (furnitureand office equipment) valued at about ?JS$45,000and for which there is a satisfactorydegree of local competition,would be procured according to procedures for local procurement agreed with IDA.

5.07 Disbursementof the proposed credit would be made against:

(a) 100% of the CIF Cotonou costs of goods directly imported for the project such as ginnery equipment and rice hullers, corrugated steel pipes and vehicles, estimated at US$1.1 million;

(b) 90% of the cost of office equipment and furniture,building and road construction,applied research, and the feasibility study, about US$2.Omillion; and

(c) 100% of the CIF Cotonou costs of fertilizers, insecticides, and agricultural equipment, to be purchased before December 31, 1972 and 15% in each of the following years, about US$2.6 million.

US$400,000would be unallocated. Disbursementof the credit would be made against import documents and appropriate records certified by SONACO, the Ministry of Rural Development and the Ministry in charge of Public Works, and endorsed by the Ministry of Finance. A detailed disbursement schedule appears in Annex 12.

5.08 It is recommended that any surplus funds remaining in the credit account by the closing date should be cancelled.

D. Accounts and Audits

5.09 The Ministry of Rural Development and Cooperation and the Ministry in charge of Public Works would keep separate accounts for their transactions financed under the project. SONACO would keep its own general accounts, and a special account covering the agriculturalcredit fund including interest income and which, except as IDA othervise agrees, would be,used exclusively for SONÀCO's credit operations. Ministerial accounts would be audited by the Controleurs d'Etat who are directly responsibleto the President of Dahomey; and SONACOaccounts would be audited by independent auditors acceptable to IDA. FAS cotton accounts would also be audited by the Controleurs d'Etat (see paras s and7.05'' During negotiationsassurances were obtained that audited annual reports would be submitted to IDA not later than four months after close of each financialyear and that audit arrangements would be acceptable to IDA. - 14 -

VI. ORGANIZATIONAND MANAGEMENT

A. Project Entities

6.01 ~Government is anxious to play a more direct part in cotton prcduc- tiojuand processingthan it has in the past. Up to now these operations have been handled almost solely by CFDT. On its side, CFDT is equally concerned to demonstrate that it is neithr dominatingnor making excessive profits from the cotton industry. For the preceding reasons two major changes in the industry'sorganization have been initiated. First, with the encour- agementof--oFDT- -Societe Nationale Agricole pour le Coton (SONACO) has- been created to organize cotton production, and second, Government and CFDT will enter into a joint venture (the-Venture)for processingand marketing cotton. These changes are exp-ectd to improve relations between Government and CFDT without impairing the efficiencyof Dahomey's cotton development program.

6.02 SONACOis an autonomousGovernment corporationresponsible to the Minister of Rural Developmentand Cooperation,and was established in 1971 (see Annex 2). Its objectives are to prepare and exe-cutecotton development programs including other crops cultivated by cotton growers. The SONACO Board comprises ten Government appointedmembers, and its Chairman is nominatedby the Minister of Rural Development and Cooperationand appointed by the Council of Ministers. Key SONACO staff are its General Manager, Deputy General Manager and Financial Manager. CFDT has been asked to provide the Financial Manager and to assist in setting up SONACO. A condition of effectivenessis that the three key posts have been filled by persons with experienceand qualificationssatisfactory to IDA. During negotiationsassurances were obtained that CFDT would be employed to help set up the corporation'saccounting system. It is not expected that SONACO would make enough profits to meet its commitments;consequently it would require annual subventions from Government for its operations, see paras 5.04 and 6.06.

6.03 SONACO would, under terms and conditionssatisfactory to IDA, be engaged by the Government to administer the Zou and Borgou cotton programs and to provide extension,credit and primary marketing services. SONACO would contract SATEC (Zou) and CFDT (Borgou)_tomanage thep npram&- at the departmentallevel. Such contracts are essential since without this assistance,SONACO would be unable to mobilize the expertise to carry out its programs. As SONACOgains experienceand more Dahomean staff are trained, it should be able to reduce its dependence on overseas technical assistance. At the senior personnel level CFDT would provide a Chief of Operations, a rice specialist, a technical adviser, and two training officers for the Borgou; and SATEC a Chief of Operations, an administrative officer, three training officers and an applied research specialist for the Zou. Signature of a management contract between Government and SONACO, and service jontracts between SONA Urand CFD'Tand SATEC, satisfactoryto I-A is a condition of effectiveness of the credit. CFDT would not be precluded from sub-contracting - 15 -

part of its obligations to agencies such as Compagnie Internationalede DeveloppementRural (CIDR),which now provides services in the Borgou area; during negotiationsassurances were obtained that such sub-contractswould be entered into only with the approval of IDA.

6.04 The Venture between Government and CFDT would consist of a Mandat de Gesti`oncov`eringan Association in Participationpartnership agreement which would require CFDT to put at the disposal of the Venture all of its industrial and commercial installations in Dahomey; and Government to put at the Venture's disposal its ginnery at Parakou and the two new ginneries that would be constructed under the project. The Venture would be managed by CFDT which would be responsible for collecting seed'-ottaoÎnfro'm''bùying - statàns at prices fixed by the Ministry of Economic Affairs, see para 2.09. After ginning, cotton lint and seed would be exported and sold by CFDT. PrQfits, or losses, from these operationswould be divided - 80% to Government, and 20% to CFDT except for losses which would be attributableto the Govern- ment excessive producer prices) or to CFDT (negligence). CFDT's liability would be limited to the extent of its reserve account plus CFAF 5 million. CFDT -wouldbe required to invest the balance of its profits in Dahomey, but it would also be paid 2% of the value of lint exported, and CFAF 2,000 per ton of cotton seed sold, and such funds would be repatriable. These arrangements are basically similar to those made by CFDT and the Governments in Cameroon and Upper Volta where they work satisfactorily;they differ in that in the latter countries CFDT is not required to share in losses.

6.05 Annex 15 contains draft agreements between Government and CFDT for the Venture. Signature of agreements satisfactory to IDA, setting up the -'Venturewould be a condition of credit effectiveness.

6.06 Under the old arrangementsCFDT received a fee of CFAF 18,000 for each ton of lint processed, and CFAF 3,100 for each ton of seed exported. Government revenues from cotton were the surpluses accruing to Fonds Autonome de Stabilisationet de Soutien des Prix des Produits a l'Exportation (FAS) in its producer and export price fixing operations,para 2.09. Gov- ernment would from its share of Venture profits finance SONACO operations (see para 7.08) and FAS producer price stabilizationfund. Whenever the balance of this fund would be below CFAF 500 million an amount of CFAF 100 million out of Government'sannual profit share would be allocated to the price stabilizationaccount and the remainderwould, to the extent necessary, be available to finance extension services in the project area. The payment of Venture profits to the Government was confirmed during negotiations,and would be incorporatedin the legislation creating the Venture which would be subject to IDA_appoval.- Experience in Upper Volta indicates that with the Venture, Government will obtain higher revenues from cotton exports than under past arrangements. FAS management is weak, and its accounting system is particularlyso. A condition of effectivenesswould be the implementation by Government of a plan satisfactoryto IDA for strengthening FAS management and accounting procedures. - 16 -

6.07 The Venture would take over cotton seed exports from the Government'sOffice de CommercialisationAgricole du Dahomey (OCAD). OCAD is an unnecessary component of the industry and is not especially efficient, gee para 7.04. This change, which was confirmed during negotiations,would be effected in the Venture's statutes.

6.08 In managing the Venture CFDT would be responsible to a committee comprising three members appointed by Government and three by CFDT, and Governmentwould have the right to check all costs incurred by the Venture.

6.09 For the research program SONACO would engage IRCT, IRAT and IRHO to carry out trials financed under the project, under contracts satisfactory to IDA.

B. Staffing and Training

6.10 Annex 5, Table 3 gives project staff requirements at district and headquarter level. While an additional40 extensionworkers would be needed for the Zou, no additionalworkers are needed in the Borgou where present numbers are adequate. The qualificationsof these staff would be literacy and successful completionof in-service training under SATEC. 20 professional agriculturalstaff would be recruited includingspecialists in rice cultivation,applied research and training, as well as the three key SONACO staff members and their support personnel.

6.11 CFDT and SATEC should have no difficultyin recruiting and training personnel. Most staff at levels above that of Sector Head would be employed directly by CFDT and SATEC, while lower level staff now mainly employed by the Ministry of Rural Developmentwould be transferred to SONACO and seconded to CFDT and SATEC to whom they would be fully responsible.

6.12 There is a shortage of Dahomean staff capable of filling key posts at the level of Sector Head and above. It is expected that by 1972 19 or 48% of these posts will still be filled by expatriates, but in-service training of Dahomean personnel during the project developmentperiod should permit the replacementof 14 expatriatesby 1975. Under present arrangements counterpartsto expatriatekey personnel are not responsibleto the expatriates and tend to make a very small contribution. The proposed replacement of expatriatestaff by local staff makes it necessary that local staff fill operationalpositions in a single chain of command and that responsibilities be clearly defined at all times. During negotiationsassurances were obtained that Governmentwould not appoint counterpartsbut deputies to expatriates filling key posts and that there would, at all times and at every level, be a single person in command. - 17 -

VII. YIELDS ANDPRODUCTION, MARKETING, FARMERS' BENEFITS AND GOVERNMENTREVENUES

A. Yields and Production

7.01 Cotton. The national average cotton yield increased from 270 kg/ha in the period 1961-1964, to 600 kg/ha in 1965-1967 and 825 kg/ha in 1968- 1970 1/. The national average 1970 yield 2/ was 918 kg/ha, and 880 kg/ha in the project area which has been and continues to be subject to intensive extension activity. By the end of the project developmentperiod the average yield in the project area is estimated to increase to 950 kg/ha and total production to about 56,000 tons compared with about 25,000 tons in 1970. This is believed to be realistic and is based on the yield analysis shown in Annex 7. IRCT and IRAT have obtained yields exceeding 1,700 kg/ha and in the Kandi area farmers have obtained an average of 1,350 kg/ha.

7.02 Other Crops. The average yield of other crops which would benefit from residual effects of using fertilizeron cotton and improved crop rotation, are given in Annex 7, Table 2. All these crops would financially be less attractive than cotton, but, except for rice in the Borgou area, would be an essential part of crop rotations. In the economic analysis of the project no account is taken of the value of the project induced production increases for these crops.

B. Narkets and Prices

7.03 Cotton. All project cotton would be purchasedby CFDT on behalf of the Venture; and after processing lint would be exported, as in the past mainly to Europe, and cotton seed to Japan. Dahomey now produces about 0.12% of total world supplies, and it is estimated that by 1975 this percentage would amount to 0.27%; this should neither create marketing difficultiesnor have a significantimpact on world prices. The InternationalCotton Advisory Committee (ICAC) has been informed of the project, but has proferred no comments.

7.04 Export prices used in project calculationsare those forecast by the Bank's Economics Departmentand are: lint, African 1" - 1/32" CIF Liverpool falling from 30 USe/lb equivalent in 1971/72 to 26 USA/lb in 1974/75, thereafter remaining constant; and seed, a constant price of US$108/m ton CIF Osaka. See Annex 17, Table 4. The seed price is rather higher than those obtained by OCAD in 1969 and 1970, but the latter prices reflect OCAD's inefficiency,since CFDT obtained an average of about US$100/ton for its seed exports from other African countries in 1970. 1/ Cotton is sown in June, harvested between November and Jmnuary and ginned between November and April. 2/ The average 1970 yields in neighboring countrieswere: 817 kg/ha in Ivory Coast and 975 kg/ha in Togo. - 18 -

7.05 Producer Prices for Cotton. Producer prices for cotton have been almost constant in recent years but different price levels are maintained for North Borgou, South Borgou and Zou, reflecting transport distances, giving an average producer price of CFAF 33.71/kg. Price support has not been necessary in recent years, and despite anticipated falls in world market prices, Government, if it maintained present producer prices, would accumulate in the FAS cotton account surpluses estimated to amount to CFAF 600 million by 1977 after meeting full cotton extension and fertilizer subsidy costs from the account, see Annex 18. However, Government would have to support or reduce prices by 1978. During negotiationsassurances were obtained that FAS would maintain separate cotton accounts to be audited by the Controleursd'Etat under existing Government auditing arrangements; that producer prices would be fixed annually in consultationwith IDA; with a view to ensuring recovery of capital and a reasonable profit to the venture, taking one year with another; and that prices would be such as to maintain FAS cotton accounts on a sound financial basis.

7.06 Other Crops. The producer price for groundnuts is fixed annually by Government and was increased in 1970 from CFAF 14/kg to CFAF 16/kg unshelled to better reflect world prices (CFAF 28/kg FOR in 1970) and to revive farmers' waning interest in this crop. Under the project SONACOwould organize marketing services to assist OCAD in buying groundnuts for export. On average, Dahomey exports about 15% of its 50,000 ton annual groundnut production, and the project would make an additional5,000 tons of unshelled groundnuts available for export. It is assumed that farmers would sell their other surplus commodities in local markets. The present producer price of CFAF 20/kg of paddy would be retained for delivery made at SONACO's rice hullers and SONACO would sell clean rice to wholesalers.

C. Farmers' Benefits

7.07 Farm budgets for typical farms at different stages of cotton production intensity and in different ecologicalzones are given in Annex 10. Far- mers who do not grow cotton now earn a net cash income of about CFAF 3,000- 6,000 (US$12-24)in addition to subsistencefrom the average farm of about 5 ha in the Borgou, and about CFAF 10,000 (US$40) from the 3.5 ha farm typical of the Zou. A Borgou farmer by growing cotton and reaching Stage 2 productionintensity would be able to increase his cash income to between CFAF 20,000 (US$80) and CFAF 25,000 (US$100) and still produce his subsistence needs. By moving to Stage 3 his income range would increase to between CFAF 34,000 (US$136) and CPAF 47,000 (US$190),and if he took up cattle cultivation, he could increase this to between CFAF 61,000 (US$244) and CFAF 95,000 (US$380). It is estimated that by 1974 all Borgou farmers would be in Stages 2, 3, and 4: 74%, 16% and 10Z, respectively. All Zou farmers would start cotton growing at Stage 3 and their net cash incomes would range from CFAF 15,000 (US$60) to CFAF 30,000 (US$120). Total annual net cash returns on the project are estimated to increase from CFAF 580 mmillion in 1970 to CFAF 1,570 million by 1975. - 19 -

D. Impact of Project on Government Revenues and Expenditures

7.08 Annex 18 contains estimates of Governmentrevenues and expenditures incurred in carrying out the project. Project farmers pay a small per capita tax of CFAF 1,600 for each adult family member but do not pay income taxes. Consequently, Government revenues accruing directly from the project would consist only of taxes on cotton lint and seed exports. These, estimated to be CFAF 88 million (US$0.4 million) annually at full development,would be in- adequate to cover the costs of extension services in the project area, either in the developmentperiod or thereafter. It is in view of this and Dahomey's financial situation that the assurances described in para 6.06 were sought, i.e. that the Government from its share in venture profits would provide the funds to meet SONAOO costs incurred in continuing cotton developmentafter the IDA credit disbursementperiod.

VIII. BENEFITS AND JUSTIFICATION

8.01 The major benefit of the project would be the expansion of cotton production in Dahomey and generation of substantialforeign exchange from cotton lint and seed exports. The economic rate of return on the project is estimated at about 34%; see Annex 17. The calculationassumes that the full costs of agriculturalextension services are charged to the project during its 10-year life. Other impcrtant assumptionsare:

(a) a price for lint of USJ30 CIF Liverpool per lb ton in 1972, decreasingto US426 as from 1975;

(b) a price for cotton seed of US$108 CIF Japan per metric ton, remaining constant during the life of the project; and

(c) the opportunïty cost of farm family labor is zero since there is no alternativeeconomic use for such labor, even at peak periods.

Even if the benefits were 10% lower, the rate of return on the project would still be 19%. These are high returns because of (i) previous sunk investments made by the Governmentwith french assistance,,particu-arly in extension services,processing facilities and roads, and (ii) the high labor component.

8.02 As mentioned in para 8.01 the project involves foreign exchange earnings from tl.;e £>c:t of proiect iîu-icedcotton production. Based on the above price assumptions for cotton expo: s, the present worth of the net foreign exchange benefits over the life of the project would amount to US$28 million at a discount rate of 9%. Reliable information on the opportunity - 20 -

cost for capital in Dahomey is not availF74e and the rate of 9% which is considered to be a reasonable rate for Dahomey has been used since this is

the generally established Dpportunity cost . >eighboring countries. When this is compared with the local costs of the project, also discountedat 9%, the effective exchange rate for the ore&ect is equal to CFAF 151 per US$ which is substantiallymore favorable than the current rate of CFAF 256 per US$. Annex 17, Table 5 shows the calculatLon of foreign exchange benefits.

8.03 The project would enable some 12,000 farm familliesto take up cotton growing and assist several thousandsmore to expand their cotton pLantings. By the end of the project developmentperiod, 1975, the average per capita income of the project beneficiariesis estimated to reach US$25-50 depending on cultivation techniques used, compared to US$17-27 at present. SLnce the per capita GNP in Dahomey is currentlyabout US$86 and may reach US$90 by 1975, the project would not only assist a very poor section of the population, but would also make some contribution to a more equal income distribution.

IX. AGREEMENTSREACHED AND RECOMMENDATION

9.01 During negotiations assurances were be obtained that:

(a) planning, design, and supervision of the constructtion of the ginneries to be financed under the project would be the responsibility of CFDT (para 4.06);

(b) a program of tertiary road -improvement would be agreed annually by SONACO,PWD, and IDA; PWDwould, under the authority of its Director, establish and maintain a Special Unit and would recruit two highway technicians under terms of reference and conditions satisfactory-to IDA; and the project area roads would be maintained adequately (para 4.08);

(c) the diversification feasibility study would be carried out by consultants and under terms of reference agreeable to IDA (para 4.10);

'(d) Government and SONACOwould apply-agricultural lending procedures as described in paras 4.15 through 4.19, and these procedures would not be modified without the consent of IDA (para 4.19);

(e) Government vould exempt project imports of ginnery installations, rice milling machines, vehicles and farm inputs (fertilizers, insecticides and farm implements) from import duties (para 5.01); - 21 -

(f) fertilizersubsidies would be reviewed annually with IDA (para 5.05);

(g) procedures for local procurementwould be agreed with IDA (para 5.06);

(h) SONACO would keep its own general accounts and a special account covering the revolving agriculturalcredit fund including interest income, and which, except as IDA otherwise agrees, would be used exclusivelyfor SONACO's credit operations; the Ministry of Rural Developmentand the Ministry in charge of Public Works would keep separate accounts for its transactionsfinanced under the project; Ministerial accounts would be audited by the Controleurs d'Etat and SONACOaccounts by independent auditors acceptable to IDA (para 5.09);

(i) CFDT would be employed to help set up SONACO's accounting system (para 6.02);

(j) sub-contracts between CFDT and SATEC and other development agencies should be entered into only with the approval of IDA (para 6.03);

(k) Venture profits would be paid by CFDT directly to the Governmentwhich would use these for financingSONACO operations and FAS' cotton producer price stabilization fund (para 6.06);

(1) CFDT, on behaif of the Venture, would take over cotton seed exports from OCAD (para 6.07);

(m) SONACOwould engage IRCT, IRAT and IRHO to carry out research in the project area under agreementssatisfactory to IDA, and research programs would be reviewed annually with IDA (para 4.09 and 6.09);

(n) Governmentwould abolish counterpartspositions and local staff would fill operationalpositions in a single chain of command (see para 6.12); and

(o) FAS would maintain separate cotton accounts to be audited 1;7the Controleurs d'Etat and to be used to stabilize cotton prices only; producer prices would be fixed annually in consultationwith IDA, and prices would be such as to maintain the FAS cotton account on a sound financial basis (paras 6.06 and 7.05).

9.02 Conditionsof effectivenessare: (a) appointment to the SONACO posts of General Manager, Deputy General Manager and Financial Manager of persons - 22 -

whose experienceand qualificationsare acceptable to IDA (para 6.02);

(b) signature of a management cont act with SONACOand service contractswith CFDT and SATEC satisfactoryto IDA (para 6.03);

(c) signature of agreements setting up the Venture between Government and CFDT for ginning and marketing cotton lint and seed, satisfactory to IDA (para 6.05); and

(d) implementation of a plan for strengthening FAS management and accounting procedures (para 6.06).

9.03 The project is suitable for an IDA credit of US$6.1 million on standard terms.

November 26, 1971 Ai`NEX Table I

DAHOMIEY

ZOU-BORGOUCOTTON PROJECT

GENEAL AGRICULTURALSTATISTICS

Agricultural Exports 1965-1969 (CFAF million)

196$ 1966 1967 1968 1969

Palm Products 2.46 1.43 1.57 2.86 2.57

Groundnuts 0.09 0.11 0.23 0.27 0.46

Coffee 0.11 0.10 0.14 0.06 0.33

Cotton 0.16 0.27 0.34 0.68 1.13

Sheanuts 0.10 0.04 0.18 0.24 0.20

Tobacco 0.04 0.10 0.11 0.15 0.26

Others1/ 0.41 0.54 1.28 1.23 1.98 Total 3.37 2.59 3.85 5.49 6.93

Cotton Lint & Seed

- Percentageof Total AgriculturalExports 4.7 10.4 8.8 12.4 16.3

- Percentageof Total Recorded Exporte 3.8 7.4 8.2 11.4 13.6

1/ The increase in later years derives from rapidly expandingcocoa trade

Source: Economic Mission, 1970, of IMF

April 13, 1971 Table 2

DAHCEY

ZOU-BORGOUCOTTON PROJECT

GENERALAGRICULTUTRAL STATISTICS

Estimate of Cultivated Area, Productionand Yield Per Hectare

1970 Average Annual Area Production Yield Crops '000 ha '000 tons k/ha

Ccorn 362 227 600

Scrghum 88 43 500

Millet 19 6 300

Beans 47. 19 400

Rice 2 3 1,500

Cassava 1I4 731 6,40o-

Yams 60 542 9,000

Sweet potato 19 73 3,800

Cocoyam 2 14 7,000

Groundnuts 90 45 500

Cotton 39 35 900

Source: Ministry of Rural Development and Cooperation..,March 1971

1/ The average yield of caasavaappears low comparedwith yams and cocoyams.

Aprfil 8, 1971 ANNEX1 Table 3

DAHOMEY

ZOU-BORGOUCOTTON PRWECT

NATIONALPRODUTCTION, CULTIVATED AREA AND YIELDS OF COTTON

Seed Cotton Cultivated Weighted Campaign Production Area Yield Avera Yield Utons) (ha) (kgÉ k/a 1961/62 319 2,020 158) 1962/63 1,668 5,250 306 )271 1963/64 1s535 5,604 285 ) 1964/65 1,52 5th98 264_) 1965/66 .4,057 8,978 453 ) 1966/67 7s413 12,442 596 ) 602 1967/68 11,078 16,050 690 ) 1968/69 22,053 27,094 814 l) 1969/70 23,882 329872 726 ) 825 1970/71 34,971 38,094 918 )

Projections

1971/72 47,550 1972/73 61,300 1973/74 73,600 1974/75 82,700

Projections by Districts:

------Project Area - …-…------Borgou Zou Total Atakora Oueme Mono Atlanticque Total

1970/717 11,130 144,000 25,130 72 210 3,0p40 6,530 60 34,970 1971/72 15,500 17,700 33,200 70 150 5,000 9,000 200 47,550 1972/73 20,700 20,000 h0,700 66 300 8,000 12,000 300 61,300 1973/74 25,600 21,000 49e600 67 600 9,000 144,000 400 73,600 1974/75 29,500 26,200 55,700 67 1,000 10,000 15,500 500 82,700

1/ Actual

Source: CFDT

April 23, 1971 ANNEX1 Table 4

ZOU-BORGOUCOTTON PRF0ECT

GENERAL AGRICULTURALSTATI5TICS

Estimated Value of Crops

(CFAF millions)

1966 1%7.. 1968 1969 1970 Foodcrops

Cassava 4,608 4,782 5,292 4,9086 4,608 Yams 3,179 3,955 4,9529 3,689 3,990 Maize 2.644 3,198 2,886 2,600 2,522 Sorghum 637 754 767 819 819 Beans 364 702 572 650 676 Rice 30 15 30 30 90 millet 84 42 98 84 84

Total Returns to Produôers of Selected Export Crops

Pabm bunches 1/ 959.5 900.5 717.5 1,019.9 975.8 Cotton 213.2 251.0 338.4 641.4 815.3 Groundnuts y 464.8 457.6 669.1 687.3 672.8 Coffee 20.7 54.9 95.0 39.9 117.9 Sheanuts 104.6 26.6 121.7 80.9 90.5 Copra 70.2 49.6 34.1 19.4 44.2 Tobacco g 26.1 28.2 38.7 39.5 43.5

1/ Includes local consumption

Source: Direction de l'Agriculture,Minustere de DeveloppementRural

Apiril28, 1971 ANNEX 2 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

SOCIETE NATIONALEAGRICOLE POUR LE COTON (SONACO)

Constitution

1. SONACO was created in late 1971 as an autonomousGovernment Corpora- tion and its statutes were approved by IDA.

Objectives

2. SONACO's main objectivesare to prepare and execute cotton developmentprograms, which would include other crops cultivatedby cotton growers, and to provide cotton growers with extension services and primary marketing facilities. SONACO is also empowered to distributefarm inputs and implementsand handle agriculturalcredit operations. It can act directly or through specializedagencies. It is establishedfor 99 years and is responsibleto the Minister of Rural Developmentand Co-operation; headquartersare at Parakou.

3. Although SONACO's competencecovers the whole territoryof Dahomey, its field of activity during the project developmentperiod are limited to the Zou--an=Borgou_"departments".

Capital

4. SONACO's initial capital is composed of fixed assets and CFAF 10 million both of which have been donated by the Goverament. Modifi- cations in capital structure require approval by the Council of Ministers on the basis of proposals made by SONACO's Board of Directors.

Administrationand Management

5. SONACO is administeredby a Board of ten members representing various ministries, the Chamber of Commerce and Industry,SONADER, and SONACO's personnel. Its President is nominated from among the members on the recommendationof the Minister of Rural Developmentand, as are the other members, appointed by decree of the Council of Ministers. Board meetings are held at least twice a year and are attended by SONACO's Director General, the auditors (Commissairesaux Comptes) and the State Controller (Controleurd'Etat) in a consultativequality.

6. The Director General has the power to act on behalf of SONACO except in the sale of buildings and other fixed assets, in the mortgage of such buildings and assets, or in negotiatingloans. Governmentretains such powers. The Director General has full authority in personnel matters ANNEX 2 Page 2 with the exception of management staff for whicn Board approval is required for employment, salary scales, and dismissal.

7. During the project development period SONACO's management staff would consist of the Director General, the Deputy Director General and the Financial Director.

Accounting

8. SONACO's fiscal year is from July 1 to June 30. The Director General submits annually, not later than one month after the opening of the fiscal year, forecast financial statements to the Council of Ministers;and not later than two months after close of the fiscal year, an inventory,balance sheet and profit and loss accounts to the two auditors (Commissairesaux Comptes) appointed by decree of the Council of Ministers on recommendationof the Minister of Finance. Accounts are audited at least once a year, and are also examined by the State Controller. All accounts have to be approved by the Board and the Government. SONACO is subject to all economic and financial controls provided for by current laws. From the revenues of the corporation,after all charges and provisions for depreciationhave been met, 5% is allocated to a reserve fund until this fund reaches an amount equal to 10% of the corporation'scapital; and 10% to a special reserve fund until this fund has reached an amount equal to 10% of the highest turnover achieved by the corporation in any one year. Of the remainder of the net profit, 60% is allocated to the investment account and 40% to the operation account.

November 26, 1971 ANNEX 3 Page t

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

ACRICULTURALCREDIT

A. General

Background

1. The Banque Dahomeenne de Developpement (BDD), established in 1955 to provide agriculturaland other credit facilities,has a record of poor performance and requires a thorough reorganizationif it is to resume lending operations for agriculturewhich virtually ceased in 1963. In the absence of any other official agriculturallending institution,Fonds Autonome- de Stabtlisation-etde Soutien des Prix des Produits a l'Exportation(FAS; see Annex 4) makes seasonal loans for cotton inputs to individualfarmers, Village Groups and cooperatives,through developmentagencies, in the frame- work of these organizations'production programs. Official medium ternm credit for the purchase of oxdrawn implementsis not available (see para 3).

Sources of Funds

2. Short Term Credit. FAS resources for short term credit for cotton fertilizersand insecticidesconsist now of:

- FED funds for subsidizing cotton fertilizerprices (under these arrangementsfarmers pay only CFAF 20/kg as against a full price of CFAF 30-35/kg);

- credits made by fertilizersmanufacturers for 360 days at interest rates equivalent to the BCEAO discount rate of 3.5%; and

FAS funds accumulatedin the course of its price stabilization activities.

FAS funds are often short, and because of this CFDT pre-financespayments to suppliers. Total 1971 requirementsfor fertilizersand insecticidesamounted to CFAF 440 million.

3. Medium Term Credit. Medium term credit for the purchase of ox- drawn plows, ridgers and carts is at present available on a very limited scale only to farmers in the Borgou who participate in an UNDP/FAO livestock program. The program started in 1965 and is carried out with the assistance ANNEX 3 Page 2

of Compagnie Internationalede DeveloppementRural (CIDR). Contributions from European charitable institutionsto the amount of CFAF 5 million, and a BDD loan of CFAF 2 million repayableover five years, have permitted CIDURto establish a revolving credit fund out of which the purchase of some 600 ox-drawn units has been financed. Recovery of loans made to farmers has averaged 98%, and including profitsmade on lending activities the revolving fund amounted to about CFAF 10 million in 1970.

B. Project Credit Arrangements

RevolvingCredit Fund

4. Under the project a revolving credit fund would be establishedto provide cotton growers in the project area with seasonal credits for fertilizers, and insecticides;and medium term credit for the purchase of farm implements. SONACO would, on behalf of the Government,operate this revolvingfund and be responsiblefor procuringand distributinginputs to project farmers on the basis of estimates preparedwith the assistanceof CFDT and SATEC. Procurementwould be on the basis of internationalcompetitive bidding.

Lending Policies and Procedures

5. Eligibility. All cotton farmers in Dahomey are eligible for short term credit for pest control, and correct pest control is mandatory under Decree No. 70-315 of December 5, 1970. All cotton farmers in the Zou are eligible for fertilizer loans; in the Borgou, criteria are the farmer's general standing in the community and his technical capability. Medium term credit would be granted mainly to members of Village Groups but also individual farmers who have performed well would become eligible on their own account for medium term credit; criteria would be that the applicant has a pair of oxen and has been growing cotton successfullyfor some time.

6. Procedures. Currentlyapplications for short term loans are made by individualsthrough their local extensionagent or Village Croup. In the Borgou, CFDT delivers fertilizersand insecticidesdirectly to farmers and itself organizes the spraying programs which are carried out by the farmers. In the Zou, SATEC delivers both fertilizersand insecticides provided by CFDT to Village Groups which are responsiblefor the distribution of these to their members and for carrying out the spraying programs prepared by CFDT. All loans are made in kind. In the Zou, Village Croups supervised by SATEC are responsible for granting to and recovering short term loans from their members; in the Borgou there are very few Village Groups and the handling of individualaccounts is CFDT's responsibility. No loans are made for cotton sprayers; these are financed by FAS and made available to CFDT and SATEC; farmers are debited with a charge to cover depreciation which is repaid with their seasonal credit.

7. Under the project, procedures for granting fertilizercredits would be essentiallythe same as followed at present, except that in the Borgou, eINEX 3 Page 3

loans to individualfarmers would be graduallyreplaced by collectiveloans to Village Groups, as the latter come into existenceand develop the capacity to handle such loans. SONACO would take over FAS financed sprayers in the project area and be responsiblefor financingreplacements and new sprayers. The costs to these replacementsand new sprayerswould be provided for in the revolving fund.

8. Applicationsfor medium term credits for ox-drawn equipmentwould be made to the local extensionagent; he would check the farmer's eligibility and subnit his recommendationto the Sector Chief for approval. If the applicantis a member of a Village Group, the approval of its committee would be required also under the mutual guaranteearrangements. Applications would be made in August; equipmentwould be ordered in Septemberand delivered to farmers in January when proceeds from cotton sales would be availablefor down payments.

9. Terms. Currently the price of cotton fertilizerto farmers is subsidizedby FED and fixed at CFAF 20/kg; the subsidizedcost includes interest charges of 8%. Pest control costs charged to farmers include interestat 8%, and in the North Borgou, South Borgou and Mono are repaid througha fixed deductionper kg of seed cotton marketed; these are CFAF 6.50/kg; CFAF 7.50/kg;and CFAF 8/kg respectively. In the Zou, Village Groups are billed for actual purchasesof pesticidesplus 8% interest, and a charge for the amortizationof sprayers. Medium term loans only granted by FAO/CIDR (see para 3) have a term of five years and a fixed commissionof 5% per annum which is charged on the full price of the material; taking this into account the interestrate is equivalentto 7.5%.

10. Under the project fertilizerswould continue to be supplied to farmers at a subsidizedprice, although the subsidywould be reduced progressively;see Annex 7, para 5. The present system of charging a fixed amount per kg of seed cotton for pest control in the Borgou would be replaced graduallyby the Zou system of charging actual costs of pesticides plus 8% interest and costs of maintenanceand amortizationof sprayers. Medium term loans for ox-drawn implementsto Village Group members would be for three years at an effectiveinterest rate of 8%. A down payment of 25% of the cost of the equipmentwould be obligatoryto such borrowers. In addition,Village Group members would pay a total of CFAF 600 to their Village Group for establishmentof a loan guaranteefund. For individuals not covered by a guaranteefund the terms would be two years, and the down payment 33%. The terms of seasonaland medium term loans are summarized in Table 1.

Security and Recovery

11. Short term loans would, as now, be securedby the proceeds of cotton marketed through CFDT. Costs of pest control and fertilizercredit repayments would be deducted from payments to individual farmers in the Borgou while in the Zou farmers would receive full paynent for their cotton and their Village Groups, which guarantee their loans, would make the collective credit ANNEX 3 Page 4 repayment. Standard conditionsfor all medium term loans would be that: (L) the down payment is made before delivery of the equipment; (ii) annual repayments are collected not later than February in each year; and (iii) when payment is overdue the rate of interest is increased by 50% for a period not exceeding one year; beyond that limit the equipment is repossessed by SONACO. All medium term loans would be covered by contracts between SONACO and borrowers; loans to members of Village Groups would be guaranteedby their Group. Annual medium term credit repaynentswould be deducted from payments to farmers at cotton markets.

November 26, 1971 ANNEX 3 Table 1

DAHOMEY

ZOU-BORGOUCOTr"Q' PROJECT

AG,XlCULTURALCREDIT

Terms for Lending to Farmers or Village Groups

Short Ternm Medium Term

Period Up to 1 year For farm implements: up /j to 2 years to individuals-; up to 3 years to village groups /2

Down payment None 33% for 2-year loans 25% for 3-year loans

Interest A fixed commission of 5% A fixed commission of 2.90% equivalent to 8% interest for 3-year loans; 2.60% for 2-year loans, both equivalent to 8% interest

Repayment About 8 months 21 months for 2-year loans; 33 months for 3-year loans

Fee per annuity /3 - CFAF 150 for 3-year loans

/1 Cash price of cart: frame CFAF 19,500; body CFAF 2,500; Down payment: CFAF 7,900 of which CFAF 2,500 for body; Two annuities of CFAF 7,900. Cash price of plow and ridger: CFAF 13,800; Down payment CFAF 4,960; two annuities of CFAF 4,960. /2 For carts: down payment CFAF 6,000; three annuities of CFAF 6,000 plus a commission of CFAF 150 per annuity. For plows: down payment CFAF 3,850; three annuities of CFAF 3,850 plus a commission of CFAF 150 per annuity. /3 To be paid by members of village Groups only. In total CFAF 600 for 3-year loans.

November 26, 1971

ANNEX 4 Page 1

DAIOMEY

ZOU-BORGOUCOTTON PROJECT

FONDS AUTONOMEDE STABILISATION ET DE SOUTTIEN DES PRIX DES PRODUITS A L'EXPORTATION (FAS)

Organization and Objectives

1. FAS was established in 1967 1/ and is responsible to the Ministry of Economic Affairs and Planning. It superseded Fonds de Soutien des Produits a l'Exportation which was created in 1961. Objectives are to guarantee miniun producer prices for Dahomey 's principal export crops such as cotton, gheanuts and groundnuts, and to promote agricultural development in general.

Operations

2. FAS supports the minimum producer prices for export crops through a scheme (bareme) under x^whichactual exports prices are compared to a "stati5tical" price for each commodity, based on a predetermined producer price an(lincluding charges incurred by traders, manufacturers and exporters, as well as a profit margin. Should the-actual export price exceed the !statistical' price, FAS collects the difference, while in the event of losses FAS reimburses the exporter's deficit.

3. FAS also handles fertilizer and insecticide purchases for cotton development programs, but lack of funds frequently has made it necessary for CFDT to finance these operations; see Annex 3, para 2.

Financial Resources

4. FAS receives a share of export and import taxes and duties on palm kernels, sugar, rice and salt among others; these amounted to CFAF 166 million in 1970. In 1970 profits from cotton lint exports were the main source of FAS income amoun_ing to CFAF 238 million. Another source of income has been substantial FED grants for fertilizer subsidies which are to be discontinued ir, 1972. FED provided CFAF 145 million for cotton producer price subosidies in the period 1965/66 throuch 1967/68,and about CFAF 560 million for fertilizer subsidies and other activities in the period 1965/66 throueh 1969/70. Under the terms of the Venture agreement between Government and CFDT (Annex 15) FAS would receive part of Government's 80% share of tne Drofîts f-romthe Venture's activities which would include the export of lint and seed.

Financial Resu.l ts

5. As FAS has nct 7pc-t proper accounts, its einancial position is not clear. Table '.shows acz_ai expenditure made to support producer prices i/ Law No. 160/PR/PFAEP/AE. ANNEX 4 Page 2 since its establishrient.With recent favorable export prices large sums have accrued to FAS, but Governnent has required it to engage in operations of doubtful financial merit, such as providing Governxnent with funds for financingpurchases of cotton ginningmachinery and vehicles and recently, cholera vaccinations. Throughoutits years of operation, FAS has managed to build up a small reserve but its liquidity position is weak because it ;-ashad to make the bulk of these earnings available to Government.

Role in the Project b. Under the project SONACO would take over from FAS the handling of fertilizerand insecticidepurchases for the cotton developmentprogram in the project area; and FAS would maintain a separate cotton account for the prolect for price stabilizationas required.

Nïcvember26, 1971 DAHOMEY

ZOU-BORGOUCOTfOli PROJECT

FAS - AVER&GEMNIMUM PRODUCER PRICES AEDTOTAL PRICE SUPPORTEXTENDED 1965-1969

1965/66 1966/67 1967/6d 1969/70 Total Crops Minimum Total Minimum Total Minimum Total Minimuvi Total Minimum Total Price Producer Price Producer Price Producer Price Producer Price Producer Price Support Price Suort Price Support Price Support Price Support Price Support CFAF/kg CFAF M CFAF/kggM CFAF M CFAF CF 1 CFAF/k CTAFM CFAF/kg CFAF M CFAF M Palm kernels 18.0 - 18.0 - 18.0 18.0 - 18.0 -

Seed Cotton 27,8 35.2 27.8 39.6 27.8 7.1 27.8 - 27.8 - 81.9

Groundnuts (shelled) 14.0 5.5 1I.O 45.L 13.0 85.6 L.0 114 .0 - 136.5

Coffee 85.0 - 80.- 9_O.U - 85.0 0.4 85.0 - 0.4

Sheanuts ih.0 - 14X0 1.4 14.0 C 1[1.0 0 14.0 0 1.4

Copra 28.0 _ 31.0 0 3 30.0 - 30.0 - 30.0 - 0.3

Tobacco 50.0 - 55.c 55.' - 55.0 - 55.0 -

Castor Beans - 0.8 0.( 0.1 0.1 1.6

Kapok - 0.8 - - - 0.8

Total Price Support (CFAFM) 40.7 88.3 0.5c., 0.1 222.9

Source: Economic Mission 1970 of IMF

:iay 1, 1971

&MNx 5

DO3IONEY~ ~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~UlE

DAHOMZ

ZOU2BORGOUCOrrON PROJECT

Project Coat Estimatea (CFAF'000)

% Direct Local Costa S troA nt Taxes AMnt Includlng Amount Foreign Foreign in Local Direct Indir ct Local 1971 1972 1973 1974 Total Exchange Exchange Ourvnoy Taxe Taxes Ceete

1 gricultural Extension

Ecoca,, offices, stores 4,500 77,230 14,250 - 95,980 33 31,670 21 20,160 46 44,150 Furniture, office equipment 2 540 11,560 - - 14,100 65 9,160 16 2,260 19 2,660 V CLides 18t290 18,260 20,000 8,750 65,300 78 50,930 7 4,570 15 9,800 Salary GoaLs - expatriate 114,650 138,030 122,900 107,800 483,380 80 386,700 - - 20 96,680 _ local 123,b20 154,310 159,610 163,260 600,600 - - - - 100 600,600 Vehicle oparating costs 31,600 45,680 44 960 4,4240 166,480 45 74,,"20 15 24,970 40 66,590 ients, utilities, etc. 17,110 20.250 22.590 22.7bO 82,690 30 24.810 5 4,130 65 53.750

Sub-Total 312,110 465,320 384,310 346,790 1,508,530 38 578,190 44 56,090 58 874,250 2. IncreDgntal Farm Inopts (Unsubsidized)

Fertilizer - 215,b50 72,240 5,160 292 85o 95 278,210 - _ 5 14,640 Insecticides - 282,720 49,290 33,700 365,710 95 347,420 - - 5 18,290 ïquipeent _ 42,39Y 7,930 27,680 78.000 £ 74,100 _ 5 3.900 Sub-Total _ 540,560 129,460 66,540 736,560 95 699,730 - - 5 36,830 3, Processiog Plants

Oinneri.s 259,120 135,740 _ 394.,160 67 257,420 7 30,190 26 107,250 Rice huilers - 8.600 1,720 _ 10.320 85 8.840 _ _ 1,480

Sub-Total - 267,720 137,460 4405,180 68 266,260 7 30,190 25 108,730 1. Fesder Road. Improv.ment

Materials and equipeant _ 10,350 4,60o 4,500 49,450 67 33,000 7 3,500 26 12,950 Operating cost. _ 43.100 43.100 43 100 129.300 85 109.950 3 4.500 12 14.850

Sub-Total - 83,,50 47,700 47,600 178,750 80 142,950 4 8,0o 16 27,800 5. Research IRCT 31,990 31,990 31,990 31,990 127,960 80 102,370 _ _ 20 25,590 IRAT 10,01, 10,040 10,040 10,0140 40,160 80 32,130 _ 20 8,030 RHO - 1,500 1.500 1.500 4.500 80 3.600 _ 20

Sub-Total 4,2,030 43,530 43,530 43,530 172,620 80 138,100 - - 20 34,520

6. Studios - - 15.000 _ 15,000 80 12,000 _ _ 20 3,000

Total 354,140 1,400,580 757,460 Soh,460 3,016,610 61 1,837,230 3 94,280 36 1,085,130 7. Contingencis

Physical 230 23,640 14,150 6,210 44,230 63 28,060 - - 16,170 Pries 360 48.310 60.400 73.010 182.080 48 86,690 _ 5 222 Sub-Total 590 71,950 74,550 79,220 226,310 51 114,750 49 111.560

8. Grand Total 354,730 1,472,530 832,010 583,680 3,242,950 60 1,951,980 3 94,280 37 1,196,690

.l-n-arv 17. 1972 ANNEX5 Table 2

DAHOMEY

ZOU-BCRGOUCOTTON PROJECT

COST OF BUILDING CONSTRUCTION

(CFAF '000)

Unit No. Cost 1271 1972 1973 1974 Total

SONACO HEA.DQUARTERS

Offices 1 block 3,500 - 3,500 - - 3,500 Houses 2 4,000 - 8,000 - - 8,000 i 3,500 - 3.500 - - 3,500

- 15,000 - - 15,000

BCRGOU

Off-Lces 2 1,000 1,000 1,000 - - 2,000 Houses 3 3,500 3s500 3,500 - - 7,000 Sector Stores 2 3,990 _ 7,980 - - 7,980 ViLlage Stores 30 800 - 12,000 12,000 - 24,000

4,500 24,480 12,000 - 40,980

Hou;es l 4,000 - 4,000 - - 4,000 9 3,500 - 31,500 - - 31,500 VilLageGroup Stores 30 150 _ 2,250 2.250 - 4,500

- 37,750 2,250 - 40,000 Total (iLncludingcon- tingencies) 4,500 77,230 14,250 - 95,980

Contingencies

Physical 5% 230 3,860 750 - 4.,840 Price5% Year 1, 10% Year 2, :15%Year 3 220 7,720 2_140 - 10,080 TOTAL 4,950 88,810 17.140 - 110.900

April 23, 1971 ANNEX 5 Table 3

ZOU-BORGOUCOTTON PROJiCT

STAFF REQUI'REbEhNS

innoal Salaries Total 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 an basis, 1971 1971-1974

GsneraTmiger - ½ i 1 i i i S 1 1 1 2,920 10,220 Fi-saicia Manager8 - i* 1* 1* 1* 1* 1 1* 1 11,340/2,350 39,990 Dcpoty GCn-rel Managerg - 1 1 1 1 1 1 1 i 1 2,250 6,750 Chi.f A.o.mntant - - 1 1 1t 1 1 1 1 1,890 5,670 Accoouting Cl-krk - _ _ 1 2 2 2 2 2 2 2 790 2,370 Secrstary _ _ 1 1 1 1 1 1 1 1 1 790 2,370 Typiets _ - 1 2 3 3 3 3 3 3 3 400 2,400 Other Offioe Employees - - 2 2 2 2 2 2 2 2 2 200 1,200

Seb-total - i S 10 12 12 12 12 12 12 12 70,970

BOBOOÙ2/

Chief of Operation 1 12 1* 1* 1* 1 1 1 1 1 1 1 7,690/ 2,500 28,819 Ceputy Chi.f of Operation 1 1 1 1 1 1 1* 1a 1 1 1 2,359/11,340 8,e10 Administrative offiier i i i î i i S I 1 1 1,38C 5,180 A0o.nntant 1 1 1 1 1 1 1 1 1 1 1 79C 2, 569 Typiet. 2 2 2 2 2 2 2 2 2 2 2 37) 2,7M0 Clerks 9 9 9 9 9 9 r 9 9 9 370 12,a11 Store Attendants 8 8 8 S 8 8 8 S 8 S a 28, 6,4 1 Other Offie Eployees 2 2 2 2 2 2 2 2 2 2 2 170 1,290 Srrveyors 1 2 2 2 2 2 2 2 2 2 2 540 4,950 Topographers - 6 6 6 6 6 6 6 i 6 6 540 12,150 Training Officerc- eLteosion 1 1e 1 1n l* 1 1 1 1 1 1 5,040/ 1,380 16,309 Training Offiem - Village GSoops 1* 1. 1t 1* 1* 1 1 1 1 1 1 5,040/ 1,360 l67D9 Training orr.n. - Ooopsrative 1 1 1 1 1 1 1 1 1 1 1 1,38C 5,1B0 Teccnical Adaiser - Village Croups 2* 1* 1 1* 1* 1 1 1 1 1 1 3,600/ 870 13,599 Sub-regioc Head - 1 1 1* 1* 10 1l 1 1 5,340/ 350 16,900 Sector Head. _ expatriate 4* 4* 4n 39 25 le - - - - - 3,600 44,390 -local 4 i 4 5 6 7 3 8 8 c e 870 15,66C

Sector HeadTrainee _ - i 1 i - - - - 609 2,043 Asoictat Se-or Hesd - 1 i 1 1 1 i i i 1 $70 2,1l0 Inatructors 42 42 a2 52 42 42 42 12 42 L2 42 520 81,300 Assistant lnstructors 7 Village 4scup Supervisors 25 25 25 25 25 - _ - - _ - 169 17, S13 Extension WclorWers 210 210 210 210 210 219 270 190 180 3So 189 199 119,t30 Veterina.y Assistants - 2 3 a i 4 L 4 973 7,130 Rie Specialist - - i 1 -- - - 5,0__, 15,120

Sob-total 323 326 329 33 930 30.. 7- 73 272 27 273 43,L

ZOU

Chief of Operateon 1 S- S1 1-- b> 1* 1 t 1 li 10,339 2,500 41,120 Deputy Chi0 f cf Operation 1 1 1 1- 1- 57 1 1 2,359' 9,999 >,199 Administrative Offic-r 1* 1* 1* 1* i i 1 i i 1 1 4,559/ 1,3S0 15.430 Aesistant Administrative Ofoior i 1 1 1 - - 1,330 3,900 Aosountaco 1 1 1 i i 1 1 i 1 t 1 e7o ,200 Sscretary 1 i 1 t 1 ' 1 t 1 1 1 600 3,200 rypits 9 3 ?3 3 3 33R 3 3 9 4,900 Stor Attendanta 2 2 2 2 2 2 2 2 2 2 L30 3,290 Oth-r Off cemploy-es 3 3 3 3 3 3 3 . 3 7 2200 2,_30 Treniogn Officer - Enosnio-, 10 le la 1* 1Y 1 1 I,650/ 1,38o 22,600 Asoiotant Ofricerfraiong 1 1 1 1 1 - _ - - - _ 1,3'0 5,30 Training rfficera - Village Groupa -sexpatriate - 2O 2O la n - - ' 3 3 7,33c - local - 1 1 1 1 2 2 2 2 2 1,733 5.320 Serrer Heads _ expatriate 4* J* 97 3* 2* ------4 5'779 - local 4 L I4 5 6 6 6J 6 9 s s s ' 18,570 3setor .ead Trai-ee - - t 1 2 - - - - - 573 2,633 Onotrectors 29 225 25 25 20 27 25 2 2" 3f 25 6' 57,7L1 Extecsion'i,lorkers 120 1,0 153 160 160 190 'L3 137 121 `21 121 180 l9,o00 Research Specialiat - 1* 1* 15 le 1 0* t -- _,653

Sub-total 16à 193 20L 213 213 200 190 1>9 1" 1< 16' 418,72I

Total 487 520 541 553 155 510 - L-7_ S'b-total 985,a30

2702 Managewnet Foe 23,'87 OOaeol 16,929

ij'r_ `-lanagsment 7sFe 36,2759 Somol Orerseao Travel 1,2,700

9*4-.octal 1, 963,959

.oooîogoncîco 5% co*poarded 86,250

Grand TOcal 1,170,260

V/ * - dpatriate

2/ Only 9 colthe finance. under proJect as previons FAC grant ende Merch 31, 1971

3/ O0e à CFaF 5.65 million p.a., one S CFAF 4.85 million p.a. i0 1071

4/ ro 0 CFAF 4.85 million p.a., two a 3FAF 3.75 silli-o p.-. i0 7971

5/ Osc O CFAF 1.30 million pa., rest g .TAF 0.87 million p.a.

6/ TSc CFAr' 0.85 million p.a., coot S CFAF 0.52 cillio p.a.

April 7, 1971 ÂNE! 5 T ble b

ZODB-eaoe CooTeo mwZoCT

VEHIC& PURCHAESAN TOTA NSe lS f SERVICE

Unit Prie. Total Conts 1970 1971 1972 1973 147h 1975 1976 1977 1978 197° 1960 1971 1971-1971 CFA? '000

Large Sedans

Purehases -- 2 - 2 _ 1 1 1 1 1 1 SOO 3,200 Total in Serrice - 2 2 2 2 2 2 2 2 2 2 Sab-total 3,2 BOFfOU Station Iaon

Purch aes - h4 - la - 2 2 2 2 2 2 700 5,600 Total in Servie. 2 4 4 4 4 4 4 4 L L Piek-ups

Perchas., b 6 7 6 6 6 6 6 6 6 6 65o 16,900 Total in Serviee 9 12 13 13 13 12 12 12 12 12 12 Trucks

Purchass - - 3 - - 1 1 1 1 1 1 2,501 7,501 rotal in Sevice - - 3 3 3 3 3 3 3 3 3 Sut-otal 7M30

Large Sodane

Purehases - 1 _ 1 - 1 _ 1 _ 1 - 750 1,500 Total in Soiice 1 1 1 1 1 1 1 1 1 1 1

Station Wagons

Porenasee - 1 _ 1 _ i _ 1 - 1 - 700 1,bOO Total in Servico 1 1 1 1 1 1 1 1 1 1 1

Purchases - 2 2 2 2 2 2 2 2 2 2 65o 5,200 To.-al inSerSe- h 4 b4 b 7 b4 h 4 4 Smai Sedans

Purchases - 12 5 il S 7 7 7 7 7 7 500 16,000 Total in Service 12 17 17 17 15 1L 14 lb 1l Il 1L

Purehases - - i 1 - 1 - 1 1 _- 1.25o 2.501 Total in Serweie 1 1 2 2 2 2 2 2 2 2 2 Motorbik.o

l'urclases - i4 7 97a6 ' 7 5 7 56 1,680 Total. in Serie. 15 15 15 15 15 15 15 15 15 15 15

Parehaes - 50 75 90 90 75 73 65 6o 60 60 125 3,820 Total in Serrie. 120 lbO io 16S 161 150 149 139 121 12` 120

St-btotal 32,100 Total 65,300 Centinganciaa S.290

:rand Total 69,590

April 9, 1971 DAHOi3EY

ZOU-bORGOU COTTON PROJECT

REVOLVING AGRICULTURAL CREDIT FUND

(CFAF '000)

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981, etc .

SOURCES 1/ IDA and Govarsent finamcing

- Fertiliser 215,449 72,241 5,160 - - - - - _ _ - Insecticides 282,721 49,286 33,697 - - - - _ _ _ - Sprayer purchase. 29,515 2,656 23,898 - Sprayer spars parts and maintenance 7,959 1,350 930 - Draft animal implements 4,916 3,923 2,857 ------

Sub-totai 540,560 129,456 66,542

Fanser Rapaymenta

- Fertiliser - 173,740 203,010 265,610 265,610 309,900 309,900 309.900 309,900 309,900 - Insecticides - 296,857 348,607 383,990 395,510 407,370 419,600 432,180 445,150 445,150 - Sprayer replacement - 14,88 17,548 19.460 20,040 20,650 21,260 21,900 22,560 22,560 - Sprayer maintenance - 7,959 9,309 10,240 10,550 10,860 11,190 11,530 11,870 11,870 - Draft animal itplemente 1,894 4,663 8,260 6,500 4,050 4,520 5,400 9,580 7,540 7,700 3/ 4/ Fertilleer subaidies - 52,480 99.060 41,880 51,100 16,310 26,100 36,180 46,580 57,260

Total ancrons 542.454 680,043 752,336 727,680 746.860 769,610 793,450 821,270 843,600 854,440

APPLICATIONS 5/ Fans imputa pu-chases 473,270 588,697 625,554 644,310 663,660 683,620 704,210 725,440 747,350 747,350 Fanm inputs distribution 24,900 31,000 33,000 34,000 35,000 36,000 37,000 38,000 39,000 39,000 Purchasea cf draft implements 6,810 8,586 11,120 - - 7,890 9,950 12,890 - 6,700 Sprayer purchasse and replacements 29,515 2,656 23,898 32,230 2,900 26,100 35,200 3,170 28,500 22,300 Spray-r spare parts and maintenance 7,959 9.309 10.239 10.550 10,860 11,190 11,520 1I1870 12.230 12,230

Total applications 542,454 640,248 703,811 721,090 712,420 764,800 797,880 791,370 827,080 827,580

Annal Surplus (deficit) - 39,795 48,525 6,590 34,440 4,810 (4,430) 29,900 16,520 26,860

Cumulativ- surplus (deficit) - 39,795 88,320 94,910 129,350 134,160 129,730 159,630 176,150 203,010

1/ IDA and Goverssent contributions ta finance full 1972 requirements and, subcequently, incrementol neasonol and nedium cens orndit requirements.

2/ See Ans.a 5, Table 1: Total incrmsetal face input requirements.

3/ To be pr-vided frmn oeversnant's share of the profita of the Venture; see Anne 18, Table 1.

4/ It la planned that fertiliser subsidies will be discontinued by 1981; pars 5.05 cf main lent.

5/ Total purbhases of fertilisera and insecticides.

Auguat 5, 1971 DAHOMSY

ZOU-BORGOIJCOTTON PPOJECT

TOrAL AGRICULTJRAL EXTENSION COST (OFAF '000)

total 1971 1972 1973 1974 1071-.1.74 1975 1976 19/77 l97R 19'79 1v80° 19Q0

GAPIrAL EXFP-tITtRE

Houses, Offices and Stores 4,500 77,230 14,250 - 95,781 _ _ _ _

I`quipment, Furniture 2,540 il,56i- - 14,10nI,C00 3,000 3,000 3,OO 3,000 3,000

Vehicles 18,290 18,260 20),000 8,75o 65,300 1q,28n 15,270 12,270 15,260 16,260 15,260

S'Ib-total 25,330 107,(50 31,250 8,75o 175,380 18,280 18,270 18,270 18,260 18,260 18,260

sontingencies - IPiysicpl 23n 3,860 750 - 4,d40 ------

- Price 360 9,810 4,140 1,380 15,690 3,940 5,o50 6,210 7,430 8,720 10,070

rotal 25,920 120,720 39,140 10,130 19)5, 310 22,220 23,320 24,480 25,690 26,980 28,330

CURdENTYXPYNDI VrUA

Personnel - exp-iriate 1IL,650 138,030 122,300 107,800 483,380 51,470 43,720 37,450 37,450 - -

- local 123,420 15L,310 15j?,6l0 163,260 600,600 159,gio 157,730 154,980 151,280 160,690 160,690

*Veoicle Op-eratini Costa 31,600 4-,, 80 JL,960 41,2L0 166,480 41,820 41,820 41,820 41,820 41,820 41,820

Re:itu, Utilit-iés, etc. 17,110 20,250 22,50o 22,740 82,6&0 13,470 19,470i 19,470 19,470 19,470 19,470

Sub-total 286,780 358,270 350,060 338,040 1,333,150 272,670 262,740 253,720 250,020 221, 180 221,980

Contijngencies - Physical - 2,280 2 2,252 2,210 6, 740 2.090 2,090 2,090 2,090 2,o90 2,090

- Prioe _- 17,900 36,23_ 53,270 107,400_ 58,760 72,590 86,290 101,780 105,980 122,38.0

total 286,780 378,050 388,540 393,520 i,447,29( 333,520 337,U20 342,10N 353.8-30 33n,n50 346,450

GRAUDTOTAL 3t2,70) 499,170 IJ27,680 403,650 1,643,220 355,71,0 36n,740 366,580 379,580 357,030 374,780

April 7, 1971

e3: ANNEX 5 Table 7

DAHOMEY

ZOU-BORGOUCOTTON PROJECr

CONbSTRUCTIONCOSTS GINNERIES AND COST OF RICE HULLERS (OFAF '000)

1972 1973 Total Cost

Building Construction

Silo Preparation 19,250 7,000 26,250 Silos for Seed Cotton 15,000 6,000 21,000 Ginnery Building 15,000 9,000 24,000 Stores 15,000 9,000 24,o0o Workshops 9,500 6,000 15,500 Weigh Bridge 1,000 1,500 2,500 Office Infirmary 6,500 5,000 11,500 Utilities 3,500 2,500 6,000 Staff Houses 8,000 5 410 13 410 Sub-total 92,750 51,410 144,10

Equipment and Machinery

Gins 55,200 1,400 73,600 Dryers 15,180 - 15,180 Presses 16,560 15,650 33,120 Equipment for Handling Cotton Seed 1,840 1,84h 3,680 Power Supply 37,536 22,54o 60,076 Equipment, Workshops 2,760 1,840 4,600 Weigh Bridge 2,300 2,300 4,600 Miscellaneous 8,556 6,44o 14 996 Sub-total 139,932 69,920209,52

Installation Costs

Transport of Material 1,840 1,3dO 3,220 Salaries Expatriate Supervisors 7,820 4,324 L2,144 Salaries Local Wbrkers 4,600 3,220 7,820 Engineering 11i592 6 072 17 664 Sub-total 25,U52 1,9 40',Mr3

Vehicles

Sub-total 850 85C 1,700

Total Ginneries 259,120 135,74C 394,860

Contingencies 27,100 14,450 41,550

Grand Total Gikneries 286,220 150,190 436,41o

Rice Hullers

5 in 1972; 1 in 1973 8,600 1,720 10,320 Contingencies 820 170 990 Total 9,420 1,9 310

Grand Total Processing Plants 295,640 152,080 447,720

January 20, 1972 ANNEX 5 Table 8

DAH'O4EY

ZOU-BORGOUCOTTON PROJECT

FEEDERROAD IMPROVEMENT COSTS

(CFAFmillion)

Total Annual 1972 1973 1974 1972-1974 1975-1981

INVESTMENT COSTS

Purchaseof Vehicles: Two pick-ups 2.0 - - 2.0 Two f'ueltankers 12.0 - - 12.0 Accessoriesand tools 5.25 - - 5.25

Sub-total 19.25 - - 19.25

1irchasE of Steel Pipes 21.1 4.6 4.5 30.2 and Assembling

?echrmical Assistance 15.6 15.6 15.6 46.8

.tiring of Road Cons- truction Equipment 27.5 27.5 27.5 82.5

Vontingencies Price Escalation and Contingencies 8 12.1 15.5 35.6

Total livestmentCosts 91.45 59.8 63.1 214.35

ECONO1IC COSTS

Maintenarice 3.1 6.2 9.3 18.6 12.5

94.55 66.0 72.4 232.95 12.5 Taxes 3.0 3.3 3.5 9.8 1.3

Total EcDnomic Costs 91.55 62.7 68.9 223.15 11.2

ECONOMIC BENEFITS 17.25 31.6 44.0 44.0

Net Benefits - 74.3 - 31.1 - 24.9 32.8

April 29",1971 ANNEX5 Table9

DAHOMEY ZOU-BORGOUCOTTON PROJECT

PROJECT-RELATEDRESEARCH EXPENDITURE (CFAF'OOO)

1971 1972 1973 1974 Total

IRCT 1/ 31,990 31,990 31,990 31,990 127,960

]RAT 2/ 10,040 10,0h40 10040 10,040 409160

IRHO2/ - 1,500 1o,500 1,500 49500 Contingencies - 2.180 4.46o 6,860 13.500 Total Research 42,030 45,710 47,990 50,390 186,120 Cost

1/ IRCT CFAFtOOO TotalZou Zou Borgou and Borgou

Expatriatesalaries 5,000 5,000 10,000 Localsalaries 4,200 4,490 8,690 Operatingcosts 5,500 5,600 11,100 Overheads 1.050 1,150 2_200

Total 15,750 16,240 31,990 2/ IRAT

Expatriate salaries - 910 910 Local salaries 2,925 2,925 5,850 Operating costs 1,330 1,560 2,890 Overheads - 390 390

Total 4,255 5,785 10,040

3/ IRHO Annualten-day visit by groundnutexpert CFAF 500,000 Foliar diagnosisand interpretation 700,000 Phosphate fertilizers and overhead 300,000 Total CFAF1,500,000 ADril30. 1971

XNNFEXG

.Page 1

DAIOMEY

ZOU-BORGOU COTTON PROJECT

COTTON GINNERIES

Existing Plants

1. Cotton is now processedat six ginneries with a total capacityof 60,000 tons (see Table 1). They have d-ffêientgIn equipment, but tnis has been suppliedmainly by one manufacturer(Lummus); four are owned by CFDT and two by Government. Four ginnerieswith a total capacityof36,000 tons nrY êtrh-projfect-area: Kandi, which is obsolete, Bohicon, which also processes cotton from the Oueme; Savalou; and Parakou which, due to its location, can use economically only two-thirds of its capacity.

CFDT's Expansion Program

2. CFDT is expanding the capacity of the Savalou ginnery by 3,000 tons and will in 1971/72 construct a new 10,000-ton capacity ginnery at Kanclito replace the old plant. After completionof this program, Dahomey's total ginning capacity will be 67,000 tons, and that of the project area 43,000 tons.

New GovernmentPlants for Project Area

3. Cotton productiongenerated by the project would exceed available ginning capacity by 1972/73. Hence, the project would provide for the constructionof an 18,000-toncapacity ginnery in the Zou and a 6,000-ton capacity ginnery in the Borgou. Projected cotton productionand ginning capacity during the 1971/72 to 1974/75 period are given in detail in Table 2 and summarizedbelow: ANNEX 6 Page 2

Cotton Productionand Ginning in Project Area (tons)

1970/71 1971/72 1972/73 1973/74 1974/75 Pro4ect area iroduction 25,000 34,500 41,000 50,000 55,000

Seed cotton received from other areas 3,500 5,000 8,000 9,000 10,000

Total quantity to be ginned in project area 28,500 39,500 49,000 59,000 65,000

Projectedginning capacity 36,000 39,000 61,000 67,000 67,000

ExpansionCFDT plants - 3,000 10,000 - -

New project plants - - 18,000 6,000 -

Reductioncapacity (Kandi I) - -6,000 --

4. Criteria for determining the site of the new plants would have ta take into consideration:(i) distance to the railhead;çxports would be sh'.ppedto Cotonou via rail; (ii) availabilityot manpower; (iii) avail- abi!ity of water supply; (iv) communicationswith the project area; and (v) locationof centers of anticipatedproduction increases. Considering these criteria,a site near Glazoue railway station, seems preferable »-r the Zou area. In the Borgou area, Banikoaraappears a suitable l.ocationbecause of the anticipatedproduction increase from 3,500 tons seec cotton in 1970 to 7,500 tons in 1974. Actual sites would be determined by a deta:.ledstudy to be carried out by CFDT.

The plant at Glazoue would be equippedwith three gins and that at Banikoarawith one gin, each with 128 saws and an hourly saw output c' 7 kg. The capacity of a single gin would be 6,000 tons which could be o9erated during a 125-daycampaign with two 10-hour shifts per day. Exten- siDn of the ginning campaign beyond the anticipated period would result in loi--erqualifty lint.

6. The new plants would be constructedin 1972 at Glazoue and in 1973 in Banikoara. Although the plant at Glazoue would not operate at fuil capacity during the first two years, no saving would materialize fror. phasing installationof gins. The cost of a gin represents less than 1o'

7. Turing the developmentperiod, seed cotton would be distributed between the six project area ginneriesaccording to transportdistances and the most economic use of ginning capacities. By the end of the developmentperiod, the quantity of non-projectseed cotton to be ginned in the project area in 1974/75, and estiriatedat 10,000 tons, would justify the constructionof a ginnery in the Oueme, thus freeing ginning capacity for further productionincreases in the project area.

8. The Government would be the owner of the proposed new ginneries; this would permit the Governmentto better understandand control the cotton industry;and managementwould be suppliedby CFDT under the Association in Participationagreement (see Annex 15).

November 26, 1971

AWNEX6 Table 1

DAHOMEY

ZOU-BORGOUCOTTON PR0JECT

COTTONGINNERIES

Existing and Proposed Ginneries (Capacitiesin tons of seed cotton per annun)

Expansion Increase of Con3truc- Capacity to be Capacity tion by end of operative Present Financed under Project by end of Location Owned By Capacity By CFDT Project (1974U) year

OutsidelP o,iect Area-2

Djougou CFDT 3,000 - _ 3,CGO Hagoume Oovernment 15,000 - - 15,000 (SONADER)

Within Project Area

Zou: 2/ Bohiconz! CFDT 12,0G0 - - 12,000 Savalou CFDT 6,000 3,000 - 9,000 1971 Glazoue Government - - 1_,000 18,000 1972 Bore_u: Kandi I CFDT 6,000 - 6,000 Standcy Kandi II CFDT - 10,000 10,000 1972 Parakou2/ Government (18,000) - - (15,000) Effectivecapacity 12,000 12,000 Banikoara Government - - 6,000 6,ooo 1973

Total Theoretical Capacity Dahomey 60,000 7,000i/ 2h,000 9t,000 Total Effective Capacity ProjectArea 36,000 7,000o4/ 24,000 67,000

t/ The locationof Djougouand Hagouneexcludes their participationin ginning project cotton.

2/ Bohicen gins also non-projectcotton (Oueme).

31 0 Parakouls18,000 ton capacity only 12,000 tons can be used economically due to transportationdistances.

4/ ExcludingKandi I constructedin 1955, which will be closed. April 20, 1971 .NNEX 6 Table 2

DAHOMEY ZOU-BORGOUCOTTON PROJECT

COTTONGINNERI}S Cotton Production and Ginning Capacity in the Project Area (tons )

1970/71 197V/72 1972/73 1973/7à l9Z4/75

Zou

Production of project area 14,000 18,000 20,000 24,000 26,000 Seed cotton received from other areas 3,500 ,5000 8 000 9.000 10 000 Quantity to be ginned in the Zou l500 23;000 l/ 2 ;00O 33,000 36;000

G nng capacity

Bohicon 12,000 12,000 12,000 12,000 12,000 Savalou 6,000 9,000 9,000 9,000 9,000 Glazoue - _ 18,000 2/ 18,000 18,000 Total Zou 18,000 20 39,000 39,000 39000

BORGOU

Project production 11,000 16,500 21,000 26,000 29,000

Ginnin capacity

Kandi. I 6,000 6,000 -3/ - - Kandi II - - 10,000 10,000 10,000 Parakov, 12,000 / 12,000 12,000 12,000 12,000 Banikoara - - - 6 000 6 000 Total Borgou 18,000 185000 22,000

Total project prodlwction 25,000 34,500 41,000 50,000 55,000 Total production to be ginned in project area 26,500 39,500 49,000 59,000 65,000 Total project ginning capacity 36,000 39,000 61,000 67,000 67,000

1/ Surplus production to be processed at Parakou. 2/ In -'iew of rapid increase of production and to have a security margin the new ginmery would be constructed at full capacity. 3/ Kandi I will serve as stand-by. 2 Actual capacity is 18,000 t, but only 12,000 t can be ginned economically due to Jl.ocation.

Xarch 25, 1971 ANNEX 7 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

CROPPING PATTERNS, INPUTS, YIELDS, PRODUCTIONAND PRICES

1. The main cash crops grown in the project area would continue to be cotton, maize, sorghum, millet and groundnuts;rice would be introduced in the Zou. Data on labor requirementsare given in Table 1. Annex 10 shows the areas of the various crops per farm in differentproject zones by subsequentdevelopment stages.

DevelopmentStages

2. Farmers in the Borgou would move through four developmentstages as follows:

(i) Stage 1. Introductionof cultivationof cotton; and full control of cotton pests.

(ii) Stage 2. Expansion of the farm's cotton area and use of fertilizersin addition to that of insecticides.

(iii) Stage 3. Growing cotton in blocks, observingcrop rotations and extendingthe cotton area; extension of area under rice.

(iv) Stage 4. Use of ox-drawn implementsand, consequently,further expansionof cotton area and improvementof cultivation methods; use of fertilizeron rice.

In the Zou most cotton farmers have already attained Stage 3; however due to tse-tse incidenceand the lack of knowledge of Zou farmers of animal husbandry,Stage 4 would be introducedon an experimentalbasis only.

Crop Rotation

3. Cropping patterns and crop rotationvary according to different ecologicalconditions in the project area, and would change on each farm as the farmer moved through various developmentstages. In general, the cropping pattern would meet the followingconditions:

(i) attain self-sufficiencyin food crops for the farmer and his family; ANNEX 7 Page 2

(ii) eliminatebottlenecks in land preparation,weeding and harvesting;and

(iii) enable cereals following cotton to benefit from the residual effect of fertilizersapplied to cotton.

A.typical crop rotation in the Borgou would be: yam; cotton; cotton; cereals; cereais; followed by a fallow period of about four years depending on the effect of cotton fertilizerson the level of soil fertility. In the Zou with two rainy seasons changes in the rotation would be more complicatedfor two reasons: (i) maize should not, as now, proceed cotton, but be replaced by another crop (yam, groundnuts,or pulses); and (ii) upland rice would have to be included in the rotation, since the Zou has no typical low lying rice land like the Borgou. Rice would be sown between June 1 and 15. Cotton between June 5 and 25 in North Borgou, between June 15 and July 5 in South Borgou and between June 25 and July 10 in the Zou. Inputs

4. Pesticides. It is mandatory_/ for cotton farmers to control pests. This would require five to six sprays in the North and six to seven sprays in the South using hnandoperated knapsack sprayers. Spraying would start 45 days after sowing; and thereafterbe repeated every 12 to 15 days. Currently a DDT-Endrinemulsion is used consistingof 450 g DDT and 120 g Endrin per liter applied at a rate of 10-13 liters/ha;and Lindane at 3 liters/ha. Total costs are about CFAF 7,500/ha. Both DDT and Endrin are "hard" insecticidesand accumulatein body tissues; also Endrin has a relativelyhigh mammalian toxicity. Less persistentand dangerous insecticides could probably be used and during the project period the effectivity o:-an Endosulfan-'-ethylparathionmixture would be tested. CFDT would, as now, disinfect cotton seeds at the ginnery before delivering them to project Larmers.

5. Fertilizers. All project farmers in the Zou, and an increasing num'berof farmers in the Borgou would use a standard fertilizertreatment for cotton comprisinga single annual applicationof 150 kg 20-25-12NPS compound fertilizer per ha costing about CFAF 5,000/ha excluding any subsidy. During the project developmentperiod the subsidy on fertilizers would be reduced gradually and consequentlythe price of fertilizersto farrers would increase from CFAF 20/kg in 1971 to CFAF 25ikg by 1974 and CI'AF30/kg by 1975 as compared to 1970 actual costs of CFAF 30/kg in the South and CFAF 35/kg in the North. Fertilizersare not generallyused for crops other than cotton. Consequently,no other fertilizercosts are irLcluded in project costs with the exception of those of rice fertilizers wikichwould be used by Stage 4 farmers at a rate of 150 kg Su1phate Ammonia arnd 50 kg dicalciumphosphate,costing CFAF 7,000/ha. The value of the

1/ !ecrce 70-315 of December 5, 1970. ANNEX 7 Page 3 yield increase per kg fertilizercosting about CŒAF 35 is estimated at CFAF 120-200 (6-10 kg paddy). Introductionof a new groundnutvariety (see para 7) would require the use of a phosphate fertilizer,but during the project development period this variety would be limited to trial fields.

6. Ox-drawn Implements. The demand for ox-drawn implements is increasingrapidly in the Borgou, while in the Zou their use is limited to trials. It is assumed that the number of pairs of oxen would increase as follows:

Projected Minimum Increase of the Number of Pairs of Oxen

1970 1971 1972 1973 1974

Borgou

North 147 307 448 820 1,130

South 193 248 352 570 750

Total Borgou 340 555 800 1,390 1,880

A unit consistingof a plow and a ridger costs CFAF 13,800. The FAC training center at Gamia in the Borgou would continue to train village blacksmithsand oxen-trainers. The number of the latter would increase from 26 at present to about 45 by the end of the developmentperiod. The training center at Bettekoukouin the Zou would continue its demonstrations, but during the project development it is assumed that no oxen would be sold to farmers. Use of draft oxen would not only allow an increase in cultivated area, but also provide farmers with additional income from sales of cattle. Farmers feed their oxen well, and in three working years (from the age of 3 until 6 years) an ox doubles its weight from 175 to 350 kg.

7. Varieties. Cotton varieties used are A 333 in the South and BJA 592 in the North. A 333 (1"-1" 1/32 staple) has a 39% lint outturn in Dahomey which is high compared to other West African countries and equals that of BJA 592 (1"-1" 1/16 staple). Rice varieties used are Sintane-Diofor and Gambioka. The presentlyused groundnut varieties are mainly of local origin, such as Axi Moto in the Zou and 48-57 in the Borgou. New high yielding varieties are available at IRHO's research station at Niangoloko in Upper Volta. In particular,variety 1040 which is rosette resistantwould be tested in the project area. During the developmentperiod a start would be made with the introductionof hybrid maize (MHNI). Varieties now used are Nicaouli 7 and other local varieties in the Zou, and Jaune d'Ina in the Borgou. ANeEX 7 Page 4

Yields and Production

8. The yield and productionprojections used in project calculations are summarizedin Table 2, and details on cotton productionby sub-prefectures are given in Tables 3 and 4. Projections for cotton yields are conservative because present yields are already relativelyhigh. Actual cotton yield and production figures for 1961 through 1970 are given in Annex 1, Table 3. The 1970 average project area yield of 880 kg/ha is considered to be higlI and, therefore,for project calculationsit is assumed that during the first two years of the development period average yields would not exceed the 1970 level and production increases would be obtained mainly front additional acreage.

Novemaber 26, 1971 DAHOMEY

ZOU-BORGOU COTTON PROJ1Tm

LABOR REQUIRFEMNT FOR CASH CROPS PRODUCTION (man-days/ha)

Borgou North Borgou South Zou Crops Field Work Manual With ox-drawn Manual With ox-drawn Manual With ox-drawn implements implements implements

Cotton Land preparation 21 6 21 6 25 6 0 0 7 to 999 Sowirig with "marking roller" 10 10 10 10 10 10 kg/ha Thinning and lst weeding 20 12 22 12 25 12 Second weeding and spraying 1" 2 15 2 15 2 Other weedings 15 - 18 - 20 - Spraying 6 6 8 8 10 10 Harvesting 36 36 36 36 36 36 Uprooting and burning 12 12 12 12 12 12 ol cotton plants Total 132 84 1142 86 153 85 1,000 to 1,200 kg/ha 144 96 154 98 165 100 Over 1,200 kg 156 108 166 110 177 112

Groundnuts Land preparation 21 6 21 6 25 6 Seeds Shelling 6 6 6 6 6 6 Sowing 15 15 15 15 15 15 Yirst weeding and ridging 20 420 20 4 Other weed iLgs 15 10 15 10 20 12 Harvesting 18 18 18 18 18 18 Threshing 20 20 20 20 20 20 'rotal 115 79 115 79 124 di

Rice Tand preparation 25 4 25 4 15 4 Sowing 15 15 15 15 12 12 Weedings 20 3 20 3 25 4 Harvesting and rtacking 16 16 16 16 16 16 Threshing 30 30 30 30 30 30 Total 106 68 106 68 9g 66

Maize Lard preparation 21 6 21 6 25 6 Sowir1g 10 10 10 10 10 10 First weeding and ridging 20 4 .0 4 20 4 Second arid thir*-d weedirngs 15 8 15 8 18 10 Harvesting 10 10 10 10 10 10 Threshing 15 15 15 15 15 15 Total 91 53 91 53 98 55

Sorghum Land preparation 20 6 21 6 25 6 Sowing 8 8 8 8 8 8 First weeding and ridging 20 4 20 4 20 4 Second weeding 10 6 10 6 12 6 Harvesting 15 15 12 12 12 12 Threshinig 18 18 18 18 18 18 Total 91 57 89 54 95 54

March 12, 1971

210H- _, DAHOMEY

ZOU-BORGOUCOTTON PROJECT

CROP AOEA3, YIELDS AND PRODUCTION

ZOU BORGOU TOTALPROJECT AR1A

Year Area Yield Production Area Yield Production Area Yield Production (ha) kg/ha 2! (tons) (ha) kg/ha 2! (tons) (ha) kg/ha 2! (tons) corroN

19'70/71 15,630 895 14,000 12,923 861 11,132 28,555 880 25,132 1971/72 20,530 850 17,700 21,060 78;) 16,447 >41,890 815 34,147 1972/73 23,690 850 2),060 24,84;0 8301 20,674 48,530 840 40,734 1973/74 26,68o >00 23, 86 28,405 900 25,657 55,085 900 49,643 1974/75 27,500 )52 26,130 31,325 940 29,521 58,825 947 55,701 RICE (Paddy)

1970/71 - - - 1,064 1,500 1,63>4 1,054 1,500 1,634 1971/72 150 1,200 180 1,470 1,865 2,741 1,620 1,800 2,921 1972/73 1i5 1,200 222 1,'279 1,925 3,791 2,155 1,860 4,013 1973/74 1125 1,500 640 2,650 2,360 6,257 3,075 2,240 6,897 1974/75 550 1,700 935 3,300 2,745 9,052 3,850 2,595 9,f?7 GROUNDNUrS(Un8helled)

1970/71 11, w6 7U) 8»3 7w n 864 13,086 745 9,758 1971/72 ib,o0o 850 11.900 2 157 785 1,6,85 16,150 840 13.585 19)72/73 15 ,)) 900 13,500 2,5»1 8M5 2,10 17,500 890 15,61l 1973/74 16,)Oo 1,'0' h-,000o 2,a50 89) 2,538 18,850 980 18'538 1974/75 16,500 1,100 i8,î;i 3,2k)0 935 3,0)') 19,71') 1,070 21,150 MAIZE/SORGHUM

1970/71 13,357 825 11,020 10,724 803 8,850 24,081 790 19,000 971/72 16,500 950 15,675 9,750 850 8,287 26,250 1972/73 310 23,962 17,50(0 1,lor 19,250 10,000 1,0)O 10,00 27,80.) 1,)50 29,250 1973/74 13,500 1,200 22,200 12,070 1,203 1O4,1400 30,500 1,200 36,600 1974i75 20,00) 1,200 21h,000 14,000 1,350 18,9Lo 34,000 1,260 42,910

1/ Average yield rounded

April 20, 1971 ANNZX7 Table 3

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

AREA UNDER COTTONCULTIVATION PRODUCTIONPROJECTIONS AND YIELD PROJECTIONS IN ZOU PROJECT AREA /

Years Project Sectors Area in Yields in Production ha kg/ha in tons

1971/72 Abomey 2,500 850 2,125 Zagnanado 500 700 350 Dassa-Zoumé 8,750 900 7,875 Savalou 8,250 800 6,600 Savé 800 900 720 Animal drawn imple- 30 1,000 30 ments Total 20,830 - 17,700

1972/73 Abomey 3,000 850 2,550 Zagnanado 600 700 420 Dassa-Zoumé 9,000 900 8,loo Savalou 10,000 800 8,coo Savé 1,000 900 900 Animal drawn imple- 90 1,000 90 ments Total 23,690 - 20,o60

1973/74 Abomey 3,500 g9o 3,150 Zagnanado 800 750 600 Dassa-Zoumé 10,000 950 9,500 Savalou 11,000 850 9,350 Savé 1,200 950 1,140 Animal drawn imple- 180 1,200 216 ments 2/ Total 26,680 - 23,956

1974/75 Abomey 4,ooo 950 3,800 Zagnanado 1,000 800 800 Dassa-Zoumé 10,000 1,000 10,000 Savalou 11,000 900 9,900 Savé 1,200 1,100 1,320 Animal drawn imple- 300 1,200 360 ments U Total 27,500 - 26,180

Total area with fertilizer.

/ At experimental stage only.

March 10, 1971 DAHOMF.Y

ZOU-BORGOUCOTTON PROJECT

AREA UNDER COTTONCULTIVATION PRODUCTIONAND YIELD PROJECTIONS Il VARIOUS DEVELOPMENTSTAGES IN BORGOUPROJECT AREA

Year Project Sectors Development Stages Total Total Area Productior. With insecticides With fertilizers With animal drawn implements (ha) (t) Hectares Yield Production Hectares Yield Production Hectares Yield Production kg/ha tons kg/ha tons kg/ha tons

1971/72 Malanville - _ _ 1,300 800 1,040 100 900 90 1,400 1,130 Kandi - - - 4,14o 850 3,519 288 1,000 280 4,420 3,799 Banikoara 2,400 650 1,560 2,520 850 2,142 260 1,0o0 260 5,180 3,962 Segbana 420 600 252 940 800 752 120 goo 108 1,480 1,112 Parakou - - 2,060 800 1,648 80 1,000 80 2,140 1,728 Nikki 720 600 432 2,200 800 1,760 240 g9o 216 3,160 2,4o8 Bembereké 180 600 108 2,800 700 1,960 300 800 240 3,280 2,308 Total 3,720 2,352 15,960 12,821 1,380 - 1,274 21,060 16,447

1972/73 Malanville _ - - 1,560 800 1,248 200 950 1go 1,760 1,438 Kandi - - - 4,400 850 3,740 400 1,100 440 4,80o 4,180 Banikoara 1,600 700 1,120 4,200 850 3,570 360 1,100 396 6,160 5,086 Segbana 300 650 195 1,340 800 4,072 160 950 152 1,800 1,419 Parakou - - 2,380 850 2,023 160 1,100 176 2,540 2,199 Nikki 300 600 180 3,500 850 2,975 320 1,100 352 4,120 3,507 Bembereké _ - - 3,260 750 2,415 4° 1,000_ 400 3,660 2,845 Total 2,200 - 1,495 20,640 - 17,073 2,000 2,106 24,840 20,674

1973/74 Malanville - _ - 1,650 850 1,403 550 1,000 550 2,200 1,953 Kandi - - - 4,55o 900 4,095 625 1,200 750 3,175 4,845 Banikoara 800 700 560 5,725 9oo 5,153 625 1,200 750 7,150 6,463 Segbana 1j50 700 105 1,725 850 1,466 250 1,000 250 2,125 1,821 ParakQu - - - 2,600 9oo 2,340 300 1,200 360 2,900 2,700 Nikki - - - 4,100 900 3,690 500 1,200 600 4,600 4,290 Bembereké - - - 3,630 800 2,904 625 1,100 688 4,255 3,592 Total 950 - 658 23,980 21,051 3,475 - 3,948 28,405 25,664

1974/75 Malanville - - - 1,700 850 i,445 g0o 1,loo 990 2,600 2,435 Kandi - - - 4,570 goo 4,275 750 1,300 975 5,800 5,250 Banikoara - - - 7,275 900 6,548 875 1,300 1,137 8,150 7,685 Segbana - - - 2,050 850 1,743 300 1,100 330 2,350 2,073 ParalJu - - - 2700 950 2,565 500 1,300 650 3,200 3,215 Niikki - - - 4,450 900 4,005 625 1,300 813 5,075 4,818 Bembereké - - - 3,700 850 8,145 750 1,200 900 4,45o 4,o4s Total - - - 26,625 - 23,726 4,700 - 5,795 31,325 29,521

March 11, 1971 ANNEX8 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

FEEDERROAD IMPROVEMENT PROGRA1

Introduction

1. The project area is served by about 1,600 km of national road complementedby about 1,000 km of tertiaryroads. National roads are under the responsibilityof the PWD. Until recentlyPWD lacked the necessary funds and equipment to maintain them adequately. However, this situation is expected to improve as a result of a four-year (1970-74) maintenanceprogram undertakenwith IDA financialassistance including procurementof equipment, renovationof workshops as well as budgetary and organizationalreform. Implementationof this program is progressing satisfactorilyand it is expected by 1972 that PWD will have sufficient capacity to maintain the national roads serving the project area.

2. The tertiary roads consistingof primitive tracks are under the responsibilityof the local authoritieswhich, however, lack the resources and capacity to carry out the simple works necessary for their maintenance. These roads play a vital role in linking cotton growing areas with markets and stocking sites. The fact that CFDT is required to guaranteecotton collectioneven from the remotest areas illustratesthe importanceof reliable road transport. The present poor condition of feeder roads serving the project area results in high transportcosts. A feeder road improvementprogram will be carried out under the project to reduce transport costs and facilitate access to new areas to be developed. The Governnent would make arrangements satisfactoryto IDA for the maintenance of project roads including the feeder roads to be improved under the project.

Description

3. The program would consist of the imnprovementof 611 km of selected feeder roads (194 km in the Zou and 417 km in the Borgou; see Table 1). Improvementworks would entail upgrading sections by regraveling, building culverts and fords, opening up lateral outlets and executingother auxiliaryworks.

4. Societe Nationale Agricole pour le Coton (SONACO)would establish annual road improvementprograms to be carried out by PWD. PWD would establisha special unit which would be supervisedby two techniciansto be employed under the project, and also will ensure adequate coordination with SONACO. The project would provide some supplementalequipment, especially two tankers for fuel delivery, two pick-ups as well as some accessoriesand tools to be used by PWD solely for the project.. ANNEX 8 Page 2

Cost Estimates and Financing

5. Estimated program costs net of import duties are detailed in Annex 5, Table 8, and summarizedbelow. Estimates include provision for price escalation and contingenciestotalling 20%.

US$ Equivalent Foreign Local Total

Technical Assistance 162,855 21,714 184,569 Hiring of Equipment 271,425 54,285 322,710 Procurementof Additional Equipment 65,142 10,857 75,999 Procurement and Assembling of Corrugated Steel Culverts 65,142 54,285 119,427 Price Escalation 54,285 10,857 65,142 Physical Contingencies 65,142 10,857 75,999

Total 683,991 162,855 846,846

The estimated expenditure schedule is:

US$ Equivalent

Provision for Including Year Foreign Local Total price Escalation Contingencies 1972 303,996 58,621 362,624 16,285 15,199 1973 184,569 51,027 235,597 18,457 30,400 1974 195,425 53,199 248,625 30,400 30,400

Total 693,991 162,855 846,846 65,142 75,999

Economic Justification

6. The project area has a network of about 1,000 km of 1tcotton roads"i,of which the 611 km listed in Table 1 are the most used. It is estimated that under the project cotton production in the project area would increase from about 34,500 tons in 1971 to about 55,000 tons by 1974/75.

7. The feeder road program would permit lower cotton transport costs. In the near future,as at present,5.5-ton trucks plus trailerswould be operatingon feederroads, but with minor improvementsand a reasonable degree of maintenance,unit savings would be about CFAF 8.35 per ton-km. ANNEX8 Page 3

8. Benefits of improvingfeeder roads would be derived not only from the cotton tonnage to be hauled, but also from transportcost savings on other products, such as farm inputs and commoditiesas well as passenger traffic. These savings are estimatedat 2.4 times the savings on cotton traffic.

9. The economic life of the feeder roads is assumed to be ten years. Under the above assumptionand assuming an annual maintenancecost of CFAF 11.2 million, the economic rate of return for the feeder road programwould be about 11.5Z (see Table 3).

November 26, 1971

ANNÀC8 Table 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

IPROVEMENT OF FEEDER RQAD6

Propoaed Program

Zou District Km

Kïlibo Kemou Ouesse Djigbo 46 RN 7 Pioneer VillagG 10.5 Savalou Tchetti 38 Tchetti Douma 22 RN 7 Bedavo VedJi 38.6 Logozake Aklanpa 39

194.1

Borgou District

Bori Teme Kori 23 Bemloereke Bouanri Gbekou 34 Kalale Dunkassa 29 Agrabansou Ouari Maro 10 Alafiarou Agbasse 35 Fo Boure Sinende Yarra 50 Gando Sinende 38 Sinende Guessebani 20 Saore Toumie 22 Biro Niakalakale 25 Gogonou Zougou 32 Sori Lougou 27 Sam Sansoro 7 Warandji Socotindji il Warandji Libante 25 Libante Segbana 20 Libante Saouzi

417

Totals 611

April 29, 1971 ANNEX8 Table 2

DAH01tDY

ZOU-BORGOUCOTTON FROJECT

IMPROVEMNTOF FEEDERROADS

Eauipment to be Hired

(in days)

Zou District Borgou District Total Equipment 1/ 1972 1973 1974 1972 1973 1974 Days

Bulldozer 50 50 50 100 100 100 450

Shovel 50 50 50 100 100 100 450

Low Loader 15 15 15 40 40 40 165

Dtup Truck 150 150 150 300 300 300 1,350

Motor Grader 70 70 70 150 150 150 660

Compactor 50 50 50 100 100 100 450

1/ For each unit 150 working days a year are assumed.

April 29, 1971 kMINEX8 Table 3

DAH0MGY

ZOU-BORGOUCOTTON PROJECT

IMPROVEMENTOF FEEDERROADS Economic Analysis

(CFAFmillion)

Net Year Costs Benefits Benefits

1972 91.55 17.25 - 74.30

1973 62.70 31.60 - 31.10

1974 68.90 44.OO - 24.90 1975 11.20 44.00 + 32.80

1976 11.20 44.00 32.80 1977 11.20 44.00 32.80

1978 11.20 44.00 32.80 1979 11.20 440.0 32.80

1980 11.20 44.00 32.80 1981 11.20 44.00 32.80

Economic Rate of Return 11.52%

April 29, 1971

A.TNEX 9 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Research Institutesand Proposed Subjects for Research

General

1. Research on the main crops of the project area has been and would continue to be the responsibilityof Institut de Recherchesdu Coton et des Textiles Exotiques (IRCT) - for cotton, and Institut de RecherchesAgronomi- ques Tropicaleset de Cultures Vivrieres (IRAT) - for food crops, such as rice and groundnutsand ox-drawn cultivation. A description of these institutes is given below. In Dahomey agriculturalresearch has been hampered by lack of funds, and generally the applicationof results has been poor due to inadequateextension services, although cotton extensionhas been an exception.

A. Institut de Recherches du Coton et des Textiles Exotiques (IRCT)

Organization and Staff

2. IRCT was establishedin 1946 as a non-profitFrench association. Its objective is to develop productionof cotton and other fiber crops. Its Board of Directors consists of 40 representativesof the French Government, private organizationsand enterprises,and of the countrieswhere it operates. Eleven elected directors form a ConsultativeCommittee. IRCT's staff comprise 100 French research workers and techniciansand 180 local staff stationed in 17 research stations. While IRCT has been operatingin Dahomey since 1961 it does not have its own research station and depends for fundamentalresearch on the IRCT stations in Togo and Ivory Coast. Applied cotton research in Dahomey is carried out at twelve permanent experimentalcenters, four in the Borgou, four in the Zou and four in the South. Operationsare directed by a French director in Cotonou who heads a staff of three professionalresearch workers.

Operations

3. IRCT operates in all ex-French territoriesin Africa that produce cotton or other fibers and, in addition, in twelve other countries throughout the world. IRCT introducedthe Hirsutum cotton variety into the Borgou in 1962, and into the Zou in 1965 to replace the traditionalBarbadense variety. Fertilizer,insecticide and crop rotation experimentsare conducted at the twelve centers, while variety trials are carried out on test plots throughout the cotton areas. In addition, IRCT provides cotton seeds for multiplication, ANNEX 9 Page 2

and controls the first two stages of such multiplication (see Annex 12). 'RCT is also concerned with kenaf research in Dahomey.

Financial Arrangements

4. In Dahomey, unlike most ex-French territories, IRCT has no general agreement under which Government and France share research station costs. fRCT's Dahomean activities are linked with specific projects; their costs are :Lncludedin project costs and for each project a specific research agreement iLsconcluded with Goverrment. In addition to such agreements for the FAC- financed Zou and Borgou cotton programs, IRCT is under contract with the Government for cotton research in the Atakora, financed by FED and the national budget, and in the South financed by FAC; and for kenaf research f'inancedby the national budget. The amounts of these funds available f'or IRCT operations in 1970 are summarized below:

Funds for IRCT Operations in Dahomey in 1970

Operation Source of Finance Amount (CFAF'000)

Borgou FAC 14,385 Atakora FED 2,667 Dahomey 3,392 Zou FAC 7,650 Dahomey 4,900 South FAC 13,286 Kenaf Dahomey 13,082 Total 59,362

B. Institut de Recherches Agronomiques Tropicales et des Cultures Vivrieres (IRAT)

Organization and Staff

5. IRAT was established in 1960 as a non-profit French association. Ii:sobjective is to undertake and develop applied research in the fields of general agronomy and food crops in tropical countries. Its Board of D:Lrectors consists of 14 representatives of French ministries and public organizations, 14 representatives of countries where it operates and 12 representatives of French scientific organizations. Its staff comprises 140 research workers and 75 technicians or research assistants. In Dahomey IRAT has research stations at Niaouli and Ina, and three regional experimental centers (Borgou, Zou and South). It has four permanent test plots for rice irnthe Borgou, and six for crop rotations: two in the Borgou and four in the Zou. Operations are directed by a French director in Cotonou who controls five professional research workers.

Operations

6. IRAT operates in 13 African countries and in four overseas departments of France in the Indian Ocean and the Carribbean area. In addition, ALN4EX9 Page 3

it provides advisory services to some 14 countries in Central and South America, the Middle East and Asia. In Dahomey IRAT concentrateson applied research especiallythe rotation of cash crops with food crops, on rice trials, and on experimentswith ox-drawn implements. IRAT's crop intensification research includes experimentson fertilizerand insecticideuse and the testing of new varieties and cultivationtechniques. In groundnut research IRAT is assisted by Institut de Recherchespour les Huiles et Oleagineux (IRHO).

Financial Arrangements

7. In Dahomey IRAT operates under a general agreement with Government which shares costs with France on a fifty-fiftybasis. In addition, IRAT has concludedspecial agreementsfor research work related to particular developmentschemes, especiallythose financed by FAC, as shown in the following table:

Funds for IRAT Operationsin Dahomey in 1970

Operation Source of Finance Amount (CFAF'000)

Research stations 50% FAC, 50% Dahomey 53,000

Borgou FAC 4,500

Zou FAC 9,600

South FAC 4,500

Oueme FAO 14,000 Total 85,600

C. Proposed Subjects for Research

8. Under the project the followingsubjects would be the basis of IRCT and IRAT applied research programs:

(i) Cotton: determinationof optimum nutrient application, including potassium;and replacementof DDT and Endrin by other less "hard" insecticides.

(ii) Rice: introductionand selection of high yielding varieties; fertilizertr_ais on swamp rice in the Borgou, and on upland rice in the Zou.

(iii) Groundnuts: înzroduction of high yielding and rosette resistant varietîes; determination of nutrient requirements of these variet.es. (iv) Maize and sorghun: introduction of new h.1ybrid varieties and determinatiorn of their fertilizer requirements.

Novemoer 12, 1971

ANNEX 10 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Farm Models and Budgets

Farm Models

1. The followingtable gives a summary of the changes in the area under cotton and other crops that are expected to take place on a typical project farm in the North Borgou area moving through the four stages of development. Similar details for the South Borgou and the two zones in the Zou are given in Table 1.

Changes in Crop Areas on a Typical Farm in the North Borgou Area Moving Through the Four Stages of Cotton Pro- duction Intensification(ha)

Crops Total At Conclusion Sorghum, Other Farm of Stage Cotton Rice Groundnuts Maize Crops Area

Before project - 0.10 0.10 3.50 1.05 4.75 Stage 1 1.00 0.10 0.15 2.25 0.70 4.20 Stage 2 1.50 0.15 0.15 1.75 0.75 4.30 Stage 3 2.00 0.25 0.15 1.75 0.85 5.00 Stage 4 2.50 0.75 0.15 1.75 0.75 5.90

2. The followingtable summarizesthe variation in farm areas and cotton yields according to zones and stages of development.

Area Cultivatedon a Typical Farm and Cotton Yields by Zones and Stages at Full Development (ha and kg/ha) /1 /1 /2 /2 At Conclusion North Borgou- South Borgou- Zou 1- Zou II- of Stage Area Yield Area Yield Area Yield Area Yield

Stage 1 4.20 - 4.65 - 3,53 - 4.35 - Stage 2 4.30 875 4.80 900 3.30 - 4.15 - Stage 3 5.00 1,100 5.00 1,050 3.80 950 4.00 1,000 Stage 4 5.90 1,300 5.70 1,250 - - - -

/1 No project farmerswould remain in Stage 1. /2 All project farmerswould start and remain in Stage 3. ANNEX 10 Page 2

:3. Project area farms are growing cotton at varying levels of intensity. The following table gives CFDT and SATEC estimates of the present situation,and forecastsof developmentduring the project period:

Number of Farms in the Four DevelopmentStages

BORGOU Situation 1970 Forecast 1971 Forecast 1974 Stages Number % Number % Number %

1 4,170 32 3,720 25 - O 2 7,890 61 9,667 66 13,839 74 3 523 4 730 5 2,933 16 4 340 3 555 4 1,880 10 Sub-total 12,923- 100% 14,672 100% 18,652 100%

ZOU (only Stage 3) 16,170 20,000 22,500 /2 Total 29,093-- 34,672 41,152

/1' Total number of all farms in the Borgou: 31,590 T7 Total number of ail farms in the Zou: 53,900

Farm Budgets

4. A summary of farmers' annual net cash incomes in various districts and at conclusionof the four developmentstages is shown in the following table. Details are given in Tables 2, 3, 4 and 5.

Net Cash Incomes of Typical Farms before Project and at Full DevelopmentAfter Payment of Taxes /1 and Credit Repayments

(CFAF'000rounded) North Borgou South Borgou Zou I Zou II /2 Before project 2.0 6.0 9.0 12.5

Stage 1/3 - - Stage 2/3 25.3 26.0 - - Stage 3- 51.4 44.1 24.0 35.9 Stage 4 104.7 84.8 - -

7W7 Head taxes for a farmilyin the North Borgou are estimated at CFAF 8,000; in the South Borgou at CFAF 9,600; and in the Zou at CFAF 6,400. /2 Farms groving no cotton and excludingrevenues from fishing and livestock. 73 See footnotes Table in para 2.

November 12, 1971 ANNEX10 Table 1

DAiOrItY

ZOU-BORGOUCO'TON PROJECT

LREMSCROPPED ON A TYPICAL FARN (in ha)

Stage of Crop Borgou Borgou Zou I Zou II Intensification North South

Befoïie Project Cotton - - - 0.50 Rice 0.10 - - Groundnuts 0.10 - 0.70 0.55 Sorghum and Maize 3.50 2.60 0.75 1.30 Other crops inclu- 1.05 2,30 1.35 1.85 ding yams Total 1/ 4.75 4.90 2.80 4.20

Conclusion Stage 1 Cotton 1.00 1.00 0.80 1.00 Rice 0.10 - 0.05 0.05 Groundnuts 0.15 0.10 0.80 1.00 Sorghumi and Maize 2.25 2.85 1.00 0.80 Other crops inclu- 0.70 1.30 0.85 1.50 ding yams Total 1/ 4.20 4.65 3.50 4.35

Conclusion Stage 2 Cotton 1.50 1.50 1.00 1.20 Rice 0.15 0.10 0.10 0.10 Groundnuts 0.15 0.10 1.00 1.00 Sorghum and Maize 1.75 2>.25 1.00 0.89 Other crops inclu- 0.75 0.85_ 0.70 1.00 ding yams Total 1/ 4.30 4.80 3.80 4.15

Conclusion Stage 3 Cotton 2.00 2.00 1.00 1.50 Rice 0.25 0.25 0.10 0.10 Groundnuts 0.15 0.15 1.00 0.80 Sorghum arnd Maize 1.75 1.50 1.00 0.85 Other crops inclu- 0.85 1.10 0.70 0.75 ding yarns Total 1/ 5.00 55.00 3.80 4.00

Conclusion Stage 4 Cotton 2.50 2.50 Rice 0.75 0.75 Groundnuts 0.15 0.15 Sorghum and Maize 1.75 1.20 Other crops inclu- 0.75 1.10 ding yams Total 11/ 5.90 5.70

Family size (persons) 10.0 13.0 7.7 7.0 Number of working persons 2.6 3.3 4.0 3.5

1/ No fal'ow included

March 11, 1971

DAHOMEY

ZOIJ-BORGOUCOTTON PROJECT

TYPICAJ FARA BUDGETS IN THE TWO ZOU AREAS (CFAF) ZOU I ZOU II AREA SAVE-ZAGNANADO AREA SAVALOU-DASSA-ABOMEY

Year O Year 1 Year 4 Year 5 Year O Year 1 Year 4 Year 5 I. Productioin 1. Cotton Area (ha) 0.70 0.80 1.00 i.00 0.80 1.00 1.50 1.50 Yield (kg/ha) 800 800 950 1,000 820 850 1,000 1,100 Production (kg) 560 640 950 1,000 656 850 1,500 1,650 Value of production 19,376 22,144 32,87^ 34,600 22,698 29,413 51,900 57,000 2. Rice S Area (ha) - 0.0 0.10 0.10 - 0.05 0.10 0.10 Yield (kg/ha) - 1,200 1,70>1 - 1,200 1,700 1,800 Production (kg) - 60 170 180 - 60 170 180 Value of production marketed - 600 1,700 1,800 - 600 1,700 1,800 3. Maize and Sorghumis/ Area (ha) 0.80 0.90 1.00 1.00 0.70 o.80 0.85 0.90 Yield (kg/ha) 825 900 1,200 1,200 825 925 1,200 1,250 Production (kg) 660 810 1,200 1,200 578 740 1,020 1,125 Value of production marketed 1,584 1,944 2,880 2,880 1,387 1,776 2,448 2,700 4. Groundnuts 4/ Area (ha) 0.70 0.70 1.00 1.00 o.65 0.80 0.80 0.80 Yield (kg/ha) 750 750 1,000 1,100 750 850 1,100 1,100 Production (kg) 525 525 1,000 1,100 488 680 880 880 Value of production marketed 4,?00 4,200 8,000 8,800 3,904 5,44o 7,040 7,040

Total value of produe:tion 25,160 '8,88fl 45,450 48,o80 27,989 37,229 63,088 68,540 Il. Inputs Seeds 1,k'00 1,350 1,900 1,900 1,100 1,500 1,655 1,630 Tools 1380 980 1,p01 1,240 860 1,o60 1,300 1,320 Cotton sprayin, 4,607 s,4o4 7,408 7,630 5,866 6,780 11,112 11,445 Cotton fertilizero 0,100 4,700 4,500-,400 2,400 3,000 6,750 6,770 lier fertilicers ------Animal drawn implementa ------Total cash cost.s 2,&07 10,154 15,048 15,270 10,226 12,340 20,817 21,145 Net cash before taxes 5' 16,353 18,734 30,402 32,810 17,763 24,889 42,271 47,395 Labor requirement (Man7,ay> '7` 30? 385 397 272 335 440 445 Revenue per man/day 60 62 78 82 67 74 96 106

/ Cash crops only 2/ Home consumption 50% (25% at Stage 4) 80% P .. tt 9~~0% 5/ Head taxes are estimated at 4 x CEFAF1,600

March 11, 1971

DAHOME~Y

ZOU-BORGOUCOTTON PROJECT

TYPIOAL MAMBUDURTS IN THr, FOMRURVELOPRENT STÂURS (NORT'H B0R00U)

(CFÂF)

Stage 1 Stage 2 Stage 3 stage 4 Y-ar 0 Vea i erh Va YearerO 4 YearVa Year ear S 1 Yeary. 4O Y-arc 5 Year' O Year i Year 4 Year 5

I. ProductionI

1. Cotton Area (ha) 1.00 1.00 1.50 1.50 1.50 1.50 2.00 2.00 2.00 2.00 2.50 2.50 2.50 2.50 Yield (kg/ha) 600 650 -750 800 875 900 850 950 1,100 1,100 1,100 1,100 1,300 1,500 Production(kg) 600 650 1,200 1,200 1,313 1,350 1,700 1,800 2,200 2,200 2,750 2,750 3,250 3,750 Value of production 20,028 21,047 ,37,187 38,856 42,516 43,714 55,046 58,284 71,236 71,236 89,045 89,045 .105,235 1.21,425 2. Rire Area (ha) 0.10 0.10 0.10 0.10 0.15 0.15 0.20 0.20 0.25 0.30 0.50 0.50 0.75 0.7,5 Yield (kg/ha) 1,200 1,300 1,200 1,300 1,500 1,500 1,500 1,500 2,000 2,000 2,200 2,500 3,200 3,350 Production (kg) 120 130 120 130 229 225 300 300 500 600 1,100 1,250 2,400 2,513 Value of production 1,200 1,300 1,200 1,300 2,250 2,250 3,000 3,000 5,000 6,000 11,000 12,900 24~,000 25,1.30 mnarketed

Area(Th. 2.25 2.25 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1.75 1,75 1.75 Yield (kg/ha) 700 750 900 1,000 1,200 1,200 1,200 1,200 1,500 1,500 1,200 1,200 1,500 1,500 Production (kg) 1,575 1,687 1,575 1,750 2,100 2,100 2,100 2,150 2,625 2,625 2,100 2,100 2,625 2,625 Value uf prodUction 5,670 6,073 5,670 6,300 7,560 7,560 7,560 7,560 9,450 9,450 7,560 7,560 9,450 9,450

4. Groundouts4/ Arjea(ha) 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.1,5 0.15 0.15 0.15 0.15 0.15 Yield (kg/ha) 850 850 900 900 1,100 1,100 900 900 1,100 1,100 900 900 1,100 1,100 Production(kg) 123 123 135 135 165 i65 135 135 165 165 135 135 165 165 Value uf production 1,024 1,024 1,080 1,080 1,320 1,320 1,080 1,080 1,320 1,320 1,080 1,080 1,320 1,320 a,naketed Total value of production 28,941 29,444 46,80)6 47,536 53,646 54,8415 66,686 69, 944 87,006 88,oo6 li4,185 116,435 152,005 169,890

II. Inputs

Seeds 2,754 2,754 2,600 2,600 2,725 2,725 2,850 2,850 2,925 3,000 3,150 3,150 3,225 3,255 Tools 1,400 1,4'00 1,4oo 1,400 i,420 1,420 1,640 1,64o 1,66o 1,680 1,627 1,470 1,557 1,557 Cotton spraying 4,1)~5 5,768 7,800 8,652 9,455 9,738 11,050 11,536 ip,6o6 ip,984 17,875 14,420 15,758 16,221 Cotton fertilizers- 4,5oo 4,500 6,750 6,750 6,ooo 6,00o 9,000 9,000 7,500 7,500 11,250 11,250 Rire ftizes------1,446 1,787 3,530 3,530 5,784 5,957 Animsald-aw slple,ents - - 3,450 3,450 1,725 -

Total caoh cesto 8,379 9,922 16,300 17,152 20,350 2o,633 21,540 22,026 27,637 28,451 37,132 33,520 39,299 38,220

Net cash before taueo5/ 18,181 19,522 28,837 30,384 33,296 34,211 45,146 47,898 59,369 59,555 77,053 82,915 112,706 131,670

Labo, requirmenet(mou/day) 365 365 386 386 391 391 461 461 491 495 416 4i6 433 433

Revenue per mo/day 90 53 75 78 85 87 107 103 120 120 185 199 260 304

1/ Cash crops only /Humeconsomption 50% (25% at Stage 4)

Head txsame estimted at 9 x OFAF1,6o0

Marrh 12,1971 1 DAHOMEY

ZOU-BORGOU COTTON PROJECT

TYPICAL FARM BtLDMOTS IN THE FOUR SVELCP1E1Sr STAGES (SOUTH BORGOS)

(CFAF)

Stage 1 Stage 2 Stage 3 Stage 4 YearT O Year 1 Year 4 Yecr 5 Year Year 51 Yeara 4 O YearYesr YearYear r Year1 I. Production a Y Year 4 Year 5 1. Cotton Area (ha) 1.00 1.00 _ _ 1.50 1.5 1.50 1.50 2.0u 2.00 2.00 2.00 2.50 2.50 2.50 Yield (kg/ha) 550 2.50 600 - - 750 800 900 950 800 850 1,050 1,100 1,000 1,000 1,250 Production (kg) 55o 1,400 600 - - 1,200 1,200 1,350 1,425 1,600 1,700 2,100 2,200 2,500 2,500 3,125 3,500 Value of production 18,359 20,028 - - 38,387 40,056 4),o63 47,567 53,428 56,746 70,098 73,436 83,450 83,450 104,316 116,830 2. Rice / Area (ha) - - 0.10 0.15 0.20 0.20 0.25 0.25 0.50 0.75 0.75 0.75 Yield (kg/ha) 1-,650 1,800 1,450 1,500 1,850 2,200 2,200 2,400 3,250 3,350 Production (kg) - 165 270 290 300 463 550 1,100 1,800 2,436 2,515 Value of~ production marketed 1,650 2,700 2,900 3,000 4,6304611,000 5,So 18,000 24,380 25,150 3. Maiza ad Sorghum à/ Area (ha) 2.25 2.25 2.25 2.25 2.25 2.25 1.50 1.50 1.50 1.50 1.20 1.20 1.20 1.20 Yield (kg/ha) 900 850 - - 1,000 1,100 1,500 1,800 1,200 1,300 1,800 2,000 1,200 1,300 1,800 2,000 Production (kg) 1,913 2,025 - - 2,250 2,475 3,375 4,050 1,800 1,950 2,700 3,000 1,44o 1,560 2,160 2,400 Value of production marketed 5,739 6,075 - - 6,750 7,425 10,125 12,150 5,400 5,850 8,100 9,000 4. Groundnuts 4/ 4,320 4,680 6,480 7,200 Area (haj 0.10 0.10 - - 0.10 0.10 0.10 0.10 0.10 0.10 0.15 0.10 0.10 Yield (kg/ha) 0.15 0.15 850 9(0 - - 850 900 1,000 1,100 850 900 1,000 1,100 850 900 1,000 1,100 Production (kg) 85 90 - - 85 90 1o00 LO 85 90 150 165 85 90 150 165 Value of production marketed 680 720 680 720 800 880 680 720 1,200 1,320 680 720 1,200 1,320 Total value of production 26,447 26,823 47,486 48,201 57,638 63,297 62,408 66,316 84,o28 89,256 99,45o 106,150 Il. Inputs 136,376 150,500 Seeds 2,050 2,050 2,050 2,050 2,250 2,315 2,700 2,700 2,780 2,780 2,850 3,000 3,050 3,050 Tools 1,340 1,340 1,540 1,54o 1,580 1,580 1,520 1,520 1,560 1,560 1,505 1,593 Cotton spraying 1,610 1,610 4,500 6,988 - - 9,000 10,483 11,454 11,797 12,000 13,977 15,271 15,730 18,750 17,472 Cotton fertilizers 19,089 19,662 - - _ 4,500 4,500 6,750 6,750 6,ooo 6,000 9.000 9,o0o 7,500 7,500 Rice fertilizers 11,250 11,250 ______1,764 1,816 3,0 4,845O 5,290 5,448 Ani.ell dran .iMplss.ents ------3,450 3,450 1,725 - Total cash costs 7,890 10,378 17,090 18,573 22,034 22,442 22,220 24,197 30,375 30,886 37.285 37,860 Net cash before taxes 42,014 41,020 5/ 16,838 16,445 - - 28,720 29,628 35,604 40,855 40,188 42,119 53,653 58,370 62,165 Labor requirment (manTday) 68,290 94,362 109,480 350 359 - 430 430 441 446 454 454 489 489 355 372 402 402 Revenue per man/day 47 45 - 67 68 80 91 88 92 109 119 175 185 234 272

Cash crops onyî'' Home consumption 50% (25% at Stags 4) 80%

Head taxes arae esti,ated at 6 x CFAF 1,600

March 11, 1971 ÀNNEX1 0 Tab'le 5

DÂHOMY!

ZOUI-BoRGOUCOTTN PROJET

CROPPINGPATRNS, INPUTS, Y2ELDS,DPRCDUCTION AND PRICES

Miniium Producer Prices for 1970/71 (CFF per kg)

Products Borgou Zou

Cotton First QuaSity 32.50 1/ 34.75 "i fi fi 33.50 2/

Cotton Second Quality 26.50 2/ 27.50 ut us ni 27.50 2/

Groundnuts 16.oo 16.00

Paddy 20.00 20.00

ParboiledRice 37.00 41.00 Beans 20.00 30.00 Maize 15.00 12.00 Cassava 4.00 3.50 Ya' 5.00 4.00 Chili 30.00 35.00

Okra - 35.00 Sorghum 15.00 12.00 Earth Peas - 30.00

Sheanuts 14.00 -

l/ North Borgou 2/ South Borgou

March16, 1971

ANNEX 11

DAHOMEY

ZOU-BORIGOUCOTTON PROJECT

Cotton Seed Production

1. In Dahomey as in many other French speaking countries the Institut de Recherchesdu Coton et des Textiles Exotiques (IRCT) is responsiblefor the introductionand first stage multiplicationof improved cotton varieties. Presently the varietiespropagated are A 333 1/ in the South and BJA 592 2/ in the North. As shown below it takes about three years to multiply foundationseed to an amount sufficient to supply all cotton producers.

Cotton Seed Multiplication

MultiplicationMedium Year i 1 2 3 4

North (35 kg seeds BJA 592/ha) 10 ha CFDT farm at Kassakou (Kandi) 10 t seeds

First group selected farmers 350 ha 180 t seeds

Second group selected farmersJ 6,000 ha All farmers in the North x

South (25 kg seeds A 333/ha) 14 ha CFDT farm at Savalou 14 t seeds

First group selected farmers 450 ha 220 t seeds Second group selected farmers 8,000 ha All farmers in the South x

/1 At this stage multiplicationis carried out in two different zones to reduce transportationcosts.

2. To guarantee the purity of seed IRCT, togetherwith CFDT, supervises the selected farmers. There is no problem in obtainingan adequate number of selected farmers while they receive no additionalpayment for seed growing.

1/ (1"-1" 1/32 staple, 38% lint to seed cotton).

2/ (1"-1" 1/16 staple, 38% lint to seed cotton). .ovember 12, 1971

DAEI 12

Z0-R80800U C07TON PROJECT

PROOSIEDPROJECT FIN8C0D

(CIAF x 000) U8$ Eq.icale.t 1971 1972 1Q1974. Total Equient

IDACredit,

AgriculttmI Extension 82,330 321.9 Noues, officue, stores - 69,510 12,820 - 10,400 40.6 Furnituv, office equipnent - 10,400 - - 42,310 165.4 V hiole pmhurœe - 16,430 18,000 7,880 59,890 662,900 2,591.6 Incre.uoital 9Faer 0nt - 486,500 116,510 - 362,390 1,416.8 Pre..s.iCl Plota - 239,510 122,880 160,870 628.9 Feesdr Road Twrooe,ut - 75,100 42,930 42,8140 117,5140 459.5 Research _ 39,180 39,180 39,180 52.7 Studi - 13,500 - 13,500 100,420 392.6 Ontilngeoies - _46.590 32.460 21,370 6,070.0 48.o3 Total IDA F5nsncig - 983,220 398,280 171,160 1,552,660

F9C Crodit:

Agricultural Extenrion 7,720 1,430 _ 13,650 53.4 Nouse, offices, atores 4,500 14.4 Faroituos, offi. equipnet 2,549 1,160 - 3,700 22,990 90.0 Vehic.le purihases 18,290 1,830 2,000 870 .apatriate salaries 114,650 138,030 122,900 107,800 483,380 1,889.7 66 650 ' ' ' 66 650 260.6 Lo.l salaries 123.5 oprating oosta 31,600 _ _ _ 31,600 Vahicl. 17,110 66.9 Renta, utilitie, etc. 17,110 - 42,790 167.2 Procssing Pai0 - 28,210 14,580 - 17,880 69.9 Feeder Road Dt.Drovement - 8,350 4,770 4,760 180.0 ROSù'rch 33.000 4,350 4,350 4,350 46,050 1,500 5.9 Studios - - 1,500 - 48.230 188.5 Gootingsc2eis 590 12.080 16.200 19.360 3,110.0 24.5% Total FAC Pinaacing 288,930 201,730 167,730 137,1l0 795,530

-rnruent: Aitricltara.1 Exteoaic Local salaries 56,770 154,310 159,610 163,260 533,950 2,087.4 527.3 oprtir oete - 45,680 44 960 44,240 134,880 Vehicls 65,580 256.4 sait,,otflltis-, tc. - 20 250 22,590 22,740 73,660 288.0 Icoreumntal Far,.inot - 51,060 12,950 6,650 9,030 35.3 R-shrci 9,030 - - 77,660 303.6 Continog.nois - 13.280 25.890 38.490 3,098.0 27.5 % Total OowGrnt Fioaocing 65,800 287,580 266,000 275,380 894,760

12,678.0 Total Proisot ce.t 35b,730 1,b72,530 832,010 583,680 3,242,950

Ja.iry 17, 1972 DAHOltY

ZOU_BORGOU COTTON3 MOJECnT

DTSBU.R0EFENUIDA ClnDIT

(CFA? tillion)

1 973 1971 Financia]. Year 1975 Equl- T t.1 Valent indig Quart-r 1 2 3 L I 3 4 1 2 3 4 CFAFM llion Mt 000 D-i.bursandat of 1003t of

I. Imported gi-ncy equiponnt 31.5 31.5 31.5 2i,6 15,7 15.7 15.7 13,7 Ri-o hu1lers 182.2 712.3 - 7. 8 - - - 1.5 - - Vshicles - SONtCO 4,.1 .1 9.3 36. 8.1 L.1 b.5 4.5 3.5 4.5 2.0 2,0 2.0 2.0 b2.4 165.8 Ve.hiole - Ginneri.. 0o8 _ _ C 5 - - - _ _ _ 1.7 6.6 nhiScleu - bdaS rogra L.3 8.3 4.3 1.ult.3 67.6 Stesl pipss - Road Progran .7 L.7 .8 8.8 1.0 l,o 1.0 1.1 1.0 1.0 1.0 1.1 27.2 10.3

Sub_Total 280.1 1,095.0 Disbwr.-ennt les, than 100t:

Il, 90% of: mccc,es,offices, stures 17.4 17.8 17-b 1 ., 3 3.2 3.2 3.2 3.2 _ _ _ _ 82.3 321.7 Furniture, offi ce equipwnft 2., 2.6 2.6 2.6 - - - - - _ _ _ 10.4 1.0.6 Ginnery building 20.8 20.3 ?0.8 20. ~ 11.4 11,5 11.5 11.3 _ _ _ _ 129.2 505.1 Oinrery maohSne,y 3outallaio,, h,j 6.3 6.J 6.8 3.7 3.7 3.6 3.7 - _ _ _.0.0, 156.4 -serrnadio pe nt) ;7 9.7 9.7t.7 9.7 9.7 Operating -ots 9.7 9.7 9.7 9.7 9.7 9.7 116.b 455.0 Rssearch . 3.3 '3 9. 9.8 9.8 9,8 9.7 9.8 9.8 9.8 9.8 117.5 459.4 Study - - - - 13.5 ------13.5 52.8

Sub-Total 509.3 1,991.0

111.100t uT `Li 2outo o? Total Tmoisco Puarchases 0f Fa,', nputs in Fîret Fr00oc3 Year anS 15it tn, Ono Foflowlug mears: - i1.Y.: - - 85.0 - - - 93.9 - 662.9 2jS91.5 IV. haollo^ated: 1.6 ii., 11.6 11.7 8.1 5.1 8.2 8.1 5.3 5.4 5.3 5.3 100.4 392.5

Total DiSbays-nnt (.FAF s:illion) 123.7 130. 8 606 Jî 119.? 81.5 68.7 152.2 643, 27.8 27.9 121.7 27.9 t,5S2.7 6,070.0 Totsl Disburs-n.nt (24 50003) d3.6 511,. 2,372.6 166.o 318.6 ?68.6 595. 0 251.8 108.7 109.0 475.8 108.7 U.dra-n Ralance at fld oL ouart3r o?f13 Fi-anoial Ye.r, 13$ '000 ;,',d5 . 6J7;.. 2, 303.L 2,236.1 1,917.8 1,6,49.2 1,058.2 802.4 693.7 585.7 108.9 0.0

Jan-ary 17, 1972 ANNEX12 Table 3

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

ESTIM&TEDSCHEDULE OF DISBURSEMENT

(US$ '000)

IDA Fiscal Year CumulativeDisbursement and Quarter End at end of Quarter 1973

September 483.6

December 995.0

March 3,367.6

June 3,833.6

1974

September 4,152.2

December 4,420.8

March 5 ,O15.8

June 5,267.6

1975

September 5,376.3

December 5,485.3

March 5,961.1

June 6,070.0

January 18, 1972

ANNEX 13 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Compagnie Francaise pour le Developpementdes Fibres Textiles (CFDT)

Organization

1. CFDT was establishedin 1949 to provide technicalassistance to France's overseas territories (and subsequentiyotlier c`ountries) for the developmentof fiber crops, ltnparticular, cotton. CFDT is a non-profit oriented statutorybody (Societed'Economie Mixte), mainly financed by the French Gov- -nèL.I-t-sBoard of Directors consists of representativesof the French ministries concernedwith financial and technicalassistance, private commercial and industrial aroups, Caisse Centrale de CooperationEconomique (CCCE) and Institut de Recherches du Coton et des Textiles Exotiques (IRCT). Headquartersare at Paris and comprise four main divisions: Agriculture; Industry and Equipment; Commerce;and Finance and Accountancy.

2. CFDT has a regional office in Bobo-Dioulasso(Upper Volta), which supervises CFDT's activities in Ivory Coast, Mali, Upper Volta and Niger. Paris headquarters are responsible for supervising Dahomey operations.

3. The advantagesof CFDT's central organizationare appreciableto recipientcountries. The quality of services provided are far greater than any single recipient country could afford on the basis of its own cotton production. There are further advantagesin CFDT's headquartersbeing in Paris: CFDT is able to obtain favorable prices for the supply of production requisites and equipment by bulking the orders of the producing countries that it assists as well as favorable insuranceand transportrates for the whole of CFDT's activities;and centralizingfinal sales from its Paris headquartersfacilitates the timely delivery to cotton buyers of supplies in the quantities and qualities desired.

Provision of TechnicalAssistance

4. Technical assistance provided takes usually the following forms, or a combinationof them:

(i) Crop production- CFDT organizes extensionservices to teach farmers to use improved cotton cualtivationmethods. Frequently these methods are based on research results obtained by the Institut des Recherches du Coton et des Textiles Exotiques (IRCT);

(ii) Ginning and marketing - In countries which have no ginneries and lack marketing experience,CFDT constructs its own x ginneries and organizes the marketing, export and final sale of cotton; ANNEX 13 Page 2

(iii) Management- In countrieswhich have national ginneriesbut lack competent technicalstaff, CFDT enters into agreements for the management of such ginneries;

(iv) Consultancy- CFDT carries out feasibilitystudies, and prepares cotton developmentplans and programs.

5. CFDT operates in a number of countries, for example:

(i) Crop production - 14 countries in Africa, 2 in the Mediterraneanarea and 6 in Asia;

(ii) Ginning and marketing - 9 countries in Africa; and

(iii) Management- 4 countriesin Africa.

FinancialArrangements for TechnicalAssistance Services

6. For the four forms of technicalassistance (para 4) CFDT is remuneratedas follows:

(i) Crop production- The costs charged by CFDT for providing extensionservices in African countriesare generallysimilar. The Governmentagrees to reimburseCFDT for costs of expatriate and local personnel employed directly by CFDT, and costs of CFDT's operation. In addition, CFDT receives annually 15% of total personnelcosts to cover overheadsof Paris headquarters and regional offices.

The following table shows the method of reimbursementin some West African countries:

Remuneration of CFDT for Extension Services

(Percentages) Central Remuneration based African Ivory on cost of Niger Chad Republic Coast

Expatriate personnel 15 15 15 10

National personnel 15 15 - 10

Operational costs - - 7 10

(ii) Ginning and marketing (where CFDT owns and operates the ginneries)

a) Lint

In most countriesCFDT charges CFAF 18,000 per ton of lint ginned, and additionallyreceives some CFAF 3,000 per ton of lint produced,and is reimbursedfor expenses incurred ANNEX 13 Page 3

in purchasingand marketing. However, a new system will be introducedfor Dahomey whereby, as explainedin Annex 16, all purchasing,ginning and marketing costs will be charged to the Associationin Participation,while CFDT will receive a total remunerationof 2% of the CIF value; and 20% of net profits of which 75% will be reinvestedla n.lahomey.

b) Cotton seed

In some countriesCFDT receives a lump sum of some CFAF 2,000 to 3,000 per ton of cotton seed exported. The new proposal for Dahomey is a commissionof CFAF 2,000 per ton produced and 20% participationin the profits made by the Participation on exports.

(iii) Management

In countries where part of the ginneries belong to the Government and part to CFDT, CFDT manages all factories and is remunerated in the way explainedabove. The only case in which CFDT manages a national company is the CentralAfrican Republic. Actual personnel costs are reimbursedby the Government. Moreover, CFDT receives 1% of the sales value of lint and seed, of which CFDT has to pass on 0.5% commissionto the importersin France.

The arrangementsfor studies, usually engineeringstudies for ginneries,vary from case to case.

7. Details on the existing and proposed system of remuneration for Upper Volta are given in Annex 16.

November 12, 1971

ANNEX 14

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Societe D'Aide Technique et de Cooperation (SATEC)

Organization

1. SATEC was establishedin 1956 to provide technicalassistance both in France and overseas, for the developmentof production,in particular,by small scale agriculture,fisheries and industries;it mainly provides support to extensionservice organizationsand agriculturalproduction and marketing cooperatives. In addition SATEC is equipped to conduct social and economic studies. It is a non-profitGovernment corporation with a capital of FF 12 million (US$2.2million), and responsibleto the French Ministriesof Finance, and Overseas Departmentsand Territories. SATEC's Board of Directorscomprise 22 members, representingthe various Ministriesand organizationsconcerned with home and overseas development. Most of the duties of the Board have been delegated to two executive committeesof nine members each, one responsible for activitieswithin France, and the other for activitiesoverseas.

Operations

2. In the field of agricultureSATEC has two projects in France, four in territoriesoutside Africa, and nine in African countries including Dahomey. Projects include rural land reform, improvementof samallholder crops, and a number of agriculturalstudies. In the industrialfield it is working in six overseas countries. Its European staff is about 350, of which about three-fifthsare stationedoverseas. Staff working overseas number over 2,600, of which about one-sixth are expatriates. Total expenditureby SATEC in 1970 was FF 44 million (US$8million), of which about one-third was spent in French territories,and two-thirdsin foreign countries.

November 12, 1971

ANNEX15 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Arrangements Between Government and Compagnie Francaise Pour Le Developpement Des Fibres Textiles (CFDT)

Background

1. CFDT owns four cotton ginneries in Dahomey and is responsible for the m4naRgent of one Government-owned ginnery. Societe Nationale pour le Developpement Rural du Dahomey (SONADER)operates a second Government-owned ginnery in the Mono area. Under an agreement with the Governnent CFDT purchases seed cotton from producers outside the Mono, gins it and exports resultinglint as vell as SONADER's lint production to world markets. Prior to 1969 CFDT also exported all cotton seed, but in 1969 OCAD took over this profitable activity. P esent arrangementsare governed by an agreement signed in January 1967, which expires in 1977. Government and CFDT are negotiàtingïaa:rtnership agreement of "Associationen-Participation", which would apply for five years subject to amendrents as may be agreed from time to time with IDA. Th .tFrticip&tionwould be responsibleto the M.inisterof Rural Development and would be managed by CFDT under a `'Mandat de Gestion."

Arrangementsunder the Existing 1967-1977Agreement

2. Under this CFDT is responsiblefor the developmentof cotton production through organizingextension services in those regionswhere it is engaged as a developmentagency, and for renderingadvisory services to other areas, e.g. where SATEC acts as developmentagency. CFDT is nationally responsiblefor cotton seed production and distributionin collaboration with IRCT.

3. Prior to each cotton season CFDT assists Governmentin preparing a production program. Under the agreement it is mandatory for CFDT to buy all Hirsutum seed cotton produced by farmers, except in the Mono, but to buy Barbadense cotton only in areas indicated annuallyby Government. CFDT assisted in designing and constructing the Government-owned ginnery at Parakou, and is responsible for its management for another 17 years until Government, through CFDT, has repaid the CFAF 100 million loan which CCCE made for this plant.

4. The Ministry of Economic Affairs and Planning sets annual producer prices for seed cotton on the basis of anticipated FOB prices for lint. If the FOB price obtained for cotton lint is lower than was anticipated, CFDT is reimbursed for its losses by FAS (see Annex 4). Conversely, if FOB prices are higher than estimated, CFDT makes an appropriatepayment ANNEX15 Page 2 to FAS. The existing agreement covers both CFDT's extension activities and processing and marketing obligations, but for the project three new agreements have been concluded: an "Association en Participation" and a "Mandat de Gestion" agreement between Government and CFDT; and a service contract between SONACOand CFDT for the management of extension services in the Borgou area and for technical assistance in setting up SONACO's financial organization.

"Mandat de Gestion" Agreement

5. This agreement which, in contrast to the "Association en Participation"agreement, will be officiallypublished, provides CFDT with ail powers required for managing all existing and new Government owned ginneries. In addition, CFDT is responsiblefor trainingAfrican staff pirEferably Dahomean. The agreement is for five years. A condition of its effectiveness is that the agreement concluded in 1967 between the Government,CCCE and CFDT for constructingand managing Government's ginneryat Parakou (see para 3) be a covenant to the new agreement.

1971 "Association en Participation" Agreement between Government ad CFDT

6. The provisionsof the proposed 1971 agreementare suxmmarizedbelow:

I. Objectives

Article 1. The "Associationen Participation"will be responsiblefor:

(a) with the exceptionof the Mono, purchasing all Dahomey produced seed cotton, ginning it mad marketinglint, seed and possible by- products;

(b) purchaaing and marketing lint from the Mono ginnery if Government so desires;

II. Contributions

Article 2. The Goverument and CFDT will each contribute CFAF 5 million to the Participation.

III. Assets and Services

Article 3. Governmentassets - The Governnent will put at the Participation's disposal its ginnery at Parakou and the two proposed new ginneries. ANNEX 15 Page 3

CFDT assets - CFDT will put at the Participation's disposal all its industrial and commercial installations and the services of its central organization;

Article 4. The two parties will mutually agree on construction of supplementary installations and new ginneries. Ownership will depend on the source of finance, but the new assets will be put at the Participation's disposal.

Article 5. CFDT will be.remunerated in accordance with the provisions of Article 17. IV. Management

Article 6. CFDT will manage the Participation under the following conditions:

(b) It will, within the limits of funds available in the current accounts, carry out major repairs, constructions and replacements which are not directly related to daily ginning operations, but are included in mutually agreed annual budget provisions; and

(c) It will require Government's approval for carrying out major repairs, constructions and replacements the costs of which would exceed the balance of the current accounts.

V. Committee

Article 7. A "Comite Paritaire", comprising three representatives of Dahomey and three of CFDTwill be convened at least twice a year by the Minister of Rural Development and Cooperation to discuss:

(a) Forecasts of production;seasonal credit requirements;investment requirements and financial resources; world market prices for lint and seed; and the forecast profit and loss account;

(b) Financiai results and the controller's report; ANNEX15 Page 4

(d) Any other questions submitted by the two parties.

The meetings vill be presided over by a representative of the Government, and the agenda proposed by CFDT will be approved by the Minister of Rural Development. CFDT will act as secretary of the committee.

VI. Audit

Article 8. CFDT vill be responsible for the Participation's accounts which vill have to be approved by a controllerappointed by Governmentwho will report to the Comite Paritaire.

VII. Marketing Seed Cotton

Article 9. CFDT will be obliged to buy all cotton delivered by farmers or Village Groups outside the Mono area at markets scheduled or approved by Government, or delivered to ginneries, provided the producer meets quality standards set by the Minister of Rural Development and delivery is phased according to the planning agreed with CFDT at the beginning of the ginning season. Producer prices will be set annually by Governmenton the basis of a recommendation from Fonds Autonome de Stabilisationet de Soutien des Prix des Produits a l'Exportation(FAS).

Article 10. Lint from Government'sginnery in the Mono 1/ will be bought by CFDT ex-factoryHagoume or FOB Cotonou on the basis of receivedweight at Cotonou. Pro- ducer prices for Mono lint will be set annually by Governmenton the basis of FAS' proposals and will take into account CFDT's classification costs.

VIII. Ginning

Article I1. CFDT vill, in principle, be obliged to gin all cotton, except that from the Mono, in the Partici- pation's ginneries,but vill not be precluded from ginning cotton from the Mono area, or vice versa, in mutual agreementwith Government.

1/ Excluded from the Participation. ANNEX 15 Page 5

IX. MarketingLint and Seed

Article 12. Lint processedor bought by CFDT will first be applied to meet the requirementsof the local textile industry. Prices wîll be based on CIF prices (excluding non-incurred costs) prevailing at the date of signing contracts to be concluded by the industry at the beginning of the gînning season. CFDTwill export the remainder.

Article 13. Conditions similar to those in Article 12 will prevail for cotton seed, but FAS will determine export procedures. The price of seed provided to farmers in the Mono will be billed to SONADERon the basis of CIF prices, excludingnon-incurred costs but ïncluding costs for disinfection and transport.

X. Financial Year

Article 14. The Participation's financial year will be from October 1 through September 30. At the end of each financial year CFDTwill prepare a balance sheet and profit and loss account.

XI. Balance Sheet

Article 15. The balance sheet will comprise:

Assets

- Fixed Assets - Current Assets - Outstanding Claims - Cash - Losses

Liabilities

- Partners' contributions(CFAF 10 million) - Investment and current accounts of parties - Loans - Outstanding Debts - Profits

Article 16. The investmentaccount of each party will show the balance between the residual value of buildings and installations, and medium- and long-term loans for interest paymnents of which the Participation is responsible. On the credit side the current accounts ANNEX 15 Page 6

of parties will comprise amortization and replacement of assets put at the Participation's disposal; interests; fees and profit shares; and miscellaneous income. On the debit side of the current accounts will appear each share in financing investments; actual expenditures for replacements and major repairs; and losses.

XII. Accounts

Article 17. The Participation'sincome will consist of proceeds from sales of lint and seeds. Its expenditure will comprise:

(a) All CFDT's recurrentcosts incurred in purchasing,ginning and marketing,excluding investmentsin gins and storage;

(b) Interest and bank commissionson short-, medium- and long-termloans to meet operating and investment costs;

(c) Interest on the monthly balance of the two parties' investmentaccounts at the rate of 5.5% per annum, and on current accrunts at the going rate for sea,.nal loans;

(d) Amortizationof buildings and installations, based on a life of 20 years for buildings, 10 years for factory equipment,7 years for motors, electricaland other equipment, 5 years for heavy vehicles and light material, and 3 years for light vehicles;

(e) Provision for replacements of fixed assets on the basis of the above mentioned lffe assumptions for the difference between initial and replacement values; and

(f) CFDT remuneration amounting to:

- 2% of CIF value of lint; and - CFAF 2,000/ton cotton seed.

XIII. Sharing Profits and Losses

Article 18. Profits will be shared as follows: 80% to Government and 20% to CFDT. ANNEX15 Page 7

Article 19. Losses vwîl be shared in the same proportion, but losses caused through Government setting too high a "statistical"price (see Article 20) for seed cotton and lînt will be borne by Govern- ment and losses due to CFDT's negligencewill be entireiy for CFDT's account. At any time, CFDT's liabilitywill not exceed the cumulative amount of previous profit shares by more than CFAF 5 million; any remaining unpaid balance will be deducted from future profits accruing to CFDT.

Article 20. The "statistical"price for seed cotton or lint will be the price which would balance the forecast profit and loss account; this price, by definition, would be the maximum price which CFDT would have proposed on sound commercial grounds if it were responsiblefor price setting.

Article 21. CFDT will reinvest that part of its profit share which is required for improving its industrial assets; it could use such assets to liquidate its debts derived from sharing in the Participation's losses.

XIV. Training

Article 22. CFDT vill train Dahomean personnel to replace expatriates. XV. Taxation

Article 23. The Participationwill be exempted from levies and taxes and Governmentwili extend to CFDT personnel the same fiscal facilities which apply to French technical assistance personnel.

XVI. Arbitration

Article 24. Disputes vill be submitted to the International Center for the Settlement of InvestmentDisputes.

XVII. Effective Date and Duration

Article 25. Provided the May 11, 1967, agreementbetween Government, CCCE and CFDT governingmanagement and loan repaymentobligations for the Parakou ginnery is amended the present agreementwill be effective as of October 1, 1971. ANNEX15 Page 8

Article 26. The agreement vill replace that of January 17, 1967, but CFDT and FAS will close their 1970/71 accounts on the basis of the 1970/71 price schedule.

Article 27. This agreementvill be for five years as of the date of its effectiveness.

XVIII. Mandate

Article 28. Under a separate "mandat"which is related to the Participationagreement, CFDT is authorized to act on behalf of the Governmentin all matters .-~ = concerning the activities under the Participation agreement.

Article 29. This article contains the text of the "Mandat" as summarizedin para 5.

November 12, 1971 DAHOMEY

2OU-3012RO COTTONPRC2TECT

PROJECTED BENEFITS A)ND PROFIT-SH8ARING FROM COTTON EXPORTS (CFAF '000)

Crop Year 1971-72 Calendar Year 1972 1973 1974 1975 1976 1977 1978 1979 1980 etc. Accounting YTsr 1st. Oct.------30th Sept. __

GROSS REVENUE Lint satlE 2,574,767 3,000,857 3,480,511 3,752,299 3,756,257 3,756,257 3,756,257 3,756,257 3,756,257 Cotton seed sales 590,010 736,820 897,480 986,720 986-120 986,120 9866,21986,120 986,120

Total gross revenue 3,164,777 3,737,677 4,377,991 4,738,419 4,742,377 4,742,377 4,742,377 4,742,377 4,742,377

COSTS Seed cotton purchases 1,325,910 1,657,372 1,991,233 2,230,458 2,230,500 2,250,500 2,230,500 2,230,500 2,230,500 Primary marketing cost 1521,093 196,961 2,44,273 2b3,587 288,855 294,926 301,17(8 307,608 314,9o9 Ginning cost 200,539 255,820 301,830 331,156 339,528 360,177 374,550 389,613 405,420 tint marketing cost 380,639 486,554 599,636 688,797 702,079 712,107 720,545 730,999 742,861

Seed treatment 3,071 3,910 4,6?3 5,084 5,340 5,600 5,890 6,180 6,490

CF2T c2mission on lint sale.,/ 51.49 60,017 69,610 75,o46 7575,5 75,125 75,125 75,125

s21-total 7 (liet) 2,113,746 2,660,634 3,211,210 3,616,128 5,641,427 3,678,435 3,707,788 3,740,025 3,775,305

Cotton seel marketing cost Commission on cotton seed sales-

Sub-total II (cotton seed) 411,103 522,239 647,528 724,221 737,210 T50,460 763,970 777,760 781,820

Sub-total I and II ?,5"4,849 3,182,923 j,85,733 4,340,349 4,378,637 4,428,895 4,471,758 4,517,785 4,557,125

NET BENKFITS

0102 chars or p-ofl,ri 320*3) 127,9569 110,955 103,850 79,614 7P,748 62,696 54,124 44,918 37,050 Goversem,t share of profits (807C1 511,942 443,804 415,402 318,456 2903992 250,786 216,495 179,634 148,202 1 Tot. profits 639,929 554,754 519,?53 398,070 363,740 '13,482 270,619 224,592 185,252

#/ 2,t orrCII' valus.

j/ 0882 2 ,000 pet t.on. F

Table revised: (a) tIn,t si.e- obtained gitirinning rate 399 (b) Costc ohse½S ir 'îs1n7 unit sost per ton es showr tE

Jrannamy20, 1972

ANNEX16 Page 1

DAHCMEY

ZOU-BORGOUCOTTON PROJECT

Cotton Market Prospects

1. Cotton is produced ln varying quantities in more than 80 countries. Roughly one-third of the world crop is produced for export in raw (fiber) form, and significant quantities are exported by producing countries as textiles. The United States, the U.S.S.R. and Mainland China are the world's largest producers, the three countries together accounting for about half of the world output. The bulk of the remainder is produced by a large number of low-incomecountries.

2. Though its share in vorld trade has been declininghistorically, the U.S. remains the world's largest exporter of raw cotton,with 20-25 percent of the market in recent years. Another 15 percent of world exports is accounted for by centrally planned countries, and most of the remainder, 55-60 percent, by developing countries. (See Table 1.)

3. The role played by cotton as a cash and export crop in the economiesof developlngcountries is illustratedbest by African producers. Though Africa as a whole accounts for only 10 percent of the world cotton output, the plant is cultivatedcommercially by over 25 countries in the continent,many of them with very low per capita income and few production alternatives. Of these, four countriesdepend on cotton for over 20 percent of their total export earnings, four for 10-20 percent, and another five for 5-10 percent. Conversely,sllghtly over half of the cotton producing countries in the world which derive 5 percent or more of their export earnings from cotton are ln "developingAfrica".

4. Although cotton is by far the most important fiber consumed in the world (ln terms of welght) and whlle, despite its decliningshare, it is llkely to remain so in the foreseeablefuture, its demand outlook is not bright compared to its history of growth, producinglow-lncome countries' needs, or their expectations. This is reflected ln the price outlook.

5. World cotton prices are expected to decline by 10-15 percent from recent levels by the mid-seventies. In terms of Mexican Strict Middling 1-1/16" cotton, a representativegrade of so-calledmedium-long cotton which normally accounts for more than 60 percent of world cotton output, the price level is projected to decline from an average of 29.5 U.S. cents per pound, c.i.f. Liverpool, in calendar years 1969 and 1970 to 26 cents, in 1970 dollar terme, 1/ by about 1975.

1/ For purposes of this paper, prices converted to U. S. dollar equivalents were deflated by using the U. S. Wholesale Price Index, 1970 - 100. ANNEX16 Page 2

6. The expected downward trend in prices over the medium-term reflects a number of assumptions: (a) that the current high prices are temporary and simply reflect supply-demand adjustment lags at the end of a (declining) stock cycle; (b) continued competition among some 60 exporting countries, many of them heavily dependent on cotton exports, in what is basically a very slow-growingmarket; (c) absence, in future U.S. support and export price policies, of the elements that made that country a residual supplier in the world market on the one hand and, on the other hand, led to recurringstock accumulationthere; and (d) continuedpres- sure of competingfibers on cotton,which has become a major consideration in U.S. price policy.

7. Cotton prices in the internationalmarket, at least half the time in the postwar period, have not been determined primarilyby market forces. Especially in years when world production exceeded world consumption, i.e., in 11 of the 22 seasons between 1948/49 and 1969/70, the effective U.S. export price, as shaped by the loan rate and adjustments for interest, transportcost, export subsidies (no longer in existence), etc., acted as a floor for the world price of cotton. This resulted from a policy of the United States, the vorld's largest consumer,producer and exporter of cotton, under existing laws, to withhold export sales below a given price and to accumulatestocks at this price - a price which in most years stood above the hypothetical equilibrium, or market-clearing level. 1/ World prices did decline through most of this period (by about one-third,in real terms, between 1953 and 1967) but in stages paralleling successive,but delayed, adjustmentsin the U.S. export price. These, in turn, were instrumentalin inducing stock cycles of 6 to 8 years' duration.

8. The world cotton situation today is quite different in several respects from what it was throughoutmost of the past and especially four or five years ago. Perhaps the most striking difference is in the stock position. At the beginningof the 1966 season (August),world cotton stocks were at a peak of 30.8 million bales (one bale contains 478 lbs of cotton), equivalent to 7.2 months of world consumption,and a highly disproportionateamount of these, 56.4 percent of the total, vas held by the U.S. alone. Cotton is no longer in surplus: in August 1970 (the end of the 1969/70 season) world stocks stood at 21.6 million bales, equivalent to 4.8 months of vorld consumption- a level considered as "minimum, or too low", particularlyby consuming countries. The distribution of stocks also changed considerably: the United States held in August 1970 27 percent of world stocks (comparedto 55 percent in August 1966), centrally planned countries 14 percent (11.4 percent in 1966) and the rest of the world

1/ For a detailed discussionof the mechanics of the links between world cotton prices and U.S. domestic and export price policies, see background paper on "Cotton: Past Trends and Outlook",May 12, 1969, pp. 16-17, and also "Recent DevelopmentsAffecting Cotton", Commodity Note No. 55, November 17, pp. 4-5. ANNEX 16 Page 3

59 percent (33.6 percent in 1966). Reflecting these changes in the demand- supply balance, the Liverpool price of Mexican Strict Middling 1-1/6" cotton - a representativegrade of so-called medium-long cotton - which was 28.1 cents per pound in August 1966 rose to 31.0 cents per pound in August 1970 and averaged around 33.8 cents during the first six months of 1971.

9. The rapid liquidationof surplus stocks (those above normal manufacturing and trade inventories) and the improvement in prices, however, were brought about not by improved demand conditions but rather by sharp reductions in production,particularly in 1966/67 and 1967/68. Mbreover, the strengtheningtrend in cotton prices coincidedwith steep autonomousreductions in synthetic fiber prices. As a result of these and other factors, 8uch a boom in polyester/cotton blends, world cotton consumption has been rising by only 0.7 percent per annum since 1966/67, compared to an annual growth rate of about 2 percent registered in the preceding 10 years; its share of world textile fiber consumption, in cotton equivalents,1/ shrank from 53.8 percent in calendar 1967 to 47.1 percent in calendar 1969, accelerating the long-established and uninter- rupted trend of market loss to man-made fibers.

10. While there is evidence that the recent sluggishnessin world demand for cotton has been due, in part, to transitory or uncommon factors (such as textile recessions,now over, in several developed countries, depressed economic conditions in the U.S., the dissipationof some of the gains in demand associatedwith the war in Vietnam, and the timing of opposite changes in cotton and synthetic fiber prices), there are, too, strong indications that the recurring tendency of production to outpace consumption in the absence of downward adjustments in prices will persist. The shortfalls in world production experiencedin the last few years were brought about largely if not entirely by sharp, intentional cutbacks in U.S. acreage and assisted by low yields in several major producing countries, including the U.S., particularlyin 1967/68 and 1969/70. 2/ The cotton provisions embodied in the new U.S. farm legislation covering 1971/72 to 1973/74 are expected to raise U.S. output to more normal levels while at the same time improving the competitivenessof U.S. cotton in order both to combat substitutionby synthetics and to prevent excessive accumulationof stocks. To this end, for example, the loan rate is to be set each year at 90 percent of the averageworld price in the preceding two seasons. Consequently,world prices in the years ahead will increasingly reflect market forces, and the supply situationwill tend to be considerably more comfortablewhich, from the point of view of the substitutionproblem, can be considered a healthy development. 1/ As a given volume of man-made fibers tends to displace a larger volume of cotton, due to the lighter weight and lower waste factors of the former, it is necessary to convert fiber consumptionfigures into "cotton equivalents"in order to get a true picture of the loss suffered by cotton. 2/ For a more detailed discussion of events in this period and their implications,see, "Cotton: Current Situation, Major Issues and Recent International Discussions", Economics Department Working Paper No. 48, September 5, 1969. ANNEX 16 Page 4

11. The price projectionscited earlier incorporatethe above assessment of the current situation and are based, more specifically,on the following assumptionsand empirical considerations.

12. World demand for textile fibers (comprisingcotton, wool and man-made fibers) is projected to grow at a rate of 3.5 percent per annum over the next 5-6 years, or at about the same rate as in the last 15 years, implying a growth in per capita consumptionof about 1.8 percent annually. This is predicated on the assumption,based on empirical evidence, that a growth of 10 percent in the index of world manufacturing output will be associated,on the average, with a growth of nearly 7 percent in demand for textile fibers. Demand for cotton cannot be projected as precisely or with the same degree of confidence as aggregate demand for textile fibers for several reasons including, inter alia, the inadequacy of data on consumptionand substitutionby end uses. Nevertheless,it is assumed that cotton consumptionwill expand at a much slower rate, by 1-1.6 percent per annum. Projectionsmade using a variety of approaches (obtainingcotton consumptionas a residual after estimating the growth potential of the other components of the textile-fiber group, using income elasticities of demand, extrapolating different trends, attempts at estimating elasticities of substitution, aggregating independently-made national forecasts, etc.), all converge within this range. Demand for cotton could possibly grow at best at a rate approximating that in world population growth but then only if prices fell substantially and/or research and promotional efforts proved to be highly successful. In any case, there will be little room for export growth in this demand climate, but exporting countries are likely to share differently in the moderate groath that may take place, as their output expansion prospects and possibilities are not uniform.

13. While several cotton-producing countries have shown considerable restraint in expanding their cotton output in recent years, available informationon governmentplans or intention indicates neverthelessthat in the absence of a fall in prices, world supply could exceed demand by as much as 6-8 percent by the mid-seventies.1/ In a relatively freer, competitivemarket such as that predicated for the future, however, and in an annual crop such as cotton, it is unlikely that producing countries will produce "for stock"; it is more likely that demand, production and prices will move rather rapidly toward long-term equilibrium levels.

14. The price elasticity of demand for cotton is in the order of only -0.2 to -0.4 (lower for downward changes in price than for upward changes); this by itself would imply the necessity of a sharp decline in

1/ For more on this point, see Working Paper No. 48, pp. 13-16. ANNEX 16 Page 5 prices to clear the market. There is growing evidence, however, that the supply elasticity in many countries is greater and getting bigger, approaching one which indicates that supply growth will be restrained significantlyby weaker prices in the future. In addition, it is possible that, in spite of the absence of a commitment on its part to support the world price, the U.S. may administer its cotton policy during the projection period (which runs beyond the life of the new legislation)in such a way as to avoid a too-precipitousfall in prices.

15. According to staff computationsand judgments, at projected equilibrium levels of demand, supply and price for the mid-seventies, world raw cotton exports would experience a growth rate of roughly one percent per annum between 1965-67 and 1975, although exports from developing countriesmay grow at a rate twice as high. This allows for U.S. exports at a level 5-6 percent below that of the base period, but over 30 percent higher than the low of 1968/69. Furthermore,while the beneficiariesof the sharp fall in U.S. exports in 1968/69were 2-3 large producing countries alone, it is assumed that export growth over the long- term will be shared more evenly by other countries.

16. The exporta growth experience of individual developing countries will neverthelesscontinue to vary depending on, inter alia, availability of land, trends in yields, quality and marketabilityof cotton grown, domestic consumption, and their cotton textile trade balances. Small African countries with few production alternatives are likely to push and succeed in expanding their small shares. These and other minor structural changes in the market structure, however, cannot be judged with uniform criteria. Countries differ not only with respect to the factors enumerated above but also in terms of alternative crops and the market forces affecting them. It is thus difficult to find or expect uniform expansion strategies in cotton producing countries.

17. It has been assumed in arriving a the above picture of cotton's outlook that there will be no international cotton agreement and no major breakthroughs in cotton agronomy of man-made fiber technology, but that cotton will benefit to some extent from currently planned, vastly expanded programs in research and promotion by the International Institute for Cotton and by cotton interests in the U.S. 1/ While the expenditures planned do not match the current expenditures of man-made fiber interests for the same purpose, the programs represent a significantdeparture from the generally passive attitude of cotton producing countries and are likely to have some positive impact on demand.

1/ For arguments supporting some of these assumptionssee Working Paper No. 48.

November 12, 1971

Table 1: RECENTTRENDS IN THE WORLD COTTONECONOMY

(million bales)

Average Year Beginning 1958/59- August 1 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/701/

Consumption United States 8.7 8.6 9.2 9.5 9.5 9.0 8.2 8.0 Western Europe 7.5 7.4 7.2 7.3 7.1 6.7 6.7 6.8 Japan 3.0 3.2 3.4 3.2 3.3 3.4 3.5 3.4 Other (excl. c.p.e.) 12.1 13.8 14.5 14.6 15.1 15.9 16.3 17.2 Cen. Planned Econs. 15.1 14.7 15.8 16.3 17.3 17.9 18.1 18.2 World 46.4 47.7 50.1 50.9 52.3 52.7 52.8 53.5

Production United States 14.0 15.3 15.2 14.9 9.9 7.2 11.0 10.0 Other (excl. c.p.e.) 19.0 22.2 23.0 23.7 22.8 24.0 26.3 25.9 Cen. Planned Econs. 13.5 12.9 13.9 14.8 16.2 16.6 16.4 16.0 World 46.5 50.4 52.1 53.4 48.9 47.8 53-? 51.9

Area (million acres) United States 14.7 14.2 14.1 13.6 9.6 8.0 10.2 11.1 Other (excl. c.p.e.) 46.° 49.8 50.7 50.1 49.0 50.2 52.0 51.3 Cen. Planned Econs. 18.2 16.7 17.3 17.8 18.3 18.8 18.6 18.8 World 79.8 80.7 82.1 81.5 76.9 76.6 79-5 81.2

Yield!/(lbs/acre) United States 453.6 517 517 527 480 447 516 435 Other (excl. c.p.e.) 193.6 214 217 223 221 228 233 241 Cen. Planned Econs. 351.7 369 384 399 421 423 421 406 World 279.8 299 303 313 302 300 322 306

Exports United States 5.0 5.7 4.1 2.9 4.7 4.2 2.7 2.8 o Other (excl. c.p.e.) 9.0 10.4 18.6 11.6 10.7 10.3 11.6 12.34 Cen. Planned Econs. 1.8 1.8 2.1 2.4 2.5 2.6 2.6 2.3 _ World 15.8 17.9 16.8 16.9 17.9 17.1 16.9 17.5 o Table 1: (Continued)

Average Year Beginning 1958/59- August 1 1962/63 1963/64 1964/65 1965/66 1966/67 1967/68 1968/69 1969/70/ Imports Japan 3.1 3.2 3.4 3.1 3.6 35 3.1 3.5 WesternEurope 7.0 7.2 6.5 6.8 6.8 6.5 6.5 6.1 Other (excl.c.p.e.) 2.8 3.3 3.3 3.4 3.8 3.9 3.6 4.1 Cen. PlannedEcons. 3.3 4.0 4.3 4.2 4.0 3.9 4.0 4.4 World 16.2 17.7 17.5 17.5 18.2 17.8 17.2 18.1 Stocks2/ UnitedStates 8.o 11.2 12.4 14.3 16.9 12.5 6.4 6.54 OtherNet Exporters 3.7 3.8 3.8 4.2 4.5 4.7 5.3 6.92' Net Importers(exci. c.p.e.)h/ 5.9 5.8 6.8 6.2 5.8 6.3 6.9 6. Cen. PlannedEcons. 3.1 2.5 3.0 3.3 3.5 3.7 3.6 3.22' World 20.7 23.3 26.0 28.0 30.7 27.2 22.2 23.01/ Centrally PlannedEconomies Exportsto 1.7 2.5 2.5 2.5 2.2 1.9 2.1 2.7 Iaportsfrom 0.3 0.2 0.3 o.6 0.8 1.0 0.8 0.7 Net exportsto 1.4 2.3 2.2 1.9 1.4 0.9 1.3 2.0

1/ The yield figures may be slightlydifferent from those obtained by dividing the production figures by the area figures shown above, due to rounding.

2/ August 1 of first year shown.

3/ Stocks on August 1, 1970 are estimated as follows (in million bales): United States 5.8; other net exportera.6.8; net importers 6.1; centraUy planned economies 2.9; and world total 21.6. I ) Including India and afloat. 0

Note: World Totals may not add exactly due to rounding.

Source: InternationalCotton AdvisoryCommittee, Cotton-WorldStatistice, various issues. _

January 21, 1972 Table 2: RECIT TRENDS IN WORLDCGOTTON PRICES: C.I.F. QUOTATIONSAT LIVERPOOL

(U.S. cents per pound)

Origin Specification 1965/66 1966/67 1967/68 1968/69 1969/70

United States Orleans/Texas M1" 26e1 25.1 27.5 26.6 26.3 Unitad States Menrhis SM 1 - 1/16"1 29.3 28.7 33.8 30./ 29.2 Unitcd States California SM 1 - 3/32" 33.h n.a. 39.Lil 33.9 31.3 Mexdco SM 1 - 1/16" 28.3 29.31/ 31.9 28.9 29.3 Brazil Sao Palo Type 5, 1-1/32" 25.01/ 24.8 27.82/ 2L.6l/ 2h.7!/ Pakistan?_ 289 F. Punjab S.G. 28.0 26.0 26.3 26fL1/ 27.8 Pakiftan!/ N.T. Sind R.G. 25.9 2b.0 25.6 25.6.1/ 27.8 Syria Sm l - 1/16" n.a. 28.2 32.2 30.6 28.h Iran Sm 1 - 1/16" 28.1-/ 29.0 32.0Q/ 30.11/ 28.2 Nicaragua SM1 - 1/16" 27.1 27.6 30.1 27.I-./ 27.3

Greece SM 1 - 1/16" 29.111 28.91/ 31.1s 31.1. 28.1 Ugand-2/ D.P. 52 31.9 -32.0 36.7 35.0 31.2 U.S.S 2 . S14 l - 1/16" . 29.0 30.0 33.2î, 30.-l 30.7 Indi.a- Bengal Desi Choice 25.9 21.8 24.1- 26.6 27.h ?eru Tanguis Type 5 34.0 39.0 37.9 32.6 32.9 Peru Prima No. 1, 1 - 9/16" h1.2.1/ 13.9 k7.71/ h8.i L.V1/ Suidan?/ G 5 L 38.9 33.9 35.2 37.7 38.7 Suda;s/ G 5 S 13.8 38.2 ha-I 1h.3 h..0 U.A.R. Dendera F.G. 39.6 40.1. 4h.7 49.3 L9.3 U.A.R. Menoufi F.G. 49.8 51.3 55.8 62.5 63.2

1/ Averages for less than twelve months. 2/ From 1967/68 on, shipnient via Cape. . Sourcs. International Cotton Advisory Coroitteq, Cott.on - .krld Statistics, various issues.

ANNEX17 Page 1

DAHOMEY

ZOU-BORGOUCOTTON PROJECT

Economic Rate of Return Calculation

1. The economic rate of return from investment in the project is given in Table 1. The only project benefits taken into account are the value of incremental cotton production.

Benefi t8

2. Incremental Producer Net Benefits from Cotton - The estimated incremental project output of seed cotton is shown in Table 2. It is based on yield assumptions as given in Annex 7, Table 2.

3. The assumed producer prices in CFAF/kg for seed cotton are:

Average lst Quality (98%) Lower Qualities (2%)

North Borgou 32.38 32.50 26.50 South Borgou 33.38 33.50 27.50 Zou 34.61 34.75 27.50 Oueme 35.64 35.80 28.00

4. Surpluson Ginning, Marketïng and Export of Inremental Output-

(a) Ginnery Costs: Ginning and Export Costs are shown in Table 3.

(b) Export Prices: Export prices for lint are based on projections by the Bank's Economics Department. The projections are in constant 1971 prices and take account of an expected increase in staple length that will take place under the project. The projected CIF price Europe is 30 USA/lb in 1971/72, 28.0 USé in 1972/73, 27 USi in 1973/74, and 26 USJ thereafter (see Table 4). For cotton seed a constant price of US$108 per ton CIF Japan has been assumed. Costs

5. Costs are from the cost estimates shown in Annex 5 which themselves are based on CFDT's breakdown of costs for the 1970/71 season. Costs include physical contingenciesas described in para 5.01 of the main report but exclude price contingencies and identifiabletaxes.

6. Cost of Agricultural Extension - The extension cost is shown în Annex 5, Table 6. All extension costs incurred on cotton in the project ANNEX17 Page 2

area are charged in full in the rate of return calculation. Direct taxes on expenditures (21% -construction,16Z - furniture and office equipment, 5% - vehicle purchases, rent and utilities, 15% - vehicle running costs) have been deducted.

7. Cost of Farm Inputs - The full unsubsidizedcost of farm inputs and implements is shown in Annex 5, Table 5. Only the part attributable to the incrementalproduction is charged in the rate of return calculation.

8. Cost of Constructionof New Ginneries - The full cost of the two ginneries at Glazoue and Banikoara has been charged. Details are given in Annex 5, Table 7. The costs of extending ginneries in Savalou and Kandi which are not financed under the project but will be undertaken by CFDT have been estimated at CFAF 70 million and CFAF 200 million respectivelyand included as a project cost.

9. Cost of Feeder Road Improvement - Details are given in Annex 5, Table 8, and Annex 8.

10. Research Expenditures - These expendituresinclude all salaries and operating costs incurred through the activities of IRCT, IRAT and IRHO under the project (see Annex 5, Table 9).

11. Labor Costs - No economic cost is attributed to farm labor in view of the high level of underemployment in Dahomey and the absence of other employment opportunities; and the fact that the labor requirements would be met by family labor, and no hired labor will be required.

Project Life

12. The life of the project is assumed to be 10 years which is about half the estimated value of the principal capital investment,the new ginneries.

Economic Rate of Return

13. The economic rate of return for a 10-year project life is 34%; With 10% lover benefits arising from a decline in yields and/or prices the rate of return vould be 19%.

l sinmary table of the economic rate of return using alternative costs and benefits is shown below: ANNEX1 7 Page 3

With Estimated Economic Rate of Return Costs at Revenues at

34.6 100% 100% 19.2 100% 90% 5.9 110% 90%

November 12, 1971

DUO0MEY

ZOU-B0RGOU COTTON PROJECT

SGONOMIC RATE OF RSTUR

Proj3ct Y.ar 1 2 3 4 5 6 7 8 9 10-20 Clandar Year 1?71 1972 1973 197. 1975 1976 1977 1978 1979 1980-1990

Benafits

Fa,rs- Incre..nta1 Net Benefits-/ 298.8 523.3 821.5 î.o25.1 1,o25.1 1,025.1 1,o25.1 1,025.1 1,025.1 1,o25.1

Surplus on 2n/ 1566 187.4 225.2 195.4 179.6 156.5 137.0 114.6 93.2

Total Be,ufita 298.8 679.9 1,008.9 1,250.3 1,220.5 1,204.7 1,181.6 1,162.1 1,139.7 1,123.3

Project Coots

Excluding Incresntal Yarm Inputs 354.7 932.0 702.6 517.2 - - - - - Ises: Taxes on Project Exponditures 3.1 46.8 31.0 20.3 Price Cortingencies .4 48.3 60.4 73.0 _ _

Suob-Ttl 3 3.5 95.1 91.4 93.3 -

Total Projeot Cost2 351.2 836.9 611.2 423.9

Additional Costs

Àgricultural Extension - - - - 355.7 360.7 366.6 379.6 357.1 374.8 Fam Inputs thnsubsidized 123.0 207.9 345.9 386.2 395.8 391.0 419.7 438.0 434.4 435.9 Ginnery (CFDT) 70.0 220.0 ------Feeder Roada alintenance - 4.2 8.4 12.5 16.9 16.9 16.9 16.9 16.9 16.9

193.0 1432.1 324.3 398.7 768.1 768.6 803.2 834.5 808.4 827.6

Leasa Direct Taxes 1.9 14.1 0.2 0.3 7.4 5.7 3.9 3.0 3.0 3.0 Price Contingencies - 10.8 1,6 2.3 53.3 49.7 40.1 35.9 37.5 42.9

Sub-rotal 4.9 24.9 1.8 2.6 60.7 55.4 44.0 38.9 40.5 45.9

Total Additional costse!/ 18,i1 407.2 322.5 396.1 707.7 713.2 759.2 795.6 767.9 781.7

Total Economin Costa 539.3 1,244.1 933.7 820.0 707.7 713.2 759.2 795.6 767.9 781.7

Total Net Beoufits (21o.5) (561,.2) 75.2 430.3 512.8 491.5 422.4 366.5 369.8 3141.6

Total Benerite (10% Loser) 268.9 611.9 908.0 1,125.3 1,098.4 1,084.2 1,063.4 1,045.9 1,025.7 1,011.0

Total Net Beoetite (10% Loser) (270.4) (632.2) (25.7) 305.3 390.7 371.0 304.2 250.3 257.8 229.3

Total Econic Costs (10% higher) 593.2 1,368.5 1,027.1 902.o 778.5 784.5 835.1 875.2 344.7 859.9

Total Net Bexufits (Benefita 10% Loer- costs 324.3) (756.6) (119.1) 223.3 319.9 299.7 228.3 170.7 181.0 151.1 10% higher)

1/ At farm gate and constant producer prices. 2emomio Rates of Rotuer Benefits 100% S°Sn 90S V Including marketing sud exporting of incr3_ntal output (see Annex 17, Table 2). Conts 100% 100% 110%

3/ Excluding Inremmntal farm inputs, direct taxes, and price contingencies. 10 years 34.67 19.20 5.96 ear3 20 2 37.40 23.86 13.00 1/ Excluding direct taxes and price contingencies.

January 18, 1972 DAHOMEY

ZOU-BORGOUCOTTON PROJECT

SURPLUS ON GINNINO, M&RKETING AND EXPORTINGOF INCREMENTAL OUTPOT

(CFAF Million)

Project Year O t 2 3 4 5 6 7 8 9 10

Cotton Soim in Years 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 onwards

Total Seed Cotton Output from Project Farmers to be ginned in following years (tons) 25,130 34,030 40,730 49,610 55,690 55,690 55,690 55,690 55,690 55,690 55,690

IncrementalOutput (tons) - 8,900 15,600 24,400 30,560 30,560 30,560 30,560 30,560 30,560 30,560

IncrementalOutput as Per- centage of Total Project Output - 26.15% 38.30% 09.34% 54.88% 54.88% 54.88% 54.88% 54.88% 54.88% 54.88%

Total Surplus in the Ginning, Marketing and Export of Lint and Cotton Seed - 558.0 463.h 439.3 388.0 308.5 265.8 229.5 190.5 157.1 155.2

Taxes Levied by Governsent on Oinning, Marketing and Export Operations - 40.8 25.9 17.2 18.0 18.7 19.3 20.2 18.4 21.8 23.0

Surplus on Ginning, Marketing and Export, including Taxes - 598.8 489.3 456.5 356.o 327.2 285.1 249.7 208.9 178.9 178.2

ProJect Share of Surplus 156.6 187.4 225.2 195.4 179.6 156.5 137.0 114.6 98.2 97.8

January 18, 1972 DAHOME!

ZOU-BORGOUCOTTON PROJECT

GINNIN ANDEIPORTINI COSTS (CFAFIOOO).COTTON PRODUCTION (TONS) AND GINNING OU1TURN(%) coat par coat per Cotton Production 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/ô1 ton 71/72 ton 80/81 and Ginning Season - - - -- A-F CFAF

Seed Cotton Production (tons)

North Borgou 9,883 12,123 15,075 17,1443 South Borgou 6,444 8,551 10,582 12,078 Constant Production Zou 17,700 20,060 23,956 26,100 Ouere 5,000 8.000 9.000 10.000

Total 39,027 148,7314 58,613 65,621 65,691 65,691 65,691 65,691 65,691 65,691

Percent Lint to Cotton 39 39 39 39 39 39 39 39 39 39

Lint Production (tons) 15.220 19.006 22.859 25.592 25,619 25,619 25.619 25,619 25,619 25,619

Purchase Costs

North Borgou 320,012 392,5143 488,129 564,804 South Borgou 215,101 285,432 353,227 403,164 Zou 612,597 694,277 829,117 906,090 Ouers 178,200 285,120 320,760 356,400

Sub-total 1,325,910 1,657,372 1,991,233 2,230,458 2,230,500 2,230,500 2,230,500 2,230,500 2,230,500 2,230,500 87,120 87,067

PrimaryMarketing Cost 152,093 196,961 244,273 283,587 288,855 294,926 301,178 307,608 314,909 - 318,058 9,990 12,414

Ginning Cost 200,538 255,820 301,830 333,156 339,528 360,177 374,550 389,613 405,420 409,474 13,180 15,983

Lint Marketing Cost 380,639 486,554 599,636 688,797 702,079 712,107 720,545 730,999 742,861 750,289 25,010 29,286

Seed Treatiient 3,071 3,910 4,628 5,084 5,340 5,600 5,890 6,180 6,490 6,554 0,200 0,255

CFDT Commission on Lint Sales 51,495 60.017 69.610 75,046 75.125 75.125 75.125 75.125 75.125 75.125 3.380 2.932

Total Cost Landed Europe 2,113,746 2,660,634 3,211,210 3,616,128 3,641,427 3,678,435 3,707,788 3,740,025 3,775,305 3,790,000

Cost per ton Landed Europe CFAF 138,880 139,989 140,079 141,299 142,138 143,582 144,728 145,986 147,363 147,937 138,880 147,937

January 20, 1972 DAHOMEY

ZOU-BORGOUCOTTON PROJECT

ECQNOMIC RATEOF RETUTRN.l.TCnCTuJLATION

Actual and Projected Sales Prices of Cotton Lint and Seed

CFAF/kg FOB Cotton CIF Liverpool Cotton Seed Dahomey Cotton 1" 1/32 Dahomey 1" 1/32 and US Middling 1" CIF Japan Before After Year devaluation1/ devaluation2/ CFAF/kg cts/lb US$/long ton CFAF Metric ton 1960 149.0 167.6 28.2 76.85 1961 155.0 174.4 26.5 86.90 1962 152.5 171.6 28.2 77.86 1963 149.0 167.6 29.0 74.20 1964 145.5 163.7 27.9 71.01 1965 145.0 163.1 26.8 84.87 1966 137.0 154.1 27.1 95.12 1967 138.5 155.8 26.1 94.10 1968 157.0 176.6 25.1 84-55 19692/ 1140.5 158.0 25.5 77.73 1970 - 150.0 - 27.4 98.o72/

1971 - 169.0 - 29.7 (February) 109.00 (March 15)

Projection after re-evaluation4/ US$ Metric ton

1972 158.2455/ 169.17 30 108 27,700 1973 146.747 157.89 28 108 27,700 1974 140.894 152.26 27 108 27,700 1975 135.026 146.62 26 108 27,700 1976 134.795 146.62 26 108 27,700 1977 134.558 146.62 26 108 27,700 1978 134-317 146.62 26 108 27,700 1979 134.071 146.62 26 108 27,700 1980 133.820 146.61 26 108 27,700

1/ 1960 through 1965: January prices Cameroon 1" 1/32. Dahomey figures would not be representative because of small size of exports (less than 1,000 tons); 1966 through 1971: Dahomey January prices.

2/ 1245% of devaluation of CFA Franc - from August 1969 till December 1971, 2/ 1970 and 1971: Average prices obtained by CFDT in other African countries. In Dahomey OCAD took over the marketing of cotton seed in 1969 and obtained lower average prices: US$ 85 in 1969/1970 and US$ 97.52 in 1970/1971.

4/ 8.6% re-evaluation of CFA Franc as of December 1971. 5/ Costs FOB to CIF: CFAF 10,925 per ton with 2% escalation per annum.

Source: CFDT

January 20, 1971 DAHiOMEY

ZOU-BORGOUCOTTON PROJECT

FOREIGN EXCHANGEBENEFITS

CFAF million

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981-90

Foreign Exchange Benefits - 738 1,224 1,867 2,264 2,264 2,264 2,264 2,264 2,264 2,264

Foreign Exchange Costs 326 1,000 941 1,049 1,050 1,045 1,070 1,093 1,069 1,099 1,108

Net Foreign Exchange Benefits (326) (262) 283 818 1,214 1,229 1,194 1,171 1,195 1,165 1,156

Discountedat 9% 7,215 - US$ 28.21 million

Net LocalCost 213 474 394 444 460 453 446 443 449 458 465

Discountedat 9% 4,258

ImputedForeign Exchange Rate:

Discounted at 9% CFAF 151 per US$

Official rate of exchange CFAF 255.79 per US$ Possible shadow rate of exchange CFAF 360 per US$

January 20, 1971

DAHOMEY

ZOU-BORGOU COTTON PROJECT

G0VERNtiENT EXPENDITURE AND NEVENUES

(CFAF million)

Project Year l 2 3 4 5 6 7 8 9 10

Calender Year 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

Applications

Agricultural Extension 312.1 465.3 384.3 346.8 291.0 281.0 272.0 268.3 240.2 240.2

Incremental Agricultural Credit - 540.6 129.4 66.5 ------

Fertilizer Subsidy - - 52.5 99.1 41.9 51.1 16.3 26.1 36.2 46.6

Processing Plants - 267.7 137.5 ------

Research 42.o 43.5 43.5 43.5 - - -

Feeder Road Improvement - 83.5 47.7 47.6 12.5 12.5 12.5 12.5 12.5 12.5

Study - - 15.0 ------

Contingencies o.6 71.9 74.6 79.2 64.8 79.7 94.6 111.3 116.8 134.5

Debt Service on IDA Credit.:/ - 3.6 8.9 10.8 11.7 11.7 11.7 11.7 11.7 11.7

Total Expenditure 354.7 1,476.1 893.4 693.5 421.9 436.o 407.1 429.9 417.4 445.5

Soiurces

A. IDA Credit - 983.2 393.3 171.2 - - - -

FAC Grant 258.9 201.7 167.7 137.1 ------

Net Profits from Rice Sales/ - - B.6 14.1 18.1 13.5 11.2 8.8 8.8 8.8

Total Revenues 288.9 1,184.9 574.6 322.4 18.1 13.5 11.2 8.8 8.8 8.8

Net (Deficit) (65.8) (291.2) (318.8) (371.1) (403.8) (422.5) (395.9) (421.1) (408.6) (436.7)

B. Government Share of the Venture. s Profits2/ - 511.9 443.8 415.4 318.5 291.0 250.8 216.5 179.6 148.2

Export Levies on Cotton Lint and Seed - 53.0 66.1 79.8 88.9 89.0 89.0 89.0 89.0 89.0

Less Government Share of Financing as of Above 65.8 291.2 318.8 371.1 403.8 422.5 395.9 421.1 4o8.6 436.7

Net Suirplus (Deficit) 0.0 273.7 191.1 124.1 o3.6 (42.5) (56.1) (115.6) (140.0) (199.5)

Cumulative Surplus - 273.7 464.8 588.9 592.5 550.0 493.9 378.3 238.3 38.8

C. Taxes on Project Expenditures Net of Cost of Any Services 3.1 46.8 31.0 20.3 21.2 22.0 22.9 23.8 24.7 25.7

13 C

In 1982 Debt Service wold amount to about CFAP 27 mi:llion aridin 1992 to some CFAF 55 million. Rice revenues accrue priearily to SONACO which would use it tu finance par- of the agricultural extension. /See Punex 15, Table 1.

January 17, 1972 DAMHOMEY

ZOU-BORGOUPROJECT Fisc Pwiuûs Fi-us Pro ject

(CFAF 0ooo)

1971 1972 1973 1974 1975 1)76 1977 1979 1978 1980

I. raxes on Project Expenditures-/

A) Taxes on agriculturai extension:

Construction houses, offices 950 16,220 2,990 - - - - Furniture, equipment 410 1,850 - - 480 480 480 480 480 480 Vehicles purchase 910 910 1,000 44° 760 760 760 760 760 760 Rents, utilities 860 1,010 1,130 1,1140 970 970 970 970 970 970

Sub-Total 3,130 19,990 5,120 1,580 2,210 2,210 2,210 2,210 2,210 2,210

B) raxes on ginneries construction -

C) Taxes on feeder road improvement - 3,000 3,300 3,500 1,300 1,300 1,300 1,300 1,300 1,300

D) Taxes on ginning:

Power - 3,535 4,621 5,852 6,905 7,251 7,613 7,995 8,391 8,811 Maintenance machines - 4,778 6,244 7,907 9,327 9,793 10,283 10,796 11,334 11,902 Maintenance buildings - 1,050 1,050 1, 470 1,470 1,470 1,70 1J7 1,1470 1,470

Sub-Total - 9,363 11,915 15,229 17,702 18,514 19,366 20,261 21,195 22,183

Total A + B + C + D 3,130 46,833 31,035 20,309 21,212 22,024 22,876 23,771 21,705 25,693 2/ IL Export Duties-

Lint 38,050 47,515 57,148 63,980 64,o47 64,o47 64,047 64,047 64,047 Seed 14,910 13,620 ZL 0 24,920 2L4920 2 0 24,920 24,920 24,920

Total - 52.960 66,135 79,828 88,900 88,967 88,967 88,967 88,967 88,)67 Fatal I II 3,130 $99,793 97,170 100,137 110,112 110,991 111,843 112,73e 113,672 114,660

1/ Net of cost of any services. O

2/ Export levies: FCFA 2500 per ton of lint exported and FCFA 700 per ton of seeds exported.

January 13, 1972 DAHOMEY ZOU-BORGOUCOTTON PROJECT ORGANIZATIONOF PROJECT

G 0 V E R N M E N T -1 ~~~~~~~~~~~~~~~~~MINISTRY 0F MINISTEROF RURALDEVELOPMENT PUBLICWORKS 5 ~~~~~ANDCOOPERATION (PROJECT ACCOUNTS) PRICESTABILIZATION I_ CONSULTANTS FUND (FAS) CFDT l i DIVERSIFICATION COTTON FUND FEASIBILITY O______PARI_____-BOARD OF DIRECTORSSONACO STUDY COIMITE.PARITAIRE

VENTURE: MANDATDEGESTIONAND _ RESEARCH SONACO(EXTENSION SERVICE) ASSOCIATION r IRCT/ COTTON PROJECTMANAGEMENT PWD EN PARTICIPATION IRAT/ FOOD CROPS GENERALMANAGER _ ROAD IMPROVEMENT ______IRHO/ IRAT- GROUNDNUTS DEPUTYGENERAL MANAGER PROGRAM P COTTON SEED FINANCIAL MANAGER (CFDT) PURCH-ASING, GINNING I MULTIPLICATION AND MARKETING COTTON L AND SUPPLY PRODUCTIONOF: IRCT CFDT - PROJECTAREA: ITF OU ZOU SATEC T BORGOU - OUEME - ATAKORA _____ lAGRICULTURAL

MARKETING PRODUCTION REVOLVING OF MONO FUND

8 SECTORS SETR

VILLAGE GROUPS

PROJECTPARTICIPANTS | IBRD-5742(R)

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