Report No. 462a-CM FILECOPY Appraisalof CocoaProject Public Disclosure Authorized Cameroon

August 1, 1974

Western Africa RegionalOffice Not for Public Use Public Disclosure Authorized Public Disclosure Authorized

Documentof the InternationalBank for Reconstructionand Development InternationalDevelopment Association

This report was preparedfor officiai use only by the Bank Group.It nmaynot be published, quoted or cited without BfankGroup authorization.The Bank Croup does not accept responsibility Public Disclosure Authorized for the accuracyor completenessof the repoit. CAMEROON

COCOA PROJECT

CURRENCYEQUIVALENTS

US$ 1 CFAF 250 CFAF 1 US$ 0.0040 CFAF 1,000,000 US$ 4,000

WEIGHTSAND )OEASURES (MetricSystem

1 hectare (ha) = 2.47 acres 1 kilometer = 0.624 miles 1 kilogram = 2.204 pounds 1 metric ton = 2.204.6pounds 1 liter - 1.057 U.S. quarts

ABBREVIATIONS

OCCE : Caisse Centrale de CoopérationEconomique (France) CENADEC : Centre National de Développementdes Entreprises Coopératives CINAM : Compagnied'Etudes Industrielles et d'Aménagementdu Territoire DPR t Departmentof Public Roadu FAC : Fonds d'Aide et de Coopération FONADER : Fonds National de Développement Rural IFCC : Institut Français du Café et du Cacao IRAT : Institut de Recherches Agronomiques Tropicales et de Cultures Vivrières LPAC : Lutte Phytosanitaire et Anti-Capside SODECAO : Societé de Développement du Cacao SEDES : -Societéd'Etudes pour le DéveloppementEconomique et Social SEMRY : Secteur Expérimental de Modernisation de la Riziculture de Yagoua UDEAC : Union Douanière des Etats de l'Afrique Centrale (Customs Union of Central African States) ZAPI : Zones d'Actions Prioritaires Intégrees CANEROON

COCOA PROJECT

Table of Contents

Page No.

SU1Q¶ARYAND CONCLUSIONS ...... i - v

I. INTRODUCTION ...... 1

II. BACKGROUND ...... 2

A. General ...... 2 B. Agricultural Sector ...... 2 C. The Cocoa Industry ...... 3

Institutions ...... 3 Production ...... 5 Marketing and Prices ...... 5 Credit for Cocoa Farmers ...... 6

D. Development Prospects and Strategy ...... 6

General ...... 6 Strategy for the Cocoa Industry ...... 7

III. THE PROJECT ...... 8

A. Project Area ...... 8 B. Project Description ...... 9

Summary of Main Features ...... 9 Rehabilitation and New Plantings ...... 9 Extension Services ...... 10 Training ...... il Road Rehabilitation ...... il Research ...... 12

C. Organization and Management ...... 12

SODECAO ...... 12 Consultants ...... 13 1larketing ...... 13

D. Accounts and Audit ...... 14

This report was prepared by Messrs. M. Burer, M. Ballesteros, C. R. Delapierre, W. M. Schaefer and M. Wessel.

TABLE OF CONTENTS (Cont'd)

IV. COST ESTIMATES AND FINAiNCIALARRANGEMENTS ...... 14

A. Cost Estimates ...... 14 B. Financial Arrangements ...... 16 C. Credit to Farmers and Farmer Groups ...... 19 D. Procurement ...... 19 E. Disbursement ...... 20

V. PRODUCTION, PRICES, MARKETING ANID FIiNANCIAL RESULTS ...... 20

A. Production ...... 20 B. Markets and Prices ...... 20 C. Farmers' Benefits ...... 21 D. Government Revenues ...... 22

VI. ECONOMIC BENEFITS AND JUSTIFICATION ...... 23

VII. RECOIMNDATIONS ...... 24

ANNEXES

1. Pest and Disease Control 2. Field Developments

Table 1 Number of Farmers and Corresponding Areas Table 2 Establishment of New Plantings

3. Farm Labor

Table 1 Available Labor for Cocoa Cultivation in Project Areas Table 2 Labor per ha of Newly Planted Cocoa Table 3 Labor Requirements for 1.2 ha Rehabilitation and 0.75 ha New Plantings

4. Improvement and Maintenance of Rural Roads

Table 1 List of Roads

5. Research

Table 1 Research Program for Cocoa

6. Marketing

Table 1 Marketing Systems in Francophone Cameroon TABLE OF CONTENTS (Cont'd)

7. Project Costs

Table 1 Project Costs Table 2 Project Costs: Personnel Table 3 Project Costs: Buildings Table 4 Project Costs: Vehicles and Equipment Table 5 Project Costs: Operations and Maintenance

8. AgriculturalCredit

Table 1 Credit Component Cash Flows

9. Estimated Semestrial Schedule of Disbursements

10. Production

Table 1 Estimated Production of Project Area Table 2 Estimated Production of RehabilitatedCocoa Table 3 Estimated Production of New Plantings

i1. Farm Budgets

Table 1 On-farm Inputs (with Project) Table 2 On-farm Inputs (without Project) Table 3 Farm Budget: 1.2 ha Rehabilitation Table 4 Farm Budget: 0.75 ha New Planting with Project, Existing Farmer Table 5 Farm Budget: 0.6 ha New Planting without Project Table 6 Farm Budget: 1.5 ha New Planting with the Project New Farmer

12. GovernnentCash Flow

13. Economic Rate of Return

Table 1 Economic Value of Cocoa Table 2 Economic Rate of Return Calculation ttIAP CAMEROON

COCOA PROJECT

SUMIMARYAND CONCLUSIOlIS

Background i. The Goverrwent of the United Republic of Cameroon has requested Bank assistancein financing a US$23.8 million cocoa planting and rehabili- tation project covering 50,000 ha in the central southern provinces, adjacent to the capital city, Yaounde. The proposed project would be the Bank Group's fifth lending operation for agricultureand the first for cocoa production. It would be financed jointly with the French agencies Caisse Centrale de CooperationEconomique (CCCE) and Fonds d'Aide et de Cooperation (FAC), and Government. The feasibilitystudy for the proposed project was prepared by Societe d'Etudes pour le DeveloppementEconomique et Social (SEDES) in 1972-73 and the project was appraised by a Bank mission in October/November 1973.

Project Description ii. The project would aim at raising farmers' incomes, the country's foreign exchange earnings and Government revenues by increasing the produc- tion of cocoa. It would be carried out over a six-year developmentperiod and would involve:

(a) rehabilitatingsome 35,000 ha of existing cocoa and planting up to 15,000 ha of new land with high-yieldinghybrid cocoa;

(b) strengtheningthe extension services, to help farmers control disease and improve their cultivationpractices and to supply them with the necessary inputs and credit facilities;

(c) providing training for some 230 extensionworkers and 2,000 new cocoa farmers;

(d) improving 950 km of rural roads;

(e) adaptive research on cocoa and food crop growing;

(f) equipningand staffing the new agency, SODECAO, to carry out the project and take over responsibilityfor the developmentof cocoa production in the area;

(g) employing consultants to:

(i) advise on tr crganizationof the new agency; (ii) evaluate the jrc,ress and impact of the project; (iii) prepare a fo!LOiJ-_p project; and - fi -

(h) encouraging the formation of farmers' groups that would increase the role of farmers in marketing and credit.

Project Execution

iii. The ZAPI, a development agency, which is presently responsible for agriculturaldevelopment over most of the project area, has been criticized for its lack of attention to production; and its marketing policies have proved unpopular with farmers. To stimulate participationin the project, therefore,a new authority,Societe de Developpementdu Cacao (SODECAO),has been established that would abosorb, gradually and selectively,ZAPI's func- tions and staff.

iv. SODECAO would be generally responsiblefor the execution of the project. It would make arrangementswith other agencies for the execution of certain project componentssuch as road improvementand research. SODECAO's senior management would consist of a General Director, a Deputy General Director in charge of technical affairs, a Deputy Technical Director, a Marketing and Credit Director, a Senior Inspector and a Chief Accountant. Government has already appointed a CameroonianGeneral Director and recruited, with Bank approval, an expatriateDeputy General Director. The posts of Senior Inspector and Chief Accountantwould be filled through international recruitmentand after Bank approval of such candidates. From the beginning, local staff would be trained to take over the functions of some expatriates after periods ranging from three to six years. v. SODECAO would angage consultants to: (a) advise on its organiza- tion aid the takeover of activities from ZAPI, (b) assess the progress and impact of project, and (c) carry out a feasibilitystudy for a follow-up project. vi. SODECAO would encourage the fornation of farmers' groups which would gradually take over marketing functions,including storage, and enter into direct contractswith exporters. The earnings of such groups from marketing margins and quality and quantity bonuses would be distributed to farmer members after meeting their costs.

Project Costs and FinancingArrangements vii. Project costs are estimated at US$23.8 million, including contin- gencies of US$7.0 million. About 5% representsindirect taxes and the foreign exchange component is estimated at US$9.5 million or 40%. viii. The Bank would make a loan of US$6.5 million to Government for a 2f) year term including a grace period of six years. The balance of US$17.3 million would be covered by French bilateral sources (IJS$6.5million), by farmers contribution (IJS$0.7million), and by budgetary allocations (US$10.1 million). The proposed Bank loan and the French contributionwould cover the foreign exchange of the project (US$9.5million), and US$3.5 million equivalent of local currencv expenditures. The Bank loan in particular would cover the forei,gn exchange costs of the items financed and about 48% - iii

of the local cost. It is proposed that some US$150,000 of the proceeds of the loan be used for retroactive financing of the cost of expatriate salaries and expenditures incurred prior to the signing of the Loan. ix. The project would provide fungicides and sprayers to individual farmers and building materials and equipment for collection centers to farmer groups. All items would be made available for cash or on credit; the credit price would be up ta 20% above the cash price, to cover bad debts and interest and service charges.

Procurement and Disbursement

Xe Items financed by the Bank Loan would be procured as follows: (i) one grader, thirteen passenger cars, and all two-wheeledvehicles have already been ordered with Bank approval through negotiatedpurchases on the basis of quotationsfrom local suppliers,in order to facilitatethe start- up of the project. These amount to US$150,000and would be financed retro- actively; (ii) office furnitureand equipment,and small spare parts would be similarlyprocured; (iii) all other items, amounting to some US$3.5 mil- lion, would be procured in accordancewith Bank guidelineson the basis of internationalcompetitive bidding. Manufacturedgoods originatingin UDEAC countrieswould be allowed a preferenceequal to the lower of (a) 15% or (b) applicableduties; (iv) the services of expatriatepersonnel and consult- ants would be secured accordingto proceduresacceptable to the Bank. xi. The French agencies would finance 100% of the cost of training, research and studies; 46% of the personnel and operationand maintenance costs of the road program; and 32% of the cost of pest control. The pro- curement of items for these activitieswould be subject to the procedures of these agencies. xii. Proceeds of the Bank loan would be disbursed to cover:

(a) 58% of the cost of SODECAO'sadministrative staff (US$2.8 million); (b) 100% of foreign expenditures or 90% of local expenditures on vehicles and equipment for SODECAOadministrative staff and for road construction equipment for DPR (US$0.94 million); and

(c) 100% of foreign expenditures on sprayers and fungicides (US$0.78 million).

The balance of US$2.0 million represents contingencies, which would be un- allocated. - iv -

Markets and Prices

xiii. Growing conditionsin West Africa have been generally poor in the last three years, and this has intensifiedthe supply-depressingimpact of limited investment and abandonment of low-yielding plantings following the low cocoa prices during the early 1960's. The average world cocoa price during 1973 was USt65/lb. The current Bank forecast is for a 1980 price of about USt 47/lb, in average 1973/1974prices, and this has been used in the economic and financial analyses. The InternationalCocoa Agreement is un- likely to exert any significant constrainton cocoa productionand exports in the medium term.. Cameroon'smarket prospects are firm at least through 1980, and no difficultiesare anticipatedin selling the project's output.

Economic Justifications

xiv. The economic rate of return is estimated at 26% using market prices. Cost increases of 10 and 25%, or benefits decreases of similar proportions, would lower the rate of return to about 23% and 19% respectively. Simultaneous cost increasesand benefit reductionsof 25% would bring the rate down to about 12%. Since total control of black pod is difficult to achieve, the effect of a serious shortfall fromnproject targets for this component of the project has been calculated. This shows that if only about one third of the expected benefits from rehabilitationwere obtained, the rate of return for the project would still be 10%. The risk of such a shortfall is considered to be small, particularlysince the average increases on yields have been conservatively estimated. Furthermore, the project has been charged with the entire cost of:

(a) the rehabilitation of rural roads, while ne account has been taken of the benefits accruing to nonprojectactiv- ities, such as the marketing of food crops, general goods and nonproject cocoa; and

(b) the research and studies, although benefits from these activitieshave not been taken into account.

Excluding the cost of these components, the economic rate of return would be 35%. Rates of return have been calculatedfor the rehabilitationand new plantings componentsseparately, although allocationof project agency costs is necessarily arbitrary. The rates are 32% for rehabilitationand 20% for new plantings. xv. The improvementof agriculturalinstitutions, training of local techniciansin advanced cocoa technologyand extension,and encouragementof farmers associations would permit an expansion of the project concept through- out the cocoa growing area. Furthermore,the experienceof cocoa replanting acquired through the present project's research componentwould allow this - v - expansion to take place in more densely populatedand poorer cocoa areas. Tle experiencegained by the project in establishingSODECAO, training extension workers and farners, and encouragingcooperative action by farmers should provide a sound basis for future projects of a similar kind.

I. INTRODUCTION

1.01 The Government of the United Republic of Cameroon has requested Bank assistance in financing a US$23.8 million cocoa planting and rehabilita- tion project covering 50,000 ha in the central southern provinces, adjacent to the capital city, Yaounde.

1.02 In 1971, the Government commissionedSociete d'Etudes Pour le DeveloppementEconomique et Social (SEDES), to study means to improve the quantity and quality of cocoa production in Cameroon. This initial study, completedin mid 1972, recommended the rehabilitationof 200,000 ha of exist- ing plantings, and new plantings with improved varieties on 15,000 ha. Follow- ing comments by Bank Group staff and Caisse Centrale, the Government decided to start implementationin a representativepilot area of 50,000 ha in the center of the cocoa producing region. Implementationwill be extended to other areas in the light of the results obtained.

1.03 Feasibility studies for the present project were carried out by SEDES. At the Government's request PMWA staff visited Cameroon in March and July 1973 to review the draft studies, which were finalizedin September 1973.

1.04 The proposed project would be the Bank Group's fifth lending opera- tion for agricultureand the first for cocoa production. The other projects are:

(a) the C.ADEV plantation project, Loan 490-CM for US$7.0 million and Credit 100-CM for US$11.0 million, both in 1967; funds for CAIDEV have been depleted by cost increases, lower than expected income from nonproject plantings, and excessive overhead. Govern- ment recently took measures to reduce overhead costs and the project is now proceeding satisfactorily;

(b) the SOCAPALM oil plantation project, Loan 593-CM for US$7.9 million in 1969 and Loan 886-CM for US$1.7 million in 1973; the SOCAPALM project started well, but had to be reappraised in 1972 because of cost overruns and because one of the two sites selected for developmentwas unsatisfactory. After reappraisal the project was reduced from 9,000 to 8,500 ha, but productionwill remain unchanged as higher yields are now anticipated as well as substantially increased prices for project produced palm oil and kernels. Tle project is now on schedule;

(c) the SEMRI rice project, Credit 302-CM for ItS$3.7million in 1972; this project has progressed well since implementation began in mid-1972. Estimated total project costs have been increased by 20% due to TUSdollar devaluation,additional works and increased technical assistance. Government and French aid are providing additional funds; -2-

(d) the Cameroon Livestock Project,wnich was approvedby the Board in March 1974, signed in May 1974 and pending effect- iveness.

1.05 This report is based on the findings of an appraisal mission in October/November 1973 comprising Messrs. M. Burer, M. Ballesteros, C.R. Delapierre, W.M. Schaefer (Bank) and M. Wessel (Consultant), assisted during part of the visit by ',r.I. Erim (Loan Officer).

II. BACKGROUND

A. General

2.01 Ile United Republic of Cameroon comprises a French speaking Eastern part (with 80% of the population),and an English speaking Western part. Located at the hinge of the Gulf of Guinea (map), it covers about 475,000 km2 and ranges from tropical forest in the south to mountain chains in the west and Sahelian plains in the north. The population in 1972 was estimated at 6.1 million, growing at an annual rate of about 2.1%. Overall population density is low, at 12.8 persons/km2; higher density areas include the districts around Yaounde where the project will be located. Due to migration, urban areas are growing annually at about 7%, against only 0.7% in the rural areas.

2.02 Per canita GDP is estimated around US$190 (1970/1971). Economic growth,which was fairly rapid during the second half of the 1960's,has taperedoff in recent years. Unemploymentis high, particularlyin the cities.

B. AgriculturalSector

2.03 Close to 80% of the populationstill depends on agriculture. Annual per capita farm income varies from $90-$100in the central savannah, forest areas and coffee and cocoa lowlands, to $40-$50 in the northern plains. Agri- culture accounts for about 40% of GDP and for 70% of the value of exports, comprisedprincipally of cocoa, coffee and cotton. The traditionalsector accounts for over 90% of agriculturalproduction, with large state owned plantations,mainly of oil-palm and rubber, accounting for the balance. Some 950,000 smallholders cultivate plots averaging about 2.0 ha. Labor is generallv supplied by the family.

2.04 Cameroon is largely self-sufficient in food products; the exceptions are rice and wheat, which are being imported in increasingamounts, and lesser imports of sugar and meat also take place. Although food crop production is keeping slightly ahead of vopulation growth,major urban centers are ex- periencingincreasing supply problems. Food crop marketing is not regulated, and is largely in the hands of private traders, most of whom operate over small areas and with a small turnover. -3-

2.05 For the main export crops, productionincreased by about 5% annually during the late 1960s, but growth has slowed down in recent years. Marketing is highly organized, and Governmentintervenes by fixing guaranteed producer prices and licensingprivate exporters. This interventionis implemented through StabilizationFunds (cocoa,robusta coffee, arabica coffee, cotton, and groundnuts) in the Eastern part, and a Marketing Board in the Western part; these agencies are now being merged.

2.06 Agricultural credit consists mainly of marketing loans for the main export crops, and is provided by the Banque Camerounaisede Developpementand commercial banks. Production credit to individual farmers is small in amount, and limited to participants in specific programs and projects. Agricultural credit for production purposes is provided by the recently created Fonds National de DeveloppementRural (FONADER,see para. 2.14).

2.07 Agriculturaldevelopment has so far been hampered by the fragmenta- tion and weakness of the Government services responsiblefor project prepara- tion and implementation. The creation in 1972 of centralMinistries of Agricultureand Livestock, replacing the previously separate state administra- tions, has improved the situation, but these Ministries are not yet adequately staffed. Furthermore, there is a need to coordinateresearch and training, now the responsibility of several Ilinistries.The Governmentis, however, making efforts to centralize and coordinate rural developmentactivities.

2.08 About 15% of public investmentsduring the second plan period, 1966-67/1970-71,went into crop development,and of this almost three quarters went into expansionof estate agriculture. The Third Plan (1971-72/1975-76) emphasizesdevelopment of the smallholdersector and foresees investments in this sector doubling. Explicit goals of the Third Plan are to improve traditionalagriculture, reduce regional income disparities,and alleviate rural migration and unemploymentpressures on urban areas. These goals are expected to be retained in the next plan soon to be prepared.

C. The Cocoa Industry

Institutions

2.09 Tle Ministry of Agriculture,the Zones d'Action Prioritaires Integrees (ZAPI) and the Cocoa StabilizationFund are the main institutions presently concernedwith cocoa production;the recently created FONADER is expected to play an important role in the future.

2.10 The Ministry of Agriculturehas directed its activities to increas- ing output. It provides new hybrid planting materials, which are delivered in the village free of charge, and fungicidesand sprayers for black pod control,which are provided on credit. A service of the Ministry, the Lutte -4-

Phytosanitaireet Anti-Capside(LPAC), carries out spraying to control capsid damage. These activitieshave begun to improve yields, but they need to be better organized if a substantialincrease in production is to be obtained.

2.11 The Center-ScuthZAPI was establishedin 1972 to carry on an inte- grated developmentprogram initiated by Governnent in 1967. The objectives were to:

(a) double cocoa production and farmers' incomes within five years;

(b) increase farmers' participationin development;and

(c) create farmers' groups which, by means of revenues obtained from cocoa marketing, could finance their own developmentactivities.

2.12 The program hinged on effectiveextension work and monopolistic marketing. The extensionwork, however, has not reached large numbers of farmersbecause of basic deficienciessuch as inadequate training and the lack of transport for extensionpersonnel. In addition, the marketing mono- poly has met strong resistance from the farmers. As a result cocoa production at best has increasedonly slightly and there has been no self-financeddevelop- ment. Nonetheless,many farmers have become aware of the benefits of cooperat- ing with each other and of modern techniquesof cocoa production.

2.13 The Cocoa StabilizationFund, an autonomousagency under the Ministry of Industrialand Cor!nercialDevelopment, was establishedin 1955. As a result of high world prices during the late 1960's, the Fund had accumulateda sur- plus of about CFAF 12 billion (US$52.2million at the current exchange rate) by the beginning of 1971. The Fund helped to dampen the impact on producer prices of the wide variations in world prices that occurred from the mid- 1950's to the mid-1960's: the world price of cocoa varied between CFAF 241/kg and CFAF 94/kg, whereas producer prices oscillated only slightly around CFAF 75/kg. In addition to its pricing and marketing functions (paras 2.18-2.19), the Fund provides importantfinancial assistance for the control of capsid pest and black pod disease, and for the production and distributionof seed of improved varieties. More importantly,the Fund has lately become an extrabudgetarytaxing agency, and its revenues are being used by the Governnent to finance activities and investmentsoutside the cocoa sector.

2.14 FONADER is a new (August 1973) agency under the Ministry of Agri- culturewhich has broad responsibilitiesfor financing rural development projects and for agriculturalcredit. Its principal sources of funds will be participationin taxes and levies (especiallyon exports and imports of agriculturalproducts) and Governnent grants; it is also authorized to borrow. FONADER is in a formativestage and its senior staff are still defining its functionsand organization. Since there is a real need for the centralized coordination,supervision and control of agriculturalfinance and credit, the establishmentof FONADER is a positive step. Production

2.15 Cameroon is the world's fifth largest producer of cocoa. The area planted is estimated at 380,000 ha; annual production over the last three years has averaged 110,000 tons of dried beans, or about 7% of world produc- tion, and has accounted for 30% of the value of Cameroon'sexports. More than 80% of the national output comes from the forested plateau of the Center South.

2.16 Cocoa is mostly cultivatedby family labor on small farms of about 2-3 ha. It is generally the responsibilityof the men, with women and children working during the harvest. Weeding is irregular, as are sprayings in the rainy season that are needed to prevent disease. Fermenting in wooden boxes generally gives good results, but the subsequent sundrying is often poor due to the heavy rainfall at that time of year and lowers the quality of the product at farm level. Exporters often have to dry again before ship- ment.

2.17 Average yields are low (300 kg/ha). One reason is a general low level of maintenance. The principal cause of low yields, however, is black pod, a fungus disease which destroys the cocoa pods. The disease spreads rapidly in conditionsof high humidity and relativelylow temperatures,and is particularly severe in Cameroon compared to other West African countries. It is estimated that about 50% of the annual crop is lost to black pod. On the other hand, the absence of a prolonged dry season makes establishingnew plantings easier than in other countries.

larketing and Prices

2.18 Marketing involves licensed and unlicensed buyers, the exporters and the StabilizationFund. Licensed buyers, who operate on fixed margins under cohntAçt with exporters, collect the dry beans at official cocoa markets where controllersemployed by the Fund grade the cocoa traded; unlicensed buyers often go directly to the farmer's home to buy generally lower quality cocoa there, The cocoa is transported by the buyer to central storage houses for further drying and grading and sold either for the export market or to local processing plants which absorb all off-grade and about 10% of Grade I cocoa (about 20,000 t. annually) for the production of cocoa butter. Exporters work on fixed margins and on export quotas fixed annually by the Ministry of Industrial and Commercial Development. The StabilizationFund itself has been an exporter since 1971.

2.19 Producer prices are set by Government in advance of each harvest on the recommendationof the Cocoa StabilizationFund. Prices for the 1973-74 crop have been raised from CFAF 90 to CFAF 100/ke for Grade I, from CFAF 75 to CFAF 80 for Grade II and left at CFAF 65/kg for off-grade. Production of Grade Il is negligible because the price differentialbetween the two grades makes it attractive for farmers to improve their beans to Grade I rating. At the time of appraisal the world price for cocoa was about CFAF 300/kg, - 6 - which may be analyzed as follows (in CFAF): producer price 100, Stabilization Fund 116, export tax 34, transport and other costs, fees and exporter's pro- fits 50. Producer prices while lower than those that could be paid, are judged to provide adequate incentives to producers, provided that credit facilities and better extension are made available to help raise production. In the event, however, that prices at any time were judged by the Bank to be so low as to jeopardize the project, the Bank and Governmentwould hold consultationson the subject.

Credit for Cocoa Farmers

2.20 Cocoa farmers presently have access to credit from:

(a) the Ministry of Agriculture for fungicidesand sprayers for blach.pod control. This is on a small scale, how- ever, and is not properly coordinatedwith extensionwork;

(b) exporters to cover school fees at the beginning of the school year in September; such advances are limited to a few small areas;

(c) ZAPI in the Center South Region, for fungicides,sprayers, school fees and for housing.

Repayments are collected at the markets when the farmers sell their cocoa. Although credit facilitieshave so far been limited, they have shown that there is widespread demand and they have familiarized farmers with repayment by deduction from the proceeds of sale.

D. DevelopmentProspects and Strategy

General

2.21 The potential for growth in agricultureis good. There are favorable market prospects for Cameroon'smain cash crops, and with urban migration, there is a growing domestic demand for food. A favorableclimate and soils, coupled with traditionallow yielding production methods, give ample scope for increasing output.

2.22 Government'sstrategy is to exploit the potential for increased output and at the same time to raise rural standards of living, particularly in the poorer regions. To achieve these aims it will be necessary to strengthen the Government'sown capacity for project planning and implementa- tion; it will be necessary to make technical advice, inputs and credit avail- able to small farmers and to give them the incentive to use them. The strengtheningof the Ministry of Agriculture and the creation of FONADER are steps in this direction. -7-

2.23 The conclusionsof a Bank mission, which carried out an agricultural sector survey in Cameroon in May 1973, support this strategy. The recently appraised livestock project will benefit pastoralists and farmers so far untouched by modern development. The present project would raise the produc- tion and incomes of large numbers of small cocoa farmers. An integrated rural developmentproject in the backward North, which was identifiedby the sector mission and is expected to be appraisedin FY75, would be a first step toward benefittingsome 60,000 families whose incomes and living conditions are among the poorest in the country. Integratedprojects based on rice and other food crops are also under preparationto develop the potential and raise rural incomes in the densely populatedWestern highlands.

Strategy for the Cocoa Industry

2.24 Governmenthas justifiably given cocoa an importantrole in its strategy for agriculturaldevelopment. The Third Plan sets a production target of 150,000 tons in 1975/76, calling for an annual increase of 7%during the plan period. Given the propitiousworld market outlook, the foreign exchange earnings and fiscal revenues from cocoa should be substantialand should assist Governnent to financeprojects in the poorer regions that are unsuitable for cocoa. In addition, the wide margin between current world and producer prices gives Government the ability to balance the needs of the poorer regions of the country against the effects of greater incentives to cocoa farmers.

2.25 Cocoa production can quickly be increased--the means of controlling black pod are well known and readily available. Over the longer term, sustained increases in productionrequire new plantings to replace and expand existing cocoa farms of low yield potential. Improved planting material is becoming availablefrom seed gardens planted since 1969 by IFCC at Nkoemvone.

2.26 Although the techniquesand inputs are available,previous attempts to increase production have not been entirely successful. To ensure that farmers increase both their output and their incomes, it is necessary to:

(a) introduce better cultivation practices through improved extension services,ciosely linked with an efficient supply system for inputs and credit;

(b) develop marketing arrangementswhich, while giving the farmers freedom of choice, will encouragethem to play a greater role in marketing (e.g. transportingtheir produce to market and pregrading and weighing it) and to cooperate with each other to improve their bargaining position;

(c) strengtlhen institutions through wihich these aims can be achieved. 2.27 It would not be practicable to introduce a program incorporating the above throughoutthe country's cocoa growing areas at the same time. There is insufficienttrained staff and it is necessary to test organizational procedures. Consequently,development should begin in one region and be expanded graduallyas experience is gained. The proposed project would be the first stage of such a program of development.

III. THE PROJECT

A. Project Area

3.01 The main cocoa growing area is situated on the vast plateau of South Cameroon,at an altitude of 600-700 m above sea level. Conditions are particularlywell suited for cocoa, except that humid conditionsand relatively low temperaturesat certain times of the year favor the developmentof black- pod disease (Annex 1). The soils are deep, highly leached and well drained but have a low chemical fertility, except for a shallow surface rich in vegetativematters, and thus need fertilizersto support sustained high yields. The project would be located south and west of Yaounde (map). It would cover six administrativedistricts which contain about 80,000 ha of cocoa, of which 67,000 ha yield an average of 300 kg/ha, and 13,000 ha are not producingbecause they are either too young or too neglected.

3.02 The climate is tropical, with a bimodal rainfall over most of the area separated by a dry season of three months. Average annual rainfall ranges from 1,500 mm to 1,800 mm; rainfall is 2,500 mm in the northwestern part of the project area, where there is no dry spell. Average monthly temperaturesvary little over the year, and range between 22°C and 24°C.

3.03 The area's rural population is estimated at 260,000, of whom approximately200,000 comprise some 38,000 cocoa farm families. The average family consists of 5.3 persons, and has about 2.8 members of working age. Cocoa provides the family's basic income, and offers the only means of sub- stantially increasingit. The other important source of income is the pro- duction of food crops for sale in the nearby urban market at Yaounde.

3.04 The average size of farms in Center South Province is 2.6 ha; but in the project area itself holdings are somewhat larger. The average area devoted to cocoa is about 2.0 ha per farm with a range of 1.2 ha to 3.3 ha.

3.05 Land belongs to the community,with the right of usufruct extended to the individualwho cultivatesit. More than enough land is available for project purposes, however, and land tenure is not likely to be a problem.

3.06 There are three categoriesof roads in the project area: primary roads (630 km), maintainedby the Departmentof Public Roads (DPR); secondary roads (450 km), for which the local administrator,with the assistanceof -9-

DPR, is responsible;and rural roads (1,200 km), under the responsibilityof the village authorities. Primary roads are adequate except during the rainy season. Secondary roads are deterioratingdue to lack of funds allocated for proper maintenanceand are often impassable even by light trucks, parti- cularly in the rainy season.

B. Project Description

Summary of Main Features

3.07 The project would be carried out over a seven-year development period and would involve:

(a) rehabilitatingabout 35,000 ha of existing cocoa and the new planting of up to 15,000 ha with high yielding hybrid cocoa;

(b) strengthening extension services to help farmers control disease and improve their cultivationpractices and provid- ing farmers with necessary inputs and credit facilities;

(c) providing training for some 230 extensionworkers and 2,000 new cocoa farmers;

(d) improving 950 km of rural roads;

(e) adaptive research on cocoa and food crops;

(f) equipping and staffing a new agency-Societede Developpement du Cacao (SODECAO)--tocarry out the project and take over responsibilityfor the developmentof cocoa production in the project area;

(g) employing consultants to:

(i) advise on the organizationof SODECAO;

(îi) evaluate the progress and impact of the project;

(iii) prepare a follow-up project; and

(h) encouraging the formation of farmers' groups to participate in cocoa marketing and the supply of inputs and credit.

Rehabilitationand INewPlantings

3.08 The rehabilitationand new planting program would proceed as follows: 10 -

Project Year 1 2 3 4 5 6 Total ------Hectares------

Rehabilitation 6,000 7,000 7,000 7,000 8,000 - 35,000

New Planting - 1,500 3,500 5,000 3,500 1,500 15,000

Details of the program are set out in Annex 2. All planted areas would be in full production in 1988. The program would be carried out by 32,000 farmers Principally using family labor. In Annex 3, it is shown that for all the districts in the project area the availability of labor is not a constraint to achieving project targets.

3.09 The main goal of the rehabilitationprogram would be the control of black pod. For this purpose the project would mount an intensive campaign to convince farmers to spray in both the dry and rainy seasons. It would also set up an efficient distributionsystem for sprayers, spare parts and fungicides which would be supplied on credit (para 4.09) to members of pre- cooperatives and for cash to others. Since capsid damage is not heavy in the project area, control spraying would be selective; and would be carried out by LPAC with the assistance of farmers' groups.

3.10 The seed of high yield potential hybrid varieties (Amazon Series I and II) for the project, and for the general program of the Ministry of Agriculture,would be supplied by the IFCC seed gardens at Nkoemvone. The estimated total output of pods as compared with the requirementsof the project (assuming60 pods are needed to plant 1 ha) is shown below:

Project Year 2 3 4 5 6 ------Thousand Pods------

Output 480 720 1,000 1,220 1,350

Project Requirements 90 210 300 210 90

No shortages of seeds are expected, either for the project or for the planting program of the Ministry of Agriculture. To minimize the risks to the project, however, in the event of output being temporarilyreduced - for example, by bad weather -assuranceshave been obtained from Government that the project will have priority for the seeds it needed.

Extension Services

3.11 To help farmers rehabilitatetheir cocoa farms and plant new trees, the project would increase the number of extensionworkers so that there would be one for every 200-250 farmers, instead of one for every 600 farmers as at present. These extensionworkers would be given better training than at present (para 3.12) and would be provided with adequate transportand additionaloffice facilities. They would persuade farmers to spray their - il -

crops correctly and regularly and would organize the supply of the necessary equipment; they would guide new planters in their cultivationpractices. In addition, they would oversee village nurseries and provide a link between research and field practices.

Training

3.12 The initial training program would consist of a basic course and short follow-upsessions il.the field to train eight future instructors. The basic course would aim at improving technicalknowledge and developing traits of initiativeand responsibilityin the instructors. It would be followed by short monthly sessions on specific activitiesof modern cocoa growing. Once trained, these instructorswould be assigned throughoutthe project area, and be responsible for the training of extensionworkers and new farmers. Farmers training would take place at the village level and, as much as possible, in the field.

3.13 These instructorswould then train a total of 230 extension staff, including 19 supervisors. About 2,000 new planters would also be taught modern cocoa growing practices. SODECAO has agreed to have ready a compreheri- sive training program including details of the curricula,phasing of courses, staffing requirementsand budget no later than three months after credit effectiveness.

Road Rehabilitation

3.14 In order to facilitateextension work, the distributionof inputs and the movement of produce to market, the project would improve about 950 km of rural roads (Annex 4). The improvementswould include grading, reshaping and better drainage. The highest priority would be given to the 370 km of rural roads in the south and east of the project area that require major works; improving bad stretches (low-lyingand steepgradesections) by earth- moving and regravelling,building culverts and other ancillary works. A separate program, outside the proposed project, is to be prepared for the bettermentof primary and secondary roads which are maintainedby the Depart- ment of Public Roads (DPR).

3.15 The proposed rural road program would be carried out by DPR on force account during the relativelydry period, and thus would ensure good running conditionsfrom November to July. For the rest of the year, while tracks will be passable most of the time some breaks in the roadway will be unavoidable.

3.16 Assuranceshave been obtained that:

(a) an annual program of rural road improvementswill be agreed with the Bank;

(b) all equipmentpurchased for the project's road componentwill be used and retained in the project area; and - 12 -

(c) the roads will be adequatelymaintained by DPR after the project has been completed.

Research

3.17 The French Governmenthas supported, for many years, cocoa and food crop research in several West African countries,including Cameroon. To provide specific support for this project, two French research institutes, IRAT and IFCC, have developed a program of adaptive research (Annex 5). This componentof the project will be financed entirely by FAC/CCCE.

C. Organizationand Management

SODECAO

3.18 The performanceof ZAPI, which is presently responsible for agricul- tural developmentin most of the project area, has been spotty. In parti- cular, it has achieved little in increasingproduction and its marketing policies have proved unpopularwith farmers. To implement the project, therefore,a new authority,Societe de Developpementdu Cacao (SODECAO), has been establishedby PresidentialDecree and would absorb, gradually and selectively,ZAPI's functions and staff.

3.19 SODECAO would be generally responsiblefor the execution of the project and, in particular, for (a) extension services and the supply of inputs and credit; (b) training courses for extensionworkers and farmers; (c) planning and controlling the improvement of rural roads; and (d) encourag- ing the formationof farmers' groups; SODECAO extensionworkers would live in the villages and would use mostly the collectioncenters and sector offices as bases to reach the farmers.

3.20 Other agencies would be involved, as follows: (a) LPAC would pro- vide the capsid spraying service; (b) FONADERwould procure and provide SODECAO with the inputs to be supplied to farmers for cash or on credit; (c) DPR would execute the road improvement program; (d) the research institutes (IFCC and IRAT) would carry out the research. The StabilizationFund would provide controllers for the grading of cocoa at project markets.

3.21 SODECAOhas a board of directors and senior management consisting of: (a) a General Director; (b) a Deputy General Director in charge of technical affairs; (c) a Marketing and Credit Director; (d) a Senior Inspector responsiblefor the progress and quality of project execution;and (e) a Chief Accountant. Field activitieswould be guided by extensionworkers, marketing and credit agents. - 13 -

3.22 The Senior Inspector and Chief Accountant would be internationally recruited,and would possess qualificationsand experience, and be employed under terms of reference acceptableto Qvernment and the Bank. Assurances to this effect have been obtained from Government. Government has already ap- pointed a General Director and a Deputy General Director in charge of tech- nical affairs both of whom are acceptable to the Bank. It would be a condition of loan effectivenessthat Government had appointed a Chief Accountant.

3.23 Assurances have been obtained from SODECAO that counterpartsto internationallyrecruited staff would be: (a) appointedno later than three months after commencementof the latter's employmentwith SODECAO; and (b) trained to take over in accordancewith arrangementsand a timetablesatis- factory to the Bank.

Consultants

3.24 Consultantswould be engaged by SODECAO for several purposes. First, about four man-months of consultingservices would be engaged, on terms accept- able to the Bank, to develop a program for the integrationof areas under ZAPI jurisdictioninto the project. Assuranceshave been obtained that this program would be presented to the Bank not later than six months after loan effectiveness.

3.25 Secondly, to learn about the impact of the rehabilitationcomponent of the project, consultantswould be engaged to collect and analyse data over periods of about three months a year during three years. After two years, sufficientdata should have been collected for use in overall studies for a follow-up project which would start in FY 1977/78. The Bank has been assured that consultantswould be employed under terms and conditionsaccept- able to the Bank to carry out these studies as well as a feasibilitystudy for the follow-up project.

Marketing

3.26 The project would sponsor the developmentof marketing cooperatives, thus building on the successful experiencegained in a neighboring area under a UNDP sponsoredprogram, CENADEC (Annex 6). Farmers located around 180 collection centers would be encouraged to form groups of 100-150 members, and to elect a management committee. About 30-50 groups would constitute a precooperative,with a Board consistingof delegatesof the management com- mittees. There would be six precooperatives(one in each sector), each with its own storage facilities. Sector stores would be financed by the project. Collection center sheds would be built by the farmers with materials obtained on credit from SODECAO. The main advantage of the new system, as detailed in para 8 of Annex 6, is the elimination of the dealer and his margin, which is transferredto farmerswho do their own grading, weighing and storage of cocoa. - 14 -

3.27 SODECAO would initially enter into contractswith exporters for the sale of project cocoa. Contracts would also provide for credit for school fees as at present (para 2.20). Cocoa purchases would take place at collec- tion centers by exporters on appointedmarket days. Intermediary'smargins (CFAF 5/kg) and agreed quantity and quality bonuses (CFAF 3-4/kg) would be paid by exporters to SODECAO. SODECAOwould deduct the direct costs of market- ing and the repayments of credit for collection centers' storage shed mate- rials, and distribute the remainder to farmers as a year-end bonus. As pre- cooperatives were formed and obtained legal status, they would take over these marketing functions fron SODECAO. Government has assured the Bank that members of the precooperatives would receive a year-end bonus to provide an adequate incentive to farmers to join the precooperatives.

D. Accounts and Audit

3.28 During negotiations, assurances were obtained that Government would cause SODECAOand FONADERto:

(a) keep records adequate to reflect, in accordance with consistently maintained sound accounting practices, their operations and financial condition;

(b) appoint independent,qualified auditors acceptable to the Bank;

(c) submit copies of their audited accounts, and the auditors' reports thereon to the Bank within four months of the end of each financialyear; and

(d) cause the report of the auditors to be of such scope and in suciI detail as the Bank may reasonably request.

IV. COST ESTIMATES AND FINANCIAL ARRANGEMéENTS

A. Cost Estimates

4.01 Project costs over the developmentperiod 1974-80 are detailed at Annex 7, and summarized below: - 15 -

CFAF Million US$ Million Foreign Local Foreign Total Local Foreign Total Excang

SODECAO

(a) AdministrativeStaff 1,026 - 1,026 4.10 44.10 - (b) Expatriate Salaries 43 129 172 0.17 0.52 0.69 75 (c) Buildings (Sector Office) 80 23 103 0.32 0.09 0.41 23 (d) Vehicles and Equipment 9 83 92 0.04 0.33 0.37 90 (e) Collection Centers 61 15 76 0.24 0.06 0.30 20 (f) Operation and Maintenance 187 130 317 0.75 0.52 1.27 41 (g) Road Program 315 229 544 1.26 0.92 2.18 42

Sub-Total 1,721 609 2,330 6.88 2.44 9.32 26

TRAINING 274. 135 409 1.09 0.5h 1.64 33

PEST CONTROL 283 213 496 1.13 0.85 1.98 43

RESEARCHAND STUDIES 83 331 414 0.34 1.32 1.66 80

ON-FARMSINPUTS (Incremental)

(a) New Planting Material Insecticides 64 127 192 0.26 0.51 0.77 66 (b) SinallFarm Equiprnent 32 43 80 0.13 0.19 0.32 60 (c) Spraying and Fungicides 65 195 260 0.26 0.78 1.04 75

Total before contingencies 2,523 1,658 4h181 10.09 6.63 16.73 40

Physical Contirgencies 49 60 109 0.21 0.24 0.45 55 Price Contingencies 991 660 1,651 3.96 2.6h 6.60 hO

Total Project Costs 3563 26 9.51 23.78 40 - 16 -

4.02 The estimates are based on prices ruling at January 1, 1974. They include indirect taxes, amounting to about 5% of the total, but exclude customs duties which have been waived by Government. Cost estimates include:

(a) a 5% physical contingency on investment costs for buildings, equipment, vehicles, operation and maintenance costs and on-farm costs during the six-year disbursement period;

(b) price contingencies: (i) for equipment, 14% in 1974; 11% in 1975; and 7.5% compounded annually from 1976 to 1980; (ii) for civil works, 18% in 1974; 15% in 1975; and 12%.compounded annually from 1976 to 1980; (iii) for all other foreign costs, the expected international inflation rate, i.e., 14% in 1974; 11% in 1975 and 7.5%O compounded annually from 1976 to 1980; and (iv) for all local costs the expected national inflation rate, i.e., 10%'in 1974; 9.5% in 1975; 8.5% in 1976 and 8% compounded annually from 1977 to 1980.

B. Financial Arrangements

4.03 The project financing plan, which was discussed during appraisal with Government and representatives of the French agencies and FAC and CCCE, is summarized in the following table: - 17 -

------US$ Million ------

French Project Costs IBRD Assistance Governient Farmers Total

I. SODECAO

Ca) AdministrativeStaff) 2.78 - 2.01 ( 4.79 (b) Expatriate Selaries ) ( (c) Buildings O.41 0.41 (d) Vehicles & Equipment 0.33 0.04 0.37 (e) CollectionCenters 0.26 0.04 0.30 (f) Operation and Maintenance 1.27 1.27 (g) Road Program

Personnel 0.25 0.29 0.54 Vehicles and 3quipment 0.61 0.08 0.69 Operating and Maintenance 0.44 0.51 0.95

3l. TRAINING 1.64 1.64

Il!. PEST CONTROL o.65 1.33 1.98`

1V. RESEARCH AND STUDIES 1.66 1.66

V. ON-FARi4INPUTS

(a) Planting Material .4Insecticides 0.77 0.77 (b) Small Farm Equipment 0.32 0.32 (c) Sprayers & Fungicides 0.78 0.14 0.12 1.04

Sub-Total 4.50 4.64 7.11 0.49 16.73 Unallocated 2.00 1.86 2.97 0.21 7.05

Total 6.50 6.50 10.08 0.70 23.78

Percent 27 27 42 4 100 - 18 -

4.04 The Bank would make a loan of US$6.5 million to Government for a term of 20 years including a six-year grace period. This loan, together with the financingexpected from French bilateral sources would cover the foreign exchange cost of the project (about US$9.5 million), and US$3.5 million equivalent of local currency expenditures. The proposed Bank loan, in parti- cular, would cover the foreign exchange costs of the items financed and the balance of US$2.2 million, 48% of the local cost. With respect to the Bank loan, it is proposed that some US$150,000 of the proceeds of the loan be used to finance, retroactively,the cost of expatriatesalaries and other items, incurred before signing.

4.05 The terms and conditionsof the finance to be provided by the French agencies have not been finalized,but agreement has been reached in principle, providing for US$1 million equivalentas a grant by FAC and the remaining US$5.5 million equivalentas a loan by CCCE at 3-1/2% annual interest for 20 years, including a six-year grace period. A condition of loan effective- ness would be that the mentioned agreementshave been concluded and that any pre-conditionsfor initial disbursementsof such financinghave been fulfilled.

4.06 Governmentwould pass on to SODECAO, FONADER and DPR the proceeds of the Bank loan, together with the French funds and its own contributionto the project, in the form of a grant. The grants would be:

(a) CFAF 4,625 million (US$18.7million) (to SODECAO) to carry out the technical aspects of the project, including pest control. Another CFAF 750 million (US$3.0 million)would be passed through SODECAO to the Public Roads Department (PRD) for the road component.

(b) CFAF 350 million (US$1.4 million)(to FONADER throueh SODECAO) as a revolving fund to finance the credit program.

The balance, CFAF 225 million (US$0.7 million) represents farmers' contributions. These grants are justified. Governnent is expected to accumulate a surplus about 50% greater than the sum of the three grants when the project has come to its full developmentand therefore,on balance, the proposed grants would not cause a drain on 'Governmentfinances. The grants to SODECAO and PRD are justified on the grounds that neither of these agencies is intended to be a revenue earning enterpriseand the type of services they provide (tech- nical services and road constructionand maintenance,respectively) are normally financed by the state out of the general budget. The grant to FONADER would be an equity contribution,consistent with the well justified policy of Government to strengthen financially,as well as technically,the new agriculturalfinance agency on which it wishes to rely hereafter to provide the bulk of rural developmentcredit (para. 2.14).

4.07 Adequate deposits have been made by Government into the accounts of SODECAO and FONADER. - 19 -

C. Credit to Farmers and Farmer Groups

4.08 Until the precooperativesfunction independentlyFONADER would dele- gate to SODECAOthe responsibilityfor retailing credit to farmers under the project through SODECAO's sector offices. To that effect, FONADERwould make available the inputs required annually to SODECAOat an interest rate of 5%, and at terms similar to those of SODECAO's credit to farmers. A subsidiary loan agreement between FONADERand SODECAOwould specify these terms and con- ditions. The Bank has received assurances from Governnent that it would cause the subsidiaryloan agreement between FONADERand SODECAOto be satis- factory to the Bank; the conclusionof such agreementwould be a condition of loan effectiveness.

4.09 All credit would be given in kind (Annex 8). Credits to individual farmers would be for fungicides (100% of cost) and sprayers (80% of cost). The amount of credit would average about CFAF 4,600 annually for each farmer. Credit to farmer groups (para 3.26) would be for the materials and equipment needed to set up collection centers, and would average CFAF 380,000 per group. Credit for fungicides would be repayable from the proceeds of the following harvest; all other credit would be repayable over three years at maximum. Prices for items sold on credit would be about 20% higher than cash prices in order to cover financial and administrative costs as well as to make provision for bad debts. Farm budgets (Annex 9) have been made on the basis of credit purchases, and show that expected earnings should enable farmers to pay these prices without difficulty out of the incremental cash surplus that would accrue from their participation in the project.

4.10 Repaymentsof individual credits would be collectedby Sector Office staff at the time of produce sales at the collection centers and periodic markets. Repayment of group creditswould be collected at the Sector Offices by deduction from the marketing margins received in respect of the collection centers concerned (para 3.27).

D. Procurement

4.11 Items financed by the Bank Loan would be procured as follows: (i) one grader, thirteen passenger cars, and all two-wheeledvehicles have already been ordered with Bank approval through negotiated purchases on the basis of quotations from local suppliers,in order to facilitatethe start- up of the project. These amount to US$150,000and would be financed retro- actively; (ii) office furnitureand equipment,and small spare parts would be similarly procured; (iii) all other items, amounting to some US$3.5 mil- lion, would be procured in accordancewith Bank guidelines on the basis of internationalcompetitive bidding. Manufacturedgoods originating in UDEAC countries would be allowed a preference equal to the lower of (a) 15% or (b) applicableduties; (iv) the services of expatriatepersonnel and consult- ants would be secured according to procedures acceptableto the Bank. - 20 -

4.12 The French agencies would finance 100% of the cost of training,re- search and studies; 46% of the personneland operationsand maintenance costs of the road program; and 32% of the costs of pest control. The procurementof items for these activitieswould be subject to the proceduresof these agencies.

E. Disbursement

4.13 Proceeds of the Bank loan would be disbursed to cover:

(a) 58% of the cost of SODECAO'sadministrative staff (US$2.80million); (b) 100% of foreign expendituresor 90% of local expenditures on vehicles and equipmentfor SODECAO administrativestaff and for road constructionequipment for DPR (US$0.94 million); and (c) 100% of foreign expenditureson sprayers and fungicides (US$0.78million). Ile balance of US$2.00 million representscontingencies, which would be unallocated. A schedule of estimateddisbursements is shown at Annex 9.

V. PRODUCTION,PRICES, MARKETINGAND FINANCIALRESULTS

A. Production

5.01 Under the project 35,000 ha of existing cocoa would be rehabilitated by an intensifiedand more effective control of capsid pest and black pod disease. Annual yields are expected to increase from the present 300 kg/ha to 500 kg/ha after two years of spraying. The 15,000 ha to be newly planted are estimated to yield an average of 150 kg/ha in the fourth year rising to 800 kg/ha in the tenth year after planting thereafterremaining at that level for 20 years. Tlese yields are considered relativelyconservative since the yield potentialsof the existing and new hybrid varieties,under normal good husbandrywould be of the order of 1,000 kg/ha and 1,500 kg/ha, respectively. At full developmentin 1988/89, it is estimated that the project would produce an increment of 15,400 tons of dry beans annually (Annex 10).

B. Markets and Prices

5.02 The world market price for cocoa is described in "The World Cocoa Market: Review and Outlook for Bank Lending" - February 23, 1974. World cocoa production is highly cyclical: there were short supplies and high prices in the 1950s and abundant supplies and low prices during the 1960s; - 21 -

current markets again feature short supplies and high prices. During 1973 prices climbed to over USé8O/lb, compared with a low of USt17/lb in 1965. Growing conditionsin West Africa have been generally poor in the last three years, and this has intensified the supply-depressingimpact of limited in- vestment and abandonmentof low yielding orchards following the low cocoa prices during the 1960s.

5.03 The average world cocoa price during 1973 was USt65/lb. Current Bank forecastsare that supply and demand will both grow at about 3% per annum. Supply forecasts take into account expected production from ongoing and planned projects, including the present one; on the basis of these fore- casts a 1980 price of about USt47/kg, in average 1973-74 prices, has been used in the economic and financial analyses in this report.

5.04 An InternationalCocoa Agreement (ICA) came into effect in mid-1973, covering three quota years to 1975/76. The purpose of ICA is to stabilize prices in the 23-32 USe/lb range, through export quotas and buffer stocks. Of the basic 1973/74 quota of 1.51 million tons, Cameroon has been allocated 129,000 tons, well above the average production of 110,000 tons during the past three years. In view of current and expected price levels, it is unlike- ly that ICA will exert any significant constrainton cocoa production and exports in the medium term. It seems reasonable to conclude that Cameroon's market prospects are firm at least through 1980, and no difficulties are anticipated in selling the project's output.

C. Farmers' Benefits

5.05 Model farm budgets are presented at Annex 11. They are based on the following assumptions:

(a) 100% credit for fungicides and 80% for sprayers at prices 20% higher than cash prices (para 4.09); and

(b) production of 90% Grade I and 10% off-grade cocoa, at producer prices of CFAF 100/kg and CFAF 65/kg, respectively (actual 1973-74 campaign prices);

(c) yield as specified above (para 5.01);

(d) grants for seeds, bags, and other nursery materials for farmers undertakingnew planting.

5.06 Three types of farmers can be considered. Model A is a farmer with 1.2 ha of mature cocoa which is maintained in the traditionalmanner with either inefficientpest and disease control or none at all, and who rehabil- itates his farm under the project and continues efficientpest and disease - 22 - control thereafter. Model B is a farmer similar to Model A but who, were the project not to be implemented,would plant an additional0.6 ha in the tradi- tional manner, but with improved planting material. With the Project, and through the services it would provide, the Model B farmer is exDected to re- habilitatehis mature cocoa, and in addition plant more cocoa than he other- wise would (0.75 ha instead of 0.6 ha), using not only improved planting material but improved techniquesas well. The Model C farmer is a young member of the family of existing farmerswho would plant cocoa for the first time under the stimulus of the project. Tne 'ModelB comparisonhas been developedon the grounds that some new cocoa planting would take place without the project, and that it would be incorrect to assume that the production of sucliplantings would be a project benefit. The three models are summarized below:

Iloodel Without Project With Project

Existing farmer A 1.2 ha unrehabilitated 1.2 ha rehabilitatedonly Existing farmer B 1.2 ha unrehabilitatedplus 1.2 ha rehabilitatedplus 0.6 ha new planting 0.75 ha new planting New farmer C 1.5 ha new planting only

For existing farmers, net revenues from cocoa are expected to increase by about 70%, reaching CFAF 52,000 (US$208) for Model A and CFAF 106,000 (US$424) for MlodelB. Mandays of labor roughly increase in the same proportion as net revenues, and thus the return per manday employed would be about CFAF 490 with the project, only slightly more than the CFAF 450 without the project. The new rate is almost double the going agriculturalwage rate of CFAF 250/day. For new planters, net revenues of about CFAF 105,000 (US$420) are expected at full development,equivalent to CFAF 515/mandayemployed. New planters would sus- tain thenselves and meet the small cash expenditures required until their plantings became productive by growing their own food crops and/or working on their parents' farm.

D. Government Revenues

5.07 Governmentwould derive revenues from taxes and StabilizationFund surpluseson incrementalproject production. Taxes consist mainly of export levies, at a rate of 27.25% on an arbitraryvalue of CFAF 125/kg, or CFAF 34/kg. On nonexport cocoa, sold for domestic processing, the tax rate is 45% of the export levy, or CFAF 15/kg. The StabilizationFund benefits from cocoa export revenues whenever world market prices exceed guaranteed producer prices plus export costs. At the assumed world price of USt47/lb (CFAF 260/kg), and a producer price of CFAF 100/kg for export grade cocoa, the Stabilization Fund's surplus would be about CFAF 75/kg. The Governmentcash flow (Annex 12) shows that Government.wouldhave a net inflow from PY 4 onwards, reaching CFAF 1.2 billion (US$4.8million) at full development (PY16). - 23 -

VI. ECONOMIC BENEFITS A1D JUSTIFICATION

6.01 The main economic benefit of the project would be an increase in cocoa production. The value of this incremental production is expected to reacliCFAF 1.3 billion (US$5.2million) in 1979/80, rising to CFAF 3.1 billion (US$12.4million) annually at full developmentby 1988/89. In this and sub- sequent years, about CFAF 1.6 billion (US$6.4million) would accrue annually to some 32,000 farm families (para 5.06), and CFAF 1.5 billion (US$6.0million) to Governmentin the form of export taxes and StabilizationFund surpluses. At full development,net foreign exchange earnings of about US$10 million are expected annually.

6.02 The economic rate of return (Annex 13) is estimated at 26 percent using market prices. Increases of 10 percent and 25 percent in costs (or similar reductionsin benefits) would reduce the rate of return to, respec- tively, 23 percent and 19 percent; a 25 percent increase in costs together with a 25 percent reductionin benefits would lower the rate to 12 percent.

6.03 Since total control of black pod is very difficult to achieve, the effect of a serious shortfall from project targets for this component of the project has been calculated. This shows that if only about one third of the expected benefits from rehabilitationwere obtained, the rate of return for the project would still be 10 percent. Tle risk of such a shortfall is con- sidered to be small, particular1Wrsince the average increases on yields have been conservativelyestimated.

6.04 The rate of return has been conservativelycalculated in otiierre- spects, since the project has been charged with the entire cost of:

(a) the rehabilitationof rural roads, while no account has been taken of the benefits accruing to nonproject activities,such as food crop and general goods marketing and nonprojectcocoa marketing; and

(b) the research and studies, althoughlbenefits from these activitieswould accrue to subsequentdevelopment.

Excluding the cost of these components, the economic rate of return would be 35,'.

6.05 Rates of return have been calculated for the rehabilitation and new plantings components separately, althouglh allocation of project agency costs is necessarilyarbitrary. The rates are 32% for rehabilitationand 20% for new plantings.

6.06 As indicated above (para 6.01), farmers and Governnentwill share about equally in expected benefits. Tne large Government share is considered to be justified, as it would be an important source of funds for programs to - 24 - help rural people in less favorably endowed regions, particularlyin the North. Tle improvementof agriculturalinstitutions, training of local technicians in advanced cocoa technologyand extension,and encouragementof farmers associationswould permit an expansion of the project concept throughout the cocoa growing area.

VII. RECOMIENDATIONS

7.01 During negotiations assurances were obtained on the following principal points:

(a) in the event that producer prices were to jeopardize the project, consultationson this subject would be held between Governmentand the Bank (para 2.19);

(b) with regard to road imorovements (para 3.16):

(i) an annual program of project road improvement would be agreed with the Bank;

(ii) all equipment purchased under the project's road program would be used and retained in the project area; and

(iii) the project's roads would be adequatelymaintained after the project has been completed.

(c) members of precooperativeswould receive a year-end bonus to provide incentives to farmers to join the precooperatives (para 3.27);

(d) Governmentwould exempt all project items financed through the Bank loan from import duties (para 4.02).

(e) Governmentwould cause the subsidiary loan agreement between FONADER and SODECAO to be satisfactoryto the Bank (para 4.08).

7.02 Assuranceswere also obtained from SODECAO that:

(a) no later tian six months after credit effectiveness,SODECAO should have ready a comDrehensivetraining program including details of the curricula,phasing of courses, staffing requirementsand budget (para 3.13);

(b) appointmentof internationallyrecruited personnelwould be on qualifications,experience and terms acceptable to the Bank (para 3.22); - 25 -

(c) Camerooniancounterpart personnel would be appointed to the internationallyrecruited experts not later than three months after commencementof the latter's employmentwith SODECAO, and be trained to take over in accordancewith arrangements satisfactory to the Bank (para 3.23);

(d) consultingservices would be engaged, on terms acceptable to the Bank, to outline and phase an integrationprogram for the areas under ZAPI jurisdiction;and that this program would be presented to the Bank not later than six months after loan effectiveness (para 3.24);

(e) consultantswould be employed to carry out studies of the project's impact, and a feasibilitystudy for a follow-up project, which would start in 1977/78, under terms and conditions acceptable to the Bank (para 3.25).

7.03 Conditions of effectivenessof the loan would be that:

(a) Governnent had appointed a chief accountant (para 3.22);

(b) the supplementalFAC Agreement and supplementalCaisse Centrale Agreement have been validly concluded and the conditions precedent, if any, to initial disbursements under said agreementshave been fulfilled (para 4.05);

(c) Governmenthad made the initial deposits into the accounts of SODECAO and FONADER of CFAF 100 million (US$0.40 million) and CFAF 50 million (US$0.20million), respectively(para 4.07); and

(d) the subsidiary loan agreementbetween FONADER and SODECAO had been concluded (para 4.08).

7.04 The project is suitable for a Bank loan of US$6.50 million.

ANNEX1 Page 1

CAMEROON

OOGOAPROJECT PEST AND DISASE CONTRDI

A. Fe&t Control

Introduction

1. Capside damaging the côcoa is the only pest that needs to be controlled. Since 1962 a special agency (LPAC)V/ of the Department of Agriculture is respon- sible for the control of capsids. The organization is based at Nkôloisson (Yaounde) where offices, stores and garages are located. LPAC has besides a ner- manent staff of clerkse, drivers and mechanics, alo temporary personnel during the spraying season. It orns a fleet of 50 vehicles for the transport of spraying equipment, materials and mechanics. The activities are paid for by the Caisse de Stabilization. In capside control the following procedures is used.

Estimation of Caosid Population

2. In different parts of the cocoa zone, insect populations are estimated on representative cocoa famis which are selected at random. When the capsid noiulation exceeds 0.7 adult per tree, the test result is considered Dositive and spraying is required. Based on these test results, an operation plan is made and naterials and equipment are sent to areas to be treated. At present, insect counts are made at a density of one per 3,000 ha.

Insect Treatment

3. The spraying is carried out by groups of farmers with the assistance of LPAÛmechanices. The best spraying neriod is between July and October when the insect population starts to build up. Tvo soraying rounds at an interval of 25 to 35 days are needed. In the first treatment, adults and larvae are killed and in the second one the young insects, which bj then have eierged from the eggs that were not affected by the previous spraying. It is estimated that at present about 50% of the cocoa area is annually sprayed by VIAC. A centrally organized capsid control is necessary because spraying by individual farmers will be ineffective when neighboring fanms are not treated simultaneously. However, the drawback of centra1ly spraying programs îs that, when the organization is too big, soraying programs are carried out too late, areas zre sprayed where test result3 were negativ%e, and supervision is difficult. This general. experience apolies also to rLPACe which is too big to work effectively.

Capsid Control under the Projoct

4. Under the project the LPAC orgarkization wîll be decentralized. '?ach sector will have its ovn spraying unit, while two sectors wili have one team to estimate capsid populations. To achieve this the following orocedure le proposed. When a sector is placed under SODECAOthis authority beoemes resDonsibie for the capsid

1/ Lutte Phyto Sanitaire et anti-Capside ANNEX1 Page 2

CU4-lIriLin all cocoa farms in that sector. The sector level spraying unit will lrive ite own transport and mist blowers. The transport consists of one 3.5 ton truck; dur.ng the three months' spraying campaign, the truck of the sector office can aiso be used. In addition, the large sectors like Mengueme and Zoetele can obtain a 3 ton truck from the car pool of SODECAO. There will be one mist blower per 250 ha of cocoa to be sprayed ainually. These mist blowers can spray 3 ha/hour; and when they are used effectively2.5 - 3.0 hours a day, an area of about 250 ha can be sprayedin 30 days. When the first spraying round is completed the second one should start immediately. The personnel consists of a driver and one mechanie per five mist blowers;the technicalofficer of the sector office is responsiblefor tne operation of this team. Âs in the present situation,LPAC transportwill bring the mechanics with their equipmentand insecticidesto the farms while the sprayingitaelf is carried out by groups of farmers.

5. A "testing" team consists of one team leader, one drivEr and six laborers. The team has one four-wheeldrive truck and two hand spraying pumps. Trees in small areas (not exceeding0.25 ha) are snrayed in selected farms; then the dead inseets, collectedon sheets underneaththe trees, are counted. Based on the resultsof these counts, a decision is made whether or not the area should be sprayed against capsid. One team can do four test a week, meaning that in tha 10 weeks preceding the capsid spraying season 40 tests can be made (per team). In areas varying in size from 20,000 ha to 30,000 ha, insect counts can be madezat a density of one count per 500 - 600 ha. When capsid damage is observed, in areas which are not scheduled to be sprayed (based on capsid counts), farmers concernedwill perform spraying on an individualbasis.

B. Disease Control

Introduction

6. The first black pod control scheme was financed by USAID and carried out in 10 zones of 500 ha each, with only selectedfarmers and extension staff parti- cipating. Results were satisfactory, and in treated farms yieids of 800 to 1,200 kg/dry beans/ha were obtained.

7. In the period 1967-70 a FAC-financedcampaign was carried out in 8,50o ha of cocoa. Under this scheme fungicides and spraying equipment were made avail- able on credit at subsidized prices. Results of this camnaign indicated that farmers were able to protect their crop effectively by the use of fungicides and that credit could be readily recovered where enough extension staff and good marketing facilities existed. It was, however, observed that in the course of the program the fungicide consumrption went down, the main reasons being that the price margin between Grade 1 and "hors standard" cocoa was too narrow to encourage farmers to carry out a full spraying program. b. At present a scheme of the Departmentof Agricultureis in operationwhich gives fungicides and spraying machines on credit to groups of farmers. The credits for fungicides have to be reimbursed annually and the credit for the spraying equip- ment over a two-year period. It is thought that improved black-pod control, despite the shortcomings of the varîous schemes, has largely contributed to the 20,000 tons increase in cocoa productionobserved over the four year Deriod 1966/67 to 1970/71. ANNEX1 Page 3

9. Thder the project, control of black-pod disease would be a major activity of tbe extension service. Since black-pod control is an individual exercise, it is the extensionworker vho has to convince the farmer that he should spray correctly. `ICorrecty"II means mainly that five to six sprayingsare also necessary in the rainy seasori,apart of the six sprayingsin the dry season. Significantre3ults can be obtained only if a full spraying program is carriedout. In addition to a conviction that a full spraying program is necessary, the farmer should be able to have the fungicideson time and his sprayer in working condition. Hence, the supply of fung- îcides and spare parts for the sprayers is critical; the organizationshould be such that the farmer should be able to obtain the necessarymeans for black-pod control at the collectioncenter where he sells his produce.

CAMEROON

COCOA PROJECT

FIELD DEVELOPMIENTS

Number of Farmers and Corresponding Areas -

Year Number of Farmers Entering the Project for: Corresponding Areas (ha) Entering the Project

Rehabilitation Rehabilitation 2/ New Plantings 3/ Total Rehabilitation New Plantings Total Area only and only New Plantings

1974-75 _ 5,000 600 5,600 6,000 - 6,000

1975-76 - 6,500 600 7,100 7,000 1,550 8,550

1976-77 1,500 4,500 800 6,800 7,000 3,475 10,475 1977-78 6,000 - - 6,000 7,000 5,000 12,000

1978-79 6,500 _ 6,500 8,000 3,450 11,450 1979-80 _- - - 1,525 1,525

Totels 14,000 16,000 2,000 32,000 35,000 15,000 50,000 x

1/ All figures are rounded off. 2/ Total area per farm = 1.2 harehabilitation+ 0.75 ha Qf nfw plAntings.The new plantings to be carried out in three years: 0.25 ha/year. 3/,' Total area per farm = 1.5 ha. To be planted in three years: 0.5 ha/year. CAMEROON

COCOA PROJECT

FIELD DEVELOPMENTS

Establishment of New Plantings year of . _ _ entrance number of persons enter- area (ha) to be planted in: in project ing the project

Existing New farmers farmers 1975-76 1976-77 1977-78 1978-79 1979-80

1974-75 5,000 _ 1,250 1,250 1,250 - -

1975-76 6,500 - 1,625 1,625 1,625 -

1976-77 4,500 - - 1,125 1,125 1,125

subtotal 1,250 2,875 4,000 2,750 1,125

1974-75 _ 600 300 300 300 - _

1975-76 _ 6°° - 300 300 300 -

1976-77 800 - - 400 400 400

subtotal 300 600 1,000 700 400

Total 16,000 2,000 1,550 3,475 5,000 3,450 1,525

Cr1 CAMEROON COCOAPROJECT FAR LADOR Available Labor (per average famiXy) for Cocoa Cultivation in Pro.ject Area (Mandays) ------MonthS------District Total S.O.N.D. J F M A MY J Jy Au Menguém6é hlO 218 24 2h 24 24 2h 24 2h 24

MLou 511 271 30 30 30 30 30 30 30 30 Ngoumou 368 192 22 22 22 22 22 22 22 22 Nyong and Kellé 544 2&8 32 32 32 32 32 32 32 32 Zoétélé 478 251h 28 28 28 28 28 28 28 28 Ndom 41i 218 24 214 24 24 24 2h 24 24

t>Cr CAMEROON COOOA PJ4DJECT FAHU LAEOR

Labor per ha of newly planted Cocoa (mandays)

Year Items Total Sept. oct. Nov. Dec. Jan. Feb. Mar. Apr. May June JulY Aug.

1 Nursery 48 18 5 5 5 5 5 5

Clearing 84 28 28

Lining & brushing 20 20

Holing & planting 40 20 20

Maintenance 20 20 212 18 5 5 33 33 33 25 20 20 20

2 Maintenance 48 12 12 12 12 Filling in 6 6

Shade managesent 15 5 5 5

Insect control 8 2 2 2 2 77 18 2 12 2 17 5 7 12 2

3 Maintenance 48 12 12 12 12

Shade management 15 5 5 5

Insect control il 2 2 2 3 2 74 12 2 12 2 17 5 7 12 3 2

10 Maintenance, insect control 21 7 2 7 3 2

Black pod control 35 10 10 7 8

O Harvesting, yield processing 1/ 80 10 30 30 10

136 27 40 30 10 2 7 7 8 3 2 H>

1/ Based on yield of 800 kg dry beans/ha CAMROON COOOAP1DJECT FAR( LAER

Labor Requirements for Cocoa Cultivation (Mandays)

-.-______------Months ------

1.2 ha Rehabilitatifn and 0.75 ha New Plantings

1.2 ha rehabilitation campleted Y1115 86 _ 2 7 - 7 8 3 2

0.25 ha year 1 52 15 8 8 ( 5 5 5 - -

" " " 2 19 8 - - 4 1 2 3 - 1 " " "3 19 7 - - 4 1 2 3 1 1

Total 20E 11 8 10 21 7 16 20 4 4

1.2 ha rehabilitation completed 1115 86 - 2 7 - 7 8 3 2

0.75 ha in full production / 103 R1 _ 2 5 - ; 2 2

Total 218 167 - 4 12 _ 12 1h 5 4

1/ Yield 500 kg dry beans/ha. 2/ "n 800 " " " ,,

>f! a ANNEX 4 Table 1

CAMOON COCOA PLDJECT

Improvementand Maintenanceof Rural Roads List of Roads

Km Pirst Priority

1 OssoessamMinlaba Mfida 22

2 NgodmedzapNkolmeyang 14

3 Akongo II OssoessamBikoko 12

4 EndengueNkout 14

5 Nkout Ngoumou 8

6 Mfou Nkllzok I 7

7 Nkilzok II Mbanga 16

8 Nkilzok I Ekombitie 23

9 Nkilzok I Nsimalen 9

10 FegminbangZoaseel Ngoumou I 28 il Mgoumou I Ebang 5

12 Ebang Bikok 10

13 Bikok Nkongnen 18

1h Otele Nkoulmakong Koali Oveng 29

15 Otele Bilik Nkolnlong III 25

16 Nkongnen Xvindisst Andok 24

17 Ebolowa Ntoum Ba 26

18 Nkolbang Zoetele 12

19 Zoetele Nkoudmadjap Nkolfong 18

2Q Nyaho Pentome Nyanon Likoundbian 50

370 ANNEZ4 Table 1 (cont.)

Second Priority Km

i EkoudendiAssie Bilon Ossoessam* 35

2 Nbabewa Akongo III 19

3 Meadan Endengue Sep Akoeman * Akom Ngourema Kong 65

4 Mfou Ngang Ovam Ekom 21

5 Ngombas I BakoukoueLeplibong Nkolnlong III 16

6 Nom I Sep Ngoungou Mbeng Nkolnlong III 18

7 Bot Makak Nkongngok So Makay Etale Nkolekotoing Mabobol Elekoum 77

8 Bot Nak Egba Nkolekotsing 37

9 Egba Elekoum Lobo Mefomo 39

10 NgoulemikonglEsingang Btwong Bane * 38

1il EssingangMekamba Minlaba * 12

12 Biwong Bane Melangue I * 16

13 Biwong Bane Minkam Nkongnen Nkolmeyang * ) Melangue I Ngalan ) 37 Minkam Atinezam Elon )

14 Meyiboto Ebotenkou Elon Ngoulemakong 62

15 Nkolfong Oveng * 9

16 Zoetele Ebamina Nkilzok Ndele Zoetele 49

17 Nyabo Bodi Knom 30

580

* Roadt which vere improved by the StabilizationFunds. Source: Consultant's report. ANNEX5 Page 1

CAMEROON

COCOAPROJECT

Research

Cocoa Program

1. Consideringthat the secondphase of the project will be extended to densely populated areas, much of the new cocoawill be plantedeither on land cleared from cocoa (replanting),on land under bush fallow,or in betweenexisting cocoa (interplanting).When forestland is still available,cocoa will be establishedin combination with food crops, this being a common practice. The problemscon;iected with these various types of establishment have to be studies. The use of !ertilizers should also be studied because, after the black-pod problem has been solved, the next facto 1/lJJting cocoa production (especially in replanting) is the low soil fertility.- The factor shade has also to be taken4into consideration: firstly, becauEe of the interaction between effects of shade and fertilizers; and secondly, because the question of whether or not densely-spaced hybrid cocoa needs permanent shade has not been solved. The experimental program is schematically presented in Table 1. 2. All trials are multilocal and vill be laid down on farmers' land. One or t.wofactorial fertilizer experimentals will be included in the program to obtain detailed information on fertilizer requirements. In view of predominant importance of black-pod disease, too little attention has so far been paid to soil fertility. The program will be carried out by IFCC under a special agreement with SODECAO. The Production Director of the project will be responsible for the liaison between SODECAand IFCC.

Food Crop Program

3. The Cameroonian cocoa farmer always grows food crops in addition to cocoa. These food cropsare almostexclusively used for home consumption;only near the large cities,like Yaounde,are food crops also grown for the market. Food crop production takes place in the extensivemanner of shiftingcultivation. Land is cleared from forest and food crops are grown for two or three years. Then, as fertility becomes depleted and pest and disease incidence increases, the site is abandoned and a new clearing is made at a different location. This method is waste- ful with respectto land, time and labor. 4. mheproposed research program is aimed at studyingthe possibilitiesof modernizingfood crop productionso that more food crops can be grown on less land and with less labor,so that more familylabor can be devotedto cocoa cultivation. So far no researchhas been undertakenon food cropproduction in the cocoazone of Cameroon.

1/ Moreover, the high yielding hybrid varieties will have a higher demand for nutrients than the traditional cocoa. ANNEX5 Page 2

5. The program will concentrate on:

I. Improvement of planting materials and cultivation methods.

(a) Collection,selection and comparison of clones (plantains, cocoa yams, yams and cassava);

(b) multiplicationand cultivationtechnique of tuber crops;

(c) testing of maize and grouadnutvarieties, selected elsewhere under conditions of the forest zone. Improvementsof culti- vation methods (sowing dates, densities, crop protection, storage).

II. Fertilizer use for food crops grown as monoculturesor in association with other food crops or cocoa on different soil types.

III. Study of production systems (technicaland socioeconomicalaspects).

The program will be carried out by IRAT under a special agreementwith SODECAO. IRAT will also contribute to the food crop aspect of the cocoa research program. As far as possible, IRAT will nake use of the results obtained by IITA Ibadan (Nigeria) and of those obtained elsewhere in West Africa, under comparable conditions. CAMEROON

C CO, PROJECT

Research Prozram For Go-p

Experiment Wfthout Permanent Shade With Permanent Shade Plot Size No. of Total Without With Without With (ha) replicates Area fertilizer ferti;lizer fertilizer fertilizer

Planting Cocoa on land previously Coeoa, replanting + + + + 0.25 24 cropped with: ,__

Cocoa, interplanting _ _ + + 0.25 24 72

Food crops followed by bush fallow, New planting + + + + 0.25 24

Planting COcOa on land cleared Cocoa, plantain and grounoanuts + + 0.25 12 18 from forests combined wtth food crops Cocoa. plantain, groundnuts and + + 0.25 12 cacao vams _ ._ .

Cocoa, 'lants;n, oro,iwinlltq .md Mai?e + 0.25 12

Interplanting of widely spaced young cocoa with new hybrids (observation plots) 0.5 6 3

NPKCaMg Factorial fertilizer experiments 7

AN%TEX6 ?'axe 1

CAMEROON

COCOA °ROJECT

Marketing

Introduction

1. Cameroon has two marketing systems for cocoa which are basically different- in the Fnglish-sDeakingpart of Cameroon, a marketing board buys and exports cocoa under monopoly; in the French-speakingpart, an autonomousagency, the Caisse de Stabilisation,controls (inefficiently)the transactionsof private dealers and exporters. Since the project area is in the francophonepart of Cameroon, the marketing board is not discussed here. There exist in the francophone'art two systems which might be called the conventionalmarketing system, and modificationsto this conven- tional system in the part of the project area presently served by ZAPI. A marketing system is proposed under the project which is somewhat different from these existing systems. These marketing systems are schematicallycompared in Table I.

The Conventional Marketing System

2. Theoretically,the farmers bring their cocoa to a market which is periodi- cally held as determinedby the administration. The cocoa is graded into Grade I, Grade II or off-gradeby Caisse de Stabilisationrepresentatives, according to the number of defective cocoa beans in samDles taken. Dealers, who work in turn for licenced exzorters,weigh the cocoa and oay the Government guaranteedorice, which was fixed at the beginning of the harvest season by the "Caisse". In 1973/74, the guaranteed price was CFAF 100/kg for Grade I, CFAF 75/kg for Grade II, and CFAF 65/kg for off-grade.

3. Each licenced exporter has an alloted export quota (tonnage). The exporter arranges transport to Douala and Kribi, presents his consignments for quality in- spection and weighing, conditions beans where necessary, and arranges for shipment. He is free to export his quota on the world market through his own channels;but the Caisse has power to sell on its own account -partof the cocoa held by the exporter. The exporter is allowed a predeterminedhandling charge and commission. He either pays to or receives from the Caisse the differencebetween the market price obtained and that paid to farmers.

4. Only Grade I is exported. A local plant buys Grade II and off-gradeat Grade I Sarket price and processes it into products such as cocoa butter, cake or paste. The plant receives a reimbursement fixed by decree from the Caisse and the exporters.

5. This marketing system has many loopholes, and only the two major ones are mentioned here. On the periodical market, the most serious loophole is that the farmerts cocoa may be undergraded and underweighted dué to "good cooperation" between graders, dealers and administrative representatives. The second loophole is that many dealers go directly to the farmers' homes to buy cocoa, out of reach of any A.NNEX6 %age 2

official control, and these dealers often make farmers dependent on them by providing credit during the lax period of the year or giving small "presents". To eliminate such dependence, the Government started some quasi=cooperative movements under the ZAPI and later on under OENADECwhich ooerates outside the project area.

Marketing in the ZAPI Area

6. The ZAPI, which started operations in 1967 and gradually extended its area of responsibility,brought forward the followingmajor changes of cocoa marketing in its area:

(i) organized farmers into groups, a representativeof which whould weigh the cocoa during the sale;

(ii) imposed a cocoa sales monopoly on its area; and

(iii) attemptedto buy all cocoa produced in the project area.

As a result of their participationin the sales process, the farmersin general have been more accurately reimbursed than before. However, since the ZAPI retained the dealertsmark-up to finance its marketing and production activities,the position of the farmer has not been substantiallyimproved. Also the establishmentof the sales monopoly created discontent among farmers, particularly since the ZAPI initially had difficulties in obtaining campaign credits and consequently could not pay farmers on time. Moreover, the ZAPI's marketing activities seem to have been at times some- what inefficient.

7. For the 1973/74 campaign, the ZAPI obtainedexporter status and since other exportersare expatriates,became the first entirely Camerooniancocoa exporter.

Proposed Marketing

8. The project wiould attempt to foster a cooperative movement in the project area, by supportingexisting movements in the ZAPI part of the project area and by starting such movements in the other part of the project area. The marketing system proposed is a modification of the system pract1-cedin the ZAPI area and has been tried out with reasonable success by CENADECoutside the project area. The major features of the proposed marketing system are:

(i) eliminationof the dealer in the conventionalchain of farmer-dealer- exporter, by extending the farmerls and exporter's marketing functions, and providing guidance and coordination of marketing activities by SODECAO;

(ii) farmer's participation in transport to grouping center, grading, weighing and storage of his cocoa;

(iii) improved remunerationof the farmer by paying him the dealer's farmer margin, in recognition of his extended responsibilities,after dedaction of SODECA's costs for guidance and coordination;and ANNEX 6 nage 3

(iv) the monopolyin the ZAPI projectarea would be maintained,but in the non-ZAPIproject area there would be no initialsales monopoly (which, however,may be institutedat a later date).

9. The institutionalarrangement would be as follows. First,100-15O'farmers would form groups,so that:

(a) the maximal distance of each farmer from the groupingcenter is 4-5 km; and

(b) the minimum quantity sold during each marketing is h-5 tons; each farmers, group elects a management committee consisting of five members, and the members of the management committee would be trained for about one week in the administration of a farmer group.

Second, about 30-50 farmer groups would constitute a DrecooDerative (there would be six precooperatives);each cooperativewould have a board consistingof delegàtes from managementcommittees. Third, each precooperativewould sign a contractwitl an exporterwho would:

(i) make cash advancesto farmerswho have to pay schoolfees for their childrenjust beforeharvest;

(ii) providebags to the farmer; (iii) send a cashierwith adequatemoney to each marketheld at the grouping centers;and (iv) assuretransport of cocoa from the groupingcenter.

Fourth,the farmergroups would constructin each center cocoastorage facilities, and buy balances and manual transport of cocoa to the grouping center4

10. The actual sales operation would take place as follows. One or two days before the market, farmers bring their cocoa to the groupingcenter and, under the supervision of the management committee, pregrade and weigh their cocoa. The cocoa is then storedseparately for each farmerby grade. On the market day, a sales committee-- consistingof the exportertscashier, an officialgrader from the Caisse and a secretaryfrom the precooperative -- vertifiesthe work of the managementcoDi- mittee and pays the farmer the fixed guaranteedprice with funds providedby the exporter, after deduction of any debts of the farmer (the debt amount is paid directly to the secretaryof the precooperative).The sales documentsare centralizedat the precooperativecenter. The exporter takes further care of the cocoa transport from the groupingcenter, where some farmersmay help him (againstremuneration), load the cocoa on the trucks). The exporterpays the dealer'smargin -- consistilgof the intermediaryremuneration, the bonus for quantity,and the bonus for quality-- to the precooperative.The precooperativein turn distributes this amount to the farmers, after deductionof its own costs. ANNEX6 Page 4

11. The proposed marketing system has two clear advantages for the farmer: it gives him good control over the sale of his cocoa, and higher remuneration per kilo of cocoa. On the other hand, the farmer has to work more, to the extent that he has to,transport his cocoa to the grouping center, and he has to take part in the grading and weighing of his cocoa. It is expected that the higher remuneration will outweigh the additional work, and therefore the new system would constitute an important incentive for the farmer to join the project. CAMEIDON

COCOAPMJrECT NARMETD«

MARKET:TINGSYSTEMS IN RMNCOPHONECAC.EROON

COINvrErrIONAL Official Unofficial ZAPI CENADEC Project Transport to Marrket

1. Transport ta period- ical market farmer dealer Zapi/farmer farmer Same as in 2. Sale CENADEC, Pregrading farmer/manage- ment conmittee except: Representive of Grading CaisstabL/ dealer Caisstab Sales (C-aisstab Committee( Weighing dealer dealer farmers' repre- (Precooperative sentative ( Payment dealer dealer Zapi (Exporter Contro' representative - Sales Comnwittee Sales Committee of admini- stration

3. Monopoly Requested - Immedia.tely After three years 3. Maintenance of and Obtained monopoly sugges- ted in areas 4. Storage Facilities dealer/exporter dealer/ Zapi Farmer groups/ where monopoly belonging to exporter exporter presently exists. No monopoly in 5. Transport to nearest dealer/exporter dealer/ Zapi Exporter other areas. larger city & port exporter

6. Export exporter exporter Zapi Exporter

1/ Caisse de Stabilisation.

Ta-ble i CAMEIDON

OOCOAPDOJECT

PROJECT COSTS (CFAF'000)

PY 1 FI 2 PY 3 FT 4 PY 5 PF 6 197V75 1975/76 1976/77 1977/78 1978/79 1979/1980 Total I. MTTCAD a) Administrative Staff Headquarters 46,275 46,500 149,075 514,125 43,125 43,125 282,225 Sector Offices 28,400 56,800 85,200 85,200 85,200 85,200 426,000 Extension Services 16,077 39.011 63.120 71,220 71,220 57,360 318,008

Sub Total 90,752 142,311 197,395 210,545 199,545 185,685 1,026,233

b) Expatriate Salaries 51,248 43,735 43,735 19,312 14,050 - 172,080

c) Buildings (Sector Offices) 34,200 34,200 34,200 - - - 102,600

d) Vehicles and Equipaent Headquarters 14,150 1,750 1,750 9,650 1,750 1,750 30,800 Sector Offices 9,000 9,000 9,000 9,000 9,000 9,000 54,000 Extension Services 1,125 1.295 1,245 1,575 1,295 1.095 7.630 Sub Total 214,275 12,045 11,995 20,225 12,045 11,845 92,430

e) Collection Centers

Buildings 5,100 5,100 5,100 5,100 5,100 5,100 30,600 Vehicles and Equipment 7.500 7,500 7.500 7.500 7.500 7.500 45.000 Sub Total 12,600 12,600 12,600 12,600 12,600 12,600 75,600 r) Operation and Maintenance Headquarters 22,67h 22,636 24,186 22,155 22,155 17,340 131,147 Sector Offices 7,530 16,590 25,650 27,180 27,180 27,180 131,310 Extension Services 2,065 4,438 6,751 7,681 7,681 6,168 34,784 Collection Centers 750 1.755 2,760 3.765 4,770 5.775 19.575 Sub Total 33,019 45,419 59,348 60,781 61,786 56,463 316,816 g) Road Program Persornel 2,700 26,400 26,400 26,400 26,400 26,100 134,700 Vehicles and Equipnent 105,850 13,200 13,200 13,200 13,200 13,200 171,850 Operation and Maintenance 1.400 _47200 47.200 47.200 47,200 47200 237__400

Sub Total 109,950 86,8oo 86,800 86,800 86,800 86,800 543,950

II. TRAININGCENTERS

Personnel 49,907 45,485 48,585 13,850 13,850 13,850 185,527 Buildings 50,55D 18,100 18,100 - - - 86,750 Vehicles ard Equipmant 15,340 3,300 3,300 2,520 300 300 25,060 Operation and Maintenance 20,722 21,038 23.293 15,663 15,663 15,663 112.0042

Sub Total 136,519 87,923 93,278 32,033 29,813 29,813 409,379 III. PEST CONTNOL

Personnel 14,300 7,600 11,650 11,650 11,900 12,400 59,500 Vehicles and Equipment 36,482 50,725 78,188 72,735 76,227 87,926 402,283 Operation and Maintenance 2,300 4.600 6,900 6,900 6.900 6,900 34,500

Sub Total 43,082 62,925 96,738 91,285 95,027 107,226 496,283 IV. RESEARCHAND STUIIES 79,578 65,377 60,889 89,672 79,231 39,532 414,279 V, ONFANM INPUTS

New Planting Material and Insecticides 31,322 49,410 55,o60 30,008 18,595 7,270 191,665 Smll Farm Equipment 8,100 13,1450 16,0 16,000 16,500 10,000 80,050 Sprayen and Fingicides 41.680 51.960 49.460 _49.460 59,130 8.052 259.742

Sub Total 81,102 114,820 120,520 95,468 94,225 25,322 531,457

PROJECTCOST BEORE CONTINGENCIES 696,325 708,155 817,498 718,721 685,122 555,286 14,181,107

PHISICAL CONTINGENCIES 20,712 18,680 21,260 17,365 17,005 13,869 108,891

PRICŒCONTINGENCIES 100.998 177.23)4 282.444 324.193 380,999 385.577 1,651.445

TOTALCOST WITH CONTINGENCIES 818.035 904.069 1.121.202 1.060.279 1.083.126 954.732 5.922b.1413 EÇîcii3FPUF 888008801, Ttile 2 (Cr00 000)

FI F0Y PY3 F0 4 PY 5 PY 6 TOATi

A. Ii,o,Iooirtr,

M om0 11110 4,>tio 6,000 6,000 6,000 36,000 23,763 + Oqt.,lLo Pœroie ire t. toor 00.563 14,05(1 14,050 14,050 14,050 _ 2, 350 3 ,250 31,250 3,250 36,800 teoito, t., otputv Oroieto L Mtînoocer 2,350 2,350 3,250 3,250 13,50O Melktting/Crstitr 06r:ro,, 3,250 3, 2301 3,250 3,250 3,262 - - 36,030 + Sc,,t,,e Itcprc,tor 30,525 10,225 100525 Soniorjn.opoteolr - - - 3,250 3,250 3,250 9,750 Fn 12loto,,, fn,Dr 4,700 4,200 4, 4047,o 4,7D0 4 ,700 28,200 cqi,,r Occo,,ntect 03,160 13,160 13,160 - - - 39,480 * Clhino Scc tmtofit - - 2,350 3,250 3,250 3,250 12,100 0

csiO.>rr îo,e6reo,,g s v ,10t2 2,100 2,100 2,100 2,100 21,601 2 600 Cret rrcilleOcrolces 2,100 2,109 2,110 2,100 2,100 2,1D0 12 600 2,100 2,100 2,1on 2,100 2,100 2,10D 12,600 ",cî ntico Ocrvlccs 2,100 2,100 2,100 2,100 2,100 2,100 12,600

llcc otioe Dircrct:ory 1,40D 1,404 1,0 1,400 1,400 1,400 8,400 lplsecis 2,B00 22800 2,000 2,800 2,800 2,000 16,800 Office Forornnel 3,600 3,600 3,800 3,6 0 360 600 21 600 Oliver 2 025 2,250 2,b75 2.475 2 475 2,475 144175 Orde- o 750 750' 750 750 750 750 4,500 Qensonn2 Oor6cers 11,000 11,000 11,000 11,000 - - 44 D00 Ottlsîo,tn l'cnn 10,000 6,0D0 6,D0 - - - 22,000 +

Shet:t:.( I(t lI... dq9,ortcr,- 07,523 90.235 92,610 73.437 57,175 43,125 4b4,305

+ Pop., riot,, Silorlen

2, Sector 0141oC.t Cool CosOt Co- CCoti t- Co-

00048Rcr 4,200 8,400) 12,600 12,600 12,600 12,600 63,000 1'r,,,,lo,til

.lhlcf 2,800 S 600 8,400 S,4006,400 9.400 42,000 C s;ier~ 1,S00 3.000 44050 4,500 4,500 4,500 22,500 Orreelore ~~~~~~~~~~~1,5003,000 4,500 4,500 o>3ûo 4,500o 2,0 45,000 0714c Soifr 3,000 6,e00 0.000 0,000 0,000 0,000 1,350 2,700 4,050 4,050 4,050 4,050 20,250 SOC 000r 050 01.001, 500 1,500 7,500

S,bh,,t.,tl feoel,ec.rtn 14,850 29,700 44,550 44 ,550 44,550 44,550 222,750

Mfrkrirtlîg(Pr 1F.ceper o.tniveîis

2 800 5 600 8,400 8,400 8,400 8,400 42,000 C .i.f 0 elarcctI,op t 0cat . 4,500 90,DO 13,500 13,5`0 13,500 13,500 67,50D Sr,eekcopce 1,050~ ~~~~~~~~~210 3,1500 3,100 3,130 3,50 1,5 11,750 S rretoro 10750 0,500 2250 2,250 2,250 2,1250 OffIce e.t:ff 2,400 4,800 7,200 7,200 7,200 7,200 36,005 it6,,ece 1,250 2,500 3,750 3,750 3,750 3,750 18,750 0n,,,oOnieoît X`onilitt 8000 1.600 2,400 2,400 2,400 2,400 12,000

0,,40,ot:l fînkclîng 33,550 27,100 40,650 40,650 40,650 40,650 203,250

roti) Sctor, 26.400 56QQ 05.200 85,200 85.200 426,000

AgriLetlture,e Oooiofoscs 4.500 9,750 14,250 14,250 14,250 12,000 69,000

Elnotoooo 0tc=koeo: - 1,0 On Fr01000 ~~~4,4444,1,06 4,050 - 0 ~~~~~~ 214,600 t<,1lim7e 107,820 37 530 56,970 56,970 45,360 Hoî ime- 5,828 5,870 5,670 - - - 17,18 Foet tiOe 1.305 1,665 1,620 . - 4590 1 1 TotoAI1 tocsin, sevtco 06.027 39.D 82,120 71.220 71,220 37,360 318 088

n. Onod Froncrax

Staff S1încici 88,720 27,070 27,070 27,070 21,070 27,070 154,070

Il 1rTIMININC, - 34,223- Slrectoe of feoictes 13,163 10,530 10,530 - -

A. Pcant,,ne Center

C.S8f Insrruitor 10 975 8,780 8,78O -2 5 8,535 Deputy Ch01f lOStencîne 2,100 2,100 2,350 3,250 3,250 3,250 6,300 Iîstrucccors Z,250 2,250 2,250 - - 6,750 Accounotnt 750 750 '50 - - 2,250 btnet;a, 750 350 750 2,250 ,800 offone Oceff 600 600 600 - Dr-v-r 675 675 657 225 225 225 2.700 Cook 3B0 380 380 - - 1,140 Wat Ih-an 260 260 260 - . - 780 Inrerar 750 75C 750 - _ _ 2,250 Mcîhento 6D0 60C 600 - - 1,SOO Disrenser 530 53C 530 - - _ 1.590

Sobtols 533,781 28,955 29.205 3,475 3,475 3,475 102,368

5, Fle1d resînîoz

Dire-tor 10.975 8,780 80 - - - 28,535 i 8071,3y Dlicettor 2,100 2,100 2,350 2,350 2,350 2,350 13,600 4,500 22,500 Instructor 1,500 3,000 4,500 4,500 4,500 9 00° 0ffice Staff 600 3,200 5,845 01,800 1.800 1,800 Drivîx 450 450 450 225 225 225 2,025 Loboren 500 1,008 ,i.500 1,500 , 1,500 1,500 7.500

Subtotol 16,125 16,530 19,380 10,375 10.375 10,375 83,L60

Total Tr-inîng 49.988 45,483 48,585 13,050 13,SS0 13,850 185 328

III P1.T CONTROL

TfItifl Tes-t 1,150 2,705 0,050 4,050 4,050 ",e Op.5 1.û*a, 7.950 t90' 7iD .6 7,650 S,350 39.e5o

Ttala PFet Contrel 4_300 7 605 11.650 il 650 11,900 12. 59,500

Total 214.9282OrsoonoS CAMEROON COCOAPROJECT PROjEN. CONS

BOILRiiROs

PYO PY 1 'Y 2 'Y 3 b P5 PY 6 1 9 7 C')/7L 17'j75 1,755'76 1,7 /77 o7'To 197o/7' 1 7 l'I T 0 T A B U N I T COS N OST No C O T to C T No C O S T o No C0 S T No C O S T

'RANING

NRo-is 22,500 22,500 Neotoretior, and Notenolon af criating f-cilitles 15,000 15, 0DO aoildig. 3li25 2 30 39,750 39,750 Garage-Store 350 18 6,300 6,300 Furnmhings & Uten..ilv 6,B0O 6,800 Utilitie_ 6,550

Soot.tal Trainirg 96,900 96,900

SEITOR OFFICES

NoHae (Manager) 3,000 2 6,0O0 2 6,000 2 6,000 16,000 Adniaietration 3uilding 6,000 2 12,000 2 12,000 2 12,000 36,000 Garoge-Store (Production 150 m) 18 2 5,1400 2 5,p00 2 5,400 16,-200 Store (marketing 200 =) 16 2 7,200 2 7,200 2 7,20o 21,600

Suototal Seotor Offices 30,600 30,600 30,60o 91,G00

COLLECTIONCENTERS

Store 170 30 5,100 30 5,100 30 5,100 30 5.100 30 5,100 30 5,100 30,600

Suototal Collection Centera 5,100 5,100 5,100 5,100 5,100 5,100 30,600

Total CoilAingeTort 96,900 35,700 35,700 35,700 5,100 5,103 5,100 219,300 OCOAPROJECT PROJECT COSTS 0'ENICLES AND E,QUIPONgNTCOSTS

(CFAF '000)

1 7 0?77'74 .7 17 71 1'76y7? o'77 70 1?7ili7, li79'? T O T A L U0 1 3 T T 1S 0CN T No ^ S - 1k T No C 0 5 T No O S T

HEAD9UARTES 2,û0û :'roJect Faooger - Solo,, l,:l 1 ,1û0' 1 1,79 7 ?Jû 1,390 D-Loy -7 sI tio in ;) 1 7ûO 1 -70.O7agon )J J I 007 1,500 Production ùirrector 1,800 Marketing Director- St.Wegon 1 9 900 3,200 dr. 1 1 1,6 i 11,60 Secior Inspectùr-4 hee 5,200 Field Inspecoor-FlelO veh, 4 w.d. 1, DO 2 2,6,11 2 2,600 750 0 ,75 1 1,750 10,500 Trùck 3,5 t 1,75ù 1 1,75u 1 1,700 l 1,75 11 1, Office furniture -nd e4ù0oment 0,677 -500 1,650 1,75 1,750 30,800 OoOOcOol Ileo0oourters 1,900 12,25ù 1,750 1,75û

TRAINING3

00 Director - St.Wagon 9û 6 1 3 uee: FielF d sel 4 -d. 1,300 7, 00 5 6,001 General 1,750 Trorh 3.5 t 1,750 1 1,750 Moooreyole MoOorCyoOo37 1, ~~~~~ ,- 2 ~~~~~~~~~~~~~~~~~~~~~200--l17 7,500 19,050 .OuOtor07 Trainifo 01,55D

SECTOROFFICES 31,200 Field vehicle, 4 vd 1,30û 4 5,20 4h 5,200 4 5,200 5, 230 > 5,2907 2 3,500 21,00û Tru-k, 3,5 o (M.r,eotng> g,7>. 2 ',5w0 2 3,50) 2 5 2 3,5 2 3,5uC30û 1 800 Motorcycle >175- 6 300 6 300 6 300 6 6 ?,000 o,Doo 54,000 SUoOt.1 OectorOffices 9,000 9,000 9,000 9,0ùO

E7T00S0ON S00VI0r7 1,750 Agr.Aseet. Notorllycîe 50 6 300 7 35 6 30û 6 7 3 150 5 5,S88 Ext.morker, Olcynle S5 55 _ 25 9 6 ù > 63 _ 4 15 1,275 63 745 63 9h

SoolosalExtension 9yrvice 1,125 1,295 1,245 1,575 ,25 l 7,630

FEST CONTROL 9,744 Vehicles 060 1,266 1,2ùO 1,6du 2,256 2,400 lO,û73 Equiptent 1,264 ,24 _ 1 742 766 1,ù48 4,095 19,817 Suototal Peso Cnotrol 2,224 2,496 2,J42 2,L46 3,'0 6,405

COLLECTIONCENTERS 00715071014 0 Siecellaneooe iqeipFeent70147580~~~~~~~~~~~~20 *wheeloarroe', "r ^e-c, ctc ) 25û0___ __37 7,5Cf_.0 _30 7 500° 3'J 0,573 30 /. S : .3 10O 7,L50 4 5,000

Center- 7,500 ~~~~~7,5o0 ~ ~~~~~7,5,(7,50f 7,5oo 7,5C0D 45,o00 SutTotai Collection ~~~~~~ ~ ~~~~~ ~ 0 0005 F0005044~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4

ROADPROCRAUM' 31,350 Hp 10, 15o 31,350 Motor grader 12û 4,100 2,050 2 4,100 Service trucu 1,000 Fuel tanh triloer l,OCO 1 1,Q0O 13,900 >0 3uidnzer 140 Hlp 13,90G 1 73,9(70 13,910 Front loader LUC IID 6,000 1 6,o00 1 5,200 6'00o Copactor 15 t 3 5,20 21,7(0 truOk 3,1l70 7 21,700 D.mp 45 2L 700 Wt-er ta-k teruk 6000 1 2,9W 1 2,9470 F.el t.nk t-kc 3500 0 2,1U11 1 2,170210 L 2,,007 2,100 Service seation ce treiler 2,007 3,090 1,000 37,000 Pick-up 600 60 1 600 Crrcr-te mixer 65 Self proelled crne 6,500 1 6,50 Small eqipmene & trole 55u o,57e 6 Mlaterials _ 13,7ù- 13,200'JO 13,2_ 13,200 13,2700_ 13,200 171,850 SuboteaL Roadr 105,o5o 13,20X 13,200 1',2I . 13,29C

>-,2M -7?35 - - 3; Y vol 7' '. oipmect C57?77> 0,1,1 0 ) CAiNtROON COCOAPROJECT PROJECT OOSTS OPE,tATIONSAND MAINTENANCE

(CP76 '606)

PY 0 PY 1 Pl 2 P103 PY L P5 yP6 1 9 7 3 1973/74 1974/75 1)75/76 1)76'77 1)77/78 1978/7) 1979/80 T O T A L U N I T TOI 00ST No 0C0 S T No C O S T o 00 No C0 S T_ No C0 S

HEAOQUARTERS

Office Reot1 2,00M 2,000O 2,000 2,000I 2,070 2,0M0 12,000 Office Eopeneec 2,000 2,000 2, 0O0 2,000 2.000 2,000 12,000 80i16 Eapena.1 1,8Wo I 900 4 7,200 4 7,200 4 7,200 3 5,400 3 5,4W 1 1,800 35,100 (D>poty PireJot Manager Production Director Senior Inspector, Chief Akccuntent) Tr_1el (5% of saLaries) 309 3,025 3,036 3, Ù47 2,iï .5 2"ilS l,69 i6,647 Vehicle opertice exi- ,tentonn 6 P.ooenger- r 7 0/yr 360 7 5,320 7 5,320 7 5,320 7 5,320 7 5,320 7 6,320 32,300 Thice s 1,540/yr 1 1,540 2 3,000 3 4,620 3 4.620 3 4,6 20 3 4,620 23,100

Sobtot.1 Neadqortern 1,569 21,055 22,636 24,187 22,155 22,155 17,340 131,147

Buildtg Maintenance .5%cf cost 4,645 4,645 4,095 13,785 Otilities 1,400 1,400 1,400 700 4,900 Teaching snd Office S3pplies 2,900 3,100 3,700 600 10,300 Iaple,ete and Toole 12.5/traine 6,212 8,662 11,162 375 28,41i MaLs 6,780 8,940 10,060 1,800 27,580 Ph-a..y 600 900 1,000 200 2,700 Vohilns O eamlki Peecenge' cern 76O/e 6,O0b 6 o,o80 8 6,080 6 4,560 22,800 Trock 1,540/yr 1 1,540 1 1.,540 1 1,540 4,620 Motorcyclos 35/yr 4 14o 2 -7 2 70 2 70 -350

Sobtita1 Training 27,652 35,537 39,857 12,400 115,446 SIototl Training

SECTOROFFIOES

Boiidind Maintenance 65% cf Coot 1,530 3,060 4,59G 4,590 4,570 18,360 Miecellanecos srcpensee 00/sector 1,200 2,ll00 3,600 3,600 3,600 3,600 16,o00 Vehicle O and '{ 7 6 0 Ponnence ocreC /yr 4 3,040 8 6,080 12 9,120 12 7,120 12 7,120 12 9,127 45,600 Trcik i,S54O/yr 2 3,080 4 6,160 6 3,240 (6 9,240 6 7,24i 6 3,240 46,200 Motorcycier 35/yr 6 210 12 420 1 - 630 16 630 16 630 18 630 3,150

ScototI SOct-r Officec 7,530 16,590 25,650 27,180 27,1d0 27,1bO 131,310

i:T;INSERVICE

Miscollaneous 25/oget 1,525 3,275 5,000 5"75O 5,75v 4,6'1 25,900 Vehicls O nd M. Metercycles 35/yr6 6 210 13 455 1) 665 1V 665 1' 6o5 `6 56u 3,220 )iejcLon /yr 55 331 llo 708 181 1,006 211 1,266 211 26< 168 1,Ob _ 5,664

SOotobal ylteceionserri-e 2,065 4,438 6,751 7,681 7,6d1 6,168 34,784

PEST CONT40L

Vehilcl O ad M 760 1,996 2,05J3 4,032 5,414 5,760 20,850 Equipn.ent 0 cd M ',291 7,12? 10, 'SA 15,856 22,322 24,842 8h394

Soltotl Pe- Contrd1 4,059 9,i25 13,834 l',086 27,736 30,602 105,244

01oliicr '.laicntoconce 5% cf cost 255 513 765 1,022 1,275 3,825 'lscLlaneous EIcpecccî 25/enteor 75C 0,5)33 2,25J 7,3)3 3,75., 4.500 15.750

Ou-actai flollcctilcCecters 750 1,755 2,763 ',765 4,770 5,775 19,575

ROAO P4034AM

lquipent O anS m i,400 47,200 47,200 47,200 47,200 47,200 237,4Oo

Total Operation and Maintenance Cost 1,589 64,541 137,281 160,239 140,269 136,722 134,265 774,906

CAMEROON ANNEZ 8 ïft6le 1 COCOAPROJECT

CREDIT CO}eiIONENTCASH FLOWS (CFAF million)

1974/75 1975/76 1976/77 t977178 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 RnnRC&n

INFLOW

Loan from FONADER 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6 Credit repayment: Fugeicide - 20.0 43.3 66.7 90.1 118.4 122.9 132.7 146.4 161.9 175.3 185.9 192.5 195.8 196.8 196.8 Sprayers Year I - 12.5 16.3 15.0 27.5 34.0 16.5 29.5 34.0 16.5 29.5 34.0 16.5 29.5 26.6 26.6 Year 2 - - 12.5 16.3 15.0 27.5 34.0 16.5 29.5 34.0 16.5 29.5 34.0 16.5 29.5 26.6 Storage Year 1 - 7.1 7.1 7.1 11.8 11.8 11.8 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4 Year 2 - - 7.1 7.1 7.1 11.8 11.8 11.8 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4

Sub Total - 39.6 86.3 112.2 151.5 203.5 197.0 199.9 228.7 231.2 240.1 268.2 261.8 260.6 271.7 268.8 (Bad debts, 10%) - (4.0) (8.6) (11.2) (15.2) (20.4) (19.7) (20.0) (22.9) (23.1) (24.0) (26.8) (26.2) (26.1) (27.2) (26.9)

Total Inflow 48.1 109.1 168.7 239.0 308.3 330.8 350.1 371.3 382.1 416.4 440.4 443.2 461.0 456.1 466.1 463.5 OUTFLOW

Credit made: Fungicide 16.7 36.1 55.6 75.1 98.7 102.4 110.6 122.0 134.9 146.1 154.9 160.4 163.2 164.0 164.0 164.0

8prayers 20.0 26.0 24.0 44.0 54.4 26.4 47.2 54.4 26.4 47.2 54.4 26.4 47.2 42.6 42.6 42.6

Storage 11.4 11.4 11.4 18.9 18.9 18.9 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 Sub Total 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6 Repaid to FONADER Fungicide - 17.5 37.9 58.4 78.9 103.6 107.5 116.1 128.1 141.6 153.4 162.6 168.4 171.4 172.2 172.2 Sprayers Year 1 - 11.0 14.3 13.2 24.2 29.9 14.5 26.0 29.9 14.5 26.0 29.9 14.5 26.0 23.4 23.4 Year 2 - - 10.5 13.7 12.6 23.1 28.6 13.9 24.8 28.6 13.9 24.8 28.6 13.9 24.8 22.4 Storage Year 1 - 6.3 6.3 6.3 10.4 10.4 10.4 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 Year 2 - - 6.0 6.0 6.0 9.9 9.9 9.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 Sub Total - 34.8 75.0 97.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2

Total Outflow 48.1 108.3 166.0 235.6 304.1 324.6 343.7 365.6 375.3 409.2 433.8 435.3 453.1 449.1 458.2 455.8 Balance Annual - 0.8 2.7 3.4 4.2 6.2 6.4 5.7 6.8 7.2 6.6 7.9 7.9 7.0 7.9 7.7 Cum&lative Balance - - 3.5 6.9 11.1 17.3 23.7 29.4 36.2 43.4 50.0 57.9 65.8 72.8 80.7 88.4 FONADER

INFLOWS Grants from Goverment 48.1 73.5 91.0 138.0 80DECAO Repayment - 34.8 75.0 97.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2

Total Inflows 48.1 108.3 166.0 235.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2 OUTFLOWS Loan to SDC 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6

Net Inflow - 34.8 75 97.6 (39.9) 29.2 (1.9) (17.2) 22.7 (7.4) (14.8) 31.7 2.3 5.9 15 12.6

Cumulative Inflows 109.8 207.4 167.5 196.7 194.8 177.6 200.3 192.9 178.1 209.8 212.1 218.0 233 245.6

ANEX 9

CAMOON

COCQAPROJECT Estimated Semestrial Schedule of Disbursements

(US$ '000)

Estimated lisbursement Amount disbursed Balance of Project Year End of Semester during Semester Credit

1 1 400 6,100

2 400 5s,700

2 1 400 5,3OO

2 500 4,800 3 1 500 4,300 2 500 3,800 4 1 600 3,200

2 700 2,500

5 1 700 1,800 2 700 1,100 6 1 600 500 2 500

ANNEX 10 Table i

CAMOEROON

COCQA PROJECT PRODUCTD0N

EstimatedProduction of ProjectArea (tonsdry beans)

year Production in tons dry beans remarks

without the with the increment project project

1974-75 10,500.00 10,500.00 _ effect of 1975-76 10,500.00 11,100,00 600.00 rehabilitation only 1976-77 10,500.00 12,400.00 1,900.00

1977-78 10,500.00 13,800.00 3,300.00

1978-79 10,500.00 15,200.00 4,700.00

1979-80 10,562.50 16,932.50 6,370.00

1980-81 10,778.70 18,408.75 7,640.05

1981-82 11,174.90 19,893.75 8,718.85

1982-83 11,718.60 21,935.00 10,216.40 combined effect of 1983-84 12,318.60 24,261,25 11,942,65 rehabilitation and new 1984-85 12,918.60 26,278.75 13,360.15 plantings

1985-86 13,456.10 27,852.50 14,396.40

1986-87 13,849.90 28,850.00 15,000.10

1987-88 14,043.70 29,347.50 15,303.80 1988-89 14,100.00 29,500.00 15,400.00 CAMEROON

COCOA PROJECT

PRODUCTION

Estimated Production of Rehabilitated Cocoa

Production -in tons dry beans

year of area entrance (ha) without with the project the project (now rehabilitated) 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81

1974-75 6,000 1,800 2,400 3,000 3,000 3,000 3,000 3,000 1975-76 7,000 2,100 2,100 2,800 3,500 3,500 3,500 3,500 1976-77 7,000 2,100 2,100 2,100 2,800 3,500 3,500 3,500 1977-78 7,000 2,100 2,100 2,100 2,100 2,800 3,500 3,500 1978-79 8,000 2,400 2,400 2,400 2,400 2,400 3,200 4,000

Total 35,000 10,500 11,100 12,400 13,800 15,200 16,700 17,500 Increase . 600 1,900 3,300 4,700 6,200 7,000 CAMEROON

COOO80PROJ3CT P0D'CTION

Oettngted 3roduction of Ne PlantOiOSg

a

1975-76 625 1,250 300 1,550 62.50 232.50 125.00 387.50 187.50 775.00 250.00 930.00 312.50 1,085.O0 375.00 1,240.00 375.00 1,240.00 375.00 1,240.00 375.00 1,240.00 375.00 1,240.00 1976-77 1,437 2,875 600 3,475 - - 143.70 521.25 287.40 868.75 451.10 I 1,737.50 574.80 2,085.00 718.50 2,432.50 862.20 2,780.00 862,20 2,780.00 862.20 2,780.00 862.20 2,780.00 1977-78 2,000 4,000 1,000 5,000 _ _ _ 200.00 750.00 400.00 1,250.00 600.00 2,500.00 800.00 3,000.00 1,00o.00 3,500.00 1,200.00 4,000.00 1,200.00 4,000.00 1,200.00 4,000.00 1978-79 1,375 2,750 700 3,450 _- - 137.50 517.50 275.00 862.50 412.50 1,725.00 550.00 2,070.00 687.50 2,415.00 825.00 2,760.00 825.00 2,760.00 1979-80 563 1,125 400 1,525 _- - - - 56.50 228.75 112.60 381.25 168.90 762.50 225.20 915.00 281.50 1,067.50 337.80 1,220.00

Total 6 ,000 12,000 3,000 15,000 62.50 232.50 268.70 908.75 674.90 2,393.75 1,218.60 4,435.00 1,818.60 6,761.25 2,418.60 8,778.75 2,956.10 10,352.50 3.349.90 11,350.00 3,543.70 11,847.50 3,600.00 12,000.00 Increnent 170.00 640.05 1,718.85 3,216.40 4,942.65 6,360,.5 7,396.40 8,000.10 8,303.80 8,400.00

CAIIRbOON

COOOAPROJECT F6l4 B00L28T ON-FARMINFUTS (WUITHPROJECT)

1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 Yaar 1)74/75 1975/76 1976/77 1977178 1978/79 1979/:0 1980/81 RERASILITATION Unit UNITS ------~ ~-----~~~------A) Area .. d Earmers ______-----_------included in projant ------area ha 6,000 7,OOU 7,000 7,000 8,000 - 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 area a....ulated ha 6,000 13,000 20,000 27,00û 35,OUO 35,000 ------farnera pnrticipntig s 5,000 6,500 6,00 6,000 6,500 - faritrs paîtiipnting 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 eccnnalatad Na. 5,000 11,500 17,500 23,500 30,000 30,000

0) Phystial fnr ipats 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 InsI farct aqipinat set 5,000 11,500 13,500 23,500 30,000 30,000 11,000 13,000 6,000 11,000 13,000 6,000 11,000 13,000 6,000 sprayere Se 5,000 6,500 6,000 11,000 13,000 6,000 350 350 350 350 350 350 350 350 350 Funaglidea nons 60 130 200 770 350 350 (yield 5S0 kg/ha)

C) COsts Unit Price _ _ _ _ _ CFAF ------CFAF ('000) ------30,000 30,000 30.000 30,000 30,000 30,000 30,000 30,000 30,000 Seul faro rqaipme.t 1000-/set 5,000 11,500 17,500 23,500 30,000 30,000 55,000 65,000 30,000 55,000 65,000 30,000 55,000 65,000 30,000 Sprayera .. 5000/piece 25,000 32,500 30,000 55,000 65,000 30,000 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300 Fnaginides ** 278,000/tan 16,680 36,140 55,600 75,060 97,300 97,300

NSW PLANTINOS Unit UNIIS ------A) Area and f aria--rs------___--8------included la praject ------crea ha 1,250 2,87 4,000 2,750 1,125 area ha 300 600 1,000 700 400 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 erea aeoonanlated E ha 1,250 4,125 8,125 10,875 12,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 orna aooacnleted N ha 300 900 1,900 2,600 3,000 ------faccera partinipatig E 0*. 5,000 6,500 4,500 - - - fermera pnati.ipatiag N Ne 600 600 W00 farcea- partitipatisg 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 aoac'orulatd gE N8 5,000 11,500 16,000 16,000 16,000 16,000

f-rmera participotirg 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 accnssaltad N No. 6000 1,200 2,000 2,000 2,000 2,000

0) Phycical fara icpota ------NOrsery qoipaent E aet 5,000 6,500 4,500 ------_ _ Narcary eqnipa nt N set 600 600 800 - - - Polythen baga E 1000 ùag 2,250 5,175 7,200 4,950 2,025 Palyth... bhag N 1000 bag 540 1,080 1,800 1,260 720 - Fad. E 1000 9adc 75 172.5 240 165 675 PFde N 1000 pnds 18 36 60 4P 24 - - - _ _ - _ _ _ Ir c.ticidea (E14) 1 4,960 11,120 16,000 11,040 4,880 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 Sea11 fara quipAent E set 5,000 11,500 16,000 16,000 16,000 16,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Snail foar qoipnrat N set 600 1,200 2,000 2,000 2,000 2,000 600 600 600 800 600 600 800 600 600 800 sprayere N piace - - - - 600 47,875 88,700 135,225 175,575 207,040 227,000 236,950 240,000 240,000 Fongicides (E88) tos - - - - 5,000 18,175

C) Cocta Unit Pica CFAF ------CFAF (000) ------Nurarry aq.ip-ant E 4000/ret 20,000 26,000 18,000 Nncsary eqgipneat N 12,500/sot 7,500 7,500 10,000 Polythene bhgs E 1370/1000 bag 3,082 7,090 9,864 6,782 2,774 Polythene baga N 1'70/1000 bog 740 1,480 2,4n6 1,726 986 ------Pad. E 25,000/1000 pade - 2,000 4,000 6,000 4,125 2,000 - Pada N 25,000/1000 pads 1,000 1,000 1,500 1,050 1,000 ------Insecticides (E&N) 875/1 4,340 9,730 14,000 9,660 4,270 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Ssall foa eqaipteat E 500/sat 2,500 5,750 8,000 8,000 8,000 8,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 S-aI foa aqaip .et N 1000/crt 600 1,200 2,000 2,000 2,000 2,000 4,000 3,000 3,000 4,000 3,000 3,000 4,000 3,000 3,000 SprayaaaOO N 5000/piae - - - - 3,000 3,000 13,309 24,659 37,593 48,810 57,557 63,106 65,872 66,720 66,720 Fsisgicde (E86)00 278/kg - - 1,390 5,052

V Sieting Pa-mrer 2/ NSn Fa..rs

* ennIi f ara eqoipart aill bU paid by farnar cash ** sprayers and fanginida ill bh provided nn crdit for the fran. eorcecy equip= .t, polythana bags, pFda aad in.. ticidas will bh prvlided by Prajert Anthority, face af charga I AJIERDON

R,fereneo i - - OROJECTu Ol-FiY UINPDS r T1 Pit JECT>

ABIOITATION uinit 49747751.fr 1975-76 1976/77 19777i6 197fi79 1979/S9 1980iil 1981182 1982/83 1963/84 i9864/8 19857/6 1986/87 1987799 1988989

à) k-e ----- _ ____------_--___------atr ------UNIT5 ------iooîudoo in 91010,1 ha 6,000 7,000 7,000 7.000 S1.000 ote0 rooouoolatofd ho 6,003 13,090 20,000 27,000 35.000 35,000 35,000 9,6003 35,300 35,û00 33,O0O 35,000 35.000 353000 }5,0D0 f.roro porttoipooS No. 5,000 6,5N0 6,000 6-000 6,500 fantero portirîpating .-.- uloted No. 5,0NO 11,S0O 17,50 23,500 330,000 30.00 30,0D0 13.0,0 30,000 30,000 30,000 3D,000 30.000 30,000 30,000

B) Phv.lo.1 11r1n m ett S a1l far oquipo0t set 5,0N0 11,S00 17,500 23,500 30,000 30,000 30.03 30,000 30,000 30,000 30,000 30,000 30.000 30,000 10,000 s".0yerr No. 5000 6.500 6,000 11,000 13,000 6,000 11,600 13.00N 6,000 11,0N0 t3.000 6,00 11.0W0 13,000 6,000 I'oon1eid.os 1, a30 65 IO 1315 175 175 175 175 175 17S 3y1e4d 300 kglh.)

C) Co0t. Unit Price CFAF ------CFA (0 000) ------_ ___ ------S-11 f.- oqîpieont 50dtet 2,500 5,750 8,750 1,750 15.000 *5,000 15,000 15,000 15.090 15,000 IS,OO 0 15.0I 15.0N I,D00 15.0I 0 Sp-yor- 5000/pi... 25,N00 72,500 50,09 55,N00 65,030 30,000 S 55.0D0 65,000 30.D00 55.000 65,000 30,000 55.000 6S,O00 90.003 F..gi.ides 27Y,000/ton 8,340 1-,070 27,Y00 37,530 48.650 48,630 46,650 48,650 48,,6S0 48,650 48.650 - 48,650 48,6S0 48,650 47,0650

SEWPLANTINOS Unit A) Arml nd far------__ _ ------_____--______--__------UNITS ------~------included in proJect or,,,, h- 615 1.437 2,000 1,375 562 ore ...-*. l.t.d ho _ 625 2.0,2 4,062 5,437 6,000 6,N00 6,000 6,000 6.000 6.000 6,0000 6 .00 600,D f-rmtrs partitipotlîo ND 2,500 3,250 2,259 fer,oer. purticipatiag oooo,toloted No. 5,750 0,000

B) Phy.tr.l fr.n inr0t1 96r-eos. Equlptent .et 2.500 3,2350 2.250 POlythOC 803gs 1OO l,17S 2,587 2.000 2.475 1,012 Fod. 1000 - 38 S6 130 a3 34 Sa11 foe oqo1pmüt tet 2,500 5,750 0OOO 8.00 - .390 Y,000 Sp-eVr- No.N . - - - - Fon&irid.o kg 1,259 5,374 13,490 24,372 36,372 48,372 59,122 66,992 70.874 72,000

-ZOCCA f1ROJEC?

FR ZUDGET - 1.2 lia REBABI-LITATI(M

Yield: 500 kgtha

Wittiut YEAR 1 2 3 4 S 6 7 - 25 Rebabilitation

.'roduction

Revenues

Production Value 1@ CFAF 96.5/kg 34,740 46,320 57,900 57,900 57,900 57,900 -57,900 34,740 Yearly bonus ------

(1) Total revenues 34,740 46,320 57,900 57,900 57,900 57,910 57,900 34,740

Expenditures

Small farm equipment 1,000 1,000 1,000 1,010 1,00D 1,000 1.000 500 Fungicide 3,340 3,340 3,340 3,340 3,340 3,340 3,340 2,000 Sprayer 5,000 - - 5,000 - - 1,660 1,1 1.660 1-

9,340 4,340 4,340 9,340 4,340 4,340 6,000 4,165

Less: Financed by credit 100% of fungicide 3,340 3,340 3,340 3,340 3,340 3,340 3,340 80% of sprayer: 4,000 - - 4,000 - - 1,330 Plus: Credit repayments for fungicide in next project year - 4,000 4,000 4,000 4,000 4.000 4 000 for sprayer in 2 next years - 2,500 2,500 - 2,500 2,500 1,660_

(2) Cash expenditures 2,000 7,500 7,500 6,000 7,500 7,500 7,000 4,165

(3) Net revenues (1) - (2) 32,740 38,830 50,400 41,900 50,400 50,0 50,900 30,57.5

1/ Average over three-year period. CAMEROON

COCCA PROJECT

FARX 8UDGET'.0,75 la NEW PLANTING

Year 1 2 3 4 5 6 7 8 9 10 il 12 13 - 25

Plantation (ha) 0.25 0.25 0.25 ------Production (kg) - - - - 38 100 225 338 450 525 575 600 600

Revenues

Production Value @ CFAF 96.5/kg - - - - 3,620 9,650 21,713 32,617 43,425 50,663 55,488 57,900 57,900 Yearly bonus ------_

(<) Total revenues - _ _ _ 3,620 9,650 21,713 32,617 43,425 50,663 55,488 57,900 57,900

Expenditures

(a) Nursery equipment 4,000 - -_ -_ _- - (b) Plastic bags 610 610 610 -

Sub-total 5,960 2,660 2,660 1,000 500 880 1,500 2,130 2,800 3,230 3,500 3,600 3,600

Less: Subsidies for (b), (c) (d): 1,660 2,360 2,360 700 ------Less: Financial by Credit 1007% of Fungicide: - - - - 200 580 1,200 1,830 2,500 2,930 3,200 3,300 3,300 80% of Sprayer: ------

Plus: Credit repayments For Fungicide in next project year - - - - - 240 696 1,440 2,196 3,000 3,516 3,840 3,960 For Sprayer in next 2 years ------

(2) Cash Expenditures 4,300 300 300 300 300 540 996 1,740 2,496 3,300 3,816 4,140 4,260

(3) Net revenues (1) - (2) -4,300 -300 -300 -300 3,320 9,110 20,717 30,877 40,929 47,363 51,672 53,760 53,640

l/ No aprayer needed in addition to the one already used for rehabilitation. CAMEROON

COCOA PROJECT

FARM BUDGET - 0.6 Ha NEW PLANTING (WITHOUT PROJECT): EXISTING FARMER (CFAF)

Yield: 600 kg/ha

Year 1 2 3 4 5 6 7 8 9 10 il 12 - 25

Plantation (ha) 0.20 0.20 0.20 ------Production (kg) - - - - 20 60 120 1-80 240 300 340 360

Revenues

Production value O CFAF 96.5/kg - - - - 1,930 5,790 11,580 17,370 23,160 28,950 32,810 34,740 Yearly bonus ------

(1) Total revenues - - - - 1,930 5,790 11,580 17,370 23,160 28,950 32,810 34,740

Expenditures

(a) Nursery equipment 1,000 ------

Sub-total 2,270 1,270 1,270 500 600 830 1,160 1,500 1,830 2,160 2,400 2,500

Leas: Subsidies for (b) and (c) 770 770 770 ------Less: Financed by credit Plus: Credit repayment

(2) Cash expenditures 1,500 500 500 500 600 830 1,160 1,500 1,830 2,160 2,400 2,500

(3) Net revenues (1) - (2) -1,500 -500 -500 -500 1,300 4,960 10,420 15,870 21.330 26,790 30,410 32,240

1/ Sprayer not included, since without project only those farmers who have a cocoa farm and therefore a sprayer. CAMEROON

COCOA PROJECT

FARM BUDGET - 1.5 Ha NEW PLANTINC < WITH PROJECT): NEW FARMER CÇFAF)

Yield: 800 kg/ha

Year 1 2 3 4 5 6 7 8 9 10 il 12 13-25

Plantation (ha) 0.5 0.5 0.5 ------Production

Revenues

Production value @ CFAF 96.5/kg - - - - 7,240 19,300 43,425 65,140 86,850 101,330 110,980 115,800 115,800 Yearly bonus ------

(1) Total revenues - - - - 7,240 19,300 43,425 65,140 86,850 101,330 110,980 115,800 115,800 Expenditures

(a) Nursery equipment 12,500 ------(b) Plastic bags 1,220 1,220 1,220 ------(c) Seeds 700 700 700 ------(d) Insecticides 1,400 2,800 2,800 1,400 ------(e) Small farm equipment 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 (f) Fungicides - - - - 400 1,060 2,400 3,660 5,000 5,860 6,400 6,600 6,600 (g) Sprayer - - - 5'000 - - 5,000 - - 5,000 - - 1,665

Subtotal 16,820 5,720 5,720 7,400 1,400 2,060 8,400 4,660 6,000 11,860 7,400 7,600 9,265

Less: Subsidies for (F.), (b), (c), (d): 15,820 4,720 4,720 1,400 ------Less: Financial by Credit 100% of fungicide: - - - - 400 1,060 2,400 3,660 5,000 5,860 6,400 6,600 6,600 80% of Sprayer: - - - 4,000 - - 4,000 - - 4,000 - - 1,330

Plus: Credit repayments for fungicide in next project year - - - - - 480 1,280 2,880 4,400 6,000 7,040 7,680 7,920 for sprayer in next 2 years - - - - 2,500 2,500 - 2,500 2,500 - 2,500 2,500 1,665 2/`

(2) Cash expenditures 1,000 1,000 1,000 2,000 3,500 3,980 3,280 6,380 7,900 8,000 10,540 11,180 10,920 (3) Net revenues (1) - (2) -1,000 -1_000 -1.000 -2.000 3.740 15.320 1,145 58.760 78.950 93,330 100,440 104,620 104,880

1/ Average over three-year period. AUNEZ 12 CAMEROON

COCOA PROJECT

GOVERNMENTCASH FLOW 1! (CFAF Million) 1989/90 te0 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1993/94

INFLOHI

Loan IBRD 200 200 200 200 190 138 Loan CCCE 2/ 180 180 180 180 180 180 Grant FAC 40 40 40 40 40 40 Indirect Taxes in Projeat CeaIs 29 32 40 40 40 28 Expert Tatas on Incr.. antal Production - 24 76 116 160 205 250 281 329 385 430 463 483 496 496 496 1,034 Stabilization Fund Surplus - 51 160 243 334 428 513 585 685 802 897 966 1,007 1, 0 27 1,034

Total Inflows 449 527 696 819 944 1,019 763 866 1,014 1,187 1,327 1,429 1,490 1,523 1,530 1,530

OUTFLIOWS

Project Cost 3/ 703 706 815 712 776 550 297 260 260 231 290 236 236 236 236 236 Less: Cent Without Pr.ject (24) (55) (88) (124) (161) (164) (164) (164) (164) (164) (164) (164) (164) (164) (164) (164)

Incraemental Prejeet Cost 679 651 727 588 615 386 133 96 96 67 126 72 72 72 72 72

Net Flîw Before Debt Service (230) (124) (31) 231 329 633 630 770 918 1,120 1,201 1,357 1,418 1,451 1,458 1,458

Debt Servies

IBRD (23) (37) (52) (66) (81) (90) (137) (137) (137) (137) (137) (137) (137) (137) (137) (137) CCCE 2/ (6) (13) (19) (25) (31) (38) (99) (99) (99) (99) (99) (99) (99) (99) (99) (99)

NET ANNUAL CASH FLOW (259) (174) (102) 140 217 505 394 534 682 884 965 1,121 1,182 1,215 1,222 1,222

CUMULATIVE NET CASH FLOW - (433) (535) (395) (178) 327 721 1,255 1,937 2,821 3,786 4,907 6,089 7,304 8,526 14,636

1/ In 1974 prices 2/ At 3.57. per annue for 20 years including 6-year period f grace 3/ Lnss farers' centributions

ANNEX 13

CAMEROON

COCOA PROJECT

EconomicRate of Return

Benefits

1. Benefitshave been calculatedon incrementalcocoa production, assumingno improvementin averagequality (90% grade I and 10% off-grade). The economicvalue consistsof price receivedby producers, intermediary margin accruingto precooperatives,and Governmenttaxes and Stabilization Fund surplus. Calculationsare based on a CIF cocoa price of US¢ 47/lb, as projected for 1980 at average 1973/1974 prices by the Comuodities #ud Export ProjectionsDivision, converted at a kate of CFAF 250/Us$(Table 1). Producer prices are CFAF 100/kg and CFAF 65/kg for grade I and off-gradecocoa reopectively,which are 1973/74actu8a price.. Costs

2. Cost figuresinclude ail projectinvestment and operatingcosts at begin- ning1974 prices. Administration costs without the project have been estimatedat CFAF 4,000/ha,which appearsto be the approximatecost of servicescurrently provided.

3. On-farm input costs are derivedfrom Annex 13, Tables 1 and 2, deducting internal indirect taxes amounting to 30% of the coat of small farm equipment and sprayers.

4. Family labor has been costed at the minimum agricultural wage rate of CFAF 250/day,which roughlycorrespond to daily wages currently paid plantation workers in the southwestern region oil palm estates.

5. Project Life

A life of 25 years has been assumed for the project.

6. Results and Sensitivity Analysis

The economie rate of return under assumed costs and benefits is 26%. Sensitivity analysis of the rate of return to variations in costs and benefits shows the following results:

Rate of Return under:

------Benefits- Costs 100% 90% 75%

100% 26 23 18 110% 23 20 15 125% 19 17 12

ANNBX13

CAMEROON

COCOAPROJECT

Economic Value of Cocoa

Export Cocoa (Grade I)

World Market Price: US d/lb 47 OFAF/kg 260

OFÂF!"'ton

CIF Price 260,000 Freight, insurance& miscellaneousCo0ts 20,000 FOB Douala Price. 240,000 Allocation of FOB Price: Export Costs: 26e250 Transport costs and losses, project area to Douala 6,000 Handling,bagging, & storage 6eo00 Insurance& financial expenses 5,800 Miscellaneousfees and charges 2,4o0. StabilizationFund tax 1.000 Exporterls gross profit margin 5,050

Economic Value 213 750 Producer price 100,00 Intermediarymargin 5,100 Export tax 34,062 StabilizationFund surplus 74,588

Non-ExportCocoa (off-grade)

Economic Value: 85 430 Producer price Intermediarymargin 5,100 Tax 15,330

Average Economic Value of Project Cocoa 200,918 (90% export, 10% non-export) cAliraooN ~~~~~~~~~~~~~~~~~~~~~~~Table2

COCOAPROJECr

1986/87 1987/88 1988/89 to 1974/75 1975/76 1976/77 1977178 197i./79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1998/99

COSTS Wl1S PROJECT

Total PFroeet Co-t 696.3 708.2 B17.5 718.7 685.1 555.2

Le:.. ore enta1 Fart Inputs (81.1) (114.8) (120.5) (95.5) (94.2) (25.3) 1.lvase Valoe of BoildiRg & V.hi.le. s (11.5) (66.4)

Subtotal 615.2 593.4 697.0 611,7 524.5 529.9

Pls: Fhysical Costlsgaaaias 20.7 18.7 21.3 17.4 17 14

Subt.tal 635.9 612.1 718.3 629.1 541.5 543.9

t Internaltcs: T..es 19.1 19.3 28.0 27.7 25.0 25.4

Subtots1 616.8 592.8 690.3 601.4 S16.5 518.5 236.8 240.4 240.6 240.8 Icputs 74.7 127.3 158.5 175.4 202.5 168.7 185.2 196.4 210.0 222.5 130.9 Add: On-Farr 1,274.5 1,306.9 1,326.5 1,339.0 1,342.5 Fa.ily Labos 144 393.2 691.5 1,022.2 1,227.5 1,179.2 1,108.0 1,248.2 1,172.7 1.230.5 238.6 297.0 246,0 244.0 244.0 244.0 Post Project Admi.i.tratioe C.st ______304.7 268.1 268.1 1,691.6 1.802.4 17B77 . 1,82316 1,827.3 Total 835.5 1,113.3 1.540.3 1.799_0 1,946.5 1866.4 1,597.9 t.7_127 16_50.8

C08T WlT8017f PROJECT 164.0 164.0 164.0 164.0 Ad4ii.strat1nn 24.0 54,5 88.2 124.2 161.7 164.0 164.0 164.0 164.0 164.0 164.0 121.4 122.5 122.8 122.8 Os-Pcra, Itcut. 34.2 58.4 70.4 98.1 118.8 89.6 104.3 108.9 112.4 115.9 119.1 590.5 604.5 621.8 634.3 643.8 649.8 653.0 653.8 Fa.ity Lab.r 86.5 211.5 352.8 501.3 620_8 1603.8 583.5 880.9 901.7 917.4 929.2 936.3 939.8 940.6 Total 144.7 324.4 511.4 723.6 899.3 897.4 851.8 863.4 849.3, 769.9 789.9 885.0 858.5 874.6 883.8 886.7 INCR1E4NTAL ECOoOMrC C0STS 690.8 788.9 1,028.9 1.075.4 1,047.2 1,0D9,0 746.1

INCREIDSNTALECONOMIC 8ENEPITS 13,360 14,396 15.000 15,304 15,40V lncraematal Productin - 600 1,900 3,300 4,700 6,370 7,640 8,719 10,216 11,943 2,684.3 2,892.4 3,013.8 3,074.8 3,094.1 YIsSuevf Incaraeaet. Production 1/ - 120.6 381.7 663.0 944.3 1,279.8 1,535.0 1,751.8 2.052.6 2,399.6

Ecoccd.c Rate ef Return 26%

SEN81TIVITY ANELYSIS 1/ Average price of CFAF 200,918tt, based on values at Tabla 1 and output iotcicttng in 90D Grade I and 107 off-grade ooaea. SENP,FIT

CecI 108. *10 -25% 10 2 23 la +107. 73 23 2 5 4.257, 19 17 12 IBRD 10805

UNITEDREPUBLIC 0F CAMEROON î'4J19 . COCOA PROJECT

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