ReportNo. 340a-MLI FILECOPY Appraisalof Integrated RuralDevelopment Project Public Disclosure Authorized Mali May 13, 1974 Agriculture ProjectsDepartment West Africa RegionalOffice Not for PublicUse Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the InternationalBank for Reconstructionand Development InternationalDevelopment Association This report was preparedfor officiai use only by the BankGroup. Rt may not be published, quoted or cited without BankCroup authorization.The BankCroup dors not dacept responsibility for the accuracyor completenessof the report. CURRENCY EQUIVALENTS US$ 1 = MF 500 MF 100 US$ 0.200 WEIGHTS AND MEASURES 1 metric ton 0.984long ton 1 kilometre = 0.6215 mile 1 hectare 5 2.47acres ABBREVIATIONS AF Alphabétisation Fonctionnelle EDM Banque de Développement du Mali BDPA Bureau pour le Développement de la Production Agricole DGP Direction Générale de la Production DNS Direction Nationale de la Santé DNTP Direction Nationale des Travaux Publics FAC Fonds dtAide et de Coopération FED Fonds Européen de Développement GERDAT Groupement d'Etudes et de Recherches pour le Développement de l'Agronomie Tropicale ICRISAT International Crops Research Institute for the Semi Arid Tropics (Hyderabad, India) 1ER Institut d'Economie Rurale IFAC Institut Français de Recherches Fruitières Outremer IRAT Institut de Recherches Agronomiques Tropicales et des Cultures -Vivrières IROT Institut de Recherches du Coton et des Textiles Exotiques IRHO Institut de Recherches pour les Huiles et Oléagineux OA Opèration Arachide OACV Op'érationArachide et CulturesVivrières OC OpérationCoton OD Opérationde Développement OPAM Officedes ProduitsAgricoles du Mali OSRP Officede Surveillanceet de Regulationdes Prix RCFM Regie des Cheminsde Fer du Mali SCAER Sociétéde CréditAgricole et d'EquipementRural SEPOM Sociétéd'Exploitation des ProduitsOléagineux du Mali SoMIEX Société Malienne d'Import Export STR Service des Travaux Routiers FISCALYEAR January 1 to December 31 MALI INTEGRATED RURAL DEVELOP`ENT PROJECT TABLE OF CONTENTS Page No. SUMTARY AND CONCLUSIONS .. ..................... i- v I. INTRODIJCTION ........ .............................. 1 II. BACKGROUND ......................... *....... 1 A. General ................ ......................... B. The Agricultural Sector ..................... 2 C. D)evelopment Options . ....... .. ....... 4 ',). Institutions .................................... 4 E. Agricultural Research . ................. 5 III. T-IEPROJECT AREA ....................... ....... 6 A. General ... .................................. 6 B. Operation Arachide ................... ....... 8 IV. TIE PROJECT . ........................ 9 A. Description ....... ................... .... 9 B. Detailed Features . ......... o.................. 10 C. Credit Arrangements and Supply of Inputs ..... 12 V. COST ESTIMATES AND FINANCING ..................... 14 A. Project Costs . ................... .......... 14 B. Financial Arrangements ...................... 16 C. Procurement and Disbursement ...... .... 19 D. Project Accounts and Audits ................. 20 VI. ORGANIZATION AND MlANAGEMFNT - STAFFING AND TRAINING 21 A. Organization and Management. .. 21 B. Staffing and Training .... ........... 23 VIl. YIELDS AND PRODUCTION, MARKETING, FARMERS' BENEFITS AND GOVERNMENT REVENUES . .................. 24 A. Yields TABLE OF CONTENTS(Cont'd) A. Yields and Production ....................... 24 B. Marketing and Prices .... ...................25 C. Farmers' Benefits ........................... 27 n. Impact of Project on Government Revenues and Expenditures ...... .................... 28 VIII. BENEFITS AND JUSTIFICATIONS ...................... 29 lx. AGREEMENTS REACHED AND RECOMMENDATIONS ............ 30 ANNEXES 1. Agriculture in %`ali Table 1 Production and Marketing of Main Crops (1967 to 1972) Table 2 Official Producer Prices for Principal Commodities Table 3 Agriculture Sector Contribution to Exports Table 4 Volume of Grain Imports (1969 to 1973) Table 5 Groundnut Production and Marketing (1953 to 1973) 2. Operation Arachide Table 1 Area, Production, Yields, Marketing Table 2 Inputs Table 3 Financing 3. Cropping Pattern, Inputs, Yields and Production Table 1 Cultivation Schedule Table 2 Labor Requirements for Groundnut and Cereal Production Table 3 Area of Groundnuts Grown under OACV Supervision by Sectors Table 4 Area under Groundnuts: Diffusion of Modern Techniques Table 5 Estimated Production and Yield of Groundnuts Table 6 Incremental Groundnut Production Induced Directly by the Project Table 7 Area of Sorghum and Millet Grown under OACV Supervision Table 8 Area under Sorghum and Millet: Diffusion of Modern Techniques Table 9 Estimated Production and Yield of Sorghum and Millet Table 10 Incremental Sorghum and Millet Production Induced Directly by the Project ANNEXES (Cont'd) 4. Improvementof Rural Tracks Table 1 Length of Roads and Tracks in the Western and Central Sectors Table 2 Roads Classifiedin 1972 Table 3 Improvementof FeedierRoads 1974/77Program Table 4 Tracks for Improvementsand Proposed Third Highway Project Table 5 Roads and Tracks Technical Characteristics Table 6 Scope of Works Table 7 Analysis of Trucking Costs in Project Zone (for 7 t lorry) 5. FunctionalLiteracy 6. Research Programs 7. Medical Assistance ~8. VeterinaryAssistance 9. EvaluationUnit 10. GroundnutSeed Production 11. AgriculturalInputs and Credit Table 1 Cost Prices and Sales Prices of Farm Inputs Table 2 ComparativeTable of Loans and Repayments Table 3 SCAER CondensedBalance Sheets Table 4 SCAER CondensedOperating and Profit and Loss Accounts Table 5 Farm ImplementRequirement, Costs and Medium-TermCredit Table 6 Seasonal Inputs Requirements,Costs and Seasonal Credit Table 7 Sumary of IncrementalFarm inputs, Co0ts and Financing 12. Project Costs Table 1 Project Costs Table 2 Buildings and Equipment Table 3 Vehicles Table 4 Technical Assistance Table 5 Local Staff Table 6 Operating Expenses Table 7 Rural Tracks Improvements Table 3 FunctionalLiteracy Table 9 AgriculturalResearch Table 10 'IedicalAssistance Table 11 VeterinaryAssistance rable 12 EvaluationUnit Table 13 IncrementalFarm Inputs Cost and Financing Table 14 RevolvingFund Table 15 Contingencies Table 16 Import Duties and Taxes ANNEXES (Cont'd) 13. Financing Table 1 Financing per Ileading Table 2 Sources of Financing Table 3 IDA Disbursement 14. Market and Prices for Project Commodities Table 1 Bareme Arachide (GroundnutSchedule) Table 2 Producer Prices for Groundnuts Table 3 InternationalPrices of Groundnuts,Groundnut Oil and Groundnut Cake Table 4 Croundnut Economic Farm-gate Price (1973-1980onwards) Table 5 Destinationof Marketed Production Table 6 OSRP Groundnut Reserve Account (1969-1972) Table 7 Price and Marketing Structure for Sorghum/Millet- Domestic Price Structure Table 3 Cereal Producer Price in Mali and Neighboring Countries 1972/73 Table 9 Sorghum/Millet- Economiç Farm-gate Price (1973-1978onvards) 15. Farm Models and Budgets Table 1 Farm under Manual CultivationAdopting Improved Techniques Tab;Le2 Farm under Ox-Powered Cultivation Table 3 Cash Flow for Farm under Ox-Drawn Cultivation 16. Impact on GovernnentBudget Table 1 Impact of Project on ConsolidatedGovernment Finance Table 2 Detailed Proceeds from Taxes and Levies on Groundnuts Table 3 Foreign Exchange Benefits 17. Rate of Return Calculation Table 1 Project Economic Cash Flow Table 2 Economic Cash Flow Calculation- Project Benefits Table 3 IncrementalFarm Labor CHART Project Organization MAL'S 1. Project Area 2. Rainfall 3. On-going and Planned Road Improvement MIALI INTEGRATEDRURAL DEVELOPMENT PROJECT Summary and Conclusion i. Mali has asked IDA to help finance a project under which Government's ongoing "Operation Arachide" (OA) would be intensifiedand extended to new areas. OA is aimed at improving the productivityand incomes of farmers for whom groundnuts are the main cash crop. The intensifiedsecond phase program would emphasize the application of modern techniques to the cultivation of Mali's principal cereal crops, millet and sorghum as well as58 groundnuts. ii. The project would be carried out over the five years 1973/74 to 1977/78, cover an area of approximately125,000 km2 and benefit about one million of some of the very poorest people in the world. Average per capita income in the project area is about US$30. iii. Mali suffers from several developmentconstraints, the principal of which are: (a) distance from the sea, the closest sea ports are Dakar and Abidjan, both about 1,200 km from the capital, Bamako; (b) lack of mineral and other natural resources; and because of low and variable rainfall and generally poor soils, a weak agriculturalbase; (c) a serious shortage of skilled manpower, both technical and management;and (d) problems of communicationsdue to the size of the country, and its inadequate road anQ telecommunicationssystems. On the other hand, Mali has the advantage of a hardworking population accus- tomed to living under harsh climatic conditions and with a minimum of social services. iv. Serious droughts, more frequently the result of ill-distributed, than of insufficienttotal rainfall plague the country. Such droughts affected Mali adversely in 1968, 1970, 1972 and 1973, as a consequence food shortages occurred and massive bilateral and international food aid vas re- quired. External aid alone has enabled Mali to withstand the vagaries of the weather in recent years, and it is essential that the country's productive capacity be strengthened. This would