Report No. 1561c-MLI Appraisalof the MOPTI11 Rice Project Mali Public Disclosure Authorized FILECOPY November2, 1977 Agriculture ProjectsDepartment West Africa RegionalOffice FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. Currency Equivalents Currency Unit - Mali Franc (MF) US$ 1 - MF 490 MF 1 - US$ 0.0020408 MF I Million - US$ 2,041 Weights and Measures I hectare (ha) 2.47 acres 1 metric ton (t) - 2,205 lbs. Fiscal Year Government Jan. 1 - Dec. 31 ORM Jan. 1 - Dec. 31 Abbreviations ADF African Developmeiit Fund BDM Banque de Developpement du Mali DNAFLA Direction Nationale de l'Alphabetisation Fonctionnelle et de la Linguistique Appliquee EDF European Development Fund FAC Fonds d'Aide et de Cooperation GERDAT Groupement d'Etudes et de Recherches pour le Developpement de l'Agronomie Tropicale IDA International Development Association IER Institut de l'Economie Rurale IRAT Institut de Recherches Agronomiques Tropicales et des Produits Vivriers OACV Operation Arachides et Cultures Vivrieres OPAM Office des Produits Agricoles du Mali ORM Operation Riz Mopti RMWA Regional Mission in Western Africa (of the World Bank/IDA) RWD Rural Works Department SCAER Societe de Credit Agricole et d'Equipement Rural SCET Societe Centrale pour l'Equipement du Territoire USAID United States Agency for International Development WARDA West Africa Rice Development Association Foa OFFIAL USE ONLY MALI MOPTI II RICE PROJECT Page No. SUMMARY AND CONCLUSIONS i-v I. INTRODUCTION 1........... ............ II. BACKGROUND .............. ...... 1 A. General ............... 1...... B. The Rural Sector . 2 C. Institutions in Agriculture .... ...... 3 D. Development Potential and Development Objectives . 4 E. Cereals Consumption and Production ............... 5 III. THE MOPTI I RICE PROJECT .......... .................... 7 A. The Project Area ........ ......................... 7 B. Project Description ..o ........... ................. 7 C. Experiences and Conclusions .............. ........ 8 IV. THE PROJECT . 10 A. Description . ............... ....... 10 B. Detailed Features .......... ....... 11 C. Organization and Management.. 14 D. Environment and Health ................ * ........ 16 V. PROJECT COSTS AND FINANCING ......................... 16 A. Project Costs ............ 16 B. Financing .... .00....... ...... 18 C. Procurement .......... .. ...... ........... 19 D. Disbursement ........... .......... .. ...... 20 E. Accounts, Audits and Reports ... .................. 21 VI. PRODUCTION AND YIELDS; MARKETS AND PRICES; FARMERS' BENEFITS; ORM FINANCES; GOVERNMENT REVENUE ............21 A. Production and Yields ........................... 21 B. Markets and Prices ...................... 23 C. Farmers' Benefits ........ ............ 24 D. Financial Implications for ORM and Government ..... 25 VII. BENEFITS AND ECONOMIC JUSTIFICATION .................. 25 VIII. AGREEMENTS REACHED AND RECOMMENDATION .............. .. 27 The doumeetha a retric_editrbuom an may be use by rcipientsonly in thepeftonce at * ociulduties I%s wefa y gm oewise be dit_osedwithout Wod Dek autborizution. MALI MOPTI II RICE PROJECT ANNEXES 1. Rice Production and Consumption in Mali Table 1 - Development of Rice Consumption in Mali, Total and Per Capita Table 2 - Per Capita Rice Consumption (Kg) in West African Countries Table 3 - Regional Structure of OPAM Cereals Purchases and Sales (1000 t) Table 4 - Rice Milling Capacity (Tons of Paddy) 2. The Project Area 3. Rice Cultivation Under Controlled Flooding 4. The Mopti I Rice Project (Cr. 277-MLI) Table 1 - Development of Cultivable Area Estimates of Mopti I Rice Project Table 2 - Development of Attributed, Sown and Harvested Area, Yields and Paddy Production of the Mopti I Project Table 3 - Development of Equipment on Mopti I Rice Farms Table 4 - Mopti I Rice Project: Breakdown of Participants by Farmers and Non-Farmers Table 5 - Distribution of Holdings per Family in the Mopti I Rice Project (1975/76) Table 6 - Adoption of Cultivation Techniques in the Mopti I Rice Project Table 7 - Cultivated Area and Cultivation Techniques Used in 1976/77 in the Mopti I Rice Project 5. Project Components Table 1 - Program of Civil Works Table 2 - Program of Deep Ploughing (ha) Table 3 - Construction of Offices, Houses, Sheds and Stores Appendix I - Functional Literacy Campaign Table 1 - Costs of Adult Literacy Program Appendix II - Applied Agricultural Research Appendix III - Agricultural Credit Table 1 - Agricultural Credit Needs Appendix IV - Terms of Reference for Technical Assistants 6. Assistance to the Rural Works Department, Bamako Table ' - Budget of Study Bureau, Rural Works Department Table 2 - Assistance to Rural Works Department - Proposed Utilization of Funds 7. Project Cost Estimate Table I - Project 'ost - Summary Table Table 2 - Project :.ost- Civil Works Table 3 - Project 'ost - Deep Ploughing Table 4 - Project ost - Buildings Table 5 - Project Cost - Engineering and Supervision Table 6 - Project (:ost - Vehicles and Equipment Table 7 - Project 'lost- Adult Literacy Campaign and Audio- Visual Program Table 8 - Project lost - ORM Staff and Technical Assistance Table 9 - Project Cost - ORM Operating Costs Table 10 - Project (ost - On-Farm Investment Table 11 - Project Cost - Assistance to Study Bureau of Rural Works Department Table 12 - Project (ost - Price Contingency Factors 8. Financing Plan and SchedlIe of Disbursements Table 1 - Financinc Plan Table 2 - Estimatec Schedule of Disbursements 9. Cultivated Areas, Yields, Production Table I - Development of Area (ha), Yield (t/ha) and Productioa (t ) - with Project Table 2 - Developmeat of Area (hectares), Yield (t/ha), and Production (t) - without Project Table 3 - Adoption Rates of Cultivation Techniques Table 4 - Cultivate: Areas and Paddy Production with and without tie Project 10. Market Prospects for Maliin Rice Table 1 - Estimate :)fDomestic Paddy Requirements in Mali, 1970/71 - 1985/86 Table 2 - Estimate of Domestic Production of Paddy 1968/69 1985/86 (wvithout the Project) Table 3 - Estimate of Prospective Demand and Supply Relations on Mali R:.-ceMarket, 1975/76-1987/88 (in 1000t of paddy) Table 4a - Export Paiity Price Table 4b - Import Sulstitution Price Table 5 - Developme t of the Rice Marketing Bareme for ORM, 1974/75 - 977/78 11. Farm Budgets Table 1 - Unit Costs of Farm Inputs (FM) Table 2 - Labor and Equipment Input of Farming Operations (days/ha) Table 3 - Inputs, Yields, and Revenue per Ha at Successive Stages of CultivationTechniques Table 4 - Land Rent and Development Levies - Rent Recovery Rates 12. FinancialImplications for ORM and Government Table 1 - Projection of ORM Revenue and Expenditure, 1978-1987 Table 2 - Import Subsidies Saved by IncrementalProduction (in FM/t) Table 3 - Impact of Project on GovernmentRevenue Table 4 - Cost Recovery Index and Fiscal Ratio 13. Economic Justification Appendix I - ConversionFactors for Costs in Local Currency Table 1 - Correlation of Input Costs and Yields per Hectare Table 2 - IncrementalProduction Costs Table 3 - IncrementalFarm Labor Inputs Table 4 - Rate of Return Calculation Implementation Schedule, Project Works Project Map MALI MOPTI II RICE PROJECT SUMMARY AND CONCLUSIONS Background (i) The Government of Mali has requested IDA, the African Development Fund (ADF) and French aid (FAC) to finance a rice development project in the Niger flood plains around Mopti. The project will build on the on-going Mopti Rice Project (Credit 277-MLI), which will terminate in mid-1978. (ii) Mali is one of the least developed countries in the world. Popula- tion is 6 million and per capita income about US$95. The economy, dependent on crop production (cotton, groundnuts, cereals) and animal husbandry, suffered severely from the droughts of the early seventies; in recent years, exports of groundnuts and cotton have increased considerably while the livestock subsector has not yet overcome the effects of the drought years. Production of food crops (coarse grains and rice) has responded vividly to better weather conditions and higher producer prices. Over the last few years, Mali has not been in need of cereals imports and has even exported modest amounts of coarse grains and rice to neighboring countries. Mali has a heavy deficit both in its national budget and in its balance of payments and no fundamental change is foreseen in this situation over the medium term future. The First Mopti Rice Project (iii) The First Mopti Rice Project, which became operational in 1972, aims at the improvement of rice cultivation conditions and techniques in the Niger flood plains. Main project components are the construction of polders (13,000 ha) along the Niger and Bani rivers, the rehabilitation of existing polders (18,000 ha), construction of offices, stores, workshops, etc. and technical assistance for the project authority, the Operation Riz Mopti (ORM). Total project cost was estimated at US$9.4 million at appraisal; the partici- pation of IDA was US$6.9 million, the participation of FAC 0.7 million. A supplementary IDA credit of US$2.6 million was approved in 1975 to offset the effects of the dollar devaluation and to finance changes in project design and certain cost overruns. FAC also increased its contribution by US$0.5 million. (iv) Civil works were virtually