~.f. REST F,IC T1D Report No. SAM: Ap-i1 Public Disclosure Authorized ThiRdot- hmben prepared for ASIAN DEVELOPMENT BANK IZ ive of the Eak. APPRAISAL Public Disclosure Authorized OFTHE AGRICULTURAL DEVELOPMENT PROJECT IN WESTERN SAMOA Public Disclosure Authorized OCTOBER 1980AL R Public Disclosure Authorized CURMNCGY EQZJIVALENTS WasUof 30 usie 1980) GCarrency.-Unit Western Samoa Tala (WS$) i WS$ l O0 - US$1. 1060 US$1. 00 , WS$,. 4 (a) Since 27 October 1975 the WS$ exchange rate has been determined daily on the basis of the weighted basket of currencies used by New*Zealand. The Western Samoa Tala was devalued by 15 per cent an 20 June 1979. (b) For -purpose of calculations in the Appratisal Report, a rate of US$1 00 a WS$0. 9139 has been used. WEIGHTS AND MEASURES .1 acre * 0.405 hectares 1gallon 4. 546 litres 1 mile X 1.609 kilometres, 1 pound 0.454 kilograms 1 ton (2240 lbs.) . 1008 kilograms 1. board foot 1 piece of timber 12 inches by 12 inches by 1 inch NOTES -i) Throughout this report "1$"1 refers to U.S. Dollar. (it) The Fiscal Year for the Government and WSTEC begins on I January. ABBREVIATIONS ADAB - Australian Development Assistance Bureau DBWS - Development Bank of Western Samoa DOA - Department of Agriculture and Forests FAO - Food and Agriculture Organization of the United Nations -A- International Development Association PFL - Pacific Forum Line PW-D - Public Works Department SPDC - Special Projects Development Corporation SPDMIC - South Pacific Developing Member Country UNDP - United Nations Development Program USAID - United States Agency for International Dev,4lopment USP - UMAversity of the South Pacific WSTEC - Western Samoa Trust Estates Corporation PROJECT FOCUS, DESIGN AND RATIONALE. Agriculture is the mainstay of the econory and comprises two distinct subsectors: the smallholder and commercial. The primary gal of national policy is to increase agricultural production both for domestic consumption and export. The purpose of the Project is to assist the Government in its efforts to increase agri- cultural production through a more efficient utiliz-ation of the country's resources, and to provide increased income and employment oppor- tunities in the rural sector. The Project is designed to help the achievement of these objectives in both agricultural subsectors through the provision of agricultural inputs, infrastructure development and institution building. 2. The Project ints will include assistance to WSTEC, the largest commercial organization: to replant 1,000 acres of senile coconuts and plant 1 000 acres of cocoa under coconuts; fertilize existing cocoa and coconut; provide infrastructure facilities such as roads, fences, transport, storage sheds, drinking water, . livestock equipment and pasture improvement for cattle; expand existing soap processing facilities; replace coffee processing facilities; improve and expand coconut stem utilization facilities; and provide consultants' services for institution building and project implementation. The smallholder subsector will benefit from the Project through inputs to. DOA which is wholly responsible for research and extension for this subsector, for improving its applied research capabilities and extension service at the field level. The Project will provide DOA with research facilities in the major agroecological regions; a national Agricultural Extension Center for in-service training; construction of 21 field extension centers and improvem'ent to two others; provision of trans- port facilities; consultants' services for strengthening staff capacity; and provision of training fellowships for Samoans in agricultural research and extension. The total cost of the Project is $10.8 million of which the foreign exchange cost is $7. 0 million and the Bank' s contribution $3. 0 million. 3. The incremental project outputs at full development on an annual basis are estimated at 1,100 tons of cocoa valued at $2.9 million; 1,400 tons of copra valued at $611, 000; 500 tons of laundry soap valued at $588, 000; 400 tons of toilet soap valued at $1, 310, 000; 400 tons of soap powder valued at $1.9 million; ,Z5O0, 000 board ft of exportable grade timber; 430,000 board ft of .&nce post rmaterials; 90-120 tons of fuelwood and 30-50 tons of charcoal from coconut ster utilization facilities valued at $170, 000; and beef production of 68 tons valu`d at $60, 000. The total incremental annual value of the WSTEC component at full development is estimated at $7. 5 million. The output from the smallholder subsector due to the Agricultural Resear.h and Extetision component, though not easily quantifiable, can be expected to be siubstantial, given the present low productivity in the agricultural sector. With regard to the assumgtions of the Project, besidles the standard provisions and requirements contained in the loan agreements of the Bank, specific assurances were obtained frorn the. Government (para. 134, Pages 41-42) to ensure the successful implementation of the Project: organization of executing agencies; expeditioous dlearance, of imported goods for the Project; position classification of the extension service; appointments to vacancies in technical positions at DOA; and continuation of the Project after the investment period. The achievements and progress of the Project will be monitored through the Bank's operational activities such as review missions, and also the project benefit monitoring envisaged under the Project. 4. The major economic risk associated with the Project relates to th4 World market prices for cocoa and coconuts which are the major outputs of the Project. This risk, however, has been minimized by interplanting cocoa with coconuts which are subject to different market conditions. An institutional risk associated with the Ag.ricultural Research and Extension Component is the capacity of DOA to attract and retain suitable staff for the implementation of the Pr,oject. TABLE OF CONTENTS Page MAP1 (ii) MAP2 (iii) I. INTRODUCTION 1 II. BACKGROUND 3 A. General 3 B. The Agricultural Sector 3 C. Agricultural Products 4 D. Western Samoa Trust Estates Corporation 6 E. Agricultural Support Services 8 F. External Assistance to the Agricultural Sector 13 III. THE PROJECT 17 A. Objectives and Scope 17 B. Project Components 17 C. Details of Project Components 19 D. Project Costs 26 E. Financing Plan 28 F. Relending Arrangements with WSTEC 29 G. Environmental Impact 30 IV. PROJECT MANAGEMENT AND IMPLEMENTATION 31 A. Executing Agencies 31 B. Implementation Schedule 32 C. Procurement 32 D. Consultants 34 E. Accounts and Audit Reports 34 F. Project Benefit Monitoring System 34 V. PROJECT BENEFITS AND JUSTIFICATION 36 A. Benefits to the National Economy 36 B. Benefits to WSTEC 39 C. Social Impact of the Project 40 VI. CONCLUSIONS AND RECOMMENDATIONS 41 APPENDIXES 43 - gk * ; t7 LOOFW MAP OF WESTERN 2 SAMOA SAVAN'I ISLAND- Farmalo Satotu SOUTH FACIFIC OCEAN FaloWupea'l -f0009 Mt. Silisili SCAL-E 2 - , Mt.Mafne) - S 5 5 10 5 0 Miles _| ( Tuasivi Palauli 1119 UPOLU ISLAND L L. .1' r->>vs. 2 g--Alafua (USP)- : .w : .. t + - ; i¢LlWA. PIA,, tu - ' ' - ~R oa ds ,< Falutasi It SigaeleEtQ !4FerrybLp -i WSTEC. Estates S aXUteLBe y\- [,3 Government Land L NUULUA - Freehold Land . ; ' Govrnment* , Land, . ' .- 'L'A FreodLn 172'00'M1.r' ' WESTERN SAMOA:' AGRICULTURAL DEVELoPMENT PROJECT: Location of Project Activities WSTEC Component FAILEATA CASALA- COCONUT STEM UTILISATIoN TUANA IMATO> V FUGALEI. APIA FACTORY 3ILES - L-TAFAIGATA 4000 H000 METER VAI PAPA TAUSAG I ,4O' , S4A -D - ~~~WSTECII1ESTATES ,.| - WSTEC I ESTATES .- 17*;0'N . ' ' 17z00'N.: ' 0' - ' 0 ' -' i ) 2 ' ' ' -~ ; '''-.. y' *' Io .1NTR22OgDU A fonolbility o u y carried ovt in 1977 by FAO under a Bank technical gazzitanc- grant- examined the rehabilitation of Western Samoa Trust Jsmtates Corporration' s (WSTEC) 14 estates on Upolu Island in Western 3amoa. rollowing the receipt of the report, the Government of Western r!noa. and the Bank agreed that a phased rehabilitation of the estates would 'e more prudent and would not excessively tax the implefntenting capacity of WSTEC. In December 1977 the Bank approved a loanEL of $3. 0 million to Western Samoa for the rehabilitation of six WSTEC estates on Upolu Island. 2. In early 1979 the Government requested technical assistance to formulate a project for a second loan to WSTEC tp rehabilitate the other eight eatates. This was approved in October 19793-and three consultants were fielded in November 1979 to update certain aspects of the original feasibility study and to examine product processing in detail. In addition; in response to a request from the Government, the Bank provided two conanlotSs from the International Agricultural Development Service (IADXJ3Y-to examine the National Agricultural Research and Extension Services and to make recommendations for their improvement. A Project Formulation Mission dircussed the consultants' reports with the Government in November/December 1979 and these discussions led to an agreement about the scope of the Project discussed in ihs report. 3. An Appraisal Mission visited Western Samoa from 23 April to 13 May 1980 to appraise an Agricultural Development Project which was to comprise the rehabilitation of the other eight WSTEC E,(ftates and the streagthening of the Department of Agriculture and Forests' (DOA) Agricultural Research and Extension Services. The Mission comprised M. D. Bauche (Mission Chief), R. W. Arnison (Agronomist), N. Amerasinghe (Project Economist), 0. Gendrano (Forestry Specialist) and R. Keswani (Senior