· 2016-07-12 · document of the world bank for official use only report no: 35493-sn project...

Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No: 35493-SN

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 14.0 MILLION (US$20.0 MILLION EQUIVALENT)

TO THE

REPUBLIC OF SENEGAL

FOR AN

AGRICULTURAL SERVICES & PRODUCER ORGANIZATIONS PROJECT 2 IN SUPPORT OF THE SECOND PHASE OF THE

AGRICULTURAL SERVICES AND PRODUCER ORGANIZATIONS PROGRAM

May 25,2006

Environmentally and Socially Sustainable Development 4 (AFTS4) Country Department 14 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not otherwise be disclosed without World

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CURRENCY EQUIVALENTS

AAP AFD AfDB AgMARKETS ANCAR

APL ASPRODEB

CGIAR CIDA CLCOP

CMS CNCAS

CNCR

CRCR

DAPS

DIREL DRDR

EC ESW EU EurepGAP FA0 FNDASP

FNFL4A

(Exchange Rate Effective March 3 1, 2006)

Currency Uni t

CF AF... = US$1 U S $ ... = SDR 1.43783

FISCAL YEAR

January 1 - December 31

ABBREVIATIONS AND ACRONYMS

Africa Action Plan Agence FranCaise de De'veloppement (French Development Agency) African Development Bank Agricultural Markets and Agribusiness Development P r o g r a f l r o j ect Agence Nationale de Conseil Agricole et Rural (National Agricultural and Rural Advisory Agency) Adaptable Program Loan Association Se'ne'galaise pour la Promotion du Dkveloppement d! la Base (Senegalese Association for Grassroots-level Development) Consultative Group on International Agricultural Research Canadian International Development Agency Cadre Local de Consultation des Organisations de Producteurs (Producer Organisations' Local Consultation Forum) Crkdit Mutuel du Se'nkgal (Mutual Credit o f Senegal) Caisse Nationale du Cre'dit Agricole du SLnkgal (Senegal National Agricultural Credit Bank) Comite' National de Concertation et de Coopkration des Ruraux (National Council for Rural Cooperation) Cadre Re'gional de Concertation des Ruraux (Regional Rural Consultation Forum) Direction de I'Analyse, de la Pre'vision et de la Statistique (Directorate o f Planning, Analysis and Statistics, Ministry o f Agriculture) Direction de 1 'e'levage (Direction o f Livestock Services) Direction Rkgionale du De'veloppement Rural (Regional Directorate for Rural Development, Ministry o f Agriculture) European Commission Economic and Sector Work European Union Euro-Retailer Produce Working Group for Good Agricultural Practice Food and Agricultural Organization o f the United Nations Fonds National de De'veloppement Agro-Sylvo-Pastoral (National Rural Development Fund) Fonds National de Recherche Agricole et Agro-Alimentaire (National

11

GAP I C R IFAD IRSV

I S R A

ITA LIF LOASP MOA M O L MTEF NARS PIPP PL-DGS PLDP PNDL

P N R POGV

PPEA

PRSP PSAOP

PSAOP 1 PSAOP2 PSRA R&D SMTEF SNRASP

SONACOS

TFCU

Agricultural and Agroprocessing Research Fund) Good Agricultural Practices Implementation Completion Report International Fund for Agricultural Development Inspection Regionale des Services Vkterinaires (Regional veterinary services office) Institut Senkgalais de Recherche Agricole (Senegal Agricultural Research Institute) Institut de Technologie Alimentaire (Food Technology Institute) Local Investment Fund Loi d 'Orientation Agro-Sylvo Pastorale (Agricultural Framework Act) Ministry in charge o f Agriculture Ministry in charge o f Livestock Medium-Term Expenditure Framework National Agricultural Research System Private Investment Promotion Project Policy Letter for the Development o f the Groundnut Sector Participatory Local Development Project Programme National de Dkveloppement Local (National Local Development Program) National Rural Infrastructure Project Projet d 'Organisation et de Gestion Villageoise (Village Organization and Management Project) Projet de Promotion des Exportations Agricoles (Agricultural Export Promotion Project) Poverty Reduction Strategy Paper Programme de Services Agricoles et Organisations des Producteurs (Agricultural Services and Producer Organizations P r o g r a d r o j ect) First phase o f PSAOP Second phase o f PSAOP Plan Stratkgique de Recherche Agricole (Strategic Agricultural Research Plan) Research and Development Sectoral Medium-Tern Expenditure Framework SystBme National de Recherche Agro-Sylvo-Pastorale (National Agricultural Research System) Sociktk Nationale de Commercialisation des Olkagineuses du Sknkgal (Groundnut Oil Company) Technical and Fiduciary Coordination Uni t

Vice President: Gobind T. Nankani

Sector Manager: Mary Barton-Dock Country ManagedDirector: Madani M. Tall

Task Team Leader: Renato Nardello

SENEGAL Agricultural Services & Producers Organizations Project 2

CONTENTS

Page STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A .

1 . 2 . 3 .

Country and sector issues .................................................................................................... 1

Rationale for Bank involvement ......................................................................................... 2

Higher level objectives to which the project contributes .................................................... 4

B . PROJECT DESCRIPTION 4 Lending instrument ............................................................................................................. 4

2 . Program Objectives and Phases 4

Achievements o f the first phase as reported in the I C R ...................................................... 6

Project (phase 2) development objective and key indicators .............................................. 8

Lessons learnt and reflected in the project design ............................................................ 12

Alternatives considered and reasons for rejection ............................................................ 13

................................................................................................. 1 .

.......................................................................................... 3 . 4 . 5 Project components 9

6 . 7 .

. .............................................................................................................

C . IMPLEMENTATION ........................................................................................................ 13

1 . 2 . 3 . 4 . Sustainability ..................................................................................................................... 16

5 . 6 .

Partnership arrangements .................................................................................................. 13

Institutional and implementation arrangements ................................................................ 14

Monitoring and evaluation o f outcomes/results ................................................................ 16

Critical r isks and potentially controversial aspects ........................................................... 17

Credit conditions and covenants ....................................................................................... 18

APPRAISAL SUMMARY ................................................................................................. 19 D . 1 . 2 . 3 . 4 . 5 . 6 . 7 .

Economic and financial analyses ...................................................................................... 19

Technical ........................................................................................................................... 20

Fiduciary ........................................................................................................................... 21

Social ................................................................................................................................. 22

Environment ...................................................................................................................... 23

Safeguard policies ............................................................................................................. 24

Policy Exceptions and Readiness ...................................................................................... 25

i v

Annex 1: Country and Sector or Program Background ................................................................ 26

Annex 3: Results Framework and Monitor ing .............................................................................. 37

Annex 4: Detailed Project Description ......................................................................................... 42

Annex 6: Implementation Arrangements ...................................................................................... 69

Annex 7: Financial Management and Disbursement Arrangements ............................................ 72

Annex 8: Procurement Arrangements ........................................................................................... 86

Annex 9: Economic and Financial Analysis ................................................................................. 93

Annex 10: Safeguard Pol icy Issues ............................................................................................. 100

Annex 1 1 : Project Preparation and Supervision ......................................................................... 104

Annex 13: Statement o f Loans and Credits ................................................................................ 107

Annex 14: Country at a Glance ................................................................................................... 109

Annex 2: M a j o r Related Projects Financed by the Bank and/or other Agencies .......................... 35

Annex 5: Project Costs .................................................................................................................. 68

Annex 12: Documents in the Project F i l e ................................................................................... 106

Annex 15: M a p IBRD 29989 ...................................................................................................... 111

V

SENEGAL

AGRICULTURAL SERVICES & PRODUCER ORGANIZATIONS PROJECT 2

PROJECT APPRAISAL DOCUMENT

AFRICA

AFTS4

Date: April 28, 2006 Team Leader: Renato Nardello Country Director: Madani M. Tall Sectors: Agricultural extension and research Sector ManagedDirector: Mary A. Barton- (60%); Sub-national government Dock administration (25%); Agricultural marketing

and trade (1 5%) Themes: Rural policies and institutions (P);Rural services and infrastructure (P);Decentralization (S);Participation and civic engagement (S) Environmental screening category: Partial Assessment

Project ID: PO93622

Lending Instrument: Adaptable Program Lending

[ ] Loan [XI Credit [ ] Grant [ ] Guarantee [ ] Other:

For Loans/Credits/Others: Total Bank financing (US$m.): 20.00

Borrower: Republic o f Senegal Dakar Senegal

Responsible Agency: ANCAR

v i

bP Senegal Tel: 221 ASPRODEB Senegal Tel: +221-864-1208 Fax: +221-824-5765 FNRAA Fonds de Recherche Agricole et Agro-alimentaire Senegal Tel: +221-820-3510 Fax: +221-820-3511 fnaraa@sentoo. sn I S R A Institut Shegalais de Rechrche Agricole Senegal Tel: +221-832-2420 Fax: +221-832-2427 dgisra@isra. sn www.isra.sn Ministry o f Livestock Senegal Tel: 221-864-5091 Fax: 221-537-4081 Ministry o f Agriculture Building Administratif Senegal Tel: 221 823 39 74 ITA-Institut de technologie Alimentaire Dakar Senegal Tel: +221-859-0714 Fax: +221-832-8295 dgita@ita. s n

FY 7 8 9 Annual 6.00 5.00 5.00 Cumulative 6.00 11.00 16.00

10 0 0 0 0 0 4.00 0.00 0.00 0.00 0.00 0.00

20.00 I 20.00 20.00 20.00 20.00 20.00

vi i

Project development objective Ref: PAD B.2, Technical Annex 3 Increase smallholder producers’ access to sustainable and diversified agricultural services and innovations, in view of diversifying andor stabilizing their productions and increasing their food security.

Project description Ref: PAD B.3.a, Technical Annex 4 A, AGRTCULTURAL RESEARCH SYSTEM: The component will increase the capacity o f the National Agricultural Research System (NARS) through: (i) strengthening the institutional guidance o f NARS by increasing the capacity and redefining the role o f i t s Steering Committee; (ii) strengthening the capacity o f the main research institutions; (iii) supporting the evolution of FNRAA as the main national mechanism for both strategic/applied agricultural research and Research and Development subprojects. B-AGRICULTURAL ADVISORY SERVICES: The component will align ANCAR on the primary mission o f oversight and regulation o f the national agricultural advisory system based on demand-driven services, while supporting the extension o f the agricultural advisory system to all 320 rural communities and supporting the emergence o f a pluralistic network o f service providers. C-SUPPORT TO PRODUCER ORGANIZATIONS: This component will strengthen the capacity o f producer organizations to defend the interests o f smallholder producers and to facilitate their access to technical and economical services in order to increase their production, food security, and incomes. D-SECTORAL COORDINATION: The component will strengthen the capacity o f the two sectoral ministries (Agriculture and Livestock) on issues and activities concerning policy formulation, planning, coordination, monitoring, and evaluation o f the use o f resources allocated to agncultural and livestock development. This component will also support project coordination as well as monitoring and evaluation.

Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 10 OP 4.01 Environmental Assessment

OP 4.09 Pest management OP 4.12 Involuntary Resettlement OP 7.50 Projects on International Waterways BP 17.50 Disclosure Policy

Significant, non-standard conditions, if any, for: Ref: PAD C.7 Board presentation:

Loadcredit effectiveness: (a) financial management specialist, a procurement specialist, and a monitoring and evaluation specialist, all with qualifications and experience acceptable to the Association; (b) financial and administrative procedures, in form and substance acceptable to the Association; and (ii) updated the accounting software at the TFCU in manner satisfactory to the Association; (c)

The Recipient has recruited key staff o f the TFCU, including the project coordinator, a

The Recipient has: (i) adopted the Project Implementation Manual, including accounting,

The Recipient has hired an external auditor satisfactory to the Association, under terms

... V l l l

and conditions satisfactory to the Association, and consistent with the procurement guidelines. The Recipient has entered into agreements, in form and substance acceptable to the

Association, with FNRAA and ASPRODEB, respectively for the implementation o f the activities to be carried out under sub-component A1 and component C.

establishment o f a National Agro-S ylvo-Pastoral Development Fund (Fonds de Developpement Agro-Sylvo-Pastorale FNDASP), under terms and reference acceptable to the Association; and

substance acceptable to the Association.

(d)

(e) The Recipient has prepared legal texts, acceptable to the Association for the

(0 The Recipient has prepared a plan for the redeployment o f ANCAR’S staff, in form and

Covenants applicable to project implementation: The Recipient shall provide at least the equivalent o f CFAF10.8 b i l l i on (excluding taxes) for the co-financing o f the activities o f components A, B, and D o f the Project. These amounts shall be made available, on a regular and t imely basis, in accordance with the Recipient’s budgetary procedures and based o n the financing needs set out in annual work programs adopted by the Steering Committee.

i x

A. STRATEGIC CONTEXT AND RATIONALE

1. Country and sector issues Key elements of Senegal’s poverty reduction strategy. Senegal’s Poverty Reduction Strategy (PRSP, 2002-2005) i s based o n wealth creation, capacity building, social services, and assistance to vulnerable groups. In Senegal, poverty affects rural areas considerably more than urban areas. The incidence o f rural poverty varies between 72 percent and 88 percent, whi le in urban areas it ranges between 44 percent and 59 percent. Given the extent o f rural poverty, the Senegal PRSP considers rura l and agricultural development major engines o f shared growth. The PRSP highlights the need for the modernization and intensification o f agriculture, proposing solutions such as increased use o f new technologies, improved access to agricultural equipment and inputs, development o f agricultural training and advisory services, and support to producer organizations.

Key issues and constraints to rural development. Senegal’s recent relatively robust economic growth has only marginally benefited rural areas, where 58 percent o f the population lives. The share of the primary sector in GDP fe l l f rom 25 percent in the early 1960s to less than 20 percent in the 2000s, with agriculture alone dropping f rom 16 percent to less than 10 percent o f GDP in the same period. Nevertheless, 70 percent o f the rural population derives i t s l ivelihood f rom agriculture, wh ich remains largely dominated by smallholder producers cultivating rainfed crops and practicing extensive animal husbandry. Food security and rural revenues re ly main ly o n mi l le t and groundnut, which cover 38 percent and 37 percent o f cultivated areas, respectively. Groundnut growing occupies 700,000 family farms, for which it i s the main source o f monetary income (CFAF 81 b i l l i on in 2001) and a substantial contribution to food security (30 percent of groundnut production i s consumed as food by the producers). Stagnation o f agricultural productivity i s one o f the major constraints to agricultural growth and one o f the leading causes of the growing pauperization o f producers. Root causes include l imi ted access to knowledge, inputs and working capital; soil ferti l i ty degradation; decreasing quality o f seed stock; l imi ted diversification and intensification; and, until recently, inadequate response from agricultural services in addressing these issues. Gender inequalities in access to and control o f productive factors are further contributing aspects.

Country actions to address issues and constraints. The Government i s strongly committed to supporting rural development and the agricultural sector. A set o f sectoral reforms, translating into action the Pol icy Letter o f Institutional Development for the Agricultural Sector (1 999), have been implemented with the support o f the first phase o f the Bank-supported Agricultural Services and Producers Organizations Program (PSAOP). The new Agricultural Framework L a w (Loi d ’Orientation Agro-Sylvo-Pastorale, LOASP), approved in June 2004, outlines the Country’s vision for modernizing the primary sector over the next 20 years. The LOASP also constitutes the ma in pol icy framework for the proposed program. The L O A S P i s largely o n the principles inspired by the first phase o f the PSAOP: disengagement o f the public sector f rom productive and commercial activities, deconcentration o f sectoral staff, sustainable funding of demand-driven agricultural services, empowerment o f producer organizations, competitive funding of research activities. Provisions o f the L a w include the establishment o f the Nat ional Rural Development Fund (Fonds de DCveloppement A g o - S y l v o Pastoral or FNDASP). Once fully established, the FNDASP will finance the agricultural and rural advisory services as w e l l as

1

the support to producer organizations'. Furthermore, Senegal adopted a Policy Letter for the Development o f the Groundnut Sector (PL-DGS), in May 2003. The PL-DGS aims to develop the potential o f the groundnut sub-sector through greater private sector participation, enhanced productivity, improvement o f groundnut seed stocks, quality management, and a more effective regulatory framework. Implementation o f the PL-DGS i s ongoing but implementation o f i t s strategy to reconstitute the groundnut seed capital i s lagging behind schedule and wil l require targeted support from the donor community.

2. Rationale for Bank involvement

The Bank has led the policy dialogue on the agricultural sector since the sectoral adjustment programs o f the 1990s. The PSAOP has been instrumental in defining the sectoral reforms, the implementation of which requires support in the medium-term, as originally foreseen in this Adaptable Program Loan (APL). The Bank has a comparative advantage in supporting this operation because o f i t s long-term involvement in the sectoral policy dialogue and in the first phase o f the program in Senegal.

The second phase o f the PSAOP (PSAOP2), embodied in the current Country Assistance Strategy (CAS)2, i s a key instrument in fighting rural poverty and modernizing the agricultural sector. PSAOP 1 supported laying the institutional foundations for more effective intervention in the agricultural sector and established a network o f producer organizations and advisory services in 142 out o f the 320 rural council areas o f Senegal. PSAOP2 wil l expand this network to al l rural areas, facilitating producers' access to agricultural services and knowledge, with the ultimate goals o f increasing agricultural productivity and diversification, stabilizing production and improving household food security, while equitably addressing the needs o f the different categories o f rural people.

PSAOP2 i s an opportunity for the Bank to complement i t s rural portfolio in Senegal, which includes the Agricultural Markets Development Program (PDMAS), the Afr ica Emergency Locusts Project (AELP), the Integrated Coastal and Marine Resource Management Project (GIRMaC), and the forthcoming Participatory Local Development Program (PLDP). Specifically, the project wi l l create synergies with the PLDP and the PDMAS. The PLDP supports the decentralization agenda and strengthens rural infrastructures, community-based organizations, and social services. The PDMAS supports economic operators involved in the agricultural supply chains, from producers to exporters. PSAOP2, the PDMAS, and the PLDP integrate well without overlapping. They target different actors in the rural space (producer organizations, specialized producers and exporters, local governments and community-based organizations, respectively) and different activities (agricultural services, export markets, socioeconomic services and infrastructures, respectively). More specifically these three projects wil l develop mutually reinforcing activities, as specified in the following paragraphs (see also annex 2).

The PSAOP wil l target producer organizations, sectoral ministries, agricultural research institutions, and extension services. I t wil l support the emergence o f alternative agricultural

' As per Article 72 o f the LOASP FY03-FY05 CAS (Report No. 25498-SE), discussed at the Board on April 17,2003

2

services providers that can contribute to support P D M A S activities. The PSAOP wil l strengthen the technical and organizational capacity o f producers in undertaking economic activities that could then become eligible for-and be scaled up with-PDMAS support. The PDMAS, in turn, wil l target market-oriented agricultural business. I t will focus o n specific agricultural regions and products and provide guidance for promising approaches and activities that can be tested by the PSAOP at the level o f producer organizations.

The PLDP wil l target poor communities and local governments. I t wil l strengthen participatory planning and local development while providing resources for promoting local economic initiatives, These activities wil l contribute to support the activities o f the Local Fora for Rura l Consultation (CLCOP) supported by the PSAOP. Socio-economic infrastructures supported by the Local Investment Fund (LIF) wil l improve living and work ing conditions in communities and provide better access to markets, thus increasing economic opportunities for rural communities, The LIF will support the provision of advisory services in rural areas and i t s implementation will be closely coordinated with the activities implemented by PSAOP2, notably through active participation o f CLCOPs in the selection o f activities for LIF financing.

PSAOP2 wil l be a k e y instrument in supporting the implementation o f the Policy letter o n the groundnut sector at the f ield level. PSAOPl piloted significant experiences o n producing quality groundnuts and improving the level and quality o f seed stock at the community level. These activities, which resulted in improved productivity and higher selling prices for the producers, wi l l be replicated and expanded under PSAOP2 to encompass a l l sector stakeholders (the ministry, research institutions, advisory services agency, producer organizations, and communities). Successful pilots wi l l be scaled up through other programs (including P D M A S and the forthcoming European Commission program to support the groundnut sector).

Finally, PSAOP2 supports the implementation o f the Wor ld Bank’s Af r ica Act ion Plan (AAP, September 2005) in Senegal. The PSAOP would support the implementation o f A A P ’ s objective “Drivers o f growth: strengthening agriculture ”, in that i t supports agricultural research and innovation, improvements in farming methods, increased productivity, and connecting the poor to markets, as we l l as building public and private sectors capacity for competitiveness in the sector. Being co-financed pari passu with FAD, PSAOP2 i s also relevant to the AAP action “Strengthening the impact o f partnerships”, in that i t wil l improve donor alignment and harmonization o f procedures and practices.

The commitment o f the Country i s demonstrated by i t s determination in implementing the institutional reforms in the sector and its commitment to put the agricultural sector at the center of i t s development strategy. Recent evidence o f this i s the approval o f the LOASP, the reduction of the Government’s stake in A N C A R to less than 50 percent, and the earmarking o f funds in the 2006 national budget for the National Rural Development Fund and the substantial increase of the Government co-financing for PSAOP2. As the PSAOP has successfully attained i t s development objectives and completed the triggers3 to move to the second phase, Senegal requested Bank support for the second phase o f the APL.

A table summarizing the achievement of PSAOP 1 triggers i s inc luded in annex 1.

3

3. Higher level objectives to which the project contributes The project i s fully aligned with the country’s sector strategies, which it has helped to define. I t contributes to the Borrower’s objective o f poverty reduction and economic growth in rural areas by boosting agricultural productivity, production, and smallholder producers’ income and food security. I t wi l l be an instrument for the implementation o f the Agricultural Sector Law and wil l support the implementation o f some measures o f the Policy Letter o f Development o f the Groundnut Sector . As noted above, the PSAOP remains highly relevant to the poverty-reduction agenda o f Senegal. The areas covered by the project (agricultural productivity and diversification, agricultural services, rural development policy, support to producers organizations) are at the core o f the PRSP. The Government i s expected to finalize the new PRSP (PRSP2) by mid-2006. The PRSP2 wil l form the basis for the FY07-10 CAS, currently under preparation, which i s expected to focus on three main axes: (i) strengthening the drivers o f growth; (ii) human resource development; and (iii) rural and urban synergies.

By laying the groundwork for a sustainable increase o f agricultural productivity and production, the project wi l l improve rural incomes and food security, thus contributing to the Mil lennium Development Goals o f eradicating extreme poverty and hunger.

B. PROJECT DESCRIPTION

1. Lending instrument The proposed Agricultural Services and Producer Organizations Project (PSAOP2), i s the four- year second phase of an Adaptable Program Loan (APL), originally consisting o f three phases, two of three years and the third o f four years. The choice o f the APL instrument was based on the long-term commitment needed to support institution building in a complex sector. The first phase took more time than originally foreseen but satisfactorily achieved al l o f i t s objectives with a substantial institutional development impact, as rated by the Implementation Completion Report (ICR, see below). The second phase wil l build on this outcome and translate the institutional achievements into results at the field level. Taking stock o f lessons from the first phase, the Government and the World Bank agreed to extend the duration o f PSAOP2 to four years, rather than three as originally planned. In fact, PSAOPl implementation took more than five years and the experience o f the Africa region clearly indicates that three years are not enough to achieve the PDO o f most projects.

2. Program Objectives and Phases The development objective o f the Agricultural Services and Producer Organizations Program (PSAOP) i s that producers, supported by agricultural services, utilize adapted innovations for increasing and stabilizing agricultural productivity, production and food security. The focus o f the program i s on: (i) institutional reforms to make agricultural services accountable, more demand-driven and cost-efficient, and to increase the participation in a number o f functions hitherto executed only by the public sector; (ii) generating and adopting innovations so as to maintain and increase agricultural productivity and production in a sustainable way; and (iii) fostering empowerment, capacity-building, greater social accountability and inclusiveness o f producer organizations.

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The long-term vision o f the PSAOP i s characterized by: (i) strong and effective producer organizations capable o f co-managing the nature and quality o f the services they receive and cofinance, as well as o f influencing the policy dialogue in the sector; (ii) efficient and deconcentrated sectoral ministries focusing on their essential functions o f pol icy formulation, planning, monitoring and evaluation, as well as the definition o f the regulatory framework; and (iii) financially sustainable and demand-driven agricultural services (including private service providers) that are relevant to the needs o f different categories o f producers and accountable to them, evolving in a competitive environment and responsible for the generation and dissemination o f innovations on a contractual basis.

The obiective o f the f i rst phase (PSAOP1) was to reform the institutional framework and environment o f agricultural services, while supporting the empowerment o f producers’ organizations. The overall outcome o f the f i rs t phase has been rated satisfactory by the Implementation Completion Report (ICR, Report n. 35062). PSAOP 1 effectively helped to empower producer organizations, to establish decentralized and demand-driven agricultural services in some o f Senegal’s rural areas, and to increase their responsiveness and accountability to producers.

The reforms and approaches gromoted by PSAOP1, in addition to the results achieved in the field, strongly influenced Government officials and policy makers within the sector ministries. The promulgation o f the new framework law for agriculture (Loi d’orientation agro-sylvo- pastorale - LOASP), in June 2004, brought legal recognition to-and confirmed the relevance of-the institutional reforms supported by the PSAOP. The LOASP provides the institutional sustainability for the reforms supported during the f i rst phase as wel l as the framework for their financial sustainability.

The cost o f the first phase was US$41.1 million, including a Government request o f US$ 27.4 mi l l ion from IDA.

The objective o f the second phase (this project) i s to increase access for smallholder producers to effective and diversified agricultural services and innovations, with a view to diversifying andor stabilizing their productions and increase their food security. To reach this objective, the project wil l strengthen the institutional framework established during the first phase, extend the coverage o f agricultural advisory services nationwide, support the emergence o f private service providers, strengthen research capacity and focus, and further empower producer organizations while increasing their social accountability and representation (details in the next section). By the end of this phase, most o f the activities implemented under the project wi l l be hnded though the FNDASP. The cost o f the second phase i s estimated at US$48.0 million, including a Government request o f US$20 mi l l ion from IDA. The obiective o f the third phase o f the program wil l focus on increasing agricultural productivity and rural incomes in al l rural Senegal. The PSAOP3 wil l phase out investment support to the sectoral ministries, which should then be able to receive budget support. The duration o f the third phase wil l be four years and the estimated cost i s US$86 million, including a Government request for US$22.4 mi l l ion from IDA.

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The total cost o f the program (see Table 1 below) will be US$174 million, o f which US$69.8 mi l l ion from IDA.

Table 1: PSAOP phases and cost (US$ Million) Government Beneficiaries IDA IFAD Other Donors TOTAL

Phase I 13.5 0.2 27.4 0 0 41.1 Phase I1 20.0 1 .o 20.0 670 0.0 47.0 Phase I11 40.9 6.6 22.4 10.0 6.0 85.9 Total Program Cost 74.4 7.8 69.8 16 6.0 174.0

3. Achievements o f the first phase as reported in the ICR4.

The PSAOP 1 Implementation Completion Report (ICR) rated the institutional development impact o f the project as substantial, and highlighted the following major achievements:

Redefinition of the role o f sectoral public services: the Ministry o f Agriculture and the Ministry o f Livestock disengaged from productive and marketing activities. They refocused on their core public functions o f policy formulation, monitoring and evaluation, with the creation o f specific directorates for policy analysis, forecasts and statistics. Services have been de-concentrated for both ministries, with the creation o f Rural Development Regional Directorates (DRDRs) and Veterinary Regional Inspections (IRSVs). DRDRs focus on field activity monitoring, statistical data collection, control and regulation, elaboration o f regional and departmental agricultural policies. IRSVs are responsible for designing, controlling and monitoring actions related to control o f epizootic diseases, supervision o f private veterinary practices, and animal food safety. Seventy percent o f ministerial staff has been assigned to decentralized offices. The elaboration o f the LOASP demonstrated that public agricultural staff i s now less reluctant and more active in collaborating and consulting with producers organizations. Thanks to the support o f the PSAOP, Senegal has achieved the status o f country free from Rinderpest Disease, a fatal viral disease o f domestic cattle. Thanks to the strengthened veterinary services, Senegal has also been one o f the f i rs t African countries to put in place an action plan against the Avian Flu.

From top-down extension to decentralized rural and agricultural advisory services: PSAOP1 helped establish a semi-public National Agency for Agricultural and Rural Advisory Services (ANCAR), co-managed with POs and private ago-businesses. Through ANCAR, the PSAOP has replaced the top-down model o f dissemination o f technical packages with demand-driven support for producers' needs. A N C A R operates in 144 rural communities, where 105 Agricultural and Rural Advisors assist POs in the formulation and implementation o f agricultural development activities, under contractual arrangements. In PSAOPl, more than 3,000 contracts have been executed for a total value o f CFAF 365 million, including a producer participation o f CFAF 131 mi l l ion (36 percent). Extension activities have benefited more than 1,460 POs representing 24,000 producers as direct beneficiaries, and almost 54,000 people as indirect beneficiaries. These agricultural advisory programs cover a wide range of issues and activities ranging from agricultural techniques and livestock production to organization and management o f POs. In addition, ANCAR

'

World Bank, Implementation Completion Report o f PSAOPl (Report n. 35062), 2006 (forthcoming).

6

increasingly plays the role o f intermediary between producers and other service providers, on issues that are beyond ANCAR’s core competencies.

z Demand-driven services will lead to the emergence of private services: many multi- stakeholder workshops were organized with producers to plan activities, and then to evaluate and draw lessons. Some initiatives led by federations o f producer organizations, such as a pi lot project for producing high-quality groundnuts, have introduced the idea o f private delivery o f services. I t i s too early to measure the economic impact o f such developments, especially on productivity, but beneficiary assessments o f agricultural services show that agricultural services and advisory programs supported by PSAOP1 do answer the demand and needs o f producers.

Transparent and competitive research financing mechanism: the project supported the establishment o f the National Fund for Agricultural Research (FNRAA), a competitive funding mechanism for agricultural and agro-processing research programs. By separating the funding o f research from i t s execution, FNRAA has increased the transparency o f resource allocation to research projects. FNRAA funds are accessible to a range of competencies that goes beyond the traditional and dominant research institutes. FNRAA has contributed to forging partnerships between research institutions, institutions and private operators, such as agro-processors. Producers take part in the decision-making process and are involved in the implementation o f research programs at field level. PSAOP has also helped strengthen the scientific and managerial capacities and competitiveness o f the two major research institutions ( ISRA and ITA).

j Effective participation of producers in policy formulation: thanks to PSAOP1, POs have taken part in decision-making processes as genuine advocates o f proposals. For instance, the contribution o f the national umbrella federation o f POs (CNCR) to the formulation o f the agricultural framework law (LOASP) has been substantial. Producers also chair the management committee o f FNRAA, and thus play their part in ensuring that research programs are relevant to the needs o f the producers.

z Producer empowerment at the grassroots levels: a network o f rural consultative fora (CLCOPs) has been successfully established in 152 rural council areas (out o f 320) to organize the demand o f producers and their organizations. Thanks to the PSAOP, producer organizations now fully contribute to the definition, implementation and evaluation of research and extension programs. POs have established and managed their own capacity- building fund (FSRRD - Demand Driven Rural Services Funds), which allocates resources to micro-projects prepared by POs and selected within the framework o f CLCOPs. CLCOPs cover 63 percent o f POs inventoried in the rural areas covered by the project and represent almost 50,000 producers. By the end o f PSAOP1, the FSRRD had financed more than 1,100 projects (against an initial objective o f 852) for a total equivalent amount o f US$700,000. Projects benefited almost 62,000 producers, covering themes such as agricultural production, post-harvest operations, organization and management o f POs. Beyond managing FSRRD, CLCOPs have been instrumental in organizing consultation with grassroots organizations and disseminating information to producers. Many development partners now recognize CLCOPs as the entry point for any activity dealing with producers and their organizations at the field level.

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The draft I C R concludes that the f i rst phase was successful in promoting changes and that further efforts are required to sustain these achievements and to maintain the momentum o f institutional changes, agricultural services reorganization, and producers’ empowerment. Research institutions and agricultural advisory services wil l be able to further increase their responsiveness and accountability to producers if the latter are empowered to manage the resources that finance their services. A s far as public services are concerned, the two sectoral ministries need to strengthen their new mandates by taking a more active part at the central level in ensuring the overall coordination and monitoring and evaluation o f the agricultural sector. At the regional level, regional directorates wi l l translate their new missions into day-to-day activities for f ield agents. Moreover, beyond institutional reforms, economic impacts should n o w be a core objective o f a l l these activities to achieve concrete results in terms o f agricultural productivity and incomes. Annex 1 includes a table presenting the satisfaction o f the triggers o f PSAOPl .

4. Project (phase 2) development objective and key indicators The development objective o f the second phase i s to increase access o f smallholder producers to sustainable and diversified agricultural services and innovations, in order to increase agricultural productivity, stabilize production, and improve household food security.

The key performance indicators for the project are the following:

At least 80 percent o f producers are satisfied with the services contracted At least 50 percent o f producers who are members o f POs participating in PSAOP1 have adopted at least one innovation and have integrated i t into their production system. Food security has increased for at least 60 percent o f producers supported by the PSAOP

Intermediate outcome indicators are presented in Annex 3 (Results Framework and Arrangements for Results Monitoring). The Project Implementation Manual wil l include a monitoring and evaluation section describing key performance indicators (down to the output level) for a l l program activities, including safeguard measures.

The following triggers wi l l condition the passage to the third phase:

The National Rural Development Fund (FNDASP), effectively covers the operational costs o f basic rural advisory services and FNRAA; The Ministry o f Agriculture and the Min is t ry o f Livestock have each defined and started to implement a Medium-Term Expenditure Framework for the agriculture and livestock subsectors, translating the LOASP in to coherent programs; Advisory services and the network of CLCOP are established in a l l rural council areas o f Senegal (320); At least 5 economic operations at the national level, and 10 at the regional level, have been successfully implemented by Producer Organizations, based o n contractual arrangements with research institutes and private providers o f advisory services, as w e l l as with credit institutions and commercial operators.

8

5. Project components The project design substantially reflects that o f phase one, while taking into account lessons learnt and the evolution o f the context since the initial conception o f PSAOP in 1999. To highlight the main thrusts o f the project and to improve flexibility in the allocation o f resources, activities wil l be clustered into four main components, each focusing on one o f the four main themes5: A) agricultural research, B) advisory services, C) producer organizations, and D) sectoral coordination.

Component A: Support for the Agricultural Research System (US$lO.O million, of which IDA US$5.5 million). This component w i l l increase the capacity, as well as the relevance, efficiency, and sustainability, o f the National Agricultural Research System (NARS) through: (i) strengthening the institutional guidance o f NARS by increasing the capacity and redefining the role o f i t s Steering Committee; (ii) strengthening the capacity o f the main research institutions ( ISRA and ITA) by providing ad-hoc investment and capacity-building support; (iii) supporting the evolution o f FNRAA as the main national mechanism for both strategidapplied agricultural research and “Research and Development” (R&D) subprojects; and (iv) strengthening linkages with other research systems through regional and international partnerships, including via the forthcoming West African Agricultural Productivity Program (WAAPP, FY07). The component comprises two subcomponents: 1) Strengthening FNRAA and NARS management; and 2) upgrading NARS scientific capacity.

Subcomponent A l : Strengthening FNRAA and the strategic management of the NARS (US$5.0 million, o f which IDA US$3.0 million). This subcomponent wi l l comprise two clusters o f activities: A.l.l) Supporting the FNRAA Management Committee’s transition toward becoming the NARS Steering Committee, with the institutional mandate and capacity to guide the research system in terms of orientations, priorities, and allocation o f resources; A.1.2) Strengthening the FNRAA as the main mechanism for funding agricultural research projects relevant both to the strategic plans o f the NARS and to regional priority themes. To this end, the subcomponent will support the evolution o f FNRAA towards a two-window funding facility. The first window wil l finance strategic and applied agricultural research programs relevant to the priorities identified in the National Agricultural Research Framework. The second window wil l finance demand-driven agricultural R&D subprojects submitted by beneficiaries, which focus on resolving productive constraints on smallholders and on increasing their income.

The subcomponent wil l finance the research financing windows; operating costs-including salaries-of FNRAA (up to a maximum o f five percent o f the endowment for research activities); vehicles, equipment, training, study tours. Funding o f FNRAA will be degressive, as it i s expected that the government and other donors (including the private sector) will progressively increase their contribution to both the endowment and operating costs o f FNRAA.

Subcomponent A2: Upgrading and maintaining the scientiJic capacity of NARS actors (US$5.0 million, o f which IDA US$2.5 million). This subcomponent wil l further strengthen the capacities of Senegal’s main agricultural research institutions ( I S R A and ITA), which were established

PSAOPl had seven components and seven implementing agencies (the same seven asthan in PSAOP2).

9

under PSAOP 1. The subcomponent wi l l support the rehabilitation o f physical infrastructure (some o f I S R A ’ s regional research centers); equipment, materials and vehicles for the research teams; technical assistance, studies, and training (on scientific and methodological issues); information system, management o f research results, publications and documentation; participation in national, regional, and international research networks and workshops. Regional partnerships for capacity building in biotechnology would be encouraged under this subcomponent, including through the forthcoming regional WAAPP.

Component B: Agricultural advisory services (US$17.6 million, of which IDA US$4.7 million). PSAOPl supported the creation o f ANCAR (National Rural and Agricultural Advisory Agency) and i t s deployment in 142 o f the 320 Rural Councils6. The second phase will align ANCAR o n the primary mission o f oversight and regulation o f the national agricultural advisory system based on demand-driven services, while supporting the extension o f the agricultural advisory system to all 320 rural communities and supporting the emergence o f a pluralistic network o f service providers. The component wi l l comprise two subcomponents: 1) national rural and agricultural advisory system, and 2) offer o f agricultural advisory services.

Subcomponent B l : Supporting the strategic and methodological guidance of the national agricultural and rural advisory system. Activities will comprise the redeployment o f A N C A R staff to establish a network of rural advisors for the provision o f basic (as opposed to specialized) advisory services and the preparation o f advisory program in al l 320 rural councils; the definition of methodological and technical supports and manuals; and the implementation o f an integrated information system on agricultural and rural technologies (SITAR).

Subcomponent B2: Strengthening the offer of agricultural advisory services. Activities wil l include: a) supporting the emergence o f a pluralistic network o f agricultural advisors for the provision o f specialized services (high value-added activities for which the producers are willing and able to pay); b) conception and implementation 9 f rural advisory services addressing the main technical constraints identified by producers (community seed production, improvement o f livestock systems, production of quality groundnut, etc.); c) a study on the classification o f family producers and their organizations in order to assess their capacity to generate a demand, as well as their willingness and capacity to pay, for agricultural advisory services.

Salaries and operating costs o f ANCAR wil l be financed by the Government on the basis o f ANCAR strategic plan conditioned on the deployment o f ANCAR advisors into rural council areas. The component wil l contribute to financing technical assistance, studies, equipment, vehicles, minor c iv i l services rehabilitation works, and a decreasing share o f the cost o f basic advisory programs. These wil l be entirely funded by the FNDASP and by clients’contribution, at the latest by the end o f the phase.

Component C: Support for producers organizations (US$8.3 million, of which IDA US$S.O million). This component wil l strengthen the capacity o f producer organizations (POs) to defend the interests o f smallholder producers and to facilitate their access to technical and economical services in order to increase their production, food security, and incomes. The component

Communautb Rurales in French

10

comprises three subcomponents: 1) social representation and inclusiveness, 2) participation in po l icy formulation, and 3) technical and economic capacity.

Subcomponent Cl : Strengthening social representation and inclusiveness of local and regional producer organizations (US$2.7 mill ion, o f which IDA US$1.7 mill ion). This subcomponent wi l l support the extension of the network o f Rural consultative for a (CLCOPs) to a l l 320 rural council areas of Senegal. As in the first phase, the newly established CLCOPs wil l al low POs to conceive and implement capacity-building subprojects. First-generation POs wil l receive logistical and technical support to strengthen the role o f rural development facilitators at the local level. The inclusion o f women in decision-making bodies o f POs, CLCOPs and CRCRs wil l receive special attention.

Subcomponent C2: Strengthening producer participation in policy formulation (US$2.8 mill ion, IDA US$1.7 mill ion).This subcomponent wi l l strengthen the capacity o f POs to participate in the formulation, monitoring, and evaluation o f sectoral policies, according to the orientations o f the LOASP. To this end, the subcomponent wil l support: (i) capacity building o f PO leaders at the national, regional, and local levels; (ii) information and communications programs for producers and their organizations; and (iii) creation o f a demand-driven facil i ty to strengthen the capacity and representation o f POs’ national federations.

Subcomponent C3: Strengthening technical and economic capacity of smallholders and their organizations (US$2.6 mill ion, o f which IDA US$1.6 mill ion). This subcomponent will test solutions to the main technical and economic constraints faced by producers in the fields o f production, processing, and marketing. Activit ies wil l be conducted in close collaboration with ANCAR, agricultural research actors, and other IFAD-supported projects. Replication o f positive p i lo t experiences wil l be promoted through other programs, particularly the Bank-supported AgMARKETS and the E C STABEX funds to support the groundnut subsector. This component wi l l be implemented by ASPRODEB.

Component D: Support for sectoral coordination (US$10.5 million, o f which IDA US$4.2 million). This component wi l l strengthen the capacity o f sectoral ministries (Agriculture and Livestock) on issues and activities concerning pol icy formulation, planning, coordination, monitoring, and evaluation of the use o f resources allocated to agricultural and livestock development. I t will further support the activities, initiated in phase 1, o f developing the capacity o f the sectoral ministries and strengthening their effective deconcentration, whi le developing clear organizational procedures and a network for exchanging information and monitoring results. This component will comprise three subcomponents: 1) agricultural subsector, 1) livestock subsector, and 3) project coordination.

Subcomponent D l : Support for sectoral coordination of the agricultural subsector (USs5.5 mil l ion, o f which IDA U S 1 . 2 5 mill ion). This component wil l support the definit ion and implementation of a sectoral medium-tern expenditure framework; the establishment of a subsectoral integrated information system; and the development o f tools, procedures, and strategies for the rational use of the physical, financial, and human resources o f the ministry and the implementation o f the national agricultural and rural training strategy, at national and regional levels. To this end, this component wi l l finance training, technical assistance, equipment, rehabilitation, andor construction o f infrastructure at the regional level, study tours, logistical and communication methods.

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Subcomponent 0 2 : Support for sectoral coordination of the livestock subsector (US$2.0 mil l ion, of wh ich IDA US$1.25 mill ion). This component will support the definit ion and implementation of a subsectoral medium-term expenditure framework, strengthen epidemiosurveillance and the control o f animal-food safety; and improve the management information system o f the livestock subsector. This component wi l l be the preferential mechanism to support the implementation of measures against the Av ian Flu and other epizootic diseases that could appear in Senegal. The component wi l l finance training, technical assistance, equipment, rehabilitation, andor construction o f infrastructure, study tours, logistical and communication means.

Subcomponent 0 3 : Technical and fiduciary coordination and monitoring of the project (US$3.0 mil l ion, o f wh ich IDA US$1.7 million). This component will support the operational cost o f the team responsible for coordinating and monitoring the overall activities o f the project. The unit wi l l be responsible for the f low o f information between components and with the Bank, the oversight and fiduciary control o f procurement and financial management, as we l l as monitoring and evaluation o f project activities. The T F C U wil l also be responsible for the implementation of the environmental safeguard measures, in collaboration with ANCAR and ASPRODEB. The subcomponent will finance operating costs o f the TFCU (including salaries), vehicles, equipment, technical assistance, training, studies.

6. Lessons learnt and reflected in the project design The design o f PSAOP2 reflects: (i) the Bank’s overall experience in implementing projects in Senegal; (ii) findings of recent economic and sector work; and (iii) lessons learned in previous projects, particularly the first phase o f PSAOP.

Timely availability of Government’s contributions is crucial. As the Government commits i tself to covering a larger share o f operational expenses, t imely planning o f contributions f rom the national budget will be crucial to ensure satisfactory implementation o f project activities, particularly considering the evolution towards degressive support o f certain components (FNRAA, ANCAR, and Ministries) and the introduction o f the FNDASP.

Institutional reforms take time to define and, once approved, there is a need to support their implementation. The program i s an APL to take into account the need for long-term support. In addition, the duration o f this second phase has been increased f rom three to four years.

Quality and motivation of human resources to accompany deconcentration remain key constraints to effective redefinition of the role of the public sector. The project wil l improve the working conditions o f decentralized structures and support the recruitment o f young, highly qualif ied staff.

Multi-stakeholder financing mechanisms: PSAOP 1 showed that multi-stakeholder mechanisms for allocating funds (such as FNRAA, ANCAR and CLCOP) are relevant. These mechanisms have proven effective in fostering dialogue, partnership, and collaboration among institutions, as we l l as in ensuring stronger coordination at f ie ld level. PSAOP2 interventions wi l l continue to be implemented through these types o f mechanisms, wh ich have been institutionalized by the agricultural framework l aw (LOASP).

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POs are key drivers to foster changes and ensure sustainability: PSAOP1 showed that institutional reforms and the development o f new relationships between clients and service providers can b e fostered if producers are empowered and able to contribute to the services they need. Demand-driven services become relevant, efficient, and accountable thanks to producer empowerment that builds the demand side. PSAOP2 wil l deepen this approach by channeling more financial resources through producer organizations to increase accountability and client- orientation o f agricultural services.

Training empowers producers and gives access to new technologies, but resources for relevant investments are also needed. In PSAOPl, the FSRRD financed demand-driven training activities for producer organizations. In PSAOP2, the FSSRD will provide more attention to the economic content o f the services provided. The liaison with the PNDL Investment Fund wil l contribute to financing productive investments and infrastructure.

7. Alternatives considered and reasons for rejection The project wou ld continue to be implemented as an APL. This instrument was selected in order to al ign the financing process with the medium-term development perspective, the geographical expansion o f activities, and the satisfaction o f agreed milestones, combined with the flexibility needed for execution. A possible alternative could have been to merge the two main rural development programs (PSAOP2 and PDMAS) in to a single operation. Nonetheless, this option was not considered because PSAOP and P D M A S target different types o f beneficiaries and markets, and have different approaches. Whi le the PSAOP and the P D M A S complement each other well, merging the two would on ly increase the complexity o f the resulting operation without any significant efficiency.

C. IMPLEMENTATION 1. Partnership arrangements The project wi l l be cofinanced by the International Fund for Agricultural Development (IFAD). IFAD has pledged to contribute to PSAOP2 with a loan o f US$6.0 mi l l ion. IFAD has been closely associated in the definit ion o f the project content, f rom preparation to negotiations. I t i s expected that IFAD’s contribution to PSAOP will become effective by the end o f 2006 (IFAD Board presentation i s scheduled for September 22, 2006). IFAD funds wil l be pooled into the project’s designated account.

IFAD will p lay a role in the learning processes o f PSAOP by testing, in the context o f i t s other loan-financed projects in Senegal, a number o f pro-poor approaches that can both benefit f rom and feed into the institutional reform process through ad-hoc mechanisms, including exchange visits and thematic workshops. This will be done also through grant-financed support that IFAD will make available to Senegal and PSAOP partners, in order to mobil ize complementary competencies, particularly concerning capacity building in collaborative innovation management (International Tropical Agricultural Center, together with universities and c i v i l society organizations).

The Swiss Cooperation and the French Cooperation wil l continue to support some activities l inked to PSAOP as they did during phase 1. In phase 2, the Swiss Cooperation wil l continue to

13

support Agricultural and Rural Training Activities. The French Cooperation wil l support the professional evolution o f POs through i t s project Promotion o f Competitive and Sustainable Agriculture (P ACD).

The PSAOP2 will be the implementation mechanism o f the West Africa Agricultural Productivity Program (WAAPP), a regional program that aims to increase agricultural productivity and competitiveness at the regional and national levels. The WAAPP i s a key implementing instrument o f the Bank’s Africa Action Plan (AAP), which i s fully aligned with the Country Assistance Strategy (CAS) and the Economic Community o f West African States’ Agricultural Policy (ECOWAP). In turn, ECOWAP i s the main instrument o f the Bank- supported New Partnership for Africa’s Development (NEPAD) Multi-Country Agricultural Productivity Program (MAAPP), a pillar o f the Comprehensive Africa Agriculture Development Program (CAADP).

Both the PSAOP and WAAPP emphasize market-oriented, environmentally responsible technology generation and dissemination that involves the knowledge triangle o f research- extension-education in partnership with producer organizations, the private sector, and NGOs. The project team wil l take part in the preparation o f the WAAPP to ensure full synergy with the PSAOP.

2. Institutional and implementation arrangements The PSAOP2 wil l replicate the implementation arrangements adopted in the f i rst phase and wil l comprise:

a) a steering committee b) a technical and fiduciary coordination unit, c) one implementing agency per component and/or subcomponent, for a total o f seven implementing agencies.

The only difference with respect to PSAOP1 i s the addition o f a technical coordination role (PSAOP had a Fiduciary Coordination Unit in place, whereas PSAOP2 has a “technical and fiduciary” coordination unit).

The steering committee wil l include representatives o f the implementing agencies. I t will meet twice a year to (i) approve the work program and budget consolidated by the coordination unit, and (ii) assess project performance.

The Technical and Fiduciary Coordination Unit (TFCU) will: (a) monitor the overall implementation o f the project; (b) promote and facilitate the exchange o f information and cooperation between implementing agencies; (c) prepare quarterly progress reports by consolidating the components’ reports; (d) consolidate, supervise, and monitor the procurement plans prepared by the different (sub) components; (e) manage the designated account, in liaison with the Dkpapartement de la Dette et de I’Investissement (DDI) o f the Ministry o f Finance; ( f ) support the components as needed; and (g) liaise regularly with the World Bank. The Coordination Unit wil l be located at the Ministry o f Agriculture. During Negotiations, the Recipient and the Bank agreed that the incumbent staff o f the TFCU will be confirmed for the

14

implementation o f PSAOP2. A specific action plan (see annex 6) has been also defined to strengthen the project fiduciary management.

The implementing agencies will be the following:

Component A, Agricultural Research, wil l be implemented by FNRAA, I S R A , and ITA, each for i t s specific aspects/subcomponents.

Component B, Agricultural Advisory Services, wil l be implemented by ANCAR, whose legal status i s Socie'te' 2 participation publique rninoritaire.

Component C, Support to POs, will be implemented by ASPRODEB. ASPRODEB i s an NGO and represents 19 national federations o f producers.

Component D, Sectoral Coordination, wi l l be implemented by the Ministrv in charge o f Agriculture (subcomponents D1 and D3), and by the Ministry in charge o f Livestock (subcomponent D2).

During PSAOP 1, the financial management capacities o f the implementing agencies were strengthened. The implementing agencies with adequate capacity, notably FNRAA and ASPRODEB, wil l manage their funds directly through a Management Services Contract. This contract will be signed between each o f the two implementing agencies and the TFCU. Funds wil l be withdrawn f rom the Designated Account fo l lowing the disbursement and financial management provisions o f the management services contract. The other five implementing agencies (ANCAR, ISRA, Min is t ry o f Agriculture, and Ministry of Livestock) wi l l send their funding requests to the TFCU.

Similarly to PSAOP1, each implementing agency will: (a) have i t s o w n financial and accounting system in place, certified by an independent auditor; (b) manage i t s o w n procurement activities, under the overall guidance and quality control of the Procurement Specialist o f the TFCU.

Procedures concerning coordination, implementation, management, monitoring and evaluation, procurement, and administration wil l be detailed in the Project Implementation Manual.

Flow o f funds The chart in appendix 5 o f annex 7 describes the f l ow of funds o f the project. The project wi l l have one Designated Account, managed by DDI in coordination with the TFCU, and the Accounts o f the implementing agencies. IFAD funds, once the cofinancing i s effective, will be pooled in the Designated Account. Reporting on the use o f funds for the designated account and the sub accounts wi l l be based o n a Statement o f expenditures. Reporting on the use of funds for the Management Contracts will be based on a financial and technical report (format to be included in the PIM). Payments wi l l be made in installments. The in i t ia l installment wi l l be determined based o n the disbursement plan. Subsequent payments wil l be based on progress reports (physical and financial).

15

3. Monitoring and evaluation o f outcomes/results

A monitoring and evaluation (M&E) system will be established to verify progress against the objectively verifiable indicators described in the results framework (Annex 3). The system wil l build upon the M&E systems established during PSAOPl for each implementing agency. The project M&E system, managed by the TFCU, will be linked to the M&E system o f the components, and wil l deliver consolidated monitoring information on project activities and progress. The system wil l collate and process information collected from the components as well as additional data deriving from special studies and participatory M&E exercises. Special attention wil l be given to the results o f demand-driven services on production and productivity, incomes and food security o f smallholders. M&E data wi l l be systematically disaggregated by sex and age group.

In order to assess progress towards the indicators, a baseline study on randomly selected family farms wil l be realized at the beginning o f the project to allow for later comparison o f results, In addition, qualitative participatory and gender-sensitive poverty assessments wil l be undertaken in sample communities. The baseline study wil l include some o f the benchmarks established by the 2003 study on the POs and add others to assess POs representation, effectiveness, and transparency. The baseline report will incorporate geographically disaggregated data from the Living Standard Survey, the Multiple Indicator Cluster Survey, and the Demographic and Health Survey. The survey will be repeated at the end o f PSAOP2.

The creation o f a Coordination Unit responsible for the overall monitoring o f the project wi l l improve the information and communication system ensuring collection and transmission of technical and economic information produced by the project. The establishment o f the baseline reference and periodic assessments o f the project’s results wil l be undertaken by independent consultants, recruited by the TFCU.

4. Sus tainability In 2004, Senegal approved the LOASP, which provides the policy framework for PSAOP2. This law gives legal recognition to the reforms proposed and piloted by the PSAOP and can be considered a s i g n o f political commitment and institutional sustainability. The commitment of the country i s demonstrated by i t s determination in implementing the institutional reforms in the sector. Evidence o f this i s the reduction o f the Government’s share in A N C A R to less than 50 percent, and the earmarking o f funds o f the national budget for the National Rural Development Fund. The sustainability o f the project will ultimately depend on the impact o f innovations and advisory services on agricultural productivity and incomes. The project wil l promote a demand- driven approach to increase relevance and accountability o f service providers towards producers. Financial sustainability wil l also be improved by two factors: (a) the establishment of the FNDASP by the Government, which wil l ensure the sustainable assure the long-term funding o f agricultural services and (b) the accountability towards producers (both for the new governance of ANCAR and for the contractual nature o f services), which will enhance the willingness of clients to demand and to pay for such services, thereby increasing the likelihood o f sustainability.

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5. Critical risks and potentially controversial aspects

Risks Risk Mi t i ga t i on Measures Risk Ra t ing after M i t i ga t i on

T o pro ject development objective Katural disasters including drought, floods, Promotion o f agricultural diversification wil l

contribute to risk mitigation. The project wil l contribute to piloting weather-based insurance policies. The project will strengthen veterinary

pests and epizootics. Substantial

........................................................................................................................................................... The program i s l ike ly to become effective in an electoral period, which could cause institutional changes that could slow down implementation. ...... The Government's "Special Programs" for agricultural development are not in line with the approach o f the PSAOP and may hinder PSAOP implementation.

SONACOS problems can lead to a crisis in the groundnut sector and hurt producers' livelihoods. FNDASP not in place or not adequately funded.

................................................................................. " " ".." ..".. " .... " ........ " ........ " ........ "..

...................................................................................................................................

.....................................................................................................................................................................

the "Special-Programs" with PSAOF and improved planning o f sectoral programs thanks to the implementation o f sectoral MTEF. The project wil l help producers diversify their groundnut production.

Creation o f FNDASP w i l l be a condition o f effectiveness. Adequate funding wil l be a

..............................................................................................................................................................................................................................................................

................................................................................................................................................................................................................................................................��

Substantial

Modest

surveillance. Dialogue with the stakeholders to ensure that .................................................................................................... ...................................................................................................................................................................

Modest

trigger for the next phase. Pol icy dialogue wi l l stress the importance o f FNDASP.

Policy dialogue with the government and capacity development o f PO leaders should improve A N C A R governance and increase accountability to producers. Assess the employment offer; create a common framework with P N D L for recruitment o f local staff.

T o component result Ag r i cu l tu ra l advisory services ANCAR remains a government-led institution, not sufficiently accountable to

Difficulty in recruiting the number o f advisors required to cover 320 RC, also because o f the contemporary launch o f PNDL. Producer Organizations Excessive influence o f any single federation o f POs on the implementation o f the component.

Sectoral coordination Min is t r ies do not adequately their coordination role. sectoral ministries.

..P!9!!?ers: ................................................................................................................................................................................................................................................................—�

The component wil l set up a steering committee comprising different P O federations, which wil l decide o n the allocation o f funds to support the federations.

The TFCU will stimulate inputs f rom the

the project remains on track. Project coordination attached to the Secretarv General

Modest

Negligible

Modest Modest

Modest

to increase institutional stability. Policy dialogue to ensure better integration o f ................................................................................................................................................. .................................................................................................................

Substantial

........................................................................................................ Pol icy dialogue to modi fy working conditions. Project can support the deployment at regional level, o n a temporary basis.

............................................................................................................................. Modest

Overa l l risk ra t i ng

.................................................................................................................................................................. Ministerial staff i s unwilling to j o i n deconcentrated services at regional and local levels.

I Modest

17

Financial risk The Country Financial Accountability Assessment (CFAA) o f Senegal was conducted in 2003. The overall r i s k rat ing o f the public financial management system was high. Since that exercise, the Government has created an executive secretariat under the Ministry o f Economy and Finance to monitor the implementation o f the action plan o f the CFAA. The HJPC Country Assessment and Act ion Plan by the Bank and the IMF in November 2004 showed important improvements in the areas o f publ ic expenditure tracking - notably in the priori ty areas defined in the PRSP, internal controls, and budget preparation. However, significant progress i s s t i l l needed in internal and external controls o f budget execution and state-owned enterprises. The Government has given pr ior i ty t o improvements in these areas as we l l as local governance finance reforms. A Mult i-Donor Trust Fund (MDTF) has been set up to fo l low up o n implementation o f the reforms. An IDF Grant to strengthen the capacity o f the Cour des Comptes (State Audit Office) i s also under implementation. The use o f the country system, notably the Treasury Department and the Cour des Comptes, wi l l be implemented progressively. In the meantime, implementation o f the project wi l l be coordinated by a Project Coordination Unit.

6. Credit conditions and covenants

The effectiveness conditions are the following:

The Recipient has recruited key staff o f the TFCU, including the project coordinator, a financial management specialist, a procurement specialist, and a monitoring and evaluation specialist, a l l with qualifications and experience acceptable to the Association;

The Recipient has: (i) adopted the Project Implementation Manual, including accounting, financial and administrative procedures, in fo rm and substance acceptable to the Association; and (ii) updated the accounting software at the TFCU in manner satisfactory to the Association;

The Recipient has hired an external auditor satisfactory to the Association, under terms and conditions satisfactory to the Association, and consistent with the procurement guidelines.

The Recipient has entered into agreements, in form and substance acceptable to the Association, with FNRAA and ASPRODEB, respectively for the implementation o f the activities to be carried out under sub-component A1 and component C.

The Recipient has prepared legal texts, acceptable to the Association for the establishment o f a National Agro-Sylvo-Pastoral Development Fund (Fonds de DCveloppement Agro-Sylvo-Pastorale -FNDASP), under terms and reference acceptable to the Association; and

The Recipient has prepared a plan, in form and substance acceptable to the Association, for the redeployment o f ANCAR’s staff.

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Financial Covenants

The annual audit reports on the project’s financial statements, as w e l l as o n the financial statements o f the Executive Agencies (ANCAR, ASPRODEB, ISRA, FNRAA, and ITA), wil l be required.

Dated Covenants

The Recipient shall provide at least the equivalent o f CFAF10.8 b i l l i on (excluding taxes) for the co-financing o f the activities o f components A, B, and D o f the Project. These amounts shall be made available, o n a regular and t imely basis, in accordance with the Recipient’s budgetary procedures and based on the financing needs set out in annual work programs adopted by the Steering Committee.

D. APPRAISAL SUMMARY

1. Economic and financial analyses The PSAOP aims to increase agricultural production (cropping and livestock activities), productivity and farmers incomes by efficient use o f appropriate technologies. The issue i s whether supporting the program i s economically and financially profitable. The second issue i s to appreciate if the recurrent costs generated by the program wil l be covered under government budget during project implementation, as w e l l as in the long run. The analytical approach consisted o f comparing the program additional recurrent costs with estimates o f primary sector expenditures.

The project economic benefits are driven f rom the expected increase in national agricultural production (including milk), net o f additional on-farm investment and inputs, due to the adoption by farmers o f the technical packages proposed under the program. For livestock activities (on animal), the benefits are f rom the gain obtained o f the decreased rate o f mortal i ty induced by the increase use o f animal vaccination.

The six agroecological zones o f Senegal have been chosen with respect to four ma in crops or herd to assess incremental production over years with and without project under assumption made by the mission on the prospective technologies adoption rate varying between 15 to 25 percent depending o n crop and zones. Fo r the financial analysis, two standard types o f farm or herd (medium and small) within the six agroecological zones and one product were chosen to estimate farm or herd budget with and without project. Under assumptions given above, the economic Internal Rate o f Return (IRR) calculated f rom the project i s 36 percent with a Net Present Value (NPV) o f F C F A l l b i l l i on (US$22 mil l ion) over the f ive years with the capital opportunity cost o f 12 percent. The IRR becomes 74 percent with a NVP o f FCFA61 b i l l i on (US$123 mil l ion) in the horizon 2006-201 5. The project profitabil ity appears extremely sensitive to decrease in targeted yields (switching value o f - 6.7percent) but less sensitive to decrease in market prices (-18 percent), in net margin (-percent) and in rate o f adoption (-35 percent).

The financial analysis show an IRR o f 20 percent over the opportunity cost o f capital estimated at 12 percent and a farmer NVP o f F C A 159,000 (US$319). These results show the economically and financially soundness o f the project.

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The total recurrent cost o f the project i s FCFA25.3 bi l l ion for five years. IDA and FDA contribution amounts to FCFA12.1 billion, with an estimated tax exoneration o f 10 percent (FCFA2.53 billion), the remaining recurrent costs are roughly FCFA10.67 bi l l ion averaging FCFA2.13 bi l l ion per year. Under prudent hypothesis concerning the financial participation o f the users in extension and research costs, the share o f public agricultural expenditures going to the program declines from 9 percent in year 2006 to 4 percent in 2015. Even, if the users could not participate as expected, the recurrent costs for the government wil l remain under 10 percent of agricultural expenditures. After analysis o f the operational budget o f the two ministries concerned (agriculture and husbandry, including I T A in the Scientific Research Ministry), the flow of public expenditures for the primary sector i s about FCFA7.5 bi l l ion per year. Against this total, the recurrent costs are approximately FCFA25 bi l l ion per year o f which FCFA7.4 bi l l ion i s financed by internal resources. Therefore, the recurrent costs generated by the PSAOP constitute an acceptable burden on public finances and well within the Government o f Senegal financial means.

2. Technical The approach o f the program i s based on: (i) institutional reforms, to make agricultural services accountable, more demand-driven and cost-efficient, and to increase the participation o f the private sector in a number o f functions previously executed by the public sector; (ii) generation and transfer o f technologies to improve agricultural productivity in a sustainable way; and (iii) empowerment and capacity building o f producer organizations to increase their capacity to organize the producers’ demand for service and to make their voices heard in the policy dialogue.

The failure o f the Extension & Visit approach o f the 1970s and 1980s stressed the importance o f having research and extension institutions be accountable to producers and responsive to their needs, Failure to involve the main users in the technology generation and dissemination process led to several inefficiencies, among which were: (i) the generation and extension o f technologies that did not correspond to the diversity o f socioeconomic and agroecological constraints and that failed to take into account the producers’ indigenous knowledge; and (ii) delays in technology dissemination and adoption.

To address these issues, the Program was designed from the start to bring together technology users and suppliers, under a three-pronged approach to agricultural services, based on collaboration o f producer organizations, research, and extension. Producer organizations have a crucial role to play in defining the research and extension agenda and priorities, in accelerating the diffusion o f information, and in providing services to producers to facilitate technology adoption. Therefore, they can bring about more demand-driven and accountable agricultural services. However, producer organizations will need support to build their capacity before they can play an effective role in the technology development and diffusion process, which i s why a support-to-producer organizations component was introduced.

The results o f the first phase confirm that the approach i s sound and beneficiaries are satisfied with the services they receive. An evaluation undertaken in 2004 has confirmed that producer organizations are a powerful institutional mechanism, able to touch the majority o f rural

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dwellers, The approach o f the project conforms to the current best practice in this field. The Borrower has recently approved the Agricultural Framework Law, wh ich supports the same approach as the PSAOP.

3. Fiduciary

3.1 Financial management The second phase of the PSAOP project wil l build on the financial management arrangements of PSAOP1. A financial management assessment was carried out to determine whether the implementing entities (the Project Coordination Unit at the central level), in charge o f the implementation of the project have acceptable financial management arrangements. The conclusion o f the assessment i s that the financial management arrangements for the project need to be improved before project effectiveness satisfies the Bank’s minimum requirements under OP/BP10.02, and wil l then be adequate to provide, with reasonable assurance, accurate and timely information o n the status o f the project required by IDA. The financial management arrangements wi l l be strengthened w i th the implementation o f the action p lan in attachment 1 of annex 7.

3.2 Procurement The last Procurement Assessment Review for PSAOPl was conducted during the period November 14-24, 2005. I t revealed a generally acceptable procurement environment. Nonetheless, training o n the new Bank procurement guidelines wi l l be required for the procurement staff who were not previously exposed to them (PSAOP1 operated under the previous guidelines). Procurement arrangements are based o n a two-tiered structure: (i) a Procurement Specialist and Procurement Assistant based at the TFCU, and (ii) a Procurement Officer based in each implementing agency’. For each implementing agency, procurement activities wi l l be conducted by the relevant procurement officer. Each procurement officer wi l l work in close l iaison with the procurement specialist o f the TFCU.

The TFCU Procurement Specialist wi l l be responsible for veri fying that a l l procurement activities adhere to the quality standard defined in the implementation manual and comply with the procurement guidelines. The TFCU Procurement Specialist wi l l clear a l l procurement documents before they are reviewed by the Bank (including for activities subject to ex-post review). The Procurement Specialist wil l also be responsible for consolidating the components’ procurement plans into a single PSAOP2 procurement and for monitoring i t s implementation. The Procurement Specialist wi l l report to the project coordinator, TFCU.

The current Procurement Specialist (DDI component in PSAOP 1) has the necessary qualifications and experience in Wor ld Bank projects and wil l possibly be retained. Recruitment or replacement o f a Procurement Specialist o r Assistant wil l b e done competitively, based o n agreed TORS and evaluation criteria.

’ The project components are mostly autonomous entity and already have their own procurement officer.

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A Procurement Plan covering activities planned for the first eighteen months o f the project has been approved during project negotiations. The overall project risk for procurement i s medium, due to the complexity o f the institutional arrangements.

4. Social

The positive experience o f promoting local, consultative committees led by producer organizations (CLCOP) under PSAOPl wi l l be generalized in all 320 rural council areas (‘‘communautks rurales) o f Senegal. CLCOPs represent a space where producer organizations try to coordinate local development with other actors, including local government, c iv i l society, the local private sector, and other development partners. CLCOPs are strongly supportive o f women and youth issues. Women and youth are the marginalized social groups that are given more o f a voice and a stake in the rural future by CLCOPs and their apex organization, CNCR. In relation to local governments and the PLDP, POs are an important source o f potential checks and balances .

Under PSAOP, the POs are the principal channel through which the producers can directly access the resources o f the project. Therefore, PO effectiveness and inclusiveness are critical to enabling the poorer and more marginalized sections o f the rural population to benefit from PSAOP. As a crosscutting concern in al l its activities, Component C (support to POs) wi l l pay attention to social inclusion, to households that are most food-insecure and have fewer assets, to women, and to youth. To this end, specific indicators and activities have been included in Component C to strengthen the capacity o f POs to represent the interests-and respond to the n e e d s - o f the poorer segments o f the rural population.

I t i s anticipated that implementation o f PSAOP2 wil l achieve social development outcomes and positive social impacts, including activities related to social capital building with producer organizations (collective actions, social networks, conflict management at the community level relating to land tenure issues); stakeholders’ participation (social inclusion, social accountability, gender), and social risk mitigation (development o f capacity-building and microcredit programs for women’s groups). The project wil l monitor three special issues (i) the participation o f the most vulnerable social groups and women (gender dimension); (ii) the social accountability o f producer organizations; and (iii) the social accountability and inclusiveness o f POs.

During project preparation, relevant social risk issues (access to lands, access to agricultural services, special needs o f women and youth groups, equitable access to opportunities and benefits created by the project) have been taken into consideration with the effective participation o f PO leaders throughout the decision-making process. During implementation, the project wil l address these issues by systematically mainstreaming participatory methodologies in al l project activities (identification and implementation o f advisory services and capacity- building activities, economic activities, etc.) so that the program responds to the needs o f beneficiari’es and reduces the gender disparities in access to agricultural services. In order to monitor participation in project implementation, monitoring indicators wil l be disaggregated by gender.

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Gender equity Women and youth are often very well represented within producer organizations and in their consultative fora, CLCOPs. For this reason, during PSAOPl women have largely benefited from services provided by the components POs and Advisory services. The approach has also benefited young producers and has promoted their emergence as PO leaders. Nonetheless, PSAOP2 wil l proactively increase the participation o f women and youth in the project activities and wil l specifically keep track, in the monitoring system, o f the gender balance o f supported activities. Gender sensitization and training wil l be undertaken for stakeholders, including PO members, women, and men.

5. Environment

As PSAOP2 wil l support, among other things, the increase and diversification o f agricultural production (sub-projects involving, for example, the construction and rehabilitation o f small- scale irrigation schemes, water retention ponds, small dams, watering points for livestock, and feeder roads), and the construction and rehabilitation o f buildings (Le. the rehabilitation of I S R A ’ s regional research stations, some NARS offices and research facilities, construction o f a new headquarters building for the Ministry o f Agriculture; construction o f processing and storage facilities, and vaccination parks) i t wil l be important to protect people’s health from environmental r isks and pollution that might result from these activities.

Potential negative environmental impacts o f these sub-projects are l ikely to include, for example, (i) water and soil pollution due to construction activities, increased use o f pesticides and herbicides as well as agro-processing activities such as milling and processing o f tubers; (ii) soil erosion and silting due to the construction o f irrigation canals and small dams as well as poor agricultural practices; (iii) growth o f aquatic weeds (typha) which presently impede rural development in the Delta de la vallee du fleuve Senegal, and are l ikely to become a problem in the basin Arachidier; and (iv) pressures on natural resources as the population increases in those areas that have access to water.

Potential negative social impacts o f sub-projects could include (i) an increase in the incidence of malaria and belharzia as the number o f water management structures increases, and water in the quarries remains standing; (ii) pesticide poising due to the unsafe application and management of pesticides and herbicides by untrained personnel; (iii) ineffective medical waste management at the veterinary parks; (iv) traffic accidents and exposure to dust and noise o f the population near construction sites; and (v) loss o f livelihoods due to land acquisition.

Since the locations and potential localized impacts o f future sub-projects could not be determined prior to appraisal, and to identify and mitigate potential negative environmental and social impacts, the Borrower has prepared an Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF). The ESMF outlines the environmental and social screening process for sub-proj ects which has been prepared because Senegal’s environmental procedures do not include a screening process for sub-projects. This ESMF i s consistent with OP 4.0 1 Environmental Assessment which requires that al l investments proposed for Bank financing are screened to determine the necessary level o f environmental work. The

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RPF describes the policies and procedures to be followed in the event that sub-projects involve land acquisition.

T o assist implementers of sub-projects in managing the potential negative environmental and social impacts, the ESMF includes the following annexes: (a) a pest management plan to serve as guidance during the implementation o f sub-projects invo lv ing increases in agricultural production; (b) a national medical waste management p lan to ensure the safe disposal o f medical waste at the vaccination parks; (c) environmental guidelines for contractors to be used during the planned construction and rehabilitation activities; (d) an outline o f the crit ical elements o f quality standards for export crops, including best practices and effective pest management; (e) environmental standards for new irrigation sub-projects as developed under the Programme de De'veloppernent des March& Agricole du Se'ne'gal (PDMAS); (0 a summary o f the Bank's safeguard policies to be taken into account during sub-project design and implementation; and (g) an Environmental Management Plan (EMP) which proposes mit igation measures and institutional arrangements as we l l t ime horizons and cost estimates for the effective implementation and monitoring o f mitigation measures for future sub-proj ects.

T o ensure effective implementation o f the ESMF, recommendations to strengthen the relevant capacities have been made; for example, (i) the nomination o f an Environmental Specialist to assist the Producer Organizations and their members; (ii) the appointment o f environmental & social focal points drawn f rom the technical staff and project managers at the regional levels (ARCAR, DRDRs); (iii) the establishment o f an environmental database to collect information o n the nexus o f environment - agriculture - livestock; (iv) environmental training for key personnel; and (v) information and awareness raising campaigns for producer organizations, NGO's, local authorities and the population.

The EMP proposes institutional arrangements, including cost estimates, for the implementation of above institutional and technical measures as w e l l as environmental training and public awareness-raising. The EMP furthermore proposes mit igation measures for addressing issues related to malaria and bilharzia as we l l as ineffective management o f pesticides. The implementation o f these measures wil l be under the responsibility o f the TFCU, in collaboration with ANCAR and ASPRODEB.

6. Safeguard policies

The project has been assigned the environmental screening category B, and the safeguard screening category i s S2. The project has triggered OP 4.01 Environmental Assessment, OP 4.12 Involuntary Resettlement, OP 4.09 Pest Management, and OP 7.50 Projects o n International Waterways. The key safeguard pol icy issues raised by the project relate to the planned increase and diversification o f agricultural production and construction activities which are l ike ly to lead to (i) an increase in the use o f pesticides; (ii) an increase in the number o f water management structures such as small dams or irrigation canals; (iii) the use o f quarries as sources o f construction materials; (iv) the potential loss o f livelihoods due to land acquisition; (v) a need for safe medical waste management at the vaccination parks; (vi) the use o f international waters to increase agricultural production; and (vii) pressures on natural resources as the population increases in those areas that have access to water.

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In order to address these issues effectively, the Borrower has prepared an Environmental and Social Management Framework (ESMF) dated November 2005, and a Resettlement Policy Framework (RPF) dated October 2005. Both documents have been approved and disclosed in Senegal and at the Bank’s Infoshop on December 13, 2005. Consistent with OP 7.50, the riparian states were notified on January 17, 2006, and no objection has been raised by the deadline April 28, 2006.

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [X I [ I Natural Habitats (OP/BP 4.04) [ I [XI

Pest Management (OP 4.09) [X I [ I Cultural Property (OPN 11.03, being revised as OP 4.1 1) [X I

Involuntary Resettlement (OP/BP 4.12) [X I [ I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [X I

Forests (OP/BP 4.36) [ I [ X I Safety o f Dams (OP/BP 4.37) [ I [XI

Projects in Disputed Areas (OP/BP/GP 7.60)* [ I [XI

Projects on International Waterways (OP/BP/GP 7.50) [X I [ I

[ I

[ I

7. Policy Exceptions and Readiness N o policy and readiness exceptions are foreseen.

* By supporting the proposedproject, the Bank does not intend to prejudice t h e j n a l determination of the parties ’ claims on the disputed areas

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Annex 1: Country and Sector or Program Background SENEGAL: Agricultural Services & Producer organizations Project 2

Al. Country and Sector Issues Rural poverty in Senegal i s much larger than urban poverty. The relatively strong growth o f the country’s economy over the last ten years, averaging f ive percent per year, was led by non- labor-intensive sectors. Therefore, i t mostly bypassed the rural dwellers living on agriculture- related activities, which form 64 percent o f the active population. As a result, whi le the poverty level decreased by 11 percent overall in Senegal in 1994-2001, i t fe l l on ly f ive percent in rural areas. The poverty incidence i s much larger in rural areas, where i t ranges f rom 72 to 88 percent, than in urban areas, where it varies from 44 to 59 percent’. Other poverty indicators in rural areas are also rather unfavorable: 76 percent illiteracy, 39 percent school enrollment, 64 percent access to clean water, 42 percent access to health services, 5.4 percent o f households with electricity, and a 34 percent chi ld malnutrit ion rate.

Agriculture remains largely dominated by rainfed crops and extensive animal husbandry. Agricultural revenues stem f rom the production o f mi l le t and groundnuts on, respectively, 38 percent and 37 percent o f the cultivated land. Groundnut growing concerns 700,000 family farms, for which it i s the ma in source o f monetary income (CFAF 81 b i l l i on in 2001) and a substantial contribution to food security (30 percent o f groundnut production i s consumed as food by the producers). Irrigated agriculture accounts for less than f ive percent o f arable land and i s concentrated in the Senegal River Valley, Casamance, and the Niayes. The livestock subsector represents 38.5 percent o f the primary sector and contributes 7.5 percent to GDP (1998-2003 average). Since 1987, this subsector has recorded a growth rate o f three percent, topping six percent in 2000. In 2003, the animal stock was estimated at three m i l l i on cattle, 8.5 mil l ions sheep and goats, and more than 26 mi l l ion chickens. However, with a production o f 113,000 tons of meat (2003), the rate o f exploitation o f livestock remains l o w and domestic consumption relies increasingly o n imports o f animal products.

Several constraints continue to hamper the country’s potential for agricultural growth. These constraints include significant lack o f capital and basic inputs (seeds, fertilizers, equipment), food safety/quality issues, poor ly functioning market infrastructures and distribution channels, l imi ted irrigation infrastructure, and s t i l l insufficient coverage o f agricultural services.

Groundnut and rainfed crops will continue to determine the pace o f agricultural growth in the short-to-medium-term despite great potential in horticultural and export-oriented agriculture. The prospects for cotton and groundnut, wh ich ut i l ize about 40 percent o f cultivated land, look promising, provided the ongoing reforms be fully implemented. Nonetheless, current difficulties concerning SONACOS and the groundnut marketing campaign 2005/2006 cast heavy clouds o n the short-term prospects o f smallholder producers in the Senegalese groundnut basin. Whi le groundnut o i l faces a stagnant market, there are interesting opportunities, not yet fully exploited, for confectionery groundnuts. In addition, rapid urbanization, growing local agroprocessing, and animal feeding industries could sustain expanding demand for some commercial crops such as maize and other staple food.

* Source: PRSP, 2003 (data o f 2001)

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Country actions to address issues and constraiizts. Despite this general negative outlook, the primary sector has shown signs o f recovery in the last decade, thanks to the Government’s commitment to supporting the sector and implementing reforms, and an increase in public expenditure for the rural sector as part o f the poverty reduction strategy. The Bank’s contribution to these developments includes agricultural services reforms undertaken since 1999 thanks to the first phase o f the Agricultural Services and Producer organizations Project (PSAOP), which implemented the Policy Letter o f Institutional Development for the Agricultural Sector (1 999). In addition to the PRSP (2003), Senegal adopted a Policy Letter for the Development o f the Groundnut Sector (PL-DGS) in May 2003. The PL-DGS aims to develop the potential o f the groundnut sector through an increased participation o f the private sector, increased productivity, improvement o f the seed stocks, quality management, and regulatory framework. The implementation o f the PL-DGS i s lagging behind schedule and will require specific support, In addition, in June 2004 Senegal approved the new Agricultural Framework Law (Loi d ’Orientation Agro-Sylvo-Pastorale, LOASP), which outlines the country’s vision for modernizing the primary sector over the next 20 years. The LOASP i s largely based on the principles inspired by the f i rst phase o f PSAOP: disengagement o f the public sector from productive and commercial activities, deconcentration o f agricultural staff, sustainable hnding of agricultural services, empowerment o f producer organizations, competitive funding of research activities. The GOS steps towards sustaining the ongoing reforms (particularly with the recent steps towards implementing the National Rural Development Fund and the reduction o f i t s majority stake in ANCAR) are a s ign o f political commitment and an indicator o f the institutional foundations, and likely sustainability, o f the project outcomes.

A2 Rationale for Bank Involvement The Bank has led the policy dialogue on the agricultural sector since the sectoral adjustment programs o f the 1990s. The PSAOP has been instrumental in defining the sectoral reforms, whose implementation requires support in the medium-tern, as originally foreseen in this Adaptable Program Loan (APL). The Bank has a comparative advantage in supporting this operation because o f i t s long-tern involvement in the sectoral pol icy dialogue and in the first phase o f the program in Senegal.

The second phase o f the PSAOP (PSAOP2), inscribed in the current CAS (2003), i s a key instrument in fighting rural poverty and modernizing the agricultural sector. PSAOP 1 supported the establishment o f the institutional foundations for more effective intervention in the agricultural sector and established a network o f producer organizations and advisory services in 142 out o f the 320 rural councils o f Senegal. PSAOP2 wil l expand this network to all rural areas, facilitating producers’ access to agricultural services and knowledge, with the ultimate goals of increasing agricultural productivity and diversification, stabilizing production and improving household food security, while equitably addressing the needs o f different categories of rural people.

In addition, with PSAOP2, the Bank wil l complement i t s rural portfolio in Senegal, identified in the FY03-05 Country Assistance Strategy (CAS), and which includes the AgMarkets (PDMAS), the Africa Emergency Locusts Project (AELP), the Integrated Coastal and Marine Resource Management Project (GIRMaC), and the forthcoming Participatory Local Development Program (PLDP). The project wi l l create particular synergies with the PLDP and the PDMAS. PLDP

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supports the decentralization agenda and strengthens rural infrastructures, community-based organizations, and social services. PDMAS supports economic operators involved in the agricultural supply chains, from producers to exporters. PSAOP2, PDMAS, and PLDP integrate well without overlapping. They target different actors in the rural space (producer organizations, specialized producers and exporters, local governments and community-based organizations, respectively) and different activities (agricultural services, export markets, socioeconomic services and infrastructures, respectively). More specifically, these three projects wil l develop mutually reinforcing activities (see also annex 2).

PSAOP wil l target producer organizations, sectoral ministries, agricultural research institutions, and extension services. I t wil l support the emergence o f alternative agricultural service providers that can contribute to supporting PDMAS activities. PSAOP wil l strengthen the technical and organizational capacity of producers in undertaking economic activities that could then become eligible for-and be scaled up with-PDMAS support. PDMAS, in turn, wil l target market- oriented agricultural business. I t wil l focus on specific agricultural regions and products and wil l provide guidance for promising approaches and activities that can be tested by the PSAOP at the producer organizations level.

PLDP will target poor communities and local governments. I t wi l l strengthen participatory planning and local development and provide resources for promoting local economic initiatives. These activities will contribute to supporting the activities o f the Local Fora for Rural Consultation (CLCOP) supported by the PSAOP. Socioeconomic infrastructure, supported by the PLDP Local Investment Fund (LIF) o f PLDP, wil l improve living and working conditions o f communities and provide better access to markets, thus increasing the economic opportunities for rural communities. The LIF wil l support the provision o f advisory services in rural areas and i t s implementation will be closely coordinated with the activities implemented by PSAOP2, notably through active participation o f CLCOP in the decisions concerning the selection o f activities to be financed by LIF.

PSAOP2 wil l be a key instrument in supporting the implementation o f the Policy Letter on the groundnut sector at the field level. PSAOP 1 piloted significant experiences in producing quality groundnuts and improving the level and quality o f the seed stock at the community level. These activities, which resulted in improved productivity and higher selling prices for the producers, wi l l be replicated and expanded under PSAOP2, with the involvement o f al l sectoral stakeholders (ministry, research institutions, advisory service agencies, producer organizations, and communities). Successful pilots wil l be scaled up through other programs (including PDMAS and the forthcoming European Commission program to support the groundnut sector),

Finally, PSAOP2 supports the implementation o f the World Bank’s Afr ica Action Plan (AAP, September 2005) in Senegal. The PSAOP wil l support the implementation o f A A P ’ s objective “Drivers o f growth: strengthening agriculture ”, in that i t supports agricultural research and innovation, improvements in farming methods, increased productivity, and connecting the poor to markets, as well as building public and private sectors’ capacities for competitiveness in the sector. Cofinanced pari passu with IFAD, PSAOP2 is also relevant to the AAP action “Strengthening the impact of partnerships”, in that i t wil l improve donor alignment and harmonization o f procedures and practices.

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The commitment o f the country i s demonstrated by i t s determination in implementing institutional reforms in the sector. Recent evidence o f this i s the approval o f the LOASP, the reduction o f the Government’s share in ANCAR to below 50 percent, and the earmarking of funds in the 2006 national budget for the National Rural Development Fund. As the PSAOP has successfully attained its development objectives and completed the triggers’ to move to the second phase, Senegal required the Bank to support the second phase o f the APL.

A3 The PSAOP Adaptable Program

A3.1 The objective o f the first phase (PSAOP1) was to reform the institutional framework and environment o f agricultural services, whi le supporting the empowerment o f producer organizations. The overall outcome o f the first phase has been rated satisfactory by the Implementation Completion Report (ICR n. 35062). PSAOPl effectively contributed to empowering producer organizations, establishing decentralized and demand-driven agricultural services in part o f Senegal rural areas, and increasing their responsiveness and accountability to producers.

Summary of Outcomes and achievements of the 1st phase

The reforms and approaches promoted by PSAOP1, in addition to the results achieved in the field, strongly influenced Government officials and pol icy makers within the sector ministries. The promulgation o f the new Agricultural Framework L a w (Loi d ’Orientation Agro-Sylvo- Pastorale, LOASP) in June 2004 brought legal recognition to, and confirmed interest and relevance of, the institutional reforms supported by the PSAOP. The LOASP provides institutional sustainability to the reforms undertaken during the f i rs t phase and sets the framework for their financial sustainability.

The institutional development impact o f the f i rst phase has been rated substantial by the ICR, wh ich highlighted the fo l lowing major achievements:

j Redefinition of the role o f sectoral public services: The Ministry o f Agriculture and the Ministry o f Livestock disengaged f rom productive and marketing activities; they have returned their focus to the core public functions o f po l icy formulation, monitoring, and evaluation, with the creation o f specific divisions for po l icy analysis, forecasts, and statistics. Services have been deconcentrated with the creation o f Rura l Development Regional Directorates (DRDRs), wh ich focus o n f ield activity monitoring, statistical data collection, control and regulation, and elaboration o f regional and departmental agricultural policies. Veterinary Regional Inspections (IRSVs) are responsible for designing, controll ing and monitoring actions related to control o f epizootic diseases, supervision o f private veterinary practices, and animal food safety. Seventy percent o f ministerial staff has been assigned to decentralized offices. As demonstrated by the recent elaboration o f the LOASP, agricultural public services are less reluctant and more active in collaborating and consulting producer organizations.

A table summarizing the achievement o f PSAOPl triggers i s included in annex 1

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=, F r o m top-down extension to rura l and agricultural advisory services: PSAOP1 helped establish a semi-public National Agency for Agricultural and Rural Counsel (ANCAR), co- managed with POs and private ago-businesses. Through ANCAR, the PSAOP has replaced the top-down model o f dissemination o f technical packages with demand-driven support to address producers’ needs. ANCAR operates in 144 rural communities, where 105 Agricultural and Rural Advisors assist POs in the formulation and implementation o f agricultural advisory activities under contractual arrangements. As o f today, more than 3,000 contracts have been executed for a total cost o f CFAF 365 million, including producer participation of CFAF 13 1 mil l ion (36 percent). Extension activities have benefited more than 1,460 POs representing 24,000 producers as direct beneficiaries, and almost 54,000 people as indirect beneficiaries. These agricultural advisory programs cover a large range of issues and activities ranging from agricultural techniques and livestock production, to organization and management o f POs. ANCAR also increasingly plays the role o f an intermediate entity to help producers get in touch with other service providers on specific issues that are beyond ANCAR’s core competencies.

=, Demand-driven services lead to the emergence of private operators: Institutional changes brought about by the PSAOP have strongly contributed to making the delivery of agricultural services evolve from a top-down centralized approach to a more demand-driven and regionalized approach. Many multi-stakeholders workshops with producers were organized with producers to plan activities, and then to evaluate and draw lessons. Some initiatives led by the POs apex organizations, such as an experimental project focusing on groundnut quality control, have also introduced the idea o f private delivery o f services. I t i s too early to measure the economic impact o f such evolutions, especially on productivity, but beneficiary assessments o f agricultural services show that agricultural services and advisory programs do respond to producers’ needs and concerns.

=, Transparent and competitive research financing mechanism: The project helped establish the National Fund for Agricultural Research (FNRAA), a competitive funding mechanism for agricultural and agro-processing research programs. By separating the funding o f research from i t s execution, FNRAA has increased transparency o f resource allocation to research projects. These resources are accessible to a range o f competencies that goes beyond the traditional and dominant research institutes. FNRAA has forged partnerships not only among research institutions but also with other private operators, such as ago- processors. Producers take part to the decision-making process and are involved in the implementation o f research programs in the field. The PSAOP has also contributed to strengthening the scientific and managerial capacities and competitiveness o f the two major research institutions ( I S M and ITA).

3 Effective participation of producers to policy formulation: Thanks to PSAOPl, POs have taken part in decision-making processes as a real proposing force. For instance, the contribution o f the national umbrella federation o f POs (CNCR) to the formulation o f a new framework law (LOASP) has been substantial: CNCR pushed the Government to switch i t s vision on some issues or to withdraw some proposals not accepted by producers (on land tenure issues for instance). O n the board o f the national research fund (FNRAA), they have contributed to the complete reformulation o f research programs.

30

Producer empowerment at the grassroots levels: A network o f rural consultative fora (CLCOP) has been successfully established in 152 rural council areas (out o f 320) to organize the demand o f producers and their organizations. Thanks to the PSAOP, producer organizations now contribute fully to the definition, implementation, and evaluation o f research and extension programs. POs have established and managed their own capacity- building fund (FSRRD - Demand-Driven Rural Services Funds) that allocates resources to microprojects prepared by POs and selected within the framework o f CLCOPs. CLCOPs cover 63 percent o f POs inventoried in these areas and represent almost 50,000 producers. To date, the FSRRD has financed more than 1,100 projects (against an init ial objective o f 852), for a total equivalent amount o f US$700,000. Projects benefited almost 62,000 producers, covering themes such as agricultural production, post-harvest operations, organization and management o f POs. Beyond managing FSRRD, CLCOPs have been instrumental in organizing consultation with grassroots organizations and disseminating information to producers. Many development partners now recognize CLCOPs as the entry point for any activity dealing with producers and their organizations at the field level.

The draft ICR concludes that the f i rs t phase was successful in promoting changes and that further efforts are required to sustain these achievements and to maintain the momentum o f institutional changes, agricultural services reorganization, and producer empowerment. Research institutions and agricultural advisory services wil l be able to further increase their responsiveness and accountability to producers if the latter are empowered to manage the resources that finance their services. As far as public services are concerned, the two sectoral ministries need to consolidate their new mandates by taking a more active part, at the central level, in ensuring the overall coordination, monitoring, and evaluation o f the agricultural sector. At the regional level, regional directorates will translate their new missions into day-to-day activities for field agents. Moreover, beyond institutional reforms, economic impacts should now be a core objective o f all these activities to achieve concrete results in terms o f agricultural productivity and incomes.

A3.2 Lessons of PSAOPl 1- Institutional reforms take time to define and need to be accompanied in their

implementation. Reforming public institutions, while building private providers and empowering producer organizations to take over functions, obviously requires time. These aspects should be taken into account in the design o f PSAOP-type projects. APL i s the appropriate financial instrument, but the first phase should last at least four years and could be extended to five.

2- POs are key drivers to foster change and ensure sustainability. The Senegalese experience demonstrates that institutional reforms and the development o f new relationships (clientshervice providers) can be enhanced and accelerated if producers are empowered. This means that producer organizations require financial resources and technical support (with internalized human resources) to develop capacities to become proactive and able to ask for services, as well as to participate in pol icy formulation. Demand-driven services become relevant, efficient, and accountable with producer empowerment to build the demand side and articulate producers’ concerns.

31

3- Multi-stakeholder financing mechanisms. The FNRAA, ANCAR, and CLCOP experiences in the framework o f PSAOP implementation show that multi-stakeholders decision-making mechanisms for allocating funds are relevant. These foster dialogue, partnership, and collaboration among institutions and ensure stronger coordination in the field, However, as mentioned above, participation o f producers through their organizations i s crit ical to designing interventions relevant to producers’ real needs and consistent with what has already been implemented by other partners.

Key Performance Indicators and Triggers for the Second Phase

4- Implementing agency vs. PIU. The PSAOP experience has demonstrated that local institutions, such as the FNRAA secretariat, ANCAR, and CNCR, can be effective if empowered as implementing agencies and not just considered as beneficiaries o f the project under the umbrella o f a temporary PIU. However, coordination o f interventions undertaken by several implementing agencies remains a concern. This coordinating function must be fulfilled by public services in close collaboration with a l l partners. Arrangements wi l l thus be made for the second phase in the framework or under the responsibility o f the Ministry of Agriculture.

Actual / latest estimates

A3.3 PSAOP2 (as defined in the PAD o f PSAOPl)

Key Performance Indicators and triggers to proceed trigger from PSAOPl 1 to

1. NARF i s a legal entity governed by Private law with terms o f reference Satisfactory to the Association.

The PSAOP 1 had 19 triggers conditioning the transition to the second phase. The fo l lowing table presents how they have a l l been substantially satisfied.

3 The financing mechanism i s established under

3 I t i s an association o f “public interest”, governed by private status and rules.

the name ofFNRAA.

2. NARF functions satisfactorily according to agreed upon policies and procedures, certified by an independent management audit.

F U functioning i s governed by a manual of procedures.

audits were fully satisfactory. = Between 2000 and 2004, a l l independent

3. Two other donors contribute to NARF, for a minimum o f lopercent.

3 The AfDB and EU have financed research projects under the FNRAA system.

~

Components 2 & 3 - Research Institutes Development: Improve I S R A and ITA efficiency

4. I S M and ITA are operating satisfactorily according to their various management and organizational manuals.

a I S M and ITA are operating satisfactorily.

5 . Financial management and accounting systems are functioning adequately as reflected in the annual audit reports, which are unqualified, except for minor qualifications.

5. At least 15 I S R A projects and 5 ITA projects have been approved by NARF. Four of these are jo int ventures.

Component 4 - Agricultural Extension: Establish extension services accountable to producers and responsive to their needs through :ontractual arrangements

3 All independent audits were satisfactory without major reservations.

3 FNRAA financed 19 projects under I S R A ’ s leadership and 5 under ITA’S responsibility.

______

7. The government holds a maximum of 49 percent o f ANCAR’s shares.

= The Government has reduced to 42 percent i t s participation in ANCAR’s capital.

~~

1 1, All A N C A R staff i s contractual. I 3 AU ANCAR staff i s contractual.

3. A N C A R successfully established a decentralized extension service, with contractual arrangements with producer organizations, over at least 142 rural communes.

9. Producer organizations contribute to ANCAR’s operating costs (including salaries), either directly or through contractual arrangements at the local level.

10. An evaluation of staff performance has been carried out after a two-year probation period and for each staff, a decision has been made (contract renewal or redeployment to the civ i l service).

= A N C A R i s represented in the 11 regions and i t s network o f rural and agricultural advisors covers 142 rural communities.

3 POs contribute to 36 percent on average o f the costs o f A N C A R activities.

= An assessment o f A N C A R staff was done in 2005 but implementation o f recommendations i s pending.

Component 5 - Support to Producer organizations: Improve producer organizations’ ability to provide services to their members to access inputs, credit and marketing and to make their voice heard in the decision making processes

12. A N C A R operates according to satisfactory policies and procedures, in particular as far as the financial management and accounting system i s concerned, as reflected in the audit reports.

2 All o f ANCAR’s audits were unqualified.

33

14. The National Council for Rural Cooperation (CNCR) contributes to the funding of i t s own operating costs (excluding

CNCR covers i t s operating costs thanks to internal financial resources; PSAOP contribution to CNCR activities has decreased

~

z Mandates o f sector Ministries, for central services and regional directorates, were revised and are being implemented. Further improvement or clarification wil l be prepared for PSAOP2 based on the on-going public expenditure review (to be completed in March 2005).

i t s publ ic service functions) out of i t s own resources.

from 36 percent in September 2003 to less than 25 percent in October 2005.

strengthen their capabilities in these domains

17. The agreed upon redeployment o f personnel i s completed, including for the personnel currently seconded to projects and to the Socidtds Rdgionales de Ddveloppement Rural (SRDR)The agreed-upon redeployment o f personnel i s completed, including for the personnel currently seconded to projects and to the Socidtds Rdgionales de Ddveloppement Rural (SRDR)

18. The extension mandate o f the SRDRs and ANCAR has been redefined on the basis o f an external evaluation including the cost- efficiency o f each structure, beneficiary satisfaction and relevance o f extension services in order to decide on the institutional modalities for carrying out extension services.

19. The extension mandate o f the SRDRs and ANCAR has been redefined based on an external evaluation including the cost- efficiency o f each structure, beneficiary satisfaction, and relevance o f extension services in order to decide on the institutional modalities for carrying out extension services.

The Ministr ies focus only on their regulatory, policy-making, and monitor ing functions.

15. POs prov ide at least 75 Percent of the services requested by their members.

3 Staff has been redeployed in the regions according to the agreed plan.

z The FSSRD has financed 1,109 projects

Staff has been redeployed according to the agreed plan.

16. All PO requests for technology are taken in to account either in research ProPosals Or in extension programs.

~

An external evaluation o f ANCAR activities has been carried out with satisfactory conclusions on ANCAR’S mandate; recommendations wil l be implemented during PSAOP2 based on a complementary beneficiary assessment undertaken under CNCR leadership.

PO needs for technology generation and transfer are taken into account thanks to their participation to FNRAA and ANCAR boards.

34

Annex 2: Ma jor Related Projects Financed by the Bank and/or other Agencies SENEGAL: Agricultural Services &Z Producer organizations Project 2

The Wor ld Bank’s portfolio in Senegal significantly addresses issues related to rural and local development and has a strong focus on rural poverty. Rural development i s one o f the four focal areas o f the forthcoming CAS. Wor ld Bank-supported projects currently under implementation include:

The Participatory Local Development Project (PLDP, P088656) wh ich i s intended as a follow-up o f bo th the National Rural Infrastructure Project (PNIR) and the Social Development Fund Project (PFDS). The PLDP supports the government’s decentralization and local development agenda. The project wi l l allocate resources to local governments and poor communities to improve the provision o f social and economic infrastructures, as we l l as for productive and income-generating activities. The project will provide small grants to community-based and producer organizations for technical assistance in the design and implementation o f productive, income generating, and natural resource management activities identified through participatory approaches, fol lowing key strategic local development objectives spelled out in local development plans. The implementation o f this project will be closely l inked to the PSAOP in that both projects intervene in the same areas (all 320 rura l councils).

’

The Agricultural Markets and Agribusiness Development Program (PDMAS, P083609) aims to increase non-traditional agricultural exports and revenues for project beneficiaries. The P D M A S i s based o n the supply-chain approach, and the use o f public-private partnerships. The project’s guiding principle i s the focus o n family producers. The project involves the integration of family-farms and small-scale enterprises into farm-to-market value chains in ways that enhance the competitiveness o f the entire supply chain. The project will strengthen selected export and domestic food chains by improving the business environment for vendor integration, upgrading the technology, and integrating production and marketing processes. The PDMAS complements the PSAOP in that the latter supports producer organizations and provides them with basic farm management services. The P D M A S works with more advanced producers and enterprises, as we l l as with exporters’ associations.

The Private Investment Promotion Project (PIPP) has supported the groundnut sector reforms that resulted in the Policy Letter for edible o i l private sector development in assisting with SONACOS’ privatization process. It also served as a basis for enhancing the business development environment through the Pol icy Letter for private sector development. As part o f the new Government strategy for accelerated growth, PIPP i s currently funding an 18-month strategy led by MIX, which aims to promote foreign direct investment in agribusiness. This initiative, due to begin in April 2005, wou ld lay the groundwork for future public/private endeavors to be financed under PDMAS, and should contribute to the leveraging o f future investments in infrastructure.

35

Other donors

Project

Private Sector Adjustment Credit (ongoing)

- The European Commission (EC) i s p lanning to launch two programs to support the agr icul tural sector. One program w o u l d support the development o f the groundnut subsector, the other w o u l d provide general support f o r the agricultural sector. T h e EC groundnut subsector support project (Euro 19 million) will support the product ion o f groundnut seeds at the communi ty level, the product ion o f selected genetic mater ia l (with ISRA), and quality control o f seeds (through the DRDRs). This project provides important areas o f possible collaboration with PSAOP2.

Last Supervision Ratings

IP DO S S

Sector Issues

Agricultural Markets and Agribusiness Development (approved on February 28,2006, not yet effective)

National Local Development Program (PNDL) (approved on not yet effective) National Rural Infrastructure Proiect (closed)

Agricultural Export Promotion Project (closed)

Bank-Financed

S S

S S

Sector reforms and enabling environment

Agricultural export

Local development

Other Dev. Agencies IFAD

AfDB

EU

C I D A

I s I s Private Investment Promotion Project (ongoing).

Agricultural Services and Producer organizations 1 (closed) i s i s

1. Matam agricultural development project (PRODAM) 2. Agro-forestry and fight against desertification (PAGF) 3, Village organization and management project (POGV) 4. Village development and land management project

5 , Microenterprise promotion project (PROMEW) Small Scale Irrigation Support Project (Tambacounda, Fatick and Kolda regions)( ongoing) Revitalization o f the groundnut industry (Programme de

( P A W

. - relance de IaJiliBre Armhide, ongoing) Ag. Processing microenterprises support project (PAOA- Projet d'appui aux opdrateurs de I 'agro-alimentaire, ongoing)

36

Annex 3: Results Framework and Monitoring SENEGAL: Agricultural Services & Producer organizations Project 2

PDO Project Outcome Indicators

innovations for increasing and stabilizing their agricultural productivity, production, and food security.

Intermediate Outcomes

contracted.

Food security has increased for at least 60 percent o f producers supported by the PSAOP (increased number o f meals per day, length o f “hungry season”). Intermediate Outcome Indicators

50 percent o f producers who are members o f POs participating in PSAOPl have adopted at least one innovation and have integrated i t into their production system.

Cofinancing o f FNRAA by other stakeholders (Government, other donors, commodity organizations, private sector) reaches 30 percent by the end o f the project. Entities other than I S R A and ITA obtain at least 15 percent o f funds disbursed by FNRAA.

A. Agricultural Research The N A R S develops and adapts technological innovations relevant to the needs o f producers and consistent with national and regional priorities. The competitive mechanism to fund research activities (FNRAA) i s established in a sustainable way.

Gauges the relevance and credibility o f the system.

Gauges the diversification o f research actors and is a proxy for competitiveness.

B. Agricultural advisory services A pluralistic network o f agricultural advisors i s established in al l 320 rural councils o f Senegal and works in collaboration with public and private service providers.

All 320 rural communes are served by at least one rural and agricultural advisor. by MTR At least 50 percent o f POs have signed at least one contract with agricultural advisors.

Advisory services providers other than ANCAR have signed at least 20percent o f service contracts with POS Two-thirds o f POs participating in community seed production have satisfied their need for quality seeds

24 innovations developed, adapted, on-farm tested, and transferred to advisory services.

Indicates coverage rate.

Trends can serve to gauge satisfaction with services provided. Cost sharing i s an indicator o f sustainability . Indicates degree o f plural ism in the advisory services system.

Indicates the effectiveness o f one o f the main technical programs.

Use of Project Outcome Information

Client satisfaction i s a proxy for effectiveness.

Gauges effect o f innovations, improved techniques.

Measures the effects o f the project on poorest population.

Use of Intermediate Outcome Monitoring

End product o f research activities.

for rainfed crops.

37

provide guidance (planning, coordination, M&E) o f rural development activities at the central and decentralized level, in accordance with the LOASP.

CLCOP and CRCR mechanisms are accessible to a l l rural producers. POs in form and consult their members in order to contribute to the preparation and implementation o f agricultural policies and programs.

POs facilitate access to capacity building and advisory services allowing producers to remove production constraints and to improve access to markets.

Indicates coverage rate. CLCOP are established and effective in a l l 320 rural communes Five producers’ federations and CRCR that have received project support have improved their efficiency and internal governance (quality o f records, meetings, actions taken, satisfaction o f members). In at least f ive regions, a network o f seed producers i s established for two agricultural crops In at least two regions, a network o f decentralized financial services proposes agricultural season credits for a specific crop

and plant protection at the central and decentralized levels. The ministry o f agriculture has defined and implemented a MTEF reflecting the priorities o f the LOASP. A sectoral M&E system i s established and working satisfactorily at the central and decentralized levels. The ministry o f livestock has defined and implemented a MTEF reflecting the priorities o f the LOASP. Senegal i s declared immune f rom contagious bovine peripneumonia. Inspection o f animal carcasses i s conducted systematically in a l l 34 departmental capitals. At least 50 percent vaccination coverage against chicken Newcastle disease. Procurement and FM activities are executed in conformity with the procurement plan, the implementation manual, IDA procedures. All project reports are presented within 30 days o f the end o f the relevant period. Project rated satisfactory at a l l times during implementation.

M O L has improved sectoral guidance (planning, coordination, M&E) at central and decentralized levels.

Strengthened epidemiologic surveillance o f livestock.

The implementation o f the project i s timely and satisfactory at a l l times.

Indicates strategic coherence, shows readiness to implement coherent programs through budget support and control. Gauges major tool to guide pol icy formulation and control.

Indicates strategic coherence, shows readiness to implement coherent programs through budget support and control. Gauges major effects on epidemiologic surveillance and control o f animal products.

Gauges conformity with fiduciary requirements and efficiency o f implementation.

Gauges efficiency o f coordination andmonitoring system.

Gauges overall implementation.

Checks relevance o f support programs to federations. Gauge sustainability and corporate governance o f 0P.PO

Measures effectiveness against two o f the major constraints faced by producers. Measures effectiveness against two o f the major constraints faced by producers.

Gauges efficiency and effectiveness at different levels.

38

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Annex 4: Detailed Project Description SENEGAL: Agricultural Services & Producer organizations Project 2

1. Project strategic approach and guiding principles The development objective o f the Agricultural Services and Producers’ Organizations Program (PSAOP) i s the sustainable increase and stabilization o f smallholders’ productivity, production, and income through the adoption o f innovation. I t s long-term vision i s characterized by: (i) strong and effective producer organizations capable o f co- managing the nature and quality o f the services they receive and co-finance, as we l l as influencing the pol icy dialogue in the sector; (ii) efficient and deconcentrated sectoral ministries focusing o n their essential functions o f po l icy formulation, planning, monitoring and evaluation, as we l l as in the definit ion o f the regulatory framework; and (iii) financially sustainable and demand-driven agricultural services, accountable to different categories o f producers and relevant to their needs, evolving in a competitive environment, capable o f supporting the generation and dissemination o f innovations o n a contractual basis.

The proposed project i s the four-year second phase o f an Adaptable Program Loan (APL), originally consisting o f three phases, two o f three years and the third o f four years. The implementation o f the first phase (PSAOPl), and lessons fo rm other projects in Afr ica and elsewhere, confirmed that the programmatic approach o f the APL was to be preferred to a Specific Investment Lending, particularly because institutional reforms need time to be enacted and to ensure ownership by the different stakeholders, and then need support once implemented.

Other lessons clearly indicate that three years are not enough to achieve the PDO o f most projects in Afr ica (in fact, PSAOPl implementation took more than f ive years). For this reason, the government o f Senegal and the Wor ld Bank agreed to extend the duration of PSAOP2 to four years, instead o f three as originally planned.

PSAOP2 would continue the path traced by PSAOP1; incorporating lessons f rom experience o f the f i rst phase (see Annex 1). The project wi l l support the implementation o f reforms o f sectoral institutions, whi le building a pluralistic network o f service providers, and empowering producer organizations to participate in po l icy dialogue and have access to services relevant to their needs. After a first phase focused o n the definit ion o f the institutional reforms, the second phase increases i t s focus o n the goal o f increasing productivity, at least for the areas and CLCOPs that have already benefited f rom PSAOPl .

2. Project development objective and key indicators The development objective o f the second phase i s to increase access o f smallholder producers to sustainable and diversif ied agricultural services and innovations, in v iew o f increasing agricultural productivity.

The key performance indicators for the project are the following:

0

0

At least 80 percent o f producers are satisfied with the services contracted 50 percent o f PO members o f CLCOP o f PSAOPl have adopted at least one innovation and have integrated i t in their production system

- 42 -

0 Food security has increased for at least 60 percent o f producers supported by the PSAOP (increased number o f meals per day, length o f “hungry season”)

Intermediate outcome indicators are presented in Annex 3 (Results Framework and Arrangements for Results Monitoring). Whenever possible, indicators wi l l be disaggregated by sex and age group o f beneficiaries. The Project Implementation Manual wi l l include a monitoring and evaluation section describing key performance indicators (down to the output level) for a l l program activities, including safeguards measures.

3. Project components The project desi substantially reflects the Phase 1 design, but also takes into account lessons learned and the evolution o f the context since the in i t ia l conception o f the Agricultural Services and Producer Organizations Program (PSAOP) in 1999. To highlight the main thrusts o f the project and improve f lexibi l i ty in the allocation o f resources, activities are clustered into four ma in components: A) agricultural research, B) agricultural and rural advisory services, C) producer organizations, and D) sectoral coordination.

,P

Component A: Support to the National Agro-Sylvo-Pastoral Research System (SNRASP) ( US$lO.O mil l ion, o f which IDA US$5.5 mi l l ion)

Context and rationale. By supporting the creation o f the National Agricultural and Agroprocessing Research Fund (FNRAA), the f i rst phase o f the PSAOP established a transparent and competitive mechanism for the financing o f agricultural and agroprocessing research programs. By drawing a clear distinction between financing and execution o f research activities with FNRAA, PSAOP 1 has substantially contributed to improve transparency in the allocation o f research funds and has enhanced synergy o f competence and resources concerning generation o f innovations. PSAOP 1 has also contributed to the creation o f partnerships with other actors o f the research system (University, POs, NGOs, private sector)., In addition, producers are n o w increasingly participating in the identification and preparation o f research programs as we l l as in the monitoring o f their implementation.

The first phase o f PSAOP also helped the main agricultural and agroprocessing research institutions improve their work ing tools and knowledge in order to comply with the scientific requirements o f quality research. More specifically, PSAOP 1 strengthened the scientific and management capacities o f the two ma in research institutions, the Senegalese Agricultural Research Institute (ISRA) and the Food Technology Institute (ITA), through fbnding o f scientific and technical materials and equipment, rehabilitation and improvement o f research centers and stations, and strengthening human resource capacities. The government’s financial participation was increased, and the sources o f

lo The team took into account the PSAOPl Implementation Completion Report (ICR). The preliminary conclusions o f the ICR were available prior to the appraisal and were incorporated into the present PAD.

- 43 -

financing diversified, particularly with the financial participation o f ADB and the EU through FNRAA.

Component objective. The objective o f the component i s to consolidate the experience o f the first phase in order to improve the effectiveness, relevance, and sustainability o f the agricultural and agroprocessing research system by (1) strengthening the role and expertise o f FNRAA as a major instrument o f the SNRASP Steering Committee for steering and providing overall oversight o f research activities at the national level, above and beyond i t s primary role which i s the financing o f programs, and (2) strengthening the scientific and managerial capacity o f research institutes, including through supporting the rehabilitation o f some regional research centers and associated stations o f I S R A and ITA.

Emphasis wil l be placed on improving the mechanisms for greater participation o f producers in research governance and the participatory development o f technologies and innovations, as well as their use on a larger scale, by involving producers in al l phases o f the research process with the objective o f promoting local initiatives. Emphasis wi l l also be placed on the development o f a more systematic approach to the analysis o f socioeconomic impacts on family production systems.

The research component would focus onto two major thrusts: 0 Strengthening the institutional and financial capacity o f SNRASP by developing

i t s Steering Committee (Cornit6 de Pilotage du SNRASP) so that it wi l l be able to provide necessary methodological, scientific, and policy guidance and by ensuring financial support through FNR4A financing mechanisms for (a) strategic and applied agricultural research based on medium- and long-term national priorities, and (b) demand-driven short-term R&D and adaptive agricultural research conducted at the regional level in the main ecological regions o f Senegal; and Upgrading and maintaining the scientific and methodological capacity o f national agricultural research, particularly at I S R A and ITA, which wil l continue to play a central role in the national system o f agricultural research.

0

Indicators. Performance o f the component wil l be measured through the following indicators:

(i) Twenty-four innovations developed, adapted, on-farm tested, and transferred to advisory services by the end o f the project.

(ii) Cofinancing o f FNRAA by other stakeholders (Government, other donors, commodity organizations, private sector) reaches 30 percent by the end o f the project. Entities other than I S R A and ITA obtain at least 15 percent o f hnds disbursed by FNRAA by the end o f the project.

(iii)

Implementation strategy. A clear distinction has been drawn between strategic and applied research programs, on the one hand, and adaptive research and Research and Development (R&D), on the other. Strategic and applied research programs are considered national public goods and, accordingly, they wil l receive substantial

- 44 -

government support in the medium and long term. I t was thus agreed that, during the l i fe of PSAOP2, the government and the main agricultural supply chains would gradually cover the costs o f strategic research programs. Adaptive research and R&D projects must be able to quickly respond to needs expressed by producers and agroprocessors within a local or regional context. The emphasis o f PSAOP2 wil l be placed o n the achievement o f concrete results in terms o f productivity and agricultural growth. T o that end, i t has been agreed that 60 percent o f IDA resources allocated for research sub-projects would be earmarked for the financing o f adaptive research and R&D. For both types o f research, given the relative limitations o f available resources, the criteria o f selectivity and pr ior i ty should serve as the basis for achieving highly positive results, f rom an economic, social, and environmental perspective.

The selection o f areas o f strategic and applied research wi l l hinge o n their potential contribution to:

(i) achieve national priorities (agricultural competitiveness, contribution to poverty reduction, opening o f new export markets, sound natural resource management, etc.); build capacities and expertise in the area o f collaborative research and jo in t development o f knowledge and innovations, making full use o f the contributions o f a l l categories o f S N R A actors (researchers, academics, NGOs, private sector, technical and advisory services, producers, etc.); create a core o f national expertise o n strategic themes with the necessary leadership for steering research programs and thus able to contribute to the sector over the long term; and have direct impact o n pr ior i ty research programs at the national level and provide access to technologies available at the international level, particularly with CGIAR institutions, that can be imported and adapted to the Senegalese context.

(ii)

(iii)

(iv)

In addition, collaborative subregional programs, particularly the West A f r i ca Agricultural Productivity Project (WAAPP), will be strongly encouraged.

Pending the definit ion o f the SNRASP strategic plan, eleven “technology families” (see attached annex) have been indicatively proposed to address strategic research issues. This classification i s interesting because it can be used to establish clearly targeted partnerships at the subregional and international levels with a v iew to improving the overall effectiveness o f the research system to satisfy as efficiently as possible the demand for strategic research o n Senegal’s k e y problems.

List o f proposed “technology families”

Technology families 1. 2. Optimal use o f resources 3. 4. N e w uses for products 5 . Improved farm management 6.

Growth in productivity through genetic improvements

Post-harvest technology and productiodindustry linkages

Integrated pest and disease management

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7 . 8. 9. 10. 1 1.

U s e and management of a biotic natural resources U s e and management o f biotic natural resources Technology consistent with environmental standards Technology and production systems for smallholders Policy development and institution building

Component description.

Subcomponent A1 (US$S.O million, o f which IDA US$3.0 million): Strengthening the SNRASP strategic steering capacity and the financing capacity through FNRAA

Al. l Institutional strengthening o f SNRASP (1.0 U S $ million, o f which IDA US$O.9 million). To link the activities o f this component more closely to the thrusts o f the Agricultural Framework Act (Loi d 'Orientation Agro-Sylvo-Pastorale or LOASP, Articles 68 and 69), the project wi l l help strengthen the FNRAA Management Committee (Comite' de gestion du FNRAA) to make i t evolve into the SNRASP Steering Committee (Comite' de Pilotage du SNRASP), the institutional entity responsible for decision-making and scientific and financial management (through FNRAA) o f the national research system. The mandate o f the SNRASP Steering Committee wil l focus on: (i) the general approach for upgrading and maintaining national scientific capacities in the agricultural area; (ii) overall steering o f programs to generate innovations (strategic research, applied research, and R&D) in l ine with the strategy and national priorities o f the medium- and long-term National Strategy o f Agricultural Research; and (iii) development o f the capacity to undertake collaborative research with the different stakeholders in agricultural research - including producers, producer organizations, and NGOs - for adaptive research and R&D subprojects. A comprehensive system o f scientific monitoring and financial management wil l be developed for SNRASP so that research program budgets and technical and financial implementation reports can be consolidated and monitored as a whole by donors.

Through FNRAA, the project could finance necessary investments (vehicles, supplies and equipment, technical assistance and studies, staff training, methodological support for change and retraining, publication and documentation) and, on a decreasing basis, the operating and management expenses o f the SNRASP Steering Committee and the FNRAA Executive Secretariat. Financial support wil l be arranged for scientists to participate in the various regional and national consultations, as well as for overall monitoring and evaluation o f SNRASP programs with the participation o f producers.

The action plan for transforming the FNRAA Management Committee into the SNRASP Steering Committee, as well as the composition, terms o f reference, and policies and procedures o f the latter, wi l l have to IDA for no objection, and finally approved by the government.

An updating o f the FNRAA research projects management manual (Manuel de gestion des projets de recherche' FNRAA), reflecting the improvements introduced during

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preparation o f the second phase and discussed at the time o f the appraisal mission, will also be required prior to project implementation.

A1.2 Financial support to FNRAA (US$4.0 million, o f which IDA US$2.1 million) Through two specific financing windows, FNRAA wil l be responsible for managing a system o f grants for (i) strategic and applied research programs and (ii) R&D subprojects.

0 Window 1: Financing o f strategic and applied agricultural research programs (US$1.2 million, o f which IDA US$0.6 million). The project wil l support the financing and/or cofinancing with other donors (through parallel financing) o f pr ior i ty strategic and applied agricultural research programs identif ied in the Strategic Framework o f Agricultural Research and specific studies for planning and analysis. Implementation o f these programs wil l be open to competition through a mechanism of targeted requests for proposals, in accordance with Chapter 16, Art icle 68 o f the L O A S P (2004-16).

Under this subcomponent, the project wou ld finance both direct and indirect costs associated with the research program, up to a certain percentage o f direct costs in accordance with the FNRAA research projects management manual. Indirect costs (up to a maximum o f 20 percent o f the cost o f each research program) include the committed costs o f research institutions, the maintenance and management o f research stations and facilities, and an incentive p lan for researchers. Indirect costs could also include short-term training and travel by team members in connection with these strategic and applied research programs. Direct costs include small investments directly linked to implementation o f the research programs, equipment, supplies, as we l l as the operating costs inherent to the research programs, including the salaries o f contractual personnel recruited for the duration o f the research program.

0 Window 2: Financing o f demand-driven adaptive research and R&D subprojects (US$2.8 million, of which IDA US$1.5 million). Fol lowing o n the experience o f FNRAA (PSAOPl), the project wou ld finance, o n a regional and demand-driven basis, R&D subprojects submitted by beneficiaries (producers and agroprocessors) f rom each region aimed at resolving constraints to the productivity o f small farms, bringing agricultural products to market, and generating income. Access to FNRAA wil l be open to a range o f actors, including NGOs and universities. T o that end, under Component Al, efforts wi l l be made to ensure that information o n the existence o f FNRAA and the procedures for tapping in to i t are widely disseminated. Priori ty wil l be given to projects that match farmer initiatives and correspond to existing dynamics o f experimentation and searching for solutions.

Grants wi l l cover the operating costs o f the research subproject, particularly equipment and supplies, travel, small equipment, and the wages o f research assistants and short-term contract workers (for the l i f e o f the subproject). Grants could also finance short-term training and travel by research team members. Large construction projects, the acquisition o f major equipment, training programs leading to a diploma, and salaries o f permanent staff are ineligible.

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Implementation of the FNRAA subcomponent 0 Window 1. During the f i rst year o f PSAOP2 implementation, for each “technology

family” (see text box) validated in the strategic plan, the SNRASP Steering Committee w i l l ensure that: i) a thorough inventory o f current research programs, technical and methodological capacities, and needs in Senegal i s realized and ii) potential areas o f research in terms o f technology and development are defined. These results wil l be presented at a workshop wil l issue recommendations on new priorities programs. Following these workshops, the SNRASP Steering Committee wil l identify priority areas for the first generation o f activities to be undertaken in l ine with the SNRASP Strategic Framework. During their implementation, the strategic and applied research programs will periodically be supervised by teams o f experts commissioned by FNRAA, with the participation o f producer representatives, to analyze their proper implementation from a methodological, scientific, and financial perspective, as well as their results and their potential impacts.

In view o f their strategic and public nature, during the f i rst two years o f project implementation, at least 30 percent o f the financing for these programs wil l be provided by the Government and major agricultural commodity chains (particularly in the rice and groundnut sectors), and possibly from cofinancing through partnerships with regional and international research organizations (especially for biotechnology development). I t has been agreed that, in the third year o f project implementation, these programs wil l be wholly financed by the Government and the major agro-sylvo- pastoral industries.

0 Window 2. Annual allocations will be made at the regional leve l in accordance with a memo on finance guidelines. The selection and approval o f financing for R&D subprojects wil l be based on requests expressed at the regional level (with the assistance o f the National Agricultural and Rural Advisory Agency [ANCAR]) and would be prioritized based on socioeconomic and environmental criteria established beforehand in consultation with producers. The system o f ranking and selecting R&D requests (through weighted parameterization) will be developed and should be adopted before the end o f the f i rst year o f PSAOP2. These subprojects wi l l periodically be monitored in relation to the request and in relation to the various types of operations and producers in order to analyze and assess the relevance o f the system o f ranking and selection and make any necessary modifications.

The sub-component wi l l be implemented by FNRAA in conformity with the Project Implementation Manual. Grant funds for strategic and applied research and for R&D will fall under the responsibility o f FNRAA and be used in accordance with the procedures outlined in the management manual (Manuel de gestion). It has been agreed that 60 percent o f the financial appropriations to FNRAA for research program implementation will be earmarked for Window 2: Adaptive Research and R&D. The satisfactory functioning o f FNRAA operating methods and o f i t s finance mechanisms for strategic and applied research programs and for R&D will be key determinants o f i t s success.

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A2: Upgrading and maintaining SNRASP’s scientific research capacities (US$5.0 million, of which IDA US$2.5 million). The project wil l contribute to:

the rehabilitation o f some o f I S R A ’ s physical infrastructure (regional research centers and stations) according to i t s restructuring plan. This wil l concern Sangalkam research station; Bambey centre and i t s N io ro station; Saint-Louis center and i t s N d i o l and Fanaye stations; Ko lda centre and i t s stations o f Sinthiou Malem and Velingara; and Dahra station. complementary works for the rehabilitation o f ITA infrastructure vehicles, supplies, and facilities for the entities charged with conducting the research (particularly ISRA and ITA); technical assistance and studies; training o f research staff (in scientific matters, especially biotechnology, and in methodological matters such as participatory research); the establishment o f a system o f scientific monitoring; publication and documentation; and researchers’ participation in regional and international networks and workshops.

(i)

(ii) (iii)

(iv)

(v)

The sub-component wi l l be implemented by I S R A and ITA in conformity with the Project Implementation Manual

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Component B: Agricultural and rural advisory services (US$17.6 mi l l ion, o f which IDA US$4.7 mil l ion)

Achievements o f PSAOPl Agricultural advisory services are provided in 144 rural council areas and have concerned 1,462 POs (o f which 56 percent are women’s organizations) in 700 villages. The approach o f responding to producer demand has uncovered substantial challenges and strong demand (concerning, for example, improvements to soil fertility, access to quality seeds, improvements to small ruminant production systems and poultry farming, and bringing agricultural products to market) which, when addressed, have yielded encouraging results in terms o f both methodology and production. The conclusive initiatives cited above were developed f rom issues identif ied o n the basis o f producers’ demand, even though they differ in terms o f number o f OPs and geographical coverage. Some issues (such as access to seeds, improvements to small ruminant production systems, village-level poultry farming, development o f bottomlands rice, improvements to soi l fertility, etc.) have a national scope, and represent one o f the foundations o f production. Other actions are more localized and concern improvements to the quality or agroprocessing o f specific agricultural products (groundnuts for direct consumption and for processing into oil, millet, green beans, recovery o f the banana and sweet potato industries, etc.).

ANCAR management has created an imbalance between technical and administrative personnel, favoring the latter and delaying the deployment o f field-level technicians. The decentralization o f the administrative and financial management towards regional directorates has also been slow, limiting the operational autonomy o f the regional level.

The second phase wil l serve to improve ANCAR governance and management and consolidate the initiatives launched during the f i rst phase, particularly with respect to structural issues and specific actions targeting the quality o f agricultural products to facilitate market access.

Objectives and indicators The objective of the component i s to promote and guide a demand-driven decentralized agricultural and rural advisory service, enabling smallholder producers to sustainably improve their productivity, output, food security, and income.

The principal result associated with this objective i s the establishment o f an operational mechanism o f agricultural and rural advisory in the 320 rural communities and the main peri-urban areas, with the actual involvement o f publ ic and private service providers.

The results indicators are: 0 At least one agricultural and rural advisor i s active in each rura l community, with

the assistance o f approved public o r private service providers. 0 Level o f producers’ cofinancing o f advisory services 0 Public and private service providers approved by ANCAR have signed at least 20

percent o f service contracts with producer organizations.

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0 The groundnut, millet, and maize seed requirements o f producers assisted by A N C A R are satisfied to a significant degree: at least 30 percent in the case o f groundnuts, 30 percent for millet, and 70 percent for maize. At least 70 percent o f producers are satisfied with the services contracted. 0

Target groups and areas The requests come from smallholder producers through their organizations (economic interest groups, GPFs, GPs, associations, etc.) and from producers within supply chains: seeds, horticulture, livestock, fisheries, beekeeping, handicrafts, etc.

These target groups are situated on farms and in villages and rural and peri-urban communi ties.

Strategy (approach) The intervention strategy i s based on meeting demand by delivering two types o f services: basic (public) agricultural advisory services and specialized (private) agricultural advisory services. Basic agricultural advice focuses on activities affecting the foundations o f production (seeds, soil fertility, etc.); i t i s financed by the government. Specialized agricultural advice focuses on profitable economic activities, such as livestock fattening, the processing o f agricultural products, and the functions o f market- driven industries; it wi l l cost a fee. Partnership wil l be developed with programs financed by IFAD and the EU to ensure synergy and complementarity with the PSAOP.

Subcomponent B1: Support in steering the national agricultural and rural advisory system (US$12.0 million, o f which IDA US$1.7 million).

The subcomponent wil l support the implementation o f the following main activities.

Activity BI.1: Refocus ANCAR on its mandate to steer the national agricultural advisory system. The project wil l support a restructuring so as to refocus the Agency on i t s principal mandate o f regulatindsteering the national agricultural and rural advisory system in order to improve i t s governance (strengthen the administrative and financial management autonomy o f the regional directorates and their operations) and streamline i t s interventions while ensuring service providers’ participation in the supply o f agricultural advisory services. A new deployment plan wil l be built around a priority system o f one advisor per rural community, intermediaries to be set in place by the producer organizations, and identified private and public service providers. The various ANCAR manuals o f procedures wil l be updated accordingly.

Activity BI.2: Implement the agricultural and rural technology in formation system (SITAR). SITAR will be a tool o f monitoring and evaluation, capitalization, and dissemination o f methodological instruments and information (technological, trade/market, and development policies, farmer initiatives, monographic/statistical data, and data on family farms) that wil l help steer the national agricultural and rural advisory system o f S N R A A and facilitate exchanges between producer organizations, ANCAR,

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and researchers. As an instrument for the dissemination o f information and exchanges, the system will help stimulate R&D and communication as regards the PSAOP and the Ministr ies o f Agriculture and Livestock. SITAR wil l be maintained by the producer organizatiodANCAFUresearch framework and open to al l actors involved in supporting rural development.

Subcomponent B2: Strengthening the supply o f agricultural and rural advisory services (US$5.6 million, o f which IDA US$3.0 million) In connection with implementation o f the agricultural advisory programs, this subcomponent wil l contribute to the following goals: the actual participation o f public and private service providers in the supply o f services to producers and their organizations; capacity building for ANCAR staff and other service providers so that they can carry out their specific functions in l ine with their specific mandate and area o f intervention. The main activities are presented below.

Activity B2.1: Support the emergence of public and private agricultural and rural advisory service providers. ANCAR, in cooperation with the producer organizations, wi l l compile a l i s t o f public and private service providers at the regional and national levels and approve them on the basis o f their capacity to provide the requested services. Eligibility criteria for service providers wi l l be developed, as well as rules and regulations pertaining to their interventions. The PSAOP implementation manual and the manuals o f procedures o f ANCAR and the producer organizations wil l spell out the eligibility criteria in detail, as wel l as the procedures for approving and monitoring service providers.

Activity B2.2: Build the capacities of actors. The technical and organizational capacities of the ANCAR mechanisms, farmer intermediaries, and service providers wi l l be strengthened through qualifying training plans to be worked out with the assistance o f BFPA. SITAR wil l be used in the training activities as a teaching aid and a source o f technical and statistical information and data.

Activity B2.3: Develop and implement agricultural and rural advisory programs on major issues identified from producer demand. The development o f rural community advisory programs falls under the purview o f ANCAR. Implementation o f these programs wil l couple improvements to soil fertility together with al l advisory services, particularly in the central and northern zones o f the Groundnut Basin where the problem of soil fertility i s greatest, in partnership with Sustainable Land Management programs.

B2.3.1. Produce quality seeds with the GPFs for groundnuts, millet, maize, bottomlands rice, and other crops. Implementation o f community-based seed systems wil l be pursued with small producers so that they can build up personal reserves o f seeds. ANCAR will support the producer organization component in setting up networks o f professional groundnut seed producers.

B2.3.2. Support improvements to small ruminant production systems and poultry farming, with an emphasis on consolidating technical, organizational, and management

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performance so as to better ensure technical and economic mastery o n the part o f producers, as we l l as sustainability and replicability.

232.3.3. Support improvements to the quality o f agricultural products and efforts to bring grain products (millet, sorghum, and maize) to market by developing farmer/processor relations. Within this framework, the area devoted to quality groundnut production wi l l be expanded f rom 300 hectares in 2005 to 2,000 hectares in 2009 in partnership with the Vi l lage Organization and Management Project (POGV).

B.2.3.4. Conduct the necessary studies o n the typology o f rural fami ly farm operations and the categorization o f producer organizations in order to: (i) guide the development o f advice for farms and producer organizations; (ii) implement SITAR; and (iii) determine the real financial capacities o f producer organizations and establish in a more objective manner their rate o f participation in the costs o f services.

Implementation (institutional arrangements) ANCAR remains the implementing agency for the agricultural and rural advisory services component. The actors responsible for providing basic agricultural advice are ANCAR, public service providers (deconcentrated departments, regional rural development companies), or private service providers. ANCAR will provide basic agricultural and rural advisory services in i t s areas o f expertise. In the case o f services that go beyond its expertise, ANCAR will put producers in touch with the public institutions whose mandate matches the sought-after services, o r wi l l help them enter into contracts with private service providers and then monitor the quality o f services. The supply o f agricultural advisory services in peri-urban areas, and o f specialized services in general, wi l l fa l l as a priori ty to private service providers o n a competitive basis. ANCAR wil l assist the producer organizations in the procedures for choosing private service providers by assessing their bids and will provide quality control o f services. The studies planned in connection with SITAR, the typology o f rura l fami ly farms, the categorization o f producer organizations, and the inventory o f service providers wi l l be handled by private consultants. A producer organizatiodANCAlUresearch committee will be formed to take charge o f monitoring, coordination, and validation o f results.

Suppoh for the development o f community-based seed systems wil l be brought in l ine with the planned support f rom the EU for recovery o f the groundnut industry.'' In particular, the partnership with FAD (PRODAM, PAGF, POGV, PROMER) wil l be developed to ensure greater complementarity and synergy. In common regions o f intervention, A N C A R and the projects wil l do their programming together in order to strengthen the connections between their interventions.

'I Over a three-year period, the EU plans to provide financial support in the amount o f € 19.7 m i l l i on for recovery o f the groundnut industry through the new Mutual Obligations Framework (COM) negotiated with the government o f Senegal. The COM aims to improve the competitiveness o f the industry in al l segments and addresses the industry's key issues through operational activities (replenishment o f seed capital; diversification o f groundnut products and promotion o f groundnuts for direct consumption; professionalization o f industry actors; improvements to soi l fer t i l i ty ; institution building; and improvements to information systems).

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Instruments (financial flows) Committed costs (wages, water, telephone, electricity, office supplies, fuel) and operating expenses o f A N C A R related to the activities fall ing under i t s publ ic service mandate will be supported through government grants starting in fiscal year 2007. To that end, a program contract wil l be established between ANCAR and the government.

The project will finance costs related to the preparation o f agricultural advisory services and wil l subsidize, through the ANCAR budget, basic advice (intended for the poorest producers). Producers wi l l participate in the costs o f this advice in accordance with their financial capacities, but at least at a 15 percent level. For productive investments (income generating activities) and fee-based specialized advice, the project will support A N C A R and the producer organization component through activities designed to put producer organizations in contact with DFCs (especially DFCs supported by the National Local Development Program if they are present) for access to capital investment loans, or with other service providers (providers o f agricultural advice, traders, manufacturers).

The general mechanism works as follows: (i) based o n a preliminary assessment carried out with the Producer organizations’ Local Consultation Forum (CLCOP) and taking into account farmer initiatives and innovations in particular, the agricultural advisor finalizes identificatiodprioritization and consolidation o f demand in the advisory programs o f the rural community (or the municipality) in two basic and specialized categories; (ii) A N C A R identifies the basic advisory services that go beyond i t s capacities and initiates the procedures for putting producer organizations in contact with approved public or private service providers so as to facilitate the supply o f services and establish producer organizatiodservice provider/ANCAR contracts. With basic advice subsidized at an 85 percent level, the contracts wi l l specify, among other matters, the methods for making funds available ( A N C A R budget share and producer organization share) to the service providers. For advice in peri-urban areas and specialized advice in general, ANCAR, in cooperation with the Regional Rural Consultation Forum (CRCR) and the CLCOPs, wil l request proposals f rom approved service providers in order to identi fy and negotiate with the best service providers (in terms o f capacities and costs). The producer organizatiodservice provider/ANCAR contract wi l l spell out, among other matters, the methods o f payment for the monitoring and oversight o f service delivery.

Funding o f rural and agricultural advisory service Operational costs (salaries, water, electricity, off ice equipment, fuel, etc.) o f ANCAR will be supported by the national budget, o n the basis o f ANCAR strategic p lan and conditioned on the deployment o f ANCAR advisors in to rural counci l areas.

The cost o f technical programs wil l be supported by:(i) the national budget through the FNDASP, (ii) a degressive contribution f rom IDA/FIDA; and (iii) clients’ contribution for at least 10 percent.

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Component C: Support to producer organizations (US$8.3 million, o f which IDA US$5.0 million)

Achievements o f PSAOPl In PSAOPl, the main achievements o f the producer organization component are the following:

0 Producer Organizations’ Local Consultation Forums (CLCOPs) and Regional Rural Consultation Forums (CRCRs) 0 152 CLCOPs were established, bringing together 8,582 local farmer

organizations, i.e. 63 percent o f inventoried farmer organizations; 0 11 CRCRs were established, bringing together 110 producer organizations o f a

regional scale; 0 1,284 subprojects were financed and implemented to build the capacities o f local

organizations; 0 The CLCOPs and CRCRs moved beyond the stage o f grant appropriation

windows to position themselves at the interface between the local agricultural trade movement and the full range o f rural stakeholders; For trade leaders at the national level, they represent tools o f information, communication, and consultation with local producers.

0

0 Contribution to policy and program development 0 National trade organizations and the National Council for Rural Cooperation

(CNCR) in particular made an active and effective contribution to development o f the Agricultural Framework Act (LOASP); They help steer and orient agricultural research and advisory actions through their participation on the FNRAA and ANCAR executive boards; By relying on the CRCR and CLCOP network to consult producers, CNCR ensured that farmer concerns were taken into account in developing the LOASP; Through CNCR in particular, producers now enjoy legitimate and credible trade representation, recognized by the government and by donors.

0

0

0

Objectives and indicators The objective of this component i s to improve the capacity o f producer organizations at the national, regional, and local levels to protect the interests o f family farms and facilitate their access to technical and economic services that wil l enable them to increase their output, their food security, and their income on a sustainable basis,

PSAOP support to producer organizations wil l accordingly be organized around three themes aimed at expanding:

(i) the capacity o f producer organizations to address on an equitable basis the needs o f different categories o f rural inhabitants, including underprivileged populations, women, and youth;

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(ii)

(iii)

producer participation in the development and implementation o f agricultural and rural development policies and programs; technical and economic mastery o f agricultural activities by producers and their organizations, with a view to resolving the main constraints with which they are faced (input supply, access to financing, product marketing, etc.).

For this component, the results indicators wil l focus on: 0

0

0

the establishment o f CLCOPs in al l 320 rural communities o f the country; the establishment o f a network o f seed producers for two crops, covering at least five regions; a supply o f seasonal credit for at least one crop by decentralized financial systems, covering at least two regions.

Target groups and areas Producers and their trade organizations are the main target groups o f this component, both as beneficiaries and as full-blown actors in implementing the proposed actions. At the local level, family farms are the target group toward which al l the component’s interventions should converge. Local and regional trade organizations wil l take on full responsibility for implementing the component through the CLCOPs and CRCRs.

At the national level, all existing agricultural trade movements (federations o f producer organizations, national platforms, etc.) wil l be able to receive project support and participate in implementing the interventions. Lastly, the decentralized financial systems linked to agricultural trade organizations will also participate in implementing certain parts o f the component.

The interventions o f the producer organization component wi l l cover the entire country, i.e. the 320 rural communities and 11 administrative regions. Certain specific interventions or pilot projects wi l l be limited to a few regions or target a particular producing zone. To maintain consistency and avoid scattering or thinly spreading the available financing, pilot actions wil l be focused as a matter o f priority on the Groundnut Basin and the groundnut industry.

Strategy (approach) The component’s strategy wil l be based on: (i) accountability o f producers, their organizations, and particularly their leaders in defining and implementing the activities; and (ii) on a strong partnership between the POs and Local governments (collectivitks locales), rural councils in particular, through the CLCOPs and the PNDLPLDP. This strategy wil l build on the achievements o f the f i rs t phase by relying f i rst and foremost on the CLCOPs at the local level and the CRCRs at the regional level. In particular, efforts wi l l be made to continue the dynamic o f information and ongoing mobilization o f producer organizations, while making a systematic attempt to elicit and take into account the opinions o f smallholder producers and consult them on agricultural and rural policy issues. The CLCOP mechanism wil l accordingly be expanded to al l 320 rural communities.

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The implementation o f the component in PSAOP1 was based o n a privileged partnership with the National Council for Rural Cooperation (CNCR), the only representative and dynamic organization at the time when the program was developed. In agreement with the Ministry o f Agriculture and CNCR, the second phase o f the PSAOP wil l reflect the changes in the institutional landscape o f producer organizations, with the emergence o f new producer federations and producer organization platforms that are no t members o f CNCR. Accordingly, the orientation and monitoring o f this component’s interventions will fa l l under the responsibility o f a specific orientation committee responsible for overseeing the overall implementation o f the component. This committee will comprise the principal recognized umbrella organizations together with representatives o f the Ministries concerned (who wil l be in the minority), o f the Rura l Councils (Association Nationale des Communautks Rurales), representatives o f IFAD projects and, as observer, ANCAR. Operational mechanisms and composition o f the orientation committee wil l be prCcised in the project implementation manual.

During PSAOP1, the emphasis in the area o f capacity building has thus far been placed primarily o n the role o f representation that producer organizations are called upon to fill. The second phase will place more emphasis o n the other essential function o f producer organizations, which i s to facilitate producers’ access to technical and economic services adapted to their needs.

Producer organizations wil l implement their activities in close partnership with other institutions, particularly local governments for improvements to the consistency o f support to the agricultural sector, ANCAR for advice and support for producers, IFAD- financed projects at local level, the Agricultural and Rura l Training Bureau o f the Ministry o f Agriculture for capacity building issues; research institutions, especially I S M and ITA; and the decentralized financial system for financing their activities. Several studies are foreseen that wi l l help define and guide these partnerships. The component procedure manual (manuel de gestion de l a composante) will define in detail the partnership arrangements.

Component description The component comprises three subcomponents: 1) social representation and inclusiveness, 2) participation in pol icy formulation, and 3) technical and economic capacity.

Subcomponent C1: Strengthening the representativeness and social inclusiveness of organizations at the local and regional levels (US$2.7 million, of which IDA US$1.7 million)

Producer organizations are the ma in channel o f access to the program’s resources. As a result, their inclusiveness, their social responsibility, and their effectiveness are key factors in ensuring that the poorest and most marginalized rura l populations really benefit from the program in a direct fashion. This subcomponent wil l accordingly help mobil ize local producers and strengthen their representative organizations at the local and regional levels. More specifically, i t seeks to consolidate and expand the dynamic introduced

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organizations and other agricultural and rural development actors. This subcomponent wi l l comprise three groups o f activities.

Activity C2.1 - Training for leaders of trade organizations at the local, regional, and national levels (US$1.1 million): In collaboration with the Swiss and French foreign aid agencies, the project wil l contribute to the development and implementation o f a training program for leaders o f producer organizations. The training content should allow the participants to acquire a better understanding o f the international context, the national stakes o f agricultural and rural development, obstacles to improved industry performance, and the socioeconomic environment o f farm families. The proposed training activities should also enable them to develop their capacity to formulate proposals and negotiate with other agricultural and rural development actors. In order to achieve a significant impact and contribute to a democratic renewal o f the agricultural trade movement, some 340 farmers’ leaders (of which at least 30 percent women) will participate in this training program, including 300 at the regional and local levels and 40 at the national level.

Activity C2.2 - Information for producers and their organizations (US$600,000): Under this part o f the subcomponent, the project wi l l make available to trade organizations financial resources that wil l enable them to develop communication programs targeting the entire agricultural and rural population so as to inform this population about the PSAOP in particular, including i t s activities and how to gain access to available resources and services. This effort will involve the following specific activities: (i) develop and disseminate communication tools (posters, teaching manuals, radio and audiovisual products, traditional theater, etc.); (ii) consolidate and expand the network o f resource centers and exchanges for producer organizations (“Penc”); (iii) organize media events; (iv) organize regular consultations between umbrella organizations and local producers, including those who are not affiliated with any particular producer organization.

Activity C2.3 - Strengthening agricultural trade representation at the national level (US$1.1 million): This part o f the subcomponent wil l target umbrella organizations o f producers at the national level to help them: (i) improve their representativeness through tighter connections with local producer organizations; (ii) develop a strategic vision o f their sector o f intervention; (iii) develop arguments for negotiating with other national actors, both public and private, involved in agriculture. To that end, a demand-driven support fund wil l be made available to producer organization federations and platforms to receive logistical support, conduct studies (institutional assessments, sectoral analyses, forward-looking studies, etc.), or carry out capacity building programs for national leaders. Support wil l also be provided in the form o f expertise and studies to help the agricultural trade take positions on specific themes at the national level (land issues, for example) or the subregional level (agricultural policies o f WAEMU and ECOWAS). In addition, efforts wi l l be made to support the participation o f Senegalese producer organizations in the regional (ROPPA) and international (IFAP) dynamics o f consultation among agricultural trade organizations.

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during the f i rs t phase with the establishment o f CRCRs at the regional level and CLCOPs in rural communities.

Activity C1.l - Social mobilization and strengthening of local organizations (US$1.9 million): This part o f the subcomponent wil l support expansion o f the CLCOP mechanism to the 320 rural communities. As was the case during the first phase, the new CLCOPs to be established (166 CLCOPs) wi l l enable local producer organizations to develop and implement capacity building microprojects. Through the CLCOPs, the leaders o f local producer organizations wi l l be sensitized and trained in issues o f organizational governance, women’s participation in decision-making and in activities, participatory assessments o f poverty and vulnerability, and participatory self-evaluation.

For their part, the first-generation CLCOPs wil l receive logistical and technical support to strengthen and develop their role as the interface between producers and other rural stakeholders. The same wil l ho ld true o f the CRCRs present in the 11 regions, in order to help them consolidate their role as the interface between the agricultural trade and other regional development actors (decentralized authorities, deconcentrated government services, other projects and programs, etc.).

The assistance provided under C1.l should permit an expansion o f the social base o f producer organizations to encompass the most underprivileged areas, households, and individuals. Special attention wi l l be given to women’s participation in the leadership o f local organizations, CLCOPs, and CRCRs. Leadership and consultation among producer organizations should serve to avoid a concentration o f resources in the most active organizations, while encouraging less active organizations to participate in the CLCOPs. I t wi l l be necessary in particular to ensure that information o n the activities o f the CLCOPs and CRCRs, as we l l as the activities o f the PSAOP in general, i s available and disseminated to producer organizations and rural populations.

Activity C1.2 - Mechanism o f support for producer organizations (US$SOO,OOO): The success o f the producer organization component during the first phase was largely due to the quality o f the implementing agency serving the producer organizations, namely the Senegalese Association for the Advancement o f Local Development (ASPRODEB). Accordingly, this part o f the subcomponent wil l enable ASPRODEB to continue to lead and execute the component, whi le strengthening i t s o w n capacities.

Subcomponent C2: Participation o f producer organizations in the agricultural and rura l policy dialogue (US$2.8 million, of which IDA US$1.7 million)

This subcomponent has the specific objective o f strengthening the strategic capacities o f the leaders o f trade organizations so that they can effectively influence the development of agricultural and rural policies and actively participate in the implementation o f development programs. T o reach this objective, the subcomponent wil l support three types of activities: (i) training for leaders o f trade organizations at the national, regional, and local levels; (ii) f low o f information and communication within the agricultural trade movement; and (iii) consultation among producer organizations and between such

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Subcomponent C3: Strengthening technical and economic capacity o f smallholder producers and their organizations (US$2.6 million, o f which IDA US$1.5 million)

This subcomponent has the specific objective o f helping producer organizations resolve the technical and economic constraints facing family farms in terms o f production, processing, and bringing agricultural products to market. Efforts wil l f i rs t o f a l l be made to test formulas for setting services in place at the init iative o f the producer organizations themselves with the rationale o f meeting demand and developing producer accountability.

The activities carried out under this subcomponent wil l main ly concern capitalization o f experience, completion o f studies, training o f producers, recourse to national and international technical expertise, and implementation o f p i lo t actions. A number o f the proposed interventions wil l focus on three or four targeted crops including, among others, the groundnut industry and mi l le t production. The activities wil l be carried out in close collaboration with ANCAR, agricultural research, and the IFAD-financed projects, which will, upon request, provide producer organizations with specialized advice, additional resources needed to support producers, and f ield monitoring o f activities (the corresponding resources are listed in the budget for the ANCAR component). Pi lot operations will be replicated and expanded within the framework o f other programs, particularly the Agricultural Markets and Agribusiness Development Program (PDMAS) and the S T A B E X groundnut industry support fund.

The subcomponent will comprise f ive groups o f activities.

Activity C3.1 Establishment o f seed producer networks (US$l,O million): The availability o f quality seeds i s one o f the major constraints to production, especially in the groundnut sector. Accordingly, this part o f the subcomponent will replicate and expand the successful experience o f the f i rst phase in establishing seed producer networks with the support o f ANCAR, researchers, and DISEM. Trials wi l l also be carried out in other sectors, particularly grains. In v iew o f the interest in this subject expressed by producers during the first phase, this wil l be the most important part o f the subcomponent.

Activity C3.2 Supply mechanisms for agricultural inputs and equipment (US$600,000): The ma in objective o f this part o f the subcomponent i s to provide producer organizations with the means to analyze and dispense technical advice on the various experiments n o w under way in several regions (on rice, tomato, cotton, etc.).

Activity C3.3 Diversification and development o f agricultural products (US$350,000): This part o f the subcomponent wil l enable producer organizations to carry out logistical and commercial trials o n bringing to market certain products that are not considered P D M A S priorities. However, through i t s sector support fund, P D M A S could support the expansion o f successful p i lo t actions.

Activity C3.4 Financial instruments to support production and bringing products to market (US$350,000): This part o f the subcomponent wil l be carried out in close

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collaboration w i th the Rural Finance Support Service established under PROMEWFAD. Init ially, producer organizations wil l perform an assessment specific to the decentralized financial networks to which they are linked. Subsequently, studies wil l be carried out to develop new financial products and instruments to support the production and marketing of products (including agricultural insurance). In addition, trials wil l be conducted with the decentralized finance systems and the commercial banking sector with a v iew to covering the financing requirements o f production and marketing. T o accompany these activities, a feasibility study and a pi lot wheather-based index insurance scheme wil l be funded by the Sustainable Development Trust Fund (ESSD TF)

Activity C3.5 Management advice for producer organizations and family farms (US$330,000): In cooperation with ANCAR, this part o f the subcomponent wi l l strengthen the existing mechanisms for providing management advice to producer organizations and will test formulas for providing individual advice to fami ly farms.

Implementation In v iew o f i t s satisfactory performance during the f i rst phase and i t s recognition by the agricultural trade movement as an effective technical instrument in service o f producers, ASPRODEB will be confirmed implementing agency for this component.

As noted above, the support o f the producer organization component wi l l be open to a l l umbrella organizations o f producers. A component steering committee wi l l accordingly be created, bringing together national producer organizations, to define the component’s orientations and interventions.

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Component D: Sectoral coordination and M&E (US$10.5 mil l ion, o f which IDA US$4.2 mil l ion) - Achievements o f PSAOP1. The f i rst phase helped set in place the new organizational structure o f the Ministry o f Agriculture. The principal anticipated benefits o f this new structure were a consolidation o f regional services under the Regional Directorates for Rural Development (DRDRs), with heightened responsibilities and greater resources, and a strengthening o f the steering and sectoral coordination functions at the central and regional levels. This effort falls within the general process o f deconcentration and i t s goal was to provide the Ministry with the capacity to p lay an effective role in the new economic context.

The noteworthy achievements o f the first phase include the establishment o f the rural development DRDWSDDRs and the veterinary service IRSV/IDSVs at the regional and departmental levels, as we l l as the creation o f entities at the central and regional levels to take charge o f agricultural statistics and sector analyses and projections (DAPS and CAPSE), with a leading role in steering the preparation o f policies and development programs and projects and monitoring their implementation and their effects o n the sector. This institutional capacity building has improved the effectiveness o f the two ministries in carrying out the public service mandates assigned to them. With respect to agriculture, the efforts to strengthen the logistical resources o f the DRDRs and SDDRs has allowed: (i) improving agricultural statistics; (ii) organizing an adequate response to the locust invasion in June 2004; (iii) supporting the implementation o f the national “special programs” (for maize and cassava in particular); and (iv) strengthening synergy among the different technical competences and stakeholders in the sector. With respect to the livestock subsector, the first phase led to improved communication and greater mobi l i ty o n the part o f livestock agents, resulting in broader vaccination coverage among other achievements. Thus, Senegal was declared to be free o f rinderpest in 2005 and could achieve the same status for contagious bovine peripneumonia, if the efforts were to continue; this i s due in particular t o the introduction o f vaccinations against small ruminant plague, specifically through the involvement o f private veterinarians in the livestock vaccination campaigns as a result o f implementation o f the health mandate since 2000.

The PSAOP wil l strengthen these results by supporting the two ministries in their role o f strategic po l icy guidance and po l icy coordination, at the central and decentralized levels. Specifically, the project will:

0 strengthen the capacity o f the central directorates in the areas o f technical and financial planning, as w e l l as in monitoring and evaluating the performance o f the sectoral programs.

0 Continue to support deconcentration at the regional level, by giving DRDRs and IRSVs greater responsibilities and resources, as we l l as greater autonomy for showing init iative in formulating regional strategies, as we l l as for harmonizing and coordinating programs concerning vegetable, animal and forestry sub-sectors;

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0 continue redeployment o f staff and strengthening i t s capacity, whi le providing adequate conditions o f stability and motivation, and providing necessary workplace conditions;

Principal objectives and indicators (cf. Results Framework) The component’s development objective for the second phase i s to establish an effective institutional framework o f programming, mobilization, and rational use o f resources for a sustainable improvement in the productivity o f the agriculture and livestock subsectors.

The project will support continued capacity building for the Ministries o f Agriculture and Livestock in order to improve sectoral steering and coordination within the framework o f LOASP implementation. The project wil l also assist these ministries in strengthening the deconcentration o f services that was initiated during the f i rst phase o f the PSAOP, by providing more responsibility, decision-making autonomy, and resources at the regional level. This strengthening o f deconcentration wil l go hand in hand with efforts to more fully harmonize relations among services by clarifying the roles and responsibilities and by setting up systems and networks to encourage consultation and the exchange o f information and facilitate decentralization o f the decision-making and M&E processes.

Besides the implementation o f MTEF and operational plans, results indicators for this component comprise:

Ministry of Agriculture; the Ministry has defined and implemented a coherent set o f procedures and guidelines defining the roles o f each service at central and decentralized levels, notably for seed control and certification, agricultural statistics, and plant protection. A sectoral M&E system i s established and working satisfactorily at the central and decentralized levels.

0 National rural and agricultural training strategy i s implemented.

Ministry of Livestock 0

0

0

0

0

Senegal i s declared immune f rom contagious bovine peripneumonia. Senegal continues tobe immune f rom Bovine Rinderpest At least 50 percent vaccination coverage against Newcastle disease o f chicken and Peste des petits ruminants. Inspection o f animal carcasses (sheep, goat, cattle) in a l l 34 departmental capitals i s effected routinely (100 percent o f carcasses inspected by the end o f the project). The livestock information system (SIGEL -Systeme d’Information et Gestion de 1’Elevage) i s strengthened and operational at decentralized level.

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Description of the component

The activities planned for this component are grouped in three sub-components.

Subcomponent D1: Support to sectoral coordination - Ministry of Agriculture (US$5.5 million, of which IDA US$1.25 million)

Activity D1.l - Sectoral coordination and implementation of an SMTEF. The expected outcome i s that an interim Sectoral Medium-Term Expenditure Framework (SMTEF) be set in place for fiscal year 2007 and that a complete SMTEF wil l be implemented starting in 2008, reflecting regional planning o f programs and projects. The following steps wil l be considered: (i) break down o f the LOASP into strategic goals with quantified and regionalized objectives for the period covered by the SMTEF; (ii) identify and classify programs and projects already in progress or planned for this period, based on the strategic goals; (iii) prepare the strategy paper with operational plans (PNDA); (iv) validate the action plans and guidelines on resources/objectives in line with the SMTEF. The detailed work plan and budget corresponding to these tasks were worked out during the identification mission in February 2005, then updated during the appraisal mission to reflect the advances observed at that time. The project wi l l support technical assistance for data collection, development o f the methodology and procedures for preparing and updating the SMTEF, staff training for the Directorate o f Planning, Analysis, and Statistics (DAPS) and key units o f the central directorates and DRDRs in the use o f these tools, and the operations (mission costs, workshops, supplies, and equipment) o f bodies consulting on the PNDA, i t s operational plans, and the SMTEF at the national and regional levels. DAPS and DAGE will hold joint responsibility for implementing this activity.

Activity D1.2 - Implementation of an integrated information system on the sector. The expected outcome i s the existence at the Ministry - and especially at DAPS and the regional directorates - o f an effective sectoral information system capable o f providing information in real time on the performance o f Senegalese agriculture and contributing to the decision-making process regarding the appropriation o f public resources in combination with the SMTEF. The system should include at least three parts: (i) the agricultural statistics system; (ii) monitoring o f the technical and economic performance o f programs as defined in the SMTEF operational plans; (iii) updating o f surveys and studies on the main parameters for economic evaluation o f the sector and modeling (factor price, taxes, food balance, trade balance, jobs, income, rural poverty, etc.). The project will support technical assistance for developing (or updating, as appropriate) the methods, tools, and procedures; staff training in these areas for DAPS and regional entities; the equipment and supplies needed to consolidate and improve the databases; technical assistance, equipment, and supplies needed to improve internal communication within the Ministry (email) and public information (website, documentation and periodic publications on sector performance); and the salary and operation costs o f an Information Technology specialist over the f i rst two years o f the project. Implementation o f this activity i s conditional on the availability o f the annual budget from the government’s own

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resources for the annual agricultural surveys. DAPS i s responsible for implementing this activity.

Activity D1.3 - Strengthening the capacity of the sectoral ministries in terms of human capacity and resources. The expected outcomes are: (i) the staff o f the two sectoral ministries i s adequate and qualified; (ii) the working environment i s appealing and functional; and (iii) human resources management and development tools are established and used effectively. Towards these purposes, the project wil l support the Bureau de la Formation Professionnelle Agricole (BFPA) for the implementation o f the rural and agricultural training strategy. Specifically, the project wi l l support the establishment o f four regional steering committees and eleven regional information resource centers, as well as the creation o f a network o f national competences on the theme o f rural and agricultural training. The project wi l l also assist the Ministry o f Agriculture in finalizing the construction documents for i t s Headquarters and rehabilitation o f DRDWSDDR and IRSV/IDSV facilities, whose financing wil l be provided by the national budget. In addition, the project will finance the technical assistance needed to assess and improve the current human resources management s ys tem.

Subcomponent D2: Support to sectoral coordination - Ministry o f Livestock (US$2.0 million, of which IDA US$1.25 million)

Activity D2.1 - Strengthening animal health protections and control of animal products. During the second phase, efforts to build the capacities o f Ministry o f Livestock services wil l focus in particular on two major results: (i) increased effectiveness in veterinary control o f animal products, and (ii) improved epidemiological surveillance and vaccination coverage. The approach with respect to vaccination coverage falls within the poverty reduction strategy for rural areas, which i s closely tied to the health status o f small livestock, which represents an important source o f income and a form o f savings o f rural populations.

In this framework, PSAOP wil l be the preferential vehicle to support the implementation o f the program o f measures against the Avian Flu, as this f i t s squarely within the objectives o f the project.

The project wil l assist the Ministry o f livestock in improving the capacities o f veterinary services in the field, especially in border areas sensitive for epidemiological surveillance as well as in regions at high r i s k in terms o f the safety o f food products, along with rehabilitatiodconstruction and outfitting o f quarantine facilities, veterinary posts, and laboratories, as well as the upgrading o f logistical and communication resources. In addition, the project wi l l finance the development - and subsequently the implementation for two years - o f procedures for preparing, conducting, and evaluating vaccination campaigns and the monitoring o f animal products. The project will also assist the Ministry in implementing the training plan for both internal staff and private sector employees involved in the action plans for these two programs. Finally, the project will support the country’s participation in efforts to coordinate activities and share experience

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in these areas at the regional and international levels in order to bring and keep the national animal health system in line with the standards o f World Organization for Animal Health (OIE). Successful implementation o f this activity wi l l require that the health mandate and the operations o f Ministry o f Livestock services are included in the national budget and adequately financed, and that IRSV facilities are gradually rehabilitated.

Activity D2.2 - Improvements to the livestock sector information and monitoring system (SIGEL). The expected outcome o f this activity i s the development o f a dynamic data base for objective performance evaluation and regular updating o f the main technical and economic parameters o f the livestock sector. In particular, the project will assist the Ministry (CAPSE and Ministry departments involved in the production o f administrative data) in establishing a data base (equipment, supplies, training and consultants, operations) directly linked to monitoring the performance o f the two main results technical programs (veterinary control and monitoring o f animal products). However, the project will also help the Ministry assess existing information sources and identify additional information needs, as well as define the entire system for producing and updating livestock statistics in general. As such, the project wi l l finance in particular the development o f tools and the training o f relevant personnel for conducting the national livestock census and test surveys, as well as those needed for producing current statistics. Success o f this sub-component hinges on the inclusion o f livestock census and survey operations in the Ministry’s priorities, which should be clearly defined in the PNDE and in i t s operational plans, and be in l ine with the resources identified in the SMTEF.

Activity D2.3 - Sectoral coordination and implementation of an SMTEF. As in the case o f the agriculture subsector, i t i s anticipated that, by the end o f the assistance provided to the Ministry o f Livestock under the project, an SMTEF will be set in place and then used as an instrument for programming public resources and evaluating the performance o f sector programs and projects, starting in fiscal year 2008. To that end, the project wi l l finance the technical support and training needed to consolidate the sectoral strategy through the PNDE and develop the accompanying operational plans. The main steps and budget for the definition o f the SMTEF were determined during the project identification mission in February 2005 and updated during the appraisal mission.

Subcomponent D3: Technical and fiduciary coordination and project monitoring and evaluation (US$3.0 million, o f which IDA U S $1.7 million)

The institutional set-up o f the PSAOP, based on the implementation o f project activities by implementing agencies supported by a fiduciary unit, has functioned in satisfactory fashion overall. This arrangement should be continued with improvements to the fiduciary control mechanisms. Coordination and overall monitoring by government entities did not meet expectations during the f i rst phase, in terms o f both overall program coordination and issues related to project monitoring and evaluation. The mechanism wil l be strengthened by reviving the program’s Steering Committee and by adding the functions o f coordination, monitoring and evaluation o f the project as a whole to the function o f fiduciary control already in place during PSAOP1.

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Implementation (actors and institutional arrangements)

The steering committee The overall project guidance wil l be the responsibility o f the National PSAOP Steering Committee, composed of: (i) representatives o f ministries involved (Agriculture, Livestock, Economy and Finance, Industry, Scientific Research, Fisheries, Environment, Social Development, Decentralization); (ii) national federations o f producers’ organizations (for at least a third o f the steering committee members) and (iii) o f implementing agencies ( I S M , ITA, FNRAA, ASPRODEB, ANCAR). This Steering Committee wil l be chaired by the Ministry o f Agriculture. Created during the f i rst phase, i t wil l be renewed and wil l meet at least once every six months. Each year, it wil l examine the work program and the project progress reports.

The Steering Committee wi l l define every year the strategic and budgetary orientations, in accordance w i th the sectoral objectives. These orientations wi l l be translated into the annual work plans and budgets o f each component. The Steering Committee wi l l meet at least twice a year in order to: (i) assess the closing year work program and define the orientation o f the fol lowing year; and (ii) to approve the annual work p lan and budget. The Project coordination unit wil l organize regular meetings with the components in order to prepare the Steering Committee’s meetings and fo l low up o n i t s recommendations. The project implementation manual wil l define the mandate, composition and procedures o f the Steering committee and the coordination.

Day-to-day coordination o f the project wil l be handled by the Technical and Fiduciary Coordination Unit (TFCU) housed at the Ministry in charge o f agriculture. The staff o f TFCU wil l include a coordinator, an M&E specialist, a procurement officer, a financial management specialist, an accountant, an assistant and support personnel (drivers, security gards, etc.). The coordinator i s responsible for the overall management o f the TFCU and will be the responsible party for launching periodic technical audits o f the implementing agencies, particularly concerning the management services contracts o f ASPRODEB and FNRAA. The financial management specialist wi l l report to DDI for the management o f the designated account. The TFCU wil l assure two principal groups o f hnctions:

0 Technical coordination, monitoring, and evaluation, concerning the f l ow o f information among components and with the Bank, as we l l as monitoring o f overall project implementation;

0 Fiduciary coordination, Concerning the oversight and quality control o f procurement and financial management.

The subcomponent wi l l finance TFCU operating costs: staff salaries and compensation, facilities and equipment, technical assistance, training, etc.

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Annex 5: Project Costs SENEGAL: Agricultural Services & Producer Organizations Project 2

Components

A. Agricultural Research B. Agricultural

Annex 5: Project Costs SENEGAL: Agricultural Services & Producer Organizations Project 2

?h Of 1 F i $ g 1 Fi::ng I Gi?FT 1 1 Indicative

(US$M) Costs Total

10 21%

1 7 C C 2 QO/. A Q 3 7 0 X 1 3 A n 2 :

Table 5A: Baseline and Total Costs b y Components Local Foreign Total

Project Cost B y Component and/or Activity us u s u s $million $million $million

A. Agricultural Research 3.85 5.52 9.37 B. Agricultural Advisory Services 13.23 3.73 16.96 C. Producers’ Organizations 6.09 1.81 7.9 D. Sectoral Coordination 6.98 2.84 9.82 PPF refinancing 0.6 0.6

C. Producers’ Organizations D. Sectoral Coordination E. PPF refinancing Total Project Cost

Total Baseline Cost Physical Contingencies

8.3

10.55

0.6 47

30.15 14.5 44.65 0.65 0.29 0.94

Price Contingencies 0.95 0.46 1.41 Total Project Costs’ 3 1.75 15.25 47.00

‘Identifiable taxes and duties are US$4,500,000 and the total project cost, including taxes, i s US$47 million. Therefore, taxes amount to 9 percent o f total project cost.

Table 5B Project Cost Summary

1 / . J J I AdvisorvServices I

22% 11 4.1 I 39% 11 4.8 I ‘“m,“, 100Yn

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Annex 6: Implementation Arrangements

SENEGAL: Agricultural Services & Producer organizations Project 2

1. Partnership arrangements (if applicable) The project will be cofinanced by the International Fund for Agricultural Development (IFAD). IFAD has pledged to contribute to PSAOP2 with a loan o f US$6.0 million. IFAD has been closely associated to the definition o f the project content, from preparation to negotiations. I t i s expected that IFAD’s contribution to the PSAOP wil l become effective by ‘the end o f 2006 (presentation to IFAD Board i s scheduled for September 22,2006).

The Swiss Cooperation and the French Cooperation wil l continue to support some activities linked to the PSAOP as they did during phase 1. In phase 2, the Swiss Cooperation wil l continue to support Agricultural and Rural Training Activities. The French Cooperation will support the professional evolution o f POs through i t s project Promotion o f Competitive and Sustainable Agriculture (PACD).

2. Institutional and implementation arrangements PSAOP2 wil l maintain the choice, made under PSAOPl, o f having several independent implementation agencies (one per component) supported by a Fiduciary Coordination Unit, rather than creating a Project Implementation Unit responsible for the implementation o f the whole program. There were three main reasons for this choice: (i) each implementing agency i s an independent structure, with i t s own staff, reporting structure, and procedures, hence the need for some coordination; (ii) the implementation exercise was supposed to create or develop institutional capacity; and (iii) in Senegal, fiduciary and financial management responsibility (management o f the Special account) are the responsibility o f the Dkpartement de la Dette et de l’lnvestissment (DDI), a Directorate o f the Ministry o f Economic Affairs and Finance, to which the fiduciary unit reported.

The choice o f PSAOPl proved correct: each component has substantially improved i t s implementation and management capacity during the f i rs t phase, as shown by the periodic audits and the absence o f major procurement or implementation problems.

For these reasons, PSAOP2 wil l replicate the arrangements adopted in the f i rst phase, and the implementation mechanism wil l comprise:

(a) a steering committee (b) a technical and fiduciary coordination unit, (c) one implementing agency per component or subcomponent.

The only change with respect to phase 1 i s the addition to a technical coordination and M&E role to the former Fiduciary Coordination Unit. This change i s justified by the need to improve the overall project monitoring and data management, including progress reports, somehow not completely satisfactory in PSAOPl and liaising with the Bank.

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The steering committee will include representatives o f the implementing agencies, I t wil l meet tw ice a year to (i) approve the work program and budget consolidated by the coordination, and (ii) to assess project performance.

The Technical and Fiduciary Coordination Unit (TFCU) will: (a) moni tor the day-today implementation of the project; (b) suscitate and facilitate the exchange o f information and cooperation between components; (c) consolidate the component reports to prepare quarterly progress reports; (d) provide quality control and monitor the implementation o f procurement plans prepared by the different components; (e) manage the special account, in liaison with the De'partement de la Dette et de Z'Investissement (DDI) o f the Ministry of Finance; ( f ) supervise the implementation o f the Management Contracts with ASPRODEB and FNRAA; ( f ) support the components as needed; and (g) liaise regularly with the Wor ld Bank. The Coordination U n i t will be located at the Min is t ry of Agriculture. Implementing agencies and stakeholders will also create regional and local coordination and monitoring committees at the decentralized levels.

The components wil l be implemented as follows.

0 Component A, Agricultural Research, will be implemented by the FNRAA, I S R A and ITA, each for their specific aspects/subcomponent.

Component B, Agricultural Advisory Services, wil l be implemented by ANCAR. ANCAR i s a public/private company with the legal status o f Socie'te' d participation publique minoritaire.

0 Component C, Support to POs, will be implemented by ASPRODEB. ASPRODEB i s an NGO and represents 13 national federation o f producers or producer-related federations.

Component D, Sectoral Coordination, wil l be implemented by the Ministry of in charge o f Agriculture, and the Ministry in charge of Livestock, respectively, each one for their specific activities.

Each component wi l l have i t s o w n financial and accounting system in place, certified by an independent auditor (effectiveness condition). Similarly, to PSAOP 1 , each implementing agency wi l l manage i t s o w n procurement activities, under the overall guidance and quality control o f the Procurement Specialist o f the TFCU. Each component wil l prepare and execute i t s o w n procurement plan, subject to clearance by the TFCU, as defined in the Project Implementation Manual (PIM).

Procedures concerning coordination, implementation, management, monitoring and evaluation, procurement, and administration wil l be detailed in the Project Implementation Manual to be prepared before effectiveness.

0

0

3. Flow of funds

The chart in attachment 4 o f Annex 4 presents the project's f low o f funds. There wil l be only one special account for the project, and the accounts o f the implementing agencies.

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The following diagram presents the organization o f PSAOP2.

- b Coordination Unit National Steerina Committee

MAHRSA support to POS - -

- DRDR ISRA - IRSV (Regional

I (ANCAR) I

- -DWANCAR, - -CRCRs -Regional -PO FEDERATIONS

-- I I I I I I

I I I I

I

I

-

I /

Local coordination committees*

(Rural Council Area)

I 1 -

-C R

I I I I I I I I I I I I I I I I

- - - -CLCOPs

(Stations) - Local partners -POs

I I I I I I I I I I I I I

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Annex 7: Financial Management and Disbursement Arrangements SENEGAL: Agricultural Services & Producer organizations Project 2

1. INTRODUCTION As part o f the preparation o f the project, a financial management assessment was carried out to determine whether the financial management implementing entity (Technical and Fiduciary Coordination Unit), in charge o f the implementation o f the project has acceptable financial management arrangements. This report presents the conclusions o f the financial management assessment.

2. EXECUTIVE SUMMARY AND CONCLUSION The Country Financial Management Assessment (CFAA) o f Senegal was conducted in 2003. The overall risk rating o f the public financial management system was high. The recent H IPC Country Assessment and Act ion Plan by the Bank and the IMF in November 2004 showed important improvements in the areas o f publ ic expenditure tracking- notably in the priori ty areas defined in the PRSP, budget preparation, and execution. However, significant progress i s s t i l l needed in internal and external controls and state- owned enterprises. In addition, stagnation in agricultural productivity (largely dependent o n rainfed crops exposed to numerous risks) and, until recently, inadequate response f rom agricultural services to address this issue are the ma in causes o f poverty in the rural population.

The second phase o f the PSAOP will leverage o n the financial management achievements of the first phase. The Bank, the IFAD, and the Government wil l co-finance the project. A financial management assessment was carried out to determine whether the implementing entity (Technical and Fiduciary Coordination Unit), in charge of the implementation o f the project has acceptable financial management arrangements.

The conclusion o f the assessment i s that financial management arrangements for the project need to be improved before project effectiveness satisfies the Bank’s minimum requirements under OP/BP10.02, and arrangements are then adequate to provide, with reasonable assurance, accurate and t imely information o n the status o f the project as required by IDA. The financial management arrangements wil l be strengthened with the implementation o f the action p lan in appendix 1. The description o f the financial management arrangements o f the project outlines: P a summary o f the project design; P an assessment o f the risks; P the description o f the institutional arrangements; > a detailed description o f the financial management arrangements, notably the staffing

arrangements, the accounting policies and procedures, the accounting software, the reporting and monitoring system, the internal and external audit, the f low o f hnds, and the counterpart fbnds;

> disbursement arrangements; P cofinancing o f the project by IFAD; P loan conditions and covenants;

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> supervision plan.

3. SUMMARY OF THE PROJECT DESIGN The objective of the second phase o f the Agricultural Services & Producer organizations (PSAOP2) i s to consolidate the achievements o f the f i rs t phase, in order to create an environment conducive to increased productivity o f selected pro-poor agricultural products (cereals, o i l seed, tree crops, and livestock). The Agricultural Services & Producer Organizations will be implemented through four (4) operational components:

(i) (ii) Agricultural advisory services; (iii) Support to producer organizations; (iv) Support to sectoral coordination.

Support to the Agricultural Research System;

4. ASSESSEMENT OF THE R I S K S

4.1 AT THE COUNTRYLEVEL AND USE OF COUNTRYSYSTEM The Country Financial Accountability Assessment (CFAA) o f Senegal was conducted in 2003. The table in appendix 4 shows the Financial Management Risk Assessment at the country level. The overall risk rating o f the public financial management system was high. Since that exercise, the Government has created an executive secretariat under the Ministry o f Economy and Finance to monitor the implementation o f the CFAA action plan. The recent H P C Country Assessment and Act ion Plan by the Bank and the IMF in November 2004 showed significant improvements in the areas o f publ ic expenditure tracking-notably in the priori ty areas defined in the PRSP, internal controls, and budget preparation. However, significant progress i s s t i l l needed in internal and external controls o f budget execution and state-owned enterprises.

The government has given priori ty to improvements in these areas as we l l as local governance finance reforms. A Mult i-Donor Trust Fund (MDTF) was set up to fo l low up o n implementation o f the reforms. An IDF Grant to strengthen the capacity o f the Cour des Comptes (State Audit Office) i s also under implementation. The use o f the country system, notably the Treasury Department and the Cow des Comptes, wil l be implemented progressively. In the meantime, implementation o f the project wi l l be coordinated by a Project Coordination Unit.

4.2 AT THE PROJECTLEYEL Because o f the high fiduciary risk at the country level, IDA has taken special measures to ensure adequate financial management o f i t s portfolio. Project management staff are appointed o n a competitive basis and Bank funding i s provided fol lowing special mechanisms to mitigate fiduciary risk. IDA projects are invariably audited by independent and competent auditing f i rms . However, the second phase o f the PSAOP project wil l leverage o n the achievements o f f i rst phase, and the accounting staff as we l l as the funding arrangements wi l l remain the same.

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5. INSTITUTIONNAL ARRANGEMENTS Technical and Fiduciaw Coordination Unit A Technical and Fiduciary Coordination Unit (TFCU) wi l l be set up at the national level to oversee and coordinate the day-to-day implementation o f proj ect activities. The TFCU will coordinate and consolidate annual work plans and budgets and oversee financial management, procurement and monitoring and evaluation o f activities, and feed the results into the national poverty monitoring system. The TFCU will comprise a Project Coordinator, a Monitoring and Evaluation Specialist, a Financial Management Specialist, a Procurement Specialist, an accountant, and an assistant. The financial management staff o f the TFCU was recruited during the first phase o f the project and has satisfactory experience and qualifications.

Executive agencies The T F C U wil l p lay a coordinating role, whi le the project wi l l be implemented by seven executive agencies: (i) FNRAA, (Research funding); (ii) I S R A (Research institute development); (iii) ITA (Research institute development); (iv) ANCAR (Extension); (v) ASPRODEB (Support to producer organizations); (vi) Ministry in charge o f Agriculture and (vii) Ministry in charge o f Livestock (Strengthening key ministerial functions).

During the f i rst phase, the financial management capacities o f the executive agencies were strengthened. The implementing agencies with satisfactory capacity, notably FNRAA and ASPRODEB, wil l manage their funds directly through a Contract Management Service. This contract wil l be signed between the TFCU and each o f the two implementing agencies identified. Funds will be withdrawn from the Designated Account fol lowing the disbursement and financial management provisions o f the contract management service.

The other implementing agencies, ANCAR, ISRA, Ministry in charge o f Agriculture, Ministry in charge o f Livestock, will have technical and procurement responsibilities and will send their funding requests to the TFCU.

The TFCU will (i) verify if the request i s in the budget approved by the Bank, (ii) make sure that the procurement, disbursement, and financial management process were conducted fol lowing the manual o f procedures, (iii) process the payment f rom the Designated Account, (iv) c la im reimbursement f rom the Bank. By September 30 o f each year, each executive agency will submit to i ts Board and respective ministries, with a copy to IDA, i t s annual work programs and budgets. The reporting format wil l adequately portray activities and unit costs, and provide the basis for proper management for each executing agency. The different budgetary proposals wi l l be consolidated by the TFCU and sent to the Bank for Non-Objection by the end o f November o f each year. All activities must be included in the in i t ia l budget as approved during negotiation o f the project. The chart in appendix 2 shows the organizational chart o f the TFCU and the table in appendix 3 shows the payment process for the executive agencies.

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6. FINANCIAL RIASAGEAIENT AKD DISBURSEAIENT ARRANGERIENTS

6.1 FI.VA.YCIAL MAVAGEMENT ARRA.YCEME.YTS

a) Staffing arrangements The Financial Management (FM) system o f the project wi l l be coordinated by a Financial Management Specialist, assisted by an Accountant. This FM staff was recruited during the first phase o f the project and has satisfactory experience and qualifications. The FM team at the national level wil l report periodically to the Dkpartement de la Dette et de l’lnvestissement (DDI) in Senegal. As far as financial management i s concerned, they wi l l be responsible for (i) collecting and controll ing invoices, (ii) keeping and maintaining the books, (iii) entering data into the accounting software, (iv) monitoring the special account which, according to the national institutional arrangements in Senegal, i s managed by DDI, (v) preparing the Interim Unaudited Financial Report (IFR) as we l l as the annual financial statements, and (vi) ensuring that annual audits are done.

The FM staff wil l also work closely with FM staff o f the executive agencies. Paragraph 6.3 gives an overview o f the FM arrangements o f each executive agency.

b) Accounting Policies and Procedures The T F C U will apply the existing private accounting system in Senegal (SYSCOA) issued in 1998. This system i s based o n the traditional Plan Comptable o f French- speaking countries, with several innovations mir ror ing some principles set in International Accounting Standards. Any major difference between the SYSCOA and the IFRS (International Financial Reporting Standards)/IAS (International Accounting Standards) and their effect, if significant, wi l l be adequately disclosed and explained in the notes o f the financial statements. The SYSCOA has a three-tiered structure (full reporting basis; simplified basis; cash basis). The TFCU will be eligible for the simplif ied system. An administrative and accounting procedures manual wil l be elaborated and adopted by the Project’s Steering Committee prior to the Credit’s effectiveness.

c) Accounting; Software The project will use the existing accounting software o f the PSAOPl established in the TFCU. The existing accounting software wil l be customized to fit the new components and activities o f the project. This system wil l be updated in such a w a y as to provide a l l of the above data as we l l as analytical accounting for purposes o f monitoring beneficiaries, and particularly R&D subprojects.

The Chart o f Accounts wi l l facilitate the preparation o f quarterly IFR and annual financial statements, including information o n the fol lowing:

Total project expenditures; Total financial contribution f rom each financier, including the counterpart funds o f the Government;

.

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. . Total expenditure on each project component/activity; and Analysis o f that total expenditure allocated to each executive agency by nature o f investment: capacity building, infrastructure by nature, etc.

d) Reporting: and Monitoring The TFCU will be responsible for overall reporting o n the project. The F M S wil l ensure that o n a quarterly basis, the Interim Unaudited Financial Reports (IFR) are produced and transmitted to the Bank no later than one month f rom the end o f the quarter. The first IFR shall be furnished to the Wor ld Bank n o later than one month f rom the end o f the f i rst calendar quarter after the Effective Date, and shall cover the period f rom the incurrence of the f i rs t expenditure under the project, through the end o f the f i rst calendar quarter. The format and contents o f the Interim Unaudited Financial Report (IFR) has been presented during the negotiations o f the project and wi l l be incorporated in the PIM. Each F M S o f the Executive Agencies wil l report o n a monthly basis to the use o f funds to the TFCU.

On an annual basis, the TFCU will also be required to produce, no later than June 30 o f the fol lowing fiscal year, audited annual financial statements (see paragraph o n audits).

e) Internal Audit In Senegal at the national level, the DLpartement de la Dette et de 1 ’Investissement (DDI) controls ex ante a l l expenditures and withdrawal applications before sending them to the Bank. This i s not a satisfactory internal audit arrangement and does not provide the assurance o f the continuing adequacy and conformity o f the TFCU with the project’s procedures. The Bank will, therefore, pay particular attention to this internal control during supervision missions and while reviewing annual audits reports o f the project.

f ) External Audit

- Project’s financial statements External auditors with qualifications and experience satisfactory to the Wor ld Bank will conduct an annual audit o f the project’s f inancial statements. This audit should be carried out in accordance with International Standards o n Auditing (ISA), and wi l l include such tests and controls as the auditor considers necessary under the circumstances.

In addition to the audit report, the auditors wil l be expected to prepare reports o n internal controls, and management letters giving observations and comments, as we l l as provide recommendations for improvement in accounting records, systems, controls, and compliance with financial covenants in the Financing Agreement o f the Bank. Terms of Reference wil l be prepared for the appointment o f an external auditor who meets the Bank’s criteria for selection. The selection process o f the auditors wil l be conducted by a selection committee acceptable to the Association.

- Annual audit reports o f the Executive Agencies: ANCAR, ASPRODEB, I S M FNRAA and ITA will be required. Progressively, the Bank wil l accept audit reports f rom the legal

Annual audits of the Executive Agencies

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auditors (commissaire aux comptes) if the selection process i s subject to the Bank's review. In the meantime, an auditor with experience and qualifications satisfactory to the Bank will be recruited.

Audit rep or t 1) Project's financial statements 2) Annual financial statements 3) Annual financial statements 4) Annual financial statements 5) Annual financial statements 6) Annual financial statements

The tables below summarizes the auditing requirements under this project:

Entity Due Date Auditor TFCU" June 30 An auditor will be selected ANCARI3 June 30 An auditor will be selected ASPRODEB" June 30 An auditor will be selected ISFL~'~ June 30 An auditor will be selected FNRAA'~ June 30 An auditor will be selected I T A ~ ~ June 30 An auditor will be selected

All audit reports will be submitted to the Bank within six months f rom the end of Senegal fiscal year.

6.2 DISBURSEMENT ARM AGEMENTS

(a) Disbursement Methods In the in i t ia l stages o f implementation, the project wil l claim disbursements f i o m IDA o n Reimbursement, Special Account Advance, Direct Payment, the basis o f transactions and Special Commitment. These methods wi l l be used at the beginning o f the project wil l use the reimbursement, replenishment o f the designated account, direct Payment and are special' commitment procedures. The project i s expected to shift to disbursements based o n interim un-audited financial report based o n disbursement reports-as soon as the Bank i s wil l be satisfied with the capacity o f the TFCU implementing the project.

(b) Minimum Value o f Applications The minimum value o f Direct Payments and Special Commitments wi l l be CFAF 15O.FCFA.

(c) The supporting documentation for requests for reimbursement should be a summary sheet and records evidencing eligible expenditures for payments against contracts subject to the prior review and valued at $500,000 for work, $250,000 for goods, $100,000 for consulting firms, and $50,000 for individual consultants, or more.

The supporting documentation for reporting eligible expenditures pa id from the designated account should be a summary sheet and records evidencing eligible expenditures for payments against contracts subject to the prior rev iew and valued at

Reporting on Use o f Credit Proceeds

The same auditor will be selected for the audits of the TFCU, ASPRODEB, and FNRAA l3 Individual Auditors will be recruited for each o f the Agencies

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$500,000 for work, $250,000 for goods, $100,000 for consulting f irms, and $50,000 for individual consultants, or more.

The supporting documentation for requests for direct payment should be records evidencing eligible expenditures (copies o f receipt, supplier’s invoices).

The project will submit a Bank statement and a reconciliation o f the designated account together with the withdrawal application on a monthly basis.

Administrative Level National

All supporting documentation for expenditures claimed under contracts below the above- mentioned thresholds o n the basis o f Statements o f Expenditures (SOEs) wil l be retained at the TFCU and wil l be made available for periodic Wor ld Bank reviews, supervision missions, and project external auditors. Fund flows are described below.

~

Account Type Signatories Bank Number of Type of accounts Account

Designated Director o f Debt and Investment Commercial 1 Pooled for Account in Department or his deputy Bank IFAD and F.CFA acceptable IDA

The format o f the quarterly un-audited financial report has been discussed during the negotiations and wil l be attached to the disbursement letter.

(d) Designated Account . The designated account wil l be managed by DDI in coordination with the TFCU. The designated account will be and located in a Commercial Bank acceptable to IDA. TFCU’s designated account wil l have IDA and FDA funds pooled.

The currency o f the designated account will be CFAF. The total allocation o f the Designated Account wil l be FCFA 1 bi l l ion.

. .

. Reporting o n the use o f funds f rom the designated account wil l be based init ial ly o n Summary sheets and Statement o f expenditures. Once the required capacity has been certified, the TFCU wil l submit interim financial reports to IDA. Reporting o n the use o f funds by the Executive Agencies to TFCU wil l be based o n a financial and technical report (format to be included in the Management Services Contract). Payments wil l be made to FNRAA and ASPRODEB in tranches. The init ial tranche wil l be determined based o n the disbursement plan. Subsequent payments wil l be based o n progress reports (physical and financial) and appropriate

.

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disbursement triggers. Evidence o f payments wi l l be kept by the respective Implementing Agencies. IDA funds in the Designated Account wil l be pooled with IFAD funds.

( f ) Counterpart Funding The Government must make a l l arrangements necessary to ensure the t imely mobil ization o f the counterpart funds needs for project implementation. The government contribution wil l be mobil ized as co-financing and in the fo rm o f fiscal revenues (Value Added Taxes - VAT contribution). The estimated Government’s fiscal revenue contribution i s US$4.5 mill ions. All the categories o f the project (apart f rom the Service agreements, category 4, and the Operating costs, category 5) wil l be disbursed at 100 percent for foreign expenditures and 100 percent for local expenditures taxes excluding VAT. Categories 4 and 5 wi l l be financed at 100 percent, taxes included. The VAT contribution wi l l be mobil ized by Treasury Checks issued by DDI, except for operating costs and other small expenditures where actual Government counterpart funding wil l be required.

(g) Withdrawal Schedule: The fo l lowing table sets out the categories o f items to be financed out o f the Proceeds o f the credit, the allocation o f the amounts o f the credit to each category and the percentage of expenditures for items so to be financed in each category:

l4 The expenditures to be financed will be at 100% until the financing agreement for IFAD i s effective. Once IFAD loan i s effective, expenditures will then be co-financed at 75 percent from IDA and 25 percent f rom IFAD. l5 the t e r m “operating costs” means incremental recurrent expenditures incurred o n account o f the Project implementation, office supplies, fuel and maintenance o f vehicles, maintenance o f equipment, telephone and other communications charges, office rent and insurance for vehicles, motorcycles and office equipment and furniture, bank and services fees, travel and supervision, and staff salaries --excluding salaries o f the Recipient’s c i v i l service.

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7. PROJECT COFINANCING: IFAD IFAD i s expected to cofinance the project. IFAD funds wil l be administered by the Bank. IFAD and the Bank have agreed to cofinance the activities. However, given the fact that the preparation process has not yet started, the Bank wil l finance the project init ially, as per the PAD; adjustments wi l l be made when IFAD i s ready. The major change wil l be related to the cost breakdown o f the project and to disbursement percentages. The disbursement letter wil l be updated to reflect these changes. IFAD funds wil l be pooled with IDA’S o n the designated account. However, the project wi l l maintain two separate books, one for IDA funds and one for IFAD funds. Separate withdrawal applications wil l be prepared by the project and sent to the Bank for processing.

8. LOAN CONDITIONS AND OTHER FINANCIAL COVENANTS Effectiveness conditions (i) The Recipient has recruited key staff o f the TFCU, including the project

coordinator, a financial management specialist, a procurement specialist, and a monitoring and evaluation specialist, a l l with qualifications and experience acceptable to the Association;

(ii) The Recipient has: (i) adopted the Project Implementation Manual, comprising the administrative and financial procedures, in form and substance acceptable to the Association; and (ii) updated the accounting software at the TFCU in manner satisfactory to the Association;

(iii) The Recipient has hired an external auditor satisfactory to the Association, under terms and conditions satisfactory to the Association, and consistent with the procurement guidelines;

(iv) The Recipient has entered into agreements, in form and substance acceptable to the Association, w i th FNRAA, and ASPRODEB, respectively for the implementation o f some o f the activities to be carried under components A, and C, respectively.

9. SUPERVISION PLAN On a regular basis (at least once per year), the system wil l be reviewed and assessed. The Interim Unaudited Financial Report (IFR) wil l be reviewed, as w e l l as the audit reports and the internal audit systems.

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Appendix 1 : Financial Management Action Plan

Action

Administrative and Accounting Manual

External Audit

Tasks

1

1

Selection o f a facilitator to coordinate the elaboration o f the manual Elaboration o f the draft administrative and accounting manual and submission to IDA Comments on the draft manual Final manual adopted by the project’s steering committee

Request For Proposals sent to the Bank

1

1

1

1 Non-Objection 1 Selection Process 1 Non-Objection (evaluation report) 1 Signature o f the contract

1 Satisfactory updating o f accounting software in accordance with IDA standards

Entity

1 Preparation Team

1 Preparation Team

1 IDA 1 Preparation Team

I Project’s Steering Committee

Committeei6 1 Selection

1 IDA . Selection

1 IDA 1 Selection

1 Preparation Team

Committee

Committee

Target :ompletion Date Done

June 1,2006

June 15,2006 June 30,2006

M a y 3 1,2006

M a y 3 1,2006 June 7,2006

June 15,2006 June 30,2006

June 30,2006

l6 The selection committee wil l include, notably DDI, Cow des Comptes, or General Inspectorate of Finance, Project’s Preparation Team

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Appendix 2. PSAOP: Project's Institutional Chart

I Documents I L - - - - - - - - - - - - - - - - J

COMMITTEE

. . . . . . . . . . . . . . . . . . . . I Management Services j

....................................................................... DONORS

j WOFUDBANK 4 FIDA

......................................................................

Appendix 2-1: Organizational chart o f the TFCU

COORDINATOR

4 FINANCIAL

MANAGEMENT SPECIALIST

1 ,

PROCUREMENT SPECIALIST

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-4 h 2 t

n

c 3 3

?

L 0

0 n Y

5

I I I .

h 0

Appendix 4: Risk Assessment and Internal Control

1. Corruption 2. Poor governance 3. Weak judiciary 4. Weak management capacity

Risk Assessment ] H I M I L l N l Comments

Inherent Risk Inherent risk is the susceptibility of the project jnancial management system to factors arising from the environment in which it operates, such as country rules and regulations and entity working environment (assuming absence of any counter chpckv nr internal controls).

X X X X

Overall Rating Inherent Risk X

The C F A A action plan i s under implementation and the government has created an executive secretariat to fol low UP.

Control Risk r Control risk is the risk that the project’s accounting and internal control framework are inadequate to ensureproject funds are used economically and efficiently and for the purpose inten1 1. Implementing Entity 2. FundsFlow 3. Counterpart funds . No major r isk i s anticipated on the

availability o f the counterpart funds. 4. Staffing

5. Accounting Policies and Procedures

6. Internal Audit

7. External Audit

9. Information Systems

Overall Control Risk

I dem inherent risk

Counterpart funds will be available o n VAT contribution

I I I

X

H: High M: Moderate L: Low N/A: Not Applicable

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Appendix 5: Flow of Funds and Information

, - - - - - - - - - -

....................................

......... ........................................................................................................... 1 DDI I TFCU

DESIGNATED ACCOUNT (POOLED) (Commercial Bank - Dakar)

1 I

1 .................................................................. $; .....................................

- - - - - - - - - - - - - - _ _ _ _ _ , ~ Fiiinncial a n d technical j

- -

ASPRODEB) ACCOUNTS

.................................................................................................................................................................................................... ...............................

ACCOUNTS OF SUPPLIERS OF GOODS AND SERVICES /BENEFICIARIES

......................................................................................................................................... ....................................................................................................................................... :

, Payments

-b Direct Payments - - - - - - ....................... Withdrawal applications

* Financial and Technical report o f the Executive Agency

_ . . - . . + Treasury Checks for VAT contribution

* IFAD Cofinancing w i l l become effective at a later date

----

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Annex 8: Procurement Arrangements SENEGAL: Agricultural Services & Producer Organizations Project 2

A. General Procurement for the proposed project wil l be carried out in accordance with the Wor ld Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004; and “Guidelines: Selection and Employment o f Consultants by Wor ld Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loadcredi t , the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and t ime frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan wil l be updated at least annually o r as required to reflect the actual project implementation needs and improvements in institutional capacity.

a) Procurement of Works. Works procured under this project, wil l include: rehabilitation of some I S M research centers and stations, complementary works o f ITA, rehabilitation o f decentralized administrative offices (DRDR, IRSV, etc.)

Procurement wi l l be conducted using the Bank’s Standard Bidding Documents (SBD) for a l l ICB and National SBD agreed with or satisfactory to the Bank. C iv i l works contracts costing: . US$500,000 equivalent o r more per contract wi l l be procured through International

Competitive Bidding (ICB). Civil works contracts costing less than US$500,000 equivalent per contract will be procured through National Competit ive Bidding (NCB) procedures acceptable to IDA.

US$50,000 may be awarded based o n Shopping procedures, obtained f rom at least three qualified local contractors in response to a written invitation stating description o f works, including basic specifications and the required completion time.

b) Procurement o f Goods: Goods procured under this project wil l include: 0 Procurement will be conducted using the Bank’s S B D for a l l ICB and National

SBD agreed with or satisfactory to the Bank. Goods contracts costing US$250,000 equivalent o r more per contract wil l be procured under ICB. The total amount o f contracts costing less than US$250,000 equivalent wi l l be procured through NCB procedures.

Procurement for readily available off-the-shelf goods that cannot be grouped, or standard specification commodities for individual contracts costing less than US$50,000 equivalent, m a y be procured under Shopping procedures as detailed in paragraph 3.5 and 3.6 o f the “Guidelines: Procurement under IBRD Loans and IDA Credits and June 9, 2000 Memorandum “Guidance o n Shopping” issued by the Bank.

0

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c) Procurement of non-consulting services under this project will include services such as transport, insurance, operation and maintenance, etc. Given the small amount o f such contracts, procurement wil l fo l low Shopping procedures when they are estimated at less than the equivalent value o f US$50,000; a l l contracts above this amount wi l l f o l l ow N C B procedures using acceptable SBDs.

d) Selection of Consultants: Consultancy services and training wil l include various advisory services, studies including engineering and design studies, construction supervision, training and technical assistance in financial management, procurement. The procurement plan wil l indicate for each contract the most adequate selection method to be used.

Assignments estimated to cost the equivalent o f US$200,000 or more wi l l be advertised for EO1 in Development Business (UNDB), in DgMarket, and in at least one newspaper o f wide national circulation.

Short l is ts o f consultants for services estimated to cost less than US$lOO,OOO equivalent per contract m a y be composed entirely o f national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Consultant services estimated to cost less than the equivalent o f US$50,000 may be contracted through Selection Based on Consultants’ Qualifications (CQS) provided the assignment meets the requirements o f paragraph 3.7 o f the Consultants’ Guidelines.

Consulting services o f individual consultants (IC) wi l l be procured under individual contracts in accordance with the provisions ofparagraphs 5.1 to 5.3 o f the Guidelines.

Single Source Selection:

Agreements (Management service contracts) wi l l be signed with ASPRODEB and FNRAA for the implementation of component C (support to Producer organizations) and sub-component A. 1 (Stregthening SNRASP and FNR4A) respectively.

e) Operational Costs: The type o f operating cost that shall be financed by the project wi l l be defined and agreed during appraisal and reflected in the f inal version o f the PAD. The procurement methods to be followed are similar t o those described in the section on procurement o f goods.

A Project Implementation Manual (PIM) will be prepared and will be approved before effectiveness. The procurement procedures and SBDs to be used for each procurement method, as we l l as model contracts for works and goods, wi l l be presented in the PIM.

B. Assessment of the agencies’ capacity to implement procurement

a) At the project coordination level An assessment o f procurement staff within the Coordination Unit was conducted during the period November 18-21, 2005. The assessment reviewed the organizational structure for project

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implementation and the interaction between the project’s procurement specialist (at the TFCU) and the procurement specialist o f each implementing agency.

The ma in findings are that the Procurement Specialist in place has had significant experience with W o r l d Bank procedures and i s comfortable applying them. The pr imary recommendations to reinforce and improve the situation are the following:

The procurement specialist should be t imely informed on a l l procurement matters so as to react quickly whenever needed; he will be associated in drafting o f a l l procurement documents which are to be sent to the Bank; The procurement specialist wi l l provide quality control o n a l l procurement issues, including those who are not subject to prior approval by the Bank;

0

0

b) At the components level The core staff at each component will include a Procurement Specialist o r an Assistant familiar with Wor ld Bank procurement procedures who wil l work closely with the Procurement Specialist at the TFCU. The said person should not report t o the person in charge o f payments or o f implementing the contracts.

The Procurement Specialist/Assistant, in association with the TFCU Procurement Specialist will: (a) prepare and update the procurement p lan for the project; (b) moni tor the progress o f procurement activities; (c) assist the implementing agencies in the preparation o f bidding documents and advertisements for goods and works contracts and requests for proposals for consulting assignments; and (d) assist the team in the bid opening and evaluation process, to avoid delays and ensure compliance with the guidelines.

All o f them wil l also advise the implementing agencies o n a l l procedural matters. For most o f the components, there wi l l be a procurement specialist with the qualifications and experience to conduct the process.

However, if for any reason a staff -paid o n the resources o f the project- responsible for procurement in a given component leaves h idher position before the project becomes effective, a competitive recruitment process wi l l be finalized and a simpli f ied capacity evaluation wil l be conducted to determine whether a l l conditions are in place for procurement in compliance with Wor ld Bank procedures. These conditions wi l l be an important part o f the TOR before the selection and the contracts.

The primary recommendations to reinforce and improve this situation are the fol lowing:

0

0

The capacity o f the procurement specialist in procurement planning so as to better survey the progress o f procurement activities and speed up the contract signature; The component responsible wil l do i t s best to finalize o n t ime the technical specifications for procurement o f goods and works and the terms o f reference for selection o f consultants so as to avoid delaying procurement; The procurement specialist should limit his/her intervention in the procurement activities to: (i) centralization o f procurement activities in one procurement p lan to ensure that thresholds are respected in terms o f methods (possibility o f grouping expenditures and

0

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aggregates), (ii) preparation o f the bidding documents and requests for proposals; and (iii) advising the component responsible during the evaluation o f the bids.

This means, therefore, that the TOR and technical specifications are prepared by the component responsible for i t s implementation. This should be done in a t imely manner and, in fact, needs to be part o f the annual procurement plan.

Therefore, the assessment indicates that there should be no major procurement problems. Since there i s n o standard bidding document or request for proposals, the T F C U and the components wi l l always use the Wor ld Bank procurement procedures regardless o f the type o f contract o r i t s amount.

Most o f the i s s u e s h k s concerning the procurement activities for the project have been identif ied and include:

0

0

0

0 Insufficient procurement planning.

Insufficient responsibility o f the procurement specialist o n procurement matters; Delays in the submission o f technical specifications and terms o f reference f rom the components o f the project beside the TFCU; Insufficient coordination o f activities between the TFCU and the components;

The corrective measures that have been agreed upon are the following: 0 Agree o n clear terms o f reference for the procurement specialist so as to grant h i d h e r

full responsibility for the quality o f procurement documents and the delays o f the process (contract signature);

0 Define and update regularly the procurement p lan and fol low it adequately so as to identi fy bottlenecks quickly and solve problems;

0 Better coordination o f the project o n the procurement side to avoid delaying procurement decisions and submission o f technical specifications and terms o f reference.

The overall project risk for procurement i s medium.

C. Procurement Plan The Borrower, at appraisal, has developed a Procurement Plan for project implementation that provides the basis for the procurement methods. This plan, covering the first 18 months o f implementation, has been agreed during project negotiations. The finalized p lan wi l l be made available in the Project’s database and in the Bank’s external website. The finalized Procurement Plan wi l l be updated annually in agreement with the Bank or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Table B: Thresholds for Procurement Methods and Prior Review

WORKS Expenditure Contract value Procurement method Contract Subject to Categorv threshold Prior Review

Y 1

(US$) (US$ Million) 1. Works > = 500,000 ICB All

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< 500,000 NCB None, except first 2

< 50,000 Shopping None (Post Review) contracts

GOODS Expenditure Contract value Procurement Method Contract Subject to

Category threshold Prior Review -~

(US$ ) (US$) 2. Goods > =250,000 ICB All

< 250,000 NCB None, except first 2 contracts

< 50,000 Shopping None (Post Review)

CONSULTING SERVICES Expenditure Category Contract value Contract Subject to

' Threshold Prior Review (US$ ) (US$)

3. Consulting services > =100,000 All

a. Firms < 100,000 None except first 3 contracts) All

b. Individuals > = 50,000 All

All < 50,000 None (Post Review)

D. Frequency o f Procurement Supervision In addition to the prior review supervision to be carried out f rom Bank offices, the capacity assessment o f the Implementing Agency has recommended two supervision missions to visit the field to carry out post review o f procurement actions.

E. Details o f the Procurement Arrangements Involving International Competition The project team has prepared a provisional procurement plan covering the f i rs t 18 months o f project implementation and the cost table. The detailed procurement p lan covering the period o f 18 months has been developed by the project team, reviewed, discussed, and agreed with the Bank at negotiations.

a) Goods and Works and Non-consulting Services. (i) L i s t o f contract packages wh ich will be procured fo l lowing ICB and Direct

Contracting are presented in the fol lowing table.

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Ref No.

ANCA02 243,950

748,000

1,000,000 ANCA03 I S M 1

MAEL2

MAEL4

ICB

ICB

ICB

Description o f the Contract

Ref. No. Description of the task

F-08 Independent evaluation o f 10 research projects o f

Purchase o f : Computers Cameras, Various office equipment Video projectors Purchase o f : Motorcycles 125 cm3 Vehicles Rehabilitation o f regional centers and stations1

Estimat ed cost (US$)

100,000

Parts o f vehicles and motorcyles Tools and Equipment for meat inspection

Estimated cost US%

Procurement method

498,ouo 44,800 7-

ICB

- P- Q

- N o

- no

Yes

N O -

N O -

Bid opening (Prior/Post)

Priori

between

(b) I C B Contracts estimated to cost above U S $ 500,000 for Civ i l Works and US$250,000 for goods per contract and all direct contracting will be subject to prior review by the Bank.

b) Consulting Services. (i) L i s t o f Consulting Assignments with,

1 1 2

1 3rd call for proposals I FNRAA09 I Independent I 100,000

evaiat ion o f 10 research projects o f 4th call for proposal

iort-list o f international f i rms:

Bank

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ANCAR01

ANCAR02 I T A 0 1

MAELO 1

MAEL04

MAELO5

MAEL06

MAEL07

(b) Consultancy services for f i r m s estimated to cost above U S $ l O O , O O O per contract, individual consulting services for assignments estimated to cost above US$50,000 and Single Source selection o f consultants wil l be subject to prior review by the Bank

Agricultural and rural 31,500 SBQC Prior Aug-06 information system M&E manual 42,000 SBQC Prior Oct-06 Mission de 120,000 SBQC No Jul-07 certification I S 0 17025 certification mission o f laboratoires Methodology o f 100,000 SBQC Prior Jan-07 livestock census Methodology o f 60,000 SBQC Post Feb-07 decentralized planning National system o f 60,000 SBQC Post Feb-07 M&E (Moa) Human resources 60,000 SBQC Post Feb-07 mgmt system Strategy o f 80,000 SBQC Post Feb-07 agricultural and rural trainings (MOA)

(iii) Short-lists composed entirely o f national consultants: Short-lists o f consultants for services estimated to cost less than the equivalent value o f US$lOO,OOO per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.

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Annex 9: Economic and Financial Analysis

SENEGAL: Agricultural Services & Producer Organizations Project 2

Economic and Financial Analysis

1. Financial analysis

For the financial analysis, assessment was made o n the basis o f two standard farming models per zone (smallholder and medium-scale producers) in the country’s six ma in agro-ecological zones. The farming model used depends o n the area o f the land being cultivated, the crop type, and the zone. A crop budget (or a livestock budget in the case o f milk) i s developed for each type o f farming “with-” or “without-project.” Profits were determined by adding together the budgets by type o f producer. Smallholder producers wil l improve their yields toward the current average by adopting the proposed technologies, while medium-scale producers wi l l show increases o f 15-20 percent depending o n the product and zone. The financial analysis takes observed market prices into account.

I t bears noting that the smallholder producer has the lowest production level, but uses few inputs. In an irrigated zone where the use o f inputs i s required, the most costly l ine items are inputs (seed, fertilizer, phytosanitary products), irrigation, and harvesting. The difference between the cost o f these items for the smallholder and medium-scale producer i s currently CFAF 50,000 per hectare, and the difference in yield i s more than ha l f a metric ton per hectare. Adhering to the research recommendations in this area could improve current yields by more than 20 percent. I t has been observed that manual labor i s predominantly used for a l l crops in the rainfed zone. I t accounts for between CFAF 32,000 and CFAF 76,000 for smallholder corn or cowpea producers. By w a y o f comparison, labor accounts for between CFAF 35,000 and CFAF 96,000 per hectare for the medium-scale producer. The difference in yields by type o f farming i s between 10 percent and 20 percent without-project and ranges f rom over 30 percent to 42 percent with- project. The improved yields attributed to the project contribute to improved incomes o n the part of smallholder and medium-scale producers, depending o n the product and the zone, ranging f rom CFAF 7,000 to CFAF 45,000 per hectare for smallholders and f rom CFAF 12,000 to CFAF 2 10,000 per hectare for medium-scale producers.

With the adoption o f potential technologies through the implementation o f PSAOP2 (Programme des Services Agricoles et Organisations de Producteurs-Agricultural Services and Producer Organizations Program) and with specialization by possible crop type, an internal rate o f return (IRR) o f 20 percent and a producer’s net present value o f C F A F 159,000 (or US$319) are expected for the l i fe o f the project. These figures vary depending o n the type o f farming. The IRR for the smallholder producer model on ly i s also 20 percent, and rises to 21 percent for the medium producer prototype. Whi le low, these indicators are s t i l l higher than the 12 percent opportunity cost o f capital.

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2. Economic analysis

The cost-benefit approach i s used for the economic analysis. I t consists o f evaluating trends in the cost and benefit parameters “with-” or “without-project.” The profits resulting from the project come from the increase in agricultural production achieved by introducing the technologies proposed in the program framework. There are three different types o f costs: PSAOP2 public investments (in the collective agricultural support sector and producer organizations), private investments (individual investment in agricultural equipment to maximize available opportunities) and additional costs of production caused by the adoption o f new technologies. Economic prices are considered in this assessment and are obtained by adjusting observed distortions in financial prices (taxes, export duties, etc.)

Six large agro-ecological zones o f the country were identified for purposes o f determining the structure o f production costs, current yield levels, and the levels anticipated with the project, and their implications in calculating the profitability o f the project. In each o f these zones, four main crops or types o f livestock production are chosen (including new crops promoted by the government over the last three years). Accordingly, our selections were:

0

0

0

0

0

0

Valley (rice, industrial tomato, onion, and sweet potato); Niayes (onion, fresh tomato, cassava, livestock); Groundnut-producing north central basin (groundnut, millet, cowpeas, milk); Groundnut-producing south central basin (millet, groundnut, corn, sesame); Eastern Senegal (cotton, corn, sesame, livestock); Upper and Middle Casamance (corn, groundnut, rainfed rice, milk).

For agricultural crops, each operation was analyzed in terms o f the rates o f change o f land area, yield and production over the ten last years (1994/95-2004/2005) at the regional and then national level. The “without-project” scenario i s developed using the current fluctuating trends in land area and average yields. The “with-project” approach takes into account the option for improving yields with the support o f project components, using a technology adoption rate o f 15 percent to 25 percent a year depending on the zone and crop, with an annual rate o f change o f up to 3 percent. The local milk subsector wi l l improve production and quality, making it possible to achieve productivity gains through the use o f research technologies. As a “crop” component, milk i s identified in the major dairy-producing zones, namely the north o f the groundnut- producing basin, Eastern Senegal and Upper and Middle Casamance.

The livestock subsector i s primarily seen in eastern Senegal, the north central basin and the Niayes. In the case o f animals, emphasis i s placed on vaccination coverage against the main diseases decimating animal populations (New Castle for poultry, equine plague, and goat and sheep plague). Consequently, sector experts have focused on increasing the vaccination rate to reduce animal losses under the framework o f PSAOP2. The assumption i s that improved vaccination coverage for animals reduces health r i sks at this level. The coverage level for small ruminants, currently 20 percent, would increase to 30 percent in the f i rst year and 55 percent by the fifth year. Equine protection, currently at 5 percent, would be raised to 50 percent by the fifth year, while poultry coverage, now at 10 percent, would be 55 percent at the end o f the second phase o f the PSAOP. This improvement in vaccination coverage wil l reduce mortality

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(the mortality rate i s applied to the potential not covered by vaccination). Without the project, the current rate o f coverage by species would be stable or increase significantly by between 1 percent and 3 percent, increasing mortality.

At the production level, an increase ranging from 19,000 metric tons in 2006 to 263,000 metric tons in 2010 has been projected with the introduction o f the PSAOP for the agricultural products targeted in the six agro-ecological zones. Production wil l have doubled by 2015. For milk, there would be an initial increase in supply o f 200 metric tons at the beginning o f the project, and increases o f over 4,000 metric tons by the end o f the second phase and more than 6,000 metric tons by 2015. In contrast, the supply o f cattle varies depending on the species targeted for vaccination coverage. The number of head with improved mortality rates would increase from 36,000 to 360,000 for small ruminants, from 500 to 9,000 for horses, and from 300,000 to 2,372,000 poultry in the five first years o f project execution.

The economic assessment shows the social viability o f the PSAOP2 project from the perspective o f the national economy. The economic IRR increased from 36 percent over the l i f e o f the project and i s projected to reach 73 percent for 2006-2015. These rates substantially exceed the opportunity cost o f capital o f 12 percent, showing that the project i s satisfactory in comparison to other alternatives. The net present value o f the project i s CFAF 11 bi l l ion or US$23.3 million. In 2015, the net present value will be more than twice the initial investment (CFAF 65 billion). These results demonstrate the soundness o f the project and confirm the profitability o f the planned PSAOP2 investments. The cost-benefit ratio i s also substantially above unity for both targeted periods.

The impact o f the Agricultural Services and Producer Organizations Program (PSAOP2) i s deemed beneficial for Senegal in terms o f the results presented. However, in order to appreciate the robustness and soundness o f the assessment results, a sensitivity analysis i s carried out for certain parameters deemed critical and variable.

The results show that a highly improbable 35 percent decrease in the adoption rate from the current targeted rates, an 18 percent reduction in margins, a price decline on the order o f 18 percent, or a 6.7 percent decrease in yield o f the main products targeted would lower the economic IRR projected for 2010 to a level equal to the opportunity cost o f capital. It bears noting that the first three situations are highly unlikely. However, the profitability o f the project does appear to be highly sensitive to average yield.

Table A9.1: Sensitivity analysis for the results of the economic assessment Critical value or IRR = 12% or NPV = 0

I Critical variables I I I Technolom adotltion rate l - 3 5 % I I Margin on Droducts 1 -18% I I Targeted vield I - 6.7 % I 1 Observed tlroduct tlrices 1 -18% 1

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3. The analytical approach seeks to determine the medium- and long-term impact o n public finances o f the additional recurrent expenditure triggered by the project in terms o f the projected estimates o f publ ic expenditure for wages, investment expenditure, transfers, and operations o f the primary sector (livestock, agriculture, fishing, and forestry). The major state budget categories (revenue and expenditure) are estimated on the basis o f projections using trends observed over the last three to four years. The estimates relate to total publ ic expenditure in the primary sector: the operating and investment budgets for each ministry concerned.

Impact of recurrent expenditure on public finances

The Consolidated Investment Budget (BCI) i s the annual executive por t ion o f the Three-Year Public Investment Plan. The average share allocated to the primary sector over the last four years was taken into account and estimated to be 25.1 percent (Wor ld Bank, 2004). Only the operating budgets o f the Ministries o f Agriculture and Livestock and the por t ion allocated to the primary sector o f the Ministry o f Scientific Research which administers the ITA (Food Technology Institute) i s taken into account. These budgets finance pr imar i ly the wage bill and staff-related costs pertaining directly to organizations involved in this project (research institutions, research funding institutions, and extension institutions). Estimates o f public expenditure to determine whether the project’s recurrent expenditure i s sustainable in the medium and long terms are done by applying the ratios o f sectoral categories o f available data for 2000-2003 to the estimates for total public expenditure.

The total cost o f the PSAOP2 program i s CFAF 25.3 b i l l i on over f ive years (2006-2010). The anticipated financing f rom IDA credits as w e l l as support f rom FIDA (Foundation for International Development Assistance) amounts to CFAF 12.1 bi l l ion. If subsidies and tax exemptions are recorded as a contribution f rom the state estimated at 10 percent o f the overall budget (CFAF 2.53 billion), the remaining financing requirement wou ld come to CFAF 10.67 b i l l i on over f ive years, that is, around CFAF 2.134 b i l l i on annually. Since financial contributions from users o f research and agricultural advisory services are being considered, the program’s recurrent expenditure to be covered by the state wou ld be the costs not covered by these various contributions.

Financial contributions f rom users o f agricultural and agro-processing research and o f agricultural advisory services to cover the program’s costs are under consideration. Owing to the slow implementation o f the plan’s operating mechanisms, two scenarios have been considered. In the best-case scenario, users wou ld pay 20 percent o f the research costs and 40 percent o f the agricultural advisory services costs. This assumption i s based o n the principle that i f the system o f collecting revenue f rom taxes on agricultural products i s introduced with the Fonds National de Dkveloppement Agro-Sylvo-Pastoral (National Rural Development Fund), ANCAR (National Rura l and Agricultural Advisory Agency) i s accountable to the POs, and research programs are in l ine with demand f rom the POs, the beneficiaries would have an incentive to participate in this financing.

In the worst-case scenario, users wou ld cover 5 percent o f research costs and 20percent o f agricultural advisory services costs. In v iew o f producers’ uncertainty and lack o f experience with participating in the financing o f such activities, but bearing in mind o n the other hand the program’s financial support for activities that are common to the other components, i t wou ld be

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reasonable to expect these average contribution rates. However, it i s hoped that the f i rst scenario wil l be operational by the end o f the second phase, while the second pessimistic one wil l be in place at the beginning o f the implementation o f PSAOP2.

Budgets (in billions o f CFA francs)

Consolidated Investment Budget (BCI) . Operating budget Ministry o f Agriculture Operating budget Ministry o f Livestock Operating budget

Total public expenditure or total recurrent costs

(ITA)

3.1. Both the agricultural and livestock sectors receive on average CFAF 7.664 bi l l ion per year to cover operating costs, that is, CFAF 7.259 bi l l ion for the Ministry o f Agriculture and CFAF 405 mi l l ion for the Ministry o f Livestock. The operating costs for ITA, which falls under the Ministry o f Scientific Research, are estimated at CFAF 373 mi l l ion (Project document).

National budget and public expenditure

Annual State funding Recurrent amount costs 66.25 19.875* 16.628**

7.259 7.259

0.405 0.405

0.3726 0.3726

74.29 24.66

With regard to the BIC, an analysis o f the last three years (2000-2003) shows that an average o f CFAF 66.25 bi l l ion was allocated to the Ministr ies o f Agriculture and Livestock, bringing the total amount o f the operating budgets o f the primary sector (Ministries o f Agriculture and Livestock, and ITA) associated with the B IC to public expenditure o f CFAF 74.3 bi l l ion per year for public expenditure.

Table A9.2: Evaluation of the flow of annual Dublic exDenditure

Based on the growth o f the state’s investment budgets by sector between 2000 and 2004, the primary sector’s share represents 25.1 percent on average. B C I operating appropriations amounted to CFAF 16.6 bi l l ion (CFAF 74.3 bi l l ion x 25.1 percent). Consequently, recurrent costs (the sum o f operating budgets and B C I appropriations) amount to CFAF 24.6 bi l l ion per year, with CFAF 7.4 bi l l ion being paid by the state. The state’s contribution to budget financing has been estimated at 30 percent over the last three years (Hatie, 2005). External financing i s estimated at 41 percent, in the form o f loans, while subsidies account for 15 percent o f the total.

Under the scenarios, users of research and agricultural advisory services contribute between CFAF 1.250 bi l l ion and CFAF 3 billion, bringing the annual contribution to between CFAF 250 mi l l ion and CFAF 600 million. Consequently, the state’s recurrent costs are estimated at between CFAF 1.534 bi l l ion and CFAF 1.884 bi l l ion per year. If the current situation remains

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unchanged (no financial contributions from users), the state's recurrent costs would average CFAF 2.134 bi l l ion per year.

Component

Research

Total Agricultural advice

Optimistic scenario Pessimistic scenario Rate Contribution Rate Contribution

20 % 1,000,000,000 5 % 250,000,000 (CF fw (CF fw

40 % 2,000,000,000 20 % 1,000,000,000 3,000,000,000 1,250,000,000

3.2. RECURRENT COST PROJECTIONS FOR THE MEDIUM AND LONG TERMS

Year

Based on the evaluation o f public expenditure, the expenditure f low in the primary sector amounts to CFAF 74.3 bi l l ion per year. The current expenditure o f the primary sector i s estimated at CFAF 24.66 bi l l ion per year, including the wage bill and maintenance operations for the Ministr ies o f Agriculture and Livestock as wel l as the I T A . If i t i s assumed that public expenditure wil l increase by 4 percent in the medium and long terms (projections in the framework paper for 1998-2017), i t i s evident that the recurrent costs generated by PSAOP2 wil l s t i l l be less than 10 percent o f public expenditure in the primary sector (see table). The analysis indicates that even the scenario in which users do not contribute to the financing o f agricultural services would result in recurrent costs o f less than 10 percent o f the primary sector's public expenditure. Moreover, the share o f the state's public expenditure for PSAOP2 wil l decrease over time, from CFAF 2.1 bi l l ion in 2006 to CFAF 1.5 bi l l ion in 2015, a relative reduction from 9 percent to 4 percent, respectively.

Fixed annual current Recurrent costs o f Ratio expenditure

(in CFAF billions) (a)*

Primary sector the PSAOP paid by PSAOP/State

(in CFAF billions) percent the state (b)/(a)

(b)**

3.3. Implications of recurrent costs

2006 2010 2015

Research activities, agricultural advice, support for the producer organizations, and the restructuring and strengthening o f the ministry, do not result in a 10 percent increase in public expenditure for agriculture and livestock. Therefore, the recurrent costs generated by the PSAOP constitute a reasonable and sustainable burden on public finances.

24.66 2.1 9 28.85 1.8 6 35.10 1.5 4

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4. Conclusions Overall, i t appears f rom these results that investment in research and extension activities, in the reorganization o f agricultural advisory services, and in capacity building o f the POs, i s an interesting alternative for the use o f public and/or private funds. The option o f making efficient use o f technology leads to increased production and productivity, and higher producer incomes. These results confirm the prospects for the success o f the overall PSAOP program with the creation o f demand-driven technology linked to an efficient technology transfer system. The sensitivity analyses have shown that securing a return on these investments also entails a more efficient use o f technology.

The possibilities for increasing production under secure production conditions with the current and potential benefits from research essentially l ie in the judicious use o f the potential margins o f progress which exist in al l agriculture and livestock subsectors. There are s t i l l significant margins o f progress in terms o f the levels o f yield obtained and crop management without proportional impact on the use o f inputs with the available technology. However, the development o f the agricultural sector, for the intensification and diversification o f production whi le preserving the environment, depends heavily o n investments and o n implementing PSAOP2, which wi l l promote conditions that will lead to the achievement o f the desired results and marketing conditions.

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Annex 10: Safeguard Policy Issues SENEGAL: Agricultural Services & Producers Organizations Project 2

In view o f the sub-projects likely to be supported by PSAOP2, the latter has triggered OP 4.01 Environmental Assessment, OP 4.09 Pest Management, OP 4.12 Involuntary Resettlement, and OP 7.50 Projects on International Waterways. Sub-projects will include (i) the rehabilitation o f I S M ’ S regional research stations, some NARS offices and research facilities, construction o f a new headquarters building for the Ministry o f Agriculture; construction o f processing and storage facilities, and vaccination parks; and (ii) the construction and rehabilitation o f small- scale irrigation schemes, water retention ponds, small dams, watering points for livestock, and feeder roads.

Potential negative environmental impacts o f these sub-projects are likely to include: (i) water and soil pollution due to construction activities, increased use o f pesticides and herbicides as well as agro-processing activities such as milling and processing o f tubers; (ii) deforestation and water pollution due to palm o i l production; (iii) soil erosion and silting due to the construction o f irrigation canals and small dams as well as poor agricultural practices; and (iv) loss o f flora and fauna due to the use o f quarries as sources o f construction materials. Additional impacts related to an increase in standing water bodies such as reservoirs, water retention pools, irrigation canals, and quarries wil l include (v) an increase in the growth o f aquatic weeds (typha) which presently impede rural development in the Delta de la vallke du fleuve Senegal, and are l ikely to become a.problem in the basin Arachidier; (vi) a loss o f vegetation as agricultural lands are inundated; (vii) a reduction in land available for livestock development; and (viii) pressures on natural resources as the population increases in those areas that have access to water.

If le f t unattended, the negative environmental impacts o f sub-projects could also have negative impacts on public health, for several reasons. For instance: (i) an increase in the incidence o f malaria and belharzia as the number o f water management structures increases, and the water in quarries remains standing; (ii) pesticide poisoning due to the unsafe application and management o f pesticides and herbicides by untrained personnel; (iii) ineffective medical waste management at the veterinary parks; (iv) traffic accidents and exposure to dust and noise o f the population near construction sites; and (v) loss o f livelihoods due to land acquisition.

OP 4.01: Since the locations and potential localized impacts o f future sub-projects could not be identified prior to appraisal. To ensure that potential negative environmental and social impacts o f future sub-projects are identified and appropriately mitigated, the Borrower has prepared an Environmental and Social Management Framework (ESMF) and a Resettlement Policy Framework (RPF); both documents have been approved and disclosed in Senegal and at the Bank’s Infoshop on December 13,2005.

The ESMF outlines the environmental and social screening process for sub-projects. I t describes in detail the steps required to (i) screen sub-projects for potential negative social and environmental impacts; (ii) assign the appropriate environmental category to sub-projects; (iii) carry out the appropriate environmental work based on the screening results; (iv) review and approve the screening results, and, as required, environmental impact assessments; (v) carry out public consultations; (vi) carry out environmental monitoring and evaluation; and (vii) establish

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and follow-up on environmental monitoring indicators. Since Senegal’s environmental procedures do not include a screening process for sub-projects, this ESMF has been prepared in compliance with OP 4.0 1 Environmental Assessment which requires that al l investments proposed for Bank financing are screened to determine the necessary level o f environmental work.

To assist implementers o f sub-proj ects in managing the potential negative environmental and social impacts, the ESMF includes the following annexes: (i) a pest management plan to serve as guidance during the implementation o f sub-projects involving increases in agricultural production; (b) a national medical waste management plan to ensure the safe disposal o f medical waste at the vaccination parks; (c) environmental guidelines for contractors to be used during the planned construction and rehabilitation activities; (d) an outline o f the critical elements of quality standards for export crops, including best practices and effective pest management; (e) environmental standards for new irrigation sub-projects as developed under the Programme de Dkveloppement des Marchks Agricole du Sknkgal (PDMAS); (f) a summary o f the Bank’s safeguard policies to be taken into account during sub-project design and implementation; and (g) an Environmental Management Plan (EMP) which proposes mitigation measures and institutional arrangements as well time horizons and cost estimates for the effective implementation and monitoring o f mitigation measures for future sub-projects.

To ensure that sufficient institutional capacity exists for the implementation o f the ESMF, the following recommendations have been made: (a) Nomination by ANCAR o f an Environmental Specialist to assist ASPRODEB and the POs with environmental monitoring activities and building environmental management capacity; (b) Nomination o f environmental & social focal points drawn from the technical staff and project managers at the regional levels o f (ANCAR, DRDR, etc.) who would receive training in environmental assessment; (c) Establishment o f an environmental database to collect information on the nexus o f environment - agriculture - livestock management; (d) Technical support in monitoring the effectiveness o f implementation o f the ESMF; (e) Preparation o f environmental impact assessments as required; ( f ) Environmental training (screening, environmental standards, management o f small dams and other water management structures) for (i) project coordination staff (DAPS); (ii) members o f executing agencies (ASPRODEB, ANCAR, ISRA, ITA, FNRAA); and (iii) members of the technical services (DRDR, IRSV, Directions Rkgionales de 1’Environnement); (g) Information and awareness raising campaigns for producer organizations addressing, among others, the impacts o f malaria and bilharzia; and (h) Information campaigns for NGO’s, local authorities and the population.

The EMP proposes institutional arrangements, including cost estimates, for the implementation o f above institutional and technical measures as well as environmental training and public awareness raising. The EMP hrthermore proposes mitigation measures for addressing issues related to malaria and belharzia as well as ineffective management o f pesticides. The EMP will be included in the Project Implementation Manual.

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OP 4.09: To ensure safe pest management under hture sub-projects involving increases in agricultural production, a pest management plan has been prepared as an annex to the ESMF. This pest management plan discusses, among other things, the current pesticide management practices in Senegal (lack o f storage facilities; lack o f protective gear for agricultural workers applying pesticides; unsafe handling and disposal o f packaging materials; lack o f knowledge in this regard among producer organizations) and the country's efforts to move towards integrated pest management through donor-supported projects such as the Projet Gestion Inte'gre'e de la Production et des De'pre'dateurs (GIPD), financed by the Food and Agriculture Organization (FAO) and administered by CERES/Locustox, and ongoing programs designed to develop biological measures, for example, to protect manioc and fruit trees against aphids.

I t further describes the various pests affecting crops such as aphids, caterpillars and nematodes, and notes that in 2003-2004, crop losses, for example, for groundnuts ranged from 20%-30% in Kaolack and from 40% to 60% in Thies-Diourbel; while crop losses for rice in the vallee fleuve Senegal ranged from 20% to 25%. At the moment, small farmers use less than 10% o f the pesticides available in Senegal, largely due to an ineffective distribution system, high costs, lack o f organization among small producers, the inability to buy small quantities, and a lack o f knowledge in the area o f pest management.

I t i s recommended that this pest management plan be implemented in synergy with the pest management plan for the Programme de De'veloppement des Marche's Agricole du Se'ne'gal (PDMAS) and in the context o f the PSAOP's Plan d'Action Pi lotepour la Gestion Inte'gre'e des Eaux et des Sols duns le basin Arachidier (PGIES) as well as in close cooperation between PDMAS, and the Direction de l'Analyse, de la Prevision et de l a Statistique, Ministry o f Agriculture and Livestock (MAE) who are responsible for implementing PGIES and PSAOP. Actually, the proposed pest management activities have been modeled on those being implemented in the areas o f PDMAS. More specifically, the pest management plan for PSAOP2 makes the following recommendations:

(a) Strengthening capacity at the Agence Nationale de Conseil Agricole et Rural (ANCAR) and among producer organizations through the training o f agents o f the DRDR, A N C A R (CAR), and IRSV in the regions o f Matam, Tambacounda, Ziguinchor, Dakar, Kolda, Thies, thereby complementing activities planned under PDMAS in St. Louis, Diourbel, Fatick, Kaolack and Louga; the training o f producer organizations wil l be implemented by ANCAR, and a training program wil l be discussed with the CLCCP;

(b) Provision o f equipment and infrastructures for the safe application and management o f pesticides, including the establishment o f a safe storage and collection system for producer organizations, and the control distributors to ensure they sel l only approved products;

(c) Controlling and monitoring o f the environmental impacts o f pesticides through (i) the establishment o f two laboratories in Tambacounda and Ziguinchor which would complement those established under PDMAS and PGPP to verify the levels o f pesticide residues in crops; and (ii) the provision o f relevant training to four laboratory technicians and necessary equipment; and

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(d) Development and dissemination o f alternative pest management strategies through public information campaigns, demonstration plots, videos; the pest management plan outlines measures designed, for example, to prevent the presence o f weeds; grain-eating birds; nematodes; and the handling o f empty pesticide containers and packing materials.

PSAOP2 wil l incorporate these recommendations into project design.

Although the Bank’s operational pol icy o n the safety o f small dams has not been triggered, the project wil l ensure that those sub-proj ects involving the rehabilitation or construction o f small dams (less than 2 meters in height) wil l prepare generic safety analyses as per OP 4.37 Safety o f Dams. Whi le the E S M F notes the potential negative environmental and social impacts o f unsafe small dams as discussed earlier, i t also describes the positive impacts o f h c t i o n i n g small dams such as f lood protection; storage o f surface water; establishment o f irrigation and drainage networks, replenishment o f groundwater resources; and positive effects o n biodiversity. I t furthermore describes a number o f technologies and techniques that wou ld have positive environmental impacts, for example, the dissemination o f appropriate techniques for the improvement o f continental fishing activities in lakes, basins, water retention pools, and around dams.

To ensure that sufficient capacity exists to address impacts related to small dams under the sub- projects, the project wil l provide training regarding the safe management o f small dams and other water management structures for members o f the (i) PSAOP Coordination Unit (DAPS); (ii) executing agencies (ASPRODEB, ANCAR, CNCCR, ISRA, ITA, FNRAA); (iii) technical services (DRDR, IRSV, and Regional Environment Offices); and (iv) producer organizations, Qualified engineers will carry out the generic safety analyses as required.

PSAOP2 wil l incorporate the training requirements into project design.

OP 4.12: Since the locations and scope o f sub-projects could not be determined prior to appraisal, and hence, the potential negative social impacts due to land acquisition could not be assessed, the Borrower has prepared a Resettlement Pol icy Framework (RPF). The RPF outlines the principles and procedures to be followed in the event that a sub-project involves land acquisition.

OP 7.50: As PSAOP2 will cover the entire country, i t i s l i ke ly that international water sources will have to be used to increase agricultural production. The Borrower has informed the O M V S and OMGS o f the proposed project and requesting these institutions to not i fy the relevant riparians. The riparians have been asked to provide their comments, and n o objection has been raised by the deadline April 28, 2006.

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Annex 11: Project Preparation and Supervision

SENEGAL: Agricultural Services & Producers Organizations Project 2

Planned Actual PCN review April 30,2005 M a y 12,2005 Init ial PID to PIC M a y 30,2005 June 2,2005 Init ial ISDS to PIC M a y 30,2005 June 14,2005 Appraisal January 30,2006 January 30,2006 Negotiations April 5,2006 April 25,2006 Board/RVP approval M a y 25,2006 Planned date o f effectiveness July 1,2006 Planned date o f mid-term review September, 2008 Planned closing date June 30,2010

Key institutions responsible for preparation of the project: Ministry o f Agriculture, Rural Hydraulics and Food Security, Ministry o f Livestock, Ministry o f Finance (DDI), ISRA, ITA, FNRAA, ANCAR, ASPRODEB.

Bank staff and consultants who worked on the project include: Name Title Unit Renato Nardello Sr. Operations Officer AFTS4 Olivier Durand Sr. Agricultural Specialist AFTS4 Emmanuel Sene Rural Development Specialist AFTS4 Daniel Moreau Sr. Ag. Research Specialist AFTS4 El Hadj Adama Toure Sr. Agricultural Economist AFTS4 Julien Bandiaky Economist AFC14 Fili Sissoko Sr. Fin. Management spec. AFTFM Osval Romao Fin. Management Specialist A F T F M Edeltraut Gilgan-Hunt Environmental specialist AFTS2 Bourama Diaite Sr. Procurement Specialist AFTPC Demba Balde Social Development Specialist AFTS4 John Virdin Operations Officer AFTS4 Marie-Jeanne Ndiaye Language Program Assistant AFTS4 Anta Tall-Diallo Team Assistant AFC14 Elisabeth Mekonnen Language Program Assistant AFTS4 Sidi Mohamed Boubacar Lead Counsel LEGAF Renke Desclaux Finance Officer LOAG2 Benjamin Burckhart Consultant Jaques Strebelle Consultant (FAO-IC)

Bank funds expended to date on project preparation: 1. Bank resources: a PPF has been approved for US$600,000 (about US$lOO,OOO disbursed to date) 2. Trust funds: a TF PHRD grant has been approved for US$980,000 (about US$450,000 disbursed to date)

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3. Total Allocation: US$150,000 Expended: US$133,000

Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$16,000 2. Estimated annual supervision cost: US$120,000/year

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1.

2.

3.

4.

5.

6.

7.

8.

9.

Annex 12: Documents in the Project File SENEGAL: Agricultural Services & Producers Organizations Project 2

The World Bank - Agricultural Services and Producers Organizations Project, Implementation Completion Report. Draft, December 2005.

Mbaye Mbengue Faye- Programme de services agricoles et d’organisation des producteurs (PSAOP2). Evaluation de l’impact environnemental et cadre de gestion environnementale et sociale. Rapport final, Octobre 2005.

L o i Agro-Sylvo-Pastorale no 2004-16 du 4 juin 2004, Ministbre de 1’Agriculture et de 1’Hydraulique Direction de l ’halyse, de la Prevision et des Statistiques. Dakar

Analyse du potentiel Scientifique et Plan d’orientations Stratkgiques et Techniques de la Recherche Agricole et Agroalimentaire au Senegal ---- D C N N Consultants-FNRAA. AoGt 2002. Dakar

Publications I S M de 1999 ‘2004 ---- I S R A Direction Scientifique. M a i 2005. Dakar

Evolution des Subventions i la recherche de 200 1 i 2004. I S R A Dakar.

Plan Pluriannuel de Financement 2004-2007 ---- I S R A . M a i 2004 Dakar

Abdoullaye A. Fall, Analyse Economique et Financibre du PSAOP2, March 2006, Dakar.

Marie-Rose Mercoiret, Enhancing the Capacities o f Rural Producers’ Organizations, the case o f PSAOP in Senegal, CIRAD, 2003

10. Alain de Janvry, Elizabeth Saudoulet, Organisations Paysanne et Dkveloppement Rural au Senkgal, September 2003, World Bank

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Annex 13: Statement of Loans and Credits SENEGAL: Agricultural Services & Producers Organizations Project 2

Difference between expected and actual

disbursements Original Amount in US$ Millions

PO58367 2005

PO69207 2005

PO70530 2005 PO73477 2005

PO85708 2005

PO86480 2005

PO80013 2004

PO51609 2003

PO74059 2002

PO70541 2002

PO41566 2001

PO41528 2001

PO57996 2000

PO55472 2000

PO47319 2000

PO02366 1999

PO02367 1999

0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00

5.00

0.00

5.00

0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00 0.00

0.34

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00

0.00 0.00

0.00

0.00 0.00 0.00

4.70

17.54

4.81

15.14

26.94

8.63

34.91

39.78 16.58

2.40

4.94

66.47

2.16

46.87

0.49

22.12

1.44

0.83 0.00

1.86 0.00

1.07 0.00 1.33 0.00 5.25 0.00 0.20 0.00

28.15 0.00 9.14 0.00

3.76 0.00

-0.46 0.00 1.02 -4.30

16.49 0.00 1.07 1.07

42.19 0.00

-0.97 0.00 20.42 1.83

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

SN-GEF Intn Marine Cstl Res Mmnt 0.00 0.00 - - (FY05) SN-Casamance Emerg Reconstr Supt (FY05) SN-GEF Rural Areas Elec SNC (FY05)

SN-Elec Sec Effi. Enhanc.Phase 1 APL-I

SN-Elec. Serv. for Rural Areas (FY05) SN-GIRMAC S I L (FY05)

SN-Priv Sec Adj Crdt (FY04) SN-Priv Inv Promotion S I L (FY03)

SN-HIV/AIDS Prevent & Control APL (FY02) SN-Nurition Enhancement Prgm (FY02)

SN-Soc Dev Fund APL (FYOI)

SN-Long Term Water Sec S I L (FYOI)

SN-Natl Rural Infrastr (FYOO)

SN-Urb Mobility Improvement APL (FYOO) SN-Quality Edu For Al l (FYOO)

SN-Transp S I L 2 (FY99)

0.00 20.00

0.00 0.00 0.00 15.70

0.00 29.90

0.00 10.00

0.00 45.00

0.00 46.00

0.00 30.00

0.00 14.70

0.00 30.00

0.00 125.00 0.00 28.50

0.00 70.00

0.00 50.00

0.00 90.00 SN-Agr Svcs &Prod Orgs APL 1 (FY99) 0.00 27.40 0.27 0.38

Total: 0.00 632.20 0.00 10.00 0.34 315.92 131.62 - 1.02

SENEGAL STATEMENT OF IFCs

Held and Disbursed Portfolio In Millions o f U S Dollars

Committed

IFC

F Y Approval Company Loan Equity Quasi

1996 AEF SERT 0.00 0.15 0.00

1997 . AEFSERT 0.00 0.02 0.00

1980 BHS 0.00 0.46 0.00

1999 Ciments du Sahel 12.30 2.26 3.01

1997 GTI Dakar 10.84 1.67 0.00

1998 GTI Dakar 2.13 0.00 0.00

2001 SEF Royal Saly 1.36 0.00 0.00

Disbursed

IFC

Partic. Loan Equity Quasi Partic.

0.00 0.00 0.15 0.00 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.46 0.00 0.00 0.00 12.30 2.26 3.01 0.00 9.68 8.02 1.51 0.00 9.68 0.00 2.10 0.00 0.00 0.00 0.00 1.36 0.00 0.00 0.00

Total portfolio: 26.63 4.56 3.01 9.68 23.78 4.40 3.01 9.68

- 107-

FY Approval Company

Approvals Pending Commitment

Loan Equity Quasi Partic.

2005 Kounoune IPP 0 02 0.00 0.00 0.00

Total pending commitment: 0.02 0.00 0.00 0.00

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Annex 14: Country at a Glance SENEGAL: Agricultural Services & Producers Organizations Project 2

POVERTY and S O C I A L

2004 Population, mid-year (millions) GNI percapita (Atlasmethod, US$) GNI (Atlas method, US$ billions)

Average annual g rowth , 1998-04

Population (%) Labor force (%)

Senegal

D.5 670 7.0

2.4 2.6

M o s t recent e s t i m a t e ( la tes t year available, 1998.04)

Poverty (%of population belownafionalpo veriyline) Urban population (%o f totalpopulation) Life expectancyat birth (years) Infant mortality(per 1,OOOlive birihs) Child mainutrit io n (% o f children under 5) Access to an improvedwater source (%ofpopulation) Literacy (%of population age ffi+) Gross primaryenroliment (%of school-age population)

Male Female

50 52 78 23 72 39 80 83 77

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1884 1994

GDP (US$ billions) 2.3 3.6

Exports of goods and services/GDP 36.6 34.9 Gross domestic savings/GDP 0.7 116 Gross national savings/GDP -5.0 I3.5

Gross capital formationiGDP P.8 8.5

Current account balance/GDP Interest paymentsiGDP Total debtiGDP Total debt servicelexports Present value of debt/GDP Present value o f debt/exports

-7.9 -5.0 2.5 17

94.3 tlO.8 6.6 6 . 7

1984-94 1994-04 2003 (average annualgrowth) GDP 2.1 5.0 6.5 GDP DercaDita -0.6 2.3 4.0

Sub. Saharan Low-

Afr ica i n c o m e

7 8 600 432

2.2 to

31 46 0 1

58 65 95 a2 86

2003

6.5 20.1 28.4 8.0 6.3

-6.0 11

68.1 6.3

29.5 65.5

2,336 5 D

1184

18 2.1

31 58 79 44 75 61 94 0 1 88

2004

7.7 21.0

D.0 6.8

-6.5

27.8

2004 2004-08

6.0 5.9 3.8 3.9

Life expectancy

~ T GNI

capita

Gross primary

enrollment

L

Access to improvedwatersource

-Senegal Lo w-Income group

Trade

1 Indebtedness

-Senegal -- Low-Income orom

1 - , . . # . e . . '

STRUCTURE o f the ECONOMY

(%of GDP) Agriculture Industry

Services Manufacturing

Household final consumption expenditure General gov't final consumption expenditure Imports of goods and services

(average annualgrowth) Agriculture industry

Services

Household final consumption expenditure General gov't final consumption expenditure Gross capital formation Imports of goods and services

Manufacturing

1984 1994

6.9 18.6 7 .0 210 a.1 14.4

66.0 60.2

80.8 75.4 8.5 Q.6

48.7 416

1984-94 1994-04

1.7 2.4 3.0 6.9 2.7 6.0 19 5.2

1.2 12 0.9 8.3 4.2 D.4 0.0 15

2003

6,8 212 Q.8

62.0

77.4 14.6

40.5

2003

8.2 4.6 0.3 4.1

2.7 8.3 8.4 -16

2004

7.0 21.2 P.6 61.8

75.7 14.3

38.8

2004

8.4 6.9 5.9 5 .O

4.1 4.3 a.4 2.9

Growth o f cap i ta l and GDP (Oh)

45 T I F I

I 1.1 99 00 01 02 03 04

-GCF -GDP

Growth o f exports and impor ts (%)

2o T 10

0

I -Exports -inports

- 109 -

Seneaal P R I C E S a n d G O V E R N M E N T F I N A N C E

D o m e s t i c p r i c e s (%change)

1984

Consumer prices P.3 Implicit GDP deflator P.6

G o v e r n m e n t f i n a n c e (%of GDP, includes current grants) Current revenue Current budget balance Overall surplusldeflcit

T R A D E

(US$ millions) Total exports (fob)

Groundnut products phosphates Manufactures

Total imports (cif) Food Fuel and energy Capital goods

Export price index (2000=WO) Import price index (2000=WO) Terms of trade (20OO=WO)

B A L A N C E o f P A Y M E N T S

(US$ millions) Exports o f goods and Services Imports o f goods and services Resource balance

Net income Net current transfers

8.1 -1.0 -5.0

1984

598 P 5 56 181

93 1 252 258 0 8

73 58

a 5

1984

908 1,83 -285

-127 -7

Current account balance -4 18

Financing items (net) Changes in net reserves

4 6 2

M e m o : 13

Conversion rate (DEC, iocal/US$) 437.0 ReSeNeS including gold (US$ millions)

E X T E R N A L D E B T a n d RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

1984

2,203 IBRD 76 IDA 8 9

Total debt service IBRD IDA

6 2 0 3

Compositionof net resourceflows Official grants P 6 Official creditors 6 7 Private creditors -6 Foreign direct investment (net inflows) 29 Portfolio equity(net inflows) 0

World Bank program Commitments- Disbursements Principal repayments

34 29 6

1994

32.0 27.8

18.3 2.6

-2.7

1994

791 89 1l7

201 I 6 1 293 142 154

0 7 0 0 0 7

1994

1,272 15 15 -243

-142 204

-181

256 -75

8 0 555.2

1994

3.673 44

I005

234 15 D

476 7 -9 67

1

32 54 6

2003

0.0 0.9

8 . 6 5.5

-3.0

2 0 0 3

1,332 61

6 6 304

2,247 4 0 387 325

99 93 0 7

2003

2,07 3, lD -973

-l74 629

-5 TI

526 -9

832 5812

2 0 0 3

4,48 0

1,806

244 0

24

156 0 4

1 78 0

46 0 7

13

2004

0.6 1.4

8.4 5.6

-4.4

2 0 0 4

1,580 72

205 343

2,574 473 421 378

99 89 1P

2 0 0 4

2,159 3,117 -969

-139 628

-500

321 l79

855 528.3

2 0 0 4

In f l a t i on (X) I 5

0

5

.10

-15

-20

--GDPdeflator -CPI

Expor t a n d i m p o r t l e v e l s (US$ mi l l . )

3,000

O4 I 98 99 00 01 02 03

Exports lrrports

Current a c c o u n t ba lance t o G D P (%)

i o 1

p o r n p o s i t i o n o f 2 0 0 3 deb t (US$ mill.)

I G W

F 64 I

A - I E R D E - Bilateral E . IDA D . Other mltilateral F - Rivate C-IMF G- Short-ter

- 110-

Annex 15: Maps

SENEGAL: Agricultural Services & Producers Organizations Project 2

- 111 -

This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other information shownon this map do not imply, on the part of The World Bank Group, anyjudgment on the legal status of any territory, or any endorsement oracceptance of such boundaries.

To Bissau

To Kayes

To Nouakchott

F A T I C K

K A O L A C K

L O U I S

L O U G A

D I O U R B E LCAP-VERT

ZIGUINCHORK O L D A

T A M B A C O U N D A

T H I È S

Lac de Guier

S A I N T -

NdièbèneGandiol

Kébémèr

Sagata

Mékhé

Pir GourèyTivaouane

Ndindi

DarouMousti

Mbaké

Dara Linguère

Mpal

Niomré

RichardToll

Dagana

Galoya

HaéréLao

Podor

Thilogne

Mbeuleukhé

Gassane

Tièl

Vélingara

NdiobèneToubéré

Bafal

Fété Bowé

Payar

Ranérou

Kolobane

Touba

Bambey

Guinguinéo

MbarKidira

Goudiri

Kotiari NaoudéKoussanar

Koumpentoum

Lour-Escale

Bakel

MatamOuro Sogui

Lagbar

Koungheul

Mbour

Sébikhoutane

Joal-Fadiout

Rufisque

SokoneNdofane

Nioro du Rip

Kaffrine

Sédhiou

Marsassoum

Vélingara MédinaGounas

Maka

Diouloulou

Bignona

Siménti

Kédougou

Saraya

Dalafi

Khossanto

Missira

Gamon

Mako

Nafadji

Pikine

Oussouye

Foundiougne

Gossas

Saint-Louis

Louga

Thiès

Diourbel

KaolackFatick

DAKAR

Tambacounda

Kolda

Ziguinchor

BANJUL

IBRD 29989

APRIL 1999

Senegal R.

Vallée

du

Ferlo

Saloum

Gambia R.

Casamance

Gambia R.

Saloum

Vallée

duFerloVallée

du Mboun Senegal R.

0 50 100

KILOMETERS

M A U R I T A N I ASENEGAL

AGRICULTURAL SERVICESAND

PRODUCER ORGANIZATIONSPROGRAM

G U I N E A - B I S S A U

G U I N E A

M A L I

T H EG A M B I A

FormerSpanishSahara

ALGERIA

MAURITANIA

M A L I

NIGER

GUINEA

SENEGALDakar

NIG

ERIA

BENINTOG

O

GHANACÔTE D'IVOIRE

GUINEA-BISSAU

THEGAMBIA

Atl

an

tic

O

ce

an

BURKINAFASO

N I O K O L O K O B AN AT I O N A L PA R K

PRIMARY ROADS

SECONDARY ROADS

SELECTED CITIES AND TOWNS

DEPARTMENT CAPITALS

REGION CAPITALS

NATIONAL CAPITALS

DEPARTMENT BOUNDARIES

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES

ROUTES PRINCIPALES

ROUTES SECONDAIRES

CITES ET VILLES CHOISIES

CAPITALES DES DEPARTEMENTS

CAPITALES DES REGIONS

CAPITALES NATIONALE

LIMITES DES DEPARTEMENTS

LIMITES DES REGIONS

LIMITES INTERNATIONALES

A t l a n t i c

O c e a n

17° 16° 15° 14° 13° 12°

16°

15°

14°

13°

12°

15°

14°

13°

12°

17° 16° 15° 14° 12°13°

16°

18°