Report No. 340a-MLI FILE COPYAppraisal of IntegratedRural Development ProjectMaliMay 13, 1974

Agriculture Projects DepartmentWest Africa Regional Office

Not for Public Use

Document of the International Bank for Reconstruction and DevelopmentInternational Development Association

This report was prepared for officiai use only by the Bank Group. Rt may not be published,quoted or cited without Bank Croup authorization. The Bank Croup dors not dacept responsibilityfor the accuracy or completeness of the report.

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CURRENCY EQUIVALENTS

US$ 1 = MF 500MF 100 US$ 0.200

WEIGHTS AND MEASURES

1 metric ton 0.984 long ton1 kilometre = 0.6215 mile1 hectare 5 2.47 acres

ABBREVIATIONS

AF Alphabétisation FonctionnelleEDM Banque de Développement du MaliBDPA Bureau pour le Développement de la Production AgricoleDGP Direction Générale de la ProductionDNS Direction Nationale de la SantéDNTP Direction Nationale des Travaux PublicsFAC Fonds dtAide et de CoopérationFED Fonds Européen de DéveloppementGERDAT Groupement d'Etudes et de Recherches pour le Développement

de l'Agronomie TropicaleICRISAT International Crops Research Institute for the Semi Arid Tropics

(Hyderabad, India)1ER Institut d'Economie RuraleIFAC Institut Français de Recherches Fruitières OutremerIRAT Institut de Recherches Agronomiques Tropicales et des Cultures

-VivrièresIROT Institut de Recherches du Coton et des Textiles ExotiquesIRHO Institut de Recherches pour les Huiles et OléagineuxOA Opèration ArachideOACV Op'ération Arachide et Cultures VivrièresOC Opération CotonOD Opération de DéveloppementOPAM Office des Produits Agricoles du MaliOSRP Office de Surveillance et de Regulation des PrixRCFM Regie des Chemins de Fer du MaliSCAER Société de Crédit Agricole et d'Equipement RuralSEPOM Société d'Exploitation des Produits Oléagineux du MaliSoMIEX Société Malienne d'Import ExportSTR Service des Travaux Routiers

FISCAL YEAR

January 1 to December 31

MALI

INTEGRATED RURAL DEVELOP`E NT PROJECT

TABLE OF CONTENTS

Page No.

SUMTARY AND CONCLUSIONS .. ..................... i- v

I. INTRODIJCTION ........ ...................... ........ 1

II. BACKGROUND ......................... *....... 1

A. General ................ ......................... B. The Agricultural Sector ..................... 2C. D)evelopment Options . ....... . .. ....... . . . . . 4',). Institutions .................................... 4E. Agricultural Research . ................. 5

III. T-IE PROJECT AREA ....................... ....... 6

A. General ... ................................ .. 6B. Operation Arachide ................... ....... 8

IV. TIE PROJECT . ........................ 9

A. Description ....... ................... .... 9B. Detailed Features . ......... o.................. . 10C. Credit Arrangements and Supply of Inputs ..... 12

V. COST ESTIMATES AND FINANCING ..................... 14

A. Project Costs . .............. ..... .......... 14B. Financial Arrangements ...................... 16C. Procurement and Disbursement ...... .... 19D. Project Accounts and Audits ................. 20

VI. ORGANIZATION AND MlANAGEMFNT - STAFFING AND TRAINING 21

A. Organization and Management. .. . 21B. Staffing and Training .... ........... 23

VIl. YIELDS AND PRODUCTION, MARKETING, FARMERS' BENEFITSAND GOVERNMENT REVENUES . .................. 24

A. Yields

TABLE OF CONTENTS (Cont'd)

A. Yields and Production .................. ..... 24B. Marketing and Prices .... ................... 25C. Farmers' Benefits ........................... 27

n. Impact of Project on Government Revenuesand Expenditures ...... .................... 28

VIII. BENEFITS AND JUSTIFICATIONS ............. ......... 29

lx. AGREEMENTS REACHED AND RECOMMENDATIONS ............ 30

ANNEXES

1. Agriculture in %`ali

Table 1 Production and Marketing of Main Crops (1967 to 1972)

Table 2 Official Producer Prices for Principal CommoditiesTable 3 Agriculture Sector Contribution to ExportsTable 4 Volume of Grain Imports (1969 to 1973)

Table 5 Groundnut Production and Marketing (1953 to 1973)

2. Operation Arachide

Table 1 Area, Production, Yields, MarketingTable 2 InputsTable 3 Financing

3. Cropping Pattern, Inputs, Yields and Production

Table 1 Cultivation ScheduleTable 2 Labor Requirements for Groundnut and Cereal Production

Table 3 Area of Groundnuts Grown under OACV Supervision by Sectors

Table 4 Area under Groundnuts: Diffusion of Modern Techniques

Table 5 Estimated Production and Yield of GroundnutsTable 6 Incremental Groundnut Production Induced Directly by the Project

Table 7 Area of Sorghum and Millet Grown under OACV SupervisionTable 8 Area under Sorghum and Millet: Diffusion of Modern TechniquesTable 9 Estimated Production and Yield of Sorghum and MilletTable 10 Incremental Sorghum and Millet Production Induced Directly

by the Project

ANNEXES (Cont'd)

4. Improvement of Rural Tracks

Table 1 Length of Roads and Tracks in the Western and Central SectorsTable 2 Roads Classified in 1972Table 3 Improvement of Feedier Roads 1974/77 ProgramTable 4 Tracks for Improvements and Proposed Third Highway ProjectTable 5 Roads and Tracks Technical CharacteristicsTable 6 Scope of WorksTable 7 Analysis of Trucking Costs in Project Zone (for 7 t lorry)

5. Functional Literacy6. Research Programs7. Medical Assistance~8. Veterinary Assistance9. Evaluation Unit10. Groundnut Seed Production11. Agricultural Inputs and Credit

Table 1 Cost Prices and Sales Prices of Farm InputsTable 2 Comparative Table of Loans and RepaymentsTable 3 SCAER Condensed Balance SheetsTable 4 SCAER Condensed Operating and Profit and Loss AccountsTable 5 Farm Implement Requirement, Costs and Medium-Term CreditTable 6 Seasonal Inputs Requirements, Costs and Seasonal CreditTable 7 Sumary of Incremental Farm inputs, Co0ts and Financing

12. Project Costs

Table 1 Project CostsTable 2 Buildings and EquipmentTable 3 VehiclesTable 4 Technical AssistanceTable 5 Local StaffTable 6 Operating ExpensesTable 7 Rural Tracks ImprovementsTable 3 Functional LiteracyTable 9 Agricultural ResearchTable 10 'Iedical AssistanceTable 11 Veterinary Assistancerable 12 Evaluation UnitTable 13 Incremental Farm Inputs Cost and FinancingTable 14 Revolving FundTable 15 ContingenciesTable 16 Import Duties and Taxes

ANNEXES (Cont'd)

13. Financing

Table 1 Financing per IleadingTable 2 Sources of FinancingTable 3 IDA Disbursement

14. Market and Prices for Project Commodities

Table 1 Bareme Arachide (Groundnut Schedule)Table 2 Producer Prices for GroundnutsTable 3 International Prices of Groundnuts, Groundnut Oil and

Groundnut CakeTable 4 Croundnut Economic Farm-gate Price (1973-1980 onwards)Table 5 Destination of Marketed ProductionTable 6 OSRP Groundnut Reserve Account (1969-1972)Table 7 Price and Marketing Structure for Sorghum/Millet -

Domestic Price StructureTable 3 Cereal Producer Price in Mali and Neighboring Countries 1972/73Table 9 Sorghum/Millet - Economiç Farm-gate Price (1973-1978 onvards)

15. Farm Models and Budgets

Table 1 Farm under Manual Cultivation Adopting Improved TechniquesTab;Le 2 Farm under Ox-Powered CultivationTable 3 Cash Flow for Farm under Ox-Drawn Cultivation

16. Impact on Governnent Budget

Table 1 Impact of Project on Consolidated Government FinanceTable 2 Detailed Proceeds from Taxes and Levies on GroundnutsTable 3 Foreign Exchange Benefits

17. Rate of Return Calculation

Table 1 Project Economic Cash FlowTable 2 Economic Cash Flow Calculation - Project BenefitsTable 3 Incremental Farm Labor

CHART Project Organization

MAL'S

1. Project Area2. Rainfall3. On-going and Planned Road Improvement

MIALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Summary and Conclusion

i. Mali has asked IDA to help finance a project under which Government'songoing "Operation Arachide" (OA) would be intensified and extended to newareas. OA is aimed at improving the productivity and incomes of farmers forwhom groundnuts are the main cash crop. The intensified second phase programwould emphasize the application of modern techniques to the cultivation ofMali's principal cereal crops, millet and sorghum as well as58 groundnuts.

ii. The project would be carried out over the five years 1973/74 to1977/78, cover an area of approximately 125,000 km2 and benefit about onemillion of some of the very poorest people in the world. Average per capitaincome in the project area is about US$30.

iii. Mali suffers from several development constraints, the principalof which are:

(a) distance from the sea, the closest sea ports are Dakarand Abidjan, both about 1,200 km from the capital, Bamako;

(b) lack of mineral and other natural resources; and becauseof low and variable rainfall and generally poor soils, aweak agricultural base;

(c) a serious shortage of skilled manpower, both technical andmanagement; and

(d) problems of communications due to the size of the country,and its inadequate road anQ telecommunications systems.

On the other hand, Mali has the advantage of a hardworking population accus-tomed to living under harsh climatic conditions and with a minimum of socialservices.

iv. Serious droughts, more frequently the result of ill-distributed,than of insufficient total rainfall plague the country. Such droughtsaffected Mali adversely in 1968, 1970, 1972 and 1973, as a consequence foodshortages occurred and massive bilateral and international food aid vas re-quired. External aid alone has enabled Mali to withstand the vagaries ofthe weather in recent years, and it is essential that the country's productivecapacity be strengthened. This would be the main objective of the proposedproject.

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v. Agriculture, including livestock and fisheries, is the mainstayof Mali's economy, and the sector accounts for nearly half the country'sGDP - 43% lin 1972, and for virtually all foreign exchange earnings, US$54million equivalent in 1972. Rural activities provide a livelihood for about85% of total population and the vast majority of farms are less than 5 ha.About 85% of the 2 million ha under cultivation is devoted to food crops,principally millet and sorghum, and iin the river valleys rice. Cotton andgroundnuts are the principal cash crops, and in a normal year extend to about90,000 ha and 250,000 ha respectively.

vi. In the long run Mali could develop a strong agricultural basethrough using the large surface water resources of the Senegal and NigerRivers systems for intensive irrigated agrizulture. This however will bevery expensive, and even if fînance became available the rate at which suchdevelopment could be introduced would be slow. Thus in the meantime Govern-ment lis concentrating on improving rainfed farming which sustains the greatbulk of Mali's people.

vii. The project, renamed "Operation Arachide et Cultures Vivrieres"(OACV) to reflect better its expanded responsibilities, would be managed bythe current management team which is satisfactory and would obtain technicalassistance from "Bureau pour le Developpement de la Production Agricole"(BDPA). BDPA, a French consulting firm, has supplied such assistance toOA since the latter's inception in 1967. The results of this collaborationhave been good and fully to Government's satisfaction. Principal componentsof the proposed project would be:

(a) intensifying OA activities in areas now served by theprogram;

(b) extending OA services into new areas;

(c) supplying farm inputs and equipment, on cash or credit, toparticipating farmers;

(d) supplying equipment on credit to selected blacksmiths inthe project area;

(e) improving the 1,500 km of tracks in the project area;

(f) expanding an ongoing functional literacy progran;

(g) implementing a program of agricultural research to supple-ment the current national program;

(h) improving medical facilities in the project area;

(i) limp-oving veterinary services lin the project area; and

(j) establishlng a project evaluation unit.

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viii. The proposed IDA credit of US$8 million would cover 42% of totalproject costs which are estimated at US$18.9 million, including import dutiesand taxes totalling US$1.3 million, and 75% of the foreign exchange componentof project costs which is estimated at US$10.6 million. Remaining coasts,estimated at US$10.9 million, would be covered by a FAC grant of US$2.5 mil-lion, Government contributions totalling US$4.3 million and farmers' contribu-tions of US$4.1 million. Thg IDA credit would be provided by Government asa grant to OACV to finance technical assistance, operating costs, buildings,seeds, improvement of rural tracks, functional literacy, research and medicaland veterinary assistance. U';$4.0 million would be held as a contingencyreserve.

ix. Project vehicles and graders amounting to US$1.5 million would ,âeprocured on the basis of international competitive bidding in accordancewith IDA guidelines. Equipment and furniture valued at US$0.4 million andfor which there is a satisfactory degree of local competition, would be pro-cured by local competitive bidding. Contracts for the construction of projectoffices, houses, stores and garages evaluated at about US$1.9 million are notsuitable for international competitive bidding due to the dispersed locationof the work and the small size of individual contracts, and would be awardedunder local competitive bidding. A satisfactory degree of competition betweenexperienced local contractors could be expected. In appraisal of bids,domestic civil works contractors would be allowed a preference margin of 7.5%.Farm inputs (fertilizers, agrocides) and implements for draft animals amount-ing to US$3.5 million, to be financed by Government and farmers, would beprocured by SCAER as part of the country's total requirements. SCAER purchaseprocedure, which is based on satisfactory competitive bidding, would continueunder the project. An informal understanding was reached that IDA would beconsulted on the preparation and publicity of tender documents and the evalu-ation of bids for the SCAER procurement. Seeds required by the project cost-ing an estimated US$1.3 million would be locally produced and distributedunder OACV supervision. Cart bodies valued at US$319,000 would be suppliedor purchased locally by farmers. Technical assistance and consultant servicesto the project are expected to cost US$2.5 million; it is proposed that acontract should be made with BDPA, which has successfully assisted the on-going project, to supply experts required by OACV costing an estimatedUS$2 million. Similarly, GERDAT, which is currently assisting Mali in agri-cultural research, would supply the experts required at an estimated costof US$150,000. Internationally recruited staff and consultants at a cost ofabout US$390,000 would be recruited under procedures acceptable to IDA toevaluate the functional literacy literacy program, to provide accountancyassistance to OACV, to head the evaluation unit and to carry out a study oncereal producer prices and marketing arrangements. A total of US$3.5 millionwould cover Malian staff and operating expenses, credit for blacksmiths'equipment, motorcycles and bicycles for the extension staff. The rural trackimprovement and maintenance program would be carried out by force account,which is the only practical means for timely and proper execution of thisprogram. An amount of US$4.0 milliqp would be unallocated.

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x. The proceeds of the IDA credit would be disbursed during the fouryear period 1974/75 through 1977/78 to cover:

(a) 100% of foreign expenditures or 66% of total expenditures forvehicles and graders imported for the project - US$0.8 million.

(b) 18% of the incremental cost of seeds - US$0.2 million.

(c) 80% of total expenditures for buildings - US$1.4 million.

(d) 85% for the salaries of internationally recruited staff andconsultants for project management - US$1.7 million.

(e) 100% of foreign expenditures for a proposed cereal marketingstudy and accountancy services - US$0.1 million.

(f) 75% of incremental expenditures for local staff - US$0.8 million.

(g) 80% of incremental operating costs of Project - US$1.6 million.

US$1.4 million of the credit would be unallocated to cover contingencies.Except for local staff, operating costs and seeds, allocations for disburse-

ment would be supported by contracts, shipping and other appropriate documents.Applications for reimbursement of local and related co0ts would be supported

by certificates issued by the project manager.

Xi. The principal direct benefits of the project would be induced in-cremental production of cereals and groundnuts. By maturity of the project,eight years after its inception, such production is estimated at 65,000 tonsof groundnuts and 39,000 tons of cereals annually, and to have a net foreignexchange earnings or savings value of MF 5.5 billion (US$11.8 million). Theeconomie rate of return from investment in the project is estimated at 91%over a project lîfe of 15 years. This high return is partly attributable to

the importance of previous and ongoing investments which are sunk costs tothe project and the high degree of technical proficiency of farmers resultingfrom previous extension efforts. Also instrumental are the relatively highprojected groundnut and sorghum long-term international prices. The sensitiv-ity of the return to such factors and other variables has been tested. Thereturn shows a relatively high sensitivity to changes in prices, but it canwithstand substantial and adverse deviations from appraisal estimates and

still remain acceptable.

xii. At full development, some 107,000 farming families, involvîng aboutone million people in all, would participate in the project compared to 52,000

farming families and 490,000 people served by OA in 1972/73. Total incrementalcash income from groundnuts and cereals, assuming all are sold, and accruing to

participating families would a»ount to about MF 2.5 billion (US$5 million)annually. The great differences in levels of technology adopted by farmers

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and in the physical and human conditions prevailing in the project area makethe determination of "typical farm bidgets" difficult. Nonetheless It appearsthat the per capita incomes of farn ,'amilies prepared to implement the tech-nical recommendations of OACV would increase between two and threefold.

xiii. Agreements reached and recommendations are in Chapter IX. Theproposed project is suitable for an IDA credit of US$8 million. vZ

MALI

INTEGRATED RURAL DEVELOPMFENT PROJECT

I. INTRODUCTION

1.01 Mali has asked IDA to help finance a project under which Govern-ment's ongoing "Operation Arachide" (OA) wvould be intensified and expandedinto new areas. OA is aimed at improving the productivity and incomes offarmers for whom groundnuts are the main cash crop. The intensified programwould emphasize the application of modern cultivation techniques to milletand sorghum as well as to groundnuts and other crops. The project vould alsoinclude spot improvement of rural tracks, a functional literacy program, im-provement of medical and veterinary services, an agricultural research compo-nent and a project evaluation unit.

1.02 The project would be carried out over the five years 1973/74 through1977/78 and benefit about one million of some of the very poorest people inthe world. Average per capita incomes in the project area are about MF 14,700(US$3C). The proposed project would be the Bank Group's second lending opera-tion for agriculture in Mali. In 1972 IDA made a credit (277 MLI) for theimprovement of irrigated rice production. This project is proceeding satis-factorily.

1.03 The project was identified by the Bank's Permanent Mission in WesternAfrica (PMWA) and prepared by Coverriment assisted by consultants financed bythe French Fonds d'Aide et de Cooperation (FAC). This report is based on thefindings of an appraisal mission that visited Mali during June/July 1973 com-posed of Messrs. M. Huas and F. Agueh (IDA), Mr. J. Doyen, (PMWA), Mr. J.Guilmoto (credit consultant) and Messrs. M. Casse and C. Gassion (FAC).

II. BACKGROUND

A. General

2.01 The Republic of Mali i some 1.2 million km2 in area and has apopulation of about 5.2 million. It is landlocked, and Dakar in Senegal andAbidjan in Ivory Coast are its principal outlets, both road and rail, to thesea. The northern half of the country ls almost uninhabited. In the south,rainfall is better, but only 25% of the country receives more than the 550 maper year needed for growing sorghum and millet, the staple foods. With theexception of the Niger river valley, where irrigation and flood recessioncropping is possible, and the southernmost region where annual rainfall ex-ceeds 1,300 mm, most of the 25% of the country is suitable only for fast-growing,drought-tolerant crops such as millet, sorghum, cotton and groundnuts. Witha per capita GDP of about US$70, Mali 'is one of the poorest countries in Africaand one of the world's 25 "least developed" countries, s0 identîfîed by theUnited Nations General Assembly.

2.02 The country suffers from several development constraints, theprincipal of which are: (i) distance from the sea, the closest sea portsare Dakar and Abidjan, both about 1,200 km from Bamako the capital; (fi) lackof mineral and other natural resources, and because of low and variable rain-fall and generally poor soils, a weak agricultural base; (iii) a serious short-age of skilled manpower, both technical and management; and (iv) problems ofcommunications due to the size of the country, and its inadequate road andtelecommunications systems.

On the other hand, Mali has a hardworking population accustomed to livingunder harsh climatic conditions and with an absolute minimum of social services.

2.03 Serious droughts, frequently the result of ill-distributed than ofinsufficient rainfall, seriously affected Mali in 1968, 1970, 1972 and 1973.As a consequence, food shortages have occurred and in the north many animalsand some human lives have been lost. Most of the remaining population isundernourished and consequently, in poor health. Massive bilateral and inter-national food aid alone has enabled Mali to withstand the vagaries of theweather in recent years, and it is e:3sential that the country's productivecapacity be rehabilitated and strengthened; this would be the main objectiveof the project described in this report. On November 13, 1973 IDA approveda drought relief fund project under which Mali receîved a credit of US$2.5million to finance activities concerned principally with: (1) constructionand rehabilitation of small-scale irrigation schemes; (ii) purchase of equip-ment and supplies for the veterinary services; and (iii) the equipment of wellconstruction and repair teams.

B. The Agricultural Sector

2.04 Agriculture, including livestock and fisheries is the mainstay ofMali's economy, and accounts for nearly half the country's GDP, 43% in 1972;and for virtually all foreign exchange earnings, US$54 million equivalent in1972. Rural activities provide a livelihood for about 85% of total population.earm sîzes vary greatly but generally 60 to 70% of holdings are less than 4 ha.About 35% of the 2 million hectares under cultivation are devoted to food crops,principally millet and sorghum, and in the river valleys rice. Cotton andgroundnuts are the principal cash crops, and in a normal year about 90,000 haand 250,000 ha respectively are grown.

2.05 In recent years performance of the sector has been determinedby fluctuations in weather conditions. The main feature, however, has been animbalance between a rapid development of production for export, and the signif-icant decline in food crop production. Thus despite adverse weather, produc-tion of seed cotton rose from 39,000 tons in 1967 to 74,000 tons in 1971, andthat of undecorticated groundnuts from 81,000 tons to 152,000 tons (see Annex1). Both cotton and groundnuts have benefited from well coordinated programscarried out by adequately staffed and financed "Operations de Developpement"(OD), see para 2.11, which have supplied extension assistance and modern in-puts; efficient marketing channels have been set up and producer pricesestablished which have given good incentives to farmers.

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2.06 In contrast all evidence points to a decline in foodcrop;production.Millet and sorghum production peaked in 1967 and since then has declinedsteadily, the average for the period 1968 - 1972 being 600,000 tons annually.Foodstuffs handled by official marketing channels decreased sharply in thesame period, from 60,000 tons in 1967 to an annual average of 15,000 tons.Rice production also fluctuated but showed a slightly upward trend, probablyas a consequence of substantial investment in programs such as the IDA financedMopti rice project. Production increased from 172,000 tons in 1967 to 198,000tons in 1971.

2.07 The major constraints to increasing cereal production probably arethe marketing and pricing mechanisms. The official producer price for millet/sorghum of MF 20/kg is far too low relative to actual prices for cereals inunofficial trade, see para 7.08, the prices paid to producers in neighboringcountries, and producer prices for export crops in Mali. This and ineffectualbut restrictive Government marketing controls undoubtedly have seriously hinderedthe expansion of cereal and other food crop production. The following table givesgives an indication of the return per hectare of the principal crops grown inMali under traditional methods.

kg/ha MF/kg /1 Revenue Seeds and Return /2per ha tools per haMF MF MF

Millet/sorghum 600 35 21,000 500 20,500

Rice 700 25 17,500 500 17,000

Groundnut 500 30 15,000 500 14,500

Cotton 400 50 20,000 500 19,500

Improved cultural methods under the supervision of extension service wouldresult in increased returns per hectare as follows MF 17,500 (150%) formillet/sorghum, MF 34,500 (200%) for rice, MF 29,500 (200%) for groundnut andMF 44,500 (225%) for cotton.

/1 Government fixed prices except for millet/sorghum which takes intoaccount prices available in unofficial trade.

/2 Before labor costs.

C. Development Options

2.08 The shortage in the supply of cereals and consequent large importe,have convinced Covernment of the need to increase domestic food production.Governnent has now set an objective of attaining self-sufficiency in cerealsby 1978/79. This will require increasing millet, sorghum and maize productionbv 200,000 tons and paddy output by 100,000 tons. To achieve this, Governiaentplans to (i) concentrate on improving food crop production within the frameof existing "Operations de Developpement"; (ii) create "Operations de Develop-pemént" for millet and sorghum production; these will be difficult to implementin t:he absence of improved high-yielding varieties acceptable to the local taste.Ultimately, the success of Government's plan to expand food production dependslargely on its ability to provide adequate financial incentives to producersand efficient marketing services. The proposed project would help achievesome of the Governnent's objectives.

2.09 Other Government priorities are (i) rehabilitation and expansion oflivestock and inland fishing industries severely damaged by recent droughts;(ii) exploitation of Mali's substantial water resources mainly the Senegal andNiger rivers systems for intensive irrigated agriculture; this however, willbe very expensive and if finance became available, the rate at which suchdevelopment could be introduced would be slow; and (iii) improving value addedthrough agricultural processing. Studies and projects preparation in theseE;ectors are underway within the framework of the next five year plan which isexpected to be completed early in 1974.

D. Institutions

2.10 MInistry of Production. Most official agricultural activity i8managed and controlled by the Ministry of Production. The Ministry'sDirection Generale de la Production (DGP) controls the so-called "Operationsde Developpement" (OD) through its Service de l'Agriculture to which themanagers of OD report directly. The Institut d'Economie Rurale (IER), hasresponsibility for planning and preparing development projecte and programs.IER also coordinates and controls agricultural research, Governnent-ownedfarms, and agricultural education.

2.11 Operations de Developpement. (OD) A number of national or regionaldevelopment programs have been initiated during the past eight years to in-crease agricultural production. The OD are administrative entities with ahigh degree of management and financial autonomy. The OD are concerned essen-tially with a single cash crop such as groundnuts, cotton, rice, tobacco, andfruit, but subsequently usually diversify to foodcrops, grown traditionallyby the farmer. There are now 16 OU which are all organized on the same patternand typically provide all support services needed by farmers: inputs; credit;training for staff and farmers; crop purchase and collection. By and largethe OD have been successful.

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2.12 Societe de Credit Agricole et d'Equipement Rural (SCARR). SCAERis controlled by the Ministry of Finance and Trade, and i an autonorousstate company. SCAER supplies farm equipment and inputs on credit or cash.SCAER financial resources are its capital - all provided by Government-theproceeds of specific levies on cotton and groundnuts purchased by the OD; 1/operational revenues, and grants from aid agencies. SCAER benefits fromrediscounting facilities provided by the Central Bank. SCAER provides creditonly to farmers partlcipating in an OD, other farmers must purchase lnputs forcash. Further details on SCAER are at para 4.13 to 4.17.

2.13 Societe Malienne d'Import Export (SOMIEX). Also controlled bythe M4inistry of Finance and Trade, SOMIEX has a monopoly for groundnut pur-chasing outside OA areas and monopolies for the export of groundnuts andcotton and import of a wide range of products including sugar and cement.SOMIEX sells imported goods at standard prices over the whole country, andlosses incurred in these transactions are met by profits generated by exportedproducts and by Government subsidies.

2.14 Office des Produits Agricoles du Malî (OPAM). Another Mlnistry ofFinance and Trade-controlled state company, OPAM has a monopoly on the localmarketing of cereals. This may be exercised until OPAM supplies meet thecountry's buffer stock requirements. OPAM has also a monopoly for the importand export of cereals, and fruits. OPAM has generally failed to make cerealsavailable to consumers at reasonable costs because of the unrealistie producerprice policies and poor management and usually OPAM is forced to resort tocoercive measures to obtain its cereal requirements. Currently the major roleof OPAM., given its problem in marshalling domestic supplies, is to distributeforeign relief supplies of cereals.

E. Agricultural Research

2.15 Agricultural research in Mali is monitored hy "Direction de laRecherche" (DGR), a division of IER., but ie carried out primarily by membersof the French Groupement d'Etudes et de Recherches pour le Developpement del'Agronomie tropicale (GERDAT). These are Institut Francais de RecherchesFrnitieres Outremer (IFAC) for fruit and market gardening research; Institutde Recherches du Coton et des Textiles Fxotiques (IRCT) for cotton and otherfibers and Institut de Recherches Agronomiques Tropicales et des CulturesVivrieres (IRAT) and Institut de Recherches pour les Huiles et Oleagineux(IRHO) for food crope and groundnuts respectively.

1f /F/4,OOO per ton of seed cotton and MF 2,000 per ton of undecorticatedgroundnuts.

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2.16 Groundnut research started in Mali in 1962 and has emphasizedvariety improvement work. The long cycle variety 28.206, selected andsuitable for most of the OA area, has yielded up to 2.9 T/ha; and the shortcycle variety 47.10 chosen for the driest parts of the project area has pro-duced yields of 2 T/ha under experimental conditions, Other research programscover selection for rosette virus disease resistance, the use of seed dress-ings, and tbih trials with fertilizers and herbicides. Research on millet andsorghum is directed mainly towards the selection of high-yielding varietieswith a short growing cycle, and a graîn palatable to the taste of the consumer.Yield improvement has been achieved, but varieties with generally acceptablegrain qualities so far have been elusive. Hopefully, the International CropsResearch Institute for the Semi-Arid Tropics (ICRISAT) at Hyderabad in Indiawhich receives financial support from the Bank vill produce results that willbe applicable in Mali.

III. THE PROJECT AREA

A. General

3.01 Location. The project area is situated in the Western part of Maliand covers about 125,000 km2. From an East-West line, Tominian-Sadiola, ap-proximately 850 km in distance and running from the boundary of Upper Voltato that of Senegal, the project area extends 50 to 200 km North and South(see map). The project area represents 10% of the country's total area, and20% of its populated areas, and comprises part of the administrative districtsof Segou, Bamako and Kayes.

3.02 Climate. The project area is situated in the Sudan zone, an eco-climatic zone distinguîshed by a single rainy season extending from March/ApriL to September/October. Annual rainfalls increase from 550 mm in thenorthern part of the project area (Mourdiah) to 1,300 mm at Faraba In theSouth (see rainfall map). Rainfall is very erratic, however, being ill-distributed and unreliable. Tenperatures vary from minima of between 12'Cand 20'C in December/January, to maxima of between 38°C and 43C in April/May.Humîdity is lowest in April--25 to 35%--and highest in November--60 to 82%.Evapotranspiration is high, but in a normal year water i adequate for culti-vation of a wide range of annual crops during the period of May-September.

3.03 Water. The Niger and Senegal rivers and tributaries flow throughthe project area (see map); but there are no permanent surface water sourcesin the northern section of the project area. Ground water is available overthe whole of the project area, and generally can be reached at lesa than 20 min the east, but only at greater depths in the north and west. Traditionalwells are adequate in the wet seasons of years of normal rainfall, but dueto restricted depth, many dry up in the average dry season.

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3.04 Topography, soil and vegetation. Generally fiat ïn the north andeast, moving west and south the project area becomes undulating and then hillyand dissected by winding rivers and streams. No general soil survey has beencarried out in Mali, and knowledge of the project area's soîls is based onlimited surveys and on the extrapolation of data from countries with similarsoli conditions. About half the project area i cultivable, and soîls aremainly leached ferruginous tropical soils of medlum fertility suitable formillet, sorghum and groundnut.

3.05 Population. Population of the project area was estîmated at1,000,000 in 1972, or about 20% of Mali's total population, and to be grow-ing at 3% annually, including migration from less favored zones. About 90%of the work force is employed solely in agriculture. Project farmers areconsidered among the best in the Sudano-Sahelian countries, being hard-workingand receptive to innovations. Health conditions are about average for thedrier parts of West Africa, i.e. better than in the forest areas. Malaria,measles, bilharzia, various intestinal diseases, and tuberculosis are allcommon. Onchocerciasis i present in the area but confined to limited andsparsely populated areas along parts of the Senegal River and its tributaries.None of the project area is included in the internationally financed onchocer-ciasis eradication campaign; but the disease is not considered a constraintteo effective project development.

3.06 Land tenure. The basis of the system is that all unused land belongsto the State, and that individuals establish a right of usufruct by occupyîngand cultivating land. This right is fairly permanent and may be translatedinto official ownership through deliverance of a land title.

3.07 Farming system. Direct exploitation of the land by family laborand the occasional hiring of outside labor, is almost universal in the projectarea. There are some 200,000 farms in total, of which 60 to 75% support andsustain one to 10 persons, 25 to 35% - 11 to 25 persons, and about 5% morethan 25 people. Farm sizes vary greatly but generally 60 to 70% are lessthan 4 ha. The principal crops, in order of importance, are millet, sorghum,groundnut, maize, rice, cotton, cassava and sweet potatoes. The land, oncecleared, is cultivated for 5 to 7 years under a rather irregular 'system ofcrop rotation and then left fallow for 15 to 20 years. There is no land shortageand the only constraint to farm increase would occasionally be availability oflabor. All farmers keep goats, sheep and poultry. There is no trypanosiomasisin the project zone and 50% of the farmers keep cattle.

3.08 Communications. The railway line of "Regie des chemins de fer duMali" (RCFM) linking Koulikoro and Bamako with Kayes and the seaport of Dakarin neighboring Senegal passes through the center and west of the project area.The railway constitutes Mali's main outlet to the sea. The performance of therailwqay has declined recently, but it is hoped that it will improve as a resultof ongoing projects in Senegal and Mali assisted by the Bank Group (Credîts384-MLI and 314-SEN and Loan 835-SEN). The railway would transport inputsimported for the project and all project induced exports. The main road net-work in the project area, comprising about 2,200 km of classified roada

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maintained by Direction Nationale des Travaux Publics (DNTP), is being improvedunder an IDA financed highway project (Credit 383 - US$ 7.7 million), and aFAC grant of MF 931 million. IDA is considering another highway project whichwould extend the existing main road network in the project area. Secondaryroads and tracks, linking villages with one another and with main roada, areadequate in the east of the project zone but are insufficient in extent andgenerally in poor condition in the center and much of the west. Most secondaryroads and tracks are impassable in the wet season. The local authorities res-ponsible for the maintenance of secondary roads and tracks can do little becauseof lack of equipment and funds. The proposed project therefore, includes theimprovement of the worst part of some 1,500 km of tracks.

3.09 Health services. In the project area, which includes Bamako, thereare six hospitals with 1,135 beds, 18 maternity centers with 168 beds, 25hlealth centers with 116 beds and 125 dispensaries. These facilities areinsufficient for the needs of the population, and the health services lackboth funds and qualified staff. The proposed project therefore includes amodest program to improve medical facilities in the remotest parts of theprolect area.

3.10 Education. The literacy rate in the project area, as in Mali as awhole is low at 10%. Literacy among rural people is even lower than thenational average, and the literate farmer is an exception. In order to facil-itate the adoption of new agricultural techniques essential to achieve objec-tives, OA, with the help of Government and outside financing, has started afunctional literacy program, see para 4.07. This program is generally regarded25 useful and an important contribution to the success of "Operation Arachide,"although a detailed evaluation has still to be made.

B. Operation Arachide

3.11 Following a steady decline in groundnut production and exportsafter a record crop of 138,000 tons in 1957, Government tried unsuccessfullyto rehabilitate the groundnut industry. Finally, "Operation Arachide" (OA)was established in June 1967. Fonds d'Aide et de Cooperation (FAC) of Franceprovided part of the financing and "Bureau pour le Developpement de la Produc-tion Agricole" (BDPA), a French company, the technical assistance. OA wasinitially directed to reorganizating groundnut marketing as deficiencies inthis were principal reasons for a loss of farmer interest in groundnuts as acash crop. This effort was supported by a 25% increase in the producer pricefor groundnuts in 1969 and subsequently OA proceeded to promote improved farmingmethods and modern inputs. Additionally, attention was paid to farmers' educa-tion, particularly through the functional literacy program. By the 1972 grow-ing season, 52,000 OA farmers growing 99,000 ha of groundnuts produced 76,500tons of groundnuts, or about 51% of Mali's production. In 1972/73, OA collec-ted 80% of ali's marketed production of the crop. In that same season 50%

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of OA farmers sowed at the prescribed time, 30% at the recommendcd denaity,36% applied fertilizers and 32% used seed dressings on groundnutti and 20% seeddressings on millet and sorghum. In the five years of OA operation the dis-tribution of improved seeds increased 12 fold, yields increased from 500 kg/hain 1968 to 814 kg/ha in 1971, the area under the supervision of OA doubled,and as a result of this, national production increased from 81,000 tons in1967 to 153,000 tons in 1972 (see Annex 2).

3.12 OA achievements have been excellent in spite of adverse weatherconditions. Its farmer support services are efficient and honest, and mostkey positions are now filled by local staff, with some expatriates remainingas advisers. However, OA administration needs improvement, particularly ac-counting and credit control.

IV. THE PROJECT

A. Description

4.01 The project would be a second phase, April 1973 to March 1978, ofOperation Arachide in which OA's activïtieE would be intensified and extendedto new areas. The project is underway and disbursement of the proposed IDAcredit would commence in Project Year 2 (PY 2), see para 5.09. Principalproject activities would be:

(a) intensifying OA activities in areas now served by theprogram, to cover not only groundnuts but all principalfarming activities especially the production of basiccereals and livestock; the name of OA would be changedto "Operation Arachide et Cultures Vivrieres" (OACV) tostress the importance of foodcrop production in theproject;

(b) expanding OACV services into new areas;

(c) supplying farm inputs and equipment, on cash or credit,to participating farmers.

To support, the above, the project would include also:

(d) a rural track improvement program, under which spot repaireand improvement of about 1,500 km of tracks;

(e) a functional literacy program;

(f) a program of agrîcultural research to supplement thecurrent national program;

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(g) improvement of medical facilities in the project area;

(h) improvement of veterinary services in the project area;

(i) supply of equipment on credit to selected backsmiths; and

(j) establishment of a project evaluation unit.

The project would also finance a study on millet and sorghui producer pricesand marketing arrangements (see para. 7.08).

B. Detailed Features

4.02 Agricultural development program. The hectarages of groundnut,millet and sorghum that would be grown under improved techniques within theOACV program and the incremental hectarage attributable directly to the pro-ject are summarized below; details are in Annex 3.

Project Year (PY) Pre- 1 2 3 4 5 6 7 8

(hectares'OOO) 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81rounded

Total on which OACV recommended practices employed:

Groundnut 100 105 138 157 172 182 187 191 191Millet/Sorghum 114 117 234 245 255 264 267 270 270

'ncremeratal hectarage attributable to project:

Groundnut - 1 3 8 16 23 28 32 32Millet/Sorghum - - - 3 7 10 13 17 18

Tlue above estimates assume that even without the project there would begrowth in the use of improved farming techniques.

4.03 Improved agricultural practices. Participating farmers wouldmove through stages of improved practices. The pace at which they woulddo so would depend on their current cultivation methods, receptivenesato advice, and credit worthiness in so far as this would govern theiruse of improved inputs. All participants would grow millet and/or sor-ghum in rotation with groundnuts and would receive technical advice on howto maximise yields. A range of improved practices has been introduced byOA over the past five years and consequently those now recommended have beenfully tested and proven. The recommended practices for groundnuts includeearly and dense sowing, timely weeding, fungicidal seed dressing, fertilizer;application and the use of improved seeds; it is expected at full development

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that at least 70% of farmers would us such seeds. For millet and sorghum,and in the absence of better varieties, timely sowing and weeding, and seeddressing are the basic recommended practices. However, these crops benefitfrom the residual effect of fertilizers applied to groundnut and the betterseedbed produced when using ox-drawn equipment for seedbed preparation. Ox-drawn equipment would be available to qualified project farmers on credit.

4.04 Administrative structure. The project area would be dividedinto nine sectors. Each sector would have two to five sub-sectors, givinga total of 26 sub-sectors and 308 extension agents for the project as a whole.Each extension agent, would supervise an average of about 8 villages wîth some45 farmers per village. For the project overall the ratio of extension workersto farmers would be 1:350.

4.05 Construction program. The program would include the constructionof a headquarters office in Bamako, 27 offices, 29 sheds and 33 houses inBamako, sectors and sub-sectors, 4 workshop-grages, and the extension of OACV'scentral workshop and garage in Bamako. All these buildings would be appro-priately equipped and furnished.

4.06 Rural track improvement program. (Annex 4) The program (Annex 4)carried out over three years starting in PY2, would improve the worse parts ofsome 1,500 km of tracks located in the Western and Central Sectors of theproject area. These tracks are essential for efficient crop collection,general trade and the effective use of extension services, and of medical andveterinary personnel.

4.07 Functional literacy program. (Annex 5) The main objective offunctional literacy (Alphabetisation fonctionelle - AF) programs is to helpindividuals increase their productivity by teaching them the elements ofreading, writing and arithmetic needed for a better understanding of theirwork or business through "out-of school" courses carried out in their nativelanguage. In agriculture an AF program helps farmers to better understandand thus apply more efficiently technical innovations recommended by extensionworkers. Thus, an effective AF program should significantly reinforce theimpact of the extension services. It is estimated that by the end of 1973some 30,000 farmers in OACV areas will have completed AF courses. An evalua-tion of AF programs in Mali in general and within OACV in particular has notbeen made. Thus the-program to be financed under the project would be restric-ted to (a) the evaluation of past and ongoing OA/AF programs and (b) pendingthe conclusion of this evaluation, establishing, staffing and equipping anadditional 500 AF centers in PY1 through PY3. If as expected the evaluationconfirms the effectiveness of AF a further 200 centers would be established.

4.08 Research programs. (Annex 6) The research prograæs would be dividedinto (i) applied studies on diversification of agricultural production in theproject area by the introduction, in longer than traditionally employed rota-tions, of crops such as cotton, maize, cowpeas as well as fodder crops; (ii)

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continuation of work on groundnut for unproving local varieties and adaptingmaterials developed in countries with smilar conditions; pesticides and ferti-lizers trials and (iii) soil surveys.

4.09 Improvement of medical facilities. (Annex 7). This would con-sist of a modest program to improve the activities and quality of exist-ing health services in the rerotest parts of the project area. The pur-posc of the improved facilities would be to detect and combat at theearliest possible stage outbreaks of infectious diseases. These usuallyaffect the project area's population at the beginning of the cultivationseason with the onset of the rains. The program would also provide train--ing for farm families in basic hygiene. Additional staff, dispensaries,vehicles, equipment, medicines and operating costs required for the abovepurposes would be provided under the project.

4.10 Improvement of veterinary services. (Annex 8) Existing vet-erinary services which generally lack funds for equipment and medicineswould be strengthened under the project. Such strengthening is essentialgiven the planned development of ox-drawn cultivation in the project area.In addlition to improved veterinary care for work oxen farmers would betrained in animal husbandry. Additional staff, dips, vehicles, equipment,veterinary medicines (for which farmers would be charged) and operatingcosts would be provided under the project.

4.11 Evaluation unit. (Annex 9) The effects of the proposed pro-ject on the population in OACV areas and on the economy of Mali would besubject to study by an Evaluation Unit that would be established underthe project. This unit would measure among others the impact of theproject on the income and well being of participating farmers and gener-ally assess changes in economic and social indicators. This unit would beautonomous but would be attached to the Institut d'Economie Rurale and workin close cooperation with this institute.

4.12 Environnent and health. The project should have amall butbeneficial impacts on environment and health. Moderate improvementsin health care would result from the medical program and since in areascovered by OACV its agents are empowered to prevent the clearing andcultivation of slopes subject to soil erosion, the dangers of soildegradation would be diminished.

C. Credit Arrangements and Supply of Inputs

4.13 Sale of farm inputs to farmers, either for cash or on credit, isa nationwide monopoly of Societe de Credit Agricole et d'Equipement Rural(SCAER). Since April 1971, SCAER has acted primarily as a central supply.lgency for the "operations," such as OA, which themselves deliver the inputsto farmers, collect cash payments and credit repayments and hold stocks ofinputs on belialf of SCAER (see Annex 11).

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4.14 Credit operations in OA areas have suffered from the followingproblems: (i) inadequate coordination between SCAER and OA maniaging stocksof inputs which led to shortages in some areas and surpluses in others; (ii)a proportion of overdue debts, of about 20% of all loans made to groundnutfarmers since 1968, compared with 2% for cotton farmers in "operation cotton" 1/areas; (iii) continuing controversy between SCAER andl OA over the financingof credit for groundnut seed; OA has retained, over the objections of SCAER,funds from repayment of other loans to finance credit for seed. Recently,however, a "reciprocal service agreement" has been prepared and accepted in

principle by both parties, which defines more clearly the responsibilitiesof OA and SCAER. An improved system of input ordering and stock managementis being implemented, and Government has agreed that more legal pressure may

be put on defaulting farmers. A condition of credit effectiveness would bethat a "reciprocal service agreement" satisfactory to IDA and defining theresponsibilities and obligations of both parties had been signed between OACVand SCAER.

4.15 Under the project, farm inputs and equipment, except seeds wouldcontinue to be procured by SCAER and supplied to farmers, both for cash andon credit, by OACV. The arrangements would be financed by SCAER through re-discounting with the Central Bank. The Banque de Developpement du Mali (BDM)serves as intermediary, and charges 1.5% on top of the Central Bank rediscountrate which currently is 3.5%. Effectively BDM is engaged in an almost risk-less operation and its charge should therefore be reduced. Informal assuranceswere obtained that the terms and conditions under which BDM would financefarm inputs and equipment procured by SCAER for the project should be satis-factory to IDA. Credit for seeds would be the direct responsibility of OACVand be financed from a revolving fund that would be set up by OACV for thispurpose. It was agreed that "Office de Surveillance et de Regulation desPrix" (OSRP) would take over responsibility for all outstanding debts of OA toSCAER in respect of seed (effectively writing off past losses incurred in seeddistribution operations) and that no later than six months after signature ofthe proposed IDA credit responsibility for supplying seed, and credit for seed,would be transferred from SCAER to OACV which is best equipped for this purpose.The project would include provision for strengthening OACV's existing creditorganization and staff, including the finance to upgrade training of creditstaff. All project farmers would be eligible for credit for seasonal inputs.No credit would be provided for draft animal purchase since most farmerspossess such animals and, as at present, applicants for medium-term creditfor farm equipment would be required to prove possession of a pair of oxenand of at least 1.5 ha of destumped land.

1/ Cotton, unlike groundnut, can be sold only to a single processing agent,CFDT, and can be used to only a very limited extent by the producerhimself. Consequently, credit is easily collected by CFDT throughdeducting repayments from the growers sales proceeds.

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4.1,5 Subsidies. Farm inputs, and spare parts for equipment, are sold

by SCAER at prices higher than cost delivered to farmer. Only in the

cases of seeds and of ox-drawn implements are prices lower than costand a subsidy involved. On average the farmer pays about 60% of the costof seeds and implements, and the subsidies for the whole country currentlyamount to about MF 500 million a year, partially covered by Government levies

on produce sales, and in the past the balance has been met by FAC, FED andwhen necessary by Government contributions. In future FAC and FED intend

to reduce and eventually cease their grants for these subsidies. Governmentcortribution would therefore be increased tnless the subsidies are reduced

or the levies raised, as happened recently. Total subsidies in project

costs are covered by Government contributions. Given the critical need forfarmers to use improved seed, and the desirability of sponsoring ox-drawn

equipment it would be undesirable to take any measures that would increasethe cost to the farmers of these items at this time, and it was agreed thatIDA would be consulted on any changes proposed by Government in policy regard-

ing the prices of, and subsidies on, production inputs.

4.17 Interest rate. No formal interest is charges on seasonal and mediu=-tern credit made to OA farmers, but financial costs (equal to 8.5% of costprice delivered to farmers) and other charges including operating expenses,provision for losses and bad debts, and an adequate spread are included in

SCAER cost prices. A feature of the arrangement, however, is that as financialcharges and provision for bad debts apply equally to both cash and credit

sales, they discourage farmers from buying for cash. It was agreed that in

future the prices of Inputs and equipment sold for cash would be appropriatelydiscounted to encourage cash sales. Such discount should reflect savingsgenerated by cash purchases roughly estimated at 7-9% of cost price deliveredto farmers.

V. COST ESTIMATES AMD FINANCING

A. Poect Co8tS

5.01 Project cost estimates are detailed in Annex 12 and summarizedirn the following table. Costs are based on mid-1973 prices. The estimatesincLiet provision for price escalation 1/ for various project items. Aphys kal contingency of 5% has been applied to all project costs. Totalcontingencies amount to US$4.0 million or 27% of total costs before con-tin'encies. Project costs include import duities and taxes which are estimated

at about MF 649 million (US$1.3 million).

1/ r he followinR rates of price increase have been used:Technical

Eiuîpment Civil Works Assistance Others

1973 10 12 7 31974 14 18 7 61975 il 15 7 61976-80 7.5 12 7 6

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SUMMARY PROJECT COST ESTIMATE

% ForeignLocal For. Total Local For. Total Exchange---------MF Million------ -----US$ '000----------

1. MAIN SUBPROJECTBuildings 643.6 262.9 906.5 1,287 526 1,813 29Furniture & Equipment 62.1 93.1 155.2 125 186 311 60Vehicles 184.8 277.3 462.1 369 555 924 60Tech. Assistance 201.4 818.8 1,020.2 402 1,638 2,040 80Local Staff 1/ 352.5 - 352.5 705 - 705 -Operating Costs 1/ 321.1 362.1 683.2 642 724 1,366 53

Total 1 1,765.5 1,814.2 3,579.7 3,530 3,629 7,159 51

2. ANCILLARY SUBPROJECTS 1/Tracks Improvement 201.2 209.4 410.6 402 419 821 51Functional Literacy 92.7 92.7 185.4 186 185 371 50Research 107.5 99.2 206.7 216 198 414 48Med. Assistance 94.4 77.3 171.7 188 155 343 45Vet. Assistance 65.1 62.5 127.6 130 125 255 49Evaluation Unit v» 89.4 67.4 156.8 V/ 178 135 313NX 43Studies 2/ - 45.0 45.0 - 90 90 100

Total 2 650.3 653.5 1,303.8 1,300 1,307 2,607 50

Total 1 & 2 2,415.8 2,467.7 4,883.5 4,830 4,936 9,766 51

3. FARM INPUTS 1/Equiptnent 212.8 1,206.0 1,418.8 426 2,412 2,838 85Seasonal Inputs 619.5 512.8 1,132.3 1,24- 1,025 2,265 45

Total 3 832.3 1,718.8 2,551.1 1,666 3,437 5,103 67

4. REVOLVING FUND _ 20.7 31.1 51.8 42 62 104 60

Total 1 to 4 3,268.8 4,217.6 7,486.4 6,538 8,435 14,973 56

5. CeNTINGENCIESPrice 714.3 896.5 1,610.8 1,429 1,793 3,222 56Physical 163.4 210.7 374.1 327 421 748 56

Total 5 877.7 1,107.2 1,984.9 1,756 2,214 3,970 56

GRAND TOTAL 4,146.5 5,324.8 9,471.3 8,294 10,649 18,943' 56

1/ Incremental Costs, except for Evaluation Unit2/ Cereal producer prices and marketing arrangements study and accountancy assistance to OACV

Blacksmith equipment and motorcycles and bicycles for staff.

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5.02 As the project is a continuation and expansion of an existingprogram, project costs are those that are additional to the costs of main-taining the ongoing program at its current level of activity. An excep-tion, however, is the case of technical assistance where total costs reflectthe requirements to implement the project.

B. Financial Arrangements

5.03 It is proposed that IDA should make a credit of US$8.0 millionto meet 42% of total project costs. The credit would be equivalent to 75%of project foreign exchange costs which are estimated at MF 5,324.8 million(US$10.6 million). Project financing would be completed by FAC providing13% of project costs, Government 23% and farmers 22%. Details of the proposedfinancing are set out in the following table and in more detail in Annex 13.

IALI

INTEGRATED RURAL DEVEIDPtENT PROJECr

SUMNARY OF PROJECT FINANCING

IDA FAC GOVERNNENT PARNERS GRAND TOTAL

My m us$ looo % MF n US$'000 M NF m us$ 0ooo X Mp . US$ '000 . MF u US$ '000 Z

Buildings 672.8 1,346 70 90.2 180 10 194.6 389 20 - - - 957.6 1,915 100

Equipment and Furniture - - - 121.6 244 59 84.4 169 41 - - - 206.0 4f3 100

Vehicles 397.4 795 55 73.0 146 10 258.8 518 35 - - - 729.2 1,459 100

Technical Assistance 860.6 1,721 70 361.1 722 30 - - - - - - 1,221.7 2,443 100

Malian Staff 403.4 807 70 124.6 249 21 51.6 103 9 - - - 579.6 1,159 100

Operating Costs 818.7 1,637 72 231.1 462 20 94.6 189 8 - - 1,144.4 2,288 100

Cart Bodies - - - - - - - - - 159.6 319 100 159.6 319 100

Farm Inputs 1/ - - - - - - 748.1 1,496 43 1,001.1 2,002 57 1,749.2 3,498 100

Seeds 103.8 208 16 - - - 214.5 429 33 324.0 648 51 642.3 1,285 100

Revolving yund 2/ - - - - _ _ 51.8 104 100 - - - 51.8 104 100

5tudies il 45.0 90 00- - - . - - 45.0 9C 100

Sub-Total 3,301.7 6,604 44 1,001.6 2,003 13 1,698.4 3,397 23 1,484.7 2,969 20 7,486.4 14,973 100

Contingencies 698,3 1.396 35 257.8 516 13 449.3 899 23 579.5 1.159 29 1.984.9 3.970 100

GRAND TOTAL 4.000.0 8.000 42 1.259.4 4.296 23 2,064.2 4.128 22 9.471.3 18.943 100

The above percentages refer to total project costs. Percentages on project costs during IDA disbursement period (PY 2 to PY 5) are detailed in Annex 13.

Exchange rate: US$ 1 = MF 500.

1/ Incremental farm inputs (excluding seeds) at full costs; Government contribution include cost of subsidies

2/ Revolving Fund for blacksmiths' equipment and motorbicycles and bicycles for extension staff.

y/ Cereal producer prices and marketing arrangements study and accountancy assistance to OACV.

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5.04 The contributions proposed for farmers and Governnent appear highgiven the tight financial situation of both. However, farmers' contributionsinclude repayments for inputs and equipment totalling MF 983 million; theremainder of their contribution MF 1,081 million would be the down payments,the purchase of inputs for cash, the costs of cart bodies and contingencies.Government's contribution would include about MF 444 million that it isestimated SCAER would rediscount with the Central Bank in connection with itsproviding farm equipment on medium term credit. MF 645 million of Governnent'scontribution would be offset by the import duty and added value taxes componentof project costs; a further MF 1,036 million would accrue to Government/OACVfrom the "bareme arachide" and serve to meet the cost of extension services.

5.05 Bareme Arachide (Groundnut schedule) the government after consulta-tion with OA and OSRP establishes annually a list of the estimated expensescovering the various operations from the groundnut producer to CIF Europe.The list, called Bareme Arachide, for the 1973/74 season is at Annex 14 table 1.Under this arrangement Government/OACV would receive a cess of MF 7,600 perton of undecorticated groundnut marketed by OACV, which would generate anestimated MF 1,036 million on the incremental marketed project productionduring the period 1973/74 through 1977/78. Surpluses arising when the CIFprice exceed the schedule price accrue in fact to SOMIEX and shortfalls aremet by Government. It was agreed that the annual Bareme Arachide would beestablished in consultation with IDA.

5.06 It is proposed that an IDA credit of US$8 million be made on standardterms to Government which will pass it on to OACV. The IDA credit would bedisbursed during the four-year period 1974/75 through 1977/78, the firstyear costs being financed by FAC and Government. Funds to meet recurrentoperating costs, after 1977/78 until full production is reached in 1980/81would total MF 810 million. Government should have no problem in findingthese funds from project revenues and there would be no point in extendingthe IDA credit disbursement period beyond 1977/78.

5.07 To ensure the efficient and timely execution of the project againstthe background of very tight budgetary constraints, it is proposed that IDAshould prefinance project activities. To that effect, immediately aftercredit effectiveness, an initial IDA disbursement of US$200,000 equivalentwould be made into a special account that Government would establish for thispurpose; from this account Government would be able to finance projectexpenditures. IDA would replenish the special account upon reception ofsatisfactory evidence that such expenditures are eligible for financing outof the proceeds of the credit. Ilowever, should any disbursement out of thespecial account fail to meet the criteria of eligibility, IDA would refusereimbursement, and Government would be under the obligation to deposit thecorresponding amount into the special account. Agreement was reached tothat effect. A condition of effectiveness of the credit would be that thespecial account has been established.

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C. Procurement and Disbursement

5.08 Procurement. Project vehicles and graders amounting to US$1.5 millionwould be procured on the basis of international competitive bidding in accor-dance with IDA guidelines.

Equipment and furniture valued at US$0.4 million and for whichthere is a satisfactory degree of local competition, would be procured bylocal competitive bidding. Contracts for the construction of project offices,houses, stores and garages evaluated to about US$1.9 million are not suit-able for international competitive bidding due to the dîspersed location ofthe work and the small size of individual contracts and would be awarded underlocal competitive bidding. A satîsfactory degree of competition between ex-perienced local contractors could be expected. In appraisal of bids, domesticcivil works contractors would be allowed a preference margin of 7.5%.

Farm inputs (fertilizers, agrocides) and implements for draftanimals amounting to US$3.5 million, to be financed by Government and farmers,would be procured by SCAER as part of the country's total requirements.SCAER purchase procedure, which is based on satisfactory competitive bidding,would continue under the project. An informal understanding was reached thatIDA would be consulted on the preparation and publicity of tender documentsand the evaluation of bids for the SCAER procurement. Seeds required bythe project costing an estimated US$1.3 million would be locally producedand distributed under OACV supervision. Cart bodies valued at US$319,000would be supplied or purchased locally by farmers.

Technical assistance and consultant services to the project isexpected to cost US$2.5 million; it is proposed that a contract should bemade with BDPA, which has successfully assisted the ongoing project, to supplyexperts required by OACV and costing an estimated US$2 million. Similarly,GERDAT, which is currently assisting Mali in agricultural research, wouldsupply the experts required at an estimated cost of US$150,000. Internationallyrecruited staff at a cost of about US$390,000 would be recruited under pro-cedures acceptable to IDA to evaluate the functional literacy program, toprovide accountancy assistance to OACV, to head the evaluation unit and tocarry out a study on cereal producer prices and marketing arrangements.

A total of US$3.5 million would cover Malian staff and operatingexpenses, credit for blacksmiths' equipment, motorcycles and bicycles forthe extension staff. The rural track improvement and maintenance programwould be carried out by force account, which is the only practical means fortiimely and proper execution of this program.

An amount of US$4.0 million would be unallocated.

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5.09 Disbursement of the IDA credit would start in 1974/75, the secondyear of the project. The proceeds of the credit would cover expendituresduring the four-year period on the following basis:

(a) 100% of foreign expenditures or 66% of total expenditures forvehicles and graders imported for the project - US$795,000.

(b) 18% of the incremental cost of seeds - US$208,000.

(c) 80% of total expenditures for buildings - US$1,352,600.

(d) 85% for the salaries of internationally recruited staff andconsultants for project management - US$1,721,000.

(e) 100% of foreign expenditures for a proposed cereal marketingstudy and accountancy services - US$90,000.

j (f) 75% of incremental expenditures for local staff - US$807,000.

" (g) 80% of incremental operating costs of Project - US$1,637,400.

US$1,389,000 of the credit would be unallocated to cover contingencies.

5.10 Applications for disbursements under categories (a), (c) and (e)would be supported by contracts and shipping and other appropriate docu-ments. For categories (b), (d), (f) and (g), applications would be supportedby certificates issued by the Project Manager that expenditures had beenincurred for project purposes. Documents supporting applications undercategories (b), (f) and (g) would not be submitted for review but would beavailable for inspection by IDA. A schedule of estimated disbursements bysemester is in Annex 13.

D. Project Accounts and Audit

5.11 OACV accounts require to be improved and an accurate opening balancesheet established. An informal understanding was reached that an independentaccountancy firm or consultant would be engaged under the project for thispurpose.

5.12 Project accounts would be kept by OACV in accordance with estab-lished accounting principles, would be audited by a firm of independentauditors satisfactory to IDA, and would be submitted together with theauditors report to IDA within four months of the close of each financialyear. The accounts of Office de Surveillance et de Regulation des Prix(OSRP) are audited by the government Audit Service. To enable IDA to

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assess arnually the amount of the groundnut reserve (see para 7.05) thesewould be submitted together with the auditors report to IDA within fourmonths of the close of each financial year. Agreement to this effect wasreached with Government.

VI. ORGANIZATION AND MANAGEMENT - STAFFING MND TRAINING

A. Organization and Management

6.01 Project entity. The project would be managed by "Operation Arachideet Cultures Vivrieres" (OACV), see para 4.01. As OA's performance has beensatisfactory in the past, no significant changes are proposed in its organiza-tion and administration.

6.02 Board of Directors. OA has a Board of 20 directors which meets atleast twice a year to consider general policy and to determine program detailsand budgets. Board members are 13 Government officials, three technical experts,three farmers' representatives and one representative of OA staff; the chairmanis the Minister of Production. In order to ensure the efficient execution ofproject components involving other agencies, the Board would co-opt as neededrepresentatives of (i) Direction Niationale des Travaux Publics (DNTP); (ii)Direction de l'Alphabetisation Fonctionnelle; (iii) Institut d'Economie Rurale(IER); (iv) Direction Nationale de la Sante (DNS); and (v) Service de l'Elevageet de la Sante Animale (SESA). The manager of "Office de Surveillance et deRegulation des Prix" (OSRP) would be one of the three technical experts.Agreement was reached that (i) the Board would co-opt, as necessary, re-presentatives of other government agencies; and (ii) the manager of OSRPwould become a permanent Board member.

6.03 HO Management. The general manager, as now, would report to theService de l agriculture of the Ministry of Production. He would be assistedby a deputy general manager, a technical manager and a chief accountant. Thedeputy general manager would be responsible for general and personnel administr-ation and credit operations; the technical manager, assisted by a specialistin animal-powered mechanisation, for all technical aspects of the program andthe chief accountant for all project and farmers' credit accounts (see Organi-zation Chart).

6.04 Field management. Field management would be effected through ninesectors, each headed by a sector chief assisted by sub-sector chiefs. Thelatter, in turn, would instruct and control the activities of extension agents.For administration, accounting and credit operations, sector and sub-sectorchiefs would be assisted by "agents sociaux economiques", a type of bookkeeperwith responsibility for marketing and credit transactions.

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6.05 Rural tracks improvement program. A special unit, the "Service desTravaux Routiers" will be established within OACV Hleadquarters to plan andsupervise its track improvement activities. The unit will be headed by anexperienced road technician (Inspecteur des Travaux Routiers), seconded fromthe DNTP, who will assume broad responsibilities for the organization, plan-ning and supervision of the activities, and for the efficient use of the roadgangs and of the equipment. He will also be responsible for coordination ofthe annual track improvement and maintenance program with the DNTP. Theproposed program will include schedules for use of the two graders procuredunder the project, and for rental of DNTP equipment, such as bulldozers.Each of the four road gangs will be attachei to one sector of the OACV, andwill operate under the administrative autho-ity of the Chief of Sector whowill supply them with funds, materials and fuel, and will control theirexpenditure. Each gang will be headed by a gang leader to be seconded fromDNTP. It was agreed that a road inspector and four road gang leaders withqualifications and experience satisfactory to IDA would be seconded from DNTPto the project for the duration of the tracks program.

6.06 Functional literacy program. Annual functional literacy programsand associated budgets would be prepared by the Directorate of FunctionalLiteracy in consultation with the deputy general manager of OACV. It wouldbe the responsibility of the latter to arrange for the effective monitoringof the program, and to recommend such modifications as may appear appropriate.The authorization of expenditures within the agreed budget for the functionalliteracy program would rest with OACV.

e.07 Research program. The details and budgets of annual research pro-grams financed under the project would be prepared by the Directorate ofagricultural research of the Institut d'Economie Rurale in consultation with<)ACV. The Technical Manager would be responsible for ensuring that the agri-cultural research program reflected project needs, and for helping to locateaZnd estabLish field triais. Financial control of research expenditures with-in the acreed budget would be the responsibility of the Directorate ofAgricultural Pesearch.

'.(03 Improvement of Mledical Facilities. Annuai medical programs and budgetswoutid he established by the firectorate of Medical Services and submitted forapproval to OACV which jointly witlh the I)irectorate of medical services wouldcontrol the execution nE the program. Financial control of medical programexpenditures within the agreed budget, would rest with the Directorate ofaedical services.

6.09 Improvement of Veterinary Services. The annual veterinary programsand budgets of the project would bc established jointly by the Service del'Elevage et de la Sante Animale (SFSA) and OACV. OACV's specialist in animal-pzowered mechanisation would ensure that the program is satisfactorily carriedout. F'inancial control of veterinary program expenditures, within the agreedbudget, would be the responsibility of SESA.

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B. Staffing and Training

6.10 Senior Staff. The positions of OA (to be OACV) General Manager,Deputy General M4anager and Chief Accountant are filled by experiencedTMalians. Ail Sector Chiefs are also Malian. Nine senior positions in OAcontinue to be held by expatriates supplied by BDPA, these are: adviser tothe Ceneral Manager, Technical Manager, specialist in animal-powered mechani-zation, administrator and five field advisers. In view of the critical im-portance of efficient management to the success of the project, it was agreedthat during the disbursement period of the IDA credit the positions of OACVCeneral Manager, Deputy General Manager, Teclhnical Manager and Chief Accountant,would be filled by persons with experience and qualifications satisfactory toIDA and under terns of reference and conditions of employment mutually accept-able to Cnvernment and IDA. Currently persons filling these positions andtheir terns of reference and conditions of employment are satisfactory to IDA.

6.11 Technical Assistance. BDPA provided technical assistance to OAfor tlhe five years 1967/68 to 1972/73, and is continuing to do so underinterim arrangements expiring in ilarch 1974. This interim period correspondswith the first year of the project (PY 1) reviewed in this report. BDPA per-formance lias been satisfactory, and thus it is proposed that BDPA be employedfor the four years of the ID)A credit disbursement period (PY2 through PY5).Under the project the level of assistance from BDPA would increase from nineexpatriates, six advisers and three executives, as at present in PY 1, to 12in PY2, and thereafter decline to 10 in PY 3, 7 in PY 4 and finally to six inPY 5. SIPA expatriates would not be replaced, or their tenure extended, whentheir contracts expired, and project cost estimates are based on the assump-tioni that expatriates would not be retained beyond the IDA credit disbursementperiod. BDPA teclnical assistance would include visits by BDPA specialiststo deal with specific problems. An informal understanding was reached that(i) Government would contract BDPA to supply technical assistance to OACV underterms of reference and in accordance with a staffing schedule acceptable toIDA; (ii) that the contract would permit a reduction in the number of ex-patriates if so requested by Governnent in agreement with IDA; and (iii) thatGovernment would discuss and agree annually with IDA the number and deploynentof technical assistance staff supplied by BDPA.

6.12 Evaluation and Research. The consultants required to (i) evaluatethe functional literacy program and (ii) to carryout a study on cereal producerprices and marketing arrangements, and the agricultural economist who wouldhead the Evaluation Unit of OACV, would be recruited internationally underterms and conditions satisfactory to IDA. Technical assistance for thercsearch component of the project would be supplied by GERDAT under terms andconditions of service satisfactory to IDA. Agreement was reached withGovernment to this effect.

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,.13 Junior Staff. ,Tost existing junior positions in OA are now filledby adequately trained and experienced personnel. As a consequence bf thepro jects, however, an additionai 120 extension agents would be required.'fost of these would be recruited frorm the "Centres d'Apprentissage ligricole"(CAU) 1/. Promotions from the ranks of extension agents and graduates fromlthe "Institut Polytechnique Rural" (IPR) of Katibougou woul(d fill the eight

additional positions of sub-sector chief that would be created under theproject. Difficulties are not foreseen in recruiting the other junior supportstaff required.

!',. 1 4 Training. BDPA has always laid great emphasis on the in-servicetraiaiirç of Malian personnei, and a permanent program for all categories ofstaff .ias been established and works well. This in-service trai;aing systemwouLd be continued and extended. Training programs for the "agents sociauxeconomiques" would pay particular attention to farm credit control, whichwoul(d also be given greater prominence in the training sessions for extensionstaff.

VII. YIELDS MID PRODUCTION, MARKETING,

FAUMERS' BENEFITS AND GOVFRNMENT REVENUES

A. Yields and Production

7.01 Groundnuts. The vield of groundnuts has increased substantiallywhcre OA recommendations have been followed. The average yield in 1972/73was 767 kg/ha of undecorticated groundnuts 2/, somewhat lower than the peakof '14 kg/ha achieved during the previous season when the weather was better.These yields compare with a 500 lkg/ha average on farms using traditionalcultivation methods and represent increases of 53% and 63% respectively. Bythe end of the project development period, it is estimated that furtherimprovements will occur; in existing OA areas where an estimated 100,000 haof groundnuts are now grown, yields will increase to an average 950 kg/ha(24, more than in 1972/73). A substantial increase is anticipated in newareas where yield is estinated to increase fromn 500 kg/ha to 835 kg/ha (a 67%increase); it is estimated that about 91,000 ha of groundnuts would be grownin tliese areas by the end of the project development period. If the foregoingtarc;ets are achieved the vield of all OACV farmers would average 895 kg/ha

1/ Thiere are 3CAA in Mali. The courses last 3 years and about 30students graduate annually from each CAA.

_/ Undercorticated groundnuts are groundnuts in shell as harvested and afterdrying. Dccorticated groundnuts are 65 to 75% in weight of undecorticatedgroundnuts depending on variety. In Mali the average ratio is 68 to 70%.Decorticated groundnuts produce, after milling, about 40% of oil and 60%of cake. %

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by PY 6 representing an average increase of 255 kg/ha or 40% over 1972/73.This estimate is conservative in view of neighboring countries' experiencewhere yields of over 1,100 kg/ha are obtained under similar programs and ofthe results of locally conducted field trials where vields of 1,500 kg/haare regularly obtained. As shown in Annex 3 table 4, project inducedincremental grotndnut production is estimated to reach 65,000 tons annuallyat full development in PY 8.

7.02 Millet and sorghum. Yield and production estimates for millet andsorghum are in Annex 3 table 7. The average yield of millet and sorghum withthe project is expected to increase from the current national average of 600kg/ha 1/ to about 725 kg/ha (20% increase) by the development period end.At ful1 development in 1930/81 (PY 8) prodLction induced by the project isestinated to reach 38,600 tons annually. Yield improvement would stem fromseeé dressing, the residual effects of fertilizers used on groundnuts and thebenefits of better cultivations brought about by using ox-drawn equipment.Tlhe imnpact of these improvements on cereal yields lias been demonstrated bytrials carried out by IRAT in Bambey (Senegal) and in IRAT field trials inthe- iroject area and elsewhere in IJest Africa.

1B. Mfarketing and Prices

7. 03 Croundnut. OACV wouild have responsibility for the marketing of*,roundnuts produced in the project. Problems are not foreseen and producecollection and evacuation should be facilitated by the ongoing IDA, FAC andGovernment Financed road prograrms as well as by the project' s track improve-ment progran. As roads are improved in the project area it is anticipatedtLat a greater part of road transport would be assumed by the private sectorand OACV involvement in this field gradually reduced. An informal understand-ing was reached that OACV's involvement in road transport of marketed ground-nuts would gradually be reduced when road improvement in the project areawould permit transport by the private sector.

7.04 It is estimated that 65% of increimental project production would bemarketed hy project farmers by PY8. (This proportion allows for the retentionof scéd, ihome consumption and losses) and thus some 111,000 tons of undecorti-catcdl -roundnuts collected compared with an average of 60,000 tons in recentyears. Ns a consequence of the project, Mali's share in world groundnut exportswoulid increase from 2'% to about 3.5% by 1930/81. This should not result inanv significant imbalance in the worl(l groundnut trade, and an increase ofthis magnitude would bring Mali's share of world trade back to that it enjoyeduntil 1961. Prices used in project calculations are based on forecasts madeby tlie Bank's Economic Analysis and Projections Department (BEAPD); Annex 14contains further details of price projections, and gives a description of theprospects for groundnuts in the world's fats and oil trade.

1/ A wceighted average of 500 kg/ha for milLet and 650 kg/ha for sorghuin.

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7.05 The BEAPD predicts that world market prices for decorticated ground-nuts will decline from their current price of CIF Europe US$393 per metricton to TJS$235 in 1980 (1973 real prices). If this fall occurs, Mali groundnutexports would still make a significant contribution to Government revenues(see Annex 16). The "Office cie Surveillance et de Regulation des Prix"(OSRP) is designed to cushion the impact of fluctuations in world prices;but the reserve accumulated to date, about MF 520 million, is far below theestimated 4.5 billion 1/ (US$9 million) required for adequate functioningof the OSRP. Assuming that the price decline expected by the Bank takesplace and that the current producer price is maintained, an additional MF 4.8billioi would accrue to OSRP over the 15-year project period.

7.06 Producer price for undecorticated groundnuts, fixed by Government,is currently 'F 30 per kg. This has provided sufficient incentive to farmersas the groundnut producer price is more beneficial than prices paid for othercrops and compares favorably with prices paid for groundnuts in neighboringcountries (Annex 1, Table 2 and Annex 14, Table 2). Return to groundnutproducers would further increase with improved productivity and marketing.Should prices paid for other crops be increased, some shift from groundnutswould occur, however, where cither the alternative cash crop could be profit-ably grown, currently the only scrope for this is cotton in the west of theproject area, or where a mnarket exists for increased food crop production.

Agreement was reached that priority would be given to accumulatingand riaintaining the Groundnut Stabilization Fund at an adequate level, andthat Government would consult IDA annually on a producer price for theComing season and submit a schedule of payments into or from OSRP for approval.

7.07 !illet and sorghum. Incremental demand for cereals by 1978/79 isestimated at between 200,000 and 300,000 tons, with millet and sorghumaccounting for about 75%. Consequently there would be no problem in dis-posing of project induced production, about 39,000 tons annually. In cal-culating the project's economic benefits, cereal production has been valuedalt ',;'API) estimated( world prices plus the costs of transportation to Mali.*;y 19Q30/81, the economie farm gate price of cereals is estimated at MF 50,700/ton (Ur$ 101), see Annex 14 table 9.

7.0 Producer prices for cereals are fixed by Government, and wereMT 20/k,; in 1972/73. This was about half the average price paid by private.inofficial dealers; at times cereals unofficially traded have fetched asUCl as 'T 90/kg. The high prices ruling in unofficial trade make itimpossible for "Office tles Produits Agricoles du Mali" (OPAM) to exert itscereal narketing nonopoly and what purchases it makes are generally throughcoercive means. In effect, OPAM's role is counterproductive since, apartfrom its many admtinistrative deficiencies, through attempting to enforceiirealistically Low producer prices it restricts the volume of grain

1/ Based on average return to producers in the three preceding years.

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available for sale, and causes a nationwide black market and artificiallyhigh price for cereals. To ensure the success of the important foodcropcomponent of the project, it was agreed that (i) sorghum and millet producerprices would be increased from MF 20 per kg to a minimum of MF 25 per kgeffective from November 1974, and the increase would be publicized inMay before the planting period; (ii) a study on millet and sorghum producerprices and marketing arrangements, to be completed by April 30, 1975, wouldbe carried out by consultants and under terms of reference acceptable to IDA.This studly would provide the basis for further decisions on both producerprices and marketing arrangements which should be satisfactory to IDA.

In the farm budgets at Annex 15, a producer price for sorghumaveraging MF 35/kg is used reflecting their unofficial trade value.

C. Farmers' Benefits

7.09 At full development, some 107,000 farming families, involvingabout one million people in ail, would participate in the project comparedto 52,000 farming families and 490,000 people served by OA in 1972/73. Totalincremental income accruing to producers from marketed groundnuts would appro-ximate ME 1.6 billion (US$3.2 million) annually at current producer prices,and the value of project induced millet and sorghum would be about MF 0.9billion (US$1.8 million). Determina'ion of a "typical farm" of the projectarea is difficult. Nonetheless the niodels in Annex 15 are considered reason-ably representative of the situation of participating farmers in the projectarea. Two models are compared with the traditional "pre-project" farm. First,a farm using hand cultivation and a second one using oxen for cultivations.vor the former, it is assumed that the area under millet/sorghum would remainat 2 ha but that of groundnut would increase from 1.2 ha to 2 ha under thestimulus of favorable cash incomes from groundnut production and that produc-tivity would improve steadily over a four year period. In the case of thefaim using an ox-drawn multipurpose cultivator and seeder it is assumed thatthe area cropped would expand fromt 4 to 6 ha over a four-year period as aconsequence of the farm family switching from hand to animal-powered cultiva-tion and that 50% of the land would be used for cereals and the balance forgroundnuts. The following table summarizes the information in Annex 15.

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Farm Income at Full Development

Without theProject With the Project

Traditional Manual Ox-PoweredCultivation Cultivation Cultivation

Farm area 3.2 ha 4 ha 6 haTotal farm income /1 MF 56,500 117,000 177,400Farm cash income /2 MF 8,250 65,700 126,200Per capita income /3 MF 6,650 13,760 20,870

US$ 14 28 42

Other income per capita /4 US$ 8 10 15

Total per capita income US$ 22 38 57

/1 Net value of production from groundnut and cereals only in the caseof ox-powered cultivation, after amortization of equipment.

/2 Total farm income less value of food consumed by family and taxespaid by 2 adults.

/3 Fanily of 8.5, providing 3.5 adult labor equivalent./4 Represented by production from other crops, kitchen garden, poultry,

fruit and cattle.

7.10 Farn labor requirements would increase as a consequence of theproject despite the increase in animal drawn cultivation as labor savings incultivations would be more than offset by the extra labor needed in maintainingand harvesting the expansion in cropped area. It is anticipated that additionallabor would be supplied by the farm family supplemented as necessary by avail-able hired labor. The return per manday worked, would rise from about MF 253under traditional cultivation to MF 302 on hand cultivated, and 409 on ox-cultivated farms using OACV recommendations (see Annex 15).

D. Iract of Project on Government Revenues and Expenditures

7.11 Annex 16 contains estimates of consolidated Government revenuesand expenditures resulting from the project. The project would generate netcashi surpluses after debt servicing rising from MF 137 million (US$0.3 mil-lion) in Year 1 to MF 1.1 billion (US$2.3 million) by end of project periodin 1987/88 and would average MF 1 billion (US$2.0 million) thereafter.

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VIII. BENEFITS AND JUSTIFICATIONS

8.01 The principal benefits of the project would be the project inducedincreases in groundnuts and cereal production shown in Annex 3. With thesevalued at the economic prices shown in Annex 14, Tables 4 and 9 and savingsresulting from track improvement reflected in marketing costs, the internalrate of return investment in the project is estimated at 91% over a projectlife of 15 years, see Annex 17. This high return is partly attributable tothe importance of previous and ongoing investments which are sunk costs tothe project and the high degree of technical proficiency of farmers resultingfrom previous extension efforts. Also instrumental are the relatively highprojected groundnut and sorghum long-term international prices. Costs usedin the calculations are net of taxes but include all subsidies from whichfarmers benefit and expenditures incurred in the improvement of medical andveterinary services, although no separate benefits have been assumed fromthese expenditures. Costs include both the incremental costs of OA servicesat the current levels of expenditures as well as 2/3 of the current cost ofOA services. The latter are treated as project costs since without theproject OA costs probably could be reduced eventually by about 60 percentwithout a fall-off in production in OA areas. Incremental labor requirementswhether family or hired have been valued at MF 200/manday; this appearsappropriate as labor is in relatively short supply in the project area duringthe cropping season. MF 200/manday corresponds to the estimated earnings ofthe "navetane" the traditional hired labor and is about 60 percent of thelegal minimum wage of MF 350/manday for casual labor in rural areas.

8.02 The sensitivity of the rate of return has been tested using a rangeof variations in benefits and cost from that employed in the standard calcula-tions. The results are shown below.

Lenefits (percent)

- Croundnut 100 100 100 100 90 80 75 90 90 80 75- 'Millet/sorghum 100 100 100 100 90 130 50 90 90 80 50

Costs (percent) 100 110 120 130 100 100 100 110 130 120 110

"atu of neturn 91 69 54 44 67 49 30 52 33 29 21

Fuels and fertilizers accouat for 7% of project expenditures ex-clucling contingencies. Assuming that the prices of these two commnoditiesare (loubled total costs would be increased by 6.4%.

3.03 The project would generate substantial foreign exchange earningsand savings the first through the export of grourndnuts, and tne second fromthe substitutioli of ,sillet/sorghuim production for imports. Net foreign ex-chan,e h)enefits fromr groundnut exports and savings oS1 cereal imports wouldanount to about MF 5.2 billion (US$10.4 million) from PY 6 onwards. GivenMlahils limfited export possibilities the foreign exchange characteristic oftlUe project are of major significance.

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IX. AGREEMENTS REACIED AND RECOMMENDATIONS

9.01 Conditions of Credit effectiveness are:

(a) a "recinrocal service agreement" satisfactory to IDA and definingthe responsibilities and obligations of Operation Arachide etCultures Vivrieres (OACV) and Societe de Credit et d'EquipementRural (SCAER) has been signed between both parties (para 4.14);

(b) a special bank account has been established by Government (para 5.07).

9.02 Agreement was reached during negotiations on the following principalpoints:

(a) IDA would be consulted on any change proposed by Government inpolicy regarding the prices of and subsidies on production inputs(para 4.16);

(b) the "Bareme Arachide" would be established annually in consultationwith IDA (para 5.05);

(c) Government would replenish the special account for expendituresnot eligible for financing out of the proceeds of the credit(para 5.07);

(d) during the disbursement period of the IDA credit the positions ofOACV General Manager, Deputy General Manager, technical managerand chief accountant would be filled by persons with experienceand qualifications satisfactory to IDA and under terms ofreference and conditions of employment mutually acceptable toGovernment and IDA (para 6.10);

(e) the consultants to assist OACV; the specialists required for theagricultural research component; the economist to head the OACVevaluation unit; the consultants required to evaluate the functionalliteracy program and for the millet and sorghum producer pricesand marketing arrangements study and the firm to provide accountancyassistance to OACV would be acceptable to IDA and employed underterms and conditions satisfactory to the Association (paras 6.11and 6.12);

(f) priority would be given to the accumulation of groundnut reservesin OSRP to a level which would be adequate to counteract pricevariations and that Government would consult with IDA annuallyon a producer price for the coming season and submit a schedule ofpayments into or from OSRP for approval (para 7.06);

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(g) no later than September 1974 Government would fix producer pricesfor millet/sorghum at no less than MF 25 per kg; it would carryout a study on the producer prices and marketing arrangementsof millet and sorghum and would agree with IDA no later thanMav 31, 1975 on changes in the producer prices and marketingarrangements based on the study's findings and agree on a time-table for their implementation (para 7.08).

9.03 Informal assurances were also obtained including inter alia:

(a) Banque de Developpement du Mali (BDM) would enable Societe deCredit Agricole et d'Equipement Rural (SCAER) to finance farminputs and equipment required by the project under terms andconditions satisfactory to IDA and would consult with IDA tothat effect (para 4.15);

(b) Government would contract Bureau pour le Developpement de laProduction Agricole (BDPA) to supply technical assistance toOACV (para 6.11).

9.04 The proposed project constitutes a suitable basis for an IDAcredit of US$8 million equivalent under the usual IDA terms. The borrowerwould be the Government of Mali.

ANNEX 1Table 1

MALI

INTEGRATED RURAL DEELOPMENT PROJECT

Agriculture in Mali

Production and Marketing of Main Crops (1967 to 1972)

(lî'O0 ton)

1967 1968 1969 1970 1971 197221

Millet/SorghumT

Production 830 556 603 600 750 500

Marketed through official channel 60 8 26 10 30 5Marketed on free market 55 46 68 80 60 16

Total marketed 115 54 84 90 90 21

Paddy

Production 172 134 161 148 198 110

Marketed through officia} channel 2& 18 29 40 52 30Marketed on free market 52 38 h1 30 30 17

Total marketed 80 56 70 70 82 47

Seed Cotton

Production 39 50 51 60 74 70Marketed 33 hi 42 53 68 66

Undecorticated Groundnuts

Production 81 99 133 156 152 150Marketed 30 28 56 74 60 50

Source: Ministry of Production

1] Preliminary

/ Estimates

September 10, 1973

MALI

INTE1RATED RURAL DEV LOP M1T PROJECT

Agriculture in MaliOfficial Producer Prices for Principal Commodities

(Value: current lD?/kg; index 196b - 100)

1964 1965 1966 1967 1968 1969 1970 1971 1972

Millet/Sorghum: V il il 15 16 18 18 18 18 20

I 100 100 136 145 163 163 163 163 182

'White Paddy V 12.5 12.5 16 18 25 25 25 25 25

I 100 100 128 144 200 200 200 200 200

Groundnuts V 13 13 16 24 3h 30 30 30 30

(unshelled) I 100 100 123 184 230 230 230 230 230

Cotton V 34 34 34 40 4h 45 50 50 50(Grade 1) I 100 100 100 117 117 117 132 147 147

Source: Ministry of Produaction

September 10, 1973 il

ANNEX 1Table 3

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Agriculture in Mali

Agriculture Sector Contribution to Exports

(MF billion)

1°68 1-69 ly70 19,71 1972

Cotton (lint and seed) 3.3 4.6 5.2 6.4 7.9

Groundnuts and Groundnut Products 1.5 i1 3.0 4.8 4.o

Live animals 2.0 4.0 4.9 4.8 4.7

Fish (dried and smoked) 1.3 1.6 1.4 1.3 0.9

Others .8 1.7 3.7 4.2 5.2

rotal recorded exports 8.9 13.3 18.2 21.5 22.7

Groundnuts and Groundnut Products asa % of total exports 16.8 10.5 16.5 22.3 17.6

Cotton as a % of total exports 37.0 34.5 28.5 29.7 34.8

j Preliminary

W Includes in main: karite products, arabic gum, kola nuts.

Note: Uirecorded exports, mainly livestock, fish and food grains,have beenestimated as follows:

(MF billion)9.7 8.7 8.4 7.5 8.0

Source: Bank's Economic Report. Banque Centrale du Mali, Rapport dfactivité 1972.

September 10, 1973

A3N EX 1Table 4

MALI

INTEGRATED RURAL DEVELOPIENT PROJECT

Agriculture in Mali

Volume of Grain Iniports (1969 to 1973)('000 tons)

1969 1970 1971 1972 1973 /

Millet/Sorghum 31 1 15 32 125

Rice Voiume 16 - 21 31 45

Total 47 1 36 63 170

Total Value (MF billion) 3.4 0.6 1.9 3.8 13

As a % of total foodproducts imports 41% 7.6% 18% 30% 57

As a % of total domesticcereal production 5 - 3 9 27

j Estimated.

NOTE: Most Millet/Sorghum is supplied through assistanceprogranis(FAC, US-AID, PAM, EEC).

SOURCE: Ministry of Production, Central Bank annual reports.

December 17, 1973

AlNNEX 1

MALI

I:NTEGRATED RURAL D)EVKLOP1P1EM¶T PtOJiCT

Agricul ture iri islali

(roundnut ?roductiori and llarketing 1 9253-73(i.indecorLicated)

Total Production Marketed

Share ot

Year Total AOperation acflQuant,Lt-y

1953 102.500 8.6 3.9J

19514 90.000 55.000

1955 117.500 8d.oou

1 95k 120.000 85.500

1957 1 24.000 83.400

1958 138.000 97.000

1959 125.000 85.800

1960 90.000 50.1-où

1961 125.000 135.700

1962 -108.000 66.900

1963 117.500 73.600

19614 117.000 72.100

1965 9C.000 144. 800

1966 75.000 27.900

1967 87.500 3o.f0l 15.of-

1968 81.000 30.000 -3 .5(00o 3 5

1969 98.500 28.000 114.5oo 52

1970 132.500 56.600 30.100 o

1971 156.000 714.000 e. 000

1972 152.000 59.00 h. oco 7o

1973 150.000 50000 l(t'JÛ0 20

ANNEX 2Page i

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

OPERATION ARACHIDE

Articles of Decree No. 116-PG-RM of September 16, 1972establishing Operation Groundnut

Article 1. There is hereby established a Rural Development Operation entitledOperation Groundnut and intended to promote the cultivation of groundnuts inparticular and agricultural production in general in the area to which itapplies. The operation shall be under the supervision of the Minister forRural Development.

Article 2% The objectives of the Operation, in the area concerned, shallbe to:

- take all necessary steps for the development of groundnutcultivation and agricultural production in general;

- organize marketing and farm credit;

- promote and encourage the farm communities by working withthe Cooperation (extension) services to establish professionalstructures enabling farmers eventually to control the collec-tive production and marketing facilities;

- train the Operation's supervisory staff and farm workers bymeans of refresher courses, seminars, various specialisedtraining courses, and basic literacy classes;

- propose and perform, with prior approval from the SupervisoryA4inister, all action relating to the various aspects of ground-nut development in the area.

Article 3. Operation Groundnut is subject to the provisions of Decree No.33/PG-RM of March 25, 1972 referred to above.

ADMINISTRATION

Article 4. Operation Groundnut shall have a Board of Directors with thefollowing membership:

ANNEX 2Page 2

The Supervisory Minister or his representative

The Minister of Finance and Commerce or his representative

The Minister of Information or his representative

The Managing Director of the Mali Development Bank or hisrepresentative

The Minister of Transport or his representative

lThe Governors of the regions concerned, or their representatives

The Director of Agriculture

The Director of Rural Engineering

The Director General of Societe de Credit Agricole et d' EquipementRural (SCAER) or his representative

The Director General of Societe d'Exploitation des ProduitsOleagineux du Mali (SEPOM) or his representative

The Director General of Cooperation

Three experts appointed by the Supervisory Minister

Three representatives of the farmers

One representative of the workers

The Director of the Operation shall attend meetings of the Board with theright to speak.

Article 5. The Board of Directors shall:

- Take decisions regarding the programs and budget of the Operation.

- Examine the technical and financial reports on its activities.

- Authorize changes in the program.

- Rent or lease, without commitment of purchase, all moveablesand real estate.

- Take decisions on any financial, technical or administrativematters affecting the Operation.

The Council shall meet when convoked by its Chairman, at least twice yearly.

ANNEX 2Page 3

The decisions of the Board of Directors shall be taken by simple majority.In the case of a tie, the chairman shall cast the deciding vote.

The Board's proceedings shall be recorded in Minutes entered in a specialbook and signed by the secretary of the meeting.

Article 6. The decisions of the Board of Directors shall not be enforceableuntil approved by the Supervisory Minister, within a maximum of 15 days ifhe did not chair the meeting.

MANAGEMENT

Article 7. Operation Groundnut shall be headed by a Director appointed bya Decree adopted in Council of Ministers at the proposal of the Minister forRural Development. The Director shall be under the authority of the DirectorGeneral of Agriculture.

Article 8. The Director of the Operation shall each year prepare a programof activities in consultation with the Departments and Organizations con-cerned. This program shall relate to:

(a) Production and marketing activities in the Operation's areas.

(b) Extension of all or part of the Operation's activities to newareas.

(c) The possible extension of the scope of the Operation to otheraspects of groundnut production, in accordance with its objectives.

(d) Preparation of the annual operating budget.

Article 9. Each year at the end of the season the Director shall submit areport on the performance of the annual program. He shall also prepare afinancial balance sheet. These documents shall be forwarded to the PublicAuditor for examination and submitted to the Board of Directors for approval.

Article 10. Operation Groundnut is established for an unlimited duration.In the event that it be dissolved, return of the property shall be settledby the Board of Directors after consultation with the Government.

Article 11. The Ministers of Finance and of Rural Development are responsible,each in 1his own field, for implementation of this Decree, which shall be re-corded, published and communicated wherever necessary.

Operation -4rac&ii4ae

Area - eroduction, Yields, ,.arketLincig

1 967 1968 1 969 1 970 1971 1972/

Area undergroundnuts (ha) 46,h0 hS650 71,630 102,63 92,360 99600

Production (tons) 2 3,Coe"u 24,30U 54,0UU0 6c3,"0 75,20W 76, 370

Yi'eld', kg/hna 313 7L4 663 8 767i

i~Ia-rke ted Production(tons) 1 u,"OtJ 1 4.,u0 3d,100U 4b,0Uu 44~,uuu- hu , uuu

Source: MiLnistère de la e9roduction., Operation Arachide.

lA1972 being ani exceptionally bad year., figures quoted for this year are partly estimratedon the basis of past trend.

September 26, 1973

MALI

INTEGRATED RURAL DEVLOPMD4T PRDJECT

Operation Arachide

1967 1968 1969 1970 1971 1972

Use of Fungicides/Insecticides

Groumdnut area (ha) 6,,000 10,000 i ,000 19,000 22,000 32,000

% of total area 14 20 15 18 24 32

- on sorghun/millet area (ha) 2,000 10,000 13,000 11,000 20,000 23,000

% of total area - - - - - 20.u

Use of Fertilizers(groundnuts)

Area (ha) 2,000 5,000 ' 6,0o0 19,000 23,000 36,000

% of total area 4 10 8 19 25 36

Distribution of ImprovedSeeds (tons) 133 812 1,042 1,540 1,501 1,580

Ox-Draim Implements Distributed(numier of units)

Multicultivators -9 ô46 7u9

Seeders - _ _ 213 544

Litters 3 19

Carts - 132 157 395 60`19

Source: Ministère de la Production - Operation Arachide

SepteIrtber 26, 1973

MALI

INTEGRATED RURAL DEVELOIkMT PROJECT

Operation Arachide

Financig

1967 1968 1969 1970 1971 1972 Total

FAC

Capital inrvestments b2.2 51.9 110.7 15.7 4o.3 15.d 316.6Personnel costs 195.5 163.1 223.0 212.7 230.5 188.5 1,213.3Operating costs 75.3 60.0 89.6 75.2 75.5 36.8 412.4

Subtotal 353.v 27b.u 4z3.3 3u3.6 346.3 z41 .1 1j942-3

FED

Capital investments 3.1 z1.3 ô.4 1.3 3z.;e 51.7 118.0Personnel costs 45.2 - - - 45.2

Subtotal 48.3 21.3 8.4 1.3 32.2 51.7 163.2

Governmenti/ 163.0 163.0 163.0 163.0 223.0 216.0 1,091.0

Farmers' Contribution 13.0 37.0 57.0 110.0 160.0 203.0 580.0

TOTAL 577.3 496.3 651,7 577.9 761.5 711 .d 3,776.5

j,/ Very tentative estimate quoted by Operation Arachide. No reliable accounts exist to support these figures.

i/ Farmers' contribution: f ai.a inputs bought for cash or on credit - fertilizers, fungicides, seeds,ox-drawn equipment.

September 26, 173

H I't

ANNEX 3Page .1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

CROPPING PATTERNS, INPUTS, YIELDS AND PRODUCTION

A. Cropping Pattern and Crop Rotation

1. The main cash crops grown in the project area would continue tobe groundnuts, millet and sorghum. Some cotton and maize are grown in theSouth Western part of the project area where yearly rainfall exceeds 900 mm;and rice is grown in areas along the River Niger. Data on labor requirementsand cultivation schedule are given in Tables 1 and 2. Information on farmsizes and cropping patterns is scant. Annex 15 provides some information onthese points.

2. Cropping pattern and crop rotatioa varies according to the differentecological zones of the project area; and wbuld tend to change on participants'farms as the farmers move through the various technical stages of development.In general, however, the cropping pattern employed would be designed to achievethe following:

(i) self sufficiency in food crops for the farm family;

(ii) elimination of labor bottlenecks at times of landpreparation, weeding, and harvesting;

(iii) permit cereals following groundnuts in the rotation tobenefit from the residual effect of fertilizer appliedto the groundnuts.

3. A typical rotation for a farm using fertilizer would thus be:Year 1 (Y1) groundnuts; Y2, millet/sorghum; Y3, groundnuts; Y4 millet/sorghum;Y5 and 6, bare fallow. This rotation is almost universal in the project area.

B. Technical Recommendations to be made under the Project

4. The technical project recommendations are the result of continuingresearch and experimentation and field results in Mali and elsewhere in WesternAfrica. Recommended timing of critical operations are shown in Table 1 andthe estimated impact of recommended techniques on yield is at section C.1.Principal recommendations are as follows:

ANNEX 3Page 2

Groundnuts

If correctly implemented.the recommended improvements would increasethe basic yield at least by a factor of 2.4. Key elements are:

(a) Early sowing. Duration of rainfall is the most important constraint,and early sawing is the only means of ensuring that the completegrotndnut growing cycle falls within the rainy season. The optimalperiod for sowing is from end of May to the end of the first twoweeks of June; within this range optimum dates have been determinedand publicized for each OA sector. Sowing at the correct time in-creases the basic yield of 500 kg/ha by a minimum of 20% or 100 kg/ha.After the recommended deadline for planting, every day of delay re-duces the potential yield by an estimated 1%.

(b) Spacing. One of the causes of the low yield from groundnute tradi-tionally cultivated is wide spacing, usually about 40,000 plants/ha,against optimums of 90,000 to 110,000 plants/ha for the heavilybranched type 28-206 groundnuts; and 150,000 to 170,000 plants/hafor the less heavily branched type 47-10 varieties. These densitiesrepresent seed rates of 100 and 150 kg of seed per hectare respec-tively, compared with about 40 kg dnder traditional cultivation.Dense sowing, which is also the beSt method for combatting therosette virus disease, improves the basic yield by a minimum of40% or 200 kg/ha.

(c) Improved varieties. Two varieties suited to the ecological condi-tions of the groundnut zone in Mali have been selected, and aredistributed to growers:

(i) for the southern area with more than 700 mm of rain per year,the Virginia type, variety 28-206, with a long 120-day growingcycle. This variety is suitable for most of the groundnut zone(nearly 70% of the proJect atea);

(ii) for the northern area with less than 700 mm of rain per year,the Spanish-type variety 47-10, with a short 90-day cycle;47-10 is hardier and more drought resistant than 28-206.

Farmers can retain their own seed of the above varieties but seedsof the 28-206 variety need replacing every four years and thoseof the 47-10 variety possibly every three years. By the end ofthe project development period, about 70% of farmers in the projectarea are expected to be using seed of improved varieties. The useof improved seeds will increase the basic yield by a minimum of 20%or 100 kg/ha.

ANNEX -Page 3

(d) Seed dressing. After sowing, untreated seeds are subject to attack,)y various pests; often farmers have to sow a second time, or as aminimum to fill in gaps. In order to ensure a full stand, it isrecommended that seed is dressed with Thioral at a rate of 1OOg/kgof undecorticated seed nuts. The active ingredients of Thioral arean equal mixture of an insecticide (heptachlor) and a fungicide(Thirame). Thioral is very persistent and provides good protectioneven if sowing is followed by a period of drought and germinationdelayed. Farmers will also be recommended to use a benzene hexa-chloride insecticide, at a rate of 50 g/100 kg of seed to protecttheir seed stocks. The use of fungicide will increase the basicyield by a minimum of 10% or 50 kg/ha.

(e) Mineral fertilizer. Heretofore, the groundnut operation had rec-ommended a complex and expensive NPK fertilizer at a do3age of110 kg/ha. More recent research has revealed that single super-phosphate (21% P205) applied at a rate of 65 kg/ha has had thesame beneficial impact on yield at a cost of some 30% lower. 1/This fertilizer, distributed to farmers at present, would continueto be used under the project and will contribute to increase thebasic yield by a minimum of 50% or 250 kg/ha. Research will continuein an endeavour to seek more economical fertilizer formulas adaptedto the various soils and crop rotations of the project area.

(f) Ox-drawn implements. The use of ox-drawn implements is spreadingin Mali, and demand for ox-drawn implements increasing rapidly.Distribution of implements, on credit, under the project will,however, be subject to closer supervision than in the past. Inparticular as a prerequisite to qualifying for implements farmersmust meet the following criteria: (i) have at least 1.5 ha clearedand stumped; (ii) possess 2 young oxen suitable for work; (iii) beable to contribute a down payment of 1/3 of the cost of implements.The basic implement unit would comprise a seed-drill, which willensure proper spacing; a multipurpose toolbar with a plowshare (forcereals); hoeing and cultivating tynes. These implements permittimely land preparation and thus early sowing; but their use has notshown any effect on groundnut yield. A groundnut lifter and a1,000 kg capacity cart frame with tires would be optional itemsavailable to farmers on credit. The quantity and estimated costof implements to be supplied under the project are shown in Annex 11.

1/ Nitrogen, the principal requirement of cereals, is provided by the ground-niuts which respond particularly to phosphate application.

ANNEX 3Page 4

Cereals

6. It is the purpose of the project to achieve a closer associationbetween the production of groundnuts and cereals. The mechanism in theabsence of high yielding varieties of cereals accepted for consumption inMali, is based on the cereals benefitting from better cultivation, seeddressing, and the residual effects of fertilizer used on groundnuts:

(a) Residual fertilizer effect. A rotation scheme is recommended inwhich millet and sorghum follow, groundnuts, to permit the formerto benefit from the residual effects of mineral fertilizer appliedto groundnuts. The resulting effect on yield has been "stimatedat 150 kg/ha or an increase of about 25% on the basic yield. Usingthis rotation, the nutrient reserves of the soil are better utilizedby the succession of two plants with different requirements. Inthe absence of acceptable varieties responsive to fertilizers (atleast at present cereal prices) it is not proposed to promote thedirect application of fertilizers to millet and sorghum under theproject. Indeed the only new input employed would be seed dressing.

(b) Seed dressing. Farmers would be recommended to use Green Thioralwhlch is a compound of insecticide, fungicide and bird repellent(anthaquenone). It ensures more regular germination, especiallyin dry periods and an average yield increase estimated at 90 kg/ha.

(c) Deeper plowing. Made possible by ox-drawn implements, deeperplowing has been shown to have a positive effect on yields ofmillet and sorghum. The effect is very apparent, has beendemonstrated at Bambey in Senegal and confirmed by observationsiu the 0À operational area. Yield increase from deeper cultivationhas been estimated as being as much as 175 kg/ha.

(d) Other recommendations. Other rec.emmendations made to farmerswould be concerned with the maintenance of soil structure andfertility, and combatting soil erosion as land clearing increasesand more intelisive cultivation develops. Along these lines, aminimum 2 year fallow would be recommended, and OACV staff wouldprohibit clearing and uprooting of cover on slopes of more than1%. Contour plowing would be recommended.

C. Yields and Production

Y ields

7. The table below summarizes the anticipated effect on yields ofgroundnuts and millet/sorghum of the techniques and inputs recommended underthe project.

ANNEX 3Page 5

Estimates of Impact of Recommended Techniques on Yield

Croundnuts Millet/SorghumZ. kg/ha Z kg/ha

Basic Yield 100 500 100 600

Early Sowing 20 100 - -Correct Density 40 200 - -Use of Fungicides 10 50 15 90Improved Seeds 20 100 - -Fertilizer Application iand Residual Effect 50 250 25 150

Deep Plowing Implements - - 30 175

Total 240 1,200 170 1,015

Production

8. Calculations of project production are based on annual estimatesof the distribution of project farmers by categories using recommeitded prac-tices and inputs. This distribution is shown in Tables 4 and 8. F'roject pro-duction estimates are given in Tables 5 and 9.

ANNEX 3Table 1

MAL I

INTEGRATED RURAL DEVELOPMENT PROJECT

Cultivation Schedule

May June July Aug. Sep. Oct. Nov.

1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3

Groundnuts: 28-206 variety

Land Preparation

Sowing

1st weeding and fertilizer

2nd weeding

3rd weeding (optional)

Harvesting

Groundnuts: 47-10 variety

Land Preparation

Sowing

lst weeding and fertilizer

2nd weeding

Harvesting

Sorghum/Millet

Land Preparation

Sowing

1st weeding

2nd weeding - thinning & earthing

Harvesting

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Labor Requirements for Groundnut and Cereal Production(per hectare)

Time Required

Procedure Manual Cultivation With Ox-Drawn ImplementsMan Days Man Days Animal Days

Groundnuts

Land preparation 12.50 13.00 3.75Seed shelling 8.50 8.50 -Seed dressing .25 .25 -Sowing 10.00 2.00 1.00Fertilizer application and Ist weeding 3.00 1.00 -2nd weeding 25.00 10.50 3.003rd weeding 18.75 6.00 3.00Harvesting/Threshin, 26.25 22.50 2.50Internal transport - 12.00 5.75 2.00

Total 116.25 69.50 15.25

Sorghum/Millet -2

Land preparation 12.05-8.50 10.00-6.50 4.00-3.25Sowing 2.05 2.00 1.00lst weeding 12.00 6.00 3.00Thinning 3.00 3.00 _Earthing 6.25 2.00 1.002nd weeding 12.00 6.00 3.00Harvesting/Threshing 19.00-25.75 24.00-27.25 -Internal transport 10.00- 9.00 5.75 2.00

Total 77.25-79.00 58.75-58.50 13.25-14.00

1/ Based on a 1,200 kg/ha yield both under manual and ox-powered cultivation. Ox-drawnimplements include: multicultivator, seeder, groundnut lifter and cart.

2/ In the cases where two figures are quoted, the first refers to sorghum and the second (D

to millet. Labor requirements for harvesting operations and transport are based on a900 kg/ha yield for sorghum and a 725 kg/ha yield for millet.

Source: IRAT - Operation Arachide

September 21, 1973

MALI

INTEGRATED RURAL DEVELOPMENT PRUJECT

Area of Groundnuts Grown under QACV Supervision by Sectors

and Years in Project AreaPre (hectare) PY7

Sectors Prolect Pyl PY2 PY3 _P6 Onwards

Koulikoro - Banamba 16,900 18,300 20,550 24,300 27,000 28,200 29,000 29,400

Kolokami 19,700 21,300 24,150 26,750 28,700 29,700 30,400 30,800

Kita 37,500 38,200 39,000 39,750 40.,600 41h,300 42,200 42,900

Kayes - Kenieba -Bafoulabe25,500 26,800 28,400 36,000 39,100 40,h400 41,200 42,100

San Segou - 26,000 30,000 37,000 42,000 44,150 45,85o

Total 99,600 104,600 138,100 156,800 172,400 181,600 186,950 191,050

The above table could be read to imply that as a result of the project the area of groundnuts grown underimproved methods would increase from 99,600 to 191,050 ha. Tbis is not 80, since vithout the projectadditional,but fewer,farmers would adopt the improved techniques; thus in calculating the economic rate ofreturn, see Annex 16, an adjustment has been made to take this into account.

b 9

October 5, 1973 W

HALl

INTEGRATED RURAL DEVELOPtEST PROJECT

Area under Oroundnuts: Diffusion of Modern Techniques in Project Area

PreProject pyl pyil/ PY4 Prc M PY7 Onwards

ha 7. ha 7 ha % ha % ha 2 ha 2 ha % ha 2

Total area cropped 99,600 100 104,600 100 138,100 100 156,800 100 172,400 100 181,600 100 186,950 100 191,050 100

Timely sowing 49.900 50 57,500 55 62,100 45 78ï400 50 94,800 55 108,900 60 112,100 60 114,600 60

Correct density 30,100 30 36,600 35 41,400 30 54,800 35 77,500 45 90,800 50 93,400 50 95,500 50

Using fungicides 32,350 32 43,900 42 55,200 40 70,500 45 86,200 50 99,800 55 102,800 55 105,000 55

Using improvedpseeds 49,000 49 60,600 58 75,900 55 94,000 60 120,600 70 127,100 70 130,800 70 133.700 70

Applying fertilizers 36,150 36 49,100 47 55,200 40 79,500 45 94,800 55 99,800 55 102,800 55 105,000 55

Ox-powered cultivation 2,400 2 4,350 4 7,450 5 13,200 8 20,950 12 30,400 17 35,000 19 46,300 24

1/ Decreased in percentages due to the addition of 26,000 ha of the San Segou sectors where no improved techniques are used.

See footnote to Table 3.

October 8, 1973

zIi

MALI

INTEGEATED RURAL DEVELOPMENT PROJECI

Estir ted Production .ad Yi.ld of Croundeut in Prriect Area

(are. ie he; production in m tee., yield ie kg/ho)

Production with-rt improv.eent ----------------- n_t--------_- --------------- otp Due to Mode- Tec --niq ---------------------------------------------------- Total Production -nd Average Yield under Proiect

Tinely Soving Correct Density Use of Fongicides Use of Improved Seeds Appliration of Pertilîcems

Total are.

Years cropped Production i. Are. Production Area Prodction 3 Ares Production _/ Aret Production _ Are. Production Total Production Average Yield

Preproject 99,600 49,800 49,900 4,990 30,100 6,020 32,350 1,620 49,000 4,900 36,150 9,040 76,370 767

pY I 104,600 52,300 57,500 5,750 36,600 7,320 43,900 2,195 60,600 6,060 49,100 12,275 85,900 821

py2 138,100 69,050 62,100 6,210 41,400 8,280 55,200 2,760 75,900 7,590 55,200 13,800 107,690 780

PS 3 156,800 78,400 78,400 7,840 54,800 10,960 70,500 3,525 94,000 9,400 70,500 17,625 127,750 815

py4 172,400 86,200 94,800 9,480 77,500 15,500 86,200 4,310 120,600 12,060 94,800 23,700 151,250 877

0Y57 181,600 90,800 108,900 10,890 90,800 18,160 99,800 4,990 127,100 12,710 99,800 24,950 162,500 895

py6 186,950 93,475 112,200 11,210 93,400 18,680 102,800 5,140 130,800 13,080 102,800 25,700 167,285 895

PY7 191,050 95,525 114,600 11,460 95,500 19,100 105,000 5,250 133,700 13,370 105,000 26,250 170,955 895

1/ Basic yield 500 kg/ha .edecortic.ted2/ Additi .al yieldc 100 kg/ha3/ 200 kg/h.4/ " 50 kg/ho3/ O 100 kg/h.6/ "a , 250 kg/ha

Se. footnote to Table 3

October 8, 1973

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Incremental Groundnut Production Induced Directly by the Project

Pre PY7

Area (ha) Proiect PY1 PY2 PY3 PY4 PY5 PY6 Onwards

- without the project 1 99,600 103,700 135,200 2/ 148,700 21 156,400 159,000 159,000 159,000

- with the project - 104,600 138,100 156,800 172,400 181,600 186,950 191,050

Increment - 900 2,900 8,100 16,000 22,600 27,950 32,050

Average Yield (kg/ha undecorticated)rounded

- without the project 767 756 697 6 697 3 670 667 667 667

- with the project - 821 780 815 877 895 895 895

Increment - 65 83 118 207 228 228 228

Productionrounded

- without the project 76,370 78,430 94,170 100,920 104,770 106,070 106,070 106,070

- with the project - 85,900 107,690 127,750 151,250 162,500 167,285 170,955

Increment - 7,470 13,520 26,830 46,480 56,430 61,215 64,885

1/ Without project situation assumes that some additional farmers will grow groundnuts under improved methods, and some existing farmersnow using improved methods would further increase their hectarage and productivity.

2/ Sharp increase in PY2 and PY3 reflects inclusion of Segou Region in project area in PY2 (26,000 ha) and Kenieba district in PY3 (6,650 ha).

3/ Average yield declines due to inclusion of Segou Region and Kenieba district with their low traditional and non-improved yields. |

October 8, 1973

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Area of Sorghum and Millet grown under OACV Supervision

by Sectors and Years in Project Area

(ha)

Pre PY8

Sectors Project pyl PY2 PY3 PY4 PY5 py6 PY7 Onwards

Koulikoro - Banamba 19,050 19,650 20,250 21,700 25,250 27,850 28,230 28,670 28,870

Kolokani 26,000 26,700 27,450 29,150 30,900 32,900 33,3h0 33,780 33,980

Kita 40,5°00 41,300 42,800 43,700 45,)450 45,850 46,390 >47,050 >47,400

Kayes - Kenieba - 28,450 29,100 29,550 33,850 35,450 36,800 36,840 37,400 37,670

BafoulabeSan Segou - - 114,250 116,000 118,150 120,250 1 21.,670 123,000 123,850

Total 114,000 116,750 234,300 244,400 255,200 263,650 266,470 269,900 271 ,770

The above table could be read to imply that as a result of the project the area of

millet and sorghum grown under improved methods would increase from 114,000 to 271 ,770 ha.

This is not so since-without the project additional but fewer farzners would adopt the

improved techniques; thus in calculating the economic rate of return, see Annex 16, an

adjustment has been made to take this into account.

October 11, 1973 J

NALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Area under Soro_hur and Millet: Diffusionof Modern Techniques in Pro,ject Area

Pre PYHProject F?Y1 PY2 1 PY3 PYL PY; PY6 PY1 Onwards

Total % Total % Total % Total % Total % Total % Total 5 Total % Total %

Area cropped 114,000 100 116,750 100 234,300 100 24U,900 100 255,200 100 263,650 100 266,470 100 269,900 100 271,770 100

Usirg fungicides 22,950 20 36,150 31 67,100 29 87,o50 36 109,600 43 130,800 50 133,200 50 135,000 50 135,800 50

Fertilizer Residualeffect 22,500 20 27,100 23 40,000 17 44,500 18 54,500 21 69,300 26 85,200 32 86,400 35 87,000 32

Deep ploughing 2,800 2 2,950 3 5,200 2 11,900 5 20,350 8 28,000 11 37,050 14 41,750 15 47,950 18

1/ Decreases in percentages due to the addition of 1,114 ha of the San Segou sectors where no improved techniques are used.See footnote to Table 7.

October 9, 1973 t ,

(D1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Estimated Production and Yield of Sorghum and Millet in Project Area

(area in ha, production in m tons, yield in kg/ha)

Production without Improvement ------------------- Incremental Output Due to Modern Techniques---------------------- Total Production/AverageYield under Project

Use of Fungicides Fertilizer Residual Effect Deep Plowing

Total Incrementa 3 Incrementa , IncrementO 3 Total Aver.Years Area Production 1/ Area Output Area Output Area Output - Production Yield

Preproject 114,000 68,400 22,950 2,065 22,500 3,375 2,800 490 74,330 652

Pi 1 116,750 70,050 36,150 3,255 27,100 4,065 2,950 515 77,885 667

PY 2 234,300 140,580 67,100 6,040 40,000 6,000 5,200 910 153,530 655

PY3 244,900 146,940 87,050 7,835 44,500 6,675 11,900 2,085 163,535 668

PY4 255,200 153,120 109,600 9,865 54,500 8,175 20,350 3,560 174,720 685

py 5 263,650 158,190 130,800 11,770 69,300 10,395 28,000 4,900 185,255 703

PY6 266,470 159,880 133,200 11,990 85,200 12,780 37,050 6,485 191,135 717

py7 269,900 161,940 135,000 12,150 86,400 12,960 41,750 7,305 194,355 720

PY 8

onwards 271,770 163,060 135,800 12,220 87,000 13,050 47,450 8,305 196,635 724

1/ Average yield: 600 kg/ha.2/ Average incremental yield: 90 kg/ha.3/ Average incremental yield: 150 kg/ha.4/ Average incremental yield: 175 kg/ha.

See footnote to Table 7.

October 11, 1973

MALI

INTEGRATED RURAL DEVELOPMe1NI IEOJECT

Incremental Sorghum and Millet ProductionInduced Directly by the Project

Area (ha) P~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Y8

Area (ha) tPre PY1 PY2 PY3 MYP PY5 PY6 PY7 onwards

- Without the Proiectl/ .11h1000 116,750 233,930 2/ 242,320 2/ 2h7,950 253,450 253,450 253,450 253,450With the Project - 116,750 234,300 2t44,9o0 255,200 263,650 266,470 269,900 271,770

Increment - - 370 2,580 7,250 10,200 13,020 16,450 18,320

Yield (Kg/ha threshed grains)

- Without the Project 652 652 626 2/ 624-/ 624 623 623 623 624- With the Project - 667 655 668 685 703 717 720 724

Increment - 15 29 44 61 80 94 97 100

Production (Tons threshed grains)

- Without the Project 74,330 75,980 146,510 151,320 154,700 158,000 158,000 158,000 158,000- With the Project - 77,885 153,530 163,535 174,720 185,255 191,135 194,355 196,635

Increment - 1,905 7,020 12,215 20,020 27,255 33,135 36,355 38,635

1/ Without project situation assumes that some additional farmers will grow groundnuts under imuroved methods and some existing farmers now using improvedmethods would further increase their hectarage and productivity.

2/ Sharp increase in PY2 and PY3 reflects inclusion of Segou Region in project area in PY2 (114,250 ha) and Keniebo Llistrict in PY3 (3,700 ha).3/ Average yield declines due to inclusion of Segou Region and Kenieba district with their low traditional and non-improved yields.

October 9, 1973

ol

ANNEX 4Page 1

MALI

LINTERGRATED RURAL DEVELOPMENT PROJECT

IMPROVEMENT OF RURAL TRACKS -

A. General

1. OA, until now has relied for its extension and marketing activitieson deteriorated secondary roads, and natural tracks created by the recurrentpassage of vehicles travelling cross-country through open bush and savannah.

2. Transportation costs on the roads and natural tracks are very high;OA has been able to support these only because its truck fleet has been largelyfinanced by external grant funds. A requisite of smooth implementation of theproposed project lies in the betterment of road conditions throughout theproject ar~éa. Government is aware of the need to improve roads, and since1970 has undertaken a comprehensive progra. (financed by IDA Credit 197-MLI)to strengthen màintenance and improve selectid roads in the groundnut area.These programs, however, require extension and intensification.

B. Transport Infrastructure

3. The project area covers about 125,000 km of Western Mali, alonga line Tominian-Sadiola. It is divided into nine sectors which are the UAbasic field units; the condition of,the transport infrastructure varies ïreatlybotl- within and between these sectors.

4. The railway line of the Regie des Chemins de Fer du Mali (RCFM),passes through most of the project area. RCFMI and the connecting Senegaleserailway are Mali's main outlet to the seaport of Dakar in neighboring Senegal.Thie capacity and efficiency of these railways are expected to improve graduallyover the next few years as ongoing programs, partly financed by the Bank Group(Credits 384-MLI and 314-SEN and Loan 835-SEN) are implemented.

1/ The transport aspects and the road component of the proposed projectwere reviewed during the appraisal mission by a special task force whichincluded Mr. Ouatarra from the Direction Nationale des Travaux Publics(DNLP), rlr. Kante from "Operation Archide" (OA), and Hr. Doyen from PMWA.This annex is based on the task force's report, and on a recent studyandertaken by consultants (BCEOM) who were employed by DNTP to identifyt:ie requirements for road improvements in the project area in additionto those being undertaken in ongoing or planned IDA and FAC-financedprograms; for details of the latter see Appendix 2.

,A!NEX 4Page 2

5. In the hinterland of the Western Sectors (Kayes, Kita, Bafoulabeand Kenieba), the transport system is based on roads and tracks serving railwaystations. Road transportation in this zone will improve markedly in the futureas the DNTP progresses with implementation of its road betterment programs,mostly financed by external aid. The Central Sectors (Koulikoro, Banamba andKolokani) are linked with Bamako and Koulikoro by gravel roads, but need moreand better roads which will be provided under DNTP road betterment programs.Tlie Eastern Sectors (Segou and San) are served by a dense network of roads.Tihe infrastructures of the Eastern Sectors are adequate to support the projectand will not be subject to project financed rural track improvement. The extentof the road and track network in the Western and Central Sectors is given atTables 1, 2, 3, and 4.

6. Roads in the project area are classified in two broad categories(see Table 5):

(a) Major feeder roads - comprising roads which carry sufficient traffic,roughly more than 2,000 t per year, to warrant some form ofpermanent improvement and continuous mechanized maintenance.Two levels of improvement have been defined:

(i) Type A (Normal) for roads with more than 4,000 tof traffic per year;

(il) Type B (Minimal) for roads carrying'roughly between2,000 t and 4,000 t annually.

(b) Rural tracks - including unclassified rural roads andnatural tracks, link villages with one another and with majorroads. Although- not qualifying for permanent improvementseven to minimal Type B standards, these are essential forcrop marketing.

The length, classification and proposed improvement levels of roads servingthe Western and Central Sectors of the project area are given in Tables 2 to4. The project area is served by:

(i) about 2,200 km of major feeder roads which are (or would be oncompletion of ongoing betterment programs) under the responsibilityof DNTP; (see Table 3 - IV) and,

(ii) about 1,500 km of rural tracks which would be subject to spotimprovements under the project (see Table 4).

7. Government policy is (i) to make DNTP fully responsible for theconstruction and subsequent maintenance of mejor feeder roads; and (ii) toleave spot improvements (occasional repairs carried out mainly by manual labor)of tracks to local authorities or to agricultural development agencies.

ANNEX 4Page 3

8. The DNTP road program under the IDA-financed Highway MaintenanceProject, is progressing more slowly and at higher costs than expected; andby June 1974 only about 600 km out of tie total of 1,450 kml planned for better-ment under the project are expected to be completed. The remaining sectionsplus an additional 800 km probably will be considered under a possible ThirdHighway Project, tentatively scheduled for appraisal during the second semesterof 1974.

9. If, as expected, the remaining 1,200 km are subject to a projectbetterment program beginning later in 1975, all major feeder roads serving thearea would be improved to adequate standards by 1978; and the program for im-proving the roads serving the western part of the project area along the railway,where transport problems currently are most acute, would be largely completedby 1976.

C. Improvement of Rural Tracks

rhe Program

10. Small scale spot improvements on 1,500 km of rural tracks would befinanced under the project and carried out directly by OA. Execution wouldbe through small road gangs equipped with tipper trucks and a stock of manualtools. Their tasks would be limited to simple manual operations such as quar-rying, loading, spreading laterite and arranging rubble stones. The gangs'activities would be divided into:

(i) programmed improvement works on selected tracks in theperiod from April to October;

(ii) maintenance and emergency repairs from November to Marchin direct support of the marketing campaign, and farminput distribution.

11. Rural tracks to be improved under the project have been classifiedin two categories according to the amount of traffic they carry (see Table 5):

(i) TypeC - tracks carrying between 500 t to 2,000 t annually,comprising mostly links between marketing points and majorfeeder roads;

(ii) Type D - less important tracks, carrying less than 500 t,mainly those linking villages with marketing points.

The aim of the improvements, (details are in Table 6) would be:

ANNEX 4Page 4

(i) for Type C tracks - to provide a reasonable level of serviceabilityfor trucks during the dry season and to ensure year-round passageof general purpose vehicles (except during the height of therainy season); and

(ii) for Type D tracks - to allow the passage of heavy trucks withoutrisk of heavy damage during the crop marketing period (i.e. inthe dry season).

12. Provision would be made under the project to procure two graders,one For the Kita region, and the other for the Kolokani region. The DNTP

lquipment Department would be contracted for the repair and maintenance of these

graders. DNTP would lease other equipment as requested, in particular bull-dozers, to the OACV.

13. Average quantities of works needed to improve a typical 10 km sectionof rural track to C or D standard are given in Table 6. The size of the gangsand their distribution were determined on the basis of an estimate of the sizeof programmed works throughout the project development period. The proposedroad gangs and graders would provide the project with adequate capacity to

carry out all programmed improvements of C and D tracks over the period 1974 -1977, and,to maintain and repair roads and tracks on an ad hoc basis duringthe marketing season. The equipment and personnel to be attached under theproject to various sectors are as follows:

Kolokani andBanamba Kita Bafoulabe Kenieba Total

Road Gangs 1 1 1 1 4

Trucks (7 t) 5 5 4 3 17.`anpower 29 29 22 20 100

Grader (120 hP) 1 1 - - 2

Cost Estimate

14. Estimated capital costs for equipment and tools required to establishthe four road gangs are given in Annex 12 Table 7. The direct costs of pro-grammed improvement works and unprogrammed maintenance and repairs have beenestimated together on the basis of the annual operating cost of the four roadgangs and the rental cost of the two graders and bulldozers; these are sum-marized below:

ANNEX 4Page 5

.Istimated incremental cost of rural tracks improvement

(MF Million)Foreignas % of

Local Foreign Total total

Vehicles and equipment 37 /1 147 184 80Staff 39 - 39 -Operating Expenses /2 94 94 188 50Cost 170 241 411 59

/1 Including local handling charges, taxes and duties.

/2 Including taxes, salaries, fuels, lubricants, maintenance and repairof trucks, construction materials, hand tools, etc.

D. Organizational Arrangements

15. A special unit, Service des Travaux Routiers, would be establishedwithin OACV headquarters to plan and supervise the road activities of theproject. The unit would be headed by an experienced road inspector (Inspecteurdes Travaux Routiers), seconded from the DNTP. The road inspector would assumebroad responsibilities for the organization, planning and supervision of alltrack improvement activities of the project and for the efficient use of theroad gangs and of the equipment. He would be responsible for coordination ofthe project's annual track improvement program with DNTP. The proposed annualprogram would be submitted first to DNTP for comment and then for agreementon DNTP's support. The proposed program would include schedules for the useof the two graders procured under the project, and for the rental of otherDNTP equipment, in particular bulldozers. Each of the four road gangs wouldbe attached to a sector of the project and ;ould operate under the administrativeauthority of the Sector Chief who would supply them with funds, materials andfuel, and control their expenditures. Each gang would be headed by a gang lead-er to be seconded from DNTP.

E. Road Transport Costs in the Project Area

10. Road transport costs on classified roads are expected to decreaseby 30 to 40% over the period 1973 - 1978, as a result of DNTP programs fortihe betterment of major feeder roads and for strengthening road maintenance.The use of unclassified roads and rural tracks would be facilitated by smallscale improvements financed under the project. Estimates of trucking costsfor varîous types of roads in years 1972 and 1978 are given in Table 7.

ANNEX 4Page 6

Official freight rates have been set consistently lower than actual vehicleoperating costs. This, together with the very poor condition of the roadnetwork, has discouraged private truckers from participating in the collectionof the groundnut crop. Thus, OA has been compelled to organize its own fleet,which operates currently at low capacity and high costs. In the future, how-ever, and as road conditions improve, OACV would attempt to gradually reduceits involvement in trucking.

17. Existing freight price regulationi concerning road transport will bestudied under IDA's Second Highway Project (Credit 383-MLI). This study isexpected to provide the basis for revising eixisting prices so as to encouragethe development of a trucking industry of adequate capacity.

F. Economic Evaluation of the Road Component of the Project

18. The rural track improvement program is essentially a maintenancecum betterment work (average cost is about US$600/km). However, since theprogram is a major component of the entire project and involves an initialcapital investment of about US$400,000, a brief economic evaluation of itItas been separately performed.

19. The economic benefits from road improvements consist of: a) oper-ating cost savings to vehicles used (i) for transporting agricultural productsand farm inputs, and (ii) in OACV's operations; and b) induced increase irgroundnuts production due both to increased acreage under production and moreeffective use of extension services, medical and veterinary personnel.

On the basis of savings in vehicle operating costs above, the investment inthLe -.ural tracks yields an economic return of over 15% which indicates thatthe inciusion of the improvement program is economically justifiable.

ANNNEX 4Table 1

MALI

INTEGRATED RURAL DEVELOP 7T PROJECT

IMPROVEMEIT OF RUiLAL TRACKS

Length of Roads and tracksin the Western and Central Sectors

(kilometres)

Classifii4 For To be ProposedSectors in 1973 !/ Improvemerot Classified under

1974/77 g/ inI 1978 21 IDA ProjectM

Western 656 997 1,437 935

Central 6] 388 41 2 743 565

TOTAL 1,04h 1,409 2,180 1,500

1] Classified roads are the responsibility of DNTP - see Table 2.

g/ Roads for improvement by DNTP under ongoing or planned programs mostlyfinanced by external aids. Sane roads already classified in 1973 wouldbe improved : Western Sector 216 km, Central Sector 57 kn (total 273 km),see Table 3.

3/ Roads classified in 1978 will include roads classified in 1972 plus roadsimnproved in 1974/77 and not already classified in 1972, see Table 3.

1K/ Tracks of types C and D to be improved by road gangs financed under theIDA project, see Table 4.

5] Wes tern Sectors : Kayes, Bafoulabe, Kenieba, Kita.

6] Central Sectors : Koulikoro, Banamba, Kolokani.

December 16, 1973

ANNEX 4Table 2

MAI

INTEGRATED RURAL DEVELOPMENT PROJECT

IMPROVEMENT OF RURAL TRACKS

Roads Classified in 1972

Sectors Designation t Kilometres

WESTERN Bafoulabe - Djibourou - Kenieba (Guinee) 184Kayes - Sadiola - Djibourou 1 87Kati - Sebekoro - Kita 70Kita - Toukoto - Segeto 160Kita - Sirakoto (Guinee)

Total Western Sectors 656

CENTRAL Bamako - Kati - Kolokani i 124Kolokani - Didieni 65Koulikoro - Banamba 90Banamba - Borou - Bamandjoujou 109

Total Central Sectors 388

GRAND TOTAL | o,044

i _ __

..xc;L;er >, 1,)73

ANNEX 4Table 3

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Iprrove-n-t cf Rural Tre-ko

Improvemnnt uf Feeder ROeds 1974/77 Proara,

I INCLUDED 1N IDA CREDIT 383 1/

Ki lu,eetnesTons

SECTDdS TYPES DESIGNATION Ysar ITset Total

WESTERN 21 A Kit. - Didjan - Blti.klnak 10,000 (29) 30Kit. - Kokof.ta 7,000 60

90

B Didjan - NRmbiri 2,700 (19) 21B.ti,kalsa - NataI. 2,500 13Batia.kasa - Ta.fssadaga 3,000 13Kita - Sageberi 3,800 77Olanko - Bamafele 2,800 115Mahins - Tantidji 2,100 (;15) 121

360Total Western Secture 450

CENTRAL / A Kolokuni - Sirakorola (B) 8,500 (64) 54Masaant.ol - Tioribougou - Niokona- Niokna (B) 4,700 (55) 57

B Niokon- - Faladie (C) 2,500 (19) 20Rolokani - Sebekoro 2,200 42Sirakorola - Niasi.u 2,600 71

133Total Csntrel Se-tors 244

GRAND TOTAL 694

1/ Ses report PTR-52 a uf MNy 1970. Appraisal cf e Highway nuiotenans projeot - Republo cf MIli2/ Western Setotrs Kayet, BRfoolube, Kenieba, Kita3/ Central Sectore KRolikora, B.asabe, Kolokani4/ Type A Western Sertore 90 km

Central Se-to-s 111 km201 ku

Type B Western Sectors 360 klCeotral etotrs 133 ko

493 km.Grand Total 694

; rvised nu-ber uf kilometres

II INCLUDED IN FAC PROGRAM

Kilometres

SECTORS TYPES DESTGNATION yT-ar Inset Total

WESTERN B Tokukoto- Sefets 2,500 87

Toukouto - Ta.bAge 2,200 60Tookouto- Tondidji 2,000 75Msmbetr - Koorooninkoto 2,500 66Kayes - SOdiole - Dialufera 2,100 150

GRsND TOTAL -

III RECAPITULATION

1) Type A IDA 201 klDNTP- 1/16 km

- 217 kmc

2) Type B IDA 493 keFAC 438 ksDNTP1/ 261 km

1,192 ke

TOTAL 1,409 kn

1/ Total 277 km cf which 273 km alreedy ole.sified in 1973 (addititn 4 km)

IV ROADS CLA8SIFIED IN 1978

1) Ruads olaeoifisd i 1973 (.ee teble 2) 1,044 kb

2) IDA Ctedit 383 (see S ub-ve) 694 km

3) FAC Progran (ses ET abuvu) 438 km

4) DNTP Progran (ses 1/ cf III abuve) 4 kb

2,180 kl

Outober 7, 1973

ANNEX LTable 4

MALI

INTEGRATED RtRAL DEVELOPMENT PROJECT

Improvement of Rural Traclzs

TRACKS FOR IMPROVEMENTSKilome tres

Tons/Sectors Types Designation vear Inset Total

WESTERN Il C Sagabari - Balega 800 60Namala - Bangassikoro 1,600 20Djibouroa - Dialafora 1,900 34Sikoto - Toubafinian 600 25Djimekourou - Herokoto 1,500 54

193

D Sebekoro - Madina - Moro Moro 450 90Safeto - Dialan 200 40Sagobari - Karo - Kakofata 400 50Bougaribaya - Kokofata 450 10Sabagari - Gale 250 40Makariako - Segoune 400 10Kokofata - Bafing Kana 450 60Samboula - Yatera - Kassama 400 23Samboula - Tamboula 150 15Dialokoto - Faraba 450 40Toubafinian - Kouroukoto 100 43Makina - Neguetabali - Koulangoulan 450 65Solinte - Walia - Fatafing 400 82Kamansdo - Bamafele 450 38Malina - Kale 450 25Heroko - Moussala 150 14Tantidji - Bamafele 400 17Sadiola - Kakadian - Moussala 200 35Same - Ndagassenon 200 45

742Total Western Sectors 935

CENTRAL 2/ C Didieni - Falon 600 82Bananiba - Kiban 1,100 10Bananiba - Toubakoura 600 12

104

D Niokona - Fassa - Kolokani 100 50Sagabala - Samantara 200 35Kiban - Toukouroba 400 40Kiban - Toubakoro - Sebete 400 63Douraba - Koula - Tamani 100 33Massantola - Sirakoroba - Bamaniba 200 35Bamandjoujou - Mourdiak 400 30Mourdiak - Falou 100 70Koulikoro - Tougouni - Katiola 200 105

461Total Central Sectors 565

GRAND TOTAL 3/ 1,500

i/ Western Sectors: Kayes, Bafoulabe, Kenieba, Kita

2/ Central Sectors: Koulikoro, Banamba, Kolokani

32 Type C - Western Sectors - 193 kmsCentral Sectors - 104 kms

297

Type D - Western Sectors - 742 kmsCentral Sectors - 461 km

1,203

GRAND TOTAL 1,500

MALI

INTEGRATED RURAL DEvOEPFNT PROJECT

Improvements of Rural Tracks

Roads and Tracks Technz.cal Characteristics

Type of -i,oade A B C - D

1. Tons per year 4,000 to 10,000 2,000 to 4,000 500 te 2,000 less than 500

2. Clearing widtii m 9 7 5 4

3. Roadway widty m 5.5 4 3.50 3

4. Surfacing and ancillary Continuous laterite Discontinuous laterite Spot improvements Minimum spot

works 15 cm thick; 12 cm thick to insure passage & improvements to

Continuous ditches, outlets Ditches and outlets on improve riding cond- ineure passage;pipe and culverts, dikes and grade sections, small itions; annual ad hoc repairsconcrete fords dikes and stone fords grading and repairs

5. Serviceability for 7T throughout the year, except during dry season during dry season during dry

ti'uck during & immediately after season

rainsi) loading capacity 75 to 90% 70 to 85% 60 ta 75% 50%

ii) average spe Pe. 35 to 50 ka/h 20 to 40 km/h 15 to 25 km/h 15 to 25 km/h

iii) average transport costMF/kma 124 124 155 178 20h

6. Average cost of iniprove-ments (MF million/km)

i) operating cost 1.5 to 1.7 0.55 to 0.65 0.15 to 0,18 0.075 to 0.10

ii) total cost (inclidingtechnical assis ance &equiptenl ) 2.ic tG 2.35 o.o0 to 0.9U 0.25 to 0.28 0.135 tG o.16

7. Main use for CACV Transport of siielied ground- Transport of groundnuts fransport cf Transport of

activities. nuts frori secondarj solrage froin marketing potnts .e groundnuts frorL grolundnuts from

point, (seccas) to railway seccos and froin seccos sarrair marketing villages to

stazionIs & oil milIs ,o railway sDaînons points to seccos marketing poirtzs

October 7, 1l9'ix\7J r

ANN1X 4Table 6

MALI

INTEGRATED RURAL DEVELOPME!ÇT PROJWCT

Improvement of Rural Tracks

Scope of Works

JI fspe C Track

1 ) Works to be carried out

i) clearing of 5 m width,i) filling of potholes and hollows, reloading sandy stretches vith laterite

graveliii) construction of small dikes and fords across low points with rubbleiv) erasing rock outcrops

42) Average quantities for 1G lkm stretch

i) truck loads of laterite gravel : 65 to 120ii) truck load of rubble : 30iii) rock outerops 50 miv) number of working days 10 to 13

I ~Type D Track

1) t4orks to be carried out

.)' rîinimuwrn clearing to al:low truck passageil) filling of hoMlows and reloading sandy stretches with laterite gravel

-ii .) construction of small dikes and fords with rubble

2) Average guantities for 10 km stretch

i) truck loads of laterite gravel : 30 to 60i . r,ruck loads of rubble : 30

iiii nunber of working days 6 to 8

Il T'2asks ta be periÙmed by road gan

i) oul.-ting and removing trees and bushesii) quarrying and preparation of laterite and rubble

iii) loading and unloading of trucksiv) spreading and compacting of laterite, arranging rubble

October 7, 1973

ANIEX 4Table 7

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Improvement of Rural Tracks

Analysis of Trucking Costs in Project Zone(for 7T lorry)

` era,e uniJt costs for various types of roads and tracks (1 972 value)

Operating Operating Loading TransportCost Cost % on Capacity Cost

(MF/Km)]/ Paved roads % (MF/TK)?/

Paved 86.8 100 up to 10C) 24.8iïnproved gravel road 10v.6 125 85 - 95 32.6Feeder road Type A 124.2 145 80 - 95 4o.7

B 154.8 170 75 - 85 52.5Track l C 1783 210 60 - 75 69.1

D 203.8 240 60 - 70 85.7'nriaintained tertiary road 220.8 260 50 - 70 99.8Nat,ural track 233.5 275 50 - 60 115.2

1/ Including ail taxes and duties (representing about 22%), depreciations anddrivers wages.

2/ As for L] and assuming trucks only loaded on return trip tno payload carriedon the way to marketing points or villages). Operating c6st reduced by 10%for empty loads on roads beyond type B.

B. Estimates of average transport costs in project zone in 1972 and 1978

Western Sectors Central Sectors Eastern Sectors

1972 1978 1972 1978 1972 1978

i) Gathering (If/TK) 100 72 104 72 78 66

Dif'`erence between 1978 & 1972 28% 31% 15%

2) Deli.very (S,'/TK) 68 47 73 47 52 43

Differerice between 1978 & 1972 30% 36% 18%

October 7, 1973

ANNEX 5Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

FUNCTIONAL LITERACY PROGRAM

A. Background

1. Functional literacy programs were introduced to Mali in 1968 underthe patronage of UNESCO, FAC and FED. The main objective of a functionalliteracy program is to help individuals increase their productivity by teach-ing them the elements of reading, writing and arithmetic needed for a betterunderstanding of their work or business through "out-of-school" courses car-ried out in their native language. In countries with a limited educationalinfrastructure and serious financial constraints, such as Mali, a system offunctional literacy, if correctly managed, could be a satisfactory means ofspreading basic education at a low cost. In agriculture, the objective of afunctional literacy program is to help the farnier better understand, and thusapply more efficiently, teclnical innovations recommended by agricultural ex-tension services, and provide him with a knowledge of matters such as weightsand measures that prevents him from being the prey of the unscrupulous.

B. Organization

2. National Level. Responsibility for education in 1Mali is splitbetween the Ministry of Basic Education, Youth and Sports, and the Ministryof Secondàry and Higher Education and of Scientific Research. The lattercontrols Direction Nationale de l'Alphabetisation Fonctionnelle (DNAF).DNAF comprises two units: (i) a management unit which, at the request ofand in close cooperation witli Operations de Developpement, or industrialand commercial enterprises, carries out preliminary surveys, prepares programs,and generally implements AF programs and assesses their results; and (ii) avisual and audio aid production unit, which prepares and distributes posters,and other educational inaterials, including making radio broadcasts, necessaryfor the support of AF programs.

3. Rejqonsand zones. Mali is divided into AF regions in which amanager is responsible for the organization and control of all AF programs.The regional manager works in close cooperation with the managers of Opera-tions de Developpement and other enterprises for which AF programs are beingundertaken, and directs and coordinates the work of the chiefs of FunctionalLiteracy Zones (ZAF). In turn each ZAF comprises one or two AF districts,each with an average of about 40 AF Centers (CAF).

ANNEX 5Page 2

4. Functional Literacy Centers. A CAF, which is the basic unit ofthe AF program, is established in a village when requested by,the villagers,who elect an AF Committee and choose two literate volunteers (animateurs) toteach the AF courses. The villagers, led by the commlttee, build a shed tohouse the CAF. Here, the animateurs, after training by staff of ZAF, give AFcourses with the help of educational material and equipment supplied by theDNAF, anà1 with the assistance and under the supervision of both staff of AFand the ciperations de developpement or other agency involved. The animateursare not paid but are given food.

C. Operation Arachide

5. OA requested a functional literacy program geared to its require-ments in 1969. During the first year of the program emphasis vas laid onexplaining to farmers, using practical demonstrations, the systeus employedby OA in crop marketing and credit distribution and collection; importantly,in this phase farmers vere taught such things as how to read the scals usedto weigh their produce and to check payments made for their produce. Follow-ing this relatively successful first attempt, AF vas extended to other vil-lages, and the curriculum enlarged to cover improved methode of cultivationbeing recommended by OA extension staff. OA basic sector chiefs act as ani-mateurs for the first two months of operation of any new CAF, and thereafterremain as close adviser to the regular animateurs and attend the classes.The animateurs are subject to the supervision of the ZAF chief, who makesregular visits, and they attend training sessions at the Regional AF office.The AF program and its supporting educational naterial are the subject ofcontinuing review, to take into account OA requirements and farmersV needsand reactions. An AF program cycle extends over two years, and is Limitedto the dry season when field work in at a minimum. It is estimated that, atthe end of 1973, 30,000 farmers will have completed AF cycles connected vithOperation Arachide. The joint OA/AF target is to educate at least one activemember of each farm family through the AF system.

D. AF Program in the Proposed Project

6. lp to now, a complete evaluation of the value of AF programa ln Maliin general, and within OA in particular, has not been made. For this reason,Government's request that an additional 3,000 CAF be establlshed vithin thefive year project development perlod could not be accepted at appraisal. Sucha program vould be very expensive, an estimated MF 1.2 billion (US$ 2.9 mil-lion), and expenditures at such a level would be unvise vithout a carefulassessment of the effectiveness of AF. Consequently, a component of theproposed project would be an evaluation of past and ongoing AF programa, andpending the conclusion of this evaluation, a limited prograi of expansionfor CAF in PY1 through PY3 as followa:

ANNEX 5Page 3

1973 1974 1975 TOTALNew

1 2 1 2 1 2 Centers

Existing Centers 249 - - - - - -

" ~ "i 115 115 115 - - - -

" " 225 225 225 225 - - -

New Centers - 265/1 265 265 265 - 265

"l "155 155 155 155 155100 100 100 100

100 100 100100 100

Total Centersin operation 589 605 760 745 620 455 -

Total NewCenters 720

/1 Already committed at appraisal.

At the end of 1974, and after consideration of the findings of the evaluationstudy, a decision would be made whether the last 200 CAF scheduled for 1975would be opened or not. In the former case, alternative financing wouldhave to be found for their continuation after 1975, but at this time and ifthe findings of the study vere positive, Mali's AF program as a whole probablycould be the subject of a major functional education project.

7. Cost of the proposed Functional Literacy Program. The coste ofthe AF component of the project are estimated at MF 185 million (US$ 441,000);these costs are summarlzed in Annex 12, Table 8.

ANNEX 6Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

RESEARCH PROGRAMS

A. Background

1. Institut d'Economie Rurale (IER) of the Ministry of Production isresponsible for agricultural research through its Divisions des RecherchesAgronomiques (DRA). DRA is divided into 7 sections: (i) nurseries;(ii) seeds; (iii) plant introductions; (iv) regional trials; (v) fruitcrops and market gardening; (vi) cotton and fibres; and (vii) food crops.Under the proposed project OACV would liaise closely with the seeds sectionswhich are responsible for the multiplication of seed of improved crop varie-ties; the seeds section operates seed farms, c,ntrols stores and distributesthe seed it produces. The seed section assists OA in supervising the produc-tion of seed produced by OA sponsored seed growers. Cooperation in the pastbetween OA and the section has been satisfactory and would continue duringthe proposed project. The project would also maintain permanent relationswith the food crops research section.

2. Food Crops Section. This section is managed by an expatriate re-search worker provided by Institut de Recherches Agronomiques Tropicales etdes Cultures Vivrieres (IRAT). The section comprises four units: (t) asoils unit, with a station at Sobuta, and managed by an IRAT staff member;(ii) an oil seeds unit, with a main station at Katibougou and a substationat Kita, managed by an expatriate supplied by Institut de Recherches desHuiles et Oleagineux (IRHO); (iii) a maize, millet and sorghum unit managedby a Malian research worker with a main station at Sotuba and a substationat Seno, and (iv) a rice unit managed by an IRAT staff member wtth principalstations at Mopti and Kogari, and a substation at Sikasso. All units havefield trials located strategically throughout the country.

3. Research Programs.

(i) Groundnut. Past and ongoing research has concentrated onvarietal improvement and this continues with new varietiesbeing screened for yield potential, growing cycle and re-sistance to rosette disease and drought. Other wark isconcerned with fertilizers, pest control, cultural methodsand use of ox-drawn equipment. New varieties or methodsthat give promising results at Katibougou or Kita aretested on local adaptation trials before being issued orrecommended te farmers. The adaptation, or so-calledmultilocal, trials are carried out at 2 or 3 sites per

ANNEX 6Page 2

sector under conditions similar to those prevailing on agood average farm in the sector. These trial sites alsoserve as demonstration farms in the training of project.staff and farmers.

(ii) Millet and sorghum. Research with these crops is to firidnew high yielding varieties suited to the country's ecolo-gical conditions and with tastes and other qualities accep-table to the local population. Some ten local millet var-ieties exhibiting yield potentials of between 2 and 3tons/ha under experimental conditions have been retainedfor further development but so far have not exhibited suf-ficient promise to warrant their distribution to farmers 1/.Research on sorghum has produced more promising results;but so far no high yielding variety acceptable to localtastes has emerged. In the absence of high yield poten-tial varieties the units' work on fertilization, rota-tions, soil fertility maintenance, and use of ox-drawnequipment etc., while interesting, is of linited practi-cal application.

B. Project Research Component

4. The research component of the project would be to assist the con-tinuation and intensification of ongoing research programs on groundnuts andcrop rotations and help the soils unit to conduct the soil surveys and pre-pare the soils maps needed for OACV's and other agricultural development pro-grams:

(a) Groundnut work. The project would provide financial assistancefor the following:

varieties: continuation of variety trials on high yieldpotential material;

agrocides: trials with fungicides, insecticides and herbi-cides;

fertilizers: nutrient requirements, timing of applications,residual effect on cereals in rotation;

culturaltechniques: timing, plant population, soil preparation;

1/ This is not a peculiar to Mali; measures to improve the produc-tivity of millet have proved singularly unrewarding elaewhere.

ANNEX 6Page 3

equipment: testing of hullers, washers for confectionerygroundnut, and seed sorting equipment;

quality: control of aflatoxin; control, preparationand packing of groundnut for confectionery;control of seeds; control of groundnut oil.

(b) Rotation. Research on millet, sorghum, maize and rice is satis-factorily financed and could not be substantially improved underthe project; on the other hand, the possibilities of diversifyingfarm production need close examination: in particular, rotationsof longer duration than the traditional sorghum/cereal type andincluding such food crops as maize, cowpea, foddercrops and othercash crops such as cotton. Work is required to determine theoptimum rotational combination of these crops with groundnuts,millet and sorghum and to assess the financial and economic advan-tages of the alternatives. This type of work has been institutedsuccessfully in Senegal. The program would require about 4 fieldtrials of some 2 hectares in each of OACV's main sectors.

(c) Pedological maps. Under the project the soils unit would receivefinancial and technical assistance for soil surveys and to producethe pedological maps which are so badly needed in Mali to plan thebest use of its natural resources. The objectives of this assis-tance would be (i) to define the large morphopedological units ofthe areas under study, (ii) to evaluate the potential fertilityof the various soils, (iii) to select the soils most suited foragriculture intensification, (iv) study the economic risks dueto the shifting of traditional itinerant cultivation with long ro-tation periods to intensive cultivation on permanent fields. Thisassistance would in addition offer the marked advantage of forminga starting point for a general mapping of the soils of Mali whichhas not yet been done. The scale chosen would be 1 : 200,000 whichcorresponds to the scale used for existing topographic maps andthis is well suited to the country's need. On pedologist can,when working on this scale, prospect 14,000 km per year. TheMalian authorities would indicate the boundaries of the zones tobe studied and specify their priority and supply the correspondingaerial photographs. The project would provide funds for a two yearsurvey by a pedolog cal team which should complete the requiredwork over 28,000 km representing about 21% of the project area.

ANNEX 7Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

MEDICAL ASSISTANCE

1. Organization. The Ministry of Public Health and Social Affairs isresponsible for all medical and social services in Mali. The minister andhis cabinet are especially in charge of legislation drafting, planning,control of inspectors, doctors, medicines and pharmacies, relations withinternational health organizations and foreign countries providing technicalassistance, education and training. The ministry is divided in two depart-ments: Direction Nationale de la Sante (DNS), responsible for medical andhealth services, and Direction des Affaires Sociales (DAS), in charge of socialservices; their work is coordinated by a bureau of studies made up of thedirectors and division heads of both departments. DNS is responsible for theexecution of the health, sanitary and medical programs prepared by theMinist:er, the administrative and technical supervision of hospitals andhealth centers, and the control and application of medical regulations. DNSis also responsible for suggesting and preparing health programs and regula-tions, maintaining medical statistics and generally for dealing wîth allmatters concerning medical and health matters. In each of the six regionsIDS is represented by a Regional Director of Health who is the Governor'shealth adviser and controls hospitals, health centers and medical staff ofthe region. In each of the 42 administrative districts of the country thehealth services are headed by a health district chief who i8 a doctor or adresser, depending on staff availability. There is a dispensary and in somecases a maternity unit managed by a dresser in each sector. The publichealth services are divided into two branches: (i) medical care dealing withfirst aid, treatments and surgery in dispensaries, maternities and hospitals;(ii) medical prevention, dealing with transmissible diseases (responsibilityfor tracking these down), vaccination and cure. The program i carried outbv means of regular visits planned annually in advance, with the aim ofexamining all the inhabitants of the sector for which the medical preventionteam is responsible. When warranted, mass vaccinations are undertaken againstsmallpox, yellow fever, measles, tuberculosis and cholera, which are the mostprevalent diseases in Mali. Both branches are generally under-staffed andunder-equipped due to lack of funds, which are also insufficient to meetoperating expenses. Consequently, medical services are often inefficient.

2. Proposed project. In the project area, there is one dispensary for15,000 inhabitants and 3 hospital beds for 5,000. These health facilitieshowever benefit only a small minority of the people who live nearby. Theproposed project would provide funda for staff seconded from DNS and workingunder OACV administrative control, for purchase of vehicles, equipment andmedicines, for the construction of dispensaries and for operating expenses.This would help the medical care branch to extend its sphere of activitiesand to give attention to people heretofore outside its scope. The proposed

ANNEX 7Page 2

project would also assist the medical prevention branch and vould allowmore detection visite, more regular vaccination cmpaigns and better educationon sanitation and health among the populations visited by the preventionteams. The annual programs and budgets would be established jointly by DNSand the deputy general manager, who vould insure, through the projectextension service staff and with the help of DNS local staff, that theprogram is satisfactorily executed. Financial control of medical programexpenditure within the agreed budget would be the responsibility of DNS.

ANNEX 8

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

VETERINARY ASSISTANCE

1. Organization. Service de l'Elevage et de la Sante Animale (SESA)is one of the four divisions of the Directorate Generale of Production ofthe Ministry of Production and is in charge of the development of animalproduction. SESA's main responsibilities are (i) animal health; (ii) improve-ment of animal production; and (iii) meat inspection. At the national levelSESA comprises two sections (i) animal health; and (ii) animal husbandry. Inthe field there is a veterinary coordinator in each region, a livestock sectorchief in each sector and a district veterinary at district level. As forall other agricultural services, staff and funds are insufficient to insureadequate services.

2. Cattle. SESA estimated that at the end of 1972 and before the fullimpact of the drought was felt, the national cattle herd totalled 5.2 million,made up of 30% males and 70% females, of which 55% vas less than one year old.The reproduction rate is low at 66%, and the death rate, while a reasonable3% for cattle of over two years, is 33% for animals of under one year. Thesurvey of the effects of the drought has not yet been completed, but SESAestimates that in northern areas of the country losses have been in theorder of 40%, and that a period of 5 to 10 years vill be needed to re-establish the pre-drought livestock population of these areas. In thesouthern and western regions, the effects of the drought have been muchless serious and are estimated at somewhere between 5 and 10% of totalnumbers. Cattle heads in the project area are estimated at 1.4 million;most of these are considered as "saving accounts" by their owmers, andbefore OA was initiated were seldom employed as draft animals. Since thenfarmers have shown remarkable ability in training their cattle for workwith advice and assistance from the ox-drawn equipment staff of the OAextension service.

3. Proposed project. The proposed project would provide staffseconded from the SESA and working under OACV administrative control, withvehicles, veterinary equipment and a revolving fund for the purchase ofveterinary medicines; and funds for the construction of spray races andoperation expenses. The revolving fund would be replenished through chargespaid by farmers for veterinary medicines. The main duties of the staffwould be to provide for the health of cattle in the project area, throughpreventive inoculations, but also some curative treatment, and to advisefarmers on animal husbandry. Annual programs and budgets would be establishedjointly bv SESA and OACV. The ox-drawn equipment specialist vould act forOACV in the latter arrangement and, through his own staff at sector and sub-sector levels, would monitor animal health and control.

ANNEX 9Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

EVALUATION UNIT

1. The proposed Integrated Rural Development Project would haveimportant effects on the population in the project area and on the economy ofMali. These effects cannot however be estimated with accuracy and thereforean Evaluation Unit would be established under the project as from PY 2 toassess the actual results and compare them with project forecasts. As noorganization can satisfactorily evaluate itself, the Evaluation Unit wouldbe independent from project management although working closely together.

2. The function of the Evaluation Unit would be:

(a) to follow project development;

(b) to assess the actual results for comparison with projectforecasts;

(c) to measure project efficiency;

(d) to reappraise project goals and if required to suggestmodifications of project objectives and organization;

(e) to study the rural development process for future planningand development; and

(f) to help project management in establishing project goalsand scheduling of project activities.

3. The evaluation would include:

(a) participating farmers: modifications in their gross and netincomes, in their consumption, in their participation ineducation, etc., and generally in their well being;

(b) changes in volume and value of production, efficiency ofthe marketing system;

(c) use of project resources;

(d) impact of ancillary subprojects;

(e) changes in employment, in volume and type of business;

(f) clianges in tax revenues and expenditures and,

(g) generally any changes in economic and social indicatorsshowing direct and indirect re8ults of project activities.

ANNEX 9Page 2

Some of the information required would be available from project records,other data would be collected by surveys and from sources outside theproject, but the methods of data collection and assessments would bedetermined by the Evaluation Unit.

4. The Evaluation Unit would be headed by an agroeconomist withexperience of West Africa and knowledge of statistics and social economy.He would be recruited internationally for a period of 4 years (PY 2 throughPY 5) and as from PY 6 would be replaced by a Research Assistant engagedin PY 5. HIe would be assisted by a statistician at headquarters, and by2 supervisors and 20 enumerators in the field. As funds are not availableto cover the field activities over the whole project area, the agroeconomistwill select, in consultation with project management, the sectors in whichthe enumerators will operate during the project. The Evaluation Unit headwould recruit his staff and train them, he would design record documents,develop data collection system, instruct and control hie staff, consultwithi project management, government officials and IDA personnel. He wouldprepare reports and recommendations for submission to OACV Board and, afterBoard approval, for distribution to IDA and project management. The Evalu-ation Unit would work in close cooperation with IER and would investigatethe possibilities of obtaining additional support from the University ofMali. The head of the unit would be professionally responsible to the direc-tor of IER. (See project organization chart).

5. Detailed estimated costs are at Annex 12, Table 12. OACV wouldpay the expenses of the Evaluation Unit, within the limit of the annualbudget, after approval by the Evaluation Unit head.

ANNEX 10Page 1

kALI

INTEGRATED RURAL DEVELOPMENT PROJECT

GROUNDNUT SEED PRODUCTION

1. A principal objective of OACV is to replace entirely local groundnutvarieties or mixtures of varieties used by farmers with selected varieties,and thereafter to maintain varietal purity at a satisfactory level. This isneeded not only for reasons of productivity but to facilitate shelling andto obtain an homogeneous production that can be sold easily on the worldmarket.

2. Selected varieties. The two varieties chosen by Operation Arachide(OA) for distribution are well suited for Malian conditions; they are28-206 and 47-10. These, pending the selection of still better varieties,will be sold to farmers on seasonal credit terms at subsidized prices. Thetwo varieties are:

- 28-206, a Virginia type, 120 day cycle, rosette resistant,yields up to 3 T/ha in field experiments, grown for oilproduction.

- 47-10, a Spanish type, 90 day cycle, rosette resistant, yieldsup to 2 T/ha in field experiments, is grown for confectioneryand sells for a higher price than that obtained for 28-206.Suitable for the northern and drier part of the project area.

Seed rates are 100 kg/ha for 28-206, and 150 kg/ha for 47-10. At the endof the project development period the total annual seed requirement vouldbe some 21,000 tons of which OA would provide 4.740 tons and the balancewould be produced by the farmers.

3. Multiplication stages.

Stage (A) Parent material

(i 28-206. Parent material until 1972 was maintained atBambey (Senegal) but is now established at the Centred'Apprentissage Rural (CAR) at Sirakola.

(ii) 47-10. Parent material until 1972 was maintained atthe M'Pesoba farm. As from 1973 parental stockswill be kept at the Didieni CAR.

Stage (B) Elite 1

(i) 28-206. Elite seed is produced at the Sirakola,Kolokani and Didieni CAR.

ANNEX 10Page 2

(ii) 47-10. Elite seed is now produced by selectedfarmers but as soon as possible will be produced atMourdiah directly by OACV.

Stage (C) Elite 2. This multiplication stage is by farmers chosenfrom among the best and most reliable. These farmera growseeds under contract under the close supervision of extensionstaff and OA seed agents. Records of dates of planting andof field operations are maintained for each seed farm. Aspayment grovers receive fertilizer and other inputs freabut their crop is bought at the standard rate. In 1972 OAhad 400 ha of Elite 2 seed produced in this way.

These 3 stages should enable limited quantities of selected seeds to beproduced as economically as possible. Those obtained from the two laststages are regularly controlled by the division of selected seeds of IERand IRHO staff.

4. Diffusion stage. The following two stages regulate distribution ofselected seeds produced at *trategic points to reduce transport costs.

(i) Stage (D) first multiplication. Seeds produced fromstage (C) are sold to selected farmers at sub-sectorlevels and used for the next multiplication stage.

(Mi) Stage (E) second multiplication. Seeds produced fromstage (D) are widely distributed to farmers with the bestperformance at basic sector level and the seeds produced atthis stage are then mass-distributed, through OA control,to all the farmers of an area previously cleaned of groundauts.The production from these seeds is used for another crop whichis not used for further sowing; new seeds are then brought in.

ANNEX 11Page 1

2ALI

INTEGRATED RURAL DEVELOPMEUT PROJECT

AGRICULTURAL ISPUTS AND CREDIT

A. Organization and Operation of Agricultural Credit

Organization of the Societe de Credit Agricole et d'Equipement Rural (SCAER)

1. Societe de Credit Agricole et d'Equipement Rural (SCAER) became anindependent agency in April 1971, following recommendations by Caisse Centralede Cooperation Economique (CCCE) following a study of the agricultural creditsituation in Mali.

2. SCAER is legally and financially autonomous and is authorized tomake use of the rediscount facilitiès offered by the Central Bank; its mainfunctions include:

(a) Acting as the central supply agency for production goods,such as agricultural equipment, fertilizers, insecticidesand fungicides, and controlling certain imports on behalfof Government;

(b) distributing these production goods either directly throughits 26 retail outlets throughout the country, or indirectlythrough the "Operations de Developpement" which, acting onbehalf of SCAER, holds stocks for sale on cash or creditterms, recovers credit repayments at the time of cropcollection, and makes small individual loans to farmerseither from its own funds or from special credit funds,but this activity has been deferred until adequate guaranteescan be obtained for recovery of the loans.

3. The distribution of agricultural production goods and theprovision of short-term credit constitutes SCAER's major activity.Responsibility for these functions is divided between SCAER and theOperations as follows:

(a) SCAER, in close cooperation with the Operations (i) placesorders, after consultation and local or internationalcompetitive bidding, and delivers the goods to the Operations;(ii) finances purchases and stocks; (iii) obsorbs thefinancial risks involved in credit operations;

ANNEX 11Page 2

(b) the Operations (i) manage and control stocks deposited withthem; (ii) sell goods to farmers on credit or for cash,at their discretion; and (iii) recover the credit amountsd'ie when the crop is marketed.

SCAER reimburses the Operations for the cost of their services through a 5%rebate on the selling price of goods.

4. Uniform selling prices for agricultural production goods are fixedby Government (see Table 1). Since these prices are on average 9% lower thanthe cost price delivered Bamako, SCAER's operating account is credited viththe following:

(a) domestic subsidies financed from cotton (MF 4,000 per ton ofseed cotton purchased) and groundnuts (<MF 1,000 per ton ofundecorticated groundnuts purchased); and

(b) contributions from FAC and FED which are provided specificallyto finance subsidies. The expected production increases ofboth groundnuts and cotton, together with increased sellingprices, is expected to compensate for a decrease in FAC andFED assistance.

5. There are two factors, which result from the geographicalisolation of Mali, contributing to SCAER's high costs:

(a) transportation, which adds an average 27% to the ex-factoryprice;

(b) financial charges on working capital which increase thecost of 6% borrowings to more than 8%, as 20 months elapsebetween the placing of orders and the first creditreimbursements.

Operation Arachide - Organization of Credit Operations

6. At the Operations' central offices at Bamako, the followingdepartments deal with the distribution of production goods:

(a) the administrative department, which coordinates requirements,places orders through SCAER, and takes delivery and distributesthe goods;

(b) the credit department, which records the quantities andvalue of all production goods.

ANNEX 11Page 3

7. Locally, each sector of the Operation constitutes an administrativeunit in which the sector chiefs and bookkeepers play a major role in thedistribution of production goods and the recovery of credit repaymentsfromn farmers:

(a) thc sector chief is responsible for: (i) cash sales offungicidies and spare parts, (il) credit sales of equipment,fertilizers and seed;

(b) the bookkeepers working at sector and sub-sector levelsrecord these activities and carry out periodie stock checks.

3. This system should provide both SCAER and the Operation managementwith adequate control data. In particular, a monthly statement of stockmovements for each sub-sector permits detailed checking of deliveries andsales. lUowever, there are two serious shortcomings in the system:

(a) overdue debts total about 20% of total loans tofarmers as compared with about 2% under "OperationCotton";

(b) coordination between SCAER and OA is weak.

OA is taking steps to reduce bad debts and hopes to establish a system ofmutual guarantees. In the meantime, individuais or groups with a poorcredit repayment record should be banned from receiving further credit, andlegal action should be taken against defaulters. The project provides forthe strengthening and training of personnel in charge of credit operationsas field level. A statement of SCAER loans and repayments for the period1963 through 1971 is at Table 2.

B. Financial Position of SCAER

9. SCAER's opening balance sheet, which was approved by the Governmentand the Board of Directors, showed that equity contributions financed allfixed assets and 95% of stocks. The position was further improved by agovernment grant of MF 350 million, representing working capital (MF 150million) and an equipment subsidy (MF 200 million). Balance sheets andoperating and profit and boss accounts for 1971 and 1972 are summarized inTables 3 and 4.

10. Cash requirements are met by special rediscounting arrangementswitii the Central Bank through the intermediary of Banque de Developpementdu Mali (BDM). These arrangements, which are subject to review every sixmonths, lave been regularly increased. However, bank overdraft facilitiesimpose heavy financial charges as BDM does not allow SCAER a preferentialrate.

ANNEX 11Page 4

11. The drought conditions in '1972 and 1973 adversely affected creditrepayments and caused a heavy increase in stocks and working capital. Itis imperative for SCAER to maintain strict control of annual orders sincethe accumulation of stocks may endanger the financial position. This wouldallow SCAER accounts to remain positive. SCAER's operating account shouldremain in credit provided the ratio of orders to sales is adjusted andmoderate increases are made in sales prices.

C. Integrated Rural Development Project Credit Requirements

12. Details of farm implements, other inputs and credit requirementseo he supplied by SCAER and improved seeds to be supplied by OACV are detailedin Tables 5, 6, and 7.

D. Recommendations for Credit Organization and Operations

13. Accurate records should be kept of stocks held by SCAER's retailoutlets and OA sectors. This would be taken care of in the SCAER/OA recipro-cal service agreement and it is necessary that this agreement be promptlyagreed and signed.

14. SCAER and OA should ensure that the annual orders for productiongoods should not exceed production needs to reduce working capital require-ments. OA should also take steps to reduce credit repayment defaults toan acceptable level (about 5% of loans).

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Cost Prices and Sales Prices of Farm Inputs(MF)

Measure- Price ex- Selling Price as %

ment factory2/ Del. Bamako Del. to Farmers Selling PriceY of Full Cost

Multicultivator Unit 38,430 40,351 49,794 30,000 60%

Tyne Unit 3,800 4,230 4,,750 4,750 100%

1,000 kg cart wheel set Unit 25,537 26.,814 33,088 32,800 99%7-

Seeder Unit 24,930 26,177 32,302 18,500 57%

Groundnut lifter Unit 4,860 5,103 6,297 6,075 - 96%

Superphosphate 21% Ton 17,000 31,270 37,469 40hO, 0 107%53,,8h6 144

Red Thioral (Groundnuts) Kg 680 720 900 1,500 W 107%

Green Thioral (Sorghum) Kg 570 604 759 2,000 W 263%

Gammafrain (Lindane) Kg 190 200 250 500 Si 200%

Groundnut selected seed Kg - - 47.5 34.50 50 73%

j/ 1973 orders./ Excluding tax, including freight.

~/ Excluding tax, including costs to SCAER (financial charges and management costs) and a 5% delivery comiass-on

for "Operation Arachide".V| Government approved 1973 SCAh scales.Selling price fixed by "Operation Arachide".

October 10, 1973

MALI

INTEGRATED RU RPAI DEVEOPMT PROJECT

Comparative Table of Loans and uYmeLnIt__ition on Nov. 3 1972 Outstanding Debta

as a % of loansTotals for Year Cumulative Totals

Loan Repayment1 s Outstanding Loans Repaymèeits Outatanding for year Cumulative

1968 17,849,070 12,352,185 5,496,885 17,,849,070 12,352,185 5,496,885 31 31

1969 55,324,325 49,298,070 6,026,255 73,173,395 61,650,255 11 ,523,140 11 16

1970 11i4,223,570 99,405,625 14,817,945 187,396,965 161,055,880 26,341,085 13 14

1971 142,473,570 103,637,295 38,836,275 329,870,535 264;693,175 65,177,360 27 20

Breakdown as of November 30, 1972

Loans Repayments Outstanding Outstanding Debt/Loans

Seeds 169,086,305 137,102,135 31,983,970 19%

Fertilizers 134,138,305 112,535,125 21,603,180 16%

Equipment 26,645,925 15,055,915 11 ,590,010 43.5%

Total 329,870,535 264,693,175 65,177,160

Actual overdue debts include all outstanding debts on seeds and fertilizers and only a portion of outstandingdebts on equipment;the average overdue debts are about 18%.

>31

MALI

IN'TEGRATED RURAL DEVELpPMET PRO!ECT

Soc-ete de Credit Agricole et d'Equipement Rurail

Condensed Balance Sheets

MF'000,000

Assets Jan. 1,1971 Dec. 31, 1971 June 30, 1?72 Dec. 31, 1972 Liabilities Jan. 1, 1971 Dec. 31, 1971 June 6, 1972 Dec. 31, 1?73

Fixed Assets 50 181 427 311 Owners' Equity 1,2h1 1,25h, 1,718 1,713

Net value offixed assets 1/ 13 18 1h 23 Long Terri 1 0 10 1 ')

Other fixed assets 37 163 411 288 Current 1, 4h 98tc 1,392 2,h85

Inventories 2/ 1,260 802 1,711 2,521 Resu]ts - 113 24 24

Receivables/Cash 1,448 1,380 1,006 1 _4__

TOTAL 2,758 2,363 3,L, 44,237 2,758 2,3u3 3,1Lh 4,23?

1/ As'ter allowance for depr ciatio n. a) Net workinF

2/ After provision for reserves. capital 1,204 1,1ut) 1,325 1,441

a) Current inventories and current receivablcs and cash. b) Ratio net working

b) Net working capital/inventories and accounts rece;vable nnci cash. capital/gross 4hh 55> %4 48>ieorkinr capital

o ci

£. 'kLI

Societe de Credit_ et d'34uipernent Rural

Ooridensea (0nerqtin a nd Profit and Loss AccountsMF' 00, 080

Dec. 31, 1 .une {, 1'72 Dec, 31, 1972 Dec. 31, 1371 June o, 1972 Dec. 31, 1972

1. Operatin: Xcccurits

BeEinning inventory 1,260' 82 1,711 Closing inventory 8C2 1,711 2,521

Purchases 678 1,99h 1,021 Sales 1,22h 71h3 211

Operatirs costs 129 107 h2 OperatirE subsidies 158 2S2 115

Financ-al' charges 1 34 60 Additional income 2 - _

Depreiitîtion 5 2 Financial income 14 1

Xoserves - 24 -

Results 127 - 17 Results - 258 -

TOVXL 2,20n 2,963, 2,851 2,200 2,9u' 2, 83i

2. Profit snd Loss .ccounts

Operatini losses 258 Operatbq7- -rLt, 127 17

Non-rocurrent. losses 14 Non-recurrent profits u7 hPrice support subsidy 21'

Profits for the year 113 24 21

TOEUSL 127 282 21 127 282 21

--SiO I 2~

o- I'

ANNEX 11Table 5

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Farm Implement Requirement, Costs and Medium-Term Credit

------------------------Years---------------------------0 1 2 3 4 5

I. Quantities

Multi-cultivators - 1,300 2,050 2,550 3,100 3,750Tynes - 950 1,700 2,195 2,740 3,385Groundnut lifters - 400 600 745 930 1,125Seeders - 1,000 1,670 2,100 2,570 3,080Set of cart wheels - 650 1,025 1,280 1,550 1,875

II. Values (000,000 MF) 1/(Full cost delivered tofarmers)

Multi-cultivators - 64.7 102.1 127.0 154.4 186.7Tynes - 4.6 8.2 10.5 13.2 16.2Groundnut lifters - 2.5 3.8 4.7 5.9 7 nSeeders - 32.3 54.0 67.8 83.0 99.5Cart wheels - 21.5 33.9 42.4 51.3 62.0Cart boxes 2/ - 16.3 25.6 32.0 38.8 46.9

Total - 141.9 227.6 284.4 346.6 418.3

III. Financing

- Cash Sales 3/ - 16.3 25.6 32.0 38.8 46.9- Down payment 4/ 5/ - 28.6 45.9 57.5 70.1 84.6- Farmers' Repayment- - - 28.7 74.7 103.0 127.5Net Medium-term CreditTotal - 57.3 63.4 40.4 36.8 41.8

- Subsidies to SCAER - 39.7 64.0 79.8 97.9 117.5Total 141.9 227.6 284.4 346.6 41b.3

1/ See Annex 11 Table 4 inputs price list.

2/ Made by local artisans at about MF 25,000 per unit.

3/ Includes card box costs.

4/ One-third of the value of implements.

5/ Two-year term loan.

ANNEX IlTable 6

MAtI

INTECRATED RURAL DEVELOPMENTf PROJECT

Seasonal Inputs Requirements. Costs and Seasonal Credit

------------------------------------- Years -----------------------------------------

(> (;roendnuts O i 2 3 4 5 6 7 Onwards

1, fuertijicers (P,05, 21.; tons) 2,350 3,195 3,590 4,585 6,165 6,490 6,690 6,825 6,825

2. foingicides (kg) _/ 3,560 4,830 6,070 7,560 9,480 10,980 11,310 11,550 11,550

3. l.icdacn fkg) 2/ 755 2,420 3,040 3,780 4,740 5,490 5,660 5,780 5,780

4 sers lotal (1t ani 4/ 10,950 11,500 15,190 17,250 18.960 19,980 20,560 21,020 21,020

Srrds probluerd by formers _/ 9,370 8,805 11,580 12,795 !4,010 14,275 15,760 16,260 16,260

I.rovexl a.-ds sc 1-pîied bu O.A. 6/ 1,580 2,695 3,610 4,455 4,950 5,705 4,800 4,760 4,760

hu Porgi lcî/Mi lin

1. SciAs (tos, '7/proniluvcI bu farît.rs( 1,540 1,575 3,165 3,305 3,445 3,560 3,600 3,645 3,670

. Igiit iL s (kg) B/ 575 905 1,675 2,175 2,740 3,270 3,470 3,555 3,590

I VAL19 r "'r I-as i tees on 1 i noo,'0000 MIF) 2/

I. cri lihirS

AL fr11 osi 11')/ 88.1 120.0 134.6 172.0 231.2 243.4 250.9 256.0 256.0

At offi,iai sclling price 94.0 127.8 143.6 183.4 246.6 259.6 267.6 273.0 273.0

ILofits 5.9 7.8 9.0 11.4 15.4 16.2 16.7 17.0 17.0

2. cuti rAtiol ilFugieids-

At i,i1l -os I 3.2 4.4 5.5 6.8 8.5 9.9 10.2 10.4 104

Ai 1.ffiiial scIling pri,e 5.3 7,2 9.1 11.3 14.2 16.5 17.0 17.3 17.3

l'rofits 7.1 2.8 3.6 4.5 5.7 6.6 6.8 6.9 6.9

3. Liodane

At fuit -est 0.2 0.6 0.8 0.9 1.2 1.4 1.4 1.5 1.5

At: officiai seliog prite 0.4 1.2 1.5 1.9 2.4 2.7 2.8 2.9 2.9

Profits 0.2 0.6 0.7 1.0 1.2 1.3 1.4 1.4 1.4

4. .rondoont fouedauion Sends J4/

At fsil osi 10/ 75.0 128.0 171.5 211.6 235.2 271.0 228.0 226.1 226.1

At official selling price 54.5 93.0 124.5 153.7 170.8 196.8 165.6 164.2 164.2

SPbsidies (losses) 20.5 35.0 47.0 57.9 64.4 74.2 62.5 61.9 61.9

5. Sorghum Fongicides

At full cost 0.4 0,7 1.1 1.7 2.1 2.5 2.6 2.7 2.7

At official selling price 1.2 1.8 3.4 4.4 5.5 6.5 6.9 7.1 7.1

Profits 0.8 1.1 2.1 2.7 3.4 4.0 4.3 4.4 4.4

111 TlREDlT REQU'IREMLNT 12/

Total 148.5 220.8 268.1 337.1 417.4 456.4 433.2 437.2 437.2

Net Yearly Incremeni 148.5 72.3 47.3 69.0 80.3 39.0 (23.2) 4.0 -

!/ 65 kg/ha.2/ 100 g of Thioral (red) for 100 kg of seeds.3/ Lindane: 50 g for 100 kg of seeds.4/ 100 kg/ha for the 28-206 ariety and 150 kg/ha for the 47-10 variety, in average 110 kg/haS/ Serds prod-ed by farmers bot, improved and unimproved.6/ î7oa,tits necessarv for replacing seeds previously distributed and expanding area under

improved secds.7/ 13.5 kg/ha iii average; 10 kg/ha for millet and 15 kg/ha for sorghon.8/ Abo-t 185 g of Thioral (green) for 100 kg of seeds.9/ S4c Alnon fable , inputs price list.

10/ ncieldes SCAER finanrial and administrative costs, delivery charges and 57. conmissionfor "OperaLion, Arachide".

Il/ Send srîppl and fina-cing is the responsibility of "Operation Arachide" while SCAER isrespoosihll for other inputs.

12/ finl ferîllizers and improved seeds are supplied on credit. Official selling pricesbave hein used for rompuîting credit requirement.

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Summary of Incremental Farm Inputs Cost and Financing 1/(MF Million)

Year 1 2 3 4 5 TOTAL

I. Equipment: Total 2/ 141.9 227.6 284.4 346.6 418.3 1,418.8(unsubsidized)

Farmers' contribution 3/ 44.9 100.2 164.2 211.9 259.0 780.2

Medium term credit 4/ 57.3 63.4 40.4 36.8 41.8 239.7

Subsidies 39.7 64.0 79.8 97.9 117.5 398.9

II. Seasonal Inputs: Total(unsubsidized) 86.8 146.8 226.1 311.3 361.3 1,132.3

Farmers' contribution 3/ 3.3 79.4 130.3 203.8 287.7 704.5

Incremental credit 72.3 47.3 69.0 80.3 39.0 307.9

Subsidies 11.2 20.1 26.8 27.2 34.6 119.9

III. Total Parm Inputs (I & II)(unsubsidized) 228.7 374.4 510.5 657.9 779.6 2,551.1

Farmers' contribution 3/ 48.2 179.6 294.5 415.7 546.7 1,484.7

Incremental credit by SCAER 4/(MT & Seasonal) 91.1 79.2 80.2 100.0 54,8 405.3

Seasonal credit by OA (seeds) 38.5 31.5 29.2 17.1 26.0 142.3

Subsidies 5/ 50.9 84.1 106.6 125.1 152.1 518.8

1/ Excluding spare parts and millet and sorghum seeds supplied by farmers. e >

2/ Includes implements and cost of cart boxes.3/ Cash sales, down payment and repayment. (

4/ Net incremental credit requirement.5/ Mainly for seeds, taking into account profits on other inputs.

MALI

INTEGRATED RURAL DEVELOFMENT PROJECT

PROJECT COSTS(MF Million)

Reference TOTAL Foreign ExchangeTables 1 2 3 4 5 (.F Million) (US$'000) % MF (Million) US$ 000

I. MAIN SUBPROJECT

Buildings 2 103.3 392.6 404.6 6.0 - 906.5 1,813 29 262.9 526Equipment and Furniture 2 6.6 73.0 71.7 3.9 - 155.2 311 60 93.1 186Vehicles 3 104.7 160.9 30.7 46.7 119.1 462.1 924 60 277.3 555Technical Assistance 4 191.3 263.0 227.8 173.8 164.3 1,020.2 2,040 80 818.8 1,638Local Staff 1/ 5 14.1 63.3 85.6 92.5 97.0 352.5 705 - - _Operating Costs 1/ 6 90.8 160.4 166.8 141.4 123.8 683.2 1,366 53 362.1 724

Total I 510.8 1,113.2 987.2 464.3 504.2 3,579.7 7,159 51 1,814.2 3,629

II. ANCILLARY SUBPROJECT

Rural tracks improvement 1/ 7 - 256.6 73.0 73.0 8.0 410.6 821 51 209.4 419Functional literacy 1/ 8 55.8 86.8 42.8 - - 185.4 371 50 92.7 185Research 9 34.7 44.7 56.3 45.3 25.7 206.7 414 48 99.2 198Medical Assitance 1/ 10 - 39.1 39.2 38.1 55.3 171.7 343 45 77.3 155Veterinary Assistance 1/ il 43.0 26.0 14.8 26.5 17.3 127.6 255 49 62.5 125Evaluation pnit 12 - 25.4 38.6 38.2 54.6 156.8 313 43 67.4 135Studies 2/ - - 45.0 - - - 45.0 90 100 45.0 90

Total Il 133.5 523.6 264.7 221.1 160.9 1,303.8 2,607 50 653.5 1,307Total I and II 644.3 1.636.8 1,251.9 685.4 665.1 4,883.5 9.766 51 2.467.7 4,936

III. FARM INPUTS 2 13 228.7 374.4 510.5 657.9 779.6 2,551.1 5,103 67 1,718.8 3,437

IV. REVOLVING FMND I 14 24.2 14.0 4.7 8.9 _ 51.8 104 60 31.1 62

Total I to IV 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4 14,973 56 4,217.6 8,435

V. CONTINGENCIES

Price 59.6 261.4 304.9 402.9 582.0 1,610.8 3,222 56 896.5 1,793Physical 44.8 101.1 88.4 67.6 72.2 374.1 748 56 210.7 421

Total Contingencies 104.4 362.5 393.3 470.5 654.2 1,984.9 3,970 56 1,107.2 2,214

GRAND TOTAL MF Million 1,001.6 2,387.7 2,160.4 1,822.7 2,098.9 9,471.3 - 56 5,324.8US$ '000 2,003 4.775- 4.321 3,645 4.199 - 18.943 56 - 10,649

VI. IMPORT DUTIES AND TAXES 16 78.0 233.0 169.5 84.7 81.6 646.8 129.4

I/ Incremental Coats.

Y Cereal producer prices and marketing arrangements study and accourntancy assistance to OACV. -

3/ Incremental at unsubsidized costs.

4/ For staff motorcycles, bicycles and for blacksmith equipment.

April 25, 1974

ANNEX 12Table 2

MALI

INTEGRATED RURAL DEVIELOPMENT PROJECT

Buildings and Equipment(MF Million)

Unit Year 1 Year 2 Year 3 Year 4 Year 5 TOTALCost Unit Cost Unit Cost Unit Cost Unit Cost Unit Cost Unit Cost

A. BUILDINGS

1. Sheds: 180 m2

9.8 1 9.8 1 9.8100 m

25.9 2 11.8 1 5.9 3 17.7 5 35.4

75 m2

4.3 19 81.7 1 4.3 2 8.6 22 94.6

Subtotal 103.3 10.2 26.3 139.8

2. Housing: 165 m2

19.4 4 77.6 4 77.6140 m

215.0 6 90.0 6 90.0

130 m2

14.0 7 98.0 7 98.080 n2 8.9 12 106.8 3 26.7 15 133.5

Subtotal 372.4 26.7 399.1

3. Offices: H.Q. 200.0 1 200.0 1 200.05 Rooms 8.4 3 25.2 3 25.23 Rooms 5.4 5 27.0 5 27.02 Rooms 3.8 18 68.4 18 68.4

Subtotal 320.6 320.6

4. Garages & W.rkshops

Bamako 4.0 4.0Banamba 6.0 6.0Kita 20.0 20.0Mahina 11.0 11.0Kenieba 6.0 6.0

Subtotal 10.0 31,0 6.0 47.0

Total Buildings 103.3 392.6 404.6 6.0 906.5

B. FURNITURE & EOUIPMENT

1. Sheds: 75 m2

0.3 19 5.7 1 0.3 2 0.6 22 6.6100 m

20.4 1 0.4 1 0.4 3 1.2 5 2.0

180 m2

0.5 1 0.5 1 0.5

Subtotal 6.6 0.7 1.8 9.1

2. Housing: 165 m2

2.8 4 11.2 4 11.2130 m

22.4 7 16.8 7 16.8

80 n2

1.9 12 22.8 3 5.7 15 28.5

Subtotal 50.8 5.7 56.5

3. Offices: H.Q. 25.0 1 25.0 1 25.05 Rooms 2.0 3 6.0 3 6.03 Roons 1.2 5 6.0 5 6.02 Rooms 0.5 18 9.0 18 9.0

Subtotal 46.0 46.0

4. Garages & Workshops

Bamako 9.1 9.1Banamba 3.9 3.9Kita 11.7 11.7Mahina 6.5 6.5Kenieba 3.9 3.9

Subtotal 13.0 18.2 3.9 35.1

5. Equipment for Training 8.5 - _ 8.5

Total Furniture &Equipment 6.6 73.0 71.7 3.9 155.2

GRAND TOTAL 109.9 465.6 476.3 9.9 1,061.7

September 20, 1973

MALI

INTEGRATED RURAL DEVELOPHENT PROJECT

VEHICLES(MF Million)

Unit Price ImportA. HEAD OFFICE TYPE inc. Imp. DutiÉs Duties 1 2 3 4 5 TOTAL

General Manager Station wagon 2.5 0.6 1 2.5 1 2.5 2 5.0

Deputy General Manager Station wagon 2.5 0.6 1 2.5 1 2.5

Deputy Technical Manager Pick-up 2.2 0.5 1 2.2 1 2.2 2 4.4Deputy Ox-Drawn Cultivation Head Pick-up 2.2 0.5 1 2. ' 1 2.2 2 4.4Chief Personnel Light wagon 1.6 o.4 1 1.6 1 1.6 2 3.2

Chief Accountant Light wagon 1.6 0.4 1 1.6 1 1.6 2 3.2

Chief Clerk Light wagon 1.6 04 1 1.6 1 1.6 2 3.2

Adminis trator Light wagon 1.6 0.4 1 1.6 1 1.6

Mechanical Engineer Four wheel drive 3 6 1.3 1 3.6 1 3.6

- - - 4 7.9 2 3.8 1 2.5 5 9.5 3 7-4 15 31.1

B. FIELD

Sector Light lorries 3.3 G.8 4 13.2 1 3.3 - - 4 13.2 1 3.3 10 33.0

Sector, sub-sector chiefa,) 4-wheel drive 3.6 1.3 1 3.6 22 79.2 6 21.6 2 7.2 22 79.2 53 1y0.8

ox-drawn equipment heads, ) pick-up 2.2 C.5 h 8.8 10 22.0 2 h.4 h 8.8 10 22.0 30 66.0garage head.

9 25.6 33 104.5 8 26.0 10 29.2 33 104.5 93 289.8

Subtotal 13 33.5 35 108.3 9 28.5 15 38.7 36 111.9 108 320.9

C. LORRIES7T 7.9 2.0 8 63.2 h 31.6 12 94.8

Subtotal 21 96.7 39 139.9 9 28.5 15 38.7 36 111.y 120 415.7

D. V?HICLES FOR EXPATRIATES 3 8.0 7 21.0 1 2.2 3 8.0 2 7.2 16 46.4(see Table 3) D

GRANJ) TOTAL VEHICLES 24 104.7 h6 160.9 10 30.7 18 46.7 38 119.1 136 h62.1

October 6, 1973

ANNE2 12Table 4

MALI

INTRATSD niIL DEVEIDPMENT PP0JSOT

Technicai Assistance(NF Million)

A. STAFF Basic Year1yEmoluments 1 2 3 4 5 TOTAL

1. Sead Office

Adviser te G.M. 22.50 1 22.50 1 22.50 - - -Head teohnical department 20.00 1 20.00 1 20.00 1 20.00 1 20.00 1 20.00Head ox-drawn coltivation 13.00 1 13.00 1 13.00 1 13.00Administrator 15.50 1 15.50 1 15.50 - - - 2 31.00Eqoip.ent adviser 15.50 - 1 15.50 1 15.50 - - 2 31.00

2. Field

Teohiioal advisers (sone) 15.50 4 62.00 5 77.50 5 77.50 3 46.5o 3 46.50 20 310.00TechnicaI advisers (sector) 13.30 1 13.30 2 26.60 2 26.60 2 26.60 1 13.30 e 106.4C

Subtctal 9 146.30 12 190.60 10 152.60 7 106.10 6 92.8C 44 688.43

3. Supporting Mission

- Technical 2.70 2.70 2.70 2.70 2.7C 13.50- TraLning 3.30 3.30 3.30 3C30 3.30 16.50- IPiO 3.10 3.10 3.10 3.1C 3.10 15.50

Subtotal 9.10 9.10 9.10 9.10 9.10 45.50

Subtotal 155.40 199.70 161.70 115.20 101.90 733.90

Incre.eot 7% comp. 10.90 29.00 36.40 35.90 41.00 153.20

Sintstai 166.30 228.70 198.10 151.10 142.Y0 8B7.10

Agency Feso 15% 25.00 34.30 29.70 22.71 21.40 133.10

Total Staff 191.30 263.00 227.80 173.80 164.30 1,020.20

B. VEHIfLAS Unit PriceType C(ic. impert Import

1. Head Office duties) Duties

Adviser to G.M. Station uagon 2.50 0.60 - -SeaS technical dept. Pick np 2.20 0.50 1 2.20 _ - 1 2.20 _ 2 4.4°:lead o-dras colt. Pick up 2.20 0.50 - - 1 2.20 - - 1 2.20Adm-nistrator Light car 1.60 0.40 - - - - - -Equipsent adviser 4 wheel drive 3.60 1.30 - 1 3.60 - - - 1 3.60

2. F-eld

Technical advisers Pici np 2.20 0.50 1 2.20 3 6.60 - 1 2.20 - 5 11.004 eheel drive 3.60 1.30 1 3.60 3 10.80 - 1 3.60 2 7.20 7 25.20

Total 3 8.00 7 21.00 1 2.20 3 8.oo 2 7.20 16 46.40

3. Isort DSUties Pick up 0.50 0.50 2 1.00 3 1.50 1 0.50 2 1.00 - 8 4.004 ,heel drive 1.30 1.30 1 1.30 4 5.20 - 1 1.30 2 2.60 8 10.40

Total Vehicles 3 2.30 7 6.70 1 0.50 3 2.30 2 2.60 16 14.40

-. OPSRATING COSTS

1. Rent and Upkep Heouses

a) Head office 1 i.80 1 1.80 - - _ 2 3.62

Adviser to G.M. 1.80 1 1.80 1 i.80 - - - 2 3.60Head technical dept. i.80 1 1.80 1 1.80 1 1.8C 1 1.80 1 i.80 5 9.02Hesd os-dsrwn colt. 1.56 1 1.56 il 1.56 1 1.56 1 1.56 1 1.56 5 7.a2Administrator 1.56 1 1.56 1 i.56 - - - 2 3.12Equipm.ent adviser 1.56 - 1 1.56 1 1.56 - - 2 3.12

Subtoctl 4 6.72 5 5.28 3 4.92 2 3.36 2 3.36 16 26.64

b) Field

Technical advisers Carne) 0.60 4 2.40 5 3.00 5 3.00 3 1.80 3 1.80 20 12.00Technical adviser Csotor) 0.30 1 0.30 2 o.60 2 0.60 2 o.60 1 0.30 a 2.40

Subtotal - 5 2.70 7 3.60 7 3.60 5 2.40 4 2.10 28 14.40

Subtotal 9 9.42 12 11.88 10 8.52 7 5.76 6 54.6 44 41.04

2. Vehicles Maintenaece and Operation cost/ke cost per yeer(5F) (MC'FOO)

o) Hesd office

Adviser to O.M. (St.W) 70 1.75 1 1.75 1 1.75 - - - 2 3.50Head technical dept. (P.U.) 70 1.75 1 1.75 1 1.75 1 1.75 1 1.75 1 1.75 5 8.75Head ox-drawn cilt. (P.U.) 70 1.75 1 1.75 1 1.75 1 1.75 1 1.75 1 1.75 5 8.75Administrator (L.C.) 50 1.25 1 1.25 1 1.25 - - - 2 2.51Mechanical engineer (4 W.D.) 90 2.25 - 1 2.25 1 2.25 - - 2 4.50

Subtotal - - 4 6.5o 5 8.75 3 5.75 2 3.50 2 3.50 16 28.00

b) Field

Pick up 70 1.75 1 1.75 3 5.25 3 '5.25 2 3.50 2 3.50 il 19.25 o4 eheel drive 9O 2.25 4 9.00 4 9.00 4 9.00 3 6.75 2 4.50 17 38.25 .

Subtotol 5 10.75 7 14.25 7 14.25 5 10.25 4 8.00 28 57.50

Subtotal 17.25 23.00 20.00 13.75 11.50 85.50

Tbtal Oporating Costs 26.67 34.88 28.52 19-51 16.96 126.54

GRAND TOTAL 225.97 318.88 258.52 201.31 188.46 1,193.14

Octeber 6, 1973

ANNEX 12Table 5

MALI

INTmRATE.0 RURAL DKVELOPMENT PROJEC T

LOCAL STAFF

1 Tm-p ~~~~~~1 =000)Annua I

A. H. Q. Salarv I 2 3 4 s Total

General mmnager 1,920 1 1,920 1 1,920 1 1,920 1 1,920 1 1,920 5 9,600Dy general manager 1,500 1 1,500 1 1,500 1 1,500 1 1,500 1 1,500 5 7,500Dy technical assistant 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300Asst. technical manager 1,1140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700Dy ox-drani cultivation head 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300Chief personnel 1,260 1 1,260 1 1,260 1 1,260 .1 1,260 1 1,260 5 6,300Chief accountant 1,260 1 1,260 1 1,260 1 1,260 1 1,260 1 1,260 5 6,300Accountant 1,140 - - 1 1,140 1 1,140 1 1,140 1 1,140 4 4,560Chief clerk 1,140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700Chief statistics 1,140 1 1,140 1 1,140 1 1,140 1 1,140 1 1,140 5 5,700Book-keepers 630 8 5,040 8 5,040 a 5,040 8 5,040 a 5,040 40 25,200Secretaries (E) 3,0C0 2 6,000 1 3,000 - -_ 3 9,000Secretaries 420 2 840 4 1,680 6 2,520 6 2,520 6 2,520 24 10,080Drivers 400 10 4,000 9 3,600 9 3,600 8 3,200 8 3,200 44 17,600Office messengers 145 4 580 h 580 4 580 4 580 4 580 20 2,900Watchmen 145 8 1,160 8 1,160 8 1,160 8 1,160 8 1,160 40 5,800Laborers 100 10 1,000 10 1,000 10 1,000 10 1,00O 10 1,000 50 5,000

Audio visual technician 1,150 1 1,150 1 1,150 1 1,150 1 1,150 1 1,150 5 5,750

Total H. Q. Staff 54 31,650 55 30,230 56 28,070 55 27,670 55 27,670 275 145,290

B. Field

Sector chiefs 1,260 6 7,560 8 10,080 9 11,340 9 11,340 9 11,340 41 51,660Sub-sector chiefs 745 18 13,410 23 17,135 26 19,370 26 19,370 26 19,370 119 88,655Basic sector chiefs 240 191 45,840 278 66,720 308 73,920 308 73,920 308 73,920 1,393 334,320Book-keepers 630 23 14,490 28 17,640 35 22,050 41 25,830 46 28,980 173 108,990Ox-drawn cultivation agents 630 8 5,040 10 6,300 il 6,930 il 6,930 il 6,930 51 32,130Secretaries 420 8 3 360 10 4,200 il 4,620 il 4,620 il 4,620 51 21,420Drivers 4°° 38 15,200 54 21,600 54 21,600 54 21,600 54 21,600 254 101,600Watchmen 145 23 3,335 29 4,205 34 4,930 34 4,930 34 4,930 154 22,330Messengers 145 23 3,335 29 4,205 34 4,930 34 4,930 34 4,930 154 22,330Laborers 100 28 2,800 34 3,400 40 4,000 47 4,700 53 5,300 202 20,200

Total field staff 366 114,370 503 155,485 562 173,690 575 178,170 586 181,920 2,592 803,635

C. Garages and borkshops

1) H. Q.Technical inspector 1,260 - - 1 1,260 1 1,260 1 1,260 1 1,260 4 5,o40Clerks (stores-accounte) 420 - - 1 420 2 840 2 840 2 840 7 2,940

2) FieldSenior garage chiefs 630 - - - - 1 630 2 1,260 2 1,260 5 3,150Junior garage chiefs 480 3 1,440 3 1,440 3 1,440 3 1,440 3 1,440 15 7,200Mechanics 420 5 2,100 5 2,100 8 3,360 10 4,200 10 4,200 38 15,960Electricians 420 1 420 1 420 2 840 2 840 2 840 8 3,360Mechmic assistant 240 7 1,680 8 1,920 9 2,160 10 2,400 10 2,400 44 10,560Storeman/clerk 240 - - 2 480 2 480 2 480 2 480 8 1,920Pump attendant 145 3 435 3 435 4 580 5 725 5 725 20 2,900Watchmen 145 - - 3 435 4 580 4 580 5 725 16 2,320Laborers 100 - - 3 300 4 400 4 400 5 500 16 1,600

Total garage and workshops staff 19 6,075 30 9,210 40 12,570 45 14,425 47 14,670 181 56,950

Total 439 152,095 588 194,925 658 214,330 675 220,265 688 224,260 3,048 1,005,875

D. Social Charges 15% 22,815 29,240 32.150 33.040 33.640 150,885

GRAND TOTAL 174,910 224,165 246,480 253,305 257,900 1,156,760

Coet of ongoing project 1' 160,860 160,860 160,860 160,860 160,860 804,300

Incremental costs 14,050 63,305 85,620 92,445 97,040 352,460

1/ H 139,874,00G plus 15% social charges.

July 26, 1973

ANNS 1 2Table 6

MALI

INTEGRATED RURAL DEVRLOPMENT PROJECT

Operating Eenses{MFMMllion)

TOTALA. GENERAL EXPENSES 1 2 3 4 5 (1 to 5)

1. Head Office

Stationery, stamps, telephone 9.6 12.6 12.6 12.6 12.6 60.0Electricity, gas, water 2.8 3.0 3.0 3.0 3.0 14.8Upkeep office 1.0 1.5 2.0 2.0 2.0 8.5

b houses 1.0 1.5 2.5 2.5 2.5 10.0Training 10.5 22.5 23.5 10.5 10.5 77.5Medical expenses 1.5 1.7 2.0 2.0 2.0 9.2Local travels 1.4 1.5 1.6 1.6 1.6 7.7Audit 18.0 16.0 14.0 12.0 60.0

Subtotal 27.8 62.3 63.2 48.2 46.2 247.7

2. Field

Stationery, stamps, telephone 1.5 2.0 3.0 3.0 3.0 12.5Slectricity, gas, water o.6 1.0 2.0 3.0 3.0 9.6Upkeep houses, offices, sheds 1.0 1.5 2.0 2.5 3.0 10.0

Subtotal 3.1 4.5 7.0 8.5 9.0 32.1

3. Garages

Stationery, stamps, telephone o.5 1.0 1.5 1.5 1.5 6.0Electricity, gas, water 0.5 1.0 2.0 2.5 2.5 8.5Ulpkeep buildings 1.0 2.0 3.0 3.5 4.0 13.5Materials, tools, fuels, lubricants

lubricants 2.0 3.0 4.0 5-0 6.o 20.0

Subtotal 4.0 7.0 10.5 12.5 14.0 48.0

Total general expenses 34.9 73.8 80.7 69.2 69.2 327.8

B. VEHICLES (Maintenance & Operation)

MF/kl NF'OOO/y

1. Head Office (25,000 kam/y)

Station wagon 70 1,750 2 3.5 2 3.5 2 3.5 2 3.5 2 3.5 10 17.5Pick up 70 1,750 2 3.5 2 3.5 2 3.5 2 3.5 2 3.5 10 17.5Light wagon 60 1,500 3 4.5 3 4.5 3 4.5 4 6.0 4 6.0 1,7 25.54 wheel drive 90 2,250 - - - 1 1 2.2 1 2.3 2 4.5

Total head office vehicles M x 0 7 11.5 7 11.5 7 11.5 9 15.2 9 15.3 39 65.0

2. Field and Garages (20,000 kle/y)

Pick up 70 1,750 8 14-o 16 28.0 16 28.0 16 28.0 16 28.0 72 126.04 wheel drive 90 2,250 22 49.5 23 51.7 29 65.3 30 67.5 30 67.5 134 301.5Light lorries 110 2,750 4 11.0 5 13.7 5 13.7 5 13.8 5 13.8 24 66.o

Subtotal 34 74.5 44 93.4 50 107.0 51 109.3 51 109.3 230 493.5

Subtot al 86.0 104.9 118.5 124.5 124.6 558.5

Reduction in cost following roads improvements % 5 10 20 -

86.0 104.9 88 112.6 112.1 99.7 515.3

Motorcycles 90 63 5.7 74 6.7 88 7.9 99 8.9 109 9.8 433 39.0Bicycles 30 155 4.6 171 5.1 252 7.6 265 8.0 260 7.8 1;103

10.3 11.8 15.5 16.9 17.6 72.1

Lorries, sundry transport(4,ooo im/y) 130 520 57 29.6 61 31.7 56 29.1 49 25.5 47 24.4 270 140.0

Reduction in cost following roads improvesente % 1.0 20.0 30.0roads improvements

Total field and garages vehicles M x 0 29.6 31.7 26.2 20.4 17.1 125.0

Total vehicles M x 0 125.9 148.4 154.3 149.4 134.4 712.4

Total 108.8 210.2 222.0 218.6 203.6 1,035.2

Expenses on ongoing project 96.7 96.7 96.7 96.7 96.7 483.5

Incremental cost 84.1 113.5 125.3 121.9 106.9 551.7

C. OPERATING EPENSES FOR EXPATRIATES 26.7 34.9 28.5 19.5 16.9 126.5(see Table 4)

GRAND TOTAL 90.8 160.4 166.8 141-4 123.8 683.2

September 20, 1973

MALI

INTERATED RURAL D2ELMOPM$NT PROJECT

RURAL TRiACKS IMPROVDOENTS(HF' 000)

Price/unit(includin

import duties) duties/unit 1 2 3 4 5 Total

1. Vehicles and Equipment

Tipper trucks 7T 7,500 1,500 17 127,500 17 127,500Initial stock of spare parts 16,000 3,000 - 16,000 16,000Graders (120 HP) 17,000 3,500 2 34,000 2 34,000Small equipmrnt and tools 3,000 500 3,000 3,000h wheel drive 3,600 1,300 1 3,600 3,600

Subtot al 184,100 184,100

2. Staff (annual salary)

Road inspectors 1,260 1 1,260 1 1,260 1 1,260 3 3,780Clerk/typist/bookeeper 420 2 840 2 840 2 840 6 2,520Gang leaders 480 h 1,920 4 1,920 4 1,920 4 1,920 16 7,680Mechanics 420 4 1,680 4 1,680 4 1,680 12 5,040Driver 400 1 400 1 400 1 400 3 1,200Watchmen 145 8 1,160 8 1,160 8 1,160 24 3,480Laborers 100 68 6,800 68 6,800 68 6,800 32 3,200 236 23,600Casuals 3.000 1.000 1,000 1,000 6.000

Subtotal 3,000 15,060 15,060 15,060 5,120 53,300

3. Operating Expenses

Tipper trucks (20,000 km/y) RF/lm 130 MF 2, 6 00,000/y 7,000 17 44,200 17 44,200 17 44,200 4 10,400 150,000Graders (200 days/y) MF/d 33,500 MF

6 ,700,000/y 2 13,400 2 13,400 2 13,400 1,480 41,680Bulldozers 30 days/y) MF/d 77,000 MF 2 ,300,000/y 2 4,600 2 4,600 2 4,600 13,8004 wheel drive (25,000 km/y) MF/km 90 MF 2,2 50,000/y 1 2,250 1 2,250 1 2,250 6,750Upkeep and renewal smallequipment and tools 500 1,000 1,000 500 3,000Construction materials 2,000 2,000 2,000 500 6,500Office expenses 500 500 500 1,500

Subtotal 7,000 67,450 67,950 67,950 12,800 223,230

Total 10,000 266,610 83,010 83,010 18,000 1460,630

Expenses on ongoing project 10,000 10,000 10,000 10,000 10,000 50,000 '

GRAND TOTAL - 256,610 73,010 73,010 8,000 410,630 CDX

4. FAC Road Proiect L1 600,000 331,000 - - - 931,000

/L This FAC grant would rehabilitate 438 km of type B road in the Western sectors of the project erea.The cost of this FAC program is not included in the cost of the proposed IRD project which only coversspot improvements on rural tracks. It is however mentioned for record as it was specially designed tofacilitate OA activities in an area lacking in road communications. Similar IDA road projects whichwould likewise assist in the project development are also excluded from the cost of the proposed IRD project.

December 30, 1973

MALI

INTEGRATED RURAL DSVELOPMENT PROJECT

FUNCTIO;SAL LITEACY(MF' 000)

Unit Cost 1 2 3 4 5 TOTAL

1. Evaluation Study - 45,000 - - - 45,000

2. Investments:

Equipment 36 490 17,640 255 9,180 200 7,200 - - 945 34,020

Vehicles 6,360 - - - - 6,360

24,000 9,180 7,200 - - 40,380

3. Training:

2 animators per center 9 980 8,820 510 4,590 400 3,600 - - 1,890 17,010

h. Technical Visits

By expatriates 10,000 9,000 9,000 - - 28,000

5. Staff

HQ - zones and regions 28,000 32,000 34,000 - - 94,000

6. Recurrent Expenditure

HQ - zones and regions 18,000 20,000 22,000 - - 60,0oo

88,820 119,770 75,800 - - 284,390

7. Expenses on Ongoing Project 33,000 33,000 33,000 - - 99,000

8. Incremental Cost 55,820 86,770 42,800 - - 185,390

July j 1973

CD

vo

ANNZX 12Table 9

MALI

I;TEGRATED Fr33kAL D5SVELOPMENT PZOJZT

AgriculturaiesearcnZ,OO)

A. CEfLsALS ASEARCH 1 2 3 4 5 Total

1. Vehicles

Pick ap 2,200 1 2,200 - _ _ _ _ 2,202

2. Soostatacos

Land prepara'ton, fPncie.g, sheds 2,500 1,000 3,50C

3. q:pr"et - Fornltre 500 1,000 1,500

Z3. Staff

A- csstfa 1,14Z 1 1,140 1 1,40C 1 1,140 1 1,140 1 1,14G0 5,700Heodesoan 2L'J 14 860 4 860 4 86 4 860 4 88o . 880 , 8 14 862 20 4,30Gittcrohn 1145 4 580 4 580 4 520 J 580 4 580 22 2,gr ,,Lottr 100 8 Boo 8 800 6 800 8 8o0 H Bo 14: Z,0003siuais 50 40 2,000 Co 2,000 42 2,000 4O 2,000 40 2,000 20^ 12,000

Suroot-l 5,380 5,380 5,380 5,380 5,380 26,900

j . 0peraa:r g 3xp enses

Pot ut (10,0 C kr/y) 4F/Ie/y 70 p.y. 1 700 1 700 1 700 1 700 1 700 3,500Feeaailzera,s, sedeù, fuLn2 ,icides etc. 600 60C 6uO 600 60C 3,0 ZO

.iacttt 1,300 1,30v 1,300 1,300 1,3 OÙ ,g506

.ozi ceea rlsearhe11,880 8,680 6,630 6,680 6 F80 4u,60û

r hG'.Z ND!3.1 n lSFURCIJk. 0600012AKAAOz

Z`;ck 3p 2,200 1 2,200 - - 1 2,200 -eo,143

_. t au cceSt - oFrnitur- 1,700 1 1 1 O1,700

*. Staff

I0HO fessorval a.: 1stance 8,00e 8,030 8,00f #4 oor 5,000 8,0" ,4u,uuOL. ho-rat-ry :essistasto O5c/y 6 3,000 M 3,002 6 3,002 6 3,200 f 3,30') 1C 5,Cleek 1420/y 1 1420 1 020 1 20) 1 1422 1 1420: 2, IOriver 1400/y 1 400 1 LOO 1 400 1 40C 1 LOO ?,trWatcnma,ca 1J5/y 1 1J5 I 145 1 î145 1 145 1 1LS 725Lator 100/y 7 700 / 702 7 700 7 700 7 702 3,5_u

12,665 12,665 12,665 13,665 1e, (5 e3,3l5

Operticg zrpenses

Pick up - (20,ÙOU kt/y) MF/km 70 1,400/y 1,4uO 1,LUV 1,4LU 1,1400 1,i4D. 2, W

Local transport 5O` 500 5: 5502 503 2,50'Office erpe-ses 500 500 500 500 5VJ 50:JHoo-es, upkeep, rnt, electrieaty 2,000 2,3u0 2,CûO 2,000 c,000 1 J,OJUSr.ll equipment LOO 400 400 400 430 2,000Laborotoey ee0 uieeets 400 aJOO 401 400 40lu 2,> 0Seeda, fertalleera, foagicioe etc. 200 200 20u 203 200 1,uJOU02.oesiaoo oea fo,.ar analysis 700 700 700 300 3,530

6,300 6,300 6,300 6,320 6,363 31,5u0

Totai Groandeut Reee.,ch 22,865 18,95 1î8,965 21,165 S,95e5 10,925

C. PEDOLOGY

1. Vehicles

4 wheel drive 3,600 3,600 3,800

2. mIn.ent 350 150 500

3. Staff

IRAT TecenicalI asciosacce 9,000 18,0@0 9,0Ou 36,JO0Assistant 1,140 1,114 2,280 1,140 4,560Driver 400 400 Bou 400 1,60uLabor 100 200 500 200 800

10,740 21,480 10,740 142,960

4. Operoting Fxpenses

4 wheel drive (23,000 km/y) M1F/em 90 2,250/y 1,125 2,250 1,125 4,500Analyses 1,200 2,400 1,200 4,800Report oad top preparation 4,403 4,400 8,800

2,325 9,050 6,725 15,100 ,|

Total Pedology 17,015 30,680 17,465 65,160

GkAND TOTA.L 314,7345 44,660 56,325 45,31û 25,645 206,685

Septenber 4, 1973

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Medic al Assistance(MF '000)-

UnitCost 1 2 3 t 5 TOTAL1. Vehicles

h wheel drive 3,600 - 3 10,800 2 7,200 (3) 10,800 8 28,8002. Buildings

Dispensaries 5,000 5,000 10,000 15,000 35,0003. Equipment

Technical 1,800 600 2,400Camping 1.000 500 1,500

2,800 600 500 3,9004. Staff

Governnent stafî 10,432 10,432 10,432 10,432 10,432 52,160Assistants 405 - 6 2,430 8 3,240 10 4,050 10 4,050 34 13,770

10,432 12,862 13,672 14,482 14,482 65,9305. Operation

4 wheel drive (25,000 km/y) MF/ln 90 3 6,750 5 11,250 5 11,250 5 11,250 18 40,500Motorcycles MF/m 7,500 6 540 8 720 10 900 10 900 314 3,060Bicycles MF/m 2,500 18 540 24 720 30 900 30 900 102 3,060Upkeep existing buildings 4,750 4,750 4,750 4,750 4,750 23,750New buildings 250 500 1,000 1,750 3,500

4,750 12,830 17,940 18,800 19,550 73,8706. Medicines 10,000 10,000 10,000 10,000 40,000

Total 15,182 54,292 54,412 53,282 70,332 247,5007. Expenses on Ongoing Project 15,182 15,182 15,182 15,182 15,182 75,910

INCREMENTAL COSTS - 39,110 39,230 38,100 55,150 171,590

b 7M

October 7, 1973

INTEGRATED RURAL DEVELOPIMENT PROJECT

Veterinary Assictance(MF '000)

Year: 1 2 3 4 5

Ur.it

Cost Total

1. Construction: Spray races 1,400 7 9,800 2 2,800 9 12,600

2. Vehicles

Pick up 2,200 2 4,400 1 2,200 2 4,400 1 2,200 6 13,2004 wheel drive 3,600 i 7,200 2 7,200 4 14,400

11,600 2,200 11,600 2,200 27,600

3. Equipment

Freezers 400 7 2,800 2 800 9 3,600Small equipment & ice boxes 60 il G60 3 180 2 120 3 180 4 240 23 1,380

- 3,460 980 120 180 240 4,980

4. Staff (An. Sal.)

Veterinary assistants j! 405 4 1,620 5 2,025 5 2,025 5 2,025 5 5, 025 24 9,720Dressers 1/ 321 3 963 4 1,284 4 1,284 4 1,284 4 1,284 19 6,o99Vaccinators 2/ 101 8 808 10 1,010 10 1,010 10 1,010 10 1,010 48 4,848

- 3,391 4,319 4,319 4,319 4,319 20,667

5. Operation

Vehicles (25,000 km/y) MF/kmc 90 4 9,000 5 11,250 5 11,250 5 11,250 5 11,250 24 54,000Motorcycles MF/month 7,500 il 990 14 1,260 14 1,260 14 1,260 14 1,260 67 6,030Upkeep spray races & sundries - 200 300 400 500 600 2,000

10,190 12,810 12,910 13,010 13,110 62,030

6. Medicines - 7,100 5,500 12,600

Subtotal 45,541 28,609 17,345 29,015 19,869 140,477

7. Sxpenses on Ongoing Project 2,583 2,583 2,583 2,583 2,583 12,915

Incremental Costs 42,958 26,026 14,766 26,526 17,286 127,562

Taxes: Vehicies Pick up 500 2 1,000 1 500 2 1,000 1 500 6 3,0004 vheel drive 1,300 2 2,600 2 2,600 - h 5,200

3,600 500 3,600 500 8,200

Squipment: Freezers 100 7 700 2 200 9 900Small equip. 15 11 165 3 45 2 30 3 45 4 60 23 345

- 865 245 30 45 60 1,245

4,465 145 30 3,645 560 9,445

1/ Malian budgJet2/ On contract

JuIy 7, 1973

MAL I

INTEGRATED RURAL DEVELOPMENT PROJECT

Evaluation Unit(MF'0O0)

1 2 3 4 5 TOTAL

I. STAFF (Annual Salaries)

A- H.Q.Economist 15,000 - 1/2 7,500 1 15,000 1 15,000 1 15,000 3.5 52,500Research Assistant 1,140 - - - - - I 1,140 1 1,140Statistician 1,000 - 1/2 500 1 1,000 1 1,000 1 1,000 3.5 3,500Clerk 630 - 1/2 315 1 630 1 630 1 630 3.5 2,205Typist 420 - 1/2 210 1 420 1 420 1 420 3.5 1,470

Total A - 8,525 17,050 18,190 18,190 60,815

B-FieldSupervisors 900 - I 900 2 1,800 2 1,800 3 2,700 8 7,200Enumerators 500 - 10 5,000 20 10,000 20 10,000 30 15,000 80 40,000Clerk/Typist 420 - 1 420 2 840 2 840 3 1,260 8 3,360

Total B - 6,320 12,640 12,640 18,960 50,560

Total I - 14,845 29,690 29,690 37,150 111,375Unit Price ) (Import)

II VEHICLES (Ind. Imp. duties) (duties)Station Wagon 2,500 600 - 1 2,500 - - I 2,500 2 5,000Light Water 1,600 400 - 2 3,200 - - 3 6,800 5 8,000Office Furn. & Equipment - - - - 500 400 - - - - 900

Total II - 6,200 400 - 7,300 13,900

III. OPERATING COSTSRent and upkeep House - 780 1,560 1,560 1,560 5,460Rent and upkeep Offices - 300 600 600 700 2,200Stationery, Stamps, Telephone - 100 200 200 200 700Maintenance & Operation -

-Station Wagon(MF 1.75 million/Y) - 875 1,750 1,750 1,750 6,125-Light Wagon (MF 1.5 Million/Y) - 1,500 3,000 3,000 4,500 12,000-Bicycles (MF 90,000/Y) - 450 900 900 900 3,150-Motorrycles (MF 30,000/Y) - 150 300 300 300 1,050

Sundries _ 200 200 200 200 800 N

Total III - 4,355 8,510 8,510 10,110 31,485

GRAND TOTAL - 25,400 38,600 38,200 54,560 156,760

December 28, 1973

AN1NEX 12Table 13

MALI

INTEGEATED RURAL DEVELOPMFNT PROJECT

Incremental Farm Inputs 1/ Cost and Financing(MF Million)

A) Costs 1 2 3 4 5 TotalSeasonai Inputa

S o Inuiters 31.9 hi6.5 83.9 1h3.1 155.3 460.7Seeds 53.0 96.5 136.6 160.2 196.0 642.3Fungicides, Insecticides 1.9 3-8 5.6 8.0 -0.0 29.3

Sub Total 86.8 146.8 226.1 311.3 361.3 1132.3

Far, Imalemente

Cart boxe-2/ 16.3 25.6 32.0 38.8 46.9 159.6Implements 125.6 202.0 252.4 307.8 371.4 1259,2

Sub Total 141.9 227.6 284.4 346.6 418.3 1418.8

Grand Total 228.7 374.4 510.5 657.9 779.6 2551.1

B) Financing 3/3Sales/Parchase on Cash- 19.6 32.7 42.7 54.o 65.7 214.7

Mediumn Tern CreditFarmers' down payYments 28.6 45.9 57.5 70.1 84.6 286.7Farmers' Repayments 28.7 74.7 103.0 127.5 333.9NIedium Term Credit/SChER 57.3 63.4 40o4 36.8 htî.8 239.7

3ub Total 85.9 138.0 172.6 209.9 253.9 860.3

Seasenal CreditFarmera' Re-rdnaent - 72.3 119.6 1R8.6 268.9 649.4Met Credit/SCAER 33-8 15.8 39.8 63.2 13.0 165.6Net Credit CA 38e5 31.5 29.2 17.1 26.0 142.3

Sub Total 72.3 1-19.6 188.6 268.9 307.9 957.3Subsidies

Impements V 39.7 64.o 79.8 97.9 117.5 398.9Oeasonal Input - 11.2 20.2 26.8 27.2 34.6 119.9

3ub Total 50.9 84h1 106.6 125.1 152.1 518.8

Grand Total 228.7 374h4 510.5 657.9 779.6 2551.1

1/ Full cost delivered to farmers; excludes spare parts for ir.plements and self supplied seeds. Details arein ANIEX 11, Tables 5 and 6.

2/ Cart boxes are made by village craftsmen3/Value of cart boxes and actual sale price for fungicides/insecticides.LV Net subsidies mainly for seeds, taking into account profits on other inputs.

Noveinber 19, 1973

HALI

INTBGRATED RURAL DEVELOPMENT PROJECT

Revol ingFun(MFI'OCO()

UnitCost 1 2 3 4 5 Total

A. Vehicles: Motorcycles 118 57 6,726 34 4,012 76 8,968 47 5,546 86 10,148 300 35,400Bicycles 36 93 3,348 96 3,456 180 6,480 115 4,140 175 6,300 659 23,724

Total 10,074 7,468 15, 448 9,686 16,448 59,124

Disbursements 1/ 17,542 15,448 9,686 16,448 - 59,124Refunds 2/ 5,037 8,771 11,458 12,567 13,067 50,900

Credit 12,505 6,677 (1,772) 3,881 (13,067) 8,224

B. Blacksmith Equipment

Phase 1 30 33 990 62 1,860 77 2,310 81 2,430 95 2,850 348 10,440Phase 2 150 33 4,950 30 4,500 56 8,400 69 10,350 73 10,950 261 39,150Phase 3 200 7 1,400 6 1,200 11 2,200 14 2,800 38 7,600

Total 66 5,940 99 7,760 139 11,910 161 14,980 182 16,600 647 57,190

Disbursements 1/ 13,700 11,910 14,980 16,600 _ 57,190Refunds 2 1,980 4,566 8,537 11,550 14,496 41,129

Credit 11,720 7,344 6,443 5,050 (14,496) 16,061

GRAND TOTAL 24,225 14,021 4,671 8,931 (27,563) 24,285

Revolving Fund 24,225 14,021 4,671 8,931 51,848

1/ Disbursements one year in advance (years 1 and 2 together in year 1).

2/ Refunds: Motorcycles monthly allowance MF 7,500, monthly refund MF 6,500, half price refunded equally in the year of purchase and in the following year.Bicycles : monthly allowance MF 2,500, monthly refund MF 2,000, " " " " " " " " " ""

Blacksmith equipment : refunds in one third of the price per year starting in the year of purchase.

September 5, 1973

INTEGRATED RURAL DEVELOPMENT PROJECT

Contingencies(MF Million)

1 2 3 4 5 TOTAL

A. Price Contingencies 1/

I. Equipment: Furniture and equipment 29.9 90.9 80.1 4.1 0.7 205.7Ox-drawn equipment,fertilizers, agrocides 159.4 252.3 341.9 458.9 536.7 1,749.2

Vehicles 127.1 364.3 37.9 60.5 139.4 729.2

Sub-Total 316.4 707.5 459.9 523.5 676.8 2,684.1

Contingencies % 10.0 17.7 28.0 44.0 55.0 (33.0)

31.6 125.2 128.6 232.4 373.6 891.4

II. Civil Works: Buildings 115.6 401.4 409.6 16.0 15.0 957.6Contingencies / 12.0 22.0 27.0 61.0 80.0 (25.0)

Total 13.9 88.3 112.0 9.8 12.0 236.0

III. Miscellaneous: Malian Staff 41.6 115.0 148.5 137.1 137.4 579.6Operating Costs 120.8 278.7 298.0 261.9 185.3 1,144.7Cart Bodies 16.3 25.6 32.0 38.8 46.9 159.6Seeds 53.0 96.5 136.6 160.2 196.0 642.3

Revolving Fund 24.2 14.0 4.7 8.9 - 51.8Studies - 45.0 - - - 45.0

Sub-Total 255.9 574.8 619.8 606.9 565.6 2,623.0

Contingencies % 5.5 8.3 10.3 26.5 34.7 (18.0)

Total 14.1 47.9 64.3 160.7 196.4 483.4

IV. Technical Assistance 209.3 341.5 277.8 205.8 187.3 1.221.7

V. TOTAL; Project Costs 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4Price Contingencies 59.6 261.4 304.9 402.9 582.0 1,610.8

B. Physical Contingencies

Total Project Costs 897.2 2,025.2 1,767.1 1,352.2 1,444.7 7,486.4Contingencies % 5 5 5 5 5 5

Total 44.8 101.1 88.4 67.6 72.2 374.1

C. GRAND TOTAL CONTINGENCIES 104.4 362.5 393.3 470.5 654.2 1.984.9

1/ Price contingencies = average 22% on total costs or 26% on total costs less technical assistance.

2/ Grand total contingencies = average 27% on total coasts.

April 25, 1974

AINEX 12Table 16

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Import Duties and Taxes(MF Million)

Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL L

Buildings 17.4 64.2 65.5 2.6 2.4 124.6 16%

Equipment andFurniture 8.9 27.3 24.0 1.2 - 61.4 30%

Vehicles 33.8 94.0 12.5 16.8 45.5 202.6 28%

Operating Costs 17.9 47.5 67.5 64.1 33.7 225.7 20%

TOTAL 78.0 233.0 169.5 84.7 81.6 646.8

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT ANNEX 13Table 1

Financing per Heading(MF Million)

TOTALYears 2- 5 Years - 5

Years 1 2 3 4 5 % - %

1. Buildings IDA - 320.3 327.7 12.8 12.0 80 672.8 70 672.8FAC 90.2 - - - - - - 10 90.2Mail 25.4 B1.1 81.9 3.2 3.0 20 169.0 20 194.6

Total 115.6 401.4 409.6 16.0 15.0 100 B42.0 100 957.6

2. Furmiture and Esuipuent IDIA - - - - - - - - -FAC 3.3 60.1 54.9 2.8 0.5 67 118.3 59 121.6Mali 26.6 30.8 25.4 1.3 0.3 33 57.8 41 84.4

Total 2 29.9 90.9 80.3 4.1 0.8 100 176.1 100 206.0

3. Vehicles IDA - 240.5 25.0 39.9 92.0 66 397.4 55 397.4FAC 73.0 - - - - - - 10 73.0Mail 54.1 123.8 12.9 20.6 47.4 34 204.7 35 258.8

Total 127.1 364.3 37.9 60.5 139.4 100 602.1 100 729.2

4. Teehnical Assistance 1/ IDA - 290.4 236.1 174.8 159.3 85 860.6 70 860.6FAC 209.3 51.1 41.7 31.0 28.0 15 151.8 30 361.1

Total 209.3 341.5 277.8 205.8 187.3 100 1,012.4 100 1,221.7

5. Maltan Staff IDA - 86.2 111.4 102.8 103.0 75 403.4 70 403.4FAC - 25.9 33.9 31.0 33.8 23 124.6 21 124.6Mali 41.7 3.1 3.1 3.1 0.6 2 9.9 9 51.6

Total 41.7 115.2 148.4 136.9 137.4 100 537.9 100 579.6

6. Operatin Coests IDA - 222.7 238.3 209.6 148.1 80 818.7 72 818.7FAC 63.8 43.7 47.4 40.3 35.9 16 167.3 20 231.1Mali 56.9 12.1 12.2 12.2 1.2 4 37.7 8 94.6

Total 120.7 278.5 297.9 262.1 185.2 100 1,023.7 100 1,144.4

7. Farmers 16.3 25.6 32.0 38.8 46.9 100 143.8 100 159.6

8. Ox-Drawn EquipmentFertilizers and Agrocides Mali 127.5 136.8 149.4 181.2 153.2 39 620.6 43 748.1

Fasmers 31.9 115.5 192.5 277.7 383.5 61 969.2 57 1.001.1

Total 159.4 252.3 341.9 458.9 536.7 100 1,589.8 100 1,749.2

9. Seeds IDA - 31.5 29.2 17.1 26.0 18 103.8 16 103.8Mali 53.0 26.5 37.4 43.9 53.7 27 161.5 33 214.5Farmers - 38.5 70.0 99.2 116.3 55 324.0 51 324.0

Total 53.0 96.5 136.6 160.2 196.0 100 589.3 100 642.3

10. Revolvine Fund Mali 24.2 14.0 4.7 8.9 - 100 27.6 100 51.8

Il. Studies 2/ IDA - 45.0 - - - 100 45.0 100 45.0

TOTA IDA - 1,236.6 967.7 557.0 540.4 50 3,301.7 44 3,301.7FAC 439.6 180.8 177.9 105.1 98.2 8 562.0 13 1,001.6Mal. 409.4 428.2 327.0 274.4 259.4 20 1,289.0 23 1,698.4Farmers 48.2 179.6 294.5 415.7 546.7 22 1.436.5 20 1.484.7

897.2 2,025.2 1,767.1 1,352.2 1,444.7 100 6,589.2 100 7,486.4

12. Contingenctes IDA - 114.2 183.3 168.8 232.0 37 698.3 35 698.3FAC 14.4 64.0 57.8 55.9 65.7 13 243.4 13 257.8Mali 85.8 119.7 62.0 83.2 98.6 19 362.5 23 449.3Farmers 4.2 64.6 90.2 162.6 257.9 31 575.3 29 579.5

Total 104.4 362.5 393.3 470.5 654.2 100 1,880.5 100 1,984.9

GRA1ID TOTAL IDA - 1,350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0FAC 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4Mali 495.2 547.9 389.0 357.6 358.0 ~ 19 1,652.5 23 2,147.7Farmers 52.4 244.2 384.7 578.3 804.6 24 2.011.8 22 2,064.2

1.001.6 2.387.7 2,160.4 1.822.7 2.098.9 100 8.469.7 100 9.471.3

Il Technical assistance: This includes - Technical assistance for the main subproject MF 1,020.2 milliEconomist for the evaluation of the project MF 52.5 millionConsultants for the appraisal of the functional

literacy ongoing program MF 73.0 millionSpecialista for the research program MF 76.0 million

Cereai producer priaes and marketing arrangements study and Total MF 1.221.7 millionaccountacy assistance to OACV.

MALI

INTEGRATED RURAL DEVELOPM9ElT PROJECT ANNEX 13

Sources of Financing

TOTALYears 2 - 5 Years 1 - 5

1 2 3 4 5

1. IDA

Buildings - 320.3 327.7 12.8 12.0 80 672.8 70 672.8Vehicles - 240.5 25.0 39.9 92.0 66 397.4 55 397.4Technical Assistance _ 290.4 236.1 174.8 159.3 85 860.6 70 860.6Malian Staff - 86.2 111.4 102.9 103.0 75 403.4 70 403.4Operating Costs - 222.7 238.3 209.6 148.1 80 818.7 72 818.7Seeds - 31.5 29.2 17.1 26.0 18 103.8 16 103.8Studies 1/ - 45.0 - - - 100 45.0 100 45.0

Sub-Total _ 1,236.6 967.7 557.0 540.4 50 3,301.7 44 3,301.7Contingencies _ 114.2 183.3 168.8 232.0 37 698.3 35 698.3

Total - 1.350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0

Il. FAC

Buildings 90.2 - - - - - - 10 90.2Furniture and Equipment 3.3 60.1 54.9 2.8 0.5 67 118.3 59 121.6Vehicles 73.0 - - - - - - 10 73.0Technical assistance 209.3 51.1 41.7 31.0 28.0 15 151.8 30 361.1Malian Staff - 25.9 33.9 31.0 33.8 23 124.6 21 124.6Operating Costa 63.8 43.7 47.4 40.3 35.9 16 167.3 20 231.1

Sub-Total 439.6 180.8 177.9 105.1 98.2 8 562.0 13 1,001.6Contingencies 14.4 64.0 57.8 55,9 65.7 13 243.4 13 257.8

Total 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4

111. AlI _OVERNMENT

Buildings 25.4 81.1 81.9 3.2 3.0 20 169.2 20 194.6Furniture and Equipment 26.6 30.8 25.4 1.3 0.3 33 57.8 41 84.4Vehicles 54.1 123.8 12.9 20.6 47.4 34 204.7 35 258.8Malian Staff 41.7 3.1 3.1 3.1 0.6 2 9.9 9 51.6Operating Expenses 56.9 12.1 12.2 12.2 1.2 4 37.7 8 94.6Ox-drawn equipsent, fertilizers

and agrocides 127.5 136.8 149.4 181.2 153.2 39 620.6 43 748.1Seeds 53.0 26.5 37.4 43.9 53.7 27 161.5 33 214.5Revolving Fund 24.2 14.0 4.7 8.9 - 100 27.6 100 51.8

Sub-Total 409.4 428.2 327.0 274.4 259.4 28 1,289.0 23 1,698.4Contingencies 85.8 119.7 62.0 83.2 98.6 19 363.5 23 449.3

Total 495.2 547.9 389.0 357.6 358.0 19 1,652.5 23 2,147.7

IV. FARMERS

Cart Bodies 16.3 25.6 32.0 38.8 46.9 100 143.3 100 159.6Ox-drawn equipuent. fertilizers

and agrocides 31.9 - 115.5 192.5 277.7 383.5 61 969.2 57 1,001.1Seeda - 38.5 70.0 99.2 116.3 55 324.0 51 324.0

Sub-Total 48.2 179.6 294.5 415.7 546.7 22 1,436.5 20 1,484.7Contingencies 4.2 64.6 90.2 162.6 257.9 31 575.3 29 579.5

Total 52.4 244.2 384.7 578.3 804.6 24 2,011.8 22 2,064.2

V. GRAND TOTAL

IDA - 1,350.8 1,151.0 725.8 772.4 47 4,000.0 42 4,000.0FAC 454.0 244.8 235.7 161.0 163.9 10 805.4 13 1,259.4Mali 495.2 547.9 389.0 357.6 358.0 19 1,652.5 23 2,147.7Farmers 52.4 244.2 384.7 578.3 804.6 24 2.011.8 22 2.064.2

1.001.6 2.387.7 2.160.4 1,822.7 2.098.9 100 8.469.7 100 9.471.3

1/ Cereal producer prices and marketing arrangements study & accountancy assistance to OACV.

AENEX 13Table 3

MAIJ

INTEGRATED RURAL DEVELOPMENT PROJECT

Schedule of IDA Disbursements(US$ '000)

CumulativeFiscal Year Disbursements per Disbursements& Semester Semester at end of Semester

1975:lst 1,000 1,0002nd 1,300 ,300

1976:lst 1,h00 3,7002nd 1,200 4,900

1977:lst 1,000 5,9002nd 800 6,70C

1978:lst 500 7,2002nd 500 7,700

1979:lst 300 8,0002nd

April 26, 1974

ANiNEX 14MALI Page 1

INTEGRATED RURAL DEVELOPMENT PROJECT

MARKET AND PRICES FOR PROJECT COi'4MODITIES

A. Fats and Oils - Past Trends andFuture Prospects of Demand and Supply

1. Total estimated consumption of fats and oils expanded steadily ata trend rate of 2.9 percent from 1960 to 1970, but both the geographic andthe product composition of demand changed during this period. While totalconsuinption in both the developed and the developing groups of countries roseat a trend rate of 3.2 percent, in centrally planned economies the trend rateof growth was only 1.8 percent.

2. The product composition of supply and use also changed substantiallyduring the past decade. Consumption of animal fats and marine oils rosemuch more slowly than consumption of vegetable oils. Within the vegetableoils group the composition of usage also changed in response to availabilitiesof the different oils and to a number of economic and non-economic factors.

3. The rise in consumption of vegetable oils mainly reflected somecountries growing demand for them as substitutes for animal fats in food uses.higher food consumption of vegetable oils (in the form of margarine, shorteningand other cooking oils) compared with animal fats seems to reflect, at leastin some major consuming countries, the concern of consumers with excesivecholesterol intake. Other factors have played a role, however, such as theincreased consumption of convenience foods. In North America, concern overcholesterol and the development of convenience foods both seem reasonableexplanations for the fact that consumption per head of vegetable oils, notablyin the form of margarine and shortening, lias risen rapidly during the lastdecade while consumption of butter has fallen. In other major developedconsuming areas the pattern was different. In the enlarged EEC the evidenceof a change in consumer preferences is less marked. In Japan, consumptionof animal as well as vegetable oils and fats rose rapidly in the last decade,mainly reflecting income growth.

4. The shift of demand away f'rom animal fats and oils and to vegetableoils opens opportunities for virtually any of these oils in view of the highdegree of substitution between them. For each individual oil the rate ofgrowtlî of supplies compared with that of competing oils does have an influenceon its relative price, but this influence is less the closer the balancebetween total supply and total demand of all vegetable oils.

ANNEX 14Page 2

5. According to Bank staff projections, world demand for ali fats andcils will continue to grow at the sane rate as in the 1960s, reaching atotal of 56 million tons in 1980. The Bank's estimate is higher than theFAO's by 2.4 million tons, because we expect a stronger rise of demand indeveloped countries. The FAO has projected that the share of vegetable oilswill rise to 69.5% of the total, which would imply world consumption of vegetablEoils in 1980 of about 39 million tons. The increase in the share of vegetableoils compared with other fats and oils is due to a number of factors which arelikely to be felt more in developed than in developing countries. However,future demand for vegetable oils in developing countries is also expected toincrease considerably faster in this decade, reflecting the rise in incomesin these countries and the fact that the income elasticity of demand for theoils tend to be relatively high at low income levels. The assumed rate ofincrease of overall demand for vegetable oils is 3.8 percent per year from1970 to 1980 in developing countries.

6. The changing distribution of world demand between different fatsand oils over the last decade has been accompanied by changes in the supplyavailabilities not related to changes in prices or demand of the differentcommodities. World production of animal fats and oils increased slowly com-pared to vegetable oils. On the who]e production of butter has remainedalmost stagnant, though there were increases in particular areas such asthe ESC under the stimulus of high support prices which merely led to stockaccumulation and the need to subsidize consumption. The growth of lard pro-duction also has been very slow partly as a result of production practiceswhich have led to a decline in fat per animal. The output of marine oil pro-ducts increased rapidly in recent years, but these are mainly consumed asanimal feeds. The rise in production of marine oil products and animal fatsand oils is expected to be slow in the decade to 1980. For butter, lard andmarine oils combined, production is expected to grow at the rate of 1.9 percentper year, against 3.5 percent a year for vegetable oils. On the basis ofestimated production trends world supply of all fats and oils combined in1980 is expected to be roughly in balance with world demand at the level of56 million tons oil or fat equivalent. Consequently the expected increaseof supplies of fats and oils will be absorbed in the market without persistentdownward pressure on the prices of these commodities as a group.

7. Within the vegetable oil group, production has grown comparativelyslowly except for sunflowerseed oil, rapeseed oil, soybean oil and palm oil.World output of groundnuts increased at a diminishing rate in the last decade,particularly after 1967. lWorld exports of groundnut oil have been stagnantsince 1955, except for an increase during 1966-68. Production is not expectedto rise again at rates comparable to those of the 1950s in the coming decade,unless vigorous expansion plans are undertaken. World coconut productionremained stagnant from the mid 1950s to 1970, and the improvement noted in1971-72, which was attributable to favorable weather conditions, wasexpected to be short-lived. The development and use of high-yield hybridvarieties could increase production but the effect will not be felt until

ANNEX 14Page 3

after 1980. The production of cottonseed oil has grown slowly in the pastdecade at the rate of less than 1 percent a year. A rise in supply occurredin 1972 and is expected to continue into 1973 due to favorable weather condi-tions and to the diversion of cottonseed fr?m direct feeding to oil extractionin some countries. However, the long-term growth, which is linked to thegrowth of output of cotton, is not expected to exceed 1.7 percent per annum.Sunflowerseed is produced mainly in centrally planned economies and the rateof growth of output has tended to level off towards the end of the last decade.The recent trend in output of sunflowerseed oil is expected to continue inthe period to 1980 as yields stabilize and the area under sunflower in theUSSR will probably not be greatly expanded beyond present levels. The possibilityof a large scale introduction of sunflower plantings in the United Statesstill seems remote. The reverse tendency was shown by output of rapeseed,whiclh originates mainly in Canada, Western and Eastern Europe, the USSR, andcentrally planned economies ih Asia and Southeast Asia. Most of the futureexpansion of output is expected in Canada, Western Europe, the USSR and EasternLurope and this may provide cômpetition for other vegetable oils in developedmarkets. UIowever, even at recent growth rates the increase in output ofrapeseed will not be sufficient to capture a large share of the growingmarket for oils.

8. In contrast, the output of both palm oil and soybean oil, which hasgrown rapidly in the 1960s is expected to follow a strong upward trend inthe coming decade. The important producing countries planted large areas tooil jlalm in the 1960s, and have currently on hand plans supported in mostcases by the necessary financial arrangements - to plant more areas in thenext few years. This planting is in addition to other forms of rehabilita-tion of the oil palm industry. World soybean output has risen from 26.5 milliontons in 1956-60 to 43 million tons in 1966-70, a rise of 65 percent. Thelargest quantity increase was recorded in the United States where productiondoubled, rising from 14.2 million tons in 1956-60 to 28.7 million tons in1966-70. Brazil's output of soybean rose fastest in percentage terms duringthe same period (+521 percent), but this country's total output in 1966-70was still less than a million tons. The United States' soybean output isexpected to rise to about 48 million tons in 1980; Brazilian output is alsoexpected to continue rising sharply, to about 10 million tons in 1980. Theseincreases are mainly in response to demand for animal feeds both in the pro-ducing countries and abroad, but much output of soybean oil will also resultas a by-product of bean crushing for cake manufacture. The production ofsoybeans in China has remained at about the same level of 9 to 10 million tonsthroughout the last two decades and future output is likely to be tailoredto domestic needs. If this is so, China will become neither a net exporternor a net importer of soybeans or soybean cake and oil in the next decade.Total world output, including that of China, is forecast to reach roughly70 to 75 million tons of soybeans hy 1980, or 11 million tons oil equivalent.

ANNEX. 14Page 4

9. Since the supply of most other vegetable oils is expected to growslowly, the greater part of the increase in world demand for oils in thenext decade will be met by palm oil and soybean oil. The 1971 and the pro-jected 1980 snares of the different oils in world output of fats and oilsare shown in the following table:

Commodity 1971 1980Output Z of Total /1 Output Z of Total /1

Edible Vegetable Oils 26.00 60.46 36.8 65.71Soybean 7.10 16.51 11.0 19.64Sunflower 3.55 8.26 5.0 8.93Groundnut 3.05 7.09 4.1 7.32Cottonseed 2.50 5.81 4.0 7.14Rapeseed 2.50 5.81 3.3 5.89Coconut 2.30 5.35 3.0 5.36Palm 2.10 4.88 2.9 5.18Olive 1.55 3.60 1.9 3.39Sesame 0.70 1.63 0.9 1.61Palm Kernel (Incl.babasu) 0.65 1.51 0.7 1.25

Animals Fats 14.10 32.79 15.8 28.21Tallow/Greases 5.00 11.63 5.9 9.64Butter (Fat Content) 4.90 11.39 5.4 8.04Lard 4.20 9.77 4.5 10.54

Industrial Olls 1.70 3.95 2.0 3.57Linseed 1.25 2.91 1.3 2.32Castor 0.35 0.81 0.5 0.89Tung 0.10 0.23 0.2 0.36

M^larine Ohis1.25 2.90 1.4 2.50

Total 43.00 100.00 56.0 100.0

/1 'Llllion metric tons oil or fat equivalent

ANNEX 14Page 5

B. Groundnuts

Marketing

10. Groundnuts were Mali's leading export crop until 1961 but they arenow second after cotton. Data on past and estimated future groundnut productionand marketing are shown in Annexes 1, 2 and 3. The average officially marketedproduction of undecorticated groundnuts for the period 1968/1972 was nearly30,000 tons compared with,z 111,000 tons in the project area at full development.

11. Marketing of groundnuts is carried out by Operation Arachide inareas under its supervision. This includes collection to the market place,and evacuation to the dumps (seccos) of the Societe Malienne d'Import Export(SOIIIEX) or the Societe d'Exploitation des Produits Oleagineux du Mali (SEPOM).Tlhese activities are expected to decrease as road development in the projectarea enables private transporters to play a more active role. Elsewherecollection is carried out by SOMIEX licensed agents, who operate withoutsupervision. These agents supply less than 25% of unshelled groundnuts marketedthrough officials channels. The role of the licensed agents will diminish asOA activities expand.

12. The estimated production marketed through official channels variesfrom area to area, depending mainly on the density and efficiency of themarketing network. It is estimated that marketed production of unshelledgroundnuts in the project area will increase from about 60% in 1972/73 to 65%witlh increased production and improvements in marketing facilities. Thedifference between harvested and marketed production is accounted for by:

- Seed requirements (about 100 - 150 kg/ha)

- Home consumption, estimated at 10 - 15 kg per capita peryear, depending oui the availability of other food crops

- Sales on other markets, which are estimated to range between10,000 and 30,000 tons, to meet the demand of non-groundnutsproducing areas in Mali and neighboring countries, mainlyMauritania.

Processing

13. Decorticating of unshelled groundnuts is carried out by SOMIEX, orby SEPOM which uses the shells as fuel. SEPOM operates a crushing mill atKoulikoro with a capacity of 30,000 tons of unshelled groundnuts and about10,000 tons for other seeds (karite, cotton seed). This mill is currentlyworking at full capacity. A second mill, with the same capacity, is plannedfor the Kita area in 1976. This would be financed with the assistance oftne German Federal Agency for Development Aid. Even after completion of

ANNEX 14Page 6

the second miil large quantities of groundnuts would still have to be exportedunprocessed, since total crushing capacity would represent about 54% of thetotal quantity marketed officially and 35% of estimated production of theproject area. SEPOtI exports oil and cake and supplies refined oil to SOMIEXfor distribution on the domestic market.

Present Prices and Price Mechanism

14. As for other commodities, groundnut prices are established by gov-ernment decree. A "Bareme Arachide" (Groundnut schedule) which is publishedannually contains producer prices, the prices to be paid by SOMIEX/SEPOM toOA against delivery (including the levies for OA and SCAER and reimbursementof marketing costs) and a theoretical CIF price applicable to SOMIEX. Theschedule for the 1972/73 campaign is shown in Table 1.

15. The producer price for undecorticated groundnuts was fixed at MF30/kg in 1968/69 and to date has remained unchanged. This has providedsufficient incentive to farmers as the groundnut producer price is morebeneficial than prices paid for other crops (Annex 1, Table 2) and comparesfavorably with groundnut producer prices paid in neighboring countries (Table2). The 1967 devaluation of the Malian Franc enabled the Government to raiseproducer prices and to earmark revenues from groundnut sale proceeds for OAand the Office de Surveillance et de Regulation des Prix (OSPR).

16. OSPR was established in 1968 by merging the Groundnut and CottonStabilization Funds and the Caisse de Perequation; the latter organizationwas responsible for stabilizing petroleum products and certain basic consumergoods. The Groundnut Stabilization Fund is financed by a levy of MF 7,000/tonon exported decorticated groundnuts and MF 1,800/ton crude oil exported. TheCroundnut Stabilization Fund's revenues, expenditures and reserves to dateare shown in Table 6. The net reserves amounted to MF 520 million at the endof fiscal year 1972. Hlowever, these reserves are not sufficient to supportvariations in export prices predicted for the future.

Future Prices

17. Mali ranks far behind major West African groundnuts producing coun-tries sucli as Nigeria, Senegal, Niger and Gambia. The estimated total marketedproduction from the project at full development would represent about 3.5% ofworld exports compared to 2% at present; future annual world groundnut pro-duction and export are not expected to differ greatly from those of the lastsix years, the estimated rate of growth in volume of world groundnuts and oilexports being 1.5% per annum over the period 1969/1980. This compares withan annual growth of 3.5% for the 10 years period 1960-70, and a forecastgrowth rate of 12% per annum for palm oil. Thus groundnuts are expected tostill be in relatively short supply by 1980, although substitution betweendifferent oils may keep prices for groundnut products in step with other fatsand oils. On this basis the projected increase in groundnut production inMali is expected to have little impact on world market prices.

ANNEX 14Page 7

18. The Bank's Economic Analysis and Projections Department predictsa decline in world groundnut prices from the unprecedented US$393 per m ton(CIF Europe) in 1973 to US$235 in 1980 (in constant 1973 terms). If thisprediction holds the economic price at farm gate (see Table 4) will fall from'IF 105,480/ton undecorticated in 1973 to MF 53,250/ton at full developmentin 1980. This decline in world price is taken into account in the calculationof the economic rate of return.

C. Millet and Sorghum

Marketing

19. Sorghum, millet and, to a lesser extent, rice, are the major staplefood crops in Mali. Details of production and marketing from 1967 chrough1972 are shown in Annex 1, Table 1. In recent years estimated millet andsorghum production has averaged 600,000 tons compared with annual requirementsof 750,000-800,000 tons. The reduction in production is mainly due to theunfavourable weather conditions experienced in Mali during the past fiveyears. However it is difficult to assess whether the short fall has not beenaccentuated by the disincentives of the official marketing system or smugglingto neighboring countries.

20. Only 5% of current production is marketed for each. Although theOffice des Produits Agricoles du Mali (OPAM) has a marketing monopoly oncereals, and movement of grains i subject to strict controls, it has beenunable to operate effectively in view of the wide disparity between officialand black market prices, poor organization aid financial difficulties. OPAMis also responsible for distributing cereals supplied by aid donor countriesor imported with Government funds. The volume of millet and sorghum handledby OPAM in the eight years period to 1973 is shown in the following table:

Millet/Sorghum Handled by OPAM

TMetric Tons 1965/66 66/67 67/68 68/69 69/70 70/71 71/72 72/73

Domestic Production 25,000 56,000 60,000 8,000 26,000 10,000 30,000 5,000

Imports /1 - - - 17,000 - 25,000 37,000 200,000

/1 .,stimated figures; inports consist mainly of aid donations.

ANNEX 14Page 8

Prices

21. Producer and consumer prices fer millet and sorghum are fixed annuallyby Government, which also determines freiLght rates for transportation of cereals.Table 7 shows the millet/sorghum price schedule for 1972/73. The officialprices for cereals are very low compared to prices paid for other crops, suchas cotton and Qroundnuts, black market prices and the prices prevailing inneighboring countries (see Table 8). This is a major disincentive to theproduction and marketing of cereals. Although acknowledging the need toraise cereal prices government is reluctant to do so because of the impacton the cost of living (cereals account for about 34% of the cost of livingindex) and on salaries. As a first step the producer price for millet andsorghum was raised from MF 18 to 20 in 1972/73, and further increases to-F 25-26/kg are under consideration following recommendations by governnentservices and USAID experts. This, together with a reorganization of OPAM toprovide proper price stabilization, would do much to improve cereal productionand marketing.

Arrangements under Project

22. To insure the success of the important cereal component of theproject, Government has agreed that (i) sorghum and millet producer prices wouldbe increased from MF 20 per kg to a minimum of MF 25 per kg effective fromNovember 1974, although the increase would be publicized in May before theplanting period; (ii) a study on millet and sorghum producer prices andn!arketing arrangements, to be completed by April 30, 1975, would be carriedotit by consultants and under terms of references acceptable to IDA. Thisstudy would provide the basis for further decisions on both producer prices:.Ànd marketing arrangements which should be satisfactory to IDA.

23. There should be no difficulty in disposing of project production asestimated annual deficits in 1978/79 are 200,000 tons for millet, sorghum andmaize (300,000 tons taking into account buffer stocks requirements). Projectproduction would represent 12% of the estimated shortfall.

24. For the rate of return calculation import substitution pricesbased on the Bank's Economic Analysis and Projections Department, have beenu-sed. Details are shown in Table 9.

ANNEX 14Table 1

MA1I

INTEGRATED RURAL DEVELOPMENT PROJECT

Bareme Arachide (Groundnut Schedule)

Seasons 1973/74(MF/mt)

Undecorticated Decorticated

Producer Price 30,000

"tOperation Arachide" cess 7 7,600Collection Costs 3,556Handling/Bagging 390Buying Allowance 900SCAER cess 2/ 2,000Selling Price to SOMIEX/SEPOM 44v44

Bag Allownace 585Dessication/loss 1,335

Cost Price Delivered to Decorticating Dump2/ 45,781 67,325

Decorticating Cost 4/ 1,775Handing/Onloading l, 250Inland Transport/Insurance 556Financial Charges 1, 458Waste 10Road/E'ail Freight to Malian Border 5,552Government Taxes 5/ 8,951Stabilization Fund Levy 10,000Rail Freight Border to Port 6,880Port Charges 3,,526

FOB Cost Price 107$293

Cost from FOB to CIF 15,280

CIF Cost Price 122,563

1/ This amount is levied only on groundnuts marketed through nOperation Arachide?,and covers OA extension service expenses and seed treatment and handling costs.

2/ Levied both in "Operation Arachide" area and outside to partly cover the sub-sidies on farm inputs.

3/ Rate decorticated to undecorticated 68%.I4/ Machine decorticated by SOMIEX.g/ Consists of i) taxes: MF 4,901; ii) export tax: 4,o50.

ANNEX 1 Table 2

MALI

INTERATED RURAL DEVEL JNT ÂRJECT

keroducer iFrices ror Uroundnuts

rrices raict to Producer in Mali and Neigfboring Countries(MF/kg - 1972/73 Canmaign)

Unlhelled Hand-Shelled Machine-Shelled

Mali 3 40

Niger 32 48

Senegal 4b.:e

Upper Volta zô - 3e 49-54

1/ r~rice paid to the producer in Senegal was raised recently and wouldbe MF 51/kg for the 1973/74 canpaign.

ANNEX 14

MALI - Table3

INTEGRATED RURAL DEVELOPMENT PROJECT

Internatonal Prices of~ Groundniu ta (ondinlt, <Ul-

and Groundiut Cake

(US$ per metric ton)

Groundnut 01l Groundnuts Groundnut Cake

Annual Averages (1) (2) (3)

1960 327 197 891961 330 196 861962 274 171 97l9O3 268 172 1001964 315 187 1041965 325 206 1061966 297 187 103r67( dOi .1(9 L nn1968 270 166 971969 332 207 1001970 378 229 1091971 446 254 1051972 433 271 1171973 546 393 296

Forecasts

1980 Cudrrent Terms 787 425 2671973 Constant Terms 435 235 147

(1) Up to December 1971 Nigerian, 3-5% bulk, n.f.s. c.i.f. Europe. From January 1972Nigerian/Gamxbian/any origin, c.i.f., U. K.

(2) Nigerian shelled n.f.s. c.i.f. Europe

(3) Argentina, 50% exmorters, n.f.s. c.i.f. North European Ports.

Source: F. A. 0. CCP: OF/ST ?3/CRS.2 and Bank's Economic Analysis and ProjectionsDepartment (April 1974).

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

GROUNDNUT PRICE STRUCTURE

Economic Farm Gate Price(Constant 1973 MF and m ton)

1973 1974 1975 1976 1977 1978 1979 1980 Onwards

CIF European Port US$ -/ 390 340 300 280 265 255 245 235

Equivalent MF 2/ 195,000 170,000 150,000 140,000 132,500 127,500 122,500 117,500

Ocean Freight/Insurance 3/ 12,925 12.550 12.250 l2.100 11,990 11,910 11,840 11,760

FOB Dakar 182,075 157,450 137,750 127,900 120,510 115,590 110,660 105,740

Transport Border/Port and PortCharges 4/ 11,500 11,500 11,500 11,500 11,500 11,500 11,500 11,500

Exporter/Seller Commission 5/ 3.650 3,650 3,650 3,650 3,650 3,650 3,650

Available at Malian Border 166,925 142,300 122,600 112,750 105,360 100,440 95,510 90,590

DecorticatLng/Transport fromdump to border 4/ 6,950 6,950 6,950 6,950 6.950

-- Value at dump 159,975 135,350 115,650 105,800 98,410 93,490 88,560 83,640

-- Equivalent unshelled (70%) 111,980 94,745 80,955 74,060 68,890 65,440 61,990 58,550

-- Marketing cost from farmto dump 6/ 6,500 6,400 6,200 5,900 5,600 5.OO 5,300 5,300

Economic Farm Gate Price 105,480 88,345 74,755 68,160 63,290 60,140 56,690 53,250

1/ Bank's Ecnomic Department Projections as of April 5, 1974.

2/ Conversion rate US$ 1 = MF 500.3/ MF 10,000/m ton + 1.5% of CIF value for insurance.

4/ Actual charges net of tax; includes road and rail freight, insurance and handling.

5/ Estimate: 2% FOB value (rounded) for SOMIEX overheads.

6/ Transport coEts, based on economic vehicle operating costs, are higher than Government fixed freight rates.

They are expected to dectine as a result of general road improvement program and project ad hoc road improvements.

Other marketing costs estimated to MF 2,500/ton include buying costs, and other allowances.

February 15, 1974

Cr z

C-

MALI

INTEGRATED RURAL DEVELO'ENT PROJECT

Groundnut Destination of Marketed Production

1973 1974 1975 1976 1977 1978 1979 1980

Total Production *(Unshelled) 86,000 108,000 128,000 151,000 162,000 167,000 171,000 171,000

Marketed(Unshelled) 55,000 65,000 79,000 97,000 106,000 109,000 111,000 111,000

Maximum Crushing Cap.(Unshelled) 30,000 30,000 30,000 45,o000.- 60,000 60,000 60,000 60,000

Available for Export(Unshelled) 25,000 35,000 49,000 52,000 46,oO 49,000 51 ,000 51 ,000

Equivalent Shelled 17,500 24,500 34,300 36,400 32 ,200 34,300 35,700 35,700

Crushing Mill Output i/

a) Groundnut cake 12,700 12,700 12,700 19,000 25,300 25,300 25,300 25,300

b) Crude Oil Total 8,700 8,700 8,700 13,000 17,300 17,300 17,300 17,300

- For export (3,700) (3,600) (3,500) (7,600) (11,700) (11,500) (11,300) (11,100)

- Domestic use (5,000) (5,100) (5,200) (5,400) (5,600) (5,800) (6,000) (6,200)

* Rounded figures.j Assxniing that the projected Kita crushing mill will be operational in 1976 and will function at full

capacity in 1977.Conversion rates:

1 ton unshelled = 70U kg shelled1 ton shelled = 410 kg of crude oil and 600 kg of cake (the additional weight 10 kg

is made of shell load)

September 1 9, 15'V3

ANNEX 1hTable b

MALI

INTEGRATED RURAL DEVLOPMENT PROJECT

Office de Surveillance et de Regulation des Prix

Groundnut Reserve Account (1969-1M72)(NF)

I Income

Receipts from former GroundnutsStabilization Funds (as of Jan. 1, 1970) 192,72L,946

Receipts of fiscal year 1970 144,000,955il s' " " 1971 175,231 ,825ih ti Il t" 1972 1 34,351 ,225

Total Revenue as of EndFi8cal Year 1972 646,312,951

II Expenditures (1970-1971-1 972)

Personnel 3,665,650Stationery/Operating 2,585,1 35Aid to Production 4,390,000Contribution to Debt Management Fund 41,123,410Actual Lisbursements/Groundnuts 57,055,043Other Contributions 16,524,410

Total Expenditures 125,343,648

Balance as of End Fiscal Year 1972 520,969,303

Source: Office des Prix et de Regulation.

Note: No expenditure breakdown per year is available. The Office des Prix etde Regulation total net reserves amounted to MF 2,597 million of which562 million for cotton accounts, as of Fiscal 1972 end.

ANNEX 1h.Table 7

MALI

INTEGRATED LRUAL DEVELOP*NiT PROJECT

Price and Marketing Structure for Sorghum/Mil Let

Domestic Price Structure

I. Price Schedule (Bareme) for Sorghum/Millet 1972/73

Producer Price 20,Bulking and Delivery 3,200Losses (5%), Bag, Financial Charges 2,50o0OPAM Overheads 5,O00

3'0,700âoun*ed1: 31 000

Retail MarginConsumer Price/Production Areas 32,500Consumer Price in Bamako 37,000Consumer Price in Kayes 39,OO0Consumer Price in Region vi (GAO) 45,000

II. Retail Prices in Cooperatives and on Bamako Market 19O5-1 973

(Current MF/kg)

1965 1966 1967 1968 1969 1970 1971 1972 1973(Jaln -May)

Cooperatives

Sorghum 17.5 17.5 22 29 29.5 31 32 33 37Rice RM 440 - - - - - 78 85.25 85.2N 8'.25

Market

Sorghum 47 56 46 39 46 41 60 73 102Rice RM 40 91 111 113 114 87 96 113 123 145

Source: Office de surveillance et de Regulation des prix (OSRP).

December 30, 1973

ANNEX 14Table 8

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Price and Marketing Structure for Sorghum/millet

Cereal Producer Price in Mali and Neighboring Countries 1972/73

(Governnent fixed prices MF/kg)

Millet/Sorghum Maize Paddy (Grade I)

Mali 20 20 25

Niger 24-36 - 3

Senegal 30-34 32 42

Upper Volta 28 30 43

ANNEX 14Table 9

MAII

INTEGRATED RURAL DEVELOPMENT PROJECT

Price and Marketing Structure for Sorghum/Millet

Economic Farm Gate Price(Constant 1973 I'F and MT)

73/75 7G')7/78 79 Onwards

FOB US Gulf: US$ 95 85 70

Ocean freight insurance (US$) 25 25 25

CIF Dakar US$ 120 110 95

Equivalent MF: 60,000 55,000 47,50,D

Porterage/Harbor dues: 2,900 2,900 2,900

Transport Bamako./Delivery 10,500 10,500 10,500

Economic value Bamako (bulk) 73,4OO 68,400 60,900

Transport from production areaStoconsumption centers 8,200 8,200

Intermediaries margin 2,000 2,000

Economic Farm Gate Price 63,200 58,200 &,Q,700

Note:

(a) Conversion rate: US$ 1 = MF 500

(b) Cost from Dakar to Bamako are actual charges net of taxes.

(c) Transportation from production areas to consumption centers are basedon the following assumptions: long distance haulaSe: 230 Lm (Sikasso/Segou-Bamako). Collection: 30 km on feeder roads ,AB) and 20 km ontracks. Costs are based on avera'e transport costs shown in Annex L,Table 7, adjusted to 1973 price level.

December 28, 1973

ANNEX 15Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Farm Models and Budgets

Basic Data

1. Data on population, farm size and farm activity in Mali areeither scant or conflicting. The following information was compiled fromthe 1969/70 rural survey, the consultants Integrated Rural Developmentproject feasibility study, "Operation Arachide" records and other sources.

(i) Population. Farm population in the OA area in 1972/73(Year O) is estimated at 486,000 (about 85% of totalpopulation) and the number of farm units (or households)at 52,000, the average household consisting of 9.3 persons.At full development, the total farm population in theexpanded project area is expected to increase to nearly1 million in 107,000 farm units.

(ii) Area cropped and farm size. Total project area cropped in1972/73 (project year 0) was 213,600 ha, the average farmsize being 4.1 ha (2.2 under millet and sorghum and 1.9under groundnuts). At full development this would increaseto nearly 463,000 ha (average farm size 4.3 ha). Withoutthe project the estimated average farm size would be 3.8ha of which 1.4 under groundnuts.

Basic Assumptions

2. (a) The farm models and budgets show the impact of the projecton:

(i) subsistence farmers shifting from traditional cultivationpractices to improved techniques and inputs recommendedby the project (Farm budget A); Table 1.

(ii) advanced farmers proficient in improved cultivationtechniques and adopting ox-powered cultivation (Farmbudget s). The latter case would apply either to thenew farmers after, say year 4 or to farmers alreadysupervised by OA (Table 2). The cash flow projectionfor this category of farm is shown in Table 3.

(b) A summary of technical progression for the farmer insituation A (subsistence, farmer, manual cultivation) andthe change in area for the farmer in situation B (proficientfarmer using ox-drawn implements and expanding areacropped) is shown below:

AçNEX 15Page 2

Budget A

Technical Progression for a Subsistence Farnmer AdoptingImproved Techniques

Groundnuts Sorghum/Millet

Year O traditional cultivation traditional cultivation practicespractices

Year 1 timely sowing and correct traditional cultivation practicesdensity

Year 2 use of improved seed and traditional cultivation practicesfungicides

Year 3 application of fertilizers use of fungicides

Year 4 full development rotation to take advantage offertilizer residual effect

Year S full development full develop.ent

Budget B

Changes in Area Cropped due to Ox-drawn Implements

Totalarea (ha) YO Yi Y2 Y3 Y4 Y5

Groundnuts 2 2 2.5 3 3 3Sorglhum/Millet 2 2 2 2.5 3 3

Total 4 4 45.5 6 6

of which ox-cultivatedGroundnuts O 0 1.5 2.5 3 3Sorghum/Millet O 1.5 1.5 2.5 3 3

Total O 1.5 3 5 6 6

improved cultivation practices have been completed inYear O.

ANNhX 15Table 1

INTREGlTED RURAL DEVELOPMENT PROJ0T

ParoI Dudget A

Ftrm Under Manual Cultivat5qa Adoptineg itoroved Techniques ./

° ; 2 -~~~Years_____ _4______

1. trop Yield. Production sud Value

Groundnuts

area (ha) 1.2 1.2 1.5 2 2 2

yield (kg/ha) S00 800 950 1,200 1,200 1,200

production (kg) 600 960 1,425 2,400 2,400 2,400

value (at MF 30/kg) 18,000 28,800 42,750 72,000 72,000 72,000

Sorehus/Millet

rea (ha) 2 2 2 2 2 2

yield (kg) 605 605 605 695 845 845

production (kg) 1,210 1,210 1,210 1,390 1,690 1,690

value (et MFi 35/kg) 42,350 42,350 42,350 59,650 59,150 59,150

Total value of Produ-titu 60,350 71,150 85,100 120,650 111,150 131,150

2. Production costs

Seeds 2/

Groundnuts (MF) 2,340 3,960 5,692 6,600 6,600 6,600

SorghP=/Millet (MF) 700 9L5 9bS 94c 9?Is q4c

Funglcideo&

Groondnuto - - 253 338 338 338

Sorghuo/oillet - - - 100 100 100

Fertilioors - - - 5,200 3,200 5,200

Overall îoceooeeaL 800 800 875 1000 1.000 1.000

Total 3,840 5,705 7,765 14,183 14,183 15,183

3. Net Volue of Production 56,510 65,445 77,335 106,467 116, 9k7 11 6,07

Fa-ily Consu_ptio aod Taxes

Faoily Coosueptioon1

45,475 45,475 L8,45o 48,45o 18,450 48,450

Head taxeo / 2.800 2.800 28002 80 800 2.800 2.800

Total 58,275 48,275 51,250 51,250 51,250 51,250

5. Net Caoh Onco

Annual 8,235 17,170 26,094 55,217 65,717 65,717

Gunulative 8,235 25,405 51,59° 106,707 172,424 238,1ù1

6. Retor ta Labac

- Labor requicenent~

- Groundnuts 97 120 158 232 232 232

- Ooeghu,o/colllet 126 136 136 142 156 156

Total 223 256 294 374 388 388

Net Reveoue/Maoday Worked (M4F) 253.4 255.6 263.0 284.7 301.S 301,5

Net Cash InconeeManday Worked (Mi7) 36.9 67.1 88.7 147.6 169.4 169.4

Net Revon.e/Cap,ta (MF) £,648 7,69; 9,098 12,526 13,761 13,761

NRt Rsvenue/OCpita (uS$) 16 18 22 30 33 33

/ Basic assucptinos: si.e cf holding: 3 to 4 ha, fanily of o.5 persons of

which 3.5 active and 2 taxahle.

Soedo. Grcucdnu; 65 kg/ha in yeor 0, thceasfter 110 kg/ha.Millt/sccghu- 10 kg/ha ij yeaT 0, theroafter 13.5 kg/ho et 2' 35.In year 2, pur-hase cf grour.drut improved seedo o ME' 34.5/kc;seeds rp-aced ecoh fo-r-h year, o-hbr-o-e c`' 30/kg.

3 lt presernt officiol seiig price.

E lotir-e:-d et MF 250/ha for touis.

5t Groundnuts: 15 kg/capita/year valued ut 'M 30/kg.Sorghun/milet: 14O kg/capite/year, incr..eamg to 150 ig/capi;Ca/er foc;year 2; valuei at MF 35/kg.

j MF 1 ,4 S/c.e adult.

,/ ee Accex 3, talle 1:.

Beecbar c, 19733

O 11 1 1 hbb 1, 1 h hi , o tz b X n hi J

h Z Ch i an 1> h n. h |r i h h

Dn >n--o > a- S ,œH ,t- _ O | ' h ho'hC0 > °OhtO-|en- o e, a n o 5 e ieh C o. t

°. Ch Oh o. O' . o o o- c o o ° w H 9 o, o o nw n o o.hi~~ ~~ o F - h

C~~O I wnHo W ' n o' w

xo c ô co > 1u Q \~~~~~, k -w- oi b- koooôc°o ..- ~h-l-

gOeoflhee ~~~~~~~~~~~~~~~~~ ~~~~' t, h -~~~~~~~~~~~

ANNEX 15Tabe 3

MALI

INTEGRATED RURAL DEVELOPMENT

Farm Budget B

Cash Flvm for Farm under Ox-1ravis Cultivation Y

I Cash Outflow _____________--- - - -Years----- - - - - - --- - - - - -0 1 2 3 4 5 6 7 8 9 10

- Production inputs 14,228 8,238 9,748 11,407 22,942 11,557 11,557 11,557 22,942 11,557 11,557

- Equipme-t/ Draft p2 70,000 53,500 5,000 5,000 40,000 40,000 23,500 5,000 5,000 40,000 40,000Animais

- Taxes 2,800 2,800 2 .800 2,800 2 .800 2,8 2J89Q 2,800 2.800 2J800 2.800

Slb-total 87,028 64,538 17,548 19,207 65,742 54,357 37,857 19,357 30,742 54,357 54,357

/3Oown Paymient- 16 ,166 - --------

/4

Seasanai Credit 12,79n 5,200 6,500 7,800 19,185 7,800repayment

Medioe Tenu Credit - 16,167 16,167 - -repayisen t---

Total Outflo. '15,984 85,905 40,215 27,007 84,927 62,157 37,857 19,357 30,742 54,357 54,357

T1 ' ashi Infini.

/5Slaes (net) 75,935 74,575 90,925 117,660 139,065 129,165 129,165 129,165 139,065 129,165 129,165

lth. Incomes/ 50,000 - - - 50,000 50,000 - - - 50,000 50,000

Seasonal Crndit 12,963 5,200 6,500 7,800 19,185 7,800

Mediun Term Credit - _ -- - - -

Total Inflnw 138,898 112,109 97,425 175,460 208,250 186,965 129,165 129,165 139,065 129,165 129,165

JII Cash Balance

Annual 22,914 26,204 57,210 98,453 123,323 124,808 91,308 109,808 108,323 74,808 74,808

CuIulative 22,914 49,118 106,328 204,781 328,104 452,912 528,035 637,843 746,166 820,974 895,782

/L Basic assh-ptions see ANNEX 3.

12 Purchase of a pair ef oxen in year 0, repla.ement in years 4/5 and 9/10, purchase uf mnitieultivator and- seeder in year 1; purchase of spare parts the following years.

/3 One-third of total cost of eqoipent.

/4 Ioput and implement price cents include financial charges and delivery cout.

/5 Excloding home consumption, animal feed and seeds.

/6 Savings froi previo.s year in Year 0, proceeds nf ox sales for years after Year 0.

August 31, 1973

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Impact of Project on Consolidated Govermnaent Finance 1/(MF Million)

Year: 1 2 I 4 S 6 7 8 9 10 il 12 - 21 22 - 51Yr 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85- 1994/95-

1993/94 2023/24

INFLOWS

Proceeds from taxes on groundnuts 2/ 553.7 827.1 1,147.7 1,639.6 1,700.3 1,649.8 1,535.3 1,346.4 1,346.4 1,346.4 1,346.4 1,346.4 1,346.4

Duties and taxes on projectexpenditure 78.0 233.0 169.5 84.7 81.6 53.6 53.6 35.0 32.0 28.9 24.9 24.9 24.9

FAC Grant 454.0 244.8 235.7 161.0 163.9 - - - - - - - -

IDA Credit - 1,350.8 1,151.1 725.8 772.4 - - - - - -

Farmers' contribution to increaientalfarm inputs costs 3/ 34.7 209.6 343.8 524.9 734.2 482.2 389.8 309.1 309.1 309.1 309.1 309.1 309.1

Total Inflows 1.120.4 2.865.3 3.047.8 3,136.0 3,452.4 2.185.6 1.978.7 1,690.5 1,687.5 1.684.4 1.680.4 1.680.4 1.680.4

OUTFLOWS

Incremental farm inputs cost(unsubsidized) 4/ 212.4 348.8 478.5 619.1 732.7 324.7 329.8 329.8 329.8 329.8 329.8 329.8 329.8

Project administration 5/ 644.3 1,636.8 1,251.9 685.4 665.1 292.3 292.3 225.1 197.9 170.4 139.9 139.9 139.9

Revolving fund for blacksmith andextension workers' vehicles 24.2 14.0 4.7 8.9 (27.6) (18.8) (5.4) - - - - - -

Contingencies 103.0 353.5 383.4 455.9 631.0 - - - - - - - -

Total Outflows 983.9 2,353.1 2,118.5 1,769.3 2,001.2 598.2 616.7 554.9 527.7 500.2 469.7 469.7 469.7

Net Flow before Application ofDebt Service 136.5 512.2 929.3 14,366.7 1,451.2 1,587.4 1,362.0 1,135.6 1,159.8 1,184.2 1,210.7 1,210.7 1,210.7

Debt Service (service charge + repayment) - 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 28.1 65.6 140.6

Net Cash Flow 136.5 484.1 901.2 1,338.6 1,423.1 1,559.3 1,333.9 1,107.5 1,131.7 1,156.1 1,182.6 1,145.1 1,070.1

Cumulative Cash Flow 136.5 620.6 1,521.8 2,860.4 4,283.5 5,842.8 7,176.7 8,284.2 9,415.9 10,570.0 11,754.6 23,205.6 55.308.6

1/ Government Budget, Stabilization Fund, Operation Arachide and SCAER.2/ Levies on the proceeds from taxes and levies on groundnuts - see Table 2.3J Inputs supplied through SCAER and Operation Arachide only: includes cash purchases, down payaent and repayments.4/ Governaent expenditure for farm inputs including credit and subsidies.5/ Project, capital and operating costs.

April 26, 1974 -

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Impact of Proiect on Consolidated Government Finance

Detailed Proceeds from Taxes and Levies on Groundnuts(MF Million)

1 2 3 4 5 6 7 8 9 10 11 - 15

I. Marketed Output 1/(tons undecorticated)

- vith project 55,000 64,600 79,200 96,800 105,830 108,740 111,120 111,120 111,120 111,120 111,120- vithout project 47.840 50,850 54,500 55.530 56,230 56,230 56,230 56.230 56,230 56,230 56,230

Increment 7,160 13,750 24,700 41,270 49,400 52,510 54,890 54.890 54,890 54,890 54,890

II. Proceeds

Value at market 2/ 768.5 1,239.6 1,888.7 2,877.7 3,182.3 3,225.1 3,182.0 2,993.1 2,993.1 2,993.1 2,993.1Paid to producer 3/ 214.8 412.5 741.0 1,238.1 1,482.0 1,575.3 1,646.7 1,646.7 1,646.7 1,646.7 1,646.7

Accruing to Government 553.7 827.1 1,147.7 1,639.6 1.700.3 1,649.8 1,535.3 1.346.4 1,346.4 1,346.4 1,346.4

TII, Allocation of Proceeds 4/

To Government Budget

- Export taxes 44.9 86.1 154.8 258.6 309.5 329.0 343.9 343.9 343.9 343.9 343.9- Taxes on Marketing

Operations 3.9 7.6 13.7 22.8 27.3 29.0 30.3 30.3 30.3 30.3 30.3

To OA & SCAER 68.7 132.0 232.1 396.2 474.2 504.0 526.9 526.9 526.9 526.9 526.9

To Stabilization Fund 50.1 96.3 172.9 288.8 345.8 367.6 385.7 385.7 385.7 385.7 385.7

To SOMIEX (profits retained) 386.1 505.1 574.2 673.2 543.5 420.2 248.5 59.6 59.6 59.6 59.6

TOTAL 553.7 827.1 1,147.7 1,639.6 1.700.3 1,649.8 1,535.3 1,346.4 1,346.4 1346.4 1.346.4

1/ Marketed output without project is assumed to decrease from 61% (current ratio before project) to 53% as larger areas without adequate marketingfacilities are considered. Inversely, marketed output with project will rise to 64% and after a decline in Year 2 and 3 (60 and 62%) willlevel off at 65%.

2/ Projected value at farm gate plus costs of transportation from farm to market place see Annex 14.

3/ Prices to producer are assumed at MF 30/kg undecorticated groundnut (present official price at market). eX

4/ Based on existing levies (Bareme 1973/74) Rate of taxes for Government budget assumed unchanged.

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Foreign Exchange Benefits 1/(MF Million)

Year: 1 2 3 4 5 6 7 8 9 10 11 - 15

Foreign Exchange Benefitsfrom Croundnuts 1/ 836.6 1,369.6 2,119.7 3,257.2 3,643.3 3,691.9 3,669.8 3,480.7 3,480.7 3,480.7 3,480.7

from Millet/Sorghum 2/ 126.8 441.7 771.6 1,181.6 1,610.0 1,985.2 1,883.8 2,001.4 2,001.4 2,001.4 2,001.4

Total Benefits 963.4 1,811.3 2,891.3 4,438.8 5,253.3 5,677.1 5,553.6 5,482.1 5,482.1 5,482.1 5,482.1

Foreign Exchange Costs 3/ 560.9 1,337.1 1,209.8 1,020.7 1,175.4 322.4 325.1 290.2 276.0 261.7 245.9

Net Foreign Exchange Benefits 402.5 474.2 1,681.5 3,418.1 4,077.9 5,354.7 5,228.5 5,191.9 5,206.1 5,220.4 5,236.2

1/ Based on ineremental marketed output and value at Malian border from Annex 14, Table 4.

2/ Based on net incremental output and value at Malian border derived from Annex 14, Table 9.

3/ See Annex 12.

April 26, 1974.

ANNEX 17Page 1

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

RATE OF RETURN CALCULATION

1. Table 1 shows details of Benefits and Expenditures used incalculating the economic rate of return for the project.

2. The following assumptions have been used in the calculations

(a) Project life. The economic life of the project is assumedto be 15 years from project year 1 (1973/74). This takesinto account the useful life of the major investmentsof the project.

(b) Project Benefits. (see Table 2)

(i) Yields and outputs used in the calculations are shownin Annex 3. Requirements for seeds and grains foranimal feed have been deducted from production.

(ii) Prices used in the calculations are the economic pricesat farm gate shown in Annex 14, Tables 4 & 8. They arebased on international prices forecast by the Bank'sEconomic Analysis and Projections Department. Benefitsfrom groundnuts have been computed on an export basis,no account being taken of any benefit from processinginto oil. Benefits from millet and sorghum have beencomputed on an import substitution basis.

(iii) Benefits from the project road improvement componenthave been treated on the basis of direct transport andvehicles operating cost savings. For return on theroad improvement alone see Annex 4.

(c) Project costs.

(i) All costs used in the calculation exclude identifieddirect taxes, import duties and price contingencies.

(ii) The full unsubsidized cost of farm inputs and implements,including adequate distribution costs, has been chargedto the rate of return.

ANNEX 17Page 2

(iii) Incremental farm labor requirement and cost are shown inTable 3. The wage rate of MF 200/manday used in costinglabor represents the estimated average earning of the"Navetane," a seasonal migrant farm worker; the "Navetanat"is a major source of hired farm labor in Mali. Thisrate is regarded as a fair compensation for the disutilityinvolved in the additional effort required from farmersin the project. It compares with the return to labor fora farmer using almost no modern inputs (see Annex 15)and represents 57% of the official daily rate for casuallaborers in rural areas (MF 350).

(iv) Project administration costs include costs of supportingservices provided through the ancillary subprojects.The main subproject costs have been adjusted to includethe proportion of ongoing project extension staff andoperating costs which would have been given otherdevelopment assignments in the absence of the newproject. This proportion is estimated to 2/3 of1972/73 extension staff and operating costs.

3. Under the foregoing assumptions the estimated economic rate ofreturn of the project is 91.2% over 15 years and 91.3% over 20 years. Thesenisitivity has been tested over wide varieties of conditions and theftol1owinç are considered the most representative.

Costs Benefits from R/RGroundnuts Mfillet Sorghum (%)

110 100 100 69120 100 100 54130 100 100 44100 90 90 67100 80 80 49100 75 50 30.110 90 90 53130 90 90 33120 80 80 29110 75 50 22

MALI

TINTEGRATED RURAL DEVELO0PMENT PROJECT

Project Economic Cash Flow(MF Million)

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 ïear 11-15

1983/84-1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1987/88

I Project Benefits

Value of' incremiental productionGroundnut 758.1 1,024.7 1,773.9 2,873.9 3,229.5 3,335.7 3,326.9 3,125.0 3,125.0 3,125.0 3,125.0Millet/Sorghum 115.6 402.5 703,2 1,068.6 1,456.1 1,795.5 1,680.0 1,784.9 1,784.9 1,784.9 1,784.9

Total T 873.7 1,427.2 2,477.1 3,942.5 4,685.6 5,131.2 5,006.9 4,909.9 4,909.9 4,909.9 4,909.9

II Project Expendituresa) Project Administration CostsDevelopsient expenditures 2 68.5 1,,605.8 1,256.6 694.3 665.1 292.3 292.3 225.1 197.9 170.4 139.9OA expendltures -3/ 193.2 193.2 193.2 193.2 193.2 193.2 193.2 148.8 1-30.8 112.6 92.5

Subtotai 861.1& 1,799.0 1,449.8 887.5 858.3 485.5 485.5 373.9 328.7 283.0 232.4

Taxes on project expenditure ~-' 78.0 233.0 169.5 84.7 81-.6 53.6 53.6 35.0 32.0 28.9 24.9

Taxes on OA expenditure ~/14.5 -4. 5 î4.5 14.5 14.5 14.5 14.5 11.2 9. 8.4 6.9

Subtotal 92.5 247.5 184.0 99.2 96.i 68.1 68.1 46.2 41.8 37.3 31.8

Total administration cost 769.3 1,551.5 1,265.8 788.3 762.2 417.4 417.4 327.7 286.9 245.7 200.6

b) On Farsi Costs

Incremsental farm labor 5/76.0 327.6 517.4 790.0 927.0 1,026.0 1,037.8 i,042.8 1,042.8 1,042.8 1,042.8

Incremental farm inputs and equip-ment 6/ 211.8 348.3 480.3 639.1 766.4 360.4 365.5 365.5 365.5 365.5 421.5

Sondry expenditures 8.6 22.2 38.9 59.4 84.2 92.3 95.7 96. 96. 9689

Su.bto+&i 296.4 698.1 1,036.6 1,488.5 1,777.6 1,478.7 1,499.0 1,505.1 1,505.1 1,505.1 1,561.i

c) Physical Contingencies 44.8 101.1 88.4 67.6 72.2 - - - - --

Total II 1,110.5 2,350.7 2,390.8 2,344.4 2,612.0 1,896.1 1,916.4 1,832.8 1,792.0 1,750.8 1,76i.7

TII Net Economic Benefits (236.8) (923.5) 86.3 1,598.1 2,073. 3,235.1 3,090.5 3,077.1 3,117.9 3,159.1 3,148.2

Econoniic Rate of Return: 15 years; 91.2%; 20 years; 9 1.S

1/ See Table 2.See Annex 12.2/3 of ongoin'g CA staff and operating costs see Annex 12.About 20% of operating costs.

<P Tabliemt for seeds having been deducted fromi production, this includes only production and. distribution costs of im2proved seeds. F

February 14, 1974HH

MALI

INTEGRATED RURAL DEVELOPMENT PROJECT

Economic Cash Flow Calculation

Project Berefits

A. Quantities (Tons)

Groundnuts Year: 1 2 3 4 5 6 7 8

Incremental Production 7,470 13,520 26,830 46,480 56,430 61,215 64,885 64,885Incremental Seeds 283 1921 3100 4.316159 5,748 6199 6,199

Net Increment 7,187 11,599 23,730 42,164 51,271 55,467 58,686 58,686

Millet

Incremental Production 1,905 7,020 12,215 20,020 27,255 33,135 36,355 38,635Incremental Seeds 10 425 484 566 625 663 710 735Animal Feed /L 66 226 604 1,092 1,610 1,622 2,508 2,694

Net Increment 1,829 6,369 11,127 18,362 25,020 30,850 33,137 35,206

B. Vlalue (MF'000,000) /2

Groundnuts 758.1 1,024.7 1,773.9 2,873.9 3,229.5 3,335.7 3,326.9 3,125.0Millet/Sorghum 115.6 402.5 703.2 1.068.6 1,456.1 1,795.5 1.680.0 1,784.9

Total 873.7 1,427.2 2,477.1 3,942.5 4,685.6 5,131.2 5,006.9 4,909.9

/1 See Table 3.

/2 Economic farm-gate prices used for computation are in Annex 14, Tables 4 anc 9.

December 28, 1973 |x

o MALI

g INTEGRATED RURAL DEVELOPMENT PROJECT

Incremental Farm Labor

'-o Year: 1 2 3 4 5 6 7 8

Labor Requirement 1/('000 of Mandays)

Groundnuts 303 841 1,594 2,620 3,054 3,413 3,342 3,342

Millet/Sorghum 77 797 993 1,330 1,720

Total 380 1,638 2,587 3,950 4,635 5,133 5,189 5,214

Value (F'O000,000)(Using MF 200/manday) 76 327.6 517.4 790.0 927.0 1,026.6 1,037.8 1,042.8

Oxen Feed Requirement

Incremental Working Days (000)

Groundnuts 30 77 165 283 427 497 670 670

Millet/Sorghum 3 36 137 263 378 314 584 677

Total 33 113 302 546 805 811 1,254 1,347

Feed Requirement 2/(Tons of grains) 66 226 604 1,092 1,610 1,622 2,508 2,694

1/ Net increment, taking into account saving due to ox-powered cultivation.

2/ 2 kg of millet/sorghum/pair of oxen/working day.

@,Iz

>i

MALIINTERGRATED RURAL DEVELOPMENT PROJECT

PROJECT ORGANIZATION

PRODUCTION MINISTER

r General Directorate Insti tu te ofof Agriculture Rural Economy

I ~~~~~~~~~~~~~~~IN

Board of _ _ _ Project General Manager _ _ _Evaluation UnitDi rectors /

Deputy General Manager

Chief of PersonnelTechnical Manager Chief Accountant and social matters

Head Dy.Technical Credit Accounts O Training

STR ODC-:1 Manager

Sector _ _ _ 0.D.C._ _ _Sector .__ . . . __ Sector _ _Road Agents Chief BookkeeperGangs

_`2SubSector_ __ _ SubSectorChief Bookkeeper _

Basic Sector Chiefss- - - -

FARM E- =_

ANCILLARY SUB PROJECTS

A. Research Jointly with Directorate of Agricultural Research of l.E.R.B. Rural track improvement Direction Nationale des Travaux Publics (DNTPiC. Functional literacy Direcorate of Functional LiteracyD. Medical Assistance Directorate of Medical ServiceE. Veterinary Assistance Service de le levage et de la Sante Animale (SESA)

STR = Service des Travaux Routiers

2/ ODC = Ox Drawn CultivationWorld Bank-8320

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