Document of

The World Bank

FOR OFFICIAL USE ONLY --

Report No. 4243-PNG

STAFF APPRAISAL REPORT

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

April 8, 1983

Projects DepartmentEast Asia and Pacific Region

This document has a restricted distribution and may be used by recipients only in the per tormance oftheir officiai duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit - Kina (K)

K 1 = US$1.30

US$1 = K 0.77

WEIGHTS AND MEASURES

1 kilogram (kg) = 2.20 pounds1 metric ton (t) = 2,205 pounds

1 kilometer (km) = 0.62 milesI square kilometer (sq km) = 0.39 square miles1 hectare (ha) = 2.47 acres

GLOSSARY OF ABBREVIATIONS

ADB - Asian Development Bank

CC1, etc. - Clerk Class 1, etc.CDC - Commonwealth Development CorporationCSIRO - Commonwealth Scientific and Industrial Research OrganizationDPI - Department of Primary IndustryIFAD - International Fund for Agricultural DevelopmentISNAR - International Service for National Agricultural ResearchKBO - Key Board Operator

LAES - Lowland Agricultural Experiment Station, KeravatNPEP - National Public Expenditure PlanNPO - National Planning OfficePEM - Planning, Economics and Marketing Branch (DPI)PMTP - Plantation Management Training ProgramPNG - Papua New Guinea

PNGDB - Papua New Guinea Development BankPRC - Policy, Review and Coordination Branch (DPI)PSC - Public Service CommissionRDA - Rural Development AssistantRDO - Rural Development OfficerRDT - Rural Development TechnicianSO - Scientific Officer

GOVERNMENT OF PAPUA NFW GUINEAFISCAL YEAR

January 1 - December 31

FOR OFFICIAL USE ONLY

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. BACKGROUND .... . . . . . . . . . . . . . . . . . . . . . 1Introduction . . . . . . . . . . . . . . . . . . . . . . . 1Agriculture in PNG. 1

Development Issues, Objectives and Strategy . . . . . . . 3The Bank's Role . . . . . . . . . . . . . . . . . . . . . 4

II. AGRICULTURAL SUPPORT SERVICES IN PNG . . . . . . . . . . . . 5General . . . . . . . . . . . . . . . . . . . . . . . . . 5Crop Research . . . . . . . . . . . . . . . . . . . . . . 9Agricultural Education and Training . . . . . . . . . . . 16Planning and Economics .18

Agricultural Extension Support .19

Land Utilization Services .21Agricultural Project Development . . . . . . . . . . . . . 22Livestock Services . . . . . . . . . . . . . . . . . . . . 22Quarantine Services .... . . . . . . . . . . . . . . . 25Plantation Management Training ... . . . . . . . . . . . 25

III. THE PROJECT .... . . . . . . . . . . . . . . . . . . . . 26Project Formulation .... . . . . . . . . . . . . . . . 26

Project Description .... . . . . . . . . . . . . . . . 28Project Components .... . . . . . . . . . . . . . . . . 29

Crop Research . . . . . . . . . . . . . . . . . . . . . 29Agricultural Education and Training .31Planning and Economics .32Agricultural Extension Support .33Land Utilization Services .34Agricultural Project Development .34Livestock Services . . . . . . . . . . . . . . . . . . . 35Quarantine Services .35

Plantation Management Training .36Transit Staff Housing .36Monitoring and Evaluation .36

Fellowships . . . . . . . . . . . . . . . . . . . . . . 37Consultancies . . . . . . . . . . . . . . . . . . . . . 38Implementation Schedule .38

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Page No.

IV. PROJECT COST AND FINANCING . . . . . . . . . . . . . . . . . 40Project Cost .... . . . . . . . . . . . . . . . . . . . 40Financing . . . . . . . . . . . . . . . . . . . . . . . . 40Procurement .... . . . . . . . . . . . . . . . . . . . 40Disbursement .... . . . . . . . . . . . . . . . . . . . 42Accounting and Auditing . . . . . . . . . . . . . . . . . 42

V. PROJECT IMPLEMENTATION .43Implementation Responsibilities . . . . . . . . . . . . . 43Reorganization of DPI ... . . . . . . . . . . . . . . . 43Early Recruitments ... . . . . . . . . . . . . . . . . . 43Recruitment Procedures . . . . . . . . . . . . . . . . . . 44Reporting . . . . . . . . . . . . . . . . . . . . . . . . 44Operation and Maintenance ... . . . . . . . . . . . . . 45

VI. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . 45Benefits . . . . . . . . . . . . . . . . . . . . . . . . . 45Justification ... . . . . . . . . . . . . . . . . . . . 46Environmental Considerations . . . . . . . . . . . . . . . 46Risks ......................... . 46

VII. AGREEMENTS REACHED AND RECOMMENDATIONS . . . . . . . . . . . 47

TABLES IN THE TEXT

Table 2.1: Distribution of National and Provincial DPI Staffby Service, 1981 . . . . . . . . . . . . . . . . . . . 7

Table 2.2: Department of Primary Industry, 1981, Staff Numbers,by level of Qualification . . . . . . . . . . . . . . 8

Table 2.3: Time Allocation of Agricultural Research Staff by MajorResearch Groups and Activities, 1981 . . . . . . . . . 14

Table 2.4: Proposed Time Allocation of Agricultural Research Staffby Major Research Groups and Activities. . . . . . . . 15

Table 2.5: DPI-Colleges; Enrollments/Graduations, 1977-81; Staff, byNationality, 1981 ... . . . . . . . . . . . . . . . 17

Table 2.6: Distribution of Provincial DPI Extension Staff, 1981 20Table 2.7: Existing Agricultural Development Projects as of

July 1982 ... . . . . . . . . . . . . . . . . . . . 23Table 2.8: Proposed Agricultural Development Projects,

July 1982 ... . . . . . . . . . . . . . . . . . . . 24Table 2.9: PMTP Training Activities, 1976-82 . . . . . . . . . . 27Table 3.1: Proposed Implementation Schedule - Four and a Half

Year Project Period, July 1983 - December 1987 39Table 4.1: Project Cost Summary . . . . . . . . . . . . . . . . . 41

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Page No.

ANNEXES

Annex 1: Tables to the Main Report

Table 1: Project Cost Estimates . . . . . . . . . . . . . . . 50Table 2: Incremental Staff Requirements by Project

Component, Qualification and Nationality . . . . . 53Table 3: Breakdown of Consultant Cost Per Man-month .54Table 4: Estimated Schedule of Disbursement . . . . . . . . . 55Table 5: Proposed Allocation of Loan Funds. . . . . . . . . . 56

Annex 2: Related Documents in Project File . . . . . . . . . . 57

Chart: Organization of DPI . . . . . . . . . . . . . . . . 58Map: Location of Agricultural Support Services

Facilities .... . . . . . . . . . . . . . . . . 59

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I. BACKGROUND

Introduction

1.01 The Government of Papua New Guinea (PNG) has requested Bankassistance for a project to strengthen the country's agricultural supportservices, principally those administered by the Department of PrimaryIndustry (DPI), the main Government agency responsible for agriculture. Theproject was identified by the Government with Bank assistance in November1981 and prepared by an FAO/CP mission in May 1982./l Preparatory work forspecific components was undertaken by a group of consultants (education andtraining, extension support)/2 and by ISNAR (agricultural research)./3 Thisreport is based on information contained in these sources and on the findingsof an appraisal mission consisting of Messrs. H.H. Thias, K. Sengupta (Bank)and R.G. Spinks (FAO/CP) who visited Papua New Guinea in July 1982 and a postappraisal mission consisting of Ms. C. Subido, Mr. M Altaf liussain (Bank) andR.G. Spinks (FAO/CP) in November 1982. Mr. Saddington (Bank) reviewed the

final report.

Agriculture in PNG

1.62 With a land area of 500,000 square kilometers and a 1980 popula-tion of 3 million growing at about 2% p.a., PNG is sparsely populated and theconsiderable agricultural potential only partly utilized. The 1980 percapita GDP of US$780 is largely attributable to the Bougainville coppermine; average farm incomes are probably not much above US$200.

1.03 While agriculture contributes about one third to the country's GDPand roughly 40% to its exports, most of the country s rural population /4depend on agriculture for their livelihood. The dominant role of thissector as employer and source of income for the great majority of the peopleis unlikely to be challenged in the foreseeable future.

/1 Papua New C-uinea, Agricultural Support Service Project, PreparationReport (2 vols.), Konedobu, May 1982.

/2 Mc Killop Williamson & Associates Pty. Ltd. in association with SloaneCook & King Pty. Ltd: DPI Manpower and Training Review; Final Reportto the Government of Papua New Guinea (3 vols.), February 1982.

/3 ISNAR, The Crops Research Program and Organization in Papua New Guinea(Draft); The Hague, June 1982.

/4 The 1980 Population Census established that 87% of the country-speople lived in rural areas.

1.04 Papua New Guinea's diverse topography has resulted in the forma-tion of numerous isolated environments, particularly in the Highlandsregion, each with its own set of climatic, soil and other natural condi-tions, and with a matching multitude of plant varieties. The geographicfragmentation has also given rise to the development of numerous isolatedcommunities which are separated from one another by physical as well aslinguistic and cultural barriers. This natural and human diversity posesconsiderable problems for administration in general and specific functionssuch as agricultural research and extension in particular.

1.05 Agriculture follows three modes of production: the plantations(numbering about 900), originally foreign owned and managed but nowincreasingly in Papua New Guinean hands, smallholder cash cropping andsubsistence production from shifting cultivation, with considerable overlapamong the last two.

1.06 The major cash crop production in PNG during 1981 is shown below:

PNG 1981 Production from Major Cash Crops

Tons Weight Value Total ValueCrop 000 % US$/ton US$ ton x

Coffee 49.0 17 2,830 138.7 45Cocoa 31.9 11 2,080 66.4 22Copra 141.9 50 379 53.8 18Palm oil 39.7 14 571 22.7 7Palm Kernels 7.9 3 317 2.5 1Tea 7.8 3 2,020 15.8 5Rubber 4.2 1 1,250 5.2 2

Total 282.4 100 - 305.1 100

1.07 Over the last ten years the estate sector, with the importantexception of oil palm and coffee, has declined while smallholder production,except for copra, has followed an upward trend. However, this progress insmallholder cash cropping was accompanied by an increase in foodstuffimports in excess of the growth of urban populations due to higher purchas-ing power of rural consumers. Imports supply about one quarter of thecountry's food requirements and claim significant amounts of foreignexchange, particularly rice of which about 100,000 t are imported annually.

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1.08 The increase in consumption of imported rice in place of locallygrown foods is due to (i) farmer's better storage and transport qualitiesand greater convenience; and (ii) decline in garden productivity where landshave been diverted to cash cropping. Increasing population is also creatingland pressures in some localities, putting the traditional shifting cultiva-tion systems under severe stress. Malnutrition is widespread, especiallyamongst small children in less developed areas. However there is conflict-ing evidence on the relationship between cash cropping and a change innutritional status. The need to improve nutrition and local food suppliesis therefore a multi-faceted problem requiring major inputs of both researchand extension activities.

1.09 The estate sector has stagnated mainly because of the uncertaintyabout land ownership and land use rights which has kept many expatriateplanters from investing in the sector for much-needed rehabilitation. Otherdifficulties are the lack of managerial and financial expertise in caseswhere plantations have reverted to national management, agricultural wagesthat are high in comparison with competing countries, and an unfavorableworld market situation.

Development Issues, Objectives and Strategy

1.10 Development Issues. The Government is faced with four broadissues in agricultural development:

(a) the adaptation of traditional village structures (including landtenure systems) to the needs of a market economy;

(b) the effective participation and cooperation in the developmentprocess of the many diverse and often antagonistic clan groups;

(c) the steady transfer of plantation lands from expatriate tonational ownership/management without severe adverse effects onproductivity; and

(d) the formation and mobilization of the necessary trained manpowerparticularly in the Government-s agricultural services.

1.11 Development Objectives. The main goals of agricultural developmentin PNG are: in the short run to reduce food imports and to broadenagricultural exports; and in the long run to improve the livelihood of ruralfamilies.

1.12 Development Strategy. In the last decade the Government-sagricultural and rural development efforts have centered around thefollowing principles:

(a) an open economy with emphasis on a strong private sectorsupported by agricultural credit and export crop stabilizationfunds;

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(b) the support of clans and other traditional groups as recognizedlegal entities while acknowledging individual land rights inclan lands as a basis for long-term farm improvements;

(c) the delegation of major development responsibilities to theprovincial level;

(d) financial and management assistance to nationals to enable themto assune responsibility for plantations formerly owned andmanaged by expatriates; and

(e) expansion of specialized agricultural training (AgriculturalColleges and other vocational schools) and improvements in theremuneration and working conditions of agricultural supportstaff.

1.13 Only recently has there been a renewed awareness within theGovernment that agriculture will remain the mainstay of Papua New Guinea'seconomy for many years. This recognition of the importance of agricultureis manifest in a wide area: in the greater flexibility of Government onexpatriate ownership and management of plantations, in the formulation of anational food and nutrition policy recognizing the important role oftraditional agriculture and in the explicit realization that for agricultureto advance on a broad front, an improvement in the Government's agriculturalsupport services is imperative.

The Bank's Role

1.14 Since the country's independence in 1975 the World Bank hassupported agricultural development in PNG through four projects:(a) Popendetta Smallholder Oil Palm Development Project - (LN 1333-PNG ofUS$12 million, effective January 6, 1977), (b) Southern Highlands RuralDevelopment (Cr 841-PNG of US$20 million, effective February 26, 1979)(c) Enga Provincial Development Project (Ln 2125/Cr 1227-PNG of US$6 mil-lion, 2 million, effective September 16, 1982) and (d) Second AgriculturalCredit Project - Cr 1149-PNG of US$15 million, effective May 26, 1982). Thefirst assists in the development of 4 ha oil palm blocks for 1,400 small-holders, together with investments in infrastructure, extension andinspection services and a transport company for the smallholder production.

1.15 The second assists an integrated rural development effort in theSouthern Highlands Province, one of PNG-s least developed areas. The projectincludes infrastructure investments (roads, health and education facilities),cash crop development (coffee, tea, cardamom, silk), health training, adulteducation and extension and an integrated research program in subsistencefood production, nutrition and health. While the infrastructure componentshave been largely completed and already show an impact on the local economy,

the software components experienced delays due to uncertainties in thenational health training policy and recruitment difficulties. However,recent developments suggest that bottlenecks in staffing are being overcomeand that the health staff training component is now moving ahead.

1.16 The third constitutes a time slice of a phased multisectoral ruraldevelopment project. It covers provincial institution building, a varietyof agricultural, forestry and livestock developments, investments ininfrastructure and health, education and community development components.

1.17 The fourth assists the efforts of Papua New Guinea DevelopmentBank (PNGDB) to finance tree crop development and pig and poultry raisingand to strengthen its development and extension efforts for cocoa, coffeeand coconuts. At the time of the last supervision (November 1982) PNGDB hadalready approved almost 1,062 subloan applications totalling US$18 millionequivalent (corresponding roughly to the relevant Schedule I allocation),but disbursements of loans are lagging, due to lack of properly trainedstaff and other organizational constraints.

1.18 The Bank's future support of agricultural development in PNG willmove along two paths, one aiming at rehabilitation and diversification ofthe tree crop sector through loans to Papua New Guinea Development Bank andthrough larger nucleus estate projects to assist smallholders, the other atreplications of rural development projects of the Enga type. The inherentrisks and difficulties are well recognized: adverse world market prospectsfor several of PNG's traditional export crops (coffee, cocoa, copra), theadministrative, legal and technical complexities of a nucleus estate projectin oil palm or rubber, and the lack of experience with the new type ofprovincial development effort as represented by the Enga Project. Bothtypes of projects however would require a strengthening of PNG'sagricultural support services.

II. AGRICULTURAL SUPPORT SERVICES IN PNG /1

General

2.01 Agricultural support services in PNG are provided by a number ofGovernment and nongovernmental agencies, with the largest and most importantcontribution coming from the Department of Primary Industry (DPI). DPI isheaded by a Minister and a Secretary (who is also administratively

/1 This Chapter focuses on those support services that are to be assistedunder the proposed project. A more comprehensive analysis is containedin the 1981 Bank Review (IBRD: Country Sector Report - Papua NewGuinea: Agricultural'Services Review, Washington, D.C., 1981).

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responsible for an Office of Forestry under a separate Minister) andconsists of the following Branches: Planning, Economics and Marketing(PEM); Policy, Review and Coordination (PRC); and Fisheries /1 reportingdirectly to the Secretary; and Management Services; Agriculture; Livestock;and Education and Training reporting through a Deputy Secretary (See Chart).The latest available data on staff of the various Branches is given in Table2.1.

2.02 The main DPI staff categories and corresponding levels ofqualifications are as follows:

(a) Scientific Officer (SO) - 5 grades, recruitment normally /2 fromamong university graduates in agriculture, science or other tech-nical subjects;

(b) Rural Development Officer (RDO) - 5 grades, recruitment normallyfrom among Agricultural College Diploma holders (3 year course)following 10 years of general education;

(c) Rural Development Technicians (RDT) - 6 grades; recruitmentnormally from among Agricultural College Certificate holders(2 year course); and

(d) Rural Development Assistant (RDA) - 3 grades; this category doesnot require any formal qualification and is being phased out.

The composition of DPI staff by level of qualification is given in Table 2.2.

2.03 The devolution of administrative responsibilities to the 19 pro-vinces brought about a reorganization of DPI, with about two thirds of thestaff being transferred to the provinces. The most important functionyielded to the provincial DPI's /3 was agricultural extension, and the greatmajority of provincial agricultural staff serve in this area (Table 2.1).Important functions retained by the central DPI were usually those whereeconomies of scale militated against provincialization (such as agriculturalresearch) or where a national interest was perceived (such as in qualitycontrol for export crops or quarantine services).

/1 For historical reasons, Fisheries constitutes a Division headed by aDirector, whereas the Branches have Assistant Secretaries.

/2 Promotion into this and other categories of staff without this formalqualification is possible after a certain period of service and in-service upgrading training.

/3 The term "provIncial DPI" is used for convenience. The provincial agri-cultural services have adopted various names, such as Division of RuralDevelopment, Division of Primary Industry, etc.

Table 2.1: DISTRIBUTION OF NATIONAL AND PROVINCIALDPI STAFF BY SERVICE, 1981

National ProvincialDPI DPI

Agriculture 406 1,126/aAgricultural education and training 260 -Livestock 216 128Fisheries 163 148Management services 128 180/bPlanning, economics and marketing 96Policy review and coordination 80 -

Total 1,349 1,630

(Forestry) (192) (279)

/a General extension staff.

/b Includes provincial headquarters staff.

Source: DPI Manpower and Training Review, 1982.

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Table 2.2: DEPARTMENT OF PRIMARY INDUSTRY, 1981 STAFF NUMBERS,BY LEVEL OF QUALIFICATION

Designation Provincial National Total

R.D.O. 305 233 538R.D.T. 546 282 828R.D.A. 699 173 872Forester 98 38 136Asst. Forester 173 29 202Artisan & Artisan Asst. 35 76 111Scientific Officer 33 274 307Technical Officer 7 64 71Seaman 4 43 47Marine Eng. Oper. 6 10 16Instructor 1 - 1Drafting Asst. 3 - 3Sr. Comm. D.O. 1 - 1

Total 1,911 1,222 3,133

Note: Clerical and administrative positions are not included.

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2.04 The dismemberment of the old DPI meant a serious weakening of thecountry-s agricultural support services as the central organization wasdrastically reduced without creating an equivalent structure at the provirr-cial level. In a number of cases, provincial agricultural services were toosmall to permit the aggregation of a sufficient body of expertise, and thefiscal basis of the provinces was seldom sufficient to support an adequatedevelopment of its agricultural services. The difficulties stemming fromthe process of administrative devolution were compounded by the simultaneous(and still ongoing) departure of experienced expatriate officers, by a slowdecrease in the quality of general and agricultural education, and by per-sistent staff shortages (at present about 600 positions are filled on anacting basis). As a result, today's DPI (the combined national andprovincial services) is, by common consent, weaker than its unifiedpredecessor.

Crop Research

2.05 While livestock and fisheries research are integrated in therespective Branch/Division to assure a close contact with the other technicalpersonnel in these subsectors, crop research is spread over six sections ofthe Agriculture Branch: Hlorticulture (i.e., foodcrops), Agronomy,Agricultural Chemistry, Land Utilization, Plant Pathology, and Entomology.

2.06 Crop research in PNG is also carried out by other GovernmentDepartments such as Mines and Energy, by Industry Boards for cocoa, coffee andoil palm, by the University of Papua New Guinea, the University ofTechnology and other bodies.

2.07 DPI Research Stations. There are five main stations servingmajor agro-climatic zones and crops, and two smaller stations servingparticular crops as shown below:

(a) Lowland Agricultural Experiment Station (LAES), Keravat, EastNew Britain (Cocoa, coconut, staple foods, spices, and leafyvegetables);

(b) Agricultural Research Station, Bubia, Morobe (Rice, pulses andcoarse grains),

(c) Highland Agricultural Experiment Station, Aiyura, Eastern High-lands (Coffee, staple foods and farming systems);

(d) Kuk Agricultural Research Station, Mt. Hagen, Western Highlands(Tea, staple foods, vegetables);

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(e) Horticultural Research Station, Laloki, Central (Vegetables,staple foods);

(f) High Altitude Experiment Station, Tambul, Western Highlands(Pyrethrum); and

(g) Rubber Center, Bisianumu, Central (Rubber).

2.08 Industry Based Research. New Britain Palm Oil Development,jointly owned by the Government of PNG and Harrison and Crossfield, estab-lished Dami Oil Palm Research Station when oil palm development began in the1960s, and initially Government provided the research scientist in charge.Oil palm research is now solely industry financed from a production levy,except for the salary of one seconded DPI entomologist.

2.09 The Cocoa Industry Board, from a levy of K 20 per ton of cocoaexports, has earmarked K 13 for research and hired a plant breeder and aplant pathologist who use the facilities of the LAES at Keravat. A nearbyplantation at Tavilo has been purchased by the Board and is being developedpartly as an experiment station and partly for production of plantingmaterial for commercial distribution.

2.10 The Coffee Industry Board, from a levy of K 10 per ton on coffeeexports, funds an expatriate coffee specialist and a national agronomist whoare developing research programs. Both are currently based at HighlandAgricultural Experiment Station, Aiyura, but the Board is consideringpossible development of an industry-owned research station along the linesof oil palm research. Government control of industry-based research islimited to representation on the respective Boards of Directors, andparticipation by the Chief Agronomist in research advisory committees foroil palm and coffee.

2.11 University Research. The Faculty of Agriculture of the Univer-sity of P pua New Guinea was established in 1975. Its research programs aremodest an focus on winged bean, taro, erosion control, local foodstuff forlivestock and marketing. Recently steps have been taken to set up a jointcommittee by DPI and the University for coordinating research.

2.12 The University of Technology at Lae has a 17 ha farm for teachingand research. Its Department of Chemical Technology and DPI have jointlyestablished a food storage research unit on campus, but beyond this linkage,there is no formal arrangement for coordinating agricultural research.Within their financial constraints the universities provide usefulcontributions to crop research.

2.13 Past crop research efforts. Major emphasis in early years was ontree crops and great advances were made in the major export crops likecoffee, cocoa, coconut and oil palm. As in most tropical developingcountries with an economy dominated by agriculture, PNG has emphasized

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research on cash crops for export, while tending to neglect the food cropsproduced and consumed locally. However, following independence governmentpolicy has required greater support to be given to food production and toresearch on staple crops and farming system. Rice, the country-s main

agricultural import, has commanded research attention intermittently forover 50 years, but this effort has failed to lead to an increase in produc-tion./l Research on other food crops, especially traditional root crops, ismore recent and has been intensified after recognition of appreciablemalnutrition in some areas of the country. The research program for foodcrops was reinforced after the declaration of the Food and Nutrition Policyfor Papua New Guinea in February 1978./l

2.14 Currently the policy for increasing food production is not veryclear, which has caused difficulties in formulating a well-defined researchprogram. However, the Horticulture Section stresses research on staple foodcrop production and the sweet potato research program has more time allo-

cated to it than any other food crop program. Much of the farming systemsresearch program is also devoted to sweet potato based systems, and severalrural development projects are allocating research resources to understand-

ing and improving sweet potato cultivation.

2.15 There is ample justification for this emphasis in addition to thatof improving the nation's nutrition. Subsistence agriculture forms thelargest sector of agriculture and is based largely on root crops andbananas. By developing a more efficient food crop production system, moreland and especially labor would be available for increasing cash cropproduction. Improvement of traditional staple food production would alsodecrease rice imports and increase self-reliance.

2.16 Financing of Agricultural Research. The estimate for totalexpenditure on crop research in 1981 by Government was about K 3.1 millionwhereas the total levy from the industrial sector for cash crops researchwas about K 0.9 million, although the latter amount was not being fullyutilized. The budget allocation for crop research was about 0.2% of GDP,and 0.8% of the Gross Agricultural Domestic Product. Including the

/1 Previous biases in food crop research are strikingly illustrated by thefollowing numbers: up to 1978, 229 agronomic field trials had beenconducted for rice and 47 for taro, yams and cassava, the respectivenational production figures being less than 1,000 tons and about1 million tons. Similar discrepancies between research efforts for acrop and its economic importance in PNG existed for traditional vs.introduced vegetables and fruits and for sweet potatoes vs. Irishpotatoes. However it is relevant to note that in the same period,80,000 tons of rice (equivalent in food value to 250,000 tons of rootcrops) and large quantities of Irish potatoes were imported. Researchon these crops was motivated by import substitution.

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potential contribution from the private sector, the total effort in PNG foragricultural research would be about 1% of the Gross Agricultural DomesticProject which is modest for a country whose population depends heavily onagriculture. It is well below the 2% level tentatively recomnended in theWorld Bank Sector Policy Paper on Agricultural Research./l

2.17 Staff. Numbers and qualifications of staff occupying researchscientist positions are tabulated below:

Ph.D/ M.Sc. or B.Sc./D.Sc. equivalent B. Agric. Diploma Totals

National staff - - 27 1 28Expatriate staff 8 11 18 4 41

Totals 8 11 45 5 69

2.18 There are numerous vacancies in the research establishment.Currently 60% of the positions of scientific officers, 40% of RDOs, 30%of RDTs and 25% of RDAs are filled. Recent Government cuts in staffceilings have reduced permitted staffing for the Agriculture Branch to only50% of the established positions. DPI is examining the staffing strengthby category to highlight areas of strength and weakness. There is shortfallin the proportion of technical support staff needed in relation to thenumber of research scientists. About 60 field scientists are supported byonly 96 RDOs and RDTs. The research section establishment contains 61 RDO,95 RDT and 170 RDA positions. The number of RDA positions is excessive and,in any case, the policy is to phase out this staff category. A desirablesupport ratio would be I RDO and 1.5 RDT per research scientist, withskilled laborers providing many of the routine services for which RDAs wereused in the past.

2.19 Manpower and Training. A research system needs appropriately andadequately trained manpower with sufficient experience to carry out itsprograms. The average length of research experience in the crop researchservices has declined seriously: in 1973, 58 research staff had an averageresearch experience of 9.4 years; in 1980, 56 research staff averaged only6.4 years. None of the national officers has a post-graduate degree, nor isthere a systematic program for formal training to upgrade their qualifica-tions for research. Today agricultural research personnel need formal

/1 World Bank: Agricultural Research - Sector Policy Paper. Washington,June 1981.

training not only in the basic and applied scientific disciplines but alsoin research and agricultural experimentation methodology. This almostinvariably means formal training at least to the Masters and, in some cases,to the Ph.D. level.

2.20 A second major gap is the lack of suitably trained and experiencedresearch support staff. Hitherto no consistent attempt has been made toprovide and train adequate numbers of support staff who could enhance theproductivity of the research scientists by providing assistance in field andlaboratory work.

2.21 Organization of Crop Research. The Agricultural Branch, consistingof the crop research sections and the agricultural development and quarantinesections is headed by an Assistant Secretary who does not have any researchbackground. The existing structure of several separate disciplinary sectionsof crop research militates against cooperation between colleagues and thedevelopment of interdisciplinary teams.

2.22 The crop research and quarantine sections should be converted intoa Crop Research Division to become the principal generator of newagricultural technology. It is necessary that the Crop Research Divisionbe led by a technical Director of Research who would provide the technicalleadership to the various sections and would present broadly based expertview to policy and planning authorities. Problems in crop research seldomoccur within a single discipline, they more often have facets that require abalanced interdisciplinary outlook. A unified Crop Research Division undera technically qualified Director would provide a guiding overview in identi-fying such problems and their solutions.

2.23 Research Program Planning. The research activities extend fromfarming systems to crop improvement and crop protection and relate to a widerange of disciplines and commodities. The existing manpower situation andorganization of research make it difficult to concentrate critical masses ofmanpower on either the important commodities or systems of production inboth lowland and highland agricultural situations (Table 2.3). It hastherefore been difficult for research to generate and adapt appropriate cropproduction technologies that would have an impact on increasing the produc-tivity of both cash and food crops. In the short run such a complexsituation can only be dealt with by a careful examination of the priority ofthe various research activities and the concentration of available manpowerin Government and private industry on the most important areas while thetraining and expansion of the manpower base takes place.

2.24 ISNAR have made tentative proposals for a reallocation of cropresearch activities which would (i) aim at maintaining a sufficientresearch capability for the most important cash crops (mainly through largerindustry contributions); and (ii) endeavor to strengthen and focus foodcrop research. DPI is at present considering these proposals (Table 2.4).

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Table 2.3: TIME ALLOCATION OF AGRICULTURAL RESEARCH STAFF, BY MAJORRESEARCH GROUPS AND ACTIVITIES, 1981

(man-years)

Agriculture Other researchActivity branch DPI groups Total

Cocoa 5.50 2.50 8.00Coffee 1.50 2.75 4.25Coconut 1.25 - 1.25Oil palm 1.00 5.25 6.25Tea 2.25 - 2.25Rubber 0.25 0.50 0.75Pyrethrum 1.25 - 1.25

Subtotal 13.00 11.00 24.00

Sweet potato 4.67 2.00 6.67Taro (aroids) and yams 0.50 2.00 2.50Vegetables 4.25 0.25 4.50Rice 2.00 - 2.00Pulses 0.50 0.25 0.75Bananas/cassava 0.83 0.83Feed 0.50 0.50Fruit nuts, spices 3.75 - 3.75Sugar 0.25 2.00 2.25Flowers 2.00 - 2.00Farming systems 2.17 4.83 7.00

Subtotal 21.42 11.33 32.75

Storage/p ocessing 2.00 - 2.00Pathology services 3.75 0.25 4.00Entomology services 1.00 - 1.00Soil and plant analysis 5.67 - 5.67Land use services 7.50 3.0 10.50Biometrics 2.00 - 2.00

Subtotal 21.92 3.25 25.17

Extension/liaison 5.00 - 5.00Administration 7.50 7.50

Subtotal 12.50 - 12.50

Total 68.84 25.58 94.42

Source: ISNAR

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Table 2.4: PROPOSED TIME ALLOCATION OF AGRICULTURAL RESEARCH STAPF,BY MAJOR RESEARCH GROUPS AND ACTIVITIES

(man-years)

Crop Research Industry Other ResearchDivision Boards Groups Total

Cocoa 1.50 4.50 0.70 6.70Coffee 1.50 4.50 0.70 6.70Coconut 1.30 1.30Oil Palm 1.50 4.50 2.70 8.70Tea 1.30 1.30Rubber 1.30 0.50 1.80Pyrethrum 1.60 0.60

Subtotal 9.00 13.50 4.60 27.10

Sweet potato 5.40 2.00 7.40Taro (aroids)and yams 3.80 2.00 5.80

Vegetables 2.30 0.25 2.55Rice 1.60 1.60Pulses 1.00 0.25 1,25Bananas/cassava 2.10 2.10Feed 0.40 0.40Fruit/nuts, spices 0.80 0.80Sugar 2.00 2.00Flowers 0.20 0.20Farming systems 5.60 4.83 10.43

Subtotal 23.20 11.33 34.53

Storage/Processing 2.70 2.70Pathology services 0.30 0.25 0.55Entomology services 0.30 0.30Soil and plant analysis 4.00 4.00Land use services 6.50 3.00 9.50Biometrics 2.60 2.60

Subtotal 16.40 3.25 19.65

Extension/liaison 4.10 2.00 (.) 6.10Administration 16.30 2.50 (.) 18.80

Subtotal 20.40 4.50 ( ) 24.90

Total 69.00 18.00 19.18 106.18

Source: ISNAR

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2.25 Research-Extension Linkages. Linkages between the research andextension services are weak. In pre-independence times, research had aplantation bias and extension service a smallholder orientation. This ledto differences in outlook and interest, and the communications gap waswidened by the administrative separation of the two services and the recentdecentralization of extension.

Agricultural Education and Training

2.26 The training of agricultural staff is the responsibility of DPI'sEducation and Training Branch./l It supervises the National FisheriesCollege at Kavieng (New Ireland) and four Agricultural Colleges proper, atPopondetta (Oro), Vudal (East New Britain), Mt. Hagen (Western Highlands)and Maprik (East Sepik). Total staff in 1982 and enrollments andgraduations for the period 1977-81 are given in Table 2.5.

2.27 Recruitment into the Agricultural Colleges comes after 10 years ofgeneral education, and after 2 years of training and a final examination thestudents graduate with a Certificate in agriculture and usually enter DPIservice as RDTs. Following several years of service, the better RDTs can gothrough a one-year upgrading course leading to a Diploma and subsequentpromotion to RDO.

2.28 This system is of recent origin, following the recommendations ofa Government commission in 1975. However, this two-tiered system oftraining has not worked well, mainly because of the deterioration ofstandards in the general education system which required agriculturaltraining at both Certificate and Diploma levels to take on more elements ofgeneral education than had orginally been envisaged. In 1982 DPI decided toreturn to a three-year pre-service Diploma course, starting in January 1983at Vudal, for students with better educational achievement than theCertificate students. This is to be combined with a narrowing and strongerfocussing of Certificate curricula to avoid an overloading with nonessentialyet demanding subjects.

2.29 To bring the bulk of provincial and central DPI staff to anacceptable technical level and to provide them with knowledge and skillswhich they presently do not acquire at the colleges, Government plans toexpand substantially its in-service training and to devote one college (Mt.Hagen) exclusively to that purpose.

/1 Training for the livestock services comes under the responsibility of theLivestock Branch. It takes mostly the form of short introduction andupgrading courses organized at the Branch's training center near Lae.

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Table 2.5: DPI - COLLEGES; ENROLLMENTS/GRADUATIONS, 1977-81; STAFF, 1982

Staff (1982)Expa-

College 1977 1978 1979 1980 1981 National triate Total

VudalYear I - - 100 70 52 15 3 18

Year 2 - - 65 65 64

Year 3 19 19 19 15 19

PopondettaYear 1 109 104 77 73 56 15 5 20Year 2 87 86 88/a 76 52Year 3 - - - - 18

Highlands (Mt. Hagen)Year 1 98 86 81 75 65 13 5 18Year 2 30 62 60 65 68Year 3 - - 16 - -

Sepil (Maprik)Year I - - - 57 58 10 7 17

Year 2 - - - - 44

Fisheries (Kavieng)Year I - 34 28 37 24 5 5 10

Year 2 - - 30 20 26

Total 343 391 564 553 546 58/b 25 83

Note: Year 1 = entrance enrollments, Year 2 = number of graduates (Certifi-cate), Year 3 = number of graduates (Diploma)

/a Refers to enrollments, not graduates.

/b Not including six staff presently on overseas training.

Source: DPI.

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Planning and Economics

2.30 DPI's planning and economic functions are presently undertaken bytwo Branches, Planning, Economics and Marketing (PEMI) and Policy Review andCoordination (PRC). Planning work within PEM has two major orientations,provincial and national. Provincial planning work consists of assisting,advising and training on the Job provincial staff and of ensuringconsistency of provincial and national planning work. This includes amonitoring and evaluation function vis-a-vis provincial agriculturaldevelopment projects.

2.31 National planning efforts aim at the formulation of nationwidedevelopment plans in the field of agriculture, the provision of sectoralinputs into the National Public Expenditure Plan (NPEP), liaison with otherrelevant Government agencies and the monitoring and evaluation of nationalagricultural programs and projects.

2.32 The economics work consists of research into the structure, pro-duction relationships, costs, returns and prospects of specific agriculturalactivities; research on village farming systems; compilation of relevantstatistics and the carrying out of agro-economic surveys.

2.33 The marketing work refers to the administration of the relevantlegislation, the rendering of marketing services to smallholders, and theprovision of marketing intelligence to other branches of DPI as well as out-side bodies.

2.34 Before the advent of decentralization, PEM's work had a strongfield orientation, so that the present scope of work is in many respects acontinuation of well-established activities. So far it has assisted nineprovincial governments in formulating provincial development plans, and itintends to build up its staff to a point where all 19 provinces may besimilarly assisted.

2.35 The performance of the economic and planning services is con-strained, as is the case for all other DPI services, by a shortage of pro-perly trained and experienced personnel, and by specific shortcomings in thefields of sectoral planning, monitoring and evaluation, and farm systemsanalysis.

2.36 A second difficulty concerns the organization of economic andplanning work in two branches, leading to a somewhat artificial separationof planning, policy and economic data collection and analysis functions.Following suggestions by the 1981 Bank Review, Government plans to combinethe marketing functions of PEM and the Agricultural Development Section of

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the Agriculture Branch to form a Development and Marketing Branch, and to

combine all other economic functions in a new Policy Planning andCoordination Branch. Details of the new administrative structure are stillpending.

2.37 The Policy Planning and Coordination branch would also serve asSecretariat for the National Agricultural Council (consisting of the

National DPI Minister as Chairman and his provincial counterparts); theNational Agricultural Advisory Committee (consisting of the lPI Secretaryand the Assistant Secretaries of provincial primary industry departments);and the DPI Policy Group (consisting of the DPI Secretary as Chairman,Deputy Secretary and the branch Assistant Secretaries). So far their workhas been hampered by the absence of an appropriate base of technicalsupport. The designation of the new Branch as Secretariat would ensure thesupport.

Agricultural Extension Support

2.38 The primary responsibility for agricultural extension has beentransferred to the provinces (para. 2.03). However, important assistancefunctions such as linkage with agricultural research, advice to provincialextension services, staff upgrading, information and publication are locatedin the Education and Training Branch of the Central DPI.

2.39 Each provincial extension service is headed by the Provincial RuralDevelopment Officer who is supervising a number of District Rural Develop-ment Officers who in turn are responsible for several Subdistrict RuralDevelopment Officers. The subdistrict is the administrative level wheremost extension staff are located and deployed.

2.40 Depending on farm population densities, quality of communicationsand availability of transport, extension staff work in two modes: (i) oneday visits to villages in the immediate neighborhood of the administrativecenter and (ii) extended field tours (patrols) of up to two weeks coveringseveral isolated villages at a time which requires camping out and a well-planned transport schedule for the extension teams.

2.41 In a narrow quantitative sense PNG's extension service compareswell with those of other countries at a comparable stage of development(Table 2.6). However, the figures have to be read with three provisos inmind: (i) the widely scattered population and the great geographicfragmentation and resulting logistic difficulties; (ii) the lowqualifications of a great portion of the staff, particularly the RDAs; and(iii) the lack of adequate and appropriate extension packages, especiallyfor food crops. Because of different channels of responsibilities theseproblems call for a coordinated effort of provincial and centralgovernments.

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Table 2.6: DISTRIBUTION OF PROVINCIAL DPI EXTENSION STAFF, 1981

Number FF /e JTOof farm /JTO +fami- STO JTO RDA + FF/ RDA/

Province lies /a /b /c /d RDA JTO STO

Fly River 9,898 4 27 37 155 366 16.0Gulf 8,277 5 27 22 176 307 9.4Central 16,136 11 32 54 192 504 7.8Milne Bay 17,363 11 37 53 209 469 8.2Oro 10,133 7 24 36 169 422 8.6Southern Highlands 32,744 9 34 42 431 963 8.4Eastern Highlands 36,128 13 37 32 539 976 5.1Simbu 24,778 10 35 14 506 708 4.9Western Highlands 35,360 11 26 21 752 1,360 4.3Enga 23,156 9 28 26 429 827 6.0Sandaun 15,333 10 34 25 260 451 5.9East Sepik 28,195 9 50 50 285 564 11.1Madang 26,944 10 42 49 329 642 9.1Morobe 3,588 11 48 84 254 698 12.0West New Britain 11,886 5 32 13 264 371 9.0East New Britain 16,495 14 35 23 300 471 4.1New Ireland 8,627 12 39 14 163 221 4.4North Solomons 15,094 10 39 35 204 387 7.4Manus 2,939 5 14 13 109 210 5.4

Total/Averages 343,074 176 640 643 291 853 7.0

/a 1980 Census rural population divided by 7./b STO - Senior Technical Officer (SO 2+, RDO 3+, C12+).7c JTO - Junior Technical Officer (RDT, RDO 1-2, SO1).7d RDA - Rural Development Assistant./e FF - farm families.

Source: DPI Manpower and Training Review, 1982.

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2.42 The Role of Women. In traditional agriculture in Papua New Guineamost cultivation tasks, except for the initial land clearing, are undertakenby women. While this has been known by the Government for a long time, ithas found it very difficult to increase the percentage of female extensionofficers appreciably.

2.43 The reasons for this are numerous but can be reduced to three mainfactors:

(a) in the traditional farm society, economic decisions are madealmost exclusively by men and they are usually the only onesin contact with the world outside the village and its represen-tatives (such as extension agents);

(b) within the service itself there is widespread resistance to alarger role for female officers, although female field workershave been accepted and perform well;

(c) the very limited number of female DPI staff (an estimated 5%of the total number many of whom work in specialized branchesoutside general extension) limits, in the short run, the numberof female extension workers. The Government has set aside anAgricultural College enrollment quota of about 20% (and thenecessary separate boarding facilities) for female students, butonly half of this quota is being used, rural parents beingreluctant to send their daughters to boarding schools. WhileGovernment explicitly recognizes the important role of women inthe country-s agriculture and supports the continuous training andupgrading of female agricultural services staff, it also realizesits limitations in radically changing deep-seated societalbehavior patterns.

Land Utilization Services

2.44 The Land Utilization Section of the Agriculture Branch undertakesinvestigations and cataloguing/mapping of PNG-s physical resources, withemphasis on soils, landforms, climate and vegetation. Its role is that of aservice and development unit, supporting other Departments and provincialgovernments as well as potential investors.

2.45 For many years land utilization work in PNG has received valuableassistance from the Commonwealth Scientific and Industrial ResearchOrganization (CSIRO) of Australia. At the end of World War II this groupwas contracted to undertake a series of regional resource surveys. Thiswork was concluded in 1970 at a total cost of some US$18 million (in 1980

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prices). This was followed by a systematic inventory of existing knowledgeof PNG's natural resources in the 1970s at the cost of another US$2.3 mil-lion. The first phase resulted in 15 publications containing resourcesurveys for about 50% of the country and the second led to four volumes onthe soils, climate, landforms and vegetation of PNG.

2.46 In the late 1970s plans were prepared to extend the naturalresource survey to the entire country. This work was to proceed in threephases: (a) natural resource surveys and inventory, (b) development ofappropriate methods to assess PNG's land use potential and (c) formulationof actual resource assessments. Funding from CSIRO began in 1981, with ascheduled completion date for the first two phases in March 1983. The thirdphase which would be the logical conclusion of more than 30 years of workwill be financed under the proposed project.

Agricultural Project Development

2.47 The Agricultural Development Section of the Agriculture Branch isresponsible for national export crop development projects. It is involvedin the following aspects of project planning and implementation: identifi-cation of suitable areas and crops; physical design; legal preparations;co-financing arrangements and project promotion within the country andabroad; physical implementation, including selection and guidance ofsmallholders through extension; and project monitoring and evaluation.

2.48 So far the Section has prepared five major projects, and sixadditional areas have been identified as suitable for large-scale nucleusestate development (Tables 2.7 and 2.8). In accordance with recommendationsin the 1981 Bank Review, DPI wishes to increase its project planning andimplementation capacity to a level where it could initiate one to two newprojects per year.

Livestock Services

2.49 DlI's Livestock Branch consists of three sections: VeterinaryServices; Veterinary Research; and In-Service Training. A LivestockDevelopment Corporation has been recently incorporated to take over commer-cial activities in livestock development and production, e.g., abattoirs,cattle ranches. The slowdown in the development of PNG's beef cattleindustry and the devolution of Government functions from the center to theprovinces have affected the orientation and effectiveness of the service aswell as a measure of uncertainty about the exact demarcation of national andprovincial responsibilities. Existing legislation may contain conflictingprovisions and DPI plans to employ a consultant to examine these questionsand to suggest any necessary modifications in the relevant laws andregulations.

2.50 Important control and support functions which remain with thecentral DPI are animal disease and pest surveillance and control, laboratoryservices and livestock research. The first two functions, supplementary to

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Table 2.7: EXISTING AGRICULTURAL DEVELOPMENT PROJECTS AS OF JULY 182

Area (ha)Land

Year Small- settle- Stage ofLocation started Type Crop Estate holders ment Total development

Hoskins 1967 Nucleus Oil 3,000 800 6,240 10,040 Fullyestate palm developed

Popondetta 1977 Nucleus Oil 4,200 2,400 3,200 9,800 To beestate palm expanded

Bialla 1977 Nucleus Oil 2,000 2,000 2,000 6,000 To beestate palm completed

Ramu 1979 Estate Sugar 6,000 - - 6,000 Startedproductionin 1982

Cape 1982 Nucleus Rubber 5,000 4,000 - 9,000 Land nego-Rodney estate Cocoa tiation is

complete.Implemen-tation isexpected tostart in 1983

Total 20,200 9,200 11,640 40,840

Source: DPI.

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Table 2.8: PROPOSED AGRICULTURAL DEVELOPMENT PROJECTS, JULY 1982

Area (ha)Smallholder

and/or Status ofLocation Type Crop Estate settlement Total project

Milne Bay Nucleus Oil palm 4,000 2,000 6,000 Preparationestate Cocoa commenced

Galley To be Rubber 6,000 4,000 10,000 To be pre-Reach decided Cocoa pared

Wanigela To be Cocoa - } - 10,000 Soil surveydecided Oil palm } commenced

}New Redevelop- Cocoa - } - 10,000 To be pre-Ireland ment Coconuts } paredProvince } /a

New West To be Cocoa - } - 18,000/b To be pre-Britain decided Oil palm } paredprovince }

}Madang Customary Oil palm - } - 6,000 Feasibility

land and Cocoa studyrehabili-tation

Mamba Plantation Rubber PreparationRedevelop- and other underwayment and cropssmallholders

Total (10,000) (6,000) 60,000

/a Distribution by mode of holding not yet known.

/b Three blocs of 6,000 ha.

Source: DPI.

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one another, are gaining in importance as PNG, traditionally free from anumber of serious animal diseases is increasingly at risk because of thegrowing volume of international travel and large-scale development projectsin the border areas. Livestock research is focussing on problems of poorgrowth performance and low fertility of ruminants which are thought to havetheir origin in nutritional deficiencies.

Quarantine Services

2.51 Of the agricultural support services in PNG, the least appreciatedin terms of its national importance is the quarantine inspectorate. Itsstatus within the Government service can be gleaned from its drastic under-staffing and underfunding and from the fact that it does not even have aproper career structure. Yet the potential damage arising out of short-comings of this service is obviously much larger than for any of the otherservices.

2.52 The Quarantine Section forms part of the Agriculture Branch, butcan also draw support from the two Branches it is serving, Agriculture andLivestock. The main quarantine facilities are located near Port Moresby,with an additional animal station outside Lae. Ten small animal quarantinestations throughout the country are mainly concerned with internal livestockmovements and lack any specialized equipment.

2.53 Quarantine inspectors are graduates of the two-year Certificatecourse of the Agricultural Colleges. Apart from a two weeks pre-servicecourse for animal quarantine personnel at Lae, qualifications, renumerationand career prospects are undistinguishable from the other RDOs/RDTs./I Arecent conference of senior quarantine staff decided to introduce in 1983special quarantine in-service courses covering both animal and plantquarantine aspects.

2.54 With its present staff and facilities, the inspectorate is unableto carry out its responsibilities. Only some of the country-s 12 shippingports and 3 international airports are staffed and equipped to undertakequarantine work. Government plans to establish new facilities in fourlocations while strengthening staff and facilities at five existing stationsto cope with the most urgent quarantine needs.

Plantation Management Training

2.55 There is a considerable demand for training of managers of smallor medium-sized agricultural enterprises. The return to national ownership

/1 However, the Livestock Branch runs in-service courses for its staffwhich cover aspects of animal disease recognition and control includingquarantine.

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and management of many plantations has revealed a serious shortage ofnational expertise, in all aspects of technical, commercial and financialoperation. The Plantation Management Training Program (PMTP) has beenestablished to meet this demand. It includes training facilities at Laloki(near Port Moresby), Rabaul (East New Britain), and Mt. Hagen (WesternHighlands). Formerly under the supervision of the Department of Commercewhich has been recently abolished, it is now under the Department ofPrimary Industry.

2.56 In the seven years of its existence, the Program has trained about1,100 persons (Table 2.9) through four types of courses: Operational SkillsCourses, Management Skills Courses, Mini-Management Development Courses(short-term modular) and Director/Board Member Training Courses. Animportant part of the training is on-the-job follow-up work. Entry require-ments, course content and duration and fees (to be paid by the sponsoringenterprise) vary with the type of course. Usually previous relevantexperience and sponsoring by a company or business group is required. Onrequest, custom-made courses are also undertaken at a customers seat ofbusiness.

2.57 In the coming years, considerable estate development/rehabilitationis expected in the southern part of Central Province, Milne Bay Province andpossibly Oro Province. Ir, anticipation of the resulting demand for planta-tion management expertise, PMTP is planning to start a training center atMilne Bay.

III. THE PROJECT

Project Formrulation

3.01 The proposed project is the result of Government's realizationthat agriculture 4int PNG will remain a key sector for many years to come andthat a revitalization of this sector reou4,es a strengthening of its supportservices. This argument has been m-ade in agricultural sector reviewsundertaken by FAO,/l International Fund for Agricultural Development (IFAD)/2 and the Bank./3

XI FAO/CP: Draft Report of the Papua New Guinea Agricultural ReconnaissanceMission, Rome, July 19780

/2 IFAD: Report of the Special Programming Mission to Papua New Guinea,Rome, Septemxber 1980.

/3 IBRD: Country Sector Report - Papua New Guinea: Agricultural ServicesReview, Washington, DC, 1981.

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PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Table 2.9: PMTP TRAINING ACTIVITIES 1976-82:NUMBER OF PARTICIPANTS

YearType of Course 1976 1977 1978 1979 1980 1981 1982 Totals

Operational Skills CourseCocoa/Coconuts 19 18 20 - 13 22 - 92Coffee - - - 15 - - 23 38

Management Skills Course - 6 13 16 15 17 40 107

Mini-ManagementDevelopment CoursesCoffee Records - - - - 9 16 - 25Coffee Growing - - - - - 9 - 9

Director Training - 12 144 24 98 54 124 456

Cocoa Fermentary OperatorsCourse - 204 - - 62 - - 266

Plantation AppreciationCourse - - - - - 17 21 38

Other Courses /a - - - - - - - 45

Totals 19 204 177 55 197 135 208 1076

Source: PMTP

/a Years not recorded.

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To meet the identif.ied needs, the Bank recommended and assisted in the devel-opment of an Agri ̂ ultural Support Service-s Project withl the major componentsirn agricultural research, education ard training, extension support, economicsand planning, agricultural project development and regulatory services.

3.02 The project is essentialV a "software project" w'hich would leadto significant staff ircreases in DPI (136 national and 24 expatriatestaff) and about US$3.0 -million, an 183'% ncrease to DPI's annual recurrentbudget. The additional staff represents about 10% of the National DPIstaff and 5% of the total DPI staff at the national and provincial levels.The project would have a long gestation period anrd many of its expectedbenefits would be either of a general (suatcr h as the increase in thecompetence and efficiency or DPIF staf or gwould come in the form of avoidedlosses the likelihood and extent of wThfch are difficult to assess. Never-theless the proposed proj4ect is justif-ied on the following grounds:

fa) Over the last decade PNG's agriculture sector and related supportservices have suffered from. comparative neglect. and the devolu-tion of some agricultural services to the erovinces and thedeparture of many qualified and experienced expatriate staff haveworsened the situation. Onl-' -.ecently has agriculture beenrecognized as tce key sector for che country-s long-termaevelopment. The proposed project would improve the institutionalbasis for this new emphasis.

(b) The long gestation period for projects that focus on institutionaland manpower development require corrective action as early aspossible. As the country continues to lose long-serving expa-triate personnel, any further delays in replacing these personneland strengthening DPI would only multiply future difficulties.

(c) Without staff upgrading and assistance from the center, most pro-vincial agricultural services seen unable to carry out effectivelythe functions transferred to themn. With its present manpower andbudget allotments, DPI can only give very limited help, and delaysin stepping up assistance to the provinces would result in aserious decline of administrative and technical standards whichwould unavoidably affect development.

(d) The proposed project wouk 5 bring about u-rgently needed andoverdue institutional and organrzational chan-ges within DPI.

Project Description

3.03 The project w'o0uld encc-,pass expenditures for civil works; equip-ment, furniture and vehicwes. salaries oF expatriate and national staff;travel and subsistence expertses; other operaLional expenses such asmaterials and supplies, utilities and rental and operation of vehicles;consultancies; and fellowships. It wouLld consist of the followingcomponents: (a) Crop research; (b) agricultural education and training;

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(c) planning and economics; (d) agricultural extension support; (e) landutilization services; (f) agricultural project development; (g) livestockservices; (h) quarantine services; (i) plantation management training;(j) transit staff housing; (k) monitoring and evaluation; (1) fellowships;and (m) consultancies.

Project Components

Crop Research (US$4.8 million) /1

3.04 The component would have four distinct elements: the creation ofa Crop Research Division; the improvement of central research support(laboratory services); the strengthening of DPI's research and experimentstations; and a post-graduate training program for national scientificofficers to staff the research organization.

3.05 Crop Research Division. The establishment of a separate CropResearch Division would consolidate activities now undertaken by sixsections within the Agriculture Branch provide all crop research with asuperstructure and expedite implementation of the other subcomponents. Thenew Division would be headed by a Research Director(E) /2 with the rank ofAssistant Secretary, aided by a Deputy Director and an Executive Officer (E)with administrative responsibilities. The duty statement of the ResearchDirector should include and give priority to the formulation of a comprehen-sive crop research program over a medium- and long-term horizon, the publi-cation by March 31, 1984 of two summary reports covering crop researchactivities during the periods 1973-77 and 1978-82 respectively, and thepreparation by June 30 of each year (starting in 1984) of an Annual CropResearch report for the previous calendar year. An administrative cellheaded by a senior administrative officer (CC 9) and comprising two clerksand one secretary would provide the administrative support structure andfree the Research Director and his associates for work on research policiesand programs. Except for the positions of Deputy Director and head of theadministrative cell (CC 9), these posts would be incremental./3 Apart fromthe salaries for the above staff, the proposed project would finance officefurniture and equipment, travel and subsistence and other operationalexpenses.

/1 Unless otherwise indicated, the cost figures in this Chapter refer tobase cost in March 1983 prices, the date of negotiations. Annex 1,Table 1 contains a summary of project costs; further details of costingare given in the Working Papers.

/2 (E) denotes an expatriate officer.

/3 A roster of new positions to be created under the project, disaggregatedby project component, level of qualification and nationality, is givenin Annex 1, Table 2.

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3.06 Central Research Support. This subcomponent would assure anadequate back-up of field work in the areas of: analysis; data processingand storage; statistical analysis; identification of insect pests anddiseases; and expertise in post-harvest handling of perishable foods and infood processing. It would comprise the following incremental positions:three scientific officers (E), seven technical officers grade 1, oneclerical and one secretarial staff. An urgently needed insect store isproposed to accommodate the Department's virtually irreplacable collectionof insect pests and plant diseases material. It is presently housed intimber-frame buildings threatened both by fire and termites. Other itemsare office furniture and equipment, laboratory and field equipment, traveland subsistence, and other operational expenses.

3.07 Research and Experiment Stations. The subcomponent would supportthe concentration of research programs and available staff on the mostimportant cash crops and food systems (cocoa/coconut, coffee/tea, lowlandfood crops, highland food crops). Two additional scientific officers (E)would be hired to develop programs concerning food crops.

3.08 More importantly, the project would include additional supportstaff (at RDO and RDT levels) to achieve a desirable support staff/scientistratio of 2.5 to 1 (instead of the present ratio of 1.6 to 1), thus freeingthe scientists from many low-level routine jobs and permitting them to focuson their proper functions. The total number of support positions to becreated would be 13 RDO and 13 RDT. Further items under this subcomponentwould be staff housing for the additional personnel and for officers beingtransferred to new positions, the upgrading of offices and laboratories,related furniture and equipment (laboratory and field), travel and subsis-tence and other operational expenses.

3.09 Government has investigated the suitability of different stationsand has selected following stations for the location of specific cropresearch:

Cocoa and Coconut Research - Keravat and/or TaviloCoffee and Tea Research - Kuk

Highland Food Crop Research - Aiyura

Rhinoceros Beetle remains a problem for coconut cultivation at Keravat andTavilo but recent research indicates that the damage can be kept to atolerable level. The earlier concern expressed about the suitability ofKuk soils for coffee research does not appear to be justified.

3.10 The location of lowland food crop research has not yet beenfinally decided. There is no scope for acquiring further land or reclaimingthe swamp at Bubia. DPI is therefore exploring the possibility of sharingthe facilities for research with the University of Technology, Lae if theFaculty of Agriculture of the University of Papua New Guinea, Port Moresbyis relocated there, failing which the research has to be located at Keravat

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or Laloki. Government would inform the Bank by December 31, 1983 of thestatus of the proposed arrangement with the University of Technology.

3.11 The desirability of sharing the research efforts on cash cropsbetween DPI and the private sector has been emphasized by the ISNAR Reportand accepted in principle. DPI is presently engaged in discussions with theCoffee and Cocoa Industry Boards on several alternative proposals to developjoint work programs which would specify the directions of research andinputs of personnel, land, facilities and equipment and would also addressquestions of finance, organization and management. Government will continueto discuss further developments with the Bank in the process of reaching afinal decision.

3.12 Research Scientist Training. The project would provide for post-graduate training to permit an eventual staffing by national officers ofPNG-s crop research service. This program would be the beginning oflong-term staff development and would include 21 scientific officers alreadyemployed by DPI. An Officer-in-charge of Research Training (E) would beresponsible for selection of candidates and suitable places for them toundertake studies and would later on also address other aspects of researchstaff development, such as in-service training for support staff.

3.13 Apart from this officer, the project would provide for therecruitment of seven new national graduates to carry on the work of theofficers seconded for training. Since the present annual output of univer-sity graduates in agriculture is 15-20, this should not pose any problemson the supply side. The subcomponent would also include a amall amount foroffice furniture, travel and subsistence and other operational expenses.The fellowship program proper is dealt with in a separate section below(paras. 3.42-3.44).

Agricultural Education and Training (US$2.4 million)

3.14 This component encompasses pre-service education at Certificateand Diploma levels and in-service training of central and provincial DPIstaff as a follow-up of the first Bank-assisted Education Project(Cr. 661-PNG). The pre-service portion is comparatively small and aims atminor improvements of the existing Colleges. It includes the conversion ofa dormitory into a laboratory at Popondetta, scientific equipment, officeequipment, teaching aids and library subscriptions for Vudal, Sepik andPopondetta, three additional staff (one curriculum officer, one educationofficer and one secretary) and related travel and subsistence expenses.

3.15 The bulk of assistance to this component would refer to in-service training. Government plans to convert the Highlands AgriculturalCollege at Mt. Hagen (Western Highlands) to an in-service training facility.This would include the construction of some new and upgrading of existingfacilities, vehicles, furniture, library subscription and other operational

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expenses. Incremental staff financed under the project would consist of twoEducation Oficers at So 4 level (E) supported by 3 technical (RDO/RDT) and 2clerical (CC) staff. Travel and subsistence costs of the technical staffand of trainees would also be met. Candidates for training would beselected on the basis of their performance in the field for a few years.

3.16 While the general scope and content of the various trainingactivities (Certificate and Diploma courses; in-service training) is alreadyknown, specifics of the respective curricula and trainee numbers are stillbeing finalized.

3.17 DPI's original proposal for in-service training included technicalas well as management training. It was felt that a number of the envisagedgeneral management courses could be carried out by the AdministrativeCollege which has a long experience in conducting this type of training.However, it seems doubtful whether they would be able to accommodate thenumber of additional trainees, given their present staff constraints./l

3.18 DPI has examineed jointly with the Administrative College thestaff implication of delegating part of the in-service training program tothe latter. Necessary staff increases would be sought for the AdministrativeCollege under the 1984 NIPEP. If funding under the NPEP is not forthcomingfor the additional staff, a modified program will be discussed and agreedwith the Bank.

Planning and Economics (US$2.4 million)

3.19 The project would assist the Planning, Economics and StatisticalSections of PEM. The Planning Section staff would be upgraded and streng-thened to enable it to help provincial planning efforts and other parts ofthe national DPI. Two additional expatriate scientific officers would besupported by four technician level (RDO) staff. About half of the addi-tional staff would assist with the coordination and monitoring of sectoralplanning, while the others would strengthen the Section's provincialplanning support to enable it to address over a 2-3 year period the initialplanning needs of the ten provinces which have not yet received central DPIassistance for their planning work, and thereafter to repeat the planningexercise - with widening scope and increasing depth for all provinces in afive-year cycle. The project would also provide for office equipment andfurniture, travel and subsistence and other operational expenses.

/1 DPI's in-service training plans call for an intake of 300 technicaltrainees in year 2, increasing to almost 500 in year 5; and for a startof management training with 68 trainees in year 3, rising to 109 inyear 5.

3.20 The Economic Section would be strengthened to enable it to carryout production and marketing research and industry evaluation for policyformulation and planning purposes. Four graduate economists (E) and threenational officers would be recruited, two to work on farm systems research,the other to address questions of production and marketing for major cashand food crops. These economists would form part of the multidisciplinarytechnology validation and introduction teams which are a central feature ofthe envisaged research/ extension linkage.

3.21 The Statistical Section would be expanded by four clericalpositions. The coverage of non-staff expenses would be similar to that forthe other Sections, with an additional allowance for the hire and operationof two vehicles.

Agricultural Extension Support (US$1.8 million)

3.22 The proposed project would strengthen the four Units (ExtensionAdvisory, Publications, Radio Broadcast and Libraries) constituting theInformation Section of DPI's Education and Training Branch by assigningthree Scientific Officers, two technicians (RDO) and one secretary to thefirst Unit; four officers would be located in each of the country's majorregions, and two of the RDO's would be recruited as trainees.

3.23 The Publications Unit would be increased by two ScientificOfficers (E), namely a scientific editor and an information/communicationsspecialist, one more Scientific Officer and two RDOs who would work astrainees with the expatriate specialists. The existing printshop personnelwould be increased by seven staff including an illustrator and a photographer.Two clerical and secretarial staff would also be added to the Unit. The RadioBroadcast Unit would add a technical officer to assist in the preparation ofextension-oriented radio broadcasts. Also included would be equipment for theExtension Advisory, Publications and Libraries Units, as well as books andjournals for the latter, travel and subsistence costs for the ExtensionAdvisory and Publications Units and other operating expenses.

3.24 The proposed project would provide extension advisory services toprovinces and aim at creating institutional linkages between agriculturalresearch and extension through establishment of a more widespread networkof testing stations on farmer's field in close collaboration and consulta-tion between research staff and provincial extension staff. The successwould to a large measure depend on the active cooperation of the provincialDPIs. While individual perceptions of the respective roles of central andprovincial agricultural services and of possible forms of assistance andcooperation obviously differ widely, the general reaction of provincialgovernments is favorable.

3.25 In view of manpower and budget constraints and because of variousdegrees of acceptance and of absorptive capacity, the establishment oftesting stations would be geared for an initial assistance, over its four-and-a-half-year implementation period, to four to six provinces. This would

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give the DPI teams an opportunity to modify and improve their approach andwould also permit a demonstration effect to develop which in time wouldconvince the other provinces of the advantages of availing themselves ofthis service.

Land Utilization Services (US$1.4 million)

3.26 This component would include assistance for three activities: soilerosion studies; a land capability survey of alienated land; and a landevaluation for subsistence and cash cropping. The first would determinesoil losses and run-off in six provinces to help develop a suit able packageof soil conservation measures under various agro-ecological conditions. Thesubcomponent would include hiring of one additional SO 1 and one RDO 1,equipment, travel and subsistence and other operating expenses.

3.27 The land capability survey for alienated land would cover 200,000ha of unused privately or Government-held lands. It would evaluate theland-s development potential as a basis for subsequent programs to developor rehabilitate it. The subcomponent would require hiring of two expatriateand two national Scientific Officers and of fourteen technician level supportstaff. It would also include office furniture and equipment, scientificequipment, travel and subsistence and other operating expenses.

3.28 The land evaluation for subsistence and cash cropping wouldconstitute the last phase of CSIRO's work in Papua New Guinea, itsend-product being an overall resource inventory and assessment of landpotential (para. 2.46). In addition to the funding of the consultancy forCSIRO, the subcomponent would provide two additional RDOs and funds fortravel and subsistence and other operating expenses.

Agricultural Project Development (US$1.1 million)

3.29 Under the proposed project, the Agricultural Development Sectionwould be strengthened by the addition of five Scientific Officers (three E)two clerical officers and one secretary and supplemented by funds for officeequipment and furniture; travel and subsistence; and vehicle rental. Thiswould enable the Section to step up its activities to a level of 1-2 pro-jects per year. In order to meet peak manpower demands and to providespecific technical expertise not available in the Section, an amount ofK 190,000 (about US$270,000) has been added for consultancies; this wouldcorrespond to an input of approximately 32 m/m.

3.30 The original project proposal contained an Alienated Land UseSurvey to be undertaken by the Department of Lands. This proposal was notsufficiently developed at appraisal time and could not be considered forinclusion in the proposed project. Ilowever, since the Department providesan important input into the work of the Agricultural Development Section,through land survey, lease processing, and inspection, it has been recom-mended to Government that the Department of Lands should make an assessment

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of the additional staff requirement for funding under the 1984 NTPEP. Atnegotiations Government informed that the Department of Lands is in theprocess of preparing an 1984 NPEP submission for these additional posts.

Livestock Services (US$0.9 million)

3.31 The proposed component would strengthen the animal disease andpest surveillance program throughout the country; provide funds for essen-tial facilities and equipment at the central veterinary laboratory andsupport a survey of the mineral status of ruminants.

3.32 The disease and pest surveillance program would be increased bynine gazetted stock inspectors (RDO 3), three of them to be posted along theland border with Indonesia, the other six in provinces with significantlivestock development (Morobe, Oro, Eastern Highlands, Western Highlands,East New Britain, North Solomons). They would be provided with transport(seven 4WD pick-up trucks and two boats). Because of their beinIg postedoutside urban centers, these officers would also require housing, and theywould be provided with camping gear and basic equipment.

3.33 In order to ensure that this important support becomes the unequi-vocal responsibility of the national DPI, it appears that some changes inthe relevant legislation will have to be made so that the existing stockinspectors could be degazetted and new ones regazetted as national DPIstaff. DPI hired a consultant to examine the legal aspects of the existingquarantine and animal disease legislation and to develop recommendations forits clarification and simplification but the consultant failed to produce areport. The Government will, therefore, request the New Zealand Governmentto carry out the study.

3.34 The Central Veterinary Laboratory would be improved to achieve ahigh level of work security. This would include construction of a fireproofstore for toxic materials and dangerous chemicals and of five special kennelsfor animals suspected of rabies. Additional funds would be made availablefor equipment and stand-by generators. The staff would be strengthenedthrough recruitment of an expatriate veterinary officer, a pathologist withexpertise in poultry. Support to the survey of the nutritional status ofruminants would be limited to minor purchases of supplies (specimen samplebottles), the costs of travel and subsistence and of laboratory analyses ofspecimens.

Quarantine Services (US$0.7 million)

3.35 The proposed project would build up the quarantine inspectorate toa level where it could cope with the greatly expanded workload derivingfrom PNG's increased contacts with foreign countries. Twelve additionalquarantine inspectors would be hired , to be stationed in six existingquarantine centers and four new ones. The administrative staff in PortMoresby would be strengthened by one secretary (KBO 2). Other items to be

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included in this component would be essential quarantine equipment, includ-ing three fumigation chambers, office furniture and equipment, travel andsubsistence, vehicles (two motorcycles and five 4WD pick-up trucks), andother operational expenses.

3.36 At present PNG quarantine certificates are not recognized byAustralia which means reexamination in Australian ports of PNG exports whichadds appreciably to their costs. DPI plans to upgrade its inspection stand-ards to a point where reexamination would not be necessary and to establishcontainer export ports for the main export crops. This would, however,require a previous review and overhaul of all aspects of the quarantineservice, including procedures and legislation. The New Zealand Governmentexamining the country s quarantine and animal disease legislation (para.3.33) would also address questions of improvements in quarantine standards.

Because of the importance of this service for PNG's agriculture, anassurance has been obtained that the Government would inform the Bank byJuly 31, 1983 of the findings and of relevant follow-up action.

Plantation Management Training (US$0.4 million)

3.37 The assistance under the proposed project is limited to theupgrading of a classroom and a dormitory at the planned new trainingfacility at Milne Bay, the purchase of three 4 WD vehicles, of furniture andequipment, plus other operational expenses.

3.38 While the staff expansion to be financed under the 1983 NPEP wouldbe sufficient to start training at the new center, another three staff posi-tions would be needed to carry out the full training program as envisaged byPMTP. At negotiations Government agreed to seek 1984 NPEP funding for thesepositions.

Transit Staff Housing (US$0.1 million)

3.39 The availability of staff housing in Port Moresby has declinedsharply as a result of Government's recent move to sell its stock of housing(usually to the present occupants) and to cease the policy of guaranteedhousing for national staff moving to Port Moresby. In order to facilitatethe transfer of national officers to project components located in thecapital and thus to assure timely implementation of these components and theultimate success of the project, the construction is proposed on DPI land,of three low-cost transit housing units.

Monitoring and Evaluation (US$0.2 million)

3.40 The Planning Section within the Planning, Economic and MarketingBranch of DPI would be responsible for the continuous monitoring of projectimplementation; the necessary staff would be available for this task.Following normal procedures for NPEP projects, these officers would also

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prepare quarterly progress reports for review by National Planning Office

(NPO) and the Department of Finance. In addition, the proposed projectwould provide funds for three evaluation exercises by external consultantsat the start, near midpoint and towards the end of project implementation.

An initial baseline survey would be conducted.

3.41 An important element of the initial baseline survey for cropresearch would be two summary reports covering crop research activitiesduring the periods 1973-77 and 1978-82 respectively. The absence of such anaccount has been a serious drawback for formulating a comprehensive cropresearch program, given recent staff turnover and the dispersal of individ-ual research results over the country. The availability of such concisesource reference books would be an invaluable aid for crop researchersstarting their DPI career or entering a new assignment. The preparation ofthese reports will be one of the primary responsibilities of the ResearchDirector.

Fellowships (US$1.4 million)

3.42 In addition to the post-graduate training in crop researchmentioned in the relevant section above, the proposed project would providefor training at various levels and for durations ranging from short-termcourses to one year of formal education in support of the following projectcomponents:

(a) Crop Research: 21 staff for a total of 648 months of training;

(b) Agricultural Education and Training: 16 staff for 192 months;

(c) Agricultural Extension Support: 8 Staff for 46 months;

(d) Agricultural Project Development: 4 staff for 30 months; and

(e) Quarantine Services: 9 staff for 27 months.

Total: 58 staff for 943 months.

3.43 This training component would upgrade DPI staff in specific areaswhere training is not available locally. It would increase the competenceand efficiency of their respective services and facilitate the eventualnational staffing of positions presently held by expatriate officers.

3.44 UNDP indicated that about US$500,000 may be available for fellow-ships under the proposed project in its 1983-86 Country Program for PNG. Atnegotiation Government informed the Bank that the UNDP fund would not beavailable for this purpose. The Bank will therefore finance the totalamount required for fellowships.

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Consultancies (US$1.2 million)

3.45 Under the proposed project, 69 man-months of expatriate technicalassistance would be provided to DPI for the following components:

(a) Policy and Planning (6 man-months) to assist in the developmentof data system and the coordination of national and provincialplanning;

(b) Agricultural Project Development (32 man-months) to helpidentify and prepare agricultural projects;

(c) In-Service Training (4 man-months) to assist in thedevelopment of training materials for in-service trainingcourses and in the delivery of short-term courses;

(d) Unspecified (27 man-months).

(e) CSIRO program: US$0.7 million

3.46 The consultancies, most of them short-term assignments,/l havebeen costed at K 5,850 (about US$8,200)/month (Annex 1, Table 3). Thisfigure would cover salaries and travel to/from the duty station. At thetime of project appraisal billing rates for experienced consultants averagedabout US$4,300 depending on such factors as nationality, area ofspecialization, age.

Implementation Schedule

3.47 The project would be implemented from mid-1983 to the end of 1987.An implementation schedule is given in Table 3.1. In the second semester of1983, eight staff will be recruited and hired including the ResearchDirector, Officer-in-Charge of Research Training, Land Development Officer,Information and Communications Specialist and four Quarantine Officers.About seven staff will be selected to go on the long-term fellowship program(12-30 months). Recruitment of expatriate staff will extend up to 1985(15 in 1984 and 5 in 1985) while additional national officers will berecruited up to 1987 (68 in 1984, 37 in 1985, 13 in 1986, 14 in 1987). Mostof the civil works, e.g. insect store, transit staff houses, covenant

/1 For longer-term assignments Government usually prefers the mode of con-tract employment in the public service for a standard period of threeyears. This arrangement has the advantages of a more economical basicrate (about US$3,480 equivalent per month for officers at the top of thescale and with maximum gratuity for long service), of lower overheadsand of better administrative control.

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Table 3.1: PROPOSED IMPLEMENTATION SCHEDULE - FOUR AND A HALFYEAR PROJECT PERIOD, JULY 1983 - DECEMBER 1987

2nd Semester1983 1984 1985 1986 1987

Recruitment and Hiringof Staff (No. of staff)Expatriate 4 15 5 - -National 4 68 37 13 14

Civil Works (No. of units)Cropping Research

Insect Store - 1 -High Covenant Houses - 3 3 1

Medium Covenant Houses - - - 6Low Covenant liouses - 8 15 15

Agriculture Education andTraining

Conversion of Dormitory toLaboratory - 1 - -

Dormitory - 1 - -

Ablution Block - 1 - -

Upgrading Existing Dormitory - 1 - -

Office - 1 - -

Livestock ServicesCentral Veterinary Lab - 1 - -

Low Covenant Housesfor Annual Diseases - - - -

Surveillance - 3 4 2

Transit Staff Housing - 3 - -

Consultancies (man-month) - 40 60 55(including CSIRO program)

Fellowships (No. of fellows)Short Term Courses (3-8 mths) - 10 11 -

Long Term Courses (12-30 mths 7 15 15

Crop Research ReportsSummary Reports on Crop ResearchActivities for periods 1973-77and 1978-82 March 31

Annual Report June 30 June 30 June 30 June 30

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houses, dormitory and laboratory will be undertaken in 1984 and 1985.Consultants will be engaged starting in 1984 for policy and planning,agricultural project development and in-service training. About 51 fellow-ships will be granted in 1984 and 1985 for short term and long term courses.

IV. PROJECT COST AND FINANCING

Project Cost

4.01 Total project cost over the four and a half years of projectimplementation amount to US$24.3 million of which US$14.0 million (58%) isthe foreign exchange component. Base cost estimates are expressed in March1983 prices and includes about US$1.1 million in taxes and duties. Unitprices for housing, subsistence and car rental follow the relevantGovernment standards; for staff salaries the DPI salary scales were used.Consultant service costs are based on recent cost quotations of the NationalPlanning Office.

4.02 Physical contingencies of 10% were applied for all items exceptstaff salaries and consultancies. The cost estimates also include allow-ances for annual price escalation during implementation based on: 6% for1983, 7.5% for 1984, 7% for 1985, and 6% for 1986 and 1987 for local andforeign costs alike. They total 21% of base costs plus physical contin-gencies. Project costs by components are summarized in Table 4.1.

Financing (excluding front-end fee)

4.03 The Bank would finance US$14.0 million of the total project costs,equivalent to the foreign exchange component of 58%. The Government wouldfinance US$10.3 million (42%).

Procurement

4.04 Because of their overall small size (not likely to exceedUS$200,000 equivalent for any given location and year) and spread overseveral provinces, project components and years, civil works are unlikely toattract foreign bidders and would be carried out following local competitivebidding in line with national bidding procedures which have been foundsatisfactory. In some isolated locations where suitable contractors wouldbe unavailable construction under force account by the Department of Worksand Supply would be acceptable.

4.05 Purchases of vehicles, furniture and equipment totallingUS$1.3 million would be similarly fragmented and rather small, with only 20equipment items (totalling less than US$300,000) having unit costs in excessof US$5,000 and no single contract expected to reach US$100,000 equivalent.

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Table 4.1: PROJECT COST SUMMARY /a

F.E.Local Foreign Total Local Foreign Total Costs-- (K Million) --- -- (US$ Million) -- (%)

Crop Research 1.8 1.8 3.7 2.4 2.4 4.8 50Agricultural Education

and Training 1.1 0.9 1.9 1.3 1.1 2.4 47

Planning and Economics 0.7 1.1 1.8 0.9 1.5 2.4 63Agricultural Extension

Support 0.7 0.6 1.4 1.0 0.8 1.8 47

Land Utilization Services 0.6 0.5 1.1 0.8 0.6 1.4 44Agricultural Project

Development 0.4 0.5 0.8 0.5 0.6 1.1 56

Livestock Services 0.4 0.4 0.7 0.5 0.5 0.9 57Quarantine Services 0.4 0.1 0.5 0.5 0.2 0.7 22Plantation Management

and Training 0.2 0.1 0.3 0.2 0.2 0.4 48Transit Staff Housing 0.1 - 0.1 0.1 0.1 0.1 40Monitoring and Evaluation 0.1 0.1 0.2 0.1 0.1 0.2 50Fellowships - 1.1 1.1 - 1.4 1.4 100Consultancies - 0.9 0.9 - 1.2 1.2 100

Base Cost 6.4 8.1 14.5 8.2 10.6 18.8 56

Physical contingencies 0.3 0.7 1.0 0.4 0.9 1.3 69Price contingencies 1.3 1.9 3.2 1.7 2.5 4.2 60

Total Project Cost 7.9 10.8 18.7 10.3 14.0 24.3 58

Front-End Fee on Bank loan - 0.1 0.1 - 0.1 0.1 -

Total financingrequired /b 7.9 10.9 18.8 10.3 14.1 24.4

/a Identifiable taxes and duties are about K 0.9 million (US$1.1 millionequivalent) and the total project cost net of taxes is K 17.5 million(US$22.8 million equivalent).

/b Bank loan assumed at US$14.0. Actual front end fee is US$35,162.

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In addition, a sufficient number of foreign suppliers are represented in PNGto assure a degree of competition and satisfactory maintenance and repairservices. For these reasons, the application of local competitive biddingprocedures or for small items where government regulations permit prudentshopping would be justified.

4.06 Civil works and furniture contracts in excess of US$100,000 andUS$50,000 equivalent, respectively, expected to cover about 55% and 60% res-pectively of purchases in the two categories, would be subject to Bankreview of bidding documents prior to bidding and of winning bids prior toaward.

4.07 Except for the special case of the CSIRO contract, consultantservices in the amount of US$0.7 million would be contracted in accordancewith the Bank's Guidelines for the Use of Consultants.

Disbursement

4.08 Disbursements from the proposed loan would cover:

(a) 60% of total expenditures for civil works,,

(b) 100% of foreign and 80% of local expenditures for equipment,vehicles and furniture;

(c) 100% of total expenditures for expatriate salaries, consultants'services and fellowships and 60% of total expenditures for stafftravel and subsistence and monitoring and evaluation.

4.09 Disbursements will be fully documented except those relating tolocal expenditures for civil works by force account, local expenditures forcivil works under contracts of less than kina 30,000, and for the localcomponent of expatriate salaries. Disbursements for these items will bemade against statements of expenditure certified by the Project Coordinatorand made available for review by Bank supervision missions. For equipment,vehicles and furniture procured through government stores, the ILPOC(Integrated Local Purchase Order Claim) form will be sufficient documenta-tion. A schedule of disbursements for the four-and-a-half years implementa-tion period (envisaged to extend from July 1983 through December 1987) isgiven in Annex 1, Table 4 and a draft Schedule I (Proposed allocation ofLoan Proceeds) in Annex 1, Table 5. Because of the unique character of theproposed project being largely a "software" project, neither the sectoraldisbursements profile for PNG nor the aggregated agricultural projectsdisbursement profile for the East Asia and Pacific Region were consideredsuitable comparators.

4.10 Accounting and Auditing. The Departmental Accountants in DPIwould have responsibility for the maintenance of separate accounts for theindividual project components in accordance with sound accounting practices,

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and would ensure that an annual auditing of these accounts by independentauditors acceptable to the Bank would take place before June 30 of thefollowing year (i.e., six months after the close of PNG-s fiscal year).Certified copies of the audits and the auditor's report would be forwardedto the Bank by September 30. The audit reports would certify that fundsdisbursed against statement of expenditures had been used for the purposesfor which they were provided.

4.11 The work of the Department Accountants should be greatly facili-tated by the introduction, in early 1984, of a comprehensive computerprogram (the Standardized Government Accounting Package) to which allDepartments could access through individual terminals. Government informedthe Bank at negotiations on the progress in the preparation of this system.

V. PROJECT IMPLEMENTATION

Implementation Responsibilities

5.01 The main responsibility for physical project implementation wouldbe with the DPI The relevant DPI Branches would be in charge of the day-to-day implementation of the individual project components, and in eachparticipating Branch, one staff would act as Component Manager. DPI hasappointed the Component lIanagers and the Project Coordinator who wouldassure proper linkages between the various components and who would be themain point of contact with the Bank. In the case of any subsequent newappointments the Bank would be given an opportunity to comment on thesuitability of the candidates.

Reorganization of DPI

5.02 Government, in response to proposals in the 1981 Bank Review, isconsidering further modifications in the DPI structure to improve itsefficiency. These changes have been discussed in detail within DPI but arestill subject to modifications and would furthermore need the concurrence ofother Government agencies (Public Service Commission (PSC) and Department ofFinance). While they are considered important, they are not deemed essen-tial for the success of the project. At negotiations Government informedthe Bank that the Crop Research Division is expected to be established byMarch 31, 1984 and the reorganization of the entire DPI is expected to beimplemented by June 30, 1984.

Early Recruitments

5.03 For a number of new positions, early recruitment is essentialeither to assure a timely start of major project components or to addresscritical shortcomings in a vital national support service (quarantine).Government had been requested to assure the funding of these key posts for

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1983 and an early posting. At negotiation Government informed the Bank thatthe following key positions are expected to be filled and appointees inplace by October 1, 1983: four Quarantine Officers, Research Director,Officer-in-charge of Research Training, Land Development Officer andInformation and Communications Specialist.

Recruitment Procedures

5.04 The identification and appointment of the incremental staff(136 national and 24 expatriate officers) will put a heavy administrativeburden on the relevant Government agencies, particularly DPI and the PublicService Commission (PSC). In order to facilitate the search for expatriatestaff, PSC has agreed to consider enlisting the services of specializedrecruitment agencies. As a possible alternative the Bank has suggested thatGovernment avail itself of the assistance of FAO's Agricultural OperationsDivision. PSC will examine incentives on individual basis to attract somehighly qualified foreign personnel. Finally, they will assign a few oftheir staff to assist DPI with the preparation of the necessary staffsubmissions. A duty statement will be prepared for each expatriate postspecifying the required qualifications, detailed work responsibilities andoutputs of the officer. The employment of the expatriate staff will begoverned by the set of Terms and Conditions of Service issued by PSC underauthority derived from the Public Employment (non-Citizens) Act. The supplyof manpower for the national staff is not expected to be a problem in viewof the adequate number of graduates from the local agricultural schools anduniversities. At negotiation Government informed the Bank that ISNAR hasbeen requested to suggest a suitable person for the post of ResearchDirector. If ISNAR fails other suitable agencies including FAO would beapproached.

Reporting

5.05 Based on the quarterly progress reports to NPO/ Department ofFinance (para. 3.40) the Component Managers would prepare semi-annual statusreports to be aggregated by the Project Coordinator and submitted to theBank before the end of the quarter following the reporting period, the firstbeing due March 31, 1984. The initial status reports would pay particularattention to the following: staffing situation; crop research; extensionsupport including research/extension linkages; and in-service training.

5.06 In addition to the two summary reports on crop research duringthe period 1973-82 (para. 3.41), the Crop Research Division would issue, notlater than six months after the end of the reporting period (calendar year),Annual Crop Research Reports outlining the major research activities andresults and to the extent feasible, relevant development in industry-sponsored crop research. The first such report would be due in June 1984.

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5.07 At the end of project implementation, the Project Coordinatorwould assemble a Project Completion Report from individual ComponentCompletion Reports prepared by the Component Managers. This report would besubmitted to the Bank not later than six months after project completion.

Operation and Maintenance

5.08 The success of the project would ultimately depend on the con-tinued commitment of adequate manpower and physical resources after theperiod of project implementation. By the end of project implementation,

revenues from new mining ventures should ease the resource constraints ofGovernment and enable it to finance the expanded and improved agriculturalsupport service (para. 3.02) from its regular budget without undue strain.

The expatriate staff would be gradually replaced by the national staff whowill either be understudies of the expatriate staff and/or outputs of thefellowship program of the project. After project implementation, 50% of theexpatriate posts (1 S04, 1 S03, and 2 S02) in the Crop Research componentwill be localized. National Staff would also take over the functions of twoexpatriate officers (S04) in Agricultural Education and Training, and twoofficers (SO3) in Agricultural Extension and Support. In the AgriculturalProject Development Section, two (S04) out of three expatriate positionsallotted for in the prject will be occupied by local people while in thePEM, four (2 ECO2, 1 ECO3, and 1 S02) out of six project expatriateposts will be phased out. Thus, in the first year after project implemen-tation, 55% of the total expatriate staff will be localized and theremainder when suitable replacements have been found and or trained.

VI. BENEFITS, JUSTIFICATION AND RISKS

Benefits

6.01 The main benefits expected from the project would be the follow-ing: an increased or more cost-efficient production in all three segments ofPNG's agriculture, that is, in smallholder cash cropping, subsistence agri-culture and estate production; the avoidance of possible economic lossesfrom the strengthening of the quarantine and animal disease controlservices; and an increase in the general administrative efficiency andtechnical expertise of DPI staff.

6.02 These benefits are difficult to quantify. However, findings fromother developing countries suggest that specific improvements in agricul-tural support services can lead to impressive results: the introduction ofthe T&V extension system in Turkey and India led to substantial yieldincreases for cotton, paddy and wheat often without a significant increase

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in other inputs./l Similarly, research on a number of crops in Brazil,Colombia and Mexico yielded annual internal rates of return between 35 and96%./2 Investment in quarantine and animal disease control should be seenas a prudent insurance policy: to quote just one example, the cultivationof sweet potatoes in PNG is second in economic importance only to coppermining, but a devastating disease would have a far more profound impact onthe nation than an interruption of mining activities.

Justification

6.03 The argument for an Agricultural Support Services Project in PapuaNew Guinea can be summarized as follows: the agriculture sector is perform-ing well below its potential and the deterioration in agricultural supportservices over the last decade is one of the main contributing factors of theunsatisfactory state of PNG's agriculture. The support services have beenfragmented and weakened by the decentralization of important supportfunctions and continuing departure of experienced expatriate staff. Unlessa determined effort is made to strengthen the central DPI in several keyareas and to enable it to assist the provincial agricultural staff, theservice may eventually cease functioning except in a narrow administrativeand regulatory role. The result would be a sector remaining largely staticand being at an increased risk of widespread damage by introduced pests anddiseases.

Environmental Considerations

6.04 By improving plant quarantine services and reducing the risk ofmajor pest and disease attack, the project will be beneficial in environ-mental terms. It would also enhance Government's ability to design andimplement environmentally sound agricultural development programs andprojects.

Risks

6.05 If properly implemented and maintained, the proposed project wouldbe essentially risk-free. Uncertainties would be limited to project imple-mentation itself: The proposed project would require a considerable inputof specialized staff, and a careful timing of budgeting, staff recruitmentand other administrative procedures. The Government is fully alerted to thedifficulties of this task and has agreed in principle to avail itself of theservices of professional recruitment agents or alternatively, to seekassistance from FAO's Agricultural Operations Division.

/1 World Bank: Agricultural Extension, The Training and Visit System,1977, p. 3.

/2 World Bank: Agricultural Research, Sector Policy Paper, 1981, Annex 3.

- 47 -

6.06 In view of the country's policy of gradually replacing expatriatestaff, steps must be taken to assure the identification and preparation ofnational staff eventually to assume additional responsibilities (although insome highly specialized positions such as in agricultural research, expa-triate personnel is expected to be required for some time to come)./l Theproposed project includes a substantial fellowship component, and many of

the trainees to be sent abroad and later to take over from expatriate staffhave already been identified. The trainees would have to execute bond toserve at least for the number of years spent abroad for training.

6.07 Several project components require a close cooperation between thecentral and provincial agricultural services. This applies particularly tothe research/extension linkage which even in the best circumstances is acomplex and demanding task. Government and Bank realize the inherentuncertainties. It is therefore proposed that the extension advisorycomponent and its links with agricultural research be given continuousattention during supervision and a prominent place in the monitoring andevaluation process.

VII. AGREEMENTS REACHED AND RECOMMENDATIONS

7.01 During negotiations agreement was reached with the Government onthe following points:

(a) the Government expects the following key positions to be filledand appointees in place by October 1, 1983: four QuarantineOfficers; Research Director; Officer-inr-charge of ResearchTraining; Land Development Officer; and Information andCommunication Specialist (para. 5.03);

(b) the Government of PNG would make 1984-1987 NPEP submissionsfor the training programs, for the Administrative College andthe Plantation Management Training Program as well as additionalstaff for the Lands Department and ensure that these submissionsare given high priority by the relevant departments. Iffunding under 1984 NPEP is not forthcoming, modified programswill be discussed and agreed with the Bank by December 31, 1983(paras. 3.18, 3.38 and 3.30);

(c) DPI has decided to locate cocoa and coconut research at Keravatand/or Tavilo; coffee and tea research at Kuk; highland food

/1 The ISNAR Report assumes that under favorable conditions the agricul-tural research service could be fully nationalized within sixteen years(that is, by 1998).

- 48 -

crop research at Aiyura. The location of low-land food cropresearch has not yet been finalized. DPI is thereforeexploring the possibility of sharing the facilities forresearch with the University of Technology at Lae if theFaculty of Agriculture of the University of Papua New Guinea,Port Moresby is relocated there, failing which the researchhas to be located at Keravat or Laloki. The Government ofPNG would inform the Bank by December 31, 1983 of the statusof this proposed arrangement with the University of Technology( paras. 3.09 and 3.10);

(d) DPI is presently engaged in discussions with the Coffee andCocoa Industry Board on several alternative proposals.Government will continue to discuss further developments withthe Bank in the process of reaching a final decision(para. 3.11);

(e) the Government of PNG provided the details on curricula andplanned student intake for the Agricultural Certificate andDiploma Courses (para. 3.16);

(f) the Department of Lands is currently assessing its technicalstaff strength with a view to recruiting additional staff tomeet the Department's as well as DPI's requirements particu-larly with reference to agricultural development projects(para. 3.30);

(g) DPI engaged a consultant to conduct a review of PNG'sQuarantine and Animal Disease Legislation who failed toproduce a report. The Government of PNG will make a formalrequest to New Zealand Government in April 1983 to carry outthe study. The study is expected to be completed by mid-1983.The Government of PNG would inform the Bank by July 31, 1983of the findings and action taken or proposed to be taken(para. 3.33 and 3.36);

(h) the Government of PNG informed the Bank that UNDP fund forfinancing part of fellowship component would not be available.The loan amount has therefore been increased from US$13.9 mil-lion to $14.1 million (para. 3.44);

(i) the Government of PNG furnished the names of the ProjectCoordinator and Component Managers at negotiations (para. 5.01);

(j) the Government of PNG informed the Bank at negotiation thatthe Crop Research Divison is expected to be established byMarch 31, 1984 and the reorganization of the entire DPI to beimplemented by June 30, 1984 (para. 5.02).

- 49 -

7.02 With the above agreements the projects would be suitable for aBank loan of US$14.1 million with a 17 year maturity including a graceperiod of four years. The borrower would be the Independent State ofPapua New Guinea.

ANNEX 1Table 1

-50 - Page 1

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Project Cost Estimates

ForeignLocal Foreign Total Local Foreign Total exchange----- K million ---- ---- US$ million ()

Crop ResearchCivil works 0.80 0.40 1.20 1.00 0.50 1.60 31Furniture and equipment 0.10 0.20 0.30 0.10 0.30 0.40 75Salaries 0.70 0.80 1.50 0.90 1.00 1.90 53Travel and subsistence 0.20 0.20 0.40 0.30 0.30 0.50 60Other operational expenses 0.10 0.20 0.30 0.10 0.30 0.40 75Baseline costs 1.90 1.80 3.70 2.40 2.40 4.80 50Physical contingencies 0.10 0.20 0.30 0.10 0.20 0.30 67Price contingencies 0.30 0.50 0.80 0.40 0.60 1.00 60

Total Cost of Component 2.30 2.50 4.80 2.90 3.20 5.40 59

Agricultural Education and TrainingCivil works 0.10 0.10 0.20 0.10 0.10 0.30 33Vehicles - 0.01 0.01 - 0.01 0.01 100Furniture and equipment 0.02 0.06 0.08 0.03 0.08 0.10 80Salaries 0.30 0.10 0.40 0.40 0.10 0.50 20Travel and subsistence 0.20 0.20 0.40 0.30 0.30 0.50 60Other operational expenses 0.50 0.30 0.80 0.60 0.40 1.00 40Baseline costs 1.10 0.90 1.90 1.40 1.00 2.40 42Physical contingencies 0.05 0.05 0.10 0.06 0.06 0.10 60Price contingencies 0.30 0.15 0.45 0.40 0.15 0.55 27

Total Cost 1.20 1.15 2.45 1.70 1.35 3.05 44

Planning and EconomicsFurniture and equipment - 0.02 0.02 - 0.03 0.03 100Salaries 0.30 0.90 1.20 0.40 1.20 1.60 75Travel and subsistence 0.40 0.10 0.50 0.50 0.20 0.70 28Other operational expenses 0.03 0.07 0.10 0.04 0.10 0.10 100Baseline costs 0.70 1.10 1.80 0.90 1.50 2.40 62Physical - 0.10 0.10 - 0.10 0.10 100Price 0.20 0.25 0.45 0.30 0.35 0.65 54

Total Cost 0.90 1.45 2.35 1.20 1.95 3.15 62

Agricultural Extension SupportFurniture and equipment - 0.20 0.20 - 0.20 0.20 100Salaries 0.40 0.20 0.60 0.50 0.30 0.80 38Travel and subsistance 0.20 0.10 0.30 0.30 0.10 0.40 25Other operational expenses 0.10 0.20 0.30 0.20 0.20 0.40 50Baseline costs 0.70 0.70 1.40 1.00 0.80 1.80 44Physical 0.05 0.05 0.10 0.06 0.06 0.10 60Price 0.25 0.05 0.30 0.30 0.06 0.40 15

Total Cost 1.00 0.80 1.80 1.40 0.90 2.30 39

ANNEX 1- 51 - Table 1

Page 2

ForeignLocal Foreign Total Local Foreign Total exchange---- K million ---- US$ million ()

Land Utilization ServicesFurniture and equipment 0.01 0.03 0.04 0.01 0.04 0.05 20Salaries 0.30 0.20 0.50 0.40 0.30 0.60 50Travel and subsistence 0.10 0.06 0.20 0.10 0.08 0.30 27Other operational expenses 0.20 0.20 0.40 0.30 0.30 0.50 60Baseline costs 0.60 0.50 1.10 0.80 0.60 1.40 43Physical contingencies 0.03 0.03 0.06 0.04 0.04 0.08 50Price contingencies 0.10 0.10 0.20 0.10 0.10 0.30 33

Total Cost 0.80 0.60 1.40 1.00 0.80 1.80 44

Agricultural Project DevelopmentFurniture and equipment 0.01 - 0.01 0.01 - 0.01 100Salaries 0.20 0.40 0.60 0.30 0.50 0.80 62Travel and subsistence 0.10 0.08 0.20 0.10 0.10 0.30 33Baseline costs 0.30 0.50 0.80 0.50 0.60 1.10 54Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.02 50Price contingencies 0.10 0.10 0.20 0.10 0.10 0.20 50

Total Costs 0.40 0.60 1.00 0.60 0.70 1.30 54

Livestock ServicesCivil works 0.06 0.04 0.10 0.10 0.05 0.10 50Vehicles, Furniture and equipment - 0.10 0.10 - 0.10 0.10 100Salaries 0.20 0.08 0.30 0.30 0.10 0.40 25Travel and subsistence 0.05 0.05 0.10 0.10 0.10 0.20 50Other operational expenses 0.01 0.09 0.10 0.01 0.10 0.10 100Baseline costs 0.40 0.30 0.70 0.50 0.40 0.90 44Physical contingencies 0.02 0.02 0.04 0.03 0.30 0.06 50Price contingencies - 0.20 0.20 - 0.30 0.30 100

Total Cost 0.40 0.50 0.90 0.50 0.70 1.20 58

Quarantine ServicesVehicle, furniture and equipment - 0.04 0.04 - 0.05 0.05 100Salaries 0.30 - 0.30 0.40 - 0.40 -

Travel and subsistance 0.03 0.01 0.04 0.04 0.01 0.05 20Other operational expenses 0.10 0.07 0.20 0.10 0.10 0.20 50Baseline costs . 0.40 0.10 0.50 0.50 0.20 0.70 28Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.03 33Price contingencies - 0.10 0.10 - 0.10 0.10 100

Total Cost 0.40 0.20 0.60 0.50 0.30 0.80 38

ANNEX 1Table 1

-52- Page 3

ForeignLocal Foreign Total Local Foreign Total exchange---- K million ----- ---- US$ million ----- ()

Plantation Management TrainingCivil Works 0.05 0.03 0.08 0.06 0.04 0.10 40Vehicles, furniture and equipment 0.01 0.05 0.06 0.01 0.10 0.10 100Other operational expenses 0.10 0.06 0.20 0.10 0.10 0.20 50Baseline costs 0.20 0.10 0.30 0.20 0.20 0.40 50Physical contingencies 0.01 0.02 0.03 0.01 0.03 0.04 75Price contingencies - 0.02 0.02 - 0.03 0.03 100

Total Cost 0.20 0.20 0.40 0.20 0.30 0.50 60

Monitoring and EvaluationBaseline costs 0.10 0.10 0.20 0.10 0.10 0.20 50Physical contingencies 0.01 0.01 0.02 0.01 0.01 0.02 50Price contingencies 0.01 0.01 0.03 0.01 0.01 0.02 50

Total Cost 0.10 0.10 0.20 0.10 0.10 0.20 50

FellowshipsBaseline costs - 1.10 1.10 - 1.40 1.40 100Physical contingencies - 0.20 0.20 - 0.30 0.30 100Price contingencies - 0.20 0.20 - 0.30 0.30 100

Total Cost - 1.50 1.50 - 2.00 2.00 100

ConsultanciesBaseline costs - 0.90 0.90 - 1.20 1.20 100Price contingencies - 0.20 0.20 - 0.30 0.30 100

Total Cost - 1.10 1.10 - 1.50 1.50 100

Transit Staff HousingBaseline costs 0.06 0.04 0.10 0.08 0.05 0.10 50Physical contingencies - - 0.01 - - 0.01 100

Price contingencies - - 0.01 - - 0.01 100

Total Cost 0.06 0.04 0.10 0.08 0.05 0.10 50

Total Baseline Cost for Project 6.40 8.10 14.50 8.20 10.60 18.80 56Total physical contingencies 0.30 0.70 1.00 0.40 0.90 1.30 69Total price contingencies 1.30 1.90 3.20 1.70 2.50 4.20 60

Total Project Cost 7.90 10.80 18.70 10.30 14.00 24.30 58

Note: Errors in calculations of 0.1 or less are due to rounding.

ANNEX 1

-53- Table 2

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Incremental Staff Requirements, by Project Component,Qualification and Nationality

CR AET PE AES LUS APD LS QS PMT TotalGrade TitleN NO E O EQ NO EO 0 NO EQ NO EQ NO EO NO EO N0 EO

AS 1 Asst. Secretary Level - l - - - - - - - - - - - - - - - - - ISO 5 Scientific Officer Grade - 3 - - - - - -… … … … … … _ _ _ _ - 3SO 4 Scientific Officer Grade - 1 1 2- - - - 3 - - - - 1 6So 3 Scientific Officer Grade - 1 1 - - 2 3 2 - 2 1 - - - … … … … 5 7VO 2 Veterinary Officer Grade - - - - - - 1 _ - - - _ _ ISO 2 Scientific Officer Grade - 2 - - _ _ 1 - - - 2 2SO 1 Scientific Officer Grade 7 - - … 3 … 10 -

RO 5 Rural Development Officer Grade… - - - - - 1 I -

RDO 4 Rural Development Officer Grade - - 2 4 2 - - 1 9 -

RDO 3 Rural Development Officer Grade - - - - - 9 _ 2 11 -RDO 2 Rural Development Officer Grade - - - 2 1 - - - 4 7 -

RDO I Rural Development Officer Grade 13 - - -…… 9 … - - 26 -

RDT 4 Rural Development Technician Grade - - 1 - - 1 -

RDT 2 Rural Development Technician GradeRDT 1 Rural Development Technician Grade 13 - - 9 - 22 -

CC 8 Clerk ClassCC 6 Clerk Class - - - - 1 ………1CC 4 Clerk Class 2 - 2 - 3… 2 …9CC 3 Clerk Class 1 - - - 1 - 1… - 3CC 2 Clerk Class - - - - 1 - 1… 2

KBO 4 Keyboard Operator ClassKBO 3 Keyboard Operator Class - - - - 2 - 1… 3KBO 2 Keyboard Operator Class 2 - 1 - - - 1 - - - I - - - I - - - 6

ECO 4 Economist Grade -- -ECO 3 Economist Grade - 3 - 3ECO 2 Economist Grade - 3 - 3 -

TO Other Support Staff 7 - - - - 7 - - - -…14 -

Total 45 a 8 2 15 6 19 2 22 2 5 3 9 1 13 136 24

Note: CR - Crop Research; AET - Agricultural Education and Traini-g; PE - Planning and Economics; AES - Agricultural Extension Support -Land Utilization Services; APD - Agricultural Project Development; LS - Livestock Services; QS - Quarantine Services;PMT - Plantation Management Training; NO - National Officer; EO - Expatriate officer

- 54 -

ANNEX 1Table 3

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Breakdown of Consultant Cost per Man-Month(March 1983, US$)

Billing rate (per manmonth) 4,300

International Travel 1,500

Duty Station ExpensesLocal duty travel 200Transport/car rental 200Accommodations /a 2,000

Total 8,200

/a Average K50 per day for food and lodging.

- 55 -ANNEX 1Table 4

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Estimated Schedule of Disbursement

Actual/projected sectoralCumulative disbursements disbursements (%)

FY Semester US$ million x Year PNG /b Region /c

84 1 0.3/a 2 1 1 12 1.8 13 2 4

85 1 3.0 21 2 6 82 4.9 35 9 15

86 1 6.8 48 3 18 222 8.8 62 27 31

87 1 10.9 77 4 38 412 12.0 85 49 50

88 1 13.5 96 5 58 602 14.1 100 67 67

/a Including capitalized front-end fee.lb Actual/projected as of 06/30/82.Tc Actual disbursements for FY70-80 period.

ANiNEX 1- 56 - Table 5

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

Proposed Allocation of Loan Proceeds(US$ million)

Foreign To beTotal exchange disbursed

Civil WorksCrop research 2.00 0.60 0.90Agricultural education and training 0.40 0.10 0.10Livestock services 0.30 0.06 0.10Plantation management training 0.10 0.05 0.06Staff transit housing 0.10 0.06 0.08

Subtotal 1.24

Vehicles, Furniture and EquipmentCrop research 0.40 0.40 0.40Agricultural education and training 0.10 0.10 0.10Planning and economics 0.03 0.03 0.03Agricultural extension and support 0.30 0.30 0.30Land utilization services 0.06 0.05 0.05Livestock services 0.30 0.01 0.01Quarantine services 0.06 0.06 0.05Plantation management training 0.09 0.08 0.08

Subtotal 1.02

Staff SalariesCrop research 2.30 1.20 1.20Agricultural education and training 0.60 0.30 0.30Planning and economics 2.00 1.40 1.40Agricultural extension and support 1.00 0.30 0.30Land utilization services 0.80 0.30 0.30Agricultural project development 0.90 0.50 0.50Livestock services 0.40 0.10 0.10

Subtotal 4.10

Consultancies 1.40 1.40 1.40

Fellowships 2.00 2.00 2.00

Travel and SubsistenceCrop research 0.60 0.40 0.30Agricultural education and training 1.70 0.80 0.80Planning and economics 0.80 0.30 0.40Agricultural Extension and support 0.50 0.30 0.30Land utilization services 0.30 0.10 0.10Agricultural project development 0.30 0.10 0.10Livestock services 0.10 0.10 0.10Quarantine services 0.06 0.01 0.C3

Subtotal 2.13

Monitoring and Evaluation 0.30 0.10 0.10

Total Disbursed 11.99

Capitalized front-end fee .035Unallocated 2.08

Total 14.10

ANNEX 2- 57 -

PAPUA NEW GUINEA

AGRICULTURAL SUPPORT SERVICES PROJECT

List of Related Document in Project File

1. Notes on:Livestock ServiceAgricultural Extension SupportQuarantine ServicesAgicultural Project DevelopmentCrop ResearchLand Utilization ServicesResearch Extension Linkages

2. Department of Primary Industry - Agricultural Support ServicesProject Preparation Report

3. ISNAR - The Crop Research Program and Organization in Papua New Guinea

4. McKillop Williamson & Associates Pty. Ltd. in association withSloane Cook & King Pt. Ltd. - DPI Manpower and Training Review -3 volumes

5. Department of Primary Industry - Course Summary for Certificateand Diploma

PAPUA NEW GUINEAAGRICULTURAL SUPPORT SERVICES PROJECT

Department of Primary IndustryOrganization Chart

MINISTER FOR 1PRIMARY INDUSTRY

SECRETARY

PLANNING ECONOMICS POLICY, REVIEW AND FISHERIESDEPUTY SECRETARY AND MARKETING COORDINATION DIVISION

BRANCH BRANCH

MANA EMENT LIVESTOCK EDUCATIONS AND

E ETRAININGBRANCH IBRANCH BRANCH .1BRANCH

World Bank-24293

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