AFRICAN DEVELOPMENT FUND

MULTINATIONAL: NERICA RICE DISSEMINATION PROJECT

PROJECT APPRAISAL REPORT

AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT CENTRAL AND WEST REGION

(OCAR.2)

JUNE 2003

MULTINATIONAL: NERICA RICE DISSEMINATION PROJECT

PROJECT INFORMATION SHEET, CURRENCY AND MEASURES, LIST OF TABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, BASIC DATA SHEET, PROJECT LOGICAL FRAMEWORK AND EXECUTIVE SUMMARY i - xii

Page

1. ORIGIN AND HISTORY OF THE PROJECT ............................................................... 1 2. THE AGRICULTURE SECTOR ......................................................................................... 2 2.1 Salient Features ............................................................................................................................... 2 2.2 Land Tenure ..................................................................................................................................... 3 2.3 Gender Issues .................................................................................................................................. 4 2.4 Poverty and Food Security .......................................................................................................... 4 2.5 Donor Support .............................................................................................................................. 5 2.6 Performance of Bank Interventions in the Agriculture Sector ........................................... 6 3. FOOD CROPS SUB-SECTOR .............................................................................................. 7 3.1 General ............................................................................................................................................. 7 3.2 Rice Production and Marketing ................................................................................................ 7 3.3 Institutional Framework .............................................................................................................. 8 3.4 Constraints and Potential for Rice Production in West Africa ........................................ 13 4. THE PROJECT ......................................................................................................................... 13 4.1 Project Concept and Rationale ................................................................................................. 13 4.2 Project Area and Beneficiaries ................................................................................................ 14 4.3 Strategic Context ......................................................................................................................... 15 4.4 Project Objective ......................................................................................................................... 15 4.5 Project Description .................................................................................................................... 15 4.6 Market and Prices ........................................................................................................................ 20 4.7 Environnemental Impact ........................................................................................................... 21 4.8 Social Impact ............................................................................................................................... 22 4.9 Project Costs ................................................................................................................................. 22 4.10 Sources of Finance and Expenditure Schedule .................................................................... 24 5. PROJECT IMPLEMENTATION ...................................................................................... 25 5.1 Executing Agency ...................................................................................................................... 25 5.2 Institutional Arrangements ....................................................................................................... 26 5.3 Supervision and Implementation Schedules ......................................................................... 26 5.4 Procurement Arrangements ...................................................................................................... 28 5.5 Disbursement Arrangements........................................................................................ 30 5.6 Monitoring and Evaluation ....................................................................................................... 30 5.7 Financial Reporting and Auditing ........................................................................................... 31 5.8 Aid Co-ordination ....................................................................................................................... 31

ii

6. PROJECT SUSTAINABILITY AND RISKS ................................................................ 31 6.1 Recurrent Costs ............................................................................................................................ 31 6.2 Project Sustainability .................................................................................................................. 32 6.3 Critical Risks and Mitigating Measures ................................................................................ 33 7. PROJECT BENEFITS ............................................................................................................ 34 7.1 Financial Analysis ....................................................................................................................... 34 7.2 Economic Analysis ...................................................................................................................... 34 7.3 Social Impact Analysis ............................................................................................................... 35 7.4 Sensitivity Analysis ..................................................................................................................... 36 8. CONCLUSIONS AND RECOMMENDATIONS .......................................................... 36 8.1 Conclusions ................................................................................................................................... 36 8.2 Recommendations ........................................................................................................................ 37 This report has been prepared by Mr. A. G. Khumbanyiwa, Agriculturist/ Forestry Specialist, OCAR.2 (Task Manager), Mr. M. M. Msuya, Agricultural Economist, OCAR.2, Mr. B. Boedts, Agronomist, OCAR.1 and Mme. R. N. Ba, Gender Specialist, OCAR following an appraisal mission undertaken in March – April 2003. Enquiries relating to the report should be addressed to the authors or Mr. Sami Z. Moussa, Division Manager, OCAR.2, extension 2143 or Mr. C. R. Spencer, Director, OCAR, extension 2036.

iii

LIST OF TABLES

Page 4.1 Summary of Project Cost Estimates by Component................................................... 23 4.2 Summary of Project Cost Estimates by Category of Expenditure ................................... 23 4.3 Summary of Project Cost by Component and Country ...................................................... 23 4.4 Summary of Project Cost by Source of Finance ................................................................... 24 4.5 Summary of Project Costs by Source of Finance and Country ........................................ 24 4.6 Summary of ADF Loans and Grant by Source and Country ............................................. 25 5.1 Expenditure Schedule by Component .................................................................................... 27 5.2 Expenditure Schedule by Sources of Finance ....................................................................... 27 5.3 Summary of Procurement Arrangements ............................................................................... 28 6.1 Summary of ADF Recurrent Cost Financing ........................................................................ 32 7.1 Project Sensitivity Analysis ....................................................................................................... 35

LIST OF ANNEXES

No. of pages

1. Map of the Project Area ................................................................................................................ 1 2. Features of NERICA Rice Varieties .......................................................................................... 1 3. Economic Analysis ........................................................................................................................ 1 4. Tentative Project Implementation Schedule ............................................................................ 1 5. Provisional List of Goods and Services (LOGS) ................................................................... 1 6. Environmental and Social Management Summary ............................................................... 1 7. Project Organization and management ..................................................................................... 1

VOLUME 2

No. of pages

1. Farm Model (With and Without Project) ................................................................................ 2 2. Detailed Cost Tables ................................................................................................................... 10 3. Salient Features of the Agriculture Sector in the Seven Countries .................................... 1 4. Area Under Rice Cropping in West Africa .............................................................................. 1 5. Cost of Rice Imports in the Seven Participating Countries ................................................ 1 6. Project Sites and Number of Beneficiaries per Participating Country .............................. 1 7. Project Sites in the Seven Participating Countries ................................................................. 1 8. PVS Sites and NERICA Varieties in the Seven Countries .................................................. 1 9. Profile of Project Coordinators ................................................................................................... 1 10. Rice Production and Quantities of Imports in the Seven Countries .................................. 1

iv

AFRICAN DEVELOPMENT FUND

BP 323 – 1002 Tunis Belvédère Tunisie TEL: (216) 71 33 35 11 FAX: (216) 71 33 29 92

PROJECT INFORMATION SHEET

1. COUNTRY : Seven (7) Countries: Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone.

2. TITLE OF PROJECT : NERICA Rice Dissemination Project 3. LOCATION : Upland Rice Production Areas in seven (7) participating countries 4. BORROWER : Seven (7) countries participating countries 5. EXECUTING AGENCY : Respective Ministries of Agriculture in the seven participating countries in collaboration with WARDA 6. PROJECT DESCRIPTION: The sector goal is to contribute to poverty reduction and food security in seven (7) West African countries through enhanced access to high yielding NERICA upland rice varieties. The objective of the project is to enhance rice production and import substitution. The project has four (4) components: a) Technology Transfer; b) Production Support; c) Capacity Building; and d) Project Coordination. 7. TOTAL COST : UA 26.77 million

Foreign exchange : UA 19.59 million Local cost : UA 7.18 million 8. ADF LOAN : UA 20.0 million 9. ADF GRANT : UA 1.99 million 10. OTHER SOURCES OF FINANCE

Seven Member Countries : UA 4.0 million Beneficiaries : UA 0.78 million 11. DATE OF APPROVAL : July 2003 12. PROBABLE COMMENCEMENT DATE AND PROJECT DURATION

Commencement : April 2004 Duration : 5 Years

13. PROCUREMENT OF GOODS, WORKS AND SERVICES

v

Procurement of goods, works and consultancy services financed by the ADF resources will be carried out in conformity with Bank Group Rules of Procedure. 14. CONSULTANCY SERVICES REQUIRED Short-term consultancy services will be required for policy reviews and establishment of Market Information System. Procurement of consultancy services will in accordance with Bank Rules of Procedures for the Use of Consultants using sort listing procurement mode.

vi

CURRENCY AND MEASURES 1 UA = USD 1.38391 1 USD = FCFA 589.309

FINANCIAL YEAR

1 January – 31 December

ABBREVIATIONS AFD : Agence Francaise de Developpement AfRGM : African Rice Gall Midge AgSSIP : Agricultural Services Sector Investment Programme ARI : African Rice Initiative BADEA : Arab Bank fore Economic Development in Africa CBO : Community Based Organization CBSS : Community Based Seed Multiplication System CGIAR : Consultative Group on International Agricultural Research CMC : Consortium Management Committee ECOWAS : Economic Commission for West African States EIRR : Economic Internal Rate of Return EU : European Union FAO : Food and Agriculture Organization of the United Nations FARA : Forum for Agricultural Research in Africa FIRR : Financial Internal Rate of Return GDP : Gross Domestic Product IFAD : International Fund for Agricultural Development KFW : Kreditanstalt fur Wilderanflan (German Development Agency) M&E : Monitoring and Evaluation NARES : National Agriculture Research & Extension Services NEA : National Environmental Agency NEPAD : New Partnership for Africa’s Development NERICA : New Rice for Africa NGO : Non-Governmental Organization NSS : National Seed Service NRM : Natural Resources Management PADER : Projet d’Appui au Developpement Rurale PCR : Project Completion Report PCU : Project Coordination Unit PRA : Participatory Rural Appraisal PRSP : Poverty Reduction Strategy Paper PSC : Project Steering Committee PVS : Participatory Variety Selection RYMV : Rice Yellow Motley Virus SG2000 : Sasakawa Global 2000 SMS : Subject Matter Specialist TICAD : Tokyo International Conference on African Development USAID : United States Agency for International Development WARDA : West Africa Rice Development Association WFP : World Food Programme

vii

COMPARATIVE SOCIO-ECONOMIC INDICATORS ON NERCIA COUNTRIES Year NERICA

CountriesAfrica Develo- ping

Countries Develo- ped Countries

Basic Indicators Area ( '000 Km²) 2 844 30 061 80 976 54 658Total Population (millions) 2001 169.0 811.6 4,940.3 1,193.9Urban Population (% of Total) 2001 41.7 38.0 40.4 76.0Population Density (per Km²) 2001 59.4 27.0 61.0 21.9GNI per Capita (US $) 2000 290 671 1 250 25 890Labor Force Participation - Total (%) 2001 42.2 43.1 … …Labor Force Participation - Female (%) 2001 50.7 33.8 … …Gender -Related Development Index Value 2000 0.453 0.476 0.634 0.916Popul. Living Below $ 1 a Day (% of Population) 1994 … 45.0 32.2 …Demographic Indicators Population Growth Rate - Total (%) 2001 2.6 2.4 1.5 0.2Population Growth Rate - Urban (%) 2001 4.6 4.1 2.9 0.5Population < 15 years (%) 2001 44.4 42.4 32.4 18.0Population >= 65 years (%) 2001 3.1 3.3 5.1 14.3Dependency Ratio (%) 2001 90.8 85.5 61.1 48.3Sex Ratio (per 100 female) 2001 72.5 99.4 103.3 94.7Female Population 15-49 years (% of total population)

2001 22.8 23.6 26.9 25.4

Life Expectancy at Birth - Total (years) 2001 52.0 52.5 64.5 75.7Life Expectancy at Birth - Female (years) 2001 52.1 53.5 66.3 79.3Crude Birth Rate (per 1,000) 2001 40.3 37.3 23.4 10.9Crude Death Rate (per 1,000) 2001 13.8 14.0 8.4 10.3Infant Mortality Rate (per 1,000) 2001 85.6 79.6 57.6 8.9Child Mortality Rate (per 1,000) 2001 144.0 116.3 79.8 10.2Maternal Mortality Rate (per 100,000) 1990-98 860 641 491 13Total Fertility Rate (per woman) 2001 5.5 5.1 2.8 1.6Women Using Contraception (%) 1990-99 8.4 … 56.0 70.0Health & Nutrition Indicators Physicians (per 100,000 people) 1997-99 16.7 36.7 78.0 287.0Nurses (per 100,000 people) 1997-99 12.9 105.8 98.0 782.0Births attended by Trained Health Personnel (%) 1997-99 22.5 38.0 58.0 99.0Access to Safe Water (% of Population) 2000 57.4 60.4 72.0 100.0Access to Health Services (% of Population) 1993-98 65.3 61.7 80.0 100.0Access to Sanitation (% of Population) 2000 60.5 60.5 44.0 100.0Percent. of Adults (aged 15-49) Living with HIV/AIDS

2001 4.3 5.7 … …

Incidence of Tuberculosis (per 100,000) 2000 30.6 105.4 157.0 24.0Child Immunization Against Tuberculosis (%) 2000 49.4 63.5 82.0 93.0Child Immunization Against Measles (%) 2000 42.5 58.2 79.0 90.0Underweight Children (% of children under 5 years)

1995-2000 30.5 25.9 31.0 …

Daily Calorie Supply per Capita 2000 2 736 2 408 2 663 3 380Public Expenditure on Health (as % of GDP) 1995-99 1.8 3.3 1.8 6.3Education Indicators Gross Enrolment Ratio (%) Primary School - Total 1999 71.3 80.7 100.7 102.3 Primary School - Female 1999 60.4 73.4 94.5 101.9 Secondary School - Total 1999 … 29.3 50.9 99.5 Secondary School - Female 1999 … 25.7 45.8 100.8Primary School Female Teaching Staff (% of Total)

1995-98 23.9 40.9 51.0 82.0

Adult Illiteracy Rate - Total (%) 2001 36.6 37.7 26.6 1.2Adult Illiteracy Rate - Male (%) 2001 28.1 29.7 19.0 0.8Adult Illiteracy Rate - Female (%) 2001 44.8 46.8 34.2 1.6Percentage of GDP Spent on Education 1996-98 3.5 3.5 3.9 5.9Environmental Indicators Land Use (Arable Land as % of Total Land Area) 2000 14.2 6.0 9.9 11.6Annual Rate of Deforestation (%) 1992-97 1.1 0.7 0.4 -0.2Annual Rate of Reforestation (%) 1990 13.7 4.0 … …Per Capita CO2 Emissions (metric tons) 1998 0.5 1.1 2.1 12.5 Source : Compiled by the Statistics Division from ADB databases; UNAIDS; World Bank Live Database and United Nations Population Division.

viii

MULTINATIONAL: NERICA DISSEMINATION PROJECT: PROJECT MATRIX

Narrative Summary Objectively Verifiable Indicators Means of Verification Assumptions SECTOR GOAL To contribute to poverty reduction and food security in seven (7) West African countries through enhanced access to high yielding rice varieties.

- Annual income of 241,000 farm families increased by USD235.80/ha by PY5 - Calorie intake improved by PY3

Macro-economic statistics Agriculture census and surveys Baseline and subsequent surveys, Nutrition surveys, Socio-economic surveys

PROJECT OBJECTIVE Enhance rice production and rice import substitution

- Incremental production of 600,000 metric tonnes of NERICA rice by PY5 - About US$ 100 million in foreign exchange saved by PY3

Household surveys, M&E Reports, Market survey, Extension reports, Project quarterly and annual reports, Gender disaggregated data Bank Supervision reports

2.1 Conducive macro-economic environment 2.2 No adverse climatic conditions 2.3 No resource use conflict between pastoralists and rice farmers 2.4 The consumers will accept NERICA rice

PROJECT OUTPUTS 1. Technology Transfer 1.1 Basic seed distributed to NARES by WARDA 1.2 Production of Foundation seed undertaken by NARES 1.3 Complimentary research including post harvest crop

management undertaken by NARES supported by WARDA 1.4 Adaptive on-farm research implemented by NARES support

by WARDA. 1.5 Community seed production system established 1.6 Traditional upland rice varieties conserved for biodiversity

and as a source of genetic breeding material 1.7 One set of small scale rice processing equipment comprising

of small-scale rice mill, thresher, and destoner) supplied per zone

2. Production Support 2.1 NERICA technologies promoted through campaigns,

training, workshops and study tours 2.2 Enhanced seed quality control and certification services

provided 24.3 Feeder road networks improved and basic market

infrastructure provided 2.4 Target groups sensitized on relevant Technical,

Organizational, Financial Management and Cross-cutting issues (HIV/ AIDS, Malaria, Gender, Poverty, Environment)

1.1 Required Basic Seed for each NERICA variety selected by

participating country supplied by WARDA 1.2 Adequate quantities of NERICA foundation seed produced 1.3 1320 farmer groups of which 1056 are for women involved in complementary research 1.4 33,000 farmers involved in NERICA PVS (E) 1.5 54,135 metric tones of NERICA seed produced and marketed. 1.6 Traditional upland rice varieties identified, catalogued and conserved 1.7 Improved small scale rice processing units operational 2.1 400,000 ha of additional land under NERICA by PY5 2.2 NSS in the 7 countries provide better quality control services 2.3 1350 km of feeder roads rehabilitated and other infrastructure (rice

drying floors stores and marketing sheds) provided 2.4 Targeted farmers, NGOs, Traders, sensitized

Household surveys M&E Reports, Market survey Extension reports Project quarterly and annual reports Bank Supervision reports

.

ix Narrative Summary Objectively Verifiable Indicators Means of Verification Assumptions 3. Capacity Building 3.1 Reviews undertaken on policies relating to seed, rice and

input stocking, access to credit and marketing strategies 3.2 Capacity of project beneficiaries and staff of NARES

strengthened through training, and provision of essential equipment, infrastructure and O&M

3.3 Rice market information system established in each country 3.4 NARES and PCU Offices rehabilitated 3.5 Capacity of ARI Secretariat and NARES strengthened 4. Project Coordination 4.1 Project Coordination Units established at national level 4.2 Establishment and operationalisation of Multidisciplinary

NERICA Promotion Team 4.3 Coordination of national project activities provided by ARI

Secretariat at WARDA

3.1 Seven country specific reviews and one sub-regional review conducted. 3.2 Training conducted and various equipment supplied to target groups 3.3 One market information system operational for each country and coordinated by ARI Secretariat 3.4 Fourteen offices (one for research and one for PCU) rehabilitated in the 7 countries 3.5 Three vehicles per country (one for research and two for PCU):

Computer sets (Mali 5, Benin 4, S/L 5, Gambia, 5, Nigeria 7, Guinea 5, Ghana 5 ARI Secretariat 2). One photocopier, fax, scanner, for each PCU, NARES and ARI Secretariat

4.1 Staff appointed by respective Ministries of Agriculture (PC, M&E Officer, Secretary, Driver) 4.2 One NERICA Promotion Team consisting of Extension, Research,

NGOs, CBOs, Private sector established 4.3 PSC set up at WARDA and M&E system established

Household surveys M&E Reports, Market survey Extension reports Project quarterly and annual reports Bank Supervision reports

4. PROJECT ACTIVITIES 1. Technology Transfer 2. Production Support 3. Capacity Building 4. Project Coordination

Financial Resources Technology Transfer UA 3.71 million Prod Support UA 16.29 million Capacity Building UA 5.02 million Project Coordination UA 1.75 million Total UA 26.77 million ADF Loan UA 20.0 million ADF Grant UA 1.99 million Governments UA 4.0 million Beneficiaries UA 0.78 million Total UA 26..77 million Human Resources Technical Assistance Project Duration: 5 years

xi

EXECUTIVE SUMMARY 1. Project Background Rice is the major staple food for millions of people in West Africa. Currently, the annual demand for rice in the sub-region is estimated at over 8 million metric tonnes. Rapid population growth (estimated at 2.6% per annum), increasing urbanization, and the relative ease of preservation and cooking have influenced the growing trend in rice consumption. Since the 1970s, production of rice has been expanding at the rate of 5.1% per annum, with 70% of the growth due to increased area cultivated to rice, and only 30% due to higher yields per unit area. Currently an estimated 4.1 million ha are under rice in West Africa. Total rice production in the sub-region is estimated to be about 6.2 million metric tones of rice paddy. FAO estimates that rice current imports into the sub-region have grown to more than 4 million metric tonnes per year costing over $1billion in scarce foreign exchange each year. This has worrying consequences for the balance of payments of these countries. Imports of this magnitude represent a major brake on broader development and poverty reduction efforts. WARDA, the major rice research institution in West Africa, has made a breakthrough in NERICA rice research through the development of stable and fertile progenies from inter-specific crosses between Asian rice and African rice called the New Rice for Africa (NERICA) varieties. The NERICA rice varieties are mostly short-duration, high yielding, disease and pest resistant, acid tolerant, and able to withstand drought and other stressful field conditions. Organoleptic tests in West African Countries have shown that the taste, aroma and cooking characteristics of NERICA compare favourably with imported rice. Awareness campaigns and more organoleptic tests will be enhanced to publicize NERICA varieties and ensure increased market share of the locally grown rice. NERICA rice varieties have been introduced, on trial basis, in all West African countries and have been enthusiastically adopted. Upland rice farmers are enthusiastic to grow more NERICA rice but are constrained by inadequate supply of seed. The project will strengthen the link between research findings and farmers’ needs. Rice farmers will be encouraged to form groups and associations including women farmer groups to facilitate delivery of extension, credit and other services. The formation of the farmer groups and associations will give the farmers a common voice and such groupings will also be used as security for accessing credit resources. The dissemination of high yielding NERICA rice varieties and complementary technology transfer in the participating countries will be the major focus of the project. 2. Purpose of the Loan and Grant: The ADF Loan of UA 20.0 million and an ADF Grant of UA1.99 million amounting respectively to 74.71% and 7.43% of total project cost estimated at UA26.77 million, will be used to finance 90.3% of the foreign exchange cost (UA 19.59million) and 58.7% of the local cost (UA 4.13 million). 3. Sector Goal and Project Objective: The sector goal is to contribute to poverty reduction and food security in seven (7) West African countries through enhanced access to high yielding upland NERICA rice varieties.

xii

The objective of the project is to increase rice production and import substitution. The project has four (4) components: a) Technology Transfer; b) Production Support; c) Capacity Building; and d) Project Coordination. 4. Brief Description of Project Outputs: The project will support the transfer of NERICA technology from WARDA to the seven participating countries. The project will strengthen linkages between and among research, extension, farming communities and the private sector. An estimated 400,000 ha additional land will be put under NERICA rice varieties by PY5. The project will generate about 600,000 metric tones of rice. The import bill of the seven countries will be reduced by about US$100 million. The project will directly benefit an estimated 241,000 upland rice growers. The net incomes of upland rice growers will be enhanced from a net loss of about US$19.50 per ha per year before project to a net gain of US$216.30 per ha/yr 5. Project Cost: The total project cost is estimated at UA26.77 million out of which 90.% or UA 19.59 million will be foreign currency and UA7.19 million or 10% will be local currency. 6. Source of Finance: The project will be financed by the ADF Loan (74.71%), ADF Grant (7.43%), counterpart funds from the government in the seven (7) participating countries (14.94%), and the project beneficiaries (2.92%). 7. Project Implementation: The respective Ministries responsible for Agriculture in the participating countries will be the executing agency. Already existing Project Coordination Units (PCUs) have been identified to implement project activities. The PCUs in collaboration with WARDA, national research institutions, extension services, NGOs, and community based organizations including women farmers associations will be responsible for dissemination of NERICA technology in the seven participating countries. The project will be implemented over a period of five (5) years. 8. Conclusion and Recommendations: The project is technically feasible, socially desirable, economically viable and environmentally friendly. The project is a priority and consistent with development objectives of the seven participating countries. It will support sustainable intensification of rice production systems. The project seeks to provide a basis for sustainable rice production and marketing in West Africa in general and in the seven countries in particular. It is also in line with the principles of the New Partnership for Africa’s Development (NEPAD). The project is a model for continent-wide food security programmes. The project is consistent with the Bank Group Vision and Strategy, which among others focuses on food security, poverty reduction, regional integration and private sector development. The project is expected to make significant positive impact in poverty reduction in the project area. It is recommended that an ADF Loan not exceeding UA20.0 million and an ADF Grant not exceeding UA1.99 million be granted to the 7 participating counties and ARI to finance the execution of the project as described in this report.

1

1. ORIGIN AND HISTORY OF THE PROJECT 1.1 Rice is the major staple food for millions of people in West Africa. Currently, the annual demand for rice in the sub-region is estimated at over 8 million metric tonnes. Rapid population growth (estimated at 2.6% per annum), increasing urbanization, and the relative ease of preservation and cooking have influenced the growing trend in rice consumption. Since the 1970s, production of rice has been expanding at the rate of 5.1% per annum, with 70% of the growth due to increased area cultivated to rice, and only 30% due to higher yields per unit area. Currently an estimated 4.1 million ha are under rice in West Africa. Total rice production in the sub-region is estimated to be about 6.2 million metric tones of rice paddy. FAO estimates that rice current imports into the sub-region have grown to more than 4 million metric tonnes per year costing over $1billion in scarce foreign exchange each year. This has worrying consequences for the balance of payments of these countries. Imports of this magnitude represent a major brake on broader development and poverty reduction efforts. 1.2 As far back as 1971, the countries in West Africa joined together to assist in the development of rice varieties and rice issues which would contribute to the improvement of the rice situation. The West African Rice Research Association (WARDA) is the major rice oriented research institution in the region. In 1991 the Bank Group approved a UA 2.91 million grant for an Institutional Support Project at WARDA. The project was implemented from 1991 to 1997. In addition to the Bank and member state support, WARDA has and continues to receive support from more than 50 public and private sector donors. The Bank funded project was aimed at strengthening the capacity of WARDA and its member countries to successfully carry out research into rice cultivation, with a view to immediate application of the research results by the West African rice farmers. Between 1999 and 2000, the Bank also supported WARDA with another grant of UA400,000. The grant resources were used to consolidate the achievements of the earlier project. Specifically the grant was used for capacity building and partnership support, policy support activities, and technology generation and dissemination. 1.3 The Bank funded project at WARDA made considerable progress in developing rice varieties adapted to all the agro-ecological conditions of West Africa, based on the traditional farming methods of small-scale farmers. The developments included the production of high-yielding varieties, improvement of the cropping systems and better understanding of the rice sub-sector. WARDA has also developed stable and fertile progenies from inter-specific crosses between Asian rice and African rice, called the New Rice for Africa (NERICA). Farmers growing NERICA rice varieties harvest their rice during the `hunger periods' when prices are relatively high. NERICA yields are more than 1.5 tonnes per hectare under farmers' conditions where no fertizers are applied compared to less than 1.0 tonne/ha for local varieties and other rice varieties currently being used by smallholder farmers. Apart from early maturing and high yielding characteristics, NERICA varieties are pest and disease resistant, acid tolerant, weed competitive and able to withstand drought and other stressful field conditions. The NERICA varieties have acceptable organoleptic characteristics, including good taste and aroma which compare favourably with imported rice. 1.4 NERICA rice varieties have been introduced, on trial basis, in all West African countries and it has been enthusiastically adopted. Upland rice farmers are enthusiastic to grow more NERICA rice but are constrained by inadequate supply of seed. This project will capitalize on the momentum and interest generated by the initial introduction of the

2

technology by providing the much-needed link between research findings and the needs of the farming communities. The NERICA technology is therefore ready for wider dissemination to rice growers in Africa. In this context, in August 2002 the Bank received a project preparation proposal from WARDA and a request for financial support for the dissemination of upland NERICA rice varieties to small-scale rice farmers in West Africa. Seven countries including Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone have sent official requests for Bank funding of the project. The preparation proposal from WARDA was examined and found to be satisfactory. 1.5 The Bank therefore sent a mission in March- April 2003 to appraise the project. The mission comprised Specialists from the Bank as well as WARDA. The mission visited five countries including The Gambia, Sierra Leone, Guinea, Nigeria and Mali. The mission also obtained considerable data and information from WARDA on the other countries including Benin and Ghana. During the mission, consultations were held with officials of the respective Ministries of Agriculture, Trade and Commerce, Research Institutions, Extension Services, NGOs, upland rice growers, Farmers Associations, Women Rice Farmer Groups, Rice processors, and traders. The mission also undertook field visits to major upland rice production areas. The mission also discussed with representatives of bilateral and multilateral donor institutions including World Bank, UNDP, FAO, WFP, EU, and USAID who expressed strong interest in the project. The project has also been identified as one of the regional integration projects within the agricultural sector framework of NEPAD. This report is based on the preparation proposal and findings of the appraisal mission. 2. THE AGRICULTURE SECTOR 2.1 Salient Features 2.1.1 Agriculture is the primary source of livelihood in most countries in West Africa. About 70% of rural population relies on subsistence agriculture. The overall performance of agricultural production has not been impressive. Much of the negative growth in agricultural output can be attributed to several factors. These include economic, land tenure, agricultural policies and the worsening drought situation in the Sahel. Other factors including political instability and world price fluctuations have also had significant impact on agricultural production. Agro-climatic conditions of the participating countries are either Tropical Humid or Sahelian. In all the project participating countries, agriculture is the predominant sector and is characterized by the predominance of small-sized farms. It employs about 70 to 75% of the economically active population, and contributes between 19 to 45% of GDP. In Nigeria, the agricultural sector remains a leading sector of the economy in spite of the rapid ascendancy of the petroleum sector, and its paramount role in foreign exchange earnings. The sector accounts for 32.8% of GDP, 70% of non-oil exports, and provides employment to 65% of the population. In Benin, agriculture is traditionally dominant but is greatly affected by the vagaries of weather. The agriculture sector employs 70% of the working population, contributes 39% of GDP, provides 90% of the country’s export earnings and represents 15% of Government income. The agriculture sector, with approximately 400,000 farmers is characterized by the predominance of small-sized farms varying in size from 0.50 ha in the southern part and 2 ha in the northern part of the country. 2.1.2 In Guinea, the agricultural sector constitutes the main source of income for 70% of the population, and between 1993 and 1995 accounted for an average of 18.5% of GDP.

3

Agricultural activities involve approximately 700,000 families of small farmers cultivating an average of 1.69 hectares. Shifting cultivation is the predominant farming system countrywide, with 4 to 7 year fallow periods. The cultivable area is estimated at 6 million hectares, approximately 25% of the national territory. In Ghana, agricultural activities are predominantly rain fed and the main crops produced are: rubber, oil palm, coconut, cocoa, coffee, plantain, maize, rice, yam, cassava and vegetables in the forest zone; and sorghum, pulses and millet in the transitional and savannah zones. Non-traditional crops include pineapples, mangoes, and cashew nuts. Cocoa sub-sector recorded a growth rate of 6.2% in 2000, but declined to 5.2% in 2001. Agriculture accounts for approximately 40% of GDP, employs about 60% of the national labour force. 2.1.3 In Sierra Leone only 6% percent of the country’s arable land is under cultivation while rice, the staple crop, occupies about 88% of the total area under cultivation. The agricultural sector has been devastated during the country’s ten-year conflict and requires substantial support to rehabilitate production to the pre-war level. In The Gambia, the agricultural sector is dominated by small-scale farmers and is the most important sector in the Gambia. It employs about 75% of the economically active population, contributes more than 20% of the GDP annually, generates almost 85% of the national export earnings, and provides about two-thirds of total household incomes. Agro-industrial activities are limited to groundnut milling, cereal processing, small-scale saw milling, cotton ginning, fish processing and some dairy production. In Mali, agriculture sector contributes on average, 45% to the GDP (1994-1998), keeps 80% of the labour force busy and provides 75% of the export earnings mainly from cotton and livestock products. Agricultural production is rather diversified covering food, industrial and fruit crops, vegetables, livestock, forest and fishery products. Food crops are mainly rain fed and dominated by grain like millet, sorghum, maize and rice. Pulses (cow peas and groundnuts) account for barely 10% of the total production. Cotton dominates the industrial crops followed by sugar cane, wheat and barley, which are more or less secondary. 2.2 Land Tenure In the rural areas in all the seven project participating countries, community-based land tenure systems predominantly dictate who has access to land and natural resources. In the urban areas, freehold land tenure systems supported by land registration have been put in place. In all the community-based tenure systems, access to land is primarily through a) inheritance, if one is a member of the lineage/group; b) borrowing; c) sharecropping; d) renting if one is an outsider (stranger) to the group. All of these possibilities primarily favour acquisition of land by men although women can access land through borrowing. In most cases women can have access to land through the men in the lineage. In all the participating countries, access to land is not a constraint to agricultural production for both men and women. In many countries in West Africa land is increasingly becoming more scarce and hence more valuable. This derives from increased intensity of land use as well as the growing involvement of urban dwellers in developing agricultural enterprises such as orchards and cattle ranches. The rising value of land can be expected to bring many benefits since as land becomes more valuable, there are greater returns to be made from investment in its improvement and conservation. There are also risks as land becomes more scarce, certain groups, particularly the poor, will progressively get excluded from access to land which is a basic resource essential for livelihoods and poverty reduction. There is need for the governments in West Africa in general and the project participating countries in particular to set up clear long-term national land policies to address complex issues of land tenure,

4

ownership and user rights. 2.3 Gender Issues 2.3.1 In West Africa, upland rice is produced primarily by female farmers, generating an important share of their incomes. About 80% of upland rice growers are women, according to available data at WARDA. Female incomes tend to benefit children and other vulnerable groups more than do the incomes of men. Despite this fact, past efforts to generate and transfer new rice technologies have most often by-passed women farmers. Thus, while research on rice can be particularly effective in improving the welfare of rural groups at risk, to do so it needs to be explicitly structured and focused to deal with complex gender issues. Women play a prominent role in agriculture and food security, notably cereal and vegetable production, as well as livestock rearing (mainly goats, sheep and poultry). Men are mainly involved in the production of cash crops (including lowland and irrigated rice) and management of cattle. The vast majority of women, engaged in agricultural activities, have little access to extension services, training and research, credit, health and to market information. Due to their numerous domestic burdens they do not have sufficient time to develop productive activities, to initiate new activities or to benefit from available training opportunities. 2.3.2 Women in rural areas, in particular, lack control of such economic assets as land, credit, human (education and health) and social capital (ability to participate in major decision making). These constraints combined with time-consuming domestic duties, limits their economic empowerment. In addition, decision-making both within the household and at community level, attending meetings and performing public rituals are largely male preserves. Rice growers are poor and hence unable to invest much in farm inputs including fertilizers, pesticides and herbicides. The major labor-intensive activities in rice cropping - namely, land clearing, weeding and harvesting are mostly carried out by women and children. In addition, as compared to men, rural women have a weak asset base including access to land, credit and post harvest technologies. They produce the bulk of food consumed in the household and contribute to household expenditures using revenue generated from trading and small-scale agricultural processing activities. 2.3.3 Women in the project participating countries, carry out several micro and small-scale economic activities in addition to farming with a view to supplement their incomes. These investments are usually in the area of petty trading and several forms of household based processing with the women switching between one and the other depending on what they perceive as their comparative advantage. Food processing is probably the most popular enterprise including marketing. Women contribute over 80% to agricultural production, storage and processing. The worsening economic situation prevailing in the seven participating countries has lessened the pressure on women as most households can only survive on joint efforts and incomes of both husbands and wives. In some cases children are also sent out to look for work in order to supplement the family incomes. 2.4 Poverty and Food security 2.4.1 The economies of the participating countries are characterized by low per capita incomes (GNI/capita US$ 290 compared to US$671 for Africa), high population growth rates (2.6% compared to 2.4% for Africa), rural poverty and low standards of living. Comparative living standards indicators for NERICA countries and Africa include: infant mortality rates

5

85.6 compared to 57.6, child mortality 144 against 116.3, maternal mortality 860 compared to 641, and nurses per 100,000 people 12.9 compared to 105.8. In all the participating countries more than 70% of population are living below the poverty line and are predominantly engaged in subsistence agriculture. According to the Human Development Report, more than 70% of the poor are women. 2.4.2 The economies of the project participating countries are now open with foreign trade accounting for about 25% of national GDP. Most of them are heavily dependent on one or a few export commodities whose world prices and demand are stagnant or declining. This has led to falling export earnings. Because of such factors as drought in the Sahel, unavailability of high yielding planting material and difficulties experienced by farmers in accessing credit to procure productivity enhancing inputs the project participating countries are compelled to rely on imports to meet the growing demand for rice. This has severe impact on the balance of payments of the countries concerned at the national level while making food security at the household level increasingly precarious. Increasing domestic rice production to satisfy the growing consumption and reduce imports has been a top priority for every West African country. Significant resources are being devoted for the achievement of this goal. 2.5 Donor Support in rice production 2.5.1 As indicated in paragraph 1.2 above, between 1991 and 1997, the Bank Group supported WARDA through a UA2.91 million Institutional Strengthening Project, which promoted research on African rice production. In addition, between 1999 and 2000, the Bank also supported WARDA with a grant of UA 400,000 aimed at consolidating the achievements of the earlier project. Specifically the grant was used for capacity building and partnership support, policy support activities, and technology generation and dissemination. In 2002 the Bank approved a UA 6.0 million grant facility for research and institutional capacity building institutions. The themes to be funded under this facility include i) governance, ii) agriculture and rural development (including regional integration), iii) social development and iv) macro-economic research. The Bank Group has also assisted West African countries in their efforts to address food security and poverty reduction. It has in this context supported agricultural development programmes in these countries. Much of the interventions have been in irrigated or lowland rice production. In Benin, rice cultivation is promoted in two on-going projects, located in the south of the country. In Gambia the Bank has financed Lowland Agriculture Development Programme (LADEP). In Ghana, the Bank Group interventions include three operations for irrigated rice in Kpong Study, Afram Plains Study, and Inland Valley Rice Development Project. In Guinea, the Bank intervention in rice production has been in Haute Guinea where the “Projet d’Appui au Developpement Rurale” (PADER), is on going. In Mali, rice production is promoted in five on-going agricultural projects supported by the Bank. 2.5.2 The World Bank has funded Institutional Support programme (AgSSIP), in West African Countries, including Ghana and The Gambia, which aim, among others, at enhancing the efficiency in public agricultural services so as to increase production while sustaining the natural resource base. In collaboration with the Bank, the World Bank is finalizing appraisal of Fadama II Development project in Nigeria. The project will among others, support community based rice and livestock production activities and related enterprises. In collaboration with the Bank, FAO is supporting a Special Programme for Food Security (SPFS) in Ghana, Gambia, and Guinea. The programme aims to support community based food security activities and improvement of the nutritional status of the project beneficiaries.

6

In The Gambia, IFAD is co-financing with the Bank Group, a Lowland Agriculture Development Programme (LADEP). In addition, IFAD is also financing the second phase of the Land Conservation and Smallholder Rehabilitation Project (LACOSREP) in Upper River Division, which aims to promote participatory rehabilitation of small dams originally built for livestock watering. 2.5.3 Other donors assisting West African countries with their rural development programmes and strategy related to rice growing include the following: In Guinea, the Japanese Government is financing a Community-Based Seed Production System (CBSS) project through the UNDP Office. As part of the global strategy to address food security and as part of the overall programme of disseminating the NERICA varieties of which the present project is part, Sassakawa Global 2000 (SG-2000), an International NGO, is very active in NERICA promotion activities in Guinea, and Mali. The activities supported by SG2000 include seed multiplication, extension and rice processing. In the Niger Office, in Mali, several donors (AFD, USAID, Canadian International Development Agency, UNDP, the Netherlands, KFW) have financed projects to increase land under irrigation. The European Union (EU) Emergency food security programme, in 2002, in Sierra Leone, supported a total number of 40,000 farm families with seeds and farming tools. The Chinese Government also provided one tonne of hybrid rice seed to farmers in the Western Area of Sierra Leone. Still in Sierra Leone, the Islamic Development Bank supported the agricultural sector through the establishment of rice seed banks. Some NGO, including World Vision International, are involved in NERICA promotion in Sierra Leone. 2.5.4 Many donors have expressed interest and commitment to support the dissemination of NERICA rice varieties. Rockefeller Foundation has provided grant resources to support the management of the ARI Secretariat for a period of two years. Some of the other donors who have expressed interest include the World Bank, UNDP, and the Japanese Government. UNDP is considering a proposal to funds PVS extension activities in three non-pilot countries (Sierra Leone, Ghana and Burkina Faso). The proposed budget is US$400,000 over two years. The Japanese Government is supporting NERICA seed multiplication for PVS. 2.6 Performances of Bank Interventions in the Agriculture Sector 2.6.1 The Bank Group, in collaboration with borrowing countries and other development agencies, have financed multinational projects guided by the objective of promoting closer economic links among Regional Member Countries (RMCs). From 1967 to 1998 the Bank Group approvals for multinational operations amount to a total of UA436.83 million for 101 operations. Multinational operations in the agricultural sector account for the largest number with thirty five (35) operations mainly for dam construction and rehabilitation, as well as support for research activities aimed at improving agricultural productivity. On average, the Bank funded multinational projects have performed less than satisfactory. Some of the reasons underlying the weaknesses are: a) failure in effective exercise of collective ownership and commitment to the success of multinational projects both during implementation phase and over the long-term; b) failure of member states to effectively harmonize and coordinate their policies, laws and regulations that impinge on multinational projects; c) the commitment of scarce resources available for multinational operations to projects that are of low priority in the development strategies of individual member states; d) lack of competent and self sustaining institutional framework in support of multinational operations both during the implementation phase and over the long-term. The lessons learnt from these past experiences will guide the design and implementation of new multinational projects.

7

2.6.2 The Bank Group has financed several projects in the rice sub-sector in the regional member countries. These operations have mainly supported sustainable production systems and enhancing small-scale household incomes. The Bank has drawn on the lessons learnt from these projects for the formulation of the new operations by now focusing on community based, participatory approach and state disengagement from productive activities. Government’s role is now focused on provision of services such as extension, infrastructure and creation of an enabling policy environment. For instance, in The Gambia, the Bank Group intervention, in the rice sub-sector, has been in three rice production projects. These are Jahally-Pacharr Smallholder Rice Project (JHSRP), Rice Development Project (RIDEP) and Lowlands Agriculture Development Programme (LADEP). While the first two have been closed, LADEP is still on-going. The performance of LADEP is satisfactory. It is a demand-driven and participatory intervention. The project beneficiaries are involved during planning, implementation, monitoring and evaluation of project activities. 3. FOOD CROPS SUB-SECTOR 3.1 General The food crops sub-sector is dominated by small-scale farmers who produce a wide variety of cereals, root crops, tubers and grain legumes. The main cereals and starchy foods grown include maize, rice, sorghum, millet, cassava, coco yam, plantain, groundnuts, and cowpeas among others. Vegetables such as tomatoes, pepper, okra, onions, eggplants and spices are important subsidiary food crops. Areas under fruit trees are also growing especially for mangoes, oranges, and cashew nuts. Oil palm and coconuts are important tree crops especially along the coastal areas. Locally adapted varieties of the main food crops are available and farmers have access to these varieties. The traditional varieties dominate the area planted to food crops. Rice is increasingly becoming a very important staple food crop for the West Africa sub-region. 3.2 Rice Production and Marketing 3.2.1 The West Africa sub-region has a considerable rice production potential but this potential is not yet sufficiently developed. Rice is produced mainly by small-scale farmers with limited resources and the yield is often low, among other reasons, due to shortage of high yielding seed. West African rice ecosystems are classified as: i) irrigated; ii) rain fed lowland; iii) rain fed upland; iv) mangrove swamp; and v) deep-water systems. The total area under rice cultivation in the seven countries to be involved in this project stands at about 3.4 million ha. Rice yields in upland ecosystems average 0.8 - 1 tonne per ha if fertilizer and other inputs are applied. In the traditional shifting cultivation where no fertilizers are applied, the yields are much lower. Weed competition is the most important yield-reducing factor followed by drought, blast, soil acidity and general soil infertility. Farmers traditionally manage these stresses through long periods of bush fallow. More recently, population growth has led to a dramatic reduction in fallow periods and extension of cropped periods, thereby aggravating weed pressure and soil infertility. Other factors constraining rice productivity in the project include declining capacities of the countries to maintain performing extension and research services. Farmers also face increased risks of crop failure due to erratic rains and drought.

8

3.2.2 The region’s total annual rice production increased from about 3 million tons during the 70s to 5 million in the 1980s and averaged 7.2 million over the period 1995-2000. Since the early 1970s production of rice has been expanding at the rate of 5.1% per annum, with 70% of the growth due to increased area cultivated to rice, and only 30% due to higher yields per hectare. Much of the expansion has been in the rain fed systems, particularly the two major ecosystems that make up 78% of rice land in West and Central Africa, namely: a) the upland and b) lowland systems. To cover the growing gap between the demand and supply of rice, the region’s rice imports rose from 400,000 tonnes before 1975 to over 2 million tonnes in the mid 1980s equivalent to less than US$ 280 million to US$850 million. Countries concerned by the rising cost of rice imports made major investments in rice production. This led to an increase in the rate of growth of total production from about 4% per year during the 1970s to about 5.6% during the 1980s. However imports continued to rise at about 3% per year, accounting for about 45% of total demand for rice. With most countries adopting structural adjustment programmes, national food strategies have moved from striving for food self-sufficiency to food security. The latter places emphasis on ensuring stable access to food supplies through domestic production and sustainable levels of imports thereby taking advantage of relative costs of imports and domestic production. However, falling prices in the region’s principal exports and the fact that the rice export market is very thin (6 countries account for 80% of the traded world output), make it increasingly risky for countries in the West Africa sub-region region to continue to rely on imports for a significant share of their food security requirements. 3.2.3 Traditional upland rice varieties as well as some of the improved varieties being used by smallholder farmers generally yield on average about 0.5 metric tonnes per ha in the traditional farming system without use of fertilizer. Traditional upland rice varieties mature in 150 to 170 days. Improved semi dwarfs, in Africa, mature in 120 to 140 days. But NERICA varieties mature in 90 to 100 days. The shorter time allows farmers to grow two crops during one rainy season. The second crop can be a legume such as soybean or vegetables. Under farmer conditions, where minimal inputs are applied the NERICA varieties have raised the yields of upland rice by more than 50%. NERICA varieties yield more than 1.5 metric tonnes per ha. The potential yield under farmers’ conditions is more than 4 metric tonnes per ha, where fertilizer and other inputs are applied. Weeding accounts for 30 to 40% of all labour invested in rice production. The major labour-intensive activities in rice cropping, including land clearing, weeding and harvesting are carried out by women and children. NERICA varieties have wide, droopy leaves and tend to grow vigorously at seedling and vegetative stages. These characteristics help to smother weeds thereby reducing the requirement for weeding. This in turn reduces the pressure on women and children who are directly involved in these operations. Furthermore NERICA varieties posses such agronomic traits such as disease and pest resistance, intermediate to tall stature and lodging resistance. NERICA varieties therefore offer an opportunity for sustainable intensification of upland rice production systems. 3.3 Institutional Framework Some of the important institutions involved in the rice sub-sector and implementation of agriculture and rural development programmes in the project participating countries include the following: 3.3.1 African Rice Initiative (ARI): The Africa Rice Initiative (ARI) also known as the NERICA Consortium for Food Security in Sub-Sahara Africa was launched in March 2002 to

9

provide leadership towards measurable and sustained improvement of food security situation in Africa through among others the adoption of NERICA varieties and complimentary technologies. The New Partnership for Africa’s Development (NEPAD) has identified the African Rice Initiative (ARI) as part of its agriculture component. To this end ARI will a) guide NERICA research and diffusion; b) improve information exchange among NERICA stakeholders; c) raise public awareness; and d) provide an effective monitoring and evaluation mechanism. Because of the potential inherent in NERICA technology, NEPAD, which lists poverty and food insecurity as its principal concerns, has selected the proposed project as one of the three initiatives to be supported. ARI’s key strategy is to encourage the shift from the slash-and-burn rice farming system towards more environmentally sustainable farming systems by disseminating NERICA rice varieties across Sub-Saharan Africa. The strategy, which focuses particularly on small-scale and women farmers, is in line with the principles of the New Partnership for Africa’s Development (NEPAD) and the Tokyo International Conference on African Development (TICAD). ARI membership is open to any Sub-Sahara African country. 3.3.2 WARDA: The West Africa Rice Development Association (WARDA) was formed as an autonomous inter-governmental research association in 1971 by 11 countries with the assistance of the United Nations Development Programme (UNDP), the Food and Agriculture Organization of the United Nations (FAO), and the Economic Commission for Africa (ECA). Today the association comprises 16-member countries, which are Benin, Burkina Faso, Cameroon, Chad, Cote d’Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. Since 1987 WARDA has also been a member of the Consultative Group on International Agricultural Research (CGIAR) a network of 16 international research centres supported by more than 50 public and private sector donors. Apart from the Bank and member states, WARDA receives support from Belgium, Canada, CGIAR, Common Fund for Commodities (CFC), Denmark, FAO, France, the Gatsby Foundation (UK), Germany, IDRC (Canada), IFAD, Japan, the Netherlands, Norway, the Rockefeller Foundation (USA), Sweden, UK, UNDP, USA and the World Bank. WARDA’s mission is to contribute to food security and poverty eradication, in poor rural and urban populations, particularly in West and Central Africa, through research, partnerships, capacity strengthening, and policy support on rice based systems and in ways that promote sustainable agricultural development based on environmentally sound management systems. Its research and development activities are carried out in collaboration with the national agricultural research systems of member states, academic institutions, international donors and other organizations. The capacity of WARDA has been strengthened through various donor support. In addition WARDA has experience managing donor-funded projects. 3.3.3 National Agricultural Research and Extension Services (NARES): The National Agricultural Research Institutions (NARIs) in West Africa are largely semi-autonomous organisations promoting sustainable agriculture production through the generation of appropriate and affordable technologies. They conduct on-station and on-farm adaptive research and are responsible for supervising the multiplication and certification of seed produced by farmers. NARES capacity, in terms of research scientists, support staff and extension agents is generally adequate. However they lack operating resources in terms of vehicles, motorcycles, fuel, vehicle maintenance, and field allowances. Although there is an elaborate network of extension units right to the community level fully staffed with well-qualified staff, the extension services are poorly funded. There is inadequate budgetary allocation to facilitate their work. This limits their effectiveness in the delivery of technical advice to farmers.

10

3.3.4 National Seed Services (NSS) and National Bureaus of Standards (NBS): All the participating countries have NSSs and NBSs. The former are responsible for seed certification and for ensuring seed quality standards while the latter are responsible for ensuring quality standard for all traded goods. While these institutions will have major roles to play in ensuring the success of the NERICA Dissemination Project, their capacity often needs strengthening through logistical support and training. 3.3.5 Credit and Micro Finance Institutions: All the seven participating countries have functioning credit and micro finance institutions. Short-term credit for seasonal inputs is readily available and is repayable at the end of the production season. For the most part, the credit institutions lend to the rural farming communities through micro finance institutions. Interest rates charged by the apex financial institutions that lend resources to the micro finance institution range from 8 -15%. The micro finance institutions in turn on-lend the credit resources to their clients at interest rates ranging from 25 – 30%. Generally the system for disbursement of short-term credit is well developed and operational. Short-term credit is often disbursed in kind (in the form of farm inputs) to minimise the misuse of the credit resources for non-agricultural purposes. Farmers and other investors are however constrained in obtaining medium to long-term credit to finance their acquisition of farm machinery and agro-processing equipment. Access to credit resources is even more constrained for women farmers and investors due to lack of collateral. To overcome these constraints credit is being organised though groups where borrowers (both women and men) use peer support mechanisms for credit access and management. 3.3.6 Non Governmental Organizations (NGOs): Non-Governmental Organizations (NGOs) are increasingly playing an important role in the provision of agriculture and other social services. The emergence of NGOs and their proliferation in the agricultural sector is largely a response to the inadequate public extension services resulting from inadequate budgetary provision by many governments in the sub-region. Also in many cases the structural adjustment programmes implemented by most West African States have resulted in the laying off of large numbers of extension agents. Some of these agents are forming NGOs to provide agricultural technical advice to their communities. For the most part NGOs are fairly well staffed and are capable of carrying out their objectives. 3.3.7 Private Sector: There is a fairly well developed private sector in the agricultural sector in West Africa. In each of the participating counties there are small, medium and large-scale private sector operators involved in marketing farm inputs and outputs, and in agricultural processing (including rice). Hitherto the sector’s participation in actual agricultural production and in produce marketing was limited by low returns and non-conducive policy environment. In addition, because of limited quantity and poor quality of locally produced rice the involvement of the private sector has been involved mainly in the marketing of imported rice. Increased local rice production and improved policy environment are expected to lead to a more active involvement of the private sector. In the participating countries, some progress has been made in embarking on large-scale commercial rice farming. The introduction of high yielding NERICA rice varieties will enhance the private sector investments in the rice industry. This will create jobs and wealth in rural areas where most of the rice production and processing are located. 3.3.8 National Agricultural Institutions: The following are key institutions involved in the implementation of agriculture and rural development programmes in the seven project participating countries.

11

Benin: MDR is in charge of promoting agricultural production and improving the living standard of rural dwellers through the design and implementation of policies that encourage technical advancement, taking the environment into account. That mission is in line with the strategy mapped out by the government 1991 and reviewed in 1998, which seeks to improve public service by re-focusing on coordination, follow-up and evaluation of development activities. The MDR operates through its cabinet, the general secretariat and eleven technical directorates. At the provincial level, it uses public agencies responsible for implementing its policy. The regional institutions include: (i) six regional rural development action centres (CARDER); (ii) the National Institute of Agronomic Research (INRAB); (iii) the Directorate of Agriculture (DAGRI); (iv) the Directorate of Livestock (DE); the National Agricultural Promotion Corporation (Société Nationale pour la Promotion Agricole, SONAPRA); (v) the National Food Security Agency (Office National de Sécurité Alimentaire, ONASA); and (vi) the National Stabilization Agency (Office National de Stabilisation, ONS) set up in 1996 and charged with stabilizing prices especially in the cotton sub-sector. An MDR decentralized agency, CARDER is charged by the State with implementing rural development and all related activities. Guinea: Service National de la Promotion Rurale et de la Vulgarization (SNPRV) is the key institution in Guinea whose mandate is to contribute to the improvement of agricultural production and the productivity of farmers' fields through farmer training, and raising awareness. SNPRV was created in 1986. It now covers 1554 administrative districts out of the 2172 districts of the country. In this capacity, it implements all rural extension works and gives technical assistance through advice to 600,000 householders, including 200,000 farmers' groups. SNPRV's strategy is to assist farmers by providing advice in areas such as: soil conservation, soil fertility improvement, small-scale mechanization, introduction of new varieties, seed production promotion of market-oriented approach. In addition, SNPRV is involved in awareness campaigns on HIV/Aids control, environmental protection, and improvement of farmers welfare. The headquarters of SNPRV are located in Conakry and regional offices are located in ail eight agricultural regions-Boké, Kindia, Labé, Faranah, Kankan, Macenta, Koundara and N'Zérékoré. Mali: The Ministry of Rural Development’s (MRD) through its National Directorate of Support to the Rural Areas (DNAMR) is mandated to draw up and review government policy aimed at promoting rural development. It is mainly responsible for supporting agricultural activities of farmers, women, professional groupings of the rural sector and decentralized local administrative units, notably through the following activities: (i) rural development and agricultural extension, (ii) training, information and communication, (iii) promotion of agricultural production; (iv) organization and rural area community development; v) pest and disease control for plants and animals, (vi) strengthening collaboration between research and extension, (vii) centralisation, processing and dissemination of agricultural statistical data, (viii) monitoring and evaluation of development activities. The Gambia: Department of Agricultural Services (DAS) has the responsibility for interface between extension and agricultural producers. In each of the six Agricultural Divisions there is a Divisional Agricultural Office (DAO), headed by a Divisional Agricultural Coordinator (DAC). An assistant supports the DAC and Subject Matter Specialists (SMS) in crop production, pests and diseases, communications and food and nutrition. Each division is divided into districts in which the focal point for extension work is the District Extension Centre (DEC). There are a total of 25 DECs, each supervised by a District Extension

12

Supervisor (DES). The DES is responsible for the field staff, which includes Village Extension Workers (VEWs) at the village level where there are Village Extension Centres (VECs). There are presently 125 VEWs. The staff strength is adequate for technical aspects but rather weak in commercial aspects. The capacity of staff that will be involved in the implementation of the project will be strengthened through tailor-made training courses during the project. Ghana: The Agriculture Services Sector Investment Programme (AgSSIP) is the vehicle for implementing the accelerated agricultural development strategy. AgSSIP is a three to five year rolling programme divided into four thematic sub-programmes, namely a) agriculture support services; b) institutional and regulatory improvement and capacity building; c) public infrastructure and improved market access; and d) development of agricultural business sector. The Government has adopted AgSSIP as the main thrust in the medium term perspective to address poverty reduction. AgSSIP is a long-term programme that aims at supporting the Government’s agricultural development goals by rationalizing the sectoral public expenditure and the role of MOFA and other Ministries, Departments and Agencies closely related to agricultural development. AgSSIP Secretariat has been established to coordinate the implementation of the various strategies and programmes. Sierra Leone: The Ministry of Ministry of Agriculture, Forestry and Food Security (MAFFS): MAFFS has over overall responsibility for policy, planning and implementation of agriculture activities in the country. The Ministry has been restructured recently to take account of the policy makers’ decision to decentralize the Government. There are also four provincial offices headed by Provincial Directors of Agriculture (PDA). Each PDA is responsible for supervising the districts under his/her jurisdiction. The 14 district offices are headed by District Directors of Agriculture (DDA), who are supported by Subject Matter Specialists (SMS) drawn from the different MAFFS Divisions. The Ministry has four Divisions; a) Crops Division; b) Livestock Division; c) Land and water; d) Development Division; and d) Planning, Evaluation, Monitoring and Statistics Division. The Crops Division is the largest and it is responsible for services covering all aspect of crop production and development. The Crops Unit comprises of the following units: Extension, Crop protection, Rice Unit, Produce inspection, Tree crops and Agricultural communication. The rice unit will implement the project. Nigeria: The Projects Coordination Unit (PCU) will implement the project. The PCU has emerged from merger of the former federal agricultural coordination unit (FACU) and the agricultural projects monitoring and evaluation unit (APMEU). The PCU is responsible for planning, preparation and appraisal of agricultural and rural development projects, providing technical assistance to projects and supervising their implementation. They undertake monitoring and evaluation of projects and work with national and international agencies in respect of project implementation. The PCU has eight programmes which include: Administration; Monitoring and Evaluation; Research and Extension; Rural Institutions Development; Engineering; Finance Expenditure Management; Programme Development and Planning; and Information Technology. The PCU works through its six (6) regional offices based at Benin, Enugu, Ibadan, Kaduna, Lokoja and Bauchi. The PCU has a staff strength of 650 of which 400 are in the field. The majority of the staff are involved in agricultural research and extension services.

13

3.4 Constraints and Opportunities 3.4.1 The major constraints to rice production in West Africa include: i) availability of seed for high yielding rice varieties; ii) erratic rainfall and drought; iii) limited access to credit, seasonal inputs and farming equipment; iv) lack of clear policy framework to encourage private sector engagement in the agriculture sector; v) weak institutional linkages, especially between research, extension services and the farming communities; vi) poor physical infrastructure, mainly feeder road networks and bridges and culverts; vii) poorly funded extension services; viii) low priority given to women farmers’ problems; and ix) inadequate training for farmers and farmer organisations. As highlighted in sections 2.5 and 2.6 above, the Bank together with other donors have financed several projects in the agriculture sector in the participating countries. These operations have mainly supported sustainable production systems and enhancing small-scale household incomes. Rice production projects have also been funded in the participating countries, but these have focussed mainly on irrigated or lowland rice production systems. 3.4.2 Opportunities for increased upland rice production exist through enhanced access to high yielding and diseases resistant rice varieties, improved crop husbandry practices, strengthened extension services, farmer training, and enhanced access to credit. NERICA rice varieties are high yielding, disease and pest resistant, weed competitive and acid tolerant. The cooking and organoleptic characteristics for NERICA are also accepted by consumers. Under farmer conditions NERICA varieties have raised the yield of upland rice from less than 1.0 tonne to more than 1.5 tonnes/ha. With minimal application of fertilizer, the yield levels are even higher, up to 5 metric tonnes per ha. The taste, aroma and cooking characteristics for NERICA compare favourably with imported rice. The NERICA rice varieties therefore offer opportunities for intensification. of upland rice production systems, increased household incomes for farmers, and increased market share of locally grown rice. 4. THE PROJECT 4.1 Project Concept and Rationale 4.1.1 The project is focused on supporting small-scale rice producers improve production and their household incomes through the transfer of NERICA varieties and complementary technology from WARDA. The NERICA rice varieties have been introduced and tried in many West African countries including Benin, Cote d’Ivoire, Guinea, Ghana, Guinea Bissau and Togo, where they have shown high productivity, good consumer acceptability, and high quality grain. The results have shown that under farmer conditions NERICA varieties have potential to improve rice production from less than 1.0 metric tonne per ha to more than 1.5 metric tonnes per ha in the traditional farming system where no fertilizers are applied. The project beneficiaries will be encouraged to apply fertilizer and other inputs so that higher yields, up to 5 metric tonnes/ ha can be achieved. Among the countries where the NERICA varieties have been tried, in Guinea the results have been outstanding. In that country, the NERICA rice varieties have generated positive impact mainly due to the involvement of the rice growers themselves in the planning, implementation, monitoring and evaluation of the project activities. In addition, the government gave the necessary support including sensitising the population, direct involvement of politicians, and the development of an enabling policy environment to promote rice production, marketing and processing. Furthermore, donors including the World Bank, SPAAR, the Japanese Government, UNDP

14

and Sasakawa Global 2000 played a key role in supporting the project. Lessons from Guinea have informed the design of the project. 4.1.2 The project has been designed taking into consideration the constraints of the existing rice varieties as well as the problems experienced by rice farmers in accessing high yielding varieties. The project will strengthen the linkage between research and rice growers by enhancing the availability of high yielding NERICA rice seed and complementary technology to the rice growers. NERICA rice varieties are high yielding, short duration, disease and pest resistant, acid tolerant and weed competitive. Organoleptic tests carried out in Guinea, Gambia, Sierra Leone, Nigeria and other countries have shown that the taste, aroma and cooking characteristics of NERICA compare favourably with imported rice. Awareness campaigns and more organoleptic tests will be enhanced to publicise NERICA varieties and ensure increased market share of the locally grown rice. The project has been designed to ensure enhanced availability of NERICA seed and complementary technology to the rice growers. In addition, the design ensures rapid dissemination of the NERICA rice varieties, which are acceptable and adaptable to the socio-economic, climatic, geographic, and agro-ecological conditions of the project area. 4.1.3 At the launch of the ARI initiative seven (7) West African countries, including Benin, Cote d’Ivoire, The Gambia, Guinea, Mali, Nigeria, and Togo jointly signed an agreement and reaffirming their commitment to and support for the NERICA Dissemination Project. In addition, official requests for Bank financing have been received from the following countries: Benin, The Gambia, Ghana, Togo, Nigeria and Sierra Leone. The project has been designed as a multinational in order to facilitate: a) co-ordinated regional research and as such avoid duplication of research efforts; b) comparison of NERICA performance across countries, rice systems and agro-ecological zones; c) sharing of information, lessons and experiences in the implementation of the project activities among the participating countries; d) production of basic seed generation of technical packages by WARDA thereby ensuring cost effectiveness and avoiding duplication of effort; e) coordinated training and capacity building activities; and f) establishment of a regional monitoring and evaluation mechanism. Seven countries have been selected to participate in the project. These are Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone. These countries represent a sample of the potential upland rice production ecologies. When successfully implemented, lessons learnt will be applied to a possible ECOWAS-wide enhanced NERICA dissemination programme. Furthermore it is envisaged that the sub-regional NERICA programme will be a precursor to a continent-wide NERICA programme. 4.2 Project Area and Project Beneficiaries 4.2.1 Project Area: The project will be implemented in seven (7) West African countries, which are: Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone. In the participating countries, twenty three (23) sites have been selected. The specific sites selected for project implementation are: Benin (Dassa Zoume and Glazoue), The Gambia (Tujereng, Gifanga and Ntoroba), Ghana (Hohoe, Aframso and Nyankpala), Guinea (Macenta, Foumbadou and Wolondou), Mali (Sikasso, Kita and Kenieba), Nigeria (Kaduna, Nasarawa, Ogun, Ekiti Ondo, and Taraba) and Sierra Leone (Lokomassama, Gbonkomasensen and Newton, Njala). The project sites have been selected due to their potential for increased rice production, interest and enthusiasm demonstrated by the upland rice growers in the on-going NERICA participatory variety selection (PVS) programme, existing culture of rice growing and existing farmer groups and community based institutions which are supportive of rice

15

development programmes. The physical infrastructure in the project area is generally very poor. The poor condition of access roads in some of the rice producing areas constrains farmers' accessibility to markets and poses problems in evacuation of rice to the markets.

4.2.2 Beneficiaries: The primary beneficiaries of the project will be upland rice producers. About 80% of the targeted beneficiaries are women and poor. The project beneficiaries are subsistence farmers who sell marginal surpluses to meet cash expenses such as education, health and household needs. Yield levels for their upland rice varieties are generally low mainly because farmers use traditional land races, which are low yielding. The project beneficiaries are rural communities with little education and limited training. The rice growers are also unable to access credit resources to engage in significant economic activities due to lack of collateral. There is a sharp distinction of income earnings between women and men. A total of 33,000 farm families will be involved in NERICA participatory variety selection (PVS) to enhance the dissemination of high yielding NERICA varieties. The project will benefit an estimated 241,000 farm families in the project area. The targeted beneficiaries will be organized into 1320 rice farmer groups, out of which 1056 are women groups. Other beneficiaries of the project will include rice research scientists, extension agents, community seed producers, credit and micro finance institutions, input distributors, rice processors and traders. 4.3 Strategic Context Poverty in West Africa is rampant. The average per capita income in the seven participating countries is US$290 compared to US$671 for Africa. Rice is the major element in the food basket of the people, and is produced by a large number of poor farmers. Over the years rice production has declined. The total rice production in the seven participating countries has declined from about 7.1 million metric tonnes in 1998 to 5.7 million metric tones in 2002. Because of high demand, imports of cereals especially rice have grown from an estimated 1.0 million metric tonnes to 2.3 million metric tonnes during the same period. The foreign exchange value of the rice imports in the seven countries has grown from about US$493.8 million in 1998 to US$607.6 million. In 2001. This has brought about a drain on foreign reserves for these countries. Technology and land area exist in these countries to ensure effective import substitution of rice. The drain on foreign reserves is gradually aggravated given the downturn of the global economy. This project, which aims to contribute to enhanced productivity, production and consequent food security and incomes of the rural poor has great urgency. In addition, the project will make savings on the foreign exchange for the participating countries, which are in dire need of the resources for their development requirements. 4.4 Project Objective The sector goal is to contribute to poverty reduction, and food security in West Africa through enhanced access to high yielding upland rice varieties. The project objective is to enhance rice production and import substitution. 4.5 Project Description 4.5.1 The project has the following four components: a) Technology Transfer; b) Production Support; c) Capacity Building; and d) Project Coordination.

16

(A) TECHNOLOGY TRANSFER

4.5.2 ADF Grant resources will be used to support WARDA to produce NERICA Basic Seed. About 16 metric tonnes of basic seed will be produced at WARDA during the project implementation period for distribution to the participating countries. WARDA will collaborate with the national agricultural research institutions in the participating countries to determine exact quantities of seed for specific NERICA varieties for different ecological zones. In turn, the national agricultural research institutions produce Foundation Seed, which will be used for participatory variety selection (PVS). Part of the Foundation 2 Seed will be channelled through the community based seed multiplication programme for the production of NERICA certified seed. One of the major areas of focus under this project is the participatory variety selection (PVS) and Community Based Seed Multiplication System (CBSS). 4.5.3 The project will provide resources to support adaptive on-farm research to be managed by national agricultural research institutions, supported by WARDA. The adaptive research will focus on testing and fine tuning NERICA complementary technologies. The project will also fund farming systems research including research geared to producing recommended NERICA husbandry practices (such as planting time, seeding rates, fertilizer another inputs application rates, harvesting times etc). The project will facilitate the speeding up of the PVS process by financing the establishment of 23 PVS-research sites and 66 PVS-extension sites involving a total of 1,320 PVS rice gardens. These demonstration plots/gardens will enable large numbers of upland rice growers to have access to the NERICA technology and to select NERICA varieties of their choice. 4.5.4 Project resources would also be used to support WARDA in the production of extension materials in local languages to ensure the widest publicity of research recommendations to potential NERICA seed and paddy rice producers. Part of the ADF grant resources will be used to support the seed development programme in order to speed up and up-scale the dissemination of upland NERICA rice varieties. To this end, the research activities to be funded under the project will include the initial stages of bulking Breeder Seed to produce Foundation Seed that would be distributed to selected farmers’ groups participating in the Participatory Variety Selection-Research process. The research activities would also include the refinement/ fine-tuning of the seed to specific conditions in various agro-ecological zones and demonstration of rice processing technologies. 4.5.5 Project resources will be used to provide 23 sets (one per project site) of improved small-scale rice processing equipment for demonstration purposes. These sets of equipment will include small-scale rice mills, threshers and destoners. These units will be used to demonstrate the production, processing and packaging of high quality, stone free rice. In addition, regular organoleptic tests will be organized to give an opportunity to various interested parties to taste and appreciate the qualities of locally grown NERICA rice. ADF grant resources would also be used to fund policy and strategy reviews seeking to identify constraints to upland NERICA rice dissemination and to find solutions thereof. Among others, reviews will cover policy issues including factors behind constrained access to medium and long-term credit for agricultural investment and the unwillingness of the private sector to engage in large-scale rice production and marketing. Project resources will also be provided to support national agriculture research institutions to identify, catalogue and conserve traditional rice varieties for biological diversity conservation purposes. In addition

17

these traditional rice varieties will be useful as genetic material for future breeding programmes. (B) PRODUCTION SUPPORT 4.5.6 The project resources will be used to hire services of NGOs, one per country. The hired NGO will mobilise the project beneficiaries, undertake participatory rural appraisal (PRA), conduct training needs assessment, collaborate with the beneficiaries, PCU, extension agents and research scientists in order to organise training courses. The hired NGOs, will be paid management fee and in turn the NGOs will have adequate geographic coverage, staffing and logistical support. The NGOs will provide national Team Leaders (preferably an Agro-Economist with M&E and management experience) who will oversee and coordinate the national programme of extension and capacity building. In addition the service provider shall provide the following experts: Zone Coordinators, Extension Experts, Socio-economists, Agronomists, Agro-economists, and at least 2 Extension Agents per zone. The project will finance the costs related to transportation, allowances and field gear. The government extension service will regulate and ensure high standards of services provided by the various service providers including the hired NGOs. 4.5.7 Through participatory rural appraisal (PRA) approaches and subsequent policy dialogue, problems faced by rice growers will be identified and relevant solutions found for implementation by various stakeholders. The project will strengthen the extension services in the project area to ensure that the project beneficiaries are effectively provided with technical advice. The project will also facilitate the linkage of the project beneficiaries and various stakeholders including credit and micro credit institutions, CBOs, NGOs, and rice processors and traders. Awareness campaigns and sensitization workshops will be organized to ensure that the service providers and the private sector are well informed about the project activities. Complementary technologies will be disseminated. These will include fertilizer recommendations (application rates, time of application, types of fertilizers), cultural techniques (density, mode of sowing, optimal dates of sowing, land preparation) and farming systems (rotation, use of compost and green manure). Before the release of NERICA seeds, brochures explaining differences of cropping of the new varieties compared to traditional ones will be distributed to the project beneficiaries. 4.5.8 In each participating country, three national workshops will be organized every year bringing together representatives of policy makers, project beneficiaries, extension agents, researchers, seed producers, rice processors and traders, input distributors, NGOs among others to review impact of project activities. In addition, the project will finance intra-country, and inter-country study tours, seminars, workshops and training courses (technical, organizational, financial and cross-cutting issues) for farmers groups each year. The project will obtain cooperation from other agencies, involved in civic education, and social awareness, to strengthen target groups’ capacities. The project will support the on-going initiatives towards the establishment of a community based seed multiplication programme. Under the Community-Based Seed Production System (CBSS), the national seed service will certify the Foundation Seed which will be made available to selected seed growers, including farmers’ cooperatives, private seed producers, and NGOs in the project area. The recipients of the seed packages in turn will produce certified seeds for their regions where it would be sold to smallholder farmers in their communities. To ensure quality control, community seed producers will be registered and provided with appropriate training and capacity building. Through training and guidance, farmers will maintain the purity of seeds for a period of 3-5

18

years. The National Seed Services will provide quality control services within the framework of CBSS. Selected seed producers groups will be provided with selected small-scale equipment including dryers, threshers, packaging units, storage facilities and protective gear, in order to enhance the quality of their seed production activities, for demonstration purposes. Project resources will be allocated for annual workshops bringing together all seed producers to facilitate exchange of knowledge, skills and experiences. 4.5.9 Spot improvement on an estimated 1,350 km of feeder road network in the project area in the seven project participating countries will be carried out. Spot improvement will consist of filling of potholes, re-grading, gravelling, construction of side drains and/or rehabilitation of small bridges and culverts. Other community based facilities, like rice-drying floors, stores and marketing sheds will be constructed on a demand-driven basis, with communities paying 10% of the cost. The project will encourage other farmer groups to acquire similar facilities by using group credit resources. (C) CAPACITY BUILDING 4.5.10 Before the start of project implementation, each participating country will organise launch workshops, one at national level and one at each project site. The workshops will be aimed at consensus building on project objectives, activities, modalities of implementation, organisation and management strategies, and monitoring and coordination systems. These workshops will draw participants from respective ministries responsible for agriculture, commerce and industry, import and export, as well as research, extension services, NGOs, representatives of upland rice growers, seed producers, processors, traders among others. In each participating country, bottlenecks for technology dissemination will be identified through participatory rural appraisal (PRA) surveys. Recommendations to overcome the bottlenecks will be identified for implementation by the relevant stakeholders. 4.5.11 The project will encourage beneficiaries to continue the formation of farmer groups, women groups and rice growers’ associations. A total of 1320 farmer groups will be targeted under the project. Out of these 1056 will be women farmer groups. The number of women groups is high mainly because in the project area, upland rice production is mainly a women’s activity. Men are mainly involved in lowland rice production and in the production of other cash crops. The farmer groups will form the focal points for service delivery including extension services, training and group credit management. The project will provide resources for training of the stakeholders including the rice growers, seed producers, processors, traders, extension agents, research scientists and NGOs. Training courses, study tours and workshops will be also organised. The initial phase of the training programme will involve training of trainers (TOT), where the trainee beneficiaries will in turn go out to train fellow rice growers. In addition to training courses, workshops, seminars, study tours, awareness campaigns will be mounted through radio, television and print media to raise awareness about the NERICA technology. The various capacity building activities will be coordinated by NARES and the hired service providers in close collaboration with WARDA. 4.5.12 The project will support the recruitment of short-term consultants in each participating country for the establishment of rice market information systems in all the participating countries. The market information system will assist rice growers, investors and rice consumers make rice production decisions based on accurate market information. The project will support the NARES through provision of field allowances for PCU and research and extension staff involved in project implementation. Capacity of the research and

19

extension staff will also be strengthened through various training courses, seminars, workshops and provision of logistical support and resources for operating and maintenance (O&M). 35 staff training courses (5 per country) will be conducted in order to equip staff with knowledge and skills necessary for implementation of the project. 4.5.13 Short-term consultants will be recruited to undertake country specific and sub-regional policy reviews on NERICA seed production and marketing, rice and input stocking, access to credit and rice marketing channels. The consultants will identify policy, institutional and macro-economic bottlenecks to the increased rice production and provide recommendations for addressing the identified problems. The recommendations will form a basis for policy dialogue workshops in which the stakeholders and relevant policy makers will review the consultants’ recommendations and identify strategies to be adopted. It will be a condition of the loan for the Borrowers to ensure that the recommendations of such policy reviews and subsequent policy dialogue are implemented. Capacity building for policy analysis will also be strengthened in all the member States to enable them contribute effectively to informed decision-making on rice policy in West Africa in general and in the participating countries in particular. The policy dialogue workshops will provide an opportunity to engage the policy makers in order to review some of the policy constraints. 4.5.14 The project will provide support to PCUs, extension and national agriculture research institutions involved in the implementation of the project. This will include rehabilitation of office buildings, construction of seed stores, rice drying sheds and market sheds. The project will also support PCUs and NARES with provision of office equipment including computers, printers, photocopiers, fax machines and scanners. The project will also provide a limited number of vehicles and motorcycles. Three vehicles will be procured per participating country; one vehicle will be allocated to the national agricultural research institutions to support adaptive on-farm NERICA research programme, PVS and follow up visits. The other two vehicles will be allocated to national PCUs to facilitate distribution of NERICA seed, extension, capacity building activities and follow up. A total of 79 motorbikes (3/project site) two each for extension and one for adaptive research. The motorcycles will be provided on a ownership scheme in order to ensure that the motorcycles are well maintained and managed. The government extension service will regulate and ensure high standards of services provided by the various service providers. ARI will be supported with office equipment such as computers, fax machine, photocopier, scanner and printer to facilitate its coordinating role as well as activities aimed at production of NERICA breeder and basic seed. 4.5.15 HIV/ Aids: The prevalence of HIV/AIDS in the seven countries is increasingly becoming a development challenge as it is most prevalent amongst the most productive age group (24 – 49). HIV/ Aids is most effectively tackled at the community level through vigorous campaigns and improved health care systems. Malaria is also widespread in West Africa and greatly affects the productivity of the labor force. The project will support existing HIV/ Aids and Malaria control programmes in the project area. During the project period, a total of UA0.48 million will be allocated to contribute towards HIV/Aids and malaria control in all the participating countries. The project resources will be used mainly to support awareness campaigns, seminars, workshops and the production of posters, pamphlets, leaflets and other publicity material. Furthermore in all training courses, workshops, seminars conducted under the project, modules covering HIV/ Aids and Malaria control will be included and specialists from the respective Ministries of Health and relevant NGOs will be invited to sensitise the project stakeholders on prevention and control measures.

20

(D) PROJECT CO-ORDINATION 4.5.16 As part of their normal work programmes, Ministries responsible for Agriculture in the respective countries will execute the project. Existing competent and experienced Project Coordinating Units (PCUs) have been identified to coordinate the project activities. The Borrower shall assign an M&E Specialist to the PCUs in order to enhance monitoring and evaluation of project activities. The PCU identified in each participating country for the coordination of the project activities, as described in section 3.8, are as follows: a) Benin: The rural development action centres (CARDER) in the Ministry of Rural Development (MDR); b) Guinea: The Service National de la Promotion Rurale et de la Vulgarization (SNPRV); c) Mali: The National Directorate of Support to the Rural Areas (DNAMR); d) The Gambia: Department of Agricultural Services (DAS); e) Ghana: The AgSSIP Secretariat; f) Sierra Leone: Crops Division (Rice Unit); and Nigeria: The Projects Coordination Unit (PCU). These institutions are described in section 3.3.8. 4.5.17 At WARDA, the Africa Rice Initiative (ARI) Coordinator, who has already been recruited under funding from Rockefeller Foundation, will coordinate project activities and provide linkage between and among the seven (7) participating countries. The ARI Coordinator will be responsible for coordination of regional activities and also provide effective linkage among the participating countries. WARDA will establish an effective mechanism for project monitoring and sharing of information. Project resources will be used to strengthen ARI Secretariat through the recruitment of an Assistant ARI Coordinator, who will be responsible for the socio-economic and M & E activities under the project. 4.6 Production, Markets and Prices 4.6.1 The project will bring about an increase in the area planted with the NERICAs to about 400,000 ha by PY5. The corresponding increase in production of rice is projected to amount to about 600,000 metric tonnes of rice. Production of certified NERICA seed is projected to increase by to 54,135 metric tonnes. On the basis of current trends in production and demand, it is projected that, assuming a 2% growth in consumption, imports will reach 4.5 million tons by 2010 and 6.5 million tons in 2020. Based on these projections it is evident that the project’s total output will be readily absorbed in the sub-region’s market where it will make a saving in the import bill amounting to about US$100 million. The NERICA seed produced will find ready markets within the neighboring communities and within the sub-region where the demand for high yielding rice seed is high. Because of various factors favoring growth in the demand for rice in the sub-region, the price elasticity of rice is low. It is therefore likely that short of a major economic downturn, demand for rice will continue to grow while at the same time the participating countries’ capacities to import continue to be hampered by adverse trends in their terms of trade. Apart from the current trends, comparing the prices of rice imports and the cost of domestic production it becomes evident that domestic production has clear comparative advantage over importation. The average production cost for rice is about USD0.10/kg. This compares well with export parity price of about USD0.14//kg for the 40% broken grade rice that is most preferred in the sub-region. 4.6.2 Available data at WARDA indicate significant average annual price differentials between countries. There are also considerable differences within countries between different regions indicating opportunities for trade between states and within each member state between regions. In addition, within each year prices vary widely from harvest time when

21

prices are lowest to the following planting season when prices are at their highest. In Mali for instance, over the past six years the difference between the price during the harvest time and peak price has fluctuated between 6% to nearly 60%. This also indicates profitable trading opportunities for farmers and traders who are able to hold stocks between the harvest months in January-March to the lean months of September-December. To take advantage of these opportunities will require investment in the acquisition of produce preservation skills, including proper drying and storage and construction of proper storage facilities. 4.7 ENVIRONMENTAL IMPACT 4.7.1 The project has been classified as category II under the Bank’s Environmental Assessment Guidelines. 4.7.2 Positive Impact: As productivity per unit area for rice will be improved through the breakthrough in NERICA technology, there will be minimal opening up of new agricultural lands. It is envisaged that there will be land use substitution whereby land under low yielding traditional rice varieties will be put under NERICA rice thereby improving the productivity and hence the economic use of the lands. In addition the high productivity of NERICA rice will facilitate the shift from slash and burn farming systems to the intensification of more sustainable farming systems. As NERICA rice varieties are more resistant to most pests and diseases, the use of pesticides and fungicides will be reduced to an absolute minimum. This will help to reduce adverse environmental effects associated with the use of pesticides and fungicides. 4.7.3 Negative Impact: Potential negative environmental impacts can arise from opening up of more agriculture land. Furthermore, planting of large areas of almost NERICA monoculture can bring about disastrous consequences, if the NERICA rice varieties become susceptible to strains of rice pests and diseases. In addition, use of pesticides and fungicides to control rice pests and diseases can have negative environmental impact, if not properly done by the rice growers. 4.7.4 Mitigating Measures: Various NERICA rice varieties will be introduced into the farming system with a view to enhance both diversity of the genetic base and productivity per unit area. The Community Based Seed Multiplication Programme (CBSS) will be supported by national seed services, research and extension agents to ensure that standards for seed germination and purity are maintained. Training of beneficiary rice growers, extension agents, NGOs and Research Scientists involved in the project will be used as a strategic tool to address the potential negative environmental impacts highlighted above. The training programmes will include pest and disease control, post-harvest management, and environmental management among others. Other mitigating measures will include continuous transfer of knowledge to farmers by extension agents and NGOs and environmentally friendly farming practices such as proper application of fertilizers, manure and appropriate application of agro-chemicals. 4.7.5 Monitoring: The project will provide technical support and training throughout the project implementation period. The training and awareness campaigns will be aimed at raising awareness about potential negative impacts and the necessary mitigation measures. In each participating country the National Environmental Agencies (NEAs) will support the PCUs in evaluating and monitoring environmental impacts relating to project implementation. The Environmental Agencies will support the PCUs in design and

22

implementation of mitigation strategies. A total of UA0.40 million will be allocated during the project period to cover the cost of services provided by the National Environmental Agencies. 4.8 Social Impact 4.8.1 The NERICA rice varieties have raised the yield levels of upland rice by more than 50%. This will benefit women more, as they form the majority of the upland rice growers. NERICA varieties are also taller than local varieties and this makes harvesting easier. This reduces the drudgery for women and children who are directly involved in the harvesting operations. In the seven participating countries women, who form the majority of rice farmers, are involved in planting, weeding and harvesting. In addition women are also involved in processing and marketing. Men however support the women through ploughing of the rice fields. The project will pay special attention to women’s challenges by ensuring that they are represented and organised into rice farmer groups and seed producer groups. The project will facilitate linkage between project beneficiaries and micro finance institutions to ensure that they have access to both short and medium-term credit to enable them carry out additional income-generating activities. About 190,000 women will be involved in the project activities. The project will lead to increased household incomes, food security and well being of project beneficiaries. Specifically, socio-economic advantages to be derived by women will include: (i) improvement of the level of organization, training and productivity in order to increase women’s income; (ii) involvement of women to improve productivity, profitability and credit management; (iii) introduction and distribution of technological packages, including conservation and conditioning of foods crops; (iv) enhanced awareness of rural populations to the prevention of HIV/Aids and malaria. 4.8.2 The project will strengthen rice production and marketing. The project is estimated to generate about 600,000 metric tonnes of rice. The net incomes of upland rice growers will be enhanced from a net loss of about US$19.50 per ha per year before project to a net gain of US$216.30 per ha/yr. The project will also enhance the role of the private sector in providing market outlet for locally grown rice. In addition the project will bring about savings of scarce foreign exchange to the amount of about US$100 million during the project period. Through demand-driven and participatory approach the project will provide project beneficiaries the opportunity to choose the NERICA varieties of their choice. As NERICA varieties have short duration, this will allow the targeted beneficiaries grow a second short duration crop including soya beans, potatoes or vegetables. This will increase the farmers’ net income per unit area. Overall it is expected that the project will make a positive impact on poverty reduction in the selected areas. 4.9 PROJECT COSTS 4.9.1 The total project cost net of taxes and customs duty is estimated at US$ 37.05 million (UA 26.77 million), of which U$27.1 million (UA19.59 million) and US$ 9.95 million (UA7.18 million) is in foreign exchange and local currency, respectively. The cost includes a 10% provision for physical contingencies relating to works and goods. Estimates are based on second quarter 2003 prices and include a 3% price contingency for all components. Tables 4.1 and 4.2 summarize the detailed project cost.

23

Table 4.1: Summary of Project Costs by Components

US$ (million) UA (million) Components Local Foreign Total Local Foreign Total

% Foreign

Exchange Technology transfer 1.03 3.61 4.64 0.76 2.61 3.37 0.78 Production Support 5.47 14.86 20.33 3.95 10.74 14.69 0.73 Capacity Building 2.41 4.06 6.47 1.74 2.93 4.67 0.97 Project Coordination 0.09 2.12 2.21 0.06 1.53 1.59 0.96 Total Base Costs 9.00 24.65 33.65 6.51 17.81 24.32 0.73 Phys. Contingencies 0.31 0.54 0.85 0.22 0.39 0.61 0.64 Price Contingencies 0.64 1.90 2.54 0.46 1.38 1.84 0.75 TOTAL 9.95 27.09 37.04 7.19 19.58 26.77 0.73

Table 4.2: Summary of Project Costs by Category of Expenditure

US$ million UA million CATEGORIES

Local Foreign Total Local Foreign Total % ForeignExchange

Works 3.95 6.27 10.22 2.85 4.53 7.38 61.35 Goods 1.60 6.76 8.36 1.15 4.87 6.02 80.90 Services 0.17 7.70 7.87 0.14 5.56 5.70 97.89 Personnel 1.49 1.56 3.05 1.07 1.13 2.20 51.21 Operating Expenses 0.77 2.36 3.13 0.57 1.72 2.29 75.17 Miscellaneous 1.02 0.00 1.02 0.73 0.00 0.73 0.00 Total Base Costs 9.00 24.65 33.65 6.51 17.81 24.32 73.26 Physical Contingencies 0.31 0.54 0.85 0.22 0.39 0.61 63.72 Price Contingencies 0.64 1.90 2.54 0.46 1.38 1.84 74.75 Total 9.95 27.09 37.04 7.19 19.58 26.77 73.15 4.9.2 Tables 4.3 below summarise the project cost by component and country:

Table 4.3 Summary of Project cost by Component and Country (US$ million and UA million)

WARDA Benin Gambia Ghana Components US$ mi UA US$ mi UA US$ mi UA US$ mi UA

Technology transfer 0.62 0.45 0.34 0.25 0.39 0.28 0.57 0.42 Production Support 0.00 0.00 1.48 1.07 1.61 1.16 3.02 2.18 Capacity Building 0.00 0.00 0.64 0.47 0.62 0.45 0.87 0.63 Project Coordination 0.62 0.44 0.21 0.15 0.20 0.14 0.22 0.16 TOTAL 1.23 0.89 2.67 1.94 2.82 2.03 4.68 3.39

Guinea Mali Nigeria Sierra Leone Total Components

Techn. transfer 0.66 0.48 0.68 0.49 1.30 0.94 0.57 0.42 5.14 3.71 Prod. Support 3.41 2.47 3.25 2.34 6.62 4.78 3.16 2.29 22.54 16.29 Capac. Bldng 1.05 0.76 1.02 0.73 1.75 1.26 1.00 0.72 6.94 5.02 Proj. Coordin. 0.24 0.17 0.24 0.17 0.44 0.32 0.26 0.19 2.43 1.75 TOTAL 5.36 3.88 5.19 3.73 10.11 7.30 4.99 3.62 37.05 26.77

24

4.10 Sources of Financing and Expenditure Schedule 4.10.1 The ADF, participating Governments and the beneficiaries will fund the project. The ADF loan and grant will respectively account for 74.71% and 7.43% of the total project cost. The ADF grant will finance capacity building activities including, strengthening the capacities of the NARES and WARDA to carry out on-farm adoptive research and to effect the requisite refinements of the NERICA technologies to fit specific conditions under the varying agro-ecological and socio-cultural environments in the project sites. It will fund baseline surveys to establish the benchmarks for implementation monitoring and evaluation; establishment of a NERICA information exchange system amongst the participating countries; the PVS system under NARES management with beneficiary participation; and provide support to the Africa Rice Initiative Secretariat to enable it to provide overall coordination of project activities in the pilot countries. ADF loan financing will on the other hand, finance the project infrastructure, equipment, financial support to the PCU operations in the participating countries through the provision of field allowances for project staff. Countries will contribute 17.86% (14.94% by the Government and 2.92% by the beneficiaries). Government participation will stand at UA 4 million. The beneficiaries will provide UA 0.78 million.

Table 4.4: Sources of Finance (UA million)

Source Local Costs Foreign Exchange Total Costs % of Total Costs

ADF 3.99 16.01 20.00 74.71 TAF 0.23 1.76 1.99 7.43 Government 2.19 1.81 4.00 14.94 Beneficiaries 0.78 0.00 0.78 2.92 TOTAL 7.19 19.58 26.77 100.00

4.10.2 The breakdown of project cost by source of finance and country is given in Tables 4.5

below. Table 4.5: Sources of Finance and Country (UA million) WARDA Benin Gambia Ghana

SOURCES US$ UA US$ UA US$ UA US$ UA

ADF 0.00 0.00 2.01 1.45 2.15 1.56 3.67 2.65 ADF Grant 1.23 0.89 0.18 0.13 0.20 0.15 0.20 0.15 Government 0.00 0.00 0.06 0.04 0.04 0.03 0.06 0.04 Beneficiaries 0.00 0.00 0.33 0.24 0.30 0.22 0.62 0.45 TOTAL 0.00 0.00 0.11 0.08 0.11 0.08 0.14 0.10 1.23 0.89 2.68 1.94 2.81 2.03 4.69 3.39

SOURCES Guinea Mali Nigeria Sierra Leone Total US$ UA US$ UA US$ UA US$ UA US$ UA ADF 4.15 3.00 4.04 2.92 7.72 5.58 3.94 2.85 27.68 20.00 ADF Grant 0.19 0.14 0.202 0.15 0.34 0.25 0.20 0.15 2.75 1.99 Government 0.06 0.04 0.06 0.04 0.06 0.04 0.06 0.04 0.38 0.27 Beneficiaries 0.82 0.60 0.70 0.51 1.74 1.25 0.65 0.47 5.16 3.73 TOTAL 0.14 0.10 0.18 0.13 0.25 0.18 0.14 0.10 1.08 0.78 5.36 3.87 5.18 3.75 10.11 7.30 5.00 3.61 37.05 26.77

25

4.10.3 Tables 4.6 summarise the costs under ADF loan and ADF grant financing.

Table 4.6: Summary of Project cost under ADF Loan and Grant by source and country (Million US$ and Million UA).

WARDA

Benin

Gambia

Ghana

SOURCES USD UA USD UA USD UA USD UA

ADF loan 0.00 0.00 2.01 1.45 2.15 1.56 3.67 2.65 ADF grant 1.23 0.89 0.18 0.13 0.20 0.15 0.20 0.15 Government (ADF grant) 0.00 0.00 0.06 0.04 0.05 0.03 0.06 0.04 Government (ADF loan) 0.00 0.00 0.33 0.24 0.30 0.22 0.62 0.45 Beneficiaries 0.00 0.00 0.11 0.08 0.11 0.08 0.14 0.10 TOTAL 1.23 0.89 2.68 1.94 2.81 2.03 4.69 3.39

Guinea Mali Nigeria Sierra Leone Total USD UA USD UA USD UA USD UA USD UA 4.15 3.00 4.04 2.92 7.72 5.58 3.94 2.85 27.68 20.00 0.19 0.14 0.20 0.15 0.34 0.25 0.20 0.15 2.75 1.99 0.06 0.04 0.06 0.04 0.06 0.04 0.06 0.04 0.38 0.27 0.82 0.60 0.70 0.51 1.74 1.25 0.65 0.47 5.16 3.73 0.14 0.10 0.18 0.13 0.25 0.18 0.14 0.10 1.08 0.78 5.364 3.87 5.18 3.75 10.11 7.30 5.00 3.61 37.05 26.77

4.10.4 Justification for Local Cost Financing by ADF: In addition to funding the bulk of foreign exchange costs of the project, the ADF contribution will meet 35.4% of the project’s local costs amounting to UA1.51 million, of which 29.8% or UA1.28 million would be from the ADF loan and 5.6% or UA0.24 million from the ADF grant. ADF funding of local costs will be mostly for rural infrastructure construction and rehabilitation, the cost of field allowances for project staff and researchers carrying out NERICA applied research, publicity campaigns and monitoring progress in various related activities. The ADF loan will also fund the cost of supplying seed and other inputs for the PVS process and demonstrations in the target communities. It is appropriate that the Fund should bear these costs because of the pilot nature of the project. For much of the initial stages of the project, Breeder Seed bulking, production of Foundation Seed and the whole of the PVS activities are development activities meant to publicise and popularise the NERICA technologies for which there is no profit to be made. Once the technology becomes popular and farmers begin to produce rice seed and grain for sale, the project funding would withdraw except for continued support to the extension services and project supervision and monitoring. 5. PROJECT IMPLEMENTATION 5.1 Executing Agency 5.1.1 The project will be executed by the respective Ministries responsible for Agriculture in the participating countries as part of their normal work programmes. The project will be implemented over a period of 5 years. In the participating countries, existing competent and

26

experienced Project Coordinating Units (PCUs) have been identified to manage the day to day activities of the project. Services of Service Providers (NGOs) will be hired to support mobilization, training and capacity building of the project beneficiaries. 5.1.2 At sub-regional WARDA will play a coordinating role in the supply of NERICA Basic Seed and ensuring consistency of strategic approach to the NERICA dissemination programme. In addition WARDA will support the NARES in the participating countries in capacity building, production of training materials, exchange of information and experiences, complimentary technology development, design of adaptive on-farm research trials, and NERICA seed quality control. 5.2 Institutional Arrangements 5.2.1 At WARDA, a project Steering Committee (PSC) will be established. The PSC will review and approve work programmes, and annual budgets. It will also review progress of project implementation. The Chairmanship of the PSC will be on rotational basis among the members. The PSC will be composed of one representative from each of the following institutions: a) The seven participating countries; b) FARA; c) ARI Secretariat; WARDA; d) UNDP; and e) Sasakawa Global 2000. WARDA will provide secretariat services. Representatives of the multilateral and bilateral donor agencies including the ADF, will be invited to attend PSC meetings as observers. 5.2.2 Implementation Arrangements: The day to day management of the project will be the responsibility of the Project Coordination Units (PCUs) which have been identified to implement the project activities in the seven participating countries. The PCUs will collaborate closely with agricultural research centers, extension services, NGOs, policy makers, rice farmer groups, credit institutions, micro finance institutions, rice processors and traders among others to ensure successful project implementation. The PCUs will be responsible for drawing up and monitoring annual work plan and budget indicating details of activities to be implemented, budgetary and human resource requirements, performance indicators and procurement plan. In addition, the PCUs will prepare Annual Project Work Plans and Disbursement Plans for review and approval by respective Ministries of Agriculture and the PSC. Where the Bank has Regional or Country Offices, these offices will support the PCU by reviewing various documents including work plans, disbursement application before submission to the Fund. The PCUs will report regularly to the PSC on all aspects of the project including financial aspects, and progress of project activities. The PCUs shall coordinate closely with WARDA to ensure quality control and consistency of implementation of project activities among the participating countries. The PCU will update the annual work plans and budgets in accordance with the overall implementation plan. The annual work plan and budget shall be submitted annually to ADF for approval prior to implementation. 5.3 Supervision and Implementation Schedules 5.3.1 Implementation Schedule: The project will be implemented over a five-year period beginning from January 2004. A tentative implementation schedule is given in Annex 4. During the first 3 months, each participating country will identify an already existing competent and experienced Project Coordinating Unit among the already existing PCUs and assign the chosen PCUs the responsibility to coordinate NERICA Rice Dissemination Project. In addition the governments shall appoint the Project Coordinators, M&E Specialist

27

and Accountant as well as support staff. National launching workshops and a regional launch workshop at ARI shall be organising to sensitise key stakeholders about the project objectives, modalities of implementation and to secure support from policy makers. The rest of the first year shall be used to mobilise project beneficiaries and to identify their training needs. A number of training courses shall be conducted in order to strengthen capacity of the project beneficiaries. Private sector sensitisation workshops and seminars will also be implemented. A number of bidding documents shall be developed by the PCUs. On-going PVS (Research) and PVS (Extension) will be enhanced and up-scaled to reach as many farmers as possible. Potential community seed producers will be identified and provided with appropriate training and support. Selection of extension service provider(s) will be undertaken through competitive and transparent procedure in accordance with Bank Rules of Procedure and the requisite contracts signed. Selection of potential contractors to undertake spot improvement of key feeder roads in the project area will also be undertaken. From second year, project beneficiaries will be supported through delivery of technical advice relating to NERICA rice production and access to short and medium term credit. Regular meetings, workshops, study tours will continue throughout the project period. 5.3.2 Supervision Schedule: the National PCUs will supervise the day-to-day management of project implementation. At sub-regional level the Coordinator at WARDA will provide the coordinating role. The Project Steering Committees at WARDA will provide overall monitoring of project activities. The PCUs will prepare annual work plans and budgets and from time to time review progress of project activities against set targets. The PCUs will supervise provision of goods and services undertaken by contractors and consultants. The ADF will supervise project activities at least twice a year. A mid-term review shall be undertaken in the third year of the project implementation to determine progress of project activities and determine where necessary appropriate changes in the project design. A project completion report shall be prepared at the end of PY5. The report shall be submitted to the Fund at least 3 months after expiry of project period. The report shall highlight achievements, constraints, problems and lessons learnt.

Table 5.1: Expenditure Schedule by Components (UA million) Components 2004 2005 2006 2007 2008 Total Technology transfer 1.08 0.83 0.72 0.56 0.51 3.71 Production Support 5.73 3.49 3.92 1.63 1.53 16.29 Capacity Building 2.24 0.91 0.76 0.61 0.50 5.02 Project Management 0.33 0.38 0.33 0.31 0.40 1.75 Total 9.38 5.61 5.73 3.11 2.94 26.77

Table 5.2: Expenditure Schedule by Sources of Finance (UA million)

SOURCES 2004 2005 2006 2007 2008 Total %

ADF Loan 7.34 4.44 4.15 2.09 1.98 20.00 75.5 ADF Grant 0.46 0.38 0.42 0.36 0.37 1.99 7.5 Governments 1.28 0.56 1.00 0.58 0.59 4.00 15.1 Beneficiaries 0.30 0.23 0.16 0.08 0.00 0.78 2.9 Total 9.38 5.61 5.73 3.11 2.94 26.77 1.00

28

5.4 Procurement Arrangements 5.4.1 Procurement arrangements are summarized in Table 5.1 below. All procurement of goods, works, and acquisition of consulting services financed by the ADF will be in accordance with the Bank’s Rules of Procedure for Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding Documents.

Table 5.3: Summary of Procurement Arrangements

UA millions Project Categories NCB Other* SHL NBF TOTAL

1. Civil Works 1.1 Rehabilitation of office facilities 1.21(1.21) 1.21(1.21)1.2 Spot improvement of feeder road 6.49(6.49) 6.49(6.49)1.3 Construction of rice marketing & processing infrastructure 0.72(0.72) 0.72(0.72) 2. Goods 2.1 Vehicles 0.43(0.43) 0.43(0.43)2.2 Motorcycles 0.25(0.25) 0.25(0.25)2.3 Computer equipment 0.31(0.31) 0.31(0.31)2.4 Agricultural equipment 2.24(1.11) 2.24(1.11)2.5 Seeds supply 1.98(1.98) 1.98(1.98)2.6 Diverse equipment 1.10(0.61) 1.10(0.61)2.7 Diverse goods 0.15(0.10) 0.15(0.10) 3. Consulting Services and Training 3.1 Operational & Pol. Reviews, Dialogue 1.32(1.32) 1.32(1.32)3.2 Technical Assistance to ARI 0.25(0.25) 0.25(0.25)3.3 WARDA Technical Assistance 0.28(0.28) 0.28(0.28)3.4 AIDS/Malaria Sensibilisation 0.48(0.48) 0.48(0.48)3.5 Environnemental Management 0.40(0.40) 0.40(0.40)3.6 Train. & support to public Ext. Services 1.65(1.65) 1.65(1.65)3.7 Private Extension Service Provision 1.82(1.82) 1.82(1.82) 4. Miscellaneous 4.1 Personnel costs (field allow. &salaries) 2.41(0.85) 2.41(0.85)4.2 Operating expenses 2.50(1.73) 2.50(1.73)4.3 Support to Beneficiaries participation 0.78 0.78 TOTAL 8.42(8.42) 16.01(12.01) 1.56(1.56) 0.78 26.77(21.99) Figures in parenthesis concern ADF Loan/Grant financing. * Others: includes National Shopping, and Direct Negotiations SHL = Short-listing, NBF=Non-Bank Funded

29

5.4.2 Works: Procurement of civil works will be carried out under National Competitive Bidding (NCB) procedures. Civil works will include construction of seed and material storage sheds at national research institutions and at PVS sites, community rice-drying sheds and other simple rice marketing infrastructures at key rice marketing centres, spot repairs of key feeder road networks in the project areas, and rehabilitation of office facilities. These works are worth UA8.42 million in total (or about 1.2 million per participating country). Five contracts, worth UA0.24 million on average, will be awarded in each country. NCB is appropriate for these contracts because the character, location and size of the construction works to be undertaken are such that they are unlikely to attract bids from outside the participating countries of the project, and, in each of these countries, there are local contractors sufficiently qualified and in numbers sufficient to ensure competitive bidding. 5.4.3 Goods: Procurement of vehicles, motorcycles, computers and other miscellaneous equipment, including computer and agricultural equipment, and miscellaneous goods valued at UA 6.46 million in total (about UA 0.92 million per country) will be procured through National Shopping. Five contracts will be awarded per country (average value of UA 0.18. National Shopping is considered appropriate because the value per contract is relatively small. Also, the items are readily available, off-the-shelf goods or standard specification commodities, and, there are adequate numbers of national suppliers and agents of qualified foreign suppliers, in each participating country, to ensure competitive prices. 5.4.4 Consulting Services and Training: Contracts for consultancy services and Technical Assistance (including those from WARDA amounting to UA0.28 million) and short-term consultancies for operational and policy reviews and related dialogue (e.g. annual audit of the project accounts, mid-term and final reviews, environmental impact monitoring amounting to UA1.32 million); NGO services, including provision of extension and other advisory services to farmers in the amount of UA1.82 million, will all be acquired through short-listing of consulting firms or individual consultants, in accordance with the Bank’s Rules of Procedure for the Use of Consultants. In the case of firms, the selection procedures will be based on the technical quality with price consideration. 5.4.5 The services of specialized agencies will be acquired through Direct Negotiations with existing institutions. These services for promoting the NERICA seed, include those from units of each Ministry of Agriculture’s Extension Services catering for staff training and support, worth UA 1.82 million in all (or UA 0.29 million per country). There will also be Ministry of Health inputs (from units responsible for AIDS and Malaria control), worth UA 48,000 overall (or UA 7,000 per country, covering one contract) for sensitizing beneficiaries and project staff on these issues. Further, the Environmental Management Units of the participating countries will receive assistance for their services, worth UA 0.40 million overall (or UA 57,000 per country, for one contract). The Direct negotiations mode of procurement is considered appropriate for these activities because the existing agencies possess the specialized expertise required in their various fields and only they would be able to provide such services satisfactorily. 5.4.6 Miscellaneous: operating and maintenance services, including the expenses relating to the running of the project offices, running and maintenance of vehicles and equipment, and travel expenses for staff on project monitoring, as well as travel expenses for farmers visiting PVS sites, valued at UA4.91 million (or UA 0.70 million per country on average) will be procured through existing Government procedures acceptable to ADF.

30

5.4.7 National Procedures and Regulations: Each of the participating countries has national procurement procedures and regulations that after examination have been found to be acceptable to the Bank. 5.4.8 The Executing Agency: The respective Ministries of Agriculture in each participating country have experience in implementing ADF funded projects. Consequently, they each have staff that are adequately experienced in preparing procurement documents, processing them and in handling procurement issues and are familiar with ADF Rules of Procedure for the Procurement of Goods, Works and Services. Existing PCUs identified in each country will be charged with management of the project. Theses have the requisite experience in handling ADF financial matters, including procurement and disbursement issues. In the course of project implementation, this experience would be strengthened with periodic training provided by the Bank on for the relevant staff. 5.4.9 General procurement Notice: The text of a General Procurement notice (GPN) will be agreed with the Governments of Benin, Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone (Borrowers) and it will be issued for publication in Development Business, upon approval by the Board of Directors of the Loan Proposal. 5.4.10 Review Procedures: the following documents are subject to review and approval by the ADF before promulgation: a) Special Procurement Notice; b) Tender Documents and Requests for proposals for consultants; c) Tender Evaluation Reports or Reports on Evaluation of Consultants’ proposals, including recommendations for contract award; d) Draft contracts if these have been amended from the draft included in the tender documents. 5.5 Disbursement Arrangements The project loan resources will be disbursed according to the expenditure schedule by component and by source of finance. The national coordination units will open two separate accounts in the name of the project; one for ADF funds and the other for counterpart funds. The ADF funds will be disbursed according to an annual work program, which will be approved by the respective Project Steering Committees and ADF. Initial request for disbursement of the special account will be submitted to the Bank for approval and shall cover a period of at least four months estimated budget of expenditure. The disbursement of subsequent funds will be subject to justification of the utilisation of the preceding funds. Other disbursements under the project will be made in accordance with the ADF disbursement procedures in force. Counterpart fund contribution by the participating countries will be deposited in a special account on a quarterly basis. The Grant resources will be disbursed in accordance with the work programme for the implementation of project activities both at WARDA and in the seven participating countries. WARDA will open one project account for the disbursement of ADF Grant funds. 5.6 Monitoring and Evaluation The project monitoring and evaluation will be carried out in a participatory and gender sensitive manner. The respective PCUs in the participating countries will establish verifiable indicators for evaluating project success at various intervals. Project monitoring and evaluation will be the responsibility of the M&E Specialist at each PCU. The PCUs will be required to provide quarterly reports prior to each Project Steering Committee (PSC) meetings. A mid-term review will be undertaken, in the third year of implementation, to

31

review the project’s performance. The outcome of the mid-term review will form the basis for modifying the project’s approach, if necessary. The project will prepare quarterly and annual progress reports (according to the Bank Group format) highlighting physical progress, procurement activities and expenditures, according to the requirements of ADF. The quarterly reports should reach the ADF within two months of the end of the reporting period, while the annual report should be submitted before the end of March of the following year. Each Borrower and WARDA will submit project completion reports within six months of the end of project implementation. 5.7 Financial Reporting and Auditing The Project will keep financial records in accordance with sound international accounting practices and will ensure that an independent auditor acceptable to the ADF audits all project accounts annually. Corresponding reports will be regularly submitted to the Bank for review. The PCUs and ARI will be responsible for timely submission of annual financial statements not later than six (6) months after the closing of the financial year. 5.8 Aid Co-ordination 5.8.1 As highlighted in section 1.4 above, many donors have shown strong interest to support the project. The project has also been identified as one of the regional integration projects within the agricultural sector framework of NEPAD. Currently the World Bank, UNDP and JICA are at various stages of preparing their support to the NERICA rice programme. Many more donors are expected to support various aspects of the NERICA rice and complementary technology development. All these donors will be invited as observers at PSC meetings. At national level, each country has a donor coordination mechanism, which brings together bilateral and multilateral donors to review donor-funded projects as well as identify priority areas for intervention. The national PCUs will ensure that they maintain contact and regularly provide project progress and lessons learnt to the donors’ forum. 5.8.2 During the appraisal mission, the project was discussed with representatives of multilateral and bilateral donor agencies, including the World Bank, UNDP, FAO, WFP, EU, JICA and USAID. Representatives of the donor agencies expressed strong interest in the project as it is a priority and consistent with development objectives of the seven participating countries. In addition, the project has also been identified as one of the regional integration projects within the agricultural sector framework of NEPAD. The intervention will therefore support the national initiatives and support being provided by other donors towards poverty reduction and improve livelihood, food security and import substitution. 6. PROJECT SUSTAINABILITY AND RISKS 6.1 Recurrent Costs 6.1.1 ADF financed recurrent costs under the project are estimated at UA5.73 million 0.82 million per country on average. During the project-financing phase the main items of recurrent cost to be borne by the ADF will include part of the field allowances for the ARI Coordinator and his staff and the office’s operating expenses. At the national levels, ADF would fund field allowances for the National Coordinator and for the M&E specialist, and O&M expenses for equipment and infrastructure procured under project financing. Governments would bear the recurrent costs relating to staff salaries, office rentals and

32

related utilities amounting to UA4.2 million. Motorcycles to be provided to field staff under this project will be on user ownership basis. Most of the countries in the sub-region are familiar with the practice of ownership schemes for transportation equipment supplied to project personnel under on-going projects. At the end of project financing period, the respective staff will be responsible for maintenance of the equipment. The significant improvement of beneficiaries’ incomes to be realised under the project will guarantee that they are able to maintain their farms without recourse to government support. Consequently, at the end of project implementation, there will be relatively low recurrent cost items left for government financing. These will be within the budgetary capacity of each of the participating countries. The status of recurrent cost items is summarized in Table 6.1 below:

Table 6.1: Summary of ADF Recurrent Cost Financing (UA ‘000) Recurrent Expenditure Item

Recurrent Costs Total

Maintenance 0.3230 0.3327 0.3475 0.3580 0.3687 1.7299 Office Equipement 0.4252 0.2048 0.1249 0.0809 0.0768 0.9125 Personnel 0.2098 0.2161 0.2226 0.2293 0.2362 1.1141 Agricultural Equipment 0.8886 0.1582 0.5890 0.1678 0.1728 1.9765 Total 1.8467 0.9118 1.2840 0.8360 0.8545 5.7329

6.1.2 Infrastructure development to be put in place under the project, including 1,350 km spot improvement of the rural feeder roads, construction of seed stores at PVS sites, and of rice marketing infrastructure, including marketing sheds, rice drying floors will be undertaken with beneficiary participation. Beneficiaries will also be responsible for the subsequent maintenance of the feeder roads. Contractors to be hired to carry out infrastructure development works will be required to train the beneficiaries and to prepare guidelines/manuals to assist beneficiaries in carrying out the requisite maintenance works on their own. The activities of the National Project Coordination Units and the ARI Secretariat would be integrated into the normal government and WARDA activities at the end of the project-financing phase. Recurrent costs relating to rice and seed producers, processors and traders which are private sector activities will be handled by the respective stakeholders. 6.2 Project Sustainability 6.2.1 The project beneficiaries will be fully involved at all stages of planning, design, implementation, monitoring and evaluation of project activities. The targeted beneficiaries will also be encouraged to form more groups and associations for ease of delivery of extension services as well as credit management. Dissemination of high yielding NERICA rice varieties will enhance production and productivity of rice and contribute toward food security and import substitution. Small-scale rice growers will be able to double or triple their rice yields through adoption of NERICA varieties and complementary technology. Selection of the NERICA varieties to be adopted by the beneficiaries will be through demand driven and participatory approach. Seed multiplication programme will be enhanced through a community-based approach. Local seed multiplication will ensure sustainable availability of high yielding NERICA seed. 6.2.2 The project will facilitate the linkage between project beneficiaries and credit institutions with a view to address constraints experienced by rice farmers, seed producers, processors and traders in accessing credit resources. Group credit system will be adopted. This method of lending has proved in various parts of West Africa to be more successful. The

33

recovery rate is even higher (ranging from 90-99%) among women. The private sector involvement in seed multiplication and input marketing will support and facilitate rice production at community level. In addition, the private sector will also provide market outlet for the surplus rice produced at community level thereby providing the farmers with additional income to meet their production expenses and attend to their socio-economic obligations. Furthermore, the involvement of the private sector in processing, distribution and marketing of rice will contribute substantially to import substitution and creation of job opportunities. 6.2.3 The project will strengthen the capacity of farmer groups and target beneficiaries through training, study tours, seminars and workshops. The groups formed under the project will also be used as focal points for delivery of extension services, training and group credit. The peer support mechanism under the farmer groups, established under the project will ensure better management of credit and high recovery rates by the credit institutions. 6.3 Critical Risks and Mitigating Measures 6.3.1 One of the principal causes of continuing preference of imported rice in the sub-region is that the high quality of imported rice. While there is growing interest in adopting the NERICA technology and hence likely improvement in the production and with it increased import substitution, the realisation of this prospect will rely on improvement being made in the quality of the locally grown rice. The project will train rice growers and processors to ensure that the quality of locally produced rice becomes competitive. The project will also provide one of set of small-scale rice processing equipment, per project site, for demonstration purposes. The demonstration units will focus on training producers and processors on techniques for the production of high quality, sand-free long grain rice. In addition, awareness campaigns and organoleptic tests will be enhanced in order to raise awareness about NERICA rice and demonstrate to rice consumers that NERICA taste and aroma compares favourably with imported rice. 6.3.2 Large-scale adoption of the NERICA varieties at the expense of traditional rice varieties has the accompanying risk of creating monoculture. This has the associated risk that should disease and/ or pest outbreak occur, the national food security would be put in jeopardy. Research will continue to develop varieties for different agro-ecological zones with various other attributes including disease and pest resistance. It is for this reason that support will be provided for continuing adaptive research and the refinement of the complementary technology development. Increased access to high yielding NERICA rice varieties will bring about improved productivity and production of rice in the project area with consequent improvements in household incomes and food security. The project will also mobilize rice growers, including women farmers, into groups thereby empowering them and enhancing their capacities through training and other capacity building measures. 6.3.3 Rice producers in the major exporting countries receive varying amounts of subsidies. In addition, due to economies of scale and efficient production, processing, packaging and distribution networks, imported rice tend to be low priced. There is potential risk that locally produced rice may be more expensive than imported rice thereby making it less competitive. The project will encourage beneficiaries to apply more organic and green manure with a view to reduce production costs. In addition, the NERICA rice varieties are weed competitive and therefore require less weeding than traditional rice varieties. This will further reduce the cost of production. The project will encourage the private sector in the participating countries to

34

invest more in rice processing, packaging, distribution and promotiRon of locally grown rice. In addition, regular policy reviews and subsequent dialogue will lead to the creation of an enabling policy environment and the implementation of polices which will promote production, processing and marketing of locally grown rice. Other risks and assumptions of the project are: a) that a conducive macro-economic environment will remain stable and that respective governments will adhere to agreed programme targets under structural adjustment programmes; b) weather conditions will remain favorable for NERICA rice production; c) there will no pest and disease outbreak for NERICA rice; d) conducive policy environment will prevail to facilitate extension service delivery, access to credit and sustainability of project activities. 7. PROJECT BENEFITS 7.1 Financial Analysis 7.1.1 Success of the project in improving the lives of the targeted groups will depend on: i) the number of stakeholders exposed to the NERICA technologies; ii) the proportion of the farmers that will adopt the technologies; and iii) the proportion of rice land that the farmers will assign to NERICA seed and grain production. The project’s support to the PVS and CBSS systems is aimed at exposing as many stakeholders as possible. To estimate potential benefits to accrue to farmers in the pilot countries projections were made assuming different rates of adoption and of land allocation to these technologies. WARDA has made the following estimates of these key variables: a) Adoption rate from 27% under current situation to 30% (average 28.5%) if intervention is made to increase the availability of high yielding seed to farmers. b) Rice land assignment to the NERICA rice varieties by farmers would range from 9% to 40% (average 25%). 7.1.2 On the basis of various combinations of these estimated rates projections have been made for NERICA hectarage of seed and grain rice to estimate potential incremental benefits to participating farmers resulting from the project’s intervention. The two combinations that appear most realistic (low adoption rate and low land allocation and low adoption and average land allocation) give projected seed production of up to 54,135 metric tonnes of high yielding NERICA seed 600,000 metric tonnes of rice grain. On the basis of the typical farm size estimated for all the pilot countries except Guinea of 1 ha this level of achievement would affect a total of some 241,000 rice growers. Under the project, participating farming households and communities would continue to plant a variety of food crops, including NERICA rice, over the 5-year project financing period. For purposes of financial and economic analysis of the project a mixed cropping model comprising NERICA rice (for grain and for seed production), traditional rice, maize, sorghum, chillies, cucumbers and okra has been used. Two farm budgets have been provided to estimate the average farm family incomes for this mixed cropping model and the overall benefits of the intervention. 7.1.3 Under the project, participating farming households and communities would continue to plant a variety of food crops, including NERICA rice, over the 5-year implementation period of the project. For purposes of financial and economic analysis of the project a mixed cropping model comprising NERICA rice, traditional rice, maize, sorghum, chillies, cucumber and okra

35

has been used. It is assumed in the “with project” scenario that at the outset of the project the typical one ha family plot a third of the area would be committed to NERICA rice and the rest shared between the other crops. The proportion of land allocated to the NERICAs is expected to evolve over the project implementation period. Farm budget for these typical mixed cropping models and projected revenues from the sale of the outputs from the listed crops and NERICA seed and rice, indicate that on average farmers’ annual net incomes would increase from a net income of about USD197.45 per ha per year without project to net income of USD300.47 per ha with project. The increase in income would afford participating farmers improved living standards as well as enable them to meet other expenses, including paying for inputs and the cost of labour beyond the capacity of available family work force. 7.2 Economic Analysis 7.2.1 To assess the potential impact of the project on the national economy a comparison of the economic benefits with and without the project was carried out. On the basis of a 20-year rotation period an internal economic rate of return of 42% is realised under the without fertiliser scenario and 61% when fertilisers are applied. These estimates assume: a) A 20-year rotation period to facilitate the full realisation of the investment costs, especially on the research and capacity building activities under the project; b) Economic prices for seed and rice are based on the projected domestic and regional market prices. Although import substitution would result in the loss of revenues from taxes and duties, no adjustment is made on this account because of the advantages to be realised by saving foreign exchange and even gaining export earnings from trade in rice and rice seed between the regional member countries and beyond. c) NERICA yields of 1,500 kg/ha without fertilisers and 2,500 kg/ha with fertilisers

applied and 800 kg/ha for traditional rice. d) On average NERICA is harvested 1.25 times a year. e) Most of the agricultural products produced under the assumed inter-cropping model

are for subsistence consumption, largely within the production area. Consequently, financial prices have been used for the economic analysis.

7.3 Social Impact Analysis

7.3.1 The project will directly benefit 241,000 upland rice growers out of whom about 80% are women. The introduction of NERICA rice will enhance the rice production per ha from 0.8 tonnes to about 1.5 tonnes per ha with minimal farm inputs. However as the project will facilitate linkage between project beneficiaries and credit institutions the rice production will be enhanced even further. Yields have been known to reach 5 tonnes/ha, pointing to the high potential for increased incomes. In addition NERICA rice varieties are weed competitive. As such less weeding will be required. As weeding and harvesting are tasks for women and children, this will ease the pressure on them. 7.3.2 Participatory variety selection (PVS) work in rain fed environments across West Africa has met with an enthusiastic response from farmers. The project through its activities will increase awareness among rice growers about the high yielding, disease resistant and short duration NERICA rice. This will ensure that many rice growers will adopt NERICA rice varieties. Through PVS, demand driven and participatory approach, rice growers will choose the NERICA varieties of their choice. The increased incomes derived from NERICAs, from about USD197.45 per ha per year before project to USD300.47 with project, will ensure both food

36

security as well as contribute to poverty reduction, as the surplus production will be offloaded on the market for generation of cash incomes. The project will also contribute to import substitution, as locally produced rice will become competitive. A number of business opportunities and job opportunities will open up in seed multiplication, distribution and marketing as well as in rice milling, packaging and marketing. Given that much of the rice production work load is borne by women, this will reduce the pressure on women thereby allowing them adequate time to concentrate on other socio-economic obligations including child care, cooking, agro-processing and marketing. 7.3.3 The increased yield arising from NERICA rice varieties will improve household food security both by increasing the availability of food supplies and the capacity to purchase it using the increased incomes of those involved in the rice economy. The inclusion of HIV/ Aids and malaria control modules in the seminars, workshops and training courses under the project will raise awareness about these killer diseases. Currently the awareness level is quite low. The awareness campaigns will have positive results, as the project beneficiaries will be aware about the devastating impacts of HIV/ Aids and malaria and strategies for self-protection. Through these project activities, participants will be encouraged to change behaviour and adopt strategies and life styles to avoid being infected. 7.4 Sensitivity Analysis 7.4.1 Returns from the project may differ from the assumptions used in the analysis of the project benefits as a result of technology adoption rates or land allocation rates differing from those assumed for this analysis, bad weather, pests or disease infestation, or changes in the costs of principal inputs. As indicated in the results of the sensitivity analysis tabulated below, the returns from the project are more sensitive to changes in revenue than rising costs.

Table 7.1: Project Sensitivity Analysis

Assumptions Resulting EIRR Values Model Characteristics No Fertiliser Basic EIRR Estimate 42% Costs rise 10% 28% Benefits fall 10% 13% Costs Rise 5% and Costs fall 5% 21%

7.4.2 The estimated rates of return are relatively high. This would be even more the case if fertilisers are applied in which case yields would even double the above yields which assume no fertilisers are applied. The high rates of return provide a margin of safety for stakeholders. This fact also underscores the need for the intensification of efforts to ensure that the quality of the output is maintained at a high level thereby enhancing the competitive margin and prices of the NERICA outputs. 8. CONCLUSION AND RECOMMENDATIONS 8.1 Conclusion 8.1.1 The project is technically feasible, socially desirable, economically viable and environmentally friendly. The project is will support sustainable intensification of rice production systems and will also strengthen linkages between and among research, extension,

37

farming communities and the private sector. It will support the transfer of NERICA technology from WARDA to the upland rice growing communities in the seven participating countries. The project will involve an estimated 241,000 farm families and an estimated 400,000 ha are expected to be planted with NERICA rice. The project will generate about 600,000 metric tones of rice. The project’s total output will be readily absorbed in the sub-region’s market where it will make a saving in the rice import bill amounting to about US$100 million. The net incomes of upland rice growers will be enhanced from a net loss of about US$19.50 per ha per year before project to a net gain of US$216.30 per ha/yr. The project is expected to make significant positive impact in poverty reduction in the project area. 8.1.2 The project is a priority and consistent with development objectives of the seven participating countries. As designed, the project will enhance sustainable upland rice production and contribute to poverty reduction, food security, import substitution and job creation. The project is in line with the Bank Group strategy for agriculture development and regional integration. The project supports the efforts of the seven West African countries to increase rice production and enhance rural incomes. 8.2 Recommendations 8.2.1 It is recommended that a loan not exceeding UA 20.0 million and an ADF Grant not exceeding UA2.0 million be granted to the seven participating countries which are Benin, Ghana, Gambia, Guinea, Nigeria, Mali, and Sierra Leone and to WARDA to finance the implementation of the project as described in this report subject to the following conditions: (A) Conditions Precedent to Entry into Force of the Loans and the Grant The entry into force of the loans agreements shall be subject to the fulfilment by the Borrower of the provisions of section 5:01 of the General Conditions applicable to loans. The entry into force of the grant agreement shall be subject to the fulfilment by the Recipient of the provisions of section 4:01 of the General Conditions applicable to grants. (B) Conditions Precedent to First Disbursement of the Grant The obligations of the Fund to make the first disbursement of the Grant resources will be conditioned upon entry into force of the Grant Agreement and the fulfilment by the Recipient the following conditions. The Recipient shall have: Provided evidence to the Fund of the establishment of a PSC for the project. (Paragraph 5.2.2). (C) Condition Precedent for the First Disbursement of the Loans: The obligations of the Fund to make the first disbursement of the loan and grant resources will be conditioned upon entry into force of the Loan and Grant Agreement and of the Grant Agreement and the fulfilment by the Borrower of the following conditions. The Borrower shall have:

38

i) Provided evidence satisfactory to the Fund of the establishment of PCUs in each participating country (Paragraph 5.1.1); ii) Provided evidence satisfactory to the Fund of the appointment of M&E Specialist in each participating country whose qualifications and experience shall have received prior approval of the Fund (Paragraph 5.1.1); iii) Provided evidence to the Fund of the establishment of national NERICA Promotion Teams (NPTs) in each participating country (Paragraph 5.2.1)

(D) Other Conditions of the loans

i) At the beginning of each quarter, the Borrower shall ensure that counterpart funds are made available to the project (Paragraph 5.5); ii) The Borrower shall transmit to the Fund Annual Project Work Plans and Disbursement Plans at a date not later than 31 January of each year (Paragraph 5.2.3); iii) Three months after Entry into Force of the Loan Agreement the Borrower shall furnish the Fund with a comprehensive training programme for project stakeholders including targeted farmers, farmer groups, research scientists, extension agents, seed producers, NGOs, CBOs, and other stakeholders as well as a schedule of workshops, seminars, and study tours (Paragraph 4.5.17); iv) Three months after the completion of the mid-term review the Borrower shall implement the recommendations of the mid-term review of the project (Paragraph 5.3.2); v) Six months after completion of each policy review and subsequent policy dialogue workshops, the Borrower shall implement the recommendations of the policy reviews of the project (Paragraph 4.5.14).

39

Annex 1

Map of Project Area

40

Annex 2 Features of NERICA Rice Varieties

The new rice for Africa (NERICA) was developed by WARDA through inter-specific crossing between Asian rice, Oryza sativa and African rice, Oryza glaberrima. This breakthrough has established WARDA's lead role in interspecific hybridization and anther culture for rice. Oryza glaberrima originates in Africa and despite its low yielding characteristics shows numerous positive traits such as resistance to blast, African Rice Gall Midge (AfGM)), rice yellow mottle virus (RYMV), root parasitic weeds, and nematodes. The African rice also has an early vegetative development, good weed competitiveness, early ground cover development, good tolerance to abiotic stresses like salinity, drought and iron toxicity and good cooking qualities. Oryza sativa on the other hand is high yielding. NERICAs combine the high yielding traits from its Asian parent and disease and pest resistance and weed competition and tolerance to environmental stress from its African parent. NERICA rice also has high protein content. Traditional upland rice varieties used by smallholder farmers generally yield on average about 0.3 - 0.5 metric tonnes per ha in the traditional farming (slash and burn) system where no fertilizers are used. In addition, the traditional upland rice varieties mature in 150 to 170 days. While improved semi dwarfs, mature in 120 to 140 days. Weed competition is the most important yield-reducing factor followed by drought, blast, soil acidity and general soil infertility. Farmers traditionally manage these stresses through long periods of bush fallow. High population growth has led to a dramatic reduction in fallow periods and extension of cropping periods, thereby aggravating weed pressure and soil infertility. NERICA varieties mature in 90 to 100 days. This short duration reduces the number of weeding required. In addition, farmers harvest their NERICA rice in August (before the hunger period) when prices are relatively high. Furthermore the short duration allows the farmers to grow another short duration crop such as soya beans, potatoes or vegetables after harvesting the NERICA. Under farmer conditions, where minimal inputs are applied the NERICA varieties have raised the yields of upland rice from less than 0.5 metric tonnes per ha to more than 1.5 metric tonnes per ha. The potential production under farmers’ conditions, is more than 5 metric tonnes per ha, if fertilizer and other inputs are applied. The major labour-intensive activities in rice cropping, including land clearing, weeding and harvesting are carried out by women and children. NERICA varieties have wide, droopy leaves and tend to grow vigorously at seedling and vegetative stages. These characteristics help to smother weeds thereby reducing the requirement for weeding. This in turn reduces the pressure on women and children who are directly involved in these operations. Higher productivity per surface area will reduce clearing of new land. This in turn gives farmers the incentive to use more inputs, intensify land use, and gradually abandon the shifting cultivation practice, thereby improving the sustainability of farming system. Introduction of NERICAs is, therefore, the first step towards stabilization and sustainable intensification of Africa’s fragile uplands. Organoleptic tests carried out in Guinea, Gambia, Sierra Leone, Nigeria and other countries have shown that the taste, aroma and cooking characteristics of NERICA compare favourably with imported rice. Currently the post-harvest handling and processing of the rice in the project participating countries is generally poor and leads to the mixture of sand and rice grain. This in turn skews consumer preference towards imported rice. If care and quality control is maintained during harvest, drying, processing and packaging, there is potential for significant increase in the market share of the locally grown rice. This will of necessity have to be accompanied by awareness campaigns and frequent organoletic tests in order to raise awareness and assure the consumers about the quality, taste, aroma and other characteristics of NERICA.

41

Annex 3 ECONOMIC ANALYSIS

MULTINATIONAL NERICA RICE DISSEMINATION PROJECT

CULCULATION OF ECONOMIC RATE OF RETURN WITH FERTILIZERS APPLIED

Costs UA Million Benefits (UA Million) Project W/Project W/o Proj. Total Total Net Year Investment Recurrent Production Total Product'n Tot. Bene. Benefits Incremental Incremental

& Marketing Costs & Markt'g w/Project w/out Project Benefits Benefits

1 8,822 756 - 9,578 - - - - (9,578)2 5,365 779 158 6,302 845 295 2,107 (1,812) (8,113)3 5,605 810 8,046 14,461 12,312 15,076 30,690 (15,613) (30,075)4 3,852 834 108,592 113,278 23,935 203,465 59,663 143,802 30,524 5 3,683 859 142,212 146,754 29,753 266,458 74,167 192,292 45,538 6 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 7 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 8 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 9 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221

10 2,990 859 142,212 146,061 29,753 266,458 74,167 192,292 46,231 11 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 12 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 13 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 14 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 15 2,990 859 142,212 146,061 29,753 266,458 74,167 192,292 46,231 16 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 17 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 18 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 19 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221 20 0 859 142,212 143,071 29,753 266,458 74,167 192,292 49,221

EIRR 61% Sensitivity Analysis EIRR 61% Production cost up 10% 46% Revenues down 10% 32% Production up 5% & Revenue down 5% 10%

42

Annex 4

Tentative Implementation Schedule

Beginning End Agency Board Approval Loan Negotiations Fulfillment of Loan Conditions Effectiveness of Loan Agreement Launching mission Loan implementation Launch Workshops

July 2003 July 2003 January 2004 March 2004 April 2004 April 2004 April 2004

ADF ADF Borrowers ADF Borrowers Borrowers Borrowers

Organisation and Management Assignment of M&E Specialists Establishment of the Project Steering Committee Recruitment of the NGOs for community mobilization Planning for on-farm Research

March 2004 May 2004

May 2004 May 2004

Borrowers Borrowersand WARDA Borrowers Borrowers

Technology Transfer Production of Basic Seed Production of Foundation Seed PVS (Research) Community Seed Multiplication Programme (CBSS) Demonstration rice processing equipment Organoleptic tests and awareness campaigns

2004 2004 2004 2004 2005 2004

2009 2009 2009 2009 2009 2009

WARDA Research inst PCU/WARDA PCU/WARDA PCU/WARDA PCU/WARDA

Production Support Community Seed Multiplication Programme (CBSS) Sensitisation of project beneficiaries, NGOs, Seed Producres, Rice Processors and Traders PVS (Extension) Rehabilitation and development of feeder roads and other rice marketing infrastructure Policy reviews and dialogue workshops

2004

2004 2004 2004 2004

2009 2009 2009 2009 2009

PCU/WARDA

PCU PCU PCU

Capacity Building Training of Trainers Farmer Training Staff Training Rehabilitation of buildings Provision of office equipment and logistical support Support for HIV/ Aids and Malaria Control

2004 2004 2004 2004 2004 2004

2006 2009 2009 2007 2009 2009

PCU/WARDA PCU/ NGOs PCU PCU PCU/ WARDA PCU

Project Coordination Establish PSC Quarterly reports Audit Mid-term review Project completion report

June 2004 Jan 2005

June 2004 Dec 2009 Dec 2009 Aug 2006 June 2010

WARDA PCU/WARDA PCU/WARDA PCU/WARDA PCU/WADA

43

Annex 5

Provisional List of Goods and Services (LOGS)

NERICA DISSEMINATION PROJECT

PROVISIONNAL LIST OF GOODS AND SERVICES

millions F CFA millions UA Cofinanciers (millions UA) CATEGORIES M.L Dev. Total M.L Dev. Total ADF Loan ADF Grant GVT BEN

WORKS 0.00 3,926.00 3,926.00 0.00 4.81 4.81 4.81 0.00 0.00 0.00Rehabilitation of office building 0.00 858.00 858.00 0.00 1.05 1.05 1.05 0.00 0.00 0.00Spot improvement of feeder road 0.00 2,700.00 2,700.00 0.00 3.31 3.31 3.31 0.00 0.00 0.00

Construction of rice drying floors 0.00 368.00 368.00 0.00 0.45 0.45 0.45 0.00 0.00 0.00 GOODS 802.40 3,430.02 4,232.42 0.98 4.21 5.19 3.33 0.11 0.00 0.00Vehicles 0.00 400.00 400.00 0.00 0.49 0.49 0.47 0.02 0.00 0.00Motorcycles 0.00 194.60 194.60 0.00 0.24 0.24 0.24 0.00 0.00 0.00Computer equipment 0.00 230.36 230.36 0.00 0.28 0.28 0.25 0.04 0.00 0.00Agricultural equipment 337.50 1,062.00 1,399.50 0.41 1.30 1.72 1.72 0.00 0.00 0.00Other equipment 33.60 427.59 461.19 0.04 0.52 0.57 0.52 0.04 0.00 0.00Miscellaneous goods 0.00 119.00 119.00 0.00 0.15 0.15 0.15 0.00 0.00 0.00Seeds supply 431.30 996.48 1,427.78 0.53 1.22 1.75 0.00 0.00 0.00 0.00 SERVICES 110.25 5,045.91 5,156.16 0.14 6.19 6.32 6.06 0.42 0.00 0.00Reviews 0.00 1,019.00 1,019.00 0.00 1.25 1.25 1.11 0.14 0.00 0.00ARI 0.00 228.00 228.00 0.00 0.28 0.28 0.00 0.28 0.00 0.00WARDA 0.00 233.81 233.81 0.00 0.29 0.29 0.44 0.00 0.00 0.00AIDS/Malaria Sensibilisation 0.00 360.00 360.00 0.00 0.44 0.44 0.44 0.00 0.00 0.00Environnemental Mgt 0.00 297.50 297.50 0.00 0.36 0.36 0.36 0.00 0.00 0.00Training 110.25 1,167.00 1,277.25 0.14 1.43 1.57 1.57 0.00 0.00 0.00Extension Services Provider 0.00 1,740.60 1,740.60 0.00 2.13 2.13 2.13 0.00 0.00 0.00 PERSONAL 1,407.00 1,616.00 3,023.00 1.73 1.98 3.71 1.27 0.00 2.44 0.00Personal 1,407.00 1,616.00 3,023.00 1.73 1.98 3.71 1.27 0.00 2.44 0.00 OPERATING 0.00 3,010.82 3,010.82 0.00 3.69 3.69 3.04 0.10 0.55 0.00Operations and maintenance 0.00 3,010.82 3,010.82 0.00 3.69 3.69 3.04 0.10 0.55 0.00 MISCELANEOUS 620.00 387.00 1,007.00 0.76 0.47 1.23 0.47 0.00 0.00 0.76Beneficiaries participation 620.00 387.00 1,007.00 0.76 0.47 1.23 0.47 0.00 0.00 0.76 TOTAL BASELINE COSTS 2,939.65 17,415.75 20,355.40 3.60 21.35 24.96 18.99 0.63 2.99 0.76Physical contingencies (10%) 0.00 332.60 332.60 0.00 0.41 0.41 0.41 0.00 0.00 0.00Price Contingencies (3% ) 240.49 1,381.72 1,622.21 0.29 1.69 1.99 1.46 0.17 0.31 0.05TOTAL COST 3,180.14 19,130.07 22,310.22 3.90 23.46 27.36 20.85 0.80 3.30 0.81

44

Annex 6

ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN SUMMARY

Project Title : Multinational NERICA Rice Dissemination ProjectCountry : Seven West African Countries (Benin, Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone) Department : OCAR

Brief description of the project and key environmental and social components The project will mobilize upland rice growers, whose majority are women, enhance their capacity and empower them to grow more rice, improve their income levels and contribute to import substitution. NERICA rice varieties are high yielding, short duration, weed competitive and high in protein content The major focus of the project activities will be the transfer of technology from WARDA to the upland rice growers. About 400,000 ha of additional land will be put under NERICA rice production by PY5. The project will further support community seed production for the NERICA varieties preferred by the communities. Major environmental and social impacts Potential negative environmental impacts can arise from opening up of more agriculture land. Furthermore, planting of large areas of almost NERICA monoculture can bring about negative environmental consequences, if the NERICA rice varieties become susceptible to strains of rice pests and diseases. In addition, use of pesticides and fungicides to control rice pests and diseases can have negative environmental impact, if not properly done by the rice growers. The project will rehabilitate about 1000 km of key feeder road network in the project area. If not well managed this can bring about negative environmental impacts. Enhancement and mitigation program Sound environmental practices will be integrated in the project design. Various NERICA rice varieties will be introduced into the farming system with a view to enhance both diversity of the genetic base and productivity per unit area. The Community Based Seed Multiplication Programme (CBSS) will be supported by national seed services, research and extension agents to ensure that standards for germination and purity are maintained. Training of beneficiary rice growers, Extension Agents, NGOs and Research Scientists involved in the project will be used as a strategic tool to address the potential negative environmental impacts highlighted above. Training programmes will include pest and disease control, post-harvest management, and environmental management among others. Other mitigating measures will include continuous transfer of knowledge to farmers by extension agents and NGOs and environmentally friendly farming practices such as proper application of fertilizers, manure and appropriate application of agro-chemicals. Spot improvement will consist of filling of potholes, re-grading, gravelling, construction of side drains and/or rehabilitation of small bridges and culverts. The activities will not involve heavy duty machines. In addition, annual maintenance of the roads will be undertaken by the project beneficiaries themselves. Monitoring program and complementary initiatives In each participating country the National Environmental Agencies (NEAs) will support the PCUs in evaluating and monitoring environmental impacts relating to project implementation. The Environmental Agencies will support the PCUs in design and implementation of mitigation strategies. Institutional arrangements and capacity building requirements The project will provide technical support and training throughout the project implementation period. The training and awareness campaigns will be aimed at raising awareness about potential negative impacts and the necessary mitigation measures. Estimated costs The project will allocate a total of UA0.40 million during the project period to cover the cost of services provided by the National Environmental Agencies to assist PCUs in evaluating and monitoring environmental impacts relating to project implementation. The Environmental Agencies will also assist the PCUs in design and implementation of mitigation strategies. In addition, during training costs implemented under the project, environmental modules will be included to ensure that enhanced awareness about environmental concerns by the targeted beneficiaries. Implementation schedule and reporting National Environmental Agencies will support the PCUs in design and implementation of mitigation strategies. The PCU will include an environmental section in every regular progress reports.

45

Annex 7

Project Organization and management

Nationalagricultureresearch

institutions

ExtensionServices

BeninPCU

GambiaPCU

GhanaPCU

GuineaPCU

MaliPCU

NigeriaPCU

S/LeonePCU

WARDA

Project steering committee

Annex

MULTINATIONAL THE NERICA RICE DISSEMINATION PROJECT

EXPLANATORY NOTE

We refer to the Board Resolution Numbers F/ZZZB/2003/39 and F/ZZZB/2003/40 in respect of the NERICA Rice Dissemination Project, which was approved by the ADF Board of Directors on 23 July 2003. The approved Loan Amount is UA20.00 million and the Grant amount is UA2.00 million. The loan is to be sub-divided among the seven beneficiary countries namely; Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone, while the grant is to be shared among the same seven countries and the West Africa Rice Development Association (WARDA). The respective sub-loans and sub-grants as indicated in the appraisal report and in the Board Resolution, referred to above, add up to UA20.01 million for the loan and UA 2.01 million for the Grant as given in the table below:

Country Loan Allocation (UA million) Grant Allocation (UA million) Benin 1.45 0.13 The Gambia 1.56 0.15 Ghana 2.65 0.15 Guinea 3.00 0.14 Mali 2.92 0.15 Nigeria 5.58 0.25 Sierra Leone 2.85 0.15 WARDA 0.00 0.89

Total 20.01 2.01 The additional UA0.01 million in excess of the UA20.00 million for the loan and UA0.01 million in excess of the UA2.00 million for the grant as approved by the Board was due to rounding-off of the sub-loans and sub-grants to two decimal places. We have therefore adjusted the sub-loan and sub-grant allocations per beneficiary country and WARDA as follows:

a) The sub-loan to Nigeria (the largest sub-loan) has been revised to UA5.57 million instead of UA5.58 million;

b) The sub-grant to WARDA (the largest sub-grant) is revised to UA0.88 million instead

of UA0.89 million.

Supprimé : ¶

Supprimé : ¶

Supprimé : per beneficiary country

2

The revisions have been effected on the Capacity Building Component and more specifically the acquisition of office supplies. These revisions will not cause any material or significant deviation from the initial budget provision, as it will be adequately covered by the contingencies. In view of the adjustment of the sub-loan and sub-grant allocations as indicated above, the new allocations are as provided in the table below:

Country Loan Allocation (UA million) Grant Allocation (UA million) Benin 1.45 0.13 The Gambia 1.56 0.15 Ghana 2.65 0.15 Guinea 3.00 0.14 Mali 2.92 0.15 Nigeria 5.57 0.25 Sierra Leone 2.85 0.15 WARDA 0.00 0.88 Total 20.00 2.00

In view of the foregoing, the attached Revised Board Resolution is hereby submitted for the Board’s approval on a Lapse–of–Time Basis. Please note that the loan of UA20.00 million and grant of UA2.00 million remain unchanged.

Supprimé : highlighted

Supprimé : Saut de page

Supprimé : we suggest that a

Supprimé : should be prepared

Supprimé : under

Supprimé : In the proposed Revised Board Resolution, the correct Project Loan and Grant Resources should be provided as highlighted in the table above.

Supprimé : will

AFRICAN DEVELOPMENT FUND

BOARD OF DIRECTORS

Resolution F/BD/2003/[ ]

Adopted on a Lapse-of-time basis, on [ ] 2003

Multinational Project: Loan to Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone to finance part of the foreign currency cost and part of the local currency cost

of the New Rice for Africa (NERICA) Rice Dissemination Project THE BOARD OF DIRECTORS, HAVING REGARD to Articles 1, 2, 11, 12, 14, 15, 16 and 26 of the Agreement Establishing the African Development Fund (the "Fund"), the Appraisal Report contained in document ADF/BD/WP/2003/77 together with the corrigendum thereto contained in Document ADF/BD/WP/2003/77/Corr.1 (collectively, the "Appraisal Report"); HAVING CONSIDERED the Guidelines for the Financing of Multinational Operations approved by the Board of Directors on 5 May 2000; DECIDES as follows: 1 To grant to each of the countries, and in the amounts, specified below, a Loan in the aggregate

amount not exceeding twenty million Units of Account (UA 20,000,000), from the resources of the Fund, to finance part of the foreign currency cost and part of the local currency cost of the NERICA Rice Dissemination Project:

Benin: One million four hundred and fifty thousand Units of Account (UA 1,450,000);

The Gambia: One million five hundred and sixty thousand Units of Account (UA 1,560,000);

Ghana: Two million six hundred and fifty thousand Units of Account (UA 2,650,000);

Guinea: Three million Units of Account (UA 3,000,000);

Mali: Two million nine hundred and twenty thousand Units of Account (UA 2,920,000);

Nigeria: Five million five hundred and seventy thousand Units of Account (UA 5,570,000); and

Sierra Leone: Two million eight hundred and fifty thousand Units of Account (UA 2,850,000);

2 To authorize the President to conclude a Loan Agreement with each of the above-listed

countries, for the specific amounts provided herein, on the terms and conditions specified in the General Conditions Applicable to Loan Agreements and Guarantee Agreements of the Fund, in the Appraisal Report and in particular, the terms and conditions specified hereinbelow, but not before he shall have certified to the Board in writing that there are available to the Fund sufficient resources to enable the Fund to commit the amount of the Loan:

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

2

(i) The duration of the Loan shall be fifty (50) years including a grace period of ten (10) years commencing the date of signature of the Loan Agreement, and during the grace period, only the service charge and the commitment charge shall be payable;

(ii) The Loan shall be amortized over a period of forty (40) years after the expiration of

the grace period, at the rate of one percent (1%) per annum from the 11th to the 20th year inclusive and at the rate of three percent (3%) per annum thereafter, in equal and consecutive semi-annual installments, with the first installment being payable on the first payment date, as provided hereinbelow, immediately following the grace period;

(iii) A service charge at the rate of three-quarters of one percent (0.75%) per annum on

the principal amount disbursed and outstanding shall be paid semi-annually on the payment dates provided hereinbelow;

(iv) A commitment charge at the rate of one-half of one percent (0.50%) per annum on

the undisbursed portion of the Loan shall begin to accrue one hundred and twenty (120) days after the date of signature of the Loan Agreement and shall be paid on the payment dates provided hereinbelow;

(v) The payment dates for the repayment installments, service charge and commitment

charge applicable to each of The Gambia, Guinea, Mali and Nigeria shall be 1st March and 1st September; and

(vi) The payment dates for the repayment installments, service charge and commitment

charge applicable to each of Benin, Ghana and Sierra Leone, shall be 1st April and 1st October;

3 The President may cancel the Loan, if all the Loan Agreements are not signed within one

hundred and eighty (180) days from the date of approval of the Loan;

4 This Resolution replaces Resolution F/ZZZB/2003/39 adopted by this Board on 23 July 2003.

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

AFRICAN DEVELOPMENT FUND

BOARD OF DIRECTORS

Resolution F/BD/2003/[ ]

Adopted on a Lapse-of-time basis, on [ ]

Multinational Project: Grant to the West Africa Rice Development Association (WARDA) to finance part of the foreign currency cost and part of the local currency cost

of the New Rice for Africa (NERICA) Rice Dissemination Project THE BOARD OF DIRECTORS, HAVING REGARD to Articles 1, 2, 11, 12, 14, 15, 16, 19, and 26 of the Agreement Establishing the African Development Fund (the "Fund"), the ADF-IX Lending Policy, the Grant proposal contained in Document ADF/BD/WP/2003/77 together with the corrigendum thereto contained in Document ADF/BD/WP/2003/77/Corr.1, (collectively, the "Proposal"); HAVING CONSIDERED the Guidelines for the Financing of Multinational Operations approved by the Board of Directors on 5 May 2000; DECIDES as follows: 1 To grant to WARDA, from the resources of the Fund, a Grant in an amount not exceeding the equivalent

of two million Units of Account (UA 2,000,000) to finance part of the foreign currency cost and part of the local currency cost of the NERICA Rice Dissemination Project;

2 The Grant shall be allocated for the benefit of WARDA and the recipient countries in the manner

specified below: WARDA: Eight hundred and eighty thousand Units of Account (UA 880,000);

Benin: One hundred and thirty thousand Units of Account (UA 130,000);

The Gambia: One hundred and fifty thousand Units of Account (UA 150,000);

Ghana: One hundred and fifty thousand Units of Account (UA 150,000);

Guinea: One hundred and forty thousand Units of Account (UA 140,000);

Mali: One hundred and fifty thousand Units of Account (UA 150,000);

Nigeria: Two hundred and fifty thousand Units of Account (UA 250,000); and

Sierra Leone: One hundred and fifty thousand Units of Account (UA 150,000);

3 To authorize the President to conclude with WARDA, a Protocol of Agreement, for the aggregate

amount of the Grant, under the terms and conditions specified in the General Conditions Applicable to Protocols of Agreement, and in the Proposal, but not before he shall have certified to the Board in writing that there are available to the Fund sufficient resources to enable the Fund to commit the amount of the Grant;

4 The President may cancel the Grant, if the Protocol of Agreement is not signed within one hundred and

eighty (180) days from the date of approval of the Grant; 5 This Resolution replaces Resolution F/ZZZB/2003/39 adopted by this Board on 23 July 2003.

Supprimé : 2¶

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Supprimé : ¶

Annex

MULTINATIONAL THE NERICA RICE DISSEMINATION PROJECT

EXPLANATORY NOTE

We refer to the Board Resolution Numbers F/ZZZB/2003/39 and F/ZZZB/2003/40 in respect of the NERICA Rice Dissemination Project, which was approved by the ADF Board of Directors on 23 July 2003. The approved Loan Amount is UA20.00 million and the Grant amount is UA2.00 million. The loan is to be sub-divided among the seven beneficiary countries namely; Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone, while the grant is to be shared among the same seven countries and the West Africa Rice Development Association (WARDA). The respective sub-loans and sub-grants as indicated in the appraisal report and in the Board Resolution, referred to above, add up to UA20.01 million for the loan and UA 2.01 million for the Grant as given in the table below:

Country Loan Allocation (UA million) Grant Allocation (UA million) Benin 1.45 0.13 The Gambia 1.56 0.15 Ghana 2.65 0.15 Guinea 3.00 0.14 Mali 2.92 0.15 Nigeria 5.58 0.25 Sierra Leone 2.85 0.15 WARDA 0.00 0.89

Total 20.01 2.01 The additional UA0.01 million in excess of the UA20.00 million for the loan and UA0.01 million in excess of the UA2.00 million for the grant as approved by the Board was due to rounding-off of the sub-loans and sub-grants to two decimal places. We have therefore adjusted the sub-loan and sub-grant allocations per beneficiary country and WARDA as follows:

a) The sub-loan to Nigeria (the largest sub-loan) has been revised to UA5.57 million instead of UA5.58 million;

b) The sub-grant to WARDA (the largest sub-grant) is revised to UA0.88 million instead

of UA0.89 million.

Supprimé : ¶

Supprimé : ¶

Supprimé : per beneficiary country

2

The revisions have been effected on the Capacity Building Component and more specifically the acquisition of office supplies. These revisions will not cause any material or significant deviation from the initial budget provision, as it will be adequately covered by the contingencies. In view of the adjustment of the sub-loan and sub-grant allocations as indicated above, the new allocations are as provided in the table below:

Country Loan Allocation (UA million) Grant Allocation (UA million) Benin 1.45 0.13 The Gambia 1.56 0.15 Ghana 2.65 0.15 Guinea 3.00 0.14 Mali 2.92 0.15 Nigeria 5.57 0.25 Sierra Leone 2.85 0.15 WARDA 0.00 0.88 Total 20.00 2.00

In view of the foregoing, the attached Revised Board Resolution is hereby submitted for the Board’s approval on a Lapse–of–Time Basis. Please note that the loan of UA20.00 million and grant of UA2.00 million remain unchanged.

Supprimé : highlighted

Supprimé : Saut de page

Supprimé : we suggest that a

Supprimé : should be prepared

Supprimé : under

Supprimé : In the proposed Revised Board Resolution, the correct Project Loan and Grant Resources should be provided as highlighted in the table above.

Supprimé : will

AFRICAN DEVELOPMENT FUND

BOARD OF DIRECTORS

Resolution F/ZZZB/2003/59

Adopted on a Lapse-of-time basis, on 26 September 2003

Multinational Project: Loan to Benin, The Gambia, Ghana, Guinea, Mali, Nigeria and Sierra Leone to finance part of the foreign currency cost and part of the local currency cost

of the New Rice for Africa (NERICA) Rice Dissemination Project THE BOARD OF DIRECTORS, HAVING REGARD to Articles 1, 2, 11, 12, 14, 15, 16 and 26 of the Agreement Establishing the African Development Fund (the "Fund"), the Appraisal Report contained in document ADF/BD/WP/2003/77 together with the corrigendum thereto contained in Document ADF/BD/WP/2003/77/Corr.1 (collectively, the "Appraisal Report"); HAVING CONSIDERED the Guidelines for the Financing of Multinational Operations approved by the Board of Directors on 5 May 2000; DECIDES as follows: 1 To grant to each of the countries, and in the amounts, specified below, a Loan in the aggregate

amount not exceeding twenty million Units of Account (UA 20,000,000), from the resources of the Fund, to finance part of the foreign currency cost and part of the local currency cost of the NERICA Rice Dissemination Project:

Benin: One million four hundred and fifty thousand Units of Account (UA 1,450,000);

The Gambia: One million five hundred and sixty thousand Units of Account (UA 1,560,000);

Ghana: Two million six hundred and fifty thousand Units of Account (UA 2,650,000);

Guinea: Three million Units of Account (UA 3,000,000);

Mali: Two million nine hundred and twenty thousand Units of Account (UA 2,920,000);

Nigeria: Five million five hundred and seventy thousand Units of Account (UA 5,570,000); and

Sierra Leone: Two million eight hundred and fifty thousand Units of Account (UA 2,850,000);

2 To authorize the President to conclude a Loan Agreement with each of the above-listed

countries, for the specific amounts provided herein, on the terms and conditions specified in the General Conditions Applicable to Loan Agreements and Guarantee Agreements of the Fund, in the Appraisal Report and in particular, the terms and conditions specified hereinbelow, but not before he shall have certified to the Board in writing that there are available to the Fund sufficient resources to enable the Fund to commit the amount of the Loan:

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

2

(i) The duration of the Loan shall be fifty (50) years including a grace period of ten (10) years commencing the date of signature of the Loan Agreement, and during the grace period, only the service charge and the commitment charge shall be payable;

(ii) The Loan shall be amortized over a period of forty (40) years after the expiration of

the grace period, at the rate of one percent (1%) per annum from the 11th to the 20th year inclusive and at the rate of three percent (3%) per annum thereafter, in equal and consecutive semi-annual installments, with the first installment being payable on the first payment date, as provided hereinbelow, immediately following the grace period;

(iii) A service charge at the rate of three-quarters of one percent (0.75%) per annum on

the principal amount disbursed and outstanding shall be paid semi-annually on the payment dates provided hereinbelow;

(iv) A commitment charge at the rate of one-half of one percent (0.50%) per annum on

the undisbursed portion of the Loan shall begin to accrue one hundred and twenty (120) days after the date of signature of the Loan Agreement and shall be paid on the payment dates provided hereinbelow;

(v) The payment dates for the repayment installments, service charge and commitment

charge applicable to each of The Gambia, Guinea, Mali and Nigeria shall be 1st March and 1st September; and

(vi) The payment dates for the repayment installments, service charge and commitment

charge applicable to each of Benin, Ghana and Sierra Leone, shall be 1st April and 1st October;

3 The President may cancel the Loan, if all the Loan Agreements are not signed within one

hundred and eighty (180) days from the date of approval of the Loan;

4 This Resolution replaces Resolution F/ZZZB/2003/39 adopted by this Board on 23 July 2003.

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

AFRICAN DEVELOPMENT FUND

BOARD OF DIRECTORS

Resolution F/ZZZB/2003/60

Adopted on a Lapse-of-time basis, on 26 September 2003

Multinational Project: Grant to the West Africa Rice Development Association (WARDA) to finance part of the foreign currency cost and part of the local currency cost

of the New Rice for Africa (NERICA) Rice Dissemination Project THE BOARD OF DIRECTORS, HAVING REGARD to Articles 1, 2, 11, 12, 14, 15, 16, 19, and 26 of the Agreement Establishing the African Development Fund (the "Fund"), the ADF-IX Lending Policy, the Grant proposal contained in Document ADF/BD/WP/2003/77 together with the corrigendum thereto contained in Document ADF/BD/WP/2003/77/Corr.1, (collectively, the "Proposal"); HAVING CONSIDERED the Guidelines for the Financing of Multinational Operations approved by the Board of Directors on 5 May 2000; DECIDES as follows: 1 To grant to WARDA, from the resources of the Fund, a Grant in an amount not exceeding the equivalent

of two million Units of Account (UA 2,000,000) to finance part of the foreign currency cost and part of the local currency cost of the NERICA Rice Dissemination Project;

2 The Grant shall be allocated for the benefit of WARDA and the recipient countries in the manner

specified below: WARDA: Eight hundred and eighty thousand Units of Account (UA 880,000);

Benin: One hundred and thirty thousand Units of Account (UA 130,000);

The Gambia: One hundred and fifty thousand Units of Account (UA 150,000);

Ghana: One hundred and fifty thousand Units of Account (UA 150,000);

Guinea: One hundred and forty thousand Units of Account (UA 140,000);

Mali: One hundred and fifty thousand Units of Account (UA 150,000);

Nigeria: Two hundred and fifty thousand Units of Account (UA 250,000); and

Sierra Leone: One hundred and fifty thousand Units of Account (UA 150,000);

3 To authorize the President to conclude with WARDA, a Protocol of Agreement, for the aggregate

amount of the Grant, under the terms and conditions specified in the General Conditions Applicable to Protocols of Agreement, and in the Proposal, but not before he shall have certified to the Board in writing that there are available to the Fund sufficient resources to enable the Fund to commit the amount of the Grant;

4 The President may cancel the Grant, if the Protocol of Agreement is not signed within one hundred and

eighty (180) days from the date of approval of the Grant; 5 This Resolution replaces Resolution F/ZZZB/2003/39 adopted by this Board on 23 July 2003.

Supprimé : 2¶

Mis en forme

Mis en forme

Mis en forme

Mis en forme

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Mise en forme : Puces etnuméros

Supprimé : ¶