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Report No.

11947-MOR

STAFF APPRAISAL REPORT

KINGDOMOF MOROCCO

iRRIGATED AREAS AGRICULTURAL SERVICES PROJECT

NOVEMBER23,

1993

Middle East and North Africa Region Maghreb and Iran Department Agriculture Operations Division

This documenthas a restricteddistributionand may be usedby recipientsonly in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

CURRENCY EQJIVALENT Currency Unit USS1.00 DH1.00

= = =

Moroccan Dirham (DH) DH 9.0 USSO.111 WEIGHTS AND MEASURES

The metric system is used throughoutthis report GLOSSARY OF ADEVIATIONS ASIL CMV CRA CREPA DDA DE DERD DER DPAE DPV ENA FDA IAV INRA LSI LSII-2 MAMVA OP ORMVA SPA SPV SVOP SEMVA SMSI WUA

AgriculturalSector InvestmentLoan Prit aux investissementsdans le secteur agricole DevelopmentCenter Centre de mise en valeur Land Reform Cooperative Cooperativede la r6forme agraire Regional Center of Upgradingof AgriculturalSkills Centre regional de perfectionnementagricole Departmentof AgriculturalDevelopment D6partementdu developpementagricole LivestockDepartment Direction de l'6levage DepartmentEducation,Research and Development Direction de l'Enseignement, de la Rechercheet du Developpement Departmentof Rural Engineering Direction du Genie Rural Departmentof PLanning and Economic Affairs Direction de La Planificationet des Affaires Economiques Departmentof Crop Production Direction de ta ProductionV6g6tale National School of Agricultural EcoLe Nationalede l'Agriculture AgriculturalDevelopmentFund Fond de devetoppementagricole Agriculturaland VeterinarianInstitute InstitutAgronomiqueet VeterinaireHassan 11 National Instituteof AgriculturalResearch Institut Nationalde La RechercheAgronomique Large Scale Irrigation Grande irrigation Second Large Scale IrrigationImprovementProject Deuxieme projet d'ameliorationde ta grande irrigation Ministry of Agricultureand AgriculturalDevelopment Minist6re de L'agricultureet de La mise en valeur agricole Farmers' organizations OrganisationsProfessionnelles RegionalAuthority for AgriculturalDevelopment Office Regional de Mise en Valeur Agricole LivestockService Service de La ProductionAnimale Crop ProductionService Service de La ProductionV6g6tale Extensionand Farmers'OrganizationsService Service de ta Vulgarisationet des OrganisationsProfessionnelles Experimentaland AgriculturalDevelopmentStation Station Exp6rimentaleet de Mise en Valeur Agricole Small and Medium Scale Irrigation Petite et moyenne hydraulique Water User's Association Associationdes usagers des eaux agricoles

FISCALYEAR January 1 to December 31

FOR OFFICIAL USE ONLY KINGDOM OF MOROCCO IRRIGATEDAREAS AGRICULTURALSERVICES PROJECT Loan and Project Summary Borrower:

Kingdomof Morocco

Amount:

US$25 millionequivalent

Terms:

20 years, including5 years grace, at the Bank's standard variable interest rate.

ExecutingAgencies:

Directorateof Education,Researchand Developmentand the nine RegionalAgricultural DevelopmentAuthorities(ORMVA),under the Ministryof Agricultureand Agricultural Development.

Project Obiectives:

The project objectiveswould be: to raise agriculturalproductionand farmers' incomes in the irrigatedareas with specialeffortsto reach womenwho are mainly responsiblefor livestockmanagement;to improvethe operatingefficiencyof the ORMVAs'agricultural services; to promote commodityand service orientatedfarmer organizationsto take on developmentresponsibilities;and to involvethe universityteaching/researchstaff in field extensionand research.

ProiectDescription:

The project would include: (a) the transfer of technologyincluding the strengtheningof adaptiveresearch, agriculturalextensionand womens' programswith provisionfor staff training, infrastructure,vehicles and equipment,the contractingout of some extension and researchactivities,technicalassistanceand incrementaloperatingcosts; (b)provision of supporting services to farmers including soils and plant analysis, pest and disease warning system, and testing/demonstrationof small equipment; (c) the promotionof farmers' organizations with provision for technical assistance, training and initial investments;(d) monitoringand evaluationof agriculturaldevelopmentin the irrigated areas; and (e) studies. The project would complement,and be implementedin parallel with the Second Large Scale Irrigation Project (Ln. 3587-MOR) which finances rehabilitation of the network and the improvement of the ORMVAs' public utility function for water distribution.

Benefits:

The project would be expectedto havea substantialimpacton agriculturalproductionin the irrigatedand adjacentrainfed areas complementingefforts to be made under LS112 to better managewater resources. Some 125,000farm families with land in the areas under modern, large scale irrigationwould benefit directly as would at least a further 75,000 familieswith rainfed land. Beneficiarieswould include the many small farmers on the irrigation schemes (over 60% have less than 2 ha) and the women who are responsiblefor livestockmanagement.

Risks:

The main risks stem from the difficultyof changingan existingorganization,farmers' slow adoption of some new technology and the Government's capacity to assure continuity of funding. To counter these risks the project first provides for the reorganizationof ORMVAs'servicesto be implementedprior to investments,for the updating of the skills gap analysis prior to redeployingstaff, as well as for considerable staff training;second, the project providesfor diagnosticstudiesto better identify

This document has a restricteddistributionand may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bank authorization.

farmers' real constraints and the points at which research should be focussed - also there are a number of on-going initiatives to tackle land tenure constraints which will be supported by the planned ASIL2; and finally the efforts to improve the efficiency of ORMVAs' services as well as to gradually transfer certain responsibilities to farmer organizations, should help resolve the budget constraint over time. Estimated Proiect Costs Local

Foreign

Total

-------------

(US$ million)

----------------

Constructions & civil works

0.7

0.4

1.1

Vehicles & equipment

3.1

4.4

7.5

Training, technical assistance & studies

5.4

4.4

9.8

Incremental operating costs

9.0

2.3

11.3

18.2

11.5

29.7

Physical Contingencies

0.4

0.6

1.0

Price Contingencies

3.0

1.0

4.0

Total Project Costs a/21.6 a/ Including US$4.4 million of taxes and duties

13.1

34.7

Total Base Costs

Financing Plan Local

-------------World Bank

11.9

Government

5.3

Net Project Costs

17.2

Taxes and Duties

4.4

Total Project Costs

21.6

Total

Foreign

ZUS$ million ---13.1

25.0 5.3

13.1

30.3 4.4

13.1

34.7

Estimated Disbursement (US$ million)

Annual Cumulative

IBRD

Fiscal

Year

1994

1995

1996

1997

1998

1999

2000

2001

1.5

1.8

4.6

6.0

5.8

3.2

1.5

0.6

3.3

7.9

13.9

19.7

22.9

24.4

25.0

Economic Rate of Return: N/A MaR No.: IBRD 24899

Poverty Category: N.A. (indirect impact)

-

iii

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STAFF APPRAISAL REPORT KINGDOM OF MOROCCO IRRIGATED AREAS AGRICULTURAL SERVICES PROJECT Table of Contents Page No. I.

PROJECT AND SECTOR BACKGROUND .......................... A. Project Background ........................................... B. The Agricultural Sector . ...................................... C. Bank Support for Moroccan Agriculture .............................

I 1 2 4

H.

AGRICULTURAL PRODUCTION AND SERVICES IN THE IRRIGATED AREAS A. The Irrigated Areas .......................................... B. Agricultural Production . ...................................... C. Agricultural Services ......................................... D. Increasing Role for the Private Sector ......... ..................... E. Strategy for Intervention . ......................................

6

10 12

THE PROJECT .............................................. A. Project Origin and Rationale .......... .......................... B. Project Objectives and Summary Description .......................... C. Detailed Features ............................................ D. Cost Estimates ............................................. E. Financing ................................................ F. Procurement .............................................. G. Disbursements .............................................

12 12 13 14 21 22 23 25

IV.

PROJECT IMPLEMENTATION .................................. A. Project Organization . ........................................ B. Organization of Agricultural Services ............................... C. Supervision and Mid-Term Review ................................ D. Accounts and Audit ...........................................

26 26 27 29 29

V.

PROJECT IMPACT ........................................... A. Project Benefits ............................................. B. Impact on Recurrent Costs .......... ........................... C. Cost Recovery . ............................................ D. Environmental Impact . ........................................ E. Risks .................................................

30 30 30 31 31 31

VI.

AGREEMENTS REACHED AND RECOMMENDATIONS

32

I.

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

6 7 8

This report is based on the findings of an appraisal mission which visited Morocco in February 1993, comprising Messrs. J. Cole, (Task Manager), W. Zijp (Extension Specialist) and F-D Migeon (Financial Analyst), A. Bouchitte (Consultant - Agricultural Economist) and J. Grolleau (Consultant - Horticulturist). Ms. H. Lackner (Consultant - Sociologist) also participated in the preappraisal mission in October 1992. The peer reviewer is Mr. Hosnich (EC4NR). The Division Chief is Mr. Odin Knudsen (MN1AG) and the Acting Country Department Director is Mr. Mahmood Ayub (MN1DR).

-

iv

-

Page No. In-text Tables Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6

Project Cost Summary ................................... Price Contingencies ..................................... Project Financing Plan ................................... Summary of Proposed Procurement Arrangements .................. Disbursement Schedule ................................... Disbursement Categories ..................................

22 22 23 24 25 26

Agricultural Production and Potential in the Irrigated Areas ........... .................... Adaptive Research and Supporting Services ...................... Extension Services ..................................... Womens' Program ..................................... Farmers' Organizations .................................. Staff and Farmer Training Program ........................... Project Costs ......................................... Disbursement Schedule ................................... Monitoring and Evaluation Indices ........................... Implementation Schedule ................................. Supervision Plan ....................................... Selected Documents in Project File ...........................

34 45 52 62 67 79 83 87 88 90 91 92

Annexes Annex I Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7 Annex 8 Annex 9 Annex i0 Annex 11 Annex 12 Charts Chart 1

Organization of the Agricultural Sector

Chart 2

Organizationof ORMVAAgriculturalServices

Map No:

IBRD 24899

Implementation Volume Working Paper no. 1 Working Paper Working Paper Working Paper Working Paper MA:cde\idsps\sr\I1

no. no. no. no.

2 3 4 5

Production Agricole, Recherche Adaptative et Actions d'Appui Vulgarisation Agricole Animation Feminine Organisations Professionnelles Cost Tables

STAFF APPRAISAL REPORT KINGDOM OF MOROCCO IRRIGATED AREAS AGRICULTURAL SERVICES PROJECT I. PROJECT AND SECTOR BACKGROUND

A. Project Background

1.01 This project forms one elementof a coordinatedlending programwhich the Bank is pursuing in support of large scale irrigation(LSI) in Morocco. The project would raise the productivityof LSI farming operationsthrough increasedtransfer of technologyand supportto service cooperativesand farmer organizations.In parallel, the secondLarge Scale Irrigation ImprovementProject (LSII2), which was approvedby the Board March 30, 1993, covers network rehabilitation,efficiencyand sustainabilityof the public utilityfunctionof the RegionalAgriculturalDevelopmentAuthorities (ORMVA),on-farm water managementtechniquesand environmentalprotection.An on-going AgriculturalSectorInvestmentLoan supportsrainfed agriculturalinvestmentsand the improvementof public resourcemanagement. 1.02 As detailed in the recent Country AssistanceStrategy(see Report No. P-6114-MOR),Bank strategy in Morocco stressesthe need to improvepublic sector management,foster private sector development,enhance environmentaland water resourcemanagement,alleviatepoverty and increase the outward orientationof the economy,in addition to consolidatingmacroeconomicadjustmentand reform. The proposedproject in improvingthe organizationand efficiencyof the ORMVAs' agriculturalserviceswould contributeto the sustainedimprovementsin public managementwhile benefittingboth productivityand soil and water management. Private sector developmentwould be directlyserved by the developmentof farmers' organizations. The project would also reduce poverty by raisingthe income of small farms and benefit women directlybecauseof the importantrole they play on farms (particularlyon the smaller farms and in livestockmanagement). The reduction of povertyand the direct involvementof women in developmentactions are importantplanks in Government'sstrategy for interventionin the sector. Althoughthe irrigatedareas are relativelywellendowedcomparedwith those areas which rely entirely on rainfall, there are many familieswho can not subsiston their farm income. To the extent that the project can transfer improvedtechnologyto these families,it would make a significantcontributionto poverty reduction. Moreover, becauseof the importanceof women on farms in the irrigated areas, they would benefit directly from the project. 1.03 The success of Government'snationalprogram' for LSI expansionand rehabilitationis dependentupon progress toward the OMRVAs' financialself-sufficiencythrough cost-effectiveO&M, improvedwater-useefficiencyand, above all, increasedcost recovery. If farmers are to use water more efficientlyand obtain the increase in yields and croppingintensityrequired for them to be able, over time, to pay the full cost of water, higherproductivitythrough adoptionof improvedtechnology

1/

The eight-yearprogram 1993-2000,includes250,000 ha of new areas and 200,000 ha of rehabilitation.

-2will be required. The ORMVAs' agriculturalserviceswould play an importantrole in the developmentand transfer of the necessarytechnology. But, if these servicesare to be sustainable within existingbudgetlimitations,not only must the existing private sector networkbe exploited,but its expansionactivelypromoted. 1.04 The Large Scale IrrigationImprovementProject (LSII1), approvedin 1986, shiftedthe emphasisfrom straightsupport for new investmentsto improvingthe performanceof the existing irrigationnetworkby emphasizingrehabilitationand the reform of the institutionssupportingthe system. It also began improvingthe transfer of technologyby strengtheningthe agriculturalservices. The proposedIrrigated Areas AgriculturalServices(IAASP)project wouldbuild on the results of this first project on supportservices whilethe second project, the LSII2, will continue with the program of rehabilitation. The separationof services from the LSII2 project recognizesthe importanceof focusing more emphasison technologyadaptationand extension. 1.05 A joint Bank and FAO/CP mission, in October 1991, identifiedthe project which was subsequentlyprepared by the Ministry of Agricultureand AgriculturalDevelopmentwith the help of a FAO/CP mission in March 1992. The project was preappraisedin October 1992 and appraisedin February 1993. B. The AgriculturalSector Physicaland EconomicSetting. 1.06 The agriculturalsector is a critical componentof the Government'seconomicand social strategy. Althoughagriculturecontributesonly 16% of Morocco's GDP, it provides employmentto 40% of the labor force and generates 30% of export earnings. Food crops are the largest subsector, contributingabout60% of the gross value of agriculturalproduction. Cereals accountfor nearly 80% of the harvestedarea and 33% of the gross value of production. 1.07 Moroccohas 28 millionha of agriculturalland, of which only 9.2 millionha are cultivable; half of this area receives sufficientbut inconsistentrainfall. Irrigation is practicedthroughoutthe countryand the 1.3 millionha (500,000ha LSI and 800,000 SMSI) now irrigatedcover about 80% of the potentiallyirrigable area. Moroccanagricultureis dualistic. Its relativelyprosperousareas use modem technologyto producefood, industrialand export crops while poorer areas practice traditional agriculturein which cereals and pulses dominate. 1.08 While agriculturalgrowth was slow in the 1970s,averaging2.4% p.a. in real terms, it rose to an average 8.2% annual real rate between 1981and 1991 despiteseveral drought years. This reflects the growing impactof irrigation,good rainfallin the non-droughtyears, the uptake of improved technologyand improvedproducerprices for cereals. This growth in output has been accompanied by increasesin agriculturalexports (3.2% p.a. in real terms between 1981 and 1991)and reductions in food importswhich fell steadily from 17% of total imports in 1984to 8.6% in 1991. Public investmentin agricultureis channeledthrough the Ministry of Agricultureand Agricultural Development(MAMVA),accountingfor 16%of total public investment. About 55% of public agriculturalinvestmentwas allocatedto irrigation,mainly LSI (excludingdams). Althoughpublic investmentfell in real terms by 3.2% p.a. between 1981and 1991, total investmentin the sector (publicand private) grew by an average of 4.4% indicatingthe extraordinaryperformanceof private sector investments.

-3 GovernmentObjectivesand Strategy 1.09 The Government'sobjectivesin the early 1980swere shaped by the urgent economic circumstancesin which it found itself. Faced with increasingeconomicdisequilibriain the internal and externalaccounts,the Governmentsought to: (i) reduce fiscal and balance of paymentsdeficits; and (ii) increaseproductivityby reformingthe underlyingstructure of key economicand social sectors. In 1984, as part of its adjustmentstrategy, the Governmentlaunchedthe Medium-Term AgriculturalSector AdjustmentProgram (MTASAP)to liberalizeagricultureand food prices, reduce subsidiesand restructurepublic expenditurein the sector. MTASAPhas been largely implementedin the area of global sectoral policies. However, further deepeningand strengtheningof reforms are needed. The Governmenthas also initiated a long-termprogramto restructurepublic enterprises across the economy, includingin the agriculturalsector, that is being followedby a comprehensive privatizationprogram. 1.10 Despitethe achievementsof the MTASAP,challengesremain. The ability of farmers to respondto changingcircumstancesis weak due to limited informationabout technicaloptions, lack of capital and poor accessto support services. An ability to adapt to new conditionswill be necessaryas Moroccofaces integrationinto the EC. Furthermore, the quality of the natural resource base is deterioratingand water resources are becomingscarce; developmentefforts need to focus on making better use of natural resources, particularlywater since shortagesby the early 2000s threaten to hamper further development. 1.11 In order to addressthese challenges,the Government'sstrategy for the agricultural sector includes:(i) increasingsector efficiency,flexibilityand growth by raising productivity,expandingthe abilityof farmersto respondto changingmarkets and reducingrisk; (ii) assuringenvironmental protectionby maintaining,protectingand developingthe natural resourcebase; (iii) reducingpoverty by expandingincome generatingopportunitiesin rural areas; and (iv) redefiningthe role of Governmentby increasedrelianceon the private sector and strengthenedpublic administration through greater accountability,decentralizationand increasedefficiency. In support of these objectives,Governmentwould: (a) continuethe programof deregulationand liberalizationof domesticmarkets; (b) reduce and diversifyrisks in the sector through promotingmore effectiveuse of irrigation,improvedcrop varietiesetc.; (c) enhancefarmer responsivenessto changingconditions through looseningrestrictionson croppingpatternsand greater accessto services; (d) increaseprivate investmentthrough further trade and market liberalization;(e) encouragemore rationaluse of water and other natural resources; and (f) select public investmentsagainst more demandingeconomicand environmentalcriteria. 1.12 The proposedproject is in conformitywith this strategy as it would: (i) assist farmersto raise productivityand diversifytheir cropping, (ii) support a more efficientuse of water, fertilizer and crop protectionchemicals,(iii) raise the earning potentialof small farms, and (iv) rationalizeORMVAs' agriculturalservices whilepromotingfarmers' organizationsto take on developmentresponsibilities.

C. Bank Support for Moroccan Agriculture Lending Program

1.13 Bank Group lendingto Morocco began in 1965. To date, 103 loans and credits have been made totallingUS$6,025 million. In agriculture,29 loans and credits have been made totalling US$1,770 million,or 29% of total lending. Twenty-twoof these projectshave been completedand seven are being implemented. These include eight irrigationprojects, Sidi Slimane(FY65), Sebou (FY70), Souss Groundwater(FY75), DoukkalaI (FY76), and II (FY77), Small & MediumScale Irrigation I (FY83), all completed,Small & MediumScale Irrigation II (FY88), Large Scale Irrigation ImprovementProject I (FY86) and II (FY93);eight agriculturalcredit projects (FY66, FY73, FY77, FY79, FY84, FY86 all completed,FY89 and FY94), five rainfed agriculturaldevelopmentprojects in Meknes (FY75), Loukkos(FY80), Fes-Karia-Tissa(FY79), MiddleAtlas (FY82) and Oulmes Rommani(FY83) all completed;an agro-industrialand flood controlproject, Sebou II (FY74 completed);a vegetableand marketingproject (FY80completed);two forestry projects (FY82 completedand FY90); an agriculturalresearch and extensionproject (FY 89); two agriculturalsector adjustmentloans (FY86 & FY88, both completed);and an agriculturalsector investmentloan (FY 91). Project Performance

1.14 Bank-financedprojects in agriculturehave largely been successful. Performanceof irrigation projects has been satisfactoryalthoughproblemsof land distributionand organizationaldelays in constructionand in procurementof irrigationequipmentneed to be overcome. The Project PerformanceAudit Report (PPAR)for the SebouI Project (Loan 643-MOR)stressesthe project's successin institutionbuilding and in contributingto increasingcrop production. The PPAR of Sebou 11(Loan 1018-MOR)notes that the project was successfulin introducingcommercialsugarcane productionand processingbut stresses the vulnerabilityof investmentsin commoditieslike sugar which are subjectto wide price fluctuations. An OED Impact EvaluationReport for DoukkalaI and 11projects (Loans 1211-and 1416-MOR)concludedthat the projects complementedwell Government'sobjectivesof investingin large scale irrigationto enhancedomestic food selfsufficiency,boost export earningsand expand rural employmentopportunities. The PPAR of the Souss GroundwaterProject (Loan 1123-MOR)stressesthe successfulprivate land consolidationand public land distributionand cooperatives'establishmentbut highlightsthe neglectof maintenancedue to inadequatefundingand staff. This problemhas been addressedby the Large Scale Irrigation ImprovementProject (Loan2656-MOR),which began a process of makingthe LSI subsectormore efficient,cost-effectiveand sustainable. The project has been successful in rehabilitating infrastructure,increasingwater charge collectionrates and beginningthe disengagementof commercialactivitiesto the private sector. While the project demonstratedthe strong technical capacityof the ORMVAsas executingagencies, it also showedthat institutionalweaknesseswere deeper and more widespreadthan anticipated. Improvementsin managementand institutional arrangementshave been slower than expectedbut are being continuedunder the second irrigation project.

1.15 Performanceof the five agriculturalcredit projects has been good and the PPARsstress the contributionmade to the country's agriculturaldevelopmentby the successfulexpansionof credit to small farmers. In the rainfed sector, the rural developmentprojects results have been mixed. The first project (Meknes, Credit 555-MOR)experiencedconsiderabledelays due to land redistribution problems,insufficientproject preparation,optimisticimplementationtargets and management inexperience. The followingfour projects, Fes-Karia-Tissa,Loukkos, Middle Atlas and Oulmes Rommani(Loans 1602, 1848, 2082 and 2217-MOR)were designedto minimizesuch organizational and managementproblemsand were concludedsatisfactorilyexcept that the completiondates were considerablyextendeddue to delays arising from the general financialcrisis which Morocco experiencedin the 1980s. Technicallythe implementationof first forestry project, Gharb-Mamora (Loan 2110-MOR),was successfulbut it also suffereddelays due to budgetary shortfallsarisingfrom the financialcrisis. 1.16 Implementationof the agriculturalresearch and extensionproject (Loan 3036-MOR)is proceedingsatisfactorilyalthoughdisbursementshave been delayed by budget shortfallsand the time taken to effect certain institutionalchanges. The project, which covers primarily the rainfed areas, also includesfinancingfor testing extensionapproachesin the irrigated areas (19 pilot Extension Centers in six ORMVAare covered). This followedthe creationof an agriculturalextensionservice in the ORMVAsas part of the institutionalchanges implementedunder the first Large Scale Irrigation ImprovementProject. LessonsLearned 1.17 The main lessonslearned in support of irrigationdevelopmentover 28 years as well as from more recent experiencein the supportfor agriculturalresearch and extensionservicesare the need for a better organizationof services, for a more participatoryapproachin formulatingprograms, for raisingfarm incomes, for recognizingbudgetaryrestrictionsin implementationand for project simplification. The proposedproject has taken into accountthese lessons. First, the reorganization of agriculturalservices in the ORMVA(so as to make best use of the scarce human resources availablein the field) would be carried out prior to further investments. Thus, key steps in the reorganizationof four ORMVAsto be implementedduring the start-upof LSII2 were completedprior to negotiationsof the proposed project (para. 4.05), while activitiesin the five other ORMVAswould be limitedto studies and training until they are also reorganized. Second, extensionwouldnot be operatedas a top-downpurveyor of messagesto a recipientfarming population;rather it wouldfocus on identifyingthe real needs. A thoroughdiagnosisof farmers' needs would be conductedprior to planningresearch and extensionprograms (para. 3.13). Third, to enable farmers to meet the rising cost of water and for the state to obtain a satisfactoryreturn on the investmentsin LSI, field efficiencieswould be increasedand crops diversified in intensifyingagriculture(para. 3.09). Fourth, given budget restrictions,the continueddivestitureof servicestowardsthe private sector should be pursued. This is also in the interestsof developingresponsiveservices, which is one of the objectives of the componentfor the promotionof farmers' organizations(para. 3.35). Finally, as experience with LSII1 showedthe need for simplification,support for agriculturalserviceswould be provided under a separateproject from LSII2, as is being done under the proposedproject (para. 3.02).

-6II. AGRICULTURALPRODUCTIONAND SERVICESIN THE IRRIGATEDAREAS A. The IrrigatedAreas 2.01 Background.Morocco's farmers have traditionallyused irrigationto compensatefor low and inconsistentrainfall, bringing 800,000ha under small scale systems. Sincethe 1960s,Moroccohas made modern,large scale irrigation(LSI) the centerpieceof its agriculturaldevelopmentand has rapidlybuilt or modernizednearly 500,000 ha. In additionto boosting food production, this strategy has also increasedrural employment,promoted agroindustryand helped stabilizedomesticproduction. It has also raised productivitysignificantlyby bringingmodern agricultureto more than 100,000 poor, small farm families,and, in several areas, has slowedthe flow of people from rural to urban areas whileprotectingsemi-aridland from overgrazing. In the large scale irrigatedareas, about 158,000farms benefit from irrigation; another 330,000 farms with more traditionalirrigationsystems or rainfedfarming are in the ORMVA's territory of responsibilities. 2.02 InstitutionalFramework.The LSI subsector involvesa combinationof Governmentbodies and public enterprisesat central and regional levels, private farmers, input suppliersand processors. The institutionaland legal frameworkfor LSI was establishedin the late 1960son a strongly centralizedand government-dominatedbasis, but, since the mid-1980s,has movedtoward decentralizationand state divestiture. 2.03 MAMVAplays a pivotal role in the LSI subsector. It has full responsibilityfor managing and overseeingconstruction,for operatingirrigationfacilitiesand for supervisingagriculturalresearch and development. MAMVAhas delegatedoperationalresponsibilityfor the LSI systemsand the 2 . The legal status of the provisionof farmers with agriculturalsupport servicesto the nine ORMVAs ORMVAsis that of administrativepublic enterprises,placed under MAMVA's technical supervision and the Ministryof Finance's financialcontrol. The NationalBank for AgriculturalCredit (CNCA) has a principalrole in deliveringrural finance. 2.04 Infrastructure. Morocco's LSI schemes(see map) are comprisedof capital-intensivepublic investmentsfor hydraulicinfrastructurealmost entirelybased on surface water stored behinddams. Modernirrigationsystemscover 84% of the LSI area, of which 294,000 ha are under surface irrigationwhile 114,300ha benefit from sprinkler irrigation. The remaining77,500 ha are improved traditionalschemesin the southern oases. In additionto LSI, the territory of the nine ORMVAs includesa further 311,000 ha in private and traditional irrigationand 1.4 million ha of rainfed land adjacentto the LSI areas (see annex 1, table 1). 2.05 DivestitureProgram. Until the mid-1980s,LSI developmentwas a top-downGovernment undertaking: most decisionswere taken centrally by MAMVA whilethe ORMVAswere extensively involvedin commercialactivitiessuch as mechanizedcultivationservices, input supply and veterinary services. In addition, state-ownedfirms held processingmonopolies. The private sector was confinedto productionon farms and output marketing,althoughparastatalswere heavily involvedin purchasingof basiccommodities. Under the MTASAP,the ORMVAshave withdrawnfrom commercialactivitiesand the private sector's role is rapidly expandingin input supply, in organizing

2/ Doukkala,Gharb, Haouz, Loukkos, Moulouya,Ouarzazate,Souss-Massa,Tadla, Tafilalet.

-7 producemarketingas well as through grower associations(paras. 2.23-2.29). Domesticmarketing and trade has also been liberalized;price stabilizationschemesusing variable tariffs are now being introducedfor several major communities. B. Agricultural Production 2.06 Overview. The LSI schemesare producingwell below potentialwith average crop yields and croppingintensitystill relativelylow and efficiencyof water-usepoor. Several reasons account for this poor performance:water shortages due to drought and distributionproblemsarising from the poor state of the irrigationnetwork, the lack of attentionto improvedtechnologyand the failure to developnew markets. Poor water efficiencyis the result of inadequatetechnology,low water charges and lack of technical knowledgeon water management. Land tenure constraints(such as collectively owned land or land reform cooperativeswhere farmersdid not have individualtitles) have also contributedto limitingincreasedproductivity. 2.07 Land Tenure. Typically, farms in LSI areas are small and privatelyowned. Some 84% of farms in the LSI area are 5 ha or smaller, while average farm size is 3.1 ha (annex 1). If the oasis perimeters(where irrigatedfarms average 0.9 to 1.5 ha) are excluded, 75% of the farms are 5 ha or less and 55% smaller than 2 ha. Althoughnumerous,these farms cover only 36% of the cropped area; 48% of the land is held by farms of 5-20 ha and 24% is in holdings above20 ha many of which are state-owned,operatedby parastatals,or by farmer cooperativesunder ORMVAsupervision. Althoughthe small size of the farm can be seen as an incentiveto agricultural intensification,the continuousfragmentationof the holdingsdue to the increasedpressure of rural populationgrowth is becomingan obstacleto modernization,exacerbatedby traditionalforms of collectiveownership ("indivision"and "terres collectives"). Private individualfarms hold over 70 percent of the land in the Doukkala,Moulouyaand Tadla while in the Gharb, Loukkosand Haouz more than half the land is held by land reform cooperatives(CRA) and/or traditionalcollectives. A numberof on-going programs are giving titles to farmers on CRA land and are distributingcollectivelands. 2.08 Cropped Area. In the LSI area (500,000ha), Governmenthas promoteda croppingpattern based on industrialcash crops and intensiveanimalproductionin combinationwith traditionalfood crops. However, followingthe divestitureof ORMVAs' responsibilityfor managingsugar and cotton crops, regulationson crop rotationshave been modified,revised croppingrecommendationshave been issuedfor each LSI scheme and farmers now have the optionto propose an alternativerotation within the limits of water availability. About one third (420,000ha) of the solely rainfed land lies in the Gharb and LoukkosORMVAswhere annual rainfallexceeds 450 mm (the minimumrequired for wheat production);the remainderis in the arid zone where croppingopportunitiesare limited. 2.09 In 1990/91, cereals (mainly bread wheat) were planted on 36% of the area of the seven modernschemes; industrialcrops (sugar beet, sugarcane, cotton, oilseeds)on 20%; food legumeson 6%; forage crops for cattle (milk and meat) on 12%; and vegetableson 12%. Tree crops, mainly citrus and olive trees, cover 14%of the cultivatedarea. On the rainfedland in the Gharb and Loukkos, cereals occupy60% of the land and in the other areas 80 to 100% of the cropped area. 2.10 Overallcropping intensityaveraged 103% in 1986-1991,with the best performanceachieved in Doukkalaand Tadla with 125% and above (annex 1). These croppingintensitiescompare with potentialsof over 100%throughoutthe LSI area and rangingup to 140% in Doukkala.

- 82.11 Yields. Crop yields vary widely both withinand betweenORMVAsdue to differencesin soil conditions,farmers' competenceand the incentivesto investand produce. Sugar beet yields range from 62 ton/ha in the Doukkalato 43 ton/ha in the Tadla and only 35 ton/ha in the Gharb and Moulouya;these yields compareto 80 ton/ha achievedunder best practice. Sugarcaneyields vary from 68 ton/ha in the Gharb where soils are good to around 50 ton/ha in the Loukkos and Moulouya where soils are too light for achievinghigher yields. This compareswith 70 ton/ha achievedby the better producersand 100 ton/ha on the research station. Cereal (mainlybread wheat)yields at 3 to 4 ton/ha are 50 percent of potential;however, some farmers in the Doukkalareach over 6 ton/ha. Averagecotton yieldsrange from a low 1.2 ton/ha in Gharb to a more acceptable2.1 ton/ha in Tadla and some producersin the Haouz have obtainedas much as 4 ton/ha. Citrus productionhas fluctuatedbetween 14 and 20 ton/ha over the last five years, with the ceilingreflectingthe aging of the plantations. 2.12 Numbersof livestockhave remainedmore or less stable. The qualityof stock has generally improvedthrough crossingwith improvedbreeds. Total milk productionhas reached 300 million liters per year but yieldsper cow are still relativelylow due to poor feedingand hygiene. 2.13 Market Outlets. The ORMVAterritory contributes96% of the country's exports of citrus and 35% of vegetables. However, quality of fruit and vegetablesfor export is a problemalthough in some areas qualitystandards are excellentand internationallycompetitive. Sugar beet and sugarcane are processedby private and public mills. Cotton is handled by a parastatalpurchasingorganization COMAPRA. New crops are being introducedpartially drivenby increasingcontacts and trade with farmers and importers in the EC and other countries. 2.14 Potentialfor raising productivity. Realizingthe potentialfor increasedfarm incomesand productivityin the LSI areas will require action on three fronts. First, better and more economicuse will need to be made of the availablewater supply. Goodpotential to improveon the present performanceexists through rehabilitatingand modernizingthe infrastructureand through introducing improvedfield irrigationpractices (actionsare supportedby LSII2). Second, the land tenure constraints,for which legislationwill be supportedby the plannedASIL2, will need to be resolved over time. In the short run, limitedpotential exists for raisingproductivityon the area occupiedby manyof the very small farms, many of which are run on a part-timebasis (these farmersobtain work on other farms, or in the towns, to supplementtheir income). Becausemanyof the larger farms already largely use the latest technology,improvementsin productivitywould necessarilybe moderate on these farms. Nonetheless,betweenthese two extremes, the full-timefarmerson small to medium sized farms (occupyingnearly 50 percent of the surface area) couldconsiderablyraise productivity and better link themselvesto modem agro-industry. Third, much remainsto be done on all farms to adaptand diffuse improvedtechnologyfor better use of water, better managementof soil and pests and develop new market outlets. C. Agricultural Services AgriculturalResearch 2.15 Institutions. Agriculturalresearch is carried out by several public, para-publicand private institutions. The public agenciesare the National Institutefor AgriculturalResearch(INRA), (the most importantand the only one devotedsolely to research) and the universities. Of the universities,

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the Agriculturaland Veterinary Institute (IAV) in Rabat and the National AgriculturalSchool in Meknes (ENA)have a high research capacityused primarily in support of their teaching. IAV has a good potentialfor livestockresearch and for socio-economicaspects,while ENA has a strong unit for training extensionstaff. 2.16 A number of state-ownedcompanies,such as SODEA(citrus, vines and fruit trees), SNDE Oivestock),COMPARA(oilseeds)and the Sugarcompanies,do some adaptiveresearch. The private sector has been responsiblefor the advancesin vegetableproductiontogether with the Moroccan Companyfor AgriculturalServices(SASMA),which has been funded by a retentionon exports. For citrus, the RoyalFarms and SODEA are doing adaptivework and INRA is responsiblefor maintainingplanting material nurseries. Private sector research is also expandingin the irrigated areas. In addition, some sugar grower associationshave started adaptivework on varietiesand fertilizer practices. 2.17 The ORMVAshave a responsibilityfor adaptiveresearch that complementsthe research of the public and para-publicinstitutionsand demonstratesthe potentialof improvedtechnologyto farmers. Unfortunately,little progress has been achievedin this adaptiveresearch. Under LSII1, efforts were made to develop a program coordinatedby the Education,Researchand Development Department(DERD)of MAMVAand by a nationallevel committee,the "Conseil Nationalde l'Orientation de la RechercheAgricole" (CNORA). Regionalworking groups, "ComiteLocal de Coordinationde la Recherche" (CLCR), on which the professionand a number of research institutes are represented,were set up and prepared researchproposalsbut financing was not forthcomingto start field trials. Agricultural Extension 2.18 Nationalextensionservicesare overseenby the DERD. Its extensiondivisionis responsible for coordinatingand planningall extensionactivities,definingsuitabletechniques,means and methodologyfor extensionand organizingstaff training. It also has responsibilityfor overseeingthe land reform cooperatives(CRA). A separate Departmentfor Public AgriculturalEnterprises is responsiblefor ensuringliaison betweenMAMVA, the Chambersof Agriculture,professional associationsand farmers' unions. 2.19 The extensionfield servicesin the rainfed areas are managedby the 46 Provincial Departmentsof Agricultureand 122 ExtensionCenters(CT). In the irrigatedareas, the ORMVAs are responsiblefor servicesoperatedthrough 156 DevelopmentCenters, "Centrede Mise en Valeur" (CMV). Overall, these servicestend not to be responsiveto farmers' needs; operatingefficiencyis also low. AgriculturalSupportServicesof the ORMVA 2.20 ORMVAs' support to farmers is providedthrough three services: crop production(SPV), livestock(SPA)and extension(SVOP). The crop productionservice which, prior to divestiture, was primarilyresponsiblefor contractingand monitoringindustrialcrops, handlesadaptiveresearch and is the main source of technicalexpertiseon crops. The livestock servicehandlestechnical advice, the establishmentof new milk collectioncenters and the developmentof services such as artificial inseminationin collaborationwith the livestockbreeders associations. The extensionservice, which was establishedunder LSIII, works through extensionagents locatedin the CMV. Under LSII1,

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pilot activitiesprovidinga more intensiveform of extensionthrough working with farmer groups have been successfullylaunchedin one or two CMV per ORMVA. The provisionof professionalfarm managementadvice has been started in the LoukkosORMVAunder a KFW funded project. 2.21 The ORMVAs' agriculturalextensionhas suffered from lack of coordinationbetweenservices and a serious overstaffingin lower grades. Staff numbers in the three services of the nine ORMVAs total 4170, of which 2,170, many of whom are redundant,are in low non-technicalgrades. These problemshave been addressed in a LSII1 managementstudy on three ORMVAs (Doukkala,Gharb and Tadla) which would (a) bring together the three servicesunder a director of agricultureand (b) decentralizeservicesto the sub-divisionlevel. This study reviewedstaffingand made a 'skills gap' analysisprior to preparingan estimateof training needs. Under LSI12,four ORMVAsare undergoingreorganization(ORMVAsof Doukkala,Gharb, Tadla and Loukkos), followedby the other five ORMVAsonce managementstudies have been completed. This reorganizationand introductionof greater accountabilityshouldprovide a suitable environmentfor the transformationof staff attitudesneededto upgradethe services. However, overstaffingand inadequateremuneration need also to be tackled. The proposedproject includesprovision (para 3.26) for updatingthe 1990 "skills gap' analysisand a staffingplan (whichwould be expectedto include a reduction in total numbers but an increase in graduateposts). The need for changesto the remunerationsystem to match the new approachto managementappliesto all ORMVAservices; the Management ImprovementPlans under LS112being negotiatedbetween two ORMVAsand the Governmentcontain provision for dealing with these institutionalissues. Similar plans will be negotiatedwith the other seven ORMVAsby the end of 1995. Bank Support for AgriculturalServices 2.22 Bank supportfor agriculturalresearch and extensionservicescommencedin the late 1970s with adaptiveresearch and improvedextensionmanagementsupportedthrough a numberof area developmentprojects. Subsequently,a nationalAgriculturalResearchand ExtensionProject (Ln. 3036-MOR)was launched in 1989to strengthenINRA and test extensionapproachesin the rainfed areas as well as in 19 pilot CMVs in six ORMVA. Lessonslearned from the pilot actions in this project have been taken into account in preparing the proposedproject. D. IncreasingRole for the Private Sector 2.23 Overview. A relatively well-organizedprivate sector has grown up around the packingand exportof citrus and vegetablecrops. On the other hand, many of the farmer cooperativesset up with governmentassistancein the 1970s' remain dependenton the assistanceof the ORMVAs. However, more recently, Government'sdivestitureof responsibilityfor sugar and cotton crops has led to some encouragingdevelopmentof grower associations. The Government'spolicy is to encouragethe developmentof farmer organizationsembracingall farmers, as a vehiclefor increasinglyinvolving them in improvingagriculturalproductivityand water use.

a/ A separate study for the reorganizationof the LoukkosORMVAwas carried out with KFW funding.

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2.24 Farmer Cooperatives. The majorityof the existingcooperativeswere created at the initiative of the Governmentto facilitatethe distributionof certain lands "Cooperativesde la Reforme Agraire" (CRA),to simplifymilk collection"Centre de Collectedu Lait" (CCL) or to organizejoint ownership of machinery"Cooperativesd'Utilisation de Materielen Commun" (CUMA). These cooperatives have receivedassistancefrom the ORMVAin personnel(most of the Directorsof the CRA are paid by the ORMVA)and/or equipment(the initialmilk collectiontank is generallyprovidedby the ORMVA). This assistanceis beginningto pay off in the case of the milk collectioncenters where the operatingcosts are covered by a retentionon the price paid for milk delivered. However, for both the milk collectioncenters and the CRA, the ORMVAscontinueto fund some staff and milk collectiontanks. Agreementon phasing out supportfor milk collectionover three years is included under the planned ASIL2. 2.25 Producer Associations. The producer associations,which were originallydevelopedto defendfarmers' interestsat the time of independence,are beginningto take on a role in technology transfer. The best developedassociationsoperatingin the irrigated areas are the cattle breeders and producerassociationsfor citrus, vegetableand sugar crops. For example,the cattle breeders are taking over milk recording and artificialinsemination(Gharb and Doukkala),while the sugar producers associationin the Tadla has become involvedin conductingseed and fertilizer trials. Operationsare financedby a retentionon either production(in the case of milk and sugar) or on exports (citrus and vegetables). 2.26 Another particularlysuccessfulexampleof producerassociationsis SASMA(para. 2.16) to undertaketechnologydevelopmentand transfer on fruits and vegetables. Financedby a tax on exports, the associationsplayed a key role in promotingthe greenhouseproductionof early vegetables (whichwas also supportedby a Bank financedproject in the early 1980s).With the liberalizationof exports, it lost a major part of its funding and many staff movedinto private productionand advisory services. MAMVAhas contractedone such service to continueadvisory work and adaptiveresearch. 2.27 Chambers of Agriculture. The Governmenthas recentlylaunched a pilot program to develop the role the Chambersof Agriculture (CA) in the managementof agriculturalservices and transfer of technology. A numberof the ORMVAshave transferredsome staff and vehicles to the Chambersof Agriculturefor carryingout specifiedextensionprograms. Also, under a cooperationagreementwith France, Chambersof Agriculturein three of the ORMVAshave entered into twinningarrangements with French Chambersof Agriculture.While the CAs could play an importantrole in aiding the developmentof the profession as well as directlytaking on responsibilityfor certain services,the present statute and lack of resourceslimit their options. The statute needs modificationto open up membershipto farmer associationsso as to obtain a better representationof the profession,while funding options, which MAMVA is discussingwith the Ministry of Finance, need to be reviewedand actionstaken. 2.28 Water Users Associations. Formalizedunder legislationissued in 1990/91and supportedby LSII2, wateruser associationsare beingcreated to take on more responsibilityfor the operationand maintenanceof the network at the field level. The proposedproject would developthe role of these associationsin technologytransfer. 2.29 The Processing Industry. The sugar factories and cotton ginneries are also beginningto get more involvedin adaptiveresearch and advisorywork. This involvementis expectedto increase and would be encouragedby the project. The fruit and vegetable packing stations also are

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providinga point around which to organize and better inform farmers. The milk collectioncenters are already used by the livestockservices and cattle breeders associationas a point for working with farmers. The cattle breeders associationis expectedto play a major role in provision of services in the future. E. Strategyfor Intervention 2.30 The Government'sstrategy already initiatedin the divestitureprogram (para. 2.05) and the pilot programwith the Chambersof Agriculture(para. 2.27) is to encouragethe take-over of commercialservicesby the private sector and increasethe efficiencyof the agriculturalservicesthat wouldremain in the public domain. During the next ten to fifteen years, there will be a shift of responsibilitiesto, and increasedcost-sharingwith farmers and associations. Already, farmers are organizingaround the industrialcrops and livestock (para. 2.25) and this trend can be expectedto continue (see annex5 and workingpaper 4 for an analysisof each organization'srole). The policy measuresto support this shift would includethe necessarylegal frameworkfor private sector organizations,cost-sharingfor certain individualadvisoryservices and continuedencouragementto cooperativedevelopment. The proposedproject, by promotinga participatoryapproachto the planningand distributionof tasks, would support these developmentsand would set goals for privatizationof services. III. THIEPROJECT

A. Project Originand Rationale 3.01 The project is part of the Government'sstrategy (which the Bank fully supports)to developa more productiveand flexibleagriculturalsector that can respondto the openingof the Moroccan economyand trade opportunitieswith the EC and other potentialmarkets. The project would complementthe reforms and investmentprograms under the second Large Scale Irrigation Project and raise returns to investmentsin irrigationinfrastructure. The proposedproject, which incorporates importantlessonslearned from previous Bank-financedprojects in the sector, wouldprovide responsiveextensionand research servicesin the ORMVAs' irrigatedand adjacentrainfed areas. It wouldaim to improve the efficiencyof LSI farmingoperationsthrough the transfer of technologyand supportto servicecooperativesand professionalorganizations. In parallel, LSII2 covers network rehabilitation,efficiencyand sustainabilityof the public utility functionof the ORMVAs,on-farm water managementtechniquesand environmentalprotection. An on-goingAgriculturalSector InvestmentLoan supportsother agriculturalinvestmentsand the improvementof public resource management. A planned (FY94) Second SectorInvestmentLoan would continuethis support, 3.02 In the early stages of preparation,the LS112project includedcomponentsfor agricultural services;subsequently,followingexperienceunder LSIII, it was decidedto separate project assistance for agriculturalservicesfrom that for irrigationhardware and managementfor a numberof reasons. First, the two projects will be working with differentparts of the ORMVAorganization,each requiringspecializedassistance. LSII2 will assist the ORMVAs' constructionand irrigation managementdivisionscoveringtheir operationsas utilities managingthe supplyof water and recoveringcosts. The proposedproject would assist the ORMVAs' agriculturaldepartment dispensingspecific agricultureand water managementadvice while applyingresearch results. Second, seven different MAMVAdepartmentsare involvedin the proposedServicesProject and their

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coordinationis beyond the capacityof the LSII unit in the Departmentfor Rural Equipment(DER). Third, experienceunder LSIII has convincedboth the Bank and Governmentthat each ORMVAhas to be supervisedseparatelyand that coordinationof the nine ORMVAand various MAMVA departmentsis outsidethe control of DER. Finally, the importanceof the project, which will provide the catalyticinvestmentrequired to raise the return on the heavy sunk costs in irrigation,justifies the additionalresources and focus of a separate project. 3.03 The proposedproject was prepared by the ORMVAand central MAMVAdepartmentswith the help of the FAO/BankCooperativeProgram. The project was appraisedin February 1993. Negotiationstook place in Washingtonin November1993. B. Project Objectivesand SummaryDescription Project Objectives 3.04

The project's major objectiveswould be to: (a)

raise agriculturalproductionand farmers' incomesin the irrigated and adjacentrainfed areas - with specialefforts to reach women who are mainlyresponsiblefor livestock management;

(b)

improvethe organizationand operating efficiencyof the ORMVAs' agricultural services;

(c)

promote commodityand service orientatedfarmer organizationsto take an increasing share of developmentresponsibilities;and

(d)

involvethe universityteaching/researchstaff in field extensionand research.

SummaryProject Description 3.05

To achievethe aboveobjectives,the project would implementthe followingfive components: (a)

the transfer of technologyto and from farmers in the LSI area includingthe strengtheningof adaptiveresearch, agriculturalextension,womens' programs, with provision for staff training, infrastructure,vehicles and equipment,contractingout extensionand research, technicalassistance,and incrementaloperating costs;

(b)

supportingservices, includingsoils and plant analysis,pest and disease warning system and testing/demonstrationof small equipment,with provisionfor infrastructure,vehicles and equipmentand incrementaloperating costs;

(c)

promotionof farmer organizations,with provisionfor technicalassistance,training and some initial investments;

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(d)

monitoringand evaluationof agriculturaldevelopmentin the irrigatedand adjacent rainfed areas with provision for vehiclesand equipmentand incrementaloperating costs; and

(e)

studies for specific componentsand a review of the developmentstrategyfor the irrigationsector.

3.06 The project wouldbe implementedby the ORMVAsand coordinatedthrough a project steeringcommitteecomprisingORMVAs' representativesand the seven concerned MAMVA departments:training, research and development,crop production,livestockproduction,crop protection,farmer organizations,rural engineeringand planning. C. DetailedFeatures 1. Transfer of Technology 3.07 The objectiveof this technologycomponentis to increasethe productivityand incomesof some quarter millionfarmers with land in the LSI schemes(about63% of the farmers)and adjacent purely rainfedland (about37%) in the better rainfall areas. The component,which would cost US$24.9 million(72% of total costs), comprisessupport to four activities:(i) adaptiveresearch; (ii) agriculturalextension;(iii) womens' program; and (iv) staff and farmer training. 3.08 AdaptiveResearch(Annex2, WorkingPaper 1) [US$9.0 million, 26% of total costs]. This sub-componentwouldprovide the meansfor testing and demonstratingimprovedcrop and livestock technologyfor the benefit of farmers in the irrigationperimeters. The project would support strengtheningthe ORMVAs' capacityto executeadaptiveresearch and the contractingout of some research with the universities,other institutesand private sector agencies. 3.09 The adaptiveresearch programwould be confinedto testing the adaptabilityof technology developedelsewhere(e.g. new varieties and fertilizer recommendationsfrom INRA, chemical companies' recommendationsetc.) to the farming conditionsof each region. The programwould include work on improvingon-farmwater managementin collaborationwith the irrigationand drainage technicalunit of the Water ManagementDepartmentin each ORMVA. An initial program (annex2 and workingpaper 1) has been prepared from proposalsput together by regional committees (CLCR)(para. 2.17) and then screenedat the center to eliminateduplicationbetweenORMVAs. This program wouldbe subsequentlyfine tuned as necessary,once the results of the diagnosticstudies (to be carried out prior to launchingthe extensionprogram - para. 3.13) are available. The program would be implementedby the ORMVA,either by their own staff on their researchstationsand farmersfields, or by sub-contractingwith other agencies:universities,INRA and private sector. The CLCR which is chairedby the ORMVAand on which farmers are represented,would advise on the allocationof responsibilitiesand monitorprogress. Assuranceswere obtainedduring negotiationsthat a three-year researchprogram wouldbe finalizedby effectivenessand be updatedannuallyby 30 Septembereach year.

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3.10 The project would encouragecertain regions to take the lead in selectedcrops. For example, the SugarcaneResearchCenter, "CentreTechniquede Canne I Sucre" (CTCAS)in the Gharb, which has recentlyadded work on sugarbeetto its program, would take the lead for the programon sugar crops, but in close collaborationwith the Doukkalafor sugarbeet. Work on citrus would be done in the Souss-Massa,Moulouyaand Gharb, olives in the Haouz etc.. 3.11 The project would improvethe infrastructureof existing researchstations "Station d'Experimentationet de Mise en Valeur" (SEMVA),provide additionalfield equipmentand vehicles, and finance incrementaloperatingcosts (see annex2, table 1 for stationscovered). Equipmentwould includethat required for measuringsoil moisturelevels to be used in a program for improvinguse of water at the field level and upgradingirrigationagronomy. One new station wouldbe constructedin the Gharb. The existingresearch staff of the Crop ProductionService(SPV) and AnimalProduction Service(SPA) wouldbe strengthenedand training provided. The project would providefor 162 manmonthsof adaptiveresearch to be contractedout to other agencies. 3.12 Agricultural Extension. (Annex3, WorkingPaper 2) [US$14.4million, 41% of total costs]. In support of the project's objectiveto increasethe income of farm families,this sub-component would providefarmers in the irrigationperimeterswith relevantand timely advice through: (i) improvedparticipatorydiagnosis, planningand implementationwith, by and for farmers; (ii) distributionof extensiontasks amongthe private and public sectors; (iii) improvedmanagementof extensionservices; (iv) improvedresearch-extension-farmer linkages; (v) the wider disseminationof informationthrough local and regional radio; (vi) more effectivepublic relations;and (vii)timely monitoringof activitiesand impact. 3.13 The project would support diagnostic studies in each ORMVAto determinemore clearly the different farmingsystems and farmers' problems,to identifypossible solutionsand to set out the priorities for different categoriesof farmers. The studies wouldbe done in two phases: first an aM inventorywould be prepared by the extensionagents, and second a diagnosticsurvey would be carried out by a multidisciplinaryteam of public and private extensionand research specialistsand the profession.The project would providethe vehicles and equipmentnecessaryto carry out these studies, and finance contracts for the participationof universityand other non-ORMVAstaff, field expensesand technicalassistancefor the design and executionof studies. Linkageswith research and farmers wouldbe strengthenedconsiderablythrough this multidisciplinaryapproachin the field. Assuranceswere obtainedduring negotiationsthat these studies would be completedbefore the end of the secondyear (December31. 1995)of the project and regularlyupdated thereafter. 3.14 The project wouldprovide for the improvedplanning and implementation of extension services. Followingthe clearer definitionof needs and priorities, objectiveswould be better formulatedand quantified,the various public and private sector sources of advice wouldbe identified, responsibilitiesdefinedand tasks distributedaccordingly. Implementationof ORMVAs' services wouldbe improvedby: clear definitionof tasks and staff training, performance-linkedincentives, provisionof infrastructureand transport in support of decentralizationand more effectiveuse of group and mass communication(for more details see annex 3). Assuranceswere obtainedduring negotiationsthat annual extensionprograms would be prepared by 30 September. 3.15 The project would support the ORMVAsto meet the needs of three differenttpes of farmer client: the mass media approachdestinedto reach the manysmall part-time farmers; group extension working with homogeneousgroups of small and medium scale farmers - in developingthe group

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approach,ORMVAwould try to work through, inter alia, the Water User Associations(para.2.28); and farm managementadvice destinedfor the more developedmedium and large scale farmers, who wouldbe selectedalso for their willingnessto share cost and returns data. The latter service (buildingon work already underway in the Loukkos)would be extendedto a further six ORMVA;the project wouldprovide the necessarystaff training and technicalassistance. 3.16 In providingthese services, the ORMVAwould initiallyuse existingfield extensionstaff and the technicalspecialiststaff of the SPV and SPA who, under the ORMVAreorganization,are to be relocatedat the sub-divisionlevel (para.4.04). These specialistswould providemultidisciplinary supportto the field extensionagents workingwith farmer groups as well as the links with research and wouldassist farmers seekingadvice at the sub-division. In each ORMVA, five to ten staff would be selectedfor training as farm managementadvisors to work with selectedfarmers. 3.17 The project would also support on-goingpilot activitieswith Chambersof Agriculture(para. 2.27). Assuranceswere obtainedduring negotiationsthat consultantswould be recruitedby September 30. 1994to evaluate the results of this support and draw up proposalsfor future cooperationwith the ORMVAs. 3.18 The project would also providefor more use of regionalradio. The project wouldprovide three ORMVAs(Haouz, Moulouyaand Souss-Massa)with training and equipmentto producetwo fifteen minute farmingprograms a week for diffusionby RTM. 3.19 The project wouldestablish improvedmonitoringof the executionand impactof the extensionservices. This would includethe formal, quantitativeaspectsof project inputs, outputs and effects as well as the more qualitativemonthlycheckingof factors such as: the presence of higher level staff in the field, farmers' reactionsto demonstrations,radio program audienceand coherenceof programwith extensionworkplan. 3.20 Total extensionstaff wouldbe increasedfrom 106 graduatesand 224 techniciansto 151 graduatesand 435 techniciansthrough redeploymentand transformationof posts. To enable the ORMVAsto carry out the aboveprogram, the project would provide for the constructionof offices (25) and meetingrooms (19) at sub-divisionand CMV level. The project would provide for additionalvehicles (83 light cars, 22 vans and 9 minibuses),as well as for demonstrationand audiovisualequipmentand small computers. In those ORMVAswhere motorcyclesare the preferred meansof transport, they would be acquired in place of these vehicles. Some 61 man months of technicalassistanceto support the diagnosticand planning process, 14 man months for training in audio-visualsupport, and 40 man monthsto developa farm managementservice would be provided. 3.21 Womens' Program. (Annex4, WorkingPaper 3) [US$1.5million, 4 percent of total costs]. The aim of this sub-componentwould be to providewomen, who play an importantrole in livestock productionand provide muchof the family labor on small farms, with timely and relevant advice. The project would supportthe necessarystudies and diagnosisnecessaryto deepen the understanding of womens' role in agriculture.It would also strengthenthe ORMVAs' extensionservicesto provide advice as well as support for small projectsthat would increasetheir revenue-earningpotential. 3.22 The project would providefor the recruitmentof an additional3 graduatesand 30 technicians bringingthe total womens' program staff to 56, or about6 per ORMVAin total. In three ORMVA (Ouarzazate,Souss-Massaand Tafilalet), the project wouldtest the possibilityof working through

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womenextensionassistantswho wouldbe recruitedto work in their own villages. A total of 40 assistantswould be recruited to be trained in livestockhusbandryand some other agriculturalskills and suppliedwith equipmentkits. Followingtraining and a period of supervision, they would be expectedto work as independentoperatorsin their own villages. This follows a successfulexperience of a project financedby Germanaid. 3.23 The project would also providefor small investmentprojectsthat have a clear demonstrative objective. Specifically,the project would cover: (a) in Tafilalet, the expansionof the D'mane sheep project; (b) in Ouarzazate,the deploymentof Draa goats in the southern oases and the settingup of a cheese-makingunit; and (c) feasibilitystudiesin the other seven ORMVAs. 3.24 The initialdiagnosticstudies would be made as an integralpart of the determinationof farm types and needs for the extensionservices (para. 3.13). Subsequently,the project would provide for studies necessaryto deepenthe understandingof womens' issues (para. 3.21), for additionaloffices, vehicles, equipment,incrementaloperatingcosts and technical assistancefor the womens' services. 3.25 Training. (Annex6, WorkingPapers 1,2 & 3) [US$2.9million includedwithinthe other components,8 % of total costsl. The project would provide initialtraining to upgradebasic skills, regular in-servicetraining and selectedtraining abroad. An importantobjectiveof the initial program would be to support staff in making the shift from purveyors of inputs to providers of solid advice on agriculture. The programwould also developtheir practicalexperience- in order to improve their demonstrationof improvedtechnologyin the field. Each ORMVAwould draw up a training masterplanon the basis of a skills gap analysis. Training would be carried out in ORMVAfacilities, regional training centers (CREPA)and would also be sub-contractedto the universitiesand other training institutesin Morocco. 3.26 The project wouldprovide first for the updatingof the skills gap analysismade during the managementstudiesunder LSIll; the initial analysiswas done for all nine ORMVAand is the basis for the on-goingstaff redeploymentprogram. The implementationschedulefor the training program wouldbe reviewedat negotiations. Assuranceswere obtainedduring negotiationsthat the skills gap analysiswould be updatedand a revisedtraining program preparedby June 30. 1994. 3.27 As part of this program, extensionagentswould receive training in farm managementand group work; specialistsin the practical aspectsof farming and didactics,and supervisorsin staffmanagement,includingmotivation,conflictresolutionand performanceappraisal. About 1500 staffweekshave been foreseenfor initialtraining of all staff in the project objectives,extension principles, participatoryappraisal, workingwith groups, demonstrations,planning, accountingand personnelmanagement. Regular in-servi training would be providedfor extensionstaff (biweekly for field agentsand monthlyworkshopsfor specialists). In-servicetraining would be conductedpartly on the ORMVAresearch stations. Overseastraining, includingstudy tours and seminars,would be providedat the rate of about 20 staffweeksper year. Training for male and femalefarmers would be providedfor a total of about 600 weeks a year. Farmer groups would also travel withinthe country and overseasto visit farmer organizationsand see other extensionsystems. 3.28 The project would also provide for training of crop and livestockproductionservicesstaff responsiblefor the adaptiveresearchprogram and their role as technicalspecialists. Training programs for crop staff would put special emphasison irrigationagronomyand provision is made for each ORMVAto send one agronomistfor 6 - 12 monthstraining overseas. In additionto the above,

- 18 under the Farmers' Organizations(OP) component,the project would provide for the training of farmer membersand OP staff in management,accountingand stock managementand other subjectsof organizationmanagement. 2. Supporting Services (Annex2, WorkingPaper 1) [US$1.9 million, 5% of total costs] 3.29 This componentwouldhave two objectives:(i) rationalizethe use of fertilizersand pesticides and reduce the presentwaste and deleteriouseffects on the environmentand (ii) raise farm productivity. The project would assist the ORMVAsto provide: (a) soils and plant analysis; (b) agrometeorologicalinformation;(c) better pest management;and (d) introductionand demonstrationof small scale machinery. As farmer awarenessand demand for these servicesbuilds up, the private sector (farmer organizationsand/or commerciallaboratories)would be expectedto take over. 3.30 (a) Soils and plant analysis. At present, apart from a few farmers using the Gharb ORMVA's Kenitra laboratory, a private laboratory in Casablancaor able to send samplesto France, soils analysesto check nutrient levels and optimizefertilizer applications,are not used. Trials work has shown that there is a potentialto economizeon the standardfertilizer recommendationsreducing costs and damage to the environment;but this will require the availabilityof soils testing facilitiesand field extensionstaff trained in field samplingand interpretationof the results. To date, the soils analysiswork done by the ORMVAsin their own laboratoriesor contractedout, has been confinedto planningthe constructionof new irrigatedareas. 3.31 The project wouldprovide the additionalequipmentand staff training required to completethe equipmentof the ORMVAs' existing laboratoriesand to adapt and equip an existingbuilding (in Tadla) to providea soils analysisservice for farmers where the servicesof private laboratoriesare not available.Assuranceswere obtainedduring negotiationsthat analyseswould be charged at commercial rates and that separateaccountswould be kent. Farmers using these services wouldreceive the 50 % rebate on chargeswhich is providedby MAMVA's AgriculturalDevelopmentFund' to encouragethe use of soils' analysis. 3.32 (b) Agro-meteorology. The availabilityof good and timely agro-meteorologicaldata is required for effectiveirrigationscheduling(as part of the program for raisingthe efficiencyof water use) as well as an input into predictionof pest and disease attacks and greenhousemanagement. The project wouldprovide for the equippingor improvementof equipmenton selectedORMVAresearch stations,for the training of staff and for the regular diffusionof the information. 3.33 (c) Pest Management. Each ORMVAwould establisha conventionwith DPVCTRF (the MAMVAdepartmentresponsiblefor crop protection)to reenforce the warning network for pest infectionand to assist with introducingintegratedpest management(1PM)practices. The IPM practicesto be applied wouldfollow three basic principles : the managementwherever possible of pest populationsat below economicallydamaginglevels (rather than completeeradication),the use to the extent possible of non-chemicalmeasuresand the selectiveapplicationof pesticideswhen they have to used. DPVCTRF(which is alreadypropagatingsome importantelementsof IPM including pest scoutingand the judicioususe of modern, high concentration,low applicationrate pesticideswith

A/ The AgriculturalDevelopmentFund provides grants of 20% - 50% of cost to encouragefarmers to take-up new, more efficienttechnologies.

- 19 -

quickbiodegradability)would provide the technical assistanceto work with and train ORMVA personnelin the identificationof pest outbreaksand applicationof IPM practices. This work would be supportedby the adaptiveresearchprogram (para. 3.08), which would include work on pest control, and by collaborativework with INRA on pest ecology. Training programs for extensionstaff (para. 3.25) would includethe applicationof IPM practices. The project wouldprovide additional vehicles (one for each of the 13 inspectionzones concerned)for DPVCTRFto facilitatecollaboration with the ORMVAs. Assuranceswere obtainedduring negotiationsthat each ORMVAwould establish a conventionwith DPVCTRFby December31. 1994. 3.34 (d) Small farm equipment. Under the project, the ORMVAswould work with local machinerysuppliersto test and demonstratethe introductionof small scale farm machineryrequired to improveproductivity. The project would includefirst a study to make an inventoryof existinguse and determinethe main needs; subsequently,it would work with the universities,research institutes and the machinerysuppliersto encouragethe introductionand demonstrationof appropriatetools. 3. Promotionof Farmer Organizations(Annex5, WorkingPaper 4) [US$5.6 million, 16% of total costs] 3.35 In the context of the liberalizationof the economyand divestitureby the ORMVA,the project wouldpromote the emergenceof efficient,viable and autonomousfarmer organizations "OrganisationsProfessionnelles"(OP)5 at the key points in the production-processing-marketing chain of major food products, through: (i) changesto the legal and regulatory framework;and (ii) a pilot technical assistance/investmentcomponent. 3.36 In respect of the legal and regulatoryframework,there are three areas in which progress is a prerequisitefor the developmentof viable farmer-ownedorganizations:(a) the applicationof the 1984 CooperativeCharter to encouragethe developmentof competitiveand viable cooperatives;(b) the preparationof a specific statute for farmer associationsto enable them to developa financialbase; and (c) for the Chambersof Agricultureto (i) give the farmer organizationsthe possibilityto be representedand (ii) provide financialresources (para.2.27). First, the review and applicationof the CooperativeCharter is expectedto be a subjectin the dialoguebetweenthe Bank and Governmenton the Private Sector Developmentoperationsand the Agro-Industrysector review and the preparationof a subsequentproject, which is likely to proceed in parallel with the implementationof the proposed project. Second, in respect of the statute for the farmer associations,the project would providefunds for studies required to prepare a revised statute. Finally, for the Chambersof Agriculture, which, if properlymanagedand funded, could take responsibilityfor certain extensionservices, the project wouldpress for action on representationand funding. Assuranceswere obtainedduring negotiations that proposalsfor appropriatefundingof the Chambersof Agriculturebe reviewedwith the Bank by December31. 1994. and a revised statute for the farmer associationspreparedby June 30. 1995. 3.37 The project would aim to promotea small numberof OP, particularlyto concentratethe supply of selectedprimary livestock (milk), and crop (fruit and vegetablesand sugar crops) produce. The objectivewould be to encouragemedium and small economicallyviable farmers capableof s/ For the purposesof this project Farmer Organizationsare definedas any group of agricultural producers, whateverits legal structure (Association,Chamberof agriculture, Cooperative, commercialcompany,or de facto grouping).

- 20 -

integratingin the food chain. Successwould be measuredby the extent to which they were sufficientlyactive, financiallyviable and autonomouswithin five years. The project would: (i) support planning(regionaldiagnosisand preparationof an action plan) providingassistance from specializedconsultants,study visits to other countriesand workshops. A regional task force wouldbe set up composedof representativesof the profession, the ORMVAsand private sector agro-industries,who, assistedby consultants,would prepare an annualplan for the ORMVAs' support to the developmentof farmer organizations.The plan would determine the priority sub-sectors,set objectivesand fix the technical and financialsupport to be provided. Assuranceswere obtainedduring negotiationsthat the task force would be set up by December31. 1994. with a compositionacceptableto the Governmentand the Bank; (ii) strengthenselectedOPs with assistanceto be providedin the establishmentprocess, in the evaluationof investmentproposals, in developingmanagementprocedures, in providing training for OP members and staff and in lighteningstate intervention. Work with farmer organizationswould be on the basis of contractsto be drawn up betweenthe ORMVAand the organization; (iii) provide investmentassistanceto OPs for projects designedto test innovativetechnology or organizations. Investmentassistancewould complywith agreementsexpectedto be reached under the planned ASIL2on the gradual eliminationof governmentassistanceto milk collectioncooperativesand artificialinseminationoperations; (iv) supportstaff training and incrementaloperating costs for the ORMVAunits working with the farmer organizations;and (v) provide some 90 monthsof consultantsto work with the regional task forces and farmers' organizationsand 15 monthsper ORMVAfor feasibilitystudies of potentialprojects requested by the OPs. 3.38 The project would also provide for the disengagementof the ORMVAsfrom the management of the Land ReformCooperativesto reduce ORMVAs' costs (paras. 2.07 & 2.24). Assuranceswere obtainedduring negotiationsthat the ORMVAswould draw up a program by December 31. 1995. for the take-overby the cooperativesof ORMVAfunded directors by the end of the project. 4. Monitoring& Evaluationof AgriculturalDevelopmentin the IrrigatedAreas (Annex9) [US$1.4million, 4% total costs] 3.39 The project would support the establishmentof a system for the monitoringand evaluationof agriculturaldevelopmentin the irrigated areas. Each of the ORMVAswould select a sampleof farms on which progresswould be monitoredduring the course of the project. The data to be collected would providethe basis for a better understandingof the farming systems as well as for the ultimate evaluationof project impact. The project wouldprovide the necessaryvehicles, equipmentand incrementaloperatingcosts.

- 21 -

5. Studies [US$0.7million, 2% of total costs] 3.40 The project would include funds for studies tied to the executionof components(farm mechanizationand farmer associations)and for product marketing. 6. Project Unit [US$0.2 million] 3.41 The project would also providevehicles, equipmentand operating costs for a small project unit to be set up in MAMVA's Departmentfor Education,Researchand Development(para.4.03). Project Implementation 3.42 The project wouldbe implementedover five years from January 1994. Implementationof the investmentprogram wouldbe phased to take account of the timing of the reorganizationof agriculturalservices in each ORMVA. In the cost estimatessummarizedbelow, four ORMVA (Doukkala,Gharb, Loukkosand Tadla) would have completedtheir reorganizationby end 1993 and thus be ready to investfrom 1994, whilethe other five (Haouz, Moulouya, Ouarzazate,Souss-Massa and Tafilalet)would require up to two years to completethe study and implementationof a new organization. In the case of these five, expendituresin the first two years would be limited to studies and staff trainingpreparatory to a three-year investmentperiod starting in 1996. Model designs and cost estimatesfor housingwould follow governmentnorms. D. Cost Estimates 3.43 Total project costs, includingtaxes, duties and contingencies,are estimatedat DH 312.7 million (US$34.7million),of which 38%, or US$13.1 millionwould be foreign exchange. Duties and taxes are assessedat DH 39.6 million(US$4.4 million)which is equivalentto 13% of total project costs. Cost estimatesare summarizedin Table 3.1 and shown in more detail in annex 7 and in workingpaper no.5. 3.44 Physicalcontingencieshave been includedat 10% on civil works, vehicles and equipment. Price contingencieshave been calculatedon the basis of the annualprojectedinflationrates appliedto local and foreign costs, includingphysicalcontingenciesas shown in Table 3.2. Price contingencies equal 14% of base costs.

- 22 -

Table 3.1: Project Cost Summary DR Millip LOCl

uss Miloo

Foi

TarOl

Loc

FoMgP

Tahw

%for. echg.

%baw oaf

A. ORMVA Research & Support Services

49.1

34.6

83.7

5.5

3.9

9.4

41

31

Extension

82.1

30.1

112.2

9.1

3.3

12.4

27

42

9.9

1.8

11.7

1.0

0.2

1.2

17

4

13.4

30.0

43.4

1.5

3.3

4.8

69

16

154.5

96.5

251.0

17.1

10.7

27.8

38

94

B. Monitoring and Evaluation

6.9

3.4

10.3

0.8

0.4

1.2

33

4

C. Studies

2.3

3.4

5.7

0.2

0.4

0.6

67

2

D. Project Unit

0.3

0.4

0.7

0.1

0.1

0.2

50

0

164.0

103.7

267.7

18.2

11.6

29.8

39

100

3.7

5.0

8.7

0.4

0.5

0.9

56

3

27.0

9.3

36.3

3.0

1.0

4.0

25

14

194.7

118.0

312.7

21.6

13.1

34.7

38

117

Womens' Services Fanner Organizations

Sub-total

Total Base Costs Physical Contingencies Price Contingencies TotalPROJECTCOSTS

Table 3.2: Price Contingencies (percent) 1993

1994

1995

1996

1997

1998a/

Local Costs

3.3

4.4

5.4

5.7

5.2

5.3

Foreign Costs

2.8

2.8

2.8

2.8

2.8

2.8

Source: World Bank (Operational Directive 6.50 for foreign contingencies, Country Operations for local) a/ and thereafter.

E. Financing 3.45 A Bank loan of US$25 millionto the Kingdomof Morocco is proposedto financeabout 83% of total costs net of taxes. This would cover 100% of foreign exchangecosts and 70% of local costs net of taxes. The Governmentwould finance the balanceof the local costs. Loan proceedswould be made availableto ORMVAson a grant basis. Project costs would be shared in the amountsand proportionsshown in Table 3.3.

-

23

-

Table 3.3: Project FinancingPlan Local

Foreign

Total

% of net project cots

25.0

83

5.3

17

30.3

100

4.4

15

34.7

115

US$ M Equivalent World Bank

11.9

Governenrt

5.3

Net Project Costs

17.2

Taxes & Duties Total Project Cos

13.1

13.1

4.4 21.6

13.1

3.46 While no specificcofinancinghas been agreed upon at this stage, in three ORMVAother donorsare likely to finance some parts of the agriculturalservices in parallel to the proposedproject. First, KFW has been financingthe developmentof a farm managementadvisory service in the Loukkosand are expectedto continueto so do. Second, the EC has been supportingdevelopmentsin the Haouz and may include support for agriculturalservicesunder its fourth protocol. Finally, USAIDhas recentlysigned an agreementto finance a developmentprogram in the Tadla which is designedto test and promote water-savingtechniquesand tackle drainage and salinity problems. The design of the proposedproject takes into account these interventions. The Governmenthas also been advisedto seek additionalcofinancingfor the training and technical assistanceprogram. F. Procurement 3.47 ImplementingAgencies. Procurementwould be carried out by the nine ORMVAs, primarily, and by the DERD to a minor extent. The nine ORMVAshave demonstratedtheir capacity to handle procurementmatters efficientlyduring LSII1, while the DERD (extensiondivision)has also had experienceof Bank procurementin the course of the AgriculturalResearch and Extension Project. Procurementarrangementsare summarizedin Table 3.4.

- 24 -

Table 3.4: Summaryof ProposedProcurementArrangements (US$ millionequivalent)

Project

Procurement

Method

LCB

Other

Element

ICB 1. Works 1.1 Buildings 2. Goods 2.1 Vehicles 2.2 Agric.Equip. 2.3 Other Equip.

2.7 (2.2) 1.3 (1.0) 1.7 (1.4)

1.4 (1.2)

1.4 (1.2)

2.1 (I. 7) 0.7 (0.5)

a/ 0.7 (0.6)

2.7 (2.2) 3.4 (2.7) 3.1 (2.5)

2.9 (2.6) 5.2 (5.0) 2.6 (2.5)

2.9 (2.6) 5.2 (5.0) 2.6 (2.5)

b/ 13.4 (6.3)

13.4 (6.3)

24.8 (170)

34.7 (25.0)

3. Consultants 3.1 Training 3.2 Tech. Assistance 3.3 Studies 4. Other 4.1 Incre.Oper.Costs

TOTAL

5.7 (4.6)

Total Cost

4.2 (3.4)

Note: Figures in parentheses are the respective amounts financed by the Bank loan. Works and Goods should be procured in accordance with World Bank Guidelines: Procurement under JERD and IDA Credits (Washington May 1992) and Services should be procured in accordance with World Bank Guidelines: Use of Consultants by World Bank Borrowers and by world Bank as Executing Agency (Washington, D.C., August 1981) a/ local shopping; b/materials, vehicle fuel and repairs, field trial inputs, services for demonstrations and travel allowances for which procurement is carried out efficiently under Loan No. 3036-MOR.

3.48 Civil Works. Contractsfor the constructionof houses and offices would be awardedthrough Local CompetitiveBidding(LCB) proceduresthat are acceptableto the Bank. This would reflect the generallysmall size of contractswith an averagevalue of aboutUS$200,000,the scatterednature of the project civil works, and the experienceof Bank-financedprojects in Morocco, in particularLSII1. 3.49 Goods. Contracts for the purchase of vehicles and laboratory, computer and audio-visual equipment would be awarded by the ORMVAs through International Competitive Bidding (ICB) procedures, in accordance with Bank guidelines and using the Bank's sample bidding documents. Qualifyingdomesticmanufacturerswould receivepreference in bid evaluationof 15% or the prevailing

- 25 -

importduty, whicheveris less. Contractsfor other equipment(mainlyagriculturalmachinery)estimated to cost less than US$300,000but more than US$30,000,could be awardedby the ORMVAsunder LCB proceduresacceptableto the Bank, as local suppliersrepresenta wide rangeof foreignmanufacturersand previousexperienceshowsbiddingto be competitive.Procurementof miscellaneoussuppliescostingless than US$30,000equivalentwould be made by the ORMVAsand DERDon the basis of local shopping with quotationsfrom at least three suppliers. 3.50 ConsultantServices. Contractsfor consultantservicesestimatedto total US$14.4 millionwould cover technicalassistanceand studies (US$11.5 million)and training (US$2.9 million). They wouldbe procured internationallyin accordancewith Bank guidelines. Joint venturesbetween foreign and local firms would be encouraged under arrangementsacceptable to the Bank. It is expected that local consultantswill provide about50% of the person-monthinputs required. 3.51 Contract Review. All bidding documents and awards of contracts estimated to cost the equivalentof US$500,000or more for civil works, and US$300,000or more for goods would require the Bank's prior approval. Consultantcontractsestimatedto cost the equivalentof US$50,000or more wouldrequirethe Bank's prior approvalas wouldall terms of reference, irrespectiveof contractamount. These arrangementswould representprior reviewby the Bank of about 80% of the total estimatedvalue of contracts. The other contracts would be subjectto randompost-reviewby the Bank after contract award, in the course of supervisionmissions. G. Disbursements

3.52 DisbursementSchedule. It is anticipatedthat the proposedBank loan wouldbe disbursedover eight fiscal years; see Table 3.5 below and annex 8 for the detailed disbursement schedule. The disbursementprofile for agricultural developmentprojects in Morocco is nine years with 78% being disbursedover sevenyears, whilefor irrigationprojectsimplementedby the ORMVAthe periodis nearer sevenyears. In view of LSIIl's confirmationof the ORMVAs' satisfactoryimplementationcapacityfor physicalinfrastructureand the fact that the project is not expectedto suffer the budgetaryproblemsfaced by the earlier agriculturalprojects,the proposedperiodis consideredrealistic. Theproposedclosingdate of the loan would be June 30, 2000. Table 3.5: Disbursementschedule (US$ million) IBRD

Fiscal

Year

1994

1995

1996

1997

1998

1999

2000

2001

1.5

1.8

4.6

6.0

5.8

3.2

I.5

0.6

.3

7.9

13.9

19.7

22.9

24.4

25.0

Disbursements Annual Cumulative

3.53 DisbursementProcedures. Disbursementwould be made after receipt of full documentation except for goods and works provided under contracts valued below US$100,000equivalent and for eligibleincrementaloperatingcosts, for which disbursementswouldbe made againstcertifiedStatements of Expenditures(SOE). The SOE would be certifiedby the executingagency involved. Supporting

- 26 documentationfor SOEs wouldbe retainedby the implementingagencyand wouldbe made availablefor inspectionduring Bank supervisionmissionsand by externalauditors. Disbursementcategories,amounts allocatedand share of expendituresfinanced would be as indicatedin Table 3.6. Table 3.6: DisbursementCategories Category

Amountof Loan Allocated (US$ nullion)

Percentage of Expenditureto be Financed

Civil Works

1.10

86%

Equipment/Vehicles (a) Part A (b) Part B

6.40 0.14

)100% of foreign expenditures and )65% of local expenditures for items )procured localy

Training, Technical Assistance & Studies (a) Part A (b) Part B

8.40 0.90

)100%

Incremental Operating

5.60

80% 1994 & 1995, 50% 1996 & 1997, and 25% thereafter

Cost

6

UnaHocated

2.46

TOTAL

25.00

3.54 Special Account. To facilitate implementation,a Special Account would be opened in the Treasuryfor the purpose of the project. The Bank would depositan initial sum of up to US$1.5 million correspondingto the Bank's share of 3-4 months project needs. Assurances were obtained during negotiationsthat disbursementoperationsfrom the Special Accountwould be made in accordancewith Bank guidelinesand existingarrangementsagreed upon by the Bank and MOF. 3.55 Retroactive Financingof up to 10% of the loan amount against payments made for eligible expendituresbeforethe date of the Loan Agreementbut after March 1, 1993,is includedto cover actions already started. IV. PROJECT IMPLEMENTATION A. Project Organization 4.01 Project Coordination. The project would be implementedby the Ministry of Agriculture (MAMVA)throughthe ORMVAs. The Education,Researchand DevelopmentDepartment(DERD)has been designatedby MAMVAto coordinateimplementationand the interventionof the other concerned centraldepartmentscovering Crop Production(DPV), Livestock(DE), Public AgriculturalEnterprises 6/ Materials, vehiclefuel and spare parts, field trial inputs, servicesfor demonstrationsand travel allowances.

- 27 -

andFarmerOrganizations(DAP),Planningand EconomicAffairs(DPAE), Crop Protection(DPVCTRF) and Rural Engineering(DER)(see organigram,chart 1). A project steeringcommitteewouldbe formed by representativesof these directorates and the nine ORMVAwhich would meet twice a year to: (i) coordinatethe LSII2 and IAASPactivities;(ii) reviewthe programsevery six months; and (iii) monitor the results. The existing National Project CoordinationCommittee(CNCP) set up under LSII1 would provide for interministerialcoordination. CNCP, which meets once a year, is chaired by MAMVA's secretary general and includesthe heads of MAMVAand Ministry of Financedepartmentsinvolved in both LSII2 and the proposedproject. 4.02 ORMVAOrganization. The projectwouldbe implementedby the nine ORMVAsfollowingthe new ORMVA organization to be implementedunder LSII2. The new organization structure in the Doukkala, Gharb, Loukkos and Tadla was approved prior to negotiationsof LSII2. The principal innovationscomparedwith the previous organizationare the bringingtogether of the three agricultural services under one department and the creation of a separate departmentto handle human resources. Plans for the reorganizationof the other five ORMVAwill be prepared and implementedin the course of LSII2 (para.3.42). The necessarystudiesare expectedto be committedby end 1993and the proposals shouldbe availableby mid-1995. 4.03 Project Unit. A project unit wouldbe establishedin DERDto provide a point of coordination for the serviceslinks with MAMVA,to handlethe centralprocurementof consultantserviceswhere there would be technical and economicadvantagesfrom grouping demands(e.g. for the diagnostic studies, para.3.13) and to act as a point of liaison with the Bank. This unit would be attachedto the Director, DERD. The establishmentof the unit and appointmentof staff with qualificationsand experience acceptableto the Bank would be a conditionof loan effectiveness. B. Organizationof AgriculturalServices 4.04 AgriculturalDevelopmentDepartment. Under the reorganizationagreed upon for the four ORMVAs studied to date (Doukkala, Gharb, Loukkos and Tadla), the work of the three existing agricultural services (SPV, SPA and SVOP) together with a fourth service for developmentstudies (SEDA)will be coordinatedby a Directorfor AgriculturalDevelopmentwho will report to the Director of the ORMVA(see chart 2 for proposedorganization). In respect of agriculturalsupport services, the main features of this reorganization are: (a) the coordinationof the three existing services (crop production, livestock and extension) under one director; (b) the merging of the developmentcenters (CMV) and livestock posts into one agricultural developmentcenter (CDA) with increased focus on agriculturalextension; (c) the transfer of staff from headquartersto the sub-divisionlevel - target ratio 20% HQ : 80% field sub-divisionor arrondissementand CDA; (d) the placing of technical specialists in the sub-divisions;and (e) a reduction in the administrativetasks of extensionstaff. Also, a human resources department will be created to handle staff redeploymentand training plans. MAMVA's commitmentto the essentialfeaturesof the reorganization(the appointmentof a Director of Agriculture. the decentralizationof services with 80% of staff to be located at the sub-divisionand extensionagents to be relievedof administrativeduties)was obtainedduring negotiations.

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4.05 The settingup of the new organization,the designationof the Directors of Agriculturein each of the four ORMVA and the finalizationof staffing plans for the agricultural services of the four 7 were completedprior to ORMVAtogether with provisionalstaffingplans for the other five ORMVA negotiations. The signature of contracts for carrying out studies on the five ORMVA would be a conditionfor effectivenessof the loan. Assuranceswere obtainedduring negotiationsthat the conclusions of these studies (whichare scheduledto be completedby mid-1995)would be discussedwith the Bank. 4.06 The effectivenessof the new organizationwould be monitoredby each ORMVAwho wouldbe expectedto adjustit to their own particularcircumstancesas necessary. Withintwo years of the project start-upand during the mid-termreview (para.4.14)experienceswouldbe shared and the necessaryfine tuning effected. Assurancesto this effect were obtained during negotiations. 4.07 Research. The adaptiveresearch componentwould be implementedby the Crop and Animal ProductionServices (SPV and SPA) in each ORMVA. Proposals for the adaptiveresearch program wouldcome from the users throughthe existingregionalcommittees(para.2.17) on which the profession and the major research institutesare represented. These proposals would be screened at the center by an existing committee (CNORA) for which MAMVA's Education, Research and Development Departmentprovides the secretariat. In each ORMVA,the research program would be coordinatedby the adaptiveresearch unit to be set up in the SEDA (chart 2). One field station (SEMVA) in each ORMVAwould be selectedto take the lead in the managementof the field researchprogram. 4.08 AgriculturalExtension. The agriculturalextensioncomponentwould be implementedby the ORMVAs' ExtensionService(SVOP)with the close support of the SPV and SPA which would provide much of the specialisttechnical expertise. The field extension agents would be attachedto the CDAs which are in turn administrativelyattached to the sub-divisionsunder the Director of Agriculture. Technicallythe extensionstaff are responsibleto their supervisorswho depend on the extensionunit withinthe SVOP. Specialistsupport wouldbe providedby the technical specialistswho will be located in the technical support units in each sub-division, the type and number of which vary according to agriculturalcharacteristicsof the ORMVA. 4.09 Womens'Services. The women's extensionprogram wouldbe implementedby an existingunit withinthe SVOP. The retentionof young qualifiedfemale staff to work in the more remote areas has proved difficultin the past and the turnoverhas been high. The recruitmentof village womento act as a type of "para-extensionist"has been tried in a pilot project funded by GTZ with some success and a similar approachwould be tested in the project. 4.10 Farmers' Organizations. This componentwould be managedby the DDA in each ORMVA which would set up a Task Force, made up of ORMVAmanagersand representativesof the profession, to handlethe strategicaspectsof regional analysisand planning. Implementationwould be handled by the Farmers' Organizations(OP) unit (withinthe extensionservice) in collaborationwith the crop and animalproductionservices. The task force would be drawn from amongthe electedrepresentativesof OP in the region(Cooperatives,Farmers' Associationsand other professionalorganizations),ORMVAs' managers,productgroups, electedmembersof the Chambersof Agricultureand private banks and agroindustry. The composition,the nominatingprocess and the chairmanshipwouldbe decidedlocally. This

7/

Haouz, Moulouya,Ouarzazate,Souss-Massaand Tafilalet.

- 29 -

task force would undertake the conceptualization,planning and monitoring of actions to promote the developmentof Farmers' Organizations. Specificallyit would: (i) elaborate a regional analysisof the status of OP; (ii) select the priority product lines; (iii) approve the annual technical and financial interventionprogram; (iv) propose the transfer of responsibilitiesfrom the ORMVA to the OP; (v) examineindividualdemands; and (vi) approvecontracts betweenthe OP and ORMVA. 4.11 The DDA would implementthe technicaland financialplan through its three field services:the OP unit within the extension service would coordinate the interventionsand provide training and managementadvice, whilethe crop and livestockproductionservice would providetechnical advice. 4.12 Monitoringand Evaluation. Under the new organization,responsibilityfor monitoring and evaluationof the serviceswouldrest with the SEDA, the fourth serviceunder the Directorof Agriculture. This unit would handle the monitoringof project executionby the three services, the monitoring and evaluationof results at the farm level and ad hoc studies. The methodologywouldbe developedby four of the central departments(DPV, DE, DERD and DPAE) concerned on the basis of the consultants' report which will be availablebefore negotiations. C. Supervisionand Mid-TermReview 4.13 Banksupervisioninput into key activitiesis indicatedin Annex 11. This is in additionto regular supervisionneeds for the reviewof progressreports, procurement,correspondenceestimatedat 2-3 staffweeksper year. For the total Project implementationperiod, supervisionneeds are estimatedat 107staffweeks. The main lines of this supervisionwere discussedwith the Borrower. The project unit would be responsiblefor the preparationof semi-annualreports on physicaland financialprogress in a format acceptableto the Bank. This unit would also coordinatearrangementsfor Banksupervisionmissionsand for providinginformationrequired. Missionbriefingson arrival and wrap-upmeetingswill normallybe held with representativesof the Ministriesof Agriculture and of Finance. Before departure, the Bank mission will leave in the field an Aide-Memoirewith its conclusionsand recommendations. 4.14 The Governmentand the Bank wouldcarry out a Mid-TermReview of the project at the end of the second harvest year. The objectivesof this review would be to : (i) measure progress with each componentagainst qualitativeand quantitativetargets (see annex 9 for indicativelist of indices); (ii) assess the impactof the new organizationon the effectivenessof the agriculturalservicesand effect the necessaryfine tuning;(iii) ascertainwhetherthe ORMVAsare carryingout their undertakingsand, if not, what remediesshould be exercised; and (iv) determinenecessaryadjustmentsto project activities. The Reviewwouldalso assessthe opportunitiesfor introducinguser fees for certain servicessuch as the farm managementadvisory service and prepare a schedule for their introduction. Assurancesto this effect were obtainedduring negotiations. D. Accountsand Audit 4.15 The ORMVAswillestablishand maintainseparate project-relatedaccounts. Suchaccountsshall be maintainedin accordancewith soundand internationallyrecognizedaccountingprinciplesand practices satisfactoryto the Bank. An auditor's opinionand report satisfactoryto the Bank on such statementswill be provided within six months of the close of the project year. The auditor's report will include a statementon the reliabilityof statementof expendituresas a basis for loan disbursements,on the Special Account,and on compliancewith financialcovenants. The foregoingProject accountingand financial

-

30 -

reporting, and auditing arrangementsshould provide adequateand timely informationto the Bank for supervisionof the Project. Assurancesto this effect were obtained duriny negotiations. V. PROJECT IMPACT A. Project Benefits 5.01 The project would be expected to have a substantial impacton agricultural production in the irrigatedand adjacentrainfed areas complementingthe efforts to be made under LSII2 to better manage the use of waterresources. Some 125,000farm familieswith land in the areas under modern, large scale irrigationwould benefit directly as would at least a further 75,000 farm families with land in adjacent rainfed areas. Beneficiarieswould includethe manysmall farmers (over 60 percent of farms have less than 2 ha) on the irrigation schemes and the women who are responsible for much of the livestock managementon irrigated farms. The results of the adaptiveresearch work would also be expectedto provide some spin off to farmers on the 800,000 ha in traditional, small and medium scale irrigation schemesthroughoutthe country; the majorityof these are also small farmers. 5.02 An economic rate or return has not been calculated due to the service and institutional developmentnature of the project components. However, where ex-post studieshave been attemptedin Latin America, America, Asia and Africa, the returns showedhighlypositive results in nearly all cases with economicrates of return ranging from 14% to more than 500%.5 Furthermore, the increase in growth of total value added in the area under the ORMVAjurisdictionneededto offset the cost increase arising from the incrementalinvestmentand operatingcosts is only 0.1 % (totalvalue added is estimated at about 8 billion Dirhams, or US$0.9 billion9). In practice, the impact of the project on growth in added value would be expectedto significantlyexceed this level. 5.03 The projectwouldalso promotea significantinstitutionalreformof the ORMVAwith an eventual impacton ORMVAs' operating costs through more cost-effectiveoperationand the eventualtransfer of some activities to the farmer organizationsand agro-industry. An essential step in the planning of ORMVAs' extension activities would be an analysisof the capacity of the various public and private organizationsto take on certaintasks with the ORMVAbecomingthe supplierof last resort. The training program would also have a wider impactby creating a source of trained staff better able to transfer to the private sector over time. B. Impact on Recurrent Costs 5.04 The project would lead to increased activity which would raise the annual operating costs (includingbuilding,vehicleand equipmentreplacementcalculatedat 4%, 14% and 12.5%, respectively) for the agriculturalservicesby about 20% overall, in the short term. In the mediumterm, this increase

a/

See Birkhauser,D.,R.E.Evenson,and G.Feder. 1988. 7he Economic Impact of Agricultural Extension: A Review. World Bank Working Paper.

U1

Calculatedat 8000 Dh/ha on 800,000 ha of irrigatedland under the ORMVAsand 2000 DH/ha on 750,000 ha of rainfed land in the Doukkala, Gharb and Loukkos;the remainderof the rainfed land receives only low and very variablerainfall.

- 31 in costs will be partly offset by the introductionof user fees and the transfer of certain servicesto the privatesector. Sinceagriculturehas been exoneratedfrom direct taxationto the year 2050, the Treasury 0 would benefit only from taxes on goods purchasedby the project." C. Cost Recovery 5.05 Initially, user fees would be applied for specificservices such as soils and plant analysis,but it wouldbe prematureto considerchargingfor extensionservicesin the short term, that is, until the quality of advice warranted it. While, in the medium term, it would be possibleto recover costs on the farm managementadvisory service (now being tested in the Loukkos and to be extended to other ORMVA under the project), extensionstaff will needconsiderabletrainingto get them to the level at which farmers will be prepared to pay for their services. The opportunities for direct cost recovery would be reconsideredat the time of the Mid-TermReview(para. 4.13). Althoughthe opportunitiesfor direct cost recovery are limited in the short term, the approachproposed in the extensioncomponent(para. 3.14) to identifythose tasksthat shouldbe providedby ORMVAand those that are being providedincreasingly by the private sector should keep public service costs to a minimum. D. Environmental Impact 5.06 The project would assist farmers to make better use of fertilizer and crop protectionchemicals and to use scarce water resources more efficiently. Fertilizer nitrate has been identifiedas a pollutant in groundwaterin several LSI areas and the introductionof systematicsoil testing as proposed by the project is an essential first step to reducing the present wasteful use of fertilizer. Crop protection chemicalsare also used in a wastefulmanner in the countryand the project wouldencouragethe adoption of integratedpest managementto make better use of these chemicals. ORMVAextension staff would be trained with the aid of MAMVA's crop protectiondepartment. Monitoringof the impact of these measuresis providedfor under LSII2. The project would also providethe essentialcomplementto LSII2 in the more efficient use of water resources. Improvedtechniques(land levelling and introductionof water savingtechniquesin field distributionsystems)will be testedby ORMVAs' irrigationfield services in conjunctionwith the extensionservices, who will subsequentlybe responsiblefor demonstratingand advisingfarmerson their uptake. E. Risks 5.07 The mainrisks relate to the difficultyin changingthe operatingpracticesof ninediverselylocated semi-autonomousorganizations,to the possibilityof farmers' slow adoptionof some new technologyand to the Government'scapacity to assure continuityof funding. First, the agricultural services of the ORMVAhave, until recently, beenresponsibleprimarilyfor implementinggovernmentpolicy in respect of sugar and cottoncrops and manyof them are unaccustomedand poorly trained to take on their new, advisory role. To minimize this risk, the project provides for the services' reorganizationto be implementedprior to investments,for the skills gap analysisto be up-dated prior to redeployingstaff, and for the considerabletraining requiredto lift the technicallevel (practical as well as theory)of staff, whiletechnical assistanceis includedto help developthe new approachesto workingwith, rather than

10/

A study of taxation indicatesthat indirecttaxationamountedto as much as 19 % of value added, a sum comparableto other sectors.

- 32 in parallelto the private sector. Second, structuralproblemsin land tenure or lack of marketsmay limit the uptake of new technologyand improvementin farm incomes. The project provides for diagnostic studies prior to better identify farmers' real constraints and the points at which research should be focussed. Furthermore,the project will be complementedby actions(suchas work on the collectiveland problem in the Gharb, the strengtheningof security of tenure, etc.) to be supported by forthcoming projects, namely:the plannedASIL2on land measuresand the Agro-Industryproject expectedto follow the recent sector work. Finally, the ORMVAare dependentupon the governmentbudgetfor maintaining their agriculturalservices. Irregular annual provisionsand delays in their release each year could lead to difficultiesin maintainingservices. However,the funding of agriculturalservicesin the irrigatedareas now forms part of the funding package for the National Irrigation Plan (para. 1.03) to which the Governmentgives high priority. VI. AGREEMENTSREACHIEDAND RECOMMENDATIONS 6.01

6.02

It would be a condition of loan effectiveness that: (a)

theORMVAsof Haouz, Moulouya,Ouarzazate,Souss-Massaand Tafilaletsigncontracts for carrying out organizationalstudies (para. 4.05);

(b)

the ORMVAsfinalize the three-year researchprogram (para. 3.09); and

(c)

the Governmentestablishthe project unit in DERD and appoint staff with qualifications and experienceacceptableto the Bank (para. 4.03).

Assurances were obtained during negotiations that Governmentand/or ORMVAswould: (a)

up-date three-year rolling programs for adaptive research annually by 30 September (para. 3.09);

(b)

undertakediagnosticstudiesby the second year of project (para. 3.13);

(c)

prepare annualextensionprogram for year ahead by 30 September(para. 3.14);

(d)

recruit consultantsby September 30, 1994, to evaluateprogram with the Chambersof Agricultureand prepare proposalsfor future cooperation(para 3.17);

(e)

update the skills gap analysis, staff redeploymentprogram and prepare revised training programby September30, 1994(para. 3.26);

(f)

make commercialchargesfor soils analysisand follow separateaccounting(para 3.31);

(g)

establishconventionswith DPVCTRFfor assistancewithpest warningand introduceIPM practicesby December 31, 1994(para. 3.33);

- 33 (h)

reviewfunding proposalsfor Chambersof Agriculturewith the Bank by December31, 1994,and prepare revisionsto farmer associations'statuteby June 30, 1995(para. 3.36);

(i)

set up task forces by December 31, 1994, with compositionacceptableto Government and Bank (3.37);

(j)

prepare program for take-over by the CRA of ORMVA funded directors and bookkeepers by June 30, 1995and completeby the end of the Project (para 3.38);

(k)

prepare conclusionsof organizationstudies on the five ORMVAs and discuss with the Bank by June 30, 1995 (para. 4.05);

(1)

carry out a study on the introductionof user fees for certain servicesby December 31, 1995 (para. 4.14); and

(m)

carry out a Mid-TermReviewby December 31, 1996(para. 4.14).

6.03 Based on the above agreements,the proposedproject would be suitable for a Bank loan of US$25 millionto the Kingdom of Morocco for a term of 20 years includinga five year grace period. The project would be expectedto be completedby June 30, 1999.

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34

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ANNZX

Page

I

1 of 6

STAFF APPRAISAL RBPORT KINGDOM OF MOROCCO IRRIGATED AREAS AGRICULTURALSZRVICES PROJECT Aaricultural

Production

and

Potential

A. The Irriaated Natural

in

the

Irriaated

Areas

Areas

Resources

nine LSI perimeters (see map) involve capital-intensive public 1. Morocco's entirely based on They are almost for hydraulic infrastructure. investments behind large dams and are located in several different surface water stored agro-climatic zones. The perimeters grouped according to the rainfall zone in are as follows: which they are located, Rainfall

>450 mm

LSI perimeters

Rainfed Potential

Gharb,

Important

Loukkos

250-350 mm

Doukkala,

150-300

Haouz, Moulouya, Souss-Massa

Limited to Negligible

Ouarzazate, Tafilalet

Oasis agriculture

mm