SCCD : N.G.

AFRICAN DEVELOPMENT FUND Language: English Original: English

REPUBLIC OF SENEGAL

PROJECT TO SUPPORT LOCAL SMALL-SCALE IRRIGATION SUPPORT (PAPIL)

APPRAISAL REPORT

DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT OCAR CENTRAL WEST REGION JULY 2003

TABLE OF CONTENTS

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Project comparative socio-economic indicators, Project information Sheet, Currency (i – ix) Equivalents, Units of measure, List of tables, List of annexes, Acronyms and abbreviations, Executive Summary, Project Matrix 1. PROJECT ORIGIN AND BACKGROUND 1 2. THE RURAL SECTOR 1 2.1. Principal Features 1 2.2. Rural Development strategy 2 2.3. Land Tenure System 3 2.4. Poverty Situation and Gender Issues 3 2.5. Institutional Framework 4 2.6. Constraints and Assets 7 2.7. Donor Intervention 8 3. THE IRRIGATION SUB-SECTOR 10 4. THE PROJECT 11 4.1. Design and Basis 11 4.2. Project Area and Beneficiaries 12 4.3. Strategic Context 14 4.4. Project Objectives 15 4.5. Project Description 15 4.6. Production, Markets and Prices 20 4.7. Impact on the Environment 21 4.8. Social Impact 22 4.9. Project Costs 23 4.10. Sources of Finance and Schedule of Expenditure 24 5. PROJECT IMPLEMENTATION 25 5.1. Executing Agency 25 5.2. Institutional Arrangements 26 5.3. Implementation and Supervision Schedule 27 5.4. Arrangements for Procurement of Goods and Services 28 5.5. Disbursement 30 5.6. Monitoring and Evaluation 31 5.7. Financial, Reporting and Audit 31 5.8. Aid Coordination 31 6. PROJECT RISK AND SUSTAINABILITY 32 6.1. Recurrent Expenditure 32 6.2. Project Sustainability 32 6.3. Principal Risks and Mitigating Measures 33 7. PROJECT BENEFITS 39

7.1. Financial Analysis 33 7.2. Economic Analysis 33 7.3. Analysis of Social Impact 34 7.4. Sensitivity Analysis 34 8. CONCLUSIONS AND RECOMMENDATIONS 35 8.1. Conclusions 35 8.2. Recommendations and Conditions for Loan Approval 35 ANNEXES ____________________________________________________________________________

This report has been prepared by Messrs. G. TIBALDESCHI, Agronomist- Environmentalist, X. BOULENGER, Irrigation Engineer, Mrs. R. NAYE BA, Gender Specialist, and a consultant (Agro-economist), following their mission to Senegal in June 2003. Further information can be obtained from Mr. G. TIBALDESCHI (Extension 2269), Mr. X. BOULENGER (Extension 2388), Mrs. R. BA NAYE (Extension 2590), Mr. E. DOTE, Division Manager, OCAR.1 Extension 2109), or Mr. C.R. SPENCER, Director OCAR (Extension 2036). ____________________________________________________________________________

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AFRICAN DEVELOPMENT FUND TEMPORARY RELOCATION AGENCY

BP 323 - 1002 TUNIS BELVEDERE - TUNISIA Tel.: (216) 71 333 511; Fax: (216) 71 351 933

PROJECT INFORMATION SHEET

Date: July 2003

The information given hereunder is intended to provide some guidance to prospective

suppliers, contractors, consultants and all persons interested in the procurement of goods and services for projects approved by the Board of Directors of the Bank Group. More detailed information may be obtained from the Executing Agency of the Borrower. 1. COUNTRY : Senegal 2. PROJECT TITLE : Project to Support Local Small-scale Irrigation

(PAPIL) 3. LOCATION : Fatick, Kolda and Tambacounda Regions 4. BORROWER : Republic of Senegal 5. EXECUTING AGENCY : Ministry of Agriculture and Water Resource Management Agricultural Engineering Department BP 2041 - Dakar - SENEGAL Tel.: (+ 221) 832 55 96 Fax: (+ 221) 832 08 69 6. PROJECT DESCRIPTION : The am of this project is to promote small-scale irrigation at the local level, through rural communities and producer groups, which will be directly involved in implementing the operations and will be supported to that end. The project concerns 8 departments in the Fatick, Kolda and Tambacounda regions. Using a participatory approach, it will provide for 120 small structures and development works for the control of run-off water (small dams, weirs, overdeepening of ponds, bottomlands, small irrigated areas, etc), restore over 2,000 ha of deteriorated land, and improve the conditions of living of the populations of the 87 rural communities concerned. The principal project components are: (A) Sustainable irrigation and pastoral development, (B) Capacity building and (C) Project Management.

7. PROCUREMENT OF GOODS AND SERVICES: Procurement of works, goods and services will be in accordance with the ADF regulations, as follows:

(i) Works: National Competitive Bidding for structural water control works (major anti-salt dykes, weirs and retention dykes); for development work (digging out ponds, development of irrigated areas); for works to improve feeder/access roads, and construction of crossing points; and for piezometers. Other modes of procurement for the highly labour-intensive work for

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participatory development and protection of the environment; a manual will be prepared spelling out the procedures for award of the different contracts. (ii) Goods: Local shopping for vehicles and motorcycles, computer equipment, furniture and other items. (iii) Services: Selection based on a shortlist for recruitment of firms to conduct the engineering studies, control/inspect large-scale work, studies and control of track and road work, close supervision of and assistance in community action and support to CR, technical assistance and training, introduction of an accounting system and project audit services for the project. (iv) Other: Direct Negotiation with ISRA concerning development research activities; with ANCAR, SODEFITEX, lSODAGRI, for advisory support, extension and marketing; with the de-concentrated MAH offices for certain control activities; and with CSE for environmental monitoring. (v) Local Development Fund: The works goods and services eligible for financing by the Local investment funds will be procured according to the modalities defined in a manual of procedure. 8. TOTAL PROJECT COST : UA 16.28 million - Foreign Exchange : UA 9.29 million - Local Currency : UA 6.99 million 9. BANK GROUP LOAN : - ADF Foreign exchange : UA 9.29 million Local currency : UA 5.02 million 10. OTHER SOUCRCES OF FINANCE: - Government : UA 1.97 million 11. DATE OF APPROVAL : October 2003 12. PROBABLE START-UP DATE AND DURATION OF PROJECT : July 2004; 5years 13. CONSULTANCY SERVICES REQUIRED:

- Engineering studies for certain development works; - Control/inspection and surveillance of works (structures, tracks); - Close supervision and assistance of Rural Communities in their role of project

ownership; - AE Technical Assistance / Project management; - Setting up an accounting system, annual audits; mid-term review.

14. ENVIRONMENTAL CATEGORY: The project is classified in environmental category 2.

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CURRENCY EQUIVALENTS (June 2003)

Currency Unit = CFA Franc

1 UA = 787.877 FCFA

FISCAL YEAR

1 January - 31 December

CURRENCY UNITS

Metric System

LIST OF TABLES

Table 4.1 Summary cost estimates by component Table 4.2 Summary cost estimates by category Table 4.3 Summary cost estimates by source of finance Table 4.4 Distribution of costs by source of finance and by component Table 4.5 Distribution of costs by source of finance and by category Table 4.6 Schedule of expenditure by component Table 4.7 Schedule of expenditure by source of finance Table 5.1 Implementation schedule Table 5.2 Procurement Arrangements Table 6.1 Recurrent Expenditure

LIST OF ANNEXES

Annex 1 List of Bank Group Operations in Senegal Annex 2 Map of the Project Area Annex 3 Project Organization Chart Annex 4 Details of Categories of Expenditure Annex 5 Calculation of Economic Rate of Return and Sensitivity Test

List of additional Annexes Provided in Volume 2

Annex A Summary Environmental and social Management Plan Annex B Detailed Costs Annex C Job Profiles for project coordination Annex D Operating Models and Details of Economic and Financial Analysis Annex E Decentralization and Project Implementation Annex F Technical Description of Types of development and

Infrastructure by region Annex G Land Tenure System and Modalities for access to developed areas Annex H Guidelines in Manual of Procedures

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ACRONYMS AND ABREVIATIONS ABEDA : Arab Bank for Economic Development ADB : African Development Bank ADF : African Development Fund AE : Agricultural engineering AFD : Agence Française de Développement AFVP : Association Française des Volontaires du Progrès (French volunteer aid Association) ANCAR : Agence Nationale pour le Conseil Agricole et Rural (National Agricultural and Rural Advisory ARD : Agence Régionale de Développement (Regional Development Agency) ASPRODEB : Ass. sénégalaise pour la promotion de petits projets de développ. à la base (Senegalese Association for promotion of small-scale grassroot development projects) CERP : Centre d’Expansion Rural Polyvalent (Polyvalent rural extension center) CR : Communauté Rurale (Rural community) CRC : Comité Régional de Concertation (Regional Consultation Committee) CSE : Centre du Suivi Ecologique (Ecological monitoring center) DCEF : Direction de la Coopération Economique et Financière (Economic and financial Cooperation Department) DFS : Decentralized Finance Systems DPD : Detailed Preliminary Draft DRDR : Direction Régionale de Développement Rural (Regional Rural Development Department) ERR : Economic Rate of Return ESMP : Economic and Social Management Plan EU : European Union FAO : United Nations Food and Agriculture Organization FDL : Fonds de Développement Local (Local Development Fund) GADEC : Groupe d’action pour le développement communautaire (Action group for community development) GTZ : Deutsche Gesellschaft für Technische Zusammenarbeit IDB : Islamic Development Bank ISRA : Institut Sénégalais de Recherche Agricole (Senegalese institute of Agricultural research) LS : Local Shopping MAE : (ex) Ministère de l’Agriculture et de l’Elevage (ex-) ministry of Agriculture and Stockbreeding) MAH: Ministère de l’Agriculture et de l’Hydraulique (Ministry of Agriculture and Water Resource Management) NCB : National Competitive Bidding NEPAD: New partnership for Africa’s development NGO: Non Governmental organization PADDEL : Project d’appui a la Decentralization et au Développement Local PAGERNA : Projet d’auto-promotion pour la gestion des ressources naturelles (Project for auto promotion for management of natural Resources) PAPIL : Projet d’appui à la petite irrigation locale (Project to support Local Small-scale Irrigation Support) PCU : Project Coordination Unit PLCP : Projet de Lutte Contre la Pauvreté (Poverty Reduction Project) PLD : Pan local de developpement (Local Development Plan)

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PMIA : Projet de Modernisation et d’Intensification Agricole (Agriculture Modernization and Intensification project) PNIR : Programme National d’Infrastructures Rurales (National Rural Infrastructure Programme) PRSP : Poverty Reduction Strategy Paper PSAOP : Prog. de Soutien aux services Agricoles et d’appui aux Organ. de Producteurs (Project for support to Agricultural services and producer organizations) PSIDEL : Programme de soutien aux initiatives de développement local (Project to support local development initiatives) PSSA : Programme Spéciale pour la Sécurité Alimentaire (Special food security programme) SAED : Société Nationale d’Aménagement des terres du Delta (National company for development of Delta land) SODAGRI : Société de Développement d’Aménagement Agricole et Industriel (Agricultural and Industrial Infrastructure Development Company) SODEFITEX : Société pour le développement des fibres textiles (Textile development Company) SPR : Soil Protection and Reclamation SWC : Soil and Water Conservation SYSCOA : Système comptable ouest africain (West African Accounting System) TD : Tender documents TLU : Tropical Livestock Unit

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EXECUTIVE SUMMARY 1. Project Background In order to reduce the vulnerability of agricultural activities, particularly small family farms, the Government has opted to control the water resources available on the territory. ADF thus financed an inventory of dam sites for the southern part of the country and a feasibility study on ten sites. Three valleys (Médina Djikoye, Médina Namo, Vélingara Pakane) have been identified for the creation of sustainable conditions for surface water mobilization for development. The detailed preliminary studies on these sites were prepared on TAF financing from June 2001 to May 2003. Within the same period (2002), a team from the FAO Investment Center Division identified a project based on the concept of «small-scale irrigation», with a component concerning support for irrigation of farming areas using runoff surface water in the Tambacounda region. Against this background, the Senegalese authorities presented to the Bank in early 2003, two requests for the financing of the “3 Dams” project and the “small-scale irrigation “ project. It is was in response to and for the examination of these two requests that a Bank mission visited Senegal in June 2003, to appraise a global project for the channeling of run-off water for development purposes. 2. Loan Objective The ADF loan, for an amount of UA 14.31 million, representing UA 87.9 % of the total cost of the project will be used to finance 100 % of the foreign exchange costs and 71.8 % of the local currency expenditure. 3. Project Aim and Objective The sector objective of the project is to contribute to food security by developing small-scale irrigation at the local level. The specific objective is to increase agricultural production on a sustainable basis. 4. Project Outputs The principal activities envisaged as part of the project are as follows: (I) improvement and extension of the small-scale irrigation schemes existing in the 3 valleys (280 ha); reclamation of salt land for rice farming; (2,000 ha); (iii) development of 21 livestock watering ponds; (iv) construction of approximately 30 small diversified structures for retention and control of surface water (480 ha); (v) development of 400 ha of bottomland rice farms; (vi) development of 10 small areas irrigated using pumping systems (50 ha); (vii) rehabilitation of 105 km of feeder/access tracks and roads; (viii) 300 ha of reforestation; (ix) protection by SWC/SCR of 450 ha of land; (x) organizational support and close supervision of 35 CR; (xi) advisory services and extension services in favor of 7,000 farms; and (xii) provision of social and economic infrastructure through a self-managed local development fund. 5. Project costs The total project cost, exclusive of taxes and duty, is estimated at CFAF 12,825 million, which is UA 16.28 million. This cost is made up of CFAF 7,317 million (UA 9.29 million) in foreign exchange and CFAF 5,508 million (UA 6.99 million) in local currency. A 5% physical contingency provision is applied to all the base costs, with the exception of those relating to staffing and the Local Development Fund. A price escalation provision has also been applied to all components in foreign exchange and local currency.

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6. Sources of Finance The ADF loan will cover 87% of total project costs, exclusive of taxes and duty, which is UA 14.31 million. This ADF contribution represents 100% of the foreign exchange costs and 71.8 % of the local currency costs. The Government’s contribution is CFAF 1,551 million, (UA 1.97 million), representing 12.1 % of the total project cost. It will comprise salaries and part of operating expenses, as well as the participation of the beneficiaries and rural communities in financing the development and other infrastructure, or certain works. 7. Project Implementation The project will be executed under the responsibility of the Agricultural Engineering Department of the Ministry of Water Resource Management. Three independent offices will be set up in the three regions of the project area (Fatick, Kolda et Tambacounda). The project will be implemented in close collaboration with the rural communities and groups concerned, which will be supported by specialized operators for the technical and financial execution of the works. ANCAR, SODEFITEX, SODAGRI and ISRA will provide assistance with regard to the extension work, advisory support and development research. The development and infrastructure projects will be initiated at the level of the villages and rural communities and validated by the regional consultation committees, made up of representatives of the principal public and private players of the region. A national Steering Committee, made up of representatives of local administrations, agricultural organizations and the agricultural ministries and operators concerned will oversee the implementation of the different project components, while a project coordination unit, based at Dakar will direct the entire set-up. 8. Conclusions and recommendations In the face of climatic hazards and soil deterioration, and with most of its surface run off water escaping its control, the productive capital of Senegal’s agricultural sector remains threatened and under-developed. The project, centering on small-scale irrigation and pastoral development, will secure incomes for over 7,000 farms, while building up the management capacity and professionalizing rural communities and village groups. The project will bring about a substantial increase in agricultural production and contribute to poverty alleviation and improve food security. It is designed to produce over 13,000 tons of cereal and raise the farmers’ incomes by as much as 70%, which would allow for significant changes in the households. It will also help improve the balance of payments, as it will notably make it possible to reduce rice imports, and thus secure foreign exchange savings in the order of two billion CFA Francs. The project will further lead to the creation of new permanent and temporary jobs, thereby limiting the rural exodus of the youth, and favor the emergence of women and their integration into the economic fabric. It is designed as a coherent framework with activities aimed at local improvement as well as natural resource development and conservation. As designed, the project is technically feasible and financially and economically viable. The economic rate of return is 16.3 %.

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PROJECT MATRIX

DESCRIPTION VERIFIABLE INDICATORS MODE DE VERIFICATION ASUMPTIONS AND RISKS

SECTOR OBJECTIVE Contribution to food security through the development of small-scale irrigation at the local level.

In 2008, the average consumption of calories by adult and by day attaining 2,600, and the incomes of at least 7,000 farms increased by over 70 %

• Statistics of organizations and Ministries and project reports

PROJECT OBJECTIVES Increase in agricultural production on a sustainable basis.

Additional production of at least 10,200 tonnes of rice, 540 tonnes of corn and 2,060 tonnes of vegetables and fruits in year 5.

• Reporting by the project and the technical units involved.

• ADF completion report

OUTPUTS Sustainable irrigation and pastoral development

1.1rrigation development in 3 Valleys 1.2 Anti-salt and pastoral development in Fatick Region 1.3 Small Irrigation Structures in Kolda Region 1.4 Diversified development n the de Tambacounda Region 1.5 Feeder roads to open up the developed areas 1.6 Protection of the Environment Planning and capacity building

2.1 Coordination and synergy with other parties involved 2.2 support for updating the PLD through the CR 2.3 Support for structuring and training of OPA and OCB 2.4 Application of FDL resources and management support to CR for management 2.5 Advisory support and extension services to producers 2.6 Support to advancement of women Project Management

3.1 Setting up project coordination mechanism 3.2 Recruitment of operators for activity implementation

1.1 140 ha developed and under production in the Djikoye Valley in year 5 1.1 1 weir constructed at Médina Namo and 100 ha developed in the valley in year 5 1.1 1 improved low sill built at Vélingara Pakane and 40 ha developed in year 3 1.2 1 anti-salt dyke and 1slab as a crossing point in the Dikoye Valley in year 3 1.2 2,000 ha of salt land reclaimed and improved in year 5 in Fatick Region 1.2 10 stock watering ponds constructed in Gossas department in year 5 1.3 20 sites (280 ha) and 6 ponds provided in Kolda and Vélingara departments in year 5 1.4 400 ha of bottomlands developed and under production (rice) in Kédougou department in year 5 1.4 10 small areas of a total of 50 ha developed at the border with Gambia in year 5 1.4 15 storage/retention structures constructed in Bakel and Tamba departments in year 5 1.5 105 kilometers of tracks to open up the territory constructed or rehabilitated in year 5 1.6 20 km of livestock corridors and 10 watering areas provided in year 5 1.6 300 ha of plantations and 450 ha of SWC/SPR conducted in year 5 2.1 Regional consultation committees (CRC) meet at least 4 times a year 2.2 At least 15 CR receive support (PLD) and training under the project in year 5 2.3 At least 120 groups, OPA and OCB structured and functional in year 5 2.4 1 FDL provided (year 2) to CR who make good use of it 2.5 Annual support of ANCAR, SODEFTITEX, SODAGRI in extension work 2.6 Support to marketing, training concerning HIV/AIDS and health aspects organized in year 2 3.1 1 CCP and 3 regional offices set up and functional in year 1 3.2 3 NGOs recruited at end year 1and planning, sensitization Training and environmental activities organized successfully from year 2

• Technical reports of works inspection firms

• Reports of the project coordination unit

• Technical assistance reports

• Consolidation of the

decentralized approach recommended, synergy with the other development partners

• No sources of

conflict between farmers and stockbreeders

KEY ACTIVITIES Sustainable agro pastoral development work Prior coordination, sensitization and information Conduct of engineering studies and preparation of TD Implementation of works contracts in liaison with the CR Participatory planning and capacity building Recruitment of operators and service providers (NGO) Signature of contracts and agreements Training activities, sensitization and outreach work Project Management Designation and establishment of PCU and regional offices Recruitment of technical assistance Accounting, monitoring evaluation, auditing system

DURATION/ RESOURCES

• Project Duration: 5 years

• Financial Resources: - ADF : UA 14.31 million - GVT and BEN. : UA 1.97 million

• Human Resources: 3 regional offices and 1 coordination unit (8 officers) 87 CR distributed in 8 departments, 3 Rural Development Agents on technical assistance contracts (30 p/m) de-concentrated technical services (DRDR, CERP, etc.) ANCAR, SODEFITEX, SODAGRI, ISRA, CSE NGOs, DFS, contractors, etc.

• Decree appointing managers of the Unit and regional offices

• Agreements signed with

specialized agencies

• The different project Contracts signed

• Project supervision and progress reports

• Smooth coordination of activities between the different partners (CCP, ARD, Regional offices, CR, technical units, NGO ANCAR, SODEFITEX, SODAGRI, etc.) and compliance with provisional schedule

1 PROJECT ORIGIN AND BACKGROUND 1.1 Situated at the extreme west of the African continent, Senegal is a Sahelian country with an area of 196.722 km2. Rainfall has been declining significantly for several years (200 mm in 30 years), and has decreased from over 1,100 mm/yr in the South to 300 mm/an in the north of the country. Despite an economic growth recovery during the past century, Senegal is classified amongst he least developed countries of the world, with its 2001 per capita income at 509 US dollars. Approximately 54% of the Senegalese population remains below the poverty line, and an estimated three-fourths of the country’s population is rural. Surveys conducted in the rural areas indicate that the factors of poverty most frequently cited by families relate to disruption of the traditional production system; drought, land degradation and salinization, lack of equipment and materials, flooding, parasites, etc 1.2 In the face of this worrying poverty situation, the Government in March 2002 adopted a Poverty Reduction Strategy Paper that broadly corresponds to the 10th Economic and Social Development Plan (ESDP) for 2002-2007, and the New Partnership for Africa’s Development (NEPAD). One of the principal impediments to sustainable growth and poverty reduction in the rural areas appears to be structural: over-dependence of agricultural activities on the climatic vagaries, largely owing to the insufficient water control. To remedy this situation, and, to build on the Senegal River Valley development, the Government seeks to further develop surface run-off water available in the territory and relatively abundant in the southern half of the country. In that context, ADF financed an inventory of the 121 dams sites in southern Senegal, and a feasibility study on ten sites presenting optimal water control potential and located in disadvantaged areas. Three valleys (Médina Djikoye, Médina Namo, Vélingara Pakane) were finally selected for the creation of sustainable conditions of mobilization and utilization of run-off water. The detailed preliminary studies of these sites were prepared with TAF resources from June 2001 to May 2003. 1.3 Within the same period as this study, a mission from the FAO Investment Center Division in 2002 identified, as part of the FAO/ADB cooperation programme, several projects in the rural sector eligible for Bank financing. A project based on the concept of « small-scale irrigation » was proposed, in three components one of which concerns support to irrigation using runoff water in the Tambacounda region. On these bases, the Senegalese authorities presented the Bank in early 2003, with two requests for the financing of the “3 Dams” project, studied on TAF financing and the “Small-scale irrigation” project identified by FAO. The objectives of these project include securing agricultural production, through suitable structures, particularly rice farming and market gardening, which are the preferred areas of the women of the southern part of the country. It was in response to these two requests that a Bank mission visited Senegal in June 2003, with a view to conducting the appraisal of an overall project for development of small-scale irrigation at the local level. 2 THE RURAL SECTOR 2.1 Principal Features 2.1.1 Whereas, the annual economic growth of the country has exceeded 5% on the average since 1996, the annual growth of the primary sector recorded approximately 3.6%, which is near to the annual population growth rate of (2.7 %). This led to a decrease in the primary sector contribution to GDP, which was 18% for 2000, down from 20% in the period 1995 to 1998. This limited contribution of the agriculture sector to growth is due notably to (i) the predominance of groundnut production and the poor performances in that sector; (ii) the lack of real diversification of agricultural activities; and (iii) insufficient basic infrastructure. The agricultural sector’s share of exports remains substantial, especially for groundnut and horticultural production, and, excluding fishery production, it brings in 12% of export earnings. Agricultural imports (primarily rice) represent 16% of total imports.

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2.1.2 The arable areas represent 3.8 million ha, or 19 % of the country’s territory, with 2.5 million ha cultivated each year. The crops are essentially rain fed, with irrigated crops covering no more than 3% of cultivated land and flood recession planting, 1%. Most of the cultivated land is in the groundnut basin (71%) and in Casamance (12 %). There are an estimated 437,000 farms in the country (outside the Ziguinchor region). For all the production systems combined, the four main cereal crops are millet/sorghum (approximately 1 million ha), rice (96,000 ha) and corn (70.000 ha). Cereal production has attained an average of 930,000t for the last ten crop years, with marked fluctuations from year to year and depending on the rainfall. Over the past five years, the rate of coverage of cereal needs by national production has been about 50 %. In 2000, 800,000 t of cereals, with rice making up 75 %, were imported for a total amount of CFAF 100 billion. Amongst industrial cops, groundnut cultivation occupies some one million ha, while cotton production covers 30,000 ha. Horticulture is one of the most buoyant activities of the sector (240,000t), with 60 % of production from the Niaves region. Fruit production is estimated at 130,000t for 2000. The other crops, with the exception of niébé (100,000 ha), are grown on limited areas. 2.1.3 Stockbreeding, along with rain fed cultivation, accounts for the bulk of the primary sector production and provides the livelihood 350,000 families. It plays an important role for household food security and improved crop production (draught farming, manure) and procures savings for many farmers. In the pastoral areas, it accounts for 55 to 75% of family income. The sub-sector is dominated by an extensive system, with relatively low productivity, owing to the numerous constraints, the most significant relating to feed. Outside the major rainfall areas, the watering points are often not sufficient in number or tend to dry up too soon. For 2000, the stock counts are estimated at 2.9 million head of cattle, 4.5 million sheep, 3.9 million goats, 0.27 million pigs and 25 million fowls. Total meat production is estimated at 119,000 tons, with 44% from cattle and 25% for small ruminants. Milk and dairy product imports cover two thirds of the national requirements and represent CFAF 35 billion yearly. Fisheries make up a major area of activity, with 600,000 persons working in production, processing and marketing. Fish exports represent 38 % of total exports; they attained 125,000 t in 1999, compared to 88 000 t in 2001. Continental fisheries produce approximately 40,000 t per year. 2.2 Rural Development Strategy The achievement of the growth objectives stated in the 10th SEDP, the NEPAD document and the PRSP, necessarily requires sustainable revival of rural sector production. The Strategic Operations Plan (SOP) for the agriculture sector, prepared in 2000 and currently under revision, clearly sets out the sector’s two major areas of focus: (i) reinforcing the economic and social well-being of the rural populations through measures aimed at poverty reduction and improved food security; and (ii) supporting the local development drive by favoring the involvement and professionalization of rural stakeholders and ensuring sustainable management of natural resources. The Government envisages increases in per capita rural incomes by an annual average of 4 %, which would give a primary sector growth rate of approximately 7 to 8% yearly. As stressed in the PRSP, this will mean reducing the vulnerability of agricultural activities, particularly through more effective control of water (small irrigated areas, water saving techniques, bottomland development, etc.) and more appropriate management of soil and water (restoring soil fertility, controlling salt, micro development around wells and boreholes). In line with the activities proposed by the SEDP and the PRSP, the SOP hinges on four major areas of intervention: (i) improved quality and sustainability of rural infrastructure; water control involving adaptation of the development models to the different regions of the country, opening up production areas, improving rural infrastructure; ii) improved conditions of development of the private sector; iii) building the capacities of rural operators; organization and professionalization of producers, system of information on the flow of

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and markets for agricultural products, improved technical advice; and (iv) sustainable management of natural resources; soil reclamation and fertilization, integrated management of production and pest control. 2.3 Land Tenure System 2.3.1 Access to land in Senegal is regulated by the following laws: (i) 64-46 of 17 June 1964, concerning the national property, (ii) 72-1288 of 27 October 1972 concerning the organization of rural communities, (iii) 76-66 of 2 July 1976 concerning the State land code, and, (iv) 96-07 of 22 March 1996 concerning the transfer of authority. The land is classified under State lands and national lands placed under State control. The law of 1964 cancelled the customary rights of lineages and families to land and considers that land is inalienable and cannot be commercially transacted. The law of 1972 established rural communities and entrusted the task of allotment of national land to the rural councils. The land is classified in 4 categories: (i) the portions of village lands that have been regularly used for rural housing, cropping and stockbreeding; (ii) the gazetted zones, which are those reserved for forest production or otherwise protected (classified forests and sylvo-pastoral reserves); (iii) the urban zones situated in commune territory, and (iv) the unexploited (pioneer) zones, which comprise all the other land. 2.3.2 The community lands represent 95 % of the national territory placed under the authority of the rural councils, which allocate them to users. This allocation only entails the right of use. The duration for the beneficiaries is indeterminate and the land is allocated following deliberation by the rural councils, subject to the condition of sufficient use of the land; the rural councils are authorized to reallocate any land that is not developed. This system allows for full participation of local actors in the management of land, but is limited by the inadequate training of the members of the rural councils and their lack of human material and financial resources. The government issued a land plan of action in 1996 and which is serving as a basis for land reform with a view to improving land tenure for the benefit of producers. This plan of action proposes three options: maintaining the current legislation, privatization of national land and its co-existence with private land ownership. Consultations have been initiated with the local representatives, the producer organizations and the private sector in search of a consensus on the reforms to be adopted. 2.4 Poverty and Gender Issues 2.4.1 The population of Senegal is estimated at 9.7 million inhabitants in 2001, with 52% women. The positive macroeconomic performances recorded in the period 1997-2001 brought the numbers below the poverty line from 57.9% in 1994/1995 to 53.9% in 2000/2001. Senegal however remains one of the world's poorest countries and its poverty is largely concentrated in the rural areas (80 %), in the central areas and in the east of the country. The level of education of poor households is very low and it is noted that poverty increases with the size of the household. The vulnerable groups live mainly in the rural areas and in the peripheries of the major urban centers and are mostly in the following social categories: children, women, the handicapped, the elderly, the youth, displaced persons and refugees. To face the challenge of poverty, the Government in March 2002 adopted the full PRSP, which has three main thrusts: (i) bringing abut a 15 % reduction in poverty by 2005 and doubling per capita income by 2015 through strong, balanced and more equitable growth; (ii) Ensuring widespread access to essential social services by 2010, by accelerating the provision of basic infrastructure to bolster the human capital; and (iii) eradicating by 2015, all forms of exclusion within the nation and establishing gender equality particularly at the primary and secondary education levels. 2.4.2 In Senegal, the contribution of women to economic activity represents 40.8 % compared to 47.2 % for men. The gender structure of the work force shows 81% of women are engaged in

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agriculture. They are in charge of the entire food chain and 70 % of them produce food crops, specifically rain fed crops, groundnuts, with the majority in rice farming and market gardening. With regard to stockbreeding, they sometimes own the large stock and also raise small ruminants. They also specialize in the processing of dairy products and fish for sale. For these women, the groups provide a means of economic emancipation that affords them access to the means of production and resources. In the informal sector, they are largely active in petty trading (40 %) and in services sector, they form the majority. The women have limited access to outreach, training and research services. 71.3 % of them are illiterate, and gross primary school enrolment in 1998 was only 63 % for girls, as against 70 % for boys. The women also have little access to credit, marketing services and appropriate technology, health and information. Their living conditions are difficult notably as regards access to drinking water, sanitation, transport and communication. They suffer marked discrimination with regard to land tenure and access to natural resources, and are overall harder hit by poverty. According to the tax survey conducted in 2001, the prevalence of poverty is 58.8 % for households headed by women. With the balance tipped against the women in this way, it appears practically impossible to reduce poverty unless the women are largely involved in the projects and programmes set up and participate meaningfully in determining the relevant strategies. 2.5 Institutional Framework 2.5.1 In line with the new policy direction of the agriculture sector and the decentralization policy, the Ministry in charge of agriculture and Stockbreeding (MAE) initiated the reorganiation of its structure in 1998, within the framework of the programme for support to agricultural services and producer organizations (PSAOP). MAE is now focusing on its public service mission (agriculture policy, orientation, coordination, monitoring and evaluation of activities); As at August 2003, it comprised: (i) at the central level, six departments (agriculture; stockbreeding; agricultural engineering; plant protection; horticulture; analysis, forecasts and statistics and administration); (ii) at the regional level, the Rural Development Department (DRDR), comprising all the technical services and responsible for advising the local communities; and (iii) at the departmental level, the rural development department (SDDR). During the ministerial reorganization of end August 2003, the sector distribution was somewhat modified. Rural development is now principally under the Ministry of Agriculture and Water resource Managment (MAH) and the Ministry of Stockbreeding (ME). 2.5.2 The Agricultural Development Department (DGR), with a staff strength of about 30, including 15 engineers, is notably responsible for (i) implementing national policy with regard to irrigation and rural infrastructure (irrigation development, rural tracks, water points, etc); (ii) formulation and monitoring of the technical norms relating to design and maintenance; and (iii) control of programmes delegated to para-statal organizations for promotion of irrigated crops. DGR is also implementing a number of operations: Urgent salt control programme in Casamance, Baila Valley Development, Niayes Small dams project, National Catchment basin programme, etc. It is also involved in the national rural infrastructure programme (PNIR). DGR is represented on the ground within the DRDR by regional divisions. The recent tranfer under its direction of the irrigation and agriculture sectors would help strengthen the irrigation sub-sector and the irrigation development mission devolving on DGR. 2.5.3 The agriculture advisory function is carried out by the National Agricultural and Rural Council (ANCAR), established in September 1998. ANCAR, a public limited company with majority state shareholding, has, in 2003, a staff of over 700 qualified and experienced persons. Its primary mission is to provide agricultural and rural guidance using a new approach involving actual partnership with the producers. Supported by the World Bank, through PSAOP, ANCAR has succeeded in providing an efficient and professional response to several requests from rural

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operators. It operates on the basis of agreements, in support of several national or regional projects and programmes. The major regional development companies (SAED, SODEFITEX et SODAGRI) have been restructured and possess confirmed competencies. SODEFITEX, whose operational base is at Tambacounda, works in the southern half of the country, improving cotton production while building the capacities of the rural actors as well as improving the diversification of agricultural activities. It has acquired great experience, notably in farmer organization and marketing; it has also, on a participatory basis, supervised several programmes for bottomland development and irrigation and pastoral infrastructure. SODAGRI, based in the vicinity of Vélingara, operates especially in the Kolda region, in the Anambé Basin, and specifically in irrigated rice farming. It is in charge of the Anambe basin rural development support project financed by the Bank, which provides for intensified farming of the large irrigated areas and support to the 7 CR concerned. 2.5.4 With regard to development research, the Senegalese Agricultural Research Institutes (ISRA), a public scientific and technological establishment, is the special partner of the rural world. ISRA has a staff of 480 persons working in 11 research centers and 33 stations and experimental points throughout the territory. In particular, it has proven experience with regard to selected plant varieties, soil and water analysis, technology transfer, etc. The Ecological Monitoring Center (CSE) is a public service association placed under the supervision of the Ministry of the Environment. CSE’s primary mission is to collect and monitor the data on the natural resources of the territory, using special technology. The skills acquired by the some forty engineers and technicians have led CSE to play a vanguard role in the management of natural resources and environmental evaluation. The Ministries responsible for Stockbreeding, Fisheries and the Environment are also involved in rural development. Others, such as the Ministry of Planning, the Ministry of the Interior and the Local communities and the Ministry f the Economy and Finance are also involved in policy definition and application of decisions for decentralization. 2.5.5 Rural Financing: Though the country has several credit establishments, these focus their activities in the urban areas and operate in the rural areas rather in support of the major dealers in the areas of marketing, horticulture and agro-industry. The credit granted to the rural area is estimated at under 5%. The project for agricultural modernization and intensification (PMIA), financed from 1998 to the present by the Bank, has sought to give impetus to the banking sector and the savings and loan mutual companies, by making financial resources available to them. The project has supplied approximately CFAF 4 billion in credit to banks and mutual organizations throughout the country. The conditions of access to credit under this project have been relaxed with client rates of 6.8 % for the medium-term and 7.8% for the short term. The average reimbursement rate is 82%. This rate is expected to be improved, notably owing to the imminent application of the Disaster Fund resources. PMIA has sufficient resources to enable it envisage the pursuit of its activities in the second phase. 2.5.6 The national agricultural credit fund of Senegal (CNCAS), the major source of agricultural credit, granted between 9 and 13 billion CFAF of laons for each crop year, from 1997/1998 to 2000/2001.The amount of credit granted increased considerably for 2001/2002, attaining CFAF 59 billion. This was over 90% comprised of short-term loans (seasonal credits), for durations of less than 18 months. The annual interest rates are State-subsidized and are currently at 7.5% instead of 12.5%. CNCAS manages a large number of lines of credit and guarantee funds set up under externally financed projects (75 to 90 %). CNCAS has substantial loan repayment arrearage to deal with (approximately CFAF 30 billion). It is endeavoring to develop and secure its activities by working with organizations that give technical guidance to producers, reinforcing the monitoring carried out by the technical staff of the agencies, and signing agreements with the product processing plants, with a view to recovering credit granted for processing.

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2.5.7 In 2000, there were 121 Decentralized Financial Systems in Senegal as compared to 30 in 1998. These DFS now have 324 basic institutions working with 291,000 client s and direct users (individuals and groups, including 42% women); the number of users has increased by 34% since 1998. An estimated 18.6% of Senegalese households are concerned by the DFS services. The DFS in 2000 had 31.9 billion CFAFin financial resources, with 18.4% as savings. The total resources increased by 21.6% since 1998. The volume of credits distributed in 2000 attained CFAF 28.2 billion, for 65,000 credits. The volume of credits has increased by about 70% since 1998. Crédit mutuel du Sénégal (CMS) is the DFS with the largest membership, (150,000 members, which is 64 % of the total number of DFS members) and plays an important role in collecting 53.5% of the total DFS savings. The union of mutual companies in partnership for savings and credit mobilization in Senegal (UM-PAMECAS), with 64,000 members (25.6 % of total members of DFS), collected 21.4% of the total savings and accounts for 17.5% of the loan total. Alliance de crédit et d’épargne pour la production (ACEP), with 13,500 members, represented 6.7% of savings against 40% of the total loans. Since 1998, the DFS have grown substantially, since the number of loans has increased by 70%, the number of clients and users by 34%, and the number of basic organizations by 39%. Despite this growth, the culture and practice of credit is not yet entrenched in the traditional farmer society, and a great deal of effort is required with regard to sensitization and training. 2.5.8 Farmer Organizations: Rural Senegal is heavily structured with a very dense network of local organizations (village groups, village associations, Economic interest groups –EIG) and powerful regional and national federations, translating a clear desire to have the grassroots level take charge of development. In 1976, several farmer associations were grouped at the national level in Fédération des organisations non gouvernementals du Sénégal (FONGS) representing some 90,000 farmers, two-thirds of whom are women. In 1993, on the initiative of FONGS, several federations and unions set up a national council for coordination and cooperation with rural dwellers (CNCR) made up of the most of the rural representatives and stakeholders. CNCR represents 2 to 3 million rural dwellers grouped in eight federations. CNCR has emerged in the past five years, as the privileged partner of the Government. Along with the Association of leaders of rural communities (APCR), it forms the Senegalese Association for the promotion of small grassroots development projects (ASPRODEB), which is engaged notably in the implementation of the PSAOP and PSSA. 2.5.9 An analysis of these farmer organizations however reveals that many of them are characterized by: (i) an inadequate number of entrerreneur projects and profitable ventures; (ii) inadequate capacity for management and negotiation; (iii) limited representation of women; and (iv) inadequate support from the technical units. In closely following the activities of farmer organizations, the NGOs have specialized in various domains of rural development, (decentralization, environment, health, etc). There are over 38 national and international NGOs across the country, some 15 of which are very experienced (ENDA, GADEC, FODE, GRDR, FEE, CARITAS, WORLD VISION, AFVP, etc.) and participate effectively in projects. The dissemination of best practices, support to the process of local development and building of operational capacities are facilitated through sound coordination with NGOs at the national level; 150 NGOs are members of the Council of NGOs in support of development (CONGAD). 2.5.10 Decentralization: The decentralization of the rural area was initiated by Law 72-25 of April 1972, with the establishment of Rural Communities (CR) throughout the territory. Though in theory vested with management autonomy, the CR remained for a along time under close supervision of the territorial administration. A new set of laws was promulgated in 1996, as part of a constitutional reform, to accelerate decentralization by giving the territorial administrations increased autonomy. Alongside the communes (urban) and CR already existing, a new territorial administration was introduced: that of the region. The laws of 1996 stipulate notably that the three types of administration are vested with legal personality and financial autonomy, are freely

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administered by councils elected through universal suffrage, with a mission of design, programming and implementation of economic, educational, social and cultural development. The State has entrusted them with nine areas of activity: (i) State owned land, (ii) the environment and natural resource management, (iii) health, population and social action, (iv) the youth, sports and leisure, (v) culture, (vii) education, (vii) planning, (viii) territorial development, and (ix) town planning and housing. 2.5.11 The CR cover a variable number of villages. They are administered by a Rural Council of 28 members, elected by direct universal suffrage every 5 years. This council elects within its body, a Chair and two vice chairpersons. The Chair (PCR) holds executive power and controls budget expenditure. This person also represents the State, and as such is responsible for the administrative police and civil status matters. The area of competence of the CR is very broad (management of non classified tracks, management of natural resources, construction and management of health posts and health huts, prevention of conflicts between populations, formulation of local development plans, etc.) and appears often oversized compared to their financial and human resources. The CR are subject to public accounting rules, their funds are lodged at the Treasury and disposed of in accordance with the public accounting system that verifies compliance with the expenditure commitment procedures. Despite some instances of relaxation, the public procurement regulations applying to the communes still appear largely restrictive. The operating income of the CR derives from rural tax (head tax), the different local taxes and the contribution to the Decentralization Allocation Fund (FDD) established by the State to cover expenses relating to the authority transfers. Overall, the CR resources are limited and rural tax collection is very inadequate. There is a Local Community Equipment Fund, (with its disbursement linked to the rate of collection of the rural tax) which contributes t oinvestment financing. 2.5.12 The regions are administered by Regional Councils headed by chairpersons and have no hierarchical control over the CR and communes. They are responsible for: (i) promotion of economic, social, educational and cultural development in the region; (ii) implementation of the regional development and territorial development plans; (iii) coordination of local development measures and development; and (iv) conduct of the management of infrastructure serving the regions (hospital, secondary schools, etc.). For the time being, the regions have no resources of their own, and are covered by the budget of the State, which also provides minimum administrative and management staff. Law 96-06 further provides that the regions, along with the CR and communes, constitute a Regional Development Agency (ARD) whose role, set forth in Decree 98-399 of 05/05/1998, consists notably in assisting the different community administrations in: (i) coordinating and harmonizing the action plans and programmes between the State, the regions and the grassroots communities; (ii) directing implementation of development or improvement work plans or drafts, (iii) formulating and implementing the conventions for supply of administrative services to communities; and (iv) designing and implementing all studies relating to local development. The ARD can be designated by the local administrations as the project owners for certain works. 2.6 Constraints and Assets 2.6.1 Constraints: For several years, the rural sector has faced difficulties characterized by: (i) the decline in rainfall; (ii) decline in agricultural product prices; (iii) fall in yield and production; (iv) an aggravation of poverty and indebtedness in the rural area. From the technical standpoint, the weaknesses noted concern the lack of compliance with the technological packages, limited supervision of the populations, inadequate availability of quality seeds, old and worn farming equipment inadequate maintenance of irrigation infrastructure. The financial constraints mainly concern low rural income, which makes it difficult to purchase inputs, whose prices have increased since the CFAF devaluation, and repay loans. In addition, apart from the Decentralized Finance

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Systems that have been expanding in the country, rural credit is quite limited and cannnot always meet the producer’s needs, despite the constant State intervention with regard to the credit terms. Concerning marketing, the producers are faced with poor marketing organization, the lack of storage and processing infrastructure, and the bad state of the access roads. The environmental constraints concern the deterioration of natural resources seen in the declining soil fertility and the salinization of the estuary zones (Casamance, Sine Saloum), lowering of the water tables in the Niayes and the deforestation of the eastern part of the country. 2.6.2 Assets: The strengths of the rural sector are in the stability of its institutions and the reforms undertaken as part of the liberalization and privatization of the economy. The country has substantial water and soil resources, particularly in the Senegal River Valley and in Upper Casamance. There are possibilities of mobilization of runoff water in other parts of the country, especially the South where the rainfall is relatively abundant (800 to 1,200 mm) and the favorable topography. The agricultural producers have organized themselves under several unions and federations that play an increasingly important role in the country’s life. The decentralization process is steadily moving forward the support to the local management enables the rural grassroots communities to themselves conduct development activities Lastly, the efforts made under the West African Economic and Monetary Union (WAEMU) and NEPAD are expected to boost Senegal’s economic integration and that of other countries in the sub-region. 2.7 Donor Intervention 2.7.1 The Government strategies as set out in the operational strategy plan for the rural sector and the poverty Reduction Strategy Paper (PRSP) represent a general framework for donor intervention in Senegal. Besides the Bank Group, there are several multilateral and bilateral donors operating in the rural sector, under the overall coordination of the Ministry of Planning. 2.7.2 The Bank Group: The Bank is financing several projects in Senegal in the rural development sector, notably: (i) the Lower Casamance Rural development project completed in 1999, which attained its principal objectives, despite the insecurity resulting form the events in that region. The rural infrastructure (tracks, wells, structures for reclamation of salt land) has made it possible to improve the populations’ food security; (ii) the Livestock Support Project was completed in 1999, allowing for improved management of grazing land and stock water points, and increased meat and milk production. A second phase, approved in April 2000 is being implemented (iii) the Agriculture modernization and Intensification Project PMIAP approved in 1998 is progressing satisfactorily; It provides for loans through a network of banks and savings and loan mutual institutions; (iv) the Anambe Basin Irrigation Project (Consolidation Phase) completed in 1998, brought about an increase in developed areas by 1,320. The development and intensification efforts have however not attained the expected levels; nevertheless, the project created an economic development pole for the region and offers significant potential for further improvement; and (v) the Anambe Basin development support Project approved in April 2001, with the objective of reviving development and reinforcing professionalization of the farmer organizations and the decentralization process. 2.7.3 The performances of projects in Senegal has greatly improved in recent years, owing mainly to the measures taken with a view to involving the elected representatives, and concerning loan management, management of working capital, disbursement, supervision and monitoring of the Bank and the Government. By providing training and empowering village communities, a significant contribution has been made to the effectiveness of the executing agencies, notably concerning financial management and coordination of project activities. Regular supervision of

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projects, adoption of a single accounting system and the monitoring of performance indicators are measures that will increase the disbursement level. Generally, the implementation of projects focusing on agriculture has positively impacted on the rural conditions of living. 2.7.4 Other donors: Senegal has for many years benefited from irrigation projects financed by external aid, principally in the Senegal River Valley. An example is the Project for Implementation of Small Rural Projects, financed by WB and IFAD, mainly to support the rehabilitation of village irrigated areas in the Senegal River Valley. AFD and EU contributed to the rehabilitation of small, medium and large areas along the river. In the Valley, other developments or rehabilitation were programmed on Arab fund financing (ABEDA and SDF in Dagana Department, IDB at Podlor, IDB and ABEDA at Matam). Canada and Belgium supported the development of irrigated horticulture in the NIAYES zone. Several donors have financed projects for sustainable management of water and soil through rational utilization of fertilizer, erosion control, agro-forestry. Some of the examples are the Project for auto promotion for management of natural resources (PAGERNA) in Sine Saloum, the Project for organization and village management (POGV), the Autonomous Project for Rural Development in Lower Casamance (DERBAC), the Diourbel Agro-forestry project (PAGF), etc. These project are have focused on relatively small numbers of community lands and farms, and their impacts have thus remained limited. 2.7.5 At the request of the WB, FAO in 1999 participated in the preparation of the national small-scale irrigation development strategy. FAO also gave Senegal considerable support with regard to food security, through the Special Food Security Programme (PSSA), started up in 1995. This programme is mainly implemented in Kédougou and involves promotion of lowland rice farming. WB is also financing, through PSAOP, the agriculture sector restructuring programme involving the reorganization of the Ministry of Agriculture, the establishment of ANCAR and a reinforcement of ISRA. It has further, along with IFAD, ADB and OPEC, supported the National Rural Infrastructure Programme (PNIR) for a total cost of USD 239 million, with a first phase of USD 42.9 million. WB and IFAD have already granted USD 28.5 million and USD 7.5 Million respectively; ADB and the Organization of Petroleum Exporting Countries (OPEC) have contributed USD 17.2 and 6.8 million, respectively, for the track construction component. 2.7.6 More generally, there are several projects to support local development and decentralization involving most of the donors. Effective coordination is organized locally between the representations of the various multi- and bilateral aid agencies, and is manifested in the efforts at geographical distribution, concern for synergy and harmonization of the methods and procedures of intervention. Many donors are supporting projects that focus on institutional support; some good examples are: (i) The EU- PSIDEL Project, which is testing an approach to budgetary support to 59 CR in 4 departments; (ii) the Canadian aid agency (CIDA), which is financing studies on local taxation, as well as a new programme for institutional support to the elected representatives and local administrations; (iii) the French Cooperation system, whose Decentralization and Local Development support Project (PADDEL), is consolidating State decentralization reforms and conducting training for elected representatives and public servants; (iv) the German aid system (GTZ and foundations), which are financing literacy programmes and training of elected representatives and directing the donor coordination; and (v) USAID, whose intervention focuses on improved governance, management and local-level democracy.

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3 THE IRRIGATION SUB-SECTOR 3.1 Water Resources: the surface water comes from four major catchment basins: (i) Senegal, (ii) Gambia, (iii) Anambé-Kayanga, and (iv) Casamance. The development undertaken under the Senegal River Development Organization (OMVS) provided a basis for electricity production (Manatali Dam) and irrigated farming (about 60,000 ha developed). The irrigable potential exceeds 200,000, but has to be limited given the conditions for operation of the common structures envisaged by OMVS. The irrigation potential in eastern Senegal is estimated at about 9,100ha. The Casamance River is a veritable extension of the sea carrying a heavy concentration of salt that invades the adjacent land. There are other similar zones seriously deteriorated, in Siné-Saloum. The total volume of runoff water is estimated at 140 m3 yearly, and part of it is controlled. The country’s water table potential (under water and surface) is in the order of 450 to 600 billion m3; the annual recharge rate is estimated at 3-4 billion m3, while the collection rate is between 150 and 200 million m3 yearly. The irrigated crops are often grown as a supplementary activity around drinking or stock water points. 3.2 Irrigation development: The country’s irrigation potential is about 340,000 ha. The developed areas cover 105,000ha, with a 60% exploitation rate. Approximately 41,000 ha are being farmed along the river, 10,000ha in the Niayes, 9,000 ha in Lower and Middle Casamance, with the rest shared between Anambé and eastern Senegal. The rate of intensified farming of this land rarely exceeds 100% 100 %. The types of development vary greatly: large irrigated areas along the river and in Anambé (ranging from 400 to a few thousand ha); medium-sized land in the same areas (averaging 60 to 300 ha); irrigated village plots (PIV) along the Senegal River and eastern Senegal (averaging 20 to 30 ha); private irrigated land (PIP) all along the river, around Lake Guiers and the Niayes (average size 50 to 400 ha); bottomlands at Kédougou (average size 10 to 50ha). Over the past years, there has been a gradual transfer of the management of the developed areas to the beneficiaries’ organizations, however, this has not always resulted in a complete takeover of the infrastructure by the producers; the reasons include: inadequate user participation, lack of technical aspects and inadequate ownership of the water control efforts, difficulties arising in the management and maintenance of the developed areas and structures, etc. The irrigation generally requires adapting the proposed techniques to the producers’ capacities, support in the form of producer training, improvement of the economic environment (crop varieties, marketing, credit, etc.). 3.3 Crops produced by irrigated farming: The irigated crops are divided into two groups: (i) cereal prdocution, with rice dominating, and some experiments concening corn and sorghum (in Middle and Upper Senegal River Valley); and (ii) horticultural crops, with onions and tomatoes covering the largest areas. Also to be considered is the recently emerging planting of sweet potato around Lac de Guiers and in the north. Irrigated cereal production covers the greater part of the developed areas; It is concentrated in the Senegal River Valley, accounting for approximately 65% of the production and 40% of the area under crops. Market gardening, which tends to fall into clear geographical areas, is carried out in the Niayes, (63 % of the production), along the Senegal River, (22% of ), and in the Thiès and Kaolack regions (15 %, particularly watermelons). The fruit production is spread over the country, but concentrated in Lower and Middle Casamance, which account for 54 % of the production. 3.4 Strategic Orientation: The irrigated agriculture in Senegal is characterized by: (i) investments hitherto directed towards the north of the country and limited owing to the development costs (7 to 10 million CFA/HA); (ii) little involvement of of the beneficiaries in the financing and management of development; (iii) A marked predominance of cereal crops and limited diversification; and (iv) lack of human resources to support the beneficiaries in technical and management aspects. Under the circumstances, and noting the lessons from the investments in

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the River Valley, the Government has already, based on a Programme of intervention and a Strategy document, opted for irrigation development on a smaller scale, involving the particapation of users in the construction work, as well as the mangement of the development. There are now positive signs of more sustainable and user-oriented irrigation: (i) progressive decentralization and the rural administrations gradually taking charge of their common land; (ii) increased empowerment of users in the management and maintenance of the small-scale development; (iii) development of private irrigation; (iv) political will to promote small water retention structures at limited costs; and (v) setting up economic sectors around certain crops. This environment appears altogether conducive to diversification and sustainability of production through promotion of small-scale irrigation carried out at the local level. 4 THE PROJECT 4.1 Design and Basis 4.1.1 As a result of the decline in rainfall and the salinization of the land, compounded by human-induced factors (deforestation, inappropriate or deteriorative farming practices, etc.), a third of the country’s area has attained a pre-desert stage. The soil degradation and insufficient water control could have dire consequences in little time, unless extensive measures are applied to remedy the situation. The irrigation development, initially involving the development of large areas in the Senegal River valley, is today facing certain difficulties, such as the high costs of farming these areas. Considering alternative approaches, the Government has recently opted to promote diversified irrigation, with a focus on small structures that can more easily be taken over and owned by the producers, and involving the active participation of users in the construction as well as the management of the development. In this context, it is deemed appropriate to pursue improved water control in the different local village areas, while supporting the ongoing efforts to increase the accountability of the rural communities. The project proposes to promote this new vision and help maximize the significant runoff water potential of the central and southern parts of the country, through small irrigation infrastructure, initiated, executed and managed by the communities concerned. 4.1.2 The study conducted on TAF grant financing and concerning the 3 valleys, pointed to technical options that are the most easily controlled by the beneficiaries and at the least cost. It also highlighted, through the participatory approach and the numerous contacts made in the field, the benefits that this type of development affords the populations and the authorities, and the need to broaden the scope of the project activities, so as to better support the local initiatives. The irrigation development proposed thus constitutes a response to the farmers’ concerns, largely conveyed through the CR and through the PLD that have been implemented for a few years now, with the support of the donors (GTZ, EU, WB, AFD, etc.) and reflected in the Regional Integrated Development Plans (PRDI). They will seek to provide more effective control of agricutural procution through simple techniques, and to renew the areas that have been abandoned or used to a very small extent. The project draws largely from the successful experiments conducted in the country over the past years (PSSA, PAGERNA, GADEC, etc.), and seeks to develop synergy and complementarity with ongoing or projected decentralization activities, and benefit form the know-how of professionalized partners, who are well represented in the field (ANCAR, SODEFITEX, etc.). 4.1.3 The project intends to participate in the decaentralization process, and as such its intervention strategy will integrate the local coordination, programming and management organs already existing in the areas of intervention. The rural communities will consititute the project’s essential links for consultation, decision, implementation and mangement. The participatory approach underscored by the preliminary study will thus be pursued in defining and in determining

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the priority of action, as well as in the implementation. Considering the scale and nature of the development, as well its gradual internalization by the farmer population, the project will provide an ideal framework for intervention for the implementation of a policy that is resolutely grounded in the involvement and participation of the communities in the development and conservation of their land. The structure of he Project Coordination Unit, with three autonomous regional offices is such as to meet the expectations expressed at grassroots level, while ensuring close supervision of the various activities, on the basis of effective collaboration with the communities and de-concetrated technical services. 4.1.4 Given the difficulties and stumbling blocks bound to arise in ensuring the accountablility of the local players and farmers, who are often needy, the project will formulate a pragrmatic and gradual programme for capacity building at all levels: the de-concentrated units, rural communities, service providers, groups, leaders of managment committees, etc,. Constant attention will be given to listening, training and supporting the farmers and groups concerned, with a view to promoting viable action and guaranteeing the durability of the irrigation and pastoral development put in place. This capacity building, centering on rural self-sufficiency, aims at enabling the various players and partners to fully assume the tasks and missions devolving on them. . 4.2 Project Area and Beneficiaries 4.2.1 Localation and Physical Setting: the project concerns three regions (Fatick, Kolda, Tambacounda) and eight departments. It concerns the three valleys on which the preparatory studies were conducted using the TAF grant resources (Médina Djikoye, Médina Namo et Vélingara Pakane) and has been extended to include other zones that are of interest in tems of availability of runoff water, and which have been partially identified by FAO. A general map situating the project area is presented as Annex 2. There are three broad regions of intervention: (i) Fatick, in the central-east, which is very level and subject to extensive salt infiltration from the tributaries of the Saloum and Gambia Rivers, (ii) eastern Senegal, south of Tambacounda, with more rugged relief, and relatively heavy rainfall (800 to 1300mm) and (iii) the intermediary zone of Upper- Casamance, characterized by a sudanian climate (rainfall of 800 to 1000 mm), with rather high potential. The large areas covered by classified forests in the three regions (between 24 and 28%) mask the areas deforested as a result of the pioneering practices of the migrant populations. 4.2.2 The Fatick Region covers an area of 8.675 km²; it is subdivided into three departments (Fatick, Foundiougne and Gossas) and comprises 10 districts and 35 CR. The region has a effective agricultural area estimated at 395,4000 hectares; the salt lands (tannes) representing a third of the regional area. The problem of saltine lands is particularly acute in the Foundiougne and Fatick Departments and constitutes a very limiting factor for the agro-sylvo-pastoral activities. The Djikoye valley is situated in the region and its water resources represent a significant asset, which is however threatened in the medium term by salt infiltration through the Koular Bolong, a tributary of the Gambia River. The Tambacounda region covers 59,600 km2. It covers three departments (Tambakounda, Bakel and Kédougou) with 35 CR. The region has a dense network of waterways (the Gambia, Senégal and Falémé Rivers and their tributaries) as well as the numerous natural non-permanent ponds. This is an area with one of the highest levels of rainfall in the country (800 to1, 500 mm), however, millions of cubic meters of water are lost, for lack of water retention structures. The Kolda Region covers an area of 21,000 km2, and comprises three departments, two of which are in the project area: Kolda and Vélingara. These two departments have a total of 23 CR. The Médina Namo Valley, situated 8 km from Kolda, and the Vélingara Pakane Valley, 35 km from Vélingara, are the most important catchment basins, but are characterized by non-perennial flows.

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4.2.3 Socio-economic Framework: The project area has a population of 1.9 million inhabitants, which is over 95% rural, with 32 % in the Fatick Region, 41 % in Kolda, and 27 % in the Tambacounda Region. This population has a high proportion of youth of under 15 years and an average of 10 workers per farm. The population growth rate is 2.7% yearly. The poverty prevalence is high, though more acute in the the rural areas, which are characterized by a lack of socio-economic inferastructure, a 46.4% illiteracy rate and an absence of planning of production activities. In the project area, out of 158,000 households, there are an estimated 72,000 poor households, totaling 738,000 poor individuals. TheKolda has the highest poverty rate (57.8 %), followed by Fatick with 51.2 % and Tambacounda, 45.6 %. Several locations remain difficult to reach, or inaccessible, especially during the rainy season. Acess to drinking water is extremely difficult. Most villages do not have drinking water points (89.5% for Tambacounda, 91.7 % for Kolda, 46.9 % for Fatick), and they obtain their water from village wells or sometimes from boreholes. The education and health infrastructure is woefully inadequate. The needs expressed are immense and are expected to be addressed in the near future through the implementation of national programmes, including the PLCP and Health II Projects, recently approved for financing by the Bank. 4.2.4 The cultivated part of the project area represents approximately 533,420 ha, which is 28.40 % of the country’s total cultivated land. It is extensively farmed in 118,000 family holdings. The average farm size is 4.2 ha. And the crop systems are largely dominated by millet/sorghum and groundnuts, wich are under shifting cultivation. Rice farming occupies 10.6 % in Kolda region, 0.6% in the Fatick Region and 0.9 % in Tambacounda. The principal crops of the zone are primarily rain fed, with the exception of rice production in Anambe, supported by SODAGRI, and the bottomlands. Overall, the development of the water potential of the three regions appears limited. The coffee production is hampered by difficulty with regard to the supply of quality seeds. For the three regions, the annual cereal production averages 190,000 tonnes (101,000 t of millet/sorghum, 40,000 t of rice and 49,000 t of corn). This production covers only 43 % of the estimated needs (440,000 t of cereal). The market garden crops occupy about 1,400 ha, while fruit production covers a total of 3,900 ha, concentrated in the Kolda Region. Annual Horticultural production is approximately 10,000 tonnes. Cotton production, which is supervised by SODEFITEX, covers an area of approximately 30,000 ha. Distribution of the plateau land has largely been governed by customary law. In the lowlands, it is generally the women who grow rice and market garden crops on small plots. 4.2.5 The area also has large numbers of livestock, estimated at 1.39 million head of cattle and 1.36 million sheep and goats. The traditional stockbreeding system is practised, whereby the animals go in search of fodder and water points. The sedentary farmers own herds of some 20 head, which graze within the confines of the village land. The large herds (20 to 100 head) belong to the Peuhls, and they graze throughout the area. In all the regions, therefore, there are herds from the north circulating; for example, about 95,.000 small ruminants and 7,000 head of cattle come through the Tambacounda Region. These herd movements can give rise to conflict with the farming populations. The pasture grounds, which are quite extensive, generally suffice to meet the feed requirements, but they are limited by the lack of water points. The main constraints to stockbreeding are the lack of pastoral watering infrastructure, stock diseases and tranhsumance. 4.2.6 Since the implementation of the liberalization policy in 1990, the local cereal marketing system has been conducted by the private parties. In the project area, several parties are involved in agricultural product marketing: (i) the retailers, who buy directly from the producers; (ii) the wholesalers, who are economic agents duly established on the market and selling by the bag, case or basket; (iii) the «bana-banas», or itinerant traders who supply the wholesale markets; and (iv) the primary transport operators, who convey the products from the field to the nearest tarred road where the «bana-bana» collectors await them. The products are distributed on regional markets, but

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face certain constraints: difficult access to some production areas, poor state of rural roads, lack of strategies aimed at meeting the market requirements, etc. With the exception of some fruit cooperatives, most producers operate on their own with little organization. 4.2.7 With regard to rural credit, there are several DFS operating in the area. With over 150,000 participants at the national level, the 57 MEC organised since 2000 as a network of CMS represent over half of the DFS clients. The CMS is well represented in the project area and has established partnerships with projects. ACEP is also represented, with windows in all the department capitals. In 2001, it granted loans to the tune of CFAF 11.4 billion, with 12% going to agriculture. The MECU of Fatick, Tamba and Kolda are relatively recent establishments, and their activities are more geared towards trade and animal feed. The project area is also served by PMIA financed by the Bank and credit facilities provided by the Anambé PADER and PLCP projects. 4.2.8 Beneficiares: As in other locations in the country, the rural organization in the project area takes many forms; there are: 1,177 village cooperative sections, 856 production GIE, 712 agricultural service GIE, 1,277 village develpment associations, 547 water management commitees, 2,136 women’s advancement groups, 619 other producer groups, and 548 management committees concerned with development activities. These various organs, which are an expression of determination of the village communities’ willingness to serve the goal of development, play a key role in actualizing the development process in villages, but are hampered by a number of factors, including limited capacity and lack of accountability. The sensitization and facilitation activities are carried out by ANCAR, DRDR, CERP, SODEFITEX, SODAGRI, certain NGOS, etc. 4.2.9 The project beneficiaries are firstly, the 43 villages centering around the Médina Djikoye, Médina Namo and Vélingara Pakane valley development, giving an estimated population of over 18,000. The project implementation will also benefit some 4,000 families in the Fatick region, through the reclamation of saline land and some 400 stockbreeders whose herds will have improved watering conditions. In the Kolda region, the smal-scale water control structures will benefit about 600 familles. In Tambacounda, approximately one thousand women from Kédougou derpartment will be enabled to engage in rice farming, 10 GIE will produce market garden cops and fruits along the Gambia River, and 800 livestock ventures will derive benefit from storage structures. The farming activities under the project (primarily, rice and market gardening) are targeting women, who will thus be the prime beneficiaries of the intervention.

4.3 Strategic Context The project is in line with the agricultural policy as well as the decentralized rural development policy letter, which seeks to contribute to rural poverty reduction. The project fits in perfectly with the Government’s poverty reduction strategy (PRSP) aimed at increasing income and building up the human capital, and with Bank strategy (CSP), whose targeted priorities include water control and rural infrastructure. The degradation of the land and the vulnerability of the family farms make it essential to implement urgent and extensive measures for optimal management of surface runoff water. Special emphasis has been laid on the integration of the “small-scale irrigation” aspect into the decentralization process underway in the rural communities. The project proposes to support the grasroots iniitatives for controlling and managing the surface water, as expressed in the local development plans. It plans to consolidate agricutural and pastoral activities, with a view to achieiving increased food security and countering the extreme poverty that affects the rural areas. The project will support the communities to enable them to fully assume their planning and development tasks, and the farmer organizations, so that they take full charge of the management and maintenance of water infrastructure and fully assume maintenance of the water control infrastructure and development.

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4.4 Project Objectives 4.4.1 Sector objectives: The sector objective is to contribute to food securitiy through the development of small-scale irrigation at the local level. 4.4.2 Specific Objectives: The specific objective of the project is to boost agricultural production on a sustainable basis. 4.5 Project Description 4.5.1 The principal activities envisaged under the project are: (i) improvement and extension of the small-scale irrigation systems existing in 3 valleys (280 ha), (ii) reclamation of salt land for rice farming (2,000 ha), (iii) improvement of 21 animal watering ponds, (iv) construction of some 30 diversified small structures for retention and control of surface runoff water (480 ha), (v) development of 400 ha of rice farming lowlands, (vi) development of 10 small areas irrigated by pumping (50 ha), (vii) rehabilitation of 105 km of feeder/service tracks and roads, (viii) reforestation on 300ha, (ix) protection by SWC/SPR of 450 ha of land, (x) organizational support and backing up of 35 CR, (xi) advisory and extension services in favor of 7,000 farms, and (xii) provision of social and economic infrastructure through a self-managed local development fund. 4.5.2 The project has the following components: A. sustainable irrigation and pastoral development B. Capacity building C. Project management Component A: Sustainable irrigation and Pastoral Development 4.5.3 This component seeks to put in place the principal water control infrastructure, using a participatory approach with the close involvement of the rural communities, based on the concretization of the measures contained in the local development plans and in accordance with regional and sector strategies. The basic work concerns the erection of small structures for control of and development using run-off water, which will be initiated and managed by the populations and serve to catalyze the agricultural development of the village land concerned. The component also involves construction of tracks to open up the territory and environmental protection measures. This development will be financed based on eligibility criteria; the beneficiaries represented within the management committees will be required to mobilize a counterpart contribution in kind and in cash, which, depending on the types of development, will be between 10 and 20% of the investment. All these development activities will be initiated at the grassroots level, discussed and programmed at the level of the CR and validated at the regional level. 4.5.4 Development in Fatick Region: The project envisages, in this region greatly affected by salinization, the construction of an anti-salt dyke in the Médina Djikoye valley and the improvement of the existing small–scale irrigation systems (140 ha). These measures will be carried out with the CR of Keur Samba Gueye, which were extensively involved at the preparation study stage, and will require the active participation of farmers, under the supervision of specialized NGOs. The aim will be to preserve the irrigated farming activities from the salt infiltration in the valley, by constructing a 700 m earth embankment, with a reinforced concrete evacuation structure at its crest. For farming, the project will improve the irrigation systems in place, through simple structures (low sills, reinforced drain wells, pumping devices, reservoirs, etc.), varied in accordance with the farmers/operators level and capacity. The project will also help implement the participatory programme for reclamation of salt-infiltrated land that was formerly used for rice cultivation, in the Fatick and Foundiougne districts, supplementing the assistance of PAGERNA,

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which works primarily in small valleys, and with limited amounts. The measures will concern rehabilitation of protective dykes and regulation structures dating from the colonial period, and the construction of new dykes to stop the infiltration of salt water, which will have concrete evacuation structures for draining the land. The total area concerned by these works is estimated at 2,000ha, divided into about twenty sites. In Gossas, a stock-raising department, the project will provide 10 ponds, based on experience acquired through the national retention structure programme, initiated by the Government. 4.5.5 Development of the Kolda Region: in the Médina Namo valley, where studies were conducted in relation to the TAF grant, the project will construct a downstream weir and irrigate land situated upstream, along the river, in small units, representing a total area of approximately 100ha. The measures will concern the development of market gardening plots for women, and small areas for off-season crops. In the Vélingara Pakane Valley, another area of study in connection with the TAF grant, a low sill will be constructed and 40 ha of small plots developed by pumping or recourse to water table. Given the numerous requests reflected in the PLD and the potential in the region, the project will also carry out development in the Kolda and Vélingara departments, concerning thirty lowland and basin sites used for rice farming or stock grazing. The total area for irrigation (principally small overfall and control structures) is approximately 280 ha. Six ponds will be overdeepened and improved. The beneficiaries will conduct a portion of the unskilled work, under the supervision of specialized NGOs. The more technical work will be entrusted to contractors or jobbers, depending on their scope. 4.5.6 Development of the Tambacounda Region: The Kédougou department has significant potential in terms of bottomlands appropriate for rice faming in which pilot projects (SODEFITEX, PSSA) have been conducted in the past and more recently. The project envisages the development of 25 bottomlands of an average size of 15 to 20 ha, giving a total of 400ha. The studies conducted by SODEFITEX, for revival of rice farming in the bottomlands and the outputs of the PSSA will be largely utilized as bases. The developments will be limited (small irrigated areas, mini drainage ducts and spillover sills) and their costs will be 20 % covered by the farmers, often in the form of physical participation in work. In the Tambacounda and Bakel departments, the project will be based on the experiences under GADEC, AFVP and SODEFITEX, which have in the past initiated small water retention structures (micro-dams, sills, ponds). Some fifteen structures, of which five are ponds, will be provided, to allow for improvement of the stock watering conditions and to intensify the farming production over some 200ha. Along the Gambia River, it is planned to set up 10 small farm areas using pumping facilities (gardens, banana plantations, etc.) of an average size of 5ha. As for other development, its is expected that the CR will be closely involved in the implementation of these works, and support will be provided to the producer groups from the time of the request up to the completion of the plots. 4.5.7 Infrastructure to open up the areas: In the three valleys studied, there is a significant problem of inaccessible areas, which has made it necessary to conduct detailed preliminary draft studies. This will be taken into account through improvement of paths and tracks to open up the areas and the provision of crossing points. The project thus provides for a low overfall sill and 35 km of roads at Médina Djikoye, development of 10 km of roads at Médina Namo, construction of a crossing slab at Vélingara Pakane, and of 15km of feeder roads and improvement of certain critical points in relation to the development to be carried out, on request, in the 8 departments concerned by the project. The final specifications for the road tranches identified as part of the participatory planning, as well as the implementation modalities will be worked out in conjunction with the National rural infrastructure programme (PNIR), and in accordance with the established standards. The project is actually essential, considering the scale of the needs at the national level.

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4.5.8 Protection of the environment: Environmental measures will be implemented in the three valleys studied, based on the environmental and social management plan prepared as part of the preliminary study. The questions of access to potable water and waterborne diseases will be systematically addressed in the areas of intervention, in liaison with the technical services concerned: specifically, water points and health centers will be constructed through the local development fund (see 4.5.12). Special attention will also be given to relations between stockbreeders and farmers and to the interference caused by varying land use. The project will also provide livestock corridors and watering areas, following consultations with and decisions by the rural communities concerned. The efforts to control the clogging up of small reservoirs and ponds will involve measures to protect the upper catchment basins, and require the participation of the populations in the WSC/SPR (450 ha covered). This will require appropriate supervision to be provided by specialized NGO, in close collaboration with the environmental units. The environmental measures implemented will also take into account of gazetted forests and involve reforestation on 300 ha, forest fire control, etc. The environmental component will further entail the setting up of piezometers (150 units), to facilitate the monitoring of the ground water in certain sensitive developed areas. Component B: Capacity Building 4.5.9 This component covers all the support to producers and communities concerned by the project, so as to enable them assume entire responsibility for their activities, and ultimately ensure sustainable and efficient management of the different facilities. It has three sub-components: (i) support to decentralization, (ii) support to grassroots communities, and (iii) consistent close collaboration and supervision. 4.5.10 Support to decentralization: This component aims to make a significant contribution to the ongoing decentralization process, to complement the intervention by the other partners involved in this action, and with which the project will work in total synergy. As a preliminary step, the action initiated by this project will require an information and global awareness campaign in favor of the 87 rural communities potentially concerned in the 3 regions. This campaign will seek to inform the populations and CR about the programme for control of run-off water for development purposes and the promotion of the participatory approach grounded on commitment of the local stakeholders. The conditions of intervention of the project will thus be extensively communicated within the different communities, thus enabling them to determine their position and chart their courses, in light of their own development plans and their priority objectives. On commencement of the project, the different coordination and facilitating bodies will be determined and the measures adjusted to the initiatives already underway. 4.5.11 In the eight districts concerned, the project will contribute to formulation or updating of PLD in function of the needs identified and in addition to the measures already underway. It will further assist certain CR in preparing local investment plans, conducting diagnostic studies and drawing up land occupation and utilization plans (POAS). Through these steps, the project intends to provide the CR with planning tools that meet the needs felt and expressed by the grassroots, taking due account of the present occupation of the different community lands. The project will play a significant role with regard to the reinforcement of local skills, through appropriate training. It will provide, in favor of the members of the CR directly concerned, training in management, local development planning and accounting. It will initiate them in programming, preparation of budgets and accounts keeping. At the regional level, the project will assist these regional councils in project formulation and mounting, in conjunction with the regional development agencies (ARD), and in liaison with the programmes already underway. The de-concentrated technical units will also benefit from specific training, depending on their area of operation and in relation to the project activities.

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4.5.12 The project will place at the disposal of the CR a local development fund (FDL) for the financing of basic infrastructure (potable water points, health units and huts, schools, storage areas, slaughter and sales areas, etc.) These activities envisaged for FDL financing aim to enable the populations put in place the socio-economic infrastructure that is indispensable for improvement of their living conditions. The FDL will make it possible to finance the priority public investments identified and designed by the CR, through their PLD. A manual of procedures defining the practical modalities for access to FDL funds, as well as the modes of procurement and control, will be prepared and approved by the various partners and ADF, prior to project the start- up. The project will allocate for FDL an amount of UA 1. 916 million, with priority to the CR concerned by the developments. Paragraph 5.2.5 provides further details concerning the utilization and operation of FDL in support of the formalization and coordination of activities relating to the decentralization process. 4.5.13 Support to Grassroot organizations (OCB): This component concerns the support provided to farmers in terms of the structuring of target groups and agricultural extension. The project will, through NGOs and specialized operators, provide the initial support for the training and structuring of the different groups constituted (market gardeners and rice farmers, mainly made up of women; stock breeders, users of the water points, etc) with the aim of enabling them to optimally assume their responsibilities. The objective of this component will be to strengthen the organizational and financial management capacities of farmer organizations. Specific training modules will be conducted amongst the members of the different groups constituted. The project will devote efforts to defining the specific functions of each of the groups, and notably lay emphasis on (i) the payment of maintenance fees, (ii) management and utilization of funds collected, (iii) the provisions for management and maintenance of the structures (community work and/or contractors), and (i) the participation of women in the management of the facilities, etc. The project will enable groups to determine the cost of water and provide them an operating manual for the management of the facilities. It will further aid relations between like GIEs, with a view to promoting emulation and developing the spirit of enterprise (negotiation power, information on outlets, group purchases, etc.). 4.5.14 The goals of intensification and diversification of irrigated and rain fed agricultural production, make it necessary for the Project to provide support (extension work) for rice farming, off-season crops (market gardening, corn, etc.) rain fed crops (millet, sorghum, etc), and agro-forestry. The topics addressed (improved seeds, definition of appropriate technology packages, planting schedules, draught farming, etc.) will concern the enhancement of the irrigation facilities in place and the global concerns expressed by the producers concerned. The basic extension work will be conducted according to the zones and/or as a supplementary service, by ANCAR, SODEFITEX and SODAGRI units, which have field workers that are familiar with the support-advisory tasks, and have been provided suitable logistics. Depending on the missions, they will be backed up by specialized NGO. All this work will be conducted in collaboration with the regional and departmental offices and the rural polyvalent extension centers (CERP) set up in the districts. 4.5.15 Special Support Measures: There will be a number of activities accompanying and supporting the irrigation and stock grazing activities. They are aimed at ensuring consistency amongst the activities undertaken, while providing the indispensable extension, to cover the range of issues relating to rural farming. The project will in particular lay down the legal modalities for access to the new development. There will be a number of activities to back up and support the irrigation and pastoral development. The conditions of eligibility, to be stated in the manual of procedures, will meet the concern for equitable distribution of the developed land. Regarding the allocation of the irrigated land, modern law will gain precedence over the customary law. Through specialized committees set up within CR, the project will, prior to all development, lay down the series of provisions required to ensure equitable distribution of land. These committees made up of

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representatives of all the parties concerned, will be required to oversee the allotment of developed land, giving priority to the traditional occupants and taking into account facilities in favor of women. 4.5.16 Particular attention will be given to the problem of marketing of horticultural products to be approached holistically, from the selection of plants to the final client, through all the intermediary stages. The crop sector approach is emerging as a preferred reference framework for targeted supervision with a view to strengthening the different links of the production chain: production, processing, packaging and distribution of products. Specific market studies will thus be conducted by crop, and in accordance with the needs, by zone of intervention. The results of these studies will be applied through training and revival modules, to support farmers (women and men) in seeking markets and economic operators, organizing distribution channels, promoting high value-added products, product storage and processing, etc. 4.5.17 Access to inputs and small equipment and implements will be provided through credit in favor of the operators, whose skills and professionalization will be reinforced as required. The funds concerned will function according to their particular procedures and collect savings from members and/or utilize the financing granted by other institutions and partners. Given the sensitive nature of this component, and the relative lack of knowledge of the credit system in the farmer environment, the project will ensure that the farmers are correctly informed, trained and supported with regard to credit facilities. The project will thus be conducting advisory-support activities for the benefit of farmers and initiators of income-generating activities, to ease their access to the existing credit agencies. The project will also assist in professionalizing certain certified DFS, to enable them more efficiently accomplish their mission. Given the credit resources already supplied by the Bank (PMIA, PADER Anambé, PLCP) and other partners, in the different areas of intervention, it is not planned to provide additional credit financing through PAPIL. 4.5.18 The project will enter into partnership agreements with specialized organizations and units (ISRA, SODEFITEX, ANCAR, etc.), with the aim of furthering the development research efforts, in relation to the zones developed and the crops planted. The themes adopted will be directly linked with the practical problems to be raised by the producers, during prior assessments, relating to the optimization of the development. The following aspects will thus be addressed: development of planting techniques that are effective and suited to the developed lowlands, integrated weed control, experimenting with organic and mineral inputs, variety trials for crop diversification, definition of appropriate technology packages, etc. The research testing will be conducted in situ, on demonstration plots and on sites that are covered by the development programme. The project will further contribute to promoting a supply network for certified seeds through private operators (circulation of information) and by strengthening and giving impetus to local seed farmer groups. 4.5.19 To reflect the diversity of rural activities, and in order to increase the capacities of the most underprivileged men and women, the project will as needed provide support to activities other than purely agricultural ones, falling in the context of the development put in place. Such support will be in the form of various technical training programmes, organizational support to groups, credit orientation, training targeting specialized technical services, etc. The principal areas concerned are stockbreeding, (fodder crops, draught farming, vaccinations, feed, etc.), fishing (stocking of reservoirs, aquacultural production, dried fish production, etc.) beekeeping (improved hives, purification devices, etc.), and any other rural income-generating activity. Partnerships will also be forged with other projects and NGOs working in various domains linked with or complementary to the activities generated by PAPIL.

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4.5.20 Special attention will be given to human health, improved health conditions in the various project zones, to the risks of development of waterborne diseases (bilharziosis, etc.), on account of the water structures, and generally to other epidemics (malaria, etc.). Preventive measures will be systematically implemented (distribution of treated mosquito nets, etc.) alongside an awareness campaign, training and information and education and communication (IEC). The AIDS component will be part of the existing national programme and will seek to reinforce the multi-sector approach to control of the pandemic. The project will support HIV/AIDS prevention activities, with the assistance of NGOs and in conjunction with Bank activities (Health Project II), through intensification of IEC activities and using the peer-educators approach in the existing support and listening centers, as well as sensitization concerning community support for infected persons. Component C: Project Management 4.5.21 The project implementation will decentralized to the three regions (Fatick, Kolda and Tambacounda) where largely autonomous offices will be set up under the DRDR which have suitable premises. Each regional office will have an Agricultural Engineer, who will be in charge of the regional programme, an Assistant accountant, a Secretary and a driver. Premises for the three offices will be provided by the government and rehabilitated under the project, within the premises of the DRDR, which have appropriate space. Each office will be provided a vehicle and a motorcycle, representing the minimum means of transportation that is indispensable for the implementation of the regional programmes and coordination of the activities of the different operators recruited for the project implementation. Two officers (specialists in gender issues and decentralization) based in Tambacounda and will also be provided with motorcycles, which they will use in working across the three regional offices. The project technical and financial monitoring will be entrusted to a lightly structured coordination unit (CCP), based in Dakar, at the premises provided by the administration, under the responsibility of an officer specializing in rural development seconded by the Government. It will comprise two sections (monitoring evaluation; administration and finance) each headed by an experienced officer, and also with a driver and a guard). The CCP will be equipped with a vehicle and 3 motorcycles. The DGR, attached to MAH, will supervise the project. The project will contribute to the training of the staff of DGR, CCP and regional offices. At the level of the DGR, it will support the establishment of a specialized small-scale irrigation pole, with a view to improving the framework for exchange and capitalization that is indispensable for the promotion of the sub-sector. For this task, and as part of the support to the overall decentralized management of activities, the project will benefit from the support of an AE technical assistant who will have been tried for a period of 30 months. 4.6 Production, Markets and Prices 4.6.1 Production: An analysis of the food products consumer market on the basis of average per capita consumption indicates that, for a good number of cereal products, the needs are not being met by the current production. There is in fact a global cereal deficit of 250, 000 tons, of which 150,000 for rice and 27,000 for corn. To meet the demand, Senegal is obliged to import cereal, especially rice (annual national import level of over 500,000 tons). The project will contribute to developing irrigated production. The paddy rice yields in the with-project situation will increase from 0-1.5 t/ha to 3-5 t/ha depending on the case, while, for market garden crops, yields are expected to double, from 0-4 to 8-10 t/ha. This additional production expected from the project, concerning the main crops selected for the areas to be developed is estimated at 10,200 tonnes of rice, 540 tonnes of corn and 2,060 tonnes of market garden crops and fruits. The additional production on the plateaux, resulting from the project advisory activities, is estimated at 2,000 t of millet/sorghum.

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4.6.2 Markets: The three regions have scores of local markets offering more or less favorable opportunities, depending on the distance from the developed areas, to facilitate produce distribution. The markets in the region (Fatick, Kaolack, Tambacounda and Kolda) and sub-region (Diaobé) are up to 200 km from the production sites, and are thus good potential channels. On account of the deficits recorded, particularly for rice, it is expected that the additional cereal production (13,000 tonnes) will be easily sold locally. The environment is moreover expected to improve, given the privatization of SODEFITEX Kédougou and SODAGRI Anambé rice factories and the involvement of the Network of the national union of traders and industrial operators of Senegal (UNACOIS) in the distribution of cereals. The distribution of the additional horticultural production (1,450 tonnes of vegetables and 610 tonnes of fruits) will fully benefit from the programme for improvement of tracks and roads leading to the area developed, as well as the specific support to producers (market studies, product diversification, spreading out of farming schedules, marketing, etc.). For the more dynamic producers, there are prospects of export to neighboring countries (Gambia, Guinea Bissau, Mali, etc.), notably for bissap and certain vegetables (okra, jaxatu, peppers, etc.) and bananas. 4.6.3 Prices: The agricultural produce prices vary with the seasons. The average producer prices are: (i) at Tambacounda, 62 F/kg pour millet, 64 F/kg for sorghum, 61 F/kg for corn, 100 F/kg for local rice, and (ii) at Kolda, 85 F/kg for millet, 70 F/kg for sorghum, 73 F/kg for corn, 100 F/kg for local rice. It is seen that these prices are lower than the national averages and that those of Tamba are lower than those of Kolda. It is further noted that sorghum is the staple cereal that brings in the highest earnings in the Tamba Region, in comparison with millet and corn in the Kolda Region. The substantial seasonal price variations are characteristic of fresh vegetable markets. In terms of structure, these prices reflect the existing marketing system. There is generally a significant margin between the consumer sales price and the producer prices. This margin represents the remuneration of various parties, namely: the collectors, the wholesaler and retailers, as well as the marketing costs, primary post- sale losses and risk coverage. The average 2002 producer prices for Kolda were 200 F/kg for tomatoes, 250 F/kg for Gombo, 200 F/kg for cabbage, and 350 F/kg for peppers. 4.7 Impact on the Environment 4.7.1 The project is classified in category 2. From the standpoint of physical implementation, it consists primarily in small-scale, diversified irrigation structures, built wit the extensive participation and collaboration of the populations concerned. The development options in the three valleys underscore the execution of modest structures, aimed at development of small-scale irrigation and soil protection. The environmental aspects were analyzed during the preliminary study and the summary Environment and Social Management Plan (ESMP) is provided as Annex A of volume 2 attached to the original version of the appraisal report. 4.7.2 Positive Impacts: An assessment of the expected project outputs would indicate that the benefits from the implementation will largely exceed the disadvantages, and remedial elements will moreover be incorporated. The principal positive impacts of the project on the environment can be summed up as follows: (i) sensitization of beneficiaries concerning environmental protection, regeneration of 2,000 ha of abandoned salt land, after leaching, and rehabilitating the anti-salt dykes, reclamation and maintaining the fertility of land by adopting water and soil conservation techniques, (iv) land conservation and protection against erosion (SWC/SPR) on 450 ha, peripheral plantations and regeneration of classified forests abutting on certain sites (300ha), development of fruit farming and planting firebreaks around some of the development areas (v) control and restriction of cattle herd movements by delimiting corridors and watering areas, and (vi) improving health and education conditions through construction of health centers and schools, on FDL financing.

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4.7.3 Negative Impacts: Certain works will require earthworks and digging could aggravate the erosion at least temporarily. The improvement of feeder roads in small sections leading to the irrigated areas will have a limited negative impact, to the extent that the prime objective will be to rehabilitate the existing tracks or roads. The safeguarding and intensification of irrigation development might also entail increased risks of pollution of surface and underground water owing to increased use of fertilizer and pesticides. There could be increased accumulation of non-biodegradable packaging and decomposition of agricultural product waste from the sales points. The prevalence of waterborne diseases could also increase owing to the creation of new stretches of water, which are however limited in size. The protection and availability of water could bring about an increase in the numbers of cattle at water points, with the attendant risk of overgrazing. Poorly designed drainage of the small irrigated areas or poor rehabilitation of the anti-salt dykes could present risks of salinization of the land. 4.7.4 Mitigating measures: Appropriate environmental management measures will help contain the negative impacts of the various works. The negative effects of the works will be taken into account in the set of particular technical specifications to be given to enterprises as part of the bidding process. Concerning the prevention of water pollution by chemical products, the training of operators in the proper utilization of chemical fertilizer and pesticides will be part of the advisory support measures initiated under the project. The incidence of waterborne diseases will be reduced owing to the health and hygiene education services to be conducted in the communities around the project work. The project will also provide support to the Agricultural Engineering Department, in monitoring the quality of the water tables through construction of piezometers. 4.7.5 Environmental monitoring: The project environmental monitoring will be under the direction of the ecological monitoring center (CSE) of Dakar, in collaboration with the Environmental Department, which will ensure proper implementation of the environmental measures. This will involve verifying the environmental clauses in the engineering documents, and seeing that the mitigative measures are effectively and properly implemented. CSE may use the services of thematic operators for the monitoring of certain specific impact indicators (disease prevalence, soil salinity, etc). There will be a budget allocation of over 135 billion CFAF to cover the entire series of environmental measures. 4.8 Social Impact 4.8.1 Impact on poverty: the project will substantially contribute to improving the social environment, since it seeks to increase farmer incomes by at least 70 %. The new developed areas will allow for intensification of the crops (mainly rice and market garden products, increasing yields by 10,200 and 2,060 tones, respectively) and stockbreeding (40.000 TLU concerned), which will secure production for over 7,000 farms. The regeneration of over 2,000 ha of salt land in the Fatick Region will open new opportunities for development, at lower costs, for some 4,000 farmers. Over 800 stockbreeders will be able to water their herds more satisfactorily. The structures, training and procedures implemented through the project will enable the beneficiaries to pursue and develop the measures initiated, and to undertake sustainable maintenance of the infrastructure put in place. By facilitating the beneficiaries’ participation in and access to the decision process, on the one hand, and increasing the organizational capacity of the communities and producer groups, on the other hand, the project will be playing a strategic role in the indispensable formation and development of the social capital, and in the process of sustainably meeting the economic needs of the rural population of southern Senegal. With the support to local initiatives, more than thirty CR will be enabled to finance a part of their socio-economic infrastructure needs (drinking water points, health centers, schools, etc.). By supporting the management committees and de-concentrated bodies,

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and on account of the participatory process initiated, the project will help train decentralizers. It will thus have an impact on the self-promotion in the rural world by improving the accountability of the populations and developing human resources. 4.8.2 Impact on women: The specific support with regard to market gardening and rice farming, marketing and access to land, and the income-generating activities will enable women to better integrate the local economic fabric. The development of small plots and gardens will mean that women will be allocated new plots. The construction of wells and boreholes will improve the living conditions of women in over 40 villages, by reducing the time taken by and onerous aspects of their domestic chores. The expected socio-economic benefits for over 40,000 women will include: (i) improved levels of organization, training and productivity; (ii) the involvement of women in the in th improvement of returns and credit management; (iii) the introduction and distribution of technological packages, mostly concerning food crop preservation and packaging; and; (iv) intensification and sensitization of rural populations in prevention of HIV/AIDS and malaria. The public health prophylactic measures and measures specifically targeting women and children will make for better protection of the vulnerable groups that they constitute. Women and children will benefit from an improved nutritional situation based on availability of food crops, which will moreover be further diversified. Overall, the human development index for the areas around the developments will show an improvement owing to the income generated by the project activities. 4.9 Project Costs 4.9.1 The total project cost exclusive of tax and duty is estimated at CFAF 12,825 million, which is UA 16.28 million. The cost is made up of CFAF 7,317 million (UA 9.29 million) in foreign exchange and CFAF 5,508 million (UA 6.99 million) in local currency. Table 4.1 below gives a summary of project cost estimates by component. The cost details are provided in Annex B of Volume 2.

Table 4.1: Summary of cost estimates by component (CFAF and UA Million)

CFAF Million UA Million Components F.E L.C Total F.E L.C. Total

% F.E.

Sustainable irrigation and pastoral development 4 080.1 2 824.9 6 905.0 5.18 3.59 8.76 59.1

Capacity building 1 786.4 1 184.5 2 970.9 1.44 0.92 2.37 60.1 Project Management 627.3 865.2 1 492.5 0.80 1.10 1.89 42.0 Base Costs 6 493.7 4 874.6 11 368.3 8.24 6.19 14.43 57.1 Physical contingencies 259.5 185.3 444.8 0.33 0.24 0.56 58.3 Price escalation 563.6 448.6 1 012.2 0.72 0.57 1.28 55.7 Total 7 316.8 5 508.5 12 825.3 9.29 6.99 16.28 57.0

4.9.2 There will be a 5% physical contingency on all base costs, with the exception of the staffing and FDL costs. A 3% compound price escalation clause will also be applied, in foreign exchange and in local currency, to all the components. The amount of non-allocated resources represents a total of 11.3% of the project cost. Table 4.2. below gives a summary of the project costs by category of expenditure.

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Table 4.2: Summary of project cost estimates by category (CFAF and UA million)

CFAF Million UA Million Categories L.C. F.E Total L.C. F.E. Total

% F.E

WORKS 2 524.2 3 526.6 6 050.8 3.20 4.48 7.68 58.3 GOODS 97.6 360.4 458.0 0.12 0.46 0.58 78.7 SERVICES 777.1 1 547.8 2 324.9 0.99 1.96 2.95 66.6 OPERATION 362.0 103.4 465.4 0.46 0.13 0.59 22.2 STAFFING 499.5 0.0 499.5 0.63 0.00 0.63 0.0 FDL 614.3 955.5 1 569.8 0.78 1.21 1.99 60.9 Contingencies 633.9 823.1 1 457.0 0.80 1.04 1.85 56.5 Total 5 508.5 7 316.8 12 825.3 6.99 9.29 16.28 57.0

4.10 Sources of Finance and Schedule of Expenditure 4.10.1 The project will be jointly financed by the Government of Senegal and ADF, as indicated in Table 4.3 below:

Table 4.3: Summary of Project cost Estimates by Source of Finance (UA and CFAF Million)

CFAF Million UA Million Sources

L.C F.E. Total L.C F.E. Total %

F.E. %

Total

ADF 3 957.7 7 316.8 11 274.5 5.02 9.29 14.31 64.9 87.9 Government 1 550.8 0.0 1 550.8 1.97 0.00 1.97 0.0 12.1 Total 5 508.5 7 316.8 12 825.3 6.99 9.29 16.28 57.0 100

4.10.2 The ADF loan will cover 87.9 % of the total cost of the project exclusive of taxes and duty, which represents UA 14.31 million. This ADF contribution will represent 100% of the foreign exchange costs and 71.8 % of the local currency costs. The Government’s contribution will be CFAF 1.551 million (UA 1.97 million), which is 12.1 % of the total project cost. It comprises salaries and part of the operating costs, as well as the beneficiaries’ and the rural communities’ contribution to the financing of the development and other infrastructure covered by FDL. The ADF contribution will include the cost of 4 vehicles, owing to the government’s limited foreign exchange resources and the decentralized mode of management adopted, which makes for the operational autonomy of the three regions. 4.10.3 The breakdown of project costs by source of finance and component is shown in table 4.4 and that by source of finance and category is in Table 4.5.

Table 4.4: Distribution of project costs by source of finance and component) CFA and UA million)

Components CFAF Million UA Million

ADF GVT Total ADF GVT Total

Sustainable irrigation and pastoral development 6 152.9 752.1 6 905.0 7.81 0.95 8.76

Capacity building 2 686.5 284.4 2 970.9 3.41 0.36 3.77 Project Management 1 162.4 330.1 1 492.5 1.48 0.42 1.89 Base Costs 10 001.8 1 366.5 11 368.3 12.69 1.73 14.43 Physical contingencies 394.7 50.1 444.8 0.50 0.06 0.56 Price escalation 878.0 134.2 1 012.2 1.11 0.17 1.28

Total 11 274.5 1 550.8 12 825.3 14.31 1.97 16.28

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Table 4.5: Cost Breakdown by Source of finance and by Category (UA Million)

Category/source ADF GVT L.C F.E Total LC.

Total

WORKS 2.31 4.48 6.78 0.90 7.68 GOODS 0.11 0.46 0.57 0.02 0.58 SERVICES 0.96 1.96 2.93 0.03 2.95 OPERATION 0.13 0.13 0.26 0.33 0.59 STAFFING 0.43 0.00 0.43 0.20 0.63 FDL 0.52 1.21 1.73 0.26 1.99 Contingencies 0.57 1.04 1.62 0.23 1.85 Total 5.02 9.29 14.31 1.97 16.28

4.10.4 The project expenditure will be in accordance with the schedules shown below in tables 4.6 and 4.7:

Table 4.6: Schedule of implementation by component (UA million)

Components 2004 2005 2006 2007 2008 Total % Sustainable irrigation and pastoral development 0.41 4.62 3.41 1.42 0.08 9.93 61.0

Capacity building 0.25 0.93 1.11 1.32 0.64 4.24 26.1 Project Implementation 0.65 0.34 0.37 0.46 0.29 2.11 13.0 Total 1.31 5.88 4.88 3.19 1.01 16.28 100.0

Table 4.7: Schedule of Implementation by Source of finance (UA Million)

Sources 2004 2005 2006 2007 2008 Total % ADF 1.22 5.34 4.23 2.73 0.79 14.31 87.9 GVT 0.09 0.55 0.65 0.47 0.21 1.97 12.1 Total 1.31 5.88 4.88 3.19 1.01 16.28 100.0

5 PROJECT IMPLEMTATION 5.1 Executing Agency 5.1.1 The project will be implemented under the responsibility of MAH, and will be supervised by DGR. The in-field activities will be coordinated at the regional level by three branch managers, whom the Government will second to the project. These AE will be stationed at the chief towns of the regions concerned (Fatick, Kolda and Tambacounda), and will work in close collaboration with the DRDR, the ARD, the CERP and the CR. The regional offices will be largely autonomous: They will be responsible for the implementation of annual regional budget-programmes, guiding local consultation, monitoring service providers, etc. In adopting the decentralized approach, which will bolster the role of the local population and their elected representatives with regard to the management of the development process, the project will assign certain prerogatives to the local leaders, notably: programming and validation of activities, mobilization of the local counterpart resources, institutional relations with all the project actors, project ownership for several outputs, recruitment of service providers, etc. 5.1.2 In this context, the main tasks of the Project Coordination Unit based in Dakar will be: (i) coordination, monitoring and control of activities in the three regions: (ii) recruitment of operators whose field of activity covers the three zones and signing of agreements with the project partners; (iii); planning of programmes of action and preparing annual project budgets, in conjunction with

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the regional entities; and the planning of programmes of action and preparation of annual project budgets, in collaboration with regional entities; and (iv) preparation of project financial statements and implementation reports. The PCU will be headed by an Agricultural Development Specialist, with at least 10 years professional experience, and who will be appointed by the government following a selection process approved by the Fund. The profile corresponding to this position is in Annex C of Volume 2. The entire body of supervisory and support staff will also be appointed by the Government and will have allowances paid under the project. The curriculum vitae of the three regional mangers, the Administrative and Financial Manager, the Gender Specialist and the Decentralization officer, and the Monitoring evaluation Officer will be submitted for prior Fund approval. All the profiles of supervisory staff are contained in Annex C of Volume 2. 5.2 Institutional Arrangements 5.2.1 Involvement of Local actors: The development in the villages will be under the responsibility of the common interest groups, associations and structured agricultural organizations, represented within the management committees to be set up with the assistance of the project. These bodies will contribute directly to the participatory planning process and state their development proposals directly to the CR concerned. This will thus constitute a process of intervention in response to requests and guided by certain criteria for eligibility for the programme, which will be laid down in agreement with the communities and formalized in a procedure manual. The aim of this selective intervention framework will be to encourage the emulation of the most dynamic groups and CR. As regards the CR, the intervention will be coordinated and selected by the appropriate deliberating organs, with the assistance of specialized technical operators. Priority will be given to projects in the existing PLD, on the understanding that some will be updated, supplemented or set up through the project. In the three regions, all the activities proposed will be examined within regional consultation committees (CRC) made up of the Chair of the Regional Council, who will act as Chairperson, the Director of the ARD, the director of the DRDR, three representatives per department of the CR, three representatives of associations and groups. The regional office manager will serve on the committee as programme advisor and coordinator. 5.2.2 The CRC will ensure the coherence of investments at the regional level, on the basis of the PRDI (Regional integrated development plan) adopted, and their linkage with the national sector programmes. They will also ensure compliance with local procedures as well as equitable relations with the CR at the regional level. The CRC may whenever necessary call in observers (technical service, project initiators, NGOs, project, etc) for consultative views. In setting up the CRC, the project will, where appropriate give priority to the consultative bodies that already exist and have the same mission. The CRC will hold meetings each quarter, which will allow for sustained programming of investments, as well as close monitoring of the project activities. It is only after the CRC issues its opinion that the project administrative and financial procedures provided in the manual of procedures for implementation of the development or infrastructure will start. The project will then provide the communities concerned, through the specialist parties, all the technical and organizational assistant needed to manage the development. 5.2.3 Specialized Operators: The Project Coordination Unit will contract the services of private operators, consulting firms, NGOs and professional agricultural organizations to conduct the project activities. The activities envisaged will concern: advisory services for the local administrations and producer groups, analysis and local planning, implementation and monitoring of investments, the various types of training and advisory services. The project will also use the technical units of the administration, notably the de-concentrated regional and departmental units. For the conduct of extension and/or research activities, the project will request the assistance of prominent regional or national organizations with good representation on the ground: ANCAR,

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ISRA, SODEFITEX, SODAGRI. The participation of such agencies will be based on agreements specifying the obligations and duties of the contacting parties, drafts of which will be submitted for prior ADF approval. 5.2.4 Project steering: successful implementation of the project will require harmonious coordination and steering of all the activities of the different parties involved. At the regional level, the activities will be steered by CRC described in section 5.2.1. At the national level, a Steering committee (CP) vested with authority to orient decisions and take decisions will supervise the different components and where appropriate propose a reorientation of activities. It will notably be responsible for approval and control of the work plans and annual budgets, adopted in the three regions. The CP, chaired by a representative of the Ministry of Agriculture and Water Resource Management, will, in addition to the five representatives of the ministries concerned (agriculture and water resources, stockbreeding, the Environment, Planning, Local Communities), the Directors of ANCAR, the Director of PNIR, the three chairpersons of the regional councils of Fatick, Kolda and Tambacounda, the chair of the association of chair persons of rural communities, the chairs of the national council of consultation of rural dwellers, and two representatives of the associations of NGOs. The committee will meet at least twice yearly. The CP secretariat will be run by the national coordinator, who will at the regional level ensure the follow –up of the implementation of the measures decided by the CP. 5.2.5 Local Development Fund: This fund will be utilized to cover the cost of the community socio-economic infrastructure, in accordance the intervention on- request approach, described in section 5.2.1. The initiators of the projects will provide a compulsory contribution of 10 to 20%, depending on the scale and nature of the projects. The FDL will be used to finance the investment s contained in the PLD of the CR, and will be managed by the deliberating body, according to the manual of procedure. This manual will be prepared prior to project start-up, based on the practices observed in ongoing projects particularly in the zone of intervention, ensuring consistency in approach. The FDL will not be used to finance operating costs, private investments, assistance operations, activities with a negative impact on the environment, leisure or religious activities, or activities whose objectives are in contradiction to those of the central government, etc. the FDL will be lodged in an approved bank. Following control by the CRC of the regularity of procedures, the viability of the investment and its conformity with sector policy, the Project Coordinating Unit will issued a transfer order in favor of the beneficiary agency of the FDL resources, which will have mobilized its contribution. This contribution will be in cash, in kind and/or by means of participation in works. The distribution of the contributions between the CR and the beneficiaries, as well as the type of contribution will be stated in the manual of procedures. The deliberating body will be required to have a bank account open in an agreed financial institution. The CR, as project owners, will be assisted by the ARD or the specialist operators recruited by the project, for formulation of financing documents and TD and recruitment of enterprises and jobbers. The selection of investments and contractors, management of funds and sites will be audited annually, in order to ensure perfect transparency. 5.3 Implementation and Supervision Schedule The project will be implemented over a period of five years (2004-2008). The recruitment of specialized operators will take place in first year, as will the signing of contracts for intervention with partner organizations. The investment work proper will start from the second year and be phased over four years, in accordance with the activities envisaged at the level of the PLD and the mobilization of the amounts committed by the CR and groups concerned. Table 5.1 below is the project schedule of implementation.

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Table 5.1: Schedule of Implementation

Activities/measures Party responsible Start Duration

Board Approval ADF October 2003 1 jour Signing of Loan Agreement GVT/ADF December 2003 1 jour General Procurement Note MAH/ADF December 2003 3 days Recruitment of Coordinator MAH January 2004 1 month Assignment of officers, CCP offices and branch offices MAH Mars 2004 1 month Entry into force of loan and first disbursement MAH/Coordinator April 2004 Project launching mission ADF Mai 2004 10 days TD vehicle and bidding for equipment Unit June-July 2004 2 month

TD and SL for setting up accounting system Unit June-July 2004 2 months

Bidding document for recruitment of technical assistance Unit June-July 2004 2

months Bidding document for recruitment of CR and PLD operators Unit/Branches June-August 2004 3

months

Start of information and awareness campaigns Unit/branches/CR June 2004 6 months

Preparation of TD for structural work identified Unit/DGR/CR/ARD July-Dec 2004 3 months

Tender invitations and recruitment of operators Unit August-Nov 2004

Agreements (ANCAR, CSE, SODEFITEX, etc.) MAH/Unit July to Dec 2004 4 months

Start of tender invitation Unit July 2004 Updating and supplements PLD, Operator/ CR Fin 2004 - 2005 1,5 an

Recruitment of engineering studies for development Branches/CR/ARD Fin 2004 - 2007 3.5 years

Start various works ARD, CR, Contractor, popul. Fin 2004 4 years

Training –extension ANCAR, SODEFITEX 2004-2008 4,5 years

First supervision mission ADF January 2005 12 days

Mid-term review Unit/Consultant 2006 1,5 months

Project completion report Unit Fin 2008 ADF completion report ADF Début 2009

5.4 Arrangements for Procurement of Goods and Services 5.4.1 The arrangements for procurement of goods and services are summed up in Table 5.2 below. All procurement of goods, works and services financed by the Bank will be in conformity with Bank rules of procedure for procurement of goods and services, or as the case may be, with the Bank rules of procedure for the use of consultants, based on the appropriate Bank standard tender documents.

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Table 5.2: Procurement Arrangements (UA Million) NCB SL LS Other Total

WORKS Structural water control work 1.606 (1.555) 1.606 (1.555)Irrigation development works 3.212 (2.665) 3.212 (2.665)Participatory development work 1.071 (0.888) 1.071 (0.888)Improvement of feeder roads 1.318 (1.255) 1.318 (1.255)Construction of crossings 0.710 (0.676) 0.710 (0.676)Piezometric network 0.085 (0.085) 0.085 (0.085)Environment 0.718 (0.570) 0.718 (0.570)GOODS Vehicles 0.169 (0.169) 0.169 (0.169)Motorcycles 0.057 (0.057) 0.057 (0.057)Computer equipment 0.122 (0.122) 0.122 (0.122)Furniture 0.065 (0.051) 0.065 (0.051)Other equipment 0.242 (0.239) 0.242 (0.239)SERVICES Studies, works inspection 0.416 (0.416) 0.416 (0.416)Technical assistance 0.485 (0.485) 0.485 (0.485)Consultancy 0.755 (0.725) 0.755 (0.725)Training 0.753 (0.753) 0.753 (0.753)Extension Work 0.469 (0.469) 0.469 (0.469)Agreement 0.252 (0.252) 0.252 (0.252)Audit 0.197 (0.197) 0.197 (0.197)OPERATION 0.681 (0.292) 0.681 (0.292)STAFFING 0.693 (0.472) 0.693 (0.472)FDL 2.204 (1.916) 2.204 (1.916)

TOTAL 6.93 (6.24) 3.07 (3.04) 0.66 (0.64) 5.62 (4.39) 16.28 (14.31)

NB: The figures in parentheses concern the amounts financed by ADF 5.4.2 The national laws and regulations concerning procurement have been examined and deemed acceptable. The CCP will be responsible for procurement of goods, works, services and training services. The resources, capacity, the expertise and the experience of the Unit members are adequate to successfully carry through procurement. Procurement of works, goods and services will be in accordance with ADF regulations as follows: (i) Works: National Competitive bidding for (i) the structural water control work (major anti-salt embankments, sills and retention structures) and (ii) development work (clearing out of ponds, development of irrigated plots), for the amounts of 1,606,000 and 3,210,000, respectively, divided into several lots, not exceeding UA 300,000 each, dispersed over three regions, to be implemented over time; for (iii) works for improvement of tracks and roads and (iv) construction of crossing points, for the respective amounts of UA 1,318,000 and UA 710,000, divided into several lots, each not exceeding UA 250,000; these works will be procured by national competitive bidding, or through community-based procurement procedures, as defined in the manual of procedures, in conformity the provisions of the PNIR and submitted for prior Bank approval; in that regard, the works, which will be for amounts not exceeding UA 20,000, may be procured using a procedure other than NCB; and (v) the construction of piezometers, for an amount not exceeding UA 85,000. For the different works, the mode of procurement by NCB has been selected because there are enough enterprises in the country to guarantee competition, and because the sites are greatly dispersed. Other modes of procurement for highly labour- intensive participatory works, (development of certain bottomlands, community salt control works), and works for protection of the environment by SWC/SRC and reforestation, for amounts off UA 1,071,000 and UA 718,000;

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these will be procured in accordance with the community-based procurement procedures, as defined in the manual of procedures that the Bank will approve beforehand. (ii)Goods: Local Shopping for vehicles and motorcycles and computer equipment for contract amounts of under UA 100,000 and UA 75,000, respectively and a total amount of UA 226,000 and UA 122,000 respectively; for furniture and sundry equipment, divided into several lots and for a total amount per contract which should be below UA 50,000; this mode of procurement has been chosen since the sufficient number of national suppliers and representatives of foreign suppliers will guarantee competitive prices; (iii) Services: Procurement on the basis of a Short list for recruitment of the firms that will be in charge of (i) the engineering studies, (ii) inspection of the large-scale work, (iii) studies and control/inspection of the track construction (iv) close supervision of community action and support to the CR, (v) training, (vi) technical assistance, and (vii) setting up an accounting system and audit services. For contracts of amounts below UA 350, 000, the borrower can limit procurement announcement to the national or regional newspaper; however all eligible consultants, whether or not regional may notify their interest in being shortlisted. For certain consultancy work not exceeding 2 months, the executing agency can recruit qualified individual consultants by direct negotiation; (iv)Other: Direct Consultation, on the basis of agreements, with ISRA, for the development research activities; ANCAR, SODEFITEX and SODAGRI, for advisory support, extension and marketing services; with the decentralized units of MAH, for certain monitoring and control activities; and with CSE, for the environmental monitoring; all agreements will be submitted for the prior approval of the Bank; (v) Local Development Fund: The works, good and services eligible for financing under the Local Development Fund (UA 2.204 million) will usually involve amounts per contract that are below UA 50,000; they will be procured in accordance with the conditions provided in the manual of procedure approved beforehand by the Bank. 5.4.3 The text of a general information note on procurement will be adopted with the Borrower at the negotiation stage and issued for publication in Development Business, as soon as the loan proposal has been approved by the Board of Directors of the Bank. The following documents will be submitted for consideration and approval by the Bank prior to publication: (i) specific information note on procurement; (ii) tender documents; (iii) reports on the evaluation of bids with recommendations for contract award; and (iv) draft contracts if those included in the tender documents have been modified. 5.5 Disbursement For implementation of the project, a special account is to be opened at an approved commercial bank, to receive the ADF resources, as well as another account to receive the Government counterpart. Part of the ADF resources will be paid into a special account and used to finance the operating costs. Expenditure relating to the consultants’ services will be in accordance with the relevant Bank rules. The Local Development Fund (FDL) resources will be disbursed through an account opened for the purpose in an approved bank, by annual tranches, and in accordance with annual regional programmes approved beforehand by the Government and ADF. The disbursements will be authorized following justification of at least 50% of the preceding expenditure. Requests for any new disbursement would therefore be submitted with a number of supporting documents, which will be specified in the manual of procedure that the Bank will be approving.

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5.6 Monitoring and Evaluation 5.6.1 Internal and External monitoring/evaluation: The internal monitoring evaluation will be by the PCU, through its monitoring/evaluation unit, which will define simple, specific technical and organizational indicators for each of the three regions. The evaluation will cover: (i) the rate of implementation of the development and infrastructure, (ii) the effective involvement of the CR and groups, and also (iii) the utilization of the human and material resources of the project. The external monitoring/evaluation will be by the specialized services of MAH and the Ministry of Planning, especially DCEF. Resources will be made available to cover this task (2 missions yearly). The mission reports should systematically be sent to ADF. The project will also be supervised by ADF, through periodical supervision missions (1 every 9 months). 5.6.2 Mid-term review: It will be conducted at the end of year 3 of the project, by an engineering consulting firm, with the aim of presenting the outputs and results of the project, in light of the objectives set. It will propose whatever adjustments are deemed indispensable for the attainment of the objectives in accordance with the populations’ concerns and their perception of the project activities. To that end, surveys and discussions with the beneficiaries of the various sites will be envisaged as part of this mission, in the three regions concerned. 5.6.3 Reporting: the PCU, in conjunction with the three regional offices, will prepare quarterly and annual progress reports on the project, and submit them to the government and ADF. The various partners participating as technical operators in the execution of the project components will submit periodic reports to the Unit. At the end of the project, PCU will draft a completion report based on the Bank model, and ADF will organize a specific mission, which will be the basis of the completion report. 5.7 Financial Reporting and Auditing The project accounting system will be in separate books that should clearly trace all the operations financed by ADF. The project accounts will be kept by the administrative and financial manager in collaboration with the Accountant and the Accounts clerk of the regional set-up, under the supervision of the coordinator, in accordance with the computerized SYSCOA-approved accounts management system. The project will engage the services of a specialized firm in year 1, to set up the accounting system and train the staff in its application. This system will make it possible to monitor project expenditure, in light of the projections, by source of finance, category and component. The project accounts will be subject to the usual control by the State inspectorate bodies. In addition, an external audit firm will be recruited to review the accounts of the project and the corresponding banks once a year; the audit costs will be financed under the ADF loan. 5.8 Aid Coordination The project has been presented to the major donors represented in Dakar: the European Union (EU), the United Nations Food and Agriculture Organization (FAO), the World Bank (WB), USAID, the United Nations Development Programmes (UNDP), the German Cooperation agency (GTZ), Agence Française de Développement (AFD), the Canadian cooperation system, the Japanese cooperation and Dutch cooperation agency. The different partners have stressed the importance of the decentralization process in Senegal, and the synergy that should be developed amongst them. With regard to local development, GTZ is the lead donor, and the EU holds that position in rural development sector. Given the similar approach and the risks of overlapping in the zone, the project has taken account of the ongoing and programmed interventions, and its decentralization support will supplement that already initiated. The project will re-establish partnerships with other players, aimed particularly at capitalization, exchange of information and

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regional coordination. Some of the project activities will also dovetail without overlapping with other national programmes (PSSA, PNIR, PMIA, etc.), and come to represent logical extensions. In the small-scale irrigation sub-sector, PAPIL, with its scope and philosophy will be in a position to catalyze and federate other initiatives, under the guidance of the DGR, whose skills in that field will also be reinforced. 6 PROJECT RISK AND SUSTAINABILITY 6.1 Recurrent Expenditure 6.1.1 The operating costs arising from the project implementation will concern the salaries of the staff involved, to be financed by the Government and the operating costs and staff allowances that will be shared between ADF and the Government, with the ADF share regressing in the manner indicted in table 6.1. At the end of the project, the PCU will disappear and the recurrent costs to be borne by the Sate will be limited to the operating costs and salaries of staff providing advisory support to the farmers. The latter costs are expected to decrease rapidly, given the training and apprenticeship organized during the project implementation period.

Table 6.1: Trend of recurrent expenditure (UA Million)

Sources 2004 2005 2006 2007 2008 ADF 0.165 0.154 0.150 0.153 0.141 Government 0.080 0.098 0.122 0.148 0.162

6.1.2 The recurrent costs generated by the physical outputs of the project concern the maintenance of the infrastructure (irrigation and pastoral development and structures, wells and boreholes, feeder roads) and the operating costs linked with plant and animal production. The maintenance of the water control structures will be taken over by the populations as community work, and through the payment of the fees constituted from the user charges collected within the committees. This system will be all the more facilitated as the beneficiaries will participate actively in freely determined development, and maintenance expenses will be limited, because of the simplicity of the techniques applied. The project, through support given to the structuring and organization of groups, will help train users in the management and maintenance, cultivate a spirit of ownership and desire to maximize the life spans of the structures and facilities. Concerning the feeder roads, maintenance will be carried out by CR, whose resources will derive from local taxes as well as State grants. The recurrent costs for the farming will concern preparation of plots, fertilizer, pesticides, and seeds. The calculation of additional income from the farms indicates that the beneficiaries will be able to bear all these costs. 6.2 Project Sustainability 6.2.1 the project is a response to spontaneous requests deriving from participatory planning, as elements of the existing local plans, and requiring strong prior commitment on the part of motivated beneficiaries and rural communities. This form of intervention, grounded on concerted diagnosis and freely expressed requests, is in itself a guarantee of sustainability of the outputs and effective commitment of the populations. The principles of the proposed development, already known in the project areas, are voluntarily centered on techniques that are simple, easily implemented, reproduced and managed, and for which the farmers constituting groups have been trained. In many components, the beneficiaries will physically participate in the implementation of certain works, which will strengthen the viability and internalization of some of the measures implemented. In deliberately avoiding sophisticated and costly techniques, the project seeks to promote the infrastructure and facilities designed in such a way as to ensure that they will be more easily maintained and managed by the producers.

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6.2.2 The project’s emphasis on local action, through the active and regionally de-concentrated supervision, development and improvement of the capacities of the farmer organizations and communities, close interaction with the management committees regarding maintenance and management of the development is part of an approach that aims to create the conditions for the farmers to take charge of the development that they themselves have sought and which has been put in place in their territory. The massive involvement of women in the project activities (rice-farming, market gardening) and their commendable group management ventures will also come as a plus for the successful implementation of the project. All these factors are reason to affirm that the project has every chance of sustainable viability, grounded in the support and participation of the populations and communities, the simplicity of the techniques applied the appropriateness of the crops targeted, and the special support to the management bodies. At the end of the project, the CR and producer groups will have acquired the capacity to be autonomous development actors, which in itself will be the most potent guarantee of the sustainability of the project activities. 6.3 Principal Risks and Mitigating Measures 6.3.1 Conflicts between stock raisers and farmers: The competition in the rural areas between the stockbreeders and farmers presents a moderate risk for the project, to the extent that, aside from the transhumance, stockbreeding is often part of agro-pastoral practices in the project area. For successful management of the area, the established distribution of agricultural and pastureland within the villages will be reinforced. The consultation sessions held with the local operators at the level of the CR will be decisive in preventing and settling conflicts. Another element of security of agricultural activity and social stability will be the specific development for the benefit of the stockbreeders (livestock corridors, ponds watering points). 6.3.2 Decentralized approach: The effectiveness and sustainability of the project outputs will be determined by the decentralization efforts and the commitment of the local stakeholders at all levels. The relatively recent transfer of authority to the CR, added to the effects of the political alternation in terms of the change of rural leaders, has brought about a local situation that is not yet well established, where several members of the CR appear to be only learning the ropes of local authority. Emphasis has therefore been laid on the special support to and supervision and training of local leaders and on perfect synergy with the operations of other partners. The political will of the authorities, the experience acquired through other local development projects and the participatory exchanges should however help to gradually entrench the process. 7 PROJECT BENEFITS 7.1 Financial Analysis 7.1.1 The financial analysis will be based on an overall diagnosis of the project using economic data gathered during the preparation study and updated during the appraisal mission. Five operating models have been drawn up, showing the diversity of the envisaged development in the three regions, with an overall predominance of rainfed production of groundnuts and millet-sorghum, and a small share at the outset for rice farming and horticulture: model 1 (Fatick, covering the salt land), models 2 and 3 (Kolda and Kédougou, covering the bottomlands), models 4 and 5 (Tamba, comprising one plot with pumping and one plot downstream from a retention structure. The features of the operations are described in annex D of volume 2. The operations have average areas of between 4 and 5 hectares. In these faming areas, the sizes of plots that will benefit from some degree of water control (salt land, bottomlands, irrigated areas) are around 0.5 ha, and without the project, will face low or failed (in the case of salt land) yields.

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7.1.2 In the with-project situation, the crops are further diversified (rice, corn, horticulture) and the yields will increase with the improvement of the planting techniques, the use of fertilizer and of selected seeds, and through improved control of water in a part of the area. Depending on the type of development, the yields expected are estimated at 3 to 4.5 t/ha of rice, 2.5 t/ha for corn, and 6 to13t/ha for horticulture. Under models 4 and 5, there will be double irrigated cropping, since the availability of water will be increased. Under these conditions, the with-project increases in standard farm incomes will be significant, exceeding 70% and in the cases of models 3 to 5, make for a doubling of the income. In the cases of models 1 to 3, the net with-project income is estimated at about CFAF 410,000 FCFA, while, for models 4 and 5, involving more intensive irrigation, the income is respectively, CFAF 512,000 and CFA 1,375,000. For all the irrigated crops, the increase in the earnings from a day’s work exceeds the daily wages of the farm worker, though that for horticulture shows the most significant increase (CFAF 2,900). 7.2 Economic Analysis 7.2.1 The project crops (rice, corn, market garden crops and fruits) have been selected with a view to optimizing the project returns and increasing farmer income. These are crops already being grown in the different areas, but in a rudimentary manner. The economic analysis has been conducted based on a calculation of additional cash flow, in the without- project situation, and with-project situation, over a period of 25 years. All the project costs have been calculated, including the social costs (FDL) and environmental expenditure. The costs have been calculated exclusive of tax and duty. The economic costs of inputs and small implements have been assessed at market prices. The economic cost of the rice has been determined using world rates, and taking account of freight and insurance and the preliminary costs, at CFA 192.4 per kilo. For the other products, the farmgate prices have been used, considering that they will generally not be subject to international transactions between Senegal and the major world exporting countries. 7.2.2 The added returns have been calculated taking into account the gradual increase in production expected from the land to be developed (3,210 ha), and a 25% increase in the production from the slopes and plateau crops grown by farmers supervised under the project. The agro-forestry production and the effects of the pond development on pastoral production have not been taken into account, since they are difficult to quantify. All the assumptions and results are presented in Annex D of the working documents attached to the original report. The project economic rate is set at 16.3 %. This rate is higher than the capital opportunity cost, which is 12% in Senegal. This return rate is also satisfactory, to the extent that a part of the yields taken into account fall short of actual possibilities, and part of the non-directly productive investments have been taken into account for the estimates. In addition, the project will considerably increase food and cash crop production, pastoral production (approximately 40,000 TLU concerned), give new impetus to trade and the regions concerned by the additional production, and help improve earnings, through import substitution concerning near 11,000 tons of rice, which gives approximately 2 billion CFAF each year, starting from full production. 7.3 Analysis of Social Impact The water control for development will make it possible to secure agricultural and pastoral production in the 3 regions concerned. The revival in activities will help improve the farmer incomes, and aid employment and settlement of rural work force. The minimum income for a family farm of 0.5 irrigated ha will increase by at least 70 %. Depending on the particular crops and the level of intensification, this income could attain levels likely to be between CFAF 400,000 and 600,000. Approximately 7,000 farmers will be directly concerned by the project and about a hundred groups of women market gardeners and rice farmers will be set up and/or supported. A total of about 40,000 women and 600 different groups will be affected by the project. The opening

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up activities (105km of feeder roads) will make it possible to revive the economic and social life of some hundred villages. In the regions, some 35 CR will learn local management with appropriate supervision, and derive social benefit from the infrastructure put in place with FDL financing, since some 200,000 persons are directly concerned. 7.4 Sensitivity Analysis The rate of return is 13.0% (3.3 point decrease) for a 10 % decrease in income, whereas it is 11.9% (4.4 decrease) should investments and the development work fall two years behind schedule. These rates are still acceptable, considering the very prudent basic assumptions used. The various tests conducted further confirm that the variables that have the greatest impact on the ERR are the sales price and the crop yields. Implementation of supervision, extension services and marketing support envisaged under the project appear totally essential for the attainment of the production and remuneration objectives. 8 CONCLUSIONS AND RECOMMENDATIONS 8.1 Conclusions In the face of climatic hazards and soil deterioration, and with most of its surface run off water escaping its control, the productive capital of Senegal’s agricultural sector remains threatened and under-developed. The project, centering on small-scale irrigation and pastoral development, will secure incomes for over 7,000 farms, while building up the management capacity and professionalizing rural administrations and village groups. The project will bring about a substantial increase in agricultural production and contribute to poverty alleviation and improve food security. It is designed to produce over 13,000 tons of cereal and raise the farmers’ incomes by as much as 70%, which would allow for significant changes at the level of households. It will also help improve the balance of payments, as it will notably make it possible to reduce rice imports, and thus secure foreign exchange savings in the order of two billion CFA Francs. The project will lead to the creation of new permanent and temporary jobs, thereby limiting the rural exodus of the youth, and favor the emergence of women and their integration into the economic fabric. It is designed as a coherent framework with activities aimed at local improvement as well as natural resource development and conservation. As designed, the project is technically feasible and financially and economically viable. The economic rate of return is 16.3 %. 8.2 Recommendations and Conditions for Loan Approval It is recommended that a loan not exceeding UA 14.31 million be granted to Senegal to implement the project, as described in this report, subject to the following specific conditions:

A. Conditions precedent to the entry into force of the loan agreement The entry into force of the loan agreement will be subject to the fulfillment by the borrower of the conditions stated in section 5.01 of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank.

B. Conditions precedent to the first disbursement

i. Furnish the Fund with evidence of the establishment of a project coordination unit, under the supervision of the Agricultural Engineering Department of the Ministry of Agriculture and Water Resource Management, as well as three regional offices (paragraphs 4.5.21 and 5.1.1);

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ii. Furnish the Fund with evidence of the appointment of the Coordinator, following a selection process that will have been approved beforehand, by the Fund (paragraph 5.1.2);

iii. Furnish the Fund with evidence of the secondment by the Government of the seven officers to be in charge of the coordination of the project (3 AR Engineers to head the Regional Offices, 1 Administrative and Financial Director, 1 monitoring-evaluation officer, 1 Gender specialist, 1 Decentralization specialist) whose curriculum vitae will have been approved beforehand by the Fund (paragraph 5.1.2);

iv. Undertake to provide the project with support staff comprising, for each of the three regional offices, of an Accounting Assistant, a Secretary and a Driver, and for the Coordination unit, an Accountant, a Secretary, a driver and a watchman (paragraph 4.5.21);

v. Furnish the Fund with evidence of the setting up of the project Steering Committee, chaired by a representative of the Ministry of Agriculture and Water Resource Management, and comprising, in addition to the five representatives of the ministries concerned (Agriculture and Water Resource Management, Stockbreeding, the Environment, Planning, Local Administrations), the Director of ANCAR, the Director of PNIR, the three chairs of the Regional Councils of Fatick, Kolda and Tambacounda, the Chair of the Association of Heads of Rural Communities, the chair of the National Council for Rural Coordination, and two representatives of NGOs (paragraph 5.2.4) ;

vi. Supply the Fund with evidence of the provision to the Project coordination Unit and the three regional offices, of adequate premises in Dakar, Fatick, Kolda and Tambacounda for the conduct of their activities (paragraph 4.5.21);

vii. Furnish the Fund with evidence of the opening of two bank accounts in a commercial bank acceptable to the Fund, in the name of the Project Coordination Unit, to receive (i) the loan resources, and, (ii) the Government counterpart resources, and of another bank account in an approved bank, to receive the resources of the Local Development Fund (paragraph 5.5).

C. Other conditions

The borrower is in addition required to:

i. Transmit to the Fund, no more than three months following the entry into force of the loan, the definitive list of support staff assigned to he project;

ii. Provide to the Fund, no more than six months following the entry into force of the loan, the agreements reached between the project and (i) ANCAR, SODEFITEX, and SODAGRI (extension, advisory support, marketing), (ii) CSE (environmental monitoring), and (iii) ISRA (development research).

SENEGAL : PAPIL Annex 1 : Page 1 of 1 List of Bank Group Operations in Senegal (UA million)

Status Project Window Date of Approval

Date of Effect.

Amount Approved (UA

thousand)

Amount cancelled (UA

thousand)

Net commitments

(UA thousand) A • AGRICULTURE 1 Comp. GUILDER VALLEY DEVELOPMENT ADF 08/24/1978 10/03/1980 1 980 262.00 165 753.48 1 814 508.522 Comp. BUSH FIRE CONTROL REAFORESTATION ADF 12/16/1983 06/09/1986 5 157 891.00 21 027.94 5 136 863.063 Comp. SALDE-WALA IRRIGATION DEVELOPMENT ADF 08/24/1984 10/27/1986 6 447 364.00 0.00 6 447 364.004 Comp. ARTISANAL FISHERIES PETITE COTE ADF 03/12/1985 03/06/1989 6 217 101.00 15 485.38 6 201 615.625 Comp. ANAMBE IRRIGATION DEVELOPMENT ADF 04/14/1986 08/29/1986 6 963 153.00 1 635.33 6 961 517.676 Comp. LOWER CASAMANCE RURAL DEVELOPMENT ADF 17/09/1987 05/12/1988 17 039 500.00 8 300 000.00 8 739 500.007 Comp. INDUSTRIAL FISHERIES REHABILITATION TAF 01/18/1989 09/11/1992 664 078.00 198 823.19 465 254.818 Comp. LIVESTOCK PROJECT ADF 06/18/1991 11/13/1992 8 565 784.00 2 100 000.00 6 465 784.009 Comp. ANAMBE IRRIGATION CONSOLIDATION ADF 01/27/1992 08/18/1992 7 828 942.00 42 753.38 7 786 188.6210 EC AGRICULTURE MODERNIZATION AND INTENSIF. ADF 05/06/1997 10/23/1998 10 000 000.00 0.00 10 000 000.0011 EC ENGINEERING STUDY OF THREE HILLSIDE DAMS TAF 04/30/1998 12/05/2001 1 090 000.00 0.00 1 090 000.0012 EC LIVESTOCK II ADF 05/17/2000 02/01/2002 10 000 000.00 0.00 10 000 000.0013 EC ANAMBE BASIN RURAL DEVELOPMENT ADF 04/25/2001 07/11/2002 7 180 000.00 0.00 7 180 000.0014 EC RURAL INFRASTRUCTURE PROJECT ADF 04/03/2002 11 852 000.00 0.00 11 852 000.00

Agriculture Total 100 986 075.00 10 845 478.70 90 140 596.30

B • TRANSPORT 1 Comp. DIOSMONE FIMELA N’DANGANE ROAD ADB 01/24/1973 09/16/1974 1 100 000.00 0.00 1 100 000.002 Comp. CAP SKIRRING ROAD ADB 09/13/1974 09/30/1975 200 000.00 17.51 199 982.493 Comp. LOUGA-NGNITH ROAD CONSTRUCTION ADF 10/09/1974 03/30/1977 3 684 208.00 212 411.38 3 471 796.624 Comp. CAP-SKIRRING ROAD PHASE I ADB 02/23/1977 02/17/1978 5 000 000.00 138 106.53 4 861 893.475 Comp. CAP-SKIRRING ROAD PHASE II ADB 02/27/1979 12/27/1979 6 145 000.00 1 194.86 6 143 805.146 comp. TRANSPORT SECTOR REHABILITATION ADF 12/17/1990 10/30/1992 4 936 839.00 190 969.27 4 745 869.737 ongoing DIAM NADJO-MBOUR ROAD ADF 07/12/2001 12/29/2002 15 000 000.00 0.00 15 000 000.00C • PUBLIC UTILITIES 1 Comp. SANITATION OF DAKAR AND ITS ENVIRONS ADF 04/30/1975 01/27/1978 4 605 260.00 3 864 882.81 740 377.192 comp. TOURISM DEVELOPMENT IN LOWER CASAMANCE ADB 10/14/1975 02/23/1978 400 000.00 99 527.23 300 472.773 Comp. DRINKING WATER SUPPLY TO THE CAP VERT REGION ADB 12/16/1975 02/23/1978 4 500 000.00 20 252.29 4 479 747.714 Comp. ELECTRIFICATION OF SAINT-LOUIS ADB 12/21/1976 08/29/1978 2 900 000.00 0.00 2 900 000.005 Comp. RUNOFF WATER STORAGE STUDY TAF 04/24/1980 02/14/1984 939 473.00 1 116.63 938 356.376 Comp. SANITATION OF DAKAR (PHASE II) ADF 12/16/1982 12/28/1983 12 001 308.00 15 743.92 11 985 564.087 Comp. TELECOMMUNICATION NETWORK ADB 08/26/1986 02/17/1988 11 120 000.00 4 379 674.20 6 740 325.808 Comp. RURAL AND URBAIN ELECTRIFICATION ADF 08/26/1986 06/29/1988 6 373 680.00 3 957.25 6 369 722.759 Comp. REDR. SECTEUR ELECTRICITE ADB 09/23/1986 09/01/1988 10 340 000.00 3 400.00 10 336 600.0010 Comp. CAYOR CANAL IMPLEMENTATION STUDY TAF 12/18/1989 10/24/1990 2 431 577.00 13 128.46 2 418 448.54

11 Comp. ENVIRONNEMENTAL IMPACT ASSESSMENT OF THE CAYOR CANAL TAF 10/30/1992 12/29/1995 1 657 894.00 88 044.97 1 569 849.03

12 ongoing SECAL PROGRAMME ADF 10/28/1998 12/24/1998 10 000 000.00 0.00 10 000 000.0013 ongoing DAKAR SANITATION PROJECT ADF 07/12/2001 12/29/2002 11 930 000.00 0.00 11 930 000.00D • INDUSTRY AND BANKS 1 Comp. LINE OF CREDIT ADB 10/19/1972 08/19/1974 1 500 000.00 192 834.00 1 307 166.002 Comp. SOTEXKA ADB 02/27/1980 08/17/1981 8 000 000.00 0.00 8 000 000.003 Comp. FERTILIZER PROJECT ADB 12/19/1980 07/01/1983 16 000 000.00 72 090.46 15 927 909.544 Comp. LINE OF CREDIT ADB 04/11/1985 02/09/1988 6 500 000.00 5 383 033.33 1 116 966.675 Comp. ICS RESTRUCTURING PROGRAMME ADB 08/26/1991 03/11/1992 11 600 000.00 0.01 11 599 999.996 Comp. REHABILITATION OF SOCIETE TEXTILE KAOLACK NTF 08/30/1991 03/27/1992 6 000 000.00 0.00 6 000 000.007 comp. SME DEVELOPMENT AND FINANCING ADB 12/16/1991 01/03/1992 100 000 000.00 0.00 100 000 000.00E • SOCIAL 0.001 Comp. DAKAR TEACHING HOSPITAL STUDY ADF 04/13/1984 08/24/1984 1 243 400.00 347 800.00 895 600.002 Comp. BASIC EDUCATION DEVELOPMENT NTF 09/23/1986 01/15/1988 5 000 000.00 81 128.31 4 918 871.69

3 Comp. SUPPORT TO WOMEN’S ADVANCEMENT GROUPS (GPF) ADF 09/24/1991 10/14/1992 3 776 313.00 96 385.26 3 679 927.74

4 Comp. POPULATION SECTOR STUDY ADF 01/06/1993 01/29/1996 921 052.00 411 293.78 509 758.225 ongoing EDUCATION II ADF 12/17/1996 12/16/1997 12 000 000.00 0.00 12 000 000.006 ongoing HEALTH I ADF 12/10/1997 03/09/2000 10 000 000.00 0.00 10 000 000.007 ongoing POVERTY REDUCTION ADF 06/30/1999 04/06/2001 10 000 000.00 0.00 10 000 000.008 ongoing POVERTY REDUCTION TAF 06/30/1999 08/19/2001 1 750 000.00 0.00 1 750 000.009 ongoing BASIC AND SECOND EDUCATION SUPPORT ADF 09/13/1999 03/03/2001 11 500 000.00 0.00 11 500 000.0010 ongoing BASIC AND SECOND EDUCATION SUPPORT TAF 09/13/1999 03/03/2001 1 500 000.00 0.00 1 500 000.0011 ongoing HEALTH II ADF 06/18//2003 10 000 000.00 0.00 10 000 000.0012 ongoing HEALTH II ADF 06/18/2003 1 350 000.00 0.00 1 350 000.0013 ongoing EDUCATION IV ADFGr. 06/25/2003 13 840 000.00 0.00 13 840 000.0014 ongoing EDUCATION IV ADFGr. 06/25/2003 1 000 000.00 0.00 1 000 000.00F • MULTI SECTOR 1 Comp. STRUCTURAL ADJUSTMENT LOAN I ADF 08/26/1987 10/21/1987 27 631 560.00 0.00 27 631 560.002 Comp. STRUCTURAL ADJUSTEMENT PROGRAMME II ADF 03/14/1990 06/20/1990 30 394 716.00 -111 674.42 30 506 390.42

3 Comp. INSTIT. SUPPORT TO THE MINISTRY OF ECON. AND FINANCE TAF 05/14/1990 07/01/1994 1 516 052.00 3 270.99 1 512 781.01

4 Comp. INSTIT. SUPPORT TO THE MIN. OF ECON. AND FINANCE TAF 05/14/1990 10/17/1991 2 880 130.00 3 377.80 2 876 752.205 ongoing TARIFF REFORM PROGRAMME ADF 12/08/2000 01/11/2001 20 000 000.00 0.00 20 000 000.006 ongoing DPS SUPPORT TAF 12/12/2002 1 550 000.00 0.00 1 550 000.00

GRAND TOTAL 533 704 537.00 26 357 445.53 507 347 091.47

SENEGAL: PROJECT TO SUPPORT LOCAL SMALL-SCALE IRRIGATION (PAPIL) Annex 2 Page 1 of 1

Map of the Project Area

This map has been drawn by the staff of the ADB Group exclusively for the use of readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank and its members any judgment concerning the legal status of a territory nor any approval or acceptance of these borders.

ATLANTIC OCEAN

MA

UR

ITA

NIA

INTERNATINOAL BORDERS

DEPARTMENT BORDERS

DEPARTMENT CHIEF TOWN

GAMBIA

GUINEA GUINEA

Annex 3 Page 1 of 1

SENEGAL

PROJECT TO SUPPORT LOCAL SMALL-SCALE IRRIGATION (PAPIL)

Project Organization Chart

M A H DCEF Plan

DGR

Steering Committee

Monitoring Evaluation

Technical Assistance - 30p/m GR - 10p/m decentralization

CCP (DAKAR) 1 coordinator 1 Training and monitoring/Evaluation officer support staff

Fatick Branch and CRC 1 AE / Manager

Kolda Office and CRC 1 AE Manager

Tambacounda Office and CRC

1 AE/Manager Fatick Department

Foundiougne Department Gossas Department

Kolda Department Velingara Department

Tambacounda Department Kedougou Department Bakel Department

Fatick ARD 29 Rural communities Kolda ARD

23 Rural communities Tambacounda ARD 35 Rural communities

DRDR Fatick and other Reg. and dep. Offices and CERP DRDR Kolda and other Reg.

and Dep. Offices and CERP DRDR Tamba and other Reg. And Dep. offices and CERP

Intervention at Medina Djikoye, and Programme focusing on salt control and agricultural revival.

Intervention at Medina Namo, and Velingara Pakane, and Programme focusing on small structures for water control

Programme focusing on development of bottom and rice fields small irrigated gardens and water collection

1 Gender officer 1 Decentralization officer

Synergy with: PAGERNA and CR Proj. (GTZ) …

Synergy with: PSIDEL (EU) ADEL (France) …

Synergy with: PSSA PLCP (ADB) …

ISRA SODAGRI

SODEFITEX ANCAR CSE PNIR PMIA

NGOs TES entreprises, etc.

Annex 4 Page 1 of 1

SENEGAL

PROJECT TO SUPPORT LOCAL SMALL SCALE IRRIGATION (PAPIL)

Detail of Categories of Expenditure (UA Million)

ADF GVT BEN TOTAL CATEGORIES M.L DV Total M.L M.L M.L DV Total

% Total

WORKS 2.306 4.476 6.782 0.032 0.866 3.204 4.476 7.680 47.2 Water control structures 0.374 1.012 1.386 0.000 0.044 0.418 1.012 1.430 8.8 Development works 1.058 2.062 3.120 0.000 0.640 1.698 2.062 3.760 23.1 Upgrading tracks crossings 0.597 1.110 1.707 0.000 0.085 0.683 1.110 1.792 11.0 Piezometric network 0.027 0.050 0.076 0.000 0.000 0.027 0.050 0.076 0.5 Environment 0.250 0.243 0.493 0.032 0.096 0.378 0.243 0.621 3.8 GOODS 0.109 0.457 0.566 0.013 0.003 0.124 0.457 0.581 3.6 Vehicles 0.000 0.152 0.152 0.000 0.000 0.000 0.152 0.152 0.9 Motorcycles 0.000 0.051 0.051 0.000 0.000 0.000 0.051 0.051 0.3 Office equipment 0.000 0.109 0.109 0.000 0.000 0.000 0.109 0.109 0.7 Furniture 0.017 0.031 0.047 0.013 0.000 0.029 0.031 0.060 0.4 Other equipment 0.092 0.114 0.206 0.000 0.003 0.095 0.114 0.209 1.3 SERVICES 0.961 1.965 2.925 0.025 0.000 0.986 1.965 2.951 18.1 Study, work control 0.130 0.245 0.375 0.000 0.000 0.130 0.245 0.375 2.3 Technical Assistance 0.045 0.406 0.451 0.000 0.000 0.045 0.406 0.451 2.8 Consultants’ services 0.234 0.415 0.649 0.025 0.000 0.259 0.415 0.674 4.1 Training 0.258 0.397 0.655 0.000 0.000 0.258 0.397 0.655 4.0 Extension 0.142 0.264 0.406 0.000 0.000 0.142 0.264 0.406 2.5 Agreement 0.084 0.135 0.219 0.000 0.000 0.084 0.135 0.219 1.3 Audit 0.069 0.103 0.171 0.000 0.000 0.069 0.103 0.171 1.1 OPERATION 0.126 0.131 0.257 0.334 0.000 0.459 0.131 0.591 3.6 STAFFING 0.431 0.000 0.431 0.203 0.000 0.634 0.000 0.634 3.9 MISC. (FDL) 0.520 1.213 1.733 0.000 0.260 0.780 1.213 1.992 12.2 BASE COST 4.453 8.242 12.695 0.606 1.128 6.187 8.242 14.429 88.6 NON ALLOCATED 0.571 1.045 1.615 0.084 0.150 0.805 1.045 1.849 11.4 Physical contingencies (5%) 0.172 0.329 0.501 0.020 0.043 0.235 0.329 0.565 3.5 Price escalation (3% compound) 0.399 0.715 1.114 0.064 0.106 0.569 0.715 1.285 7.9

TOTAL 5.023 9.287 14.310 0.690 1.278 6.992 9.287 16.278 100.0

Annex 5 Page 1 of 1

SENEGAL

PROJECT TO SUPPORT LOCAL SMALL –SCALE IRRIGATION (PAPIL)

Calculation of Economic Rate of Return and Sensitivity Test

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 ERR Investments 1 032 190 4 636 460 3 847 230 2 516 700 792 750 0 0 0 0 0 0 0 0

Production costs 0 402 848 1 006 709 1 348 421 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 Additional Economic Income 0 784 716 2 133 748 3 103 041 3 386 645 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 Economic Cash flow -1 032 190 -4 254 593 -2 720 191 -762 080 1 199 130 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517

ERR test 1 Investments 1 032 190 4 636 460 3 847 230 2 516 700 792 750 0 0 0 0 0 0 0 0 Production costs 0 402 848 1 006 709 1 348 421 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 Additional Economic Income - 10% 0 706 244 1 920 373 2 792 737 3 047 981 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 Economic Cash flow -1 032 190 -4 333 064 -2 933 566 -1 072 384 860 465 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889

ERR test 2 Delayed Investments (2 years) 206 438 309 657 516 095 4 636 460 3 847 230 2 516 700 792 750 0 0 0 0 0 0 Production Costs 0 402 848 1 006 709 1 348 421 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766

Additional Economic Income + 2 years 0 0 0 784 716 2 133 748 3 103 041 3 386 645 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283

Economic Cash flow -206 438 -712 505 -1 522 804 -5 200 165 -3 108 248 -808 425 1 199 130 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517

Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 ERR Investments 0 0 0 0 0 0 0 0 0 0 0 0

Production costs 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 Additional Economic Income 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 ERR Economic Cash flow 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 16.3

ERR test 1 Investments 0 0 0 0 0 0 0 0 0 0 0 0 Production costs 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 Additional Economic Income - 10% 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 3 101 655 ERR Economic Cash flow 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 1 706 889 13.0

ERR test 2 Delayed Investments (2 years) 0 0 0 0 0 0 0 0 0 0 0 0 Production Costs 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766 1 394 766

Additional Economic Income + 2 years 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 3 446 283 ERR

Economic Cash flow 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 2 051 517 11.9