Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 30326-ML

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF SDR 30.7 MILLION (US$46.4 MILLION EQUIVALENT)

TO THE

REPUBLIC OF MALI

FOR AN

AGRICULTURAL COMPETITIVENESS AND DIVERSIFICATION PROJECT

June 6,2005

Environmental and Social Development (AFTS4) Country Department 15 Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective December 2004)

AFD APROFA

ASPEN CAS CBRD CDD CFAA CIDA Ch4DT

CSLP DNACPN

DTIP

DTIS ERR ESIA ESMF FARRAH FCFA FM FMR FMS FSDP GDP IAS IAPSO IB RD IDA IF IRR

Currency Unit = Franc CFA CFAF530 = US$1

US$1.51209 = SDR1

FISCAL YEAR January 1 - December 31

ABBREVIATIONS AND ACRONYMS

Agence FranGaise de De'veloppement (French Agency for Development) Agence pour la Promotion des Filigres Agricoles(Agency for Development o f Agro- Business Associations) Africa Safeguards Policy Enhancement Country Assistance Strategy Community-Based Rural Development Project Community Driven Development Country Financial Accountability Assessment Canadian International Development Agency Compagnie Malienne pour le De'veloppement des Textiles (Malian Textile Development Company) Cadre Strate'gique de Lutte contre la Pauvrete' - Strategic framework to fight poverty Direction Nationale de 1 'Assainissement, du Contrdle des Pollutions et Nuisances(Nationa1 Agency in charge o f water treatment, pollution and nuisance control) De'monstration de techniques d'irrigation et de production (Demonstration o f irrigation and production technologies) Diagnostic Trade Integration Study Economic Rate of Return Environmental and Social Impact Assessment Environmental and Social Management Framework Financial Accounting, Reporting and Auditing Handbook Franc CFA Financial Management Financial Monitoring Reports Financial Management System Financial Sector Development Project Gross Domestic Product International Accounting Standards Inter-Agency Procurement Services Office International Bank for Reconstruction and Development International Development Association Integrated Framework Internal Rate o f Return

FOR OFFICIAL USE ONLY International Monetary Fund International Standards on Auditing Ministbre de 1 'Agriculture (Ministry o f Agriculture) Millennium Development Goals Ministbre du De'veloppement Rural et de 1 'Environnement (Ministry o f Environment and Rural Development) Monitoring and Evaluation Micro-Finance Institution Non Governmental Organization Net Present Value Programme d'Appui a la Commercialisation des Ce're'ales au Mali (Program to support cereals trading in Mali) Projet d 'Appui aux Communaute's Rurales (Rural Community Development Project) Projet d'Appui aux Initiatives de Base (Grassroots Initiative Project) Projet d'Appui aux Sources de Croissance (Growth Support Project) Projet d'Appui aux Services Agricoles et aux Organisations de Producteurs (Agricultural Services and Producer Organizations Project) Programme d 'Ame'lioration des Systbmes d'Exploitation (Farming Systems Improvement Program) Projet d' Appui iz la Valorisation et Commercialisation des Produits Agricoles (Agricultural Trading and Processing Project) Projet de Compe'titivite' et de Diversification Agricoles (Agricultural Competitiveness and Diversification Project) Project Implementation Unit Programme National d'lnfrastructures Rurales (National Rural Infrastructure Project) Producer Organization Projet Pilote pour 1 'Irrigation Prive'e (Pilot Private Lrrigation Project) Poverty Reduction and Growth Facility Poverty Reduction Support Credit Poverty Reduction Strategy Paper Resettlement Policy Framework Structural Adjustment Credit Systbme Financier De'centralise' (Decentralized Financial System) Small and Medium Enterprise Statement Of Expenses Sub-Sahara Africa Unite' de coordination du projet (Project Coordinating Unit) Union Economique et Mone'taire Ouest-Africaine (West African Economic and Monetary Union) United Nations Development Program US Agency for International Development

IMF ISA MA MDG MDRE

M&E MFI NGO NPV PACCEM

PACR PAIB PASC PASAOP

PASE

PAVCOPA

PCDA

PIU PNIR PO PPIP PRGF PRSC PRSP RPF SAC S F D S M E SOE SSA UCP UEMOA

UNDP USAID

V ice President: Gobind T. Nankani

Sector Manager: M a r y Barton-Dock Country Director: A. D a v i d Cra ig

Task Team Leader: Patrick Labaste

This document has a restricted distribution and may b e used b y recipients only in the performance of their official duties. I t s contents may not b e otherwise disclosed without W o r l d Bank authorization.

M A L I Agricultural Competitiveness and Diversification Project

CONTENTS

Page

STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 Country and sector issues .................................................................................................... 1

Rationale for Bank involvement ......................................................................................... 3

Higher level objectives to which the project contributes .................................................... 3

A . 1 . 2 . 3 .

B . PROJECT DESCRIPTION ................................................................................................. 4 . ............................................................................................................. 1 Lending instrument 4

2 . Project development objective and key indicators .............................................................. 4

3 . Project components ............................................................................................................. 5

4 . Lessons learned and reflected in the project design ............................................................ 7 5 . Alternatives considered and reasons for rejection .............................................................. 8

C . IMPLEMENTATION .......................................................................................................... 8 1 . Partnership arrangements .................................................................................................... 8 2 . Institutional and implementation arrangements .................................................................. 9

3 . Monitoring o f implementation and evaluation o f results .................................................. 10

4 . Sustainability ..................................................................................................................... 11

5 . Critical r isks and possible controversial aspects ............................................................... 11

6 . Credit conditions and covenants ....................................................................................... 14

D . APPRAISAL SUMMARY ................................................................................................. 14 1 . Economic and financial analyses ...................................................................................... 14

2 . Technical ........................................................................................................................... 14

3 . Fiduciary ........................................................................................................................... 14

4 . Social ................................................................................................................................. 15

5 . Environment ...................................................................................................................... 15

6 . Safeguard policies ............................................................................................................. 16

7 . Policy Exceptions and Readiness ...................................................................................... 16

Annex 1: Country and Sector or Program Background ......................................................... 17

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 23

Annex 3: Results Framework and Monitoring ........................................................................ 30

Annex 4: Detailed Project Description ...................................................................................... 38

Annex 5: Project Costs ............................................................................................................... 42

Annex 6: Implementation Arrangements ................................................................................. 43

Annex 7: Financial Management and Disbursement Arrangements ..................................... 47

Annex 8: Procurement ................................................................................................................ 54

Annex 9: Economic and Financial Analysis ............................................................................. 67

Annex 10: Safeguard Policy Issues ............................................................................................ 72

Annex 11: Project Preparation and Supervision ..................................................................... 75

Annex 12: Documents in the Project Fi le ................................................................................. 77

Annex 13: Statement of Grants and Credits ............................................................................ 78

Annex 14: Country at a Glance ................................................................................................. 80

Annex 15: Map Number 34083 .................................................................................................. 82

M A L I

Agricultural Competitiveness and Diversification Project

Project Appraisal Document

Afr ica Region

m s 4

Date: June 6,2005 Country Director: A. David Craig

Team Leader: Patrick Labaste Sector(s): Agricultural markets and trade (50 percent); Crops (20 percent); General agriculture/fisheries (20%); Roads and highways (10 percent). Theme(s):'Export development and competitiveness (P); Trade facilitatiodmarket access (P); Rural services and infrastructure (S). Environmental screening category: B Safeguard screening category:

Sector Manager: Mary A. Barton-Dock

Project ID: PO81704 Lending Instrument: SIL

Program Financing Data _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

[ ] Loan [XI Credit [ ] Grant [ ] Guarantee [ ] Other: Total Bank financing (US$m.): 46.4 Proposed terms: Standard Credit

Years to Maturi ty: 40 Commitment fee: Standard Service Charge: Standard

Grace Period (Years): 10

Financing Plan (US$m.)

Source Local Foreign Total Borrower 1 .oo 0 1 .oo IDA 28.32 18.13 46.45 Total: 29.32 18.13 47.45 Borrower: Republic of Ma l i Responsible agency: Ministry of Agriculture (MOA) Estimated disbursement (Bank FY/US$m):

FY FY06 FY 07 FY 08 FY 09 FYlO FYI 1 Annual 5.0 7.8 9.5 10.0 8.0 6.42

Cumulative 5.0 12.8 22.0 32.0 40.0 46.45

Project implementation period: 6 years Expected effectiveness date: October 15,2005 Expected closing date: June 30,2012

Does the project depart from the CAS in content or other significant respects? Ref. PAD A.3 Does the project require any exceptions from Bank policies? Ref. PAD 0 . 7 Have these been approved by Bank management? I s approval for any policy exception sought from the Board?

[ ] Yes [XI No

[ ] Yes [XI No [ 1 Yes [ 1 No [ ] Yes [x] No

Does the project include any critical risks rated “substantial” or “high”? (i) world commodity prices are s t i l l declining; (ii) weak performance from public and private service providers. Ref. PAD C.5

[XI Yes [I No

Does the project meet the Regional criteria for readiness for implementation? Ref. PAD 0 . 7

Yes E No

Project development objective Ref. PAD B.2

The project aims at fostering improvements in the performances o f supply chains for a range ol agricultural and livestock products, for which Mal i has strong comparative advantage The proposec investment i s expected to reinforce the competitiveness o f both traditional (cotton, rice) and non- traditional (fruit, horticulture products, o i l seeds, arabic gum, cashews, etc.) agricultural crops througk targeted investment to remove critical constraints, improve productivity and efficiency and builc organizational and institutional capacities, both private and public, along the supply chains. In the long run, the project should contribute to increasing and diversifying rural household incomes and economic opportunities. I t supports the development o f a vibrant and diversified commercial agriculture as a mean: to move away from subsistence agriculture, which i s often synonymous to poverty for a majority o f rura households.

Project description Ref. PAD B.3.a,Technical Annex 4 Component 1 : Innovation and dissemination o f irrigation, post-harvest and value adding technologies Component 2: Improvement o f performance o f agricultural supply chains Component 3: Access to financing Component 4: Market-oriented infrastructure Component 5: Project management and Monitoring and Evaluation

Which safeguard policies are triggered, if any? Ref. PAD 0.6, Technical Annex 10

Environmental Assessment (OP/BP/GP 4.01) Pest Management (OP 4.09) Involuntary Resettlement (OPBP 4.12)

Significant, non-standard conditions, if any, for: Ref. PAD C.7 Board presentation: July 5, 2005 Credit effectiveness: October 15,2005 Covenants applicable to project implementation: The conditions for credit effectiveness are: (a) finance officer and accountant selected and appointed; (b financial management system acceptable to the Bank installed; and (c) qualified external auditor selected and appointed.

In addition to standard pre-requisites (fiduciary and procurement management set-up, projec implementation manual adopted, etc.), the following conditions wi l l have to be fulfil led befori effectiveness: (i) steering committees established, including private sector and professional organization representatives; (ii) core project staff hired; (iii) monitoring and evaluation system established; and (iv information on project objectives and activities disclosed, especially toward producer associations ani private sector operators.

A. S T R A T E G I C CONTEXT A N D R A T I O N A L E

1. Country and sector issues

Country Overview and the PRSP

With a per capita income o f US$300 (2004), M a l i is one o f the world’s poorest countries according to UNDP social indicators. The poverty rate i s estimated at 64 percent (2002). The country - which i s landlocked - i s one o f the largest in Afr ica wi th a surface o f 1,204,000 square kilometers and a population o f 11.6 mil l ion (2004) growing at an annual rate o f 2.4 percent. Agro-climatic zones range from Saharan (less than 150 mm o f rainfall) in the north to Guinean or sub-tropical (1,200 mm of rainfall) in the south. Growth in the agricultural sector i s constrained b y l o w and irregular rainfall, poor and fragile soils, as wel l as generally low productivity because o f the widespread use o f traditional technologies. Economic infrastructure, particularly transport and communications, is weak and human capital is underdeveloped as shown by indicators on health and education levels. Poverty in M a l i is essentially a rural phenomenon wi th the rural poverty incidence three times higher in rural areas than in urban centers. The poorest of the population are rural households engaged in subsistence agriculture. The most vulnerable parts o f the population are women, children suffering f rom malnutrition, young people wi th no access to employment and the elderly.

Mali ’s Poverty Reduction Strategy Paper (PRSP), completed in M a y 2002, was endorsed b y the Boards o f the Wor ld Bank and IMF in March 2003 and i s supported b y the donor community. In 2002-03, M a l i made satisfactory progress towards the PRSP objectives. The policy direction and quantitative objectives o f the PRSP are based on a vision o f sustained and poverty-reducing growth. The strategy lays out four pillars: (i) creating a macroeconomic environment for accelerated and re-distributive growth in a context o f macroeconomic stability and openness, driven b y the private sector; (ii) promoting institutional development, governance and participation; (iii) developing human resources and access to quality basic services; and (iv) building basic infrastructure and developing productive economic activities.

Constraints and Issues for Rural Development

Growth in the rural sector i s severely constrained by a number o f factors such as geography, climate, human capital, poor state o f basic infrastructure and weak connection to markets.

Declining and erratic rainfall. Over the past 30 years, the country has faced declining and erratic rainfall and a southward movement o f desertification. Severe droughts in the 1980s (particularly 1983-84 and 1987-88) have left an estimated 4 mi l l ion rural residents highly vulnerable to food shortages. The climatic risk i s a critical factor in sustained production and productivity increases. Recent droughts had a negative impact on productive assets and on the behavior o f producers who adapt b y using low riskhow productivity production systems.

Low productivity of agriculture. With some noticeable exceptions l ike rice production on the irrigated perimeters o f the Office du Niger, productivity o f Malian agriculture and agro food system remains generally very low and stagnant, even compared to that o f other developing countries. This i s due to a number o f factors, among which the widespread use o f traditional low-

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input/low-output cultivation techniques, insufficient access to water resources for irrigation, as well as losses and inefficiencies in the downstream stages of the supply chain due to high transportation costs, lack of storage infrastructure, limited development of post-harvest processing, and poor or limited access to markets.

Limited access to markets because of poor basic rural infrastructure. Rural infrastructure i s poor and unevenly distributed, contributing to slow growth in many regions. Due to the poor network o f rural/feeder roads, large parts o f rural areas are not adequately linked to markets, which hinders producers from fully exploiting the new opportunities offered by increased urban demand and export possibilities. In addition, limited access to input distribution and credit, as well as other agricultural services (extension, technical advice), has resulted in low yields and poor revenues. Constraints on rural water supply also raises a serious challenge to both people and livestock.

Insufficiently diversified rural economy and weak private sector in rural areas. Mali's predominantly rural economy i s heavily concentrated on a limited number of traditional products and exports (cotton, rice and livestock). This imposes limits to the revenues and economic opportunities in rural areas and creates a high level of vulnerability to shocks, both at macro and micro (farm) level. Private sector activities in rural areas are essentially limited to trading, mostly in the informal sector. As a result, private sector involvement in the creation o f new opportunities, technology transfer, investment and generation of income and employment remains extremely low.

Rural Development Strategy

The Ministry o f Rural Development prepared a long-term Master Plan for Rural Development (Sche'ma Directeur du De'veloppement Rural) in 1992 and updated i t in 2001. I t includes nine priority action programs that have been integrated into the Poverty Reduction Strategy (Cadre Strate'gique de Lutte contre la Pauvrete' - CSLP): (1) support to agricultural services and producer organizations; (2) development o f rural infrastructure and farming equipment; (3) promotion and improvement of the competitiveness o f agricultural supply chains; (4) stimulation of exports o f agricultural, forestry, livestock and fishery products; (5) intensification and diversification of agricultural production; (6) reinforcement of food security; (7) promotion of financing of the rural sector and rural credit; (8) management of natural resources to sustain rural development; and (9) contribution to finalizing and implementing local development plans. The Bank has been supporting the implementation o f the sector strategy through its portfolio of investment operations, ongoing (PNR: Programme National d 'Infrastructures Rurales - National Rural Infrastructure Project - and PASAOP: Projet d'Appui aux Services Agricoles et aux Organisations Professionnelles - Agricultural Services and Producer Organization Project) or in preparation (PCDA: Projet de Compe'titivite' et de Diversijlcation Agricole - Agricultural Competitiveness and Diversification Project - and PACR: Projet d'Appui aux Communaute's Rurales - Rural Community Development Project).

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2. Rationale for Bank involvement

Poverty in M a l i i s essentially a rural phenomenon. Fighting poverty means improving incomes and livelihoods and more generally providing economic opportunities to rural dwellers. As indicated above, the Bank has been strongly supporting the implementation o f government’s rural development strategy, in the framework o f its overall poverty reduction strategy, as formulated in the CSLP, and in line wi th the Country Assistance Strategy (CAS) for the period 2004-2006 and the sector’s Master Plan. One o f the key pillars o f this overall strategy i s to accelerate broad-based growth by tapping more systematically into the country’s important agricultural potential and strengthening capacities o f the private sector to seize market opportunities. To achieve this objective, the proposed project has a strong private sector focus and market orientation and includes investment in communication and marketing infrastructure for commercial agro-supply chains. Hence i t complements other IDA-funded programs supporting public agricultural services (PASAOP), community-based development and decentralization (CBRD) and large-scale infrastructure (PNIR).

Over the last few years, in order to improve the performance of i t s operations in Mali , the Bank’s portfolio in the rural sector has been restructured towards supporting broad national programs, as opposed to smaller self-standing investment projects. As a result, the current Bank portfolio i s now more aligned with government’s priorities and with the main sector development programs. The proposed operation would complement the portfolio by providing resources to support one o f the key strategic programs. I t i s also consistent with the orientation towards programmatic lending, which is one o f the objectives o f the current CAS.

There are other strong reasons justifying the Bank’s involvement. Through pi lot projects implemented in the late 1990s, the Bank supported the promotion o f small-scale irrigation (PPP), as wel l as trading and processing o f agricultural products (PAVCOPA). Critical innovations and breakthroughs were brought about b y these pilot projects - such as the multi- modal transportation project (raillsea) for fruit exports - and important lessons were learnt, which led to the design of effective approaches and programs to enhance the development of a diversified and commercially oriented agriculture and agribusiness sector. Given i t s global approach, the Bank has a clear comparative advantage in helping government scale up pilot projects and support private investment and initiatives in irrigation, agro-processing and marketing o f value-adding agricultural and horticultural products.

In addition, the Bank has a key role to play in mobilizing other donors support and coordinate interventions around a strategically important, highly visible, government-led program, that can bring together private sector stakeholders and make a difference in improving the output and performances o f agricultural supply chains. So far, USAID, AFD, CIDA, as wel l as the Dutch and German cooperation have either committed resources or plan to do so for projects that w i l l complement the PCDA.

3. Higher level objectives to which the project contributes

The project has a poverty focus and w i l l contribute to two important Mi l lennium Dev’elopment Goals (MDG): (i) eradicating extreme poverty and hunger; and (ii) ensuring environmental

3

sustainability in rural areas. I t should help strengthen the competitiveness o f traditional agricultural exports (cotton, livestock) and diversify the rural economy - which i s today highly dependent on cotton and rice cultivation - into high value crops, stimulate improvements in productivity and reduction o f r isks for small farmers through dissemination o f adapted low-cost irrigation technology, increase rural incomes thanks to improved marketing channels for high value agricultural and livestock products and reduce transaction costs thanks to the constructionh-ehabilitation o f communication infrastructure. In effect, diversification and creation o f altemative economic opportunities are major challenges for Mali ’s rural sector.

The CAS puts emphasis on supporting competitive, broad-based growth in the rural sector b y helping to increase agricultural productivity and production in a sustainable manner, b y exploiting further the potential for irrigated agriculture, b y diversifying agricultural and livestock production, and b y implementing natural resource management programs. The proposed project f i ts wel l within these objectives and strategy. The project amount was scaled up from the US$35 mi l l ion credit ini t ial ly envisaged in the CAS to US$46.4 mi l l ion as Ma l i was rated a good performer under the IDA Country Performance Ratings.

B. PROJECT DESCRIPTION

1. Lending instrument The proposed program w i l l be supported through a specific investment loan (SIL).

Implementation period: 6 years

2. Project development objective and key indicators The project aims at fostering improvements in the performances o f supply chains for a range of agricultural, livestock, fishery and gathering products, for which M a l i has a strong comparative advantage. The proposed investment i s expected to reinforce the competitiveness o f both traditional (cotton, rice) and non-traditional (fruit, horticulture products, o i l seeds, arabic gum, cashews, etc.) agricultural products through targeted investment to remove critical constraints, improve productivity and efficiency and build organizational and institutional capacities, both private and public, along the supply chains. In the long run, the project should contribute to increasing and diversifying rural household incomes and economic opportunities. I t supports the development o f a vibrant and diversified commercial agriculture as a means to move away f rom subsistence agriculture, which i s often synonymous to poverty for a majority o f rural households.

The project proposes to achieve the above objectives b y (i) supporting the demonstration and dissemination o f low-cost agricultural technologies and agro-processing techniques (irrigation, post-harvest) for high value products; (ii) building capacities at various levels o f the supply chains, forging inter-professional dialogue and promoting business development services (market research, market information systems, business plan preparation, private advisory services, etc.); (iii) facilitating access to financing and risk management instruments; (iv) building commercial infrastructure to facilitate marketing of agricultural, horticultural and livestock products and improving rural roads for the collection o f cotton and other agricultural produce. In addition, the project w i l l support the preparation o f long term strategies for further development o f selected high value agricultural and livestock products in Mal i .

4

Improving the competitiveness in the cotton sector, the leading export crop o f Mali, i s critical for the sustainable long-term growth of the sector. Support wi l l be brought by PCDA through investment in infrastructure (rural roads rehabilitation component), through capacity-building of professional organizations in the cotton sector, through access to applied research grants and support to technology improvements (varieties, processing technologies) - jointly with the Bank- funded PASAOP - as well as through the funding of demand-driven initiatives aimed at improving quality and market development, such as fair-trade cotton.

Progress towards the objectives wi l l be monitored by key results indicators covering project performance at all levels, i.e.:

0

0

0

Marketed quantities and revenues obtained from the selected products ; Volume and range of exports o f the selected agricultural/livestock products; Increased market shares for Malian products on regional and intemational markets; Irrigation, post-harvest and value-adding technologies disseminated among farmers and operators; Number of sub-projects generated, number of private investors attracted and amount o f investment generated in the selected supply chains;

Number of professional/trade associations active and effective in the promotion of supply chains

3. Project components The project consists of the following five components:

Component 1 : Demonstration and dissemination of irrigation, post-harvest and value adding technologies (US$10.35 million). The component supports the demonstration and dissemination by private sector providers o f low-cost, simple and adapted techniques and technologies to improve the production, productivity, processing and marketing of selected high value agricultural products.

There are three sub-components: (a) demonstration and promotion of technological innovations, particularly through implementation o f pilot-plots at farm level and the creation of demonstration centers at regional level; (b) development of private sector capacities to provide equipment, inputs and advisory services, and (c) dissemination of techniques and technologies and support to investment sub-projects, particularly through a matching grant mechanism. Innovative technologies wi l l be promoted in the following areas: (i) small-scale irrigation technologies and low-cost adapted irrigation equipment; (ii) intensification of cropping systems and in-the-field productivity improvements for high value products; and (iii) storage, post-harvest and agro- processing technologies and equipment, aimed at improving the quality and value of products.

0

0

Component 2: Improvement o f performances of agricultural supply chains (US$7.07 million). The component aims at improving the organization and performances o f agricultural supply chains, reinforcing private sector capacities to respond to market opportunities and improving the competitiveness of agricultural products, both traditional and new high value products, for which Mal i has comparative advantage. This w i l l enable the country to diversify i t s export base and provide farmers with opportunities to generate new sources of income, thus

5

reducing their exposure to risks. Although some high value products are currently produced, exports are very low compared to that o f other SSA countries such as Kenya or Ghana.

This component w i l l support (i) market research and improvement o f the information base on supply chains, (ii) improvement in supply chain organization and inter-professional dialogue, through institutional capacity-building and training; (iii) promotion o f private investment and improvement in the provision o f private services; (iv) quality and food safety management.

Component 3: Access to financing (US$2.93 million). This component aims at facilitating access to capital and financial services for the various private actors and operators involved in the agricultural supply chains and strengthening the current agriculture credit market in Mal i . I t entails particularly inducing and helping financial intermediaries (banks, micro-finance institutions, existing guarantee funds) build their capacities, increase their outreach and ability to respond to the needs of the various actors along the supply chain (producers, traders, processors, transporters, etc) b y offering a wider range o f financial services.

The component wi l l include three sub-components:

1, Technical assistance for operators and financial institutions and reinforcement o f their capacities to appraise and supervise sub-projects and operations in the sector. The objective i s to enable financial institutions to extend their offer o f equity capital, agriculture related loans and other services, and increase the offer o f financial services at competitive prices while improving their turn-over in this particular sector in a sustainable manner.

2. Technical assistance for the operation o f a partial guarantee fund to help financial institutions engage more actively in the sector by providing partial guarantee coverage for loans. This fund w i l l in priority guarantee medium terms loan for capital goods destined to farmers, agro businesses and exporters.

3. Support to the creation and development of a range of financing instruments adapted to serve small farmers, artisans, service providers, rural entrepreneurs, agro-enterprises and agribusinesses.

Component 4: Market-oriented infrastructure (US$21.49 million). This component w i l l provide resources to carry out an investment program aimed at improving basic commercial and communication infrastructure, in order to improve linkages to markets and reduce transaction costs. I t w i l l (i) facilitate the creation o f export facilities, collection centers, storage and processing facilities to support the development o f agricultural supply chains and improve their competitiveness, and (ii) carry out an emergency feeder road rehabilitation program which i s critical for post-harvest and marketing operations.

This component w i l l include two sub-components for publickollective infrastructure:

1. construction of commercial infrastructure such as export facilities, cold chain equipment, storage facilities, pack houses, wholesale markets, etc.;

2. rehabilitation o f rural roads, particularly in cotton-growing areas, and access roads for post- harvest, processing and commercial infrastructure built wi th the assistance of the project.

Rehabilitation of feeder roads is essential to improve the collection o f cotton and other agricultural commodities, as well as provide access to marketing infrastructure and to areas with high potential for increased agricultural production. Rehabilitation w i l l entail essentially the

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treatment o f critical spots. Construction and maintenance o f rural roads were part o f the public service missions which were transferred from the cotton company (CMDT) to the relevant ministries in the framework o f the cotton sector restructuring program supported b y the recent Bank’s Structural Adjustment Credit (SAC 111). However, during this transition period, maintenance o f many roads has been neglected due to lack o f resources.

Component 5: Project management and Monitoring and Evaluation (US$5.61 million). This component w i l l provide the resources necessary to ensure adequate project management, particularly overall coordination, financial management and procurement o f goods and services, as well as monitoring o f implementation and evaluation o f results (see details in Section C.3 below).

4. Lessons learned and reflected in the project design

The main lessons drawn from the pilot projects and previous experiences that helped design the present project are summarized below:

e Market-oriented, private sector-led interventions. Interventions to support the private sector and the development o f commercial agriculture are l ikely to be successful i f they are based on the identification and assessment o f market opportunities and comparative advantage and worked backwards to the production level. The selection of supply-chains to be supported by the project w i l l be based on market potentialities. Supply chain development must be private sector led, wi th public interventions aimed at helping the private sector overcome critical constraints and market failures. The approach needs to be bottom-up and interventions must be driven by economically viable projects promoted b y private sector and professional organizations for the given supply chain. Nevertheless, the public sector w i l l retain a key role in fostering the dialogue with the private sector, as wel l as in providing resources for public investment targeted at removing bottle-necks and providing for the public goodcollective dimension o f supply chain development, as well as for project impact monitoring.

e Holistic approach to supply chain development. Experience shows that resolving a problem on a specific segment o f the fili6re w i l l not necessarily result in improved performance if other blockages remain. Interventions must therefore be designed on the basis o f a holistic diagnosis, which looks at the supply chain as a whole, f rom production to marketing, in order to identify specific constraints and bottlenecks. This has worked remarkably well in the early stages o f development o f mango exports and the breakthrough made in improving the logistics chain.

e Sub-contracting and contracting out the implementation. Delivering services and infrastructure to the private sector, including farmers, w i l l be done more efficiently if contracted out to private service providers and other entities such as NGOs. Public sector services and agencies do not have al l the required ski l ls , the results-oriented culture, the availability and the efficiency for carrying out all interventions, ranging from capacity-building activities to c iv i l works.

e Monitoring and evaluation. Taking into account the PAVCOPA and PPIP weaknesses in this area, establishing a sound M&E i s critical to ensure a close and reactive monitoring of supply-chain performances and project’s impacts. The design o f the M&E system w i l l be closely supervised in terms o f staffing, design and data analysis and dissemination.

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5. Alternatives considered and reasons for rejection

One option could have been to try to include the proposed interventions in the next phase o f one o f the ongoing APL programs under implementation, i.e. PNIR or PASAOP. However, both o f these programs have a substantially different focus and content. None o f them i s designed to provide specific support to commercial agriculture and supply chains development. The PNIR deals wi th infrastructure for large-scale irrigation but does not cover processing and marketing infrastructure. The PASAOP i s mainIy focused on improving public services and empowering producer organizations. I t provides assistance and resources to producer organizations. The proposed project w i l l fill the gap in providing support to private operators, such as processors or exporters.

Due to the specificities o f agricultural supply chains, and the holistic approach that i s key to their development, i t seemed difficult to include the targeted support at all levels o f the supply chain in a broader private sector development project. This type of operation generally aims at addressing constraints to private investment at macro level and in a more urban entrepreneurial environment are not designed to deal wi th the various actors and constraints along the supply chain, most o f them located in rural areas. On the other hand, experience from previous Bank involvement shows that small-scale projects targeted at a one or at a l imited number o f supply chains are not necessarily cost-efficient and have l imited results and impact. As mentioned above, the evolution o f Bank operations in M a l i as elsewhere i s towards programmatic lending and scaling up o f operations.

Other donors (CIDA, USAID, Dutch) are involved in the support to commercial agriculture in Mal i . However, due to l imited resources, bilateral donors typically target specific f i l id res or segments o f f i l id res, and therefore lack a global and holistic approach to agricultural market promotion. Most of them do not provide resources for investment in hardware and infrastructure. As a result, they strongly support the Bank proposed intervention in supply chains development that they see as complementing their own interventions.

C. IMPLEMENTATION 1. Partnership arrangements

As part of a broader national program, which i s one o f the pillars o f the Master Plan for Rural Development, the proposed project has been prepared and w i l l be implemented in close collaboration with other donors programs. Bilateral donors are committed to provide assistance to targetedfilidres, intervening all along the supply chain, while the Wor ld Bank credit w i l l complement these interventions by providing resources to intervene on cross-cutting issues and not yet supported f i l idres. Major donors involved in market-oriented agricultural promotion or supply chain development projects are: the U S Agency for International Development, the Canadian International Development Agency and the Dutch cooperation. Details o f their respective programs are presented in annex 2. The different interventions are or w i l l be funded through parallel financing procedures. The collaboration that has been developed w i l l be maintained during the implementation o f the project, through the establishment of a national steering committee (see fol lowing section). Further details regarding donor coordination are provided in annex 6.

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2. Institutional and implementation arrangements

The project activities are expected to spread over a period o f six years. As detailed in Annex 6, the implementation o f the project w i l l be guided by the following principles: 0

0

0

Based on the above criteria, activities w i l l be deployed throughout the main regions o f M a l i enjoying a strong potential for commercial agriculture, i.e. the regions o f Sikasso, Skgou, Bamako/Koulikoro and Mopti.

Overall leadership and supervision of project implementation - Steering Committees

Since the project requires inter-ministerial coordination and inter-agency cooperation, steering committees w i l l be created at national and regional levels. At the national level, members would include all ministries involved in market-oriented agricultural promotion, as well as private sector stakeholders. The steering committee w i l l provide policy guidance, ensure consistency with national policies, monitor progress and results and resolve inter-agency or inter-ministerial problems and implementation bottlenecks. Government’s representation w i l l be balanced with a large participation of private stakeholders: commerce and agriculture chambers, professional associations f r o m different economic categories (producers, traders, exporters, processors, etc.) and inter-professional bodies as soon as they get organized.

T o enhance decentralization and ensure full responsibility o f f ield economic operators and regional and local authorities, similar steering committees w i l l be established at the regional level. These committees wil l be fu l ly responsible for approving work programs and budgets and supervising project activities in their respective regions. Their decisions w i l l not be submitted to the national committee, even though the latter w i l l have to ensure coordination and consistency o f activities. The regional steering committees w i l l work in close collaboration with regional elected councils, which are responsible for promoting and supporting regional economic development.

Project implementation Contracting out to private operators, general or specialized, w i l l be the main project implementation principle. For instance, studies w i l l be contracted out to consultancy firms or research institutes; c iv i l works to private contractors; organizational and capacity building aspects to private service providers and NGOs; credit management to banks and microfinance institutions. The project implementation w i l l rely on a small management unit at the national level (see annex 6 for further details on staffing and responsibilities).

The project w i l l put a strong emphasis on organizing the different actors al l along the supply chains to build inter-professional forums for specific JiZiBres or groups o f fiZi2res (for instance: fruits and vegetables, o i l seeds, etc). The objective i s to put in place multi-stakeholders boards where public entities and private actors w i l l maintain dialogue on a regular basis to joint ly guide the use o f public fundshnvestments for the promotion o f the different agricultural chains. In the framework o f these inter-professional entities, economic operators and public authorities w i l l have to elaborate strategies and business plans for their sub-sector, supported by detailed action plans providing details on responsibilities and financing arrangements. The proposed inter-

interventions w i l l be market oriented, demand-driven and private sector-led; they w i l l contribute to forge public-private partnership and to strengthen decentralization; they w i l l be based on a holistic approach and w i l l address cross-cutting issues.

9

professional entities w i l l then discuss priority interventions (research needs, extension programs, capacity building activities, etc.).

Based on the f i l ibre diagnosis and the multi-stakeholder proposed business plan, the project w i l l provide a range of on-demand technical tools and financial instruments: technology generation, demonstration and transfer; infrastructure construction (storage, packaging, etc.); access to credit facilitation; matching grants for research and extension; capacity building programs; support to service providers development (agricultural and management advice, market information system, compliance with intemational standards, feasibility and market studies, etc.).

As an on-demand project dealing wi th multiple stakeholders, the project w i l l establish clear eligibility criteria and fund allocation rules. Among others, the two main criteria w i l l be: (i) the existence o f a structured demand from economic operators and private entrepreneurs, interested in the project approach, especially based on the cost-sharing principle; and (ii) the viability and potential economic impact of the proposed sub-project.

From the beginning, implementation w i l l focus on the continuation o f activities after closing of the project. Even if public funds and investments may s t i l l be required for additional interventions, one o f the major objectives i s to ensure that supply chains, through inter- professional entities or commodity associations, w i l l take charge o f their internal organization and collaborate in identifying priority actions to be undertaken and securing resources to carry out these activities. The ultimate objective i s to create multi-stakeholder decision-making forums, forge public/private partnerships and establish co-financing mechanisms for the promotion of agricultural supply chains through industry-ownership models. This w i l l later facilitate the channeling o f public funds towards market-oriented and private sector-led actions both for software investments (research, extension, training, etc.), as wel l as for infrastructure investments.

3. Monitoring of implementation and evaluation of results M&E specialists w i l l be recruited for each region b y the regional operators. They w i l l be responsible for collecting and analyzing data, for updating the baseline database and for providing data analysis to the respective regional steering committee. The objective w i l l be to ensure a close monitoring o f activities but also to provide data and analysis to the regional steering committees to promote and stimulate real publidprivate partnerships to guide the use of public funding.

The M&E specialist at the national level w i l l be responsible for compiling and analyzing data f rom the regions. H e w i l l present data and analyses to the national and regional steering committees regarding project activities, results and impacts. At the national level, the objective i s also to promote and stimulate public/private partnerships for pi lot ing the promotion o f market- oriented agricultural sub-sectors, both in terms o f regional prioritization and crop selection.

The M&E system w i l l be based on activity reporting originating from contracted operators. Collaboration w i l l be developed with other information systems and statistical services, that may receive support from the project to strengthen or broaden their activities. Market information systems, such as the “Obsewatoire des marche‘s agricoles” or the “SystBme d’information sur les filiBres agricoles”, w i l l be relied upon for data collection and analysis regarding the key economic indicators o f the project. They w i l l provide useful data for measuring the project’s impact.

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In order to gather information at farm level, especially in terms o f rural household incomes, the M&E system w i l l develop a monitoring process, by using a sample o f selected farms. This w i l l be done for the different supply chains and the farm sample w i l l be representative o f the various types o f farms. This w i l l be conducted in close collaboration with the Rural Economy Institute o f Bamako, who was in charge o f carrying out the baseline study, and be based on a sound methodology for data collection and analysis.

4. Sustainability Government’s commitment. The Government confirmed his commitment to the proposed project in several occasions: (i) the CAS, agreed upon for the FY04-06 period, lays out a specific emphasis on promoting a broad-based growth for the rural sector b y enhancing agricultural productivity and competitiveness, while supporting diversification; (ii) during a Government- Bank workshop organized in November 2002 to review the rural sector portfolio, the need for a new agricultural diversification and competitiveness support project to complement the on-going agricultural services program (PASAOP), the grassroots initiatives support project (PAIB) and follow-up CBRD project (PACR), was clearly expressed; and (iii) at various stages during the preparation phase, the Malian authorities have confirmed their willingness to see this program formulated and implemented, as demonstrated by the nomination o f the UCP and organization o f meetings and workshops to discuss the project’s objectives and content wi th stakeholders and donors.

Private sector involvement. In order to ensure sustainability of actions that wi l l be undertaken, consultative entities that wi l l be created or services that w i l l be promoted, the Bank preparation team has always insisted to get a strong participation and full buy-in o f stakeholders f rom the private sector in al l the preparation activities, studies, workshops and Bank missions. The objective i s to avoid a top-down approach or Government-led implementation, and to ensure that actions w i l l be demand-driven and market-oriented. A multi-stakeholders forum w i l l promote dialogue among the different economic operators al l along the supply chains. The objective i s to make obvious and permanent the need for economic actors to consult each other in order to analyze constraints and identify altogether solutions.

Empowerment of fili&re organizations. In addition, the project w i l l promote the creation o f inter-professional entities whose leaders w i l l benefit from extensive capacity-building activities. These organizations w i l l be createdstrengthened and become responsible - as soon as possible during project implementation - for talung over project activities, such as data collecting, information sharing, consultation among members, relationship wi th service providers (research for instance). Through the progressive appropriation b y professional stakeholders and through institutional capacity building, activities should be at least partly taken over by the private sector and c iv i l society before the end o f the project. In any case, no permanent structure on the public sector side w i l l be created by the project that could generate recurrent costs once the credit closes.

5. Critical risks and possible controversial aspects

One o f the most critical r isks stems from market access issues, difficulties to comply with non- trade barriers (standards and regulations) and adjust to commodity price fluctuations on international markets. The regional market wi th in the UEMOA could offer more stable and reliable prospects and w i l l not be neglected. Even though the project w i l l test potential price risk

management tools, i t wi l l not have much control over it. However, diversification in value- adding crops, promotion o f produce quality approaches and targeting o f niche markets w i l l be key strategies for mitigating commodity price risks.

There are r isks attached to the capacity o f professional organizations and private sector operators to fully take over ownership and management responsibilities for the commercial infrastructures that the project will help develop, such as logistics export platform, cold chain, warehouses or wholesale markets. Government has a role to play in facilitating the installation of this infrastructure which often exceeds the financial capacity o f professional operators due to the initial diseconomies of scale. However, arrangements w i l l be discussed and worked out wi th stakeholders right from the conception stage to ensure the effective and rapid transfer o f ownership and management responsibilities.

The r isks wi th the technology dissemination component appear to be limited. Many suitable technologies have already been developed or identified and are well adapted to farmers’ needs. Therefore, there are no significant technical issues as far as technologies for high value agricultural crops intensification are concerned. The project w i l l promote the use o f low-cost and simple techniques and technologies that are environmentally sound and adapted to the needs o f beneficiaries. With regards to technologies requiring highly or moderately specialized sk i l l s , which are not currently used b y producers or other private operators, capacity-building programs w i l l be developed. Sound agricultural advice and f ield monitoring programs w i l l be implemented. The table below identifies the key r isks that project management may face in achieving i t s objectives and provides a basis for determining how management should address these risks.

RISK

To PROJECT DEVELOPMENT OBJECTIVE 0 Policy change toward a more state-

led agricultural export promotion Low income / value added redistribution to farmers

0

e World commodity prices s t i l l declining

To COMPONENTS’ RESULTS 0 Weak commitment from the private

sector

RISK MITIGATION MEASURES

a Maintain dialogue and experience sharing with Government and among donors Foster dialogue among economic operators all along the supply chain

a Strengthen producers’ voice to ensure their full participation in decision making

3 Monitor and assess progress accomplished at farm level

3 Promote agricultural diversification 3 Strengthen stakeholders’ capacities to

react to market signals

a Ensure strong participation of private operators in decision-making at national and regional levels

N

M

S

M

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Lack o f overall project implementation capacity

z Strict selection criteria N a Plan to strengthen project management

supply chain operators

Availability and reliability o f data 0

0 Difficulty to reach consensus among

Inefficient or inappropriate use o f funds transferred to beneficiaries

unit at the national-and regional level a Strengthen stakeholders capacities a Support dialogue through field visits and

experience sharing a Close follow-up o f the M&E system at

inception and during supervision a Support provided to other data provider,

especially market information system a Ensure transparency in fund allocation z Establish clear management procedures

I a Strengthen capacities

0 Weak performance from public and

M

M

a Organize financial audits a Strengthen service providers capacities S

M

private service providers (ensure coordination with PASAOP) I a Strict selection criteria a Contract based on performance and

Itd”-It ~ i ~ a n c i a l Management Risks: capacity assessment (ex-ante and ex-post)\

3 A team o f duly qualified and experienced 0 Funds may not be used in an

efficient and economical way and exclusively for purposes intended due to corruption and poor governance.

Financial Management Control Risks:

staff should reduce this risk

set up and enforced. Need for strengthening the process o f follow-up o f Audit Reports and regular assessment of

=S Strong internal control procedures to be

fiduciary-firms’ deliveries. * A team o f duly qualified and experienced M

M

0 The FM staff has not implemented the new FM system yet. Teething problems may jeopardize timely and accurate financial reporting and disbursement process.

staff should reduce this risk Strong internal control procedures to be set up and enforced. Need for strengthening the process of follow-up o f Audit Reports and regular assessment of

H = High S = Substantial M = Moderate N = Lowhegligible

On the financial management side, the overall conclusion o f the M a l i Country Financial Accountability Assessment (CFAA) completed in 2003 i s that significant progress has been made in this area in Mal i . The country’s own control systems are operating more efficiently despite a few weaknesses in the supervision of projects. Consequently, various measures to mitigate these risks have been agreed upon and thus the project risk f rom a financial management perspective could be moderate provided the risk mitigating measures are properly implemented. Financial management arrangements are designed to ensure that funds are used for the purpose intended, and timely information i s produced for project management and government oversight, and facilitate the compliance wi th IDA fiduciary requirements.

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6. Credit conditions and covenants The conditions for credit effectiveness are: (a) finance officer and accountant selected and appointed; (b) financial management system acceptable to the Bank installed; and (c) qualified external auditors selected and appointed. In addition to standard pre-requisites (fiduciary and procurement management set-up, project implementation manual adopted, etc.), the following conditions w i l l have to be fulfil led before credit effectiveness: (i) steering committees established, including private sector and professional organizations representatives; (ii) core project staff hired; (iii) monitoring and evaluation system established; and (iv) information on project objectives and activities disclosed, especially toward producer associations and private sector operators. The project preparation team is already worlung toward meeting the above conditions so as not to delay effectiveness and get the project ready for implementation.

D. APPRAISAL SUMMARY

1. Economic and financial analyses

The project w i l l provide many sources o f economic and social benefits, be i t at the level o f the overall project or at the level o f each o f i t s four operational components. Because the types o f benefits provided by the various components o f the project are not measurable in the same terms, there are no plans to carry out a comprehensive Cost Benefit Analysis at the level o f the whole project. Indeed while the benefits expected from the f i rs t component o f the project can be easily and objectively assessed (see table 1 below), quantification o f the benefits o f the three other components o f the project i s more difficult and can only be envisaged through a cost effectiveness analysis. The table below shows the high financial and economic returns for farmers resulting from the use o f improved technologies (irrigation, post-harvest treatment) in some selected high value agricultural products that w i l l be promoted by the project (tomatoes, onions, potatoes).

Table 1: Returns of producers’ investments

2. Technical

No major technical issue i s foreseen in this operation.

3. Fiduciary

The financial management assessments conclude that, provided the effectiveness conditions are met, the Bank’s financial management requirements w i l l be satisfied.

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The report-based disbursement method w i l l be applied only after a satisfactory assessment w i l l have been carried out by the Bank “Funds Management System” (FMS) within the first twelve months of implementation. Meanwhile, the project w i l l use the transaction-based disbursement procedures (i.e. direct payment, reimbursement, and special commitments), as described in the Wor ld Bank Disbursement Handbook.

4. Social

Social aspects have been reviewed in the framework o f the environmental and social impact assessment (ESIA), which has been commissioned as part o f project preparation. The corresponding report has been published in November 2004. Important benefits are particularly expected for a number o f target groups, such as women and young unemployed. The design of project activities - such as capacity-building or access to financing - w i l l seek at maximizing those impacts.

Negative/adverse impacts could be linked to the infrastructure component. However, the project includes rural roads rehabilitation and no creation o f new feeder roads i s planned, so that the impact on population settlements should be extremely limited. Fol lowing the ESIA, an Environmental and Social Management Framework (ESMF), which includes a Resettlement Policy Framework (RPF), was prepared and published at the Bank Infoshop and in the country in April 2005.

5. Environment

As a category B project, the project was required, under national and World Bank safeguard policies, to prepare an Environmental and Social Impact Assessment (ESIA), based on the triggering o f the Environmental Assessment Policy (OP/BP 4.01).

The project has been rated B since there are some l imited - although potentially adverse - environmental impacts f rom infrastructure construction/rehabilitation and other project-related activities, such as pesticides use for high value crops, waste watedresidues disposal and treatment for processing units, particularly slaughterhouses. Collaboration wi th the EU-funded Pesticide Initiative Program wil l be enhanced and the pol icy framework to mitigate resettlement impacts w i l l be applied. All these impacts have been thoroughly analyzed in the ESIA.

Institutional arrangements for putting in place social and environmental mitigation measures have been clearly discussed. They are designed to ensure that environmental considerations are taken into account throughout screening, selection, planning, construction and operation processes o f the various project components and that social and environmental benefits are ensured and sustained through adequate impacts and mitigation monitoring, as they relate to identified project beneficiaries and affected people. Environmental and social considerations and impact mitigation planning w i l l be an integral part o f the implementation of the project activities.

The main part o f the ESIA was carried out in September 2004 by a consulting firm, fol lowing broad consultation framework involving al l relevant stakeholder groups and other interested parties. The main objectives o f the ESIA were to: (i) identify the main environmental and social

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impacts o f the project and (ii) prepare an Environmental and Social Management Plan designed to help avoid, mitigate and compensate for the negative impacts and strengthen the positive ones. The ESIA i s considered both as a planning tool and a means for a harmonious integration o f the project in i t s bio-physical and social environment and as way to maximize positive effects on the same environment.

The ESIA, which was carried out in full compliance with the national and Bank environmental and social safeguard policies and guidelines has been reviewed and approved by both Direction Nationale pour le Contrdle des Pollutions et Nuisances (DNACPN), the national agency in charge o f environmental impact assessments and pollution and nuisance control, and ASPEN. The ESIA was disclosed in-country and at the Bank Infoshop on November 30,2004, prior to the project' s appraisal.

Prior to disclosure in-country and at the Bank Infoshop, a workshop was organized, involving al l relevant project stakeholder groups in public agencies, such as DNACPN, the communities, c iv i l society and the private sector, with the intention of presenting the results o f the ESIA, fostering ownership and seeking inputs from these stakeholders in order to improve the quality and soundness of the ESIA. Recommendations from both ASPEN and the stakeholders'workshop, and DNACPN, in particular, have been reflected in the final version o f the ESIA.

Fol lowing the ESIA, an Environmental and Social Management Framework (ESMF), including a RPF, was prepared and published at the Bank Infoshop and in the country in April 2005.

6. Safeguard policies

Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OP/BP/GP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [XI Pest Management (OP 4.09) [XI Cultural Property (OPN 11.03, being revised as OP 4.11) [ I Involuntary Resettlement (OP/BP 4.12) [XI Indigenous Peoples (OD 4.20, being revised as OP 4.10) [ I Forests (OP/BP 4.36) [ I Safety o f Dams (OP/BP 4.37) [ I Projects in Disputed Areas (OP/BP/GP 7.60)* [ I Projects on International Waterways (OP/BP/GP 7.50) [ I

7. Policy Exceptions and Readiness

N o policy exceptions are foreseen.

* By supporting the proposed project, the Bank does not intend to prejudice thefinal determination of the parties' claims on the disputed areas

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Annex 1: Country and Sector or Program Background

MALI: Agricultural Competitiveness and Diversification Project

Country Overview

With a per capita income o f US$300 (2004), M a l i i s one o f the world’s poorest countries according to UNDP social indicators. Poverty rate i s estimated to be 64 percent (2002). The country - which i s landlocked - i s one of the largest in Afr ica with a surface o f 1,204,000 square kilometers and a population o f 11.6 mil l ion (2004) wi th an annual population growth rate o f 2.4 percent. Agro-climatic zones range from Saharan (less than 150 mm o f rainfall) in the north to Guinean or sub-tropical (1,200 mm o f rainfall) in the south. Growth in the agricultural sector i s constrained by l o w and irregular rainfall, poor and fragile soils, as well as generally l o w productivity because o f the widespread use o f traditional technologies. Economic infrastructure, particularly transport and communications, i s weak and human capital i s underdeveloped as shown by indicators on health and education levels. Poverty in Ma l i i s essentially a rural phenomenon w i th the rural poverty incidence three times higher in rural areas than in urban centers. The poorest o f the population are rural households engaged in subsistence agriculture. The most vulnerable parts o f the population are women, children suffering from malnutrition, young people with no access to employment and the elderly.

In spite o f the above constraints, Mali’s economic performance over the past decade has been commendable. Fol lowing the establishment o f political and social stability in early 1990s, further macroeconomic and structural reforms, and the devaluation o f the CFA franc in 1994, Mali ’s annual real GDP growth rate accelerated to an average of f ive percent over the period 1994- 2002, in good part driven b y the private sector, which responded to a more liberalized regulatory environment. Poverty rate declined from 72 percent in 1994 to 64 percent in 200 1.

In the agricultural sector, rain-fed cotton cultivation and rice cultivation on the irrigated perimeters o f the Office du Niger have expanded considerably during the last two decades. With over 600,000 tons of seed cotton produced in 2003/04, M a l i has become the f i rst cotton producer and exporter o f Sub-Saharan Africa. Rain-fed cotton cultivation has been expanding steadily during the last 40 years in the Southern part o f Mal i , particularly after the devaluation o f the CFA Franc in 1994. Since then, production o f seed cotton has practically doubled. However, in addition to the specific structural and institutional problems that the cotton sector has been facing during the last four or five years, the rural economy remains heavily dependent on cotton cultivation and critically lacks diversification.

Agricultural production i s concentrated mainly in the South, where rainfall is higher. Globally, the rural economy i s highly sensitive to external shocks, both from climatic variability and price fluctuations on the world market prices for the main commodities. Vulnerability o f incomes and livelihoods is a critical factor contributing to poverty in rural areas. Cotton production has been steadily expanding since the 1960s to over 500,000 tons of seed cotton per year and represents 45 percent o f foreign exchange earnings. Cotton revenues are, however, vulnerable to fluctuations o f the world price for cotton lint. The cotton sector has also been subject to periodic financial crisis due to institutional and managerial weaknesses. Government i s expected to engage more actively in reforming the cotton sector in order to put the sector on a stronger and

17

more sustainable footing for the future, while as the same time reducing the financial liabilities that are until now transferred to the public budget.

Yet, despite good policy performance, much remains to be done to sustain broad-based growth, strengthen the financial sector and public expenditure management, and improve service delivery to the poor. Prudent fiscal policy management, especially expenditure management are key to macroeconomic stability, efficient mobilization and allocation o f public resources, and effective service delivery. I t w i l l also provide underpinnings to favorable investment climate for private sector growth.

Government’s Poverty Reduction Strategy and the Bank’s CAS

Mali ’s Poverty Reduction Strategy Paper (PRSP), completed in M a y 2002, was endorsed by the Wor ld Bank and IMF Boards in March 2003 and i s supported by the donor community, The policy direction and quantitative objectives o f the PRSP are based on a vision o f sustained and poverty-reducing growth. The strategy comprises four pillars: (i) creating a macroeconomic environment for accelerated and re-distributive growth in a context o f macroeconomic stability and openness, driven by the private sector; (ii) promoting institutional development, governance and participation; (iii) developing human resources and access to quality basic services; and (iv) building basic infrastructure and developing productive economic activities.

In 2002-03, M a l i made satisfactory progress towards these PRSP objectives. Mali ’s economic situation improved significantly in 2003 in spite o f the crisis in Cbte d’Ivoire: real GDP growth was 6.0 percent in 2003 compared with 4.3 percent in 2002. Preliminary evaluation indicates that the sustained level of economic growth recorded and projected, and given the country’s great potentials (particularly in agriculture), M a l i has real assets to achieve the overall objective o f bringing down poverty and hunger provided that growth i s more redistributive than previously.

The Bank’s Country Assistance Strategy (CAS) in M a l i for FY 04-06, discussed by the Board in July 2003, focuses on three main themes which directly support the PRSP pillars: (i) promoting growth b y increasing agricultural productivity and diversification o f rural incomes through promoting rural sector operations and non-rural sources o f growth driven by the private sector; (ii) developing human resources; and (iii) improving public finance management and governance.

M a l i i s currently in the CAS base-case scenario and the key instruments o f the CAS in support o f these themes are the following: (i) support via Structural Adjustment Credits (SAC) towards eventual, broader Poverty Reduction Support Credits (PRSCs); (ii) community driven development operations supporting productive sectors and fight against HIV/AIDS; and (iii) traditional investment operations targeting specific needs in transport and private sector development to enhance competitiveness o f Mali ’s economy.

Particular emphasis i s placed on developing the rural sector since about 80 percent of Mali ’s population o f over 11 mi l l ion lives in rural areas. According to a 1998 survey, an estimated 72 percent of Mali ’s population lives below the poverty line. Poverty in M a l i i s therefore essentially a rural phenomenon with the rural poverty incidence three times higher in rural areas than in

18

urban centers. The CAS puts emphasis on supporting competitive, broad-based growth in the rural sector by helping to increase agricultural productivity and production in a sustainable manner, by exploiting further the potential for irrigated agriculture, by diversifying agricultural and livestock production, and by implementing natural resource management programs. The proposed project f i t s wel l within these objectives and strategy.

Policy and institutional issues

In spite o f the clear orientation o f the Malian Government towards a market economy and private sector development, government remains involved in a number o f economic activities through price setting, subsidies, directed credits, and there i s slack inter-enterprise competition. Weak market institutions, including the lack o f a business-friendly regulatory/competition pol icy framework, the absence o f an effective bankruptcy law, weak checks and balances on corruption are barriers to the development o f an enabling business environment to attract domestic and foreign investment. Also, the existence o f artificial barriers, complex, and vague customs regulations, border harassment, etc. inhibit free trade within the country and end up slowing down trade and export development. In the rural sector, key policy and institutional reforms relate to the diversification o f production systems beyond cotton and cereals, and the support to the creation o f a liberalized environment for the agricultural sector, including the cotton sector.

In the cotton sector, progress with structural reforms, however, has been slow and the government changed the timeline for the privatization o f the state cotton company, the Compagnie Malienne pour le Dkveloppement des Textiles (CMDT) to beyond the election scheduled for 2007. The IMF’s Poverty Reduction and Growth Facility (PRGF) performance criterion for end-June 2004 on the strategy to privatize the state telecommunications company SOTELMA has been missed, although the issue i s s t i l l under discussion.

Constraints and Issues for Rural Development

As highlighted above, rural development i s severely constrained b y a number o f factors, geographic, climatic, humans and basic infrastructure. More specifically, the fol lowing factors need to be stressed.

Declining and erratic rainfall. Over the past 30 years, the country has faced declining and erratic rainfall and a southward movement of desertification. Severe droughts in the 1980s (particularly 1983-84 and 1987-88) have le f t an estimated 4 mi l l ion rural residents highly vulnerable to food shortages. The climatic r isk i s a critical factor in sustained production and productivity increase. Recent droughts had negative impact on productive assets and on the behavior o f producers who select low risk/low productivity production systems.

Low productivity of agriculture. With some noticeable exceptions l ike rice production on the irrigated perimeters o f the Office du Niger, productivity o f Malian agriculture and agro food system has been generally very low and stagnant, even compared to that o f other developing countries. This i s due to a number o f factors, among which the widespread use o f traditional low- input/low-output cultivation techniques, insufficient access to water resources for irrigation, as well as losses and inefficiencies in the downstream stages o f the supply chain due to high

19

transportation costs, lack o f storage infrastructure, limited development o f post-harvest processing, and weak connection to markets.

Limited access to markets because of poor basic rural infrastructure. Rural infrastructure i s poor and unevenly distributed, contributing to slow growth in many regions. Due to the poor network of rural/feeder roads, large parts o f rural areas are not adequately linked to markets, which hinders producers from ful ly exploiting the new opportunities offered b y increased urban demand and export possibilities. In addition, l imited access to input distribution and credit, as well as other agricultural services (extension, technical advice), has resulted in low yields and poor revenues. Rural water supply also raises a serious challenge to both people and livestock.

InsufJiciently diversified rural economy and weak private initiative and investment in rural areas. Mali 's predominantly rural economy i s heavily concentrated on a l imited number o f traditional products and exports (cotton, rice and livestock). This imposes limits to the revenues and economic opportunities in rural areas and creates a high level o f vulnerability to shocks, both at macro and micro (farm) level. Private sector activities in rural areas are essentially l imited to trading and predominantly in the informal sector. As a result, private sector activities are extremely weak in terms o f creating new opportunities, fostering investment and generating income and employment.

Rural Development Strategy

The Ministry of Rural Development and Environment (MinistBre du De'veloppement Rural et de 1 'Environnement - MDRE) prepared a long-term master plan for rural development (Sche'ma Directeur du De'veloppement Rural) in 1992 and an update in 2000 (Actualisation 2000). I t includes nine priori ty action programs that have been integrated into the Poverty Reduction Strategy (Cadre Stratkgique de Lutte contre la Pauvrete' - CSLP): (1) support to agricultural services and producer organizations; (2) development of rural infrastructure and farming equipment; (3) promotion and improvement o f the competitiveness o f agricultural supply chains; (4) stimulation of exports o f agricultural, forestry, livestock and fishery products; (5) intensification and diversification o f agricultural production; (6) reinforcement o f food security; (7) promotion o f financing o f the rural sector and rural credit; (8) management of natural resources to sustain rural development; and (9) contribution to finalizing and executing local development plans. The Bank has been supporting the implementation o f the sector strategy through its portfolio o f investment operations, ongoing (PNIR, PASAOP, Cotton Sector Restructuring Program) or in preparation (PCDA, PACR).

Diversification i s therefore a major challenge for Mal i 's agriculture. Through the reduction o f the Malian rural economy's dependence from cotton cultivation, improvement o f productivity in high value crops, reduction o f r isks for small farmers wi th adapted irrigation technology, and diversification o f rural incomes through the improvement of marketing channels for high value agricultural and livestock products, the project w i l l contribute to the achievement o f at least two of the MDGs: (i) eradicating extreme poverty and hunger; and (ii) ensuring environmental sustainability in rural areas.

20

M a l i has a strong comparative advantage not only for cotton and rice, but for a range o f other value-adding crops, particularly vegetable and fruits. The country has an important untapped potential to develop and market value-adding agricultural products for sub-regional and international markets such as sesame, Tiger nuts, onions/shallots, mangoes, arabic gum, shea nuts, etc. A number of ongoing and completed pilot projects have helped the country promote processing and marketing o f a number o f value-adding agricultural products through small and medium enterprises development, such as the “Agricultural trading and processing promotion pilot project” (PAVCOPA), an IDA-funded project and the agri-business center supported by the U S A I D (Centre Agro-entreprise). However, many constraints continue to impede the development of non-traditional agricultural exports. In this area, the project w i l l build on the recommendations of the recently completed Diagnostic Trade Integration Study (DTIS) o f the Integrated Framework (IF).

T o achieve the above objective, the project aims at promoting and supporting private sector initiatives in rural areas. There i s a dire need to build capacities on both the private and public sector sides to reach out to the rural population and unleash the growth potential o f the rural economy. The project w i l l help the private sector acquire the necessary capacity to implement these activities and create an environment o f services for rural entrepreneurs and operators.

Program Objectives and Rationale for Bank involvement

The project aims at fostering improvements in the performances o f supply chains for a range o f agricultural and livestock products, for which M a l i has a strong comparative advantage. The proposed investment i s expected to reinforce the competitiveness o f both traditional (cotton, rice) and non-traditional (fruit, horticulture products, o i l seeds, arabic gum, cashews, etc.) agricultural crops through targeted investment to remove critical constraints, improve productivity and efficiency and build organizational and institutional capacities, both private and public, along the supply chains.

Therefore the proposed project has a clear private sector focus and market orientation, that the other rural development operations do not have, as well as a strong emphasis on communication and marketing infrastructure for commercial agro-supply chains. I t therefore complements the other national programs.

There are some other strong reasons justifying the Bank’s involvement. The Bank has been actively involved through pilot projects implemented in the late 1990s in the promotion o f small- scale irrigation (PPIP) and trading and processing o f agricultural products (PAVCOPA). I t has assisted Government and stakeholders, together wi th other development partners in building upon these pilot projects and up-scaling the development o f a more diversified and commercially oriented agriculture. Given i t s global sector approach, the Bank has a clear comparative advantage in helping in the up-scaling o f the pi lot projects and the promotion o f private investment and initiatives in irrigation, agro-processing and marketing o f value-adding agricultural and horticultural products.

Through the proposed project, the Bank w i l l bring best practices and lessons o f successful experiences, especially in the development high value products and the intensification of

21

agriculture. In this respect, the Bank w i l l help the Government bring a combination of experiences and know-how in this investment program, aimed at reinforcing capacities and performances o f commercial supply chains.

In addition, the Bank has the ability to mobilize other donors support and coordinate interventions through a government-led program and supported by private sector stakeholders and geared towards the improvement o f competitiveness and .diversification o f agricultural supply chains in Mal i . So far, USAID, AFD, C I D A have committed resources - or planning to do so - for projects that w i l l complement the IDA-funded proposed operation.

22

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

MALI: Agricultural Competitiveness and Diversification Project

The Bank has been supporting agricultural and rural development in general in M a l i for many years. The broad objective was to increase agricultural productivity and create the enabling environment for the development o f a competitive and sustained agricultural production. The Bank has funded the following projects, which are, to various extents, related to the PCDA.

I. Bank-funded Projects

1. Closed projects e

e

e

2. e

e

e

e

The Pilot Private Irrigation Promotion - PPIP (1998-2003) provided technical and managerial support services to private irrigation producers in order to improve and expand investments in small-scale irrigation.

The Agricultural Trading and Processing Project - PAVCOPA (1997-2002) addressed key constraints to private investment in agricultural processing and marketing, focused primarily on capacity-building and transfer o f the know-how to the private sector through information networks, training, specialized technical assistance, study tours.

The Structural Adjustment Credit Project I11 (200 1-2003) addressed the recovery and restructuring o f the cotton sector to restore positive economic growth and public expenditure reforms aimed specifically at advancing the government's poverty reduction objectives.

Ongoing projects

The Agricultural Services and Producer Organizations Project - PASAOP, in i t s first phase (2001-2005) o f a 3-phase APL, addresses the establishment of an institutional framework conducive to the efficient delivery o f agricultural services to the producers, through a demand-driven approach and decentralization o f core functions o f the Ministry of Agriculture. I t provides funding and technical assistance for capacity building and institutional strengthening o f producers' organizations.

The National Rural Infrastructure Project - PNIR, in i t s f i rs t phase (2001-2005) of a 2- phase APL, finances large scale infrastructure related to irrigation and feeder roads while supporting policy and institutional strengthening, and capacity building. One key area of intervention i s the Office du Niger zone.

The Gourma Biodiversity Conservation (2005-20 10) provides help to communes and communities in better managing biodiversity. Out o f this process, communes w i l l produce and adopt a scheme o f territorial coherence.

The Sources of Growth project (approved in February 2005) w i l l support the private sector in playing an increasing role to foster economic growth. A component o f this project intends to increase S M E s access to bank finance through three instruments: liquidity facility, trade finance facility and partial guarantee funds. However, this operation i s not designed to reach out to farmers and rural entrepreneurs.

23

In addition, it i s worth mentioning the Financial Sector Development Project - FSDP (2001 - 2006) - which aims at improving the soundness, performance and competitiveness o f the financial sector in Mali . FSDP includes a component on microfinance that aims at strengthening the microfinance sector. However, this project does not have a focus on agricultural finance.

Project

PASAOP (Cr. 3583-MLI)

3. Projects under preparation

Latest Supervision (PSR) Ratings

(Bank-financed projects only) Implementation Development

Progress (IP) Objective (DO)

S S

As far as rural development is concerned, the Bank i s preparing the Community Based Rural Development Project - CBRD (2005-201 l), planned to be presented to the Board in FY06. This CDD project w i l l aim at reducing rural poverty and improving the l iv ing conditions o f people in

FSDP (Cr. 3394-MLI)

rural areas through community investments.

S

empowerment and social, economic and environmental

Sector Issue

Bank-financed Support to agricultural services delivery and professional organizations

Rural Infrastructure

Structural Adjustment I V

Gourma Biodiversity Conservation

Financial Sector Development Project

Growth Support Project

:::393-MLI) ~ 1 ~ 1 SAC I V (Cr. 4044-MLI)

Gourma I S I S

(TF 054 199-MLI) I I

PASC (Cr. 4033-MLI, H1450-MLI)

S S

24

11. Main orientations: The coordination and complementarities between the proposed project and other Bank-funded operations are envisaged as follows:

Synergies and complementarities among Bank-funded rural development projects:

Infrastructure envisaged in the project w i l l target large and medium scale needs at the national and regional levels. As a complement, the CBRD-project, under preparation, aims at providing funds to socio-economic organizations at the grassroots level for productive small-scale projects. I t w i l l therefore be able to finance small scale investments or equipments, required by supply chains at the local level. I t may concern small-scale irrigation perimeters, storage building or post-harvest processing units ;

The PASAOP w i l l provide funding for producer organizations (POs) to buy services f rom public or private providers for capacity building, research and extension activities. A financing request to PASAOP from producer organizations, i f included in a broader economic and supply chain project, w i l l be given higher priority for funding ;

Concerning feeder roads, close collaboration w i l l be developed with the PNIR for assessing needs and joint ly complement the existing network. In addition, harmonization and consistency w i l l be closely monitored in terms o f approach for financing and maintenance.

The projects wi th a financial component wi l l coordinate their activities to avoid duplication and to ensure that the Bank sends a common message when i t comes to facilitating access to finance (including microfinance). The different projects w i l l focus on their comparative advantage with regards to finance.

Detailed arrangements based on project specificities:

The Agricultural Competitiveness and Diversification Project displays four major characteristics that distinguish i t f rom other Bank financed projects:

1. Scope of intervention and targeted stakeholders: the project w i l l primarily target the agricultural private sector, which covers al l the economic operators involved in the f i l izres, f rom producers to exporters. This project thus complements PASAOP, which supports public agricultural services and POs. The new CBRD project (PACR - “Projet d’appui aux communautks rurales”) focuses on decentralization by supporting local govemments and community-based organizations (CBOs). The PNIR targets primarily the “Office du Niger” zone and supports large scale irrigation, differing in that from PCDA, which aims at supporting the development o f small-scale private irrigation (based on water pumping and storing).

2. Producers: the project w i l l mainly focus on producers already involved in commercial agriculture and marketed production. Supports and services provided w i l l allow them to improve their professionalism, productivity and competitiveness. They w i l l constitute

25

advanced producers, which could hence be used as pioneers and encourage other operators to get involved in other economic projects offered in the agricultural f i l ibres supported b y the project. They could also be pioneers for the promotion o f agricultural diversification in a given region.

3. Economic focus: as a market-driven operation, the project w i l l emphasize the economic and commercial objectives o f agricultural f i l ibres development and w i l l pay attention to the elaboration o f supply chain development strategies. Thus, the project could serve as an economic tool for rural development and a possible axis to strengthen the coherence of PASAOP and PACR toward economic objectives and inter-professional organizations. This means that funds allocation by PASAOP and the PACR w i l l need to be prioritized: (i) along with the ongoingfilibre construction undertaken by ACDP; (ii) in light of regional economic development strategies (as one finds in the cotton sector but that most o f other national programs currently lack). Financing requests from POs to the PASAOP or from CBOs to PACR w i l l be given priority if validated by the PCDA.

4. Scaling-up: as mentioned earlier, the project interventions w i l l not benefit to al l producers. Funds requested by PASAOP and PACR could therefore scale up pi lot programs developed b y this project for less advanced producers (for training and advisory service for PASAOP, for productive investments concerning PACR). Obviously, this w i l l only work if eligibility criteria for accessing these funds give priority to financing requests linked to PCDA interventions.

Links and complementarities between the PCDA and the PACR :

1. Decentralization: Support projects to decentralization (like the PACR) provide support (such as training for example) to elected members o f local governments to help them increase their responsibility in the definition and monitoring o f the economic and social regional development. B y participating in the PCDA’s regional steering committees, elected members o f local governments w i l l be given practical opportunities to contribute to a decision making process for the economic development of agricultural supply chains.

2. Marketing infrastructure: PCDA w i l l finance infrastructures that respond to the needs o f specific production areas. The scale o f i t s action w i l l therefore be at the regional level. Based on professional requests, PACR w i l l be able to complement P C D A investments b y financing small scale infrastructures, at the local or village levels (small processing or storage units).

3. Rural private entrepreneurskommunity-based organizations (CBOs): PCDA w i l l support investments o f rural private entrepreneurs for the acquisition o f equipment (small irrigation, storage, processing, etc). For innovations, PCDA intends to put in place a matching grant mechanism. However, in general, the acquisition of equipments developed by the project w i l l be done through credit (via facilitation offered in component three). With i t s private investment fund, PACR w i l l be able to complement these supports to the acquisition o f equipments to the benefit o f CBOs. However, financing rules and eligibility criteria w i l l be perfectly harmonized in order to avoid implementation contradictions and distortions (risk o f subsidizing for PACR, risk o f

26

selling at a no gain price to individuals for PCDA), and also to avoid destabilizing local financial institutions.

Links and complementarities between PCDA and PASAOP:

Demand-driven matching grants proposed by the PASAOP extension and POs components w i l l be used by PCDA for scaling up training and advisory service activities to professional organizations. Currently, these funds operate on the basis o f scattered and small scale requests made by individual POs. Moreover, POs requests remain mainly focused on alphabetization and on training on the new regulatory framework for cooperatives. Producers have difficulties to formulate requests in light o f their actual technical needs, and also because they are unaware o f the entire advisory services that could be offered to them.

In order to launch the process, PCDA w i l l experiment new training modules and w i l l pilot new mechanisms for delivering agricultural advisory services by private providers. These training and advisory services w i l l then be promoted to professional organizations, who thus w i l l be able to “buy” them b y submitting requests to PASAOP funds.

In that sense, PCDA may contribute to strengthen the coherence and impact o f PASAOP interventions, by directing financing to precise economic objectives. T o ensure strong coordination in that sense, PASAOP w i l l give priority to requests that are included in the supply chains construction approach supported b y PCDA. Prioritizing criteria w i l l be introduced to the project selection process of PASAOP matching grant for POs.

Agricultural research needs, which w i l l be identified by supply chain operators, w i l l be directed to the PASAOP matching grant o f the research component. Criteria w i l l be adjusted to give priority to requests that are within the strategies o f supply chain development. Research needs from already organized inter-professions w i l l be treated in priori ty because they are the expression o f a group of economic operators gathered around common economic objectives and driven by market signals.

Finally, the PASAOP institutional component w i l l allow public agricultural services to provide better services for the development o f agricultural f i f idres, mainly in terms o f regulations and control. The interventions o f PCDA in the area o f agricultural statistics for production volume and quality monitoring w i l l help identify needs for strengthening public services’ capacities.

Links and complementarities between PCDA and PNIR :

The ACDP w i l l complement PNIR in supporting the development o f the Office du Niger (ON) zone, b y providing supports in the fol lowing areas:

The introduction o f private investors in the ON zone, requires to reach out entrepreneurs with a recognized experience in the areas o f production, trade and export o f agricultural produce in Africa or elsewhere (Israel, Asia, etc.). These operators are expected to invest in irrigation scheme or equipment in the ON zone and to bring experience and know-how to Malian private investors who are wi l l ing to get involved into those activities. This program requires promotion and communication efforts towards economic operators, f rom M a l i and abroad. This w i l l be accomplished through PCDA supports to private investors within supply chains.

27

In addition, the project interventions w i l l help ON producers diversify in new crops since only shallots and potatoes are being cultivated beside rice.

Complementarities between the two projects w i l l also concern soft investment in quality improvement and marketing promotion. This may concern access to credit for input supply and equipment acquisitions as well.

111. As part o f a broader national program, pillar o f the Master Plan for Rural Development, the proposed project i s currently prepared and w i l l be implemented in close collaboration with other donors’ programs. Bilateral donors are committed to provide assistance to targeted f i l idres, intervening al l along the supply chain, while the IDA funds w i l l complement these interventions by providing resources to intervene on cross-cutting issues and other selectedfilidres.

Operations financed b y other development partners provided guidance to the PCDA design and complement i t as follows:

Coordination with other donors’ programs

U S AID has launched a three-folded program entitled “Accelerated Economic Growth and Trade Development” (2003-2012), which includes the fol lowing sub-projects currently being implemented by different operators:

a. Mali Production: this project seeks ways to improve outputs o f agricultural producers with increased revenues for POs and an environmentally sustainable economic growth.

M a l i Finance: this project provides business development services (FM training, business plan elaboration, company studies, access to financing, investment M&E, legal and financial advisory services) through financial institutions and other partners to SMEs, M F I s and POs, especially in northern Mal i .

Trade Mali: this project i s a marketing support program and targets specificfilidres, namely six o f them: mango, potato, red meat, rice, sheanut and sesame. I t s objective is to improve Mali ’s competitiveness in these f i l iZres, support exporters’ efforts in responding to global markets’ demands, identify new export opportunities for the j i l idres and organize operators in the sector.

C I D A has been supporting cereal/wheat production and marketing through the Programme d’Appui B l a Commercialisation des CCrCales au M a l i - PACCEM - (launched in 1999), which targeted financing in rice production in Office du Niger zone - and i s now preparing a 7-year7 CN$20 mi l l ion program to enhance targeted agricultural supply chains, which would also complement PCDA. This program w i l l specifically target production and marketing o f onion, garlic, green beans and sheanuts.

AFD’s PASE supports improvement o f farming systems in cotton-growing areas, through the provision of funding and technical assistance to research and producer organizations’ capacity-building. Specific attention w i l l be paid to coordination between this AFD project and PCDA in the cotton area.

The Dutch cooperation has a one mi l l ion Euros project to support horticulture exports and commercial agriculture, including some investment in commercial infrastructure and trade facilitation.

b.

c.

28

All these interventions are or w i l l be funded through parallel financing procedures. Donors’ representatives and project coordination units have been regularly consulted al l along the project preparation process. In order to ensure adequate coordination, a matrix has been developed to map al l interventions on supply chains either targeting (i) a specificfifilidre or part o f it; or, (ii) a specific cross-cutting issue (such as support to POs, extension, infrastructures, etc.). The collaboration that has been developed w i l l be maintained during the implementation of the project, through the establishment o f the national and regional steering committees

Specific links and complementarities between P C D A and the AFD-funded P A S E (Programme d’amklioration des systimes d’exploitation - Farming systems improvement program) in the cotton area:

The PASE specifically targets the cotton fifilidve by supporting: the sector reforms; the strategic thinking o f cotton producers on a) the sector reform and i t s institutional, financial and economic consequences, and b) the sector inter-professional organizations; IEWCIRAD research program on space delineation and POs strategies; the economic organization o f cotton producers f rom local to national level (transformation o f former village associations into cooperatives); the development o f the cotton inter-profession; and the development o f advisory services to cotton POs and producers.

P C D A w i l l complement, as far as infrastructures are concerned, the contributions o f the AFD program b y financing rehabilitation o f rural roads in cotton growing areas. The project wi l l also take advantage o f training modules, which w i l l be developed b y PASE in the area o f strategic thinlung o f producers by adapting them to other f i l i kes (intemational and local market knowledge, economic analysis o f filikres, roles and strategies o f stakeholders in the supply chains, etc.).

A strong coordination w i l l be ensured between PCDA and PASE in the area of agricultural advisory services in order to develop joint innovative initiatives for the promotion o f comprehensive advisory services to producers. The advisory services offered by PASE w i l l mainly focus on cotton production. However, i f the ACDP intervenes on the potato f i l idre, services w i l l certainly be provided to the same producers in most cases. Implementation arrangements set up b y one project w i l l thus need to be complemented b y the other. Regional agricultural chambers, supported b y APCAM, must play a key role in the coordination and capitalization o f the numerous interventions, including a sound analysis o f sustainable financing mechanisms for agricultural advisory services.

29

Annex 3: Results Framework and Monitoring

MALI: Agricultural Competitiveness and Diversification Project

performances o f agricultural supply chains have increased

Project Development Objective

by project interventions

Number o f inter-professional entities for multi-stakeholders consultations Number o f private investment operations generated in selected supply chains

Increase rural incomes and diversify economic opportunities in rural areas

Outcome Indicators Use of Outcome Monitoring

Broader range and increased volume o f agricultural products marketed in Mal i

s Assess project impact on agricultural diversification

Increased market shares for Malian products on regional and international markets

s Monitor project impact on macro- economic indicators

Intermediate Results Results Indicators Use of Outcome Monitoring One per component

Component 1: Demonstration and dissemination of irrigation, post-harvest and value-adding technologies Technico-economic performance o f farming systems and of post-harvest operations have improved

Implementation o f demonstration centers & pilot plots in the 4 regions Availability o f technico-economic references for producers and transformers

Number o f producers/operators who have adopted technologies for irrigation and post-harvest operations Number o f artisans and private service providers for technologies manufacturing, dissemination and maintenance.

s Monitor project activities and results

a Ensure project communication toward producers and transformers

a Confirm relevance o f technologies developed by project

=j Ensure sustainability o f project interventions

s Assess relevance o f project strategy in selecting supply chains / products

s Assess project impact on supply chain organization

strategy to promote private

30

Number o f supply chains that have developed product quality control processes and produce characterization

data for the private sector Availability of market information

3 Check project strategy for quality enhancement o f agricultural produce

3 Evaluate project support to promote market knowledge management

Component 3: Access 1 Financing instruments and mechanisms are available for private economic operators and farmers in the selected supply chains

Intermediate Results Results Indicators One per component

Use of Outcome Monitoring

Number and amount o f credits guaranteed by guarantee facility

Component 4: Market-oriented infrastructure Trade facilitation I Number o f commercialization

3 Assess relevance o f guarantee facility

infrastructure are available and functional

Recovery rate o f guaranteed credits

Number o f new financing instruments developed and amounts o f financing mobilized

I infrastructure implemented

3 Assess follow-up o f financing activities by project and financing institutions

Assess project answer to needs to financing instruments within supply chains

Number o f contracts to delegate infrastructure management to private operators

rehabilitated Kilometers o f feeder roads

Intermediate Results One per component

Assess project’s achievements

Results Indicators Use o f Outcome Monitoring

a Ensure proper management o f infrastructures by professional private operators

3 Verify achievement o f project’s targets

implemented/managed, and closely monitored

functional at the national level public/private partnership for project implementation

orientation and implementation Steering committees established and 3 Verify decentralization o f project functional in each region o f project intervention

~

Component 5: Project management and M& E The project i s properly 1 Steering committee established and I a Promote multi-stakeholders and

31

KEY PERFORMANCE INDICATORS

The fol lowing table gives the key performance indicators on which the success o f the project w i l l be evaluated, including the target values at project completion.

Objectives of Components

Improvement in the technical and economic performances o f irrigated farming systems and value-adding equipment and facilities

Improvement o f economic performances of agricultural supply chains

Availability o f financial instruments and mechanisms for private economic operators in the selected supply chains

Availability and functionality o f commercial infrastructure

Functionality o f project steering committees

Kev Performance Indicator (at Proiect Comdetion)

At least 900 sub-projects implemented and financed under the Investment and Innovation Fund (of which 800 in irrigation and 100 in agro-processing)

At least 1,800 producers and processors have adopted the new technologies 200 artisans and private service providers trained and 40 artisans newly installed for the dissemination of

equipment and technologies

4 sizeable private investment projects (foreign, joint- ventures, etc.) generated and/or supported in the selected supply chains

0

0 8 interprofessionnal organizations created and operational in the selected supply chains

4 sets o f technical specifications prepared and adopted b y private economic operators in the selected supply chains

0

0 At least 40 loans granted to private economic operators

in the selected supply chains for an amount o f CFAF 880 millions

0 At least 8 facilities builthehabilitated

100% o f the facilities are managed under management agreements signed between the state and private economic operators

At least 1,000 km of rural roads rehabilitated

Regular meetings o f the Comite‘ National de Pilotage et

d’orientation (CNPO) and of the Comite‘s Re‘gionaux de Pilotage et d’orientation (CRPO) in accordance with the Drovisions o f the Proiect Imdementation Manual

32

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Annex 4: Detailed Project Description

MALI: Agricultural Competitiveness and Diversification Project

Project components:

The project includes the following five components:

Component 1: Demonstration and dissemination of irrigation, post-harvest and value-adding technologies (US$10.35 million, including contingencies)

The project will support the demonstration and dissemination of low-cost, simple and adapted techniques and technologies to improve the production, productivity, processing and marketing of selected value-adding agricultural products. Existing techniques for different crops wi l l be tested, modified and adapted to better respond to the needs of international markets.

The project wil l help producers acquire and make profitable use of technologies and equipment for irrigation, crop intensification and post-harvest treatment (storage, drying, processing). The project wi l l particularly aim at developing capacities and an environment for the private sector to supply the inputs, equipment and services necessary for a sustainable development of these technologies at farm, farmer-groups, traders and processors level. For simple technologies, local craftsmen wi l l be trained, who wi l l sell the equipments to farmers and processors. For more complex equipment and technology, i t w i l l be necessary to work through larger enterprises or groups o f producers, processors or traders. Training and information activities wi l l promote the dissemination o f adapted technology.

I t includes three sub-components: (a) demonstration and promotion o f technological innovations, particularly through implementation of pilot plots at farm level and the creation o f demonstration centers (CDDP) at regional level; (b) training and development o f private sector capacities to provide equipment, inputs and advisory services, and (c) dissemination of techniques and technologies and support to investment sub-projects, particularly through a matching grant mechanism.

Innovative technologies wi l l be promoted in the following areas:

(i) Small-scale irrigation equipment, techniques and methods. The project w i l l support the demonstration and dissemination of low-cost adapted irrigation equipment in the areas of : groundwater utilization (manual and motorized drilling, improved traditional wells, filters); groundwater recharging (submersible weirs, “seuils”, in streams); water extraction (manual-, wind-, solar-, animal-, biogas-, diesel-, petrol-powered and other pumps); water transport (channels, pipes, hoses, etc.); distribution (surface, drip, sprinkler irrigation). I t would support the establishment and development o f private supply chains for the provision o f equipment and inputs, as well as for the provision of maintenance services;

(ii) Intensification of cropping techniques and methods for high value products. This concerns improving productivity in terms of planting material, soil and labor, for example for the following products: (a) mangoes: varieties, grafting, integrated pest management, flowering induction, harvesting, transport, etc.; (b) French beans: irrigation techniques, environmentally sound pest management, harvesting;

38

(c) Tiger nuts: cultivation on ridges, irrigation and harvesting; (d) potatoes: cropping techniques fine-tuning, mechanization, fertilization, irrigation, integrated pest management; (e) sesame: improved varieties, intensification, harvesting, seeds, biopesticides, crop management, development o f agro-technical referentials, support to emergence and development of private service providers (inputs, advisory services);

(iii) On-farm storage, post-harvest treatment, and agro-processing technologies. The project w i l l seek to improve storage of perishable products (potatoes, onions, French beans, mangoes, etc.) and disseminate techniques such as hygienic drying (solar, gas-powered), steaming, curing and disinfecting techniques for a range o f products; juice, jelly, jam, peanut and/or shea butter, o i l extraction, husking techniques; packaging for sale and transport, etc.).

Component 2: Improvement of agricultural supply chains (US$7.07 million, including contingencies) There i s a wide range o f high value agricultural products for which M a l i has a comparative advantage and that are potential sources o f export revenues and growth for the rural economy. Some of these product lines have already been extensively analyzed and tested and have proven to be highly profitable, i.e., mangoes, French beans, Tiger nuts, sesame, potatoes and shallot/onion. Other products with high margin are currently being studied and tested l ike okra, arabic gum, cashew nuts and sheanuts. Because o f their added value, employment and income generation, the development o f production and marketing o f these high-margin value products can provide income and employment opportunities for the rural population, thus helping reduce the widespread rural poverty.

The proposed project w i l l support the country diversify its export and commercial base b y helping the private sector invest in selected value-adding products for which the country has comparative advantage. Although high margin products are currently produced, the production level i s considerably l ow compared to that o f other SSA countries such as Kenya, Ghana, Senegal or Burkina Faso. The low level o f productivity can be explained by a number o f constraints including high transport costs, low-quality of products, insufficient professionalism, use o f rudimentary production techniques, lack o f rural infrastructure such as storage facilities, pack houses and processing plants, and lack o f market information.

This component w i l l support: (i) market research and improvement of the information base on supply chains, (ii) improvement in supply chain organization and inter- professional dialogue, through institutional capacity-building and'training; (iii) promotion o f private investment and improvement in the provision o f private services; (iv) quality and food safety management.

Component 3: Access to financing (US$2.93 million, including contingencies)

The objective of this component i s to facilitate access to capital and financial services for the various private actors and operators o f the agricultural supply chains. This w i l l be achieved through completing and strengthening existing programs and interventions geared to improving access to the commercial banking system and M F I s for entrepreneurs in the rural sector, both at production, processing and marketing levels. The project w i l l provide resources in the form o f technical assistance to address weaknesses

39

in the offer of credit and financing instruments for rural entrepreneurs, help develop financial instruments more adapted to the needs o f agro food supply chains and build the know-how and capacities in the financial institutions to enable them to increase their operations in this sector. The project w i l l seek specifically via targeted technical assistance at improving the capacities o f financial intermediaries capacity (microfinance institutions and banks) to provide finance to the agricultural sector.

This component aims at facilitating access to capital and financial services for the various private actors and operators involved in the agricultural supply chains and strengthening the current agriculture credit market in Mal i . I t entails inducing and helping local financial intermediaries (banks, micro-finance institutions, existing guarantee funds) build their capacities, increase their outreach and ability to respond to the needs o f the various actors along the supply chain (producers, traders, processors, transporters etc) b y offering a wider range o f financial services.

The technical assistance w i l l focus on helping financial institutions to develop the s k i l l s and the products that can best answer the needs o f the agricultural sector and o f specific filikres. I t w i l l also foster innovation in new products for agriculture finance, such as: innovative loan products (for specific filikres), warehouse receipts, leasing, contract farming, etc. The component intends to address supply side issues to agricultural finance, while the project w i l l also address demand sides issues. Issues such as technical and managerial capacities o f farmers, farmer organizations and rural entrepreneurs w i l l be addressed through components 1 and 2. However this component should support farmers to better understand and meet financial institutions’ requirements.

The component w i l l include two sub-components:

(a) Technical assistance and reinforcement o f capacities o f financial institutions to appraise and supervise sub-projects and operations in the sector. The objective i s to enable financial institutions to extend their offer o f equity capital, agriculture related loans and other services, while improving their turn-over in this particular sector in a sustainable and competitive manner.

(b) Support to the creation and development o f a range o f financing instruments (leasing, warehouse receipts, etc.), adapted to serve small farmers, rural entrepreneurs, agro-enterprises and agribusinesses, particularly for innovative projects in the chosen commodity marketing chains.

Component 4: Market-oriented infrastructure (US$21.49 million, including contingencies)

Investing in basic infrastructure to improve linkages to the end markets is essential to ensure the development o f agricultural supply chains and improve their competitiveness. This entails investment in key commercial infrastructure such as export facilities, cold chain, storage facilities, pack houses, wholesale markets, etc. The project w i l l also propose rehabilitation or treatment o f hot spots on strategic feeder roads. Indeed, following the transfer o f public service missions from the state-owned cotton company (CMDT) to the relevant ministries, many roads have been neglected due to the lack o f resources. The existence o f a network o f feeder roads in good condition i s critical for post-harvest marketing operations.

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The project will a im at lifting bottlenecks in transportation and marketing infrastructure such as collection centers, storage and processing facilities, and rural-access roads to support production, processing and marketing o f traditional (cotton) and non-traditional (horticulture) products.

This component w i l l include two sub-components for public/collective infrastructure :

1. construction o f commercial infrastructure such as export facilities, cold chain, storage facilities, pack houses, wholesale markets, etc.;

2. rehabilitatiodimprovement of rural roads, particularly in cotton-growing areas and to secure access to post-harvest, processing and commercial infrastructure built b y the project .

Investment in rural communication infrastructure is critical for many reasons. Transporters have recently threatened to double transport tariffs for the collection o f cotton because o f the poor condition of the roads. Collection o f cotton was also late in some areas for the same reason. For products other than cotton, there i s a high percentage of loss during transport. Finally, i t would be inconsistent to build infrastructure to facilitate marketing o f agricultural products and not have roads to bring products to the new infrastructure or to export the products from the area.

Component 5: Project Management and kT&E (US$5.61 million. including contingencies) This component includes the resources necessary to ensure adequate project management, partic’ularly overall coordination, financial management and procurement o f goods and services, as wel l as monitoring and evaluation of results and impacts.

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Annex 5: Project Costs

MALI: Agricultural Competitiveness and Diversification Project

Indicative Bank- % of Project costs by components Costs % of financing Bank-

(US$M) Total (US$M) financing 1. Demonstration and dissemination of irrigation, 10.34 22.0 10.34 100.0 post-harvest and value-adding technologies 2. Improvement of agricultural supply chains 7.07 15.0 7.07 100.0 3. Access to financing 2.93 6.0 1.93 65.8 4. Market-oriented infrastructure 21.49 45.0 2 1.49 100.0 5. Project management and M&E 5.61 12.0 5.61 100.0

Total Project Costs 47.45 100.0 46.45 97.9

Total Financing Required* 47.45 100.0 46.45 97.9 Figures may slightly differ due to rounding.

* Inc lud ing contingencies, guarantee faci l i ty endowment by Gov. o f M a l i and PPF refinancing.

Local Foreign Total US$ mill ion US$ mil l ion US$ mil l ion

Project Cost B y Component and/or Activity

post-harvest and value-adding technologies 2. Improvement of agricultural supply chains 3.57 3.14 6.7 1 3. Access to financing 1.81 1.02 2.83 4. Market-oriented infrastructures 9.78 9.78 19.56 5. Project management and M&E 2.46 1.60 4.06 PPF Refinancing 1.20 1.20

Total Baseline Cost 26.93 17.22 44.15 Physical Contingencies 0.64 0.79 1.43

1. Demonstration and dissemination o f irrigation, 8.11 1.68 9.79

Price Contingencies 1.21 0.66 1.87 Total Project Costs' 28.78 18.67 47.45

Total Financing Required 28.78 18.67 47.45 Figures may slightly differ due to rounding.

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Annex 6: Implementation Arrangements

MALI: Agricultural Competitiveness and Diversification Project

Guiding principles for project implementation

The project implementation w i l l be guided b y the following principles: - M a r k e t orientation: market needs and requirements w i l l be the driving force for

determining project interventions; all actions w i l l not be pre-determined but implementation procedures w i l l allow reactivity to market signals and new opportunities ;

Demand-driven approach: except for some infrastructure pre-identified needs, the project intervention w i l l not be all planned in advance. I t w i l l rather answer requests from organized private operators, involved in a viable economic project and committed to share costs o f actions ;

- Private sector-led interventions: private actors, including producers associations, w i l l play the leading role in expressing priorities and in implementing activities ;

Public-private partnership: the decision-making process w i l l rely on a constant dialogue between private sector and public authorities, and the establishment and consolidation o f public/private partnerships w i l l be supported particularly for the construction and management o f collective infrastructure ;

Regionalization and decentralization: regional specificities w i l l be taken into account in decision making and implementation; the advanced decentralization context w i l l be taken into account and w i l l seek close collaboration with regional and local councils in project orientation and implementation ;

Cross-cutting issues: the project w i l l not only concentrate on specific targeted supply chain, i t w i l l provide assistance to groups offilibres on cross-cutting issues (access to financing, infrastructures, etc.) in order to lift bottlenecks ;

Holistic approach of competitiveness: the project w i l l look at supply chains as a whole and w i l l pay attention to al l aspects from production to commercialization. Supply chains diagnosis w i l l help target interventions on the bottlenecks, either at farm level, post-harvest stage or marketing.

-

-

-

-

-

Steering committees

3 A t the national level:

Since the project requires inter-ministerial coordination and inter-agenc y cooperation, as well as public/private partnership, a project steering committee w i l l be created. I t s members would include all ministries involved in market-oriented agricultural promotion (development o f high value products, export promotion, and financial services). The steering committee w i l l provide pol icy guidance, review and approval of the annual work plan and budget, and solutions to inter-agency or inter-ministerial problems and implementation bottlenecks.

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Public-private partnership: Government’s representation w i l l be balanced with a large participation of private stakeholders: commerce and agriculture chambers, professional associations f r o m different economic categories (producers, traders, exporters, processors, etc) and inter-professional bodies as soon as they get organized. Private actors w i l l therefore represent at least 213 of the steering committee’s members.

At the regional level:

Decentralization: T o enhance decentralization and ensure full responsibility o f f ield economic operators and decentralized authorities, steering committees w i l l be established at the regional level. These committees w i l l be fully responsible for deciding and supervising project activities in their respective regions. Their decisions w i l l not be submitted to the national committee, even though this latter w i l l have to ensure coordination and consistency o f activities. The regional steering committees w i l l work in close collaboration with regional elected councils, which are responsible for supervising and supporting regional economic development. Other local councils at the communal level w i l l be associated to the decision-making for infrastructure planning and construction. Communes have been given specific responsibilities for feeder roads rehabilitation and management.

Regionalization: The creation o f regional steering committees i s also justified by the need for the project to take into account agro-ecological diversity and farming system characteristics. T o be more relevant in making decision and efficient in undertaking actions, the project w i l l act as close as possible to f ield preoccupation and actors.

Implementation modalities:

Project coordination: a small management unit at the national level w i l l be responsible of project intervention coordination. This management unit w i l l include: a national coordinator, a private sector development specialist (with strong experience in agricultural product marketing), a supply chain development specialist, a monitoring and evaluation expert, a training expert and a financial/accounting specialist. Other required competences, such as procurement and environmental safeguards follow-up, w i l l be contracted out. This unit w i l l be responsible for: (i) annual programs preparation; (ii) administrative tasks (procurement, reporting.. .); (iii) field activities monitoring and supervision o f contracted operators; (iv) technical and administrative support to the regional coordination units; and (v) coordination wi th other projects.

Contracting out: As mentioned earlier, contracting out to specialized operators w i l l be the main project implementation principle. This w i l l translate for project execution as follows:

3 Project execution at regional level: in each region o f project intervention, implementation of component 1 and sub-component 2 of component 2 w i l l be delegated, through international bids, to private agencies (firms, NGOs.. .).

3 Soft investments: other actions under component 2 and activities of component 3 w i l l be contracted out to specialized institutions such as consultancy f i r m s or research institutes for studies; NGOs or training centers for organizational and capacity

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building aspects; commercial banks and M F I s for credit management under component 3.

3 Civil works: component 4 w i l l be delegated to existing agencies, such as AGETIP or AGEROUTE for feeder roads and AGETIER for marketing infrastructure.

Pre-requisites for project intervention: as an on-demand project dealing with multiple stakeholders, the project w i l l establish clear eligibility criteria and fund allocation rules. Selected interventions w i l l require the following:

The existence o f a structured demand f rom economic operators and private entrepreneurs interested in the project approach, especially the cost-sharing principle ; A sufficient potential for production and market growth ; An attested economic and financial rate o f return ; A significant impact on poverty alleviation in rural areas ; The existence o f pre-existing organizations involved and active in the proposed action.

Manual of procedures: a manual o f procedures has been prepared to detail: (i) eligibility criteria and modalities to access project supports (matching grants, training, agricultural advice.. .); (ii) organization and functioning o f project steering committees, management unit and private operators at the regional level; (iii) implementation modalities for each category of project activities; (iv) status and management o f project staff; (v) monitoring and evaluation institutional arrangements and modalities; (vi) implementation o f the social and environmental mitigation plan.

-

- - - -

Building multi-stakeholder supply chains: The project w i l l put a strong emphasis on organizing the different actors al l along the supply chains to build inter-professional forums for specific fiZi2res or groups o f fiEi2res (for instance: fruits and vegetables, o i l seeds, etc). The objective i s to establish, before the mid-term review at the latest, multi-stakeholders boards where public entities and private actors w i l l maintain dialogue on a regular basis to joint ly guide the use o f public fundshnvestments for the promotion o f the different agricultural chains.

In the framework of these inter-professional entities, economic operators and public authorities w i l l have to elaborate strategic development and business plans for their sub- sector, supported b y detailed action plans providing information on who i s responsible for each task and how financing breaks down. The elaboration o f multi-stakeholder economic projects w i l l be based on: (i) assessment o f organizational and economic performances of the targeted fil i2re; (ii) analyses o f market demands and requirements; (iii) identification of strategic opportunities, and (iv) identification o f constraints to be addressed and bottlenecks to be removed.

The proposed inter-professional entities w i l l then discuss priority interventions, for instance: (i) priority research needs; (ii) technology transfer and agricultural extension programs to be undertaken; (iii) capacity building activities to be implemented; (iv) produce quality management and control, and market requirements; and (v) specialized technical issues such as pest management, post-harvest storage (cold chain), processing and packaging. Within commodity associations, members w i l l be responsible for managing financial issues, such as: (i) fund allocation procedure for matching grant

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mechanisms; (ii) feedlevies for the financing o f collective actions in supporting the fiZi8re, and (iii) prioritization of activities and budget allocations.

Based on the fiZi2i-e diagnosis and the multi-stakeholder proposed business plan, the project w i l l provide a range o f on-demand technical tools and financial instruments: technology generation, demonstration and transfer; infrastructures construction (storage, packaging, etc.); access to credit facilitation; matching grants for research and extension; capacity building programs; support to service providers development (agricultural and management advice, market information system, compliance with international standards, feasibility and market studies, etc.).

Project exit strategy:

From the very beginning of the project, implementation w i l l focus on the continuation of activities after project closing. Even if public funds and investments w i l l s t i l l be required for interventions, one of the major objectives i s to ensure that supply chains, through inter-professional entities or commodity associations, w i l l sustain their internal organization and collaboration for identifying priority actions to be undertaken jointly. Promoting multi-stakeholder dialogue and public-private partnership i s therefore critical to the success of the project and w i l l required close attention f rom the borrower and the Bank.

The ultimate objective is to enable multi-stakeholder decision-making forums and establish financing and public-private co-financing mechanisms for the promotion o f agricultural supply chains. This w i l l later facilitate the channeling o f public funds, in a more appropriate and relevant way compared to former Government-led projects, toward market-oriented and private sector-led actions for software activities (research, extension, training.. .) and infrastructure investments. I t w i l l facilitate the transition to programmatic investments and external financing tools such as PRSPs for the Bank.

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Annex 7: Financial Management and Disbursement Arrangements

MALI: Agricultural Competitiveness and Diversification Project

A. SUMMARY OF FINANCIAL hlANAGEMENT ASSESSMENT

Implementing Entity The project will be managed by a Coordination Unit set up under the Ministry o f Agriculture. The Project Implementation Unit (PIU) w i l l coordinate project implementation at the national level including the financial management. The national project management unit w i l l include: a national coordinator, a private sector development specialist (with strong experience in agricultural product marketing), a M&E expert, a procurement specialist, a financial officer and an accountant. This unit w i l l be responsible for: (i) annual programs preparation; (ii) administrative tasks (procurement, reporting, etc.); (iii) field activities monitoring and supervision o f contracted operators; (iv) technical and administrative support to the regional coordination units; and (v) coordination with other projects. The main responsibility for follow-up and coordination w i l l be decentralized to the regional units, which w i l l comprise a regional coordinator, an M&E specialist and two technical experts (one for marketing issues, one for organizational and institutional aspects).

Staffing The PIU w i l l appoint a Finance Officer and an Accountant with academic and professional qualifications acceptable to the Bank. Reporting to the Coordinator, they w i l l be responsible for directing and guiding the financial management operations o f the Project .

Risk analysis The overall conclusion o f the M a l i Country Financial Accountability Assessment (CFAA), carried out in 2002 and completed in 2003, i s that “the public finance management system is fairly coherent with relatively strong budget procedures implemented within a clear institutional setting with improving and strengthened control measures”. I t goes on to add that “This reality should not hide malfunctions for which appropriate dispositions should be taken.” In essence, the CFAA shows that significant progress has been made in the areas o f financial management. The country’s own control systems are operating more efficiently despite a few weaknesses in the supervision of projects.

Consequently various measures to mitigate these r i sks have been agreed and thus the project risk from a financial management perspective could be moderate provided the risk mitigating measures are properly taken. Therefore financial management arrangements are designed to ensure that funds are used for the purpose intended, and timely information i s produced for project management and government oversight, and facilitate the compliance with IDA fiduciary requirements.

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Control Risks The main control risks, ratings and mitigating measures are tabulated below. The project risk from a financial management perspective i s considered moderate provided the risk mitigating measures below are properly addressed.

Inherent Financi a1 Management Risks: 0 Funds may not used in an

efficient and economical way and exclusively for purposes intended due to corruption and poor governance.

Financial Management Control Risks: 0 The FM staff has not

implemented the new FM system yet. Teething problems may jeopardize t imely and accurate financial reporting and disbursement process.

Risk Rating

M

M

Risk Mitigation Measure

The team o f appropriately qualified and experienced staff may reduce this risk. Strong internal control procedures to be set up and maintained. Though, need for strengthening the process of follow-up o f Audit Reports and regular assessment o f fiduciary f i r m s ’ deliveries.

Training o f staff i s expected to be provided by the FM Consultant before effectiveness.

H = High S = Substantial M = Moderate N = Lowhegl ig ib le

Information Systems: An integrated information system w i l l be set up within the PIU.

Financial Reporting and Monitoring Monthly, quarterly and annual reports w i l l be prepared b y the Finances Unit then submitted to the Coordination and IDA for the purpose o f monitoring project implementation.

Monthly: (i) A Bank Reconciliation Statement, (ii) Statement o f Cash position, (iii) Statement o f expenditures, and (iv) Statement o f Sources and Uses o f funds ;

Quarterly: (i) Financial Reports, (ii) Physical Progress Reports, (iii) Procurement Reports, (iv) SOE withdrawal schedule, and (v) Special account statementheconciliation ;

Annually: An annual project financial statements consisting o f the following: (i) A Statement o f Sources and Uses o f funds (by Credit Category/by Activi ty showing IDA and Counterpart Funds separately); (ii) A Statement o f Cash Position for Project Funds from all sources; (iii) Statements reconciling the balances on the various bank accounts (including IDA Special Account) to the bank balances shown on the Consolidated Statement o f Sources and Uses o f funds; (iv) SOE Withdrawal Schedule listing individual withdrawal applications relating to disbursements b y the SOE Method, b y reference number, date and amount; and (v) Notes to the Financial Statements.

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Indicative formats for the reports are outlined in two Bank publications: (a) quarterly Financial Monitor ing Reports (FMRs) in the FMR Guidelines; and (b) monthly and annual reports in the Financial Accounting, Reporting and Auditing Handbook (FARAH).

Accounting Policies and Procedures Project accounts w i l l be maintained on an accurate basis, augmented wi th appropriate records and procedures to track commitments and to safeguard assets. Accounting records w i l l be maintained in Francs CFA. The Chart o f Accounts w i l l facilitate the preparation of relevant monthly, quarterly and annual financial statements, including information on the following: . Total project expenditures ; . Total financial contribution from each financier ;

Total expenditure on each project component/activity ;

Analysis o f that total expenditure into c iv i l works, various categories o f goods, training, consultants and other procurement and disbursement categories.

Annual financial statements w i l l be prepared in accordance wi th International Accounting Standards (IASs). All accounting and control procedures wil l be documented in the Manual o f procedures, a l iv ing document that w i l l be regularly updated.

.

B. AUDIT ARRANGEMENTS

The IDA Agreement w i l l require the submission o f Audited Project Financial Statements to IDA within six months after year-end. Independent qualified external auditors w i l l be appointed on TORS acceptable to IDA. A single opinion on the Audited Project Financial Statements in compliance with International Standards on Auditing (ISAs), w i l l be required including the accuracy and the propriety o f expenditures made under the SOE procedures and the extent to which these can be relied upon as a basis for credit disbursements. In addition to the audit reports, the external auditors w i l l be expected to prepare a Management Letter giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the IDA agreement.

C. DISBURSEMENT ARRANGEMENTS

The overall funding for the project w i l l consist o f an IDA Credit and a Guarantee facility financed with Government counterpart funds. The PIU w i l l open one Special Account in FCFA in a commercial bank, acceptable to IDA. The Special Account w i l l be used for the payment o f goods, works and services under the various components o f the project, in accordance with Schedule 1 o f the Credit Agreement.

Interest income received on the Special account w i l l be deposited in another account o f the borrower.

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The Special Account advance w i l l be deposited when the conditions for credit effectiveness are met. The account w i l l be reconciled on a monthly basis and validated by the PIU’s Finance Officer. Detailed banking arrangements, including control procedures over all bank transactions (e.g. checks, signatories, transfers, etc.) w i l l be documented in the Manual of Procedures.

Method of Disbursement B y effectiveness, the project w i l l not be ready for report-based disbursements. Therefore, during the f i r s t year o f implementation, the PIU w i l l claim transaction-based disbursements following the disbursements procedures (Le. direct payments, reimbursements to the Special Account and Special Commitments) described in the Wor ld Bank Disbursement Handbook.

The report-based (FMR) disbursement method w i l l be applied after a satisfactory assessment has been carried out by the Bank’s Financial Management Specialist (FMS) within the first twelve to eighteen months o f implementation. Upon effectiveness, the PIU w i l l however start issuing Financial Monitoring Reports (FMRs), which w i l l be reviewed b y the Financial Management Specialist (FMS) in Mali . The FMRs w i l l integrate financial reporting, procurement and contract management with physical implementation progress.

When FMR-based disbursements are approved, the Special Account advance w i l l be increased to cover project expenditures for six months in accordance with a cash f low forecast. The project w i l l submit FMRs on a quarterly basis, which w i l l include a cash flow forecast for the following six-month period . The cash request at the reporting date w i l l be the amount required for the forecast period as shown in the approved FMRs less the balance in the Special Account at the end o f the quarter.

The option o f disbursing the funds through direct payments from IDA on contracts above a pre-determined threshold w i l l also be available. Withdrawal applications for such payments w i l l be accompanied by relevant supporting documents such as copies o f the contract, contractors’ invoices and appropriate certifications. Detailed disbursement procedures w i l l be documented in the Manual o f procedures.

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Allocation o f Credit Proceeds

Amount o f the Credit Allocated

(Expressed in Cate,gorv/ Proiect Component SDR Equivalent)

Demonstration and dissemination o f irrigation, post-harvest and value adding technologies

Improvement o f performances of agricultural supply chains

Access to financing (except guarantee facility)

Market-oriented infrastructure

Project management and M&E

Refunding o f Project Preparation Advance(s)

Unallocated

TOTAL

6,5 00,000

4,500,000

1,200,000

13,000,000

2,700,000

800,000

2,000,000

30,700,000 -------- --------

% of Expenditures to be Financed

100%

100%

100%

100%

100%

Amounts due pursuant to Section 2.02 (b) o f this Agreement

Special Account T o facilitate project implementation and reduce the volume o f withdrawal applications, the PIU w i l l open one Special Account in FCFA in a commercial bank, on terms and conditions acceptable to IDA. The authorized allocation o f FCFA 2,200,000,000 w i l l cover about four months o f eligible expenditures. Upon effectiveness, IDA w i l l deposit the amount of FCFA 1,100,000,000 into the Special Account representing 50 percent o f the authorized allocation. The balance w i l l be made available when the aggregate withdrawals from the credit account plus the total amount o f all outstanding special commitments entered into by the Association shall be equal to or exceed the equivalent of SDR 10 million. Further deposits by IDA into the Special Account w i l l be made against withdrawal applications supported b y appropriate documents. The PIU’s Finance Officer w i l l be responsible for submitting replenishment applications, on a monthly basis with appropriate supporting documents. PCDA’s expenditures should be paid through the special account, to the extent possible. All payments inferior to 20 percent o f the authorized allocation are required to be paid through the Special Account. Applications for the replenishment o f the Special Account should be submitted on a monthly basis together with reconciled bank statements and other documents, as required. The borrower may also choose to pre-finance project expenditure and seek reimbursement from LDA.

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Counterpart funds and taxes

ACTION

1. Recruit Financial Officer and Accountant

2. Install acceptable financial management system (computerized accounting and financial system and manual o f procedures with a FM Consultant’s assistance)

IDA funds wil l cover the payment of taxes under the project, as authorized by the Country Financing Parameters for Mali . The Government o f Mali , as the Borrower, w i l l finance the Guarantee fund as i t s counterpart contribution.

Target Completion Date

By end Sept. 2005

B y end Sept. 2005

Use of Statement of Expenditures (SOEs):

3. Special Account opened.

Disbursements for al l expenditures w i l l be made against full documentation, except for items claimed under the Statement o f Expenditures (SOE) procedure. SOEs w i l l be used for payments claimed under contracts for: (a) works in an amount inferior to US$300,000; (b) goods in an amount inferior to US$200,000; (c) consulting f i r m s in an amount inferior to US$lOO,OOO; (d) individual consultants in an amount inferior to US$50,000. SOEs w i l l also be utilized for all small equipment, office supplies and training. Documentation supporting all expenditures claimed against SOEs w i l l be retained by the PIU and w i l l be made available for review, when requested b y IDA periodic supervision missions and project external auditors. All disbursements w i l l be subject to the conditions stated in the Development Credit Agreement as well as the procedures defined in the disbursement letter.

By end Sept. 2005

D. NEXT STEPS

4. Select and appoint external auditors

Action Plan

B y end Sept. 2005

The action plan to be implemented before Credit Effectiveness i s tabulated below.

Financial Covenants A financial management system, including records and accounts w i l l be maintained by the PIU. Financial Statements w i l l be prepared in a format acceptable to IDA, and w i l l be

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adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect o f the project.

Supervision Plan

Supervision activities w i l l include: review o f quarterly FMRs; review o f annual audited financial statements and management letter as well as timely follow up o f issues arising; and participation in project supervision missions as appropriate. The Bank F M S in charge w i l l play a k e y role in monitoring the timely implementation o f the financial management arrangements.

Flow of funds

All procurement issues and contracts with service providers w i l l be administratively and financially managed at the national level. This w i l l allow regional units to focus and pay more attention to technical and organizational aspects o f the project in the field.

Conclusion The overall conclusion o f the financial management assessments i s that the Bank’s financial management requirements w i l l be satisfied, provided the fol lowing conditions are met prior to credit effectiveness: (a) finance officer and accountant selected and appointed; (b) financial management system acceptable to the Bank installed; (c) special and project accounts opened with counterpart initial deposit released; and (d) qualified external auditors appointed.

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Annex 8: Procurement

MALI: Agricultural Competitiveness and Diversification Project

A. General

Use of the Bank Guidelines

Procurement for the proposed project would be carried out in accordance with the Wor ld Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated M a y 2004; and “Guidelines: Selection and Employment o f Consultants by Wor ld Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Legal Agreement. The general description of various items under different expenditure category are described below. For each contract to be financed by the Loadcredit, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank project team in the Procurement Plan. The Procurement Plan w i l l be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Procurement of Works:

Works procured under this project, would include infrastructures for communication and for marketing, small works for office rehabilitation, and other small works for land development in small areas. Infrastructures for.communication consist in the construction o f feeder roads, in order to open up productions areas and to enable easy transportation o f agricultural and livestock products. Infrastructures for marketing consist in the construction of market places, including facilities for conditioning, logistical and storage. Those two groups o f works are large scale contracts which w i l l l ikely attract foreign bidder. The procurement w i l l be done using the Bank’s Standard Bidding Documents (SBD) for al l I C B and National SBD agreed with (or satisfactory to) the Bank.

National Competitive Bidding (NCB) advertised locally, may be used for contract estimated to cost less than US$500,000 equivalent, and w i l l be carried out with procedures acceptable to the Bank and ensuring the following: (i) bids are advertised in national newspapers with wide circulation; (ii) bid evaluation, bidder qualification and award criteria are specified clearly; (iii) bidders are given adequate response time (minimum two weeks) to prepare and submit bids; (iv) bids are awarded to the lowest evaluated bidders; eligible bidders, including foreign bidders, are not precluded from participating; and (v) no preference margin i s granted to domestic contractors.

Small works estimated to cost less than US$50,000 equivalent per contract may be procured through shopping, based on price quotation obtained from at least three contractors in response to a written invitation to qualified contractors.

54

Procurement of Goods:

Goods procured under this project would include : f ield survey equipments, equipments for laboratories, multipurpose platforms, equipments for perishable export centers, f ield transport equipment, vehicles, office supply, computers, etc . . . The procurement w i l l be done using Bank’s SBD for all I C B and National SBD agreed with (or satisfactory to) the Bank.

National Competitive Bidding (NCB) advertised locally, may be used for contracts estimated to cost less than US$200,000 equivalent, and w i l l be carried out wi th procedures acceptable to the Bank and ensuring the following: (i) bids are advertised in national newspapers with wide circulation; (ii) bid evaluation, bidder qualification and award criteria are specified clearly; (iii) bidders are given adequate response time (minimum t w o weeks) to prepare and submit bids; (iv) bids are awarded to the lowest evaluated bidders; eligible bidders, including foreign bidders, are not precluded f rom participating; and (v) no preference margin i s granted to domestic suppliers.

Small quantities such as office supply, consumable materials and spare parts available o f f the shelves and which cannot be grouped into packages o f a least US$50,000, w i l l be procured through shopping, based on price quotation obtained f rom at least three reliable suppliers in response to a written invitation to qualified suppliers. Office equipment and vehicles estimated to cost less than US$lOO,OOO per contract, may also be procured f rom IAPSO.

Procurement of non-consulting services:

Non-consulting services are l ikely not to exceed the equivalent o f US$lOO,OOO per contract. The procurement o f such services w i l l be done using bidding documents agreed with (or satisfactory to) the Bank. For those contracts, N C B wil l be carried out. For contract estimated to cost less than US$50,000, shopping procedures may be used, in the same way for the procurement o f goods.

Selection of Consultants:

Consultants services under this project would include: (i) monitoring, supervision and project management; (ii) setting-up accounting management system, financial and contract management; (iii) project coordination staff, technical advisory services for capacity building and support; (iv) technical and financial audit; (v) training and workshop, (vi) feasibility studies, (vii) technical studies for the design o f infrastructures, (viii) consultancy for supervision o f infrastructures construction, (ix) contract management, and (x) individual consultants services for small studies and specialized advisory services (special assignments, technical assistances).

Short l is ts o f consultants firms for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. Specific consultants services involving special arrangements for the use of Universities, Government

55

Research institutions and NGOs w i l l follow special arrangements regarding the selection o f such entities.

Regarding Training, Workshops and Study Tours i f any, at the beginning o f each year, each beneficiary wi l l submit i t s proposed plans in the form o f an annual training plan for the coming year, to be reviewed b y IDA. The plan would indicate the persons or groups to be trained, the type o f training to be provided, indicative learning outcomes, the provider or location o f the training, i t s estimated cost, and as the case may be, the financial contribution from the beneficiary(ies). Selection o f training institutions for workshops/training should be based on a competitive process, using the Consultant’s Qualification Method o f selection.

The Standard Request for proposal (RFP), as developed by the Bank, w i l l be used for the selection o f consultants.

The Project Agency (or any Contract Management Agency involved in the project execution) w i l l ensure widely publicized Requests for Expressions of Interest (REI) for al l contracts, as stated in the Guidelines. For contracts for consultant f i r m s estimated to cost the equivalent o f US$200,000 or more, and for contracts for individuals estimated to cost the equivalent o f US$lOO,OOO or more, the REI w i l l be published in the United Nations Development Business (UNDB), and in the Development Gateway Market (dgMarket) newspapers.

Operational Costs: Operational costs to be financed b y the project would be procured using the implementing agency’s administrative procedures which were reviewed and found acceptable to the Bank.

Reference to the National Procurement System The Malian Procurement Code i s regulated by Decree no 95-40UP-RM o f November loth, 1995. This code was reviewed in 1999 with IDA assistance, and an amendment was made under the Decree no 99-292/P-RM o f September 21St, 1999. In general, the country’s procurement procedures do not conflict wi th the Bank Guidelines. N o special permits or licenses need to be specified in the credit documents, since M a l i procurement practices allow IDA procedures to take precedence over any contrary local regulation or practice.

A Country Procurement Assessment Review (CPAR) was carried out in M a l i in December 1998 flagged the main issues such as the lack o f capacity among the borrower staff, absence o f standard bidding document at the national level, insufficient capacity of local contractors for contract subject to ICB, and corruption practice. Recommendation were made to address these issues. In addition, an IDF Grant was provided to strengthen the Borrower capacity in procurement, modernize the procurement process and improve the regulation.

A CPAR update has been carried out in 2004: the recommendations and action plan o f this exercise w i l l be taken into consideration during project implementation.

56

B. Assessment o f the agency’s capacity to implement procurement

Procurement activities w i l l be carried out by a Project Implementation Agency including a Procurement Unit with qualified staff. But the said unit i s s t i l l to be created, and the staff i s to be selected.

The Project Implementation Manual (PIM) to be finalized by the Borrower, prior to the effectiveness o f the credit, w i l l include a specific section on procurement, detailing in addition to the procurement procedures, the SBDs and other standard procurement documents to be used.

Since the Implementing Agency to implement procurement actions for the project has not yet been created, an assessment o f the capacity was not possible. However, i t i s recommended that related to the organizational structure for implementing the project, the PIM outlines the interaction between the project’s staff responsible for procurement and the Ministry’s relevant central unit for administration and finance.

On another hand, i t i s envisaged to hire Contract Management Agencies to deal with procurement. Actually two Agencies are operating in M a l i (AGETIPE-Mali and AGETIER-Mali): they are quite proficient in procurement and have handled procurement under the Wor ld Bank procedures, and other Donors procedures. In term o f weaknesses, they s t i l l have to improve in procurement planning, and in some cases in bidproposals evaluation. Other contract management agencies can be hired as it i s the case for the HIV/AIDS MAP project, and for the Biodiversity Project in the Gourma Region.

The issues/risks to be avoided concerning the procurement component for implementation o f the project would l ikely include:

- insufficient number o f procurement staff, in view o f the possible increased number o f procurement actions and the time constraints related to the kind o f business and the kind of clients for this project, i.e. operators f rom the agro- business sector; eventual insufficiency in detailed procurement activities when such activities are carried out b y others units than a contract management agency: (i) procurement planning, (ii) the preparation o f bidding documents or requests for proposals, evaluation o f bids or proposals, contract negotiation, contract execution and supervision, (iii) procurement filing; insufficient liaison between the procurement staff and other relevant staff in the

project implementation unit or at the level o f the central unit for administration and finance.

-

-

The corrective measures which have been agreed are:

- -

recruitment o f an adequate number o f qualified staff; intensive capacity building including clinics on procurement and hands-on trainings in order to alleviate all the weaknesses that would be identified.

57

The overall project risk for procurement i s high.

C. Procurement Plan

The Borrower, at appraisal, developed a Procurement Plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Borrower and the Project Team on April 19, 2005 and i s available at the office o f the Project Coordinator, c/o the Ministry of Agriculture. After the project negotiations, i t w i l l also be available in the Project’s database and in the Bank’s external website. The Procurement Plan w i l l be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

D. Freauencv of Procurement Supervision

In addition to the prior review supervision to be carried out from Bank offices, and regarding the possible issues about the capacity in procurement of the Implementing Agency i t i s recommended to carry out one supervision mission each quarter during the first year o f the project, and one supervision mission each semester after the f i rs t year, to visit the f ield and to carry out post review o f procurement actions.

58

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Thresholds for Procurement Methods and Prior Review

Contracts Subject to Prior , ' ReviewlEstimated Total Value Expenditure .

Category ~ . - - Subject to PdorRGdew (US$) I Community t

jl.Civil works /< $50,000 'participation, and/or fminor works (3 price quotations)

NCB I= or > $50,000 and '

;< $500,000 I

I I ~- i i != or > $500,000 'ICB

2. Goods: I

I k$50,000 'Shopping, IAPSO Vehicles, ;Equipment, I

IFumiture, Supplies

I___ -- _I

I I

2 i joffice equipment

IAPSO i I and vehicles I= or > $50,000 and i< $100,000 I

Other contracts j

< $200,000

I

I j= or > $50,000 and NCB i

i I

I ;= or > $200,000 ICB I I

$3. Non-consulting pervices

I

1. Consultant jervices

< $50,000 I

'Shopping

= or > $50,000 and : $200,000 NCB

j

= or > $200,000 'QCBS

,Post-Review

First 3 contracts irrespective o f value sand al l contracts above $300,000. In all cases, the description o f the works l i s subject to prior review

'All Contracts

Post-Review. IAPSO may be used for office [equipment and vehicles

. I x I

~- ! -

IAPSO may be used for office equipment and vehicles. In all cases, [the specifications o f the goods are ,subject to prior review.

The f i rst 3 contracts irrespective o f value. All others: Post-Review. In al l cases, the specifications o f the ,goods are subject to prior review

. . - Post review: but the description o f thc services w i l l be prior reviewed and approved on the basis o f an annual programs

Post review: but the description o f thi services w i l l be prior reviewed and approved on the basis o f an annual programs

All. Short-list subject to Request o f Expression o f Interest.

All contract estimated = or > $50,00( for individual consultants, and 'Various i

lagreed annually based : $200,000 consulting firms. :On the Work Other contracts: post review, except Program) Terms o f Reference which are prior

Methods (to be contracts = or > $ ~OO,OOO for

review.

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Preferably CQ ,(planning to be agreed annually based on the

5. Training, workshops, study All Values

$tours I ]Annual Work Program)

Post-Review (see note (iii) below)

N.B. (i) All terms of reference for consulting services w i l l be subject to IDA’S prior review. (ii) Procurement performance w i l l be assessed on an annual basis (in the form o f procurement audits by an external agency. Post-reviews can be done either b y the Bank’s specialists or b y independent consultants. The threshold levels for various methods o f procurement may be revised based on the assessment results. (iii) Training abroad and in-country, workshops and study tours w i l l be carried out on the basis o f approved annual programs that would identify the nature of trainingstudy tours/workshops, institutions where trainingstudy tours/workshops would be conducted (selection o f institutions and justification thereof), cost estimates and contents of the course.

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Annex 9: Economic and Financial Analysis

MALI: Agricultural Competitiveness and Diversification Project

The Agricultural Competitiveness and Diversification Project w i l l provide economic and social benefits, both at the level of the overall project or at the level for each of i t s four operational components. Whi le the benefits expected from the first component o f the project can be objectively assessed, quantification o f the benefits o f the three other components of the project i s difficult and can only be envisaged through a cost effectiveness analysis, as the investments to be carried out by the project and private investors are to be determined during the project l i fe through a demand driven and participatory approach (with the exception o f the road rehabilitation sub-component, for which a specific economic analysis has been carried out).

A cost benefit analysis at the level o f the whole project has however been carried out on the basis o f (a) project and foreseeable private investment costs, and (b) expected project outcomes in terms of reduction in production costs (component l), increased sales on domestic and export markets, and increased prices o f exported products resulting f rom improved processing and marketing techniques.

Benefits expected from Component 1 - Demonstration and dissemination of irrigation, post-harvest and value-adding technologies

The analysis i s based on farm models corresponding to the introduction o f improved small irrigation (treadle pumps and drip irrigation systems instead o f manual irrigation for farms between 0,15 and 0,20 ha cultivating tomatoes, onions, shallots or French beans; motorized pumps for larger farms o f around 0,5 ha cultivating potatoes), and storage technologies (improved storage for potatoes and onions).

The analysis i s made in both financial and economic terms (the former being based on 2004 market prices). In the quasi-absence o f taxes on inputs, economic and financial costs are very similar. Economic prices have been derived f rom wholesale or FOB prices after deduction o f marketing costs.

The financial analysis takes also into account a matching grant to support the dissemination of adapted new technologies for small farmers. I t would be targeted at small farmers (less than 0.5 ha) and would cover 70% o f the cost o f the infrastructure works linked to the introduction o f new technologies (construction, water tanks, etc.. .), with a ceiling of 150,000 CFAF for individuals (for improved irrigation techniques) or farmers' groups members (for improved post harvest technologies). This matching grant i s justified on the ground that, although the considered investments prove to be quite profitable, they probably exceed the self financing capacity o f small farmers, and can hardly be financed on a credit basis, considering the long amortization period.

Combined with improvements in the technical itinerary, these investments would provide, without matching grant, a financial internal rate o f retum ranging f rom 31% to

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more than loo%, and from 68% to more than 400% with a matching grant. As shown in the table below, the economic profitability o f the project i s even greater than the financial profitability without matching grant. Importantly, these expected returns are not very sensitive to capital cost (it remains above 10 percent in spite o f a doubling). Moreover, expected returns are not very sensitive to products price (they remain superior to 10 percent in spite of a doubling). Conversely, they are quite sensitive to yields, which stresses the need for technical support and advice.

Yields before improvements (kg/ha) Yields after improvements

Table 1: Returns of producers’ investments

22 000 22 000 20 000 6 000 30 000 30 000 30 000 8 000

Financial analysis IRR (without matching grant) 69% I 58% 38 % 31 % 136% 71%

Switching values at 10% Product price 1 -82% 1 -50% I -65 % -66% I -68% I -24%

Benefits expected from Component 2 - Improvement of supply chain performances

Component 2 (CFAF 3.4 billion) consists of various types of technical assistance, capacity strengthening and marketing tests, which benefits are dif f icult to assess through an economic and financial analysis, based on a cost-profit perspective.

Investment I 302% Yields I -22%

Component 2 wil l : (a) contribute to improve the knowledge of market opportunities, (b) allow market operators to better organize to meet market demands and to manage efficiently the concerned value chains, (c) contribute to removing the constraints to private investment and to improving the delivery o f support services, thus enhancing the capacity and competitiveness of the concerned value chains, and (d) contribute to bring up the quality o f produces to the standard required b y markets. All these expected outcomes w i l l result in new export and domestic markets, generating incremental income for producers and processors. Because the expected incremental production and exports

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276% 221% 255% 555% 162% -13% -22% -17%

w i l l result from the combined effects o f components 1, 2, 3 and 4, i t i s not possible to isolate the direct benefits from component 2, which have thus to be considered from a cost effectiveness point o f view.

The cost effectiveness o f the component w i l l be ensured b y (a) the principle o f cost sharing for a l l activities o f the component, (b) the eligibility criteria, which wil l include a minimum rate of return and the acceptance o f the beneficiaries to participate in the costs, and (c) a systematic outsourcing to the private sector, on a competitive basis, for the supply of services under the component.

Benefits expected from Component 3 - Access to financing Through the establishment o f a guarantee fund, the promotion o f innovating financing mechanisms and the provision o f technical advisory services to financial institutions in order to adapt to the specific needs o f agricultural credits, the component w i l l contribute to facilitating the access to credit for producers and small scale processors, which i s currently a major constraint for the sector. This w i l l result in increasing production capacity and competitiveness in the concerned value chains, through more efficient production process and improved quality o f products. The component w i l l thus contribute, in conjunction with components 1, 2 and 4, to the overall benefits o f the project as discussed below, although i t i s not possible to isolate i t s specific benefits.

A l i s t o f actions to be performed to improve access to credit and risk management was defined. I t w i l l be performed on call on a cost effectiveness basis, which i s made possible by using a set o f criteria which aims at filtering application.

In a demand-driven project, indeed, it i s crucially important to make sure that eligibility rules are clearly stated in the procedures manual. For this reason, access to services provided under the components 3 w i l l be selected from the onset or during the execution of the project. The criteria, which w i l l be used to identify projects eligible for funding are listed in the annex 6. They are designed in such a way that requests that w i l l satisfy them are expected to generate profit de facto.

Benefits expected from component 4 - Market-oriented Infrastructures

Two types of infrastructures should be either developed or rehabilitated: rural roads and marketing infrastructures. The program o f rural roads to be rehabilitated has been pre- defined, and concerns 1,111 km o f rural roads for an estimated rehabilitation cost o f CFAF 377 million. The type o f rehabilitation w i l l depend on the actual utilization ratio o f the road: full ref i l l ing for over 60 vehicledday; relevelling between 40 and 60 vehicles/ day; elimination o f critical points below 40 vehicledday. A specific cost/benefit analysis has been done, showing an IRR o f 12%, taking into account only the actual traffic.

Rural roads w i l l be rehabilitated in cotton growing areas to contribute to the improvement of the competitiveness o f the cotton sector. Moreover, these pathways w i l l connect more efficiently to the market some zones with a great potential for fruits and vegetables production by malung these productions fresher, better processed and delivered at a lower cost and in a faster way. The immediate prof i t coming f rom the construction and/or the rehabilitation o f the rural pathways w i l l consist in improvement o f access to the market,

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reduction o f transport costs and improvement o f the competitiveness o f the livestock and products line.

Marketing infrastructures which w i l l be finally selected and implemented over the duration o f the project, w i l l have a demonstration effect, clarifying the nature o f the benefits expected from the improvements in technology and product quality. Moreover, benefits w i l l depend on the various types o f infrastructure. For instance, creating slaughter areas and improving cold chains would have a significant impact on food safety, which i s rather difficult to assess - in the short run - in terms o f economic and financial outcomes, although it i s clearly effective in terms o f social benefits. On the other hand, structuring wholesale markets, building collection centers and storage areas, and constructing an export logistical platform should generate clear and direct economic benefits. As the program o f marketing infrastructures to be’implemented i s not fu l ly pre- defined, cost benefits analyses are not possible. However, the el igibi l i ty criteria w i l l include the condition that a full feasibility study be available for each infrastructure showing, in particular, an economic internal rate o f return o f at least 12% and confirming i t s financial viability.

Global economic analysis of the program

The global analysis takes into account the fol lowing expected benefits: (a) reduction in production costs, linked to the improved production technologies disseminated under component 1; (b) incremental domestic outlets (resulting in increased production and farmers income) linked to improved storage and processing technologies in the same component; (c) incremental export outlets, linked to improved knowledge on export markets disseminated b y component 2; (d) increased value of export produce, in relation to improved marketing and packing techniques disseminated under components 2 and 4. I t also takes into account the project costs and the investment costs borne b y farmers in relation to the introduction o f these new technologies.

These benefits w i l l concern agricultural and livestock products, selected on the basis o f a detailed economic and financial analysis, initiated in the context o f a study on competitiveness, which was made in 2002 and updated in September 2004. For irrigated crops, these products are either to be sold on the domestic market (e.g. onions/ shallots, potatoes and other agricultural produce such as tomatoes, which represent the biggest volume), or exported on foreign markets (e.g. mangoes and other horticultural products such as “French beans”). For non-irrigated crops, these products are sesame and Arabic gum (mainly for export). Livestock products concerned are leathers and skins, which can be exported if they meet quality standards. The economic and financial analysis i s performed on a conservative basis. To make sure that the expected benefits reach, at least, the targets, the analysis does not consider how the project program might impact other important product lines such as meat, milk, cashew nuts, etc.

Expected benefits have been quantified on the basis o f reasonable assumptions on the program outcome: Assuming that 20% o f farmers w i l l adopt the new irrigation technologies, that the domestic market for horticultural produce w i l l ,increase b y 5 to lo%, that the export market for Arabic gum, French beans and mangoes wi l l double, and increase by 25% for skins, that the regional export market for potatoes and onions w i l l

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increase respectively b y 33 and 50%, and that the FOB price o f export produce w i l l in average increase b y lo%, the incremental benefits distributed to farmers and market operators would amount to nearly CFA 5 bi l l ion (US$lO million) per year at the end of the program. In this case, the internal rate o f retum for the total project investment cost would be 16%.

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Annex 10: Safeguard Policy Issues

MALI: Agricultural Competitiveness and Diversification Project

The M a l i Agricultural Competitiveness and Diversification Project's overarching objective i s to contribute to two MDGs, namely: (i) eradicating extreme poverty and hunger and (ii) ensuring environmental sustainability in rural areas -- through the reduction of excessive dependence o f cotton economy, improvement o f productivity in high values crops, reduction o f r isks for small farmers with adapted irrigation technology, and through diversification o f rural incomes thanks to improved marketing channels for high value agricultural and livestock products.

The project comprises f ive main components: Component 1 : Demonstration and dissemination o f irrigation, post-harvest and value adding technologies Component 2: Improvement o f performances o f agricultural supply chains Component 3: Access to financing Component 4: Market-oriented infrastructure Component 5: Project management and coordination

As a category B project, the project was required, according to national and Wor ld Bank safeguard policies, to prepare an Environmental and Social Impact Assessment (ESIA), based on the triggering o f the environmental Assessment Policy (OP/BP 4.01). The project has been rated B since there are some adverse but limited potential environmental impacts from construction/rehabilitation o f infrastructure and other project-related activities, such as pesticides use for high value crops, waste watedresidues disposal and treatment for processing units, particularly slaughterhouses. Collaboration with the EU- funded Pesticide Initiative Program w i l l be enhanced. All these impacts have been thoroughly analyzed in the ESIA and addressed through the ESMF.

From a social perspective and with respect to the project's poverty-focus objective, the ESIA report did a highly commendable j ob in undertaking a thorough social impact assessment o f the project, embracing not only the l ikely impacts resulting from project's activities, but also o f potential positive and negative impacts resulting from the project itself. The assessment includes issues related to gender and to the project's potential impact in terms of fostering and enhancing women's horticulture production, as wel l as the risks linked to (i) increased attractiveness o f project areas (Sikasso, SCgou, Bamako/Koulikoro and Mopti); (ii) migration to these areas and the resulting strains on natural resources; (iii) increased conflicts over land and (iv) disruption o f social systems.

From an environmental perspective, the ESIA report presents a thorough and an in-depth analysis o f the bio-physical, socioeconomic and cultural context within which the project w i l l be implemented. The resulting baseline information appears to be no short o f a textbook account o f the country's natural, socioeconomic, and cultural environments and what may be the potential positive and negative impacts on natural resources, once this project is implemented. The assessment process goes sometimes beyond the normal scope o f analysis required for this type o f study to discuss gender dimensions, land use patterns and agricultural production and productivity systems, to name just a few problem

72

areas. I t goes on to discuss how these fit and what they mean for the national poverty reduction strategy.

T o describe these impacts, the report presents an innovative approach, which starts by describing the positive and negative impacts o f other projects in the PCDA interventions zones already under implementation and then discusses those pertaining to PCDA activities. The PCDA i s described as integrative (projet 'Ifkdkrateur"), with a holistic approach to rural development. In that regard, the ESIA draws an interesting link between the proposed project and other operations (closed or on-going projects/programs) and suggests ways to enhance linkages. I f nothing else, this approach served to highlight the cumulative effects o f the various projects intervening in a particular geographic area. This analysis i s followed b y remediation and mitigation measures for PCDA's specific activities.

Similarly, the report extensively discusses the current legal, regulatory and institutional framework within which the project is to be implemented, along with its shortcomings and measures designed to facilitate implementation o f proposed remediation and mi tigation.

Institutional arrangements for putting in place social and environmental mitigation measures have been clearly discussed. They are designed to ensure that environmental considerations are taken into account through screening, selection, planning, construction and operation processes o f the various project components and that social and environmental benefits are ensured and sustained through adequate impacts and mitigation monitoring, as they relate to identified project beneficiaries and affected people. Environmental and social considerations and impact mitigation planning w i l l be an integral part o f the implementation o f the project activities.

The ESIA has been carried out by a consultant in September 2004, following broad consultation framework, involving all relevant stakeholder groups and other interested parties. The main objectives o f the ESIA were to: (i) identify the main environmental and social impacts of the project and (ii) prepare an Environmental and Social Management Framework designed to help avoid, mitigate and/or compensate for the negative impacts and strengthen positive ones. The ESIA is considered both as a planning tool and a means for a harmonious integration o f the project in i t s bio-physical and social environment, as well as a way to maximize positive effects on the environment.

The ESIA, which was carried out in full compliance with national and Bank environmental and social safeguard policies and guidelines, has been reviewed and approved by both the Direction Nationale de 1 'Assainissement, du Contrdle des Pollutions et Nuisances (DNACPN), the national agency in charge o f environmental impact assessments and pollution and nuisance control, and ASPEN. I t has been disclosed in local newspapers and displayed in relevant public agencies (Ministry o f Agriculture, Ministry of Environment, the National library), the Wor ld Bank Office in Bamako and at the Wor ld Bank Infoshop on November 30, 2004, prior to the project's appraisal.

73

Prior to disclosure in-country and at the Bank Infoshop, a workshop was organized, involving relevant project stakeholder groups in public agencies, such as DNACPN, the communities, c iv i l society, NGOs and the private sector. The objective was to present

' the results of the ESIA, foster ownership and seek input from these stakeholders in order to improve the quality and soundness of the ESIA. Recommendations from ASPEN, the stakeholders workshop, and DNACPN, in particular, have been reflected in the final ESIA, prior to its disclosure. The recommendations of the ESIA report w i l l be reflected in the Project Implementation Manual (PIM).

Following the ESIA, an Environmental and Social Management Framework (ESMF), which includes a Resettlement Policy Framework (RPF), was prepared and published at the Bank Infoshop and in the country in April 2005.

Policy Triggered

Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Natural Habitats (OP 4.04, BP 4.04, GP 4.04) Forestry (OP 4.36, GP 4.36) Pest Management (OP 4.09) Cultural Property (OPN 11.03) Indigenous Peoples (OD 4.20) Involuntary Resettlement (OPIBP 4.12) Safety of Dams (OP 4.37, BP 4.37) Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)"

Yes No No Yes No No Yes No N o No

74

Annex 11: Project Preparation and Supervision

MALI: Agricultural Competitiveness and Diversification Project

P 1 anned Actual PCN review 01/15/2003 07/29/2003 Initial PID to PIC 10/02/2003 10/02/2003 Initial ISDS to PIC 10/02/2003 10/02/2003 Appraisal 11/30/2004 1210 1/2004 Negotiations 0 1/10/2005 05/26/2005 Board/RVP approval 0211 5/2005 07/05/2005 Planned date of effectiveness 10/15/2005 Planned date of mid-term review 11/15/2008 Planned closing date 06/30/20 12

Key institutions responsible for preparation of the project in Ma l i are the Ministry o f Agriculture (Project Preparation Unit) and the Ministry o f Livestock and Fisheries.

Bank staff and consultants who worked on the project include:

Name Ti t le Unit Patrick Labaste Task Team Leader AFTS4 Olivier Durand Bakary KantC Yeyande Sangho Christophe Ravry Jean-Noel Guillossou Hubert Boirard Boubkher Essafi Divine N j i e Andr6 Ryba Mahine D iop Ismael Ouedraogo I lhem Baghdadli Sidi Boubacar RenCe Desclaux Marie-Louise Ah-Kee Cheick Traore Nestor Coff i Renate Kloeppinger-Todd Amadou KonarC Yvette Dj achechi Rohan Selvaratnam Virginie Vaselopulos Benoit Blare1 Tijan Sallah

Agribusiness Specialist Ag. Economist, Consultant Sr. Operations Officer Sr Agribusiness Specialist Sr. Transport Specialist Agronomist Irrigation Specialist Post-harvest Technology Specialist Lead Financial Sector Specialist Transport Specialist Sr. Ag. Economist, M&E Specialist Economist Lawyer Disbursement Officer Procurement An a1 ys t Procurement Specialist Financial Management Specialist Rural Finance Adviser Environment Specialist '

Sr. Social Development Specialist Sr. Program Assistant Program Assistant Peer Reviewer Peer Reviewer

AFTS4 AFTS4 AFTS4 m s 4 AFTTR

FA0 Consultant FA0 FA0

AFTFS AFTTR AFTS3 m s 4 LEGAF LOAG AFTS3 AFTPC AFTFM

ARD AFTS 1 AFTS3 . m s 4 m s 4 E C S D m s 1

Shawki Barghouti Peer Reviewer ARD

75

Bank funds expended to date (May 2005) on project preparation:

1. Bank resources: US$371,710 2. Trust funds: not requested 3. Total: US$371,7 10

Estimated Approval and Supervision costs:

1. Remaining costs to approval: US$O 2. Estimated annual supervision cost: US$85,000

76

Annex 12: Documents in the Project File

MALI: Agricultural Competitiveness and Diversification Project

1. ACDP Appraisal mission aide-mimoire and technical annexes - World Bank (AFTS4) - December 2004.

2. National Document on ACDP - Ministry of Agriculture, 2005.

3. Note on potential, opportunities and constraints of agricultural supply chains, Ministry of Agriculture, April 2004.

4. Analysis of institutional options for ACDP, Horus, September 2004.

5. Environmental and social impact assessment of ACDP, RAM, Final report, November 2004.

6. Study on access to financing, Horus, September 2004.

7. Study on marketing infrastructures, Geomar, November 2004.

8. Studies on small scale irrigation, FAO, July 2004 and December 2004.

9. Inventory of irrigation technologies, August 2004.

10. Study on diffusion of irrigation and production technologies, September 2004.

11. Economic and financial analysis of PCDA, N. Gergely, consultant, April 2005.

12. Aide-mtmoire of the mission on rural roads sub-component, World Bank (AFTTR), September 2004.

13. Study on support to supply chains (shallots, arabic gum, hibiscus, karite, sesame), ACDI, July 2004.

14. Programme d’arne‘lioration des systbmes d’exploitation, Project Document, French Development Agency, October 2002.

77

Annex 13: Statement of Grants and Credits

MALI: Agricultural Competitiveness and Diversification Project

Original Amount in US$ Millions

Difference between expected and actual

disbursements

Project M Purpose ID

IBRD IDA SF GEF Cancel. Undisb. Ong. Frm. Rev’d

~

PO80935 2005 GROWTH SUPPORT PROJECT 0.00 55.00 0.00 0.00 0.00 53.88 0.00 0.00

0.00 0.00 5.50 0.00 5.50 0.49 0.00 PO52402 2005 (FYO5) PO82957 2004 HIV/AIDS MAP 0.00 25.50 0.00 0.00 23.90 0.46 0.00 PO76440 2004 ML GEF HOUSEHOLD ENERGY 0.00 0.00 0.00 3.50 0.00 3.35 0.45 0.00

0.00 35.65 0.00 0.00 0.00 34.92 4.06 0.00 PO73036 2004 Access

0.00 48.70 0.00 0.00 0.00 38.84 2.56 0.00 PO79351 2004 IMPROVEMENT

ML-GEF Gourma Biodiv Conserv S I L o,oo

ML Household Energy & Universal

ML TRANSPORT CORRIDORS

0.00 2.50 0.00 0.00 0.00 2.58 1.05 0.00 ML-Development Learning Ct LIL PO82187 2004 (FY04)

0.00 43.50 0.00 0.00 0.00 22.37 14.96 0.00 PO35630 2002 PRODUCER ORGANIZA PO40650 2001 ML-Edu Sec Exp Prgm APL ( F Y O I ) 0.00 45.00 0.00 0.00 0.00 10.15 3.93 0.00

ML ARICULTURAL &

PO01748 2000 Fmance Sec Dev 0 00 21 00 000 0.00 000 12.70 1058 0 00 PO41723 2000 MLRURAL INFRASTRUCTURE 0.00 115 10 000 000 000 5700 4606 0 00 PO40652 1999 ML-Health Sec Dev Prog S I L (FY99) 0 00 4000 000 000 000 12 43 12 10 8 80

PO01750 1997 ML URBAN DEVT & DECENTR 0 00 8000 000 000 000 1477 18 88 18 88

Total. 722 16

78

MALI STATEMENT OF IFC’s

Held and Disbursed Portfolio In Mil l ions o f U S Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic

1997103 Hotel Bamako 189 0 00 0 00 0 00 189 0 00 0 00 0 00 PAL-Graphque Id 0 45 0 00 0 00 0 00 0 45 0 00 0 00 0 00 PAL-Rabelais 0 15 0 00 0 00 0 00 0 15 0 00 0 00 0 00 PAL-SANKE 0 14 0 00 0 00 0 00 0 14 0 00 0 00 0 00

1999 SEF lmpnm Color 0 34 0 00 0 00 0 00 0 10 0 00 0 00 0 00 1998 SEF SIECO 0 30 0 00 0 00 0 00 0 30 0 00 0 00 0 00 1995 SEMOS 0 00 48 0 00 0 00 0 00 4 80 0 00 0 00

Total portfolio

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic

2005 AEF GRAPHIQUE I1 2 31 0 00 0 00 0 00 Total pending commitment

79

Annex 14: Country at a Glance

MALI: Agricultural Competitiveness and Diversification Project

1 3 12 1 18 1 3 2

15 3 0 5

16 4 8.3

Mall

11 7 2m 5 .I

2 4 2 4

Ehl z? 52

113 ;5 51 % %3 E8 A9

199s

2 7 21 R 15 R 8 4

10 13

5 9 1 5

1m4 14 s

2om

4 4 2 1

31 7

au b

M ICd

7rw 4m 367

satiaraii

2 5 2 4

?r3 43

1W

I*I 3-5 B? 8 4 83

2001

3 3 1c). 6 31 z1 185 16 1

.3 3 0 7

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104

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1993 1993 2002 2003

4 1 - 1 61.15 3 4 1 a s 1 1.18 163 2i47 m i 6 5 7 8 &2 2b

‘a37 3 3 3 5 1 3 5 5

371 m.7 708 71 1 11 1 128 107 Y B 3 1 5 31 1 310 30ei

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80

1 9 m

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13 8 Ab 0 1 4 0

1983

1983

23% JOR 199

17 18

148

XI2 n

23 381 1

1983

i39R 5

176

2 D 0 1

79 124

3 0

18 0

18 1

1R

1993

as 2 0

15 4 3 8 4 0

1993

349 147 54

878 537 71

le;,

I37

5 3

1993

624 8 1

-411

2 2%

-I&

2 13 3 3

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1993

2,903 0

a% p3 0 a

175 33

d 0

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in03

-1 3 1&

173 48

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a m

454 35 r 542

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1,125 131ii -in1

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a303

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13

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82

Ciirfeni aCCountbalanwlo GDP I ’ ~ I

G 151

81

Annex 15: Map Number 34083 MALI: Agricultural Competitiveness and Diversification Project

82