Report No. 462a-CM FILE COPYAppraisal ofCocoa ProjectCameroonAugust 1, 1974

Western Africa Regional Office

Not for Public Use

Document of the International Bank for Reconstruction and DevelopmentInternational Development Association

This report was prepared for officiai use only by the Bank Group. It nmay not be published,quoted or cited without Bfank Group authorization. The Bank Croup does not accept responsibilityfor the accuracy or completeness of the repoit.

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CAMEROON

COCOA PROJECT

CURRENCY EQUIVALENTS

US$ 1 CFAF 250CFAF 1 US$ 0.0040CFAF 1,000,000 US$ 4,000

WEIGHTS AND )OEASURES(Metric System

1 hectare (ha) = 2.47 acres1 kilometer = 0.624 miles1 kilogram = 2.204 pounds1 metric ton = 2.204.6 pounds1 liter - 1.057 U.S. quarts

ABBREVIATIONS

OCCE : Caisse Centrale de Coopération Economique (France)CENADEC : Centre National de Développement des Entreprises

CoopérativesCINAM : Compagnie d'Etudes Industrielles et d'Aménagement du

TerritoireDPR t Department of Public RoaduFAC : Fonds d'Aide et de CoopérationFONADER : Fonds National de Développement RuralIFCC : Institut Français du Café et du CacaoIRAT : Institut de Recherches Agronomiques Tropicales et de

Cultures VivrièresLPAC : Lutte Phytosanitaire et Anti-CapsideSODECAO : Societé de Développement du CacaoSEDES : -Societé d'Etudes pour le Développement Economique et SocialSEMRY : Secteur Expérimental de Modernisation de la Riziculture

de YagouaUDEAC : Union Douanière des Etats de l'Afrique Centrale

(Customs Union of Central African States)ZAPI : Zones d'Actions Prioritaires Intégrees

CANEROON

COCOA PROJECT

Table of Contents

Page No.

SU1Q¶ARY AND CONCLUSIONS ................... ............ i - v

I. INTRODUCTION ....... ............. ................. 1

II. BACKGROUND ....................................... 2

A. General ...................................... 2

B. Agricultural Sector ......................... 2

C. The Cocoa Industry ............ ....... ........ 3

Institutions ................................ 3

Production .................................. 5Marketing and Prices ........................ 5

Credit for Cocoa Farmers .................... 6

D. Development Prospects and Strategy .......... 6

General ....................... 6

Strategy for the Cocoa Industry ............ . 7

III. THE PROJECT ...................................... 8

A. Project Area ................................ 8

B. Project Description ..... ........... . 9

Summary of Main Features .................. . 9Rehabilitation and New Plantings . ........... 9

Extension Services .......................... 10Training .................................... ilRoad Rehabilitation ......................... il

Research .................................... 12

C. Organization and Management ....... .. ........ 12

SODECAO ..................................... 12

Consultants ................................. 131larketing ................................... 13

D. Accounts and Audit ............ .. ............ 14

This report was prepared by Messrs. M. Burer, M. Ballesteros, C. R. Delapierre,

W. M. Schaefer and M. Wessel.

TABLE OF CONTENTS (Cont'd)

IV. COST ESTIMATES AND FINAiNCIAL ARRANGEMENTS ........ 14

A. Cost Estimates .............................. 14B. Financial Arrangements ..... ................. 16C. Credit to Farmers and Farmer Groups ......... 19D. Procurement ................................. 19E. Disbursement ................................ 20

V. PRODUCTION, PRICES, MARKETING ANID FIiNANCIALRESULTS ........ ................................ 20

A. Production .................................. 20B. Markets and Prices .......................... 20C. Farmers' Benefits ........................... 21D. Government Revenues ......................... 22

VI. ECONOMIC BENEFITS AND JUSTIFICATION .... .......... 23

VII. RECOIMNDATIONS .................................. 24

ANNEXES

1. Pest and Disease Control2. Field Developments

Table 1 Number of Farmers and Corresponding AreasTable 2 Establishment of New Plantings

3. Farm Labor

Table 1 Available Labor for Cocoa Cultivation in Project AreasTable 2 Labor per ha of Newly Planted CocoaTable 3 Labor Requirements for 1.2 ha Rehabilitation and

0.75 ha New Plantings

4. Improvement and Maintenance of Rural Roads

Table 1 List of Roads

5. Research

Table 1 Research Program for Cocoa

6. Marketing

Table 1 Marketing Systems in Francophone Cameroon

TABLE OF CONTENTS (Cont'd)

7. Project Costs

Table 1 Project CostsTable 2 Project Costs: PersonnelTable 3 Project Costs: BuildingsTable 4 Project Costs: Vehicles and EquipmentTable 5 Project Costs: Operations and Maintenance

8. Agricultural Credit

Table 1 Credit Component Cash Flows

9. Estimated Semestrial Schedule of Disbursements

10. Production

Table 1 Estimated Production of Project AreaTable 2 Estimated Production of Rehabilitated CocoaTable 3 Estimated Production of New Plantings

i1. Farm Budgets

Table 1 On-farm Inputs (with Project)Table 2 On-farm Inputs (without Project)Table 3 Farm Budget: 1.2 ha RehabilitationTable 4 Farm Budget: 0.75 ha New Planting with Project,

Existing FarmerTable 5 Farm Budget: 0.6 ha New Planting without ProjectTable 6 Farm Budget: 1.5 ha New Planting with the Project

New Farmer

12. Governnent Cash Flow

13. Economic Rate of Return

Table 1 Economic Value of CocoaTable 2 Economic Rate of Return Calculation

ttIAP

CAMEROON

COCOA PROJECT

SUMIMARY AND CONCLUSIOlIS

Background

i. The Goverrwent of the United Republic of Cameroon has requestedBank assistance in financing a US$23.8 million cocoa planting and rehabili-tation project covering 50,000 ha in the central southern provinces, adjacentto the capital city, Yaounde. The proposed project would be the Bank Group'sfifth lending operation for agriculture and the first for cocoa production.It would be financed jointly with the French agencies Caisse Centrale deCooperation Economique (CCCE) and Fonds d'Aide et de Cooperation (FAC), andGovernment. The feasibility study for the proposed project was preparedby Societe d'Etudes pour le Developpement Economique et Social (SEDES) in1972-73 and the project was appraised by a Bank mission in October/November1973.

Project Description

ii. The project would aim at raising farmers' incomes, the country'sforeign exchange earnings and Government revenues by increasing the produc-tion of cocoa. It would be carried out over a six-year development periodand would involve:

(a) rehabilitating some 35,000 ha of existing cocoa and plantingup to 15,000 ha of new land with high-yielding hybrid cocoa;

(b) strengthening the extension services, to help farmers controldisease and improve their cultivation practices and to supplythem with the necessary inputs and credit facilities;

(c) providing training for some 230 extension workers and 2,000new cocoa farmers;

(d) improving 950 km of rural roads;

(e) adaptive research on cocoa and food crop growing;

(f) equipning and staffing the new agency, SODECAO, to carryout the project and take over responsibility for thedevelopment of cocoa production in the area;

(g) employing consultants to:

(i) advise on tr crganization of the new agency;(ii) evaluate the jrc,ress and impact of the project;

(iii) prepare a fo!LOiJ-_p project; and

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(h) encouraging the formation of farmers' groups that wouldincrease the role of farmers in marketing and credit.

Project Execution

iii. The ZAPI, a development agency, which is presently responsible foragricultural development over most of the project area, has been criticizedfor its lack of attention to production; and its marketing policies haveproved unpopular with farmers. To stimulate participation in the project,therefore, a new authority, Societe de Developpement du Cacao (SODECAO), hasbeen established that would abosorb, gradually and selectively, ZAPI's func-tions and staff.

iv. SODECAO would be generally responsible for the execution of theproject. It would make arrangements with other agencies for the execution ofcertain project components such as road improvement and research. SODECAO'ssenior management would consist of a General Director, a Deputy GeneralDirector in charge of technical affairs, a Deputy Technical Director, aMarketing and Credit Director, a Senior Inspector and a Chief Accountant.Government has already appointed a Cameroonian General Director and recruited,with Bank approval, an expatriate Deputy General Director. The posts ofSenior Inspector and Chief Accountant would be filled through internationalrecruitment and after Bank approval of such candidates. From the beginning,local staff would be trained to take over the functions of some expatriatesafter periods ranging from three to six years.

v. SODECAO would angage consultants to: (a) advise on its organiza-tion aid the takeover of activities from ZAPI, (b) assess the progress andimpact of project, and (c) carry out a feasibility study for a follow-upproject.

vi. SODECAO would encourage the fornation of farmers' groups whichwould gradually take over marketing functions, including storage, and enterinto direct contracts with exporters. The earnings of such groups frommarketing margins and quality and quantity bonuses would be distributed tofarmer members after meeting their costs.

Project Costs and Financing Arrangements

vii. Project costs are estimated at US$23.8 million, including contin-gencies of US$7.0 million. About 5% represents indirect taxes and theforeign exchange component is estimated at US$9.5 million or 40%.

viii. The Bank would make a loan of US$6.5 million to Government for a2f) year term including a grace period of six years. The balance of US$17.3million would be covered by French bilateral sources (IJS$6.5 million), byfarmers contribution (IJS$0.7 million), and by budgetary allocations (US$10.1million). The proposed Bank loan and the French contribution would coverthe foreign exchange of the project (US$9.5 million), and US$3.5 millionequivalent of local currencv expenditures. The Bank loan in particularwould cover the forei,gn exchange costs of the items financed and about 48%

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of the local cost. It is proposed that some US$150,000 of the proceeds ofthe loan be used for retroactive financing of the cost of expatriate salariesand expenditures incurred prior to the signing of the Loan.

ix. The project would provide fungicides and sprayers to individualfarmers and building materials and equipment for collection centers to farmergroups. All items would be made available for cash or on credit; the creditprice would be up ta 20% above the cash price, to cover bad debts and interestand service charges.

Procurement and Disbursement

Xe Items financed by the Bank Loan would be procured as follows:(i) one grader, thirteen passenger cars, and all two-wheeled vehicles havealready been ordered with Bank approval through negotiated purchases on thebasis of quotations from local suppliers, in order to facilitate the start-up of the project. These amount to US$150,000 and would be financed retro-actively; (ii) office furniture and equipment, and small spare parts wouldbe similarly procured; (iii) all other items, amounting to some US$3.5 mil-lion, would be procured in accordance with Bank guidelines on the basis ofinternational competitive bidding. Manufactured goods originating in UDEACcountries would be allowed a preference equal to the lower of (a) 15% or(b) applicable duties; (iv) the services of expatriate personnel and consult-ants would be secured according to procedures acceptable to the Bank.

xi. The French agencies would finance 100% of the cost of training,research and studies; 46% of the personnel and operation and maintenancecosts of the road program; and 32% of the cost of pest control. The pro-curement of items for these activities would be subject to the proceduresof these agencies.

xii. Proceeds of the Bank loan would be disbursed to cover:

(a) 58% of the cost of SODECAO's administrative staff(US$2.8 million);

(b) 100% of foreign expenditures or 90% of local expenditures onvehicles and equipment for SODECAO administrative staff andfor road construction equipment for DPR (US$0.94 million); and

(c) 100% of foreign expenditures on sprayers and fungicides(US$0.78 million).

The balance of US$2.0 million represents contingencies, which would be un-allocated.

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Markets and Prices

xiii. Growing conditions in West Africa have been generally poor in thelast three years, and this has intensified the supply-depressing impact oflimited investment and abandonment of low-yielding plantings following thelow cocoa prices during the early 1960's. The average world cocoa priceduring 1973 was USt65/lb. The current Bank forecast is for a 1980 price ofabout USt 47/lb, in average 1973/1974 prices, and this has been used in theeconomic and financial analyses. The International Cocoa Agreement is un-likely to exert any significant constraint on cocoa production and exportsin the medium term.. Cameroon's market prospects are firm at least through1980, and no difficulties are anticipated in selling the project's output.

Economic Justifications

xiv. The economic rate of return is estimated at 26% using market prices.Cost increases of 10 and 25%, or benefits decreases of similar proportions,would lower the rate of return to about 23% and 19% respectively. Simultaneouscost increases and benefit reductions of 25% would bring the rate down toabout 12%. Since total control of black pod is difficult to achieve, theeffect of a serious shortfall fromn project targets for this component of theproject has been calculated. This shows that if only about one third of theexpected benefits from rehabilitation were obtained, the rate of return forthe project would still be 10%. The risk of such a shortfall is consideredto be small, particularly since the average increases on yields have beenconservatively estimated. Furthermore, the project has been charged with theentire cost of:

(a) the rehabilitation of rural roads, while ne account hasbeen taken of the benefits accruing to nonproject activ-ities, such as the marketing of food crops, general goodsand nonproject cocoa; and

(b) the research and studies, although benefits from theseactivities have not been taken into account.

Excluding the cost of these components, the economic rate of return would be35%. Rates of return have been calculated for the rehabilitation and newplantings components separately, although allocation of project agency costsis necessarily arbitrary. The rates are 32% for rehabilitation and 20% fornew plantings.

xv. The improvement of agricultural institutions, training of localtechnicians in advanced cocoa technology and extension, and encouragement offarmers associations would permit an expansion of the project concept through-out the cocoa growing area. Furthermore, the experience of cocoa replantingacquired through the present project's research component would allow this

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expansion to take place in more densely populated and poorer cocoa areas.

Tle experience gained by the project in establishing SODECAO, training extension

workers and farners, and encouraging cooperative action by farmers should

provide a sound basis for future projects of a similar kind.

I. INTRODUCTION

1.01 The Government of the United Republic of Cameroon has requestedBank assistance in financing a US$23.8 million cocoa planting and rehabilita-tion project covering 50,000 ha in the central southern provinces, adjacentto the capital city, Yaounde.

1.02 In 1971, the Government commissioned Societe d'Etudes Pour leDeveloppement Economique et Social (SEDES), to study means to improve thequantity and quality of cocoa production in Cameroon. This initial study,completed in mid 1972, recommended the rehabilitation of 200,000 ha of exist-ing plantings, and new plantings with improved varieties on 15,000 ha. Follow-ing comments by Bank Group staff and Caisse Centrale, the Government decidedto start implementation in a representative pilot area of 50,000 ha in thecenter of the cocoa producing region. Implementation will be extended toother areas in the light of the results obtained.

1.03 Feasibility studies for the present project were carried out bySEDES. At the Government's request PMWA staff visited Cameroon in March andJuly 1973 to review the draft studies, which were finalized in September 1973.

1.04 The proposed project would be the Bank Group's fifth lending opera-tion for agriculture and the first for cocoa production. The other projectsare:

(a) the C.ADEV plantation project, Loan 490-CM for US$7.0 millionand Credit 100-CM for US$11.0 million, both in 1967; funds forCAIDEV have been depleted by cost increases, lower than expectedincome from nonproject plantings, and excessive overhead. Govern-ment recently took measures to reduce overhead costs and theproject is now proceeding satisfactorily;

(b) the SOCAPALM oil plantation project, Loan 593-CM for US$7.9million in 1969 and Loan 886-CM for US$1.7 million in 1973;the SOCAPALM project started well, but had to be reappraisedin 1972 because of cost overruns and because one of the twosites selected for development was unsatisfactory. Afterreappraisal the project was reduced from 9,000 to 8,500 ha,but production will remain unchanged as higher yields are nowanticipated as well as substantially increased prices forproject produced palm oil and kernels. Tle project is nowon schedule;

(c) the SEMRI rice project, Credit 302-CM for ItS$3.7 million in1972; this project has progressed well since implementationbegan in mid-1972. Estimated total project costs have beenincreased by 20% due to TUS dollar devaluation, additionalworks and increased technical assistance. Government andFrench aid are providing additional funds;

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(d) the Cameroon Livestock Project, wnich was approved by theBoard in March 1974, signed in May 1974 and pending effect-iveness.

1.05 This report is based on the findings of an appraisal mission inOctober/November 1973 comprising Messrs. M. Burer, M. Ballesteros, C.R.Delapierre, W.M. Schaefer (Bank) and M. Wessel (Consultant), assisted duringpart of the visit by ',r. I. Erim (Loan Officer).

II. BACKGROUND

A. General

2.01 Ile United Republic of Cameroon comprises a French speaking Easternpart (with 80% of the population), and an English speaking Western part.Located at the hinge of the Gulf of Guinea (map), it covers about 475,000 km2

and ranges from tropical forest in the south to mountain chains in the westand Sahelian plains in the north. The population in 1972 was estimated at6.1 million, growing at an annual rate of about 2.1%. Overall populationdensity is low, at 12.8 persons/km2; higher density areas include the districtsaround Yaounde where the project will be located. Due to migration, urbanareas are growing annually at about 7%, against only 0.7% in the rural areas.

2.02 Per canita GDP is estimated around US$190 (1970/1971). Economicgrowth, which was fairly rapid during the second half of the 1960's, hastapered off in recent years. Unemployment is high, particularly in the cities.

B. Agricultural Sector

2.03 Close to 80% of the population still depends on agriculture. Annualper capita farm income varies from $90-$100 in the central savannah, forestareas and coffee and cocoa lowlands, to $40-$50 in the northern plains. Agri-culture accounts for about 40% of GDP and for 70% of the value of exports,comprised principally of cocoa, coffee and cotton. The traditional sectoraccounts for over 90% of agricultural production, with large state ownedplantations, mainly of oil-palm and rubber, accounting for the balance. Some950,000 smallholders cultivate plots averaging about 2.0 ha. Labor isgenerallv supplied by the family.

2.04 Cameroon is largely self-sufficient in food products; the exceptionsare rice and wheat, which are being imported in increasing amounts, and lesserimports of sugar and meat also take place. Although food crop productionis keeping slightly ahead of vopulation growth, major urban centers are ex-periencing increasing supply problems. Food crop marketing is not regulated,and is largely in the hands of private traders, most of whom operate oversmall areas and with a small turnover.

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2.05 For the main export crops, production increased by about 5% annuallyduring the late 1960s, but growth has slowed down in recent years. Marketingis highly organized, and Government intervenes by fixing guaranteed producerprices and licensing private exporters. This intervention is implementedthrough Stabilization Funds (cocoa, robusta coffee, arabica coffee, cotton,and groundnuts) in the Eastern part, and a Marketing Board in the Westernpart; these agencies are now being merged.

2.06 Agricultural credit consists mainly of marketing loans for the mainexport crops, and is provided by the Banque Camerounaise de Developpement andcommercial banks. Production credit to individual farmers is small in amount,and limited to participants in specific programs and projects. Agriculturalcredit for production purposes is provided by the recently created FondsNational de Developpement Rural (FONADER, see para. 2.14).

2.07 Agricultural development has so far been hampered by the fragmenta-tion and weakness of the Government services responsible for project prepara-tion and implementation. The creation in 1972 of central Ministries ofAgriculture and Livestock, replacing the previously separate state administra-tions, has improved the situation, but these Ministries are not yet adequatelystaffed. Furthermore, there is a need to coordinate research and training,now the responsibility of several Ilinistries. The Government is, however,making efforts to centralize and coordinate rural development activities.

2.08 About 15% of public investments during the second plan period,1966-67/1970-71, went into crop development, and of this almost three quarterswent into expansion of estate agriculture. The Third Plan (1971-72/1975-76)emphasizes development of the smallholder sector and foresees investmentsin this sector doubling. Explicit goals of the Third Plan are to improvetraditional agriculture, reduce regional income disparities, and alleviaterural migration and unemployment pressures on urban areas. These goals areexpected to be retained in the next plan soon to be prepared.

C. The Cocoa Industry

Institutions

2.09 Tle Ministry of Agriculture, the Zones d'Action PrioritairesIntegrees (ZAPI) and the Cocoa Stabilization Fund are the main institutionspresently concerned with cocoa production; the recently created FONADER isexpected to play an important role in the future.

2.10 The Ministry of Agriculture has directed its activities to increas-ing output. It provides new hybrid planting materials, which are deliveredin the village free of charge, and fungicides and sprayers for black podcontrol, which are provided on credit. A service of the Ministry, the Lutte

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Phytosanitaire et Anti-Capside (LPAC), carries out spraying to control capsiddamage. These activities have begun to improve yields, but they need to bebetter organized if a substantial increase in production is to be obtained.

2.11 The Center-Scuth ZAPI was established in 1972 to carry on an inte-grated development program initiated by Governnent in 1967. The objectiveswere to:

(a) double cocoa production and farmers' incomes withinfive years;

(b) increase farmers' participation in development; and

(c) create farmers' groups which, by means of revenuesobtained from cocoa marketing, could finance theirown development activities.

2.12 The program hinged on effective extension work and monopolisticmarketing. The extension work, however, has not reached large numbers offarmers because of basic deficiencies such as inadequate training and thelack of transport for extension personnel. In addition, the marketing mono-poly has met strong resistance from the farmers. As a result cocoa productionat best has increased only slightly and there has been no self-financed develop-ment. Nonetheless, many farmers have become aware of the benefits of cooperat-ing with each other and of modern techniques of cocoa production.

2.13 The Cocoa Stabilization Fund, an autonomous agency under the Ministryof Industrial and Cor!nercial Development, was established in 1955. As a resultof high world prices during the late 1960's, the Fund had accumulated a sur-plus of about CFAF 12 billion (US$52.2 million at the current exchange rate)by the beginning of 1971. The Fund helped to dampen the impact on producerprices of the wide variations in world prices that occurred from the mid-1950's to the mid-1960's: the world price of cocoa varied between CFAF 241/kgand CFAF 94/kg, whereas producer prices oscillated only slightly around CFAF75/kg. In addition to its pricing and marketing functions (paras 2.18-2.19),the Fund provides important financial assistance for the control of capsidpest and black pod disease, and for the production and distribution of seedof improved varieties. More importantly, the Fund has lately become anextrabudgetary taxing agency, and its revenues are being used by the Governnentto finance activities and investments outside the cocoa sector.

2.14 FONADER is a new (August 1973) agency under the Ministry of Agri-culture which has broad responsibilities for financing rural developmentprojects and for agricultural credit. Its principal sources of funds will beparticipation in taxes and levies (especially on exports and imports ofagricultural products) and Governnent grants; it is also authorized to borrow.FONADER is in a formative stage and its senior staff are still defining itsfunctions and organization. Since there is a real need for the centralizedcoordination, supervision and control of agricultural finance and credit,the establishment of FONADER is a positive step.

Production

2.15 Cameroon is the world's fifth largest producer of cocoa. The areaplanted is estimated at 380,000 ha; annual production over the last threeyears has averaged 110,000 tons of dried beans, or about 7% of world produc-tion, and has accounted for 30% of the value of Cameroon's exports. Morethan 80% of the national output comes from the forested plateau of the CenterSouth.

2.16 Cocoa is mostly cultivated by family labor on small farms of about2-3 ha. It is generally the responsibility of the men, with women andchildren working during the harvest. Weeding is irregular, as are sprayingsin the rainy season that are needed to prevent disease. Fermenting in woodenboxes generally gives good results, but the subsequent sundrying is oftenpoor due to the heavy rainfall at that time of year and lowers the qualityof the product at farm level. Exporters often have to dry again before ship-ment.

2.17 Average yields are low (300 kg/ha). One reason is a general lowlevel of maintenance. The principal cause of low yields, however, is blackpod, a fungus disease which destroys the cocoa pods. The disease spreadsrapidly in conditions of high humidity and relatively low temperatures, andis particularly severe in Cameroon compared to other West African countries.It is estimated that about 50% of the annual crop is lost to black pod. Onthe other hand, the absence of a prolonged dry season makes establishing newplantings easier than in other countries.

larketing and Prices

2.18 Marketing involves licensed and unlicensed buyers, the exportersand the Stabilization Fund. Licensed buyers, who operate on fixed marginsunder cohnt Açt with exporters, collect the dry beans at official cocoa marketswhere controllers employed by the Fund grade the cocoa traded; unlicensedbuyers often go directly to the farmer's home to buy generally lower qualitycocoa there, The cocoa is transported by the buyer to central storage housesfor further drying and grading and sold either for the export market or tolocal processing plants which absorb all off-grade and about 10% of Grade Icocoa (about 20,000 t. annually) for the production of cocoa butter. Exporterswork on fixed margins and on export quotas fixed annually by the Ministry ofIndustrial and Commercial Development. The Stabilization Fund itself hasbeen an exporter since 1971.

2.19 Producer prices are set by Government in advance of each harveston the recommendation of the Cocoa Stabilization Fund. Prices for the 1973-74crop have been raised from CFAF 90 to CFAF 100/ke for Grade I, from CFAF 75to CFAF 80 for Grade II and left at CFAF 65/kg for off-grade. Production ofGrade Il is negligible because the price differential between the two gradesmakes it attractive for farmers to improve their beans to Grade I rating.At the time of appraisal the world price for cocoa was about CFAF 300/kg,

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which may be analyzed as follows (in CFAF): producer price 100, StabilizationFund 116, export tax 34, transport and other costs, fees and exporter's pro-fits 50. Producer prices while lower than those that could be paid, arejudged to provide adequate incentives to producers, provided that creditfacilities and better extension are made available to help raise production.In the event, however, that prices at any time were judged by the Bank tobe so low as to jeopardize the project, the Bank and Government would holdconsultations on the subject.

Credit for Cocoa Farmers

2.20 Cocoa farmers presently have access to credit from:

(a) the Ministry of Agriculture for fungicides and sprayersfor blach.pod control. This is on a small scale, how-ever, and is not properly coordinated with extension work;

(b) exporters to cover school fees at the beginning of theschool year in September; such advances are limited toa few small areas;

(c) ZAPI in the Center South Region, for fungicides, sprayers,school fees and for housing.

Repayments are collected at the markets when the farmers sell their cocoa.Although credit facilities have so far been limited, they have shown thatthere is widespread demand and they have familiarized farmers with repaymentby deduction from the proceeds of sale.

D. Development Prospects and Strategy

General

2.21 The potential for growth in agriculture is good. There are favorablemarket prospects for Cameroon's main cash crops, and with urban migration,there is a growing domestic demand for food. A favorable climate and soils,coupled with traditional low yielding production methods, give ample scopefor increasing output.

2.22 Government's strategy is to exploit the potential for increasedoutput and at the same time to raise rural standards of living, particularlyin the poorer regions. To achieve these aims it will be necessary tostrengthen the Government's own capacity for project planning and implementa-tion; it will be necessary to make technical advice, inputs and credit avail-able to small farmers and to give them the incentive to use them. Thestrengthening of the Ministry of Agriculture and the creation of FONADER aresteps in this direction.

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2.23 The conclusions of a Bank mission, which carried out an agriculturalsector survey in Cameroon in May 1973, support this strategy. The recentlyappraised livestock project will benefit pastoralists and farmers so faruntouched by modern development. The present project would raise the produc-tion and incomes of large numbers of small cocoa farmers. An integratedrural development project in the backward North, which was identified by thesector mission and is expected to be appraised in FY75, would be a first steptoward benefitting some 60,000 families whose incomes and living conditionsare among the poorest in the country. Integrated projects based on rice andother food crops are also under preparation to develop the potential and raiserural incomes in the densely populated Western highlands.

Strategy for the Cocoa Industry

2.24 Government has justifiably given cocoa an important role in itsstrategy for agricultural development. The Third Plan sets a productiontarget of 150,000 tons in 1975/76, calling for an annual increase of 7%duringthe plan period. Given the propitious world market outlook, the foreignexchange earnings and fiscal revenues from cocoa should be substantial andshould assist Governnent to finance projects in the poorer regions that areunsuitable for cocoa. In addition, the wide margin between current worldand producer prices gives Government the ability to balance the needs of thepoorer regions of the country against the effects of greater incentives tococoa farmers.

2.25 Cocoa production can quickly be increased--the means of controllingblack pod are well known and readily available. Over the longer term,sustained increases in production require new plantings to replace and expandexisting cocoa farms of low yield potential. Improved planting material isbecoming available from seed gardens planted since 1969 by IFCC at Nkoemvone.

2.26 Although the techniques and inputs are available, previous attemptsto increase production have not been entirely successful. To ensure thatfarmers increase both their output and their incomes, it is necessary to:

(a) introduce better cultivation practices through improvedextension services, ciosely linked with an efficientsupply system for inputs and credit;

(b) develop marketing arrangements which, while giving thefarmers freedom of choice, will encourage them to playa greater role in marketing (e.g. transporting theirproduce to market and pregrading and weighing it) andto cooperate with each other to improve their bargainingposition;

(c) strengtlhen institutions through wihich these aims can beachieved.

2.27 It would not be practicable to introduce a program incorporatingthe above throughout the country's cocoa growing areas at the same time.There is insufficient trained staff and it is necessary to test organizationalprocedures. Consequently, development should begin in one region and beexpanded gradually as experience is gained. The proposed project would bethe first stage of such a program of development.

III. THE PROJECT

A. Project Area

3.01 The main cocoa growing area is situated on the vast plateau ofSouth Cameroon, at an altitude of 600-700 m above sea level. Conditions areparticularly well suited for cocoa, except that humid conditions and relativelylow temperatures at certain times of the year favor the development of black-pod disease (Annex 1). The soils are deep, highly leached and well drainedbut have a low chemical fertility, except for a shallow surface rich invegetative matters, and thus need fertilizers to support sustained highyields. The project would be located south and west of Yaounde (map). Itwould cover six administrative districts which contain about 80,000 ha ofcocoa, of which 67,000 ha yield an average of 300 kg/ha, and 13,000 ha arenot producing because they are either too young or too neglected.

3.02 The climate is tropical, with a bimodal rainfall over most of thearea separated by a dry season of three months. Average annual rainfallranges from 1,500 mm to 1,800 mm; rainfall is 2,500 mm in the northwesternpart of the project area, where there is no dry spell. Average monthlytemperatures vary little over the year, and range between 22°C and 24°C.

3.03 The area's rural population is estimated at 260,000, of whomapproximately 200,000 comprise some 38,000 cocoa farm families. The averagefamily consists of 5.3 persons, and has about 2.8 members of working age.Cocoa provides the family's basic income, and offers the only means of sub-stantially increasing it. The other important source of income is the pro-duction of food crops for sale in the nearby urban market at Yaounde.

3.04 The average size of farms in Center South Province is 2.6 ha; butin the project area itself holdings are somewhat larger. The average areadevoted to cocoa is about 2.0 ha per farm with a range of 1.2 ha to 3.3 ha.

3.05 Land belongs to the community, with the right of usufruct extendedto the individual who cultivates it. More than enough land is available forproject purposes, however, and land tenure is not likely to be a problem.

3.06 There are three categories of roads in the project area: primaryroads (630 km), maintained by the Department of Public Roads (DPR); secondaryroads (450 km), for which the local administrator, with the assistance of

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DPR, is responsible; and rural roads (1,200 km), under the responsibility ofthe village authorities. Primary roads are adequate except during the rainyseason. Secondary roads are deteriorating due to lack of funds allocatedfor proper maintenance and are often impassable even by light trucks, parti-cularly in the rainy season.

B. Project Description

Summary of Main Features

3.07 The project would be carried out over a seven-year developmentperiod and would involve:

(a) rehabilitating about 35,000 ha of existing cocoa and thenew planting of up to 15,000 ha with high yielding hybridcocoa;

(b) strengthening extension services to help farmers controldisease and improve their cultivation practices and provid-ing farmers with necessary inputs and credit facilities;

(c) providing training for some 230 extension workers and 2,000new cocoa farmers;

(d) improving 950 km of rural roads;

(e) adaptive research on cocoa and food crops;

(f) equipping and staffing a new agency-Societe de Developpementdu Cacao (SODECAO)--to carry out the project and take overresponsibility for the development of cocoa production inthe project area;

(g) employing consultants to:

(i) advise on the organization of SODECAO;

(îi) evaluate the progress and impact of the project;

(iii) prepare a follow-up project; and

(h) encouraging the formation of farmers' groups to participatein cocoa marketing and the supply of inputs and credit.

Rehabilitation and INew Plantings

3.08 The rehabilitation and new planting program would proceed asfollows:

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Project Year 1 2 3 4 5 6 Total---------- Hectares--------------------------

Rehabilitation 6,000 7,000 7,000 7,000 8,000 - 35,000

New Planting - 1,500 3,500 5,000 3,500 1,500 15,000

Details of the program are set out in Annex 2. All planted areas would bein full production in 1988. The program would be carried out by 32,000farmers Principally using family labor. In Annex 3, it is shown that for allthe districts in the project area the availability of labor is not a constraintto achieving project targets.

3.09 The main goal of the rehabilitation program would be the controlof black pod. For this purpose the project would mount an intensive campaignto convince farmers to spray in both the dry and rainy seasons. It wouldalso set up an efficient distribution system for sprayers, spare parts andfungicides which would be supplied on credit (para 4.09) to members of pre-cooperatives and for cash to others. Since capsid damage is not heavy in theproject area, control spraying would be selective; and would be carried outby LPAC with the assistance of farmers' groups.

3.10 The seed of high yield potential hybrid varieties (Amazon SeriesI and II) for the project, and for the general program of the Ministry ofAgriculture, would be supplied by the IFCC seed gardens at Nkoemvone. Theestimated total output of pods as compared with the requirements of theproject (assuming 60 pods are needed to plant 1 ha) is shown below:

Project Year 2 3 4 5 6------------------Thousand Pods-------------

Output 480 720 1,000 1,220 1,350

Project Requirements 90 210 300 210 90

No shortages of seeds are expected, either for the project or for the plantingprogram of the Ministry of Agriculture. To minimize the risks to the project,however, in the event of output being temporarily reduced - for example, bybad weather -assurances have been obtained from Government that the projectwill have priority for the seeds it needed.

Extension Services

3.11 To help farmers rehabilitate their cocoa farms and plant new trees,the project would increase the number of extension workers so that therewould be one for every 200-250 farmers, instead of one for every 600 farmersas at present. These extension workers would be given better training thanat present (para 3.12) and would be provided with adequate transport andadditional office facilities. They would persuade farmers to spray their

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crops correctly and regularly and would organize the supply of the necessaryequipment; they would guide new planters in their cultivation practices. Inaddition, they would oversee village nurseries and provide a link betweenresearch and field practices.

Training

3.12 The initial training program would consist of a basic course andshort follow-up sessions il. the field to train eight future instructors.The basic course would aim at improving technical knowledge and developingtraits of initiative and responsibility in the instructors. It would befollowed by short monthly sessions on specific activities of modern cocoagrowing. Once trained, these instructors would be assigned throughout theproject area, and be responsible for the training of extension workers andnew farmers. Farmers training would take place at the village level and,as much as possible, in the field.

3.13 These instructors would then train a total of 230 extension staff,including 19 supervisors. About 2,000 new planters would also be taughtmodern cocoa growing practices. SODECAO has agreed to have ready a compreheri-sive training program including details of the curricula, phasing of courses,staffing requirements and budget no later than three months after crediteffectiveness.

Road Rehabilitation

3.14 In order to facilitate extension work, the distribution of inputsand the movement of produce to market, the project would improve about 950 kmof rural roads (Annex 4). The improvements would include grading, reshapingand better drainage. The highest priority would be given to the 370 km ofrural roads in the south and east of the project area that require majorworks; improving bad stretches (low-lying and steepgrade sections) by earth-moving and regravelling, building culverts and other ancillary works. Aseparate program, outside the proposed project, is to be prepared for thebetterment of primary and secondary roads which are maintained by the Depart-ment of Public Roads (DPR).

3.15 The proposed rural road program would be carried out by DPR on forceaccount during the relatively dry period, and thus would ensure good runningconditions from November to July. For the rest of the year, while tracks willbe passable most of the time some breaks in the roadway will be unavoidable.

3.16 Assurances have been obtained that:

(a) an annual program of rural road improvements will beagreed with the Bank;

(b) all equipment purchased for the project's roadcomponent will be used and retained in the projectarea; and

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(c) the roads will be adequately maintained by DPR afterthe project has been completed.

Research

3.17 The French Government has supported, for many years, cocoa and foodcrop research in several West African countries, including Cameroon. Toprovide specific support for this project, two French research institutes,IRAT and IFCC, have developed a program of adaptive research (Annex 5). Thiscomponent of the project will be financed entirely by FAC/CCCE.

C. Organization and Management

SODECAO

3.18 The performance of ZAPI, which is presently responsible for agricul-tural development in most of the project area, has been spotty. In parti-cular, it has achieved little in increasing production and its marketingpolicies have proved unpopular with farmers. To implement the project,therefore, a new authority, Societe de Developpement du Cacao (SODECAO),has been established by Presidential Decree and would absorb, gradually andselectively, ZAPI's functions and staff.

3.19 SODECAO would be generally responsible for the execution of theproject and, in particular, for (a) extension services and the supply ofinputs and credit; (b) training courses for extension workers and farmers;(c) planning and controlling the improvement of rural roads; and (d) encourag-ing the formation of farmers' groups; SODECAO extension workers would livein the villages and would use mostly the collection centers and sector officesas bases to reach the farmers.

3.20 Other agencies would be involved, as follows: (a) LPAC would pro-vide the capsid spraying service; (b) FONADER would procure and provideSODECAO with the inputs to be supplied to farmers for cash or on credit; (c)DPR would execute the road improvement program; (d) the research institutes(IFCC and IRAT) would carry out the research. The Stabilization Fund wouldprovide controllers for the grading of cocoa at project markets.

3.21 SODECAO has a board of directors and senior management consistingof: (a) a General Director; (b) a Deputy General Director in charge oftechnical affairs; (c) a Marketing and Credit Director; (d) a Senior Inspectorresponsible for the progress and quality of project execution; and (e) aChief Accountant. Field activities would be guided by extension workers,marketing and credit agents.

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3.22 The Senior Inspector and Chief Accountant would be internationallyrecruited, and would possess qualifications and experience, and be employedunder terms of reference acceptable to Qvernment and the Bank. Assurancesto this effect have been obtained from Government. Government has already ap-pointed a General Director and a Deputy General Director in charge of tech-nical affairs both of whom are acceptable to the Bank. It would be acondition of loan effectiveness that Government had appointed a ChiefAccountant.

3.23 Assurances have been obtained from SODECAO that counterparts tointernationally recruited staff would be: (a) appointed no later than threemonths after commencement of the latter's employment with SODECAO; and (b)trained to take over in accordance with arrangements and a timetable satis-factory to the Bank.

Consultants

3.24 Consultants would be engaged by SODECAO for several purposes. First,about four man-months of consulting services would be engaged, on terms accept-able to the Bank, to develop a program for the integration of areas underZAPI jurisdiction into the project. Assurances have been obtained that thisprogram would be presented to the Bank not later than six months after loaneffectiveness.

3.25 Secondly, to learn about the impact of the rehabilitation componentof the project, consultants would be engaged to collect and analyse data overperiods of about three months a year during three years. After two years,sufficient data should have been collected for use in overall studies fora follow-up project which would start in FY 1977/78. The Bank has beenassured that consultants would be employed under terms and conditions accept-able to the Bank to carry out these studies as well as a feasibility studyfor the follow-up project.

Marketing

3.26 The project would sponsor the development of marketing cooperatives,thus building on the successful experience gained in a neighboring area undera UNDP sponsored program, CENADEC (Annex 6). Farmers located around 180collection centers would be encouraged to form groups of 100-150 members, andto elect a management committee. About 30-50 groups would constitute aprecooperative, with a Board consisting of delegates of the management com-mittees. There would be six precooperatives (one in each sector), each withits own storage facilities. Sector stores would be financed by the project.Collection center sheds would be built by the farmers with materials obtainedon credit from SODECAO. The main advantage of the new system, as detailedin para 8 of Annex 6, is the elimination of the dealer and his margin, whichis transferred to farmers who do their own grading, weighing and storage ofcocoa.

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3.27 SODECAO would initially enter into contracts with exporters forthe sale of project cocoa. Contracts would also provide for credit for schoolfees as at present (para 2.20). Cocoa purchases would take place at collec-tion centers by exporters on appointed market days. Intermediary's margins(CFAF 5/kg) and agreed quantity and quality bonuses (CFAF 3-4/kg) would bepaid by exporters to SODECAO. SODECAO would deduct the direct costs of market-ing and the repayments of credit for collection centers' storage shed mate-rials, and distribute the remainder to farmers as a year-end bonus. As pre-cooperatives were formed and obtained legal status, they would take over thesemarketing functions fron SODECAO. Government has assured the Bank that membersof the precooperatives would receive a year-end bonus to provide an adequateincentive to farmers to join the precooperatives.

D. Accounts and Audit

3.28 During negotiations, assurances were obtained that Government wouldcause SODECAO and FONADER to:

(a) keep records adequate to reflect, in accordance withconsistently maintained sound accounting practices,their operations and financial condition;

(b) appoint independent, qualified auditors acceptable tothe Bank;

(c) submit copies of their audited accounts, and the auditors'reports thereon to the Bank within four months of the endof each financial year; and

(d) cause the report of the auditors to be of such scope andin suciI detail as the Bank may reasonably request.

IV. COST ESTIMATES AND FINANCIAL ARRANGEMéENTS

A. Cost Estimates

4.01 Project costs over the development period 1974-80 are detailed atAnnex 7, and summarized below:

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CFAF Million US$ Million ForeignLocal Foreign Total Local Foreign Total Excang

SODECAO

(a) Administrative Staff 1,026 - 1,026 4.10 4 4.10 -(b) Expatriate Salaries 43 129 172 0.17 0.52 0.69 75(c) Buildings (Sector Office) 80 23 103 0.32 0.09 0.41 23

(d) Vehicles and Equipment 9 83 92 0.04 0.33 0.37 90(e) Collection Centers 61 15 76 0.24 0.06 0.30 20(f) Operation and Maintenance 187 130 317 0.75 0.52 1.27 41(g) Road Program 315 229 544 1.26 0.92 2.18 42

Sub-Total 1,721 609 2,330 6.88 2.44 9.32 26

TRAINING 274. 135 409 1.09 0.5h 1.64 33

PEST CONTROL 283 213 496 1.13 0.85 1.98 43

RESEARCH AND STUDIES 83 331 414 0.34 1.32 1.66 80

ON-FARMS INPUTS (Incremental)

(a) New Planting MaterialInsecticides 64 127 192 0.26 0.51 0.77 66

(b) Sinall Farm Equiprnent 32 43 80 0.13 0.19 0.32 60(c) Spraying and Fungicides 65 195 260 0.26 0.78 1.04 75

Total before contingencies 2,523 1,658 4h181 10.09 6.63 16.73 40

Physical Contirgencies 49 60 109 0.21 0.24 0.45 55Price Contingencies 991 660 1,651 3.96 2.6h 6.60 hO

Total Project Costs 3563 26 9.51 23.78 40

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4.02 The estimates are based on prices ruling at January 1, 1974. Theyinclude indirect taxes, amounting to about 5% of the total, but excludecustoms duties which have been waived by Government. Cost estimates include:

(a) a 5% physical contingency on investment costs for buildings,equipment, vehicles, operation and maintenance costs andon-farm costs during the six-year disbursement period;

(b) price contingencies: (i) for equipment, 14% in 1974; 11% in1975; and 7.5% compounded annually from 1976 to 1980; (ii) forcivil works, 18% in 1974; 15% in 1975; and 12%. compoundedannually from 1976 to 1980; (iii) for all other foreign costs,the expected international inflation rate, i.e., 14% in1974; 11% in 1975 and 7.5%O compounded annually from 1976 to1980; and (iv) for all local costs the expected nationalinflation rate, i.e., 10%' in 1974; 9.5% in 1975; 8.5% in 1976and 8% compounded annually from 1977 to 1980.

B. Financial Arrangements

4.03 The project financing plan, which was discussed during appraisalwith Government and representatives of the French agencies and FAC and CCCE,is summarized in the following table:

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------------------ US$ Million -----------------

FrenchProject Costs IBRD Assistance Governient Farmers Total

I. SODECAO

Ca) Administrative Staff) 2.78 - 2.01 ( 4.79(b) Expatriate Selaries ) ((c) Buildings O.41 0.41(d) Vehicles & Equipment 0.33 0.04 0.37(e) Collection Centers 0.26 0.04 0.30(f) Operation and

Maintenance 1.27 1.27(g) Road Program

Personnel 0.25 0.29 0.54Vehicles and3quipment 0.61 0.08 0.69

Operating andMaintenance 0.44 0.51 0.95

3l. TRAINING 1.64 1.64

Il!. PEST CONTROL o.65 1.33 1.98`

1V. RESEARCH AND STUDIES 1.66 1.66

V. ON-FARi4 INPUTS

(a) Planting Material.4 Insecticides 0.77 0.77

(b) Small Farm Equipment 0.32 0.32(c) Sprayers & Fungicides 0.78 0.14 0.12 1.04

Sub-Total 4.50 4.64 7.11 0.49 16.73Unallocated 2.00 1.86 2.97 0.21 7.05

Total 6.50 6.50 10.08 0.70 23.78

Percent 27 27 42 4 100

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4.04 The Bank would make a loan of US$6.5 million to Government for aterm of 20 years including a six-year grace period. This loan, together withthe financing expected from French bilateral sources would cover the foreignexchange cost of the project (about US$9.5 million), and US$3.5 millionequivalent of local currency expenditures. The proposed Bank loan, in parti-cular, would cover the foreign exchange costs of the items financed and thebalance of US$2.2 million, 48% of the local cost. With respect to the Bankloan, it is proposed that some US$150,000 of the proceeds of the loan be usedto finance, retroactively, the cost of expatriate salaries and other items,incurred before signing.

4.05 The terms and conditions of the finance to be provided by the Frenchagencies have not been finalized, but agreement has been reached in principle,providing for US$1 million equivalent as a grant by FAC and the remainingUS$5.5 million equivalent as a loan by CCCE at 3-1/2% annual interest for20 years, including a six-year grace period. A condition of loan effective-ness would be that the mentioned agreements have been concluded and thatany pre-conditions for initial disbursements of such financing have beenfulfilled.

4.06 Government would pass on to SODECAO, FONADER and DPR the proceedsof the Bank loan, together with the French funds and its own contribution tothe project, in the form of a grant. The grants would be:

(a) CFAF 4,625 million (US$18.7 million) (to SODECAO) to carry outthe technical aspects of the project, including pest control.Another CFAF 750 million (US$3.0 million) would be passed throughSODECAO to the Public Roads Department (PRD) for the roadcomponent.

(b) CFAF 350 million (US$1.4 million)(to FONADER throueh SODECAO)as a revolving fund to finance the credit program.

The balance, CFAF 225 million (US$0.7 million) represents farmers' contributions.These grants are justified. Governnent is expected to accumulate a surplusabout 50% greater than the sum of the three grants when the project has cometo its full development and therefore, on balance, the proposed grants wouldnot cause a drain on 'Government finances. The grants to SODECAO and PRDare justified on the grounds that neither of these agencies is intended tobe a revenue earning enterprise and the type of services they provide (tech-nical services and road construction and maintenance, respectively) arenormally financed by the state out of the general budget. The grant toFONADER would be an equity contribution, consistent with the well justifiedpolicy of Government to strengthen financially, as well as technically, thenew agricultural finance agency on which it wishes to rely hereafter toprovide the bulk of rural development credit (para. 2.14).

4.07 Adequate deposits have been made by Government into the accountsof SODECAO and FONADER.

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C. Credit to Farmers and Farmer Groups

4.08 Until the precooperatives function independently FONADER would dele-gate to SODECAO the responsibility for retailing credit to farmers under theproject through SODECAO's sector offices. To that effect, FONADER would makeavailable the inputs required annually to SODECAO at an interest rate of 5%,and at terms similar to those of SODECAO's credit to farmers. A subsidiaryloan agreement between FONADER and SODECAO would specify these terms and con-ditions. The Bank has received assurances from Governnent that it wouldcause the subsidiary loan agreement between FONADER and SODECAO to be satis-factory to the Bank; the conclusion of such agreement would be a conditionof loan effectiveness.

4.09 All credit would be given in kind (Annex 8). Credits to individualfarmers would be for fungicides (100% of cost) and sprayers (80% of cost).The amount of credit would average about CFAF 4,600 annually for each farmer.Credit to farmer groups (para 3.26) would be for the materials and equipmentneeded to set up collection centers, and would average CFAF 380,000 per group.Credit for fungicides would be repayable from the proceeds of the followingharvest; all other credit would be repayable over three years at maximum.Prices for items sold on credit would be about 20% higher than cash pricesin order to cover financial and administrative costs as well as to makeprovision for bad debts. Farm budgets (Annex 9) have been made on the basisof credit purchases, and show that expected earnings should enable farmersto pay these prices without difficulty out of the incremental cash surplusthat would accrue from their participation in the project.

4.10 Repayments of individual credits would be collected by Sector Officestaff at the time of produce sales at the collection centers and periodicmarkets. Repayment of group credits would be collected at the SectorOffices by deduction from the marketing margins received in respect of thecollection centers concerned (para 3.27).

D. Procurement

4.11 Items financed by the Bank Loan would be procured as follows:(i) one grader, thirteen passenger cars, and all two-wheeled vehicles havealready been ordered with Bank approval through negotiated purchases on thebasis of quotations from local suppliers, in order to facilitate the start-up of the project. These amount to US$150,000 and would be financed retro-actively; (ii) office furniture and equipment, and small spare parts wouldbe similarly procured; (iii) all other items, amounting to some US$3.5 mil-lion, would be procured in accordance with Bank guidelines on the basis ofinternational competitive bidding. Manufactured goods originating in UDEACcountries would be allowed a preference equal to the lower of (a) 15% or(b) applicable duties; (iv) the services of expatriate personnel and consult-ants would be secured according to procedures acceptable to the Bank.

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4.12 The French agencies would finance 100% of the cost of training, re-search and studies; 46% of the personnel and operations and maintenance costsof the road program; and 32% of the costs of pest control. The procurement ofitems for these activities would be subject to the procedures of these agencies.

E. Disbursement

4.13 Proceeds of the Bank loan would be disbursed to cover:

(a) 58% of the cost of SODECAO's administrative staff(US$2.80 million);

(b) 100% of foreign expenditures or 90% of local expenditureson vehicles and equipment for SODECAO administrative staffand for road construction equipment for DPR (US$0.94 million);and

(c) 100% of foreign expenditures on sprayers and fungicides(US$0.78 million).

Ile balance of US$2.00 million represents contingencies, which would beunallocated. A schedule of estimated disbursements is shown at Annex 9.

V. PRODUCTION, PRICES, MARKETING AND FINANCIAL RESULTS

A. Production

5.01 Under the project 35,000 ha of existing cocoa would be rehabilitatedby an intensified and more effective control of capsid pest and black poddisease. Annual yields are expected to increase from the present 300 kg/hato 500 kg/ha after two years of spraying. The 15,000 ha to be newly plantedare estimated to yield an average of 150 kg/ha in the fourth year rising to800 kg/ha in the tenth year after planting thereafter remaining at that levelfor 20 years. Tlese yields are considered relatively conservative since theyield potentials of the existing and new hybrid varieties, under normal goodhusbandry would be of the order of 1,000 kg/ha and 1,500 kg/ha, respectively.At full development in 1988/89, it is estimated that the project would producean increment of 15,400 tons of dry beans annually (Annex 10).

B. Markets and Prices

5.02 The world market price for cocoa is described in "The World CocoaMarket: Review and Outlook for Bank Lending" - February 23, 1974. Worldcocoa production is highly cyclical: there were short supplies and highprices in the 1950s and abundant supplies and low prices during the 1960s;

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current markets again feature short supplies and high prices. During 1973prices climbed to over USé8O/lb, compared with a low of USt17/lb in 1965.Growing conditions in West Africa have been generally poor in the last threeyears, and this has intensified the supply-depressing impact of limited in-vestment and abandonment of low yielding orchards following the low cocoaprices during the 1960s.

5.03 The average world cocoa price during 1973 was USt65/lb. CurrentBank forecasts are that supply and demand will both grow at about 3% perannum. Supply forecasts take into account expected production from ongoingand planned projects, including the present one; on the basis of these fore-casts a 1980 price of about USt47/kg, in average 1973-74 prices, has beenused in the economic and financial analyses in this report.

5.04 An International Cocoa Agreement (ICA) came into effect in mid-1973,covering three quota years to 1975/76. The purpose of ICA is to stabilizeprices in the 23-32 USe/lb range, through export quotas and buffer stocks.Of the basic 1973/74 quota of 1.51 million tons, Cameroon has been allocated129,000 tons, well above the average production of 110,000 tons during thepast three years. In view of current and expected price levels, it is unlike-ly that ICA will exert any significant constraint on cocoa production andexports in the medium term. It seems reasonable to conclude that Cameroon'smarket prospects are firm at least through 1980, and no difficulties areanticipated in selling the project's output.

C. Farmers' Benefits

5.05 Model farm budgets are presented at Annex 11. They are based onthe following assumptions:

(a) 100% credit for fungicides and 80% for sprayers atprices 20% higher than cash prices (para 4.09); and

(b) production of 90% Grade I and 10% off-grade cocoa, atproducer prices of CFAF 100/kg and CFAF 65/kg, respectively(actual 1973-74 campaign prices);

(c) yield as specified above (para 5.01);

(d) grants for seeds, bags, and other nursery materials forfarmers undertaking new planting.

5.06 Three types of farmers can be considered. Model A is a farmer with1.2 ha of mature cocoa which is maintained in the traditional manner witheither inefficient pest and disease control or none at all, and who rehabil-itates his farm under the project and continues efficient pest and disease

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control thereafter. Model B is a farmer similar to Model A but who, were theproject not to be implemented, would plant an additional 0.6 ha in the tradi-tional manner, but with improved planting material. With the Project, andthrough the services it would provide, the Model B farmer is exDected to re-habilitate his mature cocoa, and in addition plant more cocoa than he other-wise would (0.75 ha instead of 0.6 ha), using not only improved plantingmaterial but improved techniques as well. The Model C farmer is a youngmember of the family of existing farmers who would plant cocoa for the firsttime under the stimulus of the project. Tne 'Model B comparison has beendeveloped on the grounds that some new cocoa planting would take place withoutthe project, and that it would be incorrect to assume that the production ofsucli plantings would be a project benefit. The three models are summarizedbelow:

Iloodel Without Project With Project

Existing farmer A 1.2 ha unrehabilitated 1.2 ha rehabilitated onlyExisting farmer B 1.2 ha unrehabilitated plus 1.2 ha rehabilitated plus

0.6 ha new planting 0.75 ha new plantingNew farmer C 1.5 ha new planting only

For existing farmers, net revenues from cocoa are expected to increase byabout 70%, reaching CFAF 52,000 (US$208) for Model A and CFAF 106,000 (US$424)for Mlodel B. Mandays of labor roughly increase in the same proportion as netrevenues, and thus the return per manday employed would be about CFAF 490 withthe project, only slightly more than the CFAF 450 without the project. The newrate is almost double the going agricultural wage rate of CFAF 250/day. Fornew planters, net revenues of about CFAF 105,000 (US$420) are expected at fulldevelopment, equivalent to CFAF 515/manday employed. New planters would sus-tain thenselves and meet the small cash expenditures required until theirplantings became productive by growing their own food crops and/or working ontheir parents' farm.

D. Government Revenues

5.07 Government would derive revenues from taxes and Stabilization Fundsurpluses on incremental project production. Taxes consist mainly of exportlevies, at a rate of 27.25% on an arbitrary value of CFAF 125/kg, or CFAF34/kg. On nonexport cocoa, sold for domestic processing, the tax rate is45% of the export levy, or CFAF 15/kg. The Stabilization Fund benefits fromcocoa export revenues whenever world market prices exceed guaranteed producerprices plus export costs. At the assumed world price of USt47/lb (CFAF 260/kg),and a producer price of CFAF 100/kg for export grade cocoa, the StabilizationFund's surplus would be about CFAF 75/kg. The Government cash flow (Annex 12)shows that Government.would have a net inflow from PY 4 onwards, reachingCFAF 1.2 billion (US$4.8 million) at full development (PY16).

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VI. ECONOMIC BENEFITS A1D JUSTIFICATION

6.01 The main economic benefit of the project would be an increase incocoa production. The value of this incremental production is expected toreacli CFAF 1.3 billion (US$5.2 million) in 1979/80, rising to CFAF 3.1 billion(US$12.4 million) annually at full development by 1988/89. In this and sub-sequent years, about CFAF 1.6 billion (US$6.4 million) would accrue annuallyto some 32,000 farm families (para 5.06), and CFAF 1.5 billion (US$6.0 million)to Government in the form of export taxes and Stabilization Fund surpluses.At full development, net foreign exchange earnings of about US$10 millionare expected annually.

6.02 The economic rate of return (Annex 13) is estimated at 26 percentusing market prices. Increases of 10 percent and 25 percent in costs (orsimilar reductions in benefits) would reduce the rate of return to, respec-tively, 23 percent and 19 percent; a 25 percent increase in costs togetherwith a 25 percent reduction in benefits would lower the rate to 12 percent.

6.03 Since total control of black pod is very difficult to achieve, theeffect of a serious shortfall from project targets for this component of theproject has been calculated. This shows that if only about one third of theexpected benefits from rehabilitation were obtained, the rate of return forthe project would still be 10 percent. Tle risk of such a shortfall is con-sidered to be small, particular1Wr since the average increases on yields havebeen conservatively estimated.

6.04 The rate of return has been conservatively calculated in otiier re-spects, since the project has been charged with the entire cost of:

(a) the rehabilitation of rural roads, while no accounthas been taken of the benefits accruing to nonprojectactivities, such as food crop and general goods marketingand nonproject cocoa marketing; and

(b) the research and studies, althoughl benefits from theseactivities would accrue to subsequent development.

Excluding the cost of these components, the economic rate of return would be35,'.

6.05 Rates of return have been calculated for the rehabilitation andnew plantings components separately, althouglh allocation of project agencycosts is necessarily arbitrary. The rates are 32% for rehabilitation and20% for new plantings.

6.06 As indicated above (para 6.01), farmers and Governnent will shareabout equally in expected benefits. Tne large Government share is consideredto be justified, as it would be an important source of funds for programs to

- 24 -

help rural people in less favorably endowed regions, particularly in the North.Tle improvement of agricultural institutions, training of local techniciansin advanced cocoa technology and extension, and encouragement of farmersassociations would permit an expansion of the project concept throughout thecocoa growing area.

VII. RECO MIENDATIONS

7.01 During negotiations assurances were obtained on the followingprincipal points:

(a) in the event that producer prices were to jeopardizethe project, consultations on this subject would beheld between Government and the Bank (para 2.19);

(b) with regard to road imorovements (para 3.16):

(i) an annual program of project road improvementwould be agreed with the Bank;

(ii) all equipment purchased under the project'sroad program would be used and retained in theproject area; and

(iii) the project's roads would be adequately maintainedafter the project has been completed.

(c) members of precooperatives would receive a year-end bonusto provide incentives to farmers to join the precooperatives(para 3.27);

(d) Government would exempt all project items financed throughthe Bank loan from import duties (para 4.02).

(e) Government would cause the subsidiary loan agreement betweenFONADER and SODECAO to be satisfactory to the Bank (para 4.08).

7.02 Assurances were also obtained from SODECAO that:

(a) no later tian six months after credit effectiveness, SODECAOshould have ready a comDrehensive training program includingdetails of the curricula, phasing of courses, staffingrequirements and budget (para 3.13);

(b) appointment of internationally recruited personnel would beon qualifications, experience and terms acceptable to theBank (para 3.22);

- 25 -

(c) Cameroonian counterpart personnel would be appointed to theinternationally recruited experts not later than three monthsafter commencement of the latter's employment with SODECAO,and be trained to take over in accordance with arrangementssatisfactory to the Bank (para 3.23);

(d) consulting services would be engaged, on terms acceptableto the Bank, to outline and phase an integration programfor the areas under ZAPI jurisdiction; and that thisprogram would be presented to the Bank not later than sixmonths after loan effectiveness (para 3.24);

(e) consultants would be employed to carry out studies ofthe project's impact, and a feasibility study for afollow-up project, which would start in 1977/78,under terms and conditions acceptable to the Bank (para 3.25).

7.03 Conditions of effectiveness of the loan would be that:

(a) Governnent had appointed a chief accountant (para 3.22);

(b) the supplemental FAC Agreement and supplemental CaisseCentrale Agreement have been validly concluded and theconditions precedent, if any, to initial disbursementsunder said agreements have been fulfilled (para 4.05);

(c) Government had made the initial deposits into the accountsof SODECAO and FONADER of CFAF 100 million (US$0.40 million)and CFAF 50 million (US$0.20 million), respectively (para4.07); and

(d) the subsidiary loan agreement between FONADER and SODECAOhad been concluded (para 4.08).

7.04 The project is suitable for a Bank loan of US$6.50 million.

ANNEX 1Page 1

CAMEROON

OOGOA PROJECT

PEST AND DISASE CONTRDI

A. Fe&t Control

Introduction

1. Capside damaging the côcoa is the only pest that needs to be controlled.Since 1962 a special agency (LPAC)V/ of the Department of Agriculture is respon-sible for the control of capsids. The organization is based at Nkôloisson(Yaounde) where offices, stores and garages are located. LPAC has besides a ner-manent staff of clerkse, drivers and mechanics, alo temporary personnel during thespraying season. It orns a fleet of 50 vehicles for the transport of sprayingequipment, materials and mechanics. The activities are paid for by the Caisse deStabilization. In capside control the following procedures is used.

Estimation of Caosid Population

2. In different parts of the cocoa zone, insect populations are estimatedon representative cocoa famis which are selected at random. When the capsidnoiulation exceeds 0.7 adult per tree, the test result is considered Dositive andspraying is required. Based on these test results, an operation plan is made andnaterials and equipment are sent to areas to be treated. At present, insect countsare made at a density of one per 3,000 ha.

Insect Treatment

3. The spraying is carried out by groups of farmers with the assistance ofLPAÛ mechanices. The best spraying neriod is between July and October when theinsect population starts to build up. Tvo soraying rounds at an interval of 25 to35 days are needed. In the first treatment, adults and larvae are killed and inthe second one the young insects, which bj then have eierged from the eggs thatwere not affected by the previous spraying. It is estimated that at present about50% of the cocoa area is annually sprayed by VIAC. A centrally organized capsidcontrol is necessary because spraying by individual farmers will be ineffectivewhen neighboring fanms are not treated simultaneously. However, the drawback ofcentra1ly spraying programs îs that, when the organization is too big, sorayingprograms are carried out too late, areas zre sprayed where test result3 were negativ%e,and supervision is difficult. This general. experience apolies also to rLPACe whichis too big to work effectively.

Capsid Control under the Projoct

4. Under the project the LPAC orgarkization wîll be decentralized. '?ach sectorwill have its ovn spraying unit, while two sectors wili have one team to estimatecapsid populations. To achieve this the following orocedure le proposed. When asector is placed under SODECAO this authority beoemes resDonsibie for the capsid

1/ Lutte Phyto Sanitaire et anti-Capside

ANNEX 1Page 2

CU4-lIriL in all cocoa farms in that sector. The sector level spraying unit willlrive ite own transport and mist blowers. The transport consists of one 3.5 tontruck; dur.ng the three months' spraying campaign, the truck of the sector office canaiso be used. In addition, the large sectors like Mengueme and Zoetele can obtaina 3 ton truck from the car pool of SODECAO. There will be one mist blower per 250ha of cocoa to be sprayed ainually. These mist blowers can spray 3 ha/hour; and whenthey are used effectively 2.5 - 3.0 hours a day, an area of about 250 ha can besprayed in 30 days. When the first spraying round is completed the second one shouldstart immediately. The personnel consists of a driver and one mechanie per five mistblowers; the technical officer of the sector office is responsible for tne operationof this team. Âs in the present situation, LPAC transport will bring the mechanicswith their equipment and insecticides to the farms while the spraying itaelf iscarried out by groups of farmers.

5. A "testing" team consists of one team leader, one drivEr and six laborers.The team has one four-wheel drive truck and two hand spraying pumps. Trees insmall areas (not exceeding 0.25 ha) are snrayed in selected farms; then the deadinseets, collected on sheets underneath the trees, are counted. Based on theresults of these counts, a decision is made whether or not the area should be sprayedagainst capsid. One team can do four test a week, meaning that in tha 10 weekspreceding the capsid spraying season 40 tests can be made (per team). In areasvarying in size from 20,000 ha to 30,000 ha, insect counts can be madez at a densityof one count per 500 - 600 ha. When capsid damage is observed, in areas which arenot scheduled to be sprayed (based on capsid counts), farmers concerned will performspraying on an individual basis.

B. Disease Control

Introduction

6. The first black pod control scheme was financed by USAID and carried outin 10 zones of 500 ha each, with only selected farmers and extension staff parti-cipating. Results were satisfactory, and in treated farms yieids of 800 to 1,200kg/dry beans/ha were obtained.

7. In the period 1967-70 a FAC-financed campaign was carried out in 8,50oha of cocoa. Under this scheme fungicides and spraying equipment were made avail-able on credit at subsidized prices. Results of this camnaign indicated thatfarmers were able to protect their crop effectively by the use of fungicides andthat credit could be readily recovered where enough extension staff and good marketingfacilities existed. It was, however, observed that in the course of the program thefungicide consumrption went down, the main reasons being that the price margin betweenGrade 1 and "hors standard" cocoa was too narrow to encourage farmers to carry outa full spraying program.

b. At present a scheme of the Department of Agriculture is in operation whichgives fungicides and spraying machines on credit to groups of farmers. The creditsfor fungicides have to be reimbursed annually and the credit for the spraying equip-ment over a two-year period. It is thought that improved black-pod control, despitethe shortcomings of the varîous schemes, has largely contributed to the 20,000 tonsincrease in cocoa production observed over the four year Deriod 1966/67 to 1970/71.

ANNEX 1Page 3

9. Thder the project, control of black-pod disease would be a major activityof tbe extension service. Since black-pod control is an individual exercise, itis the extension worker vho has to convince the farmer that he should spray correctly.`ICorrecty"II means mainly that five to six sprayings are also necessary in the rainyseasori, apart of the six sprayings in the dry season. Significant re3ults can beobtained only if a full spraying program is carried out. In addition to a convictionthat a full spraying program is necessary, the farmer should be able to have thefungicides on time and his sprayer in working condition. Hence, the supply of fung-îcides and spare parts for the sprayers is critical; the organization should be suchthat the farmer should be able to obtain the necessary means for black-pod controlat the collection center where he sells his produce.

CAMEROON

COCOA PROJECT

FIELD DEVELOPMIENTS

Number of Farmers and Corresponding Areas -

Year Number of Farmers Entering the Project for: Corresponding Areas (ha) Entering the Project

Rehabilitation Rehabilitation 2/ New Plantings 3/ Total Rehabilitation New Plantings Total Areaonly and only

New Plantings

1974-75 _ 5,000 600 5,600 6,000 - 6,000

1975-76 - 6,500 600 7,100 7,000 1,550 8,550

1976-77 1,500 4,500 800 6,800 7,000 3,475 10,475

1977-78 6,000 - - 6,000 7,000 5,000 12,000

1978-79 6,500 _ 6,500 8,000 3,450 11,450

1979-80 _- - - 1,525 1,525

Totels 14,000 16,000 2,000 32,000 35,000 15,000 50,000 x

1/ All figures are rounded off.2/ Total area per farm = 1.2 harehabilitation+ 0.75 ha Qf nfw plAntings.The new plantings to be carried out in three years: 0.25 ha/year.3/,' Total area per farm = 1.5 ha. To be planted in three years: 0.5 ha/year.

CAMEROON

COCOA PROJECT

FIELD DEVELOPMENTS

Establishment of New Plantings

year of . _ _entrance number of persons enter- area (ha) to be planted in:in project ing the project

Existing Newfarmers farmers 1975-76 1976-77 1977-78 1978-79 1979-80

1974-75 5,000 _ 1,250 1,250 1,250 - -

1975-76 6,500 - 1,625 1,625 1,625 -

1976-77 4,500 - - 1,125 1,125 1,125

subtotal 1,250 2,875 4,000 2,750 1,125

1974-75 _ 600 300 300 300 - _

1975-76 _ 6°° - 300 300 300 -

1976-77 800 - - 400 400 400

subtotal 300 600 1,000 700 400

Total 16,000 2,000 1,550 3,475 5,000 3,450 1,525

Cr1

CAMEROONCOCOA PROJECTFAR LADOR

Available Labor (per average famiXy) for Cocoa Cultivation in Pro.ject Area(Mandays)

------------------------------------MonthS-------------------------------------------

District Total S.O.N.D. J F M A MY J Jy Au

Menguém6é hlO 218 24 2h 24 24 2h 24 2h 24

MLou 511 271 30 30 30 30 30 30 30 30

Ngoumou 368 192 22 22 22 22 22 22 22 22

Nyong and Kellé 544 2&8 32 32 32 32 32 32 32 32

Zoétélé 478 251h 28 28 28 28 28 28 28 28

Ndom 41 i 218 24 214 24 24 24 2h 24 24

t>Cr

CAMEROON

COOOA PJ4DJECT

FAHU LAEOR

Labor per ha of newly planted Cocoa

(mandays)

Year Items Total Sept. oct. Nov. Dec. Jan. Feb. Mar. Apr. May June JulY Aug.

1 Nursery 48 18 5 5 5 5 5 5

Clearing 84 28 28

Lining & brushing 20 20

Holing & planting 40 20 20

Maintenance 20 20

212 18 5 5 33 33 33 25 20 20 20

2 Maintenance 48 12 12 12 12

Filling in 6 6

Shade managesent 15 5 5 5

Insect control 8 2 2 2 2

77 18 2 12 2 17 5 7 12 2

3 Maintenance 48 12 12 12 12

Shade management 15 5 5 5

Insect control il 2 2 2 3 2

74 12 2 12 2 17 5 7 12 3 2

10 Maintenance, insectcontrol 21 7 2 7 3 2

Black pod control 35 10 10 7 8

O Harvesting, yield

processing 1/ 80 10 30 30 10

136 27 40 30 10 2 7 7 8 3 2 H>

1/ Based on yield of 800 kg dry beans/ha

CAMROON

COOOA P1DJECTFAR( LAER

Labor Requirements for Cocoa Cultivation (Mandays)

-.-_______________------------- Months -----------------------------------------------------

1.2 ha Rehabilitatifn and 0.75 ha New Plantings

1.2 ha rehabilitation campleted Y1115 86 _ 2 7 - 7 8 3 2

0.25 ha year 1 52 15 8 8 ( 5 5 5 - -

" " " 2 19 8 - - 4 1 2 3 - 1

" " "3 19 7 - - 4 1 2 3 1 1

Total 20E 11 8 10 21 7 16 20 4 4

1.2 ha rehabilitation completed 1115 86 - 2 7 - 7 8 3 2

0.75 ha in full production / 103 R1 _ 2 5 - ; 2 2

Total 218 167 - 4 12 _ 12 1h 5 4

1/ Yield 500 kg dry beans/ha.2/ "n 800 " " " ,,

>f!

a

ANNEX 4Table 1

CAMOON

COCOA PLDJECT

Improvement and Maintenance of Rural RoadsList of Roads

Km

Pirst Priority

1 Ossoessam Minlaba Mfida 22

2 Ngodmedzap Nkolmeyang 14

3 Akongo II Ossoessam Bikoko 12

4 Endengue Nkout 14

5 Nkout Ngoumou 8

6 Mfou Nkllzok I 7

7 Nkilzok II Mbanga 16

8 Nkilzok I Ekombitie 23

9 Nkilzok I Nsimalen 9

10 Fegminbang Zoaseel Ngoumou I 28

il Mgoumou I Ebang 5

12 Ebang Bikok 10

13 Bikok Nkongnen 18

1h Otele Nkoulmakong Koali Oveng 29

15 Otele Bilik Nkolnlong III 25

16 Nkongnen Xvindisst Andok 24

17 Ebolowa Ntoum Ba 26

18 Nkolbang Zoetele 12

19 Zoetele Nkoudmadjap Nkolfong 18

2Q Nyaho Pentome Nyanon Likoundbian 50

370

ANNEZ 4Table 1

(cont.)

Second Priority Km

i Ekoudendi Assie Bilon Ossoessam * 35

2 Nbabewa Akongo III 19

3 Meadan Endengue Sep Akoeman *Akom Ngourema Kong 65

4 Mfou Ngang Ovam Ekom 21

5 Ngombas I Bakoukoue Leplibong Nkolnlong III 16

6 Nom I Sep Ngoungou Mbeng Nkolnlong III 18

7 Bot Makak Nkongngok So MakayEtale Nkolekotoing Mabobol Elekoum 77

8 Bot Nak Egba Nkolekotsing 37

9 Egba Elekoum Lobo Mefomo 39

10 Ngoulemikong lEsingang Btwong Bane * 38

1il Essingang Mekamba Minlaba * 12

12 Biwong Bane Melangue I * 16

13 Biwong Bane Minkam Nkongnen Nkolmeyang * )Melangue I Ngalan ) 37Minkam Atinezam Elon )

14 Meyiboto Ebotenkou Elon Ngoulemakong 62

15 Nkolfong Oveng * 9

16 Zoetele Ebamina Nkilzok Ndele Zoetele 49

17 Nyabo Bodi Knom 30

580

* Roadt which vere improved by the Stabilization Funds.

Source: Consultant's report.

ANNEX 5Page 1

CAMEROON

COCOA PROJECT

Research

Cocoa Program

1. Considering that the second phase of the project will be extended todensely populated areas, much of the new cocoa will be planted either on land clearedfrom cocoa (replanting), on land under bush fallow, or in between existing cocoa(interplanting). When forest land is still available, cocoa will be established incombination with food crops, this being a common practice. The problems con;iectedwith these various types of establishment have to be studies. The use of !ertilizersshould also be studied because, after the black-pod problem has been solved, thenext facto 1/lJJting cocoa production (especially in replanting) is the low soilfertility.- The factor shade has also to be taken4into consideration: firstly, becauEeof the interaction between effects of shade and fertilizers; and secondly, becausethe question of whether or not densely-spaced hybrid cocoa needs permanent shade hasnot been solved. The experimental program is schematically presented in Table 1.

2. All trials are multilocal and vill be laid down on farmers' land. One ort.wo factorial fertilizer experimentals will be included in the program to obtaindetailed information on fertilizer requirements. In view of predominant importanceof black-pod disease, too little attention has so far been paid to soil fertility.The program will be carried out by IFCC under a special agreement with SODECAO.The Production Director of the project will be responsible for the liaison betweenSODECA and IFCC.

Food Crop Program

3. The Cameroonian cocoa farmer always grows food crops in addition to cocoa.These food crops are almost exclusively used for home consumption; only near thelarge cities, like Yaounde, are food crops also grown for the market. Food cropproduction takes place in the extensive manner of shifting cultivation. Land iscleared from forest and food crops are grown for two or three years. Then, asfertility becomes depleted and pest and disease incidence increases, the site isabandoned and a new clearing is made at a different location. This method is waste-ful with respect to land, time and labor.

4. mhe proposed research program is aimed at studying the possibilities ofmodernizing food crop production so that more food crops can be grown on less landand with less labor, so that more family labor can be devoted to cocoa cultivation.So far no research has been undertaken on food crop production in the cocoa zoneof Cameroon.

1/ Moreover, the high yielding hybrid varieties will have a higher demand fornutrients than the traditional cocoa.

ANNEX 5Page 2

5. The program will concentrate on:

I. Improvement of planting materials and cultivation methods.

(a) Collection, selection and comparison of clones (plantains,cocoa yams, yams and cassava);

(b) multiplication and cultivation technique of tuber crops;

(c) testing of maize and grouadnut varieties, selected elsewhereunder conditions of the forest zone. Improvements of culti-vation methods (sowing dates, densities, crop protection,storage).

II. Fertilizer use for food crops grown as monocultures or in associationwith other food crops or cocoa on different soil types.

III. Study of production systems (technical and socioeconomical aspects).

The program will be carried out by IRAT under a special agreement with SODECAO. IRATwill also contribute to the food crop aspect of the cocoa research program. As faras possible, IRAT will nake use of the results obtained by IITA Ibadan (Nigeria) andof those obtained elsewhere in West Africa, under comparable conditions.

CAME ROON

C CO, PROJECT

Research Prozram For Go-p

Experiment Wfthout Permanent Shade With Permanent Shade Plot Size No. of TotalWithout With Without With (ha) replicates Areafertilizer ferti;lizer fertilizer fertilizer

Planting Cocoa on land previously Coeoa, replanting + + + + 0.25 24cropped with: ,__

Cocoa, interplanting _ _ + + 0.25 24 72

Food crops followedby bush fallow, New planting + + + + 0.25 24

Planting COcOa on land cleared Cocoa, plantain and grounoanuts + + 0.25 12 18from forests combined wtthfood crops

Cocoa. plantain, groundnuts and + + 0.25 12cacao vams ._ _ .

Cocoa, 'lants;n, oro,iwinlltq .md Mai?e + 0.25 12

Interplanting of widely spaced young cocoa with new hybrids (observation plots) 0.5 6 3

NPKCaMg Factorial fertilizer experiments 7

AN%TEX 6?'axe 1

CAMEROON

COCOA °ROJECT

Marketing

Introduction

1. Cameroon has two marketing systems for cocoa which are basically different-in the Fnglish-sDeaking part of Cameroon, a marketing board buys and exports cocoaunder monopoly; in the French-speaking part, an autonomous agency, the Caisse deStabilisation, controls (inefficiently) the transactions of private dealers andexporters. Since the project area is in the francophone part of Cameroon, the marketingboard is not discussed here. There exist in the francophone 'art two systems whichmight be called the conventional marketing system, and modifications to this conven-tional system in the part of the project area presently served by ZAPI. A marketingsystem is proposed under the project which is somewhat different from these existingsystems. These marketing systems are schematically compared in Table I.

The Conventional Marketing System

2. Theoretically, the farmers bring their cocoa to a market which is periodi-cally held as determined by the administration. The cocoa is graded into Grade I,Grade II or off-grade by Caisse de Stabilisation representatives, according to thenumber of defective cocoa beans in samDles taken. Dealers, who work in turn forlicenced exzorters, weigh the cocoa and oay the Government guaranteed orice, whichwas fixed at the beginning of the harvest season by the "Caisse". In 1973/74, theguaranteed price was CFAF 100/kg for Grade I, CFAF 75/kg for Grade II, and CFAF 65/kgfor off-grade.

3. Each licenced exporter has an alloted export quota (tonnage). The exporterarranges transport to Douala and Kribi, presents his consignments for quality in-spection and weighing, conditions beans where necessary, and arranges for shipment.He is free to export his quota on the world market through his own channels; butthe Caisse has power to sell on its own account -part of the cocoa held by the exporter.The exporter is allowed a predetermined handling charge and commission. He eitherpays to or receives from the Caisse the difference between the market price obtainedand that paid to farmers.

4. Only Grade I is exported. A local plant buys Grade II and off-grade at GradeI Sarket price and processes it into products such as cocoa butter, cake or paste.The plant receives a reimbursement fixed by decree from the Caisse and the exporters.

5. This marketing system has many loopholes, and only the two major ones arementioned here. On the periodical market, the most serious loophole is that thefarmerts cocoa may be undergraded and underweighted dué to "good cooperation" betweengraders, dealers and administrative representatives. The second loophole is thatmany dealers go directly to the farmers' homes to buy cocoa, out of reach of any

A.NNEX 6%age 2

official control, and these dealers often make farmers dependent on them by providingcredit during the lax period of the year or giving small "presents". To eliminatesuch dependence, the Government started some quasi=cooperative movements under theZAPI and later on under OENADEC which ooerates outside the project area.

Marketing in the ZAPI Area

6. The ZAPI, which started operations in 1967 and gradually extended itsarea of responsibility, brought forward the following major changes of cocoa marketingin its area:

(i) organized farmers into groups, a representative of which whould weighthe cocoa during the sale;

(ii) imposed a cocoa sales monopoly on its area; and

(iii) attempted to buy all cocoa produced in the project area.

As a result of their participation in the sales process, the farmers in general havebeen more accurately reimbursed than before. However, since the ZAPI retained thedealerts mark-up to finance its marketing and production activities, the positionof the farmer has not been substantially improved. Also the establishment of thesales monopoly created discontent among farmers, particularly since the ZAPI initiallyhad difficulties in obtaining campaign credits and consequently could not pay farmerson time. Moreover, the ZAPI's marketing activities seem to have been at times some-what inefficient.

7. For the 1973/74 campaign, the ZAPI obtained exporter status and since otherexporters are expatriates, became the first entirely Cameroonian cocoa exporter.

Proposed Marketing

8. The project wiould attempt to foster a cooperative movement in the projectarea, by supporting existing movements in the ZAPI part of the project area and bystarting such movements in the other part of the project area. The marketing systemproposed is a modification of the system pract1-ced in the ZAPI area and has beentried out with reasonable success by CENADEC outside the project area. The majorfeatures of the proposed marketing system are:

(i) elimination of the dealer in the conventional chain of farmer-dealer-exporter, by extending the farmerls and exporter's marketing functions,and providing guidance and coordination of marketing activities bySODECAO;

(ii) farmer's participation in transport to grouping center, grading, weighingand storage of his cocoa;

(iii) improved remuneration of the farmer by paying him the dealer's farmermargin, in recognition of his extended responsibilities, after dedactionof SODECA's costs for guidance and coordination; and

ANNEX 6nage 3

(iv) the monopoly in the ZAPI project area would be maintained, but in thenon-ZAPI project area there would be no initial sales monopoly (which,however, may be instituted at a later date).

9. The institutional arrangement would be as follows. First, 100-15O'farmerswould form groups, so that:

(a) the maximal distance of each farmer from the grouping center is 4-5km; and

(b) the minimum quantity sold during each marketing is h-5 tons; eachfarmers, group elects a management committee consisting of fivemembers, and the members of the management committee would be trainedfor about one week in the administration of a farmer group.

Second, about 30-50 farmer groups would constitute a DrecooDerative (there would besix precooperatives); each cooperative would have a board consisting of delegàtesfrom management committees. Third, each precooperative would sign a contract witlan exporter who would:

(i) make cash advances to farmers who have to pay school fees for theirchildren just before harvest;

(ii) provide bags to the farmer;

(iii) send a cashier with adequate money to each market held at the groupingcenters; and

(iv) assure transport of cocoa from the grouping center.

Fourth, the farmer groups would construct in each center cocoa storage facilities,and buy balances and manual transport of cocoa to the grouping center4

10. The actual sales operation would take place as follows. One or two daysbefore the market, farmers bring their cocoa to the grouping center and, under thesupervision of the management committee, pregrade and weigh their cocoa. The cocoais then stored separately for each farmer by grade. On the market day, a salescommittee -- consisting of the exporterts cashier, an official grader from the Caisseand a secretary from the precooperative -- vertifies the work of the management coDi-mittee and pays the farmer the fixed guaranteed price with funds provided by theexporter, after deduction of any debts of the farmer (the debt amount is paid directlyto the secretary of the precooperative). The sales documents are centralized at theprecooperative center. The exporter takes further care of the cocoa transport fromthe grouping center, where some farmers may help him (against remuneration), load thecocoa on the trucks). The exporter pays the dealer's margin -- consistilg of theintermediary remuneration, the bonus for quantity, and the bonus for quality -- tothe precooperative. The precooperative in turn distributes this amount to the farmers,after deduction of its own costs.

ANNEX 6Page 4

11. The proposed marketing system has two clear advantages for the farmer:it gives him good control over the sale of his cocoa, and higher remuneration perkilo of cocoa. On the other hand, the farmer has to work more, to the extent thathe has to,transport his cocoa to the grouping center, and he has to take part in thegrading and weighing of his cocoa. It is expected that the higher remunerationwill outweigh the additional work, and therefore the new system would constitute animportant incentive for the farmer to join the project.

CAMEIDON

COCOA PMJrECT

NARMETD«

MARKET:TING SYSTEMS IN RMNCOPHONE CAC.EROON

COINvrErrIONALOfficial Unofficial ZAPI CENADEC Project

Transport to Marrket

1. Transport ta period-ical market farmer dealer Zapi/farmer farmer Same as in

2. SaleCENADEC,

Pregrading farmer/manage-ment conmittee except:

Representive ofGrading CaisstabL/ dealer Caisstab Sales (C-aisstab

Committee(Weighing dealer dealer farmers' repre- (Precooperative

sentative (Payment dealer dealer Zapi (ExporterContro' representative - Sales Comnwittee Sales Committee

of admini-stra tion

3. Monopoly Requested - Immedia.tely After three years 3. Maintenance ofand Obtained monopoly sugges-

ted in areas4. Storage Facilities dealer/exporter dealer/ Zapi Farmer groups/ where monopoly

belonging to exporter exporter presently exists.No monopoly in

5. Transport to nearest dealer/exporter dealer/ Zapi Exporter other areas.larger city & port exporter

6. Export exporter exporter Zapi Exporter

1/ Caisse de Stabilisation.

Ta-ble i

CAMEIDON

OOCOA PDOJECT

PROJECT COSTS(CFAF'000)

PY 1 FI 2 PY 3 FT 4 PY 5 PF 6197V75 1975/76 1976/77 1977/78 1978/79 1979/1980 Total

I. MTTCAD

a) Administrative Staff

Headquarters 46,275 46,500 149,075 514,125 43,125 43,125 282,225Sector Offices 28,400 56,800 85,200 85,200 85,200 85,200 426,000Extension Services 16,077 39.011 63.120 71,220 71,220 57,360 318,008

Sub Total 90,752 142,311 197,395 210,545 199,545 185,685 1,026,233

b) Expatriate Salaries 51,248 43,735 43,735 19,312 14,050 - 172,080

c) Buildings (Sector Offices) 34,200 34,200 34,200 - - - 102,600

d) Vehicles and Equipaent

Headquarters 14,150 1,750 1,750 9,650 1,750 1,750 30,800Sector Offices 9,000 9,000 9,000 9,000 9,000 9,000 54,000Extension Services 1,125 1.295 1,245 1,575 1,295 1.095 7.630

Sub Total 214,275 12,045 11,995 20,225 12,045 11,845 92,430

e) Collection Centers

Buildings 5,100 5,100 5,100 5,100 5,100 5,100 30,600Vehicles and Equipment 7.500 7,500 7.500 7.500 7.500 7.500 45.000

Sub Total 12,600 12,600 12,600 12,600 12,600 12,600 75,600

r) Operation and Maintenance

Headquarters 22,67h 22,636 24,186 22,155 22,155 17,340 131,147Sector Offices 7,530 16,590 25,650 27,180 27,180 27,180 131,310Extension Services 2,065 4,438 6,751 7,681 7,681 6,168 34,784Collection Centers 750 1.755 2,760 3.765 4,770 5.775 19.575

Sub Total 33,019 45,419 59,348 60,781 61,786 56,463 316,816

g) Road Program

Persornel 2,700 26,400 26,400 26,400 26,400 26,100 134,700Vehicles and Equipnent 105,850 13,200 13,200 13,200 13,200 13,200 171,850Operation and Maintenance 1.400 _47200 47.200 47.200 47,200 47200 237__400

Sub Total 109,950 86,8oo 86,800 86,800 86,800 86,800 543,950

II. TRAINING CENTERS

Personnel 49,907 45,485 48,585 13,850 13,850 13,850 185,527Buildings 50,55D 18,100 18,100 - - - 86,750Vehicles ard Equipmant 15,340 3,300 3,300 2,520 300 300 25,060Operation and Maintenance 20,722 21,038 23.293 15,663 15,663 15,663 112.0042

Sub Total 136,519 87,923 93,278 32,033 29,813 29,813 409,379

III. PEST CONTNOL

Personnel 14,300 7,600 11,650 11,650 11,900 12,400 59,500Vehicles and Equipment 36,482 50,725 78,188 72,735 76,227 87,926 402,283Operation and Maintenance 2,300 4.600 6,900 6,900 6.900 6,900 34,500

Sub Total 43,082 62,925 96,738 91,285 95,027 107,226 496,283

IV. RESEARCH AND STUIIES 79,578 65,377 60,889 89,672 79,231 39,532 414,279

V, ON FANM INPUTS

New Planting Materialand Insecticides 31,322 49,410 55,o60 30,008 18,595 7,270 191,665

Smll Farm Equipment 8,100 13,1450 16,0 16,000 16,500 10,000 80,050Sprayen and Fingicides 41.680 51.960 49.460 _49.460 59,130 8.052 259.742

Sub Total 81,102 114,820 120,520 95,468 94,225 25,322 531,457

PROJECT COST BEORE CONTINGENCIES 696,325 708,155 817,498 718,721 685,122 555,286 14,181,107

PHISICAL CONTINGENCIES 20,712 18,680 21,260 17,365 17,005 13,869 108,891

PRICΠCONTINGENCIES 100.998 177.23)4 282.444 324.193 380,999 385.577 1,651.445

TOTAL COST WITH CONTINGENCIES 818.035 904.069 1.121.202 1.060.279 1.083.126 954.732 5.922b.1413

EÇîcii3F PUF 888008801, Ttile 2

(Cr00 000)

FI F0Y PY3 F0 4 PY 5 PY 6 TOATi

A. Ii,o,Iooirtr,

M om0 11110 4,>tio 6,000 6,000 6,000 36,000

Oqt.,lLo Pœroie ire t. toor 00.563 14,05(1 14,050 14,050 14,050 _ 23,763 +

teoito, t., otputv Oroieto L Mtînoocer 2,350 2,350 2, 350 3 ,250 31,250 3,250 36,800

Melktting/Crstit r 06r:ro,, 3,250 3, 2301 3,250 3,250 3,250 3,250 13,50O

Sc,,t,,e Itcprc,tor 30,525 10,225 100525 3,262 - - 36,030 +

Sonior jn.opoteolr - - - 3,250 3,250 3,250 9,750

Fn 12 loto,,, fn,D r 4,700 4,200 4, 40 47,o 4,7D0 4 ,700 28,200

cqi,, r Occo,,ntect 03,160 13,160 13,160 - - - 39,480 *

Clhino Scc0

tmtofit - - 2,350 3,250 3,250 3,250 12,100

csiO r .>r îo,e6reo,,g s v t2 ,10 2,100 2,100 2,100 2,100 21,60 1 2 600Cr et rrcille Ocrolces 2,100 2,109 2,110 2,100 2,100 2,1D0 12 600

2,100 2,100 2,1on 2,100 2,100 2,10D 12,600

" ,cî ntico Ocrvlccs 2,100 2,100 2,100 2,100 2,100 2,100 12,600

l lcc otioe Dircrct:ory 1,40D 1,40 4 1,0 1,400 1,400 1,400 8,400

lplsecis 2,B00 22800 2,000 2,800 2,800 2,000 16,800Office Forornnel 3,600 3,600 3,800 3,6 0 360 600 21 600

Oliver 2 025 2,250 2,b75 2.475 2 475 2,475 144175Orde- o 750 750' 750 750 750 750 4,500Qensonn2 Oor6cers 11,000 11,000 11,000 11,000 - - 44 D00

Ottlsîo,tn l'cnn 10,000 6,0D0 6,D0 - - - 22,000 +

Shet:t:.( I(t lI... dq9,ortcr,- 07,523 90.235 92,610 73.437 57,175 43,125 4b4,305

+ Pop., riot,, Silorlen

2, Sector 0141oC.t Cool CosOt Co- C Coti t- Co-

00048Rcr 4,200 8,400) 12,600 12,600 12,600 12,600 63,000

1'r,,,,lo,til

.lhlcf 2,800 S 600 8,400 S,400 6,400 9.400 42,000C s;ier~ 1,S00 3.000 44050 4,500 4,500 4,500 22,500

Orreelore ~~~~~~ ~~~~~1,500 3,000 4,500 4,500 o>3ûo 4,500o 2,0

0714c Soifr 3,000 6,e00 0.000 0,000 0,000 0,000 45,000

1,350 2,700 4,050 4,050 4,050 4,050 20,250

SOC 000r 050 01.00 1, 500 1,500 7,500

S,bh,,t.,tl feoel,ec.rtn 14,850 29,700 44,550 44 ,550 44,550 44,550 222,750

Mfrkrirtlîg(Pr 1F.ceper o.tniveîis

C .i.f 2 800 5 600 8,400 8,400 8,400 8,400 42,000

elarcctI,op0

t 0cat . 4,500 90,DO 13,500 13,5`0 13,500 13,500 67,50D

Sr,eekcopce 1,050~ ~~~~~~~~~ 210 3,1500 3,100 3,130 3,50 1,5

S rretoro 10750 0,500 2250 2,250 2,250 2,1250 11,750

OffIce e.t:ff 2,400 4,800 7,200 7,200 7,200 7,200 36,005

it6,,ece 1,250 2,500 3,750 3,750 3,750 3,750 18,750

0n,,,oOnieoît X`onilitt 8000 1.600 2,400 2,400 2,400 2,400 12,000

0,,40,ot:l fînkclîng 33,550 27,100 40,650 40,650 40,650 40,650 203,250

roti) Sctor, 26.400 56QQ 05.200 85,200 85.200 426,000

AgriLetlture,e Oooiofoscs 4.500 9,750 14,250 14,250 14,250 12,000 69,000

Elnotoooo 0tc=koeo:On Fr010000

~~~~~~ ~~~4,444 4,1,06 4,050 - - 1,0

t<,1 lim7e 1 07,820 37 530 56,970 56,970 45,360 214,600

Hoî -ime 5,828 5,870 5,670 - - - 17,18Foet tiOe 1.305 1,665 1,620 . - 4590

TotoAI1 tocsin, sevtco 06.027 39.D1 1

82,120 71.220 71,220 37,360 318 088

n. Onod Froncrax

Staff S1încici 88,720 27,070 27,070 27,070 21,070 27,070 154,070

Il 1rTIMININC,

Slrectoe of feoictes 13,163 10,530 10,530 - - - 34,223-

A. Pcant,,ne Center

C.S8f Insrruitor 10 975 8,780 8,78O -2 5 8,535Deputy Ch01f lOStencîne 2,100 2,100 2,350 3,250 3,250 3,250 6,300

Iîstrucccors Z,250 2,250 2,250 - - 6,750

Accounotnt 750 750 '50 - - 2,250

btnet;a, 750 350 750 2,250

offone Oceff 600 600 600 - ,800Dr-v-r 675 675 657 225 225 225 2.700

Cook 3B0 380 380 - - 1,140

Wat Ih-an 260 260 260 - . - 780

Inrerar 750 75C 750 - _ _ 2,250

Mcîhento 6D0 60C 600 - - 1,SOO

Disrenser 530 53C 530 - - _ 1.590

Sobtols 533,781 28,955 29.205 3,475 3,475 3,475 102,368

5, Fle1d resînîoz

Dire-tor 10.975 8,780 80 - - - 28,535 i

8071,3y Dlicettor 2,100 2,100 2,350 2,350 2,350 2,350 13,600

Instructor 1,500 3,000 4,500 4,500 4,500 4,500 22,500

0ffice Staff 600 3,200 5,845 01,800 1.800 1,800 9 00°

Drivîx 450 450 450 225 225 225 2,025

Loboren 500 1,008 , i.500 1,500 , 1,500 1,500 7.500

Subtotol 16,125 16,530 19,380 10,375 10.375 10,375 83,L60

Total Tr-inîng 49.988 45,483 48,585 13,050 13,SS0 13,850 185 328

III P1.T CONTROL

TfItifl Tes-t 1,150 2,705 0,050 4,050 4,050 ",e

Op.5 1.û*a, 7.950 t90' 7iD .6 7,650 S,350 39.e5o

Ttala PFet Contrel 4_300 7 605 11.650 il 650 11,900 12. 59,500

Total 2OrsoonoS 214.928

CAMEROON

COCOA PROJECT

PROjEN. CONS

B OILRiiROs

PY O PY 1 'Y 2 'Y 3 b P5 PY 61 C 9 7 ')/7L 17'j75 1,755'76 1,7 /77 o7'To 197o/7' 1 7 l'I T 0 T A B

U N I T COS N OST No C O T to C T No C O S o T No C 0 S T No C O S T

'RANING

NRo-is 22,500 22,500Neotoretior, and Notenolon af

criating f-cilitles 15,000 15, 0DOaoildig. 3li25 2 30 39,750 39,750

Garage-Store 350 18 6,300 6,300Furnmhings & Uten..ilv 6,B0O 6,800Utilitie_ 6,550

Soot.tal Trainirg 96,900 96,900

SEITOR OFFICES

NoHae (Manager) 3,000 2 6,0O0 2 6,000 2 6,000 16,000Adniaietration 3uilding 6,000 2 12,000 2 12,000 2 12,000 36,000Garoge-Store (Production 150 m) 18 2 5,1400 2 5,p00 2 5,400 16,-200Store (marketing 200 =) 16 2 7,200 2 7,200 2 7,20o 21,600

Suototal Seotor Offices 30,600 30,600 30,60o 91,G00

COLLECTION CENTERS

Store 170 30 5,100 30 5,100 30 5,100 30 5.100 30 5,100 30 5,100 30,600

Suototal Collection Centera 5,100 5,100 5,100 5,100 5,100 5,100 30,600

Total CoilAinge Tort 96,900 35,700 35,700 35,700 5,100 5,103 5,100 219,300

OCOA PROJECT

PROJECT COSTS

0'ENICLES AND E,QUIPONgNT COSTS

(CFAF '000)

1 7 0?77'74 .7 17 71 1'76y7? o'77 70 1?7ili7, li79'? T O T A L

U0 1 3 T T 1S 0CN T No ^ S - 1k T No C 0 5 T No O S T

HEAD9UARTE S

:'roJect Faooger - Solo,, l,:l 1 ,1û0' 1 1,79 2,û0û

D-Loy -7 tio 7

in sI ;) 1 7ûO 1 ?Jû 1,390

Production ùirrector -70.O7agon )J J I 007 1,500

Marketing Director- St.Wegon 1 9 900 1,800

Secior Inspectùr-4 hee dr. 1 1 1,6 i 11,60 3,200

Field Inspecoor-FlelO veh, 4 w.d. 1, DO 2 2,6,11 2 2,600 5,200

Trùck 3,5 t 1,75ù 1 1,75u 1 1,700 l 1,75 11 1, 750 0 ,7 5 1 1,750 10,500

Office furniture -nd e4ù0oment 0,677 -500

OoOOcOol Ileo0oourters 1,900 12,25ù 1,750 1,75û 1,650 1,75 1,750 30,800

TRAINING3

Director - St.Wagon 9û 6 1 3 00

General uee: FielF d sel 4 -d. 1,300 7, 00 5 6,001

Trorh 3.5 t 1,750 1 1,750 1,750

Moooreyole MoOorCyoOo 37 1, ~~~~~ ~~~~~~~~~~~~~~~~~~~~~200-- ,- 2 l17

.OuOtor07 Trainifo 01,55D 7,500 19,050

SECTOR OFFICES

Field vehicle, 4 vd 1,30û 4 5,20 h 5,200 4 5,200 4 5, 230 > 5,2907 31,200

Tru-k, 3,5 o (M.r,eotng> g,7>. 2 ',5w0 2 3,50) 2 5 2 3,5 2 2 3,500 21,00û

Motorcycle >175- 6 300 6 300 6 300 6 3,5uC 6 30û 1 800

SUoOt.1 Oector Offices 9,000 9,000 9,000 9,0ùO ?,000 o,Doo 54,000

E7T00S0ON S00VI0r7

Agr.Aseet. Notorllycîe 50 6 300 7 35 6 30û 6 7 3 150 1,750

Ext.morker, Olcyn le S5 55 _ 25 6 9 ù > 63 _ 4 15 1,275 63 745 63 9h 5 5,S88

Soolosal Extension 9yrvice 1,125 1,295 1,245 1,575 ,25 l 7,630

FEST CONTROL

Vehicles 060 1,266 1,2ùO 1,6du 2,256 2,400 9,744

Equiptent 1,264 ,24 _ 1 742 766 1,ù48 4,095 lO,û73

Suototal Peso Cnotrol 2,224 2,496 2,J42 2,L46 3,'0 6,405 19,817

COLLECTION CENTERS

00715071014 70147580~~~~~~~~~~~~20 0 Siecellaneooe iqeipFeent*wheeloarroe', "r ^e-c, ctc ) 25û0_ __ __37 7,5Cf _ 30 7 500° 3'J 0,573 30 /. S : .3 _.0 10O 7,L50 4 5,000

0005 F0005044~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~4 0SutTotai Collection Center- ~~~~~~ ~ ~~~~~ ~ ~~~~~ ~ ~~~~~7,5,( 7,500 7,5o0 7,50f 7,5oo 7,5C0D 45,o00

ROAD PROCRAUM'

Motor grader 12û Hp 10, 15o 31,350 31,350

Service trucu 2,050 2 4,100 4,100

Fuel tanh triloer l,OCO 1 1,Q0O 1,000

3uidnzer 140 Hlp 13,90G 1 73,9(70 13,900 >013,910

Front loader LUC IID 6,000 1 6,o00

Copactor 15 t 3 5,20 1 5,200 6'00o

D.mp truOk 45 3,1l70 7 21,700 21,7(0

Wt-er ta-k teruk 6000 1 2,9W 1 2,9470 2L 700

F.el t.nk t-kc 3500 0 2,1U11 1 2,170210

Service seation ce treiler 2,007 L 2,,007 2,100

Pick-up 1,000 37,000 3,090

Crrcr-te mixer 60 1 600 600

Self proelled crne 6,500 1 6,50 65

Small eqipmene & trole 55u o,57e

Mlaterials _ 13,7ù- 13,200 13,2_ 13,200 13,2700_ 6 'JO

SuboteaL Roadr 105,o5o 13,20X 13,200 1',2I . 13,29C 13,200 171,850

Y vol 7' '. o ipmect 7> 0,1,1 0 ) >-,2M C57?7 -7?35 - - 3;

CAiNtROONCOCOA PROJECT

PROJECT OOSTS

OPE,tATIONS AND MAINTENANCE

(CP76 '606)

PY 0 PY 1 Pl 2 P103 PY L P5 yP 61 9 7 3 1973/74 1974/75 1)75/76 1)76'77 1)77/78 1978/7) 1979/80 T O T A L

U N I T TOI No 00ST No 0C 0 S T No C O S T o 00 No C 0 S T_ No C 0 S

HEAOQUARTERS

Office Reot1 2,00M 2,000O 2,000 2,000I 2,070 2,0M0 12,000Office Eopeneec 2,000 2,000 2, 0O0 2,000 2.000 2,000 12,00080i16 Eapena.1 1,8Wo I 900 4 7,200 4 7,200 4 7,200 3 5,400 3 5,4W 1 1,800 35,100

(D>poty PireJot ManagerProduction DirectorSenior Inspector, ChiefAkccuntent)

Tr_1el (5% of saLaries) 309 3,025 3,036 3, Ù47 2,iï .5 2"ilS l,69 i6,647Vehicle opertice -exi ,tentonn

P.ooenger- r 76

0/yr 360 7 5,320 7 5,320 7 5,320 7 5,320 7 5,320 7 6,320 32,300Thice s 1,540/yr 1 1,540 2 3,000 3 4,620 3 4.620 3 4,6 20 3 4,620 23,100

Sobtot.1 Neadqortern 1,569 21,055 22,636 24,187 22,155 22,155 17,340 131,147

Buildtg Maintenance .5% cf cost 4,645 4,645 4,095 13,785Otilities 1,400 1,400 1,400 700 4,900Teaching snd Office S3pplies 2,900 3,100 3,700 600 10,300Iaple,ete and Toole 12.5/traine 6,212 8,662 11,162 375 28,41iMaLs 6,780 8,940 10,060 1,800 27,580Ph-a..y 600 900 1,000 200 2,700Vohilns O eaml ki

Peecenge' cern 76O/e 6,O0b 6 o,o80 8 6,080 6 4,560 22,800Trock 1,540/yr 1 1,540 1 1.,540 1 1,540 4,620Motorcyclos 35/yr 4 14o 2 -7 2 70 2 70 -350

Sobtita1 Training 27,652 35,537 39,857 12,400 115,446

SIototl Training

SECTOR OFFIOES

Boiidind Maintenance 5% cf Coot 1,530 3,060 4,59G 4,590 4,570 18,360Miecellanecos srcpensee

600/sector 1,200 2,ll00 3,600 3,600 3,600 3,600 16,o00

Vehicle O and '{Ponnence ocre C

7 6 0/yr 4 3,040 8 6,080 12 9,120 12 7,120 12 7,120 12 9,127 45,600

Trcik i,S54O/yr 2 3,080 4 6,160 6 3,240 ( 6 9,240 6 7,24i 6 3,240 46,200Motorcycier 35/yr 6 210 12 420 1 - 630 16 630 16 630 18 630 3,150

ScototI SOct-r Officec 7,530 16,590 25,650 27,180 27,1d0 27,1bO 131,310

i:T;INSERVICE

Miscollaneous 25/oget 1,525 3,275 5,000 5"75O 5,75v 4,6'1 25,900Vehicls O nd M.

Metercycles 35/yr 6 210 13 455 1) 665 1V 665 1' 6o5 `6 56u 3,220)iejcLon

6/yr 55 331 llo 708 181 1,006 211 1,266 211 26< 168 1,Ob _ 5,664

SOotobal ylteceion serri-e 2,065 4,438 6,751 7,681 7,6d1 6,168 34,784

PEST CONT40L

Vehilcl O ad M 760 1,996 2,05J3 4,032 5,414 5,760 20,850Equipn.ent 0 cd M ',291 7,12? 10, 'SA 15,856 22,322 24,842 8h394

Soltotl Pe- Contrd1 4,059 9,i25 13,834 l',086 27,736 30,602 105,244

01oliicr '.laicntoconce 5% cf cost 255 513 765 1,022 1,275 3,825'lscLlaneous EIcpecccî 25/enteor 75C 0,5)33 2,25J 7,3)3 3,75., 4.500 15.750

Ou-actai flollcctilc Cecters 750 1,755 2,763 ',765 4,770 5,775 19,575

ROAO P4034AM

lquipent O anS m i,400 47,200 47,200 47,200 47,200 47,200 237,4Oo

Total Operation and Maintenance Cost 1,589 64,541 137,281 160,239 140,269 136,722 134,265 774,906

CAMEROON ANNEZ 8ïft6le 1

COCOA PROJECT

CREDIT CO}eiIONENT CASH FLOWS(CFAF million)

1974/75 1975/76 1976/77 t977178 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90

RnnRC&n

INFLOW

Loan from FONADER 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6Credit repayment:

Fugeicide - 20.0 43.3 66.7 90.1 118.4 122.9 132.7 146.4 161.9 175.3 185.9 192.5 195.8 196.8 196.8Sprayers Year I - 12.5 16.3 15.0 27.5 34.0 16.5 29.5 34.0 16.5 29.5 34.0 16.5 29.5 26.6 26.6

Year 2 - - 12.5 16.3 15.0 27.5 34.0 16.5 29.5 34.0 16.5 29.5 34.0 16.5 29.5 26.6Storage Year 1 - 7.1 7.1 7.1 11.8 11.8 11.8 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4

Year 2 - - 7.1 7.1 7.1 11.8 11.8 11.8 9.4 9.4 9.4 9.4 9.4 9.4 9.4 9.4

Sub Total - 39.6 86.3 112.2 151.5 203.5 197.0 199.9 228.7 231.2 240.1 268.2 261.8 260.6 271.7 268.8(Bad debts, 10%) - (4.0) (8.6) (11.2) (15.2) (20.4) (19.7) (20.0) (22.9) (23.1) (24.0) (26.8) (26.2) (26.1) (27.2) (26.9)

Total Inflow 48.1 109.1 168.7 239.0 308.3 330.8 350.1 371.3 382.1 416.4 440.4 443.2 461.0 456.1 466.1 463.5

OUTFLOW

Credit made:Fungicide 16.7 36.1 55.6 75.1 98.7 102.4 110.6 122.0 134.9 146.1 154.9 160.4 163.2 164.0 164.0 164.0

8prayers 20.0 26.0 24.0 44.0 54.4 26.4 47.2 54.4 26.4 47.2 54.4 26.4 47.2 42.6 42.6 42.6

Storage 11.4 11.4 11.4 18.9 18.9 18.9 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0

Sub Total 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6

Repaid to FONADERFungicide - 17.5 37.9 58.4 78.9 103.6 107.5 116.1 128.1 141.6 153.4 162.6 168.4 171.4 172.2 172.2Sprayers Year 1 - 11.0 14.3 13.2 24.2 29.9 14.5 26.0 29.9 14.5 26.0 29.9 14.5 26.0 23.4 23.4

Year 2 - - 10.5 13.7 12.6 23.1 28.6 13.9 24.8 28.6 13.9 24.8 28.6 13.9 24.8 22.4Storage Year 1 - 6.3 6.3 6.3 10.4 10.4 10.4 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3 8.3

Year 2 - - 6.0 6.0 6.0 9.9 9.9 9.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9

Sub Total - 34.8 75.0 97.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2

Total Outflow 48.1 108.3 166.0 235.6 304.1 324.6 343.7 365.6 375.3 409.2 433.8 435.3 453.1 449.1 458.2 455.8

Annual Balance - 0.8 2.7 3.4 4.2 6.2 6.4 5.7 6.8 7.2 6.6 7.9 7.9 7.0 7.9 7.7Cum&lative Balance - - 3.5 6.9 11.1 17.3 23.7 29.4 36.2 43.4 50.0 57.9 65.8 72.8 80.7 88.4

FONADER

INFLOWSGrants from Goverment 48.1 73.5 91.0 138.080DECAO Repayment - 34.8 75.0 97.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2

Total Inflows 48.1 108.3 166.0 235.6 132.1 176.9 170.9 174.2 199.0 200.9 209.5 233.5 227.7 227.5 236.6 234.2

OUTFLOWSLoan to SDC 48.1 73.5 91.0 138.0 172.0 147.7 172.8 191.4 176.3 208.3 224.3 201.8 225.4 221.6 221.6 221.6

Net Inflow - 34.8 75 97.6 (39.9) 29.2 (1.9) (17.2) 22.7 (7.4) (14.8) 31.7 2.3 5.9 15 12.6

Cumulative Inflows 109.8 207.4 167.5 196.7 194.8 177.6 200.3 192.9 178.1 209.8 212.1 218.0 233 245.6

ANEX 9

CAMOON

COCQA PROJECT

Estimated Semestrial Schedule of Disbursements

(US$ '000)

Estimated lisbursementAmount disbursed Balance of

Project Year End of Semester during Semester Credit

1 1 400 6,100

2 400 5s,700

2 1 400 5,3OO

2 500 4,800

3 1 500 4,300

2 500 3,800

4 1 600 3,200

2 700 2,500

5 1 700 1,800

2 700 1,100

6 1 600 500

2 500

ANNEX 10Table i

CAMOEROON

COCQA PROJECT

PRODUCTD0N

Estimated Production of Project Area(tons dry beans)

year Production in tons dry beans remarks

without the with the incrementproject project

1974-75 10,500.00 10,500.00 _effect of

1975-76 10,500.00 11,100,00 600.00 rehabilitationonly

1976-77 10,500.00 12,400.00 1,900.00

1977-78 10,500.00 13,800.00 3,300.00

1978-79 10,500.00 15,200.00 4,700.00

1979-80 10,562.50 16,932.50 6,370.00

1980-81 10,778.70 18,408.75 7,640.05

1981-82 11,174.90 19,893.75 8,718.85

1982-83 11,718.60 21,935.00 10,216.40 combinedeffect of

1983-84 12,318.60 24,261,25 11,942,65 rehabilitationand new

1984-85 12,918.60 26,278.75 13,360.15 plantings

1985-86 13,456.10 27,852.50 14,396.40

1986-87 13,849.90 28,850.00 15,000.10

1987-88 14,043.70 29,347.50 15,303.80

1988-89 14,100.00 29,500.00 15,400.00

CAMEROON

COCOA PROJECT

PRODUCTION

Estimated Production of Rehabilitated Cocoa

Production -in tons dry beans

year of areaentrance (ha) without with the project

the project(now rehabilitated) 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81

1974-75 6,000 1,800 2,400 3,000 3,000 3,000 3,000 3,000

1975-76 7,000 2,100 2,100 2,800 3,500 3,500 3,500 3,500

1976-77 7,000 2,100 2,100 2,100 2,800 3,500 3,500 3,500

1977-78 7,000 2,100 2,100 2,100 2,100 2,800 3,500 3,500

1978-79 8,000 2,400 2,400 2,400 2,400 2,400 3,200 4,000

Total 35,000 10,500 11,100 12,400 13,800 15,200 16,700 17,500

Increase . 600 1,900 3,300 4,700 6,200 7,000

CAMEROON

COOO80 PROJ3CT

P0D'CTION

Oettngted 3roduction of Ne PlantOiOSg

a hrea <h) productio h i ton- dry beanspearOn9 oi,th projert 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89

rith-ot

th. projnct "eisting" new |tot ïtwitout with aunons ,oth 'lthont nith tthus with without eth without with without With iuthout _ _th ithoUt ith without wIth

1975-76 625 1,250 300 1,550 62.50 232.50 125.00 387.50 187.50 775.00 250.00 930.00 312.50 1,085.O0 375.00 1,240.00 375.00 1,240.00 375.00 1,240.00 375.00 1,240.00 375.00 1,240.001976-77 1,437 2,875 600 3,475 - - 143.70 521.25 287.40 868.75 451.10 I 1,737.50 574.80 2,085.00 718.50 2,432.50 862.20 2,780.00 862,20 2,780.00 862.20 2,780.00 862.20 2,780.001977-78 2,000 4,000 1,000 5,000 _ _ _ 200.00 750.00 400.00 1,250.00 600.00 2,500.00 800.00 3,000.00 1,00o.00 3,500.00 1,200.00 4,000.00 1,200.00 4,000.00 1,200.00 4,000.001978-79 1,375 2,750 700 3,450 _- - 137.50 517.50 275.00 862.50 412.50 1,725.00 550.00 2,070.00 687.50 2,415.00 825.00 2,760.00 825.00 2,760.001979-80 563 1,125 400 1,525 _- - - - 56.50 228.75 112.60 381.25 168.90 762.50 225.20 915.00 281.50 1,067.50 337.80 1,220.00

Total 6 ,000 12,000 3,000 15,000 62.50 232.50 268.70 908.75 674.90 2,393.75 1,218.60 4,435.00 1,818.60 6,761.25 2,418.60 8,778.75 2,956.10 10,352.50 3.349.90 11,350.00 3,543.70 11,847.50 3,600.00 12,000.00

Increnent 170.00 640.05 1,718.85 3,216.40 4,942.65 6,360,.5 7,396.40 8,000.10 8,303.80 8,400.00

CAIIRbOON

COOOA PROJECTF6l4 B00L28T

ON-FARM INFUTS (WUITH PROJECT)

Yaar 1)74/75 1975/76 1976/77 1977178 1978/79 1979/:0 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89

RERASILITATION Unit

A) Area .. d Earmers ________________________-----_--------------------------------------------- UNITS --------------------------------------- ---- --------------------------------------- ~ ~-----~~~-----------------------------included in projant

area ha 6,000 7,OOU 7,000 7,000 8,000 - - - - - - - -

area a....ulated ha 6,000 13,000 20,000 27,00û 35,OUO 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000

farnera pnrticipntig s 5,000 6,500 6,00 6,000 6,500 - - - - - - - - -

faritrs paîtiipntingeccnnalatad Na. 5,000 11,500 17,500 23,500 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000

0) Phystial fnr ipats

InsI farct aqipinat set 5,000 11,500 13,500 23,500 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000

sprayere Se 5,000 6,500 6,000 11,000 13,000 6,000 11,000 13,000 6,000 11,000 13,000 6,000 11,000 13,000 6,000

Funaglidea nons 60 130 200 770 350 350 350 350 350 350 350 350 350 350 350

(yield 5S0 kg/ha)

C) COsts Unit PriceCFAF -------------------------------------------------------------------------- CFAF ('000) ---------------------------------------------------------------------------- _ _ _ _ _

Seul faro rqaipme.t 1000-/set 5,000 11,500 17,500 23,500 30,000 30,000 30,000 30,000 30.000 30,000 30,000 30,000 30,000 30,000 30,000

Sprayera .. 5000/piece 25,000 32,500 30,000 55,000 65,000 30,000 55,000 65,000 30,000 55,000 65,000 30,000 55,000 65,000 30,000

Fnaginides ** 278,000/tan 16,680 36,140 55,600 75,060 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300 97,300

NSW PLANTINOS Unit

A) Area and f aria--rs- -------------- ___--8--------------------------------------- UNIIS -----------------------------------------------------------------------------------------------------------------------

included la prajectcrea ha 1,250 2,87 4,000 2,750 1,125 - - - - - - -

area ha 300 600 1,000 700 400

erea aeoonanlated E ha 1,250 4,125 8,125 10,875 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

orna aooacnleted N ha 300 900 1,900 2,600 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000

faccera partinipatig E 0*. 5,000 6,500 4,500 - - - - - - - - - - -

fermera pnati.ipatiag N Ne 600 600 W00

farcea- partitipatisgaoac'orulatd gE N8 5,000 11,500 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000

f-rmera participotirgaccnssaltad N No. 6000 1,200 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

0) Phycical fara icpotaNOrsery qoipaent E aet 5,000 6,500 4,500 - - - - - - - - - - - -

Narcary eqnipa nt N set 600 600 800 - - - - - - - _ _

Polythen baga E 1000 ùag 2,250 5,175 7,200 4,950 2,025

Palyth... bhag N 1000 bag 540 1,080 1,800 1,260 720 -

Fad. E 1000 9adc 75 172.5 240 165 675

PFde N 1000 pnds 18 36 60 4P 24

Ir c.ticidea (E14) 1 4,960 11,120 16,000 11,040 4,880 - - - _ _ - _ _ _

Sea11 fara quipAent E set 5,000 11,500 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000

Snail foar qoipnrat N set 600 1,200 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

sprayere N piace - - - - 600 600 800 600 600 800 600 600 800 600 600

Fongicides (E88) tos - - - - 5,000 18,175 47,875 88,700 135,225 175,575 207,040 227,000 236,950 240,000 240,000

C) Cocta Unit PicaCFAF ------ - - --------------- CFAF (000) ------------------------------------------------------------------------------------------------------------------

Nurarry aq.ip-ant E 4000/ret 20,000 26,000 18,000

Nncsary eqgipneat N 12,500/sot 7,500 7,500 10,000

Polythene bhgs E 1370/1000 bag 3,082 7,090 9,864 6,782 2,774

Polythene baga N 1'70/1000 bog 740 1,480 2,4n6 1,726 986 -

Pad. E 25,000/1000 pade - 2,000 4,000 6,000 4,125 2,000 - - - - - - - -

Pada N 25,000/1000 pads 1,000 1,000 1,500 1,050 1,000 -

Insecticides (E&N) 875/1 4,340 9,730 14,000 9,660 4,270 - - - - - - - -

Ssall foa eqaipteat E 500/sat 2,500 5,750 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000

S-aI foa aqaip .et N 1000/crt 600 1,200 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

SprayaaaOO N 5000/piae - - - - 3,000 3,000 4,000 3,000 3,000 4,000 3,000 3,000 4,000 3,000 3,000

Fsisgicde (E86)00 278/kg - - 1,390 5,052 13,309 24,659 37,593 48,810 57,557 63,106 65,872 66,720 66,720

V Sieting Pa-mrer2/ NSn Fa..rs

* ennIi f ara eqoipart aill bU paid by farnar cash** sprayers and fanginida ill bh provided nn crdit

eorcecy equip= .t, polythana bags, pFda aad in .. ticidas will bh prvlided by Prajert Anthority, face af charga for the fran.

I AJIERDON

R,fereneo -i - OROJECTu

Ol-FiY UINPDS r T1 Pit JECT>

ABIOITATION uinit 1.fr 4974775 1975-76 1976/77 19777i6 197fi79 1979/S9 1980iil 1981182 1982/83 1963/84 i9864/8 19857/6 1986/87 1987799 1988989

à) k-e ----- -atr _ ____--------_--___-------- -------------------------------- UNIT5 ---- ----------------------- -----------------------------------------------iooîudoo in 91010,1

ha 6,000 7,000 7,000 7.000 S1.000

ote0 rooouoolatofd ho 6,003 13,090 20,000 27,000 35.000 35,000 35,000 9,6003 35,300 35,û00 33,O0O 35,000 35.000 353000 }5,0D0

f.roro porttoipooS No. 5,000 6,5N0 6,000 6-000 6,500

fantero portirîpating.-.- uloted No. 5,0NO 11,S0O 17,50 23,500 3 30,000 30.00 30,0D0 13.0,0 30,000 30,000 30,000 3D,000 30.000 30,000 30,000

B) Phv.lo.1 11r m 1n ettS a1l far oquipo0t set 5,0N0 11,S00 17,500 23,500 30,000 30,000 30.03 30,000 30,000 30,000 30,000 30,000 30.000 30,000 10,000

s".0yerr No. 5000 6.500 6,000 11,000 13,000 6,000 11,600 13.00N 6,000 11,0N0 t3.000 6,00 11.0W0 13,000 6,000I'oon1eid.os 1, a30 65 IO 1315 175 175 175 175 175 17S3y1e4d 300 kglh.)

C) Co0t. Unit PriceCFAF ------------------------------------------------------------------------- CFA (0 000) --------------------------------------------_ ___ --- ----------------

S-11 f.- oqîpieont 50dtet 2,500 5,750 8,750 1,750 15.000 *5,000 15,000 15,000 15.090 15,000 IS,OO 0 15.0I 15.0N I,D00 15.0I 0

Sp-yor- 5000/pi... 25,N00 72,500 50,09 55,N00 65,030 30,000 S 55.0D0 65,000 30.D00 55.000 65,000 30,000 55.000 6S,O00 90.003

F..gi.ides 27Y,000/ton 8,340 1-,070 27,Y00 37,530 48.650 48,630 46,650 48,650 48,,6S0 48,650 48.650 - 48,650 48,6S0 48,650 47,0650

SEW PLANTINOS UnitA) Arml nd far- ------- --------------__ --_ ------_____--______--__--- ------------------ UNITS ---------------------------------------------------- ~---------- ----------------------------------------------

included in proJector,,,, h- 615 1.437 2,000 1,375 562

ore *. ...- l.t.d ho _ 625 2.0,2 4,062 5,437 6,000 6,N00 6,000 6,000 6.000 6.000 6,0000 6 .00 600,D

f-rmtrs partitipotlîo ND 2,500 3,250 2,259

fer,oer. purticipatiagoooo,toloted No. 5,750 0,000

B) Phy.tr.l fr.n inr0t196r-eos. Equlptent .et 2.500 3,2350 2.250

POlythOC 803gs 1OO l,17S 2,587 2.000 2.475 1,012

Fod. 1000 - 38 S6 130 a3 34

Sa11 foe oqo1pmüt tet 2,500 5,750 0OOO 8.00 - .390 Y,000Sp-eVr- No. . - - -N -

Fon&irid.o kg 1,259 5,374 13,490 24,372 36,372 48,372 59,122 66,992 70.874 72,000<y7 1*d 600 kg/ha)

C) C0t.1 0011 Un -riCFAF -------------------- ---------------- - - - - CFAF ('000) -------

Mor.ery EquLp00t 10OD/set 2,500 3,250 2,250

Polythsoe BgS0 1370/1000 1,610 3,544 4,932 3,391 1,386Pbd. 25000/1000 *' 950 2,150 3,000 2,075 51080i1 for,o eq.ipneît 5000/pie.,. 1,250 2,875 4,000 4,000 4,000 4.0N0 4,000 4,N00 4.000 4,000 4,000 4.050 4,000 4,000 4,000Sproyers

0OOltcidoo 278/ks. 348 1,494 3,750 6,775 10,111 13,447 16,436 16,624 19,703 20,016 20,016

-CAMEOQN

-ZOCCA f1ROJEC?

FR ZUDGET - 1.2 lia REBABI-LITATI(M

Yield: 500 kgtha

Wittiut

YEAR 1 2 3 4 S 6 7 - 25 Rebabilitation

.'roduction <kg) 360 480 600 600 6Q0 600 600 360

Revenues

Production Value 1@ CFAF 96.5/kg 34,740 46,320 57,900 57,900 57,900 57,900 -57,900 34,740Yearly bonus - - - - - - -

(1) Total revenues 34,740 46,320 57,900 57,900 57,900 57,910 57,900 34,740

Expenditures

Small farm equipment 1,000 1,000 1,000 1,010 1,00D 1,000 1.000 500Fungicide 3,340 3,340 3,340 3,340 3,340 3,340 3,340 2,000Sprayer 5,000 - - 5,000 - - 1,660 1,1 1.660 1-

9,340 4,340 4,340 9,340 4,340 4,340 6,000 4,165

Less: Financed by credit100% of fungicide 3,340 3,340 3,340 3,340 3,340 3,340 3,34080% of sprayer: 4,000 - - 4,000 - - 1,330

Plus: Credit repaymentsfor fungicide in next projectyear - 4,000 4,000 4,000 4,000 4.000 4 000for sprayer in 2 next years - 2,500 2,500 - 2,500 2,500 1,660_

(2) Cash expenditures 2,000 7,500 7,500 6,000 7,500 7,500 7,000 4,165

(3) Net revenues (1) - (2) 32,740 38,830 50,400 41,900 50,400 50,0 50,900 30,57.5

1/ Average over three-year period.

CAMEROON

COCCA PROJECT

FARX 8UDGET'.0,75 la NEW PLANTING <WITN PR0JECT). EXISTING FARlMER(CFAF)

Yieldt 800 kglha

Year 1 2 3 4 5 6 7 8 9 10 il 12 13 - 25

Plantation (ha) 0.25 0.25 0.25 - - - - - - - - -Production (kg) - - - - 38 100 225 338 450 525 575 600 600

Revenues

Production Value @ CFAF 96.5/kg - - - - 3,620 9,650 21,713 32,617 43,425 50,663 55,488 57,900 57,900

Yearly bonus -- - - - - - - -_

(<) Total revenues - _ _ _ 3,620 9,650 21,713 32,617 43,425 50,663 55,488 57,900 57,900

Expenditures

(a) Nursery equipment 4,000 - - - - -_ _ _(b) Plastic bags 610 610 610 -<c) Seeds 350 350 350 -(d) Insecticides 700 1,400 1,400 700(e) Small farm equipment 300 3D0 300 3 300 300 300 300 300 300 300 300 300

(f) Fungicides - - _ _ 200 580 1,200 1,830 2,500 2,930 3,200 3,300 3,300(g) Sprayer U

Sub-total 5,960 2,660 2,660 1,000 500 880 1,500 2,130 2,800 3,230 3,500 3,600 3,600

Less: Subsidies for (b), (c) (d): 1,660 2,360 2,360 700 - - - - - - - - -

Less: Financial by Credit1007% of Fungicide: - - - - 200 580 1,200 1,830 2,500 2,930 3,200 3,300 3,30080% of Sprayer: - - - - - - - - -

Plus: Credit repaymentsFor Fungicide in next project year - - - - - 240 696 1,440 2,196 3,000 3,516 3,840 3,960For Sprayer in next 2 years - - - - - - - - - - - - -

(2) Cash Expenditures 4,300 300 300 300 300 540 996 1,740 2,496 3,300 3,816 4,140 4,260

(3) Net revenues (1) - (2) -4,300 -300 -300 -300 3,320 9,110 20,717 30,877 40,929 47,363 51,672 53,760 53,640

l/ No aprayer needed in addition to the one already used for rehabilitation.

CAMEROON

COCOA PROJECT

FARM BUDGET - 0.6 Ha NEW PLANTING (WITHOUT PROJECT): EXISTING FARMER(CFAF)

Yield: 600 kg/ha

Year 1 2 3 4 5 6 7 8 9 10 il 12 - 25

Plantation (ha) 0.20 0.20 0.20 - - - - - - - -

Production (kg) - - - - 20 60 120 1-80 240 300 340 360

Revenues

Production value O CFAF 96.5/kg - - - - 1,930 5,790 11,580 17,370 23,160 28,950 32,810 34,740Yearly bonus - - - - - - - - - - -

(1) Total revenues - - - - 1,930 5,790 11,580 17,370 23,160 28,950 32,810 34,740

Expenditures

(a) Nursery equipment 1,000 - - - - - - - -

<b) Plastic bags 490 490 490(c) Seeds 280 280 280 - - - - - - - - -

(d) Insecticides - - -

(e) Small farm equipment 500 500 500 500 500 500 500 500 500 500 500 500(f) Fungicides - - - - 100 330 660 1,000 1,330 1,660 1,900 2,000(g) Sprayer 1/ - - - - - - - - - - -

Sub-total 2,270 1,270 1,270 500 600 830 1,160 1,500 1,830 2,160 2,400 2,500

Leas: Subsidies for (b) and (c) 770 770 770 - - - - - - - - -

Less: Financed by creditPlus: Credit repayment

(2) Cash expenditures 1,500 500 500 500 600 830 1,160 1,500 1,830 2,160 2,400 2,500

(3) Net revenues (1) - (2) -1,500 -500 -500 -500 1,300 4,960 10,420 15,870 21.330 26,790 30,410 32,240

1/ Sprayer not included, since without project only those farmers who have a cocoa farm and therefore a sprayer.

CAMEROON

COCOA PROJECT

FARM BUDGET - 1.5 Ha NEW PLANTINC < WITH PROJECT): NEW FARMERCÇFAF)

Yield: 800 kg/ha

Year 1 2 3 4 5 6 7 8 9 10 il 12 13-25

Plantation (ha) 0.5 0.5 0.5 - - - - - - - - -Production <kg) - - - - 75 200 45o 675 900 1,050 1,150 1,200 1,200

Revenues

Production value @ CFAF 96.5/kg - - - - 7,240 19,300 43,425 65,140 86,850 101,330 110,980 115,800 115,800Yearly bonus - - - - - - - - - - - -

(1) Total revenues - - - - 7,240 19,300 43,425 65,140 86,850 101,330 110,980 115,800 115,800

Expenditures

(a) Nursery equipment 12,500 - - - - - - - - - - -(b) Plastic bags 1,220 1,220 1,220 - - - - - - - - -(c) Seeds 700 700 700 - - - - - - - - -(d) Insecticides 1,400 2,800 2,800 1,400 - - - - - - - - -(e) Small farm equipment 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000(f) Fungicides - - - - 400 1,060 2,400 3,660 5,000 5,860 6,400 6,600 6,600(g) Sprayer - - - 5'000 - - 5,000 - - 5,000 - - 1,665

Subtotal 16,820 5,720 5,720 7,400 1,400 2,060 8,400 4,660 6,000 11,860 7,400 7,600 9,265

Less: Subsidies for (F.), (b), (c), (d): 15,820 4,720 4,720 1,400 - - - - - - - - -Less: Financial by Credit 100%

of fungicide: - - - - 400 1,060 2,400 3,660 5,000 5,860 6,400 6,600 6,60080% of Sprayer: - - - 4,000 - - 4,000 - - 4,000 - - 1,330

Plus: Credit repaymentsfor fungicide in next project year - - - - - 480 1,280 2,880 4,400 6,000 7,040 7,680 7,920for sprayer in next 2 years - - - - 2,500 2,500 - 2,500 2,500 - 2,500 2,500 1,665 2/`

(2) Cash expenditures 1,000 1,000 1,000 2,000 3,500 3,980 3,280 6,380 7,900 8,000 10,540 11,180 10,920

(3) Net revenues (1) - (2) -1,000 -1_000 -1.000 -2.000 3.740 15.320 1,145 58.760 78.950 93,330 100,440 104,620 104,880

1/ Average over three-year period.

AUNEZ 12CAMEROON

COCOA PROJECT

GOVERNMENT CASH FLOW 1!(CFAF Million)

1989/90te0

1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 1993/94

INFLOHI

Loan IBRD 200 200 200 200 190 138

Loan CCCE 2/ 180 180 180 180 180 180

Grant FAC 40 40 40 40 40 40

Indirect Taxes in Projeat CeaIs 29 32 40 40 40 28

Expert Tatas on Incr.. antal Production - 24 76 116 160 205 250 281 329 385 430 463 483 496 496 496

Stabilization Fund Surplus - 51 160 243 334 428 513 585 685 802 897 966 1,007 1, 0 27 1,034 1,034

Total Inflows 449 527 696 819 944 1,019 763 866 1,014 1,187 1,327 1,429 1,490 1,523 1,530 1,530

OUTFLIOWS

Project Cost 3/ 703 706 815 712 776 550 297 260 260 231 290 236 236 236 236 236

Less: Cent Without Pr.ject (24) (55) (88) (124) (161) (164) (164) (164) (164) (164) (164) (164) (164) (164) (164) (164)

Incraemental Prejeet Cost 679 651 727 588 615 386 133 96 96 67 126 72 72 72 72 72

Net Flîw Before Debt Service (230) (124) (31) 231 329 633 630 770 918 1,120 1,201 1,357 1,418 1,451 1,458 1,458

Debt Servies

IBRD (23) (37) (52) (66) (81) (90) (137) (137) (137) (137) (137) (137) (137) (137) (137) (137)

CCCE 2/ (6) (13) (19) (25) (31) (38) (99) (99) (99) (99) (99) (99) (99) (99) (99) (99)

NET ANNUAL CASH FLOW (259) (174) (102) 140 217 505 394 534 682 884 965 1,121 1,182 1,215 1,222 1,222

CUMULATIVE NET CASH FLOW - (433) (535) (395) (178) 327 721 1,255 1,937 2,821 3,786 4,907 6,089 7,304 8,526 14,636

1/ In 1974 prices2/ At 3.57. per annue for 20 years including 6-year period f grace

3/ Lnss farers' centributions

ANNEX 13

CAMEROON

COCOA PROJECT

Economic Rate of Return

Benefits

1. Benefits have been calculated on incremental cocoa production,assuming no improvement in average quality (90% grade I and 10% off-grade).The economic value consists of price received by producers, intermediarymargin accruing to precooperatives, and Government taxes and StabilizationFund surplus. Calculations are based on a CIF cocoa price of US¢ 47/lb,

as projected for 1980 at average 1973/1974 prices by the Comuodities #ud ExportProjections Division, converted at a kate of CFAF 250/Us$ (Table 1). Producerprices are CFAF 100/kg and CFAF 65/kg for grade I and off-grade cocoareopectively, which are 1973/74 actu8a price..

Costs

2. Cost figures include ail project investment and operating costs at begin-ning 1974 prices. Administration costs without the project have beenestimated at CFAF 4,000/ha, which appears to be the approximate cost ofservices currently provided.

3. On-farm input costs are derived from Annex 13, Tables 1 and 2,deducting internal indirect taxes amounting to 30% of the coat of smallfarm equipment and sprayers.

4. Family labor has been costed at the minimum agricultural wagerate of CFAF 250/day, which roughly correspond to daily wages currentlypaid plantation workers in the southwestern region oil palm estates.

5. Project Life

A life of 25 years has been assumed for the project.

6. Results and Sensitivity Analysis

The economie rate of return under assumed costs and benefitsis 26%. Sensitivity analysis of the rate of return to variations incosts and benefits shows the following results:

Rate of Return under:

---------- Benefits-Costs 100% 90% 75%

100% 26 23 18110% 23 20 15125% 19 17 12

ANNBX 13

CAMEROON

COCOA PROJECT

Economic Value of Cocoa

Export Cocoa (Grade I)

World Market Price: US d/lb 47OFAF/kg 260

OFÂF!"' ton

CIF Price 260,000Freight, insurance & miscellaneous Co0ts 20,000FOB Douala Price. 240,000Allocation of FOB Price:Export Costs: 26e250Transport costs and losses, project area

to Douala 6,000Handling, bagging, & storage 6eo00Insurance & financial expenses 5,800Miscellaneous fees and charges 2,4o0.Stabilization Fund tax 1.000Exporterls gross profit margin 5,050

Economic Value 213 750Producer price 100,00Intermediary margin 5,100Export tax 34,062Stabilization Fund surplus 74,588

Non-Export Cocoa (off-grade)

Economic Value: 85 430Producer priceIntermediary margin 5,100Tax 15,330

Average Economic Value of Project Cocoa 200,918(90% export, 10% non-export)

cAliraooN ~~~~~~~~~~~~~~~~~~~~~~~Table 2

COCOA PROJECr

1974/75 1975/76 1976/77 1977178 197i./79 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 1985/86 1986/87 1987/88 1988/89 to1998/99

COSTS Wl1S PROJECT

Total PFroeet Co-t 696.3 708.2 B17.5 718.7 685.1 555.2

Le: .. ore enta1 Fart Inputs (81.1) (114.8) (120.5) (95.5) (94.2) (25.3)

1.lvase Valoe of BoildiRg &V.hi.le. s (11.5) (66.4)

Subtotal 615.2 593.4 697.0 611,7 524.5 529.9

Pls: Fhysical Costlsgaaaias 20.7 18.7 21.3 17.4 17 14

Subt.tal 635.9 612.1 718.3 629.1 541.5 543.9

t tcs: Internal T..es 19.1 19.3 28.0 27.7 25.0 25.4

Subtots1 616.8 592.8 690.3 601.4 S16.5 518.5

Add: On-Farr Icputs 74.7 127.3 158.5 175.4 202.5 168.7 185.2 196.4 210.0 222.5 130.9 236.8 240.4 240.6 240.8

Fa.ily Labos 144 393.2 691.5 1,022.2 1,227.5 1,179.2 1,108.0 1,248.2 1,172.7 1.230.5 1,274.5 1,306.9 1,326.5 1,339.0 1,342.5

Post Project Admi.i.tratioe C.st ______304.7 268.1 268.1 238.6 297.0 246,0 244.0 244.0 244.0

Total 835.5 1,113.3 1.540.3 1.799_0 1,946.5 1866.4 1,597.9 t.7_127 1 6_50.8 1,691.6 1.802.4 17B77 . 1,82316 1,827.3

C08T WlT8017f PROJECT

Ad4ii.strat1nn 24.0 54,5 88.2 124.2 161.7 164.0 164.0 164.0 164.0 164.0 164.0 164.0 164.0 164.0 164.0

Os-Pcra, Itcut. 34.2 58.4 70.4 98.1 118.8 89.6 104.3 108.9 112.4 115.9 119.1 121.4 122.5 122.8 122.8

Fa.ity Lab.r 86.5 211.5 352.8 501.3 620_8 1603.8 583.5 590.5 604.5 621.8 634.3 643.8 649.8 653.0 653.8

Total 144.7 324.4 511.4 723.6 899.3 897.4 851.8 863.4 880.9 901.7 917.4 929.2 936.3 939.8 940.6

INCR1E4NTAL ECOoOMrC C0STS 690.8 788.9 1,028.9 1.075.4 1,047.2 1,0D9,0 746.1 849.3, 769.9 789.9 885.0 858.5 874.6 883.8 886.7

INCREIDSNTAL ECONOMIC 8ENEPITS

lncraematal Productin - 600 1,900 3,300 4,700 6,370 7,640 8,719 10,216 11,943 13,360 14,396 15.000 15,304 15,40V

YIsSue vf Incaraeaet. Production 1/ - 120.6 381.7 663.0 944.3 1,279.8 1,535.0 1,751.8 2.052.6 2,399.6 2,684.3 2,892.4 3,013.8 3,074.8 3,094.1

Ecoccd.c Rate ef Return 26%

1/ Average price of CFAF 200,918tt, based on values at Tabla 1 and output iotcicttng in SEN81TIVITY ANELYSIS

90D Grade I and 107 off-grade ooaea. SENP,FIT

CecI 108. *10 -25%

10 2 23 la+107. 73 23 2 5

4.257, 19 17 12

IBRD 10805

UNITED REPUBLIC 0F CAMEROON î'4J 19 .

COCOA PROJECT 10 20 30 40 50

KILOMETERSBAA

10 20 30I I M

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