Document of FlL UUI6>T The World Bank FOR OFFICIAL USE ONLY Report No. 3316a-TUN TUNISIA STAFF APPRAISAL REPORT OF THE NORTHWEST RURAL DEVELOPMENT PROJECT PHASE I April 30, 1981 Europe, Middle East and North Africa Proiects Department Agriculture II Division This documnent has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (As of January 30, 1981) Currency Unit = Tunisian Dinar (D) D 0.40 = US$1 D 1 = US$2.5 D 1,000 = 2,500 US$1,000 = D 400 US$1,o000,000 D 400,000 WEIGHTS AND MEASURES Metric System British/U.S. System 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 square kilometer (km2) = 0.386 square miles (sq mi) 1 hectare (ha) = 2.47 acres 1 litre (1) = 0.2200 Imperial gallons (I gal) 0.2642 U.S. gallons (gal) 1 ton (t) = 1,000 kg/2,205 pounds (lb) 1 cubic meter (m3) - 35.315 cu ft REPUBLIC OF TUNISIA Fiscal Year January 1 - December 31 FOR OFFICIAL USE ONLY ABBREVIATIONS AU = Animal Unit BNT = Banque Nationale de Tunisie (National Bank of Tunisia) CLCM = Caisse Locale de Crédit Mutuel (Mutual Credit Bank) CNEA = Centre National des Etudes Agricoles (National Center for Agricultural Study) CRDA = Commissariat Régional au Développement Agricole (Regional Agricultural Development Commission) DPC = Direction des Ponts et Chaussées (Highways and Bridges Department FOSDA = Fonds Spécial de Développement Agricole (Special Fund for Agricultural Dévelopment) GERMAN T.A. = German Government Technical Assistance INRAT = Institut National de la Recherche Agronomique de Tunisie (National Agricultural Research Institute of Tunisia) OED = Operations Evaluation Department O&M = Operation and Maintenance Costs PPAR = Project Performance Audit Report SCM = Société de Caution Mutuelle (Mutual Guarantee Association) SONAM = Société Nationale de Motoculture (National Company Providing Tractor and Harvesting Services) UCP = Coopérative de Production (Production Cooperative) UNDP = United Nations Development Program. This document has a restricted distribution and may be used by recipients only in the performance of their officiai duties. Its contents may not otherwise be disclosed without World Bank authorization. TUNISIA STAFF APPRAISAL REPORT OF THE NORTHWEST RURAL DEVELOPMENT PROJECT PHASE I TABLE OF CONTENTS Page I. INTRODUCTION 1 II. THE AGRICULTURAL SECTOR CONTEXT 1 A. Place of Agriculture in the Economy 1 B. Agricultural Performance 2 C. Sector Issues Relevant to the Northwest Rural Development Program 4 D. Bank Involvement in Agriculture, and OED Comments on Previous Projects 10 III. THE AREA TO BE DEVELOPED UNDER THE PROGRAM 12 A. Location, Climate, and Land Resources 12 B. Population, Revenue, Employment 12 C. Land Use and Ownership 13 D. Production 14 E. Government Services and Infrastructure 14 F. The Sedjenane Range Management and Beja Soil Conservation Projects 15 IV. THE DEVELOPMENT PROGRAM 17 A. Introduction 17 B. Program Strategy 18 C. Description of Program Components 18 D. Implementation in Physical Terms and Cost Estimates 23 E. Cost Recovery 25 This report is based on the findings of an appraisal mission in September/ October 1980, composed of Messrs. K. Cleaver (Mission Leader, Economist), J. Doolette (Agriculturalist), J. Hall (Livestock Expert), R. Knighton (Roads Engineer), H. Plusquellec (Irrigation Engineer), C. Rémy (Loan Officer), and M. Thiault (Consulting Agriculturalist). Assistance was obtained from Mr. F. Hayer (German Technical Assistance). V. FINANCING AND ADMINISTRATION OF THE FIVE-YEAR TIKE SLICE PROJECT 26 A. The Five-Year Project 26 B. Financing 27 C. Procurement 28 D. Disbursements 30 VI. IMPLEMENTATION OF THE DEVELOPMENT PROGRAM AND INSTITUTIONAL REFORM 31 A. The Development Authority 31 B. Status of Preparation of Micro-Zone Plans 33 C. Land Tenure 33 D. Participation by, and Organization of, the Population 34 E. Agricultural Credit: Implementation 35 F. Extension and Research 36 G. Soil Conservation, Livestock and Afforestation 37 H. Monitoring, Evaluation, Accounts, and Audit 37 VII. BENEFITS AND JUSTIFICATION 38 A. Introduction 38 B. Production 39 C. Returns to Farmers and Incentives to Participate in the Program 41 D. Employment 43 E. Distribution of Benefits 43 F. Economic Analysis 44 G. Program and Project Risks 45 VIII. RECOMMENDATIONS 47 ANNEXES ATTACHED TO APPRAISAL REPORT 1. Schedule of Estimated Disbursements of Bank Loan 2. Documents in Project File IMPLEMENTATION SCHEDULE (charts) MAPS 15395, 15396 Annexes in the l]mplementation Volume 3. Agriculture Sector Background and Issues 4. Pasture and Forage Production 5. Livestock Subsector 6. Project S>oil Conservation 7. Project Forestry 8. Project Agricultural Intensification and Land Use 9. Agricultural Extension and Research 10. Project Roads Il. Project Pasture Improvement 12. Project Livestock Development 13. Project Technical Assistance and World Food Program 14. Agricultural Credit 15. Project Farm Budgets 16. Implementation Schedule for Overall Project 17. Project Cost Table 18. Project Financing and Cost Recovery 19. Legislation Regulating the Operation of "Offices" in Tunisia 20. Marketing, Input Supply, Prices, Economic Analysis, and Project Justification 21. Indicators for the Monitoring and Evaluation System Maps Referred to in Implementation Annexes. i ilb TTUj'7TSIA STAFF APPRAISAL REPORT OF THE NORTHWEST RURAL DEVELOPMENT PROJECT PHASE I I. INTRODUCTION 1.01 The proposed Project would help finance a 5-year time slice of a 15-year Development Program in Tunisia's Northwest region which aims to increase the income and improve the nutrition, health, and education of the population while reducing soil erosion and thereby arresting the decline in agricultural productivity. The Development Program would also create employment possibilities, develop local energy resources, and reduce the sedimentation rate of the Sidi Salem reservoir. It would also strengthen the services of the Ministry of Agriculture in the region, particularly its extension, research, livestock, credit and marketing services. The Development Program was prepared by a public Tunisian consulting firm; The National Center for Agricultural Studies ("Centre National d'Etudes Agricoles," CNEA), with important contributions by Tunisia's Forestry Department in the Ministry of Agriculture, and the FAO/IBRD Cooperative Program. The Development Program is based largely on two successful pilot projects including the Sedjenane Range Management Project and the Beja Soil Conservation Project, which are discussed in Chapter III. In the remainder of this report the "Project" refers to the activities included in the 5-year time slice proposed for Bank financing. The Program refers to the full 15-year Development Program. Il. THE AGRICULTURAL SECTOR CONTEXT /_ A. Place of Agriculture in the Economy 2.01 Tunisia's Economy. Tunisia's GDP increased at 6.9% p.a. from 1976 to 1980. GDP per capita reached US$1,330 in 1980. This increase is partly due to Government policy to stimulate production through projects and credit directed mostly to the private sector, incentives provided to private manufacturers, an export oriented industrial investment strategy, and promotion of tourism. Tunisia has also benefitted from increased oil prices for its petroleum production which has financed an increase in Government investment. Petroleum and phosphate exports provide 32% of export earnings, while manufacturing provides 26%. The balance of payments situation is good with the debt service ratio (now 11.1% of exports of goods and services) improving during the 1970's. Major economic issues include: (a) The projected decline in oil production will cause Tunisia to become a net petroleum importer by 1990. This is likely to make the high level of subsidies to the economy (16% of current budget outlays) unsustainable in the long term. Subsidies will need to be concentrated only on the needy rather than distributed to all income groups; /1 Annexes 3 through 5. -2- (b) The high level of un- and underemployment (20-25% of the labor force) and hence the need to promote labor-intensive investments (mainly in agriculture, small and medium enterprises); (c) The need to use interest rate and fiscal policies more effectively to restrain final consumption and to stimulate savings as petroleum production declines; (d) The need to maintain wage policies which keep labor cost increases in line with productivity increases in order to maintain competitiveness in international markets for manufactured goods; (e) The need to alleviate poverty in certain poverty pockets such as the Northwest. About 17% of Tunisia's population lives at or below the absolute poverty level of US$200 per capita. 2.02 The place of agriculture can be represented by the following data: (a) Agriculture's share in GDP is declining (24% in 1972 to 15% in 1980), due to a more rapid expansion of mining, petroleum, and industrial production. (b) Agriculture's share in total investment (private and public) has remained constant at about 14% during the 1970's. Agriculture's share in Government's total expenditures has been 9 to 10% during the 1970's. (c) 3.1 million of Tunisia's 6.6 million people live in rural areas; (d) About 45% of that part of the population living at or below the absolute poverty level are found in rural areas; (e) Agriculture now provides 35% of total employment, down from 50% in 1972. About 30% of available agricultural labor time is unemployed. B. Agricultural Performance 2.03 Natural Resources. Tunisia can be divided into three main ecological zones. The Northern-most zone is separated from the Central zone by a branch of the Southern Atlas Mountains called the Tunisia dorsal. The Northern zone covers 25% of Tunisia's land area, and is characterized by high rainfall (400-1,000 mm), the most fertile land in the country, and produces milk, vegetables, grapes, citrus, meat, and cereals. The Northwest corner of this zone contains productive natural pastures and forests, and is the area in which the Northwest Rural Development Program is to be located. The Central zone (15% of Tunisia) runs between the Tunisian dorsal and a series of large salt lakes (chotts). Central Tunisia receives between 200 and 400 mm of rainfall and is used agriculturally 9rimarily for cereals, olive trees, and as pasture-land for grazing. The region is dominated by alfa grass, esparto grass and large shrubs. The Southern region of Tunisia covers 60% of the country's total land area. It is a pre-desert zone receiving less than 200 mm of rainfall each year. Vegetation is sparse consisting primarily of low growing shrubs. There is some extensive grazing, and some irrigated agriculture based on the use of ground-water obtained from wells. - 3 - 2.04 Land Use. Of a total land area in Tunisia of 16.4 million hectares, land suitable for agriculture and grazing totals 8.6 million ha. Of this, the cultivable area covers 5.2 million ha. Forests and esparto grass cover 1.2 million ha, and 2.2 million ha are used for grazing. About 150,000 ha are irrigated. In 1]978/79, 34% of the cultivable area was planted in cereals, 33% under fruit trees, 6% under forage crops, 2% under pulses, 3% under vegetables, 1% tnder industrial crops, and 21% was left fallow. Tunisia has the potential to irrigate 250,000 ha. 2.05 Production. A primary objective of the Fifth Plan (1977-1981) was to achieve self-sufficiency in food (defined as a balanced commodity trade in agricultural products) by 1981, which implied an average annual increase of 6.5% ir production at constant prices. There was increased emphasis in the Fifth Plan on irrigation, livestock, and farm machinery. Much less emphasis was given to forestry and soil conservation, fruit trees, fishing, research and extension. The Fifth Plan's ambitious growth target was not achieved. However, agricultural value added grew at 3.6% per year in real terms during the 1970's, compared to 1% per year during the 1960's. While favorable weather played a part, the improvement primarily was caused by (i) increased use of modern inputs; (ii) irrigation development; (iii) development of credit facilities serving an increasing number of farmers; (iv) increasingly favorable agricultural prices, and (v) growth in public sector agricultural investment by 40% in real terms during the 1970's compared to the 1960's. Average growth figures hide considerable annual variations in production caused largely by variations in weather conditions, and secondarily by variations in prices. 2.06 Foreign Trade in Agriculture. The value of agricultural exports increased at 10.4% p.a. from 1970 to 1980 in current prices while imports grew at 14.5% p.a. The value of agricultural exports exceeded that of agricultural imports by an aeverage of 20% during the period 1970-1973. The value of agricultural exports was only 75% of imports during the period 1975 to 1978. Part of the problem is that food import prices have increased more rapidly (12% p.a. from 1972-1978) than have the average prices of agricultural exports (8.7% p.a.). There is considerable annual variation in most agricultural exports, with trends difficult to identify. In general, exports of fish and vegetables have increased. Exports of wine have declined as production has declined. Exports of meat, dates, citrus, other fruit, and olive oil have stagnated. For these latter products, most of the reason for stagnating exports is the rapidly expanding domestic consumption. This is caused by population growth coupled with a shift in consumer tastes to these higher value commodities as per capita income grows. Imports consist largely of cereals, sugar, dairy products, vegetable oils, and some meats; for which growth in domestic production does not keep up with demand. 2.07 The Forthcoming Sixth Plan. Work to prepare the Sixth Plan is underway. The overall objective in the agricultural sector will continue to be the achievement of self-sufficiency in major foodstuffs. Agricultural exports are targeted to generate sufficient earnings to cover import needs. The projected expansion of field crops will concern mainly durum wheat, pulses and sugar beet. This would require increasing use of new agricultural technology, principally high yielding varieties, fertilizers and chemical weed control. Investments in irrigation infrastructure, tractors and harvesting equipment would be prominent. The livestock sub-sector would be expanded primarlLy by improving the genetic quaZity of cattle by the introduction of high yielding cows from Europe. Increased animal feed and adequate price incentives are foreseen. Tree crops would be expanded and diversified, but - 4 - olives would remain the most important crop. The areas planted under vegetables would expand. Tree crop and vegetable expansion would depend substantially on the further development of the irrigated perimeters. Increased Government investment will also go to soil and water conservation, agricultural research, and farm input supply facilities. C. Sector Issues Relevant to The Northwest Rural Development Program/1 Scarcity of Land and Water 2.08 The major natural constraints facing Tunisian agriculture are; (a) the scarcity of agricultural land relative to the rural population (2.4 ha of cultivable- and pasture-land per person), and (b) the scarcity of water. These constraints are the primary causes for the land tenure problems discussed below, and the problems of erosion and desertification discussed in Chapter III. With a high man/land relationship, most farms are small, often too small for viable farming under rainfed conditions. As the rural population expands, marginal land is brought under cultivation and expanded livestock herds increasingly overgraze pasture-land. Marginal land in sloped areas erodes when cultivated, particularly under mechanized farming. Overgrazing causes destruction of vegetative cover, accelerating soil erosion and desertification. The solution to the problem of scarce land is to increase production by an intensification of farming practices in order to obtain increases in crop yields per ha. The solution is not to introduce modern extensive farming techniques such as those practiced in North America, or to open up marginal land subject to erosion. A major agricultural effort is therefore required to introduce land enhancing technology rather than labor substituting technology. Land enhancing technology includes irrigation, introduction of high yielding crop varieties, introduction of new crops and multi-crop systems to replace the cereal/fallow rotation, introduction of intensive crop technology (fertilizer, greenhouses, diversification of cropping patterns, integration of crop and livestock production at farm level, and introduction of modern pest and weed control). Tunisia has begun to introduce such technology, but there is scope for improvement. Land Tenure 2.09 There are major land tenure issues in Tunisia including; (a) skewed distribution of private land; (b) extreme fragmentation of farms which reduces the efficiency of operation on the larger ones, and contributes to the lack of viability of the smaller; (c) lack of land titles which are required by the National Bank of Tunisia (Banque Nationale de Tunisie) to extend long-term credit, and which could provide security of tenure thereby encouraging investment in the land; (d) lack of security of land tenure for tenant farmers reducing their incentive to invest in farm assets and to conserve the soil; (e) a high incidence of absentee land ownership and tendency for absentee owners to under-exploit their land; and (f) the tendency for collectively owned land to be poorly managed and over-exploited causing and low productivity. Government has taken measures to correct these problems in irrigated areas by imposing a maximum and minimum farm size, undertaking land consolidation, and issuing land titles. On non-irrigated land, Government has not seriously attacked these problems. These issues are of major importance in the Tunisia Northwest, and would be dealt with under /1 Sector Issues not relevant to the Development Program include primarily those affecting the Irrigation Subsector. Annex 3 discusses these issues. -5- Livestock Development 2.10 Livestock accounts for 28% of agricultural GDP, 4.4% of Tunisia's overall GDP. The size of Tunisia's livestock herd is increasing with cattle aad poultry the most rapidly (increasing by 65% and 200% respectively between 1970 and 1979). Milk and meat yields per animal, for cattle and sheep, are low due to (a) inadequate feed quality and quantity, (b) a frequent lack of water, (c) local breeds of livestock which, though hardy and able to survive under harsh conditions, are poor meat and milk producers, (d) frequent incidence of poor livestock shelters, poor sanitary conditions, inadequate livestock health facilities, (e) general absence of milk marketing outlets (outlets for meat are available; paras. 7.06 and 7.07) Government is attacking these constraints in the irrigated areas and the most fertile dry-farming areas. The method is (a) to increase feed availability, (b) to finance water points (wells, reservoirs, etc.), (c) to distribute credit for livestock shelters, (d) to provide animal health facilities, extension advice on sanitation, (e) to establish milk collection centers, and (f) based on the above improvements, to introduce higher yielding livestock bred from cows imported from Europe and North America. The Northwest Rural Development Program would extend these actions to the Program area. Organization of Government Agriculture Services 2.11 Agricultural services are organized at the Provincial (Governorate) level in Agricultural Commissions ("Commissariat Régional de Développement Agricole," CRDA). CRDA's are intended to provide agricultural extension to farmers, undertake forest management and planting, assist the National Bank of Tunisia ("Banque Nationale de Tunisie," BNT) ta appraise loan applications, collect statistics, and coordinate the various public organizations and project authorities working in agriculture at the Governorate level. In practice CRDA's have not had a major role in coordination. CRDA's have not been able to execute complex development projects due to their lengthy and ctumbersome procedures for contracting and for undertaking investments. CRDA's are prohibited from undertaking credit or commercial operations, collecting revenues, buying and selling farm inputs, or undertaking most works on force account. CRDA's are particularly ill-adapted to serving areas such as that to be developed under the Northwest Development Program characterized by mountainous terrain, a high rate of soil erosion, a poor population dependent on small fragmented holdings, and large tracts of land more suitable for forests and pastures than for cereal production (Chapter III). Agricultural services have been developed to serve the richer areas of the flat plains and irrigated perimeters. The region proposed for treatment by the Northwest Development Program is distributed over five Governcrates, but covers only about 20% of the area of each (maps 15395 and 15396). Because the area is of marginal importance to each of the five CRDA's taken individually, and because of the weakness of the CRDA's, no large-scale development actions have been attempted. 2.12 The Government's response to these institutional constraints has been to create Development Agencies ("Offices") and public enterprîses ("Sociétés Nationales") responsible for (i) functions (e.g., cereal marketing, livestock production, equipment services, input supply, etc.), (ii) irrigation projets at the regional level, and (iii) rural development Projects such as the Northwest Project appraised in this report and the Central Tunisia Rural Development Project already underway. There are several advantages attached to the "Offices". (i) they can coordinate agricultural and other services in - 6 - sufficiently large development areas; the boundary of their authority need not be the small administrative boundaries of the Governorates; (ii) they have commercial/development prerogatives, are semi-autonomous financially, and can invest and operate like commercial enterprises; (iii) they can escape cumbersome administrative regulations and promote action in all relevant domains (marketing, credit, investment, letting contracts, undertaking road works, constructing schools); (iv) they are accountable since they maintain separate accounts, have performance targets, and are audited; and (v) they can provÎde better incentives to staff and for this reason tend to recruit higher quality staff. Their experience in Tunisia has been positive. Agricultural Research 2.13 Agricultural research is undertaken by the National Agricultural Research Institute ("Institut National de la Recherche Agronomique de Tunisie," INRAT) under the authority of the Ministry of Agriculture. INRAT conducts research, from 16 experimental farms, in the areas of plant breeding, agronomy, plant pathology, irrigation, forage production and livestock science. INRAT was successful in developing high yielding durum and bread-wheat varieties suitable to the higher rainfall zones of Tunisia. The major problem of agricultural research is its excessive theoretical orientation and lack of responsiveness to current agricultural problems faced by farmers. It responds to bureaucratic rather than farmer requirements. Rewards are provided to researchers who contribute to publications, rather than for solving practical farming problems. In the 1970's, Government's reaction to the lack of pay-off from research was to provide fewer resources to it. Under the next Development plan, it is foreseen that Government will put increased emphasis on research. Its budget will be increased, and five new research stations will be created. However, a new system for specifying research needs, insuring that appropriate research is undertaken, and obtaining feedback from farmers is needed. More operating resources should be allocated to research. Research is needed on rate of response of plants to fertilizer, forage varieties and systems, pasture varieties, tillage methods, weed control, and range management. This issue would be addressed in the area to be developed under the Northwest Development Program (para. 4.04). Agricultural Extension 2.14 Agricultural extension is provided primarily by three Departments in the Ministry of Agriculture: the Department of Training, Research, and Extension ("Direction de l'Enseignement, Recherche et Vulgarisation") which is responsible for mass communications, the Crop Production Department ("Direction de la Production Végétale") and the Livestock Production Department ("Direction de la Production Animale") which supervise services contacting farmers directly. In 1979, 320 university-trained agriculturalists and 1,200 secondary school-trained agriculturalists were involved in these systems. At the Governorate level, extension agents are attached to the Agricultural Commission (CRDA). The irrigation "Offices" and the cereals "Office" also provide extension services. There were about 1 extension agent per 12,Ç0OZ îarmers in the 1970's, compared to 1 per 200-600 farmers found in World Bank-financed proJects elsewhere in the world. - 7 - 2.15 Agricultural extension is inadequate because (a) extension agents spend only about 20 percent of their time in extension work, and the remainder assisting farmers with credit applications, collecting statistics, and administrative work; (b) extension agents are poorly trained in communications and in extension methods; (c) little extension effort is devoted to small and medium farmers; (d) the work of extension agents has not been systematic; (e) there is little connection between technical advice with respect to use of modern inputs, and the availability of credit to finance inputs. 2.16 In response to these problems which are recognized by Government, the Fifth Development plan proposed 150 extension centers at the CRDA level which would concentrate more on small and medium farmers, introduce high yielding varieties, introduce pulses and forage into the cropping pattern where appropriate, encourage chemical weeding, encourage conversion of old and unproductive orchards to higher value fruit, and introduce better management practices for crops and livestock. Despite the existence of agricultural technologies which have been proven and could be extended, few of the planned extension centers have been created. Extension activities continue to be provided on an ad hoc basis except for those provided in irrigated areas by the Irrigation Project Authorities ("Offices"). The area targeted by the Northwest Development Program has received virtually no extension effort. Agricultural Credit (Annex 14) 2.17 Agricultural credit is provided primarily (80%) by the Government-owned National Bank of Tunisia, ("Banque Nationale de Tunisie," BNT). BNT also provides loans to other sectors. Financing for agricultural credit is provided from BNT's own resources, rediscount facilities of the central Bank, World Bank loans, Government grants, and bilateral sources. Each source of funds is managed separately by BNT. However, lending terms are identical for all BNT lending regardless of the financing source. 2.18 Major credit issues include (a) low loan recovery; (b) lack of agricultural staff at BNT contributing to the lack of contact between BNT staff and farmers; (c) lack of land titles for most farms, preventing them from obtaining long-term credit since BNT requires a land mortgage as guarantee; (d) centralization of loan decisions at the head office in Tunis resulting in an excessively long approval process; (e) lending norms determining BNT loan amounts which in many cases do not adequately reflect either the costs of investments and inputs or the ability ot farmers to contribute equity; (f) the small number of farmers who receive credit (10% of farms), of which most are large farmers; (g) interest rates lower than inflation, requiring BNT to ration credit; and (h) the lack by BNT of adequate monitoring evaluation and cost accounting systems. BNT provides credit only to farms above a minimum size, which excludes the majority of farms. However, BNT provides short-term credit ta farms smaller than the minimum if the owners are members of a Mutual Guarantee Society ("Société de Caution Mutuelle"). Members of such societies are collectively responsible for credit repayment. 2.19 The Bank-financed Third Agricultural Credit Project selected only priority problems to be addressed during Project implementation. The Project requires BNT to increase agricultural staff, to establish a staff training program, and to decentralize some subloan appraisal and approvals to branch offices. The Project also requires that interest rates be positive compared - 8 - to price inflation, and introduces monitoring, evaluation, and cost accounting systems in BNT. Increased agricultural staff; better appraisal, monitoring, and evaluation procedures; and better staff training, should improve recovery performance. Agricultural Training 2.20 Skilled administrative and technical manpower with agricultural training is abundant in Tunisia. There is a growing surplus of agricultural manpower trained to the secondary school level and above. There are 4,190 staff working in the Ministry of Agriculture and CRDA's, of which 789 are university graduates, 830 have two years university equivalent, 1,259 are technical agricultural staff trained at the secondary school level, and 1,312 are technical agricultural staff trained at the pre-secondary level. In 1979, about 45 percent of the 1977-79 graduates of agricultural secondary schools were unemployed. There is also unemployment of the university-trained agriculturalists (about 25 percent unemployment expected in 1980-81 for those with two years unÏversity, 10 percent for those who have a university degree). The staffing of agricultural services will not be a constraint. 2.21 The curricula of most of the agricultural schools are not related to the circumstances of Tunisian agriculture. Texts used have been developed in Europe for European agriculture. There is also no specialized training for extension agents. There are exceptions where innovative training programs have been developed as part of individual projects, but these have not yet had an impact on the national system. Input and Equipment Supply 2.22 Problems which need to be addressed for the less accessible agricultural regions of Tunisia such as the Northwest include the following: (a) Farm demand for equipment exceeds availability. Execution of farm machinery work and machinery repair by SONAM (a public enterprise providing farm machinery services) is often of poor quality and delayed. Mechanics are in short supply. All of these factors contribute to poor soil preparation. (b) High yielding varieties of wheat seeds are generally available. However, there are no high yielding varieties of barley, oats, most pulses, and forage. Vegetable seed is often in short supply. Other than for wheat, little applied research on high yielding varieties has been undertaken in Tunisia. (c) For all farm inputs, poor road access and inadequate storage facilities hinder supply to certain areas. Distribution points for farm inputs are not sufficiently numerous. Some studies suggest that about 10 times the present 270 input supply outlets will be required. (d) Public input supply enterprises are not well organized in backward regions. The Ministry of Agriculture proposes attacking these problems by (a) an investment program in storage, transport facilities, and roads, (b) encouraging private enterprises to compete with public suppliers of farm inputs, (c) encouraging public enterprises which supply farm inputs to compete with one another, (d) with respect to the supply of equipment services: training mechanics, standardizing equipment, re-organizing SONAM, and encouraging the creation of service cooperatives which would provide farm machinery services to members. The Project would implement some of these measures (para. 4.05). Marketing and Prices (Annex 20) 2.23 The prices of wheat, olive oil, wine, beef and milk are fixed by Government at the point of purchase by public processing and wholesale enterprises. There is also a private market for these commodities where the price is free, although strongly influenced by both the official price and Government imports. Consumer prices of some basic commodities (bread, vegetable oils, sugar, milk and beef) are fixed at relatively low levels. Processing and wholesale enterprises receive Government subsidies from the Tunisian Compensatory Finance Fund ("Caisse Générale de Compensation") to finance their operating deficits caused in part by these low resale prices. 2.24 A summary of Bank studies comparing domestic farmgate and world prices for agricultural commodities and farm inputs is as follows; (a) Official prices of cereals paid to producers have increased at a more rapid rate than the world prices of cereals so that at present they are comparable; (b) for pu:Lses and industrial crops there is approximate parity between domestic producer prices and world prices; (c) domestic lamb and milk prices paid to producers exceed world prices, while official beef prices are lower than world prices; (d) the domestic producer prices of most export commodities are lower than world prices due to export taxes and price controls; (e) modern chemical inputs (fertilizer, plant protection), packaging materials, animal feed, animal health services, and irrigation water are heavily subsidized; (f) machinery services, marketing services and hired labor are expensive relative to their costs to the economy (opportunity costs); (g) agricultural credit is subsidized through interest rates which are lower than the rate of price inflation, and by direct subsidies of farmers' equity investments. Subsidies at the producer, processor, and retail levels for cereals and livestock products amount to about 6-7% of Government's current expenditure, and growing (at 25% p.a. from 1976 to 1980). With the likely decline in Tunisia's petroleum production such subsidies are not tenable in the medium term. 2.25 The net result of these effective taxes and subsidies on inputs and outputs operating largely through price policy is an income reduction for producers af most export crops; parity for cereal and pulse production; and subsidy of industrial crops, milk and meat production. This provides an incentive for production to shift toward the subsidized commodities, and away - 10 - from the taxed commodities. No economic justification for this shift is apparent except for milk whose world price is artificially low due to subsidies paid to milk producers in Western Europe. 2.26 Subsidy of fertilizer, other agricultural chemicals, animal feed, credit, and irrigation water encourages excessive demand by farmers able to obtain subsidies, compared to the economic optimum. This demand is not fully satisfied in Tunisia, and informal input rationing results. The low price of animal feed concentrates is particularly significant to the Northwest Project since it tends to encourage animal fattening operations based on imported feed, at the expense of livestock development based on pasture improvement, which is a lower cost operation economically. Large farmers benefit most from subsidies since they use considerably more of the subsidized inputs than do medium and small farmers. Subsistence farmers probably do not benefit at all from such subsidies. It is the smaller farmers who need to be induced to use modern inputs, whereas the larger farmers are likely to use them without the incentive of subsidies. When subsidies are provided, small farmers should be targeted. The Bank is presently involved in discussions with Government on price and subsidy policy. The Bank's extensive studies on the subject, from which the above summary was drawn, have led to the recommendation that input subsidies be progressively removed, with removal compensated for by the removal of export taxes and the increase of agricultural prices to at least world levels, and higher than world levels where justified (such as for milk). These consultations with Government will continue to be pursued through a forthcoming country economic memorandum and an agricultural sector memorandum. D. Bank Involvement in Agriculture, and OED Comments on Previous Projects 2.27 The Bank has supported and is continuing to support Tunisia's agricultural sector through agricultural credit, rural development, irrigation, and fisheries projects. Bank group lending for agriculture in Tunisia began in 1967, and to date, nine Projects have been financed or approved totalling US$168.9 million of Bank/IDA funds. The nine Projects include three irrigation projects (FY75, FY79, and FY80), two Fisheries Projects (FY72 and FY79), a Cooperative Farm Project (FY68), and three Agricultural Credit Projects (FY71, FY77, and FY80). In addition, the objective of the Rural Roads Project (FY78) is to improve agriculture within the zones of influence of the roads to be constructed by the Project (about 1,000 km). 2.28 Performance of Bank-financed projects in the sector has been mixed reflecting the institutional constraints in the sector. The First Irrigation Project included two components of which the more important is located in the Lower Medjerda Valley, intended to rehabilitate a 20,000 ha irrigation system. About 80% of this area has now been equipped with irrigation and drainage facilities; the remainder lacks secondary and tertiary distribution networks. The second component (Nebhana) includes the rehabilitation of existing irrigation, drainage, and road networks over about 5,000 ha. Physical implementation is satisiactory. The Second Irrigation Project (Sidi Salem Multipurpose Project) includes the irrigation of 10,600 ha in the Testour/Medjez el Bab and Cap Bon areas, and aims at preventing the decline of 6,000 ha of citrus in Cap Bon, improving agricultural production on 32,800 ha in the Lower Medjerda Valley, reducing periodic flood damage, generating electricity and supplying about 100 million m3/year of potable and industrial - il - water to the Tunis area. Implementation is satisfactory. The loan for the Third Irrigation Project (Southern Irrigation) was declared effective in September 1980, and has started up satisfactorily. The First Fisheries Project was completed at the end of 1979 with considerable delay. The local institution lending for boats (the National Bank of Tunisia, BNT) experienced low loan recoveries. These problems are being addressed under the Second Fisheries Project which became effective in May 14, 1980, under which agreement was reached on a strategy for improving recoveries. The Rural Roads Project's investment in roads and agricultural infrastructure is progressing on schedule. Agricultural services are to be provided beginning this year (1981) in the zones of influence of the roads. Particular attent;.on w.7ill be given to the impact of the extension messages and the effectiveness of the agricultural credit system established for the Project since these are its most difficult aspects. 2.29 Project Performance Audit Reports (PPAR's) have been issued for the First Agricultural Credit Project and the Cooperative Farm Project. The Tunisia Cooperative Farms Project, signed in February 1967, provided US$18 million for the development of agricultural production cooperatives. The Project was part of a 10-year national program to implement agrarian reform and to consolidate cooperative farming. Project implementation was slow due to technical, managerial, and financial problems. A major change in Tunisia's land reform policy occurred in 1969, when the attempt to convert agricultural land to production cooperatives was abandoned. The Project was substantially revised in 1970, and an amount of US$8.8 million was cancelled. The Project was completed by the end of 1973. The Bank's PPAR No. 968 of January 1976 confirms that many of the Project objectives, namely productivity, production, worker incomes, and institutional viability, were attained. Two other objectives, namely elimination of subsistence farming and incorporation of private land-owners into production cooperatives, had to be abandoned. The First Agricultural Credit Project (1971) provided US$8 million to finance lending by the National Bank of Tunisia ("Banque Nationale de Tunisie," BNT) for farm investments in machinery, dairy development, date palm plantations, and an agro-industrial component for dairy products. The loan/credit was fully disbursed by July 1978, 34 months after the original closing date. The major issue was that Bank group funds lent by BNT had a higher interest rate than did Government funds also lent by BNT. This caused farmers to prefer Government funds, reduced the demand for loans financed from Bank funds, and caused disbursements of the Bank loan to be slower than expected. Under the Second Agricultural Credit Project uniformity of lending terms regardless of the financing source was achieved. The PPAR for the first Project also indicated that mechanization had not yielded the benefits expected, and that more attention should have been devoted to the agro-industrial component which suffered major cost overruns. The Second Agricultural Credit Project is nearly fully disbursed. The loan for the Third Agricultural Credit Project is expected to become effective in April 30, 1981. 2.30 Lessons from the above projects have been considered in the design of subsequent projects. In particular, the Second and Third Agricultural Credit Projects and the Northwest Rural Development Project institute a uniformity of lending terms for credit regardless of the financing source. The creation of cooperatives has not been pushed due to the poor experience under the Cooperative Farm Project. In the Northwest Development Program, farm mechanization has been minimized, with emphasis placed on equipment used with draft animals. OnZy a smail agro-industrial component has been included in the Program (milk collection centers) based on careful cost evaluation. More emphasis would be given to farmer participation in Program execution. The - 12 successful institutional arrangements made for the irrigation projects, involving the creation of "Offices," have been replicated for the Northwest Development Program. III. THE AREA TO BE DEVELOPED UNDER THE PROGRAM A. Location, Climate, and-Land Resources 3.01 Development Program actions would be undertaken within an area covering 311,000 ha of the Northwest Region of Tunisia. It represents about 2% of the country's land surface. The area to be developed is divided into three distinct sub-zones (map 15395) named Kroumirie-Mogods, Oued Zarga/Oued Khil and Oued Tessa. The sub-zone names are given in the case of Kroumirie-Mogods because the major geographical feature is the mountain range of the same name. Similarly, Oued Zarga/Oued Khil and Oued Tessa are rivers which are the major geographical feature of these sub-zones. The Kroumirie-Mogods sub-zone is the northern-most, and covers 154,000 ha of mountainous terrain. It has extensive forest, high rainfall (annual averages range from 600-1,500 mm), limited cropped area (40%), and a population of 100,000 mostly subsisting on agriculture. The Oued Zarga/Oued Khil sub-zone is to the Southeast of Kroumirie-Mogods and surrounds the city of Beja. It covers 65,000 ha, mostly mountainous, annual average rainfall varies from 500-800 mm, a large area is cultivated (80%), there is a serious erosion problem, and the population of 30,000 depends an agriculture. The Oued Tessa sub-zone is the Southern-most and lies to the east of the city of Le Kef. It covers 91,500 ha of hilly country, annual average rainfall varies from 400-800 mm, it is extensively cultivated (63%) and has a population of 32,000. The Oued Zarga/Oued Khil, and Oued Tessa sub-zones are important watersheds. In moving from the first to the third sub-zone, the extent of the mountains, the natural forest and the average annual rainfall decreases. Rainfall is shown in map 15396. B. Population, Revenue, Employment 3.02 Population density varies from 32 people per km2 in Oued Tessa, 45 people per km2 in Oued Zarga/Oued Khil to about 70 in Kroumirie-Mogods. Of the 162,000 people in the Program area, about 140,000 are supported by agriculture. There are 14,600 farms and 20,420 farm families including the landless. There is a significant migration from the Northwest to urban areas and abroad. About 15-20% of the male population leaves the region at least once per year looking for temporary work. The population of the region is growing at about 1.5% p.a. compared to 2.5% p.a. for Tunisia as a whole. The reason is poverty, with 40% of the area's rural families having incomes at or below the absolute poverty level compared to 20% for Tunisia as a whole. The average expenditure per person in the Northwest (based on the 1975 census) is 60% of the national average. Agricultural work occupies only 60% of the available work time of the area's agricultural labor, suggesting considerable underemployment. This underemployment is particularly pronounced in KITtoirre-togoms '1ete it is estiumateX at 5.l ol available liabor titme. - 13 - C. Land Use and Ownership 3.03 Land Use. Land use is as follows in the area to be developed: Percent of Land Area Kroumirie-Mogods Oued Zarga/ Oued Tessa Oued Khil Cereals and pulses 24 48 38 Vegetables, forage, industrial crops 6 21 5 Fallow 7 8 16 Fruit trees 4 4 4 Forest and Pasture 51 8 34 Non-agriculture 8 il 3 TOTAL 100 100 100 3.04 Land Ownership. Land under crops, pasture or fruit trees belonging to individuals, cooperative or state farms is distributed as follows; Farm size Kroumirie-Mogods Oued Zarga/Oued Khil Oued Tessa (ha) % of farms % of area % of farms % of area 7. of farms % of area less than 10 83 24 65 12 63 15 11-20 10 18 18 il 20 17 21-50 5 22 il 17 9 17 51-100 1 8 5 40 6 26 greater than Ž100 1 28 1 20 2 25 TOTAL 100 100 100 100 100 T7É Forestry land is owned by the State. Non-agricultural land is owned both by the State and by private individuals. As discussed in para. 2.09, land distribution is skewed in the area, with the smallest farms often non-viable. 3.05 Erosion, Soil Degradation and Deforestation. The most fundamental constraint to improved well-being of the population in the area, to which the Northwest Development Program is largely addressed, is soil erosion and deforestation. The Program area was selected on the basis of the criteria of severest soil erosion and deforestation. Of its 311,000 ha, 162,000 ha are seriously threatened. The remainder is (a) already under forests and pastures (29%), (b) used for non-agricultural purposes (7.6%), (c) cultivated in the plain and not subject to erosion (8.5%), or (d) to be submerged behind a dam (2.2%). Program soil conservation and agricultural intensification are to be undertaken only on the 162,000 ha which are threatened, or which can be improved with the Program's technical agricultural packages. - 14 - 3.06 The causes for erosion and deforestation include the following; (a) A larger number of livestock exist than can be supported by feed production from natural pastures and from annual crop residues. Natural pastures and forest areas are overgrazed as a resuit, causing destruction of the natural vegetative cover and preventing the natural regeneration of forests. As the natural vegetative cover is lost, water run-off erodes the soil. Soil is carried by water into the river systems. In the Project area, the Sidi Salem dam now under construction with Bank assistance will store about 500 million m3 of water from the Medjerda River. It is estimated that 2.3 million m3 of sediment is transported each year from the Program area into the Medjerda, and the situation will deteriorate unless action is taken. The sediment from the Program area alone will therefore fill up the Sidi Salem reservoir at a rate of .5% p.a., increasing in the future. (b) Soil erosion also results from abusive cultivation practices including the ploughing of hillsides from top to bottom rather than in contours, thereby accelerating the transport of soil by water down the hillside; the cultivation of steep slopes where even contour farming will not prevent water run-off from carrying away soils; the predominance of a cereal/fallow rotation which leaves soil bare and susceptible to erosion; and overutilization of the forest by the local population for firewood and charcoal. Destruction of forests has been so rapid that in some areas dried animal manure is substituted for fuelwood. Since manure is the major source of fertilizer for village vegetable gardening, vegetable yields are declining. D. Production 3.07 Agricultural yields in the Program area are also low (para. 7.03) as the result of the cultivation of crops in unsuitable conditions (highly sloped, poor soil), and limited use of appropriate seed varieties, fertilizer, plant protection, and farm implements. Livestock are fed from natural vegetation in pastures, forests, and fallow land, combined with limited cultivated forage. Livestock development is constrained by the factors discussed in para. 2.10. Without outside intervention crop and livestock yields will fall further because continued erosion will reduce the chemical and physical fertility of the soils. E. Government Services and Infrastructure 3.08 Lack of Government Services. Inadequate Government services has combined with the natural constraints of the Program area to cause agricultural stagnation. Major problems include those discussed in Chapter II, particularly the poor organization of agricultural services, the land tenure constraints, inadequate extension and research, a credit system whiceh does not serve the area, input supply problems, and Government milk price policy (para. 7.06). - 15 - 3.09 Roads. The principal road system connecting towns in the large valleys and plains is good. The road network in the upland and mountain areas of the Northwest, where activities of the Northwest Development Program are to be concentrated, is limited to a rudimentary system of unimproved earth roads, many of which provide only limited access even in the dry season. There are about 800 km of roads in the Program area of 3,110 km2 (0.39km/km2) of which 300 km are paved. About 400 km are unclassified roads, mainly unimproved earth tracks which are outside the responsibility of Tunisia's highway department ("Direction des Ponts et Chaussées," DPC) of the Ministry of Public Works. Limited access within the Program area prevents efficient execution of extension and marketing activities, and hinders delivery of inputs to farmers. Social welfare is affected by inadequate access to schools, health, and administrative facilities. 3.10 Water Supply. Water supply is inadequate in both quantity and quality for the healthy maintenance of the population and for the development of livestock. Scarce water presently available is provided from traditionally constructed and usually unsanitary wells and reservoirs. 3.11 Education Facilities. Since independence, Tunisia has undertaken a massive effort toward development of its human resources. The adult literacy rate increased from under 15 percent at the time of independence to 55 percent by 1980, reflecting an important investment in education. The Program area has seen its facilities improve much more slowly. About 60% of the males and 38% of the femaleas of school age attend school compared to 83% and 77% in Tunis respectively. Many communities in the Program area have no access to schools. The 75 schools in the Program area now have 311 classrooms serving more than 20,000 students, for a ratio of 65 students per classroom. F. The Sedjenane Range Management and Beja Soil Conservation Projects 3.12 The depressed situation of Northwest Tunisia has been recognized for some time, and in 1973 the Government requested the Bank to finance a livestock Project in Sedjenane, which is in an area adjacent, and with identical characteristics, to the Kroumirie-Mogods region. The Project proposal was based primarily on stall feeding of imported high yielding breeds of livestock. The Bank rejected the Project because of inadequate justification. Government, with German technical assistance, then developed a fundamentally new strategy for the Sedjenane region in a pilot project. It is the successful experience of this subsequent pilot project, along with the successful soil conservation and forestry works undertaken in the Beja Project, on which the Development Program appraised in this report is based. The Sedjenane Project 3.13 The Sedjenane Project has obtained intense farmer collaboration, and farmers outside the Project area are pressing for its extension to their areas. The Sedjenane Project strategy is based on the idea that soil erosion can only be stopped with the collaboration of the population causing the erosion, and that this collaboration can be obtained only by assisting the population to improve their incomes and well-being at the same time that they combat erosion. The Project therefore enters into an informal agreement with the population in which the Project provides services discussed below, and the - 16 - community is obligated to respect and maintain Project works, introduce new farming methods designed to reduce erosion and water run-off, pay user charges and reimburse credit. Project services include the following: (a) Development of livestock based on (i) installation and maintenance of permanent pastures on relatively unproductive land subject to erosion in order to increase feed available for livestock while conserving the soil (pastures are an efficient soil conservation technique and permit increased milk and meat production); (ii) introduction by the Project's extension service of forage crops to supplement pasture as an animal feed and to increase vegetative cover of soils as a soil conservation technique; (iii) introduction of an animal health program, improved livestock shelters, genetically superior livestock, increased water supply from wells, and organized milk collection. (b) The Project established its own extension/research system which studied and introduced new crops for the area (forage crops, sugar- beet, tobacco, vegetables), more intensive agricultural techniques and modern farm inputs in order to increase crop yields. Extension is provided out of intervention centers which also supply farm inputs, have milk collection facilities, and provide livestock reproduction services. (c) The Project authority (under the direction of the National Office for Livestock Development) has provided agricultural credit in-kind from its own resources, in conjunction with extension advice. Inputs and investments as defined in the various extension packages are distributed in this way. Credit recovery rates have exceeded 90%. (d) The Project has assisted farmers to undertake land consolidation where necessary to attack the problems of land fragmentation. This has been done by proposing a land consolidation plan, obtaining farmers agreement, and after appropriate modification of the plan based on farmer reactions, the issuing of certificates of land possession to farmers legalizing new ownership. (e) The Project has installed farm access roads and domestic water supply. (f) Communities have been organized into "management committees" to permit them to negotiate with the Project, and to eventually take over pasture management, crop and milk marketing, and maintenance of other Project works. Project operation and maintenance costs are partly recovered through user charges for permanent pastures, and through price margins on milk bought and sold by the Project. 3.14 The area to be developed by the Sedjenane Project covers about 16,000 ha. The net value of incremental milk, meat and crop production on areas developed so far reached $6 million in 1980, compared to investment, operation and maintenance costs currently reaching $2.5 million. An estimate of the economic rate of return to the Sedjenane Project is 10%. About 31,000 people have benefitted directly or indirectly trom the Project. - 17 - The Beja Soil Conservation Project 3.15 The Beja Soil Conservation Project, managed by the Forestry service, is located in the Oued Zarga/Oued Khil region. Its strategy is directed to the perceived need by the population to cultivate land subject to erosion in order to assure subsistence. The land-use table in para. 3.03 shows that a significantly greater percentage of land in the Oued Zarga/Oued Khil and Oued Tessa areas is c:ultivated (about 70% on average) than in the Kroumirie-Mogods area where Sedjenane is located (40% cultivated). The problems of soil erosion are much more acute in the Oued Zarga/Oued Khil and Oued Tessa areas, aggravated by the cultivation of more marginal land than in Sedjenane. The introduction of permanent pasture in place of cultivation was not attempted as it was in Sedjenane where the land constraint is less pressing. The Beja strategy is to (a) introduce soil conservation works on cultivated land subject to erosion (including contour banks, gully control works, reforestation), and (b) introduce cultivation techniques such as contour farming consistent with soil conservation. The Project has reforested 1,600 ha of land during 1977 to 1979, and has maintained 9,100 ha of forest. About 35 km of forest roads have been opened and 334 km maintained. Contour banks have been installed on 2,500 ha of cultivated land, while 2,230 ha have had grass markers installed to indicate the contour facilitating contour farming. This has been done on a budget of D 590,000 (US$1.5 million) p.a. (in 1979 prices). This strategy has been successful in reducing erosion in the areas treated and in expanding production of forestry products. 3.16 The Northwest Rural Development Program replicates the Sedjenane Project on a larger scale in the Kroumirie-Mogods area; and combines the strategy of the Sedjenane Project with the soil conservation and forestry works of the Beja Project in the Oued Zarga/Oued Khil and Oued Tessa areas (see map 15395). IV. THE DEVELOPMENT PROGRAM A. Introduction 4.01 The Project recommended for financing is a 5-year time slice of a 15-year Development Program for 311,000 ha of Tunisia's Northwest region. As indicated in para. 3.05, actual Program actions will be undertaken on the 162,000 ha within this area subject to soil erosion or susceptible to crop production increase with the remainder being either non-agricultural land or already under forest. The objectives of the Development Program are to (a) increase the income and improve the nutrition, health, and education of the region's population, (b) reduce soil erosion, arrest the decline in agricultural productivity, and reduce the rate of sedimentation of the Sidi Salem reservoir (para. 3.06), (c) create employment possibilities, and (d) develop local energy resources through production of fuelwood. The 5-year time slice Project is described in Chapter V. Assurances were obtained at negotiations that the Government would implement the Program in line with the objectives and investments begun under the Project. - 18 - B. Program Strategy 4.02 The strategy is to divide the 162,000 ha to be treated by the Program into homogeneous micro-zones, each with an average area of 2,000 ha. Each micro-zone would be provided with a detailed development plan linked to the development strategy for the Program. The criteria for delineation of a micro-zone include (a) land owned or used by a community which can be organized into one or more cohesive groupings (para. 6.11), and (b) topographical and agricultural characteristics permitting micro-zone boundaries to be established. The development plan for a micro-zone would be established with the participation of the community's organization (such as the management committees organized at Sedjenane). Micro-zone plans would contain actions and investments similar to those undertaken in the Sedjenane and Beja Projects. In addition to the micro-zone plans, the Program would undertake actions serving several micro-zones including road improvement, agricultural research, and other agricultural support services (section C below). A Development Authority ("Office") located in the city of Beja was established in March 1981 to implement the Program (para. 6.01). Each sub-zone has its own headquarters (at Sedjenane for the Kroumirie-Mogods sub-zone, Beja for the Oued Zarga/Oued Khil sub-zone, Le Kef for the Oued Tessa sub-zone; see map 15395). Table 1, page 24 shows the build-up of staff needs over time. It also shows the build-up of area treated and farms assisted by the Development Program. C. Description of Program Components Measures to Decrease Soil Erosion (Annexes 6, 7, and 11) 4.03 This component is designed to address the problem discussed in para. 3.06, and includes the following actions; (a) On about 38,200 ha of land where changes in cultivation practices alone can reduce soil erosion while increasing production, such changes would be introduced (contour farming, maintenance of vegetative cover for as much of the year as possible, introduction of different crops on alternate parcels down hillsides to reduce water run-off). On about 21,600 ha of this land, grass markers following the contour will be planted to facilitate contour farming. (b) On land where changes in agricultural practices alone will not satisfactorily arrest erosion, more expensive operations will be undertaken including contour bank systems on 3,300 ha (which trap soil carried by rain-water run-off), and the planting or maintenance of permanent pastures (about 72,700 ha). Land preparation in contour banked areas and grazing on permanent pastures would be supervised by the Development Authority. (c) In an area of about 22,100 ha where cultivation must be stopped in order to prevent erosion, but where soil conditions do not permit introduction of permanent pastures, planting of forests would be undertaken. (d) On about 1,700 ha of land surrounding gullies and river beds, where overgrazing and water run-off are causing erosion, actions would include fencing off and supervised grazing, water control works, and afforestation (for fuelwood and forage). - 19 - Specific works would be determined for each area in its detailed micro-zone plan. Benefits would include increased agricultural production due to a more intensified system of crop and livestock production, increased output of fuelwood, and reduced soil erosion (Chapter VII). Compensation would be paid by the "Office" to those farmers suffering a decline (short-term) in food production or income, as a result of these works (para. 4.14). Physical implementation is shown in table 1, page 24. Agricultural Development 4.04 Extension Service and Research Component (Annex 9). Agricultural development would be based on the soil conservation measures discussed above combined with extension, research, credit, input supply, and correction of certain land tenure problems. The extension component would include the following; (a) Intervention centers would be created for each 4,000 ha (approximately). A center would contain 2 to 3 extension agents to provide about 1 agent per 200 farms. (b) A systematic extension system based in part on the training and visit system would be created. It would introduce the new farming practices, crops, inputs, and equipment foreseen in the Program's technical packages, and modified in the future by the Program's research component. The system would be a model for Tunisia's extension system since it recognizes the extension problem as not one of a lack of extension messages and better agricultural technology to extend, but rather one of a presently inadequate system for communicating these messages, except at Sedjenane and in irrigated areas. (c) Agents would spend most (75 percent) of their time in extending farming techniques, described and periodically updated by subject matter extension specialists. The subject matter specialists, located at sub--zone headquarters (at Sedjenane, Beja, and Le Kef), would prepare the extension messages and supervise extension staff. They would be assisted initially by foreign technical assistants (para. 4.12). (d) Extension agents would also provide advice to farmers on land exchanges, based on the proposals made in the micro-zone plans (para. 6.08). (e) Applied research would be undertaken in the area to be developed under the Program by the National Agricultural Research Institute (INRAT) based on an agreement ("convention") with the "Office" and following terms of reference provided by the "Office." INRAT would use its own staff and facilities. The "Office" would pay operating costs incurred by INRAT in carrying out the research. Research themes would include a comparative study of different soil conservation measures as a function of technical and economic criteria, analysis of new forage crops tbo introduce, management of livestock in a semi-intensive system, and such research as necessary to resolve practical farming problZems as they appear 100 ha farms 1.7 17.9 39.3 TOTAL 100.0 100.0 100.0 Income benefits include incremental farm income, incremental imputed income from increased fuelwood production obtained by the population (recovery by Government is excluded), and wage income. Distribution of benefits is inequitable, as is necessarily the case given the inequitable distribution of land. However, benefits are more equitably distributed than the land due to /i US$106.5 million/115,185 man-years employment for 15-year period. - 44 - (a) the large increase in wages generated by Program works and increased agricultural activity accruing almost entirely to the landless, (b) the greater intensification of agriculture on small farms than on large resulting in a greater increase in income per hectare on small farms, (c) the use by the smallest farmers of state land under the Program, and (d) the equitable distribution of fuelwood. F. Economic Analysis (Annex 20) 7.10 Approach. Economic benefits equal the incremental value of crop, forestry and livestock production projected to result from the Program, valued at economic prices (defined below). Costs include incremental farm input costs, Program investment costs, and Operating costs, also valued at economic prices. The overall economic rate of return is that encompassing all such benefits and costs. The economic analysis revalues those outputs, inputs, and investments which are tradable on world markets at border prices, adjusted for handling and transport costs within Tunisia. Outputs and inputs which are not tradable on world markets (such as Tunisian labor, cement, transport, draft animals, marketing costs, etc.) are valued at the marginal economic cost of their supply for Program purposes. This is estimated by decomposing the domestic cost of production into foreign exchange costs and primary inputs using an input-output table of the economy. Foreign exchange costs are valued at border prices, and primary inputs such as labor at their opportunity cost. Important causes for differences between market prices and economic prices are Tunisian indirect taxes and tariffs, import quotas, the excess of wages for unskilled labor over their opportunity cost and prices fixed by Government either above or below world prices as discussed in Chapter 2. 7.11 Relationship of Economic Prices to Domestic Prices. Ratios of economic prices adjusted for relative price inflation through 1990, to financial prices for principle commodities and inputs are as follows: Outputs Inputs Durum wheat 1.26 Super phosphate 2.00 Construction .60 Bread wheat 1.20 Ammonium nitrate 1.90 Livestock .92 Beef 1.59 Herbicides 1.30 Equipment .80 Lamb 1.13 Tractor services .78 Vehicles .69 Milk .80 Animal feed 2.14 Professional staff .70 Beans 1.02 Cereal seed 1.06 Operation and Maintenance Costs .60 Potatoes .97 Pulses seed .91 Farm labor .50 Tobacco 1.02 Forage seed .91 Wells .80 Vegetable seed .91 Marketing Costs .75 As indicated in paras. 2.24 and 2.26, these ratios suggest considerable input subsidies (financial prices lower than their economic costs) for fertilizer, chemical inputs, and animal feed; and significant price distortions for milk and beef. The high ratios for durum wheat and bread wheat reflect the projection of relative world price increases for these commodities by 1990, and do not represent price distortions. The low ratios for construction, operation and maintenance costs reflect the high proportion of labor in these - 45 - operation and maintenance costs reflect the high proportion of labor in these costs. 7.12 The benefil: build-up period projected for agricultural production is conservative involving a combination of (a) the 15 years required to complete investments in all of the Program's micro-zones, (b) the 6-year period required to begin Program innovations on all participating farms in each micro- zone, (c) the assumption that only 90% of farms would participate in Program actions at full development, and (d) the 6- to 10-year benefit build-up period on individuaL farms after innovations are begun. The result, rounded off, is as follows (Annex 20 for details): % of Total Incremental Agricultural Benefits (Approximate) Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21-30 O 0 0 1 2 4 6 10 15 20 25 35 4550 6070 80 85 90 95 97 100 Benefits from reduced sedimentation of the Sidi Salem dam reservoir resulting from the Program were estimated as the incremental amount of water stored as the result of reduced sedimentation with the Northwest Development Program, multipled by the economic value per m3 of water as established in the Bank's appraisal report for the Sidi Salem multipurpose Project (Report No. 1215-TUN). Benefits of the Program's forestry component were computed as increased off-take of forestry products resulting from the Program. 7.13 The economic rate of return to the entire 15-year Program is estimated at 16%. Estimation of separable rates of return to various Project components would be misleading since each contributes jointly to overall benefits. Soil conservation and agricultural intensification, credit, extension, research, roads, etc., have no separable benefit. G. Program and Project Risks 7.14 The assessment of risks is based to a substantial degree on the findings by the Bank's Operations Evaluation Department with respect to agricultural Projects ./1 (a) Bank experience is that success in institution building requires the full backing of the borrower. Project institution building should be linked to the policy environment and to overcoming general sector constraints. Under the Northwest Development Program, each of the institutional reforms foreseen is proposed by Government. These institutional reforms were designed to overcome constraints to successful Program implementation observed at the sector level. They respond to the existing policy environment. /1 IBRD Report No. 3117, "Sixth Annual Review of Project Performance Audit Results," September 1980. IBRD Report No. 3102, "Annual Report on Operations Evaluations," August 1980. - 46 - (b) Bank experience has been that technical agriculture packages must be adapted to the agricultural, economic, policy, and social environments. Market conditions including prices must be favorable or there is substantial risk that such packages will not be accepted by farmers. The packages must be supported by adaptive research. The technical packages developed for the Northwest Development Program were adapted to the specific conditions of the region, in particular the conditions of severe soil erosion, hillside farming, social factors such as land tenure, organization of production, etc. The packages have been successful elsewhere in Tunisia. Prices are presently favorable to producers. An adaptive research component has been included in the Program. (c) Farmer behavior in response to Projects is often incorrectly predicted. During preparation of the Northwest Development Program, farmer response was obtained to design recommendations. Farmers have participated in preparation and will negotiate with the "Office's" planning teams over the content of micro-zone plans. An agreement will be undertaken with the population of each micro-zone. (d) Delays in agricultural projects are common. This was handled for the Northwest Development Program by avoiding the tendency to include too many actions in a short (5- to 6-year) period. Rather, the Program is expected to require 15 years to complete, with the Bank financing a time slice of 5 years. (e) Bank experience has been that it is often preferable for agricultural projects to be implemented by existing agencies. This avoids conflict between new and existing institutions, avoids staffing problems which new institutions often face when becoming established, avoids the weakening of the existing institutions which is often the result of creation of new ones, and provides for continuity after Project completion. For the Northwest Development Program, it was determined with Government that existing institutions are unable to implement Program actions, and that a new institution was required. The new institution would be a permanent organization, assuring upkeep after completion. Such institutions are becoming part of the administrative environnent in Tunisia (para. 2.12). (f) There are the normal risks of a reduction in commitment to the Program by Government resulting in reduced manpower or financial resources allocated to it or its termination upon completion of the 5-year time slice Project, unforeseeable difficulties of implementing institutional reforms (credit, input supply, marketing, extension, price policy, etc.), or failure of Government to provide an adequate outlet for milk. These would all serve to delay completion and reduce benefits. 7.15 Sensitivity Analysis. The risks discussed above would involve either reductions in crop yields compared to those projected (risk b), lower participation rates among farmers (risk c), delays or cost overruns (risks d and f), improper maintenance causing benefits to fall (risk e), failure to complete the entire 15-year Development Program (risk f), or other policy changes causing - 47 - any or all of the above to occur. Quantification of these risks results in the following; Rate of Return (%) Base Case 16 Crop, forest, and livestock yields 20% less 12 Participation rate 30% less il Project Investment costs 20% greater 13 Benefits delayed 2 years compared to costs 12 Forest yields 20% lower 14 Combination of 20% decrease in yields, 30% less participation 7 5-year time slice completed, but not followed up by remainder of 15-year program 7 It is also possible that farmer participation rates would be higher than projected, relative prices more favorable to agriculture, or yields higher. If crop, forest and livestock yields are 20% higher, the rate of return would be 19%. Nonetheless, the sensitivity tests suggest that the Development Program is risky. The monitoring and evaluation system would have as a major task the observation of benefits so as to permit reduction in cost and/or change in tactics if benefits are not being generated as foreseen in order to maintain the rate of return of the Program above 10%. The reason for proposing Bank financing for a 5-year time slice of the Development Program was to permit a full assessment of initial benefits, costs, and strategy after 5 years facilitating redesign in a subsequent time slice if necessary. A period shorter than five years would not be long enough to begin to observe farmer response. VIII. RECOMMENDATIONS 8.01. During negotiations, assurances were obtained from the Government of Tunisia on the following: (a) That Government implement the Program in line with the objectives and investments begun under the Project (para. 4.01); (b) That schools be fully operated and maintained by the Ministry of Education (para. 4.11); (c) That Government employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank (para. 4.13); (d) That user charges for pastures, village woodlots, and farm equipment services sufficient to cover operation and maintenance costs, and a proportion of investment costs; and price margins on output marketed and inputs distributed by the "uOffice,l" would be applied no later than June 1, 1982 and reviewed annually in consultation with the Bank (para. 4.17); - 48 - (e) That Government undertake the three studies cited in para. 5.01 under terms of reference satisfactory to the Bank, to be completed and submitted for comment to the Bank by January 1, 1984. (f) That Government establish a Project agricultural credit account with BNT and provide all funds required (para. 5.04); (g) That Ministerial decrees be issued when necessary declaring specific soil conservation works to be of public interst ("travaux d'utilité publique") in order that the required zones within the Project area be available for these works, and continue to be available for the purposes of the Project (para. 6.09). (h) Under arrangements established in consultation with the Bank, Government would provide compensation to those suffering a loss as a result of the Project (para. 6.10); (i) That the credit system described in paras. 6.12-6.14 become operative no later than January 1, 1982 to permit credit distribution in 1982, and a condition of disbursement of the credit component would be that these arrangements had been entered into (para. 6.16); (j) That Government require BNT to develop its credit operations in the Project area in order to satisfy future credit demand (para. 6.16); (k) That by June 30, 1982, an arrangement acceptable to the Bank be established between the "Office" and INRAT specifying the obligations of each in regard to agricultural research (para. 6.17); (1) That a monitoring and evaluation system be established by December 31, 1982, and that the "Office" provide to the Bank at a time mutually agreed by the Borrower and the Bank, but no later than the closing date of the Project, a completion report (para. 6.20); (m) That the "Office" and BNT maintain accounts to be audited annually along with certificates of expenditures, as discussed in para. 6.21. Audited accounts and audit reports to be sent to the Bank and on-going audit results be made available to Bank missions (para. 6.21); (n) That Government permit the retail price of fresh milk to reflect the premium attached by the market to fresh milk relative to reconstituted milk (para. 7.06); 8.02. With these conditions and assurances the Project would be suitable for a loan of US$24 million to the Government of Tunisia for the Project, repayable in 20 years with a 4-year grace period. US$400,000 of this would be made available as retroactive financing for technical assistance construction and equipment obtained after March 31, 1981, and prior to loan signature. - 49 - ANNEX 1 Table 1 TUNI SIA STAFF APPRAISAL REPORT OF THE NORTHWEST RURAL DEVELOPMENT PROJECT Schedule of Estimated Disbursement of Bank Loanz/î Part of Cost Incurred IRBD Fiscal Year to be Refinanced Disbursement Cumulative and Quarter Ending by the Bank in Quarter Disbursement … ------------------ (US 0oo )… Project Year FY82 1 Decemùber '81 1,050 1 March. '82 1,050 1 June '82 1,050 500 500 FY83 1 September '82 1,050 550 1,050 2 December '82 1,040 1,050 2,100 2 March '83 1,040 1,050 3,150 2 June '83 1,040 1,050 4,200 FY84 2 September '83 1,040 1,040 5,240 3 December '83 1,160 1,040 6,280 3 March. '84 1,160 1,040 7,320 3 June '84 1,160 1,040 8,360 FY85 3 September '84 1,160 1,160 9,520 4 December '84 1,240 1,160 10,680 4 March. '85 1,240 1,160 11,840 4 June '85 1,240 1,160 13,000 FY86 4 September '85 1,240 1,240 14,240 5 December '85 1,510 1,240 15,480 5 March. '86 1,510 1,240 16,720 5 June '86 1,510 1,240 17,960 FY87 5 September '86 1,510 1,510 19,470 6 December '86 - 1,510 20,980 6 March '87 1,510 22,490 6 June '87 1,510 24,000 (I This disbursement table assumes that the Bank loan becomes effective in September 1981. ANNEX 1 - 50- Table 2 Procurement Procedures (Five-Year Time Slice) Contract (without Price Contingencies) Amount /a Method of Supplïed tô Farmers (US$ million) Procurement or Used by Office a) Construction for "Office" 1. Headquarters buildings, repair shops 1.4 LCB Office 2. Intervention centers, milk collection, animal health facilities 3.3 LCB Office 3. Water points 1.1 NC and FA Office and Farmers 4. Roads (excluding equipment and some salaries) .1 FA and NC Office 5. Schools 1.0 LCB Office b) Equipment 1. Farm equipment for the "Office" 2.0 ICB Office 2. Farm equipment for private farmers 0.6 ICB and ILS Office and Farmers 3. Soil conservation, pasture, forest, road building equipment 5.0 ICB Office 4. Automobiles 1.4 ICB Office 5. Equipment for milk collection centers, and livestock health 0.6 ICB Office 6. Equipment for repair shops, construction, extension 1.6 ILS Office c) Soil Conservation and Forestry Works 7.8 FA, NC and LCB Office d) Livestock 1. For reproduction (bulls and rams) 0.2 ILS Office 2. For farmers (cows, sheep) 0.2 NC Farmers e) Stables 0.4 NC Farmers f) Fruit trees 0.3 NC Farmers g) Farm Inputs for Farmers (incremental) (Seeds, fertilizer, concentrate, other 0.3 NC and ILS Office and Farmers chemicals) /b h) Consultants German technical assistance 1.5 German Government Office Procedures i) Consultants Other 2.0 BP Office j) Studies 0.9 BP Office k) Research 0.6 NC Office 1) Operation, Maintenance, and Staff costs 16.2 FA and NC Office Total 48.5 Price Contingencies 13.0 TOTAL 61.5 /a In constant 1980 dollars equivalent. Detailed cost estimates from which these contracts are estimated are shown in Annex 17. /b The amount shown is total incremental short-term credit for these items, consistent with the Cost table. Total contract amounts would be considerably higher. LCB = Local Competitive Bidding ICB = International Competitive Bidding NC = Negotiated Contract FA = Force Account ILS = International and Local Shopping: minimum 3 quotations BP = Bank Procedures - 51 - ANNEX 2 TUNISIA Page i STAFF APPRAISAL REPORT OF THE NORTHWEST RURAL DEVELOPMENT PROJECT DOCUMENTS IN PROJECT FILE A. Implementation Volume of the Northwest Tunisia Rural Development Project Appraisal Report (see Table of Contents for Annex Titles). B. Selected Reports and Studies on the Agricultural Sector in Tunisia. 1. Analysis of Economic and Social Prices for Tunisia, Gordon Hughes, (1980). 2. "Annuaire Statistique de la Tunisie," Institut National de la Statistique, Ministère du Plan; years 1978-1979. 3. Basic Documents Prepared for the Fifth Agricultural Plan by the Ministry of Agriculture. 4. "Budget Economique 1980, la Production Agricole," Ministry of Agriculture, December 1979. 5. "Enquête Agricole de Base," Volumes for 1975-1979, Ministère de l'Agriculture. 6. "Enquête Nationale sur Le Budget et La Consommation des Ménages, 1975," 1 Vol., (1978). 7. "L'Emploi Agricole dans le Nord-Ouest de la Tunisie," Ministère de l'Agriculture, (1980). 8. "L'Evolution Récente du Secteur Agricole et Sa Place Dans l'Economie Tunisienne," Ivan Bergeron (draft), ( 1979). 9. "Note d'Orientation, la Politique Agricole au Cours du VIe Plan," Ministry of Agriculture, October 1980. 10. "Projet de Crédit Supervisé (A.P.M.A.N.E.), Etude de Suivi et d'Evaluation," Centre National des Etudes Agricoles, January 1980. 11. "Rétrospective Décennale de l'Agriculture 1970-1979," Ministry of Agriculture, (1979). 12. "Rétrospective Décennale de l'Elevage 1970-1979," Ministry of Agriculture, (1979). 13. Statistiques du Commerce Extérieur (Publication Périodique). 14. TUNISIA Irrigation Subsector Memorandum, IBRD Report No. 2997-TUN., June 16, 1980. 15. TUNISIA Pricing Study Background Paper No. 1; "The Net Impact of Government Intervention on Producers Earnings per Unit of Output," IBRD, December 1980. 16. Staff Appraisal Report of the Third Agricultural Credit Project, IBRD, November 1980. 17. Projet de Développement Agro-Sylvo-Pastoral du Nord-Ouest Tunisien, Document de Travail No. 1, J. Poupon, December 1976. - 52 - ANNEX 2 Page 2 C. Studies Directly Related to the Northwest Project 1. "Aménagement des Sous-bassins Versants de l'Oued Tessa Inférieur," Ministry of Agriculture, (1980). 2. Développement de la Production de Viande Bovine dans le Nord de la Tunisie, Rapport Terminal, FAO, 1 Vol., 137 p., (1980). 3 "Enquête Agricole de Base 1979," Governorate de Beja, Ministry of Agriculture. 4. Northwest Agricultural Development Project, Irrigation Component, IBRD, December 1980. 5. Note Relative au Projet Sedjenane, Cours sur l'Analyse des Projets Agricoles Tunisiens, H.R. Haiem, (1980). 6. Principes, Méthodes et Techniques d'Amélioration Pastorale et Fourragère en Tunisie, FAO Rome, 1 Vol. (1973). 7. "Problématique de l'Amélioration Pastorale et Fourragère en Tunisie du Nord," Rapport de Consultation, David Crespo, 1 Vol. (1980). 8. Programme des Nations Unies pour le Développement (UNDP), Rapport Annuel sur l'Assistance au Développement, (1980). 9. Programme International de Coordination du Développement Laitier, Rapport Final, FAO, 1 Vol., 102 p., (1978). 10. Projet d'Alimentation en Eau Potable des Zones Rurales Non-dézonées par la SONEDE, 5 Vol., (1980). 11. Projet de Développement du Nord-Ouest, Centre National des Etudes Agricoles, March 1980. (a) Composante Kroumirie-Mogods, Rapport Général, 1 Vol., 76 p., Annexes 1 Vol. (b) Composante Oueds Zarga et Khil, Rapport Général, 1 Vol., 46 p. Annexes 1 Vol. (c) Composante Oued Tessa Inférieur, Rapport Général, 1 Vol., 48 p. Annexes 1 Vol. 12. Projets de Développement du Nord-Ouest, Périmètres de Mekna et des Lacs Collinaires, Ministry of Agriculture, December 1980. 13. Protection de la Retenue du Barrage de Sidi Salem, Aménagement des Sous-bassis Versants de l'Oued Zarga et de l'Oued Khil, Ministry of Agriculture, (1977). 14. "Rapport d'Activités Agricoles," CRDA de Beja, (1979). 15. "Rapport de Synthèse, Projet de Développement du Nord-Ouest," FAO/IBRD Cooperative Program, April 11, 1980. 4 4 - 2 Xg E E g 4 4 . 4 E n 4E 4'8pc.4E = -E 4 4 ° 4 4 0 4 4 4 4 4 «E '== g 4 - 4 gaEP'9E rog 4 oXnOwqrE'M 'E =É a 44 ° E fi E E. 8 24 w 2 R DE E = E = n q o n effl E E E 2 > C 3 n E E- n E h » E r C 2 E n gE H E 9fh E __ _ ._ _ ___ ___ ____ _ i e ti _t q __~ ~ __ __ _ _ _ _ -_ _ _ _ _ _ffl=_ =_ _ _ _ _ _ __ _ __ _ _ _ _ _J~ X ____ __ __ __ _ __ _ __ ,. __ ,, i TDISIA. 0031ST 3/08-1I 8000.0F100 I0031aE NORYTladS MT'AL DEVYIOFMYNT PROJECT IEp1:V allat¶iin Scla/nel!l 198/______ 1986 1980 1988Pn Z Bdnk Loan: - - 1982 e Z 1888 _ -3_-=- - - - Year98 lO t -D a n . jaî.-A p r. Il .y-A ug. S ap t. - D ec. 3 dt.-9 3 0 . l ay A il. S np t.-D L e. Jiii. -A trr- iia/ A il. S ap t; lion. .iai.-A po . lin - lA e. S apL .-El ai. Ja n.-A p r. Ikp -A Il. SM p t.- D ec. îa n î -p r . i Da lYA nT . O np î.-0 n C . . J- -Ap- - - - A.D. Pot l.n pl-cfniiai a nlia 6.V FT- lvi A.Oanlldpînsfraiiîîd friM ulllGnin- E l11 *xI ~pk-ptA ..........., -k:ndd ......... f- E .u- ....... n .I nnînlî il n. A.,ln .n sa= lItjIIA . D 010~ P. f. aad liti) XiVIl,. A. iiiaBa. plorltil-î83 8 oesP. I. Upknan 0 nîr sonna. - A. nnniîni -111. A. 60B. Plannlagaos"Il nnnn 011 ti 0I.C. Upî-poif als-a...a.. El. -pkappk..iiîfl f 3110 C.ill hslfl 1iaca b10 Pann.anniE n pia Ialsii 8'30' 9'00 9ç30 TUNISIA NORTHWEST RURAL DEVELOPMENT PROJECT . a Project area components: | Kroumirie - Mogods | Zarca 0 10 20 30 40 50 ZTE Tessa Inferieur BIZERTEJ - Governorate boundaries Kdometers - Commune boundaries - Cheikhat boundories . Governorate headquarters Menzel © Commune heodquarters j-|e Paved roods Unpaved roads \ Rivers -.- International boundary EZZOUARAA Ai, . 0p. E GHANrM- "Tabarkas~~ ~ - -- . ~~~~~~~gENNA (0Honunorc Boaguba ERNMETIR Ae rb (z/:~~~~~~~~~~~~~~~~~~~~~KA M`/`= ALGERIA -B0UÙE1JRTMADAM 6r30e ( f2 v t S , , I'n, t t Q / `' Bo b Ba -- ~ ~ ~ ~ !TMdL TEE7 S~~~~~~~~~KHiR eI ENDOUBAOEBI hGordimaou BS MASAORJDJ EL KûIE L~~9SakietSi YoussefS }) & ) 5f ; /g<. \ the convemenye Off ethecX stde V fotff.~i~~'iy ffi \\5s E\. KEF Dl \. EL SET 9 1 wor d Sank and zESSENOUA T. - da th, an J~~~~~~~~~~~~A, RA t - S jOg,nn oIL AN, fhe0 oracgpan ofuhofunar e/ } s~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~h~a s -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- pl,-t.p h 36-0 / O/OK M t y N~~-ytw~- l ru Â~~~~~~~~~Sia ) L UISIA 2f X $ > .te < 1ALGERiA \IBL13YA ctn A53j) \ DAM "r .-TfeTees tSf T'i30 KLoc,e- Jtriet // . 00 -oe j 'or IBRD 15396