project concept note - €¦ · web viewthe ida-financed emergency food security support project...

Document ofThe World Bank

FOR OFFICIAL USE ONLY

Report No: 52035-BJ

EUROPEAN UNION FOOD CRISISRAPID RESPONSE FACILITY TRUST FUND

EMERGENCY PROJECT PAPER

ON A PROPOSED GRANT

UNDER THE GLOBAL FOOD CRISIS RESPONSE PROGRAM

IN THE AMOUNT OF €6.5 MILLION

TO THE

GOVERNMENT OF BENINGOVERNMENT OF BENIN

FOR AN

EMERGENCY SUPPORT TO ENHANCE FOOD SECURITY PROJECT

May 11, 2010

Agriculture and Rural DevelopmentSustainable Development Department Country Department AFCF2Africa Region

This document 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

(Exchange Rate Effective March 2010)

Currency Unit1 FCFA

1 US$

===

Franc CFA 490.966 US$€ 0.7484

FISCAL YEARJuly 1 to June 30

ABBREVIATIONS AND ACRONYMS

AGEFIB Agence de Financement des Initiatives de Base (Grassroots Initiative Financing Agency)

BAD Banque Africaine de Développement (African Development Bank)BCEAO Banque Centrale des Etats de l’Afrique de l’Ouest (Central Bank of West African

States)CAA Caisse Autonome d'Amortissement CAS Country Assistance StrategyCDD Community Driven DevelopmentCECPA Centre Communal pour la Promotion Agricole (Community-level Center for

Agricultural Promotion)CERPA Centre Régional pour la Promotion Agricole (Regional Centre for Agriculture

Promotion) CNRMP Commission National de Régulation des Marchés Publics (National Commission of

Public Procurement Regulation)COMTRADE United Nations Commodity Trade Statistics DatabaseCPAR Country Procurement Assessment ReportCPMP Cellule de Passation des Marchés (Public Procurement Units)CQS Consultant’s Qualification Selection DADGR

Designated Account Direction de Génie Rural (Department of Rural Engineering)

DNMP Direction Nationale des Marchés Publics (National Directorate for Public Procurement)

EFSSP Emergency Food Security Support ProjectEOI Expression of InterestESEFS Emergency Support to Enhance Food SecurityESMF Environmental and Social Management FrameworkEU-TF European Union Food Crisis Rapid Response Facility Trust FundFAO Food and Agriculture Organization of the United NationsFCFA Franc Communauté Financière Africaine (Central African CFA)FDM Fertilizer Distribution ManualFM Financial ManagementGDP Gross Domestic ProductGFRP Global Food Crisis Response ProgramGPN General Procurement NoticeGTZ German Agency for Technical Cooperation (Deutsche Gesellshaft fuer Technische

Zusammenarbeit)IBRD The International Bank for Reconstruction and Development

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ICB International Competitive BiddingIDA International Development AssociationIDB Islamic Development BankIFAD International Fund for Agricultural DevelopmentIFR Interim Financial ReportISA International Standards on Auditing ISR Implementation Status ReportsLCS Least Cost SelectionLIB Limited International BiddingMAEP Ministère de l’Agriculture, de l’Elevage et de la Pêche (Ministry of Agriculture,

Livestock and Fisheries)MDG Millennium Development GoalsMEF Ministry of Economy and FinanceNAIP National Agricultural Investment PlanNCB National Competitive BidingONASA Office National d’Appui à la Sécurité Alimentaire (National Agency for Food

Security)PEFA Public Expenditure Financial AccountabilityPIM Project Implementation ManualPMU Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) Management

UnitPPR Post Procurement ReviewPRSC Poverty Reduction Support CreditPSC Project Steering CommitteePUASA Programme d’Urgence d’Appui à la Sécurité Alimentaire (Emergency Food

Security Support Program)QCBS Quality and Cost Based SelectionRCPA Responsable Communal de la Promotion Agricole (Community-level Agricultural

Promotion Agent)RFP Request for ProposalSBD Standard Bidding DocumentsSC Steering CommitteeSPN Specific Procurement NoticeSSS Single Source SelectionTOR Terms of ReferenceUNDB UN Development BusinessWAEMU West African Economic and Monetary Union

Vice President: Obiageli Katryn EzekwesiliCountry Director: Madani M. Tall

Sector Director: Inger AndersenSector Manager: Karen Mcconnell Brooks

Task Team Leader: Jane C. Hopkins

BENINEmergency Support to Enhance Food Security (ESEFS)

CONTENTS

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Page

A. Introduction..........................................................................................................................1

B. Emergency Challenge..........................................................................................................2

C. Bank Response: The Project................................................................................................4

D. Appraisal of Project Activities.............................................................................................6

E. Implementation Arrangements and Financing Plan..........................................................10

F. Project Risks and Mitigating Measures.............................................................................12

G. Terms and Conditions for Project Financing.....................................................................13

Annex 1: Detailed Description of Project Components............................................................15

Annex 2: Results Framework and Monitoring.........................................................................23

Annex 3: Summary of Estimated Project Costs........................................................................24

Annex 4: Financial Management and Disbursement Arrangements......................................25

Annex 5: Procurement Arrangements.......................................................................................32

Annex 6: Implementation and Monitoring Arrangements......................................................41

Annex 7: Project Preparation and Appraisal Team Members...............................................46

Annex 8: Statement of Loans and Credits.................................................................................47

Annex 9: Country at a Glance....................................................................................................47

Annex 10: Maps...........................................................................................................................50

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EMERGENCY OPERATION PROJECT PAPER DATA SHEET

BeninEmergency Support to Enhance Food Security Project

Africa Region Date: May 11, 2010Country Director: Madani M. TallSector Manager/Director: Karen Mcconnell BrooksLending instrument: Emergency Recovery Loan

Team Leader: Jane C. HopkinsSectors: Crops (60%); Irrigation and drainage (40%)Themes: Global food crisis response (100%)Environmental screening category: Partial AssessmentSafeguard screening category: B

Type of Operation: New Operation [ X ] Additional Financing [ ] Existing Financing (restructuring) [ ]Financing type: Loan [ ] Credit [ ] IDA Grant [ ] Other [ X ]Project ID(s): P120052 Total Amount: EUR 6.5 million

Proposed terms: Grant (EUFRF) Expected implementation period: 16 months

Expected effectiveness date: May 24, 2010 Expected/revised closing date: August 31, 2011

Borrower: Republic of Benin Responsible agency: Ministry of Agriculture, Livestock, and Fishery

Development Objective: To increase domestic production of food crops (mainly maize and rice) in targeted areas.

Short Description: The proposed grant will provide parallel financing to the ongoing IDA-financed Emergency Food Security Support Project (EFSSP) approved in October 2008. It will build on the experience and successes of the EFSSP in expanding access of food crop producers to fertilizer and seed, and will also build on the successes of the Government’s umbrella program (the Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) - the Emergency Food Security Support Program) in providing food crop producers with increased access to small-scale irrigation infrastructure. Specifically the proposed project will provide financing for the (i) purchase and distribution of fertilizer (2400 tons of NPK and 875 tons of urea) using the same procedures developed under the EFSSP and (ii) development of 3,000 hectares of small-scale irrigation infrastructure techniques successfully implemented under the PUASA using simple techniques that are rapid and easily implementable by beneficiaries and local entrepreneurs. Financing Plan (EUR million) Source: Local Foreign TotalBorrowerTotal IBRD/IDATrust Funds (EUFRF)Total

0.000.004.044.04

0.000.002.462.46

0.000.006.506.50

Estimated disbursements (Bank FY/EUR million) 2010 2011

Total IBRD/IDAEUFRF

0.004.00

0.002.50

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Does the emergency operation require any exceptions from Bank policies? Have these been approved by Bank management?

Yes [ ] No [X]Yes [ ] No [ ]

Are there any critical risks rated “substantial” or “high”? Yes [X] No [ ]

What safeguard policies are triggered, if any?

Environmental Assessment (OP/BP 4.01)Pest Management (OP 4.09)Projects on International Waterways (OP/BP 7.50)

Significant, non-standard conditions, if any:

A. Board Conditions: none

B. Effectiveness Conditions: none

C. Disbursement Conditions: no disbursement for expenditures associated with (i) sub-grants; and (ii) works until the Government of Benin has:

prepared, adopted, disclosed and implemented in a manner acceptable to the Bank, an updated ESMF.

adopted a revised/updated Project Implementation Manual.

D. Dated covenants: the Government of Benin shall

within 45 days of project effectiveness, recruit a Procurement Specialist and a Financial Audit Specialist for the Project Management Unit.

within 60 calendar days of project effectiveness prepare, adopt, disclose and implement in a manner acceptable to the Bank, an updated ESMF.

within 30 days of project effectiveness, adopt a revised/updated Project Implementation Manual (PIM) detailing, inter alia, the operational, financial management and administrative procedures for the implementation of the Project, in form and substance satisfactory to the Bank.

within 30 days of project effectiveness, amend and restate the memorandum of understanding between the Emergency Food Security Support Program’s-- Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) Management Unit (PMU) and the Regional Centers for Agriculture Promotion-- Centre Régional pour la Promotion Agricole (CERPAs), under terms and conditions satisfactory to the Bank.

by August 31, 2010, prepare an operational manual related to Component 1 of the Project for piloting the market-based mechanism for the sustainable delivery of inputs (fertilizers and seeds) to food crop producers, including the role of the recovered funds from the subsidized sale of fertilizer.

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A. Introduction

1. This Emergency Project Paper proposes to provide a grant from the European Union Food Crisis Rapid Response Facility Trust Fund (EU-TF) under the Global Food Crisis Response Program (GFRP) in an amount of €6.5 million to the Republic of Benin, for a proposed Emergency Support to Enhance Food Security Project (ESEFSP).

2. Between September 2007 and August 2008 food prices in Benin increased by an estimated 32 percent. This unprecedented increase in food prices fueled a significant increase in the general price levels (by 12 percent) over the same period, prompting the government to enact a variety of measures to control prices (the cost of which is unsustainable) and seek the assistance of donors to support an emergency food security program. The Government launched the Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) - the Emergency Food Security Support Program – in 2008 to address the country’s immediate, short and medium term needs to increase domestic productive capacity and food security. The IDA-financed Emergency Food Security Support Project (EFSSP), approved in October 2008 supported this effort and focused on immediate needs by increasing the access of cereal crop producers to fertilizer during the 2009 cropping season.

3. The tension on food prices persisted in 2009 when average food price levels were even higher (7 percent) than the average levels in 2008. This persistent tension on food prices, despite good crop production seasons in 2008 and 2009, reflects a reduced market supply of locally produced food and underscores the continued urgency of increasing domestic productive capacity. The proposed Emergency Support to Enhance Food Security Project (ESEFSP) will provide parallel financing to the ongoing EFSSP. It will build on the experience and successes of the EFSSP in expanding access of food crop producers to fertilizer and seed, and will also build on the successes of the Government’s umbrella program (the PUASA) in providing food crop producers with increased access to small-scale irrigation infrastructure.1 Specifically the proposed project will provide financing for the (i) purchase and distribution of fertilizer (2400 tons of NPK and 875 tons of urea) using the same procedures developed under the EFSSP and (ii) development of 3,000 hectares of small-scale irrigation infrastructure techniques successfully implemented under the PUASA.

4. The operation is consistent with the Government of Benin’s Emergency Food Security Support Program and their National Agricultural Investment Plan (NAIP). The overall objective of NAIP is to improve Benin’s agriculture performance to enable its effective contribution to economic growth, food security and the Millennium Development Goals (MDGs). The NAIP gives priority to the production of food crops and the diversification of exports. The project will be implemented in coordination with other donor assistance by the management unit of the PUASA (the same unit that is implementing the EFSSP).

1 In 2008 and 2009, the government program (PUASA) successfully developed about 5,000 hectares of small-scale irrigation infrastructure using simple techniques that are rapid and easily implementable by beneficiaries and local entrepreneurs.

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B. Emergency Challenge

Country Context

5. The primary sector accounts for about 35 percent of Gross Domestic Product (GDP) and employs nearly 70 percent of the country’s workforce, mainly in agriculture. Although cotton remains the major export commodity, its share of exports declined from 75 percent to 47 percent between 1996 and 2006. In September 2009, an International Monetary Fund mission noted that the global economic crisis continues to affect the near term prospects for the Beninese economy. Real GDP growth is expected to slow to 3 percent in 2010, a significant decline from 5 percent in 2008. The slowdown is mainly driven by weak prospects for cotton production and exports, and trade with neighboring countries.

6. Benin was hard hit by the rise in world market prices for food and oil. The aggregate import costs for wheat, rice, maize and fertilizer showed a two-fold increase from about US$120 million in 2007 to about US$328 million in April 20082. The Government, aware that the social implications of these rising prices can be dramatic, especially for the poor, tried to dampen the impact by reducing duties on food and oil imports, and through price controls and subsidies. These measures (unsustainable due to their high economic and fiscal costs) failed to keep price increases from accelerating and affecting consumers.

7. Domestic production of rice and maize (Benin’s main cereal staples) decreased in the years leading up to the crisis (by 9 percent in 2006 and another 14 percent in 2007). The reduced production is due to the lack of adequate delivery mechanisms to ensure the provision of certified seeds, fertilizer and other agricultural goods and services needed by producers and rural enterprises. In addition, the overall institutional environment for the agricultural sector does not receive adequate Government support and needs to be strengthened. In 2008, cereal production increased to about 1.29 million tons, compared to 1.16 million tons in 2007. However, the tension on food prices persisted in 2009 when average food price levels were even higher (7 percent) than the average levels in 2008. This persistent tension on food prices, despite good crop production seasons in 2008 and 2009, reflects a reduced market supply of locally produced food and underscores the continued urgency to pursue ongoing efforts aimed at rebuilding and strengthening the productive capacity of the sector in order to reverse the trend (see Appendix 1 of Annex 1 for an updated analysis of the food price situation in Benin).

The Government’s Recovery Strategy

8. In response to the global food crisis and rising food insecurity, the Government launched the Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) in 2008 to address the country’s immediate, short and medium term needs to increase food security and rebuild the productive capacity of the food crop sector in Benin.

9. The PUASA is costed at about US$145 million. In addition to the IDA grant (US$9 million) approved in October 2008, a number of other donors are providing financing for the PUASA. The Federal Republic of Germany is supporting PUASA through an existing GTZ program (Programme de Conservation et de Gestion des Ressources Naturelles - Program for the Conservation and Management of Natural Resources) by providing fertilizer to producers in the Atacora region. The Islamic Development Bank (IDB) is supporting the PUASA for a 2 According to a spreadsheet with estimates of the import costs for rice, maize, wheat, and fertilizers using FAO and COMTRADE data – World Bank June 2008.

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total amount of FCFA 1.7 billion through two existing projects. The contribution of the International Fund for Agricultural Development (IFAD) is being provided through the existing Rural Development Support Program (FCFA 0.5 billion). The 2008 contribution of Food and Agriculture Organization (FAO) was estimated at US$ 0.5 million and the Banque Africaine de Développement (BAD) committed to providing FCFA 1.6 billion to support the program. The Government’s contribution to the financing of PUASA activities is estimated at US$ 13 million in 2008 and 2009.

10. The PUASA Management Unit (PMU) is the national unit for coordinating donors support, as well as Government interventions, for the promotion of food crop production and food security. Donor agencies meet regularly to share information and coordinate discussions and negotiations with the Ministry of Agriculture, Livestock and Fisheries-- Ministère de l’Agriculture, de l’Elevage et de la Pêche (MAED). In 2009-10, an emphasis will be placed on helping the Government improve its Strategic Plan for Agricultural Revival, intended as a sector program aligning all donor and Government interventions.

Rationale for the Proposed Emergency Project

11. In response to a request from the Government of Benin, the Bank developed the Emergency Food Security Support Project (EFSSP) which became effective in October 2008. Within the framework of the PUASA, that IDA-financed project focused on: (i) providing emergency support for expanded access to fertilizer for maize and rice producers; and (ii) supporting the design of a sustainable input delivery mechanism for food crop producers. The project targeted the provision of 8,500 tons of fertilizer at subsidized rates to about 50,000 producers of rice and maize.

12. The most recent implementation status report for the EFSSP gave the project a satisfactory rating. It indicates that 9,800 tons of fertilizer was actually procured with 6,900 tons (81 percent of targeted amount) distributed during the 2009 cropping season (the balance is to be distributed during the upcoming cropping season). The number of farmers benefitting from the fertilizer distribution was less than expected (about 23,000) since the bulk of the fertilizer was distributed to farmers in the central and northern zones where farm size is larger than initially envisioned. In terms of cereal output, 80 percent of the expected result was achieved (118,800 tons against a target of 147,000 tons). The target was exceeded for rice production (where small-scale irrigation infrastructure is more prevalent) and fell short for maize production due to adverse climatic conditions. The project also successfully launched the effort to design a sustainable market-based mechanism for the delivery of inputs to food crops producers, as an alternative to the current public-sector input delivery system. Stakeholders were brought together and the process is underway, with the support of several consultants; an initial report is expected by end-May 2010.

13. The proposed grant will build on the success of the EFSSP in expanding access of food crop producers to fertilizer. In addition, it will help the government scale-up the small-scale irrigation infrastructure activities successfully implemented under the PUASA umbrella program. The small-scale irrigation infrastructure allows farmers to reduce weather-related risk factors and increase the effectiveness, and thereby production, of the use of fertilizer and improved seed varieties.

14. The impact of increased access of food crops producers to improved seeds, fertilizers and irrigation infrastructures will be positive and significant in the short term. The increased food crop productivity will increase the local food supply and food security situation. In addition,

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by supporting the implementation of the innovative market based mechanisms required for the delivery of agricultural inputs to food crops producers, the grant will also provide a response to the government’s goal of developing food crops commodity chains in the medium and long term.

C. Bank Response: The Project

Brief description of Bank’s strategy of emergency support

15. The Bank’s strategy for this emergency project consists of supporting ongoing efforts by the Government of Benin to respond to the increase in food prices by mitigating its short-term impact and stimulating supply response in its main food sectors. The Bank’s response under the IDA-EFSSP focused on providing emergency support for expanded fertilizer use to increase domestic food production and supporting the design of an innovative mechanism for the sustainable delivery of agricultural inputs to food crop producers.

16. Following a first year of successful implementation of the EFSSP, this grant will help the PUASA continue its fertilizer distribution activities and pilot the market-based input delivery mechanism being developed. In addition it will help PUASA expand its successful small-scale irrigation infrastructure activities which use simple techniques rapidly and easily implementable by beneficiaries and local entrepreneurs. Specifically the grant will support (i) the delivery of 3,275 tons of fertilizer3 to about 15,500 producers (12,000 producers of maize and 3,500 producers of rice); (ii) a pilot of the market-based input delivery mechanism developed under the EFSSP; and (iii) the development of 3,000 hectares of small-scale irrigation infrastructure. A detailed description of the project is in Annex 1.

Project Development Objectives

17. The project objective is the same as the EFSSP -- to increase domestic production of food crops (mainly maize and rice) in targeted areas. This will mitigate the short-term impact of increasing prices on households and expand food crop farmers’ access to agricultural inputs in the medium and long term. This development objective will be achieved by: (i) expanding the access of food crop producers to fertilizer and improved seeds; and (ii) expanding the access of food crop producers to small-scale irrigation infrastructure.

Summary of Project Components

18. The project has three components: (i) Delivery of agricultural inputs; (ii) Promotion of small-scale irrigation infrastructure; and (iii) Support for project coordination, monitoring and evaluation.

19. Component 1: Delivery of agricultural inputs (€2.42 million). This component aims at delivering 3,275 tons of fertilizer and 545 tons of improved seeds to about 15,500 producers (12,000 producers of maize and 3,500 producers of rice) during the 2010 cropping season; the distribution of the improved seeds will be financed by the Government. The fertilizer will be subsidized at about 40 percent of the market price, using the same delivery and cost recovery mechanisms used for the successful implementation of the EFSSP. This component will also insure the incremental costs associated with the provision of technical advisory services to beneficiaries on the proper use of the provided inputs. In addition, this component will

3 As a complementary activity (as was the case under the EFSSP), the Government has committed to financing, through its own resources, the collection and distribution of 545 tons of improved seed.

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support a pilot (during the 2011 cropping season) of the market-based input delivery mechanism being developed under the EFSSP.

20. Component 2: Promotion of small-scale irrigation infrastructure (€3.48 million). Through this component, the grant will help increase the access of cereal producers to irrigation services, in order to intensify food production. In 2008 and 2009, the Government’s PUASA Management Unit successfully developed about 5,000 hectares of small-scale irrigation infrastructure, using simple techniques that are easily implementable by beneficiaries and local entrepreneurs. This grant will help expand these activities, using the same procedures, by targeting an additional 2,000 hectares of small-scale irrigation perimeters in the Niger river valley, and about 1,000 hectares in the lowlands of the hill region and in the Mono and Couffo rivers valleys. In addition, it will support the construction of post-harvest infrastructure, specifically 35 storehouses and 70 drying areas, in these same regions to decrease post-harvest losses that can often reach 35 percent of production.

21. Component 3: Support for project coordination, monitoring and evaluation (M&E) (€0.34 million). This component will provide institutional support to strengthen the PUASA Management Unit (PMU), in carrying out its coordination, fiduciary and M&E responsibilities. The monitoring and evaluation activities will include an analysis of national food crop (maize, rice, cassava and yam) market price trends over the 2008-11 time period. In addition, the grant will support training, acquisition of equipment, office supplies and other incremental operational costs.

Geographic Selection and Targeting Criteria

22. Targeting of priority perimeters. In May 2009, PUASA brought together representatives of producer organizations and local and regional agencies of the MAED to decide on the priority perimeters to be developed in each region. Priority has been given to areas currently exploited by producers.

23. Individual beneficiary targeting. In the small-scale irrigated perimeters, all producers (men and women) sharing the ownership of the common land resources will be beneficiaries. With respect to the fertilizer distribution, the PMU in collaboration with Directorate of Agriculture and the local agricultural extension services (CECPA) will carry out an extensive information campaign regarding the terms and conditions and producer groups will take the lead in selecting the beneficiaries based on these criteria. To ensure production, the PMU envisions allocating 60 percent of the fertilizer to larger producers (those who cultivate more than two hectares) and 40 percent to those cultivating on smaller plots.

Eligibility for Processing under OP/BP 8.0

24. Consistent with OP/BP 8.00, the activities planned under this project are intended to support the Government’s objective to enhance domestic food crop production in the short and medium term, in order to ensure food security. In the short term, it will strengthen the emergency mechanisms put in place by the Government for the delivery of fertilizers and improved seeds. It will also expand producer access to irrigation services. Thus, it will contribute to generating additional cereal stocks to supply the market and, consequently, produce positive impact on the rural population’s livelihood and on the urban consumers’ access to food. In the medium and long term, it will help put in place the structural mechanisms required for a sustainable input delivery system for food crop producers.

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25. The success of the project-financed activities (emergency provision of fertilizer and small-scale irrigation perimeters quickly implemented by local actors) and the impact on the beneficiaries within the timeframe depends on the use of flexible and accelerated procedures as allowed under OP/BP 8.00, particularly in the processing of project preparation, safeguards compliance, procurement, and disbursement arrangements. Without such provision, the project’s inputs would not be mobilized quickly enough to contribute to the urgent needs.

Consistency with Country Assistance Strategy (CAS)

26. This project’s activities are closely aligned with the existing Country Assistance Strategy (CAS)’s three strategic objectives: (i) accelerating private sector-led growth; (ii) improving access to basic services and ensuring greater efficiency of public expenditures; and (iii) promoting better governance and strengthening institutional capacities. With regard to these strategic objectives, the Bank Group places a very strong emphasis on reengaging with, and supporting, the private sector and enterprise development, agricultural diversification as well as the development of growth-inducing infrastructure. A future agricultural diversification project is envisaged to support promising commodity chains from production to transformation/export. That operation would also be a vehicle for responding to the food price increases.

Expected Outcomes

27. The expected outcome of the project is an increase in domestic food crop production. The key performance indicators for the project and their targets are the following: (i) an increase in rice production in the project areas of 3,500 tons; (ii) an increase in maize production in the project areas of 12,000 tons; and (iii) a total of 15,500 farmers (direct beneficiaries) receive project benefits.

28. The intermediate outcome indicators and targets for Component 1 are: (i) 3,275 tons (2,500 tons of NPK and 775 tons of urea) of fertilizer procured and distributed; (ii) 545 tons of improved seed distributed; (iii) 15,500 hectares treated/cultivated using adequate doses of fertilizer; (iv) 15,500 producers use adequate dose of fertilizer; and (v) a market-based input delivery mechanism is adopted and tested.

29. Intermediate outcome indicators and targets for Component 2 are (i) 2,000 hectares of small-scale irrigation infrastructure developed in the Niger river valley; (ii) 1,000 hectares of small-scale irrigation developed in the lowland areas of the hills region and in the Mono and Couffo rivers valleys; (iii) 3,000 producers installed in the small-scale irrigation perimeters; and (iv) 35 storerooms; and (v) 70 drying areas constructed.

D. Appraisal of Project Activities

Technical

30. Addressing the lack of delivery systems for agricultural inputs and equipment is a key issue in boosting food crop production in Benin. Without access to fertilizer, certified seeds and other agricultural goods and services, agriculture production remains essentially at subsistence level, with low technology and little marketable surplus. The challenge is to provide support for the government-run emergency mechanisms to ensure the short-term distribution of these goods and services, while developing more sustainable market-based

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mechanisms for the medium to long-term. During the 2011 planting season, the grant will support a pilot of the innovative market-based mechanism being developed under the EFSSP.

31. Since 2008, PUASA has successfully promoted techniques that are very simple, rapid and easily implemented by local actors for the development of small-scale irrigation infrastructures. Small-scale irrigation infrastructure decreases weather-based risks associated with food crop production and increasing the effectiveness of fertilizer and improved seed. By increasing access of producers to irrigation services, the grant will help increase rice production and productivity and thereby increase food security.

32. Extension services will accompany the distribution of fertilizer and the development of small-scale irrigation to ensure proper use of inputs and small equipment. The extension services proposed are based on standard, well accepted technical packages in Benin, which are consistent with global good practice.

Economic and Financial

33. Economic and financial analysis of this emergency operation has not been carried out given the short preparation period. However, according to the PUASA Management Unit estimates, the economic impact of increased provision of fertilizer and improved seeds is positive and significant, with an increase of rice and maize yields by about 100 percent per hectare. In the irrigated perimeters, these yields will be higher, reaching about 5 tons per hectare, against 1 ton for maize and 2 tons for rice in ordinary conditions.

34. With regard to financial aspects, there is a need to set up sustainable financial mechanisms to promote the producers’ access to agricultural inputs. This Grant will pursue the activities initiated under the EFSSP by piloting the innovative market-based delivery mechanisms being developed.

Fiduciary

35. Financial Management. The PMU which is responsible for the implementation of the Bank-financed EFSSP will also be responsible for the implementation of this project. The financial management risk is assessed as moderate. The PMU is staffed with an experienced financial management specialist who has already implemented Bank-financed projects and there is an appropriate computerized accounting system in place. The ‘Fertilizer Distribution Manual’ (FDM), describing the procedures that govern the emergency fertilizer delivery mechanisms (including cost recovery), was prepared by the PMU for the implementation of the EFSSP and was found satisfactory to the Bank. It will be updated to reflect lessons learned during the implementation of the EFSSP (for example the cost recovery is coordinated by the local extension services (CECPA) rather than the National Agency for Food Security (ONASA) due to their proximity and close contact with the beneficiaries.

36. To strengthen the PMU’s capacity to manage the sub-grants to producer organizations and communities for the development of small-scale irrigation infrastructure (works and small equipment acquisition), the Agence de Financement des Initiatives de Base (AGEFIB) will be contracted to support the PMU. Specifically, AGEFIB will strengthen the financial management capacity of producer organizations and pre-screen disbursement requests of the communities before payment by the PMU. AGEFIB has a strong experience in community driven development projects as well as Bank-financed operations. The pre-screening will

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include the collection and the review of supporting documents. AGEFIB will then provide a clear recommendation for payment to the PMU. A specific implementation manual for this component, including simplified financial management procedures to be used by the communities, will be prepared as part of the overall update to the Project Implementation Manual (PIM) not later than 30 days after effectiveness.

37. Procurement . All procurement will be carried out by the PMU with the support of AGEFIB. A procurement officer will be recruited to support the PMU in carrying out these responsibilities. The principal procurement activities will involve goods (in particular fertilizer and small motor pumps) and civil works for the construction of small post harvest infrastructure. The development of the small-scale irrigation systems will use Community Participation in procurement. The thresholds for the methods of procurement and consultant selection and for prior review have been based, by and large, on those that have been found to be appropriate for Benin. More rapid methods for procuring the goods and consulting services which are particularly urgent are specified in the procurement plan and are within the provisions of OP/BP 8.00.

Environmental and Social

38. From an environmental and social safeguard standpoint, the proposed project is a Category B project. This suggests that environmental and social impacts of the project, for the most part, will be minimal, site-specific and manageable to an accepted level. The proposed grant will include: (i) provision of fertilizer, improved seed and extension services; (ii) development of small-scale irrigation infrastructure; and (iii) construction of small post-harvest drying and storage facilities adjacent to the irrigated plots. This emergency operation triggers three World Bank safeguard policies: the Environmental Assessment policy (OP/BP 4.01), the Pest Management policy (OP/BP 4.09), and the Projects on International Waterways policy (OP/BP 7.50). The Involuntary Resettlement policy (OP/BP 4.12) is not triggered since the development of the small-scale irrigation infrastructure is confined to plots currently being cultivated for which there is clear land tenure. In addition, in the course of the project implementation there will be no restriction to sources of livelihood or access to sources of livelihood.

39. The Environmental and Social Management Framework (ESMF) prepared for the EFSSP is being updated to take into account the small-scale irrigation activities and post-harvest infrastructure proposed under this grant and appropriate elements will be incorporated in the PIM. The ESMF provides guidelines and procedures for environmental and social screening, designed to help avoid, mitigate or minimize impacts resulting from unbalanced use of agrochemicals. Close attention is paid to safe storage and handling of fertilizers, as part of the safeguard review. The ESMF includes a chapter dealing with pesticide management issues. This chapter addresses the selection, safe use, storage and disposal of pesticides and their package materials in order to avoid health impacts on farmers and their families and avoid impacts on the environment.

40. As required under OP 7.50, the Niger River Basin Authority was notified of the proposed project. Their response, stating their non-objection to the proposed project, was received on February 4, 2010. The revised ESMF will provide guidelines for assessing and mitigating any potential impacts on the flood and stream flows to the downstream water resources and aquatic systems. As an exception to the general Bank policy of disclosure before appraisal,

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as authorized under OP/BP 8.00, the updated ESMF will be publicly disclosed in Benin and at World Bank’s Infoshop within 60 days of project effectiveness.

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment (OP/BP 4.01) XNatural Habitats (OP/BP 4.04) XForests (OP/BP 4.36) XPest Management (OP 4.09) XCultural Property (OPN 11.03) XIndigenous Peoples (OP/BP 4.10) XInvoluntary Resettlement (O/BP 4.12) XSafety of Dams (OP/BP 4.37) XProjects on International Waterways (OP/BP 7.50) XProjects in Disputed Areas (OP/BP 7.60) X

41. In Benin, gender equity in terms of access to agricultural services and land varies from one region to another, depending on socio-cultural practices. In the hills region for example, it is expected that the plots in the irrigated perimeters will be largely attributed to women. In the Niger valley, women and men’s access to the irrigation infrastructure and accompanying agricultural inputs seems to be equitable in the Borgou region, but a priority is given to men in the Alibori region. In the Mono and Couffo valleys, socio-cultural practices give clear priority to men. In general, the project will promote as much as possible gender equity in the access of producers to agricultural inputs and services delivery. The local authorities in charge of land management and leaders of producer organizations will be sensitized to give priority to the vulnerable layers of the population, in the selection of the beneficiaries.

Lessons learned

42. Bank experience to date with emergency response operations has underscored the need to approach the immediate challenge with realism and simplicity. As such, the proposed project relies on strengthening the emergency mechanisms in place for fertilizer provision to producers and on simplified procurement procedures. By collaborating with the delivery agencies of the MAED (that are knowledgeable in extension services) and with the other donor agencies that expressed their will to contribute to the emergency operations the project will be able to provide concrete results in the short-term.

43. The Bank experience in the cotton sub-sector shows the capacity of Benin actors (producer organizations and private operators) to successfully conduct collective actions intended at setting up the needed market-based agricultural input delivery mechanisms. This project will support that process, in cooperation with the Government and its other internal and external technical and financial partners.

E. Implementation Arrangements and Financing Plan

44. The Emergency Support to Enhance Food Security Project (ESEFSP) will be implemented over a sixteen (16) months period using the same institutional set-up as the EFSSP.

45. The Project Steering Committee (PSC), established in 2008 by a Minister of Agriculture departmental order, will be responsible for overall project oversight. The PSC includes representatives from: (i) the Ministry of State; (ii) the Ministry of Economy and Finance; (iii)

9

the MAED; (iv) producer organizations; and (v) the private sector. The Delegation of the European Commission will be invited as an observer to the PSC. The PSC will ensure the inter-ministerial oversight of the project and will approve annual work plans, annual budgets, mid-term reviews, and annual assessment reports.

46. The PUASA Management Unit (PMU), located within the MAED, will be in charge of project implementation. The PMU was established in 2008 by a Minister of Agriculture departmental order and is composed of a Project Coordinator, an Agronomist, an Irrigation Specialist, a Monitoring and Evaluation Specialist, an Accountant and administrative staff. These staff will be maintained under the proposed project and the unit will be further strengthened by the recruitment of a Procurement Officer.

47. The PMU will be responsible for implementing and monitoring the day-to-day project activities including budgeting, procurement, disbursement, financial management, reporting, supervision, management of the operational account, and auditing. It is responsible for contracting with the fertilizer and equipment suppliers, and other entities involved in the implementation of the project, to ensure effective delivery of the planned goods and services. In addition, it will make sure that the fertilizer cost recovery mechanism, as described in the Project Implementation Manual, is functioning well.

48. Key implementing partners are: (i) the Regional Centers for Agriculture Promotion (CERPA) of the MAED; (ii) the Community-level Centers of Agricultural Promotion (CECPA) of the MAED; (iii) the Directorate of Rural Engineering (DGR) of the MAED; (iv) the producer organizations; and (v) the Grassroots Initiative Financing Agency (AGEFIB).

49. The CERPA and CECPA will be responsible for: (i) facilitating the contractual relationship between the PMU and the producer organizations, including the fertilizer cost recovery activities; (ii) storing and distributing the fertilizer and improved seed; (iii) providing advisory services; and (iv) strengthening the technical capacity of the producer organizations. The DGR will be responsible for: (i) the specific identification of the small-scale irrigation sites; (ii) the design of the irrigation perimeters and technical description of work to be done; and (iii) monitoring the quality of implementation. AGEFIB will be responsible for pre-screening disbursement requests submitted by local communities and will strengthen their financial management capacity when necessary (see Annex 6 for a more detailed description of the roles of various partners in the implementation of the project).

50. Fertilizer Cost Recovery: The fertilizer cost recovery activities are managed by the community agricultural promotion agent (Responsable Communal de la Promotion Agricole - RCPA) of the CECPA – the public-sector agent in closest proximity with the producers. They are responsible for facilitating the contractual relationship between the PMU and the producer groups for the provision of subsidized fertilizer. Producer groups are required to reimburse the cost of the subsidized fertilizer, in cash or in kind, within three months of the harvest. The PUASA had an 85 percent recovery rate during the 2008 agricultural campaign using this method. For 2009, the cost recovery rate, one month after harvest, was 26 percent. The recovered funds are deposited in a commercial bank account managed by the PMU. These funds constitute a revolving fund to be used for future input purchases and costs associated with piloting the market-based input delivery mechanism being developed. The procedures for the fertilizer distribution and cost recovery are detailed in the Fertilizer Distribution Manuel approved by the Bank for the implementation of the EFSSP.

10

51. Monitoring and Evaluation: The M&E of the project is seen as a key part of the project implementation process. The M&E system of the PMU will be strengthened and updated in order to assume the M&E activities under this project. The updated M&E system will be oriented towards: (i) monitoring compliance with the PIM; (ii) tracking progress toward the achievement of the project outputs and outcomes; (iii) assessing sustainability of outcomes; and (iv) monitoring compliance with the ESMF. The M&E specialist in the PMU is responsible for the supervision of all M&E activities under the project, for quality control of data collected at decentralized levels, and for data compilation for quarterly reporting. The accountant is responsible for analyzing the data related to fiduciary matters.

52. Communications and visibility: The grant will support dissemination of information about the project and project activities to the target beneficiaries through the media, especially radio and television services (national, private and community based station).

53. Bank supervision: As required under OP/BP 8.00, the shift from ex-ante to ex-post risk mitigation and control measures requires task teams to intensify their supervision efforts through frequent missions and ex-post reviews. A budget of €220,000 has been made available for supervision of the project. The core supervision team would consist of an Agricultural Economist, Rural/Agricultural Development Specialist, Financial Management and Procurement Specialist, an M&E Specialist and a Safeguards Specialist. The team would be supplemented as needed with additional specialists (for example, a specialist on private sector input distribution systems or small-scale irrigation systems). At least four full supervision missions (covering all aspects of the project) would be carried during the sixteen (16) months implementation period. In addition, focused meetings and working sessions with the Benin project team will be carried out as the need arises.

F. Project Risks and Mitigating Measures

Risk factors Description of risk Rating of

risk Mitigation measures

Rating of

residual risk

Country and/or Sub-National Level risks

Systemic Corruption

A 2007 Governance Diagnostic Survey was disseminated nationally and showed that public services playing a central role in the development of the country, like customs, taxes, the judiciary, the policy, electricity and water, public works and to a minor extent health and education are seriously affected by poor governance and corruption. The survey results also showed that users of public services spend substantial sums on non-official payments to access public services. The Ministry of Administrative and Institutional Reform has been mandated to lead the preparation of the National Governance Strategy and an Action Plan based on the governance diagnosis and other strategic Government documents. TORs for the preparation of the national governance strategy are finalized. The Corruption Perception Index for 2009 ranks Benin 106 out of 180 countries, compared to the ranking of 96 for 2008.

M

Poverty Reduction Support Credits (PRSC) 4 and 5 have supported Government's efforts at promoting better governance through financial management, civil service and justice reforms. A final operation in the series (PRSC-6) under preparation for FY10 will continue to support governance reforms. Government is now implementing its second PRSP with broad-based new monitoring and reporting mechanisms, including an important new role for the localities.

L

Sector Governance, Policies and InstitutionsUncertainty of land tenure status for farmers M Interventions will be directed to villages with M

11

Sector Specific Risks

secured land tenure. In addition the development of small-scale irrigation infrastructure will be carried out on plots already under cultivation with clear tenure status. The post harvest drying and storage infrastructure will be constructed adjacent to these plots on their own common land.

Risk of a climatic shock (drought or flood) M

The small-scale irrigation infrastructure developed will help farmers have better water control and thereby decrease the risk associated with climatic shocks.

L

Operation-specific risks

Technical/design

Seed and fertilizer are not used by farmers in the recommended manner. M Training and targeted technical advisory

services will be supported by the project. L

Difficulty in recovering fertilizer cost for revolving fund.

M

The project will support a communications campaign and sensitization activities to recall the reimbursement dates, location, and thereby stimulate producers, to fulfill their commitment. Fertilizer is provided to producer groups rather than individuals as a social accountability measure to help ensure cost recovery.

M

Implementation Capacity and Sustainability

Implementing agencies may lack technical and managerial capacity to adequately implement the project activities in a timely manner.

M

The project will be implemented by the PUASA Management Unit (PMU), in collaboration with various agencies of the MAED. The PMU and these agencies have been strengthened and are successfully implementing the ongoing Bank financed project.

L

Large proportion of farm households has limited capacity to boost production (lack of machinery, technical knowledge, inputs etc.).

MThe project will provide producers with access to inputs, equipment and services through their organizations.

L

Inadequate capacity for planned surveillance, surveys and monitoring and evaluation. M

Technical assistance will be provided to PMU to review and revise the M&E plan (including information on instruments for data collection, actors responsible, timing of data collection) and the staff will be trained.

L

Inadequate capacity to implement and monitor community activities under Component 2

M

A project implementation manual that clarifies operational and financial management procedures for the sub-projects of the communities will be prepared not later than one month after effectiveness. In addition, AGEFIB (an agency with strong experience in the implementation of Community Driven Development approaches) will provide technical support to PMU and to communities.

L

Financial Management

Weak capacity of Producers Groups and Unions in handling FM activities of the sub-project under component 3.

Poor management of the Fertilizer Cost Recovery Fund

S

With the support of AGEFIB, the PMU will strengthen the capacity of beneficiary communities to handle FM activities.

An operational manual for piloting the market-based input delivery mechanism – including the role of the recovered funds from the subsidized sale of fertilizer - will be established in form and substance satisfactory to the Bank. Until then, funds recovered will be deposited into an escrow account.

M

Procurement

The implementation entities in charge of the implementation of the project may not have acceptable knowledge of Bank procurement guidelines

S

AGEFIB (an agency with a strong experience of Bank financed projects, including using community driven development approach.) will continue to support the PMU procurement activities. In addition, a procurement officer will be recruited to strengthen the PMU.

M

Social and Environmental

Some localized environmental impacts may be possible if environmental concerns are not

M The Environmental and Social Management Framework (ESMF) prepared for the Bank

L

12

Safeguards

taken into consideration in the development of small-scale irrigation infrastructures and storage facilities, and in the use of agro-chemicals.

financed ESMF will be updated and implemented to take into consideration the potential negative impacts associated with the project.

Overall Risk (including reputational risk)

M

G. Terms and Conditions for Project Financing

54. Financing terms: The project will be financed on 100 percent grant terms (net of taxes) with proceeds from the European Union Rapid Response Food Crisis Facility Trust Fund.

55. There are no Board and Effectiveness conditions.

56. Disbursement conditions : no disbursement for expenditures associated with (i) sub-regional grants, and (ii) works, until the Government of Benin has:

prepared, adopted, disclosed and implemented in a manner acceptable to the Bank, an updated ESMF

adopted a revised/updated Project Implementation Manual

57. Dated legal covenants : the Government of Benin shall

within 45 days of project effectiveness, recruit a procurement specialist and financial audit specialist for the Project Management Unit.

within 60 calendar days of project effectiveness prepare, adopt, disclose and implement in a manner acceptable to the Bank, an updated ESMF.

within 30 days of project effectiveness, adopt a revised/updated Project Implementation Manual (PIM) detailing, inter alia, the operational, financial management and administrative procedures for the implementation of the Project, in form and substance satisfactory to the Bank.

within 30 days of project effectiveness, amend and restate the memorandum of understanding between the Emergency Food Security Support Program’s -- Programme d’Urgence d’Appui à la Sécurité Alimentaire (PUASA) -- Management Unit (PMU) and the Regional Centers for Agriculture Promotion-- Centre Régional pour la Promotion Agricole (CERPAs), under terms and conditions satisfactory to the Bank.

by August 31, 2010, prepare an operational manual related to Component 1 of the Project for piloting the market-based mechanism for the sustainable delivery of inputs (fertilizers and seeds) to food crop producers, including the role of the recovered funds from the subsidized sale of fertilizer.

13

Annex 1: Detailed Description of Project Components

BENIN: Emergency Support to Enhance Food Security (ESEFS)

1. The project activities will be implemented through three components. Component 1 is devoted to agricultural inputs (fertilizers and improved seeds) delivery. Through component 2, the grant will help scaling-up the EFSSP’s activities in promoting small-scale irrigation infrastructures. Component three will provide institutional support to the PUASA Management Unit (PMU).

Component 1: Delivery of agricultural inputs (€2.42 million)

2. This component aims at (i) delivering fertilizer and improved seeds to about 15,500 producers (12,000 producers of maize and 3,500 producers of rice) in 2010, and (ii) piloting the market based input delivery mechanism developed under the EFSSP during the 2011 planting season.

3. Provision of fertilizer. The project will procure about 875 tons of fertilizers for 3,500 producers of rice and 2,400 tons for about 12,000 producers of maize, in total 3,275 tons of fertilizers for about 15,500 producers during the 2010 cropping season. This support will cover about 15,500 hectares of cereal crops (3,500 hectares of rice and 12,000 hectares of maize) and generate an additional production of about 15,500 tons of cereals (rice – 3,500 tons and maize – 12,000 tons). As under the EFSSP, the fertilizer procured by the project will be distributed at a subsidized rate (40 percent of the estimated market price). The cost-recovery on the fertilizer sales will allow the Government to finance the pilot of the market-based input delivery mechanism system in the following year.

4. Provision of improved seeds. As a complementary activity (as was the case under the EFSSP), the Government has committed to financing, through its own resources, the collection and distribution of 545 tons of improved seed (rice – 245 tons and maize – 300 tons) to about 15,500 producers. The stock will be collected from local seed producers supported by the Directorate of Agriculture. The PMU will manage the operation in collaboration with the Directorate of Agriculture and the Centres Régionaux pour la Promotion Agricole (CERPA) and the Centres Communaux pour la Promotion Agricole (CECPA)4, respectively for the collect and the distribution. The Government will subsidize the distribution of the improved seeds at 100 percent.

5. Distribution mechanisms. The PMU will ensure the transportation of fertilizers and improved seeds to the storage facilities of the CERPA and CECPA. The CERPA and CECPA will be responsible for managing the stocks and, in collaboration with producer organizations, distributing the inputs to final users. Each beneficiary will sign a contract with the PMU specifying the quantity of fertilizers and improved seeds he/she needs and his/her commitment to reimburse 60 percent of the total fertilizer cost, at the latest five months after the harvest. Producer organizations will facilitate the contact and contractual arrangements between their members and the PMU.

4 The Centre Regional de Promotion Agricole (CERPA) is the regional agency of the Ministry of Agriculture, Livestock and Fisheries; the Centre Communal de Promotion Agricole (CECPA) is the community-level unit of the CERPA.

14

6. Fertilizer cost recovery. The Government, through the PMU, will be responsible for recovering the fertilizer cost, which represents 60 percent of the total amount committed for fertilizer provision. The recovered funds (about €1.374 million) will be secured in an escrow account to be opened in a commercial bank acceptable to the Bank. A total amount of US$4.8 million (€3.2 million) is expected to be recovered from the fertilizer cost recovery of the EFSSP (the government had an 85 percent recovery rate during the 2008 agricultural season and one month after the 2009 harvest has recovered 26 percent). In total about €4.57 million will be secured and available to pilot the innovative market-based input delivery mechanisms for the 2011 planting season (see below). The procedures for the cost recovery are described in Annex 6 and further detailed in the Fertilizer Distribution Manual.

7. Piloting of market-based input delivery mechanism: The EFSSP is helping the various stakeholders design a market-based mechanism for the sustainable delivery of inputs (fertilizers and seeds) to food crop producers. The analytical work has begun and is expected to be completed and validated by end-May in the first quarter of 2010. The mechanism will consist of contractual partnership between producer organizations and private-sector operators (banks, wholesalers, importers, and distributers). The PMU will use the funds accumulated from the fertilizer cost recovery of both the IDA-financed EFSSP and this project (the ESEFSP) to support the implementation of this mechanism during the 2011 planting season. The ESEFSP will support this effort, inter alia, by providing funds to strengthen producer organizations. An operational manual for piloting the mechanism - including the role of the recovered funds from the subsidized sale of fertilizer - will be established in form and substance satisfactory to the Bank and validated by August 31, 2010. It will also lay out the criteria (e.g. efficiency, access, user satisfaction, etc.) for evaluating the pilot and an evaluation will be organized to document lessons learned and inform the design and implementation of the final mechanism.

Component 2: Promotion of small-scale irrigation infrastructure (€3.48 million)

8. This component’s aim is to increase the access of food crop producers to irrigation services, in order to intensify food crop production in the Niger river valley and in the lowlands of the hills region and in the Mono and Couffo rivers valleys. In particular, the component will support the development of additional 2,000 hectares in the Niger river valleys and 1,000 hectares in the lowlands of the hills region and in the Mono and Couffo rivers valleys. The component will also support the construction of related post harvest infrastructure, specifically 35 storehouses and 70 drying areas.

9. The technology for developing the small-scale irrigated perimeters relies on simple techniques that are rapid and easily implementable by the beneficiaries and local enterprises. In-depth technical studies are not necessary with this technology. The project will rely on the experience of the PMU in developing this type of small-scale irrigation infrastructure. In 2008 and 2009 about 5,000 hectares of small-scale irrigation infrastructures were developed under the PUASA.

10. Development of small-scale irrigation perimeters in the river valley regions: The technology for developing the small-scale irrigation infrastructure in the river valleys consists of a tubed drilling (on average 2 per 3 hectares, six to ten meters deep) equipped with a motor-driven pump. Local entrepreneurs are skilled at undertaking this task and motor pumps with the appropriate flow (10 and 20 liters per second) are available on the local market. However, given the quantity of pumps to be purchased, they will be procured through an international competitive bidding process and distributed to beneficiaries.

15

11. Perimeters are partitioned into 0.10 hectare plots, surrounded by small flood banks (0.5 meters wide by 0.4 meters high). The flood banks are constructed manually with soil taken from the perimeter and compacted. Water channels to conduct water to the individual plots are also constructed manually. The initial plowing of the plots is carried out with tractors or cultivators provided by the Agricultural Mechanization Program subsidized by the Government. The smoothing of the plot surface is realized manually providing temporary employment to villagers, minimizing the cost of the construction, and providing an opportunity to train the beneficiaries in the maintenance of the physical infrastructure. Lessons from past experience demonstrate the capacity of beneficiaries to conduct these activities successfully.

12. Development of small-scale irrigation perimeters in the hill region shallows. The aim in the hill region shallows is to retain surface water longer and create extra irrigation possibilities in the shallows. The technology consists of manually constructing small flood banks (0.5 meters wide by 0.4 meters high), following contour lines and using soil taken in the perimeters and compacted. Drain channels are also manually constructed to evacuate the water surplus in the case of strong rains. As described above, plowing is carried out with tractors or cultivators provided by the Agricultural Mechanization Program. The smoothing of the plots concerns only the space between two flood banks and is done manually.

13. The shallows perimeters are equipped with artisanal wells (approximately 6 to 10 meters deep and 1 meter in diameter) that are easily constructed by local entrepreneurs. The walls of the wells are protected by reinforced concrete tubes. Each well is equipped with a motor pump (of the same capacity and availability described above) and can cover, on average, three to five hectares.

14. Post harvest infrastructure. According to Direction de Génie Rural (DGR) norms, 200 square meters of drying area is necessary for each 50 hectares of irrigated perimeter. In total 35 storerooms of 150 square meters of surface and 70 drying areas of 200 square meters of surface will be constructed around the irrigated perimeters. Local enterprises are skilled in the construction of storerooms and drying areas.

Component 3: Support for project coordination, monitoring and evaluation (€0.34 million)

15. The PUASA Management Unit (PMU) will be in charge of the implementation of the project. The PMU was established in 2008 by a departmental order signed by the Minister of Agriculture, Livestock and Fisheries5 and has been responsible for the implementation of the IDA-financed EFSSP. The PMU is composed of: (i) a Coordinator responsible for the overall project management, (ii) an Agronomist responsible for the promotion of agriculture systems, (iii) a Rural Engineer, responsible for the development of small-scale irrigation infrastructures; (iv) a M&E Specialist, and (iv) an Accountant.

16. In particular, the PMU will be responsible for the following activities: (i) planning, programming, and budgeting of activities to be financed; (ii) preparation and management of the contractual partnership with the public and private service delivery agencies and producer organizations; (iii) supervision and control of the field activities; (iv) administration of critical technical and fiduciary functions (procurement, monitoring and evaluation, feed-back

5 Arrêté N°460/MAEP/D-CAB/SGM/DPP/DRH/SA du 07 novembre 2008, portant nomination des membres de l’Unité de Gestion du Programme d’Urgence d’Appui à la Sécurité Alimentaire et du Programme de Diversification Agricole par la Valorisation des Vallées (PDAVV)

16

from the beneficiaries, financial management); and (v) preparation of quarterly reports and end-of-project report.

17. The support provided under this component will strengthen the PMU by supporting its coordination activities, including: (i) developing a program implementation manual, (ii) setting up a computerized financial management system, (iii) improving the M&E system and its implementation, (iv) carrying out an impact evaluation study to analyze national food price trends, and (v) updating and implementing the ESMF. In addition the project will support training, acquisition of some equipment, office supplies, and other operational costs.

Geographic Selection and Targeting Criteria

18. Targeting of priority perimeters. In May 2009, PUASA brought together representatives of producer organizations and local and regional agencies of the MAED to decide on the priority perimeters to be developed in each region. In the Niger valley, 1,000 hectares will be developed in the county of Malanville and 1,000 hectares in the county of Karimama. In the Mono and Couffo Valleys, 200 hectares will be developed in 7 counties (5 in Bopa, 10 in Houeyogbe, 20 in Grand-Popo, 55 in Lalo, 50 in Aplahoue, 10 in Klouekanme, and 50 in Dogbo). In the Hills region’ swamps, 800 hectares will be developed in 5 counties (60 in Zogbodome, 220 in Bantè, 200 in Savalou, 270 in Glazoue, and 50 in Savè). Priority has been given to areas currently exploited by producers.

19. Individual beneficiary targeting. In the small-scale irrigated perimeters, all producers (men and women) sharing the ownership of the common land resources will be beneficiaries. With respect to the fertilizer distribution, the PMU in collaboration with Directorate of Agriculture and the local agricultural extension services (CECPA) will carry out an extensive information campaign regarding the terms and conditions and producer groups will take the lead in selecting beneficiaries based on these criteria. To ensure production, the PMU envisions allocating 60 percent of the fertilizer to larger producers (those who cultivate more than two hectares) and 40 percent to those cultivating on smaller plots.

17

Appendix 1Analysis of Food Prices in Benin

1. Between January 2005 and September 2007, food prices fluctuated around a relatively stable mean. Month-to-month reductions or increases in the food price index did not exceed 6 percent and 4 percent, respectively. Following the global food price crisis, Benin’s food prices rapidly increased by an estimated 32 percent between September 2007 and August 2008. This unprecedented increase in food prices has fueled a significant increase in the general price levels by 12 percent over the same period.

2. On average, food prices have remained 20 percent higher in the post-crisis period, as compared to the pre-crisis food price levels. This compares to the observed 11 percent variation for the general price levels in the economy. The tension on food prices persisted in 2009 when average food price levels were 7 percent higher than the average levels in 2008. This compares to an average increase of 3 percent for the whole economy. The persistent tension on food prices, despite good crop production seasons in 2008 and 2009, reflects a reduced market supply of locally produced food.

3. A similar trend is being observed across West Africa. In Burkina Faso, the price of cereals (millet, sorghum, maize, local rice) increased by 14 percent between 2008 and 2009 while production increased by more than 40 percent. The emerging evidence suggests that private food stocks in several countries across West Africa were substantially depleted during the 2007-2008 food price crises. Taking advantage of the two consecutive normal agricultural seasons in 2008 and 2009, producers have directed some of their productions to the replenishment of their stocks. Private food stocks play an important role in regulating sharp swings in food prices. Persistently higher food prices represent serious threats to food security, particularly for urban consumers and net food buyers in rural areas. This emergency operation is expected to strengthen the basis for a more sustained increase in food production in the targeted regions.

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Annex 2: Results Framework and Monitoring


Project Development Objectives Project Outcome Indicator Use of Project Outcome

Information

To increase domestic production of food crops (mainly maize and rice) in targeted areas

Rice production in project areas (tons) To inform policymakers

on progress on achieving outcome indicators

To inform policymakers on the potential of innovative institutional mechanisms for the delivery of agricultural inputs

Maize production in project areas (tons)

Direct Project Beneficiaries (number), of which female (%)

Intermediate Outcomes Intermediate Outcome indicators Use of Intermediate Outcome Monitoring

Component 1: Delivery of Agricultural InputsImproved access to and adoption of fertilizers and improved seeds among targeted 15,500 food crops producers

Improved market-based mechanism for input delivery

Fertilizer procured and distributed to farmers (tons)

To validate agronomic suitability of inputs and extension services

To demonstrate producers organizations and private operators’ capacity to run innovative agricultural inputs delivery mechanisms

Improved seed distributed to farmers (tons)Producers using adequate dose of fertilizer (number)Area cultivated /treated with adequate dose of fertilizer (ha)Proposal of market-based input delivery mechanism for food crop producers adopted and tested (yes/no)

Component 2: Promotion small-scale irrigated infrastructure Improved access to small-scale irrigation infrastructure in the the Niger river valleys, lowlands of the hills region and in the Mono and Couffo rivers valley

Improved access to storage and post-harvest facilities

Small-scale irrigated perimeters developed in the Niger river valley (ha)

To gauge investment in agricultural infrastructures

To validate investment in agricultural infrastructures

Small-scale irrigated perimeters developed in the lowlands of the hills region and in the Mono and Couffo rivers valleys (ha)

Producers settled in small-scale irrigation perimeters (number)

150 m2 capacity storage facilities constructed (number) 200 m2 capacity drying areas constructed (number)

19

Arrangements for Results Monitoring and Evaluation

To provide a comprehensive summary of the results, please note that this table combines the results monitoring of the two parallel financed operations – the IDA GFRP-financed Emergency Food Security Support Project (EFSSP) approved in October 2008 and the proposed EU GFRP-financed Emergency Support to Enhance Food Security Project (ESEFSP). For implementation and completion (ISR/ICR) reporting purposes for this operation, please refer to the relevant results for the EU-funded ESEFSP (in bold). For further details on the EFSSP operation, please refer to the relevant Emergency Project Paper (Report No. 44942-BE)

Outcome indicators

Baseline(2008 for IDA and 2009 for

EU)

Progress to date under IDA-

funded EFSSP

Target Values Data Collection and Reporting

2009 2010 2011 Frequency and Reports

Data Collection Instruments

Responsibility for Data Collection

Rice production in EFSSP (IDA-funded) project areas (tons)

42,000(estimate) 34.854

48,000 (additional 6,000 tons)

- - PMU quarterly reports

CERPA/CECPAdatabase

CERPA/CECPA PMU

Rice production in ESEFSP (EU-funded) project areas (tons)

58,000(estimate)

- -61,500

(additional 3,500 tons)

- PMU quarterly reports

CERPA/CECPAdatabase

CERPA/CECPA PMU

Maize production in EFSSP (IDA-funded) project areas (tons)

45,000 (estimate) 83,946

99,000 (additional

54,000 tons)

- - PMU quarterly reports

CERPA/CECPA database

CERPA/CECPAPMU

Maize production in ESEFSP (EU-funded) project areas (tons)

190,000(estimate) - -

202,000 (additional 12,000 tons)

- PMU quarterly reports

CERPA/CECPAdatabase

CERPA/CECPA PMU

Direct project beneficiaries (for IDA-funded EFSSP) (number)of which female (%)

0 22,602 50,000 - - PMU quarterly reports

CERPA/CECPA database

CERPA/CECPAPMU

Direct Project Beneficiaries (for EU-funded ESEFSP) (number) 0 - - 15,500 - PMU quarterly

reports CERPA/CECPA database

CERPA/CECPAPMU

20

Output indicators

Baseline(2008 for IDA and 2009 for

EU)

Progress to date under IDA-

funded EFSSP

Target Values Data Collection and Reporting

2009 2010 2011 Frequency and Reports

Data Collection Instruments

Responsibility for Data

Collection

Component 1: Delivery of agricultural inputsFertilizer procured and distributed to farmers under IDA-funded EFSSP (tons)


Procurement records, invoices and receipts

PMU

Fertilizer procured and distributed to farmers under EU-funded ESEFSP (tons)

0 - - 3,275 - PMU quarterly reports


PMU

Improved seeds distributed to farmers under IDA-funded EFSSP (tons)



PMU

Improved seeds distributed to farmers under EU-funded ESEFSP (tons)

0 - - 545 - PMU quarterly reports


PMU

Area cultivated / treated with adequate dose of fertilizers under IDA-funded EFSSP (ha)


CERPA/CECPA Data base

CERPA/CECPAPMU

Area cultivated / treated with adequate dose of fertilizers under EU-funded ESEFSP (ha)



CERPA/CECPAPMU

Producers using adequate dose of fertilizer under IDA-funded EFSSP (number)



CERPA/CECPAPMU

Producers using adequate dose of fertilizer under EU-funded ESEFSP (number)



CERPA/CECPAPMU

New agricultural input delivery mechanisms set-up and tested (IDA and EU funded financing) (yes/no)

No NoStudy

underway

NoMechanism designed &

adopted

NoOperationa

l manual developed

YesMechanism

piloted & evaluation

PMU quarterly reports

Validation workshop report

PMU

21

& adopted report submittedComponent 2: Promoting small-scale irrigated perimeters (new component under the EU-funded ESEFSP)Area of small-scale irrigated perimeters developed in Niger river valleys (ha) under the project

0 - - 1,000 2,000 PMU quarterly reports

CERPA/CECPA/DGRE Data base

CERPA/CECPA/DGRE/PMU

Area of small-scale irrigated perimeters developed in the lowland of the hills region and in the Mono and Couffo rivers valleys (ha)

0 - - 500 1,000 PMU quarterly reports

CERPA/CECPA/DGRE database


Producers settled in the small-scale irrigation perimeters developed (number)

0 - - 1,500 3,000 PMU quarterly reports

CERPA/CECPA/DGRE database


150 m2 capacity storage facilities constructed (number) 0 - - 0 35 PMU quarterly

reportsCERPA/CECPA/DGRE database


200 m2 capacity drying areas constructed (number) 0 - - 0 70 PMU quarterly

reportsCERPA/CECPA/DGRE database


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Annex 3: Summary of Estimated Project Costs


Project costs by expenditure category (millions of Euros)

Categories of expenditures Euros (millions)

1. Goods and equipments 3.35

2. Works 1.69

3. Sub-grants 0.764. Consulting Services and Trainings 0.27

5. Operating costs 0.17

6. Unallocated 0.26

Total Grant 6.50

Project costs by component (millions of Euros)

Component Euros (millions)

Component 1: Delivery of agricultural inputs 2.42

Component 2: Promotion of small-scale irrigation infrastructures 3.48

Component 3: Support for project coordination and M&E 0.34

Unallocated 0.26Total 6.50

23

Annex 4: Financial Management and Disbursement Arrangements


Summary of the Financial Management Assessment

1. The PUASA Management Unit (PMU) which has been implementing the IDA-financed EFSSP will be responsible for the implementation of this Grant. The project consists of the following three components: (i) delivery of agricultural inputs (€2.42 million); (ii) promotion of small-scale irrigation infrastructure (€3.48 million); and (iii) institutional support to the PMU (€0.34 million).

2. A financial management assessment was carried out in accordance with the Financial Management Practices Manual issued by the Financial Management Board in November 2005. The objective of the assessment was to determine whether the PMU had acceptable financial management capacity. A PMU’s arrangements are acceptable if they are capable of recording accurately all transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the Project’s assets, and are subject to auditing arrangements acceptable to the Bank. These arrangements should be in place when project implementation starts and be maintained as such during project implementation.

3. The conclusion of the assessment is that the financial management arrangements for the project meet the Bank’s requirements under OP/BP 10.02 and are adequate to provide, with reasonable assurance, accurate and timely information on the status of the project required by IDA.

4. The financial management risk is assessed as moderate. The PMU is staffed with an experienced financial management specialist who has already implemented Bank-financed projects and there is an appropriate computerized accounting system in place. The ‘Fertilizer Distribution Manual’ (FDM), describing the procedures that govern the emergency fertilizer distribution mechanisms and cost recovery procedures, was prepared by the PMU under the IDA-financed EFSSP. It will be updated to reflect lessons learned in the implementation of the EFSSP (for example, the field agents of the Local Agricultural Extension Services (the CECPA) were found to be better placed to manage the cost recovery than the National Agency for Food Security as originally stipulated in the FDM) and applied to the fertilizer distribution and cost recovery activities of this grant.

5. Regarding the sub-grants to communities and producer organizations for the development of small-scale irrigation infrastructure, it was agreed that the PMU will contract with AGEFIB (Agence de Financement des Initiatives de Base) to provide technical support, strengthen the financial management capacity of producer organizations, and prescreen disbursement requests of the communities before payment by the PMU.

Country Issues

6. The Overall Inherent Risk of the public financial management system in Benin is rated as Substantial. The 2008 Public Expenditure and Financial Accountability (PEFA) assessment noted that key risks remain in the following areas, namely: weak accounting recording and reporting system. But these risks will not impact the project as it will not rely on the public financial management system.

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Fiduciary Risks and Mitigation Measures

7. The FM risk assessment and mitigations measures are summarized in the table below:

Risk Risk Rating Risk Mitigation Measures Conditionality

Residual Risk

RatingInherent Risks: S MCountry: Weak governance and anti- corruption institutions.

SThe government has taken strong measures for fighting against corruption. Issues relating to internal control, reporting and auditing reforms are ongoing. But this risk will not impact the project as it will not rely on the national accounting and auditing system.

M

Entity LevelThe PUASA Management Unit (PMU) FM capacity, and in particular the capacity to manage the fiduciary aspects of a WB project with community-driven development components, might be weak.

S

A service contract will be signed between the PMU and AGEFIB to provide fiduciary support at the community level. AGEFIB is a fiduciary agency with recognized experience in implementing community -driven development projects and management of Bank-financed operations.

M

Project levelCommunities responsible for sub-projects (the development of small-scale irrigation infrastructures) under component 2 may have weak capacity regarding fiduciary aspects.

Insufficient knowledge and experience with IDA fiduciary procedures, in particular CDD procedures, may delay project implementation.

S

S

Dedicated accounts will be opened for each producer group or union and a specific implementation manual detailing all FM procedures and simple FM tools to used by the communities, will be prepared. AGEFIB will provide FM training to the financed communities and will insure the correct documentation of their expenditures. Other technical institutions of the Benin MAED (CERPA and Direction du Génie Rural) will handle the technical oversight of the small-scale irrigation infrastructure development.

The project FM staff will benefit from the support of AGEFIB as a fiduciary agency which had strong experience in assisting communities under several IDA financed projects in Benin. IDA supervision mission could also help to identity and address weaknesses.

M

M

Control Risks: S MBudgetingBudget preparation process may be delayed as different stakeholders are involved in the project implementation.

S

The FM specialist of PMU will help stakeholders prepare realistic budgets consistent with the disbursement plan. M

AccountingLack of adequate qualified accountant within the PMU. S

The contract of the FM specialist recruited under the IDA-financed project must be extended until the end of the EC grant. AGEFIB6 will prescreen all disbursement requests prepared by local communities check and provide clearance for payment to

M

6 AGEFIB (Agence pour le Financement des Initiatives de Base), a fiduciary agency with strong financial management capacity that provides fiduciary support for some Bank financed projects.

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the PMU.Internal AuditLack of formal FM procedures for the sub-projects to be implemented by producer organizations or unions.

SThe Project Implementation Manual including FM procedures will outline approval and authorization procedures with clear segregation of duties. The key implementing partners such as CERPA (regional agency of the MAED), their local units (CECPA), and the DGR (Direction du Génie Rural) will be involved in the supervision of the irrigation infrastructure construction and will provide clearance before any payment to producer organizations. AGEFIB will be responsible for checking for the correct documentation of expenditures at the community level.

The Project Implementation Manual will be revised to include operational and fiduciary procedures for implementation of the community-level small-scale irrigation infrastructure sub-project within one month of project effectiveness.

M

External AuditProject audit reports likely to be submitted late.

Weak capacity of the Chamber of Accounts.

SA private external auditor has been recruited for the EFSSP. The TOR and contract will be expanded to include the proposed grant.

L

Funds FlowFunds may be diverted or used for non project eligible purposes especially at community level.

SDedicated accounts will be opened by all producer organizations involved in the project. AGEFIB will provide appropriate capacity building activities and verify the reliability of the producer groups’ record keeping and expenditures.

M

ReportingDelay and difficulties in the preparation of acceptable Interim Financial Reports (IFRs).

SA qualified and experienced FM specialist was recruited for the IDA-financed EFSSP project and is satisfactorily carrying out the FM activities. The contract will be extended to the end of the proposed grant. The support of the AGEFIB, as a fiduciary agency at community level, will reinforce FM oversight and facilitate the timely submission of acceptable IFRs.

M

Overall Risk S MH: High S: Substantial M: Moderate L: Low

Strengths and Weaknesses

8. The strengths of the PMU include: (i) the availability of qualified accounting staff, (ii) the existence of a computerized accounting system, (iii) the existence of a ‘Fertilizer Distribution Manual’ (FDM), and (iv) previous experience in the distribution of subsidized fertilizer and contracting with local communities and producer organizations for cost recovery.

9. The potential challenge may be the weak capacity of producer organizations or unions in financial management. This weakness will be mitigated by: (i) the revision of the project implementation manual to include specific operational and FM procedures for the irrigation infrastructure sub-projects to be implemented by the producers groups under Component 2 of the project and (ii) a contractual agreement between the PMU and AGEFIB, to provide technical support, including fiduciary support at PMU and community levels. AGEFIB is recognized as a fiduciary agency, with a strong experience in the implementation of Bank-financed projects.

26

AGEFIB is currently involved in the implementation of the Community Driven Development Project (P081484) and the Second Multi Sector HIV/AIDS Control Project (P096056).

Financial Management Action Plan

10. The action plan below indicates the actions to be taken for the project to strengthen its financial management system.

Disbursement arrangements

11. The PMU would be responsible for (i) managing the operational account that will be opened at an acceptable commercial bank, and (ii) preparing withdrawal applications to be submitted to the World Bank.

Disbursement methods

12. Various disbursement methods will be available for use under the project, i.e. direct method, reimbursement method, special commitment method and the advances method. The advances method will be applied for the replenishment of the Designated Account (DA). Further instructions on disbursement and details on the operation of the DA will be outlined in the disbursement letter.

Transaction based disbursement

13. Disbursements under the grant would be transactions-based. Direct Payment and Statement of Expenditures (SOEs) methods will apply as appropriate. An Operational Account will be opened at a commercial bank to facilitate payment for eligible expenditures for operating costs and SOE procedures-based expenditures for relevant categories of expenditures as reflected in the Grant Agreement.

Flow of funds

14. The Caisse Autonome d'Amortissement (CAA) is the assigned representative of the Recipient for the mobilization of the funds. Withdrawal Application requests are prepared by the Project FMS, signed by a designated signatory or signatories (the signature authorization letter is signed by the Minister of Finance), and sent to the Bank for processing. This procedure applies to all Bank financed projects in Benin.

Action to be taken By when By whom

Extend the contract of the FM specialist in the PMU to cover the proposed grant implementation period

Within one month of effectiveness

Minister of Agriculture, Livestock and Fisheries

Revise the Project Implementation Manual to include the technical and FM procedures for the implementation of the small-scale irrigation subprojects under Component 2

Within one month of effectiveness

PMU, with the support of an external consultant

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15. Funds will flow from the Grant Account through the Designated Account opened at the Central Bank of Benin. The funds would be released to the Operational Account to be opened in a reputable commercial bank. The Operational Account would be managed by the PMU.

16. Regarding the sub-grants to producer groups and communities for the development of the small-scale irrigation infrastructure under Component 2, producer groups would be required to open dedicated accounts in local banks or credit unions. The PMU would transfer the funds from the Operational Account to the producer group accounts once the producer groups receive the appropriate training and the sub-project contract (between the PMU and the producer group) is signed. AGEFIB will accompany the entire process, providing training and support to the producer organizations in preparing sub-project dossiers (with technical input from CERPA and DGR), and financial management, monitoring and reporting. The detailed procedures will be documented in the updated PIM to be submitted within a month of project effectiveness.

17. The grant proceeds would be disbursed over an eighteen month period. On project closure, a period of two months (grace period) after the closing date, as agreed with the Bank, would be allowed to complete processing of disbursement for expenditures incurred up to and until the closing date of the grant.

Budgeting arrangements

18. The Project would adopt a comprehensive cash budgeting arrangement. The Budget will include all planned project activities for the year. The project FM specialist will be responsible for preparing the annual budget.

Audit arrangements

Internal Audit

19. Internal audit functions will be assumed by the Government internal audit entity within the MAED, in conformity with the 2006 decree regulating internal audit.

External audit

20. An external auditor has been recruited for the IDA-financed EFSSP. The Terms of References (TORs) will be expanded to include the current grant. The Auditor will express an opinion on the Annual Financial Statements, and perform his audit in compliance with International Standards on Auditing (ISAs). He will be required to prepare a Management Letter detailing his observations and comments, providing recommendations for improvements in the accounting system and the internal control environment. The audit report on the annual project financial statements and activities of the DA will be submitted to IDA within six months after the end of each project fiscal year.

Reporting and Monitoring

21. Quarterly Interim Un-audited Financial Reports (IFRs) would be prepared by the project accountant and will include sources and uses of funds by project expenditures classification. It will also include a comparison of budgeted and actual project expenditures (commitment and disbursement) to date and for the quarter. The PMU will submit copies of the IFRs to the Bank within 45 days following the end the quarter.

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22. The PMU will produce Annual Financial Statements, and these statements will comply with International Accounting Standards (IAS) and World Bank requirements. These Financial Statements will comprise of:

A Statement of Sources and Uses of Funds A Statement of Commitments Accounting Policies Adopted and Explanatory Notes A Management Assertion that project funds have been expended for the intended

purposes as specified in the relevant financing agreements

Accounting policies and procedures

23. Project accounts will be maintained on a cash basis, supported with appropriate records and procedures to track commitments and to safeguard assets. Annual Financial statements will be prepared by the PMU in accordance with the private accounting standards (SYSCOHADA) currently used in Benin by all Bank-funded projects. A simplified financial manual will be provided to producer organizations and unions, and appropriate capacity building sessions will be carried out in this area by the AGEFIB, which will be involved in FM oversight at the community level.

Supervision Plan

24. The intensity of on-site FM visits will be based on the assessed FM risk for the project. During project implementation, there will be two supervision missions during year 1 and one the following year, complemented by desk reviews of quarterly IFRs; review of annual audited financial statements and management letter as well as timely follow-up of arising issues; and updating the FM rating in the Implementation Status Reports (ISR).

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Designated Account (BCEAO)

managed by CAA

WA (Funds) DPGrant Account

Managed by IDA

Operational Account (Commercial Bank) managed by PMU

Funds

Reports / Documents / Goods etc

Beneficiaries, Suppliers, Consultants

Suppliers / Consultants Account

AccountsManaged by Producer

Organizations

European Community Grant

WA / DP

Flow of Funds Diagram

CAA Caisse Autonome d’AmortissementDP Direct PaymentWA Withdrawal ApplicationBCEAO Central Bank of West African States

CAA

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Annex 5: Procurement Arrangements


A. Background

1. A Country Procurement Assessment Report (CPAR), assessing the national procurement system, was carried out in April 1999 for Benin and an action plan for a procurement system reform was developed in November 2002. This action plan supports the modernization of the regulatory and institutional framework, and its objectives are to: (i) improve the management of public contracts, (ii) modernize public procurement procedures, (iii) strengthen capacities, (iv) establish an independent control system, and (v) adopt anti-corruption measures. In addition, the plan provides for the gradual empowerment of the decentralized procurement entities; the definition of a strategic framework for capacity building in procurement; and the updating of tools such as standard bidding documents and manual for procurement procedures to ensure effective use of the procurement code.

2. Implementation of the new institutional framework has translated into the creation of a: (i) National Commission of Public Procurement Regulation (Commission National de Régulation des Marchés Publics, CNRMP), entity independent of procurement transactions and comprising the public and private sectors and civil society, and responsible for policy, audit of public procurement and dealing with complaints from bidders, (ii) National Directorate for Public Procurement (Direction National des Marchés Publics, DNMP) responsible for controlling the quality of procurement transactions, and (iii) Public Procurement Units (Cellule de Passation des Marchés, CPMP) at Ministries level. The new Procurement law promulgated in September 2009 provides a legal and institutional procurement framework harmonized with the West African Economic and Monetary Union (WAEMU) Procurement Directives adopted by its Council of Ministers in December 2005.

B. Guidelines

3. Procurement for the proposed project would be carried out in accordance with (i) the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004, revised in October 2006; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004 revised in October 2006; (ii) the requirements of OP 8.00 for Rapid Response to Crises and Emergencies; and (iii) the provisions of the project Financial Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the grant, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time-frame are agreed between the Borrowers and the Bank in the respective Procurement Plans. The Procurement Plans will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

4. National Competitive bidding procedures may be used provided that: (i) bids are advertised in national newspapers with wide circulation; (ii) bid evaluation, bidder qualification and award criteria are specified clearly in the bidding documents; (iii) bidders are given adequate response time (minimum four weeks) to prepare and submit bids; (iv) bids are awarded to the lowest evaluated bidder proven this bidder is qualified; (v) eligible bidders, including foreign

31

bidders, are not precluded from participating; and (vi) no preference margin is granted to domestic suppliers.

C. Procurement Documents

5. The procurement will be carried out using the Bank’s Standard Bidding Documents or Standard Request for Proposal (RFP) respectively for all ICB for goods and recruitment of consultants. For National Competition Bidding (NCB), the Borrower shall submit a sample form of bidding documents to the Bank prior review and will use this type of document throughout the project once agreed upon. The Sample Form of Evaluation Reports developed by the Bank, will be used.

D. Advertising procedure

6. In order to get the broadest possible interest from eligible bidders, a General Procurement Notice (GPN) will be published in the UN Development Business (UNDB) online, Development Gateway’s Market (dgMarket), and in national newspapers of wide circulation to advertise for major consulting assignments (above US$200,000 equivalent) and ICB. The Borrowers will keep a roster of the responses received from the potential bidders interested in the contracts.

7. Specific Procurement Notices (SPN) for goods to be procured under ICB and NCB , and for consultant services will be published in at least one national newspaper of wide national circulation (or official gazette). Moreover, for all ICB procurement and all requests for expressions of interest relating to large consulting services (above US$ 200,000 equivalent), the SPN will be published in accordance with advertising provisions in the following guidelines: “Guidelines: Procurement under IBRD Loans and IDA Credits” dated May 2004 revised October 2006; and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated May 2004, revised October 2006. At least two weeks will be allowed for submission for the Expression of Interest (EOI).

8. For ICB and request for proposal that involves the international consultants, the contract awards shall be published in UNDB online and in dgMarket within two weeks of receiving IDA’s "no objection" to the recommendation of contract award. For Goods, the information to publish shall specify (i) name of each bidder who submitted a bid; (ii) bid prices as read out at bid opening; (iii) name and evaluated prices of each bid that was evaluated; (iv) name of bidders whose bids were rejected and the reasons for their rejection; and (v) name of the winning bidder, and the price it offered, as well as the duration and summary scope of the contract awarded. For Consultants, the following information must be published : (i) names of all consultants who submitted proposals; (ii) technical points assigned to each consultant; (iii) evaluated prices of each consultant; (iv) final point ranking of the consultants; and (v) name of the winning consultant and the price, duration, and summary scope of the contract. The same information will be sent to all consultants who have submitted proposals.

E. Procurement methods

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9. Procurement of Goods. Goods to be procured under this project will include: (i) fertilizer, including operating cost for delivery; (ii) 2,200 motor pumps and accessories; and (iii) a vehicle to be used by PMU. Goods should be grouped in bid packages and should be procured through International Competitive Bidding (ICB). Contracts estimated to cost less than US$300,000 equivalent may be procure through NCB. In response to the new Framework for Rapid Response to Crises and Emergencies captured in OP 8.00, and to facilitate project implementation and quick delivery of results, no objections will be given, where appropriate, for using of fast track competitive procedures as the Limited International Bidding (LIB) for procurement of goods using lists of pre-qualified suppliers with good track record to whom periodic invitations are issued.

10. When appropriate, procurement through shopping procedures based on a model request for quotations satisfactory to the Bank may be used, for small quantities of goods estimated to less than US$50,000. For shopping method, contract will be awarded following evaluation of bids received in writing form based on written solicitation issued to several qualified suppliers (at least three) who have a physical shop of the concerned goods. The award would be made to the supplier with the lowest price only after comparing a minimum of three quotations open at the same time, provided he has the capacity to execute the contract successfully and goods proposed is technically conform. For shopping, the Project’s Procurement Specialist will keep a register of suppliers updated at least every six months. Goods which meet the requirements for "Direct Contracting” referred in paragraph 3.1 and 3.6 of the Procurement Guidelines may be, with the Bank prior agreement, procured in accordance with the provision of paragraphs 3.6 and 3.7 of these Guidelines.

11. Procurement of Works. Works procured under this project, would include: (i) the construction of 200 artisanal wells; (ii) the construction of 35 storerooms of 150 square meters of surface and 70 drying areas of 200 square meters of surface; (iii) technical support to villagers for the implementation of the irrigation perimeters plan. In response to the new Framework for Rapid Response to Crises and Emergencies captured in OP 8.00, and to facilitate project implementation and quick delivery of results, no-objections will be given, where appropriate, to the application of the following: using fast track competitive procedures as procurement methods (fast track LIB) for procurement of goods using lists of pre-qualified contractors with good track record to whom periodic invitations are issued. When appropriate, procurement through shopping procedures based on a model request for quotations satisfactory to the Bank, may be used for small works estimated to less than US$50,000. For shopping method, contract will be awarded following evaluation of bids received in writing form based on written solicitation issued to several qualified contractors (at least three) specialized in the area of assignment to be performed. The award would be made in the same condition as described above for Goods.

12. Sub-projects procurement. Sub-project procured under this project will include: (i) the realization of 2,000 tubed drillings. Contracts for the execution of these works as sub-project under Component 2 of the project will be awarded on the basis of the simplified procedures referred to in the paragraph 3.17 of the guidelines. The simplified procedures accepted by the Bank in the PIM will be used.

13. The PUASA Management Unit will be responsible for the compliance with the procedures. At least two procurement post reviews will be conducted by an Independent

33

Consultant hired by the Borrower, apart from IDA reviews. The PIM will specify the prior examination ceiling for contracts signed under a sub-project. 14. Selection of Consultants. Consultancy services will include: (i) preparation of a PIM; (ii) revision of the ESMF; (iii) preparation of the FM System; (iv) monitoring and control of the realization of the 2,000 hectares of perimeters in the Niger river valleys and of the 1000 hectares of the lowlands of the hills region and in the Mono and Couffo rivers valleys; (v) support to the innovated market based mechanisms for the delivery of food crops inputs to the producers; (vi) baseline survey about the Project’s M&E indicators; (vii) audit 2010; (viii) internal evaluation. The Project has been classified as a rapid response project where, in conjunction with OP 8.00, Accelerated and Streamlined Procedures may apply to improve the flexibility, speed, and effectiveness of the Bank’s emergency response. The use of a “pool of experts,” or a list of “pre-selected’ consulting firms and/or individuals may, therefore, be an appropriate method for supporting project implementation. Consultant firms will be selected through the following methods: (a) Quality and Cost Based Selection (QCBS); (b) selection based on the Consultant’s Qualification (CQS) for contracts which amount are less than US$100,000 equivalent, (c) Least Cost Selection (LCS); and (d) Single Source Selection (SSS), with prior agreement of IDA, for services in accordance with the paragraphs 3.10 to 3.12 of Consultant Guidelines. Individual Consultant (IC) will be hired in accordance with paragraph 5.1 to 5.4 of Bank Guidelines; sole source may be used only with prior review of the Bank.

15. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines, if a sufficient number of qualified individual or firms are available. However, if foreign firms express interest, they would not be excluded from consideration.

16. Training and Workshops. The training, workshop, and conferences (including training material and support) will be carried out based on approved annual training and similar activities plan. A detailed training and workshop’s plan giving nature of training/workshop, number of trainees/participants, duration, staff months, timing and estimated cost will be submitted to IDA for review and approval prior to initiating the process. The selection methods will derive from the activity requirement, schedule and circumstance. After the training, the beneficiaries will be requested to submit a brief report indicating what skills have been acquired and how these skills will contribute to enhance his/her performance and contribute to the attainment of the project objective.

17. Incremental Operation Costs. Operating costs financed by the Project are incremental expenses, including office supplies, vehicles operation and maintenance, maintenance of equipment, communication costs, rental expenses, utilities expenses, consumables, transport and accommodation, per diem, supervision costs, and salaries of short-term contractual staff. These will be procured using the procurement procedures specified in the Project Administrative, Financial and Accounting Manual accepted by the Bank.

F. Assessment of the Agencies Capacity for Procurement

18. The proposed Grant will be implemented by the PUASA Management Unit (PMU), the same unit implementing the IDA-finance Emergency Food Security Support Project (EFSSP).

34

The procurement activities for the EFSSP were carried out by the PMU with the assistance of the Procurement Specialist of AGEFIB who was recruited for the Bank-financed Community Driven Development (CDD) Project, which will be extended until June 30, 2011. The procurement activities for the proposed grant will also be carried out by the PMU with assistance from the Procurement Specialist of AGEFIB. However, given that the CDD project is closing June 30, 2011, the PMU will be reinforced by the recruitment of a Procurement Officer.

19. A procurement capacity assessment was conducted at the MAED, the Ministry responsible for the EFSSP and the proposed project. The assessment was carried out and actualized respectively in July 2008 and December 2009. The assessment reviewed the organizational structure, the procurement process and management, and the interaction between the PMU, the MAED and others entities involved in the procurement process. The assessment showed that the Ministry has a procurement unit which is well staffed. However, the staff is not familiar with Bank’s procurement procedures and is not well qualified to manage or implement the project’s procurement activities in a satisfactory manner.

Action to be taken By when By whom

Recruit a procurement officer for the PMU Within 1 month of effectiveness

Minister of Agriculture, Livestock and Fisheries

Revise the Project Implementation Manual (in particular, the Administrative, Financial and Accounting Manual) to include a detailed procurement section and community-based procurement procedures for implementation of component 2

Within 1 month of effectiveness

PMU, with support of an external consultant

20. The measures agreed upon to strengthen the PMU are (a) the recruitment of a Procurement Officer who will be assisted by the Procurement Specialist of AGEFIB; (b) the revision of the Administrative, Financial and Accounting Manual to strengthen the procurement section, (c) the use of AGEFIB, a fiduciary agency with strong experience in implementing the Bank-financed CDD project, to supervise the implementation of sub-projects under Component 2 and continue to directly assist the PMU with procurement activities until the Procurement Officer is recruited.

21. The table below summarize the project preparation action plan:

22. Given (i) the experience of the PMU in carrying out procurement activities for the EFSSP, (ii) the recruitment of an “in-house” Procurement Officer, and (iii) the support of AGEFIB for community-based procurement, the overall project procurement risk has been rated moderate.

G. Procurement Plan

23. The PMU developed a draft Procurement Plan covering the 16-month implementation period. This plan has been agreed between the Borrower and IDA project team during the negotiations and was made available at the PMU, in the Project’s database and on the Bank’s external website. The Procurement Plan will be updated, in agreement with the Bank, at least annually in conjunction with an updated annual work program, or to reflect an action plan

35

following improvements in institutional capacity. All procurement activities will be carried out in accordance with the original or formally updated and agreed procurement plan.

H. Fraud, Coercion, and Corruption

24. All procuring entities and staff, as well as Project Implementation Agencies, Borrower, bidders, suppliers, and contractors shall observe the highest standard of ethics during the procurement and execution of contracts financed under the project in accordance with paragraphs 1.15 & 1.16 of the Procurement Guidelines and paragraphs 1.25 & 1.26 of the Consultants Guidelines.

I. Frequency of Procurement Supervision Missions and Audits

25. In addition to the prior review to be carried out from World Bank offices, the capacity assessment of procurement activities has recommended supervision every six months and at least one Bank annual Post Procurement Review (PPR); the ratio of post review is at least 1 to 5 contracts. The Independent Post Review could be conducted through a consultant selected by the Bank at any time until two years of the closing date of the project. The project implementation agency shall send to the Bank, every six month, the project procurement management report with details on implementation progress, problems and solutions proposed.

J. Details of the Procurement Arrangement Involving International Competition

Good, Works, and Non-consulting Services

(a) List of contract Packages which will be procured following ICB and direct contracting:

Goods

Ref N° Contract(Description)

Responsible structure

EstimatedCost

(Euro)Proc.

MethodPre-

Qual.Domestic

Pref.(yes/no)

Review by

BankPrior / Post

Expected Bid Opening Date

1

Purchase, delivery and storage of fertilizers (2,400 tons of NPK and 875 tons of urea) in Allada

PUASA/PMU 2,046,875 LIB NO NO Prior June 2010

2

Transportation of fertilizers (2,400 tons of NKP and 875 tons of urea) from Allada to villages (to be organized in several lots)

PUASA/PMU 249,619 NCB NO NO Prior July 2010

3 Purchase of 4X4 vehicles PUASA/PMU 91,463 NCB NO NO Prior June 2010

4 Purchase of fuel PUASA/PMU 60,976 Shopping NO NO Post May 2010

5 Purchase of office equipment PUASA/PMU 76,220 NCB NO NO Post May 2010

6Purchase and installation of 2000 motor pumps (with their accessories) on the

PUASA/PMU 823,171 LIB NO YES Prior July 2010

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tubed drillings in the Niger and Couffo’s valleys and 200 other motor pumps (with their accessories) for the wells in the Hills region

TOTAL 3,348,324

Works

Ref N° Contract(Description)

Responsible structure

EstimatedCost

(Euro)Proc.

MethodPre-

Qual.Domestic

Pref.(yes/no)

Review by

BankPrior / Post

Expected Bid Opening Date

1

Sub-grants for the realization of 2000 tubed drillings and conversion of 2000 hectares of irrigated perimeters in Niger river valley and conversion of 1000 ha of irrigated perimeters in the hills and in Mono Couffo river valleys

PUASA/PMU 762.195 CP

2

Realization of 200 artisanal wells on 1000 hectares of shallows in the hills region

PUASA/PMU 350,610 NCB NO NO Prior June 2010

3

Construction of 35 storerooms of 150 m2 and 70 drying areas of 200 m2 near the perimeters

PUASA/PMU 1,333,841 NCB NO NO Prior June 2010

TOTAL 2,446,646

LIB= Limited International Competitive Bidding; NCB= National Competitive Bidding; CP= Community Participation

(b) Prior review: all contracts estimated to cost above US$300,000 for goods and US$ 1,000,000 for works will be subject to IDA prior review as determined mandatory in paragraphs 2 and 3 of Annex 1 of the Bank’s Procurement Guidelines.

(c) Post review: for each contract not submitted to the prior review, the procurement documents will be submitted to IDA post review in accordance with the provisions of paragraph 5 of Annex 1 of the Bank’s Procurement Guidelines. The post review will be based on a ratio of at least 1 to 5 contracts.

37

N° Contract (description)

Responsible Structure

Estimated Cost

(Euro)Proc.

MethodPre-Qual.

Domestic Pref.

(yes/no)

Reviewby Bank Expected Bid-

Opening Date

1

Preparation of a Project Implementation Manual

PUASA/PMU 9,146 IC No Yes Prior May 2010

2 Revision of the ESMF PUASA/PMU 14,482 IC No Yes Prior Apr 2010

3 Preparation of the FM system PUASA/PMU 10,671 CQS No Yes Prior May 2010

4

Support to the innovated market based mechanisms for the delivery of food crops inputs to the producers

PUASA/PMU 14,482 CQS Yes Yes Prior May 2010

5Baseline survey about project’s M&E indicators

PUASA/PMU 9,146 CQS Yes Yes Prior May 2010

6 Audits 2010 and 2011 PUASA/PMU 14,482 SSS No Yes Prior Oct 2010

7 Internal Evaluation PUASA/PMU 14,482 IC No Yes Prior Apr 2011

8

Monitoring and control of the realization of the 2,000 hectares of perimeters in the river valleys and of the 1,000 hectares of shallows.

PUASA/PMU 22,866 SSS Yes Yes Prior May 2010

9Contract with AGEFIB for sub-project management

PUASA/PMU 59,000 SSS No Yes Prior Apr 2010

10 Recruitment of procurement officer PUASA/PMU 35,000 IC No Yes Prior Apr 2010

TOTAL 203,757

(b) Prior review: (a) each contract estimated to cost more than US$200,000 per contract for firms; (a) all single source selection; (c) the first two (2) contracts of each selection method irrespective of the amount; (d) all training; (e) all TORs of contracts that estimate cost is greater than US$10,000, and (f) all amendments of contracts raising the initial contract value by more than 15 percent of original amount or above the prior review thresholds will be subject to IDA prior review mandatory in paragraphs 2 and 3 of Annex 1 of the Bank’s Consultants Selection Guidelines. For individual consultants, each contract estimated to cost more than US$100,000 will be subject to IDA prior review; in addition, the prior review of contract under this threshold will be determined on procurement plan on case-by-case basis.

CQS = Consultant’s Qualification Selection ; LCS = Least-Cost Selection; SSS = Single Source Selection

38

(c) Short lists composed entirely of national consultants: Short list of consultants for services, estimated to cost less than US$200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. However, if foreign firms have expressed interest, they should not be excluded from consideration.

(d) Post review: For each contracts for services not submitted to the prior review, the procurement documents would be submitted to IDA post review in accordance with the provisions of paragraph 5 of Annex 1 of the Bank’s Consultant Selection Guidelines. The post review will be based on a ratio of at least 1 to 5 contracts.

39

Annex 6: Implementation and Monitoring Arrangements


1. The PUASA Management Unit (PMU) will be in charge of the implementation of the project. The PMU was established in 2008 by a departmental order signed by the Minister of Agriculture, Livestock and Fisheries7 and has been responsible for the implementation of the Bank-funded emergency project (the EFSSP). The PMU is composed of: (i) a Coordinator responsible for the overall project management, (ii) an Agronomist responsible for the promotion of agriculture systems, (iii) a Rural Engineer, responsible for the development of small-scale irrigation infrastructures; (iv) An M&E Specialist, and (iv) an Accountant. The capacity of the PMU will be strengthened to manage the activities of this project with the recruitment of a Procurement Officer.

2. The PMU’s responsibilities will include: (i) planning, programming and budgeting the financed activities; (ii) preparation and management of the contractual partnership with the public and private delivery agencies, and with producers organizations; (iii) supervision, control of the field activities; (iv) administration of the technical functions (procurement, financial management, monitoring and evaluation, feed-back of the beneficiaries; and (v) preparation of quarterly reports and a project closure report.

3. The PMU will be responsible for the contract with the suppliers and other entities involved in the implementation of the components activities. Detailed modalities of the procurement, management, distribution, monitoring and control of the fertilizer and improved seed stocks, will be detailed in the PIM, which will be prepared by the PMU, in order to ensure that effective delivery mechanisms are in place. The fertilizer cost recovery mechanism used for the Bank-financed emergency project (EFSSP) will be used and the lessons learned incorporated in the PIM.

4. Key implementing partners are: (i) the Regional Centers for Agriculture Promotion (CERPA) of the MAED; (ii) the Community-level Centers of Agricultural Promotion (CECPA) of the MAED; (iii) the Directorate of Rural Engineering (DGR) of the MAED; (iv) producer organizations; and (v) the Grassroots Initiative Financing Agency (AGEFIB).

5. The PMU entered into a Memorandum of Understanding (MOU) with the CERPA and CECPA under the EFSSP for the following services: (i) identifying and selecting the beneficiaries; (ii) facilitating the contractual relationship between PMU and producer organizations, including fertilizer credit recovery activities; (iii) storing the fertilizers and the improved seeds, and managing their distribution; (iv) providing extension services; (v) strengthening the capacity of producers organizations; and (vi) sensitization of producers for fertilizer credit recovery. This MOU will be extended to carry out the field activities of the proposed grant.

6. The fertilizer cost recovery activities are carried out, on behalf of the PMU, by the community agricultural promotion agent (Responsable Communal de la Promotion Agricole -

7 Arrêté N°460/MAEP/D-CAB/SGM/DPP/DRH/SA du 07 novembre 2008, portant nomination des membres de l’Unité de Gestion du Programme d’Urgence d’Appui à la Sécurité Alimentaire et du Programme de Diversification Agricole par la Valorisation des Vallées (PDAVV)

40

RCPA) of the CECPA – the public-sector agent in closest proximity with the producers. In particular, the RCPAs are responsible for facilitating the contractual relationship between the PMU and the producer groups for the provision of subsidized fertilizer. Producer groups are required to reimburse the cost of the subsidized fertilizer, in cash or in kind, within three months of the harvest. The PUASA had an 85 percent recovery rate during the 2008 agricultural campaign using this method. For 2009, the cost recovery rate, only one month after harvest, is 26 percent. The recovered funds are deposited in an escrow account in a commercial bank. These funds constitute a revolving fund to be used for future input purchases and costs associated with piloting the market-based input delivery mechanism being developed. The procedures for the fertilizer distribution and cost recovery are detailed in the Fertilizer Distribution Manual approved by the Bank for the implementation of the EFSSP. An operational manual for piloting the market-based input distribution mechanism being developed under the EFSSP - including the role of the funds recovered from the subsidized sale of fertilizer - will be established in form and substance satisfactory to the Association and validated by August 31, 2010.

7. In terms of the small-scale irrigation infrastructure the PMU will partner with DGR of the MAED and AGEFIB, in addition to the CERPA and CECPA. The DGR – through a Memorandum of Understanding with the PMU – will supply the following services: (i) identification of the sites; (ii) design of the irrigation perimeter plans; (iii) technical description of the work to be done; and (iv) monitoring the quality of implementation.

8. The PMU has a strong experience in developing small-scale irrigation and post-harvest infrastructure through a community-based approach. All producers (men and women) sharing the ownership of the common land resources are beneficiaries of the irrigation perimeters to be developed and are organized in a group. The producer organizations are responsible for the procurement and contracting of the civil works (the tubed drillings and installation of motor pumps), managing the infrastructure constructed, and facilitating access to inputs for their members. With the support the PMU, they successfully undertook these tasks in 2008 and 2009 - with another funding source - and developed about 5,000 hectares of small-scale irrigation infrastructures.

9. The producer organizations will be responsible for the implementation of sub-projects consisting of the realization of tubed drillings and the installation of motor pumps and accessories in the irrigated perimeters. Each producer organization will have an account in a decentralized financial institution – the ‘Caisse Locale du Crédit Agricole (CLCAM)’. AGEFIB will: provide financial management training to the financed communities, assist with the community procurement and contracting, and insure the correct documentation of expenditures.

10. The PMU will strengthen the capacity of producer organizations to successfully undertake these tasks. They will be assisted by the CERPA and CECPA, with technical oversight provided by the DGR, the Department of Rural Engineering of the MAED. The PIM will specify the procedures to be used by the PMU to approve community sub-projects and to sign contracts with the producer organizations. It will also describe the procedures to be used by the communities to award contract, supervise and control the works. The PIM will be submitted to Bank approval, not later than 30 days after effectiveness.

41

11. The PIM will outline the approval and authorization procedures with clear segregation of duties. The key implementing partners such as CERPAs, their local units (CECPAs), and the DGR will be involved in the supervision of the irrigation infrastructure construction and will provide clearance before any payment to producer organizations. AGEFIB will be responsible for checking for the correct documentation of expenditures at the community level.

12. The PMU will be responsible for the procurement associated with (i) the construction of the artisanal wells in the hills region, (ii) the construction of storehouses and drying areas, and (iii) the acquisition and distribution of the motor pumps to the producer organizations.

13. The PMU will work in partnership with the Directorate of Agriculture to organize the collection and distribution of improved seeds. The Directorate of Agriculture will be responsible for: (i) identification of reliable seed producers; (ii) collection of the improved seeds from these producers; (iii) storage of the improved seeds, in collaboration with the CERPAs-CECPAs; and (v) distribution.

14. Extension of the MOU between the PMU and the CERPAs will include their roles in providing assistance to the producer organizations for managing the civil works associated with the small-scale irrigation installation.

15. M&E arrangements. With the support of the Bank financed EFSSP, the PMU developed an M&E System used to track the achievement of expected outputs and outcomes. The PMU will review the M&E System and update it to include indicators associated with the development of small-scale irrigation infrastructures. The team members will be trained in using these M&E tools.

42

Appendix 6.1

Action Plan for Implementation

Activities Actions Expected Results Responsible actor

Actors involved Implementation period

Component 1: Delivery of Agricultural Inputs

1Procurement and distribution of 3,275 tons of fertilizer

Procurement procedures (purchase and transportation) - Contract awarded PMU

National Procurement Commission February to August 2010.

Purchase and delivery of fertilizer by the selected firm

- Fertilizer stock delivered to PMU Selected Firm PMU September to October 2010

Distribution of fertilizer to producers

- Producers accessing fertilizer CECPAs PMU November to December 2010

Component 2: Promotion of small-scale irrigation infrastructures

2 Construction of 35 store rooms and 70 drying areas

Procurement procedures- Contracts awarded

PMU

National Procurement CommissionBiding firms

February to August 2010.

Construction of store rooms - Infrastructures store

rooms constructedSelected

enterprises PO,UPOSeptember 2010 to January

2011.

Construction of drying areas- Infrastructures drying

areas constructedSelected

enterprises PO,UPO November 2010 to April 2011.

Control of the works - Effective control done DGR, PMUSeptember 2010 to April 2011.

Reception of the constructed infrastructures

- Infrastructures built available to be used by communities

PMU, DGR

Selected enterprises February 2011 to May 2011.

3 Procurement of 200 artisanal wells Procurement procedures

Contracts awardedPMU

National Procurement CommissionBiding firms

February to August 2010.

Construction of the 200 artisanal wells,

Infrastructures well constructed

Selected enterprises PO,UPO October 2010 to April 2011,

Control of the works Effective control done DGR, PMU October 2010 to April 2011.

43

Reception of the constructed infrastructures

Infrastructures built available to be used by communities

PMU, DGR

Selected enterprises

May 2011.

3Identification of sites (3,000 ha) and Communities

- Identification of sites- Estimation of site areas- First contact with PO and UPO

- Sites identified - Site areas estimated- PO identified and informed on the modalities

CECPA, DGR, PMU Done in May 2009

4Mobilization of communities and subproject planning

- In-depth information of PO and UPO members and leaders on modalities-

- PO member and leaders well informed -

CECPA, DGR, AGEFIB, PMU January to February 2009

- Support to the design of the community subproject, including budget and schedule

- Subproject of the community designed- Budget and schedule adopted

CECPA, DGR, AGEFIB, PMU April 2010 to June 2010.

5 Contract with communities

- Negotiation and signature of the contract with the UPO

- Contracts signed with about 15 UPO

PMU, AGEFIB, CEPCA July 2010.

6 Implementation of works

- Recruitment of local enterprises by communities- Purchase of motor pumps (2,200) and accessories by the communities- Organization of community works

- Perimeters developed on time

UPO, PO, CECPA October 2010 to April 2011.

7

Technical and fiduciary support, monitoring and control of communities subprojects

- Technical supervision, monitoring and control- Fiduciary support and control- Disbursements

- Quality delivery of the works on the developed perimeters- Sound fiduciary management by communities

CECPA, DGR, AGEFIB PMU October 2010 to June 2011.

8Reception of realized perimeters and final payment

- Reception of the developed perimeters- Final disbursements

- Developed perimeters available to be used by producers

AGEFIB, CECPA, PMU DGR October 2010 to July 2011.

44

Annex 7: Project Preparation and Appraisal Team Members


Planned Actual

Decision Meeting 12/17/2009 12/17/2009

Negotiations 03/31/2010 04/14/2010Board/RVP approval 05/12/2010Planned date of effectiveness 05/24/2010Planned closing date 08/31/2011

Bank staff and consultants who worked on project preparation:

Name Title Unit

Jane C. Hopkins Sr. Agricultural Economist (Task Team Leader) AFTARAlain F. Onibon Agricultural Economist FAOKofi Nouve Agricultural Economist AFTARAlain Hinkati Financial Management Specialist AFTFMItchi Gnon Ayindo Sr. Procurement Specialist AFTPCAbdoul-Wahab Seyni Sr. Social Development Specialist AFTCSAfrica E. Olojoba Sr. Environmental Specialist AFTENAnthony Molle Sr. Counsel LEGAFWolfgang Chadab Sr. Finance Officer CTRFCSossena TassewMarie Claudine Fundi

Office ManagerLanguage Program Assistant

AFTARAFTAR

45

Annex 8: Statement of Loans and Credits


Original Amount in US$ Millions

Difference between expected and actual

disbursements

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

P113370 2010 eBenin Project 0.00 15.00 0.00 0.00 0.00 14.69 0.00 0.00

P110075 2009 BJ-Increased Access to Energy SIL 0.00 70.00 0.00 0.00 0.00 73.73 0.00 0.00

P104881 2008 Compet & Integrated Growth Opportunity 0.00 25.00 0.00 0.00 0.00 21.95 0.40 0.00

P096056 2007 BJ- Multi Sectoral HIV/AIDS SIL 2 (FY07)

0.00 35.00 0.00 0.00 0.00 18.74 1.61 0.00

P096482 2006 BJ-Malaria Cntrl Booster Prgm SIL (FY06) 0.00 31.00 0.00 0.00 0.00 10.13 8.24 0.00

P082725 2006 BJ-Decentral City Mgmt 2 (FY06) 0.00 75.00 0.00 0.00 0.00 22.30 -18.40 12.26

P081484 2005 BJ-Natl CDD SIL (FY05) 0.00 50.00 0.00 0.00 0.00 8.86 5.89 0.00

P079633 2005 BJ-Energy Srvc Delivery APL (FY05) 0.00 52.00 0.00 0.00 0.00 20.25 10.67 12.67

Total: 0 353 0 0 0 190.65

8.41 24.93

BeninSTATEMENT OF IFC’s

Held and Disbursed PortfolioIn Millions of US Dollars

Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

2000 FINADEV 0.00 0.34 0.00 0.00 0.00 0.34 0.00 0.00

Total portfolio: 0 0.34 0 0 0 0.34 0 0

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic.

Total pending commitment: 0 0 0 0

46

Annex 9: Country at a Glance


Benin at a glance 12/9/09

Sub-POVERTY and SOCIAL Saharan Low-

Benin Africa income2008P opulation, mid-year (millions) 8.7 818 973GNI per capita (Atlas method, US$) 700 1,082 524GNI (Atlas method, US$ billions) 6.0 885 510Average annual growth, 2002-08

P opulation (%) 3.3 2.5 2.1Labor force (%) 3.6 2.8 2.7Most recent estimate (latest year available, 2002-08)P overty (% of population below national poverty line) .. .. ..Urban population (% of total population) 40 36 29Life expectancy at birth (years) 61 52 59Infant mortality (per 1,000 live births) 76 89 78Child malnutrition (% of children under 5) 20 27 28Access to an improved water source (% of population) 65 58 67Literacy (% of population age 15+) 41 62 64Gross primary enrollment (% of school-age population) 117 98 98 Male 125 103 102 Female 108 93 95

KEY ECONOMIC RATIOS and LONG-TERM TRENDS1988 1998 2007 2008

GDP (US$ billions) 1.6 2.3 5.5 6.7Gross capital formation/GDP 15.6 17.0 21.4 20.7Exports of goods and services/GDP 13.8 17.1 16.2 15.2Gross domestic savings/GDP -2.6 6.6 6.1 7.1Gross national savings/GDP 0.9 11.3 .. ..Current account balance/GDP -7.7 -5.7 -9.9 -8.3Interest payments/GDP 0.9 1.1 0.2 0.6Total debt/GDP 68.7 70.7 15.5 14.8Total debt service/exports 5.1 12.1 9.3 ..P resent value of debt/GDP .. .. 10.3 8.1P resent value of debt/exports .. .. 77.6 ..

1988-98 1998-08 2007 2008 2008-12(average annual growth)GDP 4.1 4.2 4.6 5.1 4.0GDP per capita 0.7 0.8 1.3 1.8 0.3Exports of goods and services 3.4 1.9 .. .. ..

STRUCTURE of the ECONOMY1988 1998 2007 2008

(% of GDP )Agriculture 34.4 38.2 .. ..Industry 13.4 13.5 .. .. Manufacturing 8.1 8.6 .. ..Services 52.2 48.3 .. ..Household final consumption expenditure 89.5 84.0 .. ..General gov't final consumption expenditure 13.2 9.4 .. ..Imports of goods and services 32.1 27.5 31.6 28.9

1988-98 1998-08 2007 2008(average annual growth)Agriculture 5.4 4.8 .. ..Industry 4.9 4.9 .. .. Manufacturing 6.2 4.4 .. ..Services 2.9 3.8 .. ..Household final consumption expenditure 2.9 2.5 .. ..General gov't final consumption expenditure 2.7 10.1 .. ..Gross capital formation 8.9 7.8 7.3 ..Imports of goods and services 2.4 2.8 .. ..

Note: 2008 data are preliminary estimates.This table was produced from the Development Economics LDB database.* The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.

-10

0

10

20

30

03 04 05 06 07 08

GCF GDP

Growth of capital and GDP (%)

-2

0

2

4

6

03 04 05 06 07 08

Exports Imports

Growth of exports and imports (%)

Benin Low-income group

Development diamond*

Life expectancy

Access to improved water source

GNIpercapita

Grossprimary

enrollment

Benin Low-income group

Economic ratios*

Trade

Indebtedness

Domesticsavings

Capital formation

47

Benin

PRICES and GOVERNMENT FINANCE1988 1998 2007 2008

Domestic prices(% change)Consumer prices .. 5.8 1.3 8.0Implicit GDP deflator -0.6 4.7 2.6 7.1Government finance(% of GDP , includes current grants)Current revenue .. 15.9 .. ..Current budget balance .. 5.5 .. ..Overall surplus/deficit .. -0.4 .. ..

TRADE1988 1998 2007 2008

(US$ millions)Total exports (fob) 67 0 .. .. Ginned cotton 39 0 .. .. Crude oil 22 0 .. .. Manufactures .. .. .. ..Total imports (cif) 276 451 .. .. Food 191 138 .. .. Fuel and energy 36 64 .. .. Capital goods 168 253 .. ..Export price index (2000=100) .. 118 .. ..Import price index (2000=100) .. 93 .. ..Terms of trade (2000=100) .. 127 .. ..

BALANCE of PAYMENTS1988 1998 2007 2008

(US$ millions)Exports of goods and services 476 399 901 1,023Imports of goods and services 657 642 1,752 1,937Resource balance -181 -243 -851 -914Net income -25 -13 -9 -12Net current transfers 82 123 .. ..Current account balance -125 -133 -549 -551Financing items (net) 95 142 729 656Changes in net reserves 30 -9 -180 -104Memo:Reserves including gold (US$ millions) .. .. 492 ..Conversion rate (DEC, local/US$) 297.9 590.0 479.3 447.8

EXTERNAL DEBT and RESOURCE FLOWS1988 1998 2007 2008

(US$ millions)Total debt outstanding and disbursed 1,113 1,651 859 986 IBRD 0 0 0 0 IDA 209 543 176 255Total debt service 28 61 68 97 IBRD 0 0 0 0 IDA 2 8 1 2Composition of net resource flows Official grants 73 120 298 416 Official creditors 46 32 59 85 P rivate creditors 0 0 0 0 Foreign direct investment (net inflows) 0 38 255 120 P ortfolio equity (net inflows) 0 1 5 0World Bank program Commitments 21 21 99 72 Disbursements 22 20 43 84 P rincipal repayments 1 4 0 0 Net flows 22 16 43 84 Interest payments 2 4 1 2 Net transfers 20 12 41 82

Note: This table was produced from the Development Economics LDB database. 12/9/09

-12

-9

-6

-3

0

02 03 04 05 06 07 08

Current account balance to GDP (%)

0

200

400

600

800

02 03 04 05 06 07 08

Exports Imports

Export and import levels (US$ mill.)

0

2

4

6

8

10

03 04 05 06 07 08

GDP deflator CPI

Inflation (%)

B: 255

C: 22

D: 366

E: 305

G: 38

A - IBRDB - IDA C - IMF

D - Other multilateralE - BilateralF - PrivateG - Short-term

Composition of 2008 debt (US$ mill.)

48

Annex 10: Maps


49