Document of The World Bank FOR OFFICIAL USE ONLY Report No: 48904-SN PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE GLOBAL ENVIRONMENT FACILITY TRUST FUND IN THE AMOUNT OF US$4.8 MILLION TO THE REPUBLIC OF SENEGAL FOR A SUSTAINABLE LAND MANAGEMENT PROJECT July 16, 2009 Sustainable Development Department Agricultural and Rural Sector Unit Country Department AFCF1 Africa 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 May 08, 2009) Currency Unit = FCFA FCFA 493.00 = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AAP Africa Action Plan AELP Africa Emergency Locust Project AFD Agence Française de Développement (French Development Agency) ANCAR Agence Nationale de Conseil Agricole et Rural (National Agricultural and Rural Advisory Agency) APL Adaptable Program Loan ASPRODEB Association Sénégalaise pour la Promotion du Développement à la Base (Senegalese Association for Grassroots-level Development) CAADP Comprehensive Africa Agriculture Development Programme CAS Country Assistance Strategy CFAA Country Financial Accountability Assessment CEA Country Environmental Analysis CLCOP Cadre Local de Consultation des Organisations de Producteurs (Producer Organisations' Local Consultation Forum) CONGAD Conseil des Organisations Non Gouvernementales d'Appui au Développement (Council of NGOs for Development) CRCR Cadre Régional de Concertation des Ruraux (Regional Rural Consultation Fora) DA Direction de l'Agriculture (Directorate for Agriculture) DAPS Direction de l'Analyse, de la Prévision et de la Statistique (Directorate for Planning, Analysis and Statistics, Ministry of Agriculture) DAT Direction de l'Aménagement du Territoire (Directorate for Territorial Management) DCEF Direction de la Coopération Economique et Financière (Directorate for Economic and Financial Cooperation) DDI Département de la Dette et de l'Investissement (Directorate for Debt and Investment) DEEC Direction de l'Environnement et Des Etablissements Classés (Directorate for the Environment and Registered Lands) DSRP Document de Stratégie pour la Croissance et la Réduction de la Pauvreté (Poverty Reduction Strategy Paper) EC European Commission ESMF Environmental and Social Management Framework FOR OFFICIAL USE ONLY FAO Food and Agriculture Organization FCFA Franc de la Communauté Financière Africaine (Franc of the African Financial Community) FM Financial Management FNRAA Fonds National de Recherches Agricoles et Agro-Alimentaires (National Agricultural and Agro-processing Research Fund) FY Fiscal Year GDP Gross Domestic Product GDT Gestion Durable des Terres (Sustainable Land Management) GEF Global Environment Facility GEO Global Environmental Objective GPP Global Partnership Program GPS Global Positioning System Ha Hectare HIPC Heavily Indebted Poor Country IBRD International Bank for Reconstruction and Development IDA International Development Association IFAD International Fund for Agricultural Development IFR Interim Financial Report IMF International Monetary Fund INP Institut National de Pédologie (National Institute of Pedology/National Institute of Pedology) IRD Institut de Recherche pour le Développement (Research and Development Institute) IRR Internal Rate of Return ISA International Standards on Auditing ISRA Institut Sénégalais de Recherches Agricoles (Senegalese Institute for Agricultural Research) ITA Institut de Technologie Alimentaire (Food Technology Institute) JICA Japanese International Cooperation Agency Kg Kilogram LADA Land Degradation Assessment in Dryland Areas LD Land Degradation LERG Laboratoire d'Etudes et de Recherches Geophysiques (Laboratory for Studies and Geographic Researches) LOASP Loi d'Orientation Agro-Sylvo Pastorale (Agro-Sylvo Pastoral Orientation Law) M&E Monitoring and Evaluation MA Ministry of Agriculture MDTF Multi-Donor Trust Fund MEPN Ministère de l'Environnement et de la Protection de la Nature (Ministry of the Environment and of the Natural Resources Protection) MTEF Medium-Term Expenditure Framework NAP National Action Program to Combat Desertification NAPA National Adaptation Program of Action NARS National Agricultural Research System NEPAD New Partnership for Africa's Development This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. NGO Non-Governmental Organization NPV Net Present Value OP/BP Operational Policy/Bank Procedure PACD Projet de Promotion d'une Agriculture Compétitive et Durable (Promotion of Competitive and Sustainable Agriculture) PANAC Plan d'Action National pour l'Adaptation aux Changements Climatiques (National Action Plan for Adaptation to Climate Changes) PDMAS Projet de Développement des Marchés Agricoles et Agroalimentaires au Sénégal (Agricultural Markets and Agribusiness Development Project) PDO Project Development Objective PEFA Public Expenditure and Financial Assessment PFDS Projet du Fonds de Développement Social (Social Development Fund Project) PFM Public Financial Management PGIES Programme de Gestion Intégrée des Eaux et des Sols (Program for Integrated Soil and Water Management) PIM Project Implementation Manual PLDP Participatory Local Development Program PMP Pest Management Plan PNIR Programme National d'Infrastructures rurales (National Rural Infrastructure Project) PO Producer Organization PROGERT Projet de Gestion et Restauration des Terres dégradées du Bassin Arachidier (Groundnut Basin Soil Management and Regeneration Project) PRSP Poverty Reduction Strategy Paper PSAOP Projet de Services Agricoles et Organisations des Producteurs (Agricultural Services and Producer Organizations Project) R&D Research and Development RPF Resettlement Policy Framework SBD Standard Bidding Document SIP Strategic Investment Program for SLM in Sub-Saharan Africa SIP IR Strategic Investment Program Intermediate Results SITAR Système d'Information Technologique Agricole et Rurale (Agricultural and Rural Technological Information System) SLM Sustainable Land Management SN-CEA Senegal Country Environmental Analysis SNRASP Système National de Recherche Agro-Sylvo-Pastorale (National Agricultural Research System) SODEVA Société de Développement et de Vulgarisation Agricole (Agricultural Extension and Development Company) TIPA Innovation Technico-agricole pour la Lutte contre la Pauvreté (Techno-agricultural Innovation for Poverty Alleviation) TFCU Technical and Fiduciary Coordination Unit (Unité de Coordination Technique et Fiduciaire) TFESSD Trust Fund for Environmentally and Socially Sustainable Development UCTF Unité de Coordination Technique et Fiduciaire (Technical and Fiduciary Coordination Unit) UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC United Nations Framework Convention on Climate Change USD United States Dollar USAID United States Agency for International Development WAAPP West Africa Agriculture Productivity Programme WB World Bank Vice President: Obiageli Katryn Ezekwesli Country Director: Habib Fetini Country Manager: McDonald Benjamin Sector Director: Inger Andersen Sector Manager: Karen Mcconnell Brooks Task Team Leader: Maniével Sène SENEGAL Sustainable Land Management Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ........................................................... 1 A. Country and sector issues.............................................................................................. 1 B. Rationale for Bank involvement................................................................................... 2 C. Higher level objectives to which the project contributes.............................................. 4 II. PROJECT DESCRIPTION........................................................................................... 5 A. Financing instrument .................................................................................................... 5 B. [If Applicable] Program objective and Phases.............................................................. 5 C. Project development objective and key indicators........................................................ 5 D. Project description and components ............................................................................. 6 E. Lessons learned and reflected in the project design...................................................... 9 F. Alternatives considered and reasons for rejection ...................................................... 11 III. IMPLEMENTATION .............................................................................................. 11 A. Partnership arrangements............................................................................................ 11 B. Institutional and implementation arrangements.......................................................... 12 C. Monitoring and evaluation of outcomes/results.......................................................... 13 D. Sustainability and replicability ................................................................................... 14 E. Critical risks and possible controversial aspects......................................................... 15 F. Loan/credit/grant conditions and covenants ............................................................... 17 IV. APPRAISAL SUMMARY ....................................................................................... 19 A. Economic and financial analyses................................................................................ 19 B. Technical..................................................................................................................... 20 C. Fiduciary ..................................................................................................................... 21 D. Social........................................................................................................................... 21 E. Environment................................................................................................................ 22 F. Safeguard policies....................................................................................................... 22 G. Policy Exceptions and Readiness................................................................................ 23 Annex 1: Country and sector or program background .................................................... 25 A. Land resources and land degradation in Senegal: An overview................................. 25 Annex 2: Major related projects financed by the Bank and/or other agencies .............. 28 A. Bank-funded projects.................................................................................................. 28 B. Projects funded by other Development Partners......................................................... 29 Annex 3: Results framework and monitoring.................................................................... 32 A. Results Framework ..................................................................................................... 32 B. Arrangements for results monitoring.......................................................................... 33 C. Table of Arrangements for results monitoring............................................................ 35 Annex 4: Detailed project description................................................................................. 39 A. Project description ...................................................................................................... 39 B. Project components..................................................................................................... 42 Annex 5: Project costs .......................................................................................................... 51 Annex 6: Implementation arrangements............................................................................ 52 A. Partnership arrangements............................................................................................ 52 B. Institutional and implementation arrangements.......................................................... 52 Annex 7: Financial management and disbursement arrangements................................. 54 A. Summary of implementation and financial management arrangements..................... 54 B. Country Accountability Issues.................................................................................... 54 C. Assessment of risks..................................................................................................... 55 D. Strengths and Weaknesses.......................................................................................... 57 E. Financial and management arrangements................................................................... 58 F. Disbursement and flow of funds arrangements .......................................................... 60 G. Loan condition and other financial covenants ............................................................ 62 H. Supervision Plan ......................................................................................................... 62 Annex 8: Procurement arrangements................................................................................. 63 A. General........................................................................................................................ 63 B. Applicable guidelines.................................................................................................. 63 C. Assessment of the agency's capacity to implement procurement .............................. 64 D. Procurement Plan........................................................................................................ 65 E. Frequency of Procurement Supervision...................................................................... 65 F. Details of the Procurement Arrangements Involving International Competition....... 65 Annex 9: Economic and financial analysis ......................................................................... 67 A. Economic analysis and financial analysis: Assumptions and methodology............... 67 B. Results......................................................................................................................... 68 Annex 10: Safeguard policy issues....................................................................................... 76 Annex 11: Project preparation and supervision ................................................................ 77 Annex 12: Documents in the project file............................................................................. 78 Annex 13: Statement of loans and credits........................................................................... 80 Annex 14: Country at a glance ............................................................................................ 81 Annex 15: Incremental cost analysis................................................................................... 83 A. Business as usual scenario .......................................................................................... 83 B. Strategic fit.................................................................................................................. 84 C. Incremental reasoning................................................................................................. 85 D. Cofinancing................................................................................................................. 86 Annex 16: Maps..................................................................................................................... 87 REPUBLIC OF SENEGAL SUSTAINABLE LAND MANAGEMENT PROJECT PROJECT APPRAISAL DOCUMENT AFRICA AFTAR Date: July 16, 2009 Team Leader: Maniével Sène Country Director: Habib Fetini Sectors: General agriculture, fishing and Sector Director: Inger Andersen forestry sector (70%); Agricultural extension Sector Manager: Karen Mcconnell Brooks and research (30%) Project ID: P108144 Themes: Land administration and Focal Area: Land degradation management (67%); Other rural development Environmental Assessment: Partial (33%) Assessment Lending Instrument: Specific Investment Loan Project Financing Data [ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$ m.): 0.00 Proposed terms: Financing Plan (US$m) Source Local Foreign Total BORROWER/RECIPIENT 0.00 0.00 0.00 Global Environment Facility (GEF) 3.00 1.80 4.80 Total: 3.00 1.80 4.80 Borrower: Republic of Senegal Dakar Senegal Responsible Agency: ANCAR Batiment ex Projet Semencier Face ITA Dakar Senegal Tel: 221-33-859-14-14 Fax: 221-832-55-79 ancar@sentoo.sn ASPRODEB 8, boulevard de l'est - Point E, BP 3801 Dakar Senegal Tel: 221-33-824-3851 asprodeb@asprodeb.org ISRA Route des Hydrocarbures Bel-Air, BP 3120 Dakar Senegal Tel: 221-33-859-17-32 Fax: 221-33-832-24-27 dgisra@isra.sn INP Hann Mariste Dakar BP 10709 Senegal Tel: 221-33-832-65-65 Fax: 221-33-85-17 insnatpedo@sentoo.sn Ministry of Agriculture Building Administratif Senegal Tel: 221-33-823-39-74 Estimated disbursements (Bank FY/US$m) FY 10 11 12 Annual 2.00 1.80 1.00 Cumulative 2.00 3.80 4.80 Project implementation period: Start: August 06, 2009 End: June 30, 2012 Expected effectiveness date: September 16, 2009 Expected closing date: June 30, 2012 Does the project depart from the CAS in content or other significant respects? Ref. PAD I.C. [ ]Yes [X] No Does the project require any exceptions from Bank policies? Ref. PAD IV.G. [ ]Yes [X] No Have these been approved by Bank management? [ ]Yes [X] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated "substantial" or "high"? Ref. PAD III.E. [X]Yes [ ] No Does the project meet the Regional criteria for readiness for implementation? Ref. PAD IV.G. [X]Yes [ ] No Project development objective Ref. PAD II.C., Technical Annex 3 The objective of the Project is to contribute to the reduction of land degradation and the improvement of ecosystem functions and services in the Target Areas by adopting sustainable land management practices through the provision of support to the Recipient's research and agricultural and rural consultation system and to producer organizations. Global Environment objective Ref. PAD II.C., Technical Annex 3 The objective of the Project is to contribute to the reduction of land degradation and the improvement of ecosystem functions and services in the Target Areas by adopting sustainable land management practices through the provision of support to the Recipient's research and agricultural and rural consultation system and to producer organizations. Project description [one-sentence summary of each component] Ref. PAD II.D., Technical Annex 4 A. Support to the Agricultural Research System. This component will strengthen the capacity of ISRA to specifically generate and disseminate SLM-targeted research and knowledge. B. Strengthening Agricultural Advisory Services. This component will (i) strengthen the capacity of the agricultural extension system to specifically deliver SLM packages and provide adequate technical backstopping on SLM to farmers; and (ii) support the actual delivery of SLM packages to producers through the agricultural extension system. C. Support to Producer Organizations. The component will (i) improve the awareness of producer' organizations on SLM and strengthen the capacity of their members to integrate SLM in their production systems; (ii) strengthen the capacity of POs' leaders to integrate SLM in the formulation of sectoral policies and local development plans; and (iii) facilitate the adoption and replication of SLM on-the-ground. D. Support to Sectoral Coordination. The component will strengthen the enabling conditions to allow the Government to move towards a more cross-sectoral and programmatic approach to SLM, and to support incremental costs of project management. Which safeguard policies are triggered, if any? Ref. PAD IV.F., Technical Annex 10 OP/BP 4.01 Environmental Assessment OP 4.09 Pest Management OP/BP 4.12Involuntary Resettlement Significant, non-standard conditions, if any, for: Ref. PAD III.F. Board presentation: None Grant effectiveness conditions: · the execution and delivery of this Agreement (the Grant Agreement) on behalf of the Recipient (the Republic of Senegal) have been duly authorized or ratified by all necessary governmental action; · the Recipient has revised the Financial and Accounting Procedures Manual and the Project Implementation Manual for the purposes of the Project, in a manner satisfactory to the World Bank; · the Recipient has revised the PSAOP II Arrêté to expand the role of the TFCU and the Steering Committee for the purposes of the Project; · the TOMPRO software has been updated for the purposes of the Project; · the Recipient shall have entered into the Subsidiary Agreement with ASPRODEB and into agreements, in form and substance acceptable to the World Bank, with ISRA, ANCAR, and INP for the implementation of the Project. Covenants applicable to project implementation: · The Recipient shall prepare and submit to the World Bank annual work plans, in form and substance satisfactory to the World Bank, no later than November 30 of each year. · The Recipient shall maintain or cause to be maintained a financial management system including records, accounts and preparation of related financial statements in accordance with accounting standards acceptable to the Bank. · The Recipient shall 'recruit the external auditor on terms and conditions acceptable to the Association not later than six (6) months after the Project's effectiveness date. · The Financial Statements will be audited in accordance with acceptable international auditing standards. The Audited Financial Statements for each period shall be furnished to the Association not later than three (6) months after the end of the Project fiscal year. · The Recipient shall ensure that interim unaudited financial reports (IFR) for the Project are prepared and furnished to the World Bank not later than 45 days after the end of each calendar quarter, covering the quarter in form and substance satisfactory to the World Bank. The first IFR shall be furnished to the World Bank not later than 30 days after the end of the first calendar quarter after the Effective Date, and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter. I. STRATEGIC CONTEXT AND RATIONALE A. Country and sector issues 1. The importance of land resources in Senegal. Land is a key resource in Senegal. Seventy percent of the rural population - representing about one-half of the total population - directly depends on land resources for its livelihood. Despite the fact that agriculture's contribution to GDP has declined in recent decades, the sector still employs about 60 percent of the population (Senegal Country Environmental Analysis: SN-CEA, FY08). According to the Government's Poverty Reduction Strategy Paper (DRSP-II), agriculture represents a major engine of growth for the economy, and is particularly well placed to stimulate growth that is widely shared and effective in reducing poverty. 2. Land degradation is widespread and has clear causes. According to the Senegal CEA almost two-thirds of the country's arable land - about 2.5 million hectares - is degraded. The main causes of land degradation include (i) overgrazing and unsustainable agricultural practices that contributed to deforestation; (ii) population growth that led to an extension of cultivated lands and to increased pressure on forest resources; and (iii) drought.1 3. The negative consequences of land degradation are severe. The consequences are social and environmental as well as economic. At least four effects have been identified: (a) On the country's potential for growth. Soil fertility depletion (one of the forms of land degradation) represents one of the main causes of stagnation of agricultural productivity and, consequently, one of the major constraints to agricultural and economic growth. Rough estimates suggest that the annual economic cost of land degradation in Senegal may be in the order of 1 percent of GDP (ref. SN-CEA). (b) On poverty and vulnerability of rural people. The linkage between poverty and land degradation is highlighted in the Senegal CEA. Because most of the rural population depends heavily on land for its livelihood, increasing degradation of this key asset reduces livelihood options and opportunities to generate income. Poverty and vulnerability are thereby exacerbated. (c) On society. Declining soil productivity of agricultural lands and population growth contribute to the abandonment of previously productive lands and increased migration to urban centers, particularly Dakar. The social costs, including unemployment, are potentially high. (d) On ecosystem functions and services. Senegal's territorial ecosystems and their products are an important part of Senegal's natural wealth and essential to the country's food security. Land degradation is considered one of the key factors contributing to imbalances in ecosystems, including waterways, and it threatens the viability of wildlife habitats. 4. Sustainable land management (SLM) as a means to address land degradation: opportunities and constraints. According to the Senegal CEA, sustainable land management could address land degradation in a way that enhances rural land productivity on a long-term basis. However, despite some isolated technical successes the adoption and replication of SLM 1 A more detailed description of the major forms and causes of land degradation is given in Annex 1 and Annex 4 Table 4.1. 1 has remained relatively limited.2 Some of the key factors that preventing the adoption and/or replication of SLM include: (a) a weak enabling environment (characterized by inconsistent government policies and regulations, weak institutional capacity to support SLM adoption, and an unfavorable land tenure and incentive system); and (b) a single-sector/project-specific approach to the problem. 5. Recipient's key policies and strategies. Land degradation has been repeatedly identified by the Senegalese Government as a significant constraint to both national and local development. Addressing land degradation and promoting sustainable use of natural resources have been prominent objectives in virtually all national policies and strategies since the National Action Plan for the Environment in 1993. The Senegalese Government ratified the United Nation Convention to Combat Desertification (UNCCD) in 1995, and submitted its National Action Program to Combat Desertification (NAP) in 2000. The NAP identifies the main actions needed to prevent desertification and reduce its effects. The Agro-Sylvo-Pastoral Orientation Law (LOASP, 2004) includes promotion of better land exploitation and improvement of soil fertility as key strategic objectives of the national rural development policy. The Accelerated Growth Strategy (2006) identifies `sustainable agriculture' as a key driver of Senegal's economic growth. The Plan d'Action National pour l'Adaptation aux Changements Climatiques (PANAC, 2006) identifies sustainable land management as an effective adaptation activity. More recently, the Poverty Reduction Strategy (DSRP-II, 2007) identifies reduction in land degradation and promotion of sustainable agriculture and forestry as priority objectives in the fight against poverty. Finally, the Government of Senegal has increasingly recognized that to effectively address land degradation, SLM approaches need to be scaled up within existing institutions. This is best done through cross-sectoral programs, as opposed to projects. B. Rationale for Bank involvement 6. The rationale for the Bank's involvement is based on the following elements: (a) Long-term involvement in the sectoral dialogue: The Bank has led the policy dialogue in agriculture since the sectoral adjustment programs of the 1990s. Recently, the first and second phase of the Agricultural Services and Producer Organizations Project (PSAOP and PSAOP2) have been instrumental in defining strategies and implementing reforms in the agricultural sector. Examples of the latter include implementation of the Agricultural Sector Law, and implementation of the Policy Letter of Development of the Groundnut Sector. The recently completed Senegal CEA provides an additional instrument to further policy dialogue on issues of natural resource management. (b) Opportunity to complement the Bank's rural portfolio: The Bank has a well integrated rural portfolio in Senegal, which includes, in addition to PSAOP2, the following operations: the Agricultural Markets and Agribusiness Development Project (PDMAS), the Participatory Local Development Program (PLDP), the Africa Emergency Locusts Project (AELP), and the West Africa Agricultural Productivity Program (WAAPP). PSAOP2 and PDMAS recognize the importance of sustainable land management for intensification of production, 2Examples of successes include (1) the SLM system supported by the Rodale Institute and the Agricultural Extension and Development Company (Société de Développement et de Vulgarisation Agricole: SODEVA); and (2) interventions to stabilize sand dunes in the Niayes. 2 but neither focuses on adoption of SLM. Thus, the proposed operation would strategically complement the Bank's rural portfolio in Senegal, amplifying the impact of Bank- supported rural investments. Mainstreaming SLM through a more programmatic approach ensures a longer-term focus on land degradation and sustainable land management within existing institutions. (c) Linkages with previous and ongoing AAA: The recently completed Senegal CEA, which was supported by the World Bank, the Royal Netherlands Embassy and TerrAfrica, provides an in-depth analysis of the most important environment and natural resource management issues in Senegal, and a set of recommendations to address these. The proposed operation is one of the instruments through which the recommendations of the SENEGAL CEA would be implemented. In particular, the proposed operation would support the development of a national framework for SLM investments, favor the establishment of platforms for SLM, and support the strengthening of a relevant knowledge management system. In addition, the ongoing AFR study on regional implications of climate change, and a global study on territorial development and adaptation to climate change, will provide detailed information on the capacity of local institutions, including those targeted by the proposed operation, to adapt. (d) Mobilization of technical and financial resources for SLM: The Bank's convening power will be critical in leveraging support from development partners (DPs) and other stakeholders. The proposed operation is expected to influence investment choices by other DPs working in the country, such as the EC, JICA, USAID, and it will stimulate an increase in SLM expenditures by the Government. As the organization hosting the TerrAfrica Secretariat, the Bank is in a unique position to garner support among TerrAfrica partners in Senegal (NEPAD, UNDP, UNEP, FAO, IFAD, the Global Mechanism of the UNCCD, etc.). (e) Regional and global experience in developing and implementing SLM programmatic responses and investments: The Bank is well placed to draw upon its own regional and global experience in supporting programs to scale-up SLM. Some examples include recent Bank operations in Ethiopia, Mali, and Ghana, as well as activities in Nigeria (the SLM Investment Framework), and Ethiopia (the SLM Program). In addition, in its capacity as a partner of TerrAfrica, the Bank is well placed to draw from the experience, best practices, lessons, and knowledge generated by others TerrAfrica. (f) Implementation of the TerrAfrica GPP: TerrAfrica is a Bank Global Partnership Program (GPP). The proposed operation would contribute to implementation of the Business Plan of TerrAfrica, particularly Activity Line 3 (Country Investments) by enabling SLM scale-up. 7. Consistency with GEF Strategies and the GEF Investment Program (GEF-SIP). This operation is part of the regional GEF Strategic Investment Program for SLM in Sub-Saharan Africa (SIP). It would contribute to SIP objectives by: (a) Supporting Senegal's adoption of a more programmatic approach to SLM by addressing some of the weaknesses in the enabling environment that hinder SLM adoption and replication; and (b) Supporting Senegal in applying sustainable practices that increase land productivity while securing ecosystem services in selected priority areas. The project would, in addition, contribute to attainment of SIP IRs 1 3 (SLM applications on the ground are scaled up in country-defined priority agro-ecological zones; 2 (Effective and inclusive dialogue and advocacy on SLM strategic priorities, enabling conditions, and delivery mechanisms established and ongoing); 3 (Commercial and advisory services for SLM are strengthened and readily available to land users); and 4 (Targeted knowledge generated and disseminated and monitoring established and strengthened at all levels) (ref. to Section D - Project Components). As part of the GEF-SIP, this operation will directly contribute to the implementation of the GEF Land Degradation Focal Area Goal aimed at arresting and reversing current trends in land degradation, and Strategic Objective 1: creating an enabling environment for SLM, as well as Strategic Objective 2: generating benefits for the global environment through the upscaling of SLM investments. Finally, this operation would further the objective of the Land Degradation-Strategic Program 1: support to sustainable agriculture and rangeland management. C. Higher level objectives to which the project contributes 8. Contribution to Recipient's high-level objectives. The Senegal Poverty Reduction Strategy (DSRP-II) gives high priority to combating land degradation and promoting sustainable agriculture. The national rural development policy emphasizes the importance of better land exploitation and improvement of soil fertility. The Accelerated Growth Strategy views sustainable agriculture is an important driver of the country's economic growth. Finally, land management is an effective climate adaptation activity highlighted in the Plan d'Action National pour l'Adaptation aux Changements Climatiques (PANAC, 2006). The proposed operation will contribute to higher level objectives in these four policy documents through its efforts to reduce and ameliorate land degradation. This, in turn, is expected to improve rural livelihoods and generate household income. The synergistic effect of the Project on other rural investments in Senegal provides another, more indirect contribution to high-level objectives. 9. Contribution to CAS objectives. The Bank's Country Assistance Strategy (CAS, 2007) recognizes the importance of enhancing land productivity on a sustainable basis to help to unlock rural growth potential. The CAS includes time-bound, quantified targets for SLM scale- up. One of the targets of outcome 7 of the CAS is 100,000 ha of land sustainably managed in priority areas, including sylvo-pastoral zones in the Groundnut Basin. A related target for the intermediate outcome is 20,000 ha of land with pilot sustainable management system in place in these priority areas. The proposed operation would directly contribute to achievement of these targets by promoting the implementation of SLM practices in the Groundnut Basin. By the end of the Project it is expected that 20,000 ha will be under sustainable land management. 10. Contribution to CAADP and EAP, UNCCD-NAP, the new UNCCD 10 years Strategic Plan, and UNFCCC-NAPA objectives. Extending the area under sustainable land management is the key objective of pillar 1 of NEPAD's Comprehensive African Agriculture Development Program (CAADP) and one of the key objectives of program area 1 (degradation) of the Environmental Action Plan (EAP). The proposed operation would directly contribute to these objectives. In addition, this Project is one of the instruments through which the UNCCD-NAP, the new UNCCD 10 years Strategic Plan, and the UNFCCC-NAPA will be implemented. 4 II. PROJECT DESCRIPTION A. Financing instrument 11. Financing instrument. The proposed operation would be implemented with support from the GEF with a US$4.8 million grant extending over three years. The operation will be integrated (partially blended) with the IDA/IFAD Agricultural Services and Producer Organizations Project 2 (PSAOP2). The two projects will have the same structure, institutional arrangements and implementation mechanisms. PSAOP2 has put in place effective mechanisms for engaging the Government on broader policy issues and institutional reforms in the agricultural sector. It is therefore believed that this GEF-funded project would have more leverage in influencing the policy dialogue and mainstreaming SLM into the agricultural sector if integrated into the PSAOP2. B. [If Applicable] Program objective and Phases 12. N/A C. Project development objective and key indicators 13. The objective of the Project is to contribute to the reduction of land degradation and the improvement of ecosystem functions and services in the Target Areas by adopting sustainable land management practices through the provision of support to the Recipient's research and agricultural and rural consultation system and to producer organizations. 14. Geographical scope and location. Project activities will focus on the Groundnut Basin (GB), and more precisely will target the departments and rural communities listed in the table below. It may in addition include other rural communities approved by the Bank. A map of the project areas is presented in Annex 4. About 20,000 ha are expected to be converted to SLM. Zone/Department Rural Community Zone/Department Rural Community Northern Groundnut Basin (Louga, Notto Djobass Fimela Kébémer, Tivaouane Departments) Mewane Southern Groundnut Niakhar Central Groundnut Basin (Thiés, Dealy Basin (Kaolack, Sud Nganda Diourbel, Goassas, Nord Fatick) Fatick, Kaffrine) Touba Mosquee Latmingue 15. Key indicators. Proposed outcome indicators include: (a) Increase percentage of land with SLM practices in the Target Areas. Percentage of land with SLM practices is defined as land with SLM practices over total land. SLM practices include `technologies' as well as `approaches' applied to raise land quality. Technologies refer to agronomic, vegetative, structural, and management measures that reduce the effects of land degradation. Approaches are measures to introduce, apply and implement SLM technologies (Ref. table 3.1 in Annex 3). (Baseline: 0 percent; target value: 20 percent). (b) Increase percentage of organic matter in the soil in the Target Areas. Organic matter is used as an indicator of soil fertility, which is considered as a proxy for land quality, 5 agricultural productivity and ecosystem health3 (Baseline: 0.20 percent; target value: 0.23 percent). D. Project description and components 16. Project description. The proposed operation would contribute to above described objectives by: (a) Strengthening elements of the enabling environment for SLM scale-up at national and local levels. For example, it would strengthen cross-sectoral coordination mechanisms and institutional capacity for SLM. It would also improve the capacity of the main agricultural research institutions to generate and disseminate SLM research and knowledge about improved practices; (b) Supporting the adoption of SLM technologies and practices in selected priority areas, such as the seed producing areas of the Groundnut Basin. It would do this by strengthening the capacity of producer organizations to adopt SLM measures; setting-up financial mechanisms to facilitate the adoption of SLM; and supporting agricultural service providers in delivering SLM advice and technical backstopping. Special attention would be given to consideration of risks associated with climate change and design of adaptation measures. A World Bank study on territorial development and adaptation to climate change will provide some information on the capacity of local institutions to adapt to climate change, including those targeted by the proposed operation; and (c) Strengthening synergies between the ministries engaged on SLM, particularly the ministry in charge of agriculture, livestock and environment sectors. 17. Rationale for selection of Project location. The decision to focus on seed producing areas of the Groundnut Basin is based on the following considerations: (a) Severity of degradation. The Groundnut Basin is one of the areas in Senegal where land degradation is more severe4, mainly because of inappropriate cropping practices. (b) Population density and potential for agricultural production. The Groundnut Basin the area with the highest population density and where most of the country's agricultural production (approximately two-thirds of total production) is generated. Where quality production is practiced, integrated agricultural practices that include SLM could be certified. This could be incorporated as a quality parameter in the labeling of products derived from sustainable agriculture. (c) Importance of ecosystem functions and services for agricultural productivity. Senegal's territorial ecosystems and their products provide significant services to rural production landscapes. Land degradation in its various forms has negative consequences for both ecosystem functions (e.g. system soil structure, water quality retention, and mineral 3In agriculture lands, soil quality is a key factor in the provision of ecosystem functions and services, including, (i) system soil structure, (ii) water quality and retention, (iii) mineral nutrition, and (iv) development of root structures. 4About 1.15 million ha are degraded in the groundnut basin alone, about one-third of all arable land in the country. Detailed studies in Kaffrine in the southern groundnut basin show that, between 1989 and 1999, land on 64 percent of the study area was degraded, while only 1 percent improved (LADA 2005). 6 nutrition) and agricultural productivity. In the Groundnut Basin, soil fertility depletion represents one of the main causes of stagnation of agricultural productivity and consequently, one of the major constraints to sustainability of livelihoods. (d) Synergies with PSAOP2, PDMAS and WAAPP. The Basin is an area where the World Bank is already operating through the WB/IDA Agricultural Services and Producer Organizations Project 2 (PSAOP2). Synergies between the three projects are therefore expected. 18. Project components. As an operation integrated with the PSAOP2, the activities proposed are organized along the four components of PSAOP2. Each component would be incremental to and/or complement the respective PSAOP2 component. (a) Component A - Support to the Agricultural Research System5 (US$0.6 million): In PSAOP2, this component seeks to increase the capacity of the National Agricultural Research System (NARS). The Project would be used to strengthen the capacity of the Senegal Agricultural Research Institute (Institut Sénégalais des Recherches Agricoles, ISRA) to generate and disseminate SLM-targeted research and knowledge. More specifically, this component would: A.1 Support the implementation of demand-driven SLM research and development (R&D) activities (US$0.27 million). Activities in this sub-component will mainly focus on providing technical and financial support to the development of R&D activities6. A.2 Finance baseline studies (US$0.10 million). Activities in this sub-component include collection of baseline information on the bio-physical and socio-economic characteristics of project sites. Information collected would be used for M&E and the SLM Knowledge Base (ref. Component D1). A.3 Strengthen the capacity of the Senegalese Institute for Agricultural Research (ISRA) to generate, disseminate, and monitor SLM-targeted research and knowledge (US$0.23 million). (b) Component B - Strengthening Agricultural Advisory Services7 (US$0.7 million): In PSAOP2, this component is aimed at supporting the extension of the agricultural advisory system and consolidation of a pluralistic network of service providers. The GEF-supported Project would complement these interventions by: B.1 Strengthening the capacity of the agricultural extension system in SLM (US$0.27 million). This sub-component would strengthen the capacity of ANCAR, farmer intermediaries, and service providers to deliver SLM packages and provide adequate technical backstopping on SLM. The main activities of this sub- component include the development and delivery of a training program for service providers on SLM technologies and practices, the integration of SLM approaches in existing farmer production systems, and land use planning. 5This component is in line with SIP IR 4. 6R&D activities are demand-driven, short-term research activities aimed at quickly responding to the needs expressed by beneficiaries within a specific local or regional context. 7This component delivers on SIP IR 3. 7 B.2 Delivering SLM packages (US$0.43 million). This sub-component aims at developing and delivering demand-driven, customer-tailored SLM advice through the agricultural extension system. Examples of SLM technologies are presented in Annex 3 (Tables 3.1) and Annex 4 (Table 4.3) and comprise land use regimes, as well as agronomic, vegetative and structural measures. The main activities of this sub-component include: (i) The creation of a database on SLM technologies and practices, and conditions for their applicability; (ii) farmer sensitization and awareness creation activities; (iii) activities aiming at disseminating SLM technologies and sharing lessons/best practices, including set-up of demonstration sites, organization of field trips, farmer-to-farmer exchange events, SLM fairs, and specific training events; and (iv) provision of technical support and backstopping on SLM. (c) Component C - Support to Producer Organizations8 (US$2.8 million): In PSAOP2, this component is aimed at strengthening the capacity of producer organizations (POs) to access technical and economic services, and to participate in policy formulation. The GEF-supported Project would provide additional resources to: C.1 Strengthen the capacity of POs to integrate SLM in their production systems (US$ 0.4 million). The main activities of this sub-component include: (i) SLM training and other capacity building activities (e.g. workshops, animation activities, study tours, etc.) to Producer Organizations' Local Consultation Forums (CLCOP), and cooperatives; (ii) advocacy and other communication and awareness raising activities targeting the rural population about SLM, with information on how to access relevant resources and services; and (iii) training and other capacity building activities to the staff of ASPRODEB to enable them to provide adequate support to POs. C.2 Strengthen the capacity of POs' leaders and of local political leaders to take account of SLM in the formulation of sectoral policies (US$0.3 million). This component would finance training and other capacity building activities to POs' leaders and local representatives to improve their awareness of SLM and to strengthen their capacity to integrate SLM in the formulation of local development plans and sectoral policies. C.3. Support the adoption of SLM practices (US$2.1 million). This sub-component would provide financial resources to implement SLM sub-projects. CLCOPs and cooperatives would identify suitable POs9 that would present proposals for adoption of SLM practices. With technical support from ISRA, INP, and ANCAR, the identified POs would prepare proposals that would be assessed and then approved by local assemblies (rural councils). To be selected, the proposals for SLM sub-projects would have to satisfy the following eligibility criteria: (i) the SLM sub-project shall be implemented by a Producer Organization; (ii) the SLM sub-project shall not fall within any of the negative list of ineligible activities set 8This component delivers on SIP IRs 1 and 2. 9To be selected, POs should satisfy the eligibility criteria defined in the Project Implementing Manual (i) to be a legal entity pursuant to the law; (ii) to be constituted at least with twenty members; and (iii) to be a member of CLOP. 8 forth in the Project Implementation Manual, including without limitation activities that would adversely affect forest areas and/or natural habitats; (iii) the sub- grants will support activities promoting SLM in the Target Area. The selected proposals would then be financed through this sub-component. ASPRODEB would sign a contract with the selected producer organizations which implement their activities in close collaboration with other institutions, including ANCAR, ISRA, and local governments. This sub-component would in addition cover the costs ASPRODEB bears in implementing this activity (e.g. travel costs of staff, technical assistance and consultancy services, and the costs related to monitoring and evaluation of the sub-projects). (d) Component D - Support to Sectoral Coordination10 (US$0.7 million): In PSAOP2, this component is aimed at strengthening the capacity of sectoral ministries (e.g. Agriculture and Livestock) in policy formulation, planning, coordination, and monitoring and evaluation. The GEF-supported Project would be used to strengthen the enabling conditions that allow the Government to move towards a more cross-sectoral and programmatic approach to SLM, and to support incremental costs of project management. This component comprises two sub-components: D.1 Strengthening cross-sectoral coordination (US$0.6 million). The main activities within this sub-component include: (i) The institutionalization of the (already existing) SLM Committee (Groupe Fonctionnel GDT) as a national multi-sectoral forum in charge of promoting, coordinating and overseeing the development and implementation of SLM activities in the country; (ii) the formulation and adoption of a National SLM Investment Framework (Cadre National d'Investissement en Gestion Durable des Terres); and (iii) the development of a Knowledge Base on SLM, a national database incorporating needed information on SLM technologies and approaches (the WOCAT methodology is proposed). It would also include other SLM geo-referenced data and information (e.g. extent and severity of land degradation, soil fertility, vegetation cover, land use and land use change, etc.), as well as information collected during preparation of the SLM Investment Framework. These activities are essential to ensuring the sustainability of project outcomes. D.2 Technical and fiduciary coordination and M&E (US$0.1 million). This sub- component would support incremental operating costs of the team responsible for coordinating and monitoring the overall activities of the Project. E. Lessons learned and reflected in the project design 19. The design of the Project reflects: (a) lessons learned in implementing projects in Senegal, particularly PSAOP; (b) lessons learned in implementing SLM operations in Africa; and (c) findings and recommendations of the recently completed Senegal Country Environmental 10This component delivers on SIP IRs 2 and 4. 9 Analysis, and three analytical works on SLM.11 The main lessons reflected in the project design include: (a) The need to integrate enabling activities with on-the-ground investments: The Senegal CEA stresses the importance of the enabling environment in scaling up SLM. To be conducive, the environment must rectify perverse incentives, build institutional capacity, and mainstream SLM in sectoral policies. Lessons from past experiences suggest that enabling activities are not sufficient on their own, and need to be accompanied by on-the- ground investments. If successful, on-the-ground activities have a great impact on beneficiaries' motivation, and usually generate a positive momentum for rapid up-scaling of SLM practices. The proposed operation will therefore not only support activities to improve the enabling environment for SLM, but also on-the-ground investments that generate quick wins. (b) Improvement of cross-sectoral coordination is critical to scaling up SLM: One of the conclusions of the Senegal CEA is that, in order to scale-up SLM, coordination among stakeholders and agencies must be improved. To this end, the Senegal CEA recommends development of a National Investment Framework for Sustainable Land Management (Cadre National d'Investissement en Gestion Durable des Terres). This framework would help: (i) to set objectives, thematic and geographic priorities, and investment needs; (ii) to prioritize and cost investments; and (iii) to select the most appropriate mechanisms to achieve them, facilitating alignment and harmonization of different SLM interventions. In sum, the proposed operation will support cross-sectoral coordination mechanisms (e.g. through the establishment of a multi-stakeholder SLM Platform), and provide technical and financial support to develop the National Investment Framework for SLM. (c) POs foster change and promote sustainability: PSAOP1 showed that institutional reforms and the development of new relationships between clients and service providers can be fostered if producers are empowered and able to provide a contribution toward the cost of services they need. Well conceived POs allow producers to articulate their service delivery needs, ensuring that services are more relevant and efficient, and that service providers are accountable. PSAOP2 is deepening this approach by channeling more financial resources through producer organizations to increase accountability and client-orientation of agricultural services. Focus on strengthening the capacity of POs will remain a central element of the proposed operation. (d) Need to shift the focus from commodity production to land productivity and environmental sustainability in the agricultural sector: In the 1990s, the Government invested, with the support of several DPs, about US$1 billion in agricultural and livestock development and rural water supply. Agricultural interventions focused mainly on commodity production and intensification rather than sustainable management of land resources, and land productivity. The impact and long-term sustainability of these interventions was therefore limited. Better integration of SLM approaches into the agricultural sector will help to rectify this. 11The three studies are: `Diagnostic Report on Land Degradation and Sustainable Land Management in Senegal', `Land Management Options Plan', and `Review Public Expenditure in Land and Environment Management'. 10 F. Alternatives considered and reasons for rejection 20. Stand-alone versus integrated operation. The proposed operation will have the same structure and the same institutional arrangements and implementation mechanisms as the IDA/IFAD Agricultural Services and Producer Organizations Project 2 (PSAOP2). The alternative would have been to develop a self-contained operation. However, considering that PSAOP2 represents a well established instrument for engaging the Government on broader policy issues and institutional reforms, the Project is likely to have more influence on policy dialogue and to be more effective in mainstreaming SLM, if integrated into the PSAOP2. 21. Component A: Applied research programs versus research and development (R&D). Strategic and applied research programs seek to achieve medium and long-term national priorities. Adaptive research and R&D are demand-driven, short-term research activities aimed at quickly responding to the expressed needs of beneficiaries within a specific local or regional context. While PSAOP2 supports both applied research programs and R&D, the proposed operation will support R&D only. This choice was made based on two considerations. First, there is already a large stock of SLM technologies available within research institutions. Producers and land users do not demand the generation of new technologies, but information on the conditions under which existing technologies can be applied. Second, the relatively short duration of the project (three years) would be insufficient to produce applied research results, considering the time needed to select and finance research under the competitive mechanism of FNRAA. III. IMPLEMENTATION A. Partnership arrangements 22. Coordination with UNDP under the GEF-SIP. The proposed operation is one of the two operations developed under the GEF-SIP in Senegal, the other being UNDP's Innovation in Micro-Irrigation for Dryland Farmers Project. The two operations will coordinate closely and use the same approach. Both would focus on improving the enabling environment for SLM adoption. They will however target two different geographical areas of the country: the proposed operation would focus on the Groundnut Basin, while UNDP's operation will be implemented in the Bakel Region, situated in the Senegal River Valley. In addition, the planned third phases of the UNDP/GEF Groundnut Basin Soil Management and Regeneration Project (PROGERT), and of the UNDP/GEF Program for Integrated Soil and Water Management (PGIES) will be fully aligned with the principles and approach of the GEF-SIP. 23. Partnership with IFAD. PSAOP2 is co-financed in parallel by the International Fund for Agricultural Development (IFAD). IFAD contributes to PSAOP2 with a loan of US$6.0 million. IFAD has been closely involved in the design of PSAOP2, from preparation to negotiations. IFAD funds are pooled into the Project's designated account. IFAD plays a role in the learning processes of PSAOP. It does this by using its other projects in Senegal to test pro- poor approaches that benefit from and feed into the institutional reform process through activities that can be flexibly programmed, including exchange visits and thematic workshops. 24. Partnership with Israeli Embassy. Within the framework of PSAOP2 and PDMAS, the Bank is developing a partnership initiative with the Israeli Embassy to support the scale-up of 11 the Techno-agricultural Innovation for Poverty Alleviation (TIPA) irrigation system (about US$ 400,000, this initiative is under preparation). The system is well adapted to smallholders' community production systems, and contributes to sustainable land and water management. 25. Coordination with other Development Partners' initiatives. USAID has recently started discussions with Government on preparation of an Agricultural Productivity and Natural Resource Management project (about US$ 20 million, under preparation) while JICA is initiating a Land Restoration operation. The cross-sectoral coordination mechanism for SLM that this operation supports (Component D) will ensure coordination with these two proposed operations. French Cooperation continues to support some activities linked to PSAOP, in particular professional development for POs, and agricultural and rural development training activities, both through its Promotion of Competitive and Sustainable Agriculture (PACD) Project. B. Institutional and implementation arrangements 26. Institutional set-up and implementation arrangements. The operation will adopt the same institutional arrangements as PSAOP2, which consist of: (a) A Steering Committee (Comité de Pilotage; the same as for PSAOP212), which includes representatives of the implementing agencies and is responsible for approving the work program and consolidated budget, and assessing project performance; (b) A Technical and Fiduciary Coordination Unit (Unité de Coordination Technique et Fiduciaire - UCTF), the same as that of PSAOP2, which is responsible for: (i) monitoring the overall implementation of the Project; (ii) facilitating the exchange of information and cooperation between implementing agencies; (iii) preparing quarterly progress reports by consolidating the reports of individual components; (iv) consolidating, supervising, and monitoring procurement plans prepared by the different components; (v) managing the designated account, in liaison with the Direction de la Dette et de l'Investissement (DDI) of the Ministry of Finance; (vi) providing operational support to the components as needed; and (vii) liaising regularly with the World Bank. The Coordination Unit is located at the Ministry of Agriculture. (c) One implementing agency per component or sub-component, specifically: (i) Component A - Support to the Agricultural Research System: implemented by ISRA (see details in Annex 2). (ii) Component B - Strengthening Agricultural Advisory Services: implemented by ANCAR (which has the legal status of a Société à participation publique minoritaire). (iii) Component C - Support to Producer Organizations: implemented by ASPRODEB (an NGO which represents 19 national federations of producers). (iv) Component D - Support to Sectoral Coordination: implemented by: (i) The National Institute of Pedology (Institut National de Pédologie, INP), which reports to the 12INP will be included as an observer. 12 Ministry of Agriculture, for the sub-component D1 (Sectoral Coordination); and (ii) the Technical and Fiduciary Coordination Unit for sub-component D2 (Technical and Fiduciary Coordination). 27. The only institutional difference with PSAOP2 is the addition of the INP, which will play a key role in coordinating the activities aimed at strengthening cross-sectoral coordination mechanisms and building a national coalition for SLM (Component D). 28. Financial management. The operation will adopt the same financial management arrangements as PSAOP2, which will require the preparation and signing of revised legal agreements. ASPRODEB manages its funds directly through a management services contract. This contract is signed between ASPRODEB and the Technical and Fiduciary Coordination Unit (TFCU). Funds are withdrawn from the designated account or from the credit (in the case of the proposed project, the grant), following the disbursement and financial management provisions of the management services contract. The other implementing agencies send their funding requests to the TFCU. Each implementing agency has its own financial and accounting system in place, certified by an independent auditor, and manages its own procurement activities under the overall guidance and quality control of the procurement specialist of the TFCU. Procedures for coordination, implementation, management, monitoring and evaluation, procurement, and administration are detailed in the Project Implementation Manual (PIM). 29. Flow of funds. The funds for this operation will flow from the World Bank to a new Designated Account opened under the DDI at the Ministry of Economy and Finance. The Designated Account will be managed by DDI in coordination with the TFCU. Reporting on the use of funds for the Designated Account and the sub-accounts will be based on statements of expenditure. Reporting on the use of funds for the management contracts will be based on financial and technical reports. Payments will be made in installments. The initial installment will be determined based on the disbursement plan. Subsequent payments will be based on progress reports (physical and financial). C. Monitoring and evaluation of outcomes/results 30. The PSAOP2 Monitoring and Evaluation (M&E) system will be modified by adding objectively verifiable SLM indicators described in the results framework (Annex 3). The system will be fully integrated with the M&E systems established and used by the PSAOP. It is important to note that establishing an effective M&E system for the whole agriculture sector, and thus for monitoring part of the DSRP-II (Poverty Reduction Strategy Paper), is the ultimate expected outcome of the M&E system established by the PSAOP. The project M&E system, managed by the TFCU will be linked to the M&E system of the components, and will deliver consolidated monitoring information on project activities and progress. The system will collate and process information collected from the components as well as additional data derived from special studies and participatory M&E exercises. The M&E system is web-based and participatory. 31. As in PSAOP, the M&E system is comprised of two elements which will be used in combination to assess the performance of each component: 13 (a) Financial monitoring, which allows tracking of the resources used to carry out Project activities. It will indicate the budgeted costs for planned activities and completed activities as well as the actual costs of completed activities. Financial monitoring will allow monitoring the financial performance of the Project. (b) Technical and physical monitoring, which will track indicators identified in the PTBA and monitor physical progress. 32. The Coordination Unit is responsible for overall monitoring of the Project. It will improve the information system to ensure collection of technical and economic information produced by the Project, and it will strengthen dissemination. The M&E system will be measuring yields and production and vegetation cover in order to show possible improvements. However, given its short three year duration, the Project will not be directly accountable for them, as significant changes in these indicators are likely to take longer than the project's life. Baseline values for vegetation cover in the areas targeted by the project are reported in Fig. 3.1 in Annex 3. . D. Sustainability and replicability 33. Sustainability. Expected long-term sustainability of the Project is based on the following elements: (a) Institutional sustainability: The Agro-Sylvo-Pastoral Orientation Law (LOASP, 2004) includes promotion of better land exploitation and improvement of soil fertility among its strategic objectives. This law, which provides the policy framework for PSAOP2, can be considered a sign of the Government's political commitment. Through institutionalization of the Groupe Fonctionnel GDT and formulation of an SLM Investment Framework, SLM is expected to be better integrated in the Senegalese policy framework. An intermediate outcome expected of the Project is an increase in the Government's budget allocation to SLM. (b) Project sustainability: Sustainability ultimately depends on the impact of innovations and advisory services on agricultural productivity and incomes. Based on the results of the participatory SLM program between the Rodale Institute and farmers in Senegal, it is expected that adoption of SLM technologies will enhance soil productivity; therefore wide- scale adoption of SLM is expected to have positive effects on agricultural productivity and farmers' income. Sustainability also depends on the implementation of a demand-driven approach, where supported SLM interventions are generated in response to the needs expressed through beneficiaries' producer organizations. (c) Financial sustainability: The financial analysis carried out for this Project shows an Internal Rate of Return (IRR) of 27 percent and farmer Net Present Value (NVP) of FCFA 49 million (US$ 98,000; ref. Annex 9). 34. Replicability. Expansion of Project approaches on a wide scale is enhanced by three activities. First, the Project will strengthen the capacity of the agricultural advisory system in SLM, and the capacity of POs to integrate SLM in their production systems. Second, it will develop a national Knowledge Base on SLM and a National Investment Framework. Third, it will institutionalize a national multi-sectoral forum in charge of promoting, coordinating and 14 overseeing SLM activities in the country. In addition, a possible third phase of PSAOP -- which will fully mainstream sustainable land management in its design ­ will further support the consolidation and replication of the results of this Project. E. Critical risks and possible controversial aspects Risk factors Description of risk Rating of Mitigation measures Rating of risk residual risk I. Country and/or Sub-National Level Risks Macro- The global economic slowdown is likely to Sustaining sound macro policy economic have a number of impacts, negative stance: The authorities are pursuing Framework (channels of transmission include exports, corrective fiscal actions undertaken at tourism, remittances and postponed FDI) or Substantial end-2008, including the settlement of Substantial positive (reversal of previous years' shocks domestic arrears, which should partly from oil and food). offset external shocks. IDA Portfolio The accumulation of government arrears led Eliminate arrears and place country's to delays in the payment of counterpart fiscal stance on sustainable track. funding (CF) in FY08. Moderate Ensure payment of counterpart funds: The Bank team is working closely Moderate with Government so that all 2008 CF arrears are paid in early 2009, and adequate funding is secured. II. Sector Governance, Policies and Institutions Sector-specific Uncertainty of land tenure status for farmers PSAOP2 will support the land reform Risks may discourage SLM investments: Lack of process. Activities and SLM tenure security may discourage SLM Moderate investments will be directed to pilot Moderate investments, which are long-term in nature. zones with no land tenure issues. Increase in extreme climate events (e.g. Risks associated with the effects of droughts and/or floods) due to climate climate change will be taken into change: Effects of climate change may consideration and mitigated by undermine the gains made from SLM Moderate assessing vulnerability to climate Low related investments, and/or may render change and integrating adaptation rapidly obsolete the SLM technologies/ measures into the proposed activities. strategies to promote SLM. III. Operation-specific Risks Technical Failure to involve the main users in the The Project is designed to bring Design SLM technology generation and together technology users and dissemination process may lead to several suppliers, based on collaboration of inefficiencies including: (i) technologies' producer organizations, research, and lack of correspondence to the diversity of extension. Producer organizations socioeconomic and agro-ecological have a crucial role to play in constraints and failure to take into account accelerating the diffusion of the producers' indigenous knowledge; and information, and in providing (ii) delays in technology dissemination and Moderate services to producers to facilitate Low adoption. technology adoption. However, producer organizations need support to build their capacity before they can play an effective role in the technology development and diffusion process, which is why a support-to-producer organizations component is included. Lack of appropriate SLM technologies The project will support the Moderate generation, dissemination, and adoption of SLM via NARS, advisory Low systems, and POs. Implementation Implementing agencies may lack technical Moderate The project will adopt the same Low 15 Risk factors Description of risk Rating of Mitigation measures Rating of risk residual risk Capacity and and managerial capacity to adequately implementation arrangements Sustainability implement project activities. adopted in PSAOP2. The capacity of implementing agencies was already strengthened during PSAOP1 and 2. The only difference with respect to PSAOP is the addition of the National Soil Science Institute (INP) to play a role in cross-sectoral coordination. Capacity of the INP will be strengthened through the Project. Institutional conflicts among sectoral The project will specifically support ministries and other institutions may the establishment of a national SLM prevent the adoption of a multi-sectoral Moderate coordination mechanism. Moderate approach to SLM. Financial Inherent risks, such as: The CFAA and PEFA action plan is Management - Poor governance/corruption in the areas under implementation and the where activities will be implemented government has created an Executive - Low capacity of the Ministry of Secretariat for follow up. Key FM Agriculture to implement and monitor oversight elements of the Project are the Project entrusted to the Government system. Capacity for external audit is Control risks such as: enhanced by the recruitment of the - Limited knowledge of Bank's FM and Moderate external private sector audit firm to Moderate procurement procedures carry out the external audit. The - No internal audit functions in place Project will be implemented by a - Lack of strong systems of external audit TFCU, and the Bank will pay special - Risk of mingling funds with other attention during the supervision projects (see details in Annex 7) mission to the adequacy of the FM system implemented (see details in Annex 7). The implementation entities in charge of the The Project will use the financial implementation of the Project may not have management arrangements of acceptable financial management capacity. PSAOP1 and 2, which have already Moderate benefited from capacity building in financial management and which was Low rated satisfactory by the last assessment of the financial management review. Procurement The implementation entities in charge of the The Project will use the procurement implementation of the Project may not have staff who has already been trained in acceptable knowledge of Bank procurement and exposed to Bank procurement guidelines. Moderate procedures under PSAOP1 and 2, and Low which is satisfactory according to the procurement assessment review carried out in November 2008. Social and Although the Project is expected to have The Environmental and Social Environmental positive environmental impacts because it Management Framework (ESMF) Safeguards will finance interventions to reduce land prepared for PSAOP2 was updated to degradation, some localized negative take into consideration and address environmental impacts may be possible if Moderate the potential negative impacts Low environmental concerns are not taken into associated to the implementation of consideration in the design and maintenance the activities of the proposed Project. of small scale infrastructures (e.g. small dams, storage tanks, etc.). IV. Overall Risk (including Reputational Risks) Overall Risk Low 16 F. Loan/credit/grant conditions and covenants 35. Conditions of Effectiveness. The Grant Agreement shall not become effective until evidence satisfactory to the World Bank has been furnished to the World Bank that the conditions specified below have been satisfied: the execution and delivery of this Agreement on behalf of the Recipient (Republic of Senegal) have been duly authorized or ratified by all necessary governmental action; the Recipient has revised the Financial and Accounting Procedures Manual and the Project Implementation Manual for the purposes of the Project, in a manner satisfactory to the World Bank; the Recipient has revised the PSAOP II Arrêté to expand the role of the TFCU and the Steering Committee for the purposes of the Project; the TOMPRO software has been updated for the purposes of the Project; the Recipient shall have entered into the Subsidiary Agreement with ASPRODEB and into agreements, in form and substance acceptable to the World Bank, with ISRA, ANCAR, and INP for the implementation of the Project. 36. Institutional covenants. The Recipient shall establish and maintain, throughout Project implementation, with composition and terms of reference acceptable to the World Bank: (a) the Steering Committee, to be responsible for approving annual work programs and budgets and to assess Project performance; and (b) the TFCU, within the ministry in charge of agriculture, with the responsibility to: (i) support implementation of Project activities; (ii) monitor the day-to-day implementation of the Project; (iii) facilitate exchange of information and cooperation among the implementing entities; (iv) prepare quarterly progress reports; (v) consolidate, supervise and monitor procurement plans for the Project; (vi) manage disbursements in collaboration with the ministry in charge of economy and finance; and (vii) act as liaison with the World Bank. The ISRA will be responsible for the implementation of Part 1 of the Project; ANCAR will be responsible for the implementation of Part 2 of the Project; ASPRODEB will be responsible for the implementation of Part 3 of the Project; the INP will be responsible for the implementation of Part 4.A of the Project. The Recipient shall implement or cause the Project to be implemented in accordance with the Implementation Agreements and except as the Recipient and the World Bank shall otherwise agree, the Recipient shall not amend or waive any provision of such Implementation Agreements. To facilitate the carrying out of the ASPRODEB's part of the Project, the Recipient shall make part of the proceeds of the Financing available to the ASPRODEB under a 17 subsidiary agreement between the Recipient and the ASPRODEB, under terms and conditions approved by the Association. ("Subsidiary Agreement"). The Recipient shall exercise its rights under the Subsidiary Agreement in such manner as to protect the interests of the Recipient and the Association and to accomplish the purposes of the Financing. Except as the Association shall otherwise agree, the Recipient shall not assign, amend, abrogate or waive the Subsidiary Agreement or any of its provisions. The Recipient shall ensure that the Project, and each SLM Subproject, is implemented in accordance with the provisions of the Environmental and Social Management Framework and the Resettlement Policy Framework, and shall not, except as the World Bank shall otherwise agree, amend or waive, or permit to be amended or waived, any provision of the aforementioned. The Recipient shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. To provide Subgrants, the Recipient shall cause ASPRODEB to enter into a Subgrant Agreement with the Subgrant Beneficiary in form and substance satisfactory to the World Bank. 37. Financial covenants. The Recipient shall prepare and submit to the World Bank annual work plans, in form and substance satisfactory to the World Bank, no later than November 30 of each year. The Recipient shall maintain or cause to be maintained a financial management system including records, accounts and preparation of related financial statements in accordance with accounting standards acceptable to the Bank. The Recipient shall recruit the external auditor on terms and conditions acceptable to the Association not later than six (6) months after the Project's effectiveness date. The Financial Statements will be audited in accordance with acceptable international auditing standards. The Audited Financial Statements for each period shall be furnished to the Association not later than six (6) months after the end of the Project fiscal year. The Recipient shall ensure that interim unaudited financial reports (IFR) for the Project are prepared and furnished to the World Bank not later than 45 days after the end of each calendar quarter, covering the quarter in form and substance satisfactory to the World Bank. The first IFR shall be furnished to the World Bank not later than 30 days after the end of the first calendar quarter after the Effective Date, and shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter. 18 IV. APPRAISAL SUMMARY A. Economic and financial analyses 38. This operation aims to increase the productivity of land resources in the Senegal Groundnut Basin by promoting the use of sustainable land management technologies and practices among farmers. The key issue is whether the investment costs are economically and financially profitable. An economic and financial analysis was carried out for this purpose. The methodology used for and the results of these analyses are summarized below. Details are reported in Annex 9. 39. Economic analysis. A cost-benefit approach was used for the economic analysis. The analysis compared the additional costs for farmers in adopting new technologies with expected benefits. The analysis assessed trends in the cost and benefit parameters "with" or "without" project. The profits resulting from the Project come from the increase in agricultural yield and cultivated land achieved in different crops by introducing the technologies proposed in the Project. Three different types of costs were considered: SLM `public investments' (in the collective agricultural support sector and producer organizations), `private investments' (individual investment in agricultural equipment to maximize available opportunities), and `additional costs of production' caused by the adoption of new technologies. Economic prices were considered in this assessment and were obtained by adjusting observed distortions in financial prices (taxes, export duties, etc.). Three sub-agro-ecological zones in the Groundnut Basin (i.e. north, center, and south) have been chosen to assess incremental production over years with and without project. The key assumption made was that the technology adoption rate would vary between 20 percent and 45 percent, depending on the zones and crops under technologies used. Under these assumptions, the economic assessment showed the economic viability of the SLM operation from the perspective of the national economy. The economic Internal Rate of Return (IRR) calculated from the project is 35 percent, with a Net Present Value (NPV) of FCFA 1.8 billion (US$ 3.5 million) over the three years of the operation, with a capital opportunity cost of 20 percent. The IRR would be 93 percent, with a NVP of FCFA 19 billion (US$ 38 million) for the 2009-2013 period. The project profitability appears sensitive to decrease in targeted yields (switching value of -5 percent) to the rate of adoption (-10 percent); and extremely sensitive to decrease in market prices (-3 percent). 40. Financial analysis. For the financial analysis a "with" and "without" project assessment was made on the basis of the standard farm model and cultivated crops within each of the three above-mentioned sub-agro-ecological zones (ref. Table 1 in Annex 9). For each farm model/agricultural crop, the rates of change in land area, yield and production over the last fifteen years (1994-2008) were calculated at department and regional levels. The "without- project" scenario was developed using the current fluctuating trends in land area and average yields. The "with-project" scenario took into account the option for improving yields and cultivated land with the support of project components, using a technology-estimated adoption rate. The financial analysis shows an IRR of 27 percent over the opportunity cost of capital (the latter estimated at 20 percent) and a farmer NVP of FCFA 49 millions (US$ 98,000). 19 B. Technical 41. The rationale for the proposed approach and technical design is based on the following considerations and lessons learned: (a) Need to better integrate sustainable management of land resources in the agricultural sector: Most of past interventions in the agricultural sector focused on intensification and commodity production rather than on the issues of resource management and land productivity. This approach however led to results that were not sustainable in the long- term. (b) Need to integrate enabling activities with on-the-ground investments: Lessons from past experience suggest that enabling activities need to be accompanied by on-the-ground investments. If successful, on-the-ground activities have a great impact on beneficiaries' motivation, and generate a positive momentum for rapid up-scaling of SLM practices. (c) POs are key drivers to foster changes and ensure sustainability: PSAOP showed that institutional reforms and the development of new relationships between clients and service providers can be fostered if producers are empowered and able to contribute to the services they need. (d) Improvement of cross-sectoral coordination is critical to scale-up SLM: There has been an increasing recognition (supported for instance by the conclusions of the Senegal CEA) that, in order to scale-up SLM, it is critical to improve coordination among stakeholders and implementing agencies. 42. To address these issues, the Project is designed to: (a) Contribute to mainstream SLM in the agricultural sector: PSAOP is an important instrument to promote institutional reforms and support the implementation of policy reforms in the agricultural sector. By integrating the Project into PSAOP2 by using the same institutional arrangements and implementation mechanisms, this operation is expected to mainstream SLM in the agricultural sector. (b) Disseminate and scale up SLM technologies at the local level: A significant share of financial resources in this operation is devoted to strengthening the capacity of the agricultural extension system to deliver SLM packages and to support Producer Organizations to adopt SLM technologies (Components B and C). An Operational Matrix that identifies the most appropriate SLM technologies for each geographical location and form of degradation, and their conditions for success, has been prepared during project preparation to guide users in the selection of appropriate technological solutions (ref. Table 4.3 in Annex 4). (c) Empower and strengthen the capacity of local leaders on SLM: A focus on strengthening the capacity of local leaders (political leaders as well as POs' leaders) to integrate SLM in local development plans and policy formulation is a central element of the proposed operation (Component C). (d) Strengthen cross-sectoral coordination mechanisms for SLM: The proposed operation would support cross-sectoral coordination mechanisms (e.g. through the establishment of a multi-stakeholder SLM Platform), and provide technical and financial support to develop a national framework for SLM investments (Component D). This investment framework 20 would help: (i) set objectives as well as thematic and geographic priorities and investment needs; (ii) prioritize and cost them; and (iii) identify and select the most appropriate mechanisms to achieve them, thus facilitating alignment and harmonization of SLM interventions. C. Fiduciary 43. Financial management. A financial management assessment was carried out to determine whether the TFCU in charge of the implementation of the Project has acceptable financial management arrangements. The conclusion of the assessment is that the financial management system in place satisfies the Bank's minimum requirements under OP/BP10.02. It can provide, with reasonable assurance, accurate and timely financial management information on the status of the Project required by the World Bank. The financial management arrangements will be implemented by the TFCU. The Staff and the auditor will be recruited on a competitive basis. The information system installed in the TFCU and the manual of procedures elaborated will also be updated. 44. Procurement. The last Procurement Assessment Review for TFCU (Technical and Fiduciary Coordination Unit) was conducted during the period November 14-19, 2008. The results of the review revealed a generally acceptable procurement environment. Nonetheless, training on the Bank procurement procedures will be required for INP's Procurement Officer. The TFCU Procurement Specialist will be responsible for verifying that all procurement activities adhere to the quality standard defined in the implementation manual and comply with procurement guidelines. The TFCU Procurement Specialist will clear all procurement documents before they are reviewed by the Bank (including for activities subject to ex-post review). The Procurement Specialist will also be responsible for consolidating the components' procurement plans into a single procurement and monitoring its implementation. D. Social 45. As a supplement to PSAOP2, the SLM project is intended to reinforce the positive social impacts of the operation. These positive impacts include: employment creation and revenue generation, and improvement of social capital for producer organizations, participating stakeholders and institutions. Producer organizations and their consultative bodies such as CLCOP (Cadre Local de Concertation des Organisations de Producteurs, i.e. Producer Organisations' Local Consultation Fora) are at the center of innovations generated in terms of sustainable land management. These positive effects will trickle to the local level and complement activities of the Participatory Local Development Project (PLDP) that aims at improving access to social services and health and education infrastructure at the community level. 46. In addition, the updated ESMF will help mitigate the potential negative social impacts of sub-projects. These include conflicts between agriculturalists and pastoralists, and conflicts over land due to the new investments. 21 E. Environment 47. The SLM supplement to PSAOP2 will promote environmentally friendly technologies such as the rehabilitation of acid and salted soils, rehabilitation of degraded lands, and improved irrigation systems for efficient water consumption. Though the location of future sub-projects of SLM is not determined yet, the Environmental and Social Management Framework (ESMF) of PSAOP2 is valid and has specified standard approaches and procedures to address environmental as well as social issues in screening for design, implementation and follow-up. In addition, it includes institutional arrangements where roles and responsibilities of key actors and stakeholders are defined with respect to screening, approval, and mitigation. 48. The Pest Management (OP 4.09) safeguard was triggered under PSAOP2 because the Project's efforts to increase agricultural productivity could increase the use of pesticides. With the emphasis on land use regimes, structural, agronomic, vegetative and biological methods for improving the physical land capital, and the eventual use of drip irrigation, the proposed operation aligns well with OP 4.09. In addition, the Project would continue to implement the Government's Pest Management Plan (PMP) prepared under PSAOP2 (annex ESMF). The updated ESMF was disclosed in-country on September 5, 2008 and in the Bank's Infoshop on April 17, 2009. F. Safeguard policies 49. Safeguard documentation is already prepared in the framework of the PSAOP2. The Environmental and Social Management Framework (ESMF) and the Resettlement Policy Framework (RPF) were updated in May 2008 to reflect screening requirements for SLM sub- projects. The ESMF outlines: (i) An environmental and social screening process for pilot sub- projects supported by ANCAR and ASPRODEB; (ii) environmental assessment criteria for ANCAR and ASPRODEB sub-projects; (iii) a separate screening form for research sub- projects, including environmental evaluation criteria; and (iv) a summary of environmental impacts to be taken into account in research sub-projects. The updated ESMF and RPF can thus be applied to future SLM sub-projects. The ESMF and RPF reflecting the adjustments for SLM sub-projects were disclosed in Senegal and at the Bank's Infoshop prior to appraisal. The following table presents the Safeguard policies triggered by the Project. 50. The Safeguards Screenings Category is S2 and the Environmental Screening Category is rated B. The following table presents the Safeguard Policies triggered by the project. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [ ] [x] Pest Management (OP 4.09) [x] [ ] Physical Cultural Resources (OP/BP 4.11) [ ] [x] Involuntary Resettlement (OP/BP 4.12) [x] [ ] Indigenous Peoples (OP/BP 4.10) [ ] [x] Forests (OP/BP 4.36) [ ] [x] Safety of Dams (OP/BP 4.37) [ ] [x] 22 Projects in Disputed Areas (OP/BP 7.60)* [ ] [x] Projects on International Waterways (OP/BP 7.50) [ ] [x] 51. OP/BP 4.01, 4.09 and 4.12 are triggered since this is an operation focusing on the agriculture sector, having an objective bearing on pest management. OP/BP4.04 (Natural Habitats) and OP/BP4.36 (Forests) are not triggered, because the project will only intervene in degraded agricultural lands. No sub-project will be approved if forests or natural habitats are affected. As a result, an update of the PSAOP2 environmental assessment was done prior to appraisal. There may be some indirect environmental and social effects due to use of pesticides in sub-projects but these are expected to be minimal and may even be reversed because of project-supported land improvements. The latter include: (i) structural, agronomic and vegetative measures; and (ii) capacity building of project staff and participants in safeguard measures. The Resettlement Policy Framework of PSAOP2 has also been updated and reviewed by the Bank Specialists in view of integrating the SLM project. During implementation of individual sub-projects, consultations will continue to take place with non-governmental and community based organizations and farmers, regarding agriculture sector environmental and social issues. G. Policy Exceptions and Readiness 52. Exceptions. No policy and readiness exceptions are foreseen. 53. Streamlined processing. The proposed operation is processed following streamlined procedures. The Project meets streamlined processing eligibility criteria as follows: (a) Simple Design: (i) Simple development objective: The proposed operation aims to reduce land degradation and increase agricultural productivity in priority agro-ecological zones in the Groundnut Basin in Senegal, by integrating sustainable land management in agricultural practices; (ii) Simple project design: The proposed activities are organized along the four components of the baseline project (PSAOP2); (iii) Simple institutional, legal and financial arrangements: The proposed operation will adopt the same institutional, legal and financial arrangements of PSAOP2; (iv) No controversial policy reforms: The proposed operation will not deal with policy reform; (v) No exceptions to Bank policies: The proposed operation does not require any exception to Bank policies; (vi) Not a complicated programmatic approach: While one of the objectives of the proposed operation is to support the Government of Senegal in establishing the basis for a more programmatic approach to sustainable land management, the *By supporting the proposed Project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas. 23 operation itself is a simple GEF-supported project integrated to an IDA operation, and is not implementing a programmatic approach; (vii) Not a first-time operation in the country or the sector: The Bank has a well established policy dialogue in the agricultural and rural development sector in Senegal. (b) Strong Country Ownership: The proposed operation is consistent with and contributes to the objectives of the key Senegal policies and strategies. Land degradation has been repeatedly recognized by the Government of Senegal as a key constraint to development at both local and national levels. Addressing land degradation and promoting sustainable use of natural resources have been indicated as key objectives in virtually all national policies and strategies, including the Poverty Reduction Strategy (DSRP-II, 2007). The proposed operation is one of the instruments for implementation of recommendations of the Senegal Country Environmental Analysis, recently endorsed by the Government. (c) Sufficient Institutional Capacity: The implementation of this operation is under the overall supervision of the PSAOP2 Coordination Unit, which has proven implementation and fiduciary capacity. (d) Low to Moderate Risks: The proposed operation does not present any significant risk or controversial aspect, and the overall project level-related risk is considered low. The Project is Category B with regard to Safeguard policies. (e) Strong Bank Inputs: The team has strong operational and country experience and mastery of Bank operational policies, including fiduciary and safeguards. The budget for supervision is adequate. 24 Annex 1: Country and sector or program background SENEGAL: Sustainable Land Management Project A. Land resources and land degradation in Senegal: An overview 1. Land resources and land use patterns in Senegal. Senegal covers a surface area of 19.5 million ha, of which 19 percent are arable (3.8 million ha13), 32 percent (6.3 million ha) are covered by forest, savannah and protected zones; the rest is shared between desertified lands and unclassified brush and urban lands (PGIES, 2005). About 65 percent of the arable land (2.4 million ha) are used for rainfed crops, nearly 3 percent for floodplain crops and irrigated crops (100,000 ha), and the rest is uncultivated and is mainly used for herding (1.3 million ha). 2. The importance of land resources in Senegal. Land is a key resource in Senegal. Terrestrial ecosystems make up 99.7 percent of the country's natural capital (63 percent for croplands and herding land, 30 percent for forests and 6 percent for protected areas) and 13 percent of total national wealth (Where is the Wealth of Nations, 2006). Seventy percent of the rural population (which represents about 50 percent of the total population in Senegal) directly depends on land resources for its livelihood. Despite the fact that the contribution of the agricultural sector to the GDP has declined in the last decades (from 17.3 percent in 1979 to about 9 percent at present), this sector still engages about 60 percent of the population (Senegal Land Action Plan, 1996) and, according to the Government's Poverty Reduction Strategy Paper (DRSP-II), it still represents one of the major engines for shared growth. 3. Land degradation in Senegal: Scope and geographical distribution. Land degradation is increasingly affecting land resources in Senegal. About 65 percent of the arable land in the country, i.e. about 2.5 million ha (SN-CEA, 2008), is considered degraded. The Groundnut Basin and the sylvo-pastoral zone in the west and center of the country are the areas most affected by land degradation14. 4. Major forms of land degradation in Senegal. Major forms of land degradation include the following: (a) Reduction of vegetation cover: It is estimated that forest lands outside the national park system decreased at a rate of 80,000 ha per year between 1980 and 1990. Over the same period, the wood potential decreased at a rate of 1.8 percent per year. In 1998, the FAO estimated this decrease at 50,000 ha per year and the decrease in wood potential at 0.7 percent per year (CSE, 2005). (b) Soil erosion: Erosion due to rainfall is mainly prevalent in the country's south-eastern regions (Casamance) and Western Senegal. It is estimated that water erosion has led to the 13The Groundnut Basin represents 57 percent of these lands, Casamance represents 20 percent, Eastern Senegal 10 percent, and the Senegal River valley 8 percent (PROGERT, 2007). 14About 1.15 million ha are degraded in the Groundnut Basin alone, representing about one-third of all arable land in the country. A LADA study (L'évolution de la Dégradation des Terres au Sénégal, FAO/UNEP/CSE) shows that 20 percent of the sylvo-agricultural zones have been affected by substantial degradation. In the agro-pastoral zone, land use characteristics have been changed on almost 65 percent of the area, notably with degradation of natural vegetation in just 11 years, with woody savannah evolving towards poorer types of scrub savannah. Detailed studies in Kaffrine show that, between 1989 and 1999, land on 64 percent of the study area degraded, while only 1 percent improved (LADA 2005). 25 degradation of 9,080,100 ha, which represents 77 percent of total degraded soils (MEPN, 2005). Wind erosion is particularly severe in the country's northern regions (Senegal River valley, Center-north and North of the Groundnut Basin) where soils are very sandy on the surface and are subjected to the Harmattan seven to nine months per year. This form of degradation represents 3 percent of degraded soils. (c) Salinization and acidification: Salinization represents about 9 percent of degraded soils (MEPN, 2005), and it is mainly observed in the Senegal River Delta, in Casamance, in the Saloum River Delta and in the lower reaches of the Gambia River. The areas affected by salinization are estimated to be about 1,000,000 ha, including 650,000 ha in Lower Casamance, 225,000 ha in the Senegal River Delta and 125,000 ha in the Sine Saloum. The degradation of soils through acidification is particularly present in the Peanut Basin (Thiès, Diourbel, Sine Saloum), in the Senegal River valley and in Casamance. According to 1987 estimates, acid soils or soils undergoing acidification cover about 1,600,000 ha (PRONARES, 1997). 5. Main causes of land degradation. Main causes of land degradation include the following: (a) Overgrazing and unsustainable agricultural practices: Extensive agriculture, the inadequate integration of agriculture and animal husbandry, the progressive abandonment of fallow lands and increased monoculture practices, and the disintegration of traditional land management systems are all factors that have strongly contributed to deforestation, loss of soil fertility and soil degradation. (b) Population growth: Demographic growth at a rate of 2.9 percent per year has led to an extension of cultivated lands and to increased pressure on forest resources due to high demand for charcoal in urban centers. Anthropogenic pressure is significant on 11 percent of degraded soils (PROGERT, 2007). 6. The impact of land degradation. The negative consequences of land degradation are manifolds. a) On the country's potential for growth. Soil fertility depletion (one of the forms of land degradation in Senegal) represents in fact one of the main causes of stagnation in the agricultural productivity and, consequently, one of the major constraints to agriculture and economic growth. b) On poverty and vulnerability of rural people. According to the Senegal CEA, the linkage between poverty and land degradation is well established in Senegal. Because most of the rural population (which represents the poorest and therefore the most vulnerable) heavily depends on land resources for their livelihoods, increasing land degradation reduces their livelihoods options and income generation opportunities, thus exacerbating their poverty and increasing their vulnerability. c) On social costs. Declining soil productivity in rural lands and population growth contribute to the abandonment of previously productive lands and increased migration to urban centers (particularly to Dakar), with potentially high social costs, including unemployment. d) On ecosystem functions and services. Senegal's territorial ecosystems and their products are an important part of Senegal's natural wealth and essential to country's food security. 26 Land degradation is considered one of the key factors of continuing imbalances in the ecosystems (including water resources) and worsening of wildlife habitats. 7. Economic implications of land degradation. Rough estimates suggest that the annual economic cost of land degradation in Senegal may be in the order of 1 percent of GDP (ref. SN- CEA). 8. Sustainable land management (SLM) as a means to address land degradation: Opportunities and constraints. According to the Senegal CEA, sustainable land management could offer a means to address land degradation and enhance rural land productivity on a long- term basis. However, despite some isolated technical successes (e.g. interventions to stabilize sand dunes in the Niayes), the adoption and replication of SLM has remained relatively limited. Some of the key reasons that have prevented the adoption and/or wide scale replication of SLM include: (a) a weak enabling environment (characterized by inconsistent government policies and regulations, weak institutional capacity to support SLM adoption, and an unfavorable incentive system); and (b) a single-sector/project-specific approach to the problem. 9. Recipient's key policies and strategies. Land degradation has been repeatedly recognized by the Senegalese Government as a key constraint to development at both local and national levels. Addressing land degradation and promoting sustainable use of natural resources have been indicated as key objectives in virtually all national policies and strategies since the National Action Plan for the Environment in 1993. The Senegalese Government ratified the United Nation Convention to Combat Desertification (UNCCD) in 1995, and submitted its National Action Program to Combat Desertification (NAP) in 2000. The NAP identifies the main priorities and actions to prevent and reduce the effects of desertification. The Agro-Sylvo-Pastoral Orientation Law (LOASP, 2004) includes promotion of better land exploitation and improvement of soil fertility as key strategic objectives of the national rural development policy. The Accelerated Growth Strategy (2006) identifies `sustainable agriculture' as a key driver for Senegal economic growth. The Plan d'Action National pour l'Adaptation aux Changements Climatiques (PANAC, 2006) identifies sustainable land management as an effective adaptation activity. More recently, the Poverty Reduction Strategy (DSRP-II, 2007) identifies combating land degradation and promoting sustainable agriculture and forestry as priority objectives to reduce poverty. Finally, the Government of Senegal has increasingly recognized that, to effectively address land degradation and promote SLM, a more cross-sectoral and programmatic approach to scale up SLM (as opposed to a project-based approach) is needed. 27 Annex 2: Major related projects financed by the Bank and/or other agencies SENEGAL: Sustainable Land Management Project A. Bank-funded projects 1. The World Bank has a well integrated rural portfolio in Senegal, which includes the Agricultural Markets and Agribusiness Development Project (PDMAS), the Participatory Local Development Program (PLDP), and the West Africa Agricultural Productivity Program (WAAPP): (a) The Agricultural Markets and Agribusiness Development Project (PDMAS, P083609, ongoing, IDA US$ 35 million) aims at increasing non-traditional agricultural exports and revenues for project beneficiaries. The PDMAS is based on the supply chain approach, and the use of public-private partnerships. The Project involves the integration of family-farms and small-scale enterprises into farm-to-market value chains in ways that enhance the competitiveness of the entire supply chain. The Project focuses on strengthening selected export and domestic food chains by improving the business environment for vendor integration, upgrading the technology, and integrating production and marketing processes. While the PSAOP supports producer organizations and provides them with basic farm management services, the PDMAS works with more advanced producers and enterprises, as well as with exporters' associations. Overall Implementation Progress: Satisfactory (04 June 2009); Progress towards achievement of PDO: Satisfactory (04 June 2009). (b) The Participatory Local Development Project (PLDP, P088656, ongoing, IDA US$ 50 million) is a follow-up of both the National Rural Infrastructure Project (PNIR) and the Social Development Fund Project (PFDS). The PLDP supports the Government's decentralization and local development agenda. The Project allocates resources to local governments and poor communities to improve the provision of social and economic infrastructures, as well as for productive and income-generating activities. The Project provides small grants to community- based and producer organizations for technical assistance in the design and implementation of productive, income-generating, and natural resource management activities identified through participatory approaches, following key strategic local development objectives spelled out in local development plans. The implementation of this project is closely linked to the PSAOP in that both projects intervene in the same areas (all 320 rural councils). Overall Implementation Progress: Moderately Satisfactory (30 June 2009); Progress towards achievement of PDO: Satisfactory (30 June 2009). (c) The West Africa Agricultural Productivity Program (WAAPP, P094084, ongoing, IDA US$ 15 million) aims at generating and disseminating improved technologies in the participating countries' top priority areas that are aligned with the region's top priorities as identified by West and central African Council for Agricultural Research and Development (WECARD). The WAAPP is based on pillar 4 (Agricultural Research and Technologies Dissemination and Adoption) of NEPAD's CAADP for growth in agricultural GDP. The beneficiaries of the Program are consumers in the region, particularly those affected by extreme poverty, and agricultural producers and agribusiness, as user of the improved technologies. The 28 key participants are researchers, extension agencies, and universities in generation and dissemination of technology that is directly supported by the WAAPP. By evidence, the WAAPP complements the PSAOP and the SLM in the support to the agricultural services (national agricultural research and extension systems) and producers for generating and disseminating improved technologies. Overall implementation Progress: Satisfactory (25 June 2009); Progress towards achievement of PDO: Satisfactory (25 June 2009). 2. The proposed operation would strategically complement the Bank's rural portfolio in Senegal, and increase the impact of the Bank's rural investments in the country, as it will provide an additional instrument to specifically address land degradation and mainstream sustainable land management in the sector. 3. Finally, this operation will benefit from the results of the ongoing World Bank's (1) AFR Regional Implications of Climate Change (P108965, ongoing), and (2) Global Study on Territorial Development and Adaptation to Climate Change (P112517, ongoing, TFESSD), which will provide detailed information on the capacity of local institutions, including those targeted by the proposed operation, to adapt to the effects of climate change. B. Projects funded by other Development Partners 4. Projects funded by other Development Partners include: (a) UNDP/GEF Groundnut Basin Soil Management and Regeneration Project (Projet de Gestion et Restauration des Terres dégradées du Bassin Arachidier, PROGERT, ongoing, total budget: US$ 14 million, with contributions from GEF and UNDP of US$ 3.6 and 4 million, respectively) is a five year Project complementing on-going initiatives to address land degradation in the Groundnut Basin, focusing in particular on introducing and up-scaling innovative sustainable land management technologies and practices (i.e. agro-sylvo-pastoral technologies to intensify production and methods to rehabilitate degraded soils), favoring partnerships among local populations (Grassroots Community Organizations), and promoting income-generating activities. The Project works in five local units (and selected communities) within the Groundnut Basin, covering a total surface area of 46.67 sq. km. (b) Program for Integrated Soil and Water Management (PGIES): This Program was prepared by the Government (Ministry of Agriculture) in 2005. The program aims at increasing agricultural production and soil and water management in the Groundnut Basin and Casamance. The components of the PGIES are: (a) Strengthening communities' capacity in soil and water management; (b) restoration and intensification of agro-sylvo-pastoral systems; (c) improvement of the enabling environment; and (d) coordination, management, monitoring and evaluation. Four demonstration sites (i.e. wildlife migration corridors) are chosen to test land use planning models: (a) The Wildlife and Sylvo-pastoral Reserves in the Ferlo Steppe; (b) the Niokolo-Koba National Park and its associated Classified Forests in the South-East Sudanin-Guinean zone; (c) the Niayes coastal dunes and classified reserves along the northern sea front; and (d) the Saloum Delta National Park and associated classified forests and mangrove/marine 29 systems in the South-eastern coastal area. The cost of the Program was estimated in 2004 at 17.5 billion FCFA (about US$ 32.8 million). UNDP, in partnership with GEF and within the framework of the GEF-SIP, is committed to supporting implementation of the Program over a 10 year period. A first phase, which focused on strengthening the enabling environment, has been completed. A second phase (US$ 7.279 million, with contributions from GEF and UNDP of US$ 3.640 and 1.251 million, respectively) is currently under implementation. (c) UNDP's Innovation in Micro-Irrigation for Dryland Farmers Project (under preparation, total budget: US$ 1.9 million, with a contribution from GEF of US$ 0.9 million). This operation, one of the two operations developed under the GEF-SIP together with the World Bank GEF-SLM Project, aims at supporting communities in dryland areas to improve their management of water resources. More specifically this operation would: (a) pilot innovative water management practices, particularly small-scale dryland irrigation systems, in the Bakel Region; and (b) support communities in adopting integrated land use planning. In addition, this operation would also contribute to strengthening SLM knowledge management system by conducting a diagnosis of Senegal's small-scale irrigation sector (including barriers to technology transfer); developing a database of small-scale irrigation practices; and compiling baseline information on natural resources in the pilot sites. These activities would provide important information for the development of the SLM investment framework, which the World Bank SLM Project supports. As operations under the GEF-SIP, the World Bank SLM Project and the UNDP Innovation in Micro-Irrigation for Dryland Farmers Project use a similar approach, but are geographically complementary. The two operations use some of the same indicators (i.e. area under SLM), but the World Bank SLM Project focuses on the Groundnut Basin, while the UNDP's operation will be implemented in the Bakel Region, situated in the Senegal River Valley. (d) UNDP/GEF Integrated Ecosystem Management in Four Representative Landscapes of Senegal - Phase 2 (ongoing, total budget: US$ 11.4 million, with a contribution from the GEF of US$ 3.6 million): This project, one of those under the GEF-SIP, aims at preventing and reducing environmental degradation in four major ecosystems in the country (i.e. the Wildlife and Sylvo-pastoral Reserves in the Ferlo Steppe; the Niokolo- Koba National Park and its associated Classified Forests in the South-East Sudanin- Guinean zone; the Niayes coastal dunes and classified reserves along the Northern sea front; and the Saloum Delta National Park and associated classified forests and mangrove/marine systems in the South-eastern coastal area) by promoting sustainable use of natural resources through community-based integrated ecosystem management. (e) Israeli Embassy - TIPA (under preparation, total budget: US$ 400,000). Within the framework of PSAOP2 and PDMAS, the Bank is developing a partnership initiative with the Israeli Embassy to support the scale-up of the TIPA irrigation system. This system adapts well to smallholders' community production systems while contributing to sustainable land and water management. 5. In addition, USAID and JICA have recently started a dialogue with the Government for the preparation of an Agricultural Productivity and Natural Resource Management (about US$ 20 million, under preparation) and of a Land Restoration operation, respectively. Swiss Cooperation and French Cooperation continue to support some activities linked to PSAOP. 30 6. The proposed operation not only complements other DPs' existing and planned investments, but due to the cross-sectoral coordination mechanism for SLM that this operation supports (Component D), it also helps strengthen coordination and enhance harmonization of approaches among these interventions. 31 Annex 3: Results framework and monitoring SENEGAL: Sustainable Land Management Project A. Results Framework PDO/GEO Project Outcome Indicators Use of Project Outcome Information Contribute to the reduction of land · To assess the scope of SLM degradation and the improvement of · Increase percentage of land with SLM adoption in the areas targeted ecosystem functions and services in the practices in the Target Areas by the Project Target Areas by adopting sustainable land management practices through the provision · Increase percentage of organic matter · To assess the impact of the of support to the Recipient's research and in the soil in the Target Areas adoption of SLM on the fertility agricultural and rural consultation system and of the soil in pilot sites to producer organizations Intermediate Outcomes Intermediate Outcome Indicators Use of Intermediate Outcome Monitoring A. Support to the Agricultural Research System15 SLM technological innovations are · At least 3 new technologies have been · To measure the performance of developed tested and proven successful by the end of the Project research services on SLM B. Strengthening Agricultural Advisory Services16 · SLM activities are integrated into the annual work plan of the Rural · To assess the Rural Advisory SLM services are accessible to producers Advisory Agency in 30 Rural Agency's capacity to provide Councils within the project target area advisory services on SLM by the end of the Project C. Support to Producer Organizations17 · 30 project proposals submitted by · To measure the degree of SLM practices are adopted Producer Organizations to implement SLM technologies are implemented adoption of SLM technologies by the end of the Project by producers D. Support to Sectoral Coordination18 · To measure the capacity of SLM is mainstreamed across sectors · An SLM Investment Framework is prepared by the end of the project planning and cross-sectoral coordination 15This component delivers on the SIP IR 4. 16This component delivers on SIP IR 3. 17This component delivers on SIP IRs 1 and 2. 18This component delivers on SIP IRs 2 and 4. 32 B. Arrangements for results monitoring 1. The PSAOP2 Monitoring and Evaluation (M&E) system will be updated for the purposes of the SLM project in order to verify progress against the objectively verifiable indicators described in the results framework. The system will build on and integrate with the M&E systems established and used by the PSAOP. The project M&E system, managed by the TFCU, will be linked to the M&E system of the components, and will deliver consolidated monitoring information on project activities and progress. The system will collate and process information collected from the components as well as additional data derived from special studies and participatory M&E exercises. The M&E system is web-based and participatory. The M&E system established by the PSAOP will ultimately become the M&E system for the whole agriculture sector and will be used for the monitoring a part of the DSRP-II. 2. As in PSAOP, the M&E system is comprised of two elements: (a) Financial monitoring, which allows to track the resources used to carry out the activities of the Project. It will indicate the budgeted costs for planned activities and completed activities as well as the real costs of completed activities. Financial monitoring will allow monitoring the financial performance of the Project. (b) Technical and physical monitoring, to evaluate progress on indicators identified in the PTBA. 3. The overall performance of each component will be assessed combining information from the financial and technical monitoring components. 4. The total organic matter content of the soil will be measured at the end of the rainy season. The technique to measure organic matter is through total carbon content (organic matter content equals carbon content multiplied by 1.72). The measurements will be undertaken by the ISRA which has experience conducting these tests. 5. The tests are relatively easy to analyze. The M&E system will be measuring yields; production and vegetation cover in order to show possible improvements. This information is expected to be useful when preparing the ICR. Given the project's short three year duration, however, it will not be directly accountable for improved yields and vegetation cover. This is due to the fact that these indicators may take longer than three years to show consistent improvement, and a number of factors outside of this project's scope can influence them. Baseline values for vegetation cover in the areas targeted by the project are reported in Fig. 3.1. 6. An impact evaluation will be undertaken to assess the impact of SLM practices. Surveys will be conducted at the start of the project and at least once a year according to the framework defined in the monitoring matrix during the assessment/planification workshops. The impact surveys will be done together with PSAOP. The PSAOP already established food security and poverty level baselines for each of the agro-ecologic zones. The PSAOP baseline study integrates several sets of data related to the ecosystems but it is important to do more in-depth studies of the ecosystems in order to propose relevant indicators for the M&E of the GDT. The data generated will then be integrated in the agricultural sector information system and the country's CDMT. Monitoring and evaluation specialists in each implementing agency will report the results of the surveys to PSAOP, which will be responsible for compiling all data and disseminating results. 33 7. The Coordination Unit is responsible for the overall monitoring of the Project. It will improve the information and communication system to ensure collection and transmission of technical and economic information produced by the Project. 34 y gn ataD INP, INP rtio sponsibiliteR for llectionoC ISRA TFCU, TFCU, Rep tièream dein and a pact pact Dat llectionoC Im surveys Im surveys laed Instruments n etermdeb atio will Collection yc rts ) ) form area Data ual Repo nn Yearly anstr Frequen (A ressgopr rtso ual nn rep Yearly (A ressgopr rtso rep and et targeted 3 % % % % % % % % % stioneG: each YR 230. 20 20 20 20 20 20 20 20 00 fors 20 value 2 % % % % % % % % % M.,e YR 220. 10 10 10 10 10 10 10 10 Sèn Specific M.,am 1 % YR 200. %5 %5 %5 %5 %5 %5 %5 %5 houK,.Ae et ian ISRA-CILSS-CTA). rg ue % % % % % % % % % Ta val 230. 35 20 20 20 20 20 20 20 20 Bad( A).tnenopm esluaV 08 1945.s (Co 20 pui ectj etgr ni de 19 Ta %20. %0 %0 %0 %0 %0 %0 %0 %0 gal Basint nu Sénéua Proethfo1 year monitoring e e ssab int ena ueqso ss néesem ou results Djo lae har M dan ueqso har undorGeth nguei seline Delay Fim wanee lae M dan ak nguei ni for tto Mew obajDot Delay Fim Ba uba Niak Nga Latm M uba Ni Nga Latm esu eshcreh No To Not To val rec carriedeb de t t ager will nu nu auxv atht rn Basint und rn Basint rn Basint und rn Basint ave to tra ies rthe nu des Arrangements No of undorG Grolatr nu nu nu Basin heut rthe Basin heut So Cen undorG No undorG Grolatr So Cen undorG fersre stude nthèse value Sy Table inil selinabeth C. ome s organic %)( nique: land Baseline Outct of soeth of targetni in areas SLM )%( 19 orga ughroth Indicator easer easer Projec Inc matter target Inc with practices areas · · fory noi ectl dna dna AR dna PNI gn ODEB and rtio Cola ISRA ANC sponsibiliteR TFCU TFCU TFCU Dat ASPR CUFT Rep and e e e e a Dat llectionoC tinu tinu tinu tinu Ro Ro Ro Ro Instruments Collection Data dnay s ) ) ) ) ual lyr lyr ual nceuqerF nn rtso terlyr rtso terlyr rtso nn rtso Report Yearly ressgo ressgo ressgo ressgo (A pr rep uarte Qua (Q pr rep uarte Qua (Q pr rep Yearly (A pr rep 3 de 3 YR 30 30 SIF and develop approved 2 0 YR 12 20 SIF approved es luaV 1 de 0 6 etgr YR 10 SIF 36 develop Ta d et de rg ue nate 3 30 30 Ta val mi SIF and sse develop approved di and seline 0 0 0 non- Ba pedo SIF existent vel de Servicesy of are SLM on end onsti been Advisor eth ryo eth Project in tionsazi end si)F ent torsa the the nati al the cators Indic vaonni (SIk have by toin Advis with ulf ewor atedr raluR cils ofdne gan ybd Or emplmiot by oject Coordi al Preht Indi ome ome calgiolo ittemb entedm ccessus Agriculturg tegni the unoC the Fram ple of by ral are oducerrP su onsi ctor ofd sals Se Outct technologies plan Ru to zatni to ntemt Outc w eara imera eneht techn M ne3 proven gthenin ities 30 ort oporp ort ves work in garO In byd Projec diate and target SL Stren activ cy ectj Project least Project Supp Supp en D. 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An app Interme · · · · 9 8 51, 9 Hectares 220,2 5303, 3702, 49 27 ,53925 ,59558 2005, 13 ,44311 65,964 ,40251 5,8277 ,47681 ,67862 ,12701 ,48517 722, 1,984 eppestd anna s eppetsbu odeowdnabu nna savy va a bb nna shru sadedo an d savan s cropdef hr-s hr-s do do savyb asslan to ed wootn anna ster se sav land foy ov grp ils yd gr soe bo arean rub Quarriesn Classes Rain Pseu Pseu Sh oodw ee ood Ope Tr W llerag am latsfdime tera ba Man Sw Salin Bar W Ur Ope 2009) February e, (Baselin 37 Project the by targeted areas in )9002( cover ueqigo EcoliviuS Vegetation- de 3.1 renteC : urce Figure So Table 3.1 - Examples of SLM practices (technologies and approaches) SLM practices Land/water mgt technologies Land/water mgt approaches Agronomic and vegetative Structural measures Land use regimes measures Intercropping Terraces and other physical Watershed plans Agro-forestry in crop or measures (e.g. soil bunds, Community land use plans grazing systems stone bunds, bench terraces, Grazing agreements, closures, Afforestation and reforestation etc.) etc. Mulching and crop residue Flood control and drainage Other measures (e.g. rock Crop rotation catchments' water harvesting, Fallowing cutoff drains, vegetative Low till waterways, stone-paved Composting/green manure waterways, flood water Integrated pest management diversion, etc.) Vegetative strip cover Water harvesting, runoff management, and small-scale Contour planting irrigation (shallow wells/ Re-vegetation of rangelands boreholes, micro ponds, Integrated crop-livestock underground cisterns, systems percolation pits, ponds, spring Woodlots development, roof water Alternatives to woodfuel harvesting, river bed dams, Sand dune stabilization stream diversion weir, farm dam, tie ridges, inter-row Other water harvesting, half-moon structures, etc.) Gully control measures (e.g. stone checkdams, brushwood checkdams, gully cut/reshaping and filling, gully revegetation, etc) Other 38 Annex 4: Detailed project description SENEGAL: Sustainable Land Management Project A. Project description 1. Project development objective. The objective of the Project is to contribute to the reduction of land degradation and the improvement of ecosystem functions and services in the Target Areas by adopting sustainable land management practices through the provision of support to the Recipient's research and agricultural and rural consultation system and to producer organizations. 2. Geographical location. Project activities will focus on the Groundnut Basin, and more precisely will target the departments and rural communities listed in Table 4.1, but may include other rural communities approved by the Bank. The map below shows the areas targeted by the Project. Figure 4.1 - Areas targeted by the Project Source: Centre de Suivi Ecologique (2009) 39 Table 4.1 - Project location: Communities targeted by the Project, and form, severity and causes of degradation Zone/Department Rural Community Form and severity of Causes of degradation degradation · Strong water erosion · Deforestation/Strong pressure on Northern Notto Djobass forest resources Groundnut Basin · Low fertility · Continuous cropping/No fallow (Louga, Kébémer, · No fallow/Low use of organic Tivaouane · Severe low fertility matter/Industrial pollution Departments) Mewane · Strong wind erosion · Deforestation/Strong pressure on agro-sylvo-pastoral resources · Severe low fertility · Continuous cropping/No Dealy fallow/Low use of organic matter Central Groundnut · Medium/Strong wind · Deforestation/Strong pressure on Basin (Thiés, erosion agro-sylvo-pastoral resources Diourbel, Goassas, · No fallow/Lack of use of organic Nord Fatick) · Severe low fertility Touba Mosquee matter and fertilizer · Medium/Strong wind · Deforestation/Strong pressure on erosion agro-sylvo-pastoral resources · Severe low fertility · No fallow/Lack of use of organic matter and fertilizer Fimela · Medium/Strong · Destruction of mangroves and salinization strong pressure on agro-sylvo- pastoral resources · No fallow/Lack of use of organic · Severe low fertility matter and fertilizer · Strong pressure on agro-sylvo- Niakhar pastoral resources Southern · The upstream ascent of salt water as Groundnut Basin · Medium/Strong salinization a result of anthropic pressure on (Kaolack, Sud agro-sylvo-pastoral resources Fatick, Kaffrine) · Severe low fertility · No fallow and lack of use of organic Nganda matter and fertilizer · Strong water erosion · Deforestation/Strong pressure on agro-sylvo-pastoral resources · No fallow and lack of use of organic · Severe low fertility matter and fertilizer Latmingue · Overgrazing · Salinization · Upstream ascent of salted water · Strong water erosion · Deforestation/Strong pressure on agro-sylvo-pastoral resources 40 3. About 20,000 ha are expected to be converted to SLM. 4. The decision to focus on the seed producing areas of the Groundnut Basin is based on the following considerations: (a) Severity of degradation: The Groundnut Basin is one of the areas in Senegal where land degradation is more severe, mainly because of inappropriate cropping practices; (b) Population density and potential for agricultural production: It is the area with the highest population density and where most of the country's agricultural production is concentrated (approximately two-thirds of total production). Where quality production is practiced, integrated good agricultural practices that include SLM practices could be certified. This could be incorporated as a quality parameter in the labeling of products derived from sustainable agriculture; (c) Synergies with PSAOP2: It is an area where the World Bank is already operating through the WB/IDA Agricultural Services and Producer Organizations Project 2 (PSAOP2). Synergies between the two Projects are therefore expected. 5. Project approach. The proposed operation would contribute to the above-described objectives by: (a) Strengthening some key elements of the enabling environment for SLM scale-up at national and local levels (e.g. strengthening cross-sectoral coordination mechanisms and institutional capacity for SLM; and strengthening the capacity of main agricultural research institutions to generate and disseminate SLM applied research and knowledge); and (b) Supporting the adoption of SLM technologies and practices in selected priority areas, i.e. the producing areas of the Groundnut Basin, e.g. by strengthening the capacity of producer organizations to adopt SLM measures; setting-up financial/incentive mechanisms to facilitate the adoption of SLM; and supporting agricultural service providers in delivering SLM opportunities and providing adequate technical backstopping. Considering that the yet uncertain effects of climate change may undermine the gains made from SLM investments, special attention will be given to risks associated with climate change and to design adaptation measures. To this end, the World Bank study on territorial development and adaptation to climate change will provide some information on the capacity of local institutions, including those targeted by the proposed operation, to adapt to the effects of climate change. 6. Lessons learned and reflected in the project design. The design of this operation reflects: (a) lessons learned in implementing projects in Senegal, particularly PSAOP; (b) lessons learned in implementing SLM operations in Africa; and (c) findings and recommendations of the recently completed Senegal Country Environmental Analysis and of three analytical works on SLM (these are: `Diagnostic Report on Land Degradation and Sustainable Land Management in Senegal', `Land Management Options Plan', and `Review Public Expenditure in Land and Environment Management'). Main lessons learnt reflected in the project design include: (a) Need to integrate enabling activities with on-the-ground investments: The findings of the SENEGAL CEA highlight the importance of improving an enabling environment (i.e. rectify perverse incentives, build institutional capacity, mainstream SLM in sectoral policies, etc.) to scale-up SLM. Lessons from past experiences suggest however that enabling activities are not sufficient alone, and need to be accompanied by on-the-ground 41 investments. If successful, on-the-ground activities have a great impact on beneficiaries' motivation, and usually generate positive momentum for rapid up-scaling of SLM practices. The proposed operation will therefore support both activities aimed at improving the enabling environment for SLM and on-the-ground investments that could generate quick wins. (b) Improvement of cross-sectoral coordination is critical to scale-up SLM: One of the conclusions of the Senegal CEA is that, in order to scale-up SLM, it is critical to improve coordination among stakeholders and agencies. To improve coordination, avoid duplication of efforts, and better target and prioritize interventions, the Senegal CEA recommends development of a National Investment Framework for Sustainable Land Management (Cadre National d'Investissement en Gestion Durable des Terres). This framework would help to: (i) set objectives as well as thematic and geographic priorities and investment needs; (ii) prioritize and cost them; and (iii) identify and select the most appropriate mechanisms to achieve them, thus facilitating alignment and harmonization of SLM interventions. The proposed operation will specifically support cross-sectoral coordination mechanisms (e.g. through the establishment of a multi-stakeholder SLM Platform), and provide technical and financial support to develop the National Investment Framework for SLM. (c) POs are key drivers to foster changes and ensure sustainability: PSAOP1 showed that institutional reforms and the development of new relationships between clients and service providers can be fostered if producers are empowered and able to contribute to the services they need. Demand-driven services become relevant, efficient, and accountable thanks to producer empowerment that builds the demand side. PSAOP2 is deepening this approach by channeling more financial resources through producer organizations to increase accountability and client-orientation of agricultural services. Focus on strengthening the capacity of POs will remain a central element of the proposed operation. (d) Need to shift the focus from commodity production to land productivity in the agricultural sector: In the 1990s, the Government invested, with the support of several DPs, about US$ 1 billion in agricultural and livestock development and rural water supply. Interventions however focused mainly on commodity production and intensification rather than on sustainable management of land resources and productivity. The impact and long-term sustainability of these interventions was therefore limited. SLM needs to better be integrated in the agricultural sector. B. Project components 7. As integrated (partially blended) to the PSAOP2, the activities proposed in this operation are organized along the four components of PSAOP2. Each component would be incremental to and/or complement the respective PSAOP2 component. 42 I. Component A - Support to the Agricultural Research System (US$ 0.6 million) 8. In PSAOP2, this component seeks to increase the capacity of the National Agricultural Research System (NARS). The GEF-supported Project would be used to strengthen the capacity of ISRA to specifically generate and disseminate SLM-targeted research and knowledge. More specifically, this component would: A.1 Support the implementation of demand-driven SLM research and development (R&D) activities (US$ 0.27 million). These R&D activities should (i) derive from a diagnostic done by producer' organizations, (ii) be composed of Package of SLM practices, (iii) cover at least a terroir. The eligibility mechanism for SLM R&D activities will be detailed in the Project Implementation Manual. Activities in this sub-component will mainly focus on providing technical and financial support to the development of R&D activities. R&D activities are demand-driven, short-term research activities aimed at quickly responding to the needs expressed by beneficiaries within a specific local or regional context. R&D activities would focus on addressing issues of land degradation and low soil productivity, e.g. soil protection and restoration technologies, soil and water conservation technologies, agro-forestry technologies, and rehabilitation of salted soils (ref. Table 4.2). For component A, and in contrast to differently PSAOP2, the proposed operation will support R&D only, and not strategic and applied research programs. This choice was made on the basis of two considerations: First, there is already a sufficient level of knowledge on SLM technologies. Producers and land users do not demand the generation of new technologies, but information on the conditions under which existing technologies can be applied. Second, the relatively short three year duration of the project would likely be insufficient for applied research programs to produce results, considering the time needed for selecting and financing applied research programs under the competitive mechanism of FNRAA. These R&D activities will be assessed by the FNRAA Scientific and Technical Committee, and validated by the Steering Committee of NARS (Comité de Pilotage du SNRASP), the institutional entity responsible for decision-making and scientific and financial management (through FNRAA) of the national research system. Members of the two Committees will also be involved in the monitoring and evaluation of the R&D activities on SLM. The sub-component will finance the operating costs of the R&D activities, particularly (small) equipment and supplies, the wages of short-term contract workers (for the life of the R&D activities), and travel costs of experts, technical assistance and consultancy services, and the costs related to monitoring and evaluation of the R&D activities. Large construction projects, the acquisition of major equipment, training programs leading to a diploma, and salaries of permanent staff are ineligible. 43 Table 4.2 - Possible Research and Development Activities Zone/Department Form and severity of Identified R&D activities degradation · Water erosion Northern Groundnut Basin · Production of ramial chipped wood (Louga, Kébémer, · Low fertility · Use of peanut shells Tivaouane Departments) · Reclamation of quarries with tree plantations · Wind erosion · Production of ramial chipped wood · Use of peanut shells Central Groundnut Basin · Low fertility (Thiès, Diourbel, Goassas, · Fish residues Nord Fatick) · Types of adapted crop rotations · Wind erosion · Water erosion Southern Groundnut Basin (Kaolack, Sud Fatick, · Low fertility · Ramial chipped wood Kaffrine) · Salinization · Mechanical land reclamation A.2 Finance baseline studies (US$ 0.10 million). Activities in this sub-component would include collection of baseline information on: (i) The bio-physical characteristics of the project sites (including vegetation cover, soil quality, carbon sequestration, extent and severity of degradation, area of land under SLM, agricultural productivity, and global environmental benefits, e.g. name and extension of ecosystem of global significance that will benefit from project intervention); and (ii) socio-economic characteristics (e.g. size and composition of the population, population density, household incomes, etc.). All information will be geo-referenced. Information collected will be used for M&E and provided to the SLM Knowledge Base (ref. Component D1). The component will finance the purchase of the necessary equipment (e.g. GPS, hypsometer, computer software) and travel costs (fuel and per diem) to carry out the studies. A.3 Strengthen the capacity of ISRA to generate, disseminate and monitor SLM- targeted research and knowledge (US$ 0.23 million). The sub-component will finance vehicles, supplies and equipment (including maintenance), technical assistance and studies, training, and participation in research networks and workshops, etc., to strengthen the capacity of ISRA and other research institutions to carry out their tasks, including monitoring and evaluation of the R&D. 9. The implementation of this component will be coordinated by the Senegalese Agricultural Research Institute (Institut Sénégalais de Recherche Agricole, ISRA), and would involve other research institutions, e.g. the Food Technology Institute (Institut de Technologie Alimentaire, ITA), the National Soil Science Institute (Institut National de Pédologie, INP), the Research and Development Institute (Institut de Recherche et Développement, IRD), the Agricultural Research Center for Agricultural Development (Centre de Coopération Internationale en Recherche Agronomique pour le Développement, CIRAD); various university centers, e.g. Université Cheikh Anta Diop (UCAD), Laboratoire d'Etudes et de Recherches Géophysique (LERG), 44 Centre de Suivi Ecologique, (CSE) Université de Thiès; and other rural development partners, e.g. Direction des Eaux, Forêts, Chasse et Conservation des Sols, ANCAR, ASPRODED, etc., according to their specific mandate and comparative advantage. II. Component B - Strengthening Agricultural Advisory Services (US$ 0.7 million) 10. In PSAOP2, this component is aimed at supporting the extension of the agricultural advisory system and the consolidation of a pluralistic network of service providers. The GEF-supported Project would complement these interventions by: (a) strengthening the capacity of the agricultural extension system to specifically deliver SLM packages and provide adequate technical backstopping on SLM to farmers; and (b) supporting the actual delivery of SLM packages to producers through the agricultural extension system. This component comprises two sub-components: B.1 Strengthening the capacity of the agricultural extension system in SLM (US$ 0.27 million). This sub-component aims at strengthening the capacity of ANCAR, farmer intermediaries, and service providers to deliver SLM packages and provide adequate technical backstopping on SLM. Main activities of this sub-component would include the development and delivery of a training program on SLM technologies and practices; integration of SLM approaches in existing farmer production systems, land use planning, etc. to service providers. The training program will be elaborated in consultation with other technical partners, including la Direction des Eaux et Forêts, l'Institut National de Pédologie, l'ISRA, etc. The Agricultural and Rural Technological Information System (Système d'Information Technologique Agricole et Rurale, SITAR), under development under the PSAOP2, will be used in the training activities as a training tool and as a source of technical and statistical information and data. B.2 Delivering SLM packages (US$ 0.43 million). This sub-component aims at developing and delivering demand-driven, customer-tailored SLM advisory programs through the agricultural extension system. Main activities of this sub- component would include: (i) The creation of a database on SLM technologies and practices, and conditions for their applicability; (ii) farmers' sensitization and awareness creation activities; (iii) activities aiming at disseminating SLM technologies and sharing lessons/best practices, including set-up of demonstration sites, organization of field trips, farmer-to-farmer exchange events, SLM fairs, and specific training events; and (iv) provision of technical support and backstopping on SLM. 11. This component would finance vehicles; supplies and equipment (including maintenance); technical assistance; trainings; workshops; study-tours and production and dissemination of informative material on SLM best practices and technologies; and costs necessary to set up demonstration sites. 12. ANCAR will be responsible for the implementation of this component. ANCAR will work in partnership with public service providers (decentralized departments, and regional rural development companies), private service providers, research institutions (e.g. ISRA, IRD), and public and private training institutions. 45 III. Component C - Support to Producer Organizations (US$ 2.8 million) 13. Producer organizations are the main channel of access to the program's resources. As a result, their inclusiveness and their effectiveness are key factors in ensuring that producers really benefit from the program. In PSAOP2, this component is aimed at strengthening the capacity of producer organizations (POs) to access technical and economic services, and participate in policy formulation. The GEF-supported Project would provide additional resources to: (a) improve the awareness of POs on SLM and strengthen the capacity of their members to integrate SLM in their production systems; (b) strengthen the capacity of POs' leaders and local political leaders to integrate SLM in the formulation of sectoral policies and local development plans; and (c) facilitate the adoption and replication of SLM on-the-ground. This component is comprised of three sub-components: C.1 Strengthening the capacity of POs to integrate SLM in their production systems (US$ 0.4 million). This sub-component will help mobilize POs and strengthen their capacity to integrate SLM in their production systems. Main activities of this sub- component would include: (i) training and other capacity building activities (e.g. workshops, animation activities, study tours, etc.) to Producer Organizations' Local Consultation Fora (Cadre Local de Consultation des Organisations de Producteurs, CLCOPs), and cooperatives on SLM; (ii) advocacy and other communication and awareness raising activities (e.g. developing and disseminating information material: posters, radio and audiovisual products, etc.) targeting the rural population about SLM, and how to get access to available resources and services; and (iii) training and other capacity building activities for the staff of ASPRODEB to enable them to provide adequate support to POs. C.2 Strengthening the capacity of POs' leaders and of local political leaders to integrate SLM in the formulation of sectoral policies and in local development plans (US$ 0.3 million). This component will finance training and other capacity building activities to POs' leaders and local representatives to improve their awareness on SLM and strengthen their capacity to integrate SLM in the formulation of local development plans and sectoral policies (e.g. formulate proposals and negotiate with other rural development actors). C.3 Supporting the adoption of SLM practices (US$ 2.1 million). This sub-component will provide financial resources to implement SLM sub-projects (ref. Table 4.3). CLCOPs, and cooperatives identify suitable POs20 that could present proposals to adopt SLM practices. With the technical support of ISRA, INP, and ANCAR, the identified Producer Organizations prepare the proposals. The proposals are assessed and approved by local assemblies (rural councils). To be selected, the proposals for SLM sub-projects should satisfy the following eligibility criteria: (i) the SLM sub- project shall be implemented by a Producer Organization; (ii) the SLM sub-project shall not fall within any of the negative list of ineligible activities set forth in the Project Implementation Manual, including without limitation activities that would adversely affect forest areas and/or natural habitats; (iii) the sub-grants will support activities promoting SLM in the Target Area. The selected proposals are financed 20To be selected, POs should satisfy the eligibility criteria defined in the Project Implementing Manual, i.e. (i) to be a legal entity pursuant to the law; (ii) to be constituted at least with twenty members; (iii) to be a member of CLOP. 46 through this sub-component. ASPRODEB will sign a contract with the selected POs. The producer organizations will implement their activities in close collaboration with other institutions, including ANCAR, ISRA, and local governments. The component will finance the operating costs of the SLM sub-projects, particularly (small) equipment and supplies, and the wages of short-term contract workers (for the life of the sub-project). This sub-component will in addition cover the costs ASPRODEB will bear to implement this activity (e.g. travel costs of staff, technical assistance and consultancy services, and the costs related to monitoring and evaluation of the sub- projects). 14. Producers and producer organizations are the main beneficiaries of this component, as both direct beneficiaries of the activities and actors in implementing the proposed activities. Consistent with PSAOP, the approach of this component will be based on: (i) accountability of producers, their organizations, and their leaders in defining and implementing the activities; and (ii) strong partnership between POs and local governments (particularly rural councils). 15. ASPRODEB will be responsible for the implementation of this component. IV. Component D - Support to Sectoral Coordination (US$ 0.7 million) 16. In PSAOP2, this component is aimed at strengthening the capacity of sectoral ministries (e.g. Agriculture and Livestock) in policy formulation, planning, coordination, monitoring and evaluation. The GEF-supported Project would be used to strengthen the enabling conditions to allow the Government to move towards a more cross-sectoral and programmatic approach to SLM, and to support incremental costs of project management. This component comprises two sub-components: D.1 Strengthening cross-sectoral coordination (US$ 0.6 million). This sub-component aims at improving cross-sectoral coordination in the SLM sector with the objective of improving the efficiency and effectiveness of SLM activities in the country, and ultimately better integrates SLM in the development plans of Senegal. An expected outcome is an increased budget allocation to SLM activities in the Government's Medium-Term Expenditure Framework. Main activities within this sub-component include: (i) The institutionalization of the (already existing) SLM Committee (Groupe Fonctionnel GDT) as a national multi-sectoral forum in charge of promoting, coordinating and overseeing the development and implementation of SLM activities in the country. This would involve the development of detailed Terms of Reference (ToRs), organization, coordination mechanisms, budget, work plan, etc. and capacity building activities for its members (including training and participation in regional workshops and other knowledge sharing events). It is expected that by the end of the Project the SLM Committee will be formally established by decree. (ii) The formulation and adoption of a National SLM Investment Framework (Cadre National d'Investissement en Gestion Durable des Terres). This framework would help: (a) set objectives as well as thematic and geographic priorities and investment needs; (b) prioritize and cost them; and (c) identify and select the most appropriate mechanisms to achieve them, thus facilitating alignment and harmonization of SLM interventions. This would involve studies and other activities 47 necessary to the formulation and validation of the SLM Investment Framework, i.e. stocktaking, diagnostics, consultative and validation workshops, etc. (iii) The development of a Knowledge Base on SLM, i.e. a national database collecting key information concerning SLM technologies and approaches (the WOCAT methodology is proposed) and other SLM geo-referenced data and information (e.g. extension and severity of land degradation, soil fertility, vegetation cover, land use and land use change, etc.), including the data collected during the preparation of the SLM Investment Framework. This sub-component would finance operational costs associated with the establishment of an SLM Platform (technical assistance and consultancy services, workshops, etc.), the activities included in the SLM Platform's annual work program (e.g. advocacy and communication activities, training and technical assistance, retreats, workshops, organization and/or participation in regional workshops and other knowledge sharing events, reporting to the UNCCD, etc.), the studies and activities necessary for the formulation and validation of the SLM Investment Framework (technical assistance and consultancy services, workshops), and the costs necessary for the establishment of a database (e.g. equipment and software, purchase of maps, etc.), including training to build the capacity in database management. D.2 Technical and fiduciary coordination and M&E (US$ 0.1 million). As per PSAOP, day-to-day coordination of the Project will be handled by the Technical and Fiduciary Coordination Unit (TFCU) housed at the Ministry of Agriculture. Specific functions are detailed in Annex 6. This sub-component will support incremental operational costs of the team responsible for coordinating and monitoring the overall activities of the Project. 17. INP will be responsible for the implementation of sub-component D1, while the Technical and Fiduciary Coordination Unit will be responsible for the implementation of component D2. 48 ge)a and ganic ues, soil soil la ons sidues,er rale min sidues,er mineral sidues,er drain of inor resid organic of ts miner soluti ion crop crop crop quesi of tion and and crop tiona tiona and quesi of tiona artion of tiona tiona of erost of and planety ainment, SLM pipes ns ationt echnt( sowing, iion) regenral organic( ationt nica ationt organic( (organic amendment zat cling regenerl regenerl echnt( mangroves/reaffo- haloph half agai of, org, lingcycer, regenerl regenel lingcycer, regenerl regenerl lingcycer, (cont of mese es, ces Possible lin dikes fen afforesree ilirtef natura recy ces practices pratcices fen afforesree psum natura natura ces natura natura ces natura natura with sch practices ation liz fen afforesree practices ation liz fen practices, ation liz Gabions Stone Small Live Villag Good preparation neralim Assisted Good fertilizer, composting) Windbreaks Live Villag Assisted Assisted Good preparation ferti composting) Windbreaks Live Villag Assisted Assisted Good ferti composting) Windbreaks Live Assisted Assisted Good ferti composting) Restoration restation Phosphogy Irrigation · · · · · · · · · · · · · · · · · · · · · · · · · · · · - - - rest ro w ro ro no fonoeru ag Lo ag ag ong wol cni on w/ol on rettamcniag on rettamcniag strd al or ati fal ga fal an es adrg de pressgn No ng/ orfo noti essurerp No essurerp orfo essurerp orfo use lluop cesru ng/ cesru use cesru use ovrg past-ovl ong ong ong of Stro ppiocr w al Str/n reso Str/n reso ofk reso ofk man -syor Lo stri ppiocr rettamc Str/n ag uses du oral oral Lac oral Lac ofn Ca station/reo ces ousuni w/ol on fal statioer past ousuni ganiro statioer past w/ol statioer past w/ol ctio ces vo-l vo-l vo-l fal reu Def sourer ontC No matter/In foeD of sy ontC use foeD fal fertilizerd sy No an foeD fertilizerd sy No an strueD press sourer 49 · · · · · · · · · · of g g g no verity n se ati wlo wlo wlo ad water no ndiw wlo onrtS/ onrtS/ onrtS/ fertility and ong relye no ong relye degr umdie noisoer noisoer izatio Str erosi Low Sev fertility Str erosi Sev fertility M ndiw relye umdie Sev fertility M ndiw relye umdie Sev fertility M salin Form interventions · · · · · · · · · · e SLM la ssab ena ueqso munity Djo lae M Rur tto Mew Dealy Fim Com uba Possible- No To , 4.3 ts)ne Basint , tment nsiaBtun Table nd ourG r,em tm Basint Goassas nu dnu Fatick bé und oun Sud ne/DeparoZ Ké pareDe rn hert a,gu an oua Grolatr Diourbel,, Fatick) Grnreth lack, ne) fri No (Lo Tiv Cen (Thiés Nord Sou (Kao Kaf ge)a of of rale residues) cling tiesie min sidues,er drain duction restation pro opcrfo omposting,c( cyer, var tiona and crop icer of ainment, ieset tiona ting, lingc ion tiona tices rotation ion on/reaffo vari erost erost ted ap regenerl ationt organic( adl lingcycer, (cont rati amendment resto speciesety recy, pipes dre" ns ationt pipes ns ationt mese icer regenerl omposc( ca regenerl pracla nure,am half agai ltur sch of half agai antinglp natura wel afforesree psum tation en es) practices ation antinglp apted natura es, natura es, ke ad shells ro ces practices lin shells ces ofe liz haloph ofe fen afforesree agricu residu lin dyll fen afforesree Ridge Us Assisted Villag Good ferti composting) Mangroves with Phosphogy Irrigation Ridge Us Peanut Assisted Good manure, Gabions Stone "Diguettes Live Villag Peanut Assisted Good production crop Gabions Stone Sma Live Villag · · · · · · · · · · · · · · · · · · · · · · · · · · rettamcniag la a - - ro as astor cni ro ag cni ag -p agro- ga on ga er on water on orfo -sylvo salt reu orfo orfo wat ro of essurerp essurerp use ag press cesru usefo cesru usefo salted cesru ofk on ong of ong ascent reso ilizer Str/n reso ilizer Str/n reso Lac ropich oral fert oral fert w/ol essurerp ackldna ackldna ant ascent oral ces of past wol and past wol and past fal fertilizerd upstream ong vo-l fal statioer ream statioer No an Str sourer The result sy No tteram foeD vo-l fal sy No tteram grazingr Ove Upst foeD vo-l 50 sy · · · · · · · · · y y g ilit ilit wlo onrtS/ fert fert n n low water relye umdie izatio ree no low water ong ree izatio no ong Sev fertility M salin Sev Str erosi Sev Salin Str erosi · · · · · · · har dan nguei Niak Nga Latm Annex 5: Project costs SENEGAL: Sustainable Land Management Project Project Cost By Component and/or Activity Local Foreign Total US$ million US$ million US$ million A. Support to Agricultural Research System 0.30 0.30 0.60 B. Strengthening Agricultural Advisory Services 0.30 0.40 0.70 C. Support to Producer Organizations 2.10 0.70 2.80 D. Support to Sectoral Coordination 0.30 0.40 0.70 Total Baseline Cost 3.00 1.80 4.80 Total Project Costs1 3.00 1.80 4.80 Total Financing Required 3.00 1.80 4.80 1Identifiable taxes and duties are US$m 0.41, and the total project cost, net of taxes, is US$m 4.39. Therefore, the share of project cost net of taxes is 91.45 percent. 51 Annex 6: Implementation arrangements SENEGAL: Sustainable Land Management Project A. Partnership arrangements 1. Coordination with UNDP under the GEF-SIP. The proposed operation is one of two operations developed under the GEF-SIP in Senegal, together with the UNDP's Innovation in Micro-Irrigation for Dryland Farmers Project. The two operations will use the same approach and will be strongly coordinated with one another. Both would focus on improving the enabling environment for SLM adoption. They would however target two different geographical areas of the country: The proposed operation would focus on the Groundnut Basin, while UNDP's operation will be implemented in the Bakel Region, situated in the Senegal River Valley. 2. Partnership with IFAD. PSAOP2 is co-financed by the International Fund for Agricultural Development (IFAD). IFAD contributes to PSAOP2 with a loan of US$ 6.0 million. IFAD has been closely involved in definition of the content of PSAOP2, from preparation to negotiations. IFAD funds are pooled into the Project's designated account. IFAD also plays a role in the learning processes of PSAOP by testing, in the context of its other projects in Senegal, a number of pro-poor approaches that can both benefit from and feed into the institutional reform process through flexible mechanisms, including exchange visits and thematic workshops. 3. Coordination with other DPs' initiatives. USAID and JICA have recently started a dialogue with the Government for the preparation of an Agricultural Productivity and of a Land Restoration operation, respectively. The cross-sectoral coordination mechanism for SLM that this operation supports (Component D) will ensure coordination with these two proposed operations. French Cooperation continues to support some activities linked to PSAOP. In particular, French Cooperation supports the professional evolution of POs through its Project `Promotion of Competitive and Sustainable Agriculture' (PACD). 4. Partnership with Israeli Embassy. Within the framework of PSAOP2 and PDMAS, the Bank is developing a partnership initiative with the Israeli Embassy to support the scale-up of the TIPA irrigation system. TIPA is well adapted to smallholders' community production systems while contributing to sustainable land and water management. B. Institutional and implementation arrangements 5. Institutional set-up and implementation arrangements. The operation will adopt the same institutional framework and the same implementation arrangements as PSAOP2, which include: (a) a Steering Committee; (b) a Technical and Fiduciary Coordination Unit; and (c) one implementing agency per component or sub-component. (a) Steering Committee (Comité de Pilotage; the same for PSAOP221): This includes representatives of the implementing agencies, representatives of POs, and representatives of the Ministries in charge of agriculture, livestock, environment, economy and finance, fisheries, local government, women and social development, and scientific research. It is 21INP will be included as an observer. 52 responsible for: (i) approving the work program and consolidated budget, and (ii) assessing project performance. (b) Technical and Fiduciary Coordination Unit (Unité de Coordination Technique et Fiduciaire - UCTF): This unit is responsible for: (i) monitoring the overall implementation of the Project; (ii) promoting and facilitating the exchange of information and cooperation between implementing agencies; (iii) preparing quarterly progress reports by consolidating the components' reports; (iv) consolidating, supervising, and monitoring the procurement plans prepared by the different components; (v) managing the designated account, in liaison with the Direction de la Dette et de l'Investissement (DDI) of the Ministry of Finance; (vi) supporting the components as needed; and (vii) liaising regularly with the World Bank. The Coordination Unit is located at the Ministry of Agriculture. (c) Implementing agency per component or sub-component: (i) Component A - Support to the Agricultural Research System: This will be implemented by ISRA. (ii) Component B - Strengthening Agricultural Advisory Services: This will be implemented by ANCAR (whose legal status is a Société à participation publique minoritaire). (iii) Component C - Support to Producer Organizations: This will be implemented by ASPRODEB (an NGO which represents 19 national federations of producers). (iv) Component D - Support to Sectoral Coordination: This will be implemented by: (i) The National Institute of Pedology (Institut National de Pédologie, INP), which reports to the Ministry in charge of Agriculture, for the sub-component D1 (Sectoral Coordination); and (ii) the Technical and Fiduciary Coordination Unit for the sub- component D2 (Technical and Fiduciary Coordination). 6. The only difference with respect to PSAOP2 is the addition of the INP, which will play a key role in coordinating the activities aimed at strengthening cross-sectoral coordination mechanisms and building a national coalition for SLM (Component D). 53 Annex 7: Financial management and disbursement arrangements SENEGAL: Sustainable Land Management Project 1. As part of the preparation phase of the Sustainable Land Management Project a financial management assessment was carried out in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective of the assessment was to determine whether the implementing entity TFCU has acceptable financial management arrangements, which will ensure that: (a) funds are used only for the intended purposes in an efficient and economic way, (b) the preparation of accurate, reliable and timely periodic financial reports, and (c) the entities' assets are safeguarded. A. Summary of implementation and financial management arrangements 2. Implementation arrangements. The operation will adopt the same institutional framework and implementation arrangements as PSAOP2 which include: (a) a Steering Committee; (b) a Technical and Fiduciary Coordination Unit; and (c) one implementing agency per component or sub-component (ref. Annex 6). The only difference with PSAOP2 is the addition of INP, which will play a key role in coordinating the activities aiming at strengthening cross-sectoral coordination mechanisms and building a national coalition for SLM (Component D). 3. Financial management. The Ministry of Agriculture will expand the financial arrangement to the TFCU to manage the financial arrangement of this project. The staff and the auditor will be recruited in a competitive basis, while the system of information installed in the TFCU and the manual of procedures elaborated will be updated. For the sub component: Supporting the adoption of SLM practices, ASPRODEB manages its funds directly through a management services contract. This contract is signed between ASPRODEB and the TFCU. Funds are withdrawn from the designated account or from the credit (in the case of the proposed project, the grant) following the disbursement and financial management provisions of the management services contract. The other implementing agencies send their funding requests to the TFCU. Each implementing agency has its own financial and accounting system in place, certified by an independent auditor. Procedures concerning coordination, implementation, management, monitoring and evaluation, procurement, and administration are detailed in the Project Implementation Manual (PIM). B. Country Accountability Issues 4. The Country Financial Accountability Assessment (CFAA) of Senegal was conducted in 2003. Since that exercise, the Government has created an Executive Secretariat under the Ministry of Economy and Finance to monitor the implementation of the CFAA action plan. The Heavily Indebted Poor Country (HIPC) Assessment and Action Plan by the Bank and the IMF was prepared in November 2004. 54 C. Assessment of risks 5. The CFAA of Senegal was conducted in 2003. The overall risk rating of the public financial management system was high. Since that exercise, the Government has created an Executive Secretariat under the Ministry of Economy and Finance to monitor the implementation of the CFAA action plan. The HIPC Country Assessment and Action Plan by the Bank and the IMF in November 2004 showed significant improvements in the areas of public expenditure tracking, notably internal control and budget preparation which was the priority area defined in the PRSP. However, significant progress is still needed in internal and external controls of budget execution and state-owned enterprises. 6. The Government has given priority to improvements in these areas as well as local governance finance reforms. A Multi-Donor Trust Fund (MDTF) was set up to follow up on implementation of the reforms. A new Procurement Code has been adopted and entered in force in January 2008. A PEFA exercise has been undertaken in 2007, and the report concluded that there has been some improvement in PFM reform implementation, additional improvements are still necessary in areas such as: (i) effectiveness of the internal audit system by the SAI (Cour des Comptes); (ii) reliability of data for monitoring the stock of arrears; and (iii) addressing the backlog of State accounts. In dialogue with external partners, the Government will implement the action plan resulting from the last Public Expenditure and Financial Assessment (PEFA) framework to track progress in strengthening public financial management and identify areas where country fiduciary systems are not yet in line with international standards. 7. The Government is committed to conduct the Public Financial Management (PFM) reform through the creation of a specific body the PFM Reform Steering Committee under the Ministry of Finance, with representation by all Government departments responsible for specific reforms. The role of the Steering Committee is to: (a) Coordinate the reforms to be undertaken; (b) harmonize Government actions; (c) monitor the implementation of the action plan; and (d) hold different actors accountable for progress. 8. The use of country systems, notably the Treasury Department and the Cour des Comptes, will be implemented progressively. In the meantime, implementation of Project will be coordinated by TFCU under the Directorate for Agriculture (DA) of the Minister of Agriculture (MA). Table 7.1 - Summary of Risk Analysis and Mitigation Measures Risk Risk Risk Mitigation Measure Conditiona Rating of Rating lity residual risk I. Inherent Risks: Substantial Moderate 1. Country: Despite substantial The MA will expand the financial improvements of the arrangement to the TFCU to manage the legal and regulatory financial arrangement of this project. The framework, some Substantial Staff and the auditor will be recruited in a No Moderate provisions affect the competitive basis, the system of information transparency of the installed in the TFCU and the manual of system. procedures elaborated will be updated. 55 2. Entity Levels: Low capacity of MA to The Project will be implemented by TFCU, implement and monitor and the Bank will pay a special attention the Project. Substantial during the supervision mission to the Moderate adequacy of the financial management system for Project implementation. 3. Project level: Implementation depends The Project is not complex even if it is not only on TFCU, but intended to involve several implementing on activities of agencies but they already have experience in participating entities, Moderate the management of World Bank-supported Moderate not all of which have projects. strong capacity. II. Control Risks: Moderate Low 1. Accounting: An administrative and The manual and the existing software will be accounting manual of update in order to take in account the procedures has been specificities of the new project and the Bank developed and provides will organize a workshop on the Bank FM, all the required details Disbursement and Procurement Procedures on accounting and for the staff of TFCU. financial procedures. However this manual Moderate None Low does not take in account the new project. The financial management is computerized. However knowledge of Bank FM and disbursement procedures is still weak. 2. Budget Execution Annual budget are Moderate Annual work plans will be prepared and Low regularly prepared but submitted to the Bank by November 30 of approved late. each year. 3. Internal Control The internal control is The Bank will pay attention to the weak, and doesn't effectiveness of the internal control system operate effectively to during supervision missions and the review ensure proper of the annual audit reports as well the authorization of Moderate auditor's management letter. In addition, the Moderate expenditures in Administrative and Financial Procedures accordance with budget Manual will give a clear description of the and proper authorization approval and authorization processes. of payment 56 4. External Audit Lack of strong system An external auditor with qualification and of external audit. experience satisfactory to the World Bank External control by the will conduct an annual audit of the Project's "Cour des Comptes" is financial statements. This audit should be not yet effective carried out in accordance with International Substantial Standards on Auditing (ISA), and will Yes Moderate include such tests and controls as the auditor considers necessary under the circumstances. The external audit firm will be selected under a competitive basis and TORs acceptable to the Bank. 5. Funds Flow Risk of mingling funds A Separate Designated Account (DA) will with those of other Moderate be opened in a commercial bank by the DDI Yes Low projects and will finance activities of the Project. 6. Reporting The reporting system is The TFCU will prepare quarterly IFRs not consistent in the project in format and substance acceptable to MA Moderate the Bank and Annual Financial Statements None Low of the project in comply with International Accounting Standards Overall Risk Moderate Moderate 9. In view of the general country financial management issues and the issues peculiar to the Project, the overall financial management risk rating for this project is Moderate D. Strengths and Weaknesses 10. Strengths. The financial management capacity built in the TFCU under the PSAOP2 will be consolidated and used to manage the Financial Management System of the SLM Project. Under the WAAPP also implemented by the TFCU of the PSAOP, an Accountant with strong experience in accountability will be recruited in a competitive basis and will reinforce the Financial Department. He or she will receive training on World Bank procedures. 57 Table 7.2 - Weaknesses Weaknesses Action Responsible Body Completion Date (a) No specific Update existing information system software TOMPRO to TFCU By effectiveness for the Project host the Project. (b) No specific Update the PSAOP information in the Financial and PSAOP financial and Administrative TFCU By effectiveness Administrative Manual to conform Manual for the project with the GEF financed project Prepare TOR for External Auditor TFCU By negotiation (c) Absence of an satisfactory to the External Auditor Bank. First quarter after Appointment of the TFCU effectiveness auditor. E. Financial and management arrangements 11. Staffing arrangements. The existing staff of the TFCU (one Financial Management Specialist and one Accountant), soon strengthened by an experienced Accountant recruited on a competitive basis under the West African Agricultural Productivity Program (WAAPP), will manage the funds of this operation. The existing staff has relevant experience in accounting, auditing, disbursement and financial management procedures of the Bank. 12. Accounting policies and procedures. The current accounting standards in use in Senegal for on-going Bank-financed projects will be applicable. SYSCOHADA is the assigned accounting system in West African Francophone countries. The Grant will be accounted by the Project on a cash or accrual basis. This system will be documented with appropriate records and procedures to track commitments and to safeguard assets. Accounting records will be maintained in local currency (FCFA). The Chart of Accounts will facilitate the preparation of relevant quarterly and financial statements including information on the total project expenditures, the financial contribution from IDA and other Donors and expenditure by component/category. The existing Financial and Administrative Manual describes the budgeting process. The Financial team will finalize the Entity Action Plan and Budget, which will be submitted to a steering committee for approval. Also, a `no objection' of the Bank will be required before implementation the annual action plan. 13. Accounting software. The existing Information System in the TFCU allows production of all accounting and financial data required: Financial Statements, Bank Reconciliation Statements, all the books of accounts and all financial reports including the Interim un-audited Financial Reports (IFR). Accounting procedures are documented in the existing Financial and Accounting Manual. 14. Internal audit and internal control. The existing Administrative and Financial Manual of PSAOP2 provides a description of the approval and authorization processes. The Bank will pay attention to the adequacy of internal control during supervision mission. At the national level, 58 the Direction de la Dette et de 1'Investissement (DDI) controls ex ante all expenditures and withdrawal applications before sending them to the Bank. 15. External audit. External auditors with experience and qualifications satisfactory to the Bank will conduct an annual audit of the Project's financial statements. This audit should be carried out in accordance with International Standards on Auditing (ISA), and will include such tests and controls, as the auditor considers necessary under the circumstances. Besides expressing an opinion on the Project's financial statements in accordance with ISA, the auditors will be expected to prepare report on internal controls, management letters giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the Financing Agreement of the Bank. The audit report and opinions on the financial statements including the management letter and management response shall be submitted to IDA within six months of the end of the Senegal fiscal year. Since the auditor for the PSAOP2 has been appointed, this auditor could also audit the financial statements of the SLM Project. The Recipient will elaborate ToRs acceptable to the Bank for the appointment of the auditor. The table below summarizes the auditing requirements under the Project. Audit report Entity Due Date Project's financial statements TFCU June 30 Financial Statements ASPRODEB June 30 16. All audit reports will be submitted to the Bank within six months after December 31 each year. 17. Reporting and monitoring. The TFCU will prepare and provide to the World Bank a quarterly un-audited Interim Financial Report (IFR), in form and substance satisfactory to the World Bank. The report will: (a) set forth sources and uses of funds for the Project, both cumulatively and for the period covered by said report, showing separately funds provided under the Grant, and explain variances between the actual and planned uses of such funds; and (b) describe use of funds by activity/components, both cumulatively and for the period covered by said report, and explain variances between the actual and planned Project implementation. 18. The TFCU will produce Annual Financial Statements for these statements which comply with International Accounting Standards (IAS) and World Bank requirements. The Financial Statements22 will consist of: (a) a Statement of Sources and Uses of Funds; (b) a Statement of Commitments; and (c) Accounting Policies Adopted and Explanatory Notes; 22It should be noted that the project financial statements should be all inclusive and cover all sources and uses of funds and not only those provided through World Bank funding. They thus reflect all program activities, financing, and expenditures, including funds from other development partners. 59 (d) A Management Assertion that Project funds have been expended for the intended purposes as specified in the relevant Grant agreements. 19. The first IFR shall be furnished to the Association not later than 30 days after the end of the first calendar quarter after the Effectiveness Date. It shall cover the period from the incurrence of the first expenditure under the Project through the end of such first calendar quarter; thereafter, each IFR shall be furnished to the Association not later than 30 days after each subsequent calendar quarter, and shall cover such calendar quarter. Formats for the IFR and financial statements will be defined before negotiations and will be attached to the disbursement letter. 20. The TFCU will also be required to produce, no later than June 30 of the following fiscal year, audited annual financial statements. These financial statements will be subject to periodic audits (see paragraph on audits). 21. ASPRODEB will also produce and submit to the TFCU, in a quarterly basis a technical and financial report. F. Disbursement and flow of funds arrangements 22. Disbursements will be made in accordance with procedures outlined in the Disbursement Handbook for World Bank Clients. The proceeds of the grant will be disbursed over a four year period or less depending on the implementation speed. On Project closure, a period of four (4) months grace period after the closing date, as agreed with the Bank, will be allowed to complete processing of disbursements for eligible expenditures incurred up to and until the closing date of the grant. The figure below shows the flow of funds and information. 60 Figure 7.1 - Flow of Funds and Information World Bank GEF DDI GRANT ACCOUNT TREASURY CHECK (Washington) (Dakar - Senegal) DDI / UCTF DESIGNATED ACCOUNT (Comercial Bank - Dakar) Technical and Financial Report IMPLEMENTING AGENCY ACCOUNT (ASPRODEB) (Commercial Bank - Dakar) SUPLIERS OF GOODS AND SERVICES / BENFICIARY Legend: Payment Direct Payment Replenishment Application (SOE: statement of expenditures) Technical and Financial Report Treasury check in contribution to VAT 23. The disbursement methods (Statement of Expenditures (SOE), reimbursement and direct payment) will be used. All replenishment or reimbursement applications will be submitted monthly. All replenishment or reimbursement applications will be fully documented except for contracts under the prior review threshold to be determined during the procurement assessment. SOE documentation will be retained at the TFCU for review by Bank staff and auditors. 24. A separate Designated Account (DA) in FCFA will be opened in a commercial bank on terms and condition acceptable to the Bank. This Account will be managed by the director of DDI in coordination with the TFCU. The DA will be used for all payments financed by the grant as indicated in the specific terms and condition of the Grant Agreement. Transaction- supporting documentation for SOE will be retained and kept in a safe place by the TFCU, which has the primary responsibility for maintaining all documentation. The Disbursement 61 Letter, which will form an integral part of the Grant Agreement, will provide details of the disbursement methods, required documentation, DA ceiling and minimum application size. These will also be discussed and agreed during negotiations of the Grant Agreement. 25. ASPRODEB will bear to implement the sub-component: Supporting the adoption of SLM practices. ASPRODEB, manage their funds directly through a management services contract. This contract is signed between ASPRODEB and the TFCU. The first advance to ASPRODEB will be subject to the disbursement and financial management provisions of the management services contract. The others advances are withdrawn from the designated account following the submission by ASPODEB of a technical and financial report. Table 7.3 - Allocation of Grant Proceeds by Component Components Amount Allocated Percentage of Expenditures to be (Expressed in US$) financed (inclusive of taxes) A. Support to the Agricultural 600,000 100 % Research System B. Strengthening Agricultural 700,000 100 % Advisory Services C. Support to Producer 2,800,000 100 % Organizations D. Support to Sectoral Coordination 700,000 100 % Total 4,800,000 G. Loan condition and other financial covenants 26. Effectiveness conditions. The following effectiveness conditions are required: (a) the Recipient has revised the Financial and Accounting Procedures Manual and the Project Implementation Manual for the purposes of the Project, in a manner satisfactory to the World Bank; (b) the Recipient has revised the PSAOP II Arrêté to expand the role of the TFCU and the Steering Committee for the purposes of the Project; (c) the TOMPRO software has been updated for the purposes of the Project; (d) the Recipient shall have entered into the Subsidiary Agreement with ASPRODEB and into agreements, in form and substance acceptable to the World Bank, with ISRA, ANCAR, and INP for the implementation of the Project. H. Supervision Plan 27. Supervision of the financial management arrangements will be risk based.In this regard, in view of the overall financial management residual risk ratedfor the project, the financial system will be reviewed and assessed and the supervision strategy will be two-site supervisions will be complemented by desk review of the quarterly IFRs submitted to IDA at the end of each calendar quarter. In addition, the FM will annually also review the audited project annual financial statements and the auditor's report and management letter thereon. 62 Annex 8: Procurement arrangements SENEGAL: Sustainable Land Management Project A. General 1. Procurement in the context of the country. Following the Government's approval of the 2003 CPAR action plan, the Government adopted in 2007 a new Procurement Code (decree n° 2007-545 dated April 25th, 2007) which complies with the WAEMU Procurement Directives and best international practices. In accordance with this code: (i) A Public Procurement Directorate was created in 2007 (decree N° 2007-547 dated April 25, 2007) for controlling procurement transactions of any public contracting authority; and (ii) a Public Procurement Regulatory Authority (Autorité de Régulation des Marchés Publics - ARMP) was set up in 2007 (decree n° 2007-546 dated April 25, 2007) for handling policies, complaints, and audits. These two entities are operational. In addition, the Government has prepared main national bidding documents and is in the process of validating and adopting them. There is no major deviation of the national Code from the Bank's Guidelines, but to allow a full application of the provisions of the World Bank's procurement and selection and employment guidelines, IDA will provide to the Recipient the list of national procurement clauses that are partially or wholly inconsistent with World Bank guidelines. B. Applicable guidelines 2. Procurement for the proposed Project would be carried out in accordance with the World Bank's "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 and revised in October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised in October 2006, and the provisions stipulated in the Legal 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 Recipient and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 3. Procurement documents. Procurement will be carried out using the World Bank's Standard Bidding Documents (SBDs) or Standard Request for Proposal (RFP), respectively, for all ICB for goods and works and recruitment of consultants. For National Competitive Bidding (NCB), while waiting for the Government and the Bank to respectively validate and give the `no objection' to the national bidding documents in preparation, the Recipient will use the World Bank's SBD for ICB for goods and works, and the Bank's RFP for recruitment of consultants. In the same vein, the Sample Form of Evaluation Reports developed by the World Bank, will be used until the new national samples are reviewed and cleared as satisfactory to the Bank. 4. Procurement methods. General Procurement Notices (GPN), Specific Procurement Notices (SPN), Requests for Expression of Interest, and results of the evaluation and contracts award should be published in accordance with advertising provisions in the following guidelines: "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 and revised by 63 October 2006; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 and revised in October 2006. 5. Procurement of Goods. Goods procured under this Project would include, but not be limited to, the acquisition of computer hardware, office supplies, equipment, and vehicles. The procurement would be done using the Bank's SBD for all ICB and National SBD agreed with or satisfactory to the Bank. 6. Selection of Consultants. Activities needing selection of consultants include, but are not limited to, the update of the Information System for Monitoring & Evaluation, dissemination of competences and technical transfers for Sustainable Land Management in relevant areas, and cartography of targeted areas. Shortlists 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. 7. Training, Workshops, Study Tours, and Conferences. The training (including training material and support), workshops, conference attendance and study tours, will be carried out on the basis of approved annual training or activities plans. A detailed training or workshop plan indicating the objectives of the training/workshop, number of trainees/participants, duration, staff months, timing, and estimated costs will be submitted to IDA for review and approval prior to initiating the process. The appropriate methods of selection will be derived from the detailed schedule. After the training, the beneficiaries will be requested to submit a brief report indicating what skill have been acquired and how these skills will contribute to enhance his/her performance and contribute to the attainment of the project objective. 8. The procurement procedures and SBDs to be used for each procurement method, as well as model contracts for works and goods procured, are presented in the Project Implementation Manual. C. Assessment of the agency's capacity to implement procurement 9. An assessment of the capacity of the procurement staff within the INP and the TFCU was conducted during the period November 14-19, 2008. The assessment reviewed the organizational structure of the INP and the interaction between the project staff responsible for procurement. The objective of the assessment was to update the previous procurement assessment conducted in November 2005 and determine whether the implementing entity (TFCU) continues to offer an acceptable arrangement in line with Bank procedures. Based on the experience with the current PSAOP2 and WAAP projects' implementation, adequate capacity exists within the UCTF (Unité de Coordination Technique et Fiduciaire) for procurement reporting requirements. The TFCU team is well versed in the IDA procedures and has handled satisfactorily the procurement under previous and ongoing IDA programs. 10. The key issues and risks concerning procurement for implementation of the Project have been identified and include lack of capacity and insufficient experience of the procurement officer of INP, as well as in procurement and World Bank procedures. The corrective measures which have been agreed are: (i) closer support of the INP procurement officer by the procurement specialist of TFCU who will be designated to provide quality control on all procurement issues including those who are not subject to prior approval by the World Bank; and (ii) training in World Bank procedures for the INP staff involved in procurement. 64 11. The overall project risk for procurement is moderate. D. Procurement Plan 12. The Recipient, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed between the Recipient and the Project Team in February 2009 and is available from the TFCU. It will also be available in the Project's database and on the Bank's external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. E. Frequency of Procurement Supervision 13. In addition to the prior review supervision to be carried out from the Bank's Senegal office, the capacity assessment of the Implementing Agency has recommended supervision missions every six months to visit the field to carry out ex post review of procurement actions. F. Details of the Procurement Arrangements Involving International Competition I. Goods, Works, and Non Consulting Services (a) List of contract packages to be procured following NCB, Quotation and direct contracting: 1 2 3 4 5 6 7 8 9 Ref. Contract Estimated Procurement P-Q Domestic Review Expected Comments No. (Description) Cost Method Preference by Bank Bid- (yes/no) (Prior/ Opening Post) Date 01 Vehicles and 117,600 AON NO NO POST 27/02/09 motorcycles 02 Office supplies 211,466 AON NO NO POST 30/01/09 and computer hardware, digital camera, video projector and accessories 03 Office 11,620 QUOTA- NO NO POST 30/01/09 fourniture TION (b) ICB contracts estimated to cost above US$ 500,000 per contract and all direct contracting will be subject to prior review by the Bank. 65 II. Consulting Services (a) List of consulting assignments with short list of international firms. 1 2 3 4 5 6 7 Ref. Description of Assignment Estimated Selection Review Expected Comments No. Cost Method by Bank Proposals (Prior/Post) Submission Date 01 Setting the parameters of 1,100 Direct PRIOR 30/01/09 TFCU accounting software contracting 02 Updating monitoring and 13,400 Direct PRIOR 30/01/09 Technical evaluation information system contracting and Fiduciary coordination subcompo- nent (D2): TFCU 03 Selection of an auditor of the 19,500 QCBS PRIOR 30/03/09 TFCU accounts for duration of Project 04 Development of SLM/CIS 75,000 QCBS POST 30/05/09 Sectoral coordination sub- component (D1) 05 Mapping of intervention areas 40,000 IC POST 30/03/09 D1 06 Support to identifying public and 14,420 QCBS POST 30/02/09 D1 private services providers 07 Development of training plan on 38,460 QCBS POST 30/06/09 D1 SLM practices and techniques 08 Support to dissemination and 14,4230 QCBS POST 30/08/09 D1 transfer of appropriate SLM techniques and practices in each area and for type of degradation 09 Capitalization of SLM experiences 3,360 QCBS POST 30/07/09 D1 10 Production of a manual of 2,884 IC POST 30/04/09 ASPRODEB standards adapted to SLM 11 Development of training modules 1,730 IC POST 30/03/09 ASPRODEB 12 Monitoring of training 7,000 IC POST 30/11/09 ASPRODEB 13 Identification and listings of SLM 24,000 IC POST 30/07/09 D1 practices and techniques (b) Consultancy services estimated to cost above US$ 200,000 per contract and single source selection of consultants will be subject to prior review by the Bank. (c) Short lists composed entirely of national consultants: 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. 66 Annex 9: Economic and financial analysis SENEGAL: Sustainable Land Management Project 1. This operation aims at increasing the productivity of land resources in the Senegal Groundnut Basin by promoting the use of sustainable land management technologies and practices among farmers. This economic and financial analysis assesses whether the investment of this operation is economically and financially profitable. The same approach and methodology used to assess the economic and financial soundness of PSAOP2 is used to assess the economic and financial soundness of this operation in the sub-agro-ecological zones in the Senegal Groundnut Basin (ref. Table 9.1). A. Economic analysis and financial analysis: Assumptions and methodology 2. Economic analysis (ref. Tables 9.2 and 9.3): A cost-benefit approach is used for the economic analysis. The analysis compares the additional investment and recurrent costs for farmers in adopting new technologies with expected benefits. The analysis assesses trends in the cost and benefit parameters "with" and "without" the Project. The profits resulting from the project come from the increase in agricultural yields and cultivated land achieved by introducing the technologies proposed in the Project. The estimated production levels in the "with project" (ref. Table 9.3) scenario are the increase in cultivated land and yield induced by Project as compared to "without Project" levels (ref. Table 9.2). Through research and extension efforts the Project will make available new/improved SLM technologies to farmers. This will result in an increase in cultivated areas and output. Thus, the Project impacts on production levels (or real production) are driven by the estimated SLM technologies adoption rate patterns. The impacts are only effective with farmers adopting new technologies. The probability of a farmer adopting SLM technologies is estimated on the basis of the complexity and feasibility of the technology proposed and the farmer's experience and willingness. The incremental production is, thus, the sum of improved production levels due to increase in land and yield induced by SLM technologies adopters. Three different types of costs are considered: SLM "public investments" (in the collective agricultural support sector and producer organizations), "private investments" (individual investment in agricultural equipment to maximize available opportunities) and "additional costs of production" caused by the adoption of new technologies. Economic prices are considered in this assessment and are obtained by adjusting observed distortions in financial prices (taxes, export duties, etc.). Three sub-agro-ecological zones in the Groundnut Basin (i.e. North, Center and South) are chosen to assess incremental production over years with and without project. The key assumption made is that the technology adoption rate would vary between 20 and 45 percent, depending on the zones and crop under the technologies used. 3. Financial analysis: For the financial analysis, a "with" and "without" assessment (ref. Table 9.4) was made on the basis of the standard farm model and cultivated crops within each of the three above-mentioned sub-agro-ecological zones (ref. Table 9.1). For each farm model/agricultural crop, the rates of change in land area, yield and production over the fifteen last years (1994-2008) at the department and regional level were calculated. The "without project" scenario is developed using the current fluctuating trends in land area and average yields. The "with project" scenario takes into account the option for improving yields and 67 cultivated land with the support of project components, using an estimated technology adoption rate. B. Results 4. The results of the analysis show the economic and financial soundness of the project. 5. Economic analysis: Under the above-described assumptions, the economic assessment shows the economic viability of the SLM operation from the perspective of the national economy. The economic Internal Rate of Return (IRR) calculated from the project is 35 percent, with a Net Present Value (NPV) of FCFA 1,772,090,620.15 billion (US$ 3.5 million) over the three years of the operation, with an assumed capital opportunity cost of 20 percent. The IRR would be 93 percent, with a NVP of FCFA 19 billion (US$ 38 million) for the horizon 2009- 2013. The Project profitability (ref. Table 9.5) appears sensitive to decrease in targeted yields (switching value of -5 percent), to the rate of adoption (-10 percent), and extremely sensitive to decrease in market prices (-3 percent). 6. Financial analysis: The financial analysis shows an IRR of 27 percent over the opportunity cost of capital estimated at 20 percent and farmer NVP of FCFA 49,091,067 million (US$ 98,000) (ref. Table 9.4). Table 9.1: Standard type of farm by targeted sub-zone in the Peanut Basin of Senegal Sub-zones Administrative Household Districts average cultivated Type of crops Average cultivated area area by crop North of Peanut LOUGA Peanut 3 ha Basin (NPB) KEBEMER 5 ha Millet 1.5 ha TIVAOUNE Cowpeas 0.5 ha Center of Peanut THIES Peanut 2 ha Basin (CPB) DIOURBEL Millet/sorghum 1.7 ha GOSSAS 4 ha Cowpeas 0.15 ha NORD FATICK Cassava 0.15 ha South of Peanut KAOLACK Peanut 2.5 ha Basin (SPB) KAFFRINE Millet 1 ha SUD FATICK 4.5 ha Upland Rice 0.25 ha Maize 0.25 ha Cowpeas 0.50 ha Cassava 0.10 ha Sources: PIGES (2007) ; ISRA/CNBA ( 2008) 68 eldiy a) 8940, 1901, 1001, 9460, 9920, 0661, 1521, 1391, 5880, 9291, 6312, 4881, 5551, 6381, 8481, 8321, 6721, 7091, 7401, 7601, (t/h 0 3 7 e 341 189 151 108 089 274 106 709 784 71 46 481 252 438 08 986 025 780 395 381 oducti on (t) Maiz 35 42 42 25 20 23 30 33 24 Pr 126 157 66 75 85 100 94 84 87 90 91 549 444 320 535 246 835 140 608 167 675 842 686 396 153 150 846 246 358 951 910 a) Areas (h 39 35 38 26 20 21 26 29 42 65 59 44 48 52 54 51 50 51 51 51 cultivated eldiy a) (t/h 6281, 9841, 7471, 0471, 7771, 7801, 4761, 3421, 1591, 8560, 5360, 0741, 9930, 9240, 8770, 8810, 9500, 9250, 9110, 9090, 8022 5423 4866 810 1273 5814 0391 3121 3021 0361 387 0171 989 923 855 817 920 900 883 875 (t) Rice Production a) 7211 7851 7133 774 7601 5742 704 978 1231 2101 722 947 996 0001 975 928 969 974 969 963 Areas (h cultivated eldiy a) (t/h 5092, 1803, 6402, 3362, 9534, 5852, 8884, 9614, 6773, 5723, 4703, 1134, 9593, 7583, 7743, 8153, 8843, 8383, 8143, 8253, 9 3 8 4 3 5 4 6 1 5 5 3 6 1 915 515 985 564 608 117 85 89 29 44 63 91 11 66 96 05 79 93 48 85 (t) 76 55 36 46 65 42 132 137 107 109 111 120 118 113 114 116 116 115 115 115 Production Cassava 659 457 011 937 247 294 179 794 184 643 175 395 838 247 460 423 072 208 282 289 a) Areas (h 30 17 14 19 13 16 27 27 29 30 32 29 29 30 30 30 30 30 30 30 cultivated eldiy a) (t/h 3290, 4490, 1780, 1770, 3230, 3400, 3120, 3270, 0940, 2350, 0530, 2040, 1830, 1540, 1660, 1520, 1720, 1650, 1620, 1630, Project 69 089 465 477 855 462 184 956 840 360 238 594 029 640 683 906 663 025 793 024 eap (t) 27 38 13 19 35 49 37 27 11 31 7928 25 23 20 22 20 22 22 21 22 Cow Production 4 8 2 6 1 4 7 1 6 2 8 1 6 4 8 1 308 592 772 05 73 70 84 057 42 97 80 42 13 35 93 73 11 45 91 03 Management a) Areas (h 82 85 75 112 109 144 121 85 121 132 165 125 126 134 136 137 132 133 134 135 cultivated Land eldiy a) (t/h 5740, 7560, 6390, 5060, 5530, 5490, 6920, 5820, 5160, 7270, 4000, 5830, 5620, 5570, 5660, 5340, 5600, 5560, 5550, 5540, 6 3 6 0 3 4 1 8 6 2 9 4 4 8 8 2 6 6 6 4 69 57 98 16 41 16 60 79 32 80 05 40 29 13 20 33 44 01 55 44 BASIN (t) 481 618 588 391 380 474 458 373 357 588 253 401 389 392 399 365 389 387 386 385 Sustainable Millet Production the 8 8 2 0 4 4 9 7 6 0 0 2 5 1 2 8 8 5 2 7 88 05 72 37 61 20 34 86 59 28 97 01 14 40 56 61 94 33 97 68 of a) PEANUT Areas (h 838 818 921 772 687 864 662 641 692 810 632 688 693 703 705 684 694 696 696 695 cultivated THE IN eldiy a) (t/h 7010, 9320, 6470, 6230, 9960, 9500, 9030, 9580, 2450, 7290, 7030, 7080, 6690, 6110, 6840, 6750, 6690, 6620, 6600, 6700, 8 5 8 9 8 5 7 0 7 4 0 9 4 1 3 7 0 6 0 5 Assessment 24 17 87 08 96 70 59 95 88 53 23 60 96 83 08 73 58 05 51 25 DATA (t) 505 646 458 380 382 541 625 693 165 289 402 433 398 348 376 391 389 381 377 383 ETC Peanut Production 9 1 7 8 1 5 6 0 2 7 0 5 5 4 0 3 5 3 3 1 Economic 63 52 28 85 60 18 68 18 43 08 79 63 62 11 85 40 12 02 90 06 PROJ a) Areas (h 720 693 709 609 384 570 692 724 677 397 571 612 596 571 549 580 582 576 571 572 9.2: cultivated Table WITHOUT Year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 5 3 1 3 6 1 4 3 7 7 9 6 5 4 8 uction 40 99 90 58 59 uction 54 76 43 85 40 uction 75 23 28 57 90 Real 024 284 774 065 235 Real 201 341 581 801 891 Real 041 171 381 491 501 Prod Prod Prod etaR ction 0829 0 4 4 2 5 4 3 5 9 8 7 5 4 6 6 8 60 85 27 03 43 ction 51 28 32 40 97 ction 08 27 87 67 49 94 odu Pr 39 074 444 904 105 255 tear 6194 odu Pr 11 251 421 671 841 891 tear odu Pr 001 091 231 451 501 501 on on on opti opti opti Ad % 53,0 64,0 16,0 77,0 28,0 Ad % 03,0 63,0 05,0 17,0 58,0 Ad % 72,0 53,0 35,0 97,0 78,0 a) a) a) (t/h 6 560, 775,0 186,0 616,0 816,0 946,0 (t/h 747,3 010,4 613,4 848,4 262,5 303,5 (t/h 488,1 599,1 361,2 923,2 644,2 684,2 Yield Yield Yield ated Millet Areas ltiv 6255 7 3 4 4 9 26 39 00 42 91 ated cu 70 067 207 427 497 567 ltiv ltiv Cassava Areas cu 46003 37313 62823 26043 28853 64053 ated Maize Areas cu 15045 77555 00685 90606 08916 15016 4 0 5 3 9 uction 01 32 92 58 51 uction Real 923 254 624 105 285 Real 99432 00772 76913 46163 20383 uction Real 948 999 7611 4841 3251 70 Prod Prod Prod tear ction 8306 7 4 2 0 7 98 69 19 94 82 tear ction tear ction on odu 558 339 Pr 37 983 354 664 175 285 on odu 68322 76542 07482 01533 08773 20783 on odu 5801 4421 9141 3651 Pr Pr opti opti opti Ad % 04,0 05,0 36,0 48,0 79,0 Ad % 54,0 45,0 56,0 48,0 99,0 Ad % 52,0 33,0 94,0 37,0 88,0 a) a) a) (t/h 4 680, 047,0 407,0 547,0 298,0 468,0 (t/h 6 160, 761,0 911,0 142,0 402,0 452,0 (t/h 778,0 299,0 130,1 341,1 712,1 962,1 Yield Yield Yield Analysis 6 9 9 4 9 ated 34 99 44 63 25 eap 6 8 2 4 9 ated 04 68 02 48 02 ated Economic: Peanut Areas ltiv 5089 3896 Rice 759 cu 54 665 885 186 246 256 ltiv ltiv Cow Areas cu 13 411 461 541 541 561 Areas 0401 4401 9701 7311 8511 cu 9.3 PROJECT r r r Yea 0082 0092 0102 0112 0122 0132 Yea 0082 0092 0102 0112 0122 0132 Yea 0082 0092 0102 0112 0122 0132 Table WITH dexIne )m ter 08 S$ 20 (U Manufactures Valuit 020,1 080,1 140,1 210,1 270,1 VI Base Un MU er um x 08 onsC Price deIn 20 580,1 191,1 771,1 522,1 243,1 Base 0 0 0 0 0 s)n 00 00 00 03 09 Maize (to 7379 21133 50605 18095 52795 Maize FCFA/ton 003 003 033 063 093 0 0 0 6 8 s)n 00 00 60 21 84 Rice 67 87 (to 752 655 576 Rice FCFA/ton 501 601 611 631 641 a a s)n Cassav (to 8644 96971 49924 37156 55637 FA/ton Cassav 00005 50005 00515 51515 03025 FC project 71 the ea 0 0 5 5 1 by ea wp s)n wp 00 50 03 60 21 Co 503 533 573 603 643 ducedin Co (to 8803 4434 4579 66841 17861 FCFA/ton ase ces pri incre 0 0 0 5 5 7 3 tion s)n Millet (to 07273 54793 88509 02021 15831 opsrcla 00 00 50 02 57 Millet FCFA/ton 502 502 522 552 572 produc turulc tional t 3 4 agrifo t 0 0 8 4 9 addi s)n Prices 00 80 61 45 30 of Peanu (to 772 74053 86818 07331 26541 onti Peanu Level matisE alnim FCFA/ton 801 811 831 851 871 No Year 0092 0102 0112 0122 0132 Year 0092 0102 0112 0122 0132 e 956 859 866 125 084 093 964 154 823 463 em incom 914 158 727 787 215 sts co 038 827 343 311 300 FCFA coni Real 82721 75052 11905 63256 75286 tion Real op ad 72291 51552 34843 18054 74505 edcu of st ind 414 153 751 887 749 co tal To nali 245 624 666 126 289 tal To lanim 276 139 775 897 758 960 675 994 612 519 Nom FCFA 56631 80382 97585 14828 02019 No 85902 54082 41704 54965 18076 9896 2076 127 660 325 94 31 801 327 452 9121 4109 1861 9052 2589 50 98 45 24 Maize 3192 6399 30351 11081 39981 Maize 26 569 5731 4422 4653 0014 217 834 542 695 2856 719 074 388 173 545 Rice 43711 55521 49344 21329 34 n Rice 081 tio op 87921 28481 23703 95805 84946 ady log a 4436 1139 9311 2379 8981 no a 4930 0226 1903 8323 4868 28 45 68 56 13 Cassav 242 079 6712 6733 2783 stsoc techyb 19 17 61 35 14 72 Cassav 415 097 ced 9401 5761 0912 on duin ea 7457 2817 8409 7212 5715 opti ea project wp 88 70 24 41 34 3009 9862 2511 9799 7312 wp 25 10 49 47 87 the Co by 8001 3551 7943 8925 9285 adygo tioncudorp nol of Co st 8352 8533 7844 3116 7267 by tech al colan nducedi 7238 4055 940 137 340 onti itio 200 842 944 08 83 515 338 856 7701 2507 ddia Add 82 60 635 322 393 ase Millet Millet 6829 8689 incre 94822 60903 58453 andt 9776 6449 81831 31881 78602 meo inc t 937 6648 659 563 330 stmenevni t 8302 063 109 023 785 878 136 847 914 onal 58 095 518 741 68 Peanu 87694 ted Peanu Additi 9746 03251 67842 20972 matisE 6799 60531 75081 84462 44723 Year 0092 0102 0112 0122 0132 Year 0092 0102 0112 0122 0132 302 861 573 823 463 FA 576 489 627 311 300 Real FC costst 68802 53362 79743 18054 74505 ojec pr Total lanim 814 139 775 897 758 FA 407 324 393 612 519 No FC 87012 67992 94604 54965 18076 talto ntem 2094 8985 4198 85 16 42 0 0 Real nvesti 659 1801 494 % 6 taltolanim 3 93 ntem 5394 0005 0000 34 in 00 293 303 621 90.4309 64 86 84 Net 651 331 100 466 904 No nvesti 1101 3811 285 Marg 8617- 783- 32251 45202 00781 24278 18 sstoc 73 ate 000 Priv ralut 0 0000 ars) ars) culri 10041 90 261 ye5( ye5( Ag RRI NPV % sstocgniatr 35 0005 0005 302 861 573 823 463 0000 24 13 costs 34 talto 576 489 627 311 300 426 Ope 3501 F51.0260902 e 243 rsota Real indic 68802 53362 79743 18054 74505 771 Valut costst omic on )1102 Presen stmenevin ent ecd 9- ars) Net stsoc pmui 4626 89 an 002( ye3( lic Eq 781 NPV= Pub turn totale IRR NPV re rn;u mentt net incom m 956 859 866 125 084 Retfo ves In ceiv 0773 000 000 50 Project Rea 914 158 727 787 215 Rate Ser 901 63098 60077 al 82721 75052 11905 63256 75286 tern In Year 0092 0102 0112 0122 0132 Year 0092 0102 0112 0122 0132 IRR= ha 0 0 0 0 Cassava 0.10 0008 000 40 7000 0001 0004 000 000 25 85 5243 20 200 000 000 750 000 750 000 50 176 91 18 60 43 14 15 65 216 5007 00 50 375 158 ha 0 0 0 0 000 500 000 000 50 60 100 500 500 000 250 500 75 00 250 396 600 ) Cowpea 0.50 0005 10 37 0007 18 25 102 138 36 0007 12 52 10 20 25 127 180 52 (SPB ha 0 0 0 0 0 000 ASINB Maize 0.25 20 0003 000 45 0005 0006 000 00 35 114 3001 00 000 000 195 81 30 0003 500 92 0007 7506 000 25 45 184 5002 00 75 375 190 NUT rice ha 0 0 0 0 0 PEA 000 500 000 50 75 250 000 000 50 500 000 00 50 500 RNE 0.25 20 0009 52 0008 45 134 4701 183 49 30 12 132 34 45 254 5002 312 58 Upland 0 0 0 0 SOUTH Millet ha1 000 20 2004 000 500 000 700 75 050 000 35 727 10 30 99 181 82 20 5504 500 000 250 000 30 87 12 11 45 180 4001 00 70 350 169 0 0 0 0 0 ACK ha 000 000 000 200 000 20 70 500 000 000 500 200 000 70 00 30 FATICK Peanut 2.5 15 10 45 0003 21 915 35 129 164 75 20 16 82 0005 46 40 209 5001 270 105 KAOL ha 0 0 0 0 0 0 0 000 000 000 00 00 00 000 000 500 000 250 000 75 00 25 )B Cassava 0.15 12 60 1400 0001 0006 30 123 0005 250 127 18 65 52 10 20 70 235 0008 400 164 (CP ea ha 0 0 000 500 ASINB 600 Cowp 0.15 10 40 0002 000 10 0005 500 000 500 000 500 250 67 260 91 23 10 12 61 0008 000 500 25 00 750 18 37 147 210 62 NUT PEA 0 0 0 0 74 OF Millet ha71. 0007 2004 500 000 700 00 300 000 000 000 55 00 45 RE 17 0006 404 15 49 101 51 0009 5504 75 0005 10 45 148 2001 300 151 SE LE ENTC 0 0 THI Peanut ha2 00 0009 3759 000 36 0003 200 000 575 26 685 000 600 500 13 15 85 607 109 63 20 13 52 0007 200 000 30 28 35 156 1001 700 1980 86 DIOURB )BP 0 0 ha (N 000 500 750 Cowpea 0.5 10 37 0002 0008 0005 500 350 850 500 500 250 000 25 00 241 5000 5000 500 62 84 21 12 52 20 15 110 175 64 ASINB 0 0 NUTAEP Millet 1.5ha 0005 2004 7508 0009 000 950 750 800 700 15 41 271 67 25 0005 5504 500 67 0004 0006 500 55 00 450 22 109 175 65 A ERN 0 0 LOUG Peanut ha3 5007 0008 000 700 30 0002 200 000 700 520 820 11 10 68 464 83 54 5007 800 000 12 45 0002 200 000 50 00 500 21 15 103 126 67 NORTH alysisnA )r (ha) labo area post) estv har kg/ha)( oducts Pr and ation Financial: cultivatedd post epar r nuream vest oducts (Har Pr and Pr sanitary N PROJECT opsrc eld/zoneiy em Kg/ha)( FCFAem /ha ganic o-t TU ation 9.4 househol epar r nuream vest age ncoI ECTJ (Har aver ginra ndaL Seed/ha Fertilize Or Phy boraL eldiy ncoI RGIA PRO M budget Pr sanitary o-t Cost/ha M Cost/ha op Table WITHO Agricultural Average Cr ndaL ganic Seed/ha Fertilize Or Phy boraL otalT oduction oss Actuel Pr Gr WITH otalT xpectedE oduction Pr GROSS Center of Peanut WITHOUT PROJECT North of Peanut Basin Basin South of Peanut Basin Total household production Cost/Zone 300 275 284 215 544 575 Gross household revenue/zone 394 360 441 370 775 108 Gross household margin/zone 214 085 237 155 330 533 WITH PROJECT Total household production Cost/zone 529 950 622 585 899 638 Gross household revenue/zone 728 000 997 500 1 324 375 Gross household margin /zone 333 050 464 915 537 238 land stone lines+live organic manure+stone Types of technologies preparation+fertilizer+rehabilitation fences lines+Reafforestation Estimated Cost per technology 30 000 95 000 202 500 55 000 140 000 72 000 Total technology Cost/household 85 000 235 000 274 500 % Targeted producers by zone 500 700 800 (Total of 2000 targeted producers) Benefit Cost 2009 921 755 500 1 518 564 500 -596 809 000 2010 1 751 335 450 1 556 529 083 194 806 367 2011 2 189 169 313 1 478 702 629 710 466 683 2012 2 232 952 699 1 330 832 366 902 120 333 2013 2 235 185 651 998 124 275 1 237 061 377 IRR (3 years) 27 % NPV (3 years) 49 091 067 Table 9.5 : Sensitivity Analysis Factors of sensitivity Level of IRR = Cost of Capital NPV (FCFA) opportunity Rate (20 %) Decrease in agricultural crop prices by 3 % 20 % 44,199,505 Decrease in level of yield by 5 % 20 % -28,411,401 Decrease in Adoption Technology Rate by 10 % 20 % 30,114,979 75 Annex 10: Safeguard policy issues SENEGAL: Sustainable Land Management Project 1. PSAOP2 is a national program covering activities in agriculture and animal husbandry. The scope of the ESMF for the program and the SLM is not only national but also local in order to take into account the specific impacts of sub-projects at the local level regardless of their eco- geographical location. While PSAOP2 is concerned with four safeguard policies namely, Environmental Assessment (OP/BP 4.01); Pest Management (OP 4.09); Involuntary Resettlement (OP/BP 4.12); and Projects on International Waterways (OP/BP 7.50). The Project is concerned with only the first three policies. The OP/BP 7.50 on International Waterways is not triggered as the areas covered by the SLM project are not concerned at all by International Waterways. The OP/BP4.04 (Natural Habitats) and OP/BP4.36 (Forests) are not triggered, because the project will only intervene in degraded agricultural lands. No sub-project will be approved if forests or natural habitats are affected. An important aspect of the ESMF is the screening of sub-projects under SLM. This process includes norms and standards set forth under PSAOP2. 2. The environmental screening process supplements national procedures, which do not include the screening and classification of sub-projects. Thus, each sub-project will be categorized as a result of the screening. This will be an important factor in making approval decisions on sub- projects at the local level. This selection process will determine: (i) The activities likely to have negative impacts on the environment as well as negative social impacts such as taking land from a poor household; (ii) the mitigation measures for those activities if possible; (iii) the activities requiring a specific environmental assessment; (iv) the roles and institutional responsibilities for analyzing and approving sub-projects and implementing and following up corrective measures and the preparation of specific EAs. 3. The ESMF will allow institutions such as ANCAR and ASPRODEB as well decentralized technical services of agriculture, animal husbandry, environment, and local government to assess prospectively the potential social and environmental impacts of proposed sub-projects on the basis of a checklist and formulate mitigation or compensation measures. If there is a need for capacity building, provision has been made for such activities. 4. Although the Project is expected to have positive environmental impacts because it will finance interventions to reduce land degradation, some localized negative environmental (construction of small scale agricultural infrastructure e.g. small dams, storage tanks, etc.) and social impacts (land conflicts, conflicts between farmers and herders) may be possible and will be addressed through the environmental screening process of sub-projects. 5. Under PSAOP2, the costs of implementing the ESMF including technical measures, capacity building, information, sensitization and communication were estimated at US$ 480,000. The SLM being a package of pilot activities mainstreaming sustainable agricultural management techniques as well as environmental and social safeguards, it is proposed to increase this budget slightly to US$ 500,000 in order to cover additional sub-projects related to mitigation measures. 76 Annex 11: Project preparation and supervision SENEGAL: Sustainable Land Management Project Planned Actual PCN review 08/27/2008 08/27/2008 Initial PID to PIC 08/07/2008 08/27/2008 Initial ISDS to PIC 08/07/2008 08/27/2008 Appraisal 04/30/2008 02/25/2009 Negotiations 04/15/2009 05/08/2009 Board/RVP approval 05/28/2009 08/06/2009 Planned date of effectiveness 06/30/2009 09/16/2009 Planned date of mid-term review Dec. 2010 01/23/2011 Planned closing date June 2012 06/30/2012 1. Key institutions responsible for preparation of the project are: Ministry of Agriculture, Ministry of Livestock, Ministry of Economy and Finance (Direction de la Coopération Economique et Financière: DCEF), Ministry of Environment (Direction de l'Environnement et des Etablissements Classés: DEEC), Technical and Fiduciary Coordination Unit of PSAOP2, ISRA, ITA, FNRAA, ANCAR, ASPRODEB, DAPS, DA, INP, and DEC. 2. Bank staff and consultants who worked on the project included: Name Title Unit Maniével Sène Rural Development Specialist, AFTAR Team Leader Matteo Marchisio Environmental Specialist AFTEN Soulemane Fofana Operations Officer AFTAR Demba Baldé Social Development Specialist AFTCS Osval Romao Rocha Financial Management Specialist AFTFM Sidy Diop Procurement Specialist AFTPC Nathalie S. Munzberg Senior Counsel LEGAF Ronnie W. Hammad Senior Operations Officer AFTRL Anta Tall Diallo Team Assistant AFCF1 Amadou Ablaye Fall Senior Agro-Economist ISRA Jean Pierre Ndiaye Senior Soil Scientist ISRA Elisabeth Mekonnen Language Program Assistant AFTAR 3. Bank funds expended to date on project preparation: 1. Bank resources: US$ 125,462.29 2. Trust funds: NA 3. Total: US$ 125,462.29 4. Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$ 1,000 2. Estimated annual supervision cost: US$ 33,000 77 Annex 12: Documents in the project file SENEGAL: Sustainable Land Management Project 1. République du Sénégal (October 2006), Document de Stratégie pour la Croissance et la Réduction de la Pauvreté 2006-2010 2. The World Bank (May 25, 2006), Project Appraisal Document for an Agricultural Services and Producer Organization Project 2 in support of the second phase of the Agricultural Services and Producer Organization Program 3. The World Bank (June 29, 2008), Country Environmental Analysis (Final report) 4. The World Bank (June 29, 2008), Country Environmental Analysis (Brochure) 5. The World Bank (June 29, 2008), Analyse Environnementale Pays (Rapport final) 6. The World Bank (June 27, 2008), Analyse Environnementale Pays (Plaquette) 7. The World Bank (December 2008), Aide Mémoire Mission de Préparation 10-22 Novembre 2008 8. UCTF (December 2008), Rapport ­ Composantes de Projet (draft) 9. UCTF (December 2008), Budget consolidé composantes (draft) 10. UCTF (December 2008), Rapport de Mission ­ Choix des Sites d'Intervention 11. INP (November 2008), Liste de Membres de Groupe GDT 12. République du Sénégal, Décret 2004-802 du 28 juin 2004 portant création, organisation et fonctionnement de l'Institut national de pédologie (I.N.P) 13. Faye, Mbaye Mbengue (September 2008), Actualisation du CADRE DE GESTION ENVIRONNEMENTALE ET SOCIALE (CGES) (Rapport final) 14. Fall, Abdoulaye A. (January 2009), Impact Economique et Financier du Projet de Gestion Durable de Terres 15. Centre de Suivi Ecologique (February 2009), Map of Areas targeted by the Project 16. Centre de Suivi Ecologique (February 2009), Carte du Couverture Végétale 17. Centre de Suivi Ecologique (February 2009), Map of Biomass values in the Groundnut Basin 18. Centre de Suivi Ecologique (February 2009), Average Values of Biomass in the Groundnut Basin 78 19. CERDI-UGB (August 2008), ANALYSE DE LA SITUATION DE REFERENCE DE L'ETUDE D'IMPACT DU PROGRAMME DES SERVICES AGRICOLES ET ORGANISATIONS DE PRODUCTEURS-PHASE 2 (PSAOP II) (Rapport Provisoire) 20. AfDB, FAO (June 24, 2005), PGIES - Programme de Gestion Intégrée des Eaux et des Sols (Rapport de Préparation) 21. Terradigm (October 17, 2006), Diagnostic Report on Land Degradation and Sustainable Land Management in Senegal (draft) 22. Terradigm (October 17, 2006), Diagnostic Report on Land Degradation and Sustainable Land Management in Senegal ­ Annexes (draft) 23. Terradigm (March 27, 2007), Annexe avec Options d'Investissement pour la mise en oeuvre et l'élargissement d'une Gestion Durable des Terres effective et efficace dans les zones prioritaires du Sénégal (draft) 24. UNDP (March 2008), Innovations in Micro Irrigation for Dryland Farmers ­ Project Document (draft) 25. UNDP (September 2007), PROGERT ­ Fiche Synoptique de Présentation 26. UNDP, PROGERT ­ Project Document 27. UNDP (September 2007), PGIES - Fiche synoptique de Présentation 28. Israeli Embassy (2009), TIPA : Techno-agricultural Innovation for Poverty Alleviation - Fiche synoptique de Présentation 79 Annex 13: Statement of loans and credits SENEGAL: Sustainable Land Management Project Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd P087304 2009 SN-Dakar -Diamniado Toll Highway Project 0.00 105.00 0.00 0.00 0.00 110.82 0.00 0.00 P105881 2009 SN-Sustainable Mgt of Fish Resources 0.00 3.50 0.00 0.00 0.00 3.55 0.00 0.00 P115938 2009 SN-Nutrition/Cash Transfer Proj 0.00 10.00 0.00 0.00 0.00 10.48 0.00 0.00 P107288 2009 SN-DPO fast-track-Public 0.00 60.00 0.00 0.00 0.00 62.63 0.00 0.00 P092062 2009 SN-GEF Sustainable Mngt of Fish Resources 0.00 0.00 0.00 6..00 0.00 0.00 0.00 0.00 P105279 2008 SN-En. Sec. Recov. Dev Policy Financing 0.00 80.00 0.00 0.00 0.00 23.24 25.62 0.00 P097181 2007 SN-Nutr Enhanc. Prog II - APL 0.00 15.00 0.00 0.00 0.00 4.09 -1.34 0.00 P089254 2007 SN-Quality EFA APL 2 0.00 30.00 0.00 0.00 0.00 19.84 9.20 0.00 P084022 2007 SN-Local Authorities Development Program 0.00 80.00 0.00 0.00 0.00 65.31 28.14 0.00 P093622 2006 SN-Agr Svcs & Prod Orgs APL 2 0.00 20.00 0.00 0.00 0.00 9.51 3..26 0.00 P083609 2006 SN-Agr Markets & Agribus Dev 0.00 35.00 0.00 0.00 0.00 25.96 6.01 0.00 P088656 2006 SN-Participatory Loc Dev Prgm 0.00 50.05 0.00 0.00 0.00 34.31 30.32 0.00 P086480 2005 SN-GIRMAC SIL 0.00 10.00 0.00 0.00 0.00 3.27 1.85 0.00 P058367 2005 SN-GEF Intg Marine and Coastal Resources 0.00 0.00 0.00 5.34 0.34 2.13 0.00 0.00 Management P085708 2005 SN-Elec. Serv. for Rural Areas 0.00 29.90 0.00 0.00 0.00 19.08 17.41 0.41 P073477 2005 SN-Elec Sec Effi. Enhanc.Phase 1 APL-1 0.00 15.70 0.00 0.00 0.00 12.34 12.08 6.09 P069207 2005 SN-Casamance Emerg Reconstr Supt 0.00 20.00 0.00 0.00 0.00 4.51 3.53 0.00 P051609 2003 SN-Priv Inv Promotion SIL 0.00 46.00 0.00 0.00 0.00 15.87 11.15 3.91 P074059 2002 SN-HIV/AIDS Prevent & Control APL 0.00 30.00 0.00 0.00 0.00 9.10 3.85 3.85 Total: 0.00 640.15 0.00 11.34 0.34 436.04 153.76 14.26 SENEGAL STATEMENT OF IFC's Held and Disbursed Portfolio In Millions of US Dollars Committed Disbursed Outstanding **Quasi Partici **Quasi Partici FY Approval Company Loan Equity Equity *GT/RM pant Loan Equity Equity *GT/RM pant 1980 Bhs 0 0.46 0 0 0 0 0.46 0 0 0 2008 Chain hotel 9.1 0 0 0 0 9.1 0 0 0 0 1999 Ciments du sahel 2.6 0.91 0 0 0 2.6 0.91 0 0 0 1997/98 Gti dakar 8.16 1.68 0 1.2 6.26 8.16 1.51 0 1.17 6.26 2005 Kounoune 18.63 0 0 0 0 16.57 0 0 0 0 2007 Sococim 26.01 0 0 0 0 26.01 0 0 0 0 Total Portfolio: 64.5 3.05 0 1.2 6.26 62.44 2.88 0 1.17 6.26 * Denotes Guarantee and Risk Management Products. ** Quasi Equity includes both loan and equity types. Total pending commitment: 0.00 0.00 0.00 0.00 80 Annex 14: Country at a glance SENEGAL: Sustainable Land Management Project Sub- P OVERTY and SOCIAL Saharan Low- Development diamond* Senegal Africa income 2007 Population, mid-year (millions) 12.4 800 1,296 Life expectancy GNI per capita (Atlas method, US$) 820 952 578 GNI (Atlas method, US$ billions) 10.2 762 749 Average annual growth, 2001-07 Population (%) 2.6 2.5 2.2 Labor force (%) 2.3 2.6 2.7 GNI Gross per primary M ost recent estimate (latest year available, 2001-07) capita enrollment Poverty (%of population below national poverty line) .. .. .. Urban population (%of total population) 42 36 32 Life expectancy at birth (years) 63 51 57 Infant mortality (per 1,000 live births) 60 94 85 Child malnutrition (%of children under 5) 15 27 29 Access to improved water source Access to an improved water source (%of population) 77 58 68 Literacy (%of population age 15+) 39 59 61 Gross primary enrollment (%of school-age population) 80 94 94 Senegal M ale 81 99 100 Low-income group Female 79 88 89 KEY ECONOM IC RATIOS and LONG-TERM TRENDS 1987 1997 2006 2007 Economic ratios* GDP (US$ billions) 5.0 4.7 9.3 11.2 Gross capital formation/GDP 14.7 14.8 28.9 31.9 Trade Exports of goods and services/GDP 21.2 27.3 25.4 24.8 Gross domestic savings/GDP 7.0 8.6 10.5 13.9 Gross national savings/GDP 2.7 10.8 18.3 21.4 Current account balance/GDP -11.0 -4.0 -10.6 -9.0 Domestic Capital Interest payments/GDP 2.4 1.6 0.8 .. savings formation Total debt/GDP 79.9 81.2 21.4 .. Total debt service/exports 31.9 17.3 6.0 .. Present value of debt/GDP .. .. 12.9 .. Present value of debt/exports .. .. 35.4 .. Indebtedness 1987-97 1997-07 2006 2007 2007-11 (average annual growth) GDP 1.8 4.5 2.3 4.8 7.1 Senegal GDP per capita -1.0 1.8 -0.2 1.9 6.1 Low-income group Exports of goods and services 3.0 2.1 -8.6 6.1 3.7 STRUCTURE of the ECONOM Y 1987 1997 2006 2007 Growth of capital and GDP (%) (%of GDP) Agriculture 24.9 19.8 15.7 14.7 60 Industry 20.4 23.5 22.8 22.1 40 M anufacturing 13.7 16.5 13.8 13.2 20 Services 54.8 56.8 61.5 63.2 0 Household final consumption expenditure 75.5 78.0 79.9 76.2 -20 02 03 04 05 06 07 General gov't final consumption expenditure 17.5 13.4 9.6 9.8 Imports of goods and services 29.0 33.6 43.8 42.7 GCF GDP 1987-97 1997-07 2006 2007 Growth of exports and imports (%) (average annual growth) Agriculture 0.7 1.9 -2.9 3.1 15 Industry 2.9 4.0 -1.7 5.7 10 M anufacturing 2.6 2.2 -6.5 4.2 5 Services 1.8 5.4 4.8 8.4 0 Household final consumption expenditure 1.7 4.1 -3.6 3.7 -5 02 03 04 05 06 07 General gov't final consumption expenditure -0.1 4.0 3.2 12.0 -10 Gross capital formation -0.9 10.5 33.8 4.2 Exports Imports Imports of goods and services 0.7 5.2 1.0 5.5 Note: 2007 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. 81 Senegal P RICES and GOVERNM ENT FINANCE 1987 1997 2006 2007 Inflation (%) Do mestic prices (%change) 6 Consumer prices -4.1 1.8 2.6 1.7 4 Implicit GDP deflator -1.6 2.1 3.4 5.2 2 Go vernment finance (%of GDP, includes current grants) 0 Current revenue 17.0 16.3 20.4 21.1 02 03 04 05 06 07 -2 Current budget balance 0.6 4.6 6.3 6.5 GDP deflator CPI Overall surplus/deficit -1.9 -1.5 -4.1 -6.1 TRADE 1987 1997 2006 2007 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) 671 904 1,519 1,628 4,000 Groundnut products 70 50 36 42 Phosphates 66 146 61 95 3,000 M anufactures 157 254 336 336 Total imports (cif) 1,119 1,306 3,437 3,574 2,000 Food 208 289 458 460 1,000 Fuel and energy 177 191 417 413 Capital goods 166 192 372 376 0 Export price index (2000=100) 68 98 106 99 01 02 03 04 05 06 07 Import price index (2000=100) 58 96 121 120 Exports Imports Terms of trade (2000=100) 118 102 87 83 BALANCE of P AYM ENTS 1987 1997 2006 2007 Current account balance to GDP (%) (US$ millions) Exports of goods and services 1,132 1,276 2,342 2,522 0 Imports of goods and services 1,474 1,568 4,045 4,351 01 02 03 04 05 06 07 Resource balance -342 -291 -1,703 -1,829 -5 Net income -198 -72 -162 -186 Net current transfers -16 178 886 1,013 Current account balance -556 -185 -980 -1,002 -10 Financing items (net) 582 168 805 1,135 Changes in net reserves -26 17 175 -134 -15 M emo : Reserves including gold (US$ millions) 23 395 897 903 Conversion rate (DEC, local/US$) 300.5 583.7 522.9 479.3 EXTERNAL DEBT and RESOURCE FLOWS 1987 1997 2006 2007 Composition of 2006 debt (US$ mill.) (US$ millions) Total debt outstanding and disbursed 4,027 3,795 1,984 .. IBRD 126 14 0 0 IDA 506 1,187 495 671 G: 95 F: 158 B: 495 Total debt service 387 251 202 .. IBRD 20 9 0 0 IDA 5 17 26 5 Composition of net resource flows C: 26 Official grants 206 238 2,408 .. Official creditors 298 142 114 .. E: 717 Private creditors -25 15 18 .. Foreign direct investment (net inflows) -4 176 58 .. Portfolio equity (net inflows) 1 8 0 .. D: 493 World Bank program Commitments 100 164 320 35 A - IBRD E - Bilateral Disbursements 120 60 131 133 B - IDA D - Other multilateral F - Private Principal repayments 12 15 15 1 C - IM F G - Short-term Net flows 108 45 116 133 Interest payments 13 10 10 5 Net transfers 95 35 106 128 Note: This table was produced from the Development Economics LDB database. 9/24/08 82 Annex 15: Incremental cost analysis SENEGAL: Sustainable Land Management Project A. Business as usual scenario 1. The importance of land resources in Senegal. Land is a key resource in Senegal. Terrestrial ecosystems make up 99.7 percent of the country's natural capital (63 percent for croplands and herding land, 30 percent for forests and 6 percent for protected areas) and 13 percent of total national wealth (Where is the Wealth of Nations, 2006). Seventy percent of the rural population (which represents about 50 percent of the total population in Senegal) directly depends on land resources for their livelihoods. Despite the fact that the contribution of the agricultural sector to the GDP has declined in the last decades (from 17.3 percent in 1979 to about 9 percent at present), this sector still engages about 60 percent of the population (Senegal Land Action Plan, 1996) and, according to the Government's Poverty Reduction Strategy Paper (DRSP-II), still represents one of the major engines for shared growth. Because Senegal's Accelerated Growth Strategy confirms that a sustainable agricultural sector is one of the key drivers of economic growth, it is important to secure the services provided by ecosystems to rural production landscapes. 2. The impact of land degradation on ecosystem functions and services. Land degradation is however increasingly affecting land resources in Senegal (a description of the major forms and causes of land degradation is reported in Annex 1 and Annex 4, Table 4.1). According to the Senegal Country Environmental Analysis (SN-CEA, FY08) almost two-thirds of the arable lands in the country are degraded, i.e about 2.5 million hectares. The negative consequences of land degradation are manifold, including on: (i) The country's potential for growth; (ii) Poverty and vulnerability of rural people; (iii) Social costs; and (iv) Ecosystem functions and services. As far as the negative impact of land degradation on the ecosystem functions and services are concerned, Senegal's territorial ecosystems and their products are an important part of Senegal's natural wealth and essential to country's food security. Land degradation is considered one of the key factors of continuing imbalances in the ecosystems (including water resources) and worsening of wildlife habitats. 3. Land degradation in the Groundnut Basin. The Groundnut Basin and the sylvo-pastoral zone in the west and center of the country are the areas most affected by land degradation. About 1.15 million ha are degraded in the groundnut basin alone, about one-third of all arable land in the country. A LADA study (L'évolution de la Dégradation des Terres au Sénégal, FAO/UNEP/CSE) shows that 20 percent of the sylvo-agricultural zones has been affected by substantial degradation. In the agro-pastoral zone, land use characteristics have been changed on almost 65 percent of the area, notably with degradation of natural vegetation in just 11 years, with woody savannah evolving towards poorer types of scrub savannah. Detailed studies in Kaffrine between 1989 and 1999 show that land use on 64 percent of the study area became more degraded, while only 1 percent improved (LADA 2005). 4. Sustainable land management: Opportunities and constraints. Sustainable land management (SLM) offers a means to address land degradation and enhance rural land productivity on a long-term basis, thus supporting economic growth and improving food security, while preserving ecosystems' critical functions and services. However, despite some 83 isolated technical successes, the adoption and replication of SLM has remained relatively limited in Senegal. Some of the key reasons that have prevented the adoption and/or wide-scale replication of SLM include: (i) A weak enabling environment (characterized by inconsistent government policies and regulations, weak institutional capacity to support SLM adoption, and an unfavorable incentive system); and (ii) a single-sector/single-donor/project-specific approach to the problem. There is a growing consensus among the Government and Development Partners that, to effectively address land degradation and successfully promote SLM, a more cross- sectoral and programmatic approach to scale up SLM is needed. 5. What if business as usual continues. Unless the conditions for a more cross-sectoral and programmatic approach to SLM are created, and the enabling environment for SLM strengthened, the current approach to address land degradation characterized by scattered, fragmented, and un-coordinated interventions and supported by weak institutions would continue, and the issue of land degradation would not be effectively tackled. B. Strategic fit 6. Consistency with GEF Strategies and the GEF-SIP. This Project is one of the operations under the regional GEF Strategic Investment Program for SLM in Sub-Saharan Africa (SIP), and it would contribute to the SIP's Program Goal (i.e. improving natural resource-based livelihoods in Sub-Saharan Africa by reducing land degradation) by specifically contributing to reduce land degradation in Senegal. It would in addition contribute to the SIP's objectives (i.e. to support Sub-Saharan countries in designing and managing programs and activities to advance SLM mainstreaming, governance and investments) as it would: (a) Support Senegal in adopting a more programmatic approach to SLM by addressing some of the weaknesses in the enabling environment that hinder SLM adoption and replication; and (b) support Senegal in applying sustainable practies that increase land productivity while securing ecosystem services in selected priority areas, and it will contribute to deliver on SIP IRs 1, 2, 3 and 4 (ref. to Section D - Project Components). As part of the GEF-SIP, this operation will directly contribute to the implementation of the GEF Land Degradation Focal Area Goal (i.e. arrest and reverse current trends in land degradation), and Strategy (i.e. Strategic Objectives 1: Creating an enabling environment for SLM; and 2: generating benefits for the global environment through the upscaling of SLM investments). More specifically, this operation will support the objective of LD-Strategic Program 1, i.e. support sustainable agriculture and rangeland management. 7. Consistency with TerrAfrica. The proposed operation is consistent with the approach advocated under the TerrAfrica partnership, as it focuses on creating the enabling conditions for SLM scale-up. More specifically, the proposed operation would contribute to the implementation of the Business Plan of TerrAfrica, particularly Activity Line 3 (Country Investments), Objectives 6 and 7. The Government of Senegal has formally expressed its intention to work along these lines consistent with TerrAfrica and the SIP. 8. Contribution to NEPAD's CAADP and EAP, UNCCD-NAP, new UNCCD 10 years Strategic Plan, and UNFCCC-NAPA objectives. Extending the area under sustainable land management is the key objective of pillar 1 of NEPAD's Comprehensive African Agriculture Development Program (CAADP) and one of the key objectives of program area 1 (degradation) of the Environmental Action Plan (EAP). The proposed operation would directly contribute to 84 these objectives. In addition, this Project is one of the instruments through which the UNCCD- NAP, the new UNCCD 10 years Strategic Plan, and the UNFCCC-NAPA will be implemented. 9. Expected global environmental benefits of the Project. The implementation of this operation is expected to generate the following national and global environmental benefits: (i) Help prevent and reduce the impact of land degradation on the health and integrity of the ecosystems (particularly agro-sylvo ecosystems) in the Groundnut Basin, the most seriously degraded area in Sengal; (ii) help fill the adaptation deficit being experienced by Senegal and its rural land users; and (iii) contribute to increased ground cover and soil quality, and reduced sedimentation in rivers and streams with the corresponding ability of terrestrial ecosystems to maintain carbon storage rates, biodiversity value, and hydrological cycles. Progress towards these objectives will be measured through: (a) An increase of the percentage of organic matter in the soil (organic matter is used as an indicator of soil fertility, which is considered as a proxy for land quality); (b) an increase in vegetation cover in target areas (vegetation cover is used as a proxy for ecosystems' health); and (c) an increase of the percentage of land with SLM practices. C. Incremental reasoning 10. Baseline scenario. A number of development partners have directly or indirectly (through many agriculture, forestry and rural development projects) invested in NRM over the years, but these efforts have had limited impacts. This is due to the nature of the project-based, single- sector approach to the problem, and to a lack of attention to the factors that enable the adoption and replication of SLM (e.g. knowledge management, institutional capacity, financing, and cross-sectoral coordination mechanisms). Under the existing (baseline) scenario (characterized by weak knowledge generation and dissemination on SLM; inadequate capacity of service providers and land users to integrate SLM in their production systems; insufficient financing among land users to invest in SLM; and lack of cross-sectoral coordination mechanisms), current approaches to address land degradation will continue. As a result, the key factors leading to land degradation will not be substantively or comprehensively addressed. This would result in continued degradation of productive and non-productive landscapes with consequent damage to the ecosystem functions and services. 11. Value added of GEF involvement. GEF resources will be strategically and incrementally used to support activities aimed at creating the enabling conditions to allow Senegal to progressively adopt a more cross-sectoral and programmatic approach to SLM, e.g. by: (i) Strengthening the capacity of key research institutions to generate SLM applied knowledge; (ii) strengthening capacity of service providers and producer organizations to offer/adopt SLM technologies; (iii) facilitating SLM adoption on-the-ground; and (iv) establishing cross-sectoral coordination mechanisms and developing a common SLM investment framework (Ref. Annex 4.B for details on project design and on the specific activities of each component). By supporting the progressive shift towards a more programmatic approach to SLM scale-up, this Project would facilitate the alignment and harmonization of current and future interventions and the sharing of experiences, thus reducing transaction costs and increasing the impact of interventions. This is expected to eventually generate greater economies of scale and improve the cost-effectiveness of the interventions. As explained below, GEF resources, integrated to the PSAOP2, will in addition leverage and influence insitutional support/reforms (including sectoral coordination), and policy dialogue. 85 12. Value added of GEF investment in relation to PSAOP2. Alternatives to reduce pressure on land and therefore land degradation would require a drastic shift of the Senegalese economy towards the secondary and tertiary sectors. However, given the high dependence of a large part of the population on the agricultural sector, particularly the poor, this shift cannot be realistically achieved in the short to medium term. The most effective approach to reduce the negative effects of unsustainable agricultural practices on land resources in a medium term horizon is therefore to mainstream sustainable land management in the agricultural sector, as proposed by this operation. GEF resources could have been used to finance a conventional operation on SLM. However, integrating this project to PSAOP2 offers an opportunity to leverage their impact to influence the wider policy dialogue and institutional reforms in the agricultural sector. This makes the use of GEF resources the most cost-effective. Thus, the proposed GEF operation will strategically leverage the impact of rural investments in Senegal, as it will provide an additional instrument to address land degradation and promote sustainable land and management in the sector. PSAOP2 recognizes the importance sustainable management of land resources in achieving intensification of production, but does not address land degradation and support SLM systematically. GEF resources would help cover this gap. In addition, as PSAOP2 is a well recognized instrument to promote institutional reforms and support the implementation of policy reforms in the agricultural sector, GEF resources would help mainstreaming SLM into the sectoral policy dialogue. D. Cofinancing Components PSAOP2 GEF-SLM Total IDA IFAD, GoS, Farmer Org GEF GoS . 1. Support to the Agricultural Research 5.5 4.5 0.6 10.60 System 2. Strengthening Agricultural Advisory 4.7 12.9 0.7 18.30 Services 3. Support to Producer Organizations 5 3.3 2.8 11.60 4. Support to Sectoral Coordination 4.2 6.3 0.7 11.20 19.4 27 4.8 46.4 4.8 51.2 86 18°W 16°W 14°W SENEGAL M A U R I T A N I A Sénégal SELECTED CITIES AND TOWNS To Podor Nouakchott REGION CAPITALS Rosso Doue SENEGAL Dagana NATIONAL CAPITAL Ndiayène Richard-Toll Haïré Lao RIVERS Lac de Guier S A I N T - MAIN ROADS L O U I S Kaedi To Mbout RAILROADS 16°N Saint-Louis 16°N Thilogne REGION BOUNDARIES Mpal V Lagbar INTERNATIONAL BOUNDARIES Léona Matam Ndiaye Louga Koki Tioukougne Peul This map was produced by the Map Design Unit of The World Bank. Kébémèr Daraa Linguère The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Fâs Boye L O U G A Vallée Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Darou Khoudos du Mékhé Darou Mousti Mamâri Ferlo Sénégal CAP- Kayar Vèlingara Tivaouane VERT Mbaké M ATA M Bakel Thiès D I O U R B E L La Ferdo DAKAR Rufisque T H I È S Diourbel Val To Gossas Kayes Payar Mbour F A T I C K Fatick Guinguinéo Saloum Toubéré Bafal Nayé Ndangane Saloum KaffrineK A O L A C K Kaolack Falémé 14°N 14°N Sakone Niahène Koungheul ATLANTIC Koussanar Keur Madiabel Nganda M A L I OCEAN Nioro du Rip Tambacounda Maka Karang Sandougou To Barra THE Gambia T A M B A C O U N D A To Dialakoto Banjul GAMBIA Meedina Gounas K O L D A Diouloulou Bounkiling Vélingara CasamaDiana nce ZIGUINCHOR Kolda Malinke Malari Koulountou Gambie Mako Bignona Saraya Casamance Sédhiou Tanaf Kayanga Ziguinchor To 419 m Kédougou Goudomp To To Diembéreng Oussouye Farim Bafata Koundara To 0 25 50 75 100 Kilometers Ingore IBRD AUGUST G U I N E A - B I S S A U To Balake 0 25 50 75 Miles G U I N E A 33475R 2006 12°N 12°N 18°W 16°W 14°W 12°W