Ghana - Afram plains agricultural development project

AFRICAN DEVELOPMENT FUND

REPUBLIC OF GHANA

AFRAM PLAINS AGRICULTURAL DEVELOPMENT PROJECT

APPRAISAL REPORT

AGRICULTURE AND RURAL DEVELOPMENT DEPARTMENT (OCAR) CENTRAL & WEST REGIONS MARCH 2006

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TABLE OF CONTENTS Page Project Information Sheet, Currency and Measures, List of Tables and Annexes, List of Abbreviations and Acronyms, Basic Data Sheet, Project Logical Framework, Executive Summary………………………………….......i –x 1. ORIGIN AND HISTORY OF THE PROJECT .............................................................. 1 2. THE AGRICULTURAL SECTOR............................................................................. ...... 2 2.1 Salient Features……………………………………………………………………........ 2 2.2 Land Tenure………………………………………………………………………........ 3 2.3 Cross-Cutting Issues………………………………………………………………......... 3 2.4 Institutional Framework……………………………………………………………........ 5 2.5 Rural Financing……………………………………………………………………... 9 2.6 Agricultural Development Policy and Strategy............................................................... 10 2.6 Donor Intervention .......................................................................................................... 11 2.7 Constraints and Potentials…………………………………………………………. 13 3. AGRICULTURE AND RURAL DEVELOPMENT SUB-SECTORS IN AFRAM PLAINS DISTRICT........................................................................................................................ 14 3.1 Crops………………………………………………………………………………… 14 3.2 Livestock …………………………………………………………………………… 15 3.3 Irrigation…………………………………………………………………………… …. 15 3.4 Fisheries……… ............................................................................................................ 16 3.5 Forestry………. ..................................................................................................... 16 3.6 Road and Water Transport Infrastructure……………………………………………….17 4. THE PROJECT ............................................................................................................... 17 4.1 Project Concept and Rationale ....................................................................................... 17 4.2 Project Area and Project Beneficiaries........................................................................... 19 4.3 Strategic Context ........................................................................................................... 20 4.4 Project Objective ............................................................................................................ 21 4.5 Project Description .......................................................................................................... 21 4.6 Production, Market and Prices ............................................................................... ........ 31 4.7 Environmental Impact ..................................................................................................... 32 4.8 Project Costs.................................................................................................................... 34 4.9 Sources of Financing and Expenditure Schedule ................................................... .......... 35 5. PROJECT IMPLEMENTATION ....................................................................................... 36 5.1 Executing Agency ............................................................................................................ 36 5.2 Institutional Arrangements .............................................................................................. 36 5.3 Supervision and Implementation Schedule ..................................................................... 37 5.4 Procurement Arrangements............................................................................................. 38 5.5 Disbursement Arrangements.......................................................................................... 41 5.6 Monitoring and Evaluation.............................................................................................. 42 5.7 Financial Reporting and Auditing ................................................................................... 43 5.8 Aid Co-ordination............................................................................................................ 43

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6 PROJECT SUSTAINABILITY AND RISKS ................................................................... 44 6.1 Recurrent Costs .............................................................................................................. 44 6.2 Project Sustainability............................................................................................................. 44 6.3 Critical Risks and Mitigating Measures............................................................................ 45 7 PROJECT BENEFITS ....................................................................................................... 45 7.1 Financial Analysis ........................................................................................................... 45 7.2 Economic Analysis........................................................................................................... 46 7.3 Social Impact.................................................................................................................... 46 7.4 Sensitivity Analysis......................................................................................................... 47 8 CONCLUSIONS AND RECOMMENDATIONS........................................................... 47 8.1 Conclusions …………………….………………………………………………. 47 8.2 Recommendations and Conditions for Loan Approval……………………………. 47

LIST OF TABLES

Table 4-1: Summary of Project Cost Estimates by Component............................................. 35 Table 4-2: Summary of Project Estimates by Category of Expenditure .................................. 35 Table 4-3: Project Sources of Finance ..................................................................................... 36 Table 5-1: Implementation Schedule ......................................................................................... 38 Table 5-2: Summary of Procurement Arrangements ............................................................... 39 Table 5-3: Expenditure Schedule by Component .................................................................... 40 Table5-4: ADF/Government/Beneficiaries Expenditure Schedule......................................... 41 Table 5-5: Summary of Expenditure by Category and Source of Finance............................ 41 Table 6.1: Summary of Recurrent Costs……………………………………………………... 44

LIST OF ANNEXES

No. of Pages 1. Map of the Project Area ................................................................................................... 1 2. Project Organization and Management ........................................................................... 1 3. Implementation Schedule................................................................................................ 1 4. Environmental and Social Management Summary......................................................... 3 5. Provisional List of Goods and Services (LOGS) ……………………………………… 1 6. List of Bank Group operations in Ghana....................................................................... 1

VOLUME II No. of Pages

Detailed Cost Tables……………………………………………………………………………5 Detailed Economic and Financial Analysis…………………………………………………….4 The report was prepared by Messrs. A. G. Khumbanyiwa, Forestry Specialist (Team Leader), O. Oladapo, Agricultural Economist, and R. Lubunga, Irrigation Engineer all of OCAR.2. Contributions were also received from Mr. M. Basalirwa, Financial Analyst, OCAR.2, Ms. Rita Ba Naye, Gender Specialist, OCAR.0 and Mr. M.M Traore, Environment Specialist, OCAR.0. Additional inquiries relating to the report should be directed to the authors or Mr. S. Z. Moussa, Manager, OCAR.2 (Ext. 2143) or Mr. C. R. Spencer, Director, OCAR (Ext. 2036).

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AFRICAN DEVELOPMENT FUND

BP 323-1002, TUNIS BELVEDERE, TUNISIA TEL: (216) 7110 2143 FAX: (216) 71103755

PROJECT INFORMATION SHEET 1. COUNTRY : Ghana 2. TITLE OF PROJECT : Afram Agricultural Development Project 3. LOCATION : Afram Plains District in the Eastern Region of

Ghana. 4. BORROWER : Republic of Ghana 5. EXECUTIVING AGENCY : Ministry of Food and Agriculture, Crop

Services Directorate, P. O. Box M37, Accra, Ghana Tel: (233) 21 665066; Fax: (233) 21 780326

6. PROJECT DESCRIPTION: The sector goal is poverty reduction and the improvement of the welfare of the rural population. The specific objective of the project is to increase agricultural output and household incomes of the project beneficiaries. The project has four components namely: i) Production Development ii) Infrastructure Development; iii) Institutional Capacity building and iv) Project Management. The main activities include rainwater management, improvement to existing community based irrigation activities, livestock production, sustainable management of fisheries and forestry resources and training of staff and farmers. 7. TOTAL COST : UA 22.45 million

Foreign exchange : UA 16.37 million Local cost : UA 6.08 million 8. ADF LOAN : UA 19.97 million 9. OTHER SOURCES OF FINANCE Government of Ghana (including Beneficiaries) :UA 2.48 million 10. DATE OF APPROVAL : 24 May 2006 11. PROBABLE COMMENCEMENT DATE AND PROJECT DURATION

Commencement : November 2006 Duration : 5 Years

12. ENVORONMENTAL CATEGORISATION: Category II 13. PROCUREMENT OF GOODS, WORKS AND SERVICES Procurement of goods, works and consultancy services financed by the ADF resources will be carried out in conformity with Bank Group Rules of Procedure. The procurement of civil works, vehicles, equipment, will be undertaken through National Competitive Bidding whereas the consultancy services will be done through competition on the basis of a short-list. 14. CONSULTANCY SERVICES REQUIRED Consultancy services for roads construction and design, land and water management engineering, training, mid-term review training activities and auditing of the project accounts will be required.

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CURRENCY AND MEASURES

(March 2006) UA 1 = US$ 1.447 UA 1 = ¢ 13,050.40 US$ 1 = ¢ 9,100.00

FINANCIAL YEAR

1 January – 31 December

WEIGHTS AND MEASURES

Metric System 1 Kg = 2.2 lbs

LIST OF ABBREVIATIONS AND ACRONYMS

ADB - African Development Bank ADF - African Development Fund AAGDS - Accelerated Agricultural Growth and Development Strategy AFD - Agence Française de Développement AgDB - Agricultural Development Bank AgSSIP - Agricultural Services Sector Investment Program APDO - Afram Plains Development Organization CMC - Community Market Committee CRI - Crops Research Institute CSD - Crop Services Directorate DFID - Department for International Development DADU - District Agricultural Development Unit DFR - Department of Feeder Roads EIA - Environmental Impact Assessment EIRR - Economic Internal Rate of Return EPA - Environmental Protection Agency FASDEP - Food and Agriculture Sector Development Program GLDB - Grain and Legumes Development Board GPRSP - Ghana Poverty Reduction Strategy Paper GPRSII - Growth and Poverty Reduction Strategy MRT - Ministry of Roads and Transport PPMED - Policy Planning, Monitoring and Evaluation Directorate RSDP - Road Sector Development Program SFMC - Storage Facility Management Committee STI - Sexually Transmitted Infections UA - Unit of Account UNDP - United Nations Development Program VIP - Village Improvement Project VLTC - Volta Lake Transport Company WVI - World Vision International

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LOGICAL FRAMEWORK: Afram Plans Agricultural Development Project

HIERARCHY OF OBJECTIVES

EXPECTED RESULTS BY CORRESPONDING SECTORS REACH PERFORMANCE

INDICATORS SOURCE INDICATIVE TARGETS TIMEFRAME ASSUMPTIONS AND RISKS

GOAL Sector Theme SECTOR/THEME Longer-term outcome BENEFICIARIES INDICATORS Longer-term

outcome TARGET INDICATORS and TIMEFRAME

Rural poverty reduction and food security

Increased contribution of agriculture to GDP

Agricultural farmers and rural population in Ghana

- National statistics on economy and agriculture - Project Reports

Increased contribution of agriculture to GDP from 5.25% in 2006 to 6.6% in 2009 and 6.7% in 2011.

Project OBJECTIVE Medium-term OUTCOMES BENEFICIARIES INDICATORS Medium-term outcome TARGET INDICATORS

To increase agricultural output and household incomes of the beneficiaries

Increased contribution of agriculture to GDP.

Afram Plains district population of 161,754

National statistics on economy and agriculture Project Reports

- Real per capita food production increases two percent by annually. - Project beneficiary per capita incomes increased from ¢ 0.8 million in 2006 to ¢ 4.5 million by 2009 to ¢ 6.7 by 2011.

COMPONENT 1: PRODUCTION DEVELOPMENT

1.1 Increase in productivity due to improved rainwater management in 45,290 ha. 1.2 Improved efficiency and increased production of community based irrigation in 1,940 ha.

22,645 farm families (70% women) in the Afram Plains District. 971 farm families (70% women) in Afram Plains district.

Mid term out figures 40% of the targeted hectares would have been developed or improved by 2009 Means of Verification - Project Monitoring & Evaluation reports - Project Monitoring & Evaluation reports

1.1.1 Increase in yield of:: - cassava from 11 t/ha in 2006 to 15t/ha in 2009 to 20t/ha in 2011 in 5,660 ha ; yam from 13t/ha in 2006 to 18 t/ha in 2009 to 24t/ha in 2011 in 11,323 ha; maize from 1.6 t/ha in 2006 to 2.2 t/ha in 2009 to 5 t/ha in 2011 in 16,984 ha; cashew from 0.8/ t/ha in 2006 to 1.2 t/ha in 2009 to 1.8t/ha in 2011 in 11,323 ha 1.1.2 Well maintained contour bunds established in 30,000 ha by 2009 and 45,290 ha by 2011 1.1.3 Fifty (50) seed growers of which 60% will be women selected and trained to produce improved seed/ planting material: 72 t/year of maize seed by 2009 and 120 t/ year by 2011; 390 t/ year of yam planting material by 2009 and 650 t/year by 2011. 1.2.1 Drip irrigation adopted from 0 ha in 2006 to 700 ha by 2009 and 1,940 ha by 2011. 1.2.2 Increased production of Pepper from 6300 t in 2006 to 8000 t by 2009 to 17,400 t by 2011; tomatoes increased from 2900 t in 2006 to 4000 t by 2009 to 5,800 t by 2011; Okra production increased from 1900 t in 2006 to 3000 t by 2009 to 4650 t by 2011; Onions production increased from 1160 t in 2006 to 2000 t by 2009 to 3500 t by 2011.

Erratic rainfall. Mitigation Rainwater harvesting and irrigation. Market prices depression at harvest time Mitigation storage facilities constructed, feeder roads upgraded and farmer groups formed and strengthened Assumption: water level in Volta Lake sufficient to sustain irrigation

1.3 Improved production of cattle and poultry as well as small ruminants.

1,625 livestock farmers constituting 60% women.

1.3.1 Beef production increased from 3,600 t in 2006 to 5000 t by 2009 to 8,600 t by 2011; mutton and goat meat production increased from 4,870 t in 2006 to 8000 t by 2009 to 15,800 t by 2011; poultry meat production increased from 3,000 t in 2006 to 6000 t by 2009 to 9,000 t by 2011. 1.3.2 600 ha of fodder banks with watering points established by 2009 and 1000 ha established by 2011. 1.3.3 26 community based para-vets trained 10 of whom will be women

Livestock epidemics. Mitigation Disease control measures including training of community based Vet. Assistants. Conflict between livestock and crop farmers. Mitigation Provided for fodder banks

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1.4 Improved fisheries management in Volta Lake.

1.5 Sustainable management of forest resources instituted

17,000 fisherfolk in 223 fishing villages; 45% women. Afram Plains district population of 161,754

1.4.1 70 fisher-folk groups established and functional by 2009 and 120 by 2011. 1.4.2 By-laws translated and distributed to all 17,000 fisherfolk by 2009 . 1.4.3 Cage fisheries (Acadja technology) practiced by 50 fisher folk groups by 2009 and 120 groups by 2011. 1.4.4 3 million fingerlings bred and stocked in the Volta Lake by 2009. 1.5.1 Forestry management and harvesting plan developed and implemented covering the whole district. 1.5.2 10 community nurseries established and fully operational by 2009

Mitigation Live fencing & community forestry management.

COMPONENT 2: INFRASTRUCTURE DEVELOPMENT

2.1 Improved feeder road network

2.2 Improved ferry service

2.3 Improved water for human consumption.

161,754 inhabitants of Afram Plains District. 161,754 inhabitants of Afram Plains District 1,200 farm families in Afram Plains district

Means of Verification Project Monitoring &

Evaluation reports. Department of Feeder

Roads Reports. Volta Lake Transport

Corporation records

2.1.1 200 km of feeder roads upgraded by end of 2008. 2.2.1 One 350 tonne ferry repaired and fully functional by 2008. 2.2.2 Ferry trips increased from 6 per day in 2006 to 10 by 2009 and to 12 by 2011. 2.3.1 20 boreholes drilled and functional by 2009

Limited capacity of local contractors. Mitigation No contractor takes more than one lot. Each lot not more than 20km.

COMPONENT 3: INSTITUTIONAL CAPACITY BUILDING.

3.1 Improvement of farmer capacity

3.2 Improvement of extension service capacity. 3.3 Improvement of MOFA and DADU Implementation and M&E capacity.

27,495 farm families in Afram Plains District. 8 SMCs and 32 AEAs.

Means of Verification Bank Project Monitoring

system. Supervision reports

3.1.1 Farmer groups established and trained in crop husbandry and rainwater management; zero in 2006 to 600groups ( 70% women groups) by 2009 to 900 groups by 2011; 53 ( of which 70% are women) existing groups trained in drip irrigation technology by 2009; 70 fisherfolk groups established and trained by 2009 and 120 by 2011; 40 livestock production groups established and trained by 2009 and 65 by 2011. 3.2.1 Two (2) farmer field tours every year from 2008 to 2011. 3.2.2 Eight (8) Subject Matter Specialists and 32 AEAs trained and provided with motorcycles by 2008 and all in post by 2011.

3.3.1 MSc training for 6 staff members at DADU and 2 at MOFA/AgSSIP from 2007 to 2009.

Project staff trained abroad will return to take up their posts

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COMPONENT 4: PROJECT MANAGEMENT.

4.1 Functional Project Management team.

4.2 Improved functionality of DADU.

DADU/ AgSSIP/ MOFA DADU

4.1.1 DADU empowered to manage and coordinate project activities. 4.1.2 Quarterly Progress, Audit, Mid-term Review and Project

Completion Reports prepared and submitted on time.

4.1.3 Project procurements on schedule.

4.1.4 Well maintained project data base and assets register.

4.2.1 330 square metre of office space rehabilitated and adequately furnished by end of 2007. 4.2.2 60 square metres of veterinary clinic at DADU offices rehabilitated and furnished by 2008. 4.2.3 570 square metres of residential accommodation for DADU officers, rehabilitated by 2007

ACTIVITIES: 1. Production Development:(Crop improvement; Livestock management; Fisheries resources management; Forestry conservation and reforestation). 2. Infrastructure Development:(Feeder roadsimprovement; Ferry Services improvement; Borehole drilling; Market facilities improvement). 3.Institutional Capacity Building (District office and residential accommodation improvement; Transport, field &office equipment; Farmer, extension agent & technical staff training). 4. Project Management

PROJECT COSTS (UA Million) Production Development: 8.40 Infrastructure Development 7.00: Capacity Building: 6.00 Project Management::1.99 TOTAL UA22.5 million ADF UA 19.97 million

161,754 inhabitants in Afram Plains District.

Project Duration 5 years

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EXECUTIVE SUMMARY

Project Background: Afram Plains District has tremendous potential to contribute significantly to the improvement of the well-being of its inhabitants. The inhabitants of the district are cut off from the rest of the country due to limited physical access. The district is virtually a peninsula cut off on three sides by Volta Lake and on the fourth by lack of a connecting road to the outside world. Current productivity levels for major crops are 11 t/ ha for cassava, 13 t/ha for yam, 1.6 t/ha for maize and 0.8 t/ha for cashew. The climate and soil fertility conditions are favourable to support increased production. With improved technologies and improved extension service delivery there is potential to increase the productivity levels to 20 t/ha for cassava, 28 t/ha for yam, 5 t/ha for maize and 1.8 t/ha for cashew. In May 2000 the ADF Board of Directors approved the Terms of Reference (TOR) for the feasibility study. The implementation of the feasibility study was undertaken by a team of internationally recruited consultants. This project is in response to the Government of Ghana’s request, in the year 2005, for the Bank to consider financing the Afram Plains Agricultural Development Project as recommended by the feasibility study. The project is in line with the Government’s strategic priorities for the development of the agricultural sector and is also consistent with the Bank Group development strategy for Ghana. Purpose of the Loan: The total ADF financing would be UA 19.97 million representing 89% of the total project cost. ADF resources would finance 100% of the investment costs. Sector Goal and Project Objectives: The sector goal is rural poverty reduction and food security. The specific objective of the project is to increase the agricultural output and household incomes of the project beneficiaries.

Brief Description of the Project: The project components are formulated to address the basic problems confronting the district namely non-utilization of the vast agricultural potentials of the area, poor access and weak institutional framework. The project has four components namely; 1) Production Development 2) Infrastructure Development; 3) Institutional Capacity Building and 4) Project Management.

Project Cost: The total project cost is estimated at UA22.45 million out of which UA16.37 million (representing 63%) would be in foreign currency. Costs in local currency would be UA6.08 million representing 37%. Source of Finance: The Project would be financed by the ADF and GoG. The total ADF financing would be UA19.970 million representing 89% of the total project cost. The GoG and beneficiaries contribution would amount to UA2.46 million representing 11% of the total project cost. Project Implementation: The project will be implemented over a period of five years. The overall implementation of the project activities will be the responsibility of the Ministry of Food and Agriculture through AgSSIP. The day to day coordination of project activities will be the responsibility of the District Director, Afram Plains DADU with the support of implementation partners including Ministry of Fisheries, Forestry Commission, Department of Feeder Roads, Community Water and Sanitation Agency and GIDA.

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Conclusions and Recommendations: The project will directly benefit 27,260 farm families for various production activities in the district. The project would provide regular employment to about 5,000 workers on maize, cashew, yam and cassava. In addition the project will create about 350,000 seasonal jobs. At full development of these interventions there will be incremental production of: 54,400 tonnes of maize; 84,920 tonnes of yam; 11,320 tonnes of cashew; and 88,290 tonnes of cassava. For vegetables the project will lead to incremental production of: 11,155 tonnes pepper; 2,910 tonnes of tomatoes; 2,330 tonnes of onions and 2,720 tonnes of okra. Furthermore, the livestock sub sector will have incremental production of: beef 4,940 tonnes, sheep and goat meet 10,970 tonnes; and 9,000 tonnes of poultry meat. In addition about 6,000 tonnes of fish will be produced. The rehabilitated 200 km of feeder roads will facilitate the movement of goods and services thereby increasing the tempo of economic activities in the district. The project is socially desirable, technically feasible, financially viable and environmentally friendly. Furthermore, it is accorded high priority in the agriculture development strategy by the Government of Ghana. The project is also consistent with the Bank Group Vision statement as well as the Bank strategy for Ghana. At the national level, the project is expected to contribute to the diversification of the country's export base, generate rural employment and enhance rural household incomes. It is recommended that a loan not exceeding UA19.97 million be granted to the Republic of Ghana to finance the implementation of the Afram Plains Agricultural Development Project as presented in this appraisal report.

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1. ORIGIN AND HISTORY OF THE PROJECT 1.1 Afram Plains District has tremendous potential to contribute significantly to the improvement of the well-being of its inhabitants. The inhabitants of the district are cut off from the rest of the country due to limited physical access. The district is virtually a peninsula cut off on three sides by Volta Lake and on the fourth by lack of a connecting road to the outside world. The only way the people can get to the district is through ferry service. Current productivity levels for major crops are 11 t/ ha for cassava, 13 t/ha for yam, 1.6 t/ha for maize and 0.8 t/ha for cashew. The climate and soil fertility conditions are favourable to support increased production. With improved technologies and improved extension service delivery there is potential to increase the productivity levels to 20 t/ha for cassava, 28 t/ha for yam, 5 t/ha for maize and 1.8 t/ha for cashew. Furthermore the lack of physical access constrains the marketability of agricultural products from the district. This state of affairs poses a disincentive to increased agricultural production which in turn affects the income levels of the inhabitants of the district. 1.2 The population of the district is estimated to be 161,754 and growing at an estimated rate of 3.6%. About 85% of the population live in rural areas. About 87% of the rural population live below the poverty line compared to a national average in rural areas of 42%. The district’s isolation as highlighted above has resulted in a small and scattered population with vast areas of land that is suited for the production of various agricultural products. The slash and burn system of agriculture currently practiced by most farmers is unsustainable and threatens the district’s agricultural potential. For the agricultural potential to be realized, more investment will be required in the provision of relevant infrastructure such as a good network of trunk and feeder roads, bridges and water transport, irrigation facilities, storage and processing facilities, markets just to name a few. This will create opportunities for the private sector to establish businesses including agro-based businesses in the district. 1.3 The Government of Ghana is striving to achieve Millennium Development Goals (MDGs) and a policy of balanced regional growth. It is in this context that the government requested the Bank to finance a feasibility study of the Afram Plains District. In May 2000 the ADF Board of Directors approved the Terms of Reference (TOR) for the feasibility study. The implementation of the study was undertaken by a team of internationally recruited consultants. During the study a series of consultative workshops were organized in order to benefit from the views of a cross-section of stakeholders on various aspects of agricultural development in the district. The final feasibility study report was submitted to the Bank in December 2005. Based on the outcome of the feasibility study report, the Bank prepared a project preparation report which was reviewed internally and discussed with the government authorities. Subsequently, the Government of Ghana (GoG) submitted an official request to the Bank to finance the project as recommended by the study. 1.4 An ADF mission was fielded in February/ March 2006 to appraise the project. The appraisal mission consulted with MOFA and other ministries/ departments, officials of the

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Afram Plains District Assembly, local leaders, project beneficiaries, NGOs, micro-finance institutions, private sector institutions and the donor community represented in Ghana including the World Bank, FAO, EU, JICA, DFID, CIDA, USAID, Dutch Embassy, GTZ, AFD among others. This appraisal report is based on the information collected during the mission as well as information contained in the feasibility study report.

2. THE AGRICULTURAL SECTOR

2.1 Salient Features 2.1.1 Agriculture is the dominant sector in the Ghanaian economy. The sector remains the largest contributor to GDP, followed by the services and industrial sectors respectively. The sector accounts for about 39.2 percent of GDP, directly employs 70 percent of the labour force, and accounts for 57% of foreign exchange earnings. The sector is made up of 5 sub-sectors namely: crops other than cocoa (63% of agricultural GDP), cocoa (14%), livestock (7%), fisheries (5%) and forestry (11%). The sector plays an important role in the socio-economic development of the country. It contributes to ensuring food security, provides raw materials for local industries, generates foreign exchange, and provides employment and incomes for most of the population (especially those living in the rural areas), thereby contributing to poverty reduction. 2.1.2 Based on climatic factors, soils, water availability, vegetation and other physical and biotic factors, Ghana is divided into five major agro-ecological zones. These are coastal savannah, deciduous and rain forest, transitional zone, guinea savannah and sudan savannah. Each agro-ecological zone is further characterized by variations in population density, cropping patterns, and other socio-economic attributes. Maize is the most important food crop followed by yam, cassava, sorghum, plantain, pulses, millet and rice. Domestic production of cereals (maize, sorghum, millet, and rice) is estimated at 1.5 – 1.8 million tonnes per year; starchy staples and plantain at about 12.5 – 12.8 million tonnes per year. Vegetables (including tomatoes, pepper, onion, okra, cabbages, and garden egg); spices and condiments are an important source of cash income. 2.1.3 Ghana’s agricultural production is predominantly rain-fed. Smallholder farmers on family-operated farms using rather rudimentary technology produce about 80% of the total agricultural production in the country. Women are the predominant producers of the annual crops. Non-traditional crops including fruits, pineapple, mango, and cashew nuts are increasingly becoming important in the Ghanaian economy. Livestock is an important component of the farming system especially in northern Ghana. Crop residues are utilized to feed the animals while animal manure is used to restore and improve soil fertility. Livestock population comprises of 2 million sheep, 2.1 million goats, 1.1 million cattle, 0.4 million pigs and 13.1 million poultry. Permanent pastureland is estimated to be 8.4 million ha. The fisheries sub-sector accounts for an annual production of 400,000 tonnes mainly of marine source.

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2.2 Land Tenure and Land Use 2.2.1 Land Tenure: Most of the agricultural land in Ghana is under communal ownership. Communal land is controlled by lineage or clan-based land-owning groups and allocated to individuals or households on a usufructuary basis. In most parts of the country, particularly in the northern regions, women generally have difficulties in accessing land except where there is a male guarantor, or where there is group ownership. Traditional leadership exercises strong influence over land allocation. The comprehensive National Land Policy was introduced in 1999 to serve as a framework for amendments of legislation and formulation of strategies for allocation, utilization and administration of land. 2.2.2 A Land Title Law passed in 1986 provides for land titling in order to enhance security of land tenure. The progress in formalizing land ownership through issuing of title deeds has been slow due to limited funding. Consequently most rural land is still under customary law. However a pilot Land Administration Project (LAP) is under implementation in Greater Accra and Kumasi to provide for systematic land titling. The project is funded by a number of donors including the World Bank, KfW, DFID, GTZ and CIDA. Lessons learnt from the pilot project will be replicated throughout the country. 2.2.3 Land Use: Out of a total land area of 23.9 million hectares, 13 million ha (54%) are suitable for agricultural production. Land use in Ghana can be grouped into eight major categories, namely; i) forest reserves (approximately 11% of the total land area); ii) wildlife reserves (5%); iii) unreserved high forest (2%); iv) savannah woodlands (30%); v) tree crops (7%); vi) annual crops (25%); vii) unimproved pasture (15%); and viii) bush fallow and other uses 5%). Agriculture is predominantly on a smallholder basis in Ghana. About 90% of farm holdings are less than 2 hectares in size, although there are some large farms and plantations, particularly for rubber, oil palm and coconut and to a lesser extent, rice, maize and pineapples. Main system of farming is traditional where the hoe and cutlass are the main farming tools.

2.3 Cross Cutting Issues 2.3.1 Poverty: About 39% (8 million) of the population in Ghana are classified as living in poverty or extreme poverty. Two million people (10%) classified as living in poverty are unable to meet their food and other needs, while the remaining six million classified as living in extreme poverty are unable to meet even their most basic food needs. Fifty-eight percent (58%) of those identified as poor are in the agriculture sector, most of whom are food producers. The prevalence of extreme poverty varies in different parts of the country, with the Northern and Western regions recording above 70%, while Accra has less than 5%. The incidence of poverty is more prevalent among subsistence farmers and female-headed households. The goal of government is to reduce this incidence of poverty by 10 percentage points by the year 2010. The erratic rainfall pattern, coupled with the rudimentary technology used in most production processes lead to fluctuations in food production from year to year, which causes food insecurity.

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2.3.2 The extent of poverty in the northern region is exhibited by the high under-five mortality rate which is double the national average, and the maternal mortality rates, which are four times the national rate. Adult illiteracy is another manifestation of poverty. The literacy level for women is 42.5% while that for men is 66.2%. In addition, only 79% of the population has access to safe drinking water, 25% have access to health services and 58% of the population have access to sanitation. About 7% of the children under 5 years of age are underweight. 2.3.3 Gender: Women represent 50% of the labour force in Ghana. Increasingly women are involved in commercial farming activities, but the majority are still engaged in producing food crops. Almost exclusively, women are responsible for family or home-based economic activities like food production, processing and marketing. Women face difficulties to own land, as well as to access credit since they often lack collateral. Trading is a primary occupation for women, and is practiced as an off-season activity to supplement farm incomes. Women farmers produce about 70% of the national crop output. An increase in women’s productivity has greater impact on food security than does an increase in men’s production. Women still constitute a high percentage of the poor. More than 70% of those living below the poverty line are women. The Government of Ghana has demonstrated its commitment to improving the situation of women and children through various policies and programmes and integration of women’s and men’s specific concerns in development strategies and the resulting project planning, implementation, monitoring and evaluation. In addition, gender mainstreaming in policy making continues to be strengthened through increased collaboration and co-ordination between Ministry of Women and Children Affairs (MOWAC), sector ministries, civil society and donors. 2.3.4 HIV/ AIDS and Malaria: HIV/AIDS presents a rapidly emerging challenge to social security in Ghana. The current HIV/ AIDS prevalence rate stands at 3.4% compared to 6.4% in Africa. Latest statistics (2004) by UNAIDS reveal that although awareness of the HIV/ Aids pandemic is estimated to be about 95% this is yet to be translated into widespread behavioral change. An estimated 320,000 adult Ghanaians are living with HIV/ AIDS, of which about 180,000 (56%) are women. The HIV/AIDS pandemic results in loss of productive assets, high treatment costs and a break in the transfer of valuable livelihood knowledge from one generation to the next. Government has adopted the following strategies aimed at keeping the prevalence rate below 5%: reducing new HIV/ STI transmission, reducing the impact of HIV/AIDS related vulnerability, morbidity and mortality and enhanced the management of the national HIV/ AIDS response. HIV/AIDS affects human resource productivity and hence it is of direct concern to the agricultural sector in general and to the success of the Afram Plains Agricultural Development Project. 2.3.5 Malaria accounts for 45% of all outpatient clinic attendants at health institutions and is ranked 3rd in terms of causes of death. The incidence of Malaria remains the highest single source of morbidity and mortality in the country with improved case management receiving priority attention. In 2000 the Ministry of Health produced a Roll Back Malaria (RBM) Strategic Plan with the overall goal of facilitating human resource development by reducing the malaria disease burden. The priority interventions in the RBM plan include: improved malaria case

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management, enhancing multiple prevention through promotion of use of insecticide treated bed nets (ITN) especially by children and pregnant women; focused research and improved partnership with NGOs, private sector, informal sector, communities as well as traditional healers. 2.3.6 Environment and Natural resources: Environmental conservation and management is a priority for the Government of Ghana. The National Environmental Policy aims at ensuring a sound management of resources and the environment. It seeks reconciliation between economic planning and environmental development with the view to achieving sustainable development. The government is pursuing a policy of continuously improving and conserving the country’s environment. This has led to the creation of the Ghana Environmental Protection Agency (EPA) whose mission includes integrated environmental planning and management system established on a broad base of public participation, efficient implementation of appropriate programmes and technical services; giving good counsel on environmental management as well as effective and consistent enforcement of environmental laws and regulations. Currently, the government is implementing a number policies and programmes aimed at environmental protection and rational management of the country’s natural resource base.

2.4 Institutional Framework 2.4.1 Ghana has the necessary institutional framework with considerable professional expertise that would be required to implement the Afram Plain Agricultural Development Project. Nevertheless, there are some skills gaps that would need to be addressed in order to meet the implementation capacity requirements of the project. Below are the profiles of key institutions that will participate and/ or provide support in the implementation of the project 2.4.2 Ministry of Food and Agriculture (MOFA): MOFA’s mission is to promote sustainable agriculture and agribusiness through research and technology development, effective extension and other support services to farmers, processors, and traders for improved human livelihood. Following recent formation of the Ministry of Fisheries, which was hitherto one of the directorates under MOFA, now the ministry has eight technical directorates, namely: 1) Policy Planning, Monitoring and Evaluation (PPMED); 2) Animal Production (APD); 3) Crop Services (CSD); 4) Agriculture Engineering Services (AESD); 5) Women In Agricultural Development (WIAD); 6) Plant Protection and Regulatory Services (PPRSD); 7) Veterinary Services (VSD); and 8. Agricultural Engineering Services (AESD). MOFA was reorganized in line with the framework of the decentralization policy, which aims to transfer functional powers, means and competences to districts, closer to the farming communities. 2.4.3 District Agriculture Development Unit (DADU): based at Donkorkrom, in Afram Plains District discharges its responsibility for crops and livestock development activities through 32 operational areas in the district. The DADU is headed by a Director who is a holder of MSc degree in Agriculture. Other members of the DADU include: 8 District Development Officers (DDOs) who are subject matter specialist (SMS) in Monitoring and Evaluation (M & E),

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Management Information System (MIS) , Animal Production , Veterinary, Agronomy, Extension , Women in Agricultural Development and Post Harvest Technology. All the SMS are holders of BSc degrees. The DADU has not managed any donor funded project before. Given the potential of irrigation and rain water management in the district as well as more involvement of women in agriculture, the DADU’s capacity needs to be strengthened particularly in areas of gender, irrigation, rain water management. The DDA’s main function is to manage and implement the District Assembly’s agricultural programmes. 2.4.4 The Policy Planning, Monitoring and Evaluation Directorate (PPMED) co-ordinates activities of the entire MOFA. In particular PPMED co-ordinates policy and strategy formulation. PPMED collects data and information for policy planning and analysis. The Directorate, with six divisions or units, monitors public development investments and the performance of the sector as a whole. The AgSSIP Secretariat, the implementing agency, of projects in the agricultural sector is part of PPMED, and has been given the mandate to co-ordinate the implementation of public projects and programs in the agricultural sector. Both PPMED and AgSSIP are well staffed with professionals who have the appropriate skills. They have implemented projects funded by other donors. For instance AgSSIP carries out all procurement activities under the ADF financed Food Crops and Cashew Development projects. AgSSIP will require mobility and office equipment to adequately carry out additional activities under the proposed project. 2.4.5 Agricultural Services Sub-Sector Improvement Programme (AgSSIP): All donor funded projects in the agricultural sector were implemented by MOFA through specially created project implementation units (PIUs). MOFA is now pursuing a policy of streamlining the management and coordination of all projects under a single implementation unit. The Agriculture Services Sector Investment Programme (AgSSIP) is the vehicle for implementing this strategy. AgSSIP is a three to five year rolling programme divided into four thematic sub-programmes, namely a) agriculture support services; b) institutional and regulatory improvement and capacity building; c) public infrastructure and improved market access; and d) development of agricultural business sector. It is a long-term programme that aims at supporting the Government’s agricultural development goals by rationalizing the sectoral public expenditure and the role of MOFA and other Ministries, Departments and Agencies closely related to agricultural development. The approach used is to incorporate under AgSSIP all projects and programmes in the sector and to follow unified procedures as far as possible. The AgSSIP secretariat is staffed by a Programme Coordinator, a Deputy Programme Coordinator, a Financial Controller, five accountants, three procurement specialists and support staff. Given the number of projects in the sector, the capacity of AgSSIP is thinly stretched and needs continuous strengthening. World Bank and other donors are currently supporting AgSSIP and this effort could be complemented by the Bank. 2.4.6 Afram Plains District Assembly: The District Assembly (DA) is the highest political authority in each district. The Assembly has a total of 70 members 49 of whom are elected and 21 are appointed. Assembly members are responsible for deliberation, evaluation, coordination,

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and implementation of programs accepted as appropriate for the district's economic development. As constituted, District Assemblies have nine main committees including agriculture, finance and administration, education, economic development, social services, environment, works, justice and security and complaints and arbitration. The Assembly’s annual revenue collection amounts to about GHC 6.7 billion. This is collected from property rates, court fines, licenses, rents, investment incomes among others. Some of its external sources of revenue include central government support, grants, donor funding. The poor level of local revenue mobilization limits the ability of the assembly to finance significant development projects in the district. 2.4.7 Environmental Protection Agency (EPA): EPA formulates the national environmental policy, and co-ordinates and monitors activities that could have an impact on the environment. The EPA ensures that development plans and programmes take into account environmental concerns through Environmental Impact Assessments (EIA). EPA also ensures that there is regular monitoring of pre-determined environmental indicators. Where necessary, EPA enforces the environmental law. It disseminates public information on the state of the environment and carries out non-formal education programmes. The agency has the necessary manpower and capacity to undertake the responsibilities entrusted to it. 2.4.8 Ghana Irrigation Development Authority (GIDA): GIDA is a semi-autonomous agency of MOFA created in 1977 is mandated to formulate plans for the development of water resources for irrigation, livestock and fish culture, execute comprehensive programmes for effective use of irrigated lands in cooperation with other agencies involved in providing extension services to farmers. GIDA is established at central, regional and scheme level. The agency has a staff compliment of 379 of whom 135 are technical staff while the rest are administrative and support staff. Typical regional staffing levels are: 1 Regional Irrigation Engineer, 1 Regional Irrigation Agronomist and 4 Irrigation Extension Agents. The scheme establishment has a widely varying staff disposition depending on the size of the irrigation scheme. The Eastern region which covers Afram Plains District is currently un-staffed. This constrains effective irrigation extension and training of farmers. Afram Plains DADU does not have an Irrigation SMS. GIDA is currently involved in the supervision and management of the Bank funded Small-Scale Irrigation Development Project as well as other donor funded projects including JICA, WB and FAO. 2.4.9 Feeder Roads Department (FRD): The FRD is the Government body responsible for planning, development and maintenance of the feeder road network in the country. Currently there are a number of donors providing financial support towards the feeder road development, rehabilitation and improvement. Design and construction of civil works under the feeder roads programme is mainly carried out by local consultants and contractors respectively. FRD is established at central, regional and district levels. Typically one Engineer is maintained at district level. Lots for the civil works in different locations normally do not exceed 20 kilometres. The FRD has a highly skilled workforce for the supervision and management of its largely outsourced services. The FRD also receives resources from the Ghana Road Fund, which was established in 1997 for regular maintenance of the country’s feeder roads. The activities of the FRD are crucial to the performance of the agricultural sector since inputs and agriculture produce

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are bulky in nature and will require well maintained feeder roads to ease movement of such goods to and from the farming communities. 2.4.10 Non-Governmental Organizations (NGOs): Several local and international NGOs have been satisfactorily implementing projects in a participatory manner in the country. The NGOs continue to play a key role in the implementation of some Bank financed project activities mainly involving group formation and training activities. Three NGOs have offices in Afram Plains District: a) Afram Plains Development Organization (APDO); b) Freedom From Hunger – Ghana; and c) Recerca e Cooperazione (R&C). APDO has staff complement of 23 six of which six are graduates and the rest are diploma holder. Since 2003 APDO has implemented a number of donor funded projects in education, water and sanitation, environment and village infrastructure development. Its major donors are UNICEF, UNDP, DANIDA and Water Aid. Freedom From Hunger – Ghana, works in close collaboration with Afram Rural Bank to provide micro credit targeted at women for petty trading activities. The currently have one female manager based at Tease in the district. Recerca e Cooperazione (R&C) began its operation in the district in 1993 and so far has implemented projects estimated at Euro 3 million financed by the Italian Government. R & C projects include environmental management, agro forestry, cashew development, water and sanitation, capacity building and income generating activities. Its staff complement is 10; seven of which are men and three are women. Five of the staff members are graduates out of whom three are women. Three other NGOs have operations in the district but do not have field offices. These NGOs include a) World Vision International (WVI); b) ADRA and c) Foundation for Sustenance of Small Scale Farmers (FSSF). 2.4.11 Council for Scientific and Industrial Research (CSIR): is under the Ministry of Environment, Science and Technology (MEST) and responsible for most of the research in agriculture and forestry. It has 16 constituent institutes of which eight are involved in agriculture. The main agricultural research institutes are the Crop Research Institutes (CRI), the Animal Research Institute and the Food Research Institute. Other research activities relate to tree crops namely, cocoa, coffee, shea butter, kola nuts and cashew. For successful agricultural project initiatives, there should be constant back-up from research outcomes feeding into relevant extension packages. 2.4.12 Ghana Export Promotion Council (GEPC): is the national export trade support institution facilitating the development and promotion of non-traditional exports. GEPC was established in 1969 as an agency of the Ministry of Trade and Industry with the mandate to develop and promote Ghanaian exports. Its focus has primarily been to diversify Ghana’s export base from the traditional export products of Gold, Cocoa Beans, Timber Logs and Processed Timber as well as Electricity. Currently there are over 300 different non-traditional export products categorized into agricultural, processed/ semi-processed and handicrafts. GEPC has a clientele base of over 3,000 registered private sector exporting companies organized into 15 product associations. Its strategic areas of focus include: market access and development; product development; support for supply base expansion for selected priority products; trade information and communication; and exporter and institutional capacity strengthening.

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2.4.13 Forestry Commission: By the provisions of the Forestry Commission Act (Act 405) the Forestry Commission (FC) was given legal status. The FC is charged with the responsibility for managing, maintaining and protecting forests. The Forestry Services Division is the branch of the Commission which works with decentralized bodies at regional and district levels. A Regional Manager is responsible for all the forest districts in each Region. These responsibilities include ensuring that forest districts comply, inter alia, with technical standards provided by the FC. Afram Plains District is regarded by the FC as the front line where its staff will interface directly with the forests and the resource owning and fringe communities as well as with the local government. The FC is represented in the District Assembly. 2.4.14 Ministry of Fisheries: A new Ministry of Fisheries (MOFI) was formed in December 2004. The new ministry has the responsibility to regulate, and manage the utilization of the fishery resources of Ghana and coordinate the policies relating to fisheries development. The institutional framework is weak and staffing position inadequate and much of its work is still being undertaken through MOFA staff and offices. The total staff compliment is 438 out of whom 62 are professionals with university degree qualifications; 84 are technical officers with diplomas; 119 technical assistants and the rest are support staff.

2.4.15 Community Water Sanitation Agency (CWSA): provides water and promotes sanitation and hygiene services among the rural communities in the district. The Agency also undertakes environmental awareness in collaboration with other government agencies and NGOs involved in environmental awareness programmes. The Agency is headed by the District Planning Officer and is assisted by the District Health Officer and 3 staff members.

2.5 Rural Financing 2.5.1 The overall policy framework for microfinance in Ghana is informed by the poverty reduction strategy, which seeks to balance growth and macroeconomic stability with human development and empowerment in such a way as to positively reduce the country’s poverty levels in the medium term. The overall strategy emphasizes the reduction of inflation and the need to sharply reduce the fiscal deficit, as a key step to reduce the extent of the public sector’s crowding out of the private sector in the financial markets, and to help lower interest rates. Ghana has a small financial sector, consisting of 17 commercial banks, 121 rural banks, 39 non-banking financial (NBF) institutions, and an emerging stock market. Progress has been made towards improving the framework for prudential regulation. A major challenge facing the sector is strengthening the financial soundness of banks, and improving the access of resources to SMEs and ordinary Ghanaians. The major sources of agricultural credit are the Agricultural Development Bank (AgDB) and rural banks. 2.5.2 The Agricultural Development Bank (AgDB): The AgDB, established in 1965, provide credit for the development of agriculture and agro-based industries. It has a network of 45 branches. Its activities include identification and promotion of agricultural enterprises and

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mobilization of financial resources to meet the sector’s requirements. AgDB serves as a channel for bilateral and multilateral credit schemes. It has a wide geographical coverage with branches in most regions of the country. The institution has administered four Lines of Credit from the Bank. AgDB is currently managing credit components for six (6) Bank funded projects. The amount earmarked for credit components under the six projects add up to UA 17.8 million. Recent review of the performance of AgDB in administering the credit components noted that there are a number of problems including: low loan recovery rate (about 59%) and lack of monitoring mechanism. AgDB is in the process of evaluating the potential of opening a branch in the Afram Plains District or the possibility of working through the Afram Plains Rural Bank to provide credit resources to farmers in the district. This assessment will be completed by mid 2006 in time for beneficiaries of the proposed project to benefit from AgDB credit resources. 2.5.3 Rural and Community Banks: There are 121 rural and community banks in Ghana. The rural banks are supervised by the Apex Bank. The Bank Group is currently co-financing with IFAD and the World Bank the Rural Financial Services Project which is aimed at supporting the GoG’s efforts to develop a strong, effective and integrated rural financial services system in the country. Afram Plains Rural Bank (ARB) is the only rural and community bank in Afram Plains District. It was established in December 1982 and has its headquarters at Tease. It has three (3) branches at Donkorkrom, Makot and Techi. The total share capital is ¢192,000,000. Current portfolio includes 60% personal loans, 20% agricultural loans and 20% commercial loans. Recovery rate is almost 100% for personal and commercial loans while recovery rate for agricultural loans stand at 75%. Efforts are being made to improve the loan recovery rate for the agricultural loans. The interest rate charged for all its portfolio of loans is 30%, which is consistent with prevailing interest rates in the country. Afram Plains Rural Bank is currently negotiating additional resources from the Social Investment Fund (about GHC 400 million).

2.6 Agriculture Development Policy and Strategy 2.6.1 The country’s Vision 2020, launched in 1995, envisages an increase in employment and average incomes leading to a significant reduction in poverty levels and inequalities. The ultimate aim of Vision 2020 is to transform Ghana into a middle-income country by the year 2020. Under the vision, key objectives for the agricultural sector include: (i) ensure adequate food supplies at a reasonable cost; (ii) reduce unemployment in rural areas; (iii) encourage balanced regional development (iv) increase the sector’s contribution to GDP; (v) increase foreign exchange earnings through greater production of traditional export crops and diversification into non-traditional export crops; and (vi) improve linkage between agriculture and industrial development. The Government has defined specific strategies for attaining the foregoing objectives. These strategies include the essential elements for boosting performance of the sector including crop intensification, irrigation, livestock production, inland fisheries and strengthening of agricultural support services. 2.6.2 MOFA formulated the Accelerated Agricultural Growth and Development Strategy (AAGDS) with the objective of accelerating agricultural growth to 6% of GDP. AAGDS had

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five elements namely: 1. promotion of selected products through improved access to markets; 2. development of and improved access to technology for sustainable natural resource management; 3. improved access to agricultural financial services; 4. improved rural infrastructure; and 5. enhanced human resource and institutional capacity. AAGDS has outlined strategies to transform the agricultural sector. The first of these strategies is the establishment of Agricultural Services Sub-Sector Investment Programme (AgSSIP) which addresses elements 1, 2 and 5 as highlighted above. The other elements, improved access to agricultural financial services and improved rural infrastructure are partly addressed by the Village Infrastructure and Rural Financial Services Projects. 2.6.3 In realizing the goal of poverty reduction and also to achieve international benchmarks of the Millennium Development Goals (MDGs) the Government of Ghana produced its Ghana Poverty Reduction Strategy (GPRS) which was issued in 2003 with an implementation period of 2003 – 2005. The GPRS provided a policy framework directed primarily towards the attainment of the anti-poverty objectives of the UN’s Millennium Development Goals (MDGs). Following the expiry of GPRS in 2005, the Growth and Poverty Reduction Strategy (GPRS II) was released to be implemented during the period 2006-2009. Its central goal is to accelerate the growth of the economy so that Ghana can achieve middle-income status within a measurable planning period. The process of agricultural modernization forms an important facet of the strategic priorities that have been established under GPRS II. The Afram Plains Agricultural Development Project fits into GOG strategies for development of the agricultural sector, which lays emphasis on increasing and diversifying incomes for smallholder operators with a view to contribute to poverty reduction in the rural areas.

2.7 Donor Intervention 2.7.1 Agricultural and rural development in Ghana as defined in its Accelerated Agriculture Growth and Development Strategy (AAGDS) and amplified in the Food and Agricultre Sector Development Policy (FASDEP) is strongly supported by a number of donors including the World Bank, FAO, IFAD, USAID, Agence Française de Développement (AFD), as well as the Bank. The overall policy is concretized in a programme which covers all the sub-sectors of rural development. Development partners support programmes, projects and activities within this context. 2.7.2 The World Bank (WB) has supported a number of projects in the agricultural and rural development sector. Currently WB is financing the following projects: 1) Community Based Rural Development Project; 2) WB is also co-financing with the Bank and IFAD the Rural Financial Services Project; 3) Finally, the World Bank is also financing the Institutional Support of AgSSIP, which aims, among others, at supporting the enhancement of the efficiency of public sector agricultural services so as to increase production while maintaining or improving the natural resource base.

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2.7.3 IFAD financed projects in Ghana include: 1) Smallholder Credit, Input Supply and Marketing Project (SCIMP) for the establishment of a smallholder inventory credit scheme, improvement of production, storage, processing and marketing of food crops in Brong Ahafo, Ashanti and Volta regions. The project is near completion; 2) A second phase of the Land Conservation and Smallholder Rehabilitation Project (LACOSREP) in Upper East region, which promotes participatory rehabilitation of small dams originally built for livestock watering, and integrated through the project with a small irrigated command area by gravity; and 3) Root and Tuber Improvement Project to further increase smallholder productivity of cassava, yams, coco-yams and sweet potatoes, and the utilization of their end products. The project is on-going. 2.7.4 The Agence Française de Développement (AFD) is presently supporting the Lowland Rice Development Project in the Northern Region. The objective is to alleviate, through an integrated approach, the main constraints to the development of inland valley rice; and to promote an improved and economically viable production system. The project started in 2004 and has so far developed 150 ha. The main lesson drawn from implementing this project is the importance of the active participation of beneficiaries in land acquisition. 2.7.5 The USA: Millennium Challenge Corporation (MCC) is currently preparing a project, in collaboration with Millennium Challenge Account-Ghana (MCA-G), whose goal is “the promotion of growth and poverty reduction through private sector led agri-business development.” The goal of the project is the Reduction of poverty through economic growth led by agribusiness development initiatives, with two strategic objectives of 1) Increasing production and productivity of high value cash and food staple crops in three selected areas of Ghana and; 2) Enhancing the competitiveness of Ghana horticulture produce in regional and international markets. The program is implemented in three regions through three complimentary components: infrastructure development, private sector capacity building services and development of an enabling business environment. The total project cost is estimated to be US$535 million out of which US$90 million is targeted for Afram Plains Basin. The project will be implemented in 24 districts in the country including Afram Plains District. In the Afram Plains District MCA-G will finance the construction of access roads and agro-processing activities. 2.7.6 The EU is financing various infrastructure projects in the country including highways, trunk and feeder roads. In the Afram Plains District, the EU is financing the upgrading of 300 km of feeder roads. DfID financed an Institutions and Processes project for the Co-management of Volta Lake (IPCL) in Volta region. Among other things, this sought to strengthen fishermen’s associations in the region to enable them to manage their areas of the Lake and in the process it is hoped that over-fishing and the use of illegal fishing methods will be prevented. 2.7.7 The Bank Group is financing eleven (11) on-going projects in the agricultural sector in Ghana, two of which are multinational projects. Details of all the projects financed by the Bank are provided in Annex 6. In addition, on 5 April 2006, the Bank Group approved emergency assistance grant of US$500,000 for Ghana to combat and strengthen national capacity on prevention and response to Avian and possible Human Influenza. The total commitment for the

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seven projects and 3 multinational projects is UA96.9 million. The disbursement ratio ranges from 3% to 68% with average of 30.4%. The low disbursement in some projects relates to capacity in project implementation which was planned to be strengthened but has not yet kicked in mainly at the central coordination bodies. The quality of the portfolio has improved over the last few years. The Bank has conducted a training seminar and workshop in 2004 and 2006 respectively to improve project implementation. In addition, the Bank has intensified supervision missions and continues to undertake launching missions for all operations soon after loan effectiveness. This situation will be further improved by the opening of the country office in Ghana. The Government on its side has strengthened the AfDB desk by appointing another economist, in addition to improving its communication facilities. All projects submit audit reports on timely basis. 2.7.8 Lessons learnt from the Bank as well as other donor funded projects show that: a) participation and involvement of project stakeholders at all stages of project design, implementation, monitoring and evaluation enhances ownership and sustainability; b) project design should include sufficient time for star up activities and follow up phase for consolidation and institutionalization of activities, c) baseline information and efficient M&E system are necessary for successful project management and assessment of project impact, d) project should incorporate a clear gender focus that ensures that both men and women benefit from poverty reduction efforts, e) group formation is a key strategy employed to support project beneficiaries as it gives them bargaining power and a common voice; and f) increasingly both donor as well as government funded projects are selectively providing matching grants to support extremely rural farmers who may have difficulties in accessing conventional micro-finance resources. Such matching grants are applied mainly for the acquisition of productive assets (such as irrigation pumps). Such farmers are able to produce at economic levels and are able to access credit to meet cost of inputs into their production systems.

2.8 Constraints and Potentials 2.8.1 Constraints: The performance of the Ghanaian agricultural sector is still improving and can be improved further. Some of the problems experienced include: weak research-extension-farmer linkage; weak producer organizations; inefficient marketing system; poorly motivated public service; poor access to production areas; erratic rainfall and the resultant water insecurity for crop production; low investment in agro-processing; over-reliance on rain-fed agriculture; seasonal destruction of rangelands by bush fires; slow pace of appropriate technology; over-reliance on importation of machinery, spares and other inputs. The government of Ghana is addressing these constraints through the development and implementation of appropriate policies, strategies, programmes and projects of which the proposed project is one. 2.8.2 The overdependence on a rain fed system has made farmers vulnerable to external shocks. However the root of many of the problems in Afram Plains District is its isolation. The isolation of the district together with the inadequate maintenance of motorable roads poses a major constraint. The current ferry services are unlikely to offer a long term sustainable solution.

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The ferry services are quite slow and unreliable especially that they are operating on old engines. The construction of a network of access and feeder roads will provide lasting solution to the district’s isolation and open up the district for more businesses to be established. 2.8.3 Potential: Despite these constraints, a number of policy actions are provided in GPRS II to address the constraints in the agriculture sector in order to harness the country’s agricultural potential. It has an abundant natural resource base including: abundant agricultural land, fertile soils, and favourable climatic conditions for agricultural production. Its water resources and agricultural lands are yet to be fully exploited. Out of the total land area of 23.9 million hectares, arable land is estimated at 13.6 million hectares of which only 6.3 million (44%) is presently under cultivation. In addition the potential irrigable area in the country is about 500,000 hectares and of this only about 11,000 ha is under irrigation at present. There is scope to increase the role of irrigation in meeting the agricultural needs of the country. 2.8.4 Some farmers are already well organized in groups and associations and engaged in the production of crops, livestock and other activities. Farmers around Volta Lake have organized themselves into groups which are engaged in the production of vegetables and other crops using extremely low efficiency water withdrawal, distribution and application methods. There is scope for increasing water use efficiency and reduce the cost of pumping by up-scaling the use of more efficient irrigation methods and thus increase the profitability of irrigation investments. There are also prospects for increasing the efficiency of rain-fed production in the upland areas through adoption of rainwater management technologies. On average, every household in Afram Plains District own poultry, goats and sheep. There are also many farmers with a lot of cattle. These animals are mainly managed on free-range basis so they often cause a lot of damage to crops. There are therefore opportunities for introduction of fodder banks and water points with a view to improve livestock production as well as limit the conflict between livestock and crop farmers.

3. AGRICULTURE AND RURAL DEVELOPMENT SUB-SECTORS IN AFRAM PLAINS DISTRICT

3.1 Crops 3.1.1 The major crops grown in Afram Plains District include cassava, cashew, yams and maize, in addition to dry season vegetables. Production is rain-fed apart from the vegetables that are mainly produced by the informal irrigation sub-sector. The annual production average over the previous three years is 30,000 tons of cassava, 435,000 tons of yams, while production of maize varied greatly from 48,000 to 87,000 tons. The farmers use minimal levels of inputs and practice shifting cultivation. Productivity levels for major crops are estimated to be: 11 t/ha for cassava; 13 t/ha for yam; 1.6 t/ha for maize; and 0.8 t/ha for cashew. Empirical data shows that with application of improved technologies and improved extension services yield levels can be improved significantly to 20 t/ha for cassava; 28 t/ha for yam; 5 t/ha for maize; and 1.8 t/ha for cashew. All cassava is consumed within the district while over 80% of the yam and maize is

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exported to Accra and other neighbouring towns via the ferry at Ekye Amanfrom. In rain-feed crop production, women participation represents about 70%.

3.2 Livestock Over 90% of the households hold one or more type of livestock. Recent statistics reveal that livestock population in the district is: 177,330 heads of cattle, 62,201sheep 93,734 goats, 38,200 pigs and 394,000 poultry. The animals are managed on traditional free-range system. The live and carcass weights of locally managed animals are lower compared with animals under improved management systems. For example the carcass weight of local cow is about 85 kg compared to 150kg for those under improved management. In the same vein the carcass weight of local goat is about 20kg compared to 30 kg for animals under improved management. Carcass weight of local sheep weighs 22 kg compared to 35 kg under improved management. For poultry the carcass weight is about 1kg as against 2 kg with improved management. Cattle population is concentrated in the Dwarf Island area. Small ruminants and poultry are more evenly distributed throughout the district. Livestock husbandry methods commonly practiced include tethering, free range, semi-intensive, limited livestock housing and intensive management for commercial poultry layers. Most of the sheep, goats and chickens are consumed by families owning livestock or are sold within the District. However substantial numbers of cattle are sold out of the District. In livestock, cattle management is predominantly a man’s activity while small ruminants and poultry management are fully women’s responsibilities. However, women’s participation in livestock activities on average is about 60%. Currently there are inadequate grazing areas and water points/ dugouts in the district to meet the requirements of the livestock population.

3.3 Irrigation Two formal irrigation schemes at Amate and Dedeso produce vegetables including okra, pepper, onion, cabbage and garden-egg. The schemes were developed in 1980 with a total command area of 151 hectares using sprinkler irrigation with Volta Lake as the water source. Current annual production is reported to be 250 tons of vegetables by 200 farmers working on less than 25% of the original command area. In addition, informal irrigation is practiced along the fringes of Volta covering a total of about 1,325 hectares among 53 communities. The level of informal irrigated vegetable production output is slightly higher than within the formal irrigation schemes. The formal irrigation schemes are staffed by GIDA with a staff complement of 2 technical officers and four support staff. GIDA’s policy is to gradually rehabilitate the schemes and hand them over to the farmers for management. Women’s participation in the irrigated vegetable activities is presently estimated at about 70%. In some recent years Ghana has witnessed irregular rainfall pattern and this has affected Lake water levels fluctuations. This prompted the Volta Lake Authority to impose restrictions on irrigation water withdrawal from the lake. This restriction has not affected the informal irrigation farmer groups in the district but has been recognized in the design of irrigation interventions in the district.

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3.4 Fisheries There is no recent statistics on the number of people fishing on the Lake Volta. However, a Fisheries Study conducted in 1998 estimated that there were over 17,000 fisherfolk on the lake. There are no statistics on the number of fishermen/ women in the district but fishing is either the principal or a secondary occupation for an estimated 5,000 households among 230 fishing villages in the district. The estimated fish stock is about 2.7 million. Gill nets are the most popular method (70%) of fishing. Fishing using lengths of bamboo vertically hung from tree stumps or laid vertically on the Lake bed and used to attract gravid fish is used by 8% of the fisherfolk and is the next most used method. Traps are used by 7% of the fisherfolk. Tilapia constitutes about 40% and catfish (Chrysichthys) another 35 % of the catch. Local fresh fish consumption accounts for 26% of catch, while 68 % are smoked and sold within and outside the district. About 3,000 tonnes of smoked fish is exported from the Afram Plains every year. The Ministry of Fisheries is responsible for the fisheries activities in the country. One fisheries Officer is stationed in the district. Given the magnitude of fisheries activities in the district as well as illegal fish exploitation the one staff member is overstretched to cope with the fisheries activities in the district. In fishing production men’s responsibility is the actual fishing whilst other related activities such as processing and marketing is women’s responsibilities and thus women’s participation on average is 45%.

3.5 Forestry 3.5.1 In the Afram Plains District, the original vegetation which existed before the creation of the Lake Volta has been substituted by a forest savannah transition vegetation dominated by grasses. Secondary forest with a relatively closed canopy covers 2% of the district, open canopy secondary forest constitutes 6%, and 55% is covered by open savannah woodlands of various types. There are three protected forest reserves in the Afram Plains; Budu (11 km2), Obourakroma (26 km2.) and Fah (21 km2). The three reserves have been demarcated, pillared but are not gazetted. There are also about 200 hectares of plantations and woodlots and 500 ha of cassia. The remnant pockets of natural forests are being degraded by human activity such as opening up of farm lands, charcoal production and cattle grazing. Bush fires which are common during the dry season also pose a threat to forests in the district. Bush fires are used to clear land for cultivation, provide fresh grass for grazing but also used to drive game away from cover during hunting expeditions. 3.5.2 Charcoal production is rampant in the district. It is estimated that 25% of the charcoal consumed in Accra originate from Afram Plains District. This unsustainable felling of trees for charcoals burning has led to large-scale depletion of the forestry resources in an alarming manner. Deforestation has continued despite the passage of by-laws aimed at regulating these charcoal production activities. The implication of this is that the entire district is prone to environmental hazards due to the unsustainable harvesting of its forest resource base. Women’s participation in forestry management is estimated to be about 30%. In Afram Plains District only one Forestry Officer is attached to the District Assembly. Given the level of forestry exploitation,

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charcoal production and deforestation rate, one officer is over-stretched to deal with the challenges of sensitizing communities about forestry conservation and sustainable management as well as regulating forest resource utilization.

3.6 Road and Water Transport Infrastructure 3.6.1 Roads: There is no motorable access road to the district. Access to the district requires use of a ferry at Adowso - Ekye Amanfrom for 4.1 km across the lake. The alternative 120 km access road from Kwamepong Nkwanta is still under construction. The first 3.6 km stretch of the road was completed in 1990. The Afram Plains District has about 690 km of feeder roads of which about 39% have been engineered and graveled and are in a maintainable state. Many tracks exist and constitute the missing links in the road network in the district. There is one central trunk road in the Afram Plains District stretching from Ekye Amanfrom to Agodeke covering a distance of 100 km. There are ongoing contracts for the bituminous surfacing of the road. 3.6.2 Ferries: The Volta Lake Transport Company (VLTC) provides ferry services on the Lake and currently operates a 350-tonne ferry from Adowso to Ekye Amanfrom. The peak period in its service is during the yam and maize harvesting period during the months of September – March. During this period, up to 6 ferry trips are undertaken in a day. Data for June 2004 show that total operating expenditure including depreciation, was about ¢77million while revenue was estimated to be ¢140 million. There is a 3-year old joint operation by the Afram Plains District Assembly (APDA) and Kpando District Assemblies (KDA) of a ferry service between Agodeke and Kpando, a crossing distance of 18 nautical miles (about 35 km). In November 2004 recorded revenue was ¢ 60 million per trip and this just covered the cost of operation. Yet another smaller ferry operated by the Afram Plains District Assembly serves the Obosumano - Ntonabona crossing point on the lake. This is operated as a social service as, despite a small charge for vehicles, the revenue made does not cover the operating costs.

4. THE PROJECT

4.1 Project Concept and Rationale 4.1.1 Agriculture Growth and Development Strategy (AAGDS) and Food and Agriculture Sector Development Policy (FASDEP) provide a comprehensive framework for donor support to the agricultural and rural development in Ghana. It is within this framework that the interventions of the USA-MCC and EU-FRIP, to improve the competitiveness of horticultural exports in the Afram Plains in general and upgrading of some feeder roads in the Afram Plains district in particular, are conceptualized. The Bank group intervention is designed to complement and consolidate these interventions. 4.1.2 The project feasibility study entailed extensive discussions with various stakeholders including project beneficiaries, government officials, NGOs, private sector, study steering

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committee as well as representatives of bilateral and multilateral agencies in Ghana. The appraisal mission also met with key stakeholders to discuss the project design and implementation modalities. The design of the project therefore has extensive input from the stakeholders who comprised small-scale farmers, representatives of the Afram Plains District Assembly, EPA, NGOs, private sector operators, Chamber of Commerce, Export Promotion Council, Government officials at national, regional and district levels; representatives of donors involved in agriculture and rural development including the World Bank, EU, DFID, JICA and others. In all the discussions, the project received support and valuable recommendations for effective collaboration with other donors supporting various interventions in the Afram Plains District. Lessons from various Bank as well as other donor funded projects in Ghana have also been integrated in the project design 4.1.3 The current farming system in Afram Plains District is mostly rain-fed and the irrigation potential in the district is yet to be fully developed. The project will promote rainwater management and the development of the irrigation potential through the use of appropriate water management technologies that are simple, adaptable and affordable by the farmers. In the Afram Plains District, water for irrigation development could theoretically come from four sources: Lake Volta; boreholes; small earth dams and improved water harvesting. Large-scale irrigation using water resources from Lake Volta would be a very costly option. Various options were evaluated and found to be technically and economically unviable. The only option left therefore is the surface irrigation using water resources from the fringes of Lake Volta and its river systems. 4.1.4 The project will improve access to high yielding seed and other planting material as well as other farm inputs and link the project beneficiaries with existing sources of farm credit. The project will introduce the concept of matching grants where project resources will be made available to the poorest segments of project beneficiaries to enable them acquire productive assets. The groups have been identified on the basis of the following criteria; a) demonstrated interest in irrigated vegetable production; b) the majority of the groups have a higher percentage of women who use pails/ buckets to draw water for irrigation purposes thereby affecting time available for other productive activities and household chores; and c) their willingness to continue to work in groups as the support will be provided to such groups. Project resources will be used to support such poor groups to acquire productive assets including irrigation pumps which will be run and maintained by the groups from their returns. 4.1.5 The project is in line with Government priorities and objectives of increasing national food production as a contribution to self-sufficiency, reducing foreign exchange expenditure, raising household incomes and employment creation. Interventions in improved food crop production through rainwater management, community irrigated vegetable production, improved livestock production will directly benefit women and children and the poorer strata of society, since these activities are undertaken mainly by women. The proposal to lay emphasis on poverty reduction is consistent with the ADB Group strategy for the agricultural sector in Ghana as outlined in the Country Strategy Paper. The project is also consistent with the Bank’s agricultural

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development strategy as well as the integrated water resources management policy. Furthermore the project is consistent with Pillar 1 of CAADP: sustainable land management and water control.

4.2 Project Area and Beneficiaries 4.2.1 Project Area: Afram Plains District covers a total area of about 823,260 ha. Development of the district has lagged behind the rest of the country. The situation is further aggravated by its isolation from the rest of the country due to the physical barrier formed by the Volta Lake. About 87% of the rural population in the district is poor compared to the national average of 42% in rural areas. Recognizing the high agricultural potential highlighted in Chapter 1, in terms of available arable land, soil fertility and rainfall pattern and in pursuance of balanced regional development, the Government of Ghana is presently encouraging donors to support development in the Afram Plains Basin in general and the district in particular. This project will complement Government efforts in this regard. 4.2.2 The Afram Plains Basin consists of seven districts; namely: 1. Ejura-Sekyidumase; 2. Sekyere West; 3. Sekyere East; 4. Asante Akim North; 5. Kwahu South; 6. Fanteakwa; and 7. Afram Plains. Afram Plains District is the largest of these districts. The district is mainly agrarian and the farming system consists mainly of slash and burn shifting cultivation. The major crops grown include yam, cassava, bananas, plantain, maize, cotton, groundnuts, cashew and irrigated vegetables production mainly along the coastal areas. Less than 20% of the total arable land is currently used for agricultural production. Land availability is therefore not a constraining factor. The project will be implemented in Afram Plains District covering all its 32 operational zones. 4.2.3 Project Beneficiaries: Afram Plains District has a total population of 161,754 and growing at an estimated rate of 3.6%. The district is made up of a total of 685 communities living in towns, villages and settlements. The inhabitants of the district are involved in five clusters of agricultural activities namely: i) rain-fed crop production, ii) irrigated vegetables production, iii) livestock management, iv) fishing and v) forestry management. The average per capita income in the district is about ¢ 80,000 which is by far lower than the per capita income figure for the country which is about average national figure of ¢ 2,730,000. In all an estimated 23,616 farm families (22,640 for rainwater management and 971 for irrigation) will directly benefit from food crop and irrigated vegetable production interventions representing about 80% of the total population of the district. In addition, about 3,300 farm families living in 223 fishing villages are engaged in fishing activities. Furthermore, about 65 existing livestock farmer groups with total population of 1,625 farmers will directly benefit from the project activities. Furthermore sustainable forest resource management will be introduced thereby benefiting all the inhabitants in the district. As project activities will be mainly on farmers’ fields and the beneficiaries are willing to contribute their labour and have the appropriate resources and time to do so.

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4.2.4 Women are already participating in each of the major five clusters of activities at different levels. The district inhabitants are predominantly smallholder farmers (each cultivating about 2 ha), cattle and small ruminant herders and fisherfolk. The farmers in the district are aware of the available technologies that can improve the productivity of their crop, livestock and irrigation activities and are willing to contribute labour and participate in project activities aimed at improving their well-being. It is expected that women’s participation in different project interventions will reach about 65% of the project beneficiaries as most of the project interventions are traditionally undertaken by women. On average, out of their 2 ha plots the majority of farmers grow 1 ha of maize, 0.5 ha of yam, 0.5 ha of cashew or other cash crop and 0.25 ha of cassava. Typically cashew plots are intercropped with soya beans, pineapples or vegetables in the first 4 years of establishment before the canopy of the cashew stand closes.

4.3 Strategic Context 4.3.1 The strategy for poverty reduction, stipulated in the Accelerated Agricultural Growth and Development Strategy (AAGDS) and the GPRSII lays emphasis on fast economic growth, through agricultural modernization and development, to generate increased employment opportunities, and improved access to key services for development. The majority of Ghana’s population continues to depend upon farming activities for their livelihood, and typically they cultivate small acreages. The GoG has adopted AAGDS to be implemented through Agricultural Services Sector Investment Programme (AgSSIP) which will contribute to broad-based poverty reduction and to ensure food security by promoting selected agricultural commodities for which Ghana has or can develop comparative advantage to satisfy domestic requirements for food and to increase household incomes for smallholder farmers. 4.3.2 The central goal of GPRSII is to accelerate the growth of the economy so that Ghana can achieve middle-income status within a measurable planning period. No significant progress can be made in raising the average real incomes of Ghanaians as a whole without significant improvements in the productivity of the small-scale farmer. The means for securing such increases in productivity range from improving the complement of equipment and tools with which the small-scale farmer earns his/ her living, through application of scientific and technological improvements to the farming practices and promotion of irrigation, high value horticultural production, and fish farming. The process of agricultural modernization constitutes one of the most important priorities that have been emphasized under GPRS II. 4.3.3 The project seeks to improve the agricultural output and incomes of the beneficiary farmers and contribute to the well being of the people of the Afram Plains District. It is designed to address the major constraints affecting agricultural production and marketing. The project is within AgSSIP and is in line with priorities of the GoG's Agricultural Development Strategy. The project is consistent with the Bank Group vision and strategy for Ghana, which focuses on food security and poverty reduction. The Bank’s Country Strategy Paper (2005-2009) emphasizes the improvement of the investment environment, which would trigger increased productivity of the agricultural sector. The Bank Group’s assistance strategy is aligned with the

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Government’s GPRSII through two strategic pillars. Pillar I provides for Bank interventions in agriculture and rural development through promotion of non-traditional high-value crops and a gradual shift from subsistence to commercial farming using irrigation and other interventions. Among others, Pillar II supports the deepening of the rural asset base through rural community-based infrastructure projects and the spread of micro-credit as part of the Bank Group’s strategy to promote poverty reduction in the rural areas of Ghana.

4.4 Project Objective 4.4.1 The sector goal is rural poverty reduction and food security. The specific objective of the project is to increase the agricultural output and household incomes of the beneficiary farmers.

4.5 Project Description 4.5.1 The project is made up of four main components namely 1) Production Development; 2) Infrastructure Development; 3) Institutional Capacity Building; and 4) Project Management. The project will promote intensive crop production using rain water management technologies in existing 45,290 ha in upland areas; efficient community based irrigation systems in existing 1,940 ha in 53 sites using water from Lake Volta; improve delivery of extension services and access by farmers to high yielding seed/ planting material and other productive inputs; improve livestock management; restock Lake Volta with 3 million tilapia fingerlings; promote live fencing to reduce the damage caused by wild fire; and institute sustainable forest management. The project does not have a credit component but beneficiary farmers will be linked to existing credit facilities in the country to enable them acquire improved seed, fertiliser and other productive inputs. Other main outputs of the project are: strengthening human and logistical capacity of DADU and AgSSIP through capacity building, training and mobilizing and training the project beneficiaries into functional groups and associations capable of managing their productive activities and negotiating better prices for their produce. A) Production Development

i) Crop Production Improvement 4.5.2 Rainwater Management: The project will promote rain water management technologies through appropriate land husbandry practices, proper alignment of bunds and ridges as well as the application of organic manure and other technologies. At the beginning of the project implementation sensitisation workshops will be held to discuss with project beneficiaries about the implementation modalities of rainwater management activities. Project activities under this sub-component will be implemented on a demand-driven basis. NGO services will be utilized for the implementation of the project activities under this component. The Terms of Reference for the recruitment of the NGOs will provide for inclusion of a gender expert in the team of experts to be provided by the NGO. The Bank is currently financing a study on rain water management under the multi donor partnership. Part of the output of the study will include

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recommendations on best practice in rainwater management. The project implementation will adopt the recommendations of the study. The selected NGO will sensitise, mobilise and train selected farmers and local leaders in rain water management activities including proper alignment of contour bunds and ridges as well as other land husbandry technologies. The NGO will also undertake necessary survey of the agricultural lands in the project area. 4.5.3 The selected NGO will group the total beneficiaries of this activity into 900 groups each with 25 members. In implementing the rainwater management activities, the project will provide necessary working tools/ materials required for the construction of the contour bunds and vetiver grass for stabilization of the bunds. The project beneficiaries will contribute labour for the construction of the contour bunds, alignment of ridges and planting of vetiver grass in their fields. Rainwater management technologies will be implemented in: about 16,984 ha of maize, 11,323 ha of yam, 11,323 of cashew and 5,660 ha of cassava. In order to achieve these objectives, provision has been made to enhance extension services delivery. The NGO with the support of MOFA experts on rainwater management based in the North and Brong Ahafo will train AEAs and beneficiary farmers who in turn will train additional farmers. Rain water management activities would be supervised and coordinated by a Technical Assistant (Rain Water Management Expert) recruited and stationed at DADU. 4.5.4 Seed Multiplication: The project will select 50 seed growers out of the 22,640 households involved in rainwater management activities to be trained by the Grain and Legumes Development Board (GLDB) in the management and production of certified seed. Selection criteria of seed growers will be based on experience, land availability, and willingness to participate in this activity. Improved seed for maize will be obtained by the project from Crop Research Institute (CRI), improved planting material for cashew will be obtained from the on-going Bank funded Cashew Development Project while improved planting material for cassava and yam will be secured from the on–going Roots and Tuber Improvement Programme and provided to the selected 50 seed growers for multiplication. The selected seed growers will be supervised by the Grain and Legumes Development Board (GLDB) to ensure that quality standards are maintained. The GLDB will certify the seed produced in accordance with its laid down procedures. The seed growers will make the improved seed and planting material available in their communities to be sold to farmers. The project will bear the cost of foundation seed and improved cashew, and root and tuber planting material as well as the cost of the necessary training for the certified seed producers. 4.5.5 Improved Irrigated Vegetable Production: The project will introduce efficiency in water use for irrigated vegetable production. This activity will be implemented by the existing 971 farm families in 53 farmer groups involved in the informal irrigation scheme in 22 communities. On average each farmer group has 25 members of which 16 (about 70%) are women. DADU will register and circulate among the communities and public authorities the list of all existing irrigation farmers. The project will hold a total of 22 sensitization workshops (one in each community) to introduce the implementation modalities for this activity. Farmers will need to express their interest in construction of the appropriate platforms made of local materials to

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ensure commitment and participation. The project will provide plastic tanks of about 200 litres of water along with five drip irrigation T-Tapes of 100 metres each to the farmer groups who would have constructed the required platform for the tanks as designed. A Technical Assistant (Irrigation Engineer) will be recruited to support the implementation of the irrigation activities. 4.5.6 Selected suppliers will provide, install and test the drip irrigation system and train the farmers along with AEAs on its operation and maintenance. Agricultural Extension Agents (AEAs) will be trained to enable them assist farmers in the operation and maintenance of the irrigation system. The specifications and installation of the equipment will be carried out by a local supplier selected on competitive basis, under the guidance and supervision of GIDA staff. The principal irrigated vegetables that will be promoted under the project are pepper, tomatoes, okra and onions. These are crops already being cultivated by farmers in the existing irrigation schemes and have proven to be popular and profitable. The introduction of the efficient technology will be backed up with farmer training and provision of adequate extension services in irrigation agronomy practices such as appropriate planting time, optimum cropping intensity, pest and diseases control, post-harvest management and marketing. 4.5.7 About 30% of the irrigation farmer groups (20 groups) presently are operating without irrigation pumps. The project will introduce the concept of matching grants to assist poorest farmer groups to acquire irrigation pumps. These groups have been identified on the basis of the following criteria; interest in irrigated vegetable production; the majority of the groups have a higher percentage of women who use pails/ buckets to draw water for irrigation purposes thereby affecting time available for other productive activities and household chores; their willingness to continue to work in groups as the support will be provided to such groups. The farmer groups will contribute 40% of the cost of the productive assets, and the remaining 60% will be provided as matching grant from the project resources. The identified 20 groups which consist of poor farmers will submit three invoices from reputable suppliers to the project management in DADU for approval. The farmer group representative will also provide receipts as evidence of payment of 40% of the cost of the irrigation pumps as their contribution. The project will pay the 60% contribution upon delivery of the irrigation pumps to the beneficiary farmer groups. ii) Livestock Management 4.5.8 Fodder Banks and Dugouts: The project will establish five fodder banks at selected major livestock production sites namely: Dwarf Island, Forifori, Amankwa-Tornu, Chemfre and Maame Krobo. Each fodder bank will be approximately 200 hectares to provide grazing lands for the livestock and specifically for cattle. The fodder banks will be clearly demarcated, fenced, provided with dug outs for provision of water points for the cattle. The fodder banks will be partitioned into paddocks to prevent over grazing. Grasses and leguminous plants such as stylosanthes will be purchased by the project and planted by the beneficiary communities to ensure availability of feed all year round. To ensure full ownership and sustainable management of the fodder banks, the site selection, planning, development and operation of the fodder banks will be undertaken by the community livestock committees/ associations. The livestock

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association will also determine from time to time on the appropriate fees chargeable for non-resident pastoralists who may wish to utilise the fodder banks to graze their animals. The project will cover the cost of establishing the fodder banks, constructing the dugouts, cost of securing planting material for the appropriate grasses and leguminous plans and the training of the livestock associations. 4.5.9 Genetic Improvement: The project will sensitize beneficiaries of livestock community on the livestock development activity under the project and inform them on the implementation procedures. Farmers will be requested to make their choice of the type of services they need to improve the genetic makeup for their animals. Under the direct supervision and management of the veterinary officer at DADU, supported by community livestock workers, the project will purchase (i) 20 genetically improved bulls, (ii) 100 male goats, (iii) 100 male sheep and (iv) 500 cockerels from the breeding stations which are provided under the on-going Bank- financed Livestock Development Project (LDP). The project will also provide funds for the improvement of laboratory testing and surveillance equipment against Avian Flu and other communicable poultry diseases. The animals will be exchanged from one livestock group to the other with a view to improving the carcass weight as well as milk production for cattle. The veterinary officer at DADU will ensure efficient use of the male animals according to a time table agreed upon by the participating beneficiaries. Community livestock workers will keep records, and ensure that at predetermined periods the male animals are moved from one group to another. AEAs will be trained by the SMS on appropriate animal husbandry practices. Beneficiaries will not pay any fees but rather they will provide appropriate housing, feeding and water during the time the male animals will be in their group. 4.5.10 The project will cover the cost of purchasing the improved male animals and the training of the beneficiaries in animal husbandry practices including housing, feeding and disease control. The project will also support the vaccination of cattle, sheep and goats against the major killer diseases of ruminants. Project resources will also support the training of 26 community livestock workers (paravets) as well as provision of basic kits for their use in their community based service delivery. They will undergo basic training at National Veterinary Training Institute (VTI) in Kumasi for 2-3 weeks. The training will include identification and treatment of common animal diseases. The project will also provide resources to support the Veterinary Department to vaccinate animals against the major diseases in the project area. The project has made provision for the rehabilitation of laboratory and office as well as provision of relevant office, laboratory and field equipment. (iii) Fisheries Resources Management 4.5.11 In order to address the problem of declining fish resources in Lake Volta, 3 million fingerlings (1 million per year for 3 years from) mainly of tilapia will be raised at Ministry of Fisheries’ Eastern Region laboratories at Koforidua for restocking in Lake Volta. A sensitisation workshop will be held at the beginning of the project in order to discuss with project beneficiaries about the implementation procedures of this project activity. Fisherfolk will be

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trained to raise fish in cages within the lake through the introduction of “acadja” technology in order to further increase fish stock in the lake. A total of 240 cages (2 per fishing group) will be introduced. Fisherfolk associations will be established where they do not exist and strengthened where they already exist through provision of relevant training. Drawing lessons from the completed DFID funded fisheries project, fisherfolk groups will be strengthened and empowered to become focal points for effective enforcement of by-laws aimed at regulating illegal and unsustainable fishing practices in the lake. The fisherfolk associations will be trained on effective group dynamics, financial management, record keeping, techniques of effective stocking and acadja technology and sustainable management of fish resources and fish processing and marketing. The project will cover the cost of mobilising and training the fisherfolk, introduction of acadja technology (fish cages), breeding 3 million fingerlings and restocking the lake. The project will also provide necessary support for the enforcement of relevant by-laws. In addition the project will cover the cost of training one and three staff members to BSc and 3 Diploma levels respectively in fisheries management within Ghana. Gender will be a consideration in the selection of candidates.

(iv) Forestry Conservation and Reforestation 4.5.12 Given the risk posed by bush fires to crop production and the continued deforestation as result of charcoal burning, project beneficiaries will be encouraged to establish green firebreaks. Ten (10) community nurseries will be established each producing 25,000 seedlings of appropriate species on an annual basis. At each community nursery, a committee of three persons will be elected, one of whom will be a woman. These seedlings will be used by the participating farmers in the establishment of green firebreaks around their homes as well as woodlot establishment. Each nursery will sell a proportion of seedlings raised in order to generate income for the nursery. The project will also compliment the efforts of the R & C supported project in supporting community based environmental management training, and enrichment planting of severely degraded forest area. Community based forestry committees will be established to provide leadership in the implementation of the provisions of the forestry management and harvesting plan. 4.5.13 A short-term consultant will be hired to assist in drawing up a management and harvesting plan for the forest resources of the Afram Plains District. Project resources will cover the cost of hiring the short-term consultant, procurement of all the necessary working tools and inputs for the community nurseries including polythene tubes, forest seed, fertilizer, watering cans, hoes, shovels etc. Project beneficiaries will provide the required labour. Project resources will also cover the cost of relevant community training courses, workshops and regular meetings to review progress of implementing the community management and harvesting plans. The project will also cover the cost of training one BSc and 3 Diploma students respectively within Ghana. Staff members will compete for the training bursaries.

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B) Infrastructure Development Component 4.5.14 The project will complement the efforts of the Government of Ghana, EU and USA-MCC to address the infrastructure constraints in the district. USA-MCC is building 350 kilometer trunk roads in order to improve access to and from the district. EU is also constructing 300 kilometers of feeder roads while the Government of Ghana is doing 60 km of feeder roads. 4.5.15 Upgrading Feeder Roads: The project will upgrade 200 km of feeder roads in the district. The works will involve spot improvement, provision of drainage as well as culverts. Consultants will be engaged to undertake detailed designs of the roads. Local contractors will be engaged through transparent and competitive selection procedures for the upgrading of the feeder roads under the supervision of the Department of Feeder Roads (DFR). 4.5.16 Boreholes: A total of 20 boreholes will be drilled to provide potable water to about 6,000 people of the project beneficiaries. The project will fund the cost of procuring hydro-geological consultants who will undertake geophysical and/or electromagnetic surveys and discuss with relevant communities to ensure that the boreholes drilled are at the best locations. Management of each borehole will be undertaken by the community water and sanitation (WATSAN) committees of seven person including the chairperson, secretary, treasurer, maintenance artisan and three committee members of which at least 3 will be women. The project will finance the mobilization, formation and training of 20 WATSAN committees in the operation and maintenance of the boreholes. Drilling contractors will construct the boreholes under direct supervision of the Community Water and Sanitation Agency (CWSA) and WATSAN committees. Mobilisation and training activities will be contracted to a local NGO. Community mobilization and training activities will commence during 2007 and borehole drilling undertaken during 2007 and 2008. 4.5.17 Ferry Services: The 350-tonne cargo-ferry which is operated and managed by Volta Lake Transport Company (VLTC) between Adowso and Ekye Amanfrom is the major means of transportation for the inhabitants of the Afram Plains District. In addition there are two other small ferry crossings at Agodeke - Kpando and Obosumano– Ntonaboma. To ensure sustainable increase in incomes for the project beneficiaries, transportation for marketing their produce is an essential factor. The project will therefore rehabilitate two VLTC cargo-ferries to ensure their efficient operation and sustainability. The project will finance a study to lay-out a sustainability plan for the management of the ferry service. The study will provide a business and management plan as well as optimization model for the operation and maintenance cost. The study will propose means for private sector promotion to invest in the provision of private ferry services especially 50-tonners to serve the Ekye Amanfrom to Adowso and Agordeke to Kpando routes. Results of the study will be communicated to the Investment Promotion Centre and will also be disseminated through Radio and TV programmes to promote private investment and business opportunities in the ferry services.

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4.5.18 Market facilities: The project will select ten sites for the construction of marketing facilities for crops and livestock products. Site selection will be based on observation of the actual and present marketing places that are already used by beneficiaries. This will ensure ownership and sustainability. Five basic marketing structures for crops and vegetables and five for livestock will be constructed. The market structures will be simple and shall be provided with basic facilities and sanitary conditions including water, sanitation and lighting. Construction of the market places will be contracted out to local contractors. The marketing points will provide middlemen/women and processors with opportunity to meet project beneficiaries for buying/ selling of various agricultural products. Beneficiary communities will elect Community Market Committee (CMC) consisting of three people, at least one of whom will be a woman. User fees will be determined and reviewed from time to time to be charged for the use of the market facilities. Each CMC will have the opportunity to improve marketing facilities by introduction of a cooler system and other facilities to be financed from the collected fees. 4.5.19 Crop Storage Facilities: Non availability of adequate storage facilities is a disincentive to increased agricultural production. This is largely because prices are depressed during harvest time as a result of over-supply. Availability of improved storage facilities would enable farmers release their produce onto the market when prices are favourable. In this regard, five demonstration storage facilities will be constructed in five (5) selected major maize production sites (Donkorkrom, Forifori, Tease, Maame-Krobo, and Agodeke) in the project area to demonstrate best practice in post-harvest management and crop storage. In each site, beneficiary communities will be sensitized, trained and requested to elect a Storage Facility Management Committee (SFMC) consisting of three members (Chairperson, Secretary and Treasurer) at least one of whom will be a woman. 4.5.20 Beneficiary communities will participate in the selection of appropriate sites and provide local material in addition to their labour for the construction of the storage facility. The project will provide roofing materials as well as equipment to be installed in the storage facility such as dryers, sieving and cleaning equipment. The project will prepare simple feasibility studies that indicate the magnitude of operation and maintenance cost and thus the economic user fees to be charged for the use of the storage facilities. Members will have to agree on an affordable user fees to be charged according to the volume of the produce stored and the time of the storage. Fees will be used to maintain the storage facility. For construction of additional storage facilities in other sites in the district, the project resources will be used to mobilise and train project beneficiaries to access credit resources from existing finance institutions with a view to constructing similar structures. 4.5.21 Rehabilitation of Office and Staff Houses: The project will finance the renovation of DADU offices as well as staff houses, The DADU offices are in bad state of repair due to inadequate budgetary allocation for maintenance. In addition DADU staff are living in houses that have not been maintained/ pained for many years. Project resources will be used to rehabilitate such houses. A total of 330 square metres of office space will be rehabilitated and adequately furnished and 60 square metres of veterinary clinic will also be rehabilitated and

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equipped. In addition, 570 square metres of residential accommodation for DADU staff will be rehabilitated. Discussions will be held with GoG to ensure that adequate allocation of budgetary resources will be provided to finance subsequent maintenance of such offices and houses. C) Institutional Capacity Building 4.5.22 To address the weaknesses in the capacity of DADU, the project will undertake to improve; i) efficiency of extension service delivery; ii) the ability of the Afram District Assembly and District Agricultural Development Unit (DADU) to collect, analyse, collate and disseminate agricultural data and information; (iii) the capacity of the Afram Plains DADU to plan and implement effective interventions, including monitoring and evaluation, (iv) support basic seed multiplication using the contract farmer approach; v) enhance the capacity of farmer groups to improve their irrigated vegetable production; vi) to train farmer groups to improve efficiency and profitability of their crop and livestock enterprises; to enhance the capacity of fisherfolks to manage and utilize fish stocks of the Volta Lake on a more sustainable basis; to support the production of forestry of management plans and community forestry harvesting plans. To achieve this, the project will provide training, transport, office equipment and budgetary resources to the following focal points: 4.5.23 At Beneficiary Farmers Level: Two NGOs to be selected on competitive basis, will be hired to provide services including: mobilization, training and organizing the estimated 22,640 project beneficiaries into 1,138 farmer groups (900 groups for rainwater management, 53 groups for irrigated vegetable production, 120 groups for fishing activities and 65 for livestock production). To the extent possible, existing groups will be used and strengthened. However where such groups do not exist they will be established. The selection of the beneficiary farmers will be based on demand-driven basis and farmers’ interest. Currently, about 70% of the members involved in irrigated vegetable production are women. The project will endeavour to sustain this level of participation and involvement and encourage more women farmers to join the irrigation schemes as well as other interventions under the project. Technical skills training will be provided in groups of 20 to 25 participants through Farmer Field Schools (FFS). To improve the farmers’ capacity to implement and manage interventions promoted under the project the project will provide training in the following areas: i) group dynamics, group formation and team building; ii) participatory training and extension; iii) water and environmental management; iii) basic book keeping and farm budgeting; iv) marketing; and v) credit management. Two farmer group field tours will be undertaken each year to enable the farmers appreciate how farmers in other projects implement similar project interventions in the country and also to exchange technical as well as marketing information. The project will also support the training (4 per annum) of certified private seed growers in order to ensure good quality and conformity with required standards. The supply of quality seed and planting material of the various targeted crops is an important aspect of the project design. A total of 8 farmer field days will be organised on an annual basis to showcase results of the various on-farm demonstrations to be promoted by the project.

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4.5.24 At District Agricultural Development Unit (DADU) Level: The project will strengthen the capacity and skills of staff of Afram Plains District Agricultural Development Unit (DADU) through provision of Technical Assistance (TA), transport, office equipment and on the job training as well as post-graduate training. Three TAs namely gender specialist, rain water management expert and irrigation engineer will be recruited in order to support project implementation. Staff training will be based on needs assessment. The project will fund the training needs assessment survey in project year 1. The 32 Agricultural Extension Agents (AEAs), 8 District Development Officers (DDOs) and the District Director will all receive refresher course training to better prepare them for their respective roles in the project. In addition 4 staff from the collaborating partners including Fisheries Officer, Forestry Officer, Irrigation Engineer and Feeder Roads Engineer will also be trained. A total of 44 motorcycles will be provided to the DDOs, AEAs and staff from collaborating partners to facilitate their mobility. The motorcycles will be provided on an ownership scheme through which the government will deduct from the officers’ monthly salaries till the total cost of the motorcycles is recovered. The project will provide budgetary support to cover the operating cost of the motorcycles. Currently the district has one unserviceable pick up vehicle which breaks down often and limits field activities. In view of the increased level of activities to be introduced by the project, and the scattered locations of the communities, the project will provide 5 double cabin pickups to facilitate extension service delivery as well as distribution of inputs to the project beneficiaries. 4.5.25 Subject Matter Specialists (Agronomy, Animal Production, Extension, Agricultural Engineering, Veterinary, Management Information Systems, Women in Agricultural Development) based at DADU in Donkorkrom will receive on the job training in order to enhance their knowledge and skills. The SMSs in turn will train AEAs. The detailed training programmes will be prepared by the implementing agency based on the outcome of the training needs assessment and approved by the ADF at the start of the implementation of project activities. Furthermore the project will support external training of 6 staff members at MSc level in M&E, Livestock Production, Irrigation Engineering, Agricultural Economics, Agronomy and Natural Resources Management. The project will also support training of 6 staff in specialized courses in the various universities within Ghana in the following subjects: fisheries management, irrigation, forestry and natural resources management, extension, agronomy, and post-harvest management. 4.5.26 GIDA Training Centre: GIDA’s training centre at Ashaiman is used for both staff and farmer training. It runs 6 week courses for farmers engaged in irrigation activities. The AEAs in Afram Plains District will receive their training at this institution. The AEAs in turn will train the project beneficiaries involved in irrigation activities. The project will support the training centre’s operations by providing one desk top and one lap top computer. 4.5.27 Extension Services: The District Agriculture Development Unit has 24 Agriculture Extension Agents (AEAs) to cover the 32 operating zones in the district. MOFA has indicated its commitment to deploy additional AEAs to all the vacant operating zones. The AEAs would

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receive on-the-job refresher courses to prepare them to effectively be able to advise project beneficiaries on the various interventions to be promoted under the project. The project will supply all AEAs with motorcycles in the project area in order to facilitate and enhance their mobility. The motorcycles will be owned by the AEAs on a cost recovery basis spread in equal monthly instalment over a 3 year period. This will guarantee adequate maintenance and effective use of the motorcycles. The project will finance regular subject matter workshops, field allowances and field level training for farmers, processors, and women as well as the youths. 4.5.28 Rural Bank: Afram Plains Rural Bank is the only rural bank operating in the project area. It has the main office at Tease and has branches at Donkorkrom and Maame Krobo. The project will finance training for three (3) qualified staff members; two of them from the Afram Plains Rural Bank and one from the Apex Bank. The three will be trained at the University of Ghana up to MSc level. The training will be aimed at enhancing the capacity and efficiency of the Rural Bank and Apex Bank in meeting the increased demand for credit that will be generated by project interventions. The staff will be trained in project appraisal, evaluation and monitoring, business management, accounting and book keeping. 4.5.29 AgSSIP Secretariat: institutional support will be provided to AgSSIP Secretariat. This will involve staff training, provision of office equipment and transport particularly for supervision of field activities. External training for two staff members at MSc level in Agricultural Planning/ Statistics and Monitoring and Evaluation will be provided in order to enhance the capacity of AgSSIP. One double-cabin pick up will be provided to AgSSIP to facilitate their supervisory role in the project 4.5.30 Marketing Information System: Publicity programme to provide farmers with market information and other general agricultural advice is included under this component. TV and/ or radio programmes containing project implementation experience will be prepared by the AEAs and SMSs at DADU will be broadcast at national level to extend project experience and achievements to other regions. Within the project area, communication will be through regional radio broadcast in local languages. The project will finance the establishment of relevant market information system and subsequent broadcasting by radio and/ or television during the duration of the project. Project resources will be used to finance the broadcasting of such programmes on the local and national radio/ television in order to facilitate sharing of knowledge and exchange of experiences of various project beneficiaries to a wider audience. Project resources will also cover the cost of training AEAs and SMSs in the production of relevant material for broadcast. 4.5.31 HIV/AIDS and Malaria: The prevalence of HIV/ Aids in Ghana is relatively low but growing. HIV/ Aids negatively affects agricultural production and other socio-economic activities in Ghana in general and Afram Plains District in particular. This is a debilitating ailment. Guardians spend long periods taking care of the sick thereby reducing their capacity for productive work. In order to contribute towards the national programme, the project will provide UA200,000 to support the Aids Control Commission by enhancing its capacity to promote HIV/ Aids campaign activities in the project area in collaboration with the Ministry of Health. Malaria

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is also amongst the leading causes of morbidity and mortality and accounts for a significant proportion of deaths in Ghana. The project will provide UA150,000 to support the Ministry of Health, to run awareness campaigns in the project area during the life of the project. This will be achieved by incorporating training modules on the subject in the courses that will be organized for the various target groups. D) Project Management Component

4.5.32 Management of the project will be mainstreamed within the existing institutional framework as shown in Annex 2. The project design is within the framework of the Agricultural Sector Services Programme (AgSSIP), the GoG instrument for making Government strategy (AAGDS) operational. The existing AgSSIP Secretariat within MOFA will be responsible for the implementation of the project. The District Director of Agriculture based at Donkorkrom will coordinate the day to day operations of the project activities. S/he will be assisted by technical/subject matter specialists and AEAs already deployed to the DADU by MOFA. Support staff will be provided by MOFA and the Afram Plains District Assembly. 4.5.33 The project will provide computers and other equipment, vehicles and allowances. Field allowances will be paid to AGSSIP, DADU, DFR, GIDA and CWSA, Forestry Commission and Ministry of Fisheries staff for the period that they will be working directly with the project. The project will fund the procurement of five (5) 4-WD double cabin pickup vehicles to facilitate monitoring of project activities as well as distribution of various inputs. Therefore, Afram Plains District Agriculture Development Unit (DADU) offices and residential/lodging accommodation facilities will be rehabilitated (570 square metres residential and 200 square metres offices). The project will also finance a baseline survey in 2007 to determine key indicators upon which the project effects and impacts would be determined both in the short and long run.

4.6 Production, Market and Prices 4.6.1 Production: At full development of these interventions there will be incremental production of: 54,400 tonnes of maize; 84,920 tonnes of yam; 11,320 tonnes of cashew; and 88,290 tonnes of cassava. The current domestic demand for maize is estimated at about 1. 3 million tons leaving a gap of about or vegetables the project will lead to incremental production of: 11,155 tonnes pepper; 2,910 tonnes of tomatoes; 2,330 tonnes of onions and 2,720 tonnes of okra. In addition the livestock sub sector will have incremental production as follows: Beef 4,940 tonnes, Sheep and Goat meet 10,970 tonnes; and 9,000 tonnes of poultry meat. In addition about 6,000 tonnes of fish will be produced. Produce from irrigated vegetables especially perishables like tomatoes whose demand is inelastic may have some difficulties in selling in the local markets but with the improved transport as provided in the project (roads and ferry services), movement of such goods to cities like Accra and Kumasi will significantly reduce losses and will help the beneficiaries get higher returns.

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4.6.2 Market and Prices: The dry season producer price assumed for tomatoes is c200,000 per crate. There is great variation, but the price in Accra was nearer c600,000 in 2005 (it reached c1,000,000 in February 2005). The expected project outputs will be absorbed in the domestic market, considering imported products that currently fill part of the supply gap will be more expensive than the local products. The expected output of okra, pepper and onions will contribute to satisfying the demands for these produce in major towns like Accra, Kumasi and Koforidua. The market for yam is growing beyond local consumption and it is now commonly traded among the large population of West Africans living in the UK after being vacuumed dried. Recent official data gives the contribution of Ghana to international market as 25%. With the growing local demand and with the expected improvement in the transport system of the district, there will a good market for yam. The contribution of Afram Plains to the total yam output is about 2% of the national production and even with the expected increase by the project’s intervention, this may not negatively affect the total national output and hence prices may not be adversely affected. 4.6.3 The estimated national production figure for maize stands at 1.16 million metric tonnes. Of this, only about 0.810 millions tonnes is available for local consumption after allowances have been made for other uses including animal feeds, industries and wastages due to poor handling. When this is compared with the estimated national consumption of 0.894 million tonnes there is a deficit of about us 0.084 millions metric tonnes which obviously is supplemented with imports. With the expected output from the project, the national deficit (which normally comes as imports) would have reduced the deficit by about 65%. There is therefore internal capacity to absorb the expected project output. As for cassava, the incremental output will be absorbed as result of the two main developments. Firstly, by adding value to cassava through processing into chips, the raw tuber which a non tradable cassava commodity will be turned into tradable cassava flours. Secondly, there is Presidential initiative on cassava which allows the processing of the tubers into industrial starch. Already large cassava processing plants are springing-up in and around Accra. The major challenge is however that of transportation but with the proposed project improvement to transportation problem in the district the evacuation of bulky produce can be guaranteed. This makes room for the excess produce that may result from the district.

4.7 Environmental Impact 4.7.1 The project has been classified as category II, indicating that it has limited negative impacts, which can be mitigated by incorporating specific measures in the design. The project seeks to improve the agricultural output and household incomes of the beneficiary farmers and contribute to the well being of the people of the Afram Plains District. The major project activities will include basic rainwater harvesting technologies, community based irrigation schemes, crop production, livestock raising and spot improvement of feeder road network in the project area. A summary of the Environmental and Social Management Plan is shown in Annex 4.

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4.7.2 Positive Impacts: Some of the positive impacts which are likely to accrue from the project include: application of recommended agricultural practices thereby significantly reducing the scale of the environmentally destructive slash-and-burn system of agricultural production; rainwater management thereby significantly reducing water run-off and soil erosion; woodlot establishment thereby reducing the need to cut down trees to meet domestic wood requirements; livestock production where resultant manure would be used to provide organic manure in agricultural fields; increased cereal, vegetable and horticultural production; increased employment thereby reducing rural-urban drift; improvement of the capacity of farmers and agricultural officers through training; better access to markets for farmers including women. The project will result in increased household incomes and thus living standards of the farming communities. 4.7.3 Negative Impacts: Some of the negative environmental impacts envisaged include: erosion hazards resulting mainly from land clearing and construction/ spot improvement of feeder roads; pollution of surface water and ground water resulting from agrochemical runoff; improper maintenance of irrigation infrastructure could provide breeding ground for disease vectors such as mosquitoes; concentration of animals around watering points and fodder banks if not properly controlled could accelerate loosening of soil particles leading to both wind and water soil erosion. 4.7.4 Mitigating Measures: The project will promote integrated production of crops, livestock, vegetables, and fisheries. In addition the project will support sustainable management of the natural forest resources as well as reforestation of degraded areas. The project will also promote appropriate soil erosion control, rainwater harvesting and management techniques, tree planting, application of organic manure, use of green manure, live fencing and soil fertility replenishment using inorganic fertilizers. These techniques will benefit the environment by increasing land productivity and improving soil root-zone moisture levels. The project will enhance the capacity of the beneficiary farmers through tailor-designed training courses to enable them effectively maximise their productive potential by adopting interventions introduced by the project. The project will also build their capacity to enable them access credit resources provided by Rural Banks, AgDB and others. Intensification of crop use will also reduce the pressure to open up new lands and increase crop coverage thereby reducing the risk of soil erosion. For prevention of water pollution through chemical inputs, the training of farmers in safe utilization of chemical fertilizers and pesticides will be included in the training programme. 4.7.5 Environmental Management and Monitoring: As part of its regular mandate, Environmental Protection Agency (EPA) conducts environmental impact assessments of development projects. The agency’s guidelines and check list for agricultural and irrigation interventions are comprehensive and satisfactory. To ensure that the required Bank Group standards for environmental concerns are also met, the Fund will make available to EPA its environmental policies and guidelines. In addition, the extent of the environmental impact analysis on the project by EPA will be reviewed by the Fund during its regular supervision

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missions. For monitoring purposes, a baseline study will be undertaken which would establish key environmental indicators for monitoring purposes during project implementation. A budgetary allocation of UA 0.170 million will be provided during the lifetime of the project for environmental mitigation and monitoring activities.

4.8 Project Costs 4.8.1 The total cost of the project, exclusive of all duties and taxes but including physical and price contingencies, is estimated at UA 22.45 million. The foreign exchange cost portion is estimated at UA 16.4 million representing 73% of the project cost. The local cost portion is UA 6.1million, equivalent to 27% of the total cost. A summary of costs by component and by category of expenditure is provided in Tables 4-1 to 4-2 below.

Table 4-1: Summary of Project Cost Estimates by Component

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Table 4-2: Summary of Project Estimates by Category of Expenditure

4.8.2 All project costs were estimated on the basis of the prevailing open market prices as of March 2006. The prices of imported goods and services were obtained in US Dollars and then converted to UA using January 2006 Exchange rates. The cost of civil works was based on ongoing similar works. A physical contingency rate of 5% has been applied to the cost of civil works. A price contingency rate of 2.5% has been applied for foreign goods.

4.9 Sources of Financing and Expenditure Schedule 4.9.1 An ADF loan and counterpart contributions from the Government of Ghana will be used to finance the project. The financing plan of the project is shown in Table 4.3 below. The ADF Fund represents 89% of the total project costs.

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Table 4-3: Project Sources of Finance

5. PROJECT IMPLEMENTATION

5.1 Executing Agency 5.1.1 The Ministry of Food and Agriculture (MOFA) will be the executing agency. The overall implementation of project activities will be coordinated by AgSSIP. The day-to-day execution of project activities will be the responsibility of the District Director, Afram Plains District Agriculture Development Unit (DADU). Afram Plains DADU will, through memoranda of understanding, forge collaborative partnership with the Ministries of Fisheries, Lands and Forestry as well as the District Community Water and Sanitation Agency (CWSA) and the Feeder Roads Department for the effective implementation of various project activities at district level.

5.2 Institutional Arrangements 5.2.1 The project will utilize the existing Project Steering Committee (PSC) which is being used by the Bank funded Cashew Development Project and Food Development Project. The PSC is chaired by the Chief Director, MOFA and assisted by the Director of Crop Services. Other members of the PSC include representatives of: Crop Services Directorate, Department of Agricultural Extension Services, Plant Protection and Regulatory Services Department, Policy Planning Monitoring and Evaluation Department, Women in Agricultural Development Department, Grain and Legume Development Board, Council for Scientific and Industrial Research, Crop Research Institute, Savannah Agricultural Research Institute, Environmental Protection Agency, Department of Community Development, Cooperatives Department, Department of Feeder Roads, Agricultural Development Bank, and representatives of the regions covered by the project. 5.2.2 The following additional members will be appointed to sit at the PSC when the Afram Plains Agricultural Development Project is being discussed: Two (2) representatives of project beneficiaries one of whom will be a woman and one representative each from: a) Afram Plains District Assembly; b) Ministry of Fisheries; c) Ministry of Lands and Forestry; d) Ministry of Transport and Roads; e) Ministry of Local Government and Rural Development; f) Ministry of Women and Children Affairs; g) Ministry of Finance and Economic Planning; h) Ministry of Trade and Industry. The PSC will provide overall policy direction and guidance for the smooth implementation of the project. It will ensure liaison with beneficiaries and relevant institutions.

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5.2.3 The PSC shall a) review and approve the annual work plan and budget submitted by the DADU; b) discuss and resolve any inter-agency issues related to the project’s activities c) review project progress and M&E reports. The AgSSIP Co-ordinator, assisted by the District Agricultural Director, Afram Plains DADU will provide secretariat services to the PSC. 5.3 Supervision and Implementation Schedules 5.3.1 Supervision Schedule: The Afram Plains DADU and its collaborating implementation agencies with the support of AgSSIP Secretariat will be responsible for the day-to-day supervision of the project and timely production and submission to the Bank all project progress, annual audit, mid-term review and completion reports. The project will submit Annual Work Plan and Budget to ADF, for review and approval two months before the beginning of each financial year. DADU will supervise all the project activities including those to be undertaken by contractors, suppliers, consultants and collaborating implementing agencies and will report, quarterly, to the PSC on all aspects of the project including financial and progress of project activities based on reports received from the field. The Project Steering Committee (PSC) will hold quarterly meetings to ensure that work plans and procurement schedules are achieved as planned. The ADF will undertake at least one field supervision mission every six months, in addition to the analysis of all project reports, to allow timely identification and solution of project implementation problems and bottlenecks. A mid-term review will be jointly undertaken by the ADF and the Borrower at the end of the third year of project implementation. A project completion report (PCR) will be prepared by the Borrower within three months of closure of the project. The Bank’s Country Office in Ghana will also undertake at least one supervision mission per year.

5.3.2 Implementation Schedule: The project would be implemented over a period of 5 years (end of 2006 – end of 2011). During the first three months DADU will prepare a project implementation plan, beneficiary sensitization, establishment of baseline data and establish M&E system, preparation of TORs and bid documents for the procurement of vehicles, office equipment and other relevant items and equipment, prepare and agree MOUs with implementing/research agencies and establish an accounting and financial system. Rehabilitation of DADU offices and provision of relevant office equipment will also be done in PY1. Training of beneficiaries and extension staff and farmers, promotion of rainwater water harvesting and alternative enterprises will be undertaken continuously throughout the five-year duration of the project. Before the start of implementation, 5 workshops will be held, to launch the project one at the district level and 4 localized zones of the district. The project launch workshops will include a broad spectrum of the project beneficiaries and other stakeholders including government ministries, project beneficiaries, civil society, private investors, NGOs, agro-processors. Details of the implementation schedule summarised in Table 5.1 below and detailed out in Annex 3.

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Table 5-1: Implementation Schedule

Responsibility Period Duration 1. Board Approval

ADF

31 May 2006

One Day

2. GPN Publication ADF June 2006 30 Days3. Signature of Loan Agreement ADF/ GoG

By July. 2006 One Day

4. Entry into Force of the Loan and ADF/ GoG

August 2006

5 Months

5. Fulfilment of Conditions for First

Disbursement GoG/ DADU August 2006 5 Months

6. Preparation of Annual Work Plan and Budget/ Tender Documents/ MOUs

DADU/ AgSSIP Sept 2006 3 Month

7. Project Launch Mission ADF Nov. 2006 One week8. Project Launch and Sensitization

Workshops DADU/

AgSSIP/MOFANov. 2006 –

Dec. 2007 2 months

9. Procurement of Technical Assistance; and

Office and Field Equipment. GoG/ AgSSIP/ DADU Dec 2006 –

August 2007 1 Year

10. Production Development AgSSIP/DADU/NGOs 2007 –2011 5 Years11. Infrastructure Development Activities AgSSIP/DADU/FDR/

TA2007 – 2009

Nov 2010 3 Years

11. Irrigation Efficiency Improvements DADU/NGO/Farmers/GIDA

Sept. 2007 – June 2011

5 Years

12. Staff and Farmer Training DADU/NGOs/GIDA 2006 - 2011 5 Years13. Monitoring of Project Activities DADU/AgSSIP Jan 2007 –

Dec. 2011 5 Years

14. Supervision Missions (Every 6 months) ADF/AgSSIP Start Sept. 2007

2 weeks

15. Mid- term Review AgSSIP/DADU/Consultant

Sept/Oct 2009 2 Months

17. GoG Project Completion Report

DADU/ AgSSIP Sept. 20011 – Dec. 2011

2 Months

18. ADF Project Completion Report ADF Jan 2011 1 Month

5.4 Procurement Arrangements 5.4.1 Procurement arrangements are summarized in Table 5.2 below. All procurement of goods, works and acquisition of consulting services financed by the Bank will be in accordance with the Bank's Rules of Procedure for Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding Documents.

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Table 5-2: Summary of Procurement Arrangements

UA’000 CATEGORY NCB Other SL NBF TOTAL

1.Works 1.1 Fodder Banks & Watering Pts

4189.45(4189.45)

4189.45(4189.45)

1.2 Feeder Roads 3234.625

(3,234.62) 3234.625

(3,234.62)1.3 Community Nurseries 569.48(569.48) 569.48(569.48)

1.4 Boreholes 273.35

(273.35) 273.35.

(273.35)1.5 Mketing Support Structures

511.96(511.96)

511.96(511.96)

1.5 Office Ext. & Renovation 1,905.85

(1,905.85)

1,905.85 (1,905.85)

2. Goods

1.1. Equipment 533.98

(533.98) 533.98

(533.98)

1.2. Vehicles 161.35

(161.35) 161.35

(161.35)

1.3. Motor Cycles 116.93

(116.93) 116.93

(116.93)1.4.Fingerlings & Acadja Cages

842.82 (842.82)

842.82 (842.82)

2. Services 2.1. NGO Serv/Tech. Assistance

3109.57(3109.57)

2.2. Training 3829.16

(3829.16) 2.3. Health capn. (HIV/Malaria)

256.96 (256.96)

256.96(256.96)

2.4. Extension Support 444.27

(444.27) 444.27

(444.27)2.5. Village Nurs. & Demo Flds

253.53 (253.53)

253.53(253.53)

2.6.Monitoring Services/ESMP

170.84 (170.84)

170.84(170.84)

2.7. Studies & Surveys 334.43

(334.43) 334.43

(334.43)3. Miscellaneous & Operating Costs 3.1. Operation and Mntce 527.71 527.713.2. Staff Costs 136.61 136.613.3 Matching Grant 45.56 (45.56)3.3. Travel & Field Allowances 400 4003.4 Office Rent 379.65 379.653.5. Other Rec. Costs 510.25 510.25TOTAL PROJECT COST 22449.0

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5.4.2 Civil Works: Procurement of civil works valued at less than UA 0.5 million per contract will be carried out under National Competitive Bidding (NCB) procedures. Civil works under the project include rehabilitation and extension of offices valued at UA1.9 million, rehabilitation of feeder roads (valued at UA 3.2 million), construction of storage/ market facilities (valued at UA0.51 Million), provision of boreholes (valued at UA0.27 million) and fodder bank development (UA4.2 million). Feeder road rehabilitation and development of fodder banks will be awarded in 10 lots each valued at UA0.32 and UA0.42 million respectively. Market facilities and portable water provision will be awarded in two separate lots each valued at UA 0.25 million and UA0.14 million respectively. The NCB procedure has been selected because the character, location and size of the various works to be undertaken are such that they are unlikely to attract bids from outside the Borrower’s country. There are qualified local contractors in a number sufficient to ensure competitive bidding. 5.4.3 Goods: Contracts for goods valued below UA 0.6 million each will be awarded under NCB procedures. Goods to be procured under the project are valued at UA 1.66 million out of which office and other equipment (including the new engines to refurbish the ferries) valued UA0.5 million, vehicles valued at UA0.16 million, motorcycles valued at UA0.12 million and fingerling production and acadja cages valued at UA0.84 million. Fingerling production will be undertaken by the Ministry of Fisheries’ Development using the facilities at Koforidua and will be produced in three different lots each of about UA 0.28 million Other items are readily available of the shelf or with standard specification, and there are adequate number of national suppliers and agents of qualified foreign suppliers in the country to ensure competitive prices. NCB is therefore considered most appropriate. 5.4.4 Consulting Services and Training: Procurement of consulting and training services, as detailed in Table 5.1 below, will be undertaken in accordance with the Bank's "Rules of Procedure for the Use of Consultants". Services including Technical Assistance, ( valued at UA 3.1 million), raining valued at UA 3.8 million, and surveys and studies valued at UA0.3 million) will be procured through shortlist mode of procurement. The selection procedure will be based on technical quality with price consideration. Service providers will be contracted to train the communities in the project area. TA services including engineering design and supervision, project mid-term review, preparation of forestry resource management and harvesting plan, PCR preparation, annual audit, training for farmers and extension agents. 5.4.5 Miscellaneous and other General Operations: General operational costs goods and services, staff travel and allowances to amounting to UA 1.99 million will be in accordance with provisions of the Bank rules of procedures. 5.4.6 Executing Agency: The Afram Plains DADU will be responsible for the procurement of goods, works, consulting services and training services. DADU coordinate and quality assure the preparation and processing of all the procurement documents with the assistance of the Procurement Specialist based at AgSSIP. The Accountant at DADU will be trained in the management of procurement and disbursement activities. The Goods, Works and Services for the project will be procured according to the modes of procurement shown in Table 5.2. In the course of project implementation staff skills will be enhanced through periodic short term training on Bank’s procurement procedures.

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5.4.7 Review Procedure: The text of General Procurement Notice will be prepared by the Government and discussed with the Borrower during loan negotiation. It will be published in the Development Business, upon approval by the Board of Directors of the loan proposal. 5.4.8 Review procedure: The following documents are subject to review and approval by the ADF before promulgation: a) Special procurement Notice b) Tender Documents and Request for Proposal for Consultants c) Tender Evaluation reports or the report of the evaluation of consultants’ proposal including recommendations for award d) draft contracts if these have been amended from the draft include in the tender documents. 5.4.9 National Procedures and Regulation: National procurement laws and regulations have been reviewed and determined to be acceptable. The MOFA Procurement Committee will delegate key procurement responsibilities to the project management unit in accordance with the provisions of the National Procurement Regulations. DADU will be responsible, in liaison with the respective implementing/specialized government agencies, for the entire procurement process from preparation of procurement plans to initiation of procurement requests, soliciting and evaluation of bids for all project goods, works and services

5.5 Disbursement Arrangements 5.5.1 The project funds would be disbursed according to the expenditure schedule by component and by source of finance shown in Tables 5-3 to 5-5. GoG will open three separate accounts in the name of the project for the funds provided by ADF and GoG. The Government will open first, a separate account in the name of the project with the Central Bank for the funds provided by the ADF. The second account will be for Government counterpart funds contribution in a bank acceptable to the Bank. A third account will be a local account for transfer of funds from the ADF resources to meet DADU operations. The ADF funds would be disbursed according to an annual work program, which would be approved beforehand by GoG and the Bank. Initial request for disbursement of the special account would be submitted to the Bank for approval and would cover a period of four months. The disbursement of subsequent funds would be subject to justification of the utilization of the preceding funds to at least 50%. Other disbursement under the project would be made in accordance with the Bank procedures in force.

Table 5-3: Expenditure Schedule by Component

Table 5-4: Expenditure Schedule by Source of Finance

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Table 5-5: Summary of Expenditure by Category and Source of Finance

UA '000

CATEGORY ADF GOG &

Beneficiaries TOTAL A. Works 9,168 1, 228 10,396 B. Goods 1,655 0 1,655 C. Services 8,398 0 8,398 D. Operating Costs 755 1443.98 1999.98 TOTAL PROJECT COST 19,976 2472 22,449 5.5.2 The Government will ensure that an internal control system with adequate accountability is established by the project. Before releasing of the initial advance, an action program for the implementation of eligible expenses with establishing of an adequate accounting system should be submitted to the Bank. Other disbursements under the project will be made in accordance with Bank procedures in force. The contribution of the Government to the project costs will be deposited in a special account on a quarterly basis as set out in table 5.4.

5.6 Monitoring and Evaluation 5.6.1 Monitoring and Evaluation will be an important management tool to effectively assess progress of the project activities, identify problems and constraints, and evaluate new opportunities. The evaluation will cover: (i) the technical aspects not only in terms of the achievement rates of activities and objectives, but also in terms of impacts on the natural and socio-economic environment; this would facilitate assessment of the rationale of the set objectives and proposal of readjustment, if need be during the mid term; (ii) the aspects relating to support to groups, associations and national institutions; and (iii) the budgetary aspects and use of human and material resources by comparing the planned activities to those carried out. The indicators in the matrix will form the basis for monitoring of project activities. Monitoring and Evaluation activities will include a) a baseline survey; b) on-going internal monitoring; c) external monitoring and evaluation; d) mid-term review; e) environmental monitoring; and f) reporting. 5.6.2 Monitoring and Evaluation: The overall Monitoring and Evaluation will be conducted on a permanent basis by MOFA-AGSSIP through its monitoring and evaluation unit. DADU will be responsible for day to day monitoring and evaluation of the project activities and ensure the flow of information necessary for assessing implementation performance and impact of the project. The project will undertake a base line survey at the beginning of its implementation. The result of the baseline survey will be used to update the indicators in the project matrix, to be used at mid term and projection completion reports for accurate assessment of development impact. The monitoring reports will feed into a quarterly progress report that will be submitted to the ADF. The project will also be supervised by the ADF through periodic supervision missions (at least twice per year). Impact evaluation will also be conducted periodically to determine the extent to which the project contributes to sector development objectives. 5.6.3 A Mid-Term Review (MTR) will be conducted in the third quarter of 2009. The evaluation will take stock of the outputs and impact of the project, and where necessary, take measures to facilitate achievement of the objectives. A consulting firm will be hired to

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undertake the mid-term review. The mid-term review will form the basis for modifying the project’s implementation approach if found necessary. 5.6.4 Environmental Monitoring will be conducted under the responsibility of the DADU, which will receive assistance from the Environmental Protection Agency (EPA). A sum of UA 0.170 million has been provided for Environmental and Social Monitoring of the project activities. 5.6.5 Reporting: The DADU will prepare quarterly and annual activity reports on the progress of the project in accordance with Bank guidelines, and submit them to the Government and ADF. At project completion, MOFA will prepare a completion report in line with the Bank’s standard format within six months of the end of project implementation. The project annual progress reports will include the physical progress, procurement activities, expenditures, and evaluate the representation of men and women beneficiaries. The quarterly reports should reach the ADF within one month of the end of the reporting period, while the annual report should be submitted before the end of February of the following year. The various implementation partners will submit their respective quarterly and annual reports to the DADU. The ADF will field a specific mission for the preparation of a project completion report (PCR).

5.7 Financial Reporting and Auditing 5.7.1 The DADU would keep financial records in accordance with internationally acceptable sound accounting practices and would ensure that all project accounts are audited annually by an independent auditor acceptable to the GoG and the ADF. The DADU will be responsible for the timely submission of annual financial statements. Fully audited financial statements for the preceding financial year will be submitted to the ADF for review by 30th June of the following year. ADF will provide terms of reference for the auditors. 5.7.2 AgSSIP operates a computerized accounting and management information system. This system would be replicated for the purpose of this project. The AgSSIP Accountant will ensure that the accounts are maintained by category of expenditure and source of funding and that a system of internal control is in force to ensure prompt recording of transactions, timely production of accounts and reports as well as proper security of project assets.

5.8 Aid Co-ordination 5.8.1 There is an already established framework for donor coordination and collaboration in Ghana. Under this framework inter-agency coordination is reinforced through sector coordination groups and mini-consultative group meetings organized on a monthly basis. The major donors involved are: EU, World Bank, JICA, The Netherlands Embassy, AFD, CIDA, and FAO, GTZ, DFID, USAID, UNDP and WFP. The secretariat of the donor consultative group is held on rotational basis. Currently the secretariat is hosted by CIDA. 5.8.2 During the appraisal mission, the project was discussed with representatives of bilateral and multilateral agencies in Ghana. In addition the mission participated in a donor coordination meeting that was held during the time the mission was in Ghana. Representatives of donor agencies expressed their support for the proposed intervention as it is consistent with the priority areas for support under AGDS and FASDEP. During implementation, close collaboration will continue with all donors, in particular the USA-

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MCC and EU, who are financing interventions in the district. This has been taken into consideration in the design of the project.

6. PROJECT SUSTAINABILITY AND RISKS

6.1 Recurrent Costs 6.1.1 Recurrent expenditures are estimated at UA1.99 million during the five-year implementation period. The major cost items under the ADF finance estimated at UA0.755 million include operating costs for project offices, operation and maintenance of vehicles and motor bikes for field staff and field allowances. The cost items borne by Government comprise salaries, office utilities and part of the running and maintenance cost of the vehicles and motor bikes. At the end of project implementation, the departments that are participating in the implementation of the project will carry out co-ordination of the various activities, under their existing recurrent expenditures. These departments will assume their respective roles in training, maintenance of feeder roads and buildings, as well as research and extension services. The Feeder Roads Department will allocate resources for the maintenance of feeder roads while Water User Committees and farmer groups/associations will be responsible for the maintenance of dug outs and other community infrastructure established by the project.

Table 6.1: Summary of Recurrent Costs (‘000)

UA '000 SOURCE OF FINANCE 2007 2008 2009 2010 2011 TOTAL

ADF 100.5 200.2 250.4 103.6 100.3 755 GOG 200 215.5 220.8 357.68 450 1,443.98

TOTAL 300.5 415.7 471.2 461.28 550.3 1,999.98

6.2 Project Sustainability 6.2.1 The project has been designed in a demand-driven and participatory manner, and the project components reflect critical felt needs of the inhabitants in the Afram Plains District. Beneficiaries were also fully consulted during appraisal mission. Marketing of their agricultural output is constrained by the poor network of access and feeder roads. The project will upgrade the feeder road network in the project area to facilitate distribution of farm inputs and evacuation of farm produce to the various markets. The project has incorporated some initiatives in support of project sustainability. For instance project beneficiaries will be required to pay user fees for utilisation of project funded crop storage facilities, fodder banks and market facilities. 6.2.2 Project interventions complement existing indigenous livestock, and crop husbandry practices. Crop budgets indicate that income gains from the crop and livestock production with improved management are substantially higher than traditional practices, which makes it very attractive thus providing adequate incentives for farmers to buy into the project interventions. Furthermore the selected crops are indigenous to the project and therefore their cultural requirements are well known to farmers. In addition there is already a substantial local market for the output from the project activities which will ensure that surplus production is sold to provide cash income to the beneficiaries.

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6.2.3 Farmer groups/ associations will be used as focal points for delivery of extension service and demonstration of best practice. Farmer groups will be trained in the implementation of simple low cost technologies with innovations drawn from similar projects elsewhere in Ghana in order to enhance their productivity and household incomes. Continuity of project activities after project completion is assured at the end of the project implementation phase since various farmer groups/ associations would have acquired considerable knowledge and skills for the management and marketing of their enterprises through the project’s intervention. In addition such groups will facilitate linkage with buyers and processors and facilitate price negotiations.

6.3 Critical Risks and Mitigating Measures 6.3.1 Rainfall patterns have been less favourable in recent years in Ghana in general and Afram Plains District in particular. This poses potential risk to the success of crop and livestock production activities. However, the inclusion of an irrigation sub-component and rainwater management technologies in the project design will mitigate adverse impacts of erratic rainfall. The risk of fluctuating lake water levels and subsequent restrictions imposed on water withdrawals is mitigated by efficiency improvement in the community irrigation schemes that will lead to water savings. 6.3.2 Localized over-supply for crop products is envisaged particularly during harvest time and this tends to depress prices. In order to obviate such a trend, the project will organize farmers into groups and associations and assist them to establish relations with major traders, thereby enabling to negotiate for better prices. In addition the project will finance demonstration crop storage facilities with a view to demonstrate best practice in crop storage systems with a view to support farmers to off-load their produce onto the market when prices are favourable. In addition the project will complement the efforts of EU and US-MCC in improving access through provision of improved access, trunk and feeder road networks which would open up the district. 6.3.3 Another risk is related to conflicts between livestock owners and crop farmers which are on the increase. The major cause of the conflict is the lack of access to water and fodder. The project design provides for the establishment of community fodder banks at strategic sites within the major livestock production areas which will be fenced and paddocked. In addition, dugouts will be constructed in order to provide sustainable watering pints for the animals. Livestock disease outbreaks could derail any gains achieved in the project area. The project design incorporates training of community livestock workers to provide early warning systems to ensure that appropriate control measures are implemented on timely basis.

7. PROJECT BENEFITS

7.1 Financial Analysis 7.1.1 For the purpose of the Financial Analysis cognisance is taken of the farming systems that are prevalent in the Afram Plains District. The model enterprises to be promoted by the project after costing the farmers labour and other inputs reveal the following net returns per year: for maize ¢ 200,381.4 million (US$21.7 million); for cashew ¢ 49,821 million (US$5.42 million); for yam ¢ 33,969 million (US$3.69 million) and for Cassava ¢ 16,980 million (US$1.85 million). The irrigated vegetables ¢ 546 million (US$ 0.059 million); beef

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production ¢ 103,991 million (US$11.3 million); sheep/goat meat ¢40209.53 million (US$4.4 million). 7.1.2 The project provides an opportunity for interventions to improve production and productivity over the traditional system in place. The recommended practices, improvements in the cropping intensity and agronomic practices will result in incremental returns to the farm family and entire farming system. Financial benefits from project interventions will emanate from the direct employment of the unskilled and semi-skilled rural inhabitants working in the crop and livestock interventions. The results of the financial analysis demonstrate that the introduction of project interventions will lead to significant improvement in the household incomes of the participating beneficiaries.

7.2 Economic Analysis 7.2.1 The Project would kick-start development in the Afram Plains District, and the multiplier effects would follow. There is an on overarching assumption in the calculation of the EIRR that activities within all components are essential for the implementation. Also, project roads and other infrastructure are essential to, and contribute towards; the increase in production from agriculture and processing and only their costs were included when calculating an overall project rate of return to avoid double counting. It is also assumed that incremental operating costs will continue after the project and only commodities that would be internationally traded are maize, cassava chips and starch, irrigated vegetables, and teak. All prices used are net of duties and taxes. Project EIRR was therefore estimated at 21% when the opportunity cost of capital is taken to be 12%. The overall assumption was that that the stream of benefits accruing to the project would span up to 30 years.

7.3 Social Impact Analysis 7.3.1 The project will generate a broad range of benefits, viz., increase in domestic supply of food, substitution of imports, as well as improvement in the standard of living. The project will directly benefit about 22,640 households from production of food crops 1,600 farm families in livestock production, 971 farm families in irrigation and 3,300 farm families in fisheries activities. The main impact will be in terms of increased food security and incomes derived from project interventions. Feeder roads will improve access to input and output markets. The improved water and sanitation will cause a reduction in a number of water-borne diseases thereby reducing morbidity. Improved market access along with handling at the market sheds will improve the state and quality at which farm produce enter the marketing chain thus improving economic returns to farmers. 7.3.2 The participatory approach adopted under the project will enhance the capacity of project beneficiaries to take advantage of proven technologies to increase the profitability of their crop, livestock and fishing enterprises. Capacity building will in particular benefit women by: increased access to markets, especially for petty trading activities in which women dominate. All these improvements will contribute to poverty reduction. The project design has integrated a sub-component of raising awareness and protection against HIV/Aids and Malaria.

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7.4 Sensitivity Analysis Sensitivity of Economic Benefits: The economic sensitivity analysis shows that benefits are robust to changes in falling benefits and rise in investment costs. The EIRR is stable in the face of changing assumptions as follows. 10% increase in investment cost 20% 10% increase in al costs And 10% reduction in enterprise revenue

19%

20 % fall in revenue 19% Lag implementation by two years 19%

8. CONCLUSIONS AND RECOMMENDATIONS

8.1 Conclusions 8.1.1 The project will directly benefit 27,260 farm families for various production activities in the district. Forestry benefits will accrue to all the inhabitants of the district. The project would provide regular employment to about 5,000 workers. In addition the project will create about 350,000 seasonal jobs. Group formation and training will facilitate technology transfer, delivery of extension services and access to inputs and markets. At full development the project bring about incremental production of: 54,400 tonnes of maize; 84,920 tonnes of yam; 11,320 tonnes of cashew; 88,290 tonnes of cassava; 11,155 tonnes pepper; 2,910 tonnes of tomatoes; 2,330 tonnes of onions; 2,720 tonnes of okra; 4,940 tonnes of beef; 10,970 tonnes of mutton and goat meat; 9,000 tonnes of poultry meat and 6,000 tonnes of fish. The rehabilitated 200 km of feeder roads will facilitate the movement of goods and services thereby increasing the tempo of economic activities in the district. The project is socially desirable, technically feasible, financially viable and environmentally friendly. Furthermore, it is accorded high priority in the agriculture development strategy by the Government of Ghana. The project is also consistent with the Bank Group Vision statement as well as the strategy for the country.

8.2 Recommendations and Conditions for Loan Approval 8.2.1 It is recommended that a loan not exceeding UA19.97 million be granted to the Republic of Ghana to finance the implementation of the Afram Plains Agricultural Development Project as presented in this appraisal report.

A. Conditions Precedent to Entry into Force 8.2.2 It shall be a condition precedent to entry into force of the Agreement that the Borrower shall have fulfilled the conditions of section 5.01 of the General Conditions of the Fund Applicable to Loan Agreements and Guarantee Agreements.

B. Conditions Prior to First Disbursement

Prior to First Disbursement, the Borrower shall:

(i) Provide written evidence that the existing Afram Plains District Agricultural Development Unit (DADU) has been designated to coordinate day to day

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management of the project activities. The staff of DADU will have qualifications and experience acceptable to the ADF.

Other Conditions: The Borrower will provide evidence that: (i) by January 2007 that a Memorandum of Understanding (MoU) has been signed

between MOFA and Ministries of Fisheries, Forestry, Department of Feeder Roads Department, CWSA, GIDA, confirming that their respective district officers will collaborate with DADU for the purpose of implementing their respective roles in this project;

(ii) by December 2006, the following additional members will be appointed to sit at

the PSC for Bank funded CDP and FCDP when the Afram Plains Agricultural Development Project is being discussed: two (2) representatives of project beneficiaries one of whom will be a woman and one representative each from: a) Afram Plains District Assembly; b) Ministry of Fisheries; c) Ministry of Lands and Forestry; d) Ministry of Transport and Roads; e) Ministry of Local Government and Rural Development; f) Ministry of Women and Children Affairs; g) Ministry of Finance and Economic Planning; h) Ministry of Trade and Industry.

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Annex 2

AFRAM DISTRICT AGRICULTURAL DEV. PROJECT – ORGANISATION CHART

Project Steering Committee (CHAIR-MOFA)

Ministry of Food and Agriculture (MOFA – AGSSIP)

District Agriculture Development Unit (DADU) Project Management

AGSSIP & GIDA Technical Assistants (Financial Controller, Procurement Specialist, Civil and

Irrigation Engineers Specialist)

District Community Water &Sanitation Agency (CWA)

GIDA

Ministry of Rodas and Transport

Dept. of Feeder Roads (DFR) (District Engineer)

Farmer’s Organisations

DADU Technical Staff

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Annex 3 PROJECT IMPLEMENTATION SCHEDULE

Task Name

PROJECT COMPONENTS AND MAJOR ACTIVITIES

Prepparatory phase for Start-upADF Appraisal ReportProject Approval by ADFSigning of ADF AgreementsGeneral Procurement Notice (GPN)Project Launch and Implementation Arrangements/Detailed Plans

General ActivitiesProcurement of Office and Field Equipment; Rehab. of DADU OfficMobilisation of grass roots beneficiaries

Production Development, including Rainwater ManagementInfrastructure Development

Roads and FerriesFodder BanksIrrigation Efficiency Imrpovements

Capacity BuildingFarmer TrainingExtension Agent and Technical Officers Training

SupervisionBank Supervision MissionMid-term reviewProject Completion Report (GoG)Project Completion Report (ADF)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42006 2007 2008 2009 2010 2011 2012

Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

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Annex4

ENVIRONMENTAL AND SOCIAL MANAGEMENT SUMMARY

Project Title: Afram Plains Agricultural Development Project Country: Ghana Project Number: P-GH-AA0-015 Department: OCAR Division: OCAR.2 _____________________________________________________________________ a) Brief Description of the Project The project aims at increasing agricultural output and household incomes of the project beneficiaries in the Afram Plains District. The project will bring existing 45,290 ha under intensive production of maize, yam, cassava and cashew through rainwater management as well improved irrigation technology to the existing 1,325 ha in 53 community vegetable production sites along the Lake Volta. The project will also enhance management of livestock through establishment of fodder banks, provision of dug outs to meet water requirements of livestock as well as improved productivity of livestock through cross-breeding of local animals with improved breeds. Sustainable management of forestry and fisheries resources will be introduced including capacity strengthening of community based groups. The project will restock Lake Volta with tilapia fingerlings bred at Koforidua fisheries laboratories in order to improve the fish stock. In addition the project will introduce “acadja” technology which involve introduction of fish cages within the lake to enhance fish production. Furthermore the project will improve access through upgrading and spot improvement of 100 km of feeder road network. The capacity of the relevant institutions will be enhanced through training, provision of transport, office equipment. The project has four components namely 1) Production Development 2) Infrastructure Development; 3) Institutional Capacity Building and 4) Project Management. b) Major Environmental and Social Impacts The major project activities will include basic rainwater harvesting technologies, community based irrigation schemes, crop production, livestock raising and spot improvement of feeder road network in the project area. A summary of the Environmental and Social Management Plan is shown in Annex 4. Some of the positive impacts which are likely to accrue from the project include: application of recommended agricultural practices thereby significantly reducing the scale of the environmentally destructive slash-and-burn system of agricultural production; rainwater management thereby significantly reducing water run-off and soil erosion; cattle management; goat and sheep fattening; live fencing and sustainable management of forestry through implementation of provisions of a management and harvesting plan; restocking Lake Volta with existing fish species; and capacity building of farmer groups as well as institutional strengthening of Afram Plains District Agricultural Development Unit (DADU). The project will result in increased household incomes and thus living standards of the farming communities.

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Possible negative environmental impacts envisaged include: erosion hazards resulting mainly from land clearing and upgrading/ spot improvement of feeder roads; pollution of surface water and ground water resulting from agrochemical runoff; improper maintenance of irrigation infrastructure could provide breeding ground for disease vectors such as mosquitoes; concentration of animals around watering points and fodder banks if not properly controlled could accelerate loosening of soil particles leading to both wind and water soil erosion. Through the increase in the supply of food, vegetables, livestock products substitution of imports, the project will improve the standard of living of the beneficiary farmers. In addition, the project would positively affect the rural areas concerned by creating farm and related employment and providing entrepreneurs and the private sector in general with opportunities for expanding their businesses. In addition, the project investment in feeder roads, boreholes, water and sanitation will generate enormous benefits. Roads will improve access to input and output markets. They will further open the community to access other improved services in the nearby urban centres. Improved water and sanitation will cause a reduction in a number of water-borne diseases and thereby reducing morbidity. The project will be of particular benefit to women farmers in that: i) through the capacity building and improved delivery of extension services the project will offer women the opportunity to participate on equal basis with men and thus improve their level of organization and hence augment their bargaining position in the typically rural male dominated communities; ii) improve the productivity and profitability of their enterprises through increased access to markets, especially in small ruminants, marketing and downstream farming activities in which women dominate; iii) improve their awareness in respect of the prevention of HIV/AIDS and malaria. All these improvements will contribute to poverty reduction. c) Mitigation and Enhancement Programme The positive and negative impacts were identified per project intervention area, and mitigation measures were defined accordingly. The analysis determined that, given the availability of land and water and a strong interest from the local population, the positive impacts of irrigation and other project interventions far outweighs the negative impacts. Improved agriculture practices will allow for proper soil fertility management. The project will promote through the Participatory Training and Extension the following: appropriate rainwater management, community irrigation schemes, application of organic manure, livestock production and fattening; use of improved seed/ planting material, restocking of Lake Volta, and sustainable management of forestry resources. These technologies will benefit the environment by increasing land productivity, reducing the rate of deforestation, increasing ground water levels and improving surface water availability. The design of the works coupled with mitigation measures will also include training on the proper water management and control to prevent stagnation, thus contributing to a reduction in the incidence of water related diseases. d) Monitoring Programme and Complementary Initiatives To ensure compliance with national environmental and social policies and standards as well as with the Bank’s policies and guidelines, the Afram Plains DADU would put

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in place a monitoring system for the implementation of environmental and social mitigating measures during project execution. Site-specific survey will be conducted to fine-tune the Environmental and Social Management Plan (ESMP) implementation schedules part of its regular mandate, Environmental Protection Agency (EPA) conducts environmental impact assessments of development projects. The agency’s guidelines and check list for agricultural and irrigation interventions are comprehensive and satisfactory. To ensure that the required Bank Group standards for environmental concerns are also met, the Fund will make available to EPA its environmental policies and guidelines. In addition, the extent of the environmental impact analysis on the project by EPA will be reviewed by the Fund during its regular supervision missions. For monitoring purposes, a baseline study will be undertaken which would establish key environmental indicators for monitoring purposes during project implementation e) Institutional Arrangements and capacity Building Requirements As part of the initial project activities, an ESMP implementation schedule taking into account all activities related to the proposed (enhancement and mitigation) measures, the monitoring programme, consultations, complementary initiatives and institutional arrangements. Moreover, the implementation schedule shall be developed in co-ordination with the overall project implementation plan and will be integrated in the project Annual Work Plan and Budget. For that purpose, an agreement will be signed between the Afram Plains DADU and EPA to prepare an implementation work plan and schedule. g) Public Consultations and Disclosure Requirements Public consultation and disclosure requirements will be done in accordance with the existing government policy as being run by the EPA. By design the project is participatory in nature. So, all project activities will be implemented in close collaboration with local communities. An environmental analysis has been carried out during project preparation and appraisal during which a considerable emphasis was put on determining the reactions of the affected population. Such collaboration would continue during project implementation. h) Estimated Cost The cost for the ESMP implementation and monitoring has been estimated at UA 0.170 million for the duration of the project. Environmental monitoring and supervision activities are however seen as part of the project management activities. i) Implementation Schedule and Reporting Reports on monitoring activities undertaken by EPA will be provided to the DADU, the Project Steering Committee (PSC), the ADF and the general public including NGOs working on the environment in Ghana

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Annex 5: Provisional List of Goods and Services (LOGS)

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Annex 6 LIST OF ON-GOING BANK GROUP OPERATIONS IN GHANA AS AT 29MARCH 2006

Project Appr. Net loan Disb. Last 1 Rural Enterprises Project 12/12/200 7,500,000.00 7.18 20042 Food Crops Development Project 12/10/199 10,000,000.0 65.95 20043 Livestock Development Project 10/10/200 19,580,000.0 18.54 20044 Cashew Development Project 10/31/200 9,890,000.00 32.38 20045 Inland Valley Rice Development Project 05/18/200 15,000,000.0 10.07 Not 6 Small-Scale Irrigation Development Project 12/04/199 15,042,949.7 48.97 20047 Community Forestry Management Project 07/03/200 7,000,000.00 19.24 Not 8 Rural Financial Services Program 10/11/200 3,580,000.00 68.10 21/06/209 Multinational: NERICA Dissemination Project - 09/26/200 2,650,000.00 3.70 -

10 Multinational: Creation of Sustainable Tsetse 12/08/200 6,640,000.00 0.00 - Agriculture 96,900,000 30.42

1 Institutional Support To The Ministry of 10/28/199 2,000,000.00 83.592 Cap.Building, Governance & Poverty 11/14/200 3,000,000.00 60.693 Line Of Credit to Cal Merchant Bank 07/10/200 5,000,000.00 100.004 Poverty Reduc. Support Loan II 09/07/200 44,000,000.0 50.00

Multi- Sector 54,000,000.0 73.571 Accra Sewerage Improvement Study 05/03/200 950,000.00 65.092 Rural Water and Sanitation Program 09/08/200 12,800,000.0 2.78

Public Utilities 13,750,000.0 33.941 Achimota-Anyinam Road Rehabilitation Project 12/15/199 10,000,000.0 75.042 Rehabilitation Of Achimota-Anyinam Road 12/15/199 7,000,000.00 0.003 Rehabilitation of Achimota-Anyinam Road 12/15/199 0.00 0.004 Road Infrastructure Project 2003 09/17/200 18,000,000.0 0.105 Road Infrastructure Project 2003 09/17/200 800,000.00 31.006 Road Infrastructure Project 2003 09/17/200 3,000,000.00 0.007 Akatsi-Dzodze-Noepe Road(Akatsi-Akanu) 12/20/200 12,720,000.0 0.008 Tema-Aflao Road Rehabilitation Project 04/17/200 14,700,000.0 0.009 Anyinam-Kumassi Road Construction 11/22/198 23,671,036.0 91.99

10 Anyianam-Kumasi Road Rehabilitation 09/27/198 6,670,000.00 0.0011 Tetteh Quarshie Circle Mamfe Road 12/11/200 25,000,000.0 47.73 Transport and Road 121,561,036. 22.35

1 Senior sec. School support project - III 09/24/200 20,000,000.0 1.182 Senior sec. School support project - III 09/24/200 5,000,000.00 0.00

Education 25,000,000.0 0.591 Health Services Rehabilitation III 10/30/200 17,640,000.0 0.452 Health Services Rehabilitation III 10/30/200 1,000,000.00 0.00

Health 18,640,000.0 0.23 Grand Total 329,850,000 34.46