DomamI(of

The World Bank

FOR OmCIAL USE ONLY

Repdt No. 5368-3'S

STAFF APPRAISAL REPORT

BURUNDI

SECOND FORESTRY REPORT

May 17, 1985

Central Agriculture DivisionEastern Africa Projects Department

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BURUNDI

CURRENCY EQUIVALENTS

Currency Units = Burundese Franc (BuF)US$1.00 = BuF 120.0BuF 100 = US$0.83

WEIGHTS AND MEASURES

Metric System

Metric = British/US Equivalents

1 meter (m) = 3.3 feet1 cubic meter (m3) = 35.3 cubic feet1 hectare (ha) = 100 ares = 2.47 acres1 kilometer (km) = 0.62 mile1 square kilometer (km2) 0.39 square mile (sq.mi.)1 kilogram (kg) = 2.20 pounds (lb)1 liter (1) = 0.26 U.S. gallon (gal)

= 0.22 Imperial gallon (imp. gal)1 ton (metric ton) = 2,204 pounds (lb)

ABBREVIATIONS AND GLOSSARY

AFVP - Association Franraise des Volontaires du Progras/French Volunteers

CTFT - Centre Technique Forestier Tropical/French Tropical ForestCenter)

EDF - European Development Fund/Fonds Europ$een de developpement (FED)FAC - Fonds d'Aide et de Cooperation/French Aid and Cooperation FundILO - International Labor OrganizationINCN - Institut National de la Conservation de la Nature/

National Institute for Nature ConservationISABU - Institut des Sciences Agronomiques du Burundi/

National Agricultural Research InstituteITAB - Institut Technique Agricole du Burundi/Burundi Technical

Institute of AgronomyMFCZN - Mission Francaise Crete Zaire Nil/French Forestry Zaire-

Nile Divide MissionONATOUR - Office National de la Tourbe/National Peat Development AgencySCM or - Stacked Cubic Meter (equivalent to approximately 0.6 cubicstere meter solid)SRD - Societe Regionale de Developpement/Regional Development

CompanyUNDP - United Nations Development ProgrammeUSAID - United States Agency for International DevelopmentWFP - World Food Programme

FISCAL YEAR

Government of Burundi : January 1 - December 31

FOR OFFICL USE ONLY

BURUNDI SECOND FORESTRY PROJECT

Credit and Project Summary

Borrower : Republic of Burundi

Beneficiary : Ministry of Agriculture and Livestock, Forestry Department

Amount : SDR 13.0 million (US$12.8 million equivalent)

Terms : Standard IDA terms

Project : The proposed Credit would finance the second phase of a long-Objectives term afforestation program and assist the Government inand establishing long-term production and marketing policies forDescription the sub-sector. The main Project objectives are: (i) to

address the problem of growing wood demand of the population;(ii) to reduce Burundi's need for imports of timber, timbersubstitutes and fuel; (iii) to contribute to protecting thenatural environment; and (iv) to promote greater integrationof cropping, forestry and livestock activities at farm leveland to 'Launch an agro-forestry program. Ninety ruralnurseries (including about 30 new ones) would produce plantsfor sale to the population. Agro-forestry would be promotedto address the rural population's needs for wood, fodder,shade and soil improvement. Pilot actions would beundertaken in a few plantation areas to integrateafforestation with livestock and agricultural improvementactivities. About 3,500 ha of eucalyptus and 1,500 ha ofpine plantations would be established in western Burundi; inaddition 2,000 ha of woodlots would be established incommunes all over the country.

Benefits : The Project would benefit about 60,000 rural families. orabout 8% of the farming community by increasing theirsupplies of fuelwood and poles. The eucalyptus and pineplantations would serve the urban population by meeting theneeds for charcoal of about 60,000 people in Bujumbura. Thepilot activities would primarily integrate betterafforestation programs with agriculture and livestock.Agroforestry research would define better means to improvepresent farming systems. Finally, the Project would have asignificant impact on employment.

Risks : The proposed Project does not involve major or unusualrisks. Limited land availability is the most importantproblem in establishing large and medium sized commercialplantations. To minimize this risk, legal arrangementsnecessary to ensure the availability of planting sites wouldbe finalized before Board presentation. The principal

This document has a retrited disrbution and may be used by rcipients only in the perfonnc oftheir ofric dutie Its wtents may not oherwise be disdosed wihout Wodd Bank authorization.

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economic risk of the Project is that management performancewill not reach expected standards, thus reducing productivityof plantations and nurseries. This risk would be reduced bythe recruitment of a technical assistance team.

Estimated Local Foreign TotalProject Costs 1/ - -US$ million--

. Commercial plantations 3.5 1.3 4.8

. Rural nurseries & agroforestry 2.1 0.2 2.3

. Agroforestry research 0.0 0.2 0.2- Maintenance of existing plantations 0.2 0.3 0.5. Livestock and agriculture 0.6 0.9 1.5

improvement. Institutional strengthening 0.6 2.9 3.5. Scholarships and specialized training - 0.2 0.2

Base Cost 7.0 6.0 13.0

Physical Contingencies 0.7 0.4 1.1Price Contingencies 2.0 0.9 2.9

Total Project Costs 9.7 7.3 17.0

Financing Plan US$ Million Equivalent X of TotalLocal Foreign Total Financing

IDA 8.1 4.7 12.8 75FAC - 2.6 2.6 15Government 1.6 - 1.6 10

Total 9.7 7.3 17.0 100

Estimated DisbursementsIDA fiscal year: 1985/86 86/87 87/88 88/89 89/90 90/91 91/92

-- US$ millions

Annual 0.2 1.8 1.8 2.8 3.4 2.0 0.8Cumulative 0.2 2.0 3.8 6.8 10.0 12.0 12.8

Economic Rate of Return: 24% on the commercial plantations componentrepresenting 50Z of Project cost.

Map No: IBRD 18487

1/ Taxes are negligible

SECOND FORESTRY PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. BACKGROUND

A. Project Background ................................. 1B. The Agricultural Sector ................ *... ....... . 2C. The Forestry Sub-sector Issues and Strategy ........ 5

II. GOVERNMENT SUPPORT AND POLICY FOR THE FORESTRY SUB-SECTOR

A. Forestry Institutions ........ .... .................. 9B. Forestry Projects ........... ............... * , 11

C. The Quest for Wood .... ................0................. 12D. Government Strategy and Policy for the Sub-sector .. 15

III. THE PROJECT

A. General Description ..... ........... e........ 18B. The Project Areas .................................. 19C . Detailed Features ...... .................. 20D. Project Costs ........ *.*...O .......... *.......................... 25E. Financing ................... ,...................... 26F. Procurement .......... .... 27G. Disbursement ......... ... ..... ............. ......... 28H. Accounts and Audit ................ 0........ ...... 29I. Environmental Impact *- ....................... .. 30

IV. PROJECT IMPLEMENTATION

A. Organization .. ... ........ .. ............... ......... 30B. Management of Project Components ..................... 31C. Annual Work Plans ... .............. .... *.. ........... * . 33D. Staffing .... ....................... *................... 34E. Implementation and Monitoring ............. . ......... 35

V. TECHNICAL AND PRODUCTION ASPECTS

A. Technical Aspects .................................... 35B. Production Aspects .............. ................... 37

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PageVI. MARKETS AND PRICES, FINANCIAL AND FISCAL ANALYSIS No.

A. Marketing and Prices ........ ......................... 42B. Financial Analysis .... ............................... 45C. Fiscal Analysis ...... 46

VII. BENEFITS AND JUSTIFICATION

A. Benefits ...... .. ...... 47B. Justification ... ..... ... ....... 48C. Risks and Uncertainty ................................ 49

VIII. AGREEMENTS REACHED 50

Supporting Tables, Schedules, Charts and Annex

Table: 1 - Forestry II Cost Table by Category2 - Government Cash Flow with Project3 - Economic Rate of Return - Flows of Costs and Benefits4 - Financial Rate of Return - Flows of Costs and Benefits

Schedule 1 Estimated Schedule of Disbursements

Chart 1 Implementation ScheduleChart 2 Forest Department Organization Chart

Annex 1 Statistics and Data on the Forestry St.b-sectorAnnex 2 Selected Documents and Data Available in the Project File

Map IBRD 18487

BURUNDI

SECOND FORESTRY PROJECT

STAFF APPRAISAL REPORT

I. BACKGROUND

A. Project Background

1.01 The proposed Project would follow directly from the IDA-financedForestry Project (Credit 918-BU) and was identified during the latterphases of implementation of the first project. In discussing futureinvestments, it was agreed that a modified approach to afforestation shouldbe adopted for a second phase project, involving greater emphasis onintegration of forestry within smallholder farming systems. The reasonsfor this shift were that limited land availability was the main problemunder the First Forestry Project, and that Burundi's farmers give thehighest priority to improving crop and livestock enterprises. They arethus most likely to plant and maintain trees if it benefits their farmproduction overall. On this basis terms of reference for Phase IIpreparation were prepared in 1983 by the Burundi Government, reflecting IDAcomments. The FAO/IBRD Cooperative Program was asked to assist withpreparation of a Second Forestry Project. An FAO/IBRD-CP preparationmission visited Burundi in January/February 1984. It included anagronomist, a livestock specialist, a forester and an economist, all ofwhom were to address the recommended "agro-sylvo-pastoralV approach. Theirreport was received at the Bank in May 1984. An IDA mission composed ofMessrs. Y. Gazzo and N. Brouard (IDA), J.C. Crouail, B. Ruet and P. Wood(consultants) visited Burundi in June/July 1984 to appraise the Project.The Fonds d'Aide et de Cooperation (FAC) was represented by Mr. C. Taupiac,forestry advisor attached to the Burundi Forest Department.

1.02 The Bank group is one of the major sources of developmentassistance in Burundi. To date IDA has financed six agricultural projects,of which three are completed, one is near completion (Forestry I, Credit918-BU), and two others are being implemented. The Coffee ImprovementProject (Credit 147-BU, US$1.8 million), the Second Coffee Project (Credit593-BU, USS5.2 million), and the Fisheries Development Project (Credit262-BU, US$6 million) have been completed. The general conclusion of theProject Completion Report, Performance Audit (Report No. 1531) and ImpactEvaluation Report (Report No. 3314) on the First Coffee Project (at Ngozi)was that the project had achieved its objectives, although the quantitativeresults were somewhat below appraisal estimates. The Second Coffee Project(also at Ngozi) was to continue activities started under the First Project;in addition, it included a food crop promotion component. The SecondCoffee Project PPAR (Report No. 4576) concluded that, overall, the project

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was a qualified success. The coffee component achievements were aboveappraisal estimates, while the food crop and livestock components werebelow estimates. This project was more affected than the first by the lackof trained and experienced staff, by insufficient and irregular Governmentcounterpart funds, and by heavy dependence on foreign assistance. AProject Completion Report for the Fisheries Project was recently completedand a PPAR will be issued shortly. Poor management was the principalproblem here and led to very disappointing results. Management problemswere explained both by a weak parastatal agency and inadequate technicalassistance in critical areas. The First Forestry Project (Credit 918-BU,US$4.3 million) is nearing completion; it is described in greater detail inparas 1.16 and 1.17.

1.03 The Kirimiro Project (Credit 1165-BU, US$19.3 million) and theNgozi III Project (Credit 1192-RU, US$16 million) are underimplementation. These two projects provide for a more integrated regionaldevelopment approach than the two earlier projects for the Ngozi Region.They were designed to address key issues which emerged during theimplementation of the First and Second Coffee Projects. As such, theyinvolve substantial investments in institution-building, establishment andreinforcement of rural extension services, construction of roads andeconomic and social infrastructure, research, and a range of technicalmarketing and policy studies. They reflect lessons learned from previousBank-supported projects and represent an attempt to respond to theGovernment's broader approach concerning rural development (para 1.08).Nonetheless, these two projects have experienced implementationdifficulties caused by lack of qualified local personnel and of counterpartfunds, and by uneven technical assistance performance. These problems are,however, being addressed and implementation has improved significantly.

B. The Agricultural Sector

1.04 General. Agriculture is Burundi's most important economicactivity. More than 90% of the population depends directly onagriculture which also provides the lion's share of foreign exchangeearnings. During the 1970s, agriculture accounted for an average of 60% ofGDP, but its share fluctuates with the performance of food crops and coffeeproduction.

1.05 Burundi has a rich endowment for agriculture, but faces mountingpressure on its limited land resources from a growing population.Virtually all good land is cultivated (30% of the total land). Altitudeand rainfall vary broadly (11 different natural zones are defined for landclassification purposes) and most crops can be cultivated. On the otherhand, the hilly topography renders modern farming difficult and hascontributed to grave and growing soil erosion problems; control of soilerosion is a priority Government objective. Of land potentially availablefor agriculture, about 40% is under crops, 31% is used for grazing, 7% is

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forest and an estimated 20% is unclassified; the latter remains to beassessed in detail because it consists of steep slopes, temporarilyunoccupied grazing land and soils of low quality. Burundi's farmers areprimarily smallholders and there are about 700,000 farming units. Becauseof high population density (160 per km2 -- one of the highest in Africa)farm size is very small at 1 ha. Although all land in Burundi technicallybelongs to the State and is administered by local authorities (thecommunes), most land holdings are governed by a combination of traditionallaw and recent Government regulations. In practice crop land is held byindividual families while all pasture land is communally held. Small areasare farmed commercially under more formal individual tenure arrangements.

1.06 Traditional subsistence farming dominates agriculturalproduction; production systems are characterized by high labor intensityand the use of traditional methods and rudimentary tools (mainly hoes andmachetes). Farming systems are relatively complex, with substantialintercropping and multiple crops grown on most farms. Farmers use organicfertilizer, as available, but little chemical fertilizer; chemicals areused on coffee and cotton for insect control. Animal traction is largelyunknown. Fallow periods, particularly in the highlands, have beendecreasing because of population pressure, and this has resulted inovercultivation and soil deterioration. Forest land has steadily declinedas farmers bring new land into cultivation. Most holdings have a few trees(either wild or cultivated), growing scattered on poor, unproductivepatches or steep slopes. On the average, not more than 5-10 ares per farm(5-10% of farm size) are under trees. Food crops are the mainstay of thesubsistance economy and also represent the single most important source ofmoney income for farmers (mainly through the sale of banana beer). Foodcrops cover about 92% of cultivated land and cash crops about 8%.Traditional food crops include beans, peas, cassava, potatoes and sweetpotatoes, maize, sorghum, groundnuts and bananas. Roughly 85% to 90% ofthe production of these foodstuffs is for farm consumption. Informationabout production, yields, areas planted, cultivation techniques andproducer prices (for the 10% to 15% that is marketed) is poor but importantefforts are underway to improve the statistical coverage. Non-traditionalfood crops include rice, wheat, palm oil and sugar, most of which have beenintroduced relatively recently.

1.07 Agriculture is the most important source of Burundi's foreignexchange earnings. Its share of foreign exchange revenues has averaged95% over the past decade, with coffee contributing an average 90%, andcotton, tea and hides accounting for most of the remainder. Due toclimatic conditions coffee's production fluctuates considerably from yearto year. Most coffee produced is exported. Burundi's coffee export quota,determined by the International Coffee Agreement for 1982/83 and 1983/84,was 25,800 tons. Production has fluctuated between a low of 17,000 tons in1978 and a high of 45,000 tons in 1982. Cotton production averages 6,000

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tons/year. Cotton exports have fluctuated between a high of 3,630 tons in1978 and a low of 800 tons in 1981. Tea production is shared betweenindustrial plantations (1,750 has and smallholders (3,250 ha). The valueof tea exports is roughly the same as cotton. Agriculture accounted forabout 10-12% of total import expenditures over the last decade, most of itfor food items, and only a small part for agricultural inputs.

1.08 Sector performance. The last three Five-year Development Plans(1968-72, 1973-77 and 1978-82) have emphasized increased food cropproduction and cash crop development to provide foreign exchange resourcesand additional revenues to the Government. The 1978-82 plan proposed a newstrategy aimed at increasing incomes and improving living conditions in therural areas through a set of measures including food crop and livestockdevelopment, erosion control and cash crop diversification. A strongercooperative movement and the creation of Regional Development Companies(SDR) to implement integrated rural development projects were to constitutethe major vehicles for achieving the plan's targets. Actual performance,in agriculture as in other sectors, has fallen short of the plans'ambitious objectives although there has been important progress in someareas. Although statistics are scanty, it appears that food production isbarely keeping up with population growth.

1.09 Issues. Burundi's recent agricultural development experienceindicates that some important issues must be addressed if the broadstrategic objectives of increasing production and improving rural livingconditions are to be achieved. These issues can be grouped into threemajor categories: production, institutional and financial issues. Majorefforts to upgrade productivity within traditional farm systems will beessential if agricultural production is to be increased. Priority areasfor action are adaptive research and improving the production anddistribution of inputs. Agricultural research is a pre-requisite andshould focus on measures to control erosion and to improve soil fertility.The responsibilities of agricultural institutions, notably RegionalDevelopment Companies (SRDs) and parastatals need to be clarified, theirobjectives defined and their financial impact on the national budgetreviewed. Agricultural service and investment management, including SRDand parastatal management, need to be strengthened. Insufficient numbersof trained, experienced Burundi staff is a key problem, but more explicitattention is needed in planning and implementing services and above allinvestment projects, to institution building, and measures to ensure thatefforts are sustained over time. A host of complex issues turn aroundfinancial resources available for agriculture and their management.Agriculture's share in budget resources is low and has declined. Over thepast five years the Government has allocated only 10-25% of its investmentbudget and about 5% of the recurrent budget to agriculture. Theseallocations are insufficient to support a dynamic investment program andbasic farmer services. External financing is not reflected in budget

figures, but even so agriculture's share of estimated total investmentdeclined from 30% in the early 1970s to 15% today. Credit available foragriculture is confined essentially to coffee marketing and processingoperations. In short investment is far below what it should be and a keypriority is to expand Burundi's ability to plan and manage investments andservices for agriculture. An important related issue is cost recovery fromagriculture. The Government is committed to encouraging recovery of costsfor beneficiaries, to help render services and institutionsself-supporting, but a coherent policy and mechanisms to implement thispolicy have yet to be worked out.

C. The Forestry Sub-sector Issues and Strategy

1.10 Forestry development was long neglected in Burundi's developmentefforts. The most dramatic symbol of the low priority to forestry is thefact that to date there is no qualified national forester in the ForestryDepartment. Since the late 1970s, however, there has been a sharp focus onforestry issues prompted largely by unmistakable evidence that forestresources were being cut down much faster than they were replaced, with areal threat that most forests could disappear within a decade, withpotentially devastating ecological consequences. There has also been agrowing appreciation of the links between dwindling forest resources andthe decline in soil fertility and soil erosion problems, one of the mostcritical issues for Burundi's agriculture: as trees become scarcer,farmers have increased use of agricultural residues for fuel instead ofusing them on crops. Denuded slopes in Burundi's hilly landscape are proneto erosion. The new focus on forestry has led to an impressive investmentprogram, which has been relatively successful in stepping up the rate ofplantations established, protecting natural forests and launching a newnursery program to supply seedlings to farmers for individual wood lots.The time has come now, however, to define more clearly Burundi's forestdevelopment strategy and to develop the institutional framework which willensure its implementation. An essential element of this strategy must bean integrated approach to Burundi's forestry sector, including measures toaddress the critical problem of the place of forestry in Burundi's 700,000small farms, supply of fuelwood to the growing urban population, supply oftimber resources and protection of the environment. An important policypaper, which sets out a strategic framework and specific action measures,has been recently approved by the Government (para 2.14).

1.11 Burundi's forest resources are estimated at about 200,000 ha, ornearly 7% of the total land area. This is a rough estimate because forestresources (like other land use patterns) are not systematically assessedand changes are not monitored. Some important efforts to improve data onforest resources are, however, underway and deserve a high priority infuture action programs (paras 2.16 and 2.18). About 140,000 ha of forestsare man-made plantations, while 60,000 ha are protected forests, includingthe remnants of dense tropical mountain forest along the Zaire/Nile crest

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divide in the northwest (about 40,000 ha), small areas of savanna woodland(15,000 to 20,000 ha) in the south, and forest galleries along watercourses and in steep gorges. Forest plantations are owned by theGovernment, communes, religious communities and individuals. Productivityof plantations varies widely, but annual increments are generally fairlylow and overall wood production is far below demand so that total forestresources are declining.

1.12 Information on wood consumption and demand is fragmentary andunreliable, although better data on wood and charcoal sold in the maintowns have become available in recent years. Burundi relies on a varietyof energy sources, including hydroelectric and thermal power, but woodproducts remain a vital source of energy, both in rural and urban areas.Both for energy needs and o.her uses of wood, demand, measured both interms of theoretical requirements and the evidence of markets, faroutstrips current supply. Notably, the need for firewood is estimated at aminimum of one million m3/year (assuming a per capita annual woodconsumption, low by international standards, of 0.25 m3/year), whilecurrent supply and hence consumption is far less (perhaps one half).Projections for future demand show a steadily rising trend; by the end ofthe century demand is likely to double. Estimated demand for timber is130,000 m3 (including 2,000 m3 of legal imports), compared to an annualproduction of 10,000 m3. Per capita consumption of fuelwood and charcoalin towns, especially Bujumbuta, is higher than in rural areas due to theunavailability of alternative fuels such as agricultural residues andhigher cash incomes (para 2.09). The rural population is increasinglyusing agricultural residues to meet their fuel needs and in some areasagricultural wastes are the primary fuel. This contributes directly todeclining fertility and crop yields, which in turn increase pressure on theland and leads to shortened fallow periods, soil degradation and fallingcrop production.

1.13 The wood shortage is clearly reflected in rapid increases incharcoal prices: from BuF 150/bag in 1970 to about BuF 750 in 1984(BuF 20,000/ton). This price increase (500X) is much higher than theconsumer price index increase (250%) for that period. Production cost in1984 was estimated at BuF 300/bag, including 33% for salaries, 59% for woodpurchase and 8% for bags. Inefficient charcoal making is a serious problemas much wood is wasted in its production. This has particular importancebecause of the growing Bujumbura market for charcoal (Bujumbura, with 5.5%of the population, accounts for 15% of total fuelwood consumption).Charcoal is produced and marketed by small-scale entrepreneurs.Traditional methods are used in its production (yields are around 10%);there are few incentives for economies as charcoal-making fees are based onthe number of bags produced and not on area of wood cut or wood volume.Better charcoal production methods have been introduced and tested throughthe First Forestry Project (para 2.07), but there is an urgent need topromote their application.

1.14 Since 1978 the Government has initiated several largeafforestation projects to replenish its dwindling forest resources. Duringthe period from 1978 to 1984 a total of 19,000 ha of new plantations wereestablished with external financing. This represents about 45% of thetotal area planted between the same dates. While these projects have beenwell implemented, their impact has been blunted both by the absence of awell articulated, long-term development strategy and by the weakness ofinstitutions in the forestry sector.

1.15 Sub-sector issues and strategy. Continued support fordevelopment in the forestry sub-sector is an important element of theGovernment's development strategy; however, its financial contribution tothe subsector is low and a substantial increase from present levels isneeded to turn strategic objectives to reality (para 2.05). Objectives areclear: new afforestation projects should contribute to soil erosioncontrol and they should not use land suitable for agriculture; emphasisshould shift from large-scale plantations to farm forestry to the extentthat farmers interest and technical packages emerge; agro-forestry shouldbe developed to promote farm forestry activities; and state plantations andnatural forests should be protected and weil managed. These are priorityobjectives of the Government Fourch Development Plan (1983-87) (para. 2.14)and it is also at the center of recent policy papers and of the recentlyapproved forestry policy paper (paras 2.15 to 2.18). To achieve theseobjectives a long-term investment and institution-building program isrequired. The long-term planting program should include commercialplantations, protection plantations and rural nurseries/agroforestryprograms to meet expected demands for different types of woods.Institutional development efforts must focus above all on training of highlevel technicians at the Forestry Department. Clearer mechanisms formanagement of existing and future plantations, creation of planning andmonitoring mechanisms, and well defined systems for pricing of woodproducts are also needed. Additional priority areas for action includeestablishing a comprehensive research program on forestry and agroforestry,improving charcoal production methods, and improving links between forestryprograms and other agricultural or livestock programs in high populationdensity areas.

1.16 Previous Bank involvement in the sub-sector. The first IDAForestry Project (Credit 91S-BU) represented the first stage of a long-termprogram to develop basic forestry services and plantations supplyingfuelwood, building poles, and timber. It was appraised in July 1978,approved by the Executive Directors in May 1979, and the US$4.3 millioncredit became effective in October 1979. Total costs were estimated atUS$8.8 million. EEC financed a US$1.3 million special action credit andFAC the technical assistance. The World Food Program (WFP) also providedfood rations to plantation workers in the Project's remote afforestationareas. The project objectives were: to establish rural nurseries in 30communes, and 2,000 ha of eucalyptus and 5,000 ha of pine plantations; tofinance technical assistance for project management and training for localstaff; to study energy needs and conduct applied trials, and in particular

to improve charcoal production. Benefits expected from the project were:increased supplies of fuelwood, building poles and charcoal to the localpopulation. The project was due to be completed in September 1984, butcompletion has been delayed to June 1985, which will allow a full fiveplanting seasons and help to ensure a smooth transition to the secondproject.

1.17 Project implementation has generally been successful. It isahead of schedule in several of its physical objectives and most objectivesshould be reached by the end of the investment period. By June 1985,approximately 6,150 ha will have been planted, including 2,050 ha ofeucalyptus and 4,100 ha of pine. About 60 new nurseries have beenestablished, one per commune and are operating, presently selling2 5 ,000year of seedlings to farmers. Problems encountered by the FirstForestry Project (para 2.07) have included limited land availability atsome of the plantation sites (Mageyo), resentment by the local populationand temporary labor shortage in others (Vyanda), lack of candidates fortraining (at the university level) and inadequate and unreliable Governmentfunding (replenishment of revolving fund). The chronic shortages ofGovernment funds were overcome by the estab'.ishment of a revolving fundfinanced by credit funds.

1.18 Sector and sub-sector lending strategy. The key challenges foragricultural development in the decade ahead are to tackle the issues ofchanging farming systems in the face of mounting population pressures, andto develop Burundi's capacity to plan and manage services and investments.A dynamic research program geared to small farmer needs and closely linkedto farmer services, notably extension and input supply, is a top priority.Agroforestry, the integration of trees in farming systems, has beenneglected but will play a key role. Institution-building also poses vitalproblems; well-focused training programs are essential and care must betaken to ensure that programs and services are tailored to availablefinancial and managerial resources. Burundi's high (ard increasing)population density poses special issues which must feature in agriculturalstrategies. This dilemna of rising population pressure on land must guideresearch and extension programs. Host urgently it dictates a dynamicaction program to address the related problems of dwindling forestresources and soil erosion and exhaustion of soil fertility. An integratedapproach, starting at farm level with soil conservation, better use ofinputs and judicious use of trees on the farm, but also includingproduction plantations wherever land is available and good management ofplantations and systematic protection of natural fcrests, is needed. Theproposed project is designed to support such an intrgrated approach to theforestry sub-sector and thus has an imp4.ctant and central role in theBank's operational strategy for Burundi.

CHAPTER IIGOVERNMENT SUPPORT AND POLICY FOR THE FORESTRY SUB-SECTOR

A. Forestry Institutions

2.01 General and local administration. The Forestry Department ("Eauxet Forfts") is one of four departments of the Directorate General ofAgriculture, in the Ministry of Agriculture and Livestock. TheDepartment's director is also responsible for fisheries and wildlife, andparks. The department consists of two sub-directorates: forests andfisheries. The responsibilities of the sub-directorate of forests include:implementation of the Government's forest policies, management of reservednatural forests, management of man-made plantations, control ofexploitation of communal plantations, and management of Government-controlsawmilling. Forest reserves became the responsibility of the NationalInstitute for Nature Conservation (INCN) which falls directly under thePresidency, by the decree of May 3, 1980. The Department nonethelessmaintains a general mandate for coordinating all forestry activities,including natural forests. The Forestry Department staff includes about 100civil servants (52 technicians and 13 assistant technicians) representing20% of the personnel of the Ministry of Agriculture - excluding contractualemployees. The department's current organization is not adapted to themajor challenges it faces in implementiAg forestry policies and programs,notably, responsibilities of various units are not clearly defined, and thefield level organization is limited and weak. The forest policy paperaddresses this issue, and calls for a reorganization of the department,both at the central and field level. The proposed project would supportthis reorganization and institution-building effort (para 4.01).

2.02 The number one problem for the Forestry Department is lack ofqualified staff. Burundi has no trained high-level Burundi forester andthere is a marked shortage of lower level staff; there are, however,adequate numbers of trained mid-level staff. The Department has nodeputy-director and some services are currently run by technical advisers.The high level staff are all agricultural engineers with no forestryqualifications. Thirteen provinces out of 15 have one or two forest

agronomes-, the remaining two provinces sharing the services of fiveassistants. Forest "agronomes- all come from the Burundi TechnicalInstitute of Agronomy (ITAB). Assistant foresters come from the KigambaSchool, while guards and monitors are trained on the job. Anotherimportant problem facing the Department is a severely limited means oftransport. Most equipment is old, inadequate and poorly maintained becauseof lack of funds. Field staff have barely any means of transport.

2.03 Efforts to strengthen forestry extension are badly needed. Atpresent the forestry extension service is small and narrowly focused,although national tree planting campaigns and individual actions are having

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a valuable impact. Cooperation between the forestry and agriculturalextension services is limited. The Forestry Department has tried topromote tree planting, but lacks a well-defined plan and has no means ofmonitoring progress. Serious understaffing has been one of the mainproblems, and many communes are without an assistant forester. Trainingand supervision of extension workers are generally inadequate and littleeffort has been made so far to teach the rural population to plant andmanage woodlots, or how to save cooking fuel. Additional financing will berequired to have a significant impact through training programs, e.g., bymaking greater use of audio-visual and othez methods.

2.04 Forestry research has been almost non-existent until recently;however, work on several forest research topics, including agroforestry,is expected to start soon. Forestry research is the responsibility of theNational Agricultural Research Institute (ISABU), which depends directly onthe Ministry of Agriculture, but it is only a minor activity at theInstitute. The orientation of work exclusively toward cash crops (coffee,tea and cotton) is being modified to include more research on food cropsand forestry. Trials undertaken over the past 20 years are currently at astandstill for lack of personnel. The only ongoing forestry Zaire-NileDivide Mission (MFCZN). This project was initiated in 1976 and is financedby French bilateral aid (FAC). FAC is also planning to start anagroforestry research program shortly, as well as the funding of a researchspecialist and equipment. A large number of trials have been carried outin different ecological zones, covering many important topics. Among theproblems requiring specific attention are live firebreaks, leguminouscrops, the effects of fertilization on cultivation, the preparation ofvolume tables and the study of production costs. The FAC project willtackle these problems and, in the short and medium term this represents aneffective approach to addressing priority forestry research issues.

2.05 The forestry sub-sector has been relatively privileged in termsof investment levels in recent years, and a number of large investmentprojects have been launched. The key problems are poor coordination amongproject efforts, the absence of a coherent, carefully vetted investmentprogram for the sub-sector, and chronic difficulties in providingGovernment counterpart funds for these investments. An additional, relatedproblem is the very low level of resources going to support recurrent costsof the forestry services, which seriously impede efforts to strengthenmanagement of forestry policies and programs and has implications for thesustainability of programs launched. We conclude that Government budgetallocations to the sub-sector have been insufficient to meet the challengeof developing forestry resources and operating on-going programs andservices well, and substantially more resources are needed if forestryobjectives are to be realized. The share of forestry in recurrent budgetexpenditures has varied little over the past decade (the share ofagriculture has ranged between 3-5% during the same period). The recurrent

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budget is almost entirely absorbed by salaries and wages. Of the BuF 18million (US $150,000) allocated in 1983, BuF 10 million and BuF 8 millionwere earmarked for contract staff and regular staff, respectively. Theshare of forestry in investment budget expenditures is also small,representing less than 10% of the total investment budget for agriculture(BuF 54 million; US$450,000 in 1983). These figures, however, have limitedsignificance because almost all investments are carried out under donorfinanced projects (which do not figure in the budget) to which theGovernment adds a small contribution.

B. Forestry Projects

2.06 Current forestry projects. During the Third Five-Year Planperiod (1978-82), major afforestation projects established approximately12,600 ha of new plantations: between 1978 and 1984 the total stood at18,800 ha.

Area Planted 1978-84 (ha)

Timber Fuelwood Protection Total

- Externally-financed Projects 8,500 2,000 8,300 18,800- Government-financed Plantations 4,400 5,600 - 10,000- Communal Plantations 100 11,800 - 11,400

13,000 19,400 8,300 40,700

A number of other forestry projects are currently underway in Burundi,including the IDA-financed project (para 1.16). Belgium and Saudi Arabiaare co-financing an afforestation project over 12,000 ha inMugamba-Bututsi, in south-central Burundi. The European Development Fund(EDF) will finance the afforestation of 3,200 ha at Mumirva and 6,000 hanear Gihofi. FAC is financing the planting of a 500 ha protection beltaround the Zaire-Nile divide in northern Burundi. Two IDA ruraldevelopment projects (paras 1.03 and 1.04) have forestry components. AnFAO-UNDP project (which was jointly carried out with the First IDA-financedForestry project) has already trained approximately 35 forestrytechnicians. Most of these projects have a regional rather than a sectoralfocus and they generally concentrate on tree-planting rather than onextension work, conservation programs or training. The communes have beenengaged in afforestation programs undertaken in the context of communalworks, with mixed results. National, essentially public relationscampaigns have been initiated, such as the proclamation of 1979 as"l'Annee de l'Arbre' (tree planting year), in an attempt to reduce forestdestruction and to promote individual tree planting. An important elementof this national effort has been establishment of Government nurseries toproduce seedlings for sale to the population. Public response has beenfavorable and the demand for seedlings has grown regularly as the number ofnurseries has increased.

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2.07 The First Forestry Project (para 1.16), is described in ChapterI. Some specific issues, however, merit further discussion since they haveimplications for design of the second Project. Training of technicians wasan important component; these activities were successful but need to beexpanded at the national level. 1While training efforts at first focused onmid-level technicians, emphasis now needs to be put on training higherlevel technicians. Another important issue is project managementarrangements. Project management was handled expertly and efficiently, butit is noteworthy that it was handled mainly by expatriates. FAC financed atechnical assistance team from the Centre Technique Forestier Tropical(CTFT). In addition to their main plantation activities these expatriateshave provided valuable on-the-job training to national project staff.However, because of the shortage of Burundese agronomists, transfer ofresponsibilities to the local foresters at the Project management level wasslower than planned and concerted efforts to ensure that managementresponsibility is assumed by Burundi nationals are needed in the next fewyears. Better charcoal production methods have been introduced under theFirst Forestry Project and traditional fuel-conserving stoves are beingexperimented with. Traditional charcoal yields are around 10%: efficientmethods can double this figure. The challenge is now to pursueexperimental demonstrations to find ways to transfer new technologies tocharcoal-makers. Generally the rural nurseries have been a success but forlogistic reasons their number had to be doubled while the average annualproduction per nursery was halved. This led to a higher average productioncost of seedlings than expected. Obviously steps should be taken to ensurethis is not repeated as the program is expanded to cover Burundi's 90communes. The changes introduced were intended to mitigate local hostilityto the planting of large tracts of trees on the extensive grazing lands,particularly in the southern part of the country, at Vyanda. This laudableobjective can in future be better met by careful siting of nurseries.

C. The Quest for Wood

2.08 It is clear that wood fuel will remain the main source of energyfor household purposes for some time to come; this is because of the highcost of imported fuel and the low purchasing power of the population.Therefore it is vital that efforts focus on increasing wood supplies andthe efficiency of their use rather than on substitution for wood products.Consumption of timber is relatively limited in comparison to fuelwood, asare official wood imports. The need for timber is nonetheless importantand need to be addressed.

2.09 The rural population uses firewood and agricultural residues tocook food and for their other energy needs. Agricultural residues cover anestimated 15% of energy needs. The fuelwood scarcity has an impact on foodcrop production as the rural population increasingly uses agriculturalresidues to meet fuel needs. This reduces soil fertility and crop yields,

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which in turn leads to shortened fallow periods, soil degradation andfalling production. Deforestation resulting from the energy needs of thepopulation, without alternative energy sources, is accelerating the processof soil erosion and there is good reason to fear that consequences of thisdeforestation are worsening. Marketed firewood supplies the principaltowns and rural institutions such as missions a-d hospitals, and ruralindustries such as tea factories. A recent survey showed that 87% ofhouseholds in Bujumbura use purchased charcoal as their main cooking fuel,the remainder using mostly purchased wood. According to the same survey,the amount spent per month per person on charcoal for :ooking was about BuF250 (US$2). This is equivalent to 10-15% of the amount spent on food. Themain potential substitutes for charcoal and firewood are electricity,imported kerosene and domestic peat. In terms of useful energy forcooking, electricity costs roughly the same as charcoal, and higher incomeurban families are using it; however, the cost of electric appliances istoo high for most of the population and the prospects for their reductionthrough bulk procurement and/or local manufacturing for a regional marketare not very promising at least for the near future. Even without takingthe cost of kerosene stoves into account, the cost of imported petroleumproducts (US$85/barrel c.i.f. Bujumbura) prohibits the use of kerosene forcooking. Efforts have been made to promote domestic peat as a cookingfuel, but consumer acceptance has been poor. This is due to: (i) the factthat people are accustomed to cooking with charcoal; (ii) difficulties inpeat combustion; (iii) the high ash content of the local peat; and (iv) theprice of peat not being competitive with that of charcoal. Household useof peat may become possible in the future once the peat industry hasdeveloped further. The conclusion is inescapable that Burundi will remaindependent on wood for the foreseeable future.

2.10 Consumption of timber is small by comparison to fuelwood (130,0003 in 1983). Bujumbura accounts for about 45% of timber consumption. Mostof the wood comes from the Zaire/Nile Crest divide (103,000 m3 ) while therest comes from State and communal plantations (25,000 m3 ). Wood is alsowidely used as a fuel in industrial or small-scale operations (e.g. teaprocessing, brick making, bakeries, lime kilns and fish drying).

2.11 Official wood imports are limited: there may be some unofficialimports but in very small quantities. An equivalent of US$300,000 in woodproducts are imported annually; this represents about 0.2% of the value ofall imports in 1982, and 2,000 m3 of sawn timber. These imports coverabout 1.5% of the present demand. There is some potential for imports ofconstruction timber or wood products from Tanzania and Zaire. This mightassist Burundi in meeting critical short-term wood and fuel requirements,but the costs of imported wood products would be high and it seems unlikelythat long-term requirements could be met through imports. Considerablequantities of metal are imported and substitute for wood in the modernconstruction sector. Petroleum products represented about 15X of the valueof imports in 1982; the percentage for metal products is unknown. Burundiexports virtually no wood or wood products.

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2.12 Marketing and pricing. Most charcoal is produced and marketed bysmall scale entrepreneurs. Wood is cut and charcoal produced in situ.Production techniques employed are exclusively traditional (burning inearthen pits), and they are inefficient. The general scarcity of wood hasresulted in periodic shortages of charcoal, with sharply increasingprices. The Government, concerned by illegal forest cutting and thereduction in forest area, has restricted charcoal production in manyareas. Thus, charcoal is coming from increasingly afar, with consequentincreases in prices (para 1.13). Wood for firewood and poles is normallymarketed by small entrepreneurs who employ woodcutters. If trees are ougovernment or communal land a cutting permit and payment of a communal taxare normally required. Timber logs are normally pit sawn by skilledsawyers and the market price is relatively high (BuF 18,000/m3 of sawnwood at Bujumbura in 1983). Burundi's only 'modern' processing equipmentis an old portable band-sawmill at Bugarama. This mill breaks downfrequently due to inadequate supervision, poor operation and lack of spareparts. Its annual production is a small fraction of its rated capacity of500 m3 per annum. It processes mostly cypress thinnings from trees 15 to20 years old.

2.13 At present the pricing of wood and wood products in Burundi isnot well organized. The Government has not yet defined a coherent policyon pricing of forest products, but is taking steps to articulate andimplement one (para. 2.16). The problem is complex. For trees on privateland", including all trees planted by farmers, no tax or payment isinvolved, and by tradition farmers gather and cut wood wherever it-isavailable. In principle utilization of areas of natural forest, allGovernment plantations, and commanal plantations is strictly regulated. andeither a permit fee or a communal tax is payable. In practice it isdifficult, if not impossible, for the Government to control cutting oftrees and collect fees except on large plantation blocks. Cutting permitsrange from BuF 1,800 to BuF 2,500 per lot of 10 to 15 trees. This is wellbelow the cost of replacing trees and the level of permit fees is clearlytoo low. The Government, however, hesitates to increase rates in the fearthat it would increase illegal cutting and marketing of forest products.The staff of the forestry department is limited and plantations are widelyscattered, with many in such poor condition that they scarcely warrantcontrol efforts. Illegal cutting is for all these reasons widespread. Thesituation is complicated by confusion of records, so that ownership of manysmall plantations and tree stands is uncertain. Further, there are manyunknowns about what is actually happening, as no effective monitoringsystem exists. It is very clear that forest resources are dwindling andthere is mounting demand for wood products, but it is difficult to quantifyexactly how much is being cut or to project trends with any real accuracy.This complex of issues is being addressed in the Forestry Policy Paper, andthe Government is committed in principle to rationalizing the presentsituation and developing a more effective cost recovery system for forestproduction (Chapter VI).

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D. Government Strategy and Policy for the Sub-sector

2.14 Strategy. The Government has launched large afforestationprograms since 1978 (para 1.14) to arrest the pace of deforestation, andminimize its consequences. Objectives are broad and cover not only forestresources per se but also related issues of soil fertility and soil erosioncontrol. These programs are expected to continue under the 1983-87 FourthPlan period. The objectives for the Government's forest policy, as statedin the Plan, are as follows:

(i) The protection and management of existing naturalforests: protection against encroachment, brush firesand grazing animals will be assisted by the creation of abuffer zones.

(ii) In new projects priority will be given to afforestationby the state of hilltops and hillsides unsuitable foragriculture and of low pasture value, mainly for soil andwater conservation.

Ciii) Communal plantations will be of sufficientlylarge size to ensure the best use of available staff.

(iv) Individual and collective plantations will besupported by rural nurseries, supplies of seedlinxgs andgood extension staff.

(v) Agro-forestry in high density population areas will beimproved.

(vi) The introduction of anti-erosion hedges_on pastures willbe complemented by the introduction of soil-improving andfodder trees.

(vii) Wood uses. A study will establish wood needs, local,regional and national market projections for firewood,poles and timber, and the organization of the woodindustry.

Planned allocations to the forestry sub-sector are BuF 2.4 billion, or 2%of the total and 10% of the share of agriculture. This would represent, inannual terms, six times the 1983 Government allocation to the sub-sector.These financial objectives are somewhat over-ambitious, as are the overallafforestation objectives (para 2.15); even a partial achievement ofobjectives will depend on the willingness of external agencies to financethe lion's share of the program.

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2.15 The Burundi Government has stated as its long-term objective thatit will seek to extend the forest cover to 500,000 ha, or 20% of the totalarea of Burundi. Afforestation is considered the best way of protectingthe land in an agro-silvo-pastoral context. New forestry projects areplanned in areas of low demographic pressure and on land with no clearpotential for agriculture or livestock. Large scale plantations, whichwill cover some 30,000 ha by 1987, are thus to be geared to the dualobjectives of protection and production. Pine plantations will producetimber and firewood, callitris will be useful for protection and willproduce fuelwood, with some timber; and eucalyptus will produce mainlyfirewood and timber. To reduce the risks of large-scale monoculture,silvicultural research will aim to broaden the range of useful species.

2.16 Policy. With assistance from bilateral and multi-lateralagencies (FAC and EDF in particular), the Government has ix'tiatedimportant efforts for the development of the forestry sub-sector based onan integrated development of agriculture, livestock and forestry. Over thepast six years a series of policy documents have been prepared and reviewedand action to implement them has begun. Within the past year a broaderpolicy document (summarized below in paras 2.17 and 2.18) has been draftedfor the purpose of defining clear, well articulated Government forestryobjectives and providing a rational framework for future projects,including those financed by external donors. This document (which has nowbeen fully endorsed by the Government) is the first comprehensive documenton Burundi's forestry sub-sector.

2.17 The Forestry Policy Review provides a good overview of thecomplex problems of forestry and proposes a strategic framework foraddressing them. It is broad ranging in scope, addressing both issues ofwood supply in all its forms (sawnwood, poles, fuelwood, charcoal) andthreats to the environment (erosion, disappearance of natural fauna andflora). It underlines the importance of dynamic, active measures toincrease wood supplies and protect the environment, arguing that actionhere is a key to Burundi's future economic independence. Proposals foraction cover the broad policy environment, where reliance on privateinitiative is emphasized and the importance of cost recovery; they alsoinclude institutional measures and reorganization proposals (reinforcementof the Forestry Department and better linkages between forestry and cropand livestock development), and finally a framework for investments inforestry services, plantations, and wood processing and marketing. Thereview underlines the key importance of measures to ensure adequateincentives, given the critical importance of private farmers andentrepreneurs throughout the chain of wood-related activities, from treegrowing to charcoal and timber marketing. Some key themes evoked in thereview, which represent an agenda for action in the next few years, include

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(a) the need to improve knowledge of resources available andcomsumption levels;

(b) the need for more efficient management of existing resources;

(c) measures aimed at increasing productivity of plantations andforests;

(d) more dynamic efforts to encourage farmers to grow trees,including research and better extension services;

(e) development of private wood processing, including provisionfor credit;

(f) development and promotion of more efficient wood processing,especially for charcoal; and

(g) more effective conservation programs aimed at preservingnatural forests and plant and animal life.

Key elements in the strategy will include training of personnel,development of effective and relevant research programs, and establishmentof mechanisms to apply laws and policies affecting forests. The Reviewrecognizes clearly that the challenge is to make the best use of existingresources, as resource constraints will be a continuing reality.

2.18 The proposed Project is thus set against a backdrop of anintensive review of policy issues for forestry, which sets out a clear andcomprehensive development strategy and an ambitious agenda for policyanalysis and action. It also follows the recent approval of a new forestrylaw, which was based on needs identified through earlier policy reviews andwhich sets out a better legal framework for sector management. Thechallenge now is to translate policy and law into action. The PolicyReview has now been finalized and approved by the Government (including thePresident). It has benefitted from important contributions by severalexternal agencies involved in the sector, including IDA. Furtherdiscussions on implementation of the proposed measures and periodic reviewof progress and assessment of the need for adjustments would be pursued inthe course of implementation of the Project. Specific areas and issues tobe addressed include the institutional arrangements for improvement ofsector management (e.g. reorganization of the Forestry Department),training programs, application of cost recovery measures and definition andimplementation of regulatory measures related to the new forest law. Inaddition, an annual review of the proposed investments in the forestrysector would be conducted. Assurances to this effect were obtained atnegotiations. The proposed Project has been designed explicitly to supportimplementation of policy and institutional measures, and the institutionbuilding and pilot agroforestry and research components, in particular, arekey to finding long-term new solutions to the forestry dilemma.

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III. THE PROJECT

A. General Description

3.01 The proposed Project would be the second phase of a long-termprogram to develop basic forestry services and promote tree planting byfarmers, and to establish plantations supplying fuelwood, building polesand timber. The Project would support the Government's strategy forforestry development, notably in speeding the pace of reforestation onindividual farms and in larger scale plantations. It aims at laying thegroundwork for future development of agroforestry. The Project hasimportant institutional development objectives, notably in strengtheningthe Forestry Department, particularly its capacity to manage investmentprograms and staff training. It includes support for new research programsin agroforestry and pilot schemes to promote an integrated sylvo-pastoralapproach, and training of charcoal makers. The Project would providesupport for the continuing efforts to establish long-term pricing andmarketing strategies and mechanisms to implement them. Thus the Projectproposes to address important issues which have come to light in the courseof implementation of the first project, particularly in the financial,institutional (management and training) and policy areas (paras 1.16 and2.07). The proposed Project would comprise, over a period of five years,the following components:

(a) development of 90 Government-run rural nurseries (about oneper commune) including future development of 60 existingnurseries and establishment of about 30 new nurseries, eachproducing 40,000-50,000 seedlings (3-4 million altogether)per year; development of forestry extension services and apilot agroforestry scheme; and establishment of 2,000 ha ofdemonstration fuelwood, pole, fodder and fruit plots incommunes throughout the country (5 ha per year close to eachrural nursery);

(b) establishment by the Government of:- 3,500 ha of eucalyptus fuelwood and pole plantations atGakara, Bukinanyana and Mabanda, mainly to supply charcoalto Bujumbura; and

- 1,500 ha of pine timber commercial plantations at Vyandaand Vugizo;

(c) the protection, maintenance and silvicultural treatment ofexisting plantations established under the Phase I project(about 2,000 ha of eucalyptus and 4,000 ha of pine);

(d) the initiation of a program to promote integratedsylvo-pastoral activities, on a pilot basis, in a fewselected plantation areas with high density population;

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(e) institutional strengthening of the Forestry Departmentthrough the creation of a planning and monitoring unit, andtwo new regional forest inspectorates, includ±S-.support foradditional staff, buildings, equipment and running cOsts,and expatriate technical asslstance and strengthening of theProject management unit; and

(f) an agroforestry training program, including overseasscholarships for foresters at university level and localtraining; and studies, trials and training consultancies inagroforestry, charcoal-making, forest exploitation and woodutilization.

3.02 The Forestry Department ("Eaux et For8ts"), which is under the

Director-General of Agriculture of the Ministry Agriculture and Livestock,would have principal responsibility for Project implementation. Within thedepartment a Project Manager would report to the Director of Forestry, andthe Project unit (established under the first phase Project) would havedirect responsibility for all Project activities. The livestock andagricultural component would be run by a special management unit reportingto the Project Manager, but specific arrangements would be worked out toensure close coordination with relevant services at the Departments ofAgriculture and Livestock. Forest and agroforestry research would beundertaken by the agricultural research agency, ISABU, on behalf of theForestry Department, in close cooperation with the Project unit.

B. The Project Areas

3.03 Project activities would be undertaken in most areas of Burundi,with plantation establishment concentrated around Bujumbura and Vyanda onthe Zaire-Nile divide (see Map). The rural nursery program would beexpanded so that all of Burundi's 90 communes would have one nursery each;thus this effort would be nationwide. In addition, 2000 ha of woodlotswould be established in communes distributed throughout the country. Theeucalyptus plantations would be established at Gakara (500 ha, continuationof Phase I), in Bujumbura province, Bukinanyana (500 ha) in Cibitokeprovince, and at Mabanda (2,500 ha), in Nakamba province. All these sitesare located in the western part of the country, within reasonable distanceof Bujumbura. Given Burundi's acute shortage of good arable land,selection of plantation sites has been and will continue to be governed bythe principle that no land with good agricultural potential would beafforested. Nonetheless, only land with reasonable soils would be plantedas the objective is to establish productive, not protective, plantations.Even applying both these criteria, there is sufficient land for plantationson the scale proposed. The pine plantations would be sited at Vyanda(1,000 ha, continuation of Phase I), in Bururi province. Supportactivities to livestock and agriculture would be concentrated initially atVyanda and Vugizo.

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C. Detailed Features

3.04 Rural nurseries and agroforestry. The rural nurseries programhas been successfully implemented under the First Forestry Project (para1.17) and it would be consolidated and expanded. At present 60 nurseriesoperate, one per commune. Most of these nurseries would be redeveloped toimprove their operational efficiency and expand output, and the programwould be expanded to cover Burundi's 90 communes. Thus, 30 new nurserieswould be established and operated. The objective of this program is toprovide seedlings that will be planted by farmers on their farmland and bycommunes in small woodlots. It would provide a continuing source of treesfor fuel and o&her purposes, thus addressing the central problem of thewidening gap between wood supply and demand. The strengthened forestextension services (para 3.07) and agroforestry research and pilot programswould be primarily directed to promote these efforts, based on the communalnurseries, and special efforts would be made to ensure that their workis carefully integrated. Project activities would increase seedlingproduction and distribution significantly; seedlings distributed to farmerswould represent some 6,750 ha of trees (13.5 million seedlings, 2000seedlings/ha). Each of the 90 rural nurseries would produce at least40,000-50,000 seedlings per year at full development. The nurseriesalready established and new nurseries have extremely simple facilitiesconsisting of open nurseries shaded by grass roofs. They have no buildingsor vehicles operating for the nurseries per se, although the nurseriesserve as a base for extension services. The investment costs thus consistalmost exclusively of incremental operati% costs (supplies and labor).

3.05 Under the Project an organized agroforestry program would beInitiated and promoted throughout the country; it would be carried out inclose association with the rural nurseries. Agroforestry, understood asany multiple land-use system in which trees are combined with agricuturalcrops and/or animals on the same area of land, either in mixture, orsequence, is essentially a tool to achieve better land use, taking intoaccount land constraints and potential. Given Burundi's critical landshortages which rule out large plantation programs and the close linksbetween forest denudation and soil erosion and decreasing fertility,agroforestry has critical importance in Burundi and in many respects offersthe long-term solution to the forestry dilemma. It also opens the door forsubstantial increases in farm productivity through integrated farmingsystems which intercrop trees with a variety of crops (e.g. fodder trees,shade, fruit production, etc.). However, there has been no systematic workwhatsoever in Burundi on agroforestry to date, so a large program cannot belaunched now without some prior research, experimental work and pilotimplementation programs. It would be an important Project objective tocarry out these activities, thus preparing the way for a largerintervention later on. Five ha of demonstration plots would also beestablished annually close to each nursery. This would support the

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agroforestry program by promoting both commercial wood production byindividual farmers and farmers' groups, improving productivity of treeproduction on farms and broadening forestry by introducing new tree speciesand uses of wood products. The total area covered by these demonstrationplots would amount to 2,000 ha when the Project is completed. The speciesused would depend on farmers' preferences, but it is expected thateucalyptus (of good seed source) would represent at least three-quarters ofthe seedlings, though every effort would be made to respond to farmers'needs avd to supply at least 10% of fruit, shade, fodder and generalprupose trees. Farmers' preferences would be systematically assessed bymeans of surveys.

3.06 Agroforestry research. Although farmers already practise sometraditional forms of agroforestry in Burundi (para 2.06), a well-preparedand proven agroforestry technical package suitable for Burundi'scircumstances needs to be developed. A pilot research component onagroforestry would be initiated in liaison with ISABU. The researchprogram would be carefully monitored and cautiously implemented to takeinto account experience gained. It would rely heavily on theinfrastructure and extension services provided from rural nurseries. Majoractivities would include carrying out surveys to determine farmers' needsand preferences, training extension workers, sonitorinq progress andimplementation of research and trials. Regular assistAnce of individualconsultants and/or institutions with recognized expertise in agroforestrywould be provided, under conditions and terms of reference acceptable tothe Association. Assurances to this effect were obtained during -

negotiations.

3.07 Forestry extension services would be improved by training localforest technicians, nurseryien and nursery -moniteurs-. These forestryworkers would be integrated into the forestry service (they are nowemployed on a temporary ad hoc basis). Since coumunal plantations havegenerally been poorly managed and many communes have no funds to pay forseedlings, these extension workers would not be formally associated withcommune administration and instead the objective would be to develop asmall national forest extension service. Its objective would be to promoteprivate tree plantings and to ensure an effective link between research andfarmer activities. Ultimately however, further improvements would comefrom a better definition of the cooperation to be achieved between forestryand agricultural extension. A project currently under preparation for IDAfinancing proposes to strengthen the overall extension service in Burundi.In this context, the links between forestry and agricultural extension areexpected to be further developped. In particular, the role of the ForestDepartment technicians would be defined more precisely _n relation to thatof the agricultural extension staff.

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3.08 Eucalyptus fuelvood and pole commercial plantations. Theplanting program would contribute to decreasing the substantial firewoodsupply gap mainly for the urban markets (para 2.09). It would expand theplantation program started under the first project, initially by completingplantations at Gakara (an additional 500 ha). Work would begin oninfrastructure at Bukinanyana and Mabanda in Year 1, and planting wouldstart at Bukinanyana (300 ha) and continue at Mabanda (500 ha) in Year 3.The program would be completed with planting at Mabanda at the rate of 800ha per year in Years 4 and 5. The species would be mainly E. grandis atGakara and Bukinanyana, but at Mabanda E. camaldulensis and E. tereticornismight be more appropriate. The average cutting cycle will be eight years.Forestry workers have benefitted from food rations financed by the WorldFood Program (WFP) during Phase I; this contribution represented aboutUS$200,000/year as it was necessary to attract a labor force in thesouthern part of the country. WFP will continue its assistance for thePhase II Project afforestation in remote areas (para 1.16).

3.09 Pine timber plantations. The pine planting program wouldcontribute to supplying the industrial wood users' market (para 2.10) andit would be completed in three years, at the rate of 500 ha a yer in Vyandaand Vugizo (just south of Vyanda). By the end of the Project periodplanted areas would be sufficient to co-er Burundi's projected demand forthese types of wood. The plantation program would involve a directcontinuation of the Phase I program at Vyanda. Blocks of at least 25 ha,but usually 50-100 ha, would be planted. The species would be mostly Pinuspatula, with possibly some of the other upland tropical pines (e.g. P.elliottii and P. kesiya). Some commercial exploitation of plantationsshould begin with thinnings towards the end of the Project implementationperiod. Pruning would be carried out at year 6-7, thinning at years 9-10,12-13 and 15-16, and clearfelling will take place at year 26.

3.10 Existing (Phase I) plantations. The Project would supportmaintenance operations on plantations established under the Phase IProject. These plantations cannot be self-supporting in financial termsuntil well after the Project investment period, since no commercialexploitation will begin for several years. Since these plantations aredesigned to be managed on a commercial basis, specific attention would bepaid to issues of stumpage rates, and arrangements for commercialexploitation of plantations would be reviewed towards the end of theProject period (para 6.06). Apart from fire protection and the maintenanceof roads, tracks and buildings, the silviculturai operations would becarried out in the existing eucalyptus plantat'ons at Mageyo, Ryarusera(Bugarama) and Gakara and pine plantations at Vyanda. The total cost perhectare would be BuF 18,000 (US$150) during the Project period (US$30annually), excluding overheads. Recurrent costs thereafter are estimatedat BuF 5,000 (US$42) per hectare.

3.11 Agro-sylvo pastoral pilot activities. During the implementationof the Phase I Project some opposition was encountered over use of land forplantations from the population living at the major planting sites,

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particularly at Vyanda in Bururi Province (para 1.17). This reflectsBurundi's land scarcity and the fact that the land in question was used forrough grazing. To address this problem and with limited additional staff(para 4.05), the Project would include a small pilot program designed tosupport crop and livestock activities of farmers in plantation zones, bothto alleviate tensions and to ensure balanced, integrated development ofagricultural production in those areas. A program along these lines hasalready been initiated at Vyanda. These activities would complement theagroforestry research program in exploring ways to promote an integratedapproach to tree planting and crop and livestock activities. The programwould help to mitigate the loss of land to forestry and help the populationto maintain, or even improve, the grazing, animal production and cropproduction potentials of the zones concerned. Grazing would be improvedmainly by paddocking, wind belts and contour planting of fodder crops.Animal health would be improved by dipping, vaccination, the provision ofmedicines and stall-feeding (especially for calves). Crop productionmeasures would include improved cultivation methods, seeds, anti-erosionand soil-improvement measures, and manuring. The Project would begin withexpanded efforts at Vyanda, later extending to proposed plantation sites atVugizo and Mabanda, as well as at Gakara (for crops). Specific actionprograms for livestock and crops. Livestock support activities would beginwith farmer surveys, and reinforcement of basic veterinary services. A keyobjective would be selection of dynamic farmers to whom experimentalstalling and forage improvement techniques would be taught. Similar pilotactions would be subsequently implemented at Vugizo in PY4. Pilot sheepgrazing activities would also be organized on established plantations atVyanda and at Mageyo. The crop specialists, working in close cooperationwith the livestock specialists at Vyanda, would try out and implement soilprotection and improved manure production methods, as well as theproduction of improved crop seeds, and train local extensio,n agents. Aspecial unit would be set up to organize these activities on a pilot basis,using the services of existing national staff in the fields of livestockand agriculture and groups of 500 interested participants, with limitedconsultant support to resolve operational problems. The basis of thescheme would be self-help, with Government assistance in staffing andinputs.

3.12 Training. During the Phase I Project, forestry training (whichwas financed by UNDP, para 2.06) concentrated on staff at technicallevels. These needs are now reasonably well provided for. Under theproposed Project, therefore, training programs would concentrate on thelevels identified as most deficient (para 2.02), i.e. the professional(forest engineer) level and the level of 'moniteurs' and extension workers,particularly in agroforestry. Other areas for training could includecharcoal-burning, forest exploitation and wood use. Forestry scholarshipsand consultancies in agroforestry, livestock and agriculture would beprovided. Forest agronomists would be sent abroad for an intensivegraduate forestry course to prepare them to take over from expatriatesilviculturists. It is expected that local training in extension work,charcoal-burning and other activities will be financed under a UNDP/ILOproject which is under preparation.

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3.13 Project and sub-sector management support. The Project wouldsupport a series of measures to reorganize and strengthen the ForestryDepartment. The establishment of two new units would be suported: thefirst, Planning and Monitoring, would have overall responsibility forforestry sector planning, investment, and management of forestry resources,coordination of external assistance and implementation of policy measures.The Unit would monitor and in some instances carry out studies related tothe forestry sub-sector. The second, a management unit, would assumeresponsibility for day-to-day operations managed by the Departmentincluding forestry extension services at provincal and comuunal levels andcollection of fees. Project management units, including the unit whichmanages the IDA-financed Projects, would come under this service. Inaddition, strengthening of the Forestry Department at the regional levelwould be provided as the first two out of four planned inspectorates wouldbe established, one for Bujumbura and one for Bururi. Technical assistanceis being provided to support these units by FAC. Provision would be madefor the completion of the Forestry Department headquarters and fordevelopment of facilities for the new regional inspectorates at Bujumburaand Bururi.

3.14 Technical assistance. Because of the virtually complete absenceof trained national forestry graduates, technical assistance would beessential throughout the Project period, to manage the Project and trainBurundi nationals to man the key positions in the forestry depeartment andmanage development efforts. The expatriate management team now in Burundi,which consists of the project director, a forester and three volunteersfrom France would be enlarged by the addition of another forester and arural forestry specialist who would be responsible for the expanded ruralnurseries and agroforestry component. The three volunteers working in therural nurseries and agroforestry component would be maintained. It isexpected that technical assistants would be phased out toward the end ofthe proposed Project period as qualified and fully-trained national staffbecome available. However, provisions have been made in the Project costsfor the financing of these expatriates throughout the Projectimplementation period.

3.15 Studies and trials. Various studies and trials would beundertaken as part of the Project. The most important would address thekey problems of agroforestry and improved charcoal making; others would bedesigned to address specific operational problems and explore new ideas.Studies to support the pilot activities designed to enhance integration offorestry and crop/livestock activities are also included. Under theagroforestry research component existing farming systems, including treecompetition with crops, would be closely studied and ways to improve itwould be proposed; trials with new multi-purpose trees would be conducted,including fodder trees and beekeeping. Trials of more efficientcharcoal-making by means of improved kilns (e.g. the 'Casamance kiln) andmethods would be continued and expanded. The surveys initiated during thePhase I Project for improving livestock in project areas would be continued

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and extended to new areas. Studies on wood pricing and future energy needswould also be carried out by the Project staff with consultant support. Inaddition the Project would include provision for monitoring and evaluationstudies, and the preparation of future investments in the forestrysub-sector. Terms of reference for the proposed studies would be draftedunder the overall responsibility of the General Directorate of AgriculturalPlanning in the Ministry of Agriculture. Along with related costestimates, they would be submitted for IDA approval.

D. Project Costs

3.16 Total Project costs are estimated at about BuF 2,041.3 (US$17.0million) of which 43Z or US$ 7.3 million represent foreign exchange costs.Details are summarized in the following table.

PROJECT COST SUMMARY

X % of Total-B F dlion- ----I $ millJon-- Fore4n Bae Costs

Iocal Foreign Total local Foreign Total Exhange

A. Narsery/agroforestrypilot activities 249.0 25.2 274.2 2.1 0.2 2.3 10 18

B. Ccwmercial pLatat. 422.6 156.6 579.2 3.5 1.3 4.8 27 37C. Maintenance of

eKdstixg plantatit 18.0 35.0 53.0 0.2 0.3 0.5 66 3D. Agroforestry

pilot research - 29.3 29.3 - 0.2 0.2 100 2E. Support activities

(livestock, 47.8 66.7 114.5 0.4 0.6 1.0 58 7agriculture) 27.4 27.3 54.7 0.2 0.3 0.5 90 3

F. Institutionalstrerthecrg anproject adminis. 74.7 365.4 440.2 0.6 2.9 3.5 81 28

G. Scholarships andspeaLlized traxiirg - 20.0 20.0 - 0.2 0.2 100 2

Total Baseline Costs 839.5 725.5 1,565.1 7.0 6.0 13.0 46 100

Physical. Oxtirgexies 82.6 48.1 130.7 0.7 0.4 1.1 37 8Price ConciencLes 239.9 105.6 345.5 2.0 0.9 2.9 31 22

Total Project Costs 1,162.0 879.2 2,041.3 9.7 7.3 17.0 43 130_ = _ _

3.17 Project costs were estimated as of mid-1985. A physicalcontingency of 10% was applied to the base cost estimates, technicalassistance and consultants costs excepted, to reflect general uncertaintieson quantities to be purchased under the Project. Price contingencies forthe Project costs presented in BuF are based on domestic inflation

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estimated as follows: 18% in 1985, 12% in 1986, and 10% from 1987 onwards;price contingencies for the Project costs expressed in US dollars arebased on an international inflation rate as follows: 52 in 1985, 7.5% in1986, and 8% ill 1987, 1988 and 1989; the price contingencies were presentedon the basis of the BuF exchange rate being adjusted to compensate for thedifference between domestic and international inflation. Taxes included inthe Project costs are negligible since virtually all items would be exemptfrom import duties. In total, 20 man/years would be required for technicalassistance, as well as 50 months of consultancies, in addition about 15man/years would be required for assistance from the volunteers("volontaires du progras"). The phasing and details of Project costs areshown in Table 1.

E. Financing

3.18 The financing of Project costs would be as follows:

BuF US$ X(million (million)

Government of Burundi 195.8 1.6 10IDA 1,536.0 12.8 75FAC 309.5 2.6 15

Total 2,041.3 17.0 100

FAC has agreed to continue financing technical assistance for the Project.It is also expected that the World Food Program (WFP) would finance foodrations to be distributed to Project workers in remote areas (para 1.16).Such a contribution would probably represent an equivalent of US$250,000per year. This amount is not included in the Project financing plan.Formal arrangements between WFP and the Government have been worked out; aWFP appraisal mission visited Burundi in September-October 1984 and theircontinued involvement is now secured.

3.19 The IDA credit of US$12.8 million would be extended to theGovernment on standard IDA terms and conditions. The credit would cover75% of Project costs (excluding taxes and duties), including 100% offoreign exchange costs exclusive of technical assistance (equivalent toUS$7.3 million). FAC's contribution would represent an estimated 15% ofthe total Project costs. FAC would cooperate fully with IDA on all aspectsof Project administration; cofinancing arrangements would be virtually thesame as under the first project and these have worked very smoothly.Effectiveness of the FAC grant would be a condition of effectiveness of theCredit. Proceeds of the credit would be passed on to the Ministry ofAgriculture and Livestock on a grant basis. A Project revolving fundmanaged by the Project Director would be maintained to ensure that adequatefunds are available for efficient Project administration. Replenishment ofthe fund with Government counterpart contribution would be made on aquarterly basis. Assurances regarding maintenance of this fund and

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specific arrangements for payment of Government's contribution to Projectcosts were obtained at negotiations.

F. Procurement

3.20 Contracts for the supply of materials and equipment exceeding US$80,000, which would total US$0.9 million, would be awarded afterinternational competitive bidding (ICB) in accordance with Bank/IDAguidelines. Contracts would be bulked to the extent possible. Theexisting Project management unit has well qualified staff and has theexperience and capability to monitor local contracting adequately.Contracts for materials and equipment costing less than US$80,000 totallingUS$3.1 million, would be awarded following standard Government procedures(which are acceptable to IDA) provided price quotations are obtained fromat least three suppliers. Civil works (US$1 million) would be too small toattract the interest of international firms and are expected to be awardedlargely to local contractors following local procedures which ensureadequate competition.

3.21 Procurement arrangements are summarized in the table below.

(US$ million)

Project Element Procurement method Total costICB LCB OTHER NA

Vehicles, Equipment, 0.9 3.1 4.0& Materials (0.9) (3.1) (4.0)

Civil Works 1.0 1.0(0.9) (0.9)

Plantation establishment 5.7 5.7(5.5) (5.5)

Services 0.3 a/ 3.2 b/ 3.5(0.3) (0.6) (0.9)

Operating Costs, 2.8 2.8Project Administration (1.5) (1.5)and Revolving Fund

Total 1.2 4.1 3.2 8.5 17.0(1.2) (4.0) (0.6) (7.0) (12.8)

Note: Figures in parenthesis are the respective amounts financed by the IDACredit

a/ Consultants for livestock and agriculture support activities andaudit

b/ Including about US$2.6 million to be financed by FAC

Assurances on these arrangements were obtained at negotiations.

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G. Disbursement

3.22 Funds from the credit would be disbursed over six and half yearson the following basis:

US $ million

(a) 100% of foreign expenditures or 95Zof local expenditures for ex-factory 3.6price for vehicles, equipment andmaterials; and 85% of local expendituresfor other goods purchased locally;

(b) 90Z of total expenditures for civilworks, and direct costs of plantation 0.8development;

(c) i.100Z of labor costs of plantationestablishment; 3.4

ii.100% of labor cost for maintenance ofnew plantations up to $200,000 disbursement;then 60% until $350,000 total disbursement;and then 30% thereafter, 0.5

Cd) 100% of foreign expenditures forconsultants, surveys, training, 0.8audit, monitoring and evaluation;

Ce) 40% of total expenditures for operating 1.3costs of Project administration;

Cf) unallocated. 2.4

12.8

The Forest Department would claim reimbursement on the basis of Statementsof Expenditures (SOEs) for:

(i) civil works contracts costing less than US$50,000 equivalent;(ii) vehicles, equipment, goods, services and operating costs for

single items or contracts costing less than US$15,000equivalent; and

(iii) consulting services contracts costing less than US$50,000equivalent.

Withdrawals for local expenditures above these limits and for expenditur^sin foreign currency in excess of US$5,000 equivalent would be fullydocumented (invoices, evidence of payment, etc.). The suitable format forthis was agreed upon at negotiations and will be finalized in thedisbursement letter. The Forestry Department will maintain all therelevant supporting documents for reimbursement claims under SOE forinspection by supervision missions. During the course of the annual auditof the Project's accounts, the auditor will be requested to certify thatall expenditures claimed under SOEs during the year have been properly

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incurred for the Project. Assurances on these procedures were obtained atnegotiations. An estimated schedule of disbursement is given in Schedule2. A disbursement period of six and one-half years has been utilized eventhough projects in Burundi have averaged over seven years. This shorterdisbursement period is considered more realistic because:

(i) disbursement performance under the Forestry I Project hasbeen good; and

(ii) most Project disbursements would consist of labor, services,vehicles and small equipment which are less susceptible thanother types of expenditures to delays.

3.23 Special Account. Implementation experience under the firstForestry Project has highlighted the Government's difficulty inpre-financing expenditures to be reimbursed under the IDA Credit. Arevolving fund of US$0.3 million, financed under the Project, would beestablished in an account to be opened in a commercial bank for the purposeand operated under terms and conditions acceptable to IDA. A revolvingfund was established during the latter years of implementation of the firstproject, and it generally worked well. The Special Account would bereplenished by IDA upon receipt of documentary evidence to be provided byProject management. Should any disbursements be made from the SpecialAccount which are not acceptable to IDA, the Government would deposit thecorresponding amount into the Special Account. Agreements on terms andconditions for using the Special Account were reached at negotiations.

H. Accounts and Audit

3.24 The Project management unit would maintain accounts adequate toexplain all Project activities and would improve its existing simple costaccounting problem in order to monitor better the increasingly complexProject activities. Experience with the first Forestry Project indicatesthat although the Project Management unit was able to account fully forProject expenditures, the system established must be beefed up in order tobecome a useful management system and more than a good recording system.In particular, accounting procedures would ensure clear differentiationbetween commercial and non-commercial activities carried out under theProject.

3.25 Project accounts would be audited by independent auditorsacceptable to IDA. The auditors would specifically review and comment onthe procedures used for disbursement against statement of expenditures(para 3.22), and they would make proposals for improving Project managementand accounting systems (para 4.11). The audited accounts would besubmitted to IDA within six months of the close of each fiscal year.Assuranzes on these conditions were obtained at negotiations.

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I. Environmental Impact

3.26 The rapid deforestation of Burundi poses a grave threat to theecological stability of the Zaire/Nile crest zone, and of the entirecountry. Not only does soil erosion increase with the cutting down oftrees, but soil fertility decreases as agricultural residues are used forfuel instead of being returned to the land. The main impact of theproposed Project would be to assist the Government's efforts to controlthis process of degradation by establishing long-term policies andpractices to protect Burundi's forest resources and by providing additionalsources of firewood (para 2.17). This should reduce the illegaldestruction of forests and, in conjunction with other projects andprograms, provide sufficient fuel so that the rural population reduces itsreliance on agricultural residues for fuel. The pine plantation would havea generally beneficial impact in the Vyanda-Vugizo area, reducing soilerosion which is becoming a problem in that region. The livestock-agricultural component would involve steps to maintain and increase soilfertility on grazing and agricultural lands adjoining large projectplanting areas. The promotion of agroforestry through the rural nurseriesall over the country would help the population to optimize their treeplanting, choice of trees and planting methods, in order to meet their ownneeds for wood, fodder, fruit, shade and soil improvement. In the longerterm this offers the most fruitful avenue for redressing the shortage oftrees as many more trees would thus be planted, and larger areas coveredthan under a more narrowly focused plantation program.

IV. PROJECT IMPLEMENTATION

A. Organization

4.01 The Forestry Department ("Eaux et Forats") of the Ministry ofAgriculture and Livestock would have principal responsibility forimplementation of the Project; management arrangements would be similar inmost respects to those which were established and worked smoothly under thefirst Project. A strengthened Project Management Unit within theDepartment would continue to be directly responsible for the developmentand operation of rural nurseries and the eucalyptus and pine plantations;it would also have specific responsibility for ensuring effectivecoordination of all Project forest and agro-forestry applied researchactivities with ISABU, and Project agriculture/livestock activities withthe relevant services in the Departments of Agriculture and Livestock.Each plantation and each support activity would be managed as a separateunit. These units would prepare their individual work plan, budget andprogress reports which would then be aggregated by the Project Managementunit. Overall monitoring and evaluation of work would be theresponsibility of the Director General of Agriculture, who would delegateresponsibility to the Director of Forestry for day-to-day operations.

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B. Management of Project Components

4.02 Rural nurseries and agroforestry: This component would bemanaged by an internationally recruited rural forestry specialist assistedby a Burundian Forest Agronomtst (at least Al) as deputy, 3 expatriateVolontaires du progras " and 3 Assistant Foresters (at least A2) -one for25-30 nurseries, as well as a small.support staff at Project headquarters.For each nursery there would be a permanent nurseryman and a"moniteur-vulgarisateur' (to be trained), who would be responsible forextension work, including agroforestry, as well as the planting andmaintenance of the demonstration plants (5 ha per year close to eachnursery), and a variable number of casual laborers. Before new nurseriesare established the Project Unit would carry out a review of the commune todetermine the optimal location of each nursery and the prospective areasearmarked for demonstration plots; the needs and preferences of the localpopulation for tree seedlings of all kinds would also be reviewed and takeninto account before establishing these nurseries (para 3.05). Assurancesto this effect were obtained at negotiations. The extension staff wouldreceive special training centrally and on the job in agroforestry. Theirwork would involve mainly advice, training and follow-up to institutionsand farmers on appropriate tree-planting practices, including planting,care and management of tree crops for wood, fodder, fruit, bee-keeping,shade, amenity and soil protection and improvement.

4.03 Organization of eucalyptus plantations: The Phase I and Phase IIeucalyptus plantations component would be managed by an expatriate Forester(Silviculturist), assisted by a national Forest Agronomist (at least Al) asdeputy, four Assistant Foresters (at least A2) - one for the North(Bukinanyana, Mageyo and Ryarusera), cne for Gakara and two for Mabanda;a secretary-typist, 6-8 "monitors", one mechanic, two assistant mechanics,5 drivers, two storekeepers, two nurserymen, 3 messengers, a variablenumber of artisans, about 1,000 regular laborers and a large, but variable,number of casual laborers. A small office/storeroom would be built atBukinanyana. At Mabanca an office, storeroom, and workshop would be built,as well as a guest-house and housing for all the Project's techniciansexcluding laborers. The expatriate forester (housed) and his deputy wouldlive in Bujumbura and their office would be at Project headquarters. Anursery would be created at Bukinanyana and at least one or two nurserieswould be required at Mabanda. No additional infrastructure is required atGakara. These management arrangements would be suitable for plantationdevelopment, protection, maintenance and exploitation. Exploitation of theoldest Phase I plantations will start towards the end of Project period,first at Mageyo, then at Gakara. A schedule for starting exploitation anda plan to establish appropriate commercial arrangements for management andutilization once this stage is reached would be prepared by the ForestryDepartment for approval by IDA, in advance of the expected start-up ofexploitation (i.e. mid-1988). Assurances to this effect were be obtainedat negotiations.

4.04 The pine headquarters would remain at Vyanda, but a newoffice-storeroom and housing for an Assistant Forester and two -moniteurs"would be built at Vugizo. Because of the large areas involved (including

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more than 4,000 ha of Phase I plantations) and the demands of silviculturaltreatment (mainly pruning) of the earlier plantations, the pine componentwould be managed by an expatriate Forester. He would be assisted by anational Forest Agronomist (at least Al) as deputy, 3 Assistant Foresters,6 "moniteurs", a secretary-typist, (2 messengers, a mechanic, an assistantmechanic, 4 drivers, 2 nurserymen (for 3 years only), 2 messengers, about500 regular laborers, plus a large but variable number of casual laborers.All the staff, excluding the laborers, would continue to be housed. Newnurseries would be created, as required, as Vyanda and Vugizo. As in thecase of the eucalyptus plantations, the management arrangements would besuitable for plantation development, protection, maintenance andexploitation. The first commercial exploitation would not take place untilafter the Project period. The Government has taken all necessary legalarrangements to ensure land availability for planting and has provided theexact location of all planting sites.

4.05 Support gilot activities: This component would be managed by aunit headed by a livestock specialist (AO) specialised in extension,assisted by two technicians (Al), one agronomiet and one livestockspecialist. The unit would report to the Project manager, and wouldmaintain close technical liaison with the Directorates of Agriculture, andof Livestock. Initially the unit would be based at Vyanda, where the firstpilot actions would be implemented. The technicians would be located atVyanda during the first three project years, and they would subsequently betransferred to Gakara and Mabanda. The unit would rely on the services ofexisting national staff in the fields of livestock and agriculture andgroups of interested farmers, as well as consultants.

4.06 Training activities: Training activities supported under theProject would be concentrated in the following areas:

(i) specialized training of agronomy graduates in forestryabroad;

(ii) short term training of foresters and extension workers inagroforestry;

(iii) on-site training of agronomists, livestock specialists,agro-foresters, and charcoal makers by consultants;

(iv) on-site training of foresters at all levels by the expatriateforestry specialists

Training abroad would be carried out in accordance with specific trainingprograms which have been defined in broad terms. At appraisal severaltraining possibilities were reviewed. It was agreed with the Burundiauthorities that the Montpellier University, France, would provide the mostappropriate training for the agronomists to be specialized in forestry.

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Short-term training and refresher courses in forestry and agroforestrywould be organized at ITAB and other suitable establishments in Burundi andabroad. On-site training of specialists and technicians would be carriedout by the expatriate team through increased responsibility in technicalfields and management in close collaboration with the expatriate team.Specific training programs would be agreed upon in the context of theannual work plan (para 4.07) which would include a section on training.The annual plan would also include specific plans for phasing outexpatriate services and transferring responsibility to Burundi staff; aschedule would be reviewed each year. Assurances on these arrangementswere obtained at negotiations.

C. Annual Work Plans

4.07 Implementation of all Project activities would be carried out onthe basis of annual plans and budgets approved by the Director ofAgriculture and by IDA. These would be prepared by the officer in chargeof each project component and aggregated by the Project Manager. Plans andbudgets for the agro-forestry applied research component would also bediscussed with and approved by ISABU's Director General. Past experiencewith the first Forestry Project indicates that the Project management unitprepared adequate and timely annual work plans, and they served as a usefulmanagement tool. The Project annual plan and budget would detail Projectobjectives and targets for the year in question, specific activities to becarried out, and the human and financial resources, including consultantand training needs, for carrying on the proposed work program. They wouldinclude the following: (a) a brief evaluation of the previous year'sperformance as compared to objectives and a discussion of how resultsobtained are related to the new program; (b) detailed investment andoperating budgets; (c) a description of the program of activities,including quantified implementation objectives, output, performance, andproject impact indicators, where appropriate; (d) staffing and trainingplans with a statement of specific objectives; (e) a financing plan; and(f) a procurement plan. Expected proceeds from wood sales from commercialplantations would also be included in the work plan as appropriate.Assuraunces on these arrangements, including timing of preparation andapproval (para 4.08) and the outline of the annual plan (Annex 6), wereobtained at negotiations.

4.08 To ensure that the Project's budgetary requirements areadequately taken into account in the Government's annual budgetaryallocation cycle, preparation of the annual work plan and budget would becompleted for submission to IDA by September 30 of the year preceding thefiscal year in question. This would give adequate time for processing thebudget request through the Ministry of Agriculture's Budget and FinanceDepartment and including it in the draft ministerial budget submitted bythe Ministry of Agriculture to the Ministry of Finance; this would alsopermit Project management to modify and refine proposals before the startof the fiscal year in January should the final budgetary allocations differfrom budgetary estimates.

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D. Staffing

4.09 Local staff. The implementation of the proposed Project wouldrequire three forest agronomists (Al), one per component (rural nurseriesand agroforestry; eucalyptus, and pine plantations), 10 assistant foresters(A2), three for rural nurseries, four for eucalyptus plantation, and threefor the pine plantation, one permanent nurseryman and one moniteur-vulgarisateur per nursery, as well as 12 to 14 moniteurs (6 to 8 foreucalyptus plantations; 6 for pine plantations), 4 nursery men for theplantations (two for eucalyptus, two for pine and 23 support staffincluding four assistant mechanics, nine drivers, two secretary-typists,five messengers, two storekeepers. A training specialist (AO) graduatedfrom the Institut Superieur de Developpement Rural would head theLivestock-Agriculture unit; he would be assisted by one livestockspecialist (Al) and one agronomist (Al). The implementation of thelivestock activities would require three livestock technicians, threeassistant-veterinarians, and 12 support staff, including fiveinvestigators. The implementation of the agricultural activities wouldrequire one technician ("chef de culture") and four support staff for eachp.oduction and demonstration center, and five teams composed of one teamleader and six workers each. One of the forest agronomists would be deputytechnical director of the Project. In addition, a financial expert withmanagerial experience would be responsible for administrative and financialmanagement of the Project in order to enable the project director to devotesufficient time to monitoring of field operations. This expert would alsobe involved in preparing tLe phase of exploitation/utilization of theplantations, for which he would receive short-term consultancy assistanceto be partly provided by FAC (para 6.02). Appointment of the three ForestAgronomists (Al) and the training specialist would be a condition ofdisbursement for the relevant Project components (rorest-y, agroforestryand training).

4.10 Technical assistance. Four expatriates would be required forimplementation of the proposed afforestation program: one silviculturistwould be the Project manager; one silviculturist would r .nage Phase I andPhase II eucalyptus plantations, and another one the pine piantations; arural forestry specialist, assisted by three volunteers "'voloncaires duprogras") would manage the rural nurseries and agro-forestry components.The costs of these technical assistants are expected to be financed by FAC(para 3.18) and it is anticipated that CFTF would continue to provideservices as they have under the forest project. Short-term consultantswould also be utilized (including 10 months each for livestock andagriculture activities and 15 months for agro-forestry). IDA would beconsulted on the choice of the consultants by FAC and the BurundiGovernment. Appointment of those specialists would be a condition ofCredit effectiveness. Assurances to this effect were obtained atnegotiations.

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E. Implementation and Monitoring

4.11 The Project would be implemented over a five-year period,beginning in July 1985. Schedule 2 provides a tentative implementationschedule. Explicit monitoring and evaluation arrangements have been workedout for all Project activities (paras 3.13 and 4.07), and annual progressreports would be required for the various project activities. The Phase IProject management unit has set up a simple and efficient monitoring systemwhich has provided useful information on Project key indicators. Becauseof the increased complexity of the proposed Project, a more elaboratemonitering system would be established with the assistance of externalauditors during the first year of the Project (para 3.25). The ForestyDepartment would also prepare a completion report summarizing Projectperformance and evaluating its impact. The report would be submitted tothe Bank not later than six months after the closing date. Assurances tothis effect were obtained at negotiations. It bears note that the ForestryDepartment plans to prepare a completion report on the First Project byMarch 1986 (six months after the planned closing date).

V. Technical and Production Aspects

A. Technical Aspects

5.01 For the main Project plantations, the following criteria havebeen used in the identification of planting sites: (a) the land should beconsidered unsuitable for agriculture because of soil or slope; (b) theland should be suitable for tree planting; (c) an aggregate of at least 50Cha should be identified in blocks of not less than 25 ha within a radius ofapproximately 5 km; and (d), for logistic reasons (proximity to markets),the sites should be located in the western part of the country. All theareas proposed in the preparation report were carefully examined, and only5,000 ha were identified as meeting the above criteria. The followingareas were thus agreed upon:

Estimated Net AreaProvince Locality (Ha)

Cibitoke Bukinanyana 500Bujumbura Gakara 500Makamba Mabanda 2,500

Total Eucalyptus 3,500

Bururi Vyanda 1,000Makamba Vwigizo 500

Total Pine 1,500

Total commercial plantations 5,000

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In addition to these 5,000 ha, it was agreed that near each of the 90 ruralnurseries (60 existing ones and 30 to be established under the project), 5ha of demonstration plots would be planted annually. Some 2,000 ha ofscattered woodlots would thus be planted nationwide during the Projectperiod. The grand total area of plantations would therefore be 7,000 ha.

5.02 Topography and soils. All the proposed planting sites (excludingthe demonstration plantations) would be situated in the Mumirwa naturalregion or its southern extension, west of or on the Zaire-Nile divide,mostly on hill tops or steep slopes and relatively poor soils, used forrough grazing. The altitude would be mostly between 1,500 and 2,000 m.Though most of the areas chosen have no agricultural potential, the soilsare generally adequate for tree-growing. Extremely poor, rocky or steepsites would be left unplanted as it is not intended to create essentiallyprotection plantations under the Project.

5.03 Climate and rainfall. The average annual rainfall throughout theProject area generally exceeds 1,400 um, except at Mabanda where it may godown to 1,200 -; nowhere does it normally exceed 2,000 mm. Meantemperatures vary from 150 to 250C, with extremes of 100 to 300C. Hailoccurs occasionally. Mist is frequent, particularly at higherelevations. The main rainy season is from September to May, with the peakin March-April. June to August are the dry months. There are usually someshort rains during the dry season and a short dry season in January-February. The main tree planting seasons will be November-December andMarch-April, though there will be regional and annual variations. It isexpected that more or less prolonged droughts will occasionally occur atMabanda, which would cause a fire hazard. Termites may also be troublesomeat Mabanda .

5.04 Population and land use. All the land in the proposed largeplanting sites is currently unutilized for agriculture, though it may beused by the local population for rough grazing. All land already undercrops or even potentially suitable for crops in the designated areas wouldbe left unplanted. It is not intended to dispossess anyone arbitrarily orto deprive the local population of potential agricultural land. Populationis relatively sparse (well below 50/ku2) in nearly all the designatedareas, though there may be more densely populated pockets nearby,particularly around Bukinanyana. The designation of all the planting siteshas been completed (paras 4.03 and 4.04). By law, unutilized land belongsto the Government and, in practice, all claims, real or imaginary,involving agricultural land are carefully examined and arbitrary action isnot allowed. Grazing claims, however, are more difficult to deal with, andduring Phase I the local population at Vyanda (Bururi) has understandablyprotested at the loss of grazing land, though the Project unit has alwaysconsulted the representatives of the local population before planting anynew block of forest and has ensured that the total area planted anywheredoes not exceed 25% of the gross area. Every effort is being made to keep

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the goodwill of the local population, and under the Project it is proposedto provide assistance to grazing, livestock and agriculture in order toensure that production and income do not decrease, or may even possiblyimprove, despite the loss of grazing land to forestry. A small-scale pilotaction has already started at Vyanda, and it is proposed to extend itgradually during the Project to other large plantation areas on a modularpilot basis (para 4.05).

B. Production Aspects

5.05 Rural nurseries and agroforestry. Each of the rural nurserieswould produce at least 40-50,000 seedlings per year (para 3.04). At leastfor Eucalyptus the earthball technique would gradually replace the use ofpolythene tubes, thus reducing cost and transport problems. Trials wouldalso be made with the sale of small packets of seed with instructions inKirundi and French. The main species would probably be Eucalyptus grandisabove 1,200 m and E. tereti-cornis below 1,200 m. The Project would alsosupport plantations of demonstration eucalyptus plots annually close toeach rural nursery (para 3.05). The techniques would generally be the sameas those used in large-scale eucalyptus plantations, though variousspacings (from 2 m x 2 m to 2.5 a x 2.5 m) and eucalyptus species would betried.

Program of Rural Nurseries

Year 1 2 3 4 5 Total

No. of nurseries 70 75 80 85 00 -

No. of seedlingsproduced (million) 3.0 3.25 3.5 3.75 4.0 17.5

Area planted (ha):(2000 plants/ha)

(a) demonstrationplots 350 375 400 425 450 2,000

(b) private plots(estimated area) 1,150 1.250 1,350 1,450 1,550 6,750

Total area planted 1,500 1,625 1,750 1,875 2,000 8,750

The average overhead cost per seedling produced is estimated at BuF 2.4(US$.01) at 1984 prices. The average direct cost per seedling produced isestimated at BuF 8.8 (US$0.073) at 1984 prices, but more than half thatcost covers extension services for agroforestry and the supervision of theplanting and maintenance of 2,000 ha of demonstration plots; the strict

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production cost of seedlings in rural nurseries, including overhead butexcluding extension services and maintenance of demonstration plots, isestimated at BuF 7.0 (US$0.058) per seedling at 1984 prices.

5.06 Eucalyptus fuelvood and pole commercial -plantations.(a) Afforestation. The planting program would be at Gakara (500 ha),Bukinanyana (500 ha) and Mabaida (2,500 ha). At Gakara the plantationswould be situated on a series of small hills covered with secondaryheathland which were probably under forest until fairly recently. Thesoils are therefore generally adequate to good and mean annual increments(HAI) of 10-15 m3 /ha may be expected. The plantations at Bukinanyana wouldbe situated on poor, bare eroded hill-tops end fairly steep slopes, inseveral blocks of at least 25 ha each (not yet exactly identified anddemarcated). Very rocky areas or patches would be left unplanted. Thesoils are generally adequate for tree-growth and reasonable yields (averageMAI's of 10-12 m3 /ha) may be expected. The sites at Mabanda are generallyflatter, with a large plateau and some hill-tops and slopes, consistingmostly of rough grazing. Termites might normally be a problem over part ofthe area. The soils are probably poor, and MAI's should not exceed 10m3 /ha. However, with complete or strip ploughing or hoeing andfertilization higher growth rates should be achieved. The species wouldprobably be mainly E. grandis at Gakara and Bukinanyena, but at M-abandaE.camaldulensis and E.tereti-cornis might be more appropriate. The spacingwould be 2 m 50 x 2 ii 50, equivalent to 1,600 trees per hectare.

Planting Proram - EucalyptusArea (ha)

Year 1 2 3 4 5 Total

Gakara 500 - - - - 500Bukinanyana - 200 300 - - 500Mabanda - 400 500 800 800 2,500

Total 500 600 800 800 800 3,500

No. of Plants Required (Million) 1/

Gakara 1.0 - - - - 1.0Bukinanyana - 0.4 0.6 - - 1.0Mabanda 0.8 1.0 1.6 1.6 5.0

Total 1.0 1.2 1.6 1.6 1.6 7.0

11 allowing 2,000 per ha, including replacements and losses.

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The eucalyptus plantations personnel listed in para 4.03 would cost BuF19.4 million altogether. They would be employed both on new (Phase II)plantations and on the maintenance of Phase I plantations. In nurseries,about half the seedlings would be produced in small black polythene tubesand half in earth-balls. Direct sowing in tubes would be tried. AtMabanda some nursery treatment might be necessary against termites, usingrepeated spraying with an acceptable termicide. The average directproduction cost per seedling is BuF 4, of which 3/4 is for labor and 1/4for seed, materials and equipment. For transport of plants and materials 2trucks, 3 tractors and 9 trailers would be required, in addition to thevehicles and equipment already existing at Gakara. Soil preparation wouldbe manual (pitting), except over half of Mabanda where it would besemi-mechanical. The equipment required for ploughing would be onetrack-type tractor and two disc ploughs. The planting operationsinclude pegging, pitting, fertilization, filling of holes, planting andreplacing failures. The total average cost of soil preparation andplanting would be BuF 3 2,000/ha, about 52% for labor, 22% for fertilizer,21% for equipment and 5% for running costs and tools. On average, therewould be one weeding operation in the first plantation year and two weedingoperations in Years 2 and 3, at 40 md/ha per operation (+5% for tools).

(b) Indirect afforestation activities. The average new road workdensity would be one km per 100 ha of plantations for roads and 3 km per100 ha for tracks. The work would be done manually, except at Mabandawhere use could be made of the existing bulldozer from Vyanda. The averagecost per km would be BuF 1.5 million for roads and BuF 240,000 for tracks,about 3/4 for labor and 1/4 for materials and running costs. Annualmaintenance costs per km would be BuP 200,000 for roads and BuF 16,000 fortracks. Firebreaks 10 m wide would be laid and opened manually at anaverage density of 1 km per 20 ia at an average cost per km of BuF 20,000for labor and BuP 2,000 for tools. Annual firebreak maintenance costs perkm would be BuF 3,000 for labor and BuF 300 for tools. Additional costswould include new housing, particularly at Mabanda, other buildings(offices, store-rooms, workshops) and equipment (water pump, piped watersystem, electric power) at Mabanda, altogether BuF 36.6 million, includingrunning costs and equipment maintenance.

(c) Cutting cycle and yields. It is assumed that the average cuttingcycle will be 8 years, with one seedling and three coppice rotations. Itis also assumed that overall about a third of the Project eucalyptusplantations would produce high yields (mean annual increments or MAI of 15m3/ha or more), a third would produce an MAI of 12 m3/ha and a third an KAIof 10 m3/ha or less. On the average therefore the MAI would probably beabout 12 m3/ha during the first two rotations and 10 u3 /ha thereafter.

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Yields (m3lha)

Year good average poorHAI Total Vol. MAI Total Vol. MAI Total Vol.

8-seedling 15 120 1A 96 10 8016-coppice 1 15 120 12 96 10 8024-coppice 2 12 96 10 80 8 6432-coppice 3 12 96 10 80 8 64

It is assumed that 25% of the volume will be sold as poles and 75% asfuelwood for charcoal production.

5.07 Pine timber plantations(a) Afforestation. The Pine planting program would be completed in 3years, at the rate of 500 ha a year. They would be situated at an averageelevation of 2,000 m, on bare, grassy hills used so far for extensivegrazing. The average rainfall exceeds 1,500 mm and mean temperatures varyfrom 100 to 250C. Hail occurs infrequently. Blocks of at least 25 ha, butusually 50-100 ha, would be planted. Very rocky or poor sites andextremely steep slopes would be left unplanted. The soils are notparticularly good, but provided the worst sites are avoided an average MAIof at least 10 m3/ha may be expected, rising to 12 m3/ha or more on bettersites. The species would be mostly Pinus patula, with possibly some of theother upland tropical pines (e.g. P.elliottii and P.kesiya). It isimportant to use good quality imported seed of the right provenances. Thespacing would continue to be 3 m x 3 m (or about 1,100 trees per hectare).

Pine Planting Program

Year 1 2 3 4 5 Total

Vyanda 500 500 - - - 1,000Vugizo - - 500 _ - 500

1,500No. of Plants Required (Million)l/

Vyanda 0.7 0.7 - - 1.4Vugizo - - 0.7 - 0.7

Total 0.7 0.7 0.7 - - 2.1

1/ allowing 1,400 per ha, including replacements and losses.

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The pine plantations pergonnel listed in para 4.04 would cost BuF 15million altogether. They would be employed on both new (Phase II)plantations, but also on the maintenance of Phase I plantatioas. Innurseries about half the seedlings would be produced in small blackpolythene tubes and half in earth balls. Direct sowing in tubes would betried. In new nurseries (e.g at Vugizo) mycorrhizal inoculation would benecessary. The planting operations would include pegging, pitting,fertilization, filling of holes, planting and replacing failures. Thetotal average cost of soil preparation and planting would be BuF 12,000/hafor labor and BuF 600/ha for tools. On average, there would be one weedingduring the first plantation year, two weedings the second year and 1-2weedings the third year, at 20 md/ha (+5 for tools) per operation.

(b) Indirect afforestation activities. The average new road workdensity would be one km per 100 ha of plantations for roads and 3 km per100 ha for tracks. The work would be done mainly by bulldozer (frov PhaseI) at an average cost per km of BuF 1.5 million for roads and BuF 240,000for tracks, about 3/4 for labor and 1/4 for materials and running costs.Annual maintenance costs per km would be BuF 200,000 for roads and BuF16,000 for tracks. Firebreaks 10 m wide would be laid and opened manuallyat an average density of 1-km per 20 ha, at an average cost per km of BuF20,000 for labor and BuF 2,000 for tools. Annual firebreak maintenancecosts per km would be BuF 3,000 for labor and BuF 300 for tools. Buildingcosts would include some additional housing and an office-store room atVugizo (BuF 3.7 million), but nothing new at Vyanda.

(c) Silvicultural treatment and yield. The primary objective of thePine plantations is the production of timber, and the rotation age andsilvicultural treatment will be related to that objective. It is assumedthat the average mean annual increment (MAI) will be 12 m3/ha, with thebest stands producing an MAI of 15 m3/ha or more and the poorest standsproducing an MAI of 10 m3/ha or less. During Phase II very poor, rocky andunproductive areas would be avoided as far as possible.

Proposed Treatment and Expected Yields

Age Silvicultural Yield (m3/ha)(Years) Treatment Smallwood Sawlogs Total

6-7 Pruning I (all stems,900 sph, 1/ to 2 m 50)

9-10 Thinning I (from 900 to600 sph) 30 - 30Pruning II (500 sph, to4 m 50)

12-13 Thinning II (from 600 to400 sph) 30 30 60Pruning II (300 sph, to 6 m 50)

15-16 Thinning III (400 to 250 sph) 30 30 60

25 Clearfelling 30 120 150

120 180 3001/ sph = stems per hectare

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5.08 Existing (Phase I) plantations. (a) General. The Phase Ieucalyptus plantations, including those proposed for 1984-85, would totalapproximately 2,050 ha, of which 380 ha at Mageyo, 1,520 ha at Gakara and150 ha at Ryarusera. It is estimated that some 950 ha (46Z) are good,i.e. with an average mean annual increment (MAI) of 15 m3/ha, some 900 ha(44Z) are average, i.e. with an average MAI of 12 m3/ha, and only about 200ha (1OZ) are poor, i.e. with an average MAI of 10 m3 /ha or less. The PhaseI pine plantations, including those proposed for 1984-85, would totalapproximately 4,050 ha, nearly all at Vyanda, of which 1,300 ha (32%) wouldbe good, i.e. with an average MAI of 12 m3/ha; 2,000 ha (49%) would beaverage, i.e. with an average MAI of 10 m3/ha; and 750 ha (19Z) would bepoor, i.e. with an average MAI below 10 m3/ha. Approximately 50 ha of pineand callitris at Mageyo are considered to have failed because of very poorsoil conditons and will be used for grazing trials with sheep .

(b) Silvicultural treatment maintenance and protection. All thesePhase I plantations would be patrolled by forest guards, at approximatelyone guard per 200 ha. The youngest plantations would require standardweeding, for one year at Mageyo, two years at Ryarusera, three years atGakara and two years at Vyanda. Fertilization would take place over 120 haat Mageyo, 500 ha at Gakara and 500 ha at Vyanda (at the rate of 100 ha peryear). Firebreaks would be maintained everywhere, and allowance would bemade for fire watch and fire-fighting, as well as for road and buildingmaintenance, and vehicle running costs. The average overhead costs per ha,including a share of technical assistance, consultancies and all Projectheadquarters costs, are estimated at BuF 8,350 (US$70), or BuF 1,670(US$14) per annum over five years.

5.09 Pilot activities. The pilot activities would aim at testing anintegrated sylvo-pastoral approach (para 2.16). As such no largeadditional production of meat or foodstuffs is expected at a national level(para 6.08). At the farm level, however, improved cultural practices,including the use of selected seeds and of farmyard manure would eventuallyincrease annual farm income between 5-30%. This would represent anaggregated US$25,000 net annual income per pilot zone (500 farms) andUS$100,000 for the four pilot zones. The livestock pilot activities wouldeventually generate increased meat production from about 400 tons to about600 tons a year and the net annual income of cattle owners would increaseby 60%, including the net benefits from expected increased milk production(BuF 40 million or US$350,000).

VI. Markets and Prices, Financial and Fiscal Analysis

A. Marketing and Prices

6.01 At present the Government's policy on cost recovery related toforestry is in a transitional phase. The Government is adopting a policyof moving towards recovery of all costs except those for extensionservices. This would involve charging full production costs for seedlings

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and setting stumpage and permit fees at levels which would allow theForestry Department to cover its operational costs as well as to maintainthe present annual afforestation levels. However, at present, charges areset at lower levels (para 2.13). In addition the Government has realizedincreasingly the complexity of enforcement problems. It is concerned thattoo high or too abrupt stumpage rate or seedling price increases could havea negative impact, notably encouraging illegal cutting or discouragingfarmers from planting trees. These issues are currently under activedebate within the Government in the context of the Forest policy paperwhich it recently approved (paras 2.17 and 2.18). These policy issueswere discussed at negotiations and agreements were reached on the basicprinciples of pricing to which Government would be committed (paras 6.02and 6.03). A frauework of objectives and timetable for establishing animplementation plan were agreed upon within this context (para 2.18).

6.02 Pricing principles and mechanisms. Some specific issues onlevels of charges and mechanisms for application have been handled in thecontext of Forestry I project. Notably, seedlings have been sold at pricesthat have increased steadily. Although the Government agreed under theForestry I Project to charge full stumpage rates this has had no directapplication to date because plantations are not yet productive. TheGovernment recognizes now the need to set these specific cost recoveryactions in a broader policy context. Thus, under this Project, supportwould be provided both for the analytic and implementation work needed toestablish a clear cost recovery system. Specific cost recovery provisionsfor Project-financed plantations and nurseries would be elaborated withinthis framework. Some of the oldest eucalyptus plantations created underPhase I would be harvested by clearfelling during Phase II, while the firstpine thinnings from Phase I plantations would come just after the end ofthe Project period. Revenues from sales coming out of the production fromthe Phase I and Phase II plantations should, in due course, cover at leastthe cost of plantation and maintenance of these plantations, as well astheir replacement and debt servicing (para 6.12). This could be expectedto take place by the end of the Project period.

6.03 More specifically, pricing mechanisms need to be worked out foreach major category of forest products. During the First Forestry Projectimplementation, the price of seedlings sold to farmers has been raisedperiodically so as to cover approximately half of production costs. Thispractice would continue and would be standardized. The project unit wouldreview the production costs of seedlings annually and prices for thedifferent categories of seedlings would be revised annually in order torecover at least half of the costs in the case of bona fide farmers (i.e.,those purchasing up to 100 seedlings a year) and at least the full cost forcommercial purchases. Seedlings would be sold, not issued free of chargeto communes. On a limited, experimental but possibly expanding basis,seedlings would also be given free to "institutional' users, e.g. schools.The subsidy implied in the above prices is justified because of the vitalimportance of promoting tree plantings by farmers and their low purchasing

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power. Assurances to this effect were obtained at negotiations. For pineand eucalyptus commercial plantations, a substantial increase in stumpagerates over present levels would be needed to achieve full cost recovery bythe end of the Project period. For purposes of the financial analysis ofthe Project, and projection of Government's cash flow (paras6.12-7.05-7.06) an increase in the stumpage rates of 202 annually in realterms has been assumed, which would ensure such cost recovery (see Annex5). However, the precise formula to be applied for the determination ofappropriate pricing levels will need to be further refined, and itsviability tested, taking into account: (a) the past, current and expectedprices for fuelwood and poles; (b) the cost of alternative sources ofenergy, e.g. kerosene; (c) the distance between the plantations andconsumption centers; (d) the existence of "free' plantations, public orprivate; and Ce) other factors. Such formula would not in itself guaranteefull cost recovery but it would ensure that Government would not chargebelow what the market will bear. Assurances were obtained at negotiationsthat a detailed pricing mechanism acceptable to IDA, based on a stumpagerate study, would be put in place by December 31, 1988, i.e. before thePhase I plantations come into production, with the objective of settingstumpage rates at levels expected to cover existing plantations investmentand maintenance costs, as well as their replacement and debt services.

6.04 Marketing. The market for eucalyptus plantation production isvirtually guaranteed since it would be producing fuelwood (75Z) forBujumbura in quantities which would be well below demand in the 1990s andbeyond, and poles (25X) for which there is a strong demand in Bujumbura andall over the country. The price for poles is more than double that forfuelwood. Special emphasis would be placed under this Project on effortsto obtain a better yield on a national scale for charcoal makers (para3.15).

6.05 Pine produced under the Project at Vyanda and Vugizo would bemarketed throughout the country. Pine or cypress wood is no longerimported from Kenya and in practice is not available from any neighboringcountry. Domestically grown sawn timber is so scarce as to be virtuallyunobtainable in any significant amount. The scarcity of sawnlogs and thegreat difficulties encountered in securing imports of sawn timber areresponsible for the extremely low present consumption of sawn timber inBurundi and its replacement by other costly imported substitutes such asmetal frames and furniture. Timber is sold standing at a flat rateaccording to the circumference measurement at breast height. Only a fewnative species, conifers (including pine) and Grevillea are listed astimber trees. The stumpage fee varies from BuF 200 (US$1.70) to BuF 3,450(US$29) per tree according to its size. For instance, a tree measuring 95cm in circumference (or 30 cm in diameter) would cost BuF 500(US$4)regardless of its height, volume or quality. There are doubts as to thevalidity of such a system and there may be grounds for changes so that thestumpage be based on volume and not per piece. The study referred to above(para 6.03) would make recommendations on this matter. Assurances

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were obtained at negotiations that pine timber stumpage rates would bedetermined so as to reach a level expected t:o reflect full cost recovery byDecember 31, 1989. Rates would be adjusted upwards annually taking intoaccount inflation.

6.06 The first thinnings yielding saw logs at Vyanda are not expecteduntil after the end of the Project period. Nevertheless studies would becarried out to determine, on the basis of growth rates, the potentialproduction in thinnings, both as sawlogs and as smallwood (probablyfuelwood), during the 1990s. The first clearfellings would take placeearly in the next century. However, a first sawmill would be justifiedsometime before 1995, as soon as sawlog size material (of relatively smalldiameters) becomes available in sufficient quantity (say 10,000m3 p.a.). Asmall modular sawmilling unit should be put up at first, which could beenlarged gradually in order to reach a total capacity of say 30-50,000m3

p.a. per sawmill. All smallwood would be readily utilized in charcoalburning. Assurances were obtained at negotiations that IDA would beconsulted on marketing, processing and pricing arrangements for the pineplantations prior to the end of the Project period.

6.07 Experience in Burundi during the first Forestry Project suggeststhat farmers are keen to grow trees for their own needs on their land andthat they are willing and ready to purchase seedlings. As indicated above(paras 3.04 and 3.05) it is intended to take into account the needs andpreferences of farmers in the choice of seedlings and to give them greatersupport in agro-forestry. Thus it is expected that all of the productionof the rural nurseries will be readily disposed of.

6.08 Livestock and agricultural production. The pilot activitiesproposed aim at testing integrated activities involving livestock andagriculture, which might be repeated on a larger scale in future projects.They are not expected to generate substantial additional outputs or to havea significant impact on quantities traded or on prices at the nationallevel.

B. Financial Analysis

6.09 The proposed Project entity, like the Forestry Department, is notstrictly a commercial enterprise and performs many functions whose costscannot be fully recovered and whose benefits cannot be precisely accountedfor. This would be particularly the case for the agroforestry researchcomponent, the livestock and agriculture support activities and the ruralnurseries and agroforestry component. However, as regards commercialplantations, for which the Forestry Department would apply the principle offull cost recovery, royalties would be expected to cover costs by the endof the Project period. The Forestry Department would start collectingrevenues in 1989 (from Phase I) and in 1994 (from Phase II). Theserevenues are expected to cover maintenance costs of existing plantationsand would be sufficient to cover the present budget of the ForestryDepartment (the total budget for 1983 was BuF 72 million [pars 2.05]). Theobjectives for 1988 stated in the forest policy review are a total

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budget of BuF 175 million (BuF 55 million for ordinary; BuF 120 million forinvestments) while annual average revenues from Phases I and II wood Baleswould be about BuF 250 million for about 30 years starting in 1990 (Annex 5- Implementation Volume). Thus, while there are a number of uncertainties,particularly on the ability of the Government to recover the full cost offuelwood plantations, current projections suggest that the plantationprogram has a reasonable chance of becoming financially self-sustaining inthe medium-term future, and could make a significant contribution to thefinancial health of the Forest Department.

6.10 Tables 13-15 in Annex 5 show the returns expected from Projectinvestments in commercial plantations. These afforestation activitieswould have a financial rate of return of 9.2% and would break even in 12years. If the stumpage rates were raised to cover only 80% of costs, thefinancial rate of return would be 8.2%. With the assumption of stumpagerates set at levels assuring full cost recovery, the financial rate ofreturn for the pine plantations would be 10.6% and that for the eucalyptusplantations would be 8.5%.

6.11 To show the impact of livestock and agriculture supportactivities on farm family income, farm budgets without and with the Projecthave been worked out. Table III Annex 3 and Annex 4 of the ImplementationVolume shows that without the Project farm net income would be BuF 52,210(US$435) (for agriculture) and BuF 13,800 (US$1,153) (for livestock).Adoption of selected seeds and manure only would raise these figures by 33%and 25% to US$579 and US$1,450, respectively. Adoption of improvedtechniques would raise the figures for livestock to US$1,881.

C. Fiscal Analysis

6.12 The Project's impact on the Government cashflow is shown inTable 2. Projections are in estimated current prices through mid-1990(Project Year 5) and in estimated constant 1990 prices thereafter. In bothcases and in all years, Government outlays for Project activities wouldexceed direct revenues generated as a result of Project activities.However, revenues generated from Phase I plantations wood sales areexpected as soon as mid-1989 (PY 4) and should gradually increase. Thiswould progressively decrease the direct financial burden on the Governmentbudget finance by 1990 to create a net cash flow situation (para 6.09).The average revenues from Phase II plantations would be about US$0.9million per year until 2023. This would compare to a total US$0.6 millionbudget allocated to the Forestry Department in 1983 (para 2.05). TheProject has been designed to minimize long-term fiscal recurrent costs andthe institutional arrangements have been designed in order to eliminatepermanent technical assistance to the Project. It is our view that theforestry program represents a high priority for Burundi's development, andthe proposed investments and Government contributions are reasonable inscale and within the Government's financial possibilities. The samecomment would apply if difficulties in ensuring full cost recovery fromfuelwood plantations delayed the expected date of break-even in financingof Project activities.

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6.13 Public net outflow is about US$1.2 million in the first Projectyear, about US$1.1 million during the other disbursement years, and aboutUS$0.5 million per year thenafter until 1993. Plantation revenues areexpected to start from about US$1 million in 1993 and to reach an averageUS$1.4 million thereafter.

VII. Benefits and Justification

A. Benefits

7.01 The Project is expected to bring about substantial quantifiableand non-quantifiable benefits to the country and its population. Theprincipal direct benefits from the Project are: seedlings produced by70-90 rural nurseries and planted by farmers on their own land for theirown use (agroforestry); fuelwood, charcoal and poles from eucalyptusplantations. It is estimated that 13.5 million seedlings would be plantedby farmers all over the country, representing the equivalent of 6,750 ha ofprivate plantations producing at least 67,500 m3 per annum at fullproduction by the mid-nineties and for several decades thereafter. Thiswould also supply the fuelwood and pole needs of approximately 60,000 ruralfamilies or about 8Z of the farming community. In addition the farmerswould derive benefits from the planting of fruit, shade, soil-improving andmulti purpose trees of their choice. Provided wood stumpages are increasedsufficiently to allow full cost recovery, the Government would benefitdirectly from the eucalyptus and pine plantations, though the ultimate woodusers would be the urban population of Bujumbura and a small proportion ofthe population which is relatively affluent and lives within a marketeconomy. The pine timber (60% of the pine volume produced) would providethe needs of the population in a commodity which is alrsady extremelyscarce and valuable in Burundi; it would contribute significantly to limitthe needs for imprts by the turn of the century. The project's neweucalyptus plantations (2,000 ha + 3,500 ha) would by the mid-ninetiesproduce an average of 66,000 m3 per annum and for several decades, of whichsome 16,000 m3 would be poles and 5,000 m3 would be fuelwood. This wouldbe enough for the production of 6,000 tons of charcoal via more efficientcharcoal-making methods or could meet the needs of about 60,000 people inBujumbura (about one quarter of the present population). Some additionalbenefits would be derived from the 2,050 ha of Phase I eucalyptusplantations maintained during the project. The project's new pineplantations (1 500 ha) would start pro-ducing by the turn of the century,about 15,000 m of smallwood (probably all fuelwood) per annum at first,then shortly afterwards, a further 15,000m3 of sawlogs per annum, enough toproduce some 6,000m3 of sawn timber per annum for a few years.Clearfelling would take place around the year 2010 and for 3 years wouldproduce 60,000m3 of sawlogs or 24,000m3 of sawn timber and 15,000 m3 a yearof smallwood. Some additional benefits would be derived from the 4,100 haof Phase I pine plantations maintained during the Project. Realistically,however, the benefits and production of the pine plantations should beconsidered in the light of a sustained planting program throughout the

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length of the timber rotation (25 years) so as to support a viablesawmilling irdustry which could only be justified if regular supplies wereensured.

7.02 The main benefit expected from the proposed pilot scheme ofassistance to livestock and agriculture would be a local populationpositively disposed to afforestation, with a higher standard of living andan improved farm production. These benefits cannot be quantified at thisstage. If it is successful, however, the scheme is expected to provideextremely valuable experience in the integration of large afforestationprojects into the broader context of rural development and, morespecifically, the gradual change in grazing practice from extensiveranching to stall-feeding of cattle.

7.03 In addition the Project's technical assistance, cunsultancies andtraining components would assist in developing an effective forestryservice, as well as launching agro-forestry and an integrated agro-silvopastoral approach. Further benefits would result if the rural nurseriesand agroforestry component were to encourage part of the rural populationto reduce the use of agricultural residues for fuel as this would improvesoil fertility and probably reduce soil erosion. Such benefits cannot,bowever, be readily estimated or quantified. The likely positive impact ofthe pine plantations on the local environment has already been mentioned(para 3.26). Finally, the project would have a significant impact onemployment, as it is expected that the regular full-time labor force wouldtotal some 2,000, while the additional casual labor force would be at least4,000 to 5,000 at peak periods.

B. Justification

7.04 Afforestation is recognized as a national priority and as such,the Project represents an integral part of Government's strategy ofaddressing the pressing food and energy needs of Burundi's population.However, the projects implemented over the past few years have not beenbased on a well defined forest policy; such a policy has now beenbroadly defined (paras 2.16 to 2.19). This Project would address thegrowing wood demand of the population, the protection of the naturalenvironment, wood import substitution, and is related to the needs foragriculture and livestock development. It would aim at assisting theGovernment in coordinating extensive assistance for forestry.

7.05 Because there are several non-quantifiable benefits to theProject, the economic rate of return is not considered the primaryjustification for the investments proposed under the Project, which areprincipally aimed at providing support to the formulation andimplementation of a sound afforestation policy for the country.Nevertheless, an Economic Rate of Return (ERR) based on the net incrementalbenefits of the Project's commercial plantations investments has beencalculated for both pine and eucalyptus plantations together and isestimated at 24%. The economic life of the Project is assumed to be 32years because plantations would be clearfelled by then. The overall ERRanalysis includes all expenditures for direct capital investments,

- 49 -

replacements, operation and maintenance costs related to the commercialplantations plus 65% of Project administration costs. Labor has beenshadow-priced at 75% of the present daily rate (BuF 100), because ofrelatively large unemployment of available labor on area farms. A 20%premium has been added to the value of foreign exchange to reflect itsscarcity value. Costs include estimated average physical contingency of10, but do not include price contingencies, taxes or duties. Sensitivityanalysis on the rate of return shows that if costs were increased by 10%the rate of return would be reduced to 23%. If yields were reduced by 10%,the rate of return would be reduced to 22%. If benefits were to be delayedby one year, the rate of return would be reduced to 21%. Other hypotheseson the sensitivity analysis are shown in the implementation volume.

7.06 An ERR was also estimated separately at 18% for eucalyptus and36% for pine plantations. The costs of the pilot components (agroforestryresearch, support to livestock and agriculture) and of rural nurseries werenot included in the analysis.

(a) The rate of return from the eucalyptus fuelwood plantation wascalculated on the basis of the plantation costs including all costs ofplantation development and maintenance. Production was valued at BuF 8,818(US$73.5 equivalent) per m3 roundwood. It was assumed that the economicvalue of wood utilized for urban consumption was equal to the equivalentvalue of the principal alternative energy source available to the urbanpoor, which is kerosene. It was assumed that one cubic meter of charcoalwould be equivalent to 2.3 m3 of eucalyptus, and that the alternative wouldbe use of about 260 litres of kerosene a year at BuF 78 (US$0.65 perlitre). Adjustments to take account of cutting costs, charcoal productionand marketing were made. The rate of return was also calculated using acurrent market price for charcoal of about BuF21.4/kg (US$0.175),equivalent to US$12.5 per m3 roundwood. The resulting rate of return wouldbe about 22%. The Project life for the eucalyptus plantation was assumedto be 32 years. Separate cost and benefit streams are shown in Table 12and 13, Annex 5.

(b) The economic rate of return for the Pine plantations would beabout 36% over 24 years. All direct costs were included in t.e analysis.The economic value of saw log production was assumed to be equivalent tosawn timber imported from Zaire, adjusted to take account of logging,transport, and milling costs. This value is appropriate since there is noalternative source of timber to imports, and substitutes for timber whichmight be used to meet Burundi's development needs are significantly morecostly (metal or fiberglass for example). This would imply an economicvalue of standing timber of about US$250 per M3. If timber were valued atUS$300/m33, which may be considered a reasonable international cost, therate of return would be about 38%.

C. Risks and Uncertainty

7.07 The Project U`oes not involve unusual risks. The principalrisk of the Project is that management performance could be lower than

- 50 -

expectec. resulting in a slowdown of the afforestation programs. Theprincipal financial risk is that of the market prices for commercialplantations output to be insufficient to ensure full cost recovery, a majorobjective of the forestry policy.

7.08 A long-term enterprise like forestry always runs agronomic andcatastrophic risks. Appropriate provision has been made for fireprevention measures. The First Phase Project's experience does notindicate any major soil problem, and none is expected under the proposedProject. There is also a risk that Burundi will fail to exploit or controlthe exploitation of the full annual harvestable growth of its plantations.To address this problem the new monitoring and planning unit at theForestry Department would design adequate systems to ensure their optimaluse. Pressure to convert forest land to family farms is frequently citedas a risk for Burundi forestry. To address this problem the proposedProject has significantly decreased the surfaces proposed for commercialplantations in the preparation report and increased the surface to beplanted at the farm level to lessen illegal cuts by farmers in ces-'ercialplantations or in the natural forests. Further, the trees would not beplanted in areas where a potential for cultivation exists.

VIII. Agreements Reached

8.01 Assurances were obtained during negotiations on the followingsubjects:

(a) discussions on implementation of forestry policy measures andannual review of proposed forestry investments (para 2.18);

Cb) terms and conditions of technical assistance for the Projectagroforestry research (para 3.06)

Cc) annual budgetary allocations to the Project Account (para319);

Cd) procurement arrangements (paras 3.20 and 3.21);Ce) disbursement arrangements (para 3.22);-f) for each Project year, the Project accounts have been audited

by an independent audittr acceptable to IDA (para 3.25);(g) reporting requirements, including the setting up of a more

elaborate monitoring system and the preparation of acompletion report by the Forestry Department for the FirstForestry Project as well as for the proposed Project (paras3.25 and 4.11);

(h) before the creation of new nursories, a survey would becarried out by the project unit to determine the optimallocation of each nursery (para 4.02);

(i) schedule and management arrangements for exploitation of thePhase I plantations (para 4.03);

(j) transfer of responsibilities to the Burundese counterpartstaff and training arrangements (para 4.06);

(k) arrangements for the annual work plan (paras 4.07-4.08);

- 51 -

(1) seedling prices to farmers would be Daintained at a levelhigh enough to cover at least half of their production costs(pars 6.03);

(m) establishment of adequate stumpage rate mechanisms (para6.03);

(n) pine timber stumpage rates would be determined at levelsexpected to cover the Forestry Department's plantationinvestment and maintenance costs (para 6.05); and

(o) marketing and pricing arrangements for the pine plantations(para 6.06).

8.02 Conditions of credit effectiveness would be:

(a) a project revolving fund has been established with anadequate balance (para 3.19);

(b) conditions precedent to the disbursement of a FAC grant havebeen met (para 3.19);

(c) the following specialists have been appointed:- one silviculturist as Project Directorone silviculturist to manage Phase I and Phase IIeucalyptus plantations;

- one silviculturist to manage the pine plantations- one rural forestry specialist to manage the ruralnurseries and agro-forestry component;

8.03 Disbursement on the forestry and training components would beconditional to the appointment of three forest agronomists (Al) and atraining specialist, respectively.

May 17, 1985

-52 -Taw 1

IE40 IX

85/86 86/87 87/88 88/89 89/90 Tbtal % Amnt

I. Iuvestzimt Costsa. eqepzijurt 145.5 -63.4 79.9 77.7 49.8 416.3 74.1 308.7b. tecbmical assistbaoe 51.7 51.7 51.7 51.7 51.7 258.4 94.8 245.0c. civil. uod 57.3 30.8 13.5 1.7 1.7 105.1 49.2 51.7d. salarles 32.1 35.4 39.4 41.1 43.5 191.6 0.0 0.0e. labor 67.8 80.8 101.7 91.0 94.1 435.4 0.0 0.0f. training, stuxies

and trAlas 23.0 22.3 14.2 17.7 8.4 85.6 91.5 78.3

Total Investn1ot Costs 359.4 84.4 300.4 281.0 284.2 1,492.4 44.0 683.7

II. Ortional, Cbst 9.4 12.8 15.8 17.2 17.5 72.7 57.5 41.8

Total BasEfine Costs 368.8 297.2 316.2 298.2 266.7 1,565.1 46.4 725.5

Physical CcntIezncIes 33.5 34.6 26.5 24.7 21.5 130.7 36.8 48.0Price s 9.7 32.6 71.0 102.3 129.9 345.5 30.6 105.6

Total Project CoEts 430.0 354.4 413.8 425.1 418.0 2,041.3 43.1 879.2

Foreipi Eobwi4 249.6 156.3 166.4 172.2 134.8 879.2

y 2, 1985

TABLE 2

BURUNDIFORESTRY II

Government Cash Flow with Prolect(BuF million, current prices until 1989 79; constant prices thereafter)

Applicajon of Funds _ __Source of Funds Wroject e Expenditurea Debt Service Net

Project a) External Stumpage Total and Subsequent to IDA; Total Net Cash FlowYear Funds rate (1) Sources Opeating Costs Prineipal,interest App_ications Cash Flow Cumulative

1985/86 323.7 323.7 467.8 467.8 -144,1 -144,186/87 256.3 256.3 368.9 2.4 371.3 -115.0 -259.187/88 330,9 330.9 405.6 4.4 410.0 -127.1 -386.288/89 343.9 343.9 423.0 6.5 429.5 -133.6 -519.889/90 29'.5 292.5 420.0 11.0 431.0 -138.5 -658.390/91 - 55.75 10.9 66.65 -66.65 -724,9591/92 - 55.75 11,0 66.66 -66.66 -791.6192/93 - 55.75 10.9 66.65 -66.65 -858.2693/94 - 55.75 11.0 66.66 -66.66 -924,92 194/95 127.2 127.2 55.75 10.9 66.65 +60.55 -864.37 V95/96 167.9 167.9 55,75 25,3 80.66 +86.94 -777.4396/97 218.6 218.6 55.75 25.0 80.75 +137.85 -639.5897/98 218.6 218.6 55.75 25,0 80.66 +137.94 -501.6498/99 306.8 306.8 55.75 24.8 80.55 +226.25 -275.39

99/2000 103.6 103.6 55.75 24.8 80.46 +23.14 -252.252000/01 103.6 103.6 55.75 24.6 80.35 +23.25 -229.0001/02 103.6 103.6 55.75 24.6 80.26 +23,34 -205,6602/03 230.6 230.6 55.75 24.4 80.15 +150.45 - 55.2103/04 256.1 256.1 51.65 24.4 75.96 +180.14 +124.9304/05 203.2 203.2 47.55 24.2 71.75 +131.45 +256.3805/06 203.2 203.2 43.45 52.8 96.16 +107.04 +363.4206/07 203.2 203.2 39.35 52.3 91.65 +111.55 +474.9707/08 - - 35.25 52,1 87.26 -87.26 +387.7108/09 - - 37.25 51.7 88.95 -88.95 +298,7609/10 - - 32.75 51.5 84.16 -84.16 +214.6010/11 487.3 487.3 30.25 51.1 81.35 +405.95 +620.5511/12 511.1 511.1 26.75 50.9 77.56 +433.54 +1054.0912/13 558.7 558.7 25.25 50.5 75.75 +482.95 +1537.0413/14 190.5 190.5 22.25 50.3 72.46 +118.04 +1655.0814/15 190.5 190.5 19.25 49.9 69.15 t121.35 +1776.4315/16 - - 17.50 49.7 67.11 -67.11 +1709.3216/17 - - 15.00 49.3 b4.3 -64.301 +1645.02

17/18 _ _ 12.010 49.1 61.1 -611 +1583.92I8/19 119.1 Il'J. I h .0 48.7 5h.7 +62.4 +1646,3219/20 142.9 142.' 4.0 4b*5 52d +,). 4 +1736.72

(1) Smallwood: BuF 700/On3 ; saw logs: BuF 4000u 30Eucalyptus: BuF 1800/0 (BuF 3000/m3 for poles; BuF 535/m3 for fuelwood)

May 17, 1985

TABLE 3

Burundi Forestry II

Commercial PlantationsEconomic Rate of Return

MSE(NT WUES OF MET STREAM AT A DISCIT PAE OF13,52

B.1 IP 10 S UP 201 Ul S 502 DUN 1OS 202 PM 50S LA I YEA 2 2 IE J YEMSLA3YEAS

Cli 1,12.3 14305.4 1,48.6 2,038.0 939.2 756.0 206,6 904,5 712.5 543.4UP 102 1051.4 1,234.5 1,4177 1967.! 868,2 685.1 135.7 3336 641.6 472.5UtP 201 930.5 1,163.6 1,346,3 1,696.2 797,3 6142 64.68 76246 S707 01.6ti 502 767.7 950.9 1,134.0 1,683,4 584.6 401.4 *148.0 549,9 358.0 188.9WA 10 1,193.2 11376,4 1,559.5 2,106.9 1,010.1 3269 277.5 975.4 7835 614.4onl 20S 1.264.1 1447.3 1,630.4 2,1W9.8 J1I,O 897, 34U.4 1,046.3 4.4 685.3WmiI 502 1,47.9 1,660.0 I,343.2 2,392 1,293.7 1llO. 561.1 2,259.0 1,067.1 880LAB 1 YEAR - - - 91.9 796 627,98LO11 2 9 - - - - - - - - 971.2 702.1LAO 3 ARS - - - - - 7676

INTER. RATIO W KM OF NET IT1M

3.1 UP 10 UP 20S LP 0S I01W WA M A20S 0 LBI50 1EARL 2UYES LAB 3 YEARS

Ct. 23.650 24,919 25.913 29,840 22,3 21.028 15.995 21.366 19,532 11.020Ut l0t 22,511 23.650 24.716 27,569 212M 1956 15.047 20.377 18,656 17,231UP 202 21.496 22609 23.650 26.435 20.300 19001 14M200 1493 17971 16.523UP 50 19,001 20.049 214029 23,650 17M574 16.650 12.107 17.30 15.917 14,754NE 102 24.941 26,147 27,273 30.295 23.60 22246 17.070 22,46 20,M 18to7DM 202 26435 27,678 28.40 31.H49 25.0W 23,650 18.307 23.77 21,652 19,919NU 50S 32,812 34,269 35,604 39,111 31,366 29720 23,650 29,261 26S445 24.179LM I EA - - - - - - - 23.650 21.346 19.532LAO 2 YEAR - - - 23650 21.36LAO 3 Y- - - - - - - - - 23.650

Interml Rates of hrWm ft Not trom

me 23.652

1 2 3 4 5 6 7 6 9-10 11 12-15 16 17 19-20 21 22 23 24 25-27 29 29 30 31 32

3.1 - - - - - - 192,00 243.90 320,70 968,70 66150 853.50 230,40 307.20 - 2785,60 2921.50 29350 288.00 130,10 216.00 288900 236.00 289900C.1 237.90 158.70 283,20 19.tO 150W20 18.0E O 13.60 19.80 38.90 19.60 19.90 150 180 90 133 183.0 17M00 15.1O 1320 13.20 11,30 9M00 6900 30 -ND -237.90 -158,70 -103,20 -169.90 -150,20 -189,0 173,20 225.lO 301.90 949.90 642.70 834,70 211,60 298,40 -18.90 2768,60 2906,40 2810.30 274.60 168.60 207.00 292.00 2M5.00 288.00

Dcwnt 5, 1914 11127

.. g ptg a ,gyyl FInnmcial Rate of Return

11MA =1 NO C1

W IO $W la 11 91.m i993 £94 aW l-a l£ £,9-W 2W 361136 NSU-m7 614 SW 3104 23t at 313-3m 3 m 21 9 W 3

- rm

N - - - - ~~~~~~~~~~~~~~~- W6. £544 16.7 31.7 MS, I36.9 174.3 33.3 3.3 30 .7 3.1 Mo9. WA9. * 114 Vol 1396 3MA. MA. .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a- a-., tU.4 1 4. NO2 U.7 . 7 7 .l l.SN 174..X J .t . 3.0 WJ 3. 21.1 5 .4 7 No@ 14 3. 4, MA

810 LA.! 83.4 1 3.91Me l 9o. 3.3 3.9 3.0 3.. 3 no NO nO W.0 3.0 3.6 3,1 Mel 17.1 11.3 34 14 0.0 4.0

Tue., R E 51 5423 1AUI4 -11 X -No. -M. *-no U6.4 o.t 5J7 3.7 41 521,9 14.2 113.3 4.0 166. 31.7 W6 Met 112.3l 317.1 4.4 O.M W8. £1.6 MA.*

- 56 - Schedule 1

Burundi

Second Forestry Project

Estimated Schedule of Disbursements

IDA Fiscal Year Cumulative DisbursementQuarter at Quarter End (US$000)

1985-86December 31, 1985 a/ 50March 31, 1986 100June 30, 1986 200

1986-87September 30, 1986 650December 31, 1986 1,100Marc'h 31, 1987 1,550June 30, 1987 2,000

1987-88September 30, 1987 2,400December 31, 1987 2,800March 31, 1988 3,300June 30, 1988 3,800

1988-89September 30, 1988 4,400December 31, 1988 5,000March 31, 1989 5,600June 30, 1989 6,600

1989-90September 30, 1989 7,400December 31, 1989 8,200March 31, 1990 9,100June 30, 1990 10,000

1990-1991September 30, 1990 b/ 10,600December 31, 1990 11,100March 31, 1991 11,600June 30, 1991 12,000

1991-92September 30, 1991 c/ 12,800

a! Expected date of effectiveness: September 30, 1985b/ Expected date of completion : June 30, 1990cf Expected closing date September 30, 1991

May 17, 1985

- 57 -

Annex ITable 1

BURUNDI FORESTrY II

Comercial and Communal Plantations (ha)

Actual Ares Planted an Planned from Totalof Hay 31. 1984 1985 to 1990

timber fuelvood protection timber fuelwood protection actual & planned

!. Coercial Plantations:a. Projects financed:

Rgazgl (EEC) 2,802 91 45 - - - 2.938lugamba (But) -10.000 ha'

Belgium 1,671 - 5,302 1,000 - 2,027 10.000nugamba (Belgium) "2.000 ha' 263 78 1.608 - - - 1,949Hageyo (IDA) 50 350 - - - - 400Vyanda (IDA) 3,250 - _ 1,000 - - 4.250Gakara (IDA) - 1,355 - - S00 - 2,055Vugito (IDA) 500 500BE. Ryarusera - - - - 150 - 150Klbira (CCCE) 510 15 120 550 50 450 1,695Kuranvya (IL0) - - 1,250 - - - 1,250Ruyigi (IL0) - - 7,500 7.500Bukirasazi - - 4,480 1,120 5.600tosso - - - 1,125 625 750 2500Kayungozi - - - 240 - 2,160 2,400Ny muirwa - _ _ 2.600 400 - 3,000Nabanda (IDA) 2,500 2,500Bukinanyana (IDA) _ _ 500

8,546 1,869

b. State financed4,400 5.600 - 3,000 - 1,000 14,000

2. Comunal Plantations 120 11.880 - 1,000 2,000 - 15,000

Total 13.066 19,369 8i325 11.015 t; 205 15.007 77,987

Total Actual: 40,760 Total Projected: 37,227

Source: Forestry Department, Schema directeur de dEveloppement du aecteur for&t

December 4, 1984

Table 2

CQmmetlal Planttions: x,eeted Aual Yield tru Kxletimu and planned Plaattioa

1. l.tintg Pla1 atiote Productive Men Aul produetion (.3)Area Ircremnt (HUl) Timber 7_IeD u Totrl

_________ 3 /e (702) (30C=

1.1 ExletUn State Pia ttio.a Cat 5/31184)a. Project:

- Etqal Ci(m 2,242 10 15,694 6.726Clclaelytus 64 12 - 766(Callitria Pt PR - - -

- tUG 10000' (ne 1,170 10 8.190 3.510 11.700WAC. (Call. fR f - - -

- NBC '2000' Ci.. 210 10 1.470 630 2.100(laclyt. 62 12 - 744 744(Call. a f - - -

- asego (wuAlyptue 280 12 - 3.360 3.360Opite 13R n - - -

- vyand (IPie 2.275 10 15.925 6.825 22.750

- Cekara ucalyptue 1.084 15 - 16.260 16.260- lblra (14C4 357 10 2.499 1.071 3.570

Ctucalyptue 12 15 - IO0 Io(Call. f f - - -

- Hurmwya (Coal. ftf - - -

Sub-totml A) 7.899 43.778 60,074 83.354

b) Otber State PlOtatlOeD (P401Cr 2.300 10 19.600 D.40 23.000(.calymus 2.200 10 163.000 22.00 .000

Total State PLatatins (rouded) a + b 12.900 163.000 71.000 134.000

1.2 Ca_t.al PLIetatio.a (tleCCr 48 10 264 144 460(ltucmlptci 4.750 10 47.520 47.520

Total State Communal PlaDt-ti 17.700 64.000 118.000 182.000

U1. Plmead Plantatilo2.1 State nentatios.c. Projects

- O.3. -1 0W- (Plne 70 10 4.900 2.100 7.000(Coll. n PR - - -

-VyaDa (PIne 700 10 4.900 2.100 7.000- Cakara (Euclyptu 200 15 - 6.000 6.000- Ryarnera (Zucalyptus 150 15 - 1.800 1.800- Klblra (P40 385 10 2.69S 1.155 3.850

(Mucalyptow 40 15 - 60 60(Call. n PR - - -

- ayJigi (Kucalyptue 300 15 - 4.,50 4.500(Call. PR PR - - -

- Deklraaazi Cmealyptu_ 3.584 10 - 35.840 35.40(Cel1. PR PR - - -

- MD o (ie 900 10 6.300 2.700 9.000(Eualyptus SDO 12 - 6.000 6.000(Cell. PR PR - - -

- Kaygoalz (Pin 192 10 1.34 576 1920(Call. Fit f - - -

-N. Mmirwa (PInR 2.060 10 14,560 6.260 20.800(ocalyptum 280 15 - 4.200 4.20

- Veto 6W 15 6.000 6.000- Mabada 4w00 15 6.000 6.000-SDokDm7yma 2.000 15 30.000 30.000

SoDa-total C) 9.9 14*0.699 0 9.27 149.970

d. Otber State Pimiatlons#c44Cr 2.400 10 16.800 7.200 24.000

Call. fR PR - - -

2.2 CDommnal plantationsP*C4. 700 10 4.900 2,100 7.000Euealyptus 1.400 15 - 21.000 21.000

Total I 14441 62.000 149,000 212.000

111. Total Slting. + Plannedn1ub 32.140 126.000 267.000 393.000L1W 25.000 92.000 168.000 260.000

PA - ProtectianP * PlnaC - CallitriaC -re rllsa

Source: Fbrestry Departmnt

Dember A. 1984

- 59- ___1

Table 3Bw,udi Forestry II

Gavec~t Btger AlUocacions 1977-1984

1977 1978 1979 1980 1981 1982 1983 1984

TocaL 5.0 6.2 9.1 10.0 10.8 12.6 13.5 16.2Agrlcutwe and lvestock 0.18 0.23 0.35 0.41 0.44 0.54 0.5 0.52

Un~L1ary Bu4gemTtaL 2.0 3.3 3.6 4.0 4.6 4.0 3.3 3.0Ap±ultowe and livestock - 0.64 0.69 0.58 0.67 0.58 0.48 0.54

Total B3ulger 7.0 9.5 12.7 14.0 15.4 16.6 16.5 19.2API tu1czre and livestodc 0.18 0.87 1.(% 0.99 1.11 1.12 0.98 1.06

erm 3 9% 8% 7% 7% 7% 6Z 6%

S,arc: Ministries of Piace and PIn"g

May 17, 1985

Annex 2-*60 -

BURUNDI - FORESTRY II

Selected Documents and Data Available in the Project File

DocumentA. Sector/Sub-sector Reports and Studies No.

LEJEUNE - 'Assistance au D4partment des Eaux etForets pour l'amflioration des methodes descarbonisation/, PNUD, Rome, avril 1984. 109.742 Al

C.T.F.T. - /Etude de projets forestiers, assistancetechnique aupres du department des eaux et Forets;novembre 1984, F.E.D. 109.742 A2

FAO/PNUD: Document de projet de formation desTechniciens des Eaux et Forets. 109.742 A3

Mission d'indentification d'un projet dediveloppement rural integre (communed'Isale-Mugaruro, septembre 1981. 109.742 Ah

Schema Directeur de Developpement des SecteurForet, juille 1984. 109.742 A5

Reunion de consultation sur le Burundi,Nations-unies 1981. 21007 (BU/120)

B. Project - Related Reports and Studies

Rapport de preparation du deuxiame projet forestierFAO/CP, 3 volumes, 21 mai 1984. 109.742 B1

AFVP: (Betty Wampfler, VP): Rapport de mission aVyanda mai 1984. 109.742 B2

Mision Forestiere Crete Nil. Essais Syvicoles;Mesures 1983. 109.742 B3

Compte-Rendu de l'Enquace aupras des Eleveurs ecagriculteurs de la zone de Vyanda (F. Luthereau,V.P.), avril-novembre 1983. 109.742 B4

Socio-ecological Survey of the Burundi ForestProject Areas'. A.W. Weber and A. Vedder for INCN,USAID, October 1983. 109.742 B5

- 61 -

DocumentC. Implementation Volume No.

Annex I - The Forestry Component 109.742-T Cl

Annex 2 - The Agroforestry 109.742-T C2

Annex 3 - The Agricultural Component 109.742-T C3

Annex 4 - The Livestock Component 109.742-T C4

Annex 5 - Economic Price of Woods 109.742-T C5

Annex 6 - Annual Plan Outline 109.742-T C6

-62- Chart I

_URUNDI

FORESTRY It

!npleentation Schedule

Project Year Pre-Projert P_ 1 PT 2 PT 3 PY 4 PY 5

Fiscal Year 85/86 86/87 87188 88/89 89/90

Quarter 3 4 1 2 3 4 1 2 3 4 1: 3 4 1 2 3 4 1 2 3 4

1. IDA,1.1 Negotiations x1.2 Board Presentatton June 301.3 Date Effectiveness J 1990 x1.4 Completion x1.5 Closing Date Sept. 30

199I2. Project Implementation

2. 1 Stumpage Rates Increases(fuelwood sawlog)

2.2 Seedling Prices Increases2.3 Finalization of all

Planting Sites. and ofForestry Policy Document ___

2.4 Staff AppointmentsExpatriate:

Project Manager xSylviculturist (pine) x

(eucalyptus) x(agroforescry) x

Local:Forest Agronomists (Al) _ 3Assistant Foresters (A2) 10Training Specialist LZootechnician IAgronomtst I

2.5 Work Programs and Budgets:Submitted to Bank x x x x

2.6 Reports:

annual xx x Kt xcompletion x

2.7 Procurement Vehicles, Dec 1991Katerial, and Equipment - -36Z … 2 … …132 --- …I…22------ ---- 1332 ----- 161---- ------ 23Z---

2.8 Civil Works: Officesart Stores ----- 522…--- --- 3320------ __…----… --- ---- -- 0.5X----

1.9 Road Tracks (ki):-roads ----- 10----- --- 11------- ---- 13----- ------ ------tracks ---- 30----- ___33_______ ---- 39…- - ---- 24----- - 24----

2.10 Plantationsestablishment (ha) -- 500+500--- -600+500---- -800.500---- --- 800----- ---- 800----maintenance & -roteccion:phase I -- 6.150---- -- 6.1501----- -- l50---- -- 6.150----- -- 6,150----phase II -- 1.000----- -- 2,100----- -- 3.400----- -- 4.200-----

2.11 Agroforestry:number of new nurseries ------ 5----- ----- 5------ ----- 5 …--… …- 5------ ----- 5-----area planted:

demonstration (ha) ---- 3503----- --- 23754----- ---- 000----- ---- 425----- --- 450---private (ha) -- 1150---- -250------ -- 1,350----- -- ,450---- --. 550-----

2.12 Consultancies (man-monch)agroforestry ------ 6----- ----- 3 … …-,-: ------ 2----- ------ 2----- ------ 2-----livestock ------ 4----- ----- 2----… … ------ 2-----------2-----agriculture ------ 2----- ----- 2---- ------ 2----- ------… 22----- ------ 2-

2.13 Scholarships:forestry (2 years each) ( s4 man-years)------- (----.A man-year…)-----charcoal makers (courses: ------ 1 ----- ----- 1agruforestrv (courses/ ---- I-- 1 … 1- I1

2.14 Audit

may 17. 1985

BURUNDI

FORESTRY II PROJECT

Hinistry of Ariculture and Livestock

I -- _~~~~~~~~~~~H nlttsrte-

arastatalsl Director of Dji7 rector ot 1 Director of RegionalAgriculture Livestock Agricultural Development

Planning Companiea

ISABU (Researclk) Departments: Departmental SaricessOCilU (Coffee) _ _OTH (Tea) ALrommaoy Animal Planning and ImboONASII (Sugar) Production Surveys BuynaLIONAHA (Equlpmsent) KirimiroCO(ERCO _ Rumonge

v1 Works _ _ _ _osso-Sud_ _ _ _ __ _ Animal Nonitoring 6

_ ___ _ _jtlleattl EvaluatLon

Veterinary AgriculturalLabs Evaluation

Rural IDevelopment

Agra-pastoralz- Information

- 64 -

Chart 2-b

BURUNDI FORESTRY II

THE FORESTRY DEPARTMENT(Present Organization)

|Director

|Forestry Sub-Directo {

ForestrySub-Director

,-oetry I Other donor _roect I financed l

~~ - | ~projectsl

General ServicesAccountant,I Administration

2zra ' 3a ,=

BURUNDI,'W SECOND FORESTRY PROJECT

Phposd hmm N Fniaiaag (198-1

Eil &.*aIyia

EgP01B FM"E1n Plattin 190-19853

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