R.pod No. 90!

The World BankImpact Evaluation ReportBenin-Hinvi Agricultural Project(Credit 144-BEN)April 5,1964Operations Evaluation Department

FOR OFFICIAL USE ONLY

Doaunent of the .-d Bank

This document has a restrited dkistibtion and may be used by recipentsonly in the perfoffmance of thei official duties. Its contents may not otherwisebe discdosed without V'A,dd Bank authorization.

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ABBREVIATIONS

ffb - Fresh fruit bunches (of oil palm)

FAC - Aid and Cooperation Fund (French bilateral assistance)

FED - European Development Fund

PMWA - Bank Permanent Mission in Western Africa

SOBEPALH - Beninese Oil Palm Corporation

SONADER - National Company for Rural Development

ZOCA - Annual crops area

FOR OMCIAL USE ONLYTHE WORLD BANK

Washington. D.C. 20433USL

Odice ca Di,ectcr-GmalOpera0om Evaluan

April 5, 1984

MEMORANDUM TO THE EXECUTIVE DIRECTORS ANM THE PRESIDENT

SUBJECT: Impact Evaluation Report - Benin Hinvi AgriculturalProject (Credit 144-BEN)

Attached, for information, is a copy of a report entitled"Impact Evaluation Report: Benin - Hinvi Agricultural Project(Credit 144-BEN)" prepared by the Operations Evaluation Department.

Attachment

Mervyn L. Weiner

by Shiv S. ICapur

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties Its contents may not otherwise be disclosed without World Bank authorization.

FOR OMCIAL USE ONLY

IMPACT EVALUATION REPORT

BENIN - HINVI ACRICULTURAL PROJECT(CREDIT 144-BEN)

TABLE OF CONTENTS

Page No.

Preface .. ......................................................... iSummary and Conclusions ............ ............................... ii

I. INTRODUCTION 1

II. AGRICULTURAL IMPACT . 6

III. MAIN EXFASONS FOR PROJECT FAILURE. 9

IV. ECONOMIC AND FINANCIAL IMPACT . .. 5.....................

V. SOCIAL IMPACT . . 17

VI. CONCLUSIONS AND OUTLOOK FOR THE FUTURE .. 19

VII. LESSONS LEARNED FROM THE PROJECT 20

Annexes

1. Land Use by Cooperatives ................................. 232. Yields per Hectare on Cooperatives, 1973-82 ...... 243. Yield Curve: Latest Estimates and Achievements . .254. Annual Rainfall Deficit in Pobe 265. Social and Economic Characteristics of Hinvi Region 276. SOBEPALH: Cost of ffb as a Proportion of Total Sales 327. Different Worker Groups Within the Cooperatives as of

April 1983 ...... .... ....... 338. Work Reaction to the Cooperative Experience ...... 349. Profit and Loss Statement of the Cooperatives from

1977-82 ......................... 3810. Composition by Age and Sex of the Five Rural Communities

in the Hinvi Region .................................... 3911. Bank Contribution to the World Oil Palm/Coconut Sector ... 40

Map IBRD No. 2112

I n document has a eVkftd diMibutil and may be ued by r only in th perfomance of Ithei ofcial dute Its contents way not oterwise be diL witout World Bank auto0rizto.

IMPACT EVALUATION REPORT

BENIN - HINVI AGRICULTURAL PROJECT(CREDIT 144-BEN)

PREFACE

This is an Impact Evaluation Report of the Hinvi Agricultural Proj-ect in Benin, for which Credit 144-BEN in the sum of US$4.6 million andsupplemental credit 144-2-BEN of US$600,000 were approved in February 1969and January 1974 respectively. The French Fund for Aid and Cooperation (FAC)co-financed the project with the Bank and contributed a total of US$5.1million equivalent. The project was closed in June 1976 after cancellationof US$25,000.

The Impact Evaluation Report is based on a review of the AppraisalReport (No. TO-615b) dated February 3, 1969, the Project Performance AuditReport (PPAR, OED Report No. 2053) of May 19, 1978, the FAC Evaluation Reportdated May 1981 and the French Central Economic Cooperation Agency (CCCE)Report on the oil palm sector in Benin of April 1983; relevant Bank files anddocuments have also been consulted, and particularly the Review of the OilPalm Sector prepared by Booker Agriculture International, Ltd. (Bank consul-tant), in July 1982; Bank staff associated with the project have beeninterviewed.

An OED mission visited Benin in January 1983 and held discussionswith officials of the Ministry of Planning, SOBEPALH and SONICOG. A fieldtrip to interview a number of participating farmers was undertaken. Farmsurveys and data gathering were carried out from February to April 1983 byMr. Ogunsola John Igue, Professor at the National University of Benin, whointerviewed a sample of 48 cooperative members and held discussions with the10 cooperative boards of directors in the project area. The informationobtained during these missions and discussions was used to test the validityof some conclusions of the 1978 audit report and to assess the project'simpact on agricultural production, on the lives of the project beneficiariesand on the Beninese economy.

A copy of the draft report was sent to the Borrower on December 23,1983. However, no comments were received.

The project was selected by OED for a second look evaluationbecause its economic and social impact was still uncertain at the time ofaudit and because its cooperative development approach was both innovativeand controversial.

The valuable assistance provided during the preparation of thisreport by the Government of Benin, by officials of SOBEPALH and SONICOG, byProfessor Igue and by FAC and CCCE staff is gratefully acknowledged.

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IMPACT EVALUATION REPORT

BENIN - HINVI AGRICULTURAL PROJECT(CREDIT 144-BEN)

SUMMARY AND CONCLUSIONS

The Project

1. Credit 144-BEN (US$4.6 million), approved in February 1969, was toassist in financing agricultural development in the heavily populated Hinviregion through planting of 6,000 ha of oil palms and 1,000 ha of forest;preparing 6,000 ha for annual crops; constructing an oil mill; developingbeef production; and constructing access roads and project facilities. Theproject beneficiaries, about 4,000 farming families, were to be organizedinto ten producer cooperatives, each with 600 ha of oil palm, 600 ha ofannual crops and 300 ha of pasture, afforestation and village area.

2. Farmer participation in the project was compulsory. The owners(A7 members) of land were to receive one share, bearing a 3Z interest rateper year, of the cooperative for each hectare leased by them for the projecton a fifty-year basis. Laborers ("B" members), mostly landless farmers, whowere to work at least 200 days on the establishment of oil palm plantations,were also to receive one share of the cooperative. Only "B- members were tohave a voice in the running of the cooperatives and a participation in thecooperative profits. 'A' and "B- members were to receive a 1.5 ha plot ofannual crops to be worked individually by cooperative members following aspecific crop rotation. SONADER (later renamed SOBEPALH), the ProjectAuthority, was to manage the oil palm plantations on behalf of the coopera-tives for the 25-year life of the project.

3. At appraisal it was recognized that the rainfall distribution inthe project area was sub-optimal but acceptable for oil palm production andthat organization and management of producer cooperatives would be a diffi-cult task that SONADER, an efficient and competent organization, would,however, be able to carry out.

4. While the planting program was implemented on schedule, the annualcrop program soon ran into difficulties because fewer farmers than expectedwere prepared to abandon traditional shifting cultivation in the forest andto take a 1.5 ha plot in project blocks. However, the introduction of animaltraction and a greater flexibility by SONADER on crop rotation stimulatedfarmer interest.

5. At project completion, in 1976, about 14,000 ha including oilpalms, annual crops, afforestation, pasture and urban areas had beendeveloped. Functioning of the mill was satisfactory. Yields of oil palm,however, were lower than estimated at appraisal. The annual crop system wasnot popular with farmers; the yields obtained were low and the planned rota-tion created labor constraints.

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6. The project ERR was re-estimated at about 5Z, compared with 12Xcalculated at appraisal. However, the social impact of the project was con-sidered substantial. Different opinions were expressed in the PPAR asregards the cooperative system, which was found by the PPAM "well on the wayto becoming efficient farmer organizations' while the PCR stated that it wasdifficult to conclude that the cooperatives -had really taken root". Inaddition, the PPAR stated that insufficient knowledge at appraisal of localconditions and overoptimistic assumptions of labor availability had resultedin difficulties with the maintenance of oil palms and an overestimation ofthe benefits that the farmers could derive from the proposed annual crop sys-tem. Nevertheless it was found that a new technology had been introduced inthe project area and farmers were adopting better practices than elsewhere inthe country.

Project Impact

7. Five years after completion, the project can now be considered amajor economic and social failure. Yields and production of oil palms haveonly reached 25% of appraisal estimates, due to low rainfalls, poor mainr-tenance of trees and considerable stealing of fruits. For annual crops,cropping intensity and crop production remain at about 30X of appraisalprojections because the proposed technical package has proved unrealistic andhad an adverse effect on soil fertility. The livestock component has failedand incurred financial losses for the past five years. Forests have beenpartly destroyed by fire and illicit cutting.

8. With the benefit of hindsight, the project failure can beattributed to four main reasons:

(a) the climatic conditions and natural resources of the project areawere overestimated and, as a result, the proposed technicalpackages proved inadequate;

(b) the development approach, based on a compulsory producer coopera-tive system, proved not adapted to the socio-economic context ofthe region and generated strong opposition from the majority ofthe beneficiaries;

(c) the failure to correct the original deficiencies of the cooperativesystem; and

(d) the performance and financial situation of the project authorityseverely deteriorated after project completion.

9. The most striking factor of the project in 1983 is the disintegra-tion of the cooperative system, which was found a relative success in 1978.For the past five years no effort was made by the Government to promotecooperative autonomy and self-management. A policy of paying low salariesand low prices for oil palm fruits to cooperatives led to a vicious circle:project beneficiaries found better employment opportunities elsewhere in thecountry or abroad; the shortage of labor resulted in poor maintenance of theplantations and low production, which in turn increased the disinterest of

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farmers and increased the emigration process. Stealing of fruits bycooperative members became a common practice. Project beneficiaries did notconsider themselves as cooperative members but as SOBEPALH laborers.

10. The project ERR is now negative. Deficit of food superseded thesurplus prevailing in the pre-project situation and most of the cooperativesincurred deficits from their oil palm activities. The project impact onbalance of payment and Government revenues is negligible. While the farmerincomes are now lower than they were before the project, the main benefici-aries of the project appear to be the 1,500 civil servants working in theProject Authority.

11. The social impact of the project can only be considered a dis-appointment. Contrary to plans, no effort was made to improve the medicaland scholastic infrastructure in the project area. The project was not ableto offer, in the Hinvi region, adequate job opportunities for young men whooften opted for emigration. In addition, the project deeply disrupted thetraditional way of life of the population and had particularly adverseeffects on the living conditions of women, who lost a large part of theirccmmprcial and artisanal activities.

12. Some important lessons can be learned from the project:

(a) the risk of planting oil palms in densely populated regions withsub-optimal climatic conditions;

(b) the danger of introducing development strategies which stronglyupset the traditional way of life of the population when other andless disruptive approaches have been successfully experimented within other countries; and

(c) the need for the Bank to ensure durability of completed projectsthrough its economic and sectoral dialogues with governments.

IMPACT EVALUATION REPORT

BENIN - HINVI AGRICULTURAL PROJECT(CREDIT 144-BEN)

I. INTRODUCTION

A. Background

1.01 In 1965, natural groves of oil palm covered an estimated 0.4 to 0.5million ha in Southern Benin; oil palm was the main source of edible fats forthe Beninese population and contributed to 73% of export earnings. Localconsumption was expected to increase from 23,000 tons to 32,000 tons in 1975and to double by 1985. There was an urgent need to develop oil palm pro-duction, both to meet domestic consumption and to maintain exports, ifpossible.

1.02 Initial programs to increase palm oil production consisted of (i)the construction, between 1951 and 1955, of four factories for milling freshfruit bunches (ffb) from natural palms and (ii) the planting of improved oilpalms on about 2,300 ha. These plantations, however, were not successful dueto land tenure problems and maintenance difficulties.

1.03 In 1962, the Government enacted legislation which allowed it toacquire compulsorily the use of privately owned land in designated develop-ment areas and to enforce the formation of producer cooperatives. At thesame time, the Government established SONADER, a parastatal authorityresponsible for developing agricultural production in the country.

1.04 From 1962 to 1975, some 28,000 ha of improved oil palms wereplanted and three palm oil mills were built by SONADER. Other rural develop-ment activities were also integrated with oil palm development includingannual crops, reforestation, livestock, rural roads and social services. Thedevelopment strategy used by SONADER was to acquire land in the vicinity ofvillages, and to establish blocks of about 600 ha of oil palms (to permit theuse of modern agricultural methods) and of 600 ha of annual crops. Villagerswere grouped into production cooperatives and worked both oil palm and annualcrop blocks under the supervision and with the assistance of SONADER.

1.05 The oil palm program was mostly financed by FAC and FED until1968. In 1966, however, the Government requested assistance from the Bankbecause of a growing reluctance of FAC and FED to carry the full burden ofexternal financing of the proposed projects. PNWA then collaborated withSONADER for the preparation of an oil palm development project, followed bypre-appraisal in March 1967 and appraisal in August 1968, of the Hinvi Agri-cultural Project, the subject of this Impact Evaluation Report.

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B. The Project

Project Design

1.06 The project, to be implemented over 10 years, consisted of:

(i) planting and bringing to maturity 6,000 ha of oil palms;

(ii) preparing 6,000 ha for annual crop production;

(iii) constructing an oil mill with an ultimate annual capacity of 70,000tons of ffb;

(iv) planting 1,000 ha of forest (teak and cassia);

(v) developing beef production; and

(vi) constructing the necessary roads and project facilities.

1.07 The project cost was estimated at US$9.6 million, of which IDA andFAC were to finance 47.9% (US$4.6 million) each, and the Government theremaining 4.2%. The main objective of the project was 'to develop an effi-cient and modern system of agricultural production, capable of assuringparticipating farmers of standards of living superior to those obtainablefrom traditional farming methods."1/ To this effect the project benefi-ciaries were to be organized into ten producer cooperatives, each with 600 haof oil palm; 600 ha of annual crops (the latter block sub-divided in 1.5 haindividual plots) and 300 ha of pasture, afforestation and village area.

1.08 Farmer participation in the project was compulsory since SONADERwas legally empowered to oblige landowners in the project area to joinproducer cooperatives. The cooperatives were to have two kinds of members.First were the owners of land who were to receive one -A" share for eachhectare leased by them for the project on a fifty-year basis. "A' shareswere valued at CFAF 30,000 (US$120) and were to bear 3% interest (CFAF 900,or US$3.60) per year. Second were farmers wbo were to work for a minimum of200 days on the establishment of the oil palm plantations and agreed to worka holding of 1.5 ha of azinual crops. Members of the second group were toreceive a 'B' share, also valued at CFAF 30,000. Members qualifying for -B'shares would be mostly landless farmers and would receive CFAF 125 for eachday worked on the plantation. (Since the official daily wage was CFAF 275,the farmers were considered to be contributing CFAF 150 in value of work perday to the project, or CFAF 30,000 in total.) Only "B3 share members were tohave a voice in the running of the cooperatives and to participate in theprofits of these cooperatives. This participation was however limited to 3%per year of the value of the shares. Any surplus after payment of intereston"A" or "B" shares would be used for capital improvements and to increasethe daily wage of workers in the plantations. AW share members would be

1/ Appraisal Report, para. 4.02.

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encouraged to obtain -B" shares and become 'AB' members by working on theplantations.

1.09 For the 25-year life of the project, SONADER was to manage the oilpalm plantations on behalf of the cooperatives. All revenues were to accrueto SONADER, and only after all costs, including loan repayments, had beenmet, would the surplus be paid to the cooperatives. The cooperatives were tobecome autonomous only after discharge of their debt to SONADER.

1.10 The 1.5 ha holdings of annual crops were to be worked by coopera-tive members and their fandlies as individual enterprises. A specific croprotation, however, would be obligatorily followed for 1.2 ha of each plotwhile on the remaining 0.3 ha farmers would be free to grow what theypleased. The cooperatives would provide seeds, fertilizer and other inputsas well as storage and marketing services, which would be paid for byfarmers.

1.11 A central project herd of 300 breeding cows would be establishedand would provide stock for the ten project cooperatives. In addition 700 haof teak and 300 ha of cassia would be planted and their revenues would accrueto cooperatives.

1.12 Ten villages were to be established and would be the headquartersof the cooperatives. Villages would be sited adjacent to the cooperativeblocks and would be equipped under Government financing with water points,schools and dispensaries.

1.13 At appraisal, it was recognized that the project would be subjectto two major constraints. First, the annual rainfall, and rainfalldistribution in the project area were found sub-optimal for oil palm produc-tion; therefore oil palms would take longer to mature and yields would belower (about 50%) than those in the most favorable areas of West Africa.Second, it was feared that the cooperative organization proposed might meanthat the farmers would neglect either field crops or oil palms.

1.14 The Appraisal Report concluded, however, that climatic conditionswere acceptable for oil palm development and that the possible cooperativeproblems would be minimized by SONADER, an efficient and competent organiza-tion which had gained considerable experience in agricultural development andin the organization and management of producer cooperatives. The project wasconsidered a major contribution towards increasing production and exports ina country where the development potential was not high. The project ERR wasestimated at about 12%. In the calculation of the ERR, the alternativeemployment opportunities of cooperative members were costed at zero becausethere were no other employment opportunities in the project area, and nonelikely to become effective in the foreseeable future.

Project Implementation

1.15 The planting program started quickly and was completed on schedulein 1970. Altogether, 6,075 ha of oil palms were correctly planted and

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reasonably well maintained despite difficulties in obtaining the labor neededfor these operations.

1.16 The annual crop program soon ran into difficulties. Fewer farmersthan expected were prepared to abandon traditional shifting cultivation onplots cleared in the forest and take up 1.5 ha holdings in the projectblocks. On these 600 ha blocks, called ZOCAs, input use was minimal andyields far below appraised targets. By 1971, only 450 farmers had taken upplots in the ZOCAs. In 1971/72, a greater flexibility by SONADER, allowingthe farmers to choose the crop rotation, and the introduction of animaltraction stimulated more farmer interest. Thanks to technical assistancefinanced by FAC, the use of animal traction increased rapidly. Butconstraints on the supply of animals were believed to limit expansion of ox-drawn cultivation, and further development of the ZOCAs remained uncertain.

1.17 The original project called for an oil mill of 24 t/h capacity tobe built in two stages. The revised project (April 1971) showed the need fora 20 t/h mill, with provision for expansion to 40 t/h. Construction of themill was completed in 1974 as planned, but it did not go into operation untilmid-1975 owing to water-supply problems. The total investment cost was CFAF962.4 million (US$3.9 million), as estimated in 1971. The functioning of themill was considered satisfactory on the whole, especially since some lastadjustments in 1977 made it possible to raise capacity to 27 t/h.

1.18 The project costs and financing schedule were revised twice. In1971, with the difficulties encountered on the ZOCAs and a need to reallocateoil palm production among existing and planned mills, project costs wererestructured. The Bank then abandoned its support to the ZOCAs, whichSONADER pursued thereafter with FAC technical assistance, and the funds thusreleased helped finance the extra costs of the mill.

1.19 In 1973 SONADER faced a financial crisis, caused by successivedollar devaluations and non-payment of the government contribution, andaggravated by the agency's failure to establish financial planning andcontrol systems. To solve these problems, IDA provided a supplemental creditof US$600,000 in January 1974 and FAC contributed an additional US$520,000 tothe project. In the end, total project expenditures were slightly lower thanestimated (CFAF 2,266.6 million). IDA financing was increased, however, fromUS$4.6 million to US$5.2 million, thus accounting for just over 54% of thetotal bill. FAC's contribution amounted to 43% and the Government's to 3%.

Project Impact at Completion

1.20 At project completion, in 1976, about 14,000 ha, including oilpalms, annual crops, afforestation, pastures and urban areas had beendeveloped (details in Annex 1). The project was considered a mixed success.Despite the excellent performance in planting and satisfactory maintenance,oil palm yields and production had been below estimates. The principalreason was rainfall. In most of the cooperatives, rainfall for two years(1971/72 and 1972/73) was less than the minimum recorded over the previous30-year period and was distributed very unevenly over neighboring coopera-tives. Production was also affected by fires, spreading from where farmers

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were burning their fields, and theft due to the inadequate organization offfb collection and the higher prices obtainable on the parallel market.

1.21 For annual crops, the proposed cropping system was not popular withfarmers, who preferred their traditional practices. The new system did notmeet all the needs of the farmers; the part devoted to food crops was toosmall, the yields obtained from commercial crops were low and the plannedrotation created serious labor constraints during the planting and harvestingperiods. Since the rotation system was obligatory, a number of farmers aban-doned the ZOCAs, preferring to grow their crops outside the project area.Later, relaxation of the rigid cropping pattern and the introduction of ox-drawn cultivation were favorably accepted by the farmers and made it possibleto increase yields while reducing the per-hectare labor requirement. Thetotal number of farmers in the ZOCAs rose from 1,800 in 1973 to 3,000 in1975.

1.22 Functioning of the mill was satisfactory, although the oil fat acidcontent was high due to inadequate organization of fruit collection and theinsufficiency of storage capacity. The livestock and afforestation programshad been completed as planned. The benefits of these components, however,did not accrue to the cooperatives because animals available for sale weresold at a price fixed by the Government at about 50% of the market price andthe teak and cassia plantations had not been properly maintained and some hadsuffered from bush fire.

1.23 The project ERR was re-estimated at about 5%, with labor costed atwage to reflect the labor constraints in the area.

Main Findings of the PPAR

1.24 The PPAR2 I concluded that although the project's accomplishmentshad fallen short of appraisal expectations, the project had a substantialsocial impact. In a region where natural conditions are marginal and poten-tial productivity is low, a new technology had been introduced and farmerswere adopting better practices than in other parts of the country.

1.25 Different views, however, were expressed in the PPAM and the PCR.The PPAM pointed out that, in contrast to experience in most Africancountries, the project cooperatives "seemed to be well on the way to becomingefficient farmers' organizations, managed to a large degree by the membersthemselves." The phenomenon was mostly attributed to (i) legislation whichfacilitated low-cost land reform by compensating land owners with sharesinstead of cash while leaving management authority to the workers and (ii) afair system of remuneration (wages and dividends) which increases payment tofarmers as the cooperative develops. The PCR was less optimistic, statingthat although an operating framework of cooperatives had been set up, -it wasdifficult to conclude that it had really taken root." The farmers who weremembers of a cooperative did not perceive themselves as owners of the oil

2/ OED Report No. 2053, dated May 15, 1978.

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palm plantations, responsible for for their success or failure. Rather, theplantations were regarded as places where remuneration was very low in rela-tion to work done, and farmers only sought employment there if no other wasavailable. The PCR also mentioned that the important concept of autonomouscooperatives was jeopardized by the fact that the cooperatives did notreceive an adequate share of the value of oil palm plantations. With a priceof CFAF 5 per kg of ffb (37Z of the net oil revenue), they could notadequately remunerate the cooperators' labor nor repay their debts.

1.26 The PPAR pointed out that SONADER had proven a remarkably effectiveinstitution and that an unusual feature of the project was that it had beenprepared and executed by a Beninese corporation, a completely Africanizedorganization, and with very little technical assistance. However, a recentGovernment decision to give up the integration concept and to have two dif-ferent a encies (CARDER for annual crops, and SONADER, now calledSOBEPALH,_3/ for oil palms) intervening in the project area was a matter ofconcern for the future of the project.

1.27 Finally, the PPAR mentioned that insufficient knowledge at apprais-al of local conditions and overoptimistic assumptions of labor avail-ability had resulted in difficulties with the maintenance of oil palms and anoverestimation of the benefits that the farmers could derive from theproposed annual crop system. Subject to labor constraints, farmers had notassessed the system in terms of its return per hectare- in which it wassuperior to the traditional system-but rather in terms of its return per dayworked, in which its superiority remained uncertain and probably smaller.

II. AGRICULTURAL IMPACT

2.01 On completion of the Hinvi Project, reports from the Bank and theother agencies were not unanimous on the subject of results. Whetherregarded as a success or a failure, however, the project was at all events aparticularly interesting case and an original development venture thatmerited close attention. Now, five years after physical completion, it isclear the project is a major economic and social failure, the manifestationsof which are examined below and the causes in Chapter III.

Oil Palm Program

2.02 At appraisal, since climatic conditions in the Hinvi region werenot ideal for the oil palm, potential crop yields on a plantation in fullproduction had been estimated at 8 t/ha. The Appraisal Report indicated thatyields would be approximately 50X of the yields obtained in the parts of

3/ SONADER was renamed SOBEPALH, but its functions were not significantlychanged.

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Africa most favorable to the oil palz 4 / and 30% of those obtained in SouthEast Asia. However, as rainfall was below normal levels during the earlyyears of the planting process, potential yields were revised down, first ofall to 7 t/ha and then to 5 t/ha. In actual fact, average yields between1973 and 1982 were around 2 t/ha, varying from 1.2 t to 3.1 t depending onthe particular cooperative (see Annexes 2 and 3 for details); this was 25% ofinitial yield estimates and 40% of corrected estimates. Generally speaking,the cooperatives in the south of the project region showed the worst resultsand those in the north the best. Of the ten cooperatives set up under theproject, the average annual production figure for the years 1980, 1981 and1982 was 13,437 tons of ffb, roughly 28X of the initial estimates.

2.03 The low yields are in part a consequence of the low rainfall, whichfor some years now has been characteristic of this part of Africa, but morethan anything else they reflect the neglected condition of the plantations,which receive virtually no regular maintenance and give a very poor output.The spread of grasses and weeds and the lack of pruning makes both harvestingand the transportation of ffb to collection points very difficult, andexplains why a proportion of the ffb are not even harvested. Seasonal laborshortages also explain why ffb are not harvested for weeks, even severalmonths in some cases. Finally, thefts of ffb, whether from the plantationsthemselves, from collection points or during transportation, are consider-able, so that a reduced volume of fruit reaches the mill, which then operatesat a third or half of its capacity.

Annual Crops

2.04 The annual crops program was designed to replace extensive withintensive cropping. Before the project was launched, the average familylandholding was 6.2 ha, about 2.8 ha of which was put under crops each yearand then left to lie fallow for some years. Natural oil palm stands andperennial crops (coffee, cocoa, bananas) were also present. The result ofcrop intensification was expected to be that a reduced area (1.4 ha net)would allow higher output than the then usual holding, thanks to the elimina-tion of fallow areas, introduction of a double-cropping system (agrain-legume rotation) and improved unit yields owing to the use offertilizers. Crop intensification also called for clearing of any remainingforest growth and uprooting of both perennial species and naturally growingoil palms.

2.05 It proved impossible to carry out this ambitious program.Restricted to a minimum surface area, farmers first took care of their basicfood needs by growing maize, which became a virtual mono-crop on the 10 ZOCAsmaking up the project area. The failure to rotate crops, combined withinadequate technical supervision and assistance and either the lack orexcessive cost of fertilizer, led to exhaustion of the soil, a drop in yieldsand a necessary return to the traditional fallowing system-all this even

4/ It is worthwhile noting, however, that yields in Western Africa arerarely more than 12 t ffb/ha.

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though family holdings had been reduced to a quarter of their former size.Animal traction was introduced and, though successful at first, failed in theend because farmers, since they had no access to credit, were unable toreplace animals or equipment. Altogether, yields were no better than 30% ofthe target figures. In addition, the old perennial crops and natural oilpalm stands, important sources of income, had disappeared. While the areaenjoyed a surplus of food products prior to commencement of the project, itis now by and large a deficit area. Many members of the cooperatives havehad to lease land outside the project zone in order to meet household foodneeds.

Stockraising

2.06 This component of the project was designed to produce income forthe cooperatives from beef sales on the local market and sales of tractionanimals to cooperative members, the necessary pasture being sown on the landput under oil palms. SONADER and USAID funds were used, beginning in 1966,to establish a herd of approximately 400 head, expected to increase to 1,000by the early 1980s. In 1983, the size of the herd was in fact 322 head (ithad reached 560 in 1976/77), with a high proportion of old females and toofew young ones. Deterioration of pastures, a lack of supplementary feed,periodic difficulties in watering the animals and generally poor animalhealth were the main reasons for a high mortality rate in the herd and itsdrop in size. The stockraising component was the responsibility of SOBEPALHalone (the cooperatives having no role at all in herd management); it hasbeen running at a loss for the last five years.

Reforestation

2.07 The aim of the reforestation component was to offset the loss offirewood caused by clearing operations and to produce income for the coopera-tives from the sale of teak building poles. A total area of 1,000 ha wasplanted, as projected, and management of this part of the venture, like thestockraising component, was the responsibility of SOBEPALH. Repeatedrefusals on the part of SOBEPALH to carry out cutting operations meant thatcooperative members themselves did so clandestinely in most reforested areas.

Conclusion

2.08 The agricultural impact of the project is considerably less thanwas projected at appraisal or later, at the time physical implementation wascompleted. This general deterioration over the last five years has affectedall aspects of the project (oil palm stands, annual crops, stockraising andreforestation).

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III. MAIN REASONS FOR PROJECT FAILURE

3.01 At the outset, the Bank recognized two constraints: the climatewas just barely suitable for the oil palm, and the intended collectivistapproach promised to be difficult. However, the Appraisal Report concludedthat the climate was suitable enough and that the effectiveness of SONADERwould overcome the human problems certain to be created by the establishmentof cooperatives. In practice, the natural environment, whether climatic orhuman, proved much more unfavorable and hostile than foreseen.

3.02 Hindsight shows that there were four major causes for widedifferences between initial expectations and final results: Mi) under-estimation of the constraints inherent in the natural environment; (ii)insufficient knowledge of the social and human context, which meant that aninappropriate development approach was used; (iii) the failure of thecooperative system; and (iv) management errors on the part of theinstitutions responsible for the project.

A. Under-estimation of Constraints

3.03 Averaging 950 to 1,000 mm in the south and 1,000 to 1,100 mm in thecenter, rainfall has been below the figure of 1,170 mm projected for thewhole project area. Only in the northern zone did the rainfall of 1,100 to1,200 mm come close ta initial estimates. Two additional factors also playeda part: the lengthening of the dry season and annual variations that weremore marked than expected. It is now clear that climatic conditions in theHinvi region were over-estimated initially and that project appraisalpersonnel were not aware of the differences between the north and southzones. It is also evident that the water shortage was worse from 1974to 1981 than from 1966 to 1973 (see Annex 4). The climate therefore provedto be even less suitable than had been thought originally, which explains whyaverage potential oil palm yields, first assessed at 8 tons of ffb/ha, werelater scarcely above 5 or 6 tons/ha. It is also very clear that poor rain-fall cannot provide a complete explanation of the average yields of 2 tons/harecorded for the last few years and that other limiting factors prevailed(para. 3.16-3.17).

3.04 The quality of soil was grossly overestimated, as well as thefeasibility of substituting intensive doublecropping for the traditionalshifting cultivation. The technical package, including the use of organicand mineral fertilizers, strict crop rotation and improved cropping tech-niques, had been successfully tested in research stations. It provedimpossible, however, to quickly introduce on a large scale. Increasing thecropping intensity without fertilizers or crop rotation finally led to soildegradation, low yields and the need to go back to the traditional shiftingcultivation system.

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B. Social and Human Environment

3.05 The social and economic characteristics of the Hinvi region weresunmmiaized in the Appraisal Report: high population density (62 inhabitantsper km2 ), growing by approximately 3Z a year; dispersed settlements; smallishholdings (averaging 6.2 ha in size, with 81% consisting of less than 10 ha),a quarter under crops and the rest fallow.

3.06 It was the size of the fallow area which seems to have determinedthe technical package of the project: intensive cropping, without fallow, on25% of the initial landholding would, theoretically, bring its owner as muchincome as he had before the project, at the same time making land availablefor the establishment of palm groves and for redistribution to landless farmworkers.

3.07 This line of reasoning proved to be simplistic and predicated onmisperceptions regarding the pre-project organization of family land-holdings. Annual crops certainly took up only 25% of a holding, but theremaining 75% was not left unutilized. Natural stands of oil palm(approximately 15/ha) were an important source of income for the women of therural population, who produced palm oil; in addition, they provided wood forfuel, crafts and building. Perennial crops (coffee, cocoa, kola nuts) werealso quite significant on the average holding. Finally, the system offallow and rotating crops was dictated by the fragility of the soils and theon-farm shortage of organic matter. The economic and social organization ofthe traditional family smallholding was characterized by diversified agricul-tural production, which gave a surplus and meant that there was an equitabledistribution of work and income between men and women (approximately 197days/year each).

3.08 The project was going to alter traditional methods of farmingcompletely and disrupt the existence of the smallholder family, which wouldbe confined to a reduced area denuded of the old perennial crops and wouldfind itself the obligatory holder of shares in a palm oil cooperative. Sucha drastic change was obviously going to be unwelcome to the population unlessit brought immediate and substantial advantages. However, what happened wasthe exact opposite. Technical failure of the annual crops and the low incomederived from the palm groves led to a general impoverishment of the popula-tion (para. 4.05) and simultaneous destruction of the traditional pattern oflife (paras. 5.03-5.05).

3.09 The obligatory regrouping of farmers into producer cooperatives wasnot viewed as an insurmountable difficulty in the Bank's Appraisal Report,since it rested on Beninese legislation dating from 1961 and already inforce. No critical analysis of the new system or the likelihood that itcould be successfully used in the Hinvi region seems to have been made by theBank at the time of appraisal. It became apparent, however, that the compul-sory cooperative system had no basis in any national or local tradition,contrary to assertions made at the time in order to justify its introduction(see Annex 5). The customary practices of 'donkpa- and ajolu' were ways oforganizing community work and the 'tontine' a mutual savings society. Butall these traditional forms of community activity and reciprocal help werebased on individual property rights. What belonged to the community was

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effort and work, but not the means of production or land. Pre-projectstudies showed that 64% of smallholders had obtained their land by in-heritance and 36% by purchase, so that land was an individual saleable goodand not a collectively owned one.

3.10 Project cooperatives were set up on a compulsory basis whichinvolved virtually expropriation of land and meant that cooperative membersdid not all enjoy the sarie status. Group A members were smallholders obligedto subscribe capital to the cooperative in the form of their land. Inexchange, they received shares whose value (CFAF 30,000 each) and theinterest they produce (3% per year) have never been adjusted.5 / MIoreover,they had no right to vote in the cooperatives and no share in their profits.These factors together constituted a major injustice in the eyes of themembers of the A group, who made up roughly 80X of the original members andwhose hostility to the project was evident from the outset. Since they con-sidered they had been plundered, very few (only 4%) of group A members agreedto work on the project and therefore to join the AB category. The massivedesertion from the A group meant that a salaried labor force had to berecruited, who would later on form the so-called users groups of thecooperatives.

3.11 In contrast, the group B members of the cooperatives were thefavored beneficiaries of the project: in exchange for 200 days of work ayear, they received a salary equivalent to 45Z of the annual minimum wage, aninterest-bearing share in the cooperative (value at CFAF 30,000), votingrights and the possibility of access to profit-sharing. Since the B groupconstituted only 20% of the membership, the system favored and condoned thedomination by the minority over the m.Jority of members.

3.12 In retrospect, it would appear that the approach of cooperativedevelopment suffered from the very beginning under a doub'le handicap: (i) itwas not in keeping with the soclal and economic characteristics of theregion6/ and (ii) it alienated the majority of members from the very start.This error alone largely explains the failure of the cooperative system andthe deterioration of the project.

C. Failure of the Cooperative System

3.13 Not only did the cooperative system rest on the unsteady founda-tions described above, but it also never had any real possibility offunctioning. Certainly, the Boards of Directors were made up solely of B andAS group members, elected by the cooperative. The Annual General Meetings,

51 In 1983 dollars, these values were approximately US$80 for a share andUS$2.4 in annual interest.

6/ Like so many other projects which have attempted a producer cooperativeapproach copied from foreign models. The following OED Reports, amongothers, are of interest: No. 3959 (Colombia: Atlantico Impact Evalua-tion Report) and No. 3514 (Senegal: Second Agricultural Credit PPAR).

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which consisted of all members, convened once a year. However, the role ofthese two bodies has always remained ambiguous and been limited to protectingthe interests of members vis-a-vis the central authorities and to thedistribution of profits and dividends whenever the cooperatives had a surplusfor the year. In practice, each cooperative was managed by its director,appointed by SOBEPALH and assisted by an administrative staff of ten. 7 /This group, paid by the cooperative but not under its control, provided thereal management of the cooperative, being responsible as well for theprogramming and execution of work.

3.14 On the national and regional planes, it was SOBEPALH which estab-lished production work norms, fixed the prices payable to the cooperativesfor their deliveries of ffb, decided salaries and provided the cooperativeswith the necessary accounting services. The cooperatives were therefore suchonly in name, and remained subject to the central authorities acting throughSOBEPALH.

3.15 It was stagnation in the wages paid for labor and the price paidfor ffb that would rapidly point out the fiction on which the cooperativesystem was based. Although the daily wage, CFAF 125 in 1968, was to rise toCFAF 200 by the end of the planting period, the increase was granted bySOBEPALH only in 1978, whereas wages had risen to CFAF 350 elsewhere and ashigh as CFAF 750 on State farms. Moreover, the price paid the cooperativesfor their deliveries of ffb was held at CFAF 5.68 for eight years (1975-82)even though the cost of inputs billed by SOBEPALH to the cooperativesincreased continually. Producer prices, which in 1972/73 amounted to 40% ofthe export price of palm oil, were equivalent to only 19% in 1981/82 (seeAnnex 5). Any hope of dividends the members of the cooperatives might havehad therefore became more and more remote.

3.16 Low wages and low or nonexistent dividends led to gradual desertionby the group B members of the cooperatives, whose shares (CFAF 30,000 each)had not been revalued either. Like their group A counterparts, group Bmembers have now lost all motivation and no longer work on the plantationsexcept intermittently. Moreover, since the work is poorly paid, they cut itdown to a few hours a day and their output is low. For the most part, theyeither concentrate on their own annual crops, look for work elsewhere oremigrate. Given the defection rate, as high as 72% from group A and 65% fromgroup B (see Annex 7 for details), the project resorted increasingly tosalaried laborers, who now go by the name of users" in the cooperatives andhave obtained voting rights. But at the wage levels offered, labor is moreand more scarce and erratic; it is only absolute necessity that driveslaborers to work on the plantations when there is no work elsewhere, particu-larly as the work is considered hard and dangerous by laborers. Under thecircumstances, the manpower shortage is chronic; the majority of laborers

71 Two extension agents for maintenance and the harvesting of ffb; 4 teamleaders; 1 or several foremen or caretakers; 1 cyclist for liaison withthe oil mill; 1 collection supervisor; 1 tally clerk; and 1 first-aid/veterinary assistant.

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want no more than 1-5 workdays a month and maintenance of the plantations isneglected.

3.17 Moreover, the theft of ffb from the trees, from collection areasand during transportation is frequent. The fruit is processed into oil on anartisanal scale, not only for family consumption but also for sale at threeto four times the official price. For some, this is a way of recoveringassets of which they have been robbed; for others, it offsets earnings thatare too low. The vicious circle whereby low output leads to low producerprices, which in their turn lead to low wage levels and theft (whichpartially explains the low output) has gradually become the norm and takenthe place of the "joyous group work in an atmosphere of friendly rivalry"8/that had been expected of the cooperatives. The survey conducted in early1983 for purposes of this impact evaluation report shows clearly to whatpoint members of the cooperatives feel exploited by the project and regardthe plantations as the property of SOBEPALH and not their own (Annex 8).

3.18 The failure of the cooperative system has often been blamed on theBeninese Government and particularly on SOBEPALH for never allowing the co-operatives their autonomy. It is true that the cooperatives were finallynever more than instruments for land redistribution and reservoirs of cheaplabor and that they were never authorized to govern themselves. However,SOBEPALH's role as management agent for the cooperatives was intended fromthe outset and is clearly mentioned in the Bank Appraisal Report, whichstates (para. 6.04) that the cooperatives were gradually to take over respon-sibility for their own management, but since they would be financiallyindebted to SONADER "the latter would exert a high level of direct controlover them for the first 25 years of their existence." The Report furtherstates that SONADER would also have the power to "dissolve the cooperativesin the event of unsatisfactory performance."

3.19 It is therefore clear that there were no plans to make the coopera-tives autonomous in the short term. However, despite the mistakes made inconnection with the composition of the cooperatives, which were mentionedearlier (paras. 3.09 and 3.10), one of the few opportunities to save thecooperative movement would have been to give it a certain degree of autonomyas soon as possible and to vest the Boards of Directors and Annual GeneralMeetings with real decision-making powers. This was not done and there wereno plans to do it until years had passed. The result is that the coopera-tive, as far as its members are concerned, is an extension of the state inwhich they feel they have no say and from which they can expect no benefits.

D. Management Errors

3.20 SONADER, which became SOBEPALH in 1975, was described in the Bank'sAppraisal and Project Performance Audit Reports as an effective institutionwith wide experience in agricultural development and the organization of

8/ -Le collectivisme: Instrument du Progres Economique," France-Dahomey,January 1960.

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cooperatives. Five years after physical completion of the project, however,the situation looks quite different.

3.21 It was in 1976 that SOBEPALH's position began to deteriorate. Theinitial cause was a financial crisis, reflected in the negative balancesheets for 1977 and 1978 and ascribable mainly to poor, and then very poor,palm grove output (105,000 tons in 1975/76 but 69,300 tons only in 1979/80,from all plantations supervised by SOBEPALE). Failure on the part of theState to reimburse investments financed in the first instance by SOBEPALH andthe fact that the latter was obliged to absorb three old and unprofitable oilmills with their full complement of personnel increased the agency's deficiteven further. It was the precarious nature of SOBEPALH's financial positionwhich initiated the process of deterioration. By underpaying for ffb andlabor, despite higher prices for palm oil and inflation, SOBEPALH distortedprices in order to save itself; at the same time, however, it condemned theproject to failure sooner or later. The project illustrates the importanceof a fai'r price policy and the danger of Government interference with marketprices for farm-inputs and products.

3.22 The second underlying cause of the financial crisis is theincreasing bureaucratization of the agency: its staff has grown in size from100 to over 1,500 in 12 years. The decision-making center is at head-quarters, in Porto Novo, where there is little contact with the field owingto the lack of means of communication and travel. Moreover, SOBEPALH doesnot have the option of dismissing surplus personnel, and its costs riseconstantly. Equipped with facilities and personnel for the processing andsale of 180,000 tons of palm oil per annum, the organization produces no morethan 70,000 tons. Although more and more of a bureaucracy, it produces lessand less, and finally personnel costs are absorbing most of the value addedin the oil palm sector (para. 4.04).

3.23 Equally serious has been SOBEPALH's very attitude to the coopera-tives. Far from being in favor of their gradual emancipation, theorganization has held them in virtual subjection and treated them withoutconsideration. Staff are appointed to the cooperatives by SOBEPALH but paidby the members, who, however, remain ignorant of the fact, although this itemrepresents 30% of the cooperatives' expenditure. Interest is paid to A groupmembers one or several years late. Some profitable cooperatives do notreceive their share of the profits. In 1981, disputes on questions ofauthority between SOBEPALH's mill director and director of plantations led toa truck stoppage and to failure to collect ffb, the only ones to suffer beingthe members of the cooperatives. Excessive centralization of the decision-making power in Porto Novo and the very size of the SOBEPALH bureaucracy meanthat requests and complaints from the cooperatives are passed on andconsidered only after major delays. For instance, cooperatives seekingapproval to buy oil from the mill for household consumption or to cut fire-wood or to sell cattle have to apply to headquarters, which responds veryslowly, if at all. It is therefore no surprise that the members of thecooperatives finish by "stealing" what they consider "their" ffb, "their"firewood and "their" livestock. The relations between SOBEPALE and themembers of the cooperatives resemble those between employer and employee,

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an attitude of grievance, with a trade-union flavor, having become permanentamong members.9/

3.24 It should be noted nevertheless that SOBEPALU began a seriousattempt in 1981 to improve management of the Hinvi area. Merging of thedirectorships of the nill and the plantations, which had been separate untilthen and the source of frequent conflicts, and general replacement of a dailywage rate by a piecework rate were two worthwhile reforms. In addition, theproducer price for ffb was raised to CFAF 7 per kilo in May 1982.

3.25 -o conclude, it would appear that some of the factors which explainthe failure of the project-ignorance regarding climatic conditions and thesocial context, in combination with a development approach ill-suited to thehuman environment-should have been apparent at the time it was designed.Throughout the execution period, SONADER's good performance and the adequatewage levels paid to cooperative members masked the ?roject's intrinsicdeficiencies, which made their presence felt only on completion of physicalimplemeutation, when the technical packages of the whole venture were seen tobe mistaken. At that stage, it would probably have been possible to remedythe initial errors partially by allowing the cooperative movement a chance tofunction on a healthy footing and in accordance with its real vocation.Unfortunately, management errors added a further problem, which compoundedthose already in evidence.

IV. ECONOMIC AND FINANCIAL IMPACT

Economic Returns

4.01 On completion of the project, the economic rate of return (ERR) wasre-estimated at approximately 5% on the basis of revised production outputfigures-7 tons/ha for the oil palm plantings and 50% less than the originalestimates for the annual crops. Actual oil palm output is difficult toassess because of thefts of ffb and the existence of parallel markets forpalm oil; in any case, it is well below both the initial estimates and therevised estimates given in the Project Performance Audit Report. As far asthe annual crops are concerned, the low cropping intensity (around 62%instead of the 200% envisaged) and poor yields mean that production hashardly reached 30% of the initial projections. Globally, the project ERR canonly be nil or negative, since sensitivity tests conducted at the time of theProject Performance Audit Report indicated that the ERR would fall to 2.5%and 0% with oil palm output figures of 6 tons and 5 tons per hectare respec-tively.

9/ The members of the cooperatives attempted to set up a trade union in1980, although it was rejected on the legal grounds that they were notemployed by SOBEPALH; among other things, they were demanding annualleave and social benefits.

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4.02 In addition, the direct economic effects of the project have beencalculated by FAC, which arrived at the following conclusions: the valueadded accruing from it represents approximately 0.18% of GDP; the taxrevenues derived from it total approximately 0.27% of all tax revenue; it hashelped reduce the trade deficit by about 1%. Clearly, therefore, the impactof the project on the Beninese economy has been negligible.

Financial Returns from the Cooperatives

4.03 Examination of the financial balances of the cooperatives (detailsin Annex 9) indicates that there was a global and continuing deficit until1981, when improved management practices in the Hinvi area seem to have takeneffect (para. 3.21). Some individual cooperatives showed positive balancesfrom time to time and one of them (the Agbotagon unit)lO/ nearly all thetime. For the majority, their deficit position signifies increasingindebtedness to SOBEPALH as well as an absence of dividends, something whichprecludes payment of any labor bonus, payment of any remuneration on B sharesand any possibility of going ahead with the collective investments envisagedinitially. The low wages paid, which should have an advantageous effect oncooperative balance sheets, are more than offset by the low producer priceSOBEPALH pays for ffb deliveries and by the costs of maintaining SOBEPALH-appointed management/administrative personnel, which are borne by thecooperatives.

4.04 FAC, which incorporated a study of the impact of the project on theBeninese economy into its ex-post evaluation report, concluded that grossvaije added amounted to CFAF 424.9 million, of which CFAF 89.6 million (21%)reverted to the cooperatives and the remainder (79Z) to the SOBEPALHcomplex. The report adds that this "allocation of value added between thecooperatives and SOBEPALH is not a matter of mill performance being betterthan that of the cooperatives; it is only the ffb price paid to the coopera-tives which determines this uneven division." Furthermore, the cooperativeworkers, who provide the largest body of labor for the Hinvi operation,receive only 26% of net value added, while management/administrativepersonnel receive 12%, support structure personnel 10% and mill personnel30%. At all events, 78% of project value added goes into the remuneration ofpersonnel.

Smallholder Income

4.05 The Bank's Appraisal Report estimated that a farm family, prior tothe project, could attend to its own food needs and produce a surplus of

lO/ Agbotagon lies in an area where rainfall is good. Moreover, data in-cluded by FAC in its evaluation report on the Greater Hinvi Projectindicate that the members of the Agbotagon cooperative are almost allresidents of the village of that name. Only five village houses aresituated within the expropriated area, while in other cooperatives thisfigure is between 40 and 50; this fact explains why thefts of ffb areless frequent there than elsewhere.

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approximately CFAF 12,000 (in 1966 prices) per year. As a result of theproject, money income would increase to CFAF 60,000, with CFAF 42,000 comingfrom annual crops, CFAF 16,000 from 80 man-days of labor on the p? ntationsand CFAF 1,800 from interest on A and B shares. Translated into 198L prices,money income was therefore estimated at approximately CFAF 48,000 pre-projectand CFAF 240,000 post-project. However, as the FAC study shows, the annualmoney income of a family belonging to a cooperative now varies between CFAF36,000 and CFAF 44,000 (for 40 and 80 manrdays of labor respectively on theplantations). This figure, no more than 16% of the initial projections,indicates a significant impoverishment of rural families by comparison withtheir pre-project situation.)-/

4.06 This impoverishment of the Hinvi population is reflected in theresponses given by 48 members of cooperatives interviewed in early 1983. Theheaviest losers are clearly the holders of A shares. For them, tne loss oftheir land can in no way be compensated by shares in a cooperative, thevaluation (CFAF 30,000 each) and paltry interest rate (3% per annum) of whichhave remained unchanged for 13 years.12/ But B group members have alsosuffered loss, since their cooperative shares generally produce no interestand their labor is underpaid. "Users," who have now become the majority inmost cooperatives, derive no more from them than the possibility of casualwork or a surplus of resources when their own farmwork has been completed.

V. SOCIAL INPACT

5.01 The project was designed not only to increase the ircome of theHinvi population but also to improve their living conditions by regroupingthe typical dispersed settlements into villages and providing medical andschooling facilities. To that end, village areas averaging 50 ha per co-operative were reserved. SONADER was to build the access roads and constructbuildings to house its employees, while the Government was to finance and setup the social infrastructure. The assumption was that the members of thecooperatives would establish themselves spontaneously in these rural centers,where they would find all the advantages their scattered dwellings hadpreviously kept them from. In actual fact, the end result was quitedifferent: roads and housing were built by SONADER, but the expected socialinfrastructure never materialized; the smallholder families have remained intheir old houses, scattered throughout the project zone and its palm groves,this last factor being something which facilitates thefts and clandestineharvesting of ffb.

11/ In addition, FAC considers that family income pre-project was underesti-mated in the Bank report and that current income, based on SOBEPALHstatistics, is overestimated.

12/ The market value of a hectare of land today is CFAF 80,000-120,000.

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5.02 Two other social activities were begun in order to improve livingconditions. One first-aid/veterinary assistant was appointed per cooperative(and paid by it), with the responsibility of providing care for both theworkers and their animals; however, since they have received no medicalsupplies for several years, these assistants have been unable to exercisetheir function, although the cooperatives have continued to pay them.Literacy instruction, originally welcomed by the population, has been droppedin favor of other courses through which participants receive World FoodProgram rations. FAC surveys have demonstrated that on the whole health andschooling have not progressed since 1966. Illiteracy is still 84% on averageand 92% among women. The only successes in this sphere have been achieved bythe Agbotagon and Goulo cooperatives, which have managed to strengthen bothschool and health infrastructures within their jurisdictions.

5.03 As noted earlier, the project caused a radical change in thetraditional mode of living of the population, which has grown by more than44% in 13 years (at an annual rate of 3%), from 36,000 to 52,000. Thisincrease has been uneven, however, and in parts of the zone the populationhas declined significantly. Furthermore, the adult male population isdeclining by comparison with the number of women, children and old people,indicating a particularly high emigration rate of men (Annex 10). (Accordingto surveys made in conjunction with this study, certain communities absorbedlarge numbers of persons expelled from Nigeria in early 1983). It is clearthat the disruption of the social status quo by the project has not beenoffset by the creation of attractive work opportunities, so that nothing hasbeen able to prevent the rural exodus and emigration.

5.04 The project has had a particularly adverse effect on the femalepopulation, women in fact being its main victims since the very beginning.Because of the reduction in the size of the average family holding, mostwomen have lost the use of the plot which, under the traditional system, theycultivated for their own profit. This disappearance of natural oil palmstands and fruit trees has deprived them of a major part of their craft-producing and trading activities. The manufacture and sale of palm oil,which had been one of the traditional occupations of women in the Hinviregion, has now become a clandestine operation dependent on stolen ffb. (Intheory, it is still possible to purchase ffb from the mill, but authorizationmust be obtained from SOBEPALH headquarters, which may take months.) Totalclearing of the land has wiped out the sources of the fuel wood required forcooking, and reforestation operations by the cooperatives have not yetprovided the expected replacements; collecting wood, traditionally women'sresponsibility, has therefore now become very arduous work. The carrying ofwater, another job falling to women, has not been made any easier, since thewells initially planned for the village reserves have never been built.

5.05 Deprived of their traditional activities, women have begun to workmore and more in the agriculture sector, in which in the past they occupiedonly a modest place. Their status is increasingly that of members of thework force; today they undertake nearly half the work of maintaining and har-vesting the oil palm, at wages still below those earned by men. They do thiskind of work only out of necessity and on an irregular basis. It should also

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be noted that, as a rule, women do not form part of the Boards of Directorsof the cooperatives and no women are found among their managerial/admini-strative staff.

VI. CONCLUSIONS AND OUTLOOK FOR THE FUTURE

6.01 In 1983, the year when the project was expected to have reachedfull production, it appears to be a major economic and social failure. Fiveyears ago, there was still hope of success in institution-building and in thesocial area, despite unpromising economic results; the original concept ofthe project, which envisaged a combination of benefits from agrarian reformwith benefits from greater productivity per capita and per unit of surface,still looked promising. After so many failures in the sphere of collectiveagriculture, the project seemed to indicate that success was at least withinreach.

6.02 Hindsight shows that financial flows during the investment phasetemporarily concealed the two main defects in the project, ignorance of thenatural and human environment and an inappropriate development strategy. Forthose few years, the wages paid in the course of implementing project invest-ments offset the losses sustained by the farming population. Promises of abetter future were an encouragement to participate. For some individuals,access to collectively-held property seemed preferable to the lot of thelandless farmworker. For others, the imperfections of the cooperative systemwere the errors of youth, which time would correct. The true facts, however,are brutal. The Einvi region is now impoverished: all population groups inthe project zone have sustained losses, and the only real beneficiaries ofthe project are clearly SOBEPALH's almost 1,500 employees, whose salaries areguaranteed whatever happens and whatever the outcome of their actions. Thetransfer of resources from a poor rural population to the civil service wasobviously not the goal of the project.

6.03 The recent studies of the Hinvi project have all led to the sameadverse conclusions and all propose the same remedy, namely improvement ofSOBEPALH management and the granting of management autonomy to the coopera-tives. The latter is regarded as essential, the expert opinion being thatthe cooperative concept has been distorted, has never had a chance tofunction properly and has encouraged irresponsibility among the members them-selves. Surveys carried out in the context of this impact evaluation haveshown that some members of Boards of Directors are firmly convinced that theywould have performed better than the supervising agency, would have beencapable of getting people back to work, preventing thefts and producingprofits for their cooperatives.

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6.04 In the present circumstances, there is indeed hardly any alternar-tive except to cut back the role and exorbitant cost of SOBEPALH13 / and tofoster self-management by the cooperatives. However, there can be no hidingthe fact that the obstacles are formidable. Undoing the damage done bySOBEPALH would mean meeting a long list of grievances held by the members ofthe cooperatives-increasing wages by 200 to 300%, revaluing the A and Bshares and increasing the interest rates associated with them, payingdividends and interest which have been unpaid for the last ten years,increasing the producer price for ffb significantly, declaring a moratoriumon the debts of the cooperatives and removing unproductive members of theirmanagerial/administrative staff. Moreover, group A members would undoubtedlyquestion the methods used to expropriate their land and the extent to whichthey have been discriminated against. Finally, in a self-managed coopera-tive, what would be done with the users,- actually casual wage-earnersinvested with a right of participation following the defection of the realmembers? And what steps would be taken to resolve the problem of plotsintended for annual crops but which are too small to provide sustenance forone family? In short, the risk of conflicts between members of cooperativesand the State, and more especially between members themselves, is very highand could make self-management extremely difficult, although it is now saidto be the only possible remedy.

VII. LESSONS LEARNED FROM THE PROJECT

7.01 By and large, the nearly 40 oil palm development projects financedby the Bank in 13 countries have so far been relatively successful (Annex11). Serious failures have been rare in the sector, and this is why theHinvi project gives cause for reflection, may be usefully compared with otherprojects of the same type and teaches important lessons.

7.02 The first lesson is that it is dangerous to launch an oil palmoperation in a zone which is both only marginally suitable from the viewpointof climatic conditions and relatively heavily populated. It was known fromthe outset that yields were likely to be low and unreliable, but, as is oftenthe case, things were more serious than had been thought. If the risk isworth taking in uninhabited or only sparsely populated regions (the case withcertain projects in Cameroon and Ivory Coastl4/), it becomes too great whenthe inhabitants number around 100 per km2, people whose livelihood may beseriously jeopardized.

13/ As part of the move to reform the oil palm sector in Benin, the Govern-ment dissolved SOBEPALH at the end of 1982, entrusting management of thesector to SONICOG (Societe nationale pour l'industrie des corps gras).

14/ Refer to the Impact Evaluation Report on oil palm and coconut projectsin Ivory Coast (Report under preparation) and the PPAR on the CAMDEV andSOCAPALM projects in Cameroon (OED Report No. 1752).

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7.03 ln addition, family landholdings in heavily populated zones arevery likely to be small. Therefore, putting large areas under oil palmscrowds out other crops, frequently food crops to which the African small-holder will generally give priority. In the course of its massive introduc-tion of the oil palm into the heavily populated Hinvi region, this projectreduced the average size of individual holdings, upset the food-producingequilibrium of the population and from the outset seriously disturbed thesocial basis of the community. Moreover, these adverse effects were worsenedby under-estimation of the benefits smallholders drew from their fallow landand by incorporation of completely unrealistic technical packages in connec-tion with annual crops. These negative factors added up from the beginningto a serious handicap to the project. By comparison, the satisfactoryresults generally obtained with oil palm (and rubber) projects in most of theother countries concerned (including Malaysia, Indonesia, Ivory Coast,Cameroon, Ghana, and Papua-New Guinea) can be traced very largely to the factthat plantation zones were completely, or very nearly, unpopulated. Thisbeing so, the projects could not cause serious economic and social dis-turbances, while the technical difficulties encountered with some of them hadno adverse effect on population.

7.04 The second lesson learned from the project concerns the importanceof the choice of development method and of the approach to the target popula-tion. The major question posed by the Hinvi project is this: once the deci-sion was taken to launch an oil palm development project despite the con-straints inherent in the natural environment, was the cooperative approachused the right one? As noted already, the principle of the producer coopera-tive had no basis in any local tradition and was in fact modeled on systemsin force in other countries. Furthermore, Bank experience with producercooperatives, especially in Africa and Latin America, had already demon-strated the limits and dangers of the system when this project was appraisedin 1969. While voluntarily organized service cooperatives (dealing withagricultural credit, provision of inputs, marketing, etc.) have often beensuccessful, imposed producer cooperative arrangements have generally failedbadly. Abandonment of the concept of private property and the pooling of themeans of production have rarely been looked on with favor by smallholde-rsanywhere.

7.05 The manner in which the Hinvi cooperatives were formed introducedadditional risks of failure. Land belonging to group A members was expropri-ated under conditions that under any circumstances could not approximateadequate compensation. Excluding group A members, by and large the majority,from the cooperative organizations converted them into a force systematicallyopposed to the cooperative principle. The tight control exercised bySOBEPALH, which allowed the cooperatives no opportunity to function normally,undermined all hope of fostering a cooperative spirit. Finally, the paltrywages and very poor ffb prices imposed on members of the cooperativesprovoked general hostilitv to a system that apparently made SOBEPALH into thesole beneficiary of the project.

7.06 Experience gained from other projects elsewhere in the world showsthat different means of developing the oil palm in Benin were available.

- 22 -

Other Bank-financed oil palm projects have taken one of three main develop-ment approaches: State farms (especially in Zaire and Cameroon), nucleusestate plantations surrounded by outgrower plantings (mainly in Indonesia,Ivory Coast, Ghana, Liberia and Nigeria) and establishment of small plantersin newly cleared zones (the so-called 'settlement" projects, numerous inMalaysia, Papua-New Guinea and Indonesia). Since there was hardly anyuncleared virgin forest in Benin, the second formula would probably have beenthe most suitable.

7.07 Had that approach been selected, the estate plantations-whichserve as the development core and produce the minimum crop to justify aprocessing plant-could have been established by SONADER/SOBEPALH either onState land or on privately-owned land expropriated in the proper manner. Theoil mill would have been built at the center of this agro-industrialcomplex. The outgrower plantings would have been established with assistancefrom the project authority by smallholders living adjacent to the estate andon only a part of their land. Since they would have participated in the pro-ject on an entirely voluntary basis, the majority of the social problemswhich dogged this project would have been avoided: the status of women wouldhave been better protected; the food-supply balance would not have been dras-tically altered; wages and prices would have kept up with market levels; andSOBEPALH would have focused its management practices on remaining competitivewith the parallel market in palm oil. Obviously, the handicap of unfavorableclimatic conditions would have been the same, but a drop in production outputto six or seven tons of ffb per hectare would still have kept the plantationsfinancially viable even if the project retained only marginal economic impor-tance to the country as a whole.

7.08 The Hinvi venture raised a third and equally important considera-tion: the future life of a project and the Bank's possible role in it oncethe investment period is over. At Hinvi, as in most cases, the Bank's rolecame to an end when loan proceeds were entirely disbursed. According to Bankpractice, a project is then regarded as complete and is no longer supervised;the final act is the issuance of the Project Performance Audit Report somemonths after the investment process has come to an end. The present impactevaluation, however, demonstrates clearly that the Bank could and should havehad an active role at Hinvi during the years following 'completion." One ofthe Bank's last recommendations while it still had a voice in the project wasthat ffb prices and wages should be increased so as to break the viciouscircle then just forming. No action was taken on the recommendation. Thesame went for the wish-expressed on several occasions- to see more autonomygranted to the cooperatives. However, completion of the project broke offall dialogue and put an end to the Bank's role in it.

7.09 Looking back, it would seem that projects should not be placedtotally outside the Bank's field of attention once they are considered com-plete. A project is not really complete until it has accomplished its objec-tives. When this is not the case, the fact should be more clearly acknow-ledged in the dialogue the Bank maintains with the Borrower through itseconomic and sector work.

- 23 -

Annex 1Annexe 1

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACT ECON0MIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Land Use by Cooperatives/Superficie des terres mobilisees par les dix cooperatives

(hectares)

Cooperative/ Oil Palms/ Annual Crops/ Village Reserve/ Reforestation/ Pasture/ TotalCooperative Palmier Cultures Zone de village Reboisement Paturage

a huile annuelles

Attogon 610 636 98 - 1,344Agbotagon 611 600 - 100 - 1,311Eanafin 601 610 95 100 89 1,495Koundokpo6 619 675 60 98 - 1,452Goulo 614 536 60 106 88 1,404S&dj, 601 660 86 107 - 1,454Adjan 601 601 60 115 78 1,455lrpo&-Kpanroun 603 630 - 105 - 1,338Dodji-Gb8to 622 690 - 105 - 1,417Dodji-Seha 604 625 100 120 120 1,569

6086 6263 461 1,054 375 14,239

Annex 2Annexe 2

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACT ECONOMIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Yields per Hectare on Cooperatives, 1973-1982/Rendement a l'Hectare des dix coopgratives pour la periode de 1973 a 1982

Cooperative/ 1973/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/82 Average Yield/Cooperative Rendement Moyen

Attogon 0,697 2,501 3,558 2,735 1,809 2,543 0,716 1,158 2t946 2,074Agbotagon 1,950 2,620 5,380 4,040 4,610 2,120 4,146 1,441 1,904 3,149Hanafin - - 2,078 1,574 2,081 2,571 1,286 1,924 5,264 2,386Kpoe - - 1,013 1,103 0,392 0,897 0,831 2,187 2,250 1,239Goulo 2,318 1,875 4,784 1,507 0,835 1,253 1,639 2,250 2,818 2,141Sgdja - 1,098 4,021 3,030 0,902 2,083 1,509 2,291 2,690 2,203Adjan - - 1,397 3,076 1,782 2,944 2,463 3,814 5,923 3,057Kpoe-Kpanroun - - 1,013 1,103 0,392 0,897 0,831 2,187 2,250 1,239Dodji-Gb6to - - 1,918 1,519 0,428 1,800 0,494 1,338 1,455 1,278Dodji-Saha 0,704 2,501 1,570 2,346 2,309 1,799 1,201 0,963 4,021 1,934Koundokpoe - 1,864 2,956 1,822 0,832 1,398 2,142 1,401 2,618 1,879

Source: Cooperative statistical records/Bilan des coopfratives.

U;nit/Unite: Tons of ffb per hectare/tonnes de rpf a l'hectare.

-25- Annex 3Annexe 3

INFACT EVALUATION REPORT/RAPPORT D'EVALUATION D' IMPACT ECONOHIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Yield Curve: Latest Estimates and AchievementsCourbe de Rendements: Dernieres Estimations et Realisations

(for the 14 cooperatives/pour les 14 cooperatives)

Taux/Rate Estimate/7 RendementlYieLd _stimations

Wtha)

6~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

2 / / / ~~~~~~~~~~~~~~~~a] isations5 O ., | , , , , , ,~~~~~ * I I

5 6 7 8 9 10 11 12 13 14 15 Ann3es

Source: Rapport d'eivaluation retrospective du FAC1

FAC Evaluation Report.

- 26 -

Annex 4Annexe 4

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACT ECONONIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Annual Rainfall Deficit in Pobt/Deficit hydrigue annuel a Pob&(1966-1981)

1966-1973 1974-1981Year/ Deficit/ Year/ DeficitAnnee Deficit Annie Deficit

1966 406 1974 5411967 715 1975 5571968 344 1976 9771969 617 1977 9711970 532 1978 6001971 876 1979 4991972 526 1980 3651973 587 1961 474Average/Noyenne 460 623

Source: Review of the Oil Palm Sector, Booker AgricultureInternational Limited.

- 27 -ANNEX 5Page 1

IMPACT EVALUATION REPORT

BENIN: HINVI AGRICULTURAL PROJECT(CREDIT 144-BEN)

Social and Economic Characteristics of Hinvi Region

1. Social Organization

The three ethnic groups inhabiting the Greater Hinvi Region allpossess the same forms of social organization, a characteristic of which isthe fragility of the traditional political power. Outside Togoudo andAllada, which in the past played an important political role as the centersof a powerful kingdom from which came the Princes of Abomey, Porto Novo andSavi, overall political power is held by the religious chiefs, who exercisethe most important social functions. In the exercise of their power, thesechieftain-priests rely primarily on the chiefs of clans and lineages. It isthe latter who provide political direction for their own groups.

This is a very simple, and sometimes very fragile, type of politi-cal structure. The lack of a well-organized central political power providesone explanation of the dispersed settlement pattern commented on in thisreport.

The other elements in local social organization are the varioussocietal links. Instances of these can be seen in two kinds of organizationwhich bring the inhabitants together outside any rigid political structures:these are associations of an economic nature that exist for the purpose ofmutual help, and are known as the 'ajolu" and the 'tontine." Found in almostall hamlets, they are open to the inhabitants of the locality without dis-tinction of age or sex. Anyone may call on them for assistance with farmproduction work or house building, but in return must provide the memberswith food and drink.

The ajolu is an agricultural society. It is a fixed group,organized on the principle of reciprocity. Following a pre-established time-table, the members gather on each holding by turn to carry out the samamount of work. There is neither division of labor nor any collectively-owned property. The major advantage of the system is the camaraderie andmutual encouragement associated with teamwork. Ajolu societies in thisregion are formed by age group and sex.

The tontine is a savings society and is also of great importance.Each member pays in a fixed sum at set intervals; following a pre-arrangeddrawing order, the sum collected goes to each of the members in turn. Theduration of the tontine and the size of the contributions to be paid in aredecided by the members of the group. The duration may be anything from fivemonths to ten years, according to need, and a contribution may be anything

-28 - ANNEX 5Page 2

from CFAF 100 to CFAF 1000, or sometimes more. There are two kinds of ton-tine, one calling for a contribution of money and the other for the contribu-tion of imported alcoholic beverages (rum, gin, whiskey, etc.). In bothcases, the idea is to be able to make investments which exceed the capacityof an individual.

Tontine societies are extremely important in the rural economysince they provide the only means of collective saving.

A tontine is organized by a volunteer committee headed by a presi-dent, one or two vice presidents and a treasurer who enjoy the trust of themembers. A standard fee of CFAF 10 to 20 is paid to the directors of thetontine as compensation. This detail is noted because it shows how highlyconscious this society is of the notion of remuneration for services.

The tontine and the ajolu are primary forms of the common poolingof resources, and provide points around which the cooperative spirit could befostered. These forms of mutual help aside, however, the fragility of thetechniques of social and political integration, heavy population pressure anda dispersed settlement pattern have worked against the development of acooperative spirit, having clearly tended to foster individualism. Neverthe-less, prior to the vote on the legislation of 1961, several articles werepublished in different national newspapers in an attempt to vindicate cooper-ative action.

Two instances may be cited here: an article by the Frenchsociologist Jacques Lombard which appeared in France-Dahomey for January1960, under the title Le collectivisme, instrument du Progres Economigue; andanother, by the Beninese ethnologist Tidjani Serpos, entitled La cooperativedans le folklore traditionnel, contes et proverbes.

These authors both refer extensively to the "donkpa.- According toJacques Lombard, this instance of collectivization is 'joyous group work inan atmosphere of friendly rivalry which puts the group under a type of socialconstraint favorable to output."

The custom of the donkpa is no different from that of the ajolu.The reality behind both is recognition and conservation of individualproperty. In the common pooling of effort, each member of the community cankeep an accurate tally of his advantages.

The cooperative structure first launched by the original SONADERwas a long way from these customary practices, which did not go beyond thesimple framework of groups concerned with mutual help. As groups, theypooled only effort and labor and not the means of production, which alwaysremained private individual property. Furthermore, each mutual-help societyenjoyed complete autonomy; it did what it wished without any outsideinterference.

-29- ANNEX 5

Page 3

The farm-management cooperatives, for their part, arepara-administrative structures in which smallholders learn to followdirectives from above. Under this new system, a member of a cooperative,through the theories and techniques of farming presented to him, begins tofeel disconnected from his old, familiar world. To be a member of acooperative means essentially to go back to school. In the circumstances,the different stages of training and consciousness-raising through which themembers of the cooperatives were put had the effect of so many constraints,something which severely jeopardized the success of this experiment.

2. Economic Features

The major economic activity in the Hinvi region is farming. Almostthe entire population is engaged in it, even women, who would generally bedrawn more to the other sectors such as trading.

The base for this agricultural activity is land, and the way landis used is largely a question of how it was appropriated.

According to customary law, the first occupant of a tract of land,if he has worked it for 10 or 20 years, is regarded as its owner. The landbelongs to the clan, but it is the family which settles the order of rankingamong heirs. By now, almost all the land has been appropriated, initially bythose who established themselves as conquerors at several points in the Aizoregion, thus becoming its masters. This explains why terrain located in thedistricts of Agon, Agbotagon, Ouagbo, Hinvi, Attogon and a part of Adjanbelongs to Fon families which originated in Ouagbo or Allada or Abomey.

Starting with this annexation of a good part of the Aizo region bythe Fon, the remaining areas, held collectively by lineages, have beenappropriated by individuals, usually heads of extended families.

So the landholding pattern is one of small enclaves which passconstantly from family to family in the wake of matrimonial alliances andbonds of friendship.

The concept of collective property does not exist in thisenvironment, except for the zones reserved for housing, where the owner ofthe house is the person who has built it.

As a general rule, appropriation of land by family or individual iseffected in this region in one of several ways: by inheritance, gift, lease,loan, pledge or purchase in kind. All six methods function very well in thismilieu, although pledge, lease and sale appear to be the most widespreadmeans of transfer.

Under a pledge arrangement, a landowner who needs money offers hisland as collateral for a loan, the creditor acquiring the right to work theland until such time as the borrower pays his debt. More often than not, thedebtor never manages to repay. The pledge system is often used-especiallyby traders and administrative workers-to build up holdings in land.

-30 - ANNEX 5

Page 4

Leases are used by landowners short of money who are prepared tolet their fields in return for payment of an agreed sum plus interest for acertain period. In this case, the lender has the right to the crops producedon the land and any wood obtained in the course of clearing operations, whilethe owner retains title to all fruit trees.

Sale has become the most common means of transferring land. Themajority of cooperative members interviewed obtain new land by this method.The prevailing price is geared to the kantin, the unit of land measurementmost widely used on the Allada plateau. The kantin is equivalent to 400 m2

and sells in the region for between CFAF 4,000 and CFAF 6,000, putting thepre-hectare cost between CFAF 80,000 and CFAF 120,000. This price for landis clearly well above that at which cooperative land has been rented by theState, namely CFAF 30,000.

These methods of acquiring title to land have had a tremendousinfluence on the way farming operations are conducted, since there has beentoo much land subdivision. The average size of the household plot today isbetween 0.5 and 2.5 ha. Approximately 83X of holdings fit within thiscategory. The remaining 17Z consist of more than 2.5 ha. Of the 18 Group-Acooperative members interviewed, four belonged to the first group and 14 tothe second. Exceptions were the three large estates held by the Meiderosfamily at Houezee, the Quenum family at Djigbe and the Agbota family aroundthe village of Agbotagon; each of these landholdings contains over 200hectares. l/

The predominance of small plots reduces the range of possiblecrops, now limited to maize, groundnuts and cow peas. Coffee, importantprior to oil palm development, is in uninterrupted decline. Its place isbeing taken by citrus fruits (pineapples and oranges) and particularly byteak, currently very profitable to smallholders as a result of heavy demandfrom the urban building trade.

The over-fragmented landholding pattern weakens agriculturalproduction to some degree because individual holdings are below the profitand modernization threshold. It is for this reason the state is more andmore intent, in regions like Hinvi, on developing cooperative structures,which it views as the only framework capable of giving small farmers aminimum of technical assistance and financial support.

Despite everything, including the reduced size of their farms,smallholders in this region today who took on their own account are farbetter off than members of cooperatives, whose living conditions haveremained unchanged since the project was first launched, although the priceof maize per kilo has gone up from year to year. According to survey

1/ Parts of these large farms have been commandeered by the State for theestablishment of teak plantations (Quenum), plantings of selected oilpalm (Agbota) or state farms (Meideros).

- 31 - ANNEX 5

Page 5

results, a kantin under maize has brought in about CFAF 10,000 per seasonsince 1980-in other words, approximately CFAF 250,000 per hectare. Over thesame period, the annual income of the member of a cooperative has been onlyCFAF 65,000. This earnings gap between the independent smallholder and themember of a cooperative explains the disaffection of the latter to thecooperative system and his abandonment of the land area managed by thecooperative.

The analysis given above of the bio-graphical features of theGreater Hinvi Region demonstrates clearly that the environment within whichthese attempts at oil palm development were carried out is a fragile one,from both the natural and human standpoints. There are climatic and socialconstraints, for instance-in particular, heavy population pressure,scattered settlements and a severely fragmented pattern of land subdivision-all of which handicapped the development program, harming the interests notonly of the State but also of the smallholder families affected.

The matters discussed above also explain in part the problems thatare likely to arise in the management of cooperative blocks.

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACT ECONOMIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

SOBEPALH: Cost of ffb as a proportion of total sales/Evolution de la part du prix d'achat des regimes dans le total des ventes de la SOBEPALH

(in CFAF millions/En millions de FCFA)

75/76 76/77 77/78 78/79 79/80 80/81 81/82 a/

1. Purchases of FFB/Achat desr6gimes 663.5 449.6 283.4 261.2 339.4 348.3 523.4

2. Sales palm oil/Vente huilede palme 1937.7 1143.8 1040.7 996.7 1229.3 2168.0 2524.4

3. Sales kernels/Vente palmiste 154.5 194.2 96.9 125.5 1?0.7 148.4 209.64. Total sales/Total ventes 2092.2 1338.0 1136.9 1122.2 1360.0 2316.4 2734.0

Proportion/Rapport 1/4 31.7 33.6 24.9 23.3 25.0 15.0 19.1

a/ Estimated/estimations.

Source: Caisse Centrale de Cooperation Economique (mission data).

Ii

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D' IMPACT ECONOMIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Different Worker Groups within the Cooperatives as of April 1983/Les differentes categories de travailleurs A l'interieur de chaque coopErative en Avril 1983

Shares/Parts A Shares/Parts B Shares/Parts AB Users/Usagers

Cooperative/ Initially/ Currently/ Initially/ Currently/ Initially/ Currently/ Harvest/ Maintenance/Cooperative de depart en activitf de depart en activit6 de depart en activith A la A l'entre-

r6colte tien

Attogon 482 0 273 50 8 5 140 300Agbotagon 401 0 136 50 26 26 40 120Hanafin 505 140 52 20 19 6 60 200Koundokpoe 528 0 60 59 27 27 30 80Goulo 281 2 122 50 14 11 80 200Sadj8 409 0 70 20 14 11 150 20fAdjan 529 370 189 116 27 27 few/faible few/fai.-'.;;Kpof-Kpanroun 418 352 157 80 18 17 70 30Dodji-Gb6to 691 0 84 30 11 8 - _Dodji-SAhA 496 0 167 10 32 3 77 200

Total 4,740 864 1,310 465 195 140 647 1,130

Source: Field survey/Enquete sur le terrain.

;34 ANNEX 8Page 1

IMPACT EVALUATION REPORT

BENIN: EINVI AGRICULTURAL PROJECT(CREDIT 144-BEN)

Worker Reactiun to the Cooperative Experience

What will be examined here is primarily a reaction to the materialconditions prescribed by the supervising agency. Although those conditionsmay be the same in every case, reactions differ depending on what category aworker belongs to; members of Boards of Directors, ordinary members ofcooperatives, -users," all have different interests to defend.

A. Viewpoint of Board Members

This viewpoint was reflected in answers to the following questions:is the part you play what you would like it to be? If not, what do you

think you could be doing?'

Although answers received were not always unequivocal, considerablemention was made of the ambiguous nature of the role of the Boards ofDirectors, which, in the opinion of Board members, seemed to be to enable thesupervising authority to settle problems in the rural environment moreeasily. In support of this contention the Board members interviewed saidalmost unanimously that decisions coming from above on plantation mainten-ance, dissemination of new working methods or recruitment of manpower werealways carried out. On the other hand, grievances expressed at the grass-roots level and transmitted upward by the Boards were not often taken intoconsideration. This state of affairs undermined the position of the Boardmember in his own milieu to some degree. Most Board members felt they werein a difficult position with their comrades. Antagonisms sometimes rosewhich only damaged the cooperative spirit. Conflictual situations haddeveloped to quite an advanced point in the cooperatives at Dodji-Gb&to,Kpo&-Kpanroun and Dodji-Sah4.

One almost unanimous opinion among the ten Board members interview-ed was that the cooperative units should be selt-m&'aging. None of the Boardmembers regarded his cooperative as the property of the community group; asfar as everyone was concerned, the cooperative belonged to the supervisingauthority. On this score, some interesting analyses were made at Agbotagonand Dodji-Saha on the ffb price per kilo, the way in which rroduction tonn-ages are calculated for each cooperative and the expenditures statements foreach fiscal year.

On the subject of the ffb price per kilo, all Board members thoughtthat if they had real control of their cooperative they would be able toimprove this price by exploring other markets-in Nigeria, for instance. Thefullowing is a verbatim account of an incident related in support of this

~ 35 - ANNEX 8Page 2

poaition: "We had an interesting experience here in Sehe. When the Hinvimill was being overhauled in 1982, we sent two and a half tons of ffb to themill at Houin-Aganey, which was to process the fruit from our cooperatives.Our ffb were returned to us for not being ripe. We then sold them on themarket for CFAF 96,000, although the price we would have got from the millwas only CFAF 17,500. This single instance gives some idea how we areexploited by SOBEPALH.- And as one member of a cooperative put it: -if wehad a free hand, the members certainly wouldn't be having losses like this.'As far as recording production tonnages for each cooperative unit is concern-ed, members of Boards of Directors believed it would be fairer if weighingtook place within the cooperatives themselves rather than at the mill, wheremathematical errors can be made to the detriment of the cooperatives.

On the subject of the statements of expenditures, all thoseinterviewed said theirs was always returned to them altered. New columns ofexpenditures often appeared, sometimes higher than those actually incurred.

These three examples show very well how little control members of acooperative have over its management; they highlight the major problems ofthe cooperative system perfectly.

B. Reaction of Group-A Members of Cooperatrves

This group of workers is generally mature. Out of 18 members ofcooperative A-groups interviewed, 14 were over 50 years of age; only 4 werebetween 30 and 50. This is probably reflected in their reactions, which havehardened with time. Inquiries show them to be the heaviest losers in thegroup. Most of them ceded extensive tracks of land to the project, receivingin return no more than little plots of ground which are difficult to workprofitably.

We encountered five who were veritable 'bourgeois" landowners todayreduced to poverty. These formerly rich men, when asked the question 'Areyou better or worse off now than before the project", simply pointed to theremains of their old possessions-the ruins of a mill, a once fine but nowramshackle house and large tracts of unoccupied land.

Their losses are not limited to land and material assets. Aboveall, they have lost influence in their communities, beginning with their ownchildren, who, believing they would profit from cooperative structures,voluntarily withdrew from under parental authority, or, lacking land of theirown to work, left the family environment as part of the rural exodus.

It is among members of the A group that the reaction is mostvisible. Their great nostalgia for the past means that they identify theproject as the cause of their impoverishment. In their view, what isnecessary is to forget the cooperative experiment and return to the old ways,sharing out the plantation blocks in a pro rata fashion based on the size ofthe areas members originally ceded to the cooperative.

~ - 36 - ANNEX 8Page 3

C. Reaction from group-B Members of Cooperatives

By comparison with their A counterparts, the members of this groupare young, the majority between 30 and 50. Among the 18 participants in theinterview sample, 13 were under and 5 were over age 50.

Most of them have plots in the ZOCAs and are satisfied w'th them.

Their main problem is low wages. They always compare their wagesto those earned by the free smallholder, who hires himself out as a simplefarm hand to local landowners. He receives CFAF 500 for tilling one kantin(400 m2). As he is able to till 4 kantins a day, he returns home at nightwith CFAF 2,000 in his pocket. This prospect is very tempting and explainswhy group-B members are prepared to leave the areas worked by their coopera-tives and become farm laborers themselves. They return to work on thecooperative blocks only when there are no jobs available elsewhere. For thisgroup, which should provide the driving force behind their cooperatives, workwithin the cooperative becomes a secondary consideration.

When asked if they think their present situation is better or worsethan before the project, they all say no. The only ones in the group whoremain full members of their cooperatives are those in the Boards ofDirectors, but they are prevented from deserting only by a feeling of responrsibility. Obviously, therefore, their criticisms of the cooperative systemare among the most severe.

Within the group, it is the members of Boards of Directors who arethe heaviest losers. They get no vacation and no time to attend to their ownaffairs. Moreover, they are expected to look out for and curb thefts of ffb,when the thieves are none other than their own poorly paid comrades. Onetherefore understands very well that they prefer to supervise the networkrather than destroy themselves socially for the good of an experiment theworth of which is, in the end, a matter of conjecture.

D. Reaction of -Users"

Members of this group are the same age as those in group B. Tmenine interviewed were under 40. Their existence is a consequence of thedesertion by the real members of the cooperatives, which made it crucial tofind substitute manpower for plantation maintenance.

However, even without the desertion, it would have been necessaryto resort to this third group in view of the increasing age of the group-Amembers.

At present, users predominate in the cooperatives (see Table 5) andare their most forceful element. They too look for work on the oil palmplantations in order to earn extra income after they have attended to theirown farming or trading activities. Among them, only the women are active ona permanent basis.

ANNEX 8Page 4

Unlike the full-fledged members of the cooperatives, users aresatisfied with existing arrangements, which allow them an opportunity to earnadditional income and provide a barrier against under-employment in the ruralworld. They would be much better satisfied if wages were higher.

In conclusion, there was very little favorable reaction to theexperiment. Actual cooperative members interviewed were unanimous instressing the decline in their material and social position by comparisonwith the past and with members of their world who were not participants inthe cooperatives- a state of affairs that compromises the future of the HinviAgricultural Project.

'Can anything be done to improve the current situation, at leastsomewhat?" This question was put to the workers themselves, in the followingform: -Would you like to see a continuation of the cooperatives, and in youropinion what are their prospects for the future?" Responses were extremelyvaried. Of the 48 individuals interviewed, 21 wished to see the currentsituation improved by:

- an increase in land rents;

- an iLcrease in the daily wage rate;

- rehabilitation of the ZOCAs that have become unproductive for lackof fallow and fertilizers by authorizing tree plantings;

- regular payment of dividends whenever there is a surplus for thefiscal year.

Six other respondents found the present situation acceptable andsuggested no changes; four wished to see the cooperatives turned into statefarms, a point of view with considerable support on the Boards of Directors;two asked for dissolution of the cooperatives and redistribution of theirlandholdings to the former owners; two had no confidence in the cooperativesand expected their future to be anything but brilliant; thirteen intervieweeshad no opinion one way or the other.

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACT ECONOMIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Profit and Loss Statement of the Cooperatives from 1977-82/Bilan des coopfratives de 1977 a 1982

(In CFAF/en FCFA)

1977 1978 1978 1979 1979 1980 1980 1981 1981 1982

Cooperative/ Profit/ Loss/ Profit/ Loss/ Profit/ Loss/ Profit/ Loss/ Profit/ Lose/Coophrative B6n6fifce DSficit B6n6fice Deficit B6n6fice D6ficit B6n6fice D6ficit B6n6fice D8ficit

Attogon 1,744,577 194,240 2,654,825 4,867,359 1,743,052 WAgbotagon 3,822,632 2,495,949 7,662,448 3,303,664 4,871,231Goulo 6,983,114 2,485,955 1,293,473 3,406,160 2,261,323Saha 239,453 2,214,721 2,477,402 1,199,147 4,505,380Koundokpo6 4,382,711 2,549,390 665,586 3,612,112 1,572,926SBdja 5,229,518 342,392 1,046,303 3,426,921 8,918,070Adjan 2,566,284 94,879 1,286,515 8,720,250 9,384,417Hanafin 3,688,087 374,610 2,130,497 5,702,259 10,168,600Gb6to 7,304,279 2,625,745 5,897,527 5,628,193 6,221,116Kpof 6,452,986 5,041,163 3,665,825 1,252,168 8,618,352

Total 3,822,632 38,591,008 3,502,070 14,916,874 11,745,046 17,035,355 33,269,908 35,398,736 14,839,468

Source: Field survey/EnquSte sur le terrain.

ii.MM

- 39 -

Annex 10Annexe 10

IMPACT EVALUATION REPORT/RAPPORT D'EVAIUATION D'IMPACT ECONONIQUE ET SOCIAL

BENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI(CREDIT 144-BEN)

Composition by Age and Sex of the 5 Rural Communities in the Hinvi Region/Structuree par Age et par Sexe des Cing Communes Rurales de la Region d'Hinvi

Rural Coumtnity/ Age Groups/ Structure par Age (Z) Males/100 Females/Co-mune rurale Hoinmes/100 Femes

Age 0-5 6-9 10-14 15-49 504 15-49 50*- Total

Adjan Total 26 13 7 35 18 68 94 88Men/Hormes 13 7 4 14 9Women/Feres 13 6 3 21 9

D.Bata Total 26 15 9 37 13 56 103 84Men/Hormes 13 8 5 13 7Women/Feres 13 7 4 24 6

Sedje D.Total 25 14 10 39 13 71 102 93Men/Horns 12.5 8 6 16 6Women/Feres 12.5 6 4 23 7

Dame Total 27 13 9 38 12 69 114 90Men/Hommes 13 7 5 15 6.5Women/Feres 14 6 4 23 5.5

Houegbo Total 25 15 12 40 9 74 113 93Men/Hommes 12.5 8 6 17 5Women/Ferns 12.5 7 6 23 4

Ensemble Total 26 14 9 38 13 67 105 90Men/Hormes 13 7.5 5 15 6.5Women/Feres 13 6.5 4 23 6.5

Source: FAC Ex-post Evaluation Report/Rapport d' evaluation retrospective du FAC.

-~ ~ ~ ~ ~ ~ ~ ~~~~~~4 -

- 40 - annexe 11Page 1

IMPACT EVALUATION REPORT/RAPPORT D'EVALUATION D'IMPACTBENIN: HINVI AGRICULTURAL PROJECT/PROJET AGRICOLE D'HINVI

(CREDIT 144-BEN)

Bank Contribution to the World Oil Palm/Coconut Sector

The World Bank Group has helped finance 40 oil palm and coconutdevelopment projects in 13 countries (see list below). Some of these pro-jects also include a rubber or other tree-crop component (projects focusingexclusively on rubber-groving are not included in the list) There is a coco-nut component in only nine of the 40 projects where oil palm predominates.By the start of 1983, the Bank had lent more than US$900 million to the oilpalm/coconut sector.

Eighteen projects (45Z of the total number of loans), representingUS$270 million (29% of total lending to the sector), were carried out inAfrica. Twenty-one projects (53%), representing US$640 million (69Z), werein Asia and one project (2%), representing US$19 million (2Z), in LatinAmerica. The largest borrowers in the sector were, in order: Malaysia (10projects), Indonesia (8 projects), Nigeria, Cameroon and Ivory Coast (4 pro-jects each).

The development strategy based on estate plantations surrounded byoutgrower plantings was adopted in Ivory Coast, Ghana, Liberia, Nigeria andpartially in Indonesia. Estate plantations predominated in Cameroon, Zaire,Panama and some regions of Indonesia. A strategy focusing on small planterswas implemented in Benin, Malaysia and Papua-New Guinea, project goals in thelast two countries being to clear virgin forest and settle farm families.

The Bank issued performance audit reports on 18 of the 40 projects(1 in Benin, 1 in Papua-New Guinea, 2 in Cameroon, 3 in Indonesia, 4 inIvory Coast, 4 in Malaysia, 1 in Ghana and 2 in Nigeria). On completion, allexcept those in Benin and Nigeria were considered successes, with economicrates of return well above 10% and often higher than estimated at appraisal.Since the prices obtained for the oils produced were higher than projected,they generally offset cost overruns. The Benin project, with an ERR of 5Z,was an exception, but on completion its social impact was considered enoughto have made it worthwhile. The two projects in Nigeria had negative ERRsand failed, partly because of certain of the country's internal problems andpartly because organization in the oil palm sector was not integrated. TheNew Britain Smallholders Project in Papua-New Guinea was the subject of animpact evaluation report, as are projects in Ivory Coast at the moment.

In the great majority of cases, beneficiaries were granted loans foroutgrover plantings. The problem of credit recovery was universal, althoughvarying in degree, except in Papua-New Guina, where early, high yields madeadvance repayment possible, and in Malaysia, where growers are under the

-41 - Annex 11

Page 2

authority of the State company (FELDA) which guides and supervises them untiltheir debts are fully repaid.

The 22 projects still being implemented are affected by politicaland economic difficulties in some countries (Nigeria and Zaire) and by lowerworld prices for vegetable oils.

- 42 -

Annex 11Total aount Approx. Area planted/replanted Page 3

Number of loanstcredits (ha)Region projects Z (US$ illions) Z Estate Outgrower

plantations plantin8gAfrica 18 45 270 29Asia 21 53 640 69Latin America 1 2 19 2

Total 2I0 100 I2i 100 330.000 170,000

Amount of Effective date/Project loan/credit closing date Project Description

AFRICA

Benin Cooperative oil palm plantings (16,000 ha); constructionviuvl (Cr. 144) 5.2 1969-76 of oil mill.

Caseroon1st CAMKEV Project(Loan 490 and Cr. 100) 18.0 1967-73 Estate and outgrover plantings (6,350 ha).lat SOCAPALU Project(Loan 593 and Cr. 886) 9.6 1969-74 Estate and outgrover plantings (8,660 ha).2nd CAMDEV Project (Loan 1508) 15.0 1978-82 Estate oil palm (600 ha) and rubber plantings.2nd SOCAPAL Project (Loan 1392) 18.0 1977-82 Estate and outgrover oil palm plantings (7,000 ha).

CmorosCoconut Project (Cr. 1035) 5.2 1980-86 Rehabilitation of coconut plantations.

Ivory Coastlot Oil Palm and Coconut Projec. Estate (4,000 ha) and outgrover (12,000 ha) oil palm(Loan 611, 612 and 613) 17.1 1969-75 plantings; estate (3,500 ha) and outgrower (3,000 ha)

coconut plantings; construction of oil mlU2nd Oil Palm and Coconut Project Outgrower oll palm (4,500 ha) and coconut (4,500 ha)(Loans 759, 760) 7.0 1972-79 plantings and estate coconut (8,000 ha) plantings;

contruction of oil will3rd Oil Palm Project (Loan 1036) 2.6 1974-77 Outgraver (5,000 ha) and estate (5.250 ha) oil palm plantings.4th Oil Pa1 and Coconut Project(Loan 1382) 35.8 1980-86 Estate oil palm (6,258 ha) and coconut (6724 ha) plantings.

Oil Palm Project (Cr. 531) 13.6 1976-83 Estate (4,000 ha) and outgrover (1,200 ha) oil pala plantings;construction of oil mill.

LiberiaDecoris Oil Palm Project Estate (5,000 ha) and outgrover (2.500 ha) oil palm plantings;(Loan 1765) 12.0 1981-87 construction of oil mill.

Nigeria1st Oil Pal Project Estate (8,000 ha) and outgrover (8,000 ha) oil palm plantings;(Loan 1183) 29.5 1975-84 construction of oll will.2nd Oil Palm Project Outgrower oil palm plantings (16.000 ha); construction of(Loan 1191) 19.0 1977-84 2 oil mills.3rd Oil Palm Project Estate (6,000 ha) and outgrover (6.000 ha) oil palm plantings;(Loan 1192) 17.0 1978-84 construction of 2 oil ailla.4th Oil Palm Project Estate (10.000 ha) and outgrover (10.000 ha) oil palm(Loan 1951) 30.0 1979-84 plantings.

TanzaniaPyrethri Project (Cr. 1070) 6.8 1981-85 Pilot coconut project.

Zaire Estate (11,000 ha) oil palm plantings/replantings;Oil P}al Project (Cr. 796) 9.0 1978-85 rehabilitation of oil mill.

- 43 -

Amount of ffective date/ Annex 11Project loanlcredit closing date Project Description Page 4

ASIAIndonesialet North Sumatra Estates Project(Cr. 155) 16.0 1969-76 Estate oil palm plantingalreplantings (36,300 ha).2nd North Sumatra Eatates Project(Cr. 194) 17.0 1970-77 Outgrouer oil palm plantings (3,300 ha).North Sumatra Sualholders Project Estate plsntings/replantings (23.000 ha) oil palms(Cr. 358) 5.0 1972-81 and rubber.4th Nucleus Estates Project Estate plantingsjreplantings (23 000 ha) of oil palms(Loan 3V9) 11.0 1973-81 and rubber.Nucleus Estates and Smaliholders Estate and outgrover oil palm (5,000 ha) and rubberProject (loan 14"9) 65.0 1978-82 plantings; conversion from rubber to oil pals.3rd Nuclewu Estates and Small- Rubber project vith small oil palm estate componentholders Project (Loan 1751) 99.0 1979-86 (2,135 ha).4th Nucleus Estates and Small- Outgrower oil palm plantings (8,000 ha); construction ofholders Project (CLoa 1835) 42.0 1980-86 oil mill; rubber component.Coconut SmalIholders Project Rehabilitation of 38,000 ha and pLanting of 37,700 ha of(Loan 1898) 46.0 1980-86 coconut palms.

Lat Jeugka Triangle Land Settlement Outgrower oil palm (10,450 ha) and rubber plantings;Project (Loan 533) 14.0 1968-75 construction of oil mill.2nd Jeugka Triangle Land SettlementProject (Loan 672) 13.0 1970-78 Outgrower oil pals (6,800 ha) and rubber plantings.3rd JeDgka Triangle Land Settlement Outgrover oil palm (8,900 ha) and rubber plantings;Project (Loan 885) 25.0 1973-81 construction of oil mill.Johore Land Settlement Project Outgrover oil palm (26,200 ha) plantings; construction(Loan 967) 40.0 1974-81 of 3 oil mills.Vast Johore Project Conversion of outgrouer rubber plantings to oil palm(Loan 973) 45.0 1974-83 and coconut.Kar:.tong Settlement Project Outgrower oil palm (22,000 be) plantings;(Lon 1044) 36.0 1975-83 construction of 3 oil mills.FELDA VT. Land Settlement ProjectLoan 1590) 28.0 1979-85 Outgrover oil palm (8,100 ha) and rubber plantings.

Coconut Smallholders Development Rebabilitation/replanting of 23,000 ha of outgrower coconutProJect (Loan 1618) 19.5 1979-85 plantings.Trans-Perak Project (Loan 1960) 50.0 1981-89 Outgrower plantings (8,400 ha) of oil palm, rubber and coconut.

Outgrover plantings (8,100 ha) of oil palm and rubber;FELCRA I Project (Loan 2013) 37.0 1981-86 construction of 2 oil mills.

Papua-New CuineaNe Britain Land Settlement andDevelopment Project (Cr.1371175) 4.9 1969-73 Outgrower oil palm plantings (3,850 ha).Sopondetta Lrad Settlement Project Outgrover (5,400 ha) and estate (4,000 ha) plantings of(Loan 1333) 12.0 1977-84 pals; construction of an oil mdll.

Agricultural credit for plantings of oil paln, rubber and2nd Credit Project (Loan 1149) 15.0 1982-84 other tropical tree crops.

LATIN AME1CA

Tropic l Tree Crop Project 19.0 1979-85 Plantings of oil pals (3,000 ha), coffee and cocoa; constructionof an oil 5.11.

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