• Reference: P-GH-AA0-015
• Approval date: 31/05/2006
• Start date: 02/02/2007
• Appraisal Date: 14/02/2006
• Status: OngoingOnGo
• Implementing Agency: MINISTRY OF FOOD AND AGRICULTURE
• Location: AFRAM PLAINS DISTRICT

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

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

Agriculture Growth and Development Strategy (AAGDS) and Food and Agriculture Sector Development Policy (FASDEP) provide a comprehensive framework for donor support to the agricultural and rural development in Ghana. It is within this framework that the interventions of the USA-MCC and EU-FRIP, to improve the competitiveness of horticultural exports in the Afram Plains in general and upgrading of some feeder roads in the Afram Plains district in particular, are conceptualized. The Bank group intervention is designed to complement and consolidate these interventions.

The project feasibility study entailed extensive discussions with various stakeholders including project beneficiaries, government officials, NGOs, private sector, study steering committee as well as representatives of bilateral and multilateral agencies in Ghana. The appraisal mission also met with key stakeholders to discuss the project design and implementation modalities. The design of the project therefore has extensive input from the stakeholders who comprised small-scale farmers, representatives of the Afram Plains District Assembly, EPA, NGOs, private sector operators, Chamber of Commerce, Export Promotion Council, Government officials at national, regional and district levels; representatives of donors involved in agriculture and rural development including the World Bank, EU, DFID, JICA and others. In all the discussions, the project received support and valuable recommendations for effective collaboration with other donors supporting various interventions in the Afram Plains District. Lessons from various Bank as well as other donor funded projects in Ghana have also been integrated in the project design

The current farming system in Afram Plains District is mostly rain-fed and the irrigation potential in the district is yet to be fully developed. The project will promote rainwater management and the development of the irrigation potential through the use of appropriate water management technologies that are simple, adaptable and affordable by the farmers. In the Afram Plains District, water for irrigation development could theoretically come from four sources: Lake Volta; boreholes; small earth dams and improved water harvesting. Large-scale irrigation using water resources from Lake Volta would be a very costly option. Various options were evaluated and found to be technically and economically unviable. The only option left therefore is the surface irrigation using water resources from the fringes of Lake Volta and its river systems.

The project will improve access to high yielding seed and other planting material as well as other farm inputs and link the project beneficiaries with existing sources of farm credit. The project will introduce the concept of matching grants where project resources will be made available to the poorest segments of project beneficiaries to enable them acquire productive assets. The groups have been identified on the basis of the following criteria; a) demonstrated interest in irrigated vegetable production; b) the majority of the groups have a higher percentage of women who use buckets to draw water for irrigation purposes thereby affecting time available for other productive activities and household chores; and c) their willingness to continue to work in groups as the support will be provided to such groups. Project resources will be used to support such poor groups to acquire productive assets including irrigation pumps which will be run and maintained by the groups from their returns.

The project is in line with Government priorities and objectives of increasing national food production as a contribution to self-sufficiency, reducing foreign exchange expenditure, raising household incomes and employment creation. Interventions in improved food crop production through rainwater management, community irrigated vegetable production, improved livestock production will directly benefit women and children and the poorer strata of society, since these activities are undertaken mainly by women. The proposal to lay emphasis on poverty reduction is consistent with the ADB Group strategy for the agricultural sector in Ghana as outlined in the Country Strategy Paper. The project is also consistent with the Bank's agricultural development strategy as well as the integrated water resources management policy. Furthermore the project is consistent with Pillar 1 of CAADP: sustainable land management and water control.

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

The participatory approach adopted under the project will enhance the capacity of project beneficiaries to take advantage of proven technologies to increase the profitability of their crop, livestock and fishing enterprises. Capacity building will in particular benefit women by: increased access to markets, especially for petty trading activities in which women dominate. All these improvements will contribute to poverty reduction. The project design has integrated a sub-component of raising awareness and protection against HIV/Aids and Malaria.

The project provides an opportunity for interventions to improve production and productivity over the traditional system in place. The recommended practices, improvements in the cropping intensity and agronomic practices will result in incremental returns to the farm family and entire farming system. Financial benefits from project interventions will emanate from the direct employment of the unskilled and semi-skilled rural inhabitants working in the crop and livestock interventions. The results of the financial analysis demonstrate that the introduction of project interventions will lead to significant improvement in the household incomes of the participating beneficiaries.

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

AHMED Tarek Abdallah - OSAN2

Finance source	Amount
ADF	UAC 19,970,000
Government	UAC 2,480,000
Total	UAC 22,450,000