P-TG-AA0-009

Project Details
ID: P-TG-AA0-009 Name: PROJET DE TRANSFORMATION AGRO-ALIMENTAIRE AU TOGO - ZTA TOGO Status: Approved Country: Togo
Sector: Agriculture Approval date: 18-juil-2018 Task Manager: NZEYIMANA Jeanne, AHFR2
Total cost: 49440000
Currency: UAC
Source(s) of financing
ADF: 12675000
Cofinanced: 8320000
Government: 7700000
Implementing Agency: Ministère de l'agriculture, de l'élevage et de la pêche (MAEP) Location: REGION DE KARA

Objectives

The overall goal of the Project is to contribute to reducing poverty in rural areas, reducing demand for food imports and promoting agro-industrial development to transform the national economy. Specifically, the project will create a conducive environment for private sector investment in agribusiness, build the capacity for competitive value addition to agriculture, and strengthen linkages between production, processing and commercialization in targeted commodity value chains through the right mix of public and private investments. Agricultural productivity will be increased through world class operational management of the agro-industrial park, modern and climate-smart production practices for large and small producers, effective input distribution systems, IT-based technical support to producers, improved postharvest handling and secure contractual arrangements with output markets

Description

Component 1:Governance, policy environment and financing arrangements In this component, the project will help identify a governance structure for the agropole ecosystem that ensures efficiency, equity and sustainability. It will recommend the adoption of policies and regulations that promote private investments in agro-processing and will support the building of institutional capacity within government agencies to foster agribusiness development. Sub-component 1.1: Policy environment 1.1.1 Legal, policy and regulatory framework in place A policy and regulatory framework for agricultural value chain development across the identified VCs in the coverage area of the agropole will be promoted to address weaknesses within the agribusiness policy landscape. The incentive package will be widely promoted with a clear definition of the types of incentives provided, the beneficiaries, the eligibility criteria, and the laid-out procedures for their granting. The package will include fiscal incentives, direct subsidies, a one-stop-shop for administrative requirements and a range of services to be made available on the agropole site. 1.1.2 Land access and rights issues resolved The acquisition of land for the construction of the agropole and for the commercial farms to be operated by the agro-industrialists and other investors from outside the region will be done in full compliance with the national laws and regulations, with due respect to safeguards measure recommended by Bank. The land allocation model, acquisition method and ownership structure will be specified and all land-related disputes, if any, should be resolved. Sub-Component 1.2: Governance 1.2.1Agropole governance in place and stakeholders' relationships strengthened A governing body for the agropole program shall be in place to provide oversight and ensure that the agropoles deliver on the value proposition for private-sector investors, participating small producers and the consuming public. The relationships between the governing body, the management of the agropole, the producers, processors, distributors and service providers will be clarified and strengthened with agreed upon dispute resolution processes. Key performance indicators shall be adopted for ease of monitoring progress. The governing body shall ensure that the required actions expected from and processes by the various ministries and government agencies are in place and accessible to all agropole actors for greater operational efficiency. The acquisition of land for the agropole, the development of a business plan and the construction of all the required physical infrastructure shall be carried out by a competent and reputable firm. The commercial operation of the agropole and its day-to-day management to provide all the agropole services and promotional activities require another set of competencies. The project will entrust the management of the agropole to firms having a good track record of success for setting up and operating agropoles. A single firm having both sets of competencies would be an advantage. The objective is to offer a superior operating environment with a standard set of offerings to give agro-processors competitive cost advantages and reduce the administrative burdens of running an agribusiness. 1.2.2 Business plan and master planning completed Studies showing technical, financial, social and other feasibility dimensions will be carried out to lead to the formulation of a business plan based on the options selected for implementation. A master plan showing the details and the sequencing of activities shall be produced to guide project implementation. 1.2.3 Compliance with environmental and other regulatory requirements fulfilled All environmental and other agribusiness regulatory requirements shall be made know to all the stakeholders in the agropoles and will be strictly enforced. 1.2.4 Social safeguards implemented The social safeguards identified through the environmental and social impact assessment studies shall be implemented to the satisfaction of the Bank. Sub-Component 1.3: Financing arrangements 1.3.1 Financing models developed for participating SMEs, farmers' groups, agro-dealers, etc.Financial incentives, including low-cost financing and tax breaks shall be negotiated, and administrative incentives, such as a one-stop shop to reduce administrative burdens and make it easier to do business shall be organized. As anticipated in the Togo CSP, the project will work closely with the Bank's financial partners such as the regional development and commercial banks (e.g. the West African Development Bank, Ecobank, Cauris Croissance II Investment Fund) to facilitate investment in some of the agropole infrastructure and in some private sector activities in the agropole. Other development partners identified in the CSP as having interest in funding agriculture include the World Bank, FAO, IFAD, UNDP, IsDB, Kuwaiti Fund, Egypt and Morocco. The project will engage with these partners to identify opportunities for creating financial products that will increase access to financing for all economic actors in the agropole. Component 2:Agro-processing capacity setup and infrastructure upgrading Quality infrastructure is required for the proper functioning of the agropole and for attracting private sector investors in agro-processing.The project will upgrade or establish from scratch the needed infrastructure, particularly energy, water, roads and telecommunications. 2.1 Agro-industrial park infrastructure Energy is a key cost factor for all agro-industrial operations. The amount of energy available to the agropole should be sufficient to cater for all the industrial, residential and social needs within the agropole, but it should also be sized to allow expansion of the agropole and to cover other developmental needs of the region, such as rural electrification. In this way, the investment that would have been borne by the rural electrification program alone can now be shared between two projects, with both benefitting from the win-win arrangement. A water treatment facility shall be installed on the premises to provide clean water for industrial and residential needs, and for irrigation.Energy and water availability in sufficient quantities, without interruption, at reasonable cost and in the vicinity of a high agricultural production zone is very attractive to agro-industrial investors. The road system that reaches the agropole shall be upgraded to link up with the West Africa Growth Ring Corridor that will link four countries, Burkina Faso, Cote d'Ivoire, Ghana and Togo. Business communications are today mediated through information technology (IT) tools and systems. Providers of IT-based communication have already expressed interest to expand their coverage zones to include into the agropole area. There are also plans to lay a fiber optic cable from the sea at Lome to Burkina Faso; the cable will go through the agropole area which stands to benefit from performance increases that the fiber optic cable will generate. The project will closely monitor developments in this field and position itself to benefit from advances in the ICT sector. The agropole shall be managed like an industrial real estate space where facilities such as factory sheds, silos, warehouses, storage rooms for various temperature storage, etc. are designed and erected to suit the main activities of the agropole. A maintenance service shall be operated around the clock to ensure that the facilities do not experience any down time. 2.2 Agricultural production infrastructure upgrading and security of raw materials supply The project will endeavor to upgrade the infrastructure required to produce sufficient raw materials for uninterrupted operation of agro-processing units. The upgrade will be based on identified needs through the gap analysis conducted during the value chain diagnostic study. It may include -the establishment of dams to irrigate up to 164,000ha of agricultural land -the rehabilitation of 370km of feeder roads Component 3:Performance improvement and increased competitiveness of targeted agricultural value chains This component will focus on improving the capacities and performance of all participants in the value chains of interest to the agropole, from agricultural producers, to input dealers, extension services, transporters, agro-processors and distributors. The purpose of this component is to ensure that the products reaching the markets will be of the best quality and can be competitively priced. Value chain diagnostic studies will be conducted to identify all value chain participants, challenges and weaknesses requiring attention. It consists of the following sub-components: 3.1Value chain diagnostics of the key products of the agropole At the onset of the project, a study will be conducted to lead to the following: (a)A detailed mapping of the actors in each value chain targeted by the agropole and the interactions amongst them.(b)A description of the status of development of the key dimensions of each value chain, including land ownership, the sourcing of inputs, labor and supplies, the production capacity and technology, the aggregation of harvests and supply to end-users, governance issues (e.g.professional associations, price setting mechanisms, value chain finance, sustainable production and use of energy and water, the business and regulatory environment, and the socio-political context.(c)The identification of constraints to and opportunities for value chain development and the formulation of interventions to strengthen value chain performance 3.2e-Registration of all participating smallholder producers in the agropole coverage area An ICT-based database will be established to register all participating smallholder producers to enable access to inputs, finance and technical information. The database shall include not only the identification of the producer, but also the specifics of his/her field (geo-referenced location, soil information, cropping history, etc.) 3.3Market driven input supply and harvest aggregation, grading and storage for smallholder producers The producer database obtained in 3.2 shall be used to organize the timely distribution of inputs, the aggregation, grading and storage of harvests and their commercialization. 3.4Technical assistance and quality assurance plans designed and implemented by all agropole participants The success of agropole requires higher levels of performance across entire value chains and the compliance with international quality and safety standards. Soil fertility management, efficient use of water and energy (including renewable energy), quality assurance and certification schemes, including traceability systems shall be appropriately introduced in all farming and industrial operations to ensure sustainability and competitiveness of products coming out of the agropole. The results of the value chain diagnostic will be used to design a plan for technical assistance and capacity building for all the participants in the value chain. A quality assurance plan based on the Hazard Analysis and Critical Control Points (HACCP) system will be developed and implemented. Component 4: management, procurement, M&E, communication

Benefits

The establishment of an agropole in the Kara region will ensure that targeted crops, livestock and fish products from the region will have ready access to market and the income of producers will be secured. The sustainability of the agropole is dependent upon creating and maintaining competitiveness across the totality of the value chains of interest to the agropole. Investments will be made in infrastructure, support services, technology and innovation to ensure that the productivity of farming, logistics, agro-processing and marketing remain high. This include access to inputs, credit and know-how by producers and other actors in the value chains. Increased incomes of people in the Kara region will enable families, and particularly women, a better access to basic social services. By creating on-farm and off-farm employment opportunities, the project will contribute to reducing migration to cities

Rational

commodities by creating a regulatory, policy, business-friendly environment with adequate physical infrastructure that is conducive to private sector investments in agriculture. It will enhance the productivity of priority agricultural value chains, facilitate access to markets and financing for value chain actors, and promote small and medium enterprises along the targeted agricultural value chains. The project should succeed in putting on the national market safe and high-quality food products that favourably compete with imported products, thus contributing to reducing food imports

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