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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No. 9606
PROJECT COMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT(LOAN 1544-LBR/CREDIT 786-LBR)
MAY 24, 19S1
Agriculture Operations DivisionCountry Department IVAfrica
Regional Office
This document has a restricted distribution and may be used by
recipients only in the performance oftheir official duties. Its
contents may not otherwise be disclosed without World Bank
authorization.
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CURRENCY
Currency Unit - United States Dollars
WEIGHTS AND MEASURES
1 acre (ac) 3 0.405 hectares (ha)1 mile m 1.61 kilometers (km)1
square mile 640 acres - 259 ha1 metric ton - 0.98 long ton
ABBREVIATIONS
AETC Agricitltural Extension and Training CenterAHT
Agrar-und-Hydrotechnik GMBHACDB Agricultural and Cooperative
Development BankBWI Book Washington InstituteCDC Commonwealth
Development CorporationCTO Chief Technical OfficerGOL Government ot
LiberiaGDP Gross Domestic ProductIDA International Development
AssociationIBRD International Bank for Reconstruction and
DevelopmentLRPC Liberia Rubber Processing CorporationMA Ministry of
AgricultureMLM Ministry of Lands and MinesODM Overseas Development
MinistryPRS Pilot Rubber SchemePSC Project Steering CommitteeRAS
Rubber Advisory ServiceRPAL Rubber Planters Association of
LiberiaSwA Senior Rubber AdvisorUSAID United States Agency for
International DevelopmentUL University of Liberia
FISCAL YEAR
July 1 - June 30
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FOR omci"L urn otnyTHE WORLD IIANK
Washington. D.C. 20433U.S.A.
Oic* of Okctv.GwauOp0aa na Eva)wgn
May 24, 1991
MEMORANDUH TO THE EXECUTIVE DIRECTORS AND THE PRESIDE
SUBJECT: Project Completion Report on Liberia RubberDevelooment
Proiect (Loan 1544-LBR/Credit 786-LBR)
Attached, for information, is a copy of a report entitled
"FrojectCompletion Report on Liberia Rubber Development Project
(Loan 1544-LBR/Credit786-LBR)" prepared by the Africa Regional
Office. No audit of this proje:t hasbeen made by the Operations
Evaluation Department at this time.
Attachment
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.
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FOR OFFICIAL USE ONLY
PROJECT COMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT
(LOAN 1!44-LBRICREDIT 786-LBR)
TABLE OF CONTENTSPaWe No.
Preface . . . . . . . . . . . . e * * . * * * * * * Evaluation
Summary .................. ii4
PART I PROJECT RF.VIEW FROMBANK'$ PERSPECTIVE . . . . . . . . .
. ... 1
Project Identity . . . . . . . .BackgroundetIdet ..... 0.....
1Project Objectives and Description . . . . . 2Project nesign and
Orgaiiization . . . . . . . 3Project Implementation . . . . . . . .
. . . 4Project Results . . . . . . . . . . . . . . . 6Project
Sustainability . . . . . . . . . . . 7Bank Performance .
............. 7Borrower Performance . . . . . ....... 8Consulting
Services . . * * a I . 9Project Documentation and Data . . . . . .
. 9
PART II PROJECT REVIEW FROMBOEROWER'S PERSPECTIVE . . . . . . .
. . . . 10
* See Note Below
PART III STATISTICAL INFORMATION . . . . . . . . . . .11
Related Bank Loans/Credits . . . . . . . . . 11Project Timetable
. . . . . . . . . . . . . . 12Loan/Credit Disbursements . . . . . .
. . . . 12Project Implementation .. ...... .. 14Project Costs and
Financing . . . . . . . . . 15Project Results . . . . . . . . . . .
. . . . 16Status of Covenants . . . . . . . . . . . . . 16Use of
IBRD/IDA Resources . . . . . . . . . . 16Mission Data .. . .. . . .
.. . ... . 17
MAP IBRD NO. 13114R
* NOTE: Part II was not provided aLnce Government collapsed due
to ongoing civil var.
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.
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PROJECT COMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT (Loan 1544-LBR/Credit 786-LBR)
PREFACE
1. This is the Project Completion Report (PCR) for the
RubberDevelopment Project in Liberia, for which Loan 1544-LBR in
the amount ofUS$7.0 million and Credit 786-LBR in the amount of
US$6.0 millionequivalent were approved on March 30, 1978. The
project was co-financedby the Commonwealth Development Corporation
(CDC), which provided a loanequivalent to US$7.0 million. The
United Kingdom Ministry of OverseasDevelopment (ODA) made a
technical assistance grant equivalent to US$1.4million for eight
British rubber experts. The Credit was fullydisbursed before its
extended Closing Date of December 31, 1985. TheClosing Date for the
Loan was also extended to December 31, 1985.However, in order to
honor withdrawal applications the Loan was keptopen until October
7, 1986 when, after the last disbursement, it wasclosed. An amount
of US$1.0 million of the Loan remained undisbursedand was
cancelled. Including this amount, and the earlier cancellationof
US$3.5 million, total cancellations of the Loan were equivalent
toUS$4.5 million.
2. The PCR was prepared by the Agricultural Operations
Division(AF4AG) in the Western Africa Department of the Africa
Regional Office(Preface, Evaluation Summary, Parts I and III). The
Borrower was notsent Parts I and III, nor could they provide Part
II because thegovernment collapsed as a result of the ongoing civil
war. Preparationof this PCR is based on the Staff Appraisal Report;
the Credit and theLoan Agreements; supervision reports;
correspondence between the Bankand the Borrower; and internal Bank
Memoranda.1/
1/ A Project Completion Mission visited Uberia In June, 1986 to
collect data. 'he Government also caried out itsown review of the
project. However, most of these materials are not traceable in the
Bank's records.
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PROJECT COMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT (LOAN 1544-LBRICREDIT 786-LBR)
EVALUATION SUMMARY
Introduction
1. Liberia has a dualistic economy. Its agricultural
economycoexists with an enclave sector which is export-oriented and
producesbesides iron ore, rubber and forest products. The enclave
sectorprovides about 701 of export earnings, generates about 25Z of
GDP andabout 151 of all government revenues. Total population is
about 1.7million. About 601 of the population is classified as
agriculturalhouseholds. Soils are generally fertile and tne climate
is suitable fora variety of field and tree crops. With the decline
in demand for ironore, which was a dominant product for export
earnings, government beganto make serious efforts to diversify the
economy and emphasizedevelopment of its export oriented tree crop
production. However, withthe collapse of the government, the
continuing civil war situation islikely to have serious impact on
the tree crop sector.
2. Obiectives: The aim of the project was to increase
Liberia'sexport earning from natural rubber and to improve income
distributionwithin the country. As designed originally the project
included aprogram to replant abandoned small rubber farms and
rehabilitate mature,but untapped rubber trees. Small and medium
sized rubber farmers wereto be helped to achieve higher
productivity and incomes by providingthem with better extension
services and credit for farm inputs. Theproject also aimed at
strengthening the institutional capability to planand carry out
further development of Liberia's rubber industry byestablishing the
Liberian Rubber Development Unit (LRDU) and traininglocal staff.
Funds were also provided to enable the Government to carryout a
rubber pricing study and a feasibility study for a second
stageproject.
3. ImRlementation Experience: Project performance was
belowexpectation throughout. During a review of the project in June
1980, itwas found that only 800 acres had been replanted compared
to a targetfor that date of 6,000 acres, and only 2,500 acres had
beenrehabilitated, against a target of 8,500 acres. The only
trainingprovided had been to some field staff, and the building
program was a
year behind schedule. There were three main reasons for
poorperformance: (a) inadequate management; (b) insufficient
capacity toprocess rubber; and (c) low producer prices resulting
from hightransport and handling costs and the low quality of
rubber. Farmers'low interest because of inadequate support services
for purchase ofsmallholder rubber, inadequate management and
unrealistic tarAetsprompted the revision of the project in March
1982. The objectives
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remained the same and there was a drastic reduction in
theplanting/rehabilitation targets. Other significant changes were
theaddition of a processing component and a rubber collection unit
toservice the project farmers. Even the revised
planting/rehabilitationprogram wae under-fulfilled, and at
reappraisal in August 1983, theproject was found not to be viable
economically *.r financially. Theagricultural program was then
phased out and only the processingcomponent was pursued. When the
Rubber Corporation of Liberia (RCL)factory was established after a
long delay, it suffered from financial,technical and operational
problems. Bank staff relationship with theexpatriate project
management appeared to undergo stresses and strains,particularly
during the later years.
4. Results: The project objectives of increaning rubber
productionfrom Liberian-owned small farms and productivity tnd
income ofsmall/medium farmers were not realized. Only about 25Z of
the originalappraisal target of 40,000 acres of planting and 23,500
acres ofrehabilitation was achieved. Actual project costs (US$18.1
million)were about 601 of the Appraisal Cost (US$29.6 million).
However, theproject Unit and the RCL accounts show 100l and 25Z
cost overrunsrespectively. The project's economic rate of return
(ERR) which wasoriginally estimated at 13%, was re-estimated at 16%
at the time of theproject revision (1982). At reappraisal in 1983,
the ERR was estimatedto be 5.51 and the financial rate of return to
be 4.12. The mainreasons for the reduction in ERR were the
reduction in rubber yields(from 1450 lbs/acre to 1200 lbs/acre and
the lengthening of the periodto maturity (from 6.75 years to 7.5
years). The resulting overallreductions in yield were not offset by
a proportional reduction in realproduction cost. Due to
insufficient data re-estimation of ERR was notdone at the time of
preparing the PCR.
5. Sustainabilitv: The project, even with the 1982 revisions,
wasnot sustainable. Lack of farmers' interest and inadequate
extension,training, marketing and processing facilities led to a
situation in 1983when it was considered imprudent to pursue the
project's agriculturalprogram. The farmers were not getting an
adequate prico for rubber andconsequently did not have sufficient
incentive to produce and selltheir raw rubber. The ERU to
incremental planting at the time ofreappraisal was estimated at
only 5.5Z. Liberia had natural comparativeadvantage in the rubber
sub-sector but required a much stronger effortin reaching its
objective of putting outgrower rubber on a viablefooting. The
institutional format that could handle this task needed tobe
carefully examined together with a different target group
(largerfarmers) before Liberia could proceed with a follow-on
project.
6. Findings and Lessons Learned:
(a) A project of this type can not be successful on the basis
ofagronomic possibilities alone; complex sociological
andinstitutional issues also need to be thought through
(pera22).
(b) Small farmers need intensive extension and
trainingassistance which impose a burden on any project
management;
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.V.
inveostment of scarce funds and management resources in theearly
stages of sectoral development on such farmers, whoare often
scattered over a wide area, may not be fruitful(para 26).
(c) Production and output efforts require road andtransportation
network as well as marketing and processingfacilities; in far-flung
rural areas, unless these mattersare given equal attention,
farmers' profitability andconsequently incentives are bound to
diminish (paras 16 and 18).
(d) Timely availability of adequate funds is important
forproject implementation but equally important is themanagement's
ability to plan and execute a project. Lack o:funds can often be a
weak management's cover to hide lack ofdirection and efficiency
(para 14).
(e) Project mid-term reviews are desirable in some cases.
Theycan be beneficial only if an examination is made of
theproject's fundamental shortcomings. Adjustments in thetargets
and project costs can prove to be illusory (para25).
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PROJECT COMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT (Loan 1544-LBR/Credit 786-LBR)
PART I
PROJECT REVIEW FROM BANK PERSPECTIVE
PROJECT TDENTITY
Project Name: Rubber Development ProjectLoan No.: Loan
1544-LBR/Credit 786-LBRRVP Unit: AfricaCountry: LiberiaSector:
AgricultureSubsector: Tree Crops - Smallholder Agriculture
Background
L. The Development Plan of Liberia attached high priority
toagriculture as the corner stone of the Sovernment's
diversificationstrategy. The objective was to diversify and
modernize agriculturalproduction, increase productivity, improve
associated rural economicactivities such as marketing and
processing, and provide social andphysical infrastructure to
promote income distribution and improve thequality of life in the
rural as well as urban areas. Agriculture is thesecond largest
productive sector in the economy and provided one-quarterof gross
domestic product. About 54.5% of the total population ofLiberia
work in agriculture. With low average population density, landis
not a constraint to agricaltural development. The
criticalconstraints are trained manpower and efficient
institutions.
2. The Plan earmarked about one-fifth of total investment
resourcesfor developmant of agriculture. Based on general
ecological conditions,factor endowments and market prospects,
agriculture had greaterpotential for efficient diversification of
the economy than any otherproductive sector. It could also provide
a continuing source of thecountry's growth and development to
supriement earnings from iron-orewhich was likely co gradually
decline. Within this framework, theGovernment had adopted two basic
strategies: development of smallholderagriculture and development
of industrial tree crop plantations.
3. A distinctive feature of Liberian agricultu-e is the
existence ofa dominant rubber industry, accounting for 702 of all
agriculturalexports and employing one third of the national labor
force. The rubberindustry is divided into foreign-owned concessions
and Liberian-ownedrubber farms. Two decades of d_elining rubber
prices had led manyLiberian planters to abandon and neglect their
plantations. As aconsequence, only 143,000 acres (382 of the total
acres planted) were inproduction in 1978, and about 502 of the
plantations were estimated tobecome over-aged by 1984. Poor
planting material and low management
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standards were responsible for the low yields -- 150 to 500
lbs./acrecompared with over 1000 lbs./acre on the foreign-owned
concessions.While Liberian-owned farms accounted for 72% of the
total rubberacreage, they produced only 31% of the total output
estimated at 83,000tons. Except for the Liberian Rubber Processing
Company (LRPC) whichwas owned by the Government, all the five
companies which purchasedrubber from Liberian farmers for
processing and exporting wereforeign-owned. Fireitone buying 70Z of
Liberian-owned farm production,was the largest and effectively set
producer prices.
4. The most critical constraint to rapid expansion in
theagricultural sector was shortage of trained manpower. Another
majorconstraint was the institutional deficiencies in the delivery
ofessential Ministry of Agriculture (MOA) was aware of the need to
developan effective structure for servicing smallholders. The Bank
supportedthe MOA's efforts through consultants provided under
previousBank-financed projects. The Government also consulted
closely with theBank regarding the appropriate organization and
operating policies forinstitutional credit for the traditional
agricultural sector andestablished the Agricultural and Cooperative
Development Bank (ACDB).
Proiect Obiectives and DescriRtion
(i) Objectives
5. The principal objectives of the project were to increase
Liberia'sincome and export earnings from rubber through an
intensive program ofreplanting of old rubber and rehabilitating of
mature untapped rubber.This was to be the first phase of a
long-term effort to increase andsustain production from
Liberian-owned rubber farms. The project alsoaimed at improving
productivity and the incomes of about 6,300 small andmedium size
rubber farms (70% of total Liberian holdings) throughprovision of
credit, better extension services and assistance foron-farm
processing and marketing. In order to strengthen theGovernment's
capability for the further development of Liberian-ownedrubber
industry, the project made provisions for establishing a
LiberianRubber Development Unit (LXDU), staff training and
technical assistance.
(ii) Components
6. The project included the following:
(a) creation to rep! 9 the existing Rubber Advisory Servicesand
provide a permanent extension service;
(b) provision of financial assistance to farmers for
replanting40,000 acres of old rubber with high-yielding varieties
andrehabilitating 23,500 acres of mature untapped rubber;
(c) training project headquarter and field staff,
managers,overseers, headmen, budders, tappers and farmers in
modernrubber production techniques;
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(d) providing marketing assistance to smallholders in
on-farmprocessing and transportation;
(e) providing farm planning advice to large farmers and
helpingthem to prepare investment proposala for
commercialfinancing; and
(f) provision of funds for hiring consultants to assist
theAgricultural and Cooperative Development Bank, conduct arubber
pricing study, prepare a follow-up project, adviseLRDU on
smallholder marketing and train instructors.
Proiect Desizn and Organization
7. The Project was designed to increase the productivity
ofLiberian-owned rubber farms by providing credit, extension
services andtraining. Arrangements for collection and purchase of
rubber from thefarmers at prices profitable to the farmers was
recognized by the Bankpreparation team to be vital to maintaining
farmers' interest inincreasing production. The insufficiency of
processing capacityavailable to the stuallholder rubber was also
known to the team.Therefore, it should have been quite obvious to
the preparation teamthat there had to be a radical change in the
purchasing and processingof rubber, if an equitable return was to
be ensured to the smallfarmers. In this context, designing and
financing of a primarilyagricultural project aimed at increasing
the production of raw materialsinstead of a manufacturing
(processing) project was clearly inadvisableand untimely. The high
cost per beneficiary of the project had alsobeen raised by the
Bank's senior manageme,=.
8. Since its inception in 1978, the project faced many
difficultiesin implementation. The Bank, however, continued to
focus mainly on theshortfalls in achieving the planting and
rehabilitating program. TheJune 1980 Bank and CDC (Commonwealth
Development Corporation) projectreview mission found that
inadequate sanagement and low farmers'interest were the main
reasons for the project's poor perfkrmanco. Theproject management
failed to provide planting material and organize aneffective
training program and extension service. Low farmers' interestwas
caused by insufficient producer prices to cover labor, input
andtransportation costs. Inadequate processing capacity and delays
by the%enclave plantation factories in payment to farmers
compounded thefarmers' difficulties in keeping labor as farmers
were unable to paycash-wages on time.
9. Changes in project design, revision in the agricultural
programand modifications in organization were discussed with the
Goverr.ment in1981-82. Project amendments were approved by the
Executive Directors onMarch 16, 1982. Although the aims of the
project remained the same,five significant changes to the original
project were made. The.aplant'ng and rehabilitation targets were
scaled down from 40,000 acresto 20,uOO acres and from 23,500 acres
to 14,000 acres respectively. Toserve project farmers and provide
adequate processing capacity, aprocessing component under a new
agency -- the Rubber Corporation ofLiberia (RCL) with an initial
capacity of one ton/hr was added. Other
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changes were the incorporation of a small land survey and
roadconstruction unit into LRDU, and organization of rubber
collectionserv.ice to assist farmers in marketing. The project
implementationperiod was extended by 18 months until June 1985.
10. The Bank along with CDC showed considerable flexibility
andrealism in making the above changed. However, there were delays
insetting up the processing plant, rutbber collection services did
not workwell, and even the revised planting and the rehabilitation
program couldnot be fulfilled. In September 1983, the project had
to be reappraised.It was found to be unviable economically or
financially (ERR and FRRboth below 6%), due mainly to lower than
expected yields, drop ininternational prices, high mortality of new
plantings, and poor fieldmaintenance by the farnmers. In light of
the reappraisal mission'sconclusions, and after discussionis with
the Government, the Bank decidedto continue with the factory
rehabilitation program while phasing outthe planting program in
such a way as to minimize unnecessary losses anddamage to the LRDU
operations and the project farmers.
11. The Bank begun to realize that the project was inappropriate
andwrongly designed. It as recognized that rubber was not
attractive tosmall farmers with limited land. It was introduced as
the sole crop.Food crops could only be cultivated by inter-planting
during the first2-3 years; thereafter, farmers had no means of
subsistence or resourcesto bring the rubber crop to maturity at
year 8. The Liberian conditionscalled for a different strategy with
an adequately designed system toachieve project objectives. It
appeared that larger farmers who hadother sources of income should
be involved with such developmentprojects, and nucleus estates with
satellite block plantations should beincluded. The Bank also
realized that what was needed were facilitiesto process an
internationally accepted grade of rubber that couldcommand a higher
price. Farmers would then rehabilitate their rubberareas to enjoy
good income.
Prolect Implementation
12. Since the time of appraisal in mid-1977, changes in economic
andpolitical climate in Liberia had adversely affected project
performance.Equipment, building and transport costs increased
3ubstantially and thegovernment-set agricultural wage rose from
US$1.50 in 1978 to US$2.00per day. Despite an increase in rubber
prices on the world marketbetween 1975 and 1979, the higher
transport and labor costs which theLiberian farmer faced decreased
his returns. Processing capacity forLiberian rubber declined
significantly and by the end of 1980, theBank's Review Mission
concluded that unless adequate collection andprocessing facilities
could be provided to the farmers in the project,there was no point
in continuing with the planting and rehabilitsationprogram. The
Government's suspension of land transactiors following theApril
1980 coup resulted in delays in deeding and this affect;ed
projectoperations in the subsequent years.
13. From the commencement of the Project in 1978, project
performancewas routinely poor. Successive Bank superviuiion
missions reported onproject problems and recommended actions to
alleviate them, including
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adversely affected the execution of a project which already had
a hostof other problems.
Prolect Results
17. The project's main objectives of doubling rubber production
fromLiberian-owned farms and bringing about a substantial increase
inproductivity and the income of small and medium farmers were
notrealized. In July 1986, a Bank project completion mission found
thatonly about 252 of planting and 242 of replanting of the
appraisaltargets were achieved. Only 402 of the rehabilitated area
was beingtapped at the time, bringing down the actual rehabilitated
area to only102 of the appraisal target. Farmers' interest could
not be raised andsustained due to a number of complex reasons -
high transportation andcollection costs, inadequate processing
capacity and above all thefarmgate price was insufficient to
provide a strong incentive.
18. Following a major review of the project in June 1980,
changes wereformally introduced in 1982 but the project objectives
remained thesame. The changes were in respect of the agricultural
targets (whichwere lowered) and processing capacity (expansion).
Certaininstitutional changes were also introduced through the
establishment ofthe Rubber Corporation of Liberia (RCL) which was
to be in charge ofcollection and processing of project farmers'
rubber output. As aresult of a reF.ppraisal in 1983, the
agricultural component, which wasfaltering, was agreed to be
gradually abandoned. Meanwhile, it wasconsidered expedient to
proceed with the rehabilitation of an existingpublic sector
processing plant.
19. The particular socioeconomic situation of the smallholders
inLiberia (e.g. low economic capacity, and necessity for
intensiveextension and training, and price incentive) explains the
project's poorperformance. In addition, the poor selection of
participants, poor farmmaintenance and high proportion of absentees
among project farmers and avery low credit recovery rate of less
than 62 among rehabilitationfarmers contributed to the project's
shortcomings. The extensive areacovered by the project required
higher input of lower base contactpersonnel which was not provided,
and resulted in higher transportationcost and poor supervision. The
inadequate project management compoundedthese difficulties.
20. Pricing of rubber and receipt by the farmers of a fair price
weremajor issues identified during project appraisal. Farmgate
price wasexpected to be increased as economies were realized in the
marketing andprocessing stages between the farmgate e'nd
international markets. Apricing study financed by the project was
completed through consultantsbut the report was not acted upon by
the Government which was notsatisfied with it. At the time of the
project's revision it was agreedthat a pricing formula based on
international prices and updatedproduction costs of farmers, and
transport and processing costs would beadopted by the Government
within six months of the start-up of therehabilitated processing
plant. Farmgate price was to be reviewed andadjusted regularly.
Various methodologies were discussed between theGovernment and the
Bank, but the matter was not finalized until the
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the removal of the first project manager in June 1979 and
thescaling-down of field targets. Despite increase in the
factory-gateprice of rubber in early years, the project continued
to experiencedifficulty in attracting participants. The
non-achievement of targetswere due to managerial problems within
LRDU and problems in smallholdermarketing, processing and rubber
pricing resulting in low farmer returnsand a lack of farmer
response. Other problems such as poor farmmanagement and knowledge
of modern rubber production techniques andseasonal and regional
shortfalls in labor supply for tapping alsoaffected farmer
response. The latter (i.e. labcr shortage) was clearlyidentified as
a risk by the Bank's appraisal mission. Loan recovery,particularly
from the rehabilitation farmers was unsatisfactory. Byend-1983, all
211 such farmers had defaulted. This was to some extentdue to a
steep fall in rubber prices.
14. The supervision missions during 1983-85 had mentioned the
lack offunding, particularly for LRDU, as a major problem requiring
commercialbank overdraft facility. This was attributed to the
Government'sdesperate financial situation and the Bank and CDC
suspension ofdisbursement from time to time. However, the Bank
mission forcollection of project implementation data in July 1986
concluded thatthe financial problems faced by the project during
its implementationwas not a serious constraint in project
development activities; donors'contributions, along with overdraft
facility granted by ACDB which wasused to bridge gaps caused by
delays in releasing funds, met all projectfinancial
requirements.
15. The actual project cost estimated in July 1986 was US$18.1
millionwhich was about 60X of the appraisal estimate (US$29.6
million).However, RCL :jad cost overrun of 25% compared to its
estimated cost;LRDU had cost overrun of 1002 with only 25%
achievement of its revisedplanting/replanting target. The original
appraisal estimate of aneconomic rate of return of 13% was not
achieved. At the time ofrevision of the project in 1982, the rate
of return was optimisticallyestimated to be 162 on the expectation
of higher efficiency of RCL andhigher rubber prices. This, however,
could not be achieved in thecircumstances that the revised project
found itself. In 1983, aspointed out earlier under Evaluation
Summary (para 3), the economic rateof return to incremental
planting was estimated at about 5.5%.
16. The project management was inadequate. The high turn-over
rate ofpersonnel in top management had its toll on project
productivity andperformance. During the implementation period
(1978-1985), threeproject managers were appointed and about 12
expatriates worked in theproject for an average of 2 1/2 years.
Some of them were foundunsuitable for the tasks and as a result,
the project failed toeffectively provide the materials, extension
services and training. Theproject management did not appreciate the
expertise of the supervisionmission staff, nor the quality of their
advice. While both projectmanagement and Bank staff were in
agreement that rubber made goodecological and economic sense in
Liberia, their views on the appropriatedevelopment strategy and the
sequence of required actions differedconsiderably. Also, their
relationship was often strained. This
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completion of the project. Prices meanwhile were being
determined bymarket forces, as in the past.
Project Sustainabilitv
21. The project as originally approved was not sustainable due
to lackof farmers' interest, and marketing and processing
shortcomings. Therevised project was an improvement in the sense of
a more realistictarget of planting and rehabilitation areas, and
the recognition ofprocessing inadequacy through provision of a
processing plant. However,at the time of reappraisal in 1983, it
was found that pursuing theagricultural program was not prudent due
to the very low rate ofeconomic return to incremental planting.
During the subsequent years,even the scaled-down agricultural
targets were not reached and thecomponent was gradually abandoned.
Only the rehabilitation of theprocessing facility was actively
pursued towards the end of the project.
22. The sustainability issue for this project involves the
fundamentalquestion faced during implementation--whether in the
Liberian socio-economic situation for smallholders it was possible
to increase therubber yield through a high-input high-output
approach. Thesmallholders could theoretically reach a higher yield
than they achievedunder the project, but that would have required a
more favorablefinancial condition for the farmers, better farm
management, higherprices received by them, and a much better
management of input supplyand extension and training efforts. These
conditions were notattainable in Liberia at the time and even with
all the good intentionson every side, the project as conceived was
not viable and could not besustained.
23. Perhaps a different strategy was needed for the subsector --
thatof working with the larger farmers who had greater financial
strengthand crop management skills. Advisability of utilizing
available landfor nucleus estate and block plantations could also
have beenconsidered. This, in conjunction with the development of
access roads,collection systems, effective training and adequate
processing capacitycould have been considered for future
development. In fact, the Bank'sthinking was moving in that
direction when, in conjunction with theGovernment, terms of
reference were drawn up and proposals sougut fromconsultants to
prepare a possible follow-up project for the rubber sub-sector.
However, because of the suspension of Bank operations inLiberia on
debt service grounds, the matter could not be furtherpursued.
Bank Performance
24. The most positive element in the Bank's performance on
thisproject was its flexibility in dealing wlth the problems as
theysurfaced. This was amply demonstrated by its readiness to
undertake areview of the project contents early in the project
execution period andan agonizing reappraisal of the project towards
the end. The Bankopenly acknowledged the project's shortcomings,
and by closely workingwith CDC and the Government, it successively
modified the project.After the reappraisal, the Bank was realistic
enough to be ready to
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- 8 -
abandon the project save the one element (processing capacity)
v'.Ichstill made economic and practical sense. The Bank's
pragmatism helpedin avoiding further misdirected efforts and
minimizing financial andinvestment losses (project expenditures in
the end were well belowappraisal estimates).
25. The main weakness of the Bank was that it went too quickly
intotoo big a program. It did not fully appreciate the situation of
thesmallholder rubber farmer and their low yielding old rubber
trees onwhich the project concentrated and the shortcomings of the
marketing andprocessing capacity in r - f the smallholder output.
The pricingissue was recognized from the ou set and the Bank
required that apricing study be completed and acted upon. The Bank
was, however,unable to effectively deal with it, complex as it was
with thetransportation costs, price setting by Firestone
(largestconcessionaire) and the international rubber price
movements. Thequality aspect of rubber in price determination was
not fully taken intoaccount by the Bank at appraisal and the
output/yield increase estimateswere out of line with the Liberian
reality. Consequently, therealization that probably the project
design was inappropriate anduntimely did not come to the Bank staff
until the evaluation of thereappraisal mission's findings (close to
the project's originallyscheduled completion time). It was clear
that during discussion onamending the project in 1980-82, the Bank
either did not appreciate thatthe project design was flawed or was
not ready to accept it at thatstage. It did recognize the need for
a fundamental review of the rubbersub-sector and a sector review as
subsequently undertaken by the Bank inSeptember 1984. On hindsight,
it may be said that a sector reviewshould have preceded launching
of the project. The Bank naturallyrelied on the Malaysian
experience and staff were sent there fortraining. These could not,
however, mitigate the conceptual and designdeficiencies in the
project arising from the fundamental differences inthe Malaysian
and Liberian situations, particularly in respect of thesmallholder
farmers.
26. The lesson that the Bank can draw from the project
experience isthat preconceived notions of agricultural development
strategies andpriorities, particularly when it involves the
uneducated poortraditional rural sector, should be very critically
examined at the timeof project preparation. It would be prudent to
consider more cost-effective investments in extension,
demonstration and training-intensiveways of assisting the small
farmer. Also there are stages ofdevelopment in every sub-sector. It
is essential to resolve credit,transportation, marketing and
processing issues while planning anincrease in agricultural
production. A project design, which may beappropriate at one time,
can be premature at a different or earliertime. This is
particularly so where the private sector (as in Liberia)is
incapable, or slow in its response to meet the deficiencies in
themarket.
Borrower Performance
27. The Borrower had show commitment at the outset by
completingstart-up actions on time e.g. acquiring of land for
nursery and project
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- 9 -
headquarters and establishing of the Project Steering Committee
beforethe negotiations. It also showed sufficient flexibility in
dealing withthe project issues. For example, when it came to
dismissing the firstProject Manager due to his ineffectiveness, it
was quick to do so; whenit came to shuffling project staff to more
appropriate positionsmatching their expertise, the Borrower acted
wisely. The ProjectSteering Committee functioned well at an
appropriate level ofrepresentation. However, the Borrower's
handling of the importantpricing study was dilatory and when it
decided not to follow therecommendations of the expatriate
consultants, it delayed agreement onalternative ways of producer
price determination. Project staffperformance was generally
satisfactory but there were problems at thelower levels mainly
because of lack of discipline and agronomic skills.
28. The funding of the project was often inadequate, caused by
theGovernment's own financial difficulties. But remedial
measuresrecommended by the supervision missions were acted upon,
e.g. arrangingthrough the ACDB bridging funds (overdraft
facilities). In any event,either due to slow project implementation
and/or inadequate management,iii the end the funding issue was not
considered to have been the majorconstraint. The Borrower was slow
in arranging the rehabilitation ofthe processing plant which was a
critical matter. It did set up the RCLand through it the rubbar
collection service which was functioningsatisfactorily. The last
Bank mission is 1986, however, found thatafter a year and a half of
the RCL factory coming on stream and eightmonths since management
was taken over by Liberian staff, RCL'sfinancial, technical and
operational situation was deteriorating.Factory maintenance was
inadequate causing operational problems andreducing productivity.
Lack of spare parts and poor maintenance alsocaused near collapse
of the rubber collection system. If the RCLfactory collection
system was not introduced as an alternative to theforeign
concessionaires' facilities, one would have ventured to suggestthat
perhaps these RCL activities could have been given to the
privatesector. However, in the Liberian situation, this might not
have been afeasible alternative particularly if one looked for
Liberianentrepreneurs.
Consulting Services
29. Project consultants provided valuable assistance to the
ProjectManagement in project implementation including training of
local staff.A good relationship existed between the consultants and
the ProjectManagement and the Borrower.
Project Documentation and Data
30. The documentation for the project was adequate. The Loan
andCredit Agreements were quite adequate for achieving project
objectives.The appraisal report provided a useful framework for
review of projectimplementation.
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- 10 -
PART II - PROJECT REVIEW FROM BORROWER'S PERSPECTIVE
Part II was not provided since Government collapsed due to
ongoing civilwar.
-
- 11 -
PROJECT CfMPLETION REPORT
LIBERIA
RUBBER DEVELOPMENT PROJECT (Loan 1544-LUR/Credit 786-LBR)
PART III
STATISTICAL INFORMATION
1. Related Bank/IDA Loans/Credits
Year ofLoanLCredit Title Purpose Auproval Status
A. Cr. 306-LBR To assist the Government to 1972
Cuipleted.Liberia Agricultural determine means ofDevelopment &
Tech. improving the Liberian-Assistance Project owned rubber
industry in
the context of implementingits plans for
agriculturaldevelopment.
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- 12 -
2. Project Timetable
Date DatePlanned Revised Actual
Identification )Preparation ) 9/76 9/76Appraisal 5/77 5/77
Credit/Loan Negotation 2/78 2/78Board Approval 3/78
3/78Credit/Loan Signature 4/78 4/78Credit/Loan Effectiveness 10/78
10/78Completion 12/83 6/85Credit Closing 6/84 12/85 12/85Loan
Closing 6/84 12/85 10/86
This project was identified by GOL and prepared by consultants,
Agrar-UND-Hydrotechnic (AHT), financed under Liberia Agricultural
Development andTechnical Assistance Project (Credit 306-LBR). The
Pilot Rubber Scheme (PRS)also financed under Credit 306-LBR, has
provided useful organizational,financial and technical lessons
beneficial to the project. The project wasrevised in March 1982 and
reappraised in September 1983.
3. Loan/Credit Disbursements
Cumulative Estimated and Actual Disbursements SUS$'000)
Z Actual/FY Estimate Actual Estimate
79 2300 93 480 5800 574 1081 9400 1173 1282 12400 2153 1783
13000 2830 2284 -- 4415 3485 -- 6106 4786 -- 8431 6587 -- 8500
65
Date of Final Disbursement: October 7, 1986.Comments: No
follow-on Project.Disbursement data for cofinanciers not
available.
-
LIBERIA RUBBER DEVELOPMENT PROJECTEstimated and Actual
Disbursements
13 -
12 -
11
E~~7 808828 48 88
z~~~~~~~~~~~~PRO 7F
10
5 9
2p
1
7 o~~7 80I-2a38 8 6~
6~~~~~~~~~~EID(Y
5~~0 Ata pria simt
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- 14 -
4. Pho0e,t IMlMtlotion;
Indlcator s
Appraisil Revised &I S Actual S ActualEstim ht te Actual
Ashr-iaal Rvised
------------ w----- acres --------------
Replanting 40,000 20,000 9,615 24 48Reh.biltation 23,500 14,000
5,640 24 40
(29300) (10) (16)
Note flgures ) Indicate area of trees actually topped.
Al Estimates of Rapl ating and Rehabilitation were scaled doun
duting 1982 supervision mis*lon,recognizing the factors affectlng
project implementation.
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- 15 -
5. Pro1ect Costs and Flnancin.
A. Proiect Costs
1983Appraisal 1982 Revised Reappraisal 2 Actual 2 Actual 2
ActualEstimate Proaram Eat. Estimate Actual Appraisal Revised
Reappraisa1
------------------US$ million ----------------
TOTAL 29.6 28.3 22.2 18.1 60 64 82
Building, Equipment & Vehicles 4.5 2.8 2.6Salaries &
General Services 7.6 12.3 10.0Training & Studies 2.8 0.4 0.3
NAReplanting 14.2 8.2 5.0Rehabilitation 0.5 1.4 1.2Factory
Rehabilitation -- 3.2 3.1
B. Proiect Financing
PlannedLn./Cr. Revised atAgreement Revised Reapgraisal Final
--- _---------- USS million --------------
Bank/IDA 13.0 442 13.0 462 9.3 422 8.5 472CDC ,.0 232 7.0 252
5.5 252 3.5 192ODA 1.4 52 1.4 52 a/Govt. 8.2 282 6.9 242 7.4 332
6.1 342
TOTAL 29.6 100 28.3 100 22.2 100 18.1 100
a/ ODA Provided technical assistance but actual figures not
available.
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16 -
6. Project Results
It is over four years since the project was completed. Datafor
assessing direct benefits awi evaluating economic and
financialimpact are not available.
7. Status of Covenants: N.A.
8. Use of Bank/IDA Resources
A. Staff Inputs (Staff Weeks):
FY PreaDpraisal ApRraisal Negotiation SuRervision Total
75 2.0 -- -- -- 2.076 -- -- --77 8.6 33.4 -- -- 42.078 -- 54.2
28.4 4.3 86.979 -- -- -- 11.9 11.980 -- -- -- 19.3 19.381 -- -- --
30.1 30.182 -- -- -- 24.8 24.883 -- -- -- 11.6 11.684 -- -- -- 19.7
19.785 -- -- -- 9.2 9.286 -- -- -- 3.5 3.587 -- -- -- 11.2 11.2
TOTAL 10.6 87.6 28.4 145.6 272.2
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17
B. MISSION DATA:
Month/ No. of Days in Specializat{ton Performance Rating Types
ofYear Persons Field Reresonted j. 9,tavua2u Tret 3/ Prob1.-s 4
Identification/Preparation 3/75 3 3
5/75 1 2 f9/76 1 2 -2/77 1 4 c
Appraisal 5-6/77 4 28 c,e,o -Supervision 1 5/78 1 3 c 1
2 10-11/78 1 5 e I __3 5/79 2 4 c,f 2 2 N4 7/79 1 5 c 2 2 N5
11/79 2 6 c,f 2 1 T,F6 4/80 4 14 e,f,o 2 1 T,F7 6/80 5 21 e,f,o 2 2
r,F8 9/80 3 6 e,f,o 3 1 M,T,O9 4/81 1 7 c 3 1 T,F,O
10 5/81 5 3 e,f,C,g,o 3 1 >,F,o11 11/81 4 2 0,g 3 1 .F,O12
3/82 2 9 c,e 3 1 T,7,O13 9/82 1 9 c 3 1 T,F,O14 2/83 2 4 c 3 1
T,O15 9/83 3 10 c,f,e 5/ 3 3 T,ti,O16 1-2/84 1 1 a 3 3 T,M,O17 2/84
2 8 c,f 3 3 T,M,F,O18 9/84 2 6 c,f 3 2 M,F,O19 2/85 1 1 c 3 2
M,F,O20 7-8/85 1 3 f 3 3 M,F,O21 4/86 1 4 f 3 3 M,F,O22 7/86 2 10
f,g 3 3 M,F,O
1/ a = Division Chief; c a Agriculturalist; e = Economist; f =
Financial Analyst;g - Operations Assistant; o - Other.
2/ 1 - No significant problem; 2 - Moderate problems; 3 - Major
problems.
2/ 1 Improving; 2 - Stationary; 3 - Deteriorating.
4/ M - Managerial; F - Financi4l; T - Technical; 0 = Other.
5/ Agriculturist from CDC and the Economist from ODA.
-
IBRD 13114R
I / 00,o 9 00,ttOO ,f./ ~~~~~~~~~~~~~~~~~~~~ rn~~~~T'S "oP hISS
ipo ProP.s, ilth LIBERIA
) K- ,~INJA ~ .2O~ RUBBER DEVELOPMENT PROJECT~~d~h - - '0000.
co~~o of Th. us.lo 84,,A F R I C A /KliI 8koo oo,io h
notnio.LIII
% it hjl otenD I'll ti 0 Ont Rubbser BeltLIBERIA /
P*~~~~~~~~~~~~~~~~~~~~~~~~~~~~VI 0' rh. Wor,d osh "n Moo%LIBERIA
010mo/ -' tuy ma ...,0 Pilot Rubbei Scheme
t,0O,,Oothnt 0' CCC 00 iOnCO iS Conce%s,onis and Rubber (5
I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~I'ROJECTSL 0 F A
~~~~~~~~~~~~~~~~~~~~~~Protect A 0po foundary
* Prooos,rodmr ing (renterS IE R RA . '(r* Proposrsd
H-eadquartersLEONE ~~~~~~~~~~~~~~~~~,, ~ ~ ~ C 0 U/N T\Y.AI
Piopo%(r'd Bort, Brainch
0 NE R A N D 7Pcwved RoadsMiNt dt,
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Loose Surfoce Roadis
Bendaia --u .r Road, under Construction
OUNT ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ to~~~~~~ kAtBAIternational
Airport:':Kf>,~~~~~~~~, 8apok, - ~ ~ ~ ~ ~ ~ LpcAirfields and
Airstrips
COUNTY Sa'ono COPA Motor Ports 70.S". ~~~~~~~~~,n ,,.Minor
Ports
( Trobnranborg ~~~~~~~~~~~ + -i +-- -.-- ~~Goi, uRailroads$Oloto
u T Y (b~ ~~~~~~~~~~~~~~~~ Capitol City
ROftERTSPOIt1' ® ~leDRCH ALL UBERCounty CapitalsGbaigbon CouT ~
- nteraioa Boundories
Broewovittev~Blp
MONROVIAGRANDA SA
+ ~~~~~~~6'00'-
BUCHANAN LAC
COMPACOUNY
zt.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~it
*0 tSr,. C~~~~~~~~12~ GREENILLM A- R Y Lon AND0
ni W wio~~~~~~~~~~~~~~~~~~~~ Ill W.~~~~~~~Ti,to -
*4 55 Sitt*t't4,t0'flthi . 44~~~~~~ .' .att" 0 20 4 0 ori
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MAY 1990