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Report No. 4200-LBR

LiberiaAgricultural Sector ReviewVol. IV' Supporting Papers Paper 5: The Institutional Framework

Paper 6: Problems and Possibilities ofPrivatization of Marketing andInput Supply

April 20,1984

Western Africa Region

FOR OFFICIAL USE ONLY

Document of the World Bank

This document has a restricted distribution and may be used bv recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization

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LIBERIA

AGRICULTURAL SECTOR REVIEW

CURRENCY EQUIVALENTS

Currency Unit = United States Dollars

WEIGHTS AND MEASURES

1 Metric ton = 0.98 long ton1 long ton 2,240 lb = 1.016 metric ton1 hectare (ha) = 2.47 acres1 acre = 0.405 hectare1 kilometer (km) = 0.62 mile1 mile = 1.609 kilometer

ABBREVIATIONS

ACDB Agricultural and Cooperative Development BankADPs Agricultural Development ProjectsBCADP = Bong County Agricultural Development ProjectBOPC = Buto Oil Palm CorporationCAO = County Agricultural OfficerCARI = Central Agricultural Research InstituteCDA = Cooperative Development AgencyCMEU Central Monitoring and Evaluation UnitCS = Cooperative SocietyDOPC = Decoris Oil Palm CorporationDPD = Department of Planning and Development of MOAGOL = Government of LiberiaIFAD = International Fund for Agricultural DevelopmentLCADP Lofa County Agricultural Development ProjectLCCC = Liberia Cocoa and Coffee CorporationLPMC Liberia Produce Marketing CorporationLPPC = Liberia Palm Products CorporationLRDU Liberia Rubber Development UnitM&E = Monitoring and EvaluationMOA = Ministry of AgricultureMOA Document "Liberia's Agricultural Development: Policy

and Organizational Structure" (MOA, June 1980)MRD = Ministry of Rural DevelopmentNCADP = Nimba County Agricultural Development ProjectRCL = Rubber Corporation of LiberiaRDB - Rubber Development BoardRRIL = Rubber Research Institute of LiberiaSRSP = Smallholder Rice Seed ProjectTCU = Town Cooperative UnitWARDA = West Africa Rice Development Association

FISCAL YEAR

July 1 - June 30

FOR OFFICIAL USE ONLY

LIBERIA


Paper 5

The Institutional Frar.ework

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

Paper 5LIBERIA


The Institutional Framework

Table of Contents

Page No.

A. OVERVIEW OF THE SECTORAL ORGANIZATON ............... 1

B. MINISTRY OF AGRICULTURE ............................ 2Objectives and Strategy ......................... 2Organization of the Ministry .................... 4Central Administration ........................ 4Department of Planning and

Development (DPD) ........................ 5Department of Regional Development

and Extension (DRDE) ..................... 6Department of Technical Affairs (DTA) ......... 7Bureau of Administration ...................... 8Bureau of Training ............................ 9

Staffing ....... ... 9Costs ......................................... 10

". PERFORMANCE OF THE MINISTRY OF AGRICULTURE ......... 11Assessment of MOA's Effectiveness ............... 11

Overall ....................................... 11Department of Planning and Development ........ 13Bureau of Training ............................ 13Bureau of Administration ...................... 13

Organizational Constraints ...................... 14External Assistance ............................. 14

D. DECENTRALIZATON .................................... 15Introduction .................................... 15Conditions for successful

decentralization ......................... 15Ministry of Agriculture and

Rural Development ........................ 16County-level coordination of

rural development ......................... 16Constraints at county level . 17Recommendations for improved

performance at county level .17

E. INTEGRATED AGRICULTURAL DEVELOPMENTPROJECTS (ADPS) .............. 19

General .............. 19

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Bong and Lofa Projects ........................ . 20Project Features ................... ......... 20Project Organization and Staffing ............ 20

Ni-mba Project (NIRDEP Phase I) ........ 21Project Features. .. rn........... ...-. ...... 21Project Organization and Staffing ............ 22Performance and Constraints.O.. ............ 23

Liberian Rubber Development Unit ................ 24Project Features9 . ....................... 24Organization and Staffing ........ ............. , 24Performance and Constraints .................... 25

F. PARASTATAL ORGANIZATIONS, COOPERATIVES,RESEARCH AND THE FORESTRY DEVELOPMENTAUTHORITY (FDA) ............... 1.. . . 25

Liberia Produce Marketing Corporation (LPMC).. 25Objectives and Main Functions ................. 25Organization and Staffing ..................... 26Performance and Constraints . ........... 27

Liberia Palm Products Corporation (LPPC) ........ 27Objectives and Main Functions ................. 27Organization and Staffin g ..................... 28Performance and Constraints ................ 1- 29

Liberia Coffee and Cocoa Corporation (LCCC).-... 30O-bjectives and Main Functions ................. 30Organization and Staffing...................... 31vIosts . . ..... e....o............e...........e.....a *¢ e0 XsI;O 31Perlcrfmance and Constraints....... ........... 32

Agricultural and Cooperative DevelopmentBank (ACDB) ........................ 33

Cooperatives ........................... . . 6Cooperatives De'Teloment Agency (CDA)............ 38

Central Agriculture Researchinstitute (CARI)................... .. 38

Performance and Constraints....... 40

Forestry Developmment Authority (FDA)......, 40Performance and Constraints ................... 41

G. RECOI FYENDATIONS .................................... 41

Objectives and Strategy for theAgricultural Sector- ................... 41

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Organization of the Ministry of Agricultureincluding dependent agencies,Parastatal Corporations and ADPs ......... 42

Central Administration . . ....................... 42Department of Planning and

Development (DPD) ........................ 43Department of Regional Development

and Extension (DRDE) . ................ 45Department of Technical Services (DTS) ........ 47Bureau of Personnel and Train.ng.......,. 48Bureau of Finance and Administ;ration .......... 49Agricultural Research ............. 49Integrated Agricultural Development

Projects (ADPs) . . ......................... 50Parastatal Corporations . ................. 52

Liberia Produce MarketingCorporation (LPMC) . .................... 52

Liberia Palm ProductsCorporation (LPPC). .................... 53

Liberia Coffee and CocoaCorporation (LCCC). . ..., ................ 54

Agricultural and CooperativeDevelopment Bank (ACDB', ................................. 54

Cooperatives and the CooperativeDevelopment Agency (CDA) ............... 56

Rubber Development Board (RDB) . . 56

Forestry Development Authority ('FDA) ............ 57

H. STEPS TOWARDS A MORE EFFECTIVE MOA . . 58

Annex 1 Phased Program for Reorganization of MOA

Annex 2 Technical Assistance Requirements for the Sector

Charts

24262 - Ministry of Agriculture: Proposed Departmental Structure24263 - Department of Planning and Development: Proposed Structure24264 - Department of Regional Development and Extension:

Proposed Structure24265 - Department of Regional Development and Extension - the

County Office: Proposed Structure24266 - Department of Technical Services: Proposed Structure24267 - Bureau of Finance and Administration and Bureau of

Personnel and Training: Proposed Structure

Paper 5LIBERIA


The Institutional Framework

A. OVERVIEW OF THE SECTORAL ORGANIZATION

1. The agricultural sector in Liberia consists of a number of diversebut related organizational units ranging from Government departments toforeign concessionaires and private traders.

2. The Ministry of Agriculture (MOA) is the principal institution in thesector. It is responsible for formulating and implementing the objectives,strategies and plans for the sector, by its own efforts and by monitoring andsupervising the various semi-autonomous projects, agencies and parastatal cor-porations. MOA also liases and collaborates with other Government Ministriesand authorities concerned with rural development, both in Monrovia and in thecounties and territories.

3. Four semi-autonomous agricultural projects known as "integrated agri-cultural development projects" (ADPs) have been established with overseas aidto promote, for limited durations, various aspects of agricultural and infra-structural development in different parts of the country. Three ADPs in Bong,Lofa, and Nimba Counties are concerned broadly with all crops except rubber;the fourth is concerned only with rubber and covers Montserrado, Grand Bassa,Bong and Nimba Counties.

4. Agricultural research for all crops except rubber is the responsi-bility of the Central Agricultural Research Institute (CARI). Rubber reseachis performed by, and for, foreign-owned concessions (see the end of thissection).

5. Parastatal corporations are Government-owned bodies, with boards ofdirectors, many of whom are ministerial ex-officio appointees. There areseven such corporations: (i) Liberian Produce Marketing Corporation (LPMC)which performs a number of produce marketing and distribution functionsincluding buying, processing and selling local rice, buying and arranging forexport and selling coffee, cocoa and oil palm kernels, selling palm oil,importing and distributing rice; LPMC also operates oil palm estates andmanufactures palm oil; (ii) Liberian Palm Products Corporation (LPPC) whichoperates smallholder and industrial plantations of oil palm and coconut, andproduces palm oil; (iii) Liberian Cocoa and Coffee Corporation (LCCC) whichassists farmers to develop coffee and cocoa holdings either as individuals orin community estates; (iv) Decoris Oil Palm Company (DOPC), established as acommercial entity with equity, a board of directors etc., to establish andoperate an oil palm nucleus estate, give technical advice to smallholders andconstruct and operate an oil mill (this company is not mentioned further inthe report as no organizational changes are considered necessary); (v) Agri-cultural and Cooperative Development Bank (ACDB), 97% Government-owned,

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responsible for providing credit for agricultural development, for assistingwith cooperative development and mobilizing rural savings; (vi) Liberia SugarCorporation (LIBSUCO); this was not reviewed by the mission; and (vii) ButoOil Palm Corporation (BOPC) which was hived off from LPPC in 1982.

6. Cooperatives established for marketing (buying and selling) all pro.-duce except rubber and palm oil exist throughout the country. Efforts todevelop credit and input supply functions are being made in ADPs. Coopera-tives exist from the village level Cooperative Service Unit (CSU) to thecountrywide Tungban Union Cooperative in Bong. Private traders are activemainly in buying and selling produce.

7. The foreign-owned agricultural concessions are active in the rubber,forestry and oil palm subsectors. There are six rubber concessionaires whooperate nucleus estates, assist outgrower farms and process their own andsmallholder rubber. In addition, there is one foreign-owned and operated com-pany which processes smallholder rubber exclusively.

8. The Forestry Development Authority (FDA) manages and regulates theuse of national forestry resources. Thus, MOA and FDA together have juris-diction over almost the entire land surface of Liberia. -Both have an interestin the long-term division of land between agriculture and forestry.

9. In subsequent report sections, the structure, staffing and perfor-mance of these units (except for DOPO, LIBSUCO and BOPC which is considered inconnection with LPPC) is assessed, while in Section G recommendations forchange in objectives and strategy and in the structure and operations of thesectoral institutions are made.

B. Ministry of Agriculture

Objectives and Strategy

10. Current objectives for the agricultural sector are stated in theSecond National Plan (1981-85) as follows:

(a) To increase the involvement of the large mass of Liberian farmfamilies in the development of the agricultural sector.

(b) To stimulate increase in productivity, employment; and income ofLiberian farmers.

(c) To promote equitable access to means of production, and correspondingwidespread and equitable distribution of benefits from agriculturaldevelopment.

(d) To promote diversification of production in the agricultural sector.

(e) To expand agriculture as a principal base for self-sustaining devel-opment.

11 It s pow Sd ed o - n i-e >LC coon; >-c. 'sin to'f- .abovE objecetaves, an eparstsi-o-ir , r r

inclutdinig educatioi,n 'u,lrg -. - .i - -e-

and communicat"ions is -,ecessa-e -publication A u-.bsuia's Agrew uiroi al - --Structure" (Juin;e 198C, u rd t e.2 DI -. ; 7

further stated Its brc- , --output until ffi&55s.VC e _ .f... . r s--o. .=. .. - .; .

population, consstjuent i " -u'..-.L.c':, S ;o ,

sources9 The MO,! aga.ia 'or-t;g i:'> Os, .'.''= - a . . ororga niz ational and Lns r<l _ rn roro so - " . -,

development.

12. Strategy to 5flJ75" t"i3 7<s.L.ipie-: eagricultural seca-it-o-r tunIc:' o -i-; on XL <rt . -- g, - .

Book and t he ocrdl !o.:::o&'? Pl* i.

(a) devolopw.ent- o3 an eff'ect- < aor:-. Lr;'~ c

(t), decentral7zaL .--. ar., '-z p 1 ovoos-En ..-. a' sot ;S'

tu*-ra7 prCg-or,s ' .Y . , -----.- !

regions th;e .un- r . I^ '

county ard t r-: r snuld -,

dno-w to distri r,. e';. c -

efforts -.uta The ode or --L..-. -!-- ' 5 -as these -Lr.eaoinr dec r -; U' ,' ' ..

(c) prov-i Nfl 0'±D tLe'hnoc-sC ','-3/1,?n 't N.i F- -''' ;r -- -- '

ment;

(d) an exsanded and ±;s- ocv agrici---p a-

(e) agricultural trasing?

(f) ensi.r'ag tir,at tiler is t tquate and proper ly crud ins ten: - .-.:... , Kr ,-.

kets, credit i <wO-e I aced cud o.-,. <: -. :tur 1a eleme, t,t2,

( g ) rresstu.ct.rrisg it- hegrt.sLNi.o'''. OF _i- f. I'

(i) plannina in suppoi' rl-t of' c-rn 2 c : i .p

tesi !Lu agrx c- lt,e. .' - .-

for the achieven, 1 eeic. --r -e

(i) iunern-e.tt;nnal - s- ;imq toX

( j) providing aLL).d equac : Kr e- a. s'i7is '; \r ug--

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(k) implementation of a program approach to agricultural develoment, incontrast to a strong emphasis on projects which are typically limitedin time scale, geographical area and functional area; and

(1) the use of producers' cooperatives for achieving specific targets inthe output of food and cash crops.

13. From the foregoing it is clear that MOA will not undertake productionactivities directly (contrary to the expectations of the new government short-ly after the April 1980 coup), but is to strengthen supporting servicesthrough improved research, training and a decentralized system of extension.Some of these strategies are subsets of others, but all contribute to a state-ment of overall MOA strategy. The Second National Plan and the Blue Bookcontain explanations and elaboration of each of the above elements. Theobjectives and strategy as stated above represent a formidable task for theexisting MOA and its dependent semi-autonomous parastatals and integratedagricultural development projects.

Organization of the Ministry

14. MOA is intended to be the central agency for implementing the objec-tives and strategy for the agricultural sector, through its own organizationand by the monitoring and overall supervision of a number of semi-autonomousagencies and corporate bodies performing various related tasks in the sec-tor. MOA's main function will be to establish and operate an effective ex-tension program throughout the country and to provide high quality seed andplanting material. These services are to be directed not only to subsistencefarmers, but also to so-called mid-level farmers emerging from the subsistencesector into cash crop farming and requiring more sophisticated technical ad-vice, and to the larger commercial farmer.

15. The Blue Book referred to above contains wide ranging recommendationsfor the reorganization of MOA and its method of operation. These recommen-dations have never been formally approved by the present government. Despitethis, MOA is going ahead with the implementation of most of the structuralproposals, that is to say, they are appointing staff to EL number of new ormodified jobs which have been identified in the report. The present positionis, therefore, transitional and difficult to define with precision. Conse-quently, although the structure outlined below broadly reflects the presentposition, staff levels must be regarded as approximate. Details of thestructure appear in the following paragraphs. Summary staff levels appear inpara 43.

Central Administration

16. The MOA is headed by a minister with a substantial administrative andsecretarial staff of his own. Responsible directly to him are the PrincipalDeputy Minister and the Internal Auditor. The Minister is also personally re-sponsible for the overall supervision of the various semi-autonomous agencies,projects and corporate bodies over which the MOA has jurisdiction. He per-forms this duty usually by acting as chairman of project steering committeesor boards of directors.

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17. The Principal Deputy Minister (PDM) is nominally the chief executiveofficer of the MOA, advises the Minister and acts for him in his absence. Aschief executive, the PDM is responsible for the three major departments ofMOA, namely the Department of Planning and Development, the Department of Re-gional Develoment and Extension and the Department of Technical Affairs, eachof which is headed by a deputy minister. However, these deputy ministers con-sider that they report directly to the Minister for all practical purposes.This seems to be because the PDM has devoted much of his time in the MOA toadministrative matters. The PDM is also responsible for: (i) the Bureau ofAdministration, headed by an assistant minister; (ii) the Bureau of Training,headed by a coordinator (this function was included in the Department of Tech-nical Affairs by the Blue Book); (iii) the Office of Public Affairs, headed bya Director, whose job is to inform the public about MOA; and (iv) the Agri-cultural Attache in Rome.

18. Both the assistant minister and the coordinator are of equal rank andhave charge of a bureau. However, the former is a political appointee and istherefore rather more likely to be removed in the event of a change in govern-ment. Divisions which are sub-divisions of a bureau, are headed by directorswhile sections, which are the component units of a Division, are headed bysection heads.

Department of Planning and Development (DPD)

19. This department is intended to provide the planning, monitoring,evaluation and reporting capability for the MOA so that: (i) the most appro-priate development objectives and strategy may by selected for the agricul-tural sector; and (ii) performance in attaining objectives may be reliablymonitored and reported to relevant senior officials in the MOA and elsewherefor corrective action, if any. The component units of the department arebriefly described in the following paragraphs. Unit heads all report to thedepartment head.

20. The Bureau of Planning and Evaluation, headed by an AssistantMinister, is intended to monitor, evaluate and report on existing programs,projects and activities performed by the MOA and its satellite agencies, pro-jects and parastatal bodies and perform analyses of alternative policies,programs, projects and to prepare sound plans and budgets for implementingthose selected.

21. The Bureau of Development Institutions, also headed by an AssistantMinister, is intended to investigate and analyze the need for and the existing(if any): (i) produce markets and market channels, and (ii) institutions orfacilities for credit, input supply, infrastructure, farmer associations, landtenure, relevant social and cultural phenomena, and to make specific recommen-dations for improvements.

22. The Statistics Division is intended to provide all the statisticaldata required by the MOA. The Division is expected to establish data needs,to collect and process data, to perform statistical analyses, and to reportresults. At present MOA is attempting to implement the systems recommended by

:- ffL - :-McueUra. surveyc Perma-t ri e ac- tis of about

:,--. o sz !.t>>v -ern proposed In

9f 2 r5 t,3 M~A3-i o'- .' '7)'' '~ . ' 41'n r-,i)a-> d '<. p,,, r9Ct to a bureaui

.- -- r;. - d V- o,r n-ate the ac--2 ;'2 -- U. - . ,-- :< -z':::: ......... ;.-;1'. :< .--. >,--<\-:->[.> ~ ~. ,- r a s tata' rcing; ei Perfo.-M

- : :Le .--- -svl_ :^.rc5t-ia'n aw-ed oo-rdi3^.nate the handover::-E ltm i" acJtv t ies conducted by

~ _ - ; i -. < _- .; .i- -.' '.~_J- n en<, ea to co La rate S- th tile- -sr.'ter-al asis- ne, to be

- ?.e h a: anem,,en: t o asilstance, and toz- - \- is fore e carrent develop-

?'- '. -rF *-r ., _ _,,

, e i-,- § an admi nister the MOA ex--)--->-S ?-- .. a:; f t: -<-9. - to .-- :3*,3n---ln 1<2 - v±T.ol ng- th, ArLi e provir-sio-on cf

LD -: T- - :? l-. =: Et - - 2: : -~e - c--; -. tf -. e-ponsibiLitis for:' .i - ' -; - ---<<, - -; !>r ~>' ,- z ,¢? -,eK t'- tn he De-s-nut',y Minister for,.- ; - , rc ± C<o ttee o- e cf the

n0 0 . i , ; _, -41s,, t Y.'r decenrlaization:: : --. - .= -;..- , - ,,;-,.- > -- -;- - -, 5ja, coInty agricultural

::--'':-.,.-J, .x, ;-;--.' -2 A .t -.-, *;-,xi-.t: - :1- - deilc^:h f''ri' hen "III C'Cift iisg This' - --' -E? ^r e l - v- - ' a ''- ' e--> ''-e E -v a rtha'" - - av been

a2 attng, screeninge o-- .; -- n . --, -ents of three

. - -:- -.. .:- S-, s . -^ mvi ng from sub-:'.--:^. '-f:-' - :::-..' -~^ i ^'t,,-, ' i e (' ' - e9eotive d-ssemi-

',n,:,,3 ,- r - - e ; all e ie ILs of 'armers;0 :.:dt ;,* -,,i.'--)- 0'-': '.n usd . :g .' ; - g f,_a-back fromF-,-.-t . ,.-, .- t-- e-? Lo.;-,.wi,JJ .-- c i-''.tU-,,-;:;,-' ae-§r>--93pC coorLinated with

-u aly in conneJ sJ_3:: wiJ t h rural.-,- ,- X, ~ 0 ^ 3- '. - _ -' '-: ' ?treto _aOgcnal Devel-

scA j- ar direcj-, ~~~~~~~~~~~~-'--i ,;-- - - , ' -- p,-<- .--. ^.wv,r;, S-neSt- riso;o

ficea orovSion Oi-a -earfcrs and too ensuring co

-^ -, oher aspects of rural devel-,,,- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~ae , -,<a:: ,. ,--.l -} -: .,-art:Fii e< l£re ecently 'Lieen

,.;s - 4- '- ie -inst-eon counties of-- =s,a the other for the

- . - ~ -w' t . b2 sor e nd i4 arnrlcla-lJ d

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28. County offLces, each headed by a County Agricultuural Officer (CAO)are responsible for: (i) subsistence level extension, which includes districtagricultural officers and most of the extersion staff in the field; (ii) mid-level extension in such subjects as irrigated crops, upland crops, tree crops,livestock, inland fisheries, land development (engineering); (iii) distri-bution of improved seed, planting material and livestock; (iv) identifying andhelping to solve problems concerning support services: marketing, inputsupply, farmer organizations, credit; (v) county office administration; and(vi) coordination of miscellaneous MOA elements not part of DRDE, such asstatistics, agricultural research, etc.

29. An Extension Support Division, at present without staff, is intendedto provide subject matter specialists who will, in the appropriate technicalarea: (i) develop technical packages for each farmer level; (ii) support ex-tension activities at all levels, and advise commercial farmers directly;(iii) assist in training mid-level and rural development MOA extension person-nel. The following technical sections are envisaged: food crops, tree crops(including rubber), livestock, inland fisheries, support technology, land de-velopment, rural youth, home economics, and information and editorial support.

30. In addition, six staff assistants with salaries varying between thatof a Director and Section Head report to the Deputy Minister and are respon-sible for keeping him informed on development and recommending improvements inthe following areas: rural development extension, mid-level extension, sup-port institutions, crop/animal distribution, administration and training(vacant in June 1982). A Technical Package Committee which has never met isintended to screen all material recommended for extension and determine thecomposition of packages for use by the various extension channels. Members ofthis committee would include staff assistants for extension and training, andthe Directors of Planning (Department of Planning and Development) and Exten-sion Support Divislons.

Department of Technical Affairs (DTA)

31- This department is intended to be responsible for: (i) providingstaff supervision for major MOA program areas relating to crop and animal mul-tiplication, and to all aspects of MOA training; (ii) various regulatoryactivities for which MOA is responsible, and (iii) providing coordinationbetween MOA and the Central Agricultural Research Institute (CARI). Subdivi-sions of the DTA are described briefly in t'ne following paragraphs.

32. The Bureau of Crop Multiplication manages four seed rice multiplica-tion projects of about 7,900 acres available area, of which about 1,600 acreshas been cleared for planting.

33. The Animal Multiplication Bureau is currently responsible for:(i) three multiplication projects of about ',500 acres total available area,and an additional two which are inactive for lack of funds; (ii) a VeterinaryServices Division, which operates a laboratory and regional services through-out the country; (iii) a Land Development Di-vision which develops and executesland engineering projects, for example, for developing swamps; and (iv) sub-ject matter specialists in rural youth, home economics and food crops whichhave not yet been transferred to DRDE.

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34. The Bureau of Regulatory Services is responsible for: (i) PlantQuarantine Division, which implements plant and animal quarantine regulationswithin Liberia and at border points, and (ii) Fisheries Division, which is re-sponsible for aspects of both marine and inland fisheries. In the marinecategory, the division supervises the collection of data on fish stocks, theissue of fishing licenses and the provision of extension services for fisher-men. Concerning inland fisheries, the division liaises with CARI staff whoare responsible for a research program and for offering extension services tofish farmers, including the supply of fingerlings. The division is proposingfor 1982/83 to take over staff from DRDE and CARI to improve their control ofmarine research and extension services for marine fishermen and inland fishingoperators.

35. The present organization of DTA differs in certain respects from thatproposed in the Blue Book. Blue Book proposals which have not been implemen-ted are: (i) that crop and animal multiplication should be the responsibilityof only one bureau; (ii) that land development and inland fisheries should bethe sole responsibility of DRDE; and (iii) that the Bureau of Training shouldbe in DTA. Also certain animal regulatory functions are 'being performed byVeterinary Services Division.

Bureau of Administration

36. This bureau is responsible for the provision of administrative ser-vices for MOA in Monrovia, and for supporting and functionally supervisingadministrative activities in MOA's regional organization. The bureau is alsoexpected to support the satellite agencies and parastatal bodies. The scopeof the bureau's responsiblities now includes procurement and supply, personnelmatters, finance and accounting, transportation, communications, maintenanceof physical assets, security, and provision of general office services. Themain subdivisions of the bureau are briefly described in the following para-graphs.

37. The Personnel Division is responsible for the recruitment, promotion,transfer, dismissal of personnel, the administration of life insurance, socialsecurity schemes, and the maintenance of personnel records throughout MOA, inconsultation with the Civil Service Agency.

38. The Finance Division (known as Financial Management Service in MOA)is responsible for maintaining accounting records and providing regular and adhoc financial information concerning MOA's financial resources. The divisionsupervises the preparation of the MOA budget of income and recurrent expendi-ture in conjunction with Planning Division. Further responsibilities includearranging for the disbursement of funds, preparing the MOA payroll for proces-sing by the Ministry of Finance (MOF) computer, and maintaining the petty cashfloat for MOA.

39. The Procurement and Supply Services Division procures through theGeneral Services Agency (GSA) and the MOF, clears through Customs, warehousesand distributes, all materials, supplies and equipment for all departments ofMOA. A team of expeditors is maintained (also by the Finance Division) forhastening the flow of paper through GSA and MOF.

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40. The General Services Division is responsible for: (i) maintainingthe physical assets of MOA including premises, grounds, vehicles, and equip-ment throughout Liberia; (ii) arranging transportation of materials and per-sonnel; (iii) ensuring the security of MOA premises and assets country-wide;(iv) providing telex, telephone and radio services; and (v) providing a docu-ments typing, filing, archiving service; and monitoring the MOA library whichcontains technical books, journals, films and reports from Liberia and inter-national organization. The General Services Division comprises five sectionsresponsible for documentation, transportation, maintenance (buildings,grounds, equipment), engineering (vehicles), and typing pool. There are twoengineering workshops in Monrovia and one each in Maryland, Grand Cape Mountand Bong Counties. A new workshop is being established in Grand Gedeh.

Bureau of Training

41. The Bureau of Training is responsible for: (i) developing a compre-hensive policy on agricultural education and training; (ii) providing an in-ventory of training needs at all levels for MOA staff, farmers and others inthe agricultural sector; (iii) developing plans and programs for meeting theseneeds, from external sources or from within MOA; this includes the specialtraining associated with the restructuring of the MOA; (iv) coordinating allaspects of training provided by agencies outside the MOA; (v) conductingtraining where this is more efficiently handled by MOA than by outside agen-cies. The Bureau is divided into two divisions; (a) training, programming andcoordination, which is intended to undertake all the above responsibilitiesexcept for direct training; and (b) Instruction Division, which is intended toorganize and conduct MOA-based training.

Staffing

42. The mission prepared a listing of MOA staffing analyzed by depart-ment, bureau, division and in some cases by section for May 1982 and alsoaccording to proposals for the 1982/83 budget. Staffing figures for May 1982are approximate only and are the best mix of figures available from the stafflists, the revised 1981/82 budget or the head of the unit concerned. Becauseof the reorganization of MOA which is in pr-ogress, and the lack of up-to-daterecording of staff movements between different subdivisions of MOA, stafftotals vary according to the source.

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43. A summary of the MOA staff levels is given in Table Al below:

Table Al: SUMMARY OF MOA STAFF LEVE"S

May 1982 May 1982 April 1982 1982/83Department/unit Mission Personnel Payroll Budget

Figure Division Proposals

Central Administration 36 39

Planning & Development 171 168

Regional Developmentand Extension 8`1 836

Technical Affairs 271 412

Administration Bureau 326 351

Total 1635 1551 1594 1806

Notes: 1. All totals exclude Cooperative Personnel2. The MOA payroll total includes an estimated 730 persons who had

been recruited but were not on the payroll in April 1982.

Costs

44. The mission prepared a statement of MOA expenditure for the 9 monthsending March 31, 1982 analyzed by expenditure co3t category under the headingsof revised 1981/82 cost budget, funds allotted by MOF for the 9 month period,and expenditure for the 9 month period. This is based on the MOA cost analy-sis before expenditure is finally approved by the MOF. Therefore amountsquoted are likely to be more than the actual expenditure. A summary of thisinformation is given in Table A2 below:

Table A2 o SUIRMARE OF MOA EY-.PEiNDTTUF.FP cM -7/ /8. Th,', ;r j02 1.

Department cost Revised 81e,'d for the 9 mo--:m. re.ct _~~~ige tm~ c7Budge Al1,IreD t^r4 <il E-< ,r.. t'

Central Administration 6 2 6 77- Salaries only C- L )

PlannLng & Develcpmerfet I7) 'Salarles only 9r,

Regional Developmentand Extensirn 2 - Salaries only-

Technical Af faiRrs l 8- Salaries only 7' 2

Administration Bureau d2 7- Salarles oly-y 7'

T1raining Buzreau- Salaries only __________

Total Salaries 5,614 /i 6

Overall Total

I/ Subject to final payryer !t by MEOY

45. Two preliminary cenclusions .,an '- s tru.n -o t.'' ojoaV sl 71that MOA actua L exDen ditu re and Ml OA all tI I cr rre ai4g ni t'ic._, 7 JieSsL thilanadjusted budget, at 975% and 96% respe3`ivalv for sela 7 S , a F0 ar'lespectively for t.tal costs. Second, thd rt 'orr the e .tion, salary cost as a propercion ;,t' cota1 e):pen.J. t e is i'-r'-i h 2 a-.average figures of 89;%, 9 ,0%, a"a 935e -,'or a et se' -'e-n ani or 2 0 Aactual expenditure respectively. This -i frn iJ;^ - t'-5- h ro. .5 e lo f

propcrtion oIf total c-st (1 1 % ) a t tre -u a t,o+al rr r-, ->rq ,_o decreas-to 7% or less for actual ex-oendit urea

P Pertorrimance of -he ]tIlrl ry f Agr-oc01.tc- e

Assessment of M0 :s Ef9fectiveness

(a) Overall

46. The effect-iveness of X.5i't m'1S .. by to Ce 'U bh 11r).

this large orgaa n iatio i achiev I'c oKC; e aai 7:2 -- c Jn o -- hehe2n . to re:ar

- 12 -

set out in Section A of this report. The MOA for this purpose is defined asthe organization described in Section A, that is excluding the four IntegratedAgricultural Development Projects and the dependent parastatal corporations.

47. MOA, as presently structured, staffed and funded is not able tofollow the above-mentioned strategy and will not be able in the foreseeablefuture to improve significantly on this position. This is not to say thatreal improvements could not be made; they can, provided ii) that certain far-reaching changes are implemented not only in the MOA but in the governmentmachinery as a whole, and (ii) that time scales for such changes are realistic

and not overly ambitious. These changes are considered in Section G of thisreport.

48. In order to concentrate on a program approach (national and open-ended) rather than a project approach (area-based and within a defined time-scale), MOA has recently undergone a reorganization towards a more decen-tralized structure but has not developed an effective ex-tension service tofarmers. The main constraints which must be removed before an effectiveextension service can be delivered as planned are:

(i) a lack of improved planting material, livestock and modern inputs toextend to farmers;

(ii) a serious shortage, in some cases, an absence of logistical supportfor regional staff, that is to say vehicles, fuel, supplies, to allowadequate supervision, assessment of individual performance and on-the-job training by county, territorial and district staff. Theextent of the problem is indicated by the MOA 9--month expenditureanalysis in para. 45. This shows that staff cost accounts for morethan 93% of total recurrent MOA cost;

(iii) a serious shortage of trained staff at all levels in the regions andat head office. Regarding the extension staff in the field, thecurrent practice of using high school graduates with a thin veneer oftraining from bodies such as the Rural Development Institute to con-vince farmers with a life-time of experience and a degree of scepti-cism should be questioned. The absence of formal management trainingfor all senior executives in the MOA, including heads of departments,bureaux, divisions and sections, counties and dLstricts must beremedied in the earliest time;

(iv) inadequate arrangements for monitoring, evaluating and reporting onthe work of MOA, particularly the extension and crop/animal multi-plication functions. It is not generally possible at present fordepartmental and bureau managers to know at frequent intervalswhether targets and objectives at lower levels are being met, and inmany cases such targets and objectives do not exist. The CentralMonitoring and Evaluation Unit (CMEU), established in the MOA underLofa Phase II Project, is still in its early stages and will requiresome time to be effective;

- 13 -

(v) lack of prompt financial reporting of operating expenditure and ana-lysis by cost center. At present, for example, Administration Bureaucosts are reported by six cost centers, while the costs of theDepartments of Technical Affairs and Regional Development andExtension, with budgets of $1.5 million and $2.5 million respective-ly, are not sub-divided at all;

(vi) overstaffing of MOA at current workloads for many categories ofstaff. It is difficult to be specific from such a brief review butfrom observation, discussion and other sources, a minimum of betweenone third and half the entire work force could on average be removedover a period of six months or so without disruption to output. Ahistory of overstaffing in MOA (and no doubt in other governmentagencies) has led to discouragement of those individuals in MOA whohave some interest in their work and has bred a tradition of idlenesswhich will require determination to change in the short term; and

(vii) inefficiency of the GOL machinery in respect of: (a) expenditureauthorization and payment disbursement; and (b) appointments,transfers, and promotions in terms of approvals and procedures (ittakes about 3 months for a new recruit to be placed on the MOF-controlled payroll).

(b) Department of Planning and Development

49. Although this department has about; 170 staff it is hardly function-ing. A substantial amount of USAID and FAC/UNDP funds have been spent on thisunit over several years and it is still unable to perform without detailedsupervision of the required functions of st;atistical data design, collectionand analysis, planning, monitoring and evaluation of ongoing projects and pro-grams. No reasonably reliable annual agricultural statistics have been producedsince 1977. There is no effective high level coordination and control of thenumerous assistance programs financed by foreign donors (see also para 54).

(c) Bureau of Training

50. This bureau was established early in 1980 but has achieved almostnone of its original objectives in two years partly due to lack of funds andpartly due to lack of interest by senior ministry officials. In this vitalarea, where poor performance has been one of the main constraints on satis-factory MOA functioning, adequate funds must be allocated and top managementsupport must be provided. The training committee has never met.

(d) Bureau of Administration

51. Constraints worth mentioning here concern communications, vehiclesand maintenance support. The telephone system within the Ministry does notfunction, and is replaced by an expensive and intrusive radio available onlyto divisional managers and above. Vehicles, spare parts and workshop equip-ment are urgently required throughout the country. However, real needs mustbe determined in relation to the real exterlsion workload.

14 -

rz;L O 1Z- r- "a r .- rT ; i I rlB

52.roe ga-nc ZCO_l Of - as removed some earlier organiza.-

(-'. .- 1 Dar. O n -C e arnd Developm-ent is over-comrplex with too

.-...:;J- sin_1 aco2.125 p .rf o cunctoons that are stimilar in

, of 3L -Pu Atn.-ia'stration is too large with too many Im,portants L -a; u5-b' ne relatively jiunror imrwter

r ~.S: !f Aar ¢1. n. _.0I1S l1nder OnneCti%e1YjU;r 1L1ster.

;-ei ee ents Gf dcui c--tion Setween the Departmient of-r c- a ._s:an-. t.'eg`onal Development and Extension and it isr-> cleaa i'he; e -he cente of technical expertise (as opposed tosttensiciss, e.t?rse, l.e

--reO is n- un c-Lt>U- iA resporisible for land planni-ng and

70 -.:' ; .3..- S- .s o_ e.L ICathe Minister of A-2sriculturse? who is a highro -+t - a t. proprsaze senira official in MGA

tc -e-; et - eM3~.ns,I- sinterests on the boards of parastatal corpora-1Cm N, coI ee cis 9-g :`rom within Liberia and overseas

1.-. ~.' t S>&,£ .351 th:- - pr ae hLe requisite continuaity and concentra-Li -. _ c , a .e d- -e---i - § these enterprises, particularly dur.ng a

,ere r be t to mentioned a mrajor const raint not only in agri-t ;LF.'. a.: Vue2. >,e-l uLo'-n cut alo -: ot.her sectors -n Tiberia. This

'"'tn.-:.es toattit o n i applicatiom and control of externals:-., '- Aor - ^; -L- a mc<c>!7ver *.^.f rx .f-nsare aid programs provide.,d by

;- o- ig to sact oal support ando a zf S S a U0-, ar-s ue uto: (iD *a lack of iLnter-

-RgOV>n;:CK?t ?rSUr e t,hat to 3rhgrams are consistent with and sup--, e"me .- e ta t e Ilci iOr. nes nd strategies, and are also complementary

* n a t Jon between the aid agency and theF-4C4 -e3.. -e 'fo 7 a-al tiob local preparations and supr,orz are adequate for

.-. 6^. . a5l-fafdi.>_efsf -Lif t-e gaRencyf concernaed Iiii) a lEck of monitoring and;'- d i-. tie a- d -ogram Asn at the conclus4on to ensure that the ob-

' a -s o fre being achk a Peaf the aid agencies and the1 / . _ P in tU, i tu t s c;` a .L.`P D i . I 01.ei ) a je .oInt,1t y resp onIs ible f"or this statse

a s ntaing of thAe planring and control o<f external aid Oro-g -OCS ltis . gontl needed. 8

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D. Decentralization

Introduction

55. Decentralization means the movement or distribution to regional orlocal centers, of functions, powers, and the resources - such as people,equipment, funds, supplies - needed for the functions to be performed and thepowers exercised. The lack of any one of these elements will result in sub-standard functioning of the system.

56. Decentralization has been the subject of much discussion and someaction in recent years by GOL, but there seems to have been at best a piece-meal approach here. Urgently needed now is a practicable centrally approvedpolicy and plan involving all sectors of GOL which can be implemented in acoordinated manner, and involving action and change centrally as well as inthe regions. It must be stressed that the determination of such a plan forGOL is outside the scope of this report: the main concern here is for MOA andthe impplications for other agencies concerned with rural development.

57. If decentralization is considered as a means of speeding rural de-velopment, a number of advantages and disadvantages when compared with a cen-tralized system may be identified. The most important advantages are:(i) better identification of local problems and requirements; (ii) improvedability to address and solve the problems and to meet the requirements andtherefore to manage local programs and projects. Therefore there are fasterand more appropriate actions and responses; (iii) better knowledge of localconditions and people which is needed because these differ markedly socially,economically and physically from one locality to another. Better knowledge ofthe farmer in particular will be needed in order to help tailor ideas to fitlocal conditions and to obtain valuable feedback, and to help (to the extentappropriate to his capabilities and inclinations) develop and guide local in-stitutions required for the implementation of programs and projects - farmerassociations at the village level for example; (iv) better development ofMinistry managers in the regions who will exercise delegated powers and res-ponsibilities and be held accountable for results; and (v) reduced operatingcosts due to less transportation and communication between center and regions.The most important disadvantages are: (i) 'Loss of day-to-day control from thecenter, since some authority in personnel, financial and operating matterswill be delegated; (ii) greater need for capable, well trained, responsible,honest staff, who can act to a certain degree without supervision; (iii) needfor better definition and documentation of regional jobs due to lack of day-to-day control; and (iv) greater operating costs due to need for regionalinventories of cash, supplies, etc.

Conditions for Successful Decentralization

58. When the advantages and disadvantages are carefully weighed it isclear that a degree of decentralization is highly desirable in Liberia inorder to provide the best support service in the regions generally and to thefarmer in particular. However, certain conditions must be met if the conceptis to work effectively: (i) capable regional management with clear and

- 16 -

detailed responsibilities (and accountability) consistent with overall objec--tives and strategy; (ii) delegation of some authority for day-to-day deci-sions; (iii) provision of adequate but not excessive resources of trainedstaff, funds, vehicles, equipment, supplies and accommodation, for the tasksto be performed; (iv) a reporting systen which will indicate periodicallyresults in key task areas to the county manager himself and to the centralministry. These results should be compared with targets where relevant, andaction taken promptly at the correct management level when required; and (v) acentral administration which can provide back-up support technically, financ-ially and in matters of general administration.

Ministry of Agriculture and Rural Development

59. The strategy of the draft Second National Plan includes strong empha-sis on the general decentralization of MOA to the regions and the coordinationof MOA efforts with the development activities of other GOL agencies. So far,many MOA staff have been appointed to regional jobs in the counties, from theDepartment of Regional Development and Extension, and from other MOA units.As mentioned in Section B they are not effective for lack of logistic support,inputs (mainly improved planting material), training and funds, but also inthe case of the CAO and his assistants for lack of authority delegation andthe knowledge and management skills to allow the authority to be used.Recommendations for remedying this situation over a practicable time scale aremade in Section G of this report.

60. Further constraints on the effective functioning of MOA in the coun-ties are: (i) ineffective individual functioning of other ministries respon-sible for aspects of rural development, particularly the construction andmaintenance of rural roads, village wells, but also schools, and clinics; and(ii) ineffective planning and coordination of rural development projectswhether carried out: (a) by sectoral ministries, and funded centrally,(b) through self-help schemes or (c) out of the small development fund whichis provided annually by the Ministry of Internal Affairs for the use of thecounties and territories. The inadequate performance of other Ministries isin all probabili;y due to reasons similar to those cited for MOA and should beresponsibe to broadly similar remedies. Planning and coordination of ruraldevelopment projects at county level is a separate and important issue andwill be briefly considered in the following paragraphs.

County-level Coordination of Rural Development

61. Successful decentralizaton of local Government implies at countylevel effective planning for all projects, implementation of local projects,and some monitoring and supervision of projects financed and implemented bysectoral ministries. It also implies an adequate planning process by centralGovernment in which recommendations from the regions are considered in con-junction with those from the sectoral ministries, and the final plan is madeknown to the regions. This process is not functioning well at present.

62. The County organization is structured as follows: Each of the ninecounties is administered by a County Superintendent (CS). He is appointed bythe President of Liberia and is his direct representative, at the same time

- 17 -

being responsible to and part of the Ministry of Internal Affairs (MIA). Thelocal Government consists of:

(a) the office of the CS and his MIA staff' which are collectively re-sponsible not only for maintaining law and order (the traditionalrole) but also for those aspects of rural development and administra-tion which are not undertaken by the sectoral ministries, and

(b) local branches of the sectoral ministries, whose personnel reportdirectly to head offices in Monrovia. The CS has no functionalauthority over these county officers and only limited ability tosupervise them non-technically.

Ministries involved with rural development at the county level include Agri-culture, Rural Development (MRD - construction and maintenance of rural infra-structure), Health, Education, Public Works (main roads). The office of theCS includes the Assistant County Superintendent for Development (ACS) who withsubordinate planners, budget and other staff, is responsible only for thecounty development which is financed by self help schemes and from the smallMIA development budget.

63. Key additional machinery in the development process includes (i) aCounty Development Council, a large body comprising the CS as chairman and theDistrict Commissioners (DCs - who are responsible for administering districtsexactly as the CS administers the county) and clan and town administrators;(ii) the county development committee comprising the senior officers of eachsectoral ministry in the county which is supposed to advise the council ontechnical matters concerning the planning/implementing of the County's pro-jects and programs. The organizational arrangements above are reported toexist also in territories (not visited by the mission) on a smaller scale.

Constraints at County Level

64. The following appear to be the meLjor constraints to effective func-tioning of development administration at the county level: (i) lack of a sys-tematic planning cycle whereby annually or semi-annually counties submit totaldevelopment recommendations to central governme!nt for decision, and thenreceive notification of decisions and funding arrangements; recommendationsare currently ad hoc; (ii) lack of planning expertise in the counties/territo-ries; (iii) lack of defined responsibilities of CSs and the county heads ofsectoral agencies; (iv) related to the previous point, the ineffectiveness ofthe Development Committees: they meet rarely and are of little help to theACS; (v) lack of resources for development; by the county/territory; (vi) dif-ficulty of obtaining clear recommendations on projects and priorities from thedistricts; and (vii) slow response by central government in approving projectsrecommended by counties.

Recommendations for Improved Performance at County Level

65. It is recognized that sectorally-organized "top-down" developmentcannot alone supply the development needs of rural communities, even throughGOL agencies decentralized to county and possible district level as in the

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case of MOA. An essential element of "bottom-up" planning and supervisionmust be provided effectively whereby: inter-sectoral rural needs (particu-larly those involving agriculture) are identified systematically and inte-grated into a county plan, at least annually; plans are considered by centralgovernment; decisions are made and made known to counties as to what projectswill be funded centrally and when they will be undertaken; counties can planr,fund and carrv on their own projects more or less independently but in thecontext of an overall county plan. The county must also be able to monitorthe progress or otherwise of sectorally funded and organLzed projects and beable to correct slippage where this occurs.

66. The following is recommended:

(i) that the technical ability of the county office to plan ruraldevelopment is strengthened by technical assistance along the linesof that provided in Nimba County by the Nimba ADP;

(ii) that the project planning process should be more disciplined both bycounties/territories/di.stricts and towns, and by central Governmentin, for example, providing information on approved projects tocounties;

(iii) the county offices administrative and developmental duties areproperly defined and described, particularly for the ACS and thesenior administrative officer;

(iv) the CS should not have power over sectoral miniEstry funds andprojects; where possible the county MIA development budget should beincreased;

(v) the Development Committee should have specific t;asks in the prepara-tion of the County Plan and in monitoring its implementation. Thesectoral ministries should demand such involvement, particularly MOA,as in this way, better coordination can be achieved with otherministries. The present system whereby such planning and monitoringis largely done by ACS, if done at all, is clearly not conducive togood coordination;

(vi) the Development Council should be made a functional body by reducingmembership and should meet at least quarterly. All chiefs atdistrict level and below should contribute at district developmentcouncil meetings;

(vii) ministries involved in rural development should complete theirarrangements for decentralizing operations to county offices and asappropriate to district offices. This applies particularly to theMRD in view of its critical task in creating rural infrastructure.Where funds are limited, they must be allocated equitably betweenstaff, supplies for the work to be done and logistical support.Ministries should share accommodation and facilities where possible;

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(viii) regional development bureau (as in DRLE in MOA) within decentralizedministries should be created; where this has not already been done,appropriate arrangements should then be made to: (a) reduce centralstaffing in Monrovia; (b) ensure support for regional operations fromother bureaux within each ministry; and (c) provide adequate fundsfor the regional operations to function;

(ix) incentives, financial and career oriented, should be provided toencourage the better quality individual to take jobs in rural areas,at least for two or three years; at present, the reverse is true; and

'x) concerning planning at the national level, the MOP should continue toact as secretary to the National Planning Council, preparing theNational Plan but with more "bottom-up" input than hitherto, and re-commending the allocation of national resources. A TechnicalCommittee, as recommended by the Rural Development Task Force, shouldbe made fully functional in order to review critically the componentsof the plan submitted by MOP to ensure they conform to certaindefined objectives and policies in rural developmment. Membershipwould include heads of regional development bureaux of sectoralministries.

67. It is not recommended that the Territories should be organized sepa-rately from Counties as proposed by the Task Force. The size of most Terri-tories hardly warrants a full County-style administration, particularly inview of the present constraint on resources. The Teritories should remainwithin the County structure receiving a fair allocation of resources to beagreed and monitored by central Government.

E. Integrated Agricultural Development Projects (ADPs)

General

68. The objective of these area-specific and limited duration projects isbroadly to promote development of the agricultural sector by increasing andsustaining farm incomes by in turn providing farm support services to thesmall farmer. Projects were intended to be independent of the Government'sinstitutional structure and to have considerable autonomy particularly infinancial, personnel and procurement matters.

69. There are at present four ADPs operating in Liberia - one in LofaCounty (LCADP) which commenced in 1976, two in Bong County, BCADP and theLiberian Rubber Development UJnit (LRDU) which commenced in 1977 and 1978 res-pectively, and one in Nimba County (NIRDEP) which commenced in 1978. Phase IIof LCADP has now commenced, Phase II of BCADP is expected to start in 1984,Phase II of LRDU was due to begin in 1983 but completion date of Phase I hasbeen extended, and the pilot of Nimba project (which ended in early 1983) isbeing evaluated before the larger and more comprehensive Phase II is preparedand agreed. The projects are foreign-aided. LCADP and BCADP receivefinancial assistance from the World Bank and UShID, LRDU from the World Bankand CDC and NIRDEP from West Germany through GTZ0

- 20 -

Bong and Lofa Projects

Project Features

70. LCADP and BCADP are similar in concept and have the following mainfeatures: (i) farm families participating are provided with farm supportservices such as extension advice, supply of inputs, (fertilizers, seeds,seedlings, equipment, etc.), credit arrangements, land development and survey,and soil selection; (ii) farm-to-market roads are constructed or re-condi-tioned and maintained, and assistance is provided in the construction ofvillage wells; (iii) farmer training facilities are provided; (iv) offices,storage facilities and housing are provided for project staff; (v) seedmultiplication farms, seedling nurseries, and seed gardens are establishedtogether with some research; (vi) cooperatives are developed and supported atvillage and chiefdom levels; the six chiefdom cooperatives in Bong Countyfederated in 1981 to form the county-wide Tungban Union Cooperative; it washoped that this Union would be capable of taking over marketing, input supplyand credit functions from the project; (vii) a project re!volving credit fundis established for input supply; and (viii) schistosomiasis monitoring andtesting is provided.

Project Organization and Staffing

71. Both projects have broadly similar organizations. The Project Steer-ing Committee (PSC) is responsible for directing the semi-autonomous project,determining policy within stated guidelines, exercising budgetary and finan-cial control, approving the appointment of professional staff, determiningconditions of service and so on. PSC membership includes the Minister ofAgriculture (Chairman) and Ministers of Finance, Planning, Internal Affairs,and the project manager as secretary. The Project Advisory Committee consist-ing of prominent local officials and chaired by the County Superintendent wasintended to promote cooperation with appropriate agencies in the project areaand to generate support for the project by local people.

72. A project management unit (PMU) headed by the project manager, andresponsible to the PSC, administers the project. It comprises (with minorindividual variations) divisions responsible for agricultural extension andproduction, cooperatives and credit, training (staff and farmers), landplanning, roads and wells, workshop, schistosomiasis surveillance, monitoringand evaluation, finance, administration, and internal auditing.

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73. The most recent available staff (1982) levels for both BCADP and

LCADP are:

Department/unit BCADP LCADP

Project Manager 13 14

Administration 35 14

Finance 18 15

Audit _ 4

Workshop 30 12

Agricultural Services 130 133

Commercial and Credit 80 95

Training 13 23

Land Planning 25 41

Roads and Wells 24 -

Schistosomiasis S.V. 13 14

Plant Protection - 16

Monitoring and Evaluation 12 13

Total 393 394

74. In Phase II, the area to be covered by each project is much larger:in the case of BCADP II it covers the entire county and Gibi territory; in thecase of LCADP II it covers all Upper Lofa County. For both projects however,the Project Manager will take over the job of MOA County Agricultural Officer,(already done in Lofa where the Project Manager is also responsible for MOAstaff in Lower Lofa).

Nimba project (NIRDEP Phase I)

Project Features

75. The features of Nimba Integrated Rural Development Project Phase Iwhich differ significantly from LCADP and BCADP are: (i) while the multi-sectoral approach of NIRDEP (aiming to improve performance in a variety ofrelated sectors - agriculture, rural industries, road construction, housing,water supply, health and education) is more or less common to all ADPs, thisproject has adopted a lower key, less costly, leIss target-oriented, more"bottom-up" participatory and relaxed approach to development. Encouragementrather than urging has been a characteristic; no fertilizers or herbicides areprovided; self-help rather than financial aid for farmers, although seasonalcredit is arranged for tools, seed rice and. a power tiller service; swampshave been emphasized with claimed success (the lack of disciplined M & E hasbeen a distinct drawback here). (ii) Project staff who are not technical ad-

- 22 -

visers are all on the MOA payroll although they are physically paid by projectmanagement. (iii) There is no project steering committee. The Project Managerand his adviser report through the County Agricultural Officer to the DeputyMinister of Regional Development and Extension who has responsibility forexecuting the project; there is some consultation with MOF AND MOP. (iv) Toassist the integration of the project with existing institutions at localGovernment level, the project, and in particular a Planning Office and aSupport Measures Section, assist and work closely with the Assistant CountySuperintendent for Development of Nimba County in all matters concerning ruraldevelopment. The Planning Office assists the County Superintendent in countyplanning, while Support Measures attempts to manage various infrastructuraldevelopment projects (usually on a self-help basis) using staff from the pro-ject and from other national and international agencies (e.g. CARE). Projectsinclude construction of farm-to-market roads, bridges, wells and sanitary fa-cilities. Both these NIRDEP units are located in Sanniquellie, the Countyseat, while the main project is at Saclepea, the geographical center of theproject area. (v) Significant non-Liberian technical assistance is provided.At the close of Phase I, some five expatriate "advisers" are performing keyroles in the project - in contrast to the virtually complete Liberianizationof the other two projects (LCADP and BCADP). (vi) At some stage duringPhase II, which is likely to begin in 1985, when the project is scheduled tocover a large proportion of the county land area, the project administrationis expected to move to Sanniquellie.

76. Significant similarities between the three ADPs include the heavyreliance on the larger cooperatives to market produce (acting as agent ofLPMC), inputs supply and provision of credit (ACDB administering a revolvingcredit fund). The promotion and support of cooperatives has been a majorproject activity. NIRDEP has been dealing extensively with 6 'mother' coop-eratives and about 150 'sub' cooperatives at village level, providing consi-derable guidance, training and supervision. At the end of Phase I it appearsthat all mother cooperatives have broken down and even some of the sub-cooper-atives are proving corrupt. The project staff were seekir,g new solutions tothe problem of produce marketing, input supply and credit at the time of themission's visit to Nimba.

77. The Nimba project area was at outset 1,660 km2 and the target farmerfamily population was 7,900. These targets were later revised to 4,000 km2and 15,000 farmer families.

Project Organization and Staffing

78. A Project Manager (Liberian) with an expatriate 'adviser' (who isperforming the project manager's job) are responsible nominally to the CountyAgricultural Officer (CAO) for the following areas: (i) Agriculture - exten-sion services for rice, tree crops, fisheries: total staff is 40; (ii) Coop-eratives - promotion of cooperatives, marketing, input supply, revolvingcredit fund, credit delivery and recovery, transporting produce to coopera-tives: total staff is 15; (iii) Training - has relied heavily on overseas andLiberian training institutions and on-the-job training with the project; thereare no special facilities: total staff is 1; (iv) Support Measures - 19project staff, 3 Peace Corps Volunteers, 2 CARE, 8 Ministry of Health, and 3

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Ministry of Rural Development (FRD) staff; (v) Planning Office - 4 staff;(vi) Procurement - 1 staff; (vii) Monitoring and Evaluation - 2 staff; and(viii) Administration and Accounts - 7 staff. T'he total project staffincluding expatriate 'advisers' is about 91.

Performance and Constraints

79. All three ADPs will be considered together for this purpose as theirproblems and shortcomings tend to be similar in type if different in degree.Constraints have been as follows:

(a) There have been problems of inadequate performance by projectextension staff, and particularly by NIRDEP MOA staff. This project has paidheavily in this respect for the concept of early integration with MOA.

(b) The almost total failure of the cooperatives in each project toprovide, after several years of close involvement and supervision by projectspecialists, a satisfactory basis for crop marketing (purchasing and transpor-tation), inputs supply and credit administration is perhaps the most importantconclusion to eraerge from the collective experience of the three projects.The management in each case have stated that the cooperatives are still total-ly dependent on the project, and the projects are attempting to devise alter-native ways of providing these essential services, perhaps involving theprivate sector.

(c) The support provided by the county-based Ministries has beenless than satisfactory, particularly by Public Works (MPW). It is claimedthat equipment is available but the will to cooperate and perform is absent.Provision has been made in BCADP II for equipment and the Phase I equipmenthas been repaired.

(d) BCADP and LCADP have not managed to achieve a close or coopera-tive relationship with the County. Because of their favored status in fundingand facilities, these projects have tended to become isolated. For example,the CAO of Bong County claimed he had no dealings with BCADP just a few milesaway and would like more information, technical and administrative, and wouldlike access to project training facilities which are urgently needed in thecounty. There had been no meeting of the PAC in Lofa County for at least 8months. Even in the case of NIRDEP who had made great efforts to integratewith the local administration, the Support Measures Section was seen as aseparate project: the County administration failed to give this usefulsection the support it needed.

(e) NIRDEP felt that the lack of an effective training unit was a seri-ous constraint, both for extension staff training and for assisting farmers.

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Liberia Rubber Development Unit (LRDU)

Project Features

80. The Liberia Rubber Development Unit which started operations in 1978was designed to strengthen the Liberian-owned rubber industry by improvingmanagement and technical know-how, developing an efficient rubber extensionservice, providing funds for rehabilitating rubber of tap-pable age, and forreplanting abandoned rubber in accessible areas with high yielding material.The Project was also to assist smallholders in marketing and on-farm proces-sing, and to provide funds for the development of a rubber pricing policy(later executed by a firm of management consultants).

81. The project was to be for 5 years and aimed initially to replant40,000 acres of poor rubber and to tap 23,500 acres of mature rubber. About4,000 farm families were to benefit from the replanting program and 2,300 fromthe rehabilitation program. Major components included: (i) training projectheadquarters and field staff, and farmers in modern techniques; (ii) providingfarm planning advice to large farmers and assisting with the preparation ofproposals for commercial financing; (iii) assistance in collecting and trans-porting smallholders rubber; (iv) procurement of fertilizers, chemicals,vehicles, tools, etc., and arrangement of all necessary civil construction;and (v) delivery and recovery of credit for farmers with less than 150 acresof rubber for planting and rehabilitation. ACDB administers the revolvingcredit fund. Repayment of loans is not made under certain conditions of lowprices and sale volume. Repayments are not being made currently.

82. In 1980 certain changes were made to the above, -the most importantbeing: (1) a reduction of replanting targets to 18,800 acres and of rehabili-tation targets to 22,240 acres; and (2) the introduction of a collection, mar-keting and processing component. The latter involved the construction of arubber processing plant of 5,000 tons annual capacity to serve project far-mers. Several reorganizations of LRDU have taken place in 1980 and subse-quently, the results of which are set out below.

Organization and Staffing

83. As for BCADP and LCADP, the project was and is directed by a ProjectSteering Committee (PSC) comprising the Minister of Agriculture as Chairman,the Ministers (or their delegates) of Finance, Planning, L.ands and Mines,Managing Director of ACDB, a representative each of small--holders and theRubber Planters Association, and the Project Manager as Secretary.

84. A Rubber Development Unit (LRDU) headed by the Project Manager hasresponsibility for management of the project under the direction of PSC. PSC,inter alia, determines policy, approves budgets, ensures GOL funding is avail-able, approves expenditure, makes senior staff appointmen-ts and approves majorcontracts. A Project Consultative Committee, added later,, aims to improvelocal relations and is structured like PAC in BCADP and LCADP.

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85. LRDU after several changes comprises five subunits as follows. Thehead of each unit except Administration reports to the Poject Manager. Admin-istration reports to the Deputy Project Manager. Staffing according to the1982/83 Budget is also given for each unit; (i) Operations - responsible forprogram execution through four regional offices located in the four countiessharing in the 288,000 - acre project area, a Nurseries Department (3 projectnurseries) and a Marketing Department which provides the collection service;staff totals 122; (ii) Training - responsible for training all new recruits,project farmers and headmen, tappers and budders, and for managing the train-ing center; staff totals 18; (iii) Agricultural Economist Section - respon-sible for land surveying and registration, monitoring and evaluation; stafftotals 21; (iv) Administration Division - responsible for stores, procurement,transportation, workshops, maintenance, security, office services, etc., stafftotals 58; and (v) Finance Division - responsible for accounts, finance andcredit; staff totals 15. Total LRDU staff is 234.

86. A Collection and Processing Division, established in 1980 for operat-ing a collection system and block processing factory was discontinued when thefactory operation was passed to Liberian Rubber Processing Corporation(LRPC). The factory ceased operating subsequently after many difficulties.LRPC has now been replaced by the Rubber Corporation of Liberia (RCL) whichwill rehabilitate and manage the factory to become an industry pace-setter andwill purchase rubber from LRDU farmers paying top producer prices, less adeduction for repayment of loans received.


87. Current constraints limiting the performance of LRDU include:

(i) delays in payment of funds due from GOL; $486,000 was due inOctober 1981; $386,000 of this and December funds had not beenpaid by May 1982; ACDB had been providing an overdraft at 15%; and

(ii) poor communications between headquarters and field offices; radioswould seem desirable.

F. Parastatal organizations, Research and the Forestry Development Authority

Liberian Produce Marketing Corporation (LPMC)

Objectives and Main Functions

88. LPMC is a corporate body wholly owned by GOL. It was originally ajoint venture, formed in 1962, between GOL and the East Asiatic Company (EAC)until in 1975 EAC sold its shareholding to GOL. Its objective include thefollowing: (i) to purchase for export and local sale where appropriate,cocoa, coffee and oil palm kernels from appointed cooperatives, privatetraders and farmers; regulations and practice regarding the type of vendorpermitted to sell produce to LPMC vary according to the product and the local-ity; (ii) to export produce at the best possible prices; (iii) to buy and mill

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paddy rice from cooperatives, private traders and farmers; to sell clean ricelocally or in Monrovia; (iv) to buy rice from overseas in accordance with in-structions from the National Rice Committee (based on a balance of nationalstocks, forecast local rice production and total consumption) and to distri-bute to and sell from stations up-country or to sell from Monrovia; (v) to buypalm fruit bunches from farmers and process to palm oil for sale, locally andin Monrovia; and (vi) to operate oil palm estates and process in LPMC mills.

89. LPMC had been responsible for providing extension services for small-holders in oil palm, cocoa and coffee because they were better funded thanMOA. This function, which consumed much management time and financialresources was later passed to LPPC and LCCC when they were set up. Importantsubsidiary functions of LPMC include purchasing inputs for the ADPs in Lofa,Bong and Nimba Counties, and packing and grading produce for export at Lofaand Bong stations and in Monrovia.


90. The membership of the LPMC Board of Directors, who are appointed byname and not by position, currently includes the Minister of Agriculture asChairman, Minister of Labour, Minister of Commerce, Director of InternationalAffairs at the Ministry of Labor, a senior manager from BCADP, a publicaccountant, and the MD of LPMlC. Because there is apparently no connectionbetween MOA and LPMC, the Deputy Minister of Planning and Development of theMOA has no monitoring role at present.

91. The Managing Director (MD), and his deputy (DMD) are jointly respon.-sible for ten departments. For day-to-day administration, the DMD is supposedto control three of these: Procurement and Supply, Personnel and Adminis-tration, but in practice they appear to report direct to the MD. The remain-ing seven departments are headed by: (i) Assistant Managing Director (out-stations) responsible directly for the main stations at Gbarnga (Bong County)and Voinjama (Lofa County), and through the Manager Agricultural Division, forsix estates dispersed about the country: Foya (operates oil palm estate of5,673 acres, manufactures palm oil, buys oil palm FFBs and palm kernels);Kpatawee (operates oil palm estate of 1,385 acres); Zlehtown (operates oilpalm estate of 2,050 acres); Madco - Mount (coffee and oil palm estate); Madco- Fendell (oil palm estate and palm oil manufacturing - both Madco estatesamount to about 1,100 acres); and Totota (manufactures palm oil and buys palmkernels); (ii) Rice Manager responsible for: overseas rice procurement,storage, distribution and sale; paddy rice purchase, milling and sale; inMonrovia, at Ganta (Nimba County) which he controls directly, and elsewhere inthe country; (iii) Local Branches Manager responsible for preparing producefor export, storage, etc., all in Monrovia; (iv) Manager, Palm Kernel oil millin Monrovia; (v) Marketing Manager, responsible for all export shipping andlocal distribution; (vi) Inspectorate Manager, responsible for controlling allproduce grading throughout the country; and (vii) Comptroller. Total staffing

is about 1,180.

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92. It is recognized that by the standards of a developing country and incomparison with other wholly Government-ow¢ned zorporations in Liberia, LPMC isperforming reasonably well in purchasing and selling coffee and cocoa, import-ing and distributing rice and producing and manufacturing oil palm products.Despite this there are certain important constraints which are preventing LPMCfrom operating as effectively and efficiently as it might, and thus giving thefarmer the best possible service. In particular, its marketing costs forcoffee and cocoa and costs of the rice program are very high and need to bereduced.

93. In view of the diversity of operations currently undertaken and thefact that LPMC's main responsibility is to buy, distribute and sell agricul-tural produce, it is considered that the operation of oil palm estates andmills is an extraneous function which is absorbing management effort whichwould be more profitably (for the farmer) directed to the improvement of theexisting marketing system.

94. It is widely reported that farmers are receiving in many cases muchless than the official farmgate price for their produce, and that one of thereasons for this is that cooperatives which in some cases have a monopoly inselling to LPMC are buying from traders and not farmers. It is consideredthat LPMC as a Government parastatal has some responsibility for monitoringthe operation of the marketing system through its appointed agents in theinterests of the farmer, and is currently not performing adequately in thisregard.

95. The constraint of ad hoc Government interference in the affairs ofparastatals is mentioned elsewhere but is particularly relevant in the case ofLPMC. Largely because LPMC was required to provide funds for the special useof GOL, reserves of $57 million in the late seventies were reduced to zero by1982 as reported in the consultants' study of LPMC under Lofa II ADP. Theknock-on effect of any LPMC financial weakness is considerable in themarketing system: the recent liquidity problems experienced in the ruralareas have been at least partly due to LPMC's own difficulties. The lack ofliquidity is a very important constraint to effective working of the marketingsystem and thereby to agricultural production as a whole.

96. There are indications that members of the Board of LPMC (and of otherparastatal companies) have performed their individual and collective responsi-bilities as Board members inadequately.

Liberia Palm Products Corporation (LPPC)


97. LPPC was established as a wholly-owned subsidiary of LPMC in 1976 asa result of studies on the development of oil palm and coconut carried out bythe Ivorian State Corporation SODEPALM. The corporation was to have thefollowing objectives: (i) to improve the foreign exchange earnings of Liberia

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through the expansion of exports of palm products; (ii) to improve the stan-dard of living of the rural people through the provision of facilities forhousing, education and medical care; and (iii) to provide technical assistancefor private farmers who grow oil palm and coconut. At the outset, the follow-ing targets were set: (a) 7,500 acres of oil palm industrial plantation and5,000 acres of smallholders oil palm plantations in Buto, Sinoe County; (b)10,000 acres of oil palm industrial plantation and 2,500 acres of smallholdersoil palm plantations in Dube, Grand Gedeh County; and (c) 20,000 acres of out-growers coconut plantations along the coast.

98. LPPC was to provide a number of local facilities at Buto and Dube in-cluding dispensaries, schools, staff houses, worker houses, farm-to-marketroads, and recreation facilities. External funding was provided by EEC in theform of a grant of $11 million for the Buto project. Various inputs such asseedlings, fertilizer, tools, etc., were to be supplied to smallholders ascredit in kind. Assistance was also to be given to smallholders to establishtheir title to land. To confirm LPPC as the main extension agent for oil palmin Liberia, in April 1980 LPMC transferred its oil palm extension program in-cluding the nurseries to LPPC, which in 1982 numbered 13 around the country.LPPC are responsible for all oil palm and coconut extension operations inLiberia, except for those done by Decoris. The program provides among otherthings free seedlings to any bona fide farmer up to a maximum of 800 perfarmer.

99. Achievements to date include: (a) about 7,000 acres of plantation atButo (started in 1977); (b) about 2,400 acres of plantation at Dube (startedin 1978); (c) about 300 acres of smallholder at farms at Buto in Sinoe Countyat a density of 3-1/2acres per farm rather than the planned 10 acres; and(d) a small coconut smallholding scheme at Worbar on the Sinoe coast.


100. LPPC was initially run under the terms of a management agreement bySodepalm (now Palmindustrie) which became effective in January 1977. Theagreement terminated in July 1979 after a 6-month period of joint managementwith the current Managing Director. A technical assistance contract, renew-able annually was then entered into whereby Palmindustrie provided technicalexpertise to LPPC mainly in field operations. The assistance, which alsoprovided for the supply of seedlings at a fixed price, was not regarded assatisfactory by the Liberians and eventually ceased in September 1980. InNovember 1982, the Buto project of LPPC was converted into Buto Oil PalmCorporation and is now being run by SODECI under a management contract, withexternal funding by EEC. LPPC is still responsible for the Dube project, theWorbar coconut project and for extension and inputs to snallholders associatedwith these projects.

101. LPPC is now governed by a Board of Directors whose membership ofseven includes the Minister of Agriculture as Chairman, and the MD of LPPC.The MD is responsible to the Board for implementing policy and controllingthree major divisions, apart from a planning and research section which hasnot yet begun to function although staffed, and an Internal Auditor. Thethree major divisions are: (i) Operations Division, headed by a Deputy

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Managing Director which comprises the Dube Project and the ExtensionDepartment, each in the charge of a manager. The Extension Department isresponsible for: (1) all LPPC oil palm nursery and extension operations inthe country and employs 175 staff for this purpose; (2) the Worbar Project(coconut smallholders) which includes a nursery operation and the smallholdersoil palm project with a combined staffing of 75. The total staffing forOperations Divisions was about 1,062 before the Buto Oil Palm Corporation wascreated. (ii) Administration Division, headed also by a Deputy ManagingDirector with an office of 6 staff, which comprises an Administration Manager,a Personnel Section, and a Procurement Section of 17 staff, making a totalstaffing of 33. (iii) Finance Division, headed by a Comptroller, whichcomprises of Chief Accountant's Office, a Financial Accountant's Office, aManagement Accountant's office, and the stores, making a division total of 23staff. The total LPPC staffing was about 1130 before Buto Oil PalmCorporation was created.

102. Costs. From the expenditure summary report for the 9 months endingJune 30, 1981, 1/ the following costs have been extracted:

LPPC Expenditure Summary October 1980 - June 1981 ($'000)

Cost Center Head Buto Dube Worbar Small- TotalExpenditure Item office holders

RemunerationlV 211 469 184 54 39 957

Total 679 A/ 1,516 253 101 63 2,612

Total _/ 593 812 242 99 62 1,808

a/ Exclusive of a special bank credit of $396,513b/ Includes salaries, wages and fringe benefitsc/ These costs exclude capital items.

Head office costs represented about 33% of total LPPC recurrent costs.


103. There are several important constraints which must be resolved ifLPPC is to function effectively in the short term, and consistently with MOAobjectives and strategy in the longer term. These are additional to agronomicconstraints noted in the supporting Paper 3: Tree Crop Production.

104. As in the case of LCCC, there is no reason for LPPC to continue witha nationwide program of oil palm extension services and production/distribu-tion of planting material when MOA is now implementing a policy of decentrali-zation based on the provision of these services to the farmer. The cost, as

1/ The financial year was changed from October - September to July -June.

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for LCCC, of administering effectively a national extension program for onecrop, will be excessive.

105. As for LCCC, the anomaly of charging smallholder farmers formallyassociated with the projects, for planting materials while the nationalextension service, also administered by LPPC, provides the same material free,should not continue. The difficulty and cost of recovering credit for theseinputs must be carefully assessed in the design of solutions.

106. The high cost of LPPC particularly the excessive numbers of staff inthe adminstrative and support areas, must be reduced. It is considered that afull scale head office in Monrovia is not justified now, and is less so withthe splitting of the Buto project and the consequent contraction in the scaleof the LPPC operation and in the related need to arrange frequent emergencyfunding from the commercial banking system.

107. Closely related to the previous point, there is excessive outsideinterference in LPPC affairs, particularly those related to staff appointmentand promotion.

108. Problems experienced in Ivory Coast on similar schemes are likely tooccur in Liberia: the high cost of dealing with scattered farms; and abandon-ment of farms when repayment of credit is due.

Liberia Coffee and Cocoa Corporation (LCCC)


109. LCCC was established as a wholly-owned subsidiary company of LPMC in1977 after studies on the possible development of coffee and cocoa productionhad been performed by the Ivorian State Corporation SATMACI. The objectives,functions and organization of LCCC were to be based, like LPPC, on the Ivorianexperience of community farming, where farmers are not able to own land free-hold.

110. The objective of LCCC was and still is to assist farm families in de--veloping 10-acre holdings of coffee and cocoa to increase family and nationalcash incomes. This would be achieved by giving training in all phases of pro-duction, by the provision of a credit program for farm inputs such as seed-lings, seed rice, pesticides, sprayers, small tools, and by other types ofassistance including storage facilities, post-harvest treatment and large treefelling.

111. Loans would be repaid over 5 years after a 5-year grace period by theplanned device of selling the crop to LCCC who would then resell to LPMC reco-vering the annual repayment from the transaction. The formation of communityestates would be encouraged - a community estate being a group of farms run bya farmers' cooperative. Each farm would have an area of about 10 acres and amixed crop of coffee and cocoa in ratios varying from 20/80 to 60/40 dependingupon soil conditions. To this end a large PR exercise and soil survey wereperformed at the start. The original target for the five year period 1977 to1982 called for 12,000 acres of coffee and cocoa to be planted in five zones

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at M'baloma (Cape Mount), Bopolu (Lower Lofa), Zwedru (Grand Gedeh), Plahn(Sinoe), and Compound II (Grand Bassa). This was revised downwards by about50% due to an actual performance of between 35-40% in years 1979-80; the cur-rent total planting is 3,000 acres or 25% of the original target. Nurserieshave been developed in all five zones for the production of seedlings.Additional nurseries originally belonging to LPMC (which were in turn takenover from MOA in 1974) were transferred to LCCC in April 1980. These arelocated in Nimba, Montserrado, Cape Mount, Bassa, Sinoe, Grand Gedeh, MarylandCounties and Lower Lofa and Bomi Territory. There were 107 cocoa and 62coffee nurseries at the end of 1980.


112. From the formation of LCCC until October 1979, the Corporation wasmanaged by SATMACI under the terms of a 2-year management agreement, afterwhich the present MD took over with a Liberian management team. SATMACI actedas technical advisers until the April 1980 coup.

113. LCCC has a Board of Directors whose membership of seven includes theMinister of Agriculture as Chairman, the MD of LCCC, Minister of Labor, anadviser to PRC, a public accountant, an assistant Minister of Agriculture, anda Bong ADP agronomist. Observers sit in from LPMC, MOP, Bureau of Budgets andDirectorate of Public Corporations.

114. The MD is responsible for implementing Board policy and has under hiscontrol three major departments and the Internal Auditor. The major depart-ments are: (i) Technical and Training Department, headed by a Director, whichis responsible for administering the zone staff of supervisors, technicians,accountants, storekeepers, mechanics, drivers, laborers, etc. and achievingzone objectives. Staffing at the time of preparation of the 1982/83 budgetwas as follows: Bopolu, Compound II and M'baloma - 127 each; Plahn - 116;Zwedru - 150; County Extension Program (8 counties plus lower Lofa) - 302.Department total staffing including the Monrovia administration was 952.(ii) Administration Department, headed by the Deputy MD who controls andAdministrative Manager, administers LCCC property, personnel, transport, andradio communications with a staff of 19. (iii) Finance and Credit Department,headed by a Comptroller, is charged with budgets, accounts and managementinformation, purchasing and inventory control, administration of the farmers'loan program, identifying and securing needed funds and disbursing these asapproved by management. There were 16 staff in this department. Total LCCCstaffing, including the MD's office, was 1,007 in 1982.

Costs

115. From the analysis of operating expenditure by cost center for the 6months ending December 31, 1981, the following costs have been summarized:

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LCCC Expenditure Summary for July 1 to December 31, 1981 ($'OOO)

Cost center Central M'baloma Compound Bopolu Zwedru Plahn TotalExpenditure Item Office Zone II Zone Zone Zone Zone

Remuneration a/ 132 73 73 77 930 68 513

Total 314 103 102 104 123 100 846

Equiv. Change cf.9 months ending6/30/81 I/ -9% -14% -17% -1% -16% -12% -11%

a/ Inclusive of salaries, wages and fringe benefits. Central office costsrepresent 37% of total recurrent costs.

b/ Change of average monthly cost compared to 9 months ending 6/30/81. Thefinancial year is now being changed from October-September to July-June.


116. The performance of this parastatal in agronomic terms is assessed inthe supporting Paper 3: Tree Crop Production. From other stand points alsothere are constraints which taken together must cast a doubt on the viabilityof the Corporation as it now exists.

117. Farmer reaction has been very much less than anti-cipated. Totalfarmers participating in May 1982 were 811, which amounted to an average of 40farmers per year per zone, despite reported "dynamic animation campaigns" toattract candidates. Actual acreage planted was 25% of the original target.As with LPPC, the administrative overhead was unacceptably high. With the re-organization of the MOA under way, based on a substantial decentralization ofresponsibility to the regions, and with extension as the primary service to beoffered to the farmer, the national program for coffee and cocoa extension andproduction/distribution of planting material should not be administered by aseparate organization. There is a conflict in Nimba County where LCCC nurse-ries and extension staff are operating in the same area as the Nimba ADP.This duplication is also apparent in training of extension staff. It is im-portant that there is a common source for this training, preferably the MOA.

118. Planting material is provided free as part of the national extensionprogram, yet is technically loaned to farmers in zones, whether they are partof community estates or are individual farmers. This fact; is bound to in-crease the difficulty of recovering credit.

119. Inability of GOL to make planned funds available has meant a scarcityof inputs (fertilizers, pesticides and sprayers) and other services promisedto the farmer. Only about half the funds promised by GOL were made availableduring the most recent twelve month period.

120. The recovery of credit, which has not yet begun, does not seem tohave been planned well. The farmer is expected to sell his crop to LCCC which

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will pay him the value of the crop less the amount he has to repay, and thensell in turn to LPMC. There are of course other channels the farmer can useto dispose of his produce. Even if the scheme functions, the cost of andproblems associated with grading, weighing and handling the crop twice will beconsiderable.

Agricultural and Cooperative Development 3ank (ACDB)

121. ACDB was established in 1976 and became operational in 1978 with theobjective of providing development credit for the agricultural subsistencesector, and for providing banking services in rural areas. As stated in theBank Act, ACDB is to: (i) provide loans to farmers, cooperatives or farmersorganizations for agricultural enterprises and rural industries; (ii) encour-age development of cooperatives and farmers organizations; (iii) mobilizesavings in rural areas; (iv) provide credit and other facilities for trainingrural agricultural staff; (v) to provide advice to farmers, cooperatives, andfarmers organizations; conduct relevant research; help train, organize, andestablish cooperatives. A Board of Directors governs ACDB and includes: theMinister of Agriculture as Chairman; the Ministers of Finance, Planning,Internal Affairs; the most senior officers from ACDB, LPMC and two cooperativeorganizations. ACDB funds consist of equity and deposits. Initial authorizedcapital is $2 million to be subscribed by GOL (65%), Union of County Coopera-tives Federation (10%), Liberian Credit Union National Association (10%), andLPMC (15%). On December 31, 1981, equity and deposits were:

Equity ($) ($)

GOL 3,760,460UCCF 18,900LCUNA -LPMC 105,000

3,884,360Deposits 3,330,997

Less accumulatedloss 1,015,354

Available funds 2,315,643

6,200,003

122. ACDB head office is in Monrovia and there are three branch offices atVoinjama (Lofa County), Gbarnga (Bong County), and Ganta (Nimba County). In1982 the Bank had a total staff, alL Liberians, of 78 of which 45 werestationed at head office. ACDB branches were established to the specificrequirements of ADPs and not through ACDB initiatives. Total lending for theperiod 1980-81 was $6,722,370 as summarized below:

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Purpose Number Amount (L$) %

Marketing 55 2,225,1561 33Working Capital 15 2,003,469 30Tree Crops 335 926,094 14Agricultural Equipment 44 424,671 6Personal/Others 190 402,332 6Housing 291 330,169 5Rice, Vegetables/Food crops 6 227,100 4Commercial 19 91 ,754 1Livestock 15 91,220 1

970 6,722,370 100

The recovery rate was reported to be about 70%. The rate of interest forseasonal and development loans was 12% and for unproductive purposes, the ratewas 15%. The interest rate for deposits was 8%. Loans outstanding as ofDecember 31, 1981 were $2,400,000; these are analyzed by borrower type andgeographical distribution below. 1/ In addition to normal lending and bankingfunctions, ACDB administers several revolving credit funds on behalf of theADPs and LRDU.

Analysis of Loan Portfolio by Borrower Type on December 31, 1981

Classification Number Amount ($'ooo) %

Cooperatives 38 1,171 49Individuals 515 823 34Public Corporations 12 406 17

2,400 100

1/ These analyses, supplied by ACDB, have been modified slightly tocorrect minor arithmetical errors.

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Geographical Analysis of Loan Portfolio on December 31, 1981Amount ($'000)

County/Territory No. of Groups Cooperatives Total %

Nimba 15 693 693 29Lofa 6 217 555 23Montserrado - - 500 21Bong 6 100 254 11Sinoe 1 15 117 5Gibi Terr. - - 89 4Grand Gedeh 2 20 53 2Krucoast Terr. 1 43 43 2Grand Cape Mount 3 30 34 1Maryland 2 33 33 1Grand Bassa 1 11 20 0.8Bomi Terr. 1 9 9 0.4

38 1,171 2,400 100


123. The performance of ACDB has been unsatisfactory as regards provisionof rural banking services in general and of credit for the small farmer inparticular, the purposes for which the bank was originally established. Spe-cific constraints include: (a) a weak financial position after heavy lossesin 1980 and 1979 of $842,000 and $419,000 representing 14% and 7% respectivelyof total assets, or 22% and 11% respectively of stockholders' equity. Theaccumulated loss (unaudited) was stated by ACDB to have increased to more than$1 million at the end of 1981, after barely 3 years trading. Investigationsinto cooperative finances made by consultants for the LPMC study under LofaPhase II made it appear likely that further substantial losses would besustained from the $1.2 million on loan (49% of total portfolio) to 38 co-operatives on December 31, 1981; (b) inability to provide technical support tocooperatives as envisaged in ACDB objectives; (c) insufficient branches asoutlets for credit delivery and recovery, and for the dispensation of generalbanking services (e.g. savings accounts) fcr the small farmer; also inadequateliquidity at branches (e.g. Voinjama) for local business needs; (d) an appa-rent need to provide commercial credit for nonagricultural purposes (12% oftotal loans for 1980-81) to maintain lending targets; (e) inability to reachthe small farmer given the absence of credit cooperatives and inadequate bank-ing infrastructure; the amount loaned to small farmers is not known but ispresumed to be low in view of the cooperatives receiving 63/O of total 1980-81loans for marketing purposes and commercial credit totalling 12% of 1980-81loans; reaching small farmers is also made difficult by the fact that the Bankrequires various types of security which in effect limits farmers able toreceive credit to about 20% of the total farmers who are estimated to havetitles to their land; (f) the National Bank of Liberia offers no facility forACDB to borrow at concessionary rates of interest, thus making it difficultfor ACDB to meet its administrative costs of lending to cooperatives and small

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farmers; and (g) pay scales of ACDB staff are low by comparison with otherGovernment-owned Liberian banks; consequently, adequately qualified staff arehard to obtain or retain.

Co operatives

Background

124. Cooperatives and the Cooperative Development Agency (CDA) are fullyconsidered in the supporting Paper 6: "Problems and Possibilities forPrivatization of Marketing and Input Supply". Therefore, in this report, onlythe main organizational features, constraints and recommendations will bebriefly discussed. The first existing cooperative was registered in 1971while there are now more than 180, including some 50 credit unions. Many ofthese are dormant. Of the remainder, only 10 have been classified in a 1981report by Rayan and Pujari as "active and viable" and a further 15 as "activeand potentially viable". These authors state that most viable societies are"quasi-cooperative" and do not function according to accepted cooperativeprinciples. This important point is not unfortunately elaborated upon butshould be borne in mind when proposals are being assessed.

125. Responsibility for supervising and assisting cooperatives is dividedbetween (1) ACDB as lender and adviser to, and (as proposed in LCADP II)shareholder in cooperatives, and (2) the Cooperative Development Agency (CDA)whose job is to promote by all means the successful operation of cooperatives,and to regulate their working. The autonomous CDA is a recent creation by GOLand replaces the former Cooperative Division (CD) of the MOA.

Cooperative Objectives

126. Objectives for cooperatives are stated somewhat vaguely in the CDAExecutive Order as providing "economic and social benefits for rural and urbanLiberians" and playing a "critical role -- in the development process". Asbusinesses, they must be financially viable. Properly established, they couldassist in "social development" by providing a focus of local cooperation andfor those running them, experience of leadership and decision-making.

Main Functions

127. A main function of the district level cooperatives in Lofa and NimbaCounties is to buy cocoa, coffee, palm kernels and to some extent rice, fromthe farmer and to sell to LPMC at the county stations. In Bong the county-wide Tungban Union Cooperative performs this function. Cooperatives are re-quired to pay standard LPMC prices to farmers and receive a commission fromLPMC to cover expenses. In these three counties the coo peratives are greatlyassisted, by the ADPs with which they work closely, by LPMC, and by theselling monopoly enjoyed in Lofa County and their preferential status in Bongand Nimba Counties. Even with this support and substantial borrowing fromACDB, the cooperatives have bought 80-90% of produce from traders and not fromfarmers as they should. The consequence of this is a reduced price for thefqrmer but paid in cash, and an easier time for the cooperative.

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128. The ADP-linked cooperatives are also involved in the delivery andrecovery of credit. In Bong County credit applications are recommended by thevillage Cooperative Service Unit (CSU), approved by the district cooperativebefore approval by ACDB. In Lofa and Nimba counties roughly similar routinesapply. No records are maintained. CSUs or Town Cooperative Units (TCUs) doexert some pressure in recovering loans as ostensibly unless 90% of repaymentson seasonal loans is received from TCU members, no loans are available in thenext cycle. District cooperatives collect repayments, again under the de-tailed supervision of the ADP.

129. In the distribution of inputs, the cooperatives have done little morethan provide storage facilities for LPMC and the ADPs, although some areselling hand tools and even building materials.

Organization

130. The smallest cooperative-style units are those at village level knownas TCUs (Lofa), CSUs (Bong) or "sub-cooperatives" (Nimba). Membership rangesfrom 15 to about 60. They are unregistered. The larger primary or districtlevel cooperatives are distributed as follows: ten in LCADP I project areawhcih are being reduced to five plus one in the additional LCADP II Projectarea; NIRDEP Phase I reported 6 registered cooperatives in 1981; one countycooperative federation or union in Bong - the Tungban Union Cooperative Ltd.A few of these are large, such as the Voinjama District Farmers CooperativeSociety, with a reputed 2,600 members. This unit is headed by a manager andhas 18 additional full time staff. Outlying subcenters each have a producereceiver on commission. In addition, the ADP provides staff support for manycooperative functions including control of inputs and storage, bookkeeping,maintenance of farmers records, construction of subeenters for input storage,collection of credit from farmers and payment into the revolving fund.


131. It seems clear that the larger cooperatives are, in relation to cropmarketing, little more than LPMC buying agents with virtually no farmer parti-cipation. If this is to be altered, the entire marketing approach and proce-dure will have to be changed. Cooperatives will have to act as agents of themember farmers and in so doing provide storage facilities, arrange for produceprocessing where this is required and (above all) take all necessary steps tosecure the best price available for the produce of their members. The presentsystem of marketing by the cooperatives contains none of these elements. Therecent consultants' study of LPMC has concluded similarly. The presentarrangement provides numerous opportunities for the unofficial subtrader topay low prices, give short weight, mis-grade and charge exhorbitantly formoney advanced, all at the expense of the small farmer whom the cooperative issupposed to benefit. It should be remembered also that in the ADP areas,cooperatives have been subjected to a concentrated level of attention andsupervision for several years. It is concluded that the larger cooperativeshave not yielded economic or social benefits to date and are unlikely to do soin the foreseeable future.

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Cooperative Development Agency (CDA)

132. The CDA is to promote a system of cooperatives that provides realeconomic and social benefits in a national development process. Its mainfunctions are intended to be promoting, providing education for, regulatingand supervising cooperatives. Regulation is performed during the registrationstage to ensure that cooperatives meet the required conditions and subse-quently through audits.

133. The CDA is an autonomous body governed by a Board of Directors andestablished by decree. The Board includes representatives from the MOA, MOP,MIA, Ministries of Commerce and Industry, LPMC, ACDB, Rural Development Insti-tute, the cooperative movement and the Registrar of Cooperative Societies(RCS) who is the executive secretary to the Board and responsible for managingthe CDA in accordance with Board policy.

134- In 1981/82, CDA had 47 staff of whom 13 had salaries over $5,000. Inthe same year, no budgetary provision was made other than for staff (at$191,000) which meant that all logistical support had to be drawn from otherMOA allocations or from development projects. The total budget proposed for1982/83 was higher (by more than 350%) at $883,000 and included non-staffsupport costs of $487,000 (55% of total) of which $99,000 were to be grants -tonational cooperative organizations. The chances of CDA having such proposalsapproved, given the existing and forecast shortage of GOL funds, must be closeto zero. The mission report dealing with cooperatives gives data on the levelof relevant training and experience of the 12 top CDA staff. This is consi-dered to be impressive both in terms of educational qualifications, trainingand experience.

135. The consultants (Rayan and Pujari) who conducted a study of coopera-.tives in Lofa county in 1981 believed that the CDA should not be governed by aBoard of Directors on the grounds that no developing country with "successful"cooperatives has such an arrangement. They recommended that the Board shouldbe redesignated as a standing advisory committee, and that ultimately the RCSshould be upgraded to a deputy minister and the CDA be abolished. It is notclear what ministry he would belong to. Since GOL intends to use the coop-erative system for developing the country's rural economy, in activities suchas credit, marketing, animal husbandry, fisheries, credit unions, consumersetc., the consultants thought that a Ministry of Cooperation should be con-sidered.


136. Major constraints include: (i) lack of support, particularlyvehicles and administrative services; (ii) a probable shortage of field staffbased on CDA's current role; and (iii) a lack of definition of the preciseroles of ADPs, ACDB and CDA in the promotion and upgradinig of cooperatives.

Central Agricultural Research Institute (CARI)

137. This institute, founded in 1951 as the Central Agriculture ExperimentStation, is responsible for agricultural adaptive research in Liberia for all

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crops except rubber. Agricultural research in rubber is performed by theconcessions, principally Firestone. It is recognized that Liberia has neitherthe resources nor the need to operate a full scale basic research program inagriculture. It is intended therefore that applied and adaptive researchshould be pursued utilizing the results of basic research elsewhere especiallyWARDA (West Africa Rice Development Association), IITA in Nigeria and IRRI inthe Phillipines. Because of the past lack of relevant research output whichcan be put to practical use by Liberian farmers, CARI is undergoing a reorga-nization, started in 1980, funded by USAID and implemented by Louisiana StateUniversity.

138. CARI is now intended to be a semi.-autonomous agency headed by aLiberian director, currently studying for a doctorate in the US, who is re-sponsible to an Agricultural Research Committee (ARC). This body, chaired bythe Minister of Agriculture who is responsible for agricultural research over-all in Liberia, is to approve research policy, including priorities, given theavailability of national and international resources. The ARC is to solicit,allocate and approve funds for research based on proposals submitted by aTechnical Committee. It is also to approve research results for applicationto agricultural developemnt. Membership includes senior officials from theMinistry of Planning, the principal education colleges and institutes in thefield of agriculture, together with MOA deputy ministers responsible for Tech-nical Affairs and Regional Development and Extension. The Technical Commit-tee, working under the general direction o-f the ARC, is to provide technicaldirection for and supervision of the research program. The Chairman of thiscommittee, which is intended to meet quarterly, is the Deputy Minister forTechnical Affairs and he acts as the principal high level link between MOA andCARI. Membership of the committee includes the Director of CARI and hisdeputy, technical representatives of the organizations belonging to ARC, theAssistant Ministers of Planning and Evaluation, and Regional Development andExtension, and ex officio, heads of CARI research departments.

139. The CARI organization comprises: (i) A Research Coordinator who actsas deputy director in charge of the seven research departments, namely CropScience and Propagation, Land and Water Resources Management, Animal Scienceand Production, Plant Protection Service, Engineering and Appropriate Techn-ology, Inland and Marine Fisheries, Food Technology. Food Technology will notbe activated for several years. The remainder are staffed and are beingdeveloped. (ii) A Liaison Officer for Research, Extension and Training isintended to serve as the principal operational link between research andextension, conveying information in both directions. The proper functioningof this link and in particular the exact mechanism for connecting with the MOAorganization will be important factors in the success or otherwise of CARI asa producer of practical innovations for farmers. (iii) An Economic and SocialAnalysis Officer. (iv) The Administration Department and a Library. Thereare about 275 staff at CARI subdivided approximately as follows: 7 expatriatestaff; 35 Liberian graduates; 40 technicians (high school graduates); 25clerical staff, mainly in Administration; 3 accounting staff; 15 tradesmen; 22drivers; and 128 laborers.

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140. Constraints on the effective functioning of CARI are as follows:

(a) Lack of autonomy; partly due to a lack of confidence on the part ofMOA with the management of CARI and partly the continuation of a history ofmeddling with the affairs of this unit. Funds commitment and allocation arethe chief targets.

(b) Gross overstaffing particularly at the laborer level where there aretwice or three times the numbers required. The direct consequence of this isa misdirection of valuable funds to pay for unwanted and unused labor ratherthan much needed accommodation, supplies, equipment and logistical support.(The position is analogous to that in MOA).

(c) Lack of systematic coordination of applied research performed by theCollege of Agriculture and Forestry (University of Liberia) and parastatalswith that of CARI. Also all rubber research is at present in the hands of oneconcession.

(d) Lack of effective liaison with the various extension services, bothin organizing information for extension and (particularly) receiving feedbackfrom farmers.

(e) A strongly implied lack of administrative competence on the part ofsenior CARI staff.

(f) Lack of subresearch stations at appropriate locations to carry outregional adaptive research in the major areas of cultivation for tree cropsand rice.

Forestry Development Authority (FDA)

141. The FDA was created in 1976 in order to administer the Liberianforestry sector and specifically to control the forestry concessions and toregulate the use of forest resources. As an autonomous government body, FDAhas the power to issue, amend and rescind forestry and wild life regulations.

142. Although a development authority and not a Ministry, FDA reportsdirectly to the Head of State. It has a Board of Directors comprising a parttime non-executive Chairman, at present the Dean of the College of Agricultureand Forestry of the University of Liberia, the Managing Director of FDA, amember of a major concession, the head of LBDI and a member of the Ministry ofPlanning. The present composition of this Board differs from that specifiedin the FDA Act which was: the Minister of Agriculture as ex officio Chairmanand the inclusion of the Minister of Planning, the Minister of Local Govern-ment and two Liberian nationals, one a lawyer and the other a businessman.The law also specified that no Director should have an interest in a forestryconcession or any auxiliary undertaking in Liberia. The organization of FDAincludes a Managing Director and reporting to him, a Deput;y Managing Director(DMD) and Financial Controller. The DMD is responsible for four divisionalmanagers in charge of the following divisions: (i) Forest Management, which

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controls the national reafforestation program and monitors concession opera-tions. The latter involves control of felling within each concession area.This division also manages in theory the national forest areas, national parksand wild life but there is little forest not covered by concession agreements,and no national parks or wild life legislation yet exist; (ii) Utilization,which monitors production and sales of forest products for calculating feesand taxes for GOL; (iii) Planning, Resear3h and Statistics, which among otherthings calculates and invoices concessionaires for forest fees; and (iv) Ad-ministration, responsible for procurement, personnel administration and trans-port. The Financial Controller has charge of the Finance Division. The FDAhas staff in four regions and 22 districts totalling 407. Forest managementhas 269 of these staff, the rest belonging to Utilization Division and a plan-tation in Cape Mount County. There are 207 staff in Monrovia making a totalof 614.


143. Major constraints on effective FDA performance are the following:

(a) There is an absence of formal mechanisms to ensure that FDA forestrypolicy is understood and agreed by other major users of land in Liberia. Inthis connection, the Board of Directors is not appropriate, as it lacks repre-sentation from Ministries with jurisdiction over land use in Liberia and afull time Chairman with executive powers.

(b) Further to the above there is no well founded and widely agreed landuse policy for Liberia without which the -oronouncements of FDA may well in thelong run prove ineffective. Neither is there a soil survey for Liberia to aidsuch desirable consensus.

(c) There is no independent unit withain FDA for the production of mapsand aerial photographs and the interpretation of these.

(d) There is inadequate supervision of the regional organization bysenior managers.

(e) There is insufficient degree of decentralization of administrativesupport to regions, such as vehicles and equipment workshops.

G. Recommendations

Objectives and Strategy for the Agricultural Sector

144. The mission agrees with the objectives for the Second National Planas stated in Section A of this report. However, for a full discussion of aproposed strategy, see paras 4.02 - 4.11 of the Main Report (Vol. 1). Adiscussion of the "program" and "project" approaches to development is inparas 3.10 - 3.16 of the Main Report (Vol., 1).

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145. It is recommended that MOA should undertake no production or commer--cial ventures of any kind, with the exception of crop/animal multiplicationuntil private enterprise in this field is well established.

146. It is also recommended that the extension, research, nursery opera-tions and training activities of parastatals (LPMC, LPPC, LCCC) should pass -toMOA and its dependent specialized units such as CARI as soon as the activitiescan be efficiently taken over.

147. Decentralization and improvement in the administration of agricul-tural programs is proposed by the Government in accordance with the recommen--dations of the Rural Development Task Force. The mission agrees with this inprinciple, but the Government must recognize that for this decentralization tobe at all effective, major changes in current practice are required: (i) alarge scale transfer of funds from the central Ministry organization to theregions to provide the logistic support without which the decentralized oper--ation in the Counties, Territories and Districts cannot function; it is desir-able also that some of the funds to be transferred should be used forimproving the salaries and benefits of regional staff; (ii) better trainingfacilities in both management and technical skills, and greater attention tothe development of personnel; (iii) some delegation of authority in personne:L,procurement and operating matters; and (iv) an improved system for monitoringand evaluating regional work.

148. Major change in MOA Monrovia operating procedures, productivity,approach to training and personnel administration, and managerial capabilitywill, therefore, be required. A decision by the Government is required toimplement the decentralization of MOA and rural development in general alongthe lines recommended by this mission.

149. Given the resource constraint in Liberia, the Task Force's proposalto create 15 regions from the existing 9 Counties and 6 Territories may bedifficult to implement in the medium-term. Moreover, the size of most of theTerritories is so small that it may not warrant a full-scale County-style ad--ministration. It may be desirable to have a more equitable planning andcontrol of funds allocations to Territories.

Organization of the Ministry of Agriculture including Semi-AutonomousAgencies, Parastatal Corporations and ADPs

150. It is recommended that the MOA should continue to be the Governmentagency responsible for planning and monitoring the development of the agricul-tural sector, for implementing the sectoral objectives and strategy, for ad-ministering the development effort in the sector and for administering thevarious regulatory and other legal requirements. The recommended MOA struc-ture is shown in Chart 24262.

Central Administration

151. The Minister of Agriculture should have overall charge of MOA, but inview of his many outside and overseas commitments, the Principal DeputyMinister (PDM) should be the Chief Executive Officer of MOA responsible for

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seeing that policy is implemented, and for recommending policy change. Heacts as the Minister in the latter's absence. The Minister, while maintainingoverall supervision, should delegate his current role of Chairman of Boards orSteering Committees of the Parastatal CorpDrations and ADPs to the DeputyMinister of Planning and Development.

152. The PDM should be responsible directly for the Department of RegionalDevelopment and Extension, Department of Technical Services, 1/ Department ofPlanning and Development, Bureau of Personnel and Training, Bureau of Financeand Administration, Office of Public Affairs, and Agricultural Attache in Rome.

153. Departments should each be headed by a Deputy Minister, bureaux by aCoordinator (as a professional civil service grade providing continuity andrequisite managerial and technical expertise), and divisions and offices byDirectors. Recommended departmental and bureau responsibilities are discussedbelow, followed by organizational recommendations for semi-autonomous agen-cies, ADPs and parastatal corporations.

Department of Planning and Development (DPI))

154. The overall responsibilities of this department should remain broadlythe same as currently with the addition of secretariat responsibilities forthe proposed Rubber Development Board (see paras 157, 159 and 207-209). TheDepartment should be more simply structured. than hitherto (see the proposedstructure in Chart 24263), containing only the Bureaux of (1) Planning andEvaluation and (2) Statistics.

The Bureau of Planning and Evaluation

155. The bureau should be responsible for all planning and monitoring/eva-luation tasks within MOA. It should absorb the currently separated functionsof (1) external assistance planning, identification, administration (with MOP)and control, (2) analysis of markets development and performnance and (3) moni-toring and investigation of the institutions providing support for the agri-cultural sector in areas such as credit, input supply, infrastructure, farmerassociations, land tenure, etc. The bureau should consist of two Divisions:(i) the Planning Division, which should be responsible for: (a) helping toformulate, formalize and document the overall objectives, strategies andprograms for the MOA; proposing new policies and activities for considerationby MOA senior officials; and liaising with MOP in this regard; (b) preparingplans for the implementation of sectoral programs; (c) preparing the annualMOA budget in collaboration with Finance Division and Bureau of Administra-tion; (d) developing the necessary information base and performing all analy-ses needed for the prior evaluation of new agricultural programs and strate-gies; (e) all aspects of external assistance planning, identification, controland administration; and (f) reviewing policies and plans for semi-autonomousagencies and parastatal corporations; (ii) the Monitoring and Evaluation

1/ The Department of Technical Affairs is renamed Department ofTechnical Services to emphasize its ro]e as source of most technicalexpertise for MOA and the sector.

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Division which should be responsible for: (a) developing evaluation criteriafor new and existing programs; (b) monitoring and reporting to relevant MOAunits progress of programs, projects and, at an appropriate stage, the semi-autonomous agencies and parastatals; performing special evaluations as re-quired; (c) monitoring and evaluating the support institations, partly throughfunctional supervision of regional staff; and (d) liaising closely with theBureau of Statistics in the collection of data, e.g., for the analysis ofproduce markets.

The Bureau of Statistics

156. This Bureau should be responsible for the collection and preliminaryanalysis of all routine and special statistical data requairements of the MOA,and for the reporting of detailed results. In doing this, the Bureau will beresponsible for ensuring that methodology is appropriate and up-to-date. Itfollows that the Bureau should take over the collection of data for theanalysis of the performance of produce markets. Two officers should report tothe Bureau head: (i) a Senior Statistics Officer, responsible for Analysisand Reporting Division, and (ii) a Statistics Officer, riesponsible for DataCollection which includes the enumerators in the regions. The SSO should havesome functional and administrative control over the SO (Data Collection) sincehe, aided by the Coordinator in the case of large exercises, will be speci-fying and monitoring the type of data needed and the method of collection.The SO, therefore, should work to his technical instructions.

The Rubber Planning and Development Unit

157. This small unit should be formed specifically to provide secretariatsupport for the proposed Rubber Development Board (para :207). The Unit willmake plans, for approval by the Board, related to various key aspects ofrubber sector activity such as linkages between concessions and smallholders,and the proposed planting fund (which could be administered by the LRDU), andwill monitor the progress of such plans and report back to the Board. It willalso perform certain limited planning and control functions regarding RCL andLRDU which will be brought under the general supervision of the Board.

158. The proposed planting fund which is described elsewhere (Vol. III,page 60) is basically the accumulated fund arising from a small levy onsmallholders via the producer price, and on concessions via an export tax.This will then be channelled as aid to concessions for replanting and tosmallholders for rehabilitation, replanting and new planting.

159. It is mentioned elsewhere (para 209) that if the Board's volume ofbusiness and scope increases sufficiently, it may be necessary to increase thedegree of administrative autonomy and to form an Authority with its own3ecrerarnat. In this case the Rubber Planning and Development Unit would noLronger be required within MOA and the Unit staff could be transferred to theA it; ri,ri ;;ly.-

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Department of Regional Development and Extension (DRDE)

160. It is recommended that this Depart'ment should continue to have theexisting responsibilities and perform the functions for regional developmentand extension, which are largely, as mentioned earlier, nominal at the presenttime. Certain important changes in emphas:.s and structure are recommended(see Chart 24264 for the proposed structure), some of which have been ini-tiated by the MOA, at least in theory. The Deputy Minister, in addition tohis administrative responsibility for DRDE, should play a lead part in the co-ordination of central and regional efforts by various GOL agencies. He shoulddo this partly through the Regional Development Technical Committee whichshould advise the National Planning Council on, interalia, the draft nationalplans produced by MOP, partly by ensuring that this regional staff participatefully in the county committees and other activities designed to coordinaterural development work, and partly by his own interministerial contacts. DRDEshould consist of (1) two Bureaux for Regional Development and Extension(BRDEs), responsible for the work of MOA County offices in eastern and westernCounties respectively and (2) an Extension Support Division.

-The Bureau of Regional Development and Extension (BRDEs)

161. These should each be headed by a Coordinator who is directly respons-ible for the County Agricultural Officers (CAOs) in his area. It is recom-mended that the three Regional Agricultural Coordinators who presently form anintermediate level of management betwen the existing Assistant Ministers andthe CAOs should be known as Regional Agricultural Officers (RAOs), and shouldact as assistants to the proposed Coordinators in the management of theregions without having direct line of control over CAOs. They would do thisby field monitoring and technical supervision of all aspects of rural devel-opment and extension, and in the process wculd take over the work of the StaffAssistants to the Deputy Minister. These 6 jobs would no longer be required.The intention of this is to shorten the line of command between the DeputyMinister and the CAOs, and, most importantly, to involve the Coordinators in"hands-on" management of the regions. The senior RAO in each Bureau would actwithin defined limits for the Coordinator when the latter is away, forexample, on field trips which he should make regularly.

162. Concerning the CAO and the proposed County office organization (seeChart 24265), it is recommended that:

(i) the CAO participates fully in the activities of the County Develop-ment Committee and the County Development Council to help ensure thecoordination of all the decentralized agencies responsible for ruraldevelopment. He must play a leading part in this process because he,through the above consultative machinery, has to ensure that theagricultural development efforts in the county are not hamstrung forlack of support from other agencies. He and the Assistant CcuntySuperintendent for Development must liaise very closely to ensurethis;

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(ii) MOA activities in the County performed by non-DRDE units should becoordinated by the CAO and the ACAO closest functionally to theactivity being perf.ormed;

(iii) the MOA Territorial offices (where they exist) should continue to beadministered by the CAO, but all control of rural development andextension should be exercised by the ACAO resporisible;

(iv) staff should only be appointed to jobs in the County organizationwhen there is a job for them to do or when they can participateactively in the creation of needed jobs. As far as possible theexisting position of many staff at all levels with no work to do mustbe corrected; and

(v) ACAO Support Institutions, who should only be appointed when the com-plementary staff in the DPD are available to make use of his informa-tion, will deal functionally with these DPD staff and will work totheir technical instructions.

The Extension Support Division

163. This should provide the high level technical expertise in food crops,tree crops, livestock, inland fisheries, land development, rural youth, homeeconomics and, as required, editorial support in the compilation of packages,for the purpose of: (i) technical package preparation; (ii) back-up supportfor the County mid-level and subsistence level extension personnel; and(iii) direct advice to commercial and other farmers in the regions. Contraryto the proposals in the Blue Book, ilt is recommended: (a) that the source ofmost technical expertise should reside with the Department of TechnicalServices (DTS), except in the area of the extension process, and (b) that theDirector of Extension Support should possess this extension expertise (furthertechnical support for expertise in extension should be available from CARIwhich has an officer nominated and equipped for this purpose). Therefore,apart from the subjects of home economics and rural youth which, beingoriented to more general aspects of rural development, should be the entireresponsibility of DRDE, all other subject matter specialists should originatein the first instance from DTS. DTS will have the ultimate functional responl-sibility of ensuring that these specialists are technically competent and areusing correctly the resources of CARI, as and when these become available. Afurther important consequence of this new concept is that staff of the Exten-sion Support Division, except the Director who clearly must be a permanentmember of DRDE, should not be transferred permanently to the DRDE until thereis a fuill job of extension work to be done in DRDE. The emphasis must changein principle, from the present appointment of staff in DRDE (who may or maynot be properly qualified for the job they are supposed to do) to jobs whichhave been identified on paper regardless of whether there is work to be doneor not, to the appointment of staff to jobs where a genuine workload exists.In summary, it will be the task of DTS to develop and recruit, and train ifnecessary, senior subject matter specialists (in close cooperation with DRDE)for loan to DRDE until the workload is sufficient to warrant their workingfull time in DRDE, and at this point they should be transferred to DRDE.

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Benefits should be: one source of technical expertise within the technicaldepartment of the MOA with responsibilitiejs for coordination of agriculturalresearch, and a more efficient utilizatior. of staff.

The Department of Technical Services (DTS)

164. DTS should provide, in conjunction with CARI, the technical resourcesfor the MOA and particularly for extension services, in the following mainsubject areas: all food crops, tree crops, livestock, inland and marinefisheries and land development (to be expanded to land planning and develop-ment). Home economics and rural youth should be handed over to DRDE. DTSshould ensure good coordination between MOA and CARI, and should take someinterest in the work of the proposed Rubber Research Institute of Liberia(RRIL) through the Deputy Minister and his membership in the TechnicalCommittee of RRIL. DTS should also be directly reponsible for (i) all cropand animal multiplication work, through the IFAD Seed Project and either MOA-run farms or preferably private outgrower farms and group nurseries; and (ii)the various regulatory activities for which MOA is responsible. Subdivisionsof the DTS are listed below (see Chart 24266 for proposed structure).

The Crops Bureau

165. This should be responsible for all crop multiplication and theprovision of technical know-how and advice in this subject. The tree cropsDivision of this Bureau should take responsibility for the viable nurseriesand plant multiplication schemes of LPPC and LCCC.

The Livestock Bureau

166. This should be responsible for animal multiplication, veterinaryservices, provided by the Veterinary Services Division, and for the provisionof technical advice in livestock matters.

The Bureau of Regulatory Services

167. This would be responsible for all animal and plant quarantineactivities, at borders and elsewhere, and for inland and marine fisheries(they would provide technical know-how and would liaise with CARI in marineinland fisheries research). This Bureau should not be directly responsiblefor research personnel working at CARI.

Land Planning and Development Division (LPDD)

168. This should be responsible for, in addition to the existing develop-ment work of an engineering nature: (i) undertaking a soil survey of Liberiain the agricultural areas (this would require technical assistance); (ii)determining from the soil survey the capability of the land to grow variouscrops; and (iii) establishing a land use plan for the agricultural areas. ALand Use Planning Committee should be set up under the Chairmanship of theDeputy Minister of DTS with representation from FDA and Ministries of Planningand Lands and Mines. The LPDD of MOA should serve as the secretariat to theCommittee with the Director of the Division. acting as the Secretary to the

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Committee. The Committee would be responsible for estalishing a Land Use Planfor the whole country and implementing a long-term policy of separatingpermanent forest areas from agricultural land. The LPDD should liaise closelywith the proposed Inventory and Survey Division in the Forestry DevelopmentAuthority (FDA) (see para 210). In view of the importance of its function,the LPDD should be directly responsible to the Deputy Minister of DTS.

169. DTS, through the Deputy Minister or his delegate, will provide super-vision of: (i) CARI, through the DM's chairmanship of the Technical Committeeof CARI; (ii) RRIL, through the DM's chairmanship of the Technical Committeeof RRIL; and (iii) IFAD Seed Project, through the DM's membership of theNational Seed Committee (of which the Minister of Agriculture is Chairman).The DTS interest in and authority over the operations of the RRIL will tend tobe less if the proposed Rubber Development Board, which will play a moreactive role in the operation of RRIL, is established.

Bureau of Personnel and Training

170. The commments made in the Blue Book concerning the lack of qualifiedand trained personnel still seem alarmingly valid, and this deficiency hasbeen identified as one of the major constraints on MOA being able to deliveran effective extension program. The importance of remedying this situationmust be recognized by GOL when the allocation of funds is decided. There isno point in having many staff in jobs with logistic support if they do notknow what to do.

171. In order to emphasize the importance of personnel development andtraining to the success of the MOA upgrading operation, a separate Bureau isrecommended under the control of a Coordinator. Apart from the substantialbenefits of drawing together these two related functions, the removal ofpersonnel responsibilities from Administration will make that Bureau a moremanageable and coherent unit. The Bureau should comprise three Divisions (seeChart 24267 for proposed structure} as follows:

(i) The Personnel Division should, in addition to its current responsi-bilities, advise heads of Departments, Bureaux and Divisions on indi-vidual needs for promotion, transfer, etc. and take some initiativesin the management of personnel development as, for instance, insupervising the career paths of middle and senior level officers.The Blue Book appears not to give due weight to the personnel func-tion in MOA.

(ii) Training, Planning and Coordination Division (TPCD) should as amatter of urgency: (a) develop an inventory of tIaining needs at alllevels for MOA staff, working in close consultation with the MOAsenior officers concerned; (b) develop plans and programs for meetingthese needs, from external sources or, if necessary, from withinMOA. This includes the special training associated with the restruc-turing of MOA; and (c) administer and coordinate external training.

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(iii) Instruction Division should, as soon as requirements are known, or-ganize and conduct MOA-based training. It is recommended that, untilrequirements are known, staff in this division should assist TPCDwith the training needs inventory. The Training Committee should beactivated at the earliest. The first meeting should be a means ofexplaining the detailed approach to be adopted in establishing thetraining needs inventory and how the department and bureau heads willbe required to assist.

Bureau of Finance and Admi-nistration (BFA)

172. The purpose of this Bureau should remain as set out in paragraphs 36-40 with the modifications that the Personnel Division should be moved to theBureau of Personnel and Training (see Chart 24267 for proposed structure); andthe finance function should be more strongly emphasized within the MOA. Tothis end it is recommended that: (i) the Bureau is renamed as above, and(ii) that the Coordinator of the Bureau as well as the Director of the FinanceDivision should have financial and accounting training. In times of financialstringency it is important: (i) that budgeting is performed with the greatestcare, and that the need for all items of cost is questioned critically from afinancial viewpoint at a senior level, and (ii) that financial reporting isaccurate, timely and appropriately detailed. There are doubts on both countsat the present time. Another advantage of financial expertise at a higherlevel will be in the discussion and resolution with MOF of financial mattersrelating, for example, to the approval of budgets, the arrangements ofallotments and the actual disbursement of expenditure.

Chairmanship of Semi-Autonomous Projects, Agencies and Parastatal Corporations

173. As part of the reorganizaton of M0A, it is recommended that thechairmanship of the semi-autonomous parastatal corporations, agencies andagricultural projects should pass from thie Minister of Agriculture to theDeputy Minister for Planning and Development. This change should be made onthe Project Steering Committees of BCADP, LCADP and LRDU, the boards of LPMC,BOPC, LPPC, LCCC, ACDB and the Decoris Sil Palm Company. It is consideredthat the demands on the Minister' s time and attention from numerous mattersconnected with his high office both from wiqthin Liberia and overseas, make itvery- difficult for him to bring the necessary continuity and concentration tobear on the direction of these organizations. Also, there are advantages inthe Deputy Minister for Planning and DeveLopment acting as Chairman in thathis Department is expected to be responsible for reviewing their policies andplans and their monitoring and evaluation. A simiLlar argument could also bemade for Board membership of these units passing from the heads of otherMinistries to an appropriate Deputy Minist.er. The Minister of Agricultureshould retain the chairmanship of the Agricultural Research Committee and theNational Seed Committee on grounds of thetr national scope and importance.

Agricultural Research

174. It is recommended that the Agricultural Research Council (ARC) shouldcontinue to direct and make policy for applied adaptive research in Liberia

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and particularly at CARI as described in Section F, and that the TechnicalCommittee of CARI should continue to perform the overall technical directionof the research program at CARI.

175. It is recommended that ARC should similarly direct the activities ofa proposed Rubber Research Institute of Liberia (RRIL) to be set up and fi-nanced by the rubber sector (concessions, Liberian farmers and smallholders),RRIL, the proposed purpose and functions of which are described in Volume IIIdealing with tree crops production and marketing/processing, would betechnically supervised by a Technical Committee whose mem'bership shouldinclude Deputy Minister Technical Services as Chairman, Director of RRIL(Secretary), the Deputy Director of RRIL, Coordinator of 'Planning andEvaluation (MOA), the senior RRIL research officers, and a technicalrepresentative of each non-GOL member of ARC.

176. It is important that members of the two Technical Committees areadequately qualified and experienced to be able to contri'bute at the technicallevel required. The activities of RRIL would also be overseen by the proposedRubber Development Board. There would be a close liaison and, to the extentneeded, consultation between CARI and RRIL, but they would be working indepen-dently, neither one overseeing the work of the other.

177. It is recommended that, once objectives, policies, and budgets havebeen agreed, that both these research institutions be allowed to operate witha degree of autonomy in such matters as research administration, staffing, andthe detailed allocation and commitment of funds. Interference from MOA andGOL in day-to-day administration should be avoided.

178. In view of the existing shortage of funds in Liberia it is necessarythat the funds available are put to good use. Thus, the 'Directors of CARI andRRIL must be permmitted to determine and implement the staffing levelsrequired, which are in some areas 50% or less than current levels. This willpermit scarce funds to be used for much needed supplies, equipment, accom-modation and logistical support.

179. The relevant research divisions at CARI should be aware of alladaptive research and trials being performed in Liberia in non-rubber cropsand livestock and should ensure that where possible these efforts are produc-tive and complementary to CARI's current and planned work.

180. CARI is an important institution with the largest concentration ofLiberian and expatriate skilled researchers in Liberia. It is necessary forindividuals in senior jobs in CARI with a strong administrative content to besufficiently capable and experienced administratively.

Integrated Agricultural Development Projects (ADPs)

181. The principal organizational issues of ADPs relate to (a) the timingand method of integration with MOA, and (b) their cost effectiveness.

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(a) Integration with MOA

182. It is rightly proposed under BCADP II to: (i) expand the project tocover Bong County and Gibi Territory, the Project Manager assuming the job of

CAO, and (ii) absorb those members of the MOA extension staff already in BongCounty outside the project area which are needed by the project. It is notedthat this process is in fact absorption of MOA by the ADP rather than viceversa since the whole County would then be funded and managed by the project.The project approach, at least in the short term, will thereby be expanding atthe expense of the program approach.

183. In the case of LCADP II, which covers the whole of Upper Lofa County,the Project Manager has taken over the entire county (Upper and Lower Lofa) asCAO. This may be acceptable at present since virtually no agricultural devel-opment activity is taking place in Lower Lofa. However, if and when a devel-opment program gets underway in Lower Lofa, the Project Manager should not beCAO for the whole County. There are two reasons for not taking over the wholeCounty: first, Lower Lofa is physically cut off from Upper Lofa which makesit very difficult to reach it from Voinjama; second, the Project Manager willbe reporting to the Project Steering Committee (PSC) and the AssistantMinister for Regional Development and Extension at the same time. The missionrecommends that if and when a development program is implemented for LowerLofa, it should possibly evolve into a new County absorbing Bomi HillsTerritory, and should have its own CAO reporting to DRDE in Monrovia (see alsorecommendations on County/Territory organization in para 67).

184. The gradual increase of the project area in Nimba and the closerrelations between project and County seem organizationally satisfactory at theoperating level. However, it is recommended that a PSC should be created inrecognition of the fact that NIRDEP cannot be fully integrated with MOA eithercentrally or in the County while it is separately funded. Also the existenceof a PSC will assist considerably with the (iraw-down of funds from GOL, andoverseeing the fairly complex funding arrangements for this project. Theexistence of a PSC may also facilitate greater freedom for project managementin matters of staff recruitment, promotion and disciplinary action.

185. The PSC of LRDU should continue to function as the project's direct-ing body, but should be chaired by the MOA Deputy Minister of Planning andDevelopment. LRDU will be subject to periodic surveillance by RDB to ensurethat LRDU's activities are in accordance with RDB's policies and sectoralobjectives. LRDU could possibly administer the rubber planting fund (des-cribed in Volume III, page 60) if and when it is established. This fundshould be used for financing inputs and extension facilities for concessions,Liberian commercial farmers and smallholders, thus avoiding the need forcredit delivery and recovery.

(b) Cost Effectiveness

186. The calculations in the LCADP Phase I Project Completion Reportindicate that investment was economically justified. Whether costs could havebeen lower, and, therefore, the return higher, is difficult to assess. Atpresent the cost of BCADP and LCADP is high mainly because they substitute, to

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a large extent, for other Ministries in providing social and physical infra-structure. This may have to continue for some time until the other Ministriesare able to provide timely and effective support to ADPs in meeting theirtargets. The recommended changes in emphasis on swamp development and treecrops should lower costs and improve returns for future ADPs, as should agradual reduction in salaries to the level of MOA. In designing future ADPs,emphasis should also be on increasing involvement of other Ministries engagedin rural development.

187. As regards NIRDEP Phase I, although there is little criticism of thisproject from the cost standpoint, there is a lack of data concerning itseconomic impact and, therefore, it is still an open question whether theproject investment has been economically justified.

Parastatal Corporations

188. The parastatal corporations which are Government-owned and under thegeneral jurisdiction of the MOA, should each have a Board of Directors withmembership (stated by job and not by individual) from concerned Ministries,the MD of the parastatal concerned, and one or two competent local businessmenand public accountants. As recommended earlier in this report section, theChairman should be the Deputy Minister for MOA Planning and Development ratherthan the Minister of Agriculture. Parastatal operations, particularly thoserelated to agricultural development, should be regularly monitored by the MOADepartment of Planning and Development, and the results of such monitoringsupplied to the Deputy Minister.

189. The Directors of these prastatals must know and be able to fulfillthe functions and responsibility of a company Director. It is recommendedthat an authoritative program of instruction on the theory and practice ofcompany direction and on the responsibilities of all Directors should bearranged by the MOA in the near future.

190. It is vital that Govermaent policy and legislation relating to para-statal corporations and indeed the private sector provides a stable environ-ment in which to operate, particularly in matters of taxation. The temptationto impose sudden levies or windfall taxes should be avoided. Also the inter-nal affairs of parastatals, as long as they are consistent with law (e.g.labor law), should not be interfered with, for example, by persons wellconnected with the Government of the day.

Liberia Produce Marketing Corporation (LPMC)

191. The Board membership of LPMC should be specified as for other para-statals: in terms of GOL agency posts and other non-institutional indivi-duals. Non-institutional members should be recommended for appointment by theMininster of Agriculture and subsequently confirmed by the Head of State.

192. As LPMC is a produce buyer and is under the general supervision ofthe MOA, it is recommended that one of the objectives of this Corporationshould be to help safeguard the economic interests of the Liberian producer.This implies some responsibility for the efficiency of the marketing system as

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a whole, and for the price received by the farmer. There is at present noarrangement to perform this important responsibility.

193. In the medium term, LPMC should remain the focus of agriculturalexport marketing in respect of coffee, cocoa and palm kernel products and bethe sole exporter of these products from Liberia (for arguments behind thisrecommendation and others below, see paras 3.35 and 3.36 of the Main Report,Vol. 1).

194. LPMC should also continue to act on behalf of the Government asimporter and distributor of PL 480 rice and should continue to purchase, milland sell local rice on a non-exclusive basis.

195. The Corporation should continue with its minor function of supplyinginputs such as fertilizers and tools.

196. As discussed in para 93, the agricultural production activities whichinclude the oil palm plantations and oil mills are not closely related toLPMC's central role of produce purchasing, distribution and marketing. Theseproduction activities should be transferred to the private sector or a para-statal with specific responsibilities in this functional area, as soon asefficient management can be assured.

197. Returning to LPMC's marketing responsibilities, the supporting Paper6 of this Volume discusses in depth the extreme weakness of the district levelcooperative in the marketing system and the poor prospects for such coopera-tives functioning properly on their own in the near future. Much evidencepoints to the clan cooperative or a smaller farmer organization as a moresatisfactory unit for the farmer, in that it is easier to manage and police,and serves his interests by being more of a genuine cooperative than an in-competent, often corrupt, public bureaucracy. To replace the district by asmaller cooperative in the marketing system assumes either that the smallercooperative can operate viably and also pay the farmer the fair price, or theextension of LPMC's purchasing network to district level. The latter possibi-lity seems unlikely to be a viable alternative in view of the seasonality ofcrop marketing although it would, in principle, be a logical step.

198. To decide on the financial viability of the clan cooperative or eventhe TCU as key elements in an improved marketing system, will require furtherinvestigation which should also explore the cost implications of an extensionof LPMC's marketing network. Other elements in an improved marketing systeminclude the private licensed or "qualified" buying agent who should be allowedto operate in competition with the smaller cooperative, and should be subjectto some supervision by the LPMC station concerned.

Liberian Palm Products Corporation (LPPC)

199. It has to be investigated whether LPPC can be made a viable commer-cial enterprise. The cost has to be drastically reduced. The Corporationspent nearly $22 million up to June 30, 1981 in establishing 7,000 acres ofoil palm plantings, or less according to some reports. Head office, recurrentcosts of $600,000 for the nine months ending June 30, 1981 amounted to 33% of

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total LPPC recurrent costs (see para 102 for details). This level of expendi-ture is difficult to justify at a time of financial difficulty in Liberia.

200. With Buto plantation gone (para 100) while the excessive number ofheadquarter staff is still there, the viability of LPPC is subject to seriousdoubt. It is recommended that the countrywide oil palm extension and nurseryoperations should be initially handed over, with appropriate modifications, tothe relevant ADP or MOA and later, town or village nurseries, run by farmersthemselves, should be promoted on a phased basis; seedlings should not bedistributed where not ecologically suitable. It will, of course, be necessaryto ensure that the basic MOA support organization is in place before thehandover is made. An agronomic and financial evaluation of LPPC (includingthe Dube plantation and Worbar coconut project) is recommended to helpdetermine its financial viability and specify further measures needed fordivestment/restructuring/modernization/expansion.

Liberian Coffee and Cocoa Corporation (LCCC)

201. LCCC is also burdened by high head office overhesads and is performingextension and crop multiplication functions which should be performed by therestructured MOA. For immediate improvement, it is recomnmended that LCCCactivities be restricted to five project zones and all countrywide cocoa andcoffee extension and crop multiplication tasks should be passed to theappropriate ADP or MOA leading to later establishment of village nurseries(para 200); no seedlings should be distributed in areas wghich are ecologicallyunsuitable. However, there is sufficient doubt for technical reasons aboutthe financial viability of the remainder of LCCC. An in-depth study of LCCCis recommended to determine its financial viability and to specify measuresneeded for its restructuring/redesigning/expansion/dissoLution/absorption intothe MOA.

Agricultural and Cooperative Development Bank (ACDB)

202. Major recommendations are as follows:

(a) ACDB should be responsible for providing the primary rural bankingservices in rural areas in Liberia;

(b) ACDB should focus on the mobilization of rural savings with the sameurgency as on the provision of credit, in order to provide funds forlending and for adequate operating liquidity;

(c) Credit should be provided, in accordance with agreed quotas forvarious types of borrowers or purposes, to individuals, creditcooperatives or commercial ventures engaged in agriculture and avariety of other activities which will, directly or indirectly,generate rural development;

(d) These activities and the quotas should be carefully defined for theguidance of local ACDB branch managers;

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1,e) The expansion of ACDB facilities already planned, that is an addi-tional six branches and six fixed cash points, should be implementedas soon as funds and staff can be made available. Considerationshould be given to the acquisition and use of mobile cash points,which should be used solely for operating savings and possiblechecking account facilities. These would be controlled from thecounty branch in the first instance, and from the appropriate localbranch as these are established. It is recommended that the exten-sion of ACDB banking services as described above should proceed atthe quickest pace which the Bank and the local infrastructure cansustain, without loss of quality and control from Monrovia. Costs ofall rural banking facilities should be kept to a minimum consistentwith service quality and security;

(f) The ACDB Board of Directors should be strengthened by the addition ofat least two private individuals with extensive experience at a highlevel in commercial banking and/or business affairs. At least oneshould be a professional banker or a public accountant;

(g) Lump sum loans should not be made to marketing cooperatives for pur-chasing produce. Overdraft limits should be set on some equitablebasis related to the volume of purchases the previous year. Itshould be noted that credit needed for agricultural develoment at thesmallholder level will diminish because of: (i) the proposed RubberPlanting Fund which will provide most financing needs of the smallrubber farmer, and (ii) a reduced emphasis on cocoa, coffee and swamprice development;

(h) ACDB should, in conformity with the LCADP II proposals, take anequity share in the major marketing cooperatives and have represen-tation on their Boards of Directors. Beyond this point of helping todetermine policy and control the main aspects of the cooperatives'operations, ACDB should not be expected to go. The establishment ofcooperatives, the training and development of managers and staff, andthe design and implementation of procedures must devolve, in themedium term, on the ADPs and CDA, and in the longer term on the CDAalone. When ADPs have ceased to function, staff engaged in creditadministration could be transferred to ACDB and those engaged inother assistance to cooperatives transferred to CDA;

(i) Additional development funding will be needed by ACDB for the programoutlined. This funding could be provided from a combination of moreaggressive mobilization of savings and international assistance;

(j) Consideration should be given to: (i) allowing ACDB to borrow atconcessionary rates of interest from the National Bank of Liberia(NBL) to enable it to cover its administrative costs of lending tocooperatives and the subsistence farmer, and (ii) increasing theequity capital to provide a stronger financial base for ACDB; and

(k) Pay scales of ACDB employees should be made comparable with those ofother Government-owned banks in Liberia.

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Cooperatives and the Cooperative Development Agency (CDA)

203. The policy of encouraging the development of larbge regional or dis-trict cooperatives should be reappraised, in view of the weight of accumulatedevidence and informed opinion against their effective functioning in favor ofthe smaller clan level cooperative. The Cooperative Specialist provided aspart of LCADP II should include in his terms of reference: (a) a study of(i) the financial viability of the clan level marketing cooperative (member-ship up to say 500), and (ii) the implications for costs and managementresource requirements (e.g. in CDA supervision) if the smaller marketingcooperatives were widely adopted; and (b) in the event of the smaller market-ing cooperative proving viable, recommend ways of assisting the development ofthese units and of de-emphasizing the larger marketing cooperatives and assistactively in the promotion and development of the smaller cooperative. It isrecommended that the Cooperative Specialist should be available in Liberia forfour years rather than the envisaged two years. He should be very carefullyselected for this important post, should be provided with a detailed programof work for the period and be monitored effectively.

204. In the short term, the functioning of the larger cooperatives shouldbe subjected to more rigorous financial control. Accounts should be submittedat least quarterly, and preferably monthly to CDA. There should be an annualaudit by independent accountants. CDA should assume responsibility for imple-menting this system.

205. A gradual evolution of single purpose cooperatives is desirable.Consistent with the requirement of financial viability, separate credit coop-eratives could be established. The rural credit cooperative, preferably atclan level (in so far as they can be set up), should act as extensions of ACDBin the provision of credit (funds would be loaned by ACDB) and in the mobili-zation of rural savings (funds would be deposited with ACDB). CDA should beresponsible, with ADP staff, for establishing such cooperatives in the mediumterm. In the short term, mixed marketing/credit cooperatives will continue,but there should be a steady movement, in parallel with the regional develop-ment of ACDB recommended earlier, towards the separation of the two functions.

206. It is most important for the success of (i) the short-term control oflarger cooperatives, and (ii) the longer term development of a simpler, moreappropriate and truly "cooperative" cooperative system along the lines pro-posed above, that the CDA is funded adequately.

Rubber Development Board (RDB)

207. The rubber industry consists of a number of diverse and importantoperations and units ranging from the concessions to the smallholders whichare at present uncoordinated in any formal sense. There has been a lack ofsystematic attention to the rubber subsector by MOA, both in the direction ofadaptive research and in overseeing the interests of smallholders, commercialfarmers and concessions. Given the importance of this sector to the Liberianeconomy (in 1980 it accounted for 70% of agricultural exports and 17% of totalexports), and in view of the scope for extending and improving the industry,it is recommended that a body to be known as the Rubber Development Board

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should be established in order to assist in planning, monitoring and coor-dinating the activities of the subsector. The main tasks of the Board wouldbe to: (i) formulate policies and programs for rubber development; (ii) studyand improve linkages between concessions and smallholders; (iii) assessresearch requirements and priorities, and monitor progress; (iv) coordinaterubber standards requirements; (v) provide overall supervision of the proposedrubber planting fund; (vi) plan and supervise surveys in the rubber subsector;and (vii) review and take action as needed in all matters relating to rubberprocessing and marketing. Membership of the RDB should include the following:(i) Minister of Agriculture - Chairman; (ii) Director of RRIL; (iii) repre-sentatives from MOP and MOF; (iv) Project Manager of LRDU; (v) Manager of RCL;(vi) representatives of the concessions and of the Rubber Producers Associa-tion of Liberia; (vii) representatives of the rubber smallholders; and(viii) a representative of the rubber planting fund (if not administered byLRDU).

208. RDB should be able to take decisi._ons on all matters affecting thesector. The secretariat of the RDB should be the Rubber Planning andDevelopment Unit in the Department of Planning and Development (MOA). ThisUnit should be responsible for all administrative matters connected with RDB,for planning and monitoring the activity of the sub-sector and for supervisingthe administration of the proposed planting fund.

209. Before recommending the RDB, several options were considered, includ-ing a Rubber Development Authority (RDA). This body could be responsible forLRDU, RCL and other public sector process:Lng factories, with a secretariatfor, among other things, monitoring concessions, setting producer prices, andphasing and monitoring the development of the subsector. The concessions,farmers and smallholders would not be represented on the governing Board,although they could participate partially through an advisory committee. Thedisadvantages of the RDA approach in the Liberian context, in comparison withRDB, were seen to be: (i) the absence of a functional link with MOA throughthe Department of Planning and Development; (ii) the absence of a body repre-senting all major interests of the industry, whose decisions would be made onthe basis of concensus; coordination of the various interests in the sectorwas considered an important objective for a controlling body; (iii) un-importance at this stage of formal monitoring of rubber concessions by anindependent body since, unlike in the forestry sector, violations of conces-sion agreements in the rubber subsector are not usual; and (iv) the need formore financial services and resources of staff, accommodation, etc., which afull-fledged RDA would entail. Moreover, as the workload and the complexityof the subsectoral planning and control are not known with certainty, theestablishment of a modest Board instead of a full-fledged Authority would bemore appropriate at this stage.

Forestry Development Authority (FDA)

210. Major recommendations are as follows:

(a) In recognition of the importance of the FDA to the economy and im-proving its linkages with other land users, the Board of Directorsshould be strengthened by including senior representatives from theMinistries of Agriculture, Planning, and Lands and Mines.

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(b) The main functions of the FDA should include: (i) planning and admin-istering the national afforestation program; (ii) monitoring produc-tion and sales of forest products and calculation and collection offees and taxes for GOL; (iii) managing national parks and wild life(no parks or wild life yet exist); and (iv) assisting the preparationof a national land use plan for Liberia (see para 168) and closelyliaising at technical and policy making levels with other GOLagencies (such as Ministries of Agriculture and Lands and Mines)which are major users of land in the country.

(c) In addition to the four divisions already created by the FDA Act, anInventory and Survey Division should be set up (see supportingPaper 2: The Forestry Subsector, Vol. II) by amalgamating the RemoteSensing Unit and Support Service Section (under the ManagementDivision). This new Division should be capable of producing andusing the necessary aerial photographs and maps. The Division shouldalso liaise with the LPDD of MOA (para 168) for the preparation of anational land use plan and follow-up within FDA with a detailed landuse plan for the designated forests, separating permanent forestsfrom areas where farming would be allowed.

(d) Technical assistance should be sought for the initial work ofestablishing and updating the national land use plan, together withthe necessary technical and administrative support in FDA.

(e) The effectiveness of FDA regional organization should be improved by(i) creating "forest management units" within the regions (see sup-porting Paper 2 in Vol. II for details); (ii) increasing logisticalsupport for regional offices; and (iii) intensifying the supervisionof regional offices by senior FDA managers.

H. Steps Towards a More Effective MOA

211. Along with the structural and related changes recommended inSection G, certain important actions are needed, without which the MOA cannotfunction effectively. These include the following:

(a) A major and rapid reduction in staff levels in nearly all departmentsof MOA, in Monrovia and regionally, to correspond with actual orpotential (given adequate logistic support) productive workloads;workloads must be based on genuine extension programs such as theprovision of improved planting material and livestock. The staffreduction should also be implemented in CARI. If staff reductionsare not considered administratively and politically feasible, thenalternative solutions would have to be found to insulate the capableand motivated staff from those who are not;

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(b) The use of the funds released through (a) above to help equip MOA, inthe regions and centrally, with the transport, materials and othersupport resources they need, and to improve the remuneration of MOAregionally-based staff;

(c) The production of improved planting material and livestock insufficient quantities to meet farmer needs, and the development of anational program for their extension;

(d) The establishment of external and internal training programs suitablefor the needs identified by MOA;

(e) The design and implementation of a monitoring and evaluationreporting system for MOA regional operations;

(f) Revision of expenditure coding for improved reporting and control ofexpenditure by cost center;

(g) Revision of General Services Agency and MOF procedures to permitspeedier expenditure authorization and payment, and delegation ofsome expenditure authority and funds to regions; and

(h) Implementation in the Department of Planning and Development oftechniques for statistical data design, collection and processing,and for sector planning, monitoring and evaluation.

212. In Annex 1, all organization and management recommendations, exclud-ing those relating to strategy, are listed in suggested sequential order (un-less otherwise indicated) in two groups: (i) those which can be undertaken byMOA using GOL resources, and (ii) those requiring additional external tech-nical assistance and/or funding.

213. The proposed actions should not be tackled piecemeal but within theoverall framework of a national extension program. The technical assistanceproposed must be carefully analyzed by donors and MOA and also scheduled inaccordance with the national program. This program should be regarded as thebase to which all MOA actions and technical assistance is closely related.Actions not included in the listing which follows, that is, those relating tosemi-autonomous agencies, parastatals and similar units, are equally importantand should be likewise implemented within the framework of the nationalprogram.

214. To achieve this close coordination between aid donors and MOA, it isrecommended that a working group should be set up, comprising representativesof the principal aid agencies, MOA Planning and Development Department, MOPand MOF. The objective of this group would be to agree on the major tasks tobe undertaken in the agricultural sector, their priorities and relationships,the technical assistance and/or funds needed, the individual donor(s) to beresponsible for the aid needed, and the mechanisms for controlling each aidproject. The DPD of MOA should provide support and secretarial assistance tothe Group and as such strengthening of the DPD should precede formation ofthis Group.

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215. In addition to the technical assistance needs of MOA shown atAnnex 1, the needs of other subsectors identified by UNDP/FAO Program Develop-ment Mission (1982) are shown at Annex 2.

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Page 1

LIBERIA

AGRIC[JLTURAL SECTOR REVIEW

Phased Program for Reorganization of MOA

A. Actions not requiring external assistance or funding

Modifications toAction Responsibility Main Sequence

1. Agree proposed MOA organization in detail (as MOA, GOLa basis for budgeting etc.)

2. Agree structure-related and other actions. MOA, GOL With Al

3. Agree technical assistance and funding MOA, GOLrequirements.

4. Regroup MOA divisions and bureaux. Appoint MOA, GOL After A2heads of divisions/bureaux. Delegate respon-sibilities for board membership of para-statals, ADPs, etc.

5. Initially identify staffing needs, surplus MOA, GOL Before B2staff; agree mechanism for reducing staff (CSA 1/ et al.)levels; implement reductions. 2/

6. Provide logistical support for MOA Monrovia MOA(from reduced staff costs)

7. Provide logistical support for MOA regions MOA With A6(from reduced staff costs)

8. Arrange increases in remuneration for MOA MOA After B7regional staff (from reduced staff costs)

9. Arrange delegation of financial authority to MOA, GOL After B7CAOs (and other decentralized GOL agencies).

B. Actions requiring external assistance or funding

1. Define detailed organization of Dept. ofPlanning and Development (DPD), with its MOA + tech After A4bureaux and divisions. assistance

2. Define staff needs for Bi; appoint staff; MOA + techagree mechanism for reducing staff levels; assistancetransfer/phase out surplus staff. 2/ + GOL

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3. Develop technical capability in DPD for Technical(1) statistical data collection/analysis/re- assistanceporting and (2) Planning and monitoring theactivities of the agricultural sector and ofMOA; design regional monitoring/evalua-tion/reporting system.

4. Establish Rubber Development Board and the MOA + After B1Rubber Planning and Development Unit in technicalDPD of MOA. assistance

5. Define detailed MOA organization (except MOA + After A4Dept. of Planning and Development) and write technicaljob descriptions for heads of depts., assistancebureaux, divisions, sections.

6. Define staff needs for B5 (except for DRDE MOA + techextension staff - see item 8); appoint staff; assistance +agree mechanism for reducing staff levels, GOLtransfer/phase out surplus staff. 2/

7. Prepare extension program for

- upland LAC 23 rice seed (delivery begins MOA + Tech.from mid-1983) assistance

- improved coffee planting material MOA + Tech.assistance

- improved cocoa planting material MAO + Tech.assistance

- improved tuber crops planting material MAO + Tech.assistance

8. Define and calculate central and regionalstaff requirements for the followingextension programs:

(a) LAC 23 upland rice seed (delivery begins Tech.mid 1983) assistance

(b) Improved coffee planting material + MOA

Tech. Asstce.(c) Improved cocoa planting material T A

+ MOA

(d) Improved tuber crops planting material; Tech. Asstce.appoint staff; transfer/phase out + MOAsurplus staff. 2/ Tech. Asstce.

+ MOATech. Asstce.+ MOA

ANNEX 1Page 3

9. Determine technical/managerial training re- Tech. After B2, B6,quirements for MOA personnel as departments assistance B8are restructured and staffed. + MOA

10. Establish inhouse training courses or Tech.facilities as required. assistance

+ MOA

11. Provide remaining logistical support for MOA GOL + aid After B8Monrovia.

12. Provide remaining logistical support for MOA GOL + aid With Bllregional operations.

13. Perform feasibility study for rubber planting Technicalfund. assistance

14. Establish rubber planting fund, if considered MOA + techfeasible. assistance

15. Establish Land Planning and Development Divi- MOA + tech With B6sion (as expansion of existing Land Develop- assistancement Division in MOA) to prepare nationalland use survey.

1/ Civil Service Agency.

2/ Staff reductions may be carried out in four stages:

a. initially by MOA based on their realistic appraisal of staff needsfor the proposed organization (A5);

b. by MOA with technical assistance for the Department of Planning andDevelopment (B2);

c. by MOA with technical assistance for MOA less DPD and Department ofRegional Development and Extension (B6);

d. by MOA with technical assistance for DRDE; this would be done afterthe preparation of an extension program (B8).

If staff reductions are not considered administratively and politicallyfeasible, then alternative solutions would have to be found to insulate thecapable and motivated staff from those who are not.

LIBERIA


Technical Assistance Requirements Identified by UNDP/FAO (1982)

Target Start EstimatedA. PLANNING SUPPORT OBJECTIVES Date and External Inputs External Cost

Duration US$ '000

1. Land use Planning To strengthen Land and Water Division 1983 Experts (3) = 96 mm 1,265.7of MOA 3 years Consultants = 6 mm

Training = 90 mm

Equipment = 105,000

2. Agricultural Statistics To strengthen Statistics Division of 1983 Experts (2) = 51 mm 1,244.6Support MOA 4 years Training = 26 mm

Equipment = 127,00

3. Publication of 1971 Printing and distribution under 1983 15.0Census project A2 above 0

4. Agricultural Planning To strengthen Planning Division of 1983 Expert (1) = 24 mm 287.2Support MOA 2 years Training = 12 mm

Equipment = 28,000

B. CREDIT, COOPERATIVES ANDMARKETING

1. Rural Credit Training Design training Programme for ACDB; 1983 Experts = 36 m/m 629.8Programme Design and assist in establishing a control 3 years Training(6x3)18 m/mDevelopment system and develop an organization

and methods system to enable ACDB Equipment = 57,000have the capacity to meet itsextended operations

l~~~~~~~~~~~~~~~

0I r

Target Start Estimated

OBJECTIVES Date and External Inputs External CostDuration US$ '000

2. Strengthening Cooperative Assist CDA prepare and develop a 2 years Expert = 24 m/m 381.3Development Agency legal framework and feasible policy mid 1983 Training = 22 m/m

which would promote the formation offarmers' cooperatives and train Equipment = 32,500counterparts and others

3. Consultancy for reorganizing In-depth study with a view to integra- 6 months Consultant = 6 m/m 60.0

LPMC ting LPMC to the co-operative movement 1983in order to strengthen the latter with-in as short a time as possible

4. Strengthening food security To complement activities under 1983 Expert (1) = 12 113

through assistance in food projects A2 and A4 1 yeargrain marketing, crop moni- (extension)toring and pest control(GOPS/LIR/009/NOR) 0

C. RESEARCH1. Strengthening of Applied To continue and further expand applied January Experts (6) = 144mm 1,985.7

Research at CARI research programme initiated under the 1983 Consultants = 12mmexisting three projects LIR/79/004, 3 years Training = 152mmLIR/79/006 and LIR/79/007

Equipment = 320,000

2. Farming Systems Research To strengthen rice varietal improv- January Experts (4) = 120mm 1,645.1

and Rice Development ment programme at CARI, develop 1983 Consultants = 18mm

appropriate cropping patterns and 3 years Training = 94mm

farming systems, development suitablesoil conservation and water control Equipment 250,000

practices and introduce farm tools,implements and small farm machineryfor increasing labour efficiency

rDx

Target Start EstimatedOBJECTIVES Date and External Inputs External Cost

Duration US$ '000

3. Establishment of Rice Post- To train extension workers, and to re- January Experts (2) = 46 mm 695.6harvest Development Centre duce post-production losses of rice. 1983 UNVS (2) = 48 mm

2 years Consultants = 6Fellowships(2)48 mm

Equipment = 20,000

4. Strengthening Regional To assist in establishing research sub- January Expert (1) = 36 mm 950.1Adaptive Research station for strengthening CARI's 1983 Consultants = 12 mm

capabilities for regional adaptive 3 years Training = 48 mmresearch

Equipment = 370,000

D. EXTENSION AND TRAININGSupport to RDI Rural Women's To support RDI programme for rural January Experts (2) = 72 mm 772.0Programme family improvement, particularly 1983 Consultant = 4 mm

through radio broadcasting of 3 years Training = 48 mmagricultural extension material

Equipment = 75,000

1. Coordination of Agricultural To assist the Agricultural and Indus- January Experts = 24 mm 290.0and Rural Youth Training trial Training Bureau (AITB), in de- 1983 Training = 18 mm

veloping and coordinating agricultural 2 yearsand rural youth training programmes in Equipment = 50,000Liberia

E. FORESTRY AND WITDLIFE1. Forestry Management Management control consultancy 1986 Consultants(3)=4.5mm 45.0

1.5 mm

2. Forest industries To monitor progress in forest indus- 1986 Consultants(4)=12mm 120.0tries development, consultancy 3 mm

3. Extension of silviculture To monitor silvicultural research and 1986 Consultants(3)=4.5mm 45.0operational programmes, consultancy 1.5 mm

m eU)


Duration US$ '000

4. Energy from wood:a) Pilot plant for sawmill To utilize waste from mill and forest 1982/83 Studies and equip- 1,000.0

electricity supply save foreign exchange on forest fuels ment

b) Pilot plant for commer- To utilize wood energy in remote loca- 1982/83 Studies and equip- 1,000.0cial production of lities and in general rural develop- mentelectricity ment

c) Pilot project for the es- Commercial production of iron and 1982/83 Studies and equip- 800.0tablishment of charcoal/ charcoal mentiron industry

5. Wildlife Extensiona) Rural education in wild- 1982/83 Experts (2) = 72 mm 566.6

life conservation 36 mm Equipment 60,000

F. LIVESTOCK1. Veterinary Diagonostic Consultancy to establish veterinary July Consultant = 1 mm 10.0

LaboraLory SupporL diagonostic fac(Llity 19 82

2. Livestock fodder and feeds To make available to small farmers January Expert = 24 mm 321.0improvements and distribution planting material for pastures and 1983 Consultant =1.5 mm

of fodder trees. Also animal feed Fellowships = 24 mmrations Equipment = 28,000

3. Smallstock improvement and To make improved smallstock available January Expert = 24 mmdistribution to small farmers 1983 Fellowships = 12 mm

Equipment = 28,000

G. FISHERIES1. Strengthening of Marine To enhance capabilities of the January Expert (1) = 24 mm 240.0

Fisheries Marine Fisheries Administration 1983 Training and equip-of the MOA, for advising the mentGovernment on legal and operationalaspects of Marine Fisheries

rQr .D


Duration US$ '000

2. Artisanal Fisheries To increase productivity of Kru January Experts (5) 126 mm 1,808.0

Development fisherm8n by providing better 1983 Consultants 30 mmequipment and technology 3 years plus training =

and equipment =

3. Techno-economic To evaluate fishing side of As soon as Consultants = 3 mm 30.0

evaluation of Mesurado Mesurado Group and gather possibleFishing necessary information for the Govern- 1.5 mos.

ment to make policy decision regardingits interests in the company

ON

r (D

x 6

LIBERIAAGRICULTURAL SECTOR REVIEW

Ministry of AgricultureProposed Departmental Structure

MINISTER OFAGRICULTURE

INTERNAL I

AUDITOR ISECRETARIAT

OVERALL SUPERVISION OVERALLSUPERVISIONr | ---| ----r _ _ 1LI SO

l I l I l PRINCIPAL DEPUTY i i

I i l I I MINISTER OF i I i

I iI IAGRICULTURE

I I l ~ ~ ~~I I I *I I I I iI I I ll I I l ~I I I I I I

DEPUTY MINISTER DEPUTY MINISTER DEPUTY MINISTER i

i I | DEPARTMENT OF DEPARTMENT OF DEPARTMENT OF I I

I PLANNING AND TECHNICAL REGIONAL DEVELOP- i Ii I DEVELOPMENT SERVICES MENT AND EXTENSION i i

SUPERVISION | . II r - -- - - - - r - J l l l |~I I

RUBBELOPMENT TGRICULTURAL| TA T COORDINATOR COORDINATOR

DEVELOPMENT AGRICULTURAL PARASTATAL I BUREAU OF BUREAU OFBOARD DEVELOPMENT CORPORATIONS I PERSONNEL i FINANCE AND

PROJECTS AND TRAINING I ADMINISTRATION

MONITORING

DIRECTORAGRICULTURAL

OFFICE OF ATTACHEPUBLIC AFFAIRS (ROME)

World Bank-24262


Proposed Structure of Department of Planning and Development (MOA)

DEPARTMENT OFPLANNING ANDDEVELOPMENT

COORDINATOR COORDINATOR

BUREAU OFPLANNING AND BUREAU OF

EVALUATION STATISTICS

DIRECTOR DIRECTOR DIRECTOR*

MONITORING AND ANALYSIS ANDpLANNING EVALUATION REPORTINGDIVISION DIVISION DIVISION

- PLANS, BUDGETS: -STATISTICSOFFICER STATISTICS OFFICER(S)ANALYSIS AND - MOA; PARASTATA LS;PREPARATION ADPs; SPECIAL PRO- DATA ANALYSIS,

- EXTERNAL ASSISTANCE JECTS AND PROGRAMS COLLECTION REPORTING*PLANNING, IDENTIFI- - SUPPORT INSTITUTIONS

CATION, CONTROL * INPUT SUPPLY*VISIT ADMINISTRA- *INFRASTRUCTURE

TION :CREDIT-MARKETS DEVELOP- * FARMERS' ASSOCIA-

MENT: ANALYSIS TIONSAND PLANNING

- LIAISON WITH MINIS- * LAND TENURETRY OF PLANNING * SOCIAL INSTITUTIONS

-SEMI-AUTONOMOUS - MARKETS PERFORM-AGENCIES; ANCE

*ADMINISTRATION(MEETINGS, ETC.)

&PLANNING ANDPROGRAM REVIEW

*Senior Statistics Officer World Bank-24263


Proposed Structure of Department of RegionalDevelopment and Extension (MOA)

DEPUTY MINISTERTECHN ICAL

PACKAGE - DEPARTMENT OF

COMMITTEE REGiONAL DEVELOP-MENT AND EXTENSION

DIRECTOR COORDINATOR COORDINATOR

EXTENSION BUREAU OF BUREAU OFSUPPORT REGIONAL DEVELOP- REGIONAL DEVELOP-

DIVISION MENT AND EXTENSION AND EXTENSIONI (EASTERN C 'OUNTIES) (WESTERN COUNTIES)

- FOOD CROPS* REGIONAL REGIONAL

- TREE CROPS* ARCULTURAL AGRICULTURAL

- LIVESTOCK * AGRITE TERR(TR ES

- INLAND FISHERIESt fvtices. SWrldFICER4S6-LAND DEVELOPMENT*

-RURAL YOUTHl- HOME ECONOMICS- EDITORIAL SUPPORT COUNTY COUNTY

AGRICULTURAL AGRICULTURAL

OFFICERS (4) OFFICERS (5)

_ IMOA STAFF IN MOA STAFF IN |

COUNTIES AND COUNTIES AND |

TERRITORIES TERRITORIES |

'Technical specialists functionally supervised by Department of Technical Services. World Bank-24264


Proposed Structure of Department of Regional Development and ExtensionThe County Office (MOA)

COORDINATOR

BUREAU OF REGIONALDEVELOPMENT AND

EXTENSION (2)COUNTY

DEVELOPMENT. COUNCIL

COUNTY…-1AGRICULTURAL I COUNTY

OFFICER L DEVELOPMENTCOMMITTEE

| ACAO < | ACAO | ACAO X | ACAO ACAO

CROP/ANIMAL SUPPORT MIDLEVEL DEVELOPMENT ADMINISTRATIONDISTRIBUTION INSTITUTIONS EXTENSION AND EXTENSIOND_N_TATl

l l I ~ ~ ~ ~ ~~I ,

-INVESTIGATING AND - IRRIGATED CROPS DISTRICT TERRITORIAL - TRANSPORT

MONITORING -UPLAN CROPS AGRICULTURAL AGRICULTURAL - PROCUREMENT, STORESMARKETING -TREE CROPS OFFICERS OFFICER - PERSONNEL, TRAININGINPUTS SUPPLY - LIVESTOCK -IAC,ACUT

CREDIT - INLAND FISHERtES - FINANCE, ACCOUNTSFARMER ORGANI- - LAND DEVELOPMENT - CLERICAL SUPPORTZATIONS II-SUPPORT FOR MOAZATIONS_________ _________________ISTAFF FROM OTHER

EXTENSION DEPARTMENTS| EXTENSION l l EXTENSIONOFFICERS AND OFFICERS ANDTECHNICIANS TECHNICIANS

Notes:IJ ACAO Assistant County Agricultural Officer.

2/ ACAOs of Support Institutions and Administration will be supervised technically by Planning and DevelopmentDepartment and by the Bureaux of Finance and Administration and Personnel and Training respectively.

World Bank-24265


Proposed Structure of Department of Technical Services (MOA)

MINISTER - - - - - - - RICULTURALOF AGRICULTURE RESEARCH

I j-~ - - ^ COMMITTEE

DEPUTY MINISTER _ _

NATIONAL - -_ _ TECHNICAL TECHNICAL

SEED…--------------- DEPARTMENT OF - __j COMMITTEECOMTE

COMMITTEE TECHNICALSERVICES _ (CARI) (RRIL)

PROJECT MANAGER -COORDINATOR lCOORDINATOR COORCDINATOR DIRECTOR DIRECTOR

IFAD _ _ CROPS l LIVESTOCK BUREAU OF CENTRAL RUBBER

SEED BUREAU BUREAU ~~~~~~REGULATORY AGRICULTURAL RESEARCHPROJECT BUREAU l BUREAU AND OTHER SERVICES RESEARCH INSTITUTE INSTITUTE OF LIBERIA

DIRECTOR DFECTOR I I DIRECTOR I I IE'O LJIHEL I UJ1 DDIRC IRDIR~ECTOR

j CEREAL j ANIMAL LAND PLANNING

H CROPS | MULTIPLICATION QUARANTINE AND DEVELOPMENTl DIVISION l DIVISION l DIVISION DIVISION

DIRECTOR DIRECTOR DIRECTOR [-LAND USE

TREE VETERINARY FISHERIES -SOI L SURVEY

CROPS SERVICES DIVISION |- LAND DEVELOPMENT

I

DIRECTOR - MARINE FISHERIES

TUBER *REGULATORYCROPSUBER * | STATISTICS

DVCROPS I EXTENSION

| DIVISION -| *INLAND FISHERIES

DIRECTOR

INFORMATIONDIVISION W

I ~~~~~~~~~~~~~~~World Bank-24266


Proposed Structure of Bureau of Finance and AdministrationBureau of Personnel and Training (MOA)

COORDiNATOR COORDINATOR

BUREAU OF BUREAU OF _ _ TRAINING COMMITTEEFINANCE AND PERSONNEL

ADMINISTRATION AND TRAINING

DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTORTRAINING PLANNING

PROCUREMENT GENERAL FINANCE PERSONNEL INSTRUCTION AND COORDINATI ONDIVISION SERVICES DIVISION DIVISION DIVISION DVSO

DIVISION DVSO

l iZIlilIl. l l -PROCUREMENT - MAINTENANCE - BUDGETS - RECRUITMENT -IN-HOUSE TRAINING - NEEDS INVENTORY

- STORAGE AND *BUILDING/GROUNDS - ACCOUNTS - PROMOTION *COURSE - TRAINING PROGRAMSSTORES *VEHICLES - DISBURSEMENT - TERMS OF SERVICE PREPARATION - EXTERNAL TRAINING

- CLEARING AND *EQUIPMENT -PAYROLL - RECORDS *INSTRUCTION eADMINISTRATIONFORWARDING -TRANSPORTATION -INSURANCE * RECORDS eAGENCY LIAISON

-COMMUNICATIONSWOFFICE SERVICES _a___2l

World Bank-24267

- 7 5 -

tIBEEIA

AGRICLTURAL SE CUR REV-IEW

Pacer 6

Problemis arnd Pos-ibilitiesof FPrivatiza_tion o f Marketirg

and Input Supply

- 76 -

Paper 6LIBERIA


Problems and Possibilities ofPrivatization of Marketing and Input Supply

Table of Contents

Page No.

A. Introduction ... *..***************................ ........ 77

B. Marketing and Input Supply Activities of LPMC, LPPCand LCCC o.-............. ....... ............................... 77

C. Activities with Scope for Privatization .................. . 79

D. Structure and Functions of Cooperatives ................... 82

E. Cooperative Development Agency ...... ...................... 87

F. Future Structure and Role for Cooperatives ............ 0..... 91

G. Rural Banking and Credit Services .......................... 94

H. Proposed Activities for Privatization ..... ................ 96

I. Capacity of Local Businesses .............................. 98

J. Policy Environment and Privatization ...................... 99

K. Recommended Steps Toward Privatization .................... 102

L. Conclusions and Recommendations .......................... . 104

- 77 -

Paper 6LIBERIA


PROBLEMS AND POSSIBILITIES OF PRIVATIZATION OF

MXARKETING AND INPUT SUPPLY

A. INTRODUCTION

1. Constraints and inefficiencies in marketing and input supply severelyhandicap production processes. They may forestall modernization or may de-prive the producer of incentives, perhaps more severely from irregularitiesand interruptions than from the average of conditions.

2. The scale of input supply operations and of commercialized marketingis small in traditional peasant agriculture, but must expand rapidly as moreproductive agricultural technology is adopted and output increases beyond con-sumption needs in the local area. For these and other reasons, privatizationof marketing and input supply probably offers a major opportunity to relievethe current and expected severe constraints of money and managerial capabilityin programs supporting Liberian agriculture. The public sector, includingparastatals will find it difficult indeed t;o meet the requirements of moderni-za-tio.n.

3. For the longer run, sustained agricultural development would requireopening up marketing and input supply to the private sector. Opportunities togain reasonable profits will lead at least some Liberians to invest theirmoney and very likely increase their rate of saving for such investment.Investments by Liberians are critical to potential external investors, as asymbol of Liberian confidence. Investors will readily provide managerial andtechnical skills required to operate the activities they invest in.

4. This report is devoted to the current operations of parastatal orga-nizations and of cooperatives in marketing and input supply, projectedrequirements, assessment of current systems and proposed changes. Recommen-dations are directed to improvements within the cooperative system and toshifts between parastatals, cooperatives and the private commercial and agri-business sub-sectors in their scope of operations. Potentials for expandedprivate investment and management will be emphasized.

B. MARKETING AND INPUT SUPPLY ACTIVITIES OFLPMC, LPPC and LCCC

5. The most prominent function of LPMC is as monopoly buyer and soleexporter of coffee, cocoa and palm kernel products. It has been wholly ownedby Government since 1975, operationally an independent corporation, but sub-ject to MOA and an interagency governing board for policy purposes. LPPC is

- 78 -

essentially an estate management unit for oil palm and engaged in multiplyingand distributing planting materials. LCCC operates demonstration farms andoverseas production of planting materials primarily on private farms forcoffee and cocoa. Both LPPC and LCCC are wholly owned and subordinate toLPMC. Estate management and seedling production operations of LPMC, LPPC andLCCC are described in the supporting Paper 3: Tree Crop Production. Theorganization of LPMC, LPPC, and LCCC is provided in the supporting Paper 5:The Institutional Framework.

Marketing and Processing

6. LPMC is the sole exporter of coffee, cocoa and palm kernel products.It maintains facilities for grading, export packing and warehousing prior toshipment at Voinjama, Gbarnga and Monrovia. The cooperatives and remainingprivate licensed buyers deliver their products at one of these primary pointsor at their sub-station at Ganta, Nimba Co. LPMC operates coffee hullingequipment at Voinjama and Gbarnga and it dries cocoa at Monrovia. Trucking toMonrovia is done by cooperatives or by contract haulers.

7. A recent (1982) consultants' report on LPMC provides data showing theurgent need for a larger capacity mill, and proposes need for capacity of per-haps 12 tons per hour, and with a higher extraction rate. It may be notedthat the production estimates used in arriving at this capacity estimate arebased on a yield of 3 tons of fresh fruit bunches per acre, and that this isconservative in relation to "yield profiles" provided in the supporting Paper3: Tree Crop Production. LPMC also operates a mill of 1 to 1 1/2 tons perhour capacity at Totota, Bong County.

8. LPMC also operates the only palm kernel oil mill at Monrovia. Therehas been much discussion and one known study relating to a palm oil refineryadjacent to the palm kernel oil mill. The study was by LlBPALMCO, but has notproceeded. A refinery would produce consumer-grade products for Liberia andsome export, perhaps to Nigeria.

9. The primary LPMC marketing activity in rice has been to act as agentfor Government in procuring and handling imported rice. This is a major oper-ation in a period of large and rising imports and has resulted in substantialLPMC losses under policies set by government. It also has been buying somepaddy in the producing areas, operating rice mills at Ganta, Gbarnga andVoinjama and warehousing the rice. The stored rice is resold later in theyear in the same area or shipped to other areas such as the rubber estates forsale. All sales are wholesale. Private merchants also import and distributerice on their own accounts and buy paddy in the production areas for resale.

10. LPPC operates two small palm oil mills, harvesting fruit from itsestates or buying from farmers. Most of the oil and all kernels are sold toLPMC. LPPC does sell oil locally, and policies concerning the scope of LPPCauthority to sell oil outside local areas of its production evidentally arenot established. This issue of potential marketing competition with LPMC, itsparent company is outside the scope of this report.

- 79 -

11. LCCC is not engaged in marketing products, except from the limitedproduction of its demonstration farms, which is sold to LPMC.

Input Supplies

12. The ADPs have used LPMC to handle the commodities needed from outsideLiberia, primarily fertilizer and hand tools. Transport to the counties is onleased trucks. Distribution in the counties is managed by project staff.LPMC is allowed a small margin for its service, and its function is not knownto present any issue.

13. Production systems for tree crops are detailed in the supportingPaper 3: Tree Crop Production, including the functions of LPMC, LPPC and LCCCin propagating and distributing planting materials. LPPC has primary respon-sibility for cultivating and distributing oil palm, and LCCC for coffee andcocoa excepting ADP project areas.

Extension

14. LCCC has national responsibility, with some exclusions, for coffeeand cocoa extension programs with smallholders. The excepted areas are NimbaCounty, and the project areas of Lofa and Bong Counties. LCCC operates demon-stration farms and assists individual farmers. Inside selected zones, smallestates are set up with an area of 10 acres. Farmers are provided credit inkind for fertilizer, seedlings, insecticide and sprayers, along with intensiveexplanations of how to produce. Outside the zones, group nurseries are estab-lished. Farmers are given seedlings at no charge, but less intensive produc-tion advice.

15. LPPC does similar but evidently less intensive extension work for oilpalm and coconut in connection with its nurseries.

16. LPMC has attempted to withdraw from extension activities.

C. ACTIVITIES WITH SCOPE FOR PRIVATIZATION

17. There have been substantial private investments in oil palm, coffee,cocoa, and a small amount of coconut, primarily from the mid-fifties to themid-seventies. Such investments are concentrated in small holdings but thereexist a few large oil palm estates. Data are provided in the supportingPaper 3: Tree Crop Production. Private investments in processing and market-ing have been small. Following reacquisition actions in 1980, there is morein public and parastatal hands than formerly. No significant private invest-ments have been made in oil palm for over five years.

18. Analysis of possibilities for privatization of LPMC, LPPC and LCCCmust place emphasis on the urgent financial needs of Liberia and the need forincreased managerial skills generally. It is not the subject of this reportto appraise the current operations and management of the parastatals. Otherreports and the separate analysis of LPMC, LPPC and LCCC have done that. It

- 80 -

is likely to prove difficult, however, for the parastata:Ls to obtain thecredit they need to complete and rehabilitate their plan-tings and processing,bringing them to an efficient status. This financial constraint is doublyunfortunate, since some estates and operations with substantial potentialvalues as complete "going enterprises" may have a greatly reduced value in thepresent partially completed status. A realistic approach, therefore, is thatthe GOL both seek credit and investor proposals. Operations that may offerprivatization potentials will be discussed.

Tree Crops

19. While this report is directed to marketing, processing and inputsupply and not production itself, complete production and processing agro-industrial systems may be more efficient and attractive than the two partsseparately. The recommendations on tree crops center on the concept of anucleus estate, including processing facilities, associated with smallholderproduction near the nucleus estate. Whereas this structure may be desirable,it may prove difficult to negotiate terms for a combined nucleus estate withprocessing, and therefore proposals for a separate processing enterpriseshould be considered.

20. The urgent need to provide adequate processing capacity at the Foyaoil palm estate, Lofa County, may be used as an example (see para 7). it isrecommended that GOL on behalf of LPMC solicit investor proposals on two al-ternative bases: (a) purchase of the existing plantings and facilities, to -becompleted and operated by the investor, and (b) proposals to provide process-ing facilities separately. Proposals for full ownership and for joint ven-tures may be considered. As a joint venture, the existing GOL investment inthe plantings and infrastructure should provide a major equity in a completedagro-industrial estate. These proposals may be considered at the same timethe government on behalf of LPMC seeks a loan to complete processing facili-ties itself. The time urgency will dictate choice of the loan option ifsatisfactory terms can be arranged rather promptly.

21. There is need for more and improved oil palm processing capacity atother locations. This probably is the primary visible potential for privateinvestment in the present scope of LPMC, LPPC, LCCC operations. The presentsituation and projected needs are outlined in the supporting Paper 4: TreeCrops Processing and Marketing.

22. A second potential is to build and oprate a palm oil refinery inMonrovia. Such a refinery would produce finished oil for domestic use and anyexcess could be exported, perhaps to Nigeria. While others have proposed thatthis refinery be built with financing through international developmentfinancing institutions, it is recommended that private capital also be soli-cited, either for a joint venture or full ownership. A joint venture mighIt becombined with the existing LJPMC palm kernel oil mill.

23. There are other private investment potentials related to parastataloperations in tree crops. Most of these would involve virtually establishinga new industry. One such proposal is to establish a coconut nucleus estatewith processing for export.

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24. The most comprehensive option would be complete privatization ofLPMC. Others have proposed that it eventually be converted to farmer owner-ship and operation as a cooperative system. The cooperative possibilityappears uncertain in view of the current standard of cooperative develop-ment. However, the continuation of LPMC does have important implications forthe survival and strengthening of cooperatives, efforts for which are nowunderway, since the financial viability of cooperatives is dependent on theirmarketing function done on behalf of LPMC. Complete privatization of LPMCtherefore raises complex issues at this stage. LPMC also acts as agent of GOLin importing PL480 rice, farm tools, and chemicals. Further, LPMC appears tohave a competent management team. Any potential advantages of private manage-ment of the LPMC operations do not appear sufficient at this stage to justifythe complex changes and possible risks. If the entire marketing operationsare not privatized, it follows that there are no significant opportunities forprivate investment within the scope of LPMC coffee and cocoa marketing.Coffee hulling and grading is too well integrated with the assembly and mer-chandizing function. Cocoa drying really requires only a modest capitalinvestment and also is best integrated with assembly and warehousing.

25. Rice. Substantial private activity in offshore procurement ofimported rice and purchase and milling of domestic paddy already exists.Problems will arise (as they did in 1980 arLd 1981) if the Government restoressubsidies on imported rice. Since LPMC has to buy domestically produced paddyand sell rice at fixed official prices, it runs its rice program at a loss.For a fuller discussion of the rice program of LPMC, see paras 3.36, 3.54,3.55 and 3.61 of the Main Report (Vol. 1).

26. Input Supplies. It is difficult to visualize a private sector rolein procurement and inland distribution of fertilizer up to the County level,as long as use is relatively limited (mostly under ADPs), farms are scatteredand there are long distances over which fertilizers have to be transported andfarmers have to be continuously persuaded 1o use fertilizers. The rubber in-dustry has its own private system. Competing services by private merchantsand cooperatives are proposed particularly for distribution of hand tools,especially if local production is increased.

27. It has been proposed to reassign extension activities of the para-statals to MOA and also to privatize tree crop nurseries into the hands ofspecialized growers. Plans for LCADP Phase II include the establishment ofsuch private tree crop nurseries under close supervision. It may be notedthat these proposals may entail and allow the liquidation of LCCCO It isrecommended that the parastatal agencies should be removed from extensionfunctions. Even for establishment of large-scale estates, the private sectorincluding joint ventures is likely to be more efficient and to attract addi-tional capital.

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D. STRUCTURE AND FUNCTIONS OF COOPERATIVES

Growth and National Status

28. The formal organization and registration of cooperatives in Liberiais relatively recent. While there has been a Cooperative Societies Act since1936, few specific provisions were made for attention to cooperatives untilmuch later. There were two registered cooperatives in 1936, and an officer ofthe Department of Agriculture and Commerce (DAC) held the authority ofRegistrar on a part-time basis. Both of those cooperatives presumably failed,and Registrar functions lapsed.

29. The first current cooperative was registered in 1971. By the end of1972, there were 11, by the end of 1973, 47 (31 farmers, 16 credit unions),and by the end of 1974, 62 (40 farmers, 22 credit unions). Five cooperativesin Lofa County are among the oldest, reporting registration dates from 1971 to1973.

30. The Registrar stated that there are now more than 180, including 45-50 credit unions. However, many of these are dormant. An estimated 130 areactive, and 30 "very active". Applying a higher standard of measure, a con-sultants' report in 1981 stated that only 10 were classif"ied "active andviable" with another 15 "active and potentially viable". The uncertainty andvariability of these estimates provides an initial indication of the level ofcooperative promotion and supervision to date.

31. Cooperatives in Bong, Lofa and Nimba counties have been the object ofmajor attention as part of BCADP, LCADP and NCADP. These cooperatives, ormore broadly, the plans to perform major input supply, credit, and marketingfunctions through cooperatives under these projects will be discussed in thissection.

32. Government responsibility was assigned to a Cooperative Division inMOA until a new, independent Cooperative Development Agency (CDA) was estab-lished effective July 1, 1981 1/ (putting aside the ad hoc arangements ineffect in the early 1960's). Since the former Cooperatives Division was weakand CDA is new and lacks resources, the extent of development work by ADPstaffs in Bong, Lofa, and Nimba counties overshadows the existing CooperativeDivision-CDA story. 2/ Section E addresses CDA functions and needs.

1/ Executive Order No. 10, April 7, 1981.

2/ The Jan-March 1982 BCADP Quarterly Report gives the following datasuggesting the level of PMU support of cooperative operations. The proj-ect senior cooperative officer is secretary/treasurer and the senior mar-keting officer is manager of the county-wide Tungban Cooperative Union.The following divided their duties between cooperatives development-man--agement and marketing operations: 6 deputy commercial officers, 6 seniorcommercial officers, and 38 commercial assistants. Their specific dutieswere not analyzed to determine what part should be ascribed to the coop-eratives separately.

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Cooperative Objectives

33. The Executive Order that established CDA states that cooperatives"can provide economic and social bene-fits to rural and urban Liberians" andthat "they can play a critical role ... as vehicles in the development pro-cess." This statement clearly emphasizes economic considerations, but alsorecognizes the aspect of social development; possible through cooperatives. Asbusiness institutions directly serving the production and income-getting oper-ations of farmers, they must be financially viable to survive, much less thanto serve. Their special potential economic benefits derive from the aspectsof self-determination and local management directed by the very persons whouse them and whose benefits result primarily from how well the cooperativesserves their own farm operations. The social aspect derives from the localleadership and decision-making experience involved.

34. These qualities are likely to occur only in very simple or verymature cooperatives. Guidance by a benevo lent and effective outside agencymay result in attainment of economic benefiLts alone excluding the socialdevelopment aspect noted in para 33. This approach should be regarded cum-berscme, and its assumptions so unreliable that the approach should be avoidedother than as a temporary expedient while better conditions are created. Con-tinued pursuit of the coperative objectives as outlined should be supported inLiberia on a priority basis, but making certain that plans are realistic andall necessary GOL support and supervision can be provided.

Functions and Organization 1/

35. The central function of the key cooperatives in Bong, Lofa and NimbaCounties is in the marketing of cocoa, coffee, palm kernels, and to some ex-tent rice. They act as licensed buying agents for LPMC. In Bong County, thecounty-wide Tungban Union Cooperative rather than the district cooperatives isthe licensed agent. They are required to pay established LPMC prices, receiv-ing a commission from LPMC to defray expenses. Subsequent discussion willoutline issues relating to transport allowances, grading discounts, and thesystem for paying farmers. However, it must be noted that the cooperativesare very much propped up in their marketing function by the Project ManagementUnits (PMU), by LPMC, and by the buying monopsony provided by Government inLofa County.

36. Even with the strong support of the ADP's and other agencies, thecooperatives have been unable to exercise their intended function of buyingproduce directly from farmers. Instead, private merchants continue to buymuch of the produce directly from farmers. In Lofa County, such merchantsacting as sub-agents must sell all such produce to the cooperatives which arethe only licensed buying agents. Traders buy produce in the markets of Bongand Nimba Counties as a general practice. At least in Bong County some

1/ Substantial use is made in the remainder of the discussion of coop-eratives of the following report: "Lofa Country Agricultural DevelopmentProject-Phase II. Report of the Consultants on the Working of the Coop-eratives in Project Area," 1981.

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cooperatives are working to meet the competition of private traders by sendingtheir business agents into the weekly markets to buy coffee and other pro-duce. The only systematic description of dealers and sub-dealers that wasobserved is for Nimba County. In that case, in 1978, it was said that alllicensed buying agents including cooperatives, used sub-agents, with threecooperatives using 41 sub-agents. 1/ LPMC continues to license some privatemerchants in Bong and Nimba Counties.

37. The cooperatives also are the final link to the farmer borrowers inthe agricultural credit program under the ADP's. The ACDB Branch Banks admi-nister a revolving fund for ADP loans normally extended to individual farmersthrough the cooperatives, and the cooperatives have responsibility (at leasttheoretically) in collecting repayments. The involvement is explicit in BongCounty. Each credit application is recommended for approval by the managementcommittee of the village Cooperative Service Unit (CSU), and approved by the(registered) District Cooperative. PWJ staff also approve. In Lofa and NimbaCounties, the cooperatives also approve. The quality of the cooperative'sreview and recommendation certainly is effected by the size of the cooperativeand its internal arrangements involving local contacts, particularly the oper-ational use of TCU committees. In a cooperative with a large membership dis--tributed in many villages, persons on a central committee are not likely toknow the character and farming skill of many farmers who seldom leave theirvlllages, and may rarely reach the cooperative headquarters. Staff of thePMU, as well as MOA, CDA, and ACDB in Monrovia believe the linkages of someLofa County cooperatives with the TCU's for processing loans are weak in thismanner. Tn that County, however, procedures at the Gbandi Farmers CooperativeSociety, Kolahun District, were reported systematic. Proposals prepared bythe PI1RU credit assistant go to the "Credit Committee" of the TCU, with itschairman signing the application.

38- Overall, however, in mid 1982 none of the cooperatives were believedable, independent of PY1T staff, to prepare loan applications, and the coopera-tives did not keep records on individual loans. Thus, the primary meaningful.cooperative function at present is at the TCU or CSU level. These small unitsreview the agricultural capability and personal reputationi of applicants as apart of loan processing9 and they assist in some cases in collections. Inaddition to persuasion with members, the cooperatives in Lofa County sometimeshave had their accounts debited by ACDB for loans to members who failed topay. The legal or contractual authority to do this is uncertain. Further,the policy is that until 90 percent of repayments on seasonal loans arereceived from members of a TCU, no member of the TCU may receive a loan in thenext cycle. It is evident that exceptions have been made. Thus, while thecooperatives have been involved to some extent in credit activity, it is dif-ficult to say their credit activity has been major, since they have not ini-tiated or prepared applications, nor maintained individual records. In LofaCounty, action is planned to begin transferring credit functions to the coop-eratives.

1/ Agrar-Und Hydrotechnik GMBH, "Nimba Integrated DevelopmentProgramme," Annex 8, p. 2. (Ministry of Agriculture, September 1978).

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39. The activity of these cooperatives in distributing farm inputs haslargely been limited to temporary storage on behalf of the PMU's. Beyond thestorage function, the stores of two cooperatives visited had hand tools forsale, which certainly is a category of farm input. They also had some build-ing materials, which may be a production input in some cases. Thus, somecooperatives have made a beginning in distributing inputs.

40. Organizationally, all the key cooperative except one are primarysocieties. A few are large, such as the Voinjama District Farmers CooperativeSociety, reporting over 2,600 members. The project area in Lofa Countyrecently has had ten registered cooperatives, which are proposed to be consol-idated into six, including one in the newly added LCADP Phase II projectarea. There were six such registered cooperatives in Bong County, which inturn were formed into the County-wide Tungban Union Cooperative, Ltd., in1981. Tungban may be termed a federation or union. The Commercial ServicesDivision of BCADP was staffing this union, viewing it as the nucleus foreventual takeover of PMU commercial functions. The NCADP Phase I project areareported six registered cooperatives in 1981. The total number in the threeADP areas thus is 22, which is proposed to be reduced to 18 primary societies.

41. All three counties have a system of village-level units, in all casesunregistered. They are variously termed TCU's in Lofa County, CooperativeService Units (CSU's) in Bong County, and 'sub-cooperatives" in Nimba County.They are small in all cases, said to range from 15 to perhaps 60 members. Anestimated 260 were said to exist in the LCADP project area (total member un-available), 180 in Bong County in 1981, with 5,003 members, and 209 in Nimbain June 1982 with 6,377 members. The actual linkage between local units andregistered cooperatives seems stronger in Bong than Lofa County, if interviewswith PMU staff and cooperative officials are reliable. LCADP staff in Voinjamaand CDA officers in Monrovia believe strengthening the TCU-cooperative linkagein Lofa County is vital, and work to accomplish it is planned under LCADP II.

42. Part of the large oil palm plantation at Foya, Lofa County isregarded by some as a variety of cooperative farming. Actually, it is under-stood that each farmer involved has his own plot, although boundaries are saidto be rather vague. The farmer harvests the fruit and markets it through thesmall LPMC mill. LPMC itself operates the remainder of the plantation. LPMCalso has established a set of steps for the sale of the land and trees managedby individual farmers to them through the cooperative, with the farmers payingthrough marketing deductions.

43. There is widespread practice of group productive activity termed the"kuu". In this case, workers in a village form a group, going from farm tofarm in completing an activity such as rice harvest. The group disbands untilthe next cycle and there have been no records and no money exchanged. Thesegroups do not deserve the term cooperative,, though they may have considerablesocial and even economic merit, and they are a traditional element thatsuggests willingness for the joint action aspects of systematic permanentbusiness actions in cooperatives.

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44. The current scale of input operations of cooperatives is very small.While no effort was made to secure data on the operations where observed, itprobably represents only a few hundred to one or two thousand dollars annual-ly, so far. The potential dollar volume would be substantial if cooperativesshould come to distribute much or all the fertilizer, and lesser but substan-tial amounts of chemicals, hand tools, etc. Those amounts could be assembledfrom the agricultural projects involved in the ADP's.

45. The consultants study of cooperatives (1981) estimated the value ofmost inputs in the area of Intofower Cooperative Society, Foya (not by thecooperative) (Table 1).

Table 1: VALUE OF FARM INPUTS DISTRIBUTED BY LCADPIN FOYA DISTRRICT, 1979-80 CROP YEAR

Total Actual AmountsCalculated Charged by LCADP

Input Group Cost (after subsidies)------------- US$-

Fertilizers 42,348 24,687Chemicals 4,093 4,027Tools 13,482 11,643Rice seed 6,372 6,098Coffee and Cocoa Seedlings 18,649 11,189

Total 89,944 57,644

46. The value of major agricultural products sold in Lofa County is sub-stantial, and nearly all is marketed in some sense or either by the coopera-tives. Data from LCADP files are shown in Table 2.

Table 2: SALE OF MAJOR AGRICULTURAL PRODUCTION FROM LOFA COUNTY

Crop 1976 1979 1980------------ (Us O)-----

Coffee 1,762 11,639 9,207Cocoa 742 2,297 2,985Palm Kernel 550 442 355Paddy Rice 80 145 81

Total 3,134 14,523 12,628

47. The consultants pointed out several reasons these data may not repre-sent Lofa County production, primarily due to cross-border movements of coffee

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and cocoa. Nevertheless, the data indicate the substantial scope of marketingactivity and suggest that there is a large stake in attaining a marketingsystem that is efficient and provides maximum returns to farmers.

48. In summary, cooperatives in the BCADP, LCADP and NCADP project areasare involved in some manner in marketing large amounts of products, nominallyin processing loan applications and in collections of agricultural credit tomany farmers and only slightly in distributing farm inputs. Many qualifyingstatements must be made about the substance of cooperative operations.

49. The cooperative staffing is small so far, in terms of their ownemployees. The Voinjama Area Cooperative Society probably has the largest ornear-largest staff, headed by a manager. Other administrative staff in June1982 were the treasurer, cashier, two clerks, and part-time secretary to theboard. In the operations area, there were a warehouse clerk, produce inspec-tor, five laborers, and a storekeeper for the retail store. General supportincluded three drivers, two janitors and a watchman. Each outlying sub-centerhad a produce receiver who was on commission.

50. It would require a thorough audit of duties and many arbitrary deci-sions to indicate what PMU staff members really are performing cooperativefunctions and what part of the time of each individual is devoted to this.

51. The consultants in their 1981 study of cooperatives prepared a seriesof proposed staffing plans corresponding to their recommendations. These aretoo detailed to include here, but they should be consulted in planning.

E. COOPERATIVE DEVELOPMENT AGENCY

Objectives and Functions

52. The general objective of CDA must be inferred from the statement ofcooperative objectives cited earlier. That is, CDA should work to promote asystem of cooperatives that actually provide economic and social benefits in adevelopment process.

53. CDA functions are to promote, provide education, regulate and super-vise. Regulation and supervision are provided primarily in the registrationstage by verifying that the organization meets cooperative criteria, andsubsequently through audits.

54. Functions of the former Cooperative Division, and most staff weretransferred to CDA July 1, 1981. Thus CDA has had less than a year to getorganized in its new status. CDA should be regarded, to date, largely askeleton organization with limited effectiveness. While numbers of staff areinadequate for the projected scope of cooperative programs, even more severeconstraints have been a drastic inadequacy of transport and other support forexisting staff, and minimal qualifications of most staff.

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55. CDA has organized its major functions as follows:

Office of the RegistrarDeputy Registrar for Regulation and Supervision

AuditorsFinancial inspectorsLegal Officer

Deputy Registrar for Development and-PromotionAssistant registrarCooperative union officersCredit Union officersEducation/training officerAssistant county registrarsCooperative supervisors

Assistant Registrar for administration

56. For the 1981/82 fiscal period, CDA had 13 staff members who hadsalary levels over $5,000. There were 34 other employees with salaries below$5,000, including 17 cooperative field officers, 3 cadets and 3 cooperativeaides.

57. Salaries for the CDA staff were $191,043 in the 1981/82 revised bud-get, and this was the only budgetary provision. All other support had to bedrawn from general accounts in MOA (although CDA has been removed from there),or from development project resources. The support received was reported tobe minimal.

58. The total proposed cost for 1982/83 is far higher, $883,427. Thisreflects a proposed 108 percent increase for personal services. This increaseis to provide a total of 84 staff, including 19 more at salaries over $5,000.Other proposed costs (not included at all in 1981/82) are purchase of vehiclesincluding motorbikes $129,692; general support including vehicle operation andtravel $258,106; and grants to national cooperative organizations $99,000.While increases certainly are needed; it is doubtful that these amounts areessential at one time, or even could be absorbed.

59. CPA provided data on the educational levels and specialized trainingand experience of 12 key CDA staff members. Six have at ILeast one universitydegree and two have masters' degrees. Three more have completed at least twoyears of college. All but one have completed cooprative training courses ofthree weeks to six months, primarily held overseas. They represent substan-tial experience. Nine of the twelve had been working with cooperatives atleast four years, in 1981. The education and experience of these key staff isconsidered relatively impressive, in view of general constraints of skilledmanpower. With effective supervision, adequate support, and more practicalfield experience, they should be able to provide at least much of the core ofan effective field staff. Their speciali-zed cooperative training may be mini-mal, but the evident policy of using short study programs seems the correct

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approach, especially if courses occasional:Ly can be organized in Liberia toreduce travel costs.

Performance and Constraints of Cooperatives

60. Preceding discussion has indicated the development of cooperatives onany significant scale is recent. From small scale beginnings from 1972 toabout 1975, there was suddenly a major effort starting with LCADP in 1977.With respect to the recent major organizatiLon drive, cooperatives in LofaCounty have had the principal opportunity to demonstrate benefits or defi-ciencies.

61. The consultants for cooperatives were able to complete a relativelythorough appraisal in Lofa county in 1981. Virtually all government officialsincluding the cooperative Registrar, and officers of the PMU's, gave assess-ments consistent with the 1981 statements, which are quoted in part:

"-- While crop marketing is organ:ized by so called cooperatives, theyare little more than buying agents for LPMC with virtually no farmerparticipation. If this position :Ls to be altered the entire orien-tation of the marketing function of the cooperative shall have to becompletely changed. -- Cooperatives shall have to act as agents oftheir farmer members. -- They should provide suitable storage faci-lity and arrange for processing of produce whereever required andthis take all necessary steps to secure the best price or returnavailable for the produce of their members. -- All these elements arecompletely absent in the present system of marketing by the coopera-tives".

62. Further, a related analysis of the marketing system and of LPMC hasprovided comparable interpretations, backed by specific criticisms of gradingabuses, claim of excess transport allowances, and mention of alleged embezzle-ment of funds. 1/

63. The preceding has only indicated a condition of weakness. The samesources have indicated specific abuses and distortions in addition. The majorone is considered to be rooted in the purchases of coffee, cocoa, etc. actu-ally from merchants as sub-dealers, in place of directly from producers.Reasons for this practice are widely known: the limited procurement points ofcooperatives, limited transport, lack of ready cash at the time of delivery,need of farmers for cash advances before harvest, and others. In effect, co-operatives have gained a nominal monopsony position (Lofa county) or have beensupported and assisted substantially in estabLishing marketing operations bythe designers and managers of the ADP's. For the reasons stated plus weaknessof the internal management of cooperatives, they have been unable to carry outfully the proposed direct marketing responsibilities even if they had tried.They have been forced to continue substantially to use private traders for

1/ A consultants' study entitled "Review and Recom,rmendations concerningthe agricultural crop marketing system in Liberia, and the operations ofthe Liberia Produce Marketing Corporation," 1982.

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primary purchase and assembly. The sub-agent buyers particularly in LofaCounty, knowing they can only sell to the cooperatives and not to competinglicensed buying agents, are even more difficult to monitor and may be lesscompetitive than formerly. Such a system provides many opportunities for suchsub-agent private dealers to pay low prices, mis-weigh, misgrade, and chargeexcessive (implicit) interest on money advanced. The situation provides anopportunity for officials of the cooperatives to make arrangements for a shareof the proceeds of the private dealers.

64. Finally, there have been abuses and rumors of abuse within somecooperatives, including alleged embezzlement by officers. Some actions weretaken in 1981 and early 1982 resulting in removal of officers responsible forabuses. Cooperatives also are charged with taking excessive quality discounts(and in turn they charge LPMC of excessive discounting).

65. It is helpful in choosing necessary changes of strategy and planningother actions to ask, to what extent is the setting unfavorable in terms ofsocial systems, education levels, and traditional leadership patters? Cer-tainly there are difficulties, but no informed commentary is known, statingthat the Liberian rural society and economy are hostile to cooperatives. Onthe other hand, programs of government and PIM's to promote cooperatives havebeen very hasty and not at all balanced with comparable levels of education,insurance that qualified administrative staff, auditing, and organizationalsupervision were in place. The PMU's were slow in both Lofa and Bong Countiesto give much attention to the internal working of the cooperatives and perhapsdid not believe they had responsibility to supervise cooperative operations.(Indeed, this should not have been a prime responsibility of the PMU's, ifanother body had been available, logically CDA). The former CooperativeDivision was relatively inactive, and the new, immobile, and inadequate CDAalso has been essentially ineffective, at least until a drastic auditing andproposed reorganization plan was initiated in Lofa County in May 1982.

66. The preceding criticisms have been directed primarily to Lofa County,where the ADP came first; there was little previous experience to build on;and abuses and rumors of abuse seem concentrated. The primary criticism ofBong and Nimba Countries is one of weakness and a heavy current staff input bythe PMU's. One conclusion must be that cooperative development has not yetbeen tested in realistic terms, with the targets balanced with education,internal staffing and external supervision, and with enough time under theseconditions to provide a test. Another conclusion is that the promotion andsponsorship of cooperative units as large as the district cooperatives of LofaCounty has been exceedingly ambitious. Member participaltion is unlikely, andexternal controls are complicated by the size. It shoulll be acknowledged thatthere may have been no easy and entirely satisfactorr options.

67. Certainly the efforts to provide major econonic functions through co-operatives in the ADP areas have not yielded economic or social developmentbenefits to date. Once recognizing problems that have occured, it will becomeeasier to undertake revisions that offer better results and are more securewith safeguards.

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68. Specific constraints are seen as follows:

a. Limited cooperative understanding by farmers;b. L'imited commercial sophistication of farmers;c. Limited supply of persons with mar,agerial and accounting skills;d. Scarcity of persons with specialized cooperative training and

experience(i) for government functions(ii) for cooperative management;

e. Failure to provide mobility for existing government staff; andf. Limited financial resources.

69. Such constraints are highly inter-related. Large cooperatives great-ly magnify constraints a and b. Large efforts are required in the face ofconstraints a and b, colliding rapidly with constraints c and d. Money couldrapidly solve the mobility and support constraint, and to some extent staffing(c and d). But the overall scarcity of skilled and experienced people may bealmost as severe as financial resources (f). Therefore, finance is an impor-tant but not exclusive constraint.

F. FUTURE STRUCTURE AND ROLE OF COOPERATIVES

70. The preceding appraisal is believed consistent with and is largelybased on the other recent appraisals that have been cited. The basic questionis: is there justification to continue to assign to cooperatives major func-tions involved in ADP strategy? Options include LPMC itself, commercial andcredit operations directly by PM4U staff, licensing and encouraging privatemerchants, enlarging the responsibilities of ACDB, authorizing a foreigntrading company to set up a product assembly system, etc. These will not beappraised individually. Some functions may be shared by cooperatives andprivate merchants.

71. There are at least two basic reasons to retain some form of coopera-tive action rather than dispose of them entirely. The first is that coopera-tives are considered to hold the potential for making substantial contribu-tions to economic and social development, including the incomes of members,along lines suggested in para 33. The second is that abruptly disposing ofthem after such substantial promotion and organizational activity would bemost upsetting. It would be confusing to say now that the systems for market-ing, input supply and smallholder credit should be organized entirely differ-ent. In particular, there is a distrust of private merchants (see alsopara 109). While many rural people as well as officials may criticize thecooperatives, they would find it difficult to accept that the private traderswere their only option. This returns to the first reason that the existenceof a cooperative in any situation where the private traders also are allowedis likely to increase price competition for products.

72. There are several possible models within the cooperative option. Theprimary choices are between multi-purpose and single-purpose societies (sepa-rating credit, especially from marketing), and the size of cooperatives. Many

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arguments favor something simpler and smaller than multipurpose organizationsof 1,000 to 3,000 members. The coinplexities of understanding and managingcooperatives grow geometrically with size, added functions and geographicdispension where travel is difficult. This geometric growth necessitatesadditional layers of management with increasing professional demands at toplevels, more complex accounting systems, and increased travel to providereports, coordination and supervision. There are no significant processingoperations to offer economies of scale, and bookkeeping is likely to remain byhand for some years. Probable total costs and overall viability of systems ofsmaller cooperatives have not been estimated.

73. Single-purpose cooperatives are much simpler than multi-purpose intheir management and policy making. The Board of Directors of a singlepurpose cooperative needs to consider only one activity, and faces no deci-sions about functional allocation of costs or savings, etc. The manager canbe a specialist in either produce marketing or in the management of credit,for example, and these have very different demands of skills and experience.It does not need separate department heads unless the operation is verylarge. The accounts can be simple, and need not provide for complex alloca-tions; contrasts with combinations of marketing, input distribution and creditfunctions are evident.

74. Advantages of multi-purpose cooperatives are presumed to be in therequirement for only one manager, the sharing of facilities and in directarrangements for collection of payments due when credit is involved. Theseadvantages may be substantial or slight, depending on individual situationsand the kind of management resources available concerning managers. While amulti-purpose cooperative needs only one manager, he requires greater skillsthrough training and experience. It may prove difficult to provide a few atthis level than simply more managers at a skill level sufficient for a simpleractivity. Concerning space, the needs of a small credit cooperative aremodest, and should be in separate room(s) regardless. Regarding collections,the office of a credit cooperative could be located adjacent to the warehous-ing area of a marketing cooperative and they could establish working relationsfor collections. It is difficult to say at this stage whether the balance ofsuch theoretical and practical advantages, constraints and proposed solutionslies with single-purpose or multi-purpose cooperatives in Liberia. Furtherattention to this issue by officials and advisors responsible for cooperativesis recommended.

75. In considering the various optional models for cooperative action,due account has to be taken of what is already in place and what future plansare being pursued. Although smaller cooperatives and single-purpose coopera-tives are considered generally preferable, their financial viability has to becarefully considered. The prudent approach will be to start with the existingsystem and make the bigger cooperatives viable and efficient.

76. More work is needed to estimate and defend the probable viability ofsmaller and single-purpose cooperatives. The report of the consultants pro-vides estimates for separate credit cooperatives, but some of those estimatesevidently would require revision. In particular, the analysis of productionsystems by this mission suggests that previous projections of the use of

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fertilizer, chemicals, and some other purchased inputs have been too high andthat cocoa planting should be de-emphasized. It follows from these conclu-sions that the amount of credit needed and number of farmers needing creditmay be much lower than previous projections. Thus, it is difficult to solidlyconclude at this stage that alternative cooperative models would be viable.

77. ACDB has been provided a senior, experienced specialist in ruralcredit systems; adding an experienced cooperatives advisor to the PMU staffunder LCADP Phase II is also envisaged. The need for a separate cooperativeadvisor to serve BCADP should be considered as plans for Phase II arecompleted.

78. CDA must be strengthened with highest priority attention to staffmobility. The requirements are very large in the areas of logical CDAresponsibility, either to bring the present fragile system to an adequatestandard of performance, or to establish any modified system. There is anurgent need to develop at least initial plans for CDA operations, to recon-sider the structure needed for those operations and to consider the need fortechnical advisor(s) within CDA.

79. The rate of build up of CDA's capability should be determined care-fully, considering the generally severe financial and manpower constraints.There should be a thorough study of cooperative development programs of theADP's and the promotion and education efforts in those counties should beshifted to CDA as rapidly as feasible. This may include some shifting offunds. It is recommended that the major share of CDA resources be concen-trated in the ADP areas for the next few years. Successes or further problemswith cooperatives there will influence greatly the development of cooperativesin other counties.

80. It is thus proposed to establish an intensive effort to strengthencooperatives, starting within the system that exists. The professional staffand particularly senior staff of CDA and cooperative technical advisors shouldbe charged, however, with designing and proposing whatever organizational andstrategy revisions they consider necessary to gain a sound system of coopera-tives truly serving farmers' needs. That is, the responsibilities or terms ofreference of technical advisors and senior GOL officials should encourage andnot constrain them in proposing even major changes in the cooperative system.

81. In particular, consideration should be given to the need, necessarysteps, and organizational and financial viability of single-purpose vs. multi-purpose cooperatives, and feasibility of moving toward a system of smallercooperatives than those at a District level. Such smaller cooperatives mightfor example be established around the service sub-centers built by the ADP's.For example, 64 sub-centers are planned under Lofa II. If LCADP serves 13,300farmers as projected, the average membership per small cooperative would beabout 300. A primary advantage of registered cooperatives at this level,averaging about 300 members, is that farmers in the unregistered TCU's couldmore readily perceive that they could and should direct the marketing, credit,or other activities there. The purpose of these suggestions is to indicatethe range of options and considerations available.

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82. ADP officials, the one new cooperative advisor already programmed andany additional advisors and consultants, however, should concentrate prirnarilyon implementing the current design. The purpose of the preceding paragraphsis to recognize that this design may be improved in moderate or substantialways, and to recommend that officials and advisors have the flexibility todesign and propose such changes. Any substantial design changes should ofcourse be reviewed systematically.

83. Concerning functions, the emphasis should continue to be on marketingcoffee, cocoa, and palm kernel, and on bringing cooperatives into more sub-stantive roles in smallholder credit. More direct contact with farmers isneeded in both cases. Cooperatives should seek to buy products directly frommembers, and, through the TCU's, assist members by collecting and transportingproduce to warehouses. This cannot be done immediately in all cases. Coop-eratives should seek to keep records of smallholder loans, to review loanrequests at the TCU level, and to collect scheduled payments in a businesslikemanner, particularly through deductions from marketing proceeds.

84. Cooperatives may handle inputs if they wish and should be assistedmoderately to establish and expand input supply activity, as some have began.The immediate opportunity for cooperative input distribution is with handtools and building materials.

85. With improvements in cooperative efficiency and liquidity, considera-tion should be given to license private merchants again in Lofa county autho-rized to sell coffee, cocoa and palm kernel directly to LPMC, and to continuesuch licensing in other counties. The advantages of allowing this competitionwith cooperatives are considered to exceed a possible losEs in technical effi-ciency related to diseconomies of scale. The experience of widespread prob-lems and complaints about weighing, grading, and prices actually paid in asystem of nominal cooperative monoposony strongly suggests the probable advan-tages of competition at this level Farmers who do not trust a cooperativebecause of any actual, suspected, or rumored abuses should have a marketingoption.

G. RURAL BANKING AND CREDIT SERVICES

86. Smoothly working banking and credit services are vital to developmentprogress and even to year-to-year economic stability in the rural areas. Therelatively large amount of marketing in Bong, Lofa and Nimba counties, plusthe employment, construction and associated economic activities added by theADPs make the banking and credit needs readily visible in those areas. Theseneeds are important whether economic functions are organized through theprivate sector, cooperatives, or government directly. The marketing systemclearly is crippled when there are problems in the banking system. Thefeasiblility of private or cooperative distribution of farm inputs also isweakened, perhaps less dramatically than marketing. The banking problems wereacute during the liquidity crisis of 1980-81, and are reported to continue tosome extent at the ACDB branches in 1982.

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87. ACDB branches at Voinjama, Gbarnga, and Ganta provide the primaryrural banking services in agricultural areas. Chase Manhattan has a branch atHarbel, primarily serving rubber workers and private planters. A small Citibankbranch also is at the LAMCO Mine, Yekepa, serving the mine workers. The pri-mary place for producers, salaried people, merchants, cooperatives, etc. to

cash checks and deposit savings, is at the ACDB branches. It is a severe con-straint to the marketing system when an ACDB branch cannot immediately cash acheck due to lack of currency. It is realistic to say that weaknesses in therural banking system have much to do with advantages of private traders overcooperatives. Farmers have another persuasive reason to sell their produce toprivate merchants who can offer immediate payment, though perhaps at a reducedprice. Private traders gain an immediate advantage over cooperatives when thetraders have currency but branch banks cannot immediately cash checks writtenby the cooperatives, or cooperatives do not have funds to allow them to writechecks. Also, even an occasional failure to cash checks or to redeem savingsdeposits damages severely the confidence in ACDB as a place to depositsavings.

88. The flow of funds must assure prompt, reliable banking service atACDB branches. Cooperatives as well as private merchants need a prompt, reli-able place to deposit funds, cash checks, etc. Otherwise private traders inparticular are forced to operate a de fac-;o unofficial banking system amongthemselves, and hold large sums of currency. The maintenance of a smoothlyworking banking system for deposits and check cashing seems even more crucialthan credit services.

89. The primary role of ACDB in small-holder credit under the ADP's sofar has been to hold and administer revolving accounts in each cooperative'sname. LCADP Phase II specifies additional ACDB functions, primarily tying theBank to the cooperatives through equity, oversight of credit operations,training, and participation in boards of directors. It should be emphasizedthat most credit functions for smallholders have been performed to date by PMUstaff with the assistance of some TCUs.

90. A recent analysis of ACDB (June 1982, mimeo) presents reasons whyACDB has not played a more active part. It concluded that ACDB does not havethe necessary specialized staff, the operating system, or a realistic set ofconditions to establish the smallholder credit system. This interpretation ofthe state of readiness of ACDB for its assigned smallholder credit functionspresents a problem in implementing rural credit plans in Liberia. The currentand foreseeable capability of ACDB requires the attention of managers of theADPs, including their discussion with ACDB. Significant weaknesses and ob-stacles require action to overcome them, either within ACDB or elsewhere. Aprogram through ACDB will require substantial strengthening of smallholdercredit functions of cooperatives.

91. It may be noted that the scale of the needed smallholder credit ser-vice for the next few years may be much smaller than outlined in the currentADP project descriptions. Analysis by the present mission of productionsystems shows that some previously indicated credit needs may not in fact bejustified by current agronomic-economic conditions.

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92. Credit services for larger producers, merchants and cooperativesshould be left with ACDB until or unless private commercial banks find itattractive to establish branches in rural areas. It is vital to both groupsand in general to developing the private sector that full banking service beavailable to them in their general operating area. Numerous discussions inthe towns and in Monrovia, including officers of four private commercialbanks, indicated that merchants and larger farmers are not likely to get fullcredit service in Monrovia. The commercial banks "simply do not have thefacilities and staff to provide this service on an economic basis", is aconcise paraphrase of the concensus position.

93. In summary, it is recommended that ACDB continue to provide ruralbanking services through branches in agricultural areas. In paticular, noefforts to build a smallholder credit program through ACDB must be allowed todetract from strengthening their rural banking. The six proposed cash officeson market days should be established if feasible. Commercial credit insupport of rural development is another priority function, and the mobiliza-tion of rural savings through active promotion of a deposit program. ACDBshould pursue with urgency all the management and staffing measures requiredto provide these services consistently and particularly ordinary check-cashing, and should seek whatever financial assistance is required. The PMU'smust continue to carry most responsibility for smallholder credit under theADP's until a permanent system is developed. The needed permanent system mustinclude any necessary strengthening of ACDB, unless its assignment is changed,and strengthening credit functions of cooperatives (further discusson of ACDBis in supporting Paper 5: The Institutional Framework).

H. PROPOSED ACTIVITIES FOR PRIVATIZATION

94. Progress toward privatization may come naturally and at an acceptablepace in a policy-neutral and economically attractive setting. When the paceis not acceptable, the policy setting, economic environment, and promotionmeasures must be considered. The tentative identification of proposed activi-ties will help particularly in promoting investments, and also in specificstudy of policies and the economic environment.

95. As indicated earlier in this report, many of the major and most visi-ble investment opportunities are in tree crops and forestry. Separate reportshave focussed directly on those areas, and some needs in the functional areasof LPMC, LPPC and LCCC were discussed earlier in this report. The single mosturgent need is in processing oil palm, since large plantings are coming intoproduction with only small scale processing plants ready.

96. Discussion in this report of the performance of cooperatives inmarketing recommended that private merchants be allowed to compete openly withcooperatives in all counties. In most respects this would only allow some todo more systematically and perhaps efficiently what they continue to do assub-dealers for cooperatives, where the cooperatives have nominal exclusivebuying rights for coffee and cocoa.

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97. There is little need to discuss the rubber industry here. Rubberprocessing and marketing is dominated by the several major concessions and isdiscussed in the Supporting Paper 4: Tree Crops Processing and Marketing.That discussion identifies certain needs for modernization of processing faci-lities, and potential benefits of improving the equipment and system used incollecting latex or sheet rubber from private holdings. Actions to modernizerubber collection and processing are likely to add up to be substantial in-vestments. The mission believes at least some such actions can be designedand selected that will provide ample returns. The concessions should espec-ially be encouraged to improve their facilities in ways that may allow paymentof higher prices to growers. There may be several ways to organize animproved collection system, all in private hands, or on a group or cooperativebasis. Persons interested in forestry-related potentials are referred to theSupporting Paper 2: The Forestry Sub-sector. Forestry is mainly in the handsof foreign concessions under government supsrvision. The concessions handletheir own financial and management needs.

98. Off-shore fishing was a substantial private sector activity up toApril 1980, primarily through the Mesurado Fishing Company. Specific inform-ation was not obtained on the status of plans to reactivate that fishingenterprise, or the need and opportunity for additional investors. Almost cer-tainly the industry should be operated in the private sector, in any event.

99. Broiler and egg production have been private operations. There havebeen a series of dislocations and misfortunes in broiler production sinceApril 1980, seriously damaging the financial condition of at least some indus-try representatives who report that some batching eggs were delayed undercurfew conditions, reducing seriously the batching rate. Breeding chickenswere stolen. Officials assessed payments for clearance and for movement alongroads, etc. Feed was short at times. Finally, there was uncertainty aboutpolicies toward import of dressed broilers and other meats. Information onthis industry suggests that the most urgent need is a solid decision by GOLabout policies toward import of dressed broilers and other meats. If suchpolicies are favorable to Liberian production, industry representatives saythere is need for credit and moderate new investments in operating capital toget existing growers back in efficient operation.

100. The National Investment Commission (NIC) has been coordinating consi-deration of a major proposed new broiler operation with Brazilian bankinginterests as the primary investors. Issues have arisen, however, relating towhether this proposal would have damaging or beneficial effects on existingproducers and the availability of capital from GOL or private Liberians tofinance its proposed Liberian equity.

101. Officers of the Liberian Bank for Development and Investment (LBDI)suggested several additional potentials:

Pig production and marketingComment: success requires substantial management skill.

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Fresh vegetablesComment: potential returns are high, but this requires superiorfarmers willing to provide constant attention.

Citrus production and processingComment: a U.S. major firm reviewed this potential severalyears ago. No action has been taken, and the conclusions of thefirm's review are unknown.

Cane production and gin productionComment: Some production exists, and this is consideredsuitable for relatively small scale operations, preferably withassistance and supervision to improve quality.

102. There should be serious analysis of cassava production and associatedprocessing for food use in Monrovia or for industrial export. Other reportshave discussed the potential for increased consumption in Liberia. Either thewhole tubers might be shipped to Monrovia, or they could be processed intogari in the country, providing a product that is cheaper to transport, can bestored, and is easier to prepare. The recent development of higher yieldingcassava varieties suggests new analysis of production and marketing, includingexports prospects.

103. The development of blacksmithing, and particularly production of handtools, might be expanded in rural Liberia. Light hoes and knives are producednow. NIC is believed to have the authority to provide some technical assis-tance and the authority to make loans. It should not be necessary to importmost hand tools from abroad, or even bring them from Monrovia.

104. The items mentioned in the preceding paragraphs may primarily suggestthe range of possibilities and the informed impressions of selected Liberiansand some mission members. It is not known that the technical and economicfeasibility of each has been analysed and that existing analyses are up todate.

I. CAPACITY OF LOCAL BUSINESSES

105. Monrovia appears well serviced with trading firms for all categoriesof merchandise from consumer items to heavy equipment and building materials.It is reported that nearly all the larger firms have at least some non-Liberian ownership and management. There has been no attempt to gather anappraisal of their management capability or financial strength. It may bepresumed that at least some are very able and could undertake new opera-tions. The exprience in Liberia with manufacturing and even processing agri-cultural products is relatively limited. Many activities will require someexpatriate managers and skilled technicians initially.

106. Financial constraints may be more severe than managerial at pre-sent. There is likely, however, to be some funds available among privateindividuals in Monrovia, for a well managed and well planned enterprise.

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107. Merchants in such towns as Voinjama, Foya, Kolahun, and Gbarnga stocka wide variety of goods. Selected stores vwere specifically observed todetermine any hand tools or other inputs they sold. The number with tools andbuilding materials appears ample. Interviews suggested that at least some ofthese larger merchants are amply imaginative and interested in adding newthings in their stores. Some volunteered comments about visiting villages toobserve the needs, and about receiving requests for merchandise and thensearching for a supply. Only a few seemed puzzled by the idea of entering newlines. These observations and interviews suggest there is adequate managerialcapacity to serve the needs of the farmers in most foreseeable ways.

108. These merchants were less certain of their financial capacity toexpand or to obtain credit. None believed they could borrow from banks inMonrovia, and they looked on ACDB branches with some skepticism as a potentialsource of credit. It is concluded that the primary sources of credit atpresent are not institutional but relatives, friends, and suppliers of goods"on account".

109. It may be noted that fully half of the larger shops observed weremanaged by persons presumed to be Lebanese, and others by persons said to beMandingo. Local Liberians are believed to be primarily in the smaller shops.There is a strong policy preference to encourage Liberian businessmen and atleast some feeling against the Lebanese and even Mandingo merchants fromGuinea and Sierra Leone. These conditions may pose a psychological and policyconstraint.

J. POLICY ENVIRONMENT AND PRIVATIZATION

Policies

110. Liberia traditionally has been reLatively "open" to private initia-tives and operations. Greater emphasis on the public sector starting in themid-seventies, however, and a general atmosphere discouraging to privatesector operations are believed to be some of the major reasons why there hasbeen little new foreign investment since 1977.

111. It may be noted initially that some fundamental conditions affectingthe private sector have contined favorablet freely exchangeable money due touse of the US dollar, relatively low tariffs, moderate inflation rates and theselective rather than pervasive use of price controls. The existing privatesector, and potential investors in many other developing countries mightgladly exchange some of the constraints considered to exist in Liberia, forsome of the favorable conditions.

112. Mission efforts to understand wha-t things changed or are believed tohave changed in the mid-seventies may help to understand the present psycho-logy of caution. The change may have been more in an increase of bureaucraticprocesses, delays, and inconsistencies than in explicit changes of policy.Various people said there was an increase of bureaucratic interventions, and agradual building up of interference in normal operations. It is alleged there

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was a breakdown in coordination among nolicies, and that individual viewpointsrose in promi-nence. It may be noted that many or most steps involved increating such conditions may have been well intentioned, but the overallprocess was damaging as a result of inadequacies in policy coordination andbureaucratic implementation.

113. It often requires a degree of understanding among government offi-cials of the functioning of an industry to devise and implement consistent andvalid policies. One interpretation on this topic is that there are officialswho understand the requirements of industries the govermnent has itself beeninvolved in, such as oil palm and cocoa, but few or none who understandothers, such as broiler production.

114. It is beyond the scope of the report to recommend a particular policyframeworkc Adverse reactions to changes starting several years ago have beennoted. The need for consistency and continuity is re-emphasized. Coordina-tion toward these ends is difficult in all large administrative systems (bu-reaucracies). The first requirement is an attempt to formulate and publicizea sat of policies. The second is to make clear as a par^t of such policieswhat official is the chief economic spokesman, and who can resolve differ-ences. Decentralization is desirable, but there should be a point of appealwrhen differences occur. This is certain to assist in coordination and toreduce delays in reaching firm decisions.

115. These conditions are quite important in relation to the prospect ofadditional investments in the -rivate sector. In terms of economic analysis,a rational economic investor attempts to maximize his profits including a"normal" return and a "risk premium" on capital. The risk premium may becomevery high under conditions of uncertain policy, and become quite adverse toinvestment. The preceding paragraphs and those that follow, concerninginvestor psychology suggest that businessmen may apply a very high riskpremium in making investment decisions in Liberia. Actions to reduce the-premium applied will be highly beneficial.

Psycholog;y

116. 'The preceding paragraphs have suggested a general deterioration inbusiness psychology in recent years. This condition preceded 1980, but pre-sumably was accentuated sharply by the political disturbances of April 1980from which there is believed to be some recovery.

117. The concensus of persons interviewed is that an attitude of consider-able caution prevails which can be expressed as a "wait and see" attitude ofboth Liberian ad potential foreign investors. The degree of caution seemsgreater, however, than this expression suggests.

118. Several people said that the businessmen in general need more confi-dence in the economic and political structure. It is reported that someLiberians have decided to keep a low profile for the present. There is no wayfor this analysis to deal with this t5opic other than to report that it existsand is an element in business caution.

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119. GOL should recognize the value of abolishing as soon as it is feas-ible any activities that may perpetuate investment conservatism. A declara-tion that there will be no further re-acquisitions might improve investorpsychology.

120. The liquidity crisis of 1980-81 stimulated or extended a distrust ofcommercial banks. It is believed merchants and farmers hold substantialamounts of money, hoarding it "in the groumnd". Any such lack of confidence inthe banks damages the prospect of private sector operations.

Economic Climate

121. Wage rates are a major consideration in private sector operations ormore particularly the unit costs of labor which result from productivitydivided by wage rates. Analysts of the rubber industry and oil palm produc-tion report that unit costs in Liberia are higher than in some competingcountries. In addition to direct wages, social services to workers, theirdependents and the nearby community are reported to be costly.

122. There continues to be a shortage of skilled manpower. A long processincluding temporary use of expatriates, costly training and supervised exper-ience is required to build skill in many new operations.

123. Finally, the current business recession in the US and much of WesternEurope has reduced business opportunities, especially those involving exports.The recession further reduces the internal savings of companies which might beinvested.

124. Bankers and businessmen who have experienced losses in recent yearsare likely to be cautious in making investments, especially when they havebeen able for many months to get very high interest rates on savings. Thisopportunity especially in the US, must be combined with the assortment ofuncertain or unfavorable policy and psychological factors discussed above.The conclusion must be less than optimistic until there is a favorable changein some of these factors.

Foreign Investment Prospects

125. Views were solicited on what countries might have interest in invest-ment in Liberia. There was no effort to confirm or examine the depth of suchinterest. It is worth noting again the view that "foreign capital will followif Liberians invest".

126. Concerning oil palm, the European Development Bank, French CaisseCentrale and Indian interests were mentioned. The United Kingdom and Germanywere suggested as probable investment sources for timber. A Brazilian bankhas developed a broiler production proposal as was discussed.

127. In more general discussion of investment sources, France, Germany andSouth Korea were suggested. It is probable finally that US investors will bevery active in investments in Liberia, a country with long and close economicties.

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K. RECOMMENDED STEPS TOWARD PRIVATIZATION

Policy Analysis and Adjustment

128. The initial need is that senior government officials consider care-fully the need for a vigorous, growing private sector and changes in policiesneeded to encourage the private sector.

129. It is noted that the Government has reaffirmed an open door policyregarding foreign investments. There is a view that a more detailed statementof policies is needed, backed up by some specific actions of decision makersto establish the credibility of an open door policy.

130. Detailed economic interventions such as price control and managementof public and parastatal economic operations require a lot of scarce mangerialand technical manpower. GOL should seek to minimize these roles. Policies toencourage competitive practices in the initial buying and assembly of coffeeand cocoa are likely to produce better results than artificial and unrealisticefforts to establish a monopoly cooperative buying system.. Surveillance ofprices actually received by farmers is an important government activity.

'131. Government needs to establish clear policies about parastatals. Marnyactivities should be sold to private sector operators as soon as reasonableterms can be obtained, in order to reduce the financial and managerial burdensof government. Policies regarding foreign investment may include provisionsencouraging Liberian private investments. Government should assure that anynew tree crop estates and existing ones work with smallholders with respect toimproved technology, input supply, provision of processing facilities andmarketing. These actions will help to assure that the nucleus estate conceptis real and benefits Liberians.

132. Wage policies require attention. Current and potential investorscannot pay wages or pay for social services at a total cost that is out ofline with labor productivity and the output prices they can receive. Labormanagement relations is a related psychological factor in addition to the costeffects of labor relations.

Strengthening of LBDI and NIC

I133. These public and semi-public organizations play key roles in arrang-ing financing and in completing studies and proposals necessary for manyinvestments. The Small and Medium Business Program of NIC also has authorityand some funds for management training of small and medium scale business.The Investment Promotion Department of NIC encourages and coordinates pro-posals for foreign investments. The Department also considers what policyconcessions a proposal may require, such as duty free privileges or a taxholiday. These are significant functions in promoting and executing viablearrangements for foreign investments.

134. The NIC programs are relatively new while LBDI is well established.NIC, as a direct arm of government, is in a most important position especially

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concerning an opportunity for policy coordination. I-ts programs should behelped to maturity, strengthened as possible and continued.

135- This report has identified many potential areas for private sectorinvestment and operation and proposed their further analysis. The moreimportant point may now be made that a systematic process of identifyinginvestment proposals should be established. Both LBDI and NIC are in a goodposition to establish such lists of potentials. They also should proceed withprefeasibility studies of proposals they may select. The establishment andsupport of such processes is much more important than any single list oroutline such as in this report.

Meeting Banking Needs

136. The Liberian banking system is understood to perform adequately inits serving of businesses and investors in Monrovia, except when the countrymay be affected by a general liquidity crisis such as since 1980. The bankingservice in the towns is minimal, however, and has been seen to handicap manyroutine activities. It certainly has not been able to establish a quality andvigor of service encouraging to private se.ctor development in rural areas.Recent analyses of ACDB have shown why their activities have been constrained.ACDB now is making plans to expand its system of branches and to establishseveral part-time cash offices. ACDB officials, their advisors and officialsof the private commercial banks state, howrever, that there may be only a fewplaces that will support a branch Bank at this time.

137. The point is to note again the priority of having at least minimumand serviceable commercial banking services as part of encouraging privatesector operations. The key services are commercial deposits, check cashing,saving deposit (expanding local funds for business and consumer loans) andprocessing of loans. Officers of private commercial banks in Monrovia areforthright in stating it is difficult for them to process and monitor loansfor rural operations. There might be a goal, however, for ACDB to establishthe extent and quality of its branch bank'ing service so that it could processsome loans and discount them to process and monitor loans for rural opera-tions. There might be a goal, however, for ACDB to establish the extent andquality of its branch banking service so that it could process some loans anddiscount them at the private commercial banks.

Multilateral Agricultural Investment Consultative Committee

138. A deliberate and effective program to expand foreign investments inagriculture in Liberia requires faller cormmunications between potential for-eign investors, GOL, and the Liberian private sector. The establishment of amultilateral agricultural investment consultative committee is recommended.Membership should include foreign private agribusiness representatives,representatives of selected foreign goverinments, GOL, Liberian operators oflarge-scale agribusinesses and enterprises and probably commercial banks inMonrovia.

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139. The deliberations of such a committee would concentrate on:

(a) Identification of investment opportunities:(i) Assembly of suggestions;(ii) Initiation of pre-feasibility studies; and(iii) Dissemination of findings.

(b) Consideration of policy issues:(i) Internal Liberian policies;(ii) Taxes, duties, and repatriation of profits and investments;(iii) External barriers to Liberian products; and(iv) Free trade zone.

(c) Identification of financial resources.

140. Much discussion of such topics occurs routinely in internationalcommerce, finance and the economic aspects of diplomacy. Most such discus-sions are believed, however, to be somewhat piecemeal concentrating on oneindustry or enterprise, a few policies and one firm and country at a time.The proposed committee would serve to coordinate the consideration of indus-tries, countries and policies. Established at a high level, its findings andrecommendations should command the attention of the Government and foreigngovernments and of significant potential investors.

141. The proposed committee would provide an organized forum to exploreinvestment opportunities and the associated economic and policy issues. Itwould help to prepare and coordinate policies that are consistent and mutuallyfavorable to Liberia and foreign investors. It is understood that the Invest-ment Promotion Department of N1C has the authority for many such activitieswithin GOL. The proposed committee should serve to further emphasize andraise the effectiveness of such activity. The proposed committee might beattached administratively to NIC, at a higher level of GOL, or to LBDI.

L. CONCLUSIONS AND RECOMMENDATIONS

Conclusions

142. This report started from the premise that Liberia faces a severefinancial constraint and a general managerial constraint in the operation ofall governmental and parastatal operations. These conditions cannot rapidlybe solved within the public and parastatal sector. The private sector,Liberian and external, offers additional financial and manELgerial resources,probably very major in potential extent.

143. Performance of the major parastatal organizations involved in agri-cultural development (excepting rubber) was called into question as part ofthe marketing and input supply system. A separate but associated analysis ofLPMC, LPPC, and LCC concluded that the LPMC management team is relativelyeffective. It serves key roles in the marketing of the principal crops ofcoffee, cocoa, palm kernels, and to some extent rice.

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144. LPPC and LCCC operations present another story. Major parts of theiroperations have made slow progress and have experienced high costs. Reassign-ment of substantial activities directly to MOA, the ADPs, or to the privatesector is recommended.

145. The assembly and purchase of coffee, cocoa, palm kernels, and paddyrice, and the handling of smallholder credit through the district cooperativespresents a distressing picture. Their poor performance and frail condition isconsidered to be a truly urgent and major constraint in ordinary agricultualoperations and the satisfactory execution of the ADP strategy. Actions areneeded that will provide major improvements with some certainty.

146. The severely limited rural banking system and frequent cash shortagesat ACDB branches have been a further and supplementary constraint to a smooth-ly fmnctioning marketing system, leave alone a vigorous growth in the privatesector in rural areas.

147. While Liberia has traditionally been relatively "open" to privateinitiatives, there was a broad change in the policy environment starting inthe mid-seventies. There has been no new foreign investment since 1977.While GOL continues to assert that it wants foreign private investment, apsychology of caution and uncertainty prevails. The current recession inindustrial countries, and some adverse economic conditions in Liberia furtherconstrain investments. The response of investors may be slow and well-organized actions by GOL are required.

148. A somewhat general slowdown in the Liberian economy, banking andfiscal problems in 1980-81 and unsettling effects of the change of governmentin 1980 have resulted in a psychology of caution in considering investments.Changes in policy and administration of programs starting in the mid-seventiescontribute to this cautious attitude. Some fundamental conditions affectingthe private sector have continued favorable such as moderate inflation ratesand selective use of price controls.

149. In a relatively smoothly functioning and well-financed economy, thepresumption might be to assure that foreign investments would benefit sub-stantially the economy of the recipient ccuntry. Considering the financialand managerial constraints of Liberia, a more receptive posture toward invest-ments is proposed. Investments should be welcomed and encouraged on termsthat are at least neutral to the Liberian interests directly affected (work-ers, other investors, consumers). The private investments and associatedmanagement should release other capital, potential capital, and managers inLiberia for other priority applications, broadly relieving the capital andmanagement constraints. This is part of what is meant by saying that sus-tained agricultural development will require opening up marketing, inputsupply and other activities to the private sector. The public sector in-cluding parastatals alone will find it difficult indeed to meet the require-ments of modernization.

150. Finally, a sense of urgency is appropriate. Performance of thecooperative marketing system for coffee, cocoa and palm kernels urgently needsimprovement. Banking problems such as the 1980-81 cash shortages at ACDB

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branches must be avoided and cooperatives must have funds to pay promptly forproduce received. GOL should cLarify its policies and press actions to en-courage private investments. Delay in actions on such topics is likely tomake matters worse and solutions more difficult.

Major Recommendations

151. Parastatal Corporations. GOL should sinultaneously seek investorproposals in some portions of LPMC, LPPC and LCCC operations. Priorityattention should be given to the need for oil palm processing facilities(paras 18-21). The proposed palm oil refinery might also be a private sectorinvestment (para. 22). Sale into private hands should be considered for allmajor IPMC and LPPC oil palm plantings, along with responsibility to completeprocessing facilities (para. 19). Private proposals also should be solicitedto develop a coconut nucleus estate, with processing for export (para. 23).

152. Extension activities should be reassigned from the parastatals to MOAand the ADPs and tree crop nurseries should be handed over to specializedprivate growers (para. 27).

Cooperatives

153. Considering the present and anticipated continued limitations of co-operatives, private merchants should be licensed in all counties, operating incompetition with cooperative. Emphasis in cooperative development should begreatly increased at the TCU (or CSU) level. The mission considered theprobable advantages and disadvantages of alternative cooperative models, par-ticularly smaller cooperatives, and single-purpose vs multi-purpose ones. Themission recommends that efforts (at least immediately) be concentrated on thesystem that exists. The senior staff of CDA, the PMU's and cooperatives andcredit technical advisors should, however, be authorized and expected todesign and propose whatever organizational and strategy revisions they consi-der necessary to gain a sound system of cooperatives serving farmers' needs(paras 74-82).

154. Cooperative functions should continue to emphasize marketing coffee,cocoa and palm kernels, and also on bringing cooperatives into more sub-stantive roles in smallholder credit. Cooperatives should seek to buyproducts directly from members, and, through the TCUs, assist in collectionand transportation (para. 83).

155. There should not be a hurried attempt to build a comprehensive co-operative system for farm inputs. The PMUs, LPMC and the private sector canserve while cooperatives add this operation on a basis of natural growth(para. 84).

156. All foreseeable models of cooperative development require the streng-thening of CDA on an urgent basis, with highest priority of all to staffmobility. Educational and supervisory responsibilities should be shifted asrapidly as possible from the ADPs to CDA (paras 78-79).

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157. The urgency of strengthening the operations and organization of coop-eratives calls for consideration of further needs for advisors, particularlywithin CDA and WADE Phase II (paras. 77-78).

Credit,Banking

1 58. There are substantial limitations in the capacity of ACDB to carryout the smallholder credit functions assigned to it, particularly those in-cluided in the design of LCADP Phase II. The PMU managers are urged to reviewthis issue and any needs with ACDB (para 90).

159. The financial and staff needs of ACDB must be met, as ACDB is theonly visible basis for essential banking services in rural areas (paras 92-93,136-137).

Investments, Privatization

160. In addition to tree crops opportunities other areas of potential pri-vate investment are identified for further consideration, including: rubbercollection, off-shore fishing, broiler and egg production, pig production andmarketing, vegetables, citrus production and processing, cane-gin production,cassava production and processing for food use or export and production ofhand tools (paras 97-103).

161. The central requirements concerning policies affecting privatizationis their consistency, continuity and coordination. There is need for moredetailed public statement of policies, and clear designation of responsibi-lities including what official is the chief economic spokesman of GOL (paras112-114, 128-132).

162. LBDI and NIC have vital responsibi-lities in the advancement of pri-vate sector operations and should be strengthened (paras 133-134). Whileideas were collected on private sector investment opportunities, a greaterneed is for a systematic process of identifying such proposals, the executionof selected prefeasibility studies and publicity concerning favorable findings(para 135).

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