REST F,IC T1D~.f.

Report No. SAM: Ap-i1

Thi Rdot- hmben prepared forASIAN DEVELOPMENT BANK IZ ive of the Eak.

APPRAISAL

OFTHE

AGRICULTURAL DEVELOPMENT PROJECT

IN

WESTERN SAMOA

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OCTOBER 1980 AL

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CURMNCGY EQZJIVALENTSWasUof 30 usie 1980)

GCarrency.-Unit Western Samoa Tala (WS$) i

WS$ l O0 - US$1. 1060

US$1. 00 WS$,. , 4(a) Since 27 October 1975 the WS$ exchange rate has been determined

daily on the basis of the weighted basket of currencies used byNew *Zealand. The Western Samoa Tala was devalued by 15 percent an 20 June 1979.

(b) For -purpose of calculations in the Appratisal Report, a rate of

US$1 00 a WS$0. 9139 has been used.

WEIGHTS AND MEASURES

.1 acre * 0.405 hectares

1gallon 4. 546 litres

1 mile X 1.609 kilometres,

1 pound 0.454 kilograms

1 ton (2240 lbs.) . 1008 kilograms

1. board foot 1 piece of timber 12 inches by12 inches by 1 inch

NOTES

-i) Throughout this report "1$"1 refers to U.S. Dollar.

(it) The Fiscal Year for the Government and WSTEC begins on

I January.

ABBREVIATIONS

ADAB - Australian Development Assistance Bureau

DBWS - Development Bank of Western Samoa

DOA - Department of Agriculture and Forests

FAO - Food and Agriculture Organization of theUnited Nations

-A- International Development Association

PFL - Pacific Forum Line

PW-D - Public Works Department

SPDC - Special Projects Development Corporation

SPDMIC - South Pacific Developing Member Country

UNDP - United Nations Development Program

USAID - United States Agency for InternationalDev,4lopment

USP - UMAversity of the South Pacific

WSTEC - Western Samoa Trust Estates Corporation

PROJECT FOCUS, DESIGN AND RATIONALE.

Agriculture is the mainstay of the econory and comprisestwo distinct subsectors: the smallholder and commercial. Theprimary gal of national policy is to increase agricultural productionboth for domestic consumption and export. The purpose of theProject is to assist the Government in its efforts to increase agri-cultural production through a more efficient utiliz-ation of the country'sresources, and to provide increased income and employment oppor-tunities in the rural sector. The Project is designed to help theachievement of these objectives in both agricultural subsectors throughthe provision of agricultural inputs, infrastructure development andinstitution building.

2. . The Project ints will include assistance to WSTEC, thelargest commercial organization: to replant 1,000 acres of senilecoconuts and plant 1 000 acres of cocoa under coconuts; fertilizeexisting cocoa and coconut; provide infrastructure facilities such asroads, fences, transport, storage sheds, drinking water, . livestockequipment and pasture improvement for cattle; expand existing soapprocessing facilities; replace coffee processing facilities; improveand expand coconut stem utilization facilities; and provide consultants'services for institution building and project implementation. Thesmallholder subsector will benefit from the Project through inputs to.DOA which is wholly responsible for research and extension for thissubsector, for improving its applied research capabilities and extensionservice at the field level. The Project will provide DOA with researchfacilities in the major agroecological regions; a national AgriculturalExtension Center for in-service training; construction of 21 fieldextension centers and improvem'ent to two others; provision of trans-port facilities; consultants' services for strengthening staff capacity;and provision of training fellowships for Samoans in agriculturalresearch and extension. The total cost of the Project is $10.8 millionof which the foreign exchange cost is $7. 0 million and the Bank' scontribution $3. 0 million.

3. The incremental project outputs at full development on anannual basis are estimated at 1,100 tons of cocoa valued at $2.9million; 1,400 tons of copra valued at $611, 000; 500 tons of laundrysoap valued at $588, 000; 400 tons of toilet soap valued at $1, 310, 000;400 tons of soap powder valued at $1.9 million; ,Z5O0, 000 board ft ofexportable grade timber; 430,000 board ft of .&nce post rmaterials;90-120 tons of fuelwood and 30-50 tons of charcoal from coconutster utilization facilities valued at $170, 000; and beef production of

68 tons valu`d at $60, 000. The total incremental annual value ofthe WSTEC component at full development is estimated at $7. 5 million.The output from the smallholder subsector due to the AgriculturalResear.h and Extetision component, though not easily quantifiable,can be expected to be siubstantial, given the present low productivityin the agricultural sector. With regard to the assumgtions of theProject, besidles the standard provisions and requirements containedin the loan agreements of the Bank, specific assurances were obtainedfrorn the. Government (para. 134, Pages 41-42) to ensure the successfulimplementation of the Project: organization of executing agencies;expeditioous dlearance, of imported goods for the Project; positionclassification of the extension service; appointments to vacancies intechnical positions at DOA; and continuation of the Project after theinvestment period. The achievements and progress of the Projectwill be monitored through the Bank's operational activities such asreview missions, and also the project benefit monitoring envisagedunder the Project.

4. The major economic risk associated with the Projectrelates to th4 World market prices for cocoa and coconuts which arethe major outputs of the Project. This risk, however, has beenminimized by interplanting cocoa with coconuts which are subject todifferent market conditions. An institutional risk associated with theAg.ricultural Research and Extension Component is the capacity ofDOA to attract and retain suitable staff for the implementation of thePr,oject.

TABLE OF CONTENTS

Page

MAP1 (ii)

MAP2 (iii)

I. INTRODUCTION 1

II. BACKGROUND 3

A. General 3

B. The Agricultural Sector 3C. Agricultural Products 4

D. Western Samoa Trust Estates Corporation 6

E. Agricultural Support Services 8F. External Assistance to the Agricultural Sector 13

III. THE PROJECT 17

A. Objectives and Scope 17

B. Project Components 17

C. Details of Project Components 19

D. Project Costs 26E. Financing Plan 28F. Relending Arrangements with WSTEC 29

G. Environmental Impact 30

IV. PROJECT MANAGEMENT AND IMPLEMENTATION 31

A. Executing Agencies 31B. Implementation Schedule 32

C. Procurement 32D. Consultants 34E. Accounts and Audit Reports 34F. Project Benefit Monitoring System 34

V. PROJECT BENEFITS AND JUSTIFICATION 36

A. Benefits to the National Economy 36B. Benefits to WSTEC 39C. Social Impact of the Project 40

VI. CONCLUSIONS AND RECOMMENDATIONS 41

APPENDIXES 43

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* ; t72LOOFWMAP OF WESTERN SAMOA

SAVAN'I ISLAND-Farmalo

Satotu SOUTH FACIFIC OCEAN

FaloWup -f0009 ea'l

Mt. Silisili

SCAL-E

- -, Mt. Mafne) S 5 5 10 5 2 0 Miles _|

( Tuasivi

Palauli 1119

UPOLU ISLAND

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L L. .1' r->>vs. 2 g--Alafua (USP)-

: .w : .. t + - ; i¢LlWA. ,, PIA

- ' ' - ~R oa ds ,<

!4 FerrybLp

-i .WSTEC Estates S aXUteLBe y\-

Falutasi It SigaeleEtQ

[,3 Government Land NUULUA L

- Freehold Land .

Govrnment Land; ' * , , . ' .- 'L'A

FreodLn

172'00'M1.r' '

WESTERN SAMOA:'AGRICULTURAL DEVELoPMENT PROJECT:

Location of Project ActivitiesWSTEC Component

FAILEATA

CASALA- COCONUT STEM UTILISATIoN

TUANA IMATO> V

FUGALEI.APIA FACTORY 3ILES

- L-TAFAIGATA 4000 H000

METER

VAI PAPA

TAUSAG I

,4O' , S4A -D

- ~~~WSTECII1ESTATES ,.|

- WSTEC I ESTATES .-

17*;0'N . '

' 17z00'N.: ' 0' - ' 0 ' -' i ) 2 ' ' ' -~ -.. y' ; ''' *'

Io .1NTR22OgDU

A fonolbility o u y carried ovt in 1977 by FAO under a Banktechnical gazzitanc- grant- examined the rehabilitation of Western SamoaTrust Jsmtates Corporration' s (WSTEC) 14 estates on Upolu Island in Western3amoa. rollowing the receipt of the report, the Government of Western

r!noa. and the Bank agreed that a phased rehabilitation of the estates would'e more prudent and would not excessively tax the implefntenting capacityof WSTEC. In December 1977 the Bank approved a loanEL of $3. 0 millionto Western Samoa for the rehabilitation of six WSTEC estates on UpoluIsland.

2. In early 1979 the Government requested technical assistanceto formulate a project for a second loan to WSTEC tp rehabilitate the othereight eatates. This was approved in October 19793 -and three consultantswere fielded in November 1979 to update certain aspects of the originalfeasibility study and to examine product processing in detail. In addition;in response to a request from the Government, the Bank provided twoconanlotSs from the International Agricultural Development Service(IADXJ3Y-to examine the National Agricultural Research and ExtensionServices and to make recommendations for their improvement. A ProjectFormulation Mission dircussed the consultants' reports with the Governmentin November/December 1979 and these discussions led to an agreementabout the scope of the Project discussed in ihs report.

3. An Appraisal Mission visited Western Samoa from 23 April to13 May 1980 to appraise an Agricultural Development Project which wasto comprise the rehabilitation of the other eight WSTEC E,(ftates and thestreagthening of the Department of Agriculture and Forests' (DOA)Agricultural Research and Extension Services. The Mission comprisedM. D. Bauche (Mission Chief), R. W. Arnison (Agronomist), N.Amerasinghe (Project Economist), 0. Gendrano (Forestry Specialist) andR. Keswani (Senior Counsel). This report is based on the original FAOfeasibility study, the consultants' reports, findings of the Project Formulation

i/ T. A. No. 189: Agricultural Development Project.

~/ Lo,an No. 338-SAM(SF): WSTEC Agricultural Development Project.

#/ T. A. No. 308/79: WSTEC Agricultural Development Project II.

f/ IADS was commissioned by the Bank in March/April 1979 to conductthis study.

Mission, field visits, and discussions the Appraisal Mission had withofficials of the Government and the executing agencies.

4. After careful consideration by the Mission, some compo-keF* included in the original Government request were excludedfrom the Project, for the foll6wing reasons:

(i) Rehabilitation of WSTEC estates:

5. Only seven of the eight estates remaining on Upolu Islandhave been included in the Project. The Malalololei estate, consistingof some 85 acres, was inspected and it was found that because of itssmall size and the lack of land for expansion, the investment requiredcould not be justified. As a result, the rehabilitation of the Malalololeiestate has been excluded from the Project.

(ii) Agricultural Education:

6. The provision of agricultural education at the secondaryschool level was to have been included in the Project. However,subsequent to the Government's 2equest and before the Project wasappraised there were certain changes in the field of agriculturaleducation in Western Samoa. The Australian Government undertookto provide a comprehensive program on agricultural science to theSecondary Teacher's College, and is constructing an agriculturallaboratory and developing field plots there. The Mission thereforedecided to exclude this component from the Project.

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II. BACKGROUND

A. General

7. Western Samoa, which is located in the South Pacific, com-prises two main islands, Upolu (1,065 sq.km.) and Savai'i(l, 735 sq.km.).Its total population is estimated at 155, 000, of which nearly 72 per centlive on Upolu. Natural population growth is entimated at 3.0 per cent peryear during 1975-79, but emigiation, mainly to American Samoa and NewZealand, reduced the actual growth rate to less than 1 per cent per yearduring this period. The demand for additional employment opportunitiesis growing, particularly in the capital - Apia. q 5pss National Product(GNP) per capita was estimated at $350 in 1976.

B. The Agricultural Sector

8.. Agriculture is the mainstay of the economy and accounts forapproximately 50 per cent of the GNP. More than two-thirds of the popu-lation depend upon agriculture, including forestry and fishing, for theirlivelihood. Agricultural products - copra, cocoa, bananas and taro -account for about 90 per cent of export earnings. Because of the importanceof agriculture, the Government attaches considerable importance to im-proving its productivity, and gives high priority to agricultural and ruraldevelopment. The current Five Year Plan (1980-84) places emphasis onprojects capable of enhancing the productive base of the economy, in-creasing exports, creating import substitution industries, generatingemployment and diversifying the economy.

C- Of the total land area of 694, 000 acres, an estimated 170, 000acres are now under cultivation. Most of the land (81 per cent) is. held byvillages as customary land. The Gover ment holds 11 per cent; WSTEC,4 per cent; and 4 per cent is freehold. 27/

AQ. The agricultural sector comprises two subsectors: the villageor smallholder subsector and the-commercial subsector. It is dominatedby the village or srnallholder subsector. The,.rur*i population of about 130, 000lives in about 350 villages, which are located along the coast, and village

i/ World Bank estimates. No later estimate is available.

i/ See Map 1 on page (ii).

4

lands stretch inland towards the central mountain areas, Agriculturalproduction in the commercial sector is largely carried out by WSTEC, witha few isolated efforts by other agencies such as Government departments.

1L There is considerable scope for the development of the agri-cultural sector, and this could lead to-significant increases in exporteariings and in savings of foreign exchange through import substitution.As many of the most suitable forms of agriculture are labor intensive, theirdevelopment would create substantial employment opportunities. Further,in view of the limited natural resources in the country, any opportunitiesfor industrialization would depend on raw materials produced in the agri-cultural sector.

12. The underlying duality in the scope for agricultural developmentis increasingly apparent. There is some potential in the village agriculturesubsector for increasing production beyond broad subsistence requirements.WSTEC and other Government and private enterprises could, if reorganizedand rehabilitated, increase commercial agricultural production to provideboth short- and long-term benefits to the economy. The main thrust of theFourth Development Plan (1980-84) is on village development, through theRural Development Program of the Prime Minister's Department andthrough direct technical assistance to village producers. The WSTEC pro-jects on Upolu and Savai'i will be the largest developments in the commer-cial agriculture sector and they will help that organization to eypend itscontribution to national production, to provide a significant amount of addi-tional employment, and to provide a model for further large scale develop-ment.

C. Agricultural Products

1. Coconuts

13. Coconut :.s the basis of the Western Samoan economy. Itprovides the largest tex-ort earnings (as copra) and is the foundation of theSamoan lifestyle, for i s used in cooking, for fuel and as building materials.

4.. The current area of productive coconuts is approximately90, 000 acres and another 32, 000 acres are planted but have yet to comeinto bearing. Annual production is estimated to be around 30, 000 tons(copra equivalent). About one-third of this is used in fresh form fordomestic consumption. During the period 1971-76, annual copra produc-tion ranged from 13, 000 to 19, 000 'cons.

IS. The current levels of productivity in the copra industry arelow by world -standards, averaging about 700 lbs.of dry copra per acre.

This is due to sevzral factors, such as senile plantations, poor culturaltechniques, lack of fertilizer, failure to remove the old trees under whichthe new stand has been planted and failure to collect the crop on time.Many of these constraints could be removed through an effective extensionservice.

2. Cocoa

16. Cocoa, which is produced primarily for export, occupies about12, 000 acres. Both production and yields have declined since the early1950s, and total annual production is now about 1, 540 tons. This declineis attributed to poor agronomic management, low soil fertility, poorplanting material, uneconomic small blocks and highly unstable prices.The revival of the smallholder cocoa industry will depend on an efficientextension service, an active research program to identify suitable highyielding varieties, and an efficient price stabilization scheme.

3. Taro

R17.. Taro is the staple in the Western Samoan diet. Annual percapita consumption is estimated at 365 pounds, which indicates an annualproduction of approximately 25, 000 tons, some of which is traded in theApia market. There has been a growing overseas demand for taro inrecent years. During the period 1975-1979, the quantity exported increasedfrom 19, 853 cases to 130, 664 casesL/ and was an important foreign exchangeearner. As a staple food crop and a relatively high priced, quick returncash crop, taro production is given high priority by farmers.

4. Bananas

48. Banana is another important source of food. Domestic con-sumption accounts for the major part of total production. From a peakexport volume in 1969 of almost 16 million pounds, exports have fallen toless than 2. million pounds in recent years. This was a result of severehurricane damage in 1966 and 1968 and the subsequent inability of theproducers to re-establish their plantations and to control banana diseases.In addition, the lack of fertilizer to counteract the rapid depletion of soilfertility caused by the cultivation of bananas has led to lower yields.

1/ A case contains approximately 70 pouiids.

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5. Cattle

Western Samoa has an estimated 20, 000 head of cattle, ofwhich about 8, 000 are owned by smallholders and 12, 000 by WSTEC. The:cattle are mainly Hereford crosses, and are acclimatized to local con-ditions. The Government wishes to expand the national herd so as toreduce the imports of meat.

D. Western Samoa Trust Estates Corporation

1. General

Zt0... The Western Samoa Trust Estates Corporation (WSTEC) owns30, 000 acres, or 18 per cent of the country' s total cultivated area of170, 000 acres, and is the largest enterprise in Western Samoa. It iswholly-owned by the Government and is headed by a Board of six directors,appointed by the Head of State, and is chaired by the Prime Minister. Theadministrative powers of the Board are delegated to a General Manager(GM).1/

2. Agricultural Enterprises

Z&. The Government regards WSTEC as the leader of the agriculturesector. It expects it to set the pace by developing and demonstrating pro-gressive crop asnd'animal husbandry practices. WSTEC's 8major involvementis with plantations. It has 14 estates on Upolu containing approximately20, 000 acres of plantation, and is develop;Pg about 10, 000 acres on Savai'iI3land with the assistance of an IDA creditS/

22. WSTEG cultivates about 10, 000 acres of coconut. All the areaunder coconut is either grazed or undercropped with cocoa or coffee.WSTEC has about 2, 400 acres under cocoa cultivation, of which part isgrown as a pure stand, with yields averaging about 300 pounds per acre..However, the cocoa is generally senile, too thinly planted, and becausesit is mostly grown without shade, suffers from over-exposure to sun.WSTEC grows. about 333 acres of coffee, of which 318 acres are of thepoor quality, "li'bericall variety. The coffee is all-consumed in WesternSamoa. The ne.ct most important WSTEC enterprise to coconut is cattle.

%/ The organization of WSTEC is given in Appendix 1.

/ IDA credit No. 951 WSO,'1979.

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The total cattle population on WSTEC properties is about 12, 000 head,which comprises 60 per cent of the national herd. The e"tates used forcattle grazing need drinking water supplies,. -pasture improvement andfencing. .eneral stock ma-nagement also needs improvement.

3. Non-Ar ral Enterprises

23. The non-agricultural enterprises of WSTEC include a soapfactory, a coconut stem utilization plant, a retail store, a service stationand an engineering shop. Whilst the soap factory is essentially exportoriented, the other facilities serve WSTEC and the general public. Froman organizational point of view, these activities are contained in a separateadministrative unit and do not conflict with the agricultural enterprises.Opportunities for increasing revenues and profit margins for the corpora-tion by the manufacture of soap and thr processing of coconut-wood by-products were studied by consultants.!/ The recommendations made toexpand these facilities have been adopted and appropriate provisions havebeen made in the Project.

4. Marketing

24.. WSTEC utilizes the services of the Copra Board, Cocoa Board,Banana Board and the Produce Marketing Board to market its -produce.It also markets some cocoa directly through brokerage houses in London,New York, Auckland and Sydney, and so frequently secures a higher pricefor its better quality produce than does the Cocoa Board for the lowerquality smallholder cocoa. Cattle are slaughtered at its own abbatoir, andthe meat is sold on the domestic market through the Corporation's ownretail points and other retail traders. WSTEC' s meat processing andmarketing facilities in Apia are also used to market pork and pork productssuch as bacon and ham.

5. Financial Position and Performance

S5 Income Statements and Balance Sheets for 1973-1978 arepresented in Appendix 2. (The audited financial statements for 1979 werenot available at the time of appraisal). The main aspects of WSTEC' soperation and performance over-these years are as follows:

(i) WSTEC has generated significant profits each yearduring this period and now has a net annual profit

j/ T.A. No. 308/79: WSTEC Agricultural Development Project II.

of .abou2 ."', 1r .0 =Dmillion;

(ii) Net profit before tax expressed as a return on totalcapit3- employed ranged from a low of 3. 6 per centin L973 to 20. 2 per cent in 1977, the year in whichcocoa prices reached a peak;

(iii) The increase in total assets from WS$3. 0 million toWS$6. 5 has been financed primarily from retainedearnings, resulting from corresponding increasesin production and revenue during these years;

(iv) WSTEC' s capital structure is basically sound, however,in recent years its liquidity position has weakened asit undertook new development projects on Upolu andSavai'i, without immediate cash returns. The liquidityposition is not likely to improve until the impact ofthese projects is translated into increased yields andearnings. The current ratio over the period variesfrom a high of 16:1 in 1976 to a low of 1.8:1 in 1978; and

(v) The WSTEC management recognizes that it needs assist-ance to develop its long-term financial planning, budgeting,treasury and cash management functions. WSTEC requestedthat a suitable consultant should be provided under theProject and the Mission considers this is imperative toensure the success of WSTEC's new development projectson both Upolu and Savai' i;

E. Agricultural Surport Services

26. The Department of Agriculturelynd Forests (DOA) is underthe control of the Minister of Agriculture. _ The DOA, which is mainlyresponsible for resea. ch and extension to the smallholder sector, receivespriority in developmen, expenditure for the Government is convinced thatthe development of land holds the greatest potential for the future. How-ever, the level of achievement in the agricultural sector has been dis-appointing. ! This poor performance can be attributed mainly to a shortagt

1J See Appendix 3 for the Organization Chart of the Department ofAgriculture.

A! The 1980 Budget Statement, Government of Western Samoa, Ministerof Finance, November 1979, p. 14.

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of trained scientific staff and appropriate back-up facilities for researchand extension.

1. Research

27. The DOA was reorganized tvo years ago and the new organiza-tional structure appears satisfactory. The position of Assistant Director -Research and Technical Services has been established but remains vacant.The College of Agriculture at Alafua was the research arm of DOA until1977 when the College became the School of Agriculture of the Universityof the South Pacific and its emphasis was changed from providing the entirenatioxnal research effort to regional needs, thereby reducing the benefitsderived up to that time by Western Samoa.

28. The main shortcomings of the Research and Technical ServicesDivision! of DOA are the lack of trained personnel and the lack of co-ordination of research activities. There are few Samoan's trained inagricultural science and most of their activities have been directed to non-research matters, such as plant propagation, plant protection and Lr -leasinglivestock breeding stock to farmers. The need for some expatriate staffover the next five to ten yeyr is clear because of the shortage of Samoanswith the requisite training.-

29. Research has been conducted hitherto on an ad hoc basis withno coordination between projects. There is no focus on adaptive researchand consequenJly there are weaknesses in the extension service. Severalbilateral agencies and UNDP have established support programs for DOAin agronomy, plant protection and livestock husbandry. The facilitiesestablished under these programs at Nu'u, together with the researchfacilities provided to WSTEC under the Banlc loanlZ at the same location,have been largely used for annual crops research work. The Missionbelieves that research into annual crops should be strengthened; meaning-ful research on perennial crops should be initiated; and opportunities forscientists to conduct adaptive research in different agroclimatic regionsof the two islands should be provided.

j See Appendix 3, page 2 for the Organization Chart of theResearch and Technical Services Division.

i/ Loan Agreement, Schedule 5, para. 4.

j/ Loan No. 338-SAM(SF): WSTEC Agricultural Development Project.

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2. Extension

30. The Agricultural Extensoion Division is the principal field armof DOA, and is responsible for direct contact with farm families. Theorganization and staffing of the Dlivision (see Appendix 3, page 3) wasrecently reorganized, particularly at the Agricultural Officer (AO)level,to decentralize supervision and management. If fully staffed, thedivision would have 31 field assistants (FA's) and ten district fieldofficers (DrO' s). At present, 12 posts at different levels of theextension service are unfilled.

31. Both within and outside DOA, the Agricultural ExtensionDivision is reported to be the weakest division in the department.Observations on field visits and interviews bear out this assessment.The division-does not currently have a program or professional staffcapable of mounting an extension program designed to modernizeagriculture.

32. Research, the results of which benefit farmers, particularlysmalholders, is fragmentary and falls short of critical needs. In short,research and extension are inadequately planned and coordinated. Attemptsto influence the farmers to adopt improved, income-increasing practicesare disjointed. The extension agent often selects parts of a package ofprLctices though the benefits can be derived only from the ful. package.

33. The DOA has difficulty in recruiting qualified staff for extensionand research due to the unattraitive terms of service relative to otheragricultural sector employers.-' Only two or three persons have had anyformal training in extension methodology. With very few exceptions,extension staff have only received a primary school education. There isa lack of facilities for in-service training for field staff which exacerbatesthe problem of staff quality. Further, a lack of transportation and housinghave become major constraints to pro4Viding an effective service.

3. Education

24. Agricultural education is provided at two levels in Western,c moa, at the junior secondary high school level, and at the universitylevel, through the School of Agriculture of the University of SouthPacific (USP), which is located at Alafua on the outskirts of Apia. USAIDis providing financial assistance to ttie School of Agriculture of USP forit:- regional training needs. The Australian Government has providedfacilities at the Secondary Teacher's College to train teachers in agri-cultural science. A comprehensive program has been drawn up; anagricultural laboratory is being constructed; and field plots are beingdeveloped under the Australian Aid Program. An appropriate juniorsecondary high school curriculum based on Samoan conditions is also

d/ Loan Agreement, Schedule 6, para. 7.

being developed. Some schools already have facilities for practical work,and with additional assistance, all schools could be provided vi th thenecessary facilities.

35. The USP' s School of Agriculture has been offering a three-yearcourse leading to a diploma for some years, and in 1977 it began offeringa degree course in agriculture. Teachers are recruited from all over thePacific area and their performance has been gernerally good, although theirusefulness is limited by their very short assignments. At presqnt about30 people receive diplomas or degrees each year, about 50 per cent ofthem are Samoans.

4. Credit

36. The Development Bank of Western Samoa (DBWS), which wasset up in 1974 with Bank assistance!!, is the only development financinginstitution in the country. The Bank has been the largest single sourccp offunds for DBWS, and has so far provided loa:- is totalling $8. 0 million' 4 andtwo technical assistance grants.

37. The type of guarantee required for loans is determined by tkesize of the loan and the purpose for which it is obtained. Interest ratesrange from 8 to 10 per cent for agricultural loans, and 9 to 12 per cent forindustrial loans. In the first five years of its operations, about 62 percent of DBWS' s total lending (WS$13. 4 million) has been for agriculture,mainly to smallholder farmers. About 90 per cent of these agriculturalloans were for less than WS$500, and they represent 43. 7 per cent of thetotal amount of agricultural loans.

:38. DBWS is participating in the village development program,which is the most important rural development project in the country. Thisprogram is designed to foster agricultural development at the village leveland is financed 60 per cent by government grant, 35 per cent loan from

Sj T. A. No. 80-SAM, 11 January 1973

i/ Loan No. 218-SAM(SF), 18 March 1975; Loan No. 287-SAM(SF),21 December 1976; and Loan No. 366-SAM(SF), 21 November 1978.

.t/ T. A. No. 137-SAM, 18 March 1975 and T. A. No. 185-SAM,16 December 1976.

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DBWS and 5 per cent by the village. DBWS is at present emphauizingshort-term agricultural lending for annual crops to improve its liquidityposition and to bring about more rapid improvement in rural areas.

5. Input Supplies

39. The Agriculture Store, which was set up in 1975, is thenational agency for inaporting and distributing all agricultural inputs.The store is managed by a Board chaired by the Minister of Agricultureand is operated as a non-profit organization. Its main facilities arein Apia, but its facilities at Salelologa on Savai'i are being substantiallyexpanded. The Agriculture Store provides physical inputs, such asfertilizer, chemicals and small farm implements at subsidized pricesto the smallholder farmers. Sales amounted to WS$1. 05 million in1979, but the store is handicapped by inexperienced management andirregular shipping services. Recent bilateral aid support is expectedto improve the efficiency of the Agriculture Store.

6. MBrketing Agencies

40. The marketing of copra, cocoa and bananas is handled byspecialized boards managed by interministerial committees. Themarketing of other agricultural crops (mostly taro) is handled by theProduce Marketing Division of the Department of Economic Development.The Copra Board, which was established in 1948, and the Cocoa Board,which was inaugurated in 1972, act as the final buyer for copra andcocoa, which are subsequently exported. At each point along the chainof delivc fy, the Boards determine, on the basis of prevailing worldprices, the pricesto be paid to the producers or agents. With thecommissioning of the oconut Oil Mill, which is being constructedwith Bank assistance , the Copra Bo4yl will cease to be an exporterof copra and will instead sell directly Jto Samoa Coconut Products Ltd.,which will operate the Mill and export the oil.

41. The Banana Board, which was established in 1976, is respon-sible for the collection and transport of bananas from the grower tothe wharf in Apia for export. It provides all cases and packingmaterials as well as haulage, handling and inspection. The ProduceMarketing Division exports all items which are not covered by themarketing, boards. These include taro, taamu, fresh coconuts, fruitsiand proceseed produce.

j Loan No. 328-SAM(SF): Coconut Oil Mill Project.

i/ The Copra Board's selling price to Samoa Coconut Products Ltd. willbe based on the fob Apia copra price (Loan Agreement No. 328-SAM(SF),Schedule 6, para. 3) which is consistent with the current method ofdetermining prices paid to copra producers.

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42, The inefficiency and high cost of transportation affect thesupply of inputs and marketing. The demand for efficient transportationwill increase in response to increased agricultural exports. An importantrecent development has been the establishment of the Pacific Forum Line(PFL), a skhipping concern owned by the governments of New Zealand,Western Samoa and other Pacific Islands. PFL has two ships in operation,which have substantially expanded transport capacity, improved transportschedules and lowered transportation costs, by introducing competitiverates. PFL will be a vital element in Western Samoa's agricultural develop-ment.

7. Road Infrastructure

43. A satisfactory basic road network exists on both Upolu andSavaili. Roads are built and improved by the Special Projects DevelopmentCorporation (SPDC) and maintained by the Public Works Department (PWD).SPDC is an autonomous public entity established in 1974 to handle all roadbuilding and improvements and is not restricted by civil service regulations.SPDC has performed well since its inception. PWD' s road maintenance,however, is not satisfactory and a major effort is required to plan, organizeand fund a road maintenance program. PWD has started receiving technicaland financial aid from bilateral sources and this should help it to improveits performance.

F. External Assistance to the Agricultural Sector

44. The following are the main ongoing projects and programs inthe Agricultural Sector being implemented with assistance from multi-lateral and bilateral sources:

(i) Asian Development Bank!/

45. In December 1977 the Bank approved a loan for $3. 0 million toWestern Samoa for the rehabilitation of six WSTEC estates on Upolu. Themain components of the Project included the improvement of infrastructureand management practices; establishment of an agricultural research station;

4/ W5TEC Agricultural Development Project - Loan 338-SAM(SF), 1977;Coconut Oil Mill Project - Loan 328-SAM(SF), 1977; DevelopmentBank of Western Samoa T.A. 80-SAM 1973, Loan 218-SAM(SF) 1975,T.JA. 137-SAM 1975, T.A. 185-SAM'1976, Loan 287-SAv(SF) 1976,Loan 366-SAM(SF) 1978.

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machinery for road improvement and maintenance; provision of necessaryproduct processing facilities for cocoa and copra; assistance for projectimplementation, operation and maintenance; and provision of fellowshipsfor overseas training of local staff.

46. To improie the foreign exchange earning, capacity of the coconutindustry, the Bank approved a loan of $2. 2S million in December 1977 forthe establishment of a copra crushing mill for coconut oil production.

01.s The Development Bank of Western Samoa set up with Bankassistance in 1974 is the only development financing agency in the country.Agricultural lending has been a major activity of DBWS, accounting forabout 62 per cent of the total loans.

(ii) The World Bank

46. In 1979 the World Bank approved $8. 0 million under an IDAcreditY/ for the development of WSTEC estates on Savai'i. The total costof the project is $20. 5 million, the foreign exchange cost component being$13. 7 million. Co-financing for the Project will be provided by theAustralian Government ($5.4 million), UNDP ($1. 7 million), JapaneseGovernment ($1. 4 million) and EEC Special Fund ($0. 3 million).

The Project consists of investments in nurseries, importedimproved planting material, and field development of about 2, 400 acresof coconuts, 2, 130 acres of cocoa and 200 acres of coffee in four WSTECestates and selected villages on Savai'i; technical assistance for the abovecrops and for agricultural diversification in the WSTEC estates and selectedvillages; taro marketing by WSTEC on behalf of villages; estate road con-struction and development; and project administration,

(iii) FAO/UNDP - Animal Health andProduction Project

50. This five-year Project commenced in 1977, its objectives areto expand animal health services; continue applied research in pasturesand livestock production; provide technical support to government, com-mercial and rural sector livestock production projects; and provide trainingfor professional and technical staff.

.1/ IDA Credit No. 951 WSO, 1979.

(iv) FAO/DP Coc rid SeedProduction and Plant Protection

11. The Plant Protection Project, which was approved in 1977,provides .for plant protection services, including a laboratory, insectaryand plant house complex to be established at Nu'u Agricultural ResearchStation. Advice is being provided on quarantine development, and apost-entry quarantine house, mist propagator unit and wharfside incineratorand fumigation facilities will also be constructed. A 45-acre coconut seedgarden of dwarf mother palms has been establinhed under the Program toprovide hybrid seed nuts.

(v) Australian Aid

52. The Australian Government has a ten-year agreement with theGovernment of Western Samoa to undertake research and provide extensionservices for the production and processing of cocoa. Under this agreementa well-equipped laboratory, plant propagation unit, office accOmmodationand two staff houses at the Nu'u Agricultural Research Station have beencors tructe4 and two Australian experts are at present engaged in cocoaresearch and extension work. The team is to be expanded in the near future.

53. Australian aid has also been p,r ovided to DBWS for the provisionof beef cattle; for agricultural education , and to support the FAO PlantProtection Project, through the provision of an additional post-entry quar-antine house to facilitate increased imports of Amelonado cocoa and Robustacoffee for WSTEC and DOA.

(vi) Federal Republic of Germany - PlantProtection Project

54. The Federal Repu)blic of Germany has provided technical assist-ance for plant protection. A three-man team, comprising an entomologistand two pathologists, is working at the USP's School of Agriculture untillaboratory facilities at Nu'u Agricultural Research Station are completed.An agricultuiral complex at Salelologa on Savai'i, including facilities forplant protection and extension, is also being built.

j/ See paras. 6 and 34.

(vii) New Zealand Bilateral Aid Program

55. The New Zealand Bilateral Aid Program has provided technicaland material support for a range of agricultural sector projects during thepast 4 to 5 years. These include the WSTEC Feed Mill, USP' s School ofAgriculture Pig and Poultry Units, Agricultural Store Warehouse, DOAlivestock project, agricultural engineeririg and food processing. In addi-tion, funds have been provided for the Government' s capital input into theDevelopment Bank and for the Rural Development Program.

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III. THE PROJECT

A. and Scope

56. The overall aim of the Project is to assist the Government in itsefforts to increase agricultural production, export earnings and save for-eign exchange through a more efficient utilization of its existing resourcesand to provide better income and employment opportunities in the ruralsector. The Project is designed to help achieve these objectives through:(i) providing assistance to WSTEC for the rehabilitation and developmentof seven of its estates, the expansion of its processing facilities, and theimprovement of its management system; (ii) providing assistance to DOAfor the provision of-facilities and expertise to strengthen its research capa-bilities and improve the quality of its extension services, This is in linewith the strategy for SPDMCs . indicated in the South Pacific AgriculturalSurvey undertaken by the Bank in 19791~ which emphasizes, among others,support for the smallholders through the strengthening of agriculturalresearch, qxtension and management training to increase smallholderincomes.

B. Project Components

57, PartA of the Project comprises assistance to WSTEC and hiasthe following components:

(i) replanting 1, 000 acres of senile coconuts on one estateand planting 1, 000 acres of cocoa under coconut onfour estates;

(ii) rehabilitation of seven estates by introducing a fertilizerapplication program to existing cocoa and coconuts to

4/ SJuth Pacific Agriculture: Choices and Constraints (South PacificAgricultural Survey 1979), Australian National University Press,1980.

4/ Bank Operations in the Agricultural Sector in the South Pacific -Working Paper 2-80, Asian Developmert Bank, 20 May 1980.

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improve yields and by providing infrastructure facilitiessuch as roads, fences, transport, storage sheds, drinkingwater, livestock equipment and pasture improvement forcattle;

(iii) expansion of the existing soap processing facilities; replace-ment of the coffee processing facilities; improvement andexpanaion of the coconut stem utilization facilities; and

(iv) provision of 108 manmonths of consultants' services forinstitution building and project implementation.

58. Part B of the Project comprises assistance to DOA to improveits agricultural research and extenision programs and has the followingcomponents:

(i) establishment of a research facilities network based on thecounLryl s major agroecological regions and the strengtheningof support facilities for the crop experimentation centers onUpolu and Savai'i, as necessary;

(ii) establishment of a National Agricultural Extension Center,including training and dormitory facilities and housing forresearch and extension personnel at Nutu;

(iii) construction of 21 Field Extension Centers and improve-ments to two existing Field Extension Centers;

(iv) provision of transport anad other support facilities for theextension service;

(v) provision of 120 manmoniths of consult'ants' services forstrengthening agricultural researc-h and extension; and

(vi) provision of fellowships for the overseas training of localresearch and extension staff (`135 manmonths).

2/ Current WSTEC yields of copra and cocoa are approximately.800pounds/acre and 300 pounds/acre respectively. Estimated yieldsat full development are expected to increase to 1, 500 pounds/acreand 480 pounds/acre respectively. See Appendix 13, pages 2 to 5,Tables 1 to 4 for estimated yields.

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C. Details of Project Components

Part A : WSTECi/

1. Coconut Replanting

59. There are approximately 5, 000 acres of coconuts on the sevenestates. It is proposed to replant 1, 000 acres of the oldest palms andto provide fertilizer for an additional 3, 750 acres.

60.- Selected seeds from Samoan tails will be used for replanting1,000 acres of coconuts at Vaipap, at a rate of 200 acres per year, overa period of five years. Seedlings-' will be, planted under aged palms andunproductive palms will be selectively thinned as the young palms begin toproduce. (The aged palms will be completely ±emoved over four years..)This procedure will minimize the adverse effects on production, and henceincome from the estates.

2. Cocoa Planting

61 There are approximately 2, 000 acres of cocoa on the sevenestatesa/ proposed for rehabilitation. About 1, 775 acres are. suitable forfertilizing. The remainder are too sparse, too old and too diseased.

6Z. Cocoa production on the estates has declined over the past fewyears. Though the decline has been checked through improved managementpracticer, it is extremely important for WSTEC to begin replanting. Atthe same time, the productive capacity of the present cocoa stands need tobe maintained so as not to affect WSTEC's income. It is, therefore, pro-posed that 1, 000 acres of cocoa be planted under younger (maximum 30years) coconut palms on Vaipapa, Tausagi, Faleata and Casala estates andall existing cocoa considered worthwhile should be fertilV'ed to increase

i/ See Map 2 on page (iii) for location of WSTEC estates and Appendix 5for facilities to be provided for the estates.

&/ See Appendix 4 for the Land Use Pattern of Seven Estates.

%/ A polybag nursery has already been established.

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the income from the present stands of cocoa until they are replanted.

63. It is proposed to use Amelonado seed imported from theSolomon Islands, for planting. (Amelonado has proven high yielding prop-erties and higher Phytophthora [black pod] resistance. ) The DOA hasestablished quarantine facilities which will have sufficient capacity tohandle WSTEC' s requirements.

64. The replanting program entails thie establishment of a cocoanursery (the present nursery at Tuana'imato has to be moved to make wayfor the new cocoa factory under the first project), windbreaks wherenecessary, fencing and road improvement.

3. Cattle

65. Cattle are at presert grazed on Vaipapa, Tausagi and Faleataestates. This helps control grass and weed growth among the coconutsand provides income for WSTEC. The water supply on those estates isinadequate and the handling facilities and pasture need improvement. Thereis considerable scope on sections of Faleata (490 acres) and Vaipapa (300acres) to improve the pasture, to provide water for cattle, and allow forfattening of young stock for slaughter.

66. Under the first project, cattle management on WSTEC estatesimproved considerably, but the fattening areas for young stock need to beincreased. This c n. be done by providing improved pasture, water andhandling facilities.1' Under the Project, 790 acres of pasture on Vaipapaand Faleata will be improved by fertilizing and by planting selected pasturespecies; drinking water will be provided by tapping existing bores andreticulating water to troughs in paddocks; and handling facilities will beimproved by providing weighing scales, cattle crushes, special cattletrucks, It,:. These additions will considerably increase the carryingcapacity and the number of steers and heifers that can be fattened onthese estates.

j/ The Mission has taken into consideration the findings and recommenda-tions of the Project Performance Audit Report (PE-27[AU]L68-SAM)on the Beef Cattle Pilot Project - Loan No. 68-SAM(SF), approved29 May 1971.

Acres per livestock unit.

2/ See Appendix 13, page 6, for increases in carrying capacity.

4. Estate Rehabilitation

67. The Mission considers that fertilizer application is an integral-part of the estate rehabilitation .program. The Government has given anassurance th , the fertilizer application program will be continued afterthe Project.

68. Upgrading of existing buildings and the construction of addi-tional structures (such as housing, offices and stores, copra and tractorsheds) will be provided at each estate, as necessary. Eleven miles ofnew roads will be constructed and 38 miles of existing roads will be up-graded. Twenty miles of new fencing will be erected and 68 miles will berefenced. A total of 16 vehicles (trucks and pick-ups) and six tractorsare to be provided. A water supply for domestic use is also to be provided.

5. General Support Facilities

6.9. The increase in production of cocoa and copra will necessitatethe construction of cocoa and copra stores at Apia. The new copra storeis also needed for the coconut oil mill, which is being constructed. Thesestores will be built on land WSTEC is now reclaiming for a general centralcomplex at Fugalei in Apia.

6. Soap Processing Facilities

70. The proposed expansion of the soap factory is designed to:(i) increase the production of laundry soap from about 1, 000 tons to 1, 500tons per annum; (ii) increase the production of toilet soap from about 100tons to 400 tons per annum; and (iii) to introduce the production of soappowder to a capacity of 400 tons per annum.

71. The existing soap processing facilities were built in 1966. Theoriginal capacity of the plant was 500 tons per annum on the basis of oneeight-hour shift per day. As demand grew, the capacity was increased byoperating three shifts per day and production now stands at about 1, 000 tonsper annum. Toilet soap production was introduced in 1967 and some 30 to40 tons have been produced each year.

;/ Loan Agreement, Schedule 6, para. 3.8/ See AVptbndix 5 fibr fvilities to be provided at each estate.

j Set Appen4ix 5-,. 'p4ge 4-5, for faciliWiet to be provided forth So4 Processing P'acilities.

i2. The factory produces its own coconut oil by means of an ex-peller. Surplus quantities of coconut oil are exported. With its presentcapacity of about 1, 000 tons per year, the soap factory has reached itsmaxinaum capacity, as production is dependent upon the steam boilercapacity, soap pans, pumps, tanks and vacuum plodder. Most of theexisting machinery is in urgent need of repair.

73. The equipment and machinery for the expansionr will be modern,but not automated to the extent that would make it susceptible to productionlosses because of minor technical breakdowns. Parts of the old plant willbe integrated into the new production lines. While the new facilities arebeing installed, the existing production lines can continue operating sothere will be no loss in production or revenue during installation of the newplant.

74. The equipment and machinery to be provided for the productionof laundry soap will have a greater capacity and will also allow soap powdersand detergents to be produced on the same line.

7?. The proposed new toilet soap line is planned to meet an ever-increasing demand for better toilet soap with an increased content ofcoconut oil. WSTEC have sold toilet soap in Hawaii, Australia and NewZealand. With an improved product that meets the quality requirement ofthese markets, a large export potential is foreseen. By the same token,local demand should rise dramatically due to the recent import restrictionsintroduced by the Government. It is proposed gradually to increase pro-duction of toilet soap to a maximum of 400 tons per annum.

7*. A completely new line is proposed for the manufacture.of soappowder and detergents. In Western Samoa, there is an increasing demandfor soap powder products. At present, soap powder is being imported frornFiji, Australia, Great Britain and New Zealand. The proposed productionof soap powders and detergents will be done by means of a Spray MixingPlant. A maximum capacity of 400 tons per annum from the new line isproposed. In addition, the laundry soap line could be converted also toproduce soap powder and detergents as demand dictates,

7. Coconut Stem Utilization Facilities}

MI-7. The proposed expansion of the sawing facilities and the pressuretreatment plant will enable the processing of coconut stems that will be

j/ See AppendixS, .'page ,5, -Ir .1acilities to. be provided Ior tbeCbcondt Stem Utlivtion Facilities.

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felled from the coconut thinning program (see paragraph 60). The millwill be capable of producing each year about 250, 000 board feet of lumber,of which half would be exportable, and 430, 000 board feet would be fencepost materials. It will produce as a by-product 90-120 tons of fuelwoodfrom lumber slabs and trimmings, and 30-50 tons of charcoal.

78. Equipment to be provided under the Project includes a circularheadrig, which will break the coconut log for further cutting on the presentbenchsaw; a rail-mounted log carriage; a log truck equipped with a craneand winch; a delivery truck; chainsaws; as well as spares and accessories.The existing pressure treatment plant and benchsaw will be rehabilitated.A building to house the headrig and complementary equipment, a sawshopand a fungicide treatment vat will be constructed. The present mill siteat Vaitele will also be improved to facilitate operations, particularly duringthe wet season.

8. Replacement of Coffee Processing Facilities

79. The existing coffee hullers at Tuana'imato, which are housedin the old cocoa factory, are obsolete and need to be replaced. Under theproposed Project, a new coffee huller and tower drier are to be installedin the new cocoa factory now being erected at Tuana'imato. They willhave a capacity of 150 tons of parchment, which will be adequate to handlecurrent and-1 planned coffee production.

9. Consultants' Services /

80. Large new development activities on Upolu and Savai'i are tobe undertaken by WSTEC with external assistance over the next-five years.Certain areas of WSTEC' s management will therefore need to be strength-ened and the proposed Project provides for a total of 108 manmonths ofconsultants services. These consultants will undertake certain specifictasks and will also give on-the-job training to their counterparts and otherlocal staff.

81. The consultants for institution building will have expertise inthe fields of financial controllership (24 manmonths) and general plantationadministration (24 manmonths). Three consultants with experience incocoa estate management (24 manmonths), coconut estate management(24 manmonths) and sawmill management (12 manmonths) are proposed

i/ See Appendix 6 for the Terms of Reference of the Consultants.

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to assist with the expeditious and efficient implementation of the Project.

Part B: Department of Agriculture and Forests

82. This part of the Project provides facilitiesi/and expertise tostrengthen the country's agricultural research capabilities and to improveits agricultural extension services on both Upolu and Savai'i Islands. Itscomponents are:

Agricultural Research

1. Crop Experimentation Centers

83. Western Samoa has two main agroecological zones: a wet zoneand a dry zone. With the setting up of the Central Agricultural ResearchStation at Nu'u through assistance from the Australian and West GermanGovernments and the research facilities provided to WSTEC under aprevious project, the country will have adequate facilities for research intodry zone agriculture. However, facilities need to be provided for thescientists working at the Nu'u Agricultural Research Station so they canconduct field experiments at other sites. The Project therefore providesfor the strengthening of facilities for adaptive research and for demonstra-tion plots at the crop experimentation centers at Togitogiga on Upolu, andat Asau on Savairi. The research activities to be provided under this Projectwill complement and not duplicate any efforts now being undertaken by DOA,WSTEC or any bilateral aid agencies and are directed to the national needs,since the regional requirements are being met by the School of Agricultureof USP at Alafua.

2. Consiultants' Services.i/

84. A team of two agronomists with experience in applied researchwill be provided to spearhead a program of accelerated agricultural develop-ment. At present, the only concerted research work is in relation to cocoa,but there is an urgent need to undertake research work on agronomicpractices for coffee.

j/ See Appendix 5, page. 6,, fox facilities to be provided for AgriculturalResearch and Extension.

&/ See Appendix 6 for the Terms of Reference of the Consultants.

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85. A Tree Crop Agronomist is to be provided for 36 manmonthsto undertake research into coffee and to investigate the potential for other

crops such as rubber, palm oil and spices and a Banana Agronomist is to

be provided for 36 manmonths t conduct agronomic investigations onbananas and other fruit crops.

Extension Services

1. National Extension Training Center

86. An extension training center, including dormitory facilitiesfor 25 people and housing for the Extension Program Organizer, is to beprovided at the Nu'u Agricultural Research Station. Short term in-servicetraining programs covering modern farm production and processing tech-niques will be conducted for field extension workers, agricultu'ral officersand key farmers.

2. Field Extension Centers~/

87. There are 30 extension districts, each covering about 700 farmfamiilies, but only nine hav.e "Extension Stations" (i.e., office, store,house and demonstration plot) and only seven have adequate facilities. Theextension officers serving 21 districts do not have a base and often have tolive outside their districts. This is obviously unsatisfactory and the problemis exacerbated because transport is not provided for these officers. It istherefore proposed to construct 21 new extension centers, to upgrade thefacilities of two centers, and to provide transport facilities so as to improvethe agricultural extension service.

. C/3. Consultant Services

88'. The extension staff is poorly trained and its management needs

improvement. An Extension Program Organizer is therefore to be providedfor 48 manmonths to conduct suitable training programs and to orientate

1/ There is at present a lack of information available on basic agronomicpractices relating to bananas.

2/ See Appendix 7 showing the location of existing and proposed fieldextension centers.

3/ See Appendix 6 for the Terms of Reference of the Consultants.

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the activities of this essential agricultural development support service tofarmer edcation. An extension system based on the "training and visitsy.stem"-' where the scope of the training and interaction with farmerswould be continuous and carried out over specific periods of time will beintroduced.

4. Training - FellowshiRs

89. Because of the shortage of trained research and extension staff,overseas training is to be provided for local staff. Provision of 120 man-months of training at various suitable levels in fields not available at USPare to be provided under the Project. Fifteen manmonths of short-termresearch and extension training at appropriate locations, depending onspecific needs, are also to be provided. The Consultants for the Research/Extension component will be expected to make recommendations about thetype of training and its duration and to supplement overseas training. Theconsultants would be required to provide substantial on-the-job trainingto staff as appropriate.

D. Project Costs

The total cost of the P oject, including provisions for physicalcontingency and price escalation. /, is estimated at $10.8 million, of which$7. 0 million represents foreign exchange costs and $3.8 million localcurrency costs. Details of the cost estimates of the Project are given inAppendix 8 and summarized in Table 1.

i/ Agricultural Extension: The Training and Visit System, DanielBenor and Jamep Q. Harrison, World Bank, May 1977.

~/ See Appendix 13, page 31 for contingency factors used.

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- Estimtedroect Costs

($'000)

Foreign Local TotalPART A: WSTEC

I. Facilities by Estate

Vaipapa 275 386 661

Tausagi 120 135 255

Faleata 152 161 313

Casala 91 98 189

Tuana' imato 164 123 287

Lesea 36 54 90

Tafaigata .84 74 163

Sub-total I 922 1, 036 1, 958

II. WSTEC Overall 156 84 240

III. Soap Processing 765 64 829

IV. Coconut Stem Utilization 127 27 154

V. Planting Cocoa 257 278 535

VI. Fertilizer 669 239 908

VII. Water Supply 196 21 217

VIII. Consultants 478 91 569

Sub-total (I-VIII) 3, 570 1, 840 5, 410

Physical Contingencies 385 241 626

Price Escalation 1, 045 685 1, 730

TOTAL - PARTA 5, 000 2, 766 7,766

PART B AGRICULTURAL RESEARCHAND EXTENSION

I. Civil Works 381 336 717

II. Vehicles 85 9 94

III. Machinery & Equipment 67 4 71

IV. Operations & Maintenance 120 79 199

V. Consultants 657 273 930

VI. Overseas TrainingFellowships 164 - 164

Sub-total (I-VI) 1,474 701 2, 175

Physical Contingencies 177 140 317

Price Escalation 349 181 530

TOTAL - PART B 2,000 1,022 3,022

TOTAL PROJECT COSTS (A ' B) 7, 000 3, 788 LO, 788

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E. Financing Plan

91. It is proposed that the Bank finance $3.0 million apd theAustralian Development Assistance Bureau (ADAB) and IDA22 each$2. 0 million of the foreign exchange cost of $7. 0 million. The proDosedBank loan is to be made available from the Bank's Special Funds re-sources at a service charge of 1 per cent with a epayment period of40 years, including a grace period of 10 years. r /

IDA Credit

92. IDA has agreed to co-finance the Project /; the Bank willbe responsible for the administration of IDA funds with disbursementarrangements such a-- will afford maximum flexibility in the use ofsuch funds and the least administration burden for the Bank. A s theestimated cost of Part B of the Project -- the Agricultural Researchand Extension part -- amounts to $2. 0 million, for ease of loan ad-ministration and so as to involve only one Executing Agency (DOA) withIDA funds, the Mission proposed and the Government agreed that theIDA credit be used entirely to finance the foreign exchange cost ofPart B of the Project.

ADAB Grant

93. At the request of the Government, the Mission identifiedappropriate components for ADAB co-financing. These were discussedwith the Government and the Australian auLhorities in Apia. The costof the components identified, including contingencies, amounts to $2. 0million (see Table 2). ADAB will administer its own funds underarrangements which are to be concluded between the Government andADAB and which are to be satisfactory to the Bank.

j/ See Appendix 10 for Loan Allocation by Category and Source of Funds.

g/ ADAB has agreed in principle to finance $2. 0 million on a grantbasis and IDA has agreed in principle to provide a $2. 0 million credit.

/ Western Samoa qualifies for loans from Special Funds resourcesunder the criteria laid down in "A Review of Criteria for Lendingfrom the Asian Development Fund", Doc. R83-77, Revision 1,Final, dated 14 September 1977.

i/ See ADB-World Bank Co-financing in the South Pacific, Doc.IN-149/80, dated 25 Septetnber 1980.

29

Table 2: Cornonents for ADAB Co-Financin ($'000)

Components Year 1 Year 2 Year 3 Year 4 Year 5 Total

Fertilizer 12 147 158 170 182 669Planting Cocoa 37 44 52 59 66 258Water Supply 149 46 - - - 195Coconut Stem Utiliza-

tion Facilities 127 - 127Storage Sheds - 69 - - - 69Contingencies 109 136 119 148 170 682

Total 434 442 329 377 418 2 00

Local Currency Costs

94. The Government has given an assurance that the funds requiredin addition to those provided by ADAB, IDA and the Bank, sht be madeavailable promptly as needed for carrying out of the Project. In thecase of PartAof the Project -- assistance to WSTEC -- since WSTEC isa viable commercial enterprise, it will itself provide the necessary local

currency amounting to $2. 8 million over the project period of five yearsfrom its retained earnings. The financial projections for WSTEC havebeen examined and this indicates that WSTEC shou)Jd be able to meet thelocal currency requirements from its cash flow.Z In the case of Part Bof the Project, the Government agreed to make the necessary annual budgetallocations for DOA to meet the local currency requirement of $1. 0 millionover the project period of five years.

F. Relendin Arrangemeats with WSTEC

95. The Government will relend the proceeds of the Bank loan toWSTEC in accordance with the provisions of a Subsidiary Loan Agreement,which will be concluded between the Borrower and WSTEC on terms andconditions satisfactory to the Bank.2I/ The Government agreed to relendthe proceeds of the proposed Bank loan to WSTEC for a period of 20 years,

4/ Loan Agreement, Section 4.02.

&/ See Appendix 12 for WSTEC' s Projected Financial Statements, 1979-2006, and Project Agreement, Section 2. 02.

j Loan Agreement, Section 3.0 l(b).

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.with a grace period of 5 years, at t1 Bank's current rate,for loansfrom its ordinary capital resources.

G. Environmental Impact

96. The Project will not have any deleterious environmentaleffect. A beneficial environmental impact will result through thedisposal of senile coconut stems. At present about 3,000 coconutstems need to be disposed of annually increasing to 12,000 by 1987and beyond. Decaying coconut stems provide a natural breedingground for coconut pests, particularly the Rhinocerous beetle which'is a grave threat to all coconut plantations in the country. Clearly,the economic disposal of coconut stems as envisaged under the Projectwill remove this hazard while contributing to the economic develop-ment of the country.

1/ Loan Agreement, Schedule 6, para. 5.

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IV. PFROJECT MANAGEMENT AND IMPLEMENTATION

A. Executin3 Agencies

97. PartA - WSTEC will be the Executing Agency for this part./Thie Projec, Manager and Project Office established to implement the firstBank loanJ to WSTEC will be responsible for implementation of this partof the Project.

98. WSTEC' s performance in implementing the Bank's first loan,which was declared effective on 14 April 1978 and is due to be completed bymid-1983, has been satisfactory. Disbursements and contracts awarded to31 Augaijv; 14S" amount to $1. 639 miliIQn- ut.,it a loan of $3. 0 million. Muchof the work on the. rehabilitation of the six estates, such as civil works,procurement of equipment, road building and fencing, has been completed.Water supply systems are being installed and the pasture improvement andfertilizer application programs are continuing. Yield responses as envisagedunder the first project loan are beginning to materialize. Construction ofthe cocoa processing facilities has started and work on the development ofthe Agricultural Research Station is well under way. The Project Officeis well organized and efficient. The Mission is satisfied that WSTEC iscapable and ready to undertake the implementation of its part of this Projectwith the assistance of consultants. WSTEC's financial projections3/dem-onstrate that it is capable of carrying the debt required to undertake thisProject, which will make it a long-term viable and profitable governmententerprise.

99. Compliance with the Bank's covenants under the earlier loan hasbeen generally satisfactory, as shown in Appendix 11.

100. Part B - The DOA will be the Executing Agency for this part.While the overall responsibility for the implementation of this projectcomponent will rest with the Director of Agriculture, a Project Officeheaded by a P-roject Manager and staffed with adequate personnel will beestablished. The Project Manager will be at the Assistant Director level,but because he cannot be released entirely from his departmental duties,

j/ See also paras. 21 to 25 and Loan Agreement, Schedule 6, para. 1(a).

i/ Loan No. 338-SAM(SF): WSTEC Agricultural Development Project.

X/ See Appendix 12 for WSTEC's Projected Financial Statements, 1979-2006.

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the Government has agreed to appoint a full-time Deputy Project Managa 7to carry out the day-to-day tasks involved in implementing the Project.The Mission considers this arrangement to be satisfactory.

B. Implementation Schedule

101. PartAwill be implemented over a five-year period accordingto the schedule given in Appendix 9. The coconuts will be planted overfive years at the rate of 200 acres per year, as will the planting of the1,000 acres of cocoa. The application of fertilizers is to be a continuousprocess. Virtually all the equipment and processing facilities will bepurchased during the first year. Civil works, including the water supply,is scheduled for the first three years, while fencing and road building isphased on an estateby estate basis ovet' five years.

102. Part B wili be implemented over a five-year period accordingto the schedule given in Appendix 9. The civil works are of a relativelysimple character and will be undertaken over five years. The ExtensionTraining Center and the two houses at Nu'u Agricultural Research Stationwill be constructed during the first year. The construction and upgradingof the field extension centers will be done over five years, taking intoaccount the needs of the different regions of the country and implementationcapacity of the Executing Agency.

103. To avoid any possible delay, the Executing Agency will takeearly action to recruit consultants and initiate procurement. The selectiouiof persons for overseas training and decisions about their training programswill be made during years 1 to 4. This spread is designed to allow newlyrecruited staff to gain experience and thus ease any burden created by theabsence of key staff members.

C. Pro cu rement

1. Under the Bank Loan

104. Procurement of all goods and services financed under the Bi kloan will be in accordance with the Bank's Guidelines for Procurement. 1

It is recognized that because of the remoteness of the country and becausemany small packages will be involved, international shopping procedures

X Loan Agreement, Section 6, para. l(b).

S/ See Appendix 10 for Loan Allocation by Category and Source of F1'undu.,j Loan Agreement, Schedule 4, para. 2.

- 33 -

will more effectively serve the interests of economy and efficiency./

105. Civil works financed under the Bank loan, including installationof the water supply system and road construction, shall be performed bylocal contractors engaged by WSTEC or by force account. The plantingmaterial required under the Project shai, be procured in accordance withsound practices satisfactory to the Bank. -

2. Under the IDA Credit

106. The procurement of goods and services financed under the IDAcredit will be in accordance with the Bank's procurement procedures.2/

107. Civil works contracts, except for two modular houses to beerected at the Nu'u Agricultural Research Staticn, will be awarded to localcontractors. Minor civil works may be undertaken by local contractors orby force account. To maintain a uniform standard design for the houses at theNu'u Agricultural Research Station, the two houses to be erected there areto be procured from and installed by the manufacturer of the existing houses.

108. Withdrawals for' all civil works will be allowed at fixed percent-ages of the total costs of these works and such percentages v11 representestimated foreign exchange cost components of civil works.

3. Under the ADAB Grant

lO9T The procurement of goods and services financed under theADAB grant will be in accordance with a.rrangements between the Borrowerand ADAB to be satisfactory to the Bank.

j/ Working Paper No. 6-78, 14 November 1978, A Review of BankOperations in the South Pacific DMC' s.

g/ Loan Agreement, Schedule 4, para. 5.

2/ See ADB-World Bank Co-financing in the South Pacific,DQc.IN;-149/80, dated 25 September, 1980.

i/ See Appendix 10 for Loan Allocation by Category and Sourceof Funds.

-34-

D. Consultants

1. Under the Bank Loan

110. The consultants to be financed under the Bank loan will beselected and engaged on an individual sis in accordance with the Bank'sGuidelines on the Use of Consultants.

2. Under the IDA Credit

1. llThe consultants whose services are to be financed by IDA, willbe selected and engaged on an individual basis in accordigyce with arrange-ne to- be made between the Borrower .and the BankJ in consultationwitg'IDA.

E. Accounts and Audit Reports

1lL. The Government will maintain, or cause to be maintained,accounts for the Project. The accounts will be audited internally on acontinuous basis and annually by the Chief Auditor of the Government.Within six months of the closing date of every fiscal year, the auditedaccounts of WSTEC and of the project component administered by DOAwill be submittd to the Bank in such details as the Bank may request fromtime to time.

F. Project Benefit Monitoring System

113, The DOA will be responsible for collecting data and monitoringin respect of Part B of the Project. The Economic Analysis and PlanningDivision of DOA in collaboration with the Extension Program Organizerconsultant will select samples and draw up questionnaires and schedulesfor collecting the data required for monitoring and evaluating the benefitsof this part of the Project. A baseline survey to determine the level ofadoption of modern farm technology by smallholders will be conductedinitially, and follow-up surveys and case studies will be instituted, as

9/ Loan Agreement, Schedule 5, para. 2.

2/ Loan Agreement, Schedule 5, paras. 4 and 5.

3/ Loan Agreement, Section 4. 06(b).

- 35 -

deemed appropriate, to determine the impact of Part B of the Project./Since the demonstration effects of the WSTEC development on rural peoplecannot be unambiguously quantified, no benefit monitoring system is recom-mended. However, benefits to the organization may be evaluated on thebasis of reviews conducted by Bank staff during and on completion of theimplementation of the Project.

l/ Loan Agreement, Schedule 6, para. 10.

- 36 -

V. PROJECT BENEFITS AND JUSTIFICATION

114. A primary goal of national policy and an integral component of theDevelopment Plan (1980-84) is to increase agricultural production, bothfor domestic consumption and export. The Project will assist in institutionbuilding and infrastructure development in the dual agricultural sector ofWestern Samoa with the object of accelerating agricultural development.In the dominant smallholder sector, the Project will assist in strengtheningthe research and extension capabilities of DOA, which is wholly responsiblefor the development and dissemination of improved farming technology. Onthe other hand, the support to WSTEC for improvement in its land use,expansion of the soap processing and coconut stem utilization capacitieswill significantly contribute to the development of the plantation sector.The Project is financially and economically sound and is socially desirable.

A. Benefits to the National Economy

1. Incremental Production

115. The primary benefits to the economy from the WSTEC componentwill be increased productivity resulting in enhanced export earnings fromcocoa, copra, soap products and coconut stem products, and a reductionin the import of beef. Incremental production per annum at full develop-ment is estimated at about 1, 100 tons of cocoa valued at $2. 9 million;1, 400 tons of copra valued at $611, 000; 500 tons of laundry soap valued at

$588, 000; 400 tons of toilet soap valued at $1, 310, 000; 400 tons of soap

powder valued at $1, 882, 000; 250, 000 board feet of exportable grade tiimber;430, 000 board feet of fence post material; 90-120 tons of fuelwood and 30-50

tons of charcoal from coconut stem utilization facilities valued at $170, 000;

and beef production of 68 tons valued at $60, 000. The total incrementalannual value of the WSTEC component of the Project at full developmentand at constant 1980 prices is estimated at $7. 5 million, which could be

expected to have a salutary effect on the balance of payments position of thecountry. The impact of the Agricultural Research and Extension component

on incremental production in the smallholder sector, although not easilyquantifiable, can be expected to be substantial, given the low productivitywhich prevails.

2. Land Use

1 16. The Project will substantially contribute to the improvementin land use on seven WSTEC estates covering 6, 641 acres of the most

productive land in Western Samoa. The replanting of 1, 000 acres of senile

- 37 -

coconut palms and the intercropping of 1, 000 acres of coconut lands with

cocoa will enaeble a better utilization of land and other resources on thLe

existing WSTEC plantations. Fertilizer application on about 3, 750 acres

of coconut land and pasture improvement under coconut will also enable

greater efficiency in the use of available land resources. Given the

dominance of the smallholder sector, the improvements in land use which

could be anticipated frorm a more effective extension service and app]ied

research work would be significant.

3. Agricultural Research

117Q It is proposed to provide two agronomists to investigate the

potential for the cultivation of commercial crops in Western Samoa such

as rubber, oil palm, spice crops and orchard crops besides examining the

scope for expansion of the existing coffee and banana plantations in Western

Samoa. The potential benefits from such investigations could be very large

in view of the country's dependence on agriculture as the primary source

of foreign exchange and earnings. The establishment of field experimenta-

tion centers at Togitogiga and Asau will facilitate adaptive research work

by scientists at key agroclimatic locations on both islands. In view of the

absence at present of any positive guidelipnes on agronomic practices, it is

anticipated that the potential benefits of providing essential infrastructure

for research will be substantial.

4. Agricultural Extension

118. The Project will help substantially to strengthen the national

extension service which is at present stifled in its operations due to poorly

trained field level workers and lack of basic facilities. The provision of

a consultant to organize the extension service and to conduct in-service

training programs will help to improve the quality of the field staff. The

establishment of a National Extension Training Center will provide central

facilities for extension training. The provision of 23 field extension centers

with living and working facilities for the field workers, and of support for

transportation could be expected to have a salutary impact on the efficiency

of this essential agro-support service.

5. Manpower Training

119. One of the most significant contributions of the Project will be

in manpower training at different levels. In the case of the research and

extension component, there should be major improvement in the quality of

staff. Besides on-the-job training which Samoan research scientists and

extension workers will receive from their consultant counterparts, there

- 38 -

are opportunities under the Project for overseas training which are expectedto have a major long-term impact. The extension programs which will beconducted under the Project and subsequent activities of the field extensionstaff are expected to have a major impact on farmers in the country. Inthe case of the WSTEC component also, there will be significant on-the-jobtraining benefits for Samoans through the five consultants to be engaged.Moreover, the demonstration value of WSTEC as a modern plantation enter-prise for other large-scale organizations as well as smallholders is signi-ficant.

6. Economic Internal Rate of Return

20. The economic internal rate of return (EIRR) for Part Aof theProject is estimated at 19 per cent. This level is considered satisfactoryin view of the substantial secondary benefits of the Project which have notbeen quantified. Individual rates of return for the WSTEC estates, SoapProcessing and Coconut Stem Processing sub-components are 19, }5 and32 per cent respectively, which are also considered satisfactory...! Theeconomic analysis has been confined to the WSTEC component only, be-cause of the difficulties of assigning a precise level of benefits to the researchand extension component. Attributing precise levels of primary benefits toresearch and extension is ambiguous since it is virtually impossible todetermine what proportion of the benefits expected from improved agricul-tural practices are due to extension or research alone and what is due topast efforts in these areas, the purchase of additional inputs or externalities.

121. The computation of the EIRR has been based on the FIRR cal-culations adjusted for distortions in the market prices, i. e. shadow wagerates and duties on export commodities and imported goods. The Projectlife has been assumed to be 25 years and the analysis is based on incre-mental benefits and costs. All traded goods are priced at the relevantborder prices (FOB Apia), while non-traded goods and services are pricedat their respective local market prices and wage rates. The assumptionsof the analysis are given in Appendix 13, pages 30 and 31.

122. The Project's sensitivity to changes in various aggregatevariables has also been examined.U It is clear that a decrease in benefits

/See Appendix 13, page 42, Table 26.

j See Appendix 13, page 42, Table 27.

- 39 -

(15 per cent), an increase in investment costs (10 per cent), an increasein operating costs (12 per cent) a one year delay in implementation or acombination thereof would not adversely affect the viability of the Project.The sensitivity indicators which range from 0. 19 to 0.51 indicate therelative stability of the EIRR to variations in the aggregate variables tested.

B. Benefits to WSTEC

1. Financial Internal Rate of Return

123. The financial internal rate of return (FIRR) to the capitalinvested in the WSTEC component is 15 per cent, which is consideredsatisfactory. The Project life is assumed to be 25 years and is based onincremental project benefits and costs. Inputs and outputs are valued atmarket prices. The assumptions of analysis are given in Appendix 13, pages30 and 31.

124. The individual internal rates of return for the WSTEC estates,Soap Processing and Coconut Stem Processing subcomponents are 14, 14and 31 per cent respectively, which are also considered satisfactory(Appendix 13, page 41, Table 25). The Project's sensitivity to changes invarious aggregate variables have also been examined. It is clear thatdecreases in benefits (15 per cent), increases in investment costs (10 percent), increases in operating costs (12 per cent), a one year delay inproject implementation or a combination thereof do not adversely affectthe viability of the Project. The sensitivity indicators for the aggregatevariables tested range from 0. 17 to 0. 40 which indicate the relativestability of the Project to adverse conditions.

2. Overall Profit Contributionand Financial Position

125. WSTEC contributes 'n a special manner to the economic develop-ment of Western Samoa. As a wholly-owned government enterprise, it isrequired to transfer its annual unappropriated profits to the Western SamoaTreasury for the welfare and economic and social benefit of Western Samoa.WSTEC's ability to generate profits is important to Western Samoa in thatit provides another source of revenue for the Government particularly inthe form of foreign exchange. Over the economic life of the Project (25years), WSTEC's acfmulated reserves will increase from WS$5. 2 millionto WS$58. 0 million.-'

j/ See Appendix 12 for WSTEC's Projected Financial Statements,1979 -2006.

- 40 -

126. Long-term projections demonstrate that WSTEC has the capacityto carry the debt required to undertake substantial development activities

in the early stages, which will make it a long term viable and profitable

government enterprise and an important contributor to the overall economy

of Western Samoa.

C. Social Imrpact of the Project

1. Benefits to Smallholders

127. The smallholder sector will benefit from the Project due to thedevelopment of high-yielding varieties and improved cultural practices

which will enhance the opportunities for earning higher incomes from

farming. The establishment of a more effective extension service together

with the strengthening of the applied research capability in the country will

ensure opportunities for higher incomes in the rural sector and better income

distribution in the country. In this regard, the demonstration value of the

WSTEC developments is also expected to have a salutary effect.

2. Employment Effects

128. About 300 additional permanent employment opportunities inWestern Samoa will be created as a result of the Project. In addition, the

incremental labor demand during Project implementation is about 85, 000

man-days annually. This benefit is of considerable significance to Western

Samoa in view of the growing labor force and under-employment in the

country, particularly since the bulk of the increased demand for labor is in

the part-time or seasonal category, which is well suited to Samoan rural

conditions.

- 41 -

VI. CONCLUSIONS AND RECOMMENDATIONS

129. The development of the agricultural sector has been accorded

high priority by the Government of Western Samoa. The Project combines

assistance to WSTEC for the rehabilitation and development of seven ofits

estates on Upolu, expansion of its processing facilities and management

support, with assistance to DOA for the provision of facilities and expertise

to strengthen the country's research capabilities and improve the quality of

the extension service on both Upolu and Savai'i Islands.

130. The Project is expected to increase the annual production of

copra, cocoa, soap, coconut wood by-products and beef by $7. 5 million

at full development, and will improve the farm incomes of smallholders.

It is expected that the Project will have an impact on virtually two-thirds

of the population who depend on agriculture for their livelihood.

131. The Project is technically feasible, economically viable and

socially desirable. The organizational and institutional arrangements for

the Project are satisfactory.

132, The total cost of the Project is estimated at $10.8 million

equivalent, of which $7. 0 million is the foreign exchange cost. Of this

amount IDA and ADAB have agreed in principle to finance $2. 0 million

each on a loan and grant basis respectively. The Bank will administer

the IDA credit and ADAB will administer its own grant funds under an

agreement between the Government and ADAB, satisfactory to the Bank.

133. The Project is suitable for a Bank loan from its Special Funds

resources in the amount of $3. 0 million. The Borrower will be the

Independent State of Western Samoa.

134. In addition to the standard provisions and requirements con-

tained in the loan agreements of the Bank, specific assurances were

obtained from the Government and concerned agencies on the following:

(i) The WSTEC component of the Project shall be carried

out by the Project Office already established to imple-

ment the WSTEC Agricultural Development Project

financed under Bank Loan No. 338-SAM(SF). The

Project Manager of this Project Office shall also be

responsible for the day-to-day activities and execution

of the proposed WSTEC component of the Project

(Loan Agreement, Schedule 6, para. l(a));

- 42 -

(ii) Upon loan effectivity, the Borrower shall establishwithin the principal office of DOA at Apia, a ProjectOffice to implement the Agricultural Research andExtension component. The Project Office will beheaded by a Project Manager at the Assistant Directorlevel. The Project Manager will be assisted by a full-time Deputy Project Manager, who will be appointedsimultaneously with the Project Manager. The ProjectOffice shall be staffed with adequate technical andclerical staff (Loan Agreement, Schedule 6, para.1 (b));

(iii) The Borrower shall ensure that the goods imported intoWestern Samoa by WSTEC for the purpose of the Projectshall be exempted from the payment of customs duty(Loan Agreement, Schedule 6, para. 4);

(iv) The Borrower shall take expeditious and appropriateaction to review the position classification of theextension service personnel of the DOA with a view toupgrading these positions in order to recruit and retainqualified extension workers (Loan Agreement, Schedule6, para. 7); A

(v) The Borrower shall ensure that the research facilities tobe established at Vaia'ata and Asau on Savai'i under therecent IDA loan shall be available to DOA for use ascrop experimentation/extension centers under the DOAcomponent of the Project (Loan Agreement, Schedule6, para. 8);

(vi) The Borrower shall appoint a suitably qualified personto the position of Assistant Director - Research andTechnical Services in DOA, which is established andremains vacant (Loan Agreement, Schedule 6, para.1 (c)); and

(vii) The Borrower shall ensure that the Project facilitiesare properly operated and adequately maintained, andfor this purpose, shall make adequate and timely pro-vision of necessary foreign exchange for the purchaseof materials and spare parts required for the properoperation and maintenance of all equipment and facilitiesof the Project (Loan Agreement, Schedule 6, para. 9).

43 -

APPENDIXES

Appni Page

1 WSTEC Organization Chart 44

2 WSTEC Financial Statements - 1973-78 45

3 Organization of the Department of Agricultureand Forests 47

4 Land Use Pattern of Seven Estates 50

5 Facilities to be Provided 52

6 Terms of Reference for the Consultants 58

7 Maps Showing Research and Extension Centerson Upolu and Savai'i 63

8 Details of Project Cost Estimates 65

9 Project Implementation Schedule 76

10 Loan Allocation by Category and Source ofFunds 80

11 Compliance with Bank' s Earlier Covenants 81

12 WSTEC' s Projected Financial Statements,1979-2006 83

13 Assumptions and Computations UnderlyingFinancial and Economic Analyses 86

ORANZATION CHART OF WESTERN SAMOA TRUST ESTATE CORPORATION

GCENES L %IANAGER|Hi. A- ,z l Mw. 3.P.

MtDaloEln 3JlV(CNhaLMQAb*U,L Puawd. Swht T..fduLa Lqa fktr I m l .. tuf, 1..L . _ _ _

--

- -- u I

,. S f

i, "|i : ktmm .:f:' i. It.qn -I

3. 1 rp - al C 2 -. r - Q, j,, u t.P. 2., I A C S.-cnUaT I . flw.,&C i. -kc S Ai--.dI -LaPh.l - !

5 1 J 2 b I j,AVWId- N -. -W II

4. .y(oT)p..W.A. wmI.s

A~~~* P, Ckp i

- Us Auaby

Refere nce in text: page 6, para. 20 5. ..r

WESTERN SAMOA TRUST ESTATES CORPORATIONINCOME STATEMENTS

-1973-1978(WS$)

-- 93 1974 % 5IV ._1Z 1978X WS$ % S$

Gross Margin

CroiP s & LivestockCoconut 959769 54 460,995 84 274,595 72 134,660 30 295,611 23 276,153 24Cocoa 199304 11 118,193 22 11,367 3 55,278 12 514,273 41 393,256 35Coffee (798) - (4,580) (1) (5,369) (1) 16,942 4 8,717 1 14,774 1Banana 520 - 5,879 1 479 - 11,071 2 5,210 1 21,697 2Meat & Livestock 6 6. 62) (Z) 2O7 66526 14 2L6 1 9

102,142 58 567,513 104 2609412 69 284,477 62 916,947 73 801,746 71Ar-Industries.

Timber - - - -. 40,922 3 37,050 3Wood By-Product - - 1,543 -

Feedmill 19403 - 8,980 1Piggery - - - - - - - - 6,282 - h

Hides 7,149 4 2,831 1 914 - 4,337 1 1,397 - 12,460 1Store 13,962 8 (79,503) (15) 33t897 9 45,519 10 78 092 6 98,895 9Service Station 737 - (9,685) ( 2) 69041 2 29,136 3 42 139 3 179736 2Engineering Shop 69991 4 11527 2 19685 - 14,768 1 34,636 3 12,616 1Axfciilary Services 73,208 4 (236) - (2,p539) (1) 3,468 1 ) 109,O56 9 118,903 11Miscellaneous Income 32,075 18 27,144 5 56,164 15 45,547 10 )

Soap Factory __6n823,81526 28 858 6 3 62 3 12 12-6. __ - D - 1 1

Total -gross Profits 177,128 100 547,060 100 380,389 100 456,090 100 19264,354 100 1,128,923 10 0

Administration Costs 68 24 1,0 33 1150 16 25 23Margin Before Tax 108t448 61 415,258 76 253,308 67 341,055 75 ltO67,991 84 873,748 77Tax 4204 25 217.013 40 7.57.3 3 23.93 2 2

Net Profit -22a. 733 1 3456 2 62 315.405 ,8 849,816 5a

Profit before tax assreturn to total capital-employed 3.6% 13% 7.9% 9.3% 20.2% 13.5% (D

Rents, commissions and interest receivable on bank deposits.,'/ 9.0% of total cost of sales.

Reference in text: page 7, para. 25

WESER SAMOA TRUJST E§ZtAES CORPORATIOBQALACE SHEETS,

1273 1974 1975 1976 1977 1978

Fixed AssetsEstate land and buildings 1,220,379 1,272,995 1,2839816 1,709,510 2,2149730 3,176,028Estate plant, equipment & improvements 186,457 185t952 196,799 570,093 1,604,928 2t072,571Leased land, buildings & improvements 122,961 122,648 122,446 - - -

Soap factory buildings and plant 98,992 929797 90,983 - - -

Other lands buildings and equipment 367,849 321,188 282,094 - -

Deferred debts owing by Government 433..200 567 3376 32 , 412 0 228 636Total Fixed Assets 23 38 2.333 2 31 260 4 231.668 23

Current AssetsCash at bank and on deposit 20,000 125,264 145,385 457,325 1381LO 75t242

Stocks 279,538 583,051 576,489 413,904 703,729 752,440

Debtors1 pre-payments, etc. 295 809 154.011 --213.362Total Current Assets 862.326 8 3. 84 1 0641 1 032

Total Assets 3.031.185 31195.473 3 3,671.546 5 24 6J 62468LO08

LiabilitiesCurrent 305,992 322,991 111,253 66,286 3159395 540,164Long-term - - - 255,000 322,129

Share Capital 1,221,340 1,221,340 19221,340 1I221,340 1,221,340 1,397,185Reserves 15 8 .5428Reevs15 3.85 1,651j142 1 874-- 2383.920 3492,630 4208 30

Total Liabilities and Capital 3.031.185 3,195.43 3 2.3262 1&46 5243 60

Current Ratio 2:1 2.7:1 8:1 16:1 3,3:1 L18:1Equity (%) (Capital & Reserves: Total Assets) 90% 90% 97% 98% 89% 87%Fixed Assets/Total Assets 80% 73% 72% 71% 80% 85%

R e iReference in text: page 7, para. 25 N1

0 .

I I

ORGANIZATION OF THE DEPARTMENT OF AGRICULTURE AND FORESTS

CABINE

MINISTER

Department of Department of Agriculture Boards:Meteorology and Hydrology and Forets Agrostore, Economic Development

DIRECTOR

BOARD AND COMMITTEES

DEPUTY DIRECTOR DEPUTY DIRECTOR IBanana, Agrostore,(SAVAI'I) IUPOLU) b-Aosre

(SAVI'I (UPLU)Developtnent Bank,Handicrafts Corp.,L Land Boards: Stes.,

Agriculture AdvisoryCommittees

Economic Analysis Research and Extension andand Planning Technical Services lnfor-ation Regulatory Servics ForestryServices

L g >Accounts

Administration W

Reference in text: page 8, para. 26

ORGANIZATION OF THE RESEARCH AND TECHNICAL SERVICES DIVISION

Assistant Director

RESEARCH AND TECHNICALSERVICES DIVISION

Chief Chief Chief ChiefLivestock Officer Crops Officer Agricultural Engineer Food Technologist

LiVETCKSCICOSSCINAGRICULTURAL FOODLIVESTOCK SECTION CROPS SECTION ENGINEERING SECTION PRESERVATION SECTION

ri | Xr I *1 rI i |1Senior Senior Senior Senior Senior Senior Senior Senior

Livestock Animal Health Crops Crop Protection Agricultural Agricultural Project FoodOfficer Officer Officer Officer Engineer Engineer Officer Technologist

ANIMAL I NIMAL CROP CROP SMALL SCALE LARGE SCALE PRJCSFOODPRODUCTI ON HALTH PROTECTION PROTECTION AGR..MACH. AGR. MACH. PRE~SRATION

REJSEARCH

Superintendent Superintendent Supervisor Supervisor

ADMIN6STTION ADMINIRATION ADMINISTRATION ADMINSTRATIONOF OF OF OF ' P

LIVESTOCK CROP TECHNICAL TECHNICAL M -lFARMS FARMS SERVICES SERVICES M CD

Reference in text: page 9D para. 28

ORGANIZATION O' THEEXTENSION AND INFORMATION SERVICES DIVISION

Assistant Director

EXTENSION AND INFORMATIONSERVICES 0IVISiON

ChMf ChiefAgricultural Officer Agriculturri Officer

SAVAI'I SECTION UPOLU SECTION

Senior Senior Senir Scniu SeniorAgricultural Officwr Agricultural Officer Infornatian Officer Agricultra Officer Agricultural Officer

SOUTH-WEST SAVAI'l NORTH-EAST SAVAI'l SRIN ESRMATIO H and REST OF UPOLU

RAPIA URBAN AREA

Agricbtural Agricultural Agricultural Agricutiuml Infornmtion Information Agicrstuj Agricultural Agricultural AgriculturalOfficer Offir.r Officer Officeu Offece Offie Offcer Officer Officr Officer

SAVAI'l SAI SAVAI SAVAII APIA URA NOTWS PLU UPOLU

1S5UTH WEST NORTH EAST AAI 'I AREA UPL U EAST WEST

RpQ

Reference in text: page 10, para. 30

LAND USE PATTERN OF SEVEN WSTEC ESTATESON UPOLU AND PROPOSED ACTIVITIES

(Acres)

TotalTuanal Tafai- Project

Vaipapa Tausagi Faleata Casala imato Lesea gata Area

Coconuts

Coconuts & Grass 1, 635 790 1, 128 293 - - - 3,846Coconuts & Cocoa - - - 82 100 150 693 1,025Coconuts & Coffee - - 17 59 - - 76

Total 1, 635 790 1,128 392 159 150 693 4,947

Proposed ActivitiesReplant Coconuts 1,000 1,000Fertilize Existing

Coconuts 635 790 1, 128 392 159 - 693 3, 797Pasture Improvement 300 490 790

Cocoa

Mono Cocoa - - - - 830 74 - 904Cocoa & Coconuts - - - 82 100 150 693 1, 025

Total - - 82 930 224 693 1, 929 J .

OQProposed ActivitiesPlant Cocoa 320 350 150 180 1,000 IIFertilize Existing Cocoa 82 930 74 693 1, 779

Reference in text: page 19, paras. 59 and 61

k4 a.K

LAND USE PATTERN OF SEVEN WSTEC ESTATESON UPOLU AND PROPOSED ACTIVITIES

(Acres)

TotalTuana' Tafai- Project

Vaipapa Tausagi Faleata Casala imato Lesea gata Area

Coffee

Mono coffee 75 - - 75Coffee & coconuts - - - 17 59 - - 76

Total - - 17 134 - - 151

Bananas

Mono Bananas 120 - - - - 25 - 145 Ln

Macadamia (coconuts) - - - (96) 104 - - 200

Nutmeg - - - 4 - - 4

Waste Land 180 250 - 32 - - - 462

Total Areas ofPlantation 1,935 1,040 1,128 424 1,172 249 693 6,641

a/ The total area of all seven estates is 6, 641 acres, when double counting is excluded.

mI.

- 52 - Appendix 5Page 1

FACILITIES TO BE PROVIDED - PART A.: WSTEC

A. VAIPAPA ESTATE

1. Civil Works

a. 8.3 miles new fencing and 27 miles refencingb. Provision domestic and livestock water supply piping,

tanks troughs, pump and pump housec. Construct 2 miles new roads and upgrade 5 milesd. Provide gates and cattle gridse. Construct managers' and overseers' houses, labor

quarters, office/store, copra shed and copra drierand tractor shed

2. Equipment

a. Six-ton cattle truck - 1 unitb. Nine-ton dump truck - 1 unitc. 3/4 ton pick-up - 1 unitd. Slashere. Fertilizer spreaderf. Spare partsg. Livestock equipment

B. TAUSAGI ESTATE

1. Civil Works

a. 4.5 miles new fencing and 15 miles refencingb. Provision of domestic and livestock water supply tanks,

piping, troughs, pump and pump housec. Construct 1 mile new road and upgrade 6 milesd. Provide gates and cattle gridse. Renovate managers' house, construct labor quarters,

office/store, copra shed and tractor shed

2. Equipment

a. Six-ton hiside truck - 1 unitb. 3/4 ton pick-up - 1 unitc. 70 HP tractor - 1 unitd. Six-ton trailere. Fertilizer spreaderf. Spare partsg. Livestock equipment

R eference in text: page 19, para. 59page 21, paras.68 and 70page 22, para. 77.page 24, para. 82

. ..- -.- - --.-... . . - - -

- 53 Appendix 5Page 2

C. FALEATA ESTATE

1. Civil Works

a. 2.9 miles new fencing and 11.2 miles refencingb. Provision of domestic and livestock water supply tanks,

piping, troughs, pump and pump housec. Construct.2 miles new roads and upgrade 5 milesd. Provide gates and cattle gridse. Build overseer's house, labor quarters, office, copra

shed and copra drier

2. Equipment

a. Six-ton stakeside truck - 1 unitb. Nine-ton.dump truck - 1 unitc. 3/4 ton pick--up - 1 unitd. 70 HP tractor - 1 unite. Six-ton trailer - 1 unitf. Slasher - 1 unitg. Fertilizer spreader - 1 unith. Spare partsi. Livestock equipment, dip, crush and head bail, portable

scale and fencing equipment

D. CASALA ESTATE

1. Civil Works

a. 1 mile new fencing and 4.2 miles refencingb. Provision of-domestic and livestock water supply tanks,

piping, pump, pump house and troughsc. Construct 2 miles new road and upgrade 5 milesd. Provide gates and cattle gridse. Build manager's house, labor quarters and office/store

2. Equipment

a. Three-ton lowside truck - 1 unitb. 3/4 ton pick-up - 1 unitc. H/D spring release cultivator - 1 unitd. Slasher - 1 unite. 70 HP tractor - 1 unitf. 3.5-ton trailerg. Spare partsh. Livestock equipment

54 - Appendix 5Page 3

E. TUANA'IMATO ESTATE

1. Civil Works

a. 2.1 miles new fencing and 6.3 miles refencingb. Domestic water supply tanks, pipingc. Construct 1.5 miles new roads and upgrade 6 milesd. Provide gatese. Build overseer's houses, labour quarters and office/store

2. Eguipment

a. Six-ton stakeside truck - 2 unitsb. 3/4 ton pick-up - 1 unitc. 70 HP tractor - 2 unitsd. Six-ton trailer - 2 unitse. Slasher - 1 unitf. Spare,partsg. Coffee processing equipment

F. LESEA ESTATE

1. Civil Works

a. 0.5 miles new fencing and 2 miles refencingb. Domestic water supply tanks, piping, pump and pump housec. Upgrade 1 mile of roadd. Provide gatese. Build manager's house, labour quarters an'd office/store

2. Equipment

a. 3/4 ton pick-up - 1 unitb. Spare parts

G. TAFAIGATA ESTATE

1. Civil Works

a. Two-miles refencingb. Domestic and processing water supply tanks, piping, pump

and pump housec. Construct 0.5 miles new road and upgrade 6 milesd. Provide gatese. Build overseer's house, labour quarters and office/store

Appendix 5Page 4

2. Equipment

a. Six-ton hiside truck - 1 unitb. 3/4 ton pick-up - 1 unitc. 70 HP tractor - 1 unitd. Six-ton trailer - 1 unite. Slasher - 1 unit.f. Spare parts

H. WSTEC OVERALL

1. Civil Works

a. Construction of cocoa and copra storage sheds, banana shedb. Construct 2 miles new roads and upgrade 4 miles

2. Equipment

a. 3/4 ton pick-up - 3 unitsb. 6 ton hiside truckc. 70 HP tractord. 6 ton trailere. Spare parts

I. SOAP PROCESSING

1. Civil Works

a. Factory building (same size and adjacent to the existingfactory building)

b. Mezzanines, floors, walls, woodwork, etc.

2. Equipment

a. Steam boiler, 2,000 kg/h capacityb. Jacketed soap storage tank (10,000 liters)c. Soap granulator (2 ton/hour capacity)d. Laundry soap finishing line., consisting of:

1 stainless steel amalgamator1 existing four-roller mill1 soap plodder1 cutting machine

e. Toilet soap finishing line, consisting of:

1 amalgamator1 existing duplex refiner1 simplex plodder with refiner roll1 cutter1 stamping machine4 moulds, engraved as required

- 56 - Appendix 5Page 5

f. Detergent/soap powder plant, consisting of:

1 vibration screen, dustproof covered1 spray mixer, stainless steel1 pressure proof WAS liquid container, stainless steel1 dust absorber2 silos with mucon valve, PE2 Tilting cars1 electric hoist1 scale, fully automatic1 filling device

g. Soap Pumping System, stainless steel consisting of:

1 submersible soap pump with motor and hoist andspare parts

h. Pipes, valves, conveyors and fittings

i. Three-ton truck - 1 unit

j. 3/4 ton pick-up - 1 unit

3.' Experts

a. Building erection engineer (2 man-months)b. Engineer for machinery assembly (4 man-months)c. Expert for start-up and training (6 man-months)

J. COCONUT STEM UTILIZATION

1. Civil Works

a. Site work (log yard and timber yard improvement)b. Alteration and foundation to sawmill buildingc. Extension to drying shed roof and concrete apron for treatment plant

2. Equipment

a. Circular headrig with rail-mounted log carriage and electric motorb.. Docking sawc. Maintenance parts for existing benchsaw and spare sawsd. Electrical equipment including switchboards, grinding wheels

and toolse. Six-ton log truck with three-ton crane and winchf. Three-ton delivery truckg. Chainsaws and sparesh. Treatment plant replacement parts, spares and tools

57 -Appendix 5Page 6

FACILITIES TO BE PROVIDEDPART B : AGRICULTURAL RESEARCH AND EXTENSION

1. Civil Works

a. Central Agricultural Extension Training Center at Nu'u -

3,600 ft and facilities

b. 21 Field Extension Centers - each station 1272 ft2 and facilities

c. Field Laboratory Building at Togitogiga Crop Experimentation Center600 ft2 and facilities

d. Plant Propagation Unit at Togitogiga Crop Experimentation Center

e. Two Modular House Units and facilities at Nu'u Agricultural Station

f. Upgrading of Siumu and Palauli - West Field Extension Centers

2. Vehicles

a. 2 - four-wheel drive Jeepsb. 12 - four-wheel drive Small Jeep-Trucksc. 1 - four-wheel drive Double Cab vehicle

3. Machinery and Equipment

a. One Audio-visual aid unit comprising - Cine/Overhead Projector,Screen, Slide Projector, Blackboards, Tape recorder, etc.

b. Two 65 HP Tractors, Trailers and Implements

c. Laboratory Equipment and Furniture for Togitogiga Crop ExperimentationCenter

d. Farm implements for 23 Field Extension Centers

e. Office Equipment for Project Office

- 58 - Appendix 6Page I

Terms of Reference for the Consultants

The following terms of reference are proposed for the consultants.These terms of reference may be subject to further refinement at the timeof recruitment.

A. Consultants for Part A * WSTEC

1. Financial Controller (24 manmonths)

This consultant will be required continuously for a period of24 months. His main responsibility will be to assist WSTEC with long-term financial planning and cash management. He will report directly to theGeneral Manager of WSTEC and will:

(i) examine WSTEC's annual budget preparation activitiesand introduce refinements as necessary;

(ii) develop the necessary steps for the preparation of afive-year development and operating plan for WSTEC,including an accompanyiiig financial plan;

(iii) evaluate WSTEC's operating performance against theannual budget targets and report variances tomanagement;

(iv) supervise the treasury and accounting functions ofWSTEC; and

(v) develop a suitable training program to upgrade thequalifications of local accounting staff.

2. General Plantation Administrator (24 manmonths)

This consultant will be required for a continuous period of24 months. His main responsibility will be .to supervise the operationof all of WSTEC plantations. He will report directly to the GenoAralManager and will:

(i) examiinie the plantation operations of WSTEC and identify anyconstraints limiting production;

(ii) institute measures for overcoming these constraints byreorganization of plantation operations, includingfertilizer application, as required;

(iii) establish long-term plantation development plans, takinginto account land use potential and possibilities forintensifying agriculture;

(iv) estimate costs and supervise the budgetinIg for these plans;

Reeference in text: page 23, para. 80page 24, para. 84page 25, para. 88

- 59 - Appendix 6Page 2

(v) assist in the day-to-day operations of the plantation and

train local staff in plantation management; and

(vi) establish a system of monitoring on-going and planned

plantation activities to assist WSTEC Management in the

long term.

3. Sawmill Management Specialist (for the Coconut Stem

Utilization Facilities) (12 manmonths)

This consultant will be required for a continuous period of

12 months. His main responsibility will be to assist WSTEC with mill

expansion, installation of equipment and start-up of the improved mill.

He will report directly to the General Manager of WSTEC and will:

(i) assist local engineers in the proper installation of the

milling equipment to assure efficiency in the process flow;

(ii) prepare, in consultation with WSTEC management, plans whichwill meet the demand for various coconut timber products,

and which specify in detail the raw materials, fuel and

personnel required;

(iii) prepare and implement, in close cooperation with the localsupervisors, plans for running the mill and the impregnationplant;

(iv) select and train qualified local workers in milling and treat-

ment operations,,particularly in saw maintenance, sawing

techniques to improve lumber recovery, sorting, yard handling,

and quality control;

(v) perform other tasks related to mill operations, which the

WSTEC management may require; and

(vi) at the end of his term, to submit a report to WSTEC manage-

ment on mill performance, including specific recommendationsfor further improvements in mill efficiency.

4. Coconut Estate Technician (24 manmoilths)

This technician will supervise the.coconut planting program,

including the establishment of a nursery, the preparation of the area

to be planted, fencing, transplanting seedlings, fertilizing, pest and

disease control, and general maintenance of the planted area. He will

also supervise the fertilizer application program for existing coconuts

and provide on-the-job training for counterpart staff.

5. Cocoa Estate Technician (24 manmonths)

This technician will supervise the cocoa planting program

including establishing a nursery, preparation of the area to be planted,

60 - Appendix 6Page 3

fencing, transplanting seedlings, pest and disease control, fertilizingand maintenance. He will also supervise the fertilizer application programfor existing cocoa, and provide on-the-job training for counterpart staff.

B. Consultants for Part B : Agricultural Research and Extension

The following general terms of reference are proposed forthe consultants. These terms may be subject to further refinement at thetime of recruitment.

1. Extension Program Organizer (48 manmonths)

This consultant will be required for a continuous period of48 months. His main responsibility will be to assist the Department ofAgriculture and Forests to plan, organize and implement an efficientextension service. In working towards these objectives, the consultantwill:

(i) examine the current agricultural (including livestock)extension activities in Western Samoa and identify anyconstraints limiting the effectiveness of the extensionservice;

(ii) make proposals to the Government for overcoming theseconstraints and assist in the planning and implementationof a program designed to obviate these problems;

(iii) organize and conduct in-service training programs forfield extension workers, agricultural officers andfarmers;

(iV) develop suitable curricula and materials for trainingfield extension workers, agricultural officers andfarmers;

(v) develop suitable mass-media communication materials forstrengthening the field level extension program;

(vi) formulate and implement an extension program appropriateto the conditions of Western Samoa to accelerate theadoption of modern farm technology and better farmingpractices;

(vii) select suitable candidates for overseas fellowshiptraining under the Project and provide appropriateorientation before the commencement of this training;

(viii) assist in the development of the National ExtensionTraining Center at Nu'u and the Field Extension Centersbeing established under the Project; and

(ix) assist the Economic Analysis and Planning Division ofthe Department of Agriculture and Forests in planning andexecuting a benefit monitoring system for the AgriculturalResearch and Extension component of the Project.

- 61 - Appendix 6Page 4

2. Tree Crop Agronomist (36 manmonths)

This consultant will be required for a continuous period of36 months. His main responsibility will be to assist the Departiment ofAgriculture and Forests to plan, organize and conduct agronomicinvestigations into the problems and potential for commercial cultivationof crops such as coffee, rubber, oil palm and spices. In working towardsthese objectives, the consultant will:

(i) collect and report on the problems and potential ofcultivating coffee, rubber, oil palm and spices inWestern Samoa, after taking into account local ecologicalfactors;

(ii) make proposals for the improvement and expansion ofexisting coffee plantations and initiate suitable programstowards this end;

(iii) import suitable planting materials for coffee, rubber,oil palm and spices ad-dconduct investigations into their

suitability for commercial cultivation;

(iv) draw up and initiate suitable agronomic investigations,such as spacing, fertilizer and plant protection trials,

particularly for coffee but also for other tree cropsbeing introduced;

(v) assist in the organization and implementation of treecrops pilot projects for smallholders and plantationorganizations in the country;

(vi) propose an economic land use map for tree cropcultivation in Western Samoa;

(vii) train local staff in conducting tree crop research; and

(viii) assist in the selection of suitable candidates-for overseastraining under the Project and make arrangements at suitableoverseas institutions for training in tree crop agronomy.

3. Banana Agronomist (36 manmonths)

This consultant will be required for a continuous period of36 months. His main responsibility will be to assist the Department ofAgriculture and Forests to plan, organize, and conduct agronomic inves-tigations into the problems and potential for the commercial cultivationof bananas and other fruit crops such as mangoes, pineapples, passionfruit, a;.,Lado, macademia nuts, citrus etc. In working towards theseobjectives, the consultant will:

-62 Appendix 6Page 5

(i) collect and report on the available information on theproblems and potential for cultivating bananas and theother fruit crops mentioned above;

(ii) make proposals for the improvement and expansion ofexisting banana plantations and initiate suitableprograms towards this end;

(iii) conduct suitable agronomic investigations, such asspacing, fertilizer and plant protection trialsparticularly for bananas but also for other fruit crops;

(iv) provide information to the extension service and assistin the organization and conduct of extension programs inimproved techniques.for banana cultivation and also forthe other fruit crops investigated;

(v) assist in the organization and implementation of pilotprojects for the expansion of banana and other fruit cropcultivation by smallholders and plantation organizationsin the country;

(vi) make an evaluation of the soil and climatic suitabilityfor the commercial cultivation of bananas and other fruitcrops in Western Samoa;

(vii) make an economic land use map for orchard farming inWestern Samoa and provide a comprehensive report on theproblems and potential for large scale fruit farming;

(viii) train local staff in conducting horticultural research;and

(ix) assist in the selection of suitable fellows for overseastraining under the Project and make arrangements at suitableoverseas institutions for training in horticultural science.

.- -;...; .. ,'; . .

1.- ., -- w 1710 45'W 1710 30'W

UPOLU - LOCATIONY OF RESEARCH AND FIELD EXTENSION STATIONS

13045S 13045S

GAGA'EMAU,-GA

'USOGA

, ' ,=,! ,. ' A'N| AET VAM UA FA/ LL IT PAIUG ,',.0T,''.

0FGanws -AMATAUA PIo LEPA ALAE--AT

G Nuu Ariultural Orch Station

|: S h\~~ Togltoglb Crop Development Center ;- 0f

0 9 Olo Coconut Sed Garden

@ VallelFALAT PasMr Re-at

* WEST EAST~ton

A -- - .. wdn - -... .. -. ..- ,t~ , ;CLE - .

',, -- Falpub lleDstit -wnr -, V z , - = 10^ MILES

- , , , , , -, 17tl4' 1, ,,0,,, , , e , 7145W, ,, ,, '71 0 30'W

Reference in text: page 2 5 ,para. 87

172045'W 172°30'W 1720 15'W

SAVAII -LOCATIONS OF RESEARCH AND FIELD EXTENSION STATIONS

13030'5 130305S

VAISAGANO EAST *

/ GAGAIFOMAUGA GAGAEMAUGA

SATUPA'ITEA

SALEGA /n

APALAULI WEST k C

SCALE FALEFA0 12 3 4 5 10 23 i LELELOGA

! g- - * i 13030'5MOILES

LEG EDN.,

A Valaata Crop Development Center

A Asao Crop Development Center

- -Existing Station

- l O Proposed Station

Require Upgrading

Political District BoundaryFalpule District Boundary -172030'W 172015'W

- 65 - Appendix 8Page 1

DETAILS OF PROJECT COST ESTIMATESPART A WSTEC

(WS $ '000)Foreign Local Total

I. Facilities by Estate:

Vaipapa Estate

1. Civil Works 209.2 335.1 544.3

(i) Fencing

27 miles of refencing8.3 miles of new fences

(ii) Water Supply

Pump house; tanks; troughs

(iii) Roads

Upgrade 5 miles; New Cons-truction 2 miles; gates& cattle grids.

(iv) Buildings

Staff housing; labourquarters; Office/store;copra shed; tractor shed;copra drier

(v) Replanting Coconuts

2. Equipment 42.0 17.5 59.5

(i) 6 ton cattle-truck(ii) 9 ton dump truck

(iii) 3/4 ton pick-up(iv) slasher(v) Fertiliser spreader

(vi) Spare parts (20%)(vii) Livestock Equipment; ramp,

holding yard and bail

Total - Vaipapa 251.2 352.6 603.8

Reference in text: page 26, para. 90

- 66. - Appendix 8Page 2

(WS $ '000)Foreign Local. Total

Tausagi Estate

1. Civil Works 60.9 105.1 166.0

(i) Fencing

15 miles refencing;4.5 miles new.fences.

(ii) Water Supply

Pump house; tank; troughs

(iii) Roads

Upgrade 6 miles; New construct-ion - 1 mile; Gates & Cattlegrids

(iv) Buildings

Renovate Manager's House;Labour Quarters; Office/Store;Copra shed; Tractor shed

2. Equipment 48.7 18.2 .66.9

(i) 6 ton hiside truck(ii) 3/4 ton pick-up

(iii) 70 HP tractor(iv) 6 ton trailer(v) Fertiliser spreader

(vi) Spare parts(vii) Livestock equipment

Total - Tausagi 109.6 123.3 232.9

- 67 - Appendix 8

Page 3

(WS $ '000)Foreign Local Total

Faleata Estate

1. Civil Works 67.7 125.5 193.2

(i) Fencing

11.2 miles refencing;2.9 miles new fences.

(ii) Water Supply

Pump house; tanks; troughs

(iii) Roads

Upgrade 5 miles; New cons-truction - 2 miles; Gates &Cattle grids

(iv) Buildings

Overseer's house; labourquarters; office; Coprashed; copra drier.

2. Equipment 71.5 21.1 92.6

(i) 6 ton stakeside truck(ii) 9 ton dump truck

(iii) 3/4 ton pick-up(iv) 70 HP tractor(v) 6 ton trailer

(vi) slasher(vii) Fertiliser spreader

(viii) Spare parts(ix) Livestock equipment (Yard, dip

modification, crush & headbail, portable scale and fencingequipment)

Total - Faleata 139.2 146.6 285.8

-68Appendix 8Page 4

(WS $ '000)Foreign Local Total

Casala Estate

1. Civil Works 37.8 84.7 122.5

(i) Fencing

4.2 m. refencing;1 m. new fences.

(ii) Water Supply

Pump house; tanks; troughs

(iii) Roads

Upgrade 5 miles; New cons-truction - 2 miles; Gates;Cattle grids

(iv) Buildings

Manager's house; Labourquarters; Office/Store

2. Equipment 44.7 5.7 50.4

(i) 3 ton lowside truck(ii) 3/4 ton pick-up

(iii) spring release cultivator(iv) Slasher(v) 70 HP tractor

(vi) 3.5 ton trailer,(vii) Spare parts(viii) Livestock equipment

Total - Casala 82.5 90.4 172.9

69 Appendix 8

Page 5

(WS $ 1000)Foreign Local Total

Tuana'imato

1. Civil Works 42.9 98.8 141.7

(i) Fencing

6.3 m. of refencing;2.1 m. new fences.

(ii) Water Supply

Tanks

(iii) Roads

Upgrade 6 miles; new cons-truction - 1.5 miles; Gates.

(iv) Buildings

Overseer's house; labourquarters; Office/Store

2. Equipment 107.6 12.9 120.5

(i) 6 ton stakeside truck (2 units)(ii) 3/4 ton pick-up

(iii) 70 HP tractors (2 units)(iv) 6 ton trailers (2 units)(v) Slasher(vi) Spare parts

(vii) Coffee Processing equipment

Total - Tuana'imato 150.5 111.7 262.2

-7) Appendix 8

Page 6

(ws $ '000)Local Total

Lesea Estate

1. Civil Works 25.2 48.1 73.3

(i) Fencing

Refence 2 miles;0.5 m. new fences.

(ii) Water Supply

Pump house; 5,000 gal., tanks

(3 units)

(iii) Roads

Upgrade 1 mile; Gates

(iv) Buildings

Manager's house; Laboi;rquarters; Office/Stor

2. Equipment 7.8 1.0 8.4

(i) 3/4 ton pick-up(ii) spare parts

Total - Lesea 33.0 49.1 82.1

Tafaigata Estate

1. Civil Works 28.7 66.2 94.9

(i) Fencing

Refence 2 miles

(ii) Water Supply

Pump house; tanks

- 71 - Appendix 8Page 7

(WS $ '000)Foreign Local Total

(iii) Roads

Upgrade 6 miles;New - 0.5 miles; Gates

(iv) Buildings

Overseer's house; Labourquarters; Office/Store

2. Equipment 48.4 6.2 54.6

(i) 6 ton hiside truck(ii) 3/4 ton pick-up

(iii) 70 HP tractor(iv) 6 ton trailer(v) Slasher

(vi) Spare parts

Total - Tafaigata 77.1 72.4 149.5

TOTAL - I 843.1 946.1 1789.2

II. WSTEC Overall Facilities

1. Civil Works 80.4 69.6 150.0

(i) Copra storage shed(ii) Cocoa storage shed

(iii) Banana storage shed(iv) Upgrade 4 miles road(v) New road - 2 miles

2. Equipment 62.4 8.0 70.4

(i) 3/4 ton pick-up (3 units)(consultants/ coordinator)

(ii) 6 ton hiside truck(iii) 70 HP tractor(iv) 6 ton trailer(v) Spare parts

TOTAL - II 142.8 77.6 220.4

- 72 - Appendix 8Page 8

(WS $ '000)Foreign Local Total

III. Soap Processing a 699.4 58.9 758.3

IV. Coconut Stem Utilisation- 116.0 24.8 140.8

V. Planting Cocoa 235.4 253.9 489.3

VI. Fertiliser 611.0 218.3 829.3

VII. Water Supply 178.6 18.7 197.3

VIII. Consultants 437.0 83.0 520.0

TOTAL - I-VIII 3263.3 1681.3 4944.6

a/ See Appendix 8 p. 9 for details.

b/ See Appendix 8 p. 10 for details.

- 73 - Appendix 8

Page 9

Equipment, Civil Works and Technical ExpTytisefor the Soap Processing Facilities-

WS$FC LC

1. Equipment

a) steam boiler 2 to/h at 13 atm. incl. waterfiltering and softening plant 47,852

b) submersible soap pump 3,884c) jacketed soap storage tank 10 cbm 19,649d) neat soap expansion drying plant including

prefabricated soap granulation tower,noodle plodder, conveying and coolingplant for soap granules and noodles 178,211

e) laundry soap processing line 76,996f) toilet soap processing line 124,135g) complete powdered detergent production line 73,715h) pipes, valves, conveyors, fittings 16,450 -

i) 3-ton truck 6,284 899j) 3/4 ton pick-up 5,962 855

2. Civil Works

a) prefabricated building with dividing wall 91,390 57,110similar to existing building, length 120ft., width 40 ft. and height 24 ft.

3. Technical Expertise

a) engineer for machinery assembly (4 months) 18,278b) expert for operation, start up and training

(estimated 6 months) 27,417c) building erection engineer 9,139

TOTAL $699,362 $ 58,864

TOTAL $758,226

1/ Supply, installation and start-up of the soap processing facilitieswill be done on a "turnkey basis" after international competitivebidding.

- 74 - Appendix 8Page 10

EQUIPMENT AND-CIVIL WORKS FOR THECOCONUT STEM UTILIZATION COMPONENT

WS$FC LC

1. Equipment

a) Circular heading with rail-mounted $ 47,320log carriage and electric motor

b) Docking Saw 2,730

c) Maintenance parts for old benchsaw andspare saws 2,820

d) Electrical equipment (including switch-boards), grinding wheels and tools 22,300

e) 6-ton logging truck with 3-ton crane andwinch 25,000

f) 3-ton delivery truck 9,000

g) Chainsaws and spares 715

h) Treatment plant replacement parts, sparesand tools 3,185

2. Civil Works

a) Main sawmill building concrete found4tionand spares 1,440 $ 10,310

b) Drying shed roof extension and treatmentplant apron 1,500 10,500

c) Timberyard improvement - 4,000

TOTAL $116,010 $ 24,810

TOTAL $140,820

. .. . ...... . .....

- 75 - Appendix 8

Page 11

COSTS OF AGRICULTURAL RESEARCH AND EXTENSION(Ws$ V000)

Foreign Local TotalComponent Costs Costs Costs

I. CIVIL WORKSCentral Extension Training Centre at Nu'u 48.0 39.0 87.02 Modular Houses at Nutu 90.0 10.0 100.0Farm Manager's House at Asau 19.5 16.0 35.5Field Labs at Togitogiga and Asau 11.4 9.6 21.0PlLant Propagation Unit at Togitogiga 25.0 7.0 32.023 Field Extension Centres 154.1 225.5 379.6

/ 348.0 307.1 655.1

II. VEHICLES2 Short-Wheel Base 4-W Drive Jeeps 13.2 2.0 15.212 Small 4-W Drive Jeep Trucks 58.8 4.8 63.61 4-W Drive Double Cab 6.0 0.8 6.8

78.0 7.6 85r6

III. MACHINERY AND EQUIPMENTFarm Equipment for Extension Centres 8.2 - 8.2Audio Visual Aids for Nu'u Extension Centre 5.0 - 5.02-65 HP Tractors and Attachments 42.0 3.0 45.0Laboratory Equipment 3.0 - 3.0

Office Equipment for Project Office 3.0 1.0 4.061.2 4.0 65.2

IV. OPERATION AND MAINTENANCE0 & M at Togitogiga and Asau 25.0 28.0 53.00 & M for Vehicles 85.0 15.0 100.00 & M at Nu'u Extension Centre - 16.0 16.00 & M at Project Office - 12.5 12.5

110.0 71.5 181.5

V. CONSULTANTSExtension Program Organiser 240.0 100.0 340.0Banana ~,Aror .,list 180.0 75.0 255.0Tree Crop Agronomist 18C..0 75.0 255.0

606.0 250.0 850.0

VI. FELLOWSHIPS120 Man-months 120.0 - 120.015 Man-months Short-term Training 30.0 - 30.0

150.0 - 150.0

VII. CONTINGENCIESPhysical 161.8 128.2 290.0Price 318.8 165.2 484.0

480.6 293.4 774.0

T 0 T A L 1827.8 933.6 2761.4

- 76 -

iMPLEMENTATION SCHEDULE Appendix 9

PART A: WSTEC Page 1

1981 1982 1983 1984 198W

OPERATION 1 2 3 4 3 4 - 2 3 4 1 - - 4- 1 2 - 4

I.Estates

A. Vaipapa

Fencing Wm

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertilising existing coconuts

Replarnting 1000 ac. coconuts

Planting 320 ac. cocoL

Pasture Improvement

B. Tausagi

Fencing

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertiiising existing coconuts

Planting 350 ac. cocoa * *

C. Faleata

Fencing

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertilising existing coconuts |

Planting 150 ac. cocoa

Pasture Improvement

1Refercrnee in text page 32, paras. 101 and 10Z

77 -

Appendix 9Page 2

1981 1982 1983 1984 1985

OPERATION 1 2 3 4 1 2 3 4 t 2 3 4 1 2 3 4 t 2 3 4

D. Casala

Fencing

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertilising Existing Coconuts

Fertilising Existing Cocoa

Planting 180 ac, cocoa I A

E. Tuana'imato

Fencing

Water Supply mm

Roads

Buildings

Vehicles & Equipment

Fertilising Existing Coconuts

Fertilising Existing Cocoa

F. Lesea

Fencing

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertilising 75 ac. cocoa

G. Tafeigata

Fencing

Water Supply

Roads

Buildings

Vehicles & Equipment

Fertilising Existing Coconuts

Fertilising Existing Cocoa

.~ ~~~ L

- 78 -

Appendix 9Page 3

1981 1982 1983 1984 1985

OPERATION- 12A 34 1 2 3 4 1 2 3 4 1 122 343 4 4

II. WSTEC Overall

Storage Sheds

Vehicles

111. Soap Processing

Building

Equipment

Vehicles

IV, Coco-Stem Utiiization

Buildings

Equipment

VeThicles

V, Consultants . . . .

- Appendix 9

IMPLEMIENTATION SCHEDULE p?ge 4

PART B: RESEARCH AND EXTENSION

COMPONENTS 1981 1982 1983 1984 1985

_________________--- - - . . .-- - - - - --i

1. Consultants

Recruitment of consultants

Engagement of consultants

(a) Extension Program Organizer - - f -- - -

(b) Tree Crop/Horticulture Agronomist U U E U U U E U U I

2. Overseas Training

Degree/Diploma level training U E - E u .....

Short term training E i

3. Civil Works

Construction of Nu'u Extersion Center

Construction of field lab at Togitogiga

Construction of 2 houses at Nu'u

Construction of 24 Field Ext. Centres

Upgrading 2 Field Extension Centres

4. Vehicles

Procurement of vehicles

5. Machinery and Far. t&'quipment

Farm equipment for extension centres

Equipment for Nu'u E,st. Centre

Procurement of tructor,

Equipment for Project Office

- 80 -Appendix 10

LOAN ALLOCATION BY CATEGORY AND SOURCE OF FUNDS($ '000)

Category ADB ADAB IDA TOTAL

I. Civil Works-a) Buildings 239.6 69.5 380.8 689.9

b) Fences 84.5 - - 84.5

c) Roads 102.6 - - 102.6

d) Water Supply 105.2 - - 105.2

Sub-Total 531.9 69.5 380.8 982.2

II. Equipment & Vehiclesa) Soap Factory 651.8 - - 651.8

b) Coffee Processing 21.9 - - 21.9

c) Coconut Woy Utilization - 126.9 - 126.9

d) Machinery - 182.1 - 67.0 249.1

e) Vehicles 202.8 - 85.3 288.1

f) Miscellaneous 31 78.4 195.4 120.4 394.2

Sub-Total 1137.0 322.3 272.7 1732.0

III. Plantation Supplies -/ 102.9 257.6 - 360.5

IV. Fertilizer - 668.6 - 668.6

V. Fellowships - - 164.1 164.1

VI. Consultants 478.2 - 656.5 1134.7

VII. Unallocated 750.0 682.0 525.9 1957.9

T o t a 1 3000.0 2000.0 2000.0 7000.0

1/ Foreign cost content of civil works will be financed on fixed percentages

as follows:a) Buildings - Soap Factory and cocoa and copra storage sheds - 88%;

other WSTEC buildings - 25%; buildings for research and

extension - 40%.b) Fences - 50%

c) Roads, except gates and cattle grids - 20% of total construction

cost per mile; gates and grids - 90%

d) Water Supply - Pump house - 25%; tanks - 90%; troughs - 50%.

2/ Machinery includes tractors, trailers, slashers, fertilizer spreaders

and other farm equipment.

3/ Miscellaneous equipment includes pumps, water pipes, coffee hullers and

driers, livestock equipment, spare parts, audio visual equLiprment and

office equipment.

4/ Plantation supplies includes seeds, polybags, chemicals, etc.

Reference in text: page 28, para. 91

page 32, para. 104

page 33, para. 108

- 81 - Appendix 11Page 1

STATUS OF WSTEC'S COMPLIANCEWITH PREVIOUS LOAN COVENANTS

STATUS OFCOVENANT COMPLIANCE

1. Engagement of beef cattle management andother consultants (L.A. Schedule 5) Complied with.

2. Establishment of a Project Office within Complied with.90 days of the date of the Loan Agreement(28 March 1977), headed by a ProjectManager acceptable to the Bank; anychange of Project Manager to be effectedafter prior Bank consultation (L.A.Schedule 6, para. 1).

3. Preparation of detailed program for the Complied with.rehabilitation of each estate and inform-ing the Bank about such programs (L.A.Schedule 6, para. 2).

4. WSTEC to purchase cacao pods and wet cacao Not complied with. WSTECfrom smallholder producers (L.A. Schedule began such a program, but the6, para . 3). practice was stopped at the

request of the Governmentbecause some villagers sellingcacao pods were not bona fidegrowers of cacao and pilferingwas taking place on recognizedsmallholder cacao plantations.

5. WSTEC to inform Bank of names of Complied with.candidates selected for fellowship train-ing and institutions where training isto be done. (L.A. Schedule 6, para. 4).

6. Site for the Agricultural Research Complied with.Station to be proposed to the Bank(L.A. Schedule 6, para. 5(a)).

7. Establishment of a Research Committee Complied with.within 90 days of the date of LoanAgreement (L.A. Schedule 6, para. 5(b)).

8. WSTEC to supply cattle to Department of Complied with.Agriculture for distribution to small-holders through the extension programimplemented by the DOA (L.A. Schedule 6,para 6).

Reference in text: page 31, para. 99

- 82 - Appendix 11Page 2

9. WSTEC to be exempt from Customs duties. Complied with.

10. Auditing of accounts annually and Partly complied with. Copiesfurnishing to the Bank copies of the of accounts furnished late byaccounts within 6 months of the closing one year.of the fiscal year (P.A. Section 2.09).

11. Maintenance of the consolidated debt/ Complied with.equity ratio of not higher than 70:30(P.A. Section 2:12).

12. Maintenance of a current ratio of 1.5:1 Complied with.(P.A. Section 2.13).

13. Notifying the Bank of any proposal to Complied with.amend, suspend or repeal any provisionof the Ordinance or Regulations(P.A. Section 2.17).

WVESTERN SAMIOA TRUST ESTATES CORPORATIONPROJECTED CASH FLOW

1979 - 2006(WS$ '000)

1979 1980 1981 1982 1983 1984 1985 1990 1995 2000 2006

UNFLOWNet Profit 1068.9 1082.4 1133.8 1484.6 1729.2 1959.1 2141.7 1762.6 2251.8 2276.6 2290.6ADB Loan, WSTEC 1 743. 1 1045.0 186.0 186.0 15U.0-ADB Loan, WSTEC II 1570.8 485.9 166.3 50.1 37.0DBWS Loan (2nd) 150.0ADAB Grant 183.3 406. 6 333.4 281 2 335.0RONFIUN 1811.4IDA Loan 724.0 827.0 944.0 857.0 840.0 440.0Depreciation 90.5 100.7 204.5 230.5 280.0 302.0 346.3 354.3 367.8 367.2 310.7

Total Inflow 3713.9 3102.1 4105.4 3737.6 3515.9 3432.4 3300.0 2116.9 Z619.6 2643.8 2601.3

OUTFLOWInvestment Cost WSTEC I 1577.4 218.5 218.5 169.5 00Investment Ccst WSTEC II 2706.1 1812.3 1122.3 709.2 747.6Investment Cost, Savai'i 724.0 827 0 944.0 857.0 840.0 440. 0RepLacement Cost WSTEC others 162.0 311. 7 162.0Replacement Cost WSTEC 1 99.0 509. 1 99.0Replacement Cost WSTEC II 63. 0 376. 2 376.2 376. 2 439. 2Soap Processing - Plant 938.3

- Vehicles 17.0Wood-by-Products - Civil Works 31. 9

- Equipment 124.4 4. 7 5. 3- Consultant Services 25. 6 25. 6

Debt Servicing WSTEC r 154.0 154.0 154.0 154.0 154.0Debt Servicing WSTEC II *154. 0 154.0 154.0Debt Servicing N. P. F. -Ologogo 10.4 10.4 10.4 10.4 12.3 6.1 6.1 6. 1 6. 1Debt Servicing N. P. F. -Meat Proc. 3.2 6.4 6.4 6.4 6.4 11. 6 8.4 8.4Debt Servicing D. B. W. S. (lst) 20.0 20.0 20.0 20.0 20.0 20.0 20.0Debt Servicing D.B.W.S. (2nd) 18.0 19.0 23.0 24.0 28.0Debt Servicing RONFIN 45.3 271.7 271.7 271.7 950.9Debt Servicing IDA 33.0 96.0 160.0 220.0 264.0 285.0 293.0 198.0 136.0 136.0Contribution to Government 60.0 60.0 60.0 60. 0 60.0 60.0 60.0 60.0 60.0 60.0 60.0

Total Outflow 90.4 3383.3 4353.6 3859.6 3019.9 2927.6 3241.4 1051.7 1061.0 789.2 196.0

Net Cash Flow 3623.5 (281.2) ( 248.2) (122.0) 496.0 504.8 58.6 1065.2 1558.6 1854.6 2405.3Cumulative Cash Flow 3698.7 3417,5 3169.3 3047.3 3543.3 4048.1 41O6.7 8074.4 15437.8 24679.3 37443.5 5 rX

l)ebt Service Coverage 20.0 4.3 2.7 2.2 2.1 2.3 1.6 2.7 4.2 8.7 19.1 -x

-- I -

Reference in text: page 29, para. 94page 31, para. 98page 39, para- 125.

WESTERN SAMOA TRUST ESTATES CORPORATIONPROJECTED INCOMNE STATEMIENTS

1979 - 2006(WSS '000)

1979 1980 1981 1982 1983 1984 1985 1990 1995 2000 2006

GROSS MARGIN

Copra WSTEC I 618. 6 361.5 438.2 540. 6 617. 3 618. 7 620.8 622.9 622. 9 622.9 622. 9Cocoa WSTEC I 276. 3 117.1 130.2 130.2 130.2 130.2 130.2 130.2 130.2 130.2 130. 2Copra & Cocoa WSTEC II - 503.0 605. 5 846. 3 1004.5 1124. 1 1270.3 1350.0 1494.6 1494. 6 1494. 6Copra. Cocoa & Coffee IDA - (54.0) (66.0) (88.0) (134.0) (123.0) (207.0) 634.0 815.0 725.0 725.0Coffee 28.5 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32. 0Bananas 2.0 3.0 3.3 3.6 4.0 4.4 5.0 5.0 5.0 5.0 5.0Taro 88.3 88.0 96.8 106.5 117.1 128.8 141.7 141.7 141.7 141.7 141.7Beef Livestock & Hides 104.7 120.0 150.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0 180.0Piggery .9.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0Feedlmilt (4.5) (2.0) - - - 4.0 4.0 4.0 4.0 4.0 4.0 00Timber 29.9 31.0 65.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0Butchery 26.9 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0

.Store 82.6 120.0 120.0 120.0 120.0 120.0 120.0 120.0 120.0 120.0 120.0Service Station 60.5 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0 80.0Engineering Shop 1.8 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Ancillary Service 31.9 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0 60.0Miscellaneous 122.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0 140.0Auckland - - - - - - - - - - -

Soap Factory 26.8 87.8 87.8 118.6 155.5 189.5 214.5 284.5 284.5 284.5 284.5Wood By-products 6.7 6.0 6.0 56.2 56.2 80.5 80.5 105.4 105.4 105.4 105.4

Total Gross -Margin 1512.0 1768.4 2023.8 2461.0 2697.8 2904.2 3008.0 4024.7 4350.3 4260.3 4260.3Admninistration Costs 388.2 400.0 400.0 400.0 400.0 400.0 400.0 400.0 400.0 400.0 400.0Margin before interest & taxes 1123.8 1368.4 1623.8 2061.0 2297.8 2504.2 2608.0 3624.7 3950.3 3860.3 3660.3

Interest 29.0 275.1 471.0 503.5 485.7 450.7 411.4 269.8 128.8 14.0 -Taxes 25.9 10.9 19.0 72.9 82.9 94.4 54.9 1592.3 1569.7 1569.7 1569.7 C g

Net Profit 1068.9 1082.4 1133.8 1484.6 1729.2 1959.1 2141.7 1762.6 2251.8 2276.6 2290.6.. 1z

WESTERN SAMlOA TRUST ESTATES CORPORATIONPROJECTED BALANCE SHEETS

1979 - 2006(WS$ '000)

1979 1980 1981 1982 1983 1984 1985 1990 1995 2000 2006

Fixed AssetsEstate land and buildings 3619.0 4394.4 5567.2 6392.9 6864.7 7012.7 7324.0 7344.0 7432.5 7486.4 8610.0Estate plant, equipment &

improvements 4177.2 5638.6 7658.9 9295.5 10348.0 11118.9 12856.6 15494.9 17622.9 19593.3 26782.0Soap factory buiLdings &plant 938.3 970.0 994.7 1010.B 1010.6 1030.1 1038.2 1054.3 1128.5 1341.3Deferred debts owing by I

Government 517.8 766.4 1082.9 1329.9 1489.8 1489.8 1684.3 1536.0 1424.2 1382.9 1203.2 00Total FixedAssets 8314.0 11737.7 15279.0 18014.0 19713.1 20632.0 22695.0 25413.4 27533.9 29591.1 37936.5 5n

Current AssetsCash at bank and on deposit 221.9 160.6 171.5 161.5 283.2 '491.1 344.5 672.4 1559.4 2725.1 4411.6Stocks 813.7 576.2 615.5 579-5 1016.2 1762.2 1236.2 2563.5 5944.9 10389.5 10818.9Debtors, pre-payments. etc. 295.9 207.8 222.0 209.0 366.5 635.5 445.9 966.8 2241.6 3917.4 6341.6

Total Current Assets 1331.5 944.6 1009.0 950.0 1665.9 2888.8 2026.6 4202.5 9745.9 17032.0 21572.1

Total Assets 9645.5 12682.3 16288.0 18964.0 21379.0 23520.8 24721.6 29615.9 37279.8 46623.1 59508.6

LiabilitiesC urrent 217.6 111.9 424.5 487.5 707.4 1425.5 504.7 615.5 520.5 290. 1 136.0Long-term 2828. 9 4889. 0 7048. 3 8176. 7 8642. 6 8107. 2 8087.1 5409. 7 2624. 2 704. 0 -Share-capital 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2 1397.2Reserves 520,1.8 6284.2 7418.0 8902.6 10631.8 12590.9 14732.6 22193.5 32737.9 44231.8 57975.4

Total Liabilities and Capital 96i .5 12682.3 16288.0 18964.0 21379.0 23520.8 24721.6 29615.9 37279.8 46623.1 59508.6

Current Ratio 6.1:1 8.4:1 2.4:1 1.9:1 2.4:1 2.0:1 4.0:1 6.8:1 18.7:1 58.7:1 - :Equity (%7) (Capital & Reserves: 0

Total Assets) 68% 61% 54% 54% 567e 59% 65% 80% 92% 98% 99% XFixed Assets/Total Assets 86f% 93% 94% 95% 92% 88% 92% 86% 74% 63% 64-%,

- 86 - Appendix 13Page 1

ASSUMPTIONS AND COMPUTATIONS UNDERLYINGFINANCIAL AND ECONOMIC EVALUATION

I. Yield Projections and Technical Coefficients

II. Assumptions Regarding Costs of Project Components

III. Product Prices

IV. Assumptions of the Financial and Economic Analyses

V. Financial Internal Rates of Return and Sensitivity Tests

VI. Economic Internal Rate of Return and Sensitivity Tests

Reference in text: page 38 paras. 120, 121 and 122

- 87 -Appendix 13-87 -Page 2

I. YIELD PROJECTIONS AND TECHNICAL COEFFICIENTS

A. COPRA(i) Existing Coconuts

Projections of yield improvements due to fertilizerapplication for existing coconut plantations have been based oncurrent productivity and management capability on individualestates taking into consideration the maturity of the palms,genetic variability and soil conditions.

Table 1 ESTIMATES OF COPRA YIELD IN POUNDS/ACREFOR EXISTING COCONUTS

Increase in Copra Yield due to Fertilising by Estate

a!VAIPAPA TAUSAGI FALEATA CASALA TUANA'IMATO LESEA-/ TAFAIGATA

AcreagesUnder

Project: 635 790 1,128 392 159 150 693

PresentYield: 667 1,000. 774 177 774 424 100

WithProject:

Year 1 667 1,000 774 177 774 424 1002 667 1,000 774 177 774 424 2003 825 1,200 1,000 275 1,000 424 4004 1,075 1,400 1,250 475 1,250 424 6005 1,250 1,500 1,500 600 1,500 424 8006 1,250 1,500 1,500 600 1,500 424 1,0007 1, 250 1,500 1,500 600 1,500 424 1,200

Onwards

a/ Lesea coconuts were not considered worth fertilizing.

- 88 - Appendix 13Page 3

(ii) New Coconut Plartitis

Yield projections for new plantings have been based onobservations made on selected "Samoan Tall" mother palms on WSTECestates, suitably adjusted for variability in soil conditions andmanagement capability.

Table 2: ESTIMATES OF COPRA YIELD FOR NEWCOCONUT PLANTINGS IN POUNDS/ACRE

EXISTING SELECTEDYEAR STA SAMOAN TALL

1 6672 6673 6504 6255 6006 575 1007 550 2508 525 4009 500 55010 375 95011 250 1,10012 125 1,30013 1,50014 1,70015-25 1,750

a/ The existing stand is thinned out in Years 10, 11, 12 and 13.

- 89 - Appendix 13Page 4

B. COCOA

(i) Existing Cocoa

Projections of yield improvements due to fertilizerapplication for existing cocoa plantations have been based on thecurrent productivity and management capability on individualestates, taking into consideration the debility of the plantationsdue to Phytophthera damage, genetic variability and soil conditions.

Table 3: ESTIMATES OF COCOA YIELDIN POUNDS DRY BEAN/ACRE'FOR'EXISTING COCOA

Increase in Cocoa Yield due to Fertilizing by Estate

CASALA TUANA'IMATO LESEA TAFAIGATA

AcreagesUnderProject: 82 930 74 693

Present Yield: 301 279 0 a! 308

With Project:

Year 1 301 279 - 3082 430 430 - 4753 480 480 120 5304 3005 4506 6007 6.758 7509 800

Onwards

a/ Only the immature cocoa on Lesea is considered worth fertilizing.

-90 Appendix 13Page 5

(ii) New Cocoa Plantings

Yield projections have been made on the basis of

planting Amelonado seedlings. Experimental results and.

commercial plantation performance of Amelonado indicate its

precociousness and disease resistance, particularly to

Phytophthera. Yields of 2200 pounds of dry bean per acre

have been noted under experimental conditions in theSolomon Islands while yields of 1900 pounds of dry bean per

acre have been noted in Malaysia.

Table 4: ESTIMATES OF COCOA YIELDFOR NEW PLANTINGS IN POUNDS DRY BEAN/ACRE

YEAR NEW COCOA (AMELONADO)

1-234 1805 4506 6757 900

8 1,2009 1,300

10 1,400Onwards

- 91 -Appendix 13

Page 6

C. CATTLE IMPROVEMENT

The improvement in carrying capacity of the pasturesis brought about by:

(i) provision of water;(ii) planting improved pasture species;(iii) fertilizing the pasture; and(iv) improved fencing and handling facilities.

This improvement in carrying capacity results in thefollowing benefits:

(i) increase in stocking rates;(ii) increase in carcass weight;

(iii) decrease in mortality rate; and(iv) increase in calving percentage.

The estates where the carrying capacity of the pasturesis to be improved will have a greater turnoff capacity.

Table 5: ESTIMATES OF STOCKING RATESIN ACRES PER 'LIVESTOCK UNIT

(Steer Equivalents - SE)

Without Fertilizing With FertilizingType of Pasture No Water Water No Water Water

Improved Pasture 2.0 1.5 -1.5 1.1Good Native Pasture 2.3 1.7 2.0 1.5Poor Native Pasture 4.0 3.0 3.6 2.6

92 -Appendix 13

Page 7

The following benefits using constant 1979 prices would

result from the. pasture improvement programme:

Table 6 : BENEFITS ACHIEVED THROUGHPASTURE IMPROVEMENT

300 Acres 490 AcresVaipapa Faleata

Without Project

Carrying capacity 75 SE 213 SE

Carcass weight- 290 lbs. 290 lbs.

Annual turnoff carcass beef 10 tons 28 tons

With Project

Carrying capacitv 273 SE 445 SE

Carcass weight.- 330 lbs. 330 lbs.

Annual turnoff carcass beef 40 tons 66 tons

Incremental Beef 30 tons 38 tons

a/ Carcass weights are for 21 months old steers grazing under coconuts.

Value of 68 tons of incremental beef production resulting from

pasture improvement is obtained assuming a price of WS$800 per ton,

which is the average price received by WSTEC. For both the

financial and economic analyses, the same price has been used since

there is no international trading of beef.

- 93 -Appendix 13Page 8

D. COCONUT TIMBER PRODUCTION

Expected coconut timber production based on the WSTEC'sreplanting program is given in Table 7:

Table 7: PROJECTED COCONUT TIMBER PRODUCTION

Period 1982-1983 1984-1986 1987 Onwards

a) Acreage cleared/year 200 250 300b) Trees available/year 8,000 10,000 12,000c) Annual timber production

based .on 12 fee-t length and8 inch average diameter:

(i) lumber (mbf)export grade (50%) 80 100 120local grade (50%) 80 100 120

(ii) posts & poles (mbf) 360 450 540

a/ mbf means a thousand board feet.

- 94 - Appendix 13Page 9

Basic Information and Production Assumptions

1. Total acreage of coconut above 50 years of age:

Mulifanua plantations 7,651 x 25% - 1913Faleata plantation = 200Casala plantation . 150Experimental plot - 80

2343 acres

2. Number of old trees per acre: 40

3. Average usable length of coco stem: 36 feet (excluding trim allowances)of which: the first 12 feet (at 3 feet above base) are high-density.

the second 12 feet are medium density wood.the third 12 feet are low density wood.

4. Average diameter per tree: First 24 feet is 8 inches = 100 board feet/logNext 12 feet is 6 inches = 28 board feet/log

5. Felling and bucking rates: 5 trees/hr x 7 hrs = 35/day

6. Hauling rate: 4 trips/day of 6-ton truck over 20 miles of road,carrying 1.2-foot logs, 25 logs/trip

7. Charcoal yield: 12-foot low-density log 6 inch average diameter has2.36 cu. feet/log (.07 cu.meters). Assuming adensity 300 kgs/cu.m., one ton of coco wood willrequire 3.33 cu.m.; at 20% recovery a ton of thewood will yield 200 kilograms of charcoal.

8. Fuelwood yield: The slabs and trimmings from coco lumber manufactureare high-density wood. Assuming a recovery of 20%fuelwood in milling and a density of 500 kgs/cu.m.,every cubic meter of round logs sawn will yield 100kgs. of fuelwood.

9. Number of days operating: 240 which is assumed to be divided into:160 days for lumber production80 days for post production

10. Maximum number of 12 foot logs that can-be milled:

80 logs/8 hour day for lumber120 logs/8 hour day for posts (quarter)

11. Mill Capacity:Lumber: 80 x 50 bd.ft./log x 40% recovery = 1,600 bd.ft.

at 160 days = 256,000 bd.ft./year120 x 50 bd.ft./log x 90% recovery = 5,400 bd.ft.

at 80 days = 432,000 bd.ft./year

95 - Appendix 13Page 10

ASSUMPTIONS REGARDING COSTS OF PROJECT CO1PONENTS

A. COPRA

The cost of production and selling of copra has beendetermined from WSTEC accounts. A figure reflecting currentcosts has been computed from the 1979 costs and used as a constantin all calculations.

Table 8: ESTABLISHING PRODUCTION & SELLING COSTS OF COPRA(WS $)

1979(10 months to October)

Cost of Production

Labour 205,119Stores 99,697Insurance 3,275

Total 308,541

Tonnage 2520.85

Cost of Production per Ton 122r40

Cost of Selling

Salaries and wages 22,640Transport and handling 12, 270Empty sacks and twine 8,250Electricity 390Insurance 2,640Sundries 200

Total 46,390

Tonnage 2520.85

Cost of Selling per Ton 18.40

Total Cost of Production & Selling $140.80

- 96 - Appendix 13Page 11

Table'9: Cost of Production & Selling Per Acre WSTECGEstates

Copra Yield Cost Per Acre

Estate lb/acre (WS $)

Vaipapa 667 41.92

Tausagi 1,001 62.91

Faleata 774 48.65

Casala 177 11.13

Tuana'imato 774 48.65

Lesea 424 26.65

Tafaigata 100 6.29

Average Cost/Acre $ 35.17

This cost per acre is assumed to remain constant since

it is assumed that with increases in production there would be

greater efficiencies in the use of resources and consequent

economies of scale.

B. COCOA

The cost of production and selling cocoa has been

determined from current selling costs and are reported in

Table 10.

- 97 - Appendix 13Page 12

Table 10: ESTABLISHING PRODUCTION AND SELLING COSTS OF COCOA(WS $)

1979(10 months to October)

Cost of Production

Labour 108,520

Stores 30,949

Insurance 1 650

Total 141,119

Tonnage 203

Cost of Production per Ton 695.17

Cost of Selling

Salaries and Wages 9,857

Levy, wharfage, Inspection fee, etc. 27,550

Transport and Handling 4,920

Electricity 500

General repairs and maintenance 750

Insurance 420

Total 43,997

Tonnage 181.8

Cost of Selling per Ton 242.01

Total Cost of Production & Selling $937.18

Cost of Production per Acre WSTEC II Estates

Copra Yield Cost per Acre

Estate lb/acre (WS $)

Casala 301 125.93

Tuana'imato 279 116.73

Lesea 319 133.46

Tafaigata 308 128.86

Average Cost/Acre $126.25

This cost per acre is assumed to remain constant as with

inrreases in production will come greater efficiencies in the use

of resources and consequent economies of scale.

- 98 - Appendix 13Page 13

COCOA PLANTING COSTS

Planting cocoa under coconuts.

A. Nursery Costs

1. Cost of Seed

Amelonado to be imported from Vascular Streak Dieback

free islands.

WS $

200 pounds a'c $4.61 per pound freight 922.00

1,000 pods at 20 cents per pod 200.00'TOTAL 1,122.00

Cost per sced - 4 cents (30 seeds per pod)

2. Size of Nursery

With a planting distance of 7.5 feet x 10 feet amongst

coconuts planted 30 feet on the square, the cocoa density

will be approximately 530 per acre. At a planting rate of

200 acres per annum, 106,000 seedlings will be required each

year for five years to plant 1,000 acres. With supply

requirements of 10% and poor germination, culling and death

losses at 25%, the number of seed required per annum will be

157,000, with nursery space required for 140,000 seedlings;

An acre of nursery land provides for about 400,0004

seedlings (in two batches), therefore a 0.4 acre nursery is

required for five years.

3. Costs of Half Acre Nursery

(a) Labour

Soil collection, sowing, fertilizer application, weeding,

irrigation, spraying, selection & culling, maintenance &

miscellaneous.

WS $

Labour 583 man-days at $2.50 1,457.50

Foreman 60 man-days at $4.00 240.00

Total $ 1,697.50

- 99 - Appendix 13Page 14

(b) Materials

Seeds, polybags, chemicals, fertilizer, sprayingequipment, irrigation equipment, tools, shade,store, running costs and transport.

Cost per Annum WS $ 24,716.00

(c) Seedling Costs WS $FC LC Total

140,000 seedlings 24,716 1,698 26,414Per seedling 18 cents 1 cent 19 cents

B. Windbreak Planting Costs for 200 Acres

Foreign Local Total

Labour - 481 481Dadap cuttings - 613 613Paraquat .4448 - 41448

4_448 1,094 5,542

C. Lining & Holing Costs (530 points)

Labour/Acre WS$/Acre

26 md at $2.50 65.002.6 md at $4.00 10.40

$75.40

D. Planting Costs (Including Fertilizer Application)

1. Labour WS $

Labour 7 md at $2.50 17.50Foteman 0.7 md at $4.00 2.80

20.30

2. Materials (Fertilizer,Chemicals, tools) 48.00

- 100 -pendix 13

Page 15

E. Weeding

1. Labour WS$/Acre

Years 2-5, 8 md at $2.50; 0.8 at $.400 23.20

Years 5 onwards, I md at $2.50;0.1 md at $4.00 2.90

2. Materials

Tools & Chemicals - Years 2-5 22.00

Years 5 onwards 0.20

F. Fertilizing

1. Labour WS $

Year 1, 6 md at $2.50 15.00

0.6 md at $4.00 2.4017.40

Year 2 onwards, 2 md at $2.50 5.00

0.2 md at $4.00 0.805.80

2. Materials WS$/AcreForeign Local

Years 1-3, 200 lb/acre 21.00 2.00

Years 4 onwards - 220 lb/acre 23.00 2.00

G. Pruning

1. Labour WS $

Year 1 - 4 x 2.50 + .4 x 4.00 11.60

2 - 5 x 2.50 + .5 x 4.00 14.50

3- 6 x 2.50 + .6 x 4.00 17.40

4 - 8 x 2.50 + .8 x 4.00 23.20

2. Materials (tools, etc.) $2.00 per acre

- 101 -

Appendix 13

Page 16

H. Pest & Disease Control

1. Labour WS$/Acre

Year 1 4 x 2.50 + .4 x 4.00 11.60

Year 2 onwards 2 x 2.50 + 0.2 x 4.00 5.80

2. Materials WS$/Acre

Year 1 - fungicide and pesticides 20.00

Year 2 onwards 10.00

I. Cocoa Planting Schedule

Year 1 Year 2 Year 3 Year 4 Year 5

Tausagi 200 150Faleata 50 100Casala 100 80

Vaipapa 120 200

COCONUT REPLANTING COSTS (WS$)

A. Nursery Costs

1. Seed Costs: WS$

Cost per nut including transportto nursery 0.02

Total Cost per nut 0.02

2. Seed Numbers

A field spacing of coconuts at 30 feet on the triangle to

allow for intercropping gives a plant density of 56 palms

per acre. With 5% infilling and 30% culling from the

nursery, 84 nuts are required per acre to be planted.

3. Nursery Size

At a planting rate of 200 acres per annum 16,800 seedlings

are required or about four acres-of nursery and germination

beds. (4,800 seedlings per acre of nursery)

- 102 -

Appendix 13Page. 17

4. Cost per Acre of Nursery

(a) Labour:

(i) Germination Bed

Preparation of seed bed & seed nVts,

planting seed nuts, watering, cullingand selec.tion

(ii) Nursery

Soil collection, filling bags, manualweeding of bags, chemical weeding between

bags, watering, fertilizing, pest &

disease control, selection & culling,miscellaneous.

WS$

Labour 325 man days 813

Foreman 32 man days , 128$1041

(b) Materi,.;2s

Seed, polybags, chemicals, fertilizer, tools,

irrigation and transport. $ 1,278

(c) Planting Materials Costs

For 3,192 seedlingsCost per polybag seedling $0.70(Foreign Cost $0.40; Local Cost $0.30)

B. Lining, Holing & Planting Costs: (Year 1)

Labour Costs:

Labour 4.0 md at $2.50 $ 10.00

Foreman 0.4 md at $4.00 1.60

$ 11.60

- 103 -

Appendix 13Page 18

C. Thinning Costs (Years 10, 11, 12 & 13)

1. Labour Costs:

Labour 14.8 md at $2.50 $ 37.00

Foreman 1.48 md at $4.00 6.00

$ 43.00

2. Materials

Purchase & Operation of Chain Saws 4.00

Chemicals & innoculum 3.00

$ 7.00

D. Weeding Costs: (Years 1-8)

1. Labour WS$/Acre

Year 1 Labour 10 md at $2.50 25.00

Foreman 1 md at $4.00 4.0029.00

Years 2 Labour 8 md at $2.50 20.00

to 8 Foreman 0.8 md at $4.00 3.2023.20

2. Materials:

Chemicals - Year 1 only 23.00

E. Fertilizing Costs:

1. Labour WS$/Acre

Labour 1.5 md/acre at $2.50 3.75

Foreman 0.15 md/acre at $4.00 0.604.35

2. Materials WS$/AcreFC LC

Year 1 44 lb, 12-5-20/acre at 259/ton 4.70 0.40

Year 2 88 lb, 12-5-20/acre at 259/ton 9.30 0.90

Year 3 132 lb, 12-5-20/acre at 259/ton 14.00 1.30

Year 4 176 lb, 12-5-20/acre at 259/ton 18.60 1.70

Year 5 220 lb, 12-5-20/acre at 259/ton 23.30 2.20

YIYO 220 lb, 12-5-20/acre at 259/ton 23.30 2.20

(FC $237; LC $22)

- 104 -

Appendix 13Page 19

F. Pest & Disease Control:

1. Labour WS$/Acre

Labour 1 md at $2.50 2.50

Foreman 0.1 md at $4.00 0.40

$2.90

2. Materials

Chemicals Year 1 22.00Year 2 18.50Year 3 & onwards 15.00

- 105 -

Appendix 13Page 20

FERTILISING EXISTING COCONUTS:

A. Rate:

220 pounds per acre of 12N: 5P:20K is to be applied

to existing coconuts which have a planting distance of 30 ft.

on the square or 48 palms per acre.

B. Cost of Fertilizer:

The current cost of fertilizer CIF Apia is WS$233 per

ton. To this a local cost of $18 per ton for handling,

wharfage and transport to store and $8 per ton (FC $4; LC $4)

to cover movement to plantation and into the field. This

gives a total cost of $259 per ton consisting of $237 foreign

cost and $22 local cost.

C. Cost of Application:

1.5 mandays per acre are required to apply the fertilizer.

WS/Acre

1.5 md at $2.50 3.75

0.2 md at $4.00 0.80$4.55

D. Time of ApElying:

Application will commence in Year 2.

FERTILISING EXISTING COCOA

A. Rate:

The original stands of cocoa trees were planted at 306

per acre (12 feet square) and at this density an application

rate of 220 pounds per acre is equivalent to 0.72 pounds per

tree. Due to wind damage and tree mortality, the existing

stands of cocoa now only hold about 200 trees per acre on

the average and to broadcast fertiliser at 220 pounds per acre

would be wasteful. But applying 0.72 pounds per tree to the

existing stands results in an application rate of 145 pounds/

acre, which is adequate.

- 106 -

Appendix 13Page 21

B. Fertilizer Cost:

As determined for coconuts, the cost would be WS$259per ton including $237 per ton Foreign Cost and $22 LocalCost. This includes delivery to the field.

C. Cost of Application:

1.5 mandays per acre are required to fertilise cocoa at thisdensity.

D. Time of Application:

Application will commence in Year 2.

- 107 -Appendix 13Page 22

Recommended Formula and Cost Per Ton ofLaundry Soap

1 Ton of Laundry Soap = 65% FAT 684 kg FAT Mix per ton.

Raw Materials Unit Cost TotalWS$ WS$

70% Tallow 479 kg 0.638 305.6030% CNO 205 kg 0.33 67.65Caustic soda 109 kg 0.374 40.77Salt 102 kg 0.135 13.85

Additives

SodiumHvdrosulphite 0.85 kg 2.5 1.70Perfume 7.50 kg. 4.42 33.15Colour 0.2 kg 26.53 5.12

Packing: 47 outer cartons 0.22 10.34

Sub-Total 478.18Overheads 95.64Contingencies 12.00

586.82

1 Ton of Laundry Soap WS$ 586.82

- 108 -

Appendix 13Page 23

Recommended Formula and Cost Per Ton ofToile t Soap

1 Ton of Toilet Soap Base = 78% FA = 82.1% FAT M x per ton.

Raw Materials Unit Cost TotalWS$ WS$

30% coconut oil 246.3 kg 0.33 81.2870% beef tallow 574.7 kg 0.80 459.76Caustic soda 132 kg 0.374 49.37Salt 123 kg 0.135 16.60

Additives

Sodium Hydrosulphite 0.85 kg 2.0 1.70Marlon AS/3 acid 7.5 kg 1.80 13.50Preventol 0.5 kg 5.00 2.50Mg Sulphite 0.25 kg 0.80 0.20Sodium silicate 10.0 kg 0.36 3.60

Perfume 10.0 kg 29.92 299.20Lanoline 5.0 kg 2.00 10.00Colour 0.2 kg 26.53 5.30Titanium dioxide 2.0 kg 1.36 2.72

Sub-Total 945.73

Estimated 10,000 inner cartons 0.03 300.00or wrappers

Estimated 140 outer cartons 0.20 28.00

Estimated manufacturing expenses 244.74

Contingencies 10.00

1 Ton of Toilet Soap WS$ 1,528.47

- 109 -

Appendix 13Page 24

Recommended Formula and Cost Per Ton ofSoap Powder

Raw Materials Unlit Cost TotalWS$ tWS$

40% Coconut oil - soap granules 400 kg 0.36 144.00

25% Sodium toipolyphosphate 250 kg 1.00 250.00

15% Sodium carbonate 150 kg 0.35 53.00

10% Sodium sulphate 100 kg 0.36 36.00

5% Ninionic material 50 kg 2.00 100.00

0.1% Optical bleacher 1 kg 25.00 25.00

0.5% Perfume 5 kg 5.00 25.00

Sub-Total 633.00

2,000 inner cartons for avg. 500 gr. est. 0.10 200.00

400 outer cartons for 50 pack 0.50 20.00853.00

Contingencies (20%) 179.00

1 Ton of Soap Powder WS$ 1,031.00

- 110 -

Appendix 13Page 25

III. PRODUCT PRICES

A. COPRA

WSTEC markets its copra through the Copra Board ofWestern Samoa. The destinations of the copra exports fromWestern Samoa vary from year to year. At present thedistribution of copra exports is as follows: 50% Europe,25% New Zealand, and 25% Japan. The export figures indicatea decrease in sales to Europe and New Zealand (previously60% and 33% respectively) and an increase in sales to Iypan(previously 7%) since the 1977 Appraisal for WSTEC I. -In the computation of the price to be paid to the producer,the following cost adjustments are applied by the CopraBoard to the international price for copra:

(a) Government tax (levy) of 7% of the FOB price inexcess of WS$ 100 per ton;

(b) A deduction for meeting the actual operating costsof the Board;

(c) Administrative costs;

(d) Freight, shipping charges, etc.;

(e) Inspection fee, wharfage and weightbridge;

(f) Warehouse costs, and

(g) A profit/loss element used for price stabilization.

WSTEC receives the buying price paid by the CopraBoard to producers in the warehouse at Apia, with a specialallowance of $2 per ton added as a premium for the largequantities of good quality copra produced. It would bepertinent to note that other producer prices are lower dueto handling charges etc. The "in warehouse price" isdetermined by deducting the following charges from the net(after 7% export duty) FOB price at Apia.

1/ WSTEC Agricultural Development Project in the Independent State ofWestern Samoa - Rep. No. SAM: Ap-8, 1977.

- 11 1 -

Appendix 13Page 26

Current % Net FOB Price-

Transfer to Copra Reserve 8.26

Administration 3.19

Rent, storage, carriage, sundries 0.80

Fire insurance 0.32

Labour (screening, bagging, stacking,marking, unstacking) 1.07

Shrinkage allowance (4%) 3.32

The price that WSTEC receives for copra expressed as a

percentage of the net FOB price at Apia varies from year to year

as shown in Table 11.

Table 11: PRICES OF COPRA RECEIVED BY WSTEC

(WS$ TOO0) PER CENT

Aetrage Net FOB WSTEC Ptice NET FOB

1976 150 133 89

1977 232 208 90

1978 260 225 87

1979 440 349 79

1980 (April) 313 262 84

For the purposes of the financial analysis the price received

by WSTEC for its copra is taken as 80% of the projected net FOB price.

Price projections have been made using the "World Bank Price

Prospects for Major Primary Commodities" published in January 1980. To

determine the net FOB price at Apia, adjustments have been made for

transit loss in weight (3 per cent), freight (cu5yently $85.30 to

Hamburg) and 5% for insurance and other charges.-

1/ Copra Board of Western Samoa: Price Order, 29 April 1980.

2/ These are the charges currently used by the Copra Board in Western

Samoa to determine the FOB price at Apia for purposes of determining

appropriate producer prices.

- 112 -

Appendix 13Page 27

Table 12: PRICE PROJECTIONS FOR COPRA

World Bank FOB Price Net FOB Ptice toProjected Prices Apia Price Apia WSTEC

YEAR (Constant 1980 US$/MT) (WS$/Ton) (WS$/Ton) (80% Net FOB)

1980 594 426.93 399 3191981 609 439.77 411 3291982 587 421.58 394 3151985 666 488.99 457 3631990 616 446.19 417 333

For purposes of the economic analysis the FOB price at Apia has

been computed based on the World Bank Projections as they represent the

appropriate border price for Samoan copra exports.

B. COCOA

WSTEC markets its cocoa directly through brokers, not throughthe Cocoa Board and is not expected to pay Cocoa Board Expenses. However,

WSTEC do pay a 3% stabilization levy to the Board and expect to receive asubsidy if prices decrease. In addition there is an export tax of 7% of

the FOB price over WS$800 per ton.

Price projections have been made using the "World Bank Price

Prospects for Major Primary Commodities" published in January, 1980. Todetermine the net FOB price at Apia, adjustments are made for transit loss

in weight (2%), freight (currently $106.70) 7% exportl ax, 3% stabilizationlevy and 15 per cent for insurance and other charges.-

Table 13: PRICE PROJECTIONS FOR COCOA

World Bank FOB Prices Projected PricesProjected Prices Apia to WSTEC

YEAR (Constant 1980 US cts/kg) (WS$/MT) (WS$ / MT)

1976 352 2,703.80 2,458

1981 333 2,552.00 2,3201982 323 2,472.80 2,2481985 268 2,036.10 1,851

1990 183 1,360.70 1,237

1/ These are the charges currently used by the Cocoa Board in WesternSamoa to determine FOB price at Apia for purposes of determining

appropriate producer prices.

-113 -

Appendix 13

Page 28

On examining the World Bank projections and the pricesreceived by WSTEC for Cocoa for the period 1976-79, it was evidentthat the two price series compared favourably (Table 14).

Table 14: PRICE SERIES COMPARISON FOR COCOA

WORLD BANK Price ReceivedCurrent Dollars Net FOB by WSTEC

Year cts/kg WS$/M.T. Apia WS$/MNT.

1976 205 1,911 1,433 1,2581977 379 3,533 2,682 2,7111978 340 3,169 2,391 2,6001979 327 3,048 2,290 2,383

In view of the close historical relationship between theprojected international prices (net FOB Apia) and the price received byWSTEC, the World Bank projected price series apprppriately adjusted forfreight, insurance, handling-and other charges was used in the financialanalysis. In the case of the economic analysis, the net FOB pricepresented above was adjusted for the levies charged as export duty (7%)and 3% to the price stabilization fund.

C. BEFF

The average beef price (WS$ 800 per ton) obtained by WSTEC in1979 was used in both the financial and economic analyses since nointernational trading of carcass beef takes place in Western Samoa.

D., SOAP

The prices used in the financial and economic analyses areexport prices received by WSTEC in their current operations for laundryand toilet soap. Although the domestic market price is slightly lower,it was reasonable to use in the financial analysis since an upwardrevision in prices was likely with improvements in quality envisagedwith the commissioning of the new plant. For soap powder, a conservativeprice has been used based on current prices for imported soap powder onthe domestic market. The prices used in the analyses are given inTable 15.

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Appendix 13Page 29

Table 15: SAMOA BRAND SOAPS EXPORT PRICES (US$)

Export PricePer Carton

Toilet Soap 72 per ctn $ 16.65Bath Soap - 100 per ctn $ 32.65Laundry Soap - 28 per ctn $ 17.50Soap Powder - Price/ton $1,200(proj ected)

E. COCONUT STEM PRODUCTS

The main products from the coconut stem available for domesticuse and exports are lumber, fence posts, charcoal and fuelwood. In thecase of fence posts and fuelwood, since the product would be entirelyfor the local market, current domestic market prices have been used inboth the financial and economic analyses. In the case of lumber andcharcoal, the current local and internatipnal prices for Western Samoaproducts have been used in the financial analysis. In the case of theeconomic analyses, the border prices (FOB Apia) have been used.

- 115 -

Appendix 13Page 30

IV. Assumptions Made in the Financial and Economic Evaluation

1. The economic life of the project components viz. estate reha-bilitation, soap manufacture and coco stem product utilizationhave been assumed to be 25 years. It would be pertinent tonote that the physical life of the plantations and the machineryprovided would extend beyond the project life assumed forpurposes of analyses. No salvage values have been assumed atthe end of the project life. Replacement costs for machinery andequipment have been included in the analysis.

2. The project has been evaluated on a incremental basis over theeconomic life of the project. The incremental benefits and costshave been computed using existing costs and benefit streams ofthe respective project components as the datum.

3. The assumptions relating to yield and other technical coefficientsare discussed in Appendix 13, pages 2-9. . The projections areconservative estimates taking into consideration relevant technicalparameters and existing management capacity in the country.

4. The prices of output for the respective project components arediscussed in Appendix 13, pages .25-29. In the financial analysis,the prevailing market prices i.e., local and international priceswhere appropriate have been used.

In the economic analysis, all traded goods have been valued attheir marginal (border) prices i.e., FOB Apia price converted todomestic currency at the OER. In cases where there is nocomparable international price (non-traded goods) e.g. fence posts,the current purchasing price indicating consumer willingness to paywas used.

5. The prices of inputs for the respective project components arediscussed in Appendix 13, pages 10-24. For all goods andservices which are traded, the prices used in both the financialand economic analyses have been the marginal international (border)prices adjusted for the resource costs of individual transport,handling and distribution. Since, there are no import restrictionson the goods required for the project and no domestic industriesproducing item. which could provide any sizeable requirements ofthe project, it was considered convenient and appropriate to useCIF prices suitably adjusted for local costs of handling anddistribution in both the financial and economic analyses.Non-tradable items such as buildings were also broken down intotradable and non-tradable items and accordingly priced. Non-tradable items were priced at the local purchase price.

-16 -

Appendix 13Page 31

In the case of unskilled labour, the market wage rate ofWS$ 2.50 per day was used in the financial analysis. However,in the economic analysis this was considered to be above theopportunity cost for rural labour. According to a recent studyin Western Samoa, the subsistence production per capita amountedto WS$ 1.50 per day. In view of the social organization whichprevails in Samoa where there are considerable transfer paymentswithin families and the psychological preferences for leisurevis-a-vis work, the shadow wage rate was imputed to be WS$ 1.75.A conversion factor of 0.7 was therefore applied in the economicanalysis to the market wage rate for unskilled labor used in thefinancial analysis.

6. No import duties and taxes will be charged on capital goods andproduction goods imported for the project as in the case of theother loans to Western Samoa. No adjustment for transfer pay-ments were therefore necessary in the economic analysis.

7. The official exchang! rate used in the analyses is US$1.00WS$ 0.9139 which was the mid-rate prevailing over the three monthsup to the time of appraisal. The unofficial rate for theUS Dollar was very close to the OER. In view of the lack of anyserious distortion in the exchange rate, no shadow exchange ratewas computed for the analysis.

8. The following contingency factors were used in the analyses:

1980 1981 1982 1983 1984 1985

Price Rise Index: 10.5% 9% 8% 7% 7% 7%

Physical Contingencies

Civil Works at 15/Equipment and Materials at 10%Consulta\lcy Services at 5%

9. A Sensitivity Analysis to determine the financial and economicviability of the project to changes in key aggregate variables wasconducted and are reported in Appendix 13, page 43, Table 27.

10. In the case of the Agricultural Research and Extension component,no cost-benefit analysis was conducted, since the benefits of theproject could not be precisely estimated. Details of the costappear in Appendix 8.

TABLE 16;, FINANCIAL ANiALYSIS VAIPAPA ESTATE

ITFWHYEAR 1 2 3 4 5 6 7 8 9 10 it 12 13 14 15-25WJITHiOUT PROJECTINCOME (Ws$ 16000)Coconuts:Copra Yield (lb/acre) 667 667 650 625 600 575 550 525 500 475 450 400 400 400 400Production, 1,635 ac. (tons) 487 487 474 456 438 420 401 383 365 347 328 292 ?q7 292 292Price per ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 331Tocal Tncome Copra 160.2 -153.4 156.9 158.2 159.0 149.9 140.8 132.1 123.7 115.6 109.2 97.2 97.2 97.:? 97.'.Cattle

Income Cattle 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 343Total Income Witrhout Project 168.2 161.4 164.9 166.2 167.0 157.9 148.8 140.1 13t.7 123.6 117.2 105.2 105.2 105.2 10_.COSTS (WS$ '000)P?roduction & Selling Costs-Copra($35.17) 57.5 5745 57.5 57.5 57.5 57.5 57.5 57,5 57.5 57.5 57.5 57.5 57.5 `7. 5 57.5Cattle Hlusbandry 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 1. 7 0.Total Costs Wi-hout Project 58.2 58.2 58.2 58.2 58.2 58.2 58.2 58.2 .58.2 58.2 58.? 58.2 58.2 53.2 58.2WIHPROJECT

INCOM (ws$ '000)Coconuts:535 Acres Fertilised

Copra Yield (Ilbacre) 667 667 8`5 1.075 1,250 1.250 1,250 1,250 1,250 1,250 1,250 1,250 1.25:)1 1,250 1.250Production (tons) 189 189 234 305 354 354 354 354 354 354 354 354 354 354 3541,0 ce elneCopra Yield (lb/acre-new plantings) 20 70 150 260 450 650 860 1,.080 .1.10 1.470Copra Yield (lb/acre - existing stand) 667 667 650 625 600 575 550 525 500 375 250 125 --Production (tons) 298 298 290 279 268 266 277 301 339 368 402 440 482 585 656Total Production of Coors 487 487 524 584 622 620 631 655 693 722 756 794 836 939 1.010

Price aer, ton 329 315 J311 347 363 357 351 345 339 333 33 13 3133 13Total Income Copra (WS5$ '000) 160.2 153.4 173.4 202.6 225.8 221.3 221.5 226.0 234.9 240.4 251.7 264.4 278.4 312.6 336.3Cocoa:120 Acres New ?lantinxs

Cocoa Yield (lb/acre 180 450 675 900 1.200 1,300 1,400 1,4,00 1,400Production (tons) t0 24 36 48 64 70 75 75 75 120ArsNew Plantin aCocoa Yield (lb-/acre I80 450 675 900 1,200 1,300 1,4.00 1,400Production (tons) 16 40 60 80 107 .116 125 1.25Total Production of Cocoa 10 40 76 108 144 177 191. 200 200Price per ton 1.606 1.483 1.360 1.237- 1.237 1.237 1,237 1.237- 1,'37Total Income Cocoa CWJS$'000) 16.1 59.3 103.4 133.6 178.1 218.9 236.3 247.4 247.4income from Cattle 8.0 15.2 24.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0Total Income With Project 168.2 168.6 197.4 234.6 257.8 253.3 269.6 317.3 370.3 406.0 461.8 515.3 546.7 592.0 615.8COSTS (WS$-000)

Production & Selling Coats Copra 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5 57.5Production &Selling Costa Cocoa - - - - - - 15.2 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4Cattle 'Hu-bandry 0.7 1.3 1.9 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5Colt of Fertilising 635 Acres Coconuts 4.3 4.3 4.3 4.3 20.5 20.5 20.5 20.5 20.5 20.5 20.5 20.5 20.5 20.5Co.,t of Replanting 1,000 acres Coconuts 25.3 35.1 44.2 53.3 62.4 65.6 67.9 69.9 66.4 64.4 62.4 60.4 58.4 58.4 55.8Cost of Planting 320 acres Cocoa - - - 37.7 73.0 34.4 35.9 37.4 32.5 24.0 24.2 24.0 24.2 24.0 24.2Cost of Pasture Improvement - 3.0 6.0 9.0 1.4 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 dFertiLiser Investment Costs 2.2 21.6 25.9 36.4 47.7Fencing 16.7 33.5 16.7 (lq ~Wa ter Supply 52.3 41.3 :Roads 58.4

CBuildings 74.6 74.6 )..Vehicles & Equipment 59.5 - - - - 60.4 -- 25.4 - 60.4 -Cntingencies 86.7 85.4 48.6 84.4 132.2

Tot~al Costs With Project 433.9 357.6 205.1 285.1. 381.0 245.8 204.41 233.1 250.1 214.2 '772.8 210.2 '08.4 208.2 205.icremental Income 0 7.2 32.5 68.4 90.8 95.4 120.8 177.2 238.6 282.4 344.6 410.1 441.5 486.8 5106Incremental Cost 375.7 299.4 146.9 226.9 322.8 187.6 146.2 174.9 191.9 156.0 214.6 152.0 150.7 150.0 147.6-Wet Cash Flow (375.7) (292.2) (114.4) (158.5) (232.0) (92.2) (25.4) 2.3 46.7 126.4 130.0 258.1 '91.3 336.8 3 63. 0 lFinancial Internal Rate of Return: 9.8% a! Net Increment in:-

Years 16& 21 : 302.6

YearA 17 & 5: 337.6

TABLE 17: FINANCIAL ANALYSIS - TAUSAGI ESTATE

1981r T EM/ Y EAR A 1 2 3 4 5 6 7 8 9 o10 i 12 13 14 15-25

WIT-OUT PROJECTI !;o, ( WS $S-rooCoconuts:Coprs Yield (lb/acre) 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 I,OW 1.000 1,000 L,000 1.000

Production-tons (790 ac) 353 353 353 353 353 353 353 353 353 353 153 353 353 353 353

.. rice per ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333

7otal Income Copra 116.1 111.2 116.8 122.5 128.1 126.0 123.9 121.8 119,7 117.5 117.5 117.5 117.5 117.5 117.5

C15is 0("SS '000)

CoccnutsProduction & Selling Costs -Copra '7.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8

W'ITH PROJECTXl2Cc.e (iS- ' 000)Fertilise 790 Ac CoconucsCoors Yield (lb/acre) 1,000 1,000 1,200 1,400 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 L,500

?roduction-tons 353 353 423 494 529 529 529 529 529 529 529 529 529 529 529

Price pPr ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333

moral Income Copra 116.1 111.2 140.0 171.4 192.0 188.9 185.7 182.5 179.3 176.2 176.2 176.2 176.2 176.2 176.2-

OCOA2'0 ac'Cocoa Yteld (lblacre 180 450 675 900 1,200 1,300 1,400 1,400 1,400 1,400 1,400 1,400 0

'roduction tons 16 40 60 80 107 116 125 125 125 125 12 5 125

150 aCCocoa Yield (lb/acre) 180 450 675 900 1,200 1,300 1,400 1,400 1,400 1.400 1,400

Production-tons 12 30 45 60 80 87 94 94 94 94 Q4

"Total Production 16 52 90 125 167 196 212 219 219 219 219 219

Price ger ton 1.984 1IS51 1.729 1.606 1.483 1.360 1.237 1.237 1.237 1.237 1,237 1,?37

Total Income Cocoa 31.7 96.3 155.6 200.8 247.6 266.6 262.2 270.1 270.1 270.1 270.1 270.1

Total Income - With Project 116.1 111.2 140.0 203.1 288.3 344.5 386.5 430.1 445.9 438.4 446.3 446.3 446.3 446.3 4L6.3

COSTS (wS$'"000)Pro>duction & Selling Costs - Copra 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27.8 27,8 27.8 27.8 27.8 27.8 27.8 27.8

Production & Selling Costs - Cocoa 25.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2

Fertilise 790 Ac Coconuts - 3.6 3.6 3.6 3.6 23.7 23.7 23.7 23,7 23.7 23.7 23.7 23.7 23.7 23.7

Plant 350 Ac Cocoa 62.9 63.9 29.8 31.4 32.2 32.6 26.4 26.3 26.4 26.3 26.4 26.3 26.4 26.3 -S.4

Fertiliser Investment Costx 8.8 31.3 28.2 28.6 28.9

Fencing 18.5 18.5

Water Supply - 73.9

Roads 54.7

Buildings 15.1 15.1 15.0

Vehicles & Equipment 66.9 - - - - 31.2 - - 65.0 - 31.2

Cantingencies 68.0 82.5 38.3 38.2 45.3

Total Costs - With Project 322.7 316.6 342.1 154.8 182.0 159.5 122.1 122.0 187.1 122.0 153.3 122.0 122.1 122.0 122.1

Incremental Incose 0 0 23.2 80.6 160.2 218.5 262.6 308.3 326.2 320.9 328.8 328.8 328.8 328.8 328,8

incremental Costs 294.9 288.8 114.9 127.0 154.2 A31.7 94.3 94.2 159.3 94.2 125.5 94.2 94.3 94.2 94.3

fSee Cash Flov (294.9) (288.8) (91.7) (46.4) 6.0 868 168.3 214.1 166.9 226.7 203.3 234,6 234.5 234.6 234.5 af

Financial Internal Rate of Return: 15.7' a/ Net Incremnt In:

Years 16 & 21: 203.3Years 17 & 25: 169.5

.,,

TAILE I &: ' INAtNCIAL ANALYSEIS - FALEATA ESTATE

1981

MtEM/YEAR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15-25

Z1r1,01VT PROJECT

N;CWYE (WS$'000)Coconu, ts

Ccpra Yield (lb/acre) 774 774 774 774 774 774 774 774 774 774 774 774 774 774 771.

Prcduction, 1,128 ac (tons) 390 390 390 390 390 390 390 390 390 390 390 390 390 390 390

Price -er ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333

Total Tncome - Copra 128.3 122.9 129.1 135.3 141.6 139.2 .136.9 134.6 132.2 129.9 129.9 129.9 129.9 129.9 129.9Cattle Inco.e 22.4 2 2.4 22.4 22.4 22.4 22.4 22.4 22.4 4 2Z.4 i2.4 22.4 22.4 22.4 22.4 22.4

.otal Income Without Pr.ject 150.7 145.3 151.5 157.7 164.0 161.6 159.3 157.0 154.6 152.3 152.3 152.3 152.3 152.3 152.3

SJTS (ws$'000)Production & Selling Costs - Copra 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7

Cattle Husbandry 1.8 1. 8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8

otal Costs Without Project 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5 41.5

1Thn ?2ROJECT:sC'.ME (SS$°000)

Coconu ts

-?ra Yield (lb/acre) 774 774 1,000 1,250 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500

Prcduction, 1,128 ac (tons) 390 390 504 630 755 755 755 755 755 755 755 755 755 755 755

Prize aer ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333

rotal Income - Copra 128.3 122.9 166.8 218.6 274.1 269.5 265.0 260.5 255.9 251.4 251.4 251.4 251.4 251.4 251.4

ocoa

50 Acres New Plantings

Yield (lb/acre) - - - - 180 450 675 900 1,200 1,3G0 1,400 1,400 1,400 1.,-30 1,'00

Production (tons) - - - - 4 10 15 20 27 29 31 31 31 31 31

100 Acres New Plancin a

Yield (lb/acre) - - - - - 180 450 675 900 1,200 1,300 1,400 1,400 1,400 1,400

Production (tons) - - - - - 8 20 30 40 54 58 62 62 62 52

rct. Cocoa Production - - - - 4 18 35 50 67 83 89 93 93 43 93

Price ner ton - - - 1.851 1,729 1,606 1.483 1,360 1,237 1.237 1.237 1,237 t,237

1,237

Income from Cocoa - - - - 7.4 31.1 56.2 74.2 91.1 102.7 110.1 115.0 115.0 115.0 115.0income from Cattle 22.4 29.6 36.8 44.0 52.8 52.8 52.8 52.8 52.8 52.8 52.8 52.8 52.8 52.3 52.8

Total Income With ProJect 130.7 152.5 203.6 262.6 334.3 353.4 374.0 387.5 399.8 406.9 414.3 419.2 419.2 419.2 419.2

COSTS (2.S$'000)Production & Selling Costs - Copra 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7

Production & Selling Costs - Cocoa - - - - 6.3 18.9 18.9 18.9 18.9 18.9 18.9 18.9 18.9 18.9 18.9

Cattle Husbandry 1.9 2.4 2.9 3.5 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0

Cost of Pasture Improvenent - 3.9 4.5 5.1 4.8 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7 8.7

Plantin3 150 Acres Cocoa - 15.8 35.7 12.7 13.3 17.6 15.5 11.3 11.4 11.3 11.4 11.3 11.4 11.3 11.4

Fertilise 1,128 Ac Coconuts - 5.1 5.1 5.1 5.1 33.8 33.8 33.8 33.8 33.8 33.8 33.8 33.8 33.8 33.8

Investment Cost of Fertiliser - 32.3 37.4 37.0 38.8 -

Fencing - 13.3 13.3 -

Water Supply 54.3 27.6 - -

Roads - 58.1 - -3uildings - 38.8 38.7 -

Vehicles & Equipment 92.6 - - - - 39,2 73.4 - 59.2

Contingencies 44.0 78.0 67.4 35.9 43.4

Total Costs With Project 232.5 315.0 244.7 139.0 155.4 181.9 120.6 116.4 189.9 116.4 175.7 116.4 116.5 116.4 116.5

Incre:rental Income 0 7.2 52.1 104.9 170.3 191.8 214.7 230.5 245.2 254.6 262.0 266.9 266.9 266.9 266.9

Increcental' Costs 191.0 273.5 203.2 97.5 113.9 140.4 79.1 74.9 148.4 74.9 134.2 74.9 75.0 74.9 75.0

St Ch Flo (191.0) (266.3) (151.1) 7.4 56.4 51.4 135.6 155.6 96.8 179.7 127.8 192.0 191.9 192.0 191.9

Financial Internal Rate of Return: 1S.Z a/ Net Increment In:

Years 16 & 21 : 132.7

Years 17 & 25 118.5

(D CD

Tr

TABLE 19. FINANCTAL ANALYSIS -CASALA fSTATE

1981.ITEM/YEAR 1 2 3 4 5 6 7 8 9 10 1.1 12 13 14 15-25

.'3'T'iT PROJECTticCCx (14S$ COO)Copra Yield (lb/acre) 177 177 177 177 L77 177 177 177 177 177 177 177 177 177 1,77

7r~~'4uction, 392 at (tons) 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31

Price per ton M1J5) 329 315 331 347 363 357 351 345 339 333 333 333.- 333 333 333

-income from Coprz 10.2 9,8 10.3 10.8 11.3 lilt 10.9 10.8 10.5 10.3 10.3 103 10.3 10.3 10.3

Cozaa Yield (blbacre) 301 301 301 301 301 301 301 301 301 301 301 301. 301 301 331i

P: e c -$230 229 ,1 l8 ,851- 17 29 1.606 1,D.60 1 ____ 1,237 1."'' 1,237 1,237 :.z2 '1--:fro-i Cnzoa 25.5 24.7 23.7 21.8 20.4 19.0 17.7 16.3 15.0 13.6 13.6 i,.6 13.6 .

'j noelftotPoect 35.7 34.5 34.0 32.6 31.7 30.1 2,8.6 2). 25j 3.9 23.9.. 2).15 _2

Frz-duction & Selling Costs - Copra 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13,8 13.8 13,0 13.8 13.n3 13.8 13.? i7.PProdaiction & Selling Copts - Cacon 10.3 10.3 10.3 10.3 10.3 10.3 10.3 10.3 10.3 10,3 10.3 ..0 3 10.3 1.0.3 X.0.

irotal Costs Without Pro;ect 24.1 24.1 24.1 24.1. 24.1 24.1 24,1 24.1 24.1 24.1 24.1 24,1 24.1 24Al 2-..

'7TV PROJECT

.NOCHE (,.JS$'000)

zcpo-3 Yield (blbacre) 177 1.77 275 475 600 600 600 600 600 600 600 600 600 600 '600

Productio,-n. 392 ac (tons) 31 31 48 83 105 105 105 105 1.05 105 105 1.05 105 1.05 105

Price pet ton - !L4S$ 329 31.5 331 347 363 357 351 345 339 333 333 333 333 333 333

Income from Copra 1.0.2 9.8 15.9 28.8 38.1 37.5 36.9 36.2 35.6 35.0 35.0 35,0 35.0 35.0 35.0

Cocoa:"=kgres Existing CocoaCocoa Yield (1b/acr.) 301 430 480 480 480 480 480 480 480 480 480 4R0 48Q0 480 480

production -tons 11 15 17 1.7 17 17 17 17 I 7 17 17 17 17 17 17 N

100 Acres Neil PlantingsYf.ld (Ib/scre) - - - - - 180 450 675 900 1, 200 1.300 1,400 1,400 1,400O 1,400Production - - --- 8 20 30 40 54 58 62 62 62 52 £

80 -9res NewPlantingYield (lb/ acre - - - --- 180 450 675 900 1,200 1,300 1,400 1,400 1,400

Production - - - - - - 6 16 24 32 43 46 50 50 50

Total Cocoa Production it 15 17 17 17 25 43 63 81 103 118 125 129 129 129j'rice per ton 2,320 2.248 2,115 1.983 1,851 1.729 1.606 1,483 1.360 1.237 1,237 1.237 1,237 1,237 1,237

Income frosm Cocoa 25.5 33.7 36.0 33.7 31.5- 43.2 69.1 93.4 110.2 127.4 146.0 154.6 159.6 159.6 159.6Total Income With Project 35.7 43.5 51.9 62.5 69.6 80.7 106.0 129.6 145.8 162.4 181.0 189.6 194.6 194.6' 194.6

M~STS (WJS$'ODO)Production & Selling Costs - Copra 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13.8 13,8

Prodiction & Selling Costs - Cocoa 10.3 10.3 10.3 10.3 10.3 23.0 33.1 33.1 33.1 33.1 33.1 33.1 33.1 33,1 33.1

Fertilise 392 Ac Coconuts - 1.8 1.8 1.8 1.8 11.7 11.7 11.7 11.7 11.7 1.1.7 11.7 11.7 11.7 11.7Fertilise 82 ac Cocoa - 0.4 0.4 0.4 0.4 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1L8 1.8 1.8Planting 180 acres of Cocoa - - 31.5 33.5 15.3 20.5 21.1 16.9 13.6 13.5 13.6 13.5 13.6 1.3.5 13.6Fertiliser Investment Coats - 11.3 15.7 17.2 1.5.5Fencing - - 9.8Water Supply 9.6 9.4 - -

Roads - 53.6 - -

Su 1z! tngs 15.6 15.5 15.4Vehicles & Equipement 50.4 - - -- 25.2 - 44,9 - 25.2Contingencies 22.6 36.8 37.3 31.7 23.1'otai Costs With Projlect 122.3 152.9 136.0 108.7 80.2 96.0 81.5 77.3 118.9 73.9 99.2 73,9 74.0 73.9 74.0

Incren-ental Income 0 9.0 1.7.9 29.9 37.9 50.6 77.4 102.5 120.3 138.5 157.1 165.7 170.7 170.7 170.7

Incremental Costs 98.2 128.8 111.9 84.6 56.1 71.9 57.4 53.2 94.8 49.8 75.1 49.8 49.9 49.8 49.9

N4et Cash FIov (98.2) (119.8) (94.0) (54.7) (18.2) (21.3) 20.0 49.3 25.5 88.7 82.0 115.9 120.8 120.9 1.20.8 &L

Financial Internal Rate of Return: 11.9% a/Nat Increment in: [

Years 16 & 21.: 95.6

years 17 & 25: 75.9

I 1

TABLZ 0: FINANCIAL ANALYSIS - TlANA'IMATO eSTATE

1961.ITEM/YEAR I 2 3 4 5 6 7 8 9 10 tl 12 13 14 15-25

'ITHOCT PROJECTtNCOE (WsSS'°°°)

930 Acres Coco&:Cocoa Yield (lb/acre) 279 279 279 279 279 279 279 279 279 279 279 279 279 279 2?9Production (tons) 115 115 115 115 115 115 115 115 115 115 115 115 115 115 115Price per ton 2.320 2.248 2.165 1.963 1.851 1.729 1.606 1.483 1.360 *1.237 1.237 1,237 1.237 ;,237 1,237,Ircorne from Cocoa 266.8 258.5 243.2 228.0 212.9 198.8 184.7 170.5 156.4 142.3 142.3 142.3 142.3 142.3 142.3

159 Acres Coconuts:Copra Yield (lb/ac) 774 774 774 774 774 774 774 776 774 774 774 774 774 774 774

Production (tons) 55 55 55 55 S5 55 55 55 55 55 S5 55 S5 ;5 ;5Price per ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333incone from Copra 18.1 17.3 18.2 19.1 20.0 19.6 19.3 19.0 18.6 18.3 18.3 18.3 18.3 18.3 18.3

Total Income Without Project 284.9 275.8 261.4 247.1 232.9 218.4 204.0 189.5 175.0 160.6 160.6 160.6 160.6 160.6 16'.6

COSTS1rodution & Selling Cocoa 117.4 117.4 117.4 117.4 llJ.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.- 117.4

Pruning (4.0 .:) 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2Production & Selling Copra 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6

Total Costs Without Project 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2 132.2

'WT PROJECTixCOME (WS$'000)930 Acres Cocoa:

Cocoa Yield (lb/acre) 279 430 480 480 480 480 480 480 480 480 480 480 480 480 480Preduction (tons) 115 179 199 199 199 199 199 199 199 199 199 199 199 199 199Inco. from Cocoa 266.8 402.4 420.9 394.6 368.3 344.1 319.6 295.1 270.6 246.2 246.2 246.2 246.2 246.2 246.2

159 Acres Coconut:Copra Yield (lb/acre) 774 774 1,000 1,250 1,500 1,500 1,500 1,500 1.500 1,500 1,500 1,500 1,500 1,500 1,500 'z

Production (tons) 55 55 71 89 106 106 106 106 106 106 106 106 106 106 106Incene from Copria 18.1 17.3 23.5 30.9 - 38.5 37.8 37.2 36.6 35.9 35.3 35.3 35.3 35.3 35.3 35.3

Total Income With Project 284.9 419.7 444.4 425.5 406.8 381.9 356.8 331.7 306.5 281.5 281.5 281.5 281.5 281.5 281.5COST5 (WS$'000)production & Selling Costs - Cocoa 117.4 117.4 17.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4 117.4Production & Selling Costs - Copra 5.6 5.6 5.6 5.4 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6Pruning Cocoa 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2 9.2Fertilise 930 Ae Cocoa - 4.2 4.2 4.2 4.2 19.8 19.8 19.8 19.8 19.8 19.8 19.8 19.8 19.8 19.8Fertilise 159 Ae Cocornts - 0.7 0.7 0.7 0.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7 4.7Fertiliser Invetment Costs - 19.6 19.6 19.6 19.6Fencing - - 16.0

Water Supply 10.1 10.1Roads - - 53.8

suildings 21.2 21.2 21.1Vehicles & Equipment 120.5 - - - - 50.5 - - 86.6 - 50.5

Contingencies 45.5 22.3 57.7 14.7 17.2Total Costs With Project 329.5 210.3 305.3 171.4 173.9 207.2 156.7 156.7 243.3 156.7 207.2 156.7 156.7 156.7 156.7

Incrcmental Income 0 143.9 183.0 178.4 173.9 163.5 152.8 142.2 131.5 120.9 120.9 120.9 120.9 120.9 120.9Incrental Costs 197.3 78.1 173.1 39.2 41.7 75.0 24.5 24.5 111.1 24.5 75.0 24.5 24.5 24.5 24.5

-et Cash Flow (197.3) 65.8 9.9 139.2 132.2 88.5 128.3 117.7 20.4 96.4 45.9 96.4 96.4 96.4 96.4 a/

Financial Internal Rate of Return: 39.9% a/ Net Increment In: >

Years 16 & 21 45.9 Q r'Years 17 & 25 9.8 i(D

1S g

TAILE 2 1: FINANCIAL ANALYSIS - LESEA ESTATE

1981ITEM/YEAR 1 2 3 4 5 6 7 8 3 10 11 12 13 14 15-25

WITHOUT PROJECTINCOtE

Coconuts - 150 AcCopra Yield (lb/acre) 424 424 424 424 424 424 424 424 424 424 424 424 424 424 424Production (tons) 28 28 28 28 28 28 28 28 28 28 28 28 28 28 28Price per ton 329 315 331 347 363 357 351 365 339 333 333 333 333 333 333Total Income from Copra 9.2 8.8 9.3 9.7 10.2 10.0 9.8 9.7 9.5 9.3 9.3 9.3 9.3 9.3 9-3Cocoa - 150 ACCocoa Yield (lb/acre) 319 303 288 274 260 247 235 223 212 201 191 181 172 163 155Produiction - tons 21 20 19 18 17 17 16 15 14 13 13 12 12 11 10Price per ton 2,320 2.248 2,115 1.983 1[851 1,729 1,606 1.483 1.360 1,237 1,237 1,237 1.237 t,237 1,237Total Income - Old Cocoa 48.7 45.0 40.2 35.7 31.5 29.4 25.7 22.2 19.0 16.1 16.1 14.8 14.8 13.6 12.4Cocoa - 75 AcYield (lb/acre) - - 60 150 225 300 350 400 400 400 400 400 400 400 400Production - tons - - 2 5 8 10 17 13 13 13 13 13 13 13 13Total Income - Nlew Cocoa - - 4.2 9.9 14.8 17.3 19.3 19.3 17.7 16.1 16.1 16.1 16.1 16.1 16.1Total Income - Cocoa 48.7 45.0 44.4 45.6 46.3 46.7 45.0 41.5 36.7 32.2 32.2 30.9 30.9 29.7 28.5rotal Income Without Project 57.9 53.8 53.7 55.3 56.5 56.7 54.8 51.2 46.2 4L.5 41.5 40.2 40.2 39.0 37.8COSTS:Production & Selling Costs - Copra 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3Production & Selling Costs - Cocoa 18.9 18.9 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4Pruning Cocoa 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8Total Costs Without Project 25.0 25.0 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5 34.5- 34.5 34.5 34.5 34.5

VITH PROJECTINCOME150 Acres Cocoa/Coconuts 57.9 53.8 49.5 45.4 41.7 39.4 35.5 31.9 28.5 25.4 25.4 24.1 24.1 22.9 21.7Cocoa 75 AcresCocoa Yield (lb/acre) - - 120 30Q 450 600 675 750 800 800 800 800 800 800 800 t>Production - tons - - 4 10 15 20 23 25 27 27 27 27 27 27 27 'VPrice per ton - - 2.063 1.957 1.851 1.729 1.606 1,483 1.360 1.237 1.237 1.237 1.237 1,237 1.237Income from New Cocoa - - 8.3 19.6 27.8 34.6 36.9 37.1 36.7 33.4 33.4 33.4 33.4 33Total Income With Project 57.9 53.8 57.8 65.0 69.5 74.0 72.4 69.0 65.2 58.8 58.8 57.5 5 75 56.3 55.1COSTS:Production & Selling Costs - Copra 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 5.3 - 5.3 5.3 5.3 5.3 5.3Production & Selling Costs - Cocoa 18.9 18.9 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4 28.4Prune Cocoa 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8Fertilise 75 Ac Cocoa - 0.3 0.3 0.3 0.3 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6 1.6Fertiliser Investment Costs - 1.3 1.3 1.3 1.3Fencing - - - 4.7Water Supply - 25.7 9.8 -Roads - 7.3Buildings - 52.0 -Vehicles & Equipment 8.8 - - - - 10.7 - - 10.7Continencies 2.6 31.7 9.4 3.8 1.1Total Costs With ?ro1iect 36.4 136.0 62.6 44.6 37.2 46.8 36.1 36.1 36.1 36.1 46.8 36..1 36.1 36. 36.1Incremental Income 0 0 4.1 9.7 13.0 17.3 17.6 17.8 19.O 17.3 17.3 17.3 17.3 17.3 17.3Incremental Costs 11.4 111.0 28.1 10.1 2.7 12.3 1.6 1.6 1.6 1.6 12.3 1.6 [61.6 1.6.Nt lash tLom (11.4) (111.0) (24.0) (0.4) 10.3 5.0 16.0 16.2 17.4 15.7 5.0 15.7 15. 7 15.7 15. 7

Ftnanctal Internal Rate of Return: 5.52 a/Net Increment In: 1

Years 16 & 21: 5.0 ro*8 I^ P

A I.; C

TAILE Z2: FINANCIAL ANALYS IS- TAFAir.ATA ESTATE

1981ITEM/YE-AR 1 2 3 4 5 6 7 8 9 10 11 12 13 14 L5-25

WITHOUT PROJECT

Coconuts - 693 acCopra Yield (LbTacre 100 200 3C0 400 500 600 700 700 700 700 700 700 700 700 700Production (tons) 31. 62 93 124 1.55 186 217 217 2 L7 21.7 217 21.7 217 217 21.7?ice per ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333icome from Copra 1.0.2 19.5 30.8 43.0 56.3 66.4 76.2 74.9 73.6 72.3 72.3 72.3 72.3 72.3 72.3

Cocoa - 693 AcCocoa Yield (lb/acre) 308 3b8 308 308 308 308 308 308 308 308 308 308 308 308 305Poduction - tons 95 95 95 95 95 95 9 59 59 59 59Pice per ton 2.320 2,246 2,115 1.983 1,851 L,729 1.606 1.483 1.360 1,237 1,237 1.237 1.237 1.237 1.237icone from Cocoa 220.4 21.3.6 200.1. 188.4 175.8 1.64.3 1.52.6 140 .9 129.2 117.5 117.5 117.5 117.5 1.17.5 117.5

Total Income Without Project 230.6 233.1 230.9 231.4 232.1 230.7 228.8 21.5.8 202.8 1.89.8 189.8 189.8 189.8 189.8 189.8COSTSProduction & Selling Costs - Copra 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24..-.tmrzduction & Selling Costs - Cocoa 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 837. 5 87.5 87.5 87.5 f 7.i

Pruning Cocoa 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Total Costs Without Project 1.16.9 1.16.9 116.9 116.9 116.9 116.9 1.16.9 116.9 116.9 116.9 116.9 11.6.9 116.9 116.9 116.9

WIYPROJECTI\NCCIECoconuts - 693 Ac

Cpra Yield (lb/acre) 100 200 400 600 800 1,000 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1.zooPro-duction - tons 31. 62 124 186 258 319 371 371 371 371. 371 371 371 371. 371Price per ton 329 315 331 347 363 357 351 345 339 333 333 333 333 333 333

Incoc:e from Copra 10.2 19.5 41.0 64.5 93.4 1.10.3 1.30.2 128.0 M?.8 123.5 123.5 123.5 135 L23.5 123.5Cocoa :- 693 Ac "4

Ccoa Yield (lb/acre) 308 475 530 530 530 530 530 530 530 530 530 530 530 530 530 UL-Production - tons 95 147 164 164 164 164 1.64 164 164 164 164 164 164 t64 164Pice per ton 2,320 2.248 2,115 1,983 . 1,851 1,729 1.606 1,483 1.360 1.237 1,237 1.237 1,237 1,237 1,237

Income from Cocoa 220.4 330.5 346.9 325.2 303.6 283.6 263.4 243.2 223.0 202.9 202.9 202.9 202.9 202.9 202.9Total Income With Project 230,6 350.0 387.9 389.7 397.0 393.9 393.6 371.2 348.8 326.4 326.4 326.4 326.4 326.4 326.4,OOSTS5:Production & Selling - Coconut 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4 24.4Production & Selling - Cocoa 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5 87.5Prune Cocoa 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Fertilise 693 Ac Coconuts - 3.2 3.2 3.2 3.2 20.8 20.8 20.8 20.8 20.8 20.8 20.8 20.8 20.8 20.8Fertilise 693 Ac Cocoa - 3.2 3.2 3.2 3.2 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8 14.8Fertiliser Investment Costs - 29.2 29.2 29.2 29.2Fencing - - - 3.7Water Supply - 23.7 --

Roads - - - 43.8luildings 12.5 12.5 12.5 -

Vehicles & Equipment 54.6 - - - - 31.2 -- 44.6 - 31.2

Contingencies 20.1. 28.7 24.1 49.9 24.9Total Costs With Project 204.1 217.4 189.1 249.9 177.4 183.7 152.5 152.5 197.1 152.5 183.7 152.5 152.5 152.5 152.5Incremental Income 0 116.9 1.57.0 158.3 1.64.9 163.2 164.8 1.55.4 146 .0 136.6 136.6 136.6 136.6 136.6 136.6Incremental Cost 87.2 100.5 72.2 133.0 60.5 66.8 35.6 35.6 80.2 *35.6 66.8 35.6 35.6 35.6 35.6Net Cash Flow (87.2) 16.4 84.8 25.3 104.4 96.4 129.2 119.8 65.8 101.0 69.8 1.01.0 101.0 101.0 101.0 at

Financial Internal Rate of Return: 62.4% a! Net Increment In: .dI

Years 16 & 21 69.8 Q-Years 17 & 25 56.4

ZABLE 23 WESTERN SAMDA TRUST ESTATES CORPORATIONSOAP PROCESSINC FINANCIAL ANALYSIS

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991

YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YER 8 YEAR 9 YEAR 10 YEARS 11-25

SALES V0LLSS (ToNS) 1140 1225 1400 1500 1500 1500 1500 1500

Toiler Soap 115 150 200 250 285 320 355 400

Soap Powder - 100 ISO 200 250 300 350 400

ALES (a S Soap 835000 896000 1019000 1091000 1091000 1091000 1091000 1091000

Toilet Soap 230000 300000 400000 500000 570000 640000 710000 800000

Tole Sow p - 150000 216000 288000 360000 429000 498000 570000Soap Poler 1065000 1346000 1635000 1879000 2021000 2160000 2299000 2461000

LESS: COST1 OF SALESSop 667800 718200 819000 879000 879000 879000 879000 879000

TL undr 175700 229200 305600 382000 435500 489000 542500 611200Toilet Soap 130 560 260

Soap Powder - 103100 154600 206200 257800 309300 360900 412400

843500 1050500 1279200 1467200 1572300 1677300 1782400 1902600

Factory Ove1head 133700 176900 200300 222300 234200 247300 258400 273900

Total Coats of Production 977200 1227400 1479500 1689500 1806500 1924600 2040800 2176500

Net Profit Before Depreciation 87800 118600 155500 189500 214500 235400 258200 284500

Leap: Profit Without Project 87800 87800 87500 87800 87800 87800 87800 87800

Net Incremental Cash Fl - 30800 67700 101700 126700 147600 170400 196700 196700 196700 196700

Investmnt - Plant 938370- Vehicles 17045 28125 28125

Total Investment Coat 955415NET CASH F (95S415U 30800 67700 101700 126700 119475 170400 196700 196700 196700 168575v- 196700

FIRR - 13.7n al Year 1S - 168575

I-0

A A,

TABLE 24: WESTERN SAIA TRUST ESTATES CORPORATIONCOCONUT STEX UTILIZATION COHPONENT

YEAR 0 (1981) 1 2 3 4 5 6 7 8 9 10 11 12 13* 14+ 15 .0

l. ~evenue 89747 89747 121945 121945 121945 155335 155335 155335 155335 155335 155335 155335 155335 155335 155325 155335

2. 'raduction Cost-/i) Labor 11136 11136 13920 13920 13920 16704 16704 1670L 16704 16704 16704 16704

Li) Fuel, Materials & Supplies 20750 20750 25937 25937 25937 31494 31494 31494 31494 31494 31494 31494

*.tl) Administrative Overhead 1689 1689 1689 1689 1689 1689 1689 1689 1689 1689 1689 1689

TotaL Production Cost 33575 33575 41456 41456 41456 49987 49887 49&87 &9887 49887 49887 49887 49857 49887 49887 49887

3. :nvestment Cost FC LC

i) Civil Works 2940 24810 - - - - - - - - - - - -

ii) Equipment & Spares 113070 - - 3215 - - 41215 - - 32tS 38000 3215 - 3215 38000 41215

'it4 Consultant's Services 21000 4595 25595

Sub-total 137010 29405 25595 3215 - - 41215 - 3215 - 38000 3215 - 3215 38000

4. Fhysical Concingenciesi) Civil Works (157) 441 3722

Li) Equipment & Spares (107.) 11307 322 4122 322 3800 322 322 3800 4122

5. Price Escalation 17402 3722 1125 22256 1736 20520 1736 1736 20520 22256

investment plus Physical & PriceContingencies 166160 36849 25595 4652 - - 67793 - - 5273 62320 5273 5273 62320 67591

6. Net Incremencal Cashflow (203.009 30577 51520 80489 80489 12696 105448 105448 100175 105448 43128 100175 105448 105448 100175 43128 37837

FMU - 31%

a! In years 3 to 5, costs of labor, fuel, materials and supplies

were increased by 25% from previous years to match the increase

in timber volume processed. For years 6-25, these costs were ' a

increased by 20Z from the previous year (Year 5) for the same

reason. o

* Years 13, 16, 18, 19, 21, 22, 24 & 25 have similar cashflows.

+ Years 14, 17 & 23 have similar cashflova.

TABLE 25: FI!AtICIAL AN4ALSIS 0! ISTEC :COHOINNT (WS$000)

lavestment and . rncrementalRe~2acemont Costs yesi2. Costs.... Total Inersimetal Costs Thetrmental Benefit* Zftt Casih Flow.

Soap Pro- Coco, ° Soap Pro- Coca Soap Pro- Coco Soap Pro- Coco Soap Pro- Coco Total -etYEiAR xtate. ces.mR 5e Estates- cessing Stet. Estotaad cessing Stem tstat-e ceasing St" Estatezy ceasing Stem Cash Ftow

l 1347.1 955.4 203.0 0.1 1347.2 955.4 203.0 (1347.2) ( 955.4) ( 203.0) (2505.6)2 1425.6 25.6 1.2 250.2 33.; 1426.8 250.2 59.2 284.2 281.0 93.1 (1142.6) 30.8 30.1 (1077.9)3 915.8 4.6 2.3 252.1 33.6 918.1 252.1 38.2 469.8 319.8 89.7 ( 448.3) 67.7 51.5 ( 329.1)5 689.6 28.7 210.0 41.5 718.3 210.0 41.5 630.2 311.1 122.0 ( 88.1) 101.7 S05S 94.15 697.4 54.5 117.0 41.5 751.9 117.0 41.5 811.0 243.7 122.0 59.1 126.7 80.5 Z66.36 268.4 28.1 67.8 417.3 218.L 41.5 68S.? 146.2 109.3 900.3 265.7 122.0 214.6 119.5 12.7 346.P7 43f0.7 116.2 49.9 438.7 116.2 49.9 1010.7 286.6 155.3 572.0 170A. 105.4 847.88 458.9 135.7 49.9 &58.9 135.7 49.9 1133.9 332.4 155.3 675.0 196.7 105,4 977.19 339.9 5.3 "4474 135.7 49.9 787.3 135.7 55.2 1226.8 332.4 155.4 439.5 196.7 100.2 736.4

10 436.6 135.7 49.9 436.6 135.7 49.9 1271.2 332.4 155.3 834.6 196.7 105.4 1136.71i 268.4 28.1 62.3 435.1 135.7 49.9 703.5 163.6 112.2 1367.3 332.4 155.3 663.8 168.6 43.1 875.512 5.3 432.6 135.7 49.9 432.6 135.7 55.2 1446.3 332.4 155.4 1013.7 196.7 100.2 L310,613 431.1 135.7 49.9 431.1 135.7 49.9 1482.7 332.4 155.3 1051.6 296.7 105.4 U53.114 430.6 135.7 . 49.9 430.6 135.7 49.9 1528.0 332.4 155.3 1097.4 196.7 105.4 1399.515 5.3 428.5 135.7 49.9 428.5 135.7 55.2 1551.8 332.4 155.4 1123.3 196.7 100.2 1420,216 268.4 28.1 62.3 428.5 35.7 49.9 696.9 163.8 112.2 1283.4 332.4 155.3 854.9 168.6 43.1 798,217 339.9 428.5 135.7 49.9 768.4 135.7 49.9 1196.2 332.4 15.3 427.. 196.7 105.4 729.918 5.3 428.5 135.7 49.9 428.5 135.7 55.2 155.8 332.4 155.4 1123.3 196.7 10. 2 1420.219 428.5 135.7 49.9 428.5 135.7 49.9 1551.8 332.4 155.3 1123.3 196.7 105.4 1425.4 ~20 428.5 135.7 49.9 426.5 135.7 49.9 1551.8 332.4 155.3 1123.3 196.7 105.4 1425.4*-21 268.4 67.6 428.5 135.7 49.9 696.9 135.7 117.5 1283.4 332.4 155.3 .586.5 294.7 37.8 821.022 428.5 135.7 49.9 428.5 135.7 49.9 151.8 332.4 155.3 1123.3 196.7 105.4 1425.4 a73 428.5 135.7 49.9 428.5 13S.7 49.9 1551.8 332.4 155.3 1123.3 196.7 105.4 1425.424 5.3 428.5 135.7 49.9 428.5 135.7 55.2 1551.8 332.4 155.4 1123.3 196.7 100.2 1420.223 428.5 135.7 49.9 426.5 135.7 49.9 1196.2 332.4 155.3 767.7 196.7 105.4 1069.8

a: Includes IaSEvC Overall facilities. (L) FM for 58TEC Estates 14.1tValuez used are in constant 1980 (it) FM for Soup ProceeWi - 13.711westerm Samoa Tals. (Ui) Fin for Co4 Stm ProeessLn: 31.01

PIER FOR OVERALL WIEC aOtQP0I2 : 15.01 .

.4w 4

TABLE 26 ECONOHIC ANALYSIS OF VWSTEC COMPONENT (WS$ '000)

Investment and IncrementalReplacement Costs Operating Costs Total Incremental Coats Incremental Benefits Net Cash Flow

Soap Pro- CoCo Soap Pro- Coco Soap Pro Coco Soap Pro- Coco Soap Pro- Coco Total SetY-AR Estates/ ceasing Setaf Estatea. / ceasing Stem Estatest! ceasing Stem Estatee!/ ceasing Stem Estates- cesing Stem Cash Flow

1 1347.1 955.4 203.0 0.1 1347.2 955.4 203.0 (1347.2) (955.4) (203.0) (2505.6)2 1425.6 25.6 1.1 235.2 30.3 .1426.7 235.2 55.9 346.3 281.0 89.8 (1080.4) 45.8 33.9 (1000.7)3 915.8 4.6 2.1 237.0 30.3 917.9 237.0 34.9 5f2.4 319.8 89.7 ( 345.5) 82.8 54.8 ( 207.9)4 689.6 28.1 197.4 37.4 717.7 197.4 37.4 771.3 311.7 122.0 53.6 114.3 84.6 252.55 697.4 52.5 109.9 37.4 749.9 109.9 37.4 992.6 243.7 122.0 242.7 133.8 84.6 461.16 268.4 28.1 67.8 399.2 111.0 37.4 667.6 139.1 105.2 1102.0 265.7 122.0 434.4 126.8 16.8 577.87 405.8 109.2 44.9 405.8 109.2 44.9 1237.0 286.6 155.3 831.2 177.4 110.4 1119.08 424.5 127.6 44.9 424.5 127.6 44.9 1387.8 332.4 155.3 963.3 204.8 110.4 1278.59 339.9 5.3 413.8 127.6 44.9 753.7 127.6 50.2 1501.2 332.4 155.3 747.5 204.8 105.1 1057.4

10 403.8 127.6 44.9 403.8 127.6 44.9 1515.9 332.4 155.3 1112.1 204.8 110.4 1427.311 268.4 28.1 62.3 402.5 127.6 44.9 670.9 155.7 107.2 1558.7 332.4 155.3 887.8 176.7 48.1 1112.612 5.3 400.2 127.6 44.9 400.2 127.6 50.2 1681.3 332.4 155.3 1281.1 204.8 105.1 1591.013 398.8 127.6 44.9 398.8 127.6 44.9 1723.7 332.4 155.3 1324.9 204.8 110.4 1640.014 398.3 127.6 44.9 398.8 127.6 44.9 1176.2 332.4 155.3 1377.4 204.8 110.4 1689.615 5.3 396.4 127.6 44.9 396.4 127.6 50.2 1803.9 332.4 155.3 1407.5 204.8 105.1 1717.416 268.4 28.1 62.3 396.4 127.6 44.9 664.8 155.7 107.2 1463.1 332.4 155.3 798.3 176.7 48.1 1023.1 -

17 339.9 396.4 127.6 44.9 736.3 127.6 44.9 1390.6 332.4 155.3 654.3 204.8 110.4 969.5 N)18 5.3 396.4 127.6 44.9 396.4 127.6 50.2 1803.9 332.4 155.3 1407.5 204.8 105.1 1717.4 -19 396.4 127.6 44.9 396.4 127.6 44.9 1803,9 332.4 155.3 1407.5 204.8 110.4 1722.720 396.4 127.6 44.9 396.4 127.6 44.9 1803.9 332.4 155.3 1407.5 204.8 110.4 1722.721 268.4 67.6 396.4 127.6 .44.9 664.8 127.6 112.5 1463.1 332.4 155.3 798.3 204.8 42.8 1045.922 396.4 127.6 44.9 396.4 127.6 44.9 1803.9 332.4 155.3 1407.5 204.8 110.4 1722.723 396.4 127.6 44.9 396.4 127.6 44.9 1803.9 332.4 155.3 1407.5 204.8 110.4 1722.724 5.3 396.4 127.6 44.9 396.4 127.6 50.2 1803.9 332.4 155.3 1407.5 204.8 105.1 t717.425 396.4 127.6 44.9 396.4 127.6 U.9 1390.6 332.4 155.3 994.2 204.8 170.4 1309.4

a. Includes facilities for overall WSTEC facilities. (i) Economic Internal Rats of Return for Estates Component 19.1%Values used are in constant 1980 Western Samoa Tals. (li) Economic Internal Rsts of Return for Soap Processing 14.6%

component(Mil) Economic Internal Rats of Return for Coco Stea component- 32.2%

PIRlk FOR OVERALL WSTEC O9APONENT 18.8%

5 P

05 Pm-sJ

Appendix 13Page 43

Table 27: SENSITIVITY ANALYSIS

Change in Rate of Change in

Variable Return Rate of Return Sensitivity -

Case (%) (%) (%) Indicator *

A. Financial Rates of Return

(i) Base Case 15.0

(ii) Decrease in benefits 15 9.0 6.0 0.40

(iii) Increase in investmentcost 10 13.3 1.7 0.17

(iv) Increase iii - sts 12 12.4 2.6 0.22

(v) Delay in Imp] -. 1 year 12.8 2.2

(vi) Combination of >. 11.0 4.0

B. Economic Rates of Return

(i) Base Case 18.8

(ii) Decrease in benefits 15 11.2 7.6 0.51

(iii) Increase in investmentcost 10 16.9 1.9 0.19

(iv) Increase in 0 & M costs 12 16.0 2.8 0.23

(v) Delay in Implementation 1 year 16.4 2.4 -

(vi) Combination of (iii & iv) 14.6 4.2

a! The Sensitivity Indicator shows the change in the rate of return to the

change in variable.

TABLE 28: SUMMARY OF COSTS IN WS $AGRICULTURAL RESEARCH AND EXTENSION

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 T BASE COSTS CONTINGENCIES TOTAL COSTS

COMPONENT FC LC FC LC FC LC FC LC FC LC FC LC FC LC FC LC

I. CIVIL WORKS (incld. facilities)Central Extens ion Training Centre

at Nu'u 48.0 39.0 48.0 39.0

2 Modular Houses at Nu'u 90.0 10.0 90.0 10.0

Farm Managers' House at Asou 19.5 16.0 19.5 16.0

Field Labs at Togitagiga and Asau 11.4 9.6 11.4 9.6

Plant Porpagation Unit at Togitogiga 25.0 7.0 25.0 7.0

23 Field Extension Centres 33.5 45.1 33.5 45.1 33.5 45.1 33.5 45.1 20.1 45.1 154.1 225.5

Physical Contingencies 24.8 15.8 10.7 14.4 17.4 7.7 25.1 33.8 i5.1 33.8 348.0 307.1 93.1 105.5

Cost Escalation 26.5 10.0 8.1 11.3 11.7 15.8 14.7 19.8 10.8 24.3 71.8 81.2

Sub-total 278.7 152.5 52.3 70.8 62.6 68.6 73.3 98.7 46.0 103.2.

1I. VEHICLES2 Short-Wheel Base 4-W Drive Jeeps 13.2 2.0 13.2 2.0

12 Small 4-W Drive Jeep Trucks 58.8 4.8 58.8 4.8

1 4-W Drive Double Cab 6.0 0.8 6.0 0.8

Physical Contingencies 7.8 0.8 78.0 7.6 7.8 0.8

Cost Escalation 12.6 1.2 12.6 1.2

Sub-total 98.4 9.6

III. .AICHINERY & EQUIPEENTFarm Equipment for Extension Centres 1.8 1.8 1.8 2.8 8.2

Audio Visual Aids for Nu'u Ext. Centre 5.0 5.0

2-65 HP Tractors and Attachments 42.0 3.0 42.0 3.0

Laboratory Equipment 3.0 3.0 1O

Office Equipment for Project Office 3.0 1.0 3.0 1.0

Physical Contingencies 6.2 0.6 0.5 0.9 2.1 61.2 4.0 9.7 0.6

Cost Escalation 7.3 0.6 0.4 0.6 1.2 9.5 0.6

Sub-total 68.3 5.2 2.7 3.3 6.1

IV. OPERATION AND MAINTENANCEO & M at Togitogiga and Asau 5.0 5.6 5.0 5.6 5.0 5.6 5.0 5.6 5.0 5.6 25.0 28.0

0 & N for Vehicles 17.0 3.0 17.0 3.0 17.0 3.0 17.0 3.0 17.0 3.0 85.0 15.0

0 & H at Nu'u Extension Centre 3.2 3.2 3.2 3.2 3.2 16.0

O & H at Project Office 2.5 2.5 2.5 2.5 2.5 12.5

Cost Escalation 2.7 1.2 2.3 2.8 4.3 4.0 6.0 5.0 8.0 6.2 110.0 71.5 23.3 19.2

Sub-total 24.7 15.5 24.3 17.1 26.3 18.3 28.0 19.3 30.0 20.5

V. CONSULTANTSExtension Program Organiser 60.0 25.0 60.0 25.0 60.0 25.0 60.0 25.0 240.0 100.0 > >

Banana Agronomist 60.0 25.0 60.0 25.0 60.0 25.0 180.0 75.0

Tree Crop Agronomist 60.0 25.0 60.0 25.0 60.0 25.0 180.0 75.0 5 8

Physical Contingencies 9.4 3.9 12.0 5.0 20.4 8.5 9.4 3.9 600.0 250.0 51.2 21.3

Cost Escalation 32.4 13.5 38.4 16.0 58.0 24.2 22.4 9.3 151.2 63.0

Sub-total 221.8 92.4 230.4 96.0 258.4 107.7 91.8 38.2

VI. FELIOWSHIPS120 Man-months 24.0 24.0 24.0 24.0 24.0 120.0

15 Man-months short-term training 6.0 12.0 6.0 6.0 30.0

Cost Escalation 4.8 9.0 10.5 13.2 12.9 150.0 50.4

Sub-total 34.8 45.0 40.5 43.2 36.9

726.7 275.2 354.7 183.9 391.1 194.6 242.4 156.2 112.9 123.7 1347.2 640.2 480.6 293.4 1827.8 933.6

Physical 161.8 128.2Price 318.8 165.2