Agrimo

completed

- 3 - October 21, 1996International Finance CorporationA Member of the World Bank GroupInternational Finance CorporationA Member of the World Bank GroupEnvironmental Review Summary (ERS)Project Name Mozambique - Agrimo Companhia Agro-pecuaria de Mozambique LDA. (Agrimo)Region AfricaSector AgribusinessProject No. 7616 1. Agrimo, a Mozambican company established in May 1994, will expand its program to assist up to 37,000 family sector farmers (smallholders) produce cotton on up to 24,000 hectares in Zambézia and Tete provinces and build a cotton gin. At full production from 2003, Agrimo should produce 5,600 tonnes of cotton lint per annum, pay smallholders US$3.5 million a year for seed cotton and be a strong developmental factor in the region. Agrimo’s gin and technical headquarters will be based in Morrumbala, a district capital in Zambézia province in west-central Mozambique. Six satellite collection and technical assistance stations will be located where smallholders are concentrated. Cotton lint will be exported from the port city of Quelimane, about 185 km to the east. Cotton seed will be sold locally to oilseed processing plants. The project is estimated to cost US$8.0 million including the cost of implementing the extension services through the purchases of trucks, tractors, warehouses and offices, the cost of the gin, working capital and interest during construction.2. This is a category B project according to IFC’s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information and a site review completed by consultant Greville Gunson on behalf of IFC and CDC. The following potential environmental, health and safety impacts of the project were analyzed:· cotton pricing;· agricultural extension services (a.o. use of fertilizers);· infrastructure;· waste disposal;· worker exposure to dust;· general employee health and safety; and· fire protection.The sponsor has presented plans to address these issues and demonstrate that the proposed project will comply with applicable governmental and World Bank requirements. The information provided about how these potential impacts are addressed in the development of the project is summarized in the paragraphs that follow.3. A guaranteed minimum price on seed cotton will be announced by Agrimo at season start and this is topped up or remained the same at seed cotton delivery time, following the establishment of a minimum seed cotton price by the Government of Mozambique.4. Extension staff will be employed to provide services on ground. There will be one person covering 200-300 families and 100-200 hectares of cotton. The services of the extension staff is to advise and help with all agronomic cotton routines covering growing, fertilizer and spraying. Spraying will be done with the electrodyn method, which uses chemicals formulated so that there is no need for mix with water. The farmers will take over the spraying when they have the experience. Protective gloves and masks will be provided. Pesticides which appear on the World Bank list of banned substances or on the list of substances whose use is to be avoided will not be used.5. The road infrastructure will be improved in order to transport the seed cotton to the gin.6. Empty pesticide containers will be collected and either reused or destroyed. Agricultural residues are typically burned to help prevent the control of boll worm. Ginning operations produce very little waste. The waste is good for gardens and will be used as such where possible, otherwise burned. Ablution and sanitary facilities will provided for the ginnery employees. Sewage will be disposed in an on-site septic tank system. Waste oils from machinery and vehicles will be collected and disposed of by a specialist company.7. The sponsor will provide dust masks and goggles for the ginnery employees, in order to protect them from exposure to cotton dust. The use of this will be strictly inforced.8. Agrimo will set up medical facilities for ginnery workers until the Government of Mozambique reinstates medical services in the area. Among other medical problems and emergencies, Agrimo will provide prophylactics and treatment for malaria, as malaria is widespread throughout the area. Extension officers will provide safety training to contract growers regarding machinery and vehicles, as well as relating to safe methods for handling and applying fertilizers and pesticides. Chemical storage will be properly established in a separate building at the Morrumbala field headquarters, kept under lock and key, properly recorded and issued. Chemicals will also be kept under lock and under control at the various district offices.9. The sponsor intends to burn field residues, and to encourage the contracted growers to do the same. Agrimo will prior to field burning ensure that firebreaks are cut to prevent the fires from spreading outside of the intended area. Smoke detectors and fire extinguishers will be placed in strategic locations within the ginnery. Although stored seed cotton does not combust spontaneously, it can ignite. No smoking will be allowed in or near the ginning complex.10. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the lifetime of the project by evaluating reports submitted annually to IFC by Agrimo and by conducting periodic supervision.11. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, IFC concludes that Agrimo’s proposed project will meet World Bank environmental, health and safety policies and guidelines and host country requirements.P:\CTEEU\AGRIMO.DOCOctober 22, 1996 9:58 AM