TN-AGRICULTURAL SEC INV

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The central objective of the Agricultural Sector Investment Loan is sectoral growth through improved management of public resources, complementary policies and finance for public investments. This will be achieved through commitments to finance line items in the Ministry of Agriculture's (MOA's) annual investment budgets for 1994-97, contingent on progress in implementing a Development Action Plan of key actions and policy reforms necessary for effective use of the selected investments. Sub-sectors include: (a) irrigation and water-use efficiency - efficient operation of new and existing infrastructure is critical as Tunisia moves towards full mobilization of available water resources. The Agriculture Sector Investment Loan (ASIL) will finance small scale dams, irrigation perimeters associated with either such dams or tubewells, modernization of existing perimeters, groundwater surveying and monitoring, and rural potable water. Needed policy actions are additional increases in water charges, application of a binomial tariff, and promotion of water user associations; (ii) natural resource management - the ASIL will support soil erosion control, port infrastructure to encourage fishing along the high potential northern coast and to permit meeting the European Economic Community import quality standards, and agro-pastoral improvement of rangeland. Policy elements include implementation of the revised Soil Code, replacement of force account implementation of soil conservation works by contracts with farmers and private enterprises, and a review of existing subsidies intended to encourage fishing in the north; (iii) animal health and production - the ASIL will support the animal disease surveillance network through obligatory national vaccination campaigns and development of disease laboratories, and promote quality standards by financing equipment for programs aimed at genetic improvement and milk quality monitoring. Policy reforms include phased privatization of veterinarian services, and increased cost recovery for vaccinations, laboratory services and artificial insemination; and (iv) land consolidation - parcel fragmentation constrains rainfed area development by limiting the economic viability of farm units and farmer access to credit and by exacerbating soil erosion. The ASIL will support development of a pilot intervention based on voluntary consolidation of fragmented parcels in several locations, capacity strengthening of the agency to be responsible for the pilot program, and rural infrastructure in the pilot areas. Policy reforms consist of expanding the legal basis for government interventions in rainfed areas. Finally, to achieve greater efficiency of public investment, the government's planning and implementation capacity would be strengthened.