ReportNo.

20398-SU

Sudan
Optionsfor the Sustainable
Development
of the GeziraScheme
October27, 2000
PreparedJointly by:
Government of Sudan
and
Macroeconomics 2
Country Department 6 - Eritrea, Ethiopia, Somalia, Sudan
Africa Region

Documentof theWorldBank
 CURRENCY EQUIVALENTS
US$ 1.00 = SD 233 (1998)
US$ 1.00 = SD 256 (1999)
SD 1.00 = LS 10.00
AREAS, WEIGHTS AND MEASURES
One feddan = 0.42 hectare 1.038 acres
One kantar of seed cotton 315 lbs
One kantar of cotton lint = 100 lbs
One metric ton = 1000 kilograms

FISCAL YEAR

July I to June 30
ABBREVIATIONS AND ACRONYMS
ARC - Agricultural Research Organization
BOS - Bank of Sudan
CMC - Cotton Marketing Corporation
DRC - Domestic Resource Cost
EC - European Community
ELS - Extra Long Staple
FAO - Food and Agriculture Organization
FAOTCP - Food and Agriculture Organization Technical Cooperation Program
FFS - Farmers' Field Schools
FOB - Free on Board
FU - Farmers' Union
GDP - Gross Domestic Product
GFM - Gezira Flour Mill
GOM - Gezira Oil Mill
HPS - Hand Picked Selected
IMF - International Monetary Fund
IPM - Integrated Pest Management
IWC - Irrigation Water Corporation
GLR - Gezira Light Railway
GS - Gezira Scheme
GRS - Gezira Research Station
LS - Sudanese Pounds
MCM - Million Cubic Meter
MOFNE - Ministry of Finance and National Economy
MOIWR - Ministry of Irrigation and Water Resources
MS - Medium Staple
NGO - Non Government Organization
NPC - Nominal Protection Coefficient
O&M - Operation and Maintenance
SCC - Sudan Cotton Company
SD - Sudanese Dinar
SGB - Sudan Gezira Board
SL - Short Staple
UN - United Nations
WUA - Water Users' Association
WUG - Water Users' Group

Vice President: Callisto Madavo

Director: Oey Astra Meesook
Sector Manager: Frederick Kilby
Task Manager: Jack van Holst Pellekaan
Task Coordinator: Albert Agbonyitor
 Contents

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS................................................ I

SUMMARY ............................................... I
A Large and Complex Enterprise................................................ i
Major Problems Facing the Gezira.................................... ii
Sound Prospects for Sustainable Development.................................. iii
CONCLUSIONS.................................. IV
Medium to Long Term Plansfor Institutional Change.. iv
Short TermActions .vi
RECOMMENDATIONS. VIII
Establishing Government Policy .viii
Major Immediate Steps.viii
1. TIME TO TAKE ACTION .1
Background.1 I
Previous Studies/lnvestments .2
Requestfrom the Government .3
Improving Economic Performance .3
Public Resource Management .4
External Performance..................... .. ......... ..... , .,,, ,,,,..4 4.........
Poverty and Social Development ...................... .,. , , . 5
Timefor a Change in the Gezira ,, .. 5
Overview of the Report................. ,,,,,, , , ,,,. . . 5
2. INFRASTRUCTURE .7
IRRIGATION.7
The Irrigation System .7
Operation of the Irrigation System............................................. 9
Serious Deterioration in the Status of the Irrigation System............................................ 10
OTHER INFRASTRUCTURE............................................ 13
Roads.,.13
Gezira Light Railway ........ 13
1....................
3
Department ofAgricultural Engineering.............................. 14
Ginneries....................... ,. 14
Workshops.................... 15
Telecommunications............................. , 15
CONCLUSIONS .. 16
3. AGRICULTURAL TECHNOLOGY.17
MAJOR ISSUES.17
Agricultural Research ...................... ,,... 17
Extension of Research'Results.................... 18
Crop Protection and Integrated Pest Management ...................................... 19
Actual Yields Fall Far Short of Technical Possibilities ...................................... 20
Evidence that Higher Yields can be Achieved ...............................
, , , ,.,.,,,,, ......,,, .,,.,.,. 21
21.,,,,.,,,,
Livestock ........... . ....... ,,....,.22
CONCLUSIONS....................................................................................................................................23
4. THE ECONOMICS OF CROP PRODUCTION...................................... 24
MAJOR ISSUES ...................................... 24
Structure of Farming in the Gezira Scheme ................................. , , , . .24
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 Assumptions in the Economic Analysis ........................ ................................................... 95
Notes on the DRC Calculations........................................................................... 102
Notes on Cost of Production:........................................................................... 102
Explanation of Payments between SGB and SCC ........................................................................... 104
Summary of Sector Policies Relevant to the Gezira Scheme ............................................................... 105
ANNEX5: SOCIAL DEVELOPMENTISSUES ........................................................................... 109
BRIEF SUMMARY OF MAJORFINDINGS........................................................................... 109
STAKEHOLDERSOCIALDYNAMICSANDPOPULATIONANALYSIS............................................................. 110
INTRODUCTION........................................................................... 110
The People of the Gezira............................................................................ I11
Migration........................................................................... 112
Access to Social Services........................................................................... 115
Social Services - Tenant Villages........................................................................... 115
Social Services - the Camp Population........................................................................... 119
Decline in Social Services........................................................................... 119
Dropping School Attendance........................................................................... 121
Health Situation Deteriorating........................................................................... 121
MAIN CONCLUSIONSOFSTAKEHOLDERSOCIALDYNAMICSANDPOPULATIONANALYSIS.......... 122
...............
Constructed Social Inequality ........................................................................... 122
Aging Tenancy Population and Increase in Hired Labor ................................................................... 122
Unequal Access to Social Services ........................................................................... 123
Deteriorating Health Situation........................................................................... 123
ECONOMICANALYSISOF STAKEHOLDERS
................................................ 123
Land Tenure................................. 123
Assets Ownership, Credit and Debt ................................. 128
Informal Credit System and Increasing Debt ................................. 129
Water Pricing and Management ................................. 130
Off-Farm Employment................................. 130
Poverty Pockets and Chronic Poverty on the Increase....................................................................... 131
Child Labor ............................................................................. 131
MAIN CONCLUSIONS OF ECONOMIC ANALYSIS ......................................................................................... 132
Land Tenure Issues ............................................................................. 132
Credit ............................................................................. 133
Women's in Decision making............................................................................. 133
Women organizations............................................................................. 133
Gender Issues ............................................................................. 133
Desire for Changes in Cropping Patterns............................................................................. 133
Credit Issues............................................................................. 134
Asset Ownership and Diversification............................................................................. 134
Water Pricing and Management ............................................................................. 134
Labor Union Organization............................................................................. 134
Future prospects ............................................................................. 134
ATTACHMENT I - GROUP MEMBERS - SOCIAL DEVELOPMENT ................................................................ 136
ATTACHMENT 2 - SOURCES OF DATA .............................................................................................. 137
ATTACHMENT 3 - ESTIMATED EXPENDITURES ON EDUCATION, HEALTH SERVICES AND OTHER SOCIAL
SERVICES (WATER AND ELECTRICITY) . ............................................................................................. 138

REFERENCES ............................................................................................. 139

TEXT, TABLES, FIGURES and BOXES

Table 3.1: Comparison of Potential, Research and Farmer Yields for Major Crops ...................................... 21
Table 3.2: Estimated Number of Cattle and Small Ruminants in the Gezira Scheme 1998 ........................... 22
Table 4.1: Cropping Calendar for Major Crops in the Gezira Scheme ........................................................... 25
Table 4.2 Actual and Recommended Number of Irrigations by Crop ............................................................ 26
Table 4.3: Yield Effects on Crops Because of Distance from Water Source .................................................. 27
Table 4.4: Summary of Price Formation for Acala Cotton for the Gezira Tenant (1998/99) ......................... 30
Table 4.5: Production Costs by Major Crop for Crop Year, 1997/98............................................................. 32
Table 4.6: Net Returns to Tenant Management for Major Crops, 1997/98.................................................... 33
Table 4.7: World Prices of Crops ............................................................................. 34
Table 4.8: Yields of Major Crops Used for DRC Analysis ....................................................... ;.................... 34
Table 4.9: Domestic Resource Costs and Net Protection Coefficients for Major Crops and Livestock,
1991/92-1992/93, 1997/98 andl998/99 ............................................................................. 35
Table 4.10: Average Area used for Major Crops (1990/91 to 1994/95)......................................................... 35
Table 4.11: Areas Designated by the Gezira Board for Production by Crop.................................................. 35
Table 4.12: Estimated Total Annual Net Revenue for the Gezira Scheme by Crop ....................................... 36
Table 5.1: Estimated Distribution of Tenancy Size in the Gezira ................................................................... 40
Table 5.2: Average Number of Animals owned per Tenant Household ......................................................... 41
Table 6.1: Cumulative Arrears to the Sudan Gezira Board and Collection Ratios ......................................... 51
Table 6.2: Gezira Scheme Liabilities, 1998/99............................................................................. 51
Table 6.3: Evaluation of Four Institutional Options for the Future Management of the Gezira Scheme........ 61

Figure 6.1: Gezira Scheme: Institutional Relations For Cotton Production and marketing .......... ................. 48
Figure 6.2: Sudan Gezira Board Management Structure ............................................................................. 49
Box 3.1: Seed Maintenance, Propagation and Certification ................... ....................................................... 17
Box 3.2: Farmers Field Schools (FFS)............................................................................. 19
Box 3.3: Achievements of Integrated Pest Management (IPM) ..................................................................... 20
Box 3.4: Some results from Pilot Production Plots in the Gezira Scheme .................................................... 22
Box 4.1: Farmers' Problems - Type and Frequency............................................................................. 27
Box 6.1: Tenants Representation and Decisions in the Gezira Board............................................................. 47
Box 6.2: Selected Issues concerning the Cotton Marketing Corporation ...................... ................................ 54
ANNEX 1: TABLE
Table 1: 1999 Summary of Total Employees, in Sudan Gezira Board ...................... .................................75
ANNEX 2: FIGURES
Figure 1: GDP Growth Rate ............................................................................. 76
Figure 2: Inflation ................................................ 77
ANNEX 3: TABLES AND FIGURES
Table 2: Long Term Average Flow of the Nile River System ................ ................................ 89
Table 3: Water Resources of the Sudan ................................................ 89
Table 4: Sediment Deposition in Irrigation Canals................................................ 90
Table 5: Average Monthly Flow of Blue Nile at Ed Deim ................................................ 90
Table 6: Cropped Area, water Consumption and Silt Removal................................................ 91
Table 7: Irrigation Water Rates- 1998-99 Season................................................ 91
Table 8: Average water Use per Harvest Irrigation Area All Crops................................................ 91
Table 9: Expenditures on Major O&M Activities by Irrigation Water Corporation (IWC). ........................
92
Table 10: Cropping Intensity in the Gezira Scheme ............................................................................. 92
Figure 3: The Vicious Circle ............................................................................. 86
Figure 4: The Virtuous Circle............................................................................. 88
Figure 5: Harvested Irrigation Area and Water Use ............................................................................. 93
Figure 6: Average Annual Use of Water (per feddan) Harvested Crop......................................................... 93
Figure 7: Water Charges Collection Rate Harvested Crop Area ................................................................... 94
Figure 8: Water Charges Collection Rates Based on Harvested and Planned Crop area ............................... 94
ANNEX 4: TABLES AND FIGURES
Table I 1: Current input Levels Used for Different Crops ..... ..................................................................... 95
Table 12: Cotton Picking Labor by Source.............................................................................. 95
Table 13: Gezira Scheme: Crops yield (1984/85-1997-1998) . .................................................................... 96
Table 14: Prices of Different Grades of Barakat Cotton .......................... ................................... 97
Table 15: Farmgate Prices of Groundnuts Sorghum, and Wheat.............................................................. 98
Table 16: Area Allocation by Crop............................................................. 99
Table 17: Net Return to Farmers by Crop............................................................. 99
Table 18: Exchange Rates............................................................. ; 100
Table 19: Current, High, and Farm Trial (Potential) Yields for Main Gezira Crops ............... ....................102
Table 20: Marketing Costs for Cotton ............................................................. 103
Table 21: Sample Tenant Account for Four Feddan of Cotton .............................................................. 104
Table 22: Analysis of Domestic Resource cost and Nominal Protection Coefficient.................................. 106
Figure 9: Share of Area Planted by Major Crop .............................................................. 105
Figure 10: Three Scenarios of Gezira Scheme Net Revenue.............................................................. 105
ANNEX 5: TABLES AND BOXES
Table 23: The Ethnic Composition of Population in Gezira State ............................................................. 111
Table 24: Highest Education Attained by Population 6 years and above in Gezira State............................ 115
Table 25: Distribution of Educational Background of Tenants .............................................................. 115
Table 26: Access to Education and Health Services by Villages in the Scheme ................... ......................116
Table 27: Access to Health Services in the States making up the Former Central Region State ................. 116
Table 28: Households Access to Water, Sanitation and Domestic Energy.................................................. 117
Table 29: Access to Services by the Camp Population................................................................... 119
Table 30: Distribution of Tenancies by Size................................................................... 126
Table 31: Average Number of Animals owned per Household .................................................................. 128

Box 1: Elephant's Stomach.................................................................. 108

Box 2: Gender Aspect .................................................................. 131

Map (IBRD No.30670)

 Preface and Acknowledgements

This reporton the GeziraSchemehas been preparedjointly by the Governmentof Sudan

and the World Bank. The decisionto prepare this report arose out of a request from the
Minister of Finance and National Economy for non-lendingassistancein the context of a
reviewof its future relations with the Bank. A preliminarydraft was discussedin Sudan in
Februarythis year and as a result a substantialnumber of changeswere made to the report.
The reportwas reviewedagain in May2000.
The Governmentmembersof thejoint team establishedto preparethis report were:Omer
Ali Mohamed El Amin (General Manager, Sudan Gezira Board) * and El Toyib Elalam
(Sudan Gezira Board), El Fatih Ali Siddig (Director General, International Economic
Relations Department,Ministry of Finance and National Economy),Abdelrazig el Bashir,
(UnderSecretary,Ministryof Agricultureand Forests),Siddig Abboand Omer M. A. Elawad
(Ministry of Irrigation and Water Resources), Gafaar Ibrahim (Agricultural Research
Corporation),Abdin M. Ali (DirectorGeneral,The SudanCotton CompanyLtd.) and Fatma
AbdallaShoke (The SudanCotton Company,Ltd). The World Bank team was led by Jack
van Holst Pellekaanand team memberswere Inger Andersen,MohamedAbdelgadirAdam,
Albert Agbonyitor,Richard Carroll, Paul Wani Gore, Parvis Heckmat, and El Sayed Zaki.
Word processingwas done by Messrs. Patrick Mamboleoand Felix Ogbebor managed by
Ms. Roboid Covington. The work of the Bank was under the supervision of Albert
Agbonyitor (Task Manager)and FrederickKilby (Sector Manager) and under the overall
directionof the CountryDirectorfor Sudan,Ms. Oey Meesook.
The joint team wishes to acknowledgethe considerable guidance received from the
Ministers of Finance and National Economy, Agriculture and Forests, and Irrigation and
Water Resources and their staff, as well as from the AgriculturalResearch Corporation
during the course of its work. Two General Managersand staff of the Sudan Gezira Board
providedcontinuousand generoussupport to a numberof missions who visited the Barakat
headquartersof the Board. The team also extends its appreciationto the Governmentof
GeziraState for its assistance. Sincerethanks to the many private individualsin Sudanwith
previous leadership roles in the Gezira Scheme, the Sudan Cotton Company the Gezira
Farmers' Union, numeroustenants, share croppers,laborersand traders in or associatedwith
the Scheme, staff at the University of Gezira, and other representativesfrom the private
sector,for their participationin timely and constructivediscussionswith various membersof
the joint team. Finally the team thanks the office of the United Nations Development
Program in Khartoum for their assistance and to the World Bank's Nile Team, which
supportstheNile Basin Initiative,for fundingto undertakesome of the analysis.
The joint team has also benefited considerablyfrom the comments and advice of peer
reviewersin the WorldBank, namelyVictoria Elliott, ShawkiBarghouti,Geoffrey Spencer,
Akhtar Elahi, GeertDiemer,and IJsbrandde Jong, as well as from AndrewMacMillanof the
Food and Agriculture Organizationin Rome, at various stages of the preparationof this
report.

Macroeconomics2
AfricaRegion
WorldBank
Washington
October27, 2000

* ProfessorEl Amin Dafalla, whopreceded OmerAli MohamedEl Amin as GeneralManagerof the

GeziraScheme,was a leadingmemberof thejoint team duringthe early work on this report.
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

1. This report has been prepared at the request of the Government of Sudan by a joint team from
the Government and the World Bank. The team's objectives were to assess the main factors
which constrain the sustainable development of the Gezira Scheme (GS) and to develop medium
to long term plans, as well as short term actions, to address those constraints.

SUMMARY

A Large and Complex Enterprise

2. Started in 1925, the Gezira Scheme has an area of about 2.1 million feddan or about 880,000
hectares. This makes it about one-third the size of Belgium reflecting the enormous management
challenges that the Scheme presents. It is one of the biggest irrigation systems in the world, but
has over time turned into one of the least efficient with an irrigation intensity typically less than
50 percent. Nevertheless it uses about 35 percent of Sudan's current allocation of Nile water. The
Gezira Scheme also produces two-thirds of Sudan's cotton exports although cotton production
has declined to such an extent that the value of cotton exports, which used to provide about half
of total export proceeds, are now second to livestock.
3. The Government is aware that the GS is inefficient and a net drain on the national economy.
Following many years of unprofitable performance and increasing indebtedness, a high level
Presidential Committee examined the operation of the Scheme and in November 1998
recommended, inter alia, that it be converted into a joint stock company in which the Government
and the private sector would have shares. There has since been an intense nationwide debate on
this recommendation. In 1999 the Government requested the World Bank to also review the GS
and assess the options for addressing its problems. It was subsequently agreed that Government
and Bank staff would jointly prepare a report.
4. Current Management: The GS is governed by a Board of Directors appointed by the
Government and chaired by the Minister of Agriculture and Forests while its day to day
management is the responsibility of the General Manager of the Sudan Gezira Board (SGB)
supported by a staff of about 7,000. Apart from its regular contact with the Ministry of
Agriculture and Forests, the SGB works closely with the Ministry of Irrigation and Water
Resources (MOIWR) which provides water "in bulk" at the junction of the main and minor canals
and is also responsible for the operation and management of the Sennar Dam and the main canals.
Recently the SGB was given responsibility for the operation and maintenance of the minor ancl
smaller canals. The SGB also collaborates closely with the Agricultural Research Corporation
(ARC), the Sudan Cotton Company (SCC), and the Gezira State Government.
5. Tenants in Financial Difficulties: Most of the approximately 120,000 tenant farmers cannot
earn an adequate income for their families from crops on a typical 20 feddan irrigated farm.
Consequently the majority of tenants, given that they do not consider higher yields and more
intensive cropping systems are feasible under current circumstances, depend on off-farm income
to stay above the poverty line. This is why sharecropping and livestock production (which
involves considerable grazing outside the Scheme) have become popular solutions to the financial
difficulties facing tenants. The proportion of tenants who enter into sharecropping arrangements
with the landless is about 30 percent. About 40 percent of tenants earn additional income from
livestock production while most households have some livestock in the Gezira community.

Major Problems Facing the Gezira

6. This report finds that there are currently five main problem areas facing the Gezira Scheme:
(a) Large Debt Burden: Following many years of unprofitable performance the total debt of the
Scheme reached SD8.6 billion (equivalent to US$34 million at the end of 1998/99 at the
prevailing exchange rate). The Scheme's main creditors are private companies (for example
contractors) and various organizations that have provided services. This debt compares with the
estimated current annual net revenue from Gezira's agricultural activities (excluding livestock
and agro-processing) equivalent to about US$46 million.
(b) Institutional Weaknesses
* Centralized administration and over-staffing of the SGB reduce the managerial and economic
efficiency of the Scheme. For example:
- current land tenure arrangements do not allow the fornal sale of tenancies eliminating
the option for existing tenants to retire from irrigation farming and for new entrants to
invest;
- uniform five-course cropping rotation for tenants with a mandatory requirement to
grow one-fifth of their land to cotton each year unnecessarily constrains tenants'
management choices;
- centralized decision-making on cotton production management, such as use of
herbicides and aerial spraying, affect tenants' costs substantially;
- uniform administrative charge, equivalent to a land rent, based on a tenant's land use
regardless of the quality and location of land, provides no incentive for tenants to
improve efficiency; and
- centralized irrigation water management and distribution through the MOIWR and
SGB with minimal involvement from water users result in inefficient water use.
* Monopoly service enterprises such as the ginneries, the Agricultural Engineering Department,
the Gezira Light Railways and the Telecommunications Unit are not financially sustainable
since, even though some earn revenues that exceed costs, margins are slim and would be
negative if they made provision for depreciation of capital stock.
(c) Infrastructure and Technical Deficiencies
* Irrigation infrastructure is in serious disrepair and the distribution of water is inefficient and
wasteful, with low cost recovery.
* Irrigation intensity is-at or below 0.5 compared with a possible level of at least 0.75.
* Average crop yields are well below potential based on field trials.

(d) Uneconomic Production

* Because of low average yields, the Gezira Scheme is uneconomic from the national and
tenant point of view.
- Research has shown that irrigated agriculture in Sudan, measured through the impact on
irrigated wheat and cotton production, generated the smallest income multiplier for rural

ii
 households compared with two other main sub-sectors in Sudanese agriculture (i.e. semi-
mechanized and traditional farming).
* A typical tenancy of 20 feddans of irrigated land with a five course crop rotation (including
one course used for cotton) and current average yields does not provide an income above the
poverty line for an average family in the Gezira.
* There are no formal credit institutions available to Gezira tenants other than the SGB which
provides short term credit for cotton production. This is unlikely to change until tenants have
the right to transfer tenancy rights to creditors in the event of default on their loans. Informal
"sheil" credit provided by private lenders is available but at interest rates that are multiples of
the rates charged by formal lending institutions.
(e) Social Inequities
* Differences in welfare between social groups (basically the tenant employers and the migrant
employees) have been a feature of the GS since its inception. These groups are dependent on
each other through labor and sharecropping contracts. The extent of this dependence varies
according to the fortunes of tenants and their agricultural production. Some Sudanese
analysts argue that the income-based differences in welfare between the groups are
accentuated by different access to public social services and that this creates tension between
them. Others claim that there is little or no tension between the two groups.

Sound Prospects for Sustainable Development

7. The Gezira is potentially an economically viable irrigation scheme if the issues mentioned
above can be addressed. Critical factors that currently enhance future prospects for the Scheme
include positive attitudes towards institutional and management change, growing confidence in
the stability and growth of the national economy, encouraging market opportunities for the
products from Gezira, good prospects for economic production, and a more flexible approach to
addressing social problems. The basis for optimism about these factors is briefly discussed
below.

(a) Positive Attitudes to Institutional and Managerial Change

i There is a growing consensus among stakeholders on the need for an enlarged private sector
involvement in the delivery of a range of services to tenants with a corresponding reduction
in the role of the public sector. There is also growing support for more flexibility in the
choice of crop rotations, and for providing mechanisms for the formal and sale of tenancies.
* Most of the institutional and managerial changes suggested for the GS in the past, including
those in the context of the Government's macroeconomic policy changes in 1992/93, were
rejected because there was a reluctance to move away from the status quo. While there
continues to be resistance to change from those who would lose as a result of any institutional
and managerial changes, there is a strong commitment by the Government, the SGB and the
Farmers' Union to the reform of the Gezira Scheme.
* The SGB staff are dedicated to the task of improving the performance and reputation of the
GS. There are outstanding examples of SGB staff working under extremely difficult
conditions such as in the machinery workshop and the ginneries, but the current staff numbers
will need to be reduced because there is considerable redundancy. Adjustment of staff
numbers should be aimed at achieving a core of well trained staff to provide a sound base for
improved management.

..
* While the original design of the Gezira Scheme envisaged centralized management, it is
possible to move to a decentralized management system in which production decisions and
the provision of services are left to farmers and the private sector. This shift would not
require special modifications to the existing physical infrastructure.
(b) Improved Macroeconomic Situation
* The macroeconomic situation in Sudan is improving steadily. For example inflation has
declined from a peak of 150 percent per annum in 1992 to about 10 percent in the 12 months
to May 2000. Also, the exchange rate regime is open and stable; tariffs on imports have been
steadily reduced; and export income has become more diversified with increased exports of
livestock and recently substantial oil exports adding to the traditional cotton and gum arabic
exports.
* The Government is cognizant of the importance of maintaining the quality of infrastructure
and improving the performance of the Scheme. Consequently there is a focus on generating
adequate funds for the rehabilitation of the GS in the context of a long term vision for the
future of the Scheme.
(c) Encouraging Market Prospects for Agricultural and Livestock Output
* Although world cotton markets are extremely competitive, Gezira can still find substantial
markets for its main line Acala (medium staple) cotton production. Export and domestic
market prospects are also sound for the other main products from the Gezira, except perhaps
for wheat because of its weak competitive position against imported wheat.
* The markets for Sudanese livestock in the region are strong.
(d) GoodProspectsfor EconomicProduction
* Given the generally sound market prospects and with improved technology, better irrigation
management and appropriate inputs, the yields for the main crops can be increased to levels
that would generate remunerative incomes for tenant families. This would enable both tenant
families and the GS to meet debt obligations.
* The returns to institutional change and rehabilitation have already been shown to be high
from the economic analysis of the previous Gezira rehabilitation project financed by a
number of donors including the Bank.
(e) SkilledARC Staff
* There are highly skilled staff in the Agricultural Research Corporation who can continue the
development of agricultural technology that is the fundamental basis for the sustainable
growth of the Scheme.
(f) Addressing the Social Problems
* A more inclusive approach to the rights of migrant labor leading to an improvement to their
access to social services can be achieved.

CONCLUSIONS

Medium to Long Term Plans for Institutional Change

8. A Vision of the Future: The joint team concluded that any consideration of future change
needs to start with consensus on a vision about the future structure and operation of the GS. The
following is the joint team's vision.

iv
 The vision for the Gezira Scheme in this report is that it becomes a center of increased
economic and social activity where the private sector has invested and established
enterprises to meet the demands for agricultural production services from tenants. The
vision includes ultimately the establishment of an independent, privately managed Gezira
Authority operating the scheme at a profit. The Authority would decentralize responsibility
for certain managerial activities in the Scheme to competent farmer groups. Its own
responsibility would be (in collaboration with other agencies such as the Ministry of
Irrigation and Water Resources, Ministry of Agriculture and Forests and the Agricultural
Research Corporation) to arrange for the efficient delivery of core institutional functions
such as irrigation, agricultural extension and the dissemination of market information to
tenants on an environmentally sustainable basis. Finally the Authority, in collaboration
with the State Government, would ensure the provision of improved social services to all
members of the Gezira community.
9. The main conclusion from this report is that the Scheme's problems can be successfully
addressed and hence the vision described above can be achieved through a public/private sector
partnership. The following paragraphs summarize a strategy that was chosen from four medium
to long term options considered by the joint team. The advantages and disadvantages of each of
the options considered are analyzed in Chapter 6 of this report.
10. Public/Private Sector Partnership: The SGB, as a public institution, could increase its
effectiveness substantially if it were to focus on the construction and maintenance of major
infrastructure, the broad allocation (in consultation with groups of tenants) of the irrigation area
to various crop rotations, the distribution of irrigation water through main canals to meet water
demand, and the provision of core support services to tenants such as agricultural extension, and
market intelligence for the commodities produced in the Gezira Scheme.
11. The private sector (namely groups of tenants and other entrepreneurs) could contribute to the
overall efficiency and equity of the Scheme by taking primary responsibility, (through Water
Users Groups) for decisions by tenant groups on preferred crop rotations, the distribution of
irrigation water through minor canals to satisfy the demands of tenant groups, for efficient water
use, for improved cost recovery for irrigation water costs, as well as the provision of services
such as plowing and fertilizer sales. This transfer of responsibilities from the public to the private
sector would continue a trend which started a number of years ago.
12. The joint team concluded that a number of steps need to be taken to implement this strategy.
They are outlined in chapter 6 (mainly paragraph 6.32) and summarized below:
* Leadership: The Gezira Board of Directors should be directed to provide strong leadership
to facilitate the implementation of the strategy. The Directors should be augmented in
number by the addition of a senior representative from the Ministry of Finance and National
Economy and a non-Government lawyer appointed by the Government.
* Management Assistance: The Gezira Board of Directors should be supported by a
Management Assistance Team (MAT) which would provide expert support to the Directors
on their deliberations and provide assistance in respect of the implementation of their
decisions.
* Bulk Water Delivery: The Ministry of Irrigation and Water Resources should be
responsible for delivering irrigation water to the main canals in the Scheme. In the first phase
of this strategy the management and distribution of irrigation water in the minor canals ancl
below, would be the responsibility of the SGB. It is anticipated that, following a transition to
a second phase of change in Scheme management, and after the piloting of Water Users

v
 Groups, such groups would take over the responsibility for water distribution and
management through the minor and tertiary canals to meet tenants' water demands.
* Stimulus to the Private Sector: The SGB should provide the enabling environment for the
private sector (such as traders and agricultural services companies) to be the primary vehicle
for the sale of agricultural inputs and services. Obviously, in the short run the SGB is likely to
remain the main supplier of services, inputs and credit, but under the changed policy the SGB
would provide such services without Government subsidy. In other words the SGB could
continue its current role of providing services such as plowing, weed and insect control to
tenants who expressed their demand to the SGB but these services should be provided under
terms and conditions similar to those facing the private sector. During the proposed
institutional transition the private sector would increasingly take over the role of the SGB in
the provision of agricultural inputs and services.
* Cotton Accounts: The individual account system for cotton with the SGB should be
abolished but tenants could still avail themselves voluntarily of credit facilities through the
SGB at market interest rates, if the SGB is prepared to provide such a service.
* Farmer Crop Choice: Freedom of choice should be introduced for farmers (as a group) to
grow any crop within the constraints of technology and reasonable agricultural practice.
* Ginneries: The ginneries should be offered for sale through international competitive
bidding, but not until after a few years into the implementation of the above-mentioned
institutional changes so that potential buyers can better assess the long term demand for
ginning services in the Gezira.
* Cotton Marketing: The Sudan Cotton Company could continue to be the preferred
marketing institution for cotton, although private trading in cotton by tenants and the SGB
would be allowed and encouraged.
* Sale of Tenancies: Tenants should be provided with the opportunity (following appropriate
changes in the law) to buy and sell their tenant rights within the Gezira Scheme.

Short Term Actions

13. The changes described above are medium to long run institutional changes, even though their
implementation could start relatively quickly. Nevertheless, it is essential to improve the
efficiency of Scheme operations as soon as possible. The joint team concluded that this can be
done by implementing a number of short term actions to improve the incentive for tenants and the
SGB leading to almost immediate improvements in technical performance and income flows.
There is strong support for these actions among the Gezira and Managil Farmers' Union, the SGB
and Government administrators. While relevant to all options for change considered by the joint
team, they would become part of (and in some cases overlap) the set of actions proposed above.
The proposed short term actions are as follows:
* Annual Administrative Charge: Establish a fixed annual administrative charge per feddan
of irrigable land to be paid by Gezira tenants. The actual charge would depend on the quality
of the land and would be due regardless of the crops grown or the level of production.
Planning for this action should be started immediately with the introduction of a fixed annual
administrative charge at the start of the 2001/2002 fiscal year (paragraphs 6.23 and 6.35).
* Irrigation Water Charge: Establish irrigation water charges based preferably on the amount
of water used annually per feddan or, if metering is not possible, as a fixed rate for each crop
type on the basis of the anticipated water use irrespective of the crop results. The charge
should be discounted for shortfalls in water delivery as verified jointly by the Water User

vi
 Groups and the SGB. Planning for this action should be started immediately with
implementation of a fixed irrigation charge at the start of the 2001/2002 fiscal year
(paragraphs6.23 and 6.35).
* Sale of Tenancies:Prepareimmediatelythe legal instrumentsthat wouldallow-tenantsin the
Gezira or any other Sudanesenational to buy and sell tenancy rights in the GS subject to
some simple conditions on maximum / minimum tenancy size and land management
practices. The target date for change in the legal instrumentsand implementationof this
strategyshouldbe no laterthan January 1, 2002 (paragraphs5.16,5.23, 6.23 and 6.35).
* WaterUser Groups:Take steps to establish immediatelytwo pilot Water User Groups in
different blocks of the GS in areas where the delivery and distribution of irrigation water is
technically efficient, where the water volumes can be reasonably well measured, and where
tenant groups are strongly interested in participating in the pilot (paragraphs 2.15, 6.33 and
Annex 3).
* Tenant Crop Choice: Offer groups of farmers in a specified pilot area which has reliable
irrigation water supply and tenancies in a contiguous "hydraulic unit" the opportunity to
exercise their choice of crop rotation for a period of a year starting with the cotton season2
Implementation for the whole Scheme should start as soon as positive conclusions from the
pilot are available (paragraphs 3.9, 6.32, 6.35 and Annex 5).
- Cash on Delivery for Cotton at Ginneries: Establish a cash payment of a fixed proportion
(no less than 50 percent) of the expected "farmgate" price for cotton (according to grade)
when cotton is delivered to ginneries. Of course those tenants who have received crop
financing from the SGB would have this payment immediately credited against their SGB
debts. Subsequent payments for cotton should be determined according to a contract between
the tenant and the SCC. This system of payment should start with the 2002 seed cotton
deliveries. There should immediately be introduced a more transparent determination of final
payments for cotton which should be subject to monitoring by a committee appointed by the
Minister of Finance and National Economy (paragraphs 4.25, 4.27 and 6.35).
* Study of Formal Credit: A study should be mounted immediately to assess the possible
forms of credit institutions that could be formed to offer a safe location for savings and
provide seasonal and long term credit to (a) tenants as an alternative to the cotton accounts
provided by the SGB, and (b) the Gezira community as a whole for agricultural and livestock
production as well as for other purposes such as consumer durables and housing (paragraphs
4.40, 5.23, 6.20 and 6.35).
* Agricultural Research: Ensure the adequate and sustained funding of the Agricultural
Research Corporation to ensure the continuation of a strong program of research leading to
improvements in the productivity of irrigated crops (paragraphs 3.13 and 6.35).
* Benefits and Costs of Infrastructure Rehabilitation: Given the undoubted need to
rehabilitate the irrigation system and some other public infrastructure in the Gezira Scheme,
plans and funding should be established as soon as possible for a detailed assessment of the

1 This work should be coordinatedwith an ongoing TechnicalCooperationProgram(TCP) in the Gezira

financedby FAO called"RaisingProductivitythroughBroadeningFarmner'sChoiceon Farm Systemsand
Water Management"which will involvepilots with Water Users Groups as well as pilots on providing
tenantswiththe choiceof farmingsystems.
2 This work should also be coordinatedwith the ongoing TCP project financed by FAO (see footnote
1).TheMinisterof Agricultureand Forestshad announcedin April, 2000 that tenants in the Gezira would
no longerbe requiredto grow cotton.No furtherdetailshave becomeavailableabout this announcement.

vii
 rehabilitation needs for the Scheme, in the light of the evolving institutional changes and
cropping systems, and the net benefits from such rehabilitation (paragraphs 2.22 2.44).

RECOMMENDATIONS

Establishing Government Policy

14. Process of Decision and Consultation: Given the considerable participation of civil society
in the preparation of this report, it is recommended that the Government make a decision on the
principles of policy and institutional reforms for the Gezira Scheme and set in motion a process of
further consultation and planning for implementing the reforms. The joint team recommends a
process of policy reform and institutional change for the Gezira Scheme that involves the
intensive participation of all stakeholders, including the State Government.
15. Core Recommendation: This report recommends that in the short to medium term the SGB
should continue the trend in recent years of transferring many of its functions to the private
sector. There should be a partnership in which the SGB management remains responsible for
construction and maintenance of major infrastructure, and the private sector should be allowed to
become responsible for water management in minor canals and the provision of production and
processing services. In the longer tenn the Gezira Scheme should become an autonomous
authority with no formal ties to the Government.

Major Immediate Steps

16. Six steps are envisaged for the immediate future.

* First, a decision by the Government on the medium to longer term vision for the Scheme
which would then become Government policy.
i Second, a decision by Government on the joint team's conclusions on the preferred
institutional change to achieve that vision, and on any guidelines it may wish to establish with
regard to matters such as overall policy and the timing or sequence of institutional change.
* Third, appointment by Government of a competent body to be responsible for implementing
its policy. The joint team has concluded that the Gezira Board of Directors is the appropriate
body and should be assisted by a Management Assistance Team (MAT).
* Fourth, confirmation by the Government that the existing Ministerial Committee for the
Implementation of Irrigation Schemes be charged with the responsibility of reviewing
progress in the implementation of the Government's policy decisions on the Gezira Scheme
as part of its standing obligations.
* Fifth, the Government should allocate funds to finance the work of the body charged with
implementing the Government's decision, and also explore sources of funds for the detailed
benefit-cost analysis of the rehabilitation of the Gezira infrastructure.
* Finally, there should be widespread dissemination of the Government's policy decisions
among tenants as well as the broad Gezira community, and the establishment of a framework
for continuous consultation on future plans for institutional and managerial changes in the
Gezira Scheme with all stakeholders including the Government of Gezira State.

viii
17. A Number of recommendations on various aspects of the GS infrastructure have been made.
They are as follows:

* Irrigation: It is clear that the irrigation system in the Gezira is technically inefficient and
needs considerable rehabilitation. Chapter 2 discusses the shortcomings and indicates action
that should be taken. It recommends that plans for de-silting and the repair of regulators be
formulated and costed pending decisions on the future institutional arrangements for the
Gezira Scheme (paragraph 2.22).
* Roads: The capacity of any central Gezira Scheme administration to maintain the road
network should be strengthened either through force account or contracting (paragraph 2.31).
* Gezira Light Railways: The GLR should remain under the authority of the Scheme, but
there should be an intensive review of its efficiency and long term justification at the earliest
opportunity (paragraph 2.34).
* Department of Agricultural Engineering: Tenants should be given the choice as to
whether the Department or private contractors plow their land (paragraph 2.37).
* Ginneries: Ginneries should be moved out of the public sector and offered for sale. That
sale should be at a time (probably in a year or two) when the longer term demand for
ginneries in the Gezira has been clarified (paragraph 2.39).
* Workshops: Future status of the SGB workshops should be examined in an independent
study (paragraph 2.41).
- Telecommunications: The Gezira Telecommunications Center should become integrated
into the national telecommunications grid (paragraph 2.43).

ix
 1. TIME TO TAKE ACTION

Background

1.1 The Gezira Scheme (GS), located between the Blue and White Nile towards their
confluence,was establishedin 1925when the Sennar Dam across the Blue Nile was completed.
In 1959-63the originalGezira Schemewas extendedto includethe Managilarea. The combined
Gezira/ManagilScheme now covers a command area about 2.1 million feddan (about 882,000
3 Estimatesof the total potentialcultivablearea under irrigation
hectares)under gravity irrigation.
in Sudan within the Nile Basin vary, but it is probably between four and five million feddan
depending,of course,on the availabilityof water.4 Hencethe GS representsabout a quarterof
all irrigationarea in Sudan and half the area of irrigationschemesdrawing water from the Nile
system. It usesabout 35 percent of Sudan'scurrent allocationof Nile water, About 55 percent of
the GS, is the propertyof the centralGovernment. The remainderof about 45 percentof the land
is still owned by previous landholdersand with whom the central governmenthas a long term
rental agreement. The currentrental rates are ridiculouslylow by today's standardsbut are under
review.5
1.2 The GS is one of the largest irrigation schemes in the world. This report will show,
however, that it operates at a low level of technical and economicefficiency. Designed for a
croppingintensity of 0.75 the achievedcroppingintensityis usuallyno more than 0.50 which is
very low by any internationalstandard. 6 The Scheme has been plagued over many years by
seriouswatermanagementand distributionproblems,as wellas low yields, costlypest controlfor
cotton, inadequatefinancingand marketingarrangementsfor most crops, inefficientagricultural
processing,disillusionedfarmners,and low cost recovery for irrigationwater deliveries. As a
resultthe GS regularlyincurs an operatinglossand tenants often find it impossibleto make ends
meet from farm incomealone despitethe fact that on averagefarm size is 20 feddan.

1.3 The Governmenthas been concernedfor many years about the Scheme's technical and
economicinefficiencyas well as its heavy demands on public resources. As pressureson the
Government'sbudget mounted, together with the realization that Sudan's future agricultural

3In thispaperanyfuturereferenceto theGeziraSchemewillincludetheManagilextension.Onefeddan=

1.038acres= 0.42hectares.
An objectiveof thereportwillbe to placethe GeziraSchemeintocontextof the totalirrigationin Sudan.
A Presidential committeehasbeenexaminingthelevelof rentspaidto theoriginalownersof the Gezira
landand is understood to havesubmitteditsreportin November,1998.It is understood thata draftreport
hasbeenpreparedandsubmitted to theGovernment.
6 Thisis the ratioof totalannualaverageareaundercropto totalcommand area.
7Earlier researchhasshownthatirrigatedagriculture, measuredthroughthe impacton irrigatedwheatand
cottonproductionand basedon 1978/79data, had the smallestincomemultiplierfor rural households
comparedwiththe othermainsub-sectorsin Sudaneseagriculture(i.e. traditionaland semi-mechanized
farming)EvansDavid,and MohamedDiab,FoodSecurityIncome Distributionand Growth in the Sudan:
Some PreliminaryFindings,mimeo,WorldBank,Washington D.C.,1989.

1
trading opportunities would be tied closely to highly competitive global markets, the search for
strategies and policies to improve the efficiency of the Gezira have become more urgent. The
Gezira is estimated to contribute directly about three percent of national GDP. It produces about
two-thirds of Sudan's cotton exports (historically Sudan's major export but one that has slumped
considerably in absolute and relative terms in recent years) and produces significant volumes of
food crops and livestock for export and domestic consumption. If the GS is to play an important
future role in the country's economy it needs to become more efficient and more productive.
Therefore resolution of the problems of the Gezira Scheme is obviously highly relevant to
Sudan's national development program and to the improved efficiency of Nile water usage. The
Bank has in the past contributed to the rehabilitation of the GS; the sustained development of the
Gezira is also highly relevant to any future Bank assistance strategy for Sudan.

Previous Studies/Investments
1.4 The GS has been studied numerous times over the last 30 years. Many of these studies
were financed by bilateral and multilateral donors including the World Bank' They made
recommendations for change in the institutional arrangements and management of the GS. In
many cases recommendations made 10 to 20 years ago were similar to recommendations in more
recent studies. The failure to take action in the past to remedy obvious institutional problems has
resulted in the current serious deterioration in all aspects of the Scheme. It is certainly time to
take action.
1.5 Over the last two years the Government has again taken a number of steps aimed at
addressing the problems of the Gezira. These steps, described briefly later in Chapter 6, included
a high level committee appointed by the President9 to review the problems of the Gezira as well
as other central government owned irrigation schemes. '° This Presidential Committee submitted
its report in November, 1998 and made numerous recommendations. In summary the report
concluded that the GS should in future become a private company capitalized by publicly traded
shares. Shareholders could come from a variety of investors, including the Government whose
share of the equity would be based on the market value of its equity in the Scheme. It was
envisaged that farmers would sign production agreements in return for the provision of farm
inputs and services from the company. The Presidential Committee also made proposals for the
future of institutions such as the Gezira Ginneries and the Agricultural Engineering Department
which are part of the GS, as well as for cotton marketing arrangements. Some of the report's
recommendations were followed up such as the review of rental rates paid to the original owners
of land that is part of the GS. Others, such as the central recommendation on the future
ownership and management of the GS are still under discussion. A summary of the Presidential

8See, for example,The GeziraStudy mission (Rist Report), 1966;and the World Bank ReportNo. 1836-
SU, Sudan:AgriculturalSector Survey,May 18, 1979 which includes detailed annexes on the Irrigation
Sub-Sectorin Sudan. See also World Bank Credit No. 1388-SU,Sudan: Gezira RehabilitationProject,
which became effective in.May, 1985 and was closed in December 1993 at a final cost of US$191.4
million. Final disbursementsinclude $71 million from IDA, $47.8 million from the Arab Fund, $29
millionfrom a Japanesegrant, $2.4 million from the Saudi Fund, $8.4 million from an Italiangrant, $8.2
million from a British grant, and a Government of Sudan contribution of $24.6 million. The
ImplementationCompletionReportpreparedby the FAO InvestmentCentrere-evaluatedthe rate of return
for the project as it had been implementedat 19 percent and showed that 12 studies were financedand
completedon variousissues. There has been no furtherWorldBank project assistanceto Sudan since this
Crojectclosed.
Establishedby Decree365 of 1998.
10Thereare five other schemesalsoowned by the centralgovernment. They are Rahad,Suki,New Halfa,
Whiteand BlueNile Schemes.

2
Committee's recommendations, justifications, actions taken and mission comments can be found
in Annex 1 to this report.

Request from the Government

1.6 Following the start of a process aimed at normalizing relations between the Sudanese
Government and the World Bank, the Government of Sudan requested non lending assistance
from the Bank including an assessment of actions that could be taken to improve the efficiency of
the Gezira Scheme." The Bank agreed to provide this assistance and use the recommendations of
the November 1998 Presidential Committee's report as its point of departure. In effect the Bank
was being asked for a "second opinion" on the most effective future development strategy for the
Gezira Scheme.
1.7 The Government's request to the Bank was made in March, 1999. Following further
negotiations on the normalization of relations the Bank launched a reconnaissance mission in
August to follow up on the Government's request. That mission reached agreement on objectives
for the review and the basis for a collaborative approach between the Government and the Bank
to the preparation of a final report. A joint Government/Bank team was established to undertake
this task.'2 The main Bank mission visited Sudan in November, 1999. A further Bank mission
visited Sudan in February, 2000 to discuss a preliminary draft of this report primarily with
members of the joint team. A second draft was discussed in Sudan with the Government on May
27, 2000.'3
Improving Economic Performance
1.8 The fortunes of the GS are influenced by the national economic environment. Strong
growth in the domestic economy will stimulate demand for its output, inflation will place cost
pressures on producers and raise interest rates for credit, weakness in the balance of payments
will make it more difficult to obtain imported inputs, and domestic budget deficits will reduce the
chances of public financing for important infrastructure development. Fortunately the economy
is gradually improving which makes this an excellent time for taking action on the institutional
and economic problems of the GS. The following paragraphs will sketch out the major features
of the improving macroeconomic picture. A more comprehensive statement can be found in
Annex 2.
1.9 Economic Growth. Achieving sustained growth in Sudan has been hampered by civil
war, social dislocation and the brain drain, as well as the deterioration of basic infrastructure and
the lack of access to aid and foreign investments. In addition, Sudan has often suffered from
severe external shocks, including floods and drought. Nevertheless, there are broad indications
that the economy improved in the 1990s after years of decline. Officially, the GDP growth rate
averaged five percent from 1992-93 to 1998, based mainly on agriculture.

Followingthe accumulationof arrears in payment obligations,the World Bank closed its Resident
Mission in Khartoum in 1993. Since then there has been no lending, economic and sector work or
supervisionof projectssince all projectswere cancelledsoonafterthe departureof the ResidentMission.
12 Membersof the joint team are Omer Ali MohamedEl Amin (GeneralManager,Sudan Gezira Board)
and El ToyibElalam (SudanGeziraBoard),El Fatih Ali Siddig(DirectorGeneral,InternationalEconomic
Relations Department,Ministry of Finance and National Economy), Abdelrazig el Bashir, (Under
Secretary, Ministry of Agricultureand Forests), Siddig Abbo and Omer M. A. Elawad (Ministry of
Irrigation),Gafaar Ibrahim (AgriculturalResearch Corporation),Abdin M. Ali (Director General, The
SudanCottonCompanyLtd.)and Fatma AbdallaShoke(The SudanCottonCompany,Ltd).
3 This final reporthas takeninto accountthe commentsandreactionsreceivedon two previousdrafts.

3
1.10 Inflation. Based on Khartoum figures, inflation was high in the earlier parts of the 1990s,
reflecting high fiscal deficits and domestic credit expansion. Crop failure and shortage of basic
food items, and increases in the domestic price of key imports, especially petroleum, also fuelled
inflation. Of course the abolition of most administered prices since 1992 allowed high prices to
be reflected in the open market. Recently, however, as the exchange rate stabilized and supplies
improved inflation declined substantially from a peak of 150 percent in 1992 to 12 percent during
the 12 months to May, 2000.
1. I I Savings/Investments: Domestic savings are low at about five percent of GDP. There are
no Government revenue surpluses over recurrent expenditures. The Government is placing
increased emphasis on deregulating and promoting private investments, which are also very low,
excepting the recent spurt of foreign direct investments focused on creating the oil pipeline and
related activities. The Investment Promotion Act of 1990 (amended in 1996) was amended again
in 1999 to rationalize the investment sanctioning procedures and stimulate greater private
investments and growth.
Public Resource Management
1.12 Development financing and effective public resource management are extremely difficult.
During 1994-96, for example, revenue fell from 9.4 to 6.2 percent of GDP, while expenditures
rose from 22 to 26.6 percent of GDP. The revenue ratio at the federal level is about eight percent
of GDP. Even if state level revenues are taken into account, the total revenue ratio would only be
about 12 percent of GDP, compared to the average in less developed countries of 18-20 percent.
1.13 Development expenditures funded by the central government are minimal, rising from 0.5
to 0.8 percent of GDP between 1996 and 1998. An estimated 0.2 percent of GDP of development
spending was self-financed by public corporations owned by the Government. Gezira's
contribution to this will need to improve. As a result of the financing difficulties less than half of
the development expenditure budget has been funded since the mid-1990s. The share of foreign
financing of development projects was an estimated 10 percent in 1998.
External Performance
1.14 External Debts and Trade: The main challenge to external financial management is a
heavy external debt burden, which amounted to some US$23.7 billion at the end of 1999.
Multilateral institutions account for 19.4 percent of the debt. The major multilateral creditors
include IBRD, IDA, the IMF, the Arab Development Fund, and the Arab Bank for Economic and
Social Development. Estimated exports totaled US$780 million, compared to imports of
US$1412 million in 1999. Export volume grew at 14 percent during 1995-99, due to trade and
exchange rate reforms and liberalization of procurement prices. Exports are becoming more
diversified largely due to the start of petroleum exports in mid-1999. The share of cotton and
gum arabic exports fell from 33 to 14 percent between 1994/95 and 1999, while groundnuts
dropped from 5.5 to 0.7 percent. Livestock's share remained the same (about 14.7 percent) while
gold's and sesame's share showed some increase. Petroleum exports are expected to account for
an increasingly large share of total exports, rising from one-third of total exports in 1999 to more
than half in 2000. Most of Sudan's petroleum product needs are now met by local production
rather than through imports.
1.15 Exchange Rate Reforms: Sudan made unsuccessful attempts at exchange rate reform in
the early 1990s. A unified exchange rate system adopted in February 1992 collapsed in October
1993, as inadequate reserves, ineffective instruments of monetary control and weak financial
policies undermined stable market-oriented exchange rate policies. Starting in 1997, a phased
introduction of a wide range of trade and other reforms moved the exchange regime towards a
unified system. The spreads between official and unofficial exchange rates were gradually

4
reduced and the exchange rate was effectively unified by the end of October 1998. The rate is
now determined on the basis of a 5-day moving average.

Poverty and Social Development

1.16 Poverty: Sudan's per capita income was about US$290 in 1998.14 Poverty is increasing,
though no reliable estimates of its incidence, depth and intensity are available.15 Recent growth
of agriculture has not ensured nation-wide food security, because of disparities in income,
regional differences in the pattern of agricultural growth and disruption caused by the civil war.
The vulnerability of Sudan to drought causes substantial reductions in food production and
enormous losses in income from other agricultural and pastoral activities, and hence serious
increases in poverty. So long as the drought has not also affected the Nile water supplies,
irrigation schemes such as Gezira can play an important role in sustaining growth in agricultural
production which provides employment and, if not additional food production, additional income
to import food.
1.17 Social indicators: The social indicators for the 16 northern states are lagging behind
countries at the same level of per capita income. In the North, the adult illiteracy rate is 47
percent (59 percent for women).'6 Life expectancy at birth is 53 years; infant mortality is 71 of
1,000 births. Basic social services, namely, education, health and water and sanitation, have been
seriously eroded as a result of the combined impact of civil conflict and natural disasters. Only
some 30 percent of rural residents and 40 percent urban dwellers have access to safe drinking
water. Primary school enrollments have declined to about 56 percent. Access to health services
is also limited.

Time for a Change in the Gezira

1.18 The improving economic conditions summarized above can be traced to the change in
macroeconomic policies in 1992 when most markets in the economy were to a large extent
released from the burden of Government controls. The Government also encouraged the private
sector to increase its investment in the economy and put in motion a program of this-investment
in productive enterprises. As discussed in Chapter 6, this was also the time when the Gezira
Scheme was no longer able to automatically obtain finance for its activities from the Central
Bank (Bank of Sudan.) Since then the Scheme has used a consortium of commercial banks for
financing and when this was terminated the Sudan Cotton Company became the main financier.
Nevertheless, eight years after the major turn around in Government economic policy the Gezira
has still not changed from a government irrigation system with minimal adjustments in the
situation facing tenants on matters such as credit, input supplies, water management, tenancy
transfer, cotton ginning and marketing. It is time to follow through on the Government's 1992
objectives of encouraging the private sector to take on a greater role in economic development.
Overview of the Report
1.19 Objectives: This report is an evaluation of the basic infrastructure of the GS, its efficiency
as an irrigation system and producer of irrigated products, the effectiveness and sustainability of
changes in management policies, operational strategies, and institutional arrangements introduced
into the Gezira Irrigation Scheme since the above-mentioned Presidential Committee report of
1998. It was also agreed that the report should include an analysis of possible future changes in

14 Totalpopulationwas estimatedat 28.3 millionin 1998,with averageannualgrowthrate of two percent.

15 Estimatesof the level of the incidenceof poverty coveringthe 16 Northernstates alonevary widely up
but go as high as 90 percent.
16Basedon 1997data.

5
policies, strategies and institutions that are currently being considered by the Government. In
effect the main objective of the report is to assess the most effective future development strategy
for the Gezira Scheme.

1.20 Audience: The primary audience for this report is the Government of Sudan and the
Sudan Gezira Board, but its likely audience is much larger. Among the groups with an interest
are the Gezira-Managil Farmers' Union and tenant farmers, the Sudanese legislature, the
commercial agro-industry sector including traders in agricultural inputs, the financial sector, the
world cotton marketing and processing industry, bilateral and multilateral donors, and non-
government organizations (NGOs). The report is therefore written so that those not closely
associated with the Gezira Scheme in the past will be able to grasp its long history and the main
issues facing the Scheme now.
1.21 Structure of the Report: Apart from the Summary, Conclusion and Recommendations,
the report will be organized around five main issues. They will be as follows:
* Infrastructure: An evaluation of the current and future development of the Gezira Scheme's
infrastructure such as irrigation operations and management, as well as the current supporting
infrastructure for land preparation, communications, ginning and transport.
* Technology: An evaluation of the availability and future development of appropriate
technology for the various crops and livestock, the use made of the available technology, and
the role of the Agricultural Research Corporation.
* Economic Incentives for Farmers: An analysis of the profitability and competitiveness of
various irrigated crops and livestock production options under irrigated conditions from the
national and farmer's point of view. The chapter will analyze the impact of different levels of
yield on the profitability of tenant farmers in the scheme.
* Social Issues: A brief perspective on life in the Gezira which reveals significant poverty.
This chapter will focus on how the fortunes and welfare of people with and without land are
affected by the productivity of the Gezira Scheme and the way its resources are managed and
administered.
- Institutional Issues: An evaluation of the effectiveness and efficiency of the institutional
arrangements that have been or are being implemented at the time of the mission in the
Gezira, compared with other options. This part of the report will include an evaluation of the
overall institutional arrangements of the Gezira Scheme, including the appropriate roles of the
public and private sector, and options for a changed institutional management structure.

6
 2. INFRASTRUCTURE

2.1 The purpose of this chapter is to briefly discuss the issues facing the vast infrastructure
investment in the Gezira Scheme (GS). It is estimated that the value of infrastructure within the
GS is between $4 and $6 billion.'7 Most of this is, however, accounted for by the irrigation
infrastructure and therefore this chapter will focus quite heavily on irrigation and discuss the
problems facing the irrigation works and indicate strategies for addressing those problems.

IRRIGATION

2.2 The Sennar Dam was completed in 1925 and most of the other infrastructure in the GS
dates back to about that time. In the Managil area infrastructure dates back to the early 1960s
when that extension to the scheme was brought on stream. Given its age it is remarkable that
most infrastructure is still in working condition. This is to the credit of the original designers and
those who for many years devoted considerable energy and resources to maintaining structures
and machinery under very severe financial constraints. Nevertheless, some infrastructure is not
functioning efficiently and is in need of substantial and urgent rehabilitation. The World Bank's
Gezira Rehabilitation project (approved in 1983)18was intended to provide support for the
rehabilitation of the GS. This project was closed in December, 1993 when the Bank withdrew its
financial support from Sudan. This chapter will start with irrigation infrastructure because it
faces major problems and is in urgent need of rehabilitation.
2.3 The Gezira is the only gravity-fed large irrigation scheme in Sudan. Only about 70,000
feddans of the total command area of 2.1 million feddans' 9 are not under gravity irrigation. The
main features of the GS are flat topography and unlined earth canals with low percolation due to
high clay content of the soil. It is regarded as an outstanding feat of engineering and has been a
model for other large irrigation projects in Sudan. To discuss the problems it is necessary to
describe some of the crucial features of the scheme.

The Irrigation System

2.4 Water Storages: Irrigation water is supplied from the Blue Nile reservoirs at Roseires and
Sennar. The Blue Nile has an average annual flow of 50-billion cubic meters at Roseires, with
large seasonal and annual variations. The flow of the Blue Nile rises steeply from the end of June
to an end-of-August peak, followed by a sharp decline, to a minimum flow of about two percent
of the peak, at the end of April. The Blue Nile carries large quantities of silt as a result of its
steep gradient and heavy seasonal rainfall in its upper catchment area. The silt load in the Nile is
heaviest during July and August and as a result of an increase in irrigation during these months,

17 This is not a formal valuation. The estimateincludes(a) irrigationland - $3.15billion;(b) GS buildings

includingginneries - $0.1 billion;(c) machinery,equipmentand vehicles - $0.09 billion;(d) roads -$0.1
billion. There is no explicitvaluationforthe SennarDam or the main canalsfrom the damto the scheme.
18 Bank Report No.120, The Gezira Irrigation Scheme in Sudan, Agriculture and Rural Development
Department,1990.
19 SudanGezira Boardmanagessome additional60,000 feddanin pump schemeslocatedon the east bank
of the BlueNile (Hurga,Nur ed Din and Guneidextension)which is not servedby the SennarDam.

7
significant volumes of the reservoirs are lost to siltation, annually. The storage capacities of
Roseires (3,024 million cubic meters) and Sennar (930 million cubic meters) are relatively small
and represent only about five percent of the average annual flow of the river (and 15 percent of
the Nile water allocation to Sudan). Siltation studies suggest that by the end of 1985, the volume
of the Sennar reservoir had been reduced by 34 percent (compared with the designed volume) to
about 600 million cubic meters and that of Roseires by 25 percent to about 2,250 million cubic
meters. The Sennar Dam itself, however, has recently been renovated and is in excellent
condition.
2.5 Water Distribution: Water is diverted from the Sennar reservoir by means of twin main
canals with a combined maximum daily discharge capacity of 31.5 million cubic meters (354
cubic meters per second), running north to the first group of canal regulators 57 kilometers from
the dam, (See Map No. IBRD 30670 at the end of the report). From there four branch canals
convey water to the Managil extension, while the Gezira main canal runs north for another 137
kilometers. Major canals take off from main and branch canals and supply water to minor canals.
These canals flow continuously throughout the growing season. The network consists of 2,300
kilometers of branch and major canals, and over 8,000 kilometers of minor canals. Minor canals
supply water via gated outlet pipes to field channels (Abu Ishrin)0 each irrigating 90 feddans, (38
hectare), called "Numbers". Each number is divided into 18 tenant fields of 5 feddans (called
hawasha). A network of cross-bunds for irrigation by basins in turn divides the tenants' fields.
See Annex 3 for a diagram of a typical layout of the irrigation system.
2.6 Water flows in the primary canal network (main, branch and majors) continuously during
the irrigation season - July through April. Minor canals were designed to store water at night as
irrigation was to be carried out only during the hours of daylight but this is no longer practiced.
The water is released based on an indenting procedure whereby at the beginning of each cropping
season the demand at each minor canal and the delivery losses are calculated for various reaches
of the canals up to the Sennar Dam. The volume of water released is regulated by various control
structures throughout the system.
2.7 The major canals have peak design capacity of 20 cubic meters/feddan/day (equivalent to
0.55 liter/second/feddan) in Managil and between 13.5 and 15 cubic meters/feddan/day in Gezira
(equivalent to between 0.37 and 0.41 liter/second/feddan). These capacities were based on the
peak water requirement of the cropping pattern and intensity envisioned at the design stage. They
determine the optimum capability of the irrigation system for water delivery and distribution and
crop diversification and intensification, which indicates that there is greater flexibility at Managil
extension.
2.8 The minor canals are grossly over designed for the flows (0.5 to 1.5 cubic meters/second)
that they are intended to carry. Minor canals are set at very slight slopes, 0 to 5 cms per
kilometer, and flow with very low water velocities, and thus have a very limited sediment
transporting capacity. They act as sediment traps particularly at the head reaches of the canals.
Weed growth reduces velocities further, enhancing rates of sediment deposition. The result is a
massive de-silting requirement as part of annual maintenance.
2.9 Water Losses: In the Gezira scheme seepage losses are virtually nil due to the extremely
impermeable nature of the soil and subsoil. Irrigation water does not contribute to the deep
groundwater table underlying the scheme. Evaporation and breakage from the canals to the roads
and fallow areas are the major sources of water losses from the system. Therefore, the water use
efficiency of the irrigation network is potentially very high.

20Designatedas "Abu Ishrin" or "Abu xx" which literallymeans "father of 20" meaning that the canal
governs20 fieldchannels. The Abu xx conveyswaterto the "numbers".

8
2.10 Drainage: The present drainage system consists of 1,500 km of major drains and about
6, 000 km of minor drains. There are no on-farm drainage facilities due to the nature of the soil
and absence of high groundwater table. The main purpose of the drainage is to remove the
surface runoff due to rain or excess irrigation.

Operation of the Irrigation System

2.11 Crop Rotations: The Gezira scheme was built with the primary objective of producing
cotton. The land is divided into 114,000 tenanciesW1 with an average size
of 20 feddan (about 8
ha). Each tenant has plots in four numbers (tertiary units) and has to plant according to the
approved rotation so that all the cotton fields are together, all the fallow together in another
"Number" and so on. In the very early days a six-course rotation was practiced, but following
some failures, this was changed in the early 1930's to an eight-course rotation (cotton, fallow,
fallow, cotton, fallow, sorghum, lubia, and fallow) with nominal cropping intensity of 50 percent.
This kept the demand for water within the capacity of the irrigation system to deliver. Since that
time there has been further diversification and intensification. Until recently, the main Gezira
scheme had a nominal intensity of 75 percent in a five-course rotation of cotton, sorghum,
groundnuts, wheat with one fallow, while the Managil extension had 100 percent with no fallow.
At the present, however, fallow has also been introduced in Managil where the target cropping
intensity is 75 percent throughout, although various problems have kept the actual intensity well
below that figure in recent years.
2.12 Water Management: Current water management in the Gezira Scheme is substantially
different from the original design, which was used satisfactorily prior to the 1960's. The two-fold
expansion of the irrigation area and successive crop intensification in mid-1960's following
completion of Managil extension required additional quantities of water to be diverted and
distributed. Accordingly, the volume of water released to the system at Sennar increased by more
than three-fold from 2,000 million cubic meters in 1957-58 to 7,100 million cubic meters in
1997-98 - equivalent to about 35 percent of the Sudan's share of the 1959 Nile Water Agreement,
measured at Sennar. The additional amount of water carries a greater volume of silt, particularly
because diversion of irrigation water from the Sennar Dam begins a month earlier than before, at
a time when silt concentration in the Nile is at its peak. Therefore, considerably more extensive
annual silt and weed removal activities are necessary to keep the system in good working
condition.
2.13 In order to distribute the increased quantity of water required for intensification, most of
the branch and major canals are being operated with higher than the original design water levels,
and the minor canals that operated as night storage canals are now flowing continuously. The
present practice of canal operation does not pose a major problem when the canal networks are
adequately maintained. However, it becomes problematic and causes breaches of the canal banks
and excessive loss of water when the canals are silted up, because the water levels need to be
raised even higher to deliver the.-same quantity of water. At higher water levels the control
structures in the canals cannot function efficiently.
2.14 The management of the GS in respect to irrigation water has always been divided between
the Ministry of Irrigation and Water Resources (MOIWR) and Sudan Gezira Board (SGB).
MOIWR is responsible for supply and delivery of water to the minor canals. In 1995, MOIWR
established the Irrigation Water Corporation (IWC), a financially independent parastatal, to
operate and maintain the irrigation system in the GS and other large central Government-owned

21 This is the official number of tenancies,but informal informationfrom the SGB indicatesthat the
number of tenancieshas increasedto about 128,000. The missioncould not obtain an up to date statement
of the numberof tenanciesand their size distributionfrom the SGB.

9
irrigation schemes. Therefore, until recently, IWC/MOIWR was also responsible for
maintenance of the minor canals, but this arrangement failed because water rate collections
declined and the IWC filed for bankruptcy. The responsibility for the distribution of irrigation
water in the minor canals and below was then transferred to the SGB in March 1999. SGB is now
also responsible for operation and maintenance of minor canals down to the field level as well as
the collection of water charges.
2.15 In practice the tenants are already involved in operation and maintenance of the smallest
field canals (Abu Sittas)2 2 and defacto control of the operation of the larger tertiary canals (Abu
xx). On the other hand maintenance of Abu xx canals is carried out by SGB at the tenant's
expense. The tenants have no formal groups for the coordination and management of operation
and maintenance activities. In Chapter 6 it will berecommended that such groups be established
to improve the efficiency of water management and maintenance and to collect water charges.

Serious Deterioration in the Status of the Irrigation System

2.16 The Gezira Scheme has a long history of satisfactory performance to the extent that it has
been used as model for design and development of all other major irrigation systems in Sudan. In
recent years, however, the Scheme has been run down because of increased silt deposits and
insufficient funding for repair and maintenance. The operation of the scheme is inefficient and
there is a lack of equity and reliability of water supply to tenants.
2.17 Siltation of Canals and Drains: The amount of silt entering the Gezira Scheme has
increased significantly over the years. The main sources of siltation are the Blue Nile waters,
wind-blown material and canal banks eroded by rain, and animal crossings. Historical data
available for 1933-38 and 1988 suggest that average sediment concentrations in the water flowing
through the Gezira main canal in August have increased four fold. This increase is attributed to:
(a) the diversion of much higher quantity of water due to the successive extensions of the scheme
to its present size, and increased crop intensity; (b) the use of water in late July and early August,
when sediment concentrations are at their highest; (c) the reduced trapping efficiency of the
Roseires and Sennar reservoirs as their dead storages are silted up; and (d) the increased erosion
in the Blue Nile catchment area in Ethiopia.
2.18 The amount of silt deposition varies from year to year and is usually higher in the dry years
when more water is diverted from the Blue Nile. Physical conditions of the canals and the
amount of silt removal backlog also play an important role in the annual silt deposition in the
canals. Studies conducted by Ministry of Irrigation's Hydraulic Research Station in collaboration
with Hydraulic Research Ltd., U.K. in the late 1980's suggest that average annual silt deposition
in the Gezira canals is from 5 to 10 million m3 . MOI's experience, however, indicates that in
recent years the average amount has been even higher than 10-million cubic meters (about 6.8
cubic meters/feddan, or 16.0 cubic meters/ha). Of the sediment entering Gezira irrigation canals
(at km 57), approximately 5 percent settles in the main canals; 23 percent in the majors and
branches; 33 percent in the minor canals and the remaining 39 percent pass on to the field.
Therefore, of the total quantity of silt deposited in the canals, 54 percent ends up in the minor
canals.
2.19 The minor.canals are generally silted up and infested by luxuriant weed growth to a degree
that little water reaches the tail end of the numbers and some areas are now out of production.
Minor canals are in worst condition as the proportion of the annual silt deposition in these canals
(54 percent) is more than the total amount deposited in all the remaining Gezira irrigation canals

22 Designatedas "Abu Sittas"or "Abu vi"; literally"father of six" meaningthat the canal govems six field
channels. The Abu vi conveyswaterto the farmersfieldcalled a "hawasha"in a number.

10
combined and the amount removed has been far from sufficient. The main, branch and major
canals are generally in better condition, although severe weed infestation and pockets of shallow
silt deposits near the banks are common. In the last five years canal regulators and structures
have not received any repair and /or maintenance and most do not function correctly. Water
escapes at the main and major canals are not in good working condition. The result of all these
shortcomings has been rising canal beds and water levels, "drowned" control structures, excessive
loss of water, difficulties in supplying parts of the scheme with water, and reductions in cropped
area.
2.20 Silt Removal: There has been a major effort to clear silt from the canals, but this has not
kept pace with the rates at which silt is settling. The annual quantity of silt removed from the
canals declined by 48 percent, from a peak of 14.2 million m3 in 1995/96 season to 6.9 million m3
in 1998-99. As a result, there is a large backlog of silt, the amount of which is increasing rapidly
as more silty water is forced (with slow velocities) through a network of highly deteriorated and
partially obstructed canals. In the 1980's when the irrigation canals were in better conditions
removal of five to seven million cubic meter of silt was considered to be satisfactory. Nowadays,
with the irrigation canals in poor condition, removal of 10 to 14 million cubic meter of silt from
the canal, or a two fold increase is not nearly satisfactory.
2.21 Until recently, de-silting and de-weeding operations were carried out solely by the
Earthmoving Corporation (EMC), a parastatal that was formerly a division of MOIWR. At
present, however, a number of qualified private contractors with adequate capability and
equipment have emerged. These private contractors are actively competing with EMC, which is
currently facing financial difficulties. Indeed, it is understood that private contractors have taken
over more than 85 percent of the excavation and earthmoving work in Sudan. A number of these
private contractors are active in the Gezira Scheme.
2.22 A significant canal de-silting program started in March 1999. Some 13 private and public
contractors were mobilized to carry out the works. The program is planned to remove the silt
backlog entirely, particularly in the minor canals, and set the stage for a regular annual de-silting
program in the coming years. By the end of October 1999, nearly seven months after the start of
the program, a massive quantity (32.5 million m 3 ) of silt had been removed (4.6 million
m3 /month) which is greater than the total quantity of silt removed in the last three years. Much
more de-silting remains to be done, as many canals visited by the mission are still heavily silted
and infested by weeds. No particular program for repair and maintenance of the water regulators
and gates has been planned for the near future. It is recommended that plans for de-silting and the
repair of regulators be formulated and costed pending decisions on the future institutional
arrangements for the Gezira Scheme.
2.23 Traditionally, manual labor was used for removal of weeds, but this practice has been
abandoned due to health hazards such as bilharzia. Chemicals also are not being used against
weeds because of environmental reasons and budgetary constraints which preclude hiring
specialized foreign contractors. The IWC used excavators with specialized weed-cutting buckets
for removing weeds with. very limited success. The main problem with this approach has been
lack of funds, particularly foreign exchange, for maintenance of the equipment. At present, only
four out of twenty excavators are operational and de-weeding activities are limited. In practice,
removal of weed is incidental to the on-going de-silting operations that are carried out by
contractors.
2.24 Maintenance Costs: The deposition of silt and weeds in the canals has become the most
serious technical problem of the Gezira Scheme. The operation and maintenance expenditures by
IWC have averaged US$14.3 per irrigable hectare (SDinar 6.1/feddan) per year over the last four
years. More than 60 percent of which was spent on de-silting of canals, alone. The amount spent

11
on de-weeding and maintenance of regulators was very low and accounted for only one percent
and four percent, respectively. These O&M expenditures are clearly below what is considered
adequate for an unlined irrigation system which under harsh climatic conditions suffers from
severe chronic siltation and weed infestation problems. Continuous decline and deterioration of
the irrigation infrastructure over the last four years reflects the inadequacy of maintenance.
Experience suggests that adequate operation and maintenance would cost anywhere between two
to three times the amount currently being spent annually (about SD2.1 billion, or US$8.2
million).
2.25 Cost Recovery: tJntil March, 1999 IWC established water charges per crop on the basis
of its annual budget for operation and maintenance of the irrigation infrastructure, approved
cropping pattern and water requirement of individual crops. The proposed budget was negotiated
with SGB prior to presentation to the IWC board of directors, which included farmers
representatives and members of the SGB and sister bodies managing other irrigation schemes. In
the budget negotiation process the proposed budgets were reduced considerably, before approval.
The capital recovery costs that were always included in the proposals, although modest, were
never approved. In the four-year life of the IWC, the average reduction of the proposed (and
realistic) annual budgets was 38 percent. Under the new arrangements, SGB will set annual
water rates to be charged per crop, based on the annual O&M budget negotiated with Gezira
Irrigation Administration and the agreements reached with the Farmers' Union representatives.
2.26 Irrespective of the agreed water charges, they are not levied if crops fail which establishes
a disincentive for farmers to ensure a successful crop. Although, the irrigation network is
equipped to measure water discharges in the primary system down to the minor canals as
mentioned already, accurate measurement is not currently possible due to the deterioration of
regulators and the higher than designed water levels in most canals. Water charges in the GS are
therefore flat annual rates per crop regardless of the number of irrigations and/or the amount of
water used by the tenants. This does not offer any incentive for the tenants to conserve water.
Charges are also levied if irrigation water is not delivered.
2.27 Water charges are low in terms of total costs of production (only five to seven percent of
direct farm input cost), but the annual revenues generated are not sufficient to cover the costs of
an adequate level of operation, maintenance and the timely replacement of the irrigation and
drainage facilities.
2.28 Under the current arrangement SGB collects water charges for cotton through the tenant
individual account system set up in 1981. Water charges for other crops are collected by SGB,
directly from the tenants at harvest time. The amount to be paid is based on the harvested rather
than cropped area as determined by the SGB Inspector. If there is a dispute as to whether a water
charge should be paid, a committee is established which then meets to resolve the dispute23
Figure 7 in Annex 3 shows the fluctuations in water charge collection rates over the last ten years.
The average total water collection rate for the last ten years was very low at 41 percent of the
amount budgeted. SGB's payments to IWC were similarly low with a sharp decline from a high
of 82.9 percent in 1996-97 season to a low of 5.7 percent in IWC's final full year of operation,
namely 1998-99.
2.29 The low level of water charge collection has resulted in low funding of operation and
maintenance activities which in turn led to the deterioration of irrigation infrastructure and low
level of services to tenant farmers. Consequently, large areas went out of production (either due
to water shortages or flooding) and cropping intensity fell to a mere 37 percent in 1998/99 season

23 The committeeis made up of the field inspector,a village council representative,a Farmers Union
representative,the accountantfor the block,a memberof the securitycorps, andthe sammad.

12
with significant losses to tenants. This in turn led to the inability of the tenants to pay water
charges. This vicious cycle, which is discussed in more detail in Annex 3, continues today. In
Chapter 6 it will be recommended that charges for water be levied according to the amount used.

OTHER INFRASTRUCTURE 24

Roads
2.30 Features:There are about 18,000kilometersof roads along the canal system and 30,000
kilometers of farm access tracks. All these roads are unsurfaced dirt roads and are almost
impassable after the rain and part of the rainy season. The roads are important for general
communications and the transport of goods and services, and yet in most parts they are
deteriorated and in need of considerable rehabilitation.
2.31 Constraints and Actions: The increasing population and motor vehicle use have resulted
in heavier traffic than the original design of these roads. Lack of adequate maintenance and poor
drainage together with heavy traffic are the contributing causes of deterioration of the roads.
While there is no specialized technical section within the Engineering Department of the SGB,
road maintenance is carried out by administrative blocks - usually ad-hoc and is limited to light
surface grading. It is recommended that the capacity of any central Gezira Scheme administration
to maintain the road network should be strengthened either through force account or contracting.

Gezira Light Railway

2.32 Features: The Gezira Light Railway (GLR) network was built in 1919 for the purpose
of transporting seed cotton from the collecting centers to the ginneries and delivering agricultural
inputs such as fertilizers, seeds, herbicides and sacks to the field. The railway covers about 75
percent of the scheme and includes some 900 km of narrow gauge track connecting 119 cotton-
collecting centers. In addition to main lines there are some 437-km of station loops, branches and
tracks in yards and around ginning factories.
2.33 In 1998/99 season, GLR transported some 11 million-ton km of agricultural products, or
about 30 percent of the Gezira transport demand. Privately owned and operated trucks
transported the remaining 70 percent at very competitive rates. GLR has been particularly
effective in the wet season when many of the Gezira roads are impassable. GLR has been able to
compete with trucks on the short-hauls by introducing a low rate of SD 30 per ton km, which is
based on its annual expenses and projected demand, but includes neither amortization nor major
maintenance. The rates charged by private trucks are SD 30-35 per ton km for the short hauls,
and less than SD 30 per ton km for the long hauls.
2.34 Constraints and Actions: GRL is equipped with 62 locomotives and 1,800 wagons. The
number of operational locomotives and rolling stock is seriously depleted because of inadequate
maintenance. In addition many of the tracks which are often damaged at road crossings by
vehicles and by floods are in need of substantial repair. It is not likely that the private sector
would find the railway system an attractive investment. It is therefore recommended that the
GLR remain under the authority of the Scheme, but it is also recommended that an intensive
review of its efficiency and long term justification be made at the earliest opportunity.

24 The informationin this section is drawn from various sources such as direct interviewswith SGB
officialsin the infrastructureunits, data providedin writingby the officials,and variousdocumentationon
the assets of the GS such as in Bank Report 4218-SU, Sudan: Gezira RehabilitationProject, Staff
AppraisalReport,WorldBank,May 15, 1983.

13
Department of Agricultural Engineering
2.35 Features: In principleall land allocatedto cotton productionin any year is preparedfor
planting by the SGB's Departmentof AgriculturalEngineeringusing its fleet of tractors and
cultivatingequipment. This Departmentis in theoryalso responsiblefor the cleaningof Abu xx
canals, land preparation for cotton including ridging before planting, application of pre-
emergence herbicides, the broadcasting of fertilizers, and sometimes wheat and sorghum
harvesting, and the threshing of groundnuts. Currently the Departmenthas a staff of 44
engineers/techniciansand 368 mechanics,drivers and laborers,all of whom are permanent. It
undertakesonly about 30 percent of the work for which it was establishedand the remainderis
contractedout to the private sector at the same approvedrates the tenants are charged for the
Department's servicesthrough their individualaccounts. It is understood,however, that the
Departmentstill does all the cleaningof Abuxx canals.
2.36 Constraintsand Actions: The main constraintsfaced by this Departmentare the same as
similarfield units in a centrallymanagedorganizationelsewherein Africa. It has a large area to
cover, a large and complex inventoryof equipment,a huge staff managementchallengewith
publicsectoroverheads,and financialconditionssuch as its fees and a budgetwhich are set by a
centralbureaucracy- namely the SGB. Under such conditionsit is difficultto be flexible and
competitivewith the private sector. Indeed, in the past this Departmenthas not been able to
cover its costs, although it appearsthat the reversewas true for 1998/99. Neverthelessit is not
clear that adequate provision has been made for depreciation of vehicles, machinery and
equipment.
2.37 While no judgement can be made about the quality of the Department'swork compared
with the qualityof work done by the privatesector,there have been complaintsaboutthe quality
of land preparationfor cotton in the GS. Delegatingits work to the private sector is logical
becauseof the inability of the Departmentto handle all the land preparationcommitments,but
supervisionof the work of the private sectormay not have been adequate. There is no reason in
principle why the private sector should not undertake all land preparationand related crop
preparationactivities. This wouldplace the responsibilityon tenantsfor decidingon who should
and at what cost. The Departmentmay wish to remain as a competitorwith the private sector
ratherthan havethe responsibilityto arrangefor all the work. It isrecommendedthattenants be
giventhe choiceas to whetherthe Departmentor privatecontractorsplow their land .
Ginneries
2.38 Features: All cotton produced in the GS is sent to one of the Scheme's 12 ginneries
accordingto the locationof the tenant and the variety of cotton. Many of these ginneriesdate
back as far as 1927 but have been renovated to varying extents and also some have been
convertedfrom "roller gins" to "saw gins" which are more suitable for the ginning of Acala
cotton. Some ginneries are still not mechanized. The ginneries currently have a permnanent
employmentof 194administrativeand professionalstaff and 1,208pernanent machineoperators.
Duringthe 1999/2000ginning season an additional530 temporaryadministrative/professional
and 4,493temporarymachineoperatorsand field laborerswere employed.
2.39 Constraintsand Actions: Operating these ginneries has become a major challenge
because of their age and the shortage of spare parts. Many of the spare parts are now
manufacturedby the Gezira workshopsbecause these parts are either no longer available or
becauseof the shortageof foreign exchange.25 It was not possible for the mission to obtain a

25 Despitean expenditureof $21.86millionon the rehabilitationof ginneriesunder the Gezira

Rehabilitation
Project(1983)the overriding
needremainsthe furtherrehabilitation
of theginneriesin order
to makethemmoreefficient.Thebasisformovingforwardis availablein a reportpreparedunderthe

14
complete profit and loss statement for the ginneries, but it is known that in 1998/99 annual
operating costs were 80 percent of annual revenue that year. But costs did not include
depreciation and taxes. The exact profit is therefore difficult to assess but it is not likely to have
been large. Data received on costs and revenues for the previous year, when throughput of seed
cotton was much larger, show a similar situation. Nevertheless, earlier (audited) partial accounts
suggest that significant profits can be made from the ginneries. While there are some who
maintain that the close institutional connection between the production and processing of cotton
needs to be kept intact through the continued public sector ownership of the ginneries, there is a
stronger view that ginneries should be moved out of the public sector and offered for sale26 The
joint team recommends that the ginneries be offered for sale at a time (probably in a year or two)
when the longer term demand for ginneries in the Gezira has been clarified.

Workshops
2.40 Features: The SGB workshops have become vital units for the continued operation of the
GS. There are four workshops in the GS. Three provide general support and the fourth
specializes in vehicle repairs. The general workshops undertake a range of activities including
the rehabilitation of locomotives for the Gezira Light Railway, the manufacture of spare parts for
the ginneries (about 40 percent of the spare parts required by the ginneries are produced in the
Gezira workshops), the rehabilitation of many types of engines, the repair of farm equipment
including the rebuilding of crawler tractors, and various types of sheet metal work. In addition
the workshops do contract work for the private sector in the region. It was not possible to obtain
any financial information on the workshops but it is likely that, given the difficult financial
position of many of its clients within the GS, the workshop would be fortunate to break even.
2.41 Constraints: Unfortunately the workshop buildings and machinery are old. Much of the
machinery is at least 40 years old and working conditions are difficult to say the least. Despite
their age these workshops operate quite effectively and are staffed by dedicated staff although
many who become qualified leave for better paying jobs 27 The extent to which these workshops
are required in future will depend on the type of institutional change that takes place in the
Gezira. Nevertheless, regardless of the institutional change, they are a substantial capital and
human asset, despite the age of the machinery and buildings. This is an attractive operating unit,
although it needs rehabilitation. It would be a strong candidate for sale to the private sector but,
depending on the future role of the SGB, it may be a valuable asset for sustaining its services on a
charge-back system. It is recommended that the future status of the SGB workshops be examined
in an independent study.

Telecommunications
2.42 Features: The telephone system in the Gezira is vital for the exchange of many types of
information within the Scheme on matters such as water levels in canals to accounting and
financial information. There are some 2,100 telephones on the system of which 1,184 are radio
telephones. The current network was financed under the Gezira Rehabilitation Project at a cost
then of $29 million. The system is operated by a total staff of 52 of whom 13 are engineers.

GeziraRehabilitation
Project(1983);seeImprovementof the Efficiencyat Ginneriesand Handlingof Seed
Cotton and Lint: preparation of Guidelines and Specificationsfor the Establishmentof an Industry
ManagementInformation,Accounting,Inventory and Materials Handling System, 1990. Prepared by
AgricultureAustraliaLtd.
26Note, for example,the recommendationsof the PresidentialCommitteeon irrigationschemesin 1998.
27 The Gezira RehabilitationProject had allocated $21.6 millionto the rehabilitationof workshopsand
their machinerybut virtuallynothingwas disbursedbeforethe projectwas closed.

15
2.43 Constraints and Actions: The telecommunications equipment installed in 1984 came with
a commitment from the Japanese supplier that spare parts would be available for a period of 15
years. During this period some spare parts were purchased but the shortage of foreign currency
was a major impediment. With the passing of the time limit of the availability of spare parts the
unit is even more vulnerable to spare parts not being available. In general this unrithas made a
profit from its activities since it has also sold its services for private communications in the area.
For example it obtains LS7 million per month from the national carrier SUDATEL by renting
equipment. It is recommended that in the near future the Gezira Telecommunications Center
becomes integrated into the national telecommunications grid.

CONCLUSIONS
2.44 This chapter has covered many issues, but a recurring theme has been that while the basic
infrastructure of the Gezira is sound in terms of its design, it has become inefficient because of
serious deterioration resulting from poor management and inadequate financing. Subject to
decisions on institutional change as the basis for improved management, additional finance will
be needed to bring the "public" infrastructure to a minimum acceptable standard. The
justification for expenditures should emerge from a careful analysis of the benefits and costs of
rehabilitation. At the same time some of the infrastructure would be more appropriately managed
by the private sector. In this respect many of the recommendations made in this chapter are the
same as those made earlier by the Presidential Committee on irrigation schemes.

16
 3. AGRICULTURAL TECHNOLOGY2 8
3.1 Technology development is fundamental to growth and efficiency in agriculture. The main
purpose of this chapter is to briefly assess the available technology for crop management and
production in the Gezira. It examines differences between yields achieved under research
conditions and in farmers' fields compared with the genetic potential yield levels for each of the
main crops. The chapter also includes an assessment of the status of institutions responsible for
research and the extension of technology, and integrated pest management.

MAJOR ISSUES

Agricultural Research 29
3.2 The Gezira Scheme is fortunate to have one of Sudan oldest and largest agricultural
research stations located near its headquarters. The Gezira Research Station (GRS) at Wad
Medani was established in 1918 to serve the Scheme and subsequently became part of the
Agricultural Research Corporation (ARC). It has a well-trained, experienced and competent staff
of some 246 research scientists of whom 99 have PhDs. There are some 70 researchers in the
GRS, most of whom work on issues related to the Gezira Scheme. The GRS staff have developed
production technologies suitable for environmental conditions in the Scheme. The greatest
impact of the GRS has been in areas such as germplasm improvement (i.e. the development of
new cultivars for the major crops), breeder and foundation seed (see Box 3.1), crop protection,
and the introduction of groundnuts, wheat, citrus
Box 3.1: SeedMaintenance,Propagationand Certification

Cotton:Thehighqualityof Sudanese
cottonin earlieryearswasto a largeextenttheresutof highquality
seed. Maintenance,propagationandcertificationremainedthe joint responsibilityof the SGB and the ARC
since the inceptionof the scheme. Varietymaintenancewas the responsibilityof ALC; seed certification
was the responsibilityof SGB. Propagationwas divided amongthe two institutions. ARC providedthe
breeder and foundation seed, but the cost of producing it was the responsibilityof the SGB. The
productionof registeredseed and certificationwerethe responsibilityof SGB.
For the last threeseasons(1997/98to 99/00)te SGB has failedto providethe ARC with funds to meetthe
cost of the technicalstaff supervisionand field transportationfor the identificationof foundation seed.
Field visits were consequentlyreducedand roguing(cleaningand removingoff types)was reduced. This
resultedin seriousvariety mixing in the cofton fields,which progressivelylowered the grades, the prices
and marketreputation.
Organizationalchanges in the Agricultural Administrationin the SOB have resulted in the Seed
PropagationDepartmentworking on a commercialbasis. The SGB can obviously not certify its own
production. A separatecertificationauthorityis under considerationby the NationalProductionCommittee
(formerlythe CottonVarietiesCommiftee).
Other Crops: For sorghum, wheat and groundnutsthe ARC periodicallyprovides the SGB (and other
irigation schemes)with breederseed. No furthertechnicalsupportis provided.
Source.AhmedSalihFadialla,AgriculturalResearchCorporation

28 Someof the materialin this chapter is based on informationprovideddirectlyto the mission. The report
of an FAO ReconnaissanceMission(17 November,1999)whichprecededthe Bank mission and focused,
inter alia, on technicalissuesin agriculturewas also a very usefulsourceof informationfor the mission.
This sectionis based on a paper preparedfor a workshopheld duringthe missionin Sudan in November
1999by Dr. OsmanA. A. Ageeb,formerDirectorGeneralof the AgriculturalResearchCorporation.

17
trees and some vegetables. For each of the main crop varieties grown in the GS appropriate input
packages have been developed that could bring the yields for these varieties in line with yields in
well-managed comparable irrigation systems in other parts of the world.

3.3 Technological options are at present not a constraint to the efficient production of crops in
the GS because of the substantial investment into research at ARC in the past. Nevertheless, the
continued sustainable development of irrigated agriculture is only possible if based on continued
strong research programs that develop higher levels of productivity and efficient diversified
production technologies. Such work will, however, need assured long term funding to be
successful. It is recommended that the funding of ARC be increased to ensure that its research
team has the resources to maintain its vital work ensuring that technical progress in Sudanese
agriculture continues. The joint team considers that sustained and substantial support for ARC is
a high national priority. Economic factors which influence yield levels will be discussed in
Chapter 4.

Extension of Research Results

3.4 With support from externally funded projects, research results were quickly tested in
demonstration plots and they showed that yields in the Gezira could be raised considerably. With
the help of partners such as Global 2000 and FAO information was disseminated relatively
quickly through field days, radio and television, and field visits. In the process close relationships
were established between the extension service and farmers of the Gezira. In 1996 the S.G.B
changed the extension structure as part of a Scheme-wide effort to reduce costs and increase
efficiency. The position of agricultural extension officer in each of the 18 group offices was
abolished and the responsibility for extension was transferred to about 300 field inspectors with
the objective of increasing the ratio of extension officers from 1:7,000 to 1:400. But while the
ratio of extension officers improved it may have weakened the support received by farmers since
the field inspectors also had administrative and management responsibilities. These duties not
only take up their time but because of their regulatory content can result in conflict with farmers
and prevent establishing a constructive advisory relationship with them. It appears that the
extension system was weakened, although the introduction of farmers' field schools has
introduced more vigor into the system (see Box 3.2). To date there has been no assessment of the
effectiveness of farmers' field schools.
3.5 The central units of the Extension Department at GS headquarters at Barakat were
maintained albeit at a reduced staff level. They attended to functions such as training of field
inspectors, supervision, preparing guidelines, monitoring and evaluation, and providing technical
back stopping. These units, however, worked under considerable difficulties since funds were
severely limited for travelling, printing of training and information materials, and for the
maintenance and replacement of printing machines, photocopiers and audiovisual equipment. It
is widely acknowledged that the -quality and coverage of the extension service has recently
deteriorated to an unsatisfactory level and is in urgent need of improvement. It isrecommended
that fixing this shortcoming be given a high priority by the SGB.

18
Box 3.2: Farmers Field Schools (FFS)

In 1996,the FFS were adoptedas the main strategyfor trainingof farmersin all aspectsof crop protection
and productionfor all crops with the objectiveof affectinga qualitativechange in behavtor , skills and
attitudesof farmers.
A plan of work was issued with the followingdirective:
* The ExtensionDepartnent will performits centralrole of supervision,guidance,monitoring,technical
backstopping,trainingand evaluationof FFS.
* All activitiesof FFSat group level will be handledby fieldinspectors.
* Moreattentionshouldbe given to practicaltrainingandparticipatoryapproach.
* Field inspectorsshould be rained in the methodologyof FES and technical aspec necessaryfor
runningFFS.
* Establish one FFS immediatelyin 113 blocks and to increase the ooverage year after year and
eventuallycover all Gezira farmersin fouryears.
* Formulationof steering committee at Barakat headquarters composed of members from ARC,
Ministriesof Inrigation,Health, Universityof Gezira, representativefrom tenantand trade union, and
ooncerneddepartmentsin the AgriculturalAdministrationof the SGB to plan and evauate the FFS
program.
v Formulationof local committeesat group level from top administratorsand specialistat the group
level.
* The responsibilityfor administrationand supervisionof the FFSat group levelwas given to the deputy
group inspectorwho shouldreportto the Directorof Extension.

In the first year 1996/1997113 FES were establishedand in the second year 1997/198 the FFS were
increasedto 249 FES,and in the third year 1998/1999the numberamountedto about40 MF.
All fieldinspectorshave beentrained on relevantsubjectmatters,and a range of booets have been made
availableto themn whichcoverthe wholeof FFScurriculum.Both trAiningand booklets,were ajoint effort
betweenIPM program,ARC and extensiondepartnent.

Source:Mohamed
SidAhmed(Manager.
Agricultural
Extension
Department.
5GB)

Crop Protection and Integrated Pest Management 30

3.6 Cotton is attacked by four main insect pests. Their incidence and the severity of the
damage they cause vary by years with environmental conditions. In earlier years repeated
(typically eleven) spraying of insecticides by air was the predominant approach to insect control
but this led to considerable pollution and diminished the role of natural enemies. Integrated Pest
Management (IPM) reduced the required average number of sprayings from six per season to
four. This has had considerable implications for the cost of cotton production since the cost of
insecticides is the largest component of cotton production costs. IPM was later extended to
vegetable production. Box 3.3 contains a brief review of the genesis and achievements of the
IPM program.

30 This section draws from contributionsmade to the mission by Elamin M. Elamin (Director, Crop
Protection Research Centre (ARC), Ahmed Hassan Mohamed (Director, IPM Research and Training
Center,ARC),AsimAli Abdelrahman(ARC),andAbbas HagoElnazar (CropProtectionManager,SGB)

19
Box 3.3: Achievements of Integrated Pest Management (IPM)

In 1979an integratedpestmanagement (IPM)projectwasinitiatedwiththesupport of theGovernment of

theNetherlands (as wellasotherdonorssuchas the WorldBan) andexecutedby theARCandFAQ. The
project includedfour phases; the firt three (1979-93)
were devotedto cotto and the,fourthphas (1993-
96)wasfoused ma onvegets.
The mainachievements of the first threephasesof the IPMresearchprogramwere the releaseof the
recommendations in 1993whichledto thereductionof pesticideusage. Cottonsprayingwasreducedfrom
sixto fourperseason. Thereductionin thenumberof sprayssavedoottonfarmersabout$10million per
sean for the chemicalsand applicationcosts. The reduction in the pesticide applicationalso had a
positiveimpacton the environment,andparticularlyon the possibilities
of promotingthe roleof natural
predatorsfortheinsectswhichattackedcotton.
A notable achievementin phase four was the introductionof the 1PMFarmers' Field Schools and the
establishmentof the IPMResearchandTrainingCenterin the GeziralesearchStation. TheCenter,with
the assistanceof ARCscientists,designedcumricula
fortheiFS, trainedtheFf trainers,preparedtraining
materialsandmoiEtoretheprogressof the IPMtaining at theFPS. As mentionedin Box4.1,FFSnow
alsocoverproucn, human health, andtheenvironment.
After the terminationof the Netherlds-supportedIPM program,a FAO TechnicalCooperation
Programme(TCP)supporteda continuationof workbut it wasc :This has
in August1098.
reductionin theoutputof theIPMResaha
resultedin a substantial Tning
nd Center.
MohamedandAsimAli Abdeirahman
Sour,e: AhmedHa&san (ARC)

3.7 The assessmentof pest infestationin the field is conductedby well-trained SGB technical
staff. They are supervisedby assistantentomologistsunder the supervisionof an entomologist
who evaluates the pest situation and is the only person making decisionson spraying and the
selectionof the pesticideto be used. Spraying is supervisedby crop protectionstaff assisted by
the field inspectorsand their staff. It is selective according to insect infestation. Loading of
insecticideson aircraft is carefullymonitored,spray deliverysystems on aircraftare calibratedto
ensure that they deliver the right quantities, and chemicals are carefully stored to eliminate
pollution.
Actual Yields Fall Far Short of Technical Possibilities
3.8 Table 3.1 shows that, in spite of the availabilityof technically proven and economically
viable improved productionand pest control packages,as well as the good linkages that exist
between the GRS/ARC, the SGB and tenants, average farm yields for all crops other than
groundnutsand onions are 30 to 40 percent of achievable levels based on field research. The
federal Ministry of Agriculture and Forests has acted to improve average productivity by
involvingsenior ARC leaders in the Ministryand senior ARC research staff in joint committees
along with Gezira field staff and farmers to regularly evaluate the constraints to increased
productivity. The committeespay frequentvisits to farmers' fields during the growingseasonto
identify productionproblems and give on the spot advice to farmers. They also report to the
Ministryon progress. These committeesand the farmers'field schoolshave createdan awareness
of productionproblems in the GS and have highlightedthe demand for improvedtechnology.
But, regrettably,these joint efforts have become less frequent because of a shortageof funds to
financetheir activities.

20
 Table 3.1: Comparison of Potential, Research and Farmer Yields for Major Crops
Type of Crop Yields
Potential Yields Research Yields T
Farmer Yields
Cotton (kantar seed cotton per feddan)
Extra Long (Barakat) 16 12 4.5
Long (Shambat) 18 14 5.0
Medium (Acala) 22 18 5.5
(tons per feddan)
Wheat 2.5 2.0 0.6

Sorghum 2.5 3.0 2.3 2.7 0.8

(open) (hybrid) (open) (hybrid)
Groundnuts 2.8 2.0 1.2

Onions 16 12 8

Source:AgriculturalResearchCorporation
Note:I Kantar= 315lbsseedcotton;I feddan= 1.038acres=0.42hectares
Potentialyield= Thegeneticyieldpotentialunderoptimalgrowingconditions
Researchyield= Yieldundera standardsetof practices
andresearchmanagement
Farmeryield= Theaverageyieldon farmers'/tenants'fields

Evidence that Higher Yields can be Achieved

3.9 Frequent visits by research staff to farmers' fields have also assisted them to obtain
feedback about the performance and suitability of their recommendations in the field. Research
staff therefore have a basis for focusing on specific problems and the GRS research program has
become more "demand-driven". GRS staff have gained considerable experience in carrying out
participatory research in farmers' fields. An example of this work is described in Box 3.4. The
results show that farmers who adopted recommended technology and crop management practices
can regularly achieve wheat yields approaching research levels, that were double the average
yield for the block, and were 35 and 70 percent higher than farmers in the same "number." '
Unfortunately this research work has also ceased due to lack of financial support. Nevertheless,
with adequate advice, tenants could take advantage of improved technologies that are already
available for many crops suitable to the Gezira environment. While constraints on rotations have
been considerably relaxed, the compulsion to grow cotton, at times under sub optimum
conditions, means that tenants remain imprisoned in a cycle of weak incentives and low
productivity. The efficient solution is for tenants (in groups) to take responsibility for their own
choice of crop rotations in accordance with their own evaluation of the soils and micro climate on
their land.3 2 The only limitation to such choices should be water management and technical
constraints.

31 The GS is divided into 18 large units called "groups" which range in size from 60,000 to 190,000
feddans.Each group is dividedinto smallerunits called "blocks"that range from 4 to 10 per group.Blocks
are dividedinto "numbers"which are 90 feddanseach.The numbersare dividedinto "hawashas"which are
usuallyparts of farms.A tenant may have two or more hawashasin differentnumbersmakingup the total
area of his/herfarm.
32 Note that FAO fundingfor the completionof a GIS-basedagro-ecologicalzonationstudy for the Gezira
has been approvedfor implementation. This work, when completed,will be of considerablevalue to
researchersand to tenantgroupsas the basisfor choosingcroprotations.

21
Box 3.4: Some results from Pilot Production Plots in the Gezira Scheme

Researchstafffromthe ezira ResearchnStation (G inecooprating farmers in the

Wad ea vigenone nmbr(an area of 90h es)lceinD eesh block providing
advice he tono gated we All farswithi enmb and the blotk receive the
stard inps p the Gei Bd sc as cultivton of te l d, fertilizer and water
sulies. The c fames usedtm ge aces ey the ARC. over the
years 196/87 to 198 the wheayyeld acieved by faewere measured and compared with the
yields achievedby therfers w were p cig wainthe numbrand the block of which the
numbeiis a part. Te rul wereas follows:

Item 8687 87887 88/89 Average

Sowingdate 9-l i Nov, 86. 31 Oct, 87 14Novy88
Numberof irrigatios 6 7 7

Yields tons grainha (tons gain/feddan)

Ayera yield for cooperaig farmers 3.9(l16) 3.7(1.6) 4.6(1.9) 4.1

Avege yield fbr non-cooperatingfarmers 2.3 (1.0) na 3.4 (1.4) na

Averageyield for block 1.8(0.8) : 17(09.7) 2.0(0.8) 1.8
(0.8)
TheseresultsprovideeNridnetat underthe recommendemngeet practices muchhighr yields can
fbe obtained thmndr thie urent pracicesadopteaby:
fners. Inhdeedte ylds of c6g farers
vw9aclW eiaciyilsee We3. I)-00000: 0t000;000000t
Source. XAR ; smioA.A.Aceeb) 0

Livestock
3.10 In 1986 a detailed review of livestock activities in Gezira found that some 90 percent of
households (tenants and non tenants) in the Gezira Scheme owned some livestock, including
camels, horses, donkeys and poultry. In general rich tenants have large numbers with a
substantial proportion of cattle, while those without land have small numbers of predominantly
small ruminants.3 3 In 1999 the SGB staff estimated that about 40 percent of tenants owned cattle
and small ruminants. Table 3.2 summarizes the estimated distribution of these livestock numbers
in 1998.
Table 3.2: Estimated Number of Cattle and Small Ruminants in the Gezira Scheme 1998
Type of Livestock Numbers
Cattle 247,490
Sheep 590,000
Goats 1,126,380
Source:SudanGeziraBoard
Note: Livestocknumbers in the Gezira vary considerablythroughoutthe year accordingto the availabilityof feed
which is in turn a functionof the croppingcycles. The numbersin the table above are averagenumbersthroughthe
year.
3.11 In the early days of Gezira there was little assistance from the SGB with the introduction of
livestock into farming systems. In the early eighties, however, an Animal Production Unit in the
Agricultural Administration was established with quite broad functions ranging from advice on
fodder crop production to artificial insemination. Research Support is also provided by the

3 SeeGovemment
of Sudan,GeziraRehabilitationProject:LivestockIntegrationStudy,July 1987.

22
Agricultural Research Corporation which has developed viable production packages for livestock
enterprises in the Gezira. On the other hand, funds for further research are severely limited.
Livestock fit easily into the current five course rotation (or any other rotation) since there is a
substantial amount of biomass (mainly crop residues) produced on all farms that can be put to
greater use in animal feeding. The major problem facing livestock producers, however, is the
absence of a reliable winter forage crop and animal parasites 34
3.12 Earnings from livestock are an important supplement to incomes received from irrigated
crops and is indeed a vital supplement to the household income for the average tenant in the
Gezira. While milk production from cows (and to some extent goats) is popular, researchers have
drawn attention to the scope for a greater diversification in the range of livestock production
activities, and greater integration of livestock production into farming rotations. Such integration
would be promoted by giving farmers greater flexibility of crop choice allowing them to move
away from the compulsion to follow a five course rotation and using a larger proportion of their
farm for livestock production. The importance of livestock in the farming system is reflected by
the evidence that tenants who own livestock generate more income and are better able to finance
their crop production than tenants without livestock.
CONCLUSIONS
3.13 This has been a very brief overview of technology issues. It was not intended to be a
detailed treatment of all the issues and obviously important matters such as weed control
technology, future mechanization and alternative crops have not been discussed. Nevertheless the
core conclusions are clear. First, a considerable stock of technology is available for
implementation. Second, agricultural research must be continued intensively and funded on a
sustained basis so as to ensure continued availability of improved technologies.

34 The availability of considerablecrop residues does not, however, ensure adequate feed availability
throughoutthe year. For example,it has beenestimatedin ARC that the total annualdemandfor energyby
animalsunder a five courserotationis about 17 millionmegajoules, comparedwith an annualavailability
of 15 millionmegajoules(OsmanAgeeb,personalcommunication).

23
 4. THE ECONOMICS OF CROP PRODUCTION

4.1 This chapter will show that crops grown in the Gezira Scheme can be profitable for the
typical tenant but because yields of all crops are lower than achievable levels farmers struggle to
make ends meet. As a result casual labor and nearby towns struggle and the SGB loses money
every year. This poor performance has been a chronic problem in the Gezira despite the
Government's decontrol of prices and most markets since 1992 which was intended to stimulate
the agricultural sector.

MAJOR ISSUES
4.2 The analysis below will first outline the farming situation for tenants in the GS. Since
yield is crucial to crop profitability, the chapter will then discuss the reasons for the generally low
crop yields. The profitability of crop production is then assessed for a base case scenario that
assumes average current yield performance by farmers, and two other scenarios using two higher
yield levels. This is followed by an evaluation of the profitability of specific crops in the standard
rotation in the GS from the national point of view.
Structure of Farming in the Gezira Scheme
4.3 Farm Size. Surprisingly it was not possible for the mission to obtain a detailed size
distribution of tenancies in the GS. It is known, however, that although there is some variation,
farms are typically 20 feddans with four feddans for each of the four crops in the standard five-
course rotation with four feddans remaining for fallow.
4.4 Crop Rotation. Although a variety of crops is grown in the GS, cropping patterns must be
consistent with the design of the irrigation system, specifically, with efficient water use. The
present cropping pattern is the result of a rigidly set crop rotation or sequence over a five-year
period. The current "five course" crop rotation sequence in the Gezira has been used since the
1991/92 crop year and is as follows.35

Cttn - Sorghum- Grounlnuts;- Wheat(or oer wint rP llow

4.5 This sequence is used Gezira-wide and, while farmers can make a choice of which summer
and winter crops they grow, they must grow cotton in designated areas in the summer as decided
by the SGB. In technical terms the current rotation is regarded as a major advance on previous
rotations. First, following cotton with sorghum forces farmers to clean their fields quickly of
disease-harboring cotton plants in order to make timely preparations for the planting date for
sorghum. Second, following wheat with cotton (with a fallow year in between) allows cotton to
benefit from the residual phosphorous and nitrogen fertilizers used for the wheat crop.
4.6 Cropping Calendar. Only one crop is grown per year on a given area and the typical
timing of harvesting and planting of each crop is shown in Table 4.1

35 It is understoodfrom discussionsin Sudanin May, 2000 that the standardrotationsis to be changedto

cotton- wheat- sorghum- groundnut- vegetable/fallow.

24
 Table 4.1: Cropping Calendar for Major Crops in the Gezira Scheme
Crop Planting Harvesting
Acala July December/January
Barakat August January-March
Sorghum June/July October/November
Groundnuts May/June October/November
Wheat November March

4.7 In recent years, sorghum has been the main crop in terms of area in the Gezira Scheme
with an average of 35 percent of total area planted, followed by wheat (25-30 percent) but
trending sharply downward, cotton (under 25 percent) and groundnuts (about 20 percent).
Sorghum has occupied the largest area because of its role as both a fodder and a subsistence grain
crop. However, cotton is the dominant crop in economic terms because of high costs and,
sometimes, high benefits for the SGB from its production as well as its importance to farmers for
cash income, and to the economy for the foreign exchange it generates (see Annex 4, Table 16).
4.8 Gezira Board Support for Crop Production. While the SGB requires farmers to grow
cotton because of its importance to the national economy and of course to the SGB itself, SGB
provides considerable financial support to tenants for the production of cotton36 This support has
been provided because the Scheme is centrally managed and farmers have had few choices in
respect to plowing, aerial spraying and other major production decisions in respect to cotton
production. The dependence of tenants on the SGB is reinforced by the fact that there are no
formal credit institutions that tenants can use to finance their irrigation farm operations
independently. In summary, the SGB provides the following services at present:

* Plows and furrows land designated for cotton production;

* Applies pre-emergence herbicides when necessary;
* Provides seed and fertilizer for planting;
* Advice on cultural practices and crop management;
Arranges with the Ministry of Irrigation and Water Resources for irrigation water supplies
A
and for its distribution throughout the scheme;
- Operation and maintenance of irrigation canals (minors and below);
* Assesses the need for aerial spraying against insects and then arranges for and supervises;
the aerial spraying at the appropriate time;
* Provides cash advances to tenants for harvesting costs;
* Undertakes the ginning of cotton in the Gezira Board ginneries;
* Arranges with the Sudan Cotton Company for the transport of lint cotton from the ginneries
to Port Sudan or local textile mills and for the marketing of cotton.
4.9 The costs associated with all these services (plus the SGB administrative charge) are
deducted from the tenant's individual account after the cotton is sold and the proceeds net of
marketing costs and export tax are received from the Sudan Cotton Company. Table 21 in Annex
4 provides an example of a typical tenant account.
4.10 In the past similar support was provided by the SGB for the production of other crops, but
this has been discontinued. Tenants producing other crops may, however, contract independently
with the SGB for plowing, fertilizer supplies and other services but this is now of minor

36 Supportto tenantsin financinginputswas providedby irrigationauthoritiesas far back as the first large
pump irrigationschemeon the Nile at Zeidab establishedin 1908. See GalalMohamedYousif,The Gezira
Scheme:The Greateston Earth, 1997.

25
importance. Of course tenants producing these other crops get irrigation water deliveries and pay
for the maintenance executed by the MOIWR and the SGB. As discussed in Chapter 3, tenants
benefit from the work of the ARC and to some extent, from the SGB extension service.
Factors that Depress Yields of All Crops in the Gezira Scheme
4.11 Lack of funding for labor for crop management and harvesting. Farmers rely on hired
labor to various degrees for their crops. Because of financing problems, farmers must also
economize on this out-of-pocket expense. Hired labor used for supplementary land preparation,
thinning, weeding and even harvesting must be curtailed, which depresses yields even more. In
the case of cotton, farmers are supposed to receive cash advances from the SGB to cover the costs
of labor hired for cotton planting, weeding and harvesting. The financial problems of the SGB
have limited these cash advances.
4.12 No Formal Financial Intermediation. It is well known in Gezira that tenants with their
own adequate financial resources for farming have better results than those who do not.37 The
shortage of funds for farm operations on the tenant's side can be attributed in large part to the near
total lack of formal financial intermediation in the GS which is a problem affecting Sudan
nationally. When farmers do have years of surplus, there is no financial institution which farmers
trust in which to deposit cash surplus. Therefore, the irrigation farmer, like the less privileged
rainfed farmer, continues to live from year to year without the possibility of building savings to
provide a cushion when a bad year strikes. Consequently there has been almost no wealth
accumulation in the Gezira, despite its longevity and government support to tenants"8 The SGB-
administered "individual account" system has to a large extent substituted for a formal credit
system. The availability of the individual account system, together with no interest payments on
outstanding debt past one year and debt forgiveness for tenants twice in the last 20 years, has no
doubt also dampened the emergence of private credit institutions. It is possible that the recent
reduced SGB involvement in the financing of non-cotton crops will stimulate the emergence of
other sources of credit.
4.13 Lack of access to adequate finance on the SGB side is because of previous poor
management perfonnance that has led to a large debt burden and year to year cash flow
difficulties. The current situation is that the SGB cannot finance inputs and labor cash advances
for tenants in a sufficient or timely manner. It should be acknowledged that the current SGB
management has gone to extraordinary lengths to obtain funds to finance its obligations. This
will be discussed in more detail in Chapter 6.
4.14 Shortage of Irrigation Water. For all crops, the number of actual irrigations used by
farmers is less than recommended (see Table 4.2). The lower number of irrigations is the result
of the declining efficiency in water delivery infrastructure discussed already in Chapter 2. Less
frequent irrigation reduces yields.
Table 4.2 Actual and Recommended Number of Irrigations by Crop
Crop Actual Recommended
Cotton 10-12 16
Wheat 6 8
Groundnuts 5 8
Sorghum 5 8
Source: Socio-Economic
Unit- SudanGeziraBoard, 1999

3 OsmanAgeeb(formerDirectorGeneral,ARC),personalcommunication
38 SeeTony BamettandAbbas Abdelkarim,Sudan: The Gezira Scheme and Agricultural Transition, Frank
Cass, 1991 for a discussion of the absence of capitalism in the Gezira Scheme.

26
4.15 Another important effect on yields relating to water supply is the "head to tail effect." The
head to tail effect refers to the gradually diminishing supply of water as it travels to plots that are
further and further away from the source. These plots are said to be at the tail of the irrigation
flow. Farmers at tail ends have lower yields and, therefore, lower incomes. As Table 4.3 below
shows, the head to tail problem is acute in the GS resulting in about 50 percent reduction in yield
for cotton and typically about 30 percent loss for other crops. Another feature of this table is the
substantial difference between the yields in the two systems. The differences may have been a
function of the year in which the study was made, but it does suggest the possibility of lower
incomes in Managil although the areas of tenancies there are smaller.
Table 4.3: Yield Effects on Crops Because of Distance from Water Source

Crop Gezira Main Managil

Head Tail Head Tail

Cotton ( kantars seed cotton/feddan) 5.14 2.99 4.48 2.20
Wheat (tons/feddan) 0.57 0.39 0.41 0.30
Groundnut (tons/feddan) 0.40 0.31 0.45 0.27
Sorghum (tons/feddan) 0.51 0.35 0.47 0.39
Source: "Socio-Economic impactsof IrrigationWaterShortagesat the Tailends of the GeziraSchemeCanalization
System, " The Sudan Gezira Board, Planning and Socio-Economic Research, (supported by a Ford
Foundation technical assistance grant), November 1995.

4.16 Despite the assistance that tenants receive the typical Gezira farmer operates within a
vicious circle in his production and marketing processes. Farmers' lack of financial resources to
finance even one season's production has made every facet of the production process from land
preparation to final sale of the crop less efficient. Box 4.1 shows the priority problems cited by
farmers in the field interviews during the main mission for this work in November 1999.
Box 4.1: Farmers' Problems - Type and Frequency

of the joint team visitedfarmersin

Duringthe preparationof this reportmemnbers
the Gezirawho listedthe followingproblemsfacingthem. TheresultsfoUow.
Total Percent

Insufficient
-labor
cash advancefromSGB 11 20.0
Shortage/timingof irrigationwater 9 16.4
Inadequate/latelandpreparation 9 16.4
Delayedpaymentsfor cottoncrops 4 7.3
Inadequatepestcontrol 4 7.3
Cleaningof Abu Ishreen 4 7.3
Inadequatehealthproblems- malaria,bilharzia 3 5.5
Waterchargestoo high . 2 3.6
Cost of sprayingtoo high 2 3.6
Low returns 2 3.6
SGBshouldmarketproductionand protectprices 2 3.6
improvedvarietiesnot available 1 1.8
Siltingproblemsin canals 1 1.8
Hightaxes I 1.8

Total 55 1O0.0

27
4.17 Land preparation. As the SGB withdraws increasingly from land preparation farmers
must pay cash for the service provided by the private sector, but often arranged by the SGB.
Because of inadequate financial resources farmers understandably try to save on such costs (or
contractors cut corners). Land preparation is often not carried out with sufficient care to provide
a good seed bed and, therefore, a good yield. For example, unless the seed bed for wheat is very
fine, yields will be low and production unprofitable.
4.18 Inadequate application of fertilizers and pesticides. Inputs procured by the SGB often
arrive too late for planting, or not at all. In addition, farmers who are supplied fertilizers for
cotton production have pressing household needs and they sometimes decide to sell fertilizers
supplied by the SGB to obtain cash, rather than apply the recommended quantities to their fields.
The inadequate application of fertilizers further depresses yields. To their credit SGB staff and
management have gone to extraordinary lengths to obtain funds to finance SGB obligations to
tenants.
Crop-Specific Factors that Reduce Yields
4.19 Cotton (Extra Long Staple-Barakat and Medium Staple-Acala). All of the above
issues have negatively affected cotton yields. Because cotton is labor intensive requiring 65-70
man days per feddan to produce, the lack of financing to hire labor is especially damaging to
yields. Since many farmers have very low liquidity, they once again are forced to scrimp,
because labor for crop establishment and maintenance is an out of pocket expense (unlike other
cotton input costs that are provided on credit by the SGB). The harvesting or picking stage is the
most labor-intensive phase of cotton production. In recent years, farmers report that the SGB
advance pays only a small portion of the labor costs for harvesting, with farmers financing the
rest. As a result subsequent cotton planting is often late which reduces yields. This occurred in
the 1999/2000 season with devastating effects on yield and incomes.
4.20 A distinguishing feature of cotton production, which has demoralized farmers recently, is
the delay of many months in payments for their cotton (see Box 4.1 above). This is basically an
issue of slow disbursement of the proceeds from Gezira cotton sales by the SGB. On the
production side, the delayed payment makes farmers less willing to use the full complement of
inputs, particularly those that require out of pocket labor expenses. As a result, yields are
depressed as farmers economize at the expense of important cultural practices.
4.21 Sorghum (grain). Sorghum also suffers from the problems faced by other crops described
above resulting in yields that are only half of the potential. Fitting sorghum into the rotation has
also been problematic because of the termite problem (see groundnuts below).
4.22 Wheat. Wheat was not a traditional crop in the GS but the rapid rise in the demand for
wheat (stimulated to a large extent by subsidized bread prices in the past) led to an expansion of
production promoted by Government "crash programs" in irrigation systems such as the Gezira in
the mid- 1980s as a food security crop. In the early 1990s, wheat became a mandatory part of the
four crop-one fallow rotation. Wheat production in the Gezira, however, has had many
difficulties. Yields declined in the late 1990s, because of inferior land preparation, and a loss of
farmer confidence in being able to grow wheat profitably. Even in its best year, average yields
were only a little above half of their reasonable potential. On the other hand Chapter 3 shows that
under the right conditions and with recommended crop management wheat yields in tenant's
fields can approach research yields. With liberalization of the market for all grains, imported
wheat out-competed domestic wheat, and wheat farmers incurred losses. In crop year 1998/99,
wheat cultivation was no longer mandatory. Farmers are now free to grow other winter crops
such as sunflower and sesame, or vegetables in place of wheat. The Government's wheat policy
in the early nineties has, however, left a serious legacy of heavy debts on tenants and the Scheme.

28
It was yet another example of the failure of Government control over farmers' production
decisions.
4.23 Groundnuts (hand selected, oil, and cake). Farmers in the Gezira reported widespread
problems with termites because of the current standard rotation. Termites develop in the sorghum
stalks left from the previous year and seriously affect the groundnut crop which follows.
Sorghum stalks are left in the field longer because of their role as fodder. This problem remains
unsolved.
4.24 Vegetables. Vegetables may be grown in the crop rotation, either in conjunction with
groundnuts or in place of wheat or other winter crop. Vegetables are for domestic consumption.
The main vegetables cultivated are onions and tomatoes. Although statistics are not as detailed as
for the major crops, it is estimated that onions and tomatoes account for about 60 percent of the
total area under vegetable cultivation.
Marketing,Production,Processingand PaymentIssues
4.25 Cotton: The Gezira tenant farmer does not receive payment for seed cotton delivered to
the Gezira ginneries until:
(a) the seed cotton has been ginned, baled, transported, stored, and shipped.
(b) the proceeds have been transferred from the SCC to the SGB after port charges, commissions,
export taxes (no longer levied) and other trading cost charges; and SCC Commission and
(c) the SGB deducts the costs of inputs (for all crops) and services it has provided to tenants
during the production process, pays state and local taxes and zakat, and also paid other
operational expenses such as SGB salaries and utility bills. Even after this process tenants
are usually not paid in full; final payments often follow months later.
4.26 Farmers who make a profit after deductions for inputs and services, often do not receive
their payment until 4-12 months after delivery of their crop for ginning. For example, at the time
of the field interviews for this report (November 1999), many farmers still had not received
payment for cotton that was delivered to ginneries in November and December of 1998. Apart
from the delayed payments, the actual prices received by tenants are also difficult to explain. For
example, it has been possible to reconstruct the average price received by tenants for average
quality Acala cotton in the 1998/99 season using information from the SGB. The typical price
received by tenants from the SGB for average quality Acala seed cotton in 1998/99 was $33.9 per
kantar of lint (see Table 21, Annex 4 which reproduces a typical account for a tenant who
delivered cotton for processing cotton in 1998/99). On the basis of information on export receipts
for cotton and marketing costs incurred by the Sudan Cotton Company (Table 20 in Annex 4) the
price received by tenants is 77 percent of the fob price of lint at Port Sudan.
4.27 On the other hand Table 4.4 shows that, on the basis of the world price for Acala cotton
(fob Port Sudan), and deductions for marketing costs and export taxes paid by the SCC together
with the value of cotton seed, the SGB should be in a position to pay $40.43 per kantar of lint to
producers. This estimate compares with the actual payments to producers of $33.90 per kantar of
lint mentioned in the previous paragraph. Both these prices are "pre State tax returns". This
difference indicates a considerable "implicit tax" on producers that is not explained by the
information on the costs of marketing and ginning of cotton and the value of seed cotton.
Discussions with SGB staff failed to uncover an official explanation for this difference.
4.28 The preceding analysis raises many questions related to the efficiency of the institutional
arrangements for cotton marketing and the payments to producers. These matters will be
discussed in Chapter 6 where all the institutional issues will be brought together.

29
 Table 4.4: Summary of Price Formation for Acala Cotton for the Gezira Tenant (1998/99)
Item Amount
($/kantar lint)
World market price for Acala (fob Port Sudan) \a 44.0
Less: Marketing costs incurred by Sudan Cotton Company \b 4.84
Net price from Sudan Cotton Company to the Sudan Gezira Board \c 39.16
Less: Cost of ginning undertaken by the Sudan Gezira Board ginneries \d 6.60
Less: Cost of transport of lint from Gezira to Port Sudan \e 1.13
Plus: Value of seed sold by the Sudan Gezira Board \f 9.11
Net possible price to tenant (before deduction of SGB costs and state taxes) 40.43
Price received from SGB (before deduction of SGB costs and state taxes) \g 33.90
\a Basedon the mission'sanalysisof internationalpricesfor cotton(seeAnnex4, Table22 )
\b Basedon 11 percentof the fob price. The basisof this assumptionis the cost of marketingBarakatcottoniobtained
from the SudanCottonCompany(SeeAnnex4, Table20)
\c Price receivedby SudanGeziraBoardfor distributionto tenants.
NdSeeAnnex 4, Table12. Thiscost representsthe cost of ginninga kantarof seedcotton(315 Ibs)which thenyieldsa
kantarof lint (100Ibs). Thiscost was chargedto tenantsat a rate LS per kantarof seedcotton.
\e See Annex4, Table22
\f Equivalentto the yieldof seedfrom a kantarof cotton
\g Thisis the averageimplicitpricereceivedby tenants for Acala from the SGB used to calculatetheir revenuefrom
cottonproduction.(SeeAnnex4, Table21).
4.29 Non-cotton crops. All sales of crops such as groundnuts, wheat and sorghum are sold on
the private market. By all accounts this is quite a competitive market. Medium sized traders sell
to the retail traders in the market and usually transport the produce from the farm. Mission field
interviews revealed that these traders' have fairly narrow margins but this is compensated for by
the volume of their business. Margins for retail traders are usually about ten percent of the sales
price and sometimes even less. Retail traders improve quality by sorting and cleaning the grain
which is understood to result in a three percent loss. In relatively rare cases does the SGB choose
to purchase crops on its own account. It then often uses these crops for further trading in
exchange for goods and services it requires.
Processing of Cotton and Grain Crops
4.30 Large mills in the immediate vicinity of the GS, whether for cotton lint, cotton seed,
groundnuts or wheat, operate well below capacity or are entirely idle. Gezira simply does not
generate enough production now to keep the factories operating at anywhere near their break even
points. The Wad Medani Textile (WMT) mill has been using rainfed cotton for several years
because it was more economical than Gezira cotton, even though the plant is located in the Gezira
region. It is understood that the same plant plans to shift to polyester fibre exclusively within the
next few years.
4.31 Wheat marketing has had a bleaker experience. The Gezira Flour Mill (GFM) had been
idle for 5 months at the time of the mission. It was reported that the GFM does not mill wheat
from the Gezira Scheme; rather it mills imported wheat. Gezira wheat is not favorable for bread
baking. Because there is no demand for Gezira wheat from bakeries, the GFM does not mill it.
Imported wheat is also less expensive, at LS480,000 per ton, compared with LS620,000 ton for
Gezira wheat in 1999. Much of the Gezira wheat obtained by the GFM is re-sold as grain to
farmers in the north for seed, and even to the seed propagation department at the SGB. Even
wheat-based animal feed is imported. Staff at the mill felt that reinstituting trade protection from
imported wheat would lead to increased demand for Gezira wheat. This reports argues against
such a policy

30
4.32 Processing of sorghum and groundnuts is done by small and large mills. Farmers provide
the raw product with mills having to improve on the decortication for groundnuts by the farmers.
Small mills are located near the market where consumers to have their sorghum / or wheat milled
at LS4,500 per sack.
4.33 The Gezira Oil Mill (GOM) is designed to produce both cotton seed oil, for the domestic
market, and groundnut oil, for the export market. The production manager, an ex-staff member
of the SGB, said that the mill had not produced groundnut oil for several years. The mill remains
open by producing soap. The manager complained also of high taxes on production which add
substantially to the final cost of output. Groundnut cake costs LS17,000 per sack before taxes
and LS23,000 after (35 percent increase), while groundnut oil costs LS23,000 per 8.1 kilo tin
before taxes, and LS29,000 after (26 percent increase).
Crop Production Costs
4.34 Table 4.5 lists all major production costs per feddan for the major crops in the Gezira
rotation. Cotton is by far the most expensive crop to grow, owing mainly to the much higher
pesticide and herbicide inputs, and somewhat higher labor cost. Water charges and
administrative charges are also higher for cotton, but the difference represents only about I
percent of total costs. Because crop year 1998/99 was an unusually poor year for production,
costs from the previous crop year, 1997/98, are used for the analysis.
4.35 These costs assume a constant yield level. At higher yields, costs would be slightly higher
for sacks, harvest labor, and transport, but not enough to materially affect net revenue results.
Net Revenue for Different Crops
4.36 Table 4.6 shows the three yield assumptions converted to standard measures (tons per
feddan) and the net returns by crop per feddan in both Sudanese pounds and dollars. The "Base
Case" is based on the most recent seven years yield data (with high and low yield years taken
out). The "highest achieved" is based on the best production years reported by farmers during
field interviews. The "research yield" is based on ARC farm trial data. Cost figures are from
Table 4.4 and are based on the 1997/98 crop year. Hence, the exchange rate applicable to this
analysis for conversion to US dollars is SL2,000 per US$1.0.
4.37 Although cotton is the most expensive crop to grow, it is also the most profitable on a unit
area basis. Barakat is more profitable than Acala, which confirmed the perception of farmers
interviewed in the field. Under typical yields, sorghum is the next most profitable after Barakat,
followed by groundnuts and wheat. If the better case yields are achieved, then wheat is the next
most profitable after cotton, with sorghum and groundnuts following at about the same profit
level.

31
 Table 4.5: Production Costs by Major Crop for Crop Year, 1997/98
(LS/feddan)
Cotton OtherCrops
Item Acala Barakat Wheat Groundnut Sorghum

Land Preparation 30,250 30,250 24,715 10,600 14,815

Labor
- Cultural Operations 43,078 43,249 16,800 28,916 21,537
- Harvesting/Picking 58,821 52,221 14,867 63,500 34,385
Material Inputs
Seeds 11,965 12,814 45,093 7,000 5,687
Fertilizers 51,684 51,684 65,801 0 26,099
Herbicides 30,041 30,041 0 0 0
Pesticides 100,438 100,436 9,928 0 0
Sacks 12,270 10,677 13,342 43,500 21,600
Subtotal 206,398 205,652 134,164 50,500 53,386

Services 12,380 12,380 0 0 0

Land/Water charges 21,600 21,600 16,201 16,850 13,000
Admin. Charge 16,380 16,380 13,520 13,000 11,700
Transport 29,074 25,643 4,561 11,500 0
Subtotal 79,434 76,003 34,282 41,350 24,700

ITotalProduction Costf 417,981 407,375 L 224,8288 194,866 148,823

Source: GeziraBoard Socio-Economic
Unit
The Role of Livestock
4.38 Livestock also play an important role in the Gezira Scheme. The estimated number of
livestock in Gezira is 458,000 animal units. An animal unit is equal to 500 kg. of animal weight.
About 40 percent of tenant farmers own livestock. Paragraph 5.18 provides more details.
4.39 On the basis of calculations made by the mission, net economic benefits from cows are
substantial with annual rates of return of up to 60 percent, based on milk production. Goats and
sheep have lower returns, also based on milk production, but are still profitable. Although
livestock are beneficial to household incomes, the benefits are dependent on Gezira crops for
fodder. As discussed in Chapter 3, the limited supply of fodder is a substantial constraint to
livestock expansion in the Gezira. Typically, tenants graze livestock on land outside the Gezira
for part of the year. Nevertheless, within limits, livestock do offer potential for increasing income
and improving nutrition in the Gezira. The current five-course rotation expressly includes crops
that can be used for fodder, specifically, sorghum stalks and groundnut residues.

32
 Table 4.6: Net Returns to Tenant Management for Major Crops, 1997/98
[Item Cotton Other Crops
l l ~~~Acala|Rarakat Wheat |Groundnuts |Sorghum
Yields (tons per feddan)
Base Case Yield 0.58 0.55t 0.59 0.79 0.84
lHighestAchieved Yield 1.40 1.33 1.01 1.12 1.07
Trial/Research Yields 1.85 1.76 1.81 1.18 1.26

Farmgate Price(LS/ton) 807,663 1,081,439 380,000 273,000 220,000

Prodn. Costs 417,981 407,375 224,828 194,866 148,823

(LS/feddan)

Net Return (LS/feddan) l l _

Base Case Yield 51,2321 182,721 27,772 73,634 101,377
Highest Achieved Yield 711,413 1,029,2421 211,046 182,578 171,675
Trial/Research Yields 1,075,177 1,491,958j 551,325 202,971 227,523

~Exchange
Rate 2,000 2,000! 2,000 2,000 2,000

lNet Return (US$/feddan)

Base Case Yield 25.62 91.36 13.89 36.82 50.69
Highest Achieved Yield 355.71 514.62j 105.52 91.29 85.84
Trial/Research Yields 537.59 745.981 275.66 101.49 113.76
Source: Sudan Gezira Board Socio-Economic Unit and mission estimates. Based on crop year 1997/98

Credit
4.40 Given the scarcity of financing for crop production, alternative formal credit institutions
could play an important role, if balanced with effective savings mobilization to sustain the source
of credit. The seasonal demand for credit may be estimated as the total of out of pocket
production costs for tenants in the Gezira. On this basis the total maximum annual financing
requirement would be SL287 billion, equivalent to $144 million. If only the top third of credit-
worthy farmers were financed, then the credit amount would be SL92 billion ($48 million). If a
successful reform of the Gezira financing arrangements were instituted, and barring disastrous
weather conditions, the percentage of external financing of expenses would decline as farmers
generate income and save.
National Perspective on Economics of Crop Production
4.41 In addition to farmer net returns, it is important to analyze profitability and
protection/taxation of the major crops from the national point of view. The national perspective
on the economics of crop production of crops in the GS is based on whether there is net benefit or
net cost for the economy. There are a number of standard measures for assessing these benefit
and cost effects. They are the domestic resource coefficient (DRCs) and net protection
coefficients (NPCs), which have been calculated for major crops for 1997/98 and 1998/99.
4.42 The DRCs measure the net foreign exchange that domestic resources can generate in the
production of a particular crop. A DRC above the number one means that the opportunity cost of
domestic factors of production used in producing a crop exceeds the additional value added at
world prices from producing that crop for export, and hence the net benefit of producing it

33
domestically is negative. In other words, it is costing the nation more to produce than is gained
from the sale on the export market.
4.43 NPCs are the value added (usually the price) in the production of a commodity at domestic
prices divided by the value added (again usually the price) in the sale of the same commodity in
the world market. An NPC above one means that the production of the commodity is protected
by current policies (i.e. producers are receiving a price in domestic markets that is higher than
they would on world markets). On the other hand if the NPC is below one it means that the
production is being taxed by current policies (i.e. producers are receiving a price on the domestic
market that is less than they would if they were to sell the commodity on world markets). An
NPC close to one means that there is competition between the domestic and export markets which
indicates free movement of commodities and no net interference in trade. Table 4.7 shows the
prices used in the DRC and NPC calculations, while Table 4.8 shows the yields used for the
calculations.
Table 4.7: World Prices of Crops
Commodity \a 1997/98 1998/99
Cotton Lint
Barakat (U.S. $/lb.) 0.80 0.70
Acala (U.S. $/lb.) 0.54 0.44
Wheat (American II-$/mt) 142 110
Sorghum ($/mt) 120 90
Groundnuts (HPS-$/mt) 500 550
Oil ($/mt) 850 700
Cake($/mt) 120 130
\a All prices are fob Port Sudan., except for wheat which are c.i.f
Sources: Sudan Cotton Company, Sudan Oil Seed Company, Ministry of Agriculture and Forests

Table 4.8: Yields of Major Crops Used for DRC Analysis

Commodity 1997/98 1998/99
Cotton Lint
Barakat (kantars/feddan) 4.07 4.07
Acala (kantars/feddan) 4.61 4.61
Wheat (mt/fd) 0.70 0.27
Sorghum (kg/fd) 941.9 728.0
Groundnuts (HPS-kg/fd) 1040 464.3
4.44 The DRC calculations show that in most cases crops produced in the Gezira are very
profitable from the national point of view (Table 4.9). The exceptions are sorghum and wheat but
only for crop year 1998/99, which was an exceptionally poor year for yields, as Table 4.8 shows.
The DRC for cotton includes the values of lint, seed and escarto products. Cotton seed exports
are still prohibited by law. The DRC for sorghum includes its fodder value. Shells, oil and cake
are incorporated into the DRC for groundnuts. The assumption is that in one sack of groundnuts,
55 percent account for the shell, 17 percent for oil, 25 percent for cake and 3 percent for losses.
The DRC calculations for 1991/92-92/93 from the 1995 report were very consistent with the
calculations for the later years, although indicating slightly higher profitability than in 1997/98.
The exception was wheat, which was estimated to be much more profitable by the earlier DRC.
The main reasons were the higher yields achieved during the 1991/92-92/93 crop years.
4.45 The NPCs from 1991/92-92/93 show that all crops were heavily taxed by the economic
policies at the time. The liberalization that took place in 1993 is reflected in the higher NPCs,

34
 Table 4.9: Domestic Resource Costs and Net Protection Coefficients for Major Crops and
Livestock, 1991/92-1992/93, 1997/98 and1998/99
Crops DRC NPC
1991/92- 97/98 98/99 1991/92- 97/98 98/99
92/93 92/93
Long Staple cotton 0.19 0.29 0.26 0.57 0.82 0.77
Medium staple cotton N/A 0.50 0.65 N/A 0.90 0.78
Groundnuts 0.26 0.28 0.96 0.52 1.03 1.01
Sorghum 0.77 0.73 1.23 0.52 1.78 2.05
Wheat 0.24 0.68 -0.78 0.58 1.34 1.08
Sources: Missioncalculationsand WorldBankreportSupplyProspectsforAgriculture, WorldBank, 1995
unpublished.Fortechnicalnotesand assumptions,see Annex4, PartB.
approaching unity during 1997/98-98/99. Cotton, probably because of its cash generating nature,
is still taxed and the tax increased significantly in 1998/99. The bulk of the cotton taxes are in the
form of export tax (5 percent) and state and local taxes (12 percent). As expected, the level of
taxation for long and medium staple cotton are about the same. Groundnuts are neither taxed nor
protected. Sorghum, as the main food crop, is fairly highly protected. Wheat was once protected,
as the NPC of 1.34 for 1997/98 shows, was fully liberalized by the following crop year, reflected
in the NPC of 1.08 for crop year 1998/99.
Incomes and Profitability from the Gezira Scheme
4.46 Estimating Revenue: Variations in the shares of different crops planted and cultivated in
the GS are clear from Table 4.11. It also shows the large slump in area in 1998/99. Sorghum has
been the most widely cultivated crop. During 1990/91-94/95, food crops/grains dominated the
area under cultivation. For the purpose of estimating total revenue from the GS in an average
year, a five-year average of areas has been used. For all three cases an average of the last five
years has been taken, yielding the averages in Table 4.10.
Table 4.10: Average Area used for Major Crops (1990/91 to 1994/95)
I Wheat/Other
Period Barakat Acala Winter Crop Groundnuts Sorghum Total
(feddans)
5-year average area 82,337 |145,425 397,845 199,139 431,116 1,255,863
Source:SudanGeziraBoard,Socio-EconomicUnit.
Table 4.11: Areas Designated by the Gezira Board for Production by Crop
1990/91-98/99
Season Cotton Wheat Groundnut Sorghum Total
(% of area planted) ('000 feddan)
90/91 18 43 3 36 1,411
91/92 14 35 2 48 1,509
92/93 12 35 11 42 1,474
93/94 11 37 13 39 1,407
94/95 19 30 15 36 1,304
95/96 23 30 18 30 1,317
96/97 24 28 18 30 1,374
97/98 22 27 20 31 1,111
98/99 22 18 21 39 _ 693
Source: Calculatedfrom area data obtainedfrom the Socio-economicResearchUnit, GeziraBoard

35
4.47 Combining the estimated net return per feddan by crop for the three yield scenarios and
multiplying by average areas of each crop in the scheme yields an aggregate net revenue for the
scheme for the three scenarios. The results are shown in Table 4.12.

Table 4.12: Estimated Total Annual Net Revenue for the Gezira Scheme by Crop
Scenario Barakat Acala Winter Crop Groundnuts Sorghum Total
(US$'000)
Base CaseYield 3,725 l 7,522 5,524 7,332 21,853 45,956
,Highest Achieved Yield 51,729 42,372 41,982 18,179 37,006 191,268
|Research Yield 78,179 161,422 109,671 20,210 49,045 318,526
Source: Calculated using net return from table 4.6 and average areasfrom Table4.10

4.48 In the base case scenario, that is for current yields, area cultivated and prices, the GS
tenants should realize an aggregate annual net revenue of about $46 million in 1997/98.
Distributed across roughly 114,000 tenants, the average net revenue per tenant household would
be $403 per annum. With the higher yield scenarios, average annual net revenue per tenant
household would be $1,677 (highest achieved), and $2,793 (research yield). Wheat would appear
to be the most profitable crop at the higher yield scenarios. However, the higher yield scenarios
for wheat require a much larger improvement in yields relative to the other crops. In addition,
Gezira wheat has encountered serious marketing obstacles, namely, that imported wheat out-
competes Gezira wheat on price and quality. So, there is a strong likelihood that increases in
wheat production would not find a market. This is not the case for the other crops. Cotton would
generate the greatest net revenue with Barakat leading Acala, and sorghum next, with groundnuts
last. It is also worth noting that for base case yields the rate of return from crops produced in the
Gezira would be about one percent per annum if the Scheme is valued at $4 billion39 For the
"highest achieved yields" it would be about 4.5 percent
4.49 Indicative Rate of Return: In addition to the estimated earned incomes indicated above,
some 40 percent of tenants would earn an additional income from livestock.0 Nevertheless by
far the most important addition to income is derived from off farm income. While precise data
are not available reliable estimates show that on average tenants in the Gezira earn 60 to 70
percent of their annual earnings from off farm employment. If it is assumed that 60 percent of
earnings are derived from off farm income then with an average household income for the base
case of $403 per year, total household income (with no additional income from livestock) would
climb to $1,008 per annum or $168 per caput. This is still less than the average GDP per caput
for the whole of Sudan namely $290 in 1998. Although there is no formal poverty line in Sudan
at present, it is not likely to be below $168 per capita and hence families who earn 60 percent of
their income off farm and achieve the average crop yields are unlikely to be above the poverty
line unless they earn a substantial income from livestock. For yields typically achieved by
farmers during their best production years ("highest achieved yields"), household income
(including off farm income but not including livestock) would rise to $4,193 or $699 per caput
which is well above average Sudanese income levels. This at last would be an attractive income.
CONCLUSIONS
4.50 The main conclusion from the economic analysis is that all major crops typically grown in
the Gezira can be profitable at both the farm and national level. This profitability holds even for
conservative yield assumptions, which are of course much higher than yields achieved at present,
and without the inclusion of indirect benefits such as the stimulus to economic activity in the

See paragraph2.1 for estimatesof the estimatedvalueof the GeziraScheme.

40 See paragraph 4.38.

36
immediate vicinity. Cotton, especially Barakat, is the most profitable, although that would
probably change if supplies were increased above current levels since the World market for
Barakat is constrained. Groundnuts and sorghum are the least profitable although the calculations
do not take into account the impact on soil fertility of groundnuts nor the value of sorghum stalks.
Cotton carries higher risk than other crops because insects are a hazard and inputs are far more
costly (roughly twice as costly) than for the other crops and therefore reasonable yields must be
achieved to avoid substantial losses. Satisfactory incomes can be earned from Gezira farms but,
even with income from livestock, extraordinarily high incomes are not likely without further
technological change (e.g. the introduction of new rotations leading to a higher cropping
intensity) or productivity change (with current rotations). Therefore tenants will probably always
want to supplement their farm incomes with work off the farm at certain times of the year when
agricultural activities are reduced. Barnett and Abdelkarim have said, ".. in Gezira, and similar
areas, we can hardly talk about an agrarian capitalist class" 41, but that was a judgement in the
light of existing technology. It could change if new technologies and higher value crop emerge.
4.51 The second major conclusion is that the poor performance of Gezira agriculture is largely
determined by the poor performance of the SGB and the total lack of financial intermediation
other than for cotton (through the SGB). Input and water delivery for cotton, as currently
provided by the SGB, are inefficient, resulting in low yields and farmer dissatisfaction. Farmers'
chronic lack of financing needed for greater self-reliance is largely a consequence of the lack of a
financial intermediary that would allow farmers to borrow as well as accumulate wealth during
surplus years through savings. It is also affected by the absence of any security such as tenancy
rights. This lack of financial intermediation has arrested the development of all aspects of Gezira
agriculture. The recommendations in the summary address these problems and are consistent
with the options for reform.

41 TonyBamettandAbbasAbdelkarim,op cit,page97.

37
 5. SOCIAL ISSUES

5.1 The purpose of this chapter is to explore the major social issues that face farmers and
administrators in the Gezira Scheme, and to suggest strategies for addressing these issues in order
to achieve socially balanced and sustainable development.4 2
5.2 In summary this chapter shows that life in the Gezira Scheme is characterized by a
pervasive social inequality which can be traced back to the original design of the Scheme. It is
argued in this report that large inequalities are not sustainable in today's social environment. If
they are removed friction between the major groups in Gezira's population is likely to be
markedly reduced thus limiting any impact which these differences would have had on
production relations and thus enhancing the economic viability of the Scheme as a whole. The
current social situation is also derived from the conclusions of the previous chapter, namely that
family incomes earned from farming in the Gezira are at present typically very low. Many
tenants must be at or below the poverty line. For them tenancy has become a liability since they
live in a constant state of indebtedness. Migrant workers who are dependent on tenants for work
are therefore also affected. The inadequate basic social services described in this chapter
inevitably makes the plight of these people even worse.

MAJOR ISSUES
People of the Gezira
5.3 The Gezira Scheme Draws Many People: It is estimated that about 2.7 million people
either live in the GS and depend on it in the region for their livelihood as tenants, sharecroppers,
agricultural laborers, traders or providers of various services. The core of this population is made
up of about 114,000 tenants in the GS with an associated population of about 798,000, (assuming
average family size of 7 persons) who by law, must all be Sudanese. The other main group is
migrant labor; some of whom are not Sudanese. They live in about to 1,000 camps with a
population thought to be about 600,000.43
5.4 The number of camps and their population increased dramatically following the long
droughts in the 1970s and early 1980s, which were followed by the 1984-1985 famine. For
example, in 1981, the number of camps was estimated to be 710 with a total population of
170,000. In 1986, there were reported to be 883 camps with a total population of about 460,452.
About 32 percent of all the camps in the GS were established between 1976 and 1985 as people
sought labor and residence in a more stable environment less prone to drought.
5.5 Social Diversity: In 1929, the majority of migrant laborers in the Gezira were from West
and Central Africa, (25.8 percent from Nigeria, 35.7 percent from Central Africa and 38.5 percent
from Westem Sudan). By 1954, it was estimated that 16 percent of the Gezira population was
made up of labor migrants from Nigeria and Chad.44 While this proportion from West and
Central Africa is currently probably about the same, the mission found that the overwhelming
proportion (70 percent) of people in camps at present originate in Darfur with a significant
number from Kordofan.

42 Annex VI contains a more detailed review of the social issues facing people in the scheme.
43 From personal communication, Ms. Iqbal Ahmed Hagar, Manager, Planning, Social and Economic
Research, Gezira Board. If "half tenancies" are included, this number is estimated to be as high as 120,000.
44 See also: The Republic of the Sudan, Planning and Socio-Economic Research Unit, Sudan Gezira Board,
Gezira Rehabilitation Project, Migratory Labor Settlements in the Gezira Scheme, Final Report, Jan. 1994.

38
5.6 Camps in the GS for seasonal labor were planned in designated areas but housing was
supposed to be built of non-permanent materials, such as straw or wood, with more pernanent
structures of bricks and clay buildings banned. As generations of seasonal laborers established
themselves within the Scheme, living conditions tended to erode. Basic education, health, water
supply and sanitation services are usually of low standard.
5.7 The living conditions in the camps contrast with those of the tenants. Indeed, life in the
Gezira is characterized by social stratification which can create social tension in some of the
village-camp relationships. The general view of tenants and the SGB, is that the migrant
population constitutes a substantial problem for the management of the GS. The following
reasons were mentioned:
(a) migrants settle on tenancies and reduce the area cultivated (about 30 percent of
settlements);
(b) the migrant camps obstruct canal clearing work because of their proximity to the canals
(33 percent of settlements);
(c) animals from the camps devour crops; and
(d) migrants produce alcohol which leads to unruly behavior and reduced productivity of
workers.
5.8 Ways need to be found to achieve a greater integration of the two broad social groups since
they are basically inter-dependent, the migrant labor is of crucial importance to tenant production
and income.
5.9 Increasing Reliance on Hired Labor: Studies by the Socio-Economic Unit of the SGB
have found that with increasing farmer wealth, educational achievements and social aspirations,
less than 20 percent of tenants rely on family labor in agriculture and that hired labor is a
dominant factor of production.4 5 Most of the family labor is in watering of cotton and wheat.
However, laborers, who are often sharecroppers in sorghum, groundnuts and vegetable
production, are responsible for almost all the field operations for cotton and wheat. Indeed,
studies have shown that over 30 percent of the tenants lease or rent their land to others who are
mostly laborers In addition the system of delegating a person (wakeet) to be responsible for
cultivating one's tenancy is common; about 15 percent of the tenancies are estimated to be
farmed under the wakeel system. The general consensus is, however, that productivity under
these arrangements is generally lower than if managed by tenants themselves since there is less
care for the land under the delegated management system.46
5.10 Aging Tenants: About 43 percent of the population is under the age of 15 years, but the
general age of the tenant population is relatively high. While the majority of tenants (66 percent)
were 20-59 years old in 1984, some 30 percent were aged 60 and above, and only 3.6 percent
were under 20 years of age.4 ' In the random sample of 50 farmers who attended the group
discussion sessions with the World Bank mission in November 1999 the average age was found

45 GeziraRehabilitationProject;MigratoryLabor Settlementsin the GeziraScheme, FinalReport.Jan.

1994,
46 MohammedM. AbdelSalam;InstitutionalImpedimentto Developmentin Sudan GeziraScheme, in,
ElfatihShaaeldin(ed.),The Evolutionof AgrarianRelationsin the Sudan:A Reader,The Hague, 1987.
47 KamilIbrahimHassan,ProductionRelations in the SudaneseAgriculture: The Case of the Gezira
Scheme, DSRCSeminarNo. 54, November1984.Similardata were reportedin the Republicof the Sudan,
GeziraRehabilitation Project;Gezira Scheme Tenants HouseholdSurvey, 1987/88,Final Report.June
1991:andin Mohamed AbdelGadirAdam;(1196);The PolicyImpactson FarmersProductionResource
UseEfficiencyin the GeziraIrrigatedSchemeof Sudan,VanKielVerlag,Germany.

39
to be 56 years. The aging tenants are, of course, more likely to use casual labor to assist on their
farms and work as sharecroppers. A high interdependence between tenants and migrants is the
inevitable outcome. This interdependence is mixed, however, with some strain as different status,
cultures and aspirations clash.
Land Tenure
5.11 The growing population in the camps and in villages has added to the pressure on land in
the GS. At present land cannot, however, be legally exchanged within the GS and therefore re-
structuring of land ownership in response to these pressures is not possible.
5.12 A Brief History: Prior to the establishment of the GS, land in the Gezira plain was used
for rainfed crops and grazing under a land tenure pattern that included private ownership. In
establishing the scheme, under the 1921 Gezira Land Ordinance, the Government either leased or
bought land from its land owners. As a result, about 60 percent of the land is today Government
land. The remaining 40 percent is still freehold, which is rented by compulsion from its owners
for a fixed annual rate of LSO.10 per feddan for 40 years.48 Landowners were prevented from
renting this land to others, and speculation was avoided by placing restrictions on the sale of land.
The Sudan Gezira Board manages all the land in the Scheme.4 9 This
has had the effect, it is said,
of alienating the tenant from the land he cultivates and thus adversely affect his attitude toward
working and investing in land.50
5.13 The Land Tenure System is Simple: The Gezira Land Ordinance of 1921 specifies that
"the tenant may not transfer, assign, sublet or part with the possession of the land comprised in
the tenancy or any interest there in or in the crop grown there on, except with the consent of the
government or such person or persons as the government may appoint as aforesaid". A farmer is
also not allowed to own more than one tenancy, but his wife and sons can own tenancies in their
own right. A tenancy can be inherited, but officially it can only be fragmented to half the size of
a full tenancy.
5.14 Fragmentation of Farms: As mentioned earlier (para.4.3), no official distribution of farm
size was available to the mission. It is known, however, that there is an increasing incidence of
half tenancies but, as was seen in the previous chapter, half tenancies are uneconomic at current
low yields. At the same time there is evidence that absenteeism by tenants and the use of the
Table 5.1: Estimated Distribution of Tenancy Size in the Gezira
Area of Tenancies (feddans) Proportion of Tenancies (%)
8 _________________________________________1
5
10 30
20 50
40 __5
Source:BlockInspectorsof the areas visitedduringthe WorldBank missionin November,1999.

48 This is clearlyan insignificantrent these days. The report of the PresidentialCommitteeon irrigation
schemesthe Gezira drewattentionto this. A ministerialcommitteehas examinedthe rental issue and has,
it is understood,completedits report.
49 See also: Sharifel Dishouni,(1989), Traditionaland Modernizationin SudaneseIrrigatedAgriculture:
Lessonfrom Experience, DSRC MonographSeries, No.36; and Mohamed Hashim Awad, (1987); The
evolutionof Land ownershipin the Sudan;in Elfatih Shaaeldin(ed), The evolutionofAgrarian Relationsin
the Sudan,The Hague, 1989.
50 See MohamedAbdel Salam,InstitutionalImpedimentsto Developmentin the Sudan GeziraScheme, in
ElfatifShaaeldin(ed),The EvolutionofAgrarianRelationsin the Sudan

40
wakeel system of delegated management have been increasing. This has therefore caused
an increased fragmentation in the units cultivated, while the registered tenancy size has
not changed. Discussions with Block Inspectors during the Bank's mission indicated that the
distribution of tenancy size in the Gezira is about as shown in Table 5.1.
5.15 A study by Farah5" observed that the correlation between tenancy size and additional
income is positive and significant at the five percent level. Hence, the tenants operating the small-
size tenancies are not only incapable of financing most of the agricultural operations, but also will
often fail to cover their family expenses. As a consequence, a large proportion of these tenants
resort to borrowing from rich tenants and local money-lenders, who employ the sheil credit
system. Farah's study further showed that there is an inverse relation between tenancy size and
those who were involved in the sheil credit system.
5.16 Tenancies Need to be Flexible: The current land tenure arrangements are inflexible and
constrain changes in farm size that are clearly needed for sustainable development in the GS.
This inflexibility could be removed by allowing the sale of tenancies to permit the aggregation of
land within specified area limits. Such sales would allow farmers and the GS to recoup the value
of their shares in investments made in the irrigation areas. Funds accruing to the SGB could be
re-invested in improvements for the Scheme. Allowing structural adjustment through sales of
tenancies would also allow some farmers to liquidate their debts. For others it could lead to more
sustainable farming as those with larger farms would probably operate more profitably.
Assets, Credit and Debt
5.17 Tenants Hold Few Assets: Following a 75-year history of almost complete provision of
production services (as well as many social services), most tenants in the GS have very few farm
assets. For example, the Bank mission was informed that only about five percent of tenants have
tractors or harvesters. It is estimated that about eight percent of tenants own pick-up vehicles.
Those who own lorries are mostly traders and they make up less that two percent of the tenants in
the Gezira. The distribution of vehicle and large machine ownership is skewed in favor of the rich
tenants who combine farming with trade. A survey of machinery on farms in 1979 indicated that
about 80 percent of tractors and 68 percent of the combine harvesters in the Scheme were owned by
trader-tenants.
5.18 It was mentioned earlier (paragraph 4.38) that 40 percent of tenants in the Scheme have
animals. Studies by the Social and Economic Development Unit found that tenants have an
average of 12.4 animals per household, of which 2.7 were cattle and 8.6 were small ruminants
and the rest were donkeys. Large tenancies generally have more animals than the small
tenancies, but livestock are becoming an increasingly important source of income for all tenants.
The most important animals are shown in Table 5.2.
Table 5.2: Average Number of Animals owned per Tenant Household
Size of Tenancy Sheep Cattle Goats
All Sizes 4.4 2.7 4.2
Large 7.5 5.5 5.0
Small 3.7 2.1 4.0
Source: Sudan Gezira Board; Gezira Rehabilitation Project, Gezira Scheme Tenants Household Survey,
1987/88,FinalReport,1991.
5.19 Migrants Increase Asset Holdings: Migrant laborers have acquired assets over time and
some now own sheep, goats, poultry and cows. A study conducted by the Socio-Economic
Department in 1993 found that goats were the animals most frequently owned by the camp

51MohamedAbdel Salam,ibid.

41
population. It was estimated that 75 percent of the camp households had goats and 56 percent
had sheep.
5.20 Credit Allocation Causes Concern: The distribution of assets in the GS is largely due to
credit policy in the Agricultural Bank of Sudan, supported by the Gezira and Managil Farmers
Union Executive Board. The Agricultural Bank offers credit only to those who satisfy the
principle of credit-worthiness. This principle benefited traders and rich tenants. A study by
Farah Hasan Adam has argued that the Farmers' Union often uses its political power to influence
the Agricultural Bank to offer credits to the wealthy tenants. This is significant since privately
owned machinery performs a large part of the operations for sorghum, groundnut and vegetable
production.5 2 The mission was informed that the current situation is very similar to that observed
by the 1979 survey by Farah.
5.21 While credit for regular production activities is provided through the individual account
system operated by the SGB, assets are the basis for additional credit for crop production,
maintenance and harvesting. It is well-known by researchers in Gezira that tenants with their
own resources to purchase fertilizer or make other improvements to the production environment
achieve the highest crop yields and therefore have higher incomes. Obviously those with assets
have a huge comparative advantage in gaining access to credit. Those without assets are forced
into using the informal "sheil" credit system which is associated with high real interest rates and
usually leaves borrowers worse off and financially tied to the lender.
5.22 As emphasized already in paragraph 4.50, production in the Gezira will never be sustained
unless there is a well established formal credit system which tenants and others can use to obtain
credit at reasonable rates of interest. The overriding problem in the past has been the absence of
any collateral loans because tenants have released their main crop (cotton) to the SGB which
effectively has a lien on the cotton from which it then deducts the various production costs and
other charges. The future value of non cotton crops is uncertain and certainly not a preferred
collateral for formal credit institutions such as the Agricultural Bank.
5.23 A Suggestion: If the land tenure arrangements in the Gezira could be changed such that
tenancies could be bought and sold, then there is no reason why the assessed value of tenancies
could not provide a firm collateral for loans from formal credit institutions. On this basis there
may also be prospects for tenants to establish their own cooperative credit institution ("credit
union") that could provide financial services to the whole population of the Gezira and serve to
mobilize safe savings as well as provide term loans for many purposes.
Social Services
5.24 When farmers operated under the joint account system in the Gezira a proportion of the
crop proceeds were subtracted to provide for social services. Under this arrangement the SGB
provided most of the villages of tenant farmers with social services. The SGB did not have a
presence in the camps and, while the residents of the labor camps were never excluded from the
services provided to the villages, the World Bank mission was informed that labor camps were
rarely beneficiaries of these services.
5.25 The laborers, with whom the mission discussed this matter expressed the view that they
should be provided with social services and they are willing to contribute to the cost of such
services. In the villages where they live along side the tenants, they claim to pay the monthly
contribution for water and schools through the village committees, although their children do not

52 FarahHasanAdam;Evolutionof the GeziraPatternsof Developmentwithin the Contextof the History

of SudaneseAgrarianRelations;inElfatihShaaeldin(ed)op.cit.

42
go to school and they do not have piped water in their houses. These discrepancies are a potential
source for social unease.
5.26 Education: Today Gezira state has more schools than most states in the Sudan. Adult
literacy rate for the State 10 years and over is above the national average at 64 percent, (73
percent for males and 55 percent for females), compared to 53 percent (64 percent for males and
42 percent for females), for the whole country.
5.27 Over 90 percent of the tenants in the villages in the GS are currently served by primary
schools, while less than 10 of the villages (one percent) have secondary schools. In the past, it
was customary for most secondary schools to be located in large urban centers, and most of these
were boarding schools but they have now been abolished. Secondary schools in villages are
generally rare in Sudan, and this is true for the Gezira, too.
5.28 On the other hand the majority of the migrant camp population is illiterate. Khalwa
(Koranic schools) education is the most commonly available in the camps. Studies by the Socio-
Economic Department of the Gezira Board indicate that less than 2 percent of children in camps
are enrolled in primary school and less than 0.5 percent in senior schools. Dropout rates among
these children are very high; in particular among girls who tend to leave school/khalwa once they
reach the age of 13-14 years of age.
5.29 Health: Access to health services is also much higher in Gezira state than for the whole
country. In 1993, there were a total of 36 hospitals in the Gezira state, while the total of health
centers and primary health care units were estimated to be 133 and 215 respectively. The number
of hospital beds in Gezira state was 2,640; there were 59 medical specialists, 246 medical doctors
and 561 medical assistants.
5.30 At the Gezira Scheme level, 52 percent of the tenants have access to health centers within
their village; 47.9 percent seek such services from adjacent villages and the average distance from
a village to a clinic was 3.7 kilometers. Some 36 percent of the tenants sought hospitals services,
but only 2.9 percent had such services in the village. The remaining 97.1 percent sought such
services in large villages and towns, with an average distance of 12 kilometers.
5.31 Urban hospital services are only enjoyed by a small number of tenants (one percent) due to
transportation difficulties. Private clinics are far from the villages and only 0.7 percent have
access to such services. The average distance to these facilities is 28 kilometers.
5.32 The health condition in most of the migrant camps is extremely poor, and camp residents
walk long distances to receive basic health services. This coupled with high costs means that the
majority of camp populations uses traditional healing for ailments and disease. Health hazards to
the camp population are increased by their proximity to the canals and the lack of clean drinking
water, which result in a high incidence of Schistosomiasis (Bilharzia) and malaria among the
camp residents. The Bank-assisted Blue Nile Health Project introduced some hand-powered
pumps and sand filters in some of-the camps, but it was reported to the World Bank mission by
the camp residents that many of these are now in disrepair.
5.33 Water, Electricity and Sanitation: The population in the Scheme depends on two main
sources for domestic water consumption, surface (canal) and ground water. Underground water
is available in major formations and utilised through boreholes, hand pump wells and shallow
wells. Some treatment is usually done through slow sand filters in some areas of the Scheme.
However, in many areas, such water is not treated. Many communities, in particular the camp
population, depend on canals as sources of drinking water.
5.34 A study conducted by the Social Development Unit in 1988 found that most of the tenants
(75 percent) had piped water for their domestic use either within or outside their houses. The role

43
of the former Social Development Fund was clearly noticeable here, as the fund had played a
major role in providing most of the tenancy villages with drinking water through the program of
deep bore wells. Thus relatively few tenants (25 percent) still rely on surface wells or canals for
their domestic use. These figures show that Gezira tenants are slightly better off than the average
for Gezira State (see Annex VI).
5.35 Electrification of villages started as part of the Social Development Unit. Thirty percent of
the tenants in the Gezira area have access to electricity compared to 2.7 percent in Managil. Even
with electricity available, 80 percent of the tenants still depend on kerosene for (part of) their
lighting needs. The majority of households depend on wood and charcoal for cooking. Gas
cooking is still very insignificant (one percent). The majority of the tenants (52 percent) use open
space as toilets while 46 percent use pit latrines.
CONCLUSIONS
5.36 There is a sense of serious social inequality in the Gezira. Tenants are anxious about the
future because their incomes are declining in real terms and no doubt the earnings from farming
for some puts them below the poverty line. Their only strategy is to augment their incomes
through off-farm work. Since most economic activity in the immediate vicinity is highly
dependent on the Gezira Scheme itself, the prospects for additional work are limited. The
difficulties facing the tenants are compounded by the fact that they cannot sell their land and
leave for another job and another life. They, or one of their relatives, are forced to stay on in the
Gezira hoping that the next season will bring better incomes. Unfortunately many are likely to
remain in a constant state of indebtedness which makes many of them feel more like low level
managers of someone else's land than managers of their own land. Adjustments to the tenure
arrangements must be part of the solution to the farmers' dilemma.
5.37 Migrant workers who depend on the tenants for most of their work are vulnerable to the
low income earning capacity of tenant farms. Their situation is made worse because they are
forced to live in dwellings which are temporary at best, and are faced with a low level of social
services for themselves and their children. Their housing and social services contrast with the
higher quality housing and social services in tenant villages. Greater integration of this part of
the Gezira society must be part of the development strategy.
5.38 Tenants and migrant labor quite naturally do not feel in control of most factors that affect
their welfare. In such an environment all blame is placed on the Sudan Gezira Board and on the
Government whose institution it is. The SGB certainly faces constraints and is not in a position
to address all the problems of the Gezira, but it is in a position to address some of the irrigation
management, crop production and financial problems. Institutional change for the Gezira must be
part of the future development strategy. The next chapter discusses the options the Government
could consider to achieve institutional change to address the very serious social and economic
problems facing the Gezira.

44
 6. INSTITUTIONAL ISSUES
6.1 Previous chapters have referred frequently to management and institutional weaknesses as
reasons for the problems faced by the Gezira Scheme. In many cases institutional issues have
indeed proven to be major bottlenecks to efficiency and production growth. Examples from
previous chapters that stand out are sub-standard and delayed operation and maintenance of the
irrigation system, major shortfalls in the collection of charges for irrigation water and other
services (i.e. the "administration" charge), the role of the SGB in requiring tenants to produce
cotton on part of their land while promising to provide land preparation services and inputs
(financed by individual tenant accounts) that are either of inadequate quality or are not made
available on time, low yields for all crops in relation to field trials, payment to tenants for cotton
which are delayed up to 12 months and are a relatively low proportion of the f.o.b. price, poor
quality of extension service, the lack of formal credit facilities for financing the production of
other crops, and the constrained land tenure system that does not allow open trading in tenancies.
The purpose of this chapter is to review the institutional structures that create such problemsand
explore options for solving them.

MAJOR ISSUES

Brief Historical Perspective on the Gezira Scheme53

6.2 Understanding the characteristics and history of the Gezira Scheme makes it easier to
understand the current institutional problems facing the SGB, the tenants and the Government.
Institutions are defined as "rules of the game" that emerge from formal laws, informal norms and
practices, and organizational structures in a given setting. The incentives that current institutional
arrangements create shape the actions of public officials. Institutions overlap with, but are not
synonymous with, organizations. They are affected by policy design but are broader in scope and
less subject to frequent change than most policy frameworks.5 4
6.3 The rules of the game when the Gezira Scheme was constructed by the British and
subsequently under the management of Sudan's central Government, were that the Scheme
existed to produce cotton for export at the lowest possible cost. This institution still exists. Quite
often during the preparation of this report the suggestion that cotton should not be the core focus
for the Scheme was rejected by the Gezira management. The rules of the game from the tenants'
point of view were that if the Government wanted them to produce cotton the Government should
provide all the support needed to do this at the lowest possible cost to the tenant. With
management and tenants each aiming to minimize costs there has always been tension and
disappointment resulting in a distortion of incentives toward "satisfying" rather than
"maximizing" production opportunities. This has been the situation for most of Gezira's
existence and the root cause for its mediocre performance and institutional inefficiency, except
for a short period after independence noted below.
6.4 Early Origins based on Private SectorInvestment: While the possibilitiesfor large-
scale cotton production had been realized as early as 1839, it was not until 1904 that an American
investor (Leigh Hunt) was granted a concession at Zeidab. Subsequently the Sudan Plantation
Syndicate, a private company, was authorized to begin experimenting with cotton production in

This sectionhas used materialfrom booksby GalalMahmoudYousif,The Gezira Scheme: The Greatest
on Earth, 1997 and Tony Barnett,The Gezira Scheme: An Illusion of Development,FrankCass and
CompanyLtd,New Jerseyand London,1977.
54 TakenfromReformingPublic Institutionsand StrengtheningGovernance:A World Bank Strategy,
internaldraft,November1999.

45
1911 in Tayba which was to become a nucleus for the prospective Gezira Scheme. In 1913 the
British Parliament approved a loan of three million Egyptian pounds to the Sudan Government to
start building the Gezira Scheme to produce cotton. This decision was the culmination of many
years of detailed investigations through pilot pump irrigation schemes in a number of locations
along the Blue Nile, as well as pressure from the from the British Cotton Growing Association,
the British textile industry, and members of Parliament from Lancashire. Following the British
government's decision to support the scheme the Sudan Plantation Syndicate, the Kassala Cotton
Company and the Sudan Government signed an agreement in 1919 that established a partnership
for the development of the Gezira Scheme which continued until the end of 1949. After a delay
due to the First World War the Sennar Dam was completed in 1925 and in the first season 80,000
feddans were irrigated.
6.5 Government Appointed Board takes Control: On January 1, 1950, following many
years of considerable agitation against the continued presence of non-Sudanese management for
the GS, the government terminated its agreement with private companies and the GS came under
the management of a corporation called the Sudan Gezira Board (SGB). This change was still six
years before Sudan became independent from British rule. Since 1950 the GS has operated under
a government act and imanagedby a Board of Directors generally under the strong influence of
the Ministry of Finance and the Ministry of Agriculture whose minister chairs the Board of
Directors.
6.6 It is interesting to note, however, that the first chairman after Independence was a well-
known businessman of strong independent character with good relations with all the main
political parties. This choice of chairman was apparently motivated by the Government's desire
that the Scheme be (a) independent of political interference; (b) managed along the lines of a
private enterprise even though it was a government corporation; and (c) have independence in
terms of the pricing, financing and marketing of cotton. There are many in Sudan who feel that
this management arrangement stood out as very successful during which yields were high,
marketing was efficient, relations between tenants and the Scheme management were cordial, and
the Scheme's major expansion took place smoothly.
6.7 In subsequent years Government influence increased. In 1964, following the popular
revolution, political parties scrambled to capture the support of farmers and consequently the
Farmers' Union gained considerable strength and demanded a share in decision making in the
Scheme. In 1969, following the coup d'etat the Scheme came even more under the control of the
public sector and its efficiency declined further as managers became political appointees with
inadequate experience. The Scheme also became a source of extraordinary rents to the
Government and substantial implicit taxes on tenants.
6.8 Farmer representation and Board composition has varied over the years in line with
changes in the Act. Currently there are four farmers' representatives on the Board. There is at
present considerable doubt about the benefits for tenants in general from their representatives on
this core institution. At the same time there is considerable doubt about the capacity of the Board
as a whole to take charge of the challenge to rejuvenate what is essentially a dysfunctional
organization. See Box 6.1 for a brief review of the issues related to tenant representation on the
Board and its decisions.

46
Box 6.1: Tenants Representationand Decisions in the Gezira Board

Farmers'representationin the GeziraBoardof Directorsincreasedprogressivelysince the idea

was introducedin the 1963/64seasonwhenthere was only onerepresentative.It was increased
to three membersin 1965,but wasreducedbackto onerepresentaivein 1969.Then increased
to fourmembersas stipulatedin 1984Act. In 1993,in the aftefmathof the proclamationof the
liberalizationpolicies,the numberof the farmers'representaivesin the Boardof Directorswas
raisedto 50%1*,out of a total of 20 members.Notwithtding the strongobjectionsfrom the
Farmers' Union, the Govemmentdecided in 1998 to reduce their representationto four
membersas per the 1984Act.

Representationandparticipationof producersis an essntial elementfor effectivemanagement

and highperformance.Unfortunatelythe presenceof fiamersin the Boardof Directorshas not
producedthe desiredresultsso far as the tenantfarmersare concered. The mainreasonsfor
this include:(a) emphasiswas on representationand not participationof "realr producers;(b)
representativesmanipulatedecisionsto their politicalambitionsrather than for the interestof
the smallproducers;and (c) somerepresentativesremainedon the Boardfor decades,whichis
not conducivefor injectionof new ideasand blood.

Despitethe generallysubstantialrepresentationof tenantson the Board,decisionsby te Board

do not reflectstrongleadershipon fundamentalissues. The Bank missionexamineddecisions
madeby the Boardof Directrs over the last 12montfs andftundthem to be adminirstativein
naturewith no hint that the Schemefacedfundamentaltechnicaland finanial problems. Nor
werethereanydecisionsthat suggesteda debateon strategicor policyissues.
Source:Missioninformation

The SGB and its Relationship to Other Institutions and Organizations

6.9 Figure 6.1 displays the complexity of the institutions organizations around the SGB in
relation to cotton production and marketing and financing. The relationships for other crops,
though less complex, are nevertheless also important. The SGB is the hub for a set of highly
complex and often non transparent relationships.
6.10 The complexity of the institutional relations stems from the historical role of public sector
management of the Scheme and the many ways it has sought to establish alliances in order to
remain financially viable. The following paragraphs review briefly the roles played by and the
issues facing the main institutions associated with the Gezira Scheme.

47
 lip~~~~i
/ t~~~~~aA
1i
8111S86 < 5~~I
The Sudan Gezira Board
6.11 The SGB led by a GeneralManageris responsiblefor the day to day managementof the
GeziraScheme. It has a staff of 7,056(1999)5 of whomabout25 percentare "classified"staff.
The remainderare definedas laboringlevel staff. The followinginstitutionalarrangementsare
key to the operationof the GeziraScheme.
6.12 SGB is Highly Centralized:The SGB has a centralizedorganizationwhich reflectthe
role it plays in the Scheme. Figure6.2 which is the organizationchart providedto the joint team
by the SGBmanagementreflectsthe centralizationof authorityshowingeightmajordepartments
and units reportingdirectlyto the GeneralManagerwithoutany intermediateauthority. While
thereis a DeputyGeneralManagerpositionit has not beenfilledfor a numberof years and would
appearto be unimportantin the managementstructure. Irrespectiveof the futureroleand size of
the SGB,there can be little questionaboutthe need for a restructuringof the SGB to distribute
authoritymore evenly if it is to becomemoreefficient. The majorityof the professionalstaff
works in the Barakatheadquartersof the GS which undoubtedlyreducestheir interactionwith
tenantsin the field.

Figure 6.2: Sudan Gezira lard Managerial Structure

GeneDel py G a M

AgriultralDepuiltd FbmWadAmdto

WogonD , , ,

Uwnm&ciaiUnis
D,Spaccia (e.gseeuid)

COnwul
Fisopsm(e.g.
gnui)
(C.;
F\tMa&dgDeprmm
and Dq

55 Theauthorized
numberofpositionsis 8,077,buttheSGBpolicyhasbeento reducethestaffthroughnot
replacing
retirees.SeeTable1,AnnexI formoredetailsoncurrentSGBstaffing.

49
6.13 Tenants' Choice of Crops Still Constrained: In the past the SGB was an authoritarian
institution instructingtenants what they should grow, where they should grow it, the inputs they
should use, the management practices they should follow, and where they should sell their crop.
This approach has been considerably relaxed but SGB still requires tenants to produce cotton as
part of the five-course rotation (see Chapter 4) in accordance with a standard cropping sequence
with some options for individual crops within that sequence. Such requirements have placed
impossible pressures on many tenants since cotton is not suited to all soils and environments in
the Scheme, and cotton production involves paying SGB for the costs for land preparation and
other services. Many SGB staff have concluded that a more participative approach to the
management of the GS, including removal of the cotton production requirement,would pay high
dividends for tenants. On the other hand the SGB management has so far resisted change,
presumably because the employment of its staff and access to resources depend directly on its
intermediary role in cotton production.
6.14 Joint Accounts Changed to IndividualAccounts: Production costs incurred by the SGB
on behalf of tenants were financed from the start of the Scheme in the 1920s through a system of
joint accounts. In return for their work the tenants shared 40 percent of the profits. This was not
a satisfactory system. It provided tenants with no incentive to produce a high yield and quality
output since any effort to achieve a high return would be automatically shared with the
management of the Scheme. Not surprisingly the GS perforrned poorly and yields stagnated. In
1980, following World Bank encouragement, the individual account system was introduced
which in theory would provide incentives to tenants because they would receive all the profits
from their own farmningefforts. While the theory was correct, the profits were slim because the
tenants had no control over the costs charged by the SGB and, as was shown in Chapter 4, prices
paid to tenants for cotton are not only delayed by up to a year but are also discounted significantly
by the SGB. The individual account system is therefore not regarded as completely satisfactory
by tenants.
Serious Financial Challenges and Problems
6.15 GS Independence is a Challenging Responsibility: While there was no discussion of
privatizing the GS in 1992 when the Governmentlaunched its liberalization policy, (see Annex 2)
the most immediate implication for Gezira was that it would need to become more independent
financially. Under the government's policy the GS could no longer rely on the support of the
Bank of Sudan (the central bank) for financing its foreign exchange requirements as it had done
for many years. In future the GS would need to obtain credit from commercial banks for the
purchase of agricultural inputs. But financial needs of the Gezira were enormous and no one
commercial bank could provide the funds needed. In 1993 the Government successfully
prevailed on a number of Sudanese private banks to form a Consortium to provide loans to the
SGB. This worked until 1998 when the debts incurred by the SGB had become too large for the
Consortiumto handle and financial support for SGB slipped back on to the desks of the Ministry
of Finance and National Economy. In 1998 the Ministry provided SD502 million ($1.9 million)
to the Gezira to support its operating expenses, including fuel. In 1999 about SD 840 million
($3.3 million) was provided for the rehabilitation of infrastructure and the Ministry of Irrigation
received SD100 million ($0.4 million).
6.16 Substantial Debt Load: The deterioration in income earning capacity of the Gezira
Scheme and the resultant accumulation of debts by both the scheme and by tenants (Tables 6.1
and 6.2) resulted in a series of measures by the Governmentand the Gezira managementto secure
improved financial security for the scheme. In 1982 and again in 1992 the central Government
forgave the accumulated debts of farmers in the scheme. Table 6.2 shows that for Gezira total
liabilities have accumulated to SD8.6 billion (LS 86 billion) which is equivalent to about $34

50
million.5 6 The Gezira continues to be in financial difficulties since it is understood that it
typically has an annual operating deficit of about $1.2 million and liabilities have apparently
increased further. As a result debts remain unpaid and salary payments for GSB staff are often
deferred.
Table 6.1: Cumulative Arrears to the Sudan Gezira Board and Collection Ratios
1998/99
Crop Cumulative arrears plus Collections Ratio of
1998/1999 season costs collections a/
(SD billion) (SD billion) (percent)
Cotton 8.46 5.19 61.4
Wheat 8.46 4.19 49.6
Sorghum 2.17 1.02 47.0
Groundnuts 1.19 0.24 20.0
a/ Ratioof collections
to arrearsas of September1999
Source: Financial
Administration,SudanGeziraBoard
Note: Debtswereforgiven on twooccasions.Firstin 1981/82afterthe abolition
of thejointaccountandtheadoption
of theindividual
accountsystemandsecondin 1992/93 to markthestartoftheliberalization
policies.
Table 6.2: Gezira Scheme Liabilities, 1998/99
(SD billion)
Creditors Amount
Companies & Organizations 5.593
Contractors 1.222
Tenants 0.846
Workers(SGB employees) 0.926
Total 8.587
Source: Finance
Administration,
SudanGeziraBoard.
6.17 Coping with Debts and Keeping the Scheme Running: The failure of tenants to pay
their water rates because of widespread dissatisfaction with the irrigation service led to the non
payment by the SGB to the MOIWR for irrigation water and the operation and maintenance. This
led in turn to defaults by the SGB to contractors and a reduced rate of silt removal by the
MOIWR (see Chapter 2). Following the report of a Ministerial Committee (December 1997)
which considered urgent funding of irrigated agricultural projects the MOF provided funds
directly to a new institution called the Irrigation Water Corporation within the MOI which was
charged with operation and maintenance in return for irrigation water charges from tenants.
Chapter 2 records that this crash program worked for a few years and large quantities of silt were
removed from the canals in the Gezira as well as in other irrigation schemes for which the federal
government had a responsibility, but it could not be sustained. At the same time the SGB
attempted to settle state taxes and some of the debts to private contractors, the MOIWR and the
insurance companies through "in kind" payments of cotton, wheat, fertilizers and scrap
equipment and machinery. This was not acceptable to some creditors and also clearly an
unsustainable solution.5 7

56Usingan exchangerate of SD256=US$1.0

57The SGBmademanyeffortsover the yearsto obtainfinancialsupport. Themainsourceshavebeen: (a)
partial financingand guaranteesfrom SudanCottonCompany;(b) partial financingfrom consortiumof
CommercialBanks,particularlyfor wheatproductionand input supplyat a high servicecharge(48-60%)
or predeterminedSalamprices until 1998;(c) partialfinancingfrom advancesale of cottonseedsto local
oil mills as well as escarto; (d) suppliers'credit especiallyfor importedinputsguaranteedwith cotton

51
6.18 Demise of the Commercial Bank Consortium: While the Consortium of Commercial
Banks was able to recover its short term credit to the GS up to 1997, it ceased to provide credit in
1999 because of (a) failure of the Gezira management to repay; and (b) increased delinquency
among wheat farmers especially with the decrease in productivity during 1998/1999. The total
arrears to the Consortium is estimated at about SD 1.8 billion. It is understood that the
Consortium is taking action to recover its debts and that the Bank of Sudan has again stepped in
to provide the necessary seasonal finance.
6.19 A fundamental reason for the demise of the Consortium as a creditor was that the total
financing requirements were much more than prudent lending capacity. The Government's
decision to liberalize wheat production and marketing in 1998 requiring farmers interested in
wheat production to finance this from their own resources or credit, relieved the Consortium of a
responsibility that had created many problems. On the other hand it created pressure to establish
formal financial intermediation institutions so that tenants might save safely and obtain short term
credit to (a) finance land preparation; (b) buy improved seeds and other inputs; and (c) pay for
casual labor.
6.20 The mission found that the lack of such financial institutions, along with chronic irrigation
problems, were an important reason for the significant drop in wheat plantings during the
1999/2000 season. It is recommended that a formal study of options for credit institution be
started urgently.
6.21 Tenants still experience serious problems with their accumulated debts. The Presidential
Committee report (November 1998) stated that the "accumulated debts of farmers to all creditors
was is about SD21 billion, of which SD13.9 billion have been settled, and the remaining is about
SD7.1 billion, a debt collection rate of 66 percent." 58 Some tenants are reported to have suffered
legal prosecution as a result of their indebtedness.
6.22 Tenants are Trapped: Tenants are caught in an impossible trap. They are on the one
hand required to produce at least one crop of cotton in the standard rotation; on the other hand if
they wish to move out of farming they are by law not allowed to sell their tenancy rights. The
only possibility for them is to transfer the tenancy to a family member. It is clear that many
informal transfers (with the tacit approval of the SGB) have already taken place but numerous
current tenants have no one else to transfer tenancies to. An obvious solution is to change the law
and make the sale of tenancies (within specified size limits and under certain land use conditions)
legal. This would allow those who do not wish to farm in the Gezira to leave and also perhaps
resolve their debts. It would also allow (again within limits) for some amalgamation of tenancies
to make irrigated farming more economic because of economies of size.
6.23 A Need for Sustainable Solutions. The way out of debt is for the Gezira Board to lead a
change aimed at implementing further relaxation of control within the Scheme consistent with the
policy changes introduced by the Government in 1992. The many institutional and policy
constraints facing the Gezira should be removed and thereby stimulate the private sector to invest.
Actions that are likely to provide such a stimulus include:

warehousereceiptsand/orguaranteedfromBankof Sudan;(e) centralgovernmentbudgetsupport,eitherin

terms of direct transfers especially as a rescue operation or some specific development financing; (f)
deferred payments to Irrigation Water Corporation of the MOIWR, private contractors and Gezira farmers
with surplus earnings and other creditors.
58 Note that the Sudanesepounds used in the Presidential Committee's report have been converted to
Dinnars. It is not clear that the arrears of the Consortium of Commercial Banks (SD 1.8 billion) is
consistent with the Committee numbers on accumulated debts. These data could not be verified.

52
 (a) remove the requirement that the SGB undertakes all land preparation and the provision
of inputs for cotton with financing from the individual account;
(b) farmers should (in self contained hydraulic units and subject to a technical review) be
allowed to choose their rotations including the choice not to grow cotton;..
(c) an annual land rental (the "administration charge") should be levied according to the
value of land and should not vary according to the success of crops', it should be a flat
annual charge;
(d) irrigation water should be charged according to the volume used or on the basis of the
number of irrigations if adequate volumetric measurements are not available;
(e) tenancy rights in the GS should be tradable among Sudanese nationals;
(f) the SGB (in collaboration with the ARC) should build on its potential strengths to
provide sound technical advice and support to all farmers (tenants or sharecroppers),
assist in building institutions such as water users associations, and collect, analyze and
disseminate information (extension) on improved technologies and local commodity
markets with the objective of raising productivity.
6.24 Payment of Annual SGB Commitments: The current outflows for the SGB are
represented mainly by payment of federal and state taxes, water rates to the MOIWR, costs of
agricultural inputs, and various administrative costs including insurance, transport etc as well as
the repayment of principal and service charges to the Consortium of Commercial Banks. The
Consortium had for years paid most of the debts of the Gezira Scheme; including the bill for
agricultural inputs, cost of financing from commercial banks, suppliers' credit, inland transport of
cotton and financial settlements to the Bank of Sudan and MOF. The (SCC) continues this role,
but it is an unsustainable situation unless the profitability of the Scheme can be improved. Of
course the SCC could not play this role were it not for its unchallenged position in the export
marketing of cotton, but even its near monopoly position is no guarantee of its continued ability
to finance the deficits of the Gezira Scheme.
Cotton Marketing
6.25 Establishment of the Sudan Cotton Company: From 1970 to 1996 the Government
exerted full control over cotton marketing through the Cotton Marketing Corporation (see Box
6.2). In 1993 the Government transformed the Cotton Marketing Corporation (CMC) into a
private company (Sudan Cotton Company - SCC) registered under the 1925 Companies Act.
Within the context of the liberalization policy, the Government decided in 1993/94 to sell the
company to the Fanners' Union (71.8% of shares), the Pension Fund (14.6%) and the Farmers
Commercial Bank (13.6%). The company is now managed by a Board of Directors composed of
I1 members, 10 members representing shareholders in ratio of their holdings plus the Director
General of the SCC who is appointed by the shareholders of the company.

53
Box 6.2: Selected Issues Concerning the Cotton Marketing Corporation

Estaiset o rn t ControlledCotton Marketimg Corportion: In 1970the Government

natioand the Cotton Mat00rtig Cororaion (CMC took over the
responsibilityforall cottoexports. Fromthenon interventionsand fiancial supportfromthe Ministy of
Fi de Sud centralbank to theferally-owned irrigationschemessuchas Gezira
bteame standardpractice. Th>e CMC howeter, engagd in a num of practc suchas in pricingpolicy,
'hat weet longtermprofitabilityofite tenats. Tnhiscontu uil 01993.
Mretino Cotton uring 197-1993the Governmenthacompletover the cotton lint
exp for whichit d tei t h te. It alodecidonthsale lt to the domesfic textile
nis basedon the interational pricein US dollars,but vaXluedl iinat
anovervaled exchange rat. For
4xample,while the unifed: exchange rate was typically about LS9 per $1.0, the exchange rate used for
0f4
cotton exorswaS25 per $L* SThilsS* arin a aintaid for mayyer utl itas relaxedtofa
magno0 pecet ndthneiminte t01998/99.
i Hnc oto prodcer reeie less: in local
:uren thn tey oudhaeatUa maretbasd exchangrat andthey threfreheavilysubsdized both
twegnral bdgt and thetnationltextile industy. :;S : :0SVV00::X
MarkQetin of0 Coto xSe:SThedisriution;of cotton seed as the repnibility Softhe Ministy oXf
In0dutyanzd itt was stndr practie to Salloateseed \to Woilmisestblihedprior to 1f972at\a ratio
equivalet t thir fdesin apacty It wvas Sonlyin the earlyt19S0'stat compeition; was intrduce to
determine teclain rce*of coto seed.0Hoeer, ;this syte ws badone ad te otton see sle
was lefltto the angeet of vaiousirriation Xschemes to tdeideotonseed mark tinsrteyin
subseuent years. Giventeir fnnialdlifiuties most shme esorted 4to avacesaesto:private
fdealers. X 0S:V;a00
;a)i ;S0 f;0X; ;t000 V:

6.26 It was originally intended that one seat on the Board of the SCC be rotated among the
management of the federally owned schemes that produced cotton. This idea was abandoned
after the General Manager of the Gezira Scheme completed the first term and a dispute ensued
over the sequence and period of subsequent representation from the schemes. There are,
however, some other more important questions regarding the operation of the SCC. They are:
(a) Do the Farmers' Union members on the Board of the Sudan C:ottonCompany represent
the interests of tenants in the Gezira; this is not an easy matter to judge, but Farmers
Union leaders assured the joint team that they do represent Gezira tenants;
(b) Is it appropriate for the SCC to place a heavy emphasis on the financing and the
provision of guarantees for input supply for the Gezira, and has this activity reduced
the efficiency of cotton marketing; and
(c) Given the weak financial position of the Gezira Scheme and its dependence again on
the Ministry of Finance and National Economy for funding, to what extent does the
Government influence cotton marketing strategy at the SCC.

Options for Change ini the Gezira Scheme - Medium to Long Term
6.27 Gezira's Problems can be Successfully Addressed: While this report has drawn attention
to many positive aspects of the Gezira Scheme, it has also highlighted a number of problems. On
the negative side, it is at present obviously not a profitable investment from either the national or
the tenants point of view, and it is not providing the growth in employment that is so necessary
for poverty reduction. On the positive side, this report concludes that Gezira's problems can be

54
successfully addressed. There are substantial opportunities to make the Gezira Scheme a source
of considerable revenue for Sudan if efficiency and productivity can be raised and if the
combined energies of the public and private sector can be harnessed.
6.28 A Vision of the Future: Any consideration of future options needs to start with consensus
on a vision about the future structure and operation of the GS. What will the Scheme look like
and how will it work?
The vision for the Gezira Scheme in this report is that it becomes a vibrant center Of
increased economic and social activity where the private sector has invested and
established enterprises to meet the demands for services from tenants. It is also
envisaged that tenants have negotiable titles to their land and a strong incentive to
produce efficiently and profitably working together in groups to maximize the use of
the available land and water resources. Finally the vision is of an independent,
privately managed Gezira Authority operating at a profit that, because of its policy of
decentralizing authority to competent farmer groups, becomes responsible (in
collaboration with other agencies such as the Ministry of Irrigation and Water
Resources and the Agricultural Research Corporation)for the efficient delivery of
irrigation, extension and market information services to tenants on an environmentally
sustainable basis, and also providing leadership in ensuring the provision of social
services to all members of the Gezira community.
6.29 The following paragraphs outline briefly some options for moving forward to establishing
a sustainable development path for the Gezira. These options are based on a number of principles
that have been analyzed in recent work in the World Bank on the reform of public institutions.'9
The essential principles used here were : (a) a reduction in the role of government and hence an
alteration in the balance of power and responsibility between the government and the private
sector; (b) decentralization of authority within the SGB; (c) divestment of some of the functions
of the SGB; and (d) a progressive sequencing of institutional changes within SGB over time.
6.30 The options for change, some of which make up parts of a sequence of change, are
described in more detail in Table 6.3. They were studied and debated by the joint team; while
they are not the only options, they were judged to be the most relevant. The final solution may be
a combination of one or more of the options outlined. They should be and implemented in a
deliberate participatory process with the close involvement of all substantial stakeholders.

CONCLUSIONS

6.31 Option A: Presidential Committee Proposals: The Committee recommended the

conversion of the GS into a joint stock company. The SGB would be replaced by a company
management. Many organizational structures within the company would be possible including:
* The sub-division of the whole-scheme into smaller companies, but the proposed joint stock
company would retain the responsibility for overall water management.
* Assets currently owned by the central Government would become its share in the proposed
company. Other parties (including farmers, commercial banks, project employees, citizens
and private investors) would be invited to participate in the company.

59 The principlesused here have in part been drawnfromAddressingthe Challengeof ReformingPublic

Institutionsand StrengtheningGovernance,preparedby the PublicSectorGroupof the PREMNetwork,
analysisof processesfor institutionalforchangesee Toolkits
internaldraft,July 1999.For a comprehensive
for PrivateParticipationin Waterand Sanitation,WorldBank,August 1997.

55
* The central Government, and the original land owners, who collectively hold title to about 40
percent of the whole area, would retain ownership of that land.
* The report envisaged that a private Agricultural Mechanization Company and an Engineering
Services Company would be formed. It was also suggested that the Sudan Cotton Company
(SCC) while continuing to be responsible for cotton marketing should take over responsibility
for operating the Gezira ginneries.
* The Committee also recommended that tenants should be allowed to buy and sell tenancy
rights within certain constraints related to size of farm and environmental concerns.
* Tenants would also be given increased flexibility in their choice of crops grown.
* The Farmers' Union opposed this option because it may jeopardize the security of their
members. The proposal has also been subject to political attack because of the possibility
that about half of the irrigated area in Sudan could come under foreign management.
* The government has so far not acted on most of the recommendations in this report except the
transfer of water management from minor irrigation canals from the MOI to the SGB and the
establishment of a ministerial committee to the land rental paid to original land holders in the
Gezira Scheme area. That committee has completed its report.
* The joint team's conclusion was that:

m While Option A would be beneficial because it would result in a clean break from the
immediate past and remove the Government as the primary institution responsible for the
Scheme, there were at least three drawbacks which led the team to conclude that this option
was not likely to be practical. First, assuming an accurate reserve price for the Scheme can
be established, it is unlikely that adequate capital would be available from within Sudan to
finance the purchase. Therefore, finding a buyer (or group of buyers) may require
considerable foreign financing, involve drawn-out negotiations probably over a number of
years during which the Scheme would continue to deteriorate. Second, negotiations would
undoubtedly create considerable uncertainty among tenants and the rest of the Gezira
community regarding their future rights which could disrupt those negotiations. Third,
failure so far with the privatization of the White and Blue Nile Pump Scheme does not
provide confidence that a similar strategy would be successful in the Gezira. Finally, while
negotiations would need to include the question of water rights from the Nile, it was not clear
what environmental safeguards (if any) for water and land use within the Scheme could be
negotiated as part of the sale.
6.32 Option B: Transfer Major Functions of the SGB to the Private Sector: This option
suggests that with a reduced staffing, targeted training and forceful leadership, the SGB could
become a more effective institution by withdrawing some of its controls and handing
responsibility to the private sector for many of its functions. The principal changes would be:
* The opportunity (by law) for tenants to buy and sell tenancies, and abolition of a mandatory
individual account for cotton with the SGB.
* Freedom of choice for farmers (as a group) to grow any crop within the constraints of
technology and reasonable agricultural practice as agreed by a proposed Crop Choice
Committee.
* MOIWR would continue to be responsible for delivering irrigation water to the Gezira
Scheme where the SGB would be responsible for irrigation water distribution, operation and
management of canals, and cost recovery.

56
* It is assumed that private traders would start to take over the sale of agricultural inputs and
services. The SGB could have a transitional role in selling services such as plowing and
inputs in competition with the private sector to tenants who expressed their demand to the
SGB. Obviously in the short run the SGB is likely to remain the main supplier of services,
inputs and credit, but it would need to do so without government subsidy in competition with
private commercial providers. In time it is anticipated that the private sector would
increasingly take over the role of the SGB in the provision of services, inputs and credit.
* The main role for the SGB would be the management and distribution of irrigation water
below the minors, various support services such as extension and market intelligence for
tenants, and the individual account system for tenants who have a need for it and may use it
basically as a credit system.
* It is anticipated that under this option the ginneries would be offered for sale by public tender
-not immediately but a few years into the implementation of this option so that buyers can
better as to gauge the long term demand for ginning services.
* SCC would continue to be the preferred marketing institution for cotton, although private
trading in cotton by tenants and the SGB would be allowed.
* The Gezira Board of Directors would be expected to provide strong leadership to facilitate
the implementation of this option. The Board should be augmented by the addition of a
senior representative from the Ministry of Finance and National Economy and a lawyer. It
was suggested that the Gezira Board of Directors be supported by a Management Assistance
Team (MAT) which would provide expert support to the deliberations of the directors and
provide assistance in respect of the implementationof the decisions of directors by the SGB.
e There was broad support among all stakeholders for this option.
* The joint team's conclusion was that:

* This option represents an appropriate first step towards a process of institutional change in
the Gezira Scheme.
6.33 Option C: Transfer of Major Functions of the SGB to the Private Sector and
Decentralize Water Management: This option would be the same as above but with the
establishment of Water User Groups (WUG) for a block or groups of blocks whichever is
most efficient.
* WUGs (managed by farmers or a contract management team) would be independent
hydraulic units that would pay for irrigation water in bulk at their boundaries such as the
boundary of a block which is typically 25,000 hectares. There would be a logical incentive
for farmers within a WUG to manage and maintain the tertiary irrigation systems efficiently
in order to get most benefit from the purchased water. Their organizational survival will
depend on their financial viability, which would only be achieved by recovering operation
and maintenance costs from water users. The long-term productivity of irrigated agriculture
within a WUG can be assured through high quality operation and maintenance and sound
water management performance by the members of the WUG.
* The Gezira Board of Directors, augmented as suggested in option B, would again be expected
to provide strong leadership to facilitate the implementation of this option. As with Option B,
it is suggested that the Gezira Board of Directors be supported by a Management Assistance
Team (MAT) which would provide expert support to the deliberations of the directors and
provide assistance in respect of the implementation of the decisions of directors by the SGB.

57
* The joint team's conclusion was that:
* This option is an appropriate second step towards a process of institutional change in the
Gezira Scheme.
6.34 Option D: Replace the Gezira Board Directors with a Contract Management Team:
Under this option the Gezira Board of Directors would be disbanded. It would be replaced by a
management team chosen through international competitive bidding.
* The team or company would operate the Gezira under contract to the Government of Sudan
which would supervise its activities with the aid of various performance indicators.
* Some of the SGB staff may remain as employees but this would be a decision by the contract
management team.
* The contract management team would be paid a fee for work and possibly a share of any
profits, but these aspects would be subject to negotiation with the Government.
* The joint team's conclusion was that:

- This option would remove the Scheme almost completely from the public sector. On the
other hand it will be very difficult in the short run for the contract management team to
receive the firm assurances it needs from Government on first, its powers to make
institutional changes, and second, the allocation of funds from the central government for and
capital improvements within the Scheme.
Short Term Actions
6.35 The options described above provide possible medium to long run solutions, even though
their implementation could start relatively quickly. Nevertheless, it is essential to improve the
efficiency of operation of the GS as soon as possible. Efficiency in the GS can certainly be
improved quickly by taking a number of short term actions which would change the incentive for
tenants and the SGB and lead to almost immediate improvements in performance and income
flows. There also appears to be widespread support for these actions among the Farmers' Union,
the Government and administrators. While relevant to all options, they would become part of
Options B and C presented above. They are as follows:
* Fixed Annual Administrative Charge per Feddan: Establish a fixed annual administrative
charge for the privilege of using irrigated land in the Gezira according to its assessed quality
but regardless of the crops grown or the outcome of these crops. Such a charge (equivalent to
an annual land rental) means that producers would have an incentive to use the land to its
maximum productivity and the SGB would receive a fixed and certain revenue for its services
which establishes its annual budget limit. All current arrangements for the arbitration of the
administrative fee that should be paid by tenants should be disbanded. The determination of
the total revenue from the administrative charge should be made by an independent body (for
example a Gezira Land, Water and Cotton Rate Committee) constituted by the Ministry of
Finance and National Economy but chaired by an independent person from outside the
Government. The Ministry should require the Committee to report to it by a fixed date each
year. Planning for this action should be started immediately with implementation of a fixed
annual administrative charge at the start of the 2001/2002 fiscal year.
* Fixed Irrigation Water Charge per Feddan: Establish irrigation charges (which would
vary according to the known quality of water deliveries and soil type) based preferably on the
amount of water used annually per feddan, or if metering is not possible a fixed rate for each
crop on the basis of the anticipated water delivery schedule irrespective of the crop results,

58
 but discounted for shortfalls in water delivery as verified by the SGB. Such a charging
arrangement would mean that tenants pay for water used and they are responsible for the
outcome of the crop. It also means that shortfalls in the delivery of water will result in less
revenue for the Ministry of Irrigation and Water Resources or the SGB depending on who is
responsible. The determination of the water charge should also be made by the' Gezira Land,
Water and Cotton Rate Committee mentioned above. Planning for this action should be
started immediately with implementation of a fixed irrigation charge at the start of the
2001/2002 fiscal year.
* Formalize the Sale of Tenancies: Prepare immediately the legal instruments that would
allow tenants in the Gezira or any other Sudanese national to buy and sell tenancy rights in
the GS subject to some simple conditions on maximum and minimum tenancy size. The
target date for change in the legal instruments and implementation of this strategy should be
no later than January 1, 2002.
* Establish Pilots to Explore the Effectiveness of Water User Groups: Take steps to
establish immediately two Water User Groups in different blocks of the GS in areas where
the delivery and distribution of irrigation water is efficient, where the water volumes can be
reasonably well measured, and where tenant groups are strongly interested in participating in
the pilot.
* Freedom of Crop Choice:60 Offer groups of farmers in a specified pilot area which has
reliable irrigation water supply and tenancies in a contiguous "hydraulic unit" to exercise
their choice of crop rotation for a period of a year starting with the 2000/2001 cotton season.
The group's choice should be transmitted by a specified date in writing to a body called the
Gezira Crop Choice Committee. The Ministry of Agriculture and Forests will establish this
Commission which should be chaired by a person outside the Government and have
representatives from the SGB, the Ministry of Irrigation and Water Resources, Ministry of
Agriculture and Forests, Agricultural Research Corporation, and the Farmers' Union. The
SGB would provide the secretariat for this Committee. The Committee (which would replace
the current Cotton Production Committee) will have the responsibility of assessing whether
the preferences of farmer groups can be met and if not what changes in crop rotations for
various groups would need to be made. An announcement by the Committee on approved
crop choices for the groups would need to be made by a date in the year which would allow
land preparation, planting and irrigation to proceed at peak efficiency. The pilot should start
immediately, but the start to the Gezira-wide application of this action should start before the
beginning of the 2001/2002 cotton season. It is anticipated that after a year or two this
process will become routine as farmer groups settle into their preferred rotations.
* Payment of Cash on Delivery for Cotton at Ginneries: Initiate for the next cotton harvest a
cash payment of fixed proportion (no less than 50 percent) of the expected "farmgate" price
for cotton (according to grade) when cotton is delivered to ginneries. Of course those tenants
who have received crop financing would have this credit immediately debited against their
SGB debts. Subsequent payments should be determined according to a contract between the
tenant and the SCC. The ginneries could act on behalf of the SCC in respect of the payments
and will be responsible for grading and weighing of the seed cotton. The proposed Gezira

60Duringthe week that this reportwas beingcompletedit was heardthat the Ministerof Agricultureand
Forests had announced that tenants in the Gezira would no longer be required to grow cotton. No further
detailswere available.It should also be noted that FAO has recentlyapprovedTechnicalCooperation
Program(TCP) supportto Sudancoveringthe piloting of raisingproductivitythroughbroadeningfarmer's
choiceon farm system and water managementwhich includessupport for an agro-ecologicalzonation
study which would provide information on the suitability of the land for various crops.

59
 Land, Water and Cotton Rate Committee would announce the percent advance payment at the
same time as the Gezira Crop Choice Committee makes its decisions before the start of the
season. This action implies also that farmers need not agree that the SGB provides the land
preparation and other services for cotton production. The cash advance payment should start
with the 2001 seed cotton deliveries.
* Study of Institutional Development for Formal Credit: A study should be mounted as
soon as possible to assess the possible forms of credit institutions that could be formed to
collect savings and to provide seasonal credit to tenants as an alternative to the SGB
* Funding of Agricultural Research: Ensure the adequate and sustained funding of the
Agricultural Research Corporation by the central government to ensure the continuation of a
strong program of research leading to improvements in the productivity of irrigated crops.

60
 Table 6.3: Evaluation of Four Institutional Options for the Future Management of the Gezira Scheme
Options Advantages Disadvantages
A. MinisterialCommitteeProposal
* ConvertSGBintoa commonstock Managerialandfinancial Politicalconcernabout"sellingthe
companywith governmentas majorbut responsibilityfor the GeziraScheme farm"to foreignersmayultimately
lessthan50 % shareholder wouldbe removedfromthe slowand blockany sale.
oirrigation constraineddecisionmaking
MOIWRstill responsibleforcanals Governmentcorporationandresult in Availabilityof enoughcapitalto
waterdeliveryto the minorcanals a more efficientschemeresultingin makethe purchasewithfundsfrom
. Legalpositionof farmerswouldneed higherincomesforall those withinSudanis doubtful.Hence
to be determinedby company,but involved. part foreignownershipis inevitable
couldassumethat tenancy and maybe seenby someas counter
arrangementswouldremainthe same in Pressurewouldbe placedon farmers to nationalinterest.
the shortterm (be theytenantsor freeholders)to
becomemoreefficientin orderto Establishinga reservepriceforthe
* SudanCottonCompanywouldtake meet marketratesfor their leasesand GeziraSchemewillbe difficult.
over the ginneries serviceswhichtheyare eithersoldby Withouta reserve(withweak
the new"GeziraCompany"or buy demand)it maybe sold at
fromthe openmarket. substantiallylessthan fairmarket
value.
Pressurewouldalsobe placedonthe
MOIWRandthe new "Gezira Privatesectormanagementmaynot
Company"to be efficientin water be adequatelyfocusedon social
deliveryat the minorcanals. issuesfacingpeoplein the Scheme
creatingresentmentandreduced
The new"GeziraCompany"would efficiency.
needto finda wayto efficiently
handlewaterdistributionandthe Tenantresistanceto a salewouldbe
operationandmaintenanceof the high becauseof the uncertaintiesit
minor/tertiarycanalsso as to retain wouldbringto theirlife andtheir
the supportof the landtenants. politicalcapacityto blocksale.

Thenew "GeziraCompany"would Oppositionby tenantsmaydelay

alsoneedto findwaysof improving anddisruptthe biddingprocessand
extensionof researchbutcouldre- createmanyuncertaintiesand loss
invigoratethe research/extension of production
linkages.
The disappointingexperienceof
privatizationof the WhiteandBlue
Nile IrrigationSchemesdoesnot
bode wellfor privatizationof the
Geziraalthoughthe circumstances
are different.

61
 Options Advantages Disadvantages

B. SGB Continues but Land Tenure

Policy Changed, Abolition of
Account System, Full Flexibility for
Farmers' Choice of Production
Rotations, Annual Land Rental,
Payment for Irrigation Water
According to Use
* Land tenure policy is changed so as to Increases market-basedcompetition SGB management and staff may not
allow buying and selling of tenancies for the use of irrigated land compared be able to efficiently manage their
within specific tenancy size limits with historical rights and will new role. For example the
supervisedby the SGB. Administrative increase pressures on raising the important agricultural extension role
charge replace by annual land rental efficiency of land use may not reach a high enough
rates established by independentrental standard to advise tenants of new
board appointed by the Ministry of SGB staffing would need to be production techniques and market
Finance and National Economy reduced, but it would still maintain information. The SGB may also not
control over the broad land use in the be up to the task of irrigation water
* SGB remains responsible for irrigation Scheme so as to safeguard long term operation and management as well
water distribution, operation and land productivity and environmental as cost recovery.
maintenance in minor and tertiary stability.
canals, cotton processing and Some farmers may not gain access
marketing, but discontinues automatic The cost of most services will be to credit to purchase services and
land preparation and financing of market determined rather than inputs and consequently cotton and
inputs through individual accounts determined by the top heavy cost other production will decline.
(unless contracted to do so by the structure of the SGB.
tenant). Inadequate competition in the
Farmers are likely to have a choice of market for goods and services (e.g.
* Annual determination of cotton creditor rather than be forced to use agricultural inputs) may result in
production allocations discontinued and the services of the SGB. This higher costs for tenants than
replaced by group choices by farmers competition, in which the SGB could necessary.
subject to technical and environmental play a part, would make credit
constraints. markets more efficient. The efficiency of cotton processing
and marketing (still under SGB
* Aerial spraying of cotton to be Processing facilities such as ginneries control) may not improve and wipe
discontinued may increase their output and out efficiency gains in production.
profitability if cotton and other crops
* MOIWR still responsible for irrigation become more popular and production Rotations adopted by farmers may
water delivery to the minor canals increases. be environmentally too exploitive
and lower the long term
* SGB may continue to provide credit productivity of land.
arrangements for tenants to purchase Control of cotton insects without
inputs and other services using liens on ContrC cotralized without
tenancies or output as collateral. Other SGB/ARC centralizedmanagement
credit institutions will be encouraged to and aerial spraying may not be
become involved. In the short term the environmentally sound and also
variable among farms with cross
* Ministry of Finance may need to contamination leading to disputes
provide guarantees in order for the which may spill over into non
SGB to gain access to sufficient finance repayment of credit because of
for it to carry out its responsibilities. production losses.

* Private traders take over agricultural If cotton production is substantially

input marketing, and are encouraged to reduced as a result of farmers' free
enter marketing for non cotton crops. choice some ginneries may become
uneconomic and close down.

62
 Options Advantages Disadvantages
* Sudan Cotton Companyremains as
cotton marketing body, but on The SGB may not gain access to
condition that advancepayment paid sufficient financial resources to
for seed cotton on delivery and testing meet its commitments under this
at ginneries. SCC (in collaboration option.
with the SGB) will no longer hold
cotton as collateral to finance the
import of production inputs for cotton.

* Gezira Board of Directors expected to

provide strong leadershipto implement
this option. It should also introduce
rigorous training program for SGB staff l
C. Same as Option B but with
DecentralizedWater Management
usingWater Users Groups or Similar
Groups
* Establish Water Users Associations WUGs (perhaps based on existing It may be impossible to develop the
(WUGs) at the block level village councils) provide a cohesive financial organization for strong
institution for irrigation water WUGs and this may lead to weak
* SGB would undertake responsibility for managementthe discussion of management and inadequate
the development of WUG as community needs and contributions, technical capacity to handle water
sustainable institutions, and thereby also lead to management as well as canal and
strengthening of community interest control structure operation and
* The MOIWR would undertake to in the overall sustained development maintenance.
provide a planned quantity of irrigation of the GS .
water on a bulk basis to the WUGs at a Water charges may not be
fixed charge to be paid according to an Transferring irrigation management rigorously collected from farmers or
agreed schedule during the year. to WUGswould reduce corruption may arise leading to the
Payment would also be agreed in SGB/MOIWRcosts of irrigation inability of WUGs to pay for
advance in a contract. The WUGs then services substantially irrigation water supply by the MOI
re-sell the water to their members and leading to the complete breakdown
also take responsibility for the WUGs are likely to operate and of the WUG concept.
distribution of the water to the various maintain the irrigation systems under Other disadvantagesas for Option B
farms, and maintain the canals. their control at a more cost-effective
manner and hence they increasethe
chances of irrigation cost recovery.

WUGs would ensure water

distribution is efficient and that water
is effectively used.

Other advantages as for Option B

D. Gezira Board of Directors
Disbanded and Replaced by Contract
ManagementTeam Responsible to
Minister of Finance and National This option would remove the public Tenant contracts would probably
Economy sector from the management of the receive a major overhaul and as a
* Appoint contract management team Scheme and could make its operation result tenants may not be able or
chosen by international competitive more efficient assumingthere are prepared to comply with a new
bidding. incentive provisions in the management approach.

* Details of tenant responsibilities and management contract.

63
 Options Advantages Disadvantages
options to be determined by The management team may not turn
managementteam The GS may generate more revenue out to be competent or able to
than any of the other options integrate its style with Sudanese
. Role and retention of SGB staff to be Improved technologies, and modem rural culture to be successful.
determined by managementteam management systems and approaches
are likely to be introduced Access to capital from the
* Government to make a commitment to A sound Government/private sector government for improvements to the
capital budgets for improvementsto partnership could be a strong force GS may be blocked or delayed
Gezira infrastructure for rolling five for the stability and sustained despite previous agreements with
year periods, on condition of operationof the GS because of the the Ministry of Finance resulting in
satisfactory performance by mutual interest in achieving stability serious implementationproblems in
management team. over the long tern the GS and loss of efficiency.

The cost of the management

contract itself in the end may be too
heavy for the GS to carry unless
there is a resurgence of yields and
production

Problems could arise between the

management team and the MOIWR
on costs for bulk water and its
delivery leading to water shortages
or delays in water supplies.

64
 ANNEXES

ANNEX 1: SUMMARY OF THE REPORT BY THE PRESIDENTIAL COMMITTEE FOR

IRRIGATED SCHEMES: RECOMMENDATIONS, JUSTIFICATIONS, ACTIONS
TAKEN AND REMARKS BY MISSION.............................................................................. 6
ANNEX 2: MACROECONOMIC DEVELOPMENTS ....................................................................... 76
ANNEX 3: INFRASTRUCTUREAND MANAGEMENTOF THE GEZIRA IRRIGATION.......... .............. 81
ANNEX 4: ASSUMPTIONSAND DATA FOR ECONOMIC ANALYSIS.................................. 95
5.................
ANNEX 5: SOCIAL DEVELOPMENTISSUE.............................................................................. 108

65
 Annex 1

ANNEX 1:SUMMARY OF THE REPORT BY THE PRESIDENTIAL COMMITTEE FOR IRRIGATEDSCHEMES:

RECOMMENDATIONS, JUSTIFICATIONS, ACTIONS TAKEN AND REMARKS BY MISSION

Recommendations Justifications Actions Taken Mission's Remarks

A Institutional Reform * Gezira was developed as a profit- * The Council of Ministers discussed * There are numerous obstacles and
I The establishment of a joint stock making business and not a and adopted in principle the practical limitation to the proposal.
company (based on sale of shares to subsistence scheme. recommendation for privatization; * Serious resistance from farmers,
the public). The State share in the * The existing management approach but serious steps for who are keen to continue having
proposed company would be the gives the impressionto farmers that implementation are yet to be taken. access to public funds for periodic
asset currently owned by the state. the Gezira scheme is indeed a Any implementation is not likely in rehabilitation.
Other parties including farmers, project aimed at providing farmers the immediate future. * The public and particularly the
scheme employees provide sector with a subsistence income elites and employees, is not fully
entrepreneurs and commercial * For prolonged period, the Gezira convinced of the feasibility of the
banks would be invited to purchase Scheme was managed by a public proposal, and some of the public is
shares and participate in the corporation under the control of the suspicious of the motives behind
company. civil service bureaucracy, which is the privatization proposed.
not suitable for a profit-making * The estimated marked value of The
enterprise. Gezira Scheme is high ($ 4 to $ 8
The financing requirements for billion) and would severely limit
structural reforms, rehabilitation effective private participation i.e.
and investments are vast and
beyond the reach of Government, it
can only be obtained by attracting
private investments. The existing
institutional set up is not conducive
for donor support or private
finance.
* To cope with the liberalization and
privatization policy of the
Government and enhance
competitionand competitiveness.
2. The MOIWR or its agencies shall * The structures are national The Irrigation Water MOF remained skeptical about
manage the major irrigation property. Corporation responsible for re-engagement in fiancing
structure down to the inlets of the p rcorportion freng e .resosible
in fianin
minor canal. Their operation is linked to the collection of water rates and O&M of the irrigation system
Nile water resources. financing of O&M, including The consortium of Commercial
* . desilting responsibility was Banks, which contributed to
Concentration of transferred to the MOIWR. financing the cost of production,

66
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

technical expertise is necessary The IWC has since become including water costs (rates)
to efficiently operate and bankrupt and has dissolved. Its during the period 1992-1998, for
manage a complex system. functions have been taken over all practical purposes stopped
Only the Government can by the Sudan Gezira Board. outstanding debt when reached
provide the necessary financial * Ministry of Finance reluctantly of about LS 18 billion.
resources to run a major assumed the financing role and
irrigation system. provided funds to the MOIWR
for desilting.
* Private and State owned
companies moved in under
ontract to participate in
desilting and O&M of the
irrigation system.

3. The proposed company shall The ultimate objective is to * The Gezira Scheme * MOF provided significant
manage the irrigation system increase the participation of the management assumed the financing for minor canals,
(including operation and farmer in the management of responsibility of irrigation which hold 65% of the
maintenance) from the inlets of the water at field level. water O&M from the inlet of accumulated silt.
minor canals to the field, in wateroatafieldtlevel.
cooperation with the MOIWR. Application of water at field the mior canals to the field. The Gezira management has no
level directly affects crop * A new department of irrigation intention of involving the
productivity and total (DOI) created within the SGB. farmers in the operation of
production. irrigation systems.
* Within the proposed company, * However, the mission witnessed
the future development of the during field visits considerable
extension service on water use joint action by tenants farmers to
would be the responsibility of manage and improve the flow of
the agricultural staff. water in the canals.

4. Involving farmers in decisions * Only through increased * Stiff resistance to this proposal * Evidence from worldwide
related to annual agricultural participation of farmers in from the SGB to farmers' experience suggests that
production (i.e. crop production agricultural production participation in water participation of farmnersin water
choices) and irrigation decisions and effective field management. No action taken management is critical for
management. application of water can to date. efficient use of the resource,

67
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

productivitybe increased. reduces the cost of O&M, and
enhances farmers' satisfaction.
. enterprises
5. Establishmentof various Enterprises can be operated on * The Gezira Scheme attempted * The enterprises are yet to be
as joint stock companies. commercialbasis to operate these enterprises on established as autonomous
* Enterprises can be made commercial basis. managerial and financial units.
attractive to private investors * No serious steps, legal, * These enterprises are still under
* Private entrepreneurs have administrative or financial, the direct control of the General
experience with these kinds of have been taken for the Manager of the SGB; their
operations in other agricultural establishment of the proposed operations are neither
areas. companies. independent nor strictly based
on commercial business
principles. Their financing is
entirely controlled by the Gezira
Board of Directors.
The supervision of private
contractors is entrusted to these
enterprises leading to confusion
in functions and to conflict of
interest. In fact much
supervision is not performed in a
professional manner.
While major civil works such as
buildings should be done
through private contractors, non-
commercial enterprises could
undertake maintenance as well
as supervision of private civil
contractors.

6. Creation of special department to * The demand for the GLR A special administration for * The GLR is characterized by
operate the Gezira Light Railway service is limited to the GLR already exists. The SGB high levels of fixed assets.
(GLR). this company could form a transportation of cotton produce claims that it functions on Capital stock such as railway
partnership with the Sudan Railway and of inputs, especially during business principles, but its . s
Authority, if possible. the rainy season. Consequently finances are under the control tracks, locomotives, spare parts,
it is difficult to establish a of the Board. No further action workshops are depreciating rapidly.
market oriented, private has been taken. * The quality of the SGB work
company. force has been seriously and

68
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

* Technical support from the negativelyaffected by the staff
Sudan Railway Authoritymay reductionpolicy since 1990.
be necessary. GLR is facing serious
The parentcompanymayuse its competition from the owner
resources to rehabilitate the
GLR,track,andlocomotives. GLR track services are
negatively affected by the
frequentbreachof canals due to
siltation and malpractice by
farmers and lack of adequate
drainage.
7. Geziracommunicationsystemto be To operate the communication * Gezira Board transformed the * The systemis likelyto become
coordinated and managed by a systemon commercialbasis. system from "free" service technically obsolete and
specialized communication administeredby a unit to a therefore, it is necessary to
capacity o cover most ofthe partially commercial system integrate it with a private
territoryof Sudan generating revenue; but still companythat has the capacity
territory of Sudan. SGB receivesfree services. to investin its renewal.
Gezira Scheme is involved in * The GeziraBoarddoes not have
discussions to integrate its the resources to provide spare
operationswith SUDATEL. parts, especially since the
supplier company has a
commitment only until year
2003 for the provisionof spare
parts at cost.
B. Economic& FinancialPolicies * It is theoreticallyan equitable * The system is in place, but * The negative aspects of the
1. Production Relations: The system in which each farmer nothingdone so far to reduceor individual account system are a
committee emphasized the should receive the return from eliminatethe negative aspects product of poor implementationof
suitability of the individual his or her investments. of the individual account the system, and could be
account-system provided the
negative effects are reduced or Leadsto more efficientresource the SGB to deduct all its costs summarizedas follow-
neutralized. use. from farmers cotton retums individual basis, and separate
* Results in higher productivity without any audit of the for each crop, but all costs
per unit of input. justificationof those costs. (regardless of crop) are still
* The Government appointed a deductedfrom the cotton crop,
committee to reexamine the returns creating a major
production relations and disincentive.
- Farmersare supposedto be paid

69
 Annex I

Recommendations Justifications Actions Taken Mission's Remarks

financialrelations between the on the receipt of cotton at the
tenants and the SGB. The ginninggates,but paymentsare
committeeis activelyreviewing usually delayed for about 18
the relations with particular months.
focus on the high indebtedness - Given the precarious financial
amongfarmers. positionof thc GeziraSchemeit
frequentlyfails to pay farmers
who have surpluses.The SGB
also fails frequentlyto pay the
water rates collected from
proceedsof cottonto MOIWR..
- Farmersare supposedto receive
remunerative prices for their
produce, but taxes remained
high, and until recently cotton
export proceedswere valued at
a very high official exchange
rate of Sudanesecurrencyto the
US dollar.
- Irrigation water availability is
jeopardized by a dilapidated
irrigationnetwork,affectingall
crops,particularlycotton.
- Individualaccount should have
encouraged private initiative,
but farmers are mnarginalizedin
decision-makingin respect of
crop choice, varieties, water
applicationand other inputsand
costof production.
- All kinds of extensionservices
on crops, water application,
competitive enterprises (e.g.
livestock)are lacking.
- For the system to be more
effective,the currentpracticeof
deductingall costs (particularly
water rates) from the cotton
crop should be immediately

70
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

stopped.
- Farmers should have greater
choice, whenever technically
possible, in crop selection and
in waterapplication.
An effective credit system
should be devised to (a)
increasefarmerscontributionin
farming decisions and (b)
create a direct link between
farmers and financing
institution i.e., the present
approach of project level
financingshould ultimatelybe
dismantled,except for reasons
of bulk purchase.

2. Water Charge Levels and Farmers should not pay for To increase physical efficiency I The physicaldeliveryof water is
Collection:Water chargesfor each inefficientwaterdelivery. of water delivery, a 3-year not sufficientfor efficientwater
crop should be determinedon the * If waterchargesfor all cropsare rehabilitation (desilting) use, andthere is no substitutefor
basis of efficient water use and deducted from the cotton program is currently under activeparticipationof farmersin
collectedfrom the proceedsof each proceeds, then incentives for implementation fnanced by watermanagementat field level.
crop, not only from cotton. To cotton production are FederalGovernment(MOF). * Farmers should receive
ensurethe collectionfromall crops, effectivelyreduced. * The responsibility of water adequatewaterat field level,and
farmers should pay the water management in the upper in case the Gezira Board failed
chargesfor othercropsin advance. reaches of the system (Sennar to supplythe necessarywater in
dam, structure,main and major time, farmers should receive
canals to the inletsof the minor adequatecompensation.
canals) remains with MOIWR, * Farmersshould pay water rates
while from the inlet of the in full and on time. A systemof
minor canals to the farmers water rates collection per crop
fields managed by the SGB. could ;be developed in
* The MOIWR is financed connection with farners' field
directly from the Federal level organization for water
GovernmentBudget. management. Alternatively a
private system for collectionof
waterratescouldbe adopted.

71
 Annex !

Recommendations Justifications Actions Taken Mission's Remarks

The producers should be
represented by their field level
production committees (not by a
highly politicized Union) and
the SGB should assume the
responsibility (or at least a major
role) in cotton sales.
3. Cotton Marketing and Sale: The SCC in many respects
Committee emphasizes the need for res S a mang rd,
consolidating the body that markets r em esamring bo
cotton abroad, and the participation * Participation of the proposed which were historically used by
of Gezira (company) in the process Gezira company and grassroots * The SCC is under the control of governments to tax farmers
of cotton marketing. "real" farmers' organizations the Farmers Union. heavily, to control the foreign
The SCC should be responsible for considered essential for No actions taken on mostf exchange earnings and deplete
the ginning factories as well as transparency and confidence in these recommendations. the capital stock of producing
sorting, grading and transportation cotton marketing. units.
of cotton. * These functions are seen as * The Committee subsequently * Producing units marketing their
The SCC Should become important marketing services to warned the Government of the cotton on a competitive basis
responsible for sale of all cotton ensure quality of cotton and risk thatcotton marketing could should allocate adequate foreign
derivatives: lint, seed and escarto. enhance confidence of foreign become highly monopolistic exchange from the proceeds of
The SCC should concentrate on buyers. non-transparent and tax farmers cotton to meet the importation of
cotton sales and be detached from The ginning facilities could be heavily. Consequently, the inputs (fertilizers, insecticides,
the financingof production inputs. * pThe asfares held be Committee proposed the pesticides,jute sack; etc).
The SCC should not resort to capitalized as shares held by the introduction of private *
prematue salef cotto tsort the Gezira Company in the SCC, competition and more active No deductions from cotton
foreign currency requirements ofthe and therefore Gezira becomes participation of farmers in proceeds for financing other
Government (and 1 or the Gezira qualified to participate in cotton cotton marketing. crops.
Scheme) at the expense of marketing. No sale of cotton derivatives
remunerative cotton prices to the without transparent and
producers. competitive bidding. There are
experiences of selling cotton
seed (sometimes forward sales at
quantities beyond expected
output) directly for settling debts
or for meeting local tax
obligations, or meeting
immediate financing needs.
4. Land Tenure Issues * Without immediate action to * A Committee was formed under In addition, it is necessary to
A decree should be issued to renew legalize the Government right to the chairmanship of the State create a competitive market for

72
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

the duration of the expropriation of access the private land, there Minister for Agriculture. Its land; such exchange of land
the private land in Gezira Scheme. will be a legal flaw. main task was to determine a among private owners is likely
To amend the rental rates for land * For investors to come forward just land rental rate, and grant to consolidate land, inject new
leased as well as the law, a and participate in the the private land owners their capital, and improve economies
technical committee should capitalization of the Scheme rights on land without of scale.
determine the new land rates for there should be no land dispute jeopardizing the efficient Land market and the sale of
that purpose. with the landowners. operation of the scheme and the usufruct rights on plots will also
Owners of land used by the Gezira realization of scale economies. increase the security for
Scheme should be given the right to The rates paid by the sharecroppers 'and therefore
sell their land and tenancy owners Government to private encourage them to invest in
the right to lease their tenancy with landowners is negligible at land.
the approval of Gezira present (the rate which was
management. decided at the start of the Scheme A transparent relationship
was 10 Egyptian piastres). As between the Sudan Gezira
such, land has very low value Board, the farmers and the
and neither Government nor sharecroppers would assist the
farmers have an incentive to establishment of water users
invest in land improvements. associations, the formation of
which is a prerequisite for
breaking the vicious circle of
poverty prevailing in the Gezira.
5. Fiscal and Financial Reforms Over taxation of the farming * Farmers still not sure about the Lack of foreign exchange,
In accordance with the Council of sector is a major disincentive Governmnentintentions in this advance sale of cotton at
Ministers Decree (284 / 1996) the and as a result farmers are regard discount prices and
rate of all taxes and Zakat should forced to neglect farming and * There is some information that discrimination in exchange rate
not exceed 15% of net value of divest. the Zakat Administration result in high cost of production,
produce in the irrigated sector. * There is evidence that farmers accepted the principle of using low revenues and disincentives
- Cost of inputs can be reduced pay higher margins for their the net value as a basis for and dissatisfaction of farmers.
significantly if adequate resources inputs due to high cost of calculation of Zakat. * Diversification of household
are allocated for its procurement financing under sheil credit. * The Government established a earnings sources should improve
-The unification and simplification * Farmers should be encouraged high level committee for farmers' capacity to save and
of financing sources and procedures to save and invest in farming. procurement of inputs and invest provided that there are
and the encouragement of self To achieve this, household provided adequate guarantees incentives in farming
financing from farmers' resources earnings increased through for financing; a move which particularly cotton.
and the encouragement of income additional income generating produced positive results. A credit system should be
earning activities. activities. devised to provide individual
-Cotton sales; the cotton marketing * SCC should become a farmers with their financing
comnanv should limit its role to needs. It is unfortunate that

73
 Annex 1

Recommendations Justifications Actions Taken Mission's Remarks

marketing of cotton and its specialized cotton marketing Geziradoesnot havea historyof
derivatives. institution. financial intermediationat the
- Cotton producing schemes should household level. Cotton
becomeassociatedwith of the CMC financing is provided through
through subscription in the the SGB, while other household
company'scapitalstock to the value consumption and production
of their ginningfactories. credit is provided through
moneylenders (Sheil),
remittancesand sharecroppers.
* Marketingof cotton should be
basedon threeprinciples:
- Cotton producers should have
an activerole in salesof cotton.
- Monopolisticaccess to cotton
should be avoided because at
the end farmerswillsuffer.
- The marketing company
decisionsshould be transparent
and the companyshouldnot be
used for unduly taxing of
producers.
6. Financial and AccountingSystem Theadministrativebudgetbased * The budgetary year for A budget based on production
The fonancial and accounting on a calendar year is not agriculturalschemes including activities,transparentprocedures
The financial and accounting suitable to agricultural Gezira has been changed to July for accounting and determining
system and expenditureshould be production. -June. farmers' revenue, procurement,
based on production budget p Jarer revenu pcm ent,
preparedand approvedbefore the * Accounting and fnancial Reforms are difficult to start water rates and ad.inistrative
agriculturalseason. procedures are important for becausethe financialposition of expenses.
- Attract competent accounting diligent financial management, the Scheme situation is very Improving the quality of
officers. transparency, and farmers' precarious. accountants through intensive
- Improvestorekeeping. confidencein the system. training and adopting measures
and incentive to retain their
services essentialfor the proper
financial management of the
scheme.

74
 Annex 1

Table 1: Summary of Total Employees, in Sudan Gezira Board 1999

Administration Classified Staff Labor Total
Approved Occupied Vacant Approved Occupied Vacant Approved
Agricultural 1074 1002 72 2929 2077 852 4003
Management
Investment 99 92 7 215 184 31 314
Engineering 147 139 8 528 527 1 675
Special Units 153 131 22 223 222 1 376
Finance 108 107 1 53 52 1 161
Department
Administration 58 58 0 247 247 0 305
Commercial Units 272 271 1 1971 1947 24 2243
Total 1911 1800 111 6166 5256 910 8077
Source: Sudan Gezira Board,Personnel Department.

75
 Annex 2

ANNEX 2: MACROECONOMIC DEVELOPMENTS

The Structure of the Economy

1. Sudan's economic growth is dominated by agriculture, which accounted for an estimated 45 percent
of GDP, 55 percent of employment, and 85 percent of export earnings in 1998. Among the three main
agricultural systems, irrigation contributes 27 percent of agricultural GDP, and it produces most of the
cotton, sugar cane, legumes, orchard crops, peanuts and wheat.61

2. A notable development in agricultural production in the 1990s is the emergence of livestock as a

major export product in place of cotton, which is in a decline. Livestock exports rose from US$22.6
million in 1990/91 to US$120 million in 1998,while earnings from cotton fell from US$162.8 million to
US$95.6 million during the same period, due mainly to inefficiency and decline of the irrigation sub-
sector. Another recent development is the start of oil production in August 1999.
Recent Economic Performance
3. Economic Growth: Achieving sustained growth in Sudan has been hampered by civil war, social
dislocation and the brain drain, as well as the deterioration of basic infrastructure and the lack of access to
aid and foreign investments. - -
Infrastructure bottlenecks, including Fig 1: GDP Growth rate
erosion of transport and irrigation, 10
and shortage of electricity, have been 8
severe. In addition, Sudan has been p 8
vulnerable to severe external shocks, 6
including floods and drought, which c 4
often result in recurrent famine. The e 2
prospects for a lasting peace, which n I I 1 t
would help release resources to yY92-93Y93-94Y94-95 Y96 Y97 Y98
channel to development, remain -2
uncertain. -4
4. Specific growth numbers need to Years
be viewed with caution, mainly because of the dearth of reliable data, especially on crop yields, acreage
and subsector weights. Nevertheless, there are broad indications that the economy improved in the 1990s
after years of decline (Figure 1). Officially, the GDP growth rate averaged five percent during 1992-93 to
1998,were led mainly by agriculture. Constructionactivities linked to investments in oil in the last three
years contributed to the growth process. The general economic improvement has been helped by the
government's containment of fiscal deficits, limits on monetary growth and a reduced rate of inflation
which was running at over 100 percent in the early 1990s. The key structural reforms aim at enhancing
efficiency by liberalizing the trade and exchange rate regimes, phasing out price controls and privatizing
public enterprises.

61 Assumingthat the GS producesa little more that one-quarterof the GDP from all irrigationschemes,it is
estimatedthat the GS accountsfor aboutsevenpercentof agriculturalGDP,or aboutthreepercentof nationalGDP.

76
 Annex 2

5. Inflation: Based on Khartoum figures, inflation was

high in the earlier parts of the 1990s, reflecting widened Fg 2: Inflation ]
fiscal deficits and domestic credit expansion. Crop failure
and shortage of basic food items, and increases in the
domestic price of key imports, especially petroleum, also
fuelled the inflation. The abolition of most administered , 150
prices since 1992 allowed high prices to be reflected in
the open market. Recently, inflation declined from a peak 100
of 150 percent in 1992 to 17 percent in 1998 as 0c 50
Government adopted tighter policies, especially tight
monetary measures (Figure 2). Broad money growth fell 0 _
from an average of 85 percent during 1992-96 to 34 "1992""1993""1994'1995"
"1996" "1997" "199"
percent in 1997-98. Years
6. Savings and Investments: Domestic savings are low _ _ _ ____ _ __j
at about 5 percent of GDP. There are no Government
revenue surpluses over recurrent expenditures. The
Government is putting emphasis on deregulatingand promoting private investments, which are also very
low, excepting the recent spurt of foreign direct investmentsdirected only at creating the oil pipeline and
related activities. The Investment Promotion Act of 1990 (amended in 1996) was amended again in 1999
to rationalize the investment sanctioning procedures and stimulate greater private investments and
growth. The Act provides guarantees against nationalization and for transfer of profits. The Act also
provided fiscal exemptions for investors, including tax holidays and exemptions on import duties, fees
and consumption and production taxes. However, the discretionary tax exemptions created many
problems. Authority for implementingthe exemptions has been spread out among various federal and
state level departments, often leading to overlapping processes. The Government's amendment to the
Investment EncouragementAct in 1999 was intended mainly to (i) establish a "one window" system of
uniform facilities for all investors, (ii) allow exemptions and tax holidays already granted to expire as
originally sanctioned, (iii) eliminate open-ended exemptions and limit new exemptions. However,
political support was not adequate to pass these amendments to the Act in 1999. The Government is
currentlyreviewing the Act with a view to rationalizingthe exemptionsprocess.
Public ResourceManagement
8. Low tax revenues, large expenditures and lack access to external financing have made sound macro-
fiscal performance difficult. Similarly,developmentfinancing and effective public resource management
are extremely difficult. During 1994-96,for example, revenue fell from 9.4 to 6.2 percent of GDP, while
expenditures rose from 22 to 26.6 of GDP. The revenue ratio at the federal level is about 8 percent of
GDP. Even if state level revenues are taken into account, the total revenue ratio would be about 12
percent of GDP, compared to the LDC average of 18-20 percent. A program of tax reform to enhance the
efficiencyof the tax system through the introductionof a VAT is being prepared for implementation.
9. Development expenditures funded by the central government are minimal, rising from 0.5 to 0.8
percent of GDP between 1996and 1998. An estimated 0.2 percent of GDP of development spendingwas
self-financed by public corporations owned by the Government. Less than half of the development
expenditure budget has actually been funded since the mid-1990s. The share of foreign financing of
developmentprojectswas an estimated 10 percent in 1998.
10. Under the decentralized federal structure, the central government is focused on agriculture, energy
and mining, which accounted for over 60 percent of its development expenditures during 1996-98.
Agriculture accounted for 41 percent of the central Government's development expenditures; energy and
mining absorbed about 25 percent of development expenditures during the same period. The central
Governmenthas responsibilityfor formulating social policy and for funding a few social services, such as

77
 Annex 2

higher education and selected community services. The public corporations focus on transportation and
communication, giving these sectors over 70 percent of their development expenditures in 1996-98. The
corporations are commercially oriented in such areas as telecommunication, railways, ports, electricity,
shipping and aviation. Reforms, including privatization, of these corporations are currently under way.
External Performance
11. External Debt: The main challenge to external financial management is a heavy external debt
burden, which amounted to some US$22 billion at the end of 1998. Multilateral institutions account for
19.4 percent of the debt. The major multilateral creditors include IBRD and IDA the IMF, the Arab
Development Fund, and the Arab Bank for Economic and Social Development. Bilateral creditors
account for 57 percent; of this Paris Club creditors are owed 27 percent. Non-Paris bilateral creditors,
mainly Gulf countries, account for 30 percent. The rest of the debt is owed to foreign commercial banks
and foreign suppliers.
12. External debt service is unmanageable under existing circumstances. Arrears on external debt are
estimated at US$ 19 billion. In net present value terms, the debt stock was estimated at 3310 percent of
export of goods and non-factor services (XGNS). Scheduled debt service payments were estimated at 224
percent of XGNS, well exceeding the manageable cut-off range of 20-25 percent. Nevertheless, Sudan
has started to rebuild its relations with the Bank, the IMF and other multilateral creditors. It has
maintained an IMF staff-monitored program with the IMF since April 1997 and has begun making
monthly debt service payments to the Bank, the IMF and some other multilateral creditors, such as the
African Development Bank. While the arrears continue to grow, these payments constitute an initial step
towards normalizing relations.
13. Exports and Imports: Estimated exports totaled US$1329 million, compared to imports of US$
1925 million in 1998. Exports volume grew at 12.9 percent during 1995-98, due to trade and exchange
rate reforms and liberalization of procurement prices. Exports are becoming more diversified. The share
of cotton and gum arabic exports fell from 37 to 20 percent during 1994/95 to 1998, while gold,
groundnuts, livestock and sesame rose sharply. The recent discovery of petroleum stands to diversify
exports further.
14. Since the mid-1990s merchandize imports have risen faster than exports. The composition of
imports changed as agriculture production has improved. Food imports fell from 18 percent of total
imports to 14 percent during 1994-98, while the import of manufactured good rose from 29 to 41 percent.
The main sources of exports are Saudi Arabia and China, which together accounted for 30 percent of
imports in 1998.. In addition, domestic substitution for as oil imports will affect the current account
balance positively.
15. The fast import growth widened the trade deficit by 6 percentage points to 15 percent of GDP during
1995-98. Private remittances of Sudanese working abroad are a major source of inflows helping to
finance the external gap. Nevertheless, the current account balance is weak. The current account deficit
was equivalent to 6.7 percent of GDP in 1997, rising to 9.8 percent of GDP in 1998. The deterioration in
the current accounts balance reflects in part the inflow of capital good to finance oil sector investments.
16. Exchange Rate Reforms: Sudan made unsuccessful attempts at exchange rate reform in the early
1990s. A unified exchange rate system adopted in February 1992 collapsed in October 1993, as
inadequate reserves, ineffective instruments of monetary control and weak financial policies undermined
stable market-oriented exchange rate policies. Starting in 1997, a phased introduction of a wide range of
trade and other reforms moved the exchange regime towards a unified system. The spreads between
official and unofficial exchange rates were gradually reduced. Import and export restrictions, including
surrender requirements were relaxed except for a few items kept for reasons of religion, national security,
public health and domestic food sufficiency. The pricing and import of oil products was liberalized and
financing of public sector imports though the Bank of Sudan was eliminated. The exchange rate was

78
 Annex 2

effectively unified by the end of October 1998, following review of the regulatory framework and ;a
period of reserve build-up. The rate is now determined on the basis of a 5-day moving average.
Poverty and Social Development
17. Poverty and Social services: Sudan's per capita income is US$290. 6 2
Poverty is increasing, though
no reliable estimates of its depth and intensity are available.3 Recent growth of agriculture has not
ensured nation-wide food security, because of disparities in income, regional differences in the pattern of
agricultural growth and disruption caused by the civil war. The Food and Agriculture Organization and
the World Food Program estimated 45 percent reduction in cereal production in parts of the Western
Region, North Darfur and North Kordofan in 1998.
18. Social indicators for the 16 northern states are lagging behind countries at the same level of per
capita income. In the North, the adult illiteracy rate is 47 percent (59 percent for women)64 Life
expectancy at birth is 53 years; infant mortality is 71 of 1000 births. Basic social services, namely,
education, health and water and sanitation, have been seriously eroded as a result of the combined impact
of civil conflict and natural disasters. Only some 30 percent of rural residents and 40 percent urban
dwellers have access to safe drinking water. Primary school enrollments have declined to about 56
percent. Access to health services is also limited.
19. Although there are no reliable quantitative information on living conditions in the South, poverty is
reported to encompass virtually the entire population in the South. Aside from some fairly limited border
trading with Kenya and Uganda, the cash economy has broken down completely. Employment (either
formal or informal) is virtually non-existent. Access to social services is minimal. The bulk of the
population in the South is dependent on food aid from NGOs, UN agencies and bilateral donors.
20. Safety Nets: Extended family and community networks are the main sources of social safety nets
for most households. Estimates of remittances to Sudan from families abroad are in excess of US$ 1
billion a year. However, the extended family and community safety nets have come under strain as whole
communities are ravaged by drought, flood, civil war and other disasters. These ravaged areas depend
mostly on the NGOs and UN agencies.
21. Safety net programs organized under the policy guidance of the ministry of social planning assist
children, women, and the destitute. Services provided include free medical treatment of endemic diseases
and emergency treatment, grants for university students from poor homes, and cash grants to poor
families. These services have limited coverage.
22. Zakat. One of the better known safety net programs is financed through the Zakat, which is
contribution from income rooted in Islamic religious traditions for assistance to the poor. The largest of
the Zakats funds is a major source of financing for a nationwide poverty alleviation program, supporting
an estimated 100,000 beneficiaries each year. Contributions from the fund are said to be based on 2.5
percent of income of wealthy households engaged in commerce; 5 percent of income of wealthy
households engaged in traditional agriculture and 10 percent of income of wealthy households engaged in
irrigation agriculture. The Zakat funds are managed by religious bodies outside the budget. The largest

62 Total populationwas estimatedat 28.3 millionin 1998,with averageannualgrowthrate of 2 percent.The figure

for percapitaincomeis for 1998.
63 Estimatesof the levelof povertycoveringthe 16Northernstatesalonevary widelyup to 90 percent.
64 Basedon 1997data

79
 Annex 2

Zakat mobilized over an estimated US$ 4 million in 1997. The total amount mobilized by all Zakats was
estimated at US $14 million minimum. Fifty percent of the Zakat funds is given to the needy in cash as
well as to finance group investments in irrigation, canals, fishing and other enterprises; thirty percent is
donated to hospitals to rehabilitate facilities and finance medicine and pharmacies.

80
 Annex 3

ANNEX 3: INFRASTRUCTURE AND MANAGEMENT OF THE GEZIRA

IRRIGATION

A. DESCRIPTION OF THE IRRIGATION SYSTEM6 5

Storage Dams

1. Sennar Dam. The Sennar dam is situated on the Blue Nile some 260 km southwest of
Khartoum. The dam, completed in 1925, was built to supply the Gezira irrigation scheme by gravity
from head works on the left bank of the river. The total storage capacity of the reservoir created by the
Sennar dam was 930 million m3 . The total length of the dam including embankments is just over 3 km, cf
which the central section, built of masonry, is 600 m long with a maximum height of 26 m. This latter
section contains 80 low level sluices and a 300 m spillway, which can be closed off by steel panels when
the flood has passed. The maximum water level elevation at the reservoir is 421.7 m and the minimum is
417.2 m to maintain maximum flows in the Gezira canal.
2. Roseires Dam. The Roseires dam is situated on the Blue Nile approximately 250 km upstream
of Sennar dam. The dam, with a designed reservoir retention level of 480 m, completed in 1966, was
constructed to provide storage for irrigation in the low water season and for hydropower generation. The
total storage capacity of Roseires reservoir was 3 000 million m3 and the live storage was 2,400 million

3. The dam is a concrete buttress type about 1 km long, flanked on either side by earth embankments
8.5 km long to the west and 4 km long to the east. For sedimentation control in the reservoir the dam has
five deep sluices set at the lowest possible level in the main river channel. The discharge through the darn
is normally passed through these deep sluices, which are equipped with radial gates for control purposes.
A gated spillway, with a crest level set at the minimum draw-down level of 467 m, augments the deep
sluices when the peak flood is passed. Silt has influenced the design and operation of the two dams. In
spite of the fact that filling of the reservoir takes place after the elapse of the flood, siltation has resulted
in reducing the live storage at Sennar from 600 to 480 million m3 and silted up the dead storage of
Roseires reservoir. The present live storage capacity is just sufficient to meet the present irrigation
demand in a year with an 80 percent reliable flow. In 1984/85,for example, the low river yield resulted
in cutting out wheat from the rotation for insufficiency of water supply. Raising of Roseires retention
level by 10 meters to elevation 490 meters is under consideration. The heightening of the dam would
increase the live storage almost three times to about 7,000 m3 . This additional storage will offer larg;e
possibilities to modify the calendar and cropping pattern in the Gezira scheme.
Conveyance and Distribution System
4. The irrigation system comprises twin main canals running from the head-works at Sennar to a
common pool at the cross-regulator at km 57. The Managil main canal of 186 m3/sec design capacity was
constructed in parallel to the old Gezira main canal of 168 m3 /sec capacity, to serve the Managil
extension. The water distribution system includes:

- 2 main canals of total length of 261 km with conveyance capacity ranging from 168 and 186
m3 /sec at head-works to 10m3 /sec at the tail end;

65Partsof thisAnnexhavebeenbasedonthe WorldBankPublicationNo. 120"The Gezira Irrigation Scheme in

Sudan", AgricultureandRuralDevelopmentDepartment,1990

81
 Annex 3

- 11branchcanalsof total lengthof 651 km withconveyancecapacityrangingfrom 25 to 120

m3/sec:
- 107major canalsof total length 1,652km with a carryingcapacityrangingfrom 1.5to 15
m3/sec;
- 1,498minorcanalsof total lengthof 8,119km with a deliverycapacityrangingfrom 0.5 to
1.5m3 /sec;
- 29,000watercoursescalled"Abu Ishreen"(Abuxx- of total lengthof 40,000km with 116
I/seccapacity;
- 350,000field channelscalled"Abu Sitta"(Abu VI) of total lengthof 100,000km with 50-
1/seccapacity.

5. Downstreamof the first commoncross-regulatorat km 57 the maincanalsate dividedintoreaches,

whichvary in lengthfrom 5 km to 22 km, by furthercross-regulators.Theseregulatorsare the control
pointsfor the branchand majordistributioncanal off-takes.Thebranchcanalsare similarlydividedinto
reachesby cross-regulatorsandmajordistributorcanalsaregroupedat theseregulators.Themajorcanals
are divided into reachesof around 3 km and the carrying capacityof the conveyancesystem (0.39
liter/sec/ha)canmeetthe maximumdemandon the systemat full rotationalcroppingof 75%.
6. The main, branch and major canals are designedas regime conveyancechannels,with water
flowingcontinuouslyday and night. The minorcanalsare designedfor night storagedeliveringwater
directlyto the watercourses.
Canal Regulators
7. The controlstructuresare designedto maintaina constantupstreamlevel and the dischargeis
controlledby manuallyoperatedmeans.
8. The two main classesof regulatorgate in use are the verticalliftingsluice gate and the movable
weir. Thereare a numberof differenttypes of sluicegate (gantryoperatedsluicegates,rack and worm
gates, roller sluice gates). The systemof water controlthroughoutthe distributionsystem relies on
knowledgeof the dischargecharacteristicsof the regulatorgates. The flowthroughthe sluice gatesis
estimatedfrom calibrationchartsrequiringreadingsof gateopeningand upstreamand downstreamlevels.
MoveableWeirs
9. Moveableweirs are installedas head and cross-regulatorson major canals and at most head
regulatorson minorcanalsfor dischargeup to S m3/s. Theycomprisea moveableweir plate and frame
witha downstreamplate slopingat 1.5set in a masonryor concretestructure.

10. Minorcanalofftakes aregenerallygroupedat the cross-regulators.Thereis normallyno irrigation

off takedirectfromthe maincanals,branchcanalsor majorcanals.

I1. Thecharacteristicsof theseweirsare.

(i) providedthe upstreamlevel is keptconstant,they givea very accuratedischargefrom a

formularequiringthevalueof the headof wateroverthe weir only;
(ii) the discharge is independentof the downstreamwater level;
(iii) being overshot, they are very sensitive to fluctuation in upstream level.

82
 Annex 3

Field Outlet Valves

12. The original field outlet valves, in abbreviation FOP gates, discharging into the Abu xx through
field outlet pipes (FOP) consisted of a chopper-type valve. The flow was controlled by rotating the
chopper gate about hinge pin. This valve is very vulnerable to stealing. Virtually all-valves have been
replaced by oil drum bottoms, bags or other local materials - or not replaced at all.
Escapes
13. The Gezira scheme is characterized by a very limited capacity for escapage of surplus water. Very
large areas on the periphery of the scheme have no escape possibility at all.

14. The total escape capacity is 67 m3 /sec, which is less than 20 % of the capacity of the main canals,
and is intended primarily to allow for emergency spillage due to sudden decreases in irrigation demancl
following rainfall.

15. As a result of the low escape capacity combined with the long length of supply canals, farmers are
often required to continue to take water into their fields for some time, even when they are already
flooded by heavy rain.
Minor Canals
16. The minor can are a key feature of the Gezira canal irrigation system. They are over designed in
relation to the flow they have to convey, especially in the downstream reaches, since they have been
designed to act as night storage reservoirs. In two experiment units in the early 1920's the minor canals
were designed as regime channels with continuous flow. The night storage reservoir concept was
introduced in the design of the first 300,000 fd in the mid 1920's when it was realized that tenant were
opposed to irrigation at night. It was decided that the field outlet pipes would be closed at night and the
continuous discharges into the heads would be stored within the minor canals until the moming. The
dimensions of the cross section vary from a bed width of about C to 4 meters and a depth of 1.30 to 0-8()
meters going downstream. The standard distance between two successive minors is 1.42 km.

17. The total length of a minor canal can be as much as 20 km. Each minor is divided into reaches;
with a length varying from I to 4 km depending on the slope of the land. The reaches are separated by
night-storage regulators consisting of brickwork well and sluice gate or, in the lower reaches, by a gated
pipe.

18. The minor canals are primarily designed to command land for direct application of irrigation water
to the field. The design criteria are a command of 20 cm above the highest parts of the field. The water
level corresponding to these criteria is known in Sudan as full supply level (FSL), which differs from the
definition used in most countries, i.e., the water level in the canals when running at maximum flow
capacity.

19. Since the banks are set further apart than what would be required for carrying the required flows,
there is sufficient material for their construction. At intervals of 292 m along the minor canal, field outlet
concrete pipes take off at right angles, each feeding a 90 feddan field called a "number". These pipes - 1:2
meters long and 0.35 m diameter - are buried at least 60 cm below the service road of the minor canals.
Field Irrigation System
20. The uniform slope of the land in the Gezira Scheme has permitted a very regular layout of fields.
The typical layout is shown in Figure 1.

83
 Annex 3

21. The field irrigation system is designed to serve standard units of 90 feddan (Numbers) measuring
1,350 x 280 m and irrigated by watercourses known as Abu Ishreen (Abu xx). This unit is divided into
eighteen 5-feddan plots (called hawashas) watered by secondary watercourses called Abu Sitta (Abu vi)
taking off from watercourses.

22. A "number" is normally planted with one crop (cotton, wheat) or divided between simultaneous
crops (groundnut, sorghum).

23. The Abu xx had originally a design bed width of 1.00 m and a depth of 0.40 m and a design
command of about 0.20 m. A special ditcher pulled by a crawler tractor nowadays rebuilds the Abu xx,
and the plant used for construction dictates its new section. Its theoretical capacity is 116 I/s (5,000 min
12 hours).

24. In the standard field layout, the hawasha is further divided into fourteen angayas by small ditches
and the angayas, in turn, were divided into 10 smaller basins called hods. This subdivision has been
abandoned because too demandingfrom the tenants in time and energy. Irrigation water distributed from
the Abu VI is now distributed to the angayas until there is free standing water throughout the field.
Drainage System

25. The original design of the Gezira irrigation scheme recognized that because of the nature of the soil
and absence of a high water table, there was no need for, and indeed no means of providing subsurface
drainage of the fields. The only need for drainage, therefore, was for dealing with surface runoff from
rainfall or excess irrigation.

26. The present surface runoff drainage system consists of minor surface drains of total length of about
6,000 km and major drains totaling about 1,500 km in length. Minor drains run parallel to minor canals.
These discharges into the major or collector drains, which generally follow the lines of natural drainage
and lead the runoff water to outfalls. Although there are no field drains parallel to the Abu xx to take
runoff from the fields runoff disposal is seldom a serious problem. At the time of the heavy showers a
large part of the total area is fallow or has not yet been planted. The rains fall on dry cracked fields,
which can absorb a large part of it. With the angaya system of irrigation, each small plot retains some of
the non-absorbedrainfall. In this system, retention facilities are automatically built-in, the disadvantage
is frequent water logging. (see Figure 1)

27. The major drains ideally outfall beyond the cultivation boundaries to natural drainage lines and
thence to the Blue or the White Nile. However, in much of the Gezira this does not happen. Several
drains terminate in large local depressions and so runoff water either has to be pumped into nearby canals,
or is allowed to pond up and then evaporate, usually on land which is unsuitable for agriculture. The
lands so flooded are left uncultivated deliberately but often are used unofficially for labor settlements.

B. ISSUES IN IMPROVED WATER MANAGEMENT

Vicious Circle
28. The Gezira irrigation network is in state of disrepair. Maintenance is often deferred due to
inadequate funding. Water is not delivered to the farms in timely manner, or not delivered to the farrns at
the tail end of the Abu xx, causing low yields and low farm incomes. A large proportion of farmers are
unwilling to pay water charges, although the charges are only a small fraction of the crop production
costs. The situation, which has progressively worsened in recent years, is the outcome of a "vicious
circle" shown in Figure .

84
 Annex 3

Changing the Paradigm

29. In order to breakthe viciouscircle,the tenants/farmershave to be assistedand trainedto assumea
greaterresponsibilityfor the operationand maintenanceof the minor irrigationsystem. Experiencein
othercountriessuggeststhat empoweringfarmerswith a role in irrigationmanagement;in the contextof
an improvedinstitutionalframeworkfor the irrigationsystem, is the key to a more productive,and
sustainableirrigatedagricultureand increasedfarmerincome.

Establishing Water User Groups

30. The PresidentialCommitteealso recommendedinvolvementof tenant farmersin annualdecision
makingon irrigationand watermanagementpolicies. In line with this recommendation,an optionfor
improvedwater managementwouldbe to decentralizethe controlof irrigationwater managementand
givea greaterroleand responsibilityto farmersthroughthe formationof WaterUsers' Groups(WUGs).
Providingthe managersof WUGsare trainedand supportedby a centralirrigationauthoritysuch as the
SGB to operateand maintainthe lower/minordistributionsystems,a decentralizedwater management
system has provento be effectivein improvingwater managementefficiency.66 The introductionof
WUGs could be gradual starting with a few blocks. Should WUGs be introduced,the MOI would
continueto operateand maintainthemain system.
31. The principleis that WUGswould be independenthydraulicunits and would pay for irrigation
water in bulk at their boundary. Therewould consequentlybe a logicalincentivefor farmerswithina
WUGto managetertiarysystemsefficiently.Theirorganizationalsurvivaldependson financialviability,
whichcan onlybe achievedby recoveringoperationand maintenancecostsfrom the users.Theuserswill
have a personalinterest in ensuring the long-termproductivityof their irrigatedagriculture. This is
ensuredthroughgoodoperationand maintenancemanagementperformance.

66 See, forexample,TransferringIrrigation Management to Farmers in Andhra Pradesh, India, WorldBank

Technical
PaperNo.449,TheWorldBank,Washington
DC,October1999;andTowarda FinanciallySustainable
Irrigation System: Lessons from the State of Victoria, Australia, 1984-1994,WorldBankTechnicalPaperNo. 413,
TheWorldBank,Washington
DC,1998.

85
 Annex 3

FIGURE 3: THE VICIOUS CIRCLE

LowePerformiag
Irrigation Dept. ladequate AgrkuItunl
WoFarmerInvolyement .... 4 PoorIrrigadion &WeDIO

Poor Irrigation

I~~~~~~~~~~~~~ 4 LoStjYC'-
e3-s\z

P 03
O&r )
InadequateFunding
or AAAorn

Ca)S*aY ' J. I
Fa*mer
DlaatlsracU l

Saw= AM4,,mW=MB19Wlblk0 M

86
 Annex 3,

Virtuous Circle
32. At present, water users are unofficially involved in operation and maintenance of field canals
(quaternary) and operation of Abu xx canals (tertiary), without having much influence on water
distribution and management. In interviews with the mission members, current irrigators indicated their
willingness to actively participate in irrigation management and formation of WUGs6 7 It is possible for
WUGs to become part of a strategy to convert the vicious circle (see the internal circle in Figure 4) to a
sustainable irrigation system with adequate operation and maintenance in a virtuous circle as shown in
Figure 4
33. The main action required to start this new arrangement would be for the Gezira Board to promote
and encourage participation of water users in decision making and water management, and to assist themn
to form WlJGs on minor canals and federate themselves into larger units. The size of WIUGswould
depend on a number of factors such as social cohesiveness, layout of the irrigation network and the
economy of scale for cost-effective operation and maintenance services. The present "blocks" in the GS,
which are typically 25,000 feddan, could with minor modifications in their boundaries to match a
hydraulic unit be a viable size for a WUG. They could be non-profit organizations, solely for irrigation
management and should have a legal base and status. The WUGs would receive and pay for water in bulk,
distribute it among their members, maintain the system, collect payments for water and operation and
maintenance.
34. The irrigation and drainage systems to be turned over to WUGs should be in good working
condition. To improve the systems, funds would be required to help WlUGsand the MOIWR to invest in
system rehabilitation, based on urgent needs. At least, a part of the investment could come from tlhe
farmer contribution, in kind or in cash. This has proved to develop a sense of ownership and enhance
sustainability.
35. The management of irrigation facilities by private water users groups would require a sound legal
base and regulationsthat the current laws of Sudan do not provide. An enabling law would be required to
establish WUG as a legal entity capable of contracting, opening and operating bank accounts, and
instituting and answering suits.6 8 In addition, it should address the relationship between the WUGs and
the MOIWR, SGB and the duties and obligations of the MOI/SGB and those of WUGs, and the structure
of water rates and the operation and maintenance and other fees.

67 Farmers' Union representativesand irrigators interviewedin the field strongly supported the WUG concept and
expressed a strong desire for its introduction.
68 A study for Legal Framework for the Establishmentof WUGswas conducted under IFAD-financedNorthern
Province IrrigationRehabilitation Project in 1991. In addition, a very useful analysis of the legal issues is contained
in SalmanM. A. Salman, The Legal Frameworkfor Water Users Associations:A ComparativeStudy, WorldBank
Technical Paper No. 360, The World Bank, WashingtonDC, 1997. This paper includes a model memorandumof
understandingbetween a water users groups/associationand a government institution providingthe irrigation water.

87
 Annex 3

FIGURE 4: THE VIRTUOUS CIRLCLE

/ A 4) '(di%

111
. F- k 1fizffiX|1~~~~~~~~

88
 Annex 3

TABLE 2: LONG-TERM AVERAGE FLOW OF THE NILE RIVER SYSTEM

(Billion m 3 )
River Location Annual Average Monthly
Average Maximum Minimum
White Nile Khartoum 25.7 3.2 1.4
(Oct) (Jul)
Blue Nile Roseires 50.7 15.6 0.3
(Aug) (Apr)
Atbara at mouth 12.1 5.6 0.1
(Aug) (Nov/Feb)
Main Nile Egyptian Border 86.4 21.8 1.9
___ (Sep) (May)
Source:NileWaters
Study.1979

TABLE 3: WATER RESOURCES OF THE SUDAN

Source Annual Constraints
Yield
(BILLION
M3 )
Nile Water Agreement 20.50 Seasonal pattern coupled with limited storage facilities
Non-nilotic Rivers 5.50 Highly variable, short duration flows

Groundwater 4.00 Deep water entailing high cost of pumping

Present TOTAL 30.00
Expected share from 6.00 Capital intensivewith considerable social and environmental
Swamps concerns
TOTAL 36.00
Source: MOIWR, Khartoum

89
 Annex 3

TABLE 4: SEDIMENTDEPOSITION IN IRRIGATION CANALS

Sediment Input Sediment Deposits in Canals Sediment Passing
Year at Km 57 Main & Branch Majors Minors Total to the Fields
mcm % mcm % mcm % mcm % mcm mcm %

1988 12.45 100.00 0.62 5.00 2.86 22.97 4.11 33.01 7.59 60.99 4.86 39.01
1989 5.83 100.00 0.29 5.00 1.34 23.00 1.92 32.96 3.55 60.96 2.27 39.04
1990 8.28 1000.00 0.41 5.00 1.90 22.96 2.73 32.99 5.04 60.95 3.23 39.05
1991 9.78 100.00 0.49 5.00 2.25 23.02 3.23 33.04 5.97 61.06 3.81 _ 38.94
1992 5.29
Note: No data were collected after 1991; mcm=MillionCubic Meter
Source: Hydraulic Research Station, Ministry of Irrigationand Water Resources

TABLE 5: AVERAGE MONTHLY FLOW OF BLUE NILE AT ED DEIM

(Last ten years vs. Long - term average)
________ _______ Month
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
1989 29.2 18.2 14.4 16.9 17.2 36.0 191.0 386.8 345.0 221.0 83.7 44.8 1,404.1
1990 32.2 21.8 14.1 11.0 11.3 30.0 153.9 407.1 320.7 165.5 59.7 32.6 1,259.7
1991 20.6 12.1 9.4 13.0 24.0 54.3 253.9 461.6 529.0 154.8 74.0 43.5 1,650.2
1992 22.1 15.1 11.3 9.0 23.8 51.3 140.6 406.8 343.7 257.7 108.7 53.9 1,444.7
1993 29.8 18.3 11.6 23.4 36.5 37.7 274.0 493.0 426.0 252.0 112 51.0
1994 29.0 17.4 11.4 9.2 24.0 65.8 271.0 585.0 450.0 145.0 93.0 36.1 1,736.9
1995 16.7 10.7 8.79 11.8 17.8 48.2 163.0 426.0 295.0 125.0 54.3 29.0 1,206.3
1996 18.2 11.2 11.5 16.5 44.2 134.0 338.0 553.0 381.0 192.0 76.8 44.1 1,820.5
1997 NA NA NA NA NA NA NA NA NA NA NA NA NA
1998 29.9 21.1 16.7 17.5 26.8 56.0 276.0 612.0 508.0 372.0 133.0 61.5 2,130.5
Average 25.3 16.3 12.1 14.2 25.1 57.0 229.0 481.2 399.8 209.4 88.3 44.1 1,581.6
Long-term 22.2 15.2 10.4 9.3 15.7 50.1 204.3 450.8 353.2 183.4 76.0 38.0 1,428.7
Average I_I

90
 Annex 3

Table 6: Gezira Scheme - Cropped Area, Water Consumption and Silt Removal
Season Cropped Area Water Used Silt Removed Water Used Silt Removedl
('000) fd mcm mcm mcm/fd mcm/fd
1987- 88 1,272 2,880 5.75 2,264.2 4.5
1988- 89 1,309 4,980 6.44 3,804.4 4.9
1989 - 90 1,384 5,260 6.51 3,800.6 4.7
1990- 91 1,514 6,470 12.83 4,273.4 8.5
1991 - 92 1,643 6,650 13.49 4,047.5 8.2
1992 - 93 1,622 6,250 11.34 3,853.3 7.0
1993 - 94 1,581 6,560 12.00 4,149.3 7.6
1994 - 95 1,462 6,750 13.49 4,617.0 9.2
1995 - 96 1,393 6,190 14.20 4,443.6 10.2
1996 - 97 1,401 6,700 11.25 4,782.3 8.0
1997 - 98 1,165 6,920 10.03 5,939.9 8.6
1998 - 99 878 5,620 6.92 6,400.9 7.9
MCM = Million Cubic Meters

Table 7: Irrigation Water Rates - 1998-99 Season

Crop Annual Crop Water Water Rates
Requirements (1) Sudanese Pound US Dollars
m3/fd m3/ha (per fd) per per '000 m3 per '000 m3
Cotton ELS 4,887 12,678 21,600 4.42 4,420 1.72
Cotton MS 4,179 10,447 21,600 5.17 5,169 2.01
Wheat 2,473 6,388 21,000 8.49 8,492 3.30
Sorghum 3,685 8,759 15,740 4.27 4,271 1.66
Groundnut 4,103 9,722 15,740 3.84 3,836 1.49
Note: (1) Staff Appraisal Report, Gezira RehabilitationProject
Source: IWC, SGB

Table 8: Average Water Use per Harvested Irrigation Area

All Crops
Season Area Irrigated Water Use Water Use
(000) fd mcm Per fd (m3 )
91 - 92 1,538 6,650 4,324
92 - 93 1,549 6,250 4,034
93 - 94 1,422 6,560 4,612
94 - 95 1,257 6,750 5,370
95 - 96 1,268 6,190 4,883
96 - 97 1,404 6,700 4,771
97 - 98 1,221 6,920 5,667
98 - 99 775 5,620 7,256
Source: Irrigation Water Corporation (IWC) & SGB

91
 Annex 3

Table 9: Expenditures on Major O& M Activities by

Irrigation Water Corporation (IWC)
(Million SD)
Actual Annual 95-96 96-97 97-98
Expenses Amount Amount % Amount
Silt Removal 619.0 63.1 1,400.7 67.6 1,336.6 51.6
Weed Removal 41.5 4.2 12.5 0.6 30.2 1.2
Pump 118.5 12.1 174.3 8.4 188.4 7.3
Other 201.9 20.6 484.9 23.4 1,035.5 40.0
Total 981.0 100.0 2,072.4 100.0 2,590.7 100.0
Source:IrrigationWaterCorporation

Table 10: Cropping Intensity in the Gezira Scheme

Area Cropping Intensity
Season Planned Harvested Planned Harvested Planned/harvested
(fd) (fd) (%) (%) %
91 - 92 1,537,929.45 73.2
92 - 93 1,549,248.75 73.8
93 - 94 1,422,295.50 67.7
94 - 95 1,256,983.50 59.9
95 - 96 1,416,620.00 1,267,730.00 67.5 60.4 89
96 - 97 1,453,545.00 1,404,416.00 69.2 66.9 97
97 - 98 1,262,737.00 1,221,160.00 60.1 58.2 97
98 - 99 1,220,003.00 774,564.00 58.1 36.9 63
Source:SudanGeziraBoardand IrrigationWaterManagementCorp.

92
 Annex 3

Figure 5: Harvested Irrigation Area & Water Use

2000
2~ ,0

01500 6,000w f

g1,000 4,000
500
0 A

91 - 92 92 - 93 93 - 94 94 - 95 95 - 96 96 - 97 97 - 98 98 - 99

Irrigation Season

Irrigation -0-Water Use

Figure 6: Average Annual Use of Water (per feddan)

Harvested Crop

8000-
7000
6000 -
U
25000 6
0 .-...<-.
<.-

4000
3000 -
2000

91 - 92 92 - 93 93 - 94 94 - 95 95 - 96 96 - 97 97 - 98 98- 99

Irrigation Season

93
 Annex 3

Figure 7: Water Charges Collection Rate

Harvested Crop Area

100%
80% -- -
! 60% --
40%-
20% Il

91 -92 92-93 93-94 94-95 95-96 96-97 97-98 98-99

Season

Figure 8: Water Charges Collection Rates

Based on Harvested & Planned Crop Area

70%
60% _____

40%
95 -96 96 - 97 97 - 98 98 -99
Season

+-Harvested *PIanned|

94
 Annex 4

ANNEX 4: ASSUMPTIONS AND DATA FOR ECONOMIC ANALYSIS

Assumptions in the Economic Analysis

1. Because the crop year 1998/99was an unusually poor year for the Gezira, costs and yields
in the economic analysis for the previous year are used to derive income per feddan. Yields are
based on the past seven years with the highest and lowest taken out. All data were obtained from
the Socio-Economic Research Unit in the Sudan Gezira Board unless otherwise noted.

Table 11: Current Input Levels Used for Different Crops ( per feddan)
Crop / Input T eeds Fertilizers (Kg) Labour Avg Number
l___________________ Se (Super- (person of Irrigations
(kg)
._________________ (Urea) [ phosphate) days)
ELS Cotton 17 80 0 68 13
MS Cotton 17 80 0 60 11
Wheat 60 80 40 11 6
Sorghum-Improved 3 50 0 27 6
Cultivar
Sorghum-Traditional. 6 0 0 24 6
Cultivar
Groundnuts 21 0 0 42 8
Source: Socio-EconomicResearch Unit, Sudan Gezira Board.
ELS= Extra Long Staple,MS= Medium Staple

Table 12: Cotton Picking Labor by Source

(person /days)
Season Tenants' Local Seasonal Floating Total Total
Families Labor Migrants Labor Available Required
84/85 141,505 94,078 214,862 13,640 464,085 470,830
85/86 132,421 87,584 173,024 11,505 404,534 405,790
86/87 127,284 99,326 163,358 8,495 398,463 406,953
87/88 124,399 89,874 144,526 7,517 366,316 383,015
88/89 139,182 101,262 130,316 9,602 380,362 404,000
89/90 131,601 87,441 106,653 9,731 336,568 348,230
90/91 93,357 64,273 73,515 13,545 244,690 245,24]L
91/92 91,203 65,938 42,944 8,507 208,592 228,22(
92/93 79,175 56,740 18,222 6,545 160,682 182,620
93/94 73,541 45,108 11,287 3,662 133,598 159,045
94/95 117,357 68,486 27,529 8,047 221,419 258,973
95/96 147,444 69,087 28,233 7,790 252,554 306,9483
96/97 122730 62929 4423 4435 183179 NA
97/98 164827 80798 6577 39907 292109 335,842
98/99 62,755 44,101 2,999 14,581 124,436 NA
Source: Socio- Economic Research Unit, Sudan Gezira Board

95
 Annex 4

Table 13: Gezira Scheme: Crops Yields (1984/85-1997/1998)

Season MS* Cotton Wheat Groundnut Sorghum
ELS* Cotton Ton/feddan Ton/feddan Ton/feddan
(Kantar/feddan)** Kantar/fed"*
84/85 7.62 4.39 NA 0.51 0.35
85/86 5.43 3.42 0.40 0.55 0.55
86/87 5.70 4.72 0.44 0.60 0.40
87/88 5.73 3.87 0.35 0.60 0.36
88/89 6.52 4.12 0.56 0.60 0.50
89/90 5.12 3.74 0.66 0.54 0.49
90/91 4.56 2.86 0.44 0.73 0.53
91/92 5.83 4.96 0.94 0.80 0.66
92/93 3.98 4.38 0.53 0.71 0.77
93/94 3.87 3.72 0.52 0.82 0.80
94/95 3.61 3.93 0.59 0.89 0.85
95/96 4.20 3.66 0.66 0.75 0.66
96/97 4.07 3.58 0.64 0.80 1.18
97/98 4.62 4.04 0.70 1.04 1.04
98/99 4.72 4.13 0.25 0.46 0.73
Source: Socio- Economic Research Unit, Sudan Gezira Board
i ELS = Extra Long Staple, MS = Medium Staple
** One kantar of seed cotton = 315 lb.

96
 Annex 4

Table 14: Prices of Different Grades of Barakat Cotton (Ls/Kantar of Seed Cotton)
Grades
Season 1 2 3 4 5 | 6 7 8 9
84/85 155 150 145 140 135 130 125 120 115-
85/86 235 230 225 220 215 210 205 200 195
86/87 273 268 263 258 248 238 229 218 208
87/88 338 328 318 308 293 278 263 248 233
88/89 722 702 682 662 642 622 602 582 562
89/90 873 817 787 747 727 707 687 667 647
90/91 1,167 1,107 1,047 987 967 947 927 907 887
91/92 2,485 2,385 2,285 2,185 2,085 1,985 1,885 1,785 1,685
92/93* 4,851 4,751 4,651 4,551 4,451 4,351 4,251 4,151 4,051
92/93** 6,090 5,990 5,890 5,790 5,690 5,590 5,490 5,390 5,290
93/94 15,260 15,160 15,060 14,960 14,860 14,760 14,660 14,560 14,460
94/95 37,957 37,857 37,757 37,657 37,557 37,457
95/96 127,670 126,670 125,670 124,670 123,670 122,670 121,670
96/97 104978 103978 102978 101978 100978 99978 98978 97978
97/98 122,400 121,400 120,400 119,400 118,400 117,400
98/99 144,527 143,527 142,527 141,527 140,527 139,527 138,527 __ -I
Source:Socio-EconomicResearchUnit, SudanGeziraBoard
v "Salam"price
** Ministryof FinancePrice (forproductionoverbreak-even)

97
 Annex 4

Table 15: Farmgate Prices of Groundnuts Sorghum, and Wheat (LS/ton)

Season Groundnuts Sorghum Wheat
Farmgate Salam
84/85 531 1316 not grown

85/86 1130 474 700

86/87 983 410 770

87/88 1,108 1,292 1,010

88/89 1,021 1,033 2,400

89/90 3,905 2,904 3,000

90/91 8,192 12,724 6,000

91/92 16,061 7,500 8,750 6,100

92/93 16,784 8,850 19,000 12,000

93/94 39,200 27,000 70,000 40,000

94/95 98,000 50,000 75,000

95/96 112,000 110,000 220,000

96/97 232,708 220,000 220,000

97/98 273,000 220,000 380,000

98/99 364,000 240,000 480,000

Source: Socio-EconomicResearch Unit, Sudan Gezira

98
 Annex 4

Table 16: Area Allocation By Crop

(000 feddans and % of total)
Season Cotton 0% Wheat % Groundnut % Sorghum % Total
84/85 765 55 NA NA 213 15 420 30 1,398
85/86 401 30 242 18 103 8 579 -44 1,324
86/87 415 35 177 15 151 13 448 38 1,191
87/88 383 32 252 21 160 13 394 33 1,189
88/89 405 33 274 23 I11 9 427 35 1,216
89/90 358 28 392 31 80 6 441 35 1,271
90/91 251 18 613 1 43 40 3 507 36 1,411
91/92 216 14 533 35 35 2 725 48 1,509
92/93 175 12 514 35 163 11 622 42 1,474
93/94 150 11 523 37 187 13 547 39 1,407
94/95 253 19 393 30 191 15 468 36 1,304
95/96 301 23 391 30 231 18 394 30 1,317
96/97 331 24 390 28 246 18 407 30 1,374
97/98 246 22 302 27 223 20 339 31 1,111
98/99 154 22 123 18 146 21 270 39 693
Source: Socio-EconomicResearch Unit, Sudan Gezira Board

Table 17: Net Returns to Farmers by Crop

(LS/feddan)
Cotton Wheat G'nuts Sorghum
Season Barakat Shambat Acala All
84/85 258 138 358
85/86 30 415 101
86/87 376 133.93 330 5
87/88 253 468 334.28 201.26 290 255
88/89 1,312 1,284 1,300 790 131 153
89/90 636 1,021 747 903 1,279 737
90/91 -383 100 -393 -286 862 5,642 4,081
91/92 2,947 2,012 3,879 3147 3,164 7,895 2,330
92/93 7,032 -3163 -5258 1,106 -1872 4,689 9.41
93/94 17,311 14,250 17,748 16,479 5,580 16,983 11.844
94/95 81,164 20,014 69,922 57,033 10,433 42,335 16.839
95/96 237,103 111,232 155,314 82,628 34,997 38.,595
96/97 4735 34379 162815 66721 65304 141]230
97/98 18111 74472 38502 27772 73634 101377
98/99 1 -97591 49526 -45724
Source: Socio-EconomicResearch Unit, Sudan Gezira Board

99
 Annex 4

Table 18: Exchange Rates

(end of year, LS/US dollar)
Year Official rate Parallel rate
1980 0.4 0.5
1985 2.5 4.25
1990 4.5 11.3
1991 15 30
1992 100 143
1993 215 335
1994 315 525
1995 832 905
1996 1460 1795
1997 1712 1840
1998 2333 2333
1999 (latest) 2580 2580
Source:Bankof Sudan

100
 Annex 4

Notes on the DRC Calculations

2. The calculations cover two cropping season 1997/98and 1998/99 for the major crops grown in the
Gezira. These include long staple cotton, short staple cotton, wheat, groundnuts and sorghum. For
vegetable crops the calculation is still under processing. Below are notes on these calculations.
3. Crop yield: The average of yield of the main crop for the last ten years were adequately
documented in the Gezira. However, the yield levels used in the calculations were that corresponding to
1997/98 and 98/99 cropping season. But, it should be mentioned that last year was exceptionally a poor
year crop. Cotton yield was expressed in sack/feddan. One ton equal to 28 sack of unshelled groundnut.
Out of one it was assumed that 65% of it can be exported as "hand picked" HPS, 43% FAQ with 1% as
physical losses. from the FAQ we can get 40% as oil , 58% as cake and 2% loss.
4. Yield of wheat and sorghum are expressed in sack/feddan. One ton equal 11 sack of 92.5 kg.
5. Prices: Two sets of prices are used in the analysis namely farm gate border equivalent prices. Farm
gate prices are the prevailing prices in local markets. i.e. the average price the farmers get when they sell]
their crops. Similarly, the pricing of joint product such as cotton seeds were made according to the
prevailing prices as they mostly consumed domestically. Border equivalent price is fob price of cotton,
groundnuts and sorghum minus transport marketing and port charges. This includes for sorghum and
groundnuts transport from Gezira to Port Sudan, unloading, custom duties, clearing expenditure, health,
storage for one month, loading for export, unloading quay, transport to quay and fumigation. For cotton, it
includes in addition to the above two percent SCC commission and some fees for promotion. Border
equivalent price of wheat is the fob price of wheat at the point of export e.g. Australia to this freight and
insurance and local charges i.e., port charges for harbor dues, fumigation, handling and local transport to
Gezira were added.
Notes on Cost of Production:
6. In Gezira detailed cost of production is available for the different agricultural operation or
activities. Although it is easy to account for cost of material inputs, a substantial part of the cost of
production of any crop stems from the operations, which involve different degrees of traded inputs such
as land preparation, sowing, weeding, watering and harvesting. In Gezira the cost data collected in the
field were recorded separately for mechanical and manual operations so that a basis could be established
for splitting the total cost of each operation into traded input and domestic resource cost. The records are
detailed enough to facilitate this desegregation. Based on the above criteria the traded inputs content of
production costs were assumed to be as follows.
7. Allocation to traded input and domestic resource costs. The records are detailed enough to
facilitate this desegregation. Based on the above criteria the traded input content of production costs were
assumed to be as follows:

Fertilizer 90%
Pesticides 90%
Sacks 90%
Mechanical operation 70%
Seeds 60%
Water charge 40%
Transport 70%
Handling (Port. Sudan) 70%
Storage 20%

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 Annex 4

8. Transportation to Port Sudan is done either by rail or by truck. Many Gezira farmer transport its
crop by rail. This is particularly true for cotton. However, recently big portion of crops was transported by
truck. The following rates have been used in the calculations:

1997/98 1998/99
Bale of cotton (LS) 12000 18000
Ton of other crops (LS) 50000 65000

9. Shadow exchange rate: The major difficulty to valuing inputs and outputs is the use of
appropriate prices that reflect the opportunity cost. The prices of tradable inputs often don't correspond to
their true economic value due to market imperfections and government intervention, resulting in distorted
prices. An average rate between the official and parallel exchange rate used in the calculation of DRC for
1997/98 whereas 70% of the black market rate was used for 1998/99.

10. Yields: The base case yield used to calculate farm income is an average of the previous seven
years with the high and low yield years discarded. In addition to the base case yield, two higher yield
scenarios are calculated: (1) based on what farmers reported in field interviews were their highest yields
achieved; and (2) potential yields recorded by the Agricultural Research Corporation with actual farm
trials. In all cases, the farm trial yields were the highest, and farmer interview reported yields second
highest. Table 19 shows these three yield scenarios, with the latest and highest achieved also expressed
as a percentage of the farm trial (potential) yield.

Table 19: Current, High, and Farm Trial (Potential) Yields for Main Gezira Crops
Units Latest Yield Achieved Highest Yield Farm Trial
Achieved
% of FT
-Yield Yield % of FI Yields
Cotton-Acala K of SC/F 2.7 20.4 10.0 75.6 13.2
Wheat Sacks/F 2.5 12.7 11.0 56.2 19.6
Groundnuts Sacks/F 14.6 44.4 31.3 94.9 32.9
Sorghum Sacks/F 6.8 _ 49.3 11.7 85.2 13.7 |
Note: FT-Farm Trials
Sources:Field interviews,Agricultural Research Corporation
11. Cotton Marketing: Historically, the SGB marketed cotton through its offices in Khartoum and
Liverpool. In 1970 the Sudan Cotton Corporation (then, a public enterprise) was established by the
Government to market all cotton in the Sudan. This corporation was sold to farmers in 1992, but
continued as a de facto monopoly in cotton marketing as the Sudan Cotton Company (SCC). The SGB as
a public institution is not represented on the Board of directors of SCC and hence it is not directly
involved in cotton export decisions. The SGB delivers its cotton (all grades) to SCC stores at Port Sudan.
The SCC floats international tenders and ships the cotton to buyers abroad. The SCC does not carry out
any other marketing stages, i.e., transport, ginning, grading and reclassification. Calculation of cotton
proceeds is based on prices of average grade, not the actual value of tenders, multiplied by the amount of
lint delivered. The SCC then deducts the export tax, commission and arbitration fee as well as
reclassification fees, which amount to somewhat less than five percent of the international price.
12. The Presidential Committee which reviewed the Gezira (see Chapter 6) proposed that all the cotton
marketing functions should be the responsibility of SCC, including processing, transport, insurance and
grading. To carry through this proposal or any privatization of marketing functions would require a
valuation of all infrastructure involved in these activities. This value could be the share of SGB in the
SCC. The Presidential Committee proposed this step to enable SGB to participate actively in the board of
directors and export policy of cotton i.e. better area allocation according to price signal and, possibly,

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relieve to some extent the financial stress of SGB as the working expenditure of ginneries as well as
transportation cost would be the responsibility of SCC. Cotton marketing costs and taxes are found itn
Table 20.
Table 20: Marketing Costs for Cotton (1998/99)
Item Amount / value Percentage/ Cost per
bale
Number of Bales 59166.0
Total weight (kantars) 229530.0
Avg.lnt'l Price ($)/Kantar
Barakat 70.4
Total Revenue ($) $16,158,912

Costs
Export Tax $807,946 5.0%
SCC Commission $323,178 2.0%
Sudan Shipping Line $80,795 0.5%
Preparation of Bales $188,089 $3.179/Bale
Reclassification $88,749 $1.5/Bale
Arbitration $323,178 2.0%
Total Costs $1,811,934

Net Revenue $14,346,978

Net Rev./Tot. Rev. 88.8%
Source: Financial Administration of the Gezira Board Crop year 1998/99
Explanation of Payments between SGB and SCC
13. The flow of money between SGB and SCC begins with a predetermined calendar for harvesting
and marketing. The official calendar of harvest, sale and payment for cotton is described below. The
finances of the SCC and the SGB have become deeply intertwined. As a result, SCC's operations have a
direct impact on input supply and even SGB's daily finances. In recent years the SGB has been receiving
advances on the following year's cotton crop.
Timing Activity
Dec-Feb Farmers harvest cotton
Dec-May Ginning and transport
Jan-June Export of cotton
Jan-Mar, June SCC makes tender (3 separate tenders), is paid shortly afterward
June 30 Farmers (should) receive their cotton payments
14. However, the current flow of money between the SCC and the SGB also involves input supply: (1)
Inputs are received on the basis of a one-year (360 days) suppliers' credit; (2) SCC guarantees payment
for the inputs by co-signing an undertaking with the Bank of Sudan and the Farmers' Bank, with future
cotton crop proceeds as collateral--if SCC fails to pay on time, it incurs a financial penalty; (3) accounts
between SCC and SGB are to be settled on June 30, 1999; (4) The SCC subtracts the export tax (recent]ly
removed) and marketing costs, and the remainder is transferred to SGB; (5) SGB should then make
payments to cotton farmers based on the standing of their accounts.
15. Unfortunately, in 1998/99, with SGB's mounting financial difficulties, SGB's immediate financing
needs exceeded the remaining balance. SGB had to pay for more pressing needs such as electricity bills

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 Annex 4

and staff salaries. As a result, farmers did not receive the entire payment due, nor were the payments on
time. SCC, in order to promote cotton production, regularly finances SGB revenue shortfalls.
16. Because the SGB is under severe financial strain, for the time being, the SCC plays the additional
role as a financially sound partner with whom input suppliers are willing to do business. Should the SGB
take over cotton marketing without solving its indebtedness, input suppliers may be reluctant to extend
suppliers' credits which would leave the farmers without inputs.
Table 21: Sample Tenant Account for Four Feddan of Cotton.
Debit Items LS Credit Item LS
Picking 176,000.00 Crop value 1,612,622.00
Fertilizers, seeds and sacks 345,942.16
Transport costs to station 64,662.00
Land and water fees 107,250.00
Other expenses 15,305.00
Pesticides 610,951.07
Land preparation 79,687.00
Fertilizer dispersal and 15,375.00
irrigation channel (Abu
eshreen)
Social services 3,948.99
Zakat 15,234.99
Previous debts 68,090.00
Farmers' association 7,000.00
Duty stamp 10.00
Return 103,165.79
Total 1,612,622.00 Total 1,612,622.00
Source: Sudan Gezira Board Darwish office: Central district
Acreage: 4 feddans
Cotton variety: Acala
Production: 19.62 kantar seed cotton.
Summary of Sector Policies Relevant to the Gezira Scheme
17. In addition to general economic liberalization, the decade of the 1990s has seen a number of major
policy changes that have affected the Gezira Scheme.
18. Food Self-Sufficiency-1991/92-91/93: This policy required farmers to grow a specified amount of
food crops-mainly wheat. As a result, there was an increase in cultivated area of sorghum and wheat at
the expense of cash crops, cotton and groundnuts. The result was that foreign exchange earnings fell and
imported inputs diminished and at the same time tenants accumulated many debts because wheat did not
turn out to be profitable. The compulsion to grow wheat was subsequently rescinded but the aftermath in
terms of substantial tenant debt remains.
19. Farming system integration of livestock-1991/92-present: The five course rotation replaced the
four course rotation in order to integrate livestock, i.e., to incorporate fodder production. There was an
animal distribution program in 1991 in which 1,191 cows were given to farmers along with 400 sheep.

20. Crop rotation Changes and wheat liberalization: The five crop rotation changed in 1997/98,
switching the order of wheat and sorghum, and again in 1999/2000,by making wheat an optional crop for
which another winter crop could be substituted (e.g. sunflower, fodder, vegetables).

104
 Annex 4

Figure 9: Shares of Area Planted by Major Crop

100%/.

800/0

(A 60p/O

400/o

200%

0%/
86 87 88 89 90 91 92 93 94 95 96 97 98 99
FiscalYears

[MCotton *Sorghum EWheat EGroundnut

FIe 1RhTHIe Sciwios of GCAm

Sdni? NetRewu

$40,00D~~~~~~~~~~~~~~~~~~~~~ tf

mom

Acdla ea _ Guides SMhn-

105
 Annex 4

Table 22. Analysis of Domestic Resource Cost and Nominal Protection Coefficient
Crop Year: 98/99 Gen. Comments :
Total Cost Price Exch FINANCIAL VALUE (LS/FEDDAN) ECONOMICVALUE (LS/FEDDAN)
Rate
Quantity FX Comp mkt p (LS) US $ LS/S FX Comp Local Comp Total Conversio FX comp Local Comp Total
(°/e) n Factor
A. Main Product Revenue
2333.00
World Price FOB Port Sudan lb 100% 1026.52 0.44 2425.00
Yield kantarifeddan 4.61 2425.00
Pounds of lint per kantar cotton 92.50 2425.00
Yield of lint/feddan (Ibs): 426.43 2425.00
Gross fob Port Sudan 437733.79 2425.00 437733.79 1.00 454995.48
Revenue/feddan

B. Costs
Less domesticcosts: 2425.00 18025.00 121574.07 139599.07 17971.82 98235.23 115525.23
Export tax (5% F.O.B) per feddan 0% 21886.69 0.00 2425.00 0.00 21886.69 21886.69 0.00 0.00 0.00 0.00
State tax per feddan 0% 26620.81 0.00 2425.00 0.00 26620.81 26620.81 1.00 0.00 26620.81 26620.81
Cotton Comm. perfeddan 0% 17290.48 0.00 2425.00 0.00 17290.48 17290.48 1.00 0.00 17290.48 17290.48
Shipping & other LS/kantar 0% 4373.93 0.00 2425.00 0.00 20163.83 20163.83 1.00 0.00 20163.83 20163.83
Charges
Ginning costs LS/kantar 70% 22000.00 6.60 2425.00 15400.00 30426.00 45826.00 1.00 16007.29 30426.00 45826.00
Transport costs LS/kantar 70% 3750.00 1.13 2425.00 2625.00 5186.25 7811.25 0.72 1964.53 3734.10 5624.10
EqualsNet Revenue from Lint (ex-ginnery) 2425.00
per kantar 64671.31 27.72 2425.00 298134.73 339470.25
per lb lint 699.15 0.30 2425.00 ------ ------
Yield white seed (Ib/kantar seed 205.00 2425.00
cotton)
Yield white seed (Ib/feddan) 945 2425.00
Price of cotton seed Ls per lb 107T82 2425.00
Gross revenue from cottonseed 100% 101892.18 43.67 2425.00 101892.18 0.00 101892.18 1.00 105910.22 0.00 105910.22
Price cotton scarto 0% 533.33 0.00 2425.00
Yield of scarto (lb/kantar) 17.50 2425.00
Gross revenue from scarto 0% 9333.33 0.00 2425.00 0.00 43026.67 43026.67 1.00 0.00 43026.67 43026.67
Total gross revenue 2425.00 443053.58 1.00 0.00 0.00 488407.14

Less marketing cost

Transportation from tenancyto Gineny 70% 1000.00 0.30 2425.00 700.00 1383.00 2083.00 0.72 523.87 995.76 1519.63
Ls/kantar
Statetax for cake 0% 7132.45 0.00 2425.00 0.00 32880.61 32880.61 0.00 0.00 0.00 0.00
2425.00 523.87 995.76
C. TOTAL NET REVENUE 2425.00 -----
408089.97 486887.50
D. Tenant actual average price per kantar
compared to: 82494.00 2425.00
E. Border-equiv tenant price per ------ 2425.00
kantar
88522.77

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 Annex 4

TENANT REVENUE 380297.34 2425.00

F. Less Production Costs: 409586.28

319663.10 209584.34 529247.44 263480.26 146106.01

per feddan 90% 34035.03 13.13 2425.00 30631.52 3403.50 34035.03 0.84 25730.48 2858.94 28589.42
Herbicides
per feddan 90% 70818.53 27.32 2425.00 63736.68 7081.85 70818.53 0.84 53538.81 5948.76 59487.57
Fertilizer
per feddan 90% 149766.05 57.78 2425.00 134789.44 14976.60 149766.05 0.84 113223.13 12580.35 125803.48
Pesticides
per feddan 70% 41006.73 12.30 2425.00 28704.71 12302.02 41006.73 0.72 20667.39 8857.45 29524.85
Machinery use
perfeddan 60% 13639.19 3.51 2425.00 8183.51 5455.68 13639.19 0.86 7037.82 4691.88 11729.70
Seeds(kg)
per feddan 0% 12380.00 0.00 2425.00 0.00 12380.00 12380.00 1.00 0.00 12380.00 12380.00
services offered to
Labor in kind
per feddan 90% 25100.28 9.68 2425.00 22590.25 2510.03 25100.28 0.82 18524.00 2058.22 20582.23
Sacks
0.00 2425.00 0.00 0.00 0.00 0.00 0.00 0.00
Labor Costs:
per feddan 0% 126778.80 0.00 2425.00 0.00 126778.80 126778.80 0.60 0.00 76067.28 76067.28
perfeddan 0% 795.15 0.00 2425.00 0.00 795.15 795.15 1.00 0.00 795.15 795.15
Other
70% 31981.40 9.60 2425.00 22386.98 9594.42 31981.40 0.72 16118.63 6907.98 23026.61
Transportation of cotton pickers
0% 1346.29 0.00 2425.00 0.00 1346.29 1346.29 0.00 0.00 0.00 0.00
Zakat
40% 21600.00 3.70 2425.00 8640.00 12960.00 21600.00 1.00 8640.00 12960.00 21600.00
Irrigation and overhead per feddan
cost
Dmins. cost 0% 21300.00 0.00 2425.00 0.00

338388.10 332541.40 670929.50 281975.96 245337.00 526631.14

-121157.47 77301.22
-148950.10

483533.75 598019.23
Policy Analysis Matrix
Farmer
REVENUE COST
TRADABLE DOMESTIC PROFIT RATIO:

DRC 0.65 2.37

Financial Prices 380297.34 319663.10 209584.34 -148950.10 IVA US $ 92.13 37.90
Financial Prices(N) 408089.97 319663.10 209584.34 -121157.47 CIC 1585.92 5529.54
Economic Prices 486887.50 263480.26 146106.01 77301.22 NPC 0.78 0.93
Divergence -106590.16 56182.83 63478.32 -226251.32 ERP 0.27 0.69

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 Annex 5

ANNEX 5: SOCIAL DEVELOPMENT ISSUES

BRIEFSUMMARY
OFMAJORFINDINGS

I Gezira is at the heart of a much larger economic and social system. A good year in
Gezira signifies a good year for a much larger size of the population than those directly involved
in the scheme. A bad year, similarly affects people way beyond the immediacies of the Scheme.
2 A symbiotic. and at times conflictual, relationship exists between various ethnic and social
groups - largely consisting of the tenant farmers on the one side and the laborers on the other.
Many of the laborers originate from outside the Gezira area, either from Western Sudan or from
Western Africa (Chad through Nigeria). The majority of those who were regarded as seasonal
laborers have taken up permanent residence in the Scheme, and this status has been recognized by
the State, in so far as they are able to form their own Popular Committees separate from those of
the tenant villages.
Box 1: Elephant's Stomach

The Gezira is like the Elephant'sStomach. It unitesand feedsthe entiremassivebodyof the Sudan. All
the distantorgans,legsand limbsare dependenton the stomachfeelingsatisfiedandgettinggoodnutrition.

T[heGezira- the Elephant'sstomach- providesa huge meltingpot for the Sudanesenation,forginga new
nationand a new senseof nationalunity. The Geziraprovides
work to laborerscoming rom distantparts
of the country;the Geziraprovidesfoodand exportcrops,whichhelp,feedand clothethe irecountry.

A wiseelephantknowsto lookwell afterits own stomach.

Source:Mr.IbrahimalFekiMohamned
Babiker,Headof GeziraTradeUnion,FinancilSCrtary

3. Transitory and chronic poverty on the increase. Poverty pockets appear to have
increased due to the financial difficulties, which the Gezira Scheme is facing. Poverty pockets
and chronic poverty are especially prevalent among the migratory labor groups.

4. Household income and productivity disparity between tenant farmers. Those tenants
who have diversified their income beyond farming (to trading, dairy production, small industry,
etc.), have greater adversity resilience. It is also reported that well-off farmers tend to have
higher production yields.

5. Increasing household level-indebtedness. The preferred method of credit is through the

Gezira Board itself. Banks also provide some credit; however, Banks tend to lend largely to the
most successful farmers with firm collateral. If formal credit is not available, sheil credit from
informal sources is often sought. This informal credit system is a very expensive credit system
provided by merchants and better-off farmers. The sheil system tends to lead to cycles of
increasing indebtedness.

6. Decline in social services. With the change in the production relations from "Joint
Account" to "Individual Account" in 1981 and the abolition of the Gezira Board's Social
Services Department has led to a clear decline in access to social services such as clinics,
midwiferv training, dispensaries, nutrition and hygiene awareness training, etc. This has

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 Annex 5

especially affected the women and children in the Scheme who were prime beneficiaries of the
services provided.

7. Dropping levels of school attendance. School and even university attendance among the
children of tenant farmers is high while lack of school attendance among the children of the
laborers is prevalent. With the liberalization introduced in 1992 and the subsequent introduction
of school fees, some of the poorertenants are unable to send their children to school.

8. Increasing reliance on hired labor. At its inception, the Scheme anticipated that farming
labor inputs would be provided by the extended families of the tenants. With increasing farmer
wealth, educational achievements and social aspirations, it is estimated that, on average, the
tenant and his family provide less than 20 percent of the labor, with the rest being covered by
hired labor. This varies, however, with some wealthy farmers, being absentee farmers and other
poorer farmers relying on family labor to a much higher degree. With the steady deterioration in
the performance of the Gezira Scheme, there has also been a reported steady decline in seasonal
labor supply resulting in shortage of agricultural labor.

9. Increasing fragmentation of tenancy size coupled with a drop in productivity. In

Gezira, the size of one full tenancy holdings is 40 feddans while it is 30 feddans in Managil
(based on a five-fold rotation. The minimal holding for any one farmer is half a tenancy, which
corresponds to 20 feddans in Gezira and 15 feddans in Managil. An increased fragmentation of
holdings, means that 15 percent of the farmers now hold the minimum size holding, 16 cultivated
feddan in Gezira and 8 cultivated feddans in Managil. There appears to be a direct correlation
between the increasing fragmentation and the drop in productivity.

10. Farmers' willingness and ability to pay for water. Farmers expressed clear and keen
willingness to pay for water and services supplied. At present fixed charge for water, services,
administration and cleaning of canals is being levied on all farmners. Some farmers receive
insufficient water or receive their water too late, others stated that the Board failed to clean the
canals; yet the same levy was assessed to all farmers. Farmers are therefore keen to see a fairer
system which links payments to services or inputs provided.

11. Desire for Change - Fear of Change. Farmers clearly want to have a greater control over
the production choices, the level of quality of services provided to them and the costs of these
services. There is thus an expressed desire for change. At the same time, there is a great fear of
what the effects of any radical change might be on the security of their livelihood, the socio-
economic structure of their society and on the potential social and financial costs, which these
changes might bring.

STAKEHOLDER
SOCIALDYNAMICSANDPOPULATION
ANALYSIS

INTRODUCTION
12. The Gezira Scheme has for the last 75 years been woven into a new social fabric in the
heart of the Sudan. The Scheme has acted as a magnet, attracting economic activity and thus the
settlement of a variety of social and ethnic groups to form an urban center in Wad Medani and
other Gezira towns, as well as either tenant farmer villages or labor camps on the Scheme itself.
The Scheme has therefore played a key role in transforming the cultural, ethnic and socio-
economic texture of society in the Central Sudan, and the pulse of the Scheme continues to
determine the lives of the millions of people whose lives are intertwined with the Scheme.

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 Annex 5

13. In recent years, and with aging, the Scheme has showed signs of diminishing returns. The
level of production and productivity has declined and as a result the living standards of the
population living within and outside the Scheme have deteriorated. Although many people have
benefited in the past from the Scheme, there is a growing disillusionment and discontent on many
sides. A good year in Gezira used to signify a good year for a much larger size of the population
than those directly involved in the Scheme. Similarly, a bad year affects people way beyond the
immediacies of the Scheme.
The People of the Gezira
14. Social and Ethnic Profile of the Population: The current population estimate of Gezira
State is 3.2 million. The population of the Gezira State grew from 2.0 million in 1983 to 2.7
million in 1993,amounting to an annual growth rate of about 3.0 percent. The average size of the
household was estimated to be 6.2 persons per household. The age distribution of the population
showed that 14.6 percent were under 5 years, 28.6 percent were between 5-14 years, 51 percent
between 15-59 years and 5.7 percent were 60 years and over.

15. Only 19 percent of the population of the State live in urban areas, and the largest urban
settlement is Wad Medani with a total population of about 210,000. The other important towns
include Managil with a population of about 65,000 and Hassahisa with a population of about
21,000. The 1993-population census of Sudan showed that the majority of the population of
Gezira State is of Arab origin.

16. The creation of the Scheme altered the composition and traditional social organization of
the area as land and labor became economic values. At the time of establishment of the Scheme,
preference for allocation of tenancies was given firstly to local inhabitants; failing that to other
subsistence farmers or nomads, who lived in neighboring areas, and thirdly to other Sudanese.
Scheme managers traveled long distances recruiting tenants, who were then settled in residential
units on the Scheme. Added to the problems of reorientation and adjustment of the new settlers,
intertribal tensions at times led to conflict in many of the newly settled villages.

17. Today, over 2.7 million people live in and adjacent to the Gezira Scheme and depend on it
for their livelihood either as tenants, as agricultural laborers, as sharecroppers, traders or as
providers of various services. There are about 120,000 tenancies in the Scheme with an
associated population of about 896,000, (with an average family size of about seven persons per
tenancy).

18. The growing population numbers, both in the labor camps, but also in the settled villages,
are adding a large pressure on land. At present, however, land cannot be legally exchanged within
the Scheme and re-structuring of land ownership is therefore not possible.

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 Annex 5

Table 23: The Ethnic Composition of the Population in Gezira State

Ethnic Group Total
Total 2,715,605
Arab Groups: 83.3
Baggara 03.0
Dar Hamid 01.5
Bederiya 00.4
Gaaliyin 17.9
Guheina 12.2
Other Arab Groups of central Sudan 48.3
Beja 01.0
Nuba 02.2
Nubians 02.3
West Darfur 05.9
S. Sudanese 00.9
Nigerians 02.9
Other Non Sudanese 00.8
Tribe Not Stated 00.6
Source: TheCentralBureauof Statistics;1993NationalPopulation Census of Sudan, Khartoum.TotalNon-
Arabgroupsmakeup 16.6percentof the total of
population the State.

19. An Aging Tenant Farmer Population: Although the general age structure of the
population suggests a young population, with about 43 percent under the age of 15 years, the
tenant population is relatively old, and there is a strong indication that this group is an aging
population. Studies69 have observed that the majority of the tenants (66.4 percent) fall within the
age group 20-59 years. However, 30 percent of the tenants were aged 60 and above, and only 3.6
percent were under 20 years of age. Two studies gave average ages of the tenants to be 49 and 56
years, respectively. In a sample of 50 farmers who attended the group discussion sessions during
the mission, the average age was found to be 56 years.
Migration
20. At the inception of the Scheme, it was assumed that the extended families of the tenant
farmers would be able to supply the required labor for the farming. With the economic crisis of
1931, many tenants abandoned the Scheme due to financial difficulties and the Scheme
administration thus allowed non-Sudanese to become life-tenants. This led to an increase in-
migration from Western Sudan (Kordofan and Darfur) as well as large numbers from West Africa
(from Chad through Nigeria). A number of these migrants initially held tenancies, while many
more came for seasonal labor en route to or from the pilgrimage in Mecca.o
21 However, when the economic conditions improved, many of the original tenants returned
to claim back their tenancies. In 1945 a rule was passed by the Scheme, which stated that when a
non-Sudanese tenant died, the tenancy could not be passed to his heirs. This made it possible for
the Sudanese ex-tenants to re-claim their tenancies or for these tenancies to be resold to other

69 Kamil IbrahimHassan; ProductionRelationsin the SudaneseAgriculture:The case of the Gezira

Scheme,DSRCSeminarNo.54,November1984
TheRepublicof Sudan,GeziraRehabilitation Project;GeziraSchemeTenantsHouseholdSurvey,1987/88,
FinalReport,June 1991.MohamedAbdelGadirAdam;(1996);ThePolicyImpactson FarmersProduction
ResourceUseEfficiencyin the GeziraIrrigatedSchemeof Sudan,Van KielVerlag,Germany
70 Personalcommunication, Ms.Iqbal AhmedHagar,ManagerPlanning,Social and economicResearch,
GeziraBoard.

111
 Annex 5

Sudanese. As the West African tenancy holders passed away, their heirs continued working as
seasonal laborers on the scheme.7 '

22. The need to employ seasonal labor was greater for the small nuclear family tenant units
who had migrated from their original residences, and tenants therefore continued to hire laborers
to work their land.

23. In 1929, the majority of migrant laborers in the Gezira were from West and Central Africa,
(25.8 percent from Nigeria, 35.7 percent from Central Africa and 38.5 percent from Western
Sudan). By 1954, it was estimated that 16 percent of the total population of the Gezira was made
up of labor migrants. It was further estimated that the labor migrants were mainly Nigerians and
72
Tchadians.

24. Labor camps for the seasonal laborers were established in designated areas; housing was
supposed to be built of non-permanent materials, such as straw or wood, with more permanent
structures of bricks and clay buildings banned. A condition for residence in the camps was ready
availability for Scheme related work at all times.

25. As generations of seasonal laborers have established themselves within the Scheme, these
conditions have tended to erode. Unplanned settlements are spreading and basic services are
often absent. Moreover, settlements on agricultural land are now fairly frequent. Thirty-three
percent of the camps are along the canals, 30 percent inside tenancies, 19 percent near villages
and 18 percent in other places?'3 In some parts of the Scheme, the two settlements types (village
and camps) are neighbors with an open space separating them, clearly forming a symbiotic unit.
In others, the two settlement types are further apart and not in a direct symbiotic relationship with
one another.

26. The mission found that approximately. 70 percent of the camp populations originate from
Darfur, followed by West Africans, Kordofan and the rest from other parts of Sudan. The
majority of the tribes from Darfur include the Tama, Messeriya, Zaghawa, Marareet, Masalete,
Gimir and Fur.

27. In interviews with tenant farmers and administration officials, it was expressed that the
migrant population was considered to constitute a problem to the Scheme. A number of reasons
were enumerated:
* The camp population settles inside tenancies thus decreasing the area cultivated and
hinder operation of land preparation and impede aerial spraying.
* The camps and their population obstruct canal clearing due to their presence near canals.
* The camp population's animals attack the crops in the fields.
* The camp population brews alcohol, which affects the morals, the physical health and
hence the productivity of tenants and laborers.
* One farmer interviewedexpressed that the camps "were a cancer to the villages" causing
disease and social disintegration.

71 The Republicof Sudan,Planningand Socio-EconomicResearchUnit Sudan Gezira Board, Gezira

RehabilitationProject;MigratoryLaborSettlementsin the GeziraScheme,FinalReport,Jan. 1994
72 See also: The Republicof Sudan,Planningand Socio-Economic ResearchUnit Sudan GeziraBoard,
GeziraRehabilitationProject;MigratoryLaborSettlementsin the GeziraScheme,FinalReport,Jan. 1994
InformationfromPlanningandSocio-Economic ResearchUnit,GeziraBoard.

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 Annex 5

28 The different ethnic groups and the associated different cultures have made assimilation
difficult. In spite of the long period of co-existence, there are clear divergent group dynamics.
Cultural, ethnic and socio-economic differences mean that the existence of the two groups, while
symbiotic, is largely separate.

29 In spite of these social relations, a large number of factors have acted as pull factors for in-
migration and for camp settlements. Aside from job opportunities on the Scheme, factors also
include:

* Encouragement by the Scheme to the laborers to settle in the Scheme by giving them
areas to cultivate sorghum (the tenants called the sorghum produced 'fellata dura" -
'fellata" being a reference to West Africans);
* Encouragement by tenants through providing laborers help in establishing the labor
camps
* Recruitment by the Gezira Board administration of laborers for cotton picking
* Sharecropping and "land lease systems" which provides laborers the opportunity to
become producers (in the "land lease system", the laborer leases the land from the tenant,
and the produce belongs to the laborer. This system increases the income of migrants and
raises their standard of living).
* The trend for West Africans to take up Sudanese nationality
* Encouragement by some political parties for Sudanese migrants to settle in the area to
increase the voting population.

30. Available literature and studies by the Socio-economic Unit of the Gezira Board show that
the Scheme saw in-migration of laborers up to the 1998/90 season. Since then, there has been a
decline in the number of migrants seeking work in the Scheme. Seasonal laborers have also been
affected by the poor performance of the Scheme. The Scheme has not been able to continue
attracting large number of laborers due partly to the process of urbanization, and the multiplicity
of development projects, in industry as well as agriculture, elsewhere in the country, where
incomes are higher and relatively regular.

31. The Gezira Scheme was the main recipient of seasonal labor migrants, particularly between
January and April, with a slack period immediately following the sorghum and sesame harvest.
Since 1985/96the number of seasonal migrants started to decline sharply and this coincided with
the decline in the area under cotton production. As a consequence wages became less attractive
in the Scheme compared with those in other agricultural schemes like the Gadaref rainfed
mechanized schemes. Moreover, the Gezira Board stopped recruitment campaigns because of the
high cost. Seasonal migrants were involved mainly in cotton picking and sometimes in the
harvest of groundnuts and vegetables. Seasonal labor is paid either in cash or in kind (the tenants
give part of the produce). In view of the poor performance, many tenants are no longer able to
pay the laborers on time, because of lack of money.

32. Increasing reliance on hired labor. Studies conducted by the Socio-Economic Unit of the
Gezira Board found that with increasing farmer wealth, educational achievements and social
aspirations, less than 20 percent of tenants rely on family labor in agriculture and that hired labor
is a dominant factor.74 Most of the contribution of family labor is in watering of cotton and
wheat. However, laborers who are sharecroppers in sorghum, groundnuts and vegetable

74The Republicof Sudan, Planningand Socio-EconomicResearchUnit Sudan Gezira Board, Gezira

RehabilitationProject;MigratoryLaborSettlementsin the GeziraScheme,FinalReport,Jan. 1994

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 Annex 5

production, are responsible for almost all the operations in agriculture.

33. Studies7 5 observe that over 30 percent of the tenants lease or rent their land to others who
are mostly laborers. In addition the system of delegating a person (wakeel) to be responsible for
cultivating one's tenancy is common - about 15 percent of the tenancies are estimated to be
farmed under the wakeel system. The general impression is that productivity under these
arrangementsis generally lower as there is less care for the land under the delegation system"6

Access to Social Services

34. Gezira State is considered to have some of the best social services in the country and it is
second only to Khartoum State, and the Gezira Scheme has been the most important contributor
to this high standard. However, the quality of these services is threatened by the poor
performance of the Scheme. Moreover,the population in the labor camps who lack such services
within the camps, which have now become permanent settlements, are increasingly demanding
the use of these services, and this has produced additional pressure on them.

35. During the early period between 1925-1950, the Scheme did not attempt to supply social
services to the villages of the Scheme let alone to the labor camps7 7

36. In the period after 1950, however, under the "Joint Account" system, two percent of the
return from cotton was allocated to cater for the social development of the communities in the
irrigated area. A multiplicity of social services was provided, which made the Gezira one of the
most socially developed areas in Sudan. The social services targeted were in the fields of
education, public health and popular mobilization. These services were delivered by the Social
Services Departmentof the Gezira Scheme and were greatly valued by the tenants working on the
Scheme.

37. With the change in production relations and the introduction of the "Individual Accounts"
in 1981, the Social Services Department came to an end in 1983. This created a vacuum in the
Gezira rural society, particularly in the areas of education and health. Farmers with whom the
Mission spoke stated that the two percent of the return from cotton is still being collected by the
Farmers Union, but that it appears that little of it goes to supporting the social services for the
tenants.

38. After the closure of the Social Services Department,some efforts were made by Blue Nile
Health projects (part of the World Bank funded Gezira Rehabilitation Project), to support social
services in the region. However, with the end of this project, these services also came to an end.
Social Services - Tenant Villages
39. Education: Today Gezira has more schools than most States in the Sudan. Adult literacy
rate for the population 1Qyears and over is above the national average at 64 percent, (73 percent
for males and 55 percent for females), compared to 53 percent (64 percent for males and 42
percent for females), for the whole country.

75 Mohamed AbdelSalam;" Institutional Impediment to Development in Sudan Gezira Scheme", in,

EifatihShaaeldin(ed),The Evolution ofAgrarian Relations in the Sudan: A Reader, TheHague,1987
76Forfurtherdiscussionof this phenomenon,
seesection3.1.5of thisreport.
77GalalMahmoudYousif,(1997);The Gezira Scheme: The Greatest on Earth Under One Management;
AfricaUniversityHouseforPrinting,Khartoum-Sudan.

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 Annex 5

40. The creation of the Social Development Department had its greatest impact on the children
of the tenants. The 1993 census suggests that the majority of the tenants above 45 years were
illiterate, 47.6 percent for males and 90.4 percent for females. The majority of those with some
education achieved primary level education, and a very small percentage achieved education
above primary school level.

41. Today, over 90 percent of the tenant villages are served by primary schools, while less than
ten of the villages have secondary schools. In the past, it was customary for most secondary
schools to be located in large urban centers, and most of these were boarding schools. Secondary
schools in villages are generally rare in Sudan, and this is true for the Gezira, too.
42. However, with the abolition of boarding schools in the 1970s, Gezira Scheme parents
found ways to pay for their children in secondary schools. The general practice continues to be
for parents in the Gezira to send their children to stay with relatives in towns where they can
attend secondary school.
Table 24: Highest Education Attained by Population 6 years and above
in Gezira State
Age (years)
Education Total Northern Total 6-14 15-24 25-34 35-54 55+
Sudan Gezira
None 47.3 36.7 29.3 16.9 30.0 58.5 81.3
Khalwa 35.9 40.6 65.9 33.2 32.9 27.8 16.4
Primary 7.7 10.7 4.7 26.0 11.5 4.2 0.9
General Sec. 4.6 6.7 0.1 18.1 9.4 3.2 0.6
Senior Sec. 3.6 4.4 0.0 5.5 13.4 4.4 0.4
Above Senior 0.9 0.9 0.0 0.3 2.8 1.9 0.4
Source: Sudan Population Census, 1993

Table 25. Distribution of Educational Background of Tenants

Education <15 Years 15-24 25-44 45+ Total
Illiterate 0.1 0.5 8.1 44.4 53.1
Khalwa 0.0 0.0 1.4 10.6 12.1
Primary 1.2 2.4 11.7 8.3 23.6
Intermediate 0.6 1.8 2.6 0.5 5.5
Secondary 0.3 0.6 2.9 0.6 4.4
Post Secondary 0.0 0.2 0.7 0.4 1.3
Source: Planning, Social and Economic Research Department, Sudan Gezira Board
43. Health: Access to health- services is also higher in the Gezira than that for the whole
country. In 1994, there were a total of 36 hospitals in the Gezira, while the total of health centers
and primary health care units were estimated to be 133 and 215 respectively. The number of
hospital beds in the Gezira was 2,640; there were 59 medical specialists, 246 medical doctors and
561 medical assistants.
44. At the Scheme level, 52 percent of the tenants have access to health centers within the
village; 47.9 percent seek such services from adjacent villages and the average distance from a
village to a clinic was 3.7 kilometers. 36 percent of the tenants sought hospitals services, only 2.9
percent had such services in the village, 97.1 percent sought such services in large villages and
towns, with an average distance of 12 kilometers.

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 Arnex 5

45. Urban hospital services are only enjoyed by a small number of tenants (one percent) due to
transportation difficulties. Private clinics are far from the villages and only 0.7 percent has
access to such services. The average distance to these facilities is 28 kilometers.
Table 26: Access to Education and Health Services by Villages in the Scheme
Type of service Inside the Outside the Average distance in
village village Kilometers
Education
Primary school: For girls 486 (81.8%) 108 (18.2%) 0.8
For boys 431 (80.4%) 110 (19.6%) 0.8
Co-education Primary School 505 (84.5%) 92 (15.5%) 0.9
Intermediate School : For girls 339 (39.7%) 763 (60.3%) 6.4
For boys 365 (33.6%) 721 (66.4%) 5.3
Secondary School: For girls 31 (2.8%) 1047 (97.2%) 26.9
For boys 29 (2.7%) 1033 (97.3%) 24.8
Health 167 (52.0%) 154 (48.0%) 3.7

Health center 12 (2.9%) 391 (97.1% 12.0

Rural Hospital 4 (23.5%) 13 (76.5%) 11.7
Town Hospital 4 (50.0%) 4 (50.0%) 27.8
Private clinics 57 (31.4%) 124 (68.6%) 19.4
Traditional Doctors 184 (89.1%) 20 (10.9%) 0.6
Other Health Institutions
Other Social Services
Local market 140 (14.0%) 860 (86.0% 12.0
Cooperative shop 426 (85.8%) 70 (14.2%) 1.2
Bus station 574 (67.4%) 325 (32.5%) 2.7
Source: Planning, Social and Economic Research Department,Sudan Gezira Board.
The Gezira State is relatively better off than the states making up the former Central Region as Table 27 shows.

Table 27: Access to Health Services in the States making up the former Central Region
State
State Hospitals Health PHCU Hospital Medical Medical Medical
Center Beds* Specialists* Doctors* Assistants*
Gezira 36 133 215 2640/97 59/2.1 245/8 561/21
W. Nile 14 34 31 1135/92 22/1.8 225/5 204/17
B. Nile 5 6 44 260/50 7/1.3 62/5 104/20
Sennar 11 17 75 939/96 15/1.5 36/5 203/21
Total 66 190 - 365 4974/84 103/2 569/6 107/20
Central I___
*Secondfigure in columns 5 - 8 refers to numbers per 100,000 people
Source: Ministry of Health, Sudan 1994

46. Water, Electricity and Sanitation: The population in the Scheme depends on two main
sources for domestic water consumption, surface (canal) and ground water. Underground water
is available in major formations and utilized through boreholes, hand pump wells and shallow
wells. Some treatment is done through slow sand filters in some areas of the Scheme. However,
in many areas, such water is not treated. Many communities, in particular the camp population,
depend on canals as sources of drinking water.

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 Annex 5

47 A study conducted by the Social Development Unit in 1988 found that most of the tenants
(75 percent) had piped water for their domestic use either within or outside their houses. The role
of the Social Development Fund was clearly noticeable here, as the fund had played a major role
in providing most of the tenancy villages with drinking water through the program of deep bore
wells. Thus relatively few tenants (25 percent) still rely on surface wells or canals for their
domestic use. These figures show that the Gezira State population is slightly better off than the
average for Gezira State (see Table 28).
Table 28: Households Access to Water, Sanitation and Domestic Energy
Service Gezira State All Northern Sudan
Water:
Piped Water 70.3 35.0
well 11.8 43.0
Canal/River 16.7 10.0
Other 1.2 12.0

Sanitation: 1.7
Public/Private Sewage 63.2 0.8
Pit Latrine 0.2 44.8
Others 34.9 15.9
None 38.5

Energyfor Lighting
Electricity 30.9 17.3
Kerosene 63.1 54.0
Others 3.0 17.6
None 3.0 11.1

Energyfor Cooking
Electricity
Gas 0.4 0.4
Kerosene 1.4 2.6
Charcoal 0.3 0.8
Wood 41.2 27.9
Others* 41.3 64.0
15.4 4.3

# Others = cotton and sorghum stocks

Source: Central Bureau of Statistics, 1993Population Census, and Khartoum.

48. Electrificationof villages started as part of the Social Development Unit. About 30 percent
of the tenants in Gezira State have access to electricity compared to 2.7 percent in Managil. Even
with electricity available, 80 percent of the tenants still depend on kerosene for (part of) their
lighting needs. The majority of households depend on wood and charcoal for cooking. Gas
cooking is still very insignificant(one percent). The majority of the tenants (52 percent) use open
space as toilets while 46 percent use pit latrines.

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Social Services - the Camp Population

49. The Social Development Fund mentioned above provided most of the villages with social
services, and while in existence, the Department served the villages of tenant farmers. The
Department did not have a presence in the camps and while the residents of the labor camps were
never excluded from the services provided to the villages, the mission was informed that they
rarely were beneficiaries of these services.

50. The laborers, with whom the mission had discussion, expressed the view that they should
be provided with social services and they are willing to contribute to the cost of these services.
In the villages where they live alongside with the tenants, they claim to pay the monthly
contribution for water and schools through the village committees, although their children do not
go to school and they do not have piped water in their houses.

51. Education: Although the Gezira area is considered to have the highest literacy rate in the
country, the greatest majority of the camp population is illiterate. Khalwa (Koranic schools)
education is the most commonly available in the camp. The number of pupils from the camp
population attending schools in the villages is very small. Studies by the Socio-Economic
Department of the Gezira Board indicated that 74 percent of the population was illiterate, 26
percent attended a khalwa, less than two percent of children in camps are enrolled in primary
school, less than 0.5 percent senior schools and less than six percent attended adult education
classes. Dropout rates among these children are very high; in particular among girls who tend to
leave school/khalwa once they reach the age of 13-14 years of age.

52. Health: The health condition in most of the labor camps is extremely poor, and camp
residents walk long distances to receive basic health services. This coupled with the high cost
means that the majority of the camp population uses traditional healing for ailments and disease.
Health hazards to the camp population are increased by their proximity to the canals and the lack
of clean drinking water, which result in a high incidence of Schistosmiasis, malaria and Bilharzia,
among the camp residents. The Blue Nile Health Project introduced some water hand pumps and
sand filters in some of the camps, but it was reported to the mission by the camp residents that
many of these are now in disrepair.

53. The housing condition in the camps was described as generally very bad. Houses were
built of straw or mud, crowded without or with poor ventilation. Seventy-four percent of the
houses of migrants had single rooms, which in most cases were used for sleeping, bathing and as
a kitchen. Latrines were completely absent and defecation was in the open spaces, which
increased the presence of disease-carrying vectors.
Decline in Social Services
54. The change in the production relations from "Joint Account" to "Individual Account" in
1981 and the abolition Qf the Gezira Board's Social Services Department has led to a clear
decline in access to social services such as clinics, midwifery training, dispensaries, nutrition and
hygiene awareness training, etc. This has especially affected the women and children in the
Scheme who were major beneficiaries of the services provided."8

78 MohamedHashimAwad,(1987);The Evolutionof Land Ownershipin The Sudan,in ElfatihShaaeldin

(ed),The Evolutionof AgrarianRelationsin the Sudan,TheHague,1989.
AwadallaMohd.Rahamtalla;(1998),Differencialsin levelsof Humandevelopmentin Areas of Gezira
Scheme:Thecaseof TaybaandAbuGuta:Areas;UnpublishedM.Sc:Thesis,Universityof Khartoum(in
Arabic),Khartoum,Seein ParticularChapter4 on "Developmentof SocialServices".

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Table 29:..Access to Services by the Camp Population

Type of Service Gezira Managil
Water:
Well 7 7
Canal 57 71
Filter 4
Pipe from nearby village 14 9
Other 17 11
Health: (Both Gezira and Managil)
Dressing Station: Inside camp
In Village 49
Dispensary: Inside camp
In Village 53
Health Center: Inside camp 0.2
In Village 32
Hospital: Inside camp
In Village 85
Midwife: Inside camp 2
In Village 80

Education:
Khalwa: Inside camp 20
In Village 0.1
Primary: Inside camp 85.5
In Village
Intermediate: Inside camp 56
In Village
Secondary: Inside camp 36
In Village
Source:Planning,SocialandEconomicResearchDepartment,SudanGeziraBoard
55 With liberalization of the economy, citizens have to pay for building of classrooms,
schoolbooks, health services and other social services. The costs for both health and education
and other social services have risen accordingly following liberalization. Meanwhile the income
derived from the Scheme is insufficient for general household and farming budgets, and is
insufficient to meet the rising costs of social services. This applies to both tenants as well as for
laborers. At the same time financing of social services from projects funded by the international
community has also been largely discontinued.

56. In recent years, the Sudan Government introduced fundamental changes in the way social
services are to be financed. Today the states and the local Councils (mahaliat) are responsible for
financing salaries, and infrastructure expenses related to primary, intermediate and senior
schooling. Similarly, health services below the hospital level are now the responsibility of the
states and local councils.

57. Most local councils are weak financially and their support to health and education is very
limited and inadequate. Collection and payments from users is therefore commonplace. The
share of the local communities in the social services budget has increased considerably and has

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by some estimates reached above 60 percent. When comparing with other states in the Sudan,
however, the Gezira State is better off than most other States because of its revenue base derived
through taxes from the Scheme.

58. Preliminary results of a recent study conducted in 1998 by the Socio-Economic Planning
Unit of the Gezira Board, indicated that there has been a steady deterioration in the quality of
social services in the Gezira scheme area. Schools and health facilities are in poor state and
require maintenance. The number of primary health care units has declined, although some have
been up-graded to health centers.

Dropping School Attendance

59. The total number of primary schools under the authority of the local councils is 1,549 with
a total of 16,291 teachers. Sixty-five percent of these schools are in the Scheme area'9 The
Mission was informed that thus far, the Councils have been able to pay for the teachers' salaries
on a regular basis. However, observations made during the mission showed that the conditions of
some of the school buildings have deteriorated, indicating poor maintenance.

60. With the liberalization of 1992, citizens have to pay for building of classrooms,
schoolbooks, etc. and parents of children were therefore required to pay schools fees and other
school related costs. Records from the State Ministry of Education show that the dropout rate is
increasing among children aged 13 to 14 years. This is still not very significant among the Gezira
tenants.

61. Recent studies have indicated dropping levels of school attendance especially among the
children of laborers and the poor tenants. A study conducted in 1995 showed that out of a total of
163 children of laborers registered in first year primary in 1992,only 15 percent proceeded to the
fourth class of primary school. The drop out among children of tenants was generally high for
girls in the 7th year of primary school.80

Health Situation Deteriorating

62. The local Councils are responsible for the following categories of health workers and
facilities: Health personnel: medical assistants (1,005), nurses (4,173), health visitors (2,300),
midwives and traditional birth attendants (560). Health facilities include health centers (4,948),
dispensaries (172), dressing stations (778) and primary health care units (445).
63. The Gezira, like most parts of the country, still experiences a relatively high incidence of
diseases. In the Gezira, water-borne diseases such as malaria, Schistosomiasis (Bilharzia), and
intestinal worms and diarrhea, especially among children, are very common and endemic in many
parts of the Scheme and evidence suggests these diseases may be on the increase.
64. In the Gezira area, malnutrition among children was found to be 13.3 percent in 1994 with
high rates of 33.3 percent in some parts of the state e.g., Managil, (MOH, 1994). Malnutrition
was largely concentrated among the camp population.
65 It is reported that prior to the Scheme, Schistosomiasis was virtually unknown in the area
and that the high prevalence of vector borne diseases such as malaria and Schistosomiasis are
immediately linked to the Scheme. In 1930's the infection rate was found to be 30 percent of the

79 GeziraState,Ministryof Education.
80GeziraState,Ministryof Education.

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 Annex 5

Gezira population; by 1972 it was 60 percent. The Blue Nile Health Project (BNHP) was
implemented in 1982 to control malaria and Schistostosomiasisas well as diarrhea diseases. By
the end of the project it was estimated that the end infection rate had reduced diseases to 6.9
percent. However, with the end of this project, these services also came to an end. Research
conducted by the Department of Community Medicine, University of Khartoum, between 1994
and 1997 suggested an increase in the incidenceof malaria and Bilharzia had reached an infection
rate of about 20 percent by 1997.

66. In an effort to stem the decline in social services, communities have collectively invested
in self-help for social services. In all the tenant villages, each household is charged a monthly
contribution of between SDI,000 to SD1,200 for water and electricity. The Farmers Union
collects a yearly subscription fee of SD 700 from the tenants in addition to other charges the
Union levy on the tenants.

67. However, it is evident from the recent study conducted by the Socio-EconomicUnit of the
Gezira Board, the decline in the income of the tenants from agriculture is severely affecting the
ability of individuals to contribute to the financial support of water services. So far, remittances
from family members who are migrants in the Arab oil producing countries are helping to reduce
the impact of the decline in agriculturalproduction, and consequently earnings, on the population
in the Gezira.

MAIN CONCLUSIONS
OFSTAKEHOLDER
SOCIALDYNAMICS
ANDPOPULATION
ANALYSIS

ConstructedSocial Inequality

e The Gezira Scheme has produced social stratification, which can be traced back to the early
establishment of the Scheme. Distinct ethnic groups were given tenancy privileges, while
other distinct ethnic groups were expected to work as laborers. One group was denied the
right to build housing of permanent structures, of inheritanceof land, and was only allowed to
live on the Scheme provided it would supply its labor at any and all times required.

- This social stratification still exists today, with non-existent services provided to the labor
migrants, many of whom for generations have lived in poverty in temporary camps with no
real access to social services.

* The symbiotic relationshipthat existed between the various ethnic and social groups - largely
consisting of the tenant farmers on the one side and the laborers on the other- appears to be
threatened by many factors. The decrease in income from agriculture and limited off-farm
employment opportunities appears to cause increasing levels of poverty and a decline in
living standards.

Aging Tenancy Populationand Increase in Hired Labor

* As the sons of tenants attain education, they are reluctant to maintain the tenancy. This has
led to an increase in absentee farmers, to some tenancy fragmentation and to a variety of
private arrangementsfor farming (wakeel, sharecropping,land lease and others) as well as to
an increased reliance on hired labor.
* With the aging population, innovations are not quick to filter into agriculture partly because

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the old generation of tenants is either illiterate or have low education levels. The problem of
labor shortage appears to be increasing.
* The departure of the sons of tenants has also opened up opportunities for women tenancy
holders. Women now hold some 16 percent of the tenancies.

Unequal Access to Social Services

* In comparison with the national average, the Gezira is relatively well served by social
services; however the quality of these services is declining as a result of the poor performance
of the Scheme. Moreover, there is unequal access to these services.
* The village Popular Salvation Committees are contributing to the maintenance of some of the
social services, in particular water, health and education. However, their financial ability to
support these services is dependent on the contribution of the communities and these are not
always easy to raise. The decline in the income of tenants has further restricted their ability to
contribute to the support of these services.
* In the short-term, improving the income potential of the communities will make it possible
for them to contribute to the support of the social services. The contribution paid to the
Farmers Union should also be used to support the services in the villages.

* The reduction of Government expenditure in the provision of social services has increased the
responsibility of individual communities. The decline in the incomes of tenants has affected
the quality of the social services. Poorer tenants with small tenancies are having a hard time
to keep up with the required payments for these services, while the camp population, does not
receive any meaningful services.
• Although the majority of tenants in the Gezira Scheme have access to treated water in or near
their houses, sanitation is still poor, as many households have no pit latrines and thus use the
open spaces as toilets.
* The provision of services to the migrant and camp population by the local Councils is
imperative to ensure greater social integration of the distinct communities, and thus to avoid
any potential future social unrest. The laborers living in the main villages share the social
facilities with the tenants. However, those living in camps, though not excluded from using
these facilities, have no real access to them.

Deteriorating Health Situation

* Water-borne diseases such as malaria, Schistostosomiasis, Bilharzia, and intestinal worms

and diarrhea are reportedly increasing in the Gezira due to lack of funds for disease control.
A general infection rate for water borne diseases is now estimated to be a 20 percent of the
Gezira population - an increase from 6.9 percent in 1987.

ECONOMIC
ANALYSISOFSTAKEHOLDERS

Land Tenure

1. The Historic Perspective: The immediate land tenure system is simple: Land was
originally expropriated from the landowners at the time of the creation of the Scheme. These
landowners were to receive annual rent from the Government for the expropriated land. Many of
the original landowners were also granted tenancies. Once a tenancy has been secured, this

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 Annex 5

cannot be sold. However, it can be inherited. A tenancy can officially only be fragmented to half
the size of a full tenancy. There is an increasing rate of half tenancies in the Scheme. A farmer is
not allowed to own more than one tenancy, but his wife and sons can also own tenancies.

2. The above describes the basic land tenure system of the Scheme. However, beyond the
immediacies of the Scheme presented above, the present land holding and management system
between and within families is not well documented and the mission did not have sufficient
resources to investigate in-depth the complex issues relating to land holdings and management.

3. There are a wide variety of different arrangements in existence for land management,
sharing and holding. A Committee under the State Minister of Agriculture was formed to
investigate the land tenure arrangement in the Gezira and it has submitted its report. The content
of that report has not been made available to the Mission. However, it is the understanding of the
Mission that one of the recommendations relates to the present land rent system.

4. Historically, and prior to the establishment of the Scheme, land in Gezira plain was used
for rainfed cropping and grazing under a land tenure pattern that involved private ownership.
With a view to establish the Scheme, under the 1921 Gezira Land Ordinance, the Government
either leased or bought land from the owners. The 1927 Gezira Land Ordinance governed the
distribution of tenancies. Land was compulsorily rented from registered landowners for a fixed
annual rate of LS 0.100 per feddan for 40 years. Landowners were prevented from renting land
to others, and speculation was avoided by placing restrictions on sale of land. As a result, about
60 percent of the land is today Government land and 40 percent freehold land, which has been
rented by compulsion from its owners. The Sudan Gezira Board manages all the land in the
Scheme. 81

Size of Holdings
5. The Historic Perspective: In Gezira, the size of one full tenancy holdings is 40 feddans
while it is 30 feddans in Managil (based on a five-fold rotation (cotton-wheat-
sorghum/groundnuts-fodder-fallow). The minimal holding for any one farmer is half a tenancy,
which corresponds to 20 feddans in Gezira and 15 feddans in Managil. However, it appears that
during the initial period of distribution, individuals were classified according to the area of land
they owned pre-Scheme in the area. For example, in the Managil extension those who owned
between 15 and 29 feddans before expropriation were given one tenancy, while families which
had 30 - 44 feddans were given two tenancies, three tenancies to families with 45-59 feddans and
four for those with 60 feddans.
6. Productivity: From studies conducted on the productivity of the Gezira, it appears that
factors such as decline in yields, particularly that of cotton, coupled with the rapidly increasing
cost of living, have made many tenants loose interest in farming. It further appears that delay in
payment of tenants is a main concern for most of the tenants. There are reports of payments for
cotton that have never been made and it is further reported that when there finally is some
payment, the wealthier tenants receive the lion's share. Payment one year after delivery of the
harvest is commonplace.

81Seealso Sharifel Dishouni,(1989);Traditionaland Modernizationin SudaneseIrrigatedAgriculture:

LessonsfromExperience,DSRCMonographSeries,No.36;
MohamedhashimAwad,(1987);TheEvolutionof LandOwnershipin the Sudan;in ElfatihShaaeldin(ed);
TheEvolutionof AgrarianRelationsin the Sudan,The Hague,1989.

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 Annex 5

7. Several studies in the past have concluded that productivity is highly correlated with the
ability to hire labor.8 2 Since most activities require hired labor, only those who have liquidity are
able to hire labor on time to complete the required work. Poor tenants therefore have to turn to
moneylenders to meet labor costs. As a consequence, poor tenants with smaller tenancies, tend
to abandon their tenancies at a faster rate compared to wealthy tenants.

8. Gender and Land Tenure: There are presently some 120,000 tenant farmers of which
about 13 percent are women. Recent statistics from the Gezira Board's Department of Planning,
Social and Economic Research indicates that the present number of tenants is decreasing and that
the number of women farmers is therefore dropping accordingly. Several factors were responsible
for the small number of female tenants. According to the 1927 Gezira Land Ordinance, females
had the right to own tenancies, but male relatives should be appointed as responsible tenants of
their behalf. In practice no tenancy was allotted to women. According to the same Ordinance,
after the death of a tenant, Islamic Laws, which would have provided a share of the tenancies to
the daughters of the tenancy holder, did not govern inheritance, because the land was Government
property. The tenancy would thus be transferred to an adult male, and if there was no male
relative, then it could be transferred to a female. However, few women benefited frotn this rule.

9. Increasing Fragmentation of Tenancy Size: The issue of land fragmentation is

recognized by most of the farmers as being one, which seriously affects the viability of Scheme.
As mentioned above, tenants cannot, in theory, sell their land and fragmentation through
inheritance is not allowed. The Gezira Land Ordinance of 1921 specifies that "the tenant may not
transfer, assign, sublet or part with the possession of the land comprised in the tenancy or any
interest there in or in the crop grown there on, except with the consent of the government or such
person or persons as the government may appoint as aforesaid". However, in spite of this
regulation, the average size of the allocated tenancy has tended to decline with the creation of
many half-tenancies, while on the other hand, there is some evidence that absenteeism by tenants
and the use of the wakeel system of delegation have been increasing. This has therefore caused an
increased fragmentation in the actual farmnsize and holding size, while the registered and official
land holding has not necessarily diminished in size.

10. The Gezira Scheme Household Survey of 1987/88 found that 17.5 percent of the sample of
1,118 tenants had more than five feddans and 82.5 percent had less than five feddans in a 4-
rotation system. In accordance with both a study by Mohamed Abdel Salam8 3 and further
reinforced by the Household Survey, the sub-division of the 40-feddan tenancies of the main
Gezira area has steadily increased since the mid 1940s. A number of factors were (and continue
to be) behind this phenomenon. These include population pressure and scarce off-farm
employment opportunities, decreasing reliance on extended family labor due to changing social
patterns and the emergence of nuclear families in the tenancy context, and actions imposed by the
Scheme management on those tenants who repeatedly failed to cope with the instructions of the
field staff with regards to cotton cultivation. Today some 15 percent of the farmers hold the
minimum size plot, - 16 cultivated feddan in Gezira and 8 cultivated feddans in Managil; (i.e. half

82 D.S. Thorton;AgriculturalDevelopmentin the Sudan Gezira Scheme; in Elfatih Shaaeldin(ed);

Evolutionof AgrarianRelationsin the Sudan,TheHague,1987;
MohamedAbdelSalam,InstitutionalImpedimentsto Developmentin the SudanGeziraScheme,in Elfatih
Shaaeldin(ed);ibid;
FarahHasanAdam;Evolutionof the GeziraPatternsof Developmentwithinthe Contextof the Historyof
SudaneseAgrarianRelations.In ElfatihShaaeldin(ed); ibid.
83 MohamedAbdel Salam,InstitutionalImpedimentsto Developmentin the Sudan Gezira Scheme, in
ElfatihShaaeldin(ed);op.cit.

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 Annex 5

a tenancy, based on field-fold rotation with one plot fallow).

11. In the North West Extension of the Scheme, 20 feddan tenancies were officially allocated
in 1950, mainly in reaction to population pressure. When Managil South Western Extension was
started in the late 1950s, a 15 feddan tenancy was adopted, with a cropping intensity of 66.7
percent (up to 1974) and 100 percent since 1975/76.This 15 feddan holding was considered small
enough by the planners to be cultivated by the tenant and his family without recourse to hired
labor, but large enough to provide an adequate and a decent standard of living. It was therefore
adopted to enable more families to be absorbed as tenants in the Scheme. However, the smaller
farm size did not reduce the reliance on hired labor as tenant families have not dispensed with
hired labor; this has partly been attributed to the very tenure system itself, which, it is argued,
leads to an alienation of the tenant cultivator from the land and thus enhances the sense of being a
foreman as opposed to a farmer, irrespective of farm size. It is thus argued that the land tenure
system adopted in the Gezira Scheme alienates the tenant from the land he cultivates and thus
adversely affects his attitude toward working and investing in land.84

12. The present form of the tenancy contract and the present range of the Gezira Board
functions over land are resulting in a sub-optimal allocation of resources in the Scheme. The
restriction on tenancy size and the insecurity of tenure for those who actually farm the land, under
the wide variety of arrangements on the ground (wakeel system, share cropping, land lease
system, etc) do not facilitate stability, long term land improvements, or investments, which may
improve land productivity. The restrictions further limit the growth of incomes of those tenants
who may be competent and ambitious enough to aspire to larger farm operations with increased
capital input it implies.

13. Sub-division and smaller holdings did cause more families to be absorbed in the Scheme,
thus aiding a sense of equity and social justice. But farm size remains a critical constraint,
particularly as smaller tenancies did not necessarily mean greater effort (per unit area) by the
tenant and his family, or greater intensification of cropping system or purchased inputs which are
subject to a high degree of centralized control.

14. The main argument is that "the institutional organization arrangements in the Gezira
Scheme fail to provide any incentives for working and investing on the farm. The system suits the
average but penalizes and frustrates the innovative and self-reliant. In consequence, the latter
group directs its effort to other outlets, not frequently, off the Scheme. Aged men and women are
left behind in control of tenancies; the overall outcome being the process of decay and
stagnation."85

15. From discussions with Gezira Board officials, it appears that the minimum holding to
sustain a 5-7 person family is 2 feddans in a five-rotation system, i.e., 10 feddans. The general
conclusion from discussions with Block Inspectors in the Scheme was that the following
distribution of tenancy sizes in the area is probably accurate based on their records.

84 MohamedAbdel Salam, InstitutionalImpedimentsto Developmentin the Sudan Gezira Scheme,in

ElfatihShaaeldin(ed);op.cit.
85Ibid.

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TABLE30: DISTRIBUTION
OFTENANCIESBY SIZE
Size of tenancy in feddans Percentage of farmers
8 15
10 30
20 50
40 5
Source: Block Inspectors of the areas visited during the Mission
16. Among the farmers, there is an awareness of the social benefits, which the fragmentation
brings; however, there is also a realization that this fragmentation is only possible as long as full
costs are not enforced on the smaller holdings. Consolidation would clearly squeeze out the
poorer tenants and a consideration of the social costs associated therewith will need to be
considered.

17. A study by Farah8 6 observed, using a Chi-Square test, that there is a significant positive
correlation between the tenancy size and the generated additional income at the 5 percent level.
Hence, the tenants operating the small-size tenancies are not only incapable of financing most of
the agricultural operations, but also sometimes fail to cover their family expenses. As a
consequence, a large proportion of these tenants resort to borrowing from rich tenants and local
moneylenders, who insist on 'sheil'. Farah's study further showed that there is an inverse relation
between tenancy size and those who experienced the sheil system.

18. Furthermore, although women's participation in agricultural activity is becoming important

in many tenancies, a significant difference seems to exist with respect to the contribution to
family and wage labor between the wives of the large tenancy holder and the wives of the smaller
tenancy holders' wives. While the wives of larger tenancy holders only participate in a very
limited way and only on their husbands' farms, wives of small tenancy holders participate
effectively in agricultural activities and contribute to both family labor as well as wage labor'7
Thus it could be argued that in the case of poor tenants' households, the deteriorating economic
conditions force the women into taking on the double burden of domestic work and (self or
waged) farm work to help in securing the basic necessities of their families' survival.

19. The rich farmers have considerable economic advantage with regard to their access to
technology. Through their access to important leadership positions in the Famers' Union and
machinery and marketing cooperatives, and to the Gezira Board, they are able to control
agricultural machinery, such as combine harvesters, tractors and inputs. They are subsequently
able to hire out such services to small holder tenants at high rental fees.
20. Therefore, it is argued that the present organization of the Scheme does not entirely stifle
the creative energies and faculties of the tenants. Some of better off have developed into affluent
owners of tractors, flour mills, lorries, shops etc., and others have large farming undertakings in
the other parts of the State and elsewhere in the Sudan.88
21. Tenants View on the Land Tenure System: The practice of selling tenancies is currently
being practiced in the Scheme, but is highly restricted by the Scheme management. The trend of
acquiring land through sale will increase, according to the tenants, because of the present adverse
economic conditions. The view expressed by many tenants is that the sale of tenancies should be

86 MohamedAbdelSalam,ibid.
87 MohamedAbdelSalam,ibid.
88 Mohamed hashim Awad, (1987); The evolution of Land Ownership in the Sudan; in Elfatih Shaaeldin
(ed);TheEvolution of AgrarianRelationsin the Sudan,TheHague,1989

126
 Annex 5

de-regulated. However, the tenants are aware of the possibility of land speculation and the
increased possibility of land accumulation at the hands of few rich landowners, which could lead
to the widening of the gap between the tenants and laborers.

Assets Ownership,Credit and Debt

22. Assets Owned by Tenants: In the tenant villages, household properties include
refrigerators, radio, TV sets, and gas cookers. It was reported that while 50 percent of the
households have radio sets in their houses, less than 10 percent own TV sets and refrigerators. In
recent years, the number of tenants with these household amenities has increased because of the
number of migrants working abroad.

23. The Mission was informed that the number of tenants with tractors and harvester is less
than 5 percent in the Gezira. Vehicles are more common among the big tenants and the number
of cars has increased in recent years because of remittances from the migrant laborers abroad. It
is estimatedthat about 8 percent of the tenants own pick-up vehicles. Those who own lorries are
mostly traders and they make up less that 2 percent of the tenants in the Gezira. The recent study
conducted by the Socio-EconomicUnit of the Gezira Board showed no significant increase in the
number of tenants owning agricultural machinery and vehicles. Migrants in the Arab oil
producing countries appear to be the main suppliersof the vehicles in the Gezira, as it is the case
in many parts of Sudan.

24. The existing distribution of vehicle and large machine ownership in the Gezira Scheme is
rather skewed in favor of the rich tenants who combine farming with trade. The result of a survey
on machinery conducted in 1979 in the Gezira Scheme indicated that about 80 percent of the
tractors and 68 percent of the combine harvesters operating in the Scheme were owned by trader-
tenants. This was largely due to the credit policy adopted by the AgriculturalBank of Sudan and
encouraged by the Gezira and Managil Farmers Union Executive Board. The Agricultural Bank
offered credit only to those who satisfied the principle of credit-worthiness, irrespective of
whether they were tenants or not. This therefore benefited the traders and the rich tenants. The
same study argues that the Farmers' Union often uses its political power to influence the
Agricultural Bank to offer credits to the wealthy tenants. This fact is important because the
private sector machines perform large parts of the dura, groundnut and vegetable production
operations.8 9 The Mission was informed that the existing situation is very similar to that
observed by the 1979survey.

25. According to the Gezira Board, 40 percent of farmers have animals, while 60 percent do
not. Studies conducted by the Social and Economic Development Department observed that on
average, tenants have an average of 12.4 animals per household, of which 2.7 were cattle and 8.6
were small ruminants and the rest were donkeys. Big tenancies generallyhave more animals than
the small tenancies.

89 FarahHasanAdam;Evolutionof the GeziraPatternsof Developmentwithinthe Contextof the History

of SudaneseAgrarianrelations.In ElfatihShaaeldin(ed);ibid.

127
 Annex 5

Table31: AverageNumberof AnimalsOwnedper Household

Sizeof Tenancy Sheep Cows Goats
All Sizes 4.4 2.7 4.2
Large 7.5 5.5 -5.0
Small 3.7 2.1 4.0
Source:SudanGeziraBoard,GeziraRehabilitationProject,GeziraSchemeTenantsHouseholdSurvey,1987/88,Final
Report,1991.

26. In conclusion,therefore,thosetenants who have diversifiedtheir incomebeyond farming

(to trading,dairyproduction,smallindustry,etc.)clearlyhavegreaterresilienceto adversity.

27. Assets Owned by the Laborers: The laborers, who are predominantlymigrant
population,make up a distinct social group in the scheme,althoughin some villages they live
along side the tenants. They live under extremelydifficultconditionswithoutaccess to basic
socialservices. However,it is evidentthat throughthe sharecroppingsystemmany of the long-
term laborersare acquiringwealthand some now own sheep,goats, poultryand cows. A study
conductedby the Socio-EconomicDepartmentin 1993foundthat goats were the animalsmostly
ownedby the camp population. It was estimatedthat 75 percent of the camp householdshad
goats and 56 percent had sheep. However,the average number of animals owned by the
householdsin campis very small,estimatedto be less than3.

Informal Credit System and Increasing Debt

28. The formalcreditsystemthroughthe SudanGeziraBoardand the debtowedby tenantsto

the commercialbanksis discussedelsewherein this report. The informalcredit systemwill be
discussedhere.

29. Farmers observed that the Gezira Board and Banks tend to lend largely to the most
successfulfarmerswith firm collateral. If formal credit is not available,credit from informal
sourcesis oftensought. This informalcredit system (the "sheil" loan system whichis provided
againstfutureproduction)is a veryexpensivecreditsystemprovidedby merchantsand better-off
farmers. The sheil system is an importantsourceof credit for tenants in the Gezira,especially
amongthe small tenantswith less than 10 feddans;it is especiallyused for sorghumand other
farm crops (not for cotton and wheat). However,the sheil system tends to lead cycles of
increasing indebtedness. Though available to women, women farmers tend to more
cautious/reluctant
to enter intodebtfor socialand culturalreasons.

30. The sheil system compelsthe borrowerto pledgepart of his crop at or after the planting
datesas collateral. A tenant mayborrowfrom a villagemerchantor any othermoneylenderwho
will specifyin what formhe mustbe repaid. There is usuallya largedifferencebetweenthe loan
receivedand the value of the repayment,and this is one of the causes of the poor economic
conditionforthe majorityof the tenants.

31. The borrowerrepays the loan in kind and the crops that are readily acceptedare those
which can be easily stored. The sheil system is not used frequentlyfor financinggroundnut
productionbecauseof the dominanceof sharecroppingsystemin groundnutproduction.

32. The sheilsystemis not generallyusedfor productiveinvestment,rather,in most cases it is

used for the purchaseof items for family consumptionor for fulfillingsocial obligations. The
credit offeredundersheil systemusuallyleavesthe tenantworseoff and tied to the lender. When

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 Annex 5

the creditor is the village shopkeeper, the farmer may not receive the full value of the credit in
cash; part of it is usually received in the form of consumer goods. There is also a tendency for
the prices of such goods to be higher that the normal markets prices since the farmer is not in a
position to bargain.

33. It was reported to the mission that tenants indebtedness has increased markedly in the
period following the shift from "Joint Accounts" to "Individual Accounts". For some tenants the
tenancy has become a liability. They stay on the farm hoping that the next year will make ends
meet. Many farmers complained of constant indebtedness, since as soon as they pay one set of
debts, others accrue. Many farmers noted that the only way for them to survive from one season
to the next is by going further into an ever-increasingdebt.

Water Pricing and Management

34. All farmers are required to pay a fixed water assessment every season. All farmers, in
accordance with the size of their tenancy pay the same fixed price. However, most farmers with
whom the mission discussed, complained that they rarely received the amount of watering, which
are stipulated in the agreement with the Board. Farmers therefore felt they were charged unfairly
for the water, as they often did not receive the allocated amount. In addition, many farmers
complained that if they were on the end of the canal, at times they received nothing at all, and
their crops therefore failed accordingly.

35. From discussions with tenant farmers, the mission found little appreciation for what "the
economic price" or the "market price" of water might be. Rather there was the expectation that
the Board should provide them with all necessary water so that they might produce the crops
required. Given the years of poor and unreliable delivery of services by the Gezira Board,
farmers preferred to pay by the watering. Some farmers expressed that if they could pay per
required watering on actual delivery, they would be willing to pay a higher water price.

36. The laborers, in particular those involved as sharecroppers, expressed that they would like
to be involved in the water management, including the maintenance of canals, allocation of water
and payment of water charges. At the moment, it is the tenant who has a direct connection to the
Scheme management, while the sharecropper, who has a direct interest in the water supply, is not
involved in any of the discussions with respect to the water supply or charges.
Off-FarmEmployment
37. While the full picture is not available to the Mission and would require further social
studies, it is apparent that the some of the tenants engage in non-agricultural income earning
activities. For the wealthier and better-educated tenants, this includes work in Governmentjobs
or in private businesses or trading in Khartoum or Wad Medani.

38. For the laborers of the camps, work includes day laboring in the brick kilns and causal
work in urban markets. It is estimated that about 20 percent of the camp population are engaged
in such activities. The nearer the camp is to the town, the higher the possibility of involvement in
non-farm activities.

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 Annex 5

Poverty Pockets and Chronic Poverty on the Increase.

39. Researchers estimate that poverty in Sudan has increased by an annual rate of 4.8 per cent
from 45 percent in 1978 to 91 percent in 1993. This increase in poverty is manifested in upward
trends in infant mortality and malnutrition.90

40. Life in the Gezira is characterized by pervasive social inequality. The different socio-
economic strata are living distinctly different lives. Absentee farmers with other incomes are
living in Wad Medani or Khartoum; on-farm tenants with larger holdings are braving the odds to
continue to make ends meet in Gezira, while farmers with smallholdings are falling into ever-
increasing debt.

41. In the Gezira the social setting of the village communities and the close inter-relationships
between different communities in different villages provide some social support mechanisms
during times of adversity and depressed incomes. Family members are bound to assist and
provide support for social occasions, e.g. circumcisions, marriages, deaths, etc. In almost all
villages, migration of young people to the urban centers and to oil producing countries in the Gulf
is providing an important source of remittance income to tenants in the Scheme.

42. At the far end of the spectrum, and in a group all by themselves, are the camp populations,
who live lives with no security buffer such as grain stocks; savings, remittances or access to
credit and with little resilience within the community to withstand adversity. These groups live in
an environment with no social services, with high health risks caused by poor sanitation,
contaminated water supply; with insecure incomes and with ever more uncertain fuitures.

Child Labor
43. Official statistics from the census do not indicate that there is a large proportion of children
in the labor force. However, these statistics appear to have entirely missed the children of the
labor camps.

44. Children of tenants appear to constitute a very small percentage in the labor force engaged
in agriculture, estimated to be less that 10 percent. The majority of these children between 6 and
16 years are indeed attending school. Their participation in farm related labor is generally after
the school session, when they assist their parents in agriculture or domestic work.

45. However, among the migrant laborers, the involvement of children in labor is large,
particularly girl child laborers. Less than 10 percent of these children are in school, thus the
majority is engaged in agriculture with their parents. It was clear from observation that there were
a large number of children working with their parents in agriculture involved in cotton picking,
harvesting of groundnuts and vegetables. Girls usually accompany their mothers to the fields to
assist them. Boys do field work as well as look after animals.

90Sudan Government,Ministryof Manpowerin collaborationwitth ILO, (1997),Trends and Profiles of

Povertyin Sudan,1990-1997,Khartoum;
AbdelNasirMoh.ZeinMoh.Salih,(1999);Povertyand ChildHealth:A CaseStudy of WadMedaniTown;
unpublishedPh.DThesis,Universityof Khartoum,Khartoum;
FerganyNadir,(1997):"Map of RelativePovertyin the North, 1993",a paper presentedto the National
workshopon Poverty,UNDPandMinistryof SocialPlanning,Khartoum;
UNDP,SudanHumanDevelopmentReport,1998(draft)

130
 Annex 5

MAIN CONCLUSIONS
OF ECONOMICANALYSIS

Land Tenure Issues

* There is an urgent need to address land tenure issues. Land fragmentation is increasing at a
rapid pace and reform of the rules pertaining to land transfer, sale and consolidation is of
paramount importance.
* The increasing numbers of absentee landlords is also in need of being addressed. The land of
the absentee landlords is reportedly farmed sub-optimally, as those who farm it may not have
the same level of security or long term interest in land care.
* New arrangements must also be made with the original landowners, whose land was
expropriated and who receive a laughable rent for the land they were obliged to make
availableto the Scheme.
Box 2: Gender Aspect

A numberof factorshavecontributedto the increasedimportanceof womenin the labor force:

* Educationresultedin reluctanceof sons of tenantsto work in agricture. Sonsof tents ae attacted
to whitecollarjobs; thishas openedup opporunitiesforwomentenantsaswellas womenlaborersand
sharcroppers.
* The out-migration of men during seasons of low productivity and low prices resulted in low economic
returns for tenants and high indebtedness,In such situations,men mfi search for better
employmentin urbancentersin the countryor migrateto the Araboil producingcountries.Womenfill
the laborgap createdby this movement.
* Povertyand bad economicconditionsinducedwomento enterthe labormarkerto contributetowards
the maintenanceof the fanilies.

Theparticipationof womenas laborershas becomeverysignificat. lbe numberof seasomalmalemigrants

has declined, while that of females has increased. It is esfimae that 80 percentof seasof migrant
labores are women,andthey are involvedin cottonpicking,athough they are also engagedin the harvest
of groundnutsand vegetables.

Women migrants practice sharecropping with tenants on a large scale in groundnuts and vegtable
production. They also sub-let plots of land from tenants. It is reported that the tents trust them more than
they dothe men.
Mostof the womentenantsworkin theirtenanciestmselves, and someimesthey supervis andmanage
work in the tenancies,whilerelyingon hiredlabor for agriculturaloperaions. Womenwhodo not work on
their tenanciesare either fom wealthyfamilies,are old or disabled.Womentenantshaveequal accessto
productioninputs,e.g. irrgationwater,seedsandchemicals.

Womengenerallyhave limited access to extensionand trainingagriultural extensionservices due of

socio-culturalreasons:the Gezira Boarddoes not organizesepaate demonstationprogrms for women
tenants,and the socialtraditionspreventwomenfrom attendingmalegathwerings. Moreover,the high rate
of illiteracyamongwomenmakesit difficultforthe extensionservicesto reachthe women.

SourceXMs. lqbalAhmedHagar,Manager,Planning,SocialandEconomicResearch,GezimBoard

131
 Annex 5

Womengenerallyhave weakbaraining pow This isw fe fet he.shirlst

A studyby the SocialDevelopmentUnit at 48p n hf t ece,
i.e. their ownfiuds (savings),to grtheiros 14p i11 petobain
loansfromrai withutinteresand ii trely on sheilborrowing.
Marketing:
Crops marketeddirectly by tenants includedsorghu,o ns,an e l Wm erly
delegateto men,mainlyrelativesor middlemen, to mattheircp A sltofew
sell their owncrops. However,the appa to be soi
channells.76 percent of, the women sold their ogu hog hi eatvsad1 ecn hog
middlemenat the farm6 gate, 8 percentmarktedit bythsee.Hwer,wtrgadtogodns 5
percentsold to the middlemenat the farm. 36 s reatves and on 99perent
percent
marketedit by themselves.
WomenI'sin Decisionmag
Geziratenantsparticipatein decisionmaigadangmtofteShetrohthireesntvs
from the grm tevlothBad. Te Vlled Ciist el ve

Womenwerenare notrp t sedorgniztios, a arofm

these bodiesanhaetergttvoe lieayadtescatadinprenwote omeriig
this right.Thifelnofsbdiainadteattdsometoadwoecoriteote
exclusionof wmn
WomenlOtga",ztions
Gezirawomenhave izd cthmlves
ino a numb s s and e i s r of
their supportmechanissadsriastaeisThmotipraan olawn soto ste
RotatingCeiAscito(tesnu,whcisamnhycleio fotiuin ywubesna
village.Temthycletoisgvntadifrn ebrothgoueahmthith1thwmn
to saveadsedteronmnyi h anrte at

Gender Issues
*Women tenants are a growing phenomenon in the Gezira. The Scheme needs to develop
outreach and extension, which is delivered so that women tenants can have access to these
services. Female extension officers need to be recruited and extension packages need to be
tailored to illiterate women tenants.

Desire for Changes in Cropping Patterns

*The Gezira Board has been slow to examine the possibility of fundamental changes in
cropping pattern, which is the expressed desire by many of the farmers. It is reported that
disillusioned tenants lost interest in the Scheme due to high cost of farmnoperations and the
low financial returns on wheat and cotton; as a result productivity has declined. There is a
clear distinction in farmers' mind between "the tenants' crops" (legumes, vegetables,
sorghum and groundnuts) which are money makers, and the "the government crops" (cotton
and wheat), which are generally money losers. The tenants are dependent on income from
other sources to compensate for their low income from cotton and wheat.

132
 Annex 5

Credit Issues

* Facilities for small-scale credit need to be developed to avoid the high interest payments
required through the sheil system. Credit facilities need to be developed so that
sharecroppers and women farmers, who increasingly make up a sizable proportion of the
farming communities, can have access to cheaper forms of credit. Some farmers suggested
the need for a "tenants credit and reserve fund" under the Gezira Board.

Asset Ownership and Diversification

* Farmers and laborers who have cattle, sheep and goats are generally fairing better, as they
have an altemative income source as well as nutritional supplements from dairy production.
Further encouragement of cattle and other livestock would greatly enhance the creation of
poverty and adversity buffers in the communities.

* Other forms of diversification of income generation could also be encouraged to improve

resilience to adversity.
* Alternative employment opportunities are limited in the Scheme and in the surrounding areas.
Poor migrant laborers are limited in their ability to seek alternative employment opportunities
outside the Scheme due to poor transport facilities and low incomes.
Water Pricing and Management

- Among the farmers there is not a full appreciation of what a fair water price might be,
however, there is a view that the present system of fixed water charges is not working and is
in need of reform. There is a clear need to align the price charged for the water with the
number of waterings and the reliability of the delivery of the water.

* Sharecroppers and others who are farming under the many private arrangements, need to
have a say and involvement in the water management and water payments, so as to increase
the efficiency of production at the farm level. At present the Sudan Gezira Board deals only
with tenants on water and service questions and as a result the concerns of sharecroppers are
not taken into account. This introduces inefficiencies in the system.

Labor Union Organization

* The Farmers' Union derives its strength from the tenants' desire to protect and further their
own interest vis-a-vis the other parties. In the past, the Union achieved successes in the form
of an increasing diversion of cotton proceeds either directly in the form of increased share or
in terms of social development-resources.

* By contrast the wage laborers employed by the tenants have never been organized and their
wages and conditions of service have been determined entirely by a free market on the one
hand and by restrictions placed on their camp conditions by the Scheme, on the other.
Future prospects

46. From an socio-economic viewpoint, the management of the Gezira is at a clear crossroad:

47. Continuation of the status quo will lead to increase of tenancy abandonment, to greater
numbers of absentee farmers, land fragmentation and the associated loss of productivity. The

133
 Annex 5

perseveranceof the policy originatingin the 1920sof denyingrightsand servicesto the migrant
labor population will inevitablyprovide a fertile growingground for increasedpoverty and
diseaseas wellas lay the potentialfor futuresocialunrest.

48. If majorreformsare introducedpertainingto landownershipas well as to waterpolicyand

management,includingreformsto the rights of the migrant laborgroup engagedin most of the
actual farmingactivities,it would appearthat productivityof the GeziraSchemecould improve
dramatically.An improvedperformanceof the Schemewill also mean an improvedtax base for
the Stateof Geziraand thus improvedsocialservices.

49. The Schemecontinuesto be the lifelinefor the majorityof Sudanesepeoplein the State of
Gezira and beyond. Improvedperformanceof the Schemewill not only increase income of
tenantsand laborersbut will havepositiveramificationsway beyondthe Schemeand its farmers,
agriculturallaborersand otherworkerswho indirectlybenefitfrom it.

134
 ATTACHMENT 1 - GROUP MEMBERS - SOCIAL DEVELOPMENT

* Ms. Iqbal Ahmed Hagar, Manager, Planning, Social and Economic Research, Gezira Board
* Mr. Ibrahim at Feki Mohamed Babiker, Head of Trade Union, Financial Secretary
i Sheikh Omar Beshir Sallam, Member, Executive Council of Farmers Union
* Mr. Mohamed Abdel Rahim Said, Manager, Training Unit, Gezira Board
* Ms. Bakheita Baballah, Manager, Archive Dept.,, Gezira board
* Mr. Mokhtar Ahmed Mokhtar, Ministry of Agriculture, Khartoum
* Dr. Paul Wani Gore, University of Khartoum
* Ms. Inger Andersen, World Bank

135
 ATTACHMENT2- SOURCESOF DATA

I. Themain sourcesof datafor this reportare the reportsfromthe GeziraBoard(in particular

those from the Socio-Economic Development Research Unit), official census results, in particular
the 1993 census, research reports (published and unpublished). Additional data was collected
from group and individual interviews with farmers and laborers during the one-week Mission
visit to the Scheme in Gezira.

2. The basic information on the social and demographic profile of Gezira include:

1. The total population in the State and age-sex structure,

2. The ethnic origin of the population,
3. Size of households,
4. Educational background of the population, access to drinking water, household sources of
energy and sanitation facilities; health services and health issues (e.g. impact on malaria and
Bilharzia)

3. Interviews and group discussions with farmers and laborers supplemented some of the
above information together with observations during the field. The main issues discussed with
farmers and laborers covered the following:
(a) Relationship between various ethnic and social groups; tenant/laborer relationship
(b) Hired labor - family labor issues
(c) Poverty issues; employment and food security
(d) Sources of household income and productivity issues.
(e) Ownership of animals, household and farm assets
(f) Availability and access to credit, formal/informal credit system and household level
indebtedness.
(g) Availability of social services, and financing of social services and decline in social services
(h) Matters on education, health and social services
(i) Sharecropping systems and other land management arrangements,
(j) Farmers' opinion on decision making processes and water management
(k) Land tenure arrangements
(I) Views of the migrant laborers on decision making processes and role in water management.

4. A total of five tenant villages were visited in the main Gezira Scheme during the Mission,
and discussions were held with group of tenants during these visits. The average number of
tenants in each group was 10. In addition to the tenant villages, six labor camps were visited.
One of the camps was established following the 1984/85 drought in Western Sudan. Discussions
were held with group of laborers and the average number of laborers in each discussion group
was 8. Women laborers were not available for interviews, in spite of attempts by the female
member from the Gezira Board who was with the Mission during the visits.

136
 ATTACHMENT 3 ESTIMATED EXPENDITURESON EDUCATION, HEALTH SERVICES AND
OTHER SOCIAL SERVICES (WATERAND ELECTRICITY).

Education
1. The average monthly salary of a basic schoolteacher is about SD 7,500 (or $ 29.1 at the
current rate of exchange 1$ = SD 257.5). The total number of teachers in the state is about
16,290. The total monthly salaries, for which the Local Authorities (mahaliat) are
responsible, amount to $ 474,039. The cost of textbooks, maintenance of building/water and
electricity, and stationary are generally met by the parents of the pupils, through a monthly
contribution which varies between SD 100 to 500, in addition to the a yearly fee of about SD
1,500. The mahaliat are also responsible for paying the salaries of other non-teaching staff,
like watchmen.

Health
2. The average salaries of health workers are shown below:
* Medical Assistant: SD 12,500per month ($48.5);
* Mid-wife: SD 12,500 per month ($48.5)
* Nurse: SD 8,000 per month ($31.1);
The total monthly salaries for 1005 medical assistants, 4,173 nurses, 2,300 midwives are
estimated to be equivalent to $289,612.8 at current rate of exchange. These salaries are also
paid by the mahaliat. Additional salaries are paid to watchmen, and the mahaliat are also
responsible for paying water and electricity charges. Drugs and other medical supplies are
provided on a cost-recoverybasis under the current health policy.
Water and Electricity
3. Water and electricity are provided and maintained by the communities through their monthly
contributions to the village "Salvation Committees". This contribution varies between SD
500 and 700 per month. Villages currently without electricity usually make collections after
the estimated cost of bringing electricity to the village and for connection on the main streets.
In order to keep the teachers and health personnel working in the villages, communities
usually make additional contributions to pay for incentives of these personnel. Thus, the
burden on the communitieshave increased.

137
 REFERENCES

Mohamed Abdel Gadir Adam; (1996); The Policy Impacts on Farmers Production Resource Use
Efficiency in the Gezira Irrigated Scheme of Sudan, Vank Kiel Verlag, Germany

Farah Hasan Adam; Evolution of the Gezira Patterns of Development within the Context of the
History of Sudanese Agrarian Relations. in Elfatih Shaaeldin (ed.), The Evolution of Agrarian
Relations in the Sudan: A Reader, The Hague, 1987.

Mohamed Hashim Awad: Agricultural Development in the Gezira Scheme: A Rejoinder, in

Elfatih Shaaeldin (ed.), The Evolution of Agrarian Relations in the Sudan: A Reader, The Hague,
1987.

Sharif el Dishouni, (1989); Traditional and Modernization in Sudanese Irrigated Agriculture:

Lessons from Experience, DSRC Monograph Series, No. 36.

Kamil Ibrahim Hassan; Production Relations in the Sudanese Agriculture: The Case of the Gezira
Scheme, DSRC Seminar No. 54, November, 1984

Fergany Nadir, (1997): "Map of Relative Poverty in the North, 1993", a Paper presented to the
National workshop on Poverty, UNDP and Ministry of Social Planning, Khartoum.

Mohamed Zein Ahmed Mohamed Nuori, (1999); The Role of the Gezira Scheme on Sudan
Economy between 1975 - 1996,Unpublished M.Sc. Thesis, University of Khartoum (in Arabic),
Chapter on "Social Services, and Impact of Decline in Performance of the Scheme".

Awadalla Mohd. Rahamtalla, (1998); Differentials in Levels of Human Development in Areas of

Gezira Scheme: The Case of Tayba and Abu Guta Areas; Unpublished M.Sc. Thesis, University
of Khartoum (in Arabic), Khartoum; See in Particular Chapter 4 on "Development of Social
Services).

Mohamed M. Abdel Salam; "Institutional Impediment to Development in Sudan Gezira Scheme",

in, Elfatih Shaaeldin (ed.), The Evolution of Agrarian Relations in the Sudan: A Reader, The
Hague, 1987.

Abdel Nasir Moh. Zein Moh. Salih, (1999); Poverty and Child Health: A Case Study of Wad
Medani Town; unpublished Ph.D. Thesis, University of Khartoum, Khartoum.

D.S. Thorton; Agricultural Development in the Sudan Gezira Scheme; in Elfatih Shaaeldin (ed.);
Evolution of Agrarian Relations in the Sudan, The Hague, 1987

Galal Mahmoud Yousif; (1997); The Gezira Scheme: The Greatest on Earth Under one
Management; Africa University House For Printing, Khartoum - Sudan

The Republic of Sudan, Gezira Rehabilitation Project; Gezira Scheme Tenants Household
Survey, 1987/88,Final Report, June 1991.

Sudan Gezira Board; Gezira Rehabilitation Project, Gezira Scheme Tenants Household Survey,
1987/88,Final Report, 1991.

138
The Republic of the Sudan, Planning and Socio - Economic Research Unit Sudan Gezira Board,
Gezira Rehabilitation Project; Migratory Labor Settlements in the Gezira Scheme, Final Report,
Jan. 1994.

Sudan Government, Ministry of Manpower in Collaboration with ILO, (1997), Trends and
Profiles of Poverty in Sudan, 1990- 1997, Khartoum

The Central Bureau of Statistics; 1993National Population Census of Sudan, Khartoum

UNDP, Sudan Human Development Report, 1998(draft)

139
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