Module 9 - Mali: Institutional Reform to Focus Public Role on Essential Public Goods

A 1998 survey estimated that 72 percent of Mali's people live below the poverty line, with poverty widespread in rural areas. Mali has areas with good agricultural potential. In the short and medium term, poverty reduction in Mali is dependent on accelerated growth in the agricultural sector.

Increased irrigation was expected to be one effective means to enhance productivity. However, without effective policy reform, major investments in the irrigation sector cannot be expected to result in significant benefits. Reform required (1) reorganizing the management of the Office du Niger (ON), the major public regional development agency specializing in irrigation, (2) establishing secure land tenure for farmers, and (3) liberalizing pricing and marketing policies for paddy and rice. ON's mandate included the construction, operation, and maintenance of irrigation facilities; extension and applied research; and commercial activities, such as procurement and distribution, agricultural credit provision, and paddy and rice marketing and processing. Redefinition of ON’s activities was achieved over time and completed with this project.

Project Objectives and Description

ON’s Consolidation Project sought to reduce poverty, increase agricultural production, and reduce government subsidies for agriculture by providing strong incentives to farmers to increase production, improve the efficiency of irrigation management, and create mechanisms for sustainable irrigation development. ON's mandate has been redefined and is now limited to activities directly related to the management of the land and water resources, with most commercial activities being progressively transferred to farmers or other economic agents.

The project financed the following:

• Sectoral policy reforms: (1) progressive divesting of ON’s commercial activities, (2) liberalizing rice prices and marketing, and (3) establishing land tenure security for ON farmers.
  
  
• Institutional reforms: (1) streamlining ON’s relationship with the government through performance contracts, (2) reorganizing and capacity building of ON, and (3) restructuring ON’s finances to eliminate its chronic deficit.
  
  
• Irrigation infrastructure and agricultural services in five areas: (1) rehabilitation and modernization of the irrigation network and perimeters, (2) a pilot scheme to test farmers’ capacity to participate in irrigation rehabilitation and development, (3) applied research on agricultural services, (4) improved resource management, and (5) agricultural training and extension to promote improved production practices and crop diversification.