India - Bihar Agricultural Credit Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3704 PROJECT PERFORMANCE AUDIT REPORT INDIA BIHAR AGRICULTURAL CREDIT PROJECT (CREDIT 440-IN) November 30, 1981 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS ARDCCP - Agricultural Refinance and Development Corporation Credit Project ARDC - Agricultural Refinance and Development Corporation BACP - Bihar Agricultural Credit Project BAMP - Bihar Agricultural Market Yard Project BWDC - Bihar Water Development Corporation CB - Commercial Bank GOB - Government of Bihar GOI - Government of India LDB - Bihar State Cooperative Land Development Bank MID - Minor Irrigation Department MTW - Medium Tubewell PCR - Project Completion Report REC - Rural Electrification Corporation RBI - Reserve Bank of India SAR - Staff Appraisal Report SEB - State Electricity Board STW - Shallow Tubewell SGWIO - State Groundwater Investigation Organization SPPS - Single Purpose Pumpset CROPPING SEASONS Kharif - June to October Rabi - October to February Summer - February to June FISCAL YEAR ARDC & LDB - July 1 to June 30 GOI & GOB - April 1 to March 31 FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT INDIA BIHAR AGRICULTURAL CREDIT PROJECT (CREDIT 440-IN) TABLE OF CONTENTS Page No. Preface ............................................................ i Basic Data Sheet ................................................... ii Highlights ............................................................ iv IDA Overview of the ARDC Project Completion Report ................. 1 Attachment 1: ARDC Comments ..................................... 9 PROJECT COMPLETION REPORT Summary and Conclusions .......................................... 13 I. Introduction ................................................... 15 Background .................................................. 15 II. Project Implementation .............................. ...... 16 III. Organization and Management .............................. 21 Agricultural Refinance and Development Corporation (ARDC) .............................. ...... 21 Bihar State Cooperative Land Development Bank (LDB) ...... 21 Commercial Banks ....................................... 25 Bihar Water Development Corporation (BWDC) ............... 27 State Groundwater Investigation Organization (SGWIO) 28 Minor Irrigation Department (MID) ........................ 28 IV. Farm Benefits .................................................. 29 Average Size of Cultivated Holdings ........................ 30 Intensity of Cropping and Cropping Patterns .............. 30 Costs of Cultivation ......................................... 31 Farm Income ................................................. 31 Sale of Water ............................................... 32 Purchase of Water ........................................... 33 Farm Business Income and Financial Rates of Return (FRR).. 33 Comparison of "Project Beneficiaries" With "Optimal Farmers" ............................................ 33 Unit Cost of Investment ..... ............. 34 Total Project Benefits ........ .34 V. Conclusion .......... 36 Annexes Map This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT PERFORMANCE AUDIT REPORT INDIA BIHAR AGRICULTURAL CREDIT PROJECT (CREDIT 440-IN) PREFACE This is a performance audit of the Bihar Agricultural Credit Project in India for which Credit 440-IN was approved October 23, 1973, in the sum of US$32.0 million. The final disbursement in respect of this credit was made on February 29, 1980. The audit report consists of highlights prepared by the Operations Evaluation Department (OED), an IDA Overview dated June 12, 1981, contributed by the South Asia Region and a Project Completion Report (PCR). The PCR was prepared by the Agricultural Refinance and Development Corporation (ARDC) and is with only minor editorial changes, attached to the overview. The audit is based on a review of the Appraisal Report (No. 230-IN) dated October 3, 1973, the President's Report (No. P132-IN) of October 10, 1973, the Credit Agreement dated November 29, 1973 and the PCR; Bank staff associated with the project have been interviewed. The draft report was sent to the Borrower on July 22, 1981 for comments. The comments received have been included as Attachment 1 to the IDA Overview and individual points have been taken into account. The audit suggested some minor changes to the PCR which were accepted and included therein. Between them, the IDA Overview and the PCR provide excellent commentary on project experience and, on the basis of OED-s abbreviated procedures, the audit finds no reason to query the main conclu- sions of those two documents.  - ii - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET INDIA BIHAR AGRICULTURAL CREDIT PROJECT (CREDIT 440-IN) KEY PROJECT DATA Actual or Item Original Reestimated Project Costs Rs 450.OM (US$60.0 M) Rs 433.0 M Underrun (%) - 3.7 Credit Amount (US$ M) 32.0 32.0 Disbursed 32.0 32.0 Cancelled - - Repaid - - Outstanding 32.0 32.0 Date Physical Components Completed 06/30/77 12/31/79 Proportion Completed by Above Date (Number of Investments) 100 207 Proportion of Time Overrun (%)- 77 Economic Rates of Return (%) 21-32 17-40 Financial Rates of Return (%) 16-27 20-41 Cumulative Estimated and Actual Disbursements (US$ million) FY74 FY75 FY76 FY77 FY78 FY79 FY80 Appraisal Estimate 0.3 6.9 17.7 32.0 - - - Actual 2.0 5.7 10.4 14.4 18.6 27.5 32.0 Actual as % of Estimate 667 83 59 45 OTHER PROJECT DATA Conception in Bank 1970 Government Application 1972 Negotiations 09/72 Board Approval 10/23/73 Credit Agreement Date 11/29/73 Effectiveness Date 03/29/74 Closing Date (Original) 12/31/77 Closing Date (Amended 6/9/77) 06/30/78 Closing Date (Amended 5/25/78) 03/31/80 Final Disbursement Date 02/29/80 Borrower GOI Excecuting Agency ARDC/LDB/CBs Fiscal Year of Borrower April 1 - March 31 Follow-on Project Name ARDC II (All-India Line of Credit) Credit Number 715-IN Amount (US$ M) 200 Credit Agreement Date 06/01/77  - iii - MISSION DATA No. of Manweeks Missions Month/Year Persons in Field Pre-appraisal 07/71 1 1 Appraisal 02-03/73 6 24 Supervision I 09/74 2 2 Supervision II 10/75 2 3 Supervision III 08/76 1 1 Supervision IV 05/77 3 2 Supervision V 01/78 1 1 Supervision VI 07/78 1 2 Supervision VII 02-03/79 2 2 Supervision VIII 00/79 2 1 COUNTRY EXCHANGE RATE India Currency Rupees (Rs) Exchange Rate: Appraisal US$1 = Rs 7.5 Intervening Years (1974-1980) US$1 = Rs 8.5 Completion Year Average (1980) US$1 = Rs 8.3 哺口 - iv - PROJECT PERFORMANCE AUDIT REPORT INDIA BIHAR AGRICULTURAL CREDIT PROJECT (CREDIT 440-IN) HIGHLIGHTS The Bihar Agricultural Credit Project (BACP) was to increase agri- cultural production through providing loans for minor irrigation investments. It was the tenth in a series of state-oriented agricultural credit projects, supported by IDA in India. The number of investments financed under the project was consider- ably higher than estimated at appraisal; this was due to lower unit cost (in real prices) and variations in the rupee-dollar exchange rate. The typical investment was financially and economically viable. Incremental production at full development is estimated at Rs 655 million (at 1978/79 prices). This is substantially higher than the appraisal estimate due to higher than expected increases in production and prices of paddy, maize, wheat and potatoes. Around 80% of the lending went to small farmers. An aspect of concern has been the poor loan recovery performance of the Land Development Bank (LDB), the main participating bank. This bank is now subject of a rehabilitation program. The ERR has been recalculated at 17-40% compared to 21-32% at appraisal. The following points may be of special interest: - overdues afflicted all participating banks and rose to about two-thirds of repayment demands (PCR, para. 3.08; IDA Overview, paras. 4.01-4.05); - State Government contributed equity capital to LDB to compensate for overdues (PCR, para. 3.09; IDA Overview, para. 3.03); - despite project funding, LDB lending stagnated for last three project years; commercial bank lending expanded however (PCR, para. 3.07; IDA Overview, paras. 3.04 and 3.05); - ARDC estimates misallocation of loans in about 3% of all approved cases (PCR, paras. 3.13 and 4.15); - main reason for increasing overdues was Government-s reluctance to take legal action against defaulters; other reasons were staff shortage, staff redeployment during the peak recovery season, loss of repayment capacity due to floods, consequent failure to resched- ule loans, and genuine distress among small farmers (PCR, para. 3.11; IDA Overview, para. 4.01-4.05);  - v - - initial implementation delays were due to slow administrative adjustments by participating banks but also to conflicting signals from Government to farmers concerning (i) eligibility for subsidies and loans, (ii) public versus private tubewells, and (iii) canal versus groundwater irrigation (PCR, para. 2.02; IDA Overview, para. 3.05); and - steps were taken in 1978 to accelerate disbursements and to ensure better loan recovery (PCR, paras. 2.06 and 3.14).  INDIA BIRAR AGRICULTURAL CREDIT PROJECT IDA Overview of the ARDC Project Completion Report 1/ General 1.01 The Project Completion Report (PCR) on the Bihar Agricultural Credit Project was prepared by the Agricultural Refinance and Development Corporation (ARDC). This overview is intended to supplement ARDC's review results with IDA's observations. 1.02 The PCR summarizes the phases of the project and analyzes the results and main issues. Particular attention has been paid to physical implementation in the field, institutional development, and evaluation of the impact at the farm level. For this purpose, extensive field surveys on a sample basis were carried out by the staffs of the participating institutions in Bihar under ARDC's guidance and supervision. 1.03 The project was one in a series of 10 state-oriented agricultural credit projects, and was followed up by the ARDC II Credit Project (Cr. 715-IN, 1978-1979), which being an all-India project included also Bihar. The ARDC II Project was effective in Bihar only after February 1980, since the Bihar Agricultural Credit Project was completed well behind the schedule. Achievements 2.01 Considering the targets set for the project and physical results attained, the project was quite successful. The project also indicates that by purposeful efforts and scheme approach the amount of institutional finance can be increased significantly in a relatively short time. The physical targets of the project were far exceeded and a larger part of the funds than envisaged went to the priority sector. The appraisal estimate of the number of investments was about 50,000, including 47,000 tubewells with pumps and about 3,000 separate diesel pumping sets. Because the actual investment costs were lower than anticipated and the mix of investments was different from that projected, and as a result of the depreciation of the Rupee, it was possible to finance a much larger number of units than originally planned. Out of the total 103,500 investments financed under the project, nearly 68,000 were tubewells and the rest, over 35,000, separate pumpsets. Because of the increase in the number of wells and pumpsets installed, the number of direct beneficiaries and those who could buy water from the tubewell owners increased from the appraisal estimates, 50,000 households for each group, to 103,500 and 196,000, respectively. About 56% of the shallow tubewell (STW) owners and 78% of medium tubewell (MTW) owners sold water to three purchasers each on average. 1/ This overview has been prepared by South Asia Regional staff. The original version of PCR prepared by ARDC with only minor editorial changes is attached to this overview. - 2 - About 80% of the agricultural loans and 65% of the amount lent under the project went to small farmers, compared with ARDC's all-India target of 50% of the amount of lending for small farmers. The employment effect was estimated to be 32 M man-days (12 M man-days of family labor and 20 M man-days of hired labor). In addition, the well construction work under the project generated employment of 1.9 M man-days of family labor and 1 M man-days of hired labor. 2.02 The average financial rates of return (FRR) realized for different models (STW, MTW, separate diesel pumps) range from 20 to 41%, and are somewhat higher than appraisal estimates, i.e., 16-27%. ARDC's PCR does not give ex post economic rates of return (ERR), but ARDC claims that they should be higher than the overall FRR of 29%, because of the taxes in investment costs and the increased prices of outputs. However, considering the administrative costs incurred by financing institutions, the net economic benefits need to be somewhat discounted. Based on the PCR data, the South Asia Region esti- mates that the ex post ERR for different investment types should range from 17 to 40%, compared with appraisal estimates of 21 to 32%. The ERR for the entire project has been estimated to be 28% (no overall ERR was estimated at appraisal). 2.03 Despite the attainment of major objectives, there were implementation problems. One was the deteriorating recovery rate of loans by the participat- ing banks (paras 4.01-4.06). Another was the delay in disbursements, which made it necessary to expand the project area and postpone the closing date by almost three years (paras 3.01, 3.05 and 6.01). The lag in disbursements was due largely to the overestimation of the unit costs of the investments and the depreciation of the Rupee, with the result that with the same amount of foreign currency it was possible to finance twice as many units as envisaged at appraisal. The physical targets were exceeded already by the latter part of 1977, only a few months behind schedule. At that time, less than 50% of the funds had been disbursed. There were several reasons why it was not possible to speed up the program during the original project period. The Commercial Banks (CB) in agricultural lending needed more experience. The Small Farmers Development Program (SFDP) overlapped with the project. 1/ Institution Building 3.01 The main implementing agency in Bihar was the Bihar State Land 'velopment Bank (LDB), which was originally planned to carry out 60% of the project lending. The LDB was the only financing institution which reached its physical targets before the original closing date. The final disbursements of the project funds by the LDB was 54%. 1/ Besides the ARDC/IDA Project and SFDP, there were several other programs operational in the same areas: Integrated Rural Development Program; Short and Medium Term Credit by the cooperative credit institutions; Farm Input Credit Scheme of GOB, Special Area Command Programs; IDA/ARDC assisted storage and marketing project; Animal Husbandry Program; and special Forestry and Horticultural Schemes. -3- 3.02 The LDB increased its branch office network during the project period from 101 to 130, and established Regional offices to supervise them. Yet the service facilities of LDB (as well as the CBs) remain very 1 1eate; one branch for each 4-5 blocks (about 400,000 people). The number of staff increased but, due to GOB restrictions, not in relation to the expanded workload. The shortage of staff was an important cause of the worsening overdue problems (para 4.01). However, one suitably trained credit supervisor was posted to each block. Training received much emphasis; 1,370 staff members px: cipated in the project training courses. The standards of loan appr' :al greatly improved and the processing downtime was considerably reduced. 3.03 The poor recovery rate (para 4.01) started affecting the loan portfolio in 1977/78. As agreed with IDA, the heavy overdues necessitated the State Government to contribute additional equity capital to provide a cover for overdues. The share capital of the LDB rose from Rs 42 M to Rs 112 M during the project period. 3.04 Initially, seven commercial banks out of 30 in the State had been selected to participate in the project. Later two more joined, bringing the total of project CBs to nine. Originally it was expected that the CBs would account for about 40% of project investments. With the exception of State Bank of India, lending by CBs was very slow in the beginning. It was only after the original closing date of the project, when LDB-s new lending greatly shrank as a result of high overdues which constricted LDB lending eligibility, that the CBs started reaching the targets set for them. In the end, they disbursed more of the project funds (about 46%) than originally intended (40%). 3.05 There were several reasons for the slow start. The CBs had a very limited experience in agricultural lending. They lacked an adequate branch network and were deficient in agricultural credi,t specialists. Several external factors made the CBs more cautious: (i) lack of timely groundwater clearance certificates for some areas; (ii) frequent changes in the pricing of pumpsets and non-availability of pumpsets at fixed government prices; (iii) paucity of trained and experienced private boring contractors; (iv) delay in release of government subsidy to small farmers; (v) ineffective extension service in several areas; and (vi) delay in energization of pumps and frequent interruptions in power supply. However, having once been convinced of the value of agricultural scheme lending, the CBs took determined steps to increase their agricultural lending as a percentage of their total lending. The total CB branch network in Bihar was expanded from 600 in 1973 to 1,600 in 1979. Out of these 900 were rural branches providing agricultural lending (the GOB target, i.e., one branch for each 20,000 people is yet far away, since the average population per CB rural branch is still about 55,000). The number of agricultural credit officers was greatly increased, resulting in a much better customer staff ratio than that in the LDB system. For instance, State Bank of India increased their agricultural staff from 2 to 425 between 1973 and 1980, the Central Bank of India from 30 to 310 during the same period. Their staff norms are 300-500 accounts per agricultural supervisor, whereas an officer in the LDB has to manage over 600 accounts. The project was apparently instru- mental in changing CB attitudes and contributed to significant increase in agricultural lending, as the following CB statistics on their total agricul- tural lending in Bihar indicate: 4- Number of Calendar Year Accounts Amount (Rs M) 1973 43.155 140.0 1974 66.852 170.0 1975 111.787 315.0 1976 168.953 554.6 1977 (March) 184.793 604.9 3.06 Project implementation was much assisted by the expanded ARDC Regional Office in Bihar. They obtained several specialists to help in scheme prepara- tion and approval, and the total professional staff in the office increased from 3 in 1973 to 30 in 1980. The number of schemes processed increased greatly, from 29 schemes in 1973/74 to over 600 schemes in 1979/80. An important development was the change from promoting individual schemes to dealing with District banking plans. Before the end of 1978, every scheme had to be submitted for final approval by the head office of ARDC. Since then, ARDC has delegated to the Regional Offices the power to approve schemes up to Rs 2 M. However, it was not possible to enhance the degree of monitoring, evaluation and supervision of the schemes to cope with the rapidly increasing number of schemes. 3.07 Other important organizations for the project implementation were Minor Irrigation Department (MID), Groundwater Investigation Organization (GIO) and State Electricity Board (SEB). All of these needed strengthening. Despite some delays in the beginning, Minor Irrigation Department contributed much in the way of construction, operation and maintenance of sLate tubewells. MID improved its staffing, and employed, in addition to their head office staff, an Assistant Engineer and three Junior Engineers for each of the 36 distric_s. At appraisal the total engineering staff was only 35, most of them in the head office. 3.08 The Groundwater Organization is responsible for state groundwater resources. At appraisal it had only six relatively inexperienced hydrologists. Subsequently, the organization has recruited new staff and trained them. It covers the entire state and compiles groundwater data, carries out periodical water level measurement and pump test to evaluate aquifer parameters, and examines the groundwater development for financing by ARDC and others. 3.09 The State Electricity Board was not considered a problem organization at appraisal. However, the farmers constantly complained about power shortages. Power rationing has been a regular feature of electricity supply between 8 a.m. and 10 p.m. The system was particularly over-stretched during the hot season months. SEB claims that power is normally available during day-time for at least two hours. This is adequate for most private tubewell operators with electrical connections since almost all of them have a considerable excess capacity in their pumpsets. The day-time power shortage, however, hampered efficient use of public tubewells. SEB claims that power is almost always available from 10 p.m. to 6 a.m., and that more of night-time power should - 5 - be utilized. Shortage of power is likely to continue to hamper irrigation. Diesel powered pumps may have an important role to play in minor irrigation in the near future. 3.10 Bihar Water Development Corporation (BWDC) operates and constructs state owned tubewells. In the middle of the extended project period, in July 1977, the project legal documents were amended to make BWDC expenditures eligible for reimbursement under the BACP. 3.11 Many other government departments and agencies were involved in the implementation of the project, including the Departments of Planning and Finance. Very instrumental in promoting an organized approach to irrigation development in the State was "Guidelines for Exploration of Underground Water Resources in Bihar", prepared by the Commissioner of Institutional Finance early during the project period. Loan Recovery Performance 4.01 Achievement of loan recovery level of 75% for the LDB was a condition of credit effectiveness. Although the actual recovery rate was 66% at the beginning of the project, an acceptable level was attained with the help of GOB, which was allowed--according to the Project Agreement--to contribute to the share capital of LDB any shortfall of the 75% level. However, the LDB was not able to improve the recovery rate during the project period. On the contrary, the overdues increased. During the last year of the project, 1978/79, the overdues in Bihar LDB (a unitary system) were 59.5%, which con- tinued to worsen further. It is noteworthy, however, that as most overdues are eventually being paid back, they are not necessarily bad debts; the overdues of more than 5 years old were only 6% of the total overdues (9% of the equity and 1.3% of the loan portfolio). 4.02 The deterioration in recovery performance in Bihar started mainly as a result of consecutive years of drought and floods. The need for relief for the hard hit farmers soon received undue attention in the context of National and State elections, and the demand by farmer pressure groups and politicians for write-offs became strong. To the IDA missions, State Government and LDB officials repeatedly stated that no more concessions would be granted and much stricter measures for collection would be taken in the future. However, willful default had become widespread in the state already. Towards the end of the project, when State Governments in Maharashtra and Tamil Nadu promised to write-off the overdues on short term credit from cooperatives across the board, the situation appeared to be hopeless. As the defaulting farmers had already accumulated arrears of 5-6 installments, most of which were not justified for rescheduling (i.e., due to natural calamities), no speedy improvement in overdue statistics could be expected even with best efforts. 4.03 A number of reasons have been cited for high overdues. The develop- ment of institutional credit for agriculture in Bihar appears to have been intertwined with consecutive election (and national calamity) years. GOB's formal prohibition order in 1977 against attachment of property and other "coercive recovery steps" was rescinded later, but local authorities under- standably continued to be less than firm in their dealings with chronic defaulters. Other factors include the wholesale mobilization .f block-leval bank staff for election campaign purposes by District Magistrates (coinci- dentally at peak collection seasons), growing union unrest, and exaggerated reports of Government subsidy programs with which credit operations inevitably became confused. The LDB, until 1977 a reasonably sound insLitution which was beginning to update some obsolescent methods and staffing patterns, suffered much during this volatile period. Instead of the rehabilitation discussed with IDA supervision missions, for instance, the year 1977 witnessed: (a) a protracted strike; (b) a virtual shutdown of repayment collection two months during the "Gram Panchayat" (local government) elections; (c) removal of a capable administrator whose reform measures were beginning to make headway; and (d) a further 3 months upheaval during organization of block, district, and state elections for the LDB's Assembly and Board, which had been "superseded" since 1976 by the government-appointed administrator. As a result, the LDB faced an acute cash crisis, its capital was impaired, and its eligibility to borrow from ARDC and RBI was limited to a fraction of its 1975 volume. 4.04 At the conclusion of the project, the overdues had not yet affected the financial results of the LDBs very seriously. The main problem with high overdues was its effect on the liquidity situation of the LDB and on its ability to make new loans. These would eventually entail serious profitability problems. 4.05 The recovery rates of commercial banks have received less attention, although their performance in this respect was not any better than that of the LDB (e.g., 1977/1978 their agricultural overdues were 64% of "demand," depe- ing on the CB in question). However, the rehabilitation of LDBs was obviousy. made more difficult by the current system of eligibility to refinancing facilities, which contains participation criteria for LDBs, but not for the commercial banks. There appears to be only limited incentives for political decision-makers to rehabilitate the LDBs as long as some other institutions, such as CBs, can replace them as lending channels. The CBs ha-e, indeed, expanded rapidly in the agricultural sector in Bihar but they also complain about increasing difficulties in recovery of loans. For the long term interest, it would be highly desirable to have eligibility criteria for both the LDBs and CBs as a condition for participation in the ARDC refinanced schemes. Bamboo Tubewells 5.01 Since the late 1950s, when the government tubewell programs were introduced, farmers used their ingenuity to find means to lower the investm-ant costs. These included replacement of the expensive brass screens by iron screens, use of "sludger" drilling method and local contractors instead of government owned rigs, and use of one portable pump for several wells. The "invention" of bamboo tubewell was a follow-up of this process of technical and institutional innovation for reduction of tubewell costs. The new thing in this structure was replacement of the expensive metal pipe with bamboo pipes wired together and wrapped all around with locally produced strings and old gunny bags. The lifetime of these borehole casings was originally rela- tively short, but when the upper 5-7 meters of the pipe, which is subject - 7 - attacks by white ants and rot, was replaced by metal casing, the usable age rose to an acceptable level of over 12 years. The cost savings of the bamboo tubewell were estimated in 1975 at about Rs 1,000 per well. 5.02 It was not envisaged at appraisal that bamboo tubewells would be financed under the project and in practice they did not become an important cost-saving factor in the project investments. Altogether, less than 10% of the wells financed were bamboo tubewells. However, they are a good practical solution, particularly where the alluvial soil sub-strata permits installation of bamboo tubes without damage (in coarse sandy alluvia) and there is a high water table. IDA and ARDC Performance 6.01 The project was originally prepared by the Bihar Government with FAO assistance. The project proposal contained numerous types of agricultural investments. In view of the institutional weaknesses, however, the IDA Appraisal Mission concluded that the scope of the project should be narrowed to consist of investments only in shallow and medium tubewells and pumpsets. This restriction of the project contents appears to have been wise in the light of actual experience. It turned out to be difficult to find a suffi- cient number of borrowers in the limited project area. The high unit costs estimated at appraisal were too high, so that the same amount of funds could finance a much larger number of investments than anticipated. IDA was respon- sive, however, to the changes needed to cope with the new requirements: the project area was expanded, the closing date was extended, and deep tubewells being constructed in the state under a separate GOB scheme were made eligible for IDA disbursements. 6.02 IDA required a number of covenants for the project. They were all complied with by the project participants without significant delays. IDA supervision missions followed up the progress of project implementation closely and paid particular attention to: (i) overdues of the participating banks; (ii) slow start by the commercial banks; (iii) staffing of the Minor Irrigation Department, LDB and CBs; (iv) need to have an elected body in charge of the LDB; (v) need to improve lending procedures of the participating banks; and (vi) problems in energization of pumpsets and delays in the work of the State Electricity Corporation. GOB and the participating institutions appeared generally very responsive to suggestions made, although, in the case of high overdues, without the expected results. -8- 6.03 ARDC's performance was satisfactory. It provided the necessary support to participating banks, particularly LDB. Already at the initial stage of the project, ARDC organized a specialist team to review and advise on the management of the LDB. ARDC also assisted in development and imple- mentation of the necessary systems and guidelines for schemes, subloan processing, and monitoring and evaluation. It exerted continuous pressure towards GOB and participating banks on the issue of deteriorating recovery performance and need to increase agricultural lending. Attachment 1 3701 63-6 Telephone 9 _ vr r i. 6552 ,g afRita w - , of i- 400 018 Telegrams AGREFNANS, Bombay AGRICULTURAL REFINANCE AND DEVELOPMENT CORPORATION Teley: 11-2810 ARDC iN Shrineketan, Dr. Annie Besant Road, Post Box No. 6552 Worli, Bumoay-4C0 01 ' MANAGING DIRECTOR AIR MAIL D.,No.plan. j /EC(6O)-81/82 (!August 1981 z7Sravana 1903 (s) Dear Mr Kapur India - Bihar Agricultural Credit Project (Credit 440-IN) - Project Perform nce Audit Renort Please refer to your letter dated 22 July 1981 enclosing a copy of the Project Performance Audit Report on the captioned project. The only important revision we have to suggest therein is in the figure of additional on-farm employment occurring in para 4.20 on page 31 of the draft. According to our estimate, the employment increased by 32 million man-days, of which 20 million man-days accrued to hired labour. The draft report, however, shows the additional employment to hired labour alone to be 3F- million man-days. Besides, a number of verbal corrections were found necessary which are indicated in the enclosure. with regards Yours sincerely SANr DASS Encl: Mr Shiv S. Kapur Director Operations Evaluation Department World Bank 1818 H Street N.W. Washington D.C. 20433 U.S.A. "har Aaricultural Credit Prolect - Project Completion Renort Page Para Line As per Report Proposed Revision - - - Under 'Abbreviations' 'BWDC' not included Add BWDC - - - Fiscal year for ARDC & LDB July 1 - June 20 July 1 - June 30 i - Last ARDC I and its details ARDC II and its details to be 4 lines given (Refer to para 1.03 of over view) 2 2.02 ERR for difeerenb investments and also for In view of the$ para 4.22 entire project given on page 31 to be deleted 10 (vii) 7 18% 20% 12 2.01 2 54432 54532 16 2.08 - In the Table on BACP achievements, sub-headings May be incorporated Viz - LDBs, CBs, Total, Oitted. 19 3.11 (iv)2 The LDB was relaxed The bA was relaxed 19 3.11 (iv)3 Permissable Permissible 23 3.25 Under 'Achievements' in column heading delete t2_je 24 3.26 vi 'ARC' & 'refinancing' ARDC & 'refinanced' 24 3.28 6 "Santial" "Santal" 25 4.01 6 UP and Karnataka UP & MP 25 4,02 2 Medium Tube wells Medium tubewells with pumpsets. 26 4,03 Asterisk shown against medium tube well To be shown against shallow against item III tube well 27 4.07 3 Fs 66 per acre x 660 per acre Refere Line As per Report Proposed Revision page Para Line 29 4.12 'Farm Business Income and FRR' 'Farm Business Income(including sale of water) and PRR 30 4*15 2 Cropping Pattern were not Cropping patter was not 30 4.15 7 'as per survey results' 'A' capital 30 4.17 2 ........... in the cases that STW & SPPS in the cases gL STW & SPPS......... 31 4.17 - irrigatio ......... irrigation 4.20 2 1 amount to amounting to 31 4.20 9 32 M Mandays of hired labour 32 M Mandays comprising 12 M Mandays of family labour and 20 M Mandays of hired labour. Bihar AaricultUral Credit Projet - Proiect Qamlet-ion Renort Annexfren able Line As per Report Proposed 1 2 2 1113.4 1213.4 1 3 The sub-heading "Land not available for cultiva- may be corrected tion" pertains to horizontal columns 2,#3 and 4 suitably only Viz., - Forest, Barren & Land put to non- agricultural uses 1 6 4 4.22 4.42 1 6 Item 9-1> & Bulk sale to other agencies - may be incorporated 10 and Total have been omitted 2 2 - Total loaning programme (extended area) Figures as given by us may be - column 3 - 'Amount disbursed by banks'- retained. 3 3 - Demand & recovery position of ALhAX Bihar LDB 3 3 Item - 2 b 124.15 f 174.15 3 4 Item - 7 Percentage of recoveries to demand (A.k) Delete (LI) 3 4 Rupees Million omitted may be added 3 5 Item - 8 893 983 Item - 28 Against Dhanbad (col. - 2) 0.00 0.01 4 4 Page - 3 Total Amount Figures may be shown uniformly in 2 or 3 digits. 4 4 Page - 3 ..b.3830 Rs 3838 4 4 Page -1 Area under wheat (itrigated) ..........1917 1,71 4 6 'Page-1' on top right hand corner Unit 4 7 Under footnote L2 - 'Year - 3.60% of full Omit development value' - 13 - INDIA BIHAR AGRICULTURAL CREDIT PROJECT 440-IN PROJECT COMPLETION REPORT 1/ SUMMARY AND CONCLUSIONS i. The Bihar Agricultural Credit Project (BACP), designed to increase agricultural production in the state through minor irrigation investments, was the tenth in a series of state-oriented agricultural credit projects su pported by IDA in India. The project was estimated to cost Rs 450 M (US$60 M), with IDA credit of US$32 M, i.e., 53% of the estimated project cost. The balance of project cost was to be met by Agricultural Refinance and Development Corporation (ARDC), the participating banks and farmers. ii. The credit became effective in March 1974. The project was sched- uled to be completed by June 1977 but the closing date had to be extended twice due to shortfall in financial achievements. When the project was closed in March 1980, a total of Rs 433 M had been disbursed, Rs 233 M by State Cooperative Land Development Bank (LDB) and Rs 200 M by the Commer- cial Banks (CB). The IDA credit of US$32 M has been fully drawn upon. iii. A total of 103,518 investments (67,944 tubewells and 35,574 single purpose pumpsets) were financed. The number of investments was considerably higher than the appraisal estimates due to lower unit cost and variations in the rupee-dollar exchange rate during the implementation of the project. iv. The State Groundwater Investigation Organization (SGWIO) and the Minor Irrigation Department (MID) contributed to the implementation of the project. While the SGWIO undertook periodical water level measurements in selected wells/tubewells, pumpset tests for ascertaining acquifer parameters and examined groundwater availability for ARDC refinanced schemes, the MID, apart from its own program of constructing tubewells, provided necessary technical assistance to farmers and exercised checks over tubewell installa- tion done by private contractors. Both were, however, considerably handi- capped owing to shortage of technical staff. v. The ARDC played an important role in all aspects of project imple- mentation. It spearheaded systematic groundwater resource evaluation studies, preparation of banking plans, etc. and assisted participating banks in adopt- ing project procedures. It played a key role in identifying and solving problems in the implementation and also maintained close liaison with the State Government and coordinated the activities of various implementing agencies. It also conducted periodical supervision of project schemes. vi. During the project period, the loan recovery performance of LDB worsened. Overdues increased from 34% in the beginning of the project to 77% in 1979/80. A number of rehabilitation measures were suggested to the bank and necessary corrective steps are being taken. 1/ This Project Completion Report has been prepared by the Agricultural Refinance and Development Corporation. - 14 - vii. Investments financed under the project were financially viable. At 1978/79 prices, the financial rate of return is 22% for shallow tubewells (STW), 39-41% for medium deep tubewells (MTW) and 20% for single purpose pumpsets. Appraisal estimates were 16% to 20% for tubewells and 27% for pumpsets (lift pumps). The financial rate of return (FRR) on the project as a whole worked out to 29%. As against this, the ERR would be higher because material inputs taken for calculating FRR contained an element of taxation and the international prices for project output were higher than domestic prices. viii. The total number of project beneficiaries is estimated at 299,000 households comprising 103,500 households of direct beneficiaries and about 196,000 households of indirect beneficiaries (purchasers of water), as against 50,000 each of direct and indirect beneficiaries households envi- saged at the appraisal stage. The incremental production at full development is estimated at Rs 655 M (at 1978/79 prices). This is substantially higher than the appraisal estimate due to a higher than expected increase in the production and price of paddy, maize, wheat and potatoes. ix. Around 80% of the lending went to small farmers. The landless laborers also benefited indirectly as a result of the increase in the demand for hired farm labor generated by the project. As per the farm benefit survey, conducted specially for the PCR, the additional on-farm employment of a recurring nature generated by project investments can be estimated at 32 M man-days per annum. This comprised 12 M man-days of family labor and 20 M man-days of hired labor. At 250 man-days per year (as assumed in the appraisal report), the 20 M man-days of hired labor would be sufficient to provide 80,000 new around-the-year jobs. The additional employment genera&ed was, however, just 1% of the total agricultural labor force of 6.8 M in the state according to the 1971 census. x. The farm benefit survey leads to some significant conclusions. The frequent incidence of floods and droughts in the state caused wide fluc- tuations in the agricultural production. The state was short of electric power and only around 30% of the villages are electrified even now. Even in the electrified areas, power supply is irregular and not available at the required time. Farmers have, thus, been forced to go in for diesel pumpsets in large numbers. However, even for the diesel pumps, difficulties in obtain- -aqg diesel have been cropping up in recent years. Assured energy supply is thus important for irrigation development in the state. xi. Another aspect of concern is the deteriorating position of the LDB. This bank is under a program of rehabilitation. xii. The role of the financing banks in supervision of the project investments was also not very satisfactory. However, according to the LDB, the extent of misuse of project loans was less than 3%. The steps that are being initiated by ARDC in the field of monitoring, however, are expected to yield better results in the future. As regards extension, because of the less frequent visits or no visits at all, no purposeful role was played by the extension workers. The marketing facilities also need strengthening so as to reduce the importance of the middlemen. However, with the commission_n of the new market yards under the Bihar Agricultural Marketing Project (BAE?), the marketing system is expected to improve. - 15 - INDIA BIHAR AGRICULTURAL CREDIT PROJECT 440-IN PROJECT COMPLETION REPORT INTRODUCTION Background 1.01 The Bihar Agricultural Credit Project (BACP), designed to increase agricultural production through minor irrigation investments, was the last in a series of 10 such projects supported by IDA in India. The project was to support a three-year lending program for investment in tubewells and pumpsets. This project completion report attempts to analyze the project issues, problems met during project implementation and solutions found, and assess its benefits during 1978/79. 1.02 For the purpose of the report, the ARDC, in association with the Bihar State Cooperative Land Development Bank (LDB) and participating Com- mercial Banks (CB), conducted in March/April 1980, a farm benefit survey in three districts, viz., Saran, Ranchi and Bhojpur. The survey covered 450 farmers, including the borrower-beneficiaries who availed of loans for tubewells, buyers of irrigation water, "control" farmers (representing "with- out project" conditions), and "optimal" farmers (who had been using tubewell irrigation for not less than five years). This sample represented both shallow and medium tubewells and single purpose pumpsets. 1.03 The state has two main geographical regions, viz., the Gangetic plain both in the north and south of Bihar, divided by the river Ganga and the Chhota Nagpur plateau in the south. About 60% of the fertile cultivable area in the state is in the Gangetic region. According to available estimates, the groundwater resources in the state could provide irrigation to about 22 M ha, but only about 1.1 M ha was actually under irrigation during 1975/76. The state is underlain by acquifers at relatively shallow depth with abundant recharge provided by both direct infiltration of rainfall and lateral seepage from the Himalayas. Groundwater conditions are thus favorable for the develop- ment of minor irrigation through the installation of both shallow and medium deep tubewells. Although irrigation from tubewells was in existence prior to the project, such use was estimated at less than 1/10 of the recharge avail- able from rainfall alone. There was thus considerable potential for increase in groundwater exploitation. 1.04 The project area originally covered the 11 districts of the Tirhut division in the northern part of the state. In 1977, it was extended to cover the entire state. 1.05 At appraisal, the LDB had higher than acceptable level of overdues. To be eligible as a project lending institution, the LDB-s overdues had to be notionally reduced to the prescribed minimum level, i.e, 25%. While - 16 - measures were initiated towards this end for the LDB, CBs were encouraged to increase their agricultural lending to secure disbursement at projected levels. 1.06 The project envisaged about 50,000 loans to individual farmers (mostly holders of 1 to 5 ha) and a few groups of farmers for investing in about 47,000 diesel and electric tubewells and about 3,000 diesel pumping sets for low-lift pumping from surface water and dugwells. Owing to frag- mented holdings in the scheme area, most of the farmers were expected to install two or more bores in their different plots of land separated by wide areas and shift diesel pumpsets to the different bore sites. In order to maximize use of the investment, farmers participating in the scheme with surplus water were required to sell such water to neighboring farmers. 1.07 The cost of the project was estimated at Rs 450 M (US$60 M). Out of this, the farmers were expected to meet Rs 55.7 M (12%), lending banks Rs 39.5 M (9%) and ARDC Rs 354.8 M (79%). The IDA Credit of Rs 240 M (US$32 M) was expected to form 53% of the project cost and 68% of ARDC-s refinance. 1.08 Under the project, the staff of LDB, CBs and extension service were to identify potential borrowers. The farmers.were to make a downpayment of 10% to 15% of the investment cost, depending upon the item of development, and the banks were to give loans to meet the balance of cost. The Minor Irriga- tion Department (MID) would execute the investment work, though cultivators were free to get it carried out by private contractors. 1.09 The unit cost estimated at the time of appraisal was Rs 8,100 for a shallow tubewell and Rs 10,900 for a medium deep tubewell. In both cases, an additional borehole was envisaged. 1.10 Under the project, about 235,000 ha were expected to be irrigated, including irrigation under custom service. It was expected that participating farmers would be able to (i) enter fully into the monetized economy by shift- ing from subsistence to cash crops; (ii) increase their average cropping intensity from about 135% to 180% at full development; and (iii) increase crop area and yields in the rabi season. Additional year-round employment both for family and hired labor was also expected to be generated as a result of the project. These apart, the project was expected to (iv) strengthen the credit institutions in the area, particularly the LDB; (v) create a demonstra- tion effect on other farmers; and (vi) contribute to the general well-being of the rural population as a result of the availability of good drinking water. The financial rates of return (FRR) at 1973 prices were expected to range from 16% to 20% for tubewells at the assumed prices, adequate farm management, sale of surplus water and the rate of development. II. PROJECT IMPLEMENTATION 2.01 The lending program envisaged originally by the LDB and CBs pro- vided for 54,532 tubewells with pumpsets and 21,912 pumpsets with a total credit assistance of Rs 504.6 M. The ARDC, initially, approved Rs 435.1 M to be advanced by banks for implementation of the program under the project during a three-year period. - 17 - Approved Program by ARDC for the Three-Year Period LDB CBs Total No. of Credit No. of Credit No. of Credit Type of Investment Units Amount Units Amount Units Amount (Rs M) (Rs M) (Rs M) Tubewells with Pumping Sets 26,980 241.9 28,332 193.2 55,312 Pumping Sets 13,270 - 15,764 1 29,034 241.9 193.2 435.1 The overall progress under the project, however, fell short of the approved program by December 1976, six months before the original closing date. Achievement of the Approved Program Investment-wise (position as of December 31, 1976) LDB CBs Total No. of Credit No. of Credit No. of Credit Type of Investment Units Amount Units Amount Units Amount (Rs M) (Rs M) (Rs M) Tubewells with Pumping Sets 26,309 4,824 28.6 31,133 1764 Pumping Sets 4,492 1 3,925 - 8,417 147.8 28.6 176.4 2.02 The factors responsible for slower than required progress were: (i) the initial shortfall on the part of the CBs was more con- spicuous due to their meager experience with agricultural lending and lack of qualified technical staff. The perform- ance of their few rural branches was also unsatisfactory; (ii) the shift in agricultural lending strategy from scattered lending to project approach required an adequate complement of trained staff, including technical staff, which was lack- ing in the CB as well as in the LDB; (iii) out of the 11 districts falling under the project, 7 were covered by SEDA which provided Government subsidy to the farmers for approved investments, including tubewells and pumpsets. Farmers obtaining subsidy for such purposes were not allowed loan assistance from the banks under the project until the beginning of ARDC II Credit Project. Loans with capital subsidy were not eligible for inclusion under the project. (The decision to cover such loans under IDA project was taken only with the sanction of ARDC III Credit Project, i.e., August 1977.) - 18 - (iv) the program of public tubewells by the Bihar Water Develop- ment Corporation (BWDC) in the project area created a psychology of passiveness among the farmers, inducing them to wait and watch whether their land would come under the command of such tubewells, in which case it was expected that water would be available at cheaper rates; (v) the recommendations of the Talwar Committee for bringing the CBs on par with LDB were acted upon some three years after the date of commencement of the project; (vi) earth work for the construction of subsidiaries of Gandak Canal was taken up during the project period. This induced farmers to presume that canal water for irrigation would be available to them at lower rates, which would make private tubewells superfluous; and (vii) poor response from the Block authorities as reflected in the delay in the issue of "No Dues Certificate" when asked for by financing institutions, and inadequate publizity or canvassing for obtaining loan applications. 2.03 The project was scheduled to be completed by June 1977. The parti- cipating banks were, however, able to lend only Rs 203.2 M (47% of the appero program) by that date. IDA, therefore, agreed to extend the period of the project up to June 30, 1978. Simultaneously, the project area was extended to cover the entire state with the revised credit of Rs 376.8 M and ARDC-s refinance of Rs 339.1 M. The minor irrigation schemes in the extended area, approved earlier under ARDC I and II Credit Projects were also switched ov'e to the BACP effective July 1, 1977. The credit required to be disbursed by the participating banks under the switched-over schemes in the extended area amounted to Rs 169.8 M, with ARDC refinance of Rs 153.7 M. 2.04 The financial program and its actual progress achieved by the par- ticipating banks in the original and extended areas as at the end of June 1978 were: Approved Program and Performance as of June 30, 1978 in the Original Project Area and in the Extended Area (Rs M) Programs Approved Achievement Original Extended Original Extended Financing Agency Area Area Total Area Area Total LDB 262.1 35.5 297.6 182.3 12.7 195.0 CBs 114.7 134.3 249.0 59.2 57.0 li6.2 Total 376.8 169.8 546.6 241.5 9L.7 311-2 Despite disbursements in the extended area during 1977/78, the overall finan- cial achievements were still inadequate. Three major causes were identifie2 as responsible for this: (i) lack of adequate machinery at field level and - 19 - necessary coordination among implementing agencies; (ii) slow pace of energi- zation; and (iii) delay in adopting technical improvements indicated in the project, such as strengthening of the groundwater investigation Unit of MID operating in the project area by adding staff and equipment and by expanding the design and scope of its groundwater studies. Actual investment costs were less than expected at appraisal stage which, in effect, meant that more investment units had to be taken up to fully disburse the desired amount of credit. Under the circumstances, a further extension up to March 1980 was sought, and agreed to by IDA. 2.05 The period since June 1978 saw an improvement in the project imple- mentation. GOI and ARDC carefully reviewed the progress of project implemen- tation and came to the conclusion that it should be possible to fully disburse the credit some months before March 1980. The reasons for the slow implemen- tation of the project prior to June 1978 were analyzed and several measures were recommended to State Government to improve the performance. Effective steps were taken by the GOB to enable the participating banks to augment their lending program. 2.06 Some of the steps taken to accelerate the pace of disbursement of credit were: (i) the CBs were motivated to follow a branch expansion program, so as to cover all the development blocks in the state; (ii) in consultation with the RBI, ARDC, and the participating banks, revised financial targets were fixed for the parti- cipating banks, taking into account their past performance, organization and capacity; (iii) the entire governmental machinery at the field level was mobilized for this program, particularly for motivating farmers and for collection of loan applications from farmers as also for expediting their processing in the banks through the issue of necessary official certificates. Detailed instructions fixing up district-wise physical and financial targets were also issued; (iv) arrangements for monitoring of progress and coordination were made. At the district level, the District Magistrate was required to review and coordinate this program every fortnight at the meetings of the task force. At the state level, there was a Coordination Committee and regular meet- ings were held with the participating banks to review progress; and (v) comprehensive legislation based on the recommendations of the "Talwar Committee" was enacted for bringing commercial banks on par with the LDB in matters like formalities of registration of documents and registration fee. The con- straint to CB lending directly to a member of a cooperative society was removed and CB could lend through primary credit societies ceded to them. - 20 - 2.07 Insofar as organizational aspects were concerned, at the request of the LDB, ARDC appointed a team of officials to study the institution's work methods and procedures with a view to making it functionally an efficient unit for project lending. 2.08 The steps taken (para 2.06) showed their effect. Thus, although the project was to run up to March 1980, a total of Rs 433.49 M had been disbursed (sufficient for fully claiming IDA credit of US$32 M) under the project by end-December 1979 and it was, therefore, treated as completed and closed. The achievements given below show that the physical achievement far exceeded those envisaged at appraisal: BACP Achievements as of December 31, 1979 Original Project Period Extended Project Period Total Area Tubewell Pumpset Amount Tubewell Pumpset Amount Tubewell Pumpset Amount ----(No.)------ (Rs M) ------(No.)----- (Rs M) ----- (Rs M) Original 32,707 2,952 198.57 17,124 11,919 101.20 49,831 14,871 299.77 Extended 6,162 3,574 34.54 11,951 17,129 99.18 18,113 20,703 133.72 38,869 6,526 233.11 29,075 29,048 200.38 67,944 35,574 433.49 2.09 Lending to Small Farmers. The original definition of small farmers under the BACP based on a post-development net income not exceeding Rs 2,400 per annum was found to be restrictive. It was, therefore, modified in June 1975 in line with the definition under ARDC I Project. 1/ Out of the total number of tubewell and pumpset loans financed by the participating banks, about 80% went to small farmers, the latter conforming to the revised definition. Their share in the total bank credit under the project is estimated at 65%. 2.10 Weather Conditions. Weather conditions during the project period, especially since 1976/77 were not quite favorable. While in the northern part of the state, floods were almost an annual feature; in the south, most of the districts were frequented by droughts. In 1979/80 alone, out of the 587 blocks in the state, 320 were declared severely drought-affected. According to official estimates, the average area affected annually by floods since 1954 was around 1.2 M ha. According to the Irrigation Depart- ment, roughly 4.3 M ha, involving a population of about 21 M are prone to floods in the state. 2.11 IDA Review Missions. The progress in implementation of the project was under constant review by the IDA. As early as 1974, the first review mission visited the state. This was followed by several such missions from 1975-79. Their visits and recommendations resulted in a number of steps being taken to streamline the progress and implementation of project. IDA in June 1977 agreed to extend the period of BACP up to June 1978 and also to extend the project area from 11 districts to the entire State of Bihar. IDA subsequently stipulated that the lending terms and conditions and well-spacing 1/ According to the revised definition, a small farmer was one with a pre- investment income of Rs 2,000 at 1972 prices. - 21 - criteria aiplliable to beneficiaries outside the area originally defined under the projeci should be consistent with the terms and conditions and well-spacing criteria as set forth under the ARDC II Project. 1II. ORGANIZATION AND MANAGEMENT Agricultural Refinance and Development Corporation (ARDC) 3.01 The development and refinancing role of ARDC has been documented in several IDA reports, the latest one being the Staff Appraisal Report (SAR) on the ARDC III Credit Project. As in the case of other projects, ARDC spear- headed the formulation of schemes under the BACP and their implementation. 3.02 During December 1973, ARDC arranged a meeting with representatives of the Government of Bihar (GOB) and LDB to familiarize them with the project lending terms and other requirements. The details of the banking plan, mea- sures for groundwater conservation, role of MID, staffing of the LDB and their training, simplification of loan procedure, significance of the overdues criteria, maintenance of books of accounts and submission of periodical returns and need for induction of commercial banks in the implementation of the proj- ect were the main points discussed at the meeting. This was followed by a separate meeting with the participating banks, State Government and other agencies, where details of the project and the roles of the banks and the GOB were explained. Further to this meeting, a series of four workshops were organized by the ARDC in the project area to explain the details of the project and its implications to the field level workers of participating banks. These meetings/workshops and the follow-up action paved the way of project implementation, though the progress was initially rather slow. 3.03 Even at the initial stage, ARDC felt the need to study the manage- ment of the LDB. A study team was, therefore, appointed by ARDC, whose report was received in June 1978. Some of the suggestions of the study team have been implemented by the LDB. For example, at the LDB head office, a Senior Officer has been appointed to attend to planning, development, loan- ing, utilization and recovery functions. The technical cell at the head office has also been strengthened. 3.04 While the study team's recommendations on management were in the process of implementation, ARDC found that the funds management of the bank also required an in-depth study. Therefore, another study team, consisting of both ARDC and RBI officers, was appointed. The study was carried out between July and September 1979 and it covered financial management, overdues position and measures necessary to strengthen the organization. Suggestions made by this Committee are still under the consideration of LDB. Bihar State Cooperative Land Development Bank (LDB) 3.05 The LDB, organized in 1957, is unitary in structure with 130 branches serving 587 blocks in the state. The branches are supervised by 34 district offices and the latter by 6 regional offices. - 22 - 3.06 At the appraisal, the observed weaknesses of the bank were: (i) high level of overdues resulting from poor management and technical advice; (ii) lack of follow-up action against defaulters; and (iii) rapid expansion in its operations without adequate staff or expertise. For the LDB to be eligible as a project lending institution, a pre-condition was that its overdues were to be brought down to the prescribed minimum level. The State Government was to provide equity capital and take over the direct responsibility for overdues to the extent necessary to achieve an overdues position below 25% of demand both overall and in the project area. 3.07 Key indicators of the Bank's financial position for the last five years are: Key Indicators of the LDB-s Financial Position Item 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 No. of branches 101 117 127 129 129 130 No. of borrowing members (M) 0.135 0.169 0.205 0.237 0,250 0.261 Debentures in circulation (Rs M) 446.9 595.7 767.3 940.6 978.9 1,102.5 Share capital (Rs M) 42.2 54.2 63.1 75.5 805 11228 Contribution of Government to Share Capital (Rs M) 13.9 17.2 17.1 19.6 20,7 50-5 Sinking fund investment (Rs M) 80.6 121.7 170.9 225.3 287.7 321,0 Loans outstanding (Rs M) 420.7 545.7 655.1 789.0 797.7 759.9 3.08 Senior officers at the head office of the LDB were entrusted with the task of getting in direct touch with the defaulter borrowers and initiate ction for recovery. Despite best efforts, the bank could recover only Rs 155 M as against a demand of Rs 383 M during 1978/79. The bank could, therefore, disburse only Rs 52.4 M during 1978/79. While in 1979/80, the percentage of overdues was around 77% for the bank as a whole, branch-wise position showed variations as may be seen from the figures belowv LDB Overdues in 1979/80 No. of Branches Overdues 1972/73 1973/74 1977/78 1978/79 1979/80 Up to 15% 9 15 - - - 15.1% to 25% 19 33 5 3 - 25.1% to 40% 46 37 13 22 3 40.1% to 50% 13 15 27 26 11 Above 50% - 1 84 79 116 87 101 129 130 130 - 23 - 3.09 The heavy overdues necessitated the State Government contributing additional equity capital periodically to provide the necessary cover for overdues in excess of 25% of the demand. The cumulative contributi3as during the project period were: Rs M 1973/74 13.9 1974/75 17.1 1975/76 17.1 1976/77 19.6 1977/78 20.7 1978/79 50.5 3.10 At the time of approval of the project, 26 branches were found not to be eligible for participation. The GOB had, therefore, to take steps to enable the branches to participate in lending, and it had to provide Rs 5.3 M as share capital contribution to notionally bring down the overdues. Though the step improved the overall position of the branches initially, the situa- tion worsened in the subsequent years. In 1979/80, a sum of Rs 30 M was provided in the state budget towards share capital contribution with a view to help the LDB come out of its difficult financial position. The bank had received Rs 25 M as share capital contribution as of March 31, 1980. GOB has released financial assistance of Rs 23.6 M (Rs 12.1 M by way of additional share capital contribution and Rs 11.5 M as interim loans up to March 31, 1981. 3.11 The main reasons for the mounting overdues were: (i) shortage of staff to cope with the burden of increasing amounts of loan recovery; (ii) investments turning infructuous due to erosion of secured (benefiting) land by flood; (iii) non-declaration of annewari (calamity situation) by the State Government which prevented the LDB from rescheduling the loans affected by natural calamities; (iv) the blanket ban issued by the GOB in 1977 against the exe- cution of distress/body warrants. The ban was relaxed subsequently on the condition that legally permissible coercive measures, including issue of body warrants might be resorted to, but only if collection did not improve substantially otherwise. (v) It was also stipulated that small farmers in genuine dis- tress might be spared of such action. Also, while passing relaxation orders, district officials were told not to attach the tools of artisans and agricultural implements - 24 - of farmers in the course of collection under the Public Demand Recovery Act. These orders were later withdrawn, but despite that, no appreciable progress in recoveries was in evidence. 3.12 At the request of the Administrators of the LDB, a study team consisting of ARDC and RBI representatives was constituted with the main objective of making in-depth study into the working of the Bank and to sug- gest an efficient scheme of procedures, norms for management of funds, dele- gation of authority, etc. The committee in its report recommended measures which included, among others: (i) delegation of powers of sanction to branch managers; (ii) strengthening of the head office with complement of staff, including posting of technical officers at the Regional/District offices; (iii) implementation of a management trainee scheme; (iv) discontinuance of the practice of referring loan applications to the lawyers for legal opinion and to recruit legal officers; and (iv) introduction of effective system of verification of utilization of loans. The recommendations have been accepted and are under consideration by the State Government for imple- mentation. ARDC/RBI have been constantly monitoring the progress of rehabili- tation program. The Chairman of ARDC, along with senior officials of RBI and ARDC, held discussions with the Chief Minister of Bihar in April 1979 and indicated the lines on which the bank should be rehabilitated. Recently, a team consisting of RBI/ARDC officials visited Bihar and proposals for rephas- ing overdues in respect of loans in areas affected by natural calamities are being framed. As even such a step may not improve the situation, proposals for blocking (transferring to a separate account) of chronic overdues are under consideration. 3.13 According to LDB, misutilization of loan has been identified in about 2% to 3% of cases. The field survey carried out by ARDC supports this estimate. 3.14 The LDB initiated the following measures in 1978/79 to ensure better recovery of loans: (i) strengthening of the administrative machinery at the branches by posting staff for recovery work; (ii) provision of vehicles for recovery staff to facilitate greater mobility; (iii) fixing of monthly recovery targets for staff; (iv) review of recovery performance every week; (v) issue of directives to branches for initiating legal action, against defaulter members by taking coercive action; and (vi) request to districts' general administration to provide help and cooperation in the collection of overdues. - 25 - 3filh loiianing procedure of the LDB in recent years has been modified and simplified in order to provide quick credit to the farmers. Steps have been taken to ensure that the time lag between the receipt of loan applica- tion and final disposal thereof is reduced to the minimum. Branch committees have been constituted at branch level for quick sanctioning of loan cases. Th Jzanaatralization of powers with regard to passing of payment orders in the loan cases and disbursement thereof are reported to have resulted in expe- ditious disposal of loan applications. The Bank has launched a vigorous drive for collection and has taken a number of steps for ensuring better recovery during 1980/81. Considerable progress is expected in this respect in view of a good harvest anticipated. The Bank has also started the work of segrega- tion of overdues of more than five years old in respect of loans disbursed until 1973, which could be partly written off. It has also taken steps to foreclose misutilized loans. In order to strengthen the organization of the branches, the Bank has moved the GOB to allow the Bank to recruit necessary staff required both for financing and collection of dues. 3.16 The LDB employees are receiving training at different centers. According to the LDB, the number of officers and staff who have received training at different centers/institutions until the end of 1979 is: Training of LDB Staff No. of Period of Persons Nature of Training Training Trained Name of Training Institution Diploma course 4-1/2 months 195 Coop. Training College, Lucknow Project planning & College of Agricultural Banking appraisal course 1 month 44 Pune Junior level staff Patna/Ranchi Bank Training training 1 month 939 Center Induction course 1 month 80 Coop. Training College, Patna Agricultural project College of Agricultural Banking, course 28 days 34 Pune Higher diploma course 9 months 4 Coop. Training College, Patna Job training course 29 days 81 Ranchi/Pusa/Deoghar Commercial Banks 3.17 Under ARDC-s banking plan, there was no exclusive demarcation of areas between the LDB and CBs, or among the CBs themselves. Instead, the LDB and CBs were to take up an appropriate program for implementation on the basis of groundwater availability and having regard to the network of branches and organizational capabilities existing and proposed to be developed. However, as a broad working arrangement, it was agreed that each participating CB would confine its financing to the village already adopted or to be adopted by it. While operating in the project area, the LDB would not resort to aggressive lending but would entertain applications made to it. The CB would also entertain applications made to them outside the adopted villages. In either case, the financing agency would advance loans only after the applicant produced a "no dues certificate." - 26 - 3.18 To begin with, only seven CBs 1/ were to participate in the imple- mentation of the project. Later, two more (Bank of Baroda and United Bank of India) were added. Some of the constraints reportedly faced by these CBs in enlarging the scope of their lending were: (i) lack of adequate branch organization initially; (ii) lack of timely groundwater clearance certifi- cate for some areas; (iii) frequent changes in the pricing of pumpsets and their non-availability at government fixed prices; (iv) paucity of trained and experienced private boring contractors; (v) delay in the release of government subsidy to small farmers; (vi) ineffective extension service in several areas; and (vii) delay in energization of pumps and frequent inter- ruptions in power supply. Although the State Government promised that faci- lities available to the cooperative credit structure would be made available to the CB, they were not readily forthcoming. Despite this, the CBs accounte3 for 46% of the total disbursements under the project. This was due to the experience gained by them with agricultural lending, an increase in the numbel of CB branches in the state from about 600 in 1973 to about 1 ,600 in 1979 and strengthening of the staff, especially technical officers and agricultur-1 field officers. 3.19 Short-term Credit. The cooperative short-term credit structure in the state has been weak. Almost all district cooperative central banks were under a rehabilitation program. Their recovery was also poor, the percentage of overdues to demand at the level of District Central Cooperative Banks (DCCBs) being 54.1% in 1975/76, 61.9 in 1976/77 and 73.8% in 1977/78. The weak short-term credit structure adversely affected the LDB borrowers who could not get adequate amounts of short-term crop loan. The position of CB borrowers was comparatively better. About one third of them could get short- term crop loans as against only 11% in respect of LDB borrowers. 3.20 Marketing and Storage Facilities. Two of the marketing problems observed during the PCR field study were: (i) most of the farmers depended on the wholesale traders who purchased their produce immediately after the harvest at the farmgate at less remunerative prices; and (ii) inadequate marketing and transport facilities (many of the village markets lacked ade- quate storage and grading facilities). According to the farmers surveyed, the schemes for new market yards that are developed, could benefit them to a great extent, if implemented effectively. 3.21 The Bihar Agricultural Market Project (BAMP) with IDA Credit of US$14 M which became effective in 1972 was being implemented ir the state almost simultaneously with the BACP. The former provided for investment in market yards in about 50 towns in Bihar, including civil works such as con- struction of entrance roads, surfacing, fencing, godowns, traders' shops, etc. Physical achievements under the BAMP lagged initially on accounc of difficulLt in acquiring land and in the legal transfer of the same to the Market Commit-- tees. These problems have since been solved. The project was completed by December 31, 1979. Under the project, 49 market yards were financed with the ARDC refinance of Rs 167.3 M. Of them, 47 market yards are reported to have been completed and the remaining 2 are nearing completion. It is reported 1/ State Bank of India, Central Bank of India, Allahabad Bank, Union Bank- Bank of India, United Commercial Bank, and Punjab National Bank. - 27 - that the trade has shifted to 34 newly developed market yards and eifforts are being made to persuade the traders to shift to the remaining marke. yarus. Bihar Water Development Corporation (BWDC) 3.22 Disbursements to the BWDC were allowed to be included under the BACP in July 1977 by making suitable amendments to Section 1.02 of the DCA. 3.23 c BWDC is a wholly-owned State Government undertaking, registered in Apr1 "273 under the Indian Companies Act. It took over the state tube- wells a alled by the erstwhile Tubewells Organization and undertook the responsibility for construction and maintenance of new and existing wells in the state. The book value of the assets transferred to the BWDC by the State Government in 1974 amounted to Rs 158 M. 3.24 In addition to the share capital contribution received from the GOB from time to time, funds were raised by the BWDC by borrowings from commercial banks, borrowings from State Government and as subsidy from SFDA and CADA for construction of tubewells. The water rates, collected by the State Government on the basis of assessment by BWDC, ranged from Rs 16 to Rs 74 per acre depending on the type of crop, season and the number of watering per season required by the crop. The State Government undertook to meet the obligations of BWDC to the lending banks, irrespective of whether arrears in water rates were recoverable or not. 3.25 The physical targets and achievements by WDC since 1977/78 were: Target Achievements No. of Tubewells to be No. of Tubewells Provided With Provided With Year Drilled Energized Field Channels Drilled Energized Field Channels 1977/78 900 Not fixed 950 406 225 95 1978/79 700 -do- 1,000 296 224 116 1979/80 700 110 1,000 158 451 80 The BWDC received credit from the banks during the last three years of the project: Rs M 1977/78 41 1978/79 29 1979/80 28 The wells constructed by the WDC were supposed to irrigate, on an average, about 325 acres and operate for 2,500 hours in a year. However, according to the study on the working of BWDC by the ARDC in March 1978, the average area irrigated per tubewell in 1976/77 was substantially lower. The utiliza- tion of the wells below optimum capacity was due to erratic power supply, breakdown of pumpsets due to fluctuations in voltage, delay in energization, delay in the construction of field channels and lack of extension service to induce cultivators to adopt the cropping pattern envisaged at the time of working out the economics of the scheme. - 28 - State Groundwater Investigation Organization (SGWIO) 3.26 The appraisal report pointed out the inadequacy of experienced Geohydrologists to serve the entire state and urged the need for strengthen- ing and training of such staff in the SGWIO. The latter has at present two divisions in alluvial areas at Patna and Muzaffarnagar and a division each at Bhagalpur and Saharsa headed by a Superintending Engineer. Besides, it has a Geological unit for hard rock areas at Ranchi. The work undertaken by the SGWIO comprises mainly: (i) periodical water level measurement in selected wells and tubewells; (ii) pumpsets for ascertaining acquifer parameters; (iii) systematic survey in an area of about 3,000 sq km; (iv) compilation of groundwater data; (v) exploratory drilling; and (vi) examining the groundwater availability for ARDC and REC-refinanced schemes. 3.27 The SGWIO has a program to set up two geological units in Singhbhum and Palamau districts and a proposal for posting of additional staff has been sent to the State Government. It proposes to set up a few more units, after its first proposal for setting up the two units is cleared by the State Government. Resource maps have so far been prepared in respect of 10 dis- tricts; similar work in respect of the remaining districts is expected to be completed shortly. Further, the SGWIO has agreed to work out the recoverable recharge, draft, etc., on the basis of the revised norms, block-wise and district-wise for the entire state. These have since been worked out for 14 districts, while work in another 4 districts is in progress. The SGWIO is also associated with the pilot study on quality control of agricultural pumpsets in selected blocks of four districts. ARDC has advised the SGWIO to conduct detailed groundwater assessment in some of the districts, which according to existing groundwater data are intensively exploited, for consid- eration of further minor irrigation scheme. Minor Irrigation Department (MID) 3.28 The Minor Irrigation Department helped in providing technical assis- tance concerning estimation of groundwater availability, spacing of tubewells, etc. The Department also exercised checks over work done by private con- tractors. There was no staff specially provided for the project as such. The staffing pattern of the MID by the end of the project period consisted of a Chief Engineer who looked after the work in Chotanagpur and Santal Parganas and another Chief Engineer at Patna who looked after the work in the rest of Bihar. Under each Chief Engineer, there were Superintending Engineers who supervised work in their respective jurisdictions. The Execu- tive Engineers working under the Superintending Engineers were the payment authorities for the works. Under each Executive Engineer, there were several Assistant Engineers and Junior Engineers. 3.29 In the appraisal report, IDA had pointed out that it was not neces- n rv.- ':a have a density formula as used in some of the earlier credit projects Lus 3,th e acquiters extendecd ac;oss the whole of the project area. It was, hoave, made clear that the project lending should include a clause to ensure observance of spacing criteria for all the tubewells. At the negotiations, assurances were obtained that the advice of MID would be available to the lending banks throughout the disbursement period. It was learned from the LDB that the requisite spacing specified was adhered to by the farmers. 3.30 Only limited progress, however, was achieved in groundwater monitoring, proper design, coverage under systematic groundwater studies, registration of approved contractors and control over contractors to construct proper type of wells. IV. FARM BENEFITS 4.01 The estimates of costs, benefits and rate of return on capital in this section are based on the results of a farm benefit survey conducted during March-April 1980 inf three selected districts, viz., Saran in North Bihar, Ranchi in South Bihar and Bhojpur in Southwest Bihar. The plan of investigation and the methodology adopted for the survey followed the pattern of earlier PCRs, e.g., Uttar Pradesh and Madhya Pradesh. The selection of the districts was done on the basis of probability proportional to the size of disbursements. Within the districts, the investigation was confined to a manageable area giving adequate representation to the beneficiary borrowers from both LDB and the CBs operating in the districts. Thus, a branch of both the LDB and the CBs reporting the highest disbursements in the district was selected and the sample was drawn from the cultivators who had borrowed from the respective branches of the LDB and the CBs. The survey covered 175 bor- rower-beneficiaries, 75 each of buyers of irrigation water and "control" farmers (representing "without project" conditions) and 50 "optimal farmers" (who had been using irrigation from tubewells for not less than five years). 4.02 The survey, with 1978/79 as the reference year, covered three in- vestments, viz., shallow tubewells with pumpsets (STW), medium deep tubewells (MTW) with pumpsets and single purpose pumpsets (SPPS). The cut-off point used for distinguishing between STW and MTW was a depth of 30 meters. In the case of SPPS on pre-existing wells, the new investment was only single purpose pumpsets. They were mostly powered by a diesel engine, the average cost of which (at 1978/79 prices) was Rs 4,800. This constituted nearly 80% of the average cost of installing a new STW with pumpset. As there was a larger pre- existing irrigated area in the case of SPPS, compared with STW, the average amount of benefit from SPPS was also found to be 80% of that from a fresh STW. For the purpose of cost-benefit analysis, therefore, each unit of SPPS has been assigned a co-efficient of 0.8 (0.8 of the new STW). The same co-effi- cient has been used for estimating the project impact. Due to non-avail- ability of separate figures on the number of STWs and MTWs financed by the banks, the number of MTWs is estimated at 30% of the total number of tubewells based on the survey results. Some areas in the state had bamboo tubewells. Their number, however, was reported to be insignificant compared to that of the STWs and MTWs. They have not, therefore, been separately treated for - 30 - assessing the costs and benefits. The economics of STWs and MTWs being different, they have been discussed separately to the extent necessary in the following paragraphs. Average Size of Cultivated Holdings 4.03 For a typical borrower-beneficiary (per unit investment), the average size of (i) cultivated holdings; (ii) benefited area; and (iii) non-benefited area (not irrigated) in the case of STW and MTW was: Average Size of Holdings (acres) Shallow Tubewell Medium Tubewell With Pumpset With Pumpset 1. Average size of cultivated holding 4.48 11.43 2. Average Size of benefited area 2.41 4.78 3. Average size of non-benefited area 2.07 6.65 /a Of this, an area of 0.89 acre was uncultivated due to water- logging. Intensity of Cropping and Cropping Pattern 4.04 Introduction of minor irrigation led to additional area being brought under irrigation and also a shift in the cropping pattern in favor of the cultivation of high-yielding crops. This increased both the cropping intensity and productivity. The STW beneficiaries achieved an intensity of 188% under "with project" conditions compared to 154% under "without project" conditions. In the case of MTW beneficiaries, the intensity rose from 100% to 154%. Intensity of Cropping for the Benefiting Area (acres) STW MTW With Without With Without Project Project Project Project Net area sown 2.41 2.41 4.78 4.78 Gross cropped area 4.54 3.71 7.36 4.78 Cropping Intensity (%) 188 154 154 100 - 31 - 4.05 Under "without project" conditions for STWs, only 15% of the cropped area was under irrigation from purchased water, 1/ the principal irrigated crops being potato and local wheat and the major rainfed crops being local paddy and local wheat. With the installation of project tubewells, the entire benefiting area was irrigated, the principal crops being paddy, wheat, potato and maize-all high yielding. The shift from local to high yielding crops and an increase of 37 percentage points in the area under rabi crops mark the highlights of the change in cropping induced by STW (Annex 4, Tables 1 and 2). 4.06 Under MTWs, the main feature was a total shift from rainfed crops- local paddy, local wheat, pulses--to irrigated crops-high yielding paddy in kharif and high yielding wheat in rabi. These two crops together accounted for 80% of the irrigated gross cropped area, the balance being taken up by potato, onion and other vegetables. Costs of Cultivation 4.07 With the introduction of improved farm practices as a result of tubewell irrigation, the cost of cultivation per acre also rose. For STW, it increased from Rs 660 per acre under "without project" conditions to Rs 1,658 under "with project" conditions. The corresponding increase for MTW was from Rs 403 to Rs 1,087. Over 30% of the incremental cost was explained by material inputs, among which chemical fertilizers and high yielding seeds were more important (Annex 4, Table 3). Farm Income 4.08 The average net farm income in the case of STW rose by Rs 458 from Rs 482 to Rs 940 per acre. For MTW, the corresponding increase was Rs 789 from Rs 266 to Rs 1,055 per acre. The higher increase in income for MTW was mainly due to a complete switch-over from rainfed to irrigated farming condi- tions unlike in the case of STW, where a part of the benefiting area had already some form of irrigation during the pre-investment period. 4.09 Per unit, the incremental income was Rs 1,104 for STW and Rs 3,771 for MTW. The average net farm income and costs per acre of benefiting area of benefiting area and incremental income per acre and per unit of invest- ment are summarized below: 1/ This fact has been considered for estimating the net increase in irri- gated area due to the project. - 32 - Investment Benefits (Rs M) STW MTW With Without With Without Project Project Project Project 1. Value of gross produce per acre 2,598 1,142 2,142 689 2. Operating costs per acre 1,658 660 1,087 423 3. Net income per acre 940 482 1,055 266 4. Incremental income (a) per acre 458 789 (b) per unit 1,104 3,771 Sale of Water 4.10 Sixty-seven out of the 120 STW beneficiaries (56%) and 43 out of the 55 MTW beneficiaries (78%) selected for the survey reported sale of water. The details are: Sale of Water STW MTW No. of farmers selling water 67 (56%) 43 (78%) No. of buyers per farmer selling water 3 3 Average area and hours for which water was sold by such reporting farmers during 1978/79 (crop acres) 3.22 3.70 (Hours) 113 122 Gross receipts from sale per reporting farmer (Rs) 565 610 The sale of water was on the basis of informal contracts between buyer and seller. For every seller, there were three purchasers. The common method of charging for sale of water was per pumping hour (the prevalent rate in 1978/79 being Rs 5). In majority of cases, "Kutcha" (earth) channels were constructed for the purpose by the purchasers themselves. Most of the sellers experienced difficulties in expanding the sale of water due to erratic power supply. As a result of irregular and untimely supply of power, even in electrified villages, farmers were inclined to opt for diesel pumpsets. During the survey year, farmers had no difficulty in obtaining their require- ments of diesel at rates fixed by the government. As the electricity tariff was fixed irrespective of consumption, higher electricity charges had to be paid by the farmers despite power supply being available only for few hours a day. Had there been adequate power supply, the farmer would have earned more income from sale of irrigation water. Purchase of Water 4.11 Estimation of benefits to purchasers of irrigation water from proj- ect tubewells was an aspect considered in the field study. For this purpose, data in respect of "with project" conditions (i.e., when they purchased water) was compared to a "control" sample of farmers from the same villages to which the purchasers of water belonged. As a result of availability of water through purchase, the buyers could shift from low value crops to high value crops resulting in higher farm income. The intensity of cropping in respect of the farm area irrigated under custom service arrangement rose from 154% to 184% in the case of purchasers from STWs and from 100% to 170% for purchasers from MTWs. 1/ Farm Business Income (including sale of water) and Financial Rates of Return (FRR) 4.12 The economics of the three investments, viz., STW, MTW and SPPS are given in Annex 4, Tables 4, 5 and 6. Due to the predominance of small farmers (and, therefore, smaller benefiting area) among the STW beneficiaries, the FRR for shallow tubewell (diesel as well as electric) worked out to 22%. The FRR for STW fitted with electric pumpsets would have been higher had there been adequate and timely supply of power. For single purpose pumpsets, the rate was 20% because of the fact that under "without project" conditions, there were pre-existing irrigated areas. The higher FRR in the case of MTW (41% for electric and 39% for diesel) could be attributed to: (i) larger benefiting area in relation to investment cost; (ii) complete switch over from rainfed to irrigated conditions; and (iii) larger increase in cropping intensity. In the case of STW also, FRR turned out to be higher (34% for both diesel and electric) for the average size of benefiting area of 4.75 acres for "other than small farmers" (Annex 3, Tables 7-12). Comparison of "Project Beneficiaries" With "Optimal Farmers" 4.13 The cropping pattern adopted by the beneficiary farmers was not much different from that of "optimal farmers," whose experience with tube- well irrigation averaged seven years as against three years for project beneficiaries. Both grew paddy, wheat and maize (all high-yielding) and improved variety of potatoes. In the case of optimal beneficiaries, yields were 13% to 19% higher for irrigated crops, indicating that after the lapse of some more years, project beneficiaries' incremental income may rise further. 1/ The higher intensity in the case of purchasers of water from MTW was due to the smallness of their holdings. - 34 - Yield Pattern Under Irrigated Conditions (yield per acre in quintals) Crop Optimal Farmers Project Beneficiaries Paddy HY 12.5 10.5 Maize HY 12.4 11.0 Wheat HY 12.0 11.0 Potato (Improved) 68.0 59.0 Unit Cost of Investment 4.14 The appraisal report estimated the cost of a shallow tubewell (25 m deep) fitted with diesel pumpset at Rs 6,250 and of a medium tubewell (50 m deep) with electric pumpset at Rs 7,000). The costs were placed higher for pumpsets with an additional bore. The ARDC had approved schemes with the cost of a STW (25 m) with pumpset at Rs 7,000 and MTW (10 cm dia. 50 m depth) at Rs 9,000 each. This was excluding the cost of pumphouse for which Rs 1,000 extra were provided. The survey results showed that at 1978/79 prices, the average cost of a shallow tubewell with an average depth of 22 m fitted with electric pumpset was Rs 5,800. In the case of an STW with a diesel pumpset for the same depth the cost worked out to Rs 6,600. For MTW (50 m deep), the average cost was Rs 12,200 with diesel pumpset and Rs 11,200 with electric pumpset. The costs in the early years of the project were lower. Details of the costs of various components are shown in Annex 4, Table 13. Total Project Benefits 4.15 According to appraisal report, 50,000 project borrower beneficiaries and 50,000 purchasers of water were to benefit from the project. The addi- tional area to be brought under irrigation was estimated at 235,000 ha. On completion, the number of beneficiaries, excluding the cases of misutiliza- tion at 3% per survey, turned out to be much higher. The number of direct beneficiaries was 103,500 (composite units plus single purpose pumpsets). As per the survey results, 63% of the direct beneficiaries sold water, on an average to three purchasers. The number of purchasers of water can, there- fore, be estimated at 195,600. As a result of the lower unit cost and a variation in the rupee-dollar exchange rate, more units than anticipated at appraisal could be completed under the project. 4.16 In the SAR, it was estimated that about two-thirds of the wells would be STW and that most farmers would construct two or more wells for each pumpset. The survey results showed that 70% of the composite tubewells were STW and the balance MTW. Applying this ratio to the total of 68,000 composite tubewells, the number of STWs and MTWs has been estimated at 47,000 and 21,000, respectively. The number of SPPS units financed under the project is 35,500. 4.17 There was no substitution of purchasers and the benefiting area in the cases of STW and SPPS that had pre-existing irrigation. The gross area (acres) brought under irrigation as a result of the project (as per survey) under the three types of investments is: - 35 - Area Brought Under Irrigation (per unit) STW MTW SPPS -------(acres)------ Self cultivated land 3.88 7.36 2.36 Sale of water 3.22 3.70 3.20 4.18 The total area irrigated through the project is thus about 309,000 ha. Since some irrigation development would have taken place also "without the project," the "with project" benefits are estimated to be about 75% of full development benefits except in the case of sale of water where the "with project" benefits are assumed to be at full development. On this basis, the total additional cropped area that could be brought under irriga- tion at full development has been estimated at 373,000 ha. 4.19 Incremental Production and Value. According to the appraisal, foodgrain production was expected to increase at full development stage by 393,000 tons and that of other crops by 243,000 tons. The value of annual incremental gross production according to appraisal at the then prevailing prices was placed at Rs 280 M. At the time of PCR preparation, production of foodgrain is estimated to have increased by 568,000 tons, potatoes by 214,000 tons, and other crops (excluding sugarcane) by 70,000 tons at full development. In value terms, the increase in production is estimated at Rs 655 M at 1978/79 prices (Annex 4, Table 14). 4.20 Additional On-farm Employment. The project was to generate addi- tional employment for both family and hired labor amounting to 11 M man-days a year (equivalent to 44,000 man-years at 250 days a year). On the basis of the survey, it is estimated that the project had generated additional employment of a non-recurring nature (confined to the period of tubewell installation) of about 1.9 M man-days of family labor and 1 M man-days of hired labor. This would amount to generation of employment of non-recurring nature for nearly 12,000 new hands for a whole year. The on-farm recurring employment generated by completed investment is estimated to be around 32 M man-days of labor in- cluding 20 M mandays of hired labor; this would be equivalent to additional year-round on-farm employment for about 80,000 new hands. On average, a minor irrigation investment thus generated additional non-recurring employment of 28 man-days of family labor and recurring employment of both family and hired labor of nearly 309 man-days a year. 4.21 FRR. For the project as a whole, the FRR at 1978/79 prices worked out to 29%. 4.22 Economic Rate of Return (ERR). Farm inputs such as fertilizers, pesticides, diesel, electricity, etc., contain an element of taxation. This is true of materials used for the installation of tubewells such as pumpsets, pipes, etc. On the other hand, the domestic prices of output such as rice, wheat, maize, potato, etc. are lower compared to international prices. As a result, the ERR is likely to be considerably higher than the FRR of 29%. - 36 - V. CONCLUSION 5.01 Although the BACP ended with a time overrun of 1-1/2 years, a more than 100% increase in physical achievements over what was expected can be deemed to have offset the delay. The project increased the area irrigated from groundwater by 0.32 M ha and created recurring on-farm employment to sustain 80,000 new hands. The net increase in crop production from the project can be placed at Rs 655 M at 1978/79 prices. However, a comparison of the per-acre yields of irrigated HY rice and wheat of the BACP benefici- aries with the corresponding yield levels in Punjab, one can conclude that a lot more needs to be done to fully exploit the potential created by the project in Bihar. Improvement of agricultural extension and rural electri- fication are two factors which will yield rich dividends in the future. 5.02 Despite lags in the initial performance of banks and other insti- tutions participating in BACP, they have gained valuable experience in the discipline of project financing. Thus, the BACP has helped to build up new human skills which may stand the state in good stead in the future. - 37 - ANNEX 1 Table 1 INDIA BIHAR AGRICULTURAL CREDIT PROJECT PROJECT COMPLETION REPORT Number of Operational Holdings (000s) Size Class Original Project Extended Area Bihar Total Less than 0.5 1,453 2,074 3,527 (56) 1/ (42) (46) 0.5 to 1.0 462 885 1,347 (18) (18) (18) 1.0 to 2.0 329 780 1,109 (12) (16) (15) 2.0 to 3.0 153 422 575 (6) (9) (8) 3.0 to 4.0 80 261 341 (3) (5) (4) 4.0 to 5.0 52 171 223 (2) (3) (3) 5.0 to 10.0 60 260 320 (2) (5) (4) Over 10.0 22 113 135 (1) (2) (2) Total 2,611 4,966 7,577 (100) (100) (100) Source: Agricultural Census, 1970/71. 1/ Figures in parentheses indicate percentages. ANNEX 1 - 38 - Table 2 INDIA BIHAR AGRICULTURAL CREDIT PROJECT PROJECT COMPLETION REPORT Annual Rainfall in Each District of Bihar Annual Rainfall Name of District 1973/74 1974/75 1975/76 1976/77 1978/79 Saran 1,248.4 899.8 1,300.0 1,092.5 790.6 Siwan 1,213.4 1,245.9 1,316.0 1,051.7 771.5 Gopalganj 1,197.8 1,350.2 1,165.2 982.7 768.1 Champaran (East) 1,360.9 1,506.2 1,520.2 111.4 990.4 Champaran (West) 1,596.0 1,898.1 1,536.2 1,030.4 974.8 Muzaffarpur 1,328.8 1,549.3 1,287.8 148.2 825.0 Vaishali 1,090.5 1,107.3 819.6 1,168.9 777.8 Sitamarhi 1,362.1 1,454.2 1,603.6 1,046.5 880.0 Darbhanga 967.2 1,304.8 1,008.3 981.8 887.4 Samastipur 784.4 1,421.3 941.9 1,235.5 791.2 Madhubani 985.0 1,781.6 1,531.1 1,139.9 953.8 Saharsa 1,176.8 1,270.1 1,141.2 1,296.0 1,021.4 Purnea 1,565.8 2,014.0 1,413.6 1,817.7 1,147.7 Katihar 1,214.1 1,319.8 823.9 1,398.8 1,050.6 Begusaral 1,081.5 1,220.5 943.3 1,227.3 897.3 Patna 1,021.1 994.3 924.7 1,212.6 819.2 Nalanda 709.5 934.8 756.7 1,046.4 738.3 Gaya 941.5 820.4 662.8 1,006.4 742.1 Nawadah 967.3 1,110.0 751.7 843.9 693.5 Aurangabad 691.0 786.1 712.9 1,091.3 718.0 Bhojpur 961.1 801.9 905.6 1,010.4 767.0 Rohtas 1,022.5 724.8 851.1 1,147.5 614.0 Monghyr 1,533.8 960.4 851.9 1,018.2 719.2 Bhagalpur 1,461.4 1,128.8 871.2 967.6 782.0 Santhal Parganas 1,361.1 1,551.8 1,253.3 1,966.5 977.8 Hazaribagh 1,135.1 985.0 1,274.4 1,256.8 1,091.5 Giridh 1,323.5 1,022.7 1,391.2 981.5 1,140.9 Dhanbad 1,453.9 1,172.8 1,494.1 944.0 902.9 Ranchi 1,497.6 1,154.5 1,470.3 1,456.4 1,075.6 Palamau 1,067.5 918.6 1,140.6 1,287.0 1,030.7 Singhbhum 1,312.5 1,111.2 1,257.8 1,110.0 1,009.1 Bihar (Average) 1,180.4 1,219.2 1,138.5 1,139.3 882.2 Source: Data available in Bihar Statistical Hand Book, 1978, updated. INDIA BIHAR AGRICULTURAL CREDIT PROJECT Land Utilization (in '000 Hectares) Land not available for cultivation Cultivable Total Area Land put Permanent Cultivable of the state to non- Pasture and waste other by village agricul- other graz- than fallow Year paper Forest Barron tural uses ing lands lands 1970/71 17,330 2,028 1,060 1,545 181 513 1971/72 17,330 2,979 1,080 1,544 173 509 1972/73 17,330 2,811 1,086 1,569 172 505 1973/74 17,330 2,852 1,061 1,573 164 488 1974/75 17,330 2,812 1,061 1,597 160 486 1975/76 17,330 2,821 1,044 1,649 157 469 1976/77 17,330 2,770 1,031 1,638 154 486 OQC r INDIA BIHAR AGRICULTURAL CREDIT PROJECT Land Utilization ( in '000 Hectares ) Waste Land Area sown Land under miscellan- Other Net Area sown eous trees fallow Current area more than Year and groves lands fallow Total sown once Total 1970/71 197 870 1,573 3,343 8,154 2,572 11,726 1971/72 201 903 1,847 3,633 8,277 2,407 10,684 1972/73 201 917 2,015 3,811 8,051 2,330 10,381 1 1973/74 209 911 1,607 3,469 8,373 2,393 10,766 1974/75 215 944 1,708 3,513 8,345 2,524 10,869 1975/76 222 901 1,602 3,351 8,465 2,822 11,287 1976/77 N/A N/A N/A 2,650 8,320 2,964 11,284 Source: Directorate of Statistics and Evaluation, Bihar. '"d O 03~-C CDX Annex 1 Table 4 - 41 - INDIA BIHAR AGRICULTURAL CREDIT PROJECT Net Area Irrigated by Different Sources in Bihar ('000 Hectares) Wells Total Govern- and Area ment Private Tube- Other Irri- Year Canals Canals Tanks Wells Sources gated 1970/71 810 2 169 549 625 2,155 1971/72 867 6 141 579 786 2,379 1972/73 920 - 111 674 575 2,280 1973/74 896 4 82 717 621 2,316 1974/75 883 5 104 860 671 2,523 1975/76 890 6 118 1,071 675 2,760 Source: Bihar Statistical Handbook, 1978 Annex 1 Table 5 -42- INDIA BIHAR AGRICULTURAL CREDIT PROJECT District-wise Number of Electrified Villages in Bihar -----------Number of Electrified Villages as on------ Total No. of 31 March 31 March 31 March 31 March 31 March 31 March 31 March District Villages 1973 1974 1975 1976 1977 1978 1979 Patna 1,311 739 766 1,082 1,098 1,109 1,112 1,115 Nalanda 1,011 500 511 830 851 867 877 881 Gaya 3,508 1,004 1,025 1,735 1,792 1,996 2,063 2,080 Aurangabad 1,760 411 433 710 720 880 928 936 Nawadah 966 376 420 477 509 567 632 655 Bhojpur 1,790 515 524 622 647 696 699 700 Robtas 3,017 983 1,ol 1,542 1,585 1,600 1,607 1,607 Saran 1,591 225 237 486 490 566 586 587 Siwan 1,436 181 189 270 273 318 337 345 Gopalganj 1,398 151 157 194 232 340 341 344 E. Champaran 1,287 189 196 303 337 365 385 400 W. Champaran 1,357 209 217 270 301 331 335 344 Muzaffarpur 1,726 203 214 553 587 642 667 675 Vaishali 1,391 163 165 496 504 542 568 573 Sitamarhi 993 149 153 251 279 327 337 337 Darbhanga 943 90 119 150 159 237 255 268 Samastipur 1,213 283 314 355 365 401 414 423 Madhubani 1,028 151 159 189 215 278 297 321 Segusarai 692 262 311 402 436 456 461 461 Monghyr 2,636 507 556 728 815 1,108 1,123 1,130 Bhagalpur 2,552 345 382 479 507 625 630 649 Santhal Paraganas 10,025 343 353 506 571 760 806 878 Saharasa 1,302 75 96 178 257 311 327 338 Purnea 2,493 50 90 121 184 224 230 236 Katihar 1,239 34 56 94 120 140 145 146 Hazaribagh 3,271 268 269 411 414 470 489 489 Giridh 2,860 ill 113 198 198 199 225 225 Dhanbad 1;365 207 209 259 261 307 307 307 Ranchi 3,836 134 139 184 296 466 473 476 Palamau 3,218 356 349 464 482 556 556 557 Singhbhum 4,351 86 91 98 133 204 213 220 Bihar: 67,566 9,280 9,814 14,637 15,617 17,888 18,425 18,703 * Provisional Source: Lihar State Electricity Board, Patna ANNEX 1 - 43 - Table 6 INDIA BIHAR AGRICULTURAL CREDIT PROJECT PROJECT COMPLETION REPORT Segregation of Electricity Sold by the Board Electricity Sold (M kw) Class of Consumers 1974/75 1975/76 1976/77 1977/78 1978/79 Domestic 89.88 119.74 145.06 168.47 184.00 (3.67) 1/ (4.18) (4.79) (5.66) (6.02) Commercial 81.77 103.76 112.70 128.99 121.07 (3.33) (3.62) (3.72) (4.33) (3.96) Industrial (up to 650 volts) 57.02 214.79 247.30 305.70 290.44 (2.33) (7.48) (8.17) (10.27) (9.50) Public lighting 4.42 5.39 5.58 5.11 5.98 (0.18) (0.19) (0.10) (0.17) (0.20) Industrial 1,017.03 1,363.85 1,545.56 1,544.38 1,601.51 (about 650 volts) (41.50) (47.59) (51.04) (51.88) (52.37) Traction 225.94 260.69 258.17 280.27 224.41 (9.22) (9.10) (8.53) (9.22) (7.34) Irrigation 326.40 454.13 450.12 299.08 196.71 (13.32) (15.85) (14.86) (10.05) (6.43) Public water works 42.57 50.40 48.84 50.98 53.53 (1.74) (1.76) (1.61) (1.71) (1.75) Bulk sale to (a) Licenses 90.00 35.18 - 18.72 17.55 (b) Other agencies (3.67) (1.23) (-) (0.63) (0.57) Source: Bihar State Electricity Board, Patna. 1/ Figures in parentheses indicate percentages. ANNEX 2 Table 1 INDIA BIHAR AGRICULTURAL CREDIT PROJECT PROJECT COMPLETION REPORT Total Loaning Programs of Banks and ARDC Disbursements (Original Area) Total Amount Refinance Financial ARDC's Disbursed Released Agency Assistance Commitments by Banks by ARDC -----------------(Rs M)-------------------- State Bank of India 39.65 35.69 39.10 35.19 United Bank of India 2.34 2.11 0.98 0.90 Central Bank of India 77.41 69.66 43.54 39.44 Allahabad Bank 4.24 3.82 2.83 2.55 Union Bank of India 3.16 2.84 2.69 2.40 Bank of India 2.51 2.26 1.10 0.99 Bank of Baroda 0.55 0.49 0.05 0.04 United Commercial Bank 1.15 1.04 0.71 0.64 Punjab National Bank 31.06 27.96 10.20 9.11 Canara Bank 6.61 5.95 - - Total CBs 168.68 151.82 101.20 91.27 (%) (39.2) (39.2) (33.8) (33.8) Bihar State Land Development Bank 262.12 235.90 198.57 178.66 (%) (60.80) (60.80) (66.20) (66.20) Grand Total 430.80 387.72 299.77 269.93 (%) 100.00 100.00 100.00 100.00 45 - ANNEX 2 Table 2 INDIA BIHAR AGRICULTURAL CREDIT PROJECT PROJECT COMPLETION REPORT Total Loaning Programs of Banks and ARDC Disbursements (Extended Area) Total Amount Refinance Financial ARDC's Disbursed Released Agency Assistance Commitments by Banks by ARDC -------------------(Rs M) -------------------- State Bank of India 203.28 182.96 39.10 32.17 Central Bank of India 69.04 62.14 43.54 23.29 United Bank of India 17.93 16.14 0.98 5.60 Allahabad Bank 13.68 12.31 2.83 2.26 Union Bank of India 11.22 10.10 2.69 7.59 United Commercial Bank 33.32 29.99 0.71 4.70 Bank of India 15.85 14.26 1.10 4.63 Bank of Baroda 1.71 1.54 0.05 - Punjab National Bank 57.19 51.47 10.20 9.00 Canara Bank 3.13 2.82 - - Total CBs 426.35 383.72 99.18 89.24 (%) (57.20) (57.20) (74.20) (74.20) Bihar State Land Development Bank 318.48 286.63 34.54 31.09 (%) (42.80) (42.80) (25.80) (25.80) Grand Total 744.83 670.35 133.72 120.33 (%) 100.00 100.00 100.00 100.00 - 46 - ANNEX 3 Table 1 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Bihar LDB Income Statement as on June 30th Particulars 1973 1974 1975 1976 1977 1978 1979 /a ---------------(Rs M)--------- Income Interest received on: Project loans 22.3 31.0 38.1 54.1 64.0 79.2 67.4 Other loans and investments 1.7 3.4 6.5 10.0 14.4 17.6 13.4 Total interest received 24.0 34.4 44.6 64.1 78.4 96.8 80.8 Miscellaneous income 0.8 0.9 2.5 1.0 1.8 0.9 3.1 Total income 24.8 35.3 47.1 65.1 80.2 97.7 83.9 Expenses Total interest paid 18.0 25.7 34.6 45.8 57.4 65.6 69.2 Establishment cost 5.3 7.7 9.7 11.2 10.8 13.7 13.9 Other expenditure 0.3 0.6 0.5 0.7 0.9 0.9 0.8 Total expenses 23.6 34.0 44.8 57.7 69.1 80.2 83.9 Net profit /b 1.2 1.3 2.3 7.4 11.1 17.5 - /a Provisional. 7- The amount transferred to balance sheet being the net profit. - 47 - ANNEX 3 Table 2 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Bihar LDB Condensed Balance Sheets as on June 30th Particulars 1973 1974 1975 1976 1977 1978 1979 -----------------------(Rs M)------------------------ Assets Cash on hand and with banks 21.1 34.4 47.4 38.9 44.0 49.2 112.7 Investments and loans 385.2 501.7 668.3 827.8 1017.1 1086.6 1086.7 Other assets 17.6 25.4 38.3 45.2 71.1 99.7 105.3 Total assets 423.9 561.5 754.0 911.9 1132.2 1235.5 1304.7 Liabilities and Equity Capital Debentures 334.3 446.9 595.7 767.3 940.6 978.9 1012.6 Other liabilities 55.2 67.2 96.5 66.5 89.9 132.5 135.4 Total liabilities 389.5 514.1 692.2 833.8 1030.5 1111.4 1148.0 Equity Paid up share capital 30.5 42.2 54.2 63.1 75.6 80.5 113.0 Reserves, including overdues interest and bad debts 1.1 2.0 4.0 5.3 5.3 5.3 5.4 Profit 2.8 3.2 3.6 9.7 20.8 38.3 38.3 Net equity 34.4 47.4 61.8 78.1 101.7 124.1 156.7 Total liabilities and equity 423.9 561.5 754.0 911.9 1132.2 1235.5 1304.7 ANNEX 3 -48 - Table 3 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Demand and Recovery Position of Bihar LDB Particulars 1973 1974 1975 1976 1977 1978 1979 ------------------- (Rs M)----- -- ------- 1. Overdues brought forward 12.90 17.90 28.58 41.07 43.90 126.64 189.28 2. Demand falling due for the first time during that year 40.35 67.09 89.59 118.91 174.15 184.44 193.49 3. Total (1+2) 53.25 84.99 118.17 159.98 218.05 311.08 382.77 4. Demand resche- duled during the year - - - - - - - 5. Total effective demand (1+2+3) 53.25 84.99 118.17 159.98 218.05 311.08 382.77 6. Recoveries during the year 35.35 56.41 77.10 116.08 91.41 121.79 155.23 7. Percentage of recoveries to demand (6, 3) 66 66 65 73 42 39 40 8. Percentage of overdues to demand 34 34 35 27 58 61 60 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Division and Period-wise Classification of Bihar LDB OvLrdues (as on 6/30/79) (Amounts in Rs M) Less than l year Between 1-2 years Between 2-3 years Between 3-4 years Between 4-5 ears Above 5 years Total defaulters No. Amount No. Amount No. AmounL No. Amount No. Amount No. Amount No. Amount Patna 9,340 12.27 7,601 13.39 4,994 11.13 2,520 6.73 1,326 5.48 549 3.12 26,330 52.62 Bhagalpur 4,703 5.31 4,763 7.72 3,333 7.72 1,655 4.12 850 2.33 431 1.73 15,735 28.93 TirhU 6,442 7.49 11,840 20.84 8.707 18.14 3,988 11.86 3,288 9.27 1,625 6.16 35,890 73.77 Kosi 5,032 4.63 4,888 8.38 3,732 7.26 2,076 5.45 1,224 4.32 311 1.70 17,263 31.75 Ranchi 2,743 2.34 2,988 3.55 1,661 2.58 715 1.72 181 0.71 89 0.52 8,377 11.42 Darbhanga 2,963 3.06 4,026 7.28 4,212 9.88 1,859 4.69 1,070 2.69 406 1.43 14,536 29.05 Grand Total 31,223 35.10 36,106 61.66 26,639 56.71 12,813 34.57 7,939 24.80 3,411 14.66 118,131 227.54 Source: Bibar Sate Land Development Bank INDIA BIHAR AGRICULTURAL CREDIT PROJECT THE BIHAR STATE LAND DEVELOPMENT BANK LTD. District and Period-wise Classification of Bihar LDB Overdues (as on 6/30/79) (Amounts in Ra M) Name of District Less than 1 year Between 1-2 years Between 2-3 years Between 3-4 years Between 4-5 years Above 5 years Total defaulters with No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount Patna 1,648 1.47 2,097 3.12 1.271 2.47 556 1.49 444 1.34 220 0.87 6,236 10.76 Nalanda 1,210 1.87 997 1.82 606 1.07 193 0.65 55 0.20 5 0.05 3,066 5.67 Nawalah 683 0.81 478 0.65 311 0.59 234 0.54 94 0.33 75 0.24 1,875 3.17 Gaya 3,197 2.61 1,588 2.70 972 2.00 504 0.87 105 0.56 53 0.31 6,419 9.06 Aurangabad 346 0.40 341 0.41 185 0.58 125 0.56 64 0.33 3 0.03 1,064 2.31 Rohtas 1,250 3.03 980 2.50 1,137 3.14 592 1.78 426 1.95 136 0.87 4,521 13.28 Bhojpur 1,006 2.07 1,120 2.70 512 1.28 316 0.83 138 0.76 57 0.72 3,149 8.36 Muzaffarpur 83 0.08 1,886 2.92 1,648 3.21 983 2.41 673 1.23 296 1.25 5,479 11.11 Sitamarhi 1,621 2.22 1,341 2.08 687 1.67 251 0.62 144 0.65 177 0.58 4,221 7.83 Vaishali 1,022 0.90 1,379 3.31 1,243 2.40 117 0.61 10 0.15 - - 3,771 7.36 Chapra 1,687 2.04 1,470 2.60 799 1.95 675 1.50 1,068 2.70 107 0.53 5,806 11.30 Siwan 1,082 1.24 1,326 1.25 654 1.20 128 0.34 7 0.03 - - 3,197 4.07 Gopalganj 461 0.48 1,015 1.27 656 1.00 260 0.62 42 0.16 32 0.21 2,466 3.75 Champaran (East) 79 0.09 2,672 5.68 2,010 3.61 649 1.81 405 1.42 204 1.10 6,019 13.73 Champaran (West) 407 0.41 751 1.74 1,010 3.08 1,015 3.96 939 2.93 809 2.48 4,931 14.61 Dharbanga 409 0.74 428 1.05 495 0.99 328 0.58 265 0.72 210 0.42 2,135 4.50 Madhubani 286 0.26 756 1.09 1,052 1.45 648 1.48 533 1.12 73 0.33 3,348 5.76 Samastipur 1,941 1.53 1,669 2.75 1,142 3.94 255 0.99 39 0.22 18 0.25 5,064 9.70 Begusarai 327 0.52 1,173 2.40 1,523 3.50 628 1.63 233 0.63 105 0.42 3,989 9.09 Saharsa 1,064 1.05 1,480 2.78 1,022 3.33 1,435 3.36 928 2.98 216 0.85 6,145 14.35 Purnea 2,771 2.89 2,054 3.93 2,127 3.03 543 1.78 255 1.14 86 0.78 7,836 13.54 Katihar 1,197 0.68 1,354 1.68 583 0.90 98 0.31 41 0.20 9 0.08 3,232 3.86 Bhagalpur 2,205 1.86 1,505 2.42 1,004 2.43 508 1.38 159 0.66 62 0.35 5,443 9.17 Santal Parganas 1,115 1.22 836 0.78 553 0.68 191 0.34 3 0.01 81 0.10 2,779 3.13 Monghyr 1,383 2.23 2,422 4.52 1,776 4.61 956 2.40 688 1.66 283 1.27 7,513 16.70 Hazaribagh 193 0.20 764 0.92 342 0.56 95 0.22 43 0.09 - - 1,437 2.00 Giridh 620 0.34 238 0.33 117 0.14 45 0.14 10 0.11 2 0.009 1,032 1.04 Dhanbad 27 0.01 361 0.16 127 0.07 32 0.09 - - - - 547 0.33 Ranchi 918 0.88 908 1.29 369 0.78 218 0.43 36 0.20 20 0.13 2,469 3.71 Palamu 619 0.60 375 0.55 363 0.47 177 0.47 60 0.20 61 0.34 1,655 2.64 Singbhum 366 0.30 342 0.30 343 0.55 148 0.37 32 0.10 6 0.04 1,237 1.65 31,223 35.02 36,106 61.70 26,639 56.68 12,813 34.56 7,939 24.80 3,411 14.669 118,081 227.54 ANNEX 3 - 51 - Table 6 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Measures Taken for Recovery of Loans 1. Adequate number of staff posted in the branches at least one Supervisor in each block; 2. Demand list prepared in December; 3. Notices served on all loanee members for recovery of arrears as well as current dues in the first week of January; 4. Second notice served in February; 5. Weekly review of progress of collection made at branch level; 6. Directive issued for filing certificate cases against all defaulting members and action completed; 7. Demand list sent to Block Development Officers for extending help in collection drive; 8. List of defaulters having overdues of more than Rs 3,000/- and also of five years duration sent to District Collector for collection of dues through his good offices; 9. Instructions issued by the State Government to the Collector for extend- ing all help and cooperation to LDB staff in collection of dues; 10. For speedy disposal of certificate cases, powers vested with District Cooperative Officer and Assistant Registrar; 11. For expeditious execution of Distress Warrants and Arrears Warrants, magisterial powers vested with the officers of the Land Development Bank; 12. Police and magisterial assistance procured as and when required to deal with recalcitrant defaulters; 13. Recovery Cell at the Bank Headquarters strengthened; 14. Collection squad constituted at divisional and district levels with Senior Officer of Headquarters and Regional Officers specially to deal with problem areas; 15. Reviews of progress made at regional level and state levels and suitable directions issued for improvement, staff having bad performance pulled up; incentive given to good workers; -52 - ANNEX 3 Table 6 Page 2 16. Review of collection made at district, divisional and state level Coordination Committee Meetings; 17. Weekly monitoring and evaluation of progress made in respect of collection by Managing Director himself and suitable directive issued for improvement Legal Steps Taken to Improve Recoveries in Future Formerly there was no provision for expeditious recovery of loans under the Cooperative Societies Act except recovery of dues by taking award against the defaulting members. It was a lengthy procedure. Suitable amend- ments were made and now the LDB dues can be realized by taking the following legal measures: 1. Direct certificate cases are filed with the Collector for recovery. The Bank is availing this facility. Under this provision, certificate cases are filed by the LDB before the certificate officers. Recovery is made through execution of D.Ws. and A.Ws. 2. The second measure is recovery of dues by distress warrant and sale of the produce of the mortgaged land. Under this provision, an application is to be made by the LDB to the Registrar, Cooperative Societies for necessary action. The Registrar or any person authorized by him can take action under this provision. The Bank has moved the Registrar, Cooperative Societies for vesting this power with the Assistant Registrar, for quick disposal of the cases. The Bank has not as yet availed of this facility. This will improve the position further. 3. The third provision is that the Bank can bring the mortgaged property to sale without intervention of the court. Necessary directives have been issued to the Branches for implementing this measure. - 53 - ANNEX 4 Table 1 INDIA BIRAR AGRICULTURAL CREDIT PROJECT Cropping Pattern of Selected Farmers (Percentage to the gross-cropped area) crop Small Others All With Without With Without With Without Irrigated Kharif Paddy HY 40.80 0.40 32.80 - 38.00 0.23 Maize HY 3.50 - 12.10 - 6.00 - Paddy L - 1.50 6.40 2.10 2.00 1.65 Rabi Wheat HY 37.90 1.20 36.60 - 38.00 0.69 Wheat L - 5.20 - - - 2.90 Potato (Imp) 9.90 - 5.50 - 9.00 - Onion 1.70 - 1.20 - 1.00 - Maize HY 0.60 - 1.20 - 1.00 - Vegetable HY 1.00 - 1.20 - 1.00 - Vegetable L - 2.50 - - - 1.38 Potato L - 10.90 - 3.10 - 7.45 Urad L - 0.90 - - - 0.48 Summer Moong L 0.60 - - - - - Chana L 1.70 - - - 1.00 - Maize L 2.00 - 0.90 - 1.00 - Others - 0.80 - - 1.00 0.46 Unirrigated Maize L - 0.80 0.80 1.50 - 1.15 Paddy L - 51.60 1.30 59.50 1.00 55.11 Garlic L - 2.50 - 2.80 - 2.66 Wheat L - 7.10 - 25.30 - 15.20 Mazoor - - - 2.10 - 0.92 Arhar L - 9.90 - 3.60 - 7.12 Chana L 0.20 - - - - - Moong L 0.10 3.30 - - - 1.84 Jute L - 1.40 - - - 0.75 Total 100.00 100.00 100.00 100.00 100.00 100.00 - 54 - ANNEX 4 Table 2 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Yield per Acre with Project and without Project (Quintals) Crop Small Others All With Without With Without With Without Irrigated Paddy HY 10.5 10.0 10.5 8.0 10.5 8.40 Maize HY 11.0 - 11.3 - 11.0 - Paddy L - 6.8 7.0 - 7.0 6.80 Potato L - 26.5 - 25.0 - 23.0 Wheat HY 10.8 10.0 10.3 - 11.0 10.0 Potato (Imp) 60.0 - 53.0 - 59.0 - Onion HY 60.0 - 55.0 - 51.0 - Maize HY 10.9 - 10.9 - 11.0 - Vegetable L 30.0 28.0 42.0 - 36.0 30.0 Wheat L - 7.9 - - - 8.0 Urad - 3.8 - - - 3.8 Maize HY - - 10.6 - 11.0 - Maize L 6.0 - - - 6.0 - Chana L 3.9 - - - 4.0 - Moong L 3.9 - - - 4.0 Others - 3.0 - - - 3.0 Unirrigated Paddy L - 6.0 6.0 6.0 6.0 6.0 Maize L - 6.0 6.1 6.0 6.1 6.0 Chana L 3.0 - - - 3.0 - Moong L 2.2 3.3 - - 2.0 3.3 Jute L - 2.5 - - - 2.5 Wheat L - 7.0 - 7.0 - 7.0 Arhar L - 3.5 - 3.4 - 3.5 Masoor L - - - 3.5 - 3.5 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Cost of Cultivation (Rupees) -Small Farmers Others All Farmers With Without With Without With Without Material input cost ',Q446 362 2,413 839 1,263 433 Bullock and human labour costs 957 580 2,293 1,227 1,169 668 Irrigation cost 514 111 1,262 62 632 90 L Other overhead costs 592 228 1,295 564 703 282 Interest on S.T. loan 158 73 371 162 192 86 Land Revenue 27 28 68 68 34 35 Cost of cultivation per family 3,294 1,382 7,702 2,922 3,993 1,594 Per acre (Net) 1,689 709 1,588 602 1,657 661 H- rM INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Models: Land Use with STWs (Acres) Model 1: Shallow Tubewell Model 2: Shallow Tubewell Model 3: Shallow Tubewell with Electric/Diesel Pump- with Electric/Diesel Pump- with Electric/Diesel Pump- set - Small farmers set - Others set - All (Average) Cropping Pattern Benefiting Area: 2.00 Acres Benefiting Area: 4.75 Acres Benefiting Area: 2.40 Acres With Without With Without With Without Irrigated Paddy HY 1.55 0.01 2.89 - 1.71 0.01 Paddy L - 0.05 0.56 0.15 0.09 0.06 Maize HY 0.13 - 1.06 - 0.27 - Wheat HY 1.44 0.04 3.22 - 1.71 0.03 Wheat L - 0.16 - - 0.11 Potato (Impr.) 0.38 - 0.48 - 0.41 - Potato (local) - 0.34 - 0.22 - 0.28 Vegetable 0.04 0.08 0.11 - 0.04 0.05 Others 0.24 - 0.32 - 0.23 0.04 Unirrigated Paddy L - 1.60 0.12 4.28 0.05 2.03 Maize L 0.02 - 0.12 - 0.02 Wheat I. -0.22 - 1.83 - 0.56 Others 0.02 0.58 0.08 0.62 0.51 3.80 3.10 8.84 7.22 43.TO Cropping intensity 190% 155% 186% 152% 188% 154% WO 3 ;P a 1 P INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Models: Gross Farm Income: STI - Farms (Rupees) Small Farmers Others All (Average) Benefiting area: 2.00 acres Benefiting area: 4.75 acres Benefiting area: 2.40 acres With Without With Without With Without Value of gross produce Irrigated Crops Paddy HY 1,625 10 3,000 - 1,800 10 Paddy L - 35 350 105 75 50 Maize HY 169 - 1,416 - 354 - Wheat HY 1,829 52 3,894 - 2,183 38 Wheat L, - 151 - - - 103 Potato (imp) 1,320 - 1,500 - 1,440 - Potato (L) - 450 - 330 - 325 Vegetable 60 168 300 - 60 105 Others 328 - 662 - 285 36 Unirrigated Paddy L - 960 75 2,600 35 1,218 Maize L - 14 - 85 - 15 Wheat L - 182 - 1,534 - 472 Others 10 431 59 528 - 363 Total 5,341 2,453 11,256 5,182 6,232 2,735 '0 Cr n INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Models: Cultivation Costs and Incremental Income: STW - Farms (Rupees) Small Farmers Others All (Average) Benefiting area: 2.00 acres Benefiting area: 4.75 acres Benefiting area: 2.40 acres With Without With. Without With Without Costs Seed, fertilisers, manures, 2,055 1,017 4,577 1,999 2,448 1,100 pesticides labour , etc., L1 Irrigation 623(510) 1/ 107 1,252(1,025) 60 736(602) 97 0 Bullock & others 793 340 1,687 806 922 402 1 Total 3,471(3,358) 1,464 7,516(7,289) 2,865 4,106(3,976) 1,599 Net surplus 1,870(1,983) 989 3,470(3,967) 2,317 2,126(2,260) 1,136 Sale of water 100(122) - 90(88) - 95(118) - Net income 1,970(2,105) 989 3,833(4,055) 2,317 2,221(2,378) 1,136 Incremental income 981(1,116) - 1,513(1,738) - 1,085(1,242) - 1/ Figures in brackets relate to diesel pumpsets. 00~ W~ - 59 - ANNEX 4 Table 5 Page 1 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Model: Land Use and Income with Medium Tubewells (Benefiting area: 5.00 acres) Cropping Pattern With Without Irrigated Paddy (HY) 2.05 Wheat (HY) 4.40 Maize (HY) 0.74 Potato (HY) 0.20 Vegetable 0.13 Others 0.15 Unirrigated Paddy (L) - 0.64 Wheat (L) - 1.20 Maize (L) - 0.10 Gram (L) - 1.41 Kesari (L) - 0.40 Masoor (L) - 0.75 Others - 0.50 Total 7.75 5.0 Cropping intensity 154% 100% -60- ANNEX 4 Table 5 Page 2 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Models: Gross Farm Incomes; MTW - Farms (Benefiting area: 5.00 acres) Cropping Pattern (ac) With Without Irrigated Paddy (HY) 2,029 - Wheat (HY) 6,630 - Maize (HY) 1,048 - Potato (HY) 534 - Vegetable 212 - Others 258 - Unirrigated Paddy (L) - 384 Wheat (L) 842 Maize (L) - 97 Gram (L) - 1,015 Kesari (L) - 227 Masoor (L) - 516 Others - 367 Total 10,711 3,448 - 61 - ANNEX 4 Table 5 Page 3 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Models: Costs and Incremental Income; MTW - Farms Costs Items With Without Seeds, fertilizers manures, pesticides 1,577 489 Labor 1,335 726 Irrigation 1,432 (1,305) /a - Bullock and others 1,089 901 Total Costs 5,344 (5,306) 2,116 Net surplus 5,278 (5,405) 1,332 Sale of water 124 (124) - Net income 5,402 (5,529) 1,332 Incremental income 4,070 (4,197) /a Figures in brackets relate to T.W. with diesel pumpset. ANNEX 4 - 62 - Table 6 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Model: Diesel Pumpset (single purpose) (Benefiting area: 2.00 acres) With the Without the Items Project Project Cropping Pattern and Land Use (ac) Irrigated Paddy HY 1.24 0.68 Maize HY 0.45 - Wheat HY 1.00 Potato (Imp) 0.60 - Onion - 0.48 Chana L 0.23 - Maize L - - Unirrigated Paddy 1 0.70 Chana L - 1.06 Total 3.52 2.92 Cropping Intensity 176% 146% Value of Gross Production (Rs) Paddy HY 1,254 694 Maize HY 467 - Wheat HY 1,200 Potato (Imp) 1,980 - Onion - 1,324 Chana 184 - Maize HY - 513 Paddy L 420 Chana L - 240 5,085 3,191 Costs (Rs) Input cost 2,050 1,157 Irrigation 486 294 Other costs 850 664 Total 3,386 2,115 Net surplus (Rs) 1,699 1,076 Income from sale of water (Rs) 112 - Net income (Rs) 1,811 1,076 Net incremental income (Rs) 735 - INDIA BIHAR AGRICULTURAL CREDIT PROJECT Cash Flow Statement for Small Farmers with STW 1 (Rupees) Benefiting area: 2.00 acres Shallow Tubewell with Electric Shallow Tubewell with Diesel Pumpset (5 HP) - years Pumpset (5 HP) - years 1 2 3 4-14 15 1 2 3 4-14 15 Net incremental income 2/ 470 705 881 1,175 1,175 530 795 994 1,325 1,325 Income from sale of water 50 75 100 100 100 61 91 122 122 122 Scrap value of pumpset 3/ - - - - 200 - - - - 240 Investment cost (5,800) - - - - (6,600) - - - - Net incremental cash flow (5,280) 780 981 1,275 1,475 (6,009) 896 1,116 1,447 1,687 Financial rate of Return 20% 20% 1/ Without debt transactions. 2/ Year .1 = 40% of full development value; year 2 = 60% of full development value; year 3 = 75% of full development value; year 4 onwards full development value. 3/ Taken at 5% of the cost of pumpset. M-.t M P4 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Cash Flow Statement for Other than Small Farmers with STW 1 (Rupees) Benefiting area: 4.75 acres Shallow tubewell with electric Shallow tubewell with Diesel Pumpset pumpset (5 HP) - years (5 HP) - years 1 2-. 3 4-14 15 1 2 3 4-14 15 Net incremental income 759 1,138 1,423 1,897 1,897 880 1,320 1,650 2,200 2,200 Income from sale of water 45 68 90 90 90 44 66 88 88 88 Scrap value of pumpset - - - - 200 - - - - 240 Investment cost (5,800) (6,600) Net incremental cash flow (4,996) 1,206 1,513 1,987 2,187 (5,676) 1,386 1,738 2,288 2,528 Financial Rate of Return 34% 34% 1/ Without debt transactions. 2/ Year 1 = 40% of full development value; year 2 = 60% of full development value; year 3 = 75% of full development value; year 4 onwards full development value. 3/ Taken at 5% of the cost of pumpset. M > I-o 4 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Cash Flow Statement for All Farmers (Average) with STW 1/ (Rupees) Benefiting area: 2.40 acres Shallow Tubewell with Electric Shallow Tubewell with Diesel Pumpset (5 HP) - years Pumpset (5 HP) - years 1 2 3 4-14 15 1 2 3 4-14 15 Net incremental income 2/ 528 792 990 1,320 1,320 600 900 1,124 1,499 1,499 Income from sale of water 48 62 95 95 95 59 90 118 118 118 Scrap value of pumpsets - - - - 200 - - - - 240 Investment cost (5,800) (6,600) Net incremental cash flow (5,224) 854 1,085 1,415 1,615 (5,941) 990 1,242 1,617 1,857 A Financial Rate of Return 22% 22% 1/ Without debt transactions. 2/ Year 1 = 40% of full development value; year 2 = 60% of full development value; year 3 = 75% of full development value; year 4 onwards full development value. 3/ Taken of 5% of the cost of pumpset. >- C INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farmers' Cash Flow: Medium Tubewell with Electric Motor 1 (Rupees) Benefiting area: 5.00 acres Years 1 2 3-14 15 Net incremental income2/ 1,973 2,959 3,946 3,946 Income from sale of water 62 93 124 124 Residual value of pumpset 3/ - 160 Investment cost (11,200) - - - Net benefit (9,165) 3,052 4,070 4,230 Financial Rate of Return = 41% 1/ Without debt transactions. 2/ Year, 1 = 50%; year 2 = 75% of full development value; year 3 onwards full development value. 3/ 5% of the cost of pumpset. (D XT 0- r- INDIA BIHAR AGRICULTURAL CREDIT PROJECT 1/ Farmers' Cash Flow: Medium Tubewell with Diesel Motor - (Rs) Benefiting area: 5.00 acres Years 1 2 3-14 15 Net incremental income2/ 2,036 3,055 4,073 4,073 Income from sale of water 62 93 124 124 3/ Residual value of pumpset 210 Investment cost (12,200) Net benefit (10,102) 3,148 4,197 4,407 Financial Rate of Return 39% 1/ Without debt transactions. 2/ Year 1 = 50%; year 2 = 75% of full development value. Year 3 onwards full development value. 3/ 5% cost of pumpset. M >4 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farmer's Cash Flow Statement: Installation of Diesel Pumpset (5Hp) on existing Borewell 1/ (Rupees) Benefiting area: 2.00 acres Years 1 2 3 4-14 15 Net incremental income from cultivation 2/ 332 499 623 831 831 O Income from sale of water 56 84 112 112 112 Residual value of pumpset 3/ - - - - 240 Investment cost (4,800) - - - - Net incremental cash flow (4,412) 583 735 943 1,183 Financial Rate of Return 20% 1/ Without debt transactions* 2/ Year 1 = 40% of full development value; year 2 - 60% of full development value; year 3 = 75% of full development value; year 4 onwards full development value. 3/ 5% cost of pumpset. -69- ANNEX 4 Table 13 INDIA BIRAR AGRICULTURAL CREDIT PROJECT Investment Cost of Shallow and Medium Tubewells with Pumpset (in 1978/79 Rupees) STW MTW Item Electric Diesel Electric Diesel -----------------(Rs)-------------------- Cost of W.I. Pipe 1145 1,145 2,650 2,650 Cost of boring 850 850 Cost of strainer - 2,500 2,500 Labor cost, material cost, transportation charges and contingency expenses 655 655 2,000 /a 2,000 /a Cost of pumpset 4 000 4,800 3,200 /b 4,200 /b 5,800 6,600 11,200 12,200 /a Includes pumphouse and channel costs. 7-b Fitted with ordinary pump. INDIA BIHAR AGRICULTURAL CREDIT PROJECT Estimated Increase in Cropped Area, Production Value of Additional Production Cropped area (acres) Production (in Tons) Value of At full, At full Increased develop- develop- Production Crops Before ment Increase Before ment Increase (Rs '000) Paddy 145,633 181,620 35,987 950,365 1,124,365 174,000 174,000 Maize 5,462 83,818 78,356 38,327 133,880 95,553 112,752 Wheat 87,680 311,000 223,320 441,179 765,732 324,553 359,607 Others 111,873 5,882 (105,991) 330,446 304,828 (25,618) (5,124) Total Food 350,648 582,320 231,672 1,760,317 2,328,805 568,488 484,635 Grains Potato - 29,691 29,691 - 214,009 214,009 128,405 Vegetable - 13,607 13,607 - 69,780 69,780 41,868 Grand Total 350,648 625,618 274,970 1,760,317 2,612,594 852,277 654,908 1/ include Kesari, Masoor, gram -71- ANNEX 4 Table 15 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Farm Harvest Prices of Principal Crops in Bihar (1978/79) (Rs per quintal) Paddy 100.00 Maize 118.00 Wheat 118.00 Onion 60.00 Gram 208.00 Arahar 220.00 Masoor 210.00 Chana 200.00 Potato (Improved) 60.00 -72 - ANNEX 4 Table 16 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Fertilizer Prices (1978/79) Name of Chemical Fertilizer Per bag of 50 kg (net) Per kg. in Retail Urea 46% 75.17 1.51 Ammonium sulphate 46.65 0.94 (50 kg packing) Di-ammo. phosphate 114.12 2.33 Cal. ammo. nit. 25% 51.83 1.04 Suphala (15-15-15) 65.00 1.35 Suphala (20-20-20) 75.00 1.55 IFFCO (12-32-16) 104.67 2.15 Source: The Bihar State Cooperation Marketing Union Ltd., Patna. - 73 - ANNEX 4 Table 17 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Selling Rates of Seeds during 1978/79 Name of Crop Varieties Price (Rs per Quintal) Khariff Crops Paddy Jaya, IR-8 240.00 Paddy Kaveri, Pankaj, Bala, Pusha 255.00 Paddy Ratna, Sita, Mansoori, IR-20 260.00 Maize Hybrid Maize GS-2, SG-5 550.00 Moong Kopargaon, Vaisakhi 600.00 Urad T-9 600.00 Arahar All varieties 600.00 Rabi Crops Wheat Sonail, Up-262 270.00 Gram- 300.00 Masoor 550.00 Source: National Seeds Corporation, Patna. ANNEX 4 Table 18 INDIA BIHAR AGRICULTURAL CREDIT PROJECT Selling Rates of Pesticides 1978-79 Selling Rate Name of Pesticides Unit/Packing for 1978-79 (Rs) B.H.C. 10% Dust Per M.T. (50 Kg. Bag) 50.40 Phosphamidon 100 EC (Dimercon) Per Litre (1 Lt.) 16.35 Malathion 50 EC Per Litre (1 Lt.) 31.40 Zinc phosphide Per Kg (500 Gram Tin) 36.00 Endosulfan 35% EC Per Litre (1 Litre Pack) 62.00 Dimethoatan 30% EC Per Litre (1 Litre Pack) 52.00 Carbofiron Per kg. 17.15 Metasistock Per Litre 77.00 Gama BHC 20% EC Per Litre 40.00 Aldrin 30% EC Per Litre 43.00 Aldrin 5% dust Per kg. 237.00 Auticobulent Per kg. 20.00 Source: Bihar State Cooperation Marketing Union Ltd., Patna. 10483R6 DECEMBER 1981 DEMOCRATIC REPUBLC OF AFGHANISTAN ® State and Union Territory Coprols * Nationa Capital o-tareeoderasc Other Cities PRA DESH State and Union Territory Boundares - International Boundaries PAKISTAN no0 PUN A8i,ir2~in CHINA a EApro×r~ Orr s EW DELHI nacared 2r c J T NEPAL o B T N P A DES \ R A0A SATAN m okno RUN2 ¯HA2 ~pur - P<DESH KOnpur Patra nlong Khir 0 p'e~ ~MEHALÅA -uANGLADESH 7ph< 1 EtholAgairtal« Aý Gandhinaga iB opalps Ahmedabad GU'JARAT C< BENGAL' J MAS,HYA PR5ADS c-utta BURMA 20 0/552 cuttack 301. A HM A RÄ S H T R A Bhubanes-ar® Bomnbay 5 ' Hyderabad A/VDHRA PRADESH Panjimn * GOA KARNA1TAK '2 BangOoare~ Ma4dros 4 cochin0 1 00 200 300 400 500 MILES /ERA,A 0 |7 0 200 300 40 570 600 700 900 K0OMETERS Tnandrum%? SRI LANKA °rap ot ach oun.drrne s'o° mc~,ale