India - Pochampad Irrigation Project

Document of The World Bank Report No. 3499 PROJECT PERFORMANCE AUDIT REPORT INDIA: POCHAMPAD IRRIGATION PROJECT rrnrT1r OCO Tay1, (CRo'EDIT 2.0 IAN) June 16, 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.  unD nrrpi AT I j nyIT V A B W LF% NPA A ALA LJAJ %L0L J J A PROJECT PERFORMANCE AUDIT REPORT INDIA: POCRAMPAD IRRIGATION PROJECT (CREDIT 268-IN) TABLE OF CONTENTS Page No. Preface ............................................................ i Project Performance Audit Report Basic Data Sheet ..................... ii Highlights ......................................................... iv PROJECT PERFORMANCE AUDIT MEMORANDUM I. SUMMARY ..................................... ......1...... TT. MATN OBSERVATTONS ................ ................... 5 A. Gn ral ......... ............... 5 B. Operational Problems ................................. 5 C. Land Fragmentation-- 7 Attachment* DPATET AMPTTTAT DEPAT II. Formulation ................................................. 10 TTT. Tma a o .. .. . .. . .. . 1 r S* L....ck.C..La ********** *****.............*** AJ IV. Economic and Financial Impact ............................... 30 Tables: 1-8 ,ftLLLt=At:b J 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,  - 1 - PROJECT PERFORMANCE AUDIT REPORT INDIA: POCHAMPAD IRRIGATION PROJECT (CREDIT 268-IN) PREFACE This is a performance audit of the Pochampad-! Irrigation Project in India for which Credit 286-IN was approved in July 1971 in the sum of US$39 million. The final disbursement was made on September 1, 1976. The project works were, however, not completed until 1979. The audit report consists of an audit memorandum oreDared hv thp Operations Evaluation Department and a Project Completion Report dated Sep- tember 26. 1980. The PCR was DreDared by the South A.in Rpoinn;l Offir,- rn the basis of country visits in October 1978 and August 1980. The audit memorandum is based on a revipw of thp Annr;i.z1 Repnort (MN PA-0) Ated June 16, 1971, the President-s Report (P-974) of June 21, 1971, the Credit Agreement dated Anfiizt 23 1971 qnd the PCR- Correapndena ith the Bor- rower and internal Bank memoranda on project issues as contained in relevant Rnnk filpq havie ;qlcn hppn cnncilt r nnA Rnnk staff associated with the proec have been interviewed. An OED mission visited India in September 1979. The mission held rH.e-i,z-_innc with officials of the Central as well as Andhra Pradesh Govern- ments and agencies involved in the implementation of the projects. A field trip to the project site and participating farmers was undertaken. The information obtained during that mission was used to test the validity of the conluson of DCF an peL- A ic tio oprto I 1..unt.xuomL. -- n t n nu getci ec U ia u oLL U LLLigd;LLUll UpelL 1L0U1 anG land consolidation aspects. A draft copy of the report was sent to the Government on February 9, !91 hoevr no commentsL hiave be. Lt:'_t-_Vt-U. 1_uL aUuL 1. UuLit L Li r1n cUvers adequdLly Lie projeCL sSaient features, its accomplishments and shortcomings, and the PPAM generally agrees w4+Cf-I, h cocusonsL mi_ v'luavle assistance proviueu y he Governments and tneir staff met during the preparation of this report is gratefully acknowledged. 1/ The project was recently renamed Sri Rama Nagar Project by the Government of Anahra Pradesh.  - ii - PROJECT PERFORMANCE AUDIT REPORT BASIC DATA SHEET INDIA: POCHAMPAD IRRIGATION PROJECT (CREDIT 268-IN) AEI PRUJECT DATA Appraisal Actual or Item Expectation Current Estimate Total Project Cost (US$ million) 127 211 Overrun (%) - 67% Credit Amount (US$ million) 39 40.6./ Disbursed ) -40.6 Cancelled ) October 31, 1980 Repaid to - Outstanding to )- 40.6 Date Phyical Comnonnt Comn1Ptd 12/77 12/70 Proportion Completed by Appraisal Target nate (T- - 80 Proportion of Time Overrun (%) 30 incremental Economic Rate of Return ()140 14 *)3 CumuS.latv Eti.ma.ted and.. A. ILaL T1, -IJ. - -U- - - (US$ million) 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 Appraisal Estimate 0.4 10.3 18.9 28.6 35.7 39.0 &,CaL L dJ).O -L4.,+ /-.. 26.9 30.8 39.0 Actual as % of Estimate 1,450 139 121 94 86 100 OTHER PROJECT DATA Original Actual or item Plan Revisions Est. Actual Government s Application 1/6 Negotiations 5/71 - 5/71 Board Approval 07/06/71 - O//U6//1 Credit Agreement Date 08/23/71 - 08/23/71 Effectiveness Date 11/15/71 - 11/15/71 Closing Date 03/31/77 03/31/77 09/01/71/b Borrower Government of India Executing Agency Government of Andhra Pradesh Fiscal Year of Borrower April 1 - March 31 Follow-on Project Name Andhra Pradesh Irrigation Loan/Credit Number Ln 1251-IN Amount (US$ million) 145 Loan/Credit Agreement Date 06/10/76 - iii - MTTAM DATA Mon th! No. of No-. of Man- te- of Item Year Persons Days days Report Identification Jan/Feb 1969 2 45 90 03/69 Preparation Apray 1969 u7-7 Preappraisal -- - none Appraisal Nov 190, Feb, - - 140 067 & Sept 1970, Feb 1971 Supervisron I 02/72 2 7 14 04/28/72 Supervision II 09/72 2 li 22 02/124/7 Supervision III 08/73 2 2 & 8 10 10/02/73 Supervision IV 03/74 2 6 12 04/24/74 Supervision V 10/74 2 5 10 12/15/74 Supervision VI 05/75 1 9 9 09/15/75 Supervision VII 11/75 1 10 10 12/10/75 Supervision VIII 06/76 1 4 4 09/04/76 Supervision IX 12/76 1 12 12 12/23/76 Completion I 09/78 3 6 18 Completion II 4 6 24 08/80 COUNTRY EXCHANGE RATES Name of Currency (Abbreviation) Rupees (Rs) Year: Appraisal Year Average (1971) Exchange Rate: US$1 = Rs 7.444 Intervening Years Average US$1 = Rs 8.261 Completion Year Average (1979) US$1 = Rs 8.0 /a Including Exchange Adjustment of US$1.6 million. /b Date of last disbursement. - iv - PROJECT PERFORMANCE AUDIT REPORT INDIA: POCHAMPAD IRRIGATION PROJECT (CREDIT 268-IN) HIGLTIHTS The credit financed part of the proposed irrigation development on one of india_S major rivers , the Godavari.* The river traverses the Deccan Plateau, where soils are fertile and temperatures suitable for year-round '-i ' F---6 -~ LI WU ' 6 WJ L -U ~LU LIU U L croL Jps , but L constraiLnLdLI uy low and highly seasonal precipitation. The project financed the first-stage cop.L.A iL U a uam, CxteionU1 an1 li1i1n UL primary WaLL cULIveyaLce system, most of the secondary and tertiary distributaries, and quarternaries serving 40 ha ulus. vuring pLUject i1.mplementat.Un, it was deciueU to provide water at the 5 ha level, principally to enable, through better water control, the growing of crops oUter han rice. Supporting services, notaDly agricultural extension, farmer and staff training facilities and an adaptive research center were also included. An important feature of the project was to persuade farmers to prepare their land properly for irrigation: they could borrow from the State Land Development Banks to finance land levelling. The planned tacilities were all completed and the project-s rate of return remains as at appraisal: 14%. Cost overruns including higher costs of inputs and delays in project execution were balanced by higher cropping intensities and prices of crops grown (PPAM paras 14 and 16). The lessons learned since 1978 have been increasingly incorporated in subsequent projects, financed by IDA, IFAD and, more importantly, in the growing number of projects financed by the Government of India and the State Governments (PPAM para 11). The following points are of special interest: - introduction of an equitable rotational irrigation system (warabandhi) (PPAM paras 21-23; PCR paras 3.18-3.19); - lack of proper and fair water allocation led to farmers- reluctance to invest in land development and/or field distri- bution systems (PPAM paras 17-19; PCR para 3.10); - land fragmentation is reducing irrigation efficiency at present and will reduce it even more in the future (PPAM paras 24-28); and - establishment of a Command Area Development Department per- mitted effective control of irrigation development (PPAM Daras 20-21; PCR paras 2.07, 3.13 and 3.14).  PROJECT PERFORMANCE AUDIT MEMORANDUM INDIA: POCHAMPAD IRRIGATION PROJECT (CREDYT 268-IN) SUMMARYV 1. Discussions took place in 1969 between the Association and the Government of India (GOI) on increased assistance by IDA for agriculture. GOI identified irrigation as a priority sector for development and proposed a number of projects for consideration, including the Kadana Irrigation Project which was approved in January 1970 (Credit 176-IN--US$35 millio .) and the Pochampad Project approved in July 1971. 2. The Kadana and Pochampad Irrigation Projects were aimed at (a) comnletin2 partially constructed irrigation facilities where past investments remained underutilized, and thereby (b) expanding and stabilizing agricultural production. 1_ The nroiect was to complete the first phase of an irrigation scheme which had been under construction since 1964. The project was described as the conmnrPhPnive develonment (for irrigation) of an area of approximately 100,000 ha which required the completion of a diversion and storage dam on the Godavari River, the Avrc,vtion of 36 km of the Godavari South Main Canal, the lining of the first 113 km of this canal, the construction of a water distri- bution system to some 40 ha nolidels covering annroximately 83-000 ha (17,000 ha had been so developed prior to IDA involvement), the construction of field dAinage -A the- improvment ton nne t"hga rirt of a farm rnndq network. An important and innovative feature of the project was the systematic on-farm development, (CAD) in the course of project implementation) was first devel- investments. Engineers and development administrators correctly identified the main.LL reaOnL for L F-ut14-+-4^- wmt-a-r inciiffinia~nrv nt- the farmgate, i.e., water was not reaching the farmers' fields at the required tim ad n herihtqunttis.The reomne souto developed in the early 1970s and initiated in the project area in 1974 was the establishment of a Command Area Development Authority to be responsible for the planning, design and construction of the minor delivery system below the official project outlets. 11 adUdo tL.LU L Lte cuntutUon o. water c.ur,- called field channels) from the outlets (each serving 40 ha until 1977 when a 1/ Adapted from the PCR. - 2 - decision was taken to extend government channels to 5 ha blocks) to the farmgates, CAD was also to construct field drains and land development works on the farmers fields. All CAD works were to be financed entirely by agri- cultural credit to be taken up by the farmers under programs organized by the CAD authorities, the banking system, and the Agricultural Refinance and Development Corporation (ARDC). A further pre-requisite for a reliable water supply, however, was often overlooked: the need for a secure and timely water supply at the project outlets. In many existing projects (then and now) very large areas commanded by canal networks did not receive water in a reliable way owing to unrealistic design assumptions, faulty construction practices and deficiencies in the operation of the systems. 5. The estimated project cost at appraisal was some US$91 million with an IDA contribution of US$39 million. 6. The civil works components of the project, including the comple- tion of the dam, the excavation and lining of the Godavari Main Canal, the construction of the secondary and tertiary conveyance systems and the village road component, were essentially completed in 1979, some three years behind the appraisal estimates. The main delays were caused by the lining operation of the main canal which was carried out, for the first time in India, by paving machines. The procurement of the pavers and initial difficulties with the operation took more than two years. Subsequently, a shortage of cement and other building materials caused further delays.l/ 7. The delay in construction of the irrieation works also retarded the development of the command area, and until 1979 constrained irrigation during the dry and hot weather seasons. The linine of the main canal was carried out each year from January to July when the canal was closed for an average five-month period. In the kharif seasons, however. supolies were plentiful since up to now only a part of the command area has been developed so that it can use the water. Under these 1rc-nmqtancesq irrigntion in the wet seaon, July-November, (mostly for paddy) quickly expanded and covered most of the area commnnded hv the diRtrihitinn qvqtom (in 1979/80 the area irricated in the wet season was already some 67,000 ha). Irrigation in the dry season, however 1nagd initiallv hean of the long clonrure norind nf the ennl and then because of the very slow progress of the watercourse construction program below the irrigation outlets (CAD progr--). To date- only some 6,000 ha are irrigated in the rabi season. Paddy can be irrigated by field to field irrign-atio (fromir the, 40l ha outl oteN wreras upl arAnd n 4-, t-), Ar., -uA V,-+ seasons (in areas designated for upland crops) require construction of a 1/ CPS raises the question if it were not worthwhile for appraisal missions LU dLPd1be LUJC%.LWU mateiad LCquLIecLD AH LLIr qleilk UL -ALe1ceU shortages of cement and other construction material. - 3 - complete minor distribution system from the irrigation outlets to the farm- gates and in large part.s of the command, also require considerable land lovelline. R. The nrnipnt and ita aiirpPanr- the Andhra Pradpnh Trrivatinn and CAD Composite Project (Ln. 1251-IN) which provided finance for a revised CAD com-onentin the Pochampad ara has servedas larIg-Scale tat nf thp CAD concept in India (see Annex 2). As a result of this experience, several assumptio tn - 4-1nl4 n4*t 4- 0-- 1 m4 "1onrohhooho f^,,"A ranfntl no Tho first concerns funding arrangements for canal works below the government outA s. T nLltiLa.lly It. was envisg AO5~. that. ,ceA4+- L F AS.*l A4~L.,4 tftA..L1 -4A.L~ Ik- farmers would be used for the financing of the command works. Under existing from the construction of these watercourses, is required. Such consent is dLificult LU obtainU as Lthe ±iniU dual farmers' motivationL LU bui.Ld Ltle ntwork usually decreases commensurately with the distance of his farm from the government outiets. Farmers near tne governmeu ouliet usually are aDe Lo pre-empt a large portion of the available flow. Thus, they tend to oppose the construction of a distribution system that will spread the available water over larger areas and that might reduce the water available for their land. Two alternatives to resolving this problem exist: ki) enactment of CAD legislation which would make farmers' cooperation and their financial contri- bution compulsory (see Annex 2), or (ii) construction or the watercourses during the initial project construction period from budgetary funds. Solution (i) proved impractical given the lack of political consensus and reluctance to accept the administrative problems that would be involved subsequently in enforcing the legislation. Solution (ii) was adopted and essentially moved the project outlets from the present 40 ha border point to the so-called survey number, which in the Pochampad area represents the border of some 5-8 ha. While this solution has negative direct budget consequences, it is beneficial economically and the secondary impact of a successful project is such that its overall budget impact is favorable. Taking into account evidence from Pochampad and from other non-IDA supported CAD operations, the GOI Planning Commission recently decided to advise all states to finance out of budgetary funds the construction of watercourses down to 5-8 ha blocks. In combination with improved arrangements for water sharing, this approach holds considerable promise for irrigation development in India. 9. The second component of the CAD operation was land development (on the farmers' holding) which also was to be financed from credit funds raised by the farmers. A lesson from the Pochampad operation has been that such voluntary land development can only be induced after the farmers have been convinced that a reliable water supply will be made available to irrigate their crops. This is especially true for rabi and hot weather crops where an unreliable water supply can lead to complete loss of production. 10. Beyond these problems, the project was beset by management dif- ficulties common to most Indian irrigation projects of the early 1970s. The Project Administrator appointed to the Pochampad Project was eminently qualified. However, as described in the April 1974 Supervision Report, the Project Administrator "has neither budgetary nor administrative control over the departments responsible for project implementation". The organization for project implementation was subsequently changed and it eliminated somewhat the division of responsibilities between Government agencies. 11. Although the implementation of the CAD component in Pochampad and subsequently in the Andhra Pradesh Composite Project falls considerably short of appraisal expectation, the lessons learned from trying to solve the water insufficiency at farmgate have been far reaching. Since 1978 lessons learned have been increasingly incorporated in new projects financed by IDA and IFAD as well as in a growing number of projects financed solely by GOI and the States. 12. Frequency and extent of IDA supervision was adequate and was partic- illarly helnful in resolving construction planning and procurement problems. Since 1978, IDA has also provided technical assistance in water management for an area of annreximnply 6-000 ha by constructine field channels from the project turnouts to individual farm holdings and by rostering water supply on a roatonal shi in the Son-alled Rotational Water Supply (RWS) pilot program. 13. Disbursements in the initial years ran considerably ahead of ap- praisal estimates and at the end of FY1975 still stood at 120% of the apprais- al estimate. However, because of shortages in construction materials, late arriv-al of lnin mchine, t-art-un nrnh1mn with the concrete and lining equipment and other problems, it was necessary to extend the project comple- tlon date by two yienars. T4airaamantz wprp rnmnleted by 1977. The cost overrun (financed by the GOI/GOAP) is now estimated to be about 67% of the apJpraisalestimua.te. 14 A The pro4ects economic rate of return has been rprn1cillntpil on the basis of revised costs and prices, new estimates of the phasing of benefits and achievement of full production (the ealy Q9Osz rnI- rni-har thqn 1()7A aq estimated at appraisal), the indexing of past costs to present value, the rates. A rate of return of some 14.3% is indicated although some of the Denelits may be attiuntable to other actUvItes notsuporte U b tI s-- ect. This is essentially the same as the 14.0% calculated in the Appraisal Report. Increased costs, including the costs of ius, delayed realiao of benefits, changes in the cropping pattern!/ and projected lower crop yields have been offset by higher than initially projected commodity prices. 1/ Inadequate drainage in some parts of the project area has forced a change in the design of cropping patterns, i.e., land which was classified originally as suitable for the growing of upland crops has turned into land suitable only for paddy and sugarcane cultivation. - 5 - II. MAIN OBSERVATIONS A. General 15. The project under review constitutes only part of a much larger unMertaking which when completeu w-ill irgate about '4UV ,VUU na aUng L right bank of the Godavari River. Construction of irrigation works started in 1965 and by 1971 when Credit 268-IN was approved a Lotal of US$35 million equivalent had been invested. Out of the anticipated 400,000 ha irrigation development, the IDA credit was expected to permit construction or irrigation works that would provide water to about 100,000 ha or one quarter of the total command area. 16. To enhance the projects impact, the Andhra Pradesh Composite Project (Ln 1251-IN) was approved in 1976. The loan assists the increased extension efforts required to improve on-farm development once adequate water supplies are made available. Loans made available through the Indian banking system as well as the advent of high yielding varieties also contributed to higher production on the farms of the project-s beneficiaries. Allocation of project benefits to a single activity is therefore impossible and the calcu- lated economic rate of return should be looked at with some caution. How- ever, it can be said with certainty that the combined efforts - which still continue - have a positive impact on increasing agricultural production, on the economy and on assisting small farmers.!/ In this context it should be pointed out that the ERR including sunk costs is only slightly over 9% (see PCR para 4.16). A major factor in assuring the project's favorable economic rate of return has been the substantial price increases for agricultural commodities (PCR, para. 4.08) which exceeded appraisal estimates from 71% for rice to 160% for groundnuts. The following discussion tries to comment on two major problems irrigation development encounters in areas where small, frag- mented farms predominate. B. Operational Problems 17. The project as appraised was expected to provide continuous flow of water throughout the crop season. Consequently, little flexibility in the supply of water and its control existed. With farmers accustomed to wet irri- gation, i.e., submerging their land for extended periods of time, only those 1/ Yield projections on which the economic rate of return calculations are based (PCR Tables 1 and 2) make little or no allowance for benefits accruing from levelled fields. The audit is satisfied that on farms where fields are levelled as advocated by CAD, - i.e. with a minimum disturbance of the shallow top soil, - and surface drainage is provided, yields of the irrigated crops are at least 25-30% higher than assumed for 1985. - 6- close to Le top enu , near te irrigation c.hannel. out.Ies, received -bn- dant water, while the tail enders, the farmers more distant to the outlets, received insufficient quantities or nu water at all. fu difiulis arise frequently due to high conveyance losses in unlined canals, leading to some outlets at the lower ena 1 Lote canal system alou receiving iaeuae water supplies. 18. The Bank at appraisal showed concern about possibilities of exces- sive water use on wet lands, especially on the highly permeable red soils which constitute the predominant soil type on about two-thirds of the project area. The appraisal report (para. 4.06) stated that "criteria for selection of wet and irrigated dry lands have been modified and are now acceptable to the Association". However, after completion of irrigation works, farmers were left to fend for themselves to obtain adequate water since no government agency was responsible for allocation and supply at "chak" level (about 40 ha). And even at the time of the audit mission, there was no official -stipu- lation making irrigation engineers responsible for delivering designed dis- charges to every outlet. 19 --h uneiale and unaven water supplies led to considerable farmer reluctance either to provide their own labor for constructing chak water A4stribution systems or ton ih-nin lnnc for 1and develonment. While the appraisal had recognized the constraints facing wider use of irrigation .Laci-.A.L.CO, espcl.ly-. the. fact t- -- -- ---t preiou Indanirigtio noict delayed construction of permanent outlets from minor canals to field channels as well as 44ei.3 cl,aLLI p-4- worksc weore limt-al I-A -hoqp serving blocks of 40 ha. 20. It was equally recognized that on-farm development would require actions and support by a large number of different agencies. To coordinate the work of these agencies a High Power Committee, a State Level Committee, District Level Committee and a Rehabilitation Committee had been established and the appointment of a Project Coordinator was made a condition of credit effectiveness. However, during the first year of project implementation, it was found that "coordination" alone was insufficient to cope with the various development problems and in 1974 a Command Area Development (CAD) Department was established. The CAD approach, which has now found wide acceptance also in other Indian states, envisages the establishment of a multi-level, multi- disciplinary, multi-functional department that effectively controls operation and development of irrigation projects. 21. In particular, CAD took on responsibilities for (i) operation and maintenance as well as modernization of irrigation systems: (ii) planning and construction of field channels and drains; (iii) land development; (iv) Amonsvration a implementation of imrnov,d water management. (v) enforcement - 7 - of the "warabandhi" irrization systeml/. It is to the credit of the Bank that the limited powers of the project coordinating committees and staff in regard to reauired land development were recognized and that the Bank actually supported the CAD approach at an early stage. 22. Farmers of the pilot areas where CAD introduced the warabandhi SYStem show arpe interet in develoning their lands and willingness to incur debts for this purpose. An important step in establishing farmer groups which at n lqter ctcp nntiled heronme instriiment-1 in other rural or communal activi- ties can also be attributed to the introduction of the warabandhi system. 23. Some Bank staff and the PCR (para. 3.19), however, have reservations nut U U.LI~ V .L.. U 7 'JJ -1 - - --e-.Lflt times of limited water availability. It should be noted that the problem of reduced water availability -is not unique to this -4t2 The conclusions of the Chao Phya audit that it would be necessary to plan at an early stage LUL sUC[l h. 1 a VeL1LU a11Ly a 1 U S a y LU LL 1 1 L UjL L* UnLt FuOlUi..Y . - included in an emergency plan would be to exclude from the irrigated area solIs with extremely high permeability. The audit mission found some soils presently irrigated to be almost pure sand. Irrigation of these soils, which give very low yields even with high ftertilzer applcation rates, shoud be reconsidered. Also, more lining of canals where percolation losses are now estimated at 45% as compared to appraisal estimates of 25% coul prove to be a solution to getting more water to the fields. In addition, emergency plans which would provide for water allocation to either the more productive "wet" soils only or for water rotation among the irrigation districts should be considered. C. Land Fragmentation 24. Irrigation development in India, especially the most economic use of limiting factors available, i.e., land and water, is significantly constrained 1/ The warabandhi system is designed to provide secured and timely irriga- tion to all farmers. Each farmer obtains an equal share of the available water volume per acre based on an allocated time to his field. Losses occurring in the field channels are shared equally among farmers, crop- ping patterns are disregarded. The organization required to operate the system is met by the farmers through groups and central committees. The warabandhi schedule is fixed for groups, but changeable within the groups. The water allocated to a farmer is regarded as his personal property which he can use to the best of his interest. (From "Project Report and Guidelines for Introduction of Warabandhi System in Sri Rama Nagar Project Andhra Pradesh"; Command Area Development Department Andhra Pradesh, January 1979). 2/ See audit on Thailand Chao Phya, OED Report No. 2850, dated February 14, 1980. -8- by the prevailing farm structure. The audit mission interviewed participating farmers, who on average farm about 1 to 1.5 ha, fragmented into 20-30 small plots. Each of these plots - when irrigated - requires in their view bunds to permit adequate field flooding and channels to and from the land to facilitate conveyance of irrigation/drainage water. 25. The credit under review had provided funds for land levelling, because it was correctly assumed that adequate water control would be only feasible on fairly level land. Land development, which includes land level- ling, did not perform as well as anticipated at appraisal. Farmers were reluctant to obtain loans (PCR para. 3.11), land levelling with heavy machin- ery for individual chaks (40 ha) proved not feasible and even when lighter machinery, geared to smaller plots was introduced, land development did not gain momentum. 26. Small, fragmented holdings create other problems, too. Bunding of individual plots - sometimes a farmer subdivides his field into several smaller plots through additional bunds - leads to substantial losses of good irrigable land. A chak of 40 ha, if subdividied into 40 square blocks of 1 ha each (optimum size), will require about 2.4 ha or 6% of the area for bunds. Should the average plot size be reduced to 0.1 ha, about 7.8 ha (19.5%) are required for the bunds. Proper water control on small, inadequately levelled plots is difficult to introduce. 27. The Bank has been aware of the problems and has tried to introduce land consolidation proRrams in other proiects/. Efforts in this direction, however, have been unsuccessful. When discussing land consolidation prospects with farmers. the audit mission was confronted with widespread opposition to such an undertaking. Farmers' main concern was that the heterogeneity of their soils would not permit consolidation of small plots into larger fields on a fair basis. Some of them may end up with a field of good soils, others with had qoilIs . Enualization in the form of reducing the acreage of farmers receiving fields with better soils than they had before and expanding acreage of thncp fqrmprq who receive lands with noorer soils does not seem feasible due to the prevailing "minifundias" of 1 to 1.5 ha. 28. The problem of fragmented small holdings is severe at present but will deteri o n a i he futre- Tradition has it that farmers subdivide their holdings among their sons. One farmer interviewed will eventually subdivide hi1s 1.1 ha holding, consisting of 30 plots equally between his three sons - g0 plots with a total acreage of 1.1 ha will result. The audit at this stage is unable to suggest any constructive measures to overcome thnis prnh1om2/ - Anv solution may depend on the introduction of new legislation which needs to inLeLfere wiLh Lhe Liaullinal ineritance customs. 1/ Kadana Irrigation Credit 176-IN OED Report No. 3470 of May 21, 1981. 2/ The audit has insufficient information available to reach judgment on the feasibility of DOCK farming in India. UnueLr te system, AiviUuaL fields could be retained on bunded blocks. -9- INDIA CREDIT 268-IN POCHAMPAD IRRIGATION PROJECT PROJECT COMPLETION REPORT September 26, 1980 - 10 - I. SECTOR SETTING 1.01 During 1968, India presented a number of irrigation projects to IDA for consideration. These projects, located in central and southern India were reviewed in January and February 1969 by a Bank team; and the Kadana and Pochampad projects were selected as the first to be appraised for IDA financing. An IDA credit was made for the Pochampad Project in 1971. 1.02 The Pochampad Project is situate in the State or Andnra Pradesh. Andhra Pradesh, with an area of 275,000 km and a population of 43.4 million (1973) cen is the fifth largest and fourth most populous stat n ndA. About 70% of -the people are dependent upon agriculture for their livelihood pulses and groundnuts as the major crops. About one-third of the area of the State, containing about one-fourth of the Dopulation. is classified as "drought-affected". One-fourth of the net cultivated area is under irriga- tion (2.7 M ha); the rest depends on rainfall, which ranges from about 500 mm in the southwest to 1,100 mm in the northeast. The main sources of irrigation are two major rivers, the Godavari and the Krishna, and their tributaries. Numerous irrigation canals branch from these rivers. The upland areas use rainfed tanks and groundwater for irrigation. 1.03 The State of Andhra Pradesh has invested large sums in irrigation projects but returns have been low, mainly because scarce resources have been spread over too many projects, resulting in long construction and gestation periods and deLayed benefits. Also, the emphasis has been on mjuL =uLneer- ing works at the expense of agricultural development and, in some cases., in been distributed over too large an area. II. FORMULATION Preparation, Appraisal and Agreement 2.01 Construction of the dam and other major works comprising the Pochampad Irrigation Scheme and designed to serve about 400,000 ha along the right bank of the Godavari River were started in 1965. A shortage of funds restricted progress and ultimately led GOI to seek assistance from IDA. LbULUWLUg HU LUM Lb.ULL1I:bdL. WLZb LULL AL 1 .Ly 1 7U7 ILI= UULJL Works Department (PWD) and the Agriculture Department of GOAP completed a feasiily study for a prjc in'olvng the irri-atio 0- 100,000 ha with assistance from the FAO/IBRD Cooperative Program. 2.03 The Pochampad Project was first appraised in November 1969. The annraisal mission found that substantially more funds than had been allocated under the Fourth Plan (1969-74) would be required for the timely construction of the project. As a result, GOI and GOAP reconsidered the allocations - 11 - required and, in November 1970, confirmed that the amount would be increased. This confirmation cleared the way for completion of the appraisal, and an -16 -0 a L& VLaLLCU L LLU L 9 i. Lr UL Ual Y 1J/±. 2).04Z Negotiation for the credit were held in Washington, D.C.fo a 10 to 14, 1971. The delegation representing India and the State of Andhra Pradesh, and the deleorinn renvagpntina TnA -ngotiated draft Development Credit and Project Agreements dated May 14, 1971 and a Memorandum of Negotia- tions dated June 1971. Project Description 2.05 The project is described in paras 4.01 through 4.12 of the Appraisal Report dated June 16, 1971. Specific components were: (a) Continuation of the construction of the Pochampad Dam to the spillway overflow elevation of 318.5 m creating live storage of 9.5 TMC, and resettlement of the farmers whose lands were submerged by the reservoir; (b) Extension of the south main canal on the right bank of the Godavari Rver from 77 m to about 113 Km and Lining of the entire 113 km; (c) Completion of the distribution works to serve 83,000 ha in addition to the 17,000 ha comoleted prior t, TTA financing* (d) Improvement of natural drainage ways and construction of field drainage where necessary; (e) Construction of about 460 km of village roads; (f) Strengthening the agricultural support programs by expanding the extension program and by the addition of an experimental station, a demonstracion rarm and a training center; and movement of the groundwater table; (ii) the need for additional marketing, storage and processing facilities in the area; (iii) the recovery of project costs; and (iv) the feasibility of further development to utilize the full potential of the reservoir. Project Objectives 2.06 The principal benefit of the project was to be the intensification of agriculture in an area dependent on uncertain rainfall. This was expected - 12 - to have two effects upon existing cropping patterns. First, although the kharif (rainy season) cropping intensity would remain much the same, irriga- tion would permit about half the acreage to be put under rice instead of pulses and maize. Second, rabi (dry season) cropping intensity would more than double. Overall intensity was expected to increase from 110% to 155% and the availability of assured irrigation water was to enable high-yielding varieties of rice and maize to be introduced and justify the increased use of fertilizer. As a result, yields of rice and maize were expected to increase threefold or more, and the yield from groundnuts to double. The project was designed to provide irrigation to the maximum number of farmers rather then to optimize its use in either an economic or water management sense. Cost Estimate and Financing Arrangements 2.07 At the time of appraisal it was estimated that the total cost of facilities to serve the initial 100.000 ha would amount to USS126 M of which US$35 M had already been spent for rights-of-way, raising the dam to riverbed level and constructing the first 37 km of the south main canal. Of the balance, US$91 M, it was estimated that US$17 M would be spent on on-farm development and would be financed by established credit agencies and refinanced from the IDA-assisted Andhra Pradesh Agricultural Credit Project. 1/ In practice, lack of demand led to these funds not being drawn for this purpose and, ultimately, the credit was fully disbursed for other purposes. By 1974 when a Command Area Development Department had been created (see para 3.12), demand for credit for on-farm development was again anticipated and funds for this purpose, as well as for an improved extension service for the project CAD Composite Project. This left a balance of US$74 M including US$9 M for originally was allocated for civil works and US$4.8 M for equipment, material and snare partq. Special Features 2.08 Soils. There are two basic types of soils in the project area which are commonly referred to as red soils and black soils. The black soils are found in low-lying positions, are low in permeability and because of this, are ideally suited to the production of paddy. The red soils are found in upland positions. They are highly permeable, light-textured and are lower in fertil- ity than the black soils. However, experience has demonstrated that when these soils are properly managed and fertilized, they produce satisfactory t Tne Andnra Pracesn Cooperative Central I,denu nouLgage Ddn1 kLn0), ana commercial banks, provide credit for agricultural investments including W L- . -. *LL A._- CL, land VS*kt levelin and far ImechSLaizathion. In.L January 1971, the Association made a credit of US$24.5 M (Cr. No. 226-IN) to help financed were to be in the Pochampad project area: in particular, credit to farmers for land levelline and bundinz. - 13 - crops. When the project was conceived, it was assumed that the black soils making up rouqhlv 35% of the proiect arpa would hP used fnr the nroduction of crops with heavy irrigation requirements, such as paddy, and that the lighter red soils would be earmarked for upland crops, such as maize. 2.09 Crops. The principal crops grown prior to the introduction of surface irrigation in the Pochampad command area were paddy, maize and jowar as the main food crops and tumeric, sesamum, groundnut, castor, pulses and chillies as cash crops. With the availability of canal irrigation water, it was planned initially to grow only one irrigated crop each year--paddy as a kharif crop in the areas localized l/ as wet, ideally the predominantly black soils; and irrigated upland crops in the rabi season for areas localized as irrigated ary, laeally the predominantly light red soils. Ine concept or having only one irrigated crop a year was influenced by the long duration youuy VaLIC LCMen o III ALnIL. WILLI gUwIug seasons u ou-i u ays duration, it was impossible to follow paddy with another crop in the rabi the opportunities for double cropping are considerably enhanced. Thus, the sub-committee constituted to study cropning natterns in the Pochampad command area recommended in its December 1977 final report that the irrigation inten- sity be increased as nearly as possible to the 200% level. To reach this level, the committee recognized that groundwater would have to be used more effectively and that more lining and other water conservation measures and better water management practices would be needed. 2.10' In the Pochampad service area, the earlier developed (upstream) reaches were largely localized for wet cultivation, apparently to permit sugarcane cultivation and without too much concern for soil type. Thus the 13,630*ha localized in Distributary D/5 through D/39, 8,800 ha or 65% is localized wet Fpr Distributary D/40 through D/64, the localization is i7 irrigated dry and only 23% wet. Wet rice is the crop most profitable to IdWL d L A~~~~LL L.LU L u LI I U 1- .A~ Ik . 6- Despite localization, farmers have maximized wet rice cultivation. This has been eoraged byo t. he factr that up to nowha oter has beepn ava1 ial only in the kharif season, 2/ as a result of the main canal lining operation. In the kharif season. supplies have been virtually ulimited and farmers have come to believe that irrigation water is quite unrestricted, that it can be used wastefully, and that wet cultivation is, in fact, permitted over the entire command area. It is unfortunate that farmers have developed these attitudes as it'will be very difficult to change the pattern of utilization. the different areas of the project were localized for specific agricul- tural use. PArmr.q ar sunonsed to raise croos only in accordance with the localization. 2/ In the entire command area, rabi water supplies first became available in 1978. - 14 - 2.11 Irrigation System Tanks and Wells. As with all earlier canal systems in India, the project was designed tor continuous flow delivery throughout the cropping season. Structures to control and regulate the irrigation supply-are minimal and thus, there is little opportunity to maintain flexibility in the supply of water or to control it to meet the requirements of efficient water management. Prior to cosruto of - the sufcewte-rrgt-nprjc- significant portion of the project area had been partially irrigated from about 2,000 tank,s (small reservoirs) and avr lag urh n _ n, . These indigenous facilities receive both direct supply from the new project and- more imnnrtantlv. large rpturn flow from the surface water sytem- A very large area outside the command has also benefitted indirectly from the project as return flows from irrigated Project areas drain into tanks outside the command and are reused for irrigation. This is of special importance during the rabi and hot weather seasons. However, these return flows have also had some negative effects in that they have contributed to local drainage difficulties in some areas. 2.12 Drainage. Groundwater studies undertaken in 1972 showed that the land farmed by 33 villages, totalling about 19,000 ha, is already water-logged. These villages are all within the potential command area of the Pochampad scheme and some are within the service area of the IDA-assisted project. Their drainage is in part obstructed by the large number of small tanks (para 2 1)lMi*ting the flow of water in the natural dranwys 2.l3 ~ ~ ~ The Public Worsv eprten (PLM)repnil fo the design, construction, operation and maintenance of the main canal and irrigation distribution system including the field channels. It is also responsible for construction of the roads. The preliminary design and site investigations were made by PWD but in 1964 GOI's Central Water and Power Commission (now CWC) was made responsible for the final detailed designs. It was decided during negotiations to have CWC review construction work of the dam including design changes and quality control and to certify that the major components of the dam, when completed, had been carried out in accord- ance with their designs and specifications. 2.14 The usual organizational arrangement established by GOAP for irri- gation projects consists of four levels of committees, namely: (a) a State Level Committee, chaired by the Minister for irrigation, to review progress on the countruction of works (dam and canals) and plans for the development to measures to ensure the creation of irrigation poten- (b) a State Level Committee, with the CAD Commissioner as Chairman, responsible for the assignment of specific tasks to the various departments concerned in project activities and the coordination and execution of tasks assigned to such departments; - 15 - (c) District Level Committees, with the District Collectors as chairmen which review the various aspects of the develop- ment and take necessary steps to solve the problems that might be identified during such review; and (d) a Rehabilitation Committee whose main function is to review and ensure smooth and expeditious implementation of the resettlement policy and program for persons displaced from the reservoir areas. 2.15 Because of the extensive nature of the agricultural support programs andi fho rPlAritvPlv rnnidl temnn n-f rvlnr1rc -s-f-o planned for the project, it was decided, during appraisal, to' modify the more usual arrange- ments and to establish a Proiect Working Committee to operate under the chairmanship of a Project Coordinator, who would also be a member of the State Level Committee. It was felt that this would better ensure full liaison between departments working on the project and enable data collection, plan- ning, coordination, budgeting and review of all activities to be accomplished on a project-wide basis rather than district-wise. The Project Coordinator was appointed in consultation with IDA and given suitable rank, powers and responsibilities for the implementation and operation of the project. Unfor- tunately, he never had adequate powers to impose full coordination over the hierarchy of departments, agencies and committees which dealt with the project. III. IMPLEMENTATION 3.01 The only condition of effectiveness of i-he credit (other rhan the routine legal opinions) was that a Project Coordinator be appointed. _1 On November 12, 1971 GOI informed the Association thAt n Pr-io-t-t AAm-inerme had been appointed. On November 15, 1971 the Credit was declared effective. Since the project was an on-going activity there was no interruDtion in the construction activity nor any delay in initiating the IDA assisted portion of the project. 3.02 As shown in the first Supervision Report (April 28, 1972), the major start-up problems were connected with tendering for construction work in accordance with Schedule 3 of the Development Credit Agreement. The mission reprtutcU truc evLbniOLn was apprOximateLy on Schedule and the quality or work was good. The future outlook for construction progress was generally main canal resulted in PWD's assuming there would be some delay in providing irrigation service to land immediafelv aownsrean nf rho cinhnn. The ff;aain participated with GOAP in making arrangements designed to minimize the con- struction delay and establish a reasonable prospect of completion in accor- dance with the schedule. Preliminary information made available to the mission 1/ The Indian delegation at the time of negotiations requested the name be changed to Project Administrator. - 16 - on tenders for canal excavation received on January 17, 1972 suggested that TY)A 1c V1nmr1rmua' anti a1i r a" nvne.o ,r a lv7 a 'haA -roa i =A ;,n t4-~ w; I -n1 f sm contractors to undertake larger commitments than usual under PWD's traditional procedure (See para. 3.33). 3.03 Dam and Reservoir. The project provided for the completion of the dam up to a temporary level 4 m short of its final height of 28 m (elevation 322.5 m). This temporary level was considered sufficient to provide the live storage needed to meet first-phase dry-season irrigation requirements. Con- struction was started in 1964 and at the time of appraisal the dam was esti- mated to be 50% complete. Construction proceeded substantially in accordance with the original schedule. The central masonry and concrete section was undertaken by labor intensive methods with concrete and mortar being mixed by PWD but with placement being done by contractors, who were in effect labor suppliers. Earthwork on the right abutment was undertaken by contract, with PWD accomplishing the compaction. On the left abutment, the earth dam con- struction was UUu uepartmentally uSu ing uLLL1LUVLL16 CqUIpmeInL. rLueub U1 the credit were used to purchase spare parts for the machines. The dam was esentially omplated h 1979 3.04 Main Canal Lining. The Development Credit Agreement provided that lining of the main canal be divided into not more than four contracts in anticipation that large Indian contractors would be enticed to bid with resulting lower prices. However, the two bids received for the first two tender sections were rejected as excessive. On retendering, four bids were received, also, considerably higher than the PWD engineer's estimates. Tenders for lining to 68.50 km were opened a third time on August 16, 1973 with five firms bidding at that time. Andhra Pradesh State Construction Corporation in a joint venture with the Hindusthan Steel Construction Corpora- tion was the lowest bidder at Rs 76,080,000, some 26% over the Government's engineering estimate, and received the contract award. 3.05 The lining program incurred one delay after another. Equipment and machiner*Cy purch.Lased from&L r__'t5L __ jqJ.a ___ - tractor had considerable difficulty getting the operation working properly. Part of the eao was unfmiliarit with, And hrPakAnwn nf equlipment whirh could have been alleviated by better pre-planning and organization by the contractor. Ultimately, machine lining was found feasible on the side sections and in earth material which could be readily trimmed to grade. Pre-cast con- crete slab lining was substituted in rocky reaches of the canal and the bed was done in-situ by labor intensive methods or by machine. The lining program was essentially completed by June 1980. 3.06 Branch Canals and Distributaries. The construction of the branch canals (those over 500 cfs capacity) and distributaries (those having less than 500 cfs capacity) for the IDA-assisted project was completed in July 1978--two years behind the original schedule. - 17 - 3.07 As work on the main canal and distributaries progressed, water became available during the kharif season; the irrigation potential created 1/ is snown in Lne Kouwing taultiOn. MAIN CANAL CONSTRUCTION Hectares Year km~. increment Culative n 1970 36 10.117 10.117 1971 - - 10,117 1972 - - 10.117 1973 68 13,354 23,471 1974 82 23,472 46,943 1975 - 11,736 58,679 1976 4,047 62,726 1977 - - 62,726 1978 113 37,274 100,000/a /a As discussed below, progress on watercourses and field channels naS Deen extremely slow. 3.08 Roads. Out of the total of 460 km of village roads included in the TfDA projec't I 1f0 1--. we,re T6.n m ,, 94 ~ rhc, . nA still under various stages of development and it is expected that they will hp comnleted by the end of March 1983. As the roads are comnleted they are turned over to the Department of Roads and Buildings for maintenance. Roads included in the IDA project were meant to supplement a grid of roads whose construction or rehabilitation was supposedly in progress at the time the IDA project was being appraised. While roads covered by the project have been reasonably well constructed, other roads that are essential to connect IDA roads to market centers and major arteries have still to be fully developed. 3.09 Field Channels. At the time the credit became effective, it was the policy of GOAY to conscruct irrigation systems down to 40 na DCIKS (chaks). It was then left up to the farmers to construct the field channels needed to LLLLat LteiL indiViUd idarLa. Ihey co Ul Lhis diULI UL LL cooperation with other cultivators. The task proved to be often beyond the. carry out the necessary work as a community activity. 3.10 As early as 1972, it was reported by a supervision mission that the on-farm development component was experiencing difficulty and that, if the 1/ The term "Irrigation Potential Created" as used by GOI and States as well as here is not descriptive of irrigation use. In actuality, it means that a distribution system has been constructed down to a govern- ment outlet. In no way, however, can it be construed that the design discharge can be delivered or that irrigation can be or is being accomplished in the chak area below the government outlet. - 18 - established schedule were to be met. corrective action woulid have rn hP taken At the time of appraisal it was assumed that the farmers would finance land development (field channels, levelling and bundine) by utilizine their own resources or, if necessary, by using credit extended from the Land Mortgage Banks. However, it turned out that a significant portion of the farmers were not eligible for such credit because of overdues on prior loans, because their farm units were too small or the land titles were questionable and therefore not usable as collateral. In addition, many farmers were reluctant to apply for loans because of skepticism regarding the ultimate availability of water or because the permissible holdings under the land reform ceilings were signi- ficantly lower for irrigated land than for non-irrigated. 3.11 The ineligibility for credit of many, and the reluctance of some development. It was originally presumed that the work could be carried out on a chami (senrice are-a beo an outlet)t basis and t.hat on ~ araso scsz crawler-type bulldozers could be used for levelling and bunding, and that the farmers within such a chak would coonerate in the congtruction of any addi- tionally needed channels as well as the establishment of an equitable system for the use of water. However, as discussed above, this did not prove to be the case. Consequently, there was a tendency to resort to development on the basis of individual holdings rather than chaks. This made it difficult to use the larger bulldozers for land levelling and the decision was made to change to the use of smaller 45 hp wheel-type tractors. Where they were built, there was little if any effort by the farmers to operate the field channels on an equitable basis and those at the tail end of such channels did not receive their share of the water. blished. In addition to acting as an expediting and coordinating organization, "he CADh Deartment, throug,h the engineerin ne,4 a F ;t.. nan~ in s.r,ii undertook the construction of field channels 1/ on behalf of farmers. The funding waQ to he made availahle tn the farmPrA who would annly for credit and hand over the funds to the CAD Department. But, even with the participation of the new organization, progress was slow. Therefore, in 1977 GOAP concluded that in those cases where it would not cost more than Rs 150 per ha served, the CAD Department would extend the field channels at GOAP expense down to the individual survey number 2/ or 5 ha blocks, whichever was the smaller unit. Subsequently, GOAP eliminated this criterion. Field channels have been con- structed on about 33,000 ha or slightly under one-third of the irrigable area. The whole 100,000 ha is expected to be covered by the end of 1984. 1/ A field channel is a channel constructed at owners' and occupiers' cost to serve the various fields within a block of 40 ha or as may be pre- scrJ.~ L u and intied by suchL owners orOcuies originally surveyed for cadastral purposes Since then further sub- ei;icnn have Iaken n1pe: a survey number at nresent usually encomDass the landholdings of a number of farmers. - 19 - 3.13 By.January 1975 the new Command A:ea Development Department had the necessary staff. The objective of the multi-diciplinary organization was to plan and carry out all necessary works to develop land on a systematic basis by coordinating action in different disciplines such as irrigation, soil conservation, agricultural extension, cooperation and by providing necessary credit to farmers, all to achieve optimum utilization of the potential created by the Pochampad Project. The Administrator (the previous Project Coordinator), as hea of the Department, was given power to Cut across departmental and local administrative lines. The staff was seconded to the Department from osither sa oranization whic cotiue Vo proide tech ical guianc to theCL st sLI aff through the Administrator, but the Administrator was made responsible for riirprtina rho nrarr Nowa ntr,usted w.ith rh~ 1-ask- o-f put-n t-r%grhar A consolidated budget, i.e., to assist the participating agencies in presenting and defending the budget requested for command a!e development. 3.14 With the appointment of the CAD staff, on-farm development began to improve. In order to expedite the program further, GOAP-through GO- requested the Bank Group's assistance in the preparation of a composite CAD project that would involve four areas in the State, including 33,600 ha in the Pochampad Project. This proposal was prepared and a US$149 M loan was approved in June 1976 for the Andhra Pradesh Irrigation and Command Area Development Composite Project (Ln. 1251-IN). One of the major objectives of this loan was to strengthen agricultural supporting services, in particular, the extension service. 3.15 During the four years from 1971/72 through 1974/75, CAD works (constuctio of fiel ch-annels) were copetdoly. on 3,0 nr% a I_ .. n the following five years, progress improved considerably on an additional 97 000 ha and by the end of October 1978 it was renortedly rnmnlprpd on T,000 ha. This would leave a balance of 67,000 ha to be completed on the project. On the basis of the revised organization and budget procedures. the comple- tion mission estimates that land development in the Pochampad area will be completed in 1984--nine years behind the original schedule. The CAD Admin- istrator is more optimistic, but on the basis of past performance there appears as yet little basis for projecting an earlier completion date. 1/ 3.16 Most land development is being done using labor intensive methods. For example, during the period from 1974 to October 1978, only 20% of the land development was performed by the Agro-Industries Corporation (hired by farmers 1L Th CADC colL LimponentL was absorb-eA L i nto tLUL Lfh t A I a Pr d s Compo S.u s "eisOI. C C . -C.I (Ln. 1251-IN) and it is difficult to sort out the progress on CAD between the Pnrhnmnnd Prn;r A= nnnniQ d natkn nor by Hep new AnAdhra Pradesh Composite Project in 1976. After an initial start, CAD progress anneared to pause and wait for the work to start up again under the com- posite project. Therefore, Annex 7 to an April 1980 memorandum on Andhra Pradesh NSP Reformulation presents a more representative status of this work. This annex is appended as Annex 1 for details on the (disappoint- ing) progress of this work; for the period prior to appraisal of the AP Composite Project (in late 1975), refer to the supervision reports dated February 12, 1973, October 2, 1973 and April 24, 1974. - 20 - or groups of farmers) using mechanical means. The balance was performed by the farmers using labor from nearby villages. Most of the land development is being done on an individual farm basis rather than by chaks. In the last nine months of 1978, only 15% of the land development was carried out on a chak basis. 3.17 Land Irrigated. Because of the lag in the construction of field channels and land development, there was a long delay in the utilization of the irrigation potential. For instance, in 1976/77 only 25,000 ha of crops were grown inder irrigation even thouah 63-000 ha of land wan served hv canals. The area irrigated by years is presented in the following tabulation: Year '000 ha /a 1972/73 9 1973/74 11 1974/75 20 1975/76 25 1976/77 25 1977/78 25 1979/80 75 /a Starting in 1978 water was provided also during the 3.18 Rotational Water SunDlv (RWS) Pilot Operation. In order to deter- mine methods of operating field channels on an equitable and efficient basis, IDA, in collaboration with GOAP, organized a pilot operation to test a RWS system. The program was initiated in 1978 on a small area which was extended in 1979 to an area of approximately 6,000 ha. Field channels were constructed from the project turnouts to each individual holding and a roster for rota- tional water supply (RWS) to each farmgate was organized. The day was divided into irrigation periods with each farmer receiving the entire flow supplied to the turnouts on a specific day of the week. Flows not utilized by the farmer during the specified period were diverted to the drains. The organization of farmers into water users groups and the publicity given to the rotational perioas allocated to eacn u them grealy L1ULUVCu wCt use "OC X t.LIC mental area. It reduced the existing chaotic water distribution practices bielow the outlets and greatly increased the confidence of the farmers in the dependability of the water supply. 3.19 Unfortunately, the tests were run under conditions of excess water available at the outlets and approximately 40% of the flows were wasted to the drains. In general, conditions of scarcity create fierce competition among farmers for the available supply which (i) makes effective and equitable cooperation between the farmers difficult, if not rare, and (ii) induces a lack of discipline in the system. As farmers in most parts of India have no legal right to the water supplied by the system, the enforcements of a water rotation under conditions of water stress will be very difficult. The Pochampad experiment will have to be carefully observed when supplies are - 21 - reduced to the farmers to see whether this system based on peer pressure only can withstand the competition for the more limited quantities of water that will be available as development of the Pochampad project, and the Pochampad scheme as a whole, proceeds. Agricultural Supporting Services 3.20 With the establishment of CAD and the approval of Loan No. 125-IN, the supporting services for the IDA assisted project were materially strength- ened. These aspects of the project now seem to be functionnUg satisfactUriLy. J.2 Z .1 I . - iLt.. I It LI tALCtI it. . M LI6IL Lt.5t .aL-- t'. LL ..va c. .tctoJtL staff which works uacer the technical and admi-iistrative sup%.evision of a Deut Dieco of Arcutr (Exte4non) has bee,~'r to the P-chamnAd Project. Under this program, the main field worker is the Village Extension Officer who is responsible for extension work in eight chaks serving a total of 500 to 600 farmers. The emphasis is mainly on a specially selected group of contact farmers in each chak. An Assistant Director of Agriculture is responsible for 25 to 30 Village Extension Officers and five to six Assistant Agricultural Officers. The Assistant Director of Agriculture is responsible for the training of both the Assistant Agricultural Officers and the Village Extension Workers. The primary objective of the extension organization is to provide advice and guidance to farmers in developing irrigated agriculture. 3.22 Sufficient staff to service the present level of development are in post and it is planned that numbers will be augmented as additional lands are prepared for irrigation. black and red soils, has been developed to study water and fertilizer require- requirements, to serve as a training center on water management for the farymre And n serve as a training center for extension workers. 3.24 Pilot Project Scheme. A.pilot project was initiated in 1976/77 to provide training to land development personnel on the use of tractors and tractor drawn implements, to develop operating norms, and to experiment with various techniques and methods of on-farm land development. Long-Term Credit 3.25 Most of the long-term credit for the construction of field channels, both where they are constructed at budget expense to the individual farm and Banks. Within recent years the procedures have been streamlined and it is now psiblaen tc11sec and prres loan annlications within a relatively short time. Loans for farmers who are ineligible because of defective land titipq nr because of minor over-indebtedness are being guaranteed by the Government. This eliminates the need for collateral. Loans to unwilling farmers or to farmers in major default are made from a Special Loan Account at higher interest rates and collections are made through the regular land - 22 - ILLULL aJU~ U~ I £kI I.,L d %%-~1 t- ..ULLkL I LLLU t Up P UU iI VUL. L L from the Government of India, from the State of Andhra Pradesh and from t-he Agricunltu.ral nRef--nce- Delopnnmnt Corporation. 3.26 Farm Inouts. The distribution of farm innuts is handled by cooperatives, the Agro-Industries Corporation, the Cooperative Marketing Federation and private traders. All farm inputs are now available in ample quantities to meet project demand. Comprehensive CAD Legislation 3.27 In spite of the progress that has been made in recent years with regard to land development as a result of improvements in operating and coor- dination procedures, personnel involved in the Pochampad Project recognize the need for comprehensive supporting legislation. It is felt that such legislation is essential if full benefit is to be realized quickly trom public investments in irrigation infrastructure. A draft of such legislation has been prepared and cleared by all agencies of Government and now needs only legislative approval. 1/ The provisions in the proposal are: (a) treating the command area of an outlet as a single unit for land development and water management: (b) appointment of a Pipe (outlet) Committee for maintenance and repairs of the irrigation system below the outlet (field channels and field drains) and for water manage- ment for equitable distribution to'all farmers; (c) enabling the financing agencies to advance non-banking loans to farmers ineligible for banking loans by making such loans a charge on tne land, recoverable as land revenue arrears in case of default; (d) enabling the CADA (a proposed Command Area Development and non-eligible farmers for proper implementation of Inna apvpTnpment works; (e) regularizing the changes in boundaries and incorporating the field channels and field drains in the cadastral map of the village; (f) enabling land development officers to enforce consolidation of holdings and realignment of boundaries wherever necessary; (g) defining misuse of water more elaborately so as to cover all types of misuse of water; 1/ Unfortunately, this legislation has not been apprOved LU UgL. 4 LL1- outlook does not appear to be promising. - 23 - (h) making land development, water management and optimising agricultural oroduction an obligation of the landholder and prescribing penalties in the case of defaultj and (i) empowering Government to localize (classify) and relocalize lands on changes in technology and to prescribe cropping patterns. Implementation Schedule 3.28 In the appraisal report, the dam which was already 50% completed, was expected to be constructed to its first phase height in 1976. The main canal (except for 20 km of lining), the branct, distributary and minor canals wre: to !a fin:shed i1975. All r-her wcrks, no--ly outlets, watercourses and roads as well as the rtemaining 20 m of the lining of the main canal, were to be completed by June 1976, and the whole of the 100,000 ha was to -- -..- ~~~---- - 1- l~I~ -tua (and~ prjeIJI.c to completion) execution of works is as set forth in Table 5. The planned imnlementation schedule nroved nverlv amhitini diu- lraely to a very slow start-up and to the difficulties with CAD. Procurement 3.29 The project provided for the purchase by ICB of equipment and materials (US$3.14 M), photographic mapping equipment for GOI (US$0.36 M) and spare parts for existing construction equipment as well as supplementary spares for new equipment costing US$1.3 M, bringing the total to US$4.8 M. The larger items of equipment were mobile concrete batching plants and road maintenance equipment. Materials included explosives, steel-reinforcing bars, structual steel items and concrete curing compound--items which were difficult to obtain locally in India at that time. 3.30 With respect to contracting of civil works (Rs 476 M), para 4.24 "Contracts amountine to about Rs 35 million have already been awarded, after local competitive bidding, for most of the remaining works on the dam; the balance of about Rs 20 million (US$3 million) would be carried out mainly by force account. For other major civil works (totalling about US$30 million) consisting of the main canal and its lining, a branch canal, and most village roads, international competitive bidding would be a technically appropriate procurement procedure. There are Indian contractors capable of carrying out this type of work to acceptable standards in accordance with the construction schedule, and they would most probably submit lowest bids. For this project, the Association ------------------------- wouu agree tnat, as an ex;-_Ce-pLtUn tu IL5 %uuUeseC, procurement of civil works, other than force account, would be by competitive and in which Indian concerns hold a majority interest). However, inr-rA-inal--ddin, whrp-r ate fr4l wi,, L 4n ;f-~ future irrigation projects in India, is under active discussion with rnT-" - 24 - 3.31 A slice and package" approach was prescribed for procurement tendering. Main canal excavation was covered by paragraph 3(b) of Schedule 3 Ln theU DlopmeUnJ~UV*t t Ced -6reemenL* fltLL hic poided that anOL y oneLL aU-VC1Li O=W=LL%. would cover not less than three "slices"--each exceeding Rs 2.5 M--and that f-nAaoe wn,,1A hn a thp nntin~n nf hirAina on inivuiduail "Q1 ic c" n, nrL-min& - ---- ----- - - - - - - - their bids to "aggregates" of slices. As a consequence of arguments that ensued. the methods of comparison of tenders were spelled out in detail in Schedule 3, however, this section did not provide that the Association should review specifications and tender documents prior to issue. The Koratla Siphon was covered by paragraph 3(a) which provided that the tunnel, the siphon and four sections of canal lining would be constructed under large "improved" contracts awarded after local advertisement. This section provided that the Association would review documents, evaluations and awards. 3.32 The schedule for procurement was adjusted in late 1974 to provide more funds for civil works carried out by PWD force account. The changes were as shown in the following table: Amount of Credit Allocated and Proposed Revised as per IDA Concur- As Adjusted CAenrv rpnrp n/1Q1_73 (US dollars) in 1974 I. Photo Mapning Equipment & Supplies 860,000 860,000 II. Equipment & Materials 1,430,000 230,000 III. Spares for Plant and Equipment 800,000 800,000 IV. (a) Equipment importedU Uy contractor 2,500,000 2,000,000 (b) Civil Works e- vy-i aA mit by contract 29,410,000 29,410,000 V. Civil Works carried by PWD force account 4,000,000 5,700,000 39,000,000 39,000,000 3.33 The appraisal estimates provided for the importation of high tensil steel bars and sections at a cost of $865,000. As -nstruction proceeded on the dam and main canal, it was found that no high t,.sil steel or sections would be necessary for completing the IDA covered works. Therefore, $UU,UUU in this category was diverted to the PWD force account category. In January 1973, an amount of US$2.5 M was provided for "Equipment to be imported by - 25 - poration utilized this credit facility for the importation of sophisticated machinery for lining. 3.34 The procurement process eventually proved adequate to proiect needs and IDA's response to needed change from the originally planned credit allocation was timely. 3.35 As regards water requirements and losses, the February 1973 super- vision report states that canal water losses were being measured, but that results, if reported, were inconclusive. The Andhra Pradesh Irrigation and CAD Composite Project includes a specific component to measure conveyance losses and this has overtaken the original Pochampad special study. The program has now been underway tor three years and the results available up to November 1979 indicate that losses in unlined channels are three to four Limes Lne debigU assumptIons. Inese results are of serious concern to project authorities, GOI and Bank as it means that projects with only unlined canals and ddst 4LOuL '_ w,*Il beL unabl -e O UUU ~L UJJ~L LL .LL U area envisioned at the time of planning and construction. GOAP is contemplating an extnsive lin4n&' nrnaoram fnr- itc - -m,n I/ f-, the effect of less than planned water availability in the Pochampad Project area obviously will effect plans for the second phase of the overall Pochampad scheme's development. 3.36 With respect to the Groundwater Monitoring Program, staff to con- duct the program was approved in 1971 and the program was inaugurated in April 1972. About 375 wells were selected for periodic readings. A December 1977 report by a special GOAP committee commissioned to make a final report on the cropping patterns in the Pochampad Project stated that: "The Pochampad project area, even without the irrigation from the canals, has a relatively high density of wells, i.e., about one well for every 5 ha." Further, the wacer talDie is relatively high, ranging from 15-20 feet in most of the areas. This is also %..LL L UU CU L O 5 ILLULCL UL LTL.CL LCL LU L .L1n the water. This being the case in the pre-irrigation period the noRgibilitv of inreaRing AinhArantially the armtnndet3Pr e-0on,,Ven in the post-irrigation period cannot be ruled out. The Groundwater Department in its survey of the Pochampad Command Area has brought Out that an amount of about 30,000 ha meters of water can be exploited, of which less than 50% is now being used. This report broadly grouped the categories of groundwater utilization into: (a) supplementing the irrigation for sugarcane crop at the time of closing of canals; (b) providing for late maturing rabi crops like groundnut, etc.; 1/ The Nagarjunasagar scheme, a component of the Andhra Pradesh Irrigation for this purpose. - 26 - (c) for early raising of nurseries and preparation of lands to the extent feasible; and (d) for supplementing regular irrigated dry (ID) areas in a Lew cases. the responsibility of carrying out the study on the Need for Additional Storage and Procesing Facilities- A rpnort completed in 1972 indicated a need for an additional 50,000 tons of grain storage capacity. 3.38 A high level commission was established in 1972 to study water rates for Recovering Project Costs. It was recommended on April 28, 1973 that rates be increased from Rs 15 per acre to Rs 33 per acre for the black soils and increased to Rs 15 per acre for red soils. In late 1975, when Loan 1251-IN was appraised, actual water rates in Andhra Pradesh, including the land cess, amounted to Rs 27 and 41 per acre for red and black soils, respectively. 3.39 With respect to Feasibility Studies for Further Development, a plan for the development of Phase 2 which would serve 454,000 ha in addition was completed in 1975 after the allotment of Godavari River water to Andhra Pr adesh wascraeto20TC Contrutio of f-acil---------- ---------------- to serve the balance of the 231,000 ha of Phase 1. Capital Costs 3.40 The delays in the completion of the project, particularly the roads, field channels and on-farm development and to a lesser extent the canal lining, along with the general worldwide inflation over the past decade have had a significant impact upon the cost of the project. Based on the quarterly progress report of March 30, 1978, the final cost of the project is now esti- mated at US$211 M--an increase of 67% over the original estimate of US$126 M. If the sunk costs of US$35 M are omitted, the increase becomes 93%. A compar- ison of the original estimate with the present is presented in the following tabulation: -------------- (uS$ M) --------------- Sunk costs 35 35 Other civil works 74 125 On-farm development 17 51 Total 126 211 These costs do not include drainage facilities, additional lining, development of groundwater and other improvements, the need for which is now apparent but possibly was not so at time of appraisal. Conceptually, Pochampad Project was appraised on the basis of the planning, design, construction and operation - 27 - standards and criteria being followed in India prior to 1970 but which are now outmoded. 3.41 The cost of on-farm development is based upon the average loan extended for this purpose and escalated by 10% in recognition of continued inflation. The estimates, which were originally expressed in Rupees, were converted to US dollars on the basis of prevailing exchange rates at the time the expenditures were made. VFCLCL.J.UL1 ILU 17CLL1LtLLCL11.V 3.2 Sne17, h oent h,as beenA acatn Rs~C 2046 perO ha for operation and maintenance and it has indicated that it expects to increase the allntmpnt tn RA ?9 npr ha in the near fittiir- Thic ic in rnnerct- rn an estimated requirement of Rs 36 per ha believed to be necessary by IDA missions. Disbursements 3.43 Project disbursements were completed in June 1976 as originally scheduled. During the first three years, disbursements actually proceeded somewhat more rapidly than originally programmed. A comparison of planned and actual disbursements is presented in the following tabulation: Disbursements Appraisal IDA R Report Actual ----- (cumulative %) ----- 1971/72 1 15 179/73 26 37 1973/74 - 48 59 1974/75 73 79 1975/76 92 98 1976/77 100 100 Constraints Inhibiting Full Project Performance 3.44 "Water Management on Command Areas of Andhra Pradesh," a paper written by the CAD Administrator, is at Annex 2. The paper lists his views on the main constraints and problems to achieving a comprehensive, systematic, intensive and modern development or irrigated agriculture. It points out the need for new approaches to project design, operation and maintenance, farmer LV CWL )waOL wa cCCU Lt 6ct..utL4u= a 14 nst *k3A LL laC CA.IkaCL~UC&LLO. . T wn,lA14C lNannA Hn cpnnna ^f r1no Pr.P t, .1 11 f4- for project results not coming up to expectations. However, foremost among the reasons are: - 28 - (a) Bank/GOAP/Project Authorities in practice perceived the main activity of the Pochampad Proiect. as one of lining the 113 miles of the South Main canal. This was natural as the lining problem and the steps necessary to accomplish the lining by machine was an "attention grabber." The lining of the canal for the Pochampad Project was the first of its kind in India which was done with fully mechanized equipment and understandably attracted priority attention. (b) GOAP/Project Authorities were not, and probably still are not, prepared to resolve the distribution problems below the main conveyance and distribution channels. Unfortun- ately, abundant water currently is available and is used 1n an UnrLsLr iLed. way, PCHU.L,I Lu LLICL P[L5Cb U IIL iL IgdL IUI development. It is now used liberally and in excess of are restricted, project authorities and farmers alike are under no pressure to imnlement the measures that will be essential in the future. 3.46 The absence and/or inadequacies of watercourses and field channels below the official Government outlet have been assigned major blame through- out India in the past for the underutilization of the irrigation potential. CAD programs which focused primarily on development below the Government outlet were an attempt to remedy the situation. CAD was viewed as a low cost reorganization approach to resolve all the problems. Unfortunately, however, it failed to recognize that the unreliability of the distribution system between the dam and the government outlet was also a major constraint. In most of the present generation of Indian irrigation projects, water is cOn- veyed over hundreds of miles between the dam and the Government operated tJl.£ L L U~. J. ' ..' a oYO W-L W tfl.L - -6 %J%AGLLA-L--4U~ta of water through seepage, linkage and illegal diversions. As a result, the suprniv =>rh '-neloe is highly arrat-i- Nevertholome un"illing farmers were coerced into participating in communal and on-farm works without any real assurance that the project could deliver a reliable water supply to all outlets commanded. In recent years, it has become increasingly clear that CAD is only one part of the solution and that major improvements are necessary in the overall system design and performance. GOAP Performance as per the Project Agreement 3.47 In accordance with Section 2.01, GOAP undertook to carry out the project with due diligence and efficiency and in conformity with sound admin- istrative, agricultural, engineering and financial practices. Shortcomings in results achieved cannot be attributed to lack of intent but rather to the magnitude and complexity of tne problems to Uve ovecom. Inc ZaWe -n5auL12n1U the various Committees and appointed the Project Coordinator as specified in to the project as required under Section 2.03, but in retrospect it is now apparent at in 101 whan apnraisAl wAs mAdP noirhr GOAP nor TnA anti- cipated correctly the amount of detailed time-consuming work involved in on- - 29 - farm land development. Staff of the Central Water and Power Commission was stationed at the dam and monitored construction until the main sections were completed (Section 2.04). On-farm development was not completed simultaneously with major civil works for reasons explained elsewhere--in fact, there may be as much as a nine year delay (Section 2.05). With respect to Section 2.06, the Memorandum of Negotiations confirmed that self-insurance by O or by GOAT would be acceptable to the Association in fulfillment of the requirement to for insurance of goods. Although there were some problems with contractors the state was to provide, on the whole they performed well. Machinery and Pnninment acanired for the proiect was emploved on it until the specific work was completed. 3.48 - GOAP maintained and audited the specified accounts for the project, and submitted the results of such audits to IDA along with its quarterly reports as required. The standard clause for annual audits was included in the Development Credit Agreement. For the most part, it also made suitable budgetary provision for the accomplishment of the program. During the course of construction it did apparently reduce the priority it accorded village roads, but this phase of the program now seems to have regained momentum. The budget allocations for field channels and on-farm development were also inadequate in the initial years, but this was Uecause Lne maguiuUe u .Lit: task and related cost was not appreciated at that time. This problem now allocations of Rs 20 per ha or more for the operation and maintenance of comlte fArilit-ip (Rpetinn 4fLL - Rnr water charges are not assessed until the sixth year and then graduated up to the tenth year, and since the first irrigation during the rabi season was in the autumn of 1978, it is too early in the development of the project for Section 4.05 on water charges to'have any significance. 3.49 GOAP was very helpful and cooperative in carrying out the provisions of the Article covering consultation, information and inspection. It has immediately brought to the attention of IDA any problems that it encountered and it has facilitated the inspection of all project sites and on-going work by IDA personnel. There has been--and continues to be under Loan 1251-IN--a continuous frank and open dialogue between Gu, GOaP and IDA regaruing ImpLt- mentation of the project. IDA Performance 3.50 In the approximately five years that the Credit and Project Agree- ments wre in effect. 11 supervision missions visited the Proiect. These missions helped the State in getting allocations of scarce materials such as explosives, cement and drill rods, and in the foreign procurement of materials, particularly the canal lining machinery. At an early date these missions also flagged the slow pace of on-farm development and the delay in the construction of field channels and village roads. The establishment of the CAD Department in 1974 and Bank approval of Loan 1251-IN for the Andhra Pradesh Composite Project in 1976, which are largely responsible for the progress now being made in the construction of field channels and on-farm - 30 - development, resulted from IDA support and active participation in drawing ui, r o,cA(An -ram.nfl 3.51 Even though, as a whole, the construction of civil works proceeded relatively well, the supervision missions could have been more effective if there had been more continuity in the personnel of such missions. At least five different groups participated in the 11 missions. During its final discussion with the two GOAP Secretaries involved in the Pochampad project, the completion mission made a special point of inviting any comments or suggestions GOAP might have on IDA staff contributions to project implemen- tation. Both Secretaries expressed their unreserved appreciation for the helpfulness of the supervision missions. The-ir only suggestion was for more continuity in staffing these missions. IV. ECONOMIC AND FINANCIAL IMPACT 4.01 At full develoyment. the IDA-assisted nortion of PhaR I qhould result in an annual increment in foodgrain production of 316,000 tons. This compares to the 259.000 ton increment estimated at appraisal. Employment 4.02 Opportunity for additional employment has been created in the con- struction and development of the project as well as on project farms. At the peak of construction activity on the dam in 1972, it was reported that 3,000 workers were employed. Also, large numbers of workers were used in the excava- tion of the canals and distribution system and in the lining of the main canal about 64% of the lining was placed by manual laDor). Also, ou/ or tne on- farm development accomplished to date has been done manually. Project ILI.d4LD Ib LinLC L.LaL VVCL I,UVU IaUUL LA. WL UC PLUVIUCu WlLL LUiL-L..Ut employment each year until the land development is completed in 1985. 4.03 It is estimated that at full development the annual increase in farm mpYnvment over that which wnuld wrint in the future withourt the nroject would amount to 13.5 M man-days or the equivalent of 61,000 full-time farm Jobs (based upon 220 working days per year). Economic Analysis 4.04 A new economic analysis, based on now available information, was made to determine whether the Pochampad Irrigation Project has so far met its economic objectives and continues to be justified. Major elements considered in the new analysis and on which up-to-date data is employed include cropping patterns, crop yields, farmgate prices, crop inputs, project capital and operating costs, construction period, and rate of benefit accrual. - 31 - 4.05 Irrigation Intensity. In contrast to the 100% irrigation intensity assumed in the appraisal report, project officials estimate that at full project development, it will be possible to achieve a much higher overall irrigation intensity. Taking this into account, the PCR analysis is based upon a 1985 irrigation intensity of 145% and an overall cropping intensity of 185%. 4.06 Since appraisal, wheat has become an important crop in the project area both as an irrigated and rainfed crop during the rabi season.* Also with the cropping irtensity now projected, it is expected, at least to some extent, that nadv will hp grown nn rd nnilq as wpll an black diring the rahi Rpannn whereas during appraisal it was anticipated that paddy would be grown only on the black soils during the kharif. 4.07 Crop Yields. The future crop yields of kharif paddy and rabi maize used in the analysis are lower than those anticipated at time of appraisal. The reduction reflects the reluctance of the cultivators in the project area to use the recommended applications of insecticides, pesticides and fertilizer before they are convinced of a reliable water supply. Cropping patterns and yields used in the new analysis are shown in Table 1 and a comparison of those yields with the appraisal estimates is at Table 2. 4.08 Economic Prices. Prices for internationally traded commodities, used in the new analysis and based upon tne BanKs f orecasts, are presented together with expected financial prices in Table 3. To the extent they are avl able,C U a JLjc a i o ofDL the -. -LL -I~LWAI -J -LC -AC 4L -11J a 1. -.4 1..J .. 1 PCR follows: Appraisal Completion Commodity Report Report ------ (US$/ton)------ Paddy 122 /a 209 Maize 67 163 Groundnuts 125 326 /a The appraisal report indicated this price for rice.. 4.09 Crop Enterprise Budgets. Crop budgets, both economic and financial, -eepeard'o- alo h .1g_&*_ ---- ---------.----' WU p aU UL 4 UL L&IC bL~I LL1A..LLL LLUpb PLt=bCL1Liy 6LUWLL LL LIU PLUj:'UL area as well as those expected to be grown by 1985. These budgets were based upon the yields presented 4n T.M. 1 and1 u Ho th'Igt r~eiTbe The economic budgets include, as farm production expenses, the cost of all labor- hiillnrkA npd fertilizer- n1ant nrntPntion machinerv and mAninment. Consideration was given to the possibility of shadow pricing farm labor in the economic budgets. but in view of the going wages which are only Rs 3.5 per day (which is hardly enough for subsistence) such an adjustment is not essential. (The Appraisal report shadow priced all incremental farm family labor at zero in the economic analysis). - 32 - 4.10 Except for three changes, the financial budgets are the same as the economic. Both land taxes (revenue) and interest paid on production capital were included as costs in the financial budgets, whereas they were considered as transfer payments in the economic budgets and excluded. Also in the financial budgets, the price of chemical fertilizer was based upon the actual prices being paid in the project area projected to 1985, whereas the price used in the economic budgets was based upon the Bank's 1985 fore- casts. The full details of the budgets are presented in Tables 4, 5 and 6. 4.11 Irrigation Benefits. Irrigation benefits have been taken as the incremental net economic crop income (difference in the future without and with project development of the project). Under conditions of full develop- ment, the Appraisal Report indicated annual benefits of US$15.2 M whereas the present analysis indicates an annual benefit of US$55 M. The increase has resulted largely LUm IU1,LCU5C iU ecUnomiL prices duU expected irrigation intensity. 4.12 Rate of Development. The rate of development reflects both the time reauired to complete the construction of the irrigation facilities. including land development, and the time required to attain full production after the irrigation facilities have been completed. The Appraisal Report assumed that project facilities would be completed in 1976 and that full production would be achieved in 1978. It is now estimated that construction will not be completed until the early 1990s. 4.13 Development Period. In the Appraisal Report, it was assumed that full production would be attained on any individual block of land four years after irrigation service became available and-land development was completed. In the new economic analysis, it is assumed that 50% would accrue in the first year, 15% in the second, 90% in the third and 100% in the fourth. taJJld. aiLu inJ)~gL.5 Cots iLe capia c.ost, excludinLg sn costs of US$35 M, was estimated in the Appraisal Report at US$91 M. As a reul o.f inflation fn.ar cedin or.gnl -all-own-aces for price esa-latin and the delay in the completion of on-farm development works, project costs, (described in nara 3.40 above and excluding sunk costs). will amount to US$176 M--an increase of 93%. The cost of operation and maintenance at the time of appraisal was estimated to be Rs 20/ha whereas it is now estimated that it will amount to Rs 36/ha. 4.15 Construction Period. The Appraisal Report presumed a six-year construction period and irrigation of all lands in the sixth year, i.e., in 1976. While the major part of project facilities was constructed within six years, there were significant delays, particularly in completing the field channels and on-farm development and in both the village roads and lining of the main canal. In practice, the construction period, i.e., from inception until the last component of the project completed will be 15 years. A a Repot whic a bause. I upo a50.ULL -yLeLa. project. life, th tex Appraisal Report which was based upon a 50-year project life, the exclusion of sunk costs, and th shado pricing of *"+M1t fa-rm f2m;lu Iahnr at - 33 - zero, indicated a rate of return of 14.3%. The new analysis prepared for this report (based upon revised costs and prices, the indexing of past costs to present value based upon the Indian Tnvestment Price Index, the inclusion of all labor including that of the farm family at going wage rates, and the use of a 50-year period of analysis) resulted in a rate of return of 14.15%. The inclusion of sunk costs and their spread over the construction period beginning in 19064, the use of a 58-year period starting in 1964, and index- ing the sunk costs up to the present value resulted in a rate of return of 9.5%. Ths would have been substantially higher Jif ani appropr-*e part-- of the costs of storage, canal capacity and lining had been allocated to fuiture developmentS whrh. wn-uild in inrea-e- in, pkr- uxi-nve and above those taken as benefits in the project. However, for want of reliable data this can not be done now. 4.17 Adverse Impacts. So far as can now be determined the only signi- ficant adverse effect the project will have will be related to the lack of adequate drainage. Even though only a part of the project area has now been irrigated, it is evident that drainage problems will emerge both in the project area and on adjacent non-project lands. Drainage problems are aggravated by the large numbers of tanks that exist throughout the project area. The resulting higher water tables will induce an increase in wet cultivation at least until water supplies are restricted in the future, the large number of tanks are eliminated, and an adequate drainage system is put into place to channel water from the cnaK drains to the river. Cot eovery of means, including land betterment taxes, land revenue cesses, special cesses added to th land revenne tax and wat-er charges Thp rnct nf nn-Fnrm land development is met directly by the cultivators from their own resources through annual repayments of credits provided by the financing agency. 4.19 A significant part of the cost of the dam and reservoir as well as the main canal will serve future developments and is therefore properly allocable to such future developments. Because of the lack of data regarding the costs of these facilities and the difficulty of predicting when such additional capacity will be utilized, no attempt has been made at this time to allocate costs between the IDA-assisted project and future developments. 4.20 he suHU costs (US$3J M) plus the cost of civil works (US$125 M) result in a total cost of US$1,600 per ha. The repayment of this cost over On the other hand, the amortization of this amount over thirty years at 10% interest would rpniirp annual ayments of TTRS170/ha (Rs 1,39A) The adA- tion of an annual O&M cost of Rs 36 per ha increases the amount to Rs 449 per ha and Rs 1,362 per ha. 4.21 Betterment Levy. The betterment levy is in principle the primary means for recovery of capital costs in Andhra Pradesh. There is a legislative authority for collecting up to one-half of the incremental land value result- ing from various kinds of improvement works in 20 equal installments. At the - 34 - present time, however, the irrigation history on the project is too short to be able to make any prediction on the impact of the project on land values and GOAP has not undertaken to collect any betterment levy resulting from the project. 4.22 Water Charges. The water charges, which in current practice are more important for cost recovery than the betterment levy, vary between the black and red soils. Collections are started in the sixth year after irri- gation service becomes available whether the water is used or not, except in those cases where the water fails to reach the individual holding, in which case there is no charge. In the sixth year, Rs 4 and Rs 6 per ha, LepLiVely, die Ucr LnrU dBU Ulace sUil LU ndL equdi aMUUUL 15 dUUtU every year until the tenth year when the amount reaches Rs 20 per acre on the rAed4 sol a nd Rs 30l per acreo n the blac soil whc on as penr ha basis amontsr to Rs 50 and Rs 75, respectively. Since only small hectarages of black soils havp hppn irrigntrd frnm nrnper fArilitipq for mnrp than fivp varQ and none of the red soils were irrigated until 1978, it is too early to estimate the amount that will be collected through water charges. However, assuming that charges are collected at the prescribed level, they will be more than suffi- cient to pay the cost of operation and maintenance which is now estimated at Rs 36/ha. Capital recovery from water charges or other agricultural taxation is bound to be a slow process at least until land development costs are fully repaid to the Banks. 4.23 Recovery of Cost for Land Development. Loans tor on-tarm land development are subject to repayment in 10 years following a one-year grace period during which interest will be capitalized. With the addition of interest, the average cost of land development will amount to Rs 4,417 per Lla ULV LjJO1LL1J.Lt I 1 a V-t. a . L.v-Yca. k L C..a6 I At £LfL.CL=OL WJLL.. LC4U.LLr. an annual payment of Rs 750 per ha or one-third of project rent until the loan is repna (Table 10). V. CONCLUSIONS 5.01 The Pochampad project and the Kadana Project, which was processed approximately at the same time, are hybrids between the old style irrigation projects financed by IDA in the early 1960s and a new generation of projects developed with IDA support in the late 1970s. 5.02 The projects of the early 1960s involved a storage or diversion dam and a main canal system only, leaving water distribution from the project outlets (which were operated by the irrigation Department) for the consumers to arrange and assumed that this would happen. Some of these outlets served areas in excesS Of 100 na. Conveyance of water to consumers farmgates thus necessitated the construction of minor canal networks that sometimes were organize themselves for the construction of these canals without outside wassd n -ur----------ance. availblenly.rrely was available only rarely. - 35 - 5.03 The very long delays between water availability in the main con- veyance system and -it us UO y farmer mad "he econm4. -4:' irrigation works marginal, if at all viable. In the early 1970s, therefore, he conet of Command Area novalmnmont Authority (CADA) Pvnlved The npw organization was to assist the farmers in obtaining institutional credit for the constriction of the minor system and for land levelling and bunding of their fields. 5.04 A series of so-called command area development projects resulted from these efforts. They turned out to be somewhat more effective in the generation of benefits than the projects of the 1960s. However, even in these projects the construction of the minor system, as a communal effort and financed by individual loans to eligible farmers, was exceedingly slow and left large areas commanded by the main canals without an adequate water supply for many years. 5.05 Lessons learned from second generation projects, such as rochampad were: (a) An irrigation project must deliver water through a properly pla~nned, desigvned and construcrted cnal csstem to the-, indi- vidual farmgate. Operation of the system must enable timely and relihle water deliveries to the farmerg- Only after the farmer has gained confidence in the water supply will he develop his land and move into more productive crop varieties which, in general, are also more sensitive to water stress. This is especially true for upland crops. (b) The major and the minor conveyance systems must be built simultaneously and water must not be released from the main canals for irrigation until the minor delivery system to the farmgates is ready to receive it. If construction of the minor system is delayed too long, the more enterprising farmers will construct their own conveyance syStems frOm the project outlets and preempt the supply to the smaller an improvised supply system has been established, it is extreme!- difficulit to- proceed with the cnstctin andt and subsequently operation of a community owned and operated system. (c) The minor system is an integral part of the irrigation project and, if not constructed, will jeopardize the viability of the project. Thus, the source of financing for its construction should only be a secondary consideration. In terms of adminis- trative efficiency, the preferred way to construct the minor system is from budgetary funds. Cost recovery can be through water charges (as for the main system) or through the banking system which can advance funds to the Government for the con- struction of the minor system and recover them from farmers after the minor system is fu1ly operdatiUl. (hLi system was successfully used in the Kadana Project. ()The min syte from the governmnt outlIets to'th - farmgates, must be operated by farmers who have been organized into water users' associations. The smaller the qroup of farmers who share a government controlled water supply point, the more effective the organization. The supply at the outlet must be timely and reliable and each farmer must have a right to a share of the water. The farmer must have a quick and con- venient way to ask for redress if his right to water is inter- ferred with. (e) Drainage works (at least the main drainage lines) must be implemented simultaneously with the irrigation canal network. INDIA PCIIAMPAD IRRIGATION PROJECT Croppi Pattorne, åltd and Production Pre-Project (I970-71) Pregent (1978.-79) F future Ithout Prolect (11985) Future With Project (1985) Cropped Cropp.d Cropped Croppe,d CRVP'S AND SEASON Are& Yield Prodction Area Yield Productton Area field Production Are. Yteld Production - - O ha> (tne/Jha) ('000 ton) lU>00 haF aTn /ha) 0D tonal T o00 heT En./h)e) I'00hj ions/haF Ti0 oni Irrr,ted K,1dy 12.0 2.0 24.0 21.6 2.2 61.5 13.0 2.8 36.4 50.0 3.3 165.0 P..31e 0.5 1.1 0.6 1.] 1.3 1.7 1.0 1.7 1.7 15.0 2.4 31.0 Jouar 0.0 - - 0.0 - - 0.0 - 1.0 2.0 ?.0 Groundnuta 0.0 - - 0.0 - - 0.0 - - 1.0 1.3 1.! Fulose@ 0.0 - - 0.0 - 0.0 - - 1.0 0.6 0.6 MsDcellaneoue 1/ 0.0 - - 0.0 - - 0.0 - - 2.0 1.5 3.0 Ra t. fed kaddy 0.1 1.5 0.2 0.0 - - 0.1 1.6 0.2 0.0 - - Hat te 12.8 1.0 12.8 16.4 1.2 19.7 16.0 1.2 19.2 9.0 1.3 11.7 Jo.ar 15.5 0.7 10.9 9.2 0.7 6.4 13.0 0.7 9.1 6.0 0.9 5.4 Pulae 31.5 0.4 12.6 32.0 0.4 12.8 30.0 0.4 12.0 8.0 0.5 4.0 Croundnuta 2.5 0.6 1.5 2.4 0.7 1.7 2.0 0.8 1.6 2.0 1.0 2.0 Mi.ela4neou# 1/ 2.0 3.9 1.8 2.0 1.0 2.0 2.0 1.0 2.0 2.0 1.2 2.4 TOTAL ålCARIV (76.9) (84.9) (77.1) (97.0 irripa..ted laddy 9.0 2.2 119.8 9.0 2.3 20.7 9.0 2.9 26.1 36.0 3.5 126.0 JO.Ar 0.0 - - 0.0 - - 0.0 - - 5.0 2.6 13.0 M.ire 4.8 l.8 8.6 4.5 2.0 9.0 5.0 2.2 1.0 17.0 3.2 54.4 Geoundnta 0.1 L.0 0.1 0.1 1.1 0.1 3.0 1.2 3.6 9.0 1.5 13.5 WI,eat 0.0 . - 0.0 - - 0.0 - - 5.0 2.8 14.0 hi:cellancoug 0.0 - - 0.0 . - 1.0 1.4 1.4 3.0 1.7 5.1 4.%td.3l Mo02ture J..t 17.6 0.8 L4.1 13.2 .8 a10.6 15.0 0.8 12.0 3.0 1.0 3.0 Pulac. 3.5 0.5 1.8 1.3 0.5 0.7 5.0 0.5 2.5 2.0 0.6 1.2 uthenat 0.0 - - 0.9 1.5 1.4 0.0 - - 5.0 1.9 9.5 Miec:ellaneous 2/ 3.0 1.0 3.0 3.0 1.0 3.0 3.0 1.1 3.3 3.0 1.1 3.9 TOrAL hADI (38.0) (34.0) (41.0) (88.0) Total Cropped ./ 114.9 118.9 118.1 185.0 Total Ir,rinated 2/ 26.4 38.5 32.0 145.0 1l Mincellaneous tncludes turmeric, seen~, chillteci, tobacco, cotton and castor been@. ror purposes of ylelde and productton, chillIea vec a@urmed. 2/ Since there ts an even 100,000 ha in the project, theoe ftguren are alo crolpping and irllgation Intenotty. - 38 - TABLE 2 INDIA POCHAMPAD IRRIGATION PROJECT Yields of Major Crops (Future with Project) Completion Appraisal Report -------(tonsinha)----- Trri aarpe Paddy 4.0 371 Maize - 2.4 Jowar - 2.0 Groundnuts - 1.3 Pulses - 0.6 Rainfed Maize 0.8 1.3 Jowar 0.8 0.9 Pulses 0.4 0.5 Groundnuts U.7 1.0 R an b Paddy 3-9 Jowar - 2.6 Maize 3.7 3.2 Groundnuts 1.5 1.5 Wheat - 2.8 Residual Moisture Jowar - 1.0 Pulses - 0.6 Wheat - 1.9 - 39 - TABLE 3 INDIA POCHAMPAD IRRIGATION PROJECT Prices /a Crops Economic Financial ------ 7v t . Paddy I-9o 1 iAn Jowar 1.25 1,025 Maize 1,400 950 Wheat 1,675 1,050 Pulses 1,740 950 Groundnuts (unshelled) 2,800 1,300 Cotton (seed) 3,575 2,800 Fertilizer: Manure (cart load) 12-18 12-18 N 3,800 5,000 P 3,200 4,300 K 1,L00 1,700 Labor (Rs/day) 3.5 3.5 DUILUCK eam krstuay) 1U.U 1U.U /a Prices of internationally traded commodities which were ane rte of US1 to s on .as6s of exchange rate of US$1 to Rs 8.6. INDIA PCCiNAMPAD IRRICAlIeH P1OJECT Crop rinanciaj and Economic Biidget. P.ddy (11-) Paddy (I-1)P H.t. (14) Malte 0-I) Hatre (I-9) J..wa, Jo-.r e1-6 Pregent future Pre.ent - uture [8N'Ir. P...nt futuirr Pr..rt Fu,tur, Pre øent Fute t (-18) 19O w WO vi FWO Ik 0 W/ Wq wJ mø 41 kW k , antiBte, per ha Iun labir 4d.) i65 170 180 165 170 180 150 80 85 90 80 85 90 15 I5 7s 80 80 BIillock Labor (teamdaeye tlß 19 19 l8 19 19 16 15 >5 Is Is I15 i Is l5 S 5 10 I0 Seda (hg) 60 60 61 60 60 61 55 15 15 Is Is Is Is I5 15 i5 9 9 Fertilaert v.nwe (carit load) 20 20 20 20 20 20 20 4 5 6 4 5 6 3 3 3 0 0 1 tg) 30 is 50 30 35 50 25 14 16 20 14 16 20 8 ( 12 30 30 t (kø ti 20 is IB 20 75 ,12 8 0 12 8 J0 22 6 4 8 10 to k (kil) k0 10 10 t0 t0 10 5 0 0 0 0 0 0 0 0 0 >0 10 vield (tonalha) 2.2 2.8 3.3 2.3 2.9 3.5 2.2 1.3 1.7 2.4 2,0 2.2 3.2 1.2 1.2 1.3 2.0 2.6 Financlal Crop Budgete (a) LaIr 5J1 595 630 517 595 630 525 280 291 315 280 298 315 262 262 262 ?0 280 Bulløc k 180 190 190 180 190 190 160 150 150 150 150 150 so 150 130 150 20Q i00 Se. 120 120 152 120 120 152 110 30 30 30 30 30 30 - 30 30 30 8 Ilk C ariiler 544, 572 614 5&4 572 614 485 164 198 2,2 160 118 20 tIl 92 139 210 210 PIant F,utectIloft 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 kiacIhInIciy and Equlpment ;2 75 60 72 75 80 10 50 50 50 50 50 50 50 50 $0 30 30 L.nd K-uene 20 20 20 20 20 20 Is Is Is I5 Is i5 [s Is 15 Is 45 I5 Pr,!uction Ciredit 45 47 s2 45 4 52 41 21 22 24 21 22 23 19 i 19 20 15 rot.t F.a.nclil Cot 1,558i 1,619 1,798 1,558 1,619 1,798 I,406 710 162 626 706 743 191 617 6>3i é6 701 668 Iatre of Productltoin 870 1,160 1,160 810 1,160 1,160 1,160 760 950 950 760 950 950 760 9510 9150 1,025 1.025 Gro.@ 8eturn 1,914 3,248 3,828 2,001 .3,36 4,060 2,552 9P8 1,615 2,280 1,520 2,090 3,040 912 1,140 1,235 2,050 2,1665 Met Financial Return 316 1,629 2,030 441 .14l 2,262 1,146 28 e5> 11,454 854 I,347 2,247 275 573 1570 1,347 1,997 Econ ic Crnp 1udgiiets (Ie) L.abr 57P 1595 630 578 595 630 525 283 291 315 280 298 31 262 762 262 280 280 111lock, 160 190 190 180 190 190 160 150 150 150 150 150 150 150 se 150 100 100 Sed. 250 , 250 315 250 250 31 230 55 55 55 55 55 55 55 55 55 30 30 li.rtllI'r 482 50 a 581 482 5 Sit 404 139 ló@ 204 164 198 242 94 81 1115 11l 157 ri '1 .1rotctLin c 0 0 0 0 0 0 0 0 0 0 0 0 0 0' 0 0 0 HMar,n,y a,d [quipment 712 75 80 12 75 80 70 $0 50 50 50 50 50 50 50 50 30 30 fo.l Econ,rcI Coat 1,561 3,618 1,796 1,562 1,618 5,716 1,389 614 )20 714 699 3 82 611 598 12 591 597 Ifce ot virodoct/tun 1,800 1,ia0 1,800. 1,800 1,801) 1,000 1,800 1,401 0 1,400 1,400 1 ,400 1,400 1,400 1,400 5,4003 1,400 1,52s 1,525 Cro.. Value 3,960 5,040 5,940 4,140 5,221) 5,300 1,960 1,820 2,)80 3,360 2,800 3,080 4,480 1,680 1,680 1,120 3,050 3,965 ilt Econootc Value 2,399 3,422 4,144 2,578 1,602 4,502 2,571 1,146 1,660 2,566 2,101 2,329 3,668 1,069 1,082 1,186 2,453 3,168 .t - utureIth Proj.ct and FIJO - 8F.tr.eIhout Projectl ]-X - Irrig.t.d during Xhøaril 1- . Irri8ted during labil; lit . not irrlsat.ed. F.tur* .Itho.t under irrIgated rbi doe not ~,n that a crop may not t:di ixrigated. 1t oa4p[y meani that tf It is irriged utør la provided from nøsn-pro3ect gources auch se velt*. INDIA P(JCHIAMIAD 3IIIICATION VROJICT C.rop IFinncIa and [conneic Bud et Joer (NI-K) .o1ar (NI-11) Gnut Groundnuto (11 Croundnuto (NI-IK) Puler, Pulse§ (N14-1) . Fre.,nt Fut,ur-e Fresent -utu-re .- Present futu,e rre.en Futuro (1J-) Lfefint Fusture !j-rnttn per ,b H1u.an I.abor (daya) 60 65 68 60 65 68 7 12 72 12 10 10 70 40 35 36 40 fullock Labor (teamolayo) t0 10 10 13 10 10 9 i 9 9 9 9 9 1 7 1 serde (ka) 9 9 9 9 9 9 109 809 109 109 ø00 100 100 3 3 3 1 I.ertiltrrr Hin,re (cart load) 0 0 0 0 0 0 2 1 2 2 0 0 0 2 2 2 2 N (ik) 10 12 I5 5 6 7 1 7 8 12 0 0 0 0 0 0 0 p (kK) 0 0 5 0 0 5 0 -0 0 8 0 0 0 0 0 0 0 .K Ukg) 0 0 5 0 0 5 0 0 0 I 0 0 0 0 0 0 0 ¥Wld (tronha 0.7 0.7 0.9 0.8 0.8 1.0 • 1.3 1.1 1.2 1.5 0.7 0.8 1.0 0,6 0.4 0.4 0.5 F6n.r,1 Crop, Budetso (RØ) Labor 710 221 23d 2U0 221 238 252 252 252 252 245 245 245 140 122 126 140 Pullocks 100 800 100 > 00 900) 101) 90 90 9 0 90 90 90 0 70 70 10 I-da in 18 88 80 10 10 165 865 165 165 140 140 140 3 3 3 3 tertiltz.r 50 60 los 25 30 35 123 61 70 123 0 0 0 30 30 310. 30 Plant Irotectilon 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 I.chlinry and EquIlnt 30 30 30 )0 30 30 - 30 3 30 30 20 20 20 I5 I5 is I5 l.nd keenue 15' li I5 I5 I5 I5 l5 I5 l5 5 15 5 0 10 j0 10 lirud,,ton Credit 13 16 16 12 I2 83 20 ali 19 20 [5 15 I5 10 10 0 10 Total financIal Coot 436 &64 522 402 425 441 695 65 641 695 525 525 525 278 260 26. 278 Price of Product/ton 160 1,025 1,025 660 1,025 1,025 1,300 1,170 1,300 1,300 1,17o 1,100 1.300 950 900 950 950 Grog* Return 532 711 922 688 820 820 1,690 1,281' 1,560 1,950 819 1,040 1,300 510 360 360 475 Net financiil tetura 96 253 400 286 396 319 995 652 919 8,255 294 55 7175 292 100 116 191 Ecnn-,Ic Crop Budpetø (ILD) L.h.b 210 221 238 210 221 2)8 253 252 252 252 245 245 145 140 122 -126 -60 8u10ka 100 100 100 100 100 100 90 90 90 90 90 90 90 10 70 70 10 sed. 30 30 30 l8 l8. l8 345 34 345 345 300 300 00 6 6 6 6 feirtIIser 38 46 i8 19 23 48 112 57 60 tik 0 0 0 30 30 30 - 0 Piant Irotecton 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 11achInery Gnd E,uipMent 301 30 30 30 30 30 30 1» 30 30 20 20 20 Is 15 [5 I5 Total Lconomic Coet 40s' 453 476 317 398 434 830 74 177 828 665 655 >55 261 243 241 261 Price øf Froduct/ton 1,525 525 8,525 8525 8,525 I,525 2,800 2,80(1 2,800 2,800 2,60o 2,800 2600 1,740 1,740 ,1740 1.7..) Ca. Val.e 1,068 1,068 1,063 1,220 8,220 11,525 3,640 3,08ø 3,360 1,200 1,56o 2,240 2,600 696 696 696 870 Net £conomc Valu. 660 615 896 841 822 11,091 2,810 2,306 2,583 3,372 1,295 185 2.145 435 453 449 609 Notet FW - Future wLth Prgjøct and FWO - Future vttho4st ProJect; 1-8 - Irrigated durini Vhaarl; I-IL - lrijated during Døbt iNl - Not Irrigated. future without under Irri- gated rabt doe. nat neon thlat a crop any nat bIe Irriglated. It atrply mema that il (t Is rlsigated ater In proviIded trom non-project sourcs-t such a vaite. 09 cI I" til FICHAMPAD liiBIGAftDN 5RolJ.CT CmYp ri.n.<ial and t,onnelt Budgeta Puae (NI-ft) Wh.,t w-ae) Hi.,e. (1-I) l.c. (1-R) Mic. (Nb-i) Hac. (NI-i) I- preennt Future i -RT t i u Suture lture Preeent Future Present i tsture 51W 5 Fi w1 5 ~ - 110 w5 51Q w quanlri, tr pr ha inuk Labor (days> 35 36 40 510 os 90 9$ 65 95 75 B0 es 71 60 85 Buøto:k .abor (teaoday) 7 7 7 >5 12 12 Is 55 Is 15 Is 15 l5 Is I5 S-dea(kg) 3 3 100 100 100 2 2 2 2 2 2 2 2 2 Manur(cart load) 2 2 2 0 0 0 0 0 0 0 0 0 0 0 0 N ikf) 0 0 0 i5 0 0 60 35 70 10 is 20 10) i5 20 (kg) 0 0 0 20 0 0 40 25 50 10 i2 20 10 12 20 (kg) 0 0 0 5 0 0 30 15 30 $ 6 10 5 6 50 VI,ld (tøalhe) 0.1 0.5 0.6 2.8 1.5 1.9 1.5 1.4 1.2 1.0 1.0 - 1.2 1.0 1.1 1.3 fin.-1-1 clop Budget. (Ua) La1or >22 126 140 )85 296 15 33 298 113 36> 260 298 26) 20 298 DuSlockS 70 10 70 150 120 120 150 150 150 150 150 150 150 150 150, 4 s 3 3 l0 90 50$ jo 10 10 il 10 10 B t0 10 Ve,tSlSaer 30 50 30 470 0 0 523 310 616 101 137 20) 101 131 203 Fl.nt Protecttonr 0 0 0 0 0 0 200 i5 100 5,0 50 50 S0 50 50 nr.mhinery and [,utprent 1 1$ I5 40 40 40 40 40 40 30 30 30 30 30 30 land Feven. 10 50 10 70 i5 i5 20 20 20 15 [5 I5 I5 I5 I5 p,oau,tetn Cc.dIt t0 10 10 35 17 In 18 27 38 72 20 23 19 20 23 T,,al financiat Cot 26> 264 278 1,205 $90 613 1,314 930 t,101 73 692 779 636 692 779 c,ice of Product/ton 910 950 950 1,050 900 1,050 5,000 5,000 5.000 4,000) .5,000 5,00) 4,000 5,000 5,000 Cf,,r. Petur, 450 415 570,. 2.940 1,350 1,995 1,500 1,00 8,500 4,000 5,000 6,000 4,ø000 5,500 6,500 NL Financial Return 190 .251 292 5,13$ 170 1,112 6,56 6,070 6,191 3,261 4,108 5,221 3,164 4,e08 5,12i fronAc Ccr 8-,dk,gts (Re) .ahor 122 126 140 38$ 295 35 333 298 333 363 280 298 263 260 298 Bøllock 10 70 10 150 120 120 150 150 550 15 150 150 150 150 150 5-ede 6 6 6 163 125 110 12 12 12 t0 12 12 10 12 12 Festiliser 30 30 30 )55 0 0 389 230 469 26 102 151 16 102 151 Iant Protectina 0 0 0 0 0 0 200 75 500 50 50 50 50 50 50 IAchinee,r and Lquip,ent I5 I5 15 40 40 40 40 40 40 30 30 30 30 30 30 Total Econo-nlc Cost' 24> 247 261 1,098 581 645 1,124 605 1,104 679 624 691 59 624 691 price oi Produciton 1.740 1,140 .1,40 1,615 1,250 1,675 6,000 6,000 6,000 5,200 6,000 6,000 5,200 6,000 6,000 Cro.s %ral 5570 810 1,044 4,690 1,815 ),162 9,000 ,400 10,200 5,200 6,000 7,200 5,200 6,600 I,c00 net Econoac Value 627 623 83 3,592 1,292 2,531 7,876 4,595 9,096 4,521 J,316 6,509 4,621 5,,976 1,109 r%I . Future uith Project and w0 fruture without rrolects [-9 . Irrlgatd during gheciti [-K - INCIga'ted dusing Nat1 Ni ,, Not irtigasted. Futurø without under krrtgated rabt Jo*a not mean that a crop aay no bo irrigated. l£ almply ~eane that ti it te lririgated uater Is proitided fra. non-project a,,urce. isch as velig. OQ - 43 - TABLE 5 INDIA POCHAMPAD IRRIGATION PROJECT LX~IU~J.UI UL -~J~ -U / - Year Dam /b Works Channels Levelling Kharif Rabi Total 1970/", LO 1.0 _.5 1971/72 65 10.0 2.5 1 1 0 1 1972/73 76 10.0 2.6 2 2 0 2 1973/74 83 10.0 5.2 2 3 0 2 1974/75 94 .23.5 7.0 3 3 0 3 1975/76 99 47.0 8.2 4 4 0 4 1L7/o/// 1VU JO./ Q.- +J V 1Q77/7 Q Al. 7 17 A 1; 19 A 1? 1978/79 1000 le 27-0 23 21 10 31 1979/80 120.0 /d 36.0 /e 30 /e 26 20 46 1980/81 50.0 44 34 31 65 1981/82 64.0 58 44 41 85 1982/83 78.0 72 53 52 105 1983/84 92.0 86 62 63 125 1984/85 100.0 100 70 75 145 7W Dam construction proceeding according to schedule at appraisal. 7c Canal works to serve the IDA 100.000 ha project completed July 1978. (This does not include-canal lining or roads.) /d End of 5th Plan - July 1979. Te- Projection based upon rate attained in 1978/79. - 44- TABLE 6 INDIA POCHAMPAD IRRIGATION PROJECT Rate of Development Appraisal Report Completion Report Calendar Year Benefit Year Development Benefit Year Development 1971 1 -2.1 1073 3 7.7 2 0 1974 4 18.6 3 1-1 1975 5 35.1 4 1.6 1976 6 61.7 5 2.2 1977 7 91.5 6 2.9 1978 8 100.0 7 5.6 1979 8 14.0 1980 9 22.9 1981 10 34.5 1982 11 47.4 1983 12 60.9 1984 13 74.5 1985 14 81.4 1986 15 95.1 1987 16 98.7 1988 17 100.0 - 45 - TABLE 7 POCHAMPAD IRRIGATION PROJECT Benefits and Costs Streams Completion Report Appraisal Report Excluding Sunk Costs Including Sunk Costs Calendar Year Benefits Costs Benefits Costs Benefits Costs ---------------- --U-M-----(us M)------------------------ 1964 0.0 5.4 1965 0.0 18.6 1966 0.0u2. 1967 0.0 11.4 1969 0.0 2.1 1970 0-0 6A0 1971 -0.3 12.9 0.0 13.1 1972 0O3 16-9 0.2 13.8 0.2 13.8 1973 1.1 15.9 0.5 21.9 0.5 21.9 1974 2.8 18.0 0.7 19.1 0.7 19.1 1975 5.3 12.9 0.9 16.2 0.9 16.2 1976 8.2 2.4 1.2 16.8 1.2 16.8 1977 13.9 2.1 1.6 19.4 1.6 19.4 1978 15.2 0.3 3.1 16.1 3.1 16.1 1979 15.2 0.3 7.7 10.1 7.7 10.1 1980 15.2 0.3 12.6 11.2 12.6 11.2 1981 15.2 0.3 19.0 13.2 19.0 13.2 1982 15.2 0.3 26.1 10.2 26.1 10.2 1983 15.2 0.3 33.5 10. 3 33.5 1. 1984 15.2 0.3 41.0 10.3 41.0 10.3 185 15.2 0.3 44 . 10. 3/. R i3 1986 15.2 0.3 52.3 10.3 52.3 10.3 1987 152 0.3 5.3 0.4 54.2 0.4 1988 15.2 0.3 55.0 0.4 55.0 0.4 2021 15.2 0.3 55.0 0.4 55.0 0.4 - 46 - INDIA POCHAMPAD IRRIGATION PROJECT Farm Budgets 1 Ra 3 Ha 5 Ha items Fw0 FW Fwo tw two Fw iI l. 4 LL.L.J A. Luk \ L I a 71 J,J.;J4 1 77 lu J7V -4 7UJ ./ VOV Increment (Rs) - 2,539 - 7,797 - 12,695 Labor (days) 95 234 285 702 475 1,170 Increment (days) - 139 - 417 - 695 Incremental family labor /b - 139 - 265 - 75 Farm family earnings /c - 3,025 - 8,724 - 12,957 Project rent /d - 2,286 - 7,017 - 11,425 * Per Ha - 2,296 - 2,339 - 2,285 Annual charge for land development and water - 775 - 775 - 775 % of project rent - 34 - 33 - 34 /a Farm family labor costed at Rs 3-5 per day. 7- Based upon 550 man days of labor per family. 7-c Return to farm investment, labor and management before water charges. 77 Net financial return, less 10% of incremental financial return as allowance for management. - 47 - TABLE 9 INDIA POCHAMPAD IRRIGATION PROJECT Holdings and Area Operated by Size of Holding for Nizamabad and Karimnagar Districts % of Holdings % of Area Operated Size of Size Size Holdings Interval Cumulative Interval Cumulative 0-0.99 52.9 52.9 10.6 10.6 1.0-1.99 18.8 71.7 13.5 24.1 2.0-3.99 15.3 87.0 20.0 44.1 4.0-9.99 10..2 97.2 30.4 74.5 10-over 2.8 100.0 25.5 100.0  - 48 - ANNEX 1 Page 1 INDIA POCHAMPAD IRRIGATION PROJECT Commanu Area Development Component Taken over by the Andhra Pradesh Composite Project: Loan 1251-IN I. Background 1.1 The Command Area Development Department of Andhra Pradesh operates in the four project areas: NSP Right Canal Command 476,000 ha NSP Left Canal Command 388,000 ha Pochampad Command 100,000 ha Tungabhadra Command 240,000 ha The Secretary of Command Area Development, with head offices at Hyderabad, is responsible for overal airectlou. Each area is administerG Dy a separate Command Area Development Authority (CADA) under a senior administrator who is &~OjflJL-l- - - - - -SJ -L aD wOUt CO J T ~L LL LULI WI.LLI ULIACL "= aL L. ments and agencies. 1.2 Agricurtural extension in the command areas has been transferred from the Department of Agriculture to the CADAs and has been organized alone the lines envisaged by the appraisal (paras 4.29 and 5.14 of SAR for Loan 1251-IN). While the extension service concentrates on the established areas which came under irrigation before the Bank-assisted project, land development and field channel construction are taking place mainly in the downstream Bank-assisted areas. 1.3 CADA's principal role in on-farm development is the organization and implementation of land development below the outlet (chak). CADA prepares chak-wise topographic and soil surveys, and designs the network of field and drainage channels. In each chak, a CADA team, consisting of a leader, an ~ , a OLLVCC& a,, extensontL offi±.cer an,u a t.cdit LItL OffilAcCe and promotes integral land development. Group action is required as all the- fatrcn4a?- t-ha -InnI In.Qa tn ~ enat l 4nfaa l A~a en.To Ate- the great majority of land development is taking place in scattered patches instead of integral chaks. 1.4 Under the project, Land Development and Commercial Banks are to finance chak development. The credit officer of the CADA field team, who is seconded from the Department of Cooperation, prepares a credit survey in each chak, assessing the eligibility of the farmers for credit and their willingness to borrow. The credit plan, including individual loan applica- tions and consent letters of farmers agreeing to undertake the works on their field, is prepared with the help of the credit officers. - 49 - ANNEX 1 Page 2 1.5 After the plans and estimates are finalized, the land development staff informs the Revenue Department to update the revenue records and also informs the financing agency about the estimated cost of development per hectare and requests the financing agency to obtain loan applications and sanction loans to the farmers. The farmers eligible for a bank loan obtains land mortgages. Those who are ineligible are financed from a Special Loan Fund (SLF) set up by GOI and GOAP (75%), and ARDC (25%). Under the project, the credit programs of participating banks must also receive ARDC' s approval for rOfinance. ARDC refinance is pending the passage of legislation empower- ing CADA to undertake integral land development. 1 *f The areas where land development is taking place have beer su,divicipr into "circles" covering some 10,000 ha. Each circle has an Executive Engineer TT. Physical Progress and Institutional Credit 2.1 According to the appraisal, Command Area Development was to be undertaken for 72,000 ha over a three year period, i.e., to be completed by 1979. So far, about 26,500 ha are either completed or being implemented: Target Implementation ---------(ha)-------------% NSP Right Canal 16,000 0,1u 5u NSP Left Canal 16,000 4,200 26 Tungabhadra 6,400 900 14 72,000 26,500 _6 ?.2 Land development is either by manual labor or by machinery. Land levelling with machinery is contracted out to the AP Agroindustries Corporation. 2.3 Of the 26,500 ha so far under implementation, some 57% has been financed by the farmers themselves (the appraisal report assumed that credit would be required for all CAD work). Land levelling done by machine (15%) was financed by institutional credit. Of the 85% of the area developed by manual labor, about a third is being institutionally financed. 2.4 Survey and planning work is well ahead or implementation; design and cost estimates are ready for 79,700 ha (Table 2). However, the credit program is lagging far behind physical implementation and prOjeCt targets. Disbursements by participating banks to the end of September 1979 totalled ment for 13,300 ha has been approved by participating banks, but disbursements hAa n far only ranchpd 7-so ha. This indicates delaved utilization of the - 50 - ANNEX I Page 3 loans; more than half of the land developed with loans appears to be 2.6 Thus, the progress of CAD can be qnmmari7ecd sn fnllnws (Tablec 1-1) Activity Area Covered (ha) 1. Preparation of design and cost estimates by CADA 79,700 2. Under physical implementation 26,500 3. Approval of schemes by ARDC 23,600 4. Approval of areas by participating banks 13,300 . Disbursements by participating banks 7,500 2.7 Under the project, the physical target of 72,000 ha and the credit target were identical. It now appears that only about half of the farmers who develop their land take credit. Tus, if the creat target under e project is to be met, it may involve a physical program of about 150,000 ha. qnpch nn anlArapd m-avn e-n,,1A h. cooae i ,nCn eeomn rga and the IDA credit during the lining period (i.e., before completion of the project as reformulated). 2.8 Although behind appraisal estimates. Drozress attained is remark- able in view of: (i) lack of legislation enabling CADA to undertake integral chak development; (ii) problems in inducing farmers to borrow; and (iii) unreliable water supply (particularly in NSP, where the Land development is taking place at the tali end of the canal system). III. Proposed Legislation 3.1 Disbursement of the IDA credit for land development remains condi- tional on "evidence satisfactory to the bank ... that GOAP can at its ontion carry out on-farm development ... and recover the cost ... from the farmers 1/ The average cost of development is about Rs 3,000 ha (Table 4). When the farmer himself undertakes the work, the loan is disbursed in two equal installments. The first installment is received after CADA inspection of the work progress. After receiving the first installment the farmer undertakes to complete land levelling and shaping in about 30 days, under the supervision of the CADA officer. Then he receives the other half of the loan. Banks release funds to CADA for engineering LU ansupvasuL Un&Ls ILLCL 6a u tne chak is completed. A CRVA survey indicates that 30%-40% of the farmers who have received the first installment of loans have not completed the works to qualify for receiv- ing the second installment. - 51 - ANNEX 1 Page 4 concernd.a " 1/ La ,nd deveopentr, promonted by CADlA ws tr o bemnacso ncry for all farmers. This requires legislation to enable CADA to implement the wnrks without consent of the farmers., and to orovide for the recovery of costs. Draft legislation prepared by CADA in 1974 still has not been passed. 3.2 The principal purpose of the proposed legislation is to empower CADA to implement integral land development, which can at present be delayed up by farmers who are either ineligible for credit or unwilling to partici- pate in the program. The draft law provides for compulsory land development and for the recovery of the cost thereof through the repayment of "deemed loans" by the banking institutions. Since an assurance to this effect was given to the Bank, the credit is technically in default. 3.3 The passage of proposed legislation would permit CADA to step up integral land development. However, passage will not necessarily ease the prolsU Uf dLWeL LLULtdce LU Lak LLUL, Which sLW Lro:i. \i/ thC resistance of farmers to financing collective assets as individual loans; (ii) the Bank's inSistence to finance groups of farmers i~1n cha ;t of individual lending; and (iii) the linking of recovery of CADA overhead costs to individual finance. (i) Problems of Financing Collective Assets with Individual Loans 3.4 In order to take full advantage of the irrigation potential created, the irrigable land must be developed in contiguous blocks. The unit of land development is the area served by an individual outlet (chak), usually about 40 ha. Apart from land levelling, the principal feature of chak development is to provide direct watercourse access to each individual plot, thereby replacing field to field irrigation, and laying out the prerequisite physical infrastructure for water rotation. The layout of field and drainage channels in the chak forms a network which must be constructed by a community decISiOn. As long as field channels are a responsibility of individual farmers the gap overcome: farmers do not spontaneously organize themselves to lay a field channel system passing through many holdings, so-me belonga to fnars untallina or unable to participate in the community effort. 3.5 The distinction between private and common assets is at the crux of the credit Problem in integral chak development. In some cases, a farmer may get no benefit from improvements in the system, either because his exist- ing supply is adequate, or because more equitable distribution would reduce his supply. A farmer resists borrowing for an investment which benefits someone else, or has disbenefits to him personally. (ii) Insistence for Collective Credit 3.6 For each chak to be developed, CADA tries to enlist the farmers' cooperation for integral development. However, in most blocks, a proportion of farmers is either ineligible for credit, or unwilling to participate. it Joan Agemet 193cheuUe 1, paA - 52 - ANNEX 1 Pag 5 3.7 In NSP, for instance, about 80% of the farmers are usually ready to participate in the program, and half of these (40%) are willing to take up institutional credit. About 20% of the farmers in the chak do not parti- cipate: half because they are ineligible for loans and do not have the resources to undertake development, the other half because they are outright unwilling. Unwilling farmers are often absentee landlords or large farmers. Ineligible, but willing, farmers are either defaulters (with more than Rs 1,000 outstanding) or do not have clear title to their lands. 3.8 The banks have adopted a policy of approving individual credit only if a majority of farmers in the chak participate in the program, on the ground that only if the chak is developed integrally will the full benefits mate- rialize. (Originally, the hope was that 100% of farmers would take Loans.) While this policy is being modified in places, it hampers not only the credit program bout also the physical works. Often the majority of farmers prefer to do the work themselves. The rest, including the farmers who genuinely need credit, are deprived of it- chak develonment proceeds in natches or is bogged down altogether. (iii) Cost Recovery of Management Fees Through Loan Finance 3.9 Another communal investment item included in individual loans is CADA's 15% overhead charge for chak development. At the Bank's insistence, the Government agreed that "the participating farmers would pay part of the engineering overhead through a 15% surcharge of contract cost for CAD civil works." 3.10 The overhead charge is in principle applicable to farmers who do not borrow for land development. Farmers who want to borrow understandably argue that the overhead costs entailed in the survey 4-nd dea-ie panning benefit all farmers in the same manner irrespective of their present unwill- ingne~to tak I ~ ~ whyIJI.L L1,- $.S,LL -1 t-. pay for overhead costs? Also, there is clearly no political will to collect overhead charges from farmers who do the works wit-hou,t borrowing- and it is doubtful if practical measures can be devised to collect the fee. Thus, the alternative of recoverine CADA overheads as land revenue merits consideration, as does CADA's proposal to delete the overhead charge from the bank loans. 3.11 Some progress has been made to overcome the above problems. The banks have relaxed some of their restrictive policies and procedures. The bureaucratic categorization of ineligible farmers has been simplified, remov- ing some of the procedural obstacles to borrowing. Recently, the banks informally agreed to reduce the portion of farmers who must sign up for credit from 80% to 25% of the chak. 3.12 Also, GOAP has changed its policy with regard to field channel con- struction. Under the new policy, field channls~I ar ostutd l ovrmn - 53 - ANNEX 1 Page 6 cost to a 5 ha plot or the "survey number" whichever is smaller. 1/ In early 17/1, CAA took over spounuibility for construction of field channels in tne Bank areas. Since then, CADA has constructed field channels for about 70,000 LAO.~~ . - ,L O -.- I I. F-. I&& - - I) -I -I.JL .-AJ*J - ± - U 1.L1QL11.= - was transferred back to the Irrigation Department.) Construction of field rhannelIs hel ow the mri t reains thp fArmnorq' rpqnnonqibhiIityv 3.13 These policies ease the problem of sharing investment in common watercourses but do not eliminate it. It would be only one logical step further to make the cost of the entire field channel system to the individual plot a government expenditure. By now, the incremental financial outlay would be insignificant compared to the capital sunk into the irrigation system, the economic benefits of enhanced utilization of irrigation potential, and the justice of providing access to water for a great number of farmers at the tail end of the canals and chaks. 3.14 institutional financing as well as the task of inducing farmer enthusiasm for participation in chak development could be given a boost if the common investment Items (mainly the field and drainage channels) were to be financed at government cost and credit were to be confined to individual n,oCtion 1 -nA 1-o,1 1 ;- hi.A . * et . Aat rx vo *,. e a.- 4lA channel construction and for CADA overheads could be recovered as land revenue. Once the network is installed. individiia1 farmers wuld have an enhaned incentive to level their lands, with or without credit. Further, there would be no need for the banks to insist on lending to groups of farmers, since the benefits from the loans would no longer be dependent on a large enough number of farmers participating. 3.15 The resistance of the now unwilling farmers to permit the works would also be mitigated since the unwillingness relates more to taking loans than to the works. 3.16 Limiting credit to individual land levelling would eliminate the need for "deemed," i.e., compulsory loans. By limiting compulsory worKS to the network of field channels, the main objective of opening access to water to all farmers in the chak would be achieved. Compulsory land leVeALlg 1s a potentially wasteful exercise where farmers themselves are not eager to irrigate. 3.17 There is an emerging consnrn that the unreliability of irrigation water is the most important factor in farmers' reluctance to borrow to make the land fit for irrigation. Once the farmers are organized to use water effectively and equitably (and especially if water is rotated according to a familiar schedule), farmers become enthusiastic about CAD. They may well prefer to level their lands on their own, and even organize communal works. 1/ Each survey number represented a single holding some decades ago when the last surveys were taken. However, a survey number is by now usually subdivided into several plots. - 54 - ANNEX 1 Table I INDIA POCHAMPAD IRRIGATION PROJECT Andhra Pradesh Composite Project: Loan 1251-IN CADA Review: Progress of Implementation Land Development and Shaping (by method of implementation) R.C. L.C. Poch. Trne. Total % of Total ------------00 ha------------------- Completed or in progress 8.1 4.2 13.3 0.9 26.5 A. (i) Integral chaks 0.2 0.5 3.0 0.6 4.3 16 (ii) Individual holdings 7.9 3.7 10.3 0.3 22.2 84 B. (i) With loans 1.5 1.1 8.1 0.6 11.3 43 (ii) Without loans 6.6 3.1 5.2 0.3 15.2 57 C (i) With manual labor 7.9 3.5 10.2 0.8 22.4 85 Wt11) WI LI Wac'HAne WoL (all loans) 0.2 0.7 3.1 0.1 4.1 15 - 55 - ANNEX 1 Table 2 INDIA POCHAMPAD IRRIGATION PROJECT CA.DA Review Progress of T-Ia-anmenn~"x Survey Planning and Field Channel Construction R.C. L.C. Poch. Trng. Total ------ 000 ha----------------- Survey Work (i) Grid survey 19.7 24.5 53.5 6.8 104.5 (ii) Soil survey 15.0 6.2 24.2 5.5 50.9 (iii) Design & Cost Estimates 11.5 17.4 44.0 6.8 79.7 Field Channels (i) Excavation to survey number or 5 ha 17-3 12.1 18.5 3.0 50.0 (i) Drainage channels (at farmer's cost) 0.5 1.1 0.5 2.4 4.5 - 56 - ANNEX 1 Table 3 INDIA POCHAMPAD IRRIGATION PROJECT Andhra Pradesh Composite Project: Loan 1451-IN A - -- -- -- - --. ------------------------------------- - 4L6 -04 R.C. L.C. Poch. Trng. Total - -- '000 ha----------------- Scheme Approved by ARDC (ha) 5,300 2,700 10,100 5,500 23,600 Loan Applications Approved by Participating Banks hectares 1,500 4,300 8,400 1,100 15,300 Rs million 4.3 10.8 21.1 2.6 38.8 No. of farmers 1,300 3,100 6,000 700 11,100 Disbursements hectares 10 3I1nn ,30n A0 in nn Rs million 1.8 7.7 13.3 1.5 24.3 No. of farmers 1 100 9 9n ' A 400 7-500 - 57 - ANNEX 1 Table 4 INDIA DPHAMAD TMGTCATTON PROTECT Andhra Pradesh Composite Project: Loan 1251-IN CADA Review: Progress of Implementation Scale of Loan Finance Depending on Gradient of Land (Rs per ha) Gradient up to 1% 14 to 2 2% to 3% Bunding and levelling 1,140 1,OU 2,160 Drainage channel 140 140 140 Structures on draiuage cnannelt i Field channels and structures hi holdo * 130 230 330 Fine levelling 160 240 300 CADA angineering and supervision charges 250 350 440 Contingencies 90 110 140 Total per ha 2,100 2,950 3,70Q - 58 - ANNEX 1 Takle 5 INDIA POCHAMPAD IRRIGATION PROJECT And'-ra Pri-4ash Composit Prc-t: Loa" '251-IN Sri Ramasagar (Pochampad) Command Area Progress of Land Development '000 ha 1/170 0/10/7 T. PhvqioAl Progress Survev Work (ha) (i) Grid survey 45.6 53.5 (ii) Soil survey 26.8 24.2 (iii) Design & Cost Estimates 36.9 44.0 Field Channels (ha) (i) Excavation to survey number or 5 ha 13.9 18.5 (ii) Drainage channels (at former's cost) 0.2 0.5 (iii) Provision of internal field channels with structures n.a. n.a. Land vevelopment/Snhaping Total 11.9 13.3 A (1 Tr l hnka 2?0 3.0 (ii) Individual holdings 9.9 10.3 B. (i) With loans n.a. 8.1 (ii) Without loans n.a. 5.2 C. (i) With manual labor n.a. 10.2 (ii) With machine work (all loans) n.a. 3.1 II. Credit Progress as of 9/30/79 Area Amount No. of (ha) (Rs million) Farmers Scheme approved by ARDC 10,100 22.6 n.a. Loan application admitted by participating banks 47,600 118.9 n.a. Loan applications approved by AM~UUUL U.LUUZ6LU.,u - 59 - ANNEX 2 Page 1 INDIA P9CHAMPA TTATTON PRTECT Water Management in Command Areas of Andhra Pradesh, India 1/ by Syed Hashim Ali 1. In the Fifth Plan, the Government of India requested the State Governments to create separate ministries to deal with water utilization and Command Area Development and also to set up Command Area Development Author- ities (CADA) for selected major projects. Iity-seven Command Area Develop- ment Authorities were, therefore, created in 12 States covering 47 projects State which created a separate Ministry for Command Area Development. It also created four Command Area Develonment Authorities covering 1.3 million ha. 2. The CADAs in different states varied in the structure and were headed by officers of different seniority levels. One thing was, however, common to all these CADAs that everywhere it was erroneously presumed that all was well with the irrigation systems and the early emphasis was on systematic land development (SLD). There were many constraints in land development: (a) Absence of field channels: The Irrigation Department was responsible to bring water from the Dam to the outlet. The construction of field channels in the outlet command was the responsibility of the farmers. They were not organized enoughL to sur vey, design1, f..iance~ aLLL construct. tLhemULA. T.. therefore, became necessary to advance loans to all farmers also to finance common items like field channels and field drains with necessary structures. without which land devel- opment was of no use. To solve the problem of field channels, the Government of Andhra Pradesh decided that utilizable potential is created only when field channels are constructed at project cost up to the commanding point of each survey number or 5 ha limit, whichever is less. (b) Funding: It was found that many farmers were unable to get normal banking loans because of various legal and other it Quotea rrom a Paper preparea for rAv Expert ounsultation on Farm Water Management, Beltsville, Maryland, USA, May 13-15, 1980. - 60 - ANNEX 2 P age 2 difficulties and the construction of field channels and land development work was retarded very badly. The problem of credit was solved by creating a special fund for those who could not get normal banking loans. (c) Farmer reluctance: The main reason for farmers' reluctance was their lack of faith in the delivery of water to the lands as construction of field channels also did not ensure this. Rotational water supply among the farmers was taken up as S.n, & aga ua L IdIL[n in assured water supply as an experimental measure in two minors in the year 1978/79 Ant inn m4nve iQ o/8n As soon as water supply was assured, the reluctant farmers became active in develop- ine their lands. A conclusion can, threfnrp, ho Arawn that the creation of potential in the traditional sense leaves much to be desired and the gap between the so-called creation of potential and its utilization is really a gap between the water and the farmer. The moment this gap is closed, water is assured and a system of equitable distribution is enforced, the farmer takes all the initiative to develop the lands and start irrigated agriculture. H1. Constraints and Limitations in Operation and Maintenance of the Irrigation System 3. In most irrigation projects, the constraints and limitations are S.66.LL 1l LU Va*L1L lbbUCb. (a') Prniprr dpqian- Prna-a 4n TnA; - -i de--signed;- as an insurance against famine and drought and the intention was to extend water sunnlv to as large an arpa aq possible to supplement the rainfall and for protective irrigation for traditional subsistence agriculture. The projects, therefore, had very few control structures as they were meant for continuous flow without much interference from the operation staff. After the advent of high yielding varieties and with the introduction of irrigated dry (ID) or light irrigation in traditional irrigated wet (IW) or paddy areas, specially in South India, it has become necessary to change the original concepts of project design in close collaboration with agricultural scientists workin on SUoirlnLWaer relationships ana to maKe them capable of meeting the more exacting water require- ments of high yielding varieties. The inaeqac inth design of present irrigation systems is the primary con- straint in proper water management and moe attani4nn has to be paid for coordinated planning and design of modern projects. This would also need designing the minors to a pre-determined capacity separately for ID and wet to: - 61 - ANNEX 2 Page 3 (i) carry the peak requirements of crops when necessary; (ii) remain operable at much lower discharges when crop (iii) h-,aenmor cntrol sctu,,retoa enable intermittent supplies to prevent conversion of ID areas into wet. (b) Operation not treated as a professional task: Operation of canal system as a separate professional task is rela- tively unknown, as according to the existing procedures the Operation and Maintenance staff is not responsible for the delivery of the designed discharges at every outlet and not entrusted with the task of making water reach the individual farmer holdings. The emphasis of the operation and maintenance manuals, if any, is more on maintenance than on operation. The operation of a system has, therefore, to be treated as a separate professional task subject to the require- menl~ tsJ, o 54 a grcutu ral &LtL -I, - 45 A 1 *AZ - Operation and Maintenance staff should be extended up to outlet as at present. A major administrative reform is necessary for delinking the process of construction from the operation by making operation a part of the production process and not a continuation of the construction process. The Operation and Maintenance staff should be made an integral part of the multidisciplinary CADA to enable integrated water management in the main system as well as below the outlet, a process which would be necessary in all deficient systems for rationing water in the main system and equitable distribution of the avaliaDie water among the farmers below the outlet. At present, there A.* noV LCLkLL64 rlatin etee te wo within a short period in the absence of proper maintenance. Frnm the meager maintpnanp grants now availabla a very large percentage is taken over for the salaries of staff, etc.. and the amount actually available for maintenance is very small. The maintenance grant has to be increased substantially and used in accordance with the decision of the CADA. Farmer involvement in the maintenance of the Minor is also possible, after the introduction of Rotational Water Supply as each farmer gets water for a prescribed time. Any reduction in the capacity of the Minor hurts the farmer directly. An administrative and extension effort may enable them to organize themselves and supplement the efforts of Government. - 62 - AMMV Page 4 (d) Farmer investment: While inadeauacy in the design. operation and maintenance of the main system is a major constraint, the problems below the outlet are equally important. Half-hearted measures like construction of field channels without involving the farmers or expecting farmers to organize themselves and do this complex task will never be able to achieve results. The administrative effort and the field level coordination which is necessary for integrated water management above and below the outlet has been awfully underestimated. The viable unit for farmers' organization also requires considerable thought and could vary from project to project. For people to unite and work together there should be problems tO De solved for mutual benefit and the number should not be Rpr_nnrilv, t-hp mi,pqtinn w.hpth,pr fr rha fnr-mntinnr nfn Farmers' Association, the unit should be a village, a dis- tributary, a minor or an outlet also needs attention. In Andhra Pradesh, it was considered that the farmers below an outlet are eternally bound to the little irrigation life line and as their number is small and any failure of this life line makes a difference between prosperity and poverty and any joint effort improves water supply to all, the unit has to be a pipe (outlet) Committee. In deficient systems, formation of a Committee for the Minor may be useful so that the top enders and tail enders decide .about allocations, timings and rotations, etc. under the guidance and help of the Operation and Maintenance and extension staff. Three factors seem necessary to make the farmers' associa- ft4nn work: (i) The supply of water should be Just enough for the cropping pattern of the area. Any non-cooperation, inefficiency or indiscipline should result in a shortage. A scarcity oriented system will be an incentive for joint action. Any excess supply will reduce its need. (ii) The Farmers' Association should have some authority to implement its decisions. (iii) The backing, guidance and administrative and technical help from the Command Area Development Authority should be available to the Farmers' Association. III. Approach and Solutions Applied to Introduce New Water Management Techniaues to the Fnrmpr 4. For the introduction of an equitable Water Supply, the following elements seem essential: - 63 - ANNEX 2 Page 5 (a) Engineering component: (i) Ensuring the supply of designed flows in the minor and at each outlet. (ii) Developing a proper distribution network of field channels up to each holding in the outlet command. (iii) Working out irrigation schedules allocating a time and day for flow of water to each individual holding to ensure equal quantities of water per unit area. U- &~ A-U- 'UDL ~ Lmu t was found that a" t Le minors selected for this work had to be upgraded by con- s t ru t4 A- ;~ - ..r . de, -e athe head of thea minor, constructing new drop/control structures or restoring them to their orivinal tnnditinn and annatructina contrnl structures and measuring devices for every outlet. Full supply level indicators had to be constructed on the minors to ensure that the full supply level was maintained. (b) Canal operation component: After improving the minor two levels of rotation are necessary: Ci) Rotation between different zones within an outlet command to be irrigated according to specified schedules; and (ii) Rotation between farmers within each such zone. (c) Extension component: A massive extension work is necessary to convince the fArmer rhAt a cpriirp wrr nupply helps in achieving the following: (i) Ensures equality to all the farmers in the outlet com- mand irrespective of the location or size of the hold- ing and the socio-economic level of the farmers. (ii) Provides equal volume of water to each acre irrespec- tive of the location by allocating a flow-time based on calculations. (iii) Helps the farmers to know the days and actual periods of irrigation water allotted to their fields in advance. inputs as security of irrigation to the farmers is (v) Enables the farmer to feel that irrigation water is his personal property and to motivate him to use his share to the best of his interest. - 64 - A AKT V ') Page 6 (vi) Brings about discipline in water use and eliminates unauthorized or illegal irrigation. (vii) Creates the awareness that any diminution of water supply in the minor or any inefficient management by anyone under the outlet directly affects their own interest. (d) Farmers' Participation: Field channels constructed without consulting farmers were obliterated and the structures destroyed in some cases. Cases of -iotia- and murders for watr are no uncommon. All wark connected wir tne intro- duction of new methods and disciplines requires very close for outlets and minors backed by administrative, extension and legal ainnnrt may he hl tn funrin wll nrovided conditions require effective joint action. IV. Institutional Framework Required to Implement the New Techniques 5. The Command Area Development Authorities created in India may be considered the right type of organization to deal with the complex multi- disciplinary work of irrigation utilization. For the implementation of the new techniques, the following measures seem necessary. (i) Operation and Maintenance staff to be an integral part of the multidisciplinary authority to function closely with agricultural extension staff. (ii) Allocation of adequate funds for upgrading minors for ri4 t- rs r;n f O1A 4"nl u1 t ec holding. (iv) Allocation of water to each farmer in each zone. (v) Selection of group leaders in each zone. (vi) Selection of the outlet leader from the group leaders who form the outlet committee. (vii) Appointment of a minor committee if it is not possible to provide the design discharge at every outlet in deficient systems. \v L LJ Ceab in maiutenance grant ano involving farmers LO supplement the maintenance work of the minor. Cix) Administrative and technical support to the committees - 65 - ANNEX 2 Page 7 uLUSSARY U TLEDR 1. AP - State of Andhra Pradesh in India. 2. Command Area Development - A multidisciplinary Authority for deal- Authority (CADA) in2 with the complex problems of Irri- gation utilization by whatever name it is called in different projects and countries. 3. Field Channels - Farm ditches/watercourses of normally one cusec capacity. 4. ID - Irrigated Dry - a term used in.Andhra Pradesh for light irrigated crops other than paddy. 5. 1W - Irrigated Wet - a term used for heavy A. - irnr - Teri-v~i~ nrnAr?p1nATvry artilc e-f i to 10 cusecs capacity from which out- lets deliver the water to the farmers. 7. Outlet - A turn out of normally one cusec capa- city from which water is taken to farmers' holding by field channels. It is called "Pipe" in Andhra Pradesh. 8. Operation and - Operation and Maintenance of Irrigation Maintenance (O&M) system. 9. RWS - Rotational Water Supply between farmers Warabandi. 10. SLD - On Farm Development of the entire out- let command treating it as a single unit for construction of field channels field drains and land shaping. 11. Survey Number - The Number given to a holding in the village record. N'o NAG A D I L A B A D D I S T R I C T INDIA POCHAMPAD IRRIGATION 1PROJECT fe c nner 12h L3Bhettipet Ch,rww Armor gundam N I Z A A B A D - D I S T I C "T -KARI MN AGA DI S T R IC T s y* MANAIA DAM -S MP ISBASE Oý-0 31R. 911W A R\ A N G A L D l S T R I C T -- D rury Con~ : C~ IN- Existng irrigoted oro, STAGE -I D A N,.i.c • STAGE D Proje,t \OO -- Existing Goduarn somth conaI - Extendd Godov1r ca~ l IDI - STACE E. Goda outh c~4e - Wmrongol I-- - oin road. Fo~s P -eie m4e 1~g Ground lo 2 M ,1,r,iD R1 .0 ,o 3