India - Third National Agricultural Extension Project

Document of The World Bank FOR OFFICIAL USE ONLY C ,o?. K> '? ' JzyA Report No. 5794a-IN STAFF APPRAISAL REPORT INDIA THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT December 19, 1986 Regional Projects Department South Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its rontents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS FISCAL YEAR US$ 1 = Rupees (Rs) 13.0 April 1 to March 31 WEIGHTS AND MEASURES 1 hectare (ha) = (10.000 m2) = 2.471 acres 1 kilogram (kg) = 2.205 pounds 1 kilometer (km) = 0.6214 miles 1 meter (m) = 3.281 feet 1 square kilometer (sq km) = 0.386 square miles ACRONYMS AND ABBREVIATIONS AAU Assam Agricultural University ADA Assistant Director of Agriculture ADO Agricultural Development Officer AEO Agricultural Extension Officer ADO Agricultural Development Officer CDD Community Development Department DA Director of Agriculture DAO District Agricultural Officer DDA Deputy Director of Agriculture DEA Department of Economic Affairs DOA Department of Agriculture DOE Directorate of Extension FAO/CP Food and Agriculture Organization/Cooperative Program GOA Government of Assam GOHP Government of Himachal Pradesh GOUP Government of Uttar Pradesh GOI Government of India IDA International Development Association JDA Joint Director of Agriculture KVK Xrishi Vigyan Kendra MOA Ministry of Agriculture M&E Monitoring and Evaluation MT Metric Ton NAEP National Agricultural Extension Project NARP National Agricultural Research Project PCR Project Completion Report PWD Public Works Department SAU State Agricultural University/Universities SDAEO Subdivisonal Agricultural Extension Officer SMS Subject Hatter Specialist SDRs Special Drawing Rights SSP Special Subproject T&V Training and Visit System VEW Village Extension Worker VLW Village Level Worker CROPPING SEASONS Uttar Pradesh Assam Kharif - June to September Sali - June to November Rabi - October to February Boro - November to April Summer - March to Kay Ahu - March to June Himachal Pradesh Kharif - May to September Rabi - October to February Summer - March to May  FOR OFMICL USE ONLY STAFF APPRAISAL REPORT INDIA THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT Table of Contents Page No. I. BACKGROUND ................................................. 1 Introduction ............................................ 1 Agriculture in India .................................... 1 Agricultural Extension in India ......................... 3 Experience with Past Lending ............................ 4 Problems ............................................ 5 Achievements ........................................ 6 Performance of Assam Agricultural Development Project .......................................... 9 Assam Extension Service Development .............. 10 Assam Agricultural Research ...................... 11 Irrigation Component .................... 12 Performance of National Agricultural Extension Project (NAEP I) ..................... 13 The Second National Agricultural Extension Project (NAEP II) ..................... 14 Summary of Main Tessons Learned ..................... 14 II. PROJECT OBJECTIVES AND RATIONALE ........................... 16 Administrative Conslidation and Institutional Development ........................................... 16 Quality Improvement ..................................... 17 Expansion and Broadening of Extension Coverage .......... 17 Strengthening Linkages Between Extension and Research... 17 The report is based on the findings of appraisal missions to India in October 1984 and March 1985. Mission members included: Messrs. M. C. Macklin (Agriculturalist. Mission Leader) G. Galgali (New Delhi Office) and K. Sreekantiah (New Delhi Office) who appraised the Himachal Pradesh. Uttar Pradesh, Assam, and special subproject components, and Mr. R. Slade, who appraised the state monitoring and evaluation components. 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.  Table of Contents (continuation) Page No. III. THE PROWJECT .................................................... 18 A. General ............................................. 18 B. The Project Area ................. .................. 18 Uttar Pradesh ................................... 18 Assam ....a................a.*......a...... *................ 21 Himachal Pradesh ................ ................ 22 C. Detailed Features . ................................... 23 Additional Staff . . 24 Civil Works . . 25 Vehicles and Equipment ........... ............ 25 Training ........................................ 26 Incremental Operating Expenses . . 26 Uttar Pradesh Subproject ........... ............. 27 Assam Subproject ................ ................ 29 Himachal Pradesh Subproject . . 31 Special Subprojects (SSP) .. 32 Mid-Term Review . . 35 IV. COST ESTIMATES AND FINANCES ................................ 35 A. Cost Estimates . . .................................... 35 B. Financing ........................................... 38 C. Procurement . . ........................,., ... 38 D. Disbursements. Accounts and Audit ................... 40 V. ORGANIZATION AND MANAGEMENT ................................ 42 A. General .. 42 B. Project Management ................... 43 State Subprojects .................. 43 Special Subprojects ............................ 43 C. State Extension Organization ........................ 44 D. Monitoring and Evaluation . . 46 VI. BENEFITS AND RISKS ......................................... 47 A. Benefits of Improved Extension . . 47 B. Risks ............................................... 49 Employment and Poverty Impact ................... 51 Impact on the Environment . . 51 VII. AGREEMENTS AND UNDERSTANDINGS REACHED AND RECOMMENDATIONS.. 52  Table of Contents (continuation) Page No. ANNEES 1. Summary Data on State Subprojects .......................... 57 2. Summary Project Costs: Table 1 - NAEP III - Summary Accounts by Ye ar 59 Table 2 - NAEP III - Project Cost Sur ar. 59 Table 3 - Uttar Pradesh - Summary Accounts by Yea r 60 Table 4 - Uttar Pradesh - Project Cost Sua ary 60 Table 5 - Assam - Summary Accounts by Ye ar 61 Table 6 - Assam - Project Coat Summary ,,. , .... 61 Table 5 - Himachal Pradesh - Summary Accounts by Year . 62 Table 6 - Himachal Pradesh - Project Cost Summary 62 3. Schedule of Estimated Disbursements ..................... 63 Disbursement Profile ... a....... *....... s ..........,.......... . 64 4. Implementation Schedlule for State Subprojects . . 65 5. Special Subprojects Received under NAEP I .. 67 6. Uttar Pradesh: Special Evaluation Study. 69 7. Crop Calendar (Illustrative of Conditions in Uttar Pradesh) ..... ................. 73 8. Selected Documents Available on Project File .............. 75 ORGANIZATIONAL CHARTS Chart No. 27512 Assam Subproject Proposed Organizational Plan of the Department of Agriculture Extension Service) . . ........... 77 Chart No. 26609 Assam Subproject Linkages Between Extension and Research . , 78 Chart No. 27510 Uttar Pradesh Subproject Proposed Organizational Plan of the Department of Agriculture (Extension Service) ... .......... 79 Chart No. 27511 Uttar Pradesh Subproject Existing Organization of the Department of Agriculture ......... . ............ 80 Chart No. 27513 Uttar Pradesh Subproject Linkages between Extension and Research . ......... . ................ 81  Table of Contents (continuation) Page No. Chart No. 26806 Hi-achal Pradesh Subproject Proposed Extension Organization .... ........... 82 Chart No. 26805 Rimachal Pradesh Subproject Linkages between Extension and Research ....... 83 MAPS IBRD No. 19057R - India IBRD No. 19060 - Uttar Pradesh IBRD No. 19058 - Assam IBRD No. 19059 - Himachal Pradesh PROJECT FILE C.1 Itemized in Annex 8 and available in printed form.  INDIA THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiaries: The States of Assam. Himachal Pradesh and Uttar Pradesh, and the Ministry of Agriculture. Government of India (GOI). Amount: SDR 71.70 million (US$85 million equivalant). Terms: Standard. On-Lending Terms: From GOI to the State Governments of Assam, Himachal Pradesh and Uttar Pradesh (UP). as part of Central Government assistance to state development projects on terms and conditions applicable at the time. GOI will bear the foreign exchange risk. Project Description: The project would (a) introduce the Training and Visit (T&V) system of agricultural extension in the State of Himachal Pradesh and in Eastern Uttar Pradesh; (b) further strengthen the reorganized agricultural extension system and the linkages between extension and resarch introduced in the State of Assam under the Assam Agricultural Development Project (Credit 728-IN of June 30. 1977); and (c) assist in the implementation of special subp:ojects on extension related activities at the central and state level through the replenishment of the Special Subproject Fund established in the Ministry of Agriculture under NAEP I (Credit 1523-IN of December 12. 1984). There are no major project risks. although a number of administrative problems that are frequently encountered in extension projects, such as pressure on extension staff to perform non-extension duties and inadequate linkage betweeen extension and research may impede implementation. Such risks would be mitigated under the project because all incremental extension staff would work exclusively on extension within the Department of Agriculture (DOA) and through the establisbment of formal committees linking research and extension institutions. Furthermore, the provision made for strong monitoring and evaluation units in each state, the proposed mid-term review and the important role DOE would play in project monitoring and coordination would ensure constant review of implementation problems that might arise.  - ii - ESTIMATED COST: 1/ USS Million Local Foreign Total State Subprojects Incremental Staff 24.7 - 24.7 Civil Works 26.6 1.4 28.0 Vehicles and Equipment 4.5 0.9 5.4 Incremental Operating Costs 12.2 0.3 12.5 Training 3.8 - 3.8 Special Subprojects (SSP) 40.2 2.1 42.3 Subtotal 112.0 4.7 116.7 Physical Contingencies 2.2 0.1 2.3 Price Contingencies 20.5 0.7 21.2 Subtotal 22.7 0.8 23.5 Total 134.7 5.5 140.2 FINANCING PLAN: Project Financing (U1S$ Million) Sub-project GOI/States IDA Total Uttar Pradesh (GOHP) 24.1 36.3 60.4 Himachal Pradesh (GOUP) 7.8 14.8 22.6 Assam (GOA) 5.9 9.0 14.9 Special Sub-projects/GOI 17.4 24.9 42.3 Total 55.2 85.0 140.2 Percentage 40.0 60.0 100.0 ESTIMATED DISBURSEMENTS: 2/ (US$ Million) FY87 FY88 FY89 FY90 FY91 FY92 FY93 Annual 0.8 5.6 8.6 18.0 20.0 19.0 13.0 Cumulative 0.8 6.4 15.0 33.0 53.0 72.0 85.0 1/ Including taxes and duties of USS1.9 million equivalent and with figures rounded off. 2/ According to IDA Fiscal Year.  INDIA THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT I. BACKGROUND Introduction 1.01 The proposed Third National Agricultural Extension Project (NAEP III) would be the fifteenth in a series of IDA-assisted projects designed to reor- ganize and strengthen agricultural extension in India. This chapter reviews the relevance of such assistance to the Bank's agricultural program in India, experience with some of these projects, main problems encountered during implementation. achievements, and lessons learned. The Government of India (GOI) requested IDA to provide assistance for the establishment of professional extension services in the States of Himachal Pradesh and Uttar Pradesh and follow-up assistance to the State of Assam, which completed its first phase project on March 31. 1985. Uttar Praderh, the fifteenth of seventeen major states in India 1/ to request IDA assistance for reform of agricultural exten- sion, has only now come forward after several years of discussion with the Bank on its participation. GOI also requested provision of additional funds for special subprojects to replenish that fund initially established under the First National Agricultural Extension Project (NAEP I. Cr. 1523-IN), and which will be fully committed by late 1987. Agriculture in India 1.02 Agriculture is the dcminant sector of the Indian economy and con- tributes about 37% of the gross national product. It engages about two thirds of the labor force and agricultural production accounts for 24% of the country's merchandise exports. 1.03 The Bank's agricultural program in India during the past 15 years has aimed at assisting India to achieve self-sufficiency in foodgrains and increase farm incomes in an equitable manner. The Bank is actively involved in some 60 agricultural projects representing large investments in infrastructure and expanded agricultural services. With substantive increases in foodgrains. especially wheat production in recent years. India has attained effective self-sufficiency despite an annual population growth rate of 2.2%. although a shortage of edible oils persists. Yield increases of edible oilseeds have not been significant and recent increases in production are mainly due to the extension of areas under cultivation. Nevertheless, further efforts to improve 1/ With participation of Himactal Pradesh and the Punjab as a special sub- project under the proposed project all seventeen major states would have participated in IDA-assisted extension project. ,. -  -2- agricultural productivity are needed to meet future demand increases. The rate of overall crop yield increases has been falling and agriculture has stagnated in some parts of the country. The projections of demand for foodgrains by the terminal year of the Seventh Five Year Plan (1990) call for annual foodgrain production of 168-170 million MT. compared with 1984-85 production of about 150 million MT. This represents an annual growth rate of about 2.7Z. compared with a growth rate of 2.5X for the period 1967-68 to 1981-82. A number of factors point to the increasing difficulties which India will have to overcome to achieve this ambitious target. 1.04 Almost 90% of the increase in foodgrain production in the post-Green Revolution period came from wheat and rice, which together cover only about half the total area under food crops, mainly the relatively better endowed. more homogeneous regions in the States of Punjab. Haryana, western Uttar Pradesh, and the delta regions of Andhra Pradesh and Tamil Nadu. These are also predominantly irrigated areas. Future yield increases in both wheat and rice, the main sources of past growth. will be more difficult to achieve than past yield increases and are likely to give less impressive results. In the past, the increase came mostly from the adoption of high-yielding variety fertilizer-irrigation technology by farmers who were capable of taking the limited risks associated with adoption of such new technology. Such areas are now beginning to experience second generation problems, such as increasing pest and disease problems and micro-nutrient deficiencies. Thus, sustained increases in yields in wheat and rice will depend in part on the development and adoption of even more sophisticated technology. 1.05 Irrigation systems now being developed, and those most likely to be developed in the future, are mainly in the southern regions where cropping intensities in irrigated areas have been low. Production efficiency in these areas can be achieved through development of better managed and operated sys- tems coupled with improved farm management relevant to a particular system. Such techniques can only be generated through appropriate research. The poten- tial for wheat and rice production in the eastern region is large. but has generally lagged through poor farmer servicing and because the specific tech- nology requirements of heterogenous farm systems have not been supported by adequate research. Though there is considerable scope for increasing produc- tion in irrigated areas, most of furure 4-presse in foodgrain production will have to come from rainfed areas, from oilseeds and pulses. and from sorghum and millets which are the staple diet of the rural poor. These rainfed areas are more ecologically diverse and present greater problems, both in developing the technology needed for the many agroecological situations and in its transfer to farmers. 1.06 The above underscores the need for continuing improvements in agricul- tural extension and associated research services in helping India meet future challenges facing agriculture. Improving extension services remains one of the relatively low-cost means of increasing agricultural productivity, making more effective use of past investments in infrastructure and research, and reaching all farmers. particularly the smaller ones.  -3- Agricultural Extension in India 1.07 Soon after independence. GOI began sponsoring a number of programs designed to meet the need for more effective. country-wide agricultural development: the Community Development Program in 1952. National Extension Service Blocks in 1953. Intensive Agricultural District Program in 1960. Inten- sive Agricultural Area Programs in 1963-64. and the Small and Marginal Farmers Development Program in 1969-70. Despite their proliferation, these programs covered a small proportion of farmers, generally the larger ones. Recognizing that a different approach was required to achieve a more broadly based increace in agricultural output and in response to changing rural and administrative conditions, GOI, with IDA assistance, introduced an extension approach tried in several countries before India and generally known as the "training and visit" system (T&V). It was first tried in India through pilot projects in the Rajas- than Canal Command Area Development Project (Cr. 502-IN. 1974) and in the Chambal Command Area Development Project in Madhya Pradesh (Cr. 562-IN. 1975). It was subsequently adopted in various states commencing in 1977. The methodology, organization, and components financed under this system are described in Project File Cl item 1. The T&V system aims at increasing farm productivity and farmers' income by simultaneously addressing constraints impeding the transfer of new agricultural technology from research to the farmer and the feedback from farmers that must orient research and other government organizations to actual farm problems. Some of the changes intro- duced are organizational (single line of control, exclusive responsibility). others are operational (fixed, regular contact between farmers and extension workers. coverage, mobility. and housing in the field), and still others relate to the linkage between research and extension (regular meetings and workshops of extension and research staff, systematic feedback of farmers' problems. and responses by research). 1.08 Under the system of multi-purpose field workers, which the reformed extens-:on system has replaced, extension personnel were burdened with substan- tial administrative work and such non-extension duties as input delivery and administration of various subsidized schemes, which tended to dissipate exten- sion efforts in many uncoordinated directions and divert attention and resour- ces from the need to reform the main line extension agency. Staffing was usually insufficient to adequately cover the farming community. Field workers lacked mobility to reach farmers systematically and regularly, had practically no training in relevant technology, and saw limited prospects for advancement. Most extension personnel had low status, low pay, and poor morale. In addi- tion, there was virtually no linkage between extension and research. Without this linkage, it is difficult to justify the considerable investment being made in agricultural research. Improved technology is of ''ttle benefit if it cannot be made available to farmers and, conversely, it is difficult to develop useful research unless there is sound feedback from farm to research--both roles for extension. 1.09 The Bank's experience over the past ten years with India's considerable effort to improve agricultural extension and research has confirmed what was recognized when the T&V approach was first being introduced on a larger scale:  -4- in a state, with a well-entrenched bureaucracy, institutionsl change takes time and causes many sensitive administrative problems that require dynamic and committed leadership to resolve expeditiously. The seventeen states. including those which under the proposed project would have introduced improved agricul- tural extension with IDA assistance. together will eventually reach about 90% of Indials farm families. In these states, there are to be some 73,500 Village Extension Workers (VEWs). 8.500 Agricultural Extension Officers (AEOs), 4.000 Subject Matter Specialists (SMSs), 1.100 Subdivision Agricultural Extension Officers (SDAEO). 60 Assistant SDAEOs. 410 District Agricultural Officers (DAO) and Assistant DAOs. and 100 Zonal Joint Directors and Additional Directors of Agriculture (Extension). However. the extension service represents only a small part of the total civil service in any state (e.g.. in Karnataka only about 1%) but. because of the close and often unique field relationship with farmers (which represent the vast majority of state's population). agricultural extension is particularly vulnerable to outside pressures for purely non-technical reasons. The new system also calls for major attitudinal changes on the part of extension staff, farmers. agricultural researchers and govern- ment officials, both within and outside of DOA. Given these circumstances and as IDA's experience with these projects confirms, firm commitment at government level and strong departmental management are central to successful agricultural extension. Staff Appraisal Reports (NAEP I, No. 4983-IN. August 8. 1984. and NAEP II. No. 5254-IN. MatcL 3, 1985) include detailed reviews of the particular problems and achievements of all individual state projects assisted by IDA. This report will confine itself to a summary of problems and achievements and make particular review of the performance of the Assam Agricultural Develop- ment Project (Cr. 728-IN), whose second phase is included under the proposed project, and of the progress so far made under NAEP I (Cr. 1569-IN), which became effective April 12. 1985. Experience with Past Lending 1.10 Significant prcject implementation experience has been gained in 14 Indian states assisted by IDA under 14 credits (totalling $200 million). Whilst the range and sererity of problems encountered and the extent of achievements have varied considerably between states, four (West Bengal. Cr. 690-IN; Bihar. Cr. 761-IN; Madhya Pradesh Phase II. Cr. 1138-IN; and Andhra Pradesh, Cr. 1129-IN) of the 14 can be classifiea as having performed poorly and to have severe problems. These are discussed more fully in para 1.12. A common feature that deserves to be stressed is that the most sensitive and intransigent problems have resulted from indifferent management, frequently accompanied by a lack of government commitment. In no case has the validity of the central objective "aincreasing agricultural production through introduction of professional extension linked with appropriate research and manpower development and designed to reach the mass of small farmers" been questioned. Similarly, the T&V extension methodology has been accepted as an appropriate and workable system by all the participating states, whether or not they have performed well. 1.11 Project Completion Reports (PCRs) have been prepared for: Rajasthan Agricultural Extension and Research Project (Cr- 137-TN). Orissa Agricultural  -5- Development Project (Cr. 682-IN), and Madhya Pradesh Agricultural Extension and Research Project (Cr. 712-IN). for the states of Gujarat. Haryana and Karnataka that were included under the Composite Agricultural Eztension Project (Cr. 862-IN) and for Assam Agricultural Development Project (Cr. 728-IN). Project Performance Audits have been ccupleted for Rajasthan Agricultural Eztension and Research Project (Cr. 737-IN). Orissa Agricultural Development Project (Cr. 682-IN). Madhya Pradesh-Extension and Research Project (Cr. 712-IN). Assam Agricultural Development Project (Cr. 728-IN). Composite Agricultural Eztension Project (Cr. 862-IN). In addition to the above. a great deal of data has been generated by state M&E units. The following paragraphs summarize the main findings and some common features of these reports. Problems 1.12 Problems commonly experienced in agricultural extension projects. especially during the early years of implementation, have included: (a) Involvement of extension staff in non-extension activities; (b) Excessive reporting and statistical workload on field staff; (c) Insufficient location specific research-generated te-hnology. espe- cially for rainfed and tribal areas; (d) Poor feedback from field to research; Ce) Weak inter-ministerial and inter-departmental coordination; Cf) Transportation shortages and restrictions; (g) Slow start up of M&E; (h) Late submission of audited financial reports; (i) Weak technical supervision and shortages of appropriately trained subject matter specialists; (j) Slow provision of housing for field staff; and (k) Slow use of training funds. In addition, the expansion of village level non-extension activities, since the introduction of T&V extension, has been unexpected and under-estimated, leaving Panchayat (local government) staff unable to cope with the increased work load and aggravating pressures on extension workers to assist in non-extension work. The above problems have been continuously addressed during project supervision and most have diminished over time. or at least kept to manageable proportions. In the particular cases of the poor performing states (pars 1.10), weak manage- ment--coupled vith a lack of government support in Bihar (Cr. 761-IN) -led to inadequate budgetary provision and a failure to employ critical staff and to  -6- construct the planned civil works. Similarly. in West Bengal (Cr. 690-IN). persistent administrative. political. and budgetary constraints, worsened by legal disputes with labor unions over recruitment and staff promotion issues. stifled the implementation efforts of DOA. Nerertheless. it has been observed that, an those districts of West Bangal where a reasonable extension structure was put in place, M&E surveys indicated that extension functioned as well and. in some aspects. better than in other states classified as good performers. Both credits 690-IN and 761-IN are expected to close 50Z undisbursed. In the cases of the ongoing problem projects. both Andhra Pradesh (Cr. 1219-IN) and Madhya Pradesh (Cr. 1138-IN) are suffering from similar sets of difficulties: (a) Inadequate budgetary provisions; (b) Failure to recruit or transfer staff; (c) Slow civil works construction; (d) Poor supervision of field staff; (e) Lethargic project management; and (f) Resulting slow rate of credit disbursement. Achievements 1.13 While considerable scope remains for improving the design and effec- tiveness of the agricultural extension system once the new structure is in place. the Bank's experience in India to date has been positive overall. The new system has now stood the test of nine years of implementation in several states; there is growing evidence of its favorable impact; and it has received wide support from the farming community and state DOAs. Although achievements have been mixed, experience with these projects show that there is a lead role for a technical extension service, that the system adopted for technology transfer is fundamentally sound. and that the impact on production. even in the short term, can be substantial. Many of the changes introduced are now generally recognized as worthwhile: (a) Fixed visit schedules; (b) Regular meetings of extension field workers and supervising officers and specialists; (c) Regular in-service training of extension staff; (d) Use of extension staff in helping to identify research priorities and in advising research on farmers needs and reactions to research recom- mendations; and (e) A single line of co mand and exclusive DOA responsibility for the extension service.  -7- In several states where a strong technical extension service has developed, it is able to identify constraints at the farm level and to exert pressure for improved performance accountability in its own operations and on other support services. In particular. the extension service is not only becoming increas- ingly aware of its own need to improve timeliness and quality of the technology it transfers to farmers. but is also inducing the research support network to reorient its research priorities. The Project Performance Audit Report for the Rajasthan Agricultural Extension and Research Project (Cr. 737-IN) says, "The project has demonstrated that the T&V system of agricultural extension is an effective way of managing a large number of staff to spread innovations and of providing disciplined review of technical messages. The project has also clearly stimulated a demand for extension services from many farmers, it brought discipline to the overview and formulation of technical messages and to the focussing of agricultural research efforts." 1/ PCRs for Madhya Pradesh (Cr. 712-IN). Orissa (Cr. 682-IN), and the Composite Agricultural Extension Project (Cr. 862-IN) stress the considerable advances made in institutional development of extension services and establishment of links with research. 1.14 The first wave of M&E surveys were designed to measure the estab- lishment and functioning of the newly introduced extension system. This has been achieved in participating states, and greater emphasis is now placed upon assessing the impact of reformed extension on technology adoption and produc- tion. Whilst there is considerable variability between states, statistically analyzed results summarized for seven states 2/ show that 85% of contact farmers are visited at least once per month by VEW. Whilst some bias in favor of visits to larger farms is indicated, the size of this bias is very small. Yields on farms that rely on the VEW as the main source of technological infor- mation are higher than on farms that rely mainly on other sources of informa- tion. Although the other sources (radio, other farmers, etc.) do not differ greatly from one another in terms of their effect on yields, any source of information appears to be better than receiving no advice at all. Yield indices for wheat and rice 3/ for farmers receiving VEW advice are 114.5; for farmers relying mainly on advice from other farmers. 99.1; and for farmers receiving no advice at all, 86.1; these values suggest a 15-28% yield advantage 1/ Project Performance Audit Report (Cr. 737-IN, November 1984). 2/ G. Feder, R. Slade and A. Sunderam, The Training and Visit Extension Sys- tem: An Analysis of Operations and Effects (Staff Working Paper No. 719, 1985). 3/ Index of 100% = state average yields weighted according to irrigated and rainfed conditions and contact and non-contact status.  -8- from VEW presence. 1/ Other less rigorously analyzed M&E data demonstrate a positive relationship between the frequency of VEW visits and technology adop- tion and yield. In Haryana. 73% of farmers visited once a month applied the recommended basal fertilizer to rice. compared to 33Z for farmers not visited. In Manarashtra, 511 of farmers visited twice a month used the pesticide recom- mended for wheat. as compared to 16% for farmers not visited by VEW. In 1983-84, Gujarat surveys indicated that yields of groundnut. millet. and rice. all increased as the frequency of VEW visits increased. 1.15 While the above data provides encouraging indicators of a positive impact of T&V extension on agricultural production. extension effect is not separated from the effects of other influences on production. such as input use, soil fertility. input supply problems and prices. etc. Until now. such disaggregation has only been achieved under a special study conducted by the World Bank in association with the Haryana Agricultural University. Results from the study 2/ indicate that the T&V extension system was more successful in delivering information to farmers than the traditional system. that it achieved significantly higher rates of direct contact with farmers. and that rates of knowledge diffusion for all wheat practices and for some paddy practices were higher than comparable rates under the former system. The study showed that, in the case of wheat, a yield increase of about 2X per annum over the first four years of the Phase I project, was directly attributable to extension and independent of the use of farm inputs and other complicating factors. Further- more, the study concluded that the increased incremental wheat output. attributable to extension is. alone, sufficient to generate an internal rate of return in excess of 15% with a high degree of confidence. 1.16 State production statistics also provide positive indicators of the impact of improved extension on productivity. The Project Performance Audit Report for Rajasthan (Cr. 737-IN) notes that foodgrain production was more or less sustained during the drought years of the project and that there is evidence of a significant lift in crop yields from 1980-81 onwards compared with pre-project levels. Crop yields for 1981-82 and 1982-83 were between 7% and 30% higher than for the two years preceding the project (1976-77 and 1977-78) even though kharif rainfall in 1981-82 was well below the normal average. Fertilizer consumption rose consistently over the life of the project, despite drought, and more so in the project than in non-project areas, the planted areas under improved high yielding sorghum, millet and wheat also increased markedly. Equally important have been changes in cultural practices. 1/ For the seven states included in the analysis (Assam, Bihar, Gujarat, Haryana. Karnataka, Maharashtra, and Tamil Nadu) and after an average of about 2.5 years of T&V experience and without accounting for initial dif- ferences or other confounding factors. 2/ G. Feder, L. Lau, and R. Slade. 'The Impact of Agricultural Extension. A Case Study of the Training and Visit System (T&V) in Haryana, India", (Forthcoming Staff Working Paper).  -9- The introduction of socybean. adoption of ridge and furrow cotton cultivation, and an increase in mustard planting from 70.000 to 350.000 ha are but a few of such changes related to extension reform. 1/ In Karnataka (Cr. 862-IN). crop production increased consistently over project life, more significantly there have been important positive changes in cropping patterns and cultivation practices which are clearly the consequence of extension advice given to farmers. Output gains attributable to these changes are, thus, measurable results of the impact of the reformed extension service. Major examples of such changes in farming practices include: (a) The emergence of sunflower cultivation on a large scale. with acreage increasing from 10.000 ha in 1977-78 to 276,000 ha 1983-84; (b) Rapid spread of safflower cultivation from 163.000 ha in 1982-83 to 356.000 ha in 1983-84; (c) Expansion of high yielding variety paddy cultivation from 2.4 million ha in 1978-79 to 2.85 million ha in 1983-84; (d) Introduction of high-yielding red gram in the southern districts on 83.000 ha in 1983-84; Ce) Cultivation of gram in tank-irrigated areas which rose from nil in 1981-82 to 83.000 ha in 1983-84; and (f) Growth in overall pulse acreage and yields which caused total produc- tion of pulses to increase from 710,000 MT in 1977-78 to almost 1.3 million MT in 1983-84. 2/ 1.17 In the case of Gujarat (Cr. 862-IN). 2/ average total foodgrain produc- tion during the project period (1978-79 to 1982-83) increased by about 251 as compared to the five-year average of the pre-project period. During the same period, the average yield of pearl millet increased by 47%. sorghum by 25%. wheat by 22%, and pulses by 11%. Significant changes in cropping patterns and cultivation practices, clearly the consequence of extension advice given to farmers, include the introduction of summer groundnut into new areas with the total area planted increasing from 19,600 ha in 1977-78 to 165.000 ha in 1982-83. Similarly, the acreage under rape and mustard increased by about 63.000 ha and that of castor by about 70.000 ha during the project period. Performance of Assam Agricultural Development Project 1.18 The Assam Agricultural Development Project (Cr. 728-IN, dated June 20. 1977, US$8 million) became effective in September 1977 and was I/ Project Performance Audit Report (Credit 737-IN). 2/ NAEP II Staff Appraisal Report No. 5254-IN. March 1985.  -10- originally scheduled to close on March 31. 1983. Credit closure was, however. extended until March 31, 1985 (but in fact fully disbursed by January 1985). as project implementation had been seriously disrupted over a three year period (1980-83) by civil disturbances. Frequent changes in state agricultural leadership over the period 1978-85 1/ also caused problems of management continuity. Notwithstanding these difficulties, implementation performance has been generally satisfactory with most project objectives achieved. The Project Performance Audit Report of July 1986 concluded that the extension component of the project was well formulated and efforts to adhere to institutional objec- tives have been encouraging. especially considering the security conditions prevailing during much of the project. A follow-up project is required to remedy the shortcomings and build on the achievements of the first phase. The irrigation component had no real bearing on the main extension component; it was implemented by a different authority and the project provision involved (less than US$1 million) was too small to influence events and policies. Some of the hydrological investigative objectives of the component were partially achieved, but the envisaged expansion of the shallow tubewell program did not occur, partly due to poor choice of project area. Linkages between the exten- sion service and SAU research hen been established and field trial stations developed, but research performtnce has to be improved. 1.19 Assam Extension Service Development. Most physical objectives were achieved and 95% of extension etaff have been employed on time and are in post. This has included a smooth tran;fer of 960 VLW from the Panchayat/CDD and 700 VEW from special crop schemes to the new extension service (a process that has been achieved only with much dLfficulty in some other states). Vehicles and equipment have been procured as was planned, although 20% less than anticipated bicycle and motorcycle purchase loans were made due to unfavorable GOA loan conditions, which did not cover the full cost of vehicle purchase. After initial delays, civil works construction improved (once the DOA engineering unit took over its management from Public Works Department (PWD)) and 921 of planned new construction and house renovations were completed. 1.20 Training programs introduced have undoubtedly resulted in a better equipped VEW than before. although project training did suffer during the period of civil disturbance, when travel and the assembly of training groups was difficult. The quality of SAU and DOA trainers requires improvement. particularly in communication skills. The limited availability of new, loca- tion specific ciop technology has also tended to make in-service training repetitive and increasingly less interesting to extension staff. Simultaneous efforts to improve planning and coordination of training, to strengthen the university extension/training unit, and the productivity of zonal adaptive research is required to remedy this situation. The Assam Agricultural Develop- ment Project has successfully established the institutional framework of a 1/ During the period the Minister of Agriculture, Secretary of Agriculture and Vice Chancellor of Assam Agricultural University (AAU) each changed four times and the Agricultural Production Commissioner seven times.  -11- professional extension service under a single line of command within DOA. Extension priority has so far been given to the transfer of low cost. simple, already proven technology to farmers, particularly in the improvement of cul- tural techniques such as seed treatment. timeliness of sowing. and plant populations. Whilst much still remains to be done. even in these basic areas, the extension service has to move into more sophisticated areas of crop hus- bandry. improved fertilizer and water use, plant protection, and more specialist crops in order to respond to farmer demands and to maintain staff interest and dynamism. Whilst it is noted in para 1.22 that location specific crop recommendations are now emerging from research, their late generation and a persistent lack of area and/or seasonal specific technical recommendations for several of the many diverse seasonal and geographic situations in Assam remains a challenge to research and a constraint to extension. 1.21 Supervision of VEWs has been less than satisfactory due to: (a) Diluted management control resulting from large geographic size of subdivisions; (b) A low AEO to VEW staffing ratio exacerbated by 60 vacancies in the KEO grade; and (c) A tendency for VEW to get involved in non-extension work, particularly input supply problems. Farmers still regard the VEW as a general advisor and it will take time before they get used to the reformed VEW role and until the VEW can work solely on extension. To deny farmers assistance in such non-extension areas as input supply at this time would. however, deleteriously affect farmer confidence in VEW. 1.22 Assam Agricultural Research. Although responsibility for fundamental and applied research was officially transferred to AAU from DOA in 1973. AAU has not yet taken full responsibility for applied research at agro-ecological zone level. DOA has continued to carry much of this burden at it's field trial stations. giving little attention to the designed role of managing on-farm trials. Initial reasons for slow AAU zonal development were a lack of zonal physical facilities and staff shortages. The civil works program for research under the Assam Agricultural Development Project has been largely accomplished and. under National Agricultural Research Project (NARP I. Cr. 855-IN, December 1978). progress has been made in identification and establisbment of multi-crop zonal research stations. but research staff shortages continue with 40% of AAIJ research posts unfilled. Progress will, however, continue to be gradual. limited by research officer recruitment rates. Continued support to the development of AAU adaptive research capacity will be ensured under NARP II. Research facilities are available in all the four main agro-ecological zones but certain ecologies. such as flood prone young alluvwium. and the south bank of the Brabmaputra in western Assam. are not covered by existing facilities. Despite delays in AAU zonal research development. the efforts of AAU and DOA at their respective trial stations have resulted in the generation of some zonal  -12- recommendations, including the use of bio-fertilizer (azolla algae), introduc- tion of "gram" as a summer "catch" crop. 1/ identification of improved drought tolerant-rice-varieties for-the rainfed autumn crop (ahu) and short duration rice for the flood prone areas. Much remains to be done. however, as improved rice varieties are lacking for the winter season (sali) and little work has been started on the improvement of cropping patterns and systems. 1.23 Establishment of the M&E unit was delayed and the unit only started to function in June 1982. Nine reports have so far been published. A main shortcoming of M&E under the Assam Agricultural Development Project has been delayed result analysis and publication of findings. Surveys conducted in Assam have measured the establishment of the reformed extension system and demonstrated that 90% of contact farmers and 84% of non-contact farmers know their VEW by name but that the regularity and reliability of VEW visits to contact farmers is less than ideal (50% of contact farmers visited twice a month, 30% once a month. and 20% not at all. with just 60% of visits made to the farmer's field). These figures emphasize the need (para 1.21) for more intensive VEW supervision. Sixty three percent of contact farmers had less than 2.0 ha of land and only 11% more than 4.0 ha; this distribution is con- sidered representative of the state. The M&E unit has recently conducted surveys to measure technology adoption and impact on production. Early results are conflicting; some 2/ indicate little difference in techn.ology adoption between contact and non-contact farmers. while others show a positive relation- ship between the frequency of VEW extension visits and crop yields. It was also shown that wheat yields of farmers accepting advice from VEW were higher than those accepting advice from other sources or no advice at all (e.g. 1.000 kgs/ha for the no advice situation against 1,400 kgs/ha with VEW advice). Whilst first indications are positive, more work on measurement of production impact is requirel. 1.24 Irrigation Component. At an early stage in project implementation, it became apparent that the irrigation component did not reflect the priorities of the state irrigation authorities. After a quick start, the water-level monitoring work was discontinued. Of the intended 15.000 pumps and shallow tubewells, only 4.198 were installed. However, statewide progress in tubewell development was in general better; it seems that the four project areas selected for irrigation development under the Assam Agricultural Development Project were less favorably suited and the farmers less prepared to install pumps. than other areas. Credit closure for the irrigation component was applied on the due date in March 1983, without the extension granted to the remainder of the project. 1/ November to April season. 2/ From Assam M&E Report. Rabi 1983-84.  -13- Performance of National Agricultural Extension Project (NAEP I) 1.25 NAEP I (Cr. 1523-IN. October 2. 1984. for US$ 39.1 Nillion). the first of a second phase of extension projects. is designed to provide follow-up support to three already participating states but. more importantly, to further strengthen the Department of Extension (DOE) in MOA. a process started with limited success under the Composite Agricultural Extension Project (Cr. 862-IN). To this end, NAEP I will: (a) Provide continuing assistance initiated under earlier credits to three states (Orissa. Madhya Pradesh. and Rajasthan) iu the improvement of statewide agricultural extension services; and (b) Reorganize and strengthen DOE in MOA to allow it to perform its coor- dinating and policy guidance role more effectively in the development of agricultural extension throughout India and enable it to assist states in preparing projects for extension reform. The project has provided for core staff to the Extension Division of MOA and has further strengthened existing units of Farm Information. Extension Training and Field Extension of the Extension Directorate. Core administrative staff are responsible for administrative, organizational, planning and logistic aspects, as well as for follow-up of visits and correspondence with state governments. The Farm Information Unit, in addition to organizing exhibitions, publicity. and preparing pamphlets and periodicals. will provide audio-visual and agricultural comunication support to the states. The Extension Training Unit is responsible for extension related training. and the Field Extension Unit for state subprojects and for the appraisal, supervision. and monitoring of special subprojects. In addition, the project provides funds for further project preparation and for financing special subprojects prepared by MOA, states, or other agencies designed specifically to strengthen support of exten- sion activities at the central, regional, or state level. NAEP I was declared effective April 12. 1985. and project implementation has started in the states of Orissa and Rajasthan. At central level, all new staff positions provided for DOE under NAEP I have been sanctioned. The process of recruitment is well advanced both for NAEP I incremental staff and outstanding staff not yet appointed under the Composite Agricultural Extension Project. Five new Joint Directors of Agriculture (JDAs) have recently been appointed, four Deputy Directors of Agriculture (DDAs) and two additional JDAs have been selected and should be posted shortly and two Joint Commissioners are expected to be selected soon. The above would represent a considerable strengthening of DOE. Both the Extension Technical Advisory Committee and the Project Funding Commit- tee responsible for approval of special subprojects (SSP) have been con- stituted. A total of 34 state and two central SSP have already been submitted to DOE. After first screening, 14 state SSP were selected for appraisal, three were rejected, and 17 returned to the states for further preparation. From these, two state and-two central SSP have already been jointly appraised by the Bank/DOE. These are:  -14- (a) Establishment of a National Center for Agricultural Extension Manage- ment; (b) Strengthening of Extension Education Institutes- (c) Strengthening of information support to extension. and extension train- ing in Kerala State Agricultural University; and (d) Strengthening of fortnightly training and establishment of technology testing centres in Maharashtra. It is currently estimated that the special subproject funds under NAEP I (US$8 million equivalent) will be committed to appraised special subprojects by late 1987. 1.26 The Second National Agricultural Extension Project (NAEP II). NAEP II. (Cr. 1569-IN. signed on May 10, 1985 for US$49 million declared effective December 13. 1985) will provide follow up assistance to the states of Gujarat, Haryana, and Karnataka, and introduce reformed extension in the state of Jammu and Kashmir. Implementation is now underway. Summary of the Main Lessons Learned 1.27 The problems and achievements of IDA's nine years of experience with extension projects in India are described in paras 1.12 to 1.17. While this experience has to date been positive, there are, nevertheless. several clear lessons to be learned from past experiences and which have been taken into consideration in the design of the proposed project. These are: (a) Firm commitment of state governments and strong departmental management are central to the successful establishment of reformed extension. Without them, it is unlikely that the administrative and budgetary problems that inevitably arise during institutional reform., will be either anticipated and prevented or expeditiously resolved. Extension reform should not. therefore, be introduced into a situation where either commitment or management capacity are obviously inadequate. In the same vein, project size and phasing should be related to the management capacities of the respective executing agencies. (b) Establishment of clear lines of responsibility, incorporating an effec- tive single line of administrative and technical command for extension within DOA. has proved necessary for effective management and in order to minimize administrative disturbances. (c) Community Development (CDD) or Panchayat Departments Village Level Workers (VLW) should only be transferred to a reformed, professional extension service. if those departments are clearly overstaffed and providing such transfer is effected on a voluntary basis and is non-reversible. Depletion of CDD staffs through transfer on reversible  -15- deputation has contributed to difficulties in previous projects. including: (i) Pressure on VEW to perform non-extension duties; (ii) Unplanned return of VEW to CDD causing serious staffing gaps in DOA; and (iii) Legal disputes between CDD and DOA staff on recruitment and promotional issues. etc. (d) Inadequate supervision of village level activities has frequently been a problem and provision of sufficient. trained. and fully mobile mid-level management staff requires particular attention. (e) M&E units should be established as early as possible to allow base-line data collection and early identification of implementation constraints that require management action. (f) Delayed generation of appropriate location-specific technical crop recommendations by research is sometimes a problem and priority should be given to the early establishment of extension research links. (g) Civil works management has normally been most successfully executed when carried out directly by an engineering wing within DOA (as in Assam) except in occasional cases where state PWD has proved effective in managing the typical extension project building program that com- prises a large number of low cost individual units widely dispersed in rural areas. (h) Strong project support from IDA has been an important factor in past achievement. Although the various problems. noted in para 1.12 and in the review of Bank experience (paras 1.19 to 1.27). are being specifi- cally addressed in the ongoing projects, it will take time to resolve them. Past achievements must not, therefore. mask the vulnerability that persists and the undercurrent of pressure to revert to a more traditional extension service with multipurpose field workers. Exten- sion reorganization is still institutionally immature in most states, and it is essential that the technical and supervisory support of IDA be sustained. IDA should continue to aupport efforts both to adapt technology to the needs of farmers and to improve the transfer of that technology to them by assisting state and central efforts through the NARP I, NAEP II. NARP I, NARP II, and NAEP III.  -16- II. PROJECT OBJECTIVES AND RATIONALE 2.01 Over the past nine years. the Bank has supported a series of state. composite. and national 1/ extension projects with the objective of increasing agricultural production through the development of professional extension services closely linked to appropriate research and manpower development. The proposed project would continue to support this overall objective. The inclu- sion of Uttar Pradesh. Hijmachal Pradesh and the Punjab (as a special sub- project) under NAEP III would bring to 17 the number of major Indian states participating in IDA-financed agricultural extension projects. Uttar Pradesh. one of the largest and by far the most populous state in India (population estimated to be over 110 million in 1985). will now participate after a period of hesitation and following several years of discussion with the Bank which has consistently sought its participation in an extension project. 2.02 Experience has shown that. during the first five years of an extension project. the administrative framework for reformed extension can be established and an information service provided for the transfer of low cost technology. This will be done in the states of Uttar Pradesh and Himachal Pradesh. intro- ducing T&V extension for the first time under this project. While such an administrative framework for extension has been established in the first phase of the Assam Agricultural Development Project. training and visit extension is not established firmly enough in Assam that it could be considered self-sustaining, and further strengthening and broadening of the extension effort is required. The following specific objectives would ue addressed. 2.03 Administrative Consolidation and Institutional Development. While the T&V extension system has already been introduced in Assam. resulting benefits can be further increased. The project aims to consolidate administrative changes introduced under the Assam Agricultural Development Project and sustain the commitment among decision makers and extension staff to a full acceptance and improved effectiveness of T&V extension. Thus. the project would provide an important incentive for ensuring the continuation of extension reform in Assam. The project would also provide continued support to DOE through the provision of special subproject funds that would replenish the special sub- project fund established under NAEP I. Therefore. incentive would also be provided for the continued reform and development of DOE as a central exten- sion, coordinating, and technical assistance agency with capacity to prepare and appraise agricultural development projects. In addition. the project would introduce reorganized extension services. related training. and adaptive research to the states of Uttar Pradesh and Himachal Pradesh. based on the experiences gained in previous state and composite extension projects in India. 1/ National projects have comprised a mix of first and second phase individual state subprojects, as well as centrally managed development funds.  -17- 2.04 Quality Improvement. The project would seek to ensure improvements in the quality of extension services. In addition to training programs required to establish reorganized extension in the states of Himachal Pradesh and Uttar Pradesh are which is seeking to reform their existing services. special emphasis would be placed on expanded and improved extension training programs addressing additional technical subjects, improved extension management, and communication skills. Given the specialized nature of such training, most would be arranged on a national basis with DOE playing an important role. DOE would also assist in: (a) Developing the training capabilities of the states; (b) Guiding them in extension methodology, improving the roles of SMSs. AEOs. and contact farmers; and (c) Establishing close permanent links with research. Special efforts would be made to qualitatively improve extension and training management through the provision of more responsive and advanced training in management and communication methodology for supervisory. training, and SMS staff. The quality of communications with farmers would also be improved by better selection and training of contact farmers and increased utilization of the mass media to complement T&V extension. 2.05 Expansion and Broadening of Extension Coverage. Greater area coverage will be achieved by geographic expansion into the states of Uttar Pradesh and Himachal Pradesh. In addition, special subprojects will provide for expansion into the Punjab and into 11 districts of Bihar. Typically, these first phase extension interventions would focus on the development of extension services concentrating on the transfer of simple low cost technology for selected major crops grown by the mass of small farmers. Such technology is already available for major food crops, i.e. wheat and rice (see examples in Project File Cl, Item 10). However, there is a need to address the whole farming system by providing a wider range of specialist support. for crops already covered, new crops, and such activities as soil and water management, horticulture, and some aspects of farm forestry. Such a broadening of extension would be emphasized under the proposed Assam subproject. Provision would also be made under the Uttar Pradesh subproject for early expansion into water management to ensure adequate extension coverage of newly developed irrigated areas. 2.06 Strengthening Linkages Between Extension and Research. Although research is providing increasingly effective support to extension. much remains to be done. There is still considerable ambiguity about adaptive research. verification, and field trials, and the division of responsibility for these between research and extension institutions. The division of responsibility would be spelled out as part of a memorandum of understanding between each state agricultural university (SAD) and state government. Rationalization of applied research at the agro-ecological zone level is particularly important in Uttar Pradesh and Assama where DOA's are currently carrying out much of this work. The agreed organizational goal is that SAU is to be responsible for  -18- research at central. zonal, and substation levels. while DOA (supported by the project) would be responsible for refining these recommendations by carrying out field trials (verification and modification) under farmers conditions at different locations. This would be a joint effort by research and extension, with the SMSs at the subdivision/district having full responsibility for the trials with technical backup from the zonal research station. The knowledge-practice gap in agricultural technology must be further reduced by refining technology to suit the farmers' resource, management. and risk situa- tions. The project would also help SAIJ to finance other assistance to exten- sion services. mainly the training of SMS. not covered under NARP. III. THE PROJECT A. General 3.01 The six-year project would. as its main goal. provide first time assis- tance to the States of Uttar Pradesh and Himachal Pradesh, as well as continu- ing assistance to the State of Assam. initiated under an earlier credit (see paras 1.18 to 1.24) in the improvement and organization of agricultural exten- sion services. In addition, the project would assist in the financing of special subprojects, to be prepared by MOA, states, or other implementing agencies, specifically designed to strengthen support of extension activities at central, regional, or state levels. 3.02 While the basic approach to strengthening of agricultural extension services is common to all participating states, necessary adjustments have been made to take account of differing levels of agricultural development, administrative arrangements. socio-economic conditions. population densities, communications, and progress made under earlier projects. Summary data on the state subprojects, including the staffing of the agricultural extension serv- ices before and with the proposed project, are given in Annex 1. Detailed proposals. outlining the particular features of each state component, are given in Project File Cl. Items 5 to 8, and overall project costs in Annex 2. B. The Project Area 3.03 The three state subprojects of the project. Eastern Uttar Pradesh, Himachal Pradesh and Assam, would involve a total rural population of 69 mil- lion (13% of the national rural population). managing 7.8 million operational farm holdings, and cultivating 11 million ha of land (8% of the national total). Uttar Pradesh 3.04 Uttar Pradesh, one of the largest states in India, is centrally located in the plains of North India. It is bounded by Tibet and Nepal to the  -19- north. Himachal Pradesh to the northwest, Delhi and Haryana to the west, Rajas- than to the southwest, Madhya Pradesh to the south, and Bihar to the east. It is the most populous state in India, with a population of 110.8 million (17X of the national total), of whom about 96 million or 87Z live in rural areas. In terms of area, it ranks fourth afte: Madhya Pradesh, Rajasthan and Maharashtra, with an area of 0.3 million km2, which is 9.2Z of the total area of the country. Administratively, the state comprises 12 divisions and 57 districts. 10 agro-ecological zones have been identified within the state. Annually, 24.8 million ha of land are cultivated at a cropping intensity of 143%. The state's economy is dominated by agriculture which generates 60% of the state's income. 3.05 The subproject area would cover the four eastern administrative divi- sions of Uttar Pradesh: Gorakhpur, Varanasi. Faizabad. and Lucknow. comprising 21 districts. 85 subdivisions. and 430 blocks. The total population of the proposed subproject area is about 52 million (47% of the states total). of whom 46 million or 88Z live in rural areas and are predominantly dependent upon agriculture for th2ir livelihood. Rural population density is high, averaging 401 persons per km . In the subproject area, an estimated 5.2 million farm operational holdings, with an average net farm size of 1.4 ha. cultivate 7.5 million ha of land annually. In total, 10.9 million ha are cropped annually. The average annual cropped area per family is 2.1 ha (cropping intensity of 146%). The average family size. excluding hired labor. is six persons. Within the subproject area, 76% of holdings are of less than 1.0 ha in size. compared to 69% for Uttar Pradesh as a whole, and contrasting with 31% in neighboring Haryana. The literacy rate is only 27.4%. compared to a national average of 36.2Z. The climate of the project area, classified as a sub-tropical monsoon type. has an average annual rainfall varying from 990 mm in Lucknow to 1.274 mm in Gorakphur. Most rain falls in the months of June to October. and tempera- tures are lowest in January (8-90 C) and highest in May (40-420 C). Topographically. the subproject area is flat with elevation between 150 to 300 m above sea level. It is drained by three main rivers. all tributaries of the Ganges: the Ganga, Ghaghra, and Yamuna. running northeast to southwest. The bulk of the project area has alluvial soils of variable texture. tending to alkalinity. Generally. such soils are potentially highly productive and respond well to manuring but. in more arid regions, are prone to problems of alkalinity. In the soi theast (Mirzapur district). soils are shallow. coarse-textured with low organic matter status and low water retention capacity (Vindhyan soils). Such areas are most suited to the cultivation of millets and short duration oil seeds. In eastern areas, Deoria and Gorakphur districts. lowland highly calcareous soils (Bhat soils) are most suited to tuber crops and sugarcane cultivation. Four agro-ecological zones have been identified in the subproject area. 1/ Of the 7.5 million ha of land cultivated in the subproject area, some 3.4 million are double cropped. An estimated 3.9 million ha, or 52Z of 'he total cultivated area, is irrigated, as compared to 55% for 1/ Fully described in the Indian Council of Agricultural Research. Research Review Committee for Uttar Pradesh.  -20- Uttar Pradesn as a whole. While net cultivated land area has not increased over ten years 2/. the area double cropped has increased by 26Z. This is reflected by a 13Z increase in the area under dry season (Rabi) crop and a tripling of catch-cropping in the sammer season. Rice is the dominant wet season (Kharif) crop, occupying 75% of the area planted to foodgrains. Sor- ghum. maize, and pearl millet are other major cereals, with gram the most widely planted pulse. Over 10 years 3/, the area under wet season rice has increased by 20X. mainly at the expense of sorghum and millet. Wet season pulse planting has increased by about 20Z. with a marked increase in gram, but reduction in kidney bean cropped areas. Over the same period, dry season cereal planting has increased by 45Z. with the wheat area expanding by 67Z. from 2.1 to 3.5 million ha. while the barley area has declined. Dry seaP,n pulse plantings have declined by 282 and the overall area under oilseeds remained static, despite a significant increase of rape and mustard planting. During the 10 year period since 1971-72, crop yields have increased both in the subproject area and state as a whole. In the subproject area, rice and wheat yields have increased by 45% and 36%. respectively. The exception is oilseeds whose yields have remained static. Despite significant growth in crop yields (due to irrigation development and the introduction of high yielding varieties). subproject area yields remain lower than those of the state of Uttar Pradesh, the national average, and the neighboring state of Haryana. Table 3.1: YIELDS a/ (Kgs/Ha) Subproject Uttar Haryana All Area Pradesh India Rice 983 1.088 2.559 1,291 Wheat 1.524 1.717 2.414 1,719 Oil Seeds 460 560 667 574 a/ Average of yields for the triennium ending 1982-83. 3.06 Farm inputs and seed distribution is handled by a mix of government, cooperative, and private institutions. assuring an adequate input supply coverage throughout the state. Within the subproject area, there are an 2/ For the period 1971-72 to 1981-82. 3/ For the period 1971-72 to 1981-82. N.B. Crop area statistics source: Uttar Pradesh Crop Production Statistics 19 81-82. MA.  -21- eatiuated 10.600 farm input sales points (mainly private retail stores), of which 850 are managed by DOA. In 1983-84. 700,000 nutrient tons of fertilizer (43Z of total state sales), 19.700 tons of seed (35Z of total state sale). and 1.200 tons of plant protection chemicals (42Z of total state sales) were sold in the subproject area; of these. 62 of the fertilizer. 442 of the seed, and 302 of the plant protection chemicals were supplied through the DOA. Agricul- tural credit is available, mainly through cooperatives. and. to a lesser extent. commercial banks. Improved seed is produced by DOA, Uttar Pradesh Seed Corporation, and the National Seed Corporation. Within the subproject area. there are 73 D0o seed production farms. Agricultural research is the respon- sibility of the SAUs at Kanpur and Faizabad and, to a lesser extent, of the Banaras Hindu University. Until now SAU's have been little involved in research at the the agro-ecological zone level. Although some zonal resejirch ba been carried out by DOA at four regional research/testing centers situated at Hardoi, Azmagarh, Varanasi, and Barabanki, linkage between extension and university research has been lacking. Agricultural extension is currently one of the many responsibilities of CDD; however, little attention is given to extension as the VLWs of CDD are most occupied by administrative work (subsidy administration. etc.) and other development works (wells. clinics. and roads) funded under the integrated rural development program. Other field staff mployed under the Command Area Development Authority work only at assigned irrigated sites. Apart from junior staff manning DOA farm input stores and a limited number of special crop extension workers, DOA has no staff at subdivi- sional or village level (see Organization Chart No. 27511). Thus, no profes- sionel extension service currently exists in Uttar Pradesh. Assam 3.07 Assam with a total area of 78.000 km2 and a population of 21 million, is the largest state of the northeastern region, an isolated group of five states and two union territories bounded by Bhutan and Tibet/China to the north, Burma to the east, and Bangladesh to the south. Assam can most easily be described as that portion of the Brabmaputra valley within India. The valley, about 650 km long from east to west, and 50 to 100 km wide from north to south, has been formed and remains dominated by the Brabmaputra. Each year. with the melting of the sncws from the Himalayas and the torrential monsoon rains (usually over 2,000 am), the river swells to ten times its normal winter flow. Repeated year after year, this process has built up the valley floor vith layers of asni> si8t and gravel until there are now rich alluvial deposits covering 50,000 km . Separated from the Brabmaputra valley by the Mikir and North Cachar hills is the gmaller Southern Barak valley (Cachar district). The subproject is confined mainly to these two broad alluvial valleys, which comr- prise 14 agricultural districts and 33 subdivisions, contain 972 of its popula- tion. and grow 952 of its annual crops. Rainfall averages 2,252 - per annum, with most areas enjoying a well distributed and reliable rainfall pattern spread over a six month monsoon season (May through October). Soils are alluvial and generally highly fertile; however, 102 of the cultivated area is chronically flood prone and a further 32 occasionally flooded. Four main  -22- agro-acological zones are identified within the project area. 1/ Ninety one percent of the population (19 m2ilion) live in rural areas. at an average population density of 250 per km , in an estimated 2 million operational farm holdings that average 1.4 ha in size. Ninety percent of holdings are of less than 3 ha. and 60X less than one ha in size. Annually. 2.2 million ha of land are cultivated, of which 0.9 million are double cropped (cropping intensity of 133%). and approximately 10% irrigated. The dominant crop is rice. 2.3 million ha being sown annually and occupying 80g of the areas devoted to food grain production. The most important commercial crops are tea. oilseeds. jute. and sugarcane. with Assam producing a little over half of India's total production of tea mainly from hill districts outside the subproject area. Rice production has increased only by 10% over the past decade 2/ in contrast to all India. where rice and wheat production have increased by 21% and 60%. respectively. aver the same period. Average rice yields in Assam at 1.075 kgs/ha are 20X lower than the national average of 1.291 kgs/ha. This is a reflection of a low fertilizer usage of four kgs of nutrient/ha. compared to 123 kgs/ha in the Punjab. or 52 kgs/ha in Uttar Pradesh; 50% coverage of the rice area with high yielding varieties compared to 93% in Haryana and little irrigation develop- ment; only 10% of the cultivated area is irrigated, compared to national average of 29%. Given this low production base, the favorable soil and climatic conditions. and considerable untapped irrigation resources, the poten- tial for increased agricultural production in Assam is high. 3.08 Farm input supplies are presently assured through the Assam Agro-Industries Development Corporation, private retailers. and multipurpose cooperative societies which together operate 2.800 retail sales points (2.500 private). Existing sales of farm inputs are relatively low (just 12.800 tons of fertilizer in 1983-84), and the private sector is the main supplier. As input demand increases. it is anticipated. as in other states, that the private retailing sector will develop to meet it. Farm credit is available mainly through cooperative banks and, to a lesser extent, through commercial banks. Himachal Pradesh 3.09 Himachal Pradesh, located in the north-western Himalayan region. covers 56.000 km2 and is administratively divided into 12 districts and 69 blocks. Topographically the state is mountainous varying in elevation from 300 to 3.500 meters above sea level. Despite the terrain all major centers are linked by bitumized road and, except for some higher areas that are cut off by snow in winter months. the movement of agricultural inputs and outputs is not a major constraint. Farmers tend not to live in villages but in dispersed hamlets of 1/ Fully described in the Indisn Council of Agricultural Research, Research Review Committee for Assam Agricultural University. 2/ Comparison of Average Production Statistics of the Triennium Ending 1973-74 with the Triennium Ending 1983-84. Source: Area and Production of Prin- ciple Crops, 1981-84. GOI.  -23- two to three houses. The state is divided into four main agro-ecological zones, depending on elevation. varying from sub-tropical to alpine. Precipita- tion varying from 1,000 to 1.500 mm is generally concentrated in the months of March to September with only light occasional rains occurring during the rest of the year. However, the high dry temperate zone is virtually without summer rain. but enjoys heavy winter snow. of a total population of 4.5 million. 1/ at least 4.1 million or 922 live in rural areas and are primarily dependent upon agriculture or related activities for their livelihood. A prevailing literacy rate of 42% is above the national average of 36x. Overall population densities are relatively low at 80 per km2 but as cultivable land is scarce. populations are concentrated on the agriculturally favorable valley bottoms and south facing lower valley slopes. There are an estimated 620,000 holdings with an average holding size of between 0.7 and 1.0 ha. Fifty five percent of holdings are less than 1.0 ha and 92Z less than 4 ha. It is estimated that some 620.000 ha of land are presently cultivated, of which 92.000 ha or 152 are irrigated. Some 73.500 ha. 12% of the total cultivated area, are under per- manent fruit tree crops, particularly apple. Given the scarcity of cultivable land. there is limited scope for expansion in farm size and increased agricul- tural production must come through either crop intensification or diversifica- tion. The irrigation potential of the State is estimated at 190.000 ha, 2/ and even at full irrigation development some 70% of agricultural land would remain under rainfed conditions. Most farming is practiced on nar.ow hillside ter- races and mechanization of cultural operations is generally not possible. Except in the northern ,dry temperate" agro-ecological zone, where only one s-mmer irrigated crop from snow melt waters is possible, double or multicrop- ping is practiced in all areas. Under rainfed conditions two crops are nor- mally possible and with supplementary irrigation three to four crops can be grown. The main staple food crops are maize and rice (kharif) and winter wheat and barley (rabi). Cash crops vary according to agro-ecological zone but the main ones are fresh vegetab'les and potatoes and orchard fruits such as apples, stone fruit, citrus. All are intensive, high-input-output crops requiring a relatively sophisticated technological input and efficient farm input and credit services. Adequate farm input and credit coverage is presently assured through mixed private and government intervention. In contrast, extension services are very weak and linkages between the farmer and university-based research lacking. C. Detailed Features 3.10 The project would assist in the development of six main operational activities: (a) Extension (accounting for 58% of total project costs); 1/ Extrapolated from 1981. 4.2 million population at an annual population growth of 2.12x. 2/ Source: Project for Water Harvesting under dryland farming in HP.  -24- (b) Training (9Z of total project costs); (c) Information services (1.32 of total project costs); (d) Adaptive research (0.2Z of total project costs); (e) M&E (1.5Z of total project costs); and (f) Special subproject fund (302 of total project costs). Extension and training are the main state subproject investment areas, with information services playing a supportive role to these two key activities. Adaptive research under the project would support on-farm trials programs managed in each state by DOA. Zonal research requirements are covered under ongoing and planned NARPs. M&E units would be established (Uttar Pradesh and Himachal Pradesh) and strengthened (Assam), and their work coordinated by DOE of MOA, which would also supply technical assistance support as necessary. The special subproject fund would be available to support the above or ether exten- sion related activities in any state. or at regional or centrally-based institutions. Details for each state subproject and the special subproject component are given in paras 3.16 to 3.28 and in Annex 5. 3.11 Additional Staff (232 of total project costs) would be required in Uttar Pradesh and Hizachal Pradesh for all levels at intensities appropriate to the particular economic and topographic conditions of those states for the establishment of professional extension and a H&E unit, and for the strengthen- ing of training and information services. In Assam. additional staff would be required to meet the needs of increased specialization and broader extension coverage; to this end. SItS would be required in disciplines other than those needed for basic agricultural production. Incremental staff would also be required in Assam for newly created administrative subdivisions and to maintain VEW to farmer ratios in view of population growth (natural and imuigration). Some staff are also required to further strengthen training capacities within the state and to improve the analytical and processing capacity of the N&E unit. Assurances were obtained from each state that all incremental staff positions would be filled with staff having qualifications and experience satisfactoxy to IDA and according to agreed schedules (see Table 3.2. Annex I. and Project File Cl. Items 5. 6 and 7). Further. all states agreed that all extension positions assigned to DOA under this project would be used exclusively for agricultural extension work under the project and would remain under the administrative control of DOA. Furthermore, assurances were also obtained that project extension staff would not be adversely affected in respect of their entitlement to emoluments, benefits and promotional prospects by reason of assignment.  -25- Table 3.2: INCREMENTAL STAFF REQUIREMENTS BY PRINCIPAL CATEGORIES (Number) Existing Incremental Total Assam U.P. H.P. Assam U.P. H.P. Exist- Incre- ing mental Extension Services ADA 1 - - - 1 1 1 2 JDA 5 - 3 - 4 6 8 10 DAO 14 6 2 - 15 10 22 25 SMS 87 58 2 58 270 41 147 369 Field Staff 2.797 628 365 450 4.303 983 3.790 5.536 M&E HQ & Divisional Staff 4 - 1 4 10 4 5 18 Field Staff 31 - 0 0 50 26 31 76 a/ Headquarters. Divisional. District, and Subdivisional. h/ SDAEO, AEO. VEW. 3.12 Civil Works (26% of total project costs). Additional offices, espe- cially at subdivisional level, would be provided in Uttar Pradesh and Assam. In all three participating states, additional training facilities and related information unit buildings would be constructed or. whenever possible, existing structures improved to cater for VEW/AEO fortnightly training, special subject courses and induction and refresher training. etc. Monthly workshop training facilities for SMS training would be provided under NARP II. As provision of appropriate housing in areas of operation is necessary for effective field extension, particularly in areas where accommodation for rent is not available, the project would provide some 3.000 houses for about 35% of Uttar Pradesh. 55% of Himachal Pradesh and 10% of Assam's extension workers. However, all states would continue to encourage the use of rented accommodation wherever possible. Details are given in Project File Cl, Items 5 to 8. 3.13 Vehicles and Equipment (5% of total project costs). Vehicles would be required for incremental supervisory and SMS extension staff, for M&E, training and information unit personnel. Extension and M&E field staff would require loans for purchase of bicvcles, mopeds and motorcycles (which would be of their own choice). Assurances were obtained that each state would make available: (a) To all eligible staff in need of loans for the purchase of motorcycles. mopeds. and bicycles, such loans on terms and conditions designed to provide incentives for the purchase of such motorcycles, mopeds. or bicycles; and  -26- (b) Such financial incentive, including appropriate travel allowances, in order to encourage optimum use of the motorcycles. mopeds. and bicycles to be purchased under the project. Vehicle requirements are detailed for each state in Project File Cl, Items 5 to 8. The project would also provide audiovisual equipment to support exten- sion operations, as well as office furniture and equipment needed for expanded extension activities for training and for effective M&E. Provisions for each state are detailed in Project File Cl. Items 5 to 8. Training 3.14 The project would support a variety of training activities, depending on the requirements of each state. Programs currently being followed in Assam would be continued and broadened to include new specializations. New training programs would be developed in Uttar Pradesh and Himachal Pradesh. All would include the key training programs for SMS. AEO, and VEWs of monthly workshops, fortnightly training sessions, additional seasonal training programs, and special short courses. For more senior staff. in-state training programs would be organized by DOA and SAU. In addition to the further development of exist- ing training activities, specialized training would be progressively introduced in such subjects as horticulture, watershed management, plant protection, soil conservation and farm forestry. Moreover, training in M&E and extension management, especially for staff at middle and upper administrative levels, would help to improve extension implementation and supervision. Training would also support staff develop,nent through, where appropriate, promotional training to obtain undergraduate or post-graduate degrees. Such opportunity for staff upgrading is deemed to be one of the most effective incentives available to extension staff. Apart from additional staff, buildings, vehicles and equip- ment for training, the project would also provide course operating expendi- tures 1/ (4% of project costs). 3.15 Incremental operating exp-nses (12% of total project costs) would be provided for office and vehicle operation, building maintenance and staff travel allowances. It has been observed in other states that inadequate fund- ing of operating expenses can seriously impede extension and training effec- tiveness, particularly SMS and senior staff supervision of field activities. In the states of Uttar Pradesh and Assam no restrictions are placed on exten- sion staff field visits or travel, as long as the budgetary provisions are available. Descriptions of each state subproject. limited to features of importance, are given below. Summary project costs and phasing of expenditures are in Annex 2 and in detailed cost tables in Project File Cl, Items 5 to 8. 1/ Detailed for each course type in Project File Cl. Item 4.  -27- Uttar Pradesh Subproject 3.16 The subproject would establish a unified and professional extension service for Eastern Uttar Pradesh within DOA, having a single line of technical and administrative command from VEW to the Director of Agriculture (DA) and with clearly defined job responsibilities established for each staff category. 1/ Because of the size of Uttar Pradesh, the large number of farmers involved (about 15 million) and the considerable demands that extension reform places upon staff recruitment. training and management; such reform would be introduced in a phased manner. Under the project 21 eastern districts (para 3.05) would be covered. It is anticipated that the introduction of similar extension reform would follow in the remaining 36 districts of Western Uttar Pradesh once established in eastern areas. Ir. the meantime the ongoing CDD extension services would continue to function in the western areas. The second Uttar Pradesh Tubewells Project (Cr. 1332-IN). cofinanced by IFAD under a separate agreement (Ln. 124-IN). provides for agricultural development serv- ices at public tubewell command areas throughout the state. In order to fully integrate the extension services in the project area and to avoid duplication of extension efforts, the subproject would take over the responsibility for extension at tubevell cluster sites. An ADA (Extension). assisted by four senior SMS 2/ (Training, Information Services, Crop Production and Adaptive Research). would be responsible to DA for project execution and for day to day coordination with other departments, particularly those of horticulture. forestry, community development, and irrigation. Four JDA's assisted by SMS teams at divisional level (with disciplines in agronomy, mechanization, train- ing and special crops) would supervise the work of 21 districts and 85 subdivi- sions. A State Project Coordinating Committee, chaired by the Agricultural Production Commissioner, would assure interdepartmental and interministerial coordination and steer project management on policy issues. SMS teams would be established at district and subdivisional levels having expertise in agronomy. plant protection, training, and horticulture. District Horticultural Officers, already available within the Horticultural Department, would serve as district SMS. Allowance is made at both district and subdivisional levels for SMS (Special Subjects). These posts would be filled only as required, in such fields as soil and water management, irrigated cropping, etc. The latter would be of particular relevance to areas having tubevell clusters newly developed under the Second Uttar Pradesh Public Tubewell Project and where a special extension emphasis on the transition from dry land to irrigated farming could be required. To ensure optimal staff utilization, subdivisional level SMS teams have been provided on the basis th&t one team can effectively train 120 VEW. Fifty five teams of subdivisional level SHS are thus provided to serve the 85 administrative subdivisions. 1/ Described in "Training & Visit Extension," D. Benor and M. Baxter, World Bank, 1984. - 2/ One incremental, three existing within DOA.  -28- 3.17 Existing village level workers of CDD would remain with that Depart- ment, which would relinquish its responsibility for agricultural extension to DOA to concentrate upon its other non-extension functions. Eight hundred and ninety field staff posts under the Command Area Development Authority would be abolished and the staff transferred after orientation training as VEW of DOA; 203 existing DOA special crop staff would be available for transfer to the new extension service as VEW. Under the present organizational arrangements, block level Agricultural Development Officers (ADO) are dependent upon DOA for career development and future posting; they execute the technical policies of DOA, but are administratively responsible to and paid by the Block Development Officer of CDD. Plant Protection Officers at block level are administratively responsible to the Block Development Officer but are on the budget of and paid by DOA. Under the proposed project these staff would be transferred to the administrative and technical control of DOA. as AEO or SMS. The DOA staff currently involved in farm input supply would remain in that function to ensure a continuing service. Prior to negotiations. GOUP had issued administrative orders for: (a) The abolishment of 890 field posts now under the Command Area Develop- ment Authority and the transfer of staff to DOA to be completed by April 30. 1987; and (b) The transfer on a non-reversible basis of 425 ADO from CDD to DOA to be completed by April 30. 1988. Of the 890 CADA staff 283 have already been transferred to DOA and a schedule has been established for the remaining transfer. Given the flat topography. high population density, large village size, and the relative ease of farm access, VEW would be deployed at an intensity of one per 1.200 operational farm families. To complement T&V extension. farm information units would be estab- lished at Kannur and Faizabad Agricultural Universities and at the four divi- sional headquarters of DOA. Besides producing audio-visual aides for institu- tional staff training and extension, these units would also produce publicity and training materials for dissemination through press and radio. 3.18 The responsibility for staff training would be shared between SAU's and DOA, with SAU's having particular responsibility for SMS training at monthly workshops and for special coursework. The DOA would be responsible for induction, orientation. most refresher and fortnightly VEW training. The senior SMS (Training) at state level would be responsible for the monitoring and coordination of the overall project training program. Memoranda of under- standing, defining the respective roles in training of the SAUs and DOA were agreed and established prior to negotiations. The SAIU of Faizabad has made its own arrangements with the Banaras Hindu University for assistance in SMS train- ing in the Mirzapur and Varanasi districts. Eight monthly workshop sites have  -29- been identified within the project area, 1/ six in the zone covered by Faizabad SAU. and two in the zone of Kanpur SAU. Training and hostel facilities at these sites would be developed under the proposed NARP II. Agricultural research at central and zonal levels would be the responsibility of the SAUis. Their zonal research capacities would continue to be developed under the ongo- ing NARP I and NARP II, under which seven zonal research sites are planned within the proposed subproject area. DOA is currently operating four regional adaptive trial centers cum seed farms in eastern Uttar Pradesh; however. DOA managed zonal research would be phased out as the SAD zonal research capability develops. DOA would remain responsible. in coordination with the SAU's, for implementation of an expanded on-farm trial program. 3.19 A project M&E unit would be established within DOA, headed by JDA and directly rcsponsible to DA. In addition, a special study designed to estimate and attribute the impact of the reformed extension system on farm level produc- tivity would be undertaken (executed by the University of Kanpur). The study will follow closely a methodology developed by Bank staff. 2/ The essence will be the selection and comparison of two (possibly three) neighboring districts in Uttar Pradesh, at least one of which will be within the subproject area. The districts will be as agro-climatically and culturally similar as possible. Farm level data will be collected through sample surveys at widely spread intervals before and during project implementation. Subsequently. econometric techniques will be used in the analysis to quantitatively estimate. having controlled for other confounding factors, the impact of the new extension system on farm productivity. The study will be supervised by a three man committee consisting of the DA, the ADA (Extension). and the JDA (M&E). Details are in Annex 6. Assam Subproject 3.20 The extension organization, incorporating a single line of command established under the Assam Agricultural Development Project, has worked satis- factorily and would be maintained under the proposed project. At state level. the subproject would, however. further strengthen the office of ADA (Extension) through provision of a senior SNS (Training and Information) to be responsible for the coordination and guidance of all extension related DOA and university executed training activities financed under the project. The project's civil works construction program would be supervised by the civil engineering wing of l/ Dariaphur KVK, Hardoi DOA farm, Kumarganj Research Station. Bahraich KVK, Gaziaphur Zonal Research Station. Juanpur KVK, Nirzapur Zonal Research Station, KVK Basti. 2/ G. Feder, L. Lau, and R. Slade, 'The Impact of Agricultural Extension: A Case Study of the Training and Visit System (T&V) in Haryana. India-. The World Bank ARU Discussion Paper No. 34 ARU, May 1985.  -30- DOA. 1/ rather than PWD and to accomplish this task four additional civil engineers would be required to strengthen headquarter supervisory capacity. The quality of technical supervision from the zonal level would be improved by provision of one SMS agronomist attached to each of the five zonal JDA's. One SMS (farm input supply coordination) would also be provided at each zone to improve the timeliness and reliability of farm input supply (currently carried out by multipurpose cooperatives). by ensuring: (a) Advanced planning of input requirements; (b) A close liaison between DOA and cooperatives and between DOA and the private and para-statal input suppliers; and (c) Prompt response to supply problems, channelled up from VEW through DOA administration. To improve extension management at subdivisional level, some area reorganiza- tion is required to reduce the geographic size of some subdivisions and to adjust SMS/AEO/VEW staffing ratios. Fifteen new sub-divisional units would thus be created, bringing their total to 48. Seven additional SMS (Agronomy and Plant Protection) and support staff would be required to facilitate this. The range of subject matter specialists woi'd also be broadened to include horticulture and soil and water management. initially such staff would only be posted to those subdivisions having significant irrigated or horticultural areas. Because of population growth, some additional VEW and AEO would be required to maintain the VEW to farmer ratio at 1:800 and, subject to mid-term review, further staff would be made available to provide a more intensive coverage in the difficult flood prone or newly irrigated areas, should this be found necessary at that time. The regular training of VEW in all 48 subdivi- sions would be carried out by 35 subdivisional SMS teams at 62 selected fort- nightly training sites. Simple training facilities are required at 34 of these sites that currently lack suitable buildings. SMS training would be carried out by scientists of AAU at six monthly workshop sites, whose training and hostel facilities would be provided under the planned NARP II. 3.21 Under the first phase project (Assam Agricultural Development Project). most zonal research was carried out by DOA at adaptive field trial stations. although it had been envisioned that these stations would eventually be trans- ferred to AAU as zonal research stations or sub-stations. Progress of this transfer has been slow and little has yet been achieved by AAU in the develop- ment of multicrop, system oriented zonal research. Nevertheless, the concept remains valid and, during the proposed project, the research role of DOA at adaptive trial stations would diminish as AAUE's zonal caDacity develops. The DOA would concentrate upon and expand its program of on farm trials, which would be supported under the proposed project. Identified additional zonal 1/ llader the Assam Agricultural Development Project, civil works originally entrusted to FWD suffered long delays and had to be taken over by DOA.  -31- research facilities would be financed under NARP II. Details are in Project File Cl, Item 6. Himachal Pradesh Subproject 3.22 The proje would establish a reorganize the extension service incor- porating a single line of technical and administrative command from Directorate of Agriculture to VEW, and ensuring integration of horticultural and agricul- tural extension operations. An Additional Director. acting through the DA. would be responsible for project execution to a State Project Coordinating Committee chaired by the Agricultural Production Commissioner. 1/ Because of the importance of horticulture in Himachal Pradesh, those districts predominantly iuvolved in horticultural production would be administered by a Joint Director of Horticulture and those predominantly agricultural by a JDA. JDAs, of all districts, will be directly responsible to the Additional Director extension within the DOA. In the mountainous areas it would not be possible to follow strictly all extension norms of the T&V methodology as applied in the plain areas of India in particular the number of VEW fortnightly visits to contact farmers. During pre-project orientation and planning, and in the course of implementation, the system would be adapted to take the special circumstances into account, probably making greater use of demonstration farms or plots and traditional farmer meeting points as advisory centers. 3.23 Existing village level workers of CDD would remain within that depart- ment, which would relinquish its responsibility for agricultural extension to DOA to concentrate upon its other non-extension functions. Under the project. 158 existing VEW of DOA currently working on special crop projects would be transferred to the extension service and a further 852 recruited. Under the dispersed farm situation and poor road communications within the state, place- ment of field extension staff in their actual area of work is regarded as of highest priority. The project would, thus, give priority to provision of district and field level staff housing anc to field training centers. Seven hundred and forty one houses for 72% of incremental field staff would be con- structed; improvements would be made to two existing DOA staff training centers at Mashobra and Sundernagar and a new one constructed at Dharmsala; 69 simple block level meeting centers for fortnightly staff training and farmer meetings would be provided, and Himachal Pradesh Agricultural University (HPAU) training facilities would be improved at 4 sites to facilitate SMS training. A H&E Unit would be established under the project. While for administrative purposes placed in the DOA, it would report directly to the Project Coordinating Commit- tee and Agricultural Production Commissioner. Dqtails are in Project File Cl. Item 7. 1/ See Organizational Chart No. 26806.  -32- Special Subprojects (SSP) 3.24 A fund of about US$42 million would be used to finance special short-term and discrete subprojects prepared by states. with assistance from DOE. receiving IDA support for strengthening of agricultural extension or by the MOA for specific activities designed to f.rther strengthen extension development in areas not covered under ongoing or planned state or national extension projects. The special subproject provision of the proposed project would replenish the SSP fund first established under NAEP I (pars 1.25). but which it is expected to be fully committed by late 1987. 3.25 Special subprojects will generally fall under two broad categories: (a) Those which seek to strengthen or augment a particular aspect of the extension system across states or at the national level; and (b) Those which are state-specific and whose objectives are to strengthen the extension system selectively in the state. 3.26 The types of activities to be covered would include: (a) Strengthening of SAU extension/traiuirg units; (b) Establishment of management training facilities; (c) Improvement of the data processing and analytical facilities at state M&E units; (d) Strengthening of training institutions to provide nationwide training facilities in specialized areas, such as M&E, management, SMS training in specific crops, etc.; and (e) Improving the utilization of audiovisual aides and the mass media in support of extension. It is anticipated that about 30 state 1/ and two centrally sponsored SSPs. costing about US$13 million, would have been appraised by late 1987; US$8 million would be funded under NAEP I, and the remainuer under the proposed project. Additional special subprojects would also be identified both at state and central levels. 3.27 Four subprojects are already proposed for inclusir' under NAEP III: (a) Establishment of 15 national centers of excellence for SMS training, at existing institutions, in subjects such as extension methodology and communication, oilseed production technology, plant protection, etc.; 1/ Details are given at Annex 5.  -33- (b) Establishment of a M&E Training ;enter as part of the National Institute of Rural Development; (c) Improvement of the existing extension service in the Punjab through strengthening of DOA and university based training and greater and improved utilization of audio-visual equipment and the mass media in extension support (estimated cost US$8 million). The existing exten- sion service in the Punjab. which has similar characteristics of the T&V system. as well as a strong research and extension linkage, has proved effective in reaching large numbers of farmers and in transfer- ring improved technology. The level of technology adopted by the majority of the Punjab farmers is high and future yield improvements would be possible through the adoption of a more advanced technology. Qualitative, and in some cases numerical. strengthening of the field level extension and supervisory staff would be needed. A mass com- munication support to extension would be developed. Because of the relatively high cost of advanced technology. it would be necessary to establish a M&E unit for impact analyses and quick feed back from farmers on the quality of technical messages, feasibility and accept- ability of the latest research recommendations. Preparation of this SSP is complete and appraisal will be completed in early 1987; and (d) Strengthening of the T&V extension services already introduced into 16 districts of the State of Bihar (under Cr. 761-IN) and expansion of improved extension into a further 11 districts, which would include all those proposed for inclusion under the IDA-assisted "Bihar Public Tubewells Project". Because of administrative constraints (including difficulties of staff recruitment and promotion, civil work site selec- tion, etc.) execution of the first Bihar Agricultural Extension and Research Project (Cr. 761) proceeded at a much slower pace than was originally anticipated-resulting in considerable savings at credit closure. These constraints are currently being addressed by the Government of Bihar (GOB) and would be resolved prior to special sub- project approval. It is however worthy of note that in those districts that were adequately staffed and supported under the first phase project T&V extension was effectively established with encouraging results. Bihar is one of the poorest of Indian states, crop yields are comparatively low but the potential for agricultural growth is con- siderable. Agricultural Research in Bihar is supported by IDA under the NARP I and II, and given the agro-ecological diversity of the state the demands for research are of particular importance. Experience has shown that the presence of effective extension is critical for the development of research programs responsive to farmer needs. Rcoalizing the importance of effective extension in improving agricultural produc- tion of the small farmer GOB has approved the expansion of T&V eyten- sion into the 11 project districts and has submitted through and with the approval of GOI a proposed project to IDA for inclusion under NAEP III. Accordingly a US$15.0 million special subproject is included, to finance a blend of civil works, vehicles, incremental staff, equipment.  -34- training and operating costs required to strengthen, expand and improve extension quality in the state. This special subproject would be jointly appraised by GOI and IDA by mid-1987. Given special input supply problems pertaining in the State of Assam. it is also expected that a request to support improvement of input supply services would be submitted to GOI for support under the SSP fund. 3.28 Under the project, it is estimated that US$34 million would be used to fund state executed SSPs (US$5 millioD for SSPs already identified under NAEP I and US$29 million for those to be identified under the proposed project) and US$8 million for centrally-sponsored SSPs. Table 3.3: SPECIAL SUBPROJECTS Estimated . . . ~~~~US$ Million State- executed SSP Already identified 5 Punjab 8 Bihar 15 To be identified 6 Sub-total 34 Centrally sponsored SSPs 8 Total 42 Most SSPs would be of a ahort-term -ture, small in size (usually not exceeding Rs. 5 million), and capable of bein; completed prior to credit closing. Apart from the Punjab and Bihar special subprojects (para 3.27 c & d). which because of their sizes would be jointly appraised by DOE and IDA. DOE would be respon- sible for subproject appraisal having gained considerable appraisal experience under NAEP I, with the guidance of Bank staff of the New Delhi Office. SSP appraisal would follow an agreed format and be subject to the final review and approval of IDA. After appraisal. subprojects would be submitted for final sanction to the Project Funding Committee established under NAEP I. Criteria for participation in a special subproject under NAEP III are: (a) Identification of a suitable implementing agency; (b) Preparation of a suitable subproject proposal and its submission to DOE for appraisal;  -35- (c) Completion of SSP in time for full disbursement by the closing date of NAEP III credit, although they may be approved any time during the NAEP III implementation period; and (d) Provivion of adequate resources by the implementation agency to imple- ment the subproject. Mid-Term Review 3.29 It was agreed during negotiations that a mid-term review of overall project performance, including both state and special subprojects, would be carried out by the GOI and the participating states. and the findings discussed with IDA by June 30. 1990. Project targets would be reviewed and, if neces- sary. adjustments recommended. Similarly. the need for fund reallocation and project extension or cancellation would be examined. The review would also examine progress made in the transfer of zonal research responsibilities from DOAs to SAUs and determine the adequacy of facilities and extension staff (especially SMS of different disciplines) for satisfactory implementation of the project and would recomend any necessary adjustments in number and/or discipline of staff. IV. COST ESTIMATES AND FINANCING A. Cost Estimates 4.01 The total project cost, based on late 1986 prices is US$140.2 million. of which US$5.5 million represent the foreign exchange costs. Detailed cost estimates, inclusive of taxes and duties and based on incremental costs of carrying out the project over a six year period. are given in Annex 2 and Project File Cl, and summarized in the tables below. The first project year would be mainly taken up with preparatory activities: recruitment, procurement, training, and the establishment of a M&E units.  -36- Table 4.1: SUMMARY OF PROJECT COSTS BY SUBPROJECTS a/ (Million) Local Foreign Total Local Foreign Total Z Total Rs. USS Base Costs State Subprojects Uttar Pradesh 576.9 19.8 596.7 44.4 1.5 45.9 39 Himachal Pradesh 213.0 9.2 222.2 16.4 0.7 17.0 15 Assam 142.8 5.3 148.1 11.0 0.4 11.4 10 Special Subprojects b/ 522.5 27.5 550.0 40.2 2.1 42.3 36 Total Base Cost 1,455.2 61.8 1,517.0 112.0 4.7 116.7 100 Physical Contingencies 27.9 1.7 29.6 2.2 0.1 2.3 2 Price Contingencies 267.4 8.6 296.0 20.5 0.7 21.2 18 Total Project Costs 1.750.5 72.1 1,822.6 134.7 5.5 140.2 120 a/ Any differences in addition are due to rounding. b/ Fixed sum includes contingency element. Table 4.2: SUMMARY OF PROJECT COSTS BY COMPONENTS a/ Local Foreign Total Local Foreign Total % Total Rs. Million US$ Million Base Costs Extensio,n Services 777.1 27.9 805.0 59.8 2.1 61.9 53 Training 119.4 4.3 123.7 9.2 0.3 9.5 8 Information Services 16.5 1.4 17.9 1.3 0.1 1.4 1 Adaptive Research 2.7 0.1 2.8 0.2 - 0.2 - Monitoring & Evaluation 17.0 0.6 17.6 1.3 0.1 1.4 1 Special Subprojects 522.5 27.5 550.0 40.2 2.1 42.3 37 Base Costs 1.455.2 61.8 1,517.0 112.0 4.7 116.7 100 Contingencies 295.3 10.3 305.6 22.7 0.8 23.5 20 Total Costs 1,750.5 72.1 1,822.6 134.7 5.5 140.2 120 a/ Any differences in addition due to rounding off.  -37- Table 4.3: SUMMARY OF PROJECT COSTS BY EXPENDITtRE CATEGORY a/ Local Foreign Total Local Foreign Total Z Total _______________Rs. Million US$ Million Base Costs Investment Costs Civil Works 346.1 18.2 364.3 26.6 1.4 28.0 24 Equipment 20.2 2.2 22.4 1.5 0.2 1.7 1 Vehicles 38.4 9.7 48.1 3.0 0.7 3.7 3 Training 49.6 - 49.6 3.8 - 3.8 3 SSPs 522.5 27.5 550.0 40.2 2.1 42.3 37 Subtotal 976.8 57.6 1.034.4 75.1 4.4 79.5 68 Recurrent Costs Inc. Salaries & Allow. 320.7 - 320.7 24.7 - 24.7 21 Travelling Allowances 103.2 - 103.2 8.0 - 8.0 7 Vehicle Operating Costs 23.7 2.6 26.3 1.8 0.2 2.0 2 Other Operating Costs 30.8 1.6 32.4 2.4 0.1 2.5 2 Subtotal 478.4 4.2 482.6 36.9 0.3 37.2 32 Total Baseline Costs 1.455.2 61.8 1,517.0 112.0 4.7 116.7 100 Physical Contingencies 27.9 1.7 29.6 2.2 0.1 2.3 2 Price Contingencies 267.4 8.6 276.0 20.5 0.7 21.2 18 Total Project Costs 1.705.5 72.1 1.822.6 134.7 5.5 140.2 120 a/ The above include about US$1.9 million in duties and taxes. Physical contingencies of 5% have been applied to civil works, vehicles. equipment. travel expenditures. vehicles operating costs and other operating costs. 10% applied to training course and special M&E study costs. Price contin- gencies have been applied for local costs in accordance with Bank estimates of expected inflation rates in India. 1986-87 at 7.0%. 1987-88 at 7.0%. 1988-89 at 7.5%. 1989-90 at 7.72. 1990-91 at 7.6Z and 1991-93 at 4.5x. Price contingencies on foreign foreign costs are estimated at 7.0% in 1985-86. at 7.0% for 1986-87. 7.5% for 1987-88 at 7.7% for 1988-89. at 7.6S for 1989-90 and at 4.5% for 1990-93. 4.02 Analysis of the recurrent cost implications of the proposed project on state DOA budgets shows that, at constant 1985-86 prices, the proposed project would by its sixth year add 7% ( US$6 million) to the total Uttar Pradesh DOA annual budget (US$87 million) and 8% (US$1 million) to the total Assam DOA annual budget (US$13 million). The concerned state governments would pre-finance all project costs from the outset and their absorption of the additional recurrent costs. generated by the proposed project by FY91-92. is considered manageable.  -38- B. Financing 4.03 The proposed IDA credit of US$85 million would be on standard terms to GOI and would finance 60X of project costs for agreed project activities. The proceeds of the IDA credit would be channeled to participating states in accordance with arrangements applicable at the time of central assistance to states for development projects. The balance of project financing would come from state government sources and GOI. Assurances were received that par- ticipating states and MOA had formally approved their participation in the proposed project and confirmed that adequate funds would be made available to cover the cost of their respective subprojects during the entire project period. Assurances were also obtained that no later than July 15. 1987. and annually thereafter. annual project budgets would be submitted to IDA for review. Table 4.4: PROJECT FINANCING (US$ Million) Subproject Local Support IDA Total Source Amount Uttar Pradesh GOUP/GOI 24.1 36.3 60.4 Himachal Pradesh GORP/GOI 7.8 14.8 22.6 Assam GOA/GOI 5.9 9.0 14.9 Special Subprojects GOI/States 17.4 24.9 42.3 Total a/ 55.2 85.0 140.2 Percentage 40.0 60.0 100.0 a! Figures rounded to the nearest US$100,000. C. Procurement 4.04 Civil works contracts (US$37.0 million including contingencies) for houses, offices. and training facilities would be small and dispersed, both geographically and over time; therefore, they would not be conducive to inter- national competitive bidding. Contracts would be awarded on the basis of local competitive bidding in accordance with established state procedures satisfac- tory to IDA. Standard PWD designs and cost estimates are available for most building categories to be constructed under the project. Local procurement procedures which do not exclude foreign participation require that bids for given works are advertised in the local press and that a minimum of three conforming bids be received prior to bid evaluation and award. Award is car- ried out by a constituted board of government officials. The civil works construction program would be managed and supervised either by the FWD or the civil engineering unit of DOA. In most cases, there are numerous qualified  -39- local contractors to carry out such work. Where contractors are not forthcom- ing, civil works estimated to cost US$25,000 or less may be carried out through force account. 4.05 Vehicles of various types (US$4.6 million including contingencies) and equipment (US$2.2 million) required under the project would be purchased in small quantities over several years and would be widely dispersed throughout rural areas. As adequate maintenance and availability of spares would be of paramount importance. locally made vehicles of types already used by government departments would be purchased. Thus. vehicles and equipment would also be procured locally by the participating state governments according to existing government procedures satisfactory to IDA. Under these procedures, tenders are advertised, award is made to the lowest evaluated bidder, and foreign company participation is not excluded. 4.06 Procurement under the special subproject fund would follow the same procedures as for the state subproject (paras 4.04 to 4.05). 4.07 All bidding documents and award proposals for contracts for civil works, vehicles. equipment. and furniture (estimated to cost US$100.000 or more) would be subject to IDA prior review. Orders for purchase of minor equipment. furniture. and supplies would be bulked wherever possible and pur- chased according to established local competitive bidding procedures, except where valued at less than US$50,000. when they would be purchased by prudent shopping through normal trade channels. Assurances on procurement procedures mentioned in paras 4.04 to 4.07 were obtained. 4.08 The balance of project costs (US$54.1 million) for the three state subprojects would consist of training course and evaluation survey costs (US$5.4 millio)r). incremental salaries (US$32.1 million). and incremental operating expenditures for offices, vehicles, and tray' ling allowances (US$16.6 million). All costs are inclusive of contingencies which amount to US$23.5 million.  -40- Table 4.5: PROCUREMENT ARRANGEME.NrS (USS Million) ICB LCB Otber N. A. Total Cost Inc. Staff Salaries Total - - - 32.1 32.1 IDA - - - 18.3 18.3 Civil Works Total - 37.0 - - 37.0 IDA - 21.8 - 21.8 Inc. Operating Costs Total - - - 16.6 16.6 IDA - - - 9.6 9.6 Vehicles & Equipment Total - 6.8 - - 6.8 IDA - 5.0 - - 5.0 Training Total - - - 5.4 5.4 IDA - - - 5.4 5.4 SSPs a/ Total - - 42.3 - 42.3 IDA - - 24.9 - 24.9 Total Total - 43.8 42.3 54.1 140.2 IDA - 26.8 24.9 33.3 85.0 a/ Breakdown of expenditure categories and procurement methods are not available for this component, but procurement procedures would follow those described in paras 4.04 to 4.07. D. Disbursements. Accounts and Audit 4.09 A seven year disbursement period is proposed and an estimated credit disbursement schedule is given in Annex 3. The proposed disbursement pattern is compared with the actual average disbursement profile for the eight states that have already completed extension projects and the regional profile for IDA agricultural projects in India. The proposed schedule is in line with the average prof-le for completed extension projects (which includes a mix of good and poor performing projects) but is marginally shorter than the regional profile (for details see Annex 3. pages 1 and 2). The proposed profile is considered realistic given: (a) Actual past performance;  -41- (b) The probable lack of start up delays in the second phase Assam sub- project; and (c) The fact that Uttar Pradesh has already begun staff training. that staff sanction orders are completed. and graduate staff are available for recruitment. 4.10 Disbursements would be made as in Table 4.6. Table 4.6: DISBURSEMENTS Category Percentage of Eligible Expenditures Civil works 60 Vehicles. equipment, furniture and materials 100 (foreign expenditures) 75 (local expenditures) Training course costs, special M&E study and farm trials 100 Incremental salaries a/ 66 Incremental operating expenditures b/ 55 Special Sjbprojects 60 a/ Actual disbursements against this category would be made against a declining proportion of total eligible staff costs; over the life of the project such disbursements would in total be equivalent to 66% of incremental staff salaries as follows: 100% up to SDR 2.36 million; 80% up to SDR 3.63 mlUlion; 70X up to SDR 4.38 million: 40% up to SDR 2.7 million; and at 30X up to SDR 2.11 million. Expressed as a proportion of total eligible staff costs in the states over the life of the project such disbursements would be equivalent to (13% for Uttar Pradesh, 58% for Himachal Pradesh and 10% for Assam). Staff eligible for disbursement would include incremental extension staff of DOAs, VEW, AEO, SMS. SDAEO. DAO. DDA, JDA, ADA. professional staff of M&E Units, and DOA informarion units and adaptive research (excluding support staff). b/ Includes office operating costs, vehicle operating costs and staff travel allowances. Actual disbursement against these categories would be made on a declining basis equivalent to 55% of project incremental operating costs as follows: at 1OOZ up to SDR 1.18 million; 75% up to SDR 1.69 million; 50% up to SDR 1.52 million; 40% up to SDR 1.43 million; 10X up to SDR 0.505 million. 4.11 All applications prepared by the states and DOE for reimbursement would be channeled through the Department of Economic Affairs (DEA) as at present.  -42- but with copies provided to DOE. Individual expenditures on civil works and equipment and vehicles (exceeding Rs 25.000) would be listed item by item in summary sheets. Where expenditures for training or payments for locally procured vehicles and equipment exceed Rs 150.000 or payments under civil works contracts exceed Rs 30G.000. supporting documents would be submitted to IDA for review. Disbursements for expenditures below these amounts in the above cases. or for staff costs and operating expenses. would be against certified state- ments of expenditures, the documentation for which would not be submitted to IDA for review. but would be retained by state governments. These documents would be available for inspection by IDA or DOE/MOA during the course of project review missions. 4.12 Retroactive financing of up to US$2 million is recommended for start-up expenditures in the three participating states incurred after April 1. 1985. particularly for training. establishment of H&E units and early recruitment of key staff in Uttar Pradesh and Himachal Pradesh. 4.13 Assurances were obtained that separate accounts would be kept of expen- ditures made under the project. All project accounts would be audited annually for each fiscal year. in accordance with sound auditing principles consistently applied. Certified copies of project accounts and financial statements. including a separate opinion as to whether those expenditures withdrawn against the credit on the basis of statements of expenditure have been used for the purpose for which they are provided, would be submitted to IDA within nine months after the end of the fiscal year. and audit reports submitted when finalized. Such reports and audits would show. inter alia. that the funds withdrawn had been used for the purpose intended. that goods had been received or work performed, and that payments had been made. All reports would be submitteci by the subproject implementing agencies through DOE to rhe DEA. GOI. for onward transmission to IDA. V. ORGANIZATION AND MANAGEMENT A. General 5.01 Two types of project interventions are included: (a) State extension subprojects, prepared by the states and appraised by IDA are executed by the respective state governments. As agreed under NAEP II, DOE (MOA) would monitor and coordinate such sub-projects. prepare summary six monthly sub-project progress reports, and provide technical assistance (especially in the fields of training. extension management and monitoring and evaluation) as required by participating states; and (b) Special subprojects (funded through a centrally managed fund within MOA) which would mostly be identified in the course of project implementation (NAEP I and the proposed project) and be prepared (riiith  -43- the assistance of DOE) by state governments or involved central or regional institutions. Appraisal would be carried out by DOE. except for the Punjab and Bihar Special Subprojects, which because of their size would be jointly appraised by IDA/DOE. All appraised special subprojects would be subject to final review and approval by IDA prior to fund release. B. Project Management State Subprojects 5.02 State governments would have overall responsibility for the implementa- tion of their respective subprojects. Each state would be responsible for preparing semi-annual progress reports in the format approved by IDA. The state would forward its reports to MOA/DOE and DEA. MOA/DOE. with IDA par- ticipation as required, would undertake comprehensive semi-annual field reviews of each state subproject. Assurances were obtained that MOA/DOE would submit to IDA semi-annual state progress reports each June and December. giving a sumary for each subproject of activities undertaken during the prior six months (October-March and April-September), details of staffing, physical and financial targets achieved, and implementation problems encountered, together with an evaluation of the state reports. States would in addition submit annual monitoring and evaluation reports to IDA through MOA/DOE (para 5.10). Each state would also prepare a completion report for its subproject. Both MOA/DOE and IDA would review subproject progress and completion reports. 5.03 Financial management would follow the general pattern prevailing under ongoing IDA credits for state extension projects. Each state would have responsibility for ensuring that the financial requirements of its subproject was met. MOA/DOE, DEA, and IDA would be responsible for monitoring compliance with financial reporting requirements undertaken by implementing agencies (para 4.11), as well as for monitoring procurement. DEA and IDA would make selective reviews of accounting procedures and withdrawal claims. Special Subprojects 5.04 State governments and central or regional bodies would have respon- sibility for the implementation of special subprojects. Overall coordination of this component would be assured by DOE. which has been strengthened to fulfill this role with additional staff, office facilities, and vehicles and equipment financed under the Composite Agricultural Extension Project and NAEP I. Special subprojects would be prepared by GOI, states. or designated implementing agencies (e.g.. State Agricultural Universities) with DOE assis- tance. The responsibility for appraisal would rest with MOA/DOE under the overall direction of the Joint Secretary (Extension Commissioner) who would nominate the members of each appraisal team, including a member of the Exten- sion Division core team. members of the Extension Training and Field Extension Units of DOE. as well as two or more representatives of other departments of  -44- MOA (e.g.. Crops Division and Finance Section), the Indian Council of Agricul- tural Research, DOAs of states other than the one proposing the subproject, and/or other specialists necessary for appraisal. IDA would continue to provide assistance in both the preparation and appraisal of special subprojects but--except in the case of the proposed Punjab and Bihar SSP (para 3.27 (c),(d)). which would be jointly appraised by IDA and DOE--IDA involvement in SSP appraisal is expected to be minimal given the experience gained by MOA/DOE under NAEP I. However, prior to special subproject appraisal by MOA/DOE, IDA would review and comment upon the project submission. Following appraisal DOE would submit its recommendations to the "Project Funding Committee" (estab- lished under NAEP I and empowered to sanction special subprojects under NAEPs) for sanction. After sanction, the proposed SSP would be submitted to IDA for approval for financing under NAEP III. 5.05 Under NAEP I. it is required that DOE/MOA be adequately staffed to fulfill the required special subproject preparation. appraisal and coordinating functions. Assurance was obtained that special subproject appraisal would follow the format already agreed with IDA under NAEP I and that special sub- projects would be subject to final review and approval by IDA. Reporting requirements for special subprojects would be the same as described for state subprojects at para 5.02. Assurance was also obtained that MOA/DOE would prepare one summary completion report for the special subproject component. C. State Extension Organization 5.06 In the states, the Secretary of Agriculture and DA have overall respon- sibility for implementing statewide extension programs. Within each state, an ADA (Extension) is responsible to DA for day-to-day technical and administra- tive management of the extension service, supported by the administrative machinery of the department. The ADA makes arrangements for recruitment and training of extension personnel, budgeting, procurement, disbursement of funds. and preparation of periodic progress reports and is supported, inter alia. by a small staff of SMSs responsible for improving the technical quality of exten- sion services in their special fields (for the main crops grown throughout the state, plant protection, adaptive research, training, water and soil manage- ment, etc.). Coordination among extension, research and allied agencies (input supply. finance, credit, irrigation and state agricultural university. etc.) would be achieved through the working of several committees at state, zonal and district levels (established under the Assam Agricultural Development Project in the case of Assam) as well as through informal contacts, exchange of staff, workshops, training courses and collaboration in field testing programs. Each state has (Assam) or would establish (Himachal Pradesh and Uttar Pradesh) a state level Project Coordinating Committee to coordinate implementation of its extension project, chaired by the Agricultural Production Commissioner or Secretary for Agriculture and with the ADA (Extension) acting as secretary. Its members would include the Vice Chancellor of the SAU. Directors of Agricul- ture and Horticulture, and representatives of other concerned government departments and agencies. The Committees would meet at least twice a year to review progress in project implementation, resolve problems. and assure  -45- inter-departmental cooperation. Assurances were obtained that the states of Utter Pradesh and Himachal Pradesh would establish such committees no later than June 30. 1987. In all participating states. SAUs are charged with the responsibility for central and zonal agricultural research, but DOAs still conduct zonal research at adaptive trial stations in Assam and Uttar Pradesh; they would progressively withdraw from this activity. as SAD zonal research capacity develops under NARP I and II. to concentrate upon state-wide on-farm trial programs. Memoranda of understanding between GOUP, GOA and SAUs defining their respective responsibilities and linkages in research have been agreed and established. The model memorandum used was developed for other states where it had been tested and found workable. As a new Horticultural University had recently been established in the state of Himachal Pradesh. it was agreed that GOHP would conclude a Memorandum of Understanding with Himachal Pradesh Hor- ticultural University and revise the Memorandum of Understanding with HPAU by March 31st 1987. 5.07 The establishment of close links between extension. training, and research is essential to the introduction and development of T&V extension. Under the recommended system, SMS (employed by DOA) are expected to spend one-third of their time in liaison with research staff and SAU research staff at zonal stations are also to allocate part of their time to DOA extension work. The State Technical or Research Advisory Committee provides a formal means for review of university research and field trials. for review of proposed research programs and for review of extension recommendations from Zonal Research Advisory Committees. The State Technical Committee is chaired by DA and consists of senior officers of the university, concerned government departments, and other agencies. It meets twice a year to review research results and extension recommendations and to formulate an extension work program for the next year. 5.08 The key link between the SAD and DOA is the monthly extension and research workshop which ensures regular contact between SAU scientists and extension SMS. These are used to train SMS, to review technical recommenda- tions and, on the basis of observations and experience, to adapt them for field extension and to suggest modificationc to the farm trial programs for the pre-season zonal workshop's consideration. Pre-season zonal workshops, chaired by the Zonal/Divisional Joint Director of Agriculture or Associate Director of Research (SAU), meet before the okharif" and "rabill cropping seasons, at a research station. The participants include seientists of the zonal research stations, divisional JDA, DAOs, zonal and headquarter SMS'L, SAU scientists. and the unit head of the M&E unit. The workshops typically include repre- sentatives from credit, marketing, irrigation, agro-industries and other con- cerned agencies. The participants review and evaluate the farm trials and the M&E unit results, as well as the adoption experience of previous years to formulate the program for the next season, including the program for applied research and location of trials. The workshop also screens the research and farm trial results for modification of the extension recommendations for the zone. Adoption experience of recommendations from previous seasons and reports  -46- of the M&E unit would be a major consideration of such discussions. The par- ticipants discuss the implications of extension recommendations. seek coopera- tion among various input supply agencies, and give attention to problems of credit, marketing. and input supply. The outcome from these workshops forms the basis of recommendations placed before the State Technical or Research Advisory Committee (para 5.07). 5.09 Zonal recommendations are reviewed at a special state level workshop arranged by the State Technical or Research Advisory Committee (para 5.08) held before each cropping season. It is presided over by the Vice Chancellor of the SAU and attended by appropriate direct,rs and heads of disciplines of the university, associate directors of the regional research stations, DA, ADA. Zonal Joint Directors of Agriculture. and such other officers of DOA as may be designated by DA. The workshop reviews the program of research. extension cooperation and coordination; determines research priorities and applied and adaptive research programs on the basis of the recommendations of the zonal workshops; and screens the zonal extension recommendations. D. Monitoring and Evaluation 5.10 Continuous M&E is an integral part of all ongoing IDA-assisted exten- sion projects. However. some participating states in the past were slow to establish M&E units and begin collection of appropriate data. In recognition of the shortcomings. between 1981 and 1985. GOI sponsored a series of workshops and IDA developed an operational manual 1/ to strengthen this work. In Uttar Pradesh. special effort would be made to ensure early M&E unit estab- lishment to allow surveys to start in the first year and retroactive financing is recommended f-. this purpose. In addition. a special study. designed to estimate and attribute the impact of reformed extension and agricultural productivity, would be conducted in Uttar Pradesh (para 3.19) and the develop- ment of a M&E management training facility provided as a special subproject (para 3.27). Within a state, M&E is usually the responsibility of a Joint Director of Agriculture or Senior Economist (located at headquarters) reporting to DA. He is assisted Dy a small group of staff. ideally including a statis- tician, a sociologist. and an economist. The methodology used should conform to the basic M&E manual designed for T&V extension. To be effective, evidence generated bt the cell needs to be brought promptly to the attention of senior officers in the state extension system. i.e. the Secretary for Agriculture. the Agricultural Production Commissioner, the DA and the Additional Directors. who must then initiate actions to modify and improve extension operations on the basis of the newly available information. The cell should be directly responsible to an officer senior to the Additional Director responsible for extension. While this arrangement is well understood in India. in many states. 1/ R. H. Slade and G. Feder. "The Monitoring and Evaluation of Training and Visit Extension in India: -A Manual of Instruction". World Bank. October 1981.  -47- the M&E cell, for all intents and purposes, reports initially to the Additional Director (Extension) which impairs objectivity. M&E cells may also be diverted from their primary duty to others such as preparing departmental work plans and budgets. cr performing other urgent administrative tasks. 1/ In addition. a special study designed to estimate _nd attribute the impact of reorganized extension on agricultural productivity would be conducted in Uttar Pradesh (para. 3.19) and the development of a monitoring and evaluation training facility provided as a special subproject (para. 3.27). Assurances were obtained that the states would undertake M&E of their respective projects in a form satisfactory to IDA and that summary results would be forwarded through MOA/DOE to IDA at least once a year. 5.11 The Field Extension Unit of DOE would be responsible for technical guidance to state M&E units and for collecting and coordinating the M&E reports from all subproject states and forwarding them to IDA at agreed intervals. VI. BENEFITS AND RISKS A. Benefits of Improved Extension 6.01 Agricultural extension organized on the basis of regular training and frequent field visits aims at increasing productivity on farms and the income of farmers. While it is difficult to isolate yield increases resulting from extension from increases resulting from other determinants, both officials and farmers exposed to the new system agree that it is a definite improvement over earlier systems and is, at least. partially responsible for bringing changes in the attitude of the farmers toward adopting improved farming methods and increasing the rate of that adoption. Examples of significant changes to cropping patterns and cultural methods related to the introduction of reformed extension are already noted in para 1.16. 6.02 The benefits of improving the extension service are difficult to quan- tify. For example, neither favorable farmer response to regular contact with extension staff nor the increased ability and self-esteem of extension workers now permitted to perform chiefly agricultural functions. are easily measured. although both are readily apparent. Furthermore. M&E of agricultural extension activities is relatively new and has, in most states, concentrated on assess- ment of extension system establishment and, only recently, on the impact of improved extension upon productivity and technology adoption. In addition, regular M&E surveys are not designed to isolate the extension effect on produc- tion from other factors, such as input availability, crop prices, etc. Never- theless, clear and positive trends are emerging from M&E work. These are 1/ G. Feder and R. B. Slade, "Experiences with the Monitoring and Evaluation of Training and Visit Extension in India," World Bank Staff Working Paper No. 595, May 1983.  -48- discussed in more detail in paras 1.13 to 1.21 and in PCRs, Project Performance Audit Reports, previous Staff Appraisal Reports and individual state M&E reports. 1/ Positive relationships are indicated between the frequency of VEJ farm visit and crop yield and technology adoption and between the VE1 as a source of technological information and crop yield. In Haryana. crop cutting results show that, with similar fertilizer doses, contact farmers obtained better yields in part due to more appropriate combinations, timeliness, and/or methods of application. Similarly, in the case of non-fertilized plots, con- tact farmers often obtained higher yields, especially in the case of paddy and chickpea. reflecting the impact of extension through the use of low-cost inputs and practices. 6.03 The favorable impact of eztension is also supported by state production statistics. which show a steady rise in both yield and total production for wheat. rice. sorghum and millet. and some pulses, and significantly increased usage of fertilizer and high yielding varieties. 2/ In Madhya Pradesh. for example, yields increased over four years of project life by 25S for wheat, 31 for rice. 201 for maize, and 12Z for grah. In Rajasthan. crop yields in 1981-82 were between 71 and 302 higher than pre-project yields of 1976-77. 6.04 In late 1981. the need for an objective empirical assessment of the impact of the T&V system led to a study being undertaken by the Bank in col- laboration with the Haryana Agricultural University at Hissar. 3/ It was designed to assess the extent to which T&V extension has accelerated the diffu- sion of knowledge about improved farming practices and increased farm produc- tivity. A sample survey of farmers was used to assess the strengths and weaknesses of the T&V syetem relative to the older community development sys- tems of agricultural extension. Results from the study indicate that the T&V extension system is more successful in delivering information to farmers than the traditional system, that it achieves significantly higher rates of direct contact with farmers. and that rates of knowledge diffusion for all wheat practices and for some paddy practices are higher than comparable rates under the former system. The study showed, in the case of wheat, a yield increase of almost 2% per annum over the first four years of the phase I project, which is directly attributable to extension and independent of the increased use of other farm inputs. Further, there is also no evidence that extension agents' 1/ PCRs for Rajasthan. Orissa, Madhya Pradesh. Assam. Haryana, Karnataka. and Gujarat, PPARs for Rajasthan (Cr. 737-IN), Orissa (Cr. 682-IN). Madyha Pradesh (Cr 712-IN), Assam (Cr. 728-IN) and Haryana, Karnataka and Gujarat (Cr. 862-IN). Staff Appraisal Report No. 5254-IN (NAEP II) and Staff Appraisal Report No. 4983-IN (NAEP I). and about 110 individual state M&E publications. 2/ Area and Production of Principal Crops in India, GOI. 3/ "The Impact of Agricultural Extension: A Case Study of the Training and Visit System in Haryana, India.8" World Bank Research Project RPO 572-29.  -49- visits are biased in favor of the largest or wealthiest farmers as has often been assumed. It is proposed that a similar study be conducted in the state of Uttar Pradesh under the project (paras 3.19 and 5.10 and Annex 6). 6.05 Of major significance is the clear evidence from states and areas where improved agricultural extension is becoming well established that it is exert- ing considerable pressure on other support services (particularly research) to improve performance in parallel with extension. This development underscores the important but frequently overlooked lead effect of a strong extension service. Where problems have been identified3 they are in many ways a reflec- ti-.n e' the strengths of the system as well as of its weaknesses. Some of these weaknesses. as they impose risks to successful implementation of NAEP III, are noted below. B. Risks 6.06 A number of general administrative constraints and policy problems may continue to impede development of extension and will require continued atten- tion from GOI and IDA. Late or inadequate budgetary provisions, promoti. n by seniority, frequent transfer. and inappropriate selection criteria for t.aining are common problems that adversely affect extension. Limited progress has been made in these areas, although some success has been achieved in altering other aspects of administration to the benefit of extension (e.g.. installing of a technical, single-function extension service, weakening of the "target approach" to agricultural development among agricultural and other officers. reduction in paperwork at all levels of the extension system, and greater delegation of authority). Possible failure by participating states to continue to finance the additional recurrent costs generated by the proposed project after project completion does not constitute a major risk as these costs only represent 7-8% of total DOA budgets and because DOAs would finance total project costs from the outset (para 4.02). 6.07 Extension will always be vulnerable to outside pressures. VEWs are still seen by many farmers not just as technical officers but also as general representatives of government to whom all problems should be taken. To deny farmers their assistance could jeopardize the credibility of the system. Such pressures will continue until other support services become stronger and areas of responsibility are more clearly understood. Finally. District Deputy Comr missioners (Collectors) can requisition staff and vehicles from any department. as the need arises. This can be disruptive to extension work since it may tie up staff over critical periods of the farming calendar. Although there is increasing recognition that the primary function of extension must be technical and that it cannot substitute for weaknesses in other support services. pres- sure for non-technical involvement of extension staff is likely to continue. This may be offset to some extent. by better planning so that staff involvement in these activities can be concentrated outside the main growing seasons. Learning from rast experience, the proposed project would not involve transfer of VLW from CDL or Panchayat Department to DOA, so that these departments would retair sufficient village level staff to do their jobs. IDA participation is  -50- also especially useful in resisting these pressures. No precise period neces- sary for such IDA involvement can be established, but at least five years beyond the implementation period of an initial five year project in any par- ticular state should be expected given the institutional changes required. After this period of additional involvement, state extension services should be in a better position to continue independent of IDA support. particularly if the central supporting agency. DOE. has been sufficiently strengthened. as initiated under Composite Agricultural Extension and NAEP I Projects. 6.08 In some states, execution of civil works programs was frequently slow due to a lack of coordination between DOA and the constructing agencies. the inability of PWDs to deal with small projects. and the problems in identifying suitable contractors and in awarding contracts. It has, therefore, been decided that in the cases of Uttar Pradesh and Assam the existing civil engineering units of DOAs would be responsible for the management and supervi- sion of their respective construction progrsms. 6.09 A frequent cause of poor field staff supervision is inadequate mobility of supervisory staff. This risk would be minimized by the provision of ade- quate vehicles. travel allowances, and vehicle operating costs to be financed under the proposed IDA credit. The loan terms and conditions would be designed to create adequate incentives for staff to purchase motorcycles and bicycles (para 3.13). 6.10 Without an effective two-way communication between research and exten- sion, it is unlikely that the technology needed by farmers to increase produc- tivity would be developed and transferred. To promote such linkage each state participating in the project would obtain before negotiations a written memorandum of understanding between the SAU and DOA spelling out university responsibilities for support of the extension services (para. 5.06). Such formal instruments have been found necessary in the course of implementation experience. The project would also provide support to SAU for exten- sion-related expenditures. In states (Assam and Uttar Pradesh). where respec- tive DOAs are currently involved in zonal research. precipitous handover of such responsibilities to the SAUs would be avoided, particularly where recruit- ment of university scientists is difficult or progress of zonal research sta- tion development delayed. A gradual handover is envisaged with phasing of SAU staff recruitment related to likely zonal facility development. To date. the absence of new technology has not been the major constraint, but as the backlog of research findings becomes more widely adopted, additional adaptive research. field testing and development of new technology will be required. particularly in the second phase Assam state subproject. While early work may be aimed at zonal and district recommendations, ultimately technology development needs to be directed more at meeting the location specific needs of farmers in various sub-agroecological zones and those in more remote and difficult areas. NARP II would help strengthen research efforts to provide such technology, and the proposed project would assist in supporting an expanded trial program on farmers fields designed to tailor agro-ecological zone recommendation to specific, area, or group needs.  -51- 6.11 An important task for a strengthened DOE and Extension Division in the central MOA will be the coordination of extension activities with GOI special schemes. GOI special schemes at the state level may conflict with extension programs and activities. In most states, many subjects of interest to agricul- tural extension services (such as animal husbandry, horticulture, water manage- ment, farm forestry and agricultural credit) are the responsibility of organizations other than DOA. Reconciliation of extension with continued support for the multi-purpose village worker/community development approach is also important to the continued success of extension reform. Coordination within states is encouraged by committees at various levels and through the state Agricultural Production Commissioner and is being further strengthened at the center through the Technical Advisory Committee established under NAEP I. 6.12 Apart from monitoring and coordinating. reporting upon, and providing technical assistance to state subprojects. MOA/DOE would play the major role in appraisal of special subprojects. The capacity of DOE to adequately perform this task has been developed and is being tested under NAEP I. The technical assistance role presently undertaken by IDA would be progressively handed over to DOE. Employment and Poverty Impact 6.13 The project's direct impact on employment would be relatively small: (a) Some 6,200 incremental persons would be employed as a result of the project, and limited additional employment would created during the period of civil works construction. (b) Far more important will be the project's indirect impact on employment and income generation throughout rural areas of the participating states. The dissemination and adoption of improved agricultural production and farm management techniques will lead to increases in onn-farm productivity and farm output, thereby generating substantial additional employment and income for farmers. their household members, and agricultural laborers on millions of farms. In the proposed project area, there are about 7.8 million farms with a average holding size of 1.4 ha, each supporting five to six family members and addi- tional landless farm laborers. Based on 1981 statistics, 70% of India's labor force is employed in agriculture, and the average value added per farm family is US$304. With an average family size of more than five members, this implies an average income equivalent to about US$60 per person-about half of the income level judged to be the absolute poverty level in India. Given the land and income pattern of the proposed project area. the project's indirect employ- ment and income effects will predominantly accrue to the rural poor. Impact on the Environment 6.14 The project is not expected to have any deleterious effects on the rural environment.  -52- VII. AGREEMENTS AND UNDERSTANDINGS REACHED AND RECOMCENDATIONS 7.01 During negotiations, agreements were reached with GOI and the involved states on the following: (a) The states would fill incremental staff positions with staff having qualifications and experience satisfactory to IDA and according to a specified schedule (shown in their respective annexes of the project file (para 3.11)). (b) The states agreed that all extension positions assigned to the administrative control of the DOA under this project would be used exclusively for agricultural extension work and be retained under the administrative control of DOA (para 3.11); (c) The states agreed that extension staff would not be adversely affected in respect of their entitlement to emoluments, benefits and promotional prospects by reason of assignment to the project (para 3.11); (d) The etates would make available: (i) Loans for the purchase of motorcycles, mopeds, and bicycles, such loans would be made available to all eligible staff on terms and conditions designed to provide incentives for the purchase of such motorcycles, mopeds. or bicycles; and (ii) Such financial incentive. including appropriate travel allowan- ces, needed to encourage optimum use of the motorcycles. mopeds. and bicycles to be purchased under the project (pars 3.13). (e) The states and GOI. in consultation with IDA. would undertake a mid-term review of overall project performance by June 30. 1990 which would. inter alis, review the needs for adjustment of proiect targets, fund reallocation, extension or cancellation, progress in tite transfer of zonal research responsibilities from DOAs to SADI, and the adequacy of the existing staff. Recommendations would be made on any necessary adjustments (pars 3.29); (f) Beginning July 15, 1987 and annually thereafter. the states would submit to IDA for review their annual project budgets (para 4.03); (g) Each implementing agency would implement procurement procedures satis- factory to IDA (paras 4.04 to 4.08); (h) GOI would cause each implementing agency to maintain separate accounts of each subproject and keep records of expenditures (para 4.13);  -53- Ci) Bach implementing agency would prepare and present to MOA/DOE for t:anuission to IDA administrative and financial data regarding progress of the project, including procurement of goods and services, civil works, expenditures. audits. and requests for disbursement in accordance with the schedules agreed (para 4.10 - 4.13); (j) GO0 agreed that it would submit to IDA semi-annual progress report. each June and December for each state subproject under the credit. in a form acceptable to IDA. The reports would include a sumuary of activities undertaken during the prior six months (October-March and April-September). details of staffing, physical and financial targets achieved. and implementation problems encountered. Further. each state would also prepare, for review by DOE/IDA. subproject completion reports (pars 5.02); (k) 00I agreed that special subproject appraisal would follow a format agreed with IDA and that special subprojects would be subject to final rev4i and approval by IDA. In addition GOI agreed that DOE would prepare one summazy completion report for the entire special subproject component (pars 5.05): (1) The states of Uttar Pradesh and Hiuachal Pradesh would establish project coordinating committees no later than Juner 30. 1987 to oversee implementation of their extension project (para 5.06); (a) The state of Himachal Pradesh would by March 31. 1987 conclude a Memorandum of Understanding with Himachal Pradesh Horticultural Univer- sity (Solan) and revise the Memorandum of Understanding with Himachal Pradesh Agricultural University (Palamphur) (para 5.06); and (n) The states would undertake M&E of their subprojects in accordance with procedures satisfactory to IDA. and would forward to IDA. through NOA/DOE. an annual summary of results (pars 5.10). 7.04 To encourage the prompt implementation of the project and in recogni- tion of the early initiatives taken by GOI and the state governments to imple- sent the project. it was agreed that retroactive financing up to a total of US$2 million be made available for expenditures incurred after April 1. 1985 (pars 4.12). 7.05 With the above assurances, the proposed project would be suitable for a credit of SDRs 71.7 million (US$85 million) to GOI on standard IDA terms.  I/ VI I I N
it 6. I 1 N I  I tU) I x UN z I ~~~~~~~~~~z  4 I  -57- ANNEX 1 Page 1 of 2 INDIA THIRD NATIONAL AGRICULTURAL EXTENSION PROJECT Summary Data on State Subprojects Uttar a/ Himachal Pradesh Pradesh Assam Rural Population (N) 46 4 19 No. of Agro-ecological Zones 4 4 4 i No. of Agricultural Districts 21 12 14 No. of Extension Subdivisions 85 69 48 No. of Blocks 433 - 252 Net Cultivated Area (M/Ha) 7.5 0.6 2.7 Gross Cultivated Area (M/Ha) 10.9 1.0 3.6 No. of Operational Holdings (M) 5.2 0.6 2.0 Landholdings (Z Faruers/Z Area) Small (below 1 ha) 76.2/31.9 54.7/14.2 59.7/19.1 Semi-Medium (1-4 ha) 21.1/46.1 37.2/45.5 37.8/56.0 Medium (4-10 ha) 2.3/16.7 6.8/24.5 2.4/12.7 Large (10 ha and above) 0.3/ 5.3 1.3/15.8 0.1/12.2 Department of Agriculture: Staffing of Extension Services Uttar a/ Himachal Pradesh Pradesh Assam Headquarters a/ Additional Director Existing 0 0 1 Incremental under NAEP- IIT 1 1 0 Total 1 1 1 SMS (DDA/JDA) Existing 3 3 2 Incremental under NAEP- III 1 6 5 e/ Total 4 9 7 Zonal/Divisional Jt Director Existing 0 - 5 Incremental under NAEP- III 4 - 0 Total 4 - 5 Deputy Director/SMS Existing 4 - 0 Incremental under NAEP- III 16 - 10 f/ Total 20 - 10  -58- AM= I Page 2 of 2 Uttar a/ Himachal Pradesh Pradesh Assam District DAO Existing 6 2 14 Incremental under NAEP- III 1S 10 0 TotaL 21 12 14 SNS Existing 42 b/ 2 23 Incremental under NAEP- III 42 41 5 Total 84 43 28 Subdivision SDAEO Existing 0 - 48 Incremental under NAEP- III 85 - 0 Total 85 - 48 SMS Existing 9 c/ - 62 Incremental under NAEP- III 211 - 42 Total 220 - 104 Field AEO Existing 425 207 305 Incremental under NAEP- III 123 141 50 Total 548 348 355 VEW Existing 203 158 2,444 Incremental under NAEP- III 4,095 842 400 Total 4,298 1,000 2,844 M&E Staff HQ/Divisional Level Existing 0 1 4 Incremental under NAEP- III 10 4 4 Total 10 5 8 Field Level Existing 0 0 31 Incremental under NAEP- III 50 26 0 Total 50 26 31 Training and Information HQ/Divisional Level Existing 0 0 0 Incremental under NAEP- III 3 d/ 10 5 h/ Total 3 10 5 Training Center Existing - - - Incremental under NAEP- III - - - Total, a/ IncLudes only Project Area of UP (Four Eastern Divisions). b/ Includes existing Horticultural and Plant Protection Staff who would serve as SMS. c/ For 55 teams of 4 SMS per team. d/ Only senior staff included. e/ One senior SMS training, 4 civil engineers. fl One SMS Agronomy, one Farm Input Coordinator SHS, per zone. gl 7 SMS Agronomy/Plant Protection to complete the 35 SMS teams and 35 Horticultural/Special Subject SMS (20 phased in after mid-term review). h/ Farm Information Officers. j/ Excludes hill zone.  - 59 - ANNE 2 Page 1 of 4 INDIA NATIONAL AGRICULTURL METENSION PROJECT (Re. Thousand) A. Sumary Accounts by Year soee Cens foreign Exchenp 1. INVESTNT COSTS A CIVIL OILS - 54.478,0 107.721.0 l1.470.0 ul.Io.o 29.550.0 364,334.0 St 16 .21 7 * EOIPNtIT - . 420.2 6 u6.2 5.3 f0. I 1.236.0 s8. 0 22.3U3.5 10* 0 2.228.4 C. vEmituES - a.. 40.e iu. in. 0 t. SO. a 1. ToO. a - 48.070.0 20.0 o L614.0 L SPECIAL SIUBPROJECTS - 50. 000.0 50. 000 11 0 o. @00.0 I.000.0 15000. 0 5500. to. o S. 0 27. 500.0 L T. 1M5.0 5.705.4 1.65.8 10.397.7 11.521.1 -0.tlr. 43.5S.4 0.0 to - - -- - -------- -- - - - - - - - - - - - -- - - - -- - - - --- ----.-- ---------- -. Total I"ESIENIT COSTS U.50 136. 13.6 195.421.1 25.967.7 225.574.1 190.5565.6 1. 04.356.9 S. 57. 567. 1 II. tCIENI COSTS A. INC. SILMIES A ttasulCEs 2. 430.0 t3 590.9 57. 224.6 75.003 4 77. 065. 4 71230. 2 20. 704.5 o. o 0.0 L TRAVELLING ALLOWACS 100. 0 10.uB.13 I1LSW67 22.!27.1 25.317.1 25.317. 1 103.23L to 0.0 C VENICLE OPEN. EXPENSES 250.0 2.35L0 5.230.0 S.3510 5.950.0 5. 95.0 2o 266.0 1 0 2. 82. 8 :. OTNER OPEN. EXPENSES 230.0 1. 744.0 3.6O6 62 349.4 9.424.2 I0. S2.2 32.37L4 5. 0 1. S18 ,- --- - - - - - - - - - - - - - - -- - - --- --------- -- ---------- - - - ------ - - - - - - -- ---- Total RECUImRENT COSTS 3. 5l0. o 45.L 2.2 1. 206 . 19. 824 9U IT1. 76 7 120.319. 482. 05.2 0. 4. 247. 5 Total BASEtINE COsTS 4. 195.0 162. 125.6 260. 62Qa0 395. 797. 6 343. 330.6 2 It. 65. I 1. 116 962. 1 4. I 61.614.7 Phyical Contingries 97.5 4. 30.! 8.210.7 7.963.2 . 123.2 3.404.8 2L 0C.s 5.8 1.715.7 Price Continuacies l50.2 I5. 062.3 4 462.4 72.548.8 7.031. 3 61.07. 3 275.382.3 3.1 8.530.4 Total PRodECT COSTS 4. 442.7 202. 02 6 225. 201.0 476. 309. 6 420.465.9 3U. 93. I t. 822.574.9 4. 0 72. 320.8 *.s.. ........ **g...a...a..... . -t . W. --a a ............ t w............ . Tame 262 2 1124.2 4.667.7 7.0l7.9 5.618.9 4.725.7 25.402.7 0.0 0.0 Ferei1n Eachange 45.1 1. 411.2 16.094.4 19. 096. 7 14.062.1 11.411.4 72.120.6 0. 0 0.0 Aprit A. 1366 19:42 B. Project Cost Summary IRUPEES '0001 fUss I000I 2 Total -------I---- F- - ---------------------- -- I foroeign aev. Local Foreign Total Local Foreign Total Euchenge Costs *~~~~."ms a... s .=, ss=:: .............. =::==:= :==,w==mz - =-=====. =-==c===: :=,=,= A. EXTENISION SERVICES 777.04 5 27.960.8 S. 055. 3 59.776.5 2. 150.8 Ct.927.2 3 53 U. TRAINING I1I.347. 7 4.317.4 123.665. 1 9. 180 B 332.1 9.512.7 3 8 C ADAPTIVE RESEARCH 2.710.0 90. 0 2.C00. 0 206.5 5 9 215.4 3 0 0. HIfimRIIIG AND EVALUATION 17.022. 1 547.5 17.569.6 1. 309. 4 42. 1 1.351.5 3 1 E INFONKATION SERVICES 16.473.2 l.3N8.9 17.C72.1 1.27. 2 ICT7. 1.374.6 C F. SPECIAL SU8PRWECTS SPECIAL SUBPROJECTS 522.500.0 27.500.0 550.000. 0 40. 192. 3 2. 1t15.4 42.307.7 5 36 Sub-Total SPECIAL SUBPROJECTS 522.500.0 27.500. 0 550.000. 0 40. 192. 3 2. 115.4 42.307.7 5 36 Total BASELINE COSTS 1.455. 147.4 61.814.7 1. 516 92. 1 111.934.4 4.755.0 116.689.4 4 too Physicsl Contingencie 27. 914.B 1.715.7 29.630.5 2. 147. 3 132.0 2.279.3 6 2 Price Contingenciss 267.391.3 6. 590.4 275.962.3 20.56U.I 560.6 21.223 4 3 16 Total PROJECT COSTS 1.750.454.1 72.120. 8 1.822.574. 9 134.650.3 5.547.8 140.198 1 4 120 A=p=ril 1966x.wag 1142 = C-M ===- M..-42.. :,,=== April &. 1fiM 12 42  -60 - ANNEX 2 Page 2 of 4 INDIA NATIONAL AGRICULTURAL EXTENSION PROJECT UTTAR PRADESH SUBPROJECT (Re. Thousand) A. Summary Accounts by Year 6am _ ust. Foresig Eachligs 1 2 3 4 5 5 Total I hunt ti., ..... . -s- | * -.3 ..m.u.gm, ,.... ., .s....... ........... 1. INVESTNENT COSTS ________________ A. CIVLt UMS - 34 776.0 6. 213.0 66e 016.0 34.us5.@ 17.300.0 218.317.0 1.0 10.815.9 IL EOU IPIENT - 4.094.5 5.676,0 4. 092.5 9o0. o 14.843.0 o 0. 0 1. 44.3 C. VEHICLES - 10210.0 9,100.0 s.050.0 1.7OO.0 * 26,050.0 20.0 5.212.0 D. TIN; 400.0 1.671.4 3,481.4 S.434.4 s.860. 2 5.414.7 22.256LI 0.0 0.0 Total INVESTNNT COSTS 400.0 50. 751.9 1.474.4 80. 6s5.3 43. 490. 2 22.714. 7 279.486. 1 6. 3 17.512. 2 IL. HECOIIIUET COSTS _______________ A. INCRE SALAIES A ALLOWANCES 60.0 19.7n5.9 38 .444. 4.444.I8 4. 886. 8 4n. 86. 8 206 046 3 0e0 0. 0 L 7TVELLING aLLLOANCES 260.0 7.912.8 14.562.3 I 432. 7 12.222. 7 19.222.7 77.613.2 0.0 0. 0 C. VEHICLE OPEL EXPENSES 130.0 1. 580 2.631.0 3. 29. 0 3.29. 0 3. 295. 0 14.233.0 e 0.0 1. 423. 3 6. OTNEE WEt EXIPSES 120.0 680.0 1,926 0 3.s54.5 5.207.0 1.806.0 172B4. 5 s a 3 2 Total IIECRRENT COSTS 1.140.0 29.331.7 57.57.3 72.710 77.611. 5 78.210.1 317. 179.0 0. 7 2.287.5 Total eUAELIHE CUSTS 1. 140.0 60.683.6 139. 041.7 153,372.9 121. 101. 7 100.925.2 191.6ff.1 3. 3 19.799.7 Physical C.ti gu-log 52.5 2.734.3 4.476.0 4.646.5 2.892. 6 1 861.5 16,663.1 5.9 990.0 Price Canti1gmisI 55.7 9,168.4 27,919.2 45 17639 45.005. 1 43.611.1 170.955.2 2.9 5.003.4 Total PRECT COSTS 1. 646.2 92. 604.3 171 436 9 203. 196.2 168 999. 5 146.398.6 784. 283. 7 3. 3 25. 793. 1 .9.... M....C M........ .......: =ss2s :ssc= =w=-==c *-...W - 2= ==c =e-== Tox.. 14.1 1.237.8 2. 12.4 2. 369.7 1.496. I 959.3 8.239.8 0 0 0. 0 Foreign Exchanga 20.6 S. 108.4 7,410.2 7,01. 4 3.971. 8 2.220.5 25.793.1 0 0 0. April 8, IU tS 9: 46 B. Project Cost Summary tRUPEES '0001 (US$ 000 x Total --- ___s ___n Base Local Foreign Total Local Foreign Total Exchanrg Costs sss-wssss~~ ........ .......s *-ft-e= :-: :==z=-r= ===c:r:- -::-2= & EXTENSION SERVICES 510.815. 8 17. 2. 4 527.845. 0 39. 293.5 1. 310. 0 40. 603. 5 3 88 L. *RINIII 44.746.1 1.514.2 4S. 260.2 3.442.0 116. s 3.558.5 3 6 C. IIIITOIHI AND EVALUATION 10.29A6. 356.8 10.655.3 792.2 27.4 Big. 6 3 2 D. ADAPTIVE USEARC1 1.900.0 - 1,900.0 146.2 - 146.2 - 0 E. IHFOtATION SERVICES 9. 105.2 9. d 10.004. 6 700.4 69.2 769. 6 9 2 Total ASEULINE COSTS 576.865.4 19.799.. 596 661. I 44. 374.3 1. 523. 1 45. 897. 3 100 Physical Contingurclm 15.673.1 990.0