India - UP Diversified Agriculture Support (DASP)

Report No. PIC1797 Project Name India-UP Diversified Agriculture Support (DASP) Region South Asia Sector Agriculture Project ID INPA35824 Implementing Agency Office of the Agriculture Production Commissioner, Government of U.P. (GOUP) Contact: B. N. Tiwari Agriculture Production Commissioner, GOUP Lucknow 226001 Telephone: 91-522-242421 Fax 91-522-242143 Date PID Prepared March, 1995 Projected Board Date October, 1996 1. Project Objectives. The main objectives of the proposed project would be to assist GOUP in accelerating agricultural diversification in line with comparative advantage of different agro-ecological zones. The strategy in pursuit of this objective would be to: (a) develop and disseminate technologies that exploit market-led opportunities for agricultural growth in crops, horticulture, livestock and agro-processing in ways that alleviate poverty and support environmentally sustainable development; (b) support expansion and rehabilitation of rural infrastructure; (c) test innovative approaches to beneficiary participation using user groups and /or Panchyati Raj institutions; and (d) integrate project investments with policies and legislative/regulatory framework that provides enabling environment for greater private sector participation especially in post-harvest value added activities including agro-processing. 2. Project Description. The U.P. DASP would be a sector investment loan, financing an agreed state-wide program to accelerate agricultural diversification supported by institutional upgrading and policy adjustment lending to greater private sector participation. The main components of the project would be: (a) Strengthening of the Technology Base. The key activities to be supported would include: (i) strengthening of agricultural research and extension with emphasis on making these services more demand driven and accountable to beneficiaries; and (ii) improving availability of high-quality planting material for key crops, fruits and vegetables through private sector; (b) Improved Natural Resource Management. This component would aim to improve farm productivity through: (i) pilot testing of  improved drainage network in Eastern U.P.; and (ii) supporting measures to improve efficiency of nutrient use and reduction of alkalinity; (c) Support for Growth Enhancing Equity Generating Programs. Financially strong income generating activities that largely benefit the poor, especially women, would be supported. Other selection criteria included: prospects for profitable markets both for fresh and processed products; and significant opportunities for productivity gains through technological change and improved farm management practices. The specific activities to be supported would include: Livestock. Investment focus would be to achieve increases in productivity and value addition through: (i) breed improvement; (ii) better nutrition; (iii) improved health care; and (iv) improved processing and marketing of livestock products through private sector; Sericulture. The main thrust of the investment program would be to (i) motivate and train farmers in improved production technique through NGOs; (ii) improve facilities for post- cocoon production/processing; (iii) increase facilities for production of planting material and silkworm seed; and (iv) support adaptive research through existing sericulture research station. Horticulture. The project would assist with rehabilitation and replanting of aging trees of apples (temperate fruit production area of hill districts), mango, lychee and amla (fruit production areas of western and central plains) and citrus (arid to semi-arid areas of Bundelkhad region). Legume and Oil Seeds Crops in Arid to Semi-arid District of Bundelkhad Region. Increases in productivity would be achieved through support for improved land management and water harvesting techniques; availability of good quality seed and promotion of improved farm management practices based on established technologies. (d) Support for Post-harvest Value Addition Activities through Private Sector. The project would assist with establishment of: (i) a venture capital fund to promote private investment in post-harvest storage and handling facilities and agro- processing; (ii) joint government-industry agri-business project development facility to assist entrepreneurs in developing new businesses or enlarging current operations; (iii) training of entrepreneurs in agri-business; and (iv) training and institutional support for the formation of farmers groups and/or associations for greater vertical integration of farm production activities with agro- processing. (e) Rural Infrastructure Development. - 2-  Rural Roads. The roads sub-component is being designed in such a way that the project districts would benefit by better accessibility to markets, especially for the marketing of perishable produce. It is anticipated that 75-80w of the investment under this sub-component would go towards rehabilitation or upgrading of existing roads. Rural Markets. The project would assist with the upgrading of a selected number (to be decided) of haat-painths (village markets) in project districts under the control of village panchayats. In addition, assistance would also be provided for construction of some market yards and two state-of-the-art fruit and vegetable markets in partnerships with private sector. (f) Project Coordination. The project would finance establishment of a Project Coordination Unit (PCU), headed by a senior staff member at the level of Secretary to GOUP, in the office of Agriculture Production Commissioner (APC). PCU would coordinate implementation of all project activities, organize monitoring and evaluation, and liaise with other line departments of GOUP, NGOs, and private sector. 3. Project Implementation. The project components would be implemented by the individual line departments of GOUP or other agencies under the overall direction of the Agricultural Production Commissioner (APC). He would be supported by PCU with responsibility for planning, coordination, monitoring and financial control and agricultural policy analysis. To guide project implementation three committees would be established, two at the state level and one at district/block level. The first would be the Project Steering Committee (PST), to be headed by the Chief Secretary of the state, with other senior Secretaries and three non-officials, representing farmers organizations, NGOs and private sector, as members. PST would sanction the annual work plans, review implementation progress, resolve inter-departmental conflicts and provide policy guidance. The second, Project Management Committee (PMC), with the APC as the chairperson and including departmental heads as members, would prepare annual plans and address all implementation issues. The third, the Project Implementation Liaison Committee (PILC) would operate at district/block level with the District Magistrate as chairperson and heads of other operational departments as members. The PILC would also have representation from local government, NGOs and farmers organizations. This committee would promote inter-agency cooperation and farmer participation in project activities at the farm level. 4. Project Costs and Financing. Total project base costs, inclusive of Government/beneficiary funded maintenance and Government funded staff salaries and overheads, are estimated at about US$ 240 million. A proposed IDA Credit of about US$ 190 million would finance 79t of project costs net-of-taxes. Disbursements under the Credit would be against civil works, equipment and vehicles, agricultural research and extension, training, and establishment of venture capital fund and consultancies. Civil works would be small parcels and geographically dispersed. -3-  5. Environmental Impact. The project has been classified as +B+ as, most of the components are not expected to have an adverse environmental impact. The pilot program for drainage improvement in Eastern UP would be closely monitored to assess improvements in soils conditions and its impact on increasing farm productivity. The project is expected to have a positive impact on the environment through improvement of farm management practices, especially those related to land management. Potential negative impacts resulting from increased use of applied inputs (pesticides and fertilizers) due to intensification of agriculture would be minimized through: (i) development and introduction of Integrated Pest Management (IPM) systems, (ii) strengthening of soil analysis and advisory capacity to ensure balanced use of nutrients; and (iii) promotion of rotational cropping incorporating nitrogen-fixing leguminous green manure crops and composting. 6. NGO and Beneficiary Participation. The project would promote involvement of both intermediary and grassroots NGOs. Grassroots NGOs would be trained by intermediary NGOs and together would play an important role in motivating and training farmers and ensuring their full participation in project activities. They would also assist in delivery of support services, especially in areas where public services have failed to make significant gains in the past. 7. Impact on Women. As in most other states in India, rural women in UP play an important role in agriculture. They form the predominant labor force in horticulture, livestock, sericulture and post-harvest activities. As these sub-sectors are being especially targeted for support under the project, they would benefit through greater access to resources, technical know-how and opportunities for jobs. To ensure that women participate actively in the design, planning and implementation of project activities, a position for Women Development Officer would be created in PCU. The incumbent would be responsible for planning and coordination of training, awareness campaigns and developing close links with other on-going poverty alleviation/social programs. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington D.C. 20433 Telephone No.: (202)458-5454 Fax No.: (202)522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. ENVIRONMENTAL OVERVIEW OF PROJECTS IN THE IBRD/IDA LENDING PROGRAM: ENVIRONMENTAL ISSUES Country: India Project ID: IN-PA-35824 - 4-  Project: UP Diversified Agriculture Support Project Total Project Cost: US$ 240 M Credit Amount: US$ 190 M Appraisal Date: November, 1995 Board Date: October, 1996 Managing Division: SA2AG Sector: Agriculture Lending Instrument: SIM EA Category: B Date Assi+d: February, 1995 DATA SHEET PREPARED: March 28, 1995 MAJOR PROJECT COMPONENTS: The project would support: (a) strengthening of technology base for sustainable growth through improved research, extension, availability of high quality seed/planting material and improved natural resource management practices and; (b) support for growth enhancing programs covering selected commodities (oil seeds, legumes, livestock, horticulture, sericulture) that largely benefit the rural poor especially women; (c) strengthening of post-harvest value addition activities through private sector development; (d) rural infrastructure development; and (e) establishment of Project Coordination Unit. MAJOR ENVIRONMENTAL ISSUES: The project is expected to be environmentally positive. It would promote measures for improved land and on-farm water management practices. The main focus of the rural roads component would be on rehabilitation of roads already constructed with the purpose of improving access to and between rural markets in areas already developed for agriculture. The technology development and dissemination activities would promote technologies for sustainable development, including Integrated Pest Management (IPM) practices. Whereever appropriate, agro-processing enterprises to be supported under the project would be required to obtain all necessary clearances from the State Pollution Control Board. OTHER ENVIRONMENTAL ISSUES: None PROPOSED ACTIONS: The majority of project investments are in priority sub-sectors over a broad geographic area which do not require specific EAs. However, the project would include support to strengthen GOUP+s office of the Agriculture Production Commissioner to carry out environmental oversight (in the crop, livestock, horticulture and sericulture sub-sectors) through existing administrative structures and arrangements in GOUP. EA may be required for the construction and rehabilitation of rural roads. Mitigation actions would be recommended, wherever adverse conditions arise from the proposed roads layout. JUSTIFICATION/RATIONALE FOR ENVIRONMENTAL CATEGORY: Designation of B category is given in view of its limited environmental impact potential. - 5 -