India - Madhya Pradesh Agricultural Extension and Research Project

Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2011-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF INDIA FOR THE MADHYA PRADESH AGRICULTURAL EXTENSION AND RESEARCH.PROJECT May 2, 1977 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.  CURRENCY EQUIVALENTS (as at April 28, 1977) Rs 1.00 = Paise 100 Rs 1.00 = US$0.1145 US$1.00 = Rs 8.73 Rs 1 million = US$114,500 (Since September 24, 1975, the Rupee has been offi- cially valued relative to a "basket" of currencies. As these currencies are now floating, the U.S. Dollar/ Rupee exchange rate is subject to change. Conversions in the Appraisal Report were made at US$1 to Rs 9.00). FISCAL YEAR April 1 - March 31 ABBREVIATIONS ADA - Additional Director/s of Agriculture AEO - Agricultural Extension Officer/s GOI - Government of India GOMP - Government of Madhya Pradesh JDA - Joint Director/s of Agriculture JNAU - Jawaharlal Nehru Agricultural University SMS - Suject Matter Specialist VLW - Village Level Worker/s CROP SEASON Kharif - Summer Rainy Season Rabi - Winter Dry Season  FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MADHYA PRADESH AGRICULTURAL EXTENSION AND RESEARCH PROJECT 1. I submit the following report and recommendation on a proposed development credit to India for the equivalent of US$10 million on standard IDA terms, to help finance a project for the strengthening and expansion of agricultural extension services and upgrading of adaptive research facilities in the State of Madhya Pradesh. The proceeds of this credit would be channelled to the Government of Madhya Pradesh in accordance with the Government of India's standard terms and arrangements for financing of state development projects. PART I - THE ECONOMY 2. An economic report, "Economic Situation and Prospects of India" (1529-IN dated April 25, 1977), will be distributed to the Executive Directors about May 4, 1977. Country data sheets are attached as Annex I. Background 3. India is exceptional among the Bank Group's member countries for its size and diversity; the country is divided into more than 20 States with a population of some 640 million speaking over 60 languages. Since Independ- ence the trend in growth of GNP has been about 3.5% per annum, or a little over 1% per annum in per capita terms, while over the five years 1971/72 - 1975/76 it fell to as low as 2.5% per annum, in spite of the record harvest of 1975/76. This unsatisfactory performance is in part the result of the low availability of investible resources: the net transfer of resources from abroad has never been above 3% of GNP, and fell to as little as 0.8% between 1969/70 and 1973/74; similarly, while India's domestic savings ef- fort compares well with other countries at the same average income levels, the rate has very rarely exceeded 17% of GNP. The investment rate puts India in the lower third of all developing countries. More significant perhaps is the fact that in spite of a marked rise in the investment rate from about 10% in the early 1950's to about 18% over the past fifteen years, the trend in GNP growth has remained about the same. This indicates a marked decline in the efficiency of capital use, as a result of increasing capacity underutilization, long project gestation, and increased emphasis on relatively capital intensive projects and sectors. 4. Since Independence the growth of the socio-economic infrastructure (transport, education, health services, etc.) has been impressive, but has often been achieved at high cost and has yielded results of variable quality. 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.  Many industrial and agricultural investment schemes have been highly successful, but others have taken excessively long to be completed and have operated well below full capacity. In some regions of the country, growth and structural change have been rapid and compare favorably with developments in many other parts of the world; in other regions there has been stagnation, and in some, decline. Although national income has increased in most years, there has been no rise in the living standards of the vast mass of rural and urban poor, conservatively estimated at 200 million people with per capita incomes of US$70 per annum (converted at the official exchange rate) and US$250 on a purchasing power parity basis. 5. The structure of the economy has been slow to change. Agriculture remains the dominant sector, with its share of national product declining only gradually from about 50% to 42% over the last twenty years. The share of manufacturing industry has increased only slowly and, since the late 1960s, has remained approximately constant at about 16%. There has, however, been a shift in the composition of manufacturing production, with consumer, inter- mediate, and capital goods now contributing about one third each, compared with an overwhelming preponderance of consumer goods 25 years ago. Recent Trends 6. In March, 1977, a party other than Congress formed a Government for the first time since Independence. Undoubtedly, changes in economic policies and emphasis will be formulated in the course of the next few months. The state of the economy was not a prominent election issue; in fact the economy was generally stronger than at any time in the last six years. Although the growth of GDP in 1967/77 is not expected to have exceeded 2%, this was on top of the very good growth of 8.8% in 1975/76. Agricultural production is ex- pected to have fallen by about 3%, but only because of the return to a more normal harvest of 110-114 million tons of foodgrains after the record 121 million tons of the previous year. Industrial growth was around 10% in 1976/77, which is significantly above the rates achieved in the late 1960's and early 1970's. Exports continued their bright performance, rising by 18% in US dol- lars and 12% in volume terms. The overall resource position, with record foreign exchange and foodgrain reserves, is exceptionally strong, and gives the Government considerable room for maneuver. 7. In agriculture the bumper crop of 1975/76 was largely due to remarkably good weather conditions; the good crop in 1976/77 - a foodgrain harvest in the region of 110 million tons would be the second largest on record - was produced under generally normal weather. A conspicuous change was the increase in fertilizer use, which rose by more than 20% over 1975/76, following marked declines in fertilizer prices. Industrial production bene- fited from fewer labor disputes, fuller utilization of installed capacity in both private and public sectors, a more liberal import policy, relatively good power availability, and increased demand because of higher consumer incomes, expanded exports and higher public expenditures. However, whole- sale prices which had fallen 14% from September, 1974 through March 1976,  rose 11% from the end of March to December, 1976 and continued rising into 1977. It is not yet clear whether this upsurge indicates a new inflationary trend or merely a correction of the previous sharp decline in the relative prices of a range of agricultural commodities. 8. The balance of payments situation has improved dramatically since the 1973-1975 period. In 1975/76 the trade deficit was $1,530 million, which was more than covered by US$1,560 million in net aid, US$205 million in net purchases of currency from the IMF, and US$559 million in net miscellaneous capital and invisibles (mostly private remittances); indeed, this large aggregate net resource inflow led to a US$794 million increase in foreign ex- change reserves, to a level of US$2.2 billion. In 1976/77, the trade deficit is estimated to have fallen by US$1,080 million, due to a rise of US$845 million in exports and also to a fall of US$235 million in imports, primarily because of lower prices and volumes of foodgrains and fertilizer imports. The decreased trade deficit, along with a further increase in the net inflow of miscellaneous capital and invisibles from abroad of US$540 million, more than offset the fall of US$350 million in net aid and the substantial repurchases of currency from the IMF, and allowed a US$1.5 billion addition to reserves, which reached a level of US$3.7 billion at the end of March 1977. Development Prospects 9. The favorable economic situation gives the new Government the op- portunity to address the longer-term constraints on growth. The basic task is to raise the overall rate of growth from its historic range of 3% to 4%. In the long run this will require raising more resources for investment. But it will also be important to achieve significantly better utilization of avail- able resources, partly through an immediate boost to industrial demand. 10. In agriculture, the basic problem remains that, despite the record foodgrain crop in 1975/76 and the good crop in 1976/77, the long-term growth rate of foodgrain production has been unacceptablly low, at about 2.5% per annum over the last seventeen years, and only 2% in the last ten. This has meant that only in good years has there been any margin of production to cater to per capita growth in food consumption, and in normal years it has been necessary to import food. There is considerable scope for stepping up growth both by increasing the use of inputs and by raising the productivity of existing capacity. Three promising developments in regard to the first are the sharply higher outlays on irrigation in the Fifth Plan Period along with a renewed determination to complete projects expeditiously; the indica- tions that private investment in tubewells is picking up again after a slow- down in the early 1970's; and the recent recovery of fertilizer demand. With regard to more productive use of existing capacity, there is increased aware- ness in the Government that the benefits of irrigation projects can be much increased not only through command area development but also through more efficient design and operation of major surface irrigation infrastructure. Also, hopes have been generated for increasing productivity on both irrigated and rainfed farms through a reorganized and improved extension and research system, which has been recently introduced in several States in northern and eastern India.  - 4 - 11. A strong effort to raise agricultural growth is essential, not only to meet food requirements, but also because of the pervasive influence of agriculture on the levels of activity in other sectors of the economy. This effort must also be so structured as to increase the incomes of small and marginal farmers, in order to increase production since they operate 25% of the cultivated land and account for somewhat more than 25% of production, and for welfare reasons, since they make up about 70% of rural population and constitute the majority of those living below the poverty level. 12. The industrial sector is poised for rapid growth, as the most serious constraints on the supply side have been removed by the improved situation with respect to power, coal and imported raw materials and components. There has been a progressive liberalization of controls and the 1976/77 Central Budget announced a reduction of some taxes on private industry. In many cases management of public enterprises has improved, as is reflected in their markedly higher production and profitability as a group. In the medium term it is the demand for industrial output that will determine industrial growth. In certain industries, export demand will provide a strong pull on production; this is true, for example, for iron and steel, certain chemicals, some electrical equipment, processed agricultural products, and vehicles. But the impact of increased exports on overall industrial demand will grow only slowly given the current low share of exports in sales. If the higher growth and productivity in agriculture discussed earlier were to materialize, it would provide a significant stimulus to industry. It is difficult to specify the linkages explicitly; but because of the large share that agri- culture holds in GNP, the coefficients do not have to be large for agricul- tural growth and the concomitant growth in demand for industrially produced inputs and mass consumption goods to boost overall industrial demand signi- ficantly. A higher public deficit and increased public investments are the instruments most directly under Government control, and also those that can increase demand for industrial products most immediately. The interim budget of the new Government moves strongly in this direction with a 240% increase in the planned budget deficit over 1976/77. 13. Improvement in the supply of energy augurs well for India's ability to meet the needs of a more rapidly growing economy. Organization- al and transportation problems in the coal industry have largely been over- come, production is sufficient to meet demand, stocks are comfortable, and the industry has good prospects for meeting both domestic and export demand. Supply of electricity continues to be a concern, because of the vulnerability of hydro power to variations in the monsoon and the continued existence of local shortages, even when the overall power situation is satisfactory. But the severe power supply constraints of the past have been relaxed for the moment at least, and several institutional improvements promise to reduce the future incidence of shortages: underutilization of capacity has been virtually eliminated in well-established power stations; progress has been made in the organized exchange of power between states thus relieving local- ized power shortages; and the problems of slow implementation of power invest- ment due to delayed delivery of materials and equipment have virtually dis- appeared. In addition, the delays caused by the inability of State Electricity  -5- Boards to finance projects expeditiously have been eased by their improved financial position following tariff increases, and by increased Plan outlays by the Central Government. The medium term prospects for the oil and gas sector have been further improved by major new finds of oil and gas near the large offshore Bombay High field. Crude oil from Bombay High was brought to shore for the first time in May 1976; production reached an annual rate of 2 million tons by March 1977, and will rise to a level of 12-13 million tons by 1984/85. Although India will continue to import crude at or somewhat above the current level, much of the foreign exchange burden of rapidly rising imports will be avoided by the development of these resources. Prospects are also bright for further discoveries offshore, given the current high level of exploration activity. 14. Underlying all other development issues is that of population. Al- though India's population growth rate of a little over 2% is not high in com- parison with most LDCs, the size of the absolute increment - 13 million annually - is daunting. It appears, however, that population growth may have passed its peak in the 1960's, and it is expected to continue to slow down, both because the birth rate will continue to decline and because the death rate will not fall as steeply as in the past. With a sustained family planning effort, it should be possible to lower the population growth rate to 1.1% per annum by the end of the century. Our "best guess" projection of India's population by 2000 is 880 million. Many of the benefits of family planning policy will only be felt beyond the turn of the century, but the decline in fertility will bring about an early change in the age structure of the popu- lation. The school age group will grow more slowly or not at all after 1981 thereby reducing the pressures on the primary and secondary education system. The labor force, however, will continue to grow at a fast rate until the end of the century. 15. India's balance of payments position should be comfortable for the next few years. The combination of past global inflation and increased ex- ports have reduced the proportion of export earnings needed for debt service from 30% in 1970/71 to 16% in 1976/77. The ratio is not likely to rise above this level in the next few years. Given continuing favorable policies, the volume of exports should continue to grow by 7% to 10% annually in the near future; and import needs for fertilizer, POL and foodgrains will continue to require a diminishing proportion of available foreign exchange. The large inflow of private remittances shows no immediate signs of declining and should continue to bolster the foreign exchange position in the medium term. Imports, including a variety of capital goods, have already been liberalized signifi- cantly. Increased public investment and a revival of the domestic economy is likely to generate substantial additional import demand. However, this should be quite manageable, given the currently comfortable foreign exchange position, bright export prospects, and continuation of the current real level of net aid. The present situation presents an opportunity to raise the level of investment and, consequently, reach a more satisfactory level of long term growth.  - 6 - PART II - BANK GROUP OPERATIONS IN INDIA 16. Since 1949, the Bank Group has made 49 loans and 80 development credits to India totalling US$1,751 million and US$4,112 million (both net of cancellation), respectively. Of these amounts, US$808 million has been repaid, and US$1,524 million was still undisbursed as of March 31, 1977. Annex II contains a summary statement of disbursements as of March 31, 1977, and notes on the execution of ongoing projects. 17. Since 1957, IFC has made 14 commitments in India totalling US$58.4 million, of which US$12.4 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$31.5 million, US$25.0 mil- lion represents loans and US$6.5 million equity. A summary statement of IFC operations as of March 31, 1977, is also included in Annex II (page 2). 18. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. Family planning, education, water supply development, and urban investments have also received Bank Group support in recent years. 19. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, urban development and water supply remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, command area development of existing irrigation schemes, intensification and streamlining of extension systems, and seed production form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on agriculture-, export- and energy-related projects. 20. The need for a substantial net transfer of external resources in support of India's economy has been a recurrent theme of Bank economic re- ports and of the discussions within the India Consortium. Thanks in large part to the response of the aid community, India has successfully adjusted  - 7 - to the changed world price situation. However, the basic need for readily usable foreign exchange assistance, to augment domestic resources, assure effective utilization of existing capacity, stimulate investment and acceler- ate economic growth, remains. As in the past, Bank Group assistance for projects in India should include, as appropriate, the financing of local expenditures. India imports relatively few capital goods because of the capacity of the domestic capital goods industry. The import component of projects tends to be especially low in such high-priority areas as agriculture, education, and family planning. For the Bank Group to be able to make an appropriate contribution to the financing of projects in these sectors, it is important to cover a proportion of local expenditures. 21. It is clear from the review of the Indian economy that as much as possible of India's external capital requirements should be provided on con- cessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and some Bank lending to India, for which the country is creditworthy, is appropriate. As of March 31, 1977, the loans to India held by the Bank totaled US$968 mil- lion, of which US$512 million remained to be disbursed, leaving a net amount outstanding of US$456 million. 22. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12Z of net disbursements as compared with an estimated 58%, 24% and 29%, respectively, in 1975/76. On March 31, 1976, India's outstanding and disbursed external public debt was US$13.1 billion, of which the Bank Group's share was 25%. The Bank Group's share is expected to remain around this level in the future. Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1975/76, about 15% of India's total debt service payments were to the Bank Group. PART III - AGRICULTURE IN INDIA AND MADHYA PRADESH 23. Agriculture is India's most important sector. It provides employ- ment for approximately 70% of the population, contributes about 45% to GNP, and provides a major share of exports. GOI's emphasis in the agricultural sector has been on increasing foodgrain output through improved yields resulting from more intensive use of seed of high yielding varieties (HYV), fertilizer, pesticides and irrigation. With self-sufficiency in food as a national objective, investments in foodgrain production have been given top priority by Government and will continue to be the focus of national atten- tion for the foreseeable future.  - 8 - 24. Since independence, the overall growth of agricultural production has averaged 3% per annum. This rate has been very much affected by serious droughts in 1965 and 1966 and again in 1972 and 1973 and obscures considerable variations over shorter periods, between crops and between regions. The success of high yielding varieties produced increases in wheat production of about 20% per annum between 1967 and 1971. This "green revolution" primarily affected wheat, and was concentrated in north western India, very largely on account of the advanced state of agriculture in that area and the availability of irrigation. Efforts to spread the high yielding technology have been hampered by limited irrigation facilities and farm service, and supply insti- tutions operating at low levels of effectiveness. But the under-utilization of modern inputs is first a demand problem rather than one of sheer availability. In much of India, where yields are low, farmers are caught in a cycle of low productivity, low income and low investment; they are poorly placed to take on the risks associated with the new technology which is costly, particularly as it tends to yield low returns when applied under traditional cultural practices. 25. A way to help break this cycle is to raise standards of cultural practices, using resources already available to farmers, in particular abund- ant labor. The key to this approach is a strengthening and reorganization of existing agricultural research and extension services along the lines first tried on a limited area in three Bank Group assisted irrigation projects in Rajasthan and Madhya Pradesh (Ln. 1011-IN, Cr. 502-IN and CR. 562-IN). These projects showed dramatic production increases are possible by widespread improvement in such basic cultural practices as seedbed preparation, control of plant population and weeding. This advice is carried by a reorganized extension service which puts great emphasis on concentration of efforts, systematic and regular training, close supervision of staff at all levels, and a fixed schedule of visits to farmers' groups. Coupled with an expanded program of adaptive research, the system has the capacity to transmit appro- priate recommendations from researcher to the farmer quickly and effectively at little extra cost to Government. Once farmers increase their production and their confidence in the extension service grows, they can be expected to adopt the higher yielding and more costly technology based on purchased inputs and on-farm investments. 26. Present plans envisage that this approach to improving extension services will be introduced over a wide area of India in Bank Group assisted projects in 1976/77 and 1977/78. This project would extend the improved system to a large part of Madhya Pradesh. 27. Madhya Pradesh. Madhya Pradesh (MP), situated in the heart of India, is the largest state in land area, sixth in population and second largest in foodgrain production. Agriculture is the dominant economic activity, employing 80% of the population and contributing over half of the state's gross domestic product. The state has diverse agroclimatic regions and a diverse cropping pattern with significant production of rice, wheat, sorghum, millets, pulses and oilseeds. Over 80% of total cropped areas is under some form of foodgrain,  - 9 - most of which is rainfed. Irrigation is available only to 9% of net sown area. Tubewells account for less than 1% of the area irrigated. Cropping intensity is low, at 111%. A striking feature of agriculture in Madhya Pradesh is the low crop yields not only for pulses and coarse grains, but for rice and wheat as well, which in 1973/74 were under 0.8 tons per hectare, compared to the All-India average of over 1.1 tons per hectare for both crops. 28. Yields are not only low but have been slow to improve. While the total area under foodgrains has increased by about 20% over the last 20 years, total foodgrain production has increased only 23%. Even this small yield increase has been derived largely from irrigated land; rainfed yields have stagnated. Fertilizer consumption per cropped hectare is a tenth of that in the Punjab and 30% of the All-India average. 29. Madhya Pradesh shares with the rest of India the basic structural problems associated with variable rainfall patterns, a large proportion of small and fragmented holdings and a skewed distribution of land ownership. About half of all holdings are under 2 hectares each, representing only 10% of the area; 10% of holdings are above 10 hectares each accounting for 38% of the area. Land tenure arrangements are complex with tenancy and sharecropping prevalent. In addition, Madhya Pradesh has a high percentage of tribal people in the population. But these structural problems, which exist to a greater or lesser extent elsewhere, do not account fully for the low yields. Standards of cultural practices are low; the low yields under these practices make investing in modern inputs of questionable profitability; the resulting low incomes make even profitable investments difficult to finance and increase the reluctance of farmers to take the associated risks. 30. In the past, the strategy to raise productivity has been to encour- age the use of modern inputs--HYV seeds, fertilizer and irrigation. Although some farmers have adopted the use of these inputs, many have not, and overall yields have remained low. To redress this situation and to raise foodgrain production in the short run, emphasis needs to be placed on raising yields by transferring to farmers the knowhow of proven low cost, simple improvements. This can be achieved by improvements in agricultural extension methods. However, such improvement needs to be backed by an effective and responsive adaptive research program. The Government of Madhya Pradesh has recognized the advantages of this approach and has decided to reorganize and improve the extension service and the adaptive research program in a larger area of the State. The proposed project is aimed at assisting the Government in this task. Previous Bank Group Operations in Madhya Pradesh 31. The Bank Group has been involved in the agricultural sector in Madhya Pradesh through four previous IDA credits. Credit 391-IN (US$33.0 million), approved in June 1973, was to assist in financing on-farm invest- ments in minor irrigation and land levelling. Although there were initial delays in implementing the project, its progress has been satisfactory over- all. The credit was originally designed to provide US$31.5 million for minor  - 10 - irrigation investment and US$1.5 million for land levelling. However, credit demand for land levelling under the project was slow and most farmers carried out these activities with family labor. Consequently, US$1.2 million of unutilized funds were transferred to minor irrigation where demand was strong and the credit was subsequently completely disbursed. Credit 522-IN (US$16.4 million), approved in December 1974, supports development of dairy cooperatives in rural areas involving some 160,000 farm families throughout the State. Following initial delays in staff training at the National Dairy Development Board, which was also training staff under similar projects in Rajasthan and Karnataka, good progress is being made. At last supervision of this project, 110 new cooperatives had been established; design studies for plant construc- tion completed; contracts for livestock had been placed; and technical service improvements were in progress. Credit 562-IN (US$24 million), which was approved in June 1975, is designed to improve the efficiency of water util- ization in the command area of the Chambal river and bring additional areas under irrigation. The project also includes an extension component which has been successfully implemented and which has pioneered the way for this and a series of other extension oriented projects aimed at increasing yields through improving farmers' basic cultural practices. Finally, Credit 609-IN (US$4 million), approved in February 1976, is a technical assistance credit to assist in laying the groundwork for developing Madhya Pradesh's forestry resources. It includes studies to identify a sound resource base for pulp and paper manufacture and related industries, to develop suitable logging systems and to determine the optimal use of existing wood resources in the southern region of the State. Implementation of this project is satisfactoryO PART IV - THE PROJECT 32. The project was prepared by a Government of Madhya Pradesh (GOMP) working group assisted by Bank staff during 1975. It was appraised by IDA in October 1976. The Appraisal Report No. 1442a-IN, dated May 2, 1977, is being distributed separately. Negotiations were held in Washington from March 29 to April 4, 1977. The negotiating delegation for India was headed by Mr. V. Nayyar, Director, Department of Economic Affairs, Government of India. A credit and project summary is attached as Annex III, and a supplementary project data sheet is attached as Annex IV. 33. The proposed project is directed towards achieving, in the short term, sustained growth in agricultural output, particularly foodgrains, in 15 1/ of the 45 administrative districts in the State of Madhya Pradesh, covering approximately 7 million hectares of cropped land. Project emphasis would be on reorganizing and strengthening the State's extension services and reorienting research to provide farmers, on a regular and systematic basis, with advice on farming practices having an immediate impact on yields. 1/ There would in effect be 16 project districts as one administrative district would be divided into two project districts because of its large size.  - ii - 34. Tlhc proposed project would be executed over a five-year period. It includes: - reorganization and strengthening of agricultural extension through the provision of additional staff, training facilities, housing, offices, equipment and transportation; - upgrading and reorienting agricultural research, including adaptive research in five regional research stations and seven sub-stations through the provision of staff, housing, laboratory facilities, equipment and vehicles; and - provision of staff and equipment to evaluate and monitor project progress. Project Implementation 35. The Agricultural Production Commissioner has overall responsibility for agriculture in lladhya Pradesh. Under him the Department of Agriculture, headed by the Director, is responsible for agricultural extension. It would therefore, not be necessary to establish any new organization for project implementation. Similarly, the overall responsibility for agricultural research in Madhya Pradesh lies with the Vice-Chancellor of the Jawaharlal Nehru Agricultural University (JNAU). Under him the Director of Research of JNAU would be responsible for implementing the research component of the project. He would be assisted in this task by Associate Directors of Research located at each of the five regional research stations. 36. Coordination between extension and research would be ensured through a Project Coordinating Committee, as well as a Central Planning Committee to be established under the project (see Section 2.02 of the Project Agreement). The Project Coordinating Committee, chaired by the Agricultural Production Commissioner, would meet as often as necessary to review extension proposals and would be responsible for ensuring co-operation among various government organizations and JNAU. It would include the Project Director, as well as the relevant officials at the Secretary and Director level concerned with agricultural development, including the Vice-Chancellor of the JNAU. The Project Director would act as the Committee's Secretary. At the operational level, the Central. Planning Committee chaired by the Director of Agriculture and comprising the Director of Research, Project Director, head of the evaluation unit and other divisional and district extension and research officers concerned would be responsible for reviewing seasonal extension and research results including, in particular, field trials and demonstrations. It would also review and approve future research and extension programs as approved by regional planning committees (see para 37), assess input and credit supply requirements of extension programs and generally review overall progress. The Project Director, who is a member of the Central Planning Committee, would be responsible for bringing to the attention of the Project Coordinating Committee the detailed implications of future credit and input requirements.  - 12 - 37. Regional Planning Committees, chaired by Senior Divisional Joint Directors of Agriculture, would be established at each of the existing regional research stations within the project area (see para 40). The committees would meet as often as necessary with regional staff concerned to review and formu- late qxtension and research programs and submit proposals for approval of the Central Planning Committee (see Section 2.02 of the Project Agreement). Agricultural Extension 38. Under the project, the state's agricultural extension system would be strengthened to ensure maintenance of the existing single line of command from the Director of Agriculture down to the village level extension worker and the farmer in the field. Such a line of command is an essential prere- quisite for the successful transfer of the new extension methodology to ultimate beneficiaries. To ensure efficient and speedy delivery of extension advice to farmers, each of the 15 administrative districts under the proposed project would be organized into 50 subdivisions, headed by newly appointed Sub-Divisional Extension Officers. Each subdivision would be staffed by 10-12 Agricultural Extension Officers (AEO) and 70-80 village level extension workers (VLW). Based on an average of one VLW to every 600 farm families, 3,500 VLW would be required to cover 2.1 million farm families located through- out the 15 districts covered by this project. However, the actual number of farmers covered by a VLW would range from 400 to 800 farmers depending on population density and distances involved. Presently, approximately 3,250 of a total staff of about 5,000 necessary for extension work in the project area are in position. During negotiations, assurances were obtained that incremental extension staff required under the project would be appointed according to a schedule agreed with the Association (see Section 2.08 of the Project Agree- ment). 39. VLW engaged in extension work would be specifically trained to pro- vide farmers, on a regular and systematic basis, with up-to-date advice on improved farming practices suited to their specific conditions. In order to operate more efficiently, each VLW would divide the group of 400-800 farmers he covers into eight smaller groups of 50 to 100 farmers, the actual number varying according to population density and distances involved. From within each group, VLW would select 8-10 contact farmers in consultation with the farmers themselves. Selection would be from among farmers of all categories who are willing to adopt the new extension methodology. The VLW would visit each group once every fortnight on a fixed day of the week. At each location, he would work primarily through the contact farmers. In the morning he would tour the farmers' fields and in the afternoon he would hold a meeting in the village at a predetermined hour. The VLW in turn would meet with his super- visor, the AEO, once every fortnight to learn the recommended practices to be transmitted to farmers during the next two weeks and to bring the AEO's atten- tion to special problems encountered by farmers. At these meetings the AEO would be supported by the SMS and by the staff of research stations.  - 13 - Agricultural Research 40. The extension service would be kept up to date through a reoriented and expanded research effort. Research results would be transmitted to the extension system through central planning and regional coordinating committees, as well as through staff training programs (see para 42). Equally important, there would also be a reverse flow from the extension service to the research organizations of information about practical problems encountered by farmers. The Jawaharlal Nehru Agricultural University (JNAU) at Jabalpur is the princi- pal institution responsible for research in Madhya Pradesh. Under it, six agricultural colleges, located in different regions of the State, also carry out adaptive research on the principal food crops grown within their agro- climatic zones. The project would strengthen the University's research cap- ability with emphasis on finding practical answers to farmers' problems, particularly of rainfed crops. It would focus on the principal crops and concentrate on developing improved cultural practices. Attention would be paid to soil and water management, especially in those areas which are sea- sonally flooded, and to the development of improved farm implements, farming systems and cropping patterns. JNAU would be required to submit its annual research programs to IDA for review and comment (see Section 2.09 of the Project Agreement). 41. Under the proJect the research effort would be decentralized. Five existing agricultural college research stations presently located in different agroclimatic zones would be developed as Regional Research Stations. Each Regional Station would be responsible for research on the main crops grown in its agroclimatic zone. In addition, seven out of 16 existing substations currently associated with the agricultural colleges, would also be strengthen- ed with additional staff and facilities to carry out work in different agro- climatic zones. Under this arrangement all the main agroclimatic zones in the project area would be covered. Assurances were obtained during negotiations that the incremental research staff required would be appointed according to a schedule agreed to with the Association (see Section 2.08 of the Project Agreement). Furthermore, land and facilities would be made available to each of 26 Government-owned seed farms located throughout the project area for the purpose of carrying out adaptive field trials. Funds would also be provided under the project to enable trials to be conducted on farmers fields. One research agronomist would be seconded to each district from the University to guide and supervise this work. The project would provide the necessary infrastructure, equipment and incremental operating costs of establishing and strengthening research stations and experimental farms. Staff Training 42. The project would emphasize training to upgrade the quality of extension and research staff. AEO are usually direct recruits from col- leges. VLW are generally secondary school leavers, recruited after a two year pre-service course at one of the Agriculture Department's five training centers. There is very limited in-service training for VLW and AEO to keep  - 14 - them abreast of more recent technological advances. The project would upgrade .he five existing training centers to provide pre-service training for future VLW, upgrading courses for old VLW and short-term training courses for field staff. Fortnightly training on the job of VLW by AEO and SMS, and training of AEO and SMS two days each month by district and research station staff, would also be provided. In addition, once every three months, a two-day training session would be provided for all VLW and AEO at sub-division level at which overall project progress would be reviewed and during which participants would be exposed directly to research and subject matter specialists of various disciplines. 43. Furthermore, prior to each of the two main agricultural seasons, rabi and kharif, a 3-4 day seminar for SMS, training officers and senior extension staff would be held in each agroclimatic zone. The seminars, held at Regional Research Stations, would discuss research results affecting crops grown within the division, finalize crop recommendations and adaptive research plans. Members of the Central Planning Committee would join the seminars on the last day to review and sanction these plans. 44. The project would also provide fellowships, short-term training courses and scholarships for career advancement training of a few SMS, AEO and VLW. Research staff would benefit through the provision of five fellowships annually, for periods of up to six months, to permit scientists to visit key institutions in India to keep abreast of developments that would be useful to their disciplines. Housing and Transportation 45. The proposed extension methodology is based on regular and frequent farm visits by extension staff. It is, therefore, essential that field staff of all grades live near their place of work and are sufficiently mobile to function efficiently. At present, housing available for rent in rural areas is either limited, or inconveniently located, necessitating reliance on public transport. Consequently, extension workers spend much of their time travel- ling. The proposed project would provide for construction of low-cost housing for about 20% of field staff, and finance the construction of 50 sub-divisional offices cum training halls, including their equipment and furniture. Assurances were obtained that by December 31, 1978 GOMP would undertake and complete a survey to locate sites for offices to be constructed and for housing VLW (see Section 2.07 (b)) of the Project Agreement). Similarly, to enable field staff to cover large stretches of rural areas on a given time schedule, it is essential that they be sufficiently mobile. The project would therefore provide motor vehicles for supervisory staff at headquarters, district and sub-divisional levels. Credit would be provided to enable AEO and VLW to purchase motorcycles and bicycles, respectively. Travelling allowances would be revised to ensure adequate incentive for the purchase and utilization of motorcycles and bicycles by field staff (see Section 2.11 of the Project Agreement).  - 15 - Monitoring and Evaluation 46. An essential feature would be the monitoring and evaluation of the progress and impact of this project. At headquarters level, responsibility for monitoring would lie with the Agriculture Department's Statistics and Planning Unit which would be adequately strengthened by the provision of a Senior Agricultural Economist, farm management and marketing specialists, and other supporting staff. At district level, an agricultural economist, supported by statistical assistants, would be located at each district head- quarters with responsibility for data collection and providing farm manage- ment advice to extension staff. 47. The Agricultural Production Commissioner would be responsible for project evaluation. He would be assisted by local consultants to carry out in- depth studies on the economic and institutional impact of the project. Because of the need for uniform procedures for monitoring and evaluation of this pro- ject, as well as of other extension and research projects, detailed procedures are currently being worked out by GOI and the Association. These are expected to be mutually agreed between GOMP and the Association by December 31, 1977. Thereafter, the results of monitoring and evaluation would be submitted to the Association for review at least once a year (see Section 2.10 of the Project Agreement). Project Cost and Financing 48. The estimated cost of the proposed project is about US$20.9 million, including about US$0.8 million of duties and taxes. The principal components net of contingencies are: strengthening of extension services (US$12.2 mil- lion), upgrading training centers (US$0.3 million), adaptive research (US$4.4 million) and monitoring and evaluation (US$0.4 million). Physical contingen- cies average about 3.5% for all items (US$0.7 million), and price contingencies account for 17% (US$2.9 million). The latter is due primarily to the civil works component (US$3.6 million) for which the annual price escalation has been estimated at around 7% for the year 1977 and 8% for the period thereafter. 49. The civil works component of the project (US$3.6 million) covers the provision of new housing for VLW and limited housing for district level staff, as well as buildings required for offices, training and research work. The employment of additional extension and research staff, as well as the upgrading of existing cadre, would involve incremental salaries which together with travelling allowances for extension work account for US$9.3 million. Incremental operating expenditures for research stations, offices and vehicles account for US$4.7 million and local training for US$0.5 million. The balance of total project costs of US$20.9 million would be taken up by motor vehicles (US$1.1 million), motorcycles and bicycles (US$0.5 million), scientific equipment (US$0.6 million) and other equipment and furniture (US$0.6 million). 50. The proposed credit of US$10.0 million would cover about 50% of project costs net of duties and taxes. The credit would cover all foreign exchange costs (approximately US$1.2 million), plus US$8.8 million of  - 16 - local costs. The remaining local costs would be financed by the Government of Madhya Pradesh. The proceeds of the credit would be channelled through GOI to GOMP on standard terms as part of central assistance provided to State Governments for development purposes. Details of cost estimates and financing are given in Annex Ill. Procurement and Disbursement 51. Contracts for civil works (US$3.6 million) would be awarded on the basis of local competitive bidding in accordance with procedures satisfactory to the Association. Civil works contracts would be small and spread geograph- ically and over time, and would not be suitable for international competitive bidding. There are numerous qualified local contractors to ensure satisfactory execution of this component of the project. About 100 motor vehicles of var- ious types (US$1.1 million) would be required under the project. These would be purchased in small quantities as required over five years. In the interest of ensuring adequate maintenance and spares, they would be procured by Local competitive bidding under procedures which are satisfactory to the Association. Scientific equipment (US$0.6 million) ior research stations would involve many small contracts from various supplieLS of specialized items. International competitive bidding would, therefore, ti,'t- be practical. As most of the world's leading manufacturers of scientific equLipment are rl:;resented in India, are competitive, and could offer local maintenance service. these items would be obtained under the GOMP's normal procurement procedures w,ich are satisfactory, utilizing local competitive bidding where appropriate. OtJ-ers for purchase of other equipment and furniture (US$0.6 million) would be bulked wherever possi- ble and purchased following satisfactory local uormpetirLve Lidding procedures, except where valued at less than US$50,000, when they would b. urchased by prudent shopping. Motorcycles and bicycles (US$0.5 million) '1.1wlLd be locally purchased by individual staff, according to their nreference-;. 52. The proceeds of the credit would be disbursed against 80% of the cost of local staff training, locally procured equipment, vehicles and civil works; and 45% of incremental staff costs for extension and research. No dis- bursements would be made against operating expenditures for research stations, offices, and vehicles as these would be difficult to identify for purposes of disbursements documentation. To help expedite disbursements, disbursements against expenditures for locally procured items costing Rs 20,000 or less, against civil works contracts for one or more progress payments not exceeding Rs 50,000, and against incremental staff costs for extension and research, and local staff training would be on the basis of certificates of expenditure. The supporting documentation would not be submitted for review but would be retained for inspection by review missions. There is provision for periodic local auditing of these certificates of expenditure. Disbursements against all other items would be fully documented. Economic Benefits and Risks 53. The main project benefit would be an increase in yields as a conse- quence of the impact of the new extension and research system. Small farmers with limited financial resources but excess labor would be the primary bene- ficiaries of the project's emphasis on efficient use of existing resources.  - 1 7 - 54. Attributing a precise level of benefits to this type of project is difficult since the expected benefits of improved agricultural practices, which also require additional inputs, cannot be attributed solely to exten- sion and research. Moreover, there is not enough experience in Madhya Pradesh to estimate acceptance rates with any degree of accuracy. However, there is no doubt that the substantial improvement in the efficiency of utilization of resources which would be brought about by the project, would generate a high rate of return. The principal economic benefit of the project would be an increase in agricultural production, particularly foodgrains. Given the present cropping pattern (paddy 15%, wheat 20%, pulses 25% and other lower valued cereals 40%), it would be reasonable to expect that by Year 7 crop yields over at least 50% of all cropped land, would increase by 25 kg per hectare or by less than 4% over the "without project" situation giving an economic rate of return of 50%. Given the performance of the new extension service elsewhere in India, there is little risk these yield increases would not be attained, since the best farmers in Madhya Pradesh already obtain nearly twice current average yields, while on research stations substantially higher yield levels than these are achieved. This high rate of return should, however, be treated with caution since, as improved agricultural practices spread, further investments in infrastructure and services would become necessary. 55. The most significant risk lies in the fact that the effectiveness of the new extension methodology is highly dependent on an efficient organi- zation and management of extension and research services, as well as on farmers' response. Experience with ongoing projects (see paragraph 25) has already demonstrated, however, that the new system can work efficiently in formulation and delivery of messages, and in motivating farmers. The proposed project is different from the ongoing activities in that it mainly concentrates on rainfed, rather than irrigated, areas and for this reason there is a some- what higher degree of risk concerning achievement of yield increases. However, there are a significant number of improved practices and research findings suitable for dissemination which can substantially improve yields, even under rainfed conditions. Furthermore, farmers in rainfed areas tend to be less affluent and in greater need of technical advice. Thus, even though benefits may be lower in rainfed than in irrigated areas, these would still be consider- able, both in economic and social terms. A second generation risk would be faced when the success of the new methodology generates demand for additional inputs. If this were not met, the resultant farmer frustration could adversely affect the success of the extension effort. However, at this juncture and for some time to come, the deficiencies in the existing network for supplying farmers' inputs are related to the lack of demand and there is slack in the network which can be taken up to meet additional demand. The Project Co- ordination Committee, which is charged with overseeing the planning and exe- cution of the extension effort, is also responsible for assessing seasonal input requirements and should be able to ensure the development of arrangements capable of coping with increased demand.  - 18 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft Development Credit Agreement between India and the Inter- national Development Association, the draft Project Agreement between the Association and the State of Madhya Pradesh, the Recommendation of the Com- mittee provided for in Article V, Section 1(d) of the Articles of Agreement of the Association and the text of a draft Resolution approving the proposed Development Credit are being distributed to the Executive Directors separately. 57. Special conditions of the Project are listed in Section III of Annex IV. 58. An additional condition of effectiveness, specified in Section 5.01 of the Development Credit Agreement, would be the execution of the Project Agreement. 59. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATIONS 60. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President May 2, 1977  o aa o -e-eWisa- - * S S ~ ~ ~ ~ - to C COO Cit CC 0 C C C~~~~~~~W _a I I0 cIA I o 7s a. I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~m m ~ 74 ZA DO 2 0-I .05 I~~~~~~~~~~~~~~~~~~~~~~~2-0 , o -. 3~~~~~~~~~~~~w g- W ,W.0Z 4.3 .a 50 C C~~~0 ftftQC.A S .0.0-c OUt or coo . . . . . .c ccc = co c c . - c -- - 0 W c C earN C CC C Eta 'C T`- p- ws0nat.' I UJ SIc C MC CMOU, s~~~~~~s ..,r- n-N c- oo -, ~~~~~U' esIta 04 .. -. Il'f7t C 7Ut I Li 0- SM Ut ~ O ftp- 21 MsU N 2U 0 CU 51 o O. N -rtC 1M 4W I,W I-SIM I S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~b 0 ra Silk ' ci 017 0' 0im I I 565 CI -.I-l -5-4 S~~~~~~~~~~., -W m LW L 1 ~ W . Elm -I S~~~~~~~~o.~; a x w = Z r w x' . 1 aCI 6 Ic a- CC M4 t0 C r: CtU Z. It Z* Ia Sm a * CCC C)0 Cs,C s0 cZc * C- :0 o MiCa W*I w.-w 0 .u .-. W-. . t 0S *-. Oft 0 -~ ~~ ~ ~~~~~~~~ ~ W Vi"0I~ . ~ 701 0 3I ::: . Wp . . a .uS N I.3- W -3 - 6 43 !. ---C - - -U- a0 - g: " *j -u NtI a. O&t U.  ANNEX I page 2 of 4 NOTES Ilnieso otherise noted, data for 1960 refer to any year between 1959 and 196, for 1970 betwee 1968 and 1970 end for Most Recen.t tEtisoate b.etwe 1973 ad 1975. 00 Branil baa been elected -asn objective coutry becasan of its aine end comparable problena of regional ioequality INDA 1960 / 1951-61 average, /b 1951-60; Ic Ratio of population under 15 end 65 aod ove to labor force age 15 ood ovr, id Regiatered applicante for work; /c 1962; /f Registered, not all practicing to the ....try; La 1ncluding niWiee; lb 1959; /i 1960-62. 1979 Ia Ratio of popolation under 15 and 65 and ever to labor force age 15 sod ever; lb 1967-68. /c Including nidwive; /d 1967. MOST RECENT ESTlPAIKT /s 1971; lb Ratio of pepolotion under 15 and 65 and eve to abor force age 15 and over; /c 1976; Id Inoluding midwives; Ia 1969-71 averge; /f Population 10 yeara aed -nr INDONESIIA 1970 I 1961-71, /b 1971. /c including nidwiee; /d Total hospital beds ircoeplete. PHrLIPPIPES 1970 IA.a percentage of esployneet, lb Nat including private voctional enboola. BEAST!. 1ISM / Economically active popolation; /b Hospital personne.l. Ic Incide only. RIO, April 16, 1977 DEFINITIONS OP SOCIAL INDICATODRS Land Area (thou he ) Population per nrigperson - Populatto di-ided by coole of poacti- Total -Total surface area -uprioisg land are.aend Inland waes ing note and focale graduote uss "traaoed- or "certified` Acric. -Most recent itimate of egeiculturo1 area used temporarily cr nures on. .d auciliary per os.. oa th training or enperience per.nanetly nor crops, paocurea, merhet & kitchen gardens or to ie. Populat-un Per- hupital bed - RoPolotion d-vidod by n..ober of hospital folloc. beds avilable in publIc and prinate goneral and speialised hospital and -esiialsotr,ecoenr-neg hone and estabieh..tett GiP Per- oplt,, IllS) - GNP Per apfl t estinatos a tourroor market prires, for cctdti Ied pectv ae caI.lculatd by ae nvoso method as World Bosh Atlas (1973-75 basis), per capita sorely of caoisA oi revoir-mnta) - Ccypted f..e 1960, 1970 and 1975 data, ene rgy equivalent of net food soypli-n avilable in coun try Per capita Per- day; available aupp1ies cnpriae do..eotic productuon, teport le.. Peoaisand octal stt.istic ep...rt,, an chaie is stoch; net suppii- occlude aoinal feed, seeds, Popullso (i-r niio)- As of J.1y fleet; if nut avilable, quantities used io food proccesaiog and beans c in distribution, require- *average of twa end-year estinates; 1960, i97i and 1975 data. .nestcerte.tinated by PAl based on pby-luig-caI needs for noral activity ad"health ccnsid-r tg evrnealtmsperature, body weights, Poceio iotty rsur km - Mid-year .poplation Pe- squsre kilo- aondscdiettbuions .f population, sod a1lnaing lOt futcaste eae- fl bnars o:l . f' talre,at hoase]hoid level Population deceity v-pa s are km of antic, land - Conputed as above fur Per caia upe o protein (grase per day) - Protein cunteot of pen agricultural1 land only, caia e sply of food P.r- day, net uappiy of food -c de coda above, reqotr-nnefr l nt rie etabliahed by USDA Euo-oni Vltai statuotans issearob~~R ... - Service provide foe a. niiumaioaceo 60 genao Crude birth rate per tbuuaosd, ava1rage- A.nn-a ivebirths per.thousa nd tntai protein par ds, and 70 grams of-asai ed..puls protein, of of idpor oylatun tn-ea a ioeicavrenaeuing n19iad hbich 10 grams hbuld be ocicat pretni;teeoadrae ber 1970,ad _eyear ae-rge ending in 1975 for amot recen astleee. IIan ihose of 75 grama It toca; protein end 23 grams of seinal protein Crude death rate netI .bousnd, seerea_-Aena...I deaths per thousa.nd of mid- as as averge for the world, ProPosed by PAl in the Third World Fond yoat populatin sc-yaat arithmetic avera ges ending in 1960 and 1970 and lursey. ne_-yr averge ending lv 1975 for ens crec...t estimate. Per capit la prtenauoy iro aeimal and pulse - P-atnin aupply of fuod Infant -Irtaitte rte i/thou) - Annua deaths of mi.fats andar ann year derived from a~.nin la nd pulse . o gro otdy of aic par th_oaud Jt_e hibe loath rate (/tbau) anno i-b - Annualdnatbs pert'hounand to 00 greup Lieneeta ' t birth (era) - Averge nuoher of years of iife renain- 1-4 -rear, to childran in thus agegfroup, scggeorted aanIndicator of leg at birth, usually fiv-your -v-rgee -oding in 196i01I970 and malnu'tritio.. 1975 for developIng c.untria Iruis repro,duction tae-Average socke of live daughter awesill Edocation berin hernoralra,rd-ctle period if ehe ampe,ie..ced present age- Adjutep otilet ratio- eroryahc - iro1lont of all_ogena scti fotulity ratces usually_fveyer avrage ending is 16,prcedntage cprinary scola.oplto;anidncil ce 19710 and 1975 fur davlopini cou ntries 6-Il year but adjucted fur dafferot lengtha cf primary educaic-n; ,Popultias greuth rate It) - total - Cnopound annua growth rates of mid- forIcuntrino with uncra ducati-n, enrollment nap ....eed lIlt year population for 1950-60, 1961-7i and 1970-75. since vo.e pupils are hems or above the official ochuol age. Ppatuarceth rate It) - urban - Computed like growth rate of total Adutdselmn aio1 - secndary school - Computed a above, Ppopulation, differnot deftuttiu.. of urban arose maY effect canpara- secondary edcatti reqoui-e at lea..i four ynara of approvd primary bilityof data among c_ntr,i-a icetrction, provides g Dir vocilona" or, Iac.her training Urbn ppultio (7 of totl - Ratio of urban to total populatiun; inuteunri..e fuIuis f o 17yers fa0ge; correpondence diffceret definitiona of urban areas may affeot coparahility of data onuse aregenrally eucluded. amIn~g ....nir ins Year f erheolina provided (first and oocood levels - Total yeara of AR aatructur a (ecn)-Child-no (0-lb year), working-age (15-6b year), ac.tng.tseodrylvl,vctional instruction may be Pa-- adrtire 165 yearsand ovr) as p--untagss of nid-year population. tia1lly or competely ncluded. Age dependency ratio - Ratio of popwlatien under 15 and 65 and over to Vocational enrollment t m ..c.. nd-ry) - Vocational institutions those of agss 15 through 64. include teubnical. indutiria1 or other programs which operate icon..mic dependency ratio_-Ratio of popelation ander 15 and 65 and ovr ineendently or asdeparinnta f secndary,institutions. toth akr ocei ae rupo 1-6 eas Aul ltrusrae(tc lterate adults (able to read and unite) a Pamily p1 enina-ac error _cumultive, thou) - Cumlative number of Percen..tage of total adult PoPulation aged 15 yecrs and over. acceptors of birth-control devices under auspices of natie..aI family planning program since incepiton. Rouing Pamily PIlansing - users (7 of married wome) - Percetages of married Persons per tune (urban) - Average number of pers-n pee men. in uenochild-bearing age (15-44 yers who us birth-control devices occupied conventional ,'wllingn in urban era,dwellings eaclude to all married womn is same age group. son-perma nentetructurut I'd unoctupled parts. Occupied d-lana withoc piped watr(7.) - iccupied convetio...l tEpl.yment dwellings in urban and rural a reas without innide or outside piped Total labor force (thousand) - Eounamical ly active persona, nclding uater fa-cilities as P-nc-vafe of all ocoypied dwellings. armed forcea and unaplayed but seclu.ding bhus-ives, studencts, etc.; Access to electricity Ct of all dwe1ilgsg) - Conventional daellings defini tions in v-nio.... coutries are set comparable, with electricity in living qcarters us percect of total dwellings in Lahor force in agiculture () - Agricultural labor farce (in farming, urban and rua- aes forestry, butin and fishing) as percentage of.total lfbar forte. Ra..raidoelinas nconnected to nlectricity (%) - Computed aa ahove for UnnolvdI flke ec)-Ueployed are usually d efj. 1 innd anrural dwelling only. persons abc aeable end willing totasajb, nuDo. jab e gicen dy, remained out of a Job, amd seking woektfor a seifie oemte inkicna period nut e..ceed ing one ... k; nay not be comparable between iadio receivers (per thou pa,p) - All typea of receivers far radio kroad- nouserileo due to different definitions of unemployed and sourc of cate to general publi. Der th-asnd of popalation, encludes data , e.g, noplaYment office statistics, sample surveys, coepu1l..ry unlicen...d recavers : uc _ot-i and in years when regiatratioc of ucempioposni insurance. radio sets was iu sff ct; doso for recet yeta may not be ceeparable Inco.e Dietribution ,.:~~ ~~~~~~~~~ince oc coastunrIce .csibdicn g incse tetihuiun- percentage of private inuoee (both in cas and Pseeros(p-r thou p,p] - Pacse nnctrs oterut bind)frreneivdlby richest St. richest Sit, poorest 20t, and po-es-satn lessthan:a6h pnac, ecu-od - amuaces,r herss .c ot hof buebaa. m ilitarY v cl-o Electricity (khub/o per cap) - Annual c-suptcon of industrial, con- Distribution of land -.nrehip - Percentages of lend ownd by ealithinsi -erial, ;,ublic and private.loctri_cty in kiilo..att houra pee capita; lOt and poorsat lOt of land ownrs, generally base.d on p-nd-cti- data, without a11owence for lass.es in Illlth and N trilio, ~~~~~~~~~~grids but allowing for imparts and onporte of electricity. Health and Nutrition Newanr~~~~~~~~~~~~.....int (ku:/er per cap) - Per capita. annual o.nnemtino in kilograms Population per physic ian - Population divided by number of practining esttmated from dos-t-c production plus net importa of newsprint. physiciens qualified from a eadical school at university level.  ANNEX I Page 3 of 4 NC I0E DEVELOPMENT DATA GNP PER CAPITA IN 1975 USS t50 GROSS NATIOlAL PRODUCT IN 1975/76 ANNAL NATE OF GROWT N. onstant prices) US$ Bln. Ss 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 GNP at Market Prioes 82.8 100.0 3.8 3.7 2.6 Gro:: Domestio Investment 46.7 20.1 Gross National Saving 16.0 19.3 Current Account Balance -0.7 -0.8 Resource Gap -1-5 -1.8 OUTPUT. LABOR FORCE AND PRODUCTIVITY IN 1971 Value Added (at factor oost) Labor Force V.A. Per Worker US# Bin. Mil t o National Average Agriculture 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services 16.3 1 10.2 16.7 5A2 186 Total/average 52.6 100.0 180.4 100.0 292 100 GOVERNlE1 T FINANCE General Government Al Central Government (Rs. Blnl 9 of GD?P