Sri Lanka - Agricultural Extension and Adaptive Research Project

Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Report No. 2396a-CE SRI LANKA STAFF APPRAISAL REPORT AGRICULTURAL EXTENSION AND ADAPTIVE RESEARCH PROJECT May 17, 1979 South Asia Projects Department Agriculture Division A 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 US$1.00 = Rupees (Rs) 15.8 Rs 1 = US$0.0633 Rs 1 million (m) = US$63,291 WEIGHTS AND MEASURES 1 long ton (1t) = 2,240 lb = 1.016 metric tons (mt) 1 hundred weight (cwt) = 112 lb = 50.8 kg 1 bushel (bu) of paddy = 45 lb 20.4 kg 1 acre (ac) = 0.405 hectare (ha) 1 foot (ft) = 30.5 centimeters (cm) I mile (mi) = 1.609 kilometers (km) I square mile (sq mi) 640 ac 259 ha FREQUENTLY USED ABBREVIATIONS AGENCIES ADA - Agricultural Development Authority AER - Agro-Ecological Region ARC - Adaptive Research Center CARI - Central Agricultural Research Institute CCB - Coconut Cultivation Board DA - Department of Agriculture DAPH - Department of Animal Production and Health DAS - Department of Agyrarian Service DCS - Department of Census and Statistics DTC - District Training Center GOSL - Government of Sri Lanka IRRI - International Rice Research Institute MADR - Ministry of Agri'cultural Development and Research NLDB - National Livestcock Development Board RRC - Regional Research Center RTC - Regional Training Center OFFICERS AI - Agricultural Instructor AO - Agricultural Officer DAEO - District Agricultural Extension Officer KVS - Village Level Extension Officers (Krushikarma Viyaptha Sevaka) SMO - Subject Matter Officer SMS - Subject Matter Specialist  GLOSSARY FOR OFFICIAL USE ONLY Chena - Slash and burn or shifting agriculture. District - The principal administrative unit in the country. There are 24 Districts in Sri Lanka. Division - An administrative unit under the district. There are about 160 Divisions in the country. Electorate - A unit from which Parliment members are elected. Its boundary is roughly equal to a Division. Range - A part of a Division. FISCAL YEAR January 1 - December 31 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.   SRI LANKA APPRAISAL OF THE AGRICULTURAL EXTENSION AND ADAPTIVE RESEARCH PROJECT Table of Contents Page No. I. SECTORAL BACKGROUND ................................... 1 General . ............................ ............. . 1 Role of Agriculture in the Economy ............... I. Performance and Problems ....... ................. 2 Objectives and Strategy for the Future ........... 2 Bank Group Support to Agriculture ................ 3 II. THE PROJECT AREA . ...................... .... ............. . 3 Physical Environment ... ......................... . 3 Agricultural Production and Trend .............O... 4 Land Holdings and Tenure ......................... 6 Agricultural Administration and Services ......... 7 Administration ................................................. 7 Research ......................... 8 Extension ......................................... 9 Training .......................................... ..... .o.o 9 Agricultural Statistics and Economics ....... 10 Supply of Inputs .. . .-- .. .... ...-.. 11 Fertilizers ................................ ... o.......-o o o.o 11 Seeds ......... o......... ........................ o o oo o - 12 Pesticides and Herbicides ....... 12 Marketing and Price .......o.... .............. 13 III. THE PROJECT ......... .- ............................. ooo..ooo.... o.. 14 Objectives and Approach .......o................... 14 Project Components .. . .. . -... -. -.. ..... ... 14 Detailed Features ...... oo.......o......o........... 15 Strengthening of Extension Service .......... 15 Strengthening of Adaptive Research o-........ 18 Strengthening of Training Institutions ...... 18 Strengthening of Agricultural Economics, Statistics and Project Monitoring and Evaluation.-.. ..... . -..o --... .... . 21 Strengthening of Civil Engineering Unit of the Department of Agriculture .......... 21 Overseas Training and Technical Assistance .. 23 This report is based on the findings of an Appraisal Mission that visited Sri Lanka in October 1978 and included: Messrs. H.T. Chang and F. Lowenstein (IDA) and Z. Matmor and V.C. Agarwal (Consultants).  -2- Table of Contents (Cont.'d) Page No. IV. PROJECT COSTS AND SCHEDULE OF EXPENDITURES ............ 24 Cost Estimates and Schedule of Expenditures ...... 24 Financing ........................................................ 26 Procurement ................................................... 27 Vehicles ...................................................... 27 Buildings ........ ........................... 27 Overseas Training and Technical Assistance .. 27 Disbursements ......... .. . . . . .................................... . 27 Accounts and Audits . ..................... ... ..... 28 Cost Impact on the Budget and Society ............ 28 V. PROJECT IMPLEMENTATION AND OPERATION .................. 29 Project Implementation and Coordination ..e ........ 29 Implementation Schedule .......................... 30 Monitoring and Evaluation ...... ................. 31 Operation and Maintenance ........................ 31 Building Construction Capacity of DA ........ ..... 31 DA's Financial Management ........................ 32 VI. PRODUCTION AND MARKETING . ......................... . . . . 32 Production .................................................... 32 Marketing ........................................... 33 Farmer Incentives ........ . . . . ............................... . 33 VII. BENEFITS AND JUSTIFICATION ....................o.... . .. 34 Economic Justification ............................ 34 Social Benefits -....... .-.............................-... - ... oo. 34 Project Risks . . .... ... . ... ......... ........ .. ... 34 VIII. RECOMMENDATIONS ...o.o.o.o. -.. . .-.......... oo- ..- 35 ANNEXES Annex 1 - Production Constraints on Agricultural Production and Available Research Information for Extension in Sri Lanka Annex 2 - Tables Concerning Crop Production Annex 3 - Tables Concerning Incremental Staff Annex 4 - Tables Concerning Project Cost Estimates CHARTS Chart 1 - Organization Chart of the Department of Agriculture Chart 2 - Project Organization Chart Chart 3 - Project Implementation Schedule  - 3 - Table of Contents (Cont.'d) MAPS Map 14076 - Sri Lanka, Agro-Ecological Regions Map 14077R - Sri Lanka, Soils Map 14078R - Sri Lanka, Agricultural Research Stations and Training Institutes   SRI LANKA AGRICULTURAL EXTENSION AND ADAPTIVE RESEARCH PROJECT I. SECTORAL BACKGROUND General 1.01 Sri Lanka has a total area of 25,300 sq mi (16.2 M ac) and had an estimated population of 14.4 M in 1978. About three-quarters of the popula- tion live in the wet zone in the southwest quadrant (about 23% of the country) where population density reaches 1,800 per sq mi, compared to only about 200 per sq mi in the dry zone (about 64% of the country). Over the last 20 years, Sri Lanka has had low output and employment growth. Per capita GDP has grown by only 1% per year and currently averages about US$190. 1.02 Sri Lanka, however, compares favorably with neighboring countries in providing social services to its population for education, health, other social welfare, and rural communication. Its literacy and life expectancy are high, and the nutritional level is adequate. Its population growth rate is declining and currently is a moderate 1.7% per annum. Role of Agriculture in the Economy 1.03 Sri Lanka's wide variations in precipitation, topography and soils make it possible for the country to grow a wide range of crops. About 5.5 M ac of Sri Lanka's total land is used for permanent farming. There are about 2.4 M ac under tree crops, including tea (0.6 M), rubber (0.5 M), coconut (1.2 M), and minor tree crops (0.1 M), about 1.6 M ac of paddyland and 1.5 M ac under a wide range of rainfed mixed farming and home gardens. In addition, about 0.5 M ac are annually planted to assorted field crops, on an estimated 2.5 M ac of slash and burn land, locally called "chena." 1.04 Agriculture accounts for 39% of the GDP of Sri Lanka and provides over 50% of total employment and 75-80% of export earnings. Tea and rubber alone provide more than 60% of total export earnings and about 40% of Govern- ment revenues, through export taxes and duties. Coconut products, after having satisfied local requirements, are also exported. Local production of rice, sugar and subsidiary food crops fall short of demand and have to be supplemented by annual imports. 1/ Production, handling, processing, trans- portation, trading and servicing of crops and livestock form the main occupations of the rural population. 1/ Rice imports ranged from 0.7 M mt to 1.0 M mt per year between 1970 and 1976. Wheat flour imports ranged from 0.3 M mt to 0.5 M mt per year during the same period.  -2- Performance and Problems 1.05 The agricultural sector's performance during the 1960s was mixed. Paddy and rubber production grew at good rates of 4% 1/ and 5% per year, respectively, but tea and coconut production grew at only 1% per year. The increased paddy production enabled Sri Lanka to raise its food self-sufficiency from 50% in 1960 to about 80% in 1970. The poor performance of tea and coco- nut production and adverse price trends in the international market, however, caused the net surplus (in current prices) of agricultural commodity trade to decline from about US$200 M in 1960 to only US$120 M in 1970. 1.06 The performance in the 1970s took a down turn. Production of paddy from 1970 to 1977 showed an annual increase of about 0.7%, while those of tea, rubber and coconut were negative. Some of the subsidiary food crops and spices registered larger production increases because more area was planted to these crops, following curtailment of imports. The reasons for unsatisfactory performance are mainly related to sectoral strategies and policies, the impacts of which have been reflected over the years in lowered private initiative and investment, particularly in the tree crop subsector; ineffective and demoralized support services, particularly in rural credit; lack of maintenance of irrigation facilities and general failure of schemes designed to avert high unemployment of educated youth. Objectives and Strategy for the Future 1.07 The agricultural goals of Sri Lanka have always been: to achieve food self-sufficiency; to diversify crop production while sustaining produc- tion of tree crops; and to increase employment, particularly of educated rural youth. GOSL recognizes that these long-term goals are in line with the country's needs and resources, but policies and strategies need to be adjusted to bring the rural based economy out of the slump of the last decade. Accordingly, GOSL now gives high priority, inter alia, to the following agricultural policies and programs: (a) establishment of appropriate price incentives for producers; (b) strengthening of agricultural supporting services, such as research and extension, rural credit, input and farm power supply; (c) improvement of irrigation systems and their management; (d) improvement of state controlled plantations and living conditions of plantation workers; and (e) acceleration of Mahaweli River basin development to more rapidly expand the irrigated area in the dry zone. 1/ Average year to year changes, calculated by using semi-log regression.  Through these and other measures, the Government hopes to step up the overall agricultural growth rate to 4.5% per annum for the next five years, and increase employment of rural youth along with a speedier development in both public and private sectors. Bank Group Support to Agriculture 1.08 During the past decade, Bank Group lending to Sri Lanka has heavily emphasized agriculture and rural development. Since 1968, a total of ten projects with a total credit of US$137.0 M have been financed in this sector including: Lift Irrigation (Cr. 121-CE, US$2.0 M); Drainage and Reclamation (CR. 168-CE, US$2.5 M); Mahaweli Ganga Development I (Ln. 653-CE, US$14.5 M and Cr. 174-CE, US$14.5 M); Dairy Development (Cr. 504-CE, US$9.0 M); Agri- cultural Development (Cr. 595-CE, US$25.0 M); Tank Irrigation Modernization (Cr. 666-CE, US$5.0 M); Mahaweli Ganga Development II (Cr. 701-CE, US$19.0 M); Tea Rehabilitation (Cr. 818-CE, US$21.0 M); Tree Crop Diversification (Cr. 819-CE, US$4.5 M); and Kurunegala Rural Development Project (Cr. 891-CE, US$20.0 M). The first two of these projects have been completed. The others are progressing satisfactorily except for the Mahaweli Ganga Development II and the Tank Irrigation Modernization Project. The principal problems are in the quality of construction and weak project management. Steps are being taken to remedy these shortcomings. II. THE PROJECT AREA Physical Environment 2.01 The proposed project would cover the entire country of Sri Lanka. The complex cropping patterns of the different parts of the country, with which the project must deal, is due to the complex physical setting of the island. The island is commonly divided into seven major agro-ecological zones: Wet zone, (low-country, mid-country and up-country), intermediate zone (low- country, mid-country and up-country) and dry zone (low country). 1/ 2/ These seven zones are further sub-divided into 22 well defined agro-ecological regions (AER), each with its unique combination 3/ of rainfall pattern, ele- vation, land form, temperature range and types of soils as shown in Map 14076 1/ Wet zone (90 inches annual rainfall or more), intermediate zone (60-90 inches) and dry zone (60 inches or less). 2/ "Up-country, mid-country, and low-country" are commonly used terms in Sri Lanka to mean: Up-country (3,000 ft above mean sea level or higher), mid-country (1,000-3,000 ft) and low-country (0-1,000 ft). 3/ Mean air temperature ranges from 600F to 830F. The 75% expectancy value of annual rainfall from 20 inches to 125 inches. Land form varies from mountainous, steeply dissected hills to rolling, undulating and flat (Map 14076). There are 17 major soil groups and associations (Map 14077).  -4- and Map 14077. The combination of these factors determine the prevailing land use, cropping pattern, crop calendar, production constraints and devel- opment potentials in different AERs (Annex 1). Sri Lanka began in 1974/75 to reorganize its research, training and extension according to AERs. The packaging of extension messages under the project would recognize these AERs and their varied physical settings. 2.02 Generally speaking, temperature is not a limiting factor to crop production in Sri Lanka, except for possible frost damage in the coldest months to small areas of annual crops grown at high elevations. Unreliakle rainfall and frequent dry spells, however, are a feature of the entire dry zone from January through September, and in the intermediate zone low-country from June to September. On the other hand, flooding and poor drainage are features of the wet zone low-country. Localized flash floods occur frequently even in the dry zone in October and November. 2.03 Soils of Sri Lanka pose many problems to agriculture (Annex 1). Major soil groups with the fewest problems are the Red Yellow Podzolic soils in the heart land of the wet zone, which supports the bulk of tea, rubber, coconut and lush home gardens, and the Low Humic Gley soils in the dry and intermediate zones which support the bulk of the paddyland in these zones. For various reasons, other major soils in the dry zone are all underutilized at present. The Red Brown Earth is the single largest soil group in Sri Lanka. It has low water holding capacity and its moisture range which is suitable for animal plowing is narrow. It loses water and hardens quickly after each rain. Compounded by frequent dry spells, this soil characteristic is a major constraint to dry zone agricultural development. The Non-Calcic Brown soils on the east coast have very low natural fertility. The Red Yellow Latosols in the northern tip of the island where groundwater is close to the surface and can be easily tapped, are intensively cultivated with high value crops. Those at the base of the Jaffna Peninsula are very much underutilized, due to the great depth and excessive permeability of soil. In these areas, tanks cannot be built and groundwater is beyond the reach of farmers. There are also some bog and half bog soils in the wet zone and saline and alkaline soils along the coastal belt of the island. Agricultural Production and Trend 2.04 Paddy "harvested area" in Sri Lanka varies from year to year, but increased from about 1.4 M ac in 1960, to about 1.7 M ac in 1970 and to about 1.9 M ac in 1977. The national average yield per ac increased quite steadily from 36 bushels (0.78 mt) in 1960 to 51 bushels (1.04 mt) in 1970, but stag- nated at the level of about 45 bushels (0.92 mt) from 1971 through 1975, fell to 41 bushels (0.84 mt) in 1976, and rebounded to 48 bushels (0.98 mt) in 1977. These variations accounted for the healthy 4% per annum of paddy pro- duction during the 1960s and the disappointing 0.7% increase in the 1970s increase (para 1.05 and 1.06). Paddy production increased from 43 M bushels (0.88 M mt) in 1960 to 77 M bushels (1.57 M mt) in 1970, and to 85 M bushels (1.73 M mt) in 1977, but production was much below the 1970 level from 1971 through 1976 (Annex 2, Table 1).  2.05 During the decade from 1967 to 1976, the area under coconuts remained around 1.1 M ac, while production varied between 1,900 M and 2,900 M nuts and yield between 2,000 and 2,600 nuts per ac (Annex 2, Table 2). As will be explained later (para 3.02), tea and rubber are not included in this project. Therefore, a detailed discussion of these two crops is not included in this report. 2.06 During the same decade, the total area of field crops other than paddy remained at the level of 0.60 to 0.65 M ac until 1972, and then increased to slightly over 1 M ac (Annex 2, Table 3) because of high prices, caused by restriction of imports. About 40% of the present area is planted to root and tuber crops, particularly manioc (cassava). About 17% is under condiments, 14% under oilseeds, 14% under coarse grains, 10% under "minor exportable tree crops", and the balance, 5% is under grain legumes, industrial crops, vegetables and fruits. Although the acreages of the above categories of crops are small and yields are generally low, they have either local commercial importance, in the wet and intermediate zones and the Jaffna Peninsula, or good potential for area expansion and yield increases in the dry zone. In these crops, lie the long cherished hope of Sri Lanka to diversify its agricultural base. 2.07 For the 15 upland field crops 1/ analyzed for the period from 1960-74, only potatoes showed a significant upward trend for both yield and area, in both maha and yala seasons (Annex 2, Table 4). Cowpeas showed the same trend, except that there was no clear yield increase in the yala season. Green gram showed yield and area increases in the yala season, but not in the maha season. Of these 15 crops, seven 2/ revealed declining yield trends of varying degrees, but production increased due to expansion in area into mar- ginal lands. Yields per ac of all field crops are low (Annex 2, Table 3(b)). 2.08 About 65% of the paddyland, 100% of sugarcane planted by State plantations and some commercially grown vegetables are under irrigation, while the rest of the crops are largely rainfed. The overall cropping intensity varies from about 170% in the wet zone to about 100% in the dry zone with a national average of about 120%. The corresponding figures for paddyland are 175%, 110% and 130%, respectively. 2.09 The low paddy yields in Sri Lanka are basically due to poor water management in the dry zone and adverse soil properties caused by drainage difficulties in the low country wet zone. Rainfed cultivation is one of the basic causes of low yields for other field crops. Another cause is the general weakness in agricultural supporting services, including extension, supply of inputs and rural credit. The combination of natural and infrastruc- tural constraints has largely bound farmers to traditional practices. How- ever, there was wide adoption of rice HYVs, which entailed little cash outlay, 1/ Chilli, red onion, maize, sorghum, cowpeas, green gram, mustard, kurrakan, groundnut, sesame, potato, manoic, sweet potato, ginger and turmeric. 2/ Chilli, onion, sorghum, groundnut, manoic, sweet potato and ginger.  - 6 - during the 1960s. Rapid yield increase achieved during the period of initial HYV adoption levelled off in the 1970s. Another visible adoption of modern technology has been the use of tractors in the dry zone by more well-to-do farmers to prepare the difficult Red Brown Earth (para 2.03). Sri Lanka has also identified natural constraints in various AERs more clearly than have most other countries in Asia and has a modest backlog of research information (Annex 1, para 21-27). 2.10 Sri Lanka has some 1.8 M head of cattle, 0.8 M buffaloes, 0.6 M sheep and goats, 7.8 M poultry and a small number of pigs. Some 60% of the ruminants are in the dry zone, where one of the physical constraints is the scarcity of natural forage for grazing in the driest months of June, July and August. Most of the dairy cattle, however, are in the intermediate and wet zone (the Kandy area). Pigs are mostly in the wet zone, while poultry follows human population concentrations. Grazing is mainly on natural grasses, except for,oome improved pasture recently established under coconut. Concentrates for dairy and poultry are mainly from locally produced copra and rice bran. The Director of the Department of Animal Production and Health has enumerated five priority tasks for livestock development: (i) reliable supply of feeds; (ii) improvement of milk marketing; (iii) veterinary service to small farmers; (iv) checking the depletion of the national herd of draft animals, and (v) sustaining meat supply to the population. Land Holdings and Tenure 2.11 According to data from the Department of Census and Statistics (DCS), the number of holdings "other than estates" increased from 0.85 M in 1946 to 1.17 M in 1962 and 1.63 M in 1977. The total area of these holdings increased from 2.82 M ac to 3.13 M ac and 3.48 M ac, while the average size of holdings declined from 3.32 ac to 2.68 ac and 2.13 ac, in the same years. The 1973 Census of Agriculture showed that Sri Lanka has a large population of small farmers but few landless families. About 45% of total holdings were under 1 ac and covered only 6.4% of the land; 88% (or 1.43 M holdings) were 5 ac or less and covered 47% of the total agricultural land, while the remain- ing 12%, of more than 5 ac each, covered 53% of the land. Only 7% of the farm operators owned no land. Since the 1973 Census, some changes have occurred, because of: (a) actions taken under the Land Reform Law of 1972 1/ affecting about 1 M ac; (b) the allocation of some 560,000 ac of land by the Land Reform Commission to cooperative and collective farms, Government agencies, coopera- tives, other bodies and smallholders; and (c) an increase in the number of holdings caused by population trends and settlement schemes since 1973. 2.12 Though tenancy has been and is still widely practiced, statistics on land tenure in Sri Lanka are not readily available. It is estimated that about 30% of the paddyland is cultivated by tenants. However, the rights of 1/ The Law sets an ownership limit of 25 ac of paddyland and 50 ac of land for all other crops. Actual land acquisition took place in 1974/75.  - 7 - tenant farmers in Sri Lanka are much better protected by laws 1/ than in neighboring countries. Although legal provisions have not been strictly fol- lowed in all cases, it is a fact that a landlord in Sri Lanka cannot readily evict his tenants from the land, nor fix rent or crop-sharing percentage at his own will. In some parts of the country if the landlord charges a rent of more than one third of the crop, he would supply some of the production inputs. Water charges, where applicable, are paid by the landlord. In this context, the existence of tenant farming in Sri Lanka is a much smaller im- pediment to the adoption of improved farming techniques than in neighboring countries. Agricultural Administration and Services 2.13 Administration. After a major reorganization of GOSL's Central Ministries in September 1978, six ministries are now concerned with agri- cultural extension as follows: (a) Department of Agriculture (DA) of the Ministry of Agri- cultural Development and Research (MADR) -- Extension work on paddy, other field crops and minor exportable crops. (b) Department of Animal Production and Health (DAPH) of the Ministry of Rural Industrial Development -- livestock extension. (c) Coconut Cultivation Board of the Ministry of Coconut Industries -- extension work on coconut. (d) Land Commissioner's Department and Irrigation Department of the Ministry of Land and Land Development -- extension work in Special Projects and new major irrigation projects. (e) Mahaweli Development Authority of the Ministry of Mahaweli Development -- extension in Mahaweli development project areas. (f) Ministry of Plantation Industry -- tea and rubber extension. With the exception of the Ministry of Plantation Industry, all five other Ministries would participate in the project. 2.14 For the first time in Sri Lanka's history, GOSL announced appoint- ment of District Ministers on October 5, 1978. The Government Agents, up to now the senior officials in the Districts have been made Secretaries of the Districts. The new District administration is expected to have the power of coordinating development activities in the District. 1/ Paddyland Act No. 1 of 1958. Agricultural Productivity Law No. 2 of 1972, Land Reform Law of 1972, and Agricultural Lands Law No. 42 of 1973.  -8- 2.15 Also there have been major changes in rural institutions since January 1978. The activities of the Cultivation Committees at the village level and Agricultural Productivity Centers at the range level have been substantially curtailed. To continue some of the functions of the Culti- vation Committee, about 4,000 Cultivation Officers have been recently recruited by the Agrarian Service Department (DAS). A new Agricultural Development Authority (ADA), chaired by the Secretary of MADR, would coor- dinate DAS activities in supplying inputs and of the People's Bank and Bank of Ceylon in supplying credit, for supporting the extension service. 2.16 Research. Under the supervision of a Deputy Director (Research) and a headquarters staff of Subject Matter Specialists, the Department of Agriculture (DA) of MADR conducts research on paddy, other annual field crops, and "minor exportable tree crops". For research on the first two categories of crops, the Department, with assistance from FAO/UNDP project SRL-75/058, started in 1975 to establish eight Regional Research Centers (RRCs) to cater to the research needs of different AERs. Five RRCs with a total of twelve branch stations have been established so far by upgrading existing experiment stations. In addition, DA has a Central Rice Experiment Station and a Minor Exportable Crops Research Institute. Locations of various DA and other research institutions are given in Map 14078. Sri Lanka has always been strong in rice breeding and local rice HYVs were widely adopted by farmers long before IRRI varieties came into being. However, only in recent years has DA stepped up research on other crops. National Coordinated Research Programs are now in operation for ten groups of crops, 1/ with different RRCs participating. New improved varieties and cultural practices are expected to be forthcoming during the next five years for both paddy and other field crops. From the view points of conception, infrastructure and knowledge accumulation on a broad front, Sri Lanka's agricultural research on paddy and other field crops is now in a much stronger position to provide technical support to extension. However, further strengthening is necessary. Three new RRCs are yet to be established in three large areas 2/ (Map 14076). Two existing RRCs are not yet adequately equipped and staffed. Completion of staffing for multi- disciplinary research teams for crops other than rice is urgently needed for all RRCs. Furthermore, linkage between research and extension exists only for rice in the form of Field Extension Trials (Minikits and production kits) handled by extension officers. Such links do not exist for other crops, nor for rice trials beyond those for varieties, fertilizers and agro-chemicals. Further information on DA research is given in Annex 1. 1/ Rice (in cooperation with USAID/IRRI), cropping system (IDRC of Canada), coarse grains (CIDA of Canada), grain legumes (IDRC), root and tuber crops (IDRC and International Potato Center), soybean (UNDP/UNICEF/CARE), vegetables (vegetable cultivars from Asian Vegetable Research and Devel- opment Center), oilseeds and fiber, condiments and fruits. 2/ Map 14076: (a) East coast (DL2), (b) far north and northwest (DL3 and DL4), (c) Intermediate zone low-country (ILl, IL2 and IL3).  -9- 2.17 DAPH (para 2.13 (b)) has five research stations (Veterinary, Central Poultry and Mid-country Pasture in Kandy, Central Livestock in Polonnaruwa, and Sheep in Badulla) and a Vaccine Testing Center at Kandy. Coconut research is conducted by the Coconut Research Institute at Lunuwila under the Ministry of Coconut Industry. Tea and rubber research is conducted by Tea and Rubber Research Institutes under the Ministry of Plantation Industry and is not covered by this project. 2.18 Extension. The management of agricultural extension is presently much more diverse than research. The Extension Division of DA is the main stay with a total of 2,285 field officers at District, Division and Village levels. However, under the same Ministry (MADR): (a) the Minor Export Crops Department provides support for promoting spice and beverage minor tree crops; and (b) the Land Commissioner's Department administers 25 Special Projects 1/ in ten Districts wherein project extension officers report direct- ly to the headquarters of the Extension Division of DA instead of to District Agricultural Extension Officers. The Mahaweli Development Authority has a similar arrangement with DA, but on a more intensive scale. Livestock has its own extension services; with 97 veterinarian officers at the Range level and 600 KVS level officers at the Village level. The Ministry of Coconut Industry has its own field officers at regional, district and Division levels who process subsidies, arrange for credit and input supplies and do some exten- sion work for coconut. 2.19 The present situation is obviously confused and unsatisfactory. First of all, DA's own extension officers are deficient in number (each responsible for an average 1,200 farm families), and are restrained from village visits by scarcity of vehicles, suitably located housing and the lack of systematic up-to-date technical backstopping. They frequently have to perform non-extension duties on instructions by local authorties. Moreover, DA has to comply with other agencies' demands for special arrangements for extension services in the project areas of these agencies; in itself this is a result of general deficiencies of the existing service. Coconut Development Officers are posted at Regional, District and Division levels, and are occupied mainly by non-extension duties. There are no coconut officers at the village level. Livestock village level officers provide mainly veterinarian services at present. There is, therefore, wide variation in the density, quality and delivery system of extension work both area-wise and crop-wise; lack of a coordinated and clearly defined annual plan for deciding priority extension messages to be passed on to farmers; uneconomic use of already understaffed extension officers, and, most of all, lack of an efficient system for deliver- ing extension messages to small farmers. 2.20 Training. DA's facilities for providing pre-service and in-service training to extension officers now consists of: (a) three Regional Training Centers (RTCs) for providing in-service pre-seasonal training of Subject Matter Officers (SMOs), Agricultural Instructors (AIs) and Village Extension Officers (KVSs); (b) District Training Centers (DTCs) in 14 Districts for providing one 1/ A total of about 300,000 ac of paddyland and upland in major irrigation schemes.  - 10 - year pre-service training of KVS with an enrollment of 639; and (c) one School of Agriculture for providing a two year diploma level training to youths with a GCE 1/ level certificate to become AIs, with an enrollment of 160. Aside from training DA's regular extension officers, these institutions also accom- modate training sessions for other rural and agricultural activities, such as home economics for women extension workers, supervisory officers of rural youth colonies, agrarian service officers, coconut officers, etc. The loca- tions of these training institutions are shown in Map 14078. The existing training facilities need to be strengthened and the teaching staff substan- tially expanded to meet project objectives. 2.21 DA has already acquired a certain quantity of audio-visual training aids which are being serviced inadequately by a workshop at the Central Research Station at Gannoruwa (set-up with assistance from FAO/UNDP Project SRL/75/058 for repairing research apparatus of research stations). This work- shop will be expanded under the project. 2.22 Training of Coconut Development Offcers is provided by the Coconut Research Institute, and Livestock and Veterinary officers by training centers of DAPH. There is adequate research information for training extension offi- cers on coconut and livestock for supporting the level of extension envisaged for the project, but training material needs to be updated, and systems for delivery of extension messages to farmers needs to be strengthened. Agricultural Statistics and Economics 2.23 Agricultural statistics with reasonable reliability and consistency are essential for planning and measuring the impact of agricultural develop- ment programs. Sri Lanka is particularly weak on statistics for field crops other than rice. There are two sets of data, one from the Department of Census and Statistics (DCS), Ministry of Finance and Planning, dating back to early 1950s, and one from DA initiated in 1971. The duplicating years of the two sets (from 1971 through 1974) show wide discrepancies, in many instances. DCS has been the only source of rice statistics and the Ministry of Plantation Industry is the only source of statistics for the three major tree crops. In the future, the Ministry of Coconut Industry will issue statistics on coconut. The project will encourage collaboration between DCS and DA in collecting crop statistics (para 3.25). 2.24 The DA's Economic Unit is staffed at present with two Agricultural Economists at headquarters and 22 Economic Assistants, one in each District. The present functions of the Unit are: to collect farm record sheets from 1,000 sample farmers to develop for DA production estimates of field crops other than rice; to help DCS in collecting rice data, and to perform economic analysis of various kinds for DA and MADR. This unit will be strengthened under the project, in particular to undertake project monitoring and evaluation. 1/ General Certificate of Education, equal to high school diploma.  - 11 - Supply of Inputs 2.25 Fertilizers. Total annual consumption of fertilizers in Sri Lanka from 1961 to 1976 fluctuated between 341,800 mt in 1971 to 210,000 mt in 1975 (Annex 2, Table 5(a)). During these 15 years, there has been a general decline in consumption of fertilizers by tree crops, while there has been an increase in those consumed by paddy and other field crops as shown below: Table 2.1: FERTILIZER CONSUMPTION BY CROPS (1,000 mt) Crop 1961 1964 1967 1970 1973 1976 Tea 143.5 172.5 142.2 106.7 91.9 95.3 Rubber 28.6 26.7 21.9 20.4 14.6 13.0 Coconut 43.0 48.4 49.4 63.8 38.6 30.7 Paddy 29.0 60.1 73.2 87.1 125.5 72.4 Other Crops 33.8 31.9 49.5 56.5 54.1 52.9 Total 277.9 339.6 336.2 334.5 324.7 264.3 Source: Ceylon Fertilizer Corporation. 2.26 The highest national averages for fertilizer nutrient application rates per ac ever reached in Sri Lanka for various crops were: tea 170 lb (1964); rubber 25 lb (1961); coconut 40 lb (1970); paddy 72 lb (1973) and other crops 60 lb (1971). In 1976, the respective rates were: tea 118 lb, rubber 13 lb, coconut 20 lb, paddy 42 lb, other crops 32 lb, with an average for all crops of 40 lb/ac. Yearly data are presented in Annex 2, Table 5(b). Even at the record highs, the average rates per ac 1/ were still very low, except for tea. In the last decade, fluctation in fertilizer consumption by paddy and other field crops seemed to be affected by frequent adjustments in fertilizer prices and subsidy rates (para 2.29) and relaxation and tightening of rural credit discipline rather than by the changing needs of farmers. The effect of fertilizer prices on farmer incentives are discussed in para 6.03. 2.27 Fertilizers are imported solely by the Ceylon Fertilizer Corpora- tion, but are distributed to farmers through various channels. Fertilizers for paddy and other field crops go through three channels: the Agrarian Servic,e Center godowns of DAS; the multi-purpose cooperative societies, and private dealers. Fertilizers for tree crops are provided mainly by private firms which own private mixing plants, take delivery of imported fertilizers from the Fertilizer Corporation ex-wharf, and distribute mixed fertilizers to plantations through their own network of authorized dealers. The Tea and Rubber Control Boards and Coconut Cultivation Board have separate arrange- ments for supplying fertilizers to smallholders, either directly or through cooperatives. 1/ Actual application rates, of course, vary widely, i.e., between paddy grown in major irrigation schemes and in bog and half-bog soils along the SW coast, and among other crops; between "exotic vegetables" in Nuwewa Eliya and pulses and oilseeds in the heart of the dry zone.  - 12 - 2.28 DAS, as a Government channel for fertilizer distribution, coordinates fertilizer user Departments and Boards to review seasonally the supply, dis- tribution and stock situation, and to determine requirements for imports by the Fertilizer Corporation. The Fertilizer Corporation has records on the quantities of fertilizers distributed through different channels which are intended for different crops. But no agency at present is able to adequately keep track of the quantities of fertilizers sold and the stock remaining in the pipeline of different channels at various times during the fertilizer distribution season. Nor is there reliable information on how much fertil- izer is actually used by different crops, as intercrop shifting of fertil- izers undoubtedly takes place. 2.29 The fertilizer subsidy for paddy was first introduced in 1962. From September 1968 to July 1974, the subsidy rate remained at 50%. The subsidy was removed in July 1974 but reinstated at 33% in October 1974. In November 1975, the rate was readjusted back to 50% for paddy and all other crops. In 1977, the subsidy rate was raised to 75%, but was brought back to 50% in 1978. 2.30 One of the main functions of ADA (para 2.15) will be to coordinate fertilizer supply from the different sources at the local level in support of the extension service. ADA has a full time Board of Directors, chaired by the Secretary of MADR, nine Provincial Directors and plans to appoint a manager in each electorate (roughly equal to a Division). As of May, 1979, it had appointed managers in 45 electorates, out of a total of about 160 in the country. Other improvements in the fertilizer distribution system are obviously needed, but it is beyond the scope of this project. 2.31 Seeds. Under DA's management, about 1,100 seed growers in the yala season and 1,500 in maha season produce about 300,000 to 400,000 bushels of certified HYV paddy seeds per annum. This output would meet approximately 10% to 15% of the total seed requirement of 1.2 M ac of maha rice and 0.6 M ac of yala rice (at about 1.5 bushels per ac). The production of certified seeds for other crops by DA is minimal mainly because of the lack of outstanding HYVs. Potato and "exotic" (Western type) vegetable seeds are largely imported each year. DA has 42 seed farms in different Districts with a total area of about 12,200 ac, of which about 8,000 ac are being used. These farms have received some equipment under the Agricultural Development project, IDA Cr. 595-CE, USAID, CIDA and German aid projects. The supply of certified seeds of field crops other than rice is expected to improve when new varieties become available. To compliment DA's seed multiplication and distribution system, the extension service will help by teaching farmers to keep their own seeds pure and viable, so that the impact of the limited quantity of certified seeds now being distributed, can be maintained for a longer period. 2.32 Pesticides and Herbicides. Pesticides and herbicides are being imported and distributed by private firms. Shortages have arisen in the past due to import restrictions and the lack of knowledge by the firms concerning stocks of the right kind of chemicals, in the right quantities, at the right time. With the liberalization of imports, and the strengthening of the  - 13 - extension service, the agro-chemical dealers are expected to have better information and receive better guidance on what and how much to stock. How- ever, future developments need to be monitored by the Government (i.e. ADA) to ensure adequate and timely supply of agro-chemicals to farmers as demand increases. Marketing and Prices 2.33 Government purchase of paddy is currently handled by the Paddy Marketing Board (PMB) of MADR. PMB has about 4,000 purchasing centers. 1/ Between 1971 and 1977, the annual PMB paddy procurement fluctuated from 32.4 M bushels in 1971 (48.4% of total paddy production) to 11.3 M bushels in 1975 (20.5%). The purchase in 1977 was 24.6 M bushels (30.6%). PMB pur- chases at prices set by the Government according to the "Guaranteed Price Scheme" (GPS) and stores paddy in its 280 warehouses throughout the island. Rice milled from the PMB paddy stock is transferred to the Food Commissioner for distribution under the Government's ration system. The GPS price paddy is now Rs 40/bushel and generally lower than market prices. Most of the crop is, therefore, marketed through commercial channels. 2.34 The Marketing Department of the Ministry of Trade plays an active role in vegetable and fruit marketing. It performs interregional transporta- tion, storage, and price regulation. It holds and releases stocks, and improves packing of vegetables and fruits. The Department owns some 120 trucks and operates common and cold stores. It has 67 collecting centers, 127 retail shops and ten people's markets in large cities. It handles 20-25% of the total vegetables and fruit output in the country. Beginning in 1974, the Department started to purchase coarse grains and grain legumes. In 1977, it purchased some 1,900 tons of these crops. The Cooperative Marketing Federation entered the vegetable and fruit marketing field in recent years, handling about 5% of the produce. Thus, private traders operate most of the marketing of paddy, vegetables and fruits, as well as for other field crops and prices are set in commercial markets. 2.35 The Coconut Marketing Authority (CMA) under the Ministry of Coconut Industry operates Copra Sales Rooms where copra dealers and estate owners auction off copra to oil millers or copra shippers. The copra auction prices, well known in the trade, are used to derive prices for fresh nuts or other coconut products by dealers at different levels -- the lowest level buys fresh nuts from smallholders. Retail consumer prices are roughly twice farm gate prices. CMA also has many other activities, such as promotion, regula- tion and licensing of traders. 2.35 A Market Research Unit has recently been established by MADR for conducting necessary research on agricultural marketing. The Unit is for the time being attached to the Agricultural Research and Training Institute of MADR in Colombo. 1/ Branch Offices of Multi-purpose Cooperative Societies.  - 14 - III. THE PROJECT Objectives and Approach 3.01 The project would help Sri Lanka to apply the T&V extension system to the entire country, to strengthen adaptive research and to improve and expand training of extension officers. As such it would compliment all on-going and future agricultural, irrigation and rural development projects financed by the Bank Group and other donors. The project was prepared by the FAO/UNDP financed Project SRL-75/058 executed by FAO 1/ in close colla- boration with DA. 3.02 The project aims at raising production and income levels on estab- lished and newly settled farms covering about 4.8 M ac of permanent and chena farm land cultivated by about 1.4 M farm families, 2/. Rice, a wide range of upland crops, coconut and undercrops, minor exportable beverage and condiment crops, vegetables and fruits, and associated livestock would be the subject of project activities. The project will not deal with tea and rubber which are grown mainly in large contiguous blocks not in association with field crops. Project Components 3.03 Specifically, the proposed project would include: (a) Strengthening of extension services by the establishment of a unified T&V extension system for all crops (except tea and rubber), and animal husbandry for the entire country; (b) Establishment of an adaptive research network on the basis of the country's agro-ecological regions (AERs); (c) Improvement and expansion of agricultural training insti- tutions of DA; (d) Strengthening of the Economic Unit of DA; (e) Strengthening of the building construction capability of DA; (f) Provision of funds for salaries and allowances for incremental extension, adaptive research, training, economics and civil engineering staff required as a consequence of the project; 1/ The project is entitled "Reorganization of Research, Extension and Training Resources for Agriculture," and it is a parallel project to an IDA-financed Agricultural Development Project (Cr. 595-CE). 2/ Out of a total of about 1.6 M holdings minus smallholders of tea and rubber and those with only a house lot.  - 15 - (g) Construction of necessary living quarters for incremental staff and buildings for training quarters, offices, labora- tories, and workshops; (h) Provision of appropriate vehicles for incremental staff, and equipment for farms, laboratories, workshops, offices, extension and training; (i) Provision of incremental operating and maintenance costs for project works, buildings, vehicles and equipment; (j) Overseas training of project staff from DA, DAPH and CCB; and (k) Provision of consultants to assist in implementiang the project. Detailed Features 3.04 Strengthening of Extension Service. A unified T&V extension system for all crops (except tea and rubber) and animal husbandry (excluding veteri- narian services and supplies of improved animal breeds) will be established for the entire country. The T&V Extension system was introduced into Sri Lanka in 1976 as a component of the Tank Irrigation Modernization Project (Cr. 666-CE) in the Anuradhapura District. This effort has revealed the existence of a number of problems: (a) diverting AIs and KVSs from time to time to non- extension jobs, thus interferring with their visit and training schedule; (b) outside pressure for replacing extension officers with new ones, thus impairing the effectiveness of bi-weekly training tied to local crop calendars; (c) delays in appointing additional SMOs, AIs and KVSs, and in procurement of vehicles; and (d) improper selection of some of the contact farmers by appoint- ing rich farmers around whom small farmers would not normally gather and with whom small farmers would not feel free to discuss extension messages. On the other hand, Cr. 666-CE demonstrated that transmission of extension messages was much more effective by the T&V extension system than the traditional system when there was no interference with the scheduled work of extension officers; where contact farmers were properly selected and where AIs and KVSs were able to follow the pre-determined schedule. Agreements have been obtained from GOSL that (a) Extension Officers (AO, SMO, AI and KVS) in all districts would attend full time to extension education work, and their training and visit schedules would not be interferred with at any time; these officers would not be trans- ferred out or replaced by new men except for unsatisfactory performance of their scheduled duties and at the discretion of responsible officials of DA including DAEOs; (b) the Ministry of Rural Industrial Development and the Ministry of Coconut Industry would support the unified T&V extension system by designating their District level officers to serve as subject matter officers on animal husbandry and coconut cultivation for training the village and range level extension officers of DA, who would pass on extension messages to farmers; and (c) the Ministry of Mahaweli Development and Ministry of Land and Land Development would entrust extension work in Mahaweli Ganga develop- ment projects, irrigation projects and special project areas to DA.  - 16 - 3.05 The number of DA extension officers would be increased by a total of 1,260 at different levels as follows: Table 3.1: INCREMENTAL REQUIREMENT OF DA EXTENSION STAFF To be Incre- Financed Project mental Total Under Net Present Require- Require- Replace- Incre- Kurune- Incre- Level Total ment ment ment mental gala RD mental Office (KVS) /a 496 496 - Village (KVS) 1,187 2,137 950 150 1,100 140 960 Range (AI) 421 496 75 32 107 4 103 District (SMO) 127 259 132 16 148 9 139 (AO) 20 58 38 12 50 3 47 /b (DAEO) 22 24 2 /b - 2 - 2 /b Headquarters (AO/SMOS) 12 21 9 - 9 - 9 Total 2,285 3,491 1,206 210 1,416 156 1,260 /a In Offices of AI at Agricultural Service Centers. /b Two new Districts have recently been added. 3.06 The present ratios work out to about 1,200 farm families (on the basis of 1.4 M families) supervised by one field KVS, three KVSs' to one AI, 21 AIs to one AO, and only one AO under the DAEO in each district. Under the project, these ratios would be adjusted to, on average, 750 farm families per KVS (on the basis of 1.6 M families 1/ by the fifth year), 4-5 KVSs' per AI, 8-9 AI per AO and 2-3 AOs' per district. The number of SMOs would be doubled from about 5 to 10 per district. Actual numbers of various officers vary with districts according to density of farm families and diversity of crops (Annex 3, Tables 1 and 2). 3.07 Under the charge of DAEO, each district would be divided into two to three groups of divisions, each supervised by an AO. The number and dis- cipline of SMOs would depend on the crops and needs of the district. SMOs would provide bi-weekly, one-day training sessions to AIs and KVSs in the AO territories by rotation, and would be responsible for conducting field demonstrations. A basic bi-weekly training schedule for KVSs and AIs for all crops other than coconut would be prepared each year. There would be separate schedules for the maha and the yala seasons for each AO territory, according to local crop calendars. Training schedules in the first year would be devoted to rice, one or two other crops of local importance and animal husbandry. 1/ From 1.4 M families before project with a natural growth of 30,000 fam- ilies per year (para 2.11) and 10,000 families per year to be settled under the accelerated settlement under Mahaweli Ganga Development Program and other settlement projects.  - 17 - Sessions on livestock and coconut would be inserted into the basic schedule according to a schedule to be determined by the livestock and coconut officers. In IDA assisted Dairy Project (Credit 504-CE) areas, the National Livestock Development Board (NLDB) would appoint officers to train KVSs and AI of DA on extension messages concerning dairy husbandry. In these areas, the KVSs would coordinate their scheduled visits to villages with NLDB dairy cooperative personnel in the area. DAEOs would coordinate the overall scheduling. The schedules would be revised each year; messages already widely accepted by farmers would be dropped while new crops and innovations would be added. 3.08 The farm families covered by each KVS (750 on average) would be divided into about eight "clusters," containing on an average 95 families in each cluster. Some seven to eight farmers in each cluster would be selected by the KVS as "contact" farmers, each representing a group of about 12 to 13 follower farmers. At full development, the 2,137 field KVSs are expected to visit about 130,000 contact farmers each fortnight and through them to pass extension message on to 1.6 M farm families. Since the field demonstrations would be mainly on selected contact farmers' fields, AIs and KVSs would super- vise the demonstration plots and explain the practices to follower farmers during their scheduled visits with contact farmers. 3.09 The messages conveyed by KVSs to farmers would be simple and would concentrate on practices which would produce quick and profitable responses. The specific practices would vary with each AER. Such practices would include inter alia: (a) for paddy and other field crops -- the use of new HYVs of different growth duration, timing of land preparation and planting (improved seed beds), removal of bad seeds before sowing, treatment of seeds, plant population, weeding, soil moisture retention or on-farm drainage as needed, manure and fertilizers, and protection against pests. (b) for coconut -- removal of senile trees, filling in missing plants by replanting, soil moisture conservation or drainage as needed, proper underplanting, economic sharing of fertil- izers by coconut and undercrops. (c) for livestock -- animal sanitation, benefit of vaccination, efficient use of available natural and commercial feeds, care of young and pregnant animals. 3.10 Depending on the level of husbandry and financial capacity of farmers in different AERs, different technical packages would be recommended (detailed in Annex 1, Table 2). The simplest packages would concentrate on the use of improved cultural practices, and would involve little or no additional cash inputs. Increasingly, other packages would include cultural practices together with increased levels of fertilizer and pesticides.  - 18 - 3.11 Incremental staff, living and office quarters, vehicles and equip- ment would be provided under the project and are detailed in Annex 4, Tables 3 to 9. 3.12 Strengthening of Adaptive Research. RRCs will be responsible for planning, executing and supervising the adaptive research program. Extension officers will be released from supervision of field trials. Adaptive research will be conducted in farmers' fields as a link between research and extension. The activities would include field trials on new varieties, improved cultural practices and use of inputs for all field crops as these technologies emerge from research conducted by RRCs and their sub-stations. The existing mini-kit and production-kit trials for rice would be incorporated into the new program. 3.13 Some 24 Adaptive Research Centers (ARCs) would be established to cover most of the 22 AERs and all Districts, and would be manned by a total of 52 Experiment Officers and 17 Experiment Assistants. Each center would con- sist of a simple agronomy laboratory and offices for the staff, whose job is to supervise trial plots laid out in farmers' fields. The ARCs would be supervised by eight mobile teams based in and backstopped by the five existing RRCs. Each mobile team would consist of, on average four research officers. Disciplines of the team members would vary with major agro- climatic zones. 3.14 In addition to the adaptive research centers, an initial building would be built on sites of each of the three proposed new RRCs, which are yet to be established (para 2.16) by DA. These prebodies of RRCs would be provided with a new staff consisting of eight Research Officers, eight Experiment Officers and 13 Experiment Assistants. Until fully developed, they would function as additional branch experiment stations of the existing RRCs and as additional mobile teams for supervising adaptive research work in their areas. 3.15 Annual plans for adaptive research would be prepared by RRCs in consultation with DAEOs. Technical coordination between research, extension and training is discussed further in para 5.03. The Deputy Director (Research) would call meetings of all RRCs to achieve inter-regional coordination. 3.16 The numbers of incremental adaptive research staff required is given in Annex 3, Table 6. Incremental personnel, housing, laboratories cum office buildings, vehicles and equipment would be provided under the project and are detailed in Annex 4, Tables 20 to 24. 3.17 Strengthening of Training Institutions. Under the project, the DA's existing training facilities would be improved, new centers built and equipped and training staff expanded and upgraded, in order to provide better quality training to: (i) incremental extension, adaptive research, and eco- nomic staff of DA required by the project; and (ii) Cultivation Officers of DAS, and field officers of other agencies. The number of new DA recruits to be trained annually are estimated as follows:  - 19 - Table 3.2: ESTIMATED ANNUAL PRE-SERVICE TRAINING REQUIREMENTS OF DA INCREMENTAL PROJECT STAFF Level Officers Graduate Diploma Certificate Extension 12 51 220 Training 12 5 23 Adaptive Research 10 13 4 Agricultural Economic 2 9 - Total 36 78 247 3.18 The number of institutions for pre-service training of AIs and KVSs would remain unchanged; the number of centers for in-service pre-seasonal training of all levels of extension staff would be increased from three to eight under the project. The number of training staff would be increased from the present 123 to 323 as follows: Table 3.3: SUMMARY OF INCREMENTAL DA TRAINING STAFF Present Project Incremental Level Total Requirement Requirement AO 4 23 19 SMS 15 50 35 AI 51 76 25 KVS 33 49 16 Electrical Engineer - 1 1 Electrician Technician - 4 4 Others (Annex 3, Table 4) 20 120 100 Total 123 323 200 A detailed breakdown by training center is given in Annex 3, Table 4. 3.19 Training and living quarters of the School of Agricultural at Kundasal which provides two years pre-service training to candidates of all diploma level agricultural officers, needs only renovation and additions to accommodate an annual intake of about 200 students. According to past records, DA took only about 40-60% of the graduates into its AI service, while the remaining graduates were employed by other agencies or went into private business. 3.20 Buildings at the existing 14 District Training Centers (Map 14078) which offer a one year certificate level pre-service training course to candidates for KVS level officers, also need renovation and additions to accommodate the project requirement. These centers, each with 50 beds, have a total capacity for 700 trainees. They would take in about 500 trainees annually, from which the DA would recruit about 250 as KVSs in different branches of the Department. The other half of the graduates would be absorbed  - 20 - by other agencies. The remaining 200 beds (in 14 centers) would accommodate special short period trainees such as officers for womens' programs, local youth cooperative or collective farms, multi-purpose cooperatives, etc. 3.21 There are three existing Regional Training Centers (RTCs) located at three of the five existing RRCs (Map 14078). Under the project, an initial building would be built for each of the three new RRCs to be established by DA (para 3.14). Eventually there would be eight RRCs (Map 14078). Five new RTCs, each with a 50 bed capacity, will be built so that there would be eight RTCs, each next to a RRC. RTCs would be used for in-service training of all levels of extension staff. Each year, a total of about 3,000 1/ would attend pre-season refresher training courses for ten days, five days during February and March (yala) and five days during July and August (maha). For four months in a year, therefore, the eight RTCs will be fully used by DA's extension staff. The seeming over-capacity of RTCs is due to the need for completing pre-seasonal trainings in batches of 50 officers within four months so that all extension officers could go back to their posts during the crop growing seasons. In the remaining eight months, RTCs would accommodate in-service training sessions, organized upon request from DAS for its 4,000 Cultivation Officers, also in batches of 50, which would take another four months. In- service training sessions organized upon requests from agencies, such as the Mahaweli Development Authority, the Coconut Cultivation Board, the Sugar Corporation, etc., and workshops and training sessions organized by RRCs for research and adaptive research officers and assistants, would also use RTCs. 3.22 Physical facilities of existing training centers would be adequately strengthened, where necessary, for upgrading the working efficiency of the training centers. More importantly, the project would seek to significantly improve the quality of training provided by these institutions in a number of ways: (a) subject to IDA agreement to retroactive financing up to US$200,000, DA would conduct pre-project training of SMOs beginning May, 1979, so that sufficient number of SMOs would be ready to train AIs and KVSs when imple- mentation of this project commences; (b) a systematic effort would be made to update the training material for all crops, animal husbandry, on-farm water management and plant protection with assistance from consultants (para 3.34); (c) training methodology would be made a part of the training of the field extension staff. 2/ 3.23 Incremental staff, housing, vehicles and equipment would be provided under the project and are detailed in Annex 4, Tables 10 to 19. 1/ 2,137 field KVSs, 496 AIs, 259 SMOs, 58 AOs, 24 DAEOs and 21 AOs/SMSs at DA headquarters. 2/ Under FAO/UNDP project SRL/75/058, two training methodology experts from New Zealand conducted a two month training course in Sri Lanka. As a result, an extension methodology instructor is now available in each District serving under the DAEO. Two senior staff of DA Training Division, undertaking training abroad on training methodology, were to have returned in 1979.  - 21 - 3.24 Strengthening of Agricultural Economics, Statistics, and Project Monitoring and Evaluation. Under the Project, the staff of the Economics Unit of DA would be expanded as follows: Table 3.4: INCREMENTAL DA ECONOMIC STAFF Existing Incremental Final Total Category DA RRC Districts DA RRC Districts DA RRC Districts Ag. Economists 2 - - 3 4 /a - 5 4 - Eco. Assistants /b - - 22 /b - - 26 - - 48 /c Computer Programmer - - - 1 - - 1 - - /a Each Economist would serve two RRCs. /b There is one Economic Assistant in each of the former 22 districts at present. /c Two new Districts were created in 1978. There will be two Economic Assistants in each of the present 24 districts. 3.25 The responsibilities of the Unit, in addition to its present functions (para 2.24) would be expanded to include: (a) conducting a benchmark survey in cooperation with DCS. (b) establishing and maintaining a sampling system under which farm record sheets would be maintained continuously by 5,000 farmers (1,000 at present), and as a part of conti- nuous project evaluation, to analyze data seasonally to provide up-to-date estimates of trends of use in inputs and credit, farm gate prices of various crops and the relationship between farm costs and incomes. The analysis is also expec- ted to throw light on ways to improve farm management in various AERs. (c) helping Adaptive Research Teams of RRCs in evaluating the economics of proposed changes in cropping systems and tech- nologies and helping RTCs in incorporating farm management in the pre-service training of KVSs and AIs; and (d) monitoring and evaluation of the project. 3.26 Incremental staff, housing, vehicles and equipment would be provided under the project and are detailed in Annex 4, Table 25. 3.27 Strengthening of Civil Engineering Unit of DA. The existing staff of the Civil Engineering Unit (para 5.11) would be modestly strengthened as follows:  - 22 - Table 3.5: INCREMENTAL DA CIVIL ENGINEERING STAFF Present Incremental Final Total Head- Head- Head- quarters Districts quarters Districts quarters Districts Superintending Engineer 1 - - - 1 - Engineer (graduates) 4 - 3 - 7 - Engineer Assistants (Diploma) 6 - 2 - 8 - Inspectors (Certificate) - 19 - 5 - 24 Overseers - 50 - - - 50 Draftsmen 5 - 1 - 6 - Total 16 69 6 5 22 74 DA would stop carrying out construction by force account, except for routine maintenance and repairs, and its civil engineering staff would be fully mobilized to supervise construction done by private local contractors. After project completion, the expanded staff would be responsible for future con- struction of DA and maintenance and repair of all the DOAs' buildings. Agreement has been obtained that GOSL would ensure timely supply of building materials for the project according to the need and an agreed time table. 3.28 Assurances have been obtained from GOSL that DA would submit a plan satisfactory to IDA before December 31, 1979, including: (a) agreement to cease construction by force account except for routine maintenance and repairs; (b) immediate appointment of additional civil engineering staff as listed in Table 3.5 above; (c) designs and cost estimates of all buildings to be constructed during the first year of the project; (d) estimates of quantities of building materials required for the first year construction indicating kinds and quantities of materials for which assurances of timely supply by the Government are needed. 3.29 Incremental staff, housing, vehicles and equipment would be pro- vided under the project and are detailed in Annex 4, Table 26.  - 23 - 3.30 Overseas Training and Technical Assistance. Overseas training provided under the project would send selected field level extension officers to observe the operation of the T&V extension system in India, where the system has been in operation for more than three years and is highly success- ful. Secondly, it would assist Sri Lanka in building up capabilities and expertise in the senior level officers of extension, research and training in disciplines where the present manpower is thin. 3.31 For meeting the first objective, the project would finance, over a five year period, the visit of a total of 120 KVSs, 48 AIs, 24 SMOs and 24 AOs to suitable areas of India. The AOs, SMOs and AIs would spend one month in India. They would be joined by KVSs towards the end of their stay for ten days. 3.32 For meeting the second objective, the project would finance, over a five year period, six month overseas studies of three senior training officers on training methodology. The project would also finance, six month overseas studies at international research institutions by 14 Research Officers and 14 Subject Matter Specialists. The allocation of trainees among subject matters would tentatively be as follows: (a) 3 research officers and 1 SMS on Coarse grains - at ICRISAT. (b) 3 research officers and 1 SMS on Grain Legume - at ICRISAT. (c) 3 research officers and 1 SMS on Root and Tuber Crops - at IITA. (d) 3 research officers and 1 SMS on Rice - at IRRI (one research officer each on plant protection, problem soils, and multiple cropping). (e) 2 research officers and 1 SMS on Vegetables - at AVRDC or other appropriate institute. (f) 5 SMSs on Animal Husbandry - at CIAT; and (g) 4 SMSs on Coconut production - at IRHO. 3.33 This effort is to help build up multi-disciplinary teams of research officers, and to upgrade SMSs who are to provide leadership in extension, particularly on crops other than rice. The five existing RRCs have at least one complete team of agronomist, breeder, entomologist, pathologist and soil expert for rice. Teams for crops other than rice are mostly incomplete and less experienced. Most RRCs have one team working on many crops. The animal husbandry and coconut trainees, upon return, would concentrate on digesting proven research information and systematically upgrading extension and training materials presently being used.  - 24 - 3.34 To further assist DA to strengthen the linkage between research, training and extension, the project would finance 138 man months of con- sultants including: (a) 24 man-months of a team leader (general extension agricul- turist with administrative and management experience); (b) 18 man-months each of an animal husbandry specialist and a coconut/undercrop specialist; (c) 15 man-months each of an on-farm water management specialist and a plant protection specialist; and (d) 12 man-months each of a coarse grain specialist, a grain legume specialist, a root/tuber crop specialist and a vegetable specialist. The consultants would assist DA in (a) reviewing current research and in identifying therefrom technologies which are ready to go into the adaptive research program, the demonstration program and into extension; (b) designing various adaptive research projects and, methods of analysing results, and (c) systematically upgrading the extension and training materials for crops and livestock. Assurance has been obtained from GOSL that the project con- sultants would be appointed not later than January 31, 1980 according to terms and conditions satisfactory to IDA. 3.35 Costs of overseas training and consultants would be provided under the project and are detailed in Annex 4, Table 26. IV. PROJECT COSTS AND SCHEDULE OF EXPENDITURES Cost Estimates and Schedule of Expenditures 4.01 Total project costs over the five year project period (1980-1985) are estimated at US$22.5 M equivalent. The foreign exchange component is estimated at US$9.7 M or about 43% of the total project cost. The estimated $12.8 M local currency cost includes about US$0.4 M of taxes and duties. Cost estimates are based on unit prices adjusted to 1979 levels. Physical con- tingencies of 10% for all costs are included. Price contingencies have been estimated at 8% per annum for vehicles and equipment and 10% per annum for civil works and other cost items, for both foreign and local costs.  - 25 - 4.02 Major elements in the cost estimates are buildings (US$5.4 M), vehicles (US$2.8 M), equipment (US$1.2 M), incremental salaries and allow- ances (US$4.2 M), overseas training and technical assistance (US$1.6 M), and incremental operating and maintenance costs during the project period (US$2.2 M). The base project cost is estimated at US$17.4 M. Physical con- tingencies (US$1.7 M) and price contingencies (US$3.4 M) bring the total project cost to US$22.5 M. Estimated project costs, detailed in Annex 4, are summarized below (Table 4.1 and 4.2). Table 4.1: SUMMARY OF PROJECT COST BY EXPENDITURE Foreign Foreign Percent- Local Exchange Total Local Exchange Total age --------Rs M--------- -------US$ M--------- Buildings 60.3 25.8 86.1 3.8 1.6 5.4 24.0 Vehicles 2.2 42.1 44.3 .1 2.7 2.8 12.4 Equipment .9 17.7 18.6 .1 1.1 1.2 5.3 Vehicle Operating and Maintenance Costs 1.3 11.9 13.3 .1 .8 .9 4.0 Other Operating and Maintenance Costs 19.3 1.9 21.2 1.2 .1 1.3 5.8 Incremental Salaries and Allowances 65.6 - 65.6 4.2 - 4.2 18.7 Overseas Training and Technical Assistance - 24.8 24.8 - 1.6 1.6 7.1 Base Cost 149.6 124.2 273.8 9.5 7.9 17.4 74.3 Physical Contingencies 15.0 12.4 27.4 .9 .8 1.7 7.6 Price Contingencies 37.0 16.3 53.2 2.3 1.0 3.3 15.1 Total Cost 201.5 152.8 354.4 12.7 9.7 22.4 100.0 Note: Inconsistencies due to rounding.  - 26 - Table 4.2: SUMMARY OF PROJECT COST BY COMPONENT Foreign Foreign Percent- Local Exchange Total Local Exchange Total age --------Rs M--------- -------US$ M--------- Extension 91.3 56.1 147.4 5.8 3.5 9.3 41.5 Adaptive Research 20.8 14.7 35.4 1.3 .9 2.2 9.8 Training 32.8 22.7 55.1 2.1 1.4 3.5 15.6 Economics, Monitoring and Evaluation 3.7 3.0 6.7 .2 .2 .4 1.8 Overseas Training and Technical Assistance - 24.8 24.8 - .1.6 1.6 7.2 Engineering and Adminstration 1.4 2.9 4.3 .1 .2 .3 1.3 Base Cost 149.6 124.2 273.8 9.5 7.8 17.3 77.2 Physical Contingencies 14.9 12.4 27.4 .9 .8 1.7 7.6 Price Contingencies 37.0 16.2 53.2 2.3 1.0 3.4 15.2 Total Cost 201.5 152.8 354.4 12.8 9.7 22.4 100.0 Note: Inconsistencies due to rounding. Financing 4.03 The proposed IDA credit of US$15.5 M would finance the full foreign exchange cost and about 46% of the local cost or about 70% of total project cost, net of taxes and duties. GOSL would provide the remaining costs of US$6.9 M equivalent from its annual budgets. The proposed financing plan is summarized below: Table 4.3: PROPOSED PROJECT FINANCING Total Cost IDA GOSL ----------Rs M----------- Buildings 86.1 59.4 26.7 Vehicles 44.3 42.1 2.2 Equipment 18.6 17.7 0.9 Vehicle O&M Costs 13.3 - 13.3 Other O&M Costs 21.2 - 21.2 Salaries and Allowances 65.6 45.3 20.3 Overseas Training and Technical Assistance 24.8 24.8 - Contingencies 80.5 55.6 24.9 Total 354.4 244.9 109.5  - 27 - Procurement 4.04 Vehicles. Four-wheel vehicles with spares and equipment with an estimated cif cost of US$2.1 M (net of contingencies) would be procured through international competitive bidding (ICB) in accordance with Bank Group guidelines. A preference limited to 15% of the cif price of imported goods or the import duty, whichever is lower, would be extended to local manufacturers in the evaluation of bids. ICB would be impractical for pro- curement of bicycles and motorcycles (cif cost of US$0.6 M, net of contin- gencies) which are to be purchased by departmental staff in accordance with their own preference. The concerned agencies would provide loans to staff for the purchase of bicycle and motorcycles, following procedures satisfactory to IDA. Small off-the-shelf items costing less than US$10,000, which cannot be purchased in packages suitable for international tendering and items needed urgently for expeditious project implementation together with certain specific items requiring standardization (such as laboratory equipment) would be procured through prudent shopping. Non-ICB purchases would be limited to an aggregate of US$1.2 M. 4.05 Buildings. Most buildings (base cost US$5.4 M) would be unsuitable for ICB because they would be small, low cost and scattered throughout the rural areas of the entire country, and, as such, would cost more if grouped into large contracts. Accordingly, construction of buildings would be awarded to local contractors through local competitive bidding to be executed at the District level by the Civil Engineering Unit of DA, following GOSL procedures acceptable to IDA. The supervision capacity of the Unit would be adequately strengthened (para 3.27 and 3.28). DA would obtain allocations from Government for cement, steel products, lumber and roofing material and will then use these allocations to facilitate procurement of construction material from regional or District level go-downs (of the Building Material Corporation, Cement Corporation, Timber Corporation and Steel Corporation) by local contractors. 4.06 Overseas Training and Technical Assistance. Overseas training of project staff (base cost US$355,000) would be conducted according to plans prepared by DA and concurred with IDA. Hiring of consultants for assistance in project implementation and overseas training (base cost US$1.3 M) would be in accordance with IDA guidelines (para 3.34). Disbursements 4.07 Disbursements would be made for: 1/ (a) 100% of cif cost of equipment, vehicles and spares procured through ICB; (b) 100% of ex-factory cost or 65% of local cost of equipment, vehicles and spares procured through non-ICB procedures; (c) 100% of the cost of technical assistance and overseas training; 1/ All costs listed in this paragraph include base costs plus price con- tingencies.  - 28 - (d) 65% of the cost of building construction, including con- struction material; and (e) 65% of costs of salaries and allowances of incremental staff. Disbursement for item (e) would be made against Government statement of expenditures, the documentation for which would be audited and retained for review by IDA supervision missions. All other disbursements would be made against full documentation. The Project Director, the Director of DA, would be responsible for submitting applications for IDA reimbursement. 4.08 It is expected that disbursement would be completed by March 31, 1985, about six months after the end of project implementation. The semi- annual schedule of disbursements is estimated to be as follows: 1979/80 1980/81 1981/82 1982/83 1983/84 1984/85 IDA Fiscal Year and Semester 1 2 1 2 1 2 1 2 1 2 1 2 Cumulative Disbursements 0 .7 2.1 4.5 6.1 7.8 9.5 11.0 12.6 14.0 15.5 15.5 (us$ M) Any funds remaining in the credit account, after the end of project imple- mentation, would be cancelled unless, subject to IDA's concurrence, suitable project related expenditures can be identified. Accounts and Audits 4.09 Assurances have been obtained from GOSL that agencies involved in disbursing project funds (DA, DAPH, CCB) would prepare and maintain separate accounts for the project in accordance with sound accounting practices; that such accounts, together with disbursement documents, would be audited annually by independent auditors acceptable to IDA, that the Project Director would consolidate the accounts from the various agencies and submit to IDA certified copies of the audited accounts together with the auditor's reports within six months of the end of each fiscal year; and that the audit report would include, inter alia, a statement verifying that funds disbursed by IDA against state- ments of expenditures had been used for the purpose for which they were provided. Cost Impact on the Budget and Society 4.10 The capital cost of the project, excluding all operating costs but including contingencies, would amount to about US$16.1 M, about US$10 per farm family and US$3.5 per ac of cultivated land (excluding tea and rubber land). Incremental annual operating costs at full development would amount to US$1.6 M, US$1 per farm family or less than US$0.5 per acre. The capital cost, which would be spread over five years would amount to about 85% of DAs capital budget before project implementation. Incremental operating costs at full development would amount to about 30% of DA's current annual operat- ing budget.  - 29 - V. PROJECT IMPLEMENTATION AND OPERATION Project Implementation and Coordinat:ion 5.01 The Department of Agriculture (DA) of the Ministry of Agricultural Development and Research (MADR) would be the project implementing agency. A Ministry level Project Coordination Committee would be formed under the chairmanship of the Secretary of MADR to coordinate policy matters with GOSL and to ensure interministerial coordination and support of the unified T&V extension system. Membership of the Committee, in addition to MADR senior officers, would include senior representatives from the following Ministries: (a) Ministry of Rural Industrial Development -- the directly concerned agency under the Ministry is the Department of Animal Production and Health (DAPH) and the Livestock Development Board (NLDB) (paras 3.04, 3.07, 3.09 and 3.33). (b) Ministry of Coconut Industries--Coconut Cultivation Board (CCB) (para 3.04, 3.07, 3.09 and 3.33). (c) Ministry of Mahaweli Development--Mahaweli Development Authority (para 3.04). (d) Ministry of Land and Land Development--Department of Irrigation (DI) and Department of Land Commissioner (DLC) (para 3.04). (e) Ministry of Finance and Planning. (f) Ministry of Plan Implementation. Appointment of the Project Coordination Committee would be a con- dition for credit effectiveness. 5.02 The Director of DA would be the Project Director. Project activities relating to extension, adaptive research, training, economics and civil engi- neering would be under the charge of Deputy Directors for extension, research and training, the Chief Economist and Superintending Engineer of DA, each supported by their staff. An organization Chart of DA is given in Chart 1. A special Project Unit would be established in DA under the Chairmanship of the Director in order to monitor the project implementation and manage the project account. DAPH, NLDB, CCB, DI, DLC and the Mahaweli Development Authority would each appoint a Senior Officer who would be responsible for liason with DA on project matters under their jurisdiction. Director of DA would call meetings of other agencies when needs arise, or at the request of other agencies.  - 30 - 5.03 Close dialogue among officers engaged in research, adaptive re- search, extension and training would be fostered by the establishment of Regional Technical Working Groups headed by Directors of RRCs. DAEOs in the region, Director of RTCs, economists attached to RRCs, their respective senior technical staff concerned and senior subject matter specialists of livestock and coconut in the region would meet at least twice a year and as often as necessary to discuss such matters within AER as: (a) Farmers' responses to adaptive research and demonstration plots. (b) Results of adaptive research and field demonstrations of the season just ending and plans for the next season. (c) Priority crops and animals and priority extension messages for the next season. (d) Upgrading of extension and training materials. 5.04 At the District level, the DAEO would be responsible for formula- ting the extension program for each season in his District and supervising the program implementation through AOs, SMOs, AIs and KVSs serving under him. He would report to the Deputy Director for Extension of DA. He would be responsible also for coordinating (a) with livestock and coconut officers, who report to their own Departments, for providing training to KVSs and AIs (para 3.07), and with ADA and DAS officers on supply of inputs in the District. Director of DTC, Economic Assistant, and Civil Engineering Inspector and Overseers stationed in the District would report to Deputy Director for Train- ing, Chief Economist and Superintending Engineer of DA respectively, but DAEO would maintain close lateral administrative coordinations among officers of different branches of DA. No project committee is deemed necessary, because activities for extension, training, research and economics are quite self- contained. Technical dialogue would be achieved by the Regional Technical Working Group (para 5.03) while routine inter-Divisional liason can be main- tained within DA's own administrative hiearchy. 5.05 The DAEO would submit copies of his seasonal (maha and yala) plans of project activities to the District Minister and Secretary for review, and would follow-up with periodic progress reports. He would also provide the material to the District level officers of other agencies participating in the project. A project organization chart is given in Chart 2. Implementation Schedule 5.06 It would take five years to complete the project (Chart 3). The implementation of most components would be spread over 4-5 years. Exceptions would be: (a) recruitment of additional civil engineering staff of DA, (b) procurement of four-wheel vehicles and equipment, and (c) employment of project consultants, all of which would be concentrated in the first two years.  - 31 - The T&V extension system is scheduled to cover all Divisions of the country over a four year period. Existing IDA project areas would be given priority in phasing. Monitoring and Evaluation 5.07 Monitoring of the project's progress would be through quarterly and annual reports by all participating agencies and by field units of DA. The format of these reports would be agreed between MADR, DA and IDA. These periodic progress reports would be submitted by the Project Director to the Project Coordination Committee, other Government agencies concerned, and IDA. 5.08 The evaluation of the project impact would be conducted on a con- tinuous basis through the seasonal collection and analysis of farm record sheets from a sample of about 5,000 farmers (para 3.25 (b)). This work would be done by the Agricultural Economic Unit of DA. The Unit would submit annual reports to the Project Director for transmittal to the Project Coordinating Committee, other concerned Government agencies and IDA. A plan for this evaluation work would be agreed between DA and IDA. operation and Maintenance 5.09 The operation of the T&V system of extension as well as the adaptive research and other project activities would continue after project completion. The DA would continue to be the agency responsible for the work and incre- mental staff appointed under the project would continue to be employed to perform their respective work. 5.10 Operation and maintenance of project constructed buildings would be carried out by the Civil Engineering Unit of DA. Project procured four wheel vehicles and farm machinery would be maintained by the Mechanical Engineering Unit of DA; research and audio-visual aid equipment, by the Equipment Repair Workshop of the Central Rice Research Station. Motorcycles and bicycles sold to project field staff would be maintained by private work- shops. Funds for operation and maintenance expenditures after the project completion, would be financed through annual budgetary appropriation by GOSL to DA. Assurances have been obtained from GOSL that after the project comple- tion, it would provide adequate funds to DA for the satisfactory operation of the extension services, adaptive research and other project activities, continuous employment of the project staff and for the satisfactory operation and maintenance of all necessary equipment, vehicles and buildings through the annual budget appropriation. Building Construction Capacity of DA 5.11 The Civil Engineering Unit of DA is one of two branches under a Deputy Director (Engineering), the other branch being for Agricultural Engi- neering. The Unit is headed by a Superintending Engineer and has a head- quarters staff of four Engineers (graduates), six Engineers' Assistants (diploma), and five draftsmen, and a field staff of 19 inspectors (Technical  - 32 - School Certificate) and 50 overseers. The Department's current building program is worth about Rs 7 million (US$450,000) a year, about half by force account and the balance by contracting out to local private contractors. Under the project, the Civil Engineering Unit will be adequately strengthened to handle an annual building construction program about three times that of DA's current program (paras 3.27 and 3.29). 5.12 Because of sharply increased demand from the accelerated Mahaweli Ganga development projects, increased externally assisted projects and lively private construction as a result of the liberalized economic policy, Sri Lanka is experiencing a shortage of building material of all kinds. The quantity of building material required by the project will only be a small fraction of the total need in the country. However, project construction would involve a large number of widely scattered small buildings and it is not possible to have centralized procurement of building material. Small contractors would experience difficulty in obtaining supplies unless they paid exhorbitant prices. However, GOSL has agreed to facilitate the supply of building material for this project (para 4.05). DA's Financial Management 5.13 Under the present financial management system of DA, the DAEOs and officers in charge of research and training centers are given a petty cash advance of Rs 500, renewable on request. Within the same amount, any single expenditure item of more than Rs 100 requires prior approval of DA. The above limitations are deemed overly restrictive for expeditious implementation of the project. Assurances has been obtained from GOSL that the financial man- agement system of DA would be decentralized and DAEOs and the heads of research and training institutions would be authorized to disburse against expenditures within limits of an approved budget, and that the new system would become effective before December 31, 1979. VI. PRODUCTION AND MARKETING Production 6.01 Paddy yield and production in Sri Lanka recorded significant in- creases during the 1960s, but took a down turn in early 1970s (para 2.04), despite the increased use of fertilizers (para 2.25). During the 1970s, how- ever, work on identifying production constraints in different AERs (Annex 1, para 10-18) and development of new rice HYVs with different growth duration and other field crops have made substantial progress. Under the project, the new knowledge and varieties would be used to good advantage in an effort to increase yields and to reduce crop exposure to risks and failures (para 3.09 (a)). It would be reasonable to expect, as a consequence of the project, that production of paddy and other crops would increase substantially over the "without project" conditions.  - 33 - Marketing 6.02 Government purchases paddy through the Paddy Marketing Board which has the paddy milled and rice distributed under the Government's ration system. About 31% of the paddy crop was purchased by the Board in 1977. The Ministry of Trade and the Cooperative Mtarketing Federation market about 25% of the fruits and vegetables produced in the country and the Coconut Marketing Authority helps market coconuts by operating copra auction floors and by the regulation and licensing of traders (para 2.33 to 2.35). Despite these Governmental activities, most of the marketing of food products is handled by the private trade, and with the liberalization of economic policy under the new Government, private marketing activities are expected to expand according- ly. Since Sri Lanka imports significant quantities of food, the increased domestic output would substitute for imported food and would be marketed through some of the facilities currently used to distribute imported food. The existing marketing facilities for copra are adequate to market the increase in coconut production expected in the future. There are also ample local facilities to handle the larger production of livestock products expected from the project. In short, marketing does not appear to be a constraint on the effectiveness of the project. Farmer Incentives 6.03 Prices for paddy have recently been strengthened by increasing the Guaranteed Purchase Price from Rs 33/bushel to Rs 40, by the purchase of rice by the Food Department through open market tender and by raising the price for imported flour through gradual removal of the subsidy on flour. These measures raised market prices for paddy about 20% in 1978 to about Rs 44/ bushel. The profitability for minor food crops, such as onions, chillies, potatoes and other fresh vegetables has been quite good in recent years and prices for fresh coconuts were recently increased by 30%. Seasonal credit was readily available to farmers in 1977/78, but poor collections may cause some tightening of credit for farmers in 1978/79. Prices for fertilizer were increased in 1978 because of a decline in the subsidy from 75 to 50%. For example, the price of NPK increased by more than 55% to about Rs 1,650/metric ton. This price compares with the market price for paddy of about Rs 2,156/ metric ton--a ratio of paddy to fertilizer of 1.3:1. Higher prices for inputs and the tightening of the supply of seasonal credit may cause some reluctance on the part of farmers to increase the use of inputs. However, prices for commodities are at the moment, high enough to provide incentives to many farmers, especially those with small holdings, who can increase output by the adoption of the labor intensive packages which will be promoted under this project (para 3.09 and 3.10). In the long run, a rational agricultural pricing policy would be essential. The proposed work of the DA's Economics Unit under the project would produce information necessary for the imple- mentation of such a policy.  - 34 - VII. BENEFITS AND JUSTIFICATION Economic Justification 7.01 Attributing a precise level of benefits to this type of project is difficult since it is impossible to determine what proportion of the benefits expected from improved agricultural practices are due to extension alone and what are due to past research efforts or additional purchased inputs. In practice, it is often the combination of all these, with extension playing a catalytic role, that brings the desired benefits. However, since the project relies primarily on reorganization and strengthening of an existing extension structure and on more intensive use of proven research results, the incremental cost per hectare and per farm family of the project is very low (para 4.10). Hence, even very small and slow production increases generate a high rate of return. For example, this project would generate a rate of return of more than 50% if by 1985 yields are 1.5% higher than they would have been without the project. Such an increase would imply an increase in yield per acre for paddy of only 1 bushel (45 lbs) per acre, for corn of 0.15 bushels (8.6 lbs), for sweet potatoes of 0.52 cwt (58 lbs) and for cowpeas of only 0.10 bushels (6.3 lbs). Where the T&V extension system has been effectively applied for a few years in India, yield increases have far exceeded these levels. Moreover, the practices initially stressed by the extension service usually focus on improved cultural practices (para 3.09) which usually involve better use of labor but little cash outlay. They are, thus, particularly well suited to the needs of the small cultivator. Social Benefits 7.02 In the past, agricultural development strategy has been aimed at achieving production increases mainly through investment in irrigation, land reclamation/settlement and through recommendations for the use of "optimal" packages of practices, involving improved varieties with substantial doses of fertilizer, pesticides and herbicides. These improvements were frequently financed by credit, often not available to small farmers. The extension service under the project would focus first on improved cultural practices and farm management combined with low cost inputs; this would primarily involve more labor--an asset most small farmers have in abundance. It thus provides an opportunity for small and marginal farmers to enjoy the benefits of increased productivity. Aside from generating high economic benefits at low costs, in general, the project would, therefore, also have a considerable beneficial impact on the lot of small and marginal farmers. Project Risk 7.03 The transfer of multipurpose field workers and the establishment of a single, unified, professional extension service marks a major departure from past practice in Sri Lanka. The fact that such a significant reform will be undertaken in the entire country reflects a strong commitment to developing an extension system capable of serving all farmers well. Never- theless, because of pressure from interested parties, it is sometimes difficult  - 35 - for governments to maintain such decisions. The main risk, therefore, is that the Government will find it difficult to maintain a single line of command from extension headquarters to full time KVSs who work exclusively on agricultural extension. To reduce these risks, substantial efforts were made during project preparation and appraisal to ensure full understanding of the importance of this commitment. GOSL has agreed that extension officers will spend full time on extension education work and that responsible DA officials, including the DAEOs, will control the transfer of extension officers (para 3.04). 7.04 Experience in other countries has shown other risks to be minimal. Farmer responsiveness to recommendations has been generally excellent wherever visits are made systematically. The ability of extension services to develop and disseminate recommendations leading to yield increases well above the 1.5% needed for a 50% rate of return has also been demonstrated. Initially, technology has not been a major constraint, as there is a backlog of research findings as yet not widely adopted. Just bringing the production of the average farmer up to that of the best brings major yield increases. To reduce the risk of technological constraints which could lower anticipated project benefits, the project supports a program of adaptive research and improved training. VIII. AGREEMENT REACHED AND RECOMMENDATIONS 8.01 Agreements on the following points have been reached with GOSL: (a) Extension officers (AO, SMO, AI and KVS) in all districts would attend full time to extension education work, and their training and visit schedules would not be interferred with at any time. These officers would not be transferred out or replaced by new men except for unsatisfactory performance of their scheduled duties and at the discretion of respon- sible officials of DA including DAEOs (para 3.04). (b) Ministry of Rural Industrial Development and Ministry of Coconut Industry would designate their District level officers to serve as subject matter officers on animal husbandry and coconut cultivation for training the village and range level extension officers of DA who would pass on extension messages to farmers (para 3.04). (c) Ministry of Mahaweli Developoment and Ministry of Land and Land Development would entrust extension work in Mahaweli Ganga development projects, irrigation projects and special project areas to DA (para 3.04). (d) GOSL would assure timely supply of building material for the project according to the need and an agreed timetable (para 3.27).  - 36 - (e) DA would submit a plan for strengthening its building construction capability satisfactory to IDA before December 31, 1979, and would implement the agreed plan accordingly (para 3.28); (f) Consultants would be appointed before January 31, 1980 according to terms and conditions satisfactory to IDA (para 3.34). (g) Agencies involved in disbursing project funds (DA, DAPH, CCB) would prepare and maintain separate accounts for the project in accordance with sound accounting practices. Such accounts, together with disbursement documents, would be audited annually by independent auditors acceptable to IDA. The Project Director would consolidate the accounts from the various agencies and submit to IDA certified copies of the audited accounts together with the auditor's reports within six months of the end of each fiscal year. The audit report would include, inter alia, a statement verifying that funds disbursed by IDA against statements of expenditures had been used for the purpose for which they were provided (para 4.09). (h) After the project completion, GOSL would provide adequate funds to DA for the continued satisfactory operation of the extension services, adaptive research and other project activities, continuous employment of the project staff and for the satisfactory operation and maintenance of all neces- sary equipment, vehicles and buildings through the annual budget appropriation (para 5.10). (i) The present financial management of DA would be decentralized and DAEOS and officers in charge of research and training institutions would be authorized to disburse against expen- ditures within limits of approved budgets, and that the new system would become effective before December 31, 1979 (para 5.13). 8.02 A condition for credit effectiveness would be the appointment of Project Coordination Committee (para 5.01). 8.03 With the above assurances and conditions, the proposed project would be suitable for an IDA credit of US$15.5 M on standard IDA terms. The Borrower would be the Democratic Republic of Sri Lanka. May 17, 1979  ANNEX 1 PEage 1 SRI LANKA AGRICULTURAL EXTENSION AND ADAPTIVE RESEARCH PROJECT Production Constraints on Agricultural Production and Available Research Information for Extension in Sri Lanka A. Physical Environment 1. Sri Lanka's 16.2 M ac of land is divided into three climatic zones: a wet zone of 3.8 M ac in the southwest quadrant, a dry zone of 10.3 M ac comprising the bulk of the island in the northeast, north, west and south- east, and an intermediate zone of 2.1 M ac sandwiched in between the two. Land Form 2. The three climatic zones are subdivided into seven major agro- ecological zones by altitude and land form. Both the wet and intermediate zones range from "low-country" (0-1,000 ft above MSL), "mid-country" (1,000- 3,000 ft) to "up-country" (3,000 ft-8,000 ft). The big dry zone has only the low-country. The land form of low-country varies from flat to undulating, while the mid- and up-country vary from undulating, rolling, hilly, steeply dissected to mountainous (Map 14076). Rainfall 3. Mean annual rainfall varies from 90 inches to 200 inches in the wet zone, 60 inches to 90 inches in the intermediate zone and 35 inches to 60 inches in the dry zone. Rainfall generally increases from low-country towards up-country, and from coastal areas towards the heart land. The northern tip of the island and southeast coastal area have the lowest rain- fall. Rainfall over the island follows a bimodual pattern under the influ- ence of the NE (October to January) and SW (May to September) monsoons. The pattern is most distinct in the dry zone, and becomes increasingly less dis- tinct towards the intermediate zone and the wet zone low-country. In the wet zone mid- and up-country, the bimodual pattern is blurred by heavy inter- monsoon cyclonic rains. 4. What is important to agriculture is the sufficiency and reliability of rainfall. The 75% annual rainfall expectancy value of the wet zone varies from 125 inches to 55 inches, the intermediate zone, 85 inches to 35 inches, and the dry zone, only 35 inches to 20 inches. A 75% expectancy of dry spells occur only in late January through early March in the Wet Zone, June through September throughout the intermediate zone (also February through June in low-country) and January through September throughout the dry zone (Map 37  ANNEX 1 Page 2 14076). Thus, the wet zone has a year round sufficiency of moisture; instead, drainage and floods are constraints to crops grown on low land. The high frequency of dry spells is the major constraint for agriculture in the dry zone and intermediate zone low-country. Temperature 5. A 30 year average (1931-60) of maximum and minimum air temperatures varies from 68 F and 510F at wet zone up-country stations to 89 F and 770F in lowland dry zone stations. Temperature is not a limiting factor for crop production, except at high altitude where farmers avoid growing certain annual field crops due to risk of frost damage during the coldest months. Soils 6. Map 14077 shows 17 great soil groups and sub-groups. At a glance, the center area consists of major soil groups each forming large contiguous units while, the coastal area consists of a complex of minor soil groups. The distribution of the more important soil groups are summarized below. Their implication on land use and management problems are discussed in paras 10 through 18 in connection with research and extension. 7. Dry Zone Soils. The predominant soil group in both the north and south dry zones is the Red Brown Earth. This one soil group, in association with Low Humic Gley Soils (on valley depressions) occupies about 5.00 M ac 1/ or about 30% of Sri Lanka's total land area. The lion's share of the Mahaweli Ganga development project and all of the Tank Irrigation Modernization Project areas have such an association of soil groups. The second important soil group in the dry zone is the Alluvial Soils which exist in all Dry Zone Districts in the form of scattered flood plains and riverine lands of differ- ent sizes, with a total area of about 1.0 M ac. The third major group is the Red and Yellow Latosols with a total area of about 0.75 M ac. This group dominates in NW and NE Coast Areas and the Jaffna Peninsula. The East Coast between Trincomalee and Amparai is dominated by the Non-Calic Brown Soils (about 0.45 M ac) and the alluvial soils mentioned above. Other soil groups along the coasts of the Dry Zone include sandy regosols (elevated beech plains, sand bars), alkaline and saline soils, and some black clay soils, with a total of about 1.00 M ac. 8. Wet Zone Soils. The dominant soil group in the Wet Zone is the Red Yellow Podzolic Soils. It covers a total of about 3.50 M ac in the heartland of the Wet Zone where tea, rubber and coconut plantations are concentrated. It also covers a substantial part of the better drained paddy fields and lush home gardens of the Wet Zone. Along the SW Coast, there are Bog and Half Bog Soils, and sandy regosols, totalling about 0.25 M ac. 1/ Areas of different soil groups given in para 7 through 9 are not precise. They are quoted to give an order of magnitude. 38  ANNEX 1 Page 3 9. Intermediate Zone Soils. The Kurunegala District typifies the transition of the Dry Zone and Wet Zone soils. Its northern part belongs to the dry zone and has the typical Red Brown Earth and Low Humic Gley Soils association. The middle part of Kurunegala is typified by Red Brown Earth on the rounded top and upper slopes of the undulating topography, Non-Calcic Brown Soils on middle slope, and Low Humic Gley Soils in the valley bottoms, totalling about 0.4 M ac, while the southern part is domi- nated by the Red Yellow Podzolic Soils, typical of the Wet Zone, in asso- ciation with Low Humic Gley Soils in valley bottoms, totalling about 0.40 M ac. To the immediate southwest of Kurunegala (parts of Matale and Kandy districts) is a solid block of Reddish Brown Latosolic Soils in association with Immature Brown Soils, totalling about 0.30 M ac. Circling around the NE, E and SE boundaries of the Wet Zone, and neatly separating solid blocks of Red Brown Earth of the Dry Zone and Red Yellow Podzolic Soils of the Wet Zone is a contiguous winding belt of Red Brown Earth in association with Immature Brown Loams, the former on gentler slope and the latter on steeper slopes, totalling about 0.75 M ac. B. Regional Research Centers (RRC) and Major Crop Management Problems in Their Respective Regions Distribution of RRCs and Special Stations 10. The distribution of RRCs and other important stations of DA is shown in Map 14078. The agro-ecological regions these stations serve are given as follows: RRC and Special Stations Districts AER Served (Map 14076) Existing RRC Maha-Illuppallama Anuradhapura DLI North. Angunakalapellessa Hambantola DLU South, DL5. Gannoruwa Kandy WM, WM2, WM3. Bombuwela Kalutara WLI, WL2, WL3, WL4. Bandaraweda Badulla IUI, IU2, IU3. New RRC (to be established) Karadiyan Aru Batticaloa DL2. Parahthan Jaffna DL3, DL4 far North. Katugampola Kurunegala ILl, IL2, IL3. Central Rice Res. Station Kurunegala Rice Research countrywide. Sita Eliya Nuwewa Eliya Root, tuber crops and vege- table research, WUl, WU2, WU3. Minor Exportable Crop Kandy Research on Minor Exportable Research Institute Crops. 39  ANNEX 1 Page 4 C. Present Land Use and Major Crop Management Problems in Different Regions 11. Maha-Illuppallama Regional Research Centers (MI-RRC): (a) Agro-Ecological Region - Dry zone, low-country, North (DLl). (b) Major soil groups present - Red Brown Earth on mounds and slopes of an undulating topography and Low Humic Gley soils in valleys. (c) Present land use -- in simplified terms, the rural scene of this region may be visualized as a vast expanse of natural monsoon forest opened up over many centuries at many places for settlement in colonies where irrigation tanks have been built. In tank command areas, the Low Humic Gley soils are planted entirely to rice in both maha and, in smaller acreage, yala seasons; the Red Brown Earth adjoining the Low Humic Gley Soils are planted also to rice and some other field crops in the maha season. Significant irrigated sugarcane development of the Kantalai plantation is mainly on Red Brown Earth. Outside the tank command areas, rainfed rice is grown on Low Humic Gley soils, while rainfed coarse grains, grain legumes and sugarcane for making brown sugar are grown on Red Brown soils on very gentle slopes. Slash and burn (chena) cultivation of rainfed coarse grains, grain legumes, chillies, oil seeds, etc., is widely practiced in the forest land and low yielding home gardens are grown on housing plots of settlers' homestead, both mainly on Red Brown Earth. (d) Major crop management problems include a: (i) Need for improving on-farm water management prac- tices for fuller use of rain and economical use of tank water on maha rice, so that higher yields of maha rice can be obtained and larger areas of yala rice planted. Sophisticated practices to this end are being introduced under the Tank Irrigation Modernization Project (Project Cr. 666-CE), while less sophisticated practices are to be promoted in this northern part of the Kurunegala District under the Kurunegala Rural Development Project (Cr. 891-CE). (ii) Need for coordinated use of available tractor and animal power for early completion of land prepara- tion on Red Brown Soils. A Farm Power Study is being conducted by a UNDP Umbrella project. 40  ANNEX 1 Page 5 (iii) Need for providing adequate drainage to rice fields on Low Humic Gley Soils (Included under Cr. 666). (iv) Need for weed control and prevention of soil surface sealing in early growth stages of crops grown on Red Brown Earth. (v) Need for land selection for growing rice, coarse grains, grain legumes, oil seeds and other field crops, and use of drought tolerant varieties for all crops on Red Brown Earth. (vi) Need for judicious use of varieties with different growth durations for growing rice on upper and lower terraces and valley bottoms. (vii) Need for stabilizing or prolonging the land use period of chena cultivation (study will be included in a CIDA 1/ assisted Dryland Farming Research Project starting October 1978). 11. Kardiyan Aru RRC (a) Agro-Ecological Regions - Dry Zone Low Country East (DL2). (b) Main Soil Groups Present - Red Brown Earth, Noncalcic Brown Soils, Low Humic Gley Soils, Alluvial Soils. The Low Humic Gley soils occur in association with either the Red Brown Earth or Noncalcic Brown Soils in same manner as described in para 10 (b). The Alluvial soils occur along rivers draining into the Indian Ocean on the east coast, forming large tracts along and between the two pronged river mouth of the Mahaweli Ganga and also along and between rivers which drain the large lakes in the National Wildlife Sanctuary of the Ampari District. (c) Present Land Use -- The land use pattern of the Red Brown Earth/Low Humic Gley Association is the same as described in para 10. The Noncalcic Brown Soils have a similar land use pattern as, but a significantly lower productivity than the Red Brown Earth, because of its poorer natural fertil- ity and higher droughtiness and erodibility. The Gal-Oya Sugar Plantation is largely on noncalcic brown soils. The alluvial soils are flood prone. Where soil texture is suf- ficiently heavy or where irrigation is available, they are being used for growing paddy. On light texture soils, some vegetables and tobacco are being grown. Seasonally flooded sandy beaches provide natural grassland for pasturing. 1/ International Development Agency of Canada. 41  ANNEX 1 Page 6 (d) Major Crop Management problems: (i) Red Brown Earth and Low Humid Gley Soils same as para 10 (d). (ii) Noncalcic Brown Soils - is more friable and therefore easier to plow than the Red Brown Earth. Problems mentioned in para 10 (d) (iv) through (vii) apply to this soil group. It requires higher rate and more split applications of fertilizers than the Red Brown Earth to achieve satisfactory crop yields because of its low natural fertility and sandier texture. Pro- longing chena cultivation on these soils is more difficult than on Red Brown Earth. (iii) Alluvial Soils - The main problem is flood prevention, and the need for land selection for cultivation of different crops, because of the wide variation in soil texture (from sandy to clayey) and drainage (good to very poor). 12. Paranthan RRC (a) Agro-Ecological Regions -- Dry Zone far North, (DL3, DL4). (b) Major Soil Groups Present - Red Yellow Latosols, Calcic Red Yellow Latosols, Alluvial Soils, Alkaline and Saline Soils, Sandy regosols (beaches and dunes). The main body of the Red Yellow Latosols, interspersed by alluvial soils, form a semi- circle at the base of the Jaffna Peninsula, while the calcic Red Yellow Latosols and other minor soil groups are prevalent on the peninsula itself. Joining these two areas is a long corridor dominated by Sandy Regosols on recent beach and sand dunes. (c) Present Land Use -- Red Latosols occur on mounds and slopes of gently undulating land and have excessive permeability while the Yellow Latosols are in the shallow depressions and are imperfectly to poorly drained. Both are very deep soils. Because of the rapid water infiltration rate of the Red Latosols, tanks could not be constructed. There is, there- fore, a conspicuous lack of organized settlements on these soils. The present land use is mainly chena cultivation, except for fairly extensive rainfed "Manawari rice" 1/ on alluvial soils, and small patches of chillies, onions and groundnuts where irrigation is available. On the other hand, the Calacic Red Yellow Latosols in the Jaffna Peninsula, where the groundwater is close to surface, supports highly intensive cultivation of paddy, chillies, onions, tobacco and commer- cially grown vegetables by lift irrigation. Palms and 42  ANNEX 1 Page 7 cashews are grown successfully without irrigation. The alkaline and saline soils are largely barren except for some paddy cultivation on saline soils during the maha season. The Sandy Regosols are occupied by coconut, cashews, scrub trees and natural coarse grasses. (d) Major Crop Management Problems: (i) Red Yellow Latosols -- These soils are presently under- utilized. Research being conducted for intensive cropping on Calcic Red Yellow Latosols, however, would be applicable when Mahaweli Phase III reaches these soils, or a deep tubewell project becomes feasible. Some groundwater surveying has been done by the Irri- gation Department. At present, "manawari" rice land needs drought tolerant varieties. (ii) Calcic Red Yellow Latosols -- These soils are already being intensively cultivated with high value commercial crops. Remaining problems are mainly agronomical, such as further improvement of crop varieties, economic use of fertilizers, pesticides and irrigation water, and use of better seeds. (iii) Alkaline and Saline Soils -- Not much can be done for these soils until reclamation projects become feasible. For the time being, selection and extension of salt tolerant HYV's for existing maha rice fields would be helpful. (iv) Sandy Regosols -- Not much further improvement can be done for these soils at the present level of technology, except advising split application of fertilizers on tree crops being grown. 13. Angunakolapellessa RRC (a) Agro-Ecological Regions -- Dry Zone South, DL1 and DL5. DL5 has the lowest rainfall and rainfall reliability in the entire country. (b) Main Soil Groups Present -- Red Brown Earth/Low Humic Gley soils association predominant, alluvial soils in finger strips along small rivers entering ocean, alkaline/saline soils and Sandy Regosal (beaches and dunes) along the southeast coast. (c) Present Land Use -- of DLl South is similar to DLI North, but with more sugarcane for brown sugar and cotton. The A'pelessa- RRC was established originally for cotton research under an ADB assisted Uda Walawe Project managed by the River Valley 43  ANNEX 1 Page 8 Development Board, but was later transferred to DA. The land use of alluvial soils is similar to those given under para 11 (c). Sandy beaches and dunes are mainly covered by natural coarse grasses for goat grazing. (d) Major Crop Management Problems -- Problems faced by the A'pellessa-RRC are similar to those of the Maha-Illuppallama- RRC, but with greater emphasis on cotton, and more severe drought hazards and saline and alkaline soil problems in D 5 coastal areas. 14. Gannoruwa RRC (a) Agro-Ecological Regions -- Wet Zone mid country, WM1, WM2, WM3. (b) Major Soil Groups Present -- Red Brown Latosolic soils and Immature Brown Soils in the north (WM3) and Red Yellow Podzolic soils in the south (WM1 and 2). (c) Present Land Use: (i) Red Brown Latosolic Soils -- On slope land, tea, rubber, coconut, mixed home gardens; on level and very gently sloping land, vegetables and fruits, coconut, cocoa, coffee, pepper, etc. and in valleys and terraced slopes, rice. (ii) Immature Brown Soils -- Where soils are deep, same as Red Brown Latosolic soils; where soils are shallow, vegetables, yams, etc., pasture in valleys and rice on terraced slopes. (iii) Red Yellow Podsolic Soils -- Tea, rubber, coconut, pepper, coffee, cocoa, fruits, vegetables, rice, pasture. (d) Field Crop Management Problems -- All above soils are well drained and productive. The region generally does not suffer from water shortage. The crop management problem faced by all three soil groups is extensive soil erosion caused by the prevailing steeply dissected hilly and rolling topography. The Red-Yellow Podzolic soils have additional problems of high acidity and localized minor element deficiency and needs liming for high yield of most crops except rubber. In ill-drained valley bottom rice soils, iron and/or aluminum toxicity pose localized problems. 15. Bombuwela RRC (a) Agro-Ecological Regions -- Wet zone lowland WL1, WL2, WL3, WL4. 44  ANNEX 1 Page 9 (b) Major Soil Groups Present: (i) WLI and WLZ - Red Yellow podzolic soils and variations. (ii) W.0 - Red Yellow Podzolic soils with laterites. (iii) WL4 - Bog and half bog soils and Red Yellow Podzolic soils with laterites. (c) Present Land Use: (i) Red Yellow Podzolic Soils -- Same as those described in para 14 (c) (3). (ii) Red Yellow Podzolic Soils with Laterites -- Mixed home gardens, coconut, rubber, rice, pineapple. (iii) Bog and Half Bog Soils -- Long duration traditional rice varieties, reeds for mat weaving and waste land. (d) Major Crop Management Problems: (i) Red Yellow Podzolic Soils -- Same as described in para 14 (d). (ii) Red Yellow Podzolic Soils with Laterites -- Shallow depth, presence of hard pan, low water-holding capacity inspite of moderate infiltration rate, strong acidity. (iii) Bog and half Bog Soil -- Strongly acidic when wet, flood prone, can be cultivated only by hand labor, prone to salt water intrusion, localized iron toxicity and minor element deficiency. 16. Bandarawela RRC (a) Agro-Ecological Regions -- Intermediate Zone up-country, IU1, IU2, IU3. (b) Major Soil Groups Present -- Red Yellow Podzolic Soils and Mountain Regosols. (c) Present Land Use -- Forest, tea and grassland on mountain slopes, temperate commercial vegetables, potatoes, temperate fruits, and some paddy in valleys. (d) Field Crop Management Problems: (i) Non-utilization of rice land for about three months from October to December because of the low temperature and wetness of soil. 45  ANNEX 1 Page 10 (ii) Under-utilization of rice land during the semi-dry months of June through August (only one rice crop a year January to May). Land with better moisture conditions, however, are planted to potatoes from June to September. (iii) Under-utilization of upland. Potato and vegetables are grown from November to January while the rest of the year is largely fallowed, because of the high intensity rain from March to April and dryness from June through August. (iv) Soil erosion hazard of cultivated slope land. (v) Failure for most "exotic" (meaning western type) vege- table varieties to flower and set seeds, and failure to produce sufficient virus free seed potatoes (cur- rent production meets only about 10% of the country's need). (vi) Diseases and insects for all commercial crops. (vii) Farmers in this region are already using a large amount of fertilizers and pesticides on vegetable and potatoes because of the high returns. They have a tendency to use an overdose of fertilizers and pesticides. The problem is to optimize the usage of cash inputs. 17. Katugampola RRC (a) Agro-Ecological Regions -- Intermediate Zone Low-Country, ILl and IL3. (b) Major Soil Groups Present. (i) ILl -- Red Yellow Podzolic soils with strongly mottled subsoils or with laterites, Low Humic Gley Soils, Latosols and Regosols on old red and yellow sands. (ii) IL3 -- Red Brown Earth, Noncalcic Brown soils, Low Humic Gley Soils. (c) Present Land Use. (i) Red Yellow Podzolic Soils with Strongly Mottled Subsoils -- Coconut, mixed home gardens, rubber, forest and chena cultivation. (ii) Red Yellow Podzolic Soils with Laterites -- Coconut, mixed home garden, rubber and pineapple. 46  ANNEX 1 Page 11 (iii) Low Humic Gley Soils -- Paddy. (iv) Latosols and Regosols -- Coconut and cinnamon. (v) Red Brown Earth and Noncalcic Brown Soils -- Coconut (thinning out), home gardens (less luxurious), and rain- fed sugarcane for brown sugar. Where irrigation is available, coarse grains and grain legumes are grown in the maha, while chillies, onions and groundnut are grown in the yala season. (d) Major Crop Management Problems (i) Red Yellow Podzolic Soils -- Same as para 14 (d). (ii) Low Humic Gley Soils -- Same as para 10 (d) (3). (iii) Latosols and Regosols -- Presence of impervious layers and perched water tables impairing root penetration of coconut and home garden trees. (iv) Red Brown Earth and Noncalic Brown Soils -- Same as para 10 (d) (1) (2) (4) and para 11 (d) (2). 18. Sita Eliya (Special Station for Vegetables and Potatoes) (a) Agro-Ecological Zone -- Wet zone up-country, WUl, WU2, WU3. (b) Major Soil Groups Present -- Red Yellow Podzolic soils with or without strongly mottled subsoils, Low Humic Gley Soils, and Mountain Regosols. (c) Present Land Use -- Tea, forest, natural grasses, cardamon, temperate vegetables fruits and potato. (d) Field Crop Management Problems: (i) Farmers do not plant annual crops in June and July because of the very heavy rain, strong wind and low temperature (down to 10-120C), nor do they plant annual crops during December and January because of possible frost damages. (ii) Other Problems -- Same as Bandarawela RRC. 47  ANNEX 1 Page 12 D. Availability of Research Information for Supporting the Extension Service 19. In summarizing the above, solutions to some of the basic constraints of different AERs caused by rainfall and soil characteristics as outlined in paras 10 through 18 cannot be obtained without the help of irrigation or drainage projects, improved farm power supply and research at a more sophis- ticated level. The current research program of the Department of Agriculture is mainly for evolving varieties and cultural practices adaptable to different agro-ecological conditions as they exist. A thorough review of agricultural research in Sri Lanka is beyond the perview of this report. In following paragraphs, the current status of research on rice and other field crops will be briefly reviewed with a limited purpose of identifying research results which might be available for putting into extension, field demonstration and adaptive research during the course of the next five years. General Status 20. There is an accumulation of rice research information in Sri Lanka which can be put to use immediately through a strengthened extension system. In recent years, research on other field crops has also been stepped up. There are now ten on-going National Coordinated Research Programs as follows: Crop-2/ 3/ 2/ Con- 5/ 1/ ping Coarse 3/ Grain Roots & Oilseeds di- Vege-4/ Soy- Station Rice System Grain Legume Tubers & Fibers ment tables Fruits Beans Batalogoda ** - - - - - - - - Gannoruwa * * - - ** - - * * ** Maha- Illuppallama * ** ** ** - ** * - - * Bandarawela * * * * * - ** * - - Angunakolape- lessa - * * * - * * * - * Bombuwela * * - - - - - - - Sita Eliya - - - * - - ** ** Thirunelvely - - * * * * * - - Aluttarama * - - - - - - - - Ambalantota * - - - - - - - - Parathan * * - - - - - - - Bentota * - - - - - - - - Mapalona * - - - - * * - - Labuduwa * - - - - - - - - Walpita - - - - * - - - * Karadianaru * - - - - - - - - * Participating station. ** Coordinating station. - Not participating. 1/ In cooperation with USAID/IRRI; 2/ With IDRC, and IPC on potatoes; 3/ With CIDA; 4/ vegetables cultivars from AVRDC, and 5/ With UNDP/UNICEF/CARE. 48  ANNEX 1 Page 13 Status of Rice Research 21. Rice HYVs have long been widely adopted by farmers in Sri Lanka. In the 1977 yala season, 417,000 ac were reportedly planted to new HYVs and 102,000 ac to old HYVs, totalling 519,000. In the 1977/78 maha season, 854,000 ac were planted to new HYVs and 318,000 ac to old HYVs totalling 1,172,000 ac. The above total HYV areas are about 76% of the total 1977 yala area (Annex 2, Table l(b)) and perhaps of an even higher percentage of the total 1977/78 maha area (not yet available). Even allowing for over-reporting of HYV areas, the data is sufficient to indicate that acceptance of rice HYV is no longer a problem in Sri Lanka. The following table reveals that tradi- tional rice varieties persist particularly on bog and half bog soils, saline and alkaline soils, and soils with phosphorous deficiency and/or iron toxicity, and the old HYVs (Taller than new HYVs) persist particularly on other types of rainfed low land and rainfed upland. 1/ % of Area Type of Paddy Land New HYV Old HYV Traditional Total Major Irrigation Schemes 82 18 0 100 Minor Irrigation Schemes 63 32 5 100 Rainfed Low Land Well drained soils 32 36 32 100 Imperfectly drained 74 15 11 100 P205 deficient & Iron toxicity 15 29 56 100 Iron toxicity 21 32 47 100 Bog and half bog, saline and alkaline 0 3 97 100 Low temperature 3 66 31 100 Manawari land 6 63 31 100 Mawee land 60 5 35 100 Rainfed upland 0 84 16 100 Source: Estimated from a chart by Central Rice Research Institute, Batalagoda. 22. In view of the above, the current coordinated Rice Research Pro- gram is aimed at: (a) breeding new HYVs adaptable to different AERs (includ- ing drought resistante for the dry zone, flood tolerance for wet zone low country, cold tolerance for mid- and up-country, and tolerance to problem soils and insect/disease resistance in all AERs. Detailed rice research objectives for different AERs are summarized in Table 1 of this Annex, (b) conducting cropping system studies for increasing cropping intensity on paddyland in conjunction with research on other field crops, particularly on the rainfed and partially irrigated paddyland in all three major climatic zones, and (c) conducting detailed survey, classification and mapping of 1/ Area of different type of land are given in Table 1 of this Annex. 49  ANNEX 1 Page 14 about 0.5 M ac of paddyland in the wet and intermediate zones where complex land forms require different varieties and cultural practices for lands on upper terraces, lower terraces and in valley bottoms in close proximity. The above work is being assisted by USAID/IRRI. International Development Research Council--Canada (IDRC) has completed in 1978 a two year assistance project on cropping system studies. 23. Some varieties which meet or partially meet the desired character- istics of different conditions (Table 3) are already available. During the next five years, new HYVs more suitable for the northern dry zone are expected to be increasingly made available by the Maha-Illupallama RRC and Thirunelvely Experiment Station, and those more suitable for the ill-drained soils and problem soils of the wet zone low country, by the Bombuwela RRC. These new HYVs could flow into adaptive research, demonstration and extension as soon as they are ready. From the cropping system study, recommendations on varieties and cultural practices for early planting of maha rice in order to utilize maha rain more efficiently could run the same course, and hopefully enter the extension stage towards later years of the project. Along with the extension of available information on basic cultural practices, the use of fertilizers and plant protection practices are expected to become more effective. Status of Research on Other Field Crops 24. Under the National Coordinated Research Programs, variety collection, preservation and breeding programs for different crop categories have been significantly strengthened, with assistance from cooperating external agencies (para 20). Improved varieties derived from selections made from local and introduced cultivars for different crops adaptable to different AERs may be expected to become available during the course of the project. Those from hybridization, mostly still in early generations, are not expected to yield significant impact during the project period. 25. Fertilizer and plant protection experiments for different crops have also been expanded. Some of these experiments may be expected to yield information useful to the project for higher value crops, i.e. potato, vege- tables, irrigated chillies and onions and other condiments, but generally are still constrained by a few research officers at each station having to cope with a large number of crops. 26. Along with improved varieties, on-going research on cultural practices are expected to yield extension messages useful to the early years of the project. These experiments are uncomplicated and can be handled quite well by young officers. Examples of this type of experiment may be cited as follows: (a) Time of planting in relation to yield and disease incidences and plant population in relation to yield and fertilizer application rates being conducted for a wide range of crops at many stations; 50  ANNEX 1 Page 15 (b) Irrigation frequency and method of irrigation for grain legumes, vegetables, chillies, onions, and potatoes and method of cutting seed potatoes (Thirunelvely, Jaffna); (c) Organic and inorganic manures for condiment crops and optimum time for harvesting potatoes (Banderawela RRC); and (d) Control of weeds in gingelly by cultural and agronomical methods (Maha-Illuppallama RRC).. The above type of experiments will yield extension messages which would help to increase crop yields without requiring additional cash inputs, and at the same time, they would enhance crop yield response when farmers do use fertil- izers. Information on basic cultural practices being used by farmers presently obtaining higher yields than others can also be used for extension to other farmers in early project years. 27. In summary, crop research in Sri Lanka is being carried out in a practical manner commensurate to the capability of the present research staff. It can be said quite categorically that availability of research information in Sri Lanka will not be a constraint to effective implementation of this project. E. Packages of Extension Messages 28. The messages to be conveyed by KVSs to farmers would be simple and concentrated on practices which could produce a quick and profitable response. Depending on the level of husbandry and financial capacity of farmers in different AERs, different technical packages would be recommended. The simplest packages would involve mainly improved cultural practices, but little or no additional cash inputs. Increasingly other packages would include cultural practices together with higher levels of fertilizers and pesticides. 29. Varieties. As a part of the initial extension package (Table 4, Package A), the research and extension staff would: (a) articulate the adapt- ation of existing rice HYVs with different growth periods (3 months, 3-1/2 months, 4-4-1/2 months) to different land forms (i.e. upper, mid and lower terraces and valley depressions) and prevailing rainfall patterns in different AERs, as well as in different parts of the same AER, to further the replacement of old HYVs and traditional varieties with new HYVs; (b) articulate type of land and soils most suitable for new varieties of other field crops, and (c) include such information in extension packages, and select suitable land for laying out adaptive research and demonstration plots. 30. Cultural Practices. Another important part of the initial exten- sion package would be the improved cultural practices which involve mainly increasing crop yield by more effective use of labor. Examples of such practices include the following: 51  ANNEX 1 Page 16 (a) Paddy and other field crops - Selection of land and soil; timing of land preparation and sowing; improved nurseries (i.e. paddy and chilli); spacing (plant population); depth of sowing or planting; weeding; soil moisture retention or on-farm drainage as needed; timing and placing of fertilizers; timing of irrigation if available; proper way of spraying; special handling in harvesting, threshing, drying and stor- age of seeds; selection of planting material from the proper part of the matured plants (manioc, sugarcane, pineapple), or the vine (sweet potato); proper methods of cutting seed potatoes, etc. Such information is already available in DA extension bulletins and leaflets, but has not been widely dessiminated to farmers. Under the project, they would be further specified for different AERs together with different varieties to be used, and incorporated into the training and extension material. (b) Coconut - Identification of senile trees which should be removed; proper nursery tree management and replanting after the removal of senile trees; identification of signs where soil conservation or drainage is needed; method of soil con- servation and laying out drainage system; proper methods of undercropping, with reference to (a) above; and proper sharing of fertilizers between coconut and undercrops; etc. 31. Extension packages involving increased use of fertilizers and agro- chemicals are illustrated in Table 2, Packages B and C. The application rates of these inputs and the expected crops yields given in Table 2 are only illus- trative, rather than actual recommendations, as for different types of land (irrigated or rainfed) and soils, the Regional Technical Working Group would work out their respective recommended input application levels for different packages for various crops (Main Report, para 5.03). Furthermore, future fluctuations in prices of crops, inputs, farm wages, costs for hiring tractors or draft animals would alter production costs, returns and benefit-cost ratios. Such changes and economic feasibility of recommended extension packages would be closely followed by the Economic Unit of DA (Main Report, para 3.25). 52  SRI LANKA ANNEX 1 Table 1 AGRICULTURAL EXTENSION AND ADAPTIVE RESEARCH PROJECT Page 1 Rice RrpeA4ng Objectives for the Respective Edaphic Regimes ] CDIIATIC ZONE EDIPI7IC ACREAGE AVG.YIELD RANGE: OF AGE CIA SS SPFCIAL P. .A I- AND SOIL R3MION RE3.IIE (APPROX.) LEVEL AID' MAIR YA1A CONSIDERATIONS IDUO-TYPB (1) ~~~(2) (3)' Du / AO (4 (5) (6), 7) L.Io Country 1. A,%Jor Dry Zono and irriSF- 4.00,000 >125 344 3-34 High post and Short or:ot type a'oui-dry timti high fortilisor Intormo(into dstcrosponiso t. zono~~~~~~~~~~~~~~~~~~~~~~~~~~eitm rna_ . . Alfiaolp 2. Minor la and 1b irrigp- 250,000 75 - jOO 3 -34 3 A&4ptbbln to Intornmodlto typo with tion Somi-irrigetod high fortilizor rnsponso oo>tiwng n'torato fortilisor UDgoarl,y at.agesof growth. 3. 4ainfod 3- n