India - West Bengal Agricultural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 5545 PROJECT PERFORMANCE AUDIT REPORT INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) March 18, 1985 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AED - Agricultural Engineering Directorate AIC - West Bengal Agro-Industries Corporation ARC - Agriculture Refinance Corporation ASC - Agro-Service Center CADC - Comprehensive Area Development Corporation CB - Commercial Banks CLDB - Cooperative Land Development Bank DTW - Deep Tubevell GO1 - Government of India GOWB - Government of West Bengal LDB - Land Development Bank MIC - Minor Irrigation Corporation NABARD - National Bank for Agriculture and Rural Development OPS - Operations Policy Staff of the World Bank ORG - Organization Research Group RLI - River Lift Installation RM - Regulated Market RMC - Regulated Market Committee SCB - State Cooperative Bank SMB - State Marketing Board SMS - Subject Matter Specialists STW - Shallow Tubewell SWB - State Water Board SWID - State Water Investigation Directorate VLW - Village Level Worker FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) TABLE OF CONTENTS Page No. Preface............................................................. i Basic Data Sheet.................................................... ii Highlights.......................................................... iii PROJECT PERFORMANCE AUDIT MEMORANDUM I. PROJECT SUMMARY........................................ ...... 1 II. AUDIT FINDINGS.. ............................................ 3 A. General................................................... 3 B. Agricultural Extension.. ................................ 4 C. Institutional Aspects................................. 6 D. Water Charges......................................... 7 E. Viability Determinants of Minor Irrigation............ 9 F. Miscellaneous Comments.. .............................. 11 Table 1 West Bengal AgricuXtural Development Project - Disbursements........................................... 15 Graph World Bank 24370 Credit 541-IN Loan Disbursement Profile................................................. 16 Annex I - Comments Received from the Borrower ........................ 17 Annex II - Comments Received from NABARD .............................. 25 PROJECT COMPLETION REPORT I. Background ............................................... 31 II. Identification, Preparation and Appraisal .................. 32 III. Project Implementation ................................... 36 IV. Agricultural Impact ...................................... 44 V. Financial and Economic Results .............................. 47 VI. Borrower and IDA Performance ................................ 49 VII. Conclusion ............................................... 49 Annexes 1-7 Map - IBRD No. 10905R (PPA) 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. PROJECT PERFORMANCE AUDIT REPORT INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) PREFACE This is a performance audit of the West Bengal Agricultural Devel- opment Project in India, for which Credit 541-IN in the amount of US$34.0 million was approved in April 1975. The credit was closed in March 1981, one year behind schedule; final disbursement took place on July 15, 1981. The audit report consists of an audit memorandum prepared by the Operations Evaluation Department (OED) and a project completion report (PCR) dated July 2, 1984. The PCR was prepared by the Bank's South Asia Regional Office, based on a partial PCR and other documentation submitted by the Borrower. An OED mission visited India in November 1982, using Borrower PCR documents as a basis for its field evaluations, but processing of audit find- ings was delayed pending receipt of a final PCR. The OED mission held discussions with officials of the Government of West Bengal and the leading banks in the State, as well as the National Bank for Agriculture and Rural Development in Bombay. The project area and some of the project features were visited; some farmers were interviewed. The information obtained during the mission was used to test the validity of the analysis and conclusions of the PCR. The audit memorandum is based on these discussions, on interviews with Bank staff associated with the project, and on a review of the PCR, the original documentation submitted by the Borrower, the Appraisal Report (No. 463a-IN) dated April 4, 1975, the President's Report (No. P-1605-IN) dated April 10, 1975, the Credit Agreement of April 28, 1975, correspondence with the Borrower, and internal Bank memoranda on project issues as contained in relevant Bank files. A copy of the draft report was sent to the Borrower on September 25, 1984. Comments received from the Borrower, reflecting West Bengal State Government views, and from the National Bank for Agriculture and Rural Devel- opment (NABARD) are in Annexes I and II, respectively, and have been taken into account in finalizing the report. The audit finds the PCR comprehensive and accurate with respect to the project's principal achievements and shortcomings and has no reason to question its conclusions. The audit memorandum highlights issues primarily related to agricultural extension, institutional aspects, water charges and to the project's economic viability because of the wider implications of these issues. The valuable assistance provided by the Governments of India and West Bengal, and by local officials and the farmers visited is gratefully acknowledged. PROJECT PERFORNANCE AUDIT REPORT InD - vEST BECAL AGRICULTURAL DEVBELOPHENT PROJECT (CREDIT 541-IN) BASIC DATA SHEET iET PROJECT DATA Actual or Actual as Z Appraisal Est-mated of Appraisal Estimate Actual Estimate Total Project Costs (USS million) 67.0 59.3 89 Credit Amount (USS million) 34.0 34.0 100 Date Board Approval - 04/22/75 - Credit Agreement Date - 04/28/75 - Date Effectiveness 07/31/75 08/28/75 128 /a Date Physical Components Completed 09/79 03/81 134 /a Proportion Then Completed (2) - 65 - Closing Date 03/31/80 03/31/81 120 /a Economic Rate of Return (E) 1b 55 42 76 Institutional Performance - Fair - Techntcal/Agronomic Performance - Mixed - Number of Beneficiary Families 200.000 120,000 60 CULATIVE DISBURSEMENTS FY76 FY77 FY76 FY79 FYSO FT81 Appraisal Estimate (USS million) 1.6 7.8 18.7 32.4 34.0 - Actual (USS million) - 4.3 10.3 17.6 22.3 34.0 Actual as 2 of Estimate - 55 55 54 66 100 Date of Final Disbursement July Is. 1981 MISSION DATA Date No. of Mandays Specializations Performance Type of (mo.Iyr) Persons in Field Represented /c Rating /d Trend le Problems /f Identification 172 Preparation 05/73 6 120 A.,C,E.F Appraisal 12/73 4 80 A,B.C Reappraisal 10/7' 3 45 A,C.D Subtotal 245 Supervision 1 06/75 3 24 B.C 2 - M Supervision II 02/76 3 30 B.C 2 1 M Supervision LI 09/76 3 15 4,,D 2 T,M Supervision IV 05/77 3 15 A,C.D 2 1 T,M Supervision V 01/78 1 5 E 2 1 T,M Supervision VI 08/78 1 10 D 2 2 P.T Supervision VII 03/79 2 10 C,D 2 2 P,T Supervision VIll 12/79 2 10 A.E 2 2 P,M Supervision IX 10/80 3 7 3,C 2 2 P.M Subtotal 126 TOTAL 371 OTHER PROJECT DATA Barro-er Government of India Executing Agency Agriculture Refinance Corporation/west Bengal Department of Agriculture Fiscal Year of Borrower April 1 - March 31 Name of Currency (Abbreviation) Rup-e (Ps) Currency Exchange Rate: Appraisal Year Average USS1.00 - Rs 8.00 Intervening Years Average USS1.00 - Ra 8.20 Completion Year Average USSt.00 - Ra 8.00 Follow-an Project: Non- Is Calculated in terms of months from the date of Board approval. 7b The audit averaged various ranges provided in appraisal report and PCR. A - Economist; B - Agriculturalist; C - Croundwater Specialist: D - Financial Analyst; E - Credit Specialist: F - Marketing Specialist. /4 1 - Problem-free or minor problems; 2 - Moderate problems: and 3 - Major problems. Ic 1 - Improving; 2 - Stationary; and 3 - Deteriorating. Tf M - Managerial; T - Technical; P - Political. - iii - PROJECT PERFORMANCE AUDIT REPORT INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) HIGHLIGHTS The project's main objective was to improve and expand minor irrigation facilities in six districts in West Bengal. Towards this end, credit was to be made available for the construction of shallow and deep tubewells, and direct investments were to be financed for river lift irriga- tion. Furthermore, the State Water Investigation Directorate was to be strengthened, and the agricultural extension system reorganized and improved. The establishment of agricultural markets and of agro-service centers was included on a pilot basis. The project's minor irrigation components were on the whole implemented as envisaged. About 33,200 shallow tubewells were constructed compared with the appraisal estimate of 18,000; an additional 22,500 wells were fitted with pump sets. The Minor Irrigation Corporation established 300 deep tubewells as expected at appraisal. The Agricultural Engineering Directorate impro-ed 546 river lift irrigation schemes, about 10% less than expected at appraisal; 362 units with onshore/offshore installations also were finished. The State Water Investigation Directorate received equipment, but was unable to make full use of available training funds; its work orien- tation was upgraded. There were unexpected problems in the reorganization of the exten- sion service, as existing staff refused to accept their newly assigned posi- tions and engaged in a long drawn-out legal action. Consequently, the exten- sion prograw fell 5-6 years behind schedule, with adverse effects on project farmers' production. There were also delays in the development of the markets under the project. Only one of three markets planned was completed, but none was operational by the Closing Date and there were indications that traders would resist operating in those markets, as was the case elsewhere in the country. The program of setting up agro-service centers basically was a failure. Only 64 such centers were established (target - 200), but perfor- mance was poor and a large proportion ceased operations within a few years. The range of economic rates of return for the minor irrigation components has been re-estimated from less than four percent to over 50%. The re-estimated average economic rate of return was 42% compared with 55% estimated at appraisal. The project had a cost underrun of 11% and a completion delay of 34%. Major points of interest are: - progress in reorganizing agricultural extension under this and the follow-on project (Credit 690-IN) was extremely poor, although the fund allocation for this purpose under the present Credit was nearly fully disbursed (PPAM, paras. 11-16; PCR, paras. 3.21-3.22); - iv - - there were institutional weaknesses, at the center of which were the difficulties facing the Minor Irrigation Corporation (PPAM, paras. 17-20); - the existing structure of water charges was inappropriate, and the State failed to introduce improvements during the time required (PPAM, paras. 21-25; PCR, para. 3.20); - as the re-estimated rates of return for the project tended to be very high but also showed extreme variation, it would have been desirable to relate these rates to key implementation aspects to gain a better understanding of aspects of project viability (PPAM, paras. 26-32; PCR, paras. 5.01-5.05); - progress in introducing an efficient water management system was unsatisfactory (PPAM, para. 33; PCR, para. 3.15); - declining loan recoveries from farmers followed the national trend; th's problem should continue to receive the Bank's full attention (PPAM, para. 34; PCR, para. 3.17); - the uncertainty facing the development of markets underlines the need for the Bank to have pilot components under its projects more thoroughly evaluated (PPAM, para. 35; PCR, paras. 3.11-3.12); - the concept of agro-service centers as applied under the project is questionable, and execution of this component was poor (PPAM, para. 36; PCR, paras. 3.07-3.10); and - a number of obstacles, including poor cooperation of participating banks and cumbersome local procurement procedures, hindered disbursement of funds for several components (PCR, paras. 3.06, 3.08, 3.12 and 7.02). - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) I. 'PROJECT SUMMARY 1/ 1. Special urgency to increase food production in West Bengal was felt in the mid-1970s when, as a result of natural calamities, the threat of food shortages rose drastically. Government of West Bengal's (GOWB) drive at the time to introduce high-yielding wheat and rice varieties was stifled by shortages of electric power, fertilizer and seeds. The State has ample irri- gation water resources, especially from groundwater, and an accelerated exploitation of these resources became the center of GOWB's efforts to re- verse the deteriorating food supply situation. At that time there existed a large number of uncompleted and underutilized deep tubewell (DTW) and river lift installation (RLI) schemes in the State. IDA was invited to assist in the rapid development of the State's minor irrigation potential. 2. The project had a long gestation period. It emerged from an ini- tial request in 1972 by the Government of India (GOI) for an agricultural development project in West Benegal. GOWB, with IDA assistance, revised the initial proposal in early 1973 and agreed to have the project appraised in late 1973. During processing in IDA, GOI requested a revision of the project resulting in reappraisal in late 1974. A credit (541-IN) in the amount of US$34.0 million was approved in April 1975. The credit became effective in August 1975 and was closed in March 1981, or one year later than expected; final disbursement took place on July 15, 1981. 3. The objective of the project was to increase crop production in West Bengal. The project was to finance a four-year program of loans extend- ed by participating banks for constructing and equipping shallow and deep tubewells, constructing and equipping three markets, and establishing agro- service centers. Support also was to be provided for strengthening the State's Minor Irrigation Corporation (MIC), the State Water Board (SWB) and the Department of Agriculture, as well as for improving the agricultural extension system, preparing a second-phase project, and completing State- owned RLIs and DTWs. The initial project area comprised six districts in West Bengal. 4. The project was implemented with varying success. The shallow tubewell (STW) component, which was enlarged in 1979 to cover the whole State, at completion comprised 55,815 wells (of which 33,200 newly con- structed), compared with 18,000 estimated at appraisal. A total of 300 private deep tubewells were constructed, as expected. Completion of river lift installations was accomplished for 546 systems instead of the 600 assumed at appraisal, and 362 units with onshore/offshore installations 1/ Adapted from the PCR. -2- involving pumping facilities were finished. Only one of three proposed agri- cultural markets was completed, but none was operational at project comple- tion; none was financed with funds from the IDA credit. Of the 200 proposed agro-service cente:s, only 64 were established, also without IDA funds, but many of those wert subsequently closed as being non-viable. The institu- tion-building components in the project encountered major difficulties. Improvements were maee in MIC and the SWB (later renamed the State Water Investigation Directorate - SWID), but serious deficiencies remained. Imple- mentation of the agricultural extensioLn component was greatly delayed. Actual project cost was US$59.3 million, or 11% below appraisal estimates. The main reasons for the reduced cost were physical underachievement of seve- ral components, and lower than expected unit costs for the construction of shallow tubevells. 5. Major difficulties facing project implementation included poor coordination among project agencies, insufficient support by some commercial banks, late appointment of agency heads for MIC and SWB, controversy over groundwater exploitation norms, reluctance of farmers to organize in groups, and prolonged litigations related to the markets and agricultural extension components. The change over to the training and visit (T&V) system of exten- sion under the project was particularly problematic as there was political opposition to this provision for some time and the existing government staff concerned resisted the required reorganization. Littleprogress was achieved in this regard under the project; the effort continued under a follow-on project (Credit 690-IN), but achievements have been 5-6 years behind target. Loan recoveries from project beneficiaries deteriorated throughout the proj- ect period, although this was a general phenomenon in India at that time and not specific to this project. A major difficulty, and one that resulted in the violation of a Credit Agreement covenant, related to the issue of cost recovery, i.e. the rationalization of water charges. Virtually no progress was made on this point, largely for political reasons. 6. The production impact of the project is difficult to ascertain because of the dispersed nature of the investments. However, a substantial increase in crop yields has been reported, especially for paddy, wheat, pota- toes and jute. The cropping pattern has not changed to the extent expected, mainly because of farmers' resistance to reduce cultivation of water-inten- sive boro paddy in favor of other crops, mainly wheat. Farmers' preference for rice and an inadequate supply of wheat seeds, inadequate extension ad- vice, ineffective water management, and disincentives deriving from irregular water charges were major reasons for the slow change.2/ Cropping intensities increased significantly, reaching 177% for shallow tubewells and up to 228% for river lift schemes. Overall, there is likely to be a shortfall in irrigated area under the project, largely due to widespread adherence to the pre-project cropping pattern, but also partly because of design and technical problems with RLIs. The reduced irrigation area had an adverse effect on the number of direct beneficiary farmers which reached only about 120,000 instead of the target of 200,000. 2/ Bank staff advise that, as of late 1984, wheat was cultivated on a much wider scale in West Bengal. -3- 7. The financial and economic performance of investments in minor irrigation was impressive. Both the appraisal report and the PCR give range estimates for the economic rate of return by type of investment. The ranges represent areas with different types of soils. The re-estimated ranges were 47-50% for shallow tubewells, 21 to over 50% for deep tubewells, and 4-50% for river lift installations. Taking the mid-points of these ranges and weighing by the cost of the respective components, the re-estimated average economic rate of return in minor irrigation was 42%, compared with 55% esti- mated at appraisal. Re-estimated financial rates of return range from 1% to over 50%. No rates of return have been calculated for the other project com- ponents. II. AUDIT FINDINGS A. General 8. Considerable success can be claimed for the project as regards achievement of its main objectives, i. e., the provision of minor irrigation infrastructure. The physical targets were fully or nearly reached for deep tubewells and river lift irrigation schemes and even exceeded for shallow tubewells, albeit all over an extended implementation period. The minor irrigation investments constituted a slice of the State's much larger overall development program in the sector and, as such, were fully consistent with Government's strategy and enjoyed extensive Government support. 9. In some respects, the project's effects were State-wide and not confined to project districts. The State Water Investigation Directorate was strengthened through the provision of additional staff, vehicles and equip- ment, enabling it to perform more of the functions for which it was created more effectively. The project gave renewed impetus to the study and survey of the State's groundwater resources and for establishing standards for the safe and economic withdrawal of groundwater. Guidelines for well spacing, drilling depths and well design were improved and continue to be used and further refined. The use of pumping units was studied with a beneficial effect on efficiency. The increased involvement of the National Bank for Agriculture and Rural Development (NABARD - formerly ARDC) contributed to improvements in the State's rural banking sector. 10. Overall, construction activities related to shallow and deep tube- wells and to river lift schemes that were the core of the project fared mark- edly better than project components entailing institutional development. While the project benefitted the majority of farmer participants, clarifica- tion and correction of a number of shortcomings would further increase those benefits and make future investments in minor irrigation more effective. Predominant among these shortcomings were delayed implementation of measures to improve agricultural extension, involvement of more than one public agency in minor irrigation development, and failure to correct an inappropriate structure of water charges. The evaluation of the project experience has suffered from weaknesses in assessing - ex-post - individual determinants of - 4 - the project's viability. These are the main topics covered in the following sections. Miscellaneous comments are added in order to highlight certain implications going beyond the scope of this project. B. Agricultural Extension 11. West Bengal was one of the pioneering States in India for intro- ducing the training and visit (T&V) system of agricultural extensiGn, and the first one to apply it State-wide. Originally, only the six project districts were to be covered by the new system, but Government felt, and IDA agreed, that a reorganization of extension would be more effective if it also covered other districts in the State. To meet the resulting enlarged resource requirements, a free-standing E :tension and Research Project was approved with IDA support in 1977 (Credit 690-IN). Extension activities started under the Agricultural Development Project were to phase directly into the Exten- sion and Research Project (PCR, paras. 3.21-3.22). 12. The audit suggests that comprehensive evaluation of extension activities should be undertaken after the closing of Credit 690-IN. However, it is important to note at this time that implementation of the extension component under Credit 541-IN was unsatisfactory and that, in the audit's view, agricultural production generated by the project's minor irrigation investments suffered as a result. The effectiveness of agricultural exten- sion in the State had declined since 1972, and appraisal staff felt that strengthening of this service was necessary to improve water utilization and to promote high crop yields in the project area. It is also relevant to note that implementation of Credit 690-IN was problematic until the end of Decem- ber 1982, although improvements have been reported since then (PCR, para. 3.23). 13. After a successful introduction in some areas in 1975 and 1976, implementation of the new extension system was effectively suspended for two years immediately following the June 1977 election of a new government in West Bengal. Two years later, in June 1979, the government finally approved the project's approach to extension reform but permitted implementation to be resumed only on the condition that staff who had transferred from the Commun- ity Development Department to the Agriculture Department should be returned to the former. Staff transfers were part of the reform as the old system comprised multi-purpose staff not under the Department of Agriculture as well as agricultural field staff of the Department. After Government orders for reorganization were issued in July/August 1975, it soon became apparent that the roughly 3,000 multi-purpose workers and 1,000 agricultural field staff were opposed to being assigned as Village Level Workers (VLWs) under the Department of Agriculture's new extension system. Both of these groups took legal action, and court proceedings were still not completed by the end of 1982 - some seven years after the initial reorganization. 14. Little progress was made immediately after the June 1979 decision to proceed with the implementation of the extension component because of staff resistance and lack of funds; Credit 690-IN, under which extencion activities initiated under Credit 541-IN were to be continued, had no provi- sion for reimbursement of staff costs. In early 1980 a cadre of VLWs was formed in the Department of Agriculture by merging 14 separate staff cadres, a radical step within the context of the State's public service. It was not until it was decided to create new position for VLWs in early 1981 and to fill them through recruitment from outside the existing establishment that progress began to be made. The Department of Agriculture succeeded in this way to create a force of about 1,900 VLWe by the end of 1982, compared with the target of 4,000. Recruitment was continuing in 1983 and it was expected that some of the staff formerly resisting reassignment would finally agree to be reassigned. However, by the end of 1982 the number of subject matter specialists (SMS) in post (48) still fell 75% short of the target, and the research establishment was only a fraction of the intended strength. Civil works construction of extension facilities had barely started but was pro- gressing in 1983. In retrospect, it is clear that there were two main fact- ors behind the staffing problem. These include the radical change entailed in the adoption of a single-function, single-line-of-command extension serv- ice, and the propensity of staff associations and individuals in West Bengal to seek recourse in disputes at high levels of the legal system. 15. The implementation difficulties are reflected in the disbursement pattern for agricultural extension. An essential feature of improving the extension services was reorganization. The effectiveness of the reorganized services was to be aided through research and staff training and the provi- sion of vehicles, equipment, staff housing and other buildings. However, because of the political and staffing problems mentioned above virtually no staff training, research and civil works construction was carried out under the project prior to 1981, and progress was slow in 1981 and 1982. The almost US$2.0 million of disbursed IDA funds were used for operational expen- ses and the purchase of vehicles and equipment - mostly in 1978 - related to agricultural extension State-wide. While these funds thus were not used exactly as envisaged at appraisal, they did support what some observers con- sider appropriate and acceptable field extension activities during the period from 1975 until June 1977. Disbursements for extension under the follow-on project (Credit 690-IN) were not permitted until the allocation for extension in Credit 541-IN was fully disbursed. For this reason, and because staff were not included as a reimbursable item, the cumulative effect was that no disbursement at all had actually been made from Credit 690-IN by early 1982, when disbursement was scheduled to have been completed. Even more than two years later (August 1984), only 39% of Credit 690-IN had been disbursed. 16. At the time of the OED mission, field activities under the T&V system were ongoing, although on a reduced scale and with substantial prob- lems. Supervision of VLWs was weak and production recommendations were inadequate, with the result that contact farmers' interest was waning. Higher-level extension staff were not spending sufficient time in the field. There were deficiencies in the periodic training program for VLWs. Open questions remained concerning the staffing and programming of research activ- ities. Progress in civil works construction was hampered by disputes over building sites. The loan program to equip extension field staff with motor- ized transport had not gotten off the ground. Since relatively little physi- cal progress (compared with the original time schedule) had been made and - 6 - abnormal weather conditions in 1981/1982 were an additional disruptive fact- or, the mission could not assess the effectiveness to date of the T&V system. Because of this disappointing implementation experience, the audit recommends that the eventual audit of Credit 690-IN includes an in-depth evaluation of the agricultural extension component supported by this project.3/ C. Institutional Aspects 17. Public involvement in the development of minor irrigation in West Bengal originally was through direct investment nuder the auspices of the Agricultural Engineering Directorate (AED). In order to reduce the State's budgetary burden it was decided in the mid-1970s to gradually shift the responsibility for this subsector to the Minor Irrigation Corporation (MIC), which was supposed to operate with loan funds from the banking sector. MIC's mandate was to construct the facilities and collect adequate charges from the users in order to be able to service its own debt. Wherever possible, management of the wells, including the collection of water charges, was to be handed over to farmers' groups formed for this purpose. 18. Under the project all 300 DTWs that were constructed were the responsibility of MIC, while AED was responsible for the RLIs because most of these schemes were originally established by that organization. Even though the newly created MIC was found to have organizational, managerial and finan- cial difficulties at appraisal, the provision. for strengthening the organi- zation were rather modest. During implementation, staffing and operations of MIC fell behind schedule, and serious problems of management and accounting could not be resolved. Since it was politically unacceptable to collect cost-covering water charges, MIC was unable to generate sufficient revenues for meeting its debt obligations, and the State had to provide extensive sub- sidies. The exact amount of these cannot be readily ascertained, however, as MICs' accounts have remained unaudited for years. One of Government's main objectives, therefore, has not been met as budgetary funds contiaue to flow into minor irrigation development. Moreover, the existence of two virtually parallel organizations - HIC and AED - has led to duplication, waste and inefficiency and has complicated the effort to rationalize water charges (para. 21). MIC is clearly lagging in the introduction of an effective water managemenr system, and coordination with AED is weak.4/ 3/ The Borrower's comments on the experience with the project's agricul- tural extension component are in Annex I, point 1. 4/ The Borrower and NARARD comment that, subsequent to the OED mission's visit, MIC has been restructured, and its performance has improved (Annex I, point 2; Annex II, point 1). -7- 19. The organization of farmers groups proved more difficult than expected - only 27 were formed compared with 200 envisaged at appraisal.5/ Indications are that MIC's problems discouraged farmers from participating. Of particular concern to farmers were the long delays in commissioning DTWs, usually due to failure to synchronize completion of the wells with their electrification, and the higher water charges (para. 23). It warrants men- tioning, though, taat the three group-managed wells studied in the prepara- tion of the Borrower's PCR performed better than comparable MIC-managed wells. However, a comprehensive comparative study is not available on which firm conclusions could be based. 20. The audit concludes that the project's institutional environment was not as supportive as it should have been. Bank supervision should have been more assertive in bringing about improvements, especially in strengthen- ing MIC. D. Water Charges 21. Under the terms of the West Bengal Agreement (Section 2.10) the Minor Irrigation Corporation was to have implemented by December 31, 1975 a program of water charges to recover the operating and maintenance costs of its irrigation facilities. Furthermore, West Bengal was to have undertaken studies aimed at increasing water charges sufficiently on a State-wide basis to recover a portion of capital costs. Throughout the implementation period supervision missions found action on this covenant unsatisfactory. The situ- ation was still not resolved at the time of the OED mission, and there are indications that the project was adversely affected by it. 22. The main problem was that there did not exist a uniform system of water charges (PCR, para. 3.20). Farmers paid different rates depending on the ownership of the facility from which they were drawing water. The rates were higher for water from wells operated by farmer groups, lower for water from MIC and Comprehensive Area Development Corporation (CADC) wells, and by far the lowest for Government (AED) owned facilities. For example, basic rates per acre-inch in 1982 were Rs. 10 for CADC, Rs. 9.60 for MIC and Rs. 1.60 for AED.6/ Since rates were charged per acre-inch of water and differ- ent crops have different water requirements, the cost of irrigation water per acre varied among crops. This system allowed farmers to choose their crop- ping pattern and, consequently, vary their demand for water. At a target rate of Rs. 10 per acre-inch, boro paddy, with a requirement of 48 inches per acre, carried a water charge of Rs. 480 per acre in 1982. Similarly, the charge arrived at for wheat was Rs. 120 per acre. 5/ OPS comments that preparation/appraisal of some project components may have been less than fully adequate. They question whether farmers' lack of enthusiam for group organizations, and the unwillingness of Govern- ment workers to be reassigned as VLWs (para. 13), was sufficiently recognized a' appraisal, and whether the former was not an obvious risk if MIC's performance were to fall short of appraisal expectations- 6/ The Borrower and NABARD advise that water rates were made uniform during 1982/83 at Rs. 5.00 per acre-inch (Annex I, point 3; Annex II, point 2). -8- 23. A complicating factor in 1982 was a Government drought relief meas- ure under which CADC and MIC water charges were reduced by 50%. The result- ing diversity in water charges in 1982 is conveniently demonstrated on hand of the example for boro paddy shown below: Farmer Groups CADC/MIC AED - (Rs. per acre)-- ---- Target Charge 480 480 96 Actually Charged 480 240 96 Since there existed a relatively large number of AED wells and RLIs, dis- persed throughout the State, the number of beneficiaries who could avail themselves of the favorable AED water charges was also large; the rates were well known to the public. Members of farmers' groups and users of other non-AED irrigation facilities considered these differentials unfair. Conse- quently, there was reluctance on the part of some farmers to participate in the schemes promoted under the project. This reluctance was one of the reas- ons for implementation delays and the subsequent underutilization of DTWs (shortfalls in pumping hours and irrigated area per well). 24. The collection of water charges varied over time and was, to some extent, influenced by variations in rainfall. Since charges were collected in advance, the default problem was a relatively minor one. Interestingly, while the sample results show that collection in 1980-81 exceeded 90% of accrued dues for MIC and farmers' groups DTWs, it was only about 60% for the RLIs with the much lower water charges. In most cases, ability to pay was not the issue as available cash flow projections demonstrate - although there were exceptions. The OED mission was advised of situations where farmers were hesitant to pay what they considered high water charges in DTW or RLI areas, while other farmers in the district were quite willing to pay two or three times as much for water from private STW owners. 25. The audit concludes that water charges were correctly identified as an issue at the appraisal of this project, but that Government and the Bank were unable to come up with a satisfactory solution during implementa- tion.71 A study has been undertaken which has been under review by Govern- ment for an extensive period, and action was pending at the time of the audit visit. Other than for political factors, there are no justifiable reasons for the delays in bringing about uniform rates. These are good grounds for the Bank to focus extensively on this issue prior to further involvement in minor irrigation development in West Bengal. 7/ OPS questions whether resolution of this issue should have been left until implementation in view of the fact that MIC's financial position would become critical if such revenues were not forthcoming. -9- E. Viability Determinants of Minor Irrigation 26. In the PCR, the financial rate of return on minor irrigation investments was estimated to range from less than one percent to over 502 (the computation cut-off point); similarly, the economic rate of return was re-estimated in the range of four percent to over 50% (PCR, paras. 5.01-5.05). While the range of rate-of-return estimates tended to be narrow for shallow tubewells, it was much larger for deep tubevells and particularly large for river lift irrigation. The returns tended to be higher in areas with clay soils and lower in areas where loam predominated. The audit does not question the general viability of these schemes but would have welcomed a more complete explanation of the extreme fluctuation among the sample schemes analyzed. Such an explanation would have been useful regards the location and operation of similar future investments. Soil type as the only explana- tory factor is not entirely convincing in view of the overall aspects affect- ing investment viability highlighted below.8/ 27. The construction of STWs and installation of pumpsets was under- taken by local contractors who lacked sufficient experience in this field. It would seem important to know to what extent the efficiency of the units was adversely affected as a result, and whether there was a significant dif- ference among contractors. Furthermore, overall project execution was 1-2 years behind schedule, and completion times, while reasonable for STWs (about 30 days), were long for DTWs (24 months) and RLIs (36 months). Investment cost per unit remained below expectations for STWs (about 14% in the sample) but showed an overrun for DTWs (39%) and RLIs (27%). 28. There were also factors of operation of the units which strongly affected their viability. The irrigated area for the sample units studied varied tremendously. In STWs, the net irrigated area per unit was only about half of the appraisal estimate. With one exception, there was also a short- fall for DTWs and RLIs, and there was great variation from one scheme to the next. Pumping hours ranged from about 12% to 45% of the assumed optimum uti- lization. Largely as a result of the smaller command areas per scheme, the total area brought under irrigation was only about 86,000 ha compared Uith 125,000 ha estimated at appraisal.9/ Prominent reasons given for these shortfalls, among others, were the small, fragmented land holdings and the erratic electricity supply. There were also problems with water management (para. 33). 8/ Although the Borrower and NABARD have identified various factors influ- encing rates of return on minor irrigation investments, the relative importance of these and the portion of total variability in rates of return explained by them are still unknown (Annex I, point 5; Annex II, point 3). 91 However, the OED mission noted that these findings of the NABARD survey were not endorsed by the West Bengal State Government, although no alternative estimates were offered. - 10 - 29. An important determinant in the realization of the project's irri- gation potential was the cropping pattern. In most project districts boro paddy, with its high water requirements, remained the farmers' preferred crop, despite the fact that wheat had the potential of producing more than double the returns of boro paddy per acre-inch of water consumed, and farmers growing other crops, e.g. potatoes, achieved very favorable cash flows.10/ The fact that wheat production was hampered by problems related to variety selection and the supply of seeds must have had an adverse effect on the rates of return. An important question that needs to be answered is whether the wide range in the re-estimated rates of return was related to a differer- tial rate of acceptance among survey farmers of non-boro crops. 30. Other factors influencing re-estimated returns were the assumptions concerning without-project conditions. From 15% to 26% of the area under the sample schemes received irrigation water even without the project, and in that area project investments merely substituted one source of water for another. Cropping intensities without the project were found to range from 109% to 166%. Very high returns in such a situation would not normally be expected on incremental investments. An explicit statement of the relation- ship between without-oroject conditions, cropping patterns and the final project outcome would thus be useful for determining the reasons for the occurrence of some very high rates of return on the one hand, and the large variation in the rates on the other. 31. Another aspect to be considered are the sample survey results. The results were produced by two different organizations and reflect weather con- ditions of two dissimilar years; the NABARD survey was conducted in 1979-80 and the ORG survey in 1980-81. Actual rainfall was below normal levels for the year in 1979 (-19%), slightly above in 1980 (+2%), and showed no signifi- cant deviation in 1981 (-0.3%). There was also some difference in the treat- ment of control groups between the two surveys, and a number of STW owners to be surveyed could not be contacted. If future projections of benefits based on these survey benchmarks remain unadjusted for significant biases traceable to benchmark-year conditions, then the explanatory value of the results is reduced. 32. The foregoing comments illustrate that there existed a set of cir- cumstances which would normally be expected to adversely affect project via- bility. Yet despite these circumstances, some very high rates of return reportedly were achieved. What is not known is whether corrective measures, had they been introduced, would have yielded improvements primarily in the districts with the poorer results, or whether the effects would have been evenly distributed across all districts. Further investigation in this 10/ OPS correctly observes that "... if costs of water are not fully reflec- ted in the charges (para. 18), if recovery on loans for water develop- ment is low and if, due to reduced command areas, water is plentiful, other factors [than returns to water] might appear of greater value to farmers. Their failure to adopt wheat may reflect the fact that while generating two-and-a-half times the return per acre it requires three times the labor input.* - 11 - direction would enhance the prospects for siting future investments in minor irrigation even more successfully than has been the case under this project, and for utilizing such investments, both new and old, more efficiently.11/ F. Miscellaneous Comments 33. Water Management. Water management within the command areas of DTWs and RLIs generally was not satisfactory. While Government's Optimiza- tion Program served to focus attention on the water distribution system and on water management, little progress was made on the latter. Rowever, AED made a promising start in testing a rotational water supply system in select- ed areas (PCR, para. 3.15). Technically, water management with buried pipes and spout outlets serving about ten acres each - the system established under the project - is much easier than with open ditches. Consensus is more eas- ily reached among the small group of irrigators per outlet, and water deliv- ery is more reliable because of the reduced maintenance problems associated with underground pipes. With the new rotational water supply system it would be possible to more accurately match water applications with crop water requirements and, consequently, to save water and extend the command area. The problem is that AED has not been able to go beyond the testing stage, even at a time when thousands of schemes had been in operation for years, and has been unable to commit itself to a timetable for the introduction of the system State-wide. Moreover, MIC had not even experimented with a rotational water supply system, and there was no indication that close cooperation with AED would facilitate its introduction in MIC schemes once AED had made it fully operational. Together with adopting optimum cropping patterns, the introduction of an effective water management system holds the largest pros- pect for gaining the best additional returns from minor irrigation invest- ments in West Bengal.12/ 34. Loan Repayments. Separate data on the overdues position of sub- borrowers under the project were not available, although banking officials pointed out that there was no difference between the banks' customers associ- ated with the project and their other customers. Generally, there has been a tendency for the banks' loan recovery to decline since 1976 (PCR, para. 3.17). For example, loan recovery as a proportion of demand for the West Bengal Central Co-op Land Development Bank fell steadily from 100% in 1976 to 48% in 1981. This trend was not unique to West Bengal, however; it was typi- cal, rather of a nationwide trend.13/ An encouraging element under the present project was the fact that the downpayment by farmers and MIC, at 13% of total cost, far exceeded the level of 4% envisaged at appraisal. The I! OPS and the audit concur that answers to questions raised in paras. 26- 32, as well as with respect to factors affecting farmer participation (para. 23) should be sought because of their relevance for on-going and future projects. 12/ The Borrower's comments provide updated information on the aspect of water management (Annex I, point 4). 13/ See also PPAR for the India Chambal Command Area Development Projects (Loan 1011-IN and Credit 562-IN), OED Report No. 4570, dated June 20, 1983. - 12 - occurrence of high overdues once again justifies the argument for an intensi- fied dialogue on the subject between the Bank and Indian authorities. 35. The Development of Markets. Although the development of three mar- kets was to have been supported by the project, no IDA funds were disbursed for that purpose (PCR, paras. 3.11-3.12). The three markets would have been part of a total of 60 such markets under consideration throughout the State. The basic experience with the development of markets was that implementation was extremely delayed (none was operational at the time of Credit Closing), and that the prospects for smooth and timely occupancy by the traders were uncertain. In these respects, the experience with market development in West Bengal was very similar to that encountered in Bihar and Karnataka.14/ In retrospect, this audit considers the IDA decision at appraisal to severely curtail this component to a pilot scale as appropriate. The results actually indicate that the effort to develop markets did not receive any substantial benefits from the project, hence this component could have been excluded altogether. One potential benefit, i.e. an in-depth evaluation of the con- troversial markets de-relopment concept, could not be realized because the expected evaluation study was not forthcoming. More insistence on the part of IDA that this study be carried out would have been warranted.15! 36. Agro-Service Centers. At appraisal it was anticipated that the project would support the establishment of 200 agro-service centers. How- ever, only 64 centers were actually set up, of which only 38 were found to be working at the time of project completion. Like with markets, no IDA funds were disbursed for this purpose. The PCR presents some of the shortcomings of agro-service centers (paras. 3.07-3.10), but the basic concept underlying this program is likely to be as much flawed as its execution. It is diffi- cult to see a comparative advantage for such a center. For example, custom services can be more effectively provided by farmer-owners of equipment who know how to operate it than under the auspices of the project's agro-service centers, and established merchants tend to have the edge in the distribution of farm inputs and spare parts. Moreover, the idea of technically trained agro-service center owners giving advice to farmers suffers insofar as there could be a conflict of interest: what is available for sale at the agro- service center may not best meet the customers' requirements. The audit thus considers this project component a failure. Partly for this reason, but especially because this component also had a pilot character, more thorough, in-depth monitoring and evaluation would have been desirable. The experience with this and the markets development component warrants the conclusion that the Bank should provide for a more systematic and complete follow-up for pilot components which are included in a project for the purpose of gaining 14/ See PPAR for India Bihar Agricultural Markets Project (OED Report No. 3490); PPAR for India Karnataka Agricultural Wholesale Markets Project (OED Report No. 5081). 15/ The West Bengal State Government broadly agrees with the audit's assess- ment of the markets component, but expresses the view that a final con- clusion should be based on an in-depth study to be undertaken by an independent body (Annex I, points 8 and 9). - 13 - insight into new concepts or possibilities. No conclusive lessons can be drawn if information is neither properly collected nor analyzed.16/ 37. Sustainability of Project Benefits. The key determinants of future productivity of project investments are the introduction of an optimal crop- ping pattern and the efficient utilization of irrigation facilities in con- junction with the introduction of an effective water management system. Essential GovernmenL contributions are the provision of appropriate extension advice and rationalization of water charges. While project benefits are sus- tainable with present arrangements, maximization of benefits would not be possible without improvement in these key areas. 16/ The Borrower cautions that the issue of agro-service center performance must be seen in proper perspective and advises that a large number of these centers are functioning successfully (Annex I, point 6). -N-- - 15 - Table I PROJECT PERFORMANCE AUDIT MEMORANDUM INDIA - WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 541-IN) DISBURSEMENTS Credit Agreement Final Category Schedule 1 (04/28/75) Disbursement /a 1. Loans for: (a) Shallow Tubewells 11.4 21.4 (b) Deep Tubewells lb 2.0 0.2 (c) Agro-service Centers 1.0 - (d) Markets 0.6 - 2. Direct Disbursements for: (a) Riverlift and deep tubewell irrigation schemes 6.8 9.7 (b) Equipment for the Water Board and Engineering Directorate 1.0 0.7 (c) Improvement of agricultural extension 2.2 1.9 (d) Technical assistance and training 0.7 0.1 3. Unallocated 8.3 - Total 34.0 34.0 /a As of July 15, 1981, the date of final disbursement from this Credit. /b The appraisal allocation was US$1.0 million for MIC deep tubewells (US$60,792 actual) and US$1.0 million for Irrigation Groups deep tube- wells (US$122,951 actual). INDIA PROJECT PERFORMANCE AUDIT REPORT West Bengal Agricultural Development (Credit 541-IN) CUMULATIVE PERCENT DISBURSED 100 - 90 - .0 80-- LOAN DISBURSEMENT PROFILE / 605- '/ * .* 70 - / / /** 000 60- 000 . 40- 0 /00 00000 / / .** 30 - 00 20- 0/ 0 ---- 115 PROJECTS, ALL SECTORS, INDIA ................. 64 AGRICULTURAL PROJECTS, INDIA 000 ** --- CREDIT 541-IN - ACTUAL 10- CREDIT 541-IN - APPRAISAL ESTIMATE 1 2 3 4 5 6 7 8 9 YEARS World Bank-24370 - 17 Comments Received from thi Borrower Annex I MOST IMMEDIATE Page 1 BY SPECIAL MESSENGZR. D.O.No.3(35)/84 FB.VII A.K.Pal Under Secretary. Tel.No.376420 Ministry F . - Ji JFund 8ia.-Vil the 26th,December,1984 RECO. AG. DiV. Dear Mr.Grimshaw, . })3 ..,'1985 Mr.Yukinori Watanable,Director, Operations Evaluation Department,World Bank Washington has, vide hisletter dated 25.9.84, sought our comments on the Project Performance Audit Report of West Bangal Agricultural Development Project (Credit No.541-IN). 2. I am forwarding herewith our comments on the PPAR for onward tranmission to Mr.Yukinori Watanbe, WaShington with a request to incorporate these comments while finalising the PPAR. With regards, Your since ly, (A.K.Pal) MR.RICHARD G. 1RIMSHAW CHIEF,AlRICULTURE DIVISION, RESIDENT MI3SION OF THE WORLD BANK IN INDIA, 21, JORBAGH, NEW D7,LHI-110003. -LB- Annex I Page 2 O iMTS ON POINT RLISD BY TI. OPM1 UN 9VA11HOI DV.UALVI21T (OD) IN 1TlR Pl1W0JCT PTRLCA1 IUM T I1ORT (PFAR) ON 213 UST BITNGA.L GiLCUL iCRAL DIVIWIlf r xwJ.CT ( CR. 541 - II } Point RAised In PPAR _Ca&ina 1. Ftilure to ftully re-ordanise (1) the Objictive of ths Project :iaa bnon th,s extvimlon nystwn and its inftfective durking esa.intiAl.ly to pruvlio vilnor irrlip tion l-dine to under utilisation of investm,nt mde In infrstruotur4 for v.jdl tu tarjitai have M4inor Irri iption.1r~bo ~aqd tejrJ~t~ nffirly binn rapavd. lhn projgot.,has Lve3n renewe-d imapetuu to study and sirv,y Sbt'3 L rounkåtir rnsource3 and its cconomic uug vil enoumt.ine involvnm.snt of NådARD. (ii) Undir this Project (Cr. 541,-IN), th-e component of pxtension recnived irtdeLluate attention and,vas followed by anoliar &ext#§nsion and res,grdt project (rr. 69G-IN) lhe impl-nnation of Måich ias of course problenm.tic until 1982 beccus3 of lsgil1 issues involveL. This delayed effectdve implentmtion' by about 2½ý yars, and involved fr,s, recruitmnnt of a mmbir of field qextetnsion wor.C9r3 idi posed a fori.able problon beus i of proc3duzel delym concqrnin-; both rncruit- ment and troining. Tii stuff position undar Cr. 69(0-In has how-cv#r bayin aftNwing eigns of inprov-cvrnts. (iii) It is adnitt3d lhat he T. & V. ystsm could not bo fu1y i:pli-nIntvd in all jas Districts of te st.tn so far dug to th9 rluctancn of th, nrs..skil ectn- sion mork er3 to com, und-ir % i ;t? cI .119S- Annex I Page 3 and the pendeny of several Court assen. to-P. Ss Tven then %orn Than 1900 posts of t4rado (V.SiX%) and 335 posts of A.D.Os (A.LOG) havo since o1en orvatecVilled up. -pch Subdivision has been provided with 5 S.4.S. and the fortni.gitty and monthl,y taining seasiona are being reGularly held. 9fforts arq beina mde to ensure that th s full complement of extension vorkers at all levrls is posted at thn earliat possible by resolving all the pqnling issuea. InspLto of tue deficienoies pointed out above, thea T & V. syste of Agri,-et::u'nion has talen fins roota in the Statn and ta Govt. arv D11ly coundttaed to its Impleimentntion in ths entire State. Bie system has already given a Cpod aoount of itself in Coping it t4O disastrJUs drouftt situationa of 1981,-82 and 82-83, Iaen the teinology of agricaltuzal production under moisture stress &y successftlly t.ansmitta4 adopted.. Fertiliser consumption has also risn very subetantially and plant protect&on measures strengthened. Tie incriise of RV coverage; t2s introduotion of non-tzaditional cros in dry land areas and ths better naige- mnt of water in the Comrand Are's of mlinor IrriLtion -orks ar.9 also largeIy dun to t-o extensive extesion wok being done undnr Iha 1& V systamn. minor Irrigition &V y tm 2, Iimdequate struct lring (iv) Ihe 14.I. C. has since been g rqstrictured of Vae Minor Irrifftion Corpozatioh (m.I.C.) and has improved its perfonrnce conlidezu*y. All sdbawnes are being propnrly monitored and - 20 - Page4 and controled by the 9.I.C. and effortz any bing cade to pall up tae arrears of accounts. 3. DisParity in vater (v) V&ter chargås levied by te X.I. C. and ke Agri-ngMin"xing Dte. (AD) have since been broiat at pr at Es 5/- per acre-incå. .iWs åas removed a lot of difficulties rerding realisation o3f uater ru tes and has also incressed tg revlnae of trg A,D, as a vast najority of to insti.llations belonc to the Dtc. (53W0 a,ainst only 400 of te 14.LC. 4. IXck of prop-er water (vi) it tae cocnd lel, a bett-r ceh-Ysion and maagement. in te com and ar~s of k.I. Instaiations. sense of mta-al co-opv-ati.on among t49 beneficiaries re3rding Ile arrunge.int of dstribution and sarinj of vater vas olserved in te prozrqssivc district of ioogily, luile in the district of Ilest Dimpar, frequent disin,tes among to ben-a. ficitrins regLrdJng tåese ariUng-ieilt3 led to prolongedi Jsruption of opera tion of ts ?5iUni ts. (vii) -::2:rhasis has now been jivai to better antor uayt.n.ant pructics andl botä te M.I.C. andS,)t.D. jave inta-uced te "rotItiol" syster oZ irri.- tkan in soni of tieir in;;tallations thni tiis ii proposed to bg in:r.-psed to cove: all insta-llation in tig shortest time possible. 5. DIe triancial. rte of return (viii) Apart from VåriationS in soil type on Minor IrrioLtion lnvestnents MaS estinted to zange from vaiich uould influqnce croppIn;• piattern, Ieos nkan ly to over 50:4. vý -1 1 -tý,, t.,a oerio t 21Anne I page 5 II. SImilarly, Ihe econotc zate of differential performnc of the returman estlAted(in tue PCR) in ihe zange of 4% to over 50 A udit asees were 'he follaming - does not question lhe genewal validity of taese scaemes, but would have (a) 7&e dispazat^ levels of agricultunal welcomed a more complete exp2aiMtion of tie extreme flactuations development in the districts of among Uae sample sdeas aL lsed, Ihe soil type as the only explmatory Dictor is Llooalv and Vest Dirjpar accounted not entirely convinting in via of the overl as p6cts affecting investa-nt for this ]henomenon. ho aoojlly l district beirg locatd near CL.ztta qnjoy. ed all tae advantages of urbfnisation, .especially better market4nE: theilitie-s and hi!ter prices for pro&ice. Aloreover, namy of ghe beneficiaries in tie comnds of the project Units in this 3ist-rict arg found to b already familiar wita irriLatrd anricultuare before tie project was laund&ed. Cons3quently, they could nake mor-% effcient -sg of water and zapidly tzansform their cropping pattgrn in Avour of hUi value crops. On the other hand, in the "cad.ard district of U-ist Dirujpur, althougi the wat,3r was supplied at tie sauna cost as in HooLly, tu fknejjbeneficiLriPs thiled to adopt a remneiu tivg cropin: pattnrn, piina- ily duxe to tiq abs -n-3 of "g-iN I factorso. .(b) h n utilisation of proj nct deep tub.wells in thess districts was pr ,Aunbly affected by th n prnvhlince of lower us ter zatis under tin non- prject units. 1hou,-h sud- a differ- -22- A-ex P~g 6 a greater imaet on the attitudes of thq oeeficiries in tåe agricultnially adnard istricts of !lept DiMjpur and I*Lld%. TLs uater lates leviad by tan MIC and te ALi--:Jineqring Dt'. (AgD) hav-i been bromgit an par at Ps S/- per acr9 ini and the situation ay, tierefore, bg cpctd to iaprove. Agro -Service C-ntres. 6. Poor finctioning of agm- (ix) ihg conatraints nentioned at paraa 3.09 and s,rice cntreO. 5.10 of tk-i P.C.R. ar-i Ull t2:an. Äoever tär issue =u3t b- senn in its prop-r pirspictiv. A$Cs situatld in on.rrigte&-aono-cropped areas cannot bg as successful as In irrigpte4/ mlti-crupped argas. Sinc only about 30% of the gi-os cropped area of tue Statt ik under irrijtion, only a limit.d nmb-ir of ASCs siim.ted in irrigitqd ar~s could becorte viable. -ven priwr to te World Batk Pmoject ( Cr. 541-IN) a Jargo rumbr of ASCS nad been established and r.any of MIem are stilU functioning succesaftll., lher-3~.. thus, appers to be notnilng conceptually vronL about establsfmqnt of ASCS - Only the locations /staff n3ed to be vary ,ell selected. 7. n l '-rror. (x) Apart from thq points abova, ticr. arc Sume factual qrrors, viz.: a) PPpRP-12 para 23 - 1 tar(qVactual iara uni-r A.k.D. should b. Rs 96/- per tcr4 and not .9s 76/- as aplmting in te PP.M. -23- .3- Annex I Page 7 562 DTJs Were improved under the Project - In thet 1here s no such itsa under the Project. Hovever: 382 on siorqofrr aore RIZ installations wore ccapleted under tie ' Project as mentioned at PCR P. 10/pxre 3.14. Agricultural mirketing 8. Non-fhctioning of any of (xi) fhe State Govt. broadly a1rqe Vit, the3 the agriaulturLl markets I establi*hed under ihe Project. views expressed in 1he PP*rarding the reasons for non-fnotioning of the markets, Partial opezation6 have since started in the narke.ts 'it he cath aincsm?nt of price support opezations by the Jut, Corportion of India (JC1). 9. Under utilisation of (xii) ohe State Govk broadly agree via mricet cilities and non- thlfilU ent of objectives. the views expressed in tae Report but feel tAt the concLusion drawn by the OVD I that this component f1bred very badly is zather hasty. An in-dep1h study must be conducted in the post projrtct pqriod by an IBEA. independ-nt body and nei dirnctions gLven for improvaagnt in the perfonance of hte markets and attainmq=nt of taier objqctiv,s. Two more azkets at silliGuri and Dirzate, constructsd vitaout aid from tae W1orld Bank hav- also started functioninz in the Sta t3 a nd a feu more are in va riou s t ,a3 of imple-entation. � �} � л - 25 - Anne 11 NALMORAL BANK FOR W*W P AND RURAL Comments Received from NABARD DO.No.10-BAPD-11-19 /PM)-64/84-85 A w*wMMqP 29 November 1984 MAPUGMG DERBCTM 08 Agrahayana. 1906 (S) Dear Mr. Watanst e, Project Performance AudIt Report on, India Vest Bengal Agr:Lc.vltural Development Proje t (Credit - 541 - IN) Please refer to your letter dated September 25, 1984 attaching a co,?y of the first draft of the captioned report f or our views and comments. do have examined the report at our and and our comments on certain observations made in the report are given in the note enclosed. Since the Crovernment of West Beagal has also been simultaneously requested to offer their comments, we presume that they win do so In respect of those aspects of project implementation with wkich they were closely associated. With regards, Yours :in e y Fr 1 Sant Dass Mr. Yukino3rl iatumbe Operation Braluation Department World Ran , 1818 H. Street, N.V. Washington D.C. 20433 U.S.A. Encla : 2 mn. TM*M4. M4.1mw ri*-Pz. ir " *zmft, *IZM;M st 655Z 114 WcWt-40DOIS Teleamm: Pounins Chambers. Dr. Annie Bessint Rmd. P. B. 655Z Worli. Bowbsy4DD 0I& Mon TMI63-6 Telex: Wepbone: I It 2810 A RDC IN - 26- Annex I PaBe 2 NATIONAL BAME PCR AGRICULTURE & RURAL DEVELOPMBf? Comments on Project Performance Audit Report on ladia West Bengal Agricultural Develoosent Pro-eot ( ICreit 541 - IN) Te Operations and Bvaluation Department of the World Bank has pointed out a number of basic deficiencies in the implementation of the West Bengal Agricultural Development Project (541 - IN) in the Project Performance Audit Report (PPAR) prepared by it on the basis of the Project Completion Report (PCR). Our comments in respect of certain observations made in the report are given below :- 1. Though the newly created Minor Irrigation Corporation (RIC) was found to have organisational, managerial.and functional difficulties at appraisal, the provisions made for strengthening the organisation were rather modest. During implementations, staffing and operations fell behind schedule and serious problems of management and accounting could lot be resolved. Moreover, NIC clearly lagged in the introduction of an effective water management system. (Page 9-10) The above observation is based on the findings of the PCR. It is, however, understood that subsequent to the' visit of the GED Mission, NIC has made certain improvements in its orgahisational, managerial and functional spheres. Since the Government of Vest Bengal has been requested by the Government of India to offer their comments on the PPAR, we presume that Government of #est Bengal will comment on this point . 2. (a) Under the West Bengal Agreement, the Minor Irrigation Corporation was to have implemented by December 31, 1975 a programme of water charges to recover the operations and kaintenance coats of its irrigation facilities. Furthermore, Government of West Bengal was to have undertaken studies aimed at increasing water charges sufficiently on a State-wide basis to recover a portion of capital costs. Throughout the implementation period, supervision mission fond action on this coifenant unsatisfactory. The situation was still not resolved at the time of the OD mission and there are indications that the Project was adversely affected by it. Since it was politically unacceptable to collect cost-covering water charges, MIC was unable to generate sufficient revenues for meeting its debt obligations and the State had to provide extensive subsidies. One of the Government's main objective, therefore, has not been met, as budgetary funds continue to flow into minor irrigation development.(Page 11) -27- Anne II. Page 3 (b) There does not exist a uniform system Of water charges& Parmers paid different rat eas depending on the ownership of the facility from which they are drawing watery (Page 11)v (a) Though the actual water ratW-Tixed by the State Government was admittedly below the economic water rate, the State Government nevertheless seems to have dedided as a matter of policy to continue to subsidise the difference between the economic water rate and the actual water rate rather than directly collecting the economic water rate from the farmer-beneficiaries. However, it is presumed that the Government of Vest Bengal would also comment on this observation. (b) f9 is mderstood that the water rates have been made uniform since 1982-83 bynotifioation of the State Government. The current water rate it f.5/- per acre inch of water in the commands of all 3Vs in West Bengal, irrespective of ownership of the facility. 3. The financial rate of im return oft Minor Irrigation investments was estimated to range from less tban 1% to over 50%. Similarly, the economic rate of return was estimated (in the PCR) in the range of 4% to over 50%. Audit does not question the general validity of these schemes, but would have welcomed a more complete explanation of the extreme fluctuation among the sample sOheas analysed. The soil type as the only explanatory factor is not entirely convincing in view of the overall aspects affecting investment viability, (Page 13). Apart from variations in soil type which would influence cropping pattern, yield rates, etc., the other important fators which contributed to the differential performance of the schemes were the followings (i) The disparate levels of agricultural development in the distriots of Hooghly and Vest Dinajpur accounted for this phenomenon. The Hooghly district beAng located near Calcutta enjoyed all the advantages of urbanisation, especially better marketing facilities and higher prices for produce. Moreover, many of the beneficiaries in the commands of the Project Unite in th"s district were found to be already familiar with irrigated agriculture before the Project was launched. -28 - Annex II Fage 4 Consequently, they could make more efficient use of water and rapidly tranaform their cropping pattern in favour of high value crops. On the other hand, ,dza the backward district of West Dinajpur, although the water was Supplied at the same coat as in Hooghly, the former-beneficiaries failed to adopt a remunerative cropping pattern, primarIly due to the absence of "growth factors". (ii) The utilisation of project deep tubewella in these districts was presumably affected by the prevalence of lover water ratea under the non-project units. Though such a differential water rate obtained in all the project districts, the difference had a greater impact on the attitudes of the beneficiaries in the agriculturally backward diutricts of West Dinajpur and Malda. The water rates are, however, understood to have been made uniform recently by the State Government and the situation may, thereforer be expected to improve. (iii) At the command level, a better chhesion and sense of mutual co-operation among the berneficiaries regarding the arrangement of distribution and sharing of water was observed in the progressive district of Hioghly, while in the dietrict of West Dinajpur, frequent disputes among the beneficiazLes regarding these arrangements led to -. prolonged disruption of operation of these units. *n. - 29 - INDIA WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CR. 541-IN) PROJECT COMPLETION REPORT July 2, 1984 South Asia Projects Department Agro-Industries and Credit Division 他 騙 O 奮 31 - INDIA PROJECT COMPLETION REPORT WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CR. 41-IN) I. SECTOR BACKGROUND 1.01 Although the State of West Bengal has one of the largest industrial bases in India, agriculture provided about 50% of the State income and 60% of employment. At the time of project inception the State of West Bengal ranked fourth in Indian foodgrain production (first in rice) and accounted for 60Z of the country's jute and 25% of its tea production (India's two most valu- able agricultural exports). Food supply decreased substantially in 1974, due to floods and rain failures. Some 15 million people reportedly faced severe food shortages. In the face of this situation, the State was quite determined to increase food production. 1.02 Between 1967 and 1972, grain production had grown at 6% a year, while fertilizer consumption increased at 20Z a year, compared with 13Z for all India. The growth coincided with West Bengal's drive to expand minor irriga- tion and introduce high yielding (HYV) rice and wheat varieties. Increased grain production cam mainly from irrigated and Rabi crops, wbile rainfed crop production remained static. During 1973 and 1974 both rainfed and irrigated production fell because of unfavorable weather, shortage of power and lack of fertilizer, and a shortage of wheat seed. It was clear that rainfed production was likely to remain static and the quickest-means to increase food production was thought to be an accelerated exploitation of the State's ample minor irrigation potential. 1.03 West Bengal has approximately 5.6 million ha of cultivated area. In 1973, some 1.86 million ba, or just over 26Z of the area sown, was irrigated. Of this, 0.63 million ba was covered by GOWB controlled canal irrigation, 0.83 million ha by privately owned tanks, canal and traditional irrigation facilities, and 0.40 million ha by deep and shallow tubewells and riverlift irrigation, only the latter of which provided year round irrigation - the remaining 80% oil the irrigated area received water mainly to supplement monsoon rainfall. In 1973, there were about 2,250 DTWs, 2,050 RLIs and 61,000 STWs all state owned except for about privately owned 57,000 STW. At that time., emphasis was on the installation of as many minor irrigation facilities as possible. As a result, only 700 RLIs were substantially com- pleted with irrigation coverage of only 20% of the feasible command area from RLIs, and less than 50% for DTWs. 1.04 GOWB's policy to develop its abundant water resources had resulted in impressive gains in grain production and rural incomes. The greatest poten- tial for further irrigation expansion lay in the State's rich groundwater resources, which received ample recharge. Shallow groundwater levels in most - 32 - alluvial areas made them suitable for STW development. Expansion of minor irrigation, provision of inputs and improved marketing therefore continued to be the first priority in the State's development plans. However, instead of further large scale expansion of DTs and RLIs, the project was designed for the purpose of completing existing schemes and improving their utilization. The project concept was in consonance with GOWB's plan to expana agricultural production and to strengthen existing institutions. II. IDENTIFICATION, PREPARATION AND APPRAISAL 2.01 In 1972, the Government of India (GOI) requested an IDA Credit for an agricultural development project in West Bengal. In December 1973, the Association appraised a project providing for 18,000 STW, 1,000 DTW and 400 RLI. But during processing, aside from STW, the project was reduced, to a pilot scheme of 100 DTWs and 40 RLIs because GOI would not agree to interna- tional competitive bidding for well drilling and procurement of components and apparently, because there was some hesitancy about the efficacy-of DTW and RLI. Shortly before the project was to be submitted to the Loan Commit- tee, GOI requested a halt and asked IDA to review the project and try to expand the deepvell and riverlift components to levels closer to that of the initial request in 1973. 2.02 The findings of a reappraisal mission in September/October 1974 were as follows: (a) Existing DTWs were underutilized by 33% to 50% due to technical and management problems of water distribution, inadequate water distribution systems, the system of water charges and, but lukewarm interest in irrigation; (b) The RLI situation was unsatisfactory; of 2,000 existing installations only 100 had been fully completed, a further 600 were about 75%-90% complete and the remaining 1,300 required additional capital investment, particularly in water distribu- tion systems, before they could service a reasonable command area. Furthermore, the standard RLI design needed to be improved. The mission therefore recommended that the basis of the project should be: (i) that no new RLI be installed until the existing ones have been completed; and (ii) that a detailed technical study should precede investment in RLI completions; (c) although GOWB had increased water charges considerably, the charges represented only 2% to 5% of the annual operating cost of a DTW. This implied at least a subsidy of 95% to the Minor Irrigation Corporation (MIC-), which would operate the facilities, if current charges were maintained; and - 33 - (d) as MIC existed at that time, staffing and management difficulties would likely prevent it from handling a very large program. 2.03 In view of this, the mission concluded that the best way to increase crop production would be through full utilization of existing DTWs and RLIs. The project would include necessary equipment and technical assistance, and improved extension services. The mission proposed the completion of 600 riverlift installations and 300 deep tubesells - 200 for irrigation coopera- tives and 100 for MIC - to which GOI and West Bengal agreed. The reappraisal reviewed the ICB issue, finding that with the reduced numbers and since not new facilities, but completion of existing ones were entailed, ICB was not necessary. 2.04 Questions could be raised whether the findings during the reappraisal could have been ascertained, or were available, at the 1973 appraisal, and if so, whether the final proposals could have been made then, saving about a year's processing time. It is also possible that GOI and West Bengal ini- tially saw the project as an expansion of facilities visualizing that comple- tion of existing facilities would be a concurrent endeavor, foreseen to be carried out under other arrangements. 2.05 The Credit was approved by the Board on April 22, 1975, signed on April 28, 1975, and became effective on July 31, 1975. Project Description 2.06 The project covered six districts in West Bengal- Hoogly, Burdwan, Nadia, Murshidabad, Malda and West Dinajpur, and comprised the following: (a) Loans to farmers and groups of farmers through participating Banks for: (i) construction and equipping of about 18,000 S'W, including land development and field channels; (ii) construction and equipping of about 200 DTW for irrigation farmer groups, and about 100 DTW for MIC, including land development and field channels; (iii) construction of facilities, and provision of equipment for three markets located at Samsi, Korimpur and Katwa (para 3.11); and (iv) establishment of about 200 agro-service centers (para 3.07); (b) Irrigation infrastructure and services for: -34- (i) completion the State of about 600 partly constructed BLIs and DT5Ws schemes, including land development and field channels; (ii) equipment and supplies for the establishment of 18,000 shallow tubewells, including technical ass"-'stance and scholarships for staff; and (iii) employment of additional staff, equipment and materials, and staff training for improvement of extension services of the Department of Agriculture. Cost and Financing 2.07 Project cost was estimated at US$67.0 N of which foreign exchange US$7.3, or about 11% of total cost. Cost estimates were based on October 1974 prices, and included price contingencies aggregating 25%; given the open-ended nature of the project, physical contingency provision was not necessary. Details of estimated costs were as follows: Project Cost -(US$ Million)- Total Foreign Total Minor Irrigation Shallow Tubewells 19.0 3.4 22.4 Deep Tubevells 5.2 0.5 5.7 Riverlift Completion 12.3 - 12.3 Other Components Agro Service Centers 1.7 0.3 2.0 Market Development 1.1 - 1.1 Technical Assistance 5.5 0.9 6.4 Base Cost 44.8 5.1 49.9 Price Cortingencies 14.9 2.2 17.1 Project Cost 59.7 7.3 67.0 2.08 The US$34.0 million IDA Credit covered the foreign exchange cost and about 45% of local costs, or 51% of total project cost. The balance of the funds, US$33 million equivalent, was provided as follows: - 35*- US$. M Ultimate borrowers 2.6 Lending Banks 4.7 Agricultural Refinancing Corporation 12.1 GOWB 13.6 Total 33.0 GOI was to onlend about US$21.0 million of the Credit to ARC for furtner onlending to participating banks to finance STWs, DTs, agro-service centers and market development, and on-lend the remainder of the Credit to GOWB for ELI completions, technical assistance and extension services. 2.09 It was a condition of disbursements that: (a) for riverlift instal- lations, technical specifications had been mutually agreed between GOWB and IDA, (b) for deep tubewell schemes, arrangements for staffing and financing of MIC had been made, and (c) for market development, the Marketing Board had been established. Management and Organization 2.10 Project implementation involved the following agencies: - Agricultural Refinance Corporation (ARC) J - Was responsible for refinancing loans made by participating banks to farmers, to MIC for shallow and deepwells, and for markets. ARC ensured that criteria under the various schemes were observed. - Participating Banks - Commercial banks provided loans to individuals or groups of farmers. - Minor Irrigation Corporation (MIC) - Its prime objective was to construct, operate and maintain state-owned production of minor irrigation facilities, and to acquire similar existing facilities; a relatively new organization, it was made responsible for the construction, management and operation of some 100 deep tubewells. It was also responsible for collecting water charges. - The Engineering Directorate of the Department of Agriculture - Under the project it would be responsible for completion of the RLIs, improving maintenance facilities and providing services for MIC; jJ Later renamed the Agricultural Refinance and Development Corporation (ARDC), which is now known as the National Bank for Agriculture and Rural Redevelopment (NABARD); for simplicity, the acronym "ARC" is used throughout this report. - 36 - it would continue to operate and maintain most DTWs and RLIs during project implementation. - State Water Board (SWB) - Functions were to study and assess surface water and groundwater resources and their utilization; it was also to provide standards for spacing between wells and other technical criteria employed by the banks when considering loans. 2.11 A State Level Coordinating Committee, whose membership included the appropriate government departments, ARC, cooperatives, and other parties concered, was responsible for coordinating the project. Goals and Tariets 2.12 It was envisaged that an area of 125,000 ha would be irrigated, increasing production by an estimated 145,000 tons of rice, 165,000 tons of wheat and 130,000 tons of potatoes. The additional wheat and potatoes, and 90% of the rice, would come from Rabi cultivation. j Improved agricultural extension was expected to yield 70,000 tons of foodgrains due to better utilization of irrigation facilities. An increase in production of 20,000 tons of rice and 5,000 tons of jute resulting from irrigation was assumed from Kharif cultivation. 2/ It was expected that maximum production would be obtained from the seventh year after commencement of project implementation. 2.13 The incremental farm labor requirement of the project was projected to be about 25 million man-days a year (100,000 man-years at 250 days of labor per year), most of which would be required during the Rabi, the period of labor surplus in the rural areas. Small tubewells would be owned mainly by farmers with holdings of around 2 ha, but because of land fragmentation they would need to sell water to neighbors to irrigate their holdings. The main beneficiaries from deep wells and riverlift irrigation would be the poorest farmers, including sharecroppers, since 80% of farmers in existing irrigation schemes irrigated less than 0.5 ha each. III. PROJECT IMPLEMENTATION 3.01 Project implementation suffered delays due to poor coordination among project agencies including insufficient support by some CBs, failure to appoint agency beads for SWB and MIC, overly conservative norms adopted by SWB for working out groundwater recharge from rainfall resulting in the j Dry season, November - March/April. 2f Monsoon season, June - October. - 37 - conclusion that much of the project area was considered overexploited, dif- ficulty in organizing farmers' groups, and prolonged litigation regarding the market scheme. Because of this there were no disbursements the first year. These problems are discussed below. Physical Progress 3.02 The physical progress during implementation was as follows: Target 1975/76 1976/77 1977/78 1978/79 1979180 1980/81 Total Shallow Tubevell 18,000 - 9,893 13,658 18,425 10,330 3,509 55,815 Deep Tubewell MIC 100 - 83 30 23 34 107 277 Farmers' groups 200 - - 11 - 5 7 23 Ag. Service Centers 200 - 39 17 2 4 2 64 Markets 3 - - - - - 1 1 Riverlift Irrigation 600 - 148 111 194 35 58 546 RLI Improvement 34 34 NA NA NA 362 Shallow Tubewells 3.03 Notwithstanding the delay, considerable progress was made the second year sinking STWs. By the third year, the appraisal target of 18,000 STW had been exceeded by some 5,500. Finally, nearly 56,000 (three times the target) were sunk. Long delay of the State Electricity Board (SEB) in providing power for pumps lead to a preeminence of diesel pumpsets - of the 56,000, 78Z were diesel powered and 22% electrically powered, against appraisal estimates of 75% electric, 25% diesel. 3.04 The reason for the much greater number of STW financed was: (i) that the actual groundwater level was higher than assumed and the cost of sinking the wells therefore less, and actual cost of diesel and electric powered engines less than appraised; and (ii) it had become obvious that because of the lower expected disbursements for other components of the project the Credit would not be fully expended without a substantial increase in the STW target. In 1979, therefore the STW component was enlarged to cover the entire State and an additional US$8.3 million of the Credit allocated to it. In all US$21.4 million, or 60% of the Credit, was expended on STW. By this time the objection to financing STWs throughout the entire state had been removed -- the interdiction on the use of additional groundwater resources in certain areas was lifted as the result of the all-India groundwater review. Deep Tubevells 3.05 Progress proceeded slowly for two reasons: the SWB's overly conser- vative norms for groundwater resources (above) resulted in large parts of the - 38 - project being declared as overexploited areas, and participating banks found it extremely difficult to get farmer groups together, such groups comprising between 80-140 farmers. By the third project year, MIC had completed 100 DTs. In 1979, GOWB requested MIC to increase the DTW progran to 250 wells, although there was no evidence that MIC was capable of satisfactorily implementing the additional program. Nevertheless, IDA eventually agreed on the assurance that GOWB would provide adequate funding for MIC, and MIC update its accounts. 3.06 The appraisal target of 300 DTWs was achieved: of the 200 allocated for farmer groups, only 23 were provided, and of the 100 allocated MIC, it finished up owning 167, the balance of 110 going to the Comprehensive Agricultural Development Corporation. Of particular significance, of the two US$1.0 million allocations, one for MIC, and one to farmer groups, only US$61,000 and US$123,000, respectively, were disbursed. The reason was that participating banks through which disbursements were to be made, financed the initial costs of the wells. Having done so, and having ample funds, they found it simpler to finance directly the remaining costs rather than refinance through the Credit. Consequently, but a small number of DTW units was financed by Association funds. Agro Service Centers (ASC) 3.07 These centers were intended to sell inputs, provide customer services and technical assistance to farmers in the project area, and support the project investments by improving STW maintenance facilities. Each ASC was to be provided with financing of up to Rs 120,000 (US$15,000) for purchase of machinery and equipment and for working capital. Two hundred ASC were planned, operated by unemployed agriculture graduates trained by the West Bengal Agro-Industries Corporation (AIC). 3.08 During Board presentation doubts were expressed about the ASC, in particular about how successful agricultural graduates would be in running them. Only 64 of the target of 200 ASC were established. Even so, many of these centers subsequently closed, and at the end of the implementation period only 38 were left. In fact, no disbursements for ASC were made under the Credit. The participating banks financing them submitted negligible claims to ARC for refinancing, and since the repayment period of these loans was well advanced, ARC could not provide refinance for the full sum of the loan amounts. 3.09 The main constraints to the implementation of ASC, was that recruit- ment of suitably qualified candidates from among unemployed agricultural graduates was difficult, and there was a lack of demand for ASC as well. Bank financing was another constraint since unemployed graduates did not have the means, no collateral, to qualify for loans, and, moreover, the banks assumed an unrealistically low cost per ASC, their loans being much too small to finance the required farm equipment under the scheme. Most of the new ASC did not provide such services as custom hire of machinery, maintenance and - 39 - repairs of machinery and tractor hire, but mainly provided fertilizers, a function which might better have been performed by cooperative societies. To further promote the establishment of ASC, IDA agreed to finance the purchase of tractors under the scheme. Nonetheless, progress continued to be slow, and only a few tractors were purchased. 3.10 A study was conducted by ARC on 13 ASC, of which nine had closed and three were on the verge of closing, and only one was operating satisfac- torily. The findings were inter alia that there was a predominance of non-technical managers of ASC, instead of agricultural graduates, only three of whom had received training from AIC, that average bank financing for each ASC amounted to only Rs 18,750 (US$2,300) versus the amount of Rs 120,000 (US$15,000) envisaged at appraisal, and that unemployed graduates found it difficult to make the 5% down payment of about Rs 5,000 (US$600) on the investment cost of the center. Markets 3.11 To eliminate marketing malpractices, West Bengal passed the Agricul- tural Produce and Marketing Regulations Act, under which regulated markets, administered by Regulated Market Committees (RMC), were established as wholesale markets. RMC had jurisdiction to oversee and regulate marketing of both village and wholesale markets, to provide improved facilities for recovering, storing and selling produce, and to introduce and monitor fair trading practices. It was expected that development of regulated markets, by RMC, would increase farmer incentives to augment crop production by improving market facilities, stabilize product prices and reduce marketing costs. Three markets, at Samsi, Karimpur and Katwa, were to be developed, the project financing the various market facilities, amenities, and equipment required with the State providing land. 3.12 The market yard component was delayed by the litigation of traders over land purchases and other aspects of market regulations, and an alterna- tive site to Karimpur had to be selected at Bethuadahari. This was in turn compounded by the cumbersome procurement procedures of the contractor and by shortages of cement and steel. Only the market site at Samsi was completed. No disbursements were made for it as, paradoxically, there were insufficient funds remaining in the Credit so late in the project period. Riverlift Irrigation (RLI) 3.13 Command areas were expected to vary from 70 to 100 ha. Completion of the 600 riverlift irrigation facilities involved construction of underground piped distribution systems, and water intake and shore installations. Because existing designs and technical specifications were considered inade- quate, disbursements on this component were conditioned on agreement between GOWB and IDA on suitable technical specifications. - 40 - 3.14 GOWB jJ took nearly two and a half years to complete the field study report of the technical criteria. Adoption of the technical criteria was subject to the results of a pilot demonstration involving their application to 21 new and 14 completed schemes. Nevertheless, in the end, of the target of finishing 600 units, 546 units were completed with water transmission arrangements, and 362 units with onshore/offshore installations involving pumping facilities were finished. 3.15 For better utilization of riverlift and deep tubewell facilities the State introduced an "optimization program" which envisaged the use of irriga- tion water by employing a rotational irrigation system within the command area of a particular unit. For this purpose, pucca field channels had to be constructed, and to control the flow of water, valves were to be fixed. In many cases the distribution system of the units required redesigning to take into account field conditions such as command area and cropping system. Financial Operations 3.16 ARC, the principal implementing agency for the project and primarily responsible for providing refinance to participating banks, did so under eligibility criteria based on recovery performance. The refinancing eligibility criteria for Land Development Banks was as follows: % of Overdues to Demand Refinancing (Z) 0 - 25 unrestricted 26 - 35 80 36 - 45 70 46 - 55 60 56 - 60 50 61 - 100 nil To enable a number of ineligible LDBs, with overdues in excess of 60%, to participate it was agreed to relax the criteria. The new norms allowed GOWB to contribute 10% to their equity, which enabled the LDB to participate with overdues up to 70%; those with overdues exceeding 70% were allowed a lending program of 25% of the preceding year. Total lending programs of banks and ARC disbursements are shown in Annex 1. 3.17 Land development banking in West Bengal consisted of the Central Cooperative Land Development Bank, the apex body, the Cooperative Land Development Banks, and 24 Primary Land Development Banks operating at the subdivision district level. Annex 2 shows the demand and recovery position of the Central Cooperative Bank. The Primary Land Development Banks suffered 1/ The study was made by the Agricultural Engineering Directorate of the Department of Agriculture of West Bengal. - 41 - from deficient management, a staff shortage, and but fair recoveries of overdues until in 1980-81 they grew very poor, necessitating contributions from time to time of additional equity capital by the State to enable their continued participation in the project. Their lower collections resulted from the writing-off by some State Governments when they were in power, of the debts owed by farmers to cooperatives and of agricultural loans advanced directly by the State, and to agitation by political groups who demanded the remission of agricultural loans advanced by cooperative agricultural credit institutions. Overdues of Primary Land Development Banks were 61% in 1971/72, 23% in 1975/76 and 37% in 1980; their recovery position is given in Annex 3. Lendini Terms 3.18 Loans to the ultimate borrowers for minor irrigation were at an interest rate of 10.5%. Small farmers contributed 5% of the cost, while farmers with predevelopment return between Rs 2,000 and Rs 3,500, and the Minor Irrigation Corporation, contributed a minimum of 10%; other farmers put up 10% for shallow and 15% for deep tubewells. The repayment period for small farmers was 7 years for shallow and 15 years for deep vells; for other farmers, 7 years and 9 years, respectively; for MIC 10 years, and for irriga- tiou groups, 15 years. The interest rate was 11% for other lending. The Regulated Market Committees and borrowers for agro-service centers con- tributed 5% of investment cost. Agro-service loans were for a period of 7 years and those for RMC, 14 years. 3.19 Although initially some commercial banks provided only lukewarm support, eventually, under ARC's urging, they financed a greater portion of minor irrigation investments than did Land Development Banks under the project. Of the total refinancing of Rs 278 million (US$34.0 million) drawn from ARC, they drew Rs 151 million and Land Development Banks drew Rs 127 million. Commercial banks experienced similar problems of recovery to those cited above at the extreme, worse, as their overdues ranged from 51% to 89% in 1978/79 and 49% to 83% in 1979/80. Water Charges 3.20 The Minor Irrigation Corporation, which operated publicly-owned minor irrigation facilities, levied water charges of Rs 9.50 per acre inch, which covered operation and maintenance costs. This was about six times the tariff charged by Government-owned schemes, about Rs 1.60 per acre-inch. Private sales varied from Rs 10 to Rs 20 per acre inch. The different scales of water charges created a serious problem since farmers, not surprisingly, refused to pay higher fees than their neighbors. To counteract this, water charges were to be increased by GOWB to progressively recover operating and maintenance costs under the project. However, lower water charges resulted in annual operating deficits to the State estimated at US$12.0 million. Moreover, the Minor Irrigation Corporation, cooperatives and banks were meeting increased resistance in recovering their own costs or in promoting - 42 - investments through credit. For these reasons, the tariffs were not equal- ized, or even nearly so. Further such public minor irrigation in West Begal should not be supported, therefore, unless the State takes action to correct this anomaly, which is causing such difficulty in the equalization of tariffs. Agriculture Extension 3.21 The extension service was reorganized along the lines of the Training and Visit (T & V) method in conjunction with the project. The State was divided into fifty subdivisional levels, headed by Agricultural Officers who supervised the extension service and extension agents. Village level workers (VLWs), administered by the Community Development Department, could not be engaged for extension services under the T & V system because of legal restrictions, a problem which was overcome later. The Government, therefore, created 1,600 posts of Erishi Prajukti Sahayaks (KPS) staff, equivalent to village level extension workers, for agriculture extension activities at th village level, under supervision of the Agriculture Officers. Posting of Subject Matter Specialists at the sub-divisions level and Agronomists at the district level were intended to provide linkage between research workers and extension agents. The Subject Matter Specialists were trained by researchers and university specialist at monthly meetings on new agricultural technology. In turn, the Subject Matter Specialists trained extension agents and KPS through fortnightly training programs. Each KPS was assigned a number of farm families, schedules of visits being prepared in advance. 3.22 It was obvious that to maintain the momentum of the new system, considerable support, transportation and housing for the new extension staff would continue to be necessary. Accordingly, in 1977, this component was integrated into the West Bengal Extension and Research Project, Cr. 690-IN. Disbursement of funds for this component under Cr. 690-IN was contingent on the funds for it in the project (Cr. 541-IN) becoming fully disbursed. 3.23 Credit 690-IN became effective in August 1979 and is scheduled to be completed by September 1984. Implementation is showing progress in many areas: in the area of staffing, transfer of VLW to the extension service has been overcome and filling of research and extension posts is proceeding satisfactorily and for civil works, disbursements, financial reporting and monitoring and evaluation are all gaining momentum. Farmers are starting to adopt the recommended technology and training is receiving more attention. The proposed National Agricultural Extension Project has been appraised and is designed to recognize and strengthen agriculture extension in the States and the Central Government. Institutional Performance 3.24 (i) The State Level Coordination Committee, responsible for coor- dination of the projection, functioned satisfactorily and was effective in solving implementation problems and providing coordination. (ii) Ta view of - 43 - the staffing and financial constraints of the Minor Irrigation Corporation, satisfactory staffing and financial plans were a condition of disbursement for deep tubewell schemes. Despite its limited resources, mainly state subsidies and irrigation charges, it embarked on a more ambitious deepwell construction program both for its own account, and for farmer groups and others. By project-end, staffing and organization were satisfactory but MIC still faced financial difficulties. (iii) The State Water Board, respon- sible for preparing detailed well spacing and technical standards, suffered from poor administration and organization, and inadequate staff and equip- ment. After a full-time chairman was finally appointed, it began functioning satisfactorily, was able to certify lending schemes and start a program of groundwater surveys. Project Cost 3.25 The actual cost of the project was Rs 486.6 million (US$59.3 million) or 90% of appraisal estimate. This reflected the much lower than expected expenditures on deep tubewells and market development, the negligible expen- diture on agro-service centers, and the much greater expenditure on shallow tubewells. A summary of the estimated and actual project costs are as follows: Project Cost (Rs Millions) Actual as a Appraisal La Actual % of Estimate Minor Irrigation Shallow Tubewell 241 323 134 Deep Tubewell 59 21 36 Riverlift Completion 135 100 81 Other Components Agro Service Center 20 1 5 Market Development 12 5 42 Technical Assistance 69 36 52 Total Project Cost 536 486 90 /a Includes contingencies. -44- 3.26 Disbursements from the Credit proceeds were as follows: Disbursements (US$ Million) Actual as Percentage Estimate Actual of Appraisal (%) Category 1 (a) Shallow Tubewells 11.4 21.4 188 (b) Deep Tubewells 2.0 0.2 10 (c) Agro Service Centers 1.0 - - (d) Markets 0.6 - - Category 2 (a) Riverlift 6.8 9.7 143 (b) Equipment for Water Board 1.0 0.6 60 and Engineering Directorate (c) Extension Services 2.2 2.0 91 (d) Technical Assistance 0.7 0.1 14 Category 3 Unallocated 8.3 - Total 34.0 34.0 100 Shallow tubewells accounted for 60% and riverlift irrigation for 28% of the Credit. Disbursements on deep tubewells, agro-service centers and markets were negligible. However, the figures by themselves can be misleading in their implications. The construction target for deep tubewells was, in fact, reached, but was financed almost entirely by the participating banks without recourse to ARC refinancing (para 3.06). IV. AGRICULTURAL IMPACT 4.01 It was estimated at appraisal that about 200,000 farmers would benefit from the project. The actual number of direct beneficiaries was about 120,000, of which 33,000 were beneficiaries from shallow tubewells, 22,500 from pumpsets, 14,500 from deep tubewells and 50,000 from riverlift irrigation. About 40% of the shallow well beneficiaries sold water to three farmers each, that is, about 40,000 purchasers of water. An ARC survey indicated that an additional 86,000 ha were brought under irrigation under the project as follows: - 45 - ha Shallow tubewells 30,500 Pumpsets 14,600 Deep tubewells 6,000 River-ift Irrigation 21,000 From Sale of Water to Other Farmers 13,900 86,100 This compares with the 125,000 ha estimated at appraisal. In ARC's study, 1/ the large shortfall in the area put under irrigation was attributed in the case of STW to the failure to change the pre-irrigation cropping pattern to the general pattern considered when fixing the command area. For DTW and RLI, poor layout and inadequate lengths of pipe in the distribution system were the main reasons for the shortfalls. Croppint Pattern 4.02 It was envisaged that project impact on the cropping pattern would be mainly one of expansion of the cropped area under boro paddy in clay soils. The expectations on aus paddy (pre-Kharif) were uncertain, and on aman paddy (Kharif) very small; a perceptible increase in the area under wheat in loam soils, and marginal on jute cultivation were anticipated. Under the project, the trend continued to be towards paddy cultivation and nearly 70% of the cropped area with irrigation facilities was, in fact, under paddy. During pre-Kharif and Kharif seasons aus and aman were the main crops grown. With the introduction of irrigation there was a shift from local to high yielding varieties of rice. In Rabi, boro paddy was the main crop grown in clay soils with wheat as the competing crop in loam soils during Rabi under irrigated conditions. Also, in wheat there was a shift from local varieties to high yielding varieties. Jute, the traditional crop grown in West Bengal, accounted for 15% to 30% of the cropped area and continued to be grown mainly as an unirrigated crop. Cultivation of potato, a high income generating crop, increased in the project area while cultivation of pulses, popular under unirrigated conditions during Rabi, was minimal after the introduction of irrigation, in the face of competing claims of mustard and vegetables. Annex 4 shows the cropping pattern "with and without" the project. Cropping Intensity 4.03 As projected, there was a substantial "with - without" increase in cropping intensity due to the project. Details are shown in Annex 5. Crop- ping intensity for shallow tubewell irrigation increased from 130% to 177%, IJ ARC Project Completion Report, 1982. - 46 - and for riverlift irrigation, from 109% to 228% under various soil conditions of clay and loam. Cropping intensity under "without" project conditions was over 115-125% for all types of investment, attributed, in this rainfall area, to irrigation created by Rivulets or Mullahs. Thus, ARC parceived, that for 15-26% of the area benefiting from project investment, there was a substitu- tion of one source of irrigation for another. Yields 4.04 Surveys conducted by ARC and the Organizational Research Group (ORG) disclosed substantial increase in crop yields, particularly from paddy, wheat, potatoes and jute. Studies of yields with shallow tubewell irrigation under "with" and "without" conditions in two districts for loam soils and clay soils, gave the following results: Burdwan (Clay) Nadia (Loam) Kg/acre x 100 Without With Without With Paddy (local variety) 4.10 - 4.93 8.03 Paddy (HYV) 7.46 8.00 6.11 8.72 Paddy (Boro) - 15.96 - 16.30 Wheat (Local) 5.79 - 7.89 - Wheat (HYV) - - - 8.63 Jute (Local) - 2.56 6.82 Jute (Imported) - - 3.47 6.82 Potatoes 60.00 - - - Annex 6 gives the yields for the same crops under deep tubewell and riverlift irrigation. Production 4.05 The incremental production of crops estimated at appraisal, and actual incremental production, are as follows: Estimated at Appraisal Actual (tons) (tone) Rice 145,000 200,000 Wheat 165,000 40,000 Potatoes 130,000 90,000 Jute 5,000 20,000 Production of pulses declined marginally compared to the 10,000 tons decrease estimated at appraisal. - 47 - V. FINANCIAL AND ECONOMIC RESULTS Financial Rate of Return 5.01 The financial rates of return for shallow tubewells were 21% and 25% in clay and loam soil, respectively. Under studies conducted by ARC in the Districts of Murshidabad (clay soil), and Malda (loam soil), the FRRS for deep tubevells were 37% and 10%, respectively. In a separate study conducted by ORG, they were over 50% in the clay region and 5% in the loam region. For riverlift irrigation, the FRR was more than 501 in clay (Hoogly District) and barely 1% in loam soil (West Dinajpur). The high return from DTWs and RLIa in Hoogly District was attributable to the commercial crop of potatoes. Economic Rate of Return 5.02 At appraisal, the estimated economic rate of return ranged from 33% for a deep tubevells on loam soil, to over 50% for most other investments. The sensitivity of the rates of return was tested and resulted in ERR ranges of 21% to over 501, and 23% to over 50% respectively. 5.03 ARC's calculation of actual ERR 1L is considered a reasonable measurement of the project results. It was calculated somewhat differently from the appraisal ERR as it exclvded the imputed value of family labor and cultivation costs, and the benefic taken into account for DTW and RBI is the incremental income from the entire command project areas. For this purpose the incremental income per acre of benefited area was worked out by dis- regarding the water charges payable by beneficiaries from the cultivation costs; instead the annual 0 & M costs of the DTW or RLI were taken into consideration along with the investment cost. The only difference between FRR and ERR for DTWs and RLI arises from the use of market prices and shadow prices. 5.04 A comparison of the actual and estimates of ERR with those made at appraisal is given below: Actual Appraisal (ARC) --------------%------------- Shallow Tubewells Over 50 47 to 50 Deep Tubewells 33 to 42 21 to over 50 Riverlift Irrigation 48 to over 50 4 to 50 1f This section is based or. the field studies conducted by ARC of crop surveys in 1979-80 and by ORG in 1970-81, results of which are incor- porated in ARC's completion report. - 48 - The ERRs compare satisfactorily with those made at appraisal. In all cases, the lower ERRs refer to those in loam soil, except for shallow tubewells in the Nadia District, where the ERR in clay soil was 47% versus 50% in loam soil. The reason was that jute was grown there but not in Burwan which is also a clay soil district. The wide gap between 4% and 50% for the riverlift ERR appears to be an anomaly. Details of the ERR and FRR figures are shown in Annex 7. 5.05 Inasmuch as the area act under irrigation was less than target, and there was delay in implementing the project, the relatively high ERRs may be surprising. This may be accounted for in part by the differences in approach. The ARC field survey year 1979-80 had well below normal rainfall whereas the ORG survey in 1980-81 had almost normal rainfall. The ARC estimated quite fully the benefits of using pumpsets alone, where the farmer is located near an irrigation canal, and from sales of water, and benefits therefrom to purchasers, with income in each case almost two-thirds of that of STW individual investments, benefits largely unaccounted for in the appraisal estimate. Another factor is that the ARC economic return is based on the results above alone, ARC, concerned by the problems of bringing minor irrigation investment to optimum efficiency, employed the figures for that year throughout the present worth stream. 5.06 Other aspects of interest brought out in the ARC economic assessment were as follows: - average land holding was 2-6 acres; - average utilization, actually irrigated, of the nominal command area for STW was 46%, for DTW, 60% and for ELI, 50%; these are averages for clay and loam areas; - an acre-inch of water and an acre of land under wheat produces Rs 100, versus Rs 45 under boro paddy; and for the same quantity of water, wheat generates nearly three times the man-days of employment as does paddy. ARC states that boro paddy is grown in West Bengal despite the disadvantages above, because it is the traditional crop and it takes time for the farmer to change. To improve this, it poses the possibility of selling DTW and RLI water with the stipulation that water for one acre of paddy will be available to the farmer only if he sows 2 acres of wheat as well. Broadly, ARC con- cludes that the under utilization of water resulting from minor irrigation investment has resulted ir a loss of output and employment at the macro level. - 49 - VI. BORROWERS PERFORMANCE 6.01 Considering that the project was complex, involving a considerable number of implementing agencies and components, the performance of GVB was satisfactory. However, if the State had taken more positive steps toward the establishment of the Project Coordinating Committee, appointment of the heads of MIC and SWB, submission of the technical criteria for ELI investments, and amendment of the overly conservative norms for groundwater resources, the long delay in project implementation could have been minimized. Above all, the issue of water charges, which under the Agreement between GOWB and IDA were to be increased to progressively recover operating and maintenance costs, was practically ignored. While this issue is politically sensitive, nevertheless, the different scales of water charges create a situation which works against the recovery of irrigation investments and to some extent, against further investments in minor irrigation facilities. The lesson to be drawn appears to be that while IDA should include appropriate cost recovery measures, nevertheless it must design undertakings which are compatible with, and enforceable, in a politically sensitive environment. 6.02 Project supervision was done by IDA every 7-9 months and carried out with staff continuity, and was adequate. VII. CONCLUSIONS 7.01 The project was a success. However, overall results were mixed. The shallow tubewell target was exceeded by a very large amount and the riverlift irrigation component was substantially achieved. The deep tubewell component was largely completed, although almost entirely financed without Association funds. In any case, yields and production targets were largely met and the ERR was satisfactory, although the area put under irrigation was about 70% of target. The smaller Agro-Service Center and Market components fared badly, primarily because of poor design and inadequate arrangements, for which the Association must share the responsibility. The project took almost six years to complete instead of four. During project implementation appraisal targets and Credit allocation had to be revised to reflect what was realistically achievable and it was for this reason that four years after project comence- ment the shallow tubevell component was expanded. 7.02 The project was unusual in that there appeared to be a laxness about directions. Such instances as the non-IDA financing of deep wells, non-IDA financing of the few Agro-Service Centers provided and finally, the building of but one market, and the finding that there were no credit funds remaining to disburse against it, suggest a certain distancing from the project. Considerable flexibility was demonstrated, however, in deciding on and implementing the major increase in the number of shallow tubewells provided. - 50 - Annex 1 INDIA WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CR. 541-IN) Lending Program and Disbursement, Participating Banks Total ARDC Amount Refinance Financial Commit- Disbursed Released Agency Assistance ments by Banks by ARDC (Rs Millions) Conczercial Banks 203.60 180.47 174.88 150.98 Central Cooperative Land Development Bank 241.97 217.78 161.20 126.66 Total 445.57 398.25 336.08 277.64 /a /a The banks have not drawn the refinance available to them; it is still a tentative figure. 51 - Annex 2 INDIA WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CR. 541-IN) Demand and Recovery of Central Cooperative Land Development Bank Principal and Interest (Rs Millions) 1975 1976 1977 1978 1979 1980 1981 Overdues brought forward 3.00 0.20 nil nil 1.99 8.88 29.01 Demand falling due for the first time during that year 10.61 13.68 21.71 35.26 50.19 75.85 86.90 Total (1+2) 13.61 13.88 21.71 35.26 52.18 84.73 115.91 Demand rescheduled during the year - - - - 6.42 3.71 - Total effective demaud (1)+(2)-(4) 13.61 13.88 21.71 35.26 45.76 81.02 115.91 Recoveries during the year 13.41 13.88 21.71 33.27 36.88 52.01 55.64 Percentage of overdues to demand (%) 1.47 nil nil 5.64 19.41 35.81 52.00 Government share capital contribution to SCLDB 5.51 10.06 10.06 14.56 19.56 22.06 26.56 Of which for notional deduction 0.01 - - - - - - Source: West Bengal Central Cooperative Land Development Bank Ltd. - 52 - Annex 3 INDIA WEST BENGAL AGRICULTURAL DEVELOPMENT PROJECT (CR. 541-IN) LAND DEVELOPMENT BANK Recovery Position Since 1973-74 Percentage of SLDB (Pr. & Int.) Recovery Recovery to Demand -------(Rs Millions)--- 1973-74 14.93 11.93 79.91 1974-75 13.61 13.41 98.53 1975-76 13.88 13.88 100.00 1976-77 21.71 21.71 100.00 1977-78 35.26 33.27 94.36 1978-79 45.76 36.88 80.59 1979-80 81.02 52.01 64.19 1980-81 115.91 55.64 48.00 PLDBs 1973-74 21.35 12.32 57.70 1974-75 18.81 14.16 75.28 1975-76 20.96 18.14 86.54 1976-77 27.51 22.67 82.41 1977-78 45.27 33.77 74.60 1978-79 61.06 37.94 62.14 1979-80 95.74 60.00 62.67 1980-81 143.25 57.56 40.18 Source: West Bengal Central Cooperative Land Development Bank Ltd. INDIA WEST RFNGAL AGRICULTURAL DEVELOPHP.NT PROJECT Cropping Pattern "Without" and "With" Project Sm DTW RLI (ARDC Study) (ARnC Study) (OR0 Study) (ORG Study) (Ref.year 1979-80) (Ref.year 1979-80) (Ref.year 1980-81) (Ref.year 1980-81) Burdwan Nadia Murehidabad Helda IIooghly W.Dinajpur Nooghly V.Dinajpur (Clay) (Loam) (Clay) (.0am) (Clay) (Loam) (Clay) (Loam) Season/Crop WO W WD V 10 14 W0 WD W wo W 10 1 WO 1. Kharif Aman Paddy (HVY) 74.56 5t.61 34.31 10.75 - 13.00 21.10 35.00 16.96 6.01 0.44 31.08 14.06 30.00 1.60 38.00 - do - (L) - - - - 46.90 6.40 5.30 12.40 79.39 17.53 74.16 10.63 77.83 25.34 79.69 17.09 2. Rabi Wheat (IV) 15.18 - 6.69 20.34 3.00 21.10 5.80 17.80 - 1.10 - 35.17 - 1.27 - 18.62 - do - 4.46 - 2.81 - 8.80 - 7.20 - - - 1.28 - - . 11.07 - Boro Paddy (HYV) - 45.15 - 20.34 - - 4.60 22.00 - 45.82 - 15.00 - 15.85 - 1.11 La Potato 4.69 - - - 4.20 7.20 - - - 26.66 - 0.24 1.22 13.95 0.37 1.99 Pulses - - 19.72 5.05 11.60 - - - - - 13.70 1.54 1.23 0.78 4.16 1.20 1 Vegetables - - 0.53 - - 4.20 - - 0.05 0.87 1.35 0.72 0.1? 0.54 1.54 Huatard 0.39 3.24 - 0.65 - - - - 1.65 1.48 2.30 3.70 1.59 2.37 1.76 - 3. Pre-Kharif Aus Paddy (HYV) - - 3.97 14.28 - 7.80 - 5.50 - - - - - - - Aue Paddy (L) 0.42 - - - 2.40 6.60 24.30 - - - - - - - - - June (Improved) - - 7.30 20.07 - 33.70 - 7.20 - 1.35 - 1.29 3.35 10.27 10.81 9.34 - do - (Local) - - 24.67 8.52 23.10 - 31.70 - - - 7.25 - . - 10.27 10.81 - Total 100.00 10.00 100.00 loor. T 100.00 I T7u 100. DTo5.U 100.00 100.0o 100.00 100. 0 100.0 100.005 la.1300.00 10 - Without W * With INDIA WEST RENGAL AGRICULTURAL DEVELOPMENT PROJECT CroppJng Intensity 57W DTW RLT! (ARDC Study) (ARDC Study) (ORC Study) (010 Study (Ref.year 1979-80) (Ref.year 197-80) (Ret.year 198D-81) (Ref.year 1980-81) Burdwan Nadia Hurehidabad Halds Hooghly W.Dinajput Hooghily U.Dinajpu Particulars (Clay) (Loam) (Clay) (Loan) (Clay) (Loan) (Clay) (Loss) WO W WO W WO W WO W W0 W wo W w0 v ND Net @own area (acres) 2.61 2.61 2.71 2.71 1.30 1.30 1.10 1.10 1.38 1.38 1.18 1.18 1.20 1.20 1.62 1.62 Cross cropped 3.39 4.48 3.52 4.80 1.73 2.45 1.46 2.07 1.90 3.12 1.33 2.16 1.30 2.74 2.69 2.87 area (acres) Cropping intensity 130.00 172.00 130.00 177.00 133,00 188.00 133.00 188.00 138.00 226.00 113.00 283.00 109.00 228.00 166.00 177.00 I. WO a Without LA W - With INIIIA WEST BENCAL AGRICULTURAL DEVELOPHENT PROJECT Yields of Important Crops "Without" and "With" Project SIV, DIV RLI (ARDC Study) (ARDC Study) (ORG Study) (ORG Study) (Ref.year 1979-80) (Ref.year 1979-80) (Ref.year 1980-81) (Ref.year 198081) Burdwan Nadia Murshidabad Halds HooRhly W.Dinajpur Rooghly W.Dinajpur Crops (Clay) (Loam) (Clay) (Loam) (Clay) (Loan) (Clay) (Loam) WO W wo W WO W wo U W0 W 110 W Paddy (L) 4.10 - 4.93 8.03 6/26 9.18 5.50 8.80 9.29 14.95 8.25 12.06 10.52 16.57 9.52 12.77 Paddy (HYY) 7.46 8.00 6.11 8.72 - 10.95 - 10.20 - - - - - Paddy (Boro - 15.96 - 16.30 - - - 14.16 13.27 16.49 4.78 16.65 13.36 21.92 9.60 14.09 Wheat (L) 5.79 - 7,89 - 6.22 - 6.00 - - - - - - - - - Wheat (HYV) - - - 8.63 10.60 10.70 10.90 10.93 - 9.05 5.77 8.23 - - 7.26 9.53 i Jute (L) - - 2.56 6.82 4.34 - 4.56 - - - Jute (tap) - - 3.47 6.82 - 77.00 - 8.50 - 9.61 5.57 5.29 6.82 8.90 6.12 6.12 Potato 60.00 - - - 54.28 57.14 - - 80.63 - 67.90 52.52 86.15 50.76 52.24 WO * Without W - With x INDIA WEST BENGAL AGRICULTURAL DEVELOPNENT PROJECT Net Income and Net Incremental Income Per Acre of Benefited Area and Per Investment Unit STW DTW RLI (ARDC Study) (AROC Study) (ORG Study) (ORG Study) (Ref.year 1979-80) (Ref.year 1979-80) (Ref.year 1980-81) (Ref.year 1980-81) Burdwan Nadia Hurshidabad Maida Hooghly W.Dinsjpur Hooghly W.Dinajpur (Clay) (Loam) (Clay) (Loam) (Clay) (Loam) (Clay) (Loam) Particular. WO W W0 W Wo W W W V 90 N 90 U O W0 V 1. Net Income Per Acre With water charges - - - - 496 1131 428 959 568 2999 405 1160 580 2623 458 1040 Without water charges 290 6349 268 7940 496 1307 428 1276 568 3466 405 1538 580 3031 458 1382 2. Incremental Income Per acre with water water charges - - - - - 635 - 531 - 2431 - 755 - 2043 - 582 Per acre without water charges - 3449 - 5260 - 811 - 846 - 2898 - 1133 - 2451 - 924 Per unit/farmer - 8979 - 14260 - 88617 - 33840 - 179676 - 26059 - 465690 - 40656 les 3. FRR 212@ 25e@ 37% 102 over 502 5% over 502 than 12 4. ERR 47% 50% 50 232 over 502 212 502 42 * * Include income from sale of water 'D * Without W * With 긱