India - Andhra Pradesh Agricultural Extension Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3615-IN STAFF APPRAISAL REPORT INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT March 9, 1982 South Asia Projects Department Education and Agricultural Institutions Division 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. I~~~~~~~~__  CURRENCY EQUIVALENTS US$1.00 Rupees (Rs.) 9.21 1/ WEIGHTS AND MEASURES Metric System ABBREVIATIONS ADA - Assistant Director of Agriculture Add'l DA - Additional Director of Agriculture AEO - Agricultural Extension Officer AO - Agricultural Officer APAU - Andhra Pradesh Agricultural University BDO - Block Development Officer CADA - Command Area Development Authority DAO - District Agricultural Officer DDA - Deputy Director of Agriculture DEA - Department of Economic Affairs (GOI) DOA - Department of Agriculture DOE - Directorate of Extension (GOI) FTC - Farmers Training Center GOAP - Government of Andhra Pradesh GOI - Government of India GOWB - Government of West Bengal GSTC - Gramsewak Training Center HYV - High Yielding Variety ICAR - Indian Council of Agricultural Research ICRISAT - International Crop Research Institute for Semi-arid Tropics IDA - International Development Association IRRI - International Rice Research Institute M&E - Monitoring and Evaluation JDA - Joint Director of Agriculture NARP - National Agricultural Research Project RRS - Regional Research Station SGAO - Senior Grade Agricultural Officer SmS - Subject Matter Specialist SPPI - State Plant Protection Institute T&V - Training and Visit VDO - Village Development Officer VEO - Village Extension Officer VLW - Village Level Worker FISCAL YEAR April 1 - March 31 1/ An exchange rate of US$1.00=Rs.8.0 has been used in the cost tables of this project.  -i- FOR OFFICIAL USE ONLY INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT Table of Contents Page No. I. BACKGROUND ................................................... s. I A. General .................................. 0 ...... ..0...... o. I Introduction ....................1................... Agriculture in India ............................................. I Agricultural Extension ..................... ... 2 Existing State Projects..........................so 4 B. The State of Andhra Pradesh. . 8 General Description ....... ...... so.. 8 Agricultural Production ............................ 8 C. Agricultural Services in Andhra Pradesh 9 Extension Services .9. 9 Training .,......... ..,.,, 0....... ........ ...... ...... 11 Research ............................ . ....... * * * * * * 11 Input Supply .............. .. ... 13 Credit ......... *..... .............................. 13 Mfarketing ,............................ *. ...0.. 14 II. THE PROJECT ............................... 14 A. General Description ..... . . ......14 B. Detailed Features ........ 14 Extension Methodology ............................. . 14 Incremental Staff Requirements . . 17 Housing ....... ...... . ... . ... ... . . .. 18 Transport .. . ... . . ... ....... 18 Equipment .......... ........ l, ....... 19 Operating Expenses . . . ............... * 19 Training . ...... ....... 19 Monitoring and Evaluation ................ ........ .. 19 III. COST ESTIMATES AND FINANCING . ................ .......... 20 A. Cost Estimates ......... ............................ 20 B. Proposed Financing ......... . . .................. ..* ....... so. 21 C. Procurement ... .... ......... ............ .... ............. 21 D. Disbursement and Audit ........ O..* .......... 22 This document has a restricted distribution and may be used by recipients only in the performance of their official duties.Ats contents may not otherwise be disclosed without World Bank authorization.  -ii- IV. ORGANIZATION AND MANAGEMENT ............................ 23 Extension Service **********.************************* 23 State Level Coordination .............................. 24 Linkages Between Extension and Research ................ 24 Farm Trials ******..*****............................... 26 Training ......... ,,,,. . ....... 27 Monitoring and Evaluation .......a..................... 28 V. BENEFITS, JUSTIFICATION AND RISKS ...................... 28 Economic Benefits .... ........... . . . . . .. ........................ . 28 Project Risks ............ ..... ..........0........................ 29 VI. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS ........... 30 ANNEXES 1 Table 1 Summary of Project Costs Table 2 Incremental Staff Salaries and Incentives Table 3 Civil Works Table 4 Incremental Vehicles and Equipment Table 5 Incremental Operating Costs Table 6 Training Costs Table 7 - Monitoring and Evaluation Cell Table 8 Requirement of Extension Staff By Year Table 9 Staff to be Drafted from Panchayat Raj Department 2 Training 3 Table 1 Implementation Schedule Table 2 Estimated IDA Disbursements 4 Table 1 Economic Analysis Table 2 Economic Price for Paddy Chart 1 - Organization Chart - World Bank 23339 Chart 2 - Linkages Between Extension and Research - World Bank 23340 MAP IBRD 16103  INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT I. BACKGROUND A. General Introduction 1.01 The proposed project would be the twelfth in a series of IDA-assisted projects designed to reorganize and strengthen agricultural extension in India.1/ Under the project, the Government of Andhra Pradesh (GOAP) would reorganize its extension service to provide farmers, on a regular and systematic basis, with up-to-date advice on farming practices best suited to their specific conditions and capable of having an immediate impact on production and income. This would be achieved by strictly programmed visits from regularly trained field staff, supported by professional advice from the Department of Agriculture and from research.2/ The project was prepared by GOAP with assistance of staff of the Bank's Resident Mission in India. Appraisal took place in May/June 1981. This report is based on the findings of the appraisal mission consisting of Messrs. R.J.G. Le Breton, G. R. Galgali and Karam Singh (IDA), and B. Mishra (Consultant). Agriculture in India 1.02 The area of India is 3.29 M km 2 of whLch 55% is cultivable and about 25% of the net cultivated area irrigated. India's population of over 680 M is growing at an annual rate of about 2.0%. National Income 1/ The eleven previous projects are described in the following appraisal reports: Assam Agricultural Development, Cr. 728-IN West Bengal Agricultural Extension and Research, Cr. 690-IN Rajasthan Agricultural Extension and Research, Cr. 737-IN Madhya Pradesh Agricultural Extension and Research, Cr. 712-IN Bihar Agricultural Extension and Research, Cr. 761-IN Orissa Agricultural Development Project, Cr. 682-IN Composite Agricultural Extension (Haryana, Gujarat and Karnataka), Cr. 862-IN Kerala Agricultural Extension, Cr. 1028-IN Maharashtra Agricultural Extension Project, Cr. 1135-IN Tamil Nadu Agricultural Extension Project, Cr. 1137-IN Madhya Pradesh Agricultural Extension Project, Phase II, Cr. 1138-IN 2/ The main principles of the proposed extension reform are described in Agricultural Extension: The Training & Visit System (World Bank,1977)  -2- has grown at nearly 3.5% per annum since 1960, and the per capita GNP reached US$190 in 1979. Although average per capita income has increased, there has not been sufficient improvement in the living standards of the vast masses of urban and rural poor. Thus, GOI's development plans give priority to alleviating poverty and creating employment, especiaLly in rural areas. 1.03 Agriculture is the dominant sector of the Indian economy and contributes about 40% of GNP. It engages about 70% of the labor force and provides the base for about 60% of India's exports. During the last decade, Government of India (GOI) develoment plans have emphasized agriculture and sought to raise foodgrain production by increasing the use of irrigation, fertilizers, plant protection chemicals, and seeds of improved varieties. In support of this, GOI has modernized and expanded its agricultural credit institutions and accelerated the development of irrigation. More recently, increased attention has been given to the establishment of improved extension services and upgrading the research capabilities needed to support this extension effort. 1.04 These efforts appear to be bringing significant results. Over the past decade, foodgrain production has grown at about 2.75% p.a., suffi- cient to meet consumer demand, eliminate imports (which had averaged nearly 5 million tons per year for the 15 years preceeding 1976), and lower real foodgrain prices to consumers. At the same time, India was able to build up sufficient buffer stocks of rice and wheat to cope with the 1979/80 drought with comparative ease, and to export about 0.5-0.6 million tons of rice in 1980/81. Some wheat imports were necessitated in 1980/81 reflecting problems of stock management rather than any serious production shortfalls. Greater efforts will be required to maintain and further improve this pace. Moreover, per capita production of a number of other important crops, including cotton and oilseeds, has fallen during the decade. Furthermore, India's agriculture is particularly susceptible to the vagaries of weather and foodgrain production can vary as mtlch as 20% between successive years. Although expansion of irrigation faLcilities to reduce this variation remains a priority, GOI recognizes that the bulk of India's cropped area and over half of its farmers cannot, in the foreseeable future, benefit from water-intensive agricultural tech- nologies. Moreover, although much appropriate research is available, yields under rainfed conditions have shown little or no improvement over this period -- a fact which prompts this project's emphasis on rainfed as well as irrigated farming. Agricultural Extension 1.05 State Governments have direct responsibility for agricultural extension; they operate through their Departments of Agriculture (DOA), generally with the cooperation of other state departments., While organization varies between states, the extension service is generally  -3- headed by the Directo- of Agriculture who reports to the Secretary of Agriculture. He is assisted by staff located at state, divisional and district levels. The Collector (the senior representative of the civil administration at the district level) coordinates activities between the various agencies of government, with the District Agricultural Officer (DAO) representing DOA. Below the district level, Agricultural Extension Officers (AEO) generally report on routine matters to the Block Develop- ment Officer (BDO), an official of the state Community Development Depart- ment. In some states, locally elected councils (panchayats) also play a role and the BDOs are responsible to these bodies. Given the multitude of local activities and lack of direct administrative control by DOA, AEO are often diverted to non-agricultural activities. The village level worker (VLW), a multipurpose worker, is supposed to spend 75-80% of his time on agricultural extension under the direction of ithe AEO. However, the VLW is administratively responsible to the BDO and the lack of a well-defined agricultural program, combined with the demands of his other activities, generally result in his spending very little time on agricultural exten- sion. The same is generally true of the AEO. What little extension work is done is neither planned systematically nor supervised adequately. 1/ 1.06 Over the years, dissatisfaction with the effectiveness of the multi-purpose worker for increasing agricultural production has led to the development of a variety of special programs focusing on particular crops, areas, or techniques. Staff employed under these schemes are usually under the administrative control of various subject matter departments of DOA. In a given state, such schemes usually cover only a few districts and only part (e.g., one crop) of the farmers' operations. These schemes have tended to dissipate extension efforts in many uncoordinated direc- tions and divert attention and resources from the need to reform the main line extension agency. 1.07 In addition to the organizational probLems mentioned above, the extension service often suffers from inadequate and outdated staff train- ing. Moreover, there are usually too few staff- to cover the farming community adequately and they lack sufficient mobility to reach farmers systematically and regularly. Furthermore, government owned housinig is scarce and rented accommodation hard to come by. Additionally, linkages with research have been tenuous and irregular. All these factors have hampered effective extension work. They have resulted in slowing down of agricultural production, with most extension personnel having low status, low pay and poor morale. 1/ This situation exists in states not coverecd by the Training and Visit System of Extension.  -4- 1.08 With yields in irrigated and rainfed areas remaining at levels well below potential, GOI has become increasingly concerned with improving agricultural extension. A new system of extension -- the Training and Visit System (T&V) -- based on frequent and regular farm visits by full-time, adequately trained extension personnel was developed in 1974 with IDA assistance. Under this approach, a substantial portion of the multi-purpose VLW is transferred from Community Development Departments to DOA to work exclusively on agricultural extension. The results from the Chambal Irrigation Scheme in Rajasthan,1/, where the system has been in operation since 1974, were so encouraging that the approach has sub- sequently been adopted in twelve states under the projects discussed below. Existing State Projects 1.09 The Rajasthan Agricultural Extension and Research Project (Cr. 737-IN, US$13.OM, effective in February 1978), was an outgrowth of the favorable results obtained with the new approach to agricultural extension pioneered under the Chambal Rajasthan Command Area Development Project (Cr. 562-IN effective September 1975) and the Rajasthan Canal Command Area Development Project (Cr. 502-IN, effective December 1974). The Government of Rajasthan is presently reorganizing and strengthening extension and supporting adaptive research to serve 2.9 M of the state's 3.7 M farm families in 17 districts where an immediate potential for improving agricultural production exists. Project implementation has picked up rapidly. Farmers have responded favorably to the system, and adopted new practices like seed treatment, basal dressing with fertilizers, and inter- cropping with kharif pulses which have helped them grow a good crop even under drought conditions. There is now a need for more intensive work by researchers to develop more sophisticated technological packages since farmers have developed confidence in the extension staff and respond favorably towards adoption of new techniques and skills. 1.10 As a result of experience with improved extension activities in the Chambal Irrigation Command Area, Madhya Pradesh requested IDA assis- tance in extending the reorganization of agricultural extension services to cover both irrigated and rainfed areas in 15 of 45 districts in the state (Cr. 712-IN for US$10 M, effective September 1977). Progress was good in the early stages of the project, but slowed down later due to frequent changes in project management. The major problems noted by the early supervision missions were staff shortages, slow construction of buildings and houses, inadequate liaison between research and extension organizations and slow implementation of the T&V system, althougbL district 1/ This covered 84,000 farm families and 360,000 hectares of which about two-thirds is irrigated.  -5- phasing had proceeded as planned. Despite the slow start, there has been considerable improvement during the past year and almost all posts, both in research and extension, have now been filled. Having overcome cumber- some bureaucratic tendering procedures, the buiLding program is now gain- ing momentum. Liaison between research and extension has been well estab- lished resulting in a substantial involvement of research workers in training extension staff and with greater emphasis being given to resolv- ing farm related problems within the overall research program. In a recent survey, 75% of contact farmers were aware of the day of visit of the Village Extension Worker (VEW) and almost all could identify him by name. About 81% of contact farmers have adopted at least one of the recommended practices. 1.11 In project districts, there has been a 300% increase in the use of clean and graded seed, a 35% increase in the planting of seed of improved varieties aaud a 28% in the use of seed dressings. Fertilizer use, both under rainfed and irrigated conditions, has increased 66% over 1976/77 levels (as compared to 48% in other districts of the state) and the use of soil testing facilities increased by 69%. A project to extend the T&V system to cover all remaining districts of the state was approved by IDA in April 1981 (Cr. 1138-IN). 1.12 Eastern India, including Assam, Bihar, Orissa and West Bengal, is the country's "rice bowl". Despite its high potential, foodgrain yields are low and production has barely kept pace with population growth. The stagnation of agricultural production has been partly due to the inability of the extension service to give meaningful advice to farmers; similarly, research has failed to focus on need of majority for simple, low cost means of improving production. Orissa is the first state to reorganize its agricultural extension service throughout the entire state (Cr. 628-IN for US$20 M, effective June 1977). Virtually all of the state's 3.4 M farmers are now covered by the program and, according to recent supervi- sion missions, good progress has been made, farmers have responded well and have accepted, on a widespread basis, new practices for increasing production, e.g. introduction of mustard as a new crop, seed treatment, and use of manually operated seed drills. In addition, supervision mis- sions have reported favorably on the way extension messages are reaching even the remotest villages. 1.13 During the preparation and appraisal of the West Bengal Agricul- tural Development Project (Cr. 541-IN, effective August 1975), which supports minor irrigation development in a portion of the state, one of the major constraints to agricultural development was identified as a lack of effective agricultural extension. Consequently, the project included a component to strengthen extension in six districts along the principles established in the Chambal and Rajasthan Canal Areas. The initial impact of extension reorganization was so favorable that the state decided to  -6- expand the coverage. This was provided in Cr. 690-IN, for US$12 M, effec- tive August 1977. Initially, the project was highly promising: 2,400 multipurpose workers were transferred from the Community Development Department to the control of DOA and were trained in the dissemination of specific messages for farmers and, together with DOA technical staff, worked with farmers in identifying and solving field problems. In the latter part of 1977, however, a new Government of West Bengal (GOWB) suspended its earlier decision to place the VEWs under the administrative control of DOA pending a thorough review. This drastically reduced the ability of VEWs to visit farmers regularly, and extension operations came to a virtual halt in most of the state. GOWB has now re-established the single line of command, placing all extension staff under DOA, thus remov- ing the major obstacle to project implementation. Although recruitment and training of new VEW has started and some VEWs have begun field work, the tempo of work has not yet reached former level. 1.14 Under the Assam Agricultural Development Project (Cr. 728-IN for US$8.0 M, effective September 1977), Assam became the third state in the eastern region to reorganize its extension service. The project now covers all of the approximately 1.9 M farm families in Assam's plains districts. In the first districts covered, improved farm practices such as the line transplanting of paddy, use of HYV paddy, increased area and higher yields of HYV wheat and increased consumption of fertilizers resulted. In the more recently covered districts, the effects of exten- sion work are already starting to be seen. Unfortunately, political unrest in Assam during 1979 and 1980 severely disrupted the field visits by both VEWs and supervisory staff and led to serious deterioratioii in the quality of work. The Government of Assam is now trying to rehabilitate the project. 1.15 Under the Bihar Agricultural Extension and Research Project (Cr. 761-IN for US$8.0 M, effective May 1978), through reorganization of exist- ing staff, some 9,000 VEWs were to reach all of Bihar's 7.6 M farm families. The progress so far has been disappointing with the poists of Director of Agriculture and Additional Director of Agriculture being vacant for a long time, and the extension system has been in operation in only 16 out of 31 districts. However, as a result of constant persuasion, the post of Director of Agriculture was filled in the latter part of 1981 and that of Additional Director of Agriculture in January 1982. The Government of Bihar has since renewed its commitment to the reorganization and prepared a new timetable for implementing the project according to which all the districts would be covered by 1985 and vacant positions filled accordingly. It is expected that the project will now gain momen- tum.  -7- 1.16 The Composite Agricultural Extension Project (Cr. 862-IN for US$25.0 M) became effective in December 1979. Under the project, the government of Gujarat, Haryana and Karnataka have undertaken the reor- ganization of extension services in their states. The project also includes strengthening of the capability of the Directorate of Extension (DOE) of the GOI in order that it may assist all states in the implementa- tion and operation of the reorganized extension system. Extension activities are going well in Haryana and Karnataka. In Gujarat, the quality of extension work is not uniform. While in some districts its impact is highly effective, in other districts, it has suffered from inadequate supervision by the State Department of Agriculture. The State Government has been urged to remedy the situation. 1.17 The Kerala Agricultural Project (Cr. 1028-IN for US$10.0 M) became effective in June 1980. Project implementation started only in three districts and further expansion to cover the remaining eight districts has been held up because of indecision at the political level. The newly installed government in Kerala is considering proposals to go ahead with the reorganization to cover all eleven districts of the State. IDA and GOI are following the situation closely. 1.18 To cover two other states on the same pattern, the Maharashtra Agricultural Extension Project (Cr. 1135-IN for US$23.0) and Tamil Nadu Agricultural Extension Project (Cr. 1137-IN for US$28.0) were approved by the Board in April 1981. They are in the first stages of implementa- tion. 1.19 The beneficial-results of the system are not being achieved with equal success in all areas due to local problems. The decision to trans- fer control of considerable numbers of multipurpose extension workers to the Department of Agriculture and assign them to work exclusively on agriculture requires a major political commitment and reorganizational efforts. It has been difficult for some state governments to make this decision and maintain it once made. In addition, the absence of timely - financial sanctions, tardy staff recruitment, and protracted procedures for acquisition of land have sometimes slowed progress, although these problems have now been overcome in most states. Encou.raged by the impact which the Training and Visit system of extension is having in areas where it has been successfully operating, GOI is seeking to bring about similar reorganization throughout all states in India. The DOE of GOI has taken the initiative to help states overcome initial difficulties. Although these projects are demanding in terms of IDA supervision, their great potential for sustained increases in food production and incomes for the rural sector justifies continued IDA participation.  -8- B. The State of Andhra Pradesh General Description 1.20 Andhra Pradesh lies on the southeast coast of India and, with a population of 53 million, is the fifth most populous state in the Indian Union. It is also the fifth biggest state in India, with an area of 276,814 square kilometers, and divided into 23 districts. About 11.3 million hectares are cultivated by 5.5 million farm families, with an average farm size of 2.1 ha; 47% of the total number of farm holdings are smaller than one hectare. Agriculture is the most important sector of the State's economy: it contributes 55% of the net domestic product and employs 70% of the labor force. 1.21 There are three main regions of Andhra Pradesh of historic:al and ethnic significance: the Coastal Andhra region which covers the 8l north- eastern coastal districts, the Rayalseema region that covers 4 southern- most districts and the Telengana region covering the remaining eleven western and northwestern districts of the Deccan plateau, including the state capital, Hyderabad. The most fertile area of the state, the Coastal Andhra region, has a good proportion of deltaic alluvial soils, black cotton soils and red soils with a clay base. The southern distric:ts have either black soils, black cotton soils or red loamy soils, while much of the Telengana region has red earths. Good knowledge of the resource base exists for the success of the extension project. 1.22 The State is served by two major rivers, the Krishna and Godavari, which pass through Andhra Pradesh towards the Bay of Bengal, irrigating 36% of the gross area sown. Most of the cultivated areas in the state is rainfed. The main rainfall pattern is established by southwest monsoons (June to September); the highest rainfall, averaging more than 1,000 mm a year - falls in the northeastern coastal districts, which also benefit from the northeast monsoon from October to December to the extent of one-third of the annual rainfall. Rayalseema region in the state is the driest, where irregular and ill-distributed rainfall barely averages 550 mm a year. Nearly half of the state is classified as a drought prone area. Agricultural Production 1.23 Andhra Pradesh is a major rice producing state where two c:rops of rice are taken a year: in 1978/79 the state produced about 7.4 mjillion tons of rice of which 5.3 million tons were from the kharif (monsoon) crop and 2.1 million from the rabi (winter) crop. The rabi crop gives higher yields because of higher insolation and fewer pests and diseases. The second most important crop is sorghum, of which 1.4 million tons were produced in 1978/79; about 60% of this was grown in the rabi season. Pearl millet (368,000 tons in 1978/79) is the next most important crop,  -9- followed by maize; 360,000 tons of maize were produced in 1978/79 in a fairly concentrated zone covering four north central districts of Telen- gana region. Sugarcane, cotton, tobacco and groundnut are also grown in important quantities. 1.24 In agriculture, the Bank group is assisting GOAP with a composite irrigation project (Loan 1251-IN), Godavari Barrage Project (Cr. 532-IN), a fisheries project (Cr. 815-IN) ani a cashew nuLt proJect (Cr. 1012-IN). Andhra Pradesh also participates in some Bank gIroup financed projects with a national coverage: National Seeds Project (Ln. 1274-IN) National Agricultural Research Project (Cr. 855-IN), National Dairy Development Project (Cr. 842-IN), Drought Prone Areas Project (Cr. 526-IN), National Cooperatives Development Corporation Project II (Cr. 1146-IN), and Third Agricultural Refinance and Development Corporation Project (Cr. 947-IN). C. Agricultural Services in Andhra Pradesh Extension Services 1.25 Agricultural extension in the State operates under a diarchy. Although the DOA is responsible for direction and guidance of the exten- sion program, it is executed through the Development Blocks and Panchayat Raj Department. The Panchayat Samiti which is a body of elected repre- sentatives from the Panchayats is headed by an elected Chairman. BDO, ordinarily an officer of the State Administrative Services, functions as the Executive Officer of the Panchayat Samiti and simultaneously reports both to the Samiti and to the District Collector. He is responsible for all development programs including agriculture at the block level, and in agricultural matters, is supposed to be advised by the Divisional Assis- tant Director of Agriculture (ADA). In the blocks designated for inten- sified agriculture, the BDO is assisted by 3 Agricultural Officers (AOs) and by 2 AOs in blocks with less intensive agriculture. Non-intensive blocks have one 'Village Development Officer (VDO) for every Panchayat; intensive blocks have double the number. The number of VDOs is not related to the number of farm families or the geographical area. The VDO is a multi-purpose worker; theoretically devoting 80% of his time to agriculture; but in practice, unable to devote more than 10% of it to agricultural work. He reports directly to the BDO. At the Revenue Divi- sion level, an ADA assisted by 2 AOs is responsible for the administration of agricultural programs. There are, in addition, some AOs in charge of special schemes, not all of whom report to the Division but are directly under the ADA or Deputy Director of Agriculture (DDA) in charge of the scheme. Of the 23 districts in the State, 10 aLre headed by Joint Direc- tors of Agriculture (JDAs) supported by DDA, an,d 13 are headed by DDAs supported by ADA, who are mostly in charge of commodity schemes, farmers training centers, seed farms or adaptive research stations in the dis- trict. They operate through their special staff of AO, Sub-Assistants and  -10- Field Assistants who function outside the administrative jurisdiction of the Panchayat. The JDA/DDA report to the District Collector so far as the Panchayat Samiti extension programs are concerned and to the Director of Agriculture in all others. The district JDA or DDA has very restricted financial powers, but the District Collector has been delegated financial and administrative powers concurrent with the DA. Recently, for the coordination of agricultural programs, six Zones headed by Senior JDAs have been constituted. They are yet to be vested with effective administrative authority. 1.26 The Department of Agriculture has continually added officers to its staff including Subject Matter Specialists (SMSs) on an ad-hoc basis as special needs arose, such as Intensive Agriculture Development Project, Intensive Agricultural Areas Project and Commodity Development Schemes (Cotton Development, Tobacco Development, Pulse Development, Cashewnut Development, Sugarcane Development, etc.). Most of these schemes have their own field level extension agents and are administered by thte Agriculture Department through their own heirarchy of JDAs, DDAs, etc. Till recently, lines of control of these schemes converged only at the State level. With the posting of DDA or JDA to head the district agricul- tural administration most of the schemes are now under the supervision of the District JDA or DDA. At the divisional level, however, lines of control still remain parallel in respect of some of the schemes. Even- tually, the Department of Agriculture has come to possess a sizeable organization comprising supervisory officers, technical experts and field level staff and has progressively found it more expedient to work more and more on its own, outside the purview of the block. Thus, while one line of administrative control passes down from the Panchayati Raj Department through the District Collector to the Panchayat Samiti, the other line passes from the Agriculture Department through the JDA, DDA, ADA to the field level. The DOA on the one hand is responsible for advising the Panchayat Samities in matters relating to agricultural extension and on the other executes and administers directly a host of other schemes out- side the purview of the Panchayat Samities. With the reorganization of the extension services, it will not only be necessary to rationalize the administrative lines of control within the Department of Agriculture but also to delegate to the zonal JDA, if not to the district JDA/DDA, the same authority as is now vested in the District Collector, while the Director of Agriculture retains only the residuary authority for planning, budgetary control, direction and supervision. 1.27 The Government of Andhra Pradesh has, for the last four years, been implementing the reorganized extension system in the command areas of the four irrigation projects covered by the A.P. Composite Irrigation Project (Ln. 1251-IN). Supervision reports on the extension components of these projects have consistently reported that the system is working poorly. The reasons for this appear to be:  -l1- a. poor supervision; b. isolation of extension staff in the command areas from the rest of the agriculture department and from research; and c. failure to secure the complete release of extension workers from non-extension duties. The project would overcome these weaknesses. By making the Agriculture Department, instead of the Command Area Development (CAD) Department, responsible for its execution, the officers responsible for supervision would have a direct interest, whereas in the command areas, the agricul- ture department officers are not muich interested in supervision work for which CAD Department is ultimately responsible. The isolation of staff would also be reduced since they would no longer be seconded to another department; at the same time, the research linkage with the agriculture department would be strengthened and the university (responsible for research) would no longer have to provide extra services for isolated pockets of intensive extension in the command areas, but could integrate these in its overall intensified work. By the transfer of Panchayati Raj Department staff to the Agriculture Department throughout the state, it will be much easier for the department to ensure that extension staff are no longer diverted from extension work. Training 1.28 The Andhra Pradesh Agricultural University (APAU) has six con- stituent colleges - three in Agriculture, two in Veterinary sciences and one in Home Science. The three Agricultural Colleges are located, one each at the three campuses, viz. Rajendranagar, Bapatla and Tirupati. The intake for B.Sc. Agri. is 400, for M.Sc. Agri., 100 and Ph.D., 24 per year. There are 15 Farmer Training Centers under the control of the Department of Agriculture, imparting training on crop production technol- ogy and allied subjects to farmers and farm women. There are four Gram Sevak Training Centers (GSTCs) under control of Panchayati Raj and Development Department where VDOs receive higher training and refresher courses periodically. Such refresher training and special short courses for VEWs will be given by the Agriculture Department staff seconded to the GSTCs. Research 1.29 Agricultural Research in Andhra Pradesh is the responsibility of the APAU. It is well organized and it has been further strengthened and systematized under the IDA-assisted National Agricultural Research Project (NARP). The State has been divided into seven agro-climatic regions, each with a Regional Research Station (RRS). Each RRS has 4-5 Satellite Sta- tions. There are now 45 Research Stations which mostly emphasize single  -12- crop research and are able to put forward some reliable informationi on cropping systems for the use of extension. The tribal zone is excluded for the present. Each RRS is headed by an Associate Director, suplported by a number of scientists in different disciplines. An Extension Agronomist of APAU is presently provided at seven locations to colLaborate with DOA. The Department of Agriculture also operates demonstration farms. In all these farms a good deal of experimental work is undertaken, mostly of adaptive nature, but also included are experiments which would appropriately constitute part of the Applied Research Program. WiLh 45 stations under the APAU and 36 under the DOA, and many well trainedl and competent scientists, Andhra Pradesh possesses a well developed infrastructure for agricultural research and it produces considera'ble research information in different fields. It would, however, seem that a realignment of responsibilities is needed between the APAU and DOA research programs as there is some overlapping, and some of the findings are not directly applicable to field situations. 1.30 The DOA holds two pre-seasonal workshops at Hyderabad whic'h are attended by APAU scientists and the DOA scientists as well as the exten- sion personnel and which formulate the statewide program of research of the DOA. This workshop is preceded by Zonal workshops convened by the Associate Direct-ors of the RRS. The technical cell in the Department of Agriculture meets more frequently but the APAU scientists do not attend the meetings regularly. The APAU research program for the year is formu- lated in April-May of every year in a large meeting of APAU scientists at the main Research Station and Regional Research Stations. Department of Agriculture and Extension personnel are not adequately represented in the meeting. In the absence of continuous feedback from extension, APAU research, though of a high quality, does not have as great an impact that its potential allows. 1.31 The major constraints to agricultural production at present are: a. the large area of the state in which rainfall is low and uncertain; and b. frequent cyclone damage in coastal Andhra. For low and uncertain rainfall areas, technology is being developed both at ICRISAT and under the All-India Dry Land Research Program, and there are already a number of recommendations to be extended. There is a strong research base throughout the State where applied research and adaptive research are underway. Sufficient research information is being generated by the research to give useful extension messages to the farmers. With realignment of responsibilities between the University and the Department of Agriculture, and involvement of the extension staff in developing future research program, the process of developing extension messages, relevant to farmers' needs will further improve. In a state-wide system,  -13- with different ecological zones and different classes of farmers, there will be a need to further strengthen the research infrastructure to get quick research on its way for more messages, and also close the gaps in areas where the research is currently weak, for example, rainfed farming areas and cropping systems research. However, NARP is stepping up its efforts to strengthen these weak areas of research. Input Supply 1.32 The distribution of fertilizer is mainly channeled through some 8,000 private dealers who handle about 60% of the total 600,000 tons of fertilizers consumed a year. The remaining 40% is distributed by state agencies (the Agro-Industries Corporation and State Marketing Federation) whiich have their own outlets and distribute through primary cooperatives, and by the Agricultural Department itself. The Agriculture Department is however gradually withdrawing from this activity in favor of other agen- cies, and is only maintaining depots in areas where no other agency has yet come forward. 1.33 The average annual consumption of pesticides in Andhra Pradesh is about 130,000 tons of which less than 10% is distributed by the Agricul- ture Department.. There are about 10,000 private dealers, 700 outlets of the Agro-Industries Corporation and Marketing Federation Corporation, about 600 cooperative-outlets and about 600 agriculture department out- lets. The latter are intended mainly to meet sudden emergency demands for pesticides, and many of the outlets are only opened during the cropping season. 1.34 Seeds are mainly handled by the Andhra Pradesh State Seed Develop- ment Corporation, which is gradually taking over seed production that was primarily done by the Agriculture Department on its own seed farms. The Seed Corporation, which was set up in 1976, has not yet developed a com- prehensive marketing organization, so the Agriculture Department is dis- tributing in 1980/81 paddy (8,500 tons), sorghum (800 tons), millet (250 tons) and maize seed (300 tons) to the farmers. In each block there is a panchayat seed store operated by Department of Agriculture staff. These will continue to function, but phase out, when the State Seed Corporation is equipped to completely take over the seed marketing operations. Credit 1.35 Cooperative agencies provide most short and medium term credit in Andhra Pradesh, total about Rs. 1,000 million a year. It is channeled through 26 district cooperative banks, spread over the entire state. Long term credit is provided by the Andhra Pradesh Agricultural Development Bank through primary agricultural development banks. Commercial banks are also an important source of credit to farmers.  -14- Marketing 1.36 The State Marketing Board controls a number of regulated markets and sub-markets where traders are licensed and produce is inspected, graded and weighed according to standards laid down by law. The State Civil Supplies Corporation purchases paddy at prices established by the Government. II. THE PROJECT A. General Description 2.01 The five-year project seeks to achieve early and sustained increases in agricultural production throughout Andhra Pradesh's twenty-two agricultural districtsl/ through the reorganization and strengthening of the extension service of DOA. The project would support this reorganization by: a. provision of transportation (16 cars, 65 4-WD vehicles, 874 motorcycles and 7,000 bicycles), office equipment and audio-visual aids; b. provision of incremental operating funds, travel allowances, vehicle operating costs and extension materials; c. construction of housing for extension workers and hostel accommodation at training centers; d. provision of funds for training of extension staff at dif- ferent levels; e. provision of incremental staff, and incremental salaries to up-grade 1,000 posts of VEOs; and f. creation of a monitoring and evaluation capacity through provision of staff, transportation and operating expenses. B. Detailed Features Extension Methodology 2.02 Under the project, Andhra Pradesh's agricultural services would be reorganized and intensified throughout the State (see Map, IBRD 16103) 1/ Excluding Hyderabad urban district.  -15- following the Training and Visit System adopted in other Indian States over the last four to five years. The project would provide farmers, on a regular and systematic basis, with up-to-date advice on farming practices best suited to their specific conditions and emphasizing proven practices which have an immediate impact on income. This would be brought about by organizing extension field staff so that they visit farmers regularly and receive systematic training and technical support from DOA and from research institutions. 2.03 Each Village Extension Officer (VEO) would be assigned to work with a number of farm families. The number would vary depending on local conditions, population density, cropping intensity and accessibility. Based on available statistics which probably overstate the number of families, one VEO would cover about 800 farm families. In effect, one VEO would cover a number of operating farm families that would vary from around 600 in sparsely populated areas to around 1,000 operating farm families in densely settled areas. 2.04 To reach his farmers systematically, a VEO would divide the operating families in his jurisdiction into 8 smaller groups of 80-120 each. He would visit each group regularly on a fixed day of the week in a two-week cycle. During his visit, the VEO would concentrate his efforts on about ten contact farmers selected from each group, involving as many other farmers as possible in the discussions anLd demonstrations. By the concrete results he achieves with the farmers he directly meets, the VEO can spread his recommendations more effectively to all farmers. During each visit the VEO would concentrate his efforts on a few strategically selected recommendations relevant for that particular phase of the crop cycle. The extension message to be communicated to farmers at the initial stage would be simple, concentrating on the few important crops in the locality and of the most important aspects of crop production practices at that time. Initially, emphasis would be on low-cost improvements which the majority of farmers can afford within their resource capabilities. 2.05 The VEO would be helped, guided and supervised in his work by an AO who would normally be a graduate in agriculture. One AO would be normally responsible for about 8 VEOs and would spend at least four days a week visiting them in the field. Once every two weeks, VEO would receive a full day of intensive training in the recommendations for that period (relevant to the coming two weeks). The AO would also partake in this training session. Thus, every two weeks, the VEO would spend eight days in visiting each of his eight groups and one day in training. On one day, the AO would meet all his VEOs in the field or at headquarters to review progress, reinforce practical skills and identify topics to be raised at the next training session. The remaining working days would be devoted to farm trials and making up for missed visits.  -16- 2.06 To provide regular training, continuous technical guidance and supervision of field work, the existing divisional offices, of which there are about three in each district, would be strengthened by establishing in each division, a team of 3 Subject Matter Specialists (SMSs), one being specialized in agronomy, one in plant protection and one in either commer- cial crops or the most extensively grown crop in the division. The SMSs would be of the rank of ADAs. The SMSs would spend one-third of their time in field visits providing technical support and guidance to VEOs and AOs, one-third in building their own stock of knowledge through a regular dialogue with research workers and carrying out farm trials, and one-third in imparting training to VEOs and AOs. The division would be under the supervision of a Divisional Assistant Director of Agriculture. Some divisions are rather large and have as many as 20 AO circles: in such cases, therefore, whenever a division contains 13 or more AO circles, another officer would be provided to assist in the supervision of the AOs. This officer would be of the rank of a' senior selection-grade AO' having more than 15 years of service. Twenty-two such positions would be provided. 2.07 At the district level, 3 SMSs would be provided (one specialist each in agronomy, plant protection, and in training and communication). These would be of the rank of ADAs in the districts headed by a Deputy Director of Agriculture, and of the rank of DDAs in the districts headed by a Joint Director. -They would provide support to the SMSs in the divi- sion, and would oversee the training programs in the district. The dis- trict level SMSs would also be required to divide their time evenly between training, field visits and contact with research. 2.08 The senior agricultural officer of the district (a Joint Director in 10 districts and a Deputy Director in 13 others) would be in overall charge of the effective implementation of the extension program in the District. Other regulatory functions, input arrangements, coordinating schemes like the Small Farmers Development Agency, etc., would be looked after by his deputy, either a Deputy Director or Assistant Director, so that the principal officer is free to undertake the frequent visits neces- sary to review the extension system's operation to guide the field staff in effective implementation. 2.09 DOA will establish six positions of Senior Joint Directors of Agriculture, each of whom would be in charge of a zone comprising three to four districts. They will be responsible for extension operations in all the districts in their zone, as well as for input supplies and regulatory functions. 2.10 At the headquarters of DOA, the overall responsibility for general agricultural development in the state would continue to rest with the  -17-- Director of Agriculture. An Additional Director of Agriculture (Exten- sion) (Add'l. DA) would be appointed for effective management and techni- cal support of the extension service. This officer would be exclusively responsible for the day-to-day operations and mnanagement of the extension service both technically and administratively. He would also be made responsible for training and management of extension personnel. He would visit the field frequently and check on the effectiveness of extension operations. 2.11 Before negotiations, GOAP established the post of Add'l. DA, filled this position by a suitably qualified officer with full-time exclusive responsibility for implementing the extension system and with no other duties. 2.12 The Add'l. DA would have a technical support staff of three JDAs at headquarters (one each for extension, farm trials and training). These JDAs would be responsible for improving the technical quality of the extension service in the area of their specialization, and would develop and interpret farm trials, promote linkages with research carried out by APAU and elsewhere in the country, organize training programs and serve as a clearing house of technical information. Irk the DOA headquarters there will also be 3 more SMSs with rank of JDA who would provide technical support to the extension service. Incremental Staff Requirements 2.13 Staff required to implement the reorganized extension system in Andhra Pradesh would be met by redeploying the staff already available with DOA, Panchayati Raj Department and Command Area Development Depart- ment, and by hiring new staff. Detailed brealkdown of the staff require- ments and availability by district and subdivision is given in Annex 1, Tables 8 and 9. The details of salaries and incentives of incremental staff are given in Annex 1, Table 2. The only incremental extension staff required are one Assistant Director of Agriculture and 36 SMSs at district level and 38 SMSs at revenue divisional level. Additional staff for the monitoring and evaluation unit are also required. GOAP would ensure that all the incremental staff positions are filled according to the schedule in Annex 1, Tables 7 and 8. 2.14 Before negotiations, GOAP had issued a government order transfer- ring 3,000 positions of VDOs from the Panchayati Raj Department to DOA along with the budget and retaining them for extension work. 2.15 A total of 853 AOs are required for the project. All of these would be from existing posts that would be redeployed for extension work. One Senior JDA post at the headquarters would be upgraded to Additional DA (Extension).  -18- 2.16 Assurances were obtained that the VEO and AOs would be used exclusively for agricultural extension and their emoluments and benefits would not be adversely affected as a result of the reorganization. 2.17 Cashewnut Project Districts: With GOAP adopting the 'T&V' exten- sion system on a state-wide basis, all extension work would be transferred from Cashew units to the extension services, whereas tasks beyond the scope of extension (identification of project participants, selection of suitable land, laying out orchards, assisting farmers with credit applica- tion formalities, supervising and subsidy operations and providing cashew nursery services) will continue to be performed by "cashew units"' (SAR, Cashewnut Project, 1980, paras. 5.08 and 5.09). Assurances to this effect were obtained at the time of negotiations. Housing 2.18 Under the reorganized extension service, extension workers would be required to make regular and frequent visits to farmer groups. It would therefore be desirable for them to live in or near their area of work. Government, however, is unable to provide the resources for the construction of housing on a large scale, so the project would provide housing for only about 3% of VEOs, i.e. 195 houses. Details are given in Annex 1, Table 3. 2.19 The houses would be constructed through the Public Works Depart- ment using the standard design approved by the government for the par- ticular category of staff and would be located in those areas in which there is a shortage of housing for rental. Transport 2.20 Effective extension requires a high degree of mobility both to enable field level staff to meet farmers regularly and to enable technical and supervisory staff to make frequent visits in order to provide the direct guidance needed. The entire system depends on a high level of personal contact between all levels of extension workers. To facilitate this, the project would provide two 4-WD vehicles at each division, one for ADA and one for a team of SMSs. At the district level, one of the existing vehicles with DOA would be redeployed exclusively for the officers in charge of extension and one more would be provided by the project for the SMSs. At headquarters, where all vehicles are pooled, sufficient vehicles already exist. 2.21 VEOs would be provided loans (6,776 in number) for the purchase of bicycles, and similarly, loans (853 in number) would be provided to AOs and SMSs for the purchase of motorcycles. GOAP would provide this facility through existing arrangements, which are satisfactory. Further details are at Annex 1, Table 4.  -19- 2.22 Assurances were obtained that travel allowances would be suffi- cient to ensure the use of vehicles. Funds would be provided under the project for the operation and maintenance of vehicles. Details are given in Annex 1, Table 5. Equipment 2.23 Funds for extension aids for the VEO and AO would be provided, as well as audio-visual aids to each divisional office. Details are included in Annex 1, Table 4. Audio-visual equipment is already provided to district offices. Operating Expenses 2.24 Incremental travel allowances and expenses for the extension staff and operating costs for incremental vehicles are provided in the project. Details are included in Annex 1, Table 5. Training 2.25 The project would provide funds for pre-season training (3 days) for VEOs, AOs and SMSs, special short courses for VEOs and SMSs, orienta- tion courses for other staff, monthly district workshops with research staff and some fellowships for B.Sc. and M. Sc. training. APAU would be responsible for many of these courses (see Annex 1, Table 6), utilizing existing facilities (Farmers' Training Centers, and Gram Sevak Training Centers). Funds have also been included in the project for miscellaneous extension materials (diaries, charts, instructional materials, samples of small implements, seed and pesticides for farm trials). Monitoring and Evaluation 2.26 The project would provide for the establishment and operation of a monitoring and evaluation system specifically designed to provide project management with current information on the effectiveness of the extension system. The methodology used would be similar to that described in a Manual of Instruction, "The tlonitoring and Evaluation of Training and Visit Extension in India", issued by the World Bank in August 1981, and this system would supplement direct personal supervision at each level of project management. Assurances were obtained that GOAP would undertake monitoring and evaluation in a form acceptable to IDA and that an annual summary of results would be forwarded (through DOE) to the Association at least once a year. For this purpose, the project would include additional staff at headquarters (4 plus supporting staff), at district (20 Statisti- cal Assistants and 44 Field Investigators), vehicles (1 4-WD, 23 motor- cycles and 46 cycles) and miscellaneous operating costs. Details of cost are given in Annex 1, Table 7.  -20- III. COST ESTIMATES AND FINANCING A. Cost Estimates 3.01 Detailed cost estimates, based on incremental costs for carrying out the project over a five-year period, are given in Annex 1, Tables 1 to 7. The following table summarizes the costs: Rs. Million US$ Million a/ % Foreign Category Local Foreign Total Local Foreign Total Exchange Equipment & Vehicles 12.6 5.8 18.4 1.6 0.7 2.3 26 Civil Works 10.0 - 10.0 1.2 - 1.2 - Incremental Operating Costs 7.0 4.9 11.9 0.9 0.6 1.5 32 Incremental Staff Costs 16.4 - 16.4 2.0 - 2.0 - Training 4.7 0.8 5.5 0.6 0.1 0.7 12 Total Base 50.7 11.5 62.2 6.3 1.4 7.7 18 Cost Contingencies Physical 0.5 - 0.5 0.1 - 0.1 Price 13.1 2.5 15.6 1.6 0.3 1.9 - TOTAL PROJECT COST 64.3 14.0 78.3 8.0 1.7 9.7 15 a/ Converted at the rate of US$1.0 = Rs 8.0 These costs include about US$1.0 M in duties and taxes and an estimated US$1.7 M in foreign costs. Physical contingencies of 5% have been applied to civil works. Price contingencies have been applied as follows: 1982 - 11%, 1983 - 8.5%, and - 1984-86 - 7.5% per annum, and compounded accord- ingly.  -21- B. Proposed Financing 3.02 Finance to cover total project costs of Rs 70.3 M (US$8.7 M) including contingencies, but net of taxes and duties would be provided as follows: Amount Source US$ Million Percentage IDA 6.0 69 GOAP/GOI 2.7 31 TOTAL 8.7 100 The proposed IDA Credit of US$6.0 M would be to GOI on standard terms and conditions and would finance about 69% of project costs, net of taxes and duties, but including estimated foreign exchange costs of US$1.4 M. IDA funds would be channeled through GOI to GOAP in accordance with GOI stand- ard arrangements for IDA-assisted state development projects. The balance of project financing, beyond IDA financing, would come from state govern- ment sources and GOI. GOAP has made adequate budgetary provision for the operation of the first project year. 3.03 Since GOI/GOAP have already initiated action to deploy staff and procure transport and equipment, provision has been made for financing retroactively, up to US$ 200,000, of expenditure on these items incurred after January 1, 1982. Procurement 3.04 The main items to be financed are: vehicles including bicycles and motorcycles; equipment-; houses for VEOs; training; project monitoring and evaluation; and incremental staff costs. Civil works contracts (US$1.2 M) for 195 houses and 4 hostels, would be small and dispersed, both geographically and over time; therefore, they would not be conducive to international competitive bidding. Contracts would be awarded on the basis of competitive bidding following local advertisement. There are numerous qualified local contractors to carry out such work. Arrangements for preparing tenders and overseeing construct:ion were discussed during negotiations. All contracts for civil works, equipment and furniture estimated to cost US$100,000 or more would be reviewed by IDA both before bids are invited and contracts awarded. 3.05 About 81 motor vehicles (US$0.7 M) of various types would be required under the project. They would be purchased in small quantities  -22- over three years and would be widely dispersed in rural areas. As ade- quate maintenance and availability of spare parts would be of paramount importance, this would necessitate purchase of locally made vehicles of types already used by government departments. Thus, procurement would be according to existing government procedures, which are competitive and satisfactory to IDA. This includes procurement under retroactive financ- ing. Motorcycles (876) and bicycles (6,822) (US$1.4 M) would be purchased by individual staff from loan funds provided by the state government. 3.06 Orders for purchase of minor equipment and furniture (US$0.2M) would be bulked wherever possible and purchased according to established local bidding procedures, except where valued at less than US$50,000 when they would be purchased by prudent shopping through normal trade channels. Assurances on procurement procedures mentioned in paras. 3.04-3.06 were obtained during negotiations. 3.07 The balance of project costs (US$4.2M) would consist of training and fellowships (US$0.7M), incremental salaries and allowances (US$2.OM), and incremental operating expenditures for offices and vehicles (US$1.5M) which would not involve procurement.l/ All of the above figures exclude contingencies which amount to US$2.0M. D. Disbursement and Audit 3.08 Disbursement under the credit would extend over five years and would be made against: a. 100% of all training costs; b. 50% of the cost of civil works; c. 80% of the cost of vehicles, equipment, furniture, and materials and of amounts disbursed for motorcycle and bicycle loans; and d. 70% of incremental staff costs. 2/ I/ The cost of Monitoring and Evaluation (US$0.8M) is included in dif- ferent categories mentioned above. 2/ Incremental staff costs eligible for partial reimbursement would be the following: 75 incremental Assistant Directors of Agriculture, i.e. 36 ADA (SMS) at district level, 38 ADA (SMS) in revenue divisions and one ADA(s); the incremental cost of salary of Additional Director of Agriculture; the cost of upgrading 1,000 VEO; and staff of monitoring and evaluation unit.  -23- 3.09 Disbursements against expenditures for staff costs, training, payments for locally procured vehicles and equipment of Rs. 150,000 or less, payments under civil works contracts not exceeding Rs. 300,000 would be against certified statements of expenditures, the documentation for which would not be submitted to IDA for review but would be retained by GOAP and Department of Economic Afcairs (DEA). These documents would be available for inspection by IDA during the course of project review mis- sions. Disbursement against all other items would be fully documented. Certificates of expenditures would be audited at least once every year and a report submitted to IDA promptly thereafter. All disbursement applica- tions would be forwarded and processed 1:hrough DEA. Schedules of implementation and project disbursements are presented in Annex 3, Tables 1 and 2. 3.10 Assurances were obtained that separate accounts would be kept of expenditures made under the project. These would be audited annually for each fiscal year, in accordance with sound auditing principles consis- tently applied and the audit reports submitted to IDA as soon as avail- able. In addition, certified copies of project: accounts would be sub-* mitted to IDA within nine months of the end of the fiscal year. Such reports and audits would show, inter-alia, that: the funds withdrawn were used for the purpose intended, that goods have been received or work performed, and that payments have been made. All reports would be sub- mitted by GOAP to the DEA (GOI) for onward transmission to IDA. IV. ORGANIZATION AND MANAGEMENT Extension Service 4.01 The project would introduce fundamental improvements in the organization and management of extension operations in Andhra Pradesh. By establishing a single line of control from extension headquarters to VEO (see organizational chart), field level staff becomes directly accountable to their supervisors both technically and administratively. Each would follow a fixed schedule of visits to specific groups of farmers. The schedule would be known to farmers. Each AO would supervise about 8 VEOs, spending at least four days a week in the field assisting and guiding them. The ADA provided under the project would be responsible for ensur- ing that AOs in his division work effectively. To do this, ADA would need to spend about the same time in the field as the AO and he would also attend fortnightly training sessions. SMS at the division level would provide essential technical support as described in para. 2.06. ADA is directly responsible to the District DDA or JDA.  -24- 4.02 The DOA headquarters organization would be streamlined to provide effective management and technical support to the extension service as a whole. While overall responsibility for general agricultural development in the state rests with the Secretary of Agriculture and the Director of Agriculture, the Add'l DA (Extension) would be responsible for the day-to-day operations and management of the extension service both techni- cally and administratively. Subject to the policy directions of the Secretary and Director of Agriculture, the Add'l DA (Extension) would be responsible for training and management of extension personnel. He would visit the field frequently to check on the effectiveness of extension operations. Add'l DA (Extension) would have a technical support staff of three SMSs at the headquarters (one for extension, one for adaptive trials and one for training) plus the support of three other JDAs at head- quarters. Add'l. DA (Extension) would also be assisted by a small administrative and accounting staff to help keep records of project expen- ditures and prepare progress reports, etc. State Level Coordination 4.03 Coordination at the state level between extension and allied agencies would be ensured through establishment of a Project Coordination Committee. The-Committee would be chaired by the Secretary for Agricul- ture and would include the Vice Chancellor of APAU or his nominee, Direc- tor of Agriculture, representatives of concerned government departments and other agencies (Finance, Irrigation, Cooperative and input supplying agencies). The Add'l DA (Extension) would act as Secretary to this Com- mittee. The Committee would meet at least twice a year to revie-w progress in project implementation and to resolve any problems that may arise. An assurance was obtained that such a committee would be established and start functioning before September 30, 1982. Linkages Between Extension and Research 4.04 As-neither research nor extension can function without close cooperation it would be necessary to formalize their responsibilities. APAU is fully responsible for the development of suitable new technology while the Department of Agriculture will assume responsibility for trans- fer of technology to farmers, including widespread testing of research recommendations on farmers' fields. The research programs of APAU and Indian Council of Agricultural Research (ICAR) would continue to identify and select improved varieties of important crops, and also identify economically appropriate practices directed to substantially increasing crop production and, at the same time, lowering farmers' risk. Selected varieties and production practices would then be tested at regional research stations, seed farms, and on farmers' fields located in different agro-climatic regions. Before Credit negotiations DOA and APAU concluded a memorandum of understanding between them, setting out the terms of APAU's support to extension.  -25- 4.05 The key link between the APAU and DOA would be the monthly dis- trict workshops which would have three functions: (1) to train SMSs, (ii) to review recommendations and on the basis of observations and experience, to adapt them for transmittance to VEOs and AOs, and (iii) to suggest modifications to the farm trial program for consideration by the pre-season zonal workshop. The district DDA/JDA and the Extension Agronomist at the RRS would jointly organize these sessions with the SMSs at District and Division level. The Extension Agronomist will organize participatian of the University research staff from the regional or sub-station as may be appropriate. These workshops would be held in one of the research stations or demonstration farms (16 locations have been identified). 4.06 The pre-seasonal, zonal workshops currently held in the St-ate would continue. The participants of the zonal workshop would be the following: (a) Scientists of the Regional Research and Crop Research Stations (b) Scientists of the Project Development and Demonstration Farms (c) Divisional ADAs (d) Divisional SMSs (e) District DDAs/JDAs/SMSs (f) 2-3 scientists of the APAU to be nominated by the Director, Research, APAU, including Extension Agronomists (g) Headquarter SMSs (h) Headquarters JDAs/DDAs to be nominated by DA/Add'l DA The workshop would be held at the RRS of the zone and chaired by the Associate Director. The objective of the workshop would be to: (a) review and evaluate the farm trials and formulate the program for next season. (b) discuss the program for applied research and the location of trials. RRS, Crop Research Stations as well as Directorate's Farms should be used for this purpose according to their suitability.  -26- (c) screen the research and farm trial results for adjustment of the extension recommendations of farm practices for the zone. It is essential that the previous season's data of both applied research and field trials should be fully analyzed by the RRS well before the seasonal workshop. 4.07 Zonal recommendations will be considered at a State Level Workshop to be held before each season - Kharif and Rabi. It would be presided over by the Vice Chancellor, APAU and would be attended by: (a) Director of Research, APAU (b) Director of Extension, APAU (c) Heads of all disciplines of APAU (d) All Associate Directors of RRSs (e) Director of Agriculture (f) Additional Director of Agriculture (g) Zonal Joint Directors of Agriculture (h) Such other officers of the Department of Agriculture as may be designated by the Director of Agriculture The objective would be to: (a) review the program of research and extension cooperation and coordination; (b) determine the research priorities and finalize the applied and adaptive research programs on the basis of the recommen- dations of the zonal workshops; and (c) screen the zonal extension recommendations for farm prac- tices, and finalize them for the season. For graphic presentation of working relationship between extension and research, see Chart No. 23340. Farm Trials 4.08 Although APAU is responsible for all basic and applied research and the DOA for extension and adaptive research, there is some amount of overlapping between the two. The technology developed by the University  -27- requires testing in multi-locational trials under various agro-ecological situations by replicated scientific experiments on Regional Research Stations, Crop Research Stations, DOA farms and, if need be, on farmers' fields. The APAU after conducting multi-locational trials, would suggest topics with few treatments (confirmed in modification trials) to be tried by the extension staff, to guide adjustment of general recommendations to specific farmers' conditions. The T&V extension system does not envisage any Government supported demonstrations in farmers' fields. The best demonstration is one where the farmer successfully adopts a recommended practice or set of practices. The extension worker would give full tech- nical guidance to farmers in trying the recommendations. The objective of adaptive research (farm trials) is to refine arLd adjust the applied research results to particular situations to make them location and farmer specific. They will need to be adjusted to: (a) Different cropping patterns; (b) Farmers' skill; (c) Farmers' resource and risk situation; and (d) Local agro-climatic variations. The farm trial program would be initially planned in the district monthly workshop on the basis of different farm situations in the district and would be executed by the District and Divisional SMSs, AOs and a few selected VEOs where possible. The Extension Agronomist at the research station would assist the district and division SMSs to plan the number and nature of such trials and their locations. Assignment of the trials to the SMSs, AOs and selected VEOs would be the responsibility of the Dis- trict DDA/JDA in consultation with the Divisional ADA. The trials would ordinarily be single plot, unreplicated, with accurate observation and minimum data keeping, for which the necessary data sheets should be prepared by APAU. The data should be analyzed and discussed in zonal workshops. The District DDA/JDA would be responsible for collection of the data in time for analysis. A few of these trials may be taken up in the DOA farms where available, provided fields typical of the locality are available. Participant farmers (who often would be contact farmers) would meet the cost of the trials. Training 4.09 APAU and senior SMSs from DOA would assist in providing monthly training of SMSs who are responsible for the fortnightly training of VEOs/Aos in the districts. JDA/DDA and ADA also would participate. The duration of training would be two days. The training would serve the following objectives:  -28- (a) To review field developments since previous training: (i) how extension recommendations were used in VEO training; (ii) problems in extending recommendations; and (iii) problems posed by farmers in adopting them under normal and special situations like drought, epidemic attack of pest/diseases and flood; (b) To identify clearly and provide training on the most impor- tant recommendations that should be made during the next two fortnights, keeping in mind, experience and field conditions; and (c) Review the current farm trials program, and plan future program. For a full review of training, see Annex 2. Monitoring and Evaluation 4.10 A Joint Director of Agriculture at headquarters would have respon- sibility to the Director of Agriculture for monitoring and evaluation (M&E). He would be assisted by a statistician, an economist and other staff. The M&E methodology would conform to the 'Manual of Instructions' designed for T&V extension system in India. Results of the monitoring and evaluation unit would be reviewed each season by a committee comprising the Secretary of Agriculture (Chairman), the Director of Agriculture and Add'l. DA (Extension). V. BENEFITS, JUSTIFICATION AND RISKS 5.01 Total project costs over the five year development period, exclud- ing price contingencies, amount to US$7.7 M, which is US$0.68 per hectare of cropped land or US$1.40 per farm family, assuming 5.50 M farm families. Incremental costs after the project development period to be met from state budget sources, would be about US$1.5 M annually or US$0.30 per farm family. Incremental costs would be partly recovered through market levies on agricultural produce entering commercial markets. 5.02 Economic Benefits. Attributing a precise level of benefits to this type of project is difficult since it is not possible to determine what proportion of benefits are due to extension alone and what are due to additional purchased inputs and other factors. In practice, it is the combination of a number of factors, with extension playing the role of a catalyst, that brings the desired benefits. It is also difficult to estimate acceptance rates of recommended practices. However, since the project relies primarily on reorganization and strengthening of an exist- ing extension structure, the incremental cost is low per hectare and per  -29- farm family. Hence, even very small and slow production increases in the project areas would generate a high rate of return. This project would be able to generate a 50% rate of return if, by 1989, yields of paddy (3.7 M ha) and sorghum (2.3 M ha) (which covers 62% of cropped land area) increase by only 6 kg/ha and 2 kg/ha, respectively and which requires an increase of under 1% over currenc yields of bot:h the crops. Details are given in Annex 4, Table 1. Yield increases have far exceeded this level where the extension system is operating effectLvely for a few years. One significant feature of the system is that the practices initially stressed by the extension service focus on improving cultural practices (timely operations, good land preparation, proper seed rates, line sowing and weeding) to maintain adequate and healthy planit populations over unit area cultivated; as these operations usually involve more work and little cash outlay, they are particularly well-suited to the needs of many small farmers. 5.03 Project Risks. The transfer of multi-purpose field workers and establishment of a single, unified professional extension service marks a major departure from past practice in India. The fact that such a reform is underway in large parts of the country reflects a willingness to develop an extension system capable of serving all farmers well. Neverthe- less, it is difficult for governments to make and maintain such decisions. The main risk, therefore, is that the state government would find it difficult to maintain a single line of command from extension headquarters to the VEOs who work exclusively on agriculture. In this project these risks are relatively low because only a small proportion of field staff are to be transferred from another department. To reduce these risks further, efforts were made during project preparation and appraisal to ensure full understanding of the importance of this by the Andhra Pradesh State Government. In addition, an assurance would be obtained during negotiations that the VEOs would remain as fulltime agricultural extension workers throughout the project period, and that their seniority, emolu- ments and other benefits would be protected. Staff changes in the upper ranks of government are frequent and there is the additional risk of lack of sustained, informed and motivated management. To avoid this, it will be necessary for IDA to continue to supervise these projects closely and frequently, and provide constant encouragement and assistance to state government until the principles of the extension reform become fully accepted and permanently institutionalized. 5.04 Experience has shown other risks to be minimal. Farmers' respon- siveness to recommendations has been generally excellent wherever visits are made systematically. In addition, VEOs have gained confidence in their own professional ability to introduce innovations. The ability of the service to develop and disseminate recommendations leading to yield increases well above the level needed for a 50% return has been demon- strated adequately. Initially, in most situations, availability of suitable technology for different conditions has not been a constraint as  -30- there is a backlog of research findings as yet not widely adopted. Major yield increases are possible even in the process of bringing the produc- tion level of average farmers to that of best farmers. To reduce the risk of technological constraints lowering anticipated project benefitsl, the project supports programs of field testing of research results and development of good working relationships with the Andhra Pradesh Agricul- tural University to ensure a continuous flow of recommendations adapted to specific regional problems. VI. AGREEMENTS REACHED AND RECOMMENDATIONS 6.01 At IDA's request GOAP had taken the following actions before credit negotiations: (a) established the post of Add'l. DA (Extension), filled this position with a suitably qualified officer, and assigned to him full-time responsibility for implementation of the project, i.e. he would have no duties other than day-to-day management of the extension service (para. 2.11); (b) issued a government order transferring 3000 positions of VDOs from the Panchayati Raj Department to DOA along with the budget and retaining them for extension work (para. 2.14); (c) made adequate budgetary provision for the operation of the first project year (para. 3.02); and (d) concluded a memorandum of understanding between GOAP and APAU as to the role of APAU in project implementation (para. 4.04). 6.02 During negotiations, assurances were obtained from Government of India and Government of Andhra Pradesh on the following matters: - (a) GOAP would fill incremental staff positions and deploy staff according to or earlier than the schedules shown in Annex 1, Tables 7 and 8 (para. 2.13); (b) GOAP would ensure that VEOs and AOs would be used exclusively for agricultural extension work under the project, and that they would not be adversely affected in respect of their entitlement to emoluments, benefits and promotional prospects by reason of the assignment (para. 2.16);  -31- (c) GOAP would ensure that cashewnut farmers will receive exten- sion coverage under the new T & V extension system and all other services would continue to be provided under the Cashewnut Project (Credit 1012-IN) (para. 2.17); (d) GOAP would ensure that credit and travel allowances would be made available to staff on such terms and conditions as to create incentives for the purchase and use of motorcycles and cycles (paras. 2.21 and 2.22); (e) GOAP would undertake monitoring and evaluation of the projects in the form already agreed with the GOI. Further, GOAP would forward to IDA (through DOA), a yearly summary of results in a form acceptable to IDA (para. 2.26); (f) GOAP would implement procurement procedures outlined in paras. 3.04 - 3.06; (g) GOAP would prepare and present to DOE for transmission to IDA, administrative and financial data regarding progress of project, including procurement of goods and services, civil works, expenditures, audit and requests for disbursements in accordance with the time schedules agreed (para. 3.10); (h) GOAP would establish a Project Coordination Committee to meet before September 30, 1982 and twice a year thereafter (para. 4.03); and 6.03 With these conditions and assurances, the project would be suitable for a credit of US$6.0 M to GOI on standard IDA terms.  Annex 1 Table 1 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT SUMMARY OF PROJECT COST (Rs. '000) Foreign Exchange Year 1 Year 2 Year 3 Year 4 Year 5 Total 2 Cost Incremental Staff Costs Base Cost 3,282.0 3,282.0 3,282.0 3,282.0 3,282.0 16,410.0 Physical Contingency - - - - - - Price Contingency a/ 361.0 525.0 820.5 1,116.0 1,444.0 4,266.5 Total 3,643.0 3,807.0 4,102.5 4,398.0 4,726.0 20,676.5 - Civil Works Base Cost 1,755.0 2,655.0 2,080.0 1,755.0 1,755.0 10,000.0 Physical Contingency b/ 88.0 132.5 104.0 88.0 87.5 500.0 Price Contingency aT 193.0 425.0 520.0 596.5 772.0 2,506.5 Total 2,036.0 3,212.5 2,704.0 2,439.5 2,614.5 13.006.5 - - Equipment and Vehicles Base Cost 5,672.0 5,222.5 3,030.5 2,207.5 2,235.0 18,367.5 Physical Contingency - - - - - - Price Contingency a/ 624.0 836.0 757.5 750.5 975.5 3,943.5 Total 6,296.0 6,058.5 3,788.0 2,958.0 3,210.5 22,311.0 26% c/ 5,694.0 Incremental Operating Cost Base Cost 1,551.0 2,143.5 2,478.5 2,733.5 2,990.5 11,897.0 Physical Contingency - - - - - - Price Contingency a/ 170.5 343.0 619.5 929.5 1,316.0 3,378.5 Total 1,721.5 2,486.5 3,098.0 3,663.0 4,306.5 15,275.5 32% 4,878.0 Training Base Cost 640.0 1,039.0 1,174.0 1,309.0 1,309.0 5,471.0 Physical Contingency - - - - - - Price Contingency a/ 70.5 166.0 293.5 445.0 576.0 1,551.0 Total 710.5 1,205.0 1,467.5 1,754.0 1,885.0 7,022.0 12% 820.5 TOTAL Base Cost 12,900.0 14,342.0 12,045.0 11,287.0 11,553.5 62,145.5 Physical Contingency 88.0 132.5 104.0 88.0 87.5 500.0 Price Contingency 1.419.0 2,294.5 3,011.0 3,837.5 5,083.5 15,645.5 GRAND TOTAL 14,407.0 16,769.0 15,160.0 15,212.5 16,742.5' 78,291.0 15% 11,392.5 a/ Inflation rate applied cummulatively at 11%, 16%, 25%, 34% and 44% respectively for project years 1 through 5. b/ Physical contingenctes calculated at 5%. c/ Weighted average of vehicles (2'%) and A.V. equipment (40%).  Annex 1 Table 2 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT INCREMENTAL STAFF SALARIES AND INCENTIVES (Rs. '000) Annual Year 1 Year 2 Year 3 Year 4 Year 5 Unit Cost No. Cost No. Cost No. Cost No. Cost No. Cost Total Cost Headquarters Additional D.A. (Ext.) a/ 3.0 1 3.0 1 3.0 1 3.0 1 3.0 1 3.0 15.0 District Assistant Director of Agriculture (SMS) b/ 20.0 36 720.0 36 720.0 36 720.0 36 720.0 36 720.0 3,600.0 Revenue Divisions Assistant Director of 20.0 1 20.0 1 20.0 1 20.0 1 20.0 1 20.0 100.0 Agriculture (Regular) Assistant Director of Agriculture (SMS) 20.0 38 760.0 38 760.0 38 760.0 38 760.0 38 760.0 3,800.0 Field Level Upgrading Village Extension Officers 0.99 1,000 990.0 1,000 990.0 1,000 990.0 1,000 990.0 1,000 990.0 4,950.0 Monitoring and Evaluation Cell c/ 789.0 789.0 789.0 789.0 789.0 3,945.0 TOTAL 3,282.0 3,282.0 3,282.0 3,282.0 3,282.0 16,410.0 a/ Upgraded from the existing Senior JDA post, the incremental cost is the difference in salary of Add'l DA and Senior JDA, i.e., Rs. 250/-per month. b/ For the 13 districts which are being headed by DDA. The other 10 districts headed by Joint Director of Agriculture already have SMSs of DDA level; (3 ADAs (SMS) Hyderabad Urban District deleted). c/ Includes headquarter and district staff. See Table 7.  Annex 1 Table 3 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT CIVIL WORKS (Rs. '000) Unit Year 1 Year 2 Year 3 Year 4 Year 5 Total Qty. Cost No. Cost No. Cost No. Cost No. Cost No. Cost Cost VEO Quarters 195 45.0 39 1,755.0 39 1,755.0 39 1,755.0 39 1,755.0 39 1,755.0 8,775.0 Training Inst. a/ 4 300.0 - - 3 900.0 1 325.0 - - - - 1,225.0 1,755.0 2,655.0 2,080.0 1,755.0 1,755.0 10,000.0 TOTAL a/ Additional nostel accomodation at 4 GSTCs.  Annex 1 Table4 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT INCREMENTAL VEHICLES AND EQUIPMENT (Rs. '000) Unit Year 1 Year 2 Year 3 Year 4 Year 5 Total Type Qty Cost No. Cost No. Cost No. Cost No. Cost No. Cost Cost Vehicles a/ Zones Car 6 80.0 2 160.0 2 160.0 2 160.0 - - 480.0 Districts b/ Car 10 80.0 3 240.0 3 240.0 4 320.0 - - - 800.0 4-WD 12 71.0 6 426.0 6 426.0 - - - - - - 852.0 Divisions 4-WD 52 71.0 26 1,846.0 26 1,896.0 - 3,692.0 AOs Motorcycles 853 9.0 170 1,530.0 170 1,530.0 170 1,530.0 170 1,530.0 173 1,557.0 7,677.0 VEOs Cycles 6,776 0.5 1,355 677.5 1,355 677.5 1,355 677.5 1,355 677.5 1,356 678.0 3,388.0 M&E Unit c/ 4-WD 1 71.0 1 71.0 - - - - - - - - 71.0 Motorcycles 23 9.0 23 207.0 - - - - - - - 207.0 Cycles 46 0.5 46 23.0 - - - - - - - - 23.0 Sub-total - 5,180.5 4,879.5 2,687.5 2,207.5 2,235.0 17,190.0 Office Equipment , and Furniture M&E Unit c/ - - - - 91.5 91.5 Sub-total - 91.5 91.5 Audio-visual Equipment Division (SMS) Set d/ 67 13.3 25 332.5 21 279.5 21 279.5 - - _ _ 891.5 Misc. e/ 67 1.0 25 25.0 21 21.0 21 21.0 - - - - 67.0 AO Misc. f/ 851 0.15 284 42.5 284 42.5 283 42.5 - - - - 127.5 Sub-total 400.0 343.0 343.0 1,086.p3 TOTAL 5,672.0 5,222.5 3,030.5 2,207.5 2,235.0 18,367.5 a! DOA has a pooling system at headquarters where it has 18 vehicles. Total vehicles available with the the Department are 263. b/ The existing jeep with JDA at the district level will go to SMS. c/ Includes headquarters and district equipment. See Table 7. d/ Equipment set for Division: Slide Projector at Rs. 1,300; Overhead Project at Rs. 5,000; Public Address System at Rs. 6,000; Slide Sets at Rs. 1,000. e/ Slide Viewer, Folding Easel, Rolling Blackboard, Specimen Box, etc. f/ Magnifying Glass, Rolling Blackboard, Flannel Board, Measuring Tape, etc.  Annex I Table 5 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT INCREMENTAL OPERATING COSTS (Rs. '000) Annual Year I Year 2 Year 3 Year 4 Year 5 Total Unit Cost No. Cost No. Cost No. Cost No. Cost No. Cost Cost Incremental Traveling Allowances & Expenses ADAs/ADA (SMS) a/ 2.88 75 216.0 75 216.0 75 216.0 75 216,0 75 216.0 1,080.0 AO b/ 1.50 170 216.0 340 510.0 510 765.0 680 1,020.0 853 1,276.5 3,826.5 M&E Unit f/ - 1 185.5 1 185.5 1 185.5 1 185.5 1 186.0 928.0 Sub-to tal- 656.5 911.5 1,166.5 1,421.5 1,678.5 5,834.5 Vehicle Operating Cost Zones - cars c/ 15.0 2 30.0 4 60.0 6 90.0 6 90.0 6 90.0 360.0 Districts - cars dI 12.5 3 37.5 6 75.0 10 125.0 10 125.0 10 125.0 487.5 4-WD d/ 12.5 6 75.0 12 150.0 12 150.0 12 150.0 12 150.0 675.0 Division - 4-WD e/ 7.5 26 195.0 52 390.0 52 390.0 52 390.0 52 390.0 1,755.0 M&& Unit - 4-WD f/ - 1 125.0 1 125.0 1 125.0 1 125.0 1 125.0 625.0 Sub-total - 462.5 800.0 880.0 880.0 880.0 3,902.5 Office Operating Expenses M&E Unit f/ 30.0 1 30.0 1 30.0 1 30.0 1 30.0 1 30.0 150.0 Division g/ 6.0 67 402.0 67 402.0 67 402.0 67 402.0 67 402.0 2,010.0 Sub-total - - 432.0 432.0 432.0 432.0 432.0 2,160.0 TOTAL 1,551.0 2,143.5 2,478.5 2,733.5 2,990.5 11,897.0 a/ Traveling Allowances at Rs. 240/- per month. b/ Motorcycle conveyance allowance at Rs. 125 p.m. per head; and existing FTA of Rs. 150 p.w. is paid. c/ 30,000 km. per year at Rs. 0.50/km. d/ 25,000 km. per year at Rs. 0.50/km. e/ 15,000 km. per year at Rs. 0.50/km. f/ See Table 7. g/ Includes rent for office building at Rs. 500 p.m. for each division.  Annex I Table 6 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT TRAINING COST (Rs. '000) Unit Year I Year 2 Year 3 Year 4 Year 5 Total Type of Training Cost Number No. Cost No. Cost No. Cost No. Cost No. Cost Cost Pre-seasonal Trg. VEO/AO a/ 0.05 680 136 7.0 136 7.0 136 7.0 136 7.0 136 7.0 35.0 Pre-seasonal Trg. ADA/SMS b/ 0.5 60 12 6.0 12 6.0 12 6.0 12 6.0 12 6.0 30.0 Short Courses VEO c/ 0.1 240 48 5.0 48 5.0 48 5.0 48 5.0 48 5.0 25.0 Short Courses AO/SMS d/ 1.0 30 6 6.0 6 6.0 6 6.0 6 6.0 6 6.0 30.0 Refresher Courses, VEO e/ 0.125 11,250 2,250 281.25 2,250 281.25 2,250 281.25 2,250 281.25 2,250 281.25 1,406.25 Refresher Courses, AO f/ 0.125 850 170 21.25 170 21.25 170 21.25 170 21.25 170 21.25 106.25 Fortnightly Training 0.05 8,710 1,742 87.0 1,742 87.0 1,742 87.0 1,742 87.0 1,742 87.0 435.0 Monthly Workshop h/ 0.1 1,380 276 27.5 276 27.5 276 27.5 276 27.5 276 27.5 137.5 Overseas Training SMS 40.0 20 - - 5 200.0 5 200.0 5 200.0 5 200.0 800.0 Promotional Trg. B.Sc, (Ag.) VEO i/ 2.7 250 50 135.0 100 270.0 150 405.0 200 540.0 200 540.0 1,890.0 Promotional Trg. AO (SMS) j/ 3.2 100 20 64.0 40 128.0 40 128.0 40 128.0 40 128.0 576.0 TOTAL 640.0 1,039.0 1;174.0 1,309.0 T.309.0 5.471.0 a/ Rs. 50 per course, twice a year in each division, 2-3 days. b/ Rs. 500 per course, twice a year in each zone, 2-3 days. c/ Rs. 100 per course, six courses a year in each of 4 GSTC and 3 FTC, one week. d/ Rs. 1,000 per course, six courses a year at APAU, one week. e/ Rs. 125 per VEO stipend for six weeks one course per VEO every three years. 8 centers x 6 courses a year x 50 participants f/ Rs. 125 per AO stipend for six weeks one course per AO every 5 years at APAU. g/ Rs. 50 per session to meet cost of training materials. 67 divisions x 26 fortnights. h/ Rs. 100 per workshop for training materials. One workshop per district per month. Ti/ Rs. 225 per month stipend for 4 years, as per G.O.I. Lr. No. 2-2/81-PT dt. 12.5.81, 50 VEOs per year. / Rs. 225/- per month stipend for 2 years, plus Rs. 500 for fees, books, etc. per year; 20 AO/SMS per year.  Annex 1 - 38 - Table 7 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT MONITORING AND EVALUATION CELL (Rs. '000) Unit To tal No. Cost Year 1 Year 2 Year 3 Year 4 Year 5 Cost STAFF Hea dquar ter s Joint Director of Agric. (Statistics) a/ 1 26.5 26.5 26.5 26.5 26.5 26.5 132.5 Assistant Statistician 1 18.0 18.0 18.0 18.0 18.0 18.0 90.0 Statistical Assistants 2 12.0 24.0 24.0 24.0 24.0 24.0 120.0 Computers 4 9.5 38.0 38.0 38.0 38.0 38.0 190.0 Stenographer 1 9.5 9.5 9.5 9.5 9.5 9.5 47.5 Typist 1 8.0 8.0 8.0 8.0 8.0 8.0 40.0 Driver 1 7.0 7.0 7.0 7.0 7.0 7.0 35.0 District Statistical Assistants b/ 20 12.0 240.0 240.0 240.0 240.0 240.0 1,200.0 Field Investigators c/ 44 9.5 418.0 418.0 418.0 418.0 418.0 2,090.0 Sub-total - 789.0 789.0 789.0 789.0 789.0 3,945.0 EQUIPMENT Headquar ters 4-WD 1 71.0 71.0 - - - - 71.0 Office equipment d/ 1 31.5 31.5 - - - - 31.5 District Motorcycles 23 9.0 207.0 - - - - 207.0 Office equipment e/ 23 2.6 60.0 - - - - 60.0 Cycles 46 0.5 23.0 - - - - 23.0 Sub-total - 392.5 392.5 OPERATING COSTS Office expenditure f/ 1 30.0 30.0 30.0 30.0 30.0 30.0 150.0 Incremental T.A. g/ 1 185.5 185.5 185.5 185.5 185.5 186.0 928.0 Vehicle operating costs h/ 1 125.0 125.0 125.0 125.0 125.0 125.0 625.0 Sub-total - 340.5 340.5 340.5 340.5 340.5 1,703.0 TOTAL 1,521.0 1,129.5 1,129.5 1,129.5 1,130.0 6,040.5 a/ 1 Statistician of the rank of DDA already exists. b/ 3 Statistical Assistants already exist. c/ Field Investigators in West Godvari District already exist. d/ One Set = 2 typewriters, 4 calculators, 1 electric duplicator and office furniture (10 tables, 10 chairs and 5 steel cupboards). e/ One Set = 1 calculator and office furniture (1 table, 1 chair and 1 steel cupboard). f/ At Rs. 7,000 per year at headquarters and at Rs. 1,000 per year at each district. g/ Travel Allowance at Rs. 500 per month for JDA, Rs. 400 per month for Assistant Statisticians, Rs. 300 per month for Statistical Assistants, and Rs. 200 per month for Field Investogators. h/ At Rs. 0.50 per kilometer for 4-WD for 20,000 kms per year and Rs. 0.50 per kilometer for motorcycles for 10,000 per year. Office equipment costs: Typewriter = Rs. 3,500 Calculator = Rs. 1,000 (computers) Calculator = Rs. 300 (others) Duplicating Machine = Rs. 5,000 (electric operated) Duplicating Machine = Rs. 1,000 (hand-operated) Office Furniture = 1 Table = Rs. 600 1 Chair = Rs. 200 1 Steel Cupboard = Rs. 1,500 (headquarters = 5, Zones = 4x6 = 24, District 1 x 23 = 23).  Annex 1 _39- Table 8 iNDiA ANDNRA pRADESN AGRICULTURAL EXTENSION PROJECT RZQUIRENENT OF EXTENSION STAPP BY YEAR Year 1 Year 2 Year 3 Year 4 Year 5 Field V.E.O. Existing Yearly 6,776 - - - - Cumulative 6,776 6,776 6,776 6,776 6,776 New Yearly - - -, Cumulative - A.0. Existing Yearly 853 Cumulative 853 853 853 853 853 New Yearly - - -. Cumulative - Sub-Division A.D.A. (R) Existing Yearly 66 - Cumul tive 66 66 66 66 66 New Yearly I - - - Cumulative I 1 1 1 1 Special Grade A.O. a/ Existing Yearly 22 - - - - Cumulative 22 22 22 22 22 New Yearly - - Cumulative - S.M.S. (A.D.A.s) Existing Yearly 163 - - - Cumulative 163 163 163 163 163 New Yearly 38 - - - - Cunulative 38 38 38 38 38 District Principal Agr. Officer (J.D.A.) Existing Yearly 10 - - - - Cumulative 10 10 10 10 10 New Yearly - - - - - Cumulative - - - - - D.D.A. (R) Exi s ting Yearly 23 - - - - Cumulative 23 23 23 23 23 New Yearly - Cumulative - D.D.A. (SMS) Extsting Yearly 30 Cumulative 30 30 30 30 30 New Yearly - - - - - Cumulaative - - - A.D.A. (R) Existing Yearly 13 - - - - Cumulative 13 13 13 13 13 New Yearly - - - - - Cumulative - - - A.D.A. (SS) Existing Yearly - - - -- - Cumulative - - - New Yearly 36 - - - - Cumula tive 36 36 36 36 36 Zones Sr. J.D.A. Existing Yearly 6 - - - - Cumulative 6 6 6 6 6 New Yearly - Cumulative Headquarters Add'l D.A. (Extn.) Existing Yearly I Cumulative 1 1 1 1 1 New Yearly Cumula tive J.D.A. (1R) Existing Yearly 3 - - - - Cumulative 3 3 3 3 3 New Yearly - - - - - Cumulative - J.D.A. (SMS) Existing Yearly 3 Cumulative 3 3 3 3 3 New Yearly CUmU1ative a! Government orders have been issued to give selection grades to A.O.s as follows: Normal grade: 750 - 1,050 10 years service: 800 - 1,100 (Special Grade) 15 years service: 1,050 - 1,600 (Senior Special Grade) Senior Special Grade A.O.s with 15 years service get the same grade as A.D.A.s, i.e. Rs. 1,050 - 1,600.  Annex I Table 9 INDIA ANDHRA PRADESII AGRICULTURAL EXTENSION PROJECT STATEMENT SHOWING THE VEOs REQUIRED FROM THE PANCHAYATI RAJ DEPARTMENT AND OTHER STAFF REQUIRED, BY DISTRICTS ____________ VEOs AOs SMS Actual Net Net No. of No. of VEO Require- Add'l. Add'1. SMS re- SMS re- ment of Re- Actuial Re- No. of quirement required No. of Total quired lield Sub- Total Total one VEO quirement Exist- Re- ment RevenoLe at Sub- at Dist. Farm VEOs to be Asst. Asst. Col Ccl. for 800 of ing quire- of Sub-divi- divisional level Name of District Holdings a/ drafted b/ b/ 5 & 6 4 to 6 holdings VEOs AOs ment AOs sions level (ADAs)c/ (DDAs) _ (1) __ _ ___ _ _ __(2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) Srikakulam ) 482,696 340 246 115 242 357 603 603 _ 76 76 - 5 20 6 Vijayanagram ) East Godavari 267,606 360 146 106 83 189 335 335 - 43 43 - 4 16 3 Krishna 304,387 305 147 86 148 334 381 381 - 48 48 - 4 16 3 Kurnool 254,654 300 - 72 295 367 318 318 - 40 40 - 3 12 3 Ananthapur 265,379 230 168 53 110 163 331 331 - 42 42 - 3 12 3 Karimnagar 332,508 275 16 26 374 400 416 416 - 52 52 - 3 12 3 Khammam_ 178,484 150 9 38 176 214 223 223 - 28 28 - 3 12 3 Sub-total 2,085,714 1,960 683 496 1,428 1,924 2,607 2,607 - 329 329 - 25 100 24 Visakhapatnam 216,012 330 94 106 70 176 270 270 - 34 34 - 3 12 3 Guntur 330,553 430 - 66 389 455 413 413 - 51 5t - 3 12 3 Nellore . 220,051 340 163 60 52 112 275 275 - 35 35 - 3 12 3 Cuddapah 195,326 180 108 44 92 136 244 244 - 31 31 - 3 12 3 Chittoor 300,317 300 229 84 62 146 375 375 - 47 47 - 3 12 3 Nizamabad 201,825 155 98 76 78 154 252 252 - 33 33 - 3 12 3 Nalgonda 287,797 200 71 40 249 289 360 360 - 45 45 - 3 12 3 Sub-total 1,795,881 1,985 721 476 992 1,468 2,189 2,189 - 276 276 6- 21 84 21 West Godavari 245,558 385 147 95 65 160 307 307 - 38 38 - 3 12 3 Prakasam 263,795 66 88 71 171 242 330 330 - 41 41 - 3 12 3 Hyderabad ) 118,108 100 64 15 69 84 148 148 - 19 19 - 2 8 3 Rangareddy ) Mahbubnagar 253, 137 295 147 45 124 169 316 316 - 40 40 - 4 16 3 Medak 241 ,524 160 215 33 54 87 302 302 - 38 38 - 3 12 3 Adilabad 193,502 150 91 26 125 151 242 242 - 30 30 - 3 12 3 Warangal 267,224 230 265 28 42 70 335 335 - 42 42 - 3 12 3 Sub-total 1,582,848 1,386 1,017 313 650 963 1,980 1,980 _ 248 248 - 21 84 21 TOTAL 5,464,443 5,281 2,421 1,285 3,070 4,355 6,776 6,776 - 853 853 - 67 268 66 a/ At present with the Panchayat Department b/ Field Assistants and Sub-Assistants are with the Department of Agriculture., Field Assistants scale is 350-450. c/ 3 SMSs of A.D.A. rank and I A.D.A. (R) for each subdivision.  -41- Annex 2 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT Training 1. The Agriculture Extension Service has an important role in increasing agricultural productivity and thus farmers' incomes. To do this, farmers need knowledge and skills for efficient management of their crops, livestock, physical resources, and farm business as a whole. Essentials of success include incentives for production, evolving suitable technoloy, and availability of credit, inputs, transportation, and markets. The responsibility of the extension agents is to provide the farmer with the knowledge to improve his income, and to verify new tech- nology as it develops. A training program is thus essential for extension workers (VEOs/AOs) since they must be able to demonstrate to farmers the actual techniques of improved crop husbandry. The New Program 2. Training programs for extension workers and agricultural administrators (ADA (div.)/DDA/JDA dist.) must be strengthened to provide better dissemination of advice as a means of civercoming production con- straints and assist farmers in the adoption of improved husbandry prac- tices. The Training and Visit System is the basis for an improved exten- sion service. This service depends on sustained and regular training of extension workers and transfer of appropriate recommendations to farmers through regular visits by the VEOs. The keynote is continuous practical training of VEOs and AOs by SMSs who are conversant with the latest research results, active in the identificatiorn of local problems, and participate in local verification trials. Training in administration and management is required for the higher level oi- staff. Training Strategy 3. Since the extension service is to improve the quality of farming practices, training of research - extension - farmer teams must be such that it imparts the specific information needed. There is little merit in merely telling the farmer to do something. The farmer needs to know how to carry out a task. It is best if the extension worker actually works with the farmer in performing specific tasks. This implies that VEO actually works with the farmer in performing specific tasks and, likewise, AO and SMS who train VEOs must also be able to perform all tasks. Fur- thermore, trainers of SMSs (usually research workers and senior staff) need to be acquainted with farming operations and how they are best per- formed. This requires a change in present training methods from a reliance on lectures to "learning by doing". 4. The first step in designing of appropriate training programs is an identification of the skills and knowledge required by the farmer to improve his production. The second step is to identify which of these  -42- would be taught by VEO to the farmer. The order cE operation and their seasonal priority is then determined so that VEO can get appropriate training at the proper time. AO, as supervisor of VEO, would also need training in what is to be passed on to the farmer. AO should also be able to answer more advanced technical questions and to identify practical problems. For subdivisional and district SMS, even greater depth of knowledge is required so as to be able to instruct both VEOs and AOs. 5. Research workers have to develop ability to identify factors limiting farm production in the field and target research programs to the practical resolution of these problems. This implies joint farm visits by research and extension workers; cooperation in design, execution and analysis of trials on farmers' fields; and continuous exchange of informa- tion and ideas between research, extenson and farmers. Both this project and the National Agricultural Research Project support these activities. Tests and Demonstrations 6. To provide a measure of the effectiveness of training programs and permit tranees to assess progress, short tests of knowledge and demonstra- tion of skills would be integrated into the training program. Precourse testing would assist instructors in emphasizing those areas in which the trainees need the most assistance and eliminate instruction in areas in which they already possess adequate skill or knowledge. Precourse testing helps the trainee identify areas in which he needs assistance and thus provides some motivaton to learn. Testing may include identificaton of limiting factors such as diseases, insects, nutritional deficiencies, or demonstrations by the trainee of crop production techniques. Emphasis should be placed on the practical, rather than extensive, testing of written knowledge. Comparison of pre and post-course tests will permit the trainee to identify what he has learned and the instructor to evaluate the effectiveness and adequacy of his instruction. Training for Extension Workers 7. Fortnightly traning of VEOs and AOs by SMSs would be a major feature of the project. Additional and more specialized training would be provided for each category of extension worker. These are described as follows: Village Extension Officer (VEO) 8. Orientation Training. All VEOs would receive special training in extension methodology and the T&V System. 9. Fortnightly Training. A major feature of the T & V System is training of VEO once a fortnight. This training is carried out by SMS and reviewed by AO and his VEO in the alternate week. For sessions given by  -43- SMS, the basic training unit would be a group of 3D-40 VEOs and AOs. They would meet on a regular day, once in two weeks, to receive training from SMS and ADA of the subdivision, supported as necessary by district staff and research workers. Most sessions would be held where there are means for practical application of lessons taught, viz., a farmer's field, a seed farm, an experimental station, or a training center. Training would cover actual farm situations most likely to arise over the next two-week period. Time would be allowed for VEO to carry out field operations and practicals. During training, the VEO would have a chance to raise and discuss problems encountered in the previous fortnight. Representatives of cooperatives, banks, input agencies, agro-service units, and irrigation would be invited to attend part of the sessions to ensure coordination of related activities. On the intervening training day in each two-week period VEOs would meet with their AOs to review current problems. 10. Preseason Training. Prior to each of the two main agricultural seasons (kharif and rabi), VEOs would receive a 3 day training covering the main seasonal crops and practices recommended for them. The training would be held at subdivision level. The DDA, SMS and ADA (div.) would organize and attend this session. This training would initiate the exten- sion campaign for the coming season. 11. Special Short Courses. Some VEOs would be given traning in par- ticular disciplines/crops which are of special imlportance to their areas. 1z. Promotional Training. Training grants would be available to selected VEWs to enable them to obtain a degree and thus qualify for promotion as AOs. Agriculture Officers (AO) 13. Preservice Training. AOs would generally be university graduates. A number of them would be experienced VEOs promoted as AOs. 14. Orientation Training. All AOs would receive special training in extension methodology and the T & V extension system. 15. Fortnightly Training. AO would attend all training sessions of VEOs. They are expected to assist SMS in fortnightly training . In addition to visiting each VEO in the field, AO would conduct a review training meeting for the VEOs each fortnight as necessary. AO would also be given extra training by SMS to develop greater subject matter com- petency. 16. Preseason Training. The AO would participate in the 2-3 day preseason training prior to the main cropping seasons (kharif and rabi). The training would be held at district level and the training group would consist of university and state headquarters staf-f.  -44- 17. Special Short Courses. Selected AOs/SMSs would be given special- ized training for a week in particular crops and disciplines which are important to their area of operation. 18. Promotional Training. AOs/SMSs who show exceptional talent would be provided opportunities for higher training: AOs will be deputed for a two-year M.Sc. course at the four universities. Subject Matter Specialist (SMS) 19. SMSs play an important role in providing technical support and training to VEOs and AOs. There would be SMSs with different levels of training and competence at subdivisional, district and state levels. Selection criteria of SMSs has been considered at national level and following qualifications have been proposed for recruitment of fresh staff for guidance of the state governments: M.Sc. (Agri.) with specialization in agronomy or other dis- ciplines, preferably with two years of field experience.. 20. Orientation. Suitable instruction would be given in extension methodology and the T& V extension system to all SMSs. Their specific roles would be explained to them in detail. 21. Inservice Training. The SMSs would participate in the divisional workshop, preseason training, specialized short courses and monthly workshops. (a) Zonal Workshop: To provide effective training to VEOs and AOs once every two weeks, the SMSs would have to be up-to-date in their areas of specialization and ensure that training has a practical bias. (b) Preseason Training. The SMSs would participate in the 3 day preseason training prior to the main cropping seasons (kharif and rabi). The training would be held at district level. (c) Special Short Courses: In order to build up professional competence of SMSs it is considered necessary to provide them opportunities for higher training in agricultural univer- sities, and research institutions of national importance. SMSs with exceptional talent could be provided opportunities for training in such international research instituitins as IRRI (Philippines).  -45- 22. Promotional Training. Such of the SMSs who do not possess M.Sc. degree would be provided opportunities for higher training (M.S. Agri.) at one of the four universities. Administrative Personnel 23. In addition to subject matter training and training in extension methodology, administration and management training would be available to SMSs and other staff (ADA (div.), DDAs, Joint Directors and Sr. Jt. Directors Agr.). 24. Orientation. All supervisory personnel would undergo training in extension methodology and the T&V extension system. Their specific roles would be explained in detail. 25. In-service Training. Special training programs would be organized by the Director of Agriculture for staff at supervisory levels. Responsibilities 26. The Add'l DA (Extension), in consultation with APAU other appropriate agencies, would be responsible for planning and organizing all training programs. He would be assisted by the SMS team at headquarters. A summary of the perceived training activities is as under:  -46- Type of Training Participants Venue Duration Frequency Trainers 1. Pre-season VEO/AO Sub-div. 3 days 2x a year SMS/ADA *. Pre-season SMS/Sub-div./ Zone 3 days 2x a year SMS (HQ)/JDA district (Regional)/Univ. scientists 3. Special VEO FTC/GSTC 7 days 6 courses Institution Short Courses SPPI per center staff, SMS per year (distrist + HQ) 4. Special AO/SMS University 7 days 6 courses Research Insts. Short Courses per year and University (as needed) 5. Short Courses AO/SMS As organized by Gov't of India National/ as scheduled International Research Insts., by Gov't. ICAR 6. Refresher VEO FTC/GSTC/ 6 weeks 6 courses Institution Courses SSPI per year staff and guest per center lecturers 7. Refresher AO University 6 weeks 6 courses Research Courses per year Scientists HQ-SMS 8. Fortnightly VEO/AO Sub-div. I day Fortnightly SMS/ADA Training 9. Monthly SMS/SDAOs Res. stn. 2 days Monthly University Workshops sub-SDAO or suit- Scientists able SMS (Dist. + HQ) location 10. Promotional VEO University 4 years 50 per year Agric. College Training or Staff Scholarship 11. Promotional AO/SMS University 2 years 20 per year Agric. College Training Staff 12. Zonal Workshop SMS/ADA/ Agric. 2 days 2x a year Research DDA/JDA Zone Scientists SMS HQ/GOI  .47. Annex 3 Table 1 INDIA ANDHRA PRADESH AGRICULTURAL EXTEN'SION PROJECT Implementation Schedule Pre- Pre-Board Effect_ve- Month after Effectiveness' I tem Presentation ness 1 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 60 Civil Works Site Selection Prepare Tenders Cons truc tion 195 VEO 4 hostels Vehicles and Equipment Prepare Tenders Purchase Vehicles 38 37 6 Equipment ____ = Staff Appoint ADA (SMS) 38 Training Orienta tion All Other Coordination Commi ttees Project Monitoring Select/Appoint Staff Data Collection Base line survey evaluation  -48- Annex 3 Table 2 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT Estimated IDA Disbursements (USs Million) Disbursements Semester Cumulative (IDA FY) 1982 a/ 2nd 0.2 0.2 1983 1st 0.4 0.6 2nd 0.4 1.0 1984 1st 0.5 1.5 2nd 0.6 2.1 1985 1st 0.7 2.8 2nd 0.8 3.6 1986 1st 0.8 4.4 2nd 0.7 5.1 1987 1st 0.6 5.7 2nd 0.3 6.0 a/ Estimated effectiveness date May 15, 1982.  -49- Annex 4 Table 1 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT ECONOMIC ANALYSIS (Rs. '000) Benefits Incremental Incremental Total Total Cost Discount % Present Value Year Extension Training Costs Discounted Factor Benefits of Costs Costs at 50% Achieved Benefits 1 12,260 640 12,900 8,591 0.664 - - 2 13,303 1,039 14,362 6,368 0.444 10 0.044 3 10,871 1,174 12,045 3,565 0.296 30 0.088 4 9,978 1,309 11,287 2,224 0.197 60 0.118 5 10,245 1,309 11,554 1,514 0.131 80 0.105 6 10,245 1,309 11,554 1,005 0.087 90 0.078 7-20 10,245 1,309 11,554 1,964 0.170 100 0.170 25,231 0.603 The annual incremental value of crops (1980 prices) required from year 7 onwards to achieve a 50% rate of return is Rs 25,231 ------ M or Rs 42 M. 0.603 Present yearly Prices of Present Yearly Area Present Yield Production Crops Value of Crops Crop (1. ha) (kg/ha) (M tons) Rs. ton Rs. M Paddy 3.687 a/ 1,670 a/ 6.16 2,006 b/ 12,357 Jowar 2.338 a/ 580 a/ 1.36 1,045 c/ 1,421 13,778 To obtain Rs. 42M the yields of paddy and jowar must increase by 0.30%. The yield increase required would thus be: Paddy = 6 kg./ha. Jowar = 2 kg./ha. a/ Average 1974-75 tp 1979-80. b/ See Table 2. c/ Farmgate price has been used as jowar is not traded.  -50- Annex 4 Table 2 INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT Economic Price for Paddy US$ 1. Milled Rice - Bombay Price milled rice 25-35% broken f.o.b. Bangkok 358 a/ Add c.i.f. to Vishakhapatnam and handling to wholesale outlet 48 406 ton in Vishakhapatnam wholesale market - Rs.3,248/ton b/ 2. Cost of Milling and Handling rice from Farngate to Wholesale Market Rs./ton Paddy - Farm to mill, transport, in-store handling and storage charge Transport 25 r/ Milling and handling 40 d/ 65 - Paddy 98.5 - Milled Rice Milled Rice - Transport, storage and handling to wholesale market Transport, mill to railnead 82.5 e/ dandling to wholesale market 80.0 f/ 162.5 - Milled Rice Total - 261.0 Financial cost of Rs. 261/ton adjusted by SCF = 0.8 to give economic cost of Rs. 209/ton. 3. Economic Price of Paddy at Farmgate Imported rice Vishakhapatnam wholesale market (Rs. 3,248/ton) less milling and handling charges to Vishakhapatnam of Rs. 209/ton and converted to paddy at 66% g/ = Rs. 2,006/ton paddy. a/ World Bank Commodity Price Forecast, October 1979. b/ At exchange rate of US$1.0 = Rs. 8.0. c/ Transport from farm to railhead at Rs. 2.5/qtl. d/ Milling cost at Rs. 30.0/ton + Rs. 10/ton commission and other charges for 66% outturn. e/ Transport mill to Vishakhapatnam (say 150 km.) at Rs. 1.0 qtl./km for the 15 kms. and Rs. 0.5/qtl./km over. f/ Handling charges and commission. _/ Milling percentage.  -51- INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT ORGANIZATIONAL CHART Director of Agriculture Additional Directo Joint Director Joint Director Joint Director Additional Director . _ of Agriculture of Agriculture of Agriculture of Agriculture SMS SMS SMS Senior Joint DirectoAr of Agriculture Zone Joint Directors puty r s Directors A Agriculture1/ of Agriculture2/ or Division al r~~~~~~~~~Exenio of Agriculturn oftthir A rict ectors of Agriculture Agricuture Assistant Directors .(General Duties) (SMS) of Agriculture (General Duties) (SMS) of Agriculture Agr:Iclua Assistant Directors Agiutrl |Assistant Directors| I Agricultural of Agriculture Agiutrl |of Agriculture.| i Officers (M)Officers l (S ) l | Village iI Village l | Extension ll Extension l Officers ll Officers l 1/ One In each of the 10 larger Districts 21 One In each of the 13 smallI Districts WVortd B3ank - 23339  -52- INDIA ANDHRA PRADESH AGRICULTURAL EXTENSION PROJECT Linkages Between Extension and Research Departmpnt of - - State Extension Agricultural University Agriculture and Research Extension Agronomist AEr c lture W~~~~Vorkshop Zonal Workshops _ - (7 Zones) District JDA/DDA Monthly District Regiorial Research - ~~~~~Station and SMS - _ Workshop Extension Agronomist Subdivision ADA and SMS World Bank - 23340  77