Nepal - Second Agricultural Extension Project

Document of The World Bank FOR OMCIAL USE ONLY GA /3j?o>K , Repot N.. 5096-NEP NEP&L STAFF APPRAISAL REPORT OF THE AGRICULTURAL EXTENSION PROJECT II March 6, 1985 South Asia Projects Department General Agriculture Division This document a a restrited distibution and may be used by rcipients only in the performmance of their offichd duies. Us contets umxy not otherwise be discosed witht Wodd Bank autwhization.  CURRENCY EOUIVALENTS US$ 1 - Nepalese Rupees 18.5 WEIGHTS AND MESURES Metric System FISCAL YEAR July 16 - July 15 ABEREVIATONS AL - Agricultural Assistant AADO - Assistant Agricultural Development Officer ADBN - Agricultural Development Bank, Nepal ADO - Agricultural Development Officer AIC - Agricultural Inputs Corporation CSP - Cropping Systems Program CTC - Central Technical Comumittee DDG - Deputy Director General DG - Director General DOA - Department of Agriculture DTC - District Techuical Committee BMI - His Majesty's Government of Nepal ICP - Integrated Cereals Project JT - Junior Technician JTA - Junior Technical Assistant M4&A - Ministry of Agriculture PC - Project Coordinator PLAA - Panchayat Level Agricultural Assistant PO - Production Officer ROO - Research Outreach Officer RRC - Regional Research Coordinator RRS - Regional Research Station RTC - Regional Training Center S.EO - Senior Agricultural Extension Officer SMs - Subject Matter Specialist T&V - Training and Visit System  FOR OMCLIAL USE ONLY NEPAL AGRICULTURAL EXTENSION PROJECT II Table of Contents Credit and Project Summry Page No. I. BACKGROUND * .................................... ...... I A. Introduction ......................1 B. The Country .1 C. Agriculture in Nepal 2. 2 Agricultural Institutions 3 Bank's Role in the Agricultural Sector .. .6 D The Project Area ..7 The Terai Region .7............... .7 Nepal's Experience with Improved Extension. 8 Justification and Project Rationale .................. .. 11 II_ THE PROJECT . .12 A. General Description ................. ................... 12 Project Districts ...................................... 12 Project Phasing ....... ................................. 13 B. Detailed Features ........... ... .0 13 Agricultural Extension ............. .... 14 Strengthening of Engineering Unit ................. 21 Monitoring and Evaluation ................. 21 III. COST ESTIMATES AND FINANCING ..................... 22 A. Cost Estimates . ................. 22 B. Proposed Financing ..... 23 C. Procurement ................. 24 D. Disbursements, Accounts, and Audit ................. 25 IV. ORGANIZATION AND MANAGEMENT ................................ 27 Project Implementation ....... . . .. .... . ............ . . 27 National Level Coordination ..... 28 Linkages Between Extension and Research 28 Training ... .30 V. BENEFITS. JUSTIFICATION AND RISKS .......... 30 VI. AGREEMENTS REACHED AND RECONMENDATIONS ..32 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.  -ii- 1. Costs Tables Table 1 - Simmary of Project Costs Table 2 - Civil Works Table 3 - Vehicles and Equipment Table 4 - Incremental Staff Costs Table 5 - Incremental Operating Costs Table 6 - Training Costs Table 7 - Monitoring and Evaluation Table 8 - Requirement and Availability of Extension Staff Table 9 - Requirement of Extension Staff by Year 2. Training 3. Table 1 - Implementation Schedule Table 2 - Estimated IDA Disbursements 4. Table 1 - Economic Analysis Table 2 - Economic Price Build-up 5. Related Documents Available in Project File Chart I - 25853 - Extension Organization Chart 2 - 25854 - Linkage Between Extension and Research Map - IBRD 17960R  NEPAL AGRICULTURAL EXTENSION PROJECT II Credit and Proiect Summary Borrower: Kingdom of Nepal Amount: SDR 7.4 million (US$7.2 million equivalent) Terms: Standard Proiect Description: The project is the second phase of an IDA-supported introduction of the Training and Visit (T&V) extension system in Nepal. This phase would reorganize and strengthen agricultural extension services in eleven administrative districts in the Terai with the objective of achieving early and sustainable improvement in agricultural productivity. The project would aim to bring about these increases by advocating adoption of low-cost and labor-intensive agricultural practices, sound irrigation water management, tbus facilitating better cropping patterns, greater crop diversification and more efficient fertilizer usage. The project would also provide for training of staff and monitoring and evaluation of project activities. Given our experience with the first project and the considerable expertise we have developed in introducing the T&V system in Nepal and other countries in the region, no major risks are anticipated. Moreover, the second phase builds upon an existing extension structure, the incremental cost per hectare and per farm family is low and, therefore, even small production increases would generate high returns. Risks arising out of extension staff management have been minimized by providing that all staff would fall under the administrative control of a single government agency.  Estimated Item Local Foreijn Total Cost: ----US$ million--- Civil Works 1.3 1.3 2.6 Vehicles and Equipment 0.2 0.8 1.0 Incremental Staff 1.6 - 1.6 Incremental Operating Cost 0.5 0.3 0.8 Training 0.4 - 0.4 Mouitoring and Evaluation 0.1 - 0.1 Total Base Costs 4.0 2.4 6.5 Contingencies Physical Contingency 0.4 0.3 0.7 Price Contingency 0.9 0.5 1.4 Total Proiect Costs 5.3 3.2 8.5 Finaucinx Plan Local Foreign Total ---US$ million-- IDA 4.0 3.2 7.2 RMGN 1.3 - 1.3 Total 5.3 3.2 8.5 Estimated Disbursement: IDA FY FY86 FY87 FY88 FY89 FY90 FY91 11 Annual 0.3 0.7 1.6 2.0 2.1 0.5 Cumulative - 1.0 2.6 4.6 6.7 7.2 VJ One semester. Economic Rate of Return: 50 percent Appraisal Report: NEPAL - Agricultural Extension Project : Phase II Report No. 5096-NEP, dated March 6, 1985  NEPAL AGRICULTURAL EXTENSION PROJECT II I. BACKGROUND A. rntroduction 1.01 As part of Bank assisted irrigation projects in the Terai region of Nepal, His Majesty's Government of Nepal (HMC) introduced the Training and Visit System (T&V) of agricultural extension (over the period 1975-79) into six districts. 1/ Encouraged by increasing yields achieved in the first two districts (Bara and rarsa covered by the Narayani Irrigation Project), HMG decided, at the time of the formulation of the Sixth Five Year Plan, to set up a more effective and unified National Agricultural Extension Program in the Terai. As part of this strategy HMG, with assistance from IDA, intro- duced improved agricultural extension into a further eight districts 2/ of the Terai. HMG has since decided to extend the system to the remaining districts of the Terai. The proposed project would cover six districts not covered under the previous project and also continue the strengthening of extension services in five irrigation project districts (previously covered under IDA assisted projects) to ensure an uniform approach, and thus complet- ing the coverage by improved extension of all the 20 Terai districts. 3/ With the consent of HMG, Mr. R.C. Mishra, Project Coordinator, Agricultural Exten- sion and Research Project formulated a draft outline of the proposed project. Preappraisal of the project was carried out by IDA in November/ December 1983. This report is based on the findings of an IDA appraisal by Mr. R. V. Ramakrishna (IDA) who visited Nepal in Marc'h 1984. B. The Country 1.02 Nepal is landlocked between China and India. It is divided into three parallel ecological zones running east-west: the Terai plain, an exten- sion of the Gangetic Plain of India; the Hills, actually the foothills of the Himalayas, ranging from 500 M to 4,000 M in elevation; and the Himalayan 1/ Birganj and Narayani Irrigation Projects (Crs. 373 and 856-NEP) in Bara, Parsa and Rautahat districts; Bhairawa-Lumbini Groundwater Project: Stage I (Cr. 654-NEP) in Rupandehi district; and Sunsari-Morang Irrigation and Drainage Development Project (Cr. 1055-NEP) in Sunsari and Morang dis- tricts. 2/ Agricultural Extension and Research Project (Cr. 1100-NEP) covering Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilabastu, Chitwan, Nawalparasi and Banke districts. 3/ Rupandehi district is fully covered by improved extension under the ongo- ing Bhairawa-Lumbini Groundwater Project: Stage II (Cr. 1316-NEP, US$16.0 M, effective 1983).  -2- Mountains to the North. These three zones account for 17 percent, 68 per- cent, and 15 percent of the total area (140,800 sq.km), respectively. Rivers and streams, running north to south, cut the Hills into isolated areas and varying microclimatic conditions and provide a range of conditions for plant growth, depending on elevation, aspect, cloud cover, sLope, etc. 1.03 Nepal's population, 96 percent of which is rural, is currently estimated at 15 M and is increasing at a rate of 2.7 percent annually. About 44 percent of the population lives in the Terai, where a higher rate of population increase (4.1 percent) is partially due to migration from the Hills and India. GNP per capita in Nepal, at about US$170, is among the lowest in the world. 1.04 Administratively, Nepal is divided into five development regions. Each of these comprises a section of the country, running north to south, containing Mountain, Hill and Terai areas. Each development region is divided into either two or three development zones, which are further divided into districts. The districts contain varying numbers of town and vilLage panchayats and there are nine wards (the smaLlest socioeconomic units) in each panchayat. In rural areas the ward consists of about two hamlets. C. Agriculture in Nepal 1.05 With farm production and related activities comprising about 60 percent of GDP, agricultural development is the key to economic development in Nepal. Agriculture engages about 90 percent of the labor force and provides more than 80 percent of all merchandise exports. Only about one sixth of the land area is available for cultivation of which about 15 percent is irrigated. About 90 percent of the cropped area is grown to foodgrains, predominantly rice (half of cropped area), followed by maize, wheat and pulses. Less than 10 percent of the cropped area is under cash crops, mainly oilseeds, jute, sugarcane and tobacco. 1.06 During the seventies, the trend in production of major foodgrains was not encouraging, except for wheat which increased at an a-verage rate of 9.6 percent p.a. Overall production grew at 1.1 percent annually largely due to expansion in acreage, while average yields, again with the exception of wheat, fell at a rate of 0.8-0.9 percent per year. Erratic monsoon condi- tions and uneven distribution as well as higher cost of fertilizers partly account for the decline, but inadequate extension advice and other supporting services, cultivation of marginal lands and inappropriate pricing policies have also contributed to the slow growth. 1.07 Agricultural Strategy. Nepal's Sixth Plan (1980-85) has given priority to increased food production in the Hills and the Terai. So far in the Sixth Plan, HMG has devoted special efforts to increasing the supply and storage of fertilizer, improving extension services in the Terai, increasing and encouraging the proper utilization of irrigation, and to accelerating the completion of seed and post harvest grain preservation projects. These efforts, aided by favorable monsoons, led to agricultural GDP growth of 10  -3- percent in 1980/81 and 3.5 percent in 1981/82. The high growth in 1980/81 was from a base of 1979/80 output and which had been low due to drought. When averaged over the more normal 1978/79 production base, agricultural growth in 1980/81 was about 2.5 percent, which was still higher than the rate obtained in many preceeding years. The highest gross foodgrain production (3.7 M tons) in 1981/82 was 16 percent below the 4.4 K tons required to satisfy the minimum needs of the population. In 1982/83, Nepal experienced another drought and compared to the previous year agricultural output declined by an estimated 11 percent. 1983/84, however, has been a favorable year with preliminary estimates indicating gross foodgrain production of 4.2 M tons, compared to 3.3 K tons in 1982/83. Agricultural Institutions 1.08 Agricultural development and policy are the main concern of four ministries: the Ministry of Agriculture (MOA), che Ministry of Forests and Soil Conservation, the Ministry of Water Resources and the Ministry of Land Reform. MOA includes the Department of Agriculture (DOA) which is respon- sible for promoting production through research, training and extension. MOA has also overall responsibility for institutions such as the Agricultural Development Bank of Nepal (ADBN) and the Agricultural Inputs Corporation (AIC). The Director General of Agriculture heads DOA and is assisted by four Deputy-Directors General one each responsible for Crop Development, Extension and Services, Horticulture and Fisheries, and Planning and Coordination. 1.09 Agricultural Research. Agricultural Research is the responsibility of DOA and is administered by a Deputy Director General (DDG) working under the Director General of Agriculture. The research service operates a total of 52 centers located throughout the country: 7 in Eastern Region, 25 in Central Region, 10 in Western Region, and 10 in Far Western Region. These consist of (a) research stations (for cereal crops); (b) research centers (for cash crops); and (c) research farms, the latter being mainly engaged in seed multiplication. The research service is charged with the responsibility for providing suitable agricultural technology for development of all the regions and climatic zones of Nepal. Considerable progress in the develop- ment of appropriate farming recommendations has been made largely as a result of the Integrated Cereals Project (ICP), assisted by USAID. This program has shown the benefits of a coordinated approach to rice, wheat, and maize research and production. The Cropping Systems Program (an integral part of ICP) has been able to develop improved cropping patterns and technology in selected districts of the Terai under irrigated and rainfed conditions through use of short duration varieties, early planting, introduction of additional crops into the rotation and balanced fertilizer use. In the irrigated lowland areas, cropping patterns e.g., Rice-Wheat-Maize, Rice-Wheat-Murngbean and Rice-Mustard-Maize using improved technology developed by the Cropping Systems Program (CSP) produced marked increases in annual yields and returns as compared to prevailing traditional cropping pattern of Rice-Wheat-Fallow. As a first step, to increasing production on a wider scale, DOA has implemented a Pilot Production Program (by mobilizing timely supply of seed, fertilizer, credit and irrigation water and embodying the recommendations of CSP) over compact blocks of 150-500 ha. As a result  -4- of adoption of this improved technology, total annual yields of all crops under irrigation have increased from 4.5 tons/ha to between 6.5 and 7 tons/ha. Under rainfed lowland conditions, a few common cropping patterns have also been developed using improved technology and have led to sig- nificant yield increases. During the last winter season, a Pilot Production P'ogram was initiated for rainfed areas involving adoption of improved prac- tices under existing crop rotations. 1.10 Under the IDA assisted Agricultural Extension and Research Project (Cr. 1100-NEP) and the Cash Crop Development Project (Cr. 1339-NEP), agricul- tural research activities in the Terai are being strengthened by providing staff, equipment and buildings and decentralized by designating four of the existing research stations as Regional Research Stations (RRS). These are at: Tarahara (Eastern Region), Parwanipur (Central Region), Bhairawa (Western Region), and Nepalganj (Far Western Region). In addition, four research substations located at Nawalpur for oilseeds (Sarlahi district), Jitpur for sugarcane (Bara district), and Belachapi for tobacco and Hardinath for hor- ticulture and cereals (Janakpur district) are being developed. 1.11 Each RRS, headed by a Regional Research Coordinator, is responsible for coordinating research activities on RR.S and research substations located within the region. Research efforts focus on principal crops grown under the different agroclimatic conditions prevailing in the jurisdiction of each RRS with special emphasis on varietal trials, improvement of cultivation prac- tices, dryland farming techniques, soil and water management, improved farm implements, and farming systems and cropping patterns designed to increase farmers' income levels. Research substations are used for testing of research results and to work on specific crops allotted to them. One Research Outreach Officer (ROO) has been provided for each RRS with respon- sibility for designing and helping in carrying out adaptive trials or. farmers' fields and to work closely with subject matter specialists (SMS), extension staff, farmers, and research workers, and form an important link between research and extension. ROO also has an active role in training SMS which is carried out at RRS once every two months. 1.12 As a result of the above, research activities throughout the Terai have been reorganized, considerably strengthened and a flow of relevant and practical technology started. 1.13 Agricultural Credit. The single major source of institutional credit is the Agricultural Development Bank, Nepal (tDBN), established in 1968. It is expected to provide the overall credit reqjirements of agriculture and agro-based inductries, and ensure effective mobilization of rural savings. The Sajha (cooperative) program provides short term production credit to farmers with funds made available from ADBN for onlending to its members. More recently, comnercial banks have also become involved in agricultural credit but their volume of lending is small. 1.14 The standard terms and conditions of lending by ADBN are 18 months duration for short cerm loans with a 15 percent annual interest rate, 7 years for medium loans at 12 percent annual interest rate, and 20 years for long  -5- term loars with an 8 percent interest rate. ADBN has no constraints in the delivery of credit as it has offices located throughout the country. 1.15 Lending by ADBN increased about eight-fold during the five year period between 1972/73 (Rs. 36 M) and 1977/78 (Rs. 283 Mi. Lending, however, declined thereafter in 1978/79 (Rs. 218 M), 1979/80 (Rs. 140 M), and 1980/81 (Rs. 134 M). The total lending increased to Rs. 140 M in 1981/82. Further increases are reported for 1982/83. The main reason for decline in lending operations was due to deteriorating repayment performance. Loan overdues increased from 22.6 percent (Rs. 50 M) to 47 percent (Rs. 217 M) in 1979/80. Since then the situation has improved. The Asian Development Bank has provided continued assistance to ADBN tor agricultural credit and small farmer development. h 1.16 Cooperativyes. The Sajha development program was introduced in early 1976 to revitalize the cooperative movement, mobilize local savings, and to link economic development with political decentralization at the local level. The objectives of the Sajhas are to provide credit, agricultural inputs and marketing facilities, as well as to sell consumer goods (salt, kerosene, coarse cloth, diesel oil, rice and sugar). At present, one Sajha serves on an average, three to four panchayats. Further, at the village panchayat level, they act as the local agent of the Agricultural Inputs Corporation. There are 1,170 registered societies, the majority of which suffer from poor management and lack of resources. 1.17 Agricultural Inputs. The Agricultural Inputs Corporation (AIC), is the sole government agency responsible for supply of inputs and was estab- lished in its present form in 1975/76. Its functions include: (a) importa- tion and distribution of chemical fertilizers and maintenance of a buffer stock sufficient for at least one cropping season; (b) collection, process- ing, storage and distribution of improved seed and assistance toDOA in conducting seed multiplication programs; (c) procurement and distribution of agricultural chemicals for plant protection and grain storage; and (d) dis- tribution of locally manufactured agricultural tools and implements as well as importation and distribution of agricultural machinery. AIC also multi- plies improved seed through contract growers end is responsible for distribu- tion of seed produced on government farms. In general AIC suffers trom Lack of finances to import fertilizer on time and ;n adequate quantities. In recent years about 40 percent ot fertilizer imports, largely urea and complex mixtures, have been obtained in the form of external commodity aid. The prices of chemical fertilizer, sold in Nepal are fixed at an un.form rate throughout the country by HMG, taking into account the import prices and retail prices in the adjoining border areas of India. The uniform pricing practice implies subsidization of the cost of fertilizer, particularly to the Hills. However, the bulk of fertilizers (90 percent) is consumed in the Terai and the Kathmandu Valley. Partly as a result of declining import prices and increased retail prices, the rate of subsidy on the import price of Urea has been re*i.oced from 32 percent in 1980/81 to nil .n 1983!84, and for complex fertilizer from 26 percent in 1980181 to 3 parcent in 1'i83/84. Transportation cost of seed from the Terai to the Hills is fully subsidized. Budgetary subsidies to AIC amounted to Rs. 56 M in 1982/83, equivalenL to  -6- about 3 percent of regular expenditure and 2 percent of current revenue in that year. 1.18 Agricultural Prices. A principal aim of agricultural pricing policy in Nepal has been to ensure low and stable food prices for consumers who spend 70 to 80 percent of their incomes on food. Producer price policy has aimed at providing input subsidies and announcing minimum support prices, usually fixed at below the expected market prices, for major foodgrains and cash crops but keeping in mind the need to contain consumer prices. While fertilizer procurement and distribution is entirely a public sector undertak- ing (AIC) in Nepal, the grain output market is predominantly a private sector operation and public procurement of foodgrains amounts to less than 15 per- cent of marketed output. The Nepal Food Corporation (NFC) procures foodgrains in the Terai for distribution to the deficit Hill &reas and sub- sidizes transportation costs to the Hills at a differential rate, which increases in direct relation to the remoteness of the deficit areas. Over- all, budgetary subsidies to NFC amounted to Rs. 80 M in 1982/83, equivalent to 4 percent of regular expenditure, and 3 percent of current revenue, in that year. The Bank's Role in the Agricultural Sector 1.19 The Bank, through its current and proposed programs seeks to assist Nepal's development objectives and strategy and the agricultural aector has received priority in the Bank's lending program. Past investments have been predominantly oriented towards increasing agricultural production with emphasis on the agriculture of the Terai and development of its major irriga- tion infrastructure - the Birganj and Narayani Irrigation Projects (Crs. 373-NEP and 856-NEP); the Sunsari-Morang Irrigation Project (Cr. 812-NEP); Bhairawa-Lumbini Groundwater Projects I and II (Crs. 654-NEP and 1316-NEP); and the Mahakali Irrigation Project I (Cr. 1055-NEP). These projects have made satisfactory progress (para 1.30). The Agricultural Extension and Research Project (Cr. 1100-NEP) will reorganize extension services in eight districts of the Terai and strengthen applied and adaptive research (para 1.29). The recently started Cash Crops Project (Cr. 1339-NEP) will promote the commercial production of sugarcane, tobacco and oilseeds in the Terai, initiate pilot development of sericulture (Hills) and groundnut, and strengthen ginger research (Hills). In addition, IDA is assisting in integrated rural development in the Hills (Cr. 939-NEP) which also addresses hill food production and includes a minor irrigation component. Implementa- tion of this project has been slow. The Hill Food Production Project (Cr. 1101-NEP) pays particular attention to improving extension, input supply and minor irrigation in Gandaki Zone. The project is progressing slowly. The Community Forestry Development Project (Cr. 1008-NEP) in the Hills and the Second Forestry Project (Cr. 1400-NEP) in the Terai address urgent ecological problems. Implementation of the Community Forestry Project in the Hills is satisfactory. The Second Forestry Project, located in the Terai, has recently become effective.  -7- E. The Project Area The 1arai Region 1.20 The Terai lies below the southern foothills of the Siwalik range and stretches the length of Nepal as part of the Indo-Gangetic Plain. The region covers about 21,800 sq.km (about 15 percent of the country). The elevation of the region varies from 100 meters above sea Level near the Indian border to 500 meters near the foothills. A large number of streams and rivers (including three of the major rivers of Central Himalayas) enter and cross the Terai. 1.21 Climate. The average annual temperature is about 240C. Temperatures are high between March and October when the mean monthly range is between 20 and 300C. November to February are cold winter months with mean monthly temperatures between 14 and 230C. The average rainfall is about 1,600 mm per year. There is considerable ann-ual variation in the duration of the rainy season, and in the total amount of rainfall. The average number of rainy days is 81, the peak season being June-September when 80 percent of rainfall occurs. 1.22 Soils. The Terai plain forms the piedmont in the northern part of Indo-Cangetic depression which has been filled by recent alluvial material derived from the Himalayas. Soils vary from sandy to silty with thick gravel fans in the northern part. The soil pattern changes from north to south and also from east to west depending on nearness to sources. The texture of soil varies from coarse sand to graveL on foothill slopes to medium sand and silt in the middle of the Terai, and to somewhat heavier clay soils near the Nepal-India border. 1.23 Irrigation. According to current estimates, about 340,000 ha receive some form of irrigation in the Terai comprising 110,000 ha developed by the Government and 230,000 ha from private sources. Most of the area developed by the Government is in Central (42 percent) and Eastern (34 percent) Regions. 1.24 Crops and Production. With average hoLding sizes of between 1.4 to 2.0 ha, crop production in the Terai is dominated by rice and wheat which in 1981182 accounted for 64 and 16 percent, respectively, of the total cropped area - a total of 80 percent. Maize (8 percent), oilseeds (6 percent), jute (2 percent), sugarcane (1 percent) and millet (1 percent) made up most of the balance. Comparison with the statistics for 1971/72 indicates that over the decade to 1981/82, the cropped area in the Terai has increased by some 172,000 ha or about 12 percent. The most significant change has been the more than two-fold increase in area planted to wheat, from 112,000 ha to 249,000 ha. The areas under sugarcane and oilseeds have also increased significantly but other crops have remained at the same levels. Over the 10-year period 1970/71 to 1980181, the Terai accounted for 65 percent of the national cropped area and approximately the same proportion of national output on a weight basis.  -8- 1.25 The average yields of important crops and those obtained by farmers using improved technology are given below: Tcble 1.1: Yields of Important Crops Crop Average Yield Yields obtained by good farmers kgs/ha ------------kgs/ha ------------- Irrigated Unirrigated Paddy 1,900 2,700 - 3,500 2,000 Maize 1,680 1,700 - 2,000 Millets 960 1,100 Wheat 1,329 2,400 - 3,100 1,400 - 1,700 Oilseed/Pulses 600 800 Sugarcane 24,000 30,000 -35,000 Nepal's Experience with Improved Extension 1.26 Prior to 1975, there was no organized system of agricultural exten- sion in the Terai and several factors contributed to the relatively low level of effectiveness of the extension service in increasing productivity. Field staff were required to perform varied tasks not directly related to extension activities, and much reporting was required. Targets were often centrally determined and bore little relation to local conditions and priorities. Usually, these work programs were more relevant to a small number of farmers, often the more advanced and larger ones and were usually related to input supplies. The concentration by research workers and policy makers on a high cost and sophisticated farm level technology was also an imporant factor in limiting the effectiveness of extension workers. The goal of high production and income levels was to be achieved by farmers instantly rather than progressing, step by step, from present productivity levels and in accordance with their farming situations and financial means. Thus, given the differing levels of resource and knowledge constraints, the majority of farmers obtained few relevant and practical messages from the extension service. Agricultural research and extension services suffered from lack of transport, housing and other facilities and inadequate emphasis was paid to applied and adaptive research. Furthermore, overall supervision of field workers was poor. 1.27 The T&V agricultural extension system was introduced between 1975 and 1978 into three districts of the Terai (Bara, Parsa and Rautahat) as a com- ponent of the Birganj and Narayani Irrigation Projects (Crs. 379-NEP and 856-NEP); Rupandehi district in 1976 under the Bhairawa-Lumbini Groundwater Proiect: Stage I (Cr. 654-NEP); Sunsari and Morang districts in 1978 under the Sunsari-Morang Irrigation Project (Cr. 812-NEP), and in 1981 to a limited area (6,000 ha) in Kanchanpur district under the Mahakali Irrigation Project (Cr. 1055-NEP). In Rapandehi district, a follow-on project, Bhairawa-Lumbini Groundwater Project: Stage II (Cr. 1316-NEP, effective 1983) provides for full coverage of the district by improved extension.  -9- 1.28 The Director General of Agriculture is assisted by a Deputy Director General (DDG) for Extension and Services. The extension wing is represented at the region by a Regional Director of Agriculture who supervises district level extension programs headed by an Agricultural Development Officer/Assistant Agricultural Development Officer (ADO/AADO). Each ADO/AADO is assisted by a number of Junior Technicians (JT) and Junior Technical Assistants (JTA) each receiving two years and one year training respectively. 1.29 The projects provided for (a) Panchayat Level Agricultural Assistants (PLAA), Junior Technical Assistants (JTA) and Junior Technicians (JT) at the field level, (b) two Subject Matter Specialists (SMS) in each project area, and (c) a systematic program of training for PLAA, JTA and JT combined with a regular schedule of visits to farmers' fields. 1.30 Advice to farmers was provided at the village level by full time PLAA coming from a farming background and who are residents of the panchayats in which they work. Each PLAA was assigned to one panchayat (about 700 farm families). PLAAs receive technical support from JTA and one JTA guides and supervises some 3-5 PLAA. One JT supervises the work of three JTA. Supervi- sion at the district level is provided by an Assistant Agricultural Develop- ment Officer (ADDO) working under a Senior Agricultural Officer (SAO) at the project level. SAO is assisted by 2-3 SMS to provide specialist training to extension staff. The irrigation projects also financed the construction of two training centers at Jhumka (Sunsari district) and Parwanipur (Bara dis- trict). Responsibility for execution of the projects has been assigned to d'ily constituted Irrigation Boards and actual implementation is the respon- sibility of a Project Manager seconded from the Irrigation Department. In each project, the Senior Agricultural Officer, seconded from DOA and under the administrative control of the Project Manager, is responsible for agricultural extension activities. Subordinate level extension staff, some of whom are direct employees of the Irrigation Boards, are also responsible to SAO. Technical support and supervision of extension staff, however, are provided by DOA. These administrative arrangements, which provide for dual control over agricultural staff, have not been satisfactory; in particular DOA, who lacking administrative control over the agricultural staff in the irrigation project areas, has basically ignored these staff who are therefore cut off from assistance with problem solving and technology development. There is now a genuine appreciation in both the Irrigation and Agricultural Departments, of the need to place all extension staff directly under the administrative and technical control of DOA. Such arrangements would be incorporated in the proposed project. 1.31 Given the promising results of improved extension in irrigated areas but in recognitior of the limited manpower resources and absorptive capacity of DOA, a Bank financed Agricultural Extension and Research Project (Cr. 1100-NEP) became effective in 1981 and extended coverage to a further eight districts of the Terai (Jhapa, Sarlahi, Mahottari, Dhanusha, Kapilabastu, Nawalparasi, Chitwan and Banke). A Project Coordinator, working under the Director General of Agriculture, is responsible for implementation. The project provides for (a) improvement and decentralization of research  -10- facilities in the Terai to provide applied and adaptive research based on location specific needs, (b) an unified extension service under a single line of command, (c) two SMS per district, (d) establishment of a dynamic link between farmers, professional extension workers and researchers, (e) a sys- tematic program for training of full time village level extension workers combined with a regular schedule of visits to farmers' fields, (f) a regular program for inservice training of extension workers, and (g) UNDP technical assistance for overseas training of project staff and provision of consult- ants. HMG's commitment to providing improved agricultural extension has been evidenced by the action taken to fill almost all research and extension staff positions, to provide incentives to staff, to reorganize the metrodology of research so as to establish strong extension-research linkages and to organize training programs required to meet the needs of reorganized exten- sion. 1.32 Good progress has been made in Bara, Parsa, Rautahat, Sunsari and Morang districts (irrigation project districts) over the period 1977-1982. Over this period, in Bara, Parsa and Rautahat districts, fertilizer consump- tion increased from 5,800 to 8,000 tons (55 percent) and in Sunsari and Morang districts from 1,500 to 2,000 tons (33 percent). Production of foodgrains increased in Bara, Parsa and Rautahat districts from 315,000 to 480,000 tons (52 percent) and in Sunsari and Morang districts from 280,000 to 320,000 tons (14 percent). Studies carried out in Bara and Parsa districts have shown a clear indication of yield increases under both rainfed and irrigated conditions. Details are given below: Table 1.2: Yield Increases in Bara and Para Districts Rainfed Irrigated Pre Project 1/ Present 2/ Pre Project L/ Present 2/