Rural development in Sri Lanka

28328 NUMBER37 0E Pre cis Operations Evaluation Department January 1993 Rural Development in Sri Lanka Kuruneala Rural Development (RD) ing agricultural input supply services, district who are an important segment Project zas the first integrated RD projectin strengthenng agricultural credit of the district poor farmers. Sri Lanka. Overall, notes a recent OED facilities; and improving the effectiveness audit,* this was a successfid project whose of transport, health, education, drinking Irrigation and water management, the experience helped to shape the count iy's water, and rural electrification facilities largest component (39 percent of project subsequent RD effirts. Govenment costs), achieved most of its physical commitment played a vital role in project Though organizationally complex, targets. All 9 major schemes and 453 success. Unlike any integrated RD projects the project was to be implemented minor ones were rehabilitated, though that the Bank has supported, this project was through existing line agencies-12 poor quality work on the downstream implemented through line agencies already in ministries and 20 agencies. In Sri Lanka, component of the minor irrigation place, rather than through a specially created unlike many of the countries to which schemes meant that maintenance project unit. The experience offers useful the Bank lent for integrated RD in the expenditures were needed sooner than insights on the iniplementation of rural late 1970s, the basic institutional frame- expected. development programs through decentralized work needed for implementation was in government agencies. place when the Kurunegala project was Water management did not improve. conceived. The Govemnment intended This was largely because designs did not Project goals, design the project to complement the measures account for the risk of water shortages for being taken at the time to empower the Yala (off-season) crop, lack of opera- The project (approved 1979, district administrations, decentralize the tional plans to involve farmer groups, completed 1986) was designed to capital budget, and promote village-level and lack of attention to differences in produce a replicable model of regional development initiatives. Kurunegala ecology and faming pattems across the development that would raise produc- district's fairly large area and population, district. Cropping intensity has thus been tivity, employment, incomes, and living and its varied ecology and farmig lower than expected; the minor irgation standards by strengthening develop- patterns, made it a suitable administra- schemes have only stabilized the Maha ment-oriented services and making tive unit to test whether an integrated (wet) season crop, and have not critical complementary investments in RD approach, implemented through increased the Yala crop. physical infrastructure. An IDA credit existing agencies, would work. provided $20 million of a project cost of (Kunegala's area is 4,0 square ki; Ways to improve water management $30 million. its 1990 population was 1.4 million.) and cropping intensity might include: The Government was closely Results using field pumps where possible involved in conceptualizing, identifying, rather than relying wholly on gravity- and preparing the project. Bank staff On the whole, the project was based systems; had at first identified a project largely successful. Limited capacity in the line based on physical infrastructure and agencies, shortages of staff, and budget- productive components, but the ary problems were the main reasons for "Peffornance Auiit RLWr, Sri Government called for an integrated a two-year implementation delay. Lanka: Kurvnegala Rural Devlop- project with components in the social Concentrating the agricultural compo- nknt Project", Repr No. 10970, sectors. As appraised and implemented, nents on paddy and coconut-both AuguL-43,1992. OEDn7xvts are the project consisted of: rehabilitating crops in which Sri Lanka has tradition- mvidable to Exerutive Directors and existing irrigation schemes and improv- ally been competitive-made the project Bank;taff frm the Internal ing water management; rehabilitating economically viable. But the project did Dot-ununts Unit ani fivni ReVioua coconut plantations; strengthening not address the needs of the upland, dry InAmnation Centers. agricultural extension services; improv- zone, farmers in the north of Kurunegala * making maximium use of rainfall; and a horticulture program were the top-down management of the * switching to higher-value crops in introduced, minor irrigation schemes under the some cases; and Bank-assisted project. * more participation by water users Farm credit (29 percent of project in managing facilities. costs): Disbursements for paddy Institutional impad cultivation and coconut fertilizer were Beneficiaries for the minor slow. Recovery rates were about 80 The project successfully furthered irrigation schemes were selected percent for paddy, 60 percent for farm the decentralization of administrative, according to physical and technical machinery, and more than 90 percent technical, and financial decision criteria laid down by government, but for vegetable production. Four-wheel making and the evolution of develop- their opinions were not sought and tractors were to have been financed but ment-onented institutions at the district they did not contribute to planning and turned out to be too expensive for most level. During the implementation implementing the rehabilitation or, farmers; instead, the project financed period the project provided half the later, to water management. Such four times as many two-wheel tractors annual capital budget of the District participation would have much as expected. These had multiple uses Administration (DA). It allowed an improved the performance of these year-round, both for farm work and for important refocusing of the DA's task schemes, which are eminently suitable transport. The question arises, though, toward development-orented activi- for community-based management whether the project should have been ties. through water user associations. providing subsidized credit to the better-off farmers. Though at the design stage A groundwater component Government had envisaged an developed 88 test wells and 200 iputsupply: despite the construc- integrated project, in practice the tubewells. It cost more than planned, tion of 57 stores, farmers continued to components were disparate and carried but made possible production of high- purchase much of their fertilizer from out separately from one another-a value crops and vegetables in some dry private traders whose credit arrange development which may have areas of the district, greatly enhancing ments were more convenient. A seed contributed to project success. Project the incomes of small producers. Other processing center was built, but design did not address dearly the government programs, with donor farmers continued to obtain large specific fumctions of individual agencies assistance, have now begun to exploit quantities of seed from outside sources. and the interrelationships between this resource. them. Neither did it allow for much Social itifrastructire: Facilities flexibility in the implementation phase. Coconut development: Physical constructed or improved (13 percent of With hindsight, more flexibility should rehabilitation targets were exceeded- project costs) included rural roads, have been built into project design. nearly 80,000 acres of plantations were health care centers, educational rehabilitated, compared with the facilities and equipment, rural electrfi- Sustainabiity appraisal target of 60,000-and so were cation, and wells for drinking water, all targets for replanting and in lneAwth SAR targets. The invest- The removal of fertilizer subsidies underplanting. The project did not ments benefitted the receiving commu- has resulted in a sharp decline in make adequate provisions for improv- nities but were rather small compared fertilizer use on coconut in the past two ing the management of existing trees, with needs in the district. years. Unless profitability goes up which made up 70 percent of the area yields could decline further. under coconut. Many of the new wells quickly became contaminated with iron. The In general, the assets created under The promotion of intercropping GTZ (German Technical Aid Agency) the Kunegala project need an (of pineapple and pepper, for example) village drinking water program took injection of funds for their upkeep. The with coconut achieved less than half its over from the village water supply line agencies that were expected to appraisal target; farmers were unfamil- component of the Bank-assisted project maintain them have seen their budgets iar with the technology, some of the and has developed a technical solution shrink, and maintenance and upkeep soils were unsuitable, and rainfall was for this problem. A significant achieve are not adequate or timely. Staffing inadequate. As output prices declined ment is the system of social responsibil- levels decreased after project comple and the real subsidy rate decreased, ity the GTZ program has developed tion and several staff who had gained farmers did not find intercropping among villagers to manage the wells, valuable experience left the country as profitable. As a result, home gardens This experience contrasts sharply with the security situation worsened. OED Pr&is is produced by the Operations Evaluation Department of the World Bank to help disseminate recent evaluation fidings to development professionals within and outside the World Bank. The views here are those of the Operations Evaluation staff and should not be attributed to the World Bank or its affiliated organizations. Please address comments or enquiries to the managing editor, Rachel Weaving, E1204, World Bank telephone 473-1719. January 1993