World Bank Document

Report No. 1587-BD Bangladesh FILECOPY JuteProject

Public Disclosure Authorized December 29, 1977 South Asia ProjectsDepartment

FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

Document of the World Bank

This doc-umenthas a restricteddistribution and may he used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. CURRENCY EQUIVALENTS

The BangladeshTaka is officiallyvalued at 26.70 to the Pound Sterling. The Pound now floats relative to the US Dollar and consequently the taka, US Dollar rate is subject to change. The rate below has been used throughoutthis report except where otherwisestated.

US$1 = Tk 15.0 Tk 1 = US$0.067 Tk 1 miLlion = US$67,000

WEIGHTS AND MEASURES

1 acre (ac) = 0.405 hectare (ha) I mile (ml) = 1.509 kilometers (km)

1 seer - 2.06 lb (0.78 kg) i maund (md) = 40 seer or 82.27 lb (37.3 kg) 1 metric ton (MT) 26.8 md I katcha bale jute = 4 md 1 pucca bale jute = 5 md FOR OFFICIALUSE ONLY

PRINCIPALABBREVIATIONS AND ACRONYMSUSED

ADA - Assistant Director of Agriculture ADB - Asian DevelolpentBank BADC - Bangladesh AgriculturalDevelopment Corporation BJRI - Bangladesh Jute Bsearch Institute BKB - Bangladesh AgriciultureDevelopment Bank (BangladeshKrishi Bank) DAJ - Directorate of Agriculture (Jute) GOB - Government of Bangladesh HYV - High Yielding Varieties IJCS - Intensive Jute Cultivation Scheme IRDP - Integrated Rural DevelopmentProgram ISO - Input Supply Officer JEA - Jute Extension Assistant JEO - Jute Extension Officer JFA - Jute Farmers' Association KSS - Village Cooperative Society (Krishi Samabaya Samity) SB - Sonali Bank SMS - Subject Matter Specialist TCCA - Thana Central CooperativeAssociation

GLOSSARY

Aman - Rice planted before or during the monsoon and harvested in November or December (B. aman is broadcast, T. aman is transplanted) Aus - Rice planted during March and April and harvested during July and August (B. aus is broadcast, T. aus is transplanted) Block - Smallest unit in the Intensive Jute Cultivation Scheme - 200 or 400 acres jute Boro - Rice planted in winter and harvested during April to June Char - Low-lying sandy land District - Administrativeunit in Bangladesh. There are 19 Districts in the country Katcha bale - Jute bale compressed by manually powered press, weighs 4 maunds Paddy - Unhulled rice Pucca bale - Jute bale compressed by hydraulic press, weighs 5 maunds Thana - Administrativeunit in Bangladesh. There are 413 thanas in the country Unit - Intermediateunit in the IntensiveJute Cultivation Scheme - formed by 5 to 10 blocks - about 2,000 acres jute Zone - Largest unit in the IntensiveJute Cultivation Scheme - formed by 25 units - about 50,000 acres jute

FISCAL YEAR

July 1 to June 30

This document has a restricteddistribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosedwithout World Bank authorization.

BANGLADESH

APPRAISAL OF THE JUTE PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i - iii

I. INTRODUCTION ...... 1

II. BACKGROUND ...... 1

III. THE PROJECT ...... 7

A. Brief Description .* ...... 7 B. Detailed Features ...... 8 C. Implementation Schedule ...... 11 D. Cost Estimates and Financing ...... 12 E. Procurement and Disbursements ...... 14 F. Accounts and Audits ...... 15

IV. ORGANIZATION AND MANAGEMENT ...... 16

A. Coordination ...... 16 B. Project Agencies ...... 16 C. Training ...... 18 D. Credit Arrangements ...... 19 E. Monitoring and Evaluation ...... 21

V. PRODUCTION, MARKETING AND FARMERS' BENEFITS .. 21

VI. ECONOMIC JUSTIFICATION ...... 24

VII. RECOMMENDATIONS ...... 26

Schedule A - Lending Terms and Conditions

Annex 1 - Jute Production

Table 1 - Area Sown to Jute

Annex 2 - Intensive Jute Cultivation Scheme

Table 1 - IJCS Activities 1973/74-1975/76 Table 2 - IJCS Survey Classification of Farmers Table 3 - Summary Results of IJCS Survey Table 4 - IJCS Location of Existing Scheme and of New Scheme

Annex 3 - Jute Research

Table 1 - Organization Chart Jute Research Institute -2-

Appendix I - Provisions for Stren.ytheningJute Research Appendix 2 - Terms of Reference oE Consultants to be Provided Under a UNDP Project Appendix 3 - Topics for Consideration for a Research Program

Annex 4 - Credit for Production and Marketing

Table I - Sonali Bank Growth from 1972 Table 2 - Sonali Bank Condensed Balance Sheet Table 3 - Sonali Bank Condensed Statement of Net Income Table 4 - Sonali Bank Staffing Pattern Table 5 - Sonali Bank Existing Branch Network in Intensive Jute Cultivation Scheme Area Table 6 - Sonali Bank Production Loans through TCCA

Annex 5 - Internal Jute Market:Lng

Table 1 - Jute Marketing Costs Loose Jute Storage at Village Level Table 2 - Jute Marketing Costs Storing with Katcha Baling Table 3 - Income and Cash flow for Farmers' Group Jute Marketing Activity

Annex 6 - Organization

Appendix I - Project Agencies and their Project Related Activities Appendix 2 - Draft Terms of Reference for Advisors Appendix 3 - Guidelines for Duties. and Qualifications of DAJ Staff

Annex 7 - Monitoring and Evaluation

appendix - Draft Terms of Reference for Project Evaluation

Annex 8 - Implementation Schedule

Table 1 - Implementation Schedule

Schedule 1 - Recruitment Schedule for Headquarters Schedule 2 - Recruitment Schedule for ADA, DADA, SMS Schedule 3 - Recruitment Schedule for JEO and ISO Schedule 4 - Recruitment and Service Schedule for Advisors Schedule 5 - Transport Procurement Schedule Schedule 6 - Implements Procurement Schedule Schedule 7 - Construction Schedule

Annex 9 - Cost Estimates

Table I - Summary Table 2 - Short Term Credit Table 3 - Marketing Infrastructure Table 4 - Implements Table 5 - Extension Service Staffing Table 6 - Extension Service Allowances Table 7 - Buildings and Office Equipment -3-

Table 8 - Transport Table 9 - Extension Service Materials and Equipment Table 10 - Technical Assistance Table 11 - Percentage Used for Price Contingencies

Annex 10 - Crop Production Costs and Returns

Table 1 - Jute Production Costs Table 2 - Financial Returns from Jute Table 3 - Costs and Returns Local Aus Table 4 - Costs and Returns Improved Aus

Annex 11 - Reporting Requirements

Appendix 1 - Guidelines for Headings and Contents of the Quarterly Report

Table 1 - Credit Withdrawals Table 2 - Project Implementation Summary Table 3 - Jute Production Information Table 4 - Jute Marketing Table 4a - Consolidated Jute Marketing Income and Expenditure (IJCS) Table 4b - Consolidated Jute Marketing Income and Expenditure (IRDP) Table 5 - Short Term Credit Physical Information Table 6a - Short Term Credit Financial Information Credit Through Directorate of Agriculture Table 6b - Short Term Credit - Financial Information Credit Through IRDP Table 6c - Short Term Credit - Financial Information Total Credit Table 7 - IJCS Staff Information Table 8 - Progress of Construction Table 9 - Progress of Construction Tenders and Contracts Table 10 - Progress of Tenders and Orders for Building Materials Table 11 - Progress of Tenders and Orders for Implements, Equipment, Furniture and Materials other than Building Materials

Annex 12 - Economic Analysis

Table 1 - Economic Price for Paddy Table 2 - Economic Price for Jute Table 3 - Alternative I - Sown Area, Yields and Production Table 4 - Alternative I - Prices and Benefits Table 5 - Alternative I - Production Cost and Incremental Working Capital Table 6 - Alternative II - Sown Area, Yields & Production Table 7 - Alternative II - Prices and Benefits Table 8 - Alternative II - Production Cost and Incremental Working Capital Table 9 - Sensitivity Analysis of Economic Rate of Return Table 10 - Sensitivity Analysis of Economic Rate of Return Jute Marketing Component Annex 13 - Schedule of Estimated Disbursements

Annex 14 - List of Documents and Titles Included in the Project File

Chart I - W.B. 17424: ImplementationSchedule Chart 2 - W.B. 17096: Credit from DAJ to Farmers Chart 3 - W.B. 17337: Credit from IRDP to Farmers Chart 4 - W.B. 17095: DAJ HeadquartersOrganization

Map IBRD 12761 BANGLADESH

JUTE PROJECT

SUMMARY AND CONCLUSIONS i. This report appraises a jute project covering 16 districts of Bangladesh. The project would support a five year program costing US$33.3 million to increase the productivity of jute cultivation, thus making the product more competitive in world markets, and introduce a trial jute marketing scheme aimed at improving marketing efficiency and increasing farm gate prices. ii. Jute is Bangladesh's most important cash crop. It is grown by almost half its farmers, provides 80% of the country's export revenue and is the raw material for the country's most important industry. In recent years Bangladesh jute has faced many problems. World demand has dropped with change in packaging technology, competition from synthetics and, until 1975, high price of jute products. Fiber production has declined owing to high paddy price and diversion of jute land to paddy production. With the 1975 Taka devaluation, Bangladesh jute products became competitive with synthetics and with two good rice crops and decline in food grain prices, jute production has partially recovered. iii. To remain competitive, jute yields must be increased, production costs lowered, manufacturing efficiency improved and marketing streamlined. To ensure stable production, an effective jute pricing mechanism should be introduced. Past and ongoing program credits are supporting the manufacturing industry; a recent IDA Foodgrain Price Policy Review Mission is developing recommendations for a foodgrain and jute pricing mechanism; and this project would focus on fiber production and marketing aspects. iv. Jute yields have been static for decades, but a package of improved practices identified by the Bangladesh Jute Research Institute (BJRI) over ten years ago showed that more than double current average yields are possible. In 1973 the Government of Bangladesh (GOB) introduced the Intensive Jute Cul- tivation Scheme (TJCS) which combines intensive extension work with assured credit and inputs supplies. The scheme covered 0.3 million acres in 1976 and reportedly expanded to 0.5 million acres in 1977. An IDA supervised survey has shown a 50% average yield increase under the scheme and resultant reduced production costs per bale of jute. The project would strengthen this scheme with specialist staff, vehicles, housing and incremental credit and expand its coverage to one million acres. v. Jute marketing at the village level is monopolized by middlemen who frequently exploit farmers by short weighing and undergrading of produce. Jute may change hands several times before reaching mills or exporters. Lack of storage in production areas causes fiber spoilage and lack of baling presses increases transport costs and strains the limited transport facilities. The - ii - present system is expensive and farmers do not receive full reward for efforts to improve production. The project would introduce a trial under which storage and baling facilities would be provided to farmers to enable them to obtain a better price for their product. vi. The project would include:

(a) Incremental short term production and marketing credit (US$14.3 million);

(b) Jute storage sheds and baling presses (US$1.0 million);

(d) Incremental extension staff (US$4.7 million);

(e) Staff housing and office equipment (US$9.3 million);

(f) Motor vehicles, motoccycles, and bicycles (US$1.7 million);

(g) Extension equipment and materials (US$0.2 million); and

(h) Consultants, overseas training and monitoring (US$0.6 million). vii. Of the estimated total US$33.3 million project cost, which includes US$3.8 million duties and taxes, US$8.6 million or 26% would be foreign exchange costs. The proposed US$21 million IDA credit would finance about 71% of total project cost net of dittiesand taxes. viii. Vehicles and other e9nuinmentwould be purchased over a four year period and dispersed in rural areas. To ensure adequate maintenance and spares, they would be procured after local competitive bidding among local firms and representatives of foreign suppliers having adequate local maintenance facilities. Office furn:-ture and jute farming implements would be of local design and manufactured ;.ocallyand wouid be procured by local competitive bidding. Civil works would each be small, widely scattered geographically with some in locations with difficult access and would be constructed over a five year period. The works would not be suitable for international competition and contracts would be subject to local competitive bidding. Existing procedures for local competitive bidding are satisfactory. ix. GOB would onlend US$X.8 million of the credit to Sonali Bank, the leading commercial bank in Bangladesh, now fully nationalized, for lending to jute farmers for production and marketing either through the Directorate of Agriculture (Jute) (DAJ) the present channel, or in the 11 "thanas" covered by the Rural Development Project (Credit 631-BD) and a similar Asian Develop- ment Bank Project, through cooFeratives under the Integrated Rural Development Program (IRDP). If successful, IRDP could in time become the main credit channel for the Intensive Jute Cultivation Scheme, as more of its cooperatives are strengthened by measures similar to those being implemented by the Rural Development Project. At present, different lending institutions charge farmers - iii - different interest rates for crop production loans. GOB has now indicated its intention to introduce a uniform rate of about 12% per annum, to be applied to all agriculturaldevelopment loans - short and medium term. On- lending terms and conditions under this project have been tliscussedand agreed with the Government. x. US$12.6 million of the credit would be channeled to DAJ, the main implementingagency. DAJ, which would have no responsibilitiesoutside the operationof IJCS, would be responsible for most project activities-- providing extension and inputs in the entire project area and implementing the production credit program and the pilot marketing scheme outside the specified 11 thanas. Under this marketing scheme farmers would have their fiber graded, baled and stored in stores constructedand equipped with baling facilities provided by the Project. These stores would be operated by IRDP cooperativesor DAJ in the 11 thanas, and by DAJ in the other project areas. Farmers would receive the government minimum farmgate prica for their fiber, which would be sold, in due time, as appropriate,to mills and exporters, taking advantage of seasonal price fluctuations. Farmers would be charged marketing fees and rental charges, to cover costs. This activity is to be undertaken on an experimentalbasis and would cover, at maturity, about 3% of forecast production from the project area. If successful,this pilot marketing scheme could be refined as appropriate and supported by IDA under some future GOB project. xi. Coordinationbetween the two main project agencies (DAJ and Sonali Bank) and a number of supporting agencies dealing with inputs, research and marketing would be attained through a national coordinationcommittee, supported by district level committees. xii. About one million farm families would benefit from improved jute production which would increase jute yields, reduce production cost per unit of jute and consequentlyimprove farmers' income. Nearly all are small farmers, over 90% owning 2 acres of land or less. Up to 100,000 families would benefit from higher prices and secure sales outlet for part of this production, which would result from the trial marketing scheme; other jute farmers would benefit indirectly from improved prices due to increased competition in marketing. xiii. The project would increase jute yields and reduce production costs. This would enable Bangladesh to either maintain jute production at present levels and release approximately 400,000 acres for paddy growing or, alterna- tively, use its improved competitiveposition to capture a larger share of the world market for jute and its substitutes,although possibly at somewhat lower prices. In practice, the actual situation resulting from the project would presumably be somewherebetween these two alternatives,with some increase in the total jute production and some decrease in the jute acreage in non-IJCS areas. The rates of return of the two extreme alternativesare both above 50%, indicating that the rate of return of the project in either case would also be above 50%. The rate of return of the marketing component alone is about 50%. xiv The project is suitable for an IDA credit of US$21 million on standard terms.

BANGLADESH

APPRAISAL OF THE JUTE PROJECT

I. INTRODUCTION

1.01 The ongoing 13 projects supported by IDA in the agricultural sector (with total IDA credits of US$236.2 million) include five irrigation projects and one each for cyclone area reconstruction, foodgrain storage, cereal seed production, fertilizer production, agricultural training, rural development, shallow tubewells, and extension and research. Past and ongoing program credits have supported the jute manufacturing industry and continue to do so. This project would be the first to focus on jute production and marketing. It would meet the special needs of the Bangladesh economy for quick yielding projects in key sectors of the economy to increase rural income, and employment. The project would safeguard future prospects of the country's most important cash crop and source of export revenue.

1.02 Progress in implementing IDA supported agricultural projects since Bangladesh attained independence in 1971, has been slow. However, over the twelve months preceding appraisal of this project there has been a marked acceleration owing to improvements in GOB's project administration, partly due to effective follow-up by the IDA Resident Mission. While many project implementation problems persist, these as well as recent improvements in performance were taken into account in project design and the objectives and targets of this project which is based on strengthening a successful ongoing GOB program, should be attainable.

1.03 The project was prepared by GOB staff with help from the Resident Mission. This report is based on GOB's Preparation Report and on findings of an appraisal mission comprising Messrs. G. Stern, S. Bhatia, S. Suntharalingam (IDA) and T. Warda1e (consultant) that visited Bangladesh in November/December 1976. The mission was assisted by Messrs. D. Beal (FAO/IBRD/CP), F. Haworth and S. Shaikh (consultants) members of the Extension and Research Project appraisal mission that visited Bangladesh during the same period and by Mr. L. Plesch (Loan Officer). A project file supplementary to this report has been prepared for project supervision and management use.

II. BACKGROUND

General

2.01 Bangladesh with an area of 55,000 square miles and a population of about 81 million, growing at 3% per annum, is among the most densely populated countries in the world. Due to this as well as meager natural resources, poor physical infrastructure and frequent natural calamities much of the _ population lives at or below absolute poverty levels. The current annual per capita income of US$110 is among the lowest in the world. -2-

2.02 Since Independence the country's development efforts have met with mixed fortunes. Rehabilitation from cyclone and war damage was a notable achievement, but overall economic performance has been below expectation, partly for reasons beyond GOB's control. In the last 18 months the new administration has initiated determined measures to speed up development by improving the efficiency of the public sector and by encouraging the private sector to play a greater role. Results have been encouraging and have been assisted by favorable climatic conditions which have led to two successive record harvests. GOB's efforts to improve economic performance attach great importance to exports which will continue to be dominated by the jute industry for the forseeable future.

Agriculture

2.03 Agriculture dominates the economy. About 90% of the population lives in rural areas mostly dependent on agriculture. The sector accounts for 55% of GNP, 75% of all employment and over 80% of all exports. In recent years the sector has been unable to feed the rapidly increasing population, expand export revenue sufficiently, or provide adequate employment to the largely unskilled and illiterate labor force.

2.04 Practically all the cultivable area of 22.5 million acres is already under cultivation and future production gains will require more intensive land use and higher yields. Total cropped area was 30.1 million acres in 1974/75, and cropping intensity 134%. Rice (24.2 million acres) is the most important food crop and jute (1.4 million acres) the most important cash crop.

2.05 While soils are fertile and temperatures allow year round cropping, agricultural development is constrained by serious natural difficulties. The country is dominated by the delta of one of the greatest river systems in the world which, together with monsoo'a rains (75% of total precipitation falls in three to four months), causes widespread flooding during part of the year. Some 5.5 million acres are flooded annually. On the other hand, only about 2.5 million acres are irrigated. The rivers present transportation difficulties, and facilities for moving farm produce and inputs are inadequate and expensive. In addition, cyclone disasters are frequent.

2.06 Perhaps even more restri-ctive are sociological constraints. Some 30% of village dwellers are landless and among the farmers who own land about 50% cultivate 2.5 acres or less, wqhich is usually fragmented into four or five plots.

2.07 Generally, Bangladesh farmers are hardworking and receptive to proven improved farming practices, However, their efforts are often frus- trated by inadequate agricultural research and advice, and inadequate supplies of inputs and credit. The Intensive Jute Cultivation Scheme (IJCS) developed by the Bangladesh Ministry of Agriculture (see para 2.14) has shown encouraging success in delivering correct advice, credit and inputs to jute farmers and therefore forms the basis for this project. -3-

Jute Production Trends

2.08 Jute plays a crucial part in the Bangladesh economy. It provides about 80% of export revenue and is the raw material for the country's most important industry.

2.09 Since independence in 1971 the Bangladesh jute industry has faced serious problems. The world market for fiber and manufactured jute goods has stagnated, and manufactured jute goods have come under increasing pressure from competing countries and from synthetics. The area under jute declined from about 2 million acres to 1.2 million acres in 1974, while fiber production dropped from 7.2 million bales in 1969/70 to 3.9 million bales in 1974/75 -- the lowest production in 20 years. The acreage drop was due to a shift by farmers to paddy owing to high paddy prices in recent years, while the drop in exports resulted from the high price of Bangladesh jute fiber and jute goods. With good rice harvests in the last two years and a consequent decline in the rice price, the jute acreage has again increased. The May 1975 Taka devaluation has improved the competitiveness of Bangladesh jute products and led to a recovery of exports.

2.10 To ensure the competitiveness of Bangladesh jute fiber and goods, particularly vis-a-vis synthetics, there must be assurance of regular supplies of fiber and goods at competitive prices. Measures are needed to improve the efficiency of jute production, marketing and manufacture and the effectiveness of the jute fiber pricing mechanisms. The farm gate jute price is determined by the Jute Ministry without adequate information on costs and returns of jute and competing paddy crops and this factor has contributed to jute production fluctuations (para 2.09). Steps for improving jute manufacture have been taken under the Fourth and Fifth Imports Program Credits (Credits 591-BD and 676-BD); a sixth Imports Program Credit, which would also support jute manufacture, is at an advanced stage of processing. This project would focus on increasing yields and improving crop quality. The findings of an IDA supported Food Policy Mission which visited Bangladesh earlier this year should help in establishing a satisfactory jute price mechanism.

Jute Production (Annex 1)

2.11 The Bangladesh climate and most of its soils are particularly suitable for jute production. Ample water supplies for growth anad fOL x,.iug give the country an advantage over others in quality jute production. Varieties of both Capsularis and Olitorius species are grown. The former resists flooding and constitutes about 60%-70% of the crop. About 0.5 million acres of lowland are sown to jute every year because other crops are not competitive in these flood prone situations. About the same acreage is planted to jute as part of the traditional crop rotation. Acreage in excess of this basic one million fluctuates according to the jute/rice price relationship.

2.12 Jute areas are grouped into three regions: the Jat, Northern and District Regions (see map IBRD 12761). The heaviest jute producing districts are Mymensingh (Jat), Rangpur (Northern) and Faridpur (District). Because of better soil and plentiful retting facilities, jute in the Jat area gives higher yields and has higher quality than jute grown in other areas. The -4- project would concentrate on expanding improved jute cultivation in the Jat areas, and in Rangpur and Faridputr districts which together contain about three fourths of the total jute acreage. Because of a higher proportion of season- ally flooded and water logged land, about 80% of the jute in the Jat and Northern areas is Capsularis, whEreas it comprises only 40% of the total in the District with a higher proportion of well drained soils. In parts of the Northern and District areas retting water is scarce and this factor depresses fiber quality. In addition, the Northern area lacks storage and baling facilities and is remote from the jute manufacturing and fiber exporting centers, so that jute farmers there have greater difficulties with jute marketing than in other areas. The pilot marketing component of the project (para 3.10) would pay particular attention to this area.

2.13 Since most farmers continue to use traditional methods for jute production, yields have stagnated for decades at about three bales per acre. Yields of up to six bales per acre have however been obtained in recent years by farmers who have adopted extension service recommendations.

Intensive Jute Cultivation Scheme (IJCS) (Annex 2)

2.14 This scheme started to function in 1973 and by 1976 had covered about 290,000 acres. It is executed by the Directorate of Agriculture (Jute)(DAJ) which arranges credit and inputs for participants and teaches them a proven package of improved practices including:

a. use of good seed of recommended varieties;

b. seed dressing to prevent plant disease;

c. line sowing and improved weeding methods;

d. correct sowing and harvesting times;

e. correct fertilizer use; and

f. plant protection, mainly against insect pests.

4 The scheme is orgnized irtn ripe 70nes pphb hsA8 by Pn Asa±stant D rector of Agriculture (ADA), which in turn are subdivided into 150 units of about 2000 acres, each supervised by a Jute Extension Officer (JEO), and 1500 jute blocks of 200 acres each with a Jute Extension Assistant (JEA).

2.15 Participating farmers are required to be members of Jute Farmers' Associations (JFA's) each coinciding with a block, to provide a focus for extension and to facilitate inputs and credit distribution by DAJ. JFA have formed committees at unit, zonal and national level to exchange experiences and to discuss problems.

2.16 The combination of concentrated extension and effective inputs and credit distribution through JFiA's has been successful. GOB evaluation - 5 -

confirmed by a Bank assisted sample survey showed that jute yields of participants in 1975 averaged 4.5 bales per acre compared to 2.9 bales outside the scheme and that net returns per acre were an estimated Tk 765 and Tk 330 respectively.

2.17 While results at the farm level have been very good other implementation targets have not been achieved by IJCS. Of the 1976 goal of 0.7 million acres only 0.3 million acres were covered. Inadequate finance and lack of personnel have been the main constraints. The situation has improved recently and IJCS had adequate staff to cover 0.5 million acres during 1977. Some major handicaps remain, including lack of accommodation for JEA, inadequate transport, and insufficient farm implements. Extension officers' effectiveness is constrained by administrative tasks and by lack of technical back up. Finally, for larger scale expansion, the credit program needs strengthening. The project would address these deficiencies. IJCS supporting services, not controlled by DAJ are described in paras 2.18-2.24 below.

Research (Annex 3)

2.18 The Bangladesh Jute Research Institute (BJRI) under the Ministry of Jute is organized into three Directorates -- Agricultural Research, Technology Research and Seed Multiplication. The Agricultural Research Directorate with a staff of 40 scientists carries out plant breeding, and research into cultivation practices, plant protection and retting. There have been few advances since a package of improved practices was identified over ten years ago. Work has been handicapped by lack of land at BJRI and a new main research farm is now under development. The Asian Development Bank (ADB) Jute Seed Project and a supporting UNDP Jute Seed Research and Production Project are helping to finance develop-nent of research farms, equipment, transport, experts ar,u overseas training. Tnis should help to step up research activities and no additional investment is needed for the time being.

2.19 BJRI provides training for IJCS staff, but linkage between research, extension and farmers is inadequ-ate. Improvement of such liaison would be attempted under the project appraised in this report (para 3.09).

Inputs

2.20 The Seed Directorate of the BJiG is responsible for production and distribution of certified jute seeds. Its present annual capacity is about 750 tons of seed, enough for about 200,000 acres jute and the entire supply is reserved for IJCS. Seed quality is satisfactory, but because seed processing facilities are inadequate, supplies are reduced by adverse weather at harvesting time and therefore fluctuate from year to year. In the current season, for instance, supplies have been unsatisfactory. The ongoing ADB Jute Seed Project aims to provide processing facilities and expand production to 2,000 tons seed per annum which would be enough to renew all jute seed once in three years.

2.21 The Bangladesh Agricultural Development Corporation (BADC) has developed an efficient fertilizer supply system for IJCS. Jute staff inform BADC of the requirements, which are delivered by a BADC subagent appointed -6-

for each jute block. BADC is expanding its fertilizer storage facilities and in addition, IDA is financing a fertilizer marketing and distribution study to help BADC to reorganize and strengthen its distribution network to cater for anticipated increase in fertilizer demand for all crops. The study will also examine the possible need for new investments to improve fertilizer distribution. With these measures, the fertilizer supply system should be satisfactory.

2.22 Pesticides are stocked at thana level by the Directorate of Agri- culture (Extension and Management) -DEM- of the Ministry of Agriculture and sold to farmers at half price. An ongoing project supported by UNDP aims at strengthening the plant protection activities of DEM. DEM is also in charge of the general extension service and its effectiveness is being improved by the adoption of the Training and Visit (T&V) system of agricultural extension. An IDA-financed project (Extension and Research Project-Credit 729-BD) supports the T&V extension system in the North-West Region of the country. In addition, GOB is investigating the possibility of handing the pesticides trade over to the private sector. These modifications would improve the quality of the plant protection service and enable extension staff, under the guidance of plant protection specialists, to teach the farmers correct and safe pesticide use. However, deliberations are at an early stage and the outcome is yet uncertain. In the meantime, the existing system has served IJCS farmers adequately.

Credit (Annex 4)

2.23 An IDA Agricultural Credit Review mission to Bangladesh in 1975 pointed out that operations of the two main agricultural credit agencies -- the Bangladesh Cooperative Bank (BJSB) 1/ and the Bangladesh Agricultural Bank (BKB) -- 2/ were seriously corLstrained by their delinquent debt burden. Both IDA, with financing under Credit 622-BD and ADB are providing technical assistance to review the overall agricultural credit system and make recommendations for its improvement. BK

2.24 To improve the situation GOB has asked commercial banks to increase their agricultural credit. Sonali Bank (SB), the largest commercial bank (now nationalized) has taken a lead in this field. Against Government guarantee, it is already providing inputs credit to IJCS amounting to Tk 4.7 million in 1976, by lending to DAJ, which onlends to farmers. Loans are for six months and recovery levels in 1975 and 1975 were 92% and 90% respectively. With its strong reserve base, large and expalding branch network and experience in agricultural lending and jute markeAing, Sonali Bank would be well qualified to provide IJCS credit arrangements in the future, as planned for the project (para 3.03). Its management is keenly interested in expanding assistance of this type to smallholders and has agreed to provide up to Tk 90 million of its own funds for IJCS credit requirements.

1/ Bangladesh Jatiya Samabaya Bank.

2/ Bangladesh Krishi Bank. - 7-

Domestic Jute MSarketing (Annex 5)

2.25 Domestic marketing involves farmers, a variety of jute traders, jute mills and government corporations. Most farmers sell small ungraded lots of jute at village markets to village middlemen. The product may change hands a number of times, as it is assembled into larger lots before it reaches large traders or government corporations in secondary markets. There, jute may be stored for varying periods and is consigned either as loose jute or, after katcha baling, 1/ to terminal markets or jute mills. There are many variations of this procedure and jute may bypass secondary markets.

2.26 GOB declares a minimum farmgate price, but in some years, particularly when there is a heavy crop, most farmers have to sell at the lower prices that are set by traders. The farmer is in the weakest position in the marketing chain, often subject to traders' harassment and collusion. Short weighing and downgrading by middlemen is widespread, but at present, most farmers have no alternative sales outlet.

2.27 Two Government jute corporations, under the Ministry of Jute, have been established to buy jute from farmers and by competing to ensure that farmers receive the minimum price. However, the corporations have too few buying centers (only 280) to be effective. The corporations have also been handicapped by severe management and financial problems and it is expected that consultants, financed under UK bilateral assistance, will shortly commence a study of the operations of these corporations and make recommendations for improvements.

2.28 In addition, jute marketing is constrained by inadequate storage and baling facilities in the production areas, and the pricing system makes such A small allowance for grade differences that there is little incentive for farmers to improve jute quality.

III. THE PROJECT

A. Brief Description

3.01 The principal objectives of the project would be to improve the productivity of jute farming, and thus farmers' incomes by helping them to increase yields, improve quality of fibre and reduce production costs. About one million acres of jute would be the subject of project actions which would be carried out over a five year period and which would provide:

a. Jute Production

i. Short term credit

1/ katcha baling is a manually operated mechanical baling process. An average katcha bale weighs 4 maunds. ii. Equipment - seed drills and hand hoes;

iii. Extension Services - salaries for incremental staff, housing, transport, extension materials and equipment;

b. Jute Marketing

i. Short term credit

ii. Marketing Infrastructure - jute stores and baling presses; and

c. Technical Assistance - consultants, overseas training and monitoring services.

B. Detailed Features

Jute Production

3.02 The ongoing Intensive Jute Cultivation Scheme (IJCS) covered 0.5 million acres in 16 districts in 1977. The project would strengthen IJCS with production credit, additional staff, transport and housing and would expand its coverage to one million acres by 1981. Expansion would be mainly concentrated in seven districts (Mymensingh, Tangail, Dacca, Comilla, Jessore, Rangpur and Faridpur - see Map) which have the heaviest jute concentration and most favorable growing conditions. The following components would support jute production:

3.03 Short Term Credit (Annex 4). The project would provide Tk 125 million for production credit unc-er the arrangements described in paras 4.12 through 4.16 and Schedule A. Sor,ali Bank would channel credit to farmers and the exerution of a subsidiary loan agreement, satisfactory to IDA, between GOB and Sonali Bank and ratification of a project agreement between IDA and Sonali Bank (SB) would be conditions of effectiveness. Project credit would be for credit requirements incregental to the Tk 20 million level disbursed to farmers under IJCS in 1977. Credit requirements are based on field surveys that indicate about 60% of jute growers would seek seasonal credit.

3.04 Equpment. 25,000 seed drills and 20,000 hand-pushed hoes would be supplied to the IJCS expansion areas. As in the ongoing scheme, DAJ would own the equipment and would distribute it to farmers' associations. Both types of equipment are locally made; seeders cost Tk 500 each and hoes Tk 300. Although their use is beneficial the cost of these implements is very high compared with the income of most farmers. Given this cost, and that on the average farm they are used for a very short period of time purchase of these implements is beyond the means of the majority of farmers. Purchase by jute farmers' associations and rental to individual members is an option, but would involve a degree of cash collection and record keeping inconsistent with the investment concerned, an average of about Tk 14,000 per association. Another factor is that the design of the seed drills requires improvement to ensure a more even sowing rate. For the present, therefore, provision of these - 9 - implements would continue to be financed 100% by GOB. The ADB financed Seeds Project is providing an agricultural engineer to work on improved designs for the seed drills and when these implements are improved, GOB will consider charging a fee for use of both the drills and the hand hoes.

3.05 GOB's Directorate of Agriculture (Extension and Management) carries a large stock of hand sprayers and assurances have been obtained that it would make available from its stock the 20,000 units estimated to be required for pest control for the project. Sprayers have a small cost (about 300 Tk each) and are usually bought jointly by a group of farmers; it has therefore been possible for the banks and cooperatives to finance their purchase under short- term loans in the past. Under the project, SB would provide short-term credit for their purchase.

3.06 Extension Staff. Over the five year period the project would support the following new IJCS staff: 9 senior administrative and technical staff for headquarters, 11 ADA each with a deputy ADA at the zonal level and 250 JEO's and support staff at the unit level. In addition, to relieve extension staff of administrative burdens, 500 Assistant Input Supply Officers (ISOs) would be employed to deal with distribution of equipment, credit and inputs. Forty Subject Matter Specialists (SMSs) would be appointed, two to each zone (a plant protection specialist and an agronomy/extension specialist), to provide technical backup to other field staff, conduct field research and demonstrations and participate in training JEO and JEA. Appointment of these staff is critical to the success of the project and 47% of project costs would be incurred in providing for their salaries, offices, equipment, transport and housing. Assurances have been obtained that GOB would make sufficient budget provision for payment of adequate travel and daily allowances for extension staff.

3.07 Housing and Office Equipment. At present, JEA suffer much hardship due to lack of suitable housing. To overcome this problem, 2500 houses would be constructed under the project, one for each JEA. Each house would have a floor area of about 300 square feet which would include a small office/store. A 200 square foot pole and roof-type shed would be attached to the house where JEA would meet with groups of jute farmers. Construction materials would depend on availability in each locality. Actual housing standards and designs would duplicate, as far as possible, those employed for housing construction under the Extension and Research Project (Credit 729-BD). Project buildings would be maintained by DAJ and assurances have been obtained that GOB would provide adequate funds for such maintenance. The preparation and supervision of the building component would be contracted by DAJ to a local consulting firm of architect/engineers which would be responsible for assisting GOB in the pre- qualification of bidders, preparation of tender documents and evaluation of bids, procurement of building material if required and supervision of construction works. Assurances have been obtained that a consulting firm with qualification, experience and terms of reference satisfactory to IDA would be appointed before April 1, 1978. The project would also provide 250 sets of office furniture for new unit offices, including typewriters and calculators. - 10 -

3.08 Transport. To ensure adequate mobility for DAJ staff, the project would include purchase of 34 motor vehicles, (10 speedboats would be provided for areas deeply flooded, the remainder 24 would be mostly fourwheel drive vehicles) for headquarters and zonal staff, 1060 motorcycles for Deputy ADAs, SMSs, JEOs and ISOs and 2500 bicycles for JEAs. Motor vehicles would be departmentally owned. Assurances have been obtained that the bicycles and motorcycles would be made available to the staff of DAJ under arrangements satisfactory to IDA. They will be sold on credit with adequate incentives to encourage staff to purchase vehiicles, and in accordance with a formula prepared for the Extension and Research Project (Credit 729-BD).

3.09 Demonstration and Field Research Materials and Equipment. The project would provide funds for inputs3 for at least one field demonstration or field trial per jute block each year. The demonstrations and trials would be designed by SMISs in close collaboration with BJRI staff; coordination of the jute research program at the national level would be ensured by the Coordina- tion Committee (para 4.01). The project would also provide extension staff with teaching materials such as charts, leaflets, posters, projectors and slides.

Marketing

3.10 The proposed marketing scheme would offer farmers an alternative sales outlet to village middlemen and would aim to increase the price farmers receive and give incentives for improving grades. The project would finance construction of storage sheds, each equipped with a katcha baling press, to be owned and operated by DAJ. Farmers would deliver jute to the sheds and would receive the government minimum farmgate price for jute delivered. The jute would be graded, baled and stored to take advantage of the seasonal price rise. After sale to private exporters, government corporations or jute mills, farmers would be paid the balance of the sales proceeds, less interest and service charges. In selected thanas, cooperatives operating under the Inte- grated Rural Development Program (IRDP) would be permitted to lease the sheds from DAJ and carry out themselves the marketing operation. In each of these marketing units, a committee comprising representatives of DAJ, Sonali Bank and JFAs would guide and supervise the management by DAJ or TCCA.

3.11 The scheme would fulfill a most important need, but the proposed operation has not been tried in Bangladesh before. Calculations (Annex 5, para 17) indicate that it should be financially feasible, but there would be difficult managerial and organizational problems to overcome. Despite strong technical backup, to be financed by the project, the risks involved in the marketing component are considerabLe. Consequently, the component has been kept small -- 50 sheds to handle 3J,000 tons jute, about 3% of forecast production for the project area. If successful, large scale replication could be considered for a follow-up project.

3.12 Short Term Marketing Credit. The project would provide Tk 30 million short term credit for purchase of farmers' jute under the arrangements described in para 4.17. - 11 -

3.13 Marketing Infrastructure. Jute storage sheds equipped with baling presses would be constructed under the pilot marketing scheme. Sheds would have corrugated iron sheet and local pole walls, corrugated iron sheet and timber truss roof, and rammed earth floor. Fifty sheds, each with 2,000 katcha bale (8000 maunds) storage capacity would be constructed. Each would serve a unit of five jute blocks. Design is based on the assumption that farmers would sell only part of their jute through the marketing scheme and, with at least one turnover, the storage capacity of each shed would be sufficient to handle about one third of the jute produced in the 2000 acre unit area. As the design is not definitive DAJ would test a number of variations on this theme.

Technical Assistance and Training

3.14 Two internationally recruited experts would assist the Director of Agriculture (Jute) -- a project management expert for 24 months and a marketing specialist also for 24 months; the cost of such assistance is estimated at US$5,000 per man-month. Draft terms of reference are given in Annex 6, Appendix 2. Assurances have been obtained from GOB that the consultants would be appointed promptly on terms and conditions satisfactory to IDA and in any case not later than -- management expert - April 1, 1978; market specialist - July 1, 1978.

3.15 The project would include a detailed evaluation of IJCS to be carried out, under the supervision of the Planning Cell of the Ministry of Agriculture, by a suitably qualified socio/economic research institute under terms and conditions satisfactory to IDA. Guidelines for the system to be employed are given in Annex 7. Assurances have been obtained from GOB that a contract, acceptable to IDA, for this work would be signed by March 1, 1978.

3.16 The project would also finance a total of 48 weeks overseas training for project staff and for selected JFA members and Sonali Bank staff.

C. Implementation Schedule

3.17 All project components, except construction of houses, would be completed in four years (Annex 8 and Chart 1). Coverage of IJCS would be expected to expand by 50,000 acres in the first year and by 100,000 acres, 150,000 acres and 200,000 acres respectively in the succeeding three years. Staff recruitment, construction, purchase of transport equipment and materials, and build up of credit disbursements would be phased accordingly. GOB considers, however, that a faster rate of implementation may be feasible and such an eventuality should not be ruled out. Since the siting of JEA houses would depend upon the location of the individual jute blocks and some of these would not be established until the fourth year, house construction would continue into the final and fifth project year. - 12 -

D. Cost Estimates and FinancinR

3.15 Total project costs are estimated at US$33.3 million equivalent, including US$3.8 million in duties and taxes with a foreign exchange component of US$8.6 million or about 26% of total cost. Estimates are based on June 1977 costs. A 10% physical contingencyhas been allowed for civil works and 5% for transport,extension materials and technical assistance. Price con- tingencieshave been applied for staff pay and allowancesat 6% a year; for civil works at 9% a year from 1977 to 1979 and at 8% a year from 1980 onwards; and for all other costs at 7.5% a year from 1977 to 1979 and at 7% from 1980 onwards. Total contingenciesamount to US$8.6 million or 26% of total costs. Project costs are summarizedbelow. Detailed costs are given in Annex 9. - 13 -

Foreign Local Foreign Total Local Foreign Total Exchange ----- Tk million ------US$ million --- %

I. Short Term Credit Production 75.36 50.24 125.60 5.03 3.35 8.38 40 Marketing 30.00 - 30.00 2.00 - 2.00 - Subtotal 105.36 50.24 155.60 7.03 3.35 10.38 32

11. Implements

Seed Drills 12.50 - 12.50 0.83 - 0.83 - Hand Hoes 6.00 - 6.00 0.40 - 0.40 Subtotal 18.50 - 18.50 1.23 - 1.23

III. Extension Services Incremental Staff Sal- aries and Allowances 58.55 - 58.55 3.91 - 3.91 - Buildings and Office Equipment 70.55 24.44 94.99 4.70 1.62 6.32 26 Transport 10.83 10.82 21.65 0.72 0.73 1.45 50 Materials and Equipment 1.46 0.86 2.32 0.10 0.06 0.16 38 Subtotal 141.39 36.12 177.51 9.43 2.41 11.84 20

IV. Marketing Infrastructure Marketing Facilities 7.94 3.07 11.01 0.53 0.20 0.73 27 Subtotal 7.94 3.07 11.01 0.53 0.20 0.73 27

V. Technical Assistance

Consultants - 3.60 3.60 - 0.24 0.24 100 Overseas Training 0.40 1.62 2.02 0.02 0.11 0.13 85 Monitoring 2.36 - 2.36 0.16 - 0.16 - Subtotal 2.76 5.22 7.98 0.18 0.35 0.53 66 Base Cost Estimate 275.95 94.65 370.60 18.40 6.31 24.71 26 Physical Contin- gencies 8.55 3.55 12.10 0.56 0.24 0.80 30 Price Contingencies 85.31 31.32 116.63 5.69 2.08 7.77 27 Total Cost (with contingencies) 369.81 129.52 499.33 24.65 8.63 33.28 26 - 14 -

3.19 The financing plan would le as follows:

Sonali GOB Bank IDA Total

Short term credit - 6.46 7.84 14.30 Implements 0.40 - 1.08 1.48 Exterision services 4.86 - 10.95 15.81 Marketing Infrastructure 0.56 - 0.48 1.04 Technical Assistance - - 0.65 0.65

5.82 6.46 21.00 33.28

The proposed IDA credit of US$21 milLion would finance about 71% of the total project cost (excluding duties and taxes) and would cover foreign exchange and about 50% of local costs. To en;ure prompt payment of local costs incurred, GOB would establish a revolv:ing fund, the project fund, to be operated by the Director of Agriculture (Jute'. Assurances have been obtained that GOB would establish this fund and that it would replenish it periodically to maintain balances adequate to cover expenditure for the ensuing three months, witn a minimum of Tk 1 million. Initial payment of Tk 2 million into this fuindwould be a condition of credit Effectiveness.

3.20 GOB's funding for the project depends on the approval by the National Economic Council (NEC) of the Project Proforma (PP) for the Project. The ministries involved have now submitted the4r PPs to the Planning Com- mission; their approval by NEC would be a conditiornof effectiveness.

E. Procurement and Disbursez'nts

Procurement

3.21 DAJ would be authorized by 0;B to carry out all project procurement directly. Seed drills, hand hoes and office furniture to a total of $1.6 million would be of local design and maanufacture and would be purchased after local competitive bidding using GOB's procedures. These are satisfactory to IDA. Extension materials, mostly charts, posters, pamphlets, blackboard, etc. with total cost between US$10,000 to 25,000 would be purchased locally while fertilizers and pesticides for field t-rialsin the same order of value would be purchased from GOB agencies which are the sole importers. Motor vehicles, motorcycles, bicyles, baling presses and office equipment to a total of $2.3 million would be purchased over a four-year period and would be widely dispersed in rural areas. It would therefore be difficult to ensure adequate mairntenance and spares for a small nunmber of a variety of imported vehicles and equipment. They would thus be prccured after competitive bidding advertised locally, in accordance with IDA guidelines; there are in Bangladesh enough local firmlsand representatives of foreign firumsto ensure a sufficient degree of competition and to provide adequate services for maintenance and spares. Small off-the-shelf items, costing less than US$10,000 each, could be purchased by prudent shopping through normal commercial channels. Such purchases would be limited to US$300,000 in total. - 15 -

3.22 Civil works, though of total estimated cost of US$9.5 million (in cluding contingencies)would each be small (none exceeding US$20,000 in value), scattered over a wide area and would be constructedover a five year period. These works would not be suitable for internationalcompetitive bidding and contracts would be awarded on the basis of competitivebidding advertised locally, following procedures acceptable to IDA. DAJ may have to provide some materials such as cement, iron sheets and timber to contractorsand in this instance procurementwould be on the basis of competitivebidding advertised locally in accordance with procedures satisfactoryto IDA. For all contracts for goods or civil works exceeding US$100,000 in value, draft tender documents and bid evaluationswould be submitted for IDA review before issue or award. Assurances have been obtained that GOB would follow procurement procedures outlined in this and in the preceding paragraph.

Disbursements

3.23 Disbursementswould be made for: (a) 55% of eligible expenditures for net incremental loan disbursements; (b) pay and allowances for incremental staff: 55% of total expenditures; (c) constructionmaterials and civil works: 100% of foreign expendituresand 70% of local expenditures;(d) vehicles and equipment: 100% of foreign expenditure for directly imported goods or 100% of local expenditures(ex factory costs) for goods manufacturedlocally, or 70% of expendituresfor goods procured locally; (e) consultants,overseas training and monitoring: 100% of total expenditures. Disbursementfor the credit component, item (a) and for incrementalstaff costs, item (b) would be made against certificatesof expenditure,the documentationfor which would not be submitted,but would be available for review during project supervision. Disbursementsagainst all other items would require full documentation.

F. Accounts and Audits

3.24 Sonali Bank, DAJ and the Jute Ministry would be the agencies concerned with project disbursements. They would maintain separate accounts for the project, which would be audited annually, together with disbursement documents,by independent auditors acceptable to IDA. DAJ would also maintain accounts for its jute marketing activitieswhich would also be subject to independent audit. Certified copies of audited accounts and auditors reports would be sent to IDA within six months of the close of each fiscal year. Assurances have been obtained that the accounting and auditing procedures described above would be observed.

3.25 Assurances have been obtained that to undertake the audits of the project accounts, independentauditors satisfactoryto IDA would be appointed. The appointmentof commercial auditors satisfactoryto IDA for the Sonali Bank's project accounts will be a condition of effectiveness. - 16 -

IV. ORGANIZATIONAND MANAGEMENT

A. Coordination

4.01 DAJ, Sonali Bank, IRDP and the Jute Ministry would be project implementing agencies,while BADC, BJRI and the Directorate of Agriculture (Exten- sion and Management) would provide supporting services. Activities of the agencies are listed in Annex 6, AppE,ndix1 and project organizationalstucture is shown on Charts 2 and 3; WB 1709C and 17337. A national committeewould be established to coordinate the work cf these agencies and to review progress of the project. Its membership would include the Secretary, Ministry of Agricul- ture (Chairman)and a representativefrom the Ministry of Finance, Ministry of Planning,Ministry of Jute, IRDP, Jute Research Institute, Sonali Bank, and Bangladesh Jute Association. The Director of Agriculture (Jute) would be secretary and representatives of other servicing agencies would be coopted as necessary. The CoordinationCommittee would meet at least every two months to review the progress and problems of the project.

4.02 In addition, coordination committeeswould be establishedat the zonal level. These committees would comprise the Assistant Director of Agriculture (Jute) Chairman, and a representativeeach of Sonali Bank, BADC, Directorate of Agriculture (ExtensioTiand Management),JEA, Bangladesh Jute Association,the Government Jute Corporationsand IRDP if participatingin the project in the zone. Where jute marlcetingis being tested a representativeof a government jute purchasing corpora:ionwould also be a member. The committee would meet monthly and send records of its meetings to the national committee. Assurances would be sought that coordinationcommittees as described would be established and their establishmentwaould be a condition of Board presentation.

B. ProjEct Agencies

Directorate of Agriculture (Jute) (DAJU

4.03 The direction and management of IJCS would be the only task of DAJ. DAJ would be responsible for extension,purchase of implements,transport and equipment;housing construction;employment and training of staff, provision of credit to farmers and the pilot marketing scheme. DAJ is now headed by an Additional Director but a post of Director would be created. This Director, to be responsibleto the Secretaryof Agriculture,would be assisted by a project unit headed by an Additional )irectorand comprising supervision, administrative,technical, and markeing units. It would be a condition of effectivenessthat the Director and the Additional Director have been appointed. Staff of the project unit would include a building engineer, a project advisor and a marketing advisor (Chart 4, WB 70'95and Annex 6, Appendix 3). Existing headquartersstaff would be able to iritiate procurementand staff recruitment, but to sustain and accelerate project execution,prompt appointmentof a senior administrativeofficer, a senior finarce officer and the building engineer - 17 -

would be necessary. Assurances have been obtained that these three o.fcers would be appointed by March 1, 1978 and that all additional headquarter staff would be appointed by May 1, 1978.

4.04 At full development DAJ would be organized into 20 zones each of about 50,000 acres jute. Each zone would comprise about 25 units of 2,000 acres. In turn, each unit would be subdivided into about 5 blocks of 400 acres. Farmers of each block would, as now, be organized into a JFA of about 500 jute farmers. In 11 thanas covered by IDA and ADB financed rural development projects somewhat different arrangements would be made, see para 4.12, but the role of DAJ would be basically similar. Each zone would be administered by an ADA, assisted by a deputy and two SMSs, each unit by a JEO with an ISO to handle administrative tasks and, a JEA at each block, would undertake extension and assist farmers obtain inputs and credit. Existing blocks cover 200 acres jute; expansion to 400 acres would in most cases take place by merging neighboring blocks.

4.05 Extension activities have for some time been successfully organized on the "Training and Visit" basis with JEA receiving regular biweekly training and visiting JFA subgroups on a fixed day once every two weeks. The JEAs are supervised by JEOs who also tour on a fixed schedule. This system would be continued. However, with the strengthening of general extension services in the northwest of the project area by the IDA-supported Extension and Research Project, the eventual merger of the jute extension services with general agricultural extension should be considered. Both projects would have evaluation components. In addition, the Agricultural and Rural Training Project (Credit 621-BD) includes a study of extension services. This study would be conducted in the second year of the Extension and Research and Jute Projects and would examine the means and timing of merging jute extension with general extension, should this be desirable. Study findings together with evaluation results from the two projects would provide information for a joint GOB/IDA review of the future organization of jute extension. Assurances have been obtained that GOB would carry out the extension program for the project in a manner acceptable to IDA.

4.06 The Headquarters marketing unit would be responsible for design and implementation of the trial marketing scheme. With help of field staff, and in the 11 rural development thanas in consultation with the Integrated Rural Development Program (IRDP) it would select JFAs to participate in the scheme. In non-IRDP areas DAJ would employ management and labor to purchase, store, bale and sell JFA members' jute. DAJ would charge a fee per maund calculated to recover full operating costs (including amortization of capital investments), based on a double turnover of the storage capacity.

4.07 In those areas selected for marketing trials which are located in the 11 IRDP thanas, the thana multipurpose cooperatives, the Thana Central Cooperative Associations (TCCAs), would have the choice of either letting DAJ construct and operate the jute stores as in non-IRDP areas or of leasing stores and presses from DAJ and operating them themselves. It is expected that this second alternative should eventually establish a pattern for cooperatives' involvement in jute marketing. Rent payable to DAJ under this alternative would be on a per maund throughput basis and adequate to recover full costs - 18 -

(amortization,maintenance and insurance) in the event of throughputreaching double the level of storage capacity. GOB would establish marketing fees and rental charges, such fees and charges to be reviewed annually and revised as necessary. Agreement between GOB an

Input Supply Services

4.08 DAJ with assistance from JEA committeeswould, before each jute season, prepare total IJCS requiremerLtsfor fertilizer,jute seed, pesticides, and spray pumps. Assurances have been obtained that GOB would cause:

(a) BADC to continue to supply IJCS fertilizer requirements on a priority basis and in good time for jute sowing;

(b) the Seed Directorate of BJRI to meet IJCS requirements;and

(c) the Directorate of Agriculture (Extensionand Management) to stock at district and thana level adequate supplies of pesticides to meet IJCS forecast requirements.

C. Training

4.09 Regular and special intensive staff training is a key feature of the training and visit extension system practiced by DAJ. Such training includes fortnightly one day training for JEAs and ISOs, monthly two day training for JEOs and longer preseason courses for all field staff. The training program would be drawn up and coordinated by the training specialist at DAJ Headquarters. 'BJRI would help conduct courses for senior staff, Sonali Bank would assist in teaching administrat.ve, credit and jute marketing procedures to ISO, and the Jute Ministry would provide training in jute grading. Assurances have been obtained that GOBwould cause such a program to be carried out.

4.10 Unlike the Village Extension Agents (VEAs) who are diplomates of one of the AgriculturalTraining Institutes,most JEAs have no preservicequalifi- cations. This lack of formal training has not proved to be an impediment to JEAs performing their duties, due to the adequacy of in-service training. It has, however, meant that promotional opportunitiesopen to JEAs have been limited and this would be corrected by sending batches for diploma training to AgriculturalTraining Institutes,or at similar institutions. GOB is considering the most appropriate syllabus for such training and the length of course needed to qualify JEAs at the same level as VEAs. Such qualification would facilitate the amalgamationof tae two services, should this be recommended. An assurance has been obtained from GOB that proposals for this training would be submitted to IDA by M4arch31, 1978.

4.11 There is lack of experience in Bangladesh with commodity marketing operationssupported by credit and managed by farmers' groups. To provide such experience,the project would fin

D. Credit Arrangements

4.12 Production and marketing credit would be provided by the Sonali Bank. In the 11 thanas 1/ now subject to either IDA (Credit 631-BD) or ADB- supported rural development projects under the Integrated Rural Development Program (IRDP) of the Ministry of Local Government, Rural Development and Cooperatives, the loans would be made to the TCCA/KSS 2/ cooperatives, which would onlend to their jute growing members. TCCAs are the thana apex societies and KSS their constituent village primary societies. The KSSs would be serviced technically by the Directorate of Agriculture (Jute) in the same way as JFAs in other parts of the country (para 4.04).

4.13 In other thanas Sonali Bank credit would be channeled to DAJ and then through the JFAs to their individual members. These are the existing arrangements and they work satisfactorily (para 2.24). JFAs have no legal standing and given GOB's current intentions of increasingly employing TCCA/ KSS as the medium for farmer credit, it is not considered desirable to provide them with such standing at this time. These arrangements, however, are only temporary. Agricultural credit in Bangladesh is now being reviewed by a team of consultants financed under an IDA Technical Assistance Credit (622-BD); the review, expected to last about two years, will make recommendations for improving the existing situation. By September 1980, GOB would review the effectiveness of the project credit mechanisms under this project - the TCCA/KSS and JFA systems - with the objective of determining the best arrangements for supplying jute farmers with credit. Assurances to this effect have been obtained and any changes made in the credit system within the project development period would be agreed with IDA.

4.14 TCCA/KSS in the IRDP thanas have membership procedures and requirements that might exclude some jute farmers. Consequently, IRDP has agreed to modify for jute farmers two membership requirements for a two year transitional period in which:

(a) as part of their first production loan, jute farmers would be permitted to borrow the Tk 10 required to purchase a share in KSS 3/; and

1/ These so-called 'rural development thanas' are: Kotwali, Sherpur, Gabtali, Sariakandi, Muktagacha, Trisal, Gaffargaon, Raiganj, Kazipur, Serajganj and Ullapara. However, no IJCS program is presently scheduled in Sherpur thana. In the future, additional thanas may be covered by similar projects.

2/ Thana Central Cooperative Association/Village Cooperative Society (Krishi Samabaya Samity).

3/ This requirement amounts to an entrance fee that new members have to pay. - 20 -

(b) the amount of jute production loans would not be restricted to a multiple of ten times the sum of their shareholdings and amounts in their KSS savings accounts.

Assurances have been obtained that these membership modifications would be adopted not later than March 1, 1978. Jute farmers wishing to join KSS would be required to be clear of nny debts owing to precursor cooperatives in the IRDP Thanas or, if still in debt to such cooperatives, to have these debts rescheduled in line with procedures agreed with IDA under the IDA- supported Rural Development Project (Credit 631-BD).

4.15 Credit requirements of JFA members would be assessed by DAJ staff and a loan in the amount recommended for all JFAs in a zone would be made by Sonali Bank to a DAJ account controlled by the ADA for the zone. For inputs loans, Sonali Bank would disburse directly to JFA suppliers, such as BADC, against certified receipts of inputs delivered to JFA; cash loans would be paid to the farmers by Sonali Bank. The ADA and his staff would maintain the records of each JFA including the individual accounts of its members. Sonali Bank would be responsible for collecting repayments from farmers but DAJ as the primary borrower would be info~-medof any delinquencies or problems, and its staff would be involved in the follow-up of such cases. In the 'rural development thanas', credit requirements of KSS would be assessed by the TCCA/KSS assisted by DAJ staff and credits in cash and kind would be distributed by the KSS to its members. KSS would maintain on-lending records and be responsible for the collection of loan repayments. During the two year transition period, TCCA would verify and endorse loans recommended by DAJ and Sonali Bank for KSS and following such endorsement Sonali Bank would deal directly with the KSS.

4.16 Farmers, either as JFA or KSS members, would be eligible for the following production credit: credit in kind Tk 100 per acre; credit in cash Tk 150 per acre. Production credit would be repayable within nine months and at a minimum interest rate of 12 percent per annum. This would involve an increase over the 10.5 percent now charged to JFA members but would not act as a disincentive for farmers to ob-ain credit (see farm budgets in Annex 10) and would be consistent with the GOB objective of standardizing the rate for agricultural lending at 12 percent. Assurances have been obtained that any farmer would be excluded from receiving future loans if:

(i) he has defaulted on his previous loans and interest, or;

(ii) he belongs to a JFA or KSE with a recovery rate on previous loans below 75%.

4.17 The project would include Tk 30 million short term credit for marketing. This amount is based on the forecast government minimum farmgate price and a total storage capacity of 400,000 mds. Marketing credit would be provided by Sonali Bank to TCCA/KSSs anl to DAJ for purchase of farmers' jute at the 50 centers involved in the pilot marketing scheme. Credit for this purpose would also bear interest at 12 percent per annum. Rates and lending terms are listed in Schedule A; assur7anceshave been sought that they would be adopted for the implementation of the project. - 21 -

E. Monitoring and Evaluation (Annex 7)

4.18 The basis of the project monitoring system would be the quarterly progress reports of JEAs and JEOs; formats for these reports would be prepared by DAJ. These reports would be reviewed by the zonal or districts coordination committees and then forwarded to DAJ headquarterswhich would compile them and transmit them to GOB and IDA the aggregated version. A draft outline of the quarterly reporting procedures to IDA is shown in Annex 11. Assurances would be sought that formats for all these reports would be prepared and sent to IDA before March 1, 1978.

4.19 Overall project evaluation would be the responsibilityof the Plan- ning Cell of the Ministry of Agriculture. Since it would require varied expertise, the project evaluation would be contracted to a local research institute under the supervision of the Planning Cell. Evaluationwould entail data collection by means of three surveys each year, one just before jute sowing, another during jute harvesting and the third at the end of the marketing season. These surveys would evaluate effectivenessof the services to jute farmers (includingquality of the jute seeds and timeliness of their distribution,and adequacy of plant protection and of pesticides distribution), progress of project implementation,training program of the extension staff, and project costs and benefits. Reports resulting from the surveys would be considered by the project CoordinationCommittee (para. 4.01) and IDA and, if necessary would include recommendationsfor modificationsto the project.

V. PRODUCTION,MARKETING AND FARMERS' BENEFITS

Yield and Production

5.01 Surveys carried out on all types of jute land, from lowlands subject to flooding to well drained uplands soils, indicate present average yields of 14.5 mds of fiber per acre for jute grown under traditionalmethods and of fiber 22 mds per acre under the ongoing IJCS, although yields of up to 30 mds per acre have been achieved. The project is expected to raise average yields to 25 mds per acre on one million acres. Yield increase would result from use by participatingfarmers of improved seed and by their adoption of correct sowing and harvesting dates; line sowing (resultingin optimum plant population and better weed control); correct fertilizer use; and effective plant protection. As a result annual production on the one million acres subject to project action should increase from 3.7 million bales at present to 5 million bales in the sixth year of the project. Such a project induced increase of 1.3 million bales in Bangladesh jute productionwould amount to 15% of forecast 1985 world exports and, if placed on the world market, could as discussed below have a depressive impact on world jute prices. Assurances were obtained that during the project period, GOB would not expand the coverage of IJCS beyond a million acres unless it establishesthat the proposed expansionwill have no adverse impact on the implementationof the project and on the benefits derived from jute production in the country. - 22 -

World Market Prospects

5.02 With 85% of Bangladeshjute productionexported in roughly equal quantitiesof fiber and manufactured goods, production levels eventually depend on the share Bangladesh obtains cf the world market for jute or similar fibers. Jute is mainly used for packaging,carpet backing, ropes and wall hangings. Demand, which expanded steadily until the mid 1960's has declined since then, due to changes in packaging technologyand competitionfrom synthetic substitutes. With continuing technologychanges and competitionfrom synthetics, world Jute consumptionis projected to grow at 1.4% during the 1970s and at 0.4% between 1980 and 1985. However jute consumption is expected to grow subtantiallyonly in the producing countries. Consequentlysome decline in the internationaltrade in fiber Ls anticipated.

5.03 Short term export prospects for Bangladesh remain reasonablyfavor- able but in the longer term the s:izeof the jute market will depend on reliable supplies,price and the success of research and development efforts to find new uses for traditionalproducts as well as new uses for jute. Without the project and the savings it would bring in productioncosts Bangladesh'sshare of the market for the 1980s has been projected by the Bank Economic Analysis and Export ProjectionDepartment (EAPD) at 0.5 million MT fiber and 0.5 million MT goods, equivalent to about 5.5 million bales. With about 0.5 million bales required for domestic use, a total jute productionof about 6 million bales would be needed to meet market demands. At this level of productionin 1985 Bangladeshjute exports would be sold at an estimated price of US$344 per ton (in 1977 constant dollars).

5.04 The project would lower jute production costs by about 23% in financial terms and by about 31% in econlomic terms (Annex 10, Table 1). Tentative analysis conducted by the Bank indLcates that by lowering the export price by 10% which would be possible with the lower farm productioncosts, Bangladesh may be able to expand exports by up to 20% to about 6.6 million bales or a total production of about 7 million bales.

Farmers' Benefits

5.05 Benefits from reduced jute production costs estimated at Tk 14 per maund and from increase in yield from 15 to 25 mds per acre (Annex 10, Table 1) would make project participationvery attractive to farmers. With farmgate prices over the last three seasons ranging from Tk 60 to Tk 90 per maund (the 1976/77 governmentannounced minimum price), net returns per acre would vary between Tk 115 to Tk 550 for non IJCS farmers and between Tk 560 and Tk 1,310 for IJCS farmers (Annex 10, Table 2).

5.06 Jute directly competes fo: land with aus paddy since their sowing and harvestingdates are similar. W4hilethe respectiveacreages of the two crops depend largely on relative profitability,other factors such as the need to grow food, land suitability,availability of retting water, risks and labor requirements,affect farmers' decisions on which crop to plant. GOB believes that, based on traditionaltechnology for both crops, the jute acreage remains stable when the farzigatejute price is 1.3 times that of - 23 - paddy, which correspondsroughly to the present ratio of the two prices. Most aus is grown by traditionaltechnology yielding 12 mds paddy per acre with an estimatednet return of Tk 250 at the present GOB floor price for paddy of Tk 74 per maund. (Annex 10, Table 3). In upland areas improved technology is spreading under which farmers achieve yields of 20 mds paddy per acre with net returns of about Tk 700 (Annex 10, Table 4). At current price levels, traditional jute seems more profitable than traditionalpaddy and the same applies for the two crops under improved technology. However, improved paddy is already competitivewith traditionaljute. Consequently, it is unlikely that there would be much diversion from jute to paddy in the best jute areas where IJCS expansion would be concentrated (see map). How- ever, in other parts of the project area, particularlythe Southwest,where conditions are favorable for improved paddy and where no IJCS expansion is planned, some paddy production may take the place of jute.

Pricing

5.07 Regulation of jute supplies, to ensure that production is in line with market requirements,would be a key requirement for the success of the project. For this purpose GOB should design an effectivejute and paddy pricing mechanism based on supply and demand information,production and marketing costs and the interrelationshipof jute and paddy prices. An IDA Foodgrain Price Policy Review Mission has recently examined the requirements for a foodgrainpricing mechanism. It has recommended establishmentof a high level interdepartmentalFood Policy Commission that would advise GOB on all policy aspects that affect foodgrainproduction and supplies. Jute price and production policies affect foodgrain supplies and would have to be covered by the Commission. The Commissionwould only be effective if adequate services were established to monitor and analyze farmgate prices and for collecting crop production cost and return data. Alternately,GOB may prefer to establish a separate but equally high level jute policy commission which could commission and supervisemarket and cost studies and would advise GOB on domestic and export prices and market opportunities. Such commissionwould need to col- laborate closlyv with the Food Policy Commission.

5.08 Besides having regard to the alternative use of land for paddy production,pricing policies for jute should be aimed at maintaining export prices at stable and competitive levels vis-a-vis syntheticswhile maximizing long-run economic benefits through achievementof an optimal mix between raw jute and jute goods exports. The policies should allow for prices to be flexibly adjusted in response to short-run changes in demand and supply conditions without disrupting the long-term objectives. Further, while the policy should be aimed at ensuring adequate and stable supplies of raw jute to mills and for export, it should also provide growers with an adequate return and jute mills with reasonable raw material costs after taking farm- to-mill marketing costs into account. Assurances wete obtained from GOB that a study of the pricing policies and internal marketing of raw jute and jute goods and a study of world export markets for the same products,would be initiatedby March 1, 1978 under terms of reference satisfactoryto IDA. This study is now expected to be undertaken under UK bilateral assistance and will also satisfy the requirementsof the proposed Sixth IDA Imports Program Credit. Based on the findings of this study, assuranceswere obtained that - 24 - by December 31, 1978, GOB would submit to IDA for review, a plan, including an implementationtimetable, for establishinga jute price mechanism.

Budgetary Impact

5.09 The annual operatingancL maintenance cost after completionof the five year developmentperiod woulcLbe small - about US$0.77 M, at US$0.77 per farm family. This additional requirementcompares with GOB budgetary allocationsin 1976/77 of US$199., M for agriculturaldevelopment projects and US$511 M for total current expendituresin the same year.

VI. ECONOMIC JUSTIFICATION

Economic Benefits (Annex 12)

6.01 By increasingper acre yields of jute and reducing production costs of jute fiber, the project would provide Bangladeshwith the following alternative opportunities:

i. maintain jute production at present levels and utilize resourcesreleased, mainly land, for other crop production, mainly paddy;

ii. use its improved competi-iveposition to capture a larger share of the world marke- for jute and its substitutes, at lower prices; and

iii. a combinationof (i) and (ii).

6.02 A combinationof increasedjute exports and a swi-tchof some land from jute to paddy is most likely to occur in practice. The exact combination for maximizing returns from the project is so complex to forecast,depending as it does upon such factors as world prices for paddy and jute and their substitutes,that its calculationwould be subject to very large margins of error. Further, it is highly unlikely that in practice GOB would be able to fine tune jute and paddy price relationshipsso carefullythat each year the optimal mix of crops and thus optimal economicbenefits would be obtained from project investments.

6.03 Economic analysis indicates that if Bangladeshchose to maintain jute production at current levels, about 6 million bales, and utilized the about 400,000 acres so released from jute productionfor growing paddy (AlternativeI) the economic rate of return (ERR) for the projectwould be over 50%. The analysis also shows that an ERR of over 50% would be obtained if jute productionrose to 7.0 million bales, the situationthat would occur if the 400,000 acres surplus to those required to generate 6 million bales remained in jute cultivated in the traditionalmanner (AlternativeII), despite the fact that exports would have to be made at world prices some 10% lower than under the first alternative(see para 5.04). These relativelyhigh - 25 - rates of return are typical of this type of project where relatively low investments in extension and other farmer support services are employed to bring about substantial improvementsin the efficiency of utilization of existing resources.

6.04 The economic rate of return is sensitive to the level of jute prices. For instance,under Alternative II - where a higher level of jute export causes a lower export price - the ERR is lower than under Alternative I (but still over 50%). This indicates that, if jute were to be grown on a large acreage (above 1.7 million acres of Alternative II), the resulting increase in production may well be more than offset by the decrease in export prices and the ERR could fall below acceptable levels. The world market price could also, for exogenous reasons, be lower than presently forecast. If the world price for jute declined by 15% in the case of Alternative I the ERR would remain at over 50% while a similar price decline in the case of Alternative II, would result in a fall in the ERR to 20%. Provided GOB establishesand operates efficientlythe intelligenceand price fixing mechanisms described in paras 5.07 and 5.08 the risk of over-productionwould be small and justified given the project's large potential benefits.

6.05 Another risk is that, because of continuing fluctuationsof the jute/paddy price ratio, farmers would keep switching from one crop to the other (para 5.06). Here also, this risk will be minimized if the price fixing mechanism referred to in the paragraph above works efficiently. In addition, in the IJCS areas, where farmers get a better return on their jute production than in non-IJCS areas, a higher paddy price would be required to entice them to switch to paddy. To this extent, the geographical expansion of IJCS should lessen the propensity of farmers to switch from jute to paddy. This would cause a dampening of the fluctuationsof the jute (and the paddy) area, which in turn should cause a lessening of fluctuations in production and price.

6.06 The project would benefit about one million farm families, or about six million people. Practicallyall of the beneficiarieswould b1 small farmers, with farms of less than two acres. About 100,000 families would also benefit from higher prices and secure sales outlets for part oi their jute which would result from the trial marketing scheme.

VII. RECOMMENDATIONS

7.01 During negotiations,agreements were reached with GOB on the following principal points:

(a) The Directorateof Agriculture (Extension and Management) would make available under terms suitable to IDA adequale numbers of sprayers of design and in condition satisvas M to the Director of Agriculture (Jute) (para 3.05);

(b) The Governmentwould make sufficientbudget provision :rr payment of adequate travel and daily allowances for cn:.ion staff (para 3.06); - 26 -

(c) The Government would prov:ideadequate funds for maintaining project buildings (para 3.07);

(d) A consulting firm, with qualifications,experience and terms of reference satisfactoryto IDA would be appointed to assist DAJ in the preparation and supervisionof the building component before April 1, 1978 (para 3.07);

(e) Bicycles and motorcycleswould be made available to the staff of the Ministry of Agricultureunder arrangements satisfactoryto IDA (para 3.08);

(f) The following consultantswould be appointed promptly on terms and conditions satisfactoryto IDA.

(i) Project Management Advisor by April 1, 1978; and

(ii) Marketing Specialist by July 1, 1978 (para 3.14).

(g) By March 1, 1978 a program (includingtime schedule) for project evaluationwould be submitted to IDA for approval and an organizationwith qualifications,experience and terms of reference satisfactoryto IDA would be recruited (para 3.15);

(h) The Government would establish the Project revolving fund with Tk 2 million initial contributionand would replenish it periodicallyto maintaia balances adequate to cover expendituresfor ensuing tiree months, with a minimum of Tk 1 million (para 3.19);

(i) The Government would observe specifiedprocurement procedures (para 3.22);

(j) The Government would observe specified accounting and auditing procedures (para 3.24);

(k) The Government would appoint independentauditors satisfactory to IDA for the project (para 3.25);

(1) The Government would establish specified coordination committees (para 4.02);

(m) A senior administrativeofificer, a senior finance officer, and a building engineer would be appointed in DAJ headquartersby March 1, 1978 and additionel headquarter staff would be appointed by May 1, 1978 (para 4.03);

(n) The Government would carry out the extension program in a manner acceptable to IDA (para 4.05); - 27 -

(o) The Government would instruct:

(i) BADC to continue to supply IJCS fertilizer requirementson a priority basis;

(ii) the Seed Directorate of BJRI to meet IJCS seed requirements;and

(iii) the Directorate of Agriculture (Extensionand Management) to stock adequate supplies of pesticides and sprayers (para 4.08);

(p) The Government would carry out an inservice training program for JEOs, ISOs and JEAs (para 4.09);

(q) By March 31, 1978, the proposals for the training for JEAs at Agricultural Institutes,or at similar institutions, would be submitted to IDA (para 4.10);

(r) Overseas training proposals would be subject to IDA approval (para 4.11);

(s) The Government would conduct a review of project credit operationsby September 1, 1980 and would agree with IDA any change in the IJCS credit system during the project development (para 4.13);

(t) TCCA/KSS membership modifications for jute farmers would be adopted by Maich 1, 1978 (para 4.14);

(u) A farmer would be excluded from future loans:

(i) if he has defaulted on his previous loans and interest; or

(ii) if he belongs to a JFA or KSS with a recovery rate on previous loans below 75% (para 4.16).

(v) It would adopt credit interest rates and lending terms, and conditions satisfactoryto IDA (para 4.17);

(w) Formats for monitoring the various components of the project would be prepared and sent to IDA before March 1, 1978 (para 4.18);

(x) The coverage of IJCS would not be expanded beyond one million acres unless the Government establishesthat the proposed expansion will have no adverse impact on the implementationof the project and on the benefits derived from jute production (para 5.01); - 28 -

(y) A study of the pricing policies and internal marketing of, and world market possibilitiesfor, raw jute and jute goods would be initiated by March 1, 1978, (para 5.08); and

(z) By December 31, 1978, GOB would submit to IDA for review, a plan, including an implementationtimetable, for establishing a jute price mechanism (para 5.08).

7.02 GOB has met the following condition for presenting this project to IDA's Board of Executive Directors:

The Project Proformas havE been submitted to the Planning Commission by the ministries concerned (para 3.20).

7.03 The followingwould be conditionsof credit effectiveness:

(a) The execution of a Project Agreement between IDA and Sonali Bank had been ratified by GOB (para 3.03);

(b) GOB had signed a Subsidiary Loan Agreement, satisfactoryto IDA, with Sonali Bank (para 3.03);

(c) A Project revolving fund had been establishedand had received on initial payment of Tk 1 million (para 3.19);

(d) The Project Proformas had been approved by GOB (para 3.20);

(e) Independentauditors satisfactoryto IDA had been appointed for auditing the accounts of Sonali Bank (para 3.25);

(f) Coordinationcommittees have been establishedat the national and zonal level (para 4.02'; and

(g) The Director and the Additional Director of Agriculture of DAJ have been appointed to the Project Unit (para 4.03).

7.04 It would be a condition of disbursementof the marketing credit component,that marketing and rental fees acceptable to GOB and IDA had been agreed to (para 4.07).

7.05 With the above assurancesand conditions,the proposed project would be suitable for an IDA credit of US$21 million on standard IDA terms. The borrower would be the Government of Bangladesh. SCHEDULEA Page 1

BANGLADESH

JUTE PROJECT

Prolect Lending Terms and Conditions

The followinglending terms and conditionswould be used in implementing the project and would not be alteredwithout prior IDA agreement:

Interest Margin Use of Margin (M) (%)

(1) Onlendingof IDA Funds

GOB/Bank of Bangladeshto Sonali Bank. 3.00 3.00 0.75 to cover IDA service charge and 2.25 as contribution Guarantee Fund -

(2) Onlendingby Sonali Bank (SB) of Blend of On-lent IDA and Own Funds

a. To lute trowersthrouh Departmentof Jute (DAJ) 2' SB to DAJ 10.50 5.70-- 'To return 9% on SB funds employedand 3.00% on on-lent IDA funds

4.80 Cost of special SB field service 10.50

DAJ to Farmers 12.00 1.50 Collectioncommis- sion 12.00 SCHEDULE A Page 2

b. To jute growers through TCCA/KSS SB to TCCA 7.50 5.70 To return 9% on SB funds employed and 3.00% on on-lent IDA funds

1.80 Costs of special SB field services 7.50

TCCA to KSS 9.50 2.00 - TCCA service charge 9.50

KSS to Farmers 12.00 1.00 KSS service charge

1.50 Collection commission

12.00

(3) Other Lending Terms and Conditicns

(a) Repayment period for production loans not to exceed 12 months and for marketing loans not to exceed 9 months;

(b) A farmer would only qualify for a production or marketing loan if:

(i) He is a member of a JFA or KSS acceptable to GOB;

(ii) He is not in default on previous production or marketing loans;

(c) No loans would be made by TCCAs to any KSS in which members' defaults in the payment of principal and interest required under loans, for jute production and marketing in the preceding three years, represent more than 25% of the aggregate amounts of the principal and interest.

(d) No loans would be made to farmers belonging to JFAs in which members' defaults in t:he payment of principal and interest required under loans for jute production and marketing in the preceding t:hreeyears, represent more than 25% of the aggregate amounts of the principal and interest. SCHEDULE A Page 3

(e) Loan ceiling for production loans to be Tk 250 per acre based on Tk 100 for inputs and Tk 150 for hired labor. A marketing loan would be equal to the Government's minimum farmgate price for jute multiplied by the quantity of jute delivered by the farmer receiving the loan.

1/ Rural credit arrangements in Bangladesh are currently under study by consultants (financed under IDA Technical Assistance Credit 622-BD) and many elements of the system are ad hoc in nature and will remain so until study is complete. Such is the case of the Guarantee Fund which was established in 1974 to provide a cushion against overdues in the agricultural credit sector. Operational rules for the fund have not been established and currently its funds are used by the Bangladesh Bank for the refinancing of agricultural credit institutions.

2/ Derived as shown below:

Cost of Funds to Sonali Bank

Credit Amount Interest/Charges Total Cost (US$ million) (%) (US$ million)

(a) IDA Funds 7.84 3.00 0.235 (b) Own Funds 6.46 9.00 0.581 (c) Total 14.30 5.70 0.816

The cost for Sonali Bank of its own funds (9.00%) is equivalent to the Bangladesh Bank rate plus 1%e This cost of 9% would be to cover interest paid by Sonali Bank on deposits (plus cost of attracting and administering deposit accounts), or on borrowing from Bangladesh Bank, and to provide normal margin of profit.

3/ In previous projects involving TCCA and financed by IDA a 2.50% service charge has been built into the interest rate structure. In this project, due to the services provided by DAJ to the TCCA/KSS and the more direct lending route of SB to TCCA/KSS, a reduction in the provision to 2.00% is considered justified.

ANNEX I Page 1

BANGLADESH

JUTE PROJECT

Jute Production

Introduction

1. Jute has been grown for centuries in Bangladeshand has long been used as a fiber by villagers. The first introductioninto world trade was from Bengal by the East India Company at the end of the 18th Century. Exten- sive production and manufacture started in the mid-19th century and, in terms of volume has become the second most important natural fiber in the world, after cotton. The fiber is used for packaging materials, carpet backing, furnishings,upholstery, tarpaulins and rope. Jute stalks the byproduct, after the bark (which contains the fiber) has been stripped, is an important source of fuel and fencing material in the rural areas.

2. Jute is the most important cash crop in Bangladesh and in the growing season covers about 20% of the total cropped area and about 30% of the cropped area in the main jute growing districts. Jute fiber and jute goods exports provide about 80% of Bangladesh'sforeign exchange and the fiber is the raw material for the most important industry in the country.

Varieties

3. There are two varieties of jute, white or Capsularis jute (Corchorus clapsularis)and tossa or Olitorius jute (C. olitorius). Of these Capsularis constitutesabout two-thirdsof the total crop. It resists waterloggingand even flooding in the later stages of growth and is consequentlysown on low land. Olitorius on the other hand does not tolerate waterlogging and is therefore grown on higher ground.

4. Recommended strains developed by the jute research services are D-154 and C-6 for Capsularis and 0-4 for Olitorius. These varieties were developed pre World War II but some improvementby selectionhas been achieved subsequently. Increasing jute fiber yields is technicallydifficult particularly because of the small amount of genetic material available. A further constraint in Bangladeshis the lack of access to jute strains developed elsewhere. While improved material is being tested the chance of a breakthrough to much higher yielding strains (as happened for paddy and wheat) is unlikely in the near future.

Climate and Soil

5. Both climate and soils are ideal for jute production in the Ganges - Brahmaputra delta of the Indian subcontinent. About 90% of the world jute ANNEX 1 Page 2 supply is grown there despite many attempts to grow jute elsewhere. 1/ The crop will thrive on a range of soils from friable clay to sandy loam. Soil type is mainly determined by its suitability for forming a fine seedbed needed for the small seed of the crop.

6. In most years, climatic conditions in Bangladesh are ideal for jute production. Temperatures range Erom 70 F to 95 F with high humidities (about 90%) in the latter stages of the crop. Jute needs about 35-40 inches of rain. As usually happens in Bangladesh, early rains should be light because both jute varieties are sensitive to waterlogging when small. Rain showers should be interspersed with hot dry periods to allow weeding. The bulk of rainfall should fall when the crop is more mature. Heavy rains and consequent flooding provide widely distributed water needed for retting. Because of its climate and fertile alluvial soil, Banglidesh has a comparative advantage over other jute producing countries with respect to yield and fiber quality.

Cultivation

7. Sowing Capsularis takes place with early showers from mid March to early April. Olitorius needs longer daylight hours and if sown too early branches and flowers prematurely. It is thus sown from mid April to mid May. Traditionally, seed is broadcast sown and only farm yard manure is applied before sowing. Research has shown yield increase from use of fertilizers and from line sowing. The latter practice also reduces the seed rate, weeding costs and facilitates plant protection. Fertilizer use has been limited because of shortages except for participants of the Intensive Jute Cultivation Scheme (IJCS) (Annex 2) and adoption of line sowing is constrained by lack of satisfactory drills and the need to complete sowing in a very short period while soil moisture is at the right stage.

8. Two to three timely weedings are a prerequisite for good yields. Because aus paddy requires weeding at the same time there is considerable competition for hired labor during this season. Line sowing allows use of a wheeled hand push hoe which almost halves weeding costs. Jute is subject to a number of pests and diseases but only farmers participating under IJCS take protective measures such as seed dressing and spraying against leaf eating pests and mites.

9. Jute is ready for harvesting when seed capsules start forming and for Capsularis this takes place during July and for Olitorius during August and September. There is a trade off between yield and fiber quality, early harvest producing low yields of high quality fiber and vice versa. The need for sowing a paddy crop after jute may, to some extent, determine the harvesting date.

1/ In recent years large scale jute production is believed to be taking place in China. ANNEX 1 Page 3

10. Harvesting and subsequent retting are labor intensive operations which need to be performed over a short period and which coincide with the main paddy transplanting season of the year. Consequently, as with weeding, much of the harvest and post harvest operations are done by hired labor. Retting is critical to fiber quality and availability of clean retting water determines fiber quality in any locality.

Improved Technology

11. Recommendations developed by the Bangladesh Jute Research Institute (BJRI) more than a decade ago can double jute fiber yields, from 3 to 6 bales per acre. These recommendations form the basis for IJCS (Annex 2) and comprise the following items:

(a) Improved seed and use of recommended varieties;

(b) Seed dressing to prevent plant diseases;

(c) Line sowing;

(d) Correct fertilizer use 1/;

(e) Correct sowing times;

(f) Plant protection - (mainly against semi looper, hairy caterpillars and jute mites); and

(g) Correct harvesting dates.

.12. Research (Annex 3) has not been able to announce any further notable advances in the last few years. Some subjects which deserve early attention are adjustment of fertilizer dose according to soil type, improved pest control, particularly to control recent increase in mite, population and the more elusive target of variety improvement.

13. Jute is sown at the same time as the aus paddy crop and is to some extent interchangeable with it (para 15). Except where land is too deeply flooded, Capsularis is followed by transplanted aman, the main paddy crop of Bangladesh. Since jute harvesting is more flexible than paddy, Capsularis has some advantage over the competing aus crop with respect to ensuring timely transplanted aman crop. Olitorius harvest on the other hand is usually too late to be followed by a paddy crop and it is succeeded by pulses, oilseeds and wheat. When paddy prices are high, Olitorius grown on high lands is more likely to be replaced by paddy and consequently the project would give highest priority to Capsularis areas.

1/ Present recommendations for the all country is: Urea - 45 seers, triple super phosphate - 11 seers and muriate of potash - 16 seers. However, an applied research program is proposed (Annex 3, Appendix 3) to test the validity of this recommendation and, if necessary, to modify it. ANNEX I Page 4

Production Areas

14. Jute areas are grouped into three regions: the Jat (east of the Jamuna River and north of Noakhali district), Northern (mostly north of the Ganges and west of the Jamuna) and District (mostly south of the Ganges and west of the Meghna) (See map IBRD 12761). The heaviest jute producing districts are Mymensingh (Jat), Rangpur (Northern) and Faridpur (District). Because of better soil and plentiful retting water, jute in the Jat area gives higher yields and has higher quaLity than from the other areas. The project would concentrateon expanding imaprovedjute cultivation in the Jat areas and in Rangpur and Faridpur districts in the other areas which together contain about three fourths of the total jute acreage. Because of a higher proportion of seasonallyflooded and water logged land, about 80% of the jute in the Jat and Northern areas is Capsularis5,whereas it comprises only 40% of the total in the District with a higher proportion of well drained soils (Table 1). In parts of the Northern and District areas retting water is scarce and this factor depresses fiber quality. In addition, the Northern area lacks storage and baling facilities and is remote from the jute manufacturingand fiber exporting centers, so that jute farmers there have greater difficultieswith Jute marketing than in other areas. The pilot marketing component of the project would therefore pay particular attention to this area.

15. The total area sown to jute varies from year to year. For instance, in 1972/73 the area was reported to be as high as 2.2 million acres jute and as low as 1.3 million acres in 1975/76. However, part of the jute area is sown to jute every year. Of this, about 0.5 million acres is "Char" land (low land near river banks) where there is little alternative to jute production. About 0.5-0.8 million acres jute are sown every year as part of the crop rotation practiced by farmers who report that jute improves yields of subsequence rice crops. Additional jute acreage would compete directly with aus paddy for use of cultivated land. This competition is highly responsive to relative profitabilityof aus rice or jute cultivation. The project area, particularlythe districts in which IJCS would be expanded includes most areas on which jute is grown every year. ANNEX1 Table 1 BANGLADESH

JUTE PROJECT Area Sown to Jute by District and Areas 1970/71 and 1972/73 to 1975/76 (in thousand acres) 1970/71 1972/73 1973/74 1974/75 1975/76 Capsularis Olitorius Total Total Total Total Total

JAT AREA Dacca 149 42 191 184 165 124 94 Mymensingh 378 64 442 489 318 312 317 Tangail 100 21 121 132 111 101 74 Comilla 118 20 138 155 128 81 72

Area Total 745 147 892 960 785 618 557 NORTHERNAREA

Bogra 34 23 57 45 51 16 33 Rangpur 336 38 374 379 346 249 273 Dinajpur 103 6 109 77 93 73 66 Rajshahi 26 43 69 73 77 43 41

Area Total 499 110 609 547 567 381 413 DISTRICT AREA

Noakhali 29 1 30 21 17 12 11 Sylhet 28 0.3 28.3 21 16 15 13 Chittagong 0.6 0.2 0.8 1 1 1 1 Bakerganj 20 10 30 33 30 19 9 Khulna 14 28 42 33 35 28 15 Jessore 20 146 166 147 159 106 68 Faridpur 93 144 237 239 217 155 113 Pabna 56 32 88 93 67 36 46 Patuakhali 1 1 2 1 1 1 1 Kushtia 3 72 75 91 83 44 31

Area Total 205 433 698 680 626 417 308

GRANDTOTAL 1509 691 2200 2214 1978 1416 1278

March 25, 1977 ANNEX 2 Page 1

BANGLADESH

JUTE PROJECT

Intensive Jute CultivationScheme

A. INTRODUCTION

1. Based on recommendationsfrom the Jute Research Institute for improving yields, the then Pakistan Jute Association,now the BangladeshJute Association (BJA) (an Association of jute traders and exporters)in 1967 launched an intensivejute cultivation pilot scheme. The Association with some financial assistancefrom the Government continued the scheme for five years, expanding slowly from 65 acres in 1967 to 1,067 acres in 1970 and to 7,600 acres in 1971. The scheme provided extension and inputs and succeeded in doubling jute yields from 15 mds/acre to 30 mds/acre. However, it was very expensive -- BJA in 1971 estimated the cost of the scheme at Tk 10,000 per 100 acre unit and in 1972 GOB took over the scheme.

2. GOB's objectives remained the same, but its plan was to expand the scheme rapidly, for instance to cover 250,000 acres in the first year. For this purpose a special section was established in the Ministry of Agriculture. Extension agents were selected among farmers who were paid a special stipend. One agent was provided per 100 acre jute. They were supervisedby Jute Exten- sion Officers who looked after one to two thanas. These officers were responsible to an Assistant Director of Agriculture (Jute) at district level who reported to the Officer on Special Duty (Jute) in the Ministry of Agriculture in Dacca. These first attempts at large scale expansion of the Intensive Jute Cultivation Scheme (IJCS) were not successful. On the whole, staff training was inadequateand the organizationof inputs and credit supplies to farmers did not function effectively. The use of "model farmers" as extension agents was not satisfactory. However, the feasibilityof the scheme to increase yields and to reduce production costs had been proved and encouragedGOB to persist in its efforts to extend improved jute cultivation on a large scale.

B. INTENSIVE JUTE CULTIVATION SCHEME

Objectives

4. IJCS started to work effectively from the 1973/74season. The objectiveswere to double yields, reduce productioncosts and to improve fiber marketing. The main strategies used were: ANNEX 2 Page 2

(a) To concentrateon about 1.7 million acres land judged to be ideal jute land for the production of 8 million bales jute;

(b) To organise an adequate and timely supply of credit, implements and inputs to farmers;

(c) To provide effective extension; and

(d) To organize jute marketing through Government controlled corporations.

Organization

5. The Directorateof Agriculture (Jute) (DAJ) was established to implement IJCS. It was headed by an Additional Director of Agriculture reporting directly to the Secretaryof Agriculture. At the field level IJCS was organized into zones of about 30,000 acres jute, units of 2,000 acres jute and blocks of 200 acres jute. Each zone was headed by an Assistant Director of Agriculture (ADA), each unit by a Jute Extension Officer (JEO) equal in rank to a SubidivisionAgricultural Officer of the general extension service, and each block was serviced by a Jute Extension Assistant (JEA). Each block had about 200-300 jute growers, thus a unit would deal with 2,000-3,000 farmers and a zone with 30,000-45,000. Zones, units and blocks in many cases did not coincide with district, subdivisionor thana boundaries, and several zones extended across district boundaries.

Jute Farmers Associations

6. Early in its operations DAJ realized the need for farmer grouping to allow effectiveprovision of extension, credit and inputs. Authorized by the Ministry of Agriculture in 1974, DAJ started to establish Jute Farmers Associations(JFA). Membership is voluntary but IJCS deals exclusivelywith JFA members. Each Association coincideswith a jute block and on average has 200-300members. JFA have no legal status which would enable them to borrow or to trade.

7. The objectives of JFA are:

(a) To plan the jute production of members;

(b) To provide the basis for effective extension, inputs and credit services and to use group action to encourage prompt credit repayment;

(c) To foster cooperation in jute production;.

(d) To undertake jute marketing; ANNEX 2 Page 3

(e) To develop local leadership; and

(f) To uplift social and economic conditions generally.

8. Only one member of a jute growing family may belong to an Associa- tion. Each Association has an executive committee of a president, vice president and five members elected by members. To date there are no membership fees. JFA have unit, zonal and a national committees which coincide with DAJ's organization pattern. The unit committee consists of one member of each block, the zonal committee of one member of each unit in its jurisdiction and the National Committee consists of one member of each zone. These committees are discussion groups where jute ifarmers from different areas can exchange their experiences, and serve as a link between farmers and the Ministry of Agriculture at all levels.

Extension

9. The extension service of IJCS have proved the most effective of such services in Bangladesh to date. Ihe elements believed to have led to its success are:

(a) High density of extension workers and close supervision;

(b) Definition of area to be covered by each worker;

(c) Definition of task to be performed by each worker;

(d) Constant training;

(e) Direct contact with farmers;

(f) Effective linkage of credit and inputs supplies with extension; 1/ and

(g) Participation of farmers in planning and executing the production program through JFA.

10. At the beginning of 1976, field staff included 9 ADAs, 230 JEOs and 1,500 JEAs. ADAs were all transferred and mostly promoted from the general extension service. JEOs on the other hand were largely newly recruited agricultural graduates. JEAs are practically all newly recruited. Their qualification is a pass in the Higher School Certificate (12 years schooling) though a few School Certificate holders (10 years schooling) may also have been appointed. JEAs had no preservice agricultural qualifications and since joining IJCS have had constant in service training. This is twofold - longer courses - such as two to three weeks induction training and annually two to three weeks pre service training and in addition one day training regularly every two weeks on the subject to be taught to farmers in the succeeding two weeks.

1/ See Annex 4. ANNEX 2 Page 4

11. The extension system adopted is on the lines of the "Training and Visit" system which is proving successful in several IDA assisted projects in other countries. JEAs live at the block. Farmers of the block are divided into eight groups and the JEAs visits each group on the same day once every two weeks and spends the whole day with the group, teaching the farmers as a group and then visiting them individually. All farmers are members of the block's JFA and one of the conditions of membership is to attend every biweekly training meeting held by the JEA. Each group has a contact farmer but unlike other T and V systems he is not expected to undertake extension functions,but is mainly responsiblefor his group's attendance at training days and to help the JEA prepare jute cultivationplans and to work out inputs and credit requirements. One day in every two weeks, all JEAs in a unit are given training by the JEO (para. 61). On the remaining three working days out of twelve in each two week period the JEA pays additional farm visits and maintains block records.

12. The JEO is considered the key person to the success of IJCS. His duties apart from administeringthe Unit and ensuring the timely and regular supply of credit, inputs and implements,are to back up the JEA by frequent and regular visits to blocks. He deals with about 2,000-3,000farmers and is expected to become personally acquainted with most of them. It is largely due to the ability and enthusiasm of JEO, that despite lack of preservice training, JEA have performed well. The Bangladesh Ministry of Agriculture also considers that frequent personal contact of JEOs with farmers is a prerequisite to the success of IJCS and that the staffing rate of I JEO per 2,000-3,000farmers should not be decreased. Zonal officers,because of lack of transport have performed mainly administrativefunctions. As a consequence of the success of IJCS (paragraph23) morale of its staff is high and it enjoys jute farmers' confidence. This is in marked contrast to the situation at the start of the scheme when few farmers had had contact with agricultural extension staff and farmers in general lacked confidence in such staff. Implements 13. Three implements not normally owned by farmers are important for improving jute yields. These are seed drills for line sowing, hand hoes (a wheeled hoe pushed manually) for speeding up and reducing cost of weeding and pesticide sprayers for plant protection. Hand hoes are used in conjunction with seed drills. DAJ estimates that one drill is needed for 25 acres jute and I hoe to 20 acres. About 7,000 drills and 4,600 hoes have been purchased to date. Both drills and hoes have been distributed to blocks. They are DAJ property and are provided free of charge to farmers. 14. Until July 1976 pesticide sprayers were lent to farmers free of charge by the Plant Protection Directorate of the Ministry of Agriculture (the Plant Protection Directorate has now been merged with the Directorate of Agriculture (Extensionand Management) also of the Ministry of Agriculture - see para. 18). DAJ staff were responsible to ensure that enough sprayers were lent to JFA. Now the Ministry has stopped lending sprayers and expects farmers to buy them, at about half price. A few jute farmers have done so. The Directorate of Agriculture (Extension and Management) has a stock of 120,000 hand sprayers in good condition which are available for sale to farmers at district or thana centers. ANNEX 2 Page 5

Credit and Inputs

15. IJCS credit and fertilizer supply systems have worked well and are describedin Annex 4 and the main text. Seed and pesticidesupplies have not been so satisfactoryand are described below.

Seeds

16. Seed productionis the responsibilityof the Directorateof Seed of the Bangladesh Jute Research Institute (BJRI). The entire production is reserved for IJCS. So far, seed productionhas not met the demands of IJCS but a project financed by the Asian DevelopmentBank is strengthening and expandingjute seed production. When complete, in two to three years time, seed productionshould be more than adequate. While not yet able to meet its target of supplyingnew seed to every acre of jute at least once every three years, each participatingblock has had some improved seed annuallyand farmers have grown their own seed from the improved stock. All jute in the block is thereforegrown from improved seed. Seed quality used to be very variable but as a result of monitoringby IJCS the Seed Directorate has been able to improve quality which is now satisfactory.

17. The Seeds Directorategrows, tests and packs the seed and dispatches it to district or thana level according to DAJ instructions. JEAS sell it to farmers, taking JFA advice into account. The Seed Directorateestimates cost of seed at Tk 300 per maund for Capsularisand Tk 400 per maund for Olitoriusagainst which growers pay Tk 120 per maund. Since the value of this seed is now fully recognizedby all jute farmers, there is some leakage onto a black market. This is not serious however and should be overcome when seed productionexpands. Until 1976 DAJ was reasonablysatisfied with the seeds supply but in that season deliveries fell seriouslyshort of orders. Since improved seed is a key componentof the IJCS package, the Ministry of Agricul- ture now feels that seed productionshould come under its own control. The implementationof the Asian DevelopmtentBank seeds project complicatesthis issue and the transfer proposal which was made after project appraisal,needs further careful consideration. The 1976 supply shortfallmay have been due more to unfavorableharvesting weathLer than to organizationalfailings and such shortfallsare likely to continue until processingequipment, to be supplied by the Asian DevelopmentBank Project has been installed.

Pesticides

18. Pesticidedistribution and extension in plant protection is the responsibilityof the Plant ProtectionDirectorate (PPD). GOB has now amalgamatedPPD with the Directorateof Agriculture(Extension and Man- agement) - DEM (however the actual merger of staff is reportedlynot complete yet) DEM, which is in charge of general extensionservice throughout the country, is also being reorganizedto better utilize the Training and Visit system. 1/ UNDP is providing assistanceto PPD to improve the training

1/ This reorganizationwill be supported in the North-Westof the country by the IDA Extensionand Research Project. ANNEX 2 Page 6 of its staff. Finally, GOB is considering handling over to the private sector the pesticide trade. When this happens, PPD staff (and, after amalgamation is complete, DEM) staff will have more time to devote to extension in plant protection. Following these changes, plant protection services will presumably improve. In the meantime, it is proposed that IJCS extension services guide farmers in what material to purchase and how to use them.

19. At appraisal, the Plant Protection Directorate had more than one year's supply of pesticides in stock including all materials used for jute. Prices paid by farmers are about half of the cost of materials.

Targets and Achievements

20. The original target called for coverage of 0.3 million acres jute by IJCS in 1973/74 to expand to 0.9 million acres by 1975/76 and 1.7 million acres by 1977/78. However, the scheme was only approved by the National Economic Council in mid 1976. Prior to that date funding had to be found from savings in GOB's annual budgets and was not adequate for expanding beyond 0.3 million acres. At times funds, for instance for the credit component of the scheme, were authorized too late to allow full utilization. Nevertheless the scheme gave staff experience, established operating procedures for providing extension, credit and inputs. Some key indicators of progress achieved are shown in Table 1.

21. In view of the importance of the jute crop GOB paid special attention to IJCS and arranged annual high level evaluation by a committee which included representatives of the Planning Commission, Ministry of Agriculture, Ministry of Jute, Parliament and the Jute Research Institute. The resultant reports pointed out marLy procedural shortcomings, principally late allocation of funds, lack of transport for DAJ staff and problems with seed drills. Based on its own small crop cutting program and DAJ's crop cutting records the committee found that IJCS farmers had increased jute yields. The committee also found that JFA were playinrg a key role in the scheme and recommended that they should be given the legal status to borrow and trade. However there had been no progress in improving jute marketing. The government corporations had not been able to purchase JFA fiber directly and farmers had had to sell to middlemen as in the past. The 1976 evaluation committee recommended provision of fiber storage and marketing credit for JFA.

22. To supplement GOB's evaluation DAJ in April/May 1976, with technical support from the World Bank Resident mission in Dacca conducted an evaluation survey. The sample consisted of 266 IJCS farmers and of 249 non IJCS farmers, spread over five major jute growing districts. Table 2 shows classification of surveyed farmers by land holding size and Table 3 summarizes the main data collected during the survey.

23. Over 90% of farmers in the sample owned 3 acres land or less and about one third of these rented about I acre of land to supplement their own land. The IJCS sample shows rather less very small farmers (owning ANNEX 2 Page 7 less than 1 acre land) than the non IJCS sample. The survey shows the high percentage of IJCS farmers who adopted improved practices including line sowing, fertilizerand pesticide use resulting in a 50% yield increase, from 2.9 bales per acre to 4.4 bales per acre. Farm budgets calculated on the basis of survey data (Annex 10, Tables 1 and 2) show the following production costs and returns

non IJcs IJcs ------Tk --- ___

productioncost per bale 310 250 net return per acre /a 330 765

/a Taking fiber price at Tk 75/md.

24. These survey results confirm that IJCS methods have been successful and provide a sound argument for supportingand expanding the scheme. Loca- tion of existing IJCS areas and of expansion areas are shown on Table 4.

Shortcomingsof IJCS

25. A list of shortcomingsof IJCS to date includes lack of: transport for staff; housing particularlyfor JEA; subject matter specialists for staff training and for conducting field trials; a field plot demonstrationprogram; and materials and equipment for extension and demonstrationwork. Another handicap in implementingthe scheme has been the amount of time field staff have had to spend on administrativeduties connectedwith supply of implements, inputs and credit. The use of administrativestaff for this purpose tried in a few locations during the 1975/76 season improved extension work considerably. The project would help to eliminate these shortcomings. BANGLADESH

JUTE PROJECT

IJCS Activities 1973/74-1975/76

----1973/74 1974/75 ------1975/76------Target Achievement Target Achievement Target Achievement

Area under IJCS (acres) 300,000 270,000 300,000 280,000 300,000 290,000

Improved Seeds Distribution (MDS) 16,000 12,400 7,000 6,800 10,300 10,300

Fertilizer Distribution (NDS) 300,000 235,000 300,000 254,000 300,000 298,000

Credit Operation (Tk '000) 1/ 2/ a. Taccavi 3,832- 822- - I/ - 2/ - 1/ 3/ b. Sonali Bank 1- 2/ 3,764- 3,555- 4,672- 3 c. B.K.B. 3,305- 1,832- 3,000/- 2,4392/ 3,7621 -

Seed Drills Supplied - Number - 2,772 - 4,000 -

Hand Hoes Supplied - Number - 2,545 - 2,100 - -

Line Sowing (acres) 150,000 29,000 150,000 38,000 150,000 56,000 3/ Yield (Bales/acre) - 4.4 - 4.8 _

1/ Amount lent to farmers. 2/ Loan repaytientmade by farmers. 3/ Results not known yet. zt

April 14, 1977 BANGLADESH

JUTE PROJECT

IJCS Survey Classification of Farmers

Size of Numbers of Farmers Percentage of Numbers of Surveyed Percentage of Farmers Average Amount Hold-ing Surveyed Sample Farmers Renting Land in Each Size Group Land Rented (aeres) Non-IJCS IJCS Non-IJCS IJCS Non-IJCS IJCS Renting Land Non-IJCS IJCS Non-IJCS IJCS

Up to 1.00 88 50 35 19 48 27 54 54 0.89 1.10

1.01 - 2.00 112 125 45 47 27 43 24 34 o.86 1.16

2.01 - 3.00 33 66 13 25 4 6 12 9 1.24 0.96

3.01 - 4.oo 4 7 2 3 2 29 - 1.14

4.01 - 10.00 11 15 4 5 3 3 27 20 1.17 1.57

More than 10.00 1 3 1 1 - - - _ - - Acres

TOTAL 24) 266 100 100 82 81 33 30 0.91 1.14

April 14, 1977

HtlI BANGLADESH JUTE PROJECT

Summary Results of IJCS Survey

Mymensingh Tangail Dacca Comilla Rangpur Total/Average Non Non Non Non Non Non IJCS IJCS IJCS IJCS IJCS IJCS IJCS IJCS IJCS IJCS IJCS IJCS

1) Farmers Surveyed No. 64 67 48 50 45 56 46 45 46 48 249 266 2) Percentage of Holding under Jute 27 29 28 34 31 37 20 27 27 27 27 31 3) Farmers Growing Jute on Same Land for Two Years a) No. 22 21 13 10 12 16 13 10 9 13 69 70 b) Percentage of Sample 34 31 27 20 27 29 28 22 20 27 28 26 4) Seed and Sowing: a) Farmers Sowing in Lines No. - 54 - 46 - 51 - 39 - 37 - 227 b) Percentage of Sample - 84 - 92 - 91 - 87 - 77 - 85 c) Amount of Seed Used - Seers 5.3 3.7 6.8 4.1 5.7 4.2 4.0 3.5 4.6 3.9 5.2 3.9 d) Farmers Using Improved Seed No. 4 55 2 44 2 49 6 39 1 41 15 228 e) Percentage of Sample 6 82 4 88 4 88 13 87 2 85 6 86 5) Fertilizer Use a) Farmers Using Urea No. 22 31 18 50 26 55 32 44 8 4, 106 227 b) Percentage of Sample 34 46 38 100 58 98 70 98 17 98 43 85 c) Amouat Used - Seers 18 28 24 37 42 34 28 35 16 27 26 33 d) Farmers Using TSP No. 3 57 4 50 20 55 22 43 1 47 50 252 e) Percentage of Sample 5 85 8 100 4 98 48 96 2 98 20 95 f) Amount Used - Seers 9 7 9 9 31 16 30 15 10 8 27 11 g) Farmers Using MP No. 3 55 3 50 15 54 19 43 1 47 41 249 h) Percentage of Sample 5 82 6 100 33 94 41 96 2 98 16 94 i) Amount Used - Seers 16 12 6 13 14 13 19 14 12 11 16 13 6)' Pest Control a) Farmers Reporting Damage No. 20 30 30 26 26 34 23 24 18 21 117 135 b) Percentage of Sample 31 45 63 52 58 61 50 53 39 44 47 51 c) Farmers Using Pesti- cides No. 4 21 12 25 14 27 9 20 3 14 42 107 d) Farmers Using Pesti- cides as Percentage of those Reporting Damage 20 70 40 96 54 79 39 83 17 67 36 79 MXx 7) Labor Use Mandays/Acre 98 107 128 119 131 136 143 98 137 113 127 115 8) Yields Maunds/Acre 14.5 21.5 14.0 20.5 14.0 23.5 15.5 23.0 14.0 20.5 14.5 22.0 April 14, 1977 ANNEX 2 Table 4

BANGLADESH JUTE PROJECT

Intensive Jute Cultivation Scheme Location of Existing Scheme and of New Schemes

Existing New District Schemes Schemes Total …------…Acres----

Mymensingh 84,000 166,000 250,000 Tangail 32,000 18,000 50,000 Dacca 1/ 54,000 46,000 100,000 Comilla-1/ 46,000 36,000 82,000 Noakhali - 6,000 8,000 14,000 Sylhet l/ ,2,000 2,000 4,000 Dinajpur 2/ 18,000 6,000 24,000 Rangpur 2/ 76,000 100,000 176,000 Bogra 2/ 14,000 6,000 20,000 Rajshahi 3/ 22,000 12,000 34,000 Pabna 3/ 32,000 14,000 46,000 Faridpur 4/ 50,000 46,000 96,000 Barisal 4/ 4,000 - 4,000 Jessore 5/ 38,000 26,000 64,000 Kushtia 5/ 18,000 8,000 26,000 Khulna 5/ 4,000 6,000 10,000

Total 500,000 500,000 1,000,000

1/ Noakhali and Sylhet administeredfrom Comilla. 2/ Dinajpur and Bogra administeredjointly with Rangpur. 3/ Rajshahi and Pabna jointly administered. 4/ Barisal administeredfrom Faridpur. 5/ Kushtia and Khulna administeredfrom Jessore.

November 3, 1977 ANNEX 3 Page 1

BANGLADESH

JUTE PROJECT

Jute Research

A. Background

1. Responsibilityfor jute production research rests with the Directorate of Jute in the Ministry of Jute. The organizationof the research Department of this Directorateis given in Table 1. The Bangladesh Jute Research Institute (BJRI) is located in Dacca and has only a few acres of land nearby on which to do experimentalwork. The Institutealso has six substationsat Chandina, Faridpur,Jessore, Kishoreganj,Rangpur and Tarabo and 24 smaller demonstrationsites referred to as subventioncenters. The work of the substationshas recently been extended to cover some trials in farmers' fields.

2. At the Institute'sheadquarters in Dacca there are about 40 professional grade staff in seven divisions;agronomy, botany, entomology,microbiology, plant pathology,soil science and statisticswhile at each substation there is at least one researchofficer with supportingstaff. The substantial laboratorybuildings in Dacca are not fully used and research activity is at a very low level.

3. It has already been recognizedby the GOB that the importanceof the crop to the national economy merits vigorous research and seed production programs and that the present Jute Research Instituteneeds major support and redevelopmentto enable it adequately to service the industry. To this end GOB has negotiatedan agreementwith the Asian DevelopmentBank for a loan of about US$8.5 million under the name of the BangladeshJute Seed Project. This project has a large research component,details of which are summarized in Appendix 1.

4. In addition to the ADB loan, major technicalassistance support will be provided by a UNDP-supportedproject 1/ at a total cost of US$2.0 million of which about 50 percent will be from external sources. The main componentsof this project are 118 m/m of internationalconsulting services and 180 m/m of fellowshipstogether with a small amount of equipment (US$45,000)mainly transport. The terms of referenceof the consultantsto be provided quoted from the Project Document,are given in Appendix 2.

1/ Jute Seed, Research and ProductionProject: UNDP/FAO project BGD/74/018/A/01/45. ANNEX 3 Page 2

5. At the Jute Research Institutelevel, the funds and resources available for developmentof facilitiesand research activities are ample having regard to the present low level of research activity and, as a consequence,the limited capacity of the Institute usefully to absorb the assistance which is available. There if; scope, however, for a broader view to be taken of jute production research than that presentedin both the ADB and UNDP documents, notwithstanding the comment 1/ about jute as one crop in a rotation made in the ADB document.

6. Since there will be a delay of many years before new research findings emerge in a form in which they can be applied in the field, there is a need to adapt present knowledge to fit more closely the different situations under which the two main varieties of jute are grown. While this program should be generatedby the Jute Research Institute it could only be carried out by the SMSs at zonal level assisted by the JEO and JEA, all of which staff are locatedwithin the Directorateof Agriculture (Jute) within the Ministry of Agriculture. This could form the essential active link between jute research and jute extensionwhich so far appears to have been lacking. It would reinforcethe link which is to be developedby the training of SMS at the Jute Research Institute.

7. Since the UNDP-supportedproject has a Senior Research Planner as the project leader and adequate funds are available at BJRI level (para 5), any provisions to be made in the IDA financed project should be designed to provide additional resources to the GOB to allow a modest program to be carried out at zonal or block level in farmers' fields. The Extension component provides for a complement of 40 SMSs at zonal level (two per zone) so that useful information could be obtained if each of these could supervise the carrying out of a few trials in their respective zones. These trials should not be confused with the demonstrationsof the increases in yield that can be obtained using known practicesas done in the Intensive Jute Cultiva- tion Scheme in which average yields were increasedfrom 2.9 to 4.4 bales per acre. The main difference between the two activitieswould be that, whereas the IJCS package seeks to improvejute crops per se, the more experimental approach proposed as an additional program would place more emphasis on examiningthe place of jute in the cropping patterns possible in each of the main jute growing areas. This topic seems likely to increase in importance as the main objective of the project (higheryields per acre but a reduced acreage nationally,thus releasing land for other purposes) is achieved.

1/ BangladeshJute Seed Project (ADB document) para 55. ANNEX 3 Page 3

Project Research Support

8. The research component would be confined to support for a simple applied research program 1/ and for the costs of training the staff who would be involved in it. Since the incrementalcosts of all the staff are included in the extension component, the extra costs involved under the research heading would be essentiallythose connected directly with the carrying out of the field trials, and provision for this cost has been made on the basis of one trial or demonstrationper block at a cost of Tk 150 each - for inputs and labor.

Organizationand Management

9. The senior SMS at headquarterswould be responsiblefor assisting the project Director in technicalmatters. Within these duties they would have the responsibilityof identifyingfield problems and passing these to BJRI for investigationand, equally, they would take the results of research done at BJRI and, in cooperationwith BJRI, work out a program for testing these findings in farmers' fields. This program would be supervised by the zonal SMS with the JEO and JEA closely involved in doing the trials. Until such time as new research results are forthcoming,a work program would be devised to test some of the possibilitiesgiven in Appendix 3. Hopefully this would be done in cooperationwith BJRI and would engage the attention of the Senior Research Planner (under the UNDP project) as an area deserving perhaps more attention than is proposed in the ADB and UNDP project documents.

1/ A few topics which could form the start of such a program are given in Appendix 3. ANNEX 3 Table 1

BANGLADESH

JUTE PROJECT

Organization Chart of Bangladesh Jute Research Institute

Ministry of Jute, Directorate of Jute

Director (Seed) Director (Research) Director (Fiber technology)

Central Jute Research Station Regional sub-stations (6)-/ at Agronomy Chandina-/ Botany Faridpur Divisions' Entomology Jessore Microbiology Kishoreganj Plant Pathology Rangpur Soil Science Tabado Statistics

Subvention centers (24) (attached to some degree to the stations)

1/ The officers-in-chargeof these stations report directly to the Director (Research).

2/ Trials in farmers' fields have been started recently and are under the control of the officer-in-chargeof the appropriate sub-station.

April 14, 1977 ANNEX 3 Appendix I Page 1

BANGLADESH

JUTE PROJECT

Summary of Provisions for StrengtheningJute Research under the ADB Loan

Jute Research

1. GOB and the ADB mission consider that it is essential to strengthen all aspects of jute research .... '. The general objective of the research program will be to develop a higher yield, good quality jute variety with pest and disease resistanceand a short growing season. The latter character being of particularimportance as it will facilitatemultiple croppingwith jute as one crop in the rotation.

1. AgriculturalResearch Facilities

2. The facilitiesof the AgriculturalResearch Division (ARD) of the Jute Research Institutelocated at Dacca will be strengthenedby _ equipment for laboratories,books and transport. Greenhouseswould be added to existing facilities for use in plant breeding, entomologyand pathologyresearch programs. Air conditionedseed stores would be added to facilitate the maintenance of seed stocks.

3. The Central Research Station will be located at Manikganj (4o miles from Dacca) and will be used to support the ARD of BJRI in Dacca. The new station will be designed by the expatriatefarm planner under the guidance of a consultant on farm development;necessary buildings 1/ and equipmentwill be provided.

2. Jute Research Sub-stations

4. The research facilitiesunder paras 56 and 57 will be supportedby four regional research substationsat Chandina,Kishoreganj, Faridpur and Nasipur (new-tobe used also as a training center).

5. Farm planning and development.. under the guidance of expatriate consultantsas for the Central Research Station.

6. Field preparationat the substationswould not be mechanizedbut would be carried out by bullock drawn equipment. Necessarybuildings would be provided and each substationwould have up to six subventioncenters through which the final testing of recommendationsbefore general release to farmerswould be done.

1/ Housing for research staff NOT included. ANNEX 3 Appendix I Page 2

3. Breeder Seed Farms

7. Productionof 1.3 tons per annum of breeders'seedwould be the responsibilityof the ARD and farms would be equipped to allow this seed to be produced.

4. Consultantsfor AgriculturalResearch

8. The GOB and the ADB mission agree .... a large input of consultant services (detailsof these services, to be provided through a UNDP project, are given in Appendix 2).

9. the Project will provide a pilot rettery to facilitate studies on fibre quality.

5. Research Fellowships

10. Provisionis made for fellowshipsin agronomy,plant breeding and genetics,entomology, pathology, microbiology, soil science, and seed technology to a total of 180 man-months.

A complete breadown of Project Costs between agriculturalresearch and seed farm developmentwas not available at appraisal. There is no reason to suppose however, that adequate provision has not been made for the devel- opments outlined above to be carried through successfullysince the total project costs excludingtechnical consultantsamount to US$10.8 m. of which $6.8 m. are for farm developmentand buildings and $2.15 are for equipment and transport. ANNEX 3 Appendix 2 Page 1

BANGLADESH

JUTE PROJECT

Terms of Reference of Consultants to be Provided under UNDP-Assisted Project BGD/74/018/A/01/15

Personnel Costs. A total of 118 man/months of international consulting services will be provided.

Senior Agricultural Research Planner. He will be located at Dacca for a period of six months, commencing 1 October 1976. He will examine the past performance of the Agricultural Research Division of the Jute Research Institute, evaluate existing research programs and research departments, make recommendations on the reorganization of jute research in Bangladesh, provide the overall framework for short- and long-term research programs and identify the fields in which fellowships should be awarded. He will coordinate the work of the consulting team.

Plant Pathologist. He will be located in Dacca for a period of twenty-four months, commencing 1 January 1977. He will assist in implementing the proposals made by the Senior Research Planner and, in addition, will assist in setting up a research division in plant physiology and he will pay particular attention towards assisting in the full utilization of green-house facilities.

Plant Breeder. He will be located in Dacca for a period of thirty- six months, commencing 1 January 1977. He will be primarily concerned with assisting in the introduction and building up of a comprehensive collection of jute germ plasm and the evaluation of the introduced and currently available varieties. He will also assist in making selections, initiating breeding programs and coordinating varietal improvement work being carried out by other research organizations in Bangladesh. He will coordinate the work of the consulting team after the departure of the Senior Agricultural Research Planner.

Design Engineer. He will be located in Dacca for a period of 24 months, commencing 1 January 1977. He will examine equipment presently utilized for sowing and weeding of jute crops, identify shortcomings and ascertain the reaction of farmers. He will develop one or more designs of suitable equipment for sowing and row-weeding of jute on the different soil types found in the predominantly jute growing areas in Bangladesh, taking into account both animal drawn and hand-operated designs.

Seed Technologist. He will be located in Dacca for periods of three months, commencing in October in each of three years, commencing 1978. He will assist in the jute research institute in all matters relating to ANNEX 3 Appendix 2 Page 2 the technicalaspects of the seed productionprogram. This will include the evaluationof seed production techniques,procedures adopted for seed treatmentand storage and the identificationof studies in seed physiology required in order to promote the viability of seeds retained in buffer stocks.

Experts in Entomology,Plant Pathology and AgriculturalEconomics. These consultantswill be recruited as and when required with provision for a total of 18 man-monthsof service. The experts in entomology and plant pathologywill work closely in the evaluationof research work being carried out at the laboratory,green-house and field level in the agricultural research division. They will assist in developing research techniquesand help draw up specific research programs. The expert in agricultural economicswill assist in setting up a section of agriculturaleconomics in the Jute Research Instituteand he will advise on the nature and scope of the long-termresearch programmerelated to Jute with an assessment of the staff requirementsfor such a progravm.

Farm DevelopmentSpecialist. He will be located at various sites in Bangladesh over a period of 36 months, commencing in October 1977. He will help prepare a blueprint for the developmentof those farms which will be modernized during the course of the Project.

Farm ManagementExpert. Ilewill be located at various sites over a period of 27 months, commencing in October 1979. Once the farm development program is completed,the consultant in farm managementwill assist local counterpartsin running the farms, naking farm management decisions,drawing up work plans, assigning the work fcrce and machinery, preparing a recording system of consummablestores. He will also assist in drawing up crop cultivation sheets and train local counterpartstaff in modern farm management techniques.

Training Fellowships. One of the responsibilitiesof the agricultural research planner will be to determinethe fields of study in which fellowshipsshould be awarded to local scientistsbased upon the actual needs of the BJRI. The longer term consultantto plant physiologywill assist the Governmentcooperating agency in drawing up detailed proposals for such fellowshipsregarding duration,selection of the appropraitein- stitutionsand the procedures and arrangementsfor funding. The detailed proposalswill be subsequentlysubmitted by the Governmentauthorities to the ExecutingAgency and the UNDP for approval. It is provisionallyesti- mated that short-term fellowshipsfor the training of local staff in the general fields of agronomy,plant breeding and genetics,entomology, pathology, microbiology,soil science and seed technology,making a total of 15 man- years of fellowships,will be requir,d. ANNEX 3 Appendix 3 Page 1

BANGLADESH

JUTE PROJECT

Some Topics for Consideration within an Applied Research Programme

The main difference between the points made herein and the package approach of the IJCS is one of concept rather than technical content. In these proposals (and questions) the place of jute as a cash crop in a rotation of crops is given prominence, while for the crop itself a greater flexi- bility of approach to increasing output and improving quality is indicated.

A. Present Practices

1. It is almost impossible to believe that one standard rate of fertilizer application can be optimal under the range of soils and moisture conditions under which the two main varieties of jute are grown. Simple trials with a large number (200) of dispersed replicates on farmers' fields could identify differences in responses and possibly lead to economies in fertilizer use.

2. Have all the possibilities of plant density and spatial distribution of the crop been explored from the production economics angle rather than from the purely yield angle? Several factors are involved in this of which seeding rate, weeding costs, ease of access for pest control may be important.

3. What is the effect on subsequent crops of using seed grown outside of the normal growing season?

4. What is the precise range of possible sowing dates for the two varieties to ensure an economic yield i.e. how early/late can the crops be sown and equally what is the optimum economic balance between early harvest (high quality/low yield) and harvest at full maturity (lower quality/higher yield).

5. Why is C. olitorius grown in some low lying areas e.g. Faridpur (where C. capsularis might be expected to be more suitable) and vice versa e.g. Rangpur area? ANNEX 3 Appendix 3 Page 2

B. Jute in the Rotation

1. Early maturing varieties are being sought to try to avoid damage from flooding late in the season; these varieties might also allow a T. Aman crop to follow in non-flood prone areas. What is the earliest possible harvest date compatiblewith a reasonabLereturn and having regard to the added return from the iollowingpaddy crop?

2. Is it possible to obtain a reasonableyield of jute from late sowing after a short clurationirrigated boro paddy? If so, how do the returns c:omparewith early Jute followed by T.aman or wheat or a pulse crop?

3. Where climatic and soil conditionspermit of multiple cropping does the rate of fertilizer applicationto jute need to be amended to take account of residues from fertilizers applied to other crops in the rotation? ANNEX 4 Page 1

BANGLADESH

JUTE PROJECT

Credit for Production and Marketing

A. Background

1. In October 1973 an IDA mission visited Bangladesh to examine the agricultural credit system. The mission identified the problems as mainly institutional and recommended an overhaul of the principal rural credit institutions, the Bangladesh Cooperative Bank (Bangladesh Jatiya Samabaya Bank, BJSB) and the Bangladesh Agricultural Bank (Bangladesh Krishi Bank, BKB). A follow-up mission in September 1974 concurred with these findings and singled out the problem of delinquent debts as the central issue. This mission suggested that, as an interim strategy, commercial banks should be utilized as alternative agricultural credit channels. Since then, commercial banks have played an increasingly important part in providing agricultural credit and IDA has agreed to support a subproject to review and help rehabilitate the agricultural credit system under second the Technical Assistance Credit (Cr. 622-BD).

2. BKB and a commercial, the Sonali Bank (SB), have both participated in the IJCS credit operation as channels for GOB funds. GOB allocated Tk 9 M to each bank for this purpose in 1976. As the funds were received late, disbursement last season amounted to only about 50%. IJCS has reported recoveries of 90% in 1976 for jute loans. Since BKB continues to have a serious problem of overdues for its normal, non-jute lending - 37.9% as at June 30, 1975 - GOB has decided that SB should serve as the sole credit institution for this project.

B. Sonali Bank

Structure Organization and Management

3. Sonali Bank is a successor in Bangladesh of the National Bank of Pakistan and is one of the leading commercial banks, all of which have been nationalized. The Chairman and Managing Director of the six-member Board is K.A. Rashid, originally from the staff of the State Bank of India and later Deputy Governor of the Bangladesh Bank. Two General Managers, eight Deputy General Managers and twelve Assistant General Managers each heading one of the twelve functional departments, make up the rest of the head office administration. ANNEX 4 Page 2

Regions/Districts

4. The country is divided by SB into ten administrativeregions. Each regional office is headed by an Assistant General Manager assisted by a staff of about 30 on an annual budget of about Takas 0.3 M. The regional office takes responsibility for general policy implementation, liaising with Ministries/Government departments, overall administration, supervision, inspectionand financial control of two to three District Branches and of 25 to 50 subdivisionaland Thana level branches per District. District Branches are responsible for actual operationscarried out directly by them as well as by the subdivisionalbranches and by the Thana/Villagelevel branches. District Branches are well staffed (with about 70 persons) on an annual budget, each, of about Takas 0.5 M with subdivisionaloffices and Thana/Villagelevel offices directly attached to them and carrying staff of about 40 and 10 respectively(Table 4).

Staff Training

5. SB has established a staff training institute,headed by a senior Deputy General Manager. Experienced, well qualified staff are selected and given courses of teacher training. Twenty-one training camps have already been establishedin the Districts -- in Regional/Districtbranch premises. Hostel accommodation is provided in some camps. Trainees are posted to District branches and required to report to appropriatelylocated camps. Clerical staff undergo seven weeks of intensive training. 395 trainees participatedin the course which w£ts conducted in 17 centers from November 26, 1976. A further batch of 400 had been scheduled for the session in the 21 centers from February 2, 1977. In between these sessions the institute provides training for experiencedexecutive and clerical staff, and advanced course of training in foreign exchange,as well as periodicaltraining, and reorientationsessions for trainers. These trainers are regularlybrought back to Dacca for these special sessions. Meanwhile, the Bangladesh Insti- tute of Bank Management, Dacca, an independentinstitute jointly financed by commercialbanks, has been reorganizedand strengthened. SB has used these improved facilities too and has had 75 members of its staff trained in the Institute every year since 1975.

Branch Expansion Program

6. The opening of commercial bank branches has to be authorizedby BangladeshBank, which gives every year each commercialbank a quota of licenses. SB's network of 438 branches covers all except 61 Thanas within the 0.5 M acres within IJCS (See Table 5). Most of these 61 would be accom- modated within the 54 licenses given to SB for opening branches this year and the remainder would have to be speciallyauthorized by BangladeshBank. Recruitmentand training staff for these new branches would be within SB's capacity. ANNEX 4 Page 3

Performance

7. SB has made good progress increasing total income annually, by 87% in 1973, 46% in 1974 and 59% in 1975, as against holding down increase in expenditure to 56% in 1973, 42% in 1974 and 32% in 1975 (Table 1). The proportion of total expenditure to total income has therefore been declining annually from 96% in 1972 to 66% in 1975.

8. Deposits have grown in 1975 by 50% resulting in advances to deposits falling from 75% in 1974 to 64% in 1975. The growth of advances - in a poten- tially delinquent situation - is under effective control and amounted to 51% in 1973, 30% in 1974, and 28% in 1975.

9. SB continues to be the leading commercial bank in providing agricultural credit. It has been steadily increasing its commitment from Takas 36.6 M in 1974 through Takas 114.7 M in 1975 to Takas 216.1 M in 1976 (at an 88% increase in 1976 against 213% in 1975). Recoveries of production loans from 1973 have been over 85% except for Boro under Thana Irrigation Program in 1975 - 66%, and T. Aman-Aus in 1976 - 50% (this last is reported to be delayed but not in default, with recoveries still coming in)(see Table 6).

C. Present System of Credit Under Intensive Jute Cultivation Scheme (IJCS)

10. The procedure for granting production credit to jute farmers under the existing Intensive Jute Cultivation Scheme is as follows. The Jute Extension Assistant (JEA) and the Secretary of the Jute Farmers' Association (JFA) draw up lists of farmers' fertilizer requirements. The Jute Extension Officer (JEO) checks these lists, calculates the total requirements and con- veys it to the Bangladesh Agricultural Development Corporation (BADC). BADC moves the fertilizer to the nearest authorized dealer. The dealer, assisted by JEA and JFA secretary issues fertilizer to farmers against completion of loan bonds. He collects these bonds and forwards them to the District Office of BADC which in turn passes them on to the District Office of SB. SB, which maintains an IJCS account for the district, makes payments from this account direct to the dealer. The Ministry of Finance funds this account, at the beginning of the season, on the basis of estimates made by DAJ of the credit necessary for the total fertilizer requirements. When jute farmers repay the loans, the repayments are credited to this account. Any shortfall arising in the account is borne by GOB. Thus, the role of the banks in IJCS is only to act as agents for GOB.

D. Proposed Comprehensive Credit Scheme

11. Under the project credit, operations would be expanded in line with the proposed physical expansion of IJCS. Operational changes would include: ANNEX 4 Page 4

(a) Making use of the Thana Central CooperativeAssociation/ Village CooperativeSociety - Krishi Samabaya Samity (TCCA/KSS)mandatory for jute growers in:

(i) the seven Thanas covered by the IDA-supported Rural DevelopmentProject - Kotwali, Sherpur, Gabtali, Sariakandi (all in Bogra district) and Muktagacha,Trisal, Gaffargaon (all in Mymensingh district);and

(ii) the four Thanas covered by the ADB-supported SerajganjRural DeveLopmentProject - Raiganj, Kazipur, Serajgonj,llllapara (all in Pabna district).

The purpose of this would be to conform with the concepts of the two Rural DevelopmentProjects under which all agricultural credit is to be issue throughIRDP/TCCA.

(b) The introductionof marketing credit on a pilot scale.

ProductionCredit

12. The followingproduction credit would be provided under the project:

Kind Component. Fertilizer,costing about Tk 100 per acre.

Cash Component. About Tk 150 per acre. Jute production has high labor requirements,particularly for weeding to ensure good yields, and for speedy harvesting to facilitate timely transplantingof the aman paddy crop.

13. Procedures. JEA assisted by ISO and JFA Secretarywould list farmers' kind and cash requirements. They would calculate farmers' total requirements,as at present, and pass on the informationas appropriate; individualloan bonds would be prepared as at present, but they would be expanded to accommodatethe cash component. In all other respects present procedureswould be followed (para 10).

14. After the completion of fertilizerdelivery, JEA assisted by ISO and JFA Secretarywould carry out a 10% sample survey of borrowers' jute plots to verify fertilizer applicationand progress of cultivation. The JEA would be required to maintain a log book which would containhis observationsand the comments of other DAJ staff, as well as of SB staff; the latter would transfer the comments to the loan bonds for subsequentreference, if necessary. Adverse comments would be acted upon, even to the extent of terminating credit after joint consultationbetween DAJ and SB. ANNEX 4 Page 5

15. DAJ (in the person of the ADA for the district) in consultation with SB, would decide on the timing for the payment of the first installment of cash - for weeding. SB staff would prepare and packet the individual cash requirements and make payment direct to jute farmers at premises selected by DAJ. Payments would be made on a well advertised day and time. Farmers would sign a receipt incorporated in the loan bond and the receipt would be confirmed by JEA, ISO and JFA Secretary all of whom would assist in the operation. After the first payment, and well before the final installment is paid out, JEA assisted by ISO and JFA Secretary would carry out a further 10% sample survey, the sample to exclude holdings which were the subject of the previous sample. Again the JEA would enter his comments into his log book and convey his comments to SB as necessary. The second and final installment of the cash component would be paid in an identical operation, just prior to harvesting, followed by a further and final 10% "fresh" sample survey.

16. Farmers would continue to be allowed to repay their loans through the nearest branch of any commercial bank. Loan bonds, properly discharged, would be released to borrowers who settle their outstanding. Main collections supported by JEA, ISO and SB staff would start in October and should be completed before the end of December. SB staff would be available at suitable centers on well advertised days and times. Farmers who fail to repay their loans would be debarred from future credit and would be subject to legal action, and JFA, whose total membership recovery falls below 75% of demand, would be similarly debarred.

TCCA/KSS

17. Background. In 1970 the Government adopted a national rural development plan which provided for the phased establishment, throughout the country, of the TCCA/KSS type of cooperatives. These are based on a model developed at the Bangladesh Academy for Rural Development in Comilla and are administered by the Director-General of the Integrated Rural Development Program (IRDP), a department of the Ministry of Local Government Rural Devel- opment and Cooperatives. The Department of Cooperatives of the same Ministry is responsible for all other five cooperatives - the so-called traditional cooperatives. At present, there are TCCA/KSS in about 200 thanas, and the coverage is being expanded as new staff are trained. IRDP is administered by Regional and District Officers and at the Thana level by a Project Officer, a Deputy and an Accountant.

18. Organization. TCCA/KSS is organized on a two-tier system. TCCA is located at the main administrative center for the Thana along with the Thana offices of the principal Government Departments. TCCA are managed by elected Management Committees, of which the IRDP Project Officers are Secretaries. Other members of TCCA are the elected representatives of the lower tier, the KSS, the Village Primary Societies. KSS are also managed by elected Manage- ment Committees which include a Chairman and an Accountant. The Chairman and the Accountant are trained by the IRDP Project Officer. Capital formation and deposit mobilization are achieved by a simple share capital contribution from each member (Tk 10) and by compulsory thrift savings deposits which confirm credit eligibility on the borrower (Tk I for each Tk 10 borrowed). These savings provide a means of security for the loans. While TCCA/KSS operate in ANNEX 4 Page 6

200 Thanas, they are the only source of cooperative credit in the 11 Thanas subject to IDA and ADB-financedRural Development Projects. It is believed that eventuallythey will take over from the traditionalcooperatives throughout Bangladesh.

19. Credit for Jute Through TCCA/KSS. In accordancewith GOB's intention that in the "rural developmentThanas" TCCA/KSS should have a monopoly of agriculturalcredit, TCCA/KSS system would provide production and marketing credit for IJCS in the eleven Thanas. Directorate of Agri- culture (Jute) staff would provide the same services as in other project areas and would assist TCCA/KSSs in their Jute credit operations, including preparation of loan applicationsand checking of loan utilization. Some Jute farmers in these Thanas are already members of TCCA/KSS and thus would be automaticallyeligible for crezdit. Others who do not belong to TCCA/KSS and have no outstandingdebts to other cooperativesin the RD Thanas would also be eligible for credit provided they met admission and membership re- quirementsand joined TCCA/KSSs. A condition of membership of the TCCA/KSSs is that members of former cooperattiveorganizations have settled any overdue debts in full or have had them rescheduledunder fresh loan agreements with TCCA/KSS. TCCA/KSS have laid dovn standard reschedulingterms. New TCCA/KSS members would have to comply to this credit discipline.

20. If IJCS is to meet its targets in the rural development thanas, KSS would have to attract a high percentage of jute farmers, up to 90% in certain localities. For this reason, IRDP headquartershave agreed that for a two-year transition period temporarymodifications would be made in TCCA/KSS membership interim aid procedures:

(a) new jute farmer members to KSSs would not need to pay in their Tk 10 share to qualify for membership but would be permitted to borrow it as part of their production loan; and

(b) the loan ceiling of new KSS members would not be determined by his shareholdiagor the savings amount in his thrift account.

21. During the two-year traisitionperiod, individualloan appraisal would continue to be conducted by DAJ which would be assisted by TCCA/KSS and SB staff. Loan applicationslaeeting DAJ requirementswould be endorsed by the TCCA and sent to SB for payment. SB would channel credit to farmers directly through KSS with notificationto TCCA, which would be the primary borrower and which would enter the loan into its books against the accounts of its constituentKSS sub-borrowers. Since TCCA would not need to use its own village accountantsand inspectors for processingjute loans, its share of loan interest spread would be below that for its agriculturallending. ANNEX 4 Page 7

Marketing Credit

22. The project would include a pilot jute marketing component. TCCA/ KSSs would be selected to participateon the basis of general performance, satisfactoryloan recovery ratios and satisfactorymanagement capacity. Godowns equipped with baling facilitieswould be constructedby DAJ in the same area of these associationsand would be available for lease by the participatingTCCA/KSS. Farmer members of participatingassociations would be able to have their produce graded, baled and stored at these centers and receive immediatepayment equal to the government minimum farm gate price less production credit, against hypothecationof stock. The stock would be held in storage under the joint custody of SB and the TCCA/KSS or DAJ until sold to licensed dealers and jute mills. The timing of such sales would be determinedby SB on the basis of market informationand would be intended to achieve the best possible price for the grower. Sale proceeds would be released to DAJ and in time would be passed on to borrowers, less advances and storage and service charges. IRDP Cooperativesas well as DAJ lack experience in financing jute marketing. Therefore, this activity is regarded as a pilot venture and the credit category is restricted to about Tk 30 million. Terms and conditions of credit to jute farmers and source of credit are described in the main text. ANNEX 4 Table 1

BANGLADESH

JU_EPROJECT

Sonali Bank

Growt:h from 1972 (In million Takas)

December 31

1972 1973 Increase 1974 Increase 1975 Increase

Total Income 5.52 10.30 87 14.84 44 23.62 59

Total Expenditure 5.28 8.22 56 11.72 42 15.53 32

Total Expenditure/ Total Income (%) 96 80 80 66

Net Profit 0.24 2.08 - 3.12 50 8.09 159

Net Profit/Total Income (%) - 20 21 34

Capital 2.00 3.00 50 3.00 0 3.00 0

Reserves - 0.09 - 0.88 870 3.39 285

Deposits 173.13 210.26 21 223.92 6 332.93 49

A'vanosit,u d ing Bilii)E 85.37 128.98 51 167.70 30 215.05 28

Advances/Deposits (%) 49 61 75 64

Total Foreign Exchange Business 42.40 130.71 208 155.74 19 397.59 155

Total Pretax Profit 0.52 2.49 379 3.98 60 9.70 144

Total Number of Offices 274 306 12 359 17 400 11

Number of Employees 4,708 5,460 16 6,294 15 6,989 11

March 4, 1977 ANNEX4 Table 2

BANGLADESH

JUTE PROJECT

Sonali Bank

Condensed Balance Sheets as at December 31 (In million Takas)

9 Months 1972 1973 1974 1975

Assets

Cash on hand and with Bangladesh bank 158.70 188.97 187.04 348.42 Balances with other banks 2.61 7.53 4.51 66.64 Money at call 25.00 - 4.44 108.55 Investmentsat cost 466.91 394.11 505.39 636.24 Advances 853.72 1,289.75 1,676.97 2,150.54 Bills receivablebeing billed for collection 5.53 208.59 538.78 738.79 Constituents'liabilities for acceptances 506.15 484.69 1,358.84 2,615.95 Premises 19.79 19.14 18.77 18.21 Furniture 3.67 4.47 5.47 9.46 Other assets- 338.65 332.36 340.53 578.41 Profit and loss account (Dr.) 16.05

2,396.78 2,929.61 4,640.74 7,271.21

Capital and Liabilities

Capital 20.00 30.00 30.00 30.00 Reserves - 0.96 8.75 33.87 Deposits and other accounts 1,745.01 2,102.57 2,239.23 3,329.31 Borrowingsfrom other banking companies, agents 0.11 50.00 421.04 423.67 Bills for collection/receivable 5.55 208.59 538.77 738.79 Other liabilities 119.98 52.79 44.00 99.60 Acceptances,endowments, etc. 506.14 484.69 1,358.85 2,615.95 Profit and loss after providing taxes, reserves - 0.04 0.10 0.02

2,396.78 2,929.64 4,640.74 7,271.21

a/ Includes balances held with banks in Pakistan.

March 4, 1977 ANNEX 4 Table 3

BANGLADESH

JUTE PROJECT

Sonali Bank

Condensed Statements of Net Income for Years Indicated (In million Takas)

9 Months 1972 1973 1974 1975

Income

Interest and discount 46.96 84.99 123.11 181.39 Commission, exchange and brokerage 8.29 18.04 25.23 54.41 Net profit on sales of investments, etc. - - - 0.40 Other receipts - 0.00 0.08 0.03

55.25 103.03 148.42 236.23

% of % of % of % of Income Income Income Income

Expenditures

Interest paid on borrowers' deposit 27.29 49.4 41.74 40.5 57.07 38.4 84.87 35.9 Salaries, allowances, providence funds 19.68 35.6 30.08 29.1 45.39 30.5 49.62 21.0 Directors' fees and allowances - - - 0.02 ) Rent, taxes, insurance, ) lighting and telephone 1.97 ) 3.52 ) 5.62 ) 7.52 ) Law charges 0.02 ) 0.19 ) 0.20 ) 0.34 ) Postage and telegraph stamps 0.45 ) 0.52 ) 1.05 ) 1.97 ) Auditors' fees 0.02 ) 0.02 ) 0.02 ) 0.02 ) Depreciation on and repairs ) 10.6 )10 ) 10.1 1011. to bank properties 0.90 ) 1.06 ) 1.44 ) 1.89 ) Stationery, printing and ) ) ) ) advertisement 1.09 ) 1.58 ) 1.76 ) 3.10 ) Other expenditure 1.42 ) 3.54 ) 4.69 ) 5.95 ) Net profit prior to taxation carried to balance sheet 2.40 20.79 31.18 80.93

55.24 103.03- 148.42 236.23

July 15, 1977 ANNEX 4 Table 4

BANGLADESH

JUTE PROJECT.

Sonali Bank

Staffing Pattern of Regional Offices, District Branches, Subdivisional Branches and Thana/Village Branches

Name of Post Number of Staff Monthly Salaries, Approximate (In Taka) Regional Office - Dacca-l

Assistant General Manager 1 3,500 Chief Accountant 1 2,500 Accountant 2 3,400 Assistant Accountant 4 4,000 Supervising Official 5 4,000 Head Cashier (Reserved) 2 1,600 Godown Inspector 1 800 Clerks 5 3,000 Typist 2 1,200 Messenger 4 1,200 Guard 2 800 Car Driver 1 500

Total 30 26,500 ($0.3 M)

District Branch - Comilla

Manager 1 2,500 Accountant 3 5,100 Assietant Accountant 6 6,000 Supervising Official 3 2,100 Head Cashier 3 2,400 Clerks 15 9,000 Typist 2 1,000 Assistant Cashier 21 10,500 Messenger 10 3,000 Guard 3 1,200 Car Driver I 500

Total 68 43,300 ($0.5 M)

SubdivisionalBranch - Chandpur

Manager 1 1,700 Accountant 1 1,500 Assistant Accountant 2 2,000 Supervising Official 3 2,100 Head Cashier 1 800 Clerks 10 5,000 Typist 2 1,000 Assistant Cashier 10 5,000 Messenger 4 1,200 Guard 3 1,200 Godown Keeper 1 400 Godown Chowkider 2 600

Total 40 22,500 ($0.25 M)

Thana/Village Branch - Debidwar

Manager 1 1,200 Head Cashier 1 800 Clerks 2 1,000 Assistant Cashier 1 500 Messenger 1 300 Bank Guard 3 1,200

Total 9 5,000 ($0.06 M)

March 2, 1977 ANNEX 4 Table 5 Page 1

BANGLADESH

JUTE PROJECT

Sonali Bank

Existing Branch Network Vi-A-Vis 0.5 M Acres Under Intensive Jute Cultivation Scheme

Area Under The Number Name of Zone Ninmeof Thana/Unit Project (In Acres) of Units

Dacca (27 Units)

Dacca Nowabganj 2,000 1 Kapasia 2,000 1 Kaligaj 4,000 2 Dohara7 2,000 1 Savar 2,000 1 Dhamrai 4,000 2 MurLshigan1/ 4,000 2 Lauhajang- 2,000 1 Serajdikhan 2,000 1 Tongibari 2,000 1 Manikganj 2,000 1 Singair 2,000 1 Narayanganj 2,000 1 BaidyerBazar 2,000 1 Narsingdi 2,000 1 Raipuraa/ 4,000 2 Shibpuraa 2,000 1 monoharda 2,000 1 Saturia-f 2,000 1 Rupganj 2,000 1 Kaliakoir 2,000 1 Shi'balaya 2,000 1 Keraniganj(Zinzira) 2,000 1

Total 54,000 27

Mymensinghand Kishoreganj'31 Units)

Mymensingh Kotwali 4,000 2 Muktagacha 4,000 2 Fulbaria 2,000 1 Trishal 4,000 2 Gaff'argaon 4,000 2 Bhalukaa/ 2,000 1 Phulpur-a/ 4,000 2 Halu.aghat- 2,000 1 Iswarganj 4,000 2 Grouripur 2,000 1 Nandail 4,000 2 Kendua 2,000 1 Netrokona 2,000 1 Purbadhala-/ 2,000 1 Kishoregani Kishoregan 4,000 2 Karimgan- 4,000 2 Barhataa4! 2,000 1 Hossainpua/ 2,000 1 Pakundia/- 2,000 1 Katiadi-a 2,000 1 Bajetpur 2,000 1 Kuliarchar 2,000 1

Total 62,000 31

March 2, 1977 ANNEX 4 Table 5 Page 2

Area Under The Number Name of Zone Name of ThanafUnit Project (In Acres) of Units

Tangail and Jamalpur (27 Units)

TTangail 6,000 3 Bhuapur-a 2,000 1 Mirzapur 4,000 2 Ghatai2a/ 4,000 2 Kalihatia/ 4,000 2 Gopalpura, 4,000 2 Nagorpura 2,000 1 Basail.! 2,000 1 Modhupur 4,000 2 Jamalpur Jamalpur 4,000 2 SarishabaFi 2,000 1 MelandhaaP 4,000 2 Sherpur 2,000 1 Sreebardi 2,000 1 Dewanganj 2,000 1 Islampur!/ 4,000 2 Nandina 2,000 1

Total 54,000 27

Faridpur and Barisal (27 Units)

Faridpur Kotwali 4,000 2 Bhanga 4,000 2 Boalmari 4,000 2 Rajbari 2,000 1 Pangsha 4,000 2 Nagar-kanda 4,000 2 Baliakandaa-/ 4,000 2 MuksedpurA/ 4,000 2 Gopalgani 2,000 1 Rajoir Y 4,000 2 Kalkini- 2,000 1 Madaripur a/4,000 2 Shibohar-Jaqnjiraa 2,000 1 Palang a/ 2,000 1 Sadarpur- 2,000 1 Naria/ 2,000 1 Barisal Gournadi 2,000 1 Wazirpur 2,000 1

Total 54,000 27

Rangpur and Dinajpur (27 Units)

Rangpur Kotwali 4,000 2 Kauniaa/ a 2,000 1 Gangachara- 2,000 1 Badargang 4,000 2 Kaliganj./ 2,000 1 Nilphamari 4,000 2 Domar a/ 2,000 1 Jaldhaka- a/ 2,000 1 Kishoregani- 2,000 1 Kurigram 4,000 2 Ulipur 4,000 2 Lalmonirhat 4,000 2 Dinajpur Kotwali / 2,000 1 Chirirbandar- 2,000 1 Birgang 2,000 1 Debigani 2,000 1 Khansama 4,000 2 Thakurgaon 2,000 1 AtwarO/ 2,000 1 Boda 2,000 1 Total 54,000 27 ANNEX 4 Table 5 Page 3

Area Under The Number Name of Zone Name cf Thana/Unit Project (In Acres) of Units

Rangpur and Bogra (27 Units)

Rangpur Gaibandha 6,000 3 Palashbari 4,000 2 Gobindaganj 6,000 3 Saghataa/ 2,000 1 Sundarg nja 4,000 2 Sadulla,urA/ 4,000 2 FulcharLa/ 2,000 1 Pirganj 2,000 1 Pirgach-i 4,000 2 Mithapu

Rajshahi and Pabna (27 Units)

Rajshahi Paba ZI 2,000 1 Bagmara- 4,000 2 Natore 2,000 1 Mohadevrur 2,000 1 Naogaot 2,000 1 Mandae/ 2,000 1 Badalgachi 2,000 1 Nawabgania/ 2,000 1 Baraigram- 2,000 1 Bagtiparaa/ 2,000 1 Pabna Pabna Sadar 2,000 1 Chatmohqr 2,000 1 Sathia/ 2,000 1 Sujlanagar- 2,000 I Serajganj 4,000 2 Raiganja- a/ 4,000 2 Kamarkho rnd- 2,000 1 Shahjadpir 4,000 2 Kazipur / 4,000 2 Atghoria- 2,000 1 Ullapara 4,000 2 Total 54,000 27

Jessore, Kusthia and Khulna (30 llnits)

Jessore Kotwali 2,000 1 Jhikarga.ha 2,000 1 Monirampi.rA/ 4,000 2 Keshabpula/ 2,000 1 Bagerpar! 2,000 1 Kaligaij 2,000 1 Sarsaa/ 2,000 1 Jhenaidal 2,000 1 Sailkupaa/ 2,000 1 Narial 2,000 1 Lohaga a 4,000 2 Kalia_a 2,000 1 Magura a/ 4,000 2 Mohammadpair- 4,000 2 Salika 2,000 1 ANNEX 4 Table 5 Page 4

Area Under The Number Name of Zone Name of Thana/Unit Project (In Acres) of Units

Jessore, Kusthia and Khulna (30 Units) (Cont'd.)

Kushtia Kotwali 2,000 1 Kumarkhali 2,000 1 Daulatpura 2,000 1 Chuadangra 2,000 1 Damurhuda- 2,000 1 Jiban-nagar 2,000 1 Almdanga 2,000 1 Maherpur 2,000 1 Gangni 2,000 1 Khulna Satkhira 2,000 1 Kalaroa 2,000 1 Total 60,000 30

Comilla, Noakhali and Sylhet (27 Units)

Comilla Chandina 2,000 1 Debidawar 2,000 1 Muradnagar 2,000 1 Daudkaydi 4,000 2 Homna- a2,000 1 Burichang-/ 4,000 2 Barura 2,000 1 Chandpur 2,000 1 Faridganj 2,000 1 Motlab 2,000 1 Laksham 2,000 1 Hajigan} 2,000 1 Kachua- 2,000 1 Brahmanbaria 6,000 3 Sarial 2,000 1 Nabinapr 4,000 2 Kashba- 2,000 1 Bancharampur 2,000 1 Noakhali Laxmipur 2,000 1 Raipur 2,000 1 Ramganj 2,000 1 Sylhet Madhabpur 2,0001 Total 54,000 27

Grand Total 500,000 250

a/ 61 Thanas are not covered directly by existing Sonali Bank branch network.

March 2, 1977 ANNEX 4 BANGLADESH Table 6 JUTE PROJECT

SB's Production Loans Through TCCA in 162 Thanas (As on Decemaber30, 1976)

Credit Head Year Amount of Credit Recovery Position (in million Takas) (In percent)

T. Aman 1973 5,880 100

TIP Boro 1973 12,460 99

B. Aman - Aus 1974 2,990 100

T. Aman 1974 12,235 98

Potato 1974 400 100

TIP Boro 1974 21,000 95

B. Aman - Aus 1975 3,114 94

T. Aman 1975 16,955 100

Potato - Wheat 1975 1,753 88

TIP Boro 1975 30,720 66

B. Aman - Aus 1976 9,590 50

T. Aman 1976 25,390 Recovery time not due yet.

Potato 1976 3,515 "

Wheat 1976 3,000 "

TIP Boro 1976 34,275

March 2, 1977 ANNEX 5 Page 1

BANGLADESH

JUTE PROJECT

Internal Jute Marketing

I. PRESENT SYSTEM

Introduction

1. Internal jute marketing is complex, since small lots of jute from large numbers of growers have to be assembledinto large batches for export and use by local mills. While the present system performs this task, it is handicappedby monopolisticpractices and ineffectivegovernment policies. Marketing costs are high and farmers often do not receive fair prices. The project would exploreways of improving the marketing system, in particular to channelmore of the profits of the marketing process to farmers to increase production incentives.

Institutions

2. The government purchasing corporations,private sector (middlemen) and jute mills are involved in internal marketing;the former two are those principallyconcerned.

Government Corporations

3. After Liberation (1971),Government assumed control of virtually all aspects of the jute trade - internalmarketing and exports. The aim was to channel profits to the economy and to the farmers. This led to the creation of four government purchasingcorporations and one corporation responsiblefor managing exports of raw jute. All these corporationswere controlledby the Ministry of Jute. The main objectiveof the purchasing corporationswas to procure raw jute directly from farmers, thereby avoiding the cost of middlemen and providinghigher prices to farmers,while reducing export prices and raw material cost to mills. Each corporationwas headed by a Managing Director,had its own technicalstaff (purchaser,supervisor, accountant,etc.) and had designated areas of the country under its jurisdiction,with purchasingcenters and its own godowns and baling facilities. There was no competitionbetween the corporationsin procuring raw jute. Consequentlythe set-up merely increasedoverhead costs.

4. In early 1976 the four corporationswere merged into two; the existing corporationsare the Jute Trading Corporationand the Jute Marketing Corporation. In spite of this reorganization,these corporationshave remained ineffective. Reasons are that the corporationsare run along non- commercial lines by civil servants. Profit and loss is not their major ANNEX 5 Page 2 concern. Their financial structure is weak, working capital is restricted and hence the corporationsare unable to procure jute early in the season when jute prices are low. In addition,the corporationsare unable to purchase directly from farmers, since they have neither the staff nor the facilities to collect small amounts of jute from individual,scattered farmers. Thus they continue to rely for procurementon middlemen,who collect from farmersat the village level. Supervisionof corporations, field staff and quality control is weak; their accounts are neither pub- lished, nor audited.

5. Although conceptuallygovernment purchasing corporationsare essential to enforce the Government'sminimum raw jute price and to provide competitionto the private sector, their present organization,financial structure and management is so ineffectivethat they are, at present, unable to achieve their objectives. It Ls anticipatedthat under UK bilateral assistancea consulting firm would be employed to review the present organization and assist the Government in restructuringthe corporationsto render them more effective.

6. Private Sector. In early 1976 the jute trade was liberalized. The private sector was permitted t:opurchase and export jute directly without channelingexports through the BangladeshJute Export Corporation,which had previouslybeen solely responsiblefor handling exports. However private traders are still required to register their exports with the BangladeshBank and export at prices fixed by the Government. This liberalizationdid infuse more vigor into the jute export trade in Bangladesh. However in the absence of any effectivecompetition, the private sector acquired a monopolistic position.In the current season (1976/77)since the private sector managed to acquire a substantialportion of the crop, they have been able to manipulate internal raw jute prices. There is a danger that if such an unhealthy trend continues,the Governmentmight revert to nationalizationof the trade, an alternativewhich proved ineffectivein the past. It is apparent that a system should be developedwhereby both the governmentcorporations and the private sector work side by side, providingcompetition to each other to ensure a fair market mechanism. Legislationalone will not achieve this. The governmentcorporations should be revitalizedto provide effective competitionto a healthy private sector.

7. Jute Mills. All mills are nationalizedand are the major internal consumer of raw jute. The government corporationsand the private sector provide the majority of the mills' raw jute requirements. Some of the larger mills have their own purchasing centers to purchase directly from the farmers to obtain price benefits. However due to the lack of working capitaland organizationalproblems, the mills generallyhave to resort to middlemen for their supplies. If a system could be developedwhereby farmers could collec- tively offer jute in sizeable quantities,this would be welcomed by the mills and the governmentcorporations and beneficial to both farmers and the pur- chasers, who would share in price benefits and reduce costs. ANNEX 5 Page 3

Marketing Channels

8. Jute is channeled through three marketing levels: village (primary), secondary and terminal. At the village markets, the sole outlet for the majority of farmers, only middlemen purchase the jute. No storage or baling facilities are available. After collecting their purchases of jute, middlemen forward it to the secondarymarket, without any processing or grading, where they sell it to either exporters, mills or to government corporations. The government corporationsgrade and bale the jute in katcha form. The private exportersgenerally ship the raw jute to the terminal market where it is graded and baled in pucca or katcha form. From terminal markets jute is either sold to the jute mills in katcha bales or is exported in pucca bales.

9. The village market is held once a week. Jute growers are small scale (average holding size is 0.5 ac.) and the average amount sold by each farmer is between 10-12 maunds. Their financial position is very weak; their bargaining and holding capacity is small, in the absence of any credit or storage facilities. Middlemen, recognizing these limitations,take advantage of the situation in determiningthe price, quality and measurement of jute.

10. The farmers market their jute shortly after harvest and virtually all jute is sold by the farmers between July and mid-December, the peak month being October. On the weekly village market day, farmers from within a radius of six miles, bring their jute to be sold. Since farmers rely on the sale of their jute for their purchases of basic necessities (salt, oil, etc.) and no storage facilities are available, farmers accept any price prevailing that day. On an average village market day 8-10 middlemen are present and between them determine the selling price for that day, irrespectiveof the Government minimum price (see para 12). The middlemen do not start purchasing until the later afternoon hours, their scales are defective and measurements are in English. Thus farmers, on average, lose about Tk 4-5/maund. In addition, the middlemen usually do not pay adequately for grade differences, thus causing farmers a further loss. Seasonal price rises, averaging Tk 6-7/ maund, are not reaped by many of the farmers particularlysmall farmers who have to sell early in season. Thus, at present, farmers often do not receive fair market prices and have little incentive to improve the quality of their jute. The present system unnecessarilyincreases the cost of raw materials to domestic mills, as well as to exporters. Between the village and secondary markets, the jute remains ungraded and unbaled. The physical movement of voluminous quantitiesof jute overburdens the limited transportationfacili- ties and increases the cost. In addition,middlemen frequentlyadulterate jute by adding water and sand to increase the weight, with adverse effects on quality. While the jute is being forwarded to secondarvmarkets it remains in the open air or in poor storage facilities,resulting in additional losses of about 6%. All these increases in cost could be reduced or saved, with an effectivemarketing system. ANNEX 5 Page 4

11. Estimated total marketing cost between farmer and the export port is as follows:

Marketing Cost Tk/Maund

Village Market At Present /a With the Project

Collection& Handling Cost 3.52 Middlemen's Profit 1.88 Middlemen Grade DifferentialProfit 2.00 Middlemen'sHolding Profit 4.10

Sub-Total 11.50

SecondaryMarket

Katcha Baling 16.00 Katcha Balers' Profit 4.00 26.50 /b

Sub-Total 20.00

Terminal Market

Pucca Balers' Cost 13.00 10.00 Pucca Balers' Profit 4.50 4.00

Sub-Total 17.50 14.00

Export Handling Charges 4.00 3.00 Quality Control, Insurance,etc. 0.50 0.50

Grand Total 53.50 44.00

Export Price 160.00 160.00

Market Cost as % Export Price 33% 28%

/a Based on Annex 5. Tb See para 18.

It can readily be seen that market costs constitutea very high percentage of total export cost and efforts at cutting market costs would be an important contributionto increasingjute's competitivenessin internationalmarkets. Based on past experience,it is noltfeasible for governmentcorporations to purchase directly from farmers, thus effectively ensuring fair market or minimum governmentprices to farmers. Thus to reduce the farmers' present ANNEX 5 Page 5

complete dependence on middlemen for sale of their production, and to let them share marketing profits, the project would, on a trial basis provide 50 groups of farmers with credit, storage and baling facilities (Section II).

Pricing Policy

12. The Government sets a minimum raw jute purchase price to ensure a fair return to growers. Export prices are also determined by the Government. Minimum raw jute price is, in principle, announced before commencement of the growing season. However, only in 1976, in fact, was the minimum price actually announced before sowing commenced. Since the Government is unable to ensure the effective implementation of the minimum price, its practical value to the farmers is very limited. Moreover, prices are determined on an ad hoc basis. Although there is a Price Advisory Committee, chaired by the Secretary, Jute Division of the Ministry of Jute, no systematic analysis of demand and supply or production and marketing costs are taken into consideration. Sim- ilarly, export prices reflect neither the international nor domestic demand/ supply pattern. A permanent centralized Price Commission or body should also be created to review jute agricultural pricing problems on a regular basis, and their decisions need to be based on demand supply balance, production cost and marketing cost, etc., scientifically gathered. The jute/paddy price relationship should also be carefully analyzed and taken into consideration. The export pricing policy should also be formulated on a 3-5 year basis, so that potential importers are reassured and persuaded to retain their jute production lines, rather than switch to synthetics. In the absence of an effective pricing policy, the benefit of an effective marketing system will not be fully reaped. The GOB has recognized this limitation and is reviewing this issue. An IDA Foodgrain Price Policy Review Mission visited Bangladesh in March 1977. Its prelimnary recommendations for establishing an effective foodgrain and jute price mechanism are described in the main text.

II. PROPOSED PILOT MARKETING SCHEME

Loose Jute Storage at Village Level

13. Two models were evaluated for the trial marketing scheme. The first was based on constructing a godown at the block with capacity to store 2,000 maunds loose jute. The capacity was estimated by assuming that only part of the block jute production would flow through the godown while a substantial amount would continue to be marketed by traditional channels. Coercion of jute farmers to market jute through the scheme was ruled out. Total production per block is estimated at 10,000 maunds per year and it was assumed that about 40% of it would be marketed through the scheme.

14. The store could either be operated by the Directorate of Agricul- ture (Jute) (DAJ) which would charge fees to recover operating expenses including amortization of the cost of the godown or, in IRDP areas, could be ANNEX 5 Page 6

rented from DAJ and operated by KSSs. Farmers would deliver jute and receive the Government minimum farmgate price for jute delivered. However, estimates (Table 1) show that costs of this svstem would not be less than Tk 12.50 per maund which compares with Tk 11.50 per maund present marketing costs. The high cost of marketing under the sclhemeis due to large storage capacity needed for loose jute fiber and consequenthigh capital cost of the godown.

15. Loose jute storage at vilJage level would hold advantages for farmers who would have a store practicallyat the farmgate and, since it would involve not too large a group of farmers (400-500) the system would be simple to manage. However, apart from high costs, advantages from reducing transportationcosts would be lost and it would be difficult to stack different fiber grades separatelyso that some benefits from grading jute may also be lost.

Storage and Katcha Baling at Unit Level

16. The other system examined proposes a 2,000 katcha bale (8,000 maunds) store at unit level (groupingof 5 blocks) and has been used for project cost estimatingpurposes. Such operation would achieve storage economies by baling and would aim to deliver jute to exporters or jute mills taking full advantage of markups at various stages of marketing. In non-IRDP areas DAJ would own and operate the stores and baling presses and would charge fees to recover costs. In IRDP areas, TCCA would organize marketing. They could either allow DAJ to operate the stores or lease them and undertake the operation themselves. Where DAJ operates the store it wouldlemploy store management and staff for purchasing, grading, stacking and selling the jute. The fiber would be graded, baled and stored to take advantage of seasonal price rises. It would then be sold to exporters (includinggovernment corporations) and mills.

17. Cost of the traditionalsyEtem for similar operationsis estimated at Tk 31.50 per maund (para. 11). EEtimates for the proposed system (Table 2) shows costs at Tk 24.25 per maund (at a throughoutputof 16,000 maunds per year) for DAJ operation. These costE include a Tk 5 per maund profit element for farmers judged to be adequate incentive for farmers to participate,and being the increase in net revenue received over Tk 85.50 per maund assumed as average payment by middlemen.

18. An income and cash flow estimate for a cooperative renting the shed and baling presses and operating them is shown in Table 3. Costs per maund is Tk 26.50 based on a buying price of Tk 85.50 paid by middlemen and the coop sales price of Tk 112. Higher costs than departmentalopera- tions have been assumed to give the cooperativesome surplus to build up reserves.

19. With this new scheme, initial farmers' participationis not assured. Consequently,the scheme should be as attractiveas possible in the early stages. It is, therefore,proposed thiatfees for sheds operated by DAJ should be based on ultimate projected throughput. In the case of the 2000 katcha bale model, this would be 16,000 maunds jute per year. Consequently, ANNEX 5 Page 7 in early years fee revenue may not fully cover costs. For instance, with an 8,000 maunds throughput and using Table 3 the subsidy would be Tk 2 per maund. If all 50 project stores were to operate at 8,000 maunds jute per year, total subsidy would be Tk 800,000 per year. Design of sheds, needs refining and organizationof operations,management and record keeping are yet to be devised. This would be the responsibilityof the jute marketing unit in DAJ headquarters. For each unit, a management committee would be established,comprising representativesof DAJ, the local branch(es) of Sonali Bank and the local JFAs. These committeeswould guide and supervise the management of these units by DAJ or TCCA. Sonali Bank which would provide marketing credit has much experience in jute marketing and would assist particularlywith grading and market intelligence. In addition, Ministry of Jute staff would help to train DAJ field staff in jute grading. Finally, the project monitoring system (Annex 7) would pay particular attention to this operation and would suggest modificationsas needed.

20. Because of its experimentalnature the size of the scheme would be small - a total of 50 sheds. The first ten of these would not be ready until the 1979 jute marketing season and designs for the next constructionbatch would have to be commissionedbefore the experience of the first marketing season can be evaluated. Consequentlythe second batch would also be confined to 10 sheds for 1980 construction,with the balance of 30 sheds to be constructed in 1981.

21. The outline of the trial marketing scheme given in the preceding paragraphs should serve as a guideline only and project management in consultationwith IDA should feel free to modify these proposals as may be found to be necessary. Closer field investigationsby the project marketing unit may even find loose jute marketing at village level worth trying. ANNEX 5 -Tablel

BANGLADESH

_'UTE PROJECT

Jute Marketing Costs Loose Jute Storage at Village Level Storage Capacity 2,000 Maunds

A. Jute Store Operating Costs

1. Annual Fixed Costs Tk - 1/ Amortization of Godowa 12,000 Building Insurance 4,500 Building Maintenance 1,000 Management Cost 6,000 Establishment Cost 3,500

Total 27,000

2. Variable Cost 2/ Marketing Expenses Tk 3.50 per maund

3. Cost Per Maund at Various Throughputs

Maunds Throughput Total Cost Tk Cost per Maund Tk

2,000 34,000 17.00 3,000 37,500 12.50 4,000 41,000 10.25

B. Farmer's Cost

Tk per Maund

Interest on Marketing Credit 2.35 Miscellaneous 0.15

Total 2.50

C. Total Cost per 1!ai.rd_at Various Throughputs

Storage and Farmer's Throughput Baling Cost Cost Total Cost Maunds ------Tk------

2,000 17.00 2.50 19.50 3,000 12.50 2.50 14.50 4,000 1C.25 2.50 12.75

1/ Based on capital cost of Tk 120,000 repaid over 15 years at 5.5% interest.

2/ Same as Faria's costs - Appendix 1, Table 1.

April 1, 1977 ANNEX 5 Table 2

BANGLADESH

JUTE PROJECT

Jute Marketing Costs Storing with Katcha Baling Storage Capacity 8.000 Maunds

A. Jute Store and Baling Press Operating Cost

1. Annual Fixed Costs a

Amortization of Godown and Bailing Press 24,0001' Building Insurance 10,000 Building Maintenance 2,000 Management Cost 24,000 Establishment Cost 16,000

Total 76,000

2. Variable Cost

Baling-/ - Tk 11 per maund

3. Cost per Maund at Various Throughputs

Maunds Throughput Total Cost Tk Cost per Maund Tk

8,000 164,000 20.50 12,000 208,000 17.33 16,000 252,000 15.75

B. Farmer's Cost

Tk per Maund

Transport / 1.00 Interest on Marketing Credit- 2.35 Miscellaneous 0.15 Profit- 5.00

8.50

C. Total Cost per Maund at Various Throughputs

Storage and Farmer's Throughput Bailing Cost Cost Total Cost Maunds ------

8,000 20.50 8.50 29.00 12,000 17.33 8.50 25.83 16,000 15.75 8.50 24.25

1/ Based on capital cost of Tk 240,000 repaid over 15 years at 5.5% interest.

2/ Appendix 1 para 5.

3/ Based on 13% interest over 3 months on Tk 72 per maund (80% advance on Tk 90 per maund, the projected minimum farmgate price).

4/ The amount over and above Tk 85.50 per maund assumed as middleman's payment to farmers.

March 24, 1977 BANGLADESH

JUTE PROJECT

Income and Cash Flow for Farmers Group Jute Marketing Activity (Tk'000)

Year l 2 3 4 5 6 7 8 9 10 11 12 13 14 15 INCOME

Sales 1/ 896 1,344 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 1,792 Interest payable by farmers for jute purchasing credit 2/ 18 28 37 37 37 37 37 37 37 37 37 37 37 37 37 Interest from surplus 3/ - - 1 2 3 5 6 9 12 15 18 21 25 28 32 (1) Total Income 914 1,372 1,830 1,831 1,832 1,834 1,835 1,838 1,841 1,844 1,847 1,850 1.854 1,857 1,861 EXPENDITURE

Management 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 Establishment 16 16 16 16 16 16 16 16 16 16 16 16 16 16 16 Rent 4/ 22 28 37 37 37 37 37 37 37 37 37 37 37 37 37 Baling 5/ RR 132 176 176 176 176 176 176 176 176 176 176 17b 176 176 Interest on credit for jute purchase 6/ 11 16 22 22 22 22 22 22 22 22 22 22 22 22 22 Credit for working capital 7/ 5 6 7 5 3 2 ------(2) Subtotal 166 222 282 280 278 277 275 275 275 275 275 275 275 275 275 (3) Payment to Farmers 8/ 736 1,116 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 1,504 Total Expenditure [(2)+(3)] 902 1,338 1,786 1,784 1,782 1,781 1,779 1,779 1,779 1,779 1,779 1,779 1.779 1.779 1.779 (4) Surplus [(1)-(3)] 12 34 44 47 50 53 56 59 62 65 68 71 75 78 82 Cumulative surplus 12 46 90 137 187 240 296 355 1X17 482 550 621 696 77T 856

1/ Sales income based on average price of Tk 112 per maund and 8,000 maunds throughput in year 1, 12,000 in year 2 and 16,000 from year 3 onwards. 2/ Interest rates payable by farmers for jute credit based on an 80% advance of the minimum price (assumed to be Tk 90 per maund) for 3 months at 13% interest. 3/ Interest on surplus revenue - 5% for 6 months each year up to Tk 220,000 being seasonal working capital requirements and 5% per annum for the balance. 4/ Rent based on: a. Repayment of construction cost of Tk 240,000 over 15 years at 5.5% interest with Tk 12,000 payable in year 1, Tk 18,000 in year 2 and Tk 25,000 from year 3 onwards. b. Building insurance Tk 10,000 a year. c. Repairs at Tk 2,000 a year from year 3 onwards. 5/ Baling cost - Tk 11 per maund (Appendix 1). 6/ Interest payable on jute purchasing credit based on 80% advance of Tk 90 per maund at 7.5% over 3 months. 7/ Credit for working capital based on half management, establishment and rent costs and full baling costs at 7.5% interest for 6 months. Cost > amount to: year 1 - Tk 120,000, year 2 - Tk 165,000, year 3 onwards - Tk 215,000. 8/ Payment to farmers based on the following price per maund: year 1 - Tk 92.00, year 2 - Tk 93.00, year 3 onwards - Tk 94.00.

July 15, 1977 ANNEX 6 Page 1

BANGLADESH

JUTE PROJECT

Organization

Project Agencies

1. Project agencies, their main activities and controllingministries are listed in Appendix I. Coordinationat national level would be by the project coordinationcommittee and at zonal level by zonal committees,as described in the main report paras 4.01 and 4.02. The organizationstructure is illustratedon Charts 2 and 3; WB 17096 and WB 17337. The first of the charts shows the organizationalpattern with the Directorate of Agriculture (Jute) (DAJ) channeling credit directly from Sonali Bank, to farmers and the second chart applies when village cooperativesbecome the credit channel.

Directorate of Agriculture (Jute)

2. This Directoratewould be the main project executing agency and would be concernedwith every project activity. DAJ would be responsible for a large staff recruitment (about 2350 total new staff including about 830 technical and senior administrativestaff) and training program, the constructionprogram, the purchase of vehicles and equipment and at the same time for improving its services to jute farmers and doubling the area under the Intensive Jute Cultivation Scheme (IJCS). The following paragraphs will describe DAJ's proposed headquartersand field staffing plans and organization.

DAJ Headquarters (ChartNo. 4, WB 17095)

3. The chief officer of DAJ would be the Director of Agriculture (Jute) who could report directly to the Secretaryof Agriculture. The Director would be responsible for policy matters, overall supervisionof all DAJ activities and would be the officer entitled to incur expenditure on behalf of the project. He would be assisted by an AdditionalDirector, two internationallyrecruited advisors and the following headquartersunits or staff: Administrationand Finance Unit, Technical Unit, Marketing Unit and a Building Engineer. All other units and staff would report to the Additional Director. The latter would be the chief project executing officer inter alia responsible for planning project operations (by drawing up annual plans with quarterly targets), ensuring plan implementation,preparing annual and quarterly expenditure estimates,ensuring release of funds and liaison with other ministries. He would be supportedby an internationallyrecruited project management advisor who would assist with all aspects of project ANNEX 6 Page 2

management. He should be appointed as soon as possible for a two year period and should start work not later than 9 - 10 months after credit signature. The marketing advisor should also be selected as soon as possible to start work not later than July, 1978; he would also be required for two years. Suggested qualificationsand terms of reference for the two advisors are shown in Appendix 2.

4. New headquartersstaff should be appointed as early as possible and should all be operationalwithin 9 - 10 months of credit signature. However special efforts must be made to appoint the followingkey staff on a priority basis, to ensure early and effective execution of project recruitment,procurement and constructionprograms: the Director, the AdditionalDirector of Agriculture,the Senior AdministrationOfficer, the Senior Finance Officer and the Building Engineer. They should all be in their posts within 3 months of credit signature and preferablyearlier. The administrative/financeunit would be controlledby the Senior Administration Officer and would deal with all staff finance, procurement,tenders, contracts, etc. matters. This unit would also prepare expenditureestimates, would be responsible for regular and adequate replenishmentof the project revolving fund and would prepare withdrawal applications. Terms of reference for senior staff for this and other headquartersunits and for technical field staff are given in Appendix 3.

5. The most senior of the technical specialistswould be in charge of the technicalunit. This would provide technicalguidance to DAJ staff, participate in staff training, lia:Lsewith research services and design the field trial/demonstrationprograms. The training officer of this unit would be responsiblefor designing,arranging and monitoring the various training programs.

6. The building engineer would not have permanent career prospects with DAJ and would thereforebe deputed from a GOB engineeringdepartment - for instance the Public Works Department. He should be a senior executive engineer--andwould be responsiblefor guiding the Additional Director and the AdministrativeOfficer on all constructionmatters (designs,drawings, tender proposals,and evaluation,awarding contracts,purchasing land, supervising constructionand payment of suppliers and contracts).

7. The senior marketing officer would be in charge of the marketing unit and together with the marketing advisor (para 3) would be responsible for designing the trial marketing scheme. This would involve deciding on optimal size of each unit, feasibilityof loose jute versus baled jute marketing, (Annex 5, Part II), design and constructionof marketing facilities, and establishmentof marketing procedures. The unit would need to employ staff for managing and operating jute stores and with help from the Administration/Financeunit, the institutionexpert and Sonali Bank would design recording and accounting systems and train operating staff in their use. ANNEX 6 Page 3

Field Services

8. Initially the field services would continue to operate as in the past (Annex 2 B). The area covered by IJCS would be expanded from 0.5 million acres to I million acres over four years and the existing 9 zones and 250 units would be increased to 20 zones and 500 units covering 50,000 and 2,000 acres jute respectively as at present. The number of jute blocks would remain at 2,500, but the area of each block would be doubled from 200 acres before project start to 400 acres. This would be a gradual process to be phased in line with expansion of the project area and would in many instances involve amalgamation of two existing blocks or Jute Farmers Associations.

9. New posts for field services to be established for the project would be those of a Deputy Assistant Director of Agriculture (DADA) and two subject matter specialists (SMS) at each zonal office and of an Input Supply Officer (ISO) at each unit office. DADA would share with ADA the task of managing 25 jute units and would be mainly concerned with field supervision by touring on a fixed monthly schedule. SMS would improve staff training, provide technical backup to field staff and initiate a field trials/demonstration prggram.

10. ISO would relieve JEO and to some extent JEA of administrative work arising from supplying farmers with credit, inputs and implements and the need to keep unit records and prepare unit reports. This would be an entirely new post in the Department of Agriculture and training and works procedures would have to be established. Consequently, initial recruitment would be modest (confined to 100) in the first project year. Priority for posting would be given to areas where jute block size had been increased to 400 acres and where the initial jute marketing trials are planned. In areas where there would be no ISO initially, JEO and JEA would continue to carry out administrative work as in the past, but by early 1979 there would be an ISO for each unit. ANNEX 6 Appendix I Page 1

BAIGLADESH

JUTB PROJECT

Prolect Agencies and their Project Related Activities

Agency Ministry Project Activity

Directorate of Agriculture a. Employment, training management of Agriculture staff; (Jute) (DAJ) b. Employment of project advisors;

c. Hiring of evaluation unit;

d. Purchase of transport, implements and equipment;

e. Construction of houses and Jute godowns;

f . Arranging overseas training;

g. Onlending production and marketing credit to farmers;

IL. Arranging supply of fertilizers and pesticides;

i. Organizing Jute Farmers Associations;

Providing extension services to farmers;

k~. Conducting jute marketing for farmers; and

1. Preparing credit withdrawal applications.

Sonali Bank - a. Lending short term production and marketing credit to DAJ and to village cooperatives;

b. Paying BADC for fertilizer supplied on credit;

c. Packaging and delivering cash credit to farmers; ANNEX 6 Appendix 1 Page z

Agency Ministry Project Activity

d. Training DAJ staff;

e. Assisting with loan appraisal, monitoring and recovery;

f. Assisting with supervision and management of marketing credit; and

g. Preparing credit withdrawal applications.

Thana Central Co- Local govern- a. Onlending production and marketing operative Associa- ment, Rural credit to jute farmers in selected tions (TCCAs) and development thanas; Village Coopera- and Coopera- tive (KSS) Jute tives b. Organizing inputs supply for jute Blocks farmers in the same thanas; and

c. Conducting trial jute marketing in selected thanas.

Ministry of Jute Jute a. Assisting in training DAJ staff in jute marketing, particularly grading.

Bangladesh Jute Jute Producing, processing jute seed and Research Insti- supplying it to DAJ at district or tute (BJRI) thana level.

Seeds Directorate

BJRI Jute a. Providing technical information based Agricultural on research results; Research Directorate b. Participating in planning and evaluating DAJ's field trials and demonstrations; and

c. Participating in DAJ's staff training program.

Bangladesh Agriculture Supplying fertilizers to jute farmers. Agricultural Development Corporation ANNEX 6 Appendix I Page 3

Agency Ministry Project Activity

Plant Protection Agriculture Supplying of pesticides and sprayers Directorate to jute farmers at thana level.

Jute Farmers - a. Fostering cooperationof members for Association jute production;

b. Assist DAJ to:

i. Plan jute production;

ii. Assess credit and inputs requirements;

iii. Distribute,monitor and recover credit;

iv. Organize extension activities;

v. Organize sharing of implements;and

vi. Organize jute marketing.

April 2, 1977 ANNEX 6 Appendix 2 Page 1

BANGLADESH

JUTE PROJECT

Draft Terms of Reference for Advisors

Project Management Advisor

1. Duties

The advisor would assist the AdditionalDirector of the Directorate of Agriculture (Jute) with all aspects of the Jute Project. Specifically,he would assist with the following:

(a) Preparationof an annual work plan;

(b) Recruitmentand training of staff;

(c) Preparationof tender documents and bid evaluation;

(d) Supervisionof the constructionprogram and implementation of other project components,with particular emphasis on credit aspects and trial jute marketing;

(e) Developmentof reporting systems and preparation of progress reports; and

(f) Developmentof management policies and organizational structurenecessary for effectiveproject implementation.

2. Qualifications

The advisor should have a master's degree in agricultureor agricultural economicsor other relevant subjects with at least five years' experience of the management of integrated crop production and marketing schemes involving smallholdingcooperative systems in a developing country.

3. Period of Assignment

The assignmentwould be for 24 months. The advisor to be appointed by January 1, 1978, should take up his post by May 1978. ANNEX 6 Appendix 2 Page 2

MarketingAdvisor

To assist the AdditionalDirector of Agriculture and the marketing unit with all aspects of the trial jute marketing scheme, in particularwith the following:

(a) Determining the type of marketing operation (loose jute or katcha baled) and level of operation (block or unit);

(b) Selecting sites for facilities;

(c) Designing suitable structures;

(d) Devising the marketing organizationand marketing procedures;

(e) Training of staff and farmers;

(f) Designing reporting accounting and market intelligence systems;

(g) Helping in preparing progress reports;

(h) Supervising constructionof facilitiesand of the marketing; and

(i) Redesign of structures, policies or procedures in light of operating experience.

5. Qualifications

University degree in agriculture,agricultural economics or relevant commercial subject with at least ten years' experienceof successfully organizingand managing smallholdermarketing operationsby cooperativesor farmers' associationsin developingcountries. Must speak and write English fluently.

6. Period of Assignment

The appointmentwould be for 24 months starting in July 1978 to allow the advisor to monitor operationsover the first year (the appointment should be made by May 1, 1978). The next twelve months would then be distributed over the following two or three years, enabling the advisor to test modificationsduring successivemarketing seasons. ANNEX 6 Appendix 3 Page 1

BANGLADESH

JUTE PROJECT

Guidelines for Duties and Qualificationsof DAJ Staff

Chief AdministrativeOfficer

1. Duties

(a) Managing administrativeunit by supervisingfinance and establishmentsections and administrativework of field offices;

(b) Preparing and evaluating tenders, preparing contracts, supervisingdeliveries and services,ensuring prompt payment;

(c) Opening promptly letters of credit for overseas purchases and preparingproject withdrawaldocumentation for prompt submission to the Director of Agriculture (Jute);

(d) Preparing project financingplan, expenditurefore- casts and ensuring replenishmentof project revolving fund;

(e) Designing accountingand financialreporting of all sections of the Directorate of Agriculture (Jute) with particularreference to recordingcredit and jute marketing transactions;

(f) Maintainingproject accounts;

(g) Through the audit unit carrying out continuousmoni- toring of accounts of field offices, particularly their credit and marketing records;

(h) Dealing with policy and administrativeaspects of all staff matters includingrecruiting, training, posting, promoting,etc. and assistingwith those activitiesas required by the Director DAJ; and

(i) Preparing reports on administrativeand financial aspects of the project. ANNEX 6 Appendix 3 Page 2

2. Qualifications

Senior administrationofficer (with rank at least equal to Assis- tant Director of Agriculture)with considerableexperience of finance, procurement and staff management. Either he or the finance officer should have considerableexperience in overseas procurementprocedures and in dealing with letters of credit.

Senior Accountant

3. Duties

Would manage and supervise the finance section of the administrative unit. Duties would be the same as financial duties of Chief Adminis- trative Officer.

4. Qualifications

Senior financial officer (equivalentto Assistant Director of Agriculture level) with considerableexperience in designing departmental accounting, supervisingaudit work and preferablyexperienced in handling letters of credit.

Technical Specialists (Agronomy,Plant Protection)

5. Duties

(a) Planning work for field services;

(b) Liaising with BJRI staff;

(c) In conjunctionwith BJRI staff planning field trials and demonstrationprogram. Supervising these programs;

(d) Participatingin planning staff and farmer training programs and participa,tingin training ADA, SMS and JEO;

(e) Formulating technical recommendationsfor field staff; and

(f) Paying frequent field visits to assist zonal SMS conduct their programs. ANNEX 6 Appendix 3 Page 3

6. Qualifications

Minimum qualificationis master's degree in the requisite spe- cialty and at least five years' field experience.

Extension Specialist

7. Duties

(a) Determining extensionmaterials for use by field staff;

(b) Preparing of literature, charts, posters and radio programs;

(c) Participatingin training senior staff and in preparing training manuals and course material for training JEA.

8. Qualifications

At least a master's degree in agriculturalextension with at least five years' field experience.

Training Specialist

9. Duties

(a) Determining training requirementsof all staff upon first appointment and for subsequent continuous inservice training;

(b) Arranging necessary training including longer term training for JEA and special basic training for ISO;

(c) Participatingin training headquarterstechnical specialists,ADA, SMS and JEO to conduct training of JEA; and

(d) Collaboratingwith extension specialist to provide teaching aids.

10. Qualifications

University degree in agriculturaleducation and at least five years' experienceof conducting agriculturaltraining programs. ANNEX 6 Appendix 3 Page 4

Marketing Officer

11. Duties

He would have the same duties as those described for the Marketing Advisor (Appendix2, para. 4).

12. Qualifications

Preferablya universitydegree in economicsor commerce or related subject. Must have at least ten years' experienceof managing a jute marketing organization.

Zonal AssistantDirector of AgricuLture

13. Responsiblefor planning, administeringand supervisingall activities of DAJ in his zone, normally comprisingabout 50,000 acres jute cultivation. With assistance from Headqjuartersstaff and his subject matter specialists (SMS) planning and organizing staff and farmers training programs. Would be the executive chairman of the zonal coordinatingcommittee responsible for liaising with and coordinatingthe services of supportingagencies in particular those responsiblefor credit and inputs supplies. Also responsible for coordinatingzonal records and submitting regularmonthly and quarterly progress reports. His office would have charts showing the planned work program and location of each JEO, ISO and JEA for each day of the month.

Deputy Assistant Director of AgricuLlture(Deputy ADA)

14. Would be responsiblefor assistinghis ADA in all duties, but would be particularlyconcerned with field supervision. Would tour on a fixed schedule to ensure that either he or his ADA visit each Jute Extension Officer (JEO) at least once a month. The Deputy ADA should be given minimal administrationduties.

Sublect Matter Specialist (SMS)

15. Duties

(a) Training JEO and participatingin training JEA;

(b) Liaising with local staff of BJRI;

(c) Conducting through JEA field demonstrationsand field trials,recording and evaluating results and proposingmodifications in technical recommendations if necessary. Visiting each trial/ demonstrationregularly; ANNEX 6 Appendix 3 Page 5

(d) Training extensionstaff in advising the farmers on proper and safe use of insecticidesand pesticides;

(e) Assisting JEO and JEA in holding field days at trial/demonstrationsites;

(f) Organizing pest monitoring services,training JEA and farmers for the purpose; and

(g) Checking availabilityof adequate and suitable pesticides in thana stores of the Plant Protection Directorate.

16. Qualifications

Master's degree in agronomy or plant protection.

Jute ExtensionOfficer (JEO)

17. Would superviseDAJ activities in a Jute Unit (5 blocks) including organizing (or reorganizing) Jute Farmers' Associations round a 400-acre jute block. Appointment of ISO would relieve him of administrativeduties so that he can spend most of his time visiting jute blocks on a fixed schedule of visits. Would superviseand support JEA and would be expected to know most Jute farmers personally. Would be responsiblefor organizing training and work plan for his JEA and his office would have copies of each JEA's training and visit schedule. The JEO would be responsiblefor checking recordsmaintained by ISO particularlywith regard to progress of operations, achievementof targets and those relating to credit and marketing activities. He would also be responsiblefor submitting fortnightlyreports, for which ISO would prepare data.

Input Supply Officer (ISO)

18. Duties

(a) Carrying out administrativeduties of unit;

(b) Ensuring fertilizerand pesticidessupplies to farmers;

(c) Collectingapplications for credit prepared by farmers and JEA;

(d) Organizing distributionof fertilizer,pesticides, sprayers, farm equipmentand credit;

(e) Organizing credit recovery; ANNEX 6 Appendix 3 Page 6

(f) Maintaining credit and interest records;

(g) Ensuring the recording, storing and proper maintaining of equipment;

(h) Assisting in the trial marketing operation, in case of possible marketing operations at block level assisting with management, record keeping and accounting for the operation; and

(i) Preparing all unit reports.

19. Qualifications

Should hold commerce degree or could be recruited from outstanding JEA.

Jute ExtensionAssistants

20. Duties

(a) Organizing farmers block into eight groups;

(b) Choosing contact farmers;

(c) Visiting and training each group once every two weeks and training farmers according to prescribed program and maintaining visits diary;

(d) Attending training once every two weeks and reporting farmers' problems, and other problems encountered;

(e) Monitoring pest incidence;

(f) Conducting at least one field trial or demonstration each year;

(g) Maintainingblock records with respect to improved seed use, line sowing, fertilizer use, pest control, etc.;

(h) Conducting crop cutting - supervisedby JEO;

(i) With assistance from Jute Farmers'Associations (JFA) Committee compiling inputs and credit requirement lists and assisting ISO as necessary with completion by farmers of loan applicationand with distributionof inputs and cash credits; ANNEX 6 Appendix 3 Page 7

(j) Maintainingand repairing implements;and

(k) Attending meetings of JFA and providing it with constant help and encouragement. ANNEX7 Page 1

BINGLADESH

JU_E PROJECT

Monitorirg and Evaluation

General

1. It is, important that project implementation be closely monitored and that the impact on production and farm incomes be thoroughly evaluated. The lessons derived from this project should also prove very valuable for a future repeater project.

2. Given the project's fundainentalobjectives, monitoring should consist of a process of timely data gathering and analysis on the gradual building up of the organization and on tIie quality of the performance of the project's staff. Its purpose is to ensure that the entire IJCS apparatus is fulfilling the functions for which it was established. The project's evolution through the execution and operation phases, i.e. project's inputs and project's activities and outputs, should be monitored against the schedules, targets and expectations defined at the start.

3. Evaluation of the project, to be carried out during project implementation, should assess the overall impact of the project on crop yield levels and on the beneficiaries welfare. The evaluation should also determine the degree to which the project is reaching the economic, technical and social targets set for agriculttral development. It has to assess the comparative effectiveness of the technological practices recommended for extension and the changes in farmers' production behavior. It should be conducive to improvements of the program and, if necessary, should include recommendations for modifications to the project.

A. Monitoring

4. The UNDP Extension Project has already started discussions with the Ministry of Agriculture in redesigning the reporting forms for extension activities, and the IDA supported Rural Development Project (Cr. 631) has initiated an intensive monitoring and evaluation exercise in the seven project thanas in Bogra and Mymensingh districts.

Project Activities

5. If records and books are kf:pt accurately and up-to-date by extension staff or statistical agents, Jute Extension Officers (JEOs) need only monitor key elements of the various project components. The monitoring ANNEX 7 Page 2 system would, therefore, be built into the regular progress reports of the JEOs and other project officers. These reports would in turn be used for the quarterly and annual reports to IDA. Monitoring will pay particular attention to two aspects of project implementation. The first is GOB appropriation of funds to the project agencies, including conformity of the amounts to the approved PP and timeliness with regard to project needs; this aspect would be monitored by the Senior Accountant of DAJ. The second is the execution of project works and its conformity with proposed criteria and procedures; this aspect would be the responsibility of JEAs, ISOs and JEOs.

6. The monitoring and evaluation system should use a limited number of selected indicators, which would reflect the essential agronomic, economic and sociological dimensions of the project. The indicators should revolve around three key concentration points: (a) the visits (quantitative and qualitative aspects); (b) the adoption of recommendations; and (c) the yields. For the institution building objectives of the projects, the main monitoring indicators suggested are: staffing of the extension organizations; selection of contact farmers; training; and physical equipment. For monitoring extension performance, the suggested indicators are: degree of exposure to extension; visit performance; farmers' evaluation of IJCS; adoption rates of new practices; and quality of training sessions. Formats would be simplified to present only monthly targets and achievements to minimize time spent on report preparation. A final list of items to be monitored for each project component would be prepared by DAJ as a part of the IDA project reporting requirements.

7. Since zonal and district coordination committees would review the reports of all the project participants, they would be directly informed of the problems or delays and would propose actions to overcome them. DAJ would compile quarterly reports of the various project components. This information, along with data on procurement, expenditure and disbursement would be included in the quarterly progress report sent to IDA.

B. Evaluation

8. While project monitoring would follow the implementation of the project, the evaluation would assess the impact of the various project components on farm level production, the rural population, and agricultural services.

9. Overall project evaluation would be the responsibility of the Plan- ning Cell of the Ministry of Agriculture. Since this will require varied expertise, it would be difficult in the short term to assemble in the Plan- ning Cell an independent group with such broad competence. The evaluation exercise would, therefore, be contracted to a local socio-economic research organization or a university under the supervision of the Planning Cell. Detailed terms of reference will be prepared by Planning Cell for IDA's review. Draft TORs are given in the Appendix. ANNEX 7 Appendix Page 1

BANGLADESH

JUTE PROJECT

Draft Terms of Reference for Project Evaluation

Introduction

1. The Project, on a pilot basis, aims to integrateproduction and marketing at the growers' level, for the first time in Bangladesh. A close and continuousevaluation of this operation is essential to ensure the Proj- ect's successfulimplementation. The objectiveof such a service will be to collect, scientifically,basic data to assess the implementationof the Project and make recommendations,if necessary, to improve its effectiveness. Major areas to be covered are outlined below:

Survey

2. Three surveys will be conducted. Their main componentsare:

Survey I - to be conductedbetween end-February/end- March and will provide analyzed informationon such major aspects as the number of Jute Farmers'Associa- tions and KSS Jute Blocks in existenceand their membership; size of holdings of member-farmers,KSS Jute Blocks management aspects, total land area planted under jute and projected total production,credit demand and arrangementsfor supply of credit and other inputs.

Survey II - to be conductedshortly after harvest (early July to mid-August) and will provide analyzed informationon such aspects as jute yield/acre,revised total estimated production,price forecast, production cost, number of farmersapplying line- sowing, fertilizer,etc., problems in obtaining inputs and credit, includingmachinery, assessment of effectivenessof the Extension Service and IJCS personnel,review of Farmers'Associations' role, review of KSS Jute Blocks management,in particular their accounts and records, etc.

Survey III - to be conducted end-Decemberto end- January and will concentrateon the marketingaspects of the Project. Specifical]yit will evaluate the effectivenessof the marketing facilitiesin obtaining higher prices and reducing marketing costs for ANNEX 7 Appendix Page 2

the national economy, management and operation of project jute marketing, records and accounts maintained for the operation,marketing procedures, suitabilityof facilities,farmers' participation, prices received by farmers who use project facilities and by those who use other channels. It will also include a complete evaluation of the Project's operations and make recommendationsfor any modi- ficationsor improvements. Project marketing may not start until the second year of project implementation. Until then the survey should investi- gate prices received by jute growers.

Survey Methodology

3. After the contract has been signed between the Ministry of Agricul- ture and the Consulting Organizationand before commencingwork, the consultants will outline detailed methodology,including questionnairesto be used for collectingdata, the sample size, etc. This will be reviewed by IDA.

4. In Survey I, it might be useful to include at least 20% of the existing Farmers' Associationsof which 20%, again, should be selected for field interview. The remainderwould be analyzed on the basis of the records maintained for each block. Of the Farmers' Associations (includingKSS Jute Blocks) selected for field interview, only 20% of the members would be inter- viewed.

5. In Survey III, since the number of marketing facilities provided to the Farmers' Associationswill be limited, at least in the initial stages, 100% coverage would be desirable, but a reasonable sample for investigating price received by farmers using other channels would have to be determined.

6. These are, of course, merely guidelines. Actual details should be worked out by the consulting organization. The objective of the Surveys should be to collect data to reflect the actual situation.

Reports and Review

7. After the completion of each Survey, an evaluation report should be presented to the Planning Cell of the Ministry of Agriculture to be submitted to the Project CoordinationCommittee. A copy of the report, together with the Minutes of the Decision taken at the meeting, should be forwarded to IDA for review. ANNEX 7 Appendix Page 3

Consultants' Staff Requirements

8. To undertake the monitoring and evaluation, the consulting_team should consist of the following:

Description No.

(i) Senior Statistician 1

(ii) Senior Economist 1

(iii) Junior Economists 2

(iv) Financial Analysts 2

Description - No.

(v) Credit Specialists 2

(vi) Accountants 2

(vii) lIarketing Experts 2

(viii) Agriculturalist 1

(ix) Interviewers 100

Cost

9. It is estimated that the cost of such monitoring and evaluation service will be about US$35,000 per year. The consultants will provide such service for each of the five years of the Project's implementation. ANNEX 8 Page 1

BANGLADESH

JUTE PROJECT

ImplementationSchedule

1. The Government of Bangladesh (GOB) had prepared implementation schedules which aimed at project completion in three years; GOB is in fact hopeful that they would be able to achieve their target in an even shorter time. However, because of the long time which, experience has shown, is needed to appoint staff and advisers in the first year and to initiate a building program, and initial unfamiliarityof project officials with procurement procedures,a five year implementationperiod was considered safer.

2. The rate of expanding the Intensive Jute Cultivation Scheme (IJCS) would govern the speed of most project activities such as staff recruitment, purchase of equipment and provision of farmers' credit. In addition, the project would provide additional staff, housing and vehicles for the ongoing scheme and this represents a major recruitment,construction and procurement program during the first project year. Consequently,only modest expansion of IJCS areas is projected during 1977/78. The total project area of 1 million acres jute has been scheduled to be covered by IJCS over four years as follows:

YEAR: 1977 1978 1979 1980 1981 1982

Acres Jute Covered by IJCS: 500,000 550,000 650,000 800,000 1,000,000 1,000,000

However, this schedule should not be taken to rule out faster implementation.

3. Staff recruitmentand all project expenditurewould be completed over four years, except for financing constructionof housing for Jute Ex- tension Assistants,which would require a further year. The project would, in addition, continue to finance monitoring services and extension staff in the fifth year.

4. Identificationof house sites and subsequent land purchaseswould be the main constraint to the JEA houses constructionprogram. Each time the area under IJCS expands, new jute blocks are established- one per 400 acres jute. This process usually takes place in October, in readiness for jute sowing in the followingMarch. One JEA is attached to each block and his house would be situated in a village of the block. The site of a JEA house can only be determined after the block has been formed. Based on the IJCS expansion program (para. 2) and allowing a year to select and purchase house sites and place contracts and five months constructiontime, construction would not be completed until early 1982. ANNEX 8 Page 2

5. Cost estimates (Annex 9) show phasing of expenditure. The same informationgiving mainly physical implementationprojections is given in Table 1 and a bar graph schedule; Chart 1. Some of the more importantproj- ect activities are shown in greater detail in the following schedules:

Schedule 1 - Recruitment of HeadquartersStaff.

Schedule 2 - Recruitment of ADA, Deputy ADA, SMS.

Schedule 3 - Recruitment of JEO and ISO.

Schedule 4 - Recruitment of Consultants.

Schedule 5 - Transport EqulipmentProcurement.

Schedule 6 - Implements Procurement.

Schedule 7 - Construction. ANNEX 8 Table 1

BANGLADESH

JUTE PROJECT

ImplementationSchedule

Project Financial Year Activity Total 1978 1979 1980 1981 1982

1. Coverage of Intensive Jute Cultivation Scheme (acres) 1,000,000 550,000 650,000 800,000 1,000,000 1,000,000

2. Staff Recruitment (number) a. Head Office Professional staff 14 14 - - Supporting staff 28 28 - _ _ _ 42 42 - --- b. Zonal Offices ADA 11 4 3 4 - - DADA 20 13 3 4 - - SMS 40 26 6 8 - - Supporting staff 236 103 57 76 - _ 307 146 69 92 - -

c. Unit Offices JEO 250 100 - 150 - - ISO 500 100 200 200 - - Supporting Staff 1,250 125 250 315 500 - 2,000 325 450 725 500 -

3. Transport (number) Motor vehicles 34 27 3 4 - - Motor cycles 1,060 489 209 362 Bicycles1/ 2,500 2,500 - - - -

4. JEA Houses (number) 2,500 - 600 700 700 500

5. Office Furniture (sets) 250 25 50 75 100 -

6. Research and Extension Supplies (TkV/ 800,000 120,000 128,000 158,000 197,000 197,000

7. Equipment (number) Seed drills 25,000 1,000 6,000 8,000 10,000 - Hand hoes 20,000 1,000 5,000 6,000 8,000 -

8. Consultants (manmonths) Directorate of Agriculture (jute) 78 6 24 12 6 _

9. Overseas Training (manweeks) 48 - 24 24 - -

10. Monitoring Cost (Tk)2/ 2,362,500 262,500 525,000 525,000 525,000 525,000

11. Jute Marketing Sheds Construction (number) 50 - 10 10 30 -

12. Short-term Credit (Tk)2/ Production 125,000,000 20,000,000 30,000,000 40,000,000 35,000,000 Marketing 30.000,000 - 6,000,000 6,000,000 18.000,000 - 155,000,000 20,000,000 36,000,000 46,000,000 53,000,000 -

1/ For 2,500 JEA who have already been recruited. 2/ Without contingencies.

April 2, 1977 BANGLADESH

JUTE PROJECT

Recruitment Schedule for Headquarters Staff

Agencies 1977 1978 Activities Responsible J A S 0 N D J F M A M J 11 2/ 3/

a) Submission of proposals x

b) Government Sanction x

c) Advertisement by PSC/Ministry x x

d) Appointment of Selection Committee x x

ej Lnter.vLews x x x

f) Appointment x x

g) Training x

h) Posting x

Type of Staff Members:

Director of Agriculture 1 Engineer 1 Additional Director of Agriculture 1 Technical Specialists 3 ADA (Supervision) 2 Marketing Officer 1 Administrative Officer 1 Auditor 1 Financial Officer 1 Draftsman 1

Agencies Responsible

1/ Directorate of Agriculture (Jute) S 2/ Ministry of Agriculture c 3/ Public Service Commission o BANGLADESH

JUTE PROJECT

Recruitment Schedule for ADA, DADA. SMS

Agencies ------1977------1978------______-1979------___ Activities Responsible J F M A M J J A S 0 N D J F M A M J J A S 0 N D

a) Submission of Proposals x b) Government Sanction x

c) Advertising by PSC/Ministry x x

d) Appointment of Selection Committee x

e) Interviews x x x

f) Appointment x x

g) Training x h) Posting x

NUMBERS: ADA 4 3 4 DADA 13 3 4 SMS 26 6 8

AGENCIES RESPONSIBLE:

1/ Directorate of Agriculture (Jute) 2/ Ministry of Agriculture 3/ Public Service Commission

0N November 14, 1977 ( BANGLADESH{

JUTE PROJECT Recruitment Schedule for JEO and ISO

Agencies------1977 ------1978…1------979…------19-80------J A S 0 N D J F M5 A Ml J S 5 4 3 0 2 F 9 A 5 I A S 0 NS Activities R 2 pible

of Proposal m b) Ouvrsset Sanction c) Advertise- ment sO PSC/ d) Appointmet Of SLeletton Cumsittee by PSC m e) Interviews c f) Appointoeotm o g) Training h) Posting m

N5IMERmS: 10

.250155 -- ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~--150 ISO -- 100 200 200

AGENCIES RESPONSIBLE!

1/ Djr.retsrte sf Agricuture (lots) 2/ Ministry of Agriculture 3/ public Service Cueriusion

No-b-r 14, 1977 BANGLADESH

JUTE PROJECT

Recruitment and Service Schedule for Project and Marketing Advisors

Agencies ---- 1978______------___1979 ------… ______-1980------1981------A M J J _ S 0 N D Activities Responsible J F M A M J J A S 0 N D (Jan. 1979 througnhe-b. 1981) H 1/ 2/ 3/ - - - - -

TOR Preparation x

Ministry Revifw x

IDA Review x

Advertisement x

Selection x

Ministry Review x

IDA Review x

Appointment x

Service Period

Project Advisor

Marketing Advisor

AGENCIES RESPONSIBLE:

1. Directorate of Agriculture (Jute) 2. Ministry of Agriculture 3. IDA

November 14, 1977

F- fD BANGLADESH

JUTE PROJECT

Transport Prorureneot Scbedule

Activities -=----Resuibe… INITIATION _-A__ -- -- A 20____ F A M 3 I A S C N 0 5 F N A 1 . A S N F A 14 1'2// 4/ a) Tender Prepara- tion x x b) IDADRview c) Advertising x d) Tender Evalu- tton xC x e) IDA Review x f) Flctong Orders/ Opening L/C x g) Delivery x h) Distribution x

TYPE & NUMBERS:Motor Car Mi ni Bus Four-Wheel Drive 15 3 4 Motor Cycle 489 709 362 Bycycle 2,500 Speed Bead 10

Ageeries Responsible:

1/ Directorate of Agriculture (Jute) 2/ Ministry of Agriculturs 3/ IDA 4/ Supplier

Nove-ehr 14,1977 BANGLADESH

JUTE PROJECT

Implement Procurement Schedule

Agencies ------1977------1978------1------1979------1980------1980------1981 Activities Responsible INITIATION ------J A S O N D J F M A M J J A S O N D J F M A M J J A S N D J F M A M J I/ 2/ 3/ 4/ a) Tender Preparation x x b) IDA Review x c) Advertis- ing x d) Tender Evaluation x f) Ordering x_ g) Delivery x h) Distribu- tion x.

EQUIPMENT TYPE & NUMBERS: Seed Drills 1,000 6,000 8,000 10,000 Hand Hoes 1,000 5,000 6,000 8,000

AGENCIES RESPONSIBLE:

1/ Directorate of Agriculture 2/ Ministry of Agriculture 3/ IDA 4/ Supplier n

N),e1ber 14, 1977 BANGILADESR

JUTE PROJECT

Conatrs,tlo. Schedule

Agenc.ies Ai.iiAg.Role ounible---- 19 77----……------0979 ------1979…1------980 ……1------98-1------1------9812…---- E/ 2 /b 4 /6------NITIATION A-S-0------A-A 0 MN D J WS A F NMS 0 3 3 A-SO N D-J-MA 3DPJN AAMJJ J-A S 0N D 3 F MASS 3 1. Consultant

Preparation of

IDA Review .vrti.Sig e Evaluat ion n s IDA Review Appoiete,et o n

Prep:rat ion Ministry Review SEA Review AppreVal o s

3. Lend P.rchsee

Loc.elities Spe-

Site Identifi-

Site.ucas

4. Materials Pro- curemet

Qu..ntities Pro- peration Lender~ Prepara-

IDA Review Advertising xn Tender Evelua-

Ministry Review DIA Reviewn Placement of Orders al s a/ Delivery n ______

5. Cnotruction

Prequalificaticc. Tender Prepara- tion MInis-try Review n IDA Reve,

Evaluation c c Ministry Review SEA Review Award of Cont- ract 5el Construction el~ r ______

SEA HOUSES 600 700 700) 5(0 JUTE STORES 1 10 30

AGENCIES RESPONSIBLE:

1j/ Directorate of Agriculture (Jute) 2/ Ministry of Agricult-r

4/Consultant 5/Othere I 6/Contractor

!Supervision

Novob-r 14, 0977 ANNEX 9.

BANGLADESH

JUE_ PROJECT

Summary of Proiect Cost Estimates (Tk '000)

Year Year Year Year Year Total Foreign Exchange 1 2 3 4 5 (Year 1-5) X. Tk'000 US$'000

1. Short Term Credit (see Table 2)

Total without contingencies 20,600.0 36,o0o.0 46,000.0 53,000.0 - 155,600.0 32 50,240.0 3,349.33 Physical contingencies Price contingencies l,SO0.0 4,660.0 13,220.0 24,020.0 15,500 58.900.0 32 18,S50.0 1,256,67 Total with contingencies 22,100.0 40,660.0 59,220.0 77,020.0 15,500 214,500.0 32 69,090.0 4,606.00 II. Market Infrastructure (see Table 3)

Total without contingencies - 2,202.0 2,202.0 6,606.0 - 11,010.0 28 3,065.0 204.33 Physical contingencies - 205.0 205.0 615.0 - 1,025.0 25 256.0 17.06 Price contingencies - 393.2 641.2 2,600.1 - 3,634.5 30 1,060.0 70.67 Total with contingencies - 2,800.2 3,048.2 9,821.1 - 15,669.5 28 4,381.0 292.06 III. Implements (see Table 4)

Total without contingencies 600.0 4,500.0 5,800.0 7,400.0 - 18,500.0 - - - Physical contingencies - - Price contingencies 60.0 495.0 1,102.0 2,072.0 - 3,729.0 - - -

Total with contingencies 860.0 4,995.0 6,902.0 9,472.0 - 22,229.0 - IV. Extension Services

A. Staffing Proposed (see Table 5)

Total including allowances 4,347.78 8,150.82 14,263.14 15,895.14 15,895.14 58,552.02 - Physical contingencies - - - Price contingencies 264.64 741.13 2,152.07 3,515.41 4,633.95 11,307.20 Total with contingencies 4,612.42 8,891.95 16,415,21 19.410.55 20,529.09 69,d59.22 - B. Buildings and Office Eouinent (see Table 7)

Total without contingencies 1,194.5 22,698.0 26,806.5 26,440.0 17,850.0 94,989.0 26 24,432.0 Physical 1,628.8 contingencies 59.72 2,266.9 2,663.32 2,645.0 1,837.5 9,474.44 26 2,463.0 164.20 Price contingencies 94.06 4.420.35 8,484.66 11,419.8 10,307.25 34.726.12 26 8,985.0 599.0 Total with contingencies 1,348.28 29,387.25 37,954.48 40,504.80 29,994.75 139,189.56 26 35,880.0 2,392.0 C. Transport (see Table 8)

Total without contingencies 13,969.0 2,899.0 4,782.0 - - 21.650.0 50 10,825.00 721.67 Physical contingencies 698.5 144.9 239.1 - - 1,082.5 50 541,25 36.10 Price contingencies 986.7 334.8 954.0 - - 2,275.5 50 1,137.75 75.85 Total with contingencies 15,654.2 3,378.7 5,975.1 - - 25,008.0 50 12,504.00 833,62 D. Materials and Equipment (see Table 9)

Total without contingencies 345.00 371.75 458.00 572.00 572.00 2,318.75 37 856.0 57.07 Physical contingencies 17.25 18.58 22.90 28.60 28.60 115.93 40 46.0 3.07 Price contingencies 27.16 42.93 91.37 168.16 228.22 557.84 40 223.0 14.86 Total with contingencies 389.41 433.26 572.27 768.76 828.82 2,992.52 38 1,125.0 75.00 Total (A+Bt4C+D) - Without contingencies 19,d56.28 34,119.57 46,309.64 42,907.14 34,317.14 177,509.77 20, 36,113.0 2,407.53 - Physical contingencies 775.47 2,432.33 2,925.32 2,673.60 1,866.10 10,672.87 2d 3,050.25 203.35 - Price contingencies 1,372L.5 4.239,21 11,602,10 16,103,37 15,19,.42 40,^66.66 21 10,345.75 680.72 - With contingencies 22,004.31 42,091,16 60,917.06 60,684.11 51,352.66 237,049.30 21 49,509.00 ?,300.60

7. Technical Assistance (see Table 10)

A. For Directorate of Agriculture 450.OO 1,800.00 900.00 45n,On - 3,60n.00 1lo 31,6r,ron 24,O.n B. Overseas Trainig - 1,008.75 1,O08.75 - - 2,017.50 80 1,614.o 107.60 Saroi.oa C. Monitoring 262.50 525.o0 525.00 525.O0 525.00 2,362.50 - - -

Total vithout contirgencies 712.50 3,333.75 2,433.75 975.00 525.00 7,980,00 65 5,214.00 347.6O Physical oontirgencies 35.63 166.68 121.69 48.75 26.25 399,00 65 261.00 17,40 Price contirpencies 56.10 444.92 465.08 351.25 189.02 156.37 71 1,069.00 71.27 Total with wu±tingenieu 804.23 3,945.35 3,020.52 1,375.00 74O.27 9,885.37 66 6,544.0o 436.27 GRAND'N1WrL (I throaph V)

- Without contingencies 41,968.78 80,155.32 102,745.39 110,888.14 34,842.14 370,599.77 26 94,632.00 6,308.79 - Physical contingencies 811.10 2,804.06 3,252.01 3,337.35 1,892.35 12,096.87 32 3,567.25 237.81. - Price contingencies 2,9d8.66 3.,532.33 10.8 l 4.14, .77 M.M- 1lA.636,53 27 n.34 74.7,088 33 - With contingencies 45.768_$4 94.491,71 _ a l4807.o 67.402,03 - °.3 17 26 2 .

November 4, 1977 BANGLADESH

Jute Project

Short - Term Credit

Cost Estimates (TK'000)

… ----- …Schedule of Expenditure ------Total Foreign ------Years------Cost Exchange 1 2 3 4 5 Year(l'-5) % TK'000 Production 1/ 20,000 30,000 40,000 35,000 - 125,000 40 50,000 Marketing V - 6,000 6,000 18,000 - 30,000 - - Sprayers 3/ 600 - - - - 600 40 240 Total (without contingencies) 20,600 36,000 46,000 53,000 - 155,600 3 50,240 Contingencies: Physical 4/ ------Price 5/ 1,500 4,660 13,220 24,020 15,500 58,900 32 18,850 Total (including contingencies) 22,100 40,660 59,220 77,020 15,500 214,500 32 69,090

1/ At TK 250 per acre for 500,000 acres. Based on: (a) Data from 1 JCS survey which shlowedthat half the jute farmers (b) take production credit. Financing of total fertilizer requirements as per standard recommendations: 45 Seers of Urea @ TK 1.50 = 67.50 x 11 Seers of TSP @ TK 1.20 = 13.20 X = 96.70 (Say 100) 16 Seers of MP @ TK 1.00 = 16.00 X (c) TK 150 of a total hired labor requirement of TK 900 per acre. 2/ Based on total storage capacity of 800,000 maunds to be financed by the project (See Table ) a forecast Government guaranteed jute price of TK 90/maund and a level of marketing credit equal to about 45% of the Government guaranteed price/maund (800,000 x 90 x 45 about 30,00000) 10 3/ Based on: (a) Unit cost of Tk 300 per sprayer, (b) Assumption that half of the farmers will require a credit to purchase one of the total of 20,000 units and that pruchases will be spread equally the five year over period. (Only the incremental values of credit are given here.) 4/- Physical contingencies not applicable. 5/ Based on commulative total credit.

November 4, 1977 BANQLADESH

Jute Project

Marketing Infrastructure

Cost Estimates (TKIC000)

-- Year 1-- --Year 2-- -- Year' 3-- -- Year 4-- Total Unit CostC Foreign Exchange Units Cost Units Cost Units Cost Units Cost Units Cost (Year 1-4) % (TK000) Marketing Facilities 1/ Jute Storage Sheds 50 205.0- - - 10 2,050.0 10 2,050.0 30 6,150.0 10,250.0 25 2,560.0 Baling Presses 50 25.0- - - 10 250.0 10 250.0 30 750.0 1,250.0 50 625.0 Misc. Equipment3/ - - - - - 2.0 2.0 6.0 10.0 - -

Total (without contingencies) 2,302.0 2,302.0 6,906.0 11,510.0 28 3,185.0 Contingencies: Physical (10%)-4 205.0 205.0 615.0 1,025.0 25 256.0 Price 293.2 541.2 2,300.1 3,134.5 30 940.0

Total (with contingencies) 2,800.2 3,048.2 9,821.1 15,669.5 28 4,381.0

1/ Includes 10% Supervision Cost. Estimated unit cost covers a floor area of 5,940 Sq.ft @ TK 34.20/Sq. ft.

2/ Includes 100% customs duty and taxes.

3/ Includes tools, weighing scales, dunnage, etc. |%

4/ Physical contingencies applicable to Jute Storage Sheds only. m x

3/27/77 BANGLADESH

Jute Project

Implements

Cost Estimates (TK'000)

Estimated------Schedule of Expenditure------otal Cost/ Year 1 Year 2 Year 3 Year 4 Cost Foreign Exchange Equipment for JFA Units Unit Units Cost Units Cost Units Cost Units Cost (Year 1-4) X (TK'000) Seed Drills 25,000 0.5 1,000 500 6,000 3,000 8,000 4,000 10,000 5,000 12,500 _ _ Handhoes 20,000 0.3 1,000 300 5,000 1,500 6,000 1,800 8,000 2,400 6,000 - - Total (without 800 4,500 5,800 7,400 18,500 - - contingencies)

Contingencies: Physical - - - - Price 60. 495 1,102 2,072 3,729 - -

Total (including 860 TTs7T 60772 2 - - contingencies)

1/ Physical Contingencies do not apply

3/27/77 Z M x 41'I BANGLADESH

Jute Project

Extension Services - staffing Proposed

Cost Estissates (lIt 0-00)

------Schedule lot ecritment cud Mxoe-diture------Monthly Salary ---- Year 1------Year 2------Year 3------Year 4------Year 5--- Total (Year 1-5) Foreign Exchange I. At Headqurtera No c No Coat NO Cokt No Cost No COst N o Coat oNo Cost % Additional Director 1 2100 1 18.90 2kS '000 1 25.20 1 25.20 1 25.20 1 25.20 1 119.70 Administrative Officer 1 2000 1 08.00 I 24.00 1 24.00 1 24.00 1 24.20 1 114.00 - - Fisntal Aduteer 1 2000 1 18.00 1 24.00 1 24.00 1 24.00 1 24.00 1 114.00 - - *iteting Specialist 1 1dul 1 lo.20 1 21.60 1 21.bO 1 21.6 I .60 I 02.60 - Subject Matter Specialist - 3 2400 3 37.80 3 50.40 3 50.40 3 50.40 3 50,.40 3 239.40 Audit Officer 1 11100 1 i2.6O 1 16.60 1o I 1 10.80 1 16.80 1 790o - Conetruction Engineer 1 1200 1 10.80 1 14.40 1 14.40 1 14.40 1 14.40 Draftsman 1 1 68.40 500 1 4.50 1 6.00 1 6.00 1 6.00 1 6.00 1 28.50 Stenographer 3 500 3 13.50 3 18.00 3 18.0O 3 18.00 3 18.00 3 85.50 Steno-typist 3 500 3 13.50 3 18.O0 3 18.00 3 18.00 3 18.00 3 85.50 - _ Driver 4 350 4 12.60 4 16.80 4 16.80 4 16.80 4 16.80 4 79.80 Cleaner 3 200 3 5.40 3 7.20 3 7.20 3 7.20 3 7.20 3 34.20 Peon er 230 10 18.00 10 24.00 10 24.20 10 24.00 10 24.00 10 114.00 Darwan 2 200 2 3.60 2 4.80 2 4.80 2 4.80 2 4.80 2 22.80 Nightguard 2 200 2 3.60 2 4.80 2 4.80 2 4.80 2 4.80 2 22.80 - - Total (Hqrs) 37 37 207.0WA" 37 276.00 37 276.00 37 276.00 37 276.00 37 1,311.00 - - II, At Zoual offices 2 Asstt. Director of Agriculture 11 1400 4 50.40& 7 117.60 11 184.80 11 194.80 11 184.80 11 Subject Matter Specialist 40 1000 264// 722.40 312.00 32 384.00 40 480.00 40 480.00 40 480.00 40 2136.00 - - Dy. Metst. Director of Agric. 20 1000 13- 156.00 16 192.00 20 240.00 20 240.00 20 240,00 20 1069.00 - - IDeadrterk 11 300 4 16.80 7 29.40 11 46.20 11 46.20 11 46.20 11 184.80 - - Stenographer 11 450 4 21.60 7 37.80 11 59.40 11 59.40 11 59.40 11 237.60 - Accountant 11 350 4 16.80 7 29.40 11 46.20 11 46.20 11 46.20 11 184.80 Typist 11 320 4 15.36 7 26.88 11 42.24 11 42.24 11 42.24 11 168.96 - _ pead Cashier 11 320 4 13.36 7 26.88 11 42.24 11 42.24 11 42.24 11 168.96 - L/D Assistant 22 320 8 30.72 14 53.74 22 04.48 22 84.48 23 Accounts Clerk 84.48 22 337.92 - _ 22 320 85, 30.72 14 53.76 22 84.48 22 84.48 22 84.48 22 337.92 Driver 20 320 13- 49.92 16 61.44 20 76.80 20 76.80 20 76.80 20 341.76 - Dri3eo-rcChanic Operaor 11 200 4 9.60 7 16.80 11 26.40 11 26.40 11 26.40 11 105.60 - Cash Guard 11 200 4 9.60 7 16.80 11 26.40 11 26.40 11 26.40 11 105-60 - - Cleaner 22 200 86/ 19.20 14 33.60 22 52.80 22 52.80 22 52.80 22 211.20 Penn 51 200 30 72.00 39 93.60 51 122.40 51 122.40 51 122.40 51 532.80 - - Nightguard 11 2D0 4 9.60 7 16.80 11 26.40 11 26.40 11 26.40 11 105.60 Dar.en 11 200 4 9.60 7 16.80 11 26.40 11 26.40 11 28.40 11 105.60 Total (Zonal Offices) 307 246 845.28 1207.32 215 307 1667.64 307 166764 307 1667.64 307 7055.52 - _ III. At Unit Offices Jute Extension Officer 250 630 1 00 00123 00 250 1300.00 250 1800.00 250 1800.00 250 6840.00 Input Supply Officer 500 450 100 405,00 / 300 1620.00 500 2700.00 500 2700.00 500 2700.00 500 10123.00 i-/S Assistant 250 320 25 96.00 75 288.00 150 576.00 250 960.00 250 960.00 250 2880.00 - _ TyDist 250 320 25 96.00 75 288.00 150 576.00 250 960.00 250 960.00 250 2880.00 - - Peon 250 200 25 60.00 75 180.00 150 360.00 250 600.00 250 600.00 250 1800.00 Nightgusard 250 200 25 60.00 75 180.00 150 360.00 250 600.00 250 Storekeeper 600.00 250 1800.00 250 3Z0 25 96.00 75 268.00 150 576.00 250 960.00 250 960.00 250 2880.00 - _ Total (Unit officers) 2000 325 1533.00 775 3564.00 1500 6948.00 2000 8580.00 2000 8580.00 2000 29205.00 - -

Total (All Staff) 2344 gOO 2585.28 1027 5047.32 2344 8891.6k 23444 10523.64 234444 10523.64 2344 3757152

Daily and Travel Allowasces 1762,50 3103.50 5371.50 5371.50 5371.50 20980.50 Total (with allowances) 4347.78 8150.82 14263.14 15895. 15895.14 Price Contingencies 264.64 741.13 2152.07 3515.41 4633.95 11307.20 Total (witb allowances and 129L95 16415.21 19410.55 2096 Co,atD.emscits) 9.22

_/ A llsw{sgfor 8 ecubis sakey in the first year for all staff 2/. AlIstis for 9 scathe sala-1 in tbe firat ye_r 5f lelSe IS3 Subject utter Spcialists for the etiug 9 ZionS Diftees 1 3/ IsaleudssJ DaMerr for the existing 9 ZOne Oific_s 6/ Inclodes 18 Peons for the existing 9 Zonal Oiffied 7/ Sle Teb197

.UIn. 15, 1977 - BANGLADESH

Jute Project

Extension Services - Daily and Travel Allowances for Staffing Proposed

Cost Estimates (Tk '000)

------Years------Total Foreign Exchange Daily Allowance 1 2 3 4 5 (Year 1-5) % Tk'000 Headquarters Staff 31.50 42.00 42.00 42.00 42.00 199.50 - - Zonal Office Staff 189.00 247.50 319.50 319.50 319.50 1,395.00 - - Unit Office Staff 720.00 1,440.,00 2,700.00 2,700.00 2,700.00 10,260.00 - Sub-total 940.50 1,729.50 3,061.50 3,061.50 3,061.50 11,854.50 - -

Travel Allowance LI Headquarters Staff-' 84.00 84.00 84.00 84.00 84.00 420.00 Zonal Office Staff A" 258.00 330.00 426.00 426.00 426.00 1,866.00 Unit Office Staff - 480.00 960.00 1,800.00 1,800.00 1,800.00 6,840.00 Sub-total 822.00 1,374.00 2,310.00 2,310.00 2,310.00 9,126.00

Total (Daily and Travel Allowances) 1,762.50 3,103.50 5,371.50 5,371.50 5,371.50 20,980.50

1/ @ TK 30/day for 100 days travel in a year, 2/ @ TK 30/day for 150 days'travel in a year- 3/ @ TK 20/day for 180 days'travel in a year. 4/ TK 1.00/mile upto 500 miles in a month, 5/ TK k.00/mile upto 200 miles in a month.

3/26/77 BANGLADESH

JUTE PROJECT

Extension Services - Buildings and office Equipment

Cost Estimates (Tk '000)

'Year 1 Year 2 Year 3 Year 4 Year 5 Total Cost Foreign Exchange Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost (Yeir 1-5) Z Tk '000 A. Buildings IniputSupply Officer's I/ houses 2,500 29.5 600 17,700.0 700 20,650.0 700 20,650.0 500 14,750.0 73,750.0 25 18,440.0 Extension CentersVl 2,500 47 600 2,820.0 700 3,290.0 700 3.290.0 500 2.350.0 11 750.0 25 2.935.0 20,520.0 23,940.0 23,940.0 17,100.0 85,500.0 25 21,375.0

B. Office Equipment Office furniture 250 4.5 25 112.5 50 225.0 75 337.5 100 450.0 - - 1,125.0 - - Stationary 250 3.0 25 75.0 75 225.0 150 450.0 250 750.0 250 750.0 2,225.0 - - Typewriters 278 13.0 39 507.0 56 728.0 83 1,079.0 100 1,300.0 - - 3,614.0 50 1,807.0 Calculators(manual) 500 5.0 100 500.0 200 1.000,0 200 1.000.0 - 2,500.0 50 1.250.0 1,194.5 2,178.0 2,866.5 2,500.0 750.0 9,489.0 32 3,057.0

Total (A+B)withoutcontingencies 1,194.5 22,698.0 26,806.5 26,440.0 17,850.0 94,989.0 26 24,432.0 3/ Contingencies- rhysical 59.72 2,268.9 2,663.32 2,645.0 1,837.5 9,474.44 26 2,463.0 - Price 94.06 4 420.35 8 484.66 11.419.8 107.30.Z5 34.726.12 - 8.985.0 Total with contingencies 1,348.28 29,387.25 37,954.48 40,504.80 29,994.75 139,189.56 26 35,880.0

I/ Includes 57.supervision costs, estimatedunit cost covers a floor area of 308 sq.ft. i.e., Tk 100.64/sq.ft.

2/ 200 sq. ft. corrugated iron roof and pole structure. 1

3/ Applying 10% physical contingencies on buildings and 5% on office equipment.

June 24, 1977 BANGLADESH

JUTE PROJECT

Extension Serivees - Transport Cost Estimates (TK 000)

Schedule of Expenditures Estimate Total Cost/Unit Year l Year 2 Year 3 Year 4 Cost For. Exchange Description Units CIF Taxes Total Units Cost Units Cost Units Cost Units Cost (Years 1-4) X TK 000

At Headquarters

4-Uheel Drive Vehicle 2 84.0 116.0 200.4/ 2 400.0 ------400.0 50 200.0 Sedan (car) 1 84.0 116.0 200.0:-/ 1 200.0 ------200.0 50 100.0 Minibus 1 84.0 116.0 200.0- 1 200.0 _ - - - _ - 200.0 50 100.0 Subtotal 800.0 ------800.0 50 400.0 At, Zonal Office 1/ Speed boats 1O 60.0 64.0 144C 10 1,440.0 - - 1,440.0 50 720.0 4-Wheel Drive Vehicle 20 84.0 116.0 200.02- 13 2,600.0 3 600.0 4 800.0 - - 4,000.0 50 2,000.0 Motorcycles 60 4.5 6.5 11,0-1 39 429.0 9 99.0 12 132.0 _ _ 660.0 50 330.0 Subtotal 4,469.u 699.0 932.0 - - 6,100.0 50 3,050.0

At Unit Offices

Motorcycles 1,000 4.5 6.5 11.0k' 450 4,950.0 200 2,200.0 350 3,850.0 - - 11,000.0 50 5,500.0 Subtotal 4,950.0 2,200.0 3,850.0 - 11,000.0 50 5,500.0

At Block Level Bicycles 2,500 0.75 0.75 1.53/ 2,500 3,750.0 - - 3,750.0 50 1,875.0

Subtotal 3,750.J - - - 3,750.0 50 1,875.0

Total 13,969.0 2,899.0 4,782.0 - 21,650.0 50 10,825.0

Contingencies - Physical (5%) 698.5 144.9 239.1 - 1,082.5 50 541.3 - Price 976.7 344.8 954.0 _ 2,275.5 50 1,137.7

Total (including contingencies) 15,6244.2 3,388.7 5,975.1 _ 25,008.0 50 12,504.0

1/ Including customs duty and taxes at 140%. | 2/ Including customs duty and taxes at 140%. - 3/ Including customs duty and taxes at 100%

11/4/77 BANGLADESH

Jute Project

Extension Services - Materials and Equipment

Cost Estimates (TK'000)

------Schedule of Expenditure------Foreign Exchange Unit ---Year 1------Year 2------Year 3------Year 4------Year 5---- Cost aTK'000 Units Cost Units Cost Units Cost Units Cost Units Cost Units Cost (Year 1-5) I/ 1. Trials/Demonstrations 2,500 150 1,500 225.00 1625 243.75 2,000 300.00 2,500 375.00 2,500 375.00 1,518.75 30 456.0 2. Extension Materials 120.00 128.00 158.00 197.00. 197.00 800.00 50 Anf.o

Total (1+2) 345.00 371.75 458.00 572.00 572.00 2,318.75 37- 856.0 Contingencies: Physical(5%) 17.25 18.58 22.90 28.60 28.60 115.93 40 46.0 Price 27.16 42.93 91.37 168.16 228.22 557.84 40 223.0

Total (with contingencies) 389.41 433.26 572.27 768.76 828.82 2,992.52 38 1125.0

1/ Estimated on the basis of use of a recommended dose of following inputs: seeds, fertilizers, X pestices and hired labor.

3/27/77 BANGL'ADESH

JUTE PROJECT

Technical Assistance Cost Estimates (TK 000)

Period Estimated Schedule of Expenditures Total Fee Foreign Exchange (months) Fee/Month Year 1 Year 2 Year 3 Year 4 Year 5 (Years 1-5) _ TK 000 A. Directorate of Agriculture (Jute)

1. Project Adviser 1/ 24 75.0 450.0 900.0 450.0 ^ - 1,800.00 100 1,800.00 2. Marketing Specialist 2/ 24 75.0 900.0 450.0 450.00 - 1,800.00 100 1.800O. Subtotal 450.0 1,800.0 900.00 450.00 - 3,600.00 100 3,600.00

B. Overseas Training

1. Market Officers (2) 3/ 3 97.75 75 2. Project Director (1) 957.50 80 1578.0 3/ 3 4978.7U5 48.7 95 3. Bank Staff (2) 3/ 80 156.0 1 67.5 97.5 125.0 4. Farmers (20) 3/ 80 1520.0 1.5 637.5 637.5 1275.0 80 1,204.0 5. Project Officers (4) 3/ 1.5 122.5 17..5 80 204.0 Subtotal 1,008.75 1,008.75 2,017.5 80 1,614.0 C. Monitoring Services 4/ 262.5 525.0 525.0 525.0 525.0 2,362.5 _ Subtotal 262.5 525.0 525.0 525.0 525.0 _,362.5 Total 712.50 3,333.75 2,433.25 975.0 525.0 7,980.0 65 5,214.0 Contingencies - Physical (5%) 35.63 166.68 121.69 48.75 26.25 399.0 65 261.0 - Price 561 44.9 -50 35.2 189o2 1.o.71 1,o69.o Total (includingcontingencies) 804.23 J.92k35 3,o20.52 1.375.00 740.27 9,855.37 66a_ 6.-41-h-

1/ Allowing half of the annual costs in the years 1 and 4. 2/ Allowing full annual costs in the years 2, 3 and 4 and half in year 5. 3/ Allowing daily subsistence costs at US$50.00 plus a sum of US$2,000.00 towards air travel f or each. Allowing a lump sum eiaal to US$35,000/year.

Nwovber 4, 1977

July 15, 1977 ANNEX 9 Table 11

BANGLADESH

Jute Project

Percentages Used in Calculating Price Contingencies

Year Civil Works Equipment Staff Salaries

1977 9.0 7.5 6.0

1978 9.0 7.5 6.0

1979 9.0 7.5 6.0

1980 8.0 7.0 6.0

1981 8.0 7.0 6.0

March 30, 1977 BANGLADESH

JUTE PROJECT

Crop Production Costs and Returns

Jute Production Costs (Per Acre)

Non-IJCS--- IJCS at Present- IJCS Future with Project2/ Yield - 14.5 Maunds/Acre Yield - 22 Maunds/Acre Yields 25 Maunds/Acre

Item Amount Unit Price Total Cost Amount Unit Price Total Cost Amount Total Cost Tk Tk Tk Tk Tk Seeds 5 seers 8.00 (7.00) 40.00 (35.00) 4 seers 3.50 (7.00) 14.00 (28.00) 4 seers 14.00 (28.00) Urea 11 " 1.50 (2.75) 16.50 (30.25) 28 " 1.50 (2.75) 42.00 (77.00) 45 " 67.50 (123.75) TSP 5 1.20 (3.10) 6.00 (15.50) 10 1.20 (3.10) 12.00 (31.00) 11 " 13.20 (34.10) MP 3 " 1.00 (2.10) 3.00 (6.30) 12 " 1.00 (2.10) 12.00 (25.20) 16 " 16.00 (33.60) Pesticide - 3/ - _ - 1 lb 3/16.00 (35.00) 16.00 (35.00) 2 lb 32.00 (70.00) Hired Labor 76 (127) days- 8.00 (6.00) 608.00 (762.00) 90(115)daYs 8.00 (6.00) 720.00 (690.00) 95(121)days 760.00 (726.00) Bullock Cost 19 pair days 12.00 (12.00) 228.00 (228.00) 22 pair 12.00 (12.00) 264.00 (264.00) 22 pair days 264.00 (264.00) Loan Interest - - - - - days - _ 25.00 - - 25.00

Total 901.50 (1077.05) 1105.00 (1150.20) 1191.70 (1279.45)

Production Cost Per Maund Jute 62.17 (74.28) 50.23 (52.27) 47.66 (51.12) it Per Bale (5 Maunds) 310.85 (371.40) 251.14 (261.35) 238.30 (255.60)

( ) Economic Values

1/ Source - IJCS/World Bank Survey 2/ Mission estimate. 3/ Labor requirement per acre for non-IJCS and IJCS farms is 127 and 115 man days respectively (used for economic analysis), while proportion of hired labor is 60% and 78% of total requirement respectively (used for financial analysis).

March 24, 1977 |t tbx BANGLADESH JUTE PROJECT Crop Production Costs and Returns

Financial Returns from Jute Production at Various Fiber Prices

A. TraditionalTechnology

Prices Yields -- Gross Returns --- Production Net Tk/Md Md/Acre Fiber By Product Total Cost Return Fiber By Product Fiber By Product Tk Tk Tk Tk Tk

90.00 5.00 14.5 29 1,305.00 145.00 1,450.00 901.50 548.50 75.00 5.00 14.5 29 1,087.50 145.00 1,232.50 901.50 331.00 60.00 5.00 14.5 29 870.00 145.00 1,015.00 901.50 113.50

B. IJCS at Present

90.00 5.00 22.0 44 1,980.00 220.00 2,200.00 1,105.00 1,095.00 75.00 5.00 22.0 44 1,650.00 220.00 1,870.00 1,105.00 765.00 60.00 5.00 22.0 44 1,320.00 220.00 1,540.00 1,105.00 435.00

C. IJCS Future with Project

90.00 5.00 25.0 50 2,250.00 250.00 2,500.00 1,191.70 1,308.30 75.00 5.00 25.0 50 1,875.00 250.00 2,125.00 1,191.70 933.30

60.00 5.00 25.0 50 1,500.00 250.00 1,750.00 1,191.70 558.30 H

c m

March 24, 1977 C) ANNEX 10 Table 3

BANGLADESH

JUTE PROJECT

Crop Production Costs and Returns

Costs and Returns Local Aus (Per Acre)

COSTS Cost or Item Amount Unit Price Return Tk Tk

Seeds 30 Seers 2.00 (3.00) 60.00 (90.00)

Fertilizer Small Amount - 15.00 (30.00)

Pesticide " I - 8.00 (16.00)

Hired Labor-/ 36 (60) Man clays 8.00 (6.00) 288.00 (360.00)

Bullocks 27 Pair days 12.00 (12.00) 324.00 (324.00)

Total 695.00 (820.00)

YIELD 2/ 3/ Paddy 12 Maunds 74,00 (100.00>=- 888.00 (1200.00)

Straw 20 " 3.00 ( 3.00) 60.00 ( 60.00)

RETURNS (GROSS) 948.00 (1260.00)

RETURNS (NET) 253.00 (440.00)

( ) Economic Values

1/ Labor requirement per acre is 60 man days (used for economic analysis). Proportion of hired labor is about 60% (used for financial analysis).

2/ Current GOB floor price.

3/ See Annex 10 Table 1.

Source Agro Economic Research Section, Ministry of Agriculture, GOB (modified in light of new trends).

March 24, 1977 ANNEX 10 Table 4

BANGLADESH

JUTE PROJECT

Crop ProductionCosts and Returns Improved Aus (per acre)

COSTS Cost or Item Amount Unit Price Return Tk Tk

Seed 30 Seers 3.00 (4.00) 90.00 (120.00) Urea 20 Seers 1.50 (2.75) 30.00 (55.00) TSP 15 Seers 1.20 (3.10) 18.00 (46.50) MP 4 Seers 1.00 (2.10) 4.00 (8.50) Pestic±9e - - 20.00 (40.00) Labor - 42 (70) Man days 8.00 (6.00) 336.00 (420.00) Bullocks 30 Pair days 12.00 (12.00) 360.00 (360.00)

Total 858.00 (1050.00)

YIELD 2/ 1/ Paddy 20 Maunds- 74.00 (100.00- 1480.00 (2000.00) Straw 25 Maunds 3.00 (3.00) 75.00 (75.00) Returns (Gross) 1555.00 (2075.00)

Returns (Net) 697.00 (1025.00)

( ) Economic Values

1/ Labor requirementper acre is 70 mandays (used for economic analysis) Proportion of hired labor is about 60% (used for financialanalysis). 2/ Current GOB floor price. 3/ See Annex 10, Table 1. ANNEX 11 Page 1

BANGLADESH

JUTE PROJECT

Reporting Requirements

1. A Progress report should be submitted every quarter and an annual summary at the end of the year. The objective of the reports would be to provide informationon progress with implementingproject components,com- parison of targets and achievements,and to describe the impact of the project on jute productionand marketing. Reports should reach Washingtonwithin 60 days of the close of the reporting period. The annual report should be accompaniedby:

(a) A copy of budgets and financial estimates;and

(b) The operationsplan (with quarterly targets) for the coming year.

2. While informationand statisticswould have to be provided by Sonali Bank, Jute Ministry, IRDP and other project agencies, the Directorate of Agriculture (Jute) would coordinateall data and would prepare the reports.

3. The quarterly report would consist of brief written notes and a set of tables. Suggested guidelines for these are shown in Appendix 1. Informa- tion need not be confined to that suggested in the guidelines and anything consideredworth reporting should be included. The reporting format may be modified as necessary at any time by mutual agreementbetween GOB and IDA. The same format should be used for the annual report.

4. Written notes should be brief and should deal with progress made, problems encountered,and action taken to overcome the problems.

5. Tables are designed to give progresive informationon meeting both physical and financial targets. Where physical informationhas not been requested in tables (e.g. for technical assistance,extension and research materials and equipment),it should be described in written notes.

6. The key indicators listed in the tables will also be used by the supervisionmissions to assess the progress in implementation. ANNEX 11 Appendix I Page 1

BANGLADESH

JUTE PROJECT

Guideline for Headings and Contents for the Quarterly Report

1. General. Give brief summary of physical and financial progress with implementingthe project during the quarter and progress with improving jute production and marketing. (Tables 1-4). Highlight major problems encountered,action taken or planned to overcome them, and progress with solving major problems previously reported.

2. Progress with Project Components. Compare actual progress with original targets and comment on changes made or planned. Where appropriate, point out changes in costs and proposals for dealing with such changes.

(a) Credit - Comment on demand distribution,utilization and recovery (Tables 4-6) and changes in loan conditions proposed.

(b) IncrementalExtension Staff - Vacancies,recruitment, training,posting, delays and difficulties,if any. (Table 7)

(c) Construction

(i) JEA Houses

(ii) Jute Stores (includingbaling presses)

Describe appointmentof consultants,status of designs, site selection and purchase, prequali- fications,tenders for procuring materials and constructionprogress. Explain delays and changes if any. (Tables 2, and 8 to 10)

(d) Vehicles

(e) Implements

(f) Office Furniture and Equipment (g) Extension Equipment

Describe status of procurement,including opening of Letters of Credit where appropriate.(Tables 2 and 11) ANNEX 11 Appendix 1 Page 2

(h) Field Demonstrationscnd Trials

Comment on number established,cost and give brief summary of results.

(i) Technical Assistance

(i) Consultants to DAJ (Recruitmentappointment, problems if any);

(ii) Consultants to Milistry of Jute (as 9 (i));

(iii) Overseas Training (Planning,arrangements made, training completed,evaluation); and

(iv) Monitoring (Appointmentof consultants,progress).

3. Financing,Disbursement, and Credit Withdrawals. Comment on expenditure for past quarter, give budget for coming quarter and approximate forecast for 12 months expenditure. Comment on status of revolving funds and progress with IDA credit withdrawals.

4. Organizationand Management

(a) Coordination

(i) National

(ii) Zonal

Comment on effectiveness,number of meetings and importantdecisions made.

(b) Project Agencies. (Project ExecutingAgencies - DAJ, Sonali Bank, Jute Ministry, JFA, and IRDP). (Supporting Agencies - BJRI, Jute Seeds Directorate,BADC, Plant ProtectionDirectorate).

Describe organizationard managementproblems encountered if any and steps taken cr planned to solve them. Describe development (e.g., opening new DAJ offices, Sonali Bank branches), staff performanceand effectiveness,reorganization planned or carried out and results).

5. Project Performance

(a) Jute Production (Table 3)

Briefly describe progress in implementingthe annual plan and comment on effectiveiissof extension,inputs and credit ANNEX I 1 Appendix I Page 3

services; (if not already covered by earlier section.); farmers' participationand adoption of improved practices; new technology; impact of climate, pests, diseases and prices on production;and compare yields and production (or forecasts)with non project conditions.

(b) Jute Marketing (Table 4,4a and 4b)

Describe status of design and constructionof marketing facilities (if not described before), and organization of jute marketing under the project. Comment on farmers' participation,quantity of jute marketed, marketing costs, share of costs paid by farmers, organizationof jute sales, prices receive by DAJ or IRDP and by participating farmers compared to those of traders and farmers using traditional channels; describe problems overcome and remaining and actions and changes planned.

(c) Government Jute Corporations

Forward Consultantsreports and describe progress in restructuringthe Corporations.

(d) Monitoring

Forward copies of monitoring reports. Comment on findings.

(e) Jute and Paddy Pricing Mechanism

Describe progress in establishingpricing mechanism. BANGLADESH

JUTE PROJECT

Report for Quarter Ending_ _

Credit Withdrawals

______- - - -T K ' 0 0 0…------Expenditure Withdrawal Claims Estimated Project Disburse- Incurred Submitted Expenditure for ,ategory ment (%) a c a b c Next 12 Months

a - Total at end of last quarter; b - This quarter; c -Total to date.

r r. ANNEX 11 BANGLADESH Appendix 1 BANGLADESH ~~~Table2 JUTE PROJECT

Report for Quarter Ending_

Project ImplementationSummary

Target Achievement End Last Quarter During Total Project This To This This This To Item Total Year Date Year Total Quarter Year Date

A. Physical Information

No. Seed Drills ITo.Eand Hoes No. Sprayers No. JEA Houses Sets Office Furniture No. Typewriters No. Calculators No. Jeeps No. Bicycles No. Jute Stores No. Baling Presses Others:_

B..Disbursement(TKs'OOO)

Seed Drills Hand Hoes Extension Equipment ExtensionMaterials Office Furniture Extension Staff 1/ Typewriters Calculators Jeeps Motor Cycles Bicycles Baling Presses Jute Stores Loans for Production2/ Loans for Marketing 2/ Overseas Training Consultants Monitoring Others:_

1/ Incremental since July 1977 1/ Incrementalto July 1977 level ANNEX 11 Appendix 1 BANGLADESH Table 3

JlU'EPROJECT

Report for Quarter Ending_

Jute Production Information

1977 1978 1979 1980 1981 1982

Farmers (No.)

Jute Farmers Associations (No.) Participating Farmers (No.)

Area Covered (Acres)

Olitorius sown (Acres) Capsularis sown (Acres) Total jute sown

Line sowing (Acres) Fertilized (Acres) Plant protection (Acres)

Quantities (Tons)

Fertilizer used (Tons) Insecticide used (Tons) Improved seed used (Tons)

Production Olitorius (Tons) Production Capsularis (Tons) Total jute (Tons)

Yield (Mds/Acre):

Olitorius Capsularis All jute

Equipment (No.):

Drills in stock Hand hoes in stock Spray pumps in stock

Drills used Hand hoes used Spray pumps used ANNEX 1 Appendix 1 BANGLADESH Table 4 Page 1 JUTE PROJECT

Report for Quarter Ending _

Jute Marketing

1978 1979 1980 1981 1982

A. Physical Information

No. Stores Operated

By IJCS By IRDP Total

No. Baling Presses Operated

By IJCS By IRDP Total

No. Associations

JFA KSS/JFA Total

No. Farmers Participants

Through IJCS Through IRDP Total

Jute Delivered Mds

To IJCS Stores To IRDP Stores Total

Loose Jute Sold Mds

By IJCS Stores By IRDP Stores Total

Baled Jute Sold Mds

By IJCS Stores By IRDP Stores Total ANNEX 114 Appendix 1 Table 4 Page 2

1978 1979 1980 1981 1982

Total Jute Sold Mds

By IJCS By IRDP Total

Financial Information

Price of Loose Jute TR/Md

Sold by IJCS Sold by IRDP Average

Price of Baled Jute TK/Md

Sold by IJCS Sold by IRDP Average

Average Price of Jute TK/Md

3u1d by 13CI Sold by IRDP Overall Average

Price Paid to Farmers TK/Md

By IJCS By IRDP Average

Revenue Received by IJCS TK'000

Fees from Farmers Rent from IRDP Total

Expenditure by IJCS TK'000

For Operating Stores On Rented Stores Total

Operational Surplus/Deficit TK'000 ANNEX 11 Appendix 1 Table 4a BANGLADESH

JUTE PROJECT

Report for Quarter Ending_

Consolidated Jute Marketing Income and Expenditure (IJCS)

1978 1979 1980 1981 1982

Jute Sold (Mds)

Revenue (TKs'000):

Fees Other Total

Expenditure (TKs'000):

Rent/Amortization Staff and Establishment Contract or Casual Labor Spares and Repairs Materials Transport Insurance Interest Charges Other Expenditure Total

Surplus/(Deficit) ANNEX 11 BANGLADESH Appendix 1 Table 4b JUTE PROJECT

Report for Quarter Ending

ConsolidatedJute Marketing Income and Expenditure (IRDP)

1978 1979 1980 1981 1982 Jute Sold (Mds)

Revenue (TKs'000):

Fees Other Total

Expenditure(TKs'000):

Rent/Amortization Staff and Establishment Contractor Casual Labor Spares and Repairs Materials Transport Insurance InterestCharges Other Expenditure Total

Surp].us/(Deficit) ANNEX 11 Appendix 1 Table 5

BANGLADESH

JUTE PROJECT

Report for Quarter Ending

Short Term Credit - Physical Information

Target Achievement This Year Increase Original Revised End Total Total over Last This Last This Last Last This To Since 1977 Year Year Year Year 1977 Year Quarter Quarter Date 1977 Level

A. Loans Through Directorate of Agriculture

1. Fertilizer Loans

No. Associations No. Farmers Tons Fertilizer distributed Acres benefitted

2. Cash Loans

No. Associations No. Farmers Acres benefitted

3. Marketing Loans

No. Associations No. Farmers Tons Jute Financed

B. Loans Through IRDP

4. Fertilizer Loans

No. KSS/JFA No. Farmers Tons Fertilizer distributed Acres benefitted

5. Cash Loans

No. KSS/JFA No. Farmers Acres benefitted

6. Marketing Loans

No. KSS/JFA No. Farmers Tons Jute Financed

C. Total Loans

7. Fertilizer Loans

No. Farmers Tons Fertilizer distributed Acres benefitted

8. Cash Loans

No. Farmers Acres benefitted

9. Marketing Loans

No. Farmers Tons Jute Financed ANNEX 11 BANGLADESH Appendix 1 JUTE PROJECT Table 6a Report for Quarter Ending_ Short Term Credit - Financial Information Credit Through Directorate of Agriculture

TK'000 Target Achievement Original Revised This Year Last This Last This Last End Last This Total To Date Incremental Year Year Year Year 1977 Year Quarter Quarter To Date Since 1977

Loan Commitment For: