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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 mar- keting scheme aimed at improving marketing efficiency and increasing farm gate prices. ii. Jute is Bangladesh's most important cash crop. It is grown by al- most 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,
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