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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 5834a-NEP Public Disclosure Authorized STAFF APPRAISAL REPORT NEPAL RASUIWA-NUWAKOTRURAL DEVELOPMENT PROJECT - PHASE II (RASNUDEV) Public Disclosure Authorized June 20, 1986 Public Disclosure Authorized South Asia Projects Department General AgricultureDivision II This document has sk restricted distribution gandmay be used by recipients only in the performance of their official duties. Its contents mnaynot otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Nepalese Rupees (NRs) US$ 1.00 = NRs 18.0 NRs 1.00 = USS 0.056 (approx.) NRs 1 M = USS 55,555 WEICHTS AND MEASURES Metric System Fiscal year July 16 - July 15 ABBREVIATIONS AND ACRONYMS AA - Agricultural Assistant AADO - Assistant Agricultural Development Officer ADBN - Agricultural Development Bank, Nepal ADB - Asian Development Bank (Manila) ADO - Agricultural Development Officer AHW - Animal Health L4orker AIC - Agricultural Input Corporation APROSC - Agricultural Projects Services Center ARU - Adaptive Research Unit ASC - Agricultural Service Center ATU - Appropriate Technology Unit CDO - Chief District Officer DADO - District Agricultural Development Office DAP - District Annual Plan DDG - Deputy Director General DFO - District Forest Officer DC - Director General DIHM - Department of Irrigation, Hydrology & Metereology DLAH - Department of Livestock Development & Animal Health DOA - Department of Agriculture DP - District Panchayat DTO - District Technical Office FAO/CP - Food and Agricultural Organization/CooperaiveProgram HMG/N - His Majesty's Goverment of Nepal IAAS - Institute of Agricultural & Animal Science ICP - Integrated Cereals Project IDA - International Development Association IPDD - Integrated Panchayat Development Design IRDB - Integrated Rural Development Board IRDP - Integrated Rural Development Project JT - Junior Technican JTA - Junior Technical Assistant FOR OMCIAL USE ONLY LDO - Local Deveopment Officer LHF - Leasehold Forest MOA - Ministry of Agriculture MPLD - Ministry of Panchayat & Local Development NPC - National Planning Commission PC - Project Coordinator PCO - Project Cordinator's Office PDO - Panchayat Development Officer PF - Panchayat Forests P0 - Production Officer PPF - Panchayat Protected Forests RDI - Rural Development Project I RTC - Regional Training Centre, Trishuli SFDP - Small Farmers Development Programme SMS - Subject Matter Specialists SPO - Sub-Project Office (SFDP) TA - Technical Assistance T&V - Training & Visit System (of Extension) UG - Users Group UNDP - United Nations Development Programme VP - Village Panchayat VSO - Voluntary Services Organization IVS - International Voluntary Services WUG - Water User Group I Thi document has a restrkced distribution and may be used by recipientsonly in the performance of their oficil duties. Its contents may not otherwise be disclosedwithout World Bankauthori2tion. NEPAL RASUWA-NUWAKOTRURAL DEVELOPMENT PROJECT - PHASE II (RASNUDEVII) Credit and Projezt Summary Borrower: His Majesty's Government of Nepal (HMG/N) Executing Agency: Ministry of Panchayat and Local Development (MPLD) Amount: SDR 16.6 Million (US$19.1 M equivalent) Terms: Standard Project The proposed project is the second phase of the IDA Description: financed Rural Development Project (Credit 617-NEP) covering the Rasuwa & Nuwakot districts in the Central DevelopmentRegion of Nepal, which was completed in June 1984. The proposed project would aim: (a) to consolidate the investmentsmade during the earlier phase of develop- ment by making all physical facilities fully operational, and by improving the qualities and coverage of agricul- tural support services and the services of the institu- tions responsible for rural infrastructure development and maintenance; (b) to further improve the agricultural production base and the socio-economic infrastructure (roads, bridges, drinking water); (c) to expand forestry plantation and soil conservation programs; and (d) to promote developmentof effective local level planning and implementationof rural development projects. The project would be implemented over an eight year period and at full development would benefit some 20,000 farm families and generate incremental annual production of 22,000 Mt of foodgrains, 0.8 M litres of milk, 0.6 M3 of fuelwood, and some 250 tons of tropical and sub-tropical fruits, apart from additional sustained employment equivalent to about 5000 manyears annually. Unquantified benefits would also accrue from the development of rural infrastructure,forestry and soil conservation works, and human resource and institutionaldevelopment. The project does not face any unusual technical or engineering risks. It would be implemented under a more stable administrativeenvironment as a result of HEG/N's commitment to the implementationof new administrative arrangements for decentralized rural development planning and implementation. Nevertheless, organizati4)nal,staffing and local funding problems could conceivably affec. timely implementation. These risks, however, would be partly offset by the strong implementationsupport, technical assistance, and staff development provided under the project, and by the fact that the project is focussed on selected activities for which experience was gained under the first phase development program. Estimated Cost: 1/ (US$ Million) Local Foreign Total Extension, Training and Research, Farms and ATU 2.1 0.6 2.7 I rigatio0 2.4 1.2 3.6 Agricultural Cre-1it 0.6 0.0 0.6 Agricultural Inputs 0.2 1.0 1.2 Livestock Development 0.7 0.2 0.9 Rural Infrastructure 1.5 0.9 2.4 Forestry 1.7 0.1 1.8 SoiL Conservation 0.5 0.2 0.7 ImpLementation Support & Institutional DeveLopment 1.5 0.7 2.2 Technical Assistance, Overseas training and studies 0.2 1.6 1.8 Total Base Costs 11.4 6.5 17.9 Physical Contingencies 0.5 0.4 0.9 Price Contingencies 2.9 1.8 4.7 Total Project Costs 14.8 8.7 23.5 Financing Plan: US$ Milli^n IDA UNDP HMGIN Total Local Costs 11.0 0.5 3.3 14.8 Foreign Costs 8.1 .6 - 8.7 TOTAL 19.1 1.1 3.3 1/ 23.5 Z 81.0 5.0 14.0 100.0 Estimated Disbursements: 21 (US$ Million) FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 Annual 1.0 1.8 2.0 2.5 3.0 3.7 3.5 1.7 Cumulative 1.0 2.8 4.8 7.3 10.3 14.0 17.4 19.1 Z 5.0 15.0 25.0 38.0 54.0 73.0 91.0 100.0 Economic Rate of Return: 21Z 31 1/ Including taxes and duties of US$0.2 h (approximately). 2/ According to IDA Fiscal Year. Credit closing date 12/31/93. 3/ With 85Z of project costs (excluding price contingencies) included as economic costs. -ii-' Table of Contents (continuation) Page No. VII. PRODUCTION. YIELDS. FARM INCOME AND COST RECOVERY............ 45 Sources of Increased Production 45 Farm Budget Analysisn.. .... ............ * ** 48 Marketing and Prices. .......... 49 VIII. BENEFITS, ECONOMIC RATE OF RETURN AND RISKS.................. 50 Overall Benefitsn e f i ts............ 50 Economic Analysis. 51 Project Risks and Sensitivity Analysis . .52 IX. CONDITIONALITIESAND ASSURANCES. 54 List of Tables in Text 3.01 - Major Cropping Systemsy s ...t e .... ms......... 14 3.02 - Yield and Production of Major Crops . .14 5.01 - Stmmary of Project Costs .. 32 5.02 - Proposed Financing Plan . .33 5.03 - Procurement Arrangements .. 35 7.01 - Present and Projected Yields per ha . .46 7.02 - Overall Incremental Crop Production. 47 7.03 - Per Ha and Total Incremental Production of Forestry Produce. 48 7.04 - Farm Budget for a Typical 0.8 ha Farm . .49 8.01 - Economic Analysis and Sensitivity Tests .. 54 List of Table in Annexes Annex 1, Table 1 - Land use in Project Area Table 2 - Land use by PhysiographicRegion & Land Type Table 3 - Present Cropping Pattern & Land Use in Nuwakot District Table 4 - Present Cropping Pattern & Land Use in Rasuwa District Table 5 - Present Cropped Area. Yield & Production in the Project Area Annex 2. Table 1 - Phasing of Crop Development Program Table 2 - Training Programs for Extension Staff & Farmers Table 3 - On-farm Adaptive Research Table 4 - Appropriate Technology Unit Table 5 - Technical Assistance, Overseas Training & Studies NEPAL RASUWA-NUWAKOTRURAL DEVELOPMENT PROJECT - PHASE II (RASNUDEVII) STAFF APPRAISAL REPORT Table of Contents Page No. I. INTRODUCTION........... .....................................1 II. SECTORBACKGROUND. 1 The Agricultural Settin. 1 Agricultural and Rural Development Strategy. 5 IDA Sector Lending Strategy. 7 Review of Implentationof IDA Assisted Rural Development Projects. 8 Implication for Future Projects. 9 Rationale for a Second Phase of the RD I Project.10 III. THE PROJECT AREA.11 General.11 Present Land Use and Crop Production.12 IV. THE PROJECT.15 Ceneral.15 Summary of Project Components.16 Detailed Features.17 AgriculturalDevelopment .17 Forestry, Soil Conservation and Watershed Management.... 25 Rural InfrastructureDevelopment .28 InstitutionalDevelopment and ImplementationSupport.... 30 Technical Assistance, Overseas Training and Studies. 30 V. PROJECT COSTS, FINANCING, PROCURMENT, DISBURSEMENT, FISCAL IMPACT AND COST RECOVERY.31 Project Costs and Financing.31 Procurement.34 Disbursements.37 Fiscal Impact and Cost Recovery.38 VI. PROJECT ORGANIZATION& IMPLEMENTATION.40 Broad Framework.40 The Project Coordinator'sOffice .40 Reorganizationof the DTO.42 Village Panchayats and Users' Groups.42 Trained Manpower and Project Staffing.42 Staff Development.44 Monitoring and Reporting.44 Status of Preparation. 45 -ii i- Annex 3, Table 1 - Summary of Project Costs (by categories of expenditure) Table 2 - Summary
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