Document of The World Bank FOR OFFICIAL USE ONLY FL o0 y Public Disclosure Authorized Report No. 1835a-IN INDIA Public Disclosure Authorized STAFF PROJECT REPORT APPRAISAL OF THE KARNATAKAIRRIGATION PROJECT Public Disclosure Authorized March 15, 1978 Public Disclosure Authorized South Asia Projects Department Agriculture Division C This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS US$1.00 = Rupees (Rs) 8.60 1/ WEIGHTS AND MEASURES (METRICSYSTEM) 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) 3 - 2.47 acres (ac) I million cubic meters (Mm ) = 810 acre-feet (ac-ft) 1 thousand million cubic 3 feet (TMC) = 28.32 Mm I cubic foot per second 3 (cusec) = 0.0283m /s 1 liter per hectare (1/ha) = 14 ft /1,000 ac I ton = 1,000 kilograms (kg) 2,205 pounds 1/ Until September 24, 1975, the Rupee was officially valued at a fixed Pound Sterling rate. Since then it has been fixed against a "basket" of currencies. As these currencies are floating, the US Dollar/Rupee exchange rate is subject to change. Conversions in this report have been made at US$1 to Rs 8.60. FOR OFFICIAL USE ONLY INDIA APPRAISAL OF THE KARNATAKAIRRIGATION PROJECT Table of Contents Page No. I. BACKGROUND...................................... 1............ Agriculture in India ...... ......................... 1 Irrigation in India .............................................2 Agriculture and Irrigation in Karnataka ............ 2 Project Formulation .......... ............................... 4 II. THE PROJECT AREAS .......................................4 A. Upper Krishna Scheme ............................... 4 General ................................................... 4 Climate ............................................ 5 Topography............................. ................. 5 soils .................................................... 5 Farm Size and Land Tenure .......................... 6 Present Agricultural Situation ..................... 7 Agricultural Supporting Services ................... 8 Agricultural Inputs . ..................... .. ....... 9 Agricultural Credit ................................ 9 Marketing, Processing and Storage ..... 0. ............ 10 Transportation. ..................- .... 11 B. Ghataprabha and Malaprabha Schemes ... oooo ...... 11 Ghataprabha Scheme .... o ......-.......-.......... 11 Malaprabha Scheme _-... .. ... .o. .. .... .. 11 III. THE PROJECT o .......................o - -..... oo.......oo ....o..... o. 12 Main Project Features . -... o. .- . ...ooo .... .... 12 Almatti and Narayanpur Dams ...o ..... ........... -- 14 Water Supply, Demand and Quality .......... 16 Major Irrigation, Drainage and Road Systems ... .... 16 Field Channels and On-farm Works ................... 20 Agricultural Development and Training .,ooo...... ... 22 This report is based on the findings of a Bank mission which visited India in September 1977, comprised of Messrs. C.J.R. Bridge, P. Ljung, W.A. van Tuijl and Ms. R. Deen (Bank); Messrs. A. Gibbs, A. Plummer and P. Borrowman (Consultants) and J.P. Baudelaire (FAO/World Bank Cooperative Programme). This document hasa restricteddistribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. - ii - Table of Contents (Cont'd) Page No. Implementation Schedule ............................ 22 Project Monitoring and Evaluation ................ .. 23 Cost Estimates ...............................................24 Financing .......................................... 24 Procurement ...... .................................. 26 Disbursements . ...................................... 27 Account and Audits ................................ 28 Environmental Effects of the Project ..... 28 IV. ORGANIZATION AND MANAGEMENT ................. 28 General. 28 Irrigation Department . .. 28 Command Area Development Authority (CADA) . 29 Field Channels and On-farm Works . .30 Agricultural Supporting Services . .. 31 Operation and Maintenance . .32 V. PRODUCTION, PRICES, FARM INCOMES AND COST RECOVERY 33 Agricultural Production..... 33 Financial Prices ....... 35 Farm Incomes ... ........ 36 Cost Recovery ....... 37 VI. BENEFITS, JUSTIFICATION AND RISKS. 39 General ... 39 Employment Effects .... 39 IncomeEffects . ........ 40 Basic Assumptions for Economic Analysis .... 40 Economic Evaluation of UKS... 43 Evaluation of Design Alternatives for UKS .... 43 Economic Evaluation of Field Channels and On-Farm Development in Ghataprabha and Malaprabha .... 44 Sensitivity Analyses and Project Risk ... 45 VII. AGREEMENTS REACHED AND RECOMMENDATIONS . ......... 46 iii LIST OF ANNEXES Annex 1 SupportingTables and Charts T-1 ClimatologicalFactors Relating to Estimation of Crop Water Requirements (at Raichur) T-2 Salient Features of Almatti and Narayanpur Dams T-3 Summary of Irrigation Water Requirements T-4 Cost Estimates T-5 Equipment and Services for Implementation,Operation and Maintenance and Project Monitoring (Cost Estimates) T-6 Cost Estimates of CADA Organization T-7 Cost Estimates of AgriculturalSupporting Services T-8 Schedule of Expenditures T-9 Proposed Allocation of the Credit T-10 Estimated Schedule of Disbursements T-11 Annual Expenditure Schedule for UKS T-12 OrganizationalRequirements T-13 Financial Crop Budget at Full Development T-14 Crop Input Requirements T-15 Farm Budget for 1.5 ha Farm T-16 Farm Budget for 4.0 ha Farm T-17 Farm Budget for 10.0 ha Farm T-18 Cost Recovery T-19 Estimates of Project Rent T-20 Schedule of Critical Events C-1 ImplementationSchedule for Upper Krishna Scheme C-2 OrganizationChart: Upper Krishna Scheme Constructionin 1980/81 C-3 OrganizationChart: Command Area Development 1981/82 C-4 OrganizationChart: Operation and Maintenance of Upper Krishna Scheme Annex 2 Related Documents and Data Available in the Project File List of Maps IBRD 13043R Project Location IBRD 13044R Project Area IBRD 13199 Typical Outlet Command Layout INDIA KARNATAKA IRRIGATION PROJECT I. BACKGROUND 1.01 Karnataka, located in the southern part of India, has one of the lowest levels of irrigation in India. Large parts of the State are located in the drought prone rain shadow of the Western Ghats characterized by low and unreliable rainfall. As irrigation is essential to improve agricultural productivity, the Government of Karnataka (GOK) is giving high priority to the development of surface water resources, particularly in drought prone areas of the State. Since the late 1940s, GOK has systematically developed the Upper Krishna Basin and so far developed 350,000 ha out of a potential of 1.6-2.0 M ha. In accordance with its irrigation development policy and to expedite exploitation of the Basin, GOK, with assistance from the FAO/World Bank Cooperative Programme, prepared and submitted to IDA in March 1977, a request for assistance in financing the Upper Krishna Scheme (UKS). Agriculture in India 1.02 India covers some 3.27 M km of which 49% is cultivable and about 11% irrigated. India's population of about 630 M is growing at an annual rate of 2.3%. National income has grown at nearly 4% per annum since 1950, and the per capita GNP reached US$150 in 1975. Although average per capita income has increased, in general there has been little change in the living standards of the vast masses of urban and rural poor, which--conservatively measured--consist of some 250 M people with incomes below the poverty line of US$70 per capita per year. Thus, the Government of India's (GOI's) devel- opment plans give priority to alleviating poverty and creating employment, especially in rural areas. 1.03 Agriculture is the dominant sector of the Indian economy and con- tributes about 45% of GNP. It engages about 70% of the labor force and pro- vides the base for about 60% of India's exports. During the last decade, GOI development plans have emphasized agriculture and sought to raise foodgrain production by increasing the use of fertilizers, plant protection chemicals, and improved seed varieties. In support of this, GOI has modernized and ex- panded its agricultural credit institutions and accelerated the development of irrigation. 1.04 Despite these endeavors and the impressive results of the green revolution in some areas--primarily the wheat growing northwestern states-- the annual overall growth rate in foodgrain production over the last 15 years has been only about 2.3% or approximately equal to the population growth. Furthermore, India's agriculture remains heavily dependent upon the vagaries of weather, and foodgrain production can vary as much as 20% from one year to another. Major factors in reducing this dependence would be the expansion of irrigation and the improvement of existing irrigation facilities. -2- Irrigation in India 1.05 Up to 1964/65, irrigated area increased at a rate of only about 2.1% per year, of which approximately two-thirds was from surface water resources and one-third from groundwater. Since then, the rate of increase has about doubled, mainly through an accelerated program of groundwater development. At present, the irrigated area is 45 M ha about three-fifths of which is surface irrigated and two-fifths groundwater irrigated. 1.06 The pace of surface water development remained relatively constant at about 0.5 M ha per year until the end of the Fourth Plan (1969/70 - 1973/74). During this period,