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Document of The World Bank Public Disclosure Authorized Report No. 13888-IN STAFF APPRAISAL REPORT INDIA Public Disclosure Authorized ASSAM RURAL INFRASTRUCTURE AND AGRICULTURAL SERVICES PROJECT APRIL 26, 1995 Public Disclosure Authorized Agriculture and Water Operations Division Country Department II Public Disclosure Authorized South Asia Region CURRENCY EOUIVALENTS US$ 1 = Rupees (Rs) 31.4 (December 1994) FISCAL YEAR GOI, State - April 1 to March 31 WEIGHTS AND MEASURES The metric system is used throughout the report LIST OF ABBREVIATIONS AND ACRONYMS Assam Agro-Industries Development Corporation Assam Council for Technology, Science and Environment Agricultural Development Project Agricultural Extension Officer Animal Husbandry and Veterinary Department Artificial Insemination Agricultural Production Commissioner Assam State Agricultural University Assam Seed Corporation Assam State Electricity Board Agricultural Strategy Paper Assam State Seed Certification Agency Country Assistance Strategy Central Ground Water Board Department of Agriculture District Rural Development Agency Deep Tube Wells Economic Rate of Return Fish Farmers Development Agency Field Management Committee Farming Systems Research Field Trial Station Gross Domestic Product Government of Assam Government of India Government of Tamil Nadu Gaon Panchayat Samabay Samathi High Yielding Varieties Indian Council for Agricultural Research International Competitive Bidding Intensive Cattle Development Project Irrigation Department Integrated Rural Development Project Million Monitoring and Evaluation Ministry of Agriculture Memorandum of Understanding MTR Mid-Term Review NAEP National Agricultural Extension Project NCB National Competitive Bidding NEC North East Council NGO Non Government Organization NPW Net Present Worth PCC Project Coordination Committee PD Project Director PGC Project Guidance Committee PIU Project Implementation Unit PM Policy Matrix PWD Public Works Department RGVN Rashtriya Grameen Vikas Nidhi RIASP Rural Infrastructure and Agricultural Services Project Rs Rupees SMS Subject Matter specialist SOE Statement of Expenditure STATFED Assam State Cooperative Marketing and Consumers' Federation Limited STW Shallow Tube Well T&V Training and Visit VIA Village Livestock Agencies VLEW Village Level Extension Worker WUA Water Users Association GLOSSARY KHARIF Monsoon season RABI Drier, winter season SALI Post winter season Beel Large body of water The report is based on the findings of IBRD/IDA Appraisal mission which visited the project area October/November 1994. The mission consisted of Messrs. G. Mukami (Task manager), E. Betubiza, A. Venkataraman, K. Venkataraman, C. Nawathe, R. Zweig (Bank); K. Deveraj, G. Kaushik, K. Palanisami (Consultants). Assistance was also provided by Peer Reviewers: Messrs. M. Macklin, S. Oliver and W. Price. The report is endorsed by Mr. H. Vergin, Director, SA2 and Mr. S. Barghouti, Division Chief, SA2AW. INDIA ASSAM RURAL INFRASTRUCTURE AND AGRICULTURAL SERVICES PROJECT Table of Contents CREDIT AND PROJECT SUMMARY I. BACKGROUND ... 1 The Economy and Agriculture of India . 1 Major Issues Affecting Agricultural Performance . 2 The GOI's Agricultural Strategy . 2 The State of Assam . 3 Agriculture in Assam: Constraints and Potential . 3 The Bank's Approach to Agriculture in Assam . 5 World Bank Support . 5 Lessons from Previous Bank Involvement . 6 Rationale for Bank Involvement. 6 II. THE PROJECT . 7 Project Origin and Concept . 7 Project Objectives . 7 Project Description . 8 Detailed Features of Investment Proposals . 10 Project Costs and Financing . 16 Procurement ....... .. .. .. ... .. .. .. .. ... 18 Retroactive Financing and Special Account . 21 Accounts and Audit .... 21 III. PROJECT IMPLEMENTATION .... 22 Project Management Approach . 22 Beneficiary and NGO Participation .... 23 Project Organization and Management . 24 Planning Procedure . 27 Budgeting ....... ... .. ... .. ... .. ... .. 27 Monitoring and Evaluation .... .. 28 Reporting, Mid-Term Review, and Project Implementation Report . 28 Project Supervision ..... .. .. .. .. .. 29 IV. PROJECT BENEFITS AND JUSTIFICATION .29 Economic Analysis .31 Environmental Impact .33 Impact on Women . 33 Cost Recovery .34 Sustainability .35 Risks .35 V. AGREEMENTS AND RECOMMENDATIONS ... 36 LIST OF ANNEXES Annex 1: General Features of Assam Annex 2: GOA Policy Letter and Matrix Annex 3: Rural Roads Attachment 1--Terms of Reference for Consultants for Contract Supervision Attachment 2--Terms of Reference for Technical Assistance for Planning and Detailed Engineering Attachment 3--Criteria for Ranking Rural Roads Annex 4: Studies Attachment 1--Terms of Reference for Soils and Water Management Study Attachment 2--Terms of Reference for Marketing of High-Value Crops Study Annex 5: Cost Tables Table 1--Components Project Cost Summary Table 2--Project Components by Year--Base Costs Table 3--Project Components by Year--Total including Contingencies Table 4--Expenditure Accounts Project Cost Summary Table 5--Expenditure Accounts by Components--Base Costs Table 6--Expenditure Accounts by Components--Totals including Contingencies Detailed Cost Tables (8) Annex 6: Disbursement Schedule Annex 7: Proiect ManaQement Attachment 1--GOA Administrative Arrangement Attachment 2--Proposed Organization Chart Anniex 8: Beneficiary and NGO Participation Attachment 1--Indicative List of Activities/Issues to be Addressed in Consultative Planning Attachment 2--List of Active NGOs in Assam Attachment 3--Proposed Areas Where NGOs Could Assist in Project Implementation Attachment 4--Selection Criteria for NGOs Participating in the Project Annex 9: Irriaation Desicqn and Implementation Attachment 1--Simplified Procedures/Guidelines for Undertaking Rapid Feasibility Studies Appropriate for the Development of Shallow Tube Wells Attachment 2--Selection Criteria and Guidelines for Rehabilitation of Deep Tube Wells (DTWs) and River Pumping Schemes (RPS) Attachment 3--Handing-Over Procedures for Rehabilitated DTWs and RPSs to Water Users Associations Attachment 4--Selection Criteria and Guidelines for Establishing Pilot Tank Irrigation Systems Attachment 5--Frameworks, Policies, Strategies, and Approaches for the Farmer Participation Program Annex 10: Job Description for Women's Development Officer Annex 11: Economic and Financial Analysis Annex 12: Development Blocks Covered by the Project Annex 13: Implementation Arrangements for Individual Components Annex 14: Implementation Plan Annex 15: Schedule of Project Supervision Annex 16: Monitorable Indicators of Project Objectives Annex 17: Procedures and Guidelines for Resettlement and Rehabilitation Annex 18: Environmental Analysis Annex 19: Documents Available in Project File ASSAM-RURAL INFRASTRUCTURE AND AGRICULTURAL SERVICES PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, Acting by its President Executing Agency: Government of Assam (GOA) through the Departments of Agriculture, Public Works, Fisheries, Irrigation, Animal Husbandry and Veterinary, and Assam State Agricultural University. Amount: IDA Credit of SDR 81.0 million (US$126.0 million equivalent). Terms: Standard with 35 years maturity. On-lending Terms: Government of India (GOI) would make the proceeds of the credit available to GOA under its prevailing terms and conditions. GOI would assume the foreign exchange risk. Poverty Categorv: Program of Targeted Interventions. The project aims to benefit the poorest section of the rural population in the State of Assam by offering better income enhancement opportunities to poorer farmers, and particularly to women, and to improve their nutritional status. The project contains specific mechanisms for targeting these groups. The project also incorporates specific measures to ensure beneficiaries' participation in the selection of location and implementation of activities supported under the project. Project Obiectives: The primary objectives of the project would be to (a) improve equity and alleviate poverty by offering better opportunities for poorer farmers and women to contribute to agricultural growth and income generation; (b) improve the nutrition of the rural poor; (c) accelerate agricultural growth through improved use of resources, relieving infrastructural and technical constraints, and providing an enabling environment to facilitate the growth of private sector investments; (d) encourage sustainability of resource use and quality of the environment; and (e) improve the GOA's long-term capacity for strategic agricultural planning. An attempt would be made to balance its policy reform objectives with poverty alleviation goals through careful targeting of beneficiaries. -ll- Proiect DescriDtion: The project is intended to benefit the poorest segments of the rural population. To achieve this objective, the project would support: (a) the Department of Agriculture's work program, including the extension services for horticulture, fisheries, and livestock to poor rural communities aimed at increasing their production; (b) institutional development (technology generation and extension, seed multiplication and land administration, and planning and coordination); and (c) rural infrastructure (small scale irrigation and rural roads). Project components would also include a number of studies considered necessary for improving the use of natural resources (soil and water management) and the marketing of highly perishable horticultural products. The proposed project would be implemented in eight years starting in 1995/96 and would include a
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