FILE Py Public Disclosure Authorized Report No

Documrent of The World Bank

FOROFF:ICIAL USE ONLY FILE Py Public Disclosure Authorized Report No. 2475-BO Public Disclosure Authorized STAFF APPRAISAL REPORT

BOLIVIA

OMASUYOS-LOS ANDES RURAL DEVELOPMENT PRO.JECT Public Disclosure Authorized

Ma.y 24, 1979

Public Disclosure Authorized Projects Department Latín America and Caribbean Regional Office

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 Worid Bank authorization. CURRENCY EQUIVALENTS

US$1.00 = $b 20.00 (Bolivian Pesos) $b 1.00 = US$0.05

WEIGHTS AND MEASURES

Metric System

GLOSSARY OF ABBREVIATIONS

BAB - Agricultural Bank of Bolivia CDF - Forestry Development Center CIPCA - Central Investigation and Promotion of Farmers CONEPLAN - Ministry of Planning and Coordínation CORDEPAZ - Development Corporation of La Paz DESEC - Center for Social and Economic Development FOMO - National Manpower Services IBTA - Bolivian Institute for Agricultural Technology IICA - Inter-American Institute for Agricultural Sciences IFAD - International Fund for Agricultural Development INBOPIA - National Institute for Handicrafts and Small Industries INC - National Colonization Institute INFOL - National Institute for the Development of Wool MACA - Ministry of Peasant Affairs and Agriculture MPSSP - Ministry of Social Security and Public Health PAN - Northern Altiplano Project PIL - Industrialized Milk Plant SNC - National Road Service SNDC - National Community Development Service

FISCAL YEAR

January 1 - December 31 FOR, OFFICIAL USE ONLY

BOLIVIA

OMASUYOS-LOSANDES RURAL DEVELOPMENTPROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. BACKGROUND ...... 1 A. Sector Characteristics, and Recent Performance ...... 1 B. The Policy Framework ...... 4 C. Main Development Constraints ...... 5 D. Development Strategy and Bank Assistance ...... 7 E. The Ingavi and Ulla Ulla Projects ...... 10

II. TRE PROJECT AREA ...... 12 A. Physical Features ...... 12 B. Population Characteristics ...... 12 C. Land Tenure and Utilization ...... 13 D. Marketing ...... 14 E. Institutional Support ...... 14 F. Infrastructure ...... 16

III. TRE PROJECT ...... 16 A. Introduction...... 16 B. Brief Description ...... ,. 17 C. Detailed Features ...... ,. 17 D. Project Costs ...... 18 E. Financing ...... 19 F. Procurement ...... 20 G. Disbursement ...... ,...... 20

IV. PROJECT IMPLEMENTATION ...... 22 A. Organization and Manapement ...... 22 B. Training ...... 24 C. Input Supply System ...... 25 D. Participating Institutions ...... 25 E. Coordinating Committee ...... 26 F. Lending Policies and Procedures ...... 26 G. Accounts and Auditing ...... 27 H. Monitoring and Evaluation ...... 27

V. SPECIFICATIONS OF FARM MODELS ...... 28

This report is based on the findings of an appraisal mission which visited Bolivia during October 1978. The mission comprised Messrs.,N.P. Sharma, J. Loup, C. Plaza, H. Wagner, E. von Loehneysen, Ms. de Regt (Bank) and Mr. R. Paraud (Consultant).

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 disciosed without Wor-ldBank authorization. - ii -

TABLE OF CONTENTS (Continued)

Page No.

VI. PRODUCTION AND MARKETING ...... 31

VII. FINANCIAL ANALYSIS ...... 33

VIII. ECONOMIC ANALYSIS ...... 34 A. Benefits and Justífication ...... 34 B. Fiscal Impact ...... 35 C. Economic Rate of Return and Sensítivíty ...... 35 D. Project Risk ...... 36 E. Environmental Impact ...... 38

IX. SUMMARYOF AGREEMENTSREACHED AND RECOMMENDATION...... 39

SCHEDULE A - Lending Procedures, Terms and Conditions, and Flow of Funds ...... 42 Table 1 - Phasing of the Lending Program ...... 46

ANNEXES

1. Consultants' Terms of Reference ...... 47

2. Farm Models ...... 48 T.1 Proposed Yearly Cropping Pattern ...... 51 1.2 Farm Model 1 - Crops and Dairy Investment Costs ...... 52 1.3 Farm Model 1 - Estimated Labor Budget ...... 53 T.4 Farm Model 1 - Cropping Pattern, Yields, Total Production, and Production Value ...... 54 T.5 Farm Model 1 - Crops Operating Costs ...... 55 T.6 Farm Model 1 - Herd Projection (Group of 40 Famiíles) . 56 T.7 Farm Model 1 - Dairy Production Projection ...... 57 T.8 Farm Model 1 - Dairy Production Value and Operating Costs ...... 58 T.9 Farm Model 1 - Total Production Value and Operating Costs ...... 59 T.10 Farm Model 1 - Financíal Analysis ...... 60 T.11 Farm Model 2 - Crops and Sheep - Investment Costs ..... 61 T.12 Farm Model 2 - Estimated Labor Budget ...... 62 T.13 Farm Model 2 - Croppíng Pattern, Yields and Total Production ...... 63 T.14 Farm Model 2 - Crop Production Value ...... 64 T.15 Farm Model 2 - Crop Operating Costs ...... 65 T.16 Farm Model 2 - Flock Projection (Group of 40 Families) ...... 66 - iii -

TABLE OF CONTENTS (Continued)

Page No.

T.17 Farm Model 2 - Sheep Production Projection (Group of 40 FamiliLes) ...... 67 T.18 Farm Model 2 - Crops and Sheep - Production Value and Operating Costs (Group of 40 Families) ...... 68 T.19 Farm Model 2 - Total Production Value and Operating Costs - ...... 69 T.20 Farm Model 2 - Financial Analysis ...... 70 T.21 Farm Model 3 - Crops and Alpaca - Investment Costs ...... 71 T.22 Farm Model 3 - Estimated Labor Budget ...... 72 T.23 Farm Model 3 - Cropping, Yields, Total Production ...... 73 T.24 Farm Model 3 - Crop Production Value ...... 74 T.25 Farm Model 3 - Crop Operating Costs ...... 75 T.26 Farm Model 3 - Herd Projection (Group of 40 Families) ...... 76 T.27 Farm Model 3 - Alpacia Production Projections (Group of 40 Families) ...... 77 T.28 Farm Model 3 - Alpaca Production Value and Operating Costs (Group of 40 Families) ...... 78 T.29 Farm Model 3 - Total Production Value and Operating Costs ...... 79 T.30 Farm Model 3 - Financial Analysis ...... 80 T.31 Farm Model 4 - Crops (3.5 ha) - Estimated Labor Budget ...... 81 T.32 Farm Model 4 - Cropping Pattern, Yields, Total Production, Production Value ...... 82 T.33 Farm Model 4 - Crops Operating Costs ...... 83 T.34 Farm Model 4 - Financial Analysis ...... 84 T.35 Farm Model 5 - Crops, Estimated Labor Budg,et ...... 85 T.36 Farm Model 5 - Cropp,ing Pattern, Yields, Total Production, and Production Value ...... 86 T.37 Farm Model 5 - Operating Costs ...... 87 T.38 Farm Model 5 - Finan,cial Analysis ...... 88 T.39 Forestry Production Model - 1-ha Eucalyptus Plantation ...... 89 T.40 Cash Flow - 1-ha Eucalyptus Plantation ...... 90

3. Detailed Project Cost ...... 91

4. Related Documents and DataiAvailable in Project File ...... 92

MAP

IBRD No. 14079 - Omasuyos - Los Andes Rural Development Project

BOLIVIA

OMASUYOS-LOS ANDES RURAL DEVELOPMENT PROJECT

I. BACKGROUND

A. Sector Characteristics and Recent Performance

Agriculture in the Economy

1.01 Agriculture in Bolivia contributes 25% to GDP and provides employment for about 60% of the labor force. Until 1973, agricultural growth was low, increasing at an average annual rate of 1.9%; however, since 1973 growth rates have averaged 4 to 6% annually. In spite of some improvement in agricultural performance, agricultural production has not kept pace with domestic demand. Currently, the agricultural trade balance is negative and Bolivia has to import substantial volumes of agricu,lturalproducts, accounting for about 25% of total imports. Main imported iteimsare edible oils, lard, dairy products and wheat flour, many of which could be produced efficiently within Bolivia if improved technologies and appropriate incentives were introduced. Agricultural exports (sugar, coffee fruits and lumber) were relatively unimportant until 1970, accounting for less than 5% of total exports, but since then, with rapid expansion of commercial farms in SanLtaCruz, agriculture's share has gradually risen to about 15%. In addition to these products, Bolivia has good potential for the production of tobacco, rubbeir,cocoa, oil seeds and wool products of sheep, llama and alpaca. Thus, with, an appropriate policy and institutional framework and implementation of soun,d investment projects, the agricultural sector could become an important source of employment and foreign exchange earnings.

Production Zones

1.02 Bolivia's agricultural sector is diversified. Tlne variety of soils and micro-climates of the three main production zones, Altiplano, Valles and Yungas, and Oriente, enables farmers to engage in many different productive activities. In the Altiplano, farmers grow maialy potatoes, quinua, barley and tubers and raise sheep, llamas, and alpacas and some dairy cattle. In the Valles and Yungas, a number of sub-tropical crops are grown and there are some livestock activities. In the Oriíente, the predominant crops are sugarcane and cotton and there are many medium-and large- scale livestock operations. In the Altiplano and Valles, 'productionis still based largely on a subsistence economy, contrasting sharply with the fast growing commercial agriculture in the lowlands, which has experienced a rapid increase in production and adaptation of improved technologies. However, agricultural growth in some areas of Beni, Chuquisaca and Tarnja Departments has been low, largely because of inadequate inErastructure investments. -2-

Production Trend

1.03 Food Crops. Potato is the maín staple commodity and it constitutes the maín source of cash income for small farmers in the Altiplano and Valles. While yields per hectare increased rapidly because new seed varieties and fertilizer were introduced, total production went up only slowly because the area cultivated decreased in response to stagnant farmgate prices. Corn production increases have been limited by the size of the slowly expanding domestic market. Barley and quinua are prevalent in the Altiplano but total cropped area is restricted due to inadequate technology, low farmgate prices, and a small market.

1.04 Wheat has been for many years one of Bolivia's main imports. Although yields have increased substantially, domestic production meets only one-fourth of consumption. Since Bolivia does not have a comparative advantage in the production of wheat because of unfavorable climatic conditions, the Government is not seriously engaged in increasing production. Rice production was stimulated by the Government's rice program, which established favorable prices and improved marketing channels. Bolivia has now become self-sufficient in rice and exports small quantities to neighboring countries. Export prospects are limited since Bolivia's rice quality is poor; however, with improved quality, export expansion is possible.

1.05 Sugar, cotton and soybean production has led the sector's growth in the 1970s. Bolivia has been self-sufficient in sugar since 1963 and has been exporting small amounts. Originally, the sugar industry developed around Santa Cruz, but, later, plantations moved north, creating serious financial problems for the sugar industry as transport costs increased sharply and producers successfully maintained favorable farmgate prices. Now there are plans for establishing a new sugar mill in the Yungas closer to the plantations and this may turn the industry around as transport costs would be lower and productivity levels would probably be higher than in Santa Cruz. While Bolivia has considerable potential, export prospects are limited owing to its small size quota under the International Sugar Agreement.

1.06 Cotton production has produced mixed results. From 1960 to 1973, output increased from 1,000 to 37,600 tons. During the peak years, about 68,000 ha were planted in the Santa Cruz area. However, marketing and production problems have considerably diminished farmer interest, and, by 1977, the area planted was only 50% of the 1973 level. By contrast, soybean output rose significantly from 300 tons a decade ago to 17,000 tons in 1976, and there are still vast suitable areas for the crop so that significant potential remains for expanding production further. The main problems are low technical standards, resulting in low yields, high transport costs to processing facilities, and lack of adequate storage and drying equipment.

1.07 Present grape production in Bolivia is negligible. It is estimated that the total area planted with grapes is below 500 ha. Some efforts to increase production and improve product quality have been made with IDA's Agricultural Credit Project (Credit 561-BO). Yet domestic consumption of wine and singani, the national wine distillate, exceeds by far domestic production and has led to considerable imports from Argentina and Chile. Due to low production, local processing plants operate below capacity. Prospeets for further production increases are faverable, considering Bolivia's climate and soils, especially in its temperate valley, but would dlependon sizeable investments to expand the cultivated area, with provision for technical assistance, irrigation and appropriate market channels.

1.08 Lívestock. Cattle produci:ionis concentrated in the lowlands, which support 75% of the national herd. The remaining 25% is distributed in the Altiplano and, to a lesser extent, in the Valles. The herd size is estimated at 3.2 million head and the extraction rate at about 13%. Although production estimates are unreliable., it appears that Bolivia produces some 78,000 tons of beef per year, mainly for the large urban centers and mines, and some 50,000 to 70,000 (about 10,000 to 14,000 tons of beef) head are smuggled each year into Brazil. Given the low extraction rate and Bolivia's vast natural pastures, there are excellent opportunities for expanding output. Bolivia could export meat to Chile and Peru, but a policy designed to increase beef exports will require improvements in quality and an increase in credit and technical assistance. Cattle are slaughtered at light weights, and the meat industry itself needs sanitary controls and chilling equipment. Improve- ments are also needed in the transportation infrastructure and in the processing and marketing system.

1.09 Sheep, alpaca and llama production are important economic activities in the Altiplano. Recent estimates indicate that there are about 2.2 million llamas, 300,000 alpacas and 7.5 million sheep. While the Government made no significant effort for many years to develop alpaca and llama wool production, even though it is an important source of foreign exchange earnings, income, and employment for the rural poor, it has now, with Bank assistance, launched a major program to foster the integrated development of this activity. It is expected that, under the Bank project, llama and alpaca wool production would increase substantially (para 1.36).

1.10 Dairy production has beern neglected in the past; consequently, milk is not available in sufficient quarntityfor the urban population. Additionally, most of the fresh milk presently sold in La Paz is not pasteurized and processed milk has to be imported. Although clairyproduction can be a profitable farming enterprise, there is at present a cleficientpricing policy that depresses farmgate prices and is probably the major constraint to increases in production. Other constraints to the development of dairy farmasare a lack of technical assistance and credit, adequate cat:tle feeds, and transport facilities for milk.

1.11 Forestry. Forestry products account for about 3% of GDP and almost 12% of total agricultural output. Out of the total forest area, some 26,000 km2 is estimated to be under commercial forestry, with a potential volume of 500 million m3 of exportable hardwood. However, forestry development has been impeded because of trieabsence of a clear-cut policy and lack of transportation infrastructure in the principal forest areas. In order to correct the situation, the Government has enacted comprehensive legislation and has established the Forestry DeveloprmentCenter (CDF). - 4 -

B. The Policy Framework

1.12 The Government of Bolivia has had difficulties in designing a viable agrícultural development strategy. Until recently, agriculture was viewed as a social rather than productive sector and Government sought to expand the economy through hydrocarbon and mineral development. The agricultural sector received only little support and mínimum efforts were expended to develop the productíve potential and export possibilities or to deal with rural poverty. The political framework was, and still is, unfavorable for rapid agricultural development, one of the main weaknesses being Government's price policy, which keeps food prices artificially low to benefit short-term interests of the urban consumers. In addition, the overvalued exchange rate and the present tariff system distorts the input/output pricing process.

1.13 Since the late 1950s, the Government has imposed price controls for most agricultural products because of strong political pressure from the urban population and powerful labor unions, striving to improve the standard of living of their members. Controlled prices were normally below the real market price and negatively affected farmers' incentives to increase output and investments. Adoption of new technologies and application of modern inputs were impaired, productivity stagnated, and the price differential between Bolivia and neighboring countries encouraged considerable smuggling. As a result, the supply of agricultural products dropped and even exacerbated the difference between administered price and real market price. This trend was to some extent reversed after 1974 when the Goverament partially relaxed its price controls on some commodities and prices moved toward their comparable world market levels. However, prices of commodities produced in the lowlands improved more than those produced in the Altiplano and Valles.

1.14 Bolivia's currency is overvalued, thus increasing food imports and limiting agricultural exports. In 1972, the Governnent set the exchange rate at US$1: $b 20, where it remains, even though prices in Bolivia increased faster than those of its major trading partners. Another factor disturbing market forces is the tariff and subsidy system. Export taxes are one of the most important revenue sources for the Government and are therefore high, while import tariffs increase the prices of most agricultural inputs. In addition, the Government, by providing price subsidies, has limited exports of some commodities such as sugar and coffee and promoted imports of wheat flour, lard, edíble oils, and dairy products.

1.15 In the last few years, however, the authoritíes have recognized the importance of the sector and have sought to stimulate agricultural production. The national development plan for 1976 to 1980 emphasizes food production, eradication of rural poverty and increasing exports. However, until now the Government has failed to transform its overall development objectives into a detailed sector strategy and a conducive policy framework. While increased attention is given to implementing agricultural projects with external assistance, the Government has done little to amend pertinent policies relating to agriculture. The Bank is, therefore, discussing with the Bolivian authorities the importance of policy changes, and it has offered to carry out a detailed sector survey in FY1980. 1.16 Interest rates for agricultural credit vary between 10 and 18%. Commercial banks levy up to 18% for loans to farmers, and middlemen charge as much as 10% per month for short-term borrowing. The Gov,ernment'spolicy on interest rates for agriculture calls for 12% in all agricultural development projects and does not differentiate between the small farm sector and the commercial sector. As learned urider the Ingavi and Ulla Ulla Projects, however, the 12% rate does not adversely affect small tarmers' incentives to borrow funds.

C. Main Development Constraints

1.17 The Government's agricultural development strategy has to overcome a number of constraining factors. Problems exist in the production system and the social organization oí the sector as well as in its marketing system and institutional services. The main development issues are the imbalances between natural resources and the distribution of Bolivia's population, the low level of resource exploitation, the prevalance of the extended subsistence economy and poverty, the lack of suppo.rtingservices, and inadequate marketing.

Resource Imbalance

1.18 The main development constraint in Bolivia's agricultural sector is the imbalance between its natural resources and the distribution of its rural population. While most of the country's peasants are overcrowded in the Altiplano and Valles, vast areas in the Oriente, with its fertile soils and a favorable climate, remain sparsely populated. The Altiplano, which accounts for about 42% of the rural population, comprises only 28% of the country's cultivated land and contributes 18% to the agricultural GDP. High altitude, between 11,500 and 14,000 feet; a cold, dry and harsh climate; and low soil fertility make agriculture risky and less productive than the lowlands. Likewise, the Yungas and Valles also have about 42% of the rural population, comprise 38% of Bolivia's cultivated land, and contribute soome 34% to the agricultural GDP. The lowlands, comprising about 35% of the cultivated land, account for only about 16% of Bolivia's rural population, but the area contributes some 48% to the agricultural GDP. Its natural resources are largely untouched, with only a small part of the total area suitabLe for cultivation actually in use. In Beni, livestock production could be increased substantially and the area around Santa Cruz could be developed for rainfed agriculture. With irrigation, Bolivia's Chaco region could be developed for agriculture. If these areas are developed, Bolivia could become self-sufficient in most agricultural products and would be able to export relatively large surpluses.

Inadeguate Resource Exploitation

1.19 On most farms throughout Bolivia, productivity and land use in- tensities are low and could be substantially increased, particularly in the Altiplano. There, agriculture is still based on traditional methods: - 6 - practically no fertilizer nor graded or certified seeds are used and modern farm machinery is almost non-existent. Although natural resources are limited if compared to the lowlands, there is still scope for improvements. Increases in yields have been achieved in areas that received adequate levels of credit and technical assistance and constitute examples of possible development. In the Valles, large areas have fertile soils and a favorable climate but lack water during the dry season and, hence, produce only one crop per year. Under irrigation, cropping intensity and yields could be raised. Livestock and crop production in the lowlands are carried out extensively. Yields of cotton and sugar, for example, are low, with the total output increase in recent years due exclusively to expansion of the cultivated area. Climate and soal fertility would support intensive production methods and permít higher yields than are presently achieved. Moreover, much land in colonization areas ís not cultivated since settlers lack the financial resources for land clearing and production inputs. Supplying the necessary services would help to expand commercial crop production.

Subsistence Economy and Rural Poverty

1.20 A major obstacle to rapid agricultural development and an important social issue is subsistence agriculture, which, it is estimated, involves large parts of Bolivia's rural population. Subsistence farmers have a low cash income, virtually no access to agricultural credit or markets for purchase of agricultural inputs, and little exposure to technological advances. On-farm consumption usually ranges between 30 and 90% of production, depending on distance to sizable markets.

1.21 Living standards and social infrastructure and services in rural areas are totally inadequate: water supply or sewerage facilities are almost unknown, housing standards are far below acceptable levels, and education servíces are extremely limited. Low life expectancy and high mortality rates among children are also common characteristics of the rural areas.

Supporting Services

1.22 A critical constraint to the modernization of the agricultural sector has been the lack of an efficient agricultural credit system. This has affected predominately small farmers but also commercial agriculture in the Oriente. The Agricultural Bank of Bolivia (BAB), established in 1942, is the single most important source of agricultural credit. Although BAB was organized as an institution designed to benefit small farmers, it has gradually arrived at a point where it concentrates on financing medium- to large-size operations. Specifically, by December 1977, small farmers received only 5% of the credit it had to offer. The largest share of BAB's resources has been allocated to the lowlands, with the Oriente accounting, during the 1973-75 period, for about 87% of all loans, most of them for livestock, sugarcane, cotton and soybean production. BAB now finds itself in a weak financial position, due to the accumulation of loan arrears, excessive operating costs, and, because it cannot attract domestíc savings, it must rely completely on public and external financial support. BAB also suffers from poor management and low quality staff. 1.23 Agricultural research and the extension services are largely ineffective. Research has not been concentrated on specific areas nor directed toward urgent problems. While each of the existing research stations do have a principal focus, most stations are invoLved in both crop and livestock experiments and have spread their research budgets over a large number of activities. Also, research stations receive only limited financial support and, hence, are forced to operate mainly as commercial farms in order to generate income to sustain their operations. By and large, farmers receive limited support from these stations and most successful farming of cotton, sugar and soya is at the initiative of private entrepreneurs. The extension service suffers similarly, mainly from financial problems. Budget cuts and limitations of operational funds as well as salary reductions caused restrictions in the services rendered and forced a large number of trained Bolivian personnel to leave extension programs. As a result, training of extension staff is poor and the current ratio of extension workers to farmers is high. Coordination between research and extension has generally been weak, mainly because research stations operated indep,endentlywhile most extension workers were employed by the Ministry of Peasant Affairs and Agriculture (MACA). To correct this situation, the Government created the Bolivian Institute for Agricultural Technology (IBTA) in 1975, and it now coordinates most research and extension in the country. IDB is presently processing a proposed US$8 million loan to expand and up-grade IBTA's operations.

M4arketing

1.24 Serious marketing problems are concentrated in three areas--quality of exports, transportation to foreign and domestic markets, and communications. In addítion, the Government has not yet been able to design a marketing strategy for potential export products. Insufficient transportation and storage ínfra- structure in Bolivia makes product exchange difficult and expensive and prevents regioral specialization. The main agricultural production areas are still largely independent and produc:e predominantly for their own consumption. Finally, an inadequate communication network has impeded the flow of price and other marketing information to farmers.

D. Development Strategy and Bank Assistance

General Approach

1.25 Bolivia's agricultural sector has the potential to supply almost all agricultural products for the domestic market and to elxport considerable surpluses, especially in cotton, sugar, timber and livestock products. To realize this potential, however, the Government would haveI to establish an appropriate development strategy and policy framework, strengthen institutions, liberalize existing price controls and foreign tracde restrictions and establish a realistic exchange rate. - 8 -

1.26 Regional complementarity and widespread poverty in the country call for a balanced approach in terms of resource allocation and Government support. For the lowlands, emphasis would have to be placed on increasing production of high-value products (cotton, sugar, grapes, timber and livestock) and food crops and cultivating land which is presently not utilized. In the case of the latter, the Government could promote migration from the highlands and valleys. In the Altiplano and the Valles, the strategy would have to focus on increasing on-farm productivity, improving resource exploitation to increase domestic food supply and wool exports and improving the living conditions of the rural poor.

Settlement

1.27 Migration from the overcrowded Altiplano and Valles to the lowlands will be the most important factor in expanding the agricultural frontier and balancing regional discrepancies in population distribution. That there has already been considerable rural-rural migration is evidenced by the fact that, in 1977, some 290,000 people were living in rural settlement schemes, accounting for more than 5% of the Bolivian population. Spontaneous settlers are the most important category, accounting for 84% of all migrants and occupying 57% of all colonized lands. The remaining areas are used for directed or oriented settlement schemes receiving Government assistance. Generally, resettlement schemes have been successful where conditions have been conducive to developing viable farming systems and where markets are accessible. Further, the trend in settlement schemes indicates that there is a natural adjustment process taking place and that if conditions are favorable the people of the Altiplano and the Valles can settle in the lowlands. The value of the colonization process to agricultural development in Bolivia can be seen in the following: settlement schemes account for 30% of the national sugar production and 85% of the total rice production.

1.28 The experience of the National Colonization Institute (INC) with organized settlements has not always been encouraging since many such schemes did not reach the envisioned production targets and the number of settlers leaving the project area has been relatively high. The spontaneous colonization process for settling the tropical frontier has proved more flexible for responding to economic opportunities than government-directed colonization projects, but spontaneous settlers, while more successful on the production side, usually cause serious environmental damage. Since spontaneous settlers do not receive legal titles for their plots and there is no production support or social infrastructure, settlers have a tendency to move to different locations as soil fertility and yields begin to decline. INC estimates that about 120,000 ha are destroyed annually by spontaneous migrants with "slash and burn" cultivating methods.

1.29 Promoting migration from the Altiplano and Valles to the lowlands will be an important element in the Bank's agricultural strategy. However, the Government's unfavorable experiences with organized settlement and the necessity to promote migration on a large-scale would require the Government to focus on the existing stream of spontaneous migration by providing low cost widespread assistance. Such an approach would also make an important contribution to mitigate and eventually overcome environmental damages which are - 9 - caused by spontaneous settlers. The Bank is presently consiLderinga project proposal in the area of Chane-Pira¡ to support the consolidation of some 20,000 families who have settled on about 800,000 ha over a períod of about 20 years. Project components would include credit, technical services, upgrading and extension of the feeder road system and some basic social services such as water supply and pit privies. The project would also strengthen INC.

Irrigation Development

1.30 The Government is aware that further development of the agriculture sector requires development of water resources. It is thus prepared to undertake its first irrigation project with financial assistance by IDA. The proposed San Jacinto project in the Tarija Department would serve as an example for possible future projects, the most likely one being irrigation development in Bolivia's Chaco, the area south of Santa Cruz. Additionally, FAO has identified and prepared a possible project in the Abapo-Izozog area, and, if a pilot scheme financed by IDB is successfully implemented, the Bank could assist in the irrigation development of an area of some 15,000 ha. Another area with irrigation potential is the valley of Cochabamba and the Government is now preparing a feasibility study for a multipurpose prcoject there. This project would irrigate some 16,000 ha in the valley and make double cropping possible.

Livestock Development

1.31 A major resource of Bolivia's agricultural sector is the natural pasture in the lowlands since it gives the country the potential for be- coming an international supplier of beef. The livestock subsector, however, has been barely able to meet its limited internal demand and is in urgent need of new long-term loans for modernizing investments. Credit and technical assistance would have to be provided for the purchase of new breeding stock, pasture improvement and upgrading of transport facilities between ranches and municipal slaughterhouses. The Bank has financed three projects in this subsector. Two projects (Credits 107-BO and 171-BO) have been completed and evaluated in the Operations Evaluation Audit, dated October 11, 1974. While these operations have established a lending channel for the livestock activity and have increased production and benefited many farmers, the Govern- ment has fallen short of establishing an adequate grading and pricing system and a viable technical assistance delivery system for the subsector.

Rural Development

1.32 Rural development strategy would have to be based on two components. First, with promotion of migration JEromthe highlands to t.he lowlands, the population pressure in these areas could be reduced and further fragmentation of small farms avoided. Second, assistance in the AltiplaLno and Valles would focus on increasing productivity and raising incomes and, to this end, Govern- ment and UNDP have agreed to prepare an integrated rural clevelopmentprogram. The Bank has already supported rural development with two projects: the Ingavi Rural Development Project (Loan 1211-BO), which attempts t:opromote food production and provide infrastructural services to small farrners in the Ingavi - 10 - province, and the Ulla Ulla Rural Development Project (Credit 762-BO and Loan 1510-BO), which attempts to develop wool production and handicraft potential in an area north of Lake Titicaca (para 1.34). Bank experience with these projects suggests that the Government should continue to design Altiplano projects based on low investment costs per family, thus benefitting a large group of small farmers, an approach the Government intends to follow in the proposed development project in the Omasuyos and Los Andes Provinces in the Northern Altiplano. The level and extent of the current investment program in the Altiplano is reasonable and compatible with the regions' absorptive capacíty.

Institutional Strengthening

1.33 Reorganízation of the agricultural credít system would be of primary importance in the Bank s next agricultural credit project since past credit projects, channeling loan proceeds through BAB, have achieved only minimal institutional upgrading. Currently, BAB is a weak organization and faces an acute financial crisis. While, the Government is now taking some measures to improve BAB's equity and strengthen its top management, a comprehensive rehabilitation program to strengthen BAB is needed. To this effect, the Bank is discussing a plan of action with the Government, and intends to use a future livestock credit project to implement such a program. The creation of IBTA and its support through IDB will improve research and extension services. The Bank has included technical assistance components in all agrí- cultural projects and it expects to coordinate its activities in the future with IBTA. The establishment of the National Institute for the Development of Wool (INFOL) under the Ulla Ulla Project is expected to bring about an orderly development of the alpaca/llama/sheep wool industry. Also, the support provided to the National Institute for Handicrafts and Small Industries (INBOPIA) also under the Ulla Ulla Project, would develop and expand handicraft activity in the rural areas. The institutional organization established under the Ingavi Project and to be strengthened under the proposed Omasuyos-Los Andes Rural Development Project would establish a viable institutional framework to provide intensive and coordinated support to the small farm sector.

E. The Ingavi and Ulla Ulla Projects

1.34 Ihe Ingavi Rural Development Project (Loan 1211-BO) and the Ulla Ulla Development Project (Credit 762-BO and Loan 1510-BO), based on an integrated system to provide basic social services, infrastructure, marketing, credit, and technical services, are the only comprehensive programs in the Altiplano focusing on aiding the very poor by altering deep-rooted economic problems. Together with the proposed Omasuyos-Los Andes Project, they would provide a comprehensive rural development program for the Altiplano Norte.

1.35 The Ingavi Project, which became effective in October 1976, was designed to benefít about 4,000 small farm families through on-farm investment (deep well irrigation systems, tractors, cattle, improved pasture, and livestock facilities and storage); incremental production credit (for improved seeds, fertilizer, insecticides, and services); and technical assistance. Additionally, most of the 10,000 familíes in the project area will benefit from improved roads, health facilities, and drinking water and waste disposal facilities. Until 1978, the project had encountered various technical and or- ganizational problems and overall results were mediocre. Since Ingavi was - 11 - a first attempt to coordinate development efforts by cutting across institutional lines, initial progress was slow. The Project suffered most in the production side because of (a) the unproven viability of the irrigation system and lack of sufficient provision for drainage problems in the area; and (b) the apparent lack of timely and steady availability of inputs, including livestock. The lack of progress on the production side was further compounded by the delay in the finalization of the subsidiary agreement between BAB and the Central Bank for the credit component. However, more recently, project implementation has improved significantly following various decisions made by the Bank to strengthen project administration and to provide greater flexibility in project emphasis and approach. Small farmer participation (44 groups, or 2,088 farm families) in non-irrigated agriculture is high and communications between farmer groups and project staff have improved. The establishment of an input supply system and a cattle acclimatization center has strengthened the livestock program under the project and eased the serious stortage of cattle in the project area. The infrastructure component ís now progressing, but the development of the irrigation program is uncertain, pending the finalization of studies relating to a pilot scheme now in progress.

1.36 The Ulla Ulla Development Project, which was declared effective in July 1978, is progressing satisfactorily. The project, like the Ingavi Project, is designed to help the Altiplano's rural poor. It aims at developing the alpaca/llama/sheep agri-business complex, integrating diverse components into a single development scheme beginning with breeding production of the raw material and including processing to semi-finished products and conversion to handicrafts and their marketing. The wool industry would benefit through improvement of research, extension and farming system, improvement and expansion of marketing infrastructure, modernization of processing facíli- ties and development of llama dehairing technology. The project would also finance the preparation of solar energy devices for use in the rural areas of the Altiplano. In addition, the project would include credit for the wool handicraft industry for about 3,400 families, mostly in the rural areas, and would improve the living conditions of about 3,000 families in the project area through provision of health and education centers, drinking water and waste disposal facilities, and improved roads.

1.37 The Government has modest expectations concerning development efforts in the Altiplano. It recognizes the difficulties in bringing about an orderly development of the region, which is endowed with limited resources and harsh conditions and where the population has in the past been less receptive to change and is to some extent suspicious and unapproachable. Implementation of rural development projects in the Altiplano implies taking more than the usual project risks. Despite these constraints, however, there have been some positive changes recently in the attitude and ideals of the Altiplano rural poor toward social and economic changes. Communities have become more sensí- tive to progress and indicate strong desires to participate in the development process. Positive results from the Ingaví and Ulla Ulla Projects also have reinforced farmers willingness to participate actively in development programs. This, in addition to the Government's determination to engender development in the Altiplano, could be the overriding factor insofar as success of rural development in the Altiplano is concerned. - 12 -

II. THE PROJECT AREA

A. Physical Features

2.01 The Omasuyos and Los Andes provinces are located in the Department of La Paz. Together they constitute the main part of the Altiplano Norte and líe at altitudes ranging from 3,800 to 4,000 m above sea level. The area borders the southeastern shore of Lake Titicaca, and covers a land area of about 300,000 ha with a total population of about 95,000. The project area is about 50 km from La Paz and it would be contiguous on the southern border with the on-going Ingavi Project.

2.02 Altiplano Norte has a semi-arid mountain clímate with average annual temperatures ranging from 4 to 140 C. Average rainfall varies between 450 to 490 mm wíth distinct wet and dry seasons. The high mountains and Lake Titicaca exert influence on the area's climate. Areas close to the lake have a more moderate climate, resulting in an average of less than 150 days of frost per annum. The risk of frost in January and February, even though it occurs only in one or two nights, is a limiting factor for agriculture. Generally, frost in this period is sufficient, to cause injury to potatoes and grain crops.

2.03 Many small rivers run down from the Cordillera towards Lake Titicaca through the project area, but many of them have no permanent flow. The most important is the Rio Keka in the province of Omasuyos with an average flow of nearly 5 m3 per second. Groundwater is scarce in the area, except in the Penas Valley where soils are suitable for irrigation. Drainage is a problem in some waterlogged areas.

2.04 About 18% of the total land area is arable but most has severe limitations, and 32% is suitable for pasture. Soils have developed largely from the sedimentary rocks of the region and are characterized by lack of organic matter. Phosphorous deficiency is reportedly widespread in the area and there are suggestions of calcium shortage in some areas. Soil erosion problems are also pronounced in some areas due to long continued cultivation.

B. Population Characteristics

2.05 The project area has a population of about 95,000, wíth per capita income of less tha US$100. The main language is Aymara, although most of the population speaks Spanish. The birth rate is about 3.8% per annum, the average life expectancy is lower than the national average of 48 years and the level of illiteracy of those over 15 years is about 45%. Nutritional levels are low, with estimated deficits of about 48% of animal proteins and over 17% of daíly calorie intake. - 13 -

2.06 Over 80% of the econoinically active population are engaged in agriculture, with the remaining working in commerce, fisheries and handicraft activities. Since underemployment is high in agriculture, it is estimated that almost 40% of the farmer's family income is derived from non-farm activities. Seasonal migration for employment to La Paz and Las YuDgas is high. Farming is carried out by family input only, both men and women play important roles in making financial decisions, and both participate actively in production and marketing. In the Altiplano, farmer groups constitute an important vehicle for individual farmers to obtain credit and technical assistance while maintaining their individual ownership of land and economic independence. This is linked to the Aymara's social structure where groups are formed to improve the individual's well being.

C. Land Tenure and Utilization

2.07 In the project area, there are two types of land ownership: individual or private and communal land. The former accounts for some 61,000 ha, or 20% of the project area, while the latter covers about 243,000 ha, or 80% (mainly for pasture), which is jointly exploited by the members of the respective communities. Land distribution in the area, as shown below, is skewed, with about 1.7% of the farms (over 20 ha) occupying 13.5% of the privately owned land and about 50% of the farms (less than 2 ha) accounting for only 10%.

Farm Size Distribution 1/

No. of % of Total Area % of Holdings _Roldings (ha) Total Area

Less than 0.5 ha 4,107 22.0 911 1.5 .05 - 2 ha 5,332 28.0 5,225 8.6 2 - 10 ha 7,631 40.5 29,712 48.9 10 - 20 ha 1,469 7.8 16,709 27.5 More than 20 ha 302 1.7 8,203 13.5

Total 18,841 100.0 60,760 100.0

1/ Source: MACA Encuesta Socio-economica, 1976, 1977 and FAO Preparation Report.

Most farms are highly fragmented with agricultural properties usually comprising three or more plots located in different areas. Over 60% of the farms are divided in more than four plots. The communal land, distributed among 167 loosely defined communities, are of two types: the "aynokas" (communal land for crops) and the "anakas" (or common pastures). Although both types of land are owned by the community, the former is assigned in one or more plots to member families for individual cultivation on a rotation - 14 - basis. Recently, however, these plots have become more and more an integral part of the individually owned property, the community retaining only some influence in decisions concerning crop rotation. When in fallow, the "aynoka" lands like the "anakas", can be used for pasture by all members of the community.

2.08 Mixed farming is predominant throughout the area but agriculture is at subsistence level with limited applications of improve technology and inputs. The family provides all the labor on the farm with mínimum utilization of mechanization. Only 29% (17,600 ha) of the private land is presently cultivated. The principal crops are potatoes and barley, which account for about 68% of the cultivated area. Beans, Andean tubers, quinua and alfalfa are also grown in the area. Cropping intensity is generally restricted to only one crop per year and does not exceed 80%. Livestock is also important in the area, amounting to about 200,000 sheep, 40,000 cattle and 25,000 alpacas. Over 200,000 ha in the project area are in pastures, but, over the years, they have deteriorated because of poor management and over- grazing. It is now estimated that the maximum carrying capacity is about 0.7 animal units per ha.

D. Marketing

2.09 Given the subsistence nature of agriculture in the area, farmers trade only a small surplus of their production. Livestock and farm products are usually traded to the intermediaries from La Paz at the weekly and annual fairs. Milk is sold either directly to the dairy plant (Industrialized Milk Plant - PIL) in El Alto or transformed into cheese and sold at local fairs. Products are transported from the fairs by small trucks to cities, mainly La Paz. By and large, farmers receive low prices for their marketable surplus. It has been estimated that farmers selling directly to intermed- íaries receive less than 30% of retail prices for perishable products and about 50% for other products. To correct this, farmers are now selling directly to consumers in the cities where they receive significantly higher prices. Marketing cooperatives have also been set up in the area but they are not very successful and account for only a small volume of trade.

E. Institutional Support

2.10 IBTA is responsible for agricultural extension and research, but both are weak, primarily because of IBTA's inadequate budget, staff and facilities. Only three extension agents, each with their auxiliary personnel, are stationed in the project area to assist about 16,000 farmers, and no veterinary services are provided.

2.11 The El Belen Experiment Station in the Omasuyos Province directs its research program at the introduction of foreign fodder species and production of Brown Swiss dairy cattle. The station also provides services - 15 - aimed at increasing the number of cross-bred cows that have a higher production potential than the local Criollo. However, dissemination and application of results outside the research station have been mediocre. Additionally, the Patacamaya Experiment Station, which is closer to the Ingavi Project area, carries out research programs oriented toward common Altiplano crops and fodder. The station's livestock research program concentrates on sheep, llamas and chinchillas. While some pertinent results have been transferred to farmers, the station's overall efforts in providing support to small farmers have been limited.

2.12 The Development Corporation of La Paz (CORDEPAZ), under the auspices of the Ministry of Planning and Coordination (CONEPLAN), is responsible for the coordination and promotion of development in the Department of La Paz, which includes the project area. With an annual budget of over US$6 million, CORDEPAZ invests principally in agricultural and industrial programs and basic infrastructure and services. CORDEPAZ's overall program is complex and covers a wide array of activities, its efforts are thinly distributed, and its success with small farmers has been Limited. In the project area, CORDEPAZ participates with MACA in the administration of the Northern Altiplano Project (PAN), with total funds amounting to US$0.25 million equivalent. PAN, which was initiated in October 1974, provides credit to small farmers in the provinces of Camacho, Omasuyos, Los Andes, Mancocapac and Ingavi. About 4,000 small farm families in seven cooperatives are expected to benefit: from the program despite the fact that PAN suffers as a result of an inadequate technical assistance delivery system.

2.13 The National Community Development Service (SNDC), which receives financial support from USAID, is also active in the project:area. SNDC focuses its programs on social infrastructure and on providing technical support to farmers. It is also responsible for the implementation of the Huarina Irrigation Project financed under the German Technical Assistance Program. The project is located in the Omasuyos Province and will eventually command an irrigated area of about 1,500 ha.

2.14 The main sources of agricultural credit in the project area are BAB, CORDEPAZ, SNDC, the Center for Social and Economic Development (DESEC) and PIL. Additionally, some farmers obtain credit from merchants, relatives and friends. Although the demand for credit is high, less than 40% of small farmers receive institutional credit. BAB is the major institutional source of agricultural credit in the country, but it emphasizes primarily medium- and large-sized farmers. On the whole, BAB has been ineffective in dealing with small farmer credit. It has two agencies in the project area and, during the past decade, it has accounted for less than 15% of total funds provided for agriculture in the area.

2.15 Several private agencies such as DESEC, the Cartas Bolivianas, and the Central Investigation and Promotion of Farmers (CIPCA) are also active in the project area in proviclingsocial services and assistance to farmers for the establishment of cooperatives.

2.16 To date, various programs undertaken by agencies to provide credit and technical support to sma:Llfarmers in the project area have shown only moderate results, but this may well be because the actions of these agencies were not adequately coardinated, technical and managerial - 16 - support was inadequate, the credit programs were weak, and the development efforts were too thinly spread over wide areas. The proposed Omasuyos-Los Andes Rural Development Project, with its emphasis on strong project organization and administration and development of an effective delivery system for credit and technical assistance, would provide the framework for dealing more effectively with small farmers.

F. Infrastructure

2.17 The project area has a main road (129 km) linking it to La Paz. Additionally, it includes about 380 km of primary roads, about 340 km of secondary roads, and about 1,000 km of feeder roads. Selected primary and secondary roads are maintained by the National Road Service (SNC). Although under the Bank's project (Loan 1587-BO), SNC plans to improve selected primary, secondary, and feeder road systems in the area; however, further improvement of the feeder road systems would be required. To ensure accessibility, about 50 km of feeder roads in the project area would be improved under the project to complement the road improvement program under Loan 1587-B0.

2.18 Education facilities are inadequate but the Bank-financed Educational and Vocational Training Project (Loan 1404-BO) will strengthen the primary and community education system and provide vocational training in some areas of the project. Likewise, health facilities in the project area are limited, consisting of only 44 hospital beds. In addition, there are 11 health posts administered by the Ministry of Health, the Methodist Hospital of Ancoraimes and the Baptist Church. Most of these health posts, however, are poorly staffed and equipped. A new hospital (56 beds) has been built in the area and ís expected to open shortly. Also, water supply and waste disposal facilities are scarce in the area, with most families obtaining water from open ditches and unprotected shallow wells. In a few cases, people draw water from wells located at schools, and, while they are better maintained than individually owned wells, they also need improvement.

III. THE PROJECT

A. Introduction

3.01 The Government of Bolivia has requested an IDA credit of US$3.0 million and a loan of US$4.0 million from the International Fund for Agricultural Development (IFAD) to help finance the Omasuyos-Los Andes Rural Development Project as part of its comprehensive development strategy for the Altiplano, which accounts for over 60% of the rural population. The feasibility study for the proposed project was prepared with the assistance of the FAO/Bank Coopera- tive Program (Report No. 39/78, BOL, August 10, 1978) and submitted by the Government to IDA in August 1978. A list of studies and working papers relating to the proposed project is given in Annex 4. Together with the Ingavi and the Ulla Ulla Projects, the proposed Omasuyos-Los Andes Rural Development Proj- ect would provide the basis for a long-range program to develop other regions of the Altiplano and the Valles. The project was appraised in October 1978. - 17 -

B. Brief Description

3.02 The project, which is designed on a modest seale to reach the small farm sector, would provide financing over a four-year investmínt period to increase agricultural, livestock and forestry production. Based on the Ingavi experience, the project is designed to reach about 6,000 low-income farm families organized in farmer groups through provision of an integrated package, including improved credit and technical assistance, improved support services, improved roads, and drinkirLgwater and waste disposal facilities.

3.03 The proposed credit would be made to the Government, which would bear the foreign exchange risk. The Ingavi Project Unit would be expanded and strengthened to incorporate the Omasuyos-Los Andes Project under the auspices of MACA and would be responsible for project implementation. For the credit, forestry and road programs, the Project Unit would enter into operational agreements with each respective partícipating agency, as under the Ingavi project.

C. Deta:iled Features

Production Investment

3.04 The proposed agricultural ,levelopment under the project is based on the Ingavi experience with respect to farmer organization and participation and the credit and technical assistance delivery system. Production would be augmented by improved farming practices and cropping patterns, improved production inputs, mechanization, and a,dequate credit and technical assistance support. Funds would be made available to about 6,000 subsistence farmers for agricultural, livestock and forestry production.

3.05 On-farm Investments. Credit would be provided to about 2,500 farmers organized in farmer groups for investment in livestock (cattle, sheep and alpaca), corrals and sheds, silos, greenhouses, troughs, wells and pumps, equipment and farm tools. Funds would also be available for the purchase of about 12 tractors by farmer groups that could demonstrate the need as well as the capability to operate and maintain a tractor efficiently.

3.06 Production Credit. Incremental working capital would be made avaíl- able to farmer groups to benefit individual farmers (about 6,000 farmers) to cover costs of improved seeds, agricultural chemicals, oxen, and machinery services. Funds on a limited scale would also be provided to finance other productive activities such as fisheries and vegetable growing.

3.07 Forestry. The forestry program would be phased over a four-year period on about 600 ha of communally held or privately owned marginal land to provide fuel wood, poles and construction wood, and pitprops. The program would establish a nursery with a productive capacity of about 400,000 seedlings annually and include a research program (funds for buildings, transportation - 18 - facilities, irrigation facilities, and equipment) for development of suitable species and local expertise. About 600 farmers, participating under the project's farm production improvement program, would receive credit for the development of forestry.

Infrastructure

3.08 Roads. The project would improve and maintain about 50 km of feeder roads in the project area to facilitate communications and flow of goods and services to and from the project area. The feeder roads to be improved would have a platform of about 4 m wide with side ditches and culverts as necessary; graveling for critical sections would also be provided.

3.09 Water Supply and Waste Disposal. Potable water supply and waste disposal facilities would be provided to about 6,000 families in the project area. About 4,000 shallow wells, including pumps, and 3,000 pit privies would be installed over the project period. Wells would be dug manually and each well would be cased with a PVC pipe and provided with a concrete slab and cover, and a hand pump. Each pit privy would consist of a hole excavated manually, a concrete slab, and a small adobe building.

Administration and Technical Support

3.10 Administration. The project would make provision for project administrative costs covering salaries for the Project Unit staff, overhead costs, buildings, housing, equipment and machinery, and vehicles. Provisions would be made for consultant services (12 man-months) to provide support in areas relating to cheese and dairy production.

3.11 Technical Support. A technical assistance delivery system would be established to transfer simple, low-cost technology to individual farmers through farmer groups. The delivery system would be based on the Ingavi "promotores" system which has until now worked out satisfactorily and would focus on production, marketing and simple techniques relating to farm and livestock management practices. Additionally, technical assistance would be provided to women in the project area for the establishment of organizations and coordination of handicraft training. In order to strengthen the technical support system, the project would establish a center to train project staff, "promotores" of the extension system and farmers participating in the project. A model farm would be set up to demonstrate improved and appropriate technology and alternative systems of production to project farmers. In order to ensure timely availability of dairy cattle in the project area, the acclimatization facilities of Choquenaira and Cochabamba would be expanded.

D. Project Costs

3.12 Total project costs are estimated at about US$9.3 million, of which US$2.5 million, or 26%, represents the foreign exchange costs. Consultant services would amount to US$63,000, with direct cost (salaries, allowance, travel and overhead) estimated at US$5,250 per man-month. The physical contingency has been calculated at 10% of base cost on all investment items, while the price contingencies (local and foreign) have been calculated on base cost plus physical contingency, as of the end of June 1979, at the annual rate - 191-

of 7% for civil works and 6% for all other expenditures. Price contingencies on foreign exchange costs are based on Bank guidelines while the price contingencies for local project cost components were calculated on the basis of the La Paz Consumer Price Index, the only official índex in Bolivia. While other indices, prepared internally by the Central Bank and the M4inistry of Planning and Coord4 niation, indicate higher price increases for the country as a whole, the Pa Paz index was chosen because it is the best available proxy for prices farmers pay for inputs and receive for products in the project area for which La Paz is the major market. Project cost details are in Annex 3.

Total Proiect Costa

00 _ ------Us000------S------SOrb'OOOf------as.ioe ¡l l.ocal Foreizn Tota1 Local Foreiín Total Ex,ch,- e c. C.)

Proudctive Investtient Far,- Invesrtment 28,961.00 2,583.00 3:,544.00 1,41,8.05 129.15 1,577.20 8.9 2Pr .ract0rs 72D.00 6,480.00 7,200.00 36.00 324.00 26000 90.0 '. 2r,¿ n'ion Credit 27,;7_.00 12,857.08 40,723).00 1,393.0 642.85 2,03t._5 31., 2n.S orestrY 4-'f.80 1.497.8 5.5._60 223.09 74.89 297.98 25.1 i,g

Su.total h2jI14.80l 23.407.8r1 1\5~.32.34 3.jlOO.74 170.89 4.271.t.3 27.4

1 i.fras trocture 5,976.00 1,280.00 7,2ír.01' 298.bO 64.00 36'.S0 17.e _ 'ter Supply and Waste Disposal 3j,10o,G0 _350o.0n 0.0 155.oO 175.00 3300 53.r O 071.00 4 7 3 OC ___15___17_00_3_.00 53. 13to(.11 .u)0 9007f,20rv _ii3.S(o4,7 !),0C 239.00 692 .00 34.5 2 e.r.Sç dc'.- Teehoncal Support 4', 24 .00 10."32.00 _3, e O 7,38.'0 546.b0 2. 05 .30 20.1 ______L ch'1a t 9 6 0 i_ _74_ _0______1- ic>c. 89;Sll 9 . 8 0 35,:_ (93.24 1.956.49 7 .l.73 :5.

1,170.4'. 2,nin.40 1.02.20 68.52 101.52 175.0' 2- . LCf 22.07.60 7.960.20 3-,,l47.80 1,110.38 397.01 I.-5.!39 ,tal Pro ent Cost 137.242.80 49.100.40 LS6.54.2O 6.872.14 ?,4S5.02 9.327.1e 2t.

E. Financing

3.13 The proposed IDA credit wouild finance US$3.0 million equivalent to 32% of the total project costs, with the remainder of the funda (US$6.3 mil- líon) to be provided by IFAD (US$4.0 million), the Gavernuient(US$2.2 million) and the beneficiaries (US$.1 million). The proposed financing plan is as follows: Pr,iect inanci-L

(17S.' 00)

P,anl7 _ v,rue,t xrlnt ñ Rn7einialrjes - hí t

Aetoaet 7. .;mount ___ A OMLm-1_. Aáp2unt 7; Amo.,-

ProO',cíiveI'¡v&st,.ent

Ce-7 ore. itive'není - - 1,246 79 30ú 19 25 2 1,577 100 Tr,,ctzera - - 324 90 36 10 - - 3, 0 100 Pr,d,ction Credit - - 1,630 80 407 20 - - 2.0'7 104 Fore-try 0 57 53 60 20 81 27 _ _ 28 l00

Sut-Lttal 157 4 3.260 76 870 19 25 1 4 10

__f a t etc' ti re

Roads 232 64 _ _ 131 36 - - 3e3 100 later supply and waste disposal 211 64 _ 44 13 75 23 330 100

fl.tt-rota. / ;3 64 17-5 25 7 1 3 lOI

,'d_.. 1.rr .t;e7 and Tenhn.ical 0.02l,8<368 - - 852 22 - - 2,te5 100

Totjl F,iielin Costo 2,733 32 3,260 43 1,857 24 100 1 7,r60 100

CeetieOenenie7 67- 34 742 44 348 21 22 1 1-7i 1008

Tl1 lroert __tsto 3,0Q 32 ájU 43 2,205 24 122 1 9.327 10l - 20 -

3.14 The IDA credit and IFAD funds would cover 100% of the foreign exchange costs (US$2.5 million) and 65%, or US$4.5 million, of local costs; the Government would contribute about 24% (US$2.2 million) of total project costs. The IDA credit would cover 43% of the foreign exchange costs (US$1.1 million) and 28%, or US$1.9 million, of local costs.

3.15 The Government would be the borrower and would bear the foreign exchange risk. The IDA credit would be at standard terms for Bolivia, and the IFAD loan would be on intermediate terms, with an interest rate of 4% annually and a maturity period of 20 years, including a grace period of five years. The IDA credit would be used to finance forestry, roads, water supply and waste disposal facilities, and technical and administrative support (US$2.4 million, excluding contingencies), while the IFAD loan would be used to finance the credit and forestry program (US$3.3 million, excluding contingencies). Similar to the on-lending procedures under the Ingavi and Ulla Ulla Projects, proceeds of the credit as well as Government counterpart funds, would be channeled through the Central Bank to the Project Unit and other participating agencies. Funds would be disbursed from the Central Bank project accounts only on authorization from the Project Unit, except in the case of BAB where funds would be disbursed against evidence of disbursement by BAB on subloans to project beneficiaries.

F. Procurement

3.16 Contracts for the purchase of equipment and vehicles would total US$718,550, excluding contingency. Individual contracts in excess of US$100,000 equivalent would be procured through international competitive bidding according to IDA procedures. Purchases of less than US$100,000 would be procured through local competitive bidding according to local procedures, which have proven satisfactory to IDA. Procurement of farm inputs would be carried out by farmers through normal commercial channels because of the size and timing of individual purchases and cattle would be procured from the Project Unit's acclimatization center. Since road works (US$363,000, excluding contingency) are spread out within the project area and include mainly improvement in existing tracts, they would be undertaken by SNC on force account. Civil works (US$733,300, excluding contingency) for project facilities would be carried out through local competitive bidding procedures, which are acceptable to the Bank. Assurances were obtained on the above during negotiations.

G. Disbursement

3.17 The proceeds of the IDA credit would be disbursed over a period of four and one-half years as follows: (a) 100% of foreign expenditures or 64% of local expenditures for the purchase of equipment and vehicles (excluding tractors) for the Project Unit and CDF; (b) 100% of foreign expenditures for consultant services for the Project Unit; (c) 64% of total expenditures for civil works for roads and water supply and waste disposal facilities; (d) 64% of total expenditures for operating costs for the Project Unit and CDF; and (e) 42% of subloans for Forestry Development. - 21 -

3.18 The above figures include US$80,000 for physical contingencies and US$120,000 for price contingencies; the balance of US$365,000 would be initially unallocated.

3.19 Disbursements would be supported by normal documentation except for those for farm subloans and civil works carried out through torce account, which would be made against a certified statement of expenditures, the documentation for which would not be submitted to IDA for review, but would be retained by the Government and made available for inspection by IDA during the course of project supervision. Concerning disbursements against statements of expendi- ture, the Project Unit, SNC and BAB have previous Bank/IDA experience, which has been generally satisfactory. Furthermore, the Project Unit and each participating agency would maintain a separate project account for each component which would be audited annually by independent auditors (para 4.19).

3.20 The estimated schedule of disbursements by IDA is given below, assuming that the date of loan effectiveness would be October 1979.

Estimated Schedule of Disbursements

Fiscal Year Cumulative Disbursements and Quarter at End of Quarter (US$'000)

1980

March 31, 1980 50 June 30, 1980 150

1981

September 30, 1980 300 December 31, 1980 500 March 31, 1981 750 June 30, 1981 1,000

1982

September 30, 1981 1,300 December 31, 1981 1,500 March 31, 1982 1,700 June 30, 1982 1,900

1983

September 30, 1982 2,050 December 31, 1982 2,300 March 31, 1983 2,450 June 30, 1983 2,600

1984

September 30, 1983 2,700 December 31, 1983 2,800 March 31, 1984 2,900 June 30, 1985 3,000 - 22 -

IV. PROJECT IMPLEMENTATION

A. Organization and Management

4.01 The proposed Omasuyos-Los Andes Project is similar to the Ingavi Project and also deals with small farmers in areas adjacent to Ingavi. Con- sequently, the Ingavi Project Unit would be expanded and strengthened to incorporate the Omasuyos-Los Andes Project, under the auspices of MACA, and would be responsible for project implementation. This Unit would provide the institutional framework for delivering an integrated service package to the farmer groups and ensuring coordination among the principal public agencies in the Altiplano. The approval of the decree and statutes, satisfactory to IDA, for the establishment of a central semi-autonomous agency under MACA for the implementation of the on-going Ingavi Project and the proposed Omasuyos-Los Andes Project was a condition of negotiations. Additionally, an assurance was obtained during negotiations that the Government would not modify the decree and statutes creating the Project Unit without IDA's concurrence.

4.02 The Project Unit would consist of Central Administration and independent Sub-Project Units for the technical implementation of the Ingavi and Omasuyos-Los Andes Projects. The Ingavi Sub-Project Unit would be located in Viacha and the Omasuyos-Los Andes Unit would be located in either Achacachi or Huarina, the main urban centers of these project areas. The Central Administration would consist of the Board of Directors, a Project Director, an Administrative Unit, a Monitoring Unit and would include consultant services. It would also include the technical unit for the implementation of the water supply and waste disposal program under the Ingavi and Omasuyos-Los Andes Projects. The Board of Directors would be the same as that for the Ingavi Project and would be composed of representatives of MACA, CONEPLAN, Ministry of Finance, Ministry of Public Realth, CORDEPAZ, BAB, the Project Director and Sub-Directors, and a representative of the project farmers. The representative of MACA would be the chairman of the Board and the representative of CORDEPAZ would be the vice-chairman. The Board would be primarily responsible for formulating policy and project guidelines, approving a general credit policy and lending criteria, approvíng annual work programs and budgets, approving salary scales and benefits for project staff, and ensuring coordination with other agencies.

4.03 The Project Unit would be headed by a nationally recruited Project Director who would report directly to the Board of Directors and who would have extensive experience in administration and agriculture with emphasis on the small farm sector. He would be responsible for day-to-day activities and for programming and achievement of project objectives. He would coordinate the hiring of staff, preparation of annual work plans and budget, participation of public agencies in project works and procurement of goods. The Project Director would also be supported by a small core of highly qualified staff and internationally recruited specialists already hired under the Ingavi Project. The appointment of a Project Director with qualifications and experience acceptable to IDA was a condition of negotiations. - 23 -

4.04 For the technicalaspects of project implementationunder the Ingavi and Omasuyos Projects, the Project Director would be supportedby the Sub- Director of each of the projects. Akppointmentof Sub-Directorsfor the Ingavi and the Omasuyos-LosAndes Projects,with qualificationsand experienceacceptable to Ii\, will be a condition of Board Presentation. Furthermore,assurances were obtained during negotiationsthat, until three years after the project'sclosing date, any replacemnentsfor the Project I)irectorand Sub- Directors would be subject to IDA approval. To expedite procurementof goods and services by the Project Unit's CentralAdministration, assurances were obtained at negotiationsthat the Governmentwould establisha Procurement Committeewithin the Project Unit to be responsiblefor acquiringgoods and services under the project, that the Project Unit would not be subject to import restrictions,and that any duties on goods imported by the Project Unit would be paid for with funds provided by the Government. Funds for the purpose could be provided in advance to the Project Unit or the Unit could make the payments and claim reimbursementfrom the Governnent.

4.05 The Sub-Directorof the proposed Omasuyos-LosAndes Project would be an experiencedBolivian professionalwith a sound backgrolndin agricultureand administrationof rural developmentprograms. With primary responsibilityfor the technicalaspects of project implementation,he would prepare annual work programs and budgets, coordinatehiring of staff, supervisethe technical assistanceand credit operation,and coordinate the participationof public agencies in project implementation. The Sub-Directorwould be supportedby a staff consistingof one economist-statistician,one senior agriculturalist, 25 extensionpersonnel, five agricultureand livestockspecialists, five credit personnel,and administrativeand support staff. Assuranceswere obtained during negotiationsthat the Governmentwould provide the Project Unit staff with adequate incentivesand that total remunerationwould be high enough to ensure that the Project Unit could attract and retain highly qualified personnel. In order to avoid serious delays, the Unit would have a small petty cash fund to be used by the Sub-Directorfor project purposes. The Project Unit would also be supportedby an internationallyrecruited specialist in cheese and dairy production,corLtracted for 12 months, and an assurancewas obtained at negotiationsthat the slpecialistwould be employed by July 1, 1980 under terms and conditions satisfactoryto IDA.

4.06 New offices and storage and housing facilitieswould be provided for the Omasuyos-LosAndes Sub-ProjectUnit. The Omasuyos-LosAndes Unit would have two line divisions--Agricultureand Extensionand Credit. The main responsibilityof the Agricultureand ExtensionDivision would be to implementthe ¿rop and livestockprogram and provide technicalassistance to farmers. The Division would be staffed by a Division Chief; five specialists for crops, livestockand extension:five zone chiefs; 18 extensionagents; two social workers; and support staff. Priority for selectionof extension personnelwould be given to those who are fluent in Aymara and familiarwith local conditionsand attemptswould be made to recruit some women. For logistic purposes,the project area would be divided into five production zones, each of which would have a zone chief, three extensionagents and one credit officer. Each zone chief would superviseand coordinateall the field and operationalactivities of his area and would report directly to the Division Chief. - 24 -

4.07 The technical assistance delivery system would be similar to that used in Ingavi, which is now working out satisfactorily. By year 4, 18 extension agents would be employed to work directly with about 6,000 beneficiaries. These extension agents, however, would be supported by "promotores" selected from farmer groups. It is expected that each group would elect two promotores, preferably a man and a woman. The promoters would not be paid directly for their work but would receive production obtained from demonstration plots or seeds provided by the Project Unit to promote higher yielding varieties. The promotores would assist extension agents to (a) expedite the rate of adoption of improved farming systems; (b) reach a large number of farm families; (c) develop farmer confidence; and (d) acquire feedback data from the field.

4.08 The extension staff would assist in forming farmer groups, and would provide technical support to farmers in management decisions relating to crop and livestock development programs, on-farm investments, factor and product marketing and implementation of production management systems. Additionally, the extension agents would aid farm families in preparing farm investment plans based on improved farming systems and practices, farmer's resources and capa- bilities, and market potential of farm products. Group leaders would be assisted in the preparation of subloan applications and related documents. Farmers would also be provided with veterinary services and assistance in the form of acquiring dairy cattle and training in the use of simple procedures for control and prevention of parasites and other diseases. A demonstration program would be established to show farmers the benefits under conditions of improved farming methods and systems (improved cropping pattern, seeding rates and spacing, improved land preparation, and planting and harvesting dates). The extension staff would also promote credit and maintain close liaison with the El Belen Experiment Station in the project area. To facilitate the work of the extension personnel, vehicles, motorcycles, audio- visual aids and radio communications would be provided.

4.09 The Credit Division would be responsible for the implementation of the credit program (promotion, preparation of farm investment plans and loan applications, loan application processing, and supervision). The Credit Division would consist of a division chief, one accountant, one bookkeeper and support staff and five credit officers, one for each zone.

B. Training

4.10 The Agriculture and Extension Division, in collaboration with IBTA, would be responsible for planning and organizing training courses for extension staff, promotores and farm families. These courses would focus on technical aspects relating to agriculture and livestock development, credit promotion and supervision, preparation of farm investment plans, and delivery of technical assistance to farmers and would be given at a training center to be constructed at the El Belen Experiment Station and managed by the Project Unit. A 5- to 10-ha model farm for crops would be located adjacent to the training center for field demonstrations and to provide practical experience to participants of training courses. - 25 -

C. Input Supply System

4.11 In víew of the scarcity of inputs from commercial sources, the availability and quality of inputs would be assured by the Project Unit, which would initially be responsible for the procurement and distrloution of inputs that are not readily available in the project areas. The main input supply system would be located in Viacha and storage facilities would be established in either Achacachi or Ruarina for the Omasuyos-Los Andes Project. To this effect, assurances were obtaíned during negotiations that t:heProject Unit would continue to maintain the revolving fund for input supply, as established under the Ingavi Project, and that the Government would increase this revolving fund from US$120,000 to US$200,000 to ensure sufficient and timely availability of inputs to project farmers. During project implementation, farmers in the project areas would establish their own input supply system. Assurances were obtained that the Project Unit, in collaboration with DESEC, would establish and provide technical assístance to a Central Cooperative and that the Project Unit would submit to IDA by December 1, 1982 a proposal outlining the terms and conditions, including a timetable, under which the Project Unit's input supply program would be transferred to the Central Cooperative for supplying inputs to farmers in Altiplano Norte.

4.12 The acclimatization facílities of Choquenaira and Cochabamba would be expanded to ensure timely availability of improved dairy cattle in the project areas. Assurances that the Project Unit would maintain separate accounts for the input supply system and the acelimatization center and that it would establish cattle príces at sufficient levels to recover its investment and operating costs were obtained at negotiations.

D. Partlcipating Institutions

4.13 SNC would be responsible for the road program, while CDF would implement the forestry component under the project. The Project Unít would enter into operational agreements with SNC and CDF for the implementation of each of the respective components. The signing of an agreement with the concerned entity, satisfactory to IDA, would be a condition of dísbursement for the component involved. Additionally, assuiranceswere obtained during negotiations that the Government would cause SNC to (a) prepare by April 1, 1980, a study, including a timetable, satisfactory to IDA, for the improvement of about 50 km of feeder roads in the project area; (b) improve by December 31, 1980 the sections of the road between Achacachi and Ancoraimes to ensure accessibility throughout the rainy season; (c) utilize the Ingavi Project road equipment for the improvement and maintenance of about 50 km of feeder roads; and (d) maintain the project roads during and after the project period.

4.14 BAB would be responsible for the disbursement and collection of subloan repayments. Conditions of loan effectiveness would be that, under the credit program (a) a subsidiary agreement between the Central Bank and BAB and a contractual agreement between the Project Unit and BAB, satisfactory to IDA, had been signed, and (b) the Government had established a credit revolving fund ln BAB, amounting to about US$100,000, for the execution of - 26 - the credit program and set rules and guidelines for its operation. To facilitate the implementationof the credit program, BAB would open a regional agency in either Achacachi or Huarina where the Omasuyos-LosAndes Unit would be located and provide it with the necessary staff, furniture and equipment. Assurances to this effect were obtained during negotiations.

4.15 INFOL, INBOPIA, and the National Manpower Services (FOMO) would provide support to the Project Unit's extension service to promote farmer participation in the handicraft activities. An assurancewas obtained at negotiationsthat the Government,by April 1, 1980, would cause the Project Unit to enter into a contractualarrangement with INFOL, INBOPIA and FOMO for the promotion and developmentof handicraft activities in the project area. The Project Unit would receive support and advice from the Ministry of Social Security and Public Health (MPSSP),as under the Ingavi Project, for the implementationof the water supply and waste disposal facilitiescomponent.

E. CoordinatingCommittee

4.16 A CoordinatingCommittee, consisting of representativesfrom the project staff and beneficiaries,would be set up to improve communications between project personnel and farmers and to ensure direct farmer participation in project planning and implementation. The Committee,which would be chaired by the Sub-Director,would function at an advisory level on matters relating to programs undertaken by the project and any outstandingissues which might arise between project management and farmers. Assurances on the above were obtained during negotiations.

F. Lending Policies and Procedures

4.17 On-farm investmentand productioncredit would be channeled through BAB, which would be primarily responsiblefor the disbursementand collection of funds, and for its services,BAB would receive a margin of 3% on subloans to farmers. The credit delivery system would be similar to the pattern successfullyimplemented under the Ingavi Project. To avert duplicationof efforts in the project area insofar as providing credit is concerned,assurances were obtained at negotiationsthat no further CORDEPAZ,MACA, or SNDC agriculturalcredit funds or funds under any other Governmentfinancial assistance programs would be committed in the project area. The Government through BAB would make productioncredit available each subsequentyear for reapplicationunder the credit program. IDA disbursementsfor crop production in 1980 would begin only after the total production credit exceeded the aggregate amount extended in the preceding year in the project area under the project. In each followingyear, disbursementsfor production credit would be made only against credit in excess of the amount extended by the project during the previous year.

4.18 Subloans would be to farmer groups, and all members of a farmer group would be collectivelyresponsible for the repaymentof the subloan. Subloans would be for the purchase of livestock(cattle, sheep and alpaca), corrals - 27 - and sheds, silos, wells and pumps, equipment and farm tools, improved seeds, agricultural chemicals, oxen, machinery services, forestry, fisheries and vegetable growing. Subloan maturities for on-farm investments would not exceed six years, with grace periods up to two years. Likewise, subloan maturities for production credit would not exceed 15 months, with no grace period. The maturity au±d grace period of subloans to approximately 600 farmers who would be integrating forestry activities into their farming systems would be determined by the Credit Division on a case-by-case basis. The interest rate on the subloans would be 12%. Under Bolivia's current rate of inflation, estimated at 15 to 18%, the proposed interest rate is negative. However, the proposed interest rate is considered justified because: (a) it ís compatible with the general interest rate level for agricultural credit; (b) it is in líne with the rates charged under Ingavi and Ulla Ulla; (e) prices for agricultural products that are produced in the project area have increased considerably less than the general price index; and (d) credits would be given to the poorest segments of the Bolivian population. For subloans to farmer groups, security would be in the form of chattel mortgages on the crops, farm equipment and implements and livestock and any other assets as required, plus the joint liability of each member of the group. The Project Unit would follow the lending procedures, terms and conditions outlined in Schedule A. Assurances to this effect were obtained during negotiations.

G. Accounts and Auditing

4.19 The Project Unit would maintain separate project accounts, with sub- accounts for each project component. Similarly, participating institutions responsible for implementing a projject component would also maintain separate project accounts. Assurance were obtained during negotiations that the Project Unit and the participating institutions would maintain separate project accounts which would also be audited annually by independent auditors, satisfactory to IDA, according to procedures acceptable to IDA, and audited reports would be forwarded to IDA within four months of the close of each fiscal year.

E. Monitor:ing and Evaluation

4.20 The Monitoring and Evaluiation section already set up under the Ingavi Project would be centralized and responsible for maintaining a continuous study of project activities and performance. The section would employ a simple and comprehensive system for collecting data that would assist management in decision-making. Data would be analyzed to evaluate the social and economic impact of the project, the effectiveness of the credit and technical assistance delivery system, and whether or not project targets for the various components were beíng achieved. Extension agents would provide input in the above exercise, gathering data during the preparation of the farm investment plans and subloan applications and during field visits.

4.21 The work of the Monitoring and Evaluation Section would be comple- mented by the Government's proposed "monitoríng system" for the Altiplano Norte. The Government has requested a grant under IFAD's technical assistance - 28 - program for the establishment of an independent monitoring system for the Alti- plano Norte for conducting baseline surveys and evaluating the socio-economic impact of the Omasuyos-Los Andes, Ingavi and Ulla Ulla Projects. IFAD has indicated its willingness to finance such a program and is now awaiting Gov- ernment's detailed proposal for an independent monitoring system. It is expected that the proposed program could begin by January 1980. Assurances were obtained during negotiations that the above monitoring program would be acceptable to IFAD and IDA.

4.22 The Project Unit would prepare quarterly progress reports on project performance and prepare a project completion report. Assurances were obtained that the Project Unit would send quarterly progress reports to IDA within two months of the end of each quarter and that a project completion report would be submitted to IDA not later than six months after project completion.

V. SPECIFICATIONS OF FARM MODELS

5.01 The principal objective of the farm development program is to increase food production and help small farm families become commercial entrepreneurs and thus increase their income levels. The farm development program is based on improvements of farming systems and the farming practices currently used rather than on major technological changes. The gradual introduction of both improved farming practices and the use of credit supported with technical assistance would provide the impetus for increased farmer participation and ensure farmer acceptance. As an approximation, five farm models are outlined in Annex 2 to illustrate expected progress of the farm development program and show the expected financial returns to the farmer.

Cropping Pattern and Intensity and Livestock Activities

5.02 The recommended cropping pattern includes crops that are typically grown in the area. Under the proposed cropping pattern, fallow land would be brought into production, thus increasing cropping intensity. Full development of project implementation would be reached in the fourth year for crops and during the eighth year for livestock.

5.03 In the proposed crop-livestock farming systems as depicted in the models for dairy cattle, sheep and alpaca, emphasis would be given to increasing the area planted with potatoes, since higher productivity can be achieved with comparative ease and potatoes are readily marketable; quinua, which has a potential cash value and high protein content for human consumption; broad beans, which are used for human consumption as well as for animal feed; barley, traditionally an important fodder crop that does relatively well on the Alti- plano; and alfalfa, grown for fodder and also useful in crop rotations due to its nitrogen-fixing properties. About 10% of the beneficiaries would include forestry to produce both fuel and construction wood. Each participant, on the average, would establish forestry on 1 ha of land. The 1-ha model used to illustrate the forestry system would be planted on communally held or private marginal land that cannot be cropped or profitably grazed. Trees would be harvested in 10-year rotations on one-tenth of a hectare each year, beginning - 29 - seven years after planting, and would provide enough wood to satisfy the fuel and construction demand of a family a.s well as generate additional cash. It would not be necessary to replant after harvest as Eucalyptus sprouts again. The plantation would be included ín t.he global farm plan and credit would be provided for the initial investment.

5.04 In the sheep or alpaca models, crops would account for about 2 ha of the 3.6 ha used and the remaining 1.6 ha of pasture would be fertilized so that the carrying capacity could increase from 0.7 to 1.2 animal units per ha. In contrast, the dairy cattle farming system would place more emphasis on fodder such as barley and alfalfa due to the high nutritional requirements of dairy cattle. In addition to the 3.6-ha farm, each family would have access to 11 ha of communal, unimproved pasture land which would have a carrying capacity of about 0.7 animal units per ha.. Under improved crop farming systems, potatoes and quinua would be the prin.cipal crop, while the areas for other food and fodder crops would remain al.most unchanged. Based on the proposed farming systems, cropping intensity for the 1.0-ha crop model would increase from 88% to 100%; for the 3.6-ha models (both for crop only and crop-livestock models), cropping intensity would increase from 69% to 100%. The proposed cropping pattern and intensity for ea.ch model are outlined :inTable 1, Annex 2.

Yields and Prices

5.05 Yield assumptions are based. on those currently obtained by farmers in the project area that receive technical assistance from CORDEPAZ and MACA. Farmers participating in the adjacent Ingavi Project have similar yields. Nonetheless, crop yields are projected to increase gradually over a four-year period to account for both the probable reticence to techical assistance that is expected and losses due to periodic adverse conditions inherent in the Alti- plano. Yields for crop and livestock used in the farm deve.lopmentmodels are as follows:

Crops

With Project Without ------Years------Unit Pro¡ect 1 2 3 4

Potatoes kg/ha 4,000 4,400 5,300 7,000 8,000 Oca kg/ha 2,500 2,500 2,500 2,550 2,600 Quinua kg/ha 500 590 650 790 850 Broad Beans kg/ha 550 650 750 800 850 Barley (hay) kg/ha 2,700 3,500 4,200 4,600 5,000 Alfalfa (green) kg/ha 6,300 6,300 7,500 10,000 12,500

Livestock

With Project Without ------Years------Unit Project 1 2 3 4 5 12

Wool kg/animal 0.76 0.76 0.80 1.20 1.50 2.50 2.8 Alpaca fiber kg/animal 0.80 0.80 0.80 0.82 0.85 0.97 1.14 Milk lt/cow/day 3 3 5 6 8 8 8

Farmgate prices have been used in costing inputs and evaluating output. - 30 -

Labor and Energy Requirements

5.06 The average size of the farm family is five persons, equivalent to 2.25 working adults or to about 45 man-days per month, giving a total of 540 man-days of annual family labor availability. This supply of labor is more than ample to carry out the proposed agricultural programs. Tables, 3, 12, 22, 31 and 35 of Annex 2 show the estimated labor budget for each farm model.

5.07 Most energy requirements for farm work are presently supplied by oxen although a few tractors are being used in the project area. Farmers also increase incomes by fattening working oxen and selling them for slaughter. Provision for purchase of oxen and tractors would be made under the project.

Farm Investments

5.08 There are few farm investments items envisaged under the proposed farm development program. No investment is foreseen as necessary for those farmers that are dedicated exclusively to crops. Alpaca and sheep farmers' investments would consist of holding corrals, hand shears, alpaca fíber- holding tables, and rams. Dairy farmers that follow the proposed model would require the largest investments, which would include: a small milking barn, a bull and three pregnant heifers, a water well and pump, milk pails, and a kettle.

New Farm Practices

5.09 All five models are based on existing farming practices that would be upgraded. Such practices as use of improved seed; plowing to sufficient depth; seeding at proper space and depth; and seeding and harvesting on the most appropriate dates would be quickly adopted and would have the most imme- diate impact on productivity and overall production. Fertilizers, weed killers and fungicides, which depend to a greater degree on the input cost-crop production value ratio, would probably be introduced more gradually. Technical assistance for sheep and alpaca would mainly involve introducing simple management practices such as shearing techniques, parasite control and prevention, vitamin and mineral provision, introduction of schedules for breeding and calving, and, at a later stage, the introduction of selected breeding stock. For dairy cattle, technical assistance would center around introducing practices such as milking with two hands, milking twice a day, planning breeding and calving dates, increasing the lactation period from 180 to 240 days and applying disease prevention measures. - 31 -

VI. PRODUCTION AND MARKETING

Production

6.01 The annual production of about 6,000 farmers participating in the project would be as follows:

---- Production in Tons----- At Full Product Present Development

Potatoes 8,040 31,600 Oca 1,500 1,560 Quinua 265 1,169 Beans 584 1,340 Meat (mutton) 23 139 Milk (in thousand liters) 540 8,280 Wool 1.4 16.4 Alpaca Fiber 1.8 7.8 Forestry (m3) - 2,400

Marketing

6.02 Under present conditions, given the subsistence nature of agriculture in the area, farmers sell only a small part of their agricultural output. Products that are traded are usually sold to intermediaries from La Paz at one of the 16 weekly rural fairs in the area; the products are then transported by trucks to the cities, mainly to La llaz. Even though a fair degree of competition exists among these collectors, farmers often receive only a small percentage of the La Paz retail price. This is apparently due to the high commercialization costs, which, in turn, are caused by the small-scale operation of most collectors and frequent transport and wastage problems. Attempts by the farmers to by-pass these collectors and sell d:írectlyto consumers in the cities have been only moderately successful. When undertaken by individual farmers, this operation is costly and time-consurwLng;efforts to organize farmers' cooperatives to undertake this marketing have not been very successful. However, under the project, support would be provided to the Central Cooperative and farmer groups to improve marketing Eunctions.

6.03 Marketing prospects for potatoes appear satisfactory. Tentative results of an on-going study by MACA indicates that the country will experience a growing deficit in the next few years, when consumption should out- strip production possibly by 100,000 tons, much in excess of the incremental production of the project (about 31,600 tons).

6.04 Part of the milk now produced in the project area is sold to PIL, which processes it into dairy products before selling it in La Paz. Sone of the milk also finds its way, in a non-pasteurized and often adulterated form to La Paz (in spite of a law forbidding the sale of non-pasteurized milk). - 32 -

Also, some farmers process their milk into cheese which they sell at the local fairs. There is considerablescope in demand for increasingmilk production in the Altiplano,mostly in order to cater to the market of La Paz. In 1975, for instance,consumption of milk and dairy products in La Paz amounted to a daily average (expressedin milk equivalent)of some 86,400 liters which was mostly imported. Only 7,500 liters, or less than 9%, came from the Altiplano (1,500 liters through PIL, and 6,000 liters through other intermediaries).

6.05 Channelingof any future increase of milk productionin the Alti- plano to the market of La Paz through the PIL plant appears both the easiest-- because of existing collectionfacilities--and the safest way to satisfy consumer demand in La Paz. Unfortunately,however, the Governnent-imposed prices PIL could pay farmers for milk discouraged them from selling to the pasteurizationplant. PIL now pays $b 3.8 per liter of milk (with a 3.4% fat content). Alternatively,farmers can sell their milk to intermediaríesat $b 4.5 to $b 4.8 per liter or process it into cheese to be sold at a price amounting to $b 4 to $b 8 per liter of milk used. As a result, direct sales to PIL are low and the plant works below its capacity. In 1976 the plant, with a daily capacity of 55,000 liters, processed only an average of 16,700 liters per day utilizing30% of its capacity. The Government justífies holding PILUs buying prices down because of the necessity to maintain low milk prices for the consumers in La Paz. This objective,however, is only partially achieved since PIL sells only one-fourth of the milk and dairy products consumed in La Paz, while the rest, mostly imported,is sold at much higher prices. Under the present situation,it therefore appears thac PIL would not be able to buy a sizable share of the milk produced in the Altiplano, particularlyin the project area. However, under the Ingavi Project, the Government has undertaken to prepare a comprehensiveplan for the developmentof milk production in the Altiplano which would include establishmentof a pricingpolicy that would insure sufficient incentivesto milk producers. In any event,-marketing the incrementalproduction under the project should not be a problem.

6.06 Incrementalquinua productionunder the project would be small and should be sold without difficulty. There is a shortage of quinua in the country, which already makes it difficult for wheat flour dealers to comply with a Government regulation that calls for 5% of quinua to be mixed with the flour to improve the nutritionalvalue of wheat and save foreign exchange on wheat import. This regulation is usually evaded, however, because of the present shortage of quinua. Also, the Inter-AmericanInstitute for Agricultural Sciences (IICA) plans to establish in Huarina a pilot processingplant, with a capacity of 50 tons of quinua, and the World Food Program has agreed to purchase the output of the plant for its programs in the country.

6.07 Livestock would be sold to collectors,either at fairs or directly at farmgate,and trucked to La Paz for slaughterand distributionto butchers and supermarkets. Alpaca fiber would be sold to INFOL, which is in charge of promotion of alpaca and commercializationof alpaca products and has pur- chasing centers throughout the Altiplano. Increase of production for other products (oca, beans, wool) would be small and should be marketed through the existing channels without difficulties. - 3:3 -

VII. FINANCIAL ANALYSIS

7.01 Income of the farmers participating in the project would increase significantly. As shown below, the increase in cash income would provide sufficient incentive to the farmers to participate in the deve±opment program.

Farmers' Cash Income

Without With Benefit of Cash Investment Project Full Development 1/ Cost per Family …_____-…------…US$ per family…------

1-ha Crop Model 107 248 3.5-ha Crop Model 151 908 - Sheep-Crop Model 113 847 34 Alpaca-Crop Model 121 889 70 Dairy-Crop Model 344 1,976 2,000

1/ Year 4 for crops and year 9 for animal products.

Farmers' cash income includes remuneration of family labor but does not include family consumption of foodstuff, wool, and alpaca fiber. This home consumption has been estimated on the average at US$150 per family without the project; it was also assumed that, with the project, food consumption would increase by some 20%.

7.02 Investment and incremental operating costs would be covered by credit. In the case of dairy investunent,farmers would contribute $b 500 in cash toward the cost of the water pump. In the case of the two crop models (1 ha and 3.5 ha, respectively), investment costs would be nil. For the proposed farming systems, farmers' contribution in kind or labor (not covered by credit) would be small and the firnancialrate of return on the farmers' own capital would be above 100%.

7.03 The high financial rates of return are due to the fact that the investnent per family is small and its gestation period short. Production increases are rapid and quite substantial since technological improvements (farmiíngsystems and practices) coupled with improved technical assistance, would be applied to a subsistence agricultural base. The substantial increases of family income expected should not, however, obscure the fact that, even at full development, average income per capita would remain much under the national average of about US$540.

7.04 The financial return of the forestry activity based on a 1-ha system would be 12%. However, farmers in the project area would integrate forestry activity into their improved farming systems. The land to be afforested would be marginal, uncultivated land with no alternative productive potential, and most of the farmer's required work would be done during the slack season. - 34 -

VIII. ECONOMIC ANALYSIS

A. Benefits and Justification

8.01 The proposed project is designed to reach about 6,000 families who live in absolute poverty and who until now have received only limited assistance for economic and social advancement. The project is replicablein the Altiplano region, inasmuch as it reaches many small farm families at low overall cost per beneficiary (US$1,550per beneficiary). The project area links the areas of the Ingavi and Ulla Ulla Projects, which, together, constitutethe northern Altiplano,accounting for almost 40% of the Altiplano's total population. The economic difficultiesof this region, the poorest of the country, are compounded by a fast increasingpopulation density. Average family income in the project area is less than US$100 per capita. Some 85% of the project area's rural population--about16,000 families--belongto the poverty target group.

8.02 Under the Government program for reforestationand road maintenance, new jobs for unskilledworkers would be created. The biggest project impact on the employmentsituation, however,wouldbe in the farms where more labor- intensive cultivationmethods would be promoted. On the average, the number of days of productiveemployment would be increasedby 46 working days per farm over the present situation,which would reduce the present unemployment and underemploymentof the family work force. In no case, however, would hired labor be required.

8.03 The value of incrementalproject productionhas been estimated at US$7 million per annum. This productionwill consist mainly of food crops, which would be mostly marketed but partly consumed by the families,thus improving the nutritionallevels. Cropping patterns under the project have been modeled after existing ones to ensure an easier accceptanceby the farmers and to increase their own supply of staple foods. The health situation of the participatingfamilies would also benefit from drinkingwater supply and waste disposal facilitieswhich would be provided under the project. Sales of the farmers' marketable surplus would improve the supply situationin La Paz for some of the basic food items. Increased supply of milk to the PIL plant in La Paz, if the Government increasesmilk prices, would also help the developmentof a dairy processingindustry, which, so far, has been working below capacity,mostly with imported powdered milk.

8.04 By increasingthe integrationof the participatingfarmers in a market economy, the projectwould facilitatetheir social evolution. Special attentionwould be paid to women, since they play an important role in agricultural and domestic activities. By encouragingthe recruitmentof female "promotores"and extensionworkers, and involvingwomen in the activities supportedby the extension service, the project would ensure that women are systematicallyintegrated in project development. Finally, the institution building aspect of the project would be particularlyimportant. The expansion and consolidationof the former Ingavi Project Unit into an organizationfor - 35- implementing both this and the Ingavi Project would make it the country's most advanced and experienced institution in rural development in the Altiplano. This institution could eventually emerge as a central development agency and be used as a vehicle to mount a comprehensive development program in the remaining areas of the Central and Southern Altiplano. The utilization of farmers' coúimunitiesand cooperatíves for extension and channeling of credit would lead to the strengthening of these organizations. In the project area, the creation of, and assistance to, a Central Cooperative, which would eventually take over some of the funetions of the Project Unit, would establish a unique institutional model, which could be successfuly repli- cated in other regions of the country.

B. Fiscal Impact

8.05 For the productive component (US$4.1 million, excluding contingencies), costs would be recovered through the credit program. Under the water supply and waste disposal facilities program (US$0.3 million, excluding contingency), beneficiaries would contribute $b 1,740, or about 54% of the total cost of each well, in the form of labor for excavation ($b 1,100), local building materials ($b 140) and cash payments equivalent to one-third of the value of the pump ($b 500). Likewise, beneficiaries would contribute $b 300, or about 50%, to the overall cost of pit privies in labor for excavation and construction ($b 200) and local material. Other cash costs (US$3.3 million, excluding contingency) relating to the productive support component and technical and administrative support, which would benefit a broader group than the direct participants in the project, would not be recovered.

8.06 The impact of the project on Government s finance would be limited. During the project period, the average yearly contribution would be US$550,000, or 0.3% of the 1978 Central Government expenditures. After project completion, recurrent annual expenditures would not pose a serious burden since they would amount to US$670,000, or 0.4% of the 1978 expenditures. Government revenues from the project would be negligible. Personal tax exemptions would exceed the individual income of project beneficiaries, while most of the commodities produced under the project would be for the domestic market and not subject to any sales tax. Revenues from import would also be very small since most agricultural inputs are either exempt from import tax or taxed at a low level. During the project period, average annual Government revenues from the taxes and import duties would be US$78,000.

C. Economic Rate of Return and Sensitivity

8.07 For the economic analysis, the costs of all components, productive and non-directly productive, have been taken into account. Each item was separated into local labor, imported materials and local materials categories. To account for the unemployment in the Altiplano of unskilled and family labor, a shadow wage rate of $b 35 has been taken for both (equivalent to 70% of the market wage rate). Only a few inputs have been classified as tradable and computed at border prices adjusted for transportation costs. The - 36 - principal project products have been assumed to be non-tradable. Since the standard conversionfactor is estimatedat .993, domestic prices have been maintainedfor all non-tradables. In most project products, there are well developedand competitivemarketing structures. Provisionhas been made for the replacementof all vehicles, tractors and equipment, and half of the cost of the land and the building for the Project Unit's headquartersin Viacha has been included as a project cost. Also, half of the operatingcost of the staff who would be servicing both projects has been included in the analysis.

8.08 The overall rate of return (ROR) projectedfor this project is 36%; results of the economic analysis are summarizedon page 37. The high ROR is due to improvementin the concept of the present project based on the experience of the Ingavi Project and to the fact that many farmers would participate in the project and the cost per beneficiarywould be relativelylow. Under the proposed project, the number of "non-directlyproductive" components has been kept to a minimum. The yield assumptionsfor the present project,while still conservative,reflect the encouragingexperience of the Ingavi Project. Another reason for the high level of the ROR is that most farm investmentsare small and yield a quick return inasmuch as the present subsistencelevel of agriculturewould permit substantialand rapid yield increases. It should be noted, however, that in spite of the high rate of return of the project and the substantialincreases in the incomes of the participatingfarmers, these incomeswould remain below the national average.

8.09 Other sensitivitytests were carried out to evaluate the impact on the ROR of an increase in costs or a decrease in benefits. The investment and operatingcosts (includingunskilled labor) would have to increase by 66% for the ROR to come down to the estimated opportunitycost of capital (10%). Alternatively,the benefits would have to decrease by 37% for the ROR to fall to the same level. Either alternativeappears very unlikely in view of the conservativeassumptions made for yields, cropping pattern and intensityand the adoption rate of improved technology.

D. Project Risk

8.10 Since the project is based on experiencesobtained under the two previous Bank/IDA operationsin the Altiplano, the project is consideredto be of low risk. However, judging from the experienceof the Ingavi Project, a potentialrisk for this project would lie in the difficultyof attractingand retaininga sufficientnumber of qualified staff. Because La Paz offers more amenities--andoften higher salaries--itwould be necessary to give financial compensationto the project staff to recruit them and maintain them in their posts. The problem may be especiallyacute in the case of extensionists, since a shortage of this type of personnel is reported in the country. Failure to obtain a sufficientnumber of extensionofficers would certainly affect negatively the farmers' response and the yields they would achieve. Because of this potentialproblem, project staffing has been kept at a minimum and salaries would be high enough to attract and retain highly qualifiedpersons. IOLIVIA

~8l4Suyos - flUS 9805 ftU8L DfW7 )L lIUOEC Fojail Cconn_Ic C..h Flo. !(b'000)

------^------y------~------~------~~~~~~~~~~~~~~~~~~~-~~~~ ------54 15 7,¡6 ¡0 ¡ 2 2 4 5 6 1 8 950 ¡1 1¡2 13

7,450 7,450 7.450 1 6850 1,720 7,450 , 7,850 1.450 75.20 7 .650 7,450 I 1O --op ".0d1 645 2,226 1.550 S,/91 7,1349 7,106 8,120 7171 7,520 1.715 75280 7,1380 7,715 7,415 7,380 7.530 1,415 1.5I5 7,580 7.280 3 5 .,,od. 124 2,17t 3,869 5,907 7,146 7, 7.622 7,622 7,622 7.622 7.622 2 7.622 478 1.643 3.451 5.964 1.00í Z,220 7,620 7 38 1.22 7.422 722 Sh.ep 3,989 3 989 5,989 3.989 3.989 3.1a89 273 80 ¡.32 3,087 5.421 5,646 3.853 31,91 3,655 3,197 ,1968 3,99 Alpa- 16,500 16,500 16.500 16,500 16,500 16.500 17,691 20,161 26,705 21.302 18,5Y9 16,476 16,677 ¡8,614 ¡8,777 19.817 19,685 h"s y 6,033 775 775 - - - 1,883 740 757 775 175 775 775 1,425 775 7157 15 lis 175 - - - - l-I. l _ 2,644 2640 2,640 _ _ - - - 1,432 1,936 2,66- - - - W-r.- SaPPIY ---I WOt. O¡fmpo-l 1,210 17.685 ¡1.189 1¡1¡69 11.789 11,914 i,¡789 11,189 ¡¡.789 17,6f5 11,1769 11,09 55,a7¡9 11,789 ¡1,789 11,189 1.ohnlr.¡ -l Ad,ml,,¡míi Sopporm 23,069 *,644 10,441 600 - 600 6_ 600 f 00 YiarA. I. 11 *nd f.o¡1 tl ¡ 1 - 2.400 40 0 . 00 600 -00 00 600 600 600 600

S 490 I.-la 62.Z61 36 320 » . 1.1.1 ¡,,cr..oi.I Io,,oí Co.ic1 38 15.927 5D473 69 27k *1.89966I .21 s4 4 6,S 36 W.91 se S7S 60, 84 0.1L8o

pnr,ÉtnrO L_bor Cost 186 706 796 786 186 786 786 52 175 315 525 699 751 186 106 186 186 /86 I h- crop m.dal 1,154 1,154 1,14 1 .154 .154 1 154 1 .154 ¡26 l308 581 902 ¡,05Ú0 1¡23 1,154 1,154 1¡154 1.154 1,154 3.5 h7op mo.1 1,162 1.162 1,162 1¡162 1.162 237 508 893 1.029 1 119 1,162 1,162 1,162 ¡.162 1,162 1,162 1,162 Shtap 73 644 644 644 644 644 256 446 491 552 595 612 633 637 644 644 644 AIps.. 39 112 5.350 S,9O5 5 950 6.730 4,932 5.842 6,601 7,361 8,012 8,011 7,511 6.605 5,950 5.950 bIoy 965 1,948 3,158 4,623 467 467 466 667 461 461 466 467 661 467 467ú665 !or smiy 179 467 467 467 467 461 71 11 11 71 77 77 75 17 77 154 154 154 154 77 71 77 71 00.4. ------.. B,ppy,pr -, WSi I¡.po... 60009S0 20 11 .640 12 .2 25 ti ,7 70.J3j 102l40 10 240 10 240 Aij4d U7,4 Torol Isrrm86nc.I 3O)yor Coas 7108 4£21 6 399 S1 8l349 9 02¿ 10 079 ,10859

t-m--j t-sn a-- -1t 17,029 17,029 17.029 11,029 52.029 17.029 996 2,622 5,360 9,762 12.801 15.694 11,029 17.029 17,029 17,029 17,029 1.,029 1 h. ---p -.. I 22,230 22,230 22,230 22,230 22,230 21.230 12.230 22,130 22,230 3.5 _ -r, -M.l 2.074 4,766 S.594 15,387 18.418 25,248 22,30 22.230 22,230 23,318 33,556 33,118 .1,1 33.350 3 .318 33.318 33,31U 33.518 Sh..p 1,035 3 415 7,526 14,287 1¡7952 21.29t 22,927 21,033 23,218 5*,675 ¡¡.961 12¡065 13.065 ¡3.065 12,065 12,065 .1,065 1¡,065 12,065 AIp.-. 321 1.730 3,894 ,173 8.963 10,244 11,268 55,432 59,546 46,494 51,249 5s,011 56.396 56,533 56.022 24,186 53,390 55,590 55.290 S5,S90 55,590 D^l.y 3,630 10,606 17,601 26.515 39,74 0 - J,~ jfl J14 1 240589 6o S«191¡.100 _ -_____ 2 Po,m.sry ______~~~~______¡ _6 _3.t92 _W. 141.453 139 44 141 21, ¡45.432 ¡42 142.152 542.562 lor-l _l,o,am,.rí.5 8.O s- 9 25 22 649 44,l75 4 015.126 58,508O30.211 A9?.l 2tS.848 ¡2,9941,9p 7 !_4 4j¡0S93

53,101 49,392 60,610 60.189 68,310 69^06 71,866 13,591 68.571 75.615 75.71 16.4S1 9- *-,--flt (32,177) (17.,99) (¡2,691> (1,482) 2p391 41,660 - 38 -

8.11 Given a sufficient number of extension staff, the farmers' response forecast should be easily achieved. This is particularly true for crop development since this type of activity is already known to many farmers through the efforts of SNDC, CORDEPAZ, and, in a different area, the Ingavi Project. Livestock, sheep and alpaca development is not yet as well accepted and more promotional effort would be necessary as provided by INFOL under the Ulla Ulla Project. Given the profitabílity of these activities, however, a strong response can be predicted.

8.12 Regarding livestock development, a potential bottleneck lies in the availability of dairy cattle. The number of participating farmers has been determined on the basis of an estimate of the number of dairy cattle that can be obtained from the Cochabamba region. In any case, limitation on the development of this activity could be compensated by the promotion of other types of farm development under the project (crops, sheep, alpaca). Another risk attached to the livestock component is the possible death of animals brought from Cochabamba, due to their non-adaptation to the high elevation. An acclimatization center has been provided to facilitate this transition and an existing system of insurance under the Project Unit would protect the farmers from financial loss. The experience of the Ingavi Project shows that the risk of loosing animals remains below 10%.

8.13 Climatic condition constitutes another project risk since frost may severely affect potato yields. Only certain parts of the project area, however, are subjected to severe frosts and, even there, the effect on any one farmer should be mitigated by the current practice of planting potatoes in various fields situated in different areas. Thus, for the project farmers, losses on account of frost are unlikely to exceed 10%. Climatic hazards, therefore, are unlikely to cause more than a limited and temporary set-back to the project.

E. Environmental Impact

8.14 The proposed project ís expected to have a positive environmental impact. Improvement of herds of cattle, sheep and alpaca and of the range management practices would lead to a better balance between animal resources and the carrying capacity of the land, thereby reducing soil erosion. Reforestration of public or private lands would also contribute to better soil conservation as well as reduce the practice of burning dung, thereby facilitatíng natural nitrogen fertilization. The water supply and waste disposal component would improve the hygiene and health conditions of the farmers in the project area. - 39 -

IX. SUMMARYOF AGREEMENTSREACRED AND RECOMMENDATION

9.01 Condition of negotiations were that:

(a) The Government had approved the decree and statutes, satisfactory to IDA, establishing a central semi-autonomous agency under MACA for the implementation of the on-going Ingavi Rural Development Project (Loan 1121-BO) and the proposed Omasuyos- Los Andes Rural Development Project (para 4.01);

(b) the Government had appointed a Project Director with qualí- fications and experience acceptable to IDA (para 4.03).

9.02 During negotiations, assurances were obtained from the Government that:

(a) procurement procedures would be followed as outlined in paragraph 3.16;

(b) the Government would not modify the decree and statutes creating the Project Unit without IDA's concurrence and that any replace- ments for the Project Director and Sub-Directors until three years after the project's closing date would be subject to IDA approval (paras 4.01 and 4.04);

(c) the Government would establ.isha "Procurement Committee" within the Project Unit to be responsible for acquiring goods and services under the project, that the Project Unit would not be subject to import restri.ctions,and that any duties on goods imported by the Project Unít would be paid for with funds provided by the Government (para 4.04);

(d) the Government would provide the Project Unit staff with adequate incentives and that total remuneration would be high enough to ensure that the Project Unit could attract and retain highly qualified personnel (para 4.05);

(e) the specialist in cheese and dairy production to be contracted by the Project Unit would be employed by July 1, 1980 under terms and conditions satisfactory to IDA (para 4.05);

(f) the Project unit would continue to maintain the revolving fund for input supply and that the Government would increase this revolving fund to US$200,000 to ensure sufficient and timely availability of inputs for project farmers (para 4.11);

(g) the Project Unit, in collaboration with DESEC, would establish and provide technical assistance to a Central Cooperative and that the Project Unit would submit to IDA by December 1, 1982 a proposal outlining the terms and conditions, including a timetable, under which the Project Unit's input supply program would be transferred to the Central Cooperatíve (para 4.11); - 40 -

(h) the Project Unit would maintain separate accounts for the input supply system and the acclimatization center and it would establish cattle prices at sufficient levels to recover its investment and operating costs (para 4.12);

(i) the Government would cause SNC to (í) prepare by April 1, 1980, a study, including a timetable, satisfactory to IDA, for the improvement of about 50 km of feeder roads in the project area; (ii) improve by December 31, 1980 the sections of the road between Achacachi and Ancoraímes to ensure accessibility throughout the rainy season; (iii) utilize the Ingavi Project road equipment for the improvement and maintenance of about 50 km of feeder roads; and (iv) maintain the project roads during and after the project period (para 4.13);

(j) the Government would cause BAB to establish an office with adequate staff and necessary furniture and equipment in either Achacachi or Huarina (para 4.14);

(k) the Government, by April 1, 1980, would cause the Project Unit to enter into a contractual arrangement with INFOL, INBOPIA and FOMO for the promotion and development of handicraft activities in the project area (para 4.15);

(1) the Project Unit would establish a Coordinating Committee in the project area, consisting of project staff and representatives of project beneficiaries, to function at an advisory level on matters relating to programs undertaken by the project and any issues which might arise between project management and farmers (para 4.16);

(m) no further CORDEPAZ, MACA and SNDC agricultural credit funds or funds under any Government financial assistance programs would be committed in the project area (para 4.17);

(n) the Project Unit would provide subloans to project beneficiaries according to the lending procedures and terms and conditions outlined in Schedule A (para 4.18);

(o) the Project Unit and the participating institutions would maintain separate project accounts which would also be audited annually by independent auditors, satisfactory to IDA, according to procedures acceptable to IDA, and audited reports would be forwarded to IDA within four months of the close of each fiscal year (para 4.19);

(p) the monitoring program outlined in paragraph 4.21 would be acceptable to IFAD and IDA; and

(q) the Project Unit would send quarterly progress reports to IDA within two months of the end of each quarter and that a project completion report would be submitted to IDA not later than six months after project completion (para 4.22). - 41 -

9.03 It would be a condition of Board presentationthat the Sub- Directors for the Ingavi Project and also for the Omasuyos-LosAndes Project, with qualificationsand experienceacceptable to IDA, had been appointed (para 4.04).

9.04 Conditions of effectivenesswould be that, under the credit program (i) a subsidiaryagreement between the Central Bank and BAB and a contractual agreementbetween the Project Unit and BAB, satisfactoryto IDA, had been signed, and (i>) that the Government had establisheda credit revolvingfund in BAB, amountingto about US$100,000,for the executionof the credit program and set rules and guidelines for its operation (para 4.14).

9.05 Conditionsof disbursementunder the forestryprogram would be that a contractualagreement between the Project Unit and CDF, satisfactory to IDA, had been signed (para 4.13) and under the road program, that a contractualagreement between the Project Unit and SNC, satisfactoryto IDA, had been signed (para 4.13).

9.06 With the above assurancesand conditions,the proposed project is suitable for IDA credit of US$3 mi.llionat standard terms.

May 22, 1979 - 42 -

SCHEDULEA Page 1

BOLIVIA

OMASUYOS- LOS ANDES RURAL DEVELOPMENT PROJECT

Lending Procedures, Terms and Conditions, and Flow of Funds

1. The Project Unit would give technical assistance and credit to small farmers through farmer groups in the project area on terms and conditions as demanded by the needs of agricultural production when technical assistance reasonably guarantees good cropping and financíal success.

2. Only the Project Unit would provide credit within the project area; no further CORDEPAZ, MACA, or SNDC agricultural credit funds or funds under any government financial assistance programs would be committed in the project area.

3. About 6,000 farming families involving an estimated 150 farming groups would participate under the project. Information on the phasing of the lending program is shown in Table 1.

4. The lending procedures called for under the project would be based on the Ingavi credit delivery system and consist of the following: credit promotion, preparation of farm plans and subloan applications, subloan approvals, disbursement and collection, credit and technical supervision.

Credit Promotion

5. A promotion program would be set up to inform farmers of the benefits of extension and credit. This credit promotion program would be coordinated with other institutions working in the area such as the educational broadcasting company that could help through its radio programs for farmers. Most of the promotion effort, however, would be undertaken by the Project Unit's extension agents, who would contact farmer group leaders and organize meetings for oral presentation of the project to the farmers. The farmers' market would also provide excellent opportunities for meeting farmers and distributing simple information, possibly with visual aids. It is expected that the promotion effort would obtain a satisfactory response because most farmers in the project area are aware of the on-going regional programs of the Ingavi Project, the Northern Altiplano Project, the National Community Development Service and of the benefits they offer.

Preparation of Farm Plans and Loan Applications

6. When the farmers of a community want to participate in the project they would apply for a subloan that would be based on a farm plan that showed the present situation, with special reference to cropping patterns and yields, animal stock and output, available family labor, the farmer's farming experience, the farmer's present assets and liabilities and the legal status of the group to which he belongs. The extension agents would visit the farm and draw up a development plan that would indicate the new activities, the required - 43 -

SCHEDULE A Page 2 changes in cropping patterns, the investments to be made, and the quantity of required inputs and it would also give an estimation of future production related to a time schedule.

7. Using this farm development plan, the zonal credit officer would then establish the credit requirements, repayment capability, and timing and type of disbursements (in kind or cash) and make a recommendation on the type and extent of credit required to fulfill the proposed farm development plan. Only in difficult cases would the credit officer be required to visit the farm with the extension agent. The loan applications and farm development plans for all farmers of a group would then be transmitted together to the Sub-Project Unit's Credit Division Chief for review. After this, these documents would be sent to the Credit Committee for subloan approval.

8. Loan Approval. A Credit Committee consisting of the Project Unit's Sub-Director and the Credit and Agricultural Extension Division Chiefs would approve the subloans, meeting as frequently as required. It would also consider modifications of on-going subloans such as proposed changes in subloan maturities or investment plans. After approval by the Committee, subloan applications would be passed on to the proposed Agricul- tural Bank of Bolivia (BAB) either in Achacachi or Huarina where a new BAB branch office would be installed. Once a subloan is approved by the Credit Committee, BAB could refuse to disburse it only on grounds of legal consi- derations such as improper legal status of the group or an existing mortgage on a farmer's assets.

Disbursement and Collection

9. Subloans would be made to groups, the members of which would be held collectively responsible for repayment. Therefore, groups would be required to have a formal legal status. Farm group leaders would be responsible for distributing the inputs amnong the farmers and, later on, for recovering the subloans from them and forwarding the money to the BAB office.

10. Once BAB receives the approved subloan application, the legal loan documents would be drawn up, reviewed by the lawyer and approved by the director of the BAB office (authority to approve these documents could be delegated to the BAB zonal officer in Achacachi to avoid delays). Documents would be signed in zonal offices which would also handle disbursement of funds.

11. In the case of loans given in kind by the Project Unit, such as seeds, fertilizers and pesticides, BAB would make out a check payable to the group leader but would send it to the zonal credit officer of the Project Unit; upon delivery of the inputs, this officer would have the leader endorse the check over to the Project Unit. If the subloan is for inputs that are not stocked by the Project Unit, such as farm implements or livestock, BAB would make out a check payable to the leader which he could then cash or endorse to the seller at the time of purchase. - 44 - SCHEDULE A Page 3

12. The subloan repaymentschedule would be decidedby BAB and the Project Unit's Credit Division Chief, taking account of the financialconstraints facing small farmers. A slight flexibilitywould thus be allowed to enable farmers to take advantageof the higher prices that can be obtained several months after the harvest. Group leaderswould be responsiblefor either collectingthe amounts due from the individualfarmers or for bringing all farmers to the zonal office at a time arrangedby the extensionagent for repayment.

13. BAB would open a regional agency in either Achacachi or Hurarina for this project and would provide it with the necessarystaff, furniture and equipment. The agency would also be flexible in working hours when necessary to accommodateits clients. One of the project vehicles would be used as a mobile banking window by the Project'sCredit Division and BAB staff.

Credit and TechnicalSupervísion

14. Technicalsupervision and assistancewould be of prime importance to ensure that farmers get full benefits from the inputs they purchase, while credit supervisionwould ensure that the subloan is being used for the purpose indicatedin the subloanapplication. Both tasks would be responsí- bilities of the extensionagent who would call upon the Project Unit's credit officer if necessary.

Terms of Subloans

15. (a) Subloans would carry an interest rate of 12% per annum, which is consistentwith interest rates chargedunder other Bank-supportedprojects ín the Altiplano; it would also be in line with the Government'spolicy to maintain uniform interest rates;

(b) Maturities and grace periodswould not exceed the following:

Type of Development Maturity Grace Period ------Years------

On-farm investment 6.00 2.0 Production credit 1.25 -

However, the maturity and grace period of subloans to about 600 farmers, who would be integratingforestry investmentinto their farming systems, would be determinedby the Credit Division on a case-by-casebasis.

Flow of Funds

16. After subloan disbursements (in kind or cash), BAB would collect the disbursementreceipts and send them to the CentralBank for total reimbursement. TtmeCentral Bank would then forwardits reimbursementclaims to IDA. Under this procedure, the entire credit risk would be assumed by the Government,as BAB, actirg as a bankingwindow, would transfer all subloan recovery funds to the Central Bank. IDA disbursementsfor crop - 45 -

SCHEDULEA Page 4 productionin 1980 would begin only after the total production credit exceeded the aggregateamount extended in the precedingyear in the project area under the project. In each followingyear, disbursementsfor production credit would be made only against credit in excess of the amount extended by the project during the previous year.

17. BAB would be required to set up a revolvingfund of $b 2 million to finance the subloans prior to reimbursementby the Central Bank.

GovernmentLending

18. (a) Credit funds (US$100,0000established in BAB would be replenishedby the CentralBank for 100 for disbursements on subloans;

(b) BAB would repay to the Governmentthrough the Central Bank both principaland interest as they are receivedfrom sub-borrowers;

(d) For its services,BAB would receivea service fee of 37 on subloans to farmers. - 46 -

Table 1

BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMENT PROJECT

Phasing of the Lending Program 1/

Number of Participatin_ Farmers Type of Model Year 1 Year 2 Year 3 Year 4 Total

1-ha crop 500 500 500 1,000 2,500

3.5-ha crop 200 200 300 300 1,000

Sheep 100 200 300 400 1,000

Alpaca 50 100 150 200 500

Daíry 200 200 300 300 1,000

Total 1_,050 _200 1,550 2,200 6_000

1/ Forestry would be undertaken by one-tenth of the 6,000 farmers on about 600 ha. The number of estimated participating farmers for forestry would be:

Year 1 Year 2 Year 3 Year 4 Total

60 180 180 180 600

February 26, 1979 - 47 -

ANNEX 1

BOLIVIA

OMASUYOS- LOS ANDES RURAL DEVELOPMENTPROJECT

Consultant'sTerms of Reference

Dairy ManaRement - Cheese Production

1. The specialistshould have practical experience in dairy farm management in Latin America. In addition, he should be experiencedin both cheese-makingand marketing at the rural level. He should be able to read, write and speak Spanish. Specifically,he would work with the project's extensionagents to:

(a) develop methodology and programs to train extension agents and farm families in simple animal husbandry practices;

(b) train extension agents and farm families in techniques of cheese-making,storing and marketing;

(d) assist extension staff in identifyinglimitations in traditionalproduction systems and in analyzing methods that can be modified or adjusted to increase production and productivity;

(e) help extension agents and farm families to develop simple record-keepingfor milk production and cheese-making;and

(f) supervise,in collaborationwith the Sub-Directors,extension agents providing technical assistance to individual farm families and groups. - 48 -

ANNEX 2 Page 1

BOLIVIA

OMASUYOS - LOS ANDES RURALDEVELOPMENT PROJECT

Farm Models

Model No. 1 -Crops and Dairy

1. Model 1 corresponds to a 3.56-ha farm, 1.09 ha of which is land presently in fallow, and represents the type of enterprise a total of 1,000 farm family participantsare expected to operate. Crops would be raised on 2.09 ha, while 1.47 ha of pasture would be improved. The area of production for each crop would be increased as follows: potatoes from 0.36 to 0.45 ha; quinua from 0.08 to 0.10 ha; broad beans from 0.11 to 0.15 ha; barley from 0.34 to 0.75 ha; and alfalfa from 0.01 to 0.54 ha (Table 1). The dairy herd would increase from three cows producing 3 liters of milk per day to six cows producing 8 liters per day. The lactation period would be increased from 180 to 240 days. As of the ninth year, male calves would be sold at birth to increase the total amount of milk sold and to save feed.

2. Production costs would increase from $b 10,960 to $b 33,219, including labor, and total labor would increase from 263 to 433 man-days per year. Average on-farm investment would include: a small milkíng barn; milk pails and kettle; water well and pump; and one bull and three pregnant heifers (3/4 Holstein).

3. Total annual net income per family, excluding labor, would reach $b 39,527 (US$1,976)by full development. Details of investment costs, yields and production projectionsand projected cash flow are presented in Tables 2 through 10.

Model 2 - Crops and Sheep

4. Model 2 illustratesa 3.56-ha farm, representingabout 1,000 farmers practicing this type of farming. Cropping patterns would be similar to model 1, but the area of production for potatoes would be increased from 0.36 to 1.0 ha; quinua from 0.08 to 0.34 ha; and broad beans from 0.11 to 0.30 ha. The area for oca and fodder crops such as alfalfa and barley would remain the same. Cropping intensitywould increase from 69% to 100%.

5. For practical calculatingpurposes, the sheep flock projection has been consolidatedand worked out on the basis of a 40-familygroup; however, it is assumed that each farmer would manage his flock individually. Animal feed from communal and individuallyowned pastures would be sufficient for 9.0 animal units (AU). The incrementalon-farm fodder production would provide the farmer with sufficient feed to allow for the upgrading of the sheep flock through cross-breedingthe native ewes with improved breeds. Production costs would increase from $b 3,481 to $b 9,543, including labor, and total family labor would increase from 79 man-days to 112 man-days per year. Average on-farm investmentwould consist of a holding corral, hand shears, and one ram. - 49 -

ANNEX 2 Page 2

6. Total annual net income per family, excluding labor, would reach $b 16,941 (US$847) by full development. Details of investment costs, yields and production projections and cash flow are presented in Tables 11 through 20.

Model 3 - Crops and Alpaca

7. This model is representative of 13 groups, totaling 500 families, that would participate in the project. The cropping pattern would be the same as for model 2. The herd projection has been consolidated on the basis of a herd for a 40-family group; however, the alpaca herd for each family would consist of 15 animals at full development. Investments would be limited to a holding corral, hand shears, and a fiber-holding table. Operating costs for the alpaca herd would be mainly for animal health.

8. As in the previous two models, the farmer would have access to about 11.0 ha of communal pastures, which, together with the fodder produced on the farm, would provide sufficient feed for 9.0 AU. Production costs would increase from $b 3,495 to $b 10,454, including labor, and total labor would increase from 94 man-days to 131 man-days per year.

9. Total annual net income per family, excluding labor, would reach $b 17,781 (US$889) by full development. Details of investmentcosts, yields and production projections and cash flow are presented in Tables 21 through 30.

Model 4 - Crops, 3.5 ha

10. This model represents a 3.56-ha crop farm, corresponding to about 1,000 farmers (25 groups) expected to participate in the project. The cropping pattern would emphasize potatoes (from 0.36 to 1.0 ha); quinua (from 0.08 to 0.34 ha); and broad beans (from 0.11 to 0.30 ha). The land area allocated for oca and fodder crops remains unchanged. Fodder crop output would be either consumed by farm animals at home or sold as feed to neighbors for their animals. Cropping intensity would increase from 69% to 100% by incorporating the land under fallow. Operating costs would increase from $b 6,156 to $b 14,120, including labor, and total labor would increase from 76 man-days to 109 man-days per year.

11. Total annual net income per family, excluding labor, would reach $b 18,159 (US$908) by full development; details of yields and production projections and cash flow are presented in Tables 31 through 34.

Model 5 - Crops, 1.0 ha

12. This model is representative of a 1.0-ha crop farm, corresponding to about 2,500 farmers (63 groups) expected to participate in the project. Land area for potatoes would be increased from 0.30 to 0.40 ha and quinua from 0.10 to 0.17 ha, while barley would be reduced from 0.10 ha to 0.05 ha in order to - 50 -

ANNEX 2 Page 3 assign more land to food crops. The area for oca, broad beans, and alfalfa would remain unchanged. By bringing fallow land into production,cropping intensitywould increase from 88% to 100%. Production costs would rise from $b 2,935 to $b 6,041, including labor, and total labor would increase from 41 man-days to 50 man-days per year.

13. Total annual net income per family, excluding labor, would reach $b 5,554 (US$248)by full development. Details of yields, production projections and cash flow are presented in Tables 35 through 38.

14. Details of a representativeforestry system are shown in Tables 39 and 40. -51- ANNEX2 Table 1.

BOLIVIA

Omasuyos-Los Andt,s Rural Development Project

Proposed Yearly Cropping Patterr

Model l Crops - Dairy Without - - -Years ------Net 3.56 ha Project 1 2 3 4

Potatoes 0.36 0.45 0.45 0.45 0.45 Oca 0.10 0.10 0.10 0.10 0.10 Quinua 0.08 0.10 0.10 0.10 0.10 Broad beans 0.11 0.15 0.15 0.15 0.15 Barléy (hay) 0.34 0.75 0.75 0.75 0.75 Alfalfa (green) 0.01 0.54 0.54 0.54 0.54 Pastures 1.47 1.47 1.47 1.47 1.47 Fal-aw 1.09 - - - -

Total: (ha) 3.56 3.56 3.56 3.56 3.56

Cropping Intensity % 69 100 100 100 100

Model 2 Crops - Sheep Model 3 Crops - Alpaca Model 4 Crops Net 3.56 ha

Potatoes 0.36 1.00 1.00 1.00 1.00 Oca 0.10 0.10 0.10 0.10 0.10 Quinua 0.08 0.34 0.34 0.34 0.34 Broad beans 0.11 0.30 0.30 0.30 0.30 Barley (hajy 0.34 0.34 0.34 0.34 0.34 Alfalfa (green) 0.01 0.01 0.01 0.01 0.01 Pastures 1.42 1.47 1.47 1.47 1.47 Falalw 1.09 - -- - -

Total: (ha) 3.56 3.56 3.56 3.56 3.56

Cropping Intensity % 69 100 100 100 100

Model 1 Crops Net 1.0 ha

Potatoes 0.30 0.40 0.40 0.40 0.40 Oca 0.10 0.10 0.10 0.10 0.10 Quinua 0.10 0.17 0.17 0.17 0.17 Broad beans 0.27 0.27 0.27 0.27 0.27 Barley (hay) 0.10 0.05 0.05 0.05 0.05 Alfalfa (green) 0.01 0.01 0.01 0.01 0.01 Fallow 0.12 - - - -

Total: (ha) 1.00 1.00 1.00 1.00 1.00

Cropping Intensity % 88 100 100 100 100

February 6, 1979 BOLIVIA

0660100ó .- L,09 0112f0 60061A0tEVLUh41 PIOOJIXT

V... I .l I - c.op. nd 0. o

______,______¡2______til *_, ¡ __ __ 2______3f __ _,___ ,__, _ _1 Co-t COút Dnít Co-ít U¡ Cotí Otílí. CÇot 6019. t !m.uIi. C-, Unlt. Co.t Uohl. r~Oi* CO*6 296L.U ..t J.-ti. C1 -_ 3 _ t br CoBt ULlí

- milhk¡o b-n I 9,000 .5 4.500 .5 4,500 _ - - lI.t.o tíoou, 1 500 ¡ 500 - - 6.109 .016 (co-h - - I SO500 ¡itier vell <¡090! - _ _ _ _ - - ^telal)- - - ¡40 ______- - S,,-Tota - - - 5640 - 4. -00

- _- -I oeo - - - - - 1 000 - -B - - ¡sllO 6.ílo*e (30 ¡Éter) I 000 ¡ 200 (10 iíí.r.) 2 200 ¡ 200 - - I 200 HilO 9 *¡ie - - 30-- - - - 1 ¡50 - 300 ------. 122 - - 6a9.-0-I00 - - 1 _ - - - - _ - - 2,000322 - - 0,6-1,0.1 - - - 200 _ - - 200 -.

C-t1 - . 3 6113,600 6!600 -- - - -_ - - -,o 2,0b-ToVel - - * 6.600 - 13.600 - 4 600 _.2

Lobor 1F*11)

T0 b,,ISiiher - - _ 12,00 _ 2.500 Tr. btid 0,1,9 ,¡ - - - 1,100 _ - - _ - - _ _ _ _ Sob-T,.6i - - - 3,600 - 2.500 - - - -

- 1200- - - T.t.1 1.-I-~, - - 16.40 .20.600 - 6.009

íeó ~,.,y4, 19<9 OMASUYOS- LOS ANDES RURAL DEVELOPMENTPROJECT

Farm Model 1 -_Crops Dairy Estimated Labor Budget (Man-days per Year)-

Crops ha Jan. Feb. tlar. Ap. May June July Aug. Sept. Oct. Nov. Dec. Total

Potatoes 0.45 2.0 2.0 - 10 10 _- 2.8 3.2 - - 30 Oca 0.10 0.6 0.6 _ 2.4 2.4 - - - 1.0 1.0 - - 8 Quinua 0.10 - - - 1.1 1.1 - - 0.6 0.6 - - 0.6 4 Beans 0.15 0.6 - 3.5 _- - 0.9 1.0 - - - - 6 Barley 0.75 0.7 0.7 10.5 10.5 - - - - - 3.8 3.8 - 30 Alfalfa 0.54 - - 1 1 2 5 14 Subtotal 3.9 3-3 19 24 13.5 - 0.9 1.6 5.4 9.0 5.81 5.6 92

Dairy- 30 30 29 28 28 28 28 28 28 28 28 28 341 w Total Monthly Demand 33.9 33.3 48 52 41.5 28 28.9 29.6 33.4 37 33.8 33.6 433 Family Labor Available b 45 45 45 45 45 45 45 45 45 45 45 45 540

a/ At full development. bI Assumes 2.25 adult equivalent per family of five working 20 days per month. c/ Rounded.

February 7, 1979

> * 5'i -

ANNEX 2 ¡0LZVZA Tabla 4

OMASt'YOS- LO6 ANDESRUgAL DVELDPMENT PROJECT Farm model 1 - Croos and Dairv

Cronoing Pattern. Yielda. Total Productioe. aud "roduction Value

Without ------Years ------C1roppin Patrern Uni±ts ProSet 1 24

Potatoaa ha 0.36 0.45 0.45 0.45 0.45 0.45 Oca ha 0.10 0.10 0.10 (Quillua, 0.10 0.10 0.10 ha 0.08 0.10 0.10 0.10 0.10 0.10 QUats ha 0.11 0.15 0.15 0.15 0.15 0.15 Barley ha 0.34 0.75 0.75 0.75 0.75 0.75 Al£alfa ha 0.01 0.54 0.54 0.54 0.54 0.54

Total Crops ha 1.0 2.09 Z.09 Z.09 2.09 2.09 Fallow ha 1.09 '- - ast'ure ha 1.47 1.47 1.47 1.47 1.47 1.47 'lithoutAgricultural Value 0."4 0.44 0.44 0.44 0.44 0.44

Total ha 4.00 4.00 4.00 4.00 4.00 4.00

Cropping Inteuzity . 69 100 100 100 100 100

Yields

Potatoes kg/ha 4,000 4,400 5,300 7,000 8,000 8,000 Oca kg/ha 2,500 2.500 2,500 2.550 2,600 2,600 QuS.aua kg/ha 500 590 650 790 850 850 3aans kg/ha 550 650 750 800 850 850 8esa atrav kg/ha 900 975 1,060 1,140 1,200 1,200 aarley (hay) kg/ha 2,700 3,500 4,200 4,600 5,000 5,000 Alfalfa (greeu) kg/ha 6,300 6,300 7,500 10,000 12,500 12,500 Pasture kg/ha 2,000 2,400 2,600 2,800 3,000 3,000 Total Production

Potatoes kg 1,440 -,980 2,385 3,150 3,600 3,600 Oca kg 250 250 250 255 260 260 O,uiaua kg 40 59 65 79 85 85 Beano kg 60.5 97.5 112.5 120 127.5 127.5 Bean atraw kg 99 146 159 171 180 180 Barley (hay) kg 918 2,625 3,150 3,450 3,750 3,750 Alfalfa (grean) kg 63 3,402 4,050 5,400 6,750 6,750 Pasture kg 2,940 3,528 3,822 4,116 4,410 4,410 Fargate Price Procuceion Value Sb ocr kR

Potatoes 3.00 4,320 5,940 7,155 9,450 10,800 10,800 Oca 2.17 542 542 542 553 56" 564 Q 4.40 120 176 286 348 374 374 3 .50 212 341 394 420 446 446 Bean strew-- o.20 - - - Bariey h,y/ 0.80 - _ _ _ Aif alfaby 0.30 - - _ Total Producti.ol Valae ,5.194 6 999 8, 377 10 771 12.184

Leas on-farm Consumtiorm' 2.955 3.251 3.576 3.576 3.576 Total Cash Sales 2L21S L268 4 2_L21 8 8.608

a. Quinua oriced ar Sb3,00 without proiect. bl Consumad on- arm by animals. c/ 800 kg potatoes; 175 kg oca; 50 kg beana. Consptlion assuoed to increase 10% during the first aud second years.

February 3, 1979 - 5, -

Al 2 Table 5 BOLIVIA

O&SWYOS L08 AIDCS ¡DIAL DEVf 0l5 PhJR para ol 1- Cro,ad mard

Creo Operatina Costa

Vithout ------Y - Inpute Prol ct 1 2 3 4 5 6 Seed potitobll/ 962 2,430 1,823 1,823 1,823 2,430 1,823 Oca 54 54 54 54 54 5 54 Quinua 5 5 5 5 5 5 5 BQana 66 90 97 101 lOe 108 5OS Brley 66 240 240 240 240 240 240 Alfalfa 4 - - -. -i

Subtotal 1.179 3.278 2.219 2.Z23 2-230 2.837 2.230 Pertilizers

?*tato& 691 900 1,022 1,022 1,022 Oca - 6 9 1 , 0 QuOnua - 32 S6 as 88 es es Buanu - 23 47 58 63 63 63 Barley - 83 341 499 683 683 683 Alfalfa - 34 1 PAaeurel / - 4 74 3

Subtotal _ 451 1.608 2.018 2.329 2.329

Harbicides. lnaectícidea. Funzicide

Poc-tos 180 475 632 632 632 632 Oca - - - - - Quinua 18 le 18 18

S rley - 20 20 20 20 20 20 Alfalfa ______Pasture _ _ _ _ - _

Subtotal _ 495 630 670 670 670 Tractor aud bachinervHlre

Quinua 45 45 45 45 45 45 Alfalfa 389 146 _ Subtotal

Oxen Ua.

Potatoea 356 446 446 446 446 446 446 Quinua 9 - - Deans 18 25 25 25 25 25 25 Berley 150 330 330 330 330 330 330 Alfalfa 4 - _ _ _ - Oca 39 39 39 39 39 39 39 Iubtotal 576 840 840 840 840 840 B40 Sack Raelacamant

Potatoes - 440 - - 440 Quinua _ 6 _ - 6

Subtotal 6 440 _ t- 440

Labor

Femily ,610 2.835 2.940 3.080 3.220 3.220 3j220

,TotalOperatina Costo 3.365 .544 86.587 88S76 9 486 110381 Ij

Lats Labor 1,610 2,835 2,940 3,080 3,220 3,220 3,220

Total Caah Costs 1,755 5,709 5,647 5,796 6,266 7,161 6,114

t/ Norually kcpt froe th- previoua year vill be rened aver, faur yaara. Co4t of irovea seed 9b4/kS. Coat of ae-d kept frao previoua year $b3ik¡. b/ 1 be% of fertilizer of 46 kg at $b 430/ha/year.

February 2, 1979 SOLIVIA

OHASUYOS - LOS ANDES RURAL DEVLOPHENII PYOJCT

ar. Hodel 1:_ Croos and Dalry

Herd ProlactIon

Wtthout ------end of Yeatr -______Pr.lect 1 2 3 4 5 6 7 8 9 10 1l 12-20 llerd Co~ositiou(No. )-

aulas 1 1 ¡ 1 1 1 1 1 1 1 ¡ 1 Cov, 3 3 3 3 4 5 6 6 6 6 6 6 6 F."ae Calvg I 1 I 1 1 1 2 2 2 2 2 2 2 .. l. CXlves'/ - a I I 1 1 1 2 2 2 2 2 2 Helfer. 12-24 on1há I 1 1 1 1 2 2 2 2 2 2 Steer 12-24 ooths - - 11 1 1 1 2 2 - lletfer 24-36 -o-ths - - - 11 1 - - - 1 2 Oxen 2 2 2 2 2 2 2 2 2 2 2 2 2

Total ñerd 8 9 L1 11 12 13 14 16 17 18 17 15 15

An.t..¡ UIts 7 7 8 9 10 11 11 12 13 14 13 11 1l

Sales (no.)

Bulle - - I ______1 _ _ _ Co.a - 1 1 1 - - - - - 1 2 - Reiltera 12-24 onthe 1 1 1 _- 1 1 2 1 _ - 2 2 4 Stser 12-2 moti,s - - 1 1 1 1 1 1 2 2 - - Hale calves *t birti, ------2 2 2 2 Oxeo - 2 2 2 2 2 2 2 2 2 2 2 2

Total 1 4 6 4 3 4 4 5 5 a 6 6 6

Purteh.ae (No.)

8ulía el - 1 ------_ 1 - HNlfar (Pre 8 naot) 1 1 1 -I Oxen - 2 2 2 2 2 2 2 2 2 2 2 2

Total - 3 4 3 2 2 2 2 2 3 2 2 2

Ted.olcal Coefftcie.tgr

C.I~los r.ce 7 45 55 55 55 60 60 60 65 65 65 65 65 65 Hort.lity 7 Calve. 10 10 8 6 6 6 6 6 6 6 6 6 6 Calves (1-2 year) 6 6 5 5 5 5 5 5 4 4 4 4 4 Adulta 4 4 4 3 3 3 3 3 2 2 2 2 2 No.of Coa fn Hilk 1 2 2 2 3 3 4 4 4 4 4 4 4 Hllkyleld itie/cov/-lday 3 3 5 6 8 a 8 8 8 8 a 8 8 lAct-tton perlod 180 180 240 240 240 240 240 240 240 240 240 240 240

Lile Welght Kg.

Dolía 320 320 320 320 320 340 360 410 410 410 410 420 420 Cull coa. 250 260 260 270 280 290 300 300 330 330 340 340 340 Calves at bitthl 22 22 29 28 28 32 32 33 33 35 35 35 35 Heífera-Steere 12-24 -s. l10 110 110 200 200 210 210 220 220 230 230 230 230

*/ Ho lo.ses du. t. ortality .re con.idered due to the selal herd al.e. To .ccount for loases di,e to mrtslfty 107 lo dedu-ted fro the overalí caloe of production. b/ Male calves are soId at birth fros year 9 o...ard. el 1sprov d 3/4 HoloíIlta. Al llve-toek .old vi¡I be subjeot tu 3--e.oth adaptatfon p.rlod st the .cilaeí- rati.n center .. d 1, ins--red al.Inst flín o. or deatí c.used by hIgbh Ititud..

February 3, 1979 SOLIVLA

OHASUYOS- LOS ANDES RURAL OEVELIPMENT PROJECT

Faro ?*odel 1, Crop8 and Dairv

D-ary Production Protectlon

Protection oí Sales

Unit Prlce Wlthout ------ar s------y.------_-__- ______- ____- ____-______-______Llvestock ($b) Prolect 1 2 3 4 5 6 7 8 9 10 11 12-20 Dvllo/coiled 6,O<)O - - ' ------1I Cave/culled 4.000 - 1 1 1 lIeifera 1 (criolla) 1-2 yrs 3,000 1 1 1 - - - - - Hetee s (Improved) 1-2 yra 6,600 - - - 1 2 1 - 2 2 sr.era (criollo) 1 year 3,000 - - 1 1 ------Stecsr (Improved) 1 year 5,000 - - - - 1 1 2 2 - líate calvea at birth 420 _ - - - - - _ - 2 2 2 2 osen y 6,000 - 2 2 2 2 2 2 2 2 2 2 2 2 mllk Production

N¡ober ol cows In *lIk ./ 1 2 2 2 3 3 4 4 4 4 4 4 4 Dally .lIk production (1) 3 3 5 6 8 8 8 8 8 8 8 8 a8 lactation pertod (daya) 180 180 240 240 240 240 240 240 240 240 240 240 240 Sob-total (1) 5ht 1,080 2,400 2,880 5,760 5,760 7.680 7,680 7 680 7,680 7,680 7,680 7,680

Calf a,lIkesaved (1) ------600 600 600 600 Total (1) 540 1.080 2.400 2.880 5 260 5,160 7.680 1 680 1 8.280 a.280 0

al Per cow In mIlk Fro,eye.ar 9 anward ale calves wouid be aold at birtI. 300 Iftera per calt per year .oUid be $aved. rebruary 3, 1979 ar 1 8OLIVIA OMASUYOS- LOS ANDES RURAL DEVELOPFENTFROJECT >bdel 1: Crop' and D0ary

Dairy Production Value and OperatlnR Costa ($ b)

Without ------eers------Production Value Prolect 1 2 3 4 5 6 7 8 ! 10 11 12

1. Lívectock Bulla/culled - 6,000 - - - - 6,000 - - Co.s/culled - 4,000 4,000 4,000 - - - - - 4,000 8.000 lletfers (criolla) 3.000 3,000 3,000 - - - - - lleifers (i.proved) - - - - - 6,600 6,600 13,200 6,600 - - 13.200 13,200 Steers (criollo) 3-3,000 3,000 ------Steera (ln,proved) - - - - 5,000 5,000 5,000 5,000 10,000 ¡0,000 Male e alveD at btrth ------840 840 840 840 0xcn - 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000

sub-total 3, 000 19,000 28,000 19,000 17.000 23,600 23,600 30,200 28,600 32 f840 20,840 26,040 26,Q4

2. M1ilk

S.b-total 2.160 4.320 9.600 11,520 23.040 23,040 30,720 30,720 30,720 33,120 33,120 33,120 33,120

T.taIT 5 160 23 320 37 600 30520 4 0 46640 54 320 60,920 59,320 53,960 6 59. 160

Le.s 101 516 2,332 3,760 3,052 4,004 4,664 5,432 6,092 5,932 6,596 5,396 5,916 5,916

Totra Productton Value 4.644 20988 332Ko 27,468 36,036 41.976 48,888 54,828 53.388 59,364 48,564 53,244 53.244

Operat ing Costa £/ Fami¡ly labor d/ 7,595 7,595 8,680 9,>65 10,850 11,935 11,935 13,020 14,105 15,190 14,105 11,935 11,935 Anims l,ealth-- 1,170 1,300 1,430 1,560 1,690 1,820 2.080 2,210 2,340 2,210 1,950 1,950 Oxeo !/ _ 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

lot al1 18 765 19 980 21.195 22.410 23 62 23 6755 25,100 26315 27 * 30 26 315 23 885 23 885

a/ $b 4 per titer b/ To áccoulit for mortality loases. c/ 31 man-days per AnIMal Unit. d/ Sb 110 per ením.1 per year. e/ P- lase-c pr ce.

Febr,ea,y 3, 1979 BOLIVIA

OtIASUYOS - LOS ANDES RURAL DEVEIOPMENT PROJECT Faro Hodel 1: Cropa *nd Dairy

Totat Production Value and Operatlng Costa ($ b)

W tthout ------YVears------Producttoí' Value Prolect 1 2 3 4 5 6 7 a 9 10 11 12

Crope 5.194 6,997 8,377 10.771 12,184 12,184 12,184 12,184 12,184 12,184 12,184 12,184 12,184 l)nary 4,644 20,988 33,840 27,468 36,036 41,976 48,888 54,828 53,388 59.364 48,564 53,244 53,244

Total 9,838 27,987 42,217 38,239 48,220 54,160 61,072 67,012 65,572 71.548 60,748 65,428 65,428

lesa on-fsrm cona.,ption 2,955 3,251 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576

TotAl Cash Sales 6 883 24, 7 7,496 57,4966 1,996 7.972 57,17261.852 852

Operatígg Costa

Cropa 1.755 5,709 5,647 5,796 6,266 7,161 6,114 6,114 6,114 6,114 6,114 6,114 6,114 Dítry _ 11,170 11,300 11,430 11,560 11,690 11,820 12,080 12,210 12,340 12,210 11,950 11,950

Sub-total 1.755 16.879 16,947 17,226 17,826 18.851 17.934 18.194 18,324 18.454 18,324 18.064 18064

Labor (Filly)

2,835 2.940 3,080 3,220 3,220 3,220 3,220 3.220 3,220 3,220 3,220 3,220 Crops 1,610 2 Dalry 7,595 _9 8,680 9,765 10,850 119 35 11,935 13,0 14,105 15,190 14,1L5 11,935 11,935

Sub-total 9.205 10.430 11,620 12.845 14,070 15 15.155 16.240 17.325 18.410 17,325 15!1i 15.155

Total Operating Costs 10960 27 309 28.561 20.011 31.896 34006 33,0819 34.434 35649 36.864 35 649 33 219

l.eas Fa.ily Labor 9,205 10.430 11,620 12,845 14,070 15,155 15,155 16,240 17,325 18,410 17,325 15,155 15.155

Toral Casi§ Costs 1.755 168719 16 941 11 226 11 826 18.851 17,934 18.194 18 324 18.454 18L324 18 064 18044

Iuveat.ent 18,640 20,600 6,800 - - - - 7,000 - - - -

uivestaernt plus Operating C06t 10,960 45,949 49,167 36,871 31.896 34,006 33,089 34,434 42,649 36,864 35,649 33,219 33,219

February 3, 1979 8019 IP,^

tWiaSUYOS- LOS ANDES RURJAL DEvtLOútEN[ PRO,IC[

Cr o-8)aI.y odlI- FloaoLaIc Aralval.

------W ltbo or ~~~~~~~~~------y------_ -r S------O6 11 Prolsrí 1 2 3 4 2 - - L

L8,aor _ 3,600 2,500 - 9,g800 Co-I - 14,900 18,100 6.800

- - 9,800 Tortal Inv .sí,.,r -18,64( 20,600 6,800 - - -

Dp r-tI.sa Costa Crol,.'-

3,220 3,220 3,220 Lobor 81.680 2,835 2.940 3,080 3,220 3.220 3,220 3,220 3.220 4,740 6,723 4,300 4.300 CasI fnpurt 5 709 3,824 3,9713 4,443 7,161 4,291 4,300 1.83 1.823 .n---A.ti l.po ts .7355 - 1 823 1j.823 1 823 - 1.823 _i.823 18 9.783 S,943 9.343 _.3- Total Opr-tian Costa Crops 3,365 8.544 8,587 8,876 9,486 10,381 9.334 9,343

28 ratin

15,190 14,103 11,935 Labor 7,595 7,595 8,680 9,765 10,850 88,93g 11,935 13,020 14,105 12.20 12.2t0 Cash Isps"t - HalL0 fl,3 11 .430 i 1.560 1169 1.82 12.080 12,340 iL,92 0 27,530 26,315 23,885 Toíal Operarlng Co,[. Llv otorl, 7.Lj 18,765 19,980 21, 195 2,41 23,625 23,755 25,1ú0 26.315

Tocal Cosi

17.323 18,410 17,325 i3,855 Labor 9,205 14.030 14,120 12.843 14,070 1515,5 15,833 16.240 Casis - 3.1179 33.224 27.203 16,003 186.63 16,111 16.360 16.930 28,863 ¡6,580 ¡6,230 1.823 123 3 __ 1,823 1 fl _ Non-... , lnpst[.,75_ 140 1.823 _I.B23 1.823 - 1.823 Total lovast.asnt assd 10.960 45,949 49,167 36 821 31,696 34,006 33.089 34.443 36,098 47,213 35,658 33,228 opar-tin 1 C..t. 60,748 65,428 Tot-l Prodactíos, Valoa>-' 9.838 27,987 42,211 , 38,239 48.220 34.160 61,072 67,012 65,572 71,548 3.516 >,?16 L.sa Fa-. Cons.ption 2.953 3,251 3,5376 J,36 3.576 1.55 73 516 3.576 3.576 67,972 57.172 61,852 CasI, Salo, t,e 6 883 24,36 38,641 34.663 44,644 50,584 57,496 57,496 61,946 Yl,,s hedí,.. lar. Craedit 14,900 18,100 6,800 - - Píos Short-tear Cr.dIt - 16 879 15,124 1.403 16.003 ¡8.851 6. 16,380 16.9_ 0 19.063 16.250 78,896 87,035 73,682 70,102 Total c.¡ Inftlow 6,883 56,315 71,865 56,866 60,641 69,435 73,607 79,876 Less Reisb.rsasent Medi- - - - - tem Cr.dit - - - - 15,067 15,061 15,067 15,067 1.5 Rel,bsrss-nt Shoot- 20,969 18,816 tra Cr-dit - 18,567 16,636 16.943 17,603 20,736 17,722 18.088 18,645 1 16,111 _16950 28 863 16.510 16 "S le.s Pay ..nt Cas ph,,ts - 33 119 33224 2.603 1003 18,851 16.380 39,527 36,203 43,693 Ner CasI, loro.. 6,883 24,136 20,074 18,027 12.634 17,914 21,693 30.647 43,978 3.576 33576 3,576 3,576 TíoS F.-. C.n-n.ptloo 2,955 3,251 3.576 3,576 3.576 3,576 3,576 3,576 18,410 17,325 1.S185 Loas La,-or 9.205 14,030 14,120 12,845 84,0o0 15,155 15,155 16,240 17.325 8233623 L... Non-,a.h torots j1755 140 -1823 1823 -1,2 - 1.823 1823 1.823 - _ 6.335 8,291 16, 160 28,406 24,693 20,631 30.259 i8jL II,COsse(1,122) 13,817 7,707 6,935 117 21,753 31,381 Ioíl-ro,ae,tal tlet srcoaa,^/ 14,939 8,829 8.057 1,439 7,457 9,413 17,282 29,528 25,815 F---ao-ibl Ra.t ní Rturo: Over 1001

f/ Sae A 2 Tab.. 2 b/ Sae A--oe, 2 T-úls 4 6 5 rl S e 7,0000 2 Toblr 5 d/ Sro As,ne 2 rabla 9 C/ Hedi-,m-ter. -redit cover- th rs) i--esta,-nt o Ye-r hí, 2, 3. 6-year d--ra..s. CasI, 1--e- --et In Y..ar 4 cao 8' 8 il by ti.e fao-orer OVo rraor es tlii.É ---y odlí. T Trm- oí th[ tcdi-tOra 1 ar 82.1a,,s I -t-r-st rato, lacI,,dlog a 2-y.ar grac porlod. f--e-laar w, t/ Shst-ter. -redit .8 fla-co .88 c.ol op- rarísie casI Wu att,a,--ol lii--res -tale oi 121 ,ad a ovara, loas, dds,rat-on cl 10 moa-- , íeryyes ths re oloIbicra so amoiskis eqi.a tul 1.1 tísas thr val c,oof rho <-osl lhiptso si the precIoso yoas a g/cníircimel laverth.yUl l ...... 1Irt- 8919 r *I, I s-- ,.

i c------ly I I, 1979 BOLIVIA

OMASUYOS- LOS ANDES RURAL DEVELOPMENTPROJECT Farm Model 2 Crops and_Sheep

Sheep Investment CoSts ($b)

------Years ------Units per Unit 2 Y 3 4 group os£t unitá7 Cost Units Cost Units Cost Unlts Cost Animal Purchases Rams 12 600 10 6,000 - - 1 600 1 600

Construction Holding corrals 40 400 40 16,000

Equipment Hand shears 4 50 40 2,000 40 2,000

Famillylabor (xnandaysya/ 120 35 120 4,200

Total Investment 28,200 2,000 600 600

Investment per family 705 50 15 15

a/ For construction of corral

Februiary3, 1979 BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMENT PROJECT

Farm Model 2 - Crops - Sheepa/

Estimated Labor Budget (Man-days per Year)

Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total Crop -b 6.6 5.4 12.25 30.7 25.7 - 1.8 3.8 8.95 9.85 1.90 2.05 109 Sheep 0.5 - - 0.5 - - - 1.0 0.5 1.0 - - 3.5 Total MontlhlyDentan& cd 7.1 5.4 12.25 31.2 25.7 - 1.8 4.8 8.95 10.85 1.90 2.05 11.5 Family Labor Available-b/ 45 45 45 45 45 45 45 45 45 45 45 45 540

a/ At full development. b/ Labor demand for crops is similar as that of Model 4. c/ Montlly family labor availability 45 man-days. Assuminíg 205 adult equivalent per family of 5 working 20 days per month.

February 7, 197i

ib BOLIVIA OIIASUYOS- LOS ANDES RUJQALlDEVELOI'PTiFNT P2OJECT Farm Model 2 - Crops and Sheep Cropping Pattern, Yields, and Total Production

Without ------Years------Units Project 1 2 3 4 - 5

CrppiPattern

1.00 Potatoee ha 0.36 1.00 1.00 1.00 1.00 Oca ha 0.10 0.10 0.10 0.10 0.10 0.10 Quinua ha 0.08 0.34 0.34 0.34 0.34 0.34 Beans ha 0.11 0.30 0.30 0.30 0.30 0.30 Barley ha 0.34 0.34 0.34 0.34 0.34 0.34 Alfalfa ha 0.01 0.01 Q0l QJ.0L 0.01 0J1L

Total Crops ha 1.00 2.09 2.09 2.09 2.09 2.09 - - Fallow ha 1.09 - - Pasture ha 1.47 1.47 1.47 1.47 1.47 1.47 0.4 Without Agriculture Value ha 0 44 0.440.- 0.44 0.44

Total ha 4.00 4.00 4.00 4.00 *4.00 4.00

Cropping Intenslty % 69 100 10G 100 100 100

Yields

Potatoes kg/ha 4,000 4,400 5,300 7,000 8,000 8,000 Oca kg/ha 2,500 2,500 2,500 2,550 2,600 2,600 Quinua kg/ha 500 590 650 790 850 850 Beans kg/ha 550 650 750 800 850 850 Bean straw kg/ha 900 975 1,060 1,140 1,200 1,200 5,000 Barley (hay) kg/ha 2,700 3,500 4,200 4,600 5,000 Alfalfa (green) kg/ha 6,300 6,300 7,500 10,000 12,500 12,500

Total Production

Potatoes kg 1,440 4,400 5,300 7,000 8,000 8,000 Oca kg 250 250 250 255 260 260 Quinua kg 40 201 221 269 289 289 Beans kg 61 195 225 240 255 255 Bean straw kg 99 293 318 342 360 360 Barley (hay) kg 918 1,190 1,428 1,564 1,700 1,700 z Alfalfa (green) kg 63 63 75 100 125 125 BOLIVIA

u1liAFbYUS - LOS ANDES RURAL DEVELOPMENTPROJECT

Farm Model 2 - Crops - Sheep

Crop Production Value

Farmgai.e Price Without Years CropbD _1er k-& Prolect 1. 2 3 4 5

Potat)es 3.00 4,320 13,200 15,900 21,000 24,000 24,000 Oca ?.17 543 543 543 543 564 564 Quinua a/ 4.4, 120 884 972 1,184 1,272 1,272 Broad beans 3.50 214 683 788 840 893 893 Bean ,ltrawl' 9.20 ------Barl- hqyyb k).80 ------Alfa] íiP !.30 ------Total Producti n Valhe 5,197 15,310 18,203 23,577 26,729 26,729

Less *n-farm(trnsumpt loncq' 2,955 3,251 3,576 3,576 3,576 3,576

Tota] Cash Sal s 2,242 12,059 14,627 20,001 23,153 23,153

a Quinua priced at $b 3.00 without project. b/ Consur.d on fa:n by anlimals. c¡ 800 k^:potatoes. 175 ig oca; 5()kg broad beans. It is assumed consumption would increaseV>)%eaci year during the first two years.

FebruatryI, 1979 b1 - ANNEX 2 Table 15

BOLIVIA

0ASL'YOS - L05 ANDES RUk'AL DVF.VELPMEIETPROJECT

rara Modal 2 - Crowp and Sheep

CrOpDOperag±n COati

($b)

Wthout ------Year, ------Proiect 1 2 3 4 5 6

Invut3

SeCd

Potatoes 2,727 5,400 4,050 4,050 4,050 5,400 4,050 Oca 54 54 54 54 54 54 54 Quinua 5 15 15 15 15 15 15 B ano 66 180 194 202 216 216 216 Barley 68 109 109 109 109 109 109 Alfalfa 4 9 - - -

Sub-Total 2.924 5.767 4.422 4.430 4.444 5.794 4.444

Fertílizer

Potatoes - - 1,920 2,000 2,272 2,272 2,272 Oca ______Quinua 1107 190 298 298 298 298 Beans - 63 95 116 126 126 126 Barley - 83 155 226 309 309 309 Alfalfa 66 - - - -

Sub-Tota-l 259 2.360 2.640 3005 3.005 3.005

Herbicídes, lnsecdcides3 Fungicides

Potatoes - 180 1,056 1,404 1,404 1,044 1,044 Oca . _ Quinua * - - 61 61 61 61 Beans '' Rarley *- 9 9 9 9 9 9 Alfalfa - - - - '-

Sub-otal _189 1.065 1.474 1.474 1.474 1.474

Tractor and Machinery Mire

Quinua 153 153 153 153 1.53 153

Sub-Total _ 153 153 153 153 153 153

Oxen Use

Potatoes 356 990 990 990 990 990 990 Oca 39 39 39 39 39 39 39 Quinua 9 - - - - Beans 13 s0 so 50 50 s0 50 Sarley 150 150 150 150 150 150 150 Alfalfa _4 - 3

Sub-Total 571 1,233 1,229 1.229 1.232 1.229 1.229

Sack Replaceiaent

Potatoes - - 1,000 - - 1,000 - Quinua 13 13

Sub-Total _ 13 t.OO - 13 1.000 _

FamlIy Labor Z2660 3.290 3,570 3.710 3.815 3815 815

Total Operatíni Coste 6.156 10,904 13,799 13,636 14,136 16,470 14,120

Leas: Vaaily Labor 2,660 3,290 3,570 3,710 3,815 3,815 3,815

Total Casb Costa 2,55 7,1~ 4 10.229 9,976 in,321 ¡5 . 1 ,

/ Norratlly lept from ,rrvtoIn,ysrg wtll be rts,'wed evvry íhwuryears. Cocí *f Improved %eed $S 4/kg: po.r Of -:1, de,pt frl provito" yvsr Sb 3/kg.

IeI.r.ssry2, ¡fq - 66 -

ANNEX 2 BOLIVIA Table l6 OMASUYOS- LOS AND6SRUKLU DZ0fVOPNEXT?ROJECT

Farm Model 2 Cropc and Sheep

Flock Projection (Flock belonging to 40 familias)

Opening End of Year Flock Co»=osition Number 1 2 3 4 5 6 7 8 9 10-20

Rams 52 30 10 10 10 10 10 10 10 10 10 Ewes 170 186 211 220 225 225 225 225 225 225 225 Lambs weaned 102 115 131 143 153 158 162 169 169 169 169 Females 2 teeth 42 49 58 65 69 72 74 78 78 78 78 Females 4 teeth 36 44 53 60 64 67 69 73 73 73 73 Males 2 teech 41 49 57 64 69 72 71 53 53 53 53 Males 4 teeth 37 44 53 59 64 67 69 72 72 72 72

Total Amimals 480 517 573 621 654 671 680 680 680 680 680

Total Animal Units!/ 44 43 44 46 47 47 47 47 47 47 47

Mortaliry

Rama 6 3 1 1 1 1 1 1 1 1 1 Ewes 20 19 17 18 16 16 16 16 16 16 16 Females 2 teeth 9 8 8 7 7 7 7 7 7 7 7 Females 4 teeth 5 5 4 5 5 5 5 4 4 4 4 Males 2 eech 10 9 8 7 8 7 7 7 7 7 7 Males 4 teeth 5 5 5 5 5 5 5 5 5 5

Total 55 49 43 43 42 41 41 40 40 40 40

Sales

Cull rams - 29 19 - - - 9 - - - Cull ewes 16 - 27 37 48 51 53 57 57 57 57 Males 2 teeth ------3 24 24 24 24 Males 4 teeth 31 44 53 59 64 67 69 72 72 72 72

Total 47 73 99 96 112 118 134 153 153 153 153 Purcnases Rams - 10 - 1 10 - - - -

Coefficients

Lambs veaned 60 62 62 65 68 70 72 75 75 75 75 (% of breeding eves)

Mortalitv

Yearlings % 19 15 12 10 10 9 9 8 8 8 8 Adults % 12 10 8 8 7 7 7 6 6 6 6

Life Wegiht

Culled ram (kg) 22 25 30 40 50 53 53 55 55 55 55 Culled ewe (kg) 18 20 25 30 33 36 37 38 38 38 38 Males 2 teeth (kg> 12 14 16 20 22 24 26 28 28 28 28 Males 4 teeth (kg) 20 22 26 32 34 36 37 38 38 28 28

Wool Production

1 of animals sheared 33 40 50 75 100 100 100 100 100 100 100 Yield per animal 0.76 0.76 0.80 1.20 1.50 1.80 2.00 2.20 2.5 2.8 2.8 (kg)

a/ 5 adulc sheep - 1 Animal Unit

February 3, 1979 BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMEN PROJECT

Farm Model 2 Crops and Sheep

Sheep Production Projection (Group of 40 Families)

Without ------Years ----- …------… Project 1 2 3 4 5 6 7 8 9 10-20 Wool No. of animals sheared 73 86 111 173 235 235 235 235 235 235 235 Yield per animal (kg) 0.76 0.76 0.80 1.20 1.50 1.80 2.0 2.20 2.5 2.8 2.8

Total (kg) 55 65 89 208 253 423 470 517 588 658 658

Pelts (from deaths) 55 49 43 43 42 41 41 40 40 40 49

Meat Cull rams No. - 29 19 - - - 9 - - - - weight (kg) - 725 570 - - - 477 - - - -

Cull ewes No. 16 - 27 37 48 51 53 57 57 57 57 weight (kg) 288 - 675 1,110 1,584 1,836 1,961 2,166 2,166 2,166 2,166

Males 2 teeth No. - - - - - 3 24 24 24 24 weight (kg) - - - - - 78 672 672 672 672

Males 4 teeth No. 31 44 53 59 64 67 69 72 72 72 72 weight (kg) 620 968 1,378 1,888 2,176 2,412 2,553 2,736 2,736 2,736 2,736

Total (kg) 908 1,693 2,623 2,998 3,760 4,248 4,991 5,574 5,574 5,574 5,574

February 3, 1979 BOLIVIA OMASUYOS- LOS ANDES RURALDEVELOPMENT PROJECT Farn Model 2: Crops and Sheep Slheep Production Value and OperatinR Costa

(Group of 40 Families)

Wlthout ------Years ------Prolect 1 2 3 4 5 6 7 8 9 10-20

Production Valuea Meat

Cuil rams - 8,700 6,840 - - - 5,724 - - - - Cull ewes 3,456 - 8,100 13,320 19,008 22,032 23,532 25,992 25,992 25,992 25,992 Males 2 teeth ------936 8,064 8,064 8,064 8,064 Malee 4 teeth 7,440 11,616 16,536 22,656 26,112 28,944 30,636 32,832 32,832 32,832 32,832 Sub-total 10.896 20,316 31.476 35,976 45,120 50,976 60,828 66,888 66.888 66.888 66,888

Woo 1 S,,b-total 1,650 1.950 2,670 6.240 10,59 12.690 1,0 15510 17.640 19,740 19,740

Pelta Sub-total 1.100 980 860 860 840 820 820 800 800 800 800

Total Production Value 13.646 23.246 35.006 43.076 0 64.486 75.748 83.198 85.328 72 Leas On-farmn Con- auamptiob 1 2,960 12.960 12.960 12.960 12.960 12,96 12.960 12,960 12. 960 12. 12960 Total Cashj Sales 686 10,28ú 22.046 3590 1 6 62.788 70.238 7 74,468 74,468

OperatiuR Costs Famtiy lahor-dl 4,620 4,515 4,620 4,830 4,935 4,935 4,935 4,935 4,935 4,935 4,935 Aninmal health- - 2.585 2.865 .105 3.270 3.355 3, 400 3.400 3,400 3.400 3,400 Total Operating Cost _4,620 7,10 7.485 7 8 205 8.290 8335 8335

a/ Unlt pricea = meat = $b 12 per kg; Wool = $b 30 per kg; Pelts - b 20 per U.ltX bl 22 kg mneat; 2 kg wool per family. c/ 3 *nan-days per Animal Unit per year; family labor valued at $b 35 per day. d/ $b 5 per-anaimal per year.

February 3, 1979 BOLIVIA

OMASUYOS- LOS ANDESRURAL DEVELOPMENT PROJECT

Farm Model 2 - Crops and Sbeep

Total Production Value and Operation Coste ($b)

Wtthout ------Years ------8 9 10-20 Prolect 1 2 3 4 5 6 7

Production Value 26,729 26,729 26,729 26,729 26,729 Crops 5,197 15,310 18,203 23,577 26,729 26,729 1.894 2.080 2L133 2.186 2.186 Sheep 341 581 875 1.077 1.414 1,612 28a623 28 809 28,862 28.915 28 915 Total Productive Value 5.3 15,891 19,078 24.654 28.143 4

3.900 3.900 3.900 3.900.3.900 Less: On-farm Consumption 3.279 3.575 3,900 3,900 3.900 3.900 24909 24,962 25,015 25,015 Total Cash Sales 2.259 12,316 15.178 20 24243 24,441

Operating Costa 10,305 10,305 10,305 3,495 7,614 10,229 9,926 10,321 12,655 10,305 10,305 Crops 85 85 85 85 85 Shieep - 65 72 78 82 84 10,390 10,390 10.390 10.390 10.390 j Sub'Total 3.495 7.679 10,301 10,004 10,403 12,739

Labor (family) 3,815 3,815 3,815 3,815 3,815 3,815 Crops 2,660 3,290 3,570 3,710 3,815 124 124 124 124 124 124 Sheep 116 113 116 121 123 3J93 .939 3.939 3.939 Sub-Total 2,776 3,303 3.686 3.831 3.938 3.939 3 14.329 14,329 14I329 14.329 14 329 Total Operating Costo 6 ,271 10.982 13,987 13,835 14.341 16,678

3.938 3.939 3L939 3.939 3L939 3.939 3.939 Less: Famlly labor 2.776 3.303 3.686 3.831 12,739 10390 , 10,390 10.390 Total Cash Coats 3495 7. 3 10,004 10.403 15 15 ------Investment - 705 50 - InvestínentPlts Operating Cost 16,678 14329 14,329 14 29 14,329 14,329 Cost 6,271 11687 14,037 13,850 14,356

Febriiary 4, 1979

'o tlOlIVI A

OHASUYOS- _IOS ANDESRb'RAL u8VL'ill P80JECT

Cínpa-SIeep Hundel 2 - Fiococlal AnaIVl.d

Ulthout _--- _- _- _ - - Ye------_------

______7 Pn'leeí 1 2 o3 _, S 6 7 8 _ L° 11

L.bor los - C.ah Leala - 600 0 - - 50 50 - - - 50

Total - 705 50 - 50 50 - - 50

OparatLng Cnta _•1OPA

L,abor 2,660 3,290 3.570 3,710 3,81S 3,815 3,815 3,815 3,615 3,815 3,815 3.815 Cae Irpora - 7.614 6,179 5,876 6,271 12,655 6,255 6,2'5 7,255 11,655 6,255 7.255 NoM.calh Inputr 4 4.050 4.050 áA-05-. f050 4.050 - 4,05 _050

Total OperatnaR Cocí. Crop 6,155 10,904 13,794 13,636 14,136 I6,410 14,120 14,120 15,120 15,470 14,120 15,120

0p.rattnA Costo Shaa,,C/

L.bor 116 113 116 121 123 124 124 124 124 124 124 124 Ce.h lpute _- 6_5 72 78 82 84 85 es 85 85 85 8S Toctl one,etlrR Coíat She.p 116 178 188 194 205 208 209 209 209 209 209 209

Total Cost

Labor. 2.776 3,508 3,686 3,831 3.938 3,939 3,939 3,939 3.939 3,939 3,939 3,939 Cesh Input. - 8.279 301 5,954 6.353 12,739 6.390 6,390 71340 11,740 6.340 7,390 Non C..h lop.te _3.495 - §A050 4.050 _ __ 4.050 4 .050 ____ _ 4.050 4 050 Totl Iv---.t-ent n.dOper.tilta Coat 6,261 11,l87 14,037 13.835 14.341 16,678 14,379 14,379 15.329 15,779 14,319 15,379

Tot. Iprod.ctlon Vl.e1./ 53538 15,f91 19,078 24,654 26.143 28.341 28,623 28,809 28,862 28,915 28,915 20.915 te.. Y r. C.onau ptio.e/ 3 279 3 575 .L90 Adn2"2 3 2900. 3. 90 3, 3 900 .3 900

C Sales 2,259 12,316 15,178 20,754 24,243 24,441 24,723 24,709 24,962 25,013 25,015 25.015

plue e.edlr-terre r,cd1t<' - 600 50 ------

pía. short-tera crditd - _ 1.6 9 6.M 5,954 6,353 IZ 9 73 S .34.1340 11,40 6 340 l.h9

Tot.l Ceh Inflo, 2,259 20,595 21,479 26,708 30.596 37,180 31.063 31,249 32.302 36,75S 31.355 32,355

Ie . ref brI,uraa,t.edfua-tern credi -tt - - 266 266 266 266 4 - - lee. et,en.ao,t-trrn --adl 8,447 6,876 6.349 6,988 14,012 6,974 6,974 8,074 12.914 6,974 ¡ese pay..enr rel fnuoptr. 8,279 6.301 5.5 _353 12.739 _129 _390 L_9 11 740 _6.40 7 340

Neí Ca. Inroret 2,259 12,316 6,731 13,878 17,428 10,395 10,395 17.619 17,988 16,941 12,101 17.995

plSo F.r-,on.ue,ptlo. 3,279 3,575 3,900 3,900 3,900 3.900 3.900 3.900 3.900 3.900 3.,00 3.900 I... lbor 2,776 3,308 3,686 3,831 3,938 3,939 3,939 3.939 3,939 3,939 3,939 3,939 1.a ron-rah pae3 495 ,0505 - 4.050 4050 4050 - 4050 4 0990 - 4 050 4l299 (733) 12,383 2,895 9,897 13,340 10,3S6 6,306 13.530 13,899 16,902 8.012 12.902 Net I nc mne

l-re--entel N.t -nc-.raLí 13,116 3,628 10,630 14,073 11,089 7,039 14,263 14,632 17,635 8,745 14,635 F..anola¡ 9ate of Hetrn Onerl 100%

S. .e Anneo 2, Table 11 b/ Se A.e.x 2, Table 19 rl Se Annex 2, Table 19 i/ See Annex 2, Table 19 vdltboutcrr -l1. e/ HrdlI,m-t.r. credit royera, ibC aL- Inve--nt Ian --rs ¡ And 2. The --ounta ffr ne, rane-c-lI t.ent Y-r-- 6 *d- are *o-ll *nd- ou.d be fi--a-ced Ter- of th. adtu-ter- nao.. art 127. 1,ternet raít, 6-year d-ration Incl.dlng 2-year grco p-e--d. f/ Sbort-ter- credIt ill finance .11 carl operat-nh-t.g --- tb *o.an-- Int--rea- ra-t of 12f *od adr aeege loan dut- lun .f 12 aontha, th. for-, wold- n--bur--cI eey year a-- a--n--t equ4a t. 1I1 t b-. vh .I of tha c.aa Inp"t. of ti.. prevI.o. yeer. al cr-- en--t oer irhe "UltIout ProJect" t tuaín.

Vebruary 3, 1979 OLIVIA

Q AS - tOSLMmES RUIUII DYvEIoPHENT *P(:CT

Far. Hodel 3 - Cro.0P nd Alpaca

Alpaca Inveat_nt Coste

Unl t ------Ir ------rs------______P-r U..ít 2 34 3 6 189 lO aorop Cost Unita Coit Unita UnU.CoaL Co t Unita Coat Uit* Cott fnita Coat oIt. Coat Unita Cost Unta Cot U,,1t. Cort

Constructtion

Holding cor,rlo 40 800 40 32,000 F.otly lhbor (

S.b-Tot.I - - - _ 37,000 ______

I1.nd oh.*r 240 50 120_ 6,000 _ - - - 120 6,000 FlIb- holdIng tabi. 40 300 40 12,000 - - - - -

Cattle Purchaea

10 9.000 Br-oding -al. 20 900 ------lo 9.000

- - - - S,O Total I---.atant - - _ _ 55600 - - - - -

225 Ionvetnent per fnao.y - - - - 1,390 - - - 150 ------_ _ 225

a FFor constr,ctlon of corral..

Feb -r-ary4, 1979 L B.OLIVIA

OMASUYOS- LOS ANDES RURALDEVELOPMENT PROJECT a/ Farm.Model 3 - Crops - Alpaca-/

EstimatedLabor Budget (Man-daysper Year)

Jan. Feb. Mar. Apr. Mav Jurie July Aug. Sept. Oct. Nov. Dec. Tota

Crops-/ 6.6 5.4 12.25 30.7 25.7 - 1.8 3.8 8.95 9.85 1.90 2.05 109 Alpaca 3.0 - - 3.0 2.0 - - - 7.0 2.0 5.0 22 el - 702050 ~~~~~- 2 Total Lbonthly DeAvand-/ 9.6 5.4 12.25 33.7 27.7 - 1.8 3.8 8.95 16.85 3.90 7.05 ,131 Family Labor Available-/ 45 45 45 45 45 45 4 455 45 45 45 540

a/ At full development,. b/ Labor demand for crops is similar as that of Model 4. cl EtontAllyfamily labor availability45 maan-days. Assuning 205 adult equivalent per family of 5 working 20 d#ys per mouth.

February ?, 1979 BOLIVIA

OHASSUYOS- LOS ANDES RtRAL DEVELOPMENTPROJECT Farm Model 3 - Cropa and Alpaca Cropping Pattern, Yields, and Total Production Without -- Years Units Protect 1 2 3 4 5

Cropping Pattern 1.00 Potatoe-' ha 0.36 1.00 1.00 1.00 1.00 Oca ha 0.10 0.10 0.10 0.10 0.10 0.10 Quiniua ha 0.08 0.34 0.34 0.34 0.34 0.34 Beans ha 0.11 0.30 0.30 0.30 0.30 0.30 Barley ha 0.34 0.34 0.34 0.34 0.34 0.34 Alfalfa ha 0.01 0 01 O.iL. O.º9L Q-L10Ll

Total Crops ha 1.00 2.09 2.09 2.09 2.09 2.09

- Fallow ha 1.09 - - 1.47 Pasture ha 1.47 1.47 1.47 1.47 1.47 0.44 0.44 Without Agriculture Value ha 0.44 0.44 4.44 0.44

Total ha 4,00 4.00 4.00 4.00 4.00 4.00 1 100 Cropping Intensity % 69 100 1O0 100 100

Yields 7,000 8,000 8,000 Potatoea kg/ha 4,000 4,400 5,300 2,600 2,600 Oca kg/ha 2,500 2,500 2,500 2,550 Quinua kg/ha 500 590 650 790 850 850 850 Beans kg/lia 550 650 750 800 850 1 ,200 1,200 Bean straw kg/ha 900 975 1,060 1,140 5,000 Barley (hay) kg/ha 2,700 3,500 4,200 4,600 5,000 12,500 Alfalfa (green) kg/ha 6,300 6,300 7,500 10,000 12,500

Toral Production 8,000 Potatoes kg 1,440 4,400 5,300 7,000 8,000 260 Oca kg 250 250 250 255 260 289 Quinuwi kg 40 201 221 269 289 255 255 Beans kg 61 195 225 240 360 < X Bean straw kg 99 293 318 342 360 1,564 1,700 1,700 Barley (hay) kg 918 1,190 1,428 125 Alfalfa (green) kg 63 63 75 100 125 BOLIVIA

OMASUYOS- LOS ANDES RURALDEVELOPMENT PROJECT

Crop Production Value for Farm Model 3 - Crops - Alpaca

Farmgate Price Without ------Years ------… Crop $b per kg Project 1 2 3 4 5

Potatoes 3.00 4,320 13,200 15,900 21,000 24,000 24,000 Oca 2.17 543 543 543 543 564 564 Quinua a/ 4.40 120 884 972 1,184 1,272 1,272 Broad beans 3.50 214 683 788 840 893 893 Bean strai§/ 0.20 ------Barley hqy -b/ 0.80 - - - - - Alfalfai b/ 0.30 ------

Total Production Value 5,197 15,310 18,203 23,577 26,729 26,729

Less on-farnm Consumption ç 2,955 3,251 3,576 3,576 3,576 3,576

Total Cash Sales 2,242 12,059 14,627 20,001 23,153 23,153

a/ Quinua priced at $b.3.00 without project. b/ Consumed on farm by animals. c/ 800 kg potatoes; 175 kg oca; 50 kg broad beans. It is assumed consumption would increasel0% each year during the fírst two years.

February 3, 1979

tD -75-

BOLIVIA Table 25

OMA.SUYOS-LOSANDES RURAL DEVELOPMENT PROJECT

Farm Model 3 - Crops and Alpaca Operaing Co_Sts ($b) Uithaut - -- _ - Year …------__----_----- lect Pro 1 2 3 4 5 e Invute

Potatoaes 2,727 5,400 4,050 4,050 4,050 5,400 4,050 54 54 54 54 54 54 54 5 1 U U ¡cafle U IS 15 66 180 194 202 216 216 aarley 216 68 109 109 109 109 Alfolfa 109 109

Sub-Tetal 2.924 5.767 4.2U2 4430 4,444 5.794 5.444 Fertiliter

Patate.- - 1,920 2,000 2,272 Oea 2,272 2,272 qunua - 107 190 298 298 298 298 Zeana - 63 95 116 barley 126 126 126 - 83 155 226 309 309 309 Alfalfa _ 6 _ _ _ _ Sub.Total - 259 2.360 2.640 3.005 3.005 3.005 Herbicides. Insecrícides, Funticides Potatoea - 180 1,C56 1,404 1,404 Oca 1.044 1,044 quinu - - - 61 61 Beo 61 61 - - - Zarl.y - - - - - 9 9 9 9 Alfalfa 9 - - _ - - Sub-total - 189 1.065 1474 1.474 1.474 1.474 Tractor arid Machinerv Hire

Quinua - 153 153 153 153 153 153 Sub.Total - 153 153 153 153 153 153 Oxen Use

Potato*a 356 990 990 990 990 Oca 990 990 39 39 39 39 39 39 39 Quinua 9 seana ---- 13 50 S0 50 50 50 ¡arley 50 150 150 150 150 150 150 Alfalfa 150 _ _ - - Sub-Total 571 1.233 1.229 1.229 1.232 1.229 1.2^9 Sack Replacesent

Pntatoa - - Qutnua 1,000 - - 1, 000 15 13 Sub-Total 13 1.000 13 1 000 - Pa.mivyLabor 2,660 3.290 3.570 3.710 3_=15 3515 3.815 Total Oereting Cot 6,156 10.904 13,799 13,636 14,;36 16,470 14,120 Lees: Faaily Labor 2,660 3.290 3,570 3,710 3,815 3,e1S 3,815

Total Caeh Costa 3445 7,614 _10.229 t.:? 10.3'1 I ,s 10.305

a/ Normallv k"rí tr evtou.pv ve"r- wi1l be rfenwed *very four yeers. Coas o1 ImPtrved aed Sb 4iklj; c*t of ,ed dept tram prevtoum ye.r Sb 3Sia.

February 2. 1979 BOLIVIA OMASUYOS- LOS ANDES RURAL DEVEIJ`PMENT PROJECT Model 3: Crops and Alpaca Herd Prolection

(Herd BelongLng to 40 Families)

Without -- __------End of Year - Prolect 1 2 3 4 5 6 7 8 9 10 11 12 Herd Composition

Breeding males 160 164 120 88 68 52 48 40 32 24 24 24 24 Breedtng females 160 168 168 184 204 224 256 260 260 260 260 , 260 260 Females 1-2 yrs. 20 16 24 36 36 48 56 60 72 76 76 76 76 Males 1-2 yra. 20 20 28 28 40 44 60 56 72 76 76 76 76 Female calves 24 28 36 40 48 60 64 76 80 80 80 80 80 Male calves 24 28 32 40 48 60 64 76 80 80 80 I 80 80 Total Animela 408 424 408 416 444 488 548 568 596 596 596 596 596 Total Animal Unita-l 180 184 170 168 174 184 210 208 218 218 218 218 218 Nortalitv

Adulta 41 32 28 28 28 24 24 28 24 24 24 24 24 Calves 12 16 16 20 24 24 28 28 24 24 24 24 24 Total To~~_=tal 53 48 44 48 52 48 52 56 48 48 48 - _ 48 Sales

Cull adult males - - 48 48 40 40 24 20 20 22 22 12 12 Cu`lladult females ------40 40 40 40 40 40 Breeding females 1-2 yrs ------7 20 20 24 20 Breedirigmales 1-2 yrs - - 20 40 44 60 64 , 60 64 Total - _ 48 48 40 40 44 100 108 142 146 136 136 Purchases Breeding males ------10 10 - - Coefficienite Calves weaned (2 of breeding females) 35 45 50 60 60 65 70 70 70 70 70 70 Mortality adults % 10 8 7 7 7 5 5 5 4 4 4 4 - Mortality calves 7 22 20 20 20 20 18 18 15 14 14 13 13 - Fiber Productiori

Yield pet animal (kg) 0.80 0.80 0.80 0.824 0.849 0.878 0.909 0.941 0.974 1.02 1.06 1.10 1.14 a/ 2 adialt alpaca - 1 Animal Unit.

February 3, 1979 BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMENTPROJECT

Farm Model 3: Cropa and Alpaca

Alpaca Production Prolection

Without ------Yeara--- Prolect 1 2 3 4 5 6 7 8 9 10 11 12

Fiber No. of animal. oheared 180 376 364 368 392 440 496 512 548 548 548 548 548 Yield per animal (kg) 0.80 0.80 0.80 0.824 0.849 0.878 0.909 0.941 0.974 1.02 1.06 1.10 1.14 Total Production (kg) 144 301 291 303 333 386 451 482 534 559 581 603 625

White (kg)al 36 75 73 76 83 96 158 169 187 252 261 271 281 Color (kg) 108 226 218 227 250 290 293 313 347 307 320 332 344

Pelta Adults 41 32 28 28 28 24 24 28 24 24 24 24 24 Calves 12 16 16 20 24 24 28 28 24 24 24 24 24

Livestock Cull adult males - - 48 48 40 40 24 20 20 22 22 12 12 Cull adult females ------40 40 40 40 40 40 Breedlng females 1-2 yrs ------4 20 20 24 20 Breedlngmales 1-2 yrs ------20 40 44 60 64 60 64

a/ Proportion of whlte to color Is: 25% from year 0 to 5 35% from year 6 to 8 45t from year 9 to 11

February 3, 1979 BOLIVIA

OMASUYOS- LOS ANDES RURAL DEVELOP~NT PROJECT Far. Model 3 - Crop and Alpaca

Alpaca Production Value and Operating Costa (Group of 40 Familles)

Wtthout------___------years ------Prolect 1 2 3 4 5 6 7 8 9 10 11 12

Production Value el Llvestock

Cull adult males - - 17,280 17,280 14,400 14,400 8,640 7,200 7,200 7,920 7,920 7,920 4,320 Buil adult males - - - - - 12,000 12,000 12,000 12,000 12,000 12,000 Breedtng females 1-2 yeara ------2,000 10,000 10,000 12,000 10,000 Breedtng males 1-2 yeara - - - - _ - 15.000 30.000 33,000 45,000 48,000 45.000 48.000

Sub-Total - 17,280 17,280 14,400 144Q 23,640 49202 54,200 74,920 77.920 73.320 74.320

Fiber

Suib-Total 11,304 23,618 22,854 23.796 26,130 30.280 37.304 39,874 44.166 48,596 50.470 52,386 54,302

c/ Fíber ,

Sub-Total 1,190 1,360 1,320 1j580 1.840 1.800 2,060 2,100 1.800 1.800 1JJ 1,800 1.800

Total Production Value 12,494 24,978 41,454 42,656 42,370 46,480 63,004 91,174 100,166 125,316 130,190 127,506 130,422

Less: o0-fara Use d/ 5.440 5.440 5, 54405,440 5.440 5.440 5.440 5±440 5 440 5.440

Total Cash Sales 7 54 19,538 36.014 37216 36.930 41,040 6 85 734 94,726 119 876 124,750 122 066 124,982

Operating Costa

Famstly labor / 25,200 25,760 23,800 23,520 24,360 25,760 29,400 29,120 30,520 30,520 30,520 30,520 30,520 Anlmal th i - 4.240 4,080 4,160 4.440 4.880 5.480 5,680 5,960 5.960 5.960 5,960

Total Operating Coat 25.200 30 000 27 880 27.680 28 800 30 640 34,880 3 36.480 36 410 36 480 36 480 36.480

al Cull adult males at $b 360 and cull adult females at $b 300; breeding females at $b 500 and breeding males at $b 750. b:' Whlte ftber at $b 110 per kg; color ffber at $b 68 per kg. cl Adulta at $b 10 acid young at $b 65. 1f/ 2 kg of color flber per year per famtly or $b 5,440 for 40 families. .- e/ 4 mandaya per anlmal unit per yeAr; family labor valued *t $b 35 per day. v.e fl $b 10 per animal,

Febrc¡ary 4, 1979 BOLIVIA

OHASUYOS - LOS ANDES RURAL DEVELolMENT PROJECT

Farm Hodel 3 - Crop and Alpaca

Total Production Valul and Operating Costa

Without ------Yeara ------Project 1 2 3 4 5 6 7 8 9 10 11 12

Production Value

Crops 5,197 15,310 18,203 23,577 26.729 26,729 26,729 26,729 26,729 26,729 26,729 26,729 26,729 Alpaca 312 624 1.036 1066 1,059 1162 1575 2.279 2,504 3.133 3.255 3.188 3.261

Tetal troduotion Value 5,509 15,934 19,239 24,643 27,788 27,891 28,304 29,008 29,233 29,862 29,984 29,917 29,990

Leass On-Warm Couaumption 3.091 3,387 3.712 3,712 3.712 3.712 3,712 3.712 3.712 3.712 3.712 3,712 3,712

Total Cash Sales 2.418 12,547 15.527 20.931 , 24,179 24,592 25296 25,521 26150 26272 26,205 33,702

Operating (;cost

Cropa 3,495 7,614 10,229 9,926 10.321 12,655 10,305 10,305 10,305 10,305 10,305 10,305 10,305 149 Alpaca - 106 102 104 111 122 137 142 149 149 149 149

Suib-Totwl 3,495 7720 10,331 10.030 10,432 12,777 10,442 10.447 10,454 10,454 10,454 10,454 10,454

Labor

Crops 2,660 3,290 3,570 3,710 3,815 3,815 3,815 3,815 3,815 3,815 3,815 3,815 3,815 Alpaca 630 644 595 588 609 644 735 728 763 763 763 763 763

4 Sub-Total 3,290 3,93 4,165 4.298 4.424 4.459 4.550 4.542 4e578 4,578 4.578 4.578 4.578

Total Operating Costa 6 785 11.654 14,496 14.328 14,856 17,236 14,992 14,989 15.032 15,032 15,032 15.032 15,032

Less: Fanilly labor 3.290 3.934 4.165 4.298 4,424 4,459 4,550 4.542 4 577 4.578 4,578 4.578

Total Cash Costs 3.495 7,720 10,331 10,030 10,432 12,777 10.442 10,447 10.454 10454 10454 10.454 10 454

Investment - 1,390 - - 150 _ - _ _ 225 225 - -

Investment plus Operattng Cost 6,785 11,654 14,496 14,328 15,006 17,236 14,992 14,989 15,032 15,257 15,257 15,032 15,032

February 4, 1979 -oOLI VI

JH/.SUYOS - LOS AhE ¿9R¿UL lDE6LVwíHmNT Pt¿OJEC3

CroPa-AIttEa 21d0. 3- A,,atea1

9 1 ______t A ' 4 5 e 7 _ ~

2 - 2 l T-1 _ -_ 14--0 150 225 Cal. -f Ln _ - - 150 - - - - 225

Op.r.tiag Colta C-opOE/ 3,815 3.815 3.815 3.815 3.815 3OS Lab.u 2,660 3,290 3.570 3.710 3.815 3,015 6.255 6.253 7,255 a1.635 6.255 71253 Co.h ínp.t - 161t4 6,179 51,86 6.271 12.655 4_050 - 4,050 4_050 4 O5t _ - OSO 4,050 Non bh nPote 3.45 4.050 4050 16,470 ¡4.120 14,120 15,120 13,470 14.120 15,313 loto, Oper-t,na Co.t Crop. 6.155 10.904 13,199 13,636 14,136

Operatína Costa ASpaoa 644 135 728 763 763 763 763 Lab.t 630 644 595 588 609 122 137 12 ¡ 14 f,4 9 f4 Ces. I.p.t_ - 106 102 104 111 766 812 870 912 912 912 912 Total Oef...tí.n Co.te Alv. 630 750 697 692 720

T-tLe¡ 0Mt 4,550 4,543 4.578 4,538 4,578 4,518 L bor 3,290 4.074 4.165 4,298 4,424 4,459 12,777 6,392 6.397 7.404 12,029 6,629 7,404 Casi - 8.920 6.281 3.180 6.532 _ i 050 4.050 AC¡e - f.05 4, 0 M.. tsa. lopota 3.495 1 0 4.050 14.992 14.990 16.032 16,607 15,253 16,032 Total Inve3t5Int *nd Or,tCtín, CpBt 6,785 13,044 14,496 14,328 15,006 17,236 2,304 29.008 29.233 29,842 29,964 29,T11 Total Produ llo.. Vsluoy- 5.S09 15,934 1I.239 24.643 27,788 27,8S91 8/ .a l. 1.711 12 . ,AU 3.,8712at a 1.7123 712 3..1II .i.s.li_3L133 .117113.7. e 1*aa lot., íooe,s.pllon 3 24,179 24.592 25,296 25.521 26.150 26,272 26.205 Cs.h Salo. 2,418 ¡2,541 15,521 20.931 24,016

------ploa e.l-ter otadí / - I,250 - - 6.392 63, 7.404 IJ ¿IP4 4.44 21.404 píoa *horí-lar. oraídtt' ___ ,_¡Q -7-al 5.98O _6 381 12,777 30.984 31,693 32,925 317,954 32,676 53.609 Total Cas6 1..tío.s 2,418 21,317 21,808 26,911 30,458 36,956 316 516 316 - - ¡sss tel .buese..ot aedlsa-tatt Ora.dit - - - - 516 7,020 14.055 7,031 1,037 8,144 12,94 7.04 lasa rslaboto..aot ehort-lt.t atadí _ _ 8,492 6,909 6,578 LI5, 12.277 6.392 6.392 1.404 12.029 4I629 404 ¡esa paYa.oout l a. L!2 _ 5.980 10.021 11,749 18.484 117,61 13,063 13,141 Nat Caah I.--o 2,418 12,547 7,035 14,022 16,832 16,643 3,12 3. 12 3.112 3,712 31 12 3,112 3,712 pío, f-a pt¡on 3ona03.691 3,367 3,112 3,712 3,712 12 4.550 4.543 4,57d 4.517 4.578 4.578 1 1.labor 3,290 4,074 4,165 4,298 4,424 4,459 400 £,M 4,939 - 993 1939 leas n. nasi.h Inpot. 3.495 - £, 4.050 4.050

5.133 11356d 16,S, lib.15 8 1}4 142.45 851 In00,55 (I.2761 11.860 ¡,3>j 9.3b4 12 019 1 5,89S 171,72 6.409 14.144 14.844 18,191 9,423 13.321 Inrt-enLl Net In.Ca'l - 13,136 3,808 10,662 13,346 Flo,ooIol ¿at. of IKtett Oe-r 100<

8/ 60o.o 2, Tobla 21 _/Ana , Tabl. al A.... 2, T.bl. 26 EL An..X 2. T.81. 28 -k--,,. 2, T.1.1 28 ta S.... 4, 9 .. 4 10 ar- _11 * t.og h .o llnanced olíl.os. £/ el -te -dter c-re-ted-l th. c-a-, ínoet 1. Yoear 1. lb. aont. ot rh Ie.t..nt 01clo$ a Z-yer graos petIod, ,^y crdl. lb. t*-. of thI. moedlu -te, 1o-- rt 122 ar reía,---t.t 6-y.at do,.talo *oe-fi* losn d.sttoa ol 10 -. rh., -ery y-or S-ort-ter.-/ credlt Itíl f(tInc. .11Cl a optr.ting coat. Ulth a., ar Intr..*t rata of 121 *.n *n . >r- ti.. torear .0,14 rel.4o ,e s.o.snu eqalí te 1 1 tI-. ib- -ol- of t as lahIppt af tth. pr-1Q. 1 Ireea- t over tIh- li.hout Prole sítulont o

Fel.tosty ú, 1979 BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMENT PROJECT a/ Farm Model 4 - Crops 3.5 ha Estimated Labor Budget (Man-days per Year)

Crops ha Jan. Feb. Mar. Apr. Nay June July Aug. Sept. Oct. Nov. Dec. Total Potatoes 1.0 4.5 4.5 - 20 20 - - - 6 7 - - 62 Oca 0.10 0.6 0.6 - 2.4 2.4 - - - 1.0 1.0 - - 8 Quinua 0.34 - - - 3.3 3.3 - - 1.8 1.8 - - 1.8 12 Beans 0.30 1.2 - 7.0 - - 1.8 2.0 - _ - - 12 Barley 0.34 0.3 0.3 5.0 5.0 - - - - 1.7 1.7 - 14 Alfalfa 0.01 - - n2- _LI - _ =S- nL.5 n lñ 0.25 1 Total Monthly Demand 6.6 5.4 12.25 30.7 25.7 - 1.8 3.8 8.95 9.85 1.90 2.05 109

Family Labor AvailabIeb/ 45 45 45 45 45 45 45 45 45 45 45 45 540

al At full development. b/ Assumes 2.25 adult equivalent per family of five working 20 days per month.

February 7, 1979 - 82 -

AJ=EX 2 BOLIVIA WWi1e32

OMAS1tOS - LOS AIDm XURAL 0EVLO.MNT FRLWnBc Para Moda¡ 4 -4 - CropS 3.5 ha

Cromnlnx ?acetrn. Ylel.s. Total Production. and Productioa Value

Widhout ------Yes --- Unita Pro1ect 1 2 3 4 5 Croppíng Pactern

Poataer.a ha 0.36 1.00 1.0t Oca 1.00 1.00 1.00 ha 0.10 0.10 0.10. 0.10 0.10 0.10 Quinua ha 0.08 Beane 0.34 0.34 0.34 0.34 0.34 ha 0.11 0.30 0.30' 0.30 Barley 0.30 0.30 ha 0.34 0.34 0.34 Alfalfa 0.34 0.34 0.34 ha 0.01 0.01 Q¡.LL °-°1 0.61 o ni Total Cropa ha 1.00 2.09 2.09. 2.09 2 2.09 ?allow ha 1.09 - - - - Pascure ha 1.47 1.47 1.47 1.47 1.47 1.47 Without Agriculture Value ha 0 44 Q.44. 044 0.44 0.44 Total ha 4.00 4.00 4.00 4.00 4.00 4.00 Cropping Intenaity % 69 100 lOC 100 100 100 Yields

Potatoes kg/ha 4,000 4,400 5,300 7,000 Oca 8,000 8,000 kg/ha 2,500 2,500 2,500 Quinua 2,550 2,600 2,600 kg/ha 500 590 650 790 3eana 850 850 kg/ha 550 650 750 800 3ean strgw 850 850 kg/h& 900 975 1,060 1,140 1 ,200 1,200 Barley (hay) kg/ha 2,700 3,500 4,200 4,600 5,000 5,000 Alfalfa (grean) kg/ha 6,300 6,300 7,500 10,000 12,500 12,500 Total Production

Potatoas kg 1,440 4,400 5,300 7,000 8,000 8,000 Oca kg 250 250 250 255 260 260 Quinua kg 40 201 221 269 289 289 Bean, kg 61 195 225 240 255 255 Bean straw kg 99 293 318 342 360 360 Barley (hay) kg 918 1,190 1,428 1,564 1,700 1,700 Alfalfa (grean) kg 63 63 75 100 125 125

Farugate Price Produccion Value Sb oer ka

Potatoes 3.0 4,320 13,200 15,900 21,000 24,000 24,000 Oca 2.17 543 543 543 553 564 564 Quinua al 4.40 120 884 972 1,184 1,272 1,272 Beans 3.50 214 683 788 840 893 893 Bean straw 0.20 20 59 64 68 72 72 Barley (hay) 0.80 734 952 1,142 1,251 1,360 1,360 Alfalfa 0.30 19 19 23 30 38 38 Total Production Value 5.970 16.340 19.432 24.926 28 199 28,199 Less: On-far Consuption b/ 2 955 3.251 3.576 3.576 3.576 3.576 Total Cash Sales 3.015 13,089 15.856 21 350 24 623 a7 Quínua priced ae $b 3.00 without project b/ 800 kg potatoes, 175 kg Oca; 50 kg Beans. Consuuption assumed to increase 107.during first and second year.

February 7, 1979 - S3 . ANQE 2 80LIVt&b lable 33

m.u.tlro9 - L0S M*f95 R0~I0EELWwrt .3

rum Model 4 - CropL 3.5 ha

CroP OserALinz Costa

Without ------Y,~, ------?roiect 1 2 3 4 5 6

Seed *

Potstoa 2,727 5,400 4,050 4,050 4,050 5,400 4,050 Oca 54 54 54 54 54 54 54 Quinua 5 15 15 u 15 15 15 3ecn 66 S80 194 202 216 216 216 Barley 68 109 109 109 109 109 109 Alfalfa 4 9 _- _ _ _

Sub-Total 2j924 5.767 4.422 4.430 4.444 5.794 4,444

Fertilizer

Poatoes - 1,920 2,000 2,272 2,272 2,272 Oca . _ _ _ _ Quinu - 107 190 298 298 298 298 B3a 63 95 116 126 126 126 Sarley - 83 155 226 309 309 309 Alfalfa _ 6 - - - -

Sub-Total 259 2.360 2.640 3.005 300 3.005

Herbicidea. In&ectícides. Fungicides

Potatoe - 180 1,056 1,404 1,404 1,044 1,044 Oca Quinua - - - 61 6i 61 61 B-,ssn - - - - 3arl2ey - 9 9 9 9 9 9 kLLalta - _

Sub-Total L1E9 1.065 1.474 1.474 1.474 1.474

Tractor cad Hachi rv litre

Quinua - 153 153 153 153 153

Sub-Total - 153 153 153 153 _5153

Oxen U-*

Potatoes 356 990 990 990 990 990 990 Oca 39 39 39 39 39 39 39 Quinua 9 - Bea*& 13 50 50 50 50 50 50 Barley 50 150 150 150 150 150 150 Alfalfa 4 3

Sub-Total 571 1.233 1229 1.229 1.232 1.229 1.229

Sack Reolareunt

Potaroes - - 1,000 - 1,000 - Quirua _ 13 13

Sub-Total -3 1.000 13 1.000 -

Y±lv Labor 2,660 3.290 3 3.710 3.815 3.815 3.815

Total OPeratina Coset 6.156 10,904 13,799 13,636 14,136 16,470 14,120

Lasa: Fanily Labor 2,660 3,290 3,570 3,710 3,815 3,815 3,815

Total Caab Cocts 3.495 7á1 10.229 9,926 1C.321 12.6556 0.305

renevad every four yiars. ' Normally kept frem prevtcua 4 year vill be - Coet of improved aead $b /kg; cost of saeed depc fr= previous year Sb 3/kg.

February 2, 1979 BOLIVIA

OMAUYO)S - LOS ANDES RURAL DEVELOPMENT PROJECCT

Farm¡ Model 4 - Crops 3.5 ha

Financial Analylsi WI.thout ($b) a/ Prolect 1 2 3 4 5 6 7 8 9 10 11 Costa

Labor 2,660 3,290 3,570 3,710 3,815 3,815 3,815 3,815 3,815 3,815 3,815 3,815 Casliitputs - 7,614 6,179 5,876 6,271 12,655 6,255 6,255 7.255 11,655 6,255 7,255 Non cash inputs 3.495 - 4.050 4.050 4050 - 4J050 4.050 .4050 - 4,050 4.050

Total costa -6155 10,9904 13,799 13,636 14,136 16,470 14,120 14J120 15,120 15,470 14.120 15,120

Production value 5,970 16,340 19,432 24,926 28,199 28,199 28,199 28,199 28,199 28,199 28,199 28,199

Leas: Farm consuniption b/ 2,955 3.251 3576 357 6 3.576 3576 3,576 3,576 3.576 357 '

Total Cash Soles 3,015 13,089 15,856 21,350 24,623 24,623 24,623 24,623 24,623 24,623 24,623 24,623 Leas: Relmburserient of credit c/ _ - 8.375 6.797 6.464 6,898 13,920 6 .881 6 7.981 12,820 6,881

Net Cash Iacome 3,015 13,089 7,481 14,553 18,159 17,725 10.703 17,742 17,742 16,642 11,803 17,742

Plus: Farm consumption 2,955 3,251 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576

Less: Iabor 2,660 3,290 3,570 3,710 3,815 3,815 3,815 3,815 3,815 3,815 3,815 3,815

less: Non cash Inputs 3,995 - 4,050 4.050 4,050 - 4,050 4 050 4,050 - 4.050 4,050

Net Income (185) 13,050 3.437 10,369 13,870 17,486 6.414 13,453 13,453 16,403 7,514 13,453

Increisental net income d/ - 13.235 3 1.0544 1 1 6,599 13 638 13,638 16,588 7,699 13, 638 Financial Rate of Return: Over 100%

a/ See Anulex 2. Table 33 b/ See Aminex 2, Table 32 c/ With an alinual Intereat rate Of 12%. and ati average losn duratit>n of 10 w,iontha, every year the farmer would reimburse an amount equal to 1.1 times tIhe value of t8e cash tnputs of the previous year t d/ llicrenlent over tlie "Without Project" situation.

February 4, 1979 BOLIVIA

OMASUYOS - LOS ANDES RURAL DEVELOPMENTPROJECT

Farm Model 5 - Crops

Estímated Labor Budget

Crops ha Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Total

Potatoes 0.40 2.0 2.0 - 7 7 - - - 2.8 3.2 - - 24 Oca 0.10 0.6 0.6 - 2.4 2.4 - - - 1.0 1.0 - - 8 Quinua 0.17 - - - 1.65 1.65 - - 0.9 0.9 - - 0.9 6 Beans 0.27 1.0 5.0 - - - - 1.4 1.6 - - - _ 9 Barley 0.05 - - 0.75 0.75 - - - - - 0.25 0.25 - 2 Alfalfa 0.01 - - 0.25 - - - - - 0.15 0.15 0.20 0.25 1

Total Montly Demand 3.6 7.6 1.0 11.8 11.05 - 1.4 2.5 4.85 4.6 0.45 1.15 50

Family Labor Availableb/ 45 45 45 45 45 45 45 45 45 45 45 45 640

al At full development. b/ Assumes 2.25 adult equivalent per family of five working 20 days per moath.

February 8, 1979

.> r'" - 86 -

ANNE 2 SOLZVZA BIUaba 36

OMASDYOS - LOS XIDVS ajRAL 3EVELPMENT 1ROIC-

0arm model S Crup# 1.0 ha

Cz;c:inar?attern. Yialdx. Tocal P?du pi. and 'todnin,. 7.7S,

ViLbouc ------Ye rs------_--______4 5 u_i__ ?roecrsl 2 3

Croopina ?actern 0.40 0.40 0.40 Potacoes ha 0.30 0.40 0.40 0.10 0.10 h- 0.10 0.10 0.10 0.10 Oca 0.17 0.10 0.17 0.17 0.17 0.17 QuinLua ha 0.'7 ha 0.27 0.27 0.27 0.27 0.27 3eans 0.05 0.-5 3arley ha 0.10 0.05 0.05 0.05 0.01 0.01 0.01 Alfalfa ha 0.01 0.01 0.01 Fallow ha 0.12 _ _ 1.00 1..10 1 00 Total 1OC1 10. loo 100 100 100 Cropping lntensity 7 88

Yted 8,000 3,oo0 kgi/ha 4,000 4,400 5,300 7,000 Pocacoan 2,600 2,600 lca kg/ha 2,500 2,500 2,500 2,550 790 B50 350 Quinua kg/ha 500 590 650 750 800 350 aso Sean: kg/ha 550 650 1,140 1,200 1,200 Bean srtaw kg/ha 900 975 1,060 3,500 4,200 4,600 s,aooq 5,000 2arley (hay) 'g/ha .2,700 10,000 12,50 12,;00 Alialfa (green) 6,300 6,300 7,500

Total ° cduction 2,300 3,200 3,200 ?otatoes kg 1,200 1,760 2,120 255 260 260 Oca kg 250 250 250 111 134 145 145 Quinua kg 50 100 216 230 230 Seaus kg. 149 176 203 263 286 308 324 324 Sean straw sg 243 230 250 250 cS 270 175 210 Barlay 125 12.5 Alfalfa kg 63 63 75 100

F armgate Price ?roduction Value Sboer kg 9,600 3,600 5,280 6,360 8,400 9,600 2otatoea 3.00 564 2.17 543 543 543 553 564 3ca 590 638 638 Quinua a/ 4.40 150 440 488 756 805 805 Beana 3.50 522 616 711 53 57 62 65 5 Bean strav 0.20 49 184 200 100 3arley 0.80 216 140 168 23 30 38 38 Al_alfa 0.30 19 19

Production Tocal 10,l75 11,910 11,910 Value 5,099 7,091 8,350

on-Cara Lesa 3,j76 3,576 3,576 conaumptioaV 2,955 3,251 3,576 4,774 6,999 3,334 3,334 -otal Cash Sales 2,144 3,a40

a¡ uin*iapriced at Sb 3.00 without project. 7/ 300 -g pocatoes; 175 kg oca; 50 kg beans. Consumption asaumed to increase 10% durtng the tirst and second year.

February 3; 1979 * 87 -

ANIIZ 2 Table 37

OHStUYOS - lOS AMDS kA DOYMLOW PR~J1CI

Fara Model 5: Crois 1.0 ha Oisrat±na Copla

Wttheut ------.------Pro1ect 2 3 5 6

Innuta

Seed */ 1,620 Potatoa- 818 2,160 1,620 1.620 1,620 2,160 54 Oca 54 54 54 54 54 54 Quinua. 6 a 8 a a a 8 Baana 162 162 175 l8l 194 194 194 16 Barley 20 16 16 16 16 16 9 Alfalfa . 4 9 9 9 9 1.901 Sub-cotal 1.060 2.404 1.882 1.88 1.301 2.441

Fertilizars 909 909 909 P2oatces - - 768 800 - Oca ------Quinua 54 95 149 149 149 149 - 57 85 104 113 113 113 :_n 46 Bari.y - 12 23 33 46 46 A.fillfa _ -_ 1.217 Sub-tocal _ 129 971 1.0S6 1.217 1.217-

ferbicias. Insactí- cidas. Fue.zicid.m

pocatoes - 72 422 562 562 562 562 Oca - - 31 31 Quiína - - ' 31 31 8.ana - - - -- 1 1 3arley - 1 1 1 1 -. -AIL1a-----£l -

Sub-total 7/3 42394 594 594 594

Tractor and Machinerv aire

Quinra 77 77 77 77 77

Sub-total 77 77 77 77 77 77

Oxer Use

Po^tale 297 396 396 396 396 396 396 39 Oca 39 39 39 39 39 39 - Quinua 11 - - - - 45 45 Seano 45 45 45 45 45 22 3arley 44 22 22 22 22 22 Alfalfa 4. 4 - - 502 Sub-total 440 506 502 502 505 502

Ssck Peolaent

POtCo - - 400 - - 400 - Quinua 7 J- - Sub-total _ - 407 _ 400

Lúr 1,750 F"dily 1.435 L.540 1.680 1.71-5 1.750 1.750 6,041 Total Cosnt 2.935 4,729 5,942 5,862 6,044. 5981

a/ cormally k~pt fr= tbs pr«vi.ow yar vill be rm4.ed every fto4 yar. Cost of seed.

February 3, 1979 <*tI~IYi>}. ti .v&L IIU I. UE~VE- bNií PMOJMUT

1.0 ¡la Crop Mde1 5

Financial Anal mia ($b)

Without ------Ye a------Prolect1 2 3 4 5 6 7 8 9 10 I1

Labor 1,435 1,540 1,680 1,715 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 Caah Ifiputa - 3,189 2,642 2,527 2,671 5,231 2,671 2,671 3,071 4,831 2,671 3,071 Noa-casia laIputa J -_ 1,620 1.620 1.62 - 1 O620L1.62 U.2 1 1,ó20 1.620 Total Cash 2,935 4,729 5,942 5,862 6,041 6,981 6,041 6,041 6.441 6,581 6,041' 6.441

1rodiactlon Va1ue-/ 5,099 7,091 t,350 10,575 11,910 11,910 11,910 11,910 11,910 11,910 11,910 11,910 LeaaaFar Conau.ption 2.955 33.27516 3,51 .576 3.576 J3.576 Z f 3.576 37Z 3.576 Total Caah Sales 2,144 3,840 4,774 6,999 8,334 8,334 8,334 8,334 8,334 8,334 f,334 11,334 Lema Retiabursement uf CredItc/ - _3 2.906 2.780 2,938 2.938 2.9385.751 3 . d 37 Net Cash lico.e 2,144 3,840 1,266 4,093 5,554 5,396 2,580 5,396 5,396 4,956 3,020 5,396 P01gFarw Conawp 2,955 3,251 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 3,576 Leaa Labor 1,435 1,540 1,680 1,715 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 Leas Non-camh loputa 1.500 - 12 1.620 1.20 - 1.620 1.90 1.>620 - l 0 60 Net Inneo 2,164 5,551 1,542 4,334 5,760 7.222 2,786 5,602 5,602 6,782 3,226 5,602 íncreental Net Ineam/ 3,387 (622) 2,170 3,596 5.058 622 3,438 3,438 3.438 3,438 3,438

FinjaicialRate of Return: Over 100l .

a/ See Anwatx 2, Table 37 b/ See Aiaaex 2, Table 36 £/ With an annuial interert rate of 12l and an avara$e loan duratiou> of 10 moniha every year the armier wouid retmburae an amount equal tu 1.1 tu,ec the value of the cash inpu.ta of tbe previous year. d/ hatcremaentover the "Without Project" bituation.

Febrcaa,ry 3, 1979 - 89- ANNEX 2

BGLIVIA Table 39

OMASUrYOS-LOSANDES RURAL DEVELOPMENTPROJECT

Forestry Component ProductionModel, 1 ha-Plantation EucalyptusPlantations

No. of No. of No. of Construc- Seedlings Trees in Trees to Fuel Wqood tion WTood Pitprops Years Planted Year 6 be Harvested (143) (M3) (M3)

1 1,600 2 3 4 5 6 1,200 7 60 2 8 70 2 9 80 2 1 10 90 2 li- 100 2 1 1.0 12 1.10 2 1 1.4 13 120 2 1 1.8 14 130 2 1 2.2 15 140 2 1 2.6 16 150 2 1 3.0 17 a/ L20 2 1 1 18 120 2 1 1 19 120 2 1 1 20 120 2 1 1 21 120 2 1 1 22 120 2 1 1 23 120 2 1 1 24 120 2 1 1 25 120 2 1 1 26 120 2 1 1

a/ Second 10-year rotation begins. - 90- ANITEX2 Table 40 BOLIVIA

OMASUYOS-LOSANDES RURALDEVELOPMENT PROJECT

Forestry Component Cash Flow of 1-ha of Eucalyptus

Revenues Initial al Construction Year Investment - Fue! Wood Wood Pitprops Total

- …------$>…------

1 2,500 2 3 4 5 6 7 520 520 8 520 520 9 520 400 920 10 520 400 920 11 520 400 562 1,482 12 520 400 787 1.707 13 520 400 1,012 1,932 14 520 400 1,236 2,156 15 520 400 1,461 2,381 16 520 400 1,686 2,606 17 c/ 520 400 562 1,482 18 520 400 562 1,482 19 520 400 562 1,482 20 520 400 562 1,482 21 520 400 562 1,482 22 520 400 562 1,482 23 520 400 562 1,482 24 520 400 562 1,482 25 520 400 562 1,482 26 520 400 562 1,L82 a/ No operating cost. b/ Fuel wood, $b 260 m3; construction wood, $b 400 m3; pítprops, $b 736 m3 (16 pieces) minegate. c/ Second 10-year rotation be-ins. - 91 -

3B0LIVT.

OMASUYOS-LOSANDES RURALDEVEL0PMD4T PROJECT

Detailed Proi-ct Cost (USW)

Project Years - Total Eoregn 1 2 3 4 Cost Ex-hange

Qn-farm Investment Sh-ep 3,000 6,250 9,500 12,750 31,500 4,700 Alpaca 3,100 6,250 9,350 12,500 31,200 10,900 Dairy 149.000 330,000 472,500 563.000 1.514.500 113.550

On-farm InvestmentSubcotal 155,100 342.500 491.350 588,250 1.577.200 129.150

Tractors - 120,000(4) 120,000(4) 120,000(4) 360,000(12) 324,000

Production Credit Sheep 38,400 69,650 99,400 131,200 338,650 162,500 Alpaca 19,300 35,000 49,700 65,900 169,900 81,450 Dairy 168,800 151,250 - 238,450 235,650 794,150 119,100 Crops 155,850 127,850 159,950 240,100 683,750 259,800 Others 5.000 10,000 15,000 20,000 50,000 20,000

ProductionCredit Subtotal 387.350 393,750 562,500 692.850 2,036,450 642.850

Torestrv a I2vestrYnta/ 48,000 - - - 48,000 30,190 TechnicalAsaistance b 10,000 - - - 10,000 10,000 OperatingCost 39,984 40,798 41,652 42,550 164,984 12,200 Farmers Credit- 7,500 22500 22,500 22.500 ,75000 Z2.500

Forestry Subtotal 105.484 63,298 64.152 65,050 297,984 74,890

Road.s tI 45,350 45,350 45,350 45,350 181,400 32,000 Main=etance 45.350 45,350 45.350 181.400 32.000

Roads Subtotal- - 90,700 90.700 90,700 90,700 362.800 64.000

Water Supp1y and Waste Diaposal Wells 50,000(500) 60,000(600) 80,000(800) 110,000(1,100)300,000(3,000)160,000 Pit Privies 5.000<500 6.000(600) 8.000(800) ll,OO(1,100) 30.000(3,000)15.000

Subtotal 55,000 66.000 88,000 121,000 330,300 175,000

Teceinical and Admínistrative Suport Vetiiclese/ 226,750 2,5In^ 10,Oo 12,500 251.750 -39,150 Equipment '4,1"n - - - 24,300 20,450i Other Investment 415,000 - - _ 415,000 134,200 TechnicalAssistance 30,000 30,000 - - 60,000 54,000 OperatingCost 391.800 449.450 511,050 581.950 1.934.250 98.800

Suototal 1,087,850 481,950 521,050 594,450 2,685,300 546,600

Total Baseline Cost 1,881,484 1.558,198 1,937,752 2.272.300 7,649.734 lx958 400

a/ Includesone truck and cwo four-wheel trivevehicl.e. D/ Forty csn-days for nursery specialist. ci About 50 Km of roads to be improved. di About 50 Xm of roadt to be maintained. el 16 four-wheeldrive vehicles,25 motorcycles,2 trucks,5 pick-upa, and 1 carry-all. f/ One year of a dairy specíalist. - 92 -

ANNEX4 Page 1

BOLIVIA

OMASUYOS- LOS ANDES RURAL DEVELOPMENT PROJECT

Related Documents and Data Available in Project File

General Reports and Studies Relating to the Project

(a) Omasuyos-Los Andes Rural Development Project Preparation Report, FAO/Bank Cooperative Program, Volume I and II, Report No. 39/78 BOL, 11, August 10, 1978.

(b) Consideraciones Sobre el Desarrollo Agropecuario y Agro- Industrial de Bolivia, September 1978.

(d) Appraisal of Ulla Ulla Development Project - Bolivia, IBRD, Report No. 1708a-BO, December 1978.

(e) Appraisal of Ingavi Rural Development Project - Bolivia, IBRD, Report No. 936-BO, February 1976.

Appraisal Mission Working Papers

(a) Agricultural Credit

(b) Road Program

(d) Forestry Program

(e) Proposed Agricultural Program

(f) Technical Assistance

(g) Socio-Cultural Characteristics of Local Population

(h) Role of Women ABRD-14079

ANDESRURAL DEVELOPMENT PROJECT Nos. X ROMASUYOS-LOS

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