World Bank Document

Report No. lOlOa-IN COPY India:Appraisal of the AndhraPradesh Irrigation and Command AreaDevelopment Composite Project Public Disclosure Authorized

April 20, 1976 Irrigation and Area Development Division South Asia ProjectsDepartment FOR OFFICIAL USEONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Documenit of lf.-z World Rank

This document hasa restricteddistribution and may be usedby recipients only in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS

US$1.00 = Rupees (Rs) 9.00 1/

WEIGHTS AND MEASURES (METRIC SYSTEM)

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) = 2.47 acres (ac) 1 million cubic meters (Mm3) = 810 acre-feet (ac-ft) 3 1 thousand million cubic feet (TMC) = 28.32 Mm 1 cubic foot per second (cfs) = 0.0283 M3 /s 1 liter per hectare (1/ha) = 14 ft3/1,000 ac I ton = 1,000 kilograms (kg) = 2,205 pounds

1/ Until September 24, 1975, the Rupee was official valued at a fixed Pound Sterling rate. Since then it has been fixed against a 'basket' of currencies. As these curencies are floating, the US Dollar/Rupee exchange rate is subject to change. Conversions in this report have been made at US$1 to Rs 9.00, which was the short-term average rate prevailing at the time of appraisal. FOROFFICIAL USE ONLY

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

AICRIP All-India Coordinated Rice Improvement Project ARDC Agriculture Refinance and Development Corporation CAA Command Area Authority CAD Command Area Development CB Commercial Bank CCA Culturable command area CWC Central Water Commission FAO = Food and Agriculture Organization FCI = Food Corporation of India GNP = Gross National Product GOI = Government of India GOAP = Government of Andhra Pradesh HLC = High Level Canal ICB = International Competitive Bidding ICRISAT = International Crops Research Institute for the Semi- Arid Tropics IRC = Indian Roads Congress LBC = Left.Bank Canal LCB = Local Competitive Bidding LDB (LMB) = Land Development (Mortgage) Bank LDD = Land Development Division LS = Lump Sum MDR = Major District Roads NH = National Highway NSP = Nagarjunasagar Project 0 & M = Operation & Maintenance ODR = Other District Roads PWD = Public Works Department R & B = Roads and Buildings Division RBC = Right Bank Canal RP = Reserved Procurement SH = State Highway TMC = Thousand million cubic feet WBM = Waterbound macadam

This document has a restricteddistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FREQUENTLY USED ABBREVIATIONS FOR OFFICERS

AAO - Assistant Agricultural Officer ADA - Assistant Director of Agriculture DDA - Deputy Director of Agriculture JDA - Joint Director of Agriculture LDC - Lower Division Clerk SMS - Subject Matter Specialist UDC - Upper Division Clerk VEW - Village Extension Worker VLW - Village Level Worker

GLOSSARY

Bajra - Pearl Millet Hot Season - March to May Irrigated Dry (ID) - Irrigated land designated for crops other than rice and sugarcane Irrigated Wet (IW) - Irrigated land designated for rice and sugarcane Jowar - Sorghum Kharif - Wet Season (June to September) Mandi - Market Murrum - Used locally to describe decomposed laterite or other firm gravel soils suitable for road construction purposes Panchayat - Village council Panchayat Samithi - An accretion of several village councils Pipe, Chak - Area served by watercourse, between 15 ha to 40 ha Rabi - Dry season (October to February) Taluk - A sub-division of a District. There are some 20 Districts in Andhra Pradesh State. Warabandi - System of rotational irrigation Zilla Parishad (ZP) - A District council

FISCAL YEAR

GOI, GOAP and agencies - April 1 - March 31 ARDC, Cooperatives - July 1 - June 30 Commercial Banks - January 1 - December 31

INDIA

APPRAISAL OF THE

ANDHRAPRADESH IRRIGATION AND COMMANDAREA

DEVELOPMENTCOMPOSITE PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i-iii

I. INTRODUCTION ...... oo- ...-...... o...... 1

II. BACKGROUND ...... 1 The Economy ...... o.. ..0 ...... * ....-. 1 Agriculture in India ...... ,. 2 Irrigation in India ...... o.o...... 2 Agriculture and Irrigation in Andhra Pradesh 3 Project Formulation ...... -.... *o 5

1II. THE PROJECT AREAS -o...... o..oo.ooo. 5 General ...... , ...... 5 Nagarjunasagar Project (Left and Right Bank

Areas) *...... *....*.* 6 Pochampad Irrigation Project ...... --- 8 Tungabhadra High Level Canal Project ...... 9 Agricultural Supporting Services ...... 10

IV. THE PROJECT ...... o... 11 Project Components ...... 11 Nagarjunasagar Project Infrastructure ...... 12 Irrigation and Drainage ...... oooo ...... 12 Roads ... -...... --...... -...... 13 Water Supply, Demand and Quality ...... 13 Engineering Design ..... oo- ... 14 Construction Methods ...... 15 Implementation Schedule ...... -..--..... 15 Command Area Development ...... 15 Components ...... 15 Engineering Design ...... 15 Construction Methods ...... 16 Effects on Soil Fertility ....o ...... 16 Cost of Engineering ...... 16 Implementation Schedule ...... o- ...... 16

This report is based on the findings of an appraisal mission including Messrs. G.J. Tibor, S. Baker, P. Ljung, R. Pepper, A. Seager and C.J.R. Bridge (Bank) and F. Ritchey and P. Borrowman (Consultants) who visited Andhra Pradesh in August and October 1975. Mr. F. Hotes from Central Projects and Mr. M. Beutgen from Country Programs assisted the mission in its field work. -2- Page No.

Monitoring Project Performance ...... 16 NSP Irrigation Systems Study ...... 16 Modernization Studies and Plans ...... 17 Monitoring Project Benefits ...... 17 Project Preparation and Evaluation Group, GOI ...... o...... 18 Agricultural Extension Services ...... - 18 Cost Estimates * ** ** ** ** ** ** ...... ** *...... 18 F inanc ing ...... 19 Procurement ...... 20 Vehicles and Equipment ...... 20 Civil Works ...... 20 Disbursements ...... 21 Accounts and Audits ...... 22 Environmental Effects of the Project ...... 22

V. ORGANIZATION AND MANAGEMENT ...... 22

Irrigation Department ...... oo 22 Road Department ...... 24 Command Area Aut:hority ...... 24 Agricultural Extension Services ...... 25 Cost Recovery *...... ***.e*O *...... 26

VI. PRODUCTION, MARKETING, PRICES AND FARM INCOMES .... o. 28

Production ...... - ...... 28 Market Prospects .... o...... - ...... 28 Processing and Storage ...... 29 Prices of Agricultural Products ...... 29 Farm Incomes and Repayment Capacity ...... 30

VII. BENEFITS AND JUSTIFIC(ATION ...... o- ...... 31

General ...... ,0...... 31 Extension Services ...... o...... ,...... 32 Command Area Development ...... *.... 32 Nagarjunasagar I:rrigation Infrastructure ...... 33 Summary of Economic Rates of Return ...... 36 Risk & Uncertainty ...... 36

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS ...... o 37 -3-

ANNEXES

1. Climatic Data, Project Areas 2. NSP Irrigation and Drainage Works 3. NSP Road Program 4. CAD Component 5. Water Balance NSP 6. Cost Estimates 7. Equipment Requirements 8. Schedule of Expenditures, Proposed Allocation of the Loan and Estimated Schedule of Disbursements 9. Organization and Management of NSP Irrigation and Road Infra- structure Works 10. Organization and Management, Command Area Development 11. Agricultural Supporting Services 12. Agricultural Production and Marketing 13. Crop Inputs and Farm Budgets 14. Economic Analysis

CHARTS

15670 - Organization Chart: Command Area Development Department 15671 - Implementation Schedule 15672 - Proposed Organization for Operation and Maintenance: Nagarjunasagar Project 15673 - Organization Chart: Nagarjunasagar Project Construction

MAPS

11874 - Sub-Project Areas 11875 - NSP Irrigation and Drainage Infrastructure 12036 - NSP Road Program

INDIA

ANDHRA PRADESH IRRIGATION AND COMMAND AREA

DEVELOPMENT COMPOSITE PROJECT

SUMMARY AND CONCLUSIONS

i. The World Bank Group endorses India's irrigation development program for the next decade which gives special emphasis to the completion of irrigation projects under construction and accelerated command area development (CAD) in already established and newly irrigated areas. Recent Bank Group thinking has developed a composite project approach, under which CAD works are initiated simultaneously in several command areas in a State to test alternative methods of development and serve as a demonstration to farmers. The first stage of any large-scale CAD Program must concentrate on institution-building, in preparation for more extensive subsequent stages. Implementation targets for the first stage are set low, but the option of advancing the date of repeater projects is open in case implementation is faster than expected.

ii. The proposed Andhra Pradesh Irrigation and CAD Composite Project would complete infrastructural investment in Andhra Pradesh's largest irrigation project, the Nagarjunasagar Project (NSP), and initiate command area development on 72,000 ha in four irrigation commands in the State, including the NSP Right and Left Bank areas. The project would be the first step in a CAD Program ultimately covering an area of over one million hectares in the four project areas; it would provide a road system in NSP for an area of 870,000 ha and complete the irrigation distribution and drainage systems for an area of 330,000 ha. Agricultural supporting services, especially extension, would be strengthened and their cost, during the project implementation period, would be financed under the project.

iii. In a subsequent stage of the project, to be implemented within the next 20 years, the irrigation system would be improved to reduce excessive conveyance and operational losses. A detailed monitoring program of system efficiencies forms part of the present project and would provide data for subsequent modernization, as well as information for the design of other major irrigation projects in India. The monitoring of project benefits and studies to determine field irrigation efficiencies are included in the program. Project effects on on-farm and off-farm employment for family and non-family labor would also be studied.

iv. Andhra Pradesh is the fifth largest and fourth most populous State in India. About 70% of the people are dependent on agriculture. The net area irrigated is more than 2 M ha, which represents about 25% of the total cultivated area. v. In the NSP command area, the large majority of the holdings (80% to 90%) are farmed by owner-cultivators. Irrigation facilities to be completed by the project would serve about 100,000 of the 260,000 farm families living - ii - in the total command area. The average farm size is 3.4 ha. The average net annual income from farming, including the imputed value of produce consumed on the farm, is Rs 4,000 per family or US$70 per person. vi. In the Tungabhadra Project High Level Canal CAD area, the number of farm families which would be affected by the first stage command area development is estimated at 1,000. Average land holdings are 6 ha. In the Pochampad Irrigation Project (Credit 268-IN), CAD initially would cover about one-third of the command arEa, and the balance would be taken up under subsequent stages of the project. Some 15,000 farm families (average land holding 2.2 ha) would benefit from the first stage program. vii. Agricultural production in the four sub-project areas already receiving water has net met expectations due to a lack of CAD, inadequate roads and lack of drainage in the NSP areas, as well as ineffective agricultural supporting services. viii. Project implementation for the infrastructural investment in NSP and the extension services would take five years. The first stage CAD Program (72,000 ha) for the four areas would be completed in about three years, to be followed by repeater projects. ix. Total project costs, net of taxes and duties, are estimated at US$297.0 million with a foreign exchange component of US$64.0 million (22%). The proposed credit of US$145.0 million would finance the foreign exchange costs of the project and 35% of local costs, or 49% of total costs. The Government of India (GOI) would re-lend the proceeds of the credit (except disbursements for on-farm development and project preparation) to the Government of Andhra Pradesh (GOAP) in accordance with its standard arrangements for State Development Projects. On-farm works would be financed by farmers using loans from commercial and land development banks. The banks would be refinanced by the Agricultural Refinance and Development Corporation (ARDC) at a rate of 75% to 80% for secured loans and 100% for farmers ineligible for ordinary land development loans. The loans for ineligible farmers would be drawn from a revolving fuad set up in ARDC and funded through GOI, ARDC and GOAP contributions. x. Out of US$13.8 million worth of vehicles and equipment to be procured under the project, US$7.7 million would be subject to international competitive bidding. About US$1.1 million worth of equipment in contracts costing less than US$100,000 each would be purchased locally through the normal procurement procedures of GOAP. The balance of US$5.0 million, principally consisting of vehicles, would be purchased for local procurement and would not be eligible for reimbursement. Civil works on the NSP Main Canals, estimated at US$43.1 million, would be grouped in tenders of at least US$5.5 million and subject to international competitive bidding, with a 7.5% preference for local contractors in accordance with the Board resolution of January 22, 1974 (R 73-291). Other civil works in irrigation, drainage and road construction, valued at US$85.7 million, cannot be grouped into contracts large enough to be of interest to international contractors. These works would be carried out through small, mostly annual contracts. - iii - xi. In order to ensure full cooperationbetween all departmentscon- cerned with CAD, GOAP has set up a CAD Department on the State level and has nominatedAdministrators for CAD at the project level. On-farm development works in the project areas would be compulsoryand the full cost of works would be recovered from the beneficiaries. Satisfactorylegislation em- powering the Secretary CAD to carry out the works has been drawn up. xii. Water charges would be raised in NSP to cover capital recovery and operation and maintenance charges of the irrigationand drainage systems constructedby the project. On-farm developmentworks would be fully paid for by the beneficiaries. xiii. The economic rate of return of all previous and planned investment in NSP is estimated at 15%. The rate of return of the incrementalinvest- ment in infrastructureand CAD, including extension, would range between 20% and 25%, depending on the assumptionsmade for system water use efficiencies. For the CAD Program in Pochampad and Tungabhadra,the economic rate of return would be about 45%. xiv. The project is suitable for a loan of US$145 million on standard Third Window terms of 25 years, including a seven year grace period. The Borrower would be India.

INDIA

APPRAISAL OF THE ANDHRA PRADESH IRRIGATION AND COMMANDAREA DEVELOPMENT COMPOSITE PROJECT

I. INTRODUCTION

1.01 The Government of India (GOI) has requested Bank Group assistance in financing the Nagarjunasagar Irrigation Project (NSP) and commmand area development (CAD) in other major irrigation projects in the State of Andhra Pradesh (AP). The project would include the completion of the canal and drainage networks and the construction of a village road network in NSP and initiate CAD in NSP, Pochampad and Tungabhadra High Level Canal command areas. The project would be the third Bank Group irrigation project in AP and the fourth Bank Group operation in the State.

1.02 Construction of Nagarjunasagar Dam on the Krishna River has been completed. Construction of the Left and Right Bank Canals is about one-half completed, no drainage works have yet been started, and the road network serving the area is inadequate. Command area development was initiated in the Pochampad Project area under an Agricultural Credit Project (226-IN) but has been constrained by the lack of a suitable organization to design and implement the program. Project preparation was assisted by a team from the FAO/ World Bank Cooperative Programme, resulting in a draft report (Andhra Pradesh Composite Command Area Development Project -- Volume 1, No. 32/75 IND 24) dated July 31, 1975. The present report is based on the findings of an Appraisal Mission comprising Messrs. G.J. Tibor, S. Baker, P. Ljung, R. Pepper, A. Seager, and C.J.R. Bridge (Bank) and F. Ritchey and P. Borrowman (Consultants) who visited Andhra Pradesh in August and October, 1975. Mr. M. Beutgen from Country Programs and Mr. F. Hotes from Central Projects staff assisted the Mission in its field work.

II. BACKGROUND

The Economy

2.01 India covers some 3,270 million km2 of which 43% is arable and about 9% is under some kind of irrigation. India's population is about 600 million. Rapid population growth (2.3% p.a.) and a relatively poor natural resource base have imposed sharp limitations on India's economic growth. However, since the inception of economic development planning in 1950, national income has grown at nearly 4% per year, compared with an average growth rate of less than 1% during the preceding 50 years. In 1972, per capita GNP was about US$110. - 2 -

2.02 The Government's present development plans place great emphasis on alleviating poverty and creating employment. This would be accomplished by promoting labor-intensive techniclues,raising the productivity of subsistence farmers, having a national program to supply the minimum needs of the poorest segments of the population, and institutional tax measures to curb consumption by the richer classes.

Agriculture in India

2.03 Agriculture is the most important sector in India. It engages 70% of the labor force and has recently contributed an average of about 45% of the GNP. Agriculture also provides the base for most of India's exports, the most important commodities being jute, tea, leather, cotton goods and cashew nuts. Since 1965, India's development efforts have placed a major emphasis on agriculture and have been oriented to promote the spread of modern technology by increasing the availability of high yielding seeds and fertilizers, expand- ing irrigation and developing modern credit institutions. Yet, despite the impressive results of the "green revolution" in some areas since 1967, the overall annual growth rate in agricultural output in the ten year period ending in 1972 was only 3%, which was little more than population growth and slightly lower than the growth rate in the previous decade. This low overall rate of growth in the agriculture sector has obscured considerable variations over shorter periods of time, between crops, and between regions. The overall rate has been very much affected by the serious droughts in 1965 and 1966 and again in 1972 and 1974. At the same time, the success of high yielding varieties of wheat has brought about increases in production of about 20% p.a. between 1967 and 1971. Introduction of high yielding varieties of other foodgrains, notably rice, has encountered difficulties arising from local climatic and ecological conditions. The effects of the "green revolution," which primarily affected wheat, have been concentrated in northwestern India, largely on account of the advanced state of agriculture in that area and the availability of irrigation.

2.04 Despite the progress made in many aspects of food production, India's agriculture remains heavily dependent upon the vagaries of the weather. Major factors in reducing this dependence would be the expansion of irrigation and the rehabilitation of existing irrigation facilities.

Irrigation in India

2.05 Irrigation development since Independence falls into two well- defined periods. Up to 1964/65, the gross irrigated area was increasing at about 2.1% per year, of which approximately two-thirds was the result of surface irrigation development and one-third was from groundwater. In the second period, until about 1972/73, the gross irrigated area grew more than twice as fast, or 4.5% per year, mainly due to accelerated groundwater development.

2.06 The pace of surface water development has only increased very slightly over the past twenty-five years (except perhaps for a moderate acceleration in the past year or two). Plan targets for an accelerated pace of development have never been fulfilled, although financial targets have generally been met. -3 --

This appears to stem basically from spreading the available resources too thinly over too many projects with the result that the area of projects under construction is continually rising while the area being completed each year remains about constant. Despite frequent policy statements to the effect that efforts will be concentrated on project completion, this is always offset by the need to start new projects.

2.07 On the whole this former point has come in for comparatively little attention, instead attention has mainly focused on the lag between the time when, in official parlance, irrigation potential has been "created", and the time when it is "utilized". It would seem that the average lag has risen from about two years in the First Plan to three years in the Fourth Plan and that currently about 1.8 M ha of potential is unutilized. The major reason for this is the lack of "command area development", which includes both remedying the deficiencies in public investment needed to make it possible to utilize irrigation water supplied in the system (drainage, extension research, roads, markets) as well as investment in water course construction and on-farm development. However, what has received virtually no attention is whether the engineering design, on which the size of the area commanded and the irrigation intensities are based, is itself realistic or whether system losses etc., are not altogether underestimated, thus enforcing a level of utilization which is much lower than planned.

2.08 In view of the substantial investment that has already been made in major irrigation works, the economic return on investment which facilitates effective use of the water provided can be very high. Consequently, CAD has been given high priority under the draft Fifth Plan proposals, and a relatively large proportion of public sector investment in irrigation has been allocated for this purpose. In addition, major institutional changes have been proposed affecting the coordination of services in command areas and the administration of credit. Command area development is a laborious process, requiring considerable administrative work and organizational capacity. The initial period in a CAD Program must be devoted to building institutions capable of implementing large scale programs. Pilot work in as many irrigation project commands as possible is required to test alternative methods of on-farm development, thus gaining a clearer idea of costs and farmers' reactions to the program. In the initial stage of the program, the projects require heavy inputs of manpower for preparation against relatively small sums for investments. The area developed per year in India can only grow as the result of the multiplication of individual CAD programs spread over a large number of projects.

2.09 While emphasizing the need to improve water utilization through CAD, the Government is at the same time pursuing the objective to increase the area under irrigation, in particular where only incremental investments are required. Thus, completion of on-going irrigation developments are given high priority.

Agriculture and Irrigation in Andhra Pradesh

2.10 The State of Andhra Pradesh, with an area of 275,000 km and a popu-- lation of 43.4 million (1973 census), is the fifth largest and fourth most - 4 -

populous in India. About 70% of the people are dependent upon agriculture for their livelihood and about 40% of the area of the State is cultivated with rice, millet, pulses, and groundnuts as the major crops. Some one-third of the area of the State covering about one-fourth of the population, is classified as "drought-affected". A quarter of the net cultivated area is under irrigation (2.7 million ha). The rest depends upon rainfall, which ranges from about 500 mm annually in the southwest to 1,100 mm in the northeast.

2.11 The main sources of irrigation are two major rivers, the Godavari and the Krishna, and their tributaries. Numerous irrigation canals branch from these rivers. The upland areas use rainfed tanks and groundwater for irrigation.

2.12 During the past 25 years, Andhra Pradesh has invested heavily in irrigation projects. Returns have been low, mainly because the available resources have been spread over too many projects, resulting in long construction and gestation periods and delayed benefits. However, in the Fifth Five Year Plan, the development program of GOAP for the irrigation sector has focused on the completion of the three major projects in the State with some 80% of the budget allocated to the Nagarjunasagar and Pochampad projects (Credit No. 268-IN, 1971, US$39 M) and the reconstruction of the Godavari Barrage (Credit No. 532-IN, 1975, US$45 M), the latter two already with IDA assistance. The Godavari Barrage will, by replacing an ancient weir, secure irrigation water to the 400,000 ha command area in the Godavari Delta. Nagarjunasagar and Pochampad, when completed, would bring about one million hectares of previously rainfed land under irrigation.

2.13 Progress of the Pochampad Project was satisfactory during the first two years of project implementation, and both construction work and credit disbursements were ahead of schedule. However, as a result of acute shortages in building materials and explosives, which occurred in 1973-75, completion of essential project parts are likely to fall two years behind schedule. Dam construction is now progressing satisfactorily. Water has been impounded for the first time. On farm development works (CAD) were to be carried out under a separate Agricultural Credit Project (226-IN). It became, however, quickly apparent that for technical reasons (topography, land holding patterns, etc.) CAD calls for an integrated plan for all farm holdings supplied from an irrigation outlet with construction work carried out on all holdings at the same time. Such an approach to CAD needed a competent administrative and technical organization for planning and implementation, backstopped by suitable financial and legal frameworks.

2.14 Following the new Bank Group Policy approved by the Executive Directors on January 22, 1974, ICB for civil works construction became acceptable to GOI, and Bank Group financing of major irrigation works again became possible. The first irrigation project taken up again under the new policy was the reconstruction of the Godavari Barrage. Progress on this project is on schedule. -5-

Project Formulation

2.15 Agricultural production in irrigated areas in Andhra Pradesh has not increased to the extent envisaged because of:

(a) lack of on-farm development resulting in inefficient water use;

(b) extension services which are only partly effective, due to organizational problems and lack of training;

(d) poor drainage conditions; and

(e) inadequate road networks, causing high transport costs.

2.16 Irrigated areas in need of CAD in Andhra Pradesh are estimated to be in excess of two million hectares. As CAD is a slow process (para 2.09) recent Bank Group thinking has evolved towards a CAD composite project approach, covering an entire state. Under this approach, CAD is initiated in as many commands as possible in first stage, short-duration pilot projects (three years). They are aimed at the establishment of local expertise and the instigation of farmer awareness of this type of development. This is the first composite CAD project.

2.17 The proposed project also would complete Andhra Pradesh's largest irrigation project, albeit to a standard which is less than required to ensure a fully effective use of the water resource.

III. THE PROJECT AREAS

General

3.01 The composite project encompasses four of the principal irrigation schemes in the State of Andhra Pradesh accounting for nearly half of the canal irrigated area in the State; the Left and Right Banks of the Nagarjunasagar Irrigation Project, the Pochampad Irrigation Project, and the Tungabhadra High Level Canal Area (Map No. 11874). Hyderabad, the capital of the State, is centrally located between the four project areas. About 3.2 million people live in the four command areas. The socio-economic structure in the areas varies slightly but on the average 30% to 35% of the labor force are owner or tenant cultivators, 45% to 50% are landless agricultural workers and the remaining 20% are employed outside agriculture. - 6 -

3.02 The cultivated area and the population of the four irrigation schemes are:

Command /a Present Number of Area (ha) Population Farms

Pochampad 100,J000 350,000 45,000 NagarjunasagarRBC 475,000 1,600,000 150,000 Nagarjunasagar LBC 397,000 1,100,000 110,000 Tungabhadra HLC 95,000 150,000 15,000

Total 1,067,000 3,200,000 320,000

/a At full development.

3.03 All 320,000 farm families would benefit from the improved agricultural extension services of the project. Ultimately, most of the farmers would benefit from the CAD component. However, during the first three-year phase of the CAD program only about 20,000 farms would be reached. The primary benefits of the irrigation infrastructure component of the project would go to some 100,000 farm families in the two Nagarjunasagar command areas where irrigation works would be completed by the project.

3.04 Recently, land tenancy has been abolished and all owners are required by law to cultivate their own land. However, during a transitional period some types of tenancy arrangements are still valid. Some informal arrangements exist outside the provisions of the law but about 90% of the farmers cultivate only their own land. Some 1 to 2% of the farmers are pure tenants and roughly 10% cultivate some leased land besides their own. The tenancy arrangements vary substantially. In some cases the tenant pays a fixed rent, either in cash or kind; in other cases, he pays a fixed proportion of the crop (varying from one-third to two-thirds) to the owner.

Nagarjunasagar Project (Left and Right Bank Areas)

3.05 Planning for the Nagarjunasagar Project (NSP) dates back to 1930, when site explorations for construction of a major storage dam and reservoir on the Krishna River at Nandikonda were initiated by the Hyderabad Government. The Government of India (GOI) set up the Khosla Committee in 1951 to examine alternative proposals by the then States of Hyderabad and Andhra. Also in 1951, the dependable flow of the Krishna was allocated between the riparian States in a decision by the GOI P:lanning Commission. The Khosla Committee reported its findings in 1952 and the Nandikonda Report was prepared jointly by the States of Andhra and Hyderabad in 1954. Construction of the project was initiated in 1955. The dam is now complete, apart from the addition of power generating facilities, and construction of the first stage of the Left and Right Bank Canals is more than one-half completed. Areas planned to be irrigated under this project tota:L 397,000 ha (980,000 ac) on the Left Bank and 475,000 ha (1,174,000 ac) on the Right Bank. -7-

3.06 Climate. The rainfall varies considerably over the extensive command area and occurs principally in two monsoon seasons, the first (southwest monsoon) in the kharif season from June to September and the second (northeast monsoon) in the rabi season from October to December. Nearly 70% of the annual rainfall in the Left Bank and 55% in the Right Bank area occurs in the kharif season. About 20% of the annual rainfall in the Left Bank and about 30% in the Right Bank area occurs during the rabi season. The annual average rainfall ranges from 680 mm (at Huzurnagar) to 1,110 mm (at Eluru in the coastal area). The temperatures range from a low of about 150C in December to about 450C in May. Relative humidity ranges from about 30% to about 80%, with a mean of about 60%. Evaporation ranges from about 145 mm in November and December to about 350 mm in May (Annex 1).

3.07 Topography and Soils. There are two types of soils in the project area, the black clayey soils occupying the lower elevations and the red sandy soils on the higher lands. The black soils are in gently undulating topography, with slopes commonly less than 1%, and occur over about two-thirds of the Right Bank area and one-third of the Left Bank area. The red soils, accounting for the remainder of the area, are in rolling topography with slopes generally in the 1% to 3% range. They are shallow, and about 25% are less than 30 cm deep. The black soils are generally deeper with about 90% more than 45 cm deep. For land development, the most significant characteristics are the shallow depth of the red soils, the low fertility of the under- lying murrum and the irregular topography. The black soils have low-to-moderate permeability and are well suited to rice production. The red soils have a moderate-to-high rate of permeability and are better suited for upland crops.

3.08 Existing Irrigation and Drainage. The irrigation distribution system for about 335,000 ha (827,000 ac) on the Right Bank and 206,000 ha (508,000 ac) on the Left Bank would be completed by July 1976. Most of this area received irrigation during the 1975 irrigation season.

3.09 Drainage facilities have not been provided since irrigation has been introduced only recently. A system of natural drainageways resulting from the rolling topography has drained the area effectively in the past. Sub-surface drainage is not contemplated, since rice will be the principal crop in the black soils, and the red soils, in general, are well drained. Sustained irrigation in the black soils, however, would cause waterlogging and increased salinity unless adequate surface drainage is provided. Drain- age requirements will be identified and resolved as the project is implemented. Drainage requirements presently are confined to small, localized areas but will increase significantly as the full irrigation potential of the project is realized. Small, localized salt-affected areas are known to exist in the project command area.

3.10 Agricultural Production. The main rainfed crops in the kharif are pearl millet (bajra), sorghum (jowar), pulses, oilseeds, and some cotton. In the rabi, the main rainfed crops are pulses, millet and fodder. Under irrigation, paddy is the principal kharif crop and in rabi, rice, groundnuts and (on black soils) cotton. Cultivators in already irrigated areas have been - 8 -

more or less free to grow paddy regardless of whether localized for irrigated wet (IW) or irrigated dry (ID) crops. Generally, they grow two irrigated crops per year. This has been possible because of an excess amount of irrigation water available during the early years of project implementation. As the irrigated area expands, the surplus will disappear. Government permission allowing temporary irrigated double cropping has now been withdrawn. With the completion of the canals, the irrigation water supply to each cultivator would be restricted in accordance with the design cropping pattern. A considerable reduction from present income levels may result for those cultivators who have had irrigation water for double cropping.

3.11 Status of Land Development. Irrigation has followed closely behind canal construction. In view of the available surplus water, most cultivators have prepared their holdings for paddy by leveling the fields, constructing bunds and using field-to-field irrigation. Generally only a single field channel traverses the area served by an outlet. This type of land development is not suited to upland crops without modification and is only marginally acceptable for paddy. On-farm development in areas coming under irrigation would conform to the type of cropping proposed.

3.12 Transportation and Marketing. The project area is well provided with main arterial roads leading to India's principal ports and cities. Main railway lines also traverse the project area on the same general alignment as the principal highways. The transportation network includes national highways, State highways and District roads. The condition of this road system is generally satisfactory in the Right Bank area and in undeveloped areas of the Left Bank. However, considerable deterioration has taken place in the more fully developed areas on the Left Bank. Various Zilla Parishad and Samithi Councils are responsible for the local village roads, which are mostly little more than dry weather tracks. Their alignments are poor and, in some cases, earthworks have been started but never completed. Erosion over the years has reduced the road level in many sections to below the surrounding ground level and drainage is generally inadequate. Every village constitutes a major bottleneck as by-passes have not been provided and the streets are invariably narrow and winding. Due to lack of funds, virtually no maintenance has been carried out for many years and reconstruction of most village roads is required.

Pochampad Irrigation Project

3.13 General. The first stage (100,000 ha) of the Pochampad Irrigation Project is being developed with IDA assistance. Completion of the canal system is expected by June 1978. The project includes a dam on the Godavari River, an irrigation system and road infrastructure (para 2.12 - 2.13). The topography, climate, hydrology, soils, land tenure, agronomy and infrastructure of the Pochampad Project area are described in the IDA Appraisal Report No. PA-90a, dated June 16, 1971. Dependable water supply for one crop is provided from regulated flows of the Godavari River and for a partial second crop from about 25,000 open dug wells in the 100,000 ha service area of the project. - 9-

Tungabhadra High Level Canal Project

3.14 General. The Tungabhadra High Level Canal (HLC) Project is a component of the Tungabhadra scheme conceived as a protective irrigation project to serve the drought-affected Districts of Raichur and Bellary in Karnataka, and Kurnool, Anantapur and Cuddapah in Andhra Pradesh. The Tungabhadra Dam and Reservoir, completed in 1958, regulates the flows of the Tungabhadra River and provides water for irrigation and power development. The Tungabhadra High Level Canal is a seasonal canal intended to provide supplemental irrigation to 95,000 ha during the kharif and early rabi seasons. The first stage (45,000 ha) and the Guntakal Branch Canal and its tributaries are complete.

3.15 Climate. The area receives rainfall during both the southwest and northeast monsoons. Average annual rainfall at Anantapur is 580 mm, 90% of which occurs between May and October. Variations from year to year are considerable. The rainfall pattern also -is marked by extreme unreliability month by month and periods without rain for one month or more may occur at any time during the monsoon season. It is these drought periods which are responsible for the almost complete failure of crops, especially on the red soils. Generally, rainfall is highest and most dependable during the months of September and October.

3.16 Mean monthly temperatures are highest during April and May, reaching 320C. Occassional heavy rainstorms may occur during these months. Temper- atures drop off to around 270C and 280C during the main period of the monsoon. Winters are mild and short with temperatures of about 250 C from November to the end of January.

3.17 Topography and Soils. The area has a gently rolling topography with slopes averaging between 1% and 1-1/2%. About 80% of the area has clay soils of more than 90 cm in depth. Sandy loams and sandy clay loams occupy 13% of the area. The remainder consists of eroded or saline/alkaline soils which can be reclaimed. Due to the rolling topography, natural drainage of the area is fairly good. Some low-lying areas have become waterlogged, or are in danger of becoming waterlogged with an increase in irrigation.

3.18 Agricultural Production. Where there is irrigation, paddy is grown on the IW lands. Hybrid cotton has become popular on ID lands. Groundnuts are grown on the lighter soils. Improved varieties of pearl millet and sorghum are also grown.

3.19 Transportation and Marketing. The principal transportation network in the Tungabhadra area is adequate and in relatively good condition. Main roads pass through various sectors of the command area. - 10 -

Agricultural Supporting Services

3.20 Agricultural Research. The four sub-project areas are served by the research activities of the State Agricultural University in Rajendranagar near Hyderabad and by the Agricultural College in Bapatla, in the Krishna Delta area. The All-India Coordinated Research Programs are located in Rajendranagar (rice, sorghum, maize), Karimnagar (maize) and Guntur (cotton). The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in Hyderabad is a major recipient of assistance from the Consultative Group on International Agricultural Research sponsored by the Bank. It has been functioning since 1973 and is making major contributions to the understanding of the constraints in the development of crops other than rice. Research backstopping is good; however, speedier and more frequent exchanges with the extension services are needed.

3.21 Agricultural Extension activities suffer from a staff shortage, lack of adequate housing for the field staff near their area of work and a lack of transport at all levels. The system of management, continuing refresher training, and the vital formalized communication with the research organizations is also inadequate for the needs of the project.

3.22 Agricultural Inputs Services:

a. Seed supplies and quality are adequate; they have recently been appraised by IDA and a project for strengthening areas of weakness and developing further the inter-State potential for the production and distribution of rice seeds is under preparation.

b. Fertilizers are being distributed by an extensive network of private and cooperative dealers, augmented by sales points operated by the extension service. While provisions exist to compensate for extra transport costs incurred in servicing sales points away from the main lines of communications, recent shortages have enabled the sellers to dispose of all their supplies near the major centers. Given the enhanced demand under the project and stronger competition, it is expected that this problem will be resolved.

c. Pesticides are provided by private and cooperative dealers and formulators who also sell sprayers. The former will soon be regulated by legislation, already enacted in other States, as to indicating composition and shelf life of the chemicals. The latter would require modernization in the use of materials and design.

d. Short-term credit comes from cooperatives and commercial banks. Funds are available to increase operations among farmers eligible to receive credit. - 11 -

IV. THE PROJECT

Project Components

4.01 The proposed project is the first of the composite command area development (CAD) projects planned for Bank Group assistance in India.

4.02 The project would include:

(a) completion of the NSP Left Main Canal (about 65 mi) and the construction of irrigation and drainage facilities to serve about 191,000 ha (472,000 ac) of the 397,000 ha (980,000 ac) Left Bank area;

(b) completion of the NSP Right Main Canal (about 29 mi) and the construction of irrigation and drainage facilities to serve about 140,000 ha (347,000 ac) of the 475,000 ha (1,174,000 ac) Right Bank area;

(d) Command area development covering 72,000 ha (178,000 ac) of land in four major irrigation schemes in Andhra Pradesh. Pilot or first stage land improvement work would be provided for: 16,000 ha in the NSP Left Bank area; 16,000 ha in the NSP Right Bank area; 33,600 ha in the Pochampad Irrigation Project area, and 6,400 ha in the Tungabhadra High Level Canal area. The areas in which land development would be carried out are principally new areas coming under irrigation for the first time, rather than areas already under irrigation requiring improvement or remedial work;

(e) special studies of the NSP irrigation distribution system to determine and evaluate system operation and seepage losses. Project modernization studies would also be made to determine possible modifications or additions to the irrigation system to achieve improved irrigation efficiencies;

(f) a program to monitor crop yields in the four project command areas and to monitor and define field irrigation efficiencies below the turnouts in the NSP Left and Right Bank areas. The studies would attempt to define project benefits resulting from irrigation, command area development, and extension service work in the project area; - 12 -

(g) procurement of vehicles and equipment;

(h) extension service assistance.

Detailed descriptions are given in Annexes 2, 3, 4 and 11.

Nagarjunasagar Project Infrastructure

4.03 Irrigation and Drainage. The Nagarjunasagar Project consists of three units: (1) a storage and diversion dam and reservoir on the Krishna River at Nandikonda; (2) the Right Bank Irrigation System, comprised of the 126 mi long Right Canal, which heads at the dam with an initial capacity of 11,000 cfs (stage 1), and major and minor canal distributors to irrigation turnouts serving from 40 to 50 ha; and (3) the Left Bank irrigation system, which includes the Left Canal and Main Branch Canal extension (initial diversion capacity of 11,000 cfs and a total length of 187 mi) and major and minor distributors. The dam and reservoir and portions of the irrigation distribution systems are complete. Irrigation water has been supplied to an increasingly larger portion of tne command area since 1967. The Bank project would include irrigation and drainage works to be tendered after January 1, 1976.

4.04 The Right Canal would be extended from mile 86 to mile 126. About 11 mi of this reach are presently being constructed or are under contract. The Bank project would include the remaining 29 mi of main canal, the construction of 59 canal structures not yet under contract, the Pamidipadu, Darsi and Ongole branch canals and about 900 mi of major and minor distributor canals. The canals would be unlined and would include structures for water control and delivery. A total of about 650 mi of natural drainage channels would be improved and deepened and about 1,600 mi of intermediate drains from the pipes to the natural drains would be constructed as the project develops and drainage requirements are identified.

4.05 On the Left Bank, the 21st Main Branch Canal, an extension of the Left Canal, would be extended from mile 10/6 to mile 76. A total of 142 structures and 65 mi of channel would be constructed. The Bonakal, Madhira, and Nuzividu and Mylavaram Branch Canals and about 620 mi of major and minor distributors would be provided. Construction of the canals and distributors and the provision of structures in the Left Bank area would be similar to that in the Right Bank area. Drainage system improvements would include deepening and improving about 950 mi of the natural drainage channels and the construction of about 2,350 mi of intermediate drains from the pipes to the natural drainage ways.

4.06 On-farm water distribution and drainage works at the pipe level would be provided under the staged Command Area Development Program for both the NSP Right and Left Bank areas as well as the Pochampad and Tungabhadra project areas (para 4.18). - 13 -

4.07 Roads. The road improvement and construction program would provide a village road network covering the entire NSP area. The layout has been designed to provide all-weather access from the main network roads to a point not more than 4 km distant from every village. This is in line with the GOI norm for the provision of roads in areas of rural development. Roads for operation and maintenance (O&M) would be built along both banks of the Right and Left Canals and along one bank of the branch canals and the larger major and minor distributors as a part of the irrigation infrastructure. A total of about 400 km (250 mi) of 0&M roadways would be built along banks of canals included in the project in the NSP Right Bank area and about 650 km (400 mi) in the NSP Left Bank area. These roadways would be incorporated into the village road network. The road improvement and construction program would take five years and comprise:

(a) the rehabilitation of about 630 km of existing waterbound macadam roads;

(b) improvements to about 415 km of existing earth roads to waterbound macadam standards; and

The standards to be adopted for the road work are generally sound and follow Indian Government standards. A detailed description of roads included in the project is given in Annex 3.

4.08 Water Supply, Demand and Quality. Irrigation water for the project would be supplied from Nagarjunasagar Reservoir. A total of 264 thousand million cubic feet (TMC) annually has been allocated to the NSP by the Krish- na Water Tribunal, equally divided between the Right and Left Bank areas. An ample quantity of water is available in the Krishna River at the dam to supply the additional irrigation requirements of the project in excess of the 264 TMC allocation until about 1995 when upstream projects with allocated rights will have been developed. Additional water conservation and water use measures (reducing canal seepage and operational losses and increasing irrigation efficiencies) would have to be implemented before 1995 to reduce water requirements to the 264 TMC allocation. Since the opportunity cost of the excess water for the next 20 years will be zero, there is no economic justification for carrying out these measures under the present project. A history of the Krishna River water allocation proceedings and a summary of water balance studies for the Nagarjunasagar Project are given in Annex 5.

4.09 Water requirements studies were severely hampered by a lack of observed data regarding plant water requirements, field efficiencies, conveyance efficiencies and operational losses which therefore had to be estimated to a large extent. The Bank's estimates of irrigation efficiency at full development are lower than those made by GOI. The water requirements for - 14 -

each crop were determined by the CLass A Pan Evaporation method using observed and estimated values. Irrigation requirements were based on crop use and irrigation system efficiency criteria included in Annex 5 and calculated using computer programs developed by the Bank. Both the Bank and GOI values were used in the computations. Water requirements are expected to range from 189 to 206 TMC for the Right Bank command area and from 173 to 196 TMC for the Left Bank command area, depending on the basic assumptions made. Assurances were obtained from GOI that the State of Andhra Pradesh would be free to use the excess water flowing in the Krishna River without, however, acquiring permanent rights to this flow. An assurance from GOAP was also obtained that it would make available at the dam site additional water over and above the 264 TMC allocated to NSP as may be required to irrigate according to the cropping patterns agreed between the Bank and GOAP. The additional water would be required until such time as overall water use efficiencies improve sufficiently to make it unnecessary. Hvdroelectric power stations are at present under construction at the Nagarjuniasagarand the upstream Srisailam dams. An assurance was obtained from GOAP that the reservoir operation programs for these power stations would be fullv coordinated with irrigation needs of NSP.

4.10 Water in the Krishna River at the Nagarjunasagar Dam is of good quality and has been used for irrigation with excellent results for many years. Chemical tests from the Nagarjunasagar Reservoir show the specific conductivity to be less than 300 micromohs per cm. The water is slightly alkaline (ph 7.8) and contains less than 200 ppm of water soluble salts.

4.11 Engineering Design. The canal and structure designs follow established Indian practices. Project planning studies, designs and estimates of the irrigation and drainage systems and associated works are carried out by the NSP engineering staff. Planning and design criteria are provided by the Central Water Commission (CWC). Assumptions on conveyance efficiencies and operational losses were the key criteria used to size the project. The criteria used by GOI are considered by the Bank to be generally overly optimistic. System losses commensurate with a design which provides complete operational flexibility and a high level of water use discipline were assumed. High conveyance and operational efficiencies, however, can be obtained only with projects planned to respond quickly to changing weather conditions and resulting fluctuations in water demand. The NSP system has been planned and designed without this flexibility. Minor modifications would be made in the design of the irrigation system under the Bank project to improve operational control. The modifications would include the provision of additional regulators at five locations in the Right and Left Main Canals and design changes for drop structures on the branch canals and major and minor distributors to control flow adequately and assure water deliveries from all canal offtakes. The proposed modifications were discussed with GOAP during negotiations.

4.12 Canal and structure surveys, test pit work, canal and structure designs and specifications are either completed or are underway and scheduled for completion not later than early 1978. Engineering surveys and designs for the branch canals and the irrigation distribution systems in the irrigation blocks would be completed by early 1978. Drainage requirements would be identified and the drainage system provided during project development as requirements become known. The status of engineering designs is presented in more detail in Annex 2. - 15 -

4.13 Construction Methods. The construction of irrigation projects in India is principally performed by manual labor. Present construction practices in the project area make use of mechanical excavating, hauling and compacting equipment only to construct high canal embankments for major aqueducts at valley crossings and for canal excavation in rock for deep cuts in excess of 10 m. Labor-intensive construction methods would be used for all general project construction work. Sheepsfoot and road rollers would be used for canal embankment compaction and for the compaction of roads. Canal structures, except for span portions, would be constructed of masonry and the stones would be hand quarried from nearby quartzite deposits, which underlie most of the project area. Coarse aggregate for reinforced concrete would be produced by manual labor from excavated rock. Additional construction details are provided in Annex 2.

4.14 Implementation Schedule. Since NSP is on-going, the new works would be implemented in a relatively short period. Implementation of the infrastructure components would take five years (Chart 15671). Irrigation works to be tendered from January 1976 onward would be included in the project insofar as the Bank's standards of tendering are followed. A minimum move in and start up time would be required due to the existence of many contractors and a large experienced labor pool in the area.

Command Area Development

4.15 Components. Command area development would be undertaken for a total area of 72,000 ha in the four command areas of the project over a three year period. Land development work would be provided for a first stage program comprising 16,000 ha in the NSP Left Bank area, 16,000 ha in the NSP Right Bank area, 33,600 ha in the Pochampad Irrigation Project area, and 6,400 ha in the Tungabhadra High Level Canal area. The work would include the construction of a network of field channels, field drains and related structures (drops, distribution boxes and turnouts) in the command of an outlet (pipe) and the necessary land leveling and shaping of the farm holdings required for efficient utilization of irrigation water supplies and cultivation practices. All irrigation and drainage channels would be treated as communal property.

4.16 Land leveling and shaping would be compulsory on all farm holdings and would be carried out to the specifications set by the Command Area Authority (CAA). The pilot operation carried out in the Pochampad Project during the last two years has confirmed the willingness of the farmers to participate in the CAD Program. Implementation would be by the farmers themselves or by the CAA through suitable contracting agencies with or without financial assistance from commercial banks (CBs) or land development banks (LDBs) (paras 4.33 and 5.13).

4.17 Engineering Design. Planning and design of on-farm works would be done on rectified aerial photographs. Soil and cadastral data would be collected and suitably presented on the photos. The layout of farm channels - 16 -

and drains and cost estimates would be prepared for the entire pipe. Re- venue officers and representatives of the Land Development Division (LDD) of the CAD Authority would discuss the plan with the villagers and obtain their agreement. The individual holdings would then be resurveyed for the preparation of the leveling and/or land shaping plan. A file, setting out the cost of development, would be prepared for each farmer stating his proportionate share of the cost of constructing the communally-owned works and the cost for leveling his land.

4.18 Construction Methods. Construction of watercourses (field channels and drains) and the simple masonry structures would be let to small village contractors. All excavation would be done by manual labor. The works would be staked out and construction supervised by the LDDs of the CAA. Land leveling work, generally involving moving small quantities of earth over short distances would be awarded to contractors or farmers owning small wheeled tractors. Tractor attachments required for the land leveling operation would be procured by the CAA and rented to the contractors.

4.19 Effects on Soil Fertility. In most areas, and especially on shallow red soils, the earth moving involved would have a temporary adverse effect on soil fertility. Experience from Pochampad shows that within three seasons, loss of fertility is no longer noticeable. Fertilizer applications over and above the normally recommended dosage and the application of organic manure would enhance yields. Farmers seem aware of such temporary inconvenience but do not consider it a deterrent.

4.20 Cost of Engineering. At present, engineering costs for the CAD works are estimated to be in excess of Rs 600/ha or 40% of the cost of the works (Rs 1,500 per ha). Undoubtedly, these percentages can be reduced with more efficient work procedures. More experience in land leveling by contractors also would reduce the cost of supervision. However, in view of the type of work involved, the engineering overhead is bound to remain high, probably in excess of 25%.

4.21 Implementation Schedule. Targets for on-farm development wotks in the four command areas were set at 72,000 ha over a three year implementation period. The Bank Group may consider providing financial assistance for a follow-up CAD project as soon as these targets have been met.

Monitoring Project Performance

4.22 NSP Irrigation System Study. There is a lack of data on present levels of conveyance and operational losses and on field irrigation efficiencies not only in the NSP canal system but all over India. To generate such data, a large scale flow measuring program would be carried out in the NSP area, with the necessary infrastructural investment and equipment needs to be met from project funds. The study program would include the construction of 700 to 800 gauging stations at selected locations throughout the NSP irrigation system on main canals, branch canals and major and minor distributors. Recorders would be installed at each gauging site to record canal - 17 -

and lateral flows on a continuous basis. Gauging stations and the recorders would be carefully rated. The data recorded on the flow charts or tapes would be digitized and fed into a computer for calculating the flows throughout the entire system. Consultants would assist in setting up the flow measurement and automatic data processing program to insure that reliable data is obtained.

4.23 Modernization Studies and Plans. Corollary studies would be made to determine possible modifications or additions to the NSP irrigation system which could be taken to reduce seepage losses and increase operating efficiencies throughout the system. Modern irrigation system planning concepts would be used in the planning studies and the plans and estimates would be prepared on the assumption of full control of irrigation deliveries. A consultant would advise GOAP on this work.

4.24 The water measurement monitoring program staff would assist and advise CAD personnel conducting the field irrigation efficency studies in the pipe area (paras 4.25 to 4.27). Costs of the NSP irrigation system monitoring program and modernization studies were estimated to be US$3.63 M, including vehicles and equipment and consultant costs.

4.25 Monitoring Project Benefits. A monitoring program would be set up in the NSP command area to determine:

(a) the effect of irrigation on areas presently not irrigated; and

(b) field irrigation efficiencies below the pipe turnouts for various crops in the red and black soils.

In the four CAD areas included in the project, the program would monitor selected pipes to define:

(a) the impact of extension service assistance;

(b) the effects of command area development on presently irrigated land, and

4.26 Monitoring would start in June/July 1977 and continue for four years. Land ownership, occupancy, cropping patterns and intensities and yields would be recorded. Farm labor surveys would cover all farmers who have land in the recorded area, including their nearby fields and farms. The off-farm employment survey would be an independent operation, taking place in the first and final year of the monitoring program. - 18 -

4.27 The project agricultural benefit monitoring activities would be under the direction of the Secretary, CAD. A Senior Agricultural Officer would be responsible for work performance and program coordination. The work would be contracted to one or more local institutions selected by GOAP and approved by the Bank. Water use and irrigation efficiency studies below the turnouts would be conducted in close cooperation with and under the guidance of the NSP engineering staff. The total cost of monitoring project benefits and conducting the field irrigation efficiency studies is estimated to be US$800,000.

4.28 Project Preparation and Evaluation Group, GOI. The GOI is setting up a technical group in the Ministry of Agriculture and Irrigation, to assist the States in the preparation of major engineering projects for Bank financing. The group, which will be composed of top level technicians of various disciplines, will also review the planning and design criteria used in these projects to make the projects responsive to the needs of modern irrigated farming. The foreign currency cost of operating the group, over a three year period, was estimated at US$50,000, for short-term consultancies and study trips to inspect irrigation projects abroad.

Agricultural Extension Services

4.29 The Agricultural Extension Service would be reorganized and its operating methods changed (para 5.14). All staff would have unimpeded mobility to carry out their work assignment; they would be able to reside near their work and participate in training courses outside Andhra Pradesh. The project would provide vehicles, housing, training and office and storage space.

Cost Estimates

4.30 Cost estimates are based on actual contract prices for similar works awarded recently. Engineering estimates, based on mid-1976 scheduled rates, have been increased by about 8% to bring them in line with prevailing contract prices. The total project costs are estimated at US$297 M, of which US$64 M or 22% would be foreign exchange. Unit prices for equipment, materials and supplies are based on recent quotations received by the Indian Government and on 1976 price quotations of equipment suppliers. The cost estimates do not include taxes and duties. The Government's costs for administration, design and construction supervision are: estimated to be 20% of construction costs, in accordance with previous cost records for this work. A physical contingency factor based on the level of data preparation and the degree of investigations completed was applied. It amounts to 20% for the NSP irrigation and drainage system and 15% for the NSP road program, extension service costs and the monitoring program. Costs for the drainage system were based on per acre costs estimated for typical areas in both the Right and Left Bank command areas. Costs due to expected price increases amount to about 35% of total project costs in accordance with the following assumed annual inflation rates:

Annual Inflation Rate 1976 1977-1979 1980-1981

Civil Works 9 12 10

Equipment & Services 9 8 7 - 19 -

4.31 Details of project costs are presented in Annex 6 and are summarized below: Foreign Local Foreign Total Local Foreign Total Exchange -----Rupees million------US$ million---- %

NSP Right Canal Infrastructure 455.2 101.8 557.0 50.6 11.3 61.9 18

NSP Left Canal Infrastructure 597.5 139.5 737.0 66.4 15.5 81.9 19

Operation & Main- tenance equipment 22.1 67.5 89.6 2.5 7.5 10.0 79

NSP Road Program 113.1 19.4 132.5 12.5 2.2 14.7 15

Road Construction Equipment 9.0 4.5 13.5 1.0 0.5 1.5 33

Command Area Develop- 130.5 22.5 153.0 14.5 2.5 17.0 15 ment

CAD Equipment 5.4 1.8 7.2 0.6 0.2 0.8 25

Extension Services 16.2 2.6 18.8 1.8 0.3 2.1 13

Extension Service Vehicles 2.2 0.9 3.1 0.2 0.1 0.3 29

Monitoring Project Performance (including 27.0 10.8 37.8 3.0 1.2 4.2 33 equipment cost of US$1.2 M)

GOI, Project Preparation & Evaluation Group - 0.5 0.5 - 0.1 0.1 100

Base Cost Estimate 1,378.2 371.8 1,750.0 153.1 41.4 194.5 24

Physical Contin- gencies 178.8 52.2 231.0 19.9 5.7 25.6 22

Expected Price Increases 540.0 152.0 692.0 60.0 16.9 76.9 22

Total Project Cost 2,097.0 576.0 2.673.0 233.0 64.0 297.0 22

Financing

4.32 The proposed loan of US$145 million would finance the foreign exchange components of the project (US$64 million) and 35% of the local costs or - 20 -

about 49% of the total project cost. The loan would be made to GOI. Ir- rigation, drainage and road construction would be financed by GOAP from its development budget, which includes a GOI contribution. Operation and maintenance costs would be financed by GOAP from its regular budget.

4.33 Assurances were obtained from GOI that: (a) the proceeds of the loan, except disbursements for on-farm development and for the project preparation and evaluation group would be made available to GOAP, and (b) GOI would cause GOAP to make arrangements in its annual development plans for the provision of funds required for the implementation of the project in accordance with the implementation schedule.

4.34 On-farm development works would be financed by the farmers using funds provided by CBs and LDBs (LMBs) and by the Agricultural Refinance and- Development Corporation (ARDC). The LDB and CB loans to eligible farmers would be refinanced by ARDC. The loans to farmers ineligible for ordinary bank credit (primarily due to unclear title) would be refinanced to 100% by a revolving fund administered by ARDC. Details are given in Annex 10. Condition of disbursement for the CAD component would be that evidence satisfactory to the Bank has been furnished showing that Andhra Pradesh can at its option carry out on-farm development works as it considers necessary in the project area and recover the cost of such works from the farmers concerned, also that a Subsidiary Loan Agreement, satisfactory to the Bank has been executed between GOI and ARDC and that ARDC has set up the revolving fund for financing loans to farmers ineligible for ordinary bank credit.

Procurement

4.35 Vehicles and Equipment, The estimated cost of vehicles and equipment for project management, road construction, 0 & M and monitoring of NSP is US$13.8 M. Out of this total, an estimated US$ 7.7 M would be subject to international competitive bidding (ICB) in accordance with Bank guidelines. A preference, limited to 15% of the cif price of imported goods or the prevailing customs duty, if lower, would be extended to local manufacturers in the evaluation of bids. About US$1.1 M worth of equipment and vehicles, consisting of groups of contracts costing less than US$100,000 each, which for reasons of efficiency are not suitable for ICB, would be purchased locally through normal procurement procedures of GOAP, which are acceptable to the Bank. The balance of US$5.0 M, principally consisting of rollers, trucks, 4- wheel drive field vehicles, cars, cement mixers and some of the monitoring, communication and workshop equipment, would be reserved for local procurement and would not be eligible for reimbursement out of the proceeds of the loan.

4.36 Civil Works. A review has been made on the suitability of the project civil works for grouping into large enough contracts for ICB and the following conclusions have been reached (amounts shown are basic costs, net of physical and price contingencies and administration and engineering staff costs but include the cost of materials such as cement and steel, which would be supplied by GOAP at a fixed price to the contractors): - 21 -

(a) Works on the NSP Main Canals (US$43.1 M). These works would be issued for ICB, each tender for a minimum value of US$5.5 M. Tenders may include works on both the Left and Right Bank Canals and would be divided in up to ten sub-contracts to encourage the participation of local contractors. Local contractors participating in the bidding would be entitled to a 7.5% preference. Tender documents would clearly specify this preference and the manner of its application;

(b) Works on the NSP Irrigation Distribution and Drainage Systems (US$72.8 M). These works would be individually small and scattered over a very large area and would need to be carried out in periods between cropping seasons. Under these conditions, it would not be feasible to group these works into large contracts suitable for ICB;

(c) Roads (US$12.9 M). Because of the need for the road program to keep pace with other project elements, particularly the completion of the irrigation distribution and drainage systems, the works must be spread over five years and cannot be grouped into a contract which would attract large contractors; and

(d) On-farm development (US$12.0 M). These works would be scattered over the four irrigation project areas. They would need to be planned and implemented on short notice and in a limited period of time to avoid unnecessary damage to crops in the field. For these reasons, the works could not be grouped into large multi-year contracts.

4.37 Except on the NSP main canals, it is proposed to carry out the works by small, mainly annual, contracts to be advertised locally in accordance with standard Government procedures, which are acceptable to the Bank. Where this is not practicable, work would be carried out under force account, which probably would include some of the drainage works. For road construction and some on-farm works, the firms likely to bid would not possess all the equipment required. Since the necessary equipment is simple and unlikely to be misused, it would be provided under the project and hired out by the PWD and CAD departments to the successful bidders.

Disbursements

4.38 Disbursements would be made at the rate of 100% against the cif cost of directly imported equipment or the ex-factory price of equipment manufactured locally, and at the rate of 70% for imported equipment procured locally. Disbursement for civil works carried out by contract or force account would be at agreed percentages (presently estimated at 66% for CAD works and 60% for all other civil works). Disbursement for force account would be made against a certificate of expenditure from GOAP. The document- ation for this would not be submitted for the Bank's review but would be - 22 - retained by GOAP and made available for inspection during project supervision. The estimated schedule of expenditures, the proposed allocation of the proceeds of the loan, and an annual disbursement schedule are presented in Annex 8. It is expected that disbursements would be completed by December 1982, about one and one half years after the completion of the project.

Accounts and Audit

4.39 The PWD and CAD departments would be subject to normal Government control and auditing procedures which are considered to be satisfactory. As- surances were obtained from GOAP at negotiations that the accounts and financial statements would be submitted to the Bank within nine months after the end of each fiscal year.

4.40 Auditing procedures for ARDC are laid down in previous Credit Agree- ments. Assurances were obtained that ARDC would require the lending banks participating in the project to maintain separate accounts for project lending and would ensure that the annual audited accounts of such banks would be submitted to the Bank within four months of the end of their fiscal year, together with a statement of project lending for such banks certified by ARDC.

Environmental Effects of the Project

4.41 The malaria situation in India has worsened in recent years. Past construction of the distribution system in the NSP, without adequate provision for drainage, has led to the creation of swampy areas and the contamination of village wells. Construction of the proposed drainage facilities under the Bank project would help alleviate these conditions, as well as lower groundwater tables and reduce mosquitoe breeding habitats throughout the area. The on-farm development work in the four command areas would result in better water control and would reduce the risk of polluting village water supplies. The project extension service would advise farmers on the judicious selection of pesticides to avoid environmental damage.

4.42 Assurances were obtained from GOAP that any borrow pits excavated in the course of construction under the project, will, as soon as is practicable, be drained to remove or minimize any chances of mosquitoes breeding in stagnant water in such pits. Also, that GOI and GOAP will take all such other measures as they consider necessary to minimize all hazards of malaria and other water-related diseases in the project area.

V. ORGANIZATION AND MANAGEMENT

Irrigation Department

5.01 Jurisdiction for the NS? rests with the Irrigation Department of the State of Andhra Pradesh, under the direction of the Minister of Irrigation. - 23 -

The Chief Engineer, NSP, has overall responsibility for design and construction, under the general direction of the Secretary for Irrigation and Power. Day-to-day responsibility for project execution rests with the Superintending Engineers in the project areas. The present NSP organization for design and construction consists of one design and one mechanical Circle located at Hill Colony (Nagarjunasagar Dam), two construction Circles on the Right Bank located at Karempudi and Pellur, and two construction Circles located on the Left Bank at Tekulapally and Jaggayyapeta. Two additional Circles are being established in the lower extremities of the command area, one at Kurichedu on the Right Bank and one at Madhira on the Left Bank. Each Circle is comprised of three to five divisions, each headed by an Executive Engineer, and each division is staffed by three to six Assistant Engineers and 10 to 27 Junior Engineers (Annex 9, Chart 15673). The organization of the NSP office is sound, with competent and experienced staff in key positions.

5.02 Surveys, designs, specifications and tender documents for the Bank project would be prepared by the NSP engineering staff for all sections of the main canal, structures, and Irrigation Block distribution systems in accordance with schedules established by the Chief Engineer. Construction inspection would be provided by representatives of the Chief Engineer in the respective construction Circles.

5.03 Operation and maintenance of the entire NSP irrigation and drainage system would be controlled by three Circles under the direction of the Chief Engineer (Annex 9, Chart 15672). One Circle would be responsible for operation of the dam, with separate divisions for regulation of water flows, maintenance of equipment, and maintenance of services, including the camp. Operation and maintenance of the Right Canal irrigation and drainage network would be performed by one Circle located at Narasaraopet, with five divisions (one yet to be established) in various parts of the Right Bank command area. Operation and maintenance of the Left Canal network would be the responsibility of a Circle located at Khammam, with water regulation and maintenance duties delegated to four divisions (two yet to be established) in specific areas throughout the command area. Main- tenance of the existing canal network is satisfactory. Significant improvements in water scheduling can be expected following the establishment of a modern communications network and the construction of some additional control structures.

5.04 Water delivery requirements would be determined at the divisional level and correlated with the Superintending Engineers for the Right and Left Bank command areas. The allocation of available water supplies to the separate command areas would be the responsibility of the Chief Engineer. For more effective water scheduling to the service outlets, close coordination between the extension service and project 0 & M staff would be required. Operation and maintenance of the dam, main canals, distribution systems and project drainage facilities to the pipe (or chak) level would be the responsibility of the Irrigation Department through the project 0 & M organization. Water distribution and maintenance of on-farm works below the pipe turnouts would be the responsibility of the Pipe Committee under the instruction and - 24 -

supervision of the Irrigation Officers. Operation and maintenance equipment would be provided to ensure effective and timely operation of the project and to enable project 0 & M personnel to maintain project facilities properly and make emergency repairs quickly.

5.05 An independent engineering Circle would be set up under the Chief Engineer to conduct the NSP irrigation system study and prepare modernization plans and estimates.

5.06 Assurances were obtained from GOAP that an adequate annual 0 & M budget would be provided for the proper maintenance of NSP irrigation and drainage infrastructure works and for operational requirements and that adequate measures would be taken to operate and maintain all irrigation and drainage works in the pipe commands.

Road Department

5.07 The GOAP has appointed the Roads and Buildings Division of the Public Works Department (R & B) to act as sole executing agency for the construction and maintenance of the project roads. The CAD Department and R & B jointly selected the roads to be included in the project. Funds for the program would be allocated from the CAD budget.

5.08 Strengthening of the ex-istingR & B organization would be necessary to deal with the program effectively. Recruitment of additional staff would pose no problems. The R & B Circle to be set up under the project would have its headquarters within the command area and would comprise up to six divisions, each of which would control three to four sub-divisions. The Circle would be headed by a Superintending Engineer, reporting to the Chief Engineer, R & B, who in turn would be responsible to the Secretary, CAD, for the execution of the road program. The Chief Engineer would have a small coordinating unit for the project within his headquarters which would be supervised by an Assistant Engineer. Each division would be run by an Executive Engineer and each sub-division by an Assistant Engineer. All engineers would be professionally qualified. The Circle would be responsible for all surveys, designs, preparation and supervision of contracts and of quality control. For assistance with pavement design and quality control, the Circle would have direct access to the existing materials laboratory at Guntur, which is capable of undertaking the required materials selection and works acceptability testing.

5.09 An assurance was obtained from GOAP that it shall maintain and repair, or cause to be maintained and repaired, all roads included in the project, in accordance with sound engineering practices.

Command Area Authority

5.10 Following the guidelines of GOI, the GOAP established a CAD Depart- ment in 1974 to speed up CAD in the State. The department is headed by a Secretary reporting to the Chief Minister. During the last two years, the department has carried out' a successful CAD pilot operation in the Pochampad - 25 -

area, where implementation methods were tested and technical staff trained. At present, the Secretary is also Commissioner of CAD in the areas scheduled for on-farm development. In each of the four command areas, the Administrator is the chief executive for planning and implementation of the program. He has operational control of the agricultural and extension activities, the engineering unit (survey, design and supervision of construction), and the credit unit assisting in the flow of short- and long-term credit. The Admin- istrator is a Generalist Officer. All units operating at the project level would be headed by technical officers and controlled at the State government level by the Director of Agriculture, the Registrar of Cooperative Societies and the Superintending Engineer (Land Development), the latter being in the Office of the Secretary, CAD (Annex 10, Chart 15670).

5.11 The organization would be suitable for executing the project works, and would cater adequately to operational needs. The CAD management would set cropping patterns, and control and enforce warabundi and input services (Annex 10).

5.12 On-farm development works in the designated project areas would be compulsory and the full cost of works would be recovered from the beneficiaries.

5.13 Financing of CAD. Financing would be available to all farmers by CBs or LDBs (LMBs). Secured mortgages for eligible farmers would not exceed 12 years at not less than 11% interest with a grace period of approximately two years. Some 20% of the farmers are estimated to be ineligible for ordinary commercial loans because of defective land titles or because of overdues on debts to local authorities, cooperatives or commercial financing institutions. These farmers would get 12 year loans at 14% with the same grace period. Secured LDB and CB loans would be refinanced at a rate of 75% and 80%, respectively, by the ARDC. Unsecured loans for ineligible farmers would be fully refinanced by a revolving fund administered by ARDC and financed through a 50% contribution from GOI, and 25% each from the ARDC and GOAP. The unsecured loans would be quaranteed by GOAP.

Agricultural Extension Services

5.14 To ensure that project benefits would be quickly realized by the farmers, the extension service would be reorganized to operate on the lines successfully followed in the States of Rajasthan, Madhya Pradesh and West Bengal. In the two Nagarjunasagar Project areas, the service would be headed by a Joint Director of Agriculture (JDA); in the other two, by a Deputy Director (DDA). Extension Districts would be headed by DDAs who would control Extension Circles run by Assistant Directors of Agriculture (ADA). Village Extension Workers (VEWs) would be in regular touch with "contact farmers" and, through them, with all other farmers. The VEWs would be supervised by Assistant Agricultural Officers (AAOs). There would be a strict, predetermined fortnightly visiting schedule by VEWs to farmers groups. The objectives of the visit always would be simple, concentrating on two or three key issues, and would be changed between visits. Routine supervision - 26 - would come from AAOs. Technical backing would come from Subject Matter Specialists (SMSs) who would spend the greater part of their time in contact with VEWs and farmers. Strong emphasis would be placed on training at all levels and on maintaining close, continuing contacts with the research organizations. As the extension staff at all levels would be expected to spend far more time in the field than at present and would also be stationed in more rural and remote places thlan is the practice now, they would be given a project allowance over their base salaries (Annex 11).

Cost Recovery

5.15 NSP Irrigation Infrastructure. The total sunk costs in the dam, expressed in 1976 currency values, are approximately Rs 2.0 billion. Some of the costs for the dam should, however, be allocated to power (para 4.09). As there are no firm figures on the projected power output; three-quarters of the dam costs have been tentatively allocated for the purpose of these calculations to the irrigation component. This gives an overall investment cost of about Rs 2,600 per ac (Rs 6,552 per ha) of which Rs 700 is attributable to the dam and Rs 1,900 to the irrigation and drainage infrastructure. The present annual O&M costs are about Rs 12 per ac (Rs 30 per ha). After implementation of the project they would increase to about Rs 20 per ac.

5.16 In principle, the betterment levy is the prime vehicle for recover- ing the capital costs of irrigation projects in Andhra Pradesh. Legislation enacted in 1969 enables GOAP to collect a levy of up to half the increase in land values due to the project, paid in 20 annual installments, including interest on the outstanding amount 1/. Land values in the already developed parts of NSP have increased from about Rs 500 per ac (Rs 1,260 per ha) to more than Rs 5,000 per ac. This would permit a levy on the order of Rs 2,000 to 2,500 per ac (Rs 5,00 to Rs 6,300) or Rs 230 to 290 per year inclusive of interest. At present, however, the levy is nominal: Rs 5 to 10 per ac (Rs 13 to 25 per ha) per year for irrigated dry (ID) and irrigated wet (IW) lands, respectively.

5.17 Of greater practical importance at present are the water rates that form part of the land revenue. Their level depends on the type of irrigation provided and the soil classification. They typically amount to Rs 20 and 30 per ac (Rs 50 to 75 per ha) for ID and IW lands, respectively. The land cess, a local tax, is calculated as a 37% addition to the land revenue, which brings the water charges up to about Rs 27 and Rs 41 per ac (Rs 68 to 103 per ha) for ID and IW lands, respectively.

5.18 Certain commercial crops, such as cotton and sugarcane, are assessed special taxes when irrigated. These taxes typically range from Rs 15 to Rs 25 per ac.

1/ In the law the increase is defined on a "before and after" basis. - 27 -

5.19 Over the last couple of years, Andhra Pradesh has substantially raised the water related charges (betterment levies, water rates, land cesses and commercial crop rates) and they have increased from about Rs 30 per ac in 1973 to Rs 62 per ac in 1976. A bill is now pending before the AP legislature which would substitute the betterment levy with a special tax on certain irrigated lands. This tax, which would be paid over a ten year period, would raise the total water charge to about Rs 110 per ac.

5.20 Government revenues would further increase through the sales tax on agricultural products. The sales tax which averages about 4%, would generate an additional income of about Rs 60 per ac brought under irrigation.

5.21 With the present level of taxation, GOAP would recover the full capital cost of the irrigation and drainage infrasturcture provided under the project, over 30 years at 3% interest, and the full 0 & M costs. With the proposed tax on irrigated lands, the full capital costs would be recovered over 30 years at 5% interest. An assurance was obtained that GOAP would, for 30 years, collect not less than the present level of water charges.

5.22 CAD Program. Under the present arrangements, the costs for on-farm works under the CAD Program would be financed from institutional credit while the costs for planning and supervision would be borne by GOI and GOAP. In a few years, this would mean a severe strain on scarce Government resources. The farmers' annual repayment for the on-farm development loan would amount to about Rs 100 per ac (Rs 250 per ha) in nominal terms. The analysis in paragraph 6.11 and Annex 13 shows that the benefiting farmers could well afford to pay substantially higher costs for CAD. Consequently, an assurance was obtained from GOI that the participating farmers would pay a part of the engineering overhead, presently borne by GOI and GOAP, through a 15% surcharge on the contract cost for civil works.

5.23 At full development after completion of CAD over the whole area, the total water charges would amount to Rs 210 per ac (Rs 519 per ha) or about 13% of net incremental farm incomes. The proposed charges would give the following benefit and rent recovery indices:

Pochampad NSP Infrastructure Tungabhadra CAD With CAD Without CAD

Benefit Recovery Index 8% 13% 23%

Rent Recovery Index 14% 22% 46% - 28 -

VI. PRODUCTION, MARKETING, PRICES AND FARM INCOMES

Production

6.01 Agricultural production increases accrue from extending the irrigation network in the Nagarjunasagar Project area and from command area development in all four sub-areas. The CAD would increase water use efficiency below the pipe outlet from about 45% to 65%, enabling the whole command to be cropped according to the design cropping pattern and enabling farmers effectively to control water in the field, thereby achieving higher yields (Annex 12). The strengthened and reorganized extension services would assist in rapidly achieving this objective.

6.02 Production increases after ultimate development are detailed in Annex 12. They show the expected yield increases and the switch that will be possible in Nagarjunasagar from low to high unit value crops due to irrigation. Data pertaining to the major crops over the total project area are summarized below:

Expected Annual Production Changes at Full Development ('000 tons)

Due to Irrigation & CAD Due to CAD only NSP Left Bank NSP Right Bank Pochampad Tungabhadra

W/ W /2 W / W /2 W /1 W /2 W L W /2

Rice 660 643 360 616 119 176 65 96

Cotton - 29 46 103 - - 21 40

Groundnuts 54 164 46 119 1 2 11 20

Maize - - - - 52 122 - -

Sorghum 52 214 35 539 13 89 2 16

/1 W = without project

/2 W = with project

Market Prospects

6.03 India is short of foodgrains, oilseed and fiber crops and there would be no difficulty in marketing the increased agricultural production of the project. - 29 -

However, organizational problems in quickly purchasing the farmers' surplus production may arise due mainly to Government regulations restricting the movement of foodgrains between surplus and deficient areas, within or outside the State. The principal institutional buyer, the Food Corporation of India (FCI) does not always buy all the rice that farmers wish to sell and only rarely do they buy sorghum, groundnuts and millets. Given the present restrictions on the grain trade, it is important that FCI become a genuine and unequivocal buyer of last resort and that farmers are paid without delay.

6.04 The cotton ginning industry over the last years has been able to organize the purchase and processing of the considerable increase in production that took place as a result of irrigation. No marketing problems are expected for the long staple cotton lint to be produced under the project.

Processing and Storage

6.05 Present and projected rice processing facilities in the State are adequate to cope with expected production increases. The processing facilities for other food crops, and for cotton ginning, are also adequate and likely to grow with demand.

6.06 Warehousing space is in short supply in years of high production. The investment program for the Central Warehousing Corporation and the State Warehousing Corporation, drawn up in agreement with GOI and GOAP, must be implemented to provide additional storage facilities. At present, no organization effectively advises farmers on how to ensure the safe storage of their produce before disposal. Under the project, the technical know-how available under GOI's Save Grain Campaign would be more effectively communicated to the farmers by the extension service. Officers of the State Warehousing Corpo- ration and the Save Grain Campaign would act as SMSs to the extension service in the appropriate seasons.

Prices of Agricultural Products

6.07 Economic prices for internationally traded agricultural inputs and outputs are derived from the Bank's projected 1985 world market prices in 1976 constant prices with appropriate adjustments for transportation and grade. For most of the agricultural products relevant to this project, a decline from recent shortage-related price levels is expected. The domestic prices, which are used for the farm budget analyses, are projected to decrease less markedly than the world market prices. For most of the commodities, the result is a fairly close correspondence between the Indian and the world market price.

6.08 Many of these agricultural products are either not traded internationally or only to a limited degree. There is a high degree of substitution between internationally traded foodgrains and those that are not traded; increased production of the latter tend to decrease the imports of traded foodgrains. The domestic prices for the non-traded foodgrains (for example, millets) reflect the substitution effect, relative production costs and consumer preferences. Consequently, it has been assumed that the ratio - 30 -

between the market price and the economic price for rice also applies to non-traded goods. The prices of all crops as well as farm inputs are given in Annex 14, Appendix 1.

Farm Incomes and Repayment Capacity

6.09 Income to farm households includes the net value of crops produced on the farm, and off-farm earnings. At present, an average sized family needs approximately 2.0 ha of unirrigated land or 1.0 ha of irrigated land to fulfill its basic subsistence needs. Consequently, most small farmers must have substantial off-farm earnings. Few data on off-farm income exist and, thus, only the value of crop production has been included as income in this analysis.

6.10 Present and projected future farm budgets in NSP have been analyzed on the basis of four representative farm sizes 1.0 ha, 3.0 ha, 5.0 ha and 10.0. (Farm size distributions for the project areas are presented in Annex 13, Table 9.) The net income from farming, including the imputed value of produce consumed on the farm (in 1976 terms) are: New Areas to be Irrigated Present Areas Under Project With on-farm No on-farm development and Farm Size (ha) Irrigated (Rs) Unirrigated (Rs) development (Rs) extension (Rs) (1) (2) (3) (4) (5)

1.0 3,000 1,300 2,700 5,700

3.0 8,200 3,800 7,900 16,200

5.0 12,700 6,000 12,500 26,200

10.0 23,400 10,900 22,800 50,700

In the derivation of farm incomes, cash payments for hired labor and inputs have been charged as production costs (Annex 13). The "present" budgets are based on the present level of water charges. The "future with project" budgets are based on the assumption that the water and commercial crop rates are kept on their present levels while the betterment levy has been replaced by the proposed special tax on irrigated lands (para 5.19). It is further assumed that the farmers would pay the full cost for on-farm development. The estimates for the 3.0 ha farm are based on a cropping pattern that reflects the average for the Nagarjunasagar command areas. A slightly higher cropping intensity is assumed for the 1.0 ha farm and slightly lower intensities for the 5.0 ha and 10.0 ha holdings. It is further assumed on the basis of presently available data that the smaller farms would be more foodgrain-oriented and the larger farms more oriented towards cash crops such as chillies, groundnuts and cotton. In the "future" farm budgets, it has been assumed that the extension services would have limited impact on the yields in those areas where the CAD Program has not been implemented. - 31 -

6.11 In approximate terms, the provision of irrigation water would double the net farm incomes and the combined effects of CAD and extension would result in a further doubling. The proposed water charges correspond to the following percentages of incremental net farm incomes:

CAD and extension Irrigation Irrigation plus CAD only (%) Farm Size (ha) Infrastructure (%) and extension (%) Pochampad, Tungabhadra

1.0 20 11 7

3.0 22 12 8

5.0 24 13 8

10.0 24 13 9

Percent of Project Rent Collected (average) 46 22 14

6.12 Thus the farmers who would be covered by the CAD Program should be in a position to pay the proposed charges. The water charges would make up a much larger proportion of the net incremental incomes for farmers who would not be included in the CAD Program. However, they would still be left with sufficient incentive to develop their land.

VII. BENEFITS AND JUSTIFICATION

General

7.01 Investments in irrigation infrastructure without CAD and extension have long gestation periods and give relatively low returns. However, such investments create the potential for subsequent CAD investments. In turn, CAD investment sets the stage for effective extension. This is because dis- semination of new farm technologies in a large measure depends on the degree of water control at the farm level. With irregular irrigation, farmers prefer traditional varieties which stand up well to intermittent irrigation supplies and imperfect drainage conditions. The introduction of improved water distribution and drainage through CAD facilitates the spread of new varieties and farming practices promoted by extension.

7.02 The major components of the proposed project -- irrigation infrastructure, on-farm development and agricultural extension services -- are, consequently, interdependent, and the benefits from any one of the components depend on whether the others are implemented. Thus, irrigation, CAD and extension have to be evaluated as a package. However, since each component of the package must be justified in its own right, the benefits and costs associated with each of the components have, to the extent possible, also been analyzed separately (see para. 7.19). - 32 -

Extension Services

7.03 Two major factors determine the benefits of extension: (i) the average yield increase for farmers who follow extension advice, and (ii) the number of farmers who adopt improved techniques. While it is difficult to forecast accurately the impact of the proposed extension program, programs of this type have recently been introduced in Bank Group-assisted projects in Madhya Pradesh and Rajasthan with remarkable success. The experience so far indicates that after two years some 20% to 30% of the farmers are "followers" and that their yields have increased some 10% to 20%. The impact of the extension program is greater in those areas that are covered by CAD. When the extension program is fully implemented by 1981, about 20% of the command areas would have been developed under the CAD Program. Because of longer exposure to the extension service, it has been assumed that about 30% of the farmers within the CAD area would be followers with yield increases of some 20% to 30%. No production increases outside the CAD area have been assumed. On the average for the whole command area, this would increase the value of production by Rs 40 to Rs 60 per ha. The annual cost for the extension services is about Rs 8 per ha. Consequently, the benefit cost ratio for the extension program is highly favorable.

Command Area Development

7.04 On-farm development would result in higher yields and increased irrigation efficiencies below the pipe outlet. The higher yields are directly reflected in increased incomes for the farmers. The higher irrigation efficiencies would lead to substantial external benefits, the accrual of which depends on water allocation decisions.

7.05 Economic evaluation of CAD is based on the following assumptions:

(a) Due to the present low level of water management resulting in insufficient irrigation of the crops, it is estimated that the average yield would increase some 50% due to CAD and extension services.

(b) The CAD Program would increase farm irrigation efficiencies from about 45% to 65% for ID lands. Net irrigation requirements for ID crops vary from about 100 mm for some kharif zrops to about 800 mm for some rabi crops. For the NSP design cropping patterns, the average would be about 370 mm. The CAD Program would thus result in annual water savings of about 2,500 m3 per ha.

(c) The water saved would be used to increase the irrigation intensity within the command area, each cubic meter resulting in a production increase on the order of Rs 0.2 to 0.3 (Annex 14). The above assumptions are based on experience from similar projects. The proposed monitoring studies would be designed to ascertain to what extent these benefits materialize.

7.06 Given the above assumptions, the economic rate of return of the CAD and extension programs, treated as a package, is about 45%.

Nagarjunasagar Irrigation Infrastructure

7.07 Project Concept. The NSP was initially designed to provide supplementary irrigation only during the kharif season. The project has an extremely long gestation period and now, 20 years after the start of construction, only about 1 M ac out of a potential 2.15 M ac have been brought under irrigation. Due to the slow implementation and to low water utilization upstream in the Krishna Basin, surplus water has been available to the already commanded areas, much of which has been utilized to grow rice in the rabi seasons. This has resulted in overall cropping intensities that are substantially higher than their design values.

7.08 Water in the Krishna River is gradually being utilized and the water available to NSP will ultimately come down to the 264 TMC awarded by the Krishna Water Tribunal. However, for the next two decades, it is estimated that some 180 to 200 TMC would be available to each of the main canals. Even with the excess water, the extension of the command areas would require a decrease of the water supply to the already developed areas (Annex 5).

7.09 The NSP plans were based on two objectives: to increase agricultural production, and to spread the benefits of irrigation to as many farmers as possible. An expansion of the two command areas would result in higher investment and 0 & M costs and also in increased losses in the conveyance system. Consequently, there is a measure of trade-off between economic efficiency and distributional considerations.

7.10 In order to assist GOI and State authorities in reaching a correct decision about water allocation, a computer program was developed by Bank staff. For a given size of the command area and a given overall water allocation to the project, this program determines the optimum water use within the command area. It also can be used to analyze the economic impact of extending the irrigation system. The optimum size a system depends on the water quantities available at the head of the canal and estimated conveyance and field efficiencies. The analysis was based on estimated present conveyance and operational efficiencies and on projected field water requirements after full CAD. Reflecting the uncertainty of these estimates, an upper and a lower limit of field water requirements have been used. Furthermore, two different assumptions on the temporary availability of water for each canal have been tested: 180 TMC and 200 TMC.

7.11 The analysis shows that total agricultural production increases with the command area. However, the net benefits from additional areas brought under irrigation become smaller and smaller (see Annex 14, Figures 1 and 2). The results of the analysis indicate that: - 34 -

(a) at an allocation of 180 TMC, and using the more conservative estimates of field water requirements (Bank Group values), the economically optimum size of the Left Bank command corresponds approximately to the GOAP project plan;

(b) at an allocation of 18'DTMC, and using again the more conservative estimates, tnle economically optimum size of the Right Bank command area is about 1.0 M ac instead of the proposed 1.17 M ac, and

(c) at an allocation of 200 TMC, and again using the more conservative estimates, the optimum size corresponds to the proposed size for the Right Bank area. The same holds good for the less conservative field water requirements (GOI values) and an allocation of 180 TMC.

7.12 Given GOI and GOAP development objectives, however, social considerations necessarily play a part in water allocation decisions. To evaluate the impact of such considerations on project design, income distributional weights were introduced in the objective function of the computer program. Three types of income effects were identified and quantified: changes in farm incomes; changes in the incomes of agricultural laborers, and indirect employment effects in tne command areas. The income distributional weights were chosen in such a way that a 10% income increase has the same social value for all groups. (Thleseweights are broadly in line with studies carried out by the Indian Planning Commission.)

7.13 Since the farmers in the already developed parts of the command areas have fairly high incomes, reductions are given lower weight than increases for the farmers in the new areas. The social costs of cutting down the water allocation in the old areas are thus lower than the social benefits of providing irrigation to new areas. Consequently using both economic and social criteria, a water allocation of 180 TMC and the more conservative estimates of field irrigation requirements, the optimum size of the Right Bank command area would be larger than what has been proposed by GOAP. Thus, when both efficiency and income distributional objectives are taken into account, GOAP's proposal as to the size of the command areas is justified.

7.14 Nagarjunasagar Investment Program. So far about US$500 million 1/ have been invested in NSP. The proposed project would complete the road and irrigation infrastructure, set up an agricutlural extension program, and initiate a CAD program, which ultimately would cover the whole command area. The economic rate of return on all previous and planned investments in NSP is estimated at 15%.

1/ 1976 currency value. - 35 -

7.15 Due to the sunk costs in the dam, the slow implementation of the canal infrastructure and the lack of CAD in the already developed areas, the economic returns from previous investments have been low. However, the base for high yielding CAD investments has been created and the economic rate of return for planned investments (canal extensions, drainage, road and CAD included in the proposed project and the future completion of the CAD program) would be 20% to 25%.

7.16 Left and Right Bank Canal Extensions. Economic evaluation of most irrigation projects does not require costing of water. However, for the parts to be financed, water cannot be assumed to be a free good. A major element in the economic analysis is, therefore, an estimate of the opportunity cost of water. If water would be freely available and the new areas could be irrigated without any reduction in cropping intensities and yields in other areas, the economic rate of return for the Left Bank extension would be about 25%. However, the need to reduce water allocations to already irrigated areas of the Left Bank reduces the rate of return to between 10% and 13%. (The opportunity cost of water and thus the rate of return is highly sensitive to irrigation efficiencies. The range quoted for the rate of return reflects this uncertainty.) The economic rate of return for the Right Bank extension is 9% to 12%.

7.17 Social Rates of Return. The GOAP's plans for NSP are partly based on distributional objectives and the project would have a substantial impact on the income distribution in the area. Because of this and in order to give an extra dimension to the economic analysis, income distribution weights have been systematically introduced in the analysis (based on the assumptions discussed in para. 7.12). The resulting social rates of return are 12% to 15% and 11% to 14% for the Left and Right Bank Canals, respectively.

7.18 Conclusion. The proposed scope of the project reflects GOAP's intention to maximize agricultural production from the water allocated and the objective to distribute production and employment benefits as widely as possible. The canal extensions give relatively low returns but create a potential for high yielding CAD investments and for effective agricultural extension. When completed, the project will have tripled agricultural production and give substantial direct and indirect employment effects. - 36 -

Summary of Economic Rates of Return

7.19 The economic rates of return for the components of the proposed project are:

CAD Program Rates of Return

-- Without improved extension services 28%

-- With improved extension services 45%

NSP Irrigation Infrastructure

-- The whole of NSP, with CAD and extension services, including sunk costs 15%

-- LBC, infrastructure, CAD and extension in new areas 10-13%

-- LBC, with CAD and agricultural extension 20-25% in the whole command area

-- RBC, infrastructure, CAD and 9-12% extension in new areas

-- RBC, with CAD and agricultural extension 20-25% in the whole command area

Risk and Uncertainty

7.20 Command Area Development. Given the estimated high rate of return and the experience gained from the pilot operation in the Pochampad area, the investment risk associated with the CAD component is limited.

7.21 NSP Irrigation Infrastructure. The risk associated with the NSP canal extensions stems from the uncertainty regarding:

(i) Future prices and yields. A combination of a 10% increase in investment costs and a 25% reduction of the projected benefits would decrease the estimated rates of return approximately 2.5 percentage points. Consequently, the estimated rates of return are not very sensitive to changes in assumed future prices and yields. - 37 -

(ii) Future water supply. If the upstream development in the Krishna Basin would be more rapid than projected (para. 4.08), there would be a substantial scope for reducing water use in NSP, through a shift from IW to ID crops, without reducing the economic benefits from the project (Annex 13, para 4). Furthermore, the water allocation to NSP is based on flows that would be exceeded three years out of four. By utilizing a part of the substantial live storage in the Srisailam and Nagarj unasagar dams to store water from one year to another, GOAP would be able to increase the effective supply to NSP. Given the assurances in paragraph 4.09, it is unlikely that a more rapid upstream development of NSP would have any substantial effect on the projected economic benefits.

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS

8.01 Agreement on the following points has been reached with GOI:

(a) the State of Andhra Pradesh would be free to use the excess water flowing in the Krishna River, without however, acquiring any permanent rights to this flow (para. 4.09);

(b) the proceeds of the loan, except disbursements for on-farm development and for the project preparation and evaluation group would be made available to GOAP (para. 4.33);

(c) the GOI would cause GOAP to make arrangements in its annual development plans for the provision of funds required for the implementation of the project in accordance with the implementation schedule (para. 4.33); and

(d) the participating farmers would pay a part of the engineering overhead, presently borne by GOI and GOAP, through a 15% surcharge on the contract cost for CAD civil works (para. 5.22).

8.02 Agreements have been reached with GOAP that:

(a) it would make available from the flow of the Krishna River at the dam site additional water over and above the 264 TMC allocated to NSP as may be required to irrigate according to the cropping patterns agreed between GOAP and the Bank. The additional water would be required until such time as overall water efficiencies improve sufficiently to make it unnecessary (para. 4.09); - 38 -

(b) the reservoir operation program for power production at Nagarjunasagar Dam and the upstream Srisailam Dam (presently under construction) would be fully coordinated with the irrigation needs of NSP (para. 4.09);

(c) accounts and financial statements of the PWD and CAD departments would be submitted to the Bank within nine months after the end of each fiscal year (para. 4.39);

(d) any borrow pits excavat:ed in the course of construction under the project will, as soon as is practible, be drained to remove or minimize any chances of mosquitoes breeding in stagnant water in such pits (para. 4.42);

(e) an annual operation and maintenance budget would be provided for adequate maintenance of NSP irrigation and drainage infrastructure works and for operational requirements and that adequate,measures would be taken to operate and maintain all irrigation and drainage works in the pipe commands (para. 5.06);

(f) that it shall maintain and repair, or cause to be maintained and repaired, all roads included in the project, in accordance with sound engineering practices (para. 5.09); and

(g) it would maintain, for a period of 30 years, at least the present level of water charges (para. 5.21);

8.03 Assurances were obtained from GOI and GOAP that:

each would take the measures as it considers necessary to minimize all hazards of malaria and other water-related diseases in the project area (para. 4.42).

8.04 An agreement has been obtained from ARDC that:

it would require the lending banks participating in the project to maintain separate accounts for project lending and ensure that the annual audited accounts for such banks would be submitted to the Bank within four months from the end of its fiscal year, together with a statement of project lending for such banks certified by ARDC (para. 4.40).

8.05 Conditions of disbursement for the CAD component would be that:

(a) evidence satisfactory to the Bank has been furnished showing that GOAP can at its option, carry out on-farm development works as it considers necessary in the project area and recover the cost of such works from the farmers concerned (para. 4.34) - 39 -

(b) a Subsidiary Loan Agreement satisfactory to the Bank has been executed between GOI and ARDC (para. 4.34); and

8.06 With the above agreements, the proposed project is suitable for a loan of US$145 million under standard Third Window terms. The Borrower would be India.

April 20, 1976 ANNEX 1 Table 1 INDIA

ANDHRA PRADESH IRRIGATION AND CAD CCMPOSITE PROJECT

Climatic Data, Project Areas

Jan Feb Mar Apr Ma Jun Jul A Sep Oct Nov Doc Total

Nagarjunasagar Project Area Average Rainfall (mm) Khammam(1941-1960) 1 7 10 25 27 126 260 185 165 107 34 4 9"'1 Ainaravati (1967-1974) 2 3 14 13 74 lo 193 167 113 97 48 14 838 Rentachintala (1931-1960) 1 10 6 20 41 86 116 115 146 124 41 13 719 Average of 3 Stations 1 -7 IO - 7 101 190 I m3 M -:109

Average Monthly Pan Evaporation (mm) Khammam(Estimated) 191 220 325 324 341 266 199 175 165 168 156 168 2,698 Amaravati (observed) 133 169 236 269 346 289 219 191 155 151 124 116 2,398 Rentachintala(Estimated) 188 218 320 351 357 281 233 279 187 173 153 155 2 895 Average of 3 Stations 1/ 171 - 0 2 3 2m F 2 D 27 1 93'4 Evaporationdata from Report 146 160 190 280 285 355 285 210 180 170 165 160 160 2,600

Hyderabad'-/ Number of rainy days G 1 1 2 3 7 11 10 10 5 2 0 52 Relative humidity (%) 0830 hours 79 64 54 51 50 71 83 82 82 73 68 71 69 1730 hours 36 35 30 31 33 54 69 70 71 58 48 42 Wind velocity(km/hr) 8 9 10 11 12 24 22 18 13 9 8 7 13 Air temperatures (°C) Mean maximum 28.6 31.2 34.8 36.9 38.7 34.1 29.8 29.5 29.7 30.3 28.7 27.8 Mean minimum 14.6 16.7 20.0 23.7 26.2 24.1 22.3 22.1 21.6 19.8 16.0 13.4 Extrememaximum 35.0 37.2 42.2 43.3 44.4 43.9 37.2 36.1 36.1 36.7 33.9 33.3 Extrememinimum 10 7 8.9 13.2 16.1 19.4 17.8 19.4 19.4 17.8 12.2 7.8 7.2

I/ Interpolated from isopleth imps of recorded Class A Pan Evaporation in India, Scientific Report 146 2/ Observation period 1931 to 1960. Hyderabad is centrally located between the project CAD area. Data shown are generally representativeof the four areas.

o- ANNEX 2 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

NSP Irrigation and Drainage Works

Engineering Design Criteria and Procedures

1. The canal and structure designs for the Nagarjunasagar Project follow established practices and irrigation designs which have been used in India for many years. Canal alignments are located in the field and earth trial pits (test pits) are excavated at intervals of 110 ft. Detailed designs are prepared for the canals and all major structures prior to tendering for construction. Designs for the canal prism are sound and canal embankments are wide enough to contain a 4:1 seepage line from the canal water surface to natural ground. Compacted earth cutoffs under the embankments are provided where required. The depth and size of the cutoffs are related to the height of fill. Lining is provided in rock reaches. Drains are provided to relieve hydrostatic pressure from groundwater on the back side of the lining. Designs of structures are principally for masonry construction and appear to be more than ample. Reinforced concrete is used only for the span portions of structures. Cross drainage waterways are designed for the 100-year frequency flood and appear ample for the natural drainage channels that exist at the sites. Flood flows are computed by criteria established by the Central Indian Government. Computed stream scour depths are used to set foundation depths. Hydraulic computations for the structure designs are based on universally accepted principles. Water flow curves are developed from hydraulic laboratory model testing and checked by current meters in the prototype. Off-take structures are designed to deliver the required flow to a branch canal at one half design flow depth in the main canal, which is approximately 0.7 of the depth for the design flow. Regulators were origin- ally spaced at about 20-mi intervals, but design revisions have resulted in roughly a 10-mi spacing. The main canal would provide adequate head for water deliveries as long as the canal flow is about half capacity or greater. At smaller flows there may be a deficiency in ability to deliver flow to take-offs located just down stream from a regulator. A thorough hydraulic design review of the entire distribution system is being made to correct design delivery deficiencies.

System Improvements

2. Assumptions on conveyance efficiencies and operational losses were the key criteria used to size the project. The criteria used by GOI are considered by the Bank to be too optimistic, since they assume a high level

-41 ANNEX 2 Page 2 of water use discipline and system losses commensurate with a design which provides complete operational flexibility. High conveyance and operational efficiencies, however, can be obtained only with projects planned to respond quickly to changing weather conditions and resulting fluctuations in water demand. The NSP system has been planned and designed without this flexibility. To achieve the required flexibility it would require several additional strategically located regulatory storage reser- voirs, additional flow regulators in canals and distributors to provide necessary head requirements for water deliveries during minimal canal flow periods, the use of automatic control gates for major distributors, a telecommunication system for efficient operation of the irrigation system, and, to reduce seepage losses, lining of canals in reaches where seepage losses are unacceptably high. Some minor modifications would be made in the design of the irrigation system under the Bank project to improve operational control. The modifications would include the provision of additional regulators at five locations in the Right and Left Main Canals and design changes for drop structures on the branch canals and major and minor distributors to control flow adequately and assure water deliveries from all canal offtakes. Major improvements in the proposed systems however, must be postponed until the future modernization project is implemented. Following the implementation of the modernization project, conveyance and operational efficiencies are expected to reduce water quantities required for the design cropping pattern by 15% to 20%.

Design Completion Schedule

3. Surveys and test pit work have been completed or are underway for the 29 mi of main canal to be included in the Bank project on the Right Bank. Canal designs and estimates for all reaches of the canal are also underway and are scheduled for completion in 1976. The preparation of canal specifications for all reaches would be completed in 1977. Surveys and locations work for the 59 main canal structures to be included in the Bank project are either completed or are underway. Designs and estimates and the preparation of specifications for bridges, regulators, and off- take sluices are underway, and this work would be completed for all remaining structures by early 1978. Engineering surveys, designs and estimates for the branch canals and irrigation distribution systems in Irrigation Blocks 15 through 18 would be completed by early 1977 and for Blocks 19 through 22 by early 1978. The work of preparing designs and estimates for the distribution systems generally would keep pace with engineering work for associated reaches of the main canal.

4. As of June 1976, the first 103 mi of the Left Main Canal had been completed and construction of the remaining 8 mi was underway. Also, work had been initiated on the 21st Main Branch Canal (an extension of the

42 ANNEX 2 Page 3

Left Main Canal) from mi 0 to mi 10/6. The Bank project would include completion of the 21st Main Branch Canal from mi 10/6 to its terminus at mi 76 and construction of the irrigation and drainage systems in Irrigation Blocks 20 and 21/1 to 21/11. Surveys, designs and estimates of the 21st Main Branch Canal have been completed to mile 47/3 (about 37 mi) and would be initiated for the remaining 29 mi in late 1976. Surveys for all canal structures to mile 33 have been completed and designs and estimates for most of these structures are completed or are underway. Surveys of remaining structures would be initiated in late 1976 and designs and estimates would be completed by 1978. Surveys of the irrigation distribution systems in Blocks 20 and 21 have been completed and designs and estimates for the system in Block 20 have been completed. Designs and estimates for Blocks 21/1 to 21/5 and part of Block 21/6 are scheduled for completion by January 1977 and for the remainder of Block 21/6 and.Blocks 21/7 to 21/11 by January 1978. Drainage requirements would be identified and the drainage system provided during project development as requirements become known.

Construction Methods

5. The construction of irrigation projects in India is principally performed by manual labor. On-going construction practices in the project area make use of mechanical excavating, hauling and compacting equipment to construct high canal embankments for major aqueducts at valley crossings and for canal excavation in rock for deep cuts in excess of about 10 m. Labor-intensive construction methods for general construction would be used for all project construction. Sheepsfoot and road rollers would be used for canal embankment compaction and for the compaction of roads in accordance with on-going practices. (The road rollers are not as effective as sheepsfoot rollers for canal embankment compaction, since they compact only the top few inches of each lift and produce laminated embankments which are conducive to leakage). The disposal of excavation wastes in cut areas would be done in an orderly manner and borrow areas for embankment would be dressed to improve the appearance of canal construction. Canal embankments below design water surface would be wetted prior to compaction. Canal structures, except for span portions, would be constructed of masonry and the stones would be hand quarried from nearby quartzite deposits, which underlie most of the project area. The extensive use of masonry for structures would provide economical construction. Coarse aggregate for reinforced concrete would be produced by manual labor from excavated rock and from spall resulting from shaping blocks. Safety precautions would be followed on construction sites to reduce the present high accident and injury rates for construction work.

Irrigation and Drainage Works to be Provided Under the Project

6. The irrigation and drainage works to be provided under the project are listed in Table 1.

April 1976

.43 ANNEX 2 Table I1 Page 1

INDIA

ANDHRA PRADESHIRRIGATION AND CADCOMPOSITE PROJECT

PROJECT INFRASTRUCTURALWORKS

NSP Irrigation and Drainage Works

Right Bank Irrigation Syst.em

Right Canal Earthwork (mi) 30 (Mile 86/0 to 88/0, 94/0 to 99/6, 100/3 to 105/6, 106/5 to 107/7, 108/3 to 121/7, & 124/0 to 126/0)

Right Canal Structures to Mile 110/0 (No.) 26 Bridges (Mile 87/3, 90/5,94/0, 95/0,98/0, 104/1 105/7, 107/6) (8) Regulators (Mile 48/o, 101/7, 110/0) (3) Off-Take Sluices (15)

Right Canal Structures (Mile 110 to 126) (No) 33 Bridges (8) Undertunnels (12) Off-Takes (10) Superpassage (Mile 124) (1) Regulators ( Mile 118/0 and 126) (2)

PamidipaduBranch Cmnal ( 750 cfs) (mi) 7

Darsi Branch Canal (2,930 cfs) (mi) 17

Ongole Branch Cmnal (1780 cfs) (mi) 33

Major and Minor C rals in Blocs 15 to 22(mi) 900 0 to 10 cfs capacity (450 mi) 10 to 50 cfs " (260 mi) 50 to 100 cfs ( 50 mi) 100 to 500 cfs " (140 mi)

Left Bank Irrigation System

Left Main Branch Canal Earthwork (mile 10/6 to 76) (mi) 65

Left Main Branch Canal Structures (No) 140 Aqueducts (8) Under Tunnels (52) Siphons (3) Superpassages (3) Bridges (28) Regulators (M 8/6,19/4,43/5and 76/o) (4) Off-Takes and Sluices (Turnouts) (42)

Left Canal Structures 2 Regulators (M 11/0 & M 34/0) -44- ANNEX 2 Table 1 Page 2

Bonakal Branch Canal (860 cfs) (mi) 17

Madhira Br,anchCanal (1010 cfs) (mi) 15

Nuzividu& MylavaramBranch Canal (1440 cfs) (mi) 34

Major & Minor Canals in Blocks 20 & 21/1 to 21/11 (mi) 620 0 to 10 cfs capacity (125mi) 10 to 50 cfs it (210mi) 50 to 100 cfs " (120 mi) 100 to 500 cis " (165 mi)

Drainage System (mi)

Right Bank - Blocks 15 to 22 Natural Drains Improved 650+ Intermediate Drains (from chak to Natural Drains) 1600+

Left Bank - Blocks 20 and 21/1 to 21/11 Natural Drains Improved 950± Intermediate Drains (from chak to Natural Drains) 2350+

-45 ANNEX 3 Page 1

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT

NSP Road Program

1. The project area covers some 17,000 km2 between the Left and Right Bank Canals. The area is well served with arterial road and rail routes leading to India's principal ports and cities but lacks an adequate feeder road network. The GOAP recognizes the need to improve access to farms in the command area.

T. PRESENT POSITION

Existing Road Network

2. For the most part, the terrain in the command area is flat with slopes between 1% to 3%; some areas are slightly undulating, particularly in Blocks R13-20. Soils vary from silty grey/black clays, exhibiting typical black cotton soil swelling and shrinking characteristics, to shallow red sandy loams, overlaying rock or murrum 1/; the black cotton soil, which is said to cover about one-third of the area, tends to occupy the lower lands but pockets of it are found everywhere. Rock out-crops are also widespread throughout the area and are sometimes of considerable size. Thus, there is an ample supply of rock for road stone and masonry work throughout the area; murrum is also readily available within reasonable haulage distances, for sub-base and shoulder construction, though this material is variable in quality.

3. The barrage at Vijayawada carries National Highway (NH) 5 across the Krishna River at the eastern end of the project area. This highway links Madras (some 400 km to the south) with Calcutta (about 1,200 km to the northeast) and passes through Blocks R22, Rul and R10 on the Right Bank and Block L21 on the Left Bank. National Highway 9 runs in a northwesterly direction from Vijayawada, through Blocks L21, L16, L14 and L13 on the Left Bank to Hyderabad (about 250 km distant) and thence to Bombay (a further distance of some 650 km). Hyderabad is also situated on NH7 which links Bangalore (about

1/ The term "murrum" is used locally to describe decomposed laterite or other firm gravel soils suitable for road construction purposes.

46 ANNEX 3 Page 2

500 km to the south) with Delhi (almost 1,400 km to the north). Main line railways follow the same general alignments through the project area as NH5 and NH9.

4. National highways within the project area have two-lane black top pavements, wide shoulders, are generally in good condition and are being steadily upgraded by increasing the pavement thickness and improving the alignment. Over 100 km of NH9 to Hyderabad has only a 3.8 m single lane black top pavement but formation and structures are generally constructed to full two-lane widths and eventually this section will be upgraded.

5. The NSP area is also served by a network of State Highways (SH), Major District Roads (MDR) and Other District Roads (ODR). Most of the SHs have 3.8 m single lane, black top pavements on formations of at least 7m width; some sections have been widened to two lanes. The MDRs are built to much the same standard but may have only waterbound macadam (WBM) pavements, while ODRs may be of earth or WBM construction. For the most part, SH and MDR alignments are satisfactory. However, due to lack of maintenance and inadequate drainage, considerable deterioration has taken place in many sections. The two factors considered to be the root cause of most of the failures observed are high shoulders and undrained road-side borrow pits, both of which prevent the speedy dispersal of surface water. The extent of the existing R & B network in the NSP area is approximately:

Left Bank Right Bank

Blocks LI to L21/6 534 km Blocks RI to 21 809 km Blocks L21/7 to 21/11 244 km Block R22 112 km

Total 778 km Total 921 km

6. Many of the Zilla Parishad (ZP) and Samithi roads are little more than dry weather tracks and alignments are often poor; in some cases earthworks have been started but never completed. Erosion over the years has reduced road surface levels to below the surrounding ground level in many sections and drainage is generally inadequate; every village constitutes a major bottleneck as by-passes have not been provided and the streets are invariably narrow and tortuous. Due to an absence of funds, almost no maintenance has been carried out on most of these roads for many years. In constrast, it should be noted that a few sections of WBM road (said to have been built by ZP more than ten years ago), were found to be in excellent condition and others in good condition. The Irrigation Department working on the NSP has also been engaged on construction of command area roads, many of which follow canal banks which are generally too narrow for road embankments. Standards of engineering and construction have generally been inadequate. No proper maintenance has been carried out. Apart from the completion of on-going contracts, this program is being discontinued.

47 ANNEX3 Page 3

7. The R & B have six divisions in the project area; they are only responsible for R & B roads 1/. Command area roads are the responsibility of the Irrigation Department; various ZP Councils and Samithi Councils are respectively responsible for some District roads and village roads. These councils have their own roads and buildings departments organized on a small .scale but on similar lines to their PWD counterparts 2/

8. The preparation of the original road master plan for the project was undertaken by the Irrigation Department. It was ill-prepared, overly ambitious and would have created an impossibly large maintenance commitment. After the appointment of the R & B as executing agency for command area roads, new proposals were prepared jointly by CAD and R & B which were acceptable to GOI, GOAP and to the Bank; these proposals form the basis of the NSP road project.

II. NSP ROAD PROJECT

Project Content and Cost

9. The project would provide a command area road network covering the entire NSP area, i.e. Blocks Li to L21/11 on the Left Bank and Blocks RI to R22 on the Right Bank. The layout has been designed to provide all-weather access from the State network of main roads to a point not more than 4 km distant from almost every village and field in the command area 3/. Provision is made for a five year program comprising:

(i) the rehabilitation of 630 km of existing NSP waterbound macadam roads;

(ii) improvements to 415 km of existing earth roads to waterbound macadam standard;

(iii) the construction of 530 km of new waterbound macadam roads;

1/ The National Highways are also maintained by the R & B but come under the jurisdiction of a separate section with its own Chief Engineer, staff and equipment.

2/ The State is divided into some 20 Districts, each of which is subdivided into a number of taluks. The ZP Councils are elected at Dis- trict or taluk level while Samithi Councils represent groups of about 15 villages, each of which elects one member to the Samithi Council.

3/ The GOI norm for the provision of roads in areas of rural development is that the network should extend to within a distance of 4 km of every village with a population of 1,500 or more persons. 48- ANNEX 3 Page 4

(iv) the setting up of a new Circle within the R & B to undertake the survey, detailed design and supervision of items (i) to (iii) and the operating costs of this organization throughout the project period, and

(v) the supply of road construction and ancillary equipment for the project.

Tables 1 and 2 summarize the land, commandable and localized areas for the Left and Right Banks, respectively, and also list the lengths of road to be provided in each Block. Particulars of each section of road to be included in the project are given in Table 3-A for the Left Bank and in Table 3-B for the Right Bank. (Item numbers run consecutively through these two tables).

10. The project is estimated to cost Rs 163.5 million (about US$18 million) at 1975/76 prices 1/. Project implementation would commence in 1976 and would be completed by the end of 1981. On account of the scattered nature of the work and the time required for ordering, all the road construction equipment (Annex 7, Table 2) would need to be procured in the first year of the project. On completion of construction, the equipment would be retained by R & B for use in the maintenance of roads in the project area. Detailed survey and design for each section of road is still to be undertaken but, as the R & BD estimated costs per km of road include a small allowance for physical contingencies, an additional allowance has been provided at 15% instead of the 20% which is customary for this type of work.

11. As the state of existing roads and tracks still has to be ascertained in Blocks L21/7 to L21/11 and in the lift areas of the Left Bank, and in Block R22 on the Right Bank, the estimated requirements for these Blocks have been calculated at a similar density to the rest of the project area. The final selection of roads for inclusion in the project was made jointly by CAD and R & B. The criteria extending the network to within 4 km of almost every village and field would bring more than half of the villages within 1 km of a road and about 90% of them to within 3 km, as indicated by the following table prepared by CAD:

1/ Based on the R & B Standard Schedule of Rates 1975/76, which is operative from October 1975 to September 1976.

49 ANNEX 3 Page 5

Left Bank Right Bank Distance from nearest Percent of Percent of WBM road Villages Villages

Within 1 km 59 54 1 to 2 km 16 16 2 to 3 km 16 16 3 to 4 km 8 13 over 4 km 1 1

Totals: 100 100

Implementation

12. All rehabilitation, improvements and new construction would be undertaken by local contractors selected by local competitive bidding (LCB) and supervised by an R & B Circle set up in the command area specifically for the project. As the work is widely scattered over the area, it would be split up into small contracts; each contract should, whenever possible, be capable of completion within 12 months. In accordance with local practice, R & B will provide construction equipment on hire to the contractors and will supply all cement and steel required in the works.

13. Bidding procedures and conditions of contract in current use need some revision, particularly in respect of: (i) the lack of contractor's rights in cases of delays which are caused by circumstances outside the contractor's control; (ii) the absence of any price variation clause, and (iii) the fact that the final arbitrator in cases of dispute is an appointed official of the same Government department as is a party to the contract. With regard to item (ii) above, a price variation clause should be introduced for all contracts of more than 12 months duration, including those intended for completion within this period but which may be subjected to delays through no fault of the contractor.

Standards and Methods

14. The standards to be adopted for command area roads are generally sound and acceptable, being based on Indian Roads Congress (IRC) standards and Codes of Practice. All project roads would be built on a 20m right of way with a formation width of 7.5m, carriage way width of 3.8m and pavement depth of from 15cm to 40cm according to the California Bearing Ratio (CBR) value of the soil. All road pavements would be of waterbound macadam construction and without bitumenous sealing. Alignments would be adopted for project roads which lie within, or partly within, canal rights-of-way wherever it is found to be technically possible and economically advantageous to do so, and all roads included in the program would pass around the outskirts and not through the middle of villages.

50 ANNEX 3 Page 6

15. Labor-intensive construction methods are universally employed in Andhra Pradesh and are suited to local conditions. Compaction of road formations by mechanical rollers is, however, essential and the practice of using light hand rollers or of leaving earth banks for a period of several years before constructing road pavements is unacceptable. By adopting proper compaction methods and careful planning, early paving of the roads can safely be carried out.

Organization

16. Two ministries will be concerned with the implementation of the road project. The CAD Department reporting directly to the Chief Minister will be responsible for the planning of the command area road network and the R & B under the Minister of Roads, Buildings and Transport for the survey, design, implementation and maintenance of these roads. The overall responsibility for the program would rest with the Secretary, CAD, who would control funding. The R & B would act as the executing agency for project roads while retaining full responsibility for the existing R & B network.

17. The R & B is competent to undertake the road program but would require strengthening. The R & B Circle to be set up under the project would have its headquarters within the command area and would comprise up to six divisions, each of which would control three or four sub-divisions. The Circle would be headed by a Superintending Engineer, reporting to the Chief Engineer, R & B who, in turn, will be responsible to the Secretary, CAD, for the execution of the road program. The Chief Engineer would have a small coordinating unit for the project within his headquarters which would be supervised by an Assistant Engineer. Each division would be run by an Executive Engineer and each sub-division by an Assistant Engineer. All engineers would be professionally qualified. As Andhra Pradesh has a surplus of qualified engineers, recruitment of suitable staff should pose no problems. The Circle will have the task of all survey, design, preparation and supervision of contracts and of quality control. For all necessary assistance with pavement design and quality control, the Circle would have direct access to the existing materials laboratory of Guntur, which is capable of undertaking the required materials selection and works acceptability testing. The additional test equipment required for field control would be supplied under the project.

18. In order to salvage as much as possible of the investment made in command area roads in recent years by ZP and Samithi Councils and by NSP, first priority should be given to the rehabilitation of the waterbound macadam roads selected for inclusion in the project. The priority given to the improvement of earth roads and the construction of new roads would depend on location; the objective would be to complete the network as quickly as

51 ANNEX 3 Page 7

possible in the areas already irrigated and to complete the roads in new areas about 18 months to two years after completion of the irrigation distribution system. This is the normal period which it has been found is required to establish irrigation development. Experience has shown that waterbound macadam roads built in advance of the generation of traffic needs deteriorate as a result of the vegetation encroachment.

19. A provisional time schedule has been prepared on the basis of R & B divisional work load norms and is presented in Table 4. This would require revision as detailed planning of the project proceeds but represents a satisfactory estimate of the construction schedule.

Traffic Data

20. Some work has been done by R & B on traffic forecasts for their existing network on the Left Bank, but this has been hampered by lack of basic data and little has been done in connection with command area roads. The need for statistical data will increase as the command area development progresses in order to make the preparation of future road upgrading programs possible.

Road Maintenance

21. The maintenance standard of roads in Andhra Pradesh is generally inadequate. This is due to lack of funds and the adverse effect on road foundations of raising the water table which results from the irrigation of adjacent land. These are both contributing factors in some cases but there are other causes, the most important of which are mentioned in paragraph 5. A concentrated physical effort to catch up with the backlog of maintenance of the R & B roads is required.

22. The R & B estimated cost of maintenance at 1975/76 prices is Rs 5,100/km/annum. The estimate of funds required for road maintenance in the project area through the project period and on completion is: /I Year Estimated Cost (Rs millions)

R & B Roads Project Roads Total

1st (April 1976 to March 1977) 9.0 nil 9.0 2nd 9.0 0.1 9.1 3rd 9.0 2.6 11.6 4th 9.0 4.6 13.6 5th 9.0 6.3 15.3 6th and subsequent 9.0 8.0 17.0

/1 1975/76 prices.

April 1976 52 ANNEX 3 Table 1 INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

NSP LEFT BANK - SUMMARY OF AREAS. EXISTING R & B ROADS AND PROPOSED SSP IAR1S Block Total Land Total Localized Existing Proposed N4k Roads Total No. Area Commandable Area R & B Rehabilitation Improvements New Total -rods on Area Roads of exist9g to existing Construc- ProposeWJ om4.- -- … -(Km2 )…i roads earth roads. tion tion of ------(Km)------Project

Li 76 76 44 6+ 9+ -- 9 6 L2 40 40 23 6 - - 44- 4 11 L3 40 40 24 5+ )1 5 97 L4 265 196 124 280 11+ 25+ 2 39 73 L5 321 250 133 374 7+ - 23 30+ 73+ L6 103 87 54 5 L7 13 13 8 - - - _- L8 8 4 3 _ - _ L9 43 43 29 1+ - 7 3 10 11+ LIO 295 267 154 1il 24+ 9 12 45+ 57 Lll 46 46 27 6T _ 6t L12 39 38 23 24- 2 2 4 L13 947 677 449 76 75 41 30+ 146+ 223 L14 170 107 66 7 - 11+ 9 20+ 27+ L15 182 8 6 21 - 13 13 15+ L16 634 l 599 364 74 49 41 6 96 170 L17 96 J 25 16 - 31 - 3+ 1942 L18 44 12 7 13 - - 13 L19 291 288 133 17 6 30+ 3 39+ 564- L20 891 435 398 99 154 40 3+ 59 158 L21/1toL2V6 889 636 506 117 28 10 14 52 169

Lot;le L to 5,433 3,862 2,640 534 2264- 219 1252 571 1,105 L21/7 toL21/1 1/ 1,004 244 86 84 45 215 459 Lift Areas 2,930 2/ 324 2 27+ 27 14+ 69 and small 3 2 pockets - - Left Bank 8,363 2/ 3,968 2/ 340 330 185 855 2/ Totals V

1/ Approximate figures; boundaries not yet determined. 3 "Bid .aterboundmacadam

Ln 1 2/ Figureb not available. (K ANNEX3 Table 2 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

NSP RIGHT BANK - SUMMARY OF AREAS, EXISTING R & H ROADS AND PROPOSED NSP ROADS

Block Total Land Total Localized Existing Proposed NSP Roads Total No. Area Commandable Area R & H Rehabilitation Improvements New Total Aoads on Area Roads of existing to existing Construc- Proposed Comple- 2)BM roads1/ earth tion tion of ------(Km )------roads Project

------(Km) ------R1 23 5 1 10+ 1i4 R2 36 9 4 - - - - - R3 157 105 59 8+ 14 3 17- 26 R4 221 221 131 17 - 8T1 25 42t R5 251 225 125 41 - _ 12 12 53 R6 609 504 278 26 48+ 5 20 13+ 100 R7 51' 35 20 11 _ - - R8 L R9 782 429 252 91 _1.1 RID 1,821 1,808 1,163 257 57 7- 56 121 378 R11 1,670 1,607 985 172 47 30 69 146 31.8 R12 105 39 22 11+ - - - - 11+ R13 262 167 93 42 9 12 - 21 63 R14 182 137 82 17 - - 17+ 174 34+ R15 181 167 108 28+ 14+ - - 14+ 43 R16 92 34 23 - 6 - 14 20 20 R17 101 91 45 16 4 - - 4 20 RIO 142 142 73 13+ - - 12 12 254 R19 416 416 245 26 15 6+ 18 39+ 654 R20 59 58 29 4+ 11 - 3 14 184 R21 162 162 79 14 7 _ 10 17 31

TotalR RI 7,329 6,361 3,817 809 233 80+ 268+ 582 1,391

R22 1,413 1,339 936 112 58 3+ 77+ 139 251

Right 88,nk 742 7,700 4,753 921 291 84 346 721 1,642

dD2 = Waterboundmacadam INDIA ANNEX 3 ANDuRA PRADESH IRRIGATION AND CAD CqOtITE PROJECT Table 3A Page 1 NSP LEFT BANK - SCHEDULE OF PROPOSED NP ROADS.

Item Road . Rehabilitation Improvement Now No. Ref. Description of of existiay of existing roads No. the Road. WBe res earth roads.

1. L/1/3 PWD Road to Rajavoyam via Tirumalagiri and Bovagudem 905

2. L/2/4 Road from Yerdandla to PWD Road 4.5

3. L/4/8 khkundapur - Tummadam Road 4.0

4. L/4/10 Demaroherla - Veerlapalem and beyond up to Midiman- ikym major (Pert) 7'5

5. L/4/5 Tummadam - Adavidevulapalli Road 23.5

6. L/4/6 Tuwmadam - Vaddariguda Road 2.0

7. L/4/10(A) PWD Road to Veerlapalem (Up to Voeralapalem Xajor only) 2.0

8. L/,/10 Damer oherla-Veerlapalem Road (Pert) 7.5

9. L/5/2(A) PWD Road to Dilwalpur- tanda via Venkatadripalem 8.o

10. L/5/1(A) PWD Road to Tettekunta 6&.0O

11. L/6/1(A) Miryalaguda - Takkalapadu 9.0

12. L/9/2 Somarao - Chellapalli Road 7.0

13. L/9/Z(A) Somaram to N.S. left Main oanal 3.0

14. L/10/4 Gardepalli - Dophad via Pongods (Part) 7.C

15. L/10/16 Janpad - Neridioherla (on PWD Road) 17.5

16. L/10/11 Alangapur - Janpad (Up to Gundla-Pa tonly) 3.0

/ All existing and proposed roads have been allocated oonsecutive referenoe numbers in eaoh blook; numbers omitted from this sohedule refer to roads excluded from the projot. WWBM = Viaterbound macadam

55- INDIA A4NEX 3

AX-A IRRIGATIONM AND C&D CO(POSITEPROJECT Table23A

171 L/10/14 Jampad- m&kaliguda Read 6.o

18. L/10/11(A) Alangapur - Gardspalli via ralsalobervu 12.00

19, L/12/1(A) Jerripotu2lgudes Bethel road 2.0

20. L/13/9 Jarkatgud.n to K.R. Puram via Sadigudeu (Pazrt) 3.0

21. L/13/41 Husurngar - Nettapalli Road 20.0

22. L/13/42 Medlaoheruvu to Chintriyal L/13/43 via Mallareddyguda, Sobha and nadrigudeal Tammaram and L/13/40 Nakkaguda including approaah road to Chintriyal 38.5 1.0

23. L/13/44 Road from Muktyala to Nallareddyguda via Dondapadu and tlalka- puraa 13.5

24. L/13/4 Husurnagar - Yatavakila road in two streoheas KX 0/0 to 3/0 and 7/0 to 12/5) 8.5

25. L/13/10 Approach road to Tellabally 3.5

26. L/13/11 Tella b-11 - Ratnav ra2 Road (PartS 2.0

27. L/13/15 Bethol to PWD Road via Chilkur 8.5

28. L/13/33 Approach road to Nemali- puri 6.o

29. L/13/36 Jogikunt&- Gundalapalli Road 7.0

30. L/13/39 Reballi - Tammarao Road 3.0

31. L/13/12 10^ An agiri Road 1.5

32. L/13/4(A) Aaarzara on PWD road to Mordapu#and beyond 6.0

33. L/23/6(A) Fe der Road to Jaggaiakpat- Kuktyala Road (pND) (at about 4.5 KM from r4uktyala village) 2.5

56- INDIA AiXiX 3 ANDHRA PRADESH IRTGATION AND CAD COMPOSITEPROJECT Table 3A Page 3

34. L/13/24(A) Dontapedu to H.s.9via Ranpurand Annavaram 18.5

35. L/13/36(A) Jogihunta to hedlanheru Chingrial road (Meeting at about 2KM from Nedlaoheruyu 3.5

36. L/14/6 Kodad to Vollapur via Signaram and Tripuraram 4.0

37. L/14/7 Kodad - Anantagiri Road (Part) 5.5

38. L/14/10 Approach road to Chimrial 2.0

39. L/14/6(A) Vollapur to Euvara Madhavaram 2.o

40. L/14/6(B) Tripuraram - Anantagiri Road 5.0

41. L/14/10(A) Chimriyal-Gondrai Road 2.0

42. L/15/3 Bhagavatveedu - Maddivarigudam and beyond 13.C

43. L/16/7 Shermohammadpet - Gondri and beyond up to District border 8.5

44. L/16/10 Jaggaiahpet - Vedadri road (Part) Stretch towards Vedadri end). 6.5

45- L/16/9 Jagaaiahpet - Beausupadu Road (Part) 2.5

46. L/16/24 Vedadri - Konakanchi road and beyond up to N.H. 9 11.0

47. L/16/25 From N.H. 9 near Nawabpet to Penuganohiprolu 7.5

48. L/16/26 Makkapet to Penuganohi - prolu Road 7.5

49. L/16/52 Muppala - Sturu (Two bits 1.,XKMat Muppala end, and 4,00 KM at Eturu end) 5.5

50. L/16/10 Jabgaiahpet - Vedadri Road (Part stretch at Jaggaiahpet end). 3.0

57, INDIA r NEX3 - ~~~~~~TabWeA ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Page 4

51. L/16/41 Nandigana - Gudimetal (Rama- nuapet) Road 15.0

52. L/16/52 Muppala - Eturu (Part) 8.0

53. L/16/55 Chandrulapadu - Patempadu Road 3.0

54. L/16/60 Gandrai - Eakkapet Road 10.0

5j. L/16/64 Mangollu - Ramachandra - puram Road 2.0 2.0

56. L/16/5)(A) Patempadu - VeldiDalem Road 4.0

57. L/17/13 Painapalli - Cherumadhavaram Road 3.5

58. L/19/4 Mudikonda on PWD Road to Vallabhi and beyond up to dist. border (Part). 2.0

59. L/19/14 Jaggaiahpeta - Balusupadu road (part) 4.0

6o. L/19/3 Gudimella - Kodad-Khammam Road 4-0

61. L/19/4 Mudikonda on FWD road to Vallabhi and beyond up to dist. border (part) 21.0

62. L/19/11 Vallabhi - Appalanarasim- hapuram road 5.5

63. L/19/7(A) Pammi to Ammipeta on Mudikonda Vallabhi Road 3.0

64. L/20/14 Chintakani - Venkatayapalem Road (part) 1.0

65. L/20/17 Pallipadu - Guvvagurthi Road (part) 1.0

66. L/20/19 Khammmamto Kodamoor Road (part) 2.0

67. L/20/37 Brahmarapalli - Motemavvi Road 6.5

68. L/20/ 47 Polampalli - Dabbakupalli Road 5.0

69. L/20/14 Chintakani - Venkatayapalem Road (part) 11.5 ~58- INDIA ANNIEX3 Table 3A ANDHRA PRADESH IRRIGATION AND CAD COMPOSITEPROJECT Page 5

70. L/20/17 Pallipadu - Quvvagurthi Road (part) 8.0

71. L/20/19 Khammam - Kodamoor Road (part) 3.0

72. L//20/20 Bonakallu R.S. to Khammam via Masthikuntap Nagulavancha and Muthkepalli (part between Nagulavanoha and Muthkepalli 4.0

73. L/20/21 Baswapur to Tattkuntala via Peddamungala, Reddy- gudem and Produtur (between Baswapur and Produtur) 13.5

74. L/20/14(A) Jangareddygudem - Muthkepalli Road 2.0

75. L/20/47(A) Dabbakupalli to Vatsavai 1.5

76. L/21/20 Kalluru to Chinakorakonda via T ingola, Chennuru, Pedd- acporakonda and Kistaram (up to Kistaram) 20.0

77. L/21/38 PWD Road to Gosaveedu via Meenavolu, Sakinaveedu and Ingal (up to Ingal) 8.0

78. L/21/17 FWD Road to Peddaikora - konda via Ramanuja-Madnur and Kornavelu (part - up to Kornavelu 10.0

79. L/21,/1(A) FWD Road to Bakkachintalapad 6.0

80. L/21/12(A) Lokavaram to PWD road via Ramachandrapuram 8.0

81. - Zisti..atedlength of road required in blocks L21/7 to L21/1l, calculated on a road density basds 86.o 84.0 45.0

32. - Esti,iiated length of.road required in Lift areas and small pockets, calculated on a road density basis 27.5 27.0 14.5

-59- INDIA AtJNM.X 3 Table 3D ANDHRAPRADESH IRRIGATION AND CAD CC)4POSITE PROJECT Page 1 NSP RIGHT BANK - SCHEDULE OF PROPOSED N6 ROADS.

Item Road *1 £ Rehabilitation Improvement New No. Ref. ofriionoexIstin ~ of existing roads. 10. the Road. wBiAroads I/ o ear sthroads.n

83. R/3/2 Tumurukot Branch road to Paluvai 6.5

04. R/3//2 Rentala to Jettipalem (part) 3.5

85. R/3/3 Approach road from Kombhampadu to Ganryaram on Guntur- Tlyderabadroad 3.5

86. R/3/4 ApproacnL road from hvjacherla to Jammulamadaka 4.0

87. R/4/l(A) Rentala-JatBipalam road (part) 4.

88. R/4/l(B) s.iittagudi?aduto Gothimukkala Major 4.0

89. R/4/1(C) Pulipadu to Daida 6.0

90. R/4/3(A) Rentachinta to Rentala 3.0

'l. R/4/4 Gurazala road to Obulesanipalle up to ;'adugula only 8.0

92. R/5/1(B) Gurazala to Pulipadu 5.0

93. R/5/3(A) Nadikudi-'Togulapaduroad 7.0

94. R/6/23 Dachepalli-Tangada road via Mutvalampadu 13.00

95. R/6/l0 Road from Brahmanapalli to Regulagadda (par-) (Chiunayepalrm to Regulagedde) 5.0

96. R/6/l0(A) Matchayaram to Chinnayapalem 9.0

97. R/6/23(A) Matchayaram to BJrahamanapalli via Kamepalli 8.o

93. R/6/22 PiJlutla to Govindapuram 10.0

i/ All existing and proposed roads have been allocated consecutive referenoe numbers in each blook; numbers omitted from this schedule refer to roads excluded from the project. 2g .i= Waterbound macadam

60 -NDIA ANNX 3 Table 3B ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Page 2

99. u/6/21 2a1akallu to Pillutla ro^& 17*5

100. R/6/21(A) Padagarlapadu to meet ZLlakallu-Pillutla road 11.0

101. R/8/1(A) Velperu to Oravakallu 4.5

102. R/8/7 Velpuru to Peddapalem 3.0

103. B/9/6 Reddigudsu (on Guntur- Hyderabad road) to Uppalapadu 8.5

104. R/9/6(A) Doddlevuto Buriga banda 11.00

105. R/10/5(A) Bhatluru to meet Sattenpalli - Atohampetroad 6.0

106. R/10/5*0 4.12/1of G.P. Road to Pedakur.. padu via Siripuram 10.00 5-5

107. R/10/6(A) Talluru to Ponnekallu 18.0

108. R/10/52(D) 1.8/2 Guntur-Amarayathi road to Ponnekallu 2.0

109. R/10/47(A) Banfarupalli to meet Talluru- Ponnekallu new CAD road 4.0

110. R/10/47 Bazdarupalli to Railwa Station 1.5

111. R/10/52(7) Kantipudi to Komerapudi 3.0

112. R/10/3(A) Nudurupadu to oset Narasaropet 8attonpalli road - 13.00

113. R/10/51 Genikepudi to Mhrya 2.5

114. R/10/51(A) Unays to Gumtur- Chilakalurpiet road 2.5

115. 1/10/24 Chirumazilla to meet Satuluru-Tubadu road 3.0

116. R/10/52 Satuluru to Tubadu 7.5

117. R/10/52(B) Edavalli to Kotappakonda 5.0

118. R/10/52(C) Kotappakonda to Narasaraopet 10.0

61 INDIA ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT Table 3B Page 3 119. R/10/12 Narazaraopst to Alluri- PaleM 4.0

120. R/10/4(A) Gollapadi to Uppal 13.0

121. R/10/52(A) Tondapi to meet Guntur Hyderabad road 5.0 122. R/10/52(A)Burigabanda to meet Guntur- Hyderabad road 3.5

123. R/10/43 Bayyavaram to Ramapuram 2.0

124. R/11/7 Vipparla Kinkalaguntla Road 8.o

125. R/11/8 Naraearaopet-Romoicherla Road (part) 7.0

126. R/11/9 Rompicherla-Ipuru road (up to uppal1a) Part 9.0

127. R/11/27 Vinukonda to Koppaxapadu via Enegupol-a, Pittambanda Nagulavaram (part) 18.0

128. R/11/49 Old Madras road leading to Ambativaripalemvia Idupulapedu 5.0

129. R/Il/ll, 15 & 29 Santaimaguluru to Dbharmavaram via Bandavaripalem, Kopparam, Kopparapalem Ballikor'a and Ambadipudi (three parts) 10.0 130. R/11/19 Adivapalem, Vallalacheruvu road in part up to R & B road 3.5 131. R/11/37 Addanki Konanki road in part up to Dharmavaram 11.5

132. R/11/9(A) Boggaram to Thruviaellaand to connect R & B road 11.0 133. R/11/11(A)Samtamaguluru to Dihar :amavaram 15(A), via Bandavaripalem, Kopparam, 29(A) K&pparapalem,Ballikorva and Ambadipudi (Three parts) 16.0

62- INDIA ANNEX 3 - Table 3B ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECI Page 4

134. R/11/19(A) Vayyakallu Chinnakancherla road 5.5

135. R/11/19(B) Vayyakallu Adavipalem Road 5.5

136. R/11/27(A) Valamvaripalem to Gorrepadu Z.?. road 5.0

137. R/11/41(A)'Dronadula to Takkellapadu- Chandaluru road via Tallavaripalem 15.0

138. R/11/47(A) NTagandlato Ambatavaripalem 3.0

139. R/11/51(A) Vankayalapadu to Kodavati- varipalem 8.o

140. R/11/57(B)Inkollu, Koniki, Duddukuru (part) and road 5.C R/11/41 (part)

141. R1/13/5 Vinukonda-Guttapalli road up to Boundary of NSP 12.0

142. R/13/12 Vinukonda-Enugupalem road 9.0

143. R/14/1(A) Sira,ouramto DandapaXu 6.5

144. R/14*1(B) Kottapalem to Ammalacheruvu 11.0

145. R/15/2 Gangavaram to Marrivalula 11.5

146. R/15/4 Thripurantakam to .iriampalli road 3.0

147. R1/16/1 Kuruchedu-Avulamanda Road 6.o

148. R/16/1(A) Avulamanda to Chandavelu 10.0

149. R/16/1(B) Road from Avulaxianda- Kuruchedu Road to meet h'ustulaganavaram 4.0

150. R/17/3 Kurichedu-Avulamanda road (up to boundary) 4.0

151. R/18/2(A) From Vinukonda-,M4upparaju- varipalem road to meet Darsi Branch canal 12.0

152. R/19/2(B) Road along Darsi branch canal within block boundary 7-0

153. R/19/2(C) Bavvavaram to Kottapalem via Vemula and Kammavaram 6.5 7.0

154. R/19/3 Peddaullagadu Zammulamadakg Road (part) 12.0 63 TNae 3 ANDHRAPRADESH IRRIGATION AND CAD CaCPOSITE PROJECT Table 3B 155. R/19/4 Zamuelamadaka to Marella 3.0

156. R/19/1(A) Kantrupsdu to meet Sankara- purm on Darui-Addanki Road 4.0

157. R/20/3 Pothavaram to meet Darsi Vinukonda road 7.0 i58. R/20/1(A) Mupparajuvaripalem to meet Darsi Addanki road 3.0

159. R/20/2 Pa4daullagallu to meet Chintalapudi 4.0

160. R/21/3(A) Mohidinapuram to meot Darsi Addanki Road 5.0 161. R/21/4 Mundlamuru-SivaramPuram road (part) 7.o

162. R/21/4(A) Manepalli to meet Mundalamuru Sivarampuram Road 5.0

163. - Estimated length of road required in block R22, calculated on a road 58.o 3.5 77.5 density basis

64 INDIA AMNEX3 ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT Table 4

PROVISIONAL TIME SCHEDULE FOR NSP ROAD PROGRAM - -……(Km ------completed road) ------

GaAP FY(Apr.l - Mar.3k9276/77 1977/78 1978/79 1979/80 19B0/81 1961/82 Totals

Rehabilitation of 13 456 162 - - - 631 existing VU roads i/

Improving earth roads 5 15 123 179 92 - 414 to iBM standard

Nsw'nBM roads 5 15 106 155 215 35 531

Totals 23 486 391 334 307 35 1,576

IDA FY(July 1 - June 30) 1976/77 1977/78 1978/79 1979/80 1980/81

Rehabilitation of 127 382 122 - - 631 existing i(BM roads

Improving earth roads to 9 42 137 157 69 414 dBM standard

Now WBM roads 9 38 118 170 196 531

Totals 145 462 377 327 265 1,576

Source: Mission, based on information from R & B.

J/ BdM = iaterbound macadam

0'Cr% ANNEX 4 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

CAD Component

General

1. At present, farmers'fields are small (in general, less than 1/3 of an acre). Most fields, in the presently irrigated areas, have no direct access to irrigation water (field-to-field irrigation is common) and where water is supplied it is through long and winding watercourses, which usually follow field boundaries and these are not always aligned according to topography. Fields have no drainage and during the irrigation season, water accumulates in low spots causing water logging and salinity. Although some land shaping and leveling have been done by traditional methods, the land after development remains rather irregular in topography. Property boundaries are demarcated by bunds. Small temporary bunds are used to divide fields, especially where paddy is grown. The proposed on-farm development and Agricultural Supporting Services program would focus on more efficient farm water use, and would result in higher yields through more timely applications of irrigation water, adequate drainage and better culcivation techniques.

On-Farm Development Works

2. The project deals with two major types of on-farm works:

(i) irrigation and drainage infrastructure, i.e. the construction of a network of field channels, field drains and related structures (drops, distribution boxes and turn-outs), in the command of an outlet (pipe) including the lining of channels where required and farm access roads, and

(ii) land leveling and shaping of the farm holdings.

Irrigation and Drainage Infrastructure

3. A number of pilot on-farm development works were carried out by GOAP in the Pochampad project area in order to experiment with various design parameters, establish unit costs, test implementation procedures and refine survey and planning work. Because of steep topography, the size of the area commanded from the outlet in the Pochampad pilot project varied considerably. It ranged from 34 ac to 81 ac. In the 34 ac pipe, the size of the largest

66 ANNEX 4 Page 2 holding was 5.2 ac, and the smallest 0.4 ac, for a total of 11-beneficiaries. In the 81 ac pipe, the largest holding was 8.3 ac, the smallest again 0.4 ac, for a total of 40 beneficiaries. All the pipes were on sandy loam soils with slopes ranging from 2% to 4%. Soil depth varied between 9 inches and 18 inches. The steep topography limited the number of alternative water course and drain alignments. One of the major objectives of the pilot development was to test farmers reactions to various irrigation and drainage layouts. Although results in general were inconclusive and varied from pipe to pipe, considerable experience in planning and implementation was accumulated.

4. Strong farmer resistance to any form of border realignment was encountered. Alternative layouts were therefore tested. To arrive at a cost differential between infrastructural works with or without border realignment, at least two alternative layouts were planned and estimated for each of the pipes in the pilot development. One was designed with full border realignment, with water courses and drains aligned fully in accordance with topography. The second layout left existing field boundaries essentially unchanged; alignments were in accordance with topography but canal length increased considerably to allow for deviations along field boundaries. A comparison between the two layouts showed a 15% to 25% cost increase for the second alternative. Most of the increase was caused by the larger number of drop structures, and distribution boxes, resulting from the longer canals.

5. To speed up land development in the first stage project, a compromise to the border realignment issue was negotiated with GOAP. It was agreed that field channels and drains, in general, would follow field boundaries as long as the resulting layouts remained technically acceptable and the additional cost to the farmers, as a result of longer channels, was not more than 25% when compared with a layout based on complete border realignment. All channels, drains and structures would be communal property. The Pipe Committee (Water Users Association) in an outlet would be jointly responsible for the operation and maintenance of this communal property. Once an effective extension service would be operating in the project areas to explain and demonstrate to farmers the considerable advantages of border realignment, it is expected that the farmer resistance would disappear.

6. Land leveling and/or shaping would be compulsory on all farm holdings. In the case of 'irrigated wet" areas, the farmers prefer to level their holdings themselves as they have been attending to such work traditionally without outside assistance. In "irrigated dry" areas, however, where in most cases slopes would have to be provided both in the longitudinal and in the transverse directions, the villagers would need mechanical equipment and technical assistance.

7. Land leveling would be carried out in one of three ways: (a) by the CAD Authority through suitable contracting agencies; (b) by the farmer himself with a loan obtained from a bank, and (c) by the farmer himself without financial assistance from a bank.

-67 ANNEX 4 Page 3

Regardless of what manner the work would be accomplished, designs and technical supervision would be provided by the CAD Authority.

8. The CAD Authority would publish its detailed work program for each of the project areas. Technical assistance to farmers working by themselves would follow this timetable. If assistance was not requested in time, the farmers would have to carry out the work without technical advice, in accordance with plans and specifications prepared by the CAD Authority. If the work was not completed within the time alloted to the farmer (usually two dry seasons), or was not carried out to the required standards, the CAD Authority would complete the work and charge the cost to the farmer.

Planning and Design Work

9. In the pilot project, topographical mapping for the planning of water courses, field channels and drains and for the land leveling of the individual holdings was done by grid leveling. For cadastral information, village maps were used. Grid leveling is an inaccurate system in areas of accidental topography. Village maps are basically sketch maps and often do not enable accurate reconstruction of field boundaries. Attention was drawn during project preparation to these deficiencies and the use of a rectified air photo base for all survey and cadastral work was recommended to the CAD Authorities. In addition to greater accuracy, this would speed up survey and cadastral work considerably and reduce costs. Following lengthy discussions wih the Survey of India and the Ministry of Food, Agriculture and Irrigation (GOI), arrangements were made for the preparation of 1:1,500 rectified air coverage of the CAD areas. Initially, the aerial photogrammetric work would be financed by GOI, out of funds made available by the Bank, under a previous CAD project credit. On receipt of the prints, the CAD authority would repay the cost to GOI.

Implementation of On-Farm Development Works

10. The engineering and loan survey work in a pipe for infrastructure and land leveling would be done simultaneously. Implementation, however, would be by two different types of contractors and not necessarily at the same time. Construction of watercourses, field channels and drains, which is mostly earthwork and masonry (drop structures, division boxes, farm outlets), would be let to small village contractors. The works are simple and the necessary expertise should be readily available in the villages. All excavation would be done by manual labor. The works would be staked out and construction supervised by the Land Development Divisions (LDD) of the CAD Authority. Land leveling work, generally involving the moving of small quantities of earth over short distances, would be let to small contractors or farmers owning suitable wheeled tractors. The work covering several pipes in one village would be tendered at one time. Farmers and small contractors generally do not own tractor-drawn equipment required for the leveling operation. These will be procured by the CAD Authority and hired out to

68 ANNEX4 Page 4 the successfulcontractors on a daily or weekly basis (Table 1). Similar arrangementsare common for small road constructionworks. Corporationsor bigger contractorsalso would be able to bid for these works. Initially,the LDDs would provide detailed technicalguidance to the leveling contractorsto enable them to carry out the work in accordancewith correct soil conservation practices. In time, the contractorswould become more experiencedand the LDDs involvementwould be reduced.

11. An experimentalcum training center would be set up in the Pochampad project area for this purpose. The GOI has made availablethe necessary financing to GOAP to procure equipment for the operationof the center which was to have been fully operativeby early 1976 (Table 2). The center would operate as a contractingagency for land levelingworks in the ongoing CAD program in Pochampad. An adequate number of field supervisorypersonnel would be trained in the center during the dry season of 1976, to implement the project'sfirst year land leveling program.

April 1976

69 ANNEX 4 Table 1 INDIA ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Tractor--Attachments to be owned by CAD Department and Hired to Petty Contractors

1 Tractor levels on the average 0.4 ha/day or in 120-130 working days 50 ha.

Number of Tractors needed per year (Assuming50% of area would be leveled by

tractors). 1976-77 1977-78 1978-79

NagarjunasagarProject (Left) 16 48 96

Nagarjunasagar Project (Right) 16 48 96

TungabhadraProject (HLC) - 16 48

Pochampad Project 48 96 192

80 208 432

720 Average requirement of tractors: 3 = 240 tractors/year.

Requirement of Attachments/Implementsfor land leveling_

Assuming 80 tractors would need attachments in the first year, 120 more the second year, and 200 more in the third year; the requirement for

attachments and implements would be:

1976-77 80 sets 1977-78 120 sets 1978-79 200 sets

Cost of each set:

Cultivator Rs. 3,000 Disc plough Rs. 3,000 Multipurpose blade terracer Rs. 3,000

Total Rs. 9,000 (Rw.es in ,000) Estimated Costs 1976-77 1977-78 1978-79

Attachments 7.20 10.8 18.0 Pumps & piping 0.80 1.2 2.0 Total 8.o 12.0 20.0 70 ANNEX4 Table 2

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Equipment Requirements for Experimental-Cum-Training Center

Note:- Work will be done on farmer's land for all field trials

and experimentation.

A. MACHINES. Rs 100,000

i) Wheeled Tractor 30-40 hp 2 @ Rs 60,000 1.20

ii) Wheeled Tractor 60-70 hp 2 @ Rs 90,000 1.80

iii) Trailer for carrying 1 @ Rs 20,000 .0.20 attachments,accessories etc. iv) Pump 10 hp Diesel driven trolley mounted 2 @ Rs 10,000 0.20 Total (A) 3.40

B. ACCESSORIES/ATTACHMENTS/TOOLS/SPARES:

i) Cultivator 11 tyne 4 @ Rs 3,000 0.12

ii) Disc plough 4 @ Rs 3,000 0.12

iii) MultipurposeBlade terracer 4 0 Rs 3,000 0.12

iv) Aluminum pipes and fixtures 300MN Rs 70 0.21

v) Small tools, 0.05 vi) Spares for machines 0,51 Total (B)

C. SERVICING-CUM-TRAININGSHED.

i) Shed 24 Mx6.5M with tubular steel trusses and Asbestos sheet roofing 156 sq,m. @ 250 0.39

ii) Furniture/fittings 0.11 Total (C) 0.50 ABSTRACTESTIMATES A. MACHINES Rs34o0,000 B. ACCESSORIESETC. Rs.113,000 C. SHED Rs. 50,00o Rs.503,000 contingencies Rs 4 7000 Total Rs.550,000

-71 ANNEX 5 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Water Balance NSP

Krishna Water Dispute

1. Before the middle of the nineteenth century, there was little development of water resources in the Krishna Basin. Numerous tanks and small diversion works were in operation, but no major work had been constructed. The rivers of the Krishna River system rising in the Western Ghat Mountains had plentiful supplies during the monsoon months but most of the water was wasted to the sea. From about 1855 onwards, major irrigation works were undertaken such as the Krishna Delta Canal system, the Kurnool Cuddapah Canal, the Mutha Canals, the Nira Left Canal, the Vanivilas Sagar and the Nira Right Canal. From 1918 to 1930, the Tata family constructed the Tata Hydroelectric Works. Until the conclusion of WW II, the engineering works for development of water resources were few in number, and the water supply was ample in relation to demand. British India was subject to the unitary control of the Government of India (GOI) and even the Princely States were under its paramount control. There were minor disputes relating to the Tungabhadra waters but they were amicably settled in 1892 and 1933.

2. Under the Government of India Act, 1935, water became an exclusive Provincial subject and specific provisions were made for settlement of water disputes. Before Independence, the Provinces of Madras and Bombay, the States of Hyderabad and Mysore and a few other Princely States had riparian rights in the Krishna Basin. The agreements of June and July 1944 provi- sionally settled disputes concerning the sharing of the Tungabhadra waters, and enabled the States concerned to undertake the construction of the Tungabhadra Project, the Rajolibunda Diversions Scheme, the Bhadra Reservoir Project and the Tunga Anicut. The Radhanagari Project and the Ghataprabha Left Bank Canal were also undertaken before 1950.

3. In 1950, when the Constituttioncame into force, the entire Krishna Basin fell within the territories of the States of Bombay, Mysore, Hyderabad and Madras. There was planning at the State and national levels for intensive development of water resources. The States of Bombay, Hyderabad and Madras proposed important schemes for utilization of the Krishna waters, like the Koyna, Upper Krishna, Lower Krishna, Krishna Pennar and other projects. At an interstate conference held in July 1951 in New Delhi, a Memorandum of Agreement was drawn up apportioning the available supply of the Krishna River system among the four riparian States.

4. The Memorandum of Agreement was to have settled the conflicting claims of the riparian States with regard to the supplies of the Krishna River system for 25 years. But the State of Mysore refused to ratify the 72- ANNEX 5 Page 2

Agreement, and it was inevitable that disputes regarding the validity of the Agreement would arise. In the meantime, the Planning Commission continued to clear projects on the assumption that the Memorandum of Agreement of 1951 was binding upon the States.

5. Extensive territorial changes were made in the Krishna Basin by the Andhra State Act, 1953 and the States Reorganization Act, 1956. The new States of Bombay, Mysore and Andhra Pradesh became the riparian States in place of the old States of Bombay, Hyderabad, Mysore and Madras. In view of the extensive territorial changes, the then Central Water & Power Commis- sion (presently Central Water Commission) drew up a scheme for reallocation of the Krishna waters, but the scheme was not accepted by the States. An interstate conference was held in September 1960, but no settlement could be reached. The legal existence and validity of the Agreement of 1951 was now vigorously challenged. The State governments began to raise objections to the clearance of new projects on the basis of the 1951 allocations.

6. After 1951 and before September 1960, the States concerned under- took the construction of several important major projects such as the Nagarjunasagar, the Musi, the Tungabhadra High Level Canal Stage I, the Koyna Hydroelectric Stage I Project, the Khadakwasla Stage I, the Ghataprabha Stage II, the Ghod and the Vir Dam.

7. More schemes were put forward by the State governments and their aggregate demand was in excess of the available supplies. As the pressure on available supplies increased, disputes increased. Objections were raised concerning Nagarjunasagar, Srisailam and the Koyna projects.

8. In May 1961, the Central Government appointed the Krishna Godavari Commission and in August 1962, the Commission submitted its report. The Com- mission found that without further data it was not possible to determine the dependable flow accurately. They also found that the supplies available in the Krishna Basin were inadequate to meet the demands of all the projects put forward by the State governments. In view of the shortage, they indicated procedures that should be adopted with regard to the projects under construction and the new projects which the State governments were anxious to undertake immediately. They put forward proposals for diversion of the God- avari waters into the Krishna and recommended further investigation. They also recommended that regular gauging should be carried out at key sites on the river system.

9. In March, 1962, the Union Minister for Irrigation and Power stated that the Agreement of 1951 had become void; however, projects should not be held up pending final allocation of the Krishna supplies and should be cleared on the footing that the withdrawals of supplies by Maharashtra, Mysore and Andhra Pradesh should not exceed 400, 600 and 800 TMC respectively. How- ever, the States concerned did not agree to this interim allocation. In June 1963, the Maharashtra Government asked to refer the disputes to the Tribunal.

.73. ANNEX 5 Page 3

10. Since September 1960, the Central Government has given clearance to several important major projects such as the Srisailam, the Tungabhadra High Level Canal Stage II, the Upper Krishna, the Malaprabha, the Bhima, the Kukadi, the Krishna, the Warna and the Koyna Hydroelectric projects, Stages II and III.

11. Action also was taken on the recommendations of the Krishna Godavari Commission. Investigations concerning suitable Godavari diversion links were made at the technical level, but no agreed formula was arrived at. Model experiments were conducted at research stations with a view to reconstruct the yearly flow at Vijayawada, but the reliability of the model experiments and the accuracy of the reconstructed flow data were disputed, and the problem of quantitative assessment of the dependable supply remained unsolved.

12. The Central Government tried to settle the dispute by negotiation. Several interstate conferences were held without success. Eventually, in April 1969, the Central Government referred the dispute to the Tribunal.

13. In view of the reorganization of States and the redistribution of the Tungabhadra Valley between the States of Mysore and Andhra Pradesh, disputes arose concerning the continuing validity of the earlier Tungabhadra Agreements, the use, control and distribution of the Tungabhadra waters and the management of certain existing works on the Tungabhadra. These disputes were also referred to the Tribunal.

14. In July 1970, the GOI at the request of the Andhra Pradesh Govern- ment referred to the Krishna Water Disputes Tribunal matters concerning the release of waters by Mysore for the benefit of Andhra Pradesh from (1) the Upper Krishna Project; (2) the Tungabhadra Left Bank Canal and (3) the Bhima Project. In September 1970, matters concerning the release of waters by Maharashtra for the benefit of Mysore from (1) a storage dam at Ajra and (2) Koyna Project were referred to the Tribunal at the request of the Mysore Government. On the same day, matters concerning the Agreements of 1892 and 1933 were referred to the Tribunal at the request of the Andhra Pradesh Gov- ernment. In February 1971, the GOI at the request of the Andhra Pradesh Government also referred to the Tribunal matters concerning the release of water from the Tungabhadra project.

15. In their statements of case, Maharashtra, Mysore and Andhra Pradesh asserted the following claims to the utilization of the waters of the Krishna River system for their existing and future projects:

State Gross utilization in TMC

Maharashtra 828.70

Mysore 1,430.00

Andhra Pradesh 1,888.10

4,146.80

74- ANNEX 5 Page 4

16. In addition to the above demands, Maharashtra claimed 32.5 TMC from regenerated flows and 70 to 80 TMC for industrial use and domestic water supply; Andhra Pradesh claimed 120 TMC for water supply and industrial use and Mysore stated that its demand for 1,430 TMC did not include its needs of water for domestic and industrial uses. Obviously, there was not enough water in the Krishna River system to satisfy all the claims of the three States.

17. Final Order of the Tribunal (December 1973): (Only those portions of the Order are quoted here which are considered relevant to water availability in the Nagarjunasagar (NSP) Project.)

Clause I

This Order shall come into operation on the date of the publication of the decision of this Tribunal in the official gazette under Section 6 of the Inter-State Water Disputes Act, 1956.

Clause II

The Tribunal hereby declares that the States of Maharashtra, Karna- taka and Andhra Pradesh will be free to make use of underground water within their respective State territories in the Krishna River Basin.

This declaration shall not be taken to alter in any way the rights, if any, under the law for the time being in force of private individuals, bodies or authorities.

Use of underground water by State shall not be reckoned as use of the water of the river Krishna.

Clause III

The Tribunal hereby determines that, for the purpose of this case, the 75% dependable flow of the river Krishna up to Vijayawada should be taken as 2,060 TMC (58.3 billion M3 per year).

The Tribunal considers that the entire 2,060 TMC is available for distribution between the States of Maharashtra, Karnataka and Andhra Pradesh.

The Tribunal further considers that additional quantities of water will be added to the 75% dependable flow of the river Krishna up to Vijayawada on account of return flows and will be available for distribution between the States of Maharashtra, Karnataka and Andhra Pradesh.

Clause IV

The Tribunal hereby orders that the waters of the river Krishna be allocated to the three States of Maharashtra, Karnataka and Andhra Pradesh for their beneficial use to the extent provided in Clause V and subject to such conditions and restrictions as are mentioned hereinafter.

75- ANNEX 5 Page 5

Clause V

A. The State of Maharashtra shall not use in any water year more than the quantity of water of the river Krishna specified hereunder:

(i) as from the water year commencing on the 1st June next after the date of the publication of the decision of the Tribunal in the official gazette up to water year 1982-83 565 TMC.

(ii) as from the water year 1983-84 up to water year 1980-90 565 TMC plus a quantity of water equivalent to 7-1/2% of the excess of the average of the annual utilization for irrigation in the Krishna River Basin during the water years 1975- 76, 1976-77 and 1977-78 from its own projects using 3 TMC or more annually over the utilizations for such irrigation ik the water year 1968-69 from such projects.

(iii) as from the water year 1990-91 up to water year 1997-98 565 TMC plus a quantity of water equivalent to 7-1/2% of the excess of the average of the annual utilizations for irrigation in the Krishna River Basin during the water years 1982-83, 1983-84 and 1984-85 from its own projects using 3 TMC or more annually over the utilizations for such irrigation in the water year 1968-69 from such projects.

(iv) as from the water year 1998-99 onwards 565 TMC plus a quantity of water equivalent to 7-1/2% of the average of the annual utilizations for irrigation in the Krishna River Basin during the water years 1990-91, 1991-92 and 1992-93 from its own projects using 3 TMC or more annually over the utilization for such irrigation in the water year 1968-69 from such projects.

B. The State of Karnataka shall not use in any water year more than the quantity of water of the river Krishna specified hereunder:

(i) as from the water year commencing on the 1st June next after the date of the publication of the decision of the Tribunal in the official gazette up to the water year 1982-83 695 TMC

76 ANNEX 5 Page 6

(ii) as from the water year 1983-84 up to the water year 1980-90 565 TMC plus a quantity of water equivalent to 7-1/2% of the excess of the average of the annual utilization for irrigation in the Krishna River Basin during the water years 1975- 76, 1976-77and 1977-78 from its own projects using 3 TMC or more annuallyover the utilizationsfor such irrigation in the water year 1968-69 from such projects.

(iii) as from the water year 1990-91up to the water year 1997-98 565 TMC plus a quantity of water equivalentto 7-1/2% of the excess of the average of the annual utilizationsfor irrigation in the Krishna River Basin during the water years 1982-83, 1983-84and 1984-85from its own projects using 3 TMC or more annually over the utilizationsfor such irrigation in the water year 1968-69from such projects.

(iv) as from the water year 1998-99 onwards 565 TMC plus a quantity of water equivalentto 7-1/2% of the average of the annual utilizationsfor irrigationin the Krishna River Basin during the water years 1990-91, 1991-92and 1992-93 from its own projects using 3 TMC or more annually over the utilizationfor such irrigationin the water year 1968-69 from such projects.

C. The State of Andhra Pradesh will be at liberty to use in any water year the remainingwater that may be flowing in the river Krishna but thereby it shall not acquire any right whatsoever to use in any water year nor be deemed to have been allocated in any water year of the river Krishna in excess of the quantity specifiedhereunder:

(i) as from the water year commencingon the 1st June next after the date of the publicationof the decision of the Tribunal in the official gazetteup to the water year 1982- 83 800 TMC.

(ii) as from the water year 1983-84up to the water year 1989-90 800 TMC plus a quantity of water equivalentto 7-1/2% of the average of the annual utilizationsfor irrigationsin the Krishna River Basin during the water year 1975-76, 1976-77 and 1977-78 from its own projects using 3 TMC or more annually over the utilizationsfor such irrigationin the water year 1968-69 from such projects.

(iii) as from the water year 1990-91up to the water year 1997- 98 800 TMC plus a quantity of water equivalentto 7-1/2% of the excess of the average of the annual utilizationsfor irrigationin the Krishna River Basin during the water years 1982-83, 1983-84 and 1984-85 from its own projects using 3 TMC or more annually over the utilizationsfor such irrigation in the water year 1968-69 from such projects. -77 ANNEX 5 Page 7

(iv) as from the water year 1998-99 onwards 800 TMC plus a quantity of water equivalent to 7-1/2% of the excess of the average of the annual utilizations for irrigation in the Krishna River Basin during the water years 1990-91, 1991-92 and 1992-93 from its own projects using 3 TMC or more annually over the utilizations for such irrigation in the water year 1968-69 from such projects.

D. For the limited purpose of this Clause, it is declared that:

(i) the utilization for irrigation in the Krishna River Basin in the water year 1968-69 from projects using 3 TMC or more annually were as follows:

From projects of the State of Maharashtra 61.45 TMC From projects of the State of Karnataka 176.05 TMC From projects of the State of Andhra Pradesh 170.00 TMC

(ii) annual utilizations for irrigation in the Krishna River Basin in each water year after this Order comes into operation from the projects or any State using 3 TMC or more annually shall be computed on the basis of the records prepared and maintained by that State.

Water Availability for the Nagarjunasagar Project

18. Within the overall water allocation from the Krishna River to Andhra Pradesh of 800 TMC in 1976, 264 TMC (7.5 billion M3) has been allocated to the NSP (excluding evaporation losses from the reservoir). Present and projected utilization of the Tribunal's water allocations in the Krishna Basin are estimated as follows: /1 All figures in TMC

Allocation as Utilization Proposed Utilization contained in by the pro- utiliza- by projects the report of jects under tion by proposed Krishna Water operation. projects (under exam- Disputes Tribu- under con- ination) State nal (Dec. 1973) struction Balance

Andhra Pradesh 800 469 314 - 17 Karnataka 695 192 313 149 41 Maharashtra 565 225 222 40 78

Total 2,060 886 849 189 136

/1 Estimates were prepared by K.C. Goyal of the Central Water Commission, (CWC), GOI, on August 26, 1975.

78- ANNEX 5 Page 8

19. Only 886 TMC is being utilized at present by completed projects in the Krishna Basin. Out of the 849 TMC allocated to projects under construction, CWC estimates that only some 200 TMC is presently being utilized. Thus, a balance of about 974 TMC (649 + 189 + 136) which could be utilized by Andhra Pradesh over its allocation of 800 TMC is flowing into the sea.

20. Major projects have a construction period of at least 10 to 15 years. Full utilization of the water allocations in projects presently under construction is therefore expected to take at least until year 1990. Even then a balance of about 300 TMC (over the 800 TMC allocation to Andhra Pradesh) is expected to be available for use in the Nagarjunasagar projects and to areas downstream of the dam. With the development of upstream irrigation, return flows also would become available for utilization by downstream consumers.

21. In view of the above, it is apparent that considerable excess water supplies will be available at Nagarjunasagar for the next 20 to 25 years, over and above the allocation of 264 TMC.

Water Demand and Diversion Requirements

22. The following assumptions were made in estimating water demand and diversion requirements at the heads of the two main canals:

(a) Excess flows would be available at least for the next 20 years. The carrying capacity of the main irrgation network would constrain the use of these surpluses in kharif. In the rabi season, the constraint would be agrotechnical, i.e. available farm power would limit cropping intensities.

(b) The minimum water quantities ("design quantities") required for the project are calculated on the basis of a "design cropping pattern" which would produce an acceptable return on the investment. These design quantities should be reduced, in time, with an increase in water use efficiencies. However, for the initial project period from 1981-82 to 1995 when system efficiencies would still be very low, the design quantities were calculated on Bank estimated values for field requirements and conveyance and operational efficiencies. Considerable differences exist between GOI and mission estimates with regard to these values. Owing to a complete lack of observed data, mission estimates were based on field im- pressions and on experience in similar projects throughout the world (FAO publication on "Crop Water Requirements," 1975). The GOI estimates were based on data from experimental plots, and on measurements of water releases at the head of major irrigation systems (Krishna Delta Project) without, however, any measurements of the effective use of the water below the diversion points. As the differences

79.- ANNEX 5 Page 9

could not be resolved (owing to this lack of observed data), sensitivity analyses were carried out on the results using different values for field water requirement figures to provide a range of water requirements for the design cropping pattern. Additional water quantities, of from 35 to 50% above the allocation of the Tribunal, would have to be made available to the project until such time that water use efficiencies can be improved sufficiently to make these additional quantities unnecessary. Only after monitoring the existing irrigation system for some time would a more exact estimate of the design quantities become possible.

23. Any water allocation to the NSP project, in excess of the "design quantity," would be available in accordance with a reservoir rule curve and supplied on a temporary (seasonal) basis for additional dry season crops. Planting of dry season crops would be delayed until the quantity of water available for use each year was established.

24. Water requirements for the NSP Left and Right Bank command areas were based on the design cropping patterns shown in Annex 12, Figures 1 and 2. The crops include rice (both short- and long-term varieties), groundnuts, chillies, cotton, sorghum, pulses, oilseeds, pearl millets, minor millets and sugarcane.

25. Crop water requirements were computed by the Class A Pan Evaporation method using the WATREQ computer program developed by the Bank. Average pan evaporation and rainfall data for the Khammam, Amaravati and Rentachintla climatological stations, which are considered to be representative of the total project area, were used in the computations. The average of the pan evaporation data correlated closely with interpolated data from isopleth maps of recorded Class A pan evaporation maps in India (Annex 1, Table 1). Effective rainfall was estimated based on an 80% chance of experiencing the average rainfall at the three stations and using an effective rainfall table relating to mean monthly rainfall and average monthly consumptive use prepared by the US Soil Conservation Service. For rice crops, the additional rainfall retention capability possible with moderate height paddy bunds was taken into consideration, as well as the maximum depth of water desired in the rice field during cultivation. A land preparation period of ten days was assumed for the rice crop instead of the 20 to 30 day period normally used, since it was assumed that the rice fields in the NSP area would be bare at the time of land preparation, in accordance with the present situation, and time for decompo- sition of weeds and stubble would not be needed. Soil saturation requirements were estimated to be 51 mm (two inches). Evaporation water loss was estimated to be 0.8 of the average evaporation during the ten day period. Percolation losses were estimated by GOI to be 2.5 mm (0.1 inch) per day in the black soils and 6.0 mm (0.24 inches) per day in the red soils. Flooding requirements for rice to provide an optimum depth for cultivation after transplanting were estimated to be 102 mm (four inches). This water also would provide for consumptive use requirements during the last two weeks of the cultivation period when irrigation had ceased. No water requirements for land preparation were assumed for ID crops. 80 ANNEX 5 Page 10

26. A field irrigation efficiency of 85% was assumed for the rice crop, not including deep percolation losses which are accounted for separately. An average field irrigation efficiency of 65% was assumed for crops other than rice. Canal and distributary conveyance losses (seepage and operational losses) were estimated for each section of canal and each irrigation block and averaged about 35% (65% efficiency) for the combined NSP Command Area. Resultant overall project irrigation efficiencies at full project development for rice and ID crops were estimated to be about 39% and 42%, respectively, for an average project irrigation efficiency of about 40%.

27. Total NSP irrigation requirements were estimated using the Bank's AGPROJ computer program, based on the criteria and assumptions described in Paragraphs 24 to 26. For the irrigation requirement calculations, it was assumed that only 90% of the project ara could be cropped, the remaining area being taken up in roads, farmsteads, project facilities, field bunds, etc. Accordingly, the area to be cropped in the Right Bank was reduced from 475,000 ha (1,174,000 ac) to 428,000 ha (1,057,000 ac) and the Left Bank area was reduced from 397,000 ha (980,000 ac) to 357,000 ha (882,000 ac). Computer printouts of water requirement calculations for each crop are shown in Table 1, pages 1 to 13. Field irrigation requirements (in inches) at the pipe turnouts are shown in Table 2. Total estimated requirements for each crop are shown in Tables 3 and 4, as well as the total flow that would be carried in the main canals during the irrigation season.

28. The capacities of the Left and Right Main Canals, as designed and constructed, would not be sufficient to carry the full estimated irrigation needs for all kharif season crops during the period from August through October. Therefore, to keep within canal capacity limitations, the project was assumed to provide no irrigation for pulses, oilseeds and minor millets during this period and only a partial irrigation for sorghum and groundnuts (Tables 3 and 4). Crop yields for these crops were adjusted accordingly (Annex 12, Table 2). Irrigation requirements for rice and sugarcane would be fully supplied, and the water deliveries for sorghum and groundnuts would be apportioned, within the limits available, to minimize damage to each crop. Full irrigation water requirements would be supplied for all crops during the rabi season. Also, it was assumed that pulse crops would be planted in the standing rice crop, using residual soil moisture to reach maturity. The irrigation regime assumed at full project development is shown in the following table:

81 ANNEX 5 Page 11

ASSUMED NSP IRRIGATION REGIME AT FULL DEVELOPMENT

(Shown as Percent Cultivable area)

Left Bank Right Bank

Kharif (July-November)

Full irrigation 55 60 Partial irrigation 44 39 No irrigation 1 1

Rabi (December-April)

Full irrigation 40 40

On residual moisture 12 17

Total cropping intensity 152 157

29. Under the Bank water requirement assumptions, including irrigation reductions resulting from canal capacity limitations, 196 TMC would be required for the Left Bank and 206 TMC would be needed for the Right Bank, for a total NSP water requirement of 402 TMC. This is 138 TMC (about 50%) more than the combined allocation of 264 TMC for both command areas. A sensitivity analysis to provide a range of water requirements for the design cropping pattern was made using a 20% reduction in the consumptive use of rice and a 20% and 33% reduction in percolation losses assumed for the black and red soils, respectively. Water requirements for the Left and Right Bank resulting from the sensitivity analysis were estimated to be about 173 TMC and 189 TMC, respectively, or a total of 362 TMC. This is 98 TMC greater (about 35%) than the 264 TMC water allocation. In summary, NSP irrigation water requirements for the cropping pattern assumed by the Bank would probably be from 35% to 50% greater than the allocation of the Tribunal.

30. The NSP monitoring and project preparation program to be provided by the project would supply the data necessary to determine actual project operational efficiencies and conveyance system losses and would provide plans and estimates for potential system modifications or improvements that could be taken to reduce irrigation wastes throughout the system. Estimates of improvements in conveyance and operational efficiencies that could be expected to be achieved with a project modernization program range from about 15% to 20%.

82 ANNEX 5 Page 12

Water Quality

31. Water quality samples from Nagarjunasagar Reservoir have been analyzed at the Andhra Pradesh Engineering Research Laboratory in Hyderabad. The water is of good quality (specific conductivity less than 300 micromhos per cm), though slightly alkaline (ph 7.8), and contains less than 200 ppm of soluble salts.

April 1976

83* ANNM 5 Table INDIA Page 1 ANDHRAPRADESH IRRIGAT~ION ANID CAD COMPOSITEPROJEC

CROPWATER RMUINMTS BY MO)NTHAND PERIOD(114) RICE (Kharif) Short-Term Variety (Non-Irrig.Period Nov. 1') JAN FEB MAR APR Nh! JUN JUL AUG SP OCT NOV DEC TOTALS 1 2 3 14 5 6 7 8 9 10 2.1 12 13 114 15 16 17 18 19 20 21 22 23 2)4 1dth~ reductions EST RAIN 0. 5. 8. 15. 38. 814. 152. 127. 1140. 90. 33. 8. in consumptive P'AN EVAP 82. 89. 97. 13.3.136. 150. 155.162. 170. 1614.14L5. 128. 115.108. 108.102. 91g.84.. 83. 80. 75. 73. 73. 76. use and pecoaton

RICE------Bl.ac-k R-ed- - CROP FACT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.02 1.08 1.311 1.20 1.22 1.17 0.98 0.00 0.00 0.00SiI 2l CONS USE 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 110. 110. 103. 101. 101. 93. 0. 0. 0. 0. 618 (1494) 94i) … --

Land Preparation (10 days) Saturation 36 15 5 (513 (5i) Evaporation (10 days) 14 060 (18 (48) Perc. Black soils S 2.514mm/day 16 10 26 (21) ~' Red soils 0 6.10 mm/day 40 20 60 (140) Floodi.ngfor Cultivation 6)4 38 102 (102) (102 Land PeEparation Total Black Soils 155 84 239 Red Soils 180 914 2714 Field Peroolation Black Soils0 2.5)4 mm/day 38 414 38 38 38 38 231 (1814) Red Soils 0 6.10 umm/day 91 97 91 91 91 97 558 (3714) Total Field Water Requirements Black -Soils 155 231 150 1)42 1140 1140 132 1090 (900) Red Soils 180 295 206 196 193 193 191 11454 (1109) Less 30% Chance Rainfall 81 66 61 58 56 51 38 4311 Effective Rainfall 714 61 58 53 53 51 38 388 (310) (310) Net Far. Irrig. Requ't. S T.O. BlaLck Soils 81 170 91 90 8)4 90 914 700 (590) 85% Fam. Irrig. E±ff. 97 201 107 1014 99 1014 112 8214 (6PQ4 Red Soils 107 2314 1147 1142 1140 1)42 152 10614 (799) 85% Farm Irrig. Lff. 1214 274 173 168 165 168 180 1252 M9O4)

Note: No irrigation in November

00 I~~~/With 20% reduction in consumptive use and reductiorMin percolation of 20% and 33% respectively for black and red soils. ANNEX 5 Table I INDIA Page 2 ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

CROPWATER RE4UIXNTS BY MONTHAND PERIOD (MM)

RICE(Kharif) Long-Term Variety (Non-Irrig. Period Nov. 1) JAN FEB MAR RPR NMA JUN JUL AUG SEP OCT NOV DEC TOTALS With reductions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 in consumptive SST RAIN 0. 5. 8. 15. 38. 84. 152. 127. 140. 90. 33. 8. use and PAN EVAP 82. 89. 97. 113. 136. 150. 155. 162 170. 164. 145. 128. 115. 108. 108. 102. 91. 84. 93. 80. 75. 73. 73. 76. percolation I/ - …______

RICE K Black Red CROP FACT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.02 1.07 1.12 1.18 1.21 1.21 1.14 0.97 0.00 0.00 0.00 Soil Soil CONS USE 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 110. 115. 114. 107. 102. 101. 92. 0. 0. 0. 0. 7141 1593) ______-______

Land Preparation Saturation 18 18 15 51 (51) (51) Evaporation (10 days) 20 20 20' 60 (48) (48) Perc. it Black soils d 2.54 mm/day 8 8 10 26 (21) it Red s&oils 0 6.10 mm/day 20 20 20 60 (40) Flooding for Cultivation 25 38 38 101 (101) (101) Land Preparation Total Black Soils 71 84 84 239 Red Soils 84 97 94 275 Field Percolation Black Soils @ 2.54 mm/day 41 38 41 38 38 38 41 275 (220) Red Soils 6 6.10 mm/day 97 91 97 91 91 91 97 655 (439) Total Field Water Requirements Black Soils 71 234 236 143 145 140 140 132 1241 (1034) Red Soils 84 302 302 211 193 193 193 188 1666 (1272) Less T0%Chance Rsinfall 71 81 66 61 58 56 51 38 Effective Rainfall 61 74 61 58 53 53 51 38 449 (355) (355) Net Farm Irrig. Recm't. 0 Turnout Black Soils 10 160 175 97 91 86 89 94 802 (67 9) 85% Farm Irrig. Eff. 13 188 206 114 107 102 104 112 946 (798) Red Soils 23 229 239 152 140 140 142 150 1215 (917) 85% Farm Irrig. Eff. 28 269 282 180 165 165 168 175 1432 (1078)

Note: No irrigation in November co W1/With 20% reduction in consumptive use and reductions in percolation of 20% and 33% respectively for black and red soils. Un

e x N)Sa (D.H ANNEX 5 INDTA Table I. ANDHRAPRADESH IRRIGATION AND CAD COMPOS'ITEPROJECT Page 3

CROP WATER REQUIREMENTS BY mONTH AND PERIOD (MM) GROUNDKUTS(KEARIF)

JAN FES MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 a 9 10 I11 12 13 14 15 16 17 18 19 20 21 22 23 24

E-ST.RAIN 0, 5, as Iris 38, 84. 152. 127. 140, 90, 33, 8, PAN EVAP 82. 89, 97, 113. 136, 150. 155, 162, 170, 164. 145, 128. 115, 108. 108. 102, 91. 84. 83, 80, 75, 73. 73. 76.

CROP FACT- 0.00 0,00 0,00 0,00 0,00 0,00 0,00 0.00 0,00 0,00 0.00 0.00 0,00 0.31 0.37 0.56 0.76 0,90 0.96 0,92 0,81 0.64 0 .0 0 0 ,0 0 CONS USE .1/ 0. Os0,0 0, 0, 0. 0. 0, 0,9, 0 0 , 0., 0, 34, 40. 57. 69. 76. 80, 74, 61. 47. 0. 0. EFF RAIN 3/ 0. t o0. 0. 0, 0,0. 0,0, 0, 0 0. 0. 0. 34, 40. 42. 46. 45, 37. 28. 18. 10. 0. 0. OTM REG A/ 0, o 0. 0, 0, 0. 0. 0. 0. 0, o0 0.0, 0. 0, 0,0 0. 0. 0 0. 0. 0. 0. 0. TRR REQ 5/1 0.Z.o. o o0. o. 0 . 0 , 0 . 0 0 . 1. 2, 3. '2 5, 43, 37. 0, 0, Farm Irrg ragal0. .6/ 65% Ef'fic. 23. 34~. 48 '65. 69 66. 57.

TOTALS (MM) CONS USE a 537. EFF RAIN a 301, IRR REQ a 236.

Farmt Irrig. Reqsi't.S T.O. 65% MMTi.- 363.

Note: Discrepanciesin computer printout due to rounding.

1/ Crop factor 2/ Consumptiveuse OD3/ effectiverainfall. 4/ other requirements 1)5/ Irrigationrequirement 6/ Turn out ANNEX 5 Table 1 Page 4 INDIA ANDHRAPRADESH IRRIGATION AND CAD CoMPOSITE PROJECT

CROP WATER REQUIREMENTS BY MONTH AND PERIOO (Mm) GROUNDNUTS (RABI)

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 EST.RAIN 0. 5, 8, IS, 38, 84, 152. 127. 140. 90, 33. 8, PAN EVAP 82. 89, 97. 113. 136, 19o. 15S. 162, 170, 164. 145, 128. 115, 108, 108. 102. 91, 84. 83, 80. 75, 73. 73, 78.

GRNUtS CROP FACT 0.37 0,56 0.76 0,90 0,96 0,92 0.81 0,64 0.00 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.31 CONS USE 31. SO. 74. 102, 130, 138. 126, 104. 0, 0, 0, 0. 0. 0, O, 0, 0, 0. 0. O. 0, O. 0, 24. EFF RAIN 1, O0 t. 2. 3. 5. 6, 8. O 0. 0, o0 0, 0, 0. 0. 0, O0 0. 0. 0. O 0. 2. UTH REQ 0, 0. 0, 0, 0, o, o0 0. 0, o, 0, 00 0. 0. 0, o. 0, 0. 0. 0, 0. 0,

IRR REO O. 49, 73S. 10. IZ7. 130. 120. 96, 0, o, 0. o. 0. 0, o, 0, 0, 0 °.0, . 0, 0, 0, 22.

Farm Irrig. Reqz't.0 T.O. 65% Effic. 46. 75. 112. 154. 195. 206. 185. 148. 34.

TOTALS (MM) CONS USE a 776. EFF RAIN : 27, ?RR REQ = 7S1.

Farm Irrig. Reqm't. @ T.O. 65% Effic. - 1155.

Note: Discrepanciesin computer co printout due to rounding.

IH UI ANNMX 5 Table I Page 5 INDIA ANDHRAPRADESH IRRIGATION AND CAD COMpOSITEPROJECT

CROP WATER REQUIREMENTS BY MONTH AND PERIOD (MM) CHILLIES (EiARF) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 8 9 tO 11 12 13 14 19 16 17 18 19 20 21 22 23 24 ZST.RAIN 0 iS, a, 15. s8, 84, 152. 127. 140. 90, 33. 8. PAN EVAP 82. 89. 97, 113. 136. tSo. 15S. 162. 170. 164, 145, 128, 115, 108, 108. 102. 91. 84. 83. 80. 75. 73, 73. 76, CHILLY CROP FACT 0.00 0.00 0,00 0.00 0,00 o,oo 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,23 0.29 0,42 0,77 1.02 1.08 1.04 0,93 0.74 0,51 CONS USE 0., O , 0, 0 ij. 0, 0. 0 , 0. 0, 0, o. 0, 24. 25. 38, 85, 84, 86, 78. 67. 54. 39. EFF RAIN 0, o, 0. 0, A, o. 0. o0 0, . o0. o, 0. 0, 24, 25. 38, 42. 37, 30. 19. 11, 5. 2. OTH REG 0. 0. 0 00, o0, . o. 0, 0, o, 0, 0, o. 0. 0. 0. 0, 0. 0, 0. 0. 0. 0, 0.

IRR REQ 0. 0. , 0, 0, 0 0 0 . 0. 0, o, 23, 47, 56, 59, S7, 49, 37, Fam Irrig. Requ't.0 T.. 65 Wffic. 35. 72. 86. 91. 88. 75. 57.

TOTALS (MM) CONS USE s 560. EFF RAIN a 233. IRR REQ a 327, Farm Irrig. Re u't. S T.O. 65E Effic.- 503.

Note: Discrepanciesin computer printout due to rounding. 0

CO Lm~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~jI ANNEX 5 Table Page 6 INDIA

ANDHRA PRADESH IRRIGATION AN~DCAD COMPOSITE PROJECT

CROP WATER REQUIREMENTS COTTON B~~ MONTH~~~~~~~y AND PERIOD (MM)

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

EST.RAIN 0. 5. 8. 115. 38, 84, 152. 127. 140. 90.a 33, s. PAN EVAP 82. 89. 97. 113. 136. 150. 159, 162. 170. 164. 145. 128. 115. 108, 108. 1o2. 91. 84, 83. 80. 75. 73. 73. 76.

CROP FACT 0.68 0.49 0.00 0,00 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0,24 0.29 0.55 0,86 1.03 1.08 1.05 0.99 0.86 CONS USE 56. 44, 0. 0, 0. a. 0. 0. 0. 0. 0. 0,0 0. 0. 24. 24. 26. 47. 71. 82. 81. 77. 72. 66. EFF RAIN 1. 0.4 0. 0 0, 0 . 0. 0. 0. 0.o 0. 0. o 0. 0 24. 24. 26. £0 . 36. 29. 19. II* S. 2. 0TH REG 0. 0. 0, 0, 0. 0. 0, 0. 0, 0. 0. 0. 0. 0, 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. IRRREQ ~~~55.44, 0 , 0 . , 0 . 0 , . O . 0 . 0. 7 3. 53. 62 6.67 64

Farm Irrig. Hequ't. S T.O. . 82. 65% EFfic. 55 95. 102. 103. 98.

TOTALS (MM) CONS USE z 669. EFF RAIN a 217. IRR REQ 453.

Farm IrTig. Requ't.O T.O. 65% Effie.= 697

Note: 00O~~~~~ DiBcrepanciea incomputer~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 "O~ ~ ~Discrepancies ~ ~ ~ in computer~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ printout due to rounding. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~a ANNEX 5 Table 1 Page 7 INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

CROP WATER REQUIREMENTS BY MONTH AND PERIOD (MM) SORGHUM (Plant Crop).

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

T RAIN * 0, 5, 8. IS, 38. 84, 152, 127. 140, 90. 33, 8. PN EVAPl, 82. 89. 97, 113, 136. 15o, 155S 162, 170. 164. 145, 128. 115. 108, 108. 102. 91, 84. 83, 80, 75. 73, 73, 7b,

SORPLT CROP FACT 0.00 0.00 0,00 0,00 0,00 0,00 0.00 0,00 0,00 0,00 0.00 0,00 0.00 0,31 0,67 0,91 1.00 0,96 0,77 0,39 0,00 0,00 0,00 0.00 CONS USE 0, 0. n. 0, 0, 0. o, 0, o. 0, 0, 0o 0. 34, 72. 93, 91. 81. 64, 31. 0, 0. 0. 0. EFF RAIN 0, 0. 0, 0, O.0. 0. 0. 0. 0, 0, 0. 0. 34, 45. 48. 50, 46, 35. 25. 0. O. 0. 0. OTH REQ 0, 0 , o, 0, 0 0. 0, , 0. 0. 0,. 0. 0, 0. 0, 0, 0, 0. 0. 0, 0. 0, 0.

IRR REQ 0, 0. 0, 0, 0, O, 0, 0, 0, 0, 0, 0, 0. 0, 27. 46. 40. 35. 29, 6. 0, 0. 0, 0,

Farm Irrig. Reqm't. * T.O. 65% Effic. 42. 71. 62. 5h. h5. 9.

TOTALS (MM) CONS USE 466. EFF RAIN z 283, IRR REG a 183.

Farm Irrig. Reqn't. @ T.O. 65% Effic.=282

Note: Discrepanciesin computer printout due to rounding.

0 J J ANNEX 5 Tablel INDIA Page 8

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

CROP WATER REQUIREMENTS

SORGHUM (Ratoon crop). BY MONTH AND PERIOD (MM)

JAN FES MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

EST-RAIN 0, S,8, 15, 38, 84, 1S2. 127. 140. 90, 33, 8. PAN EVAP 82, 89, 97. 113, 136. 1S9). 159. 162. 170, 164. 145, 128. II. 108. 108. 102. 91, 84, 83, 80. 75, 73. 73, 76.

SORRAT CROP FACT 0.46 0,00 0,00 0.00 0,00 0,00 0.00 0.00 0.00 0.00 0.00 0,00 0.00 0,00 0.00 0.00 0,00 0.00 0.00 0.00 0,36 0,84 1.00 0.91 CONS USE 38, O 0, 0. 0, n. 0. 0. 0, 0, o0 0. 0. o, 0. 0. 0. 0. 0. 0. 27. 61. 73. 70. EFF RAIN 1. o. 0, 0, 0, n. 0, 0. 0. o, 0. . 0, 0.. 0 o, .o 0. 0. 15. 10. 5, 2. OTH REG 0, 0. 0, 0. 0, 0, 0, 0, 0, 0. 0. 0, 0.Ol 0, 0. 0, 0 0. 0. 0, 0.

IRR REQ 37.0 0, 0, O. 0. 0, 0. 0, 0, 0o 0. 0, 0, o0 0, 0, 0, 0, 0. 12. 52. 67.

Farm Irrig. Reqmtt. O T.O. 65% Effic.57. 18. 80. 105. 103.

TOTALS (NM) CONS USE * 269. EFF RAIN a 32. IRR REG * 236.

Farm Irrig. Reqm't. * T.O. 65% = 363 |

Note: Discrepancies in computer 10 printout due to rounding. ANNEX 5 Table 1 Page 9 INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

CROP WATER REQUIREMENTS By MONTH AND PERIOD (MM) PULSES AND OILSEEDS (1Kharif)

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC I 2 3 4 S 6 7 8 9 to 11 12 13 14 15 16 17 18 19 20 21 22 23 24 EST RAIN 0. 5. 8, t5. 38, 84. 152, 127. 140. 90, 33, 8. PAN EVAP 82. 89. 97, t13. 1386 15o, 155. 162, 170. 164. 145. 128. 115 108. 10R, 102. 91. 84. 83, 80. 75, 73. 73. 76. PULOIL CROP FACT 0.00 0.00 0.00 0.00 0,00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0.12 0.34 0.53 0.67 0.78 0.86 0,89 0.84 0.62 0.22 0.00 0.00 CONS USE 0. 0. 0. 0. 0. O, 0, 0. 0, 0. 0. 0. 14. 37. 57. 69. 71. 72. 74. 67. 46. 16. 0. 0. EFF RAIN 0. O. 0, 0 0, 0. 0, 0, 0 , O. 0. 14. 17, 43} 44. 47, 44, 37. 27. i7. 9. 0. 0. OTH RFQ 0. 0. 0, 0o 0. Os U. 0, 0, 0, 0, 0, 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.

IRR REQ 0. 0. 0, 0. .n o. 0, 0, 0, 00. . o0. 0 0. 15. 24. 24. 28. 37, 40. 30. 7. 0. 0.

Farm Irrig. Reqm't. * T.O. 65% Effic. 23. 37. 37. 43. 57. 62. 46. 11.

TOTALS (MM) CONS USE a 524. EFF RAIN = 319. IRR REQ a 20S.

Farm Irrig. Reqm't. * T.O. 65% Effic. = 3i5.

Note: Discrepancies in computer xO printout due to rounding. ANNEX5 Table I INDIA Page 10

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

CROP WATERREQUIREHNTS Br MONTHAND PERIOD (NM) PULSES AND OILSEEDS (Rabi) JAN FEB MAR APR MAY JUN JULL AU SEP OCT NOV DEC TOTAL 1 2 3 4 5 6 7 8 9 10 1 12. 13 14 15 16 17 18 19 20 21 22 23 24 EST RAIN 0. 5. 8. 15. 38. 84. 152. 127. 140. 90. 33. 8. PAN EVAFf 82. 89. 97. 113. 136. 150. 155. 162. 170. 164. 145. 128. 115. 118. 108. 102. 91. 84. 83. 80. 75. 73. 73i 76. PULOIL CROP FACT O.8f 0.90 0.84 0.46 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.27 0.53 0.70 CONS USE 69. 80. 79. 51. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 18. 38. 53. 388 EFF RAIN 0. 0. 0O. . . . .0. .0.0. . 0. .0. 0. 0. 0. 0 0. 0 5- 3- 0 8

IRR REQ 69. 80. 79. 51. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. 13. 35. 53

Farm Irrig. Reqalt. @ T.O. 65% Effic. 106. 123. 122. 78. 20. 54. 82

TOTALS (MM) CONS USE - 388 EFF RAIN = 8 IRR RZQ = 380

Farm Irrig. Reqm't. 0 T.O. 65% Effic = 585

Note: Discrepancies in computer printout due to rounding.

o u, ANNEX 5 Table 1 INDIA Page 11 ANDHRAPRADESH IRRIGATION AND CAD)COMPOSITE PROJECT

CROP WATFR REQUIREMENTS BY MONTH AND PERIOD (MM) PEARL MILLET (RABI)

JAN FEB MAR. APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 6 7 8 9 10 it 12 13 14 15 16 17 18 19 20 21 22 23 24 EST RAIN 0. S. 8. 15 so. 814, 152. 127. 140. 90. 33. an PAN EVAP 82. 89. 97. t13. 136, t5o. 1595 162. 170. 164. 145, 128, 115. 108. 108. 102. 91. 84. 83. 80. 75. 73. 73. 76. P MILL CROP FACT 0.00 0.00 0.33 0.74 0.98 0.99 0.83 0.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0,00 0.00 ,00.00 0.00 0.00 0 .000.00 oo CONS USE 0. 0. 32. 814. 133. 149. 129. 67. 0, 0, 0. 0. 0. 0. 0. 0. 0. 0, 0. 0. 0, 0. 0. 0, EFF RAIN 0, 0. 1. 2. 3. 4. 6. 8. 0. 0. 0. 0. 0. 0 0. 0. o 0, 0. 0. 0. 0. 0. 0. 0, OTH REG 0. 0, 0. 0, 0, ii, 0. 0, 0. 0.l 0. 0, o 0. 0. 0 0, 0, 0, 0. 0, 0. 0. 0. 0, IRRRZFQ , J.IG323, i44. 123, 60. 0.e 0 0, 0,-0. 0, 0. 0.- 0. 0,- 0, 0.- -0. 0. -0. 0,

Farm Irrig. Reqm't.* T.O. 65%Effic. 149. 126. 200. 222. 189. 92.

TOTALS (MM) CONS USE 595, EFF RAIN a- IRR REGQ 96q, Fani Irrig. Reqm't. 0 T.O. 65% Effic.- 875

Note: Discrepanciesin computer printout due to rounding. 3: cg ( mi-r ANNEX 5 Table I Page 12 INDIA ANDHRAPRADESH IRRIGATION AND CAD C(POMSITE PROJECT

CROP HATER REQUIREMENTS BY MONTH AND PERIOD (MM) MINOR MILLETS (KHARIF) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1 2 3 4 5 7 a 9 10 it 12 13 14 15s 16 17 18 19 20 21 22 23 24

EST. RAIN 0. S. 8. 15. 36. 84. 152. 127. 140. 90, 33, as PAN EVAP 82. 69, 97. 115. 136. 1So. 155, 162. 170, 164. 145. 128. 115. 108, 106. 102. 91, 84, 83. 80. 75. 73. 73, 76.

CROP FACT 0.00 .000 .000 .00 0.000.00 0.00 0.00 0.00 0 .000 .000 Olo0.12.00 0.25 0.41 0.57 0.73 0,87 0.88 0.51 0,00 0.00 0.00 0.00 CONS USE 0. 0. 0. 0. 0, 0. 0. 0. 0. 0. 0. 0. 14. 28, 45, 58. 66. 73. 73, 41. 0. 0. 0. 0. EFF RAIN 0. 0. on 0, 0, 0. 0. 0. 0. 0. 0. O0. 14. 28, 41. 43. 46, 44. 35. 26. 0* 0, 0, 0. 0TH REG 0. 0. Os 0, 0. Os 0. 0. 0. 0s 0* 0l O. 0. 0, 0 0, 0, 0, 0. 0. 0, 0. 0. 0.

IRR REQ 0. , 0 . , 0 0. 0. 0. 0.0, 0 0. 0 4. 16, 20W 9 38. 15 . . 0, 0. Farm Irrig. Roeqm'[email protected]. 65%Effic. 0. 0. 6. 25. 31. -45. 58. 23.

TOTALS (MM) CONS USE a 3597, EFF RAIN a 276. IRR REQ a 122.

Farm Irrig. Req.'[email protected]. 65%Eff'ic.- 188.

Note: Diacrepancies in computer printoutdue to rounaing.

Ln ANNEX 5 INDIA Table I Page 13

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

GROP WATER RBQUIREMENTS BY MONTH AND PERIOD (MM)

SUGAR CANE JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

EST RAIN 0. 5. 8. 15. 38. 84. 152. 127. 140. 90. 33. 8. PAN EVAP 82. 89. 97. 113. 136. 150. 155. 162. 170. 164. 145. 128. 115. 108. .08. 102. 91. 84. 83. 80. 75. 73. 73. 76.

SUGAR CROP PACT 0.77 0.82 o.87 0.90 0.94 0.98 1.00 1.00 1.00 o.96 0.91 0.87 ,.83 0.79 0.75 0.70 0.58 0.52 0.52 0.57 0.61 0.65 0.69 0.74 CONS USE 64. 74. 81. 99. 135. 150. 155. 160. 175. 165. 140. 112. 91. 84. 81. 74. 51. 43. 43. 46. 46. 46. 48. 56. 2219 EFF RAIN 0. 0. 0. 0. 0. 3. 3. 8. 10. 15. 20. 38. 46. 51. 46. 41. 36. 36. 30. 25. 15. 5. 3. 0. 431 ------

IR REq 64. 74. 81. 99. 135. 147. 152. 152. 165. 150. 120. 74 45. 33. 35. 33. 15. 7. 13. 21. 31. 41. 45. 56. 1788

Farm Irrig. Reqn't. e T.O. 65% Effic. 98. 114. 125. 152. 208. 226. 234. 234. 254. 231. 185. 114. 69. 51. 54. 51. 23. 11. 20. 32. 48. 63. 69. 86. 2751

TOTALS (HM) CONS USE = 2219 hFF RAIN 1431 IRR RE4 - 1788

Farm Irrig. Reqw't. OT.O. 65% Effic.- 2751

Note: Discrepancies in computer printout due to rounding.

'.0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~pl

m z o 0 ANIDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Iritiation Requirements at the Field Turnout By Crop, Nagariunasagar Project- (Inches of watIer p!er half mouth)

Rice sugarcan Chillies Minor millets Pearl millets Groundnuts Sorghum Cotton Puoo & oilseeds Rad Soils Black Soils Kbarif Rabi Kharif Rabi Kharif Rabi tha=if flabi

July 1 .6 .3 2.8-

ii 7.8 5.6 2.0 -

August I 11.0 8.0 2.2 - .2 1.71 -9 II 7.0 4.4 2.0 - 1.0 1.9 0.9 2.81 1.5 Septemiber 1 6.6 4.2 0.9 - 1.2 2.4 L.3 2.4 pp - 1.5 II 6.5 4.0 0.5 1.4 1.8 2.2 1.9 2.1 1.4 L.7 October I 6.6 4.1 0.8 2.8 2.3 2.0 2.6 1.8 j 2.2 2.3 II 7.0 4.4 1.2 3.4 0.9 0.5 2.7 O.A 322.4 November 1 1.8 3.6 2.6 0.71 3.7 i's II 2.5 3.5 2.3 3.2 4.0 .4 .8 Decemer I 2.8 3.0 4.1 f 4.1 2.2 II 3.4 2.2 1.4 4.1 3.9 3.2 January I 3.8 1.8 2.2J 3. 4.2 II 4.5 .7 3.0 2.7 5.0 February I 4.9 1.9 1.9 4.4 4.8 II 5.8 3.6 5.0 6.1 3.1 March I8.0 6.0 7.9 7.7 II ~~~~~~~~~~~~~~~8.9 7.9 8.7 8.1 April I 9.2 5.5 7.5 7.3 II 9.2 3.6 5.8

May I 10.0 II 9.1

June I 7.2

II 4.5

Total 53.1 35.0 108.0 19.9 7.4 25.6 9.0 34.6 14.3 45.6 (11.2) (14.3) 27.6 12.5 23.3 P R

Total (assuming reductions in 40.0 29.4 consumptiveuse and '.0 ~~~~percolation)

p Plant R - Ratoon ANVI 5 Table 3

INDI.A

ANhDhA PRADESN IRRIGATION AND CAD COMPOSITE PROJECT

Water Re-t.Naarunasaarih kn

Rice Groundnuts Chilli.. Cotton Sorghum Pulses & oil-eeds Minor Pearl Susar-ene Total Water Total Flow Red Soils aBlak Soils Kharif Rabi Plant RAtooc nilleto milletn Rsire-ents Field -D- 6/ A.ea (anrea) 137,700 243,200 95.100 105.700 116.300 126,00 222M000 222.000 95,100 10.500 95.100 10.000 ac-ft ThC compoted adoautedb/

July I 6,885 6,080 2,333 15,298 .67 510 3,510 5,400

II 89,505 113,493 1,667 204,665 8,920 6,396 6,396 9,840

Augost 1 126,225 162,133 31,4501/ 7,133-1 1751/ 1,833 290,191 12.64 9,673 6,673 10,2h6

II 80,325 89,173 7,13312/ 51,8002/ 11,8881/ 8751/ 1,667 230,098 10.02 7,191 7,191 11,063

September I 75,735 85,120 1 0 , 3 0 3 2/ 44,400-/ 11,88a2! 1,054/ 750 228,196 9.94 7,607 7,607 11,703

II 74,588 81,067 15,0582/ 13,568 4,227 38,8502/ 13,4731/ 1,5751/ 417 227,775 9.92 7,593 7,593 11,682

October I 75,735 83,093 20,6051/ 27,137 23,247 33,3101/ 18,2281/ 2,0131/ 667 209,879 9.14 6,996 6,996 10,763

II 80,325 89,173 21,3981/ 32,952 33,813 7,4001/ 19,0201/ 7881/ 1,000 237,263 10.34 7,414 7,414 11,406

Noveebe 20,605 34,890 39,097 12,950 14,265 1,500 123,307 5.37 4,110 4,110 6,323

II 18,228 33,921 42,267 59,200 3,170 2,083 158,869 6.92 5,296 5,296 8,148

De-ember 1 29,075 43,323 75,850 2,333 150,581 6.56 5,019 5,019 7,722

1 12,332 21,322 41,210 75,850 2,833 153,547 6 .69 4,798 4,798 7,382

Janoary I 15,855 35,927 40,700 3,167 95,649 4.17 3,188 3,188 4,905

II 26,425 28,530 3,750 58,705 2.56 1,835 1,835 2,823

Febotacy I 38,757 15,058 4,083 57,898 2.52 2,068 2,068 3,182

II 53,731 39,625 4,833 98,189 4.28 3,507 3,507 5,395

Macnh 1 67,824 62,608 6,667 137,099 5.97 4,570 4,848 7,458

II 71,347 68,948 7,417 147,712 6.43 4,616 4,853 7,466

April I 64,301 59,438 7,667 131,406 5.72 4,380 4,580 7,046

II 51,088 28,530 7,667 87,285 3.80 2,910 3,027 4,657

May I 8,333 8,333 .36 278 - -

II 7,583 7,583 .33 237 -

Jane I 6,000 6,000 .26 200

II 3,500 3,500 .15 177 - _

Total 609,323 709,332 71,3273/ 401,660 192,865 291,641 135,050-/ 264,550 297,323_3/ NIL 274,207 89,750 3,069,028 133.694/k

Modified total1 463,085 602,932 ------Unchanged ------Z,816,390 122.68 *

Notet 1/ Not irrigated August-October. 2/ Canal capacity available for period shown. Total at dan 6! 205.68 3/ Water actually delivered t crop. Modified total 6/ 188.74 4/ Error doe to rounding. 3/ Inereaeieg the water deanad in Joly I and corroepondingly reducing in Agset I. Alan, delivering the May-June water require_ete of sugarcane into storage tanks within the coreed area, in Mach-April. 6/ A-seieg a conveyance efficienoy of 65%. 7/ Aas-asiag 20% reduction in the consunptive use of rice ple a 20% And 33% reduction in percolation loeaea for black and red aoils, reapectively. AMEX4

INDIA

ANDHRAPRADEH IRRIGATIONAIM1 CAD COI4OSITE PROJECT Water Reonire,snts, Nagar umaga! L,t Beek Command

Rice Grorndnuts - hillies Cotton Sor&hue pulses & Oilseed. Minor Pearl Sugarcane Totel Water Total Plo. ,.Rcd Black Rai Rbi. Plan R,toon Kharif Rabi millets Tillers RsiesnsFedDs Area. (acres) 2.0 'O.0 4.90 1230 4.0 DO30 'O,80 70.6'00 132.0 4410 880 1580 8,800 a-t TC csu. d.ee5

July I 13,670 3,087 2.053 It,I10 .82 627 4,627 7.118

1I 177.710 57.633 1/1.467 236.810 10.32 7,400 7,400 11,385 August 1 250,617 82,333 14,988 10,040 147 1,613 334,563 14.57 11,152 7,152 11,003

II 159,483 45,283 11,2421/24,687 16.550 733 1,467 242,162 10.55 7.567 1,567 11,642 September 1 150,370 43,225 18,2397 21,160 16.550 880 660 215.415 9.38 7.181 7,181 11,048 II 148,092 41,167 23,734 5,145 1,177 18,5151/18.757 1.320 367 195,948 8.54 6,532 6,532 10,049 October 1 150,370 42,196 32,4787 10,290 6.472 15,970 25,377 1,687 587 209,915 9.14 6.997 6,997 10,765 II 159,483 45,283 28,731 12,495 9,413 3,5271/26,480V 660V 880 227,554 9.91 7,111 7,111 10.940

Novesber I 32,478 13,230 10,884 4.118 19,860 1.320 81.890 3.57 2,730 2,730 4,200

II 28,731 12,863 11,767 18,827 4,413 2,940 1,833 81,574 3.54 2,712 2,112 4,172 Decaeber I 11,025 12,061 24,122 8,085 3,,053 57,346 2.58 1,912 1,913 2,942

II 15,435 8,085 11,472 24,122 11,760 2,493 73.367 3.70 2,293 2,293 5,528 January I 19,845 10,002 12,943 15,435 2,787 61,012 2.66 2,034 2.034 3,129

1I 33,073 7,942 18,375 5,300 62,692 2.75 1,959 1,959 3,014

February 1 48.510 17,640 16,752 3,593 86,495 3.77 3,089 3,089 4.752

II 67,253 11,393 44.083 4,253 126,982 5.53 4,535 4,535 6,977 March I 84,893 69,652 5,887 160,412 6.99 5,347 5,591 8,602

II 89,303 76.705 6,527 172,535 7.52 5.392 5,602 8.618 April I 80,483 66,125 6,747 153,355 6.68 5.112 5.288 8.135

II 63,945 31,740 6,747 102,432 4.46 3,814 f~,524 5,422

May I 7.333 7,333 .32 244 - - II 6,673 6,673 .29 209-

June I 5,280 5,280 .23 176 -

II 3,300 3.300 .14 110-

Total 1,209,795 360,207 72,451 502,742 73,133 81,190 45,847 84,132 24,273 85,628 NIL 305,057 79,200 2,923.655 127.354

Moodifiedtotal-6 l 919,444------306,176----Uchngd19 ------2,579,273------112.35311.3 Notes: L/ Not irrigatedAugust-October. Toa t 6/ 2/ Canal capacity available for period ohown. Modified total at dam- 172.85 I/ Water actually delivered to crop. 4/ Error due to rounding. 5/Increasing the water demand io July I and correspondingly reducing i. Augs.t I. Also, delivering the May-June water requirements of xugar.ane into storage tanks within the coosand area, in March-April, 6/Assuming a conveyance efficiency of 65%. 7/ Assuming 20% reduction in the con5uTtive use of rice plus a 20% and 33% reduction in percolation losses for black and red soils, respectively. ANNEX 6 INDIA Table 1

ANDBRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Cost Estimates

Foreign Local Foreign Total Local Foreign Totnl Exchange ---- (----(Rs'000) ------(US$'D00)I/ ------%

1. NSP Right Canal Network Infrastructure Main Canal Earthwork 79,000 33,900 112,900 8,770 3,770 12,540 30 Main Canal Structures 16,400 9,100 25,500 1,820 1,010 2,830 36 Branch Canals 68,100 17,000 85,100 7,570 1,890 9,460 20 Distribution Systems 70,200 12,300 82,500 7,800 1,370 9,170 15 Right Bank Drainage System 88.000 22,000 110,000 9,780 2,440 12,220 20

Sub-Total 321,700 94,300 416,000 35,740 10,480 46,220 23 2/ Allowance for Actual Cost Level 87J 25,500 7,500 33,000 2,840 830 3,670 23 Contingencies 20% 69,800 20,200 90,000 7,750 2,250 10,000 23 Engineering, Supervision & Admin.20% 1089000 - 108,000 12,000 - 12,000 0 Sub-Total 525,000 122,000 647,000 58,330 13,560 71,890 19 2. NSP Left Canal Network Infrastructure Main Canal Earthwork 98,300 42,400 140,700 10,920 4,710 15,630 30 Main Canal Structures 52,400 28,000 80,400 5,820 3,110 8,930 35 Branch Canals 58,600 10,800 69,400 6,510 1,200 7,710 16 Distribution Systems 61.900 11,000 72,900 6,880 1,220 8,100 15 Left Bank Drainage System 149,600 37,000 186,600 16,620 4,110 20,730 20 Sub-Total 420,800 129,200 550,000 46,750 14,350 61,100 23 Allowance for Actual Cost Level 87%- 33,700 10,300 44,000 3,750 1,150 4,900 23 Contingencies 20% 90,500 28,500 119,000 10,050 3,170 13,220 24 Engineering, Supervision & Admin. 202 143,000 - 143,000 15,890 - 15.890 0 Sub-Total 688,000 168,000 856,000 76,440 18,670 95,110 20

3. Operation & Maintenance Equipment 22,050 67,500 89,550 2,450 7,500 9,950 79

4. NSP Road Program Rehabilitation of Existing WBM Roads 15,300 3,600 18,900 1,700 400 2,100 19 Improvement of Earth Roads 28,800 5,000 33,800 3,200 550 3,750 15 Construction of New Roads 53,000 10,800 63,800 5,890 1,200 7,090 17 Sub-Total 97,100 19,400 116,500 10,790 2,150 12,940 17 Contingencies 15% 14,600 2,900 17,500 1,620 320 1,940 17 Engineering, Supervision & Admin. 16,000 - 16,000 1,780 - 1,780 0 Sub-Total 127,700 22,300 150,000 14,190 2,470 16,660 15 5. Road Construction Equipment 9,000 4,500 13,500 1000 500 1,500 33

6. Command Area Development Pochampad Project (33,600 ha) 40,500 9,900 50,400 4,500 1,100 5,600 20 NSP Right Bank (16,000 ha) 18,600 5,400 24,000 2,070 600 2,670 23 NSP Left Bank (16,000 ha) 18,600 5,400 24,000 2,070 600 2,670 23 Tungabhadra HLC (6,400 ha) 7,800 1,800 9,600 860 200 1,060 19 Sub-Total 85,500 22,500 108,000 9,500 2,500 12,000 21 Engineering, Supervision & Admin. 45,000 - 45,000 5,000 - 5,000 0 Sub-Total 130,500 22,500 153,000 14,500 2,500 17,000 15 7. CAD Equipment 5,400 1,800 7,200 600 200 800 25 8. Extension Services 18,500 2,800 21,300 2,060 310 2,370 13 9. Extension Service Vehicles 2,250 900 3,150 250 100 350 29 10. Monitoring Project Performance a) NSP Irrigation System Study Gauging Stations 17,000 450 17,450 1,890 50 1,940 3 Measuring Equipment 450 8,900 9,350 50 990 1,040 95 Model Monitoring Program 2,800 800 3,600 310 90 400 23 Sub-Total 20,250 10,150 30,400 2,250 1,130 3,380 33 b) Modernization Studies & Plans 1,900 350 2,250 210 40 250 16 c) Monitoring Project Benefits 6,100 1.100 7.200 680 120 800 15 Sub-Total 28,250 11,600 39,850 3,140 1,290 4,430 29

11. GOI, Project Preparation and Evaluation - 450 450 - 50 50 0 Group

SUB-TOTAL PROJECT COSTS 1,556,650 424,350 1,981,000 172,960 47,150 220,110 21

Expected Price Increases3/ 540,350 151,650 692.000 60,040 16,850 76,89 22 TOTAL PROJECT COST 2.097.000 57.000 2,673,000 23.00 297.000 22

1/ Indian Rupees 9.00 = US$1.00. 2/ Cost allowance to increase Engineers Cost Estimates to revailing contractor bid prices. 3/ Based on Annex 6 Table 7.

100 AiJNEg 6 Table 2 INDIA ANDHRAP3A1~ES{ IRRIGATI-ONUAD- CAD COI'4OSITE PP.ThTC.T NAGARJUNASAGARPROJECT RIGHT CANALNET.RIC INFBASTPUCTUTRE Cost Estimate-/ Local Foreign Total -L.______(Rupee s '000) ------

1. Right Canal Earthwork (a) Mile 86/0 to 88/0 5,500 2,400 7,900 (b) Mile 94/0 to 99/6 16,500 7,000 23,500 (c) Mile 100/3 to 105/6 15,600 6,700 22,300 (d) Mile 108/3 to 121/7 34,700 15,000 49,700 (e) Mile 124/0 to 126/0 6,700 2800 9,500 Sub-Total 79,000 33,900 112,900

2. Right Canal StructuresMile 86/0 to 110/0 (a) Bridges (8) 2,500 1,600 4,100 (b) Regulators (48/0, 101/7,110/0)(3) 3,600 2,000 5,600 (c) Off Take Sluices (Turnouts) (15) 300 100 400 Sub-Total 6,400 3,700 10,100

3. Right Canal StructuresMile 110/0 to 126/0 (33) 10,000 5,400 15,400 4. Pamidipadu Branch Canal 5,600 1,400 7,000 5. Darsi Branch Canal 35,500 9,000 44,500 6. Ongole Branch Canal 27,000 6,600 33,600 7. Irrigation Distribution Systems (a) Block 15 Irri,.System(26,560 Ac) 6,800 1,200 8,ooo (b) Block 16 " " ( 5,640 Ac) 1,200 200 1,400 (c) Block 17 " " (11,010 Ac) 3,600 600 4,200 (d) Block 18 " " (18,000Ac) 2,900 500 3,400 (e) Block 19 " " (60,520 Ac) 15,300 2,700 18,000 (f) Block 20 ' ( 7,170 .Ac) 1,800 300 2,100 (g) Block 21 " " (19,560 Ac) 7,000 1,100 8,100 (h) Block 22 " " (168,610 Ac) 31,600 5,700 37,300 Sub-Total 70,200 12,300 82,500

8. Right Bank Drainage System (347,100Ac) 88,000 22,000 110,000 Right Canal Infrastructure Total 321,700 94,300 416,ooo Cost Increase above Engineers Estimates (8%) 25,500 7,500 33,000 Contingencies(20%) 69,800 20,200 90,000 EngineeringSupervision & Administration (20%) 108,000 - 108,000

Total 525,000 122,000 647,000

Cost per hectare (140,000 ha) us $462.00

1/ Jan 1976 Lost Level

101. ANNEX 6 Table 3

INDIA ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT NAGARJUNTSAGARPROJECT LEFT CANALNETWORK INFRASTRUCTURE

Cost Estimate_/

Local Foreign Total -- (Rupees '000)---

1. Main Branch Canal Deep Cut (M5/4+052) 17,600 7,600 25,200 2. Main Branch Canal Earthwork (a) Mile 10/6 to 19/0 12,600 5,400 18,000 (b) Mile 19/0 to 47/3 35,100 15,000 50,100 (c) Mile 47/3 to 76/0 33 000 14 400 47 400 Sub-Total 34,b , 3. Left Canal Regulators (M 11/0 & 34/0) 2,300 1,300 3,600 4. Main Branch Canal Structures (a) Aqueducts (8) 11,800 6,300 18,100 (b) Under Tunnels (44) 28,200 15,000 43,200 (c) Siphons & Superpassages (13) 3,000 1,500 4,500 (d) Bridges (28) 2,400 1,400 3,800 (e) Regulators (M 8/6,19/4,43/5& 76/o) 4,300 2,300 6,600 (f) Off Takes & Sluices (Turnout) (42) 400 200 600 Sub-Total 50,100 26,700 76,800

5. Bonakal Branch Canal 29,000 5,400 34,400 6. Madhira Branch Canal 10,200 2,000 12,200 7. Nuzividu & Mylavaram Branch Canal 19,400 3,400 22,800 8. Irrigation Distribution Systems (a) Block 20 (98,280 ac)W/O Bonakal Canal 3,700 600 4,300 (b) Blocks 21/1-21/6 (1'5,420 Ac) 19,000 3,500 22,500 (c) Blocks 21/7-2110 (2:Ll,OOOAc) 32,600 5,700 38,300 (d) Block 21/11 (37,000 Ac) 6,600 1.200 7,800 Sub-Total 61,900 11,000 72,900

9. Left Bank Drainage System (471,700 Ac) 149,600 37,000 186,600

Left Canal InfrastructureTotal 420,800 129,200 550,000

Cost Increase above Engineers Estimates (8%) 33,700 10,300 44,000 Contingencies (20%) 90,500 28,500 119,000 Engineering,Supervision & Administration (20%) 143,000 - 1432000

Total 688,000 168,000 856,ooo

Cost per hectare (191,000 ha' US $U448.00

11 Jan 1976 Cost Level 102 ANNEX

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COKPOSITE PROJECT

Monitoring ProjectPerformance

Cost Estimate Local Foreign Total …(US$ 'O000) 1. NSP IrrigationSystem Study

a. Gaging Stations(730) Site preparation 1,080 15 1,095 Well installation 360 5 365 Piping,fittings, etc. 55 20 75 Sub-Total i,495 40 1,535

Contingencies15% 224 6 230 Engineering& Supervision10% 171 4 175 Sub-Total l 914 b. MeasuringEquipment DigitalRecorder, complete (1000 units)@800 20 780 800 ICB DigitalRecorder, spares (50 units) - 40 4h ICB Translatorw/Time & Data Consol (key punch) - 10 10 ICB Streamflow meters and equipment 30 - 30 ICB Sub-Total -0- 0 Bo ICB

Spare parts 15% 0 130 130 ICB Insurance and freight 0 30 30 ICB Sub-Total 0 70 ICB c. Water Measurement Program-. Program personnell/ 150 - 150 Consulting services (8 man-months) - 40 40 Vehicles & office equipment 3/ 120 4o 16 0 RP & LCB Model preparation & computer interfacing 40 10 50 Sub-Total 310 90 4oo

2. ModernizationStudies and Plans (lumpsum) 210 40 250 kincludingconsulting serviceq of six man months) 3. MonitoringProject Benefits- (lumpsum) 68O 120 800

Total ProgramCost 3,i4o 1,290 4,430

1/ 3 year MonitoringProgram 2/ Based on Annex 6, Table 5 103 i Based on Annex 7, Table 4 4/ 4 year MonitoringProgram ANNEX6 Table 5

IlDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Monitoring Project Performance NSP Irrigation System Study Personnel Cost E8timate Man Cost 21/Total Quantity Years Man Yr Cost --- (US$'ooo)---

Executive Engineer 1 3 2.1 6

Assistant Engineer 2 6 1.7 10

Junior Engineers 10 30 1.3 39

Hydrological Technicians 20 60 1.1 66 Office Staff 12 36 0.8 29

Total 150

1/ Includescosts of supplementarybenefits.

104 ANNEX6 Table 6 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Extension Services Cost Estimate

Extension Area NSP Left NSP Right Pochampad Tungabhadra Canal Canal Project H.L.Canal Total

------(Rs'OOO))- -e ------Area Covered ('000 ha) 35f7 475 103 95 1,030

1l Capital Costsa Office apace 550 320 270 300 1,1440 Housing 350 190 170 190 900 Extension equipment 300 230 100 150 780 Contingencies 15% 180 110 80 90 1460 Sub-Total 1,380 850 620 730 3,580

2. Salaries and Allowances Additional staff salaries 2,250 1,440 1,380 680 5,750 Plus special allowance (all staff) 1,130 1,230 700 400 3,1460 Contingencies -9 I4O0 100 130 1,020 Sub-Total 3,770 3,070 2,180 1,210 10,230

30 Other Operational Costs Jeeps 420 410 290 240 1,360 Motorcycles 130 90 90 40 350 Bicycles 50 60 40 10 160 Maintenance& rents 1,200 170 300 290 1,960 Extensionactivities 600 500 150 150 11400 Trainingabroad 600 400 150 140 1,290 Sub-Total 3,000 1,630 1,020 870 6s520

Contingencies15% 450 240 150 130 970 Sub-Total 3s,450 1,870 1,170 1,000 7,1490

Total Extension Services Costs (Rs t000) 8 ,600 5,790 3,970 2,9940 21,300

Total Extension Services Costs (uS$'ooo) 960 640 440 330 2,370

1/ Not including costs of vehicles listed in )m = 6. l&.5. 105 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Expected Price Increses

Calendar Year 1976 1977 1978 1979 1980 1981 Total

1. Civil Works US$'000 19,970 42,o0o 44,400 40,200 36,000 18,000 200,660 Annual InflationRate % 9 12 12 12 10 10 ExpectedPrice IncreasesUS$'OO0 1,350 6,540 13,100 17,880 21,870 13,090 73,830

2. Equipment& Services US$1000 490 15,430 1,450 1,050 74n 290 20,340 Annual Inflation Rate % 9 8 8 8 7 7

Expected Price Increases US$'000 30 1,930 320 330 310 l1o 3,17.

Total US$000 20,460 57,520 45,850 41,250 36,740 18,290 220,110

ExpectedPrice IncreasesUS$1000 1,380 8,470 13,420 18,210 22,180 13,230 76,890

J/ Calculatedby canpounding the estimated rate of price increase in prior year(s) and one half the rate of increase in the year concerned.A rate of 9% was used for 1976 to reflect the much lower predicted inflation rate in India in that year for local costs. 0 0*' ANNEX7

INDIA

ANDHRAPRADESH IRRIGATION AND CADCCKPOSITE PROJECT

Equipment for Operation and Maintenance Unit Total Quantity Coat Cost Right lef t Dam Bank Bank Total -- (US$to000)_ 1. Maintenance Equipment Tractor,crawler 140 hp 1 3 3 7 72 504 ICB Tractor,crawler 75 hp 5 4 9 37 333 ICB Crane,crawler 25T 1 1 125 125 ICB Crane,wheeled 5T 1 2 2 5 60 300 ICB Excavator,crawler dragline 1 cu yd 5 4 9 110 990 ICB Backhoe,crawler 0.75 - 1 cu yd 1 1 2 90 180 ICB Loader,crawler 130 hp 2 cu yd 1 5 4 10 56 560 ICB Loader,wheeled 80 hp 1.5 cu yd 2 10 8 20 35 700 ICB Grader,motorized 125 hp 1 3 3 7 55 385 ICB Grader,motorized 60-75 hp, lightduty 10 8 18 27 486 ICB Scraper,elevating 150 hp 11 cu yd 2 2 4 70 280 ICB Roller, sheepsfoottowed 5 4 9 20 180 RP Roller,road lOT diesel 1 5 4 10 20 200 RP Truck, tractorw/25T trailer 1 2 2 5 55 275 ICB Truck, tractorw/12T trailer 1 5 4 10 35 350 ICB Truck,stake 6T 5 15 12 32 12 384 RP Truck, dump 6-8 cu yd 5 15 12 32 15 480 RP Truck.,water 8T 1 5 4 10 20 200 RP Truck,mobile lub shop 1 1 2 50 100 ICB Truck.,fuel 1 1 1 3 20 60 RP Truck, forklift 1 1 1 3 20 60 RP Tractor,industrial w/backhoe loader 5 4 9 25 225 RP Mixer, concrete10/7 cu ft 2 10 8 20 3 60 RP Vibrator,concrete 3 15 12 30 0.5 15 LCB Compressor,diesel 160 cfm 2 5 4 11 8 88 LCB Generator,portable 15 kw 5 4 9 8 72 LCB Launch 1 1 18 18 RP Misc. pumps & other equipment iS 1oo LCB Workshopequipment y LS/ 150 RP Communicationnet work y yS i' 250 ICB Photographic& other equipment 2 LLS 30 LCB Sub-Total 8,14o 2. ProjectManagement Automobiles 3 1 1 5 5 25 RP Jeep, wagon 4 x 4 3 5 4 12 8\ 96 RP Jeep, 4 x 4 12 20 16 48 6 288 RP Pickup,3/4T 4 x 4 2 5 4 11 8 88 RP Bus, mini 20 seat 1 18 18 RP

Sub-Total 5X5 Spares 15% 1,295 Total Cost Operation & Maintenance Equipment 9,950 y1_uomaon use 2/ Including office of Chief Engineer 107 ANNEX7 Table INDIA ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Road Construction Equipment

Items Quantity Unit Cost Total Cost ----- (US$ iooo)------

Roller, road 8/10T diesel 4O 20 800 RP

Truck, dump 6/8 cu yd diesel 6 15 90 RP

Truck, pickup 3/T Lx4 4 8 32 RP

Jeep, 4x4 (inspection) 26 6 156 RP

Mixer, concrete diesel 10/7 cu ft 30 3 90 RP

Vibrator, concrete gasoline 12 0.5 6 LCB

Equipment, vehicle workshop L.S. 60 LCB

Equipment, survey, materials testing and office L.S. 66 LCB

Sub-total 1,300

Spare parts 15% 200

Total cost of Road Equipment 1,500

108 ANNEX7 Table 3

INDIA

ANDHRAPRADESH IRRIGATION AND CAD CCMPOSITEPROJECT

Equipment for Command Area Development

Items Quantity Unit Total Cost Cost

1. Land Leveling Equipment

Cultivator 400 0.35 140 LCB

Disc plough 4O0 0.35 140 LCB

Multipurposeblade terracer 400 0.35 140 LCB

Pumps and piping Total L.S 40 LCB

Sub-Total 460

2. Vehicles for Supervision& Management

Automobile 10 5 50 Rp

Station wagon 4 7.5 30 RP

Pickup 3/4T 4 x 4 8 8 64 RP

Jeep 4 x 4 16 6 96 RP

Sub-Total 240

Spare parts 15% 100

Total Cost CAD Equipment 800

109 ANNEX7 Table 14

INDIA

ANDHRAPRADESH IRRIGATION AND CAD CaKPOSITE PROJECT

Vehicles & Office Equipment for NSP Monitoring Program

Unit Total Items ~~~~~~~QuantityCost Cost Items _ -(US$'OOO)-

1. Vehicles

Pickup, 3/4T 4 x 4 2 8 16 RP Jeep, wagon 4 x 4 4 8 32 RP Jeep, 4 x 4 10 6 60 RP

Sub-Total 108

2. Office Equipment IS 30 LCB

Spare parts 15% 22

Total Cost Vehicles & Office Equipment 16o

110 INDIA

ANDHRAPRADESH IRRIGATION AND CAD CCKPOSITE PROJECT

Extension Service Vehicles

Quantity NSP Left NSP Right Pochampad Tungabhadra Unit Total Canal Canal Project Project Total Cost Cost Itemns- -- -- (US$fooo)--

Jeeps, 4 x 4 17 17 11 6 51 6 306 Hp

Spare Parts 15% 46

Total Extension Services Vehicles Cost 350

F . ANNEX 7 Table 6 INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Equipment Cost Summary

Expected I'temized Spare Price Cost Parts Sub-total Increases Total _.______----- (US$V000)-

International Competitive Bidding Operation & maintenance equipment 5,818 872 6,690 Monitoring equipment 1,040 Sub-Total 7,730 940 8,670

Reserve Procurement Operation & maintenance equipment 2,532 378 2,910 Road construction equipment 1,168 177 1,345 CAD equipment 240 30 270 Monitoring equipment 108 17 125 Extension equipment 306 44 350

Sub-Total 5,000 610 5,610

Local Competitive Bidding Operation & maintenance equipment 305 45 350 Road construction equipment 132 23 155 CAD equipment 460 70 530 Monitoring equipment 30 5 35 Sub-Total 1,070 130 1,200

Total Cost 13,800 1,680 15,480

112 ANMTaX8 Table 1

INDIA ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT Schedule of EXpenditures

Total Bank Fiscal Year Item Cost 1977 1978 1979 1980 1981 ------(US $ Million)------

NSP Right Canal Network 49.9 11.0 9.7 9.7 9.8 9.7 NSP Left Canal Network 66.o 13.9 13.9 13.2 12.5 12.5

NSP Road Program 12.9 1.1 2.5 3.1 3.1 3.1

On-FarmDevelopment (CAD) 12.0 2.6 3.9 5.5 0 0 Sub-Total 140..8 28.6 30.0 31.5 25.4 25.3

PhysicalContingencies 25.1 5.2 5.2 5.0 4.9 4.8

ExpectedPrice Increases 61.4 3.2 7.9 13.5 16.1 20.7 Sub-Total 227.3 37.0 43.1 50.0 46.4 50.8

Vehicles & Equipment 13.8 10.0 3.8 0 0 0

ExpectedPrice Increases 1.7 1.1 o.6 0 0 0

Sub-Total 15.5 11.1 4.4 0 0 0

ExtensionServices 2.04 .4 0.4 0.4 0.6 0.6 MonitoringPrograms 3.3 0.8 1.3 1.0 0.1 0.1 Administration& Engineering 34.7 7.3 7.6 8.2 5.7 5.9

Sub-Total 40.4 8.5 9.3 9.6 6.4 6.6

ExpectedPrice Increases 13.8 o.8 2.0 3.4 3.3 4.3

Sub-Total 54.2 9.3 11.3 13.0 9.7 10.9

Total ProjectCost 297.0 57.4 58.8 63.0 56.1 61.7

113 ANNEX8 Table 2

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Proposed Allocation of the Loan

Proposed Allocation % of Expenditures Category of the Loan to be Financed (US$ Million equiv.)

(l) Civil Works

(a) NSP Canal Network 95.0 60% (b) NSP Gauging Stations 1.3 60% (c) NSP Road Program 11.0 60% (d) CAD 10.0 66%

(2) Equipment,Vehicles and Materials 1/

(a) NSP Operation and ) 100% of foreign ex- Maintenance 7.9 ) penditure for direct- ) ly imported goods ) (b) MonitoringEquipment 1.2 ) 100% of exfactory ) cost for locally (c) NSP Road Program 0.1 j manufacturedgoods ) (d) CAD Program o.4 ) 70% of cost for ) imported goods procured locally

(3) Consultancy Services 0.1 ) 100% of foreign (4) GOI, Project Prep. & Evaluation Group 0.05 ) expenditures (5) Unallocated 17.95 Total 1.0

/ Excluding materials financed under Category 1.

*114 ANNEX8 Table 3 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Estimated Schedule of Disbursements

Disbursements Bank Fiscal Year US $ Million Equivalent an'd Semester Semester Cumulative

1977

1st

2nd 15 15

1978

lst 15 30 2nd 15 45

1979

lst 15 60 2nd 15 75 1980

1st 15 90 2nd 15 105 1981

1st 15 120 2nd 12 132 1982

1st 8 140 2nd 5 145

115 ANNEX 9 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Organization and Management of NSP Irrigation and Road Infrastructure Works

Organization

1. Jurisdiction for the Nagarjunasagar Irrigation Project (NSP) rests with the Irrigation Department of the State of Andhra Pradesh, under the direction of the Minister of Irrigation. The GOAP and GOI allocate funds for irrigation development on a yearly basis in accordance with State and national priorities. The project is high on the priority list for early completion, in line with the Government's plan for accelerated development of the irrigated agricultural potential of the country. The NSP engineering office was organized and staffed in the early 1950s and construction of the project was initiated in 1955.

Management

2. Overall responsibility for design and construction of the NSP rests with the Chief Engineer, NSP, under the Secretary for Irrigation and Power. Day-to-day responsibility for project completion is delegated to Superintend- ing Engineers supervising design or construction Circles located in the various regional offices throughout the project area. The present NSP organization for design and construction consists of one design and one mechanical Circle located at Hill Colony (Nagarjunasagar Dam), two construction Circles on the Right Bank located at Karempudi and Pellur, and two construction Circles located on the Left Bank at Tekulapally and Jaggayyapeta. Two additional Circles are being established in the lower parts of the command area, one at Kurichedu on the Right Bank and one at Madhira on the Left Bank. Each Circle is comprised of from three to five divisions, each headed by an Execu- tive Engineer, and each division is staffed by from three to six Assistant Engineers and 10 to 27 Junior Engineers (Chart No. 15673).

Construction Implementation

3. Stage I of the NSP is scheduled for completion by 1981. The area under irrigation command at the completion of Stage I would total 2,150,000 ac -- 1,170,000 ac on the Right Bank and 980,000 ac on the Left Bank. Irrigation distribution and drainage facilities for 347,000 ac on the Right Bank and 471,000 ac on the Left Bank included in the Bank project would be completed by Irrigation Blocks as shown on the implementation schedule (Chart 15671). Stage II of the NSP, to expand the irrigation and drainage facilities to serve land lying below the Stage I area, is not scheduled for implementation before year 2000.

116 ANNEX 9 Page 2

4. Surveys, designs, specifications and tender documents for the Bank project would be prepared by the NSP engineering staff for sections of the main canals, structures, and Irrigation Block distribution systems in accordance with schedules established by the Chief Engineer. All construction work would be accomplished by contract in accordance with Bank approved procedures for LCB or ICB practices. Construction inspection would be provided under supervision of representatives of the Chief Engineer in the respective construction Circles.

Operation and Maintenance

5. Operation and maintenance of the entire NSP irrigation and drainage system would be controlled by three Circles under the direction of the Chief Engineer (Chart 15672). One Circle would be responsible for operation of the dam, with separate divisions for regulation of water flows, maintenance of equipment, and maintenance of services including the camp. Operation and maintenance of the Right Canal irrigation and drainage network would be performed by one Circle located at Narasaraopet, with five divisions (one yet to be established) in various parts of the Right Bank command area. Operation and maintenance of the Left Canal network would be the responsibility of a Circle located at Kham- mam, with water regulation and maintenance duties delegated to four divisions (two yet to be established) in specific areas throughout the command area.

6. Water delivery requirements would be determined at the divisional level and correlated with the Superintending Engineers for the Right and Left Bank command areas. The allocation of available water supplies to the separate command areas would be the responsibility of the Chief Engineer. Close coordination between extension service personnel and project operation and maintenance of the dam, main canals, distributary irrigation system and project drainage facilities to the pipe (or chak) level would be the responsibility of the Irrigation Department through the project operation and maintenance organization. Water distribution and maintenance of on-farm works below the pipe turnouts would be the responsibility of the Pipe Committees under the instruction and supervision of the Irrigation Officers. Each division would be responsible for operating and maintaining irrigation facilities serving about 97,000 ha (240,000 ac), subdivided at the Junior Engineering responsibility level into units of 4,000 to 6,000 ha (10,000 to 15,000 ac).

Operation and Maintenance Equipment

7. Although construction of the NSP canals, distributaries and drains would be accomplished principally by labor-intensive methods, proper operation, maintenance and repair of the extensive irrigation and drainage system complex would require a full range of modern equipment. Motor vehicles, motor bikes and telecommunication or a radio control system would be required for effective control and delivery of project water supplies, and heavy duty equipment would be required to maintain the project drainage system and effect emergency canal repairs. Construction equipment remaining in good (usable) condition after completion of project facilities would be retained for 0 & M use. Existing equipment and the new 0 & M equipment to be provided with the project (Annex 7, Table 1) would be located at the various 0 & M Divisional offices and workshops.

117 ANNEX 9 Page 3

Monitoring Project Performance

8. An independent Circle would be set up to conduct the NSP monitoring and project modernization studies. The Circle would have responsibility for setting up an extensive digital recorder monitoring system to determine irrigation efficiencies and losses of the NSP irrigation network and would determine possible modifications or additions to the existing system that could be made to improve system operation effiencies significantly.

Operation and Maintenance Costs

9. The operation and maintenance costs for the NSP are estimated to be about Rs 85 per ha or about US$ 9 50 per ha (Table 1).

Roads

10. The GOAP has appointed t:heR & B Division (PWD) to act as sole executing agency for the construction and maintenance of project roads. Selection of the roads to be included in the project was made jointly by the CAD Department and R & B. Funds i-or the program would be controlled by the CAD Department. Strengthening of the existing R & B organization would be necessary to deal with the prograni effectively. As Andhra Pradesh has a surplus of qualified engineers, recruitment of suitable staff would pose no problem. The existing materials laboratory at Guntur, which is well equipped and staffed by qualified engineers, is capable of handling all materials selection and quality control work necessary for the project.

II. The R & B Circle to be set up under the project would have its headquarters within the command area and would compromise up to six divisions, each of which would control three or four Sub-Divisions. The Circle would be headed by a Superintending Engineer, reporting to the Chief Engineer R & B who, in turn, would be responsible to the Secretary, CAD, for the execution of the road program. The Chief Engir,eerwould have a small coordinating unit for the project within his headquarters which would be supervised by an Assistant Engineer. Each division would be run by an Executive Engineer and each subdivision by an Assistant Engineer supported by juniors, supervisors and all necessary other grades of staff. All engineers would be professionally qualified. The Circle would have the task of all survey, design, preparation and supervision of contracts and of quality control. For necessary assistance with pavement design and quality control, the Circle would have direct access to the existing materials laboratcry at Guntur, which is capable of undertaking the required materials selection and works acceptability testing. The proposed organization of the CAD road Circle is shown in Chart 15669.

April 1976

118 ANNEX 9 Table 1

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

NSP Operation and Maintenance Cost Estimate

Annual Cost (Rs '000) A. NSP Irrigation and Drainage System

1. Administrative and Operating Personnel

a. Salaries (3,500 personnel) 18,000 b. Travelingexpenses 800 c. Benefits 2,700 d. Casuallabor ?2500 Subtotal Personnel Costs 24,000

2. Materials and Supplies 3,000

3. BuildingMaintenance 2,000

4. Equipment 10.000

Subtotal Irrigationand Drainage System 39,000 Cost/ha Rs 45 or US$5.00

B. Below Pipe Turnouts (Paid by Farmers) Cost/ha (Rs)

1. Neereddi/Neergunti(wages/season) 30 2. Additicnal labor (2 man-days) 10 Subtotal 70

Total operation and maintenance cost/ha Rs 85 or US$9.50

119 INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITEPROJECT ProposedOrganization for Operation & Maintenance- NagarjunasagarProject

| CHIEF ENGINEER 872,000 H ECTAR ES 12.154.000I ACRESI

SUPERINTENDING ENGINEER SUPERINTENDING ENG INEER SUPERINTENDIN G ENGI ~~~~~~LINUGAMGUNTLAAEGIO0N MIRYALGUDA REGION D A M RRIGHT CANAL NETWOHK LEFT CANAL NETWORK 475,000 HECTARES 397.000 HECTARES (1,174,000 ACRES) (980,000 ACRES) FXF~~~~~_44,~C~~4I\FFIIIFFFIVI

_ DAMDIVISION 1JN[FC!! ENGINEERS nWITH MACHERLA DSTRVCT VWITH17 JUNIOR ENGINE'ERS MIRYALAGUDA DISTRI`CT WITH 17JUNIOR ENGINEERS

EXECUTIVE ENGINEER 4 ASSISTATENNEERS EXECUTIVE ENGINEER L 4 ASSISTANT ENGINEERS l EXECUTIVE ENGINEER | 4 ASSISTANT ENGINEERS S & R (SERVICESI DIVISION | WITH 17JUNIGH ENGINFERS | jLNGAMGUNTLA DISTRICT nWITH117 JUNIOR ENGINEERS | HUZURNAGAR DISTRICT WITH 17JUNIGR ENGINEERS|

EXECUTIVE ENGINEER L4 ASSISTANT ENGINEERS EXECUTIVE ENGINEER 4 ASSISTANT ENGINEERS _ EXECUTIVE ENGINEER | 4 ASSISTANT ENGINEERS MECHANICAL LGIVISIGN 1 7 JUNIOR ENGINEERS nWITH | SATTENAPAIlIY DISTRICT nWITH17 JUNIOR ENGINEERS | TEKULAPALLY DISTRICT -|WITH 17 JUNIOR ENGINEERS|

71EXECUTIVE ENGINEER 4 ASSISTANT ENGINEERS EXECUTIVE ENGINEER 4 ASSISTANT ENGINEERS AODANKI DISTRICT WITH 17 JUNIOR ENGINEERS | JAGGAYYAPETA DISTRICT T' V ECE N 1, " "(~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~F nWITH17 JUNIOR ENGINEERS ~~~~~E S VI~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Nl\c

EXECUTIVE ENGINEER _ 4 ASSISTANT ENGINEERS ] ONGOLEDISTRICT | WITH 17 JUNIOR ENGINEERS | -

World Sank-1 5672 INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITEPROJECT ImplementationSchedule

1976 1977 1978 1979 1980 1981

ITEM…- -- - QUARTER 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th

Board Presentation Project Effective NSP Right Main Canal (Under Construction) ...... NSP Right Bank Command Area: . _ -______-_ _ _ Block 15 (29,300 ac)------Block 16 & 17 (18,400 ac) ______

Block 18 (20,000 ac)_ _ _ _ _ - Block 1 9 (66,200 ac) _ _ _ -_ _ .

Block 20 & 21 (29,800 ac) _ _ _- _ _

Block 22 (183,300 ac) - I _ _ _ _ - NSP Left Main Canal (Under Construction) NSP Left Bank Command Area: _ ... . _ _ _ - Block 20 (98,280 ac) _ _ _ - - Block 21/1 - 21/3 (10,000 adc - -

Block 21/4 21/5 (17,420 ac) _ _ _ -

Block 21/6 - 21/9 (121,000 ac) _- _- _ _ -_

Block 21/10 (188,000 ac)_ _ _ - - -

Block 21/11 (37,000 ac)_ _ _ _ _ - NSP Road Improvement & Construction Program _ I I I

Kilometers Completed (Cumulative) . 145 607 _ _ ..384 - _ 1311 - 1576 Monitoring Project Performance _ _ _ _ _ TTI - - - CAD Program - Area Completed(Cumulative ha)

NSP Right Bank _ _ - 1,I6 _ 6,40( _ _ 16,000 NSP Left Bank - -1,600 - 6,400 A 1 6,000 Pochampad Project 4,800 14,400 33,600 Tungabhadra High Level Canal - - --- &0 6,400

ExtensionService Program _ - I _ L 1 _ j J -

NOTE: Wet season months June through September

World Bank-1 5671 INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITEPROJECT Orqanization Chr.t: Na.gr uoasagarPronect Construction AE 9 1 Fig.

LIHO t r M `NIT

l l ~~~~~~~~DEPUTYCHIEF ENGINEER

| SIJPERINl ENDINCl SUMERINIENUING | SUPERINTENDING l OEITNIG l l SOPERINTENDING UERINTENDING ~~~~~~~~~~SUENINTENDINGUERNENIG GA90 0 MA--RR REG ON- n PERINTENDGEG N CAU DAG KRP IEI> EGE 'EGNEt INEE s ENGINEER ENG

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z- ~~~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~23 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~oi Fak tw7(I ANNEX 10 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Organization and Management, Command Area Development

Organization of Command Area Development at the State Level

1. The GOAP established a CAD Department in August 1974. The designated functions of the department are:

(a) construction of field channels and field drains within the command of each outlet (pipe);

(b) land leveling of holdings;

(d) enforcement of warabandi to enable an equitable distribution of water;

(e) development of groundwater to supplement surface water irrigation;

(f) selection and introduction of cropping patterns;

(g) supply of inputs and services;

(h) development of marketing and processing facilities;

(i) diversification of agriculture (animal husbandry, forestry, poultry, etc.);

(j) soil conservation and afforestation, and

(k) construction of village roads.

2. The department is headed by a Secretary, who coordinates two steering committees. The first committee is headed by the Chief Minister. Members are ministers and secretaries of departments connected with the working of command area development, the Chief Secretary to the Government, the First Member of the Board of Revenue and the Agricultural Production Commissioner. The Secre tary, CAD, is its secretary member. The second committee is headed by the Agricultural Production Commissioner and members include the secretaries and heads of departments connected with CAD activities, and administrators working in different command areas. 123 ANNEX 10 Page 2

3. The Secretary, CAD, has also been nominated Commissioner of CAD for the following four command areas (Chart 15670):

-- Nagarjunasagar Left Bank Project

-- Nagarjunasagar Right Bank Project

-- Tungabhadra Project

-- Pochampad Project

4. The Commissioner is assisted by three Technical Cells advising him in planning and implementation of command area development programs:

-- an Agricultural Cell, headed by a Senior Joint Director;

-- a Cooperative and Credit Cell, headed by a Joint Registrar of Cooperative Societies, and

-- an Engineering Cell, headed by a Superintending Engineer.

5. The Secretary chairs a Research and Extension Committee and a Credit Coordination Committee. Cormmitteemembers of the first committee are the directors of research, and agricultural Specialists from agricultural universities, the State government departments and experts from GOI. The Credit Coordination Committee deals with problems of credit. Representatives from the Reserve Bank of India, the Agricultural Refinance Corporation (ARC), the land mortgage banks (LMBs), Cooperative banks and other commercial banks (CBs) are members of this committee.

Project Level

6. At the project level, the Administrator, CAD, is the chief executive for planning and implementation of the program. He has three operational units under his control:

The Extension Unit -- (for agricultural extension services)

The Engineering Unit -- (survey/planning & design of irrigation networks and supervision of construction)

The Credit Unit -- (to assist the flow of credit)

The Administrator is normally a Generalist Officer of the Indian Administra- tive Service. All units working under him are headed by technical officers and specialists.

7. The Director of Agriculture and the Registrar of Cooperative Soci- eties at the State government leve: exercise technical control over the agricultural and credit staff in the project working through the Administrator. The Superintending Engineer, CAD, similarly exercises technical control

124 ANNEX 10 Page 3

over the engineering staff working in the field. The heads of the units act as deputies to the Administrator. This administrative set-up is similar to the general administrative pattern of the District where the Collectors function as department heads of all development units in the District, while at the State level the heads of departments exercise technical control through the Collector.

8. At the project level, a CAD Authority Board will supervise operations. The Board is headed by a minister with concerned members of parliament and of the State Legislature, the chairmen of Zilla Parishads and the Col- lectors as members. The Agricultural Production Commissioner is the vice- chairman of this board while the Administrator of the project is its Secretary. This board normally meets once in three months to approve development programs and review progress.

9. The Secretary, CAD, presides monthly over the project working committees in each of the four projects. The Administrators of the projects are the vice-chairmen of the committees and the Collectors and District level officers are members.

Financing of On-Farm Development Works

10. On-farm development works would be compulsory and the cost of works would be recovered from the beneficiaries. The necessary legislation empower- ing the Secretary, CAD, to carry out on-farm development works has been drafted and is satisfactory.

11. The proposed financing plan is aimed at keeping GOAP's budgetary liabilities to a minimum. Financing would be provided to farmers from CBs and LDBs (LMBs). Long-term loans secured by mortgages on the land, scheduled for development, would cover approximately 80% of the cost of development and would be provided for 12 years at an interest rate of about 11% and a grace period of two years. Some 20% of the farmers are estimated to be ineligible for ordinary commercial loans because of defective land titles or because of overdues on debts to local authorities, cooperatives or commercial financing institutions. These farmers would be provided with unsecured special loans.

12. The Land Revenue Service in the project areas would ensure that as many farmers as possible become eligible for commercial loans through a campaign to update land records and to recover debt arrears. This would be desirable as unsecured loans would evolve higher interest rates (14%) to the farmers and budgetary liabilities for GOAP and GOI for guaranteeing the unsecured loans provide to these farmers.

13. Ordinary land development loans given by LMBs and CBs would be refinanced at the rate of 75% and 80%, respectively, by the ARDC. Unsecured land development loans will be fully refinanced by the CAD Special Loans Fund (CSLF) administered by ARDC. Financial responsibility for CSLF loans will be shared by GOI, GOAP and ARDC, with a 50% contribution by GOI, and 25% contributions each by GOAP and ARDC. The fund would be set up initially to ensure the refinancing of at least 20% of the farmers in a CAD program

125 ANNEX 10 Page 4 area who are estimated to be ineligible for ordinarv land development loans. The conditions of the fund are being negotiated between ARDC, GOI and GOAP and would be broadly as follows:

(1) The fund mav be calLed "The CAD Special Loans Fund."

(2) The fund shoulA be utilized for financing the exoendi- ture in connecticn with on-tar- development irn respect of ineligible farmers under the CAD Program , that is, farmers who are not ablE to get funds from banks for on-farm development for one reason or the other.

(3) The contribution by GOI, GOAP and ARDC should be increased, b- mutual agreement, in the proportions mentioned in para 13 above, where the number of ineligible farmers exceeds 20% of the total farmers covered by the CAD Program.

(4) The requirements of finances for on-farm development works in respect of ineligible farmers will be estimated at the commencement of every financial year and will be contributed in two stages; 50% of the estimated requirements will be contributed in advance by the three agencies, namely GOI, GOAP and ARDC in the proportions indicated in para 13 above; the remaining 50% would be contributed by all the three agencies in the same proportion as soon as 80% of the contributions made in advance are fully utilized.

(5) The fund would be maintained by ARDC.

(6) The fund would be administered by a committee consisting of one representative each of GOI, ARDC and the GOAP.

(7) The accounts of the fund will be maintained by ARDC.

(8) The fund shall be a revolving fund and all capital recoveries in respect of lendings out of this fund shall be credited to the fund.

(9) The GOAP shall not withdraw its contributions from the fund until the project is completed and until the loans from ineligible farmers are f-ullyrepaid.

(10) The contribution from GOI shall not be withdrawn so long as contributions from ARDC are not withdrawn.

(ll) The GOAP shall guarantee the loans given by the fund.

126 ANNEX 10 Page 5

14. Land development loans to ineligible farmers would be channelled through the LDBs and the CBs with the same processing procedure used for ordinary mortgage secured, loan operations, except that these loans would be fully refinanced and recoveries, collected by the LDBs or CBs, credited to the fund.

15. Loan applications would be prepared jointly by the engineering unit and the credit unit operating in the project area, and would be based on the estimated cost for land leveling works on the farmer's holding and a proportional share of the construction cost of the field channels, field drains and related structures in the command of an outlet.

16. The GOAP and ARDC would draw up a banking plan, dividing the project area into zones of operation for the LDBs and CBs. The financing position of the participating banks is satisfactory and, with ARDC refinancing no shortage of funds is anticipated.

Proposed Implementation Program

17. Ideally, the CAD program should cover the full irrigation potential created by the distribution network in the four project areas. However, as no large scale development has been attempted in the past in the project areas, the targets for the first three-year period have been scaled down to allow for the gradual build-up of the CAD organizWtion and the training of manpower. The targets set out in Table 1 are based on present planning, design and implementation procedures, which over time, can be improved considerably. The figures shown in Table I irrigated wet (IW) and irrigated dry (ID) areas only. For the IW areas, no outside inputs and little guidance is required at present as farmers use traditional methods. In subsequent stages of the CAD program, more efficient methods would be introduced for these areas as well.

18. For the purpose of analyzing the work load of the CAD Authorities and estimated manpower requirements, the average cost of the full package of on-farm development works (construction of an irrigation and drainage network for a pipe and land leveling of the holdings) is taken as Rs 2,000/ha -- half of the cost for the network and half for land leveling. A further assumption has been made that only one half of the area, on the average, would require land leveling, i.e., the cost of the CAD would average Rs 1,500/ha over the area included in the first three years (first stage) of the CAD Program.

19. According to standards fixed by GOAP in 1967, a PWD division, (with four sub-divisions) is expected to implement works worth about Rs 2.4 million per year, if the works are of a minor nature.

20. Compared to a PWD division, Land Development Divisions of the CAD Authority would carry out works spread out even more. On the average, the length of the network and the number of structures in a 20 ha pipe would be as follows:

127 ANNEX 10 Page 6

(i) Primary & Secondary field channels; 4,000 Meters

(ii) Primary & Secondary fielcd drains; 4,000 Meters

(iii) Check drops, turnouts distribution, and boxes 300 Nos.

(iv) Lining of primary channels. 300 Meters.

21. Using these estimates, a CAD division (four construction sub- divisions) would implement works for some Rs 2.4 million per year, equivalent to an area of about 1,600 ha (80 pipes of 20 ha each). About 40 to 50 small contractors would be employed by each division for 35 to 40 weeks to complete the infrastructural work on ],600 ha. Land shaping and leveling on 800 ha will require some 20 tractors in the working season. The same division would be able to survey and design 1,600 ha in the four month-long rainy season. Normally survey work does not form part of the duties of a PWD construction division. However, in order to reduce engineering overhead costs, the two functions will be combined in the proposed CAD divisions.

22. Some five CAD divisions would be required during the first year, 13 divisions during the second year and 27 divisions during the third year for an area of 8,000 ha, 20,800 ha., and 43,200 ha, respectively.

23. Capital cost and establishment cost for the CAD divisions would be as follows:

(in 100,000 Rupees)

1976-77 1977-78 1978-79 Total

Establishment 67.30 132.90 250.50 450.70

Capital 34.27 50.88 91.50 176.66

Total 101.57 183.78 342.01 627.36

The establishment cost for implementing the CAD program, per ha developed, will be about Rs 626. Of this, Rs 176/ha is survey and design and Rs 450/ha for construction supervision.

24. In drawing up the implementation program, it was assumed that preselection of pipes (for defining the number of ineligible farmers) would be done by the credit staff of CAD and the LDBs and CBs. Allowance has been made for the time required for issuing notices, and hearing objections, etc., as prescribed under the proposed legislation for comprehensive CAD.

128 ANNEX 10 Page 7

25. With an average survey, design and supervisioncost of Rs 626/ha the engineeringoverhead for CAD works is slightly over 40%. Undoubtedly these percentagescan be reduced with more efficientwork procedures. More experiencein land leveling by contractorswould also reduce the cost of supervision. However, in view of the type of work involved,the engineering overhead is bound to remain high, probably in excess of 25%. At present, the GOAP togetherwith GOI is paying for this engineeringoverhead. Under the project, farmers would pay a 15% surchargeon the contract cost for the civil works to cover a part of the engineeringcost.

April 1976

129 ANNEX 10 Table 1

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT

On-Farm Development Works

Program of On-Farm Development in the four Sub-Projects

First Stage Second State Hectares

Command r-ea 1Q76/77 77-78 78-79 79-8n 80-81 81-82 82-83 83-81 84-85 Total

1. Nagarjunasagar (Left) 1,600 4,800 9,600 19,200 30,400 30,400 40,000 40,000 40,000 216,000

2. Nagarjunasagar (Right) 1,600 4,800 9,600 14,400 30,400 30,400 30,400 30,400 20,000 172,000

3. Tungabhadra Project -- -- 36,800 (HLC Stage II) -- 1,600 4,800 11,200 9,600 9,600 -- 48,ooo 4. Pochampad Project 4,800 9,600 19,200 14,400 ------

Total 8,000 20,800 43,200 59,200 70,400 70,400 70,400 70,400 60,000 472,800

* Pochampad program includes development of 6,000 ha from irrigation potential created up to 6/75 while the other programns include only the potential that will be oreated beyond 6/75. INDIA ANDHRA PRADESH IRRIGATION AND CAD COMPOSITEPROJECT OrganizationChart: CommandArea DevelopmentDepartment ANNEX10 Fig. 1 SECRETARYl _ D >_Q4ER) CAD1MMISIOER)/

|D I R ECTOR | / | REGISTRAR AGRICULTURE CO-OCIERTIV

SUPERINTEDiN AMNSRTRADMINISTRATIVEJ ENGINER COMMAND AREA AUTHORITY ...... --- UNIT---

ENGINEERING UNIT EXTENSION UNIT CREDIT UNIT

EXECUTIVE ENGINEER DEPUTY DIRECTOR DEPUTY REGISTRAR OF ASSISTANT ENGINEER ASST. DIRECTOR AGRI. CO-OP SUB-REGISTRAR SUPERVISOR ASST. AGRI. OFFICER INSPECTORS VILLAGE EXTENSION WORKERS

.t 1 1 / The Secretary CAD acts also as the Commissioner for CAD in the four project areas. As Commissioner w he has additional executive powers.

World Bank-15670 ANNEX 11 Page 1

INDIA

ANDHRAPRADESH IRRIGiATION AND CAD COMPOSITE PROJECT

Agricultural Supporting Services

I. A&2jcultural Extension

A. The Present Situation

1. In the project areas, agricultural extension is the joint responsibility of the Secretary, CAD, and t:he State Director of Agriculture. A professional agriculturist nominated by the Director of Agriculture, is attached to the Secretary, CAD and has overall charge of extension activities in the project areas. Staff in the field report to three different departments: CAD, the Department of Agriculture and to the Panchayat Samithies. The Panchayat Samithies have direct control of the Village Level Workers (VLW) who, consequently, spend a large amount of time on non-agricultural activities. Fur- ther, there are a number of special. schemes operating in the project areas, like a maize scheme in the Pochampad Command, a cotton project in the Nagar- junasagar Right Bank Command, a Multiple Cropping Project and a Water Manage- ment Project. All have extension staff in the field covering their own subjects. They overlap physically among themselves and with the regular extension staff. Some of these schemes are "centrally sponsored," i.e. partly financed and staffed by GOI personnel and therefore any alteration in their pattern of work is not entirely within the discretion of GOAP.

B. The Proposed Organization

The Staffing Pattern

2. The proposed new extensicn crganization would follow closely the well tried and successful Chambal Madhya Pradesh and Rajasthan system. Ex- tension work would be headed by senior officials of the Department of Agricul- ture, who would be posted in the project areas, They would act on behalf of the Administrator of the Command Areas in agricultural matters. Technic- ally, they would continue to report to their line department. Only the State extension service would have contacts with farmers; experts from the special projects would function as advisors.

3. The cadre in contact with the farmers would continue to be the VLW. The Panchayat Samithies would retain sufficient staff of this grade to attend to non-agricultural duties. The balance, some 75% to 80% of the establishment, would be known as Village Extension Workers (VEWs) and be part of the Department of Agriculture. New entrants would be matriculates. They would be trained at the VLW Training Center at Bapatla, which is situated south of the Nagarjunasagar Right Bank Canal command area. 132 ANNEX 11 Page 2

4. The VEWs would report to Assistant Agricultural Officers (AAOs) who would supervise not more than seven VEWs. The AAO would have a diploma in agriculture from a farm institute and two years experience in the field in general extension work and farmer contacts.

5. An Assistant Director of Agriculture (ADA) would be in charge of an Extension Circle, consisting of the area controlled by up to seven AAOs. He would be assisted by Subject Matter Specialists (SMSs) whose discipline and number depends on the area as well as the crops and problems that may be faced. The ADAs and SMSs would be agricultural graduates with general or specialized experience and interests. The ADA would, in addition, have administrative experience commensurate with the number of line staff that he would have to control. He would report to a Deputy Director of Agriculture (DDA). One DDA would be in charge of up to four extension Circles.

6. In the case of large command areas, a Joint Director of Agriculture (JDA) would be appointed to supervise and coordinate the activities of the DDAs. Senior SMSs would be based at his headquarters. But, irrespective of rank, the most senior agriculturist would have access to the Administrator and act as his fully authorized deputy in agricultural matters.

Staff Buildup

7. The number of VEWs depends on the area farmed, the number of farmers and what is considered to be the desirable farmer-to-VEW ratio in light of farmer development and responsiveness. The following figures have been used for planning purposes:

No. of Farmed Area per VEW/Farmer Approx. Farmers Area Farmer Ratio No. of ( ,000) ( ,000 ha) (ha) VEWs

Nagarjunasagar Left Bank 113 397 3.5 1:800 145 Right Bank 158 475 3.0 1:1,000 158

Pochampad 47 103 2.2 1:550 85

Tungabhadra 16 95 6.0 1:550 30

It is intended that when an area first receives irrigation water, the farmer-to-VEW ratio would be one-third of the ultimate, rising to two-thirds after one or two years.

8. Farming standards are already high and the farmers are considered responsive. Therefore, only a well-trained, properly supervised and backstopped extension service would inspire farmer confidence and generate the

133 ANNEX 11 Page 3 momentum that was largely responsible for the achievements in other areas where the system was introduced. Consequently, initial buildup must be commensurate with available high-quality staff and the expected initial training output. It is proposed to start with one Extension Circle in each area and to build up gradually. It is further proposed to establish the DDA's office at the same time, thereby adding strength to field supervision during the first crucial year and obtaining the spare capacity of a Senior Officer--the DDA--for the vital staff selection, planning and training functions.

Method of Operation

9. Contact with and advice to the farmers would be extended in units of the outlets. The outlet (pipe, commands 40 to 45 ha and is farmed by 7 to 22 farmers. There would be an elected Pipe Committee, which would nomi- nate four or five contact farmers. The contact farmers would be visited by the VEW once a fortnight, always on the same day, morning or afternoon and he would spend four or five hours in the general area. The contact farmers would arrange for several other farmers to be present. The VEW would discuss and, if appropriate, demonstrate the topical matters for the visit, which had already been defined in his fortnightly training session and would then attend to these same problems on other farmers' lands, upon request. Between his visits, follow-up would devolve on the contact farmers. The VEW would spend eight days each fortnight visiting 16 farmer groups; one day, at the end of the period, on briefing and training for the next fortnight's assignment and the rest of his time on ad hoc visits in response to special problems, as well as planning and updating his records.

10. The AAO would spend eight days every fortnight with his VEWs, so arranging the days of his visits that he sees his entire area in sequence. He would participate in the fortnightly training session, accompany, upon request, the VEW on his special visits, take charge of demonstration plots and farmers' days held on them. He wculd also maintain contact with the SMSs and, as need arises, request their presence during field trips.

11. The ADA would also spend several days a week in the field, visiting his AAOs and arranging to cover the whole Extension Circle in a systematic manner. He would also keep track of the work of the SMSs, contact the various extension committees (para 13), and prepare for his part of the training programs.

12. Where applicable, the DEAs and JDAs would follow a similar work pattern but their representational, administrative and policy-making tasks would take a greater time.

13. An integral part of the operating procedure would be to ensure farmer participation and interest through the establishment of advisory

-134 ANNEX 11 Page 4 and consultative committees. In each project area, there would be a Project Extension Council that would meet twice a year with the DDA or JDA and the Adr-inistrator to discuss past results and advise on campaigns planned for the comming season. There would be similar committees concerned with the major crops, advising the SMSs and Circle ADAs. The Pipe Committees (para 9) would have the most frequent contact with extension officers and would exercise the greatest influence in ensuring the success of the project.

Training

14. Staff Training and Development. The Andhra Pradesh Agricultural University in Hyderabad has one of the three Extension Education Institutes in India, which serves the southern States. They organize courses for extension officers above the VEW level on specific subjects (credit, crop production training, etc.) as well as on extension methods and techniques. There are courses for the instructional staff of agricultural schools of all levels, Government training centers and also for the compilers of agricultural programs on All-India Radio. The Institute has all the facilities for its participants; classrooms, teaching aids and a dedicated professional staff. It would be a major component of the training program of extension staff above the VEW level. Yearly refresher courses would be organized for SMSs in which selected other staff would also participate. The courses would be run as workshops in which opportunities would be given to relate, exchange and analyze past field experiences. The generalist field staff would attend suitably designed courses on extension methods, the principles and practice of supervision and on general management training and development matters, thus preparing them for promotion.

15. The present VLWs clearly lose motivation when they have reached the top of their salary scale and see no avenues for promotion. Therefore, VEWs whose technical knowledge is adequate would participate in courses held at the Extension Training Institute and if they give evidence of having absorbed and being able to apply the course material, would become eligible for promotion to AAO and eventually, higher grades.

16. The syllabus for all courses in which project extension staff participate would be prepared jointly by the project SMSs and the Institute's staff and would be approved by the Director of Agriculture and Secretary, CAD Department.

17. The more frequently recurring staff training would take place within the Extension Circles and the project units. One of the SMSs in each Extension Circle is an Extension Specialist, one of whose tasks it is to organize staff training. This consists of a fortnightly training course for the VEWs during which the salient points, never more than two or three at a time of the next period's tasks would be imparted to ensure that the farmers' attention and sense of importance would not be dissipated. The VEWs would attend a workshop type training program before each season, to review past achievements and difficulties and plan the next season's work. During these

135 ANNEX 11 Page 5

seasons, a concensus would be reached in which points of crop husbandry, additional to the ones from the previous year, could be introduced without de-emphasizing previous ones and changes in methods and points of emphasis, suggested by technical developments reviewed. Both courses would have to have a practical base, including inspection and work in farmers' fields. The speakers may be AAOs and even VEWs, and not exclusively the more senior officers. Work planning and the detailed analysis of sample work plans would be a major part of the seasonal training sessions.

18. The training of the management level staff (AAO and above) would take place at wider intervals, perhaps every two months. However, in advance of the two seasonal VEW training sessions, there must be a suitable course for all management grade staff, in association with a research station, to bring them up-to-date on recent investigational work in all aspects of the crops to be grown and on the practical implications of recent advances.

19. Farmer Training would be directed to members of the Project Ex- tension Council, the Branch Committees for various crops, the Pipe Committees, and the contact farmers. These sessions would necessarily be discursive, and be used for imparting and discussing matters of policy and administration such as timings of water releases, crop area targets and specific problems of crop husbandry. The sessions directed at the Extension Council and the Branch Committees would be a series of talLksand discussions lasting one day and conducted by the DDA or ADA and having SMSs, other officials and leading farmers as speakers. The training sessions for the Pipe Committees would be held by the AAO, with SMSs, VEWs and perhaps ADAs as speakers. The contact farmers must be trained every season for two days at a training institute where facilities exist for proper demonstrations and objective-oriented slide and film shows. The rank-and-file farmers would be approached during field days on demonstration plots. Farmers' meetings would also be held in villages where colored slides or films of topical interest would shown.

Subject Matter Specialists

20. The disciplines required by all are:

-- extension methods and training

-- agronomy

-- water use and management

plant protection

-- farm machinery

The Tungabhadra area would need an expert in citrus culture. Other areas may well show up similar specialized needs.

136 ANNEX 11 Page 6

21. At all times, the desirable arrangement is to have SMSs at the Extension Circle (ADA) level. Exceptions to this are acceptable only if:

(a) a sufficient number of adequately trained SMSs is not available;

(b) the discipline they represent is such that the nature of its application is much the same throughout the season and the non-specialist staff can follow-up between the less frequent supporting visits.

It would also be desirable to have senior, widely experienced SMSs attached to the DDAs and JDAs office (when established) to give backstopping to the SMSs attached to the ADA.

Implementation Procedure

22. Table 1 shows the expected implementation which would be operating from July 1, 1976. The AAOs, SMSs, ADAs and DDAs for the first year would be appointed before that date. These officers would receive preliminary training to have already been completed March 31, 1976. The training would have included a one month secondment to an operational extension project in Rajastan, Madhya Pradesh or West Bengal. The AAOs would have spent a full fortnight in the field with their opposite numbers and have attended at least two VEW training sessions normally conducted by the AAOs. The selection of the first batch of 21 SMSs would have been done in consultation with an IBRD consultant.

23. The area from which the staff for the extension project including VEWs would have been chosen is the maximum range of their transferability in accordance with the prevailing rules and practices of the State of Andhra Pradesh Civil Service Commission.

24. The newly-developed Chelgal farm in the Pochampad area would serve the needs of the Pochampad Project. Therefore, the program would be under the auspices of CAD authorities who would consider the advice and interests of other parties. It is expected that similar arrangements would be made for all Project Demonstration and Development Farms.

Extension Equipment

25. Mobility of staff is of prime importance. It is therefore proposed that VEWs all have bicycles, the AAOs motorcycles and other staff four- wheel drive vehicles. Bicycles would be owned by VEWs who may dray an advance for their purchase and receive an appropriate upkeep allowance. A similar arrangement would operate in the case of motorcycles, where the allowance would be so structured as to give maximum incentive to proper preventive maintenance. The four-wheel drive vehicles would be Government- owned but facilities should exist to encourage the officers to purchase and operate their own vehicles.

*137 ANNEX 11 Page 7

26. Other equipment like cameras, projectors, etc. would be needed at Extension Circle level to ensure more effective demonstrations and instruction. Housing and office space must be available and in places where it is not possible to rent, construction would be undertaken. Study trips by selected staff, within and outside India may become necessary.

II. Agricultural Research

27. Agricultural research findings applicable to the project areas are generated from three sources: the State universities, the All-India Coordinated Programs operating in Andhra Pradesh and the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT).

28. The State Universities. State Universities operate from two main sites. One is near Hyderabad in RELjendranagar and the other, an agricultural college, is in the Krishna Delta, in Bapatla. They have plant breeding, agronomy and soil survey, soil fertility and soil classification programs. Their agro-economic surveys and socio-economic studies, undertaken by advanced degree candidates or as on-going departmental research programs, are of great value in extrapolating possible impacts of development projects and in identifying other-than-agronomically-based motivations for farmer reactions to change. The Extension Education Institute (para 13) is integrated with Rajendranagar University and has its own research program.

29. The All-India Coordinated Programs. The final testing of new crop varieties or hybrids, and of new agronomic practices, devolves on trials conducted under the All-India Coordinated programs. The ones pertaining to rice, maize and sorghum are located in Rajendranagar. Development work on maize is also carried on in Karimnagar, near the Pochampad Project area. Cotton research development is centered in Guntur District (NSP Right Bank command) which is the State's main cotton-producing area. A research station working on groundnuts, chillies andimillets is near Lam, also in the Guntur area. These establishments all do basic genetic research as well.

30. ICRISAT is one of the research institutes set up under the Con- sultative Group of International Agricultural Research financed by FAO, UNDP and the World Bank Group. It has many international contacts, of which the most important, for the present project, is the one with the International Institute of Tropical Agriculture in Nigeria on tropical legume research. The Institute is also studying the agro-economic problems of the Andhra Pradesh farmers and is making a continuing contribution to the socio-economic analysis of their production and marketing problems.

31. The State, and therefore the project areas are well provided with basic and adaptive research facilities which are effectively and competently backstopped by the Indian Council of Agricultural Research and the Indian Agricultural Research Institute; ICRISAT, with its internationally-recruited, highly competent staff, and top-quality management and organization complete 138 ANNEX 11 Page 8 the setting. The only point of weakness is a communication gap between them and the State extension services, which the reorganization was expected to overcome.

III. Monitoring Project Impact

32. The following information would be collected and analyzed in the course of the monitoring studies. In the two Nagarjunasagar sub-areas:

a. effect of irrigation on areas not at present irrigated;

b. effect of prohibiting rice growing in areas already irrigated in the rabi; and

c. field irrigation efficiencies below the pipe outlet.

In all four sub-areas:

a. the effects of CAD on land already irrigated;

b. the impact of the extension service;

c. effects on employment of non-family members on the farm and their wage levels; and

d. effects on off-farm employment.

33. Monitoring would start in June/July, 1977 and continue for four years. Observations would be collected on a 1% scatter of carefully selected outlet commands in NSP and on a 2% sample in Pochampad and on a 4% sample in Tungabhadra in locations where CAD would be implemented. Land ownership, occupancy, cropping patterns and intensities, and yields of all fields would be recorded on the sample areas; the farm labor situation records would cover all farmers who have land on the recorded area, including their nearby fields and farms. The off-farm employment survey would be an independent operation, taking place in the first and final year of the monitoring program.

34. Over succeeding years, information on the farmers under observation as well as from the Panchayat Samithies would be available. Changes brought about by the project would thus be measurable and could be related to surrounding non-project areas.

35. The records and diaries of the extension effort would be analyzed, and the number of responding farmers and their yield changes noted.

139 ANNEX 11 Page 9

36. Water use and efficiencies between the outlet and the farmers' fields would be recorded, in close cooperation with, and under the guidance of, the engineering monitoring and wqater loss recording service (Annex 9).

37. The operation would be contracted out to one or more institutions selected by GOAP and approved by the Bank. An officer not below the rank of DDA reporting to the Secretary, CAA, would have charge of the operation and coordinate the work. Total cost is estimated at about Rs 7 M (US$800,000).

IV. Input Services

38. Seeds. There is relativeLy little trade in the seeds of the non-hybrid crops: farmers tend to keep their own or, if they change the variety, buy or exchange grain for seeds with their neighbors and thereafter revert to maintaining their own planting stock. Planting material is being obtained from merchants and differs little from consumption-grade grain. There is, however, a well-developed producing and marketing organization for hybrid seeds (maize, sorghum, pearl millet) for all vegetable seeds including chillies; for cotton and for the small amount of wheat that is grown in the State. The National Seeds Corporation (NSC) and the Maharashtra Hybrid Seeds Corporation have the major share of such market for certified seeds that exists. At least one private fertilizer producing and marketing organization sells rice seeds, with little more than a nominal volume of business. The establishment of a State Seeds Corporation is under consideration by an IDA appraisal team, principally for rice seed production, primarily meant for export to other States.

39. It would appear that existing supplies, and their expected development in line with increasing demand, will meet anticipated needs. Quality would be ensured by the State seed certification and testing organization that is expected to be set up within the framework of the IDA seeds project.

40. Fertilizers. Farmers are highly fertilizer conscious and it seems certain that the expected extension organization will be able to induce them to use economical doses as irrigation water becomes available or better yields become potentially possible with land shaping under CAD. The marketing and distribution organization is reasonably efficient: the retail trade is handled by private dealers, the State Cooperative Marketing Federation and, mainly for credit sales, by depots operated by the Department of Agriculture. While there is some disproportionate concentration of sales outlets along the major lines of communication, the price structure allows for at least part of the transport costs to the more remote areas to be recovered. More use is likely to be made of this as the demand increases and supply shortages ease. The trade, on a State-wide basis, expects and plans for a sizeable increase in sales volume, especially for the mixed blends and complex fertilizers.

140 ANNEX 11 Page 10

41. Pesticides are handled by private enterprise and by cooperatives. Several small concerns do their own mixing and packing in conveniently - sized small containers. The regulations covering container specifications and (for metal containers) the type of inner lining required are not defined and only the larger firms attempt to indicate any expiry date. Some dissatisfaction has been expressed both by farmers and by retailers.

42. Sprayers are available on loan from the extension service and are on sale by most of the sellers of pesticides. Designs of the hand- operated sprayer are old and could be improved by better engineering application and by the use of better materials. The motorized knapsacks are of modern design and usually manufactured under foreign licenses.

43. There is no doubt that with treatment of crops most at risk (cotton, chillies and, under project conditions, sorghum, groundnuts and sugarcane) not only a rational and properly monitored application timing (Annex 12, para 19) but also better application, resulting from more efficient machines, and the ensuring of full efficiency claimed for the chemicals by proper quality control, would have good effect.

V. Agricultural Credit

44. The cooperative banks which extend short- and medium-term loans to farmers are organized on a three-tier basis: one State Cooperative Bank, 25 central cooperative banks (with 48 loan branches and 94 deposit branches) and some 15,000 primary agricultural credit societies at the village level. The number of central cooperative bank branches would eventually be increased to 195, or one branch per taluk and they would all become loan branches capable of giving full services to the Agricultural Credit Societies. The number of primary societies would be reduced to 7,000 which is considered the optimum number.

45. The agricultural credit societies borrow from the central cooperative banks; the latter borrow from the State Cooperative Bank, and the State Cooperative Bank borrows from the Reserve Bank of India. The State Coope- rative Bank's borrowings from outside sources have amounted to only Rs 97 million. Compared with some other States, the dependence of Andhra Pradesh cooperative banks on outside sources is small.

46. The Central Cooperative Bank controls the operations of its branches through regular inspections and audits. It sets District-wide targets for the mobilization of deposits and the collection of overdues and sanctions credit limits for all Agricultural Credit Societies. Branches of the Central Cooperative Bank authorize disbursements to the Credit Societies, advise and assist them in carrying out and reporting on their activities as well as in charting their development.

-141- ANNEX 11 Page 11

47. The Agricultural Credit:Societies are the dispensers of agricultural credit at farm level. Short-term advances, about 80% to 85% of the total, are largely crop production loans. Medium-term advances finance mainly for well construction or improvenmentand the purchase of milch animals, pump sets and small agricultural implements. Typical seasonal loans are Rs 480 per ac (1,200 per ha) for local varieties of rice, Rs 675 per ac (1,700 per ha) for HYV and Rs 675 per ac (1,700 per ha) for groundnuts.

48. Agricultural credit society members of good standing may borrow up to ten times the value of their shares in the society. The maximum short- term credit granted to any indivi.dualis Rs 10,000 in irrigated areas and Rs 6,000 in other areas; medium-term loans are limited to Rs 5,000 per farmer. In the case of borrowings without:mortgage of land, a 15% contribution is required in addition to the 10% share capital contribution. Up to Rs 2,000 short-term loans to tenants as well as land holders are secured only by two personal guarantees. Farmers then get the full amount of the loan contracted; no insurance is required.

49. Overdues have appeared to be a diminishing problem for cooperative banks. At the State cooperative bank level, overdues are negligible. At the District level, central bank loans overdue represent about 25% of total loans outstanding, a drop from the 49% which prevailed in 1972.

50. After some years of relative stagnation, during which overdues reached a very high level, both short- and medium-term lending have picked up considerably during the past two years. This is attributable to the re- moval of some rigidities in loan criteria and procedures and the rapidly increasing demand for credit in the Pochampad Project area as well as an improving repayment record.

51. It would thus appear that the credit institutions are in a position to continue to meet project area farmers short- and medium-term credit needs and no special steps need to be taken under the project at present.

April 1976

.142 ATNEX 11 Table 1

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Tentative Build-UJp of Extension Services

Year 1 2 3

Area Covered (ha)

NSP LBC 67,000 198,000 224,000 281,000 357,000 NSP RBC 151,000 311,000 320,000 06,000 475,000 Pochampad 30,000 61,000 103,000 103,000 103,000 Tungabhadra - 65,000 70,000 80,000 95,000 Total 248,000 635,000 717,000 870,000 1,030,000

Cultivators(No)

NSP LBC 19,100 56,60o 64,000 80,300 101,700 NSP RBC 50,000 103,700 206,700 135,300 158,300 Pochampad 13,600 27,700 46,800 46,800 h6,800 Tungabhadra - 10,800 11.700 13,300 15.800 Total 82,700 198,800 229,200 275,700 322,600

VillageExtension Workers (No)

NSP LBC 24 113 113 127 1h5 NSP RBC 50 109 llb 158 158 Pochampad 25 50 85 85 85 Tungabhadra - 2z9 29 29 30 Total 99 301 341 399 399 Capital Costs (Rs '000)

NSP LBC 957 310 160 94h 370 NSP RBC 753 235 10 921 420 Pochampad 934 169 77 - 370 Tungabhadra - 1.176 - - - Total 2b 190 18 1,160

Operating Costs (Rs '000)

NSP LBC 700 1,125 1,316 2,039 2,039 NSP RBC 492 659 913 1,407 1,469 Pochampad 435 592 783 783 783 Tungabhadra - 525 548 566 578 Total 1,627 2,901 3,560 4,795 4,860

143- ANNEX 12 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Agricultural Production and Marketing

1. Production

A. The Project Areas

1. The four sub-project areas are: Nagarjunasagar Left and Right Banks, the Pochanpad Command, and the Tungabhadra High Level Canal Command. The two Nagarjunasagar commands are divided into areas irrigated prior to June 1976, and those that will come under irrigation as a result of the project.

B. Topography and Soils

2. Topography. The Nagarjunasagar and Pochampad project areas extend over a number of sub-catchments within the main river system. The topography is uneven with slopes ranging from 1% to 4%. Several minor seasonal streams cross the area, which has enabled the development of an extensive system of storage "tanks"; small earth embankments across the streams where water is stored for supplementary irrigation of rice in the kharif. In the larger tanks, some of the water is used for rabi irrigation as well. Most of the tanks are located in the Nagarjunasagar area. In Pochampad, the slopes along the creeks are steeper and less suited for tank development, but the groundwater potential is good and a large number of wells, many of which have engine-driven pumps, have been developed. Tungabhadra topography is also uneven but because of low rainfall, it has only a limited potential for tank and.well development.

3. Soils. The soils in all four areas are similar. They are of two types: lateritic red soils, derived from granites, and black soils derived from basalt rocks. Most of the soils have developed in situ; however, some part of the Pochampad area are covered by alluvial deposits. In general, the red soils are coarser but contain a sufficiently high clay fraction to enable some puddling; with appropriate cultural practices percolation could be reduced but would still remain high. They are underlain by weathered murrum rock which permits a gradual increase in plough depth. The red soils require considerably larger water quantit es than the black soils. The latter are deeper with higher clay content suitable for rice growing. The same characteristics make groundnut cultivation more difficult, due to drainage problems. In the past, some salinization of black soils has occured, due to poor irrigation practices. The distribution of the two soil types is approximately:

144 ANNEX 12 Page 2

Nagarjunasagar Left Bank Right Bank Pochampad Tungabhadra

Red 70% 50% 67% 20%

Black 30% 50% 33% 80%

4. Soil fertility tests indicate the need for phosphates, especially on red soils. A well defined "threshold effect" has been observed. Small doses (30 kg/ha of P2 05) have a proportionately smaller effect on yields than higher rates of applications, because of an initial requirement to saturate the colloidal complex. The potash status is satisfactory for the present lower yield levels but will have to be augmented to create a high yield potential.

C. The Present Agronomic Situation

5. Present cropping patterns have been derived from the land revenue records and from information gathered during field visits. They are summarized in Table 1. The present yield levels are shown in Table 2.

6. With the exception of a number of small areas in the already irrigated portions of the Pochampad Command, no systematic command area development has taken place. The strong tradition of rice growing in Andhra Pradesh, however, is making farmers level any land they plant to rice. Within two or at most three years of irrigation water becoming available, farmers can attain zero slopes and subdivide their holding into small enough fields to ensure a high degree of water control. This development seems slower and less competently executed in Tungabhadra than in the three other areas. For crops other than rice, leveling is generally unsatisfactory and slow. Inadequate on-farm development has resulted in considerable field water losses, and poor performance of high-yielding varieties of non-rice crops, which, therefore, are only slowly becoming accepted. Owing to an uneven water supply, yields of traditional varieties are also low.

D. Major Crops

7. Rice is the farmers' first choice whenever irrigation water is available, be it from tanks, wells or canals. The most common variety in the kharif is Mashuri, It takes about 120 days from transplanting to harvest, is a fairly good yielder and fetches a sizeable premium over the more recently developed, shorter term and higher yielding varieties HYV. Unlike the latter, it is also weakly photosensitive which enables it to be planted over a longer span of time and still ripen after the cessation of the monsoon rains. At present, irrigation is available from July to April in NSP. As a result, considerable areas of rabi rice are grown. Most of the rabi varieties are the recently developed short-term HYVs.

145 ANNEX 12 Page 3

8. The All-India Coordinated Rice Improvement Program (AICRIP) aims at developing high yielding varieties that will have the flavor and milling quality of Mashuri but will have a shorter growing season, thus saving on irrigation requirements. For the kharif season considerable farmer resistance can be expected to any change to high yielding varieties unless the water supply regime forces them to plant later.

9. Sorghum is at present grown primarily for fodder in the irrigated areas of the Nagarjunasagar sub-projects. In the areas not yet receiving water, it is grown as a dual-purpose grain/fodder crop. The variety in common use is a tall-growing, fodder type, that is able to give acceptable yields, especially of stover, even when water is in short supply.

10. India has a good record in developing sorghum hybrids and more recently synthetic grain sorghums that give a much higher grain yield than the indigenous varieties, without significantly lowering the yield of leaf, only that of stems. A more recent and promising development is the introduction of straight varieties with a grain yield comparable to that of the hybrids. The more progressive farmers are exploiting these advances. There is sufficient evidence that in the Nagarjunasagar area, and possibly also in Pochampad, properly leveled land can be planted to hybrid or other high yielding sorghum varieties with only minimal supplementary irrigation in the kharif, provided water can be made available after germination to aid establishment. With an improved extension service, coupled with the progress of CAD, the crop will regain, or continue to maintain, its importance. This is important for livestock and particularly for the working oxen, because rice straw, the alternative fodder after irrigation is introduced, is nutritionally less valuable. Farmers recognize that rice straw feed is inadequate for animals expected to meet peak land preparation requirements in July and August. The hybrid sorghums recently released ratoon well under irrigation and many farmers are already taking advantage of this. The trend is expected to continue.

11. Groundnuts are both of the bunch and the spreading type. The latter, because of dormancy after maturing, is the first choice for the kharif season. The main agronomic problems encountered are waterlogging on the black soils and some minor element deficiencies. Both are being overcome by the more progressive farmers through suitable cultural practices and foliar application of trace elements. At least three new varieties are under advanced trials and a yield expectation of two tons/ha should soon be within reach of good farmers. An interesting new development in Andhra Pradesh is the growing of groundnuts in rice stubbles where they require only small quantities of water for reasonable yields.

12. Pulse crops grown are green and black gram, red gram or pigeon peas, horse gram, and, to a lesser extent, chickpea. They are almost invariably grown either without irrigation in the kharif or after rice on residual moisture in the rabi. According to the International Crops Research Institute of the Semi-Arid Tropics (ICRISAT), which collaborates with the International Institute for Tropical Agriculture in Nigeria on

*14'6 ANNEX 12 Page 4 legume research, prospects for increasing yields of pigeon peas are good; short-term strains have been identified which could be easily incorporated into the cropping patterns of the project areas.

13. Oilseeds, suitable for the project areas are castor and sesamum. Dwarf, quicker-maturing varieties of castor are being introduced. They take 120 to 150 days to mature instead of the previous 240 to 270 days. Yields, too, are increasing and two tons/ha under controlled conditions are easily obtainable. Some of the newer varieties can be grown in rabi.

14. Sesamum is a light yielder and, in some ways, a difficult crop to grow. However, it is also a low water user and the newly developed, non-shattering varieties are said to be suitable for planting in rice stubbles where they will produce a worthwhile crop if irrigated only at the establishment stage.

15. Sunflowers have been tried repeatedly but have made little head- way. Under the climatic conditions of Andhra Pradesh there are problems in heading and the crop is also subject to bird damage. Many difficulties will have to be overcome before planting on a significant scale is possible.

16. Pearl millet (bajra) is becoming an important foodgrain following the development of hybrids that are not subject to green-ear disease which affected the earlier releases. Yields and, in contrast to hybrid sorghum, also cooking quality, have been satisfactory and no market resistance has been encountered. The future of the crop would appear to depend on continuing green-ear resistance and the availability of irrigation. The synthetic strains and straight varieties of pearl millet do not, at present, show the same promise as sorghum.

17. Cereal and minor millets, are wheat, finger millet (Eleusine indica), Italian millet (Setaria italica) and Panicum millet (Panicum miliaceum). Wheat is of minor importance. Under controlled conditions, yields are only about 800 kg/ha. Finger millet is grown where a good water supply is available. It has a place in the cropping pattern since it is resistant to saline and alkaline conditions and requires less water than rice. The other two millets are prima facie dryland crops, or are only likely to be grown on poor, very sandy and gravelly soils where no other cereal is likely to succeed.

18. Chillies are an important cash crop in Andhra Pradesh. Its cultivation has reached a high standard. It is grown either under irrigation or under rainfed conditions. Several small farmers have changed to specialized chilli growing as the best way to maximize the cash return for their labor. Depending on the increasing export markets in the Persian Gulf and the successful further development of the already existing marketing organization, the future of the crop seems assured.

147 ANNEX 12 Page 5

19. Irrigated Cotton is grown mostly in the Nagarjunasagar Right Bank area. Rainfed cotton is grown in the Tungabhadra area. In Tungabhadra it is invariably a mixed crop, mostly with minor millets and gram. In Nagar- junasagar, hirsutum and barbadense varieties and hybrids are grown; in Tunga- bhadra, "desi" (indigenous) i.e. mainly the arboreum and herbaceum species. Spraying in the Nagarjunasagar areas is excessive at present: many farmers spray up to 30 times in the growing season and do so on a routine basis, without reference to actual pest attacks. Conversely, spraying is minimal in Tungabhadra and in the rainfed cotton areas of Nagarjunasagar.

20. The cotton breeding program pursued by India has been the subject of much discussion, the most recent of which is set out in the Integrated Cotton Development Project. 1/ It is applicable to Andhra Pradesh and the release of new, higher yielding and shorter term varieties of hirsutum and barbadense, as well as specific and interspecific hybrids is expected, after a few years, as a regular feature. The growing of the lower yielding and lower value arboreum varieties has declined with the advent of irrigation and is likely to do so also in the future. Pest control based on a careful measuring of infestation has already been introduced in the Guntur area. First results are sufficiently encouraging to assume that the system will be practiced wherever irrigated cotton is grown.

21. Maize is a major crop only in the Pochampad area, although there seems to be no agronomic reason why it should not be grown in the other project areas. Following land shaping and careful attention to correct plant population before the plants become too big, timely weed control and fertili- zation, good yields have been achieved by progressive farmers. A hybrid, released over ten years ago, occupies most of the area under irrigation. Recently a synthetic, Pioneer 1, has given good results. As it is fairly easy to produce seed, its spread in the Pochampad area is likely to be rapid.

E. Irrigation Development in Nagarjunasagar

22. Cropping patterns and irrigation intensities would be constrained by the water available in the reservoir and by the capacity of the conveyance system at the time of peak water demand for paddy: August September and October. Taking Bank assumptions for water demand and field conveyance efficiencies (Annex 5), the total area under kharif paddy is limited to about 315,000 ha. Possible irrigation intensities in the kharif for upland crops depend on the amount of paddy grown; irrigation intensities in rabi are constrained by the water availability in the reservoir.

23. As long as upstream water use remains below the water allocations set by the Krishna Water Disputes Tribunal (Annex 5), additional quantities of water will flow into the NSP reservoir over and above the Tribunal's allocation to NSP and to Krishna Delta projects. In kharif, NSP main canals will run full, with the excess inflows stored in the reservoir or spilled if the reservoir is full. In rabi, water stored in the reservoir would be available for additional irrigation in the NSP and in the Krishna Delta.

148 ANNEX 12 Page 6

24. Because overall water use efficiencies at present are considerably lower than the design values taken by the Tribunal when allocating water to the command areas, excess water is required to meet irrigation demand. A design cropping pattern for the two NSP sub-project areas has been drawn up which is expected to produce an acceptable rate of return for the investments. The water demand of this cropping pattern has been calculated based on present conveyance efficiencies but assuming field efficiencies after full CAD (Annex 5). For the next two decades, because of the excess water available, irrigation intensities in rabi will probably be higher than assumed. However, because of the lower field irrigation efficiencies, at present, and the limited capacity of the two main canals, the kharif irrigation intensity is likely to be lower than the design value.

25. Figures 1 and 2, and Table 3 illustrate the design cropping patterns for the LB and RB commands. They envisage only supplementary irrigation for groundnuts, sorghum, pulses, oilseeds and minor millets in August- October because of conveyance constraints. By October of each year, water levels in the reservoir would enable fairly accurate forecasts of the water available for irrigation in rabi and of the area that can be irrigated in excess of the design cropping plan. Farmers would be able to plant additional areas of rabi groundnuts, pearl millet and sorghum. Table 2 shows the expected yields.

26. Without the project, the areas not presently irrigated will continue to be farmed on much the same cropping patterns as at present. Yields would increase at about 2% per annum, compounded. In the already irrigated areas the ones that received water more recently would attain the level of development reached by the tracts that have received the water earlier. As Figures 3 and 4 show, there is little scope for further intensification. On the contrary, as the "without project" cropping pattern on the already irrigated areas uses just as much water as the "with project" design cropping pattern over the total command and, as without the project water use efficiencies are unlikely to increase significantly, upstream developments will make it increasingly difficult to sustain present yields and cropping intensities.

Command Area Development

27. Command area development will take place on 72,000 ha. It is expected to show benefits over irrigation without CAD, in two ways.

(a) Water use efficiencies below the pipe, i.e. in the field channels and within the fields themselves, will increase from about 45% to 65%. The CAD itself will have only a marginal effect on the cropping pattern but will enable it to be implemented on the entire command.

149 ANNEX 12 Page 7

(b) The stage will be set for the individual farmer to increase his yields and production, hitherto constrained by his irrigation practices, provided he is able, at the same time, to upgrade his farming practices and, where necessary, increase and intensify his inputs applications.

28. A major function of the reorganized and strengthened extension service (Annex 11) is the backstopping and support of the farmers coming under CAD, thereby ensuring continuing accelerated growth of the farm production made possible by CAD.

29. Table 4 shows the situation expressed in units of 100 ha. In the Nagarjunasagar project areas, it shows the expected effects of irrigation only (paras 22-26) and irrigation plus CAD. In Pochampad, where the area is already irrigated, without CAD, only moderate yield increases are expected. In Tungabhadra, irrigation will be available in the proposed CAD project area outside the framework of the present composite project. Therefore, the table shows only the expected effects of CAD over the expected irrigation only situation.

II. Marketing and Storage

Marketing

30. Andhra Pradesh is producing rice in excess of its internal requirements; is the major castor bean producer of India and one of its major cotton- growing states. There is usually a surplus of other foodgrains, with the exception of wheat.

31. Farmers sell their produce to private merchants and some of their rice, (the assessed levy) to the Food Corporation of India (FCI) who normally buy in the form of husked rice from the mills. The FCI now plans to buy also from farmers, to arrange for custom husking and to build their own mills. It is making attempts to control the quality of milling, however with investment constraints and a shortage of spare parts, progress in this field is slow.

32. The Cooperatives, through the State Cooperative Marketing Federa- tion are also buyers of farm products and act, within the State, as a paral- lel organization to the FCI. The State Cooperative Marketing Federation will buy irrespective of whether they can sell immediately. As they have sufficient funds, they are able to give advances on purchases.

33. The major influence on the market is the fact that rice may not be traded to another State without GOI's permission and often the State puts restrictions on inter-District, or inter-regional foodgrain movements. Private buyers, and FCI over and above its mandatory buying obligation, restrict purchases until restrictions on grain movements are lifted. Once production increases from the project materialize, it will become essential 150 ANNEX 12 Page 8 for FCI to become a buyer of last resort for rice, sorghum, groundnuts and pearl millets; also they will have to ensure that the farmer is paid without delay.

Storage

34. The State Cooperative Marketing Federation owns some storage but for most of their needs, and the FCI for all its needs, rely on GOI's Central Warehousing Corproation and GOAP's State Warehousing Corporation. The two corporations operate own and rent premises and they have long-standing plans to expand their own facilities, most of which, at present, is flat storage. The State Warehousing Corporation receives a grant from GOI which GOAP is obligated to match. Within the last year,the funds for both organizations were severely restricted, thereby delaying the construction of new facilities. In the past, turnover and disposal of grain from storage was rapid, storage space rented cheaply and became an unattractive investment for private enterprise. Unless GOI and GOAP are able to implement their proposed warehouse development program, production increases from the project could result in a severe shortage of storage space in the project areas.

35. Both corporations will store for all customers and their documents are negotiable with the cooperative banks. However, in practice, they do most of their business with FCI, the State Cooperative Marketing Federation, private grain merchants and processors. Very little business is done with farmers and the small producer cooperatives.

36. Training in storage technologies are given by the Central and State Warehousing Corporations to merchants and traders and by GOI's Save Grain Campaign staff to farmers. The latter train farmers selected by the Block Development Officers and expect trainees to impart their knowledge to others. They also carry out fumigation and vermin poisoning of farmers' stores. A one ton grain storage bin has been designed, costing Rs 330 and is being produced against firm orders by the Agro-Industries Corporation. Its marketing channels have not been decided and consequently demonstration and distribution is slow. There would appear to be a scope for coordination with the Extension Service, possibly by Save Grain Campaign Experts acting as SMSs (Annex 11).

April 1976

151 ANNEX12 Table 1 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Present Cropping Pattern in the Project Areas

Nagariunasagar Left Bank Nagarjunasagar R1ghtBank Pochampad Tungabhadra Irrigated Not irrigated Irrigated Not irrigated % area % area (% of area) ------(% of area) -----

Rice Kharif 76 15 39 5 44 4 Rabi 66 - 12 -

Sorghum Kharif 16 30 12 12 24 10 Rabi 8 10 6 5

Groundnuts Kharif 8 20 5 8 2 16 Rabi 8 - 9 -

Pulses & oilseeds Kharif - 15 12 39 7 3 Rabi - - 26 -

Pearl millet Kharif 5 _ - 1 - 7 Rabi - - 5 -

Minor millets - 5 - 30 2 58

Chillies - 5 12 - 2 1

Cotton - - 17 - - 1(+)

Maize - - - - 29

Total 187 100 155 100 110 100

l/ Irrigated from tanks @ 8 ANNEX 12 Table 2

INDIA ANDHRAPRADE5H IRRIGATION AND CADCOMPOSITE PROJECT Nagarjunasagar Sub-project Areas Present and Expected Future Yields (tons/ha)

Future Present Without With CAD CAD Full irri. Partial irri.

Rice: kharif 2.2 2.7 4.0

rabi 2.L 2.9 4.5

Sugarcane 60.0 72.0 85.0

Groundnuts: kharif 0.8 1.0 1.5

rabi 1.0 1.2 1.7

Cotton 0.9 1.1 2.0

Chillies 0.7 0.9 1.2

Sorghum: plant 0.5 o.6 4.0 3.0

ratoon 0.3 0.4 3.0

Minor millets: kharif 0.5 0.6 1.0 .75

rabi 0.3 0.35 1.0

Pulses and Oilseeds: kharif 0.6 0.7 1.5 1.3 rabi 1.0 1.5

on residualmoisture 0.3 0.35 0.5

Pearl millet: kharif 0.5 0.6 3.5

rabi 1.5 1.8 3.5 Sugarcane 60.0 72.0 85.0

Note: In the Tungabhadraarea presentand futureyields are expectedto be 80% of those in the other three projectareas.

153 ANNEX 12 Table 3

INDIA

ANDHFA PRAL5BI IRRIGATION AND CAD OOIPCOITR PROJECT

Design Cropping Pattern, Nagariunasagar Commands

LEFT BANK RIGHT BANK TOTAL (357,085 ha) (428,340 ha) (785.X25 ha) area (000 ha)% area (000 ha area (000 ha)

Rice: black soils 50.0 1 98.5 23 148.5 19

red soils 110.7 31 55.7 13 166.4 21

Groundnuts: kharif 60.7 17 38.6 9 99.3 13

rabi 53.6 15 42.8 10 96.4 12

Chillies 17.9 5 47.1 11 65.0 8

Cotton L4.3 a 51.4 12 65.7 8

Minor millets 3.5 1 4.3 1 7.8 1

Sorghum: plant 42.8 12 90.0 21 132.8 17

ratoon 23.6 8 90.0 21 118.6 15

Pulses and Oilseeds: kharif 53.6 15 38.6 9 92.2 12

rabi 17.9 5 - - 17.9 2

residual moisture 42.8 12 72.8 17 115.6 15

Pearl millet 42.6 12 38.6 9 81.4 10

Sugarcane 3.6 1 4.3 1 7.9 1

Total 542.8 152 672.7 157 1,227.8 154

IF3M;

* X

154 INDIA

ANDhRA PRADESH IRRICATION AND CAD COMPOSITE PROJECT

Present and Etpected Yields and Production (far 1cn ha units)

PRESENT SITUATION EXPECTED FLTURE DEVELOPMENT Area Ne Acea Pat Yet Creiated With-nt CAD Project With CAD Praiert Area Yil1d Pradu .tion Area yield P .aduettan Area yiald ProdPntio Area Yield Praduction (percent) (tans/ha) (tans) (pet) (t) (tans/ha) (tans) (nernent) (tons/ha) (tons) (vereent) (tons/ha) (tans)

Nagarionasagar Left Bnas

Ries Kh 76 22 117.2 137 2. 28.6 45 2.7 121.5 45 4.0 180.0 66I . 1)8.4 2 2.4 4.8 -- . -- -- 45-- SorghuB Kh 16 0.5 8.0 34 0.5 17.0 12 0.6 7.2 12 3.5 36.0 R 8 0.3 2.4 6 0.3 1.8 8 0.4 3.2 8 3,0 24.0 Greundnsts Kh 8 0.8 6.4 20 0.8 16.0 17 1.0 17.0 17 1.2 1 20.4I R 8 1.0 8.0 -- 1.0 -- 15 1.2 6.0 15 1.7 25.5 Pearl Millet Kh 5 0.5 2.5 - 0. - 0.6 ------R -- 1.5 -- -- 1.5 -- 12 1.8 21.6 12 3.5 42.0 Polees and Oil- sends Kh __ 0.6 _ 15 0.6 9.0 15 0.7 10.5 15 1.3 19.5 R ------5 1.0 5.0 5 1.5 7.5 RM 2/ __ 0.3 _ 2 0.3 0.6 12 0.35 4.2 12 0.5 6.0 Chillies __ 0.7 -- 3 0.7 2.1 , 5 0.9 4.5 5 1.2 6.0 Cotton -- 0.9 -- 0.9 4 1.1 4.4 4 2 80 Minor MItlets -- 0.5 - I5 C.5 7.5 1 0.6 0.6 1 0.75 8 75 Sugarcana _- 60.0 -- -- 60.0 -- 1 72.0 72.0 1 85.8 85.0 Total Cropping Intensity 087 -- -- 110 -- - 152 -- 1052 -- --

Natarjonnasgar Ripht BaPk Rica Kh 39 2.2 85.8 4 2.2 8.8 36 2.7 97.2 36 4.0 144.0 R 12 2.4 28.8 1 2.4 2.4 _- 2.9 -- -- 4.5 --- Sorgh-s Kh 12 0.) 6.0 17 0.5 8.5 21 0.6 12.6 21 3.8 1/ 63.0 R 6 0.3 1.8 2 0.3 0.6 21 0.4 8.4 21 3.0 63.0 Gro-od-ots Rh 5 0.8 4.0 6 1.8 4.8 9 1.0 9.0 9 1.2 ]J 10.8 R 9 1.0 9.0 1 1.0 1.0 10 1.2 12.0 10 1.7 17.0 Peerl Millnt Kh -- 0.5 -- -- 0.5 -- -- 0.6 ------R 5 1.5 7.5 2 1.5 3.0 9 1.8 16.2 9 3.5 31.5 Poises and Oil- seeds Kh 12 0.6 7.2 40 0.6 24.0 9 0.7 6.3 9 1.3 11.7 R ------1.0 -- - 1.5 -- RM- 26 0.3 7.8 ------17 0.35 6.0 17 0.5 8.5 Chilli.. 12 0.7 8.4 3 0.7 2.1 11 0.9 9.9 11 1.2 13.2 Cotten 17 0.9 15.3 -- 0.9 -- 12 1.1 13.2 12 2.0 / 24.0 Miner Millets -- 0.5 -- 30 0.5 15 1 0.6 0.6 1 0.75 - 0.75 Soasrcsne -- 60.0 -- -- 60.0 -- 1 72.0 72.0 1 85.0 85.0 Total Cropping Intensity I55 -- -- 106 -- -- 157 -- -- 157 -- --

Rire 44 2.2 96.8 44 2.7 118.8 44 4.0 176.0 Sorghun Kh 17 0.5 8.5 17 0.6 10.2 17 4.0 68.0 R 7 0.3 2.1 7 0.4 2.8 7 3.0 21.0 Groundnuts 2 0.8 1.6 2 1.0 2.0 2 1.0 3.0 Pilses and Oil- s.ads Kh 2/ 4 0.6 2.4 4 0.7 2.8 4 1.5 6.0 10i 3 0.3 0.9 3 0.35 1.1 3 0.5 1.5 Minor Muinlto 2 0.5 1.0 2 0.6 1.2 2 1.0 2.0 Chillies 2 0.7 1.4 2 0.9 1.8 2 1.2 2.4 Maize 29 1.5 43.5 29 1.8 52.2 28 4.2 121.8 Total Cropping Intensity 110 -- -- 110 -- --

toneabhadra Rice 30 2.3 69.0 30 3.4 102.0 S.rghan5 0.5 2.5 5 3.4 17.0 Crenadneta IS 8 8 12 15 t.3 20.0 P.lses and Oil- a seeds Kh 3 0.9 2.7 3 1.3 3.9 9 M

edRM g10 0.6 6.0 10 1.3 13.0 Pearl Millet 15 0.3 4.5 15 0.4 6.0 Pr, Mi.nr Millets 2 0.5 1.0 2 0.9 1.8 Chillis 5 0.8 4.0 5 1.0 5.0 CPtton 25 0.9 22.5 25 1.7 42.5 Tntsl Cropping IntensttY 110 -- -- 110 -- --

Notes: 1/ With partial irrigation Js August-Ontober ( - 2! RI.Residual Moisture In Rh-kh-rif (sunnr) R-bsbi (winter) INDIA

ANDHRA?RADESH IRRIGATION AND CADCONPOSITE PROJECT AWEX 12 Figure 1 Design CroppingPattern, NagarjunasaKa.r .aft Bank Command (CroppedArea: 882,000ac) Sugarc ne 1% 100 A S O N D J F M A M J 100

/ \ Spk 4ssS 1Ss \ V / groundinuts/ 90 /\ \i\ X \ X > \ S / 15% / 90

80 Sor um ratoon 80

t \ \5% \ \ \ \/ \ \ \ / / pulses Legend: 70 otX '4,--- ,F, 70 : fully irrigated 60 \ illies\ 5\\ pe60 : pertly irrigated

50 | d pearl 127mllet / not irrigated r-,4 112%

140 red soils 31% 140

30 Rice 45% 30

20 20

10 10 black soils 114% s 0~~~~ J A SO N D J F M A m J

LION ~ ~ ~ ~H e/ X - -- ' INDIA ANNEX 12

ANDHRAPRADESH IRRIGATION AND CAD CONPOSITE PROJECT F 2

Design Cropping Pattern, Nagar,junasagarRight Bank Commanti (Cropped Area: 1,05!,000 ac) minor millets 1% c e 1% 100 J A S 0 ,N D ,J ,F M _ A7, M J

90X e S S f ee &

A21% \\ \ \\/ \ \ \ \ +NW um Legend: 80 / D fully irrigated ratoon 70- 70 -Ipartly irrigated

60/ cotton 12% / __/ : not irrigated 50- /chillies 11%

40- S riuihui \9i \ \ \ g /pearl millet 9%

30/ red 13%

20- Rice 36% 10_ uls 7 black 23%

J A S 0 N D J F M A M J

ul -J INDIA ANNEX12 ANDHR&PRALESHI IRRIGATION AND CAD COMPOSITEPROJECT Figure 3 Present Cropping Pattern Nagarjunasagar Left Bank Composite Cropping Pattern of Areas Already Developed

J A S , 0 , N D , J F M , A M __J

Groundnuts 8%

90 Ries 8% Sorghum 16%

80 / / Sorghum 8%

40 | Rice 76% Rice 58%

10 Groundmits 8% Pearl ail1. J A S 0 N D J F M A J4J 0, INDIA

ANDHRAPRA1ESH IRRIGATION AND CAD COMPOSITE PROJECT ANNEX 12 Present Cropping Pattern Figure 4 Nagarjunasagar Right Bank Composite Cropping Pattern of Areas Already Developed

J A S 0 N D J F M A M J 100- Rice 12% 90 Pulses 12%

80 Sorghum 12% 7 iet% Sorghum 6% 70 Groundnuts 5%

60 Chillies 12%

50 / Cotton 17%

30 Pulses on RM Rice 39% 26% 20/

10 -AI- Groundnuts 9% CDI Jl1 J A S 0 N D J F M A M J N

Note: RM residual moisture kD ANNEX 13 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Crop Inputs and Farm Budgets

(NSP Command Area)

General

1. Present agricultural practices in the project areas, and the expected changes in cropping patterns, yields and production are described in Annex 12. This annex discusses impact on the individual farm. The purpose of this analysis is:

(a) to estimate effects of prcject components on farm incomes for representative farm sizes and cropping patterns in order to determine their distributional impact;

(b) to compare income levels of project farmers with those of farmers in other areas;

(d) to analyze effects of different Government policies regarding water charges; and

(e) to estimate economic returns to water for different crops in order to guide the Government in its water allocation decisions.

Crop Input Requirements

2. Present and projected unit input requirements under the project are given in Tables 1 and 2. The estimated current levels of inputs are derived from an agricultural survey carried out in the Pochampad and NSP, LBC command areas in 1974. These results have been adjusted and updated information supplied by the Department of Agriculture. Future requirements are based on recommendations by the Department of Agriculture and on observed cultural practices of progressive farmers in the area.

Crop Budgets

3. Projected financial crop budgets after full development are presented in Table 3. The prices usedl for this analysis are discussed in Annex 14, Appendix 1. Both family and hired labor have been costed at

160 ANNEX 13 Page 2

Rs 4.00 per man-day, which is approximately equal to the average market wage. The imputed cost of a pair of bullocks to the owner is roughly equal to the daily rental charge (Rs 8.00 excluding driver). This cost has consequently been applied to all crops.

Economic Returns to Irrigation

4. Water is more scarce than the other main factors of production (i.e., land and labor). Consequently, preference should be given to those crops that give the highest economic return per unit of water. Table 4 gives both the net economic return per ha and per cubic meter of water (at the pipe outlet). The results show:

(a) ID crops in general give higher returns per unit of water than IW crops;

(b) supplementary irrigation of ID crops during kharif typically give higher returns than rabi irrigation, and

5. These findings are important for the water allocation within the command areas. The ID localization should be strictly enforced. In principle, farmers are allowed to grow any crop on IW lands, but in many cases the irrigation system is operated in such a way that long duration ID crops such as cotton and chillies cannot be grown. Since these crops give substantially higher returns to water than rice, the operation of the irrigation system should be such that ID crops are encouraged rather than discouraged. In the long run, the IW areas on red soils should be relocalized to ID.

Model Sizes for the Farm Budget Analysis 1/

6. Households in the project area can, somewhat arbitrarily, be classified into four groups according to their economic situation:

Landless workers most of whom earn their living as daily workers in the fields, in construction or distribution, make up about 60% of the households in project areas.

Sub-marginal farmers cultivate less than 2.0 ha of land, which is the minimum area of unirrigated land that is required to support an average famly. Frequently, half of the household income is from work outside the family farm. In the farm budget analysis, a 1.0 ha farm has

1/ Farm size distributions for NSP Left Bank, NSP Right Bank, Pochampad and Tungabhadra Command Areas are shown in Table 9.

161 ANNEX 13 Page 3

been chosen to represent those 20% of the households that operate less than 2.0 ha.

Small farmers cultivate an area of 2.0 to 4.0 ha and under unirrigated condition they typically have a per capita income that is well below the national average. About 10% of the housholds belong to this category, which is represented in the farm budget analysis by a 3.0 ha farm.

Medium farmers cultivate 4.0 to 6.0 ha that under unirrigated conditions give them an income fairly close to the national average. With irrigation, their incomes are more than double the average. About 5% of the households belong to this catgeory, which is represented by a 5.0 ha farm.

Large farmers own more than 6 ha and constitute the rural elite. In the Nagarjunasagar command areas, they constitute about 6% of the households but own roughly half of the land. It is expected that many of these holdings will be split up when the land ceiling legislation is strictly enforced. However, a large number are joint family holdings within the limits of the law. 1/. The average holding size for "large" farmers is roughly 10.0 ha and this size has been chosen to represent this group in the farm budget analysis.

Farm Budget Analyses

7. Farm budgets have only been calculated for the two Nagarjunasagar command areas. These budgets, however, give a fairly close picture also of the effects of the CAD and agricultural extension program in the Pochampad and Tungabhadra areas. Since the already developed areas of NSP will experience a gradual decrease of their water allocation, eight farm models have been chosen for the budget analyses: 1.0, 3.0, 5.0 and 10.0 ha farms, presently with irrigation and without irrigation.

8. Budgets on an annual cash flow basis for the eight representative farm models are given in Tables 3 to 5. The following assumptions have been made in the analyses:

1/ The land ceiling in Andhra Pradesh depends on the soil classification and is, for a family of five, 35 to 54 ac (approximately 14 to 22 ha) of unirrigated or 10 to 27 ac (approximately 4 to 11 ha) of irrigated land. 162 ANNEX 13 Page 4 (a) Crop Yields and Total Input Requirements

Projected yields used in the analyses are given in Annex 12. Crop inputs have been estimated based on the input requirements given in Tables 1 and 2 1/.

(b) Hired Farm Labor

The monthly labor requirements (based on Table 2) have been calculated for each farm size. Since the number of family members varies with the farm size, the total labor availability for each farm model has been calculated. The size of hired labor thus depends on availability of family labor. However, most "marginal" farmers hire labor during the harvest season. The family members of "large" farmers rarely work in the fields, and consequently, it is assumed that they use only hired labor. At full development, it is assumed that about 30, 60, 75 and 100% of the field labor requirements of a 1.0, 3.0, 5.0 and 10.0 ha farm, respectively, are supplied by hired labor.

These have not been included in the analysis due to lack of data. In general, however, they constitute about one-third to one half of the total income of "marginal" farmers, and their relative importance declines, with larger farm sizes. Consequently, the farm budgets underestimate the income levels and give an exaggerated picture of relative income differences.

(d) Prices

Present and future production and inputs are valued using the projected financial prices (in 1976 Rupees) which are discussed in Annex 14, Appendix 1.

(e) Subsidies

Compared to current world market prices, the prices that Indian farmers pay for nitrogen and phosphate fertilizers are heavily subsidized. However, the projected 1985 world market prices (in constant 1976 terms) are fairly close to present Indian prices. Consequently, for the farm budget analysis, it is assumed that the present controlled prices will remain unchanged. 2/

1/ Only fertilizer, manpower and animal power requirements are shown in Tables 1 and 2. Although seed and pesticide requirements have not been shown, they have been taken into account in both financial and economic analyses.

2/ Alternatively, it might be assumed that the rates of subsidy remain unchanged. This assumption would lead to a minor increase in the estimated net farm incomes. 163 ANNEX 13 Page 5

(f) Cropping Patterns

Reflect the average for the project area, but give a somewhat higher intensity for the small farms and somewhat lower for the large farms (Table 8).

(g) Irrigation Costs

Based on the analysis in paras. 13 to 31, it has been assumed that water rates, commercial crop rates and land cesses would be kept at their present levels (approximately Rs 100/ha) and that the betterment levy would be increased and give an annual cost of Rs 500 per ha. The annual repayment of the on-farm development loan would amount to Rs 250 per ha.

(h) Family Sizes

Based on the 1974 agro-economic survey, the following family sizes have been assumed:

Hloldings Number of Persons Number of Workers

1.0 ha 6.2 2.6

3.0 ha 6.8 2.5

5.0 ha 7.3 2.4

10.0 ha 8.0 2.3

The decline in the number of workers per holding in spite of increasing family sizes is due to a declining labor force participation ratio for women. For the "submarginal" farmers, the female participation ratio is roughly equal to the average for the whole population. None of the women on the "large" farms would normally take part in agricultural work.

Distributional Effects of the Project

9. For farms that would be provided with irrigation under the project, the income levels would change as fo:Llows:

164 ANNEX 13 Page 6

/a Net Farm Income (Rs) Relative Increase

Farm Model Area P W WI W due to Project % /b

1.0 ha LBC 1,380 1,690 2,800 5,620 230 RBC 1,190 1,560 2,660 5,870 280

3.0 ha LBC 3,870 4,830 8,150 15,530 220 RBC 3,710 5,280 7,650 16,870 220

5.0 ha LBC 6,050 7,700 12,850 24,700 220 RBC 5,880 8,220 12,050 27,750 240

10.0 ha LBC 11,210 14,090 23,260 46,770 230 RBC 10,680 15,910 24,300 54,690 240

/a P = Present, W = Future without Project, WI = Future with irrigation infrastructure but no CAD, W = Future with Project (irrigation infrastructure, CAD and agricultural extension services).

/b Relative increase = (W - W)/W.

10. Net farm incomes would more than triple due to the full project (irrigation infrastructure, CAD and extension services). However, the increase before water charges is substantially higher. The proposed water charges would collect approximately one-seventh of the incremental farm income.

11. The increase in net farm incomes due to the irrigation infrastructure is relatively low because of the proposed high water charges. These charges are approximately equal to 23% of the net incremental farm income before water charges.

12. Few data exist on non-farm activities in the project area but it is estimated that the average per capita income in the project area is about Rs 800 (US$90) at present. After full development has been reached in the 1990s, the average income would be about Rs 1,600 (US$180) after allowing for expected population increase. The distribution of land is such that about three-quarters of the families have a per capita income less than the average for the project areas.

Recovery of Project Costs

13. The cost of NSP irrigation infrastructure under the project is approximately Rs 1,800 per ac (Rs 4,500 per ha). The average cost for the irrigation system in the already developed parts of NSP is Rs 2,000 per ac(Rs 5,000 per ha), since the main canals through these areas have been designed

165 ANNEX 13 Page 7 to serve also the new areas. The average cost for canal and drainage infrastructure is thus about 1,900 per ac (4,700 per ha). The total sunk costs in the dam, expressed in 1976 currency values, are approximatelyRs 2 billion. Some of the costs for the dam should, however, be allocatd to the hydroelectric power station presently under construction. Since there are no established figures on the projected power output three quarters of the dam costs have, for the purpose of this analvsis, been allocated to the irrigation component. Total cost for the dam and the canals are on order of Rs 2,600 per ac (6,500 per ha). The annual capital recovery cost (at 10% interest and discountedover 30 years) would amount to about Rs 275 per ac (Rs 680 per ha).

14. In principle,the betterment levy is the prime vehicle for recover- ing the capital costs of irrigationprojects in Andhra Pradesh. The 1969 act provides for a levy of up to half the increase in land values due to the project 1/ paid in 20 annual installmentsthat include interest on the outstanding amount. Land values in the already developed parts of NSP increased from about Rs 500 per ac (Rs 1,250 per ha) to more than Rs 5,000 per ac (12,500 per ha). This would permit a levy on the order of Rs 2,000 to 2,500 per ac or Rs 230 ( Rs 570 per ha) to 290 per ac (Rs 720 per ha) p.a. inclusive of interest. At present, however, the levy is purely nominal: Rs 5 and Rs 10 per ac Rs (13 and 25 per ha) per year for ID and IW lands, respectively.

15. Of greater practical importanceat present are the water rates that form a part of the land revenue. Their level depends on both the type of irrigationprovided and the soil classification. They typically amount to Rs 20 and Rs 30 per ac (Rs 50 and 75 per ha) for ID and IW lands, respectively. The land cess, a local tax, is calculated as a 37% addition to the land revenue, which brings the water charges up to about Rs 27 and Rs 41 per ac (Rs 68 and 103 per ha) for ID and IW lands, respectively.

16. Certain commercialcrops, such as cotton and sugarcane,are assessed special taxes when irrigated. These taxes typically range from Rs 15 to Rs 25 per ac (Rs 38 to 63 per ha). The total water related charges are roughly Rs 50 per ac (Rs 125 per ha) for single irrigated ID and IW lands. Since the design cropping pattern assumes some double irrigation,the average charge would amount to about Rs 62 per ac (Rs 150 per ha).

17. A bill is now pending before the AP legislaturewhich would substitute the betterment levy with a special tax on certain irrigated lands. This tax, which would be paid over a 10 year period, would raise the total water changes to about Rs 110 per ac (Rs 270 per ha).

18. The arrangementsfor recovery of the costs for on-farm development are discussed in Annex 10. The average cost for CAD would be about Rs 2,100 per ha (Annex 10). Under the project, the farmers would pay the full costs for civil works and a 15% surcharge on the civil works costs to cover a part of GOAP's engineering overhead. Based on surveys in the project area, it

1/ In the law the increase is defined on a "before and after" basis. 166 ANNEX 13 Page 8 has been estimated that about 20% of the farmers would be ineligible for ordinary bank loans and would have to take special loans at 14% interest. Thus, the average repayment would amount to about Rs 300 per ha in nominal terms. Taking into account the expected rate of inflation, this gives a cost of about Rs 250 per ha (in 1976 currency value) after the two-year grace period. This figure has been used in the farm budget analysis.

Farmers' Ability to Pay Water Charges

19. For the estimation of the farmers' ability and willingness to pay water charges, the concept of project rent had to be introduced. In simple terms, project rent can be defined as the incremental net income when all factors of production, except water and related services supplied by the project, are given the rewards that are required for their cooperation. Project rent is equal to the net incremental farm income minus the necessary rewards to family labor and management for their extra input of labor and entrepreneurship.

20. This calculation is complicated by the uncertainty about the yields and the crop prices that the farmer can expect. One way of handling this problem is by introducing explicit probability distributions and a function that shows the "utility" or "value" of different income levels. (The theory behind the utility function is that the value of an additional dollar is less if the income already is US$100 than if it is only US$50.) Unfortun- ately, this would lead to severe estimation problems. Some studies of farmers' behavior, however, show that simpler approach is feasible. The risk aversion of the farmer can be taken into account by using a certainty equivalent (CE) instead of the expected value (EV). 1/ If the yields have a normal distribution which is known, CE can be expressed as a function of EV:

CE = EV - n x s

Where s = the standard deviation

n = a factor that expresses the farmers' risk aversion.

21. Some empirical studies 2/ indicate that the farmers' choice of cropping patterns and production techniques can be accurately predicted for values of n in the interval I to 2. The value of n typically decreases when the farm size increases. For this analysis, it is assumed that n = 2 for "submarginal" farmers (1.0 ha) and n = 1.5 for "large" farmers.

22. Historic yield figures from the NSP area show that yields in two years out of three are within roughly 20% from their average values. This gives s = 0.2 x EV. The project would make the yields more stable, but

1/ For a fuller but still non-technical description of these concepts, see for example, H. Raiffa: Decision Analysis, Addison-Wesley, 1968.

2/ These studies, which have been carried out by the Development Research Center and the South Asia Projects Department, have not yet been published.

167 ANNEX 13 Page 9

the farmers are projected to shift to commercial crops, such as cotton and chillies that show large price variations from year to year. With the project, it is thus estimated that s = 0.15 x EV.

23. The next problem that arises in the calculation of project rent is the value of family labor. Studies in India indicate that the market wage rate is slightly less than the marginal productivity of labor. This implies that family members typically get a somewhat higher "return" to their labor than the wage rate. Consequently, a 20% premium has been put on family labor.

24. The reward for management and entrepreneurship can, in part, be related to the capital employed in the production if this is not included in

the crop production cost. But it is primarily a premium for the special skills that farm management requires. Furthermore, many activities are not included in the crop labor requiremients,for example, applying for seasonal credit, listening to extension workers, hiring and directing daily laborers, etc. Relatively more of this is required on the "large" farms than on the "submarginal" farms. Consequently, it has been assumed that the "management fee" is equal to 10% and 20% of the net returns on the 1.0 and 10.0 ha farms, respectively.

25. The project rent has been calculated for one 1.0 ha farm and one 10.0 ha farm in both the Left Bank and the Right Bank (Tables 7a and 7b). The resulting project rents are in the same magnitude for all four farm models:

Project Rent (Rs/ha)

Irrigation Infrastructure, only 600-720

CAD, only 490-570

Whole project, at full development 2,200-2,500

26. There is an important time element in the project rent. Full development will not be reached until the mid-1990s. The project rent resulting from the irrigation infrastructure is based on projected yields a couple of years after the completion of construction. This is also the case for the CAD component. The farmers' willingness to participate in the CAD Program depends only on his anticipated income increase due to land leveling and not the potential benefits he will reap due to extension at a later stage. Thus the project rents for the irrigation infrastructure and CAD above set the limit for what is feasible in the short- and medium-term.

27. At present, only the costs for civil works under the CAD Program are, nominally, recovered and this results in an annual cost of about Rs 250 per ha. However, the analysis shows that its is feasible to charge the farmers for GOAP's costs for planning, design and supervision. A full recovery in nominal terms, of these costs would increase the loan repayments by about Rs 100 per ha. 168 ANNEX 13 Page 10

28. The betterment levy is set when the project is completed or near completion. It is not feasible to change it with time. Consequently, it is recommended that the betterment levy is set at a level corresponding to the project rent calculated above. Future increases in project rent could be collected through increases in the water rates.

Level of Cost Recovery

29. Four basic alternative levels of water charges can thus be identified. Cost /1 Benefit/l Rent /1 Annual Recovery Recovery Recovery Charge Index Index Index Alternative (Rs/ac) % % %

I Present Policy: The betterment levy is limited to Rs 100 and Rs 200 per ac for ID and IW lands, respectively. Water rates, land cesses and commercial crop rates kept at their present levels. Rs 40 per ac (Rs 100 per ha)) 62 21 13 26 II. Proposed Legislation: The betterment levy is replaced with the special tax on irrigated lands. Other water related charges remain unchanged. 110 37 23 46 III. Nominal Cost Recovery: The betterment levy is set at Rs 2,600 per ac but following present practice no interest would be charged on the outstanding amounts. Other water related charges kept at their present level 170 58 35 71 IV. Full Recovery of Canal Infra- structure Costs: Rs 1,900 per ac is paid over a 30 year period with a 10% interest. Rs 20 per ac is collected for 0 & M costs. 220 75 46 92 V. Full Recovery of 0&M and Capital Costs: Rs 2,600 is paid over a 30 year period with a 10% interest. Rs 20 per ac is collected for O&M costs. 295 100 61 123 /1 Cost Recovery Index: Ratio of water charges to annual O&M and capital recovery costs (at 10% interest, repaid over 30 years). Benefit Recovery Index: Ratio of water charges to net incremental farm income. Rent Recovery Index: Ratio of water charges to project rent. 169 ANNEX 13 Page 11

30. The analysis clearly shows that full cost recovery (Alternative V) doubtless would stretch the farmers' ability to pay too far and their incentive to use irrigation water would be greatly impaired. A cost recovery in line with Alternative IV(Rs 240 per ac or Rs 600 per ha) should, however, be feasible. This is especially the case since the combined effects of subsequent CAD and extension input would result in considerable income increases. Because of the highly concentrated land ownership in the NSP area, a progressive charge structure would be desirable. However, this is not deemed feasible for collection reasons.

31. The loans for on-farm development would be repayed in nominal terms (para. 18). Thus, the real level of cost recovery would depend on the future rate of inflation:

Rate of Inflation Cost Recovery Index

0% 89%

5% 69%

10% 54%

32. Before the exceptional price increases in 1973/74 and 1974/75, India has experienced a long period of very modest inflation. There are also clear indications that the domestic price situation again has stabilized. Thus, for this analysis, it has been assumed that the rate of inflation during the repayment period for CAD loans would be the same as during the twelve year period ending in 1972, or 6% annually. This would give a cost recovery index of 66% for the CAD component.

April 1976

.170 INDIA ANNEX 13 ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT Table 1

Present & Expected Fertilizer Application Rates. NagarJunasagar Area (kg nutrient/ha)

Yield N P K T (tons/ha)

Rice Kharif P 2.2 80 50 - 130 W 2.7 100 50 - 150 W 4.0 120 60 30 210 Rabi P 2.4 80 50 - 130 v 2.9 100 50 - 150 W 4.5 140 60 40 240

Sugarcane P 60.0 120 60 40 220 w 72.0 150 60 40 250 w 85.0 175 70 50 295

Groundnuts Kharif P .8 10 30 - 40 W- 1.0 10 30 10 50 W 1.5 15 40 30 85 Rabi P 1.0 10 30 - 40 IV 1.2 10 30 10 50 W 1.7 15 45 35 95

Cotton p .9 50 - - 50 iW 1.1 50 25 - 75 w 2.0 100 30 20 150

Chillies P .7 150 50 20 220 V .9 175 50 20 245 w 1.2 190 60 30 280

Sorghum Plant p .5 10 - - 10 w .6 10 - - 10 W 4.0 120 50 30 200 Ratoon p .3 10 - - 10 iW 10 - - 10 W 3.0 100 40 30 170

Minor millets Kharif p .5 - - - - W .6 - - - - w 1.0 50 - - . 50 Rabi p .3 - - - - W .35 - _ _ _ W 1.0 50 - - -

Pulses & OilseedsKharif p .6 - _ _ _ iW .7 - _ _ _ W 1.5 10 30 - 40 Rabi P - - - -

W 1.5 10 30 - 40 Rabi p .3 - - - (w/o irrigation)W .35 - - - - w .5 _ _ _ _

Pearl millet Kharif P .5 W .6 - - - W 3.5 100 50 20 170 Rabi p 1.5 80 20 - 100 IW 1.8 90 30 - 120 W 3.5 100 50 20 170

Note: 1. P = (in vertical column) present fertilizer use; W = future without project situation; W = future with project situation.

2. P (in horizontal column) = P205;K = K20

3. For sorghum (plant & ratoon) and kharif pearl millet the W figures refer to new area brought under irrigation under the project. In areas already irrigated the W values would be about midway between those shown for P & W, due to a partial change to hybrid sorghum and pearl millet under the influence of the present extension service. *171 4 - 0 4 00, 0,1.4 4. 4.

0.4 00 400 0, 0 .4 . 0 0 4 01 2 -, 0 0 .0 .4 0 - 0 0 00 0 -

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0, 0 .4 0 .0 .4 0, 0 .4 0 0 400

.4 0 0 0 0 0 .4 0 0 000 4 .0 0 0 0 0 0 0 0,4 0 0 0 0 0 0 0 0 '- 0 0 0 .4 0 .4 0 0 0,000.4 0 .4 0 000

4 0 0 0 0 0 0.0 0 0 0 0 000 0' .4 .4 0 .4 .4 0 040

.4.4 0 2222 0, 40000O 1. 24.4

0 .4 .4 0 0, 0 4 0 0 .4 o

.4 0 0 0 .4 .4 .4 0 .4. . 0 0 -00

0 0 0 0 0 .4 .0 4 0 0 0, 0 0 0 00 0 .4 0 - 0 .4 0 00 00 22,2

0 0 4 0 0 .4 .4 0 .4 .4 0, 0 0.40 .4 0 4 0 0' - 0 000 040 0 0 0 0 0, 0 0 0 00 0,0,0.4 0 .4 0 0 0, 0 4 .4 0 0 0 0 0 - 00.4 .0 0 .4 0 0, 0 .4 0 .4 0 0 .4 0 0. 0 000 .4 0 .4 0, o 000

.400.40 0 .4 0, 0 2 2 o 0 0. 0 0

0.0 004004000440040004040400 00 0 00000. .4.00000.4040.40.40 04

0.400, 4.40 0 000 0 0 0230 0 0 0 0. 0 000 0 0 0 0 0, 4 0 0 00.0 0 000 .j 00 0 0 0 2 20.: o4oi2I4o 0 0 0 0 0 0 .4 0 0 0 004 .4 0 .4 0 0 0 .4 0 00000 0 0 0 0 0 0 0 0 S .400 0 0 0 0 0 0 0 0 172 0.4 00 00 4 0 0 0 0 00 0 .4 4 .4 004 00 00 .4 0 0 .4 .0 00 0. 0 'C INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

Financial Crop Budgets at Full Development (Nagarjunasagar Command Areas)

Yield Gross Cash Animal Net Crop Season 1/ (ton/ha) Value Inputs 2/ Labor 3/ power v Value Comments 7------R-s7a ------7

Rice kh 4.0 5,600 1,020 830 450 3,300 Rice ra h.5 6,300 1,120 850 450 3,880 Sugarcane - 85 14,880 3,040 890 560 10,390 Sorghum kh 4.0 7,200 940 260 130 5,870 Full irrigation Sorghum kh 3.0 5,400 940 260 130 4,070 Partial irrigation Sorghum ra 3 0 5,400 670 190 120 4,420 Pearl Millet kh 3.5 5,500 730 260 130 4,380 Pearl Millet ra 3.5 5,500 730 260 130 4,380 Minor Millets kh 0.8 1,370 210 220 80 860 Minor Millets ra 1.0 1,830 210 220 70 1,330 Pulses kh 1.3 4,230 270 220 80 3,660 Pulses ra 1.5 4,880 270 220 80 4,310 Irrigated Pulses ra 0.5 1,630 100 120 10 1,400 Residual soil moisture Cotton kh 2.0 5,900 1,730 580 200 3,390 Chillies kh 1.2 10,580 1,520 580 210 8,270 Groundnuts kh 1.2 4,100 910 650 240 2,300 Groundnuts ra 1.7 5,810 940 660 240 3,970

/ kh = kharif (sorghum plant), ra = rabi (sorghum t ratoon) , Seeds, fertilizersand pesticides 2 Evaluatedat the average market wage rate (Rs 4.00) for both family and lined labor 2 Rs 8.00 per pair of oxen

rJ) INDIA

ANDHRA PRADESHIRRIGATION AND CAD COMPOSITEPROJECT

Economic Returns to Irrigation at Full Development (Nagarjunasagar Command Areas)

Net Economic Water Net Return Value 2 Requirement 3/ to IrrigAtion I Crop Season 1/ (RsAa- (mm) (Rs/mrn) Comments

Rice, black soil kh 3,730 890 0.31 Rice, red soil kh 3,730 1,350 0.20 Rice, black soil ra 4,330 1,300 0.33 Rice, red soil ra 4,330 1,720 0.25 Sugarcane - 3,850 2,740 0.10 Sorghum kh 6,130 280 1.83 Full Irrigation Sorghum kh 4,300 130 (2. 5 4) W Partial Irrigation Sorghum ra 4,600 360 1.28 Pearl Millet kh 1,590 230 1.56 Pearl Millet ra 4,590 880 0.52 Minor Millets kh 940 190 _ Minor Millets ra 1,410 650 0.22 Pulses kh 2,970 310 (3.28) 5/ Pulses ra 3,490 590 0.59 Irrigated Pulses ra 1,140 - - Residual soil moisture Cotton kh 4,990 700 0.56 Chillies kh 8,660 500 1.53 Groundnuts kh 1,900 360 (0.60) I/ Groundnuts ra 3,260 1,160 0.28

/ kh = kharif (sorghum= plant), ra rabi (sorghum: ratoon) 2/ Calculated following the methods discussed in Annex 14 See Annex The average value for unirrigated kharif crops is Rs 1,000/ha. The net return to irrigation for kharif crops is thus calculated as: (Net Economic Value - l,900)/(Water Rtquirement). The net return to irrigation for rabi crops is calculated as: (Net Economic Value)/(Water Requirement) / The relative error in the water requirement is high and the calculated net return to irrigation, consequently, contains a very large margin of error

-.1 INDIA

ANDHRAPRADESH IRRIGATICON AND CAD COMPOSITEPROJECT

Financial Budget for 1.0 ha Farm (Nagarjunasagar Left Bank Command Area)

Presentlynot Irrigated PresentlvIrrigated P W Wi W2 W3 P i WI W2 W3

Gross ProductionValue 1,920 2,360 4,340 5,210 7,960 5,850 6,480 4,340 5,210 7,960 Farm ProductionCosts

Crop inputs 300 410 800 800 1,210 1,070 1,300 800 800 1,210 Animal power 140 150 280 280 370 510 540 280 280 370 Hired labor 100 110 180 200 210 00 180 200 Total 5 670 1,260 1,280 1,810 ,980 2,070 1,260 1, 810

Net ProductionValue 1,380 1,690 3,080 3,930 6,150 3,870 4,410 3,080 3,930 6,150 IrrigationCosts

Water rates - - 140 14o i4o 180 180 14o i4o i4o Bettermentlevy - - 140 14 i4o 20 140 140 140 140 Loan repayment - 250 250 Total - - 280 530 530 200 320 280 530 530

Net Farm Income 1,380 1,690 2,800 3,400 5,620 3,670 4,090 2,800 3,400 5,620

P = Present WJ= Future without Project Wl = Future with Project, no CADor Extension Services W2 = Future with Project, CADbut no ERtension Services 3 - Future with Project, including CAD and Extension Services

vz~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C

-.1 %ft~ INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

Financial Budget for 3.0 ha Farm (NagarjunasagarLeft Bank Command Area)

Presently not Irrigated Presently Irrigated P Vw WI W2 W3 P W2 W3 Gross ProductionValue 5,620 7,040 13,390 16,070 23,220 17,010 18,860 13,390 16,070 23,220

Farm ProductionCosts

Crop inputs 850 1,250 2,480 2,480 3,640 3,090 3,770 2,480 2,480 3,640 Animal power 420 460 840 840 1,080 1,480 1,570 840 840 1,080 Hired labor 480 530 1,100 1.140 1,400 1,840 1,950 1,100 . 1,400 Total 1,750 4,420 14,460 6,120 6,4410 7,290 4604,42O 6,120

Net ProductionValue 3,870 4,830 8,970 11,610 17,100 lo,600 11,570 8,970 11,610 17,100

IrrigationCosts

Water rates - - 41o 410 41o 400 45o 410 41o 41o Betterment levy - - 41o 410 410 60 410 41o 4io 410 Loan repayment _ - -__ 75° 70 -- - 750 Total - - 820 1,570 1,570 510 860 820 1,570 1,570

Net Farm Income 3,870 4,830 8,150 io,o4o 15,530 10,090 10,710 8,150 io,o4o 15,530

P = Present W = Future without Project Wl = Future with Project, no CAD or ExtensionServices WR = Future with Project, CADbut no Extension Services W3 = Future with Project, includingCAD and ExtensionServices

I.-'~~~~~~~~ INDIA

ANDHRAPRADESII IRRIGATION AND CADCOMPOSITE PROJECT

Financial Budget for 5.0 ha Farm (Nagarjunasagar Left Bank Command Area)

Presently not Irrigated Present Irrigated P v Wi W2 W3 P v W1 W2 W3

Gross Production Value 9,490 11,840 22,470 26,960 38,560 28,350 31,140 22,470 26,960 38,560

Farm Production Costs

Crop inputs 1,550 2,120 4,400 4,400 6,390 5,230 6,280 4,40o 4,400 6,390 Animal power 700 750 1,400 1,400 1,790 2,460 2,590 1,400 1,400 1,790 Hired labor 1,180 1 270 2,40 2,510 3,050 4,080 4,290 .2,40 2.510 3,050 Total 3,430 m tt 8,240 8,310 11,230 11,770 13,160 8,240 8,310 11,230

Net Production Value 6,050 7,700 14,230 18,650 27,330 16,580 17,980 14,230 18,650 27,330

Irrigation Costs

Water rates - - 690 690 690 700 750 690 690 690 Betterment levy - - 690 690 690 100 690 690 690 690 Loan repayment -- 1,250 1,250 - 1.250 1.250 Total - - 1,380 2,630 2,630 800 1,M 1,380 2,630 2,630

Net Farm Income 6,050 7,700 12,850 16,020 24,700 15,780 16,54o 12,850 16,020 24,700

P = Present W = Future without Project WI = Future with Project, no CADor Extension Services W2 = Future with Project, CAD but no Extension Services W3 = Future with Project, including CAD and Extension Services INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

Financial Budget for 10.0 ha Farm (Nagarjunasagar Left Bank Command Area)

Presently not Irrigated. Presently Irrigated P W W1 W2 W3 P W WI W2 W3

Gross ProductionValue 18,860 23,620 4 4 ,930 53,920 76,280 55,320 61,650 44,930 53,920 76,280 Farm ProductionCosts

Crop inputs 3,220 4,390 9,620 9,620 12,900 10,200 12,470 9,620 9,620 12,900 Animal power 1,020 1,480 2,800 2,800 3,540 4,830 5,120 2,800 2,800 3,540 Hired labor 3,410 3.660 6,490 6,800 7 810 9 710 10a 00 6.490 6.800 7.810 Total 7,650 9,530 18,910 19,220 24,250 24,740 18,910 19,220 24,250

Net ProductionVeJuie 11,21n 11,090 26,020 34,700 52,030 30,580 33,760 26,020 34,700 52,030 IrrigationCosts

Water rates - - 1,380 1,380 1,380 1,400 1,500 1,380 1,380 1,380 Bettermentlevy - - 1,380 1,380 1,380 200 1,380 1,380 1,380 1,380 Loans repayment -- . 2.500 - - 250000 Total - - 2,760 5,260 5,260 1,600 2,880 5,260 5,260 Net Farm Income 11,210 14,090 23,260 29,440 46,770 28,980 30,880 23,260 29,440 46,770

P = Present W = Future without Project Wl = Future with Project, no CAD or ExtensionServices W2 = Future with Project, CAD but no Extension Services W3 = Future with Project, includingCAD and ktension Services

04 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COIPOSITE PROJECT

Financial Budget for 1.0 ha Farm (Nagarjunasagar Right Bank Command Area)

Presently not Irrigated Presently Irrigated P Jr Wl W2 W3 P 1[ WI W2 W3 Gross ProductionValue 1,570 2,090 4,160 4,990 8,240 3,710 4,540 4,160 4,990 8,240

Farm Production Costs

Crop inputs 200 310 780 780 1,290 810 940 780 780 1,290 Animal power 120 140 270 270 340 260 280 270 270 340 Hired labor 60 80 170 190 210 170 180 170 190 210 Total 380 530 1,220 1,240 1,840 1,240 1,400 1,220 1,240

Net ProductionValue 1,190 1,560 2,940 3,750 6,400 2,470 3,140 2,940 3,750 6,400 IrrigationCosts

Water rates - - 140 140 140 120 150 140 140 140 Bettermentlevy - - 140 14o 140 20 140 140 140 140 Loan repayment - - - 250 250 250 250 Total _ _ 280 530 530 140 290 280 530 530

Net Farm Income 1,190 1,560 2,660 3,220 5,870 2,330 2,850 2,660 3,220 5,870

P - Present 5W Future with Project WI = Future with Project, no CADor Extension Services W2 = Future with Project, CADbut no Extension Services W3 = Future with Project, including CADand Extension Services

POi "4,- INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Financial Budget for 3.0 ha Farm (Nagarjunasagar Right Bank Command Area)

Presently not Irrigated Presently Irrigated P V- Wi W2 W3 P 1w W1 W2 W3 Gross ProductionValue 4,780 6,640 12,810 15,370 24,630 11,010 13,510 12,810 12,810 24,630 Farm ProductionCosts

Crop inputs 470 720 2,520 2,520 3,940 2,530 2,840 2,520 2,520 3,940 Animal power 290 310 800 800 1,010 770 820 800 800 1,010 Hired labor 310 0 1 010 1 060 1,240 1 010 1 080 1 020 1 060 1.240 Total 1,070 1,3+0 t4,3078 6,190 4',Tj740 mo 6,190

Net ProductionValue 3,710 5,280 8,470 10,990 18,440 6,700 8,770 8,470 10,990 18,440 IrrigationCosts

Water rates - - 410 4io 410 360 450 410 410 41o Bettermentlevy - - 410 410 41o 60 41o 410 410 41o Loan repayment - 7 5 075° _ - 750° 75° Total - _ 820 1,570 1,570 420 860 820 1,570 1,570

Net Farm Income 3,710 5,280 7,650 9,420 16,870 6,280 7,910 7,650 9,420 16,870

P = Present 1T= Future with Project W1l Future with Project, no CADor Extension Services W2 Future with Project, CADbut no Extension Services W3 = Future with Project, includingCAD and ExtensionServices

co 0 INDIA

ANDHRA PRADESH IRRIGATIONAND CAD COMPOSITE PROJECT

Financial Budget for 5.0 ha Farm (NagarjunasagarRight Bank Command Area)

Priesentlynot Irrigated Presently Irrigated PFg WI W2 W3 P Wi W2 W3

Gross ProductionValue 7,980 10,750 21,760 26,110 41,850 18,770 23,440 21,760 26,110 41,850

Farm Production Costs

Crop inputs 860 1,150 4,710 4,710 7,030 4,830 5,320 4,710 4,710 7,030 Animal power 480 510 1,330 1,330 1,680 1,310 1,410 1,330 1,330 1,680 HIiredlabor 760 870 2,290 226 2.750 2,250 90 2.290 60 2.760 Total 2,100 2,530 8,330 8,h00 11, 770 8,390 9,220 8,330 8,400 11,470

Net ProductionValue 5,880 8,220 13,430 17,710 30,380 10,380 1h,220 13,430 17,710 30,380

Irrigation Costs

Water rates - - 690 690 690 600 750 690 690 690 Betterment levy - - 690 690 690 100 690 690 690 690 Loan repayment - - - 1,250 1 1.250 1.250 Total _ - 1,380 2 630 700 1,4 4 o 1,380 2,630 2,630

Net Farm Income 5,880 8,220 12,050 15,080 27,750 9,680 12,780 12,050 15,080 27,750

P = Present W = Future with Project Wl = Future with Project, no CAD or Extension Services W2 = Future with Project, CAD but no Extension Services W3 = Future with Project, including CAD and Extension Services

(Dco C,

CO INDIA

ANIHRA PRADESHIRRIGATION AND CAD COMPOSITEPROJECT

Financial Budget for 10.0 ha Farm (Nagarjunasagar Right Bank Command Area)

Presently not Irrigated Presently Irrigated P v Wl W2 W3 P V W1 W2 W3

Gross ProductionValue 16,150 22,490 46,110 55,330 84,940 39,050 49,120 46,110 55,330 84,940 Farm ProductionCosts

Crop inputs 1,940 2,770 10,250 10,250 14,400 10,760 11,480 10,250 10,250 14,400 Animal power 980 1,040 2,610 2,620 3,290 2,700 2,890 2,620 2,620 3,290 Hired labor 2.550 2.770 6,190 6.300 7.300 6.400 6 870 6.190 6.300 7.300 Total 5,470 6,580 19,050 19,170 24,990 19,860 21,240 19,060 19,170 24,990

Net ProductionValue 10,680 15,910 27,060 36,160 59,950 19,190 27,860 27,050 36,160 59,950 IrrigationCosts

Water rates - - 1,380 1,380 1,380 1,200 1,500 1,380 1,380 1,380 Bettermentlevy - - 1,380 1,380 1,380 200 1,380 1,380 1,380 1,380 Loan repayment _ - 2,500 2.500 _-- _Lm _.50 ,) Total - - 2,760 5,260 5,260 1,hoo 2,BBo 2,760 5,260 5,260

Net Farm Income 10,680 15,910 24,300 30,900 54,690 17,790 25,000 24,200 30,900 54,690

P = Present W = Future with Project Wl = Future with Project, no CAD or ExtensionServices W2 = Future with Project,CAD but no Extension Services W3 = Future with Project, includingCAD and Extension Services

CIK INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PRW ECT

Calculation of Pro.ject Rent (Nagarjunasagar Left Bank Command Area)

1.0 ha Farm 10.0 ha Farm WI W2 W3 V Wi W2 W3

1. Expected Gross Value of Production(Rs 2,360 4,340 5,210 7,960 23,620 44,930 53,920 76,280

2. Certainty Equivalent of (1) (Rs) 1,420 3,040 3,650 5,570 16,530 34,870 41,790 59,120

3. Production Costs (Rs) 670 1,260 1,280 1,810 9,530 18,910 19,220 24,250

4. Family Labor (Rs) 370 650 690 790 - - - -

5. Management Fee (Rs) 40 110 170 300 1,400 3,180 4,510 6,970

6. Implicit Land Rent (6) = (2)-(3)-(4)-(5) (Rs/ha) 340 1,020 1,510 2,670 560 1,280 1,810 2,790

7. Project Rent (Rs/ha) 680 1,170 2,330 720 1,250 2,230 - IrrigationInfrastructure 680 720 - CAD 490 530

V= Future with Project W = Future with Project, no CADor Extension Services W2 = Future with Project, CAD but no Extension Services W3 = Future with Project, including CAD and Extension Services

5P0 INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

Calculation of Project Rent (Nagarjunasagar Right Bank Command Area)

1.0 ha Farm 10.0 ha Farm -w wi W2 W3 IV Wi W2 W3 1. Expected Gross Value of Production (Rs) 2,090 4,160 4,990 8,240 22,490 46,110 55,330 84,940

2. CertaintyEquivalent of (1) (Rs) 1,250 2,910 3,490 5,770 15,730 35,740 42,880 65,830

3. ProductionCosts (Rs) 530 1,220 1,240 1,840 6,580 19,060 19j170 24,990

4. Family Labor (Rs) 320 620 640 740 - - -

5. Management Fee (Rs) 40 110 160 320 1,840 3,340 4,740 8,170

6. Implicit Land Rent (6) = (2)-(3)-(a)-(5) (RsAha) 360 960 1,450 2,870 730 1,330 1,900 3,270

7. Project Rent (Rs/ha) - 600 1,090 2,510 - 600 1,170 2,540 - Irrigation Infrastructure 600 600 - CAD 490 570

7W= Future with Project Wl = Future with Project, no CAD or Extension Services W2 = Future with Project, CAD but no Extension Services W3 = Future with Project, including CAD and Extension Services

00 INDIA

ANDHRTAPRADESH IRRIGATION ANDCAD CCMPOSITEPROJECT

NAGARJUNASAGARPROJECT AREA

Cropoing Pattern PerFr Si.. (in 7%of far. area) FarmSize I ha 3 ha Sha loha Timeperapective p w N P N P N N P N Season Kh R Kh R WCh R 5h Vg y Kh R Kh R Rh R- Rh R Rh R Kh R

Left Bank

1. Areas already irrigated

Rice 77 65 75 67 50 77 65 75 67 47 - 79 63 80 62 44 -- 80 62 80 62 42 - Sorghum I/ 16 14 16 12 13 11 17 10 17 7 11 7 10 3 9 4 13 5 7 3 6 3 12 5 Croundonte 7 8 8 8 14 13 4 4 5 5 17 15 7 5 7 5 18 15 5 3 7 3 20 15 Pearl millet 14 2 -- 2 13 4 3 12 6 -- 2 12 Pulses and oilseeds 19 6 17 6 -- 11--I 4 -- 3 P.lses 2/ 3 3 13 5 5 14 5 5 12 3 4 10 Chillies 1 4 1 4 -- 1 6 2 7 Cotton 3 6 7 Others 3/- ______1 2 2

Total 100 90 100 90 100 60 100 84 100 84 100 55 100 76 100 76 100 48 98 71 97- 72 99 45 190 190 160 18 184 155 176 176 1416 19 14

2. Areas not yet irrigated

Rice 14 2 14 2 50 13 2 13 2 47 -- 12 2 12 2 44 10 2 10 2 42 Sorgh-mI/ 33 5 33 5 13 11 35 4 36 4 11 7 38 3 39 3 13 5 41 2 42 2 12 5 Gro-dndots 20 20 14 13 20 22 .17 15 21 22 18 15 23 24 20 15 Pearl millet 2 5 14 2 3 13 1 2 12 1 2 12 Pulses and olseeds 20 18 19 6 20 17 17 6 18 16 11 4 14 12 9 3 P.1ses 2/ 3 3 15 3 3 14 3 3 12 3 3 10 Chillies 3 3 4 3 3 4 4 4 6 5 5 7 Cotton 3 6 7 Others 3/ 8 7 7 6 1 6 5 2 6 5 2 Total 100 10 100 10 100 60 100 9 100 9100 55 100 8 100 8 100 48 100 7 100 7 99 45 110 110 160 109 109 155 108 108 148 107 107 344

Right Bank

1. Areas already irrigated

Rice 40 13 40 13 43 38 12 38 12 40 38 12 38 12 37 -- 38 12 38 12 34 - Sorghum I/ 20 7 18 7 23 23 21 7 20 7 22 22 19 6 18 6 20 19 14 6 14 5 19 19 Groudnduts 7 5 8 5 10 10 8 6 8 7 10 9 8 7 9 7 9 10 9 7 9 8 7 11 Pearl Millet 9 9 12 7 6 11 4 4 10 2 - 8 Pulsesand oilseeds 16 16 14 13 14 12 a 7 8 5 5 8 Pulses 2/ 26 26 17 26 26 17 26 26 16 26 26 14 Chillies 7 7 6 8 8 8 10 11 11 14 14 14 Cotton 10 11 3 12 12 7 17 17 13 20 20 16 Others 3/ -- -- 1 - -- 1 -- -- 2 -- -- 2 1

Total 100 60 100 60 100 62 100 58 100 58 100 59 100 55 100 55 100 55 100 53 100 53 100 53 160 160 -162 158 158 159 155 155 155 153 153 153

2 Areas not yet irrigated

Rice 3 2 3 2 43 4 1 4 1 40 4 1 4 1 37 -- 5 5 34 Sorghu. I/ 18 2 19 2 23 23 17 2 16 2 22 22 1s 2 15 2 20 19 15 14 19 19 Groundnuts 3 1 4 1 10 10 6 1 7 1 10 9 7 1 7 1 9 10 10 11 7 11 Pearl Millet 2 2 12 2 2 11 I 1 10 I 1 1 8 Pulses and oilseeds 40 38 14 40 40 12 3. 37 8 35 34 8 Pulses 2/ 17 17 16 14 Chillies 3 3 6 3 4 8 4 4 11 5 6 14 Cotton 3 7 13 16 Others 3/ 33 33 1 30 29 1 32 33 2 30 30 2 1

Total 100 7 100 7 100 62 100 6 100 6 100 59 99 5 100 5 100 55 100 I1100 1 100 53 107 107 162 106 106 159 ICA 105 155 101 101 153

Notes: 1/ intludingratoon. 1-1 ~~ ~ ~ ~ 2 on residual smisture,after rice. 00 ~~~~~3/sugarcane, minor millets, vegetables, etc. Lri ~~~~P=presentsituation; W=-future without project situation; W=ftrure with project situation Rh=kharif(susamr) R=rabi(winter) m. INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Distribution of Farm Sizes in the Project Areas

Nagarj unasagar Pochampad Right Bank Left Bank Tungabhadra % of % o f of% % oof % of % of % of Farm Size (ha) Farms Land Fars nd Fams Land Farms Land

0-2 74 39 58 22 53 18 27 5

2-h 16 19 19 17 23 18 2h 12

h-6 3 7 10 16 8 12 16 13

over 6 7 35 13 45 16 52 33 70

Average Size (ha) 2.2 3.2 3.6 6.0

Median Size (ha) 1.0 1.6 2.0 3.9

0a ANNEX 14 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPONENT PROJECT

Economic Analysis

General

1. The major components of the project -- irrigation infrastructure, on-farm development and agricultural extension services -- are interdependent. The benefits from one component depend on whether the others are implemented. Irrigation infrastructure, CAD and extension will thus be evaluated as a package. However, in order to justify the composition of the package, benefits and costs associated with each of the components will also be analyzed separately.

2. The normal approach for analyzing irrigation projects assumes that water is freely available, i.e., its opportunity cost is zero. This assumption cannot be made in the estimation of the benefits resulting from the CAD Program, which would lead to substantial water savings, and for the estimation of economic costs associated with the NSP canal extensions. A major element in the economic analysis is, therefore, the estimation of the opportunity cost of water.

3. The economic analysis of the project basically follows standard Bank methodology. However, instead of using a shadow exchange rate (SER) to translate foreign exchange costs/earnings into local market prices, a standard conversion factor (SCF) has been applied to domestic market prices in order to translate them into border prices. This will not effect the economic rate of return of the project since the SCF is directly related to the SER and the official exchange rate (OER): OER/SER = SCF.

4. The plans for the Nagarjunasagar Canal extensions are to a large extent motivated by distributional considerations. Consequently, income distributional weights have been introduced in a systematic way into the analysis. The intention is not, at this stage, to replace the economic rate of return with a social rate of return but to give an extra dimension to the economic analysis.

Basic Assumptions

5. Standard conversion factor (SCF). In order to make an allow7ance for the level of protection provided by tariffs and trade restrictions, a SCF is applied to the price of non-traded goods and to consumption. The SCF can be approximately calculated through the formula:

187 ANNEX 14 Page 2

SCF = X + M X + Sx + M + Tm where X = fob value of exports M = cif value of imports Sx = export subsidies Tm = import duties

For 1973/74 this calculation gives SCF = 0.82.

The Planning Commission now recommends the use of conversion factors for foreign exchange and for untraded goods that implicitly give a SCF of about 0.75. Because of the approximate nature of these estimates, an SCF of 0.8 has been used in this report. This is equivalent to a shadow exchange rate of approximately US$1 = Rs 11.

6. Savings. Following Bank standard practice, no premium has been put on public or private savings. Consequently, public income and private consumption are assumed to be equally valuable.

7. Income Distribution. The income weights were chosen in such a way that a 10% consumption increase has the same value for all groups. 1/ Since no premium has been put on savings (para. 6) it is assumed that one rupee of Government income/expenditure has the same value as one additional rupee to someone at the average consumption level. Based on national account figures for 1973/74 and inflation estimates for the period since 1973, it is assumed that the average consumption level (C) in 1976 is Rs 1,000.

8. The social benefits (B) are directly related to the traditional economic benefits (E) and to the changes in consumption/income for different groups (Ci): B = E + SCF x > (di - 1) x Ci 2/ In this formula di is the weight given to a specific income group, and SCF x L (di - 1) x Ci is the net social benefit from increased private consumption. For small incomes changes, di is inversely related to the income or consumption level (Ci):

d = C i Ci

1/ This implies an "elasticity of marginal utility" (n) of unity. This is conservative compared to the proposed (n_3) made in the Planning Commission's "Study on Social Prices for Evaluating Public Invest- ment Projects." 2/ This is a simplified version of the formula proposed by Squire & van der Tak in "Economic Analysis of Projects," Bank Staff Working Paper No. 194, IBRD, 1975. The modifications follow directly from the assumptions in paragraphs 5 and 6.

188 ANNEX 14 Page 3

Thus, the lower the income level of the beneficiaries is, the higher is the weight. If most beneficiaries are poor (di - 1) becomes larger than zero and the social benefits are larger than the efficiency benefits. In most parts of the analysis, the formula above has been broken down into its three main components:

E = efficiency benefits

SCF x di x Ci = social benefits of increased consumption

-SCF x E Ci = social costs of increased consumption

9. Agricultural Inputs and Outputs. The economic prices for these goods are discussed in Appendix 1.

10. Construction Costs. Traded goods, for which border prices are readily available, are evaluated at these prices. The market price for untraded goods, not separately identified traded goods, and labor are multiplied with the SCF. This gives a conversion factor for construction costs of approximately 0.84.

11. Shadow Wage Rates. Wages of both skilled and unskilled construction labor have been adjusted with the SCF. Farm labor is evaluated at a season- ally adjusted opportunity cost. The method for this estimation is described in Appendix 2. However, the opportunity cost of labor in Appendix 2 is expressed in domestic market prices, and has to be multiplied by the SCF for the economic analysis.

Command Area Development

12. On-farm development would result in both higher yields and increased irrigation efficiencies below the pipe outlet. The higher yields are a direct benefit to participating farmers. The higher irrigation efficiencies lead to substantial external benefits. To which farmer or to which area these benefits would accrue depends on water allocation decisions. If each area were to be given a fixed water allocation, the higher irrigation efficiency would result in either a higher cropping intensity or planting of more water con- suming crops. The water saved could, alternatively, be used for extending the command area, thereby benefiting a different group of farmers.

13. On-farm Benefits. The yields of ID crops typically increase 15-25% due to careful on-farm development. The gross value of production at present is in the range of Rs 2,500-3,000 per ha for most irrigated crops. This gives annual benefits in the order of Rs 400-700 per ha. The thin layer of top soil is easily disturbed by the land leveling and farmers in the area report de- creased yields during the first two years. If no special measures (such as application of additional fertilizers) are taken the yield decrease is about

.189 ANNEX 14 Page 4

30% and 10% in the first and second year, respectively. A summary of annual costs and benefits is given in Table 1.

14. External Benefits. No measurements of irrigation efficiencies have been done in the project areas. However, studies carried out in other parts of India with similar soil types and topography show irrigation efficiencies for ID lands of the following magnitudes:

Field application efficiency 0.65

Field conveyance efficiency 0.70

Overall field irrigation efficiency 0.45

The overall water releases to NSP support these estimates. After implementation of the CAD Program, both the field application and field conveyance efficiencies are projected to be about 0.80 giving an overall field efficiency of about 0.65.

15. The field water requiremens for ID crops vary from about five inches for some kharif crops to about 30 inches for some rabi crops. For the NSP design cropping patterns, the average is about 15 inches. The CAD Program would thus reduce the water requirements at the field outlet from 33 inches to 23 inches, giving a water saving of about 2,500 m3 per ha.

16. The dual solution of the linear programming model, which was used to analyze the optimum size of the two NSP command areas (para. 32), gives an opportunity cost of water of Rs 0.2 per m3 at the field outlet 1/ if CAD has not been completed over most of the area. However, if CAD covers most of the area, the opportunity cost of water is about Rs 0.3 per m 3 .

17. Analyses carried out by the Bank's resident mission in New Delhi, indicate that each hectare that is brought under irrigation results in a foodgrain production increase of about 1.7 tons. The economic value of this production increase, after allowing for increased input requirements, is about Rs 2,200 per ha. Assuming an investment cost of about Rs 6,500 for irrigation infrastructure, this gives an annual net benefit of about Rs 1,550 per ha. With an average field water requirement of 33 inches (or about 8,200 m3 /ha) for ID crops grown on land not covered by CAD, this gives an opportunity cost of water of about Rs 0.19 per m 3. This is consistent with the results in paragraph 16. Consequently, the water saved through CAD has been evaluated at Rs 0.2 per m 3 . This gives an annual production increase of Rs 500.

1/ Rs 0.13 per m3 at the dam.

190 ANNEX 14 Page 5

18. Investment Costs. The financial costs for civil works are on the average Rs 1,500 per ha and for planning, design and supervision about Rs 600 per ha. This gives an economic cost of Rs 1,740 per ha.

19. Extension Services. The combined effects of CAD and extension would lead to a substantial increase of both on-farm and external benefits. It is projected that yields on the leveled fields would increase by roughly 50%; a shift from local to high yielding varieties would take place and a larger portion of the area would be cropped under profitable commercial crops. This would result in a doubling of the net value of production per ha. Without extension inputs, the annual net benefits would be about Rs 1,050 per ha. The joint effects of CAD and extension would give annual net benefits on the order of Rs 2,800.

20. Economic Rates of Return:

-- CAD without extension inputs 28%

-- CAD with extension inputs 45%

Optimal Size of the NSP Command Area

21. A linear programming model (AGINT) was developed by Bank staff 1/ to analyze water allocation decisions. The Government cannot enforce a specific cropping pattern but it can indirectly influence what crops are grown by regula- ting the timing and the amount of irrigation that is supplied to a specific area. The amount of water is determined through the capacity of the pipe outlet in relation to the area irrigated under it and the time the water is made available. For land localized IW, the supply per acre is high and for ID land it is low. Furthermore, rice and sugarcane cannot legally be grown on ID lands, while the farmers are free to grow any crop on IW lands.

22. The period of water supply determines to a large extent what crops are grown. If irrigation is provided only during the period July-November, virtually no cotton would be grown. If the irrigation period is extended three months, a large part of the area would probably be under cotton.

23. The Government can also decide on the scope and operating efficiency of the irrigation system through its investment program. Thus the model was designed to handle the following decision variables:

(a) allocation of water to the command area;

(b) size of the command area;

(d) period of irrigation;

1/ From the Development Research Center and the South Asia Projects Departmernt.

191 ANNEX 14 Page 6

(e) level of extension services;

(f) CAD investments, and

(g) investments to improve conveyance and operational efficiencies of the system.

24. The AGINT model requires the following information:

(a) For each of the 20 sub-areas:

size

soil type

-- conveyance and operational losses from the dam to the sub-area

(b) For each of eight cropping plans:

-- monthly irrigation requirements per ha

-- economic net value of production per ha

-- financial net value of production per ha

labor requirements per ha

-- gross value of output (in financial terms) per ha

(d) Overall water allocation

(e) Capacity of the canal.

25. The eight cropping plans were projected in accordance with the localization (IW or ID) and the period of' irrigation. In most models of this type, the program determines which crop should be grown where. However, as mentioned above, the Government can not enforce a specific cropping pattern, but it can decide about the amount and timing of the water supplied. The AGINT formulation thus gives results that are more realistic, by focussing on GOAP's decision variables and by the use of exogenously projected farmers' responses to GOAP's water allocation decisions. 1/

1/ In this case, the cropping paterns have been projected by an experienced agriculturalist. However, the Development Research Center has recently designed and tested computer models that can be used for projecting cropping patterns. 192 ANNEX 14 Page 7

26. Given the overall water allocation to the command area and the (monthly) capacity constraints of the main canal, AGINT determines the optimal cropping plan for each sub-area. (The mathematical structure of the model is described in Appendix 4.) Two different assumptions regarding field irrigation requirements were used: one corresponding to the Bank's estimates and one corresponding to GOI's estimates (Annex 5). Furthermore, two different assumptions on the overall availability of water for each canal were tested: 180 TMC and 200 TMC. The analysis was based on estimated present conveyance and operational efficiencies and on projected field water requirements after full CAD.

27. Two different objective functions were used:

(a) maximize net economic value based on efficiency prices; and

(b) maximize net social value, which is achieved through an adjustment of the efficiency benefits for increased farm incomes and direct and indirect employment effects.

The calculations of economic and social benefits and costs are based on the assumptions in paragraphs 5-11.

28. By progressively excluding the tail parts of the command area and repeating the optimization, the functional relationship between the size of the command area and the objective function can be established.

29. The computer analysis shows that total agricultural production increases with the command area. However, the net benefits from additional areas brought under irrigation become smaller and smaller. The point where the marginal benefits of extending the system equals the marginal cost, marks the optimum size of the command area. At efficiency prices, the marginal cost 1/ is about Rs 300 per ac (Rs 756 per ha) and at social prices the marginal cost 1/ is about Rs 270 per ac (Rs 680 per ha). 2/

30. The results of the analysis are summarized in the table below and illustrated in Figures 1-5. (Due to its larger size, the RBC command area will experience more of a water shortage than the LBC command area. Many of the results for the LBC are relatively trivial and have not been shown in the Figures).

1/ Capital costs are recovered over 20 years at 10% interest.

2/ The social cost is less than the economic cost since the farmers pay the costs for CAD civil works. Since these farmers have an income weight of less than one, the social cost of their outlays is less than if the public sector had borne the full cost.

*193 ANNEX 14 Page 8

Water Field Water Objective Optimal Size of the Command Area Allocation Requirements Function LBC RBC ------million ac…------

180 IDA Economic 0.95 /a 1.03 /b 180 IDA Social over 1.0 over 1.2 /c 180 GOI Economic over 1.0 1.2 200 IDA Economic over 1.0 1.2 /b 200 IDA Social over 1.0 over 1.2

Proposed size of the Command Area: 0.98 1.17

/a See Figures 1 and 3.

/b See Figures 2 and 4.

/c See Figures 2 and 5.

31. One interesting result emerges from the introduction of income distributional weights. The total benefits resulting from the whole command area are less when expressed in social terms than in efficiency terms. However, the marginal social benefits of extending the area are larger than the margn- al economic benefits. Thus, the combination of efficiency and income distributional objectives gives a larger size of the command area than pure efficiency considerations. Taking income distributional objectives into consideration, the extensions proposed by GOAP are justified.

32. The dual solution to the linear programming model gives the opportunity cost of water at the dam. One additional cubic meter of water to RBC and LBC at the dam would give a production increase of Rs 0.24 and Rs 0.20, respectively, at an overall allocation of 180 TMC to each canal. Since the losses in the two conveyance systems are about 35%, the value of water at the pipe outlet is higher (Rs 0.30 - 0.35 per m 3). These figures are based on assumed field irrigation efficiencies that would result after CAD. Without CAD, the opportunity cost of water at the pipe outlet is about Rs 0.2 per m 3.

Economic Analysis of NSP Canal Extensions

33. "With Project" Situations. This is based on the design cropping patterns, which seem likely to occur after full CAD and with effective agricultural extension services and improved water management. The projected yields with the project and the design cropping patterns are discussed in Annex 12. Input requirements are shown in Annex 13.

34. "Without Project" Situation. The water that will be used in the new areas could either have been used for a more intensive irrigation in the already commanded areas or for other command areas in the Krishna Basin.

194 ANNEX 14 Page 9

Ideally, the marginal productivityof water in both the already developed parts of NSP and other Krishna Basin projects should be known.

35. The marginal productivityof water in NSP depends on the level of water management. In order not to over estimate the benefits of the proposed extensions,the same level of water managementis assumed to exist without the project as with the project. Thus, the "without project" situation assumes full CAD in the already irrigatedareas.

36. For this analysis,it has also been assumed that the allocation of water to NSP would be the same without the extension of the command area as with the proposed extension. This assumptiongives a conservativeesti- mate of project benefits, since, for the next two decades, large amounts of water, in excess of its allocation,would be available,to Andhra Pradesh, and the opportunitycost of this water is low.

37. The "without project" cropping patterns have been projected based on the cropping patterns in the most developed parts of the already commanded areas. This procedurehas resulted in water requirementsthat are very close to the water requirementsof the design cropping patterns. Minor adjustments were then made to make the "without" and "with" project water requirements conform.

38. Built-up rates. Each command area has been divided into ten sub- areas and a built-up rate has been defined for each, depending on the time when it received or will receive irrigationthe first time. The implementation of CAD over the full command area would take about 15 years. Thus, the build-up of overall benefits is assumed to take 20 years (Figure 7).

39. Results. The economic cost and benefit steams all based on the assumptionsdiscussed in paragraphs5 to 11 and 34 to 40 are shown in Tables 2 to 4. The resulting economic rates of return are:

Left Bank Canal Extension = 10-13%

Right Bank Canal Extension = 9-12%

The results are highly sensitive to the assumed irrigationefficiencies and the rate with which the irrigationintensity in the already developedareas have to be reduced. The interval for the rate of return reflects this uncertainty.

Social Evaluation of NSP Canal Extensions

40. The mechanics of introducing income distributional weights is quite simple and follows the method described in paragraph 8. The basic difficulty is the identification and quantification of income effects. In this analysis three income effects have been identified: increased farm incomes due to increased land rent; increased direct farm employment, and indirect employment effects. Since the calculation of efficiency prices for most agricultural

195 ANNEX 14 Page 10 products is based on the assumption that they are traded, no changes in local market prices have been assumed. The calculation of economic prices for non- traded products is based on the assumption that there is a high degree of substitution between traded and non-traded goods. Thus.,it is assumed that the increased output of non-traded gcods will not result in any price changes.

41. IncreasedFarm Incomes. The total financialnet return to farming -- over the 20 year developmentperiod -- is calculated for the ten sub-areas used in the economic analysis. Ihe average "with" and "without" project returns per ha were calculated for each of the sub-areas. Income weights (as calculated in Appendix 3) have been applied to the annual income increments in each area. The resulting social costs and benefits from increased farm incomes are shown in Tables 3 to 4.

42. Employment Effects. The direct and indirect employment effects are discussed in Appendix 2. Two alternativeassumptions can be made regarding the functioningof the labor market:

(a) substantialunder-employment exists and the increaseddemand for labor would thus directly result in increased labor income. The total social value of this income increase is SCF x W x A L x (di - 1) where W is the market wage, A L incrementalemployment, d 1 = distributional weight for laborers.

(b) No under-employmentexists. The increaseddemand for labor would thus result in a bidding up of the wage rate but with no increasesin employment. The social value of this wage charge is: SCF x W x A L/(ef + en) x (d1 - de) where ef and en are the wage elasticitiesof demand for labor in the farming and non-farming sectors and, de is the distributional weight for employers.

43. Most indicationsare that the labor market in Andhra Pradesh is fairly efficient and there is no large scale underemploymenton a yearly basis. Consequently,the analysis is based on assumption (b). Typically, the elasticity of demand for labor is slightly less than unity. Conservatively,it has been assumed that both ef and en = 1. The estimates of d1 and de are discussed in Appendix 3.

44. Water Charges. The net farm incomes discussed above have not taken water charges into account. In crder to analyze the effects on the social rate of return of different levels of water charges, these have been treated separately. The social value of water charges is: W x (1 - df), where, W is the total amount of water charges paid in a year and df is the average

.196 ANNEX 14 Page 11 distributional weight for farmers. The farmers will pay for the CAD civil works and their economic cost has been multiplied with (1 - df), to get the social cost.

45. Social Rates of Return. Given these assumptions, the social rates of return are:

Left Bank Canal Extension = 12-15%

Right Bank Canal Extension = 11-14%

If the water charges are kept at their present low levels, the social rates of return are roughly 1% lower.

April 1976

-197 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Calculation of Costs and Benefits Command Area Development Program

Year 1 2 3 4-13 14-20 (------Rs per ha ------) Financial Costs and Benefits

Public

Civil works -1,500 0 0 0 0 Planning, design and supervision -600 0 0 0 0 Loan repayment - 0 0 +250 o -2,100 0 0 025°

Direct beneficiary

Yield loss/gain 0 -825 -275 +550 +550 Loan repayment O O 0 -250 o 0 -825 -275 +300 +550

External beneficiaries

Increased production 0 +200 +400 +500 +500

Economic Costs and Benefits

Civil works -1,260 0 0 0 0 Planning, design and supervision -480 0 0 0 0 0 -625 +125 +1,050 +1 050 Production increaseProduction increase O -6~~~~725 +125 +100+05 -1,740 +12 , 050 +1050

Net Social Cost of Increased Consumption

Direct beneficiary (d = 0.55) 0 +300 +100 -110 -200 3 External beneficiaries (d = 0.55) 0 - 70 -140 -180 -180 00 ~~~~~~~~~~~~~0+230 -290 30 ANNEX 14 Table 2

INDIA

ANDHRAPRADESH IRRIGATIION AND CAD COMPOSITE PROJECT

Economic Investment and O&M Costs: NSP LBC & RBC Extensions

O&N Irri gation and Infrastmieture Roads CAD Agric. Extension Year LBC RBC LBC RBC LBC RBC LBC RBC --- Rs million------

1 152 120 4 3 3 2 1 1

2 152 105 5 h 5 4 2 2

3 143 106 6 5 9 7 3 3

4 137 107 7 5 1U 8 5 4 5 136 105 5 4 14 10 6 5

6 0 0 0 0 17 12 8 6

7 0 0 0 0 19 14 9 7

8 0 0 0 0 23 17 9 7 9-15 0 0 0 0 27 20 9 7

16 0 0 0 0 7 5 9 7

17-50 0 0 0 0 0 0 9 7

'199. Table 3

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Economic and Social Benefits: NSP LBC Extension

Income Benefits Labor Water Farm Incomes Incomes Charges Net Social Cost Social Social Net Efficiency of Benefits of Benefits of Social Social Year Benefits Consumption Consumption Consumption Benefits Benefits

1 0 0 0 0 0 0 2 -3 +2 +1 0 0 0 3 -6 +5 +1 0 +1 +1 4 -12 +10 +1 -1 +2 0 5 -20 +16 +2 -1 +5 +2 6 -27 +22 +8 -1 +9 +11 7 -31 +25 +14 -2 +14 +20 8 -22 +18 +24 -1 +21 +40 9 -11 +9 +40 -1 +26 +63 10 +5 -4 +54 0 +31 +86 11 +25 -21 +71 +1 +33 +109 12 +59 -48 +90 +3 +25 +139 13 +95 -78 +108 +5 +29 +169 1)4 +144 -118 +125 +8 +)42 +201 15 +199 -163 +142 +11 +45 +234 16 +258 -212 +158 +14 +47 +265 17 +310 -254 +173 +17 +48 +294 18 +348 -285 +186 +19 +49 +317 19 +381 -312 +195 +21 +50 +335 20 +X404 -331 +202 +22 +50 +347 21 +41l5 -340 +205 +22 +50 +352 22 +415 -340 +205 +22 +41 +343 23 +415 -34o +205 +22 +32 +334 24 +415 -3140 +205 +22 +23 +325 25 +415 -340 +205 +22 +14 +316 26-50 +415 -340 +205 +22 +5 +307

.200 ANNEX 14 Table 4

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Economic and Social Benefits: NSP RBC Ectension

Income Effects Net Farm Incomes Labor Water Net Efficiency Social Cost Social Benefits Incomes Charges Social Year Benefits of Consumption of Consumption Social Social Benefits Benefits Benefits (------Rs million ------)

1 0 0 0 0 0 0 2 -2 + 1 + 1 0 0 0 3 4 + 3 + 1 -1 + 1 0 4 -8 + 6 + 1 -2 + 2 1 5 -13 + 10 + 2 -3 + 4 0 6 -17 + 14 + 5 -4 + 7 + 5 7 - 20 + 16 + 9 -5 +10 + 10 8 - 14 + 11 + 15 - 3 +15 + 24 9 - 7 + 6 + 25 - 2 +19 + 41 10 + 3 - 3 + 34 0 +23 + 57 11 + 16 - 13 + 45 + 2 +24 + 74 12 + 37 - 30 + 57 + 6 +26 + 96 13 + 60 - 49 + 68 +12 +29 +120 14 + 91 - 74 + 79 +18 +31 +145 15 +125 -103 + 89 +25 +33 +169 16 +163 -134 +100 +32 +35 +196 17 +195 -160 +109 +39 +35 +218 18 +219 -180 +117 +44 +36 +236 19 +240 -197 +123 +48 +37 +251 20 +254 -209 +127 +52 +37 +261 21 +261 -214 +129 +52 +37 +265 22 +261 -214 +129 +52 +29 +257 23 +261 -214 +129 +52 +22 +250 24 +261 -214 +129 +52 +15 +243 25 +261 -214 +129 +52 + 7 +235 26-50 +261 -214 +129 +52 + 0 +228

201 INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

NSP LBC: Relationship Between the Size of the CommandArea and the Net Economic Benefits

EconomicNet Benefits (Rs billion)

2.0 Water allocation: 200 TMC 180 TMC

1.0

065

.______Size of Command 0.2 0.4 0.6 0.8 1.0 Area (millionac)

r'.3 o~~~~~~~~~~~~~~~~~2 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT NSP RBC: Relationship Between the Size of the Command Area and Net Economic/Social Benefits

Net Benefits (Rs billion)

Water allocation:

200 TMC

2.0 180 THC

1 .5~

/ 180 TMC 1.0

065

C /~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~N r INDIA

ANDHRAPRADESH IRRIGATION AND CADCOMPOSITE PROJECT

NSP LBC: Marginal Economic Costs and Benefits of Extending the Command Area

Marginal Cost and Benefits (Rs per ac)

1,600

1,4;00 MB MB Marginal benefits of 1,200 \ extending the command 1,200 Area (180 TMC) MC = Marginal cost of extend- 1,000 \ ing the command area

800 X 600

MC - ~ w_ .MC 200

0:E o.'~~0:8 * - ~.. Size of Command d0.2- 0'4 0.16 0.8 1.70 1.2 Area (millionac)

CD1 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

NSP RBC: Marginal Economic Costs and Benefits of Extending the Command Area

Marginal Costs and Benefits (RS per ac)

2,000 *

1,800 MB

1,600 MB

1,200

1,000

800

600

400 Mc ~~~~Mc 200 HC HB - 200 TMC 0:2200' 0.6 :8 ' 1½ 1:2 MB - 180 TMC

| 0 2* * 0'60h 0 8 * 1 0 ' 1'2 tbo Size o(f Command o~~~~~~~~~: : ~ .8v1. . ra(ilo e Ln~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ O10 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

NSP RBC: Marginal Social Costs and Benefits of Extending the Command Area

Marginal Costs and Benefits (Rs per ac)

1,800 MB MB Marginal benefits of 1,600 extending the command area 121400 MC Marginal costs of extending the command area 1,200

1,000

800

600

400 MB - 180 TMC MC MC 200

Size of Command 0.2 0.14 0.6 0.8 1.0 1.2 Area (million ac)

0~~~~~~~~~~~~~~~~~~~~~~~~ ii INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT (Rs million) Build-Up of Project Benefits: NSP Canal Extensions

LBC: Economic Benefits 400

LEC3 Social Benefits

300 oRE: Economic Benefits

RBC: Social Benefits 200

100

j5 ~~~ 10 15 20 25

-'I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ N) 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t ANNEX 14 Appendix I Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Prices for Economic and Financial Analyses

General

1. The estimated future economic prices of internationally traded agricultural inputs and outputs are derived from projected world market prices expressed in 1976 currency values 1/ with appropriate adjustments for freight, handling, processing and quality differences.

2. The estimated future financial prices are based on projected domestic prices. For a few years during the early 1970s, India experienced a severe shortage of foodgrains which resulted in a rapid increase of food prices. Consequently, it is assumed for the farm budget analysis that the relative prices of most food crops will fall slightly up to 1985 and return to their relative price level of 1970-72. The world market prices for comparable commodities show a similar trend, but generally a sharper fall is projected.

3. The domestic prices of some commodities (chilles, for example) fluctuate widely from year to year. If the ratios of their prices to the price of rice have not shown any noticeable trend over the last decade, the long-term averages of the ratios have been used for the projections.

Economic Prices for Traded Agricultural Outputs

4. The economic prices for traded goods are based on their border prices at the official exchange rate. The domestic cost components are adjusted with a standard conversion factor (SCF) of 0.8. (For a further discussion of SCF see Annex 14, paragraph 5.)

Economic Prices for Non-Traded Agricultural Outputs

5. Many of the agricultural products are not traded internationally or only to a very limited degree. Especially the foodgrains are highly supplementary and the increased output of a non-traded one tends to decrease

1/ "Price Forecasts for Major Primary Commodities" IBRD Report No. 814, July 1975. The prices in this report are expressed in 1973 currency values and have been adjusted by a factor of 1.42 in order to bring the estimates up to January 1976 currency values.

208 ANNEX 14 Appendix 1 Page 2 the imports of a traded one. The domestic price for the non-traded foodgrains reflects this substitutioneffect but also taste differentials and relative production costs. Consequently,the economic price for these goods is based on the economic price for rice multiplied with the ratio between the financial price for the non-traded good and the price for rice. In the case of sorghum, this has resulted in an economic price that is approximately50% higher than the world market price. This is clearly justified since Indian sorghum is a foodgrainwhile most of the sorghum on the world market is used for cattle feed and the nutritionalvalue of sorghum is not significantlydifferent from the nutritionalvalue of rice.

Financial Prices for Fertilizers and Pesticides

6. Fertilizers in India are sold at controlled prices. Due to the recent internationalshortage of fertilizers,the world market prices are exceptionallyhigh. Thus, at present, the prices that Indian farmers pay for nitrogen and phosphate fertilizersare heavily subsidized. However, the projectedworld market prices for 1985 are very close to the present Indian prices. Consequently,for the farm budget analysis, it is assumed that the present controlled prices will remain unchanged.

April 1976

209 ANNEX14 Appendix 1 Table 1

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Summary of Price Assumptions

Financial Prices Economic Prices Rupees per ton Rupees per ton

1976 5/ 19857 1985

Crops

Rice (paddy) 1,590 1,400 1,770 1,430 Sorghum 1,940 1,800 1,970 1,830 Pearlmillet 1,740 1,570 1,770 1,590 Minor millets 1,940 1,830 1,970 1,860 Pulses 2,440 3,250 2,000 2,6h0 Cotton (kapas) 2,940 2,950 3,620 3,620 Groundnuts 3,200 3,420 2,640 2,800 Chillies 6,900 8,800 7,070 8,900 Sugarcane 170 175 160 90

AgriculturalInputs

Nitrogen fertilizer / 4,000 4,000 6,250 4,060 Phosphate fertilizer1/ 4,500 4,500 6,750 3,640 Potassiumfertilizer 1/ 2,000 2,000 2,050 1,830 Peak wage rate 2/ 5 5 4 4 Animal power W 4 4 4 4

1/ Per ton of nutrient 2/ Per man-day 3/ See Annex 14, Appendix 2 / Per animal-day Based on projectionsmade in mid-1975.

*210 ANNEX 14 Appendix 2 Page 1

INDIA

ANDHRA PRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Labor Analysis (Nagarjunasagar Command Areas)

A. General

1. The population density in the Nagarjunasagar Right Bank and Left Bank command areas is approximately 3.4 and 2.8 persons per cultivated hectare, respectively; these densities correspond fairly closely to the average density of 3.2 persons per cultivated hectare for Andhra Pradesh as a whole. In spite of this relatively low man-to-land ratio, the ownership of land is distributed unequally. Andhra Pradesh is one of only two States 1/ in India in which the proportion of the agricultural population classified as 'landless laborers' exceeds the proportion classified as 'cultivators'. The 1971 Census calculated that out of 12.62 M workers engaged in the agricultural sector in the whole State, 5.79 M (45.9%) were cultivators and 6.83 M (54.1%) landless laborers 2/. A breakdown of these figures by District indicates a lower pecentage (37.2%) were classified as cultivators in the project area and correspondingly a higher percentage (62.8%) as landless laborers.

2. Land ownership is also highly concentrated within the cultivator group. Average farm sizes in the Right and Left Bank command areas are 3.2 and 3.6 ha, respectively, but the median sizes are 1.6 and 2.0 ha, respectively, reflecting the high proportion of small farms. On the Right Bank, 58%, and on the Left Bank, 53% of farms are in the less than two hectares category. Since, at present, an average sized family 3/ requires appioxi- mately 2.0 ha of unirrigated or 1.0 ha of irrigated land to meet basic subsistence needs, it can be concluded that approximately 50% of cultivators, and 80% of all families in the project area engaged in agriculture, have insufficient land for the production of subsistence requirements. Conse- quently, the large majority of workers are dependent upon wage employment for all or part of their income.

1/ The other is Kerala.

2/ Census of India 1971, Part II-A, Andhra Pradesh.

3/ The average sized family in the command areas is 4.8 persons. Accord- ing to the Agro-Economic Survey, the average size of a farm family in the Left Bank command area is between six and eight persons. This reflects the fact that family size is closely correlated with land ownership. The results of the 25th round of the National Sample Survey (1970-71) confirm these data.

211 ANNEX 14 Appendix 2 Page 2

3. Thus, the impact of the project on the large majority of people in the project area depends upon how much employment will be generated by the project, both within agricultural and non-agricultural activities, and upon the movement of wages. This Appendix sets out projections of the impact; they should be regarded as orders of magnitude rather than precise estimates, chiefly because there exists a relatively poor data base even on the present employment situation. Most of the data in this Appendix are taken from the 1971 Census of India, the Andhra Pradesh Annual Statistics, the Annual Season and Crop Report and an Agro-Economic Survey carried out in the Left Bank command area during 1974.

Labor Supply

4. Based on the results of the 1971 Census, it is estimated that the Nagarjunasagar Right Bank command area has a population of about 1.6 million and the Left Bank about 1.1 million. Using a growth rate of 1.7% per annum (the average rate of growth for the rural population in Andhra Pradesh between 1961 and 1971), the population in the two command areas will have increased to 2.40 million and 1.65 million, respectively, by the year 2000 (see Table 1).

5. The calculation of the size of the labor force and the annual labor supply within the project area has been confronted by a number of difficulties, notably the projection of female participation rates and the existence of migration of seasonal labor into the command areas. In Andhra Pradesh, it is common and economically necessary for women from low income families to work in the fields; almost half of the daily agricultural laborers are women, although very few are cultivators. The labor force participation rate for females is approximately 29% 1/, the highest rate in India and more than double the national average of 14%. The labor force participation rate for males is at present approxiamtely 58%, and it is assumed that this will continue over the next 25 years. Projections of female participation rates are more difficult to make with confidence, since little time series data exist for India. Such data as exist 2/ suggests that female participation rates typically decline where the irrigated area increases and when the area under rice increases; in other words, female participation rates decline with higher incomes. The figures in the table below have been estimated on the assumption that, by the year 2000, female participation will have fallen to approximately 22%. This gives an overall labor force participation rate of 40%, compared to the present rate of 43%.

1/ 1971 Census.

2/ See, in particular, L. Gulati in the Economic and Political Weekly, January 11, 1975, and D. Narasumha Reddy in the EPW, June 7, 1975.

212 ANNEX 14 Appendix 2 Page 3

Population Labor Force Annual Labor Supply Year (millions) (millions) (millions of man-days) RBC LBC RBC LBC RBC LBC

1976 1.60 1.10 0.69 0.47 166 113

1980 1.71 1.18 0.73 0.50 175 120

1985 1.86 1.28 0.78 0.54 187 128

1990 2.03 1.39 0.84 0.57 202 138

2000 2.40 1.65 0.96 o.66 230 158

6. Labor migration is a common feature of agricultural activity thoughout Andhra Pradesh, reflecting the seasonal and regional concentration of employment opportunities and the necessity for a large proportion of the work force to seek employment outside their immediate surroundings in order to avoid starvation. Its characteristics can be described but its dimensions cannot be accurately assessed for there is practically no data on labor movements.

7. Most of the irrigation occurs over a short distance for a limited period (usually during planting and harvesting seasons); typically workers from one village (chiefly landless laborers but also cultivators with insufficient land to provide for subsistence requirements) supplying a neighboring village with labor. A considerable amount of migrant labor travels longer distances and for longer periods; much comes from tribal areas and appears to be organized by labor contractors. Most of the migration involves workers living within the project area (thus, the size of the aggregate labor force is not affected) but some are drawn from outside the project area. No data exists to indicate even the approximate size of the flow and projections of future-flows are exceedingly difficult to make with any confidence. It is expected that migration to the project areas will increase slightly with the increase in peak monthly labor requirements, but such increases depend upon the scale of agricultural improvements in the areas from which the migrants are drawn. However, due to the more even spread of employment opportunities within the area, the internal migration will be substantially reduced. The labor supply figures presented in para. 5 do not include an estimate of migrant labor drawn from outside the project area. Thus, they should be seen as a lower limit of the labor supply in the project area.

8. The estimates of labor supply have been made using an average of 240 days per annum per worker. This figure takes into account two countervailing tendencies: firstly, the young and the old who are included in the labor force estimates frequently can do only less than a full days work. Secondly, during periods of peak agricultural activity,

213 ANNEX 14

Appendix 2 - Page 4 people work long hours and practically all available labor is involved in agriclture. Consequently, the peak monthly labor supply is higher than the average for the year. Given the assumptions used, the labor supply will increase by approximateLy 40% in both command areas by the year 2000.

Labor Demand

9. The sectoral breakdown of the rural labor force in NSP 1/ at the time of the 1971 Census is shown in Table 1. In addition to a similar employment structure in both command areas, the figures indicate that all but 23% of labor force is engaged in agriculture, at least in terms of primary occupation 2/. Although the figures do not take into account multiple occu- pations, they can be regarded as sufficiently accurate to demonstrate that most of the demand for labor derives from agriculture; furthermore approximately two-thirds of the demand for labor outside agriculture are dependent upon agricultural activity and incomes.

10. Estimates of farm labor requirements are given in Tables 2 and 3. These figures, calculated on the basis of the cropping patterns in Annex 12 and field labor requirements in Annex 13, and on the implicit assumption that the project would be accompanied by insignificant mechanization, indicate increased demand for farm labor whether the project is carried out or not. However, in the Right Bank command area, the project would increase farm employment from about 68 M man-days per annum without the project to about 77 M man-days with the project. On the Left Bank command area, the switch from paddy to less water-intensive and labor-using crops would lead to a slight decrease in farm employment from 71 M to 70 M man- days.

11. The aggregate figures of annual farm labor demand conceal important changes in seasonal and geographical distribution. The change of geographical distribution is the most significant; without the extension of the irrigated area envisaged in the project, most of the farm labor would be required in those parts of the command areas already receiving irrigation with the project, there would be a reduction of requirements in these areas) and a compensating increase in the newly-irrigated areas. Thus, on the Left Bank, the FWO and FW requirements in the presently-irrigated areas would be 38 M and 21 M man-days, respectively; the corresponding figures for the Right Bank would be 58 and 52 M man-days. The main impact of this change will be to provide a more equitable distribution between population and employment opportunities and thereby reduce migration.

1/ Excluding all towns with a population of more than 5,000.

2/ The NICD Agro-Economic Survey indicated that most cultivators worked other than on their own farm and that approximately 45% had non- agricultural employment, particularly 'business.

214 ANNEX 14 Appendix 2 Page 5

12. Using as a basis the present level of non-farm employment in the project areas, it is estimated that agriculturalproduction valued at one million rupees creates 19,000 man-days of non-farm employment. Assuming that, in the future, an additional one million rupees creates 15,000 man- days, significantchanges in non-farm employmentwould resut in both FWO and FW situations 1/. At present, non-farm employment is approximately63 M man-days; in FWO, it is estimated to increase to 114 M man-days and in FW to 129 M man-days. Of the additional 15 M man-days attributableto the project, 8 M would be created on the Left Bank and 7 M on the Right.

13. The implicationof these labor demand figures when compared with projected labor supply is clear (see Table 2); with or without the project, the percentage of underemployedwill decrease, and it will decrease a little more with the project than without. Between 1976 and 1995, the labor supply will increase from 279 M to 364 M man-days. At present, total demand for labor is 159 M man-days; given the assumptionsused in the economic analysis, it will rise to 253 M man-days in FWO and 277 M man-days in FW. Thus the percentage of availableman-days which are used will increase from 57% in the present, to 70% in FWO and 76% in FW. To the extent that the supply of migrant labor has been omitted from the figures, they should be regarded as upper bounds; nevertheless,it appears a reasonable conclusion that the project will result in a decline in underemployment.

Wage Rates

14. Wage rates in agriculturein Andhra Pradesh are differentiatedby season and a person's gender; the seasonal variation reflects the variations in demand for labor and in arduousnessof the work. Peak daily wages for males are approximatelyRs 5, although away from the larger towns such as Guntur, they are little more than Rs 4, and the off-peak wage for males is approximatelyRs 3. For females, the correspondingfigures are approximately Rs 3.50 and Rs 2.

15. Wages are paid in cash or kind; there appears to be no consistent mode of payment within the project area and the payment in cash or kind rests upon negotiationbetween cultivator and worker, the final arrangementbeing determined by a number of factors which include the farmer's cash resources, the type of grain available for payment and the availabilityof rice locally.

1/ Most regional economic models (especiallythe so called "economic base" model) assume a constant relationshipbetween the primary and the secondaryand tertiary sectors. If there are no economiesof scale in the secondaryand tertiary sectors and no technologicalchanges, the employment generated in these sectors would be directly proportional to the changes in agriculturalproduction.

.215 ANNEX 14 Appendix 2 Page 6

In the case of labor performed by one small cultivator for another cultivator, there may be no wage payment, but rather an exchange of labor.

Economic Opportunity Cost of Farm Labor

16. Scarcity of detailed data on farm income levels, off-farm employment opportunities, and the profile of the agricultural labor force makes the evaluation of economic shadow rates for farm labor fairly subjective. Economic farm labor costs were estiriatedby using monthly shadow rates reflecting different opportunity costs associated with various segments of the labor force and slack and peak periods during the year.

17. On the basis of available information about the project area and experience from similar areas, it is postulated that the marginal opportunity cost of farm labor can be represented by an "S-shaped" curve. The marginal opportunity cost of farm labor is positive at all levels of demand and increases when more labor is absorbed into field work. The increase in opportunity cost is initially slow and reflects the scarcity of alternative productive employment, but it is more rapid when the full labor supply is utilized. At employment levels above the maximum available in the area, the opportunity cost would again increase at a slower rate since a large number of migrants would be attracted to the project area from neighboring areas where there is substantial unceremployment. In practice, it is reasonable to approximate this idealized "S-shaped" curve by three straight segments.

18. Figure 1 gives the curve of approximate shadow rates used in the analysis. The curve shows the estimated marginal opportunity cost of labor as a function of demand (expressed as a proportion of the supply). The shape of the curve is based on the following assumptions:

(a) at minimum employment levels, the marginal cost would be the value of additional consumption needed for family members to undertake field work (Rs 0.70 per man-day 1/), plus the value of foregone activities such as fishing, home improvement, etc. (Rs 0.8C per man-day);

(b) when the monthly employment just exceeds 60% of the full supply, the marginal cost would be the minimum market rate (Rs 3.00 man-day);

1/ Taken as 75% of the current average daily consumption of foodgrains (16 oz per day).

216 ANNEX 14 Appendix 2 Page 7

(c) at a monthly labor demand corresponding to the present peak level, the marginal cost would be equal to the maximum market rate (Rs 5.00 man-day);

(d) when the employment is equal to or larger than the estimated supply of farm labor from the area, the labor would be drawn from non-farm activities and opportunity cost would increase to about Rs 5.50 per man-day, since at this wage rate, a large number of migrants would be attracted to the project area.

19. The economic opportunity cost of farm labor is equal to the area under the curve up to the employment level for each month. The monthly farm labor requirements with the project are shown in Table 3.

April 1976

217 ANNEX14- Appendix 2 Table 1

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Sectoral Breakdown of the Proj,ect Area Labor Force

Sector Right Bank (%) Left Bank (%) Total Area (%)

Cultivators 29.4 29.0 29.2 Laborers - Agriculture 49.7 47.0 47.9 Livestock and Forestry 2.7 4.7 3.7 Mining and Quarrying 0.3 0.5 0.4 Household Manufacture 2.9 4.9 3.9

Other manufacture 3.3 1.4 2.4

Construction 1.4 3.1 2.3

Trade and Commerce 3.5 2.9 3.2

Transport and Storage 0.7 0.6 0.6 Other Services 5.9 5.9 5 9

218. ANNEX1a Aendixa 2 Table 2

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Labor Supply and Demand

Present FWO FW (million man-days)

On-farm demand 96 139 148

Non-farm demand 63 114 129

Total demand 159 253 277

Total supply 279 364 364

Demand as % of supply 57% 70% 76%

219 ANNEX14 Appendix 2 Table 3

INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Monthly Farm Labor Requirements (NSP Command Areas)

NSP RBC NSP LBC FWO FW FWO FW (-million man-days ------T

January 5.2 6.1 2.9 3.8

February 2.8 3.2 2.3 2.2

March 2.L 2.6 2.9 2.5

April 2.9 0.4 6.1 0.5

May 3.2 3.6 0.6 L.2

June 3.6 4.l 4.2 4.5

July 1O.4 13.0 11.6 12.5

August 5.9 8.2 6.2 7.0

September 4.9 6.4 4.8 5.3

October 3.2 4.3 3.L 3.8

November 12.9 14.1 13.5 12.4

December 10.6 11.8 12.7 11.2

Total 68.0 77.8 71.2 69.9

220 INDIA

ANDHRAPRADESH IRRIGATION AND CAD COMPOSITE PROJECT

Marginal Economic Cost of Farm Labor

Rupee s/Man-day

6.0

5.0

4.0

3.0

2.0

1.0

LaLbor Demand as 10 20~ 3'0 Co0 0 60 70 b 90 10)0 11r0 120 % of' Local Supply

I-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dr ANNEX 14 Appendix 3 Page 1 INDIA

ANDHRAPRADESH IRRIGATION AND CA) CC4POSITEROJECT

Calculation of Income Distribution Weights

Basic Formulas

For marginal income changes:

d C Ci

For non-marginal changes:

d = loge (02) - loge (C) C

C2 - 'Where:

d = income distributionweight

= average consumption level (Rs 1,000)

C1 = original consumption level

C2 = consumptionlevel after increase

loge (x) = natural logarithm of x

Since it has been assumed that savings and consumptionis equally valuable (Annex 14, para 6) "income" can be substituted for "consumption".

Average Distribution Weight for Farmers

The income of farmers come from t,wo sources: Net income from farming (after deducting full cost for both family and hired labor) plus income from off-farm employment or from work on the family farm, resulting in lower expenditures for hired labor.

Approximately, the per capita income (Ci) for a family operating a farm of size Zi can be written as: Zi x NFP Ci = CO + Si

Where CO = per capita income from work on-farm or off-farm.

*222 ANNEX14 Appendix 3 Page 2

Si = family size for a family operating a farm of Z ha

NFP = net financial value of farm production per ha

Family sizes are based on the 1974 agro-economic survey.

Based on farm budget analyses and the agro-economicsurvey CO has been estimated at Rs 300 per capita.

The distributional weight for a marginal change in the value of output per ha is:

di = C Ci The net value of production per ha is fairly constant for all farm sizes (Annex 13). Thus the percentage of the land (Pi) belonging to farmers in a specific size group also determines the percentage of the benefits that goes to this group. Thus if the net value of production in an area increases*Y rupees, the soical value (B) of this increase is:

B = d. x (Pi xA Y)

which can be rewritten as:

B = df XL.YL=Y X Z Pi x di thus

df = pi x di

where df = average distributionweight for farmers.

Since di is a direct function of NFP and NFP is more or less constant over all farm sizes, df is a direct function of NFP.

For the calculationof the coefficientsin the linear progravmingmodel, the distributionweights have been calculated with the formula for non- marginal changes.

For the social analysis of NSP canal extensions,the marginal formula has been used to express d as a function of NFP (Figure 1). For large changes in NFP, the average between the "with" and "without project" situations have been used. This results in a negligible underestimationof project benefits.

DistributionWeight for Laborers

The average daily wage in the NSP area is about Rs 4. The average labor force participation rate is 43% and the average number of days worked per year is estimated at 240. This gives:

d, = 1,000/ (4 x 240 x 0.43) = 2.42 223 INDIA

ANIHRAPRADESH IRRIGATION AND CAD COMPOSITEPROJECT

Income Distribution Weight as a Function of Net Farm Income per Hectare

Income Distribution Weight dr

1.2

1.0

o.8

o.6

0.14

0.2

1.0 2.0 3 .0 4. 0 5.0 6!. 0 7.0 8 .10 Net Farm Income (Rs 1,000 per ha) ANNEXli4 Appendix4 Page 1

Mathematical Formulation of the AGINT Model

Indices:

i irrigationplan (cropping pattern) i = 1 .... 98

j subarea ; = 1 .....,10

s soil type s = r or b (red or black)

t month t = 1, .000 ,12

Variables:

111,s proportionof cropland,subarea j, soil type s, under irrigationplan i

aj s acreage in subarea j, soil type s

ei net objective function coefficient,per hectar, cropping

pattern i. (Some measure of annualized economic and social

benefits less annualizedproject costs)

ql9t monthly net irrigation requirements,cropping pattern i,

month t

r canal capacity

R annual water release (from dam to the canal) constraint

lj conveyance and operational losses, subarea j (per unit of

water released at dam)

eis field irrigation efficiency, soil type s, irrigationplan i 5

Equations:

, i,sj X aj,s x ci (maximand) s j i 's 2

.225 Aniendix4 Page 2

ZI 1 iIx4 x a x (qit/e) (1 lj)cr (canalit)

is x aj s x (qi9t/ e4) / (1 - ltj)c R (annualwater ts j releasecon- straint)

~i X',s 1for all J, s (projectcombination constraints)

ObJective Functions

1. Efficiency Prices

c1 = NEV'

2. Income distribution weights

Ci =ANEVi SuFx C + SCF x df x A NFVi + SCFx

(LARi +' x AGFVi) xW x (d - d) ef + en

Notations:

L NEVi = Incremental net economic value (at border prices) of providing irrigation plan i , GFVi = Incremental gross financial value of agricultural output AnMVi= Incremental net financial value of agricultural production SCF Standard conversion factor

ALARi = Incremental farm employment

>, = Number of mandays per rupee of agricultural production

df Distribution weight for farmers getting water under irrigation plan i

di Distribution weight for laborers de Distribution weight for employers, 226 ANNEX 14 Append-iiX 1 Page 3 ef = Wage elasticityof demandfor labor- farm sector en = Wage elasticityof demandfor labor - non-farmsector w = Wage range

.227

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