ASIAN DEVELOPMENT BANK PCR: PAK 21220
PROJECT COMPLETION REPORT
ON THE
SECOND BARANI AREA DEVELOPMENT PROJECT (Loan 1012-PAK[SF])
IN
PAKISTAN
August 2000 CURRENCY EQUIVALENTS
Currency Unit – Pakistan Rupee (PRs)
At Appraisal At Project Completion (December 1989) (October 1999)
PRs1.00 = $0.0465 $0.0195 $1.00 = PRs21.4736 PRs51.30
For the purpose of calculation in this report, the rate of PRs51.3 is used.
ABBREVIATIONS
ABAD – Agency for Barani Area Development ADB – Asian Development Bank ADBP – Agriculture Development Bank of Pakistan BAC – Barani Agricultural College BATI – Barani Agriculture Training Institute BARI – Barani Agriculture Research Institute BLPRI – Barani Livestock Production Research Institute CBO – Community Beneficiary Organization DCW – Department of Communication and Works DLDD – Department of Livestock and Dairy Development DOA – Department of Agriculture DOF – Department of Forestry DOV – Demonstration and Observation Village DPHE – Department of Public Health Engineering EIRR – Economic Internal Rate of Return FMR – farm–to–market road ha – hectare IFAD – International Fund for Agricultural Development km – kilometer MCO – mobile credit officer NGO – nongovernment organization O&M – operation and maintenance PCC – project coordination committee PCM – project completion mission PCU – project coordination unit PSC – project steering committee PERI – Punjab Economic Research Institute PRM – Pakistan Resident Mission REAL – rural education and adult literacy SAWCRI – Soil and Water Conservation Research Institute SPAM – special project administration mission TA – Technical Assistance UNDP – United Nations Development Programme
NOTES
(i) The fiscal year of the Government ends on 30 June. (ii) In this report, “$” refers to US dollars. CONTENTS
Page
BASIC DATA ii
MAP Second Barani Area Development Project viii (as completed)
I. PROJECT DESCRIPTION 1
II. EVALUATION OF IMPLEMENTATION 1
A. Project Components 2 B. Implementation Arrangements 8 C. Project Costs 8 D. Project Schedule 8 E. Engagement of Consultants and Procurement of Goods and Services 9 F. Performance of Consultants, Contractors and Suppliers 9 G. Conditions and Covenants 10 H. Disbursements 11 I. Environmental and Social Impacts 11 J. Performance of the Borrower and the Executing Agencies 11 K. Performance of the Asian Development Bank 11
III. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS 12
A. Financial Performance 12 B. Economic Performance 12 C. Attainment of Benefits 12
IV. CONCLUSIONS AND RECOMMENDATIONS 13
A. Conclusions 13 B. Lessons Learned 14 C. Recommendations 15
APPENDIXES 17 ii
BASIC DATA
A. Loan Identification
1. Country Pakistan 2. Loan Numbers 1012-PAK(SF) and 257-IFAD 3. Project Title Second Barani Area Development Project 4. Borrower The Islamic Republic of Pakistan 5. Executing Agencies (a) Provincial government of Punjab (b) Agricultural Development Bank of Pakistan (ADBP) 6. Implementing Agencies (a) Department of Agriculture (DOA); of the government of Punjab (b) Department of Forestry (DOF); (c) Department of Communication and Works (DCW); (d) Department of Livestock and Dairy Development (DLDD); and (e) Department of Public Health Engineering (DPHE)
7. Amount of Loan 1012-PAK(SF) SDR19.659 million ($25.0 million)
257-IFAD SDR15.2 million ($19.4 million)
8. PCR Number PCR:PAK 588
B. Loan Data
1. Appraisal - Date Started 22 June 1989 - Date Completed 11 July 1989
2. Loan Negotiations - Date Started 13 November 1989 - Date Completed 16 November 1989
Loan 1012-PAK(SF) Loan 257-IFAD 3. Date of Board Approval 20 February 1990 27 June 1990
4. Date of Loan Agreement 19 March 1990 27 June 1990
5. Date of Loan Effectiveness - In Loan Agreement 17 June 1990 25 September 1990 - Actual 6 December 1990 19 February 1991 - Number of Extensions 3 3
6. Closing Date - In Loan Agreement 30 June 1998 30 June 1998 - Actual 30 June 1998 30 June 1998 - Number of Extensions 0 0 iii
7. Terms of Loan - Interest Rate (% per annum) 1 4 - Maturity (number of years) 35 15 - Grace Period (number of 10 0 years) 8. Disbursements a. Dates
Initial Final Executing Agencies Disbursement Disbursement Time Interval Provincial government of 4 February 1993 14 December 1998 5 years, 11 months Punjab Agricultural Development 11 February 1993 30 November 1999 6 years, 10 months Bank of Pakistan
Loan Account Closing Dates Effective Date Original Actual Time Interval 6 December 1990 (1012) 30 September 1998 24 December 1998 8 years 19 February 1991 (257) 30 September 1998 24 December 1998 a 7 years, 10 months a On a provisional basis.
b. Amount in SDR (1012) (as of 24 December 1998)
Original Last Revised Net Amount Category Allocation Allocation Disbursed Civil Works A. Part 1(a) 4,327,500 4,327,500 1,805,859 B. Part 1(c) 1,588,100 1,588,100 3,794,130 C. Part 3 4,804,600 4,804,600 8,124,028 Equipment and Vehicles A. Part 1(a) 826,500 826,500 452,597 B. Part 1(c) 369,900 369,900 172,318 C. Part 3 78,400 78,400 - Incremental Expenditures Parts 1(a) and 3 1,120,100 1,120,100 1,327,955 Training part 1(a) 146,900 146,900 - Unallocated 5,014,000 5,014,000 - Service Charge 748,000 748,000 592,418 Total 19,024,000 19,024,000 16,269,305 A partial cancellation of SDR2,267,659.40 was made on 30 June 1998. A final cancellation of SDR487,035.84 was made on 24 December 1998.
c. Amount in SDR (257-IFAD) (as of 30 November 1999)
Incremental Credit 4,520,000 4,520,000 4,140,995 Civil Works 3,060,000 3,060,000 3,124,920 Vehicles, Equipment & Materials 2,240,000 2,240,000 1,587,735 Consultant’s Services, Training Research 735,000 735,000 52,662 Monitoring & Evaluation Incremental Operating Costs 2,365,000 2,365,000 1,610,302 Unallocated 2,280,000 2,280,000 - Imprest Account - - 484,341 Total 15,200,000 15,200,000 11,000,956 iv
d. Amount in US dollars (1357-TA)
UNDP grant 650,000 650,000 650,000
9. Local Costs (ADB-Financed) - Amount ($ million) 6.5 - Percentage of Local Cost 64.0 - Percentage of Total Cost 28.4
C. Project Data
1. Project Cost ($ million)
Cost Appraisal Estimate Actual Foreign Exchange Cost 21.5 20.9 Local Cost 38.4 30.4 Total Cost 59.9 51.3
2. Financing Plan ($ million)
Funding Source Appraisal Estimate Actual Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost ADB 15.0 10.0 25.0 16.3 6.5 22.8 IFAD 2.6 16.7 19.4 2.2 13.3 15.5 ADBP 0.0 0.8 0.8 0.0 1.3 1.3 Government 3.2 7.6 10.8 1.7 6.6 8.3 UNDP 0.7 0.0 0.7 0.7 0.0 0.7 Farmers’ Contribution 0.0 3.2 3.2 0.0 2.7 2.7 Total 21.5 38.4 59.9 20.9 30.4 51.3 ADB = Asian Development Bank, IFAD = International Fund for Agricultural Development, ADBP = Agricultural Development Bank of Pakistan, UNDP = United Nations Development Programme.
3. Cost Breakdown by Project Components ($ million)
Components Appraisal Estimate Actual Foreign Local Total Foreign Local Total Exchange Currency Cost Exchange Currency Cost A. Watershed Improvement 7.0 11.2 18.2 8.0 13.2 21.2 B. Crop and Livestock Development 1.3 5.4 6.7 1.6 5.9 7.5 C. Rural Infrastructure (Roads and Water) 4.2 3.0 7.2 7.5 5.3 12.8 D. Rural Credit 0.1 7.6 7.7 0.3 3.9 4.2 E. Institutional Strengthening 1.1 1.2 2.3 1.0 2.1 3.1 F. Contingencies 3.6 10.0 13.6 0.0 0.0 0.0 G. Service Charge on ADB Loan 1.0 0.0 1.0 0.8 0.0 0.8 H. Interest on IFAD Loan 3.2 0.0 3.2 1.7 0.0 1.7 Total 21.5 38.4 59.9 20.9 30.4 51.3 ADB = Asian Development Bank, IFAD = International Fund for Agricultural Development. v
4. Project Schedule
Appraisal Actual Item Start Complete Start Complete Soil Conservation - Civil Works – Part 1(A) Jul 1990 Dec 1994 Dec 1990 Jun 1998 - Equipment & Vehicles Part 1(c) Jul 1990 Jun 1996 Dec 1990 Mar 1998 - Incremental Costs – Parts 1(a) & 3 Jul 1990 Jun 1997 Dec 1990 Jun 1998 Agriculture Engineering - Civil Works – Part 1(c) Jul 1990 Jun 1997 Dec 1991 Jun 1998 - Equipment & Vehicles Part 1(c) Jul 1990 Jun 1997 Dec 1990 Dec 1997 - Incremental Costs – Parts 1(a) & 3 Jul 1990 Jun 1997 Dec 1990 Jun 1998 On-Farm Water Management - Civil Works – Part 1(c) Jul 1990 Jun 1997 Dec 1991 Jun 1998 - Equipment & Vehicles Part 1(c) Jul 1990 Jun 1997 Dec 1990 Feb 1998 - Incremental Costs – Parts 1(a) & 3 Jul 1990 Jun 1997 Dec 1990 Jun 1998 Highways - Works – Part 3 Jul 1990 Dec 1993 Dec 1990 Jun 1998 Public Health Engineering Department - Works – Part 3 Jul 1990 Jun 1992 Dec 1990 Jun 1998 Incremental Credit Jul 1990 Jun 1997 Dec 1990 Jun 1998 Civil Works Jul 1990 Jun 1997 Dec 1990 Jun 1998 Vehicles, & Equipment, Materials Jul 1990 Jun 1997 Dec 1990 Apr 1998 and Consultant’s Services Training Jul 1990 Jun 1997 Dec 1990 Jun 1998 Research Monitoring & Evaluation Jul 1990 Jun 1997 Dec 1990 Jun 1998 Incremental Operating Costs Jul 1990 Jun 1997 Dec 1990 Jun 1998 SMC Consultant Jul 1991 Jul 1991 Oct 1993 Oct 1993 SMC Consultant Jul 1991 Jun 1992 Dec 1993 Oct 1994 SMC Consultant Jul 1991 Jun 1992 May 1994 Oct 1994 Training Study Tour Jul 1991 Jun 1992 Jun 1997 Jun 1998 Procurement of Audiovisual Equipment Jul 1991 Jun 1992 Oct 1997 Jun 1998 SMC Equipment Jul 1992 Jun 1993 Oct 1997 Jun 1998
D. Data on Bank Missions
Name of Mission Dates Number Number of Specialization of of Person-Days Members a Persons Fact-Finding 22 Oct to 14 Nov 1988 6 138 a,b,c,d,e,f
Appraisal 22 Jun to 11 Jul 10 200 a,g,h,i,c,e,f,e,j 1989
Review 1 26-29 Jun 1990 2 8 a,k
Inception 10-14 Aug 1990 2 10 a,l
Review 2 12-18 Feb 1992 2 14 a,l
Review 3 1-7 May 1992 1 7 m vi
Name of Mission Dates Number Number of Specialization of of Person-Days Members a Persons
Review 4 4-7 Aug 1992 1 4 g
Review 5 29 Nov to 17 Dec 1992 4 76 g,n,o,m
Review 6 1-12 Sep 1993 2 24 p,g
Mid-Term Review 10 May to 2 Jun 1994 5 120 g,n,l,q,m
Review 7 5-15 Sep 1994 3 17 n,r,n
Review 8 29-30 Aug 1995 2 4 s,l
Review 9 22 Oct 1995 2 2 r,l
Review 10 15-30 Nov 1995 5 80 s,l,o,m
Review 11 21 & 28 Aug 1996 3 6 r,s,t
Review 12 3-14 Oct 1996 2 17 s,t
Review 13 6-23 Jul 1998 3 8 u,v,l
Project 4-22 Oct 1999 515u,w,x,o Completion Review b
Total 750 a a = Senior Project Economist, b = Staff Consultant (Soil/Water), c = Staff Consultant (Rainfed), d = Staff Consultant (Rural Credit), e = Staff Consultant (Livestock/Range), f = Staff Consultant (Rural Credit/Women in Development), g = Project Engineer, h = Senior Counsel, j = International Fund for Agricultural Development Representative, k = Staff Consultant (Monitoring), l = Project Administration Assistant, m = International Fund for Agricultural Development Consultant, n = Project Economist, o = Staff Consultant, p = Forestry Specialist, q = Staff Consultant (Rural Engineering), r = Head (Project Administration Unit), s = Rural Development Specialist, t = Programs Officer, u = Senior Programs Officer, v = Resident Representative, w = Assistant Project Analyst, x – Gender Specialist. b The Project Completion Review Mission comprised Abid M. Hussain, Senior Programs Officer and Mission Leader; Liaqat Ali, Assistant Project Analyst; Ismat Shahjehan, Gender Specialist; and Muhammad Ehsan, Staff Consultant/Economist. vii
E. Related Loans For the Same Executing Agency
Loan Project Title Date of Amount Date of Agreement ($ million) Completion
48-PA First Barani Area Development 20 Feb 1981 12.1 31 Dec 1990 492-PA Barani Village Development 12 May 1999 15.3 11 May 2005 viii I. PROJECT DESCRIPTION
1. About 5 million hectares (ha), or 25 percent of Pakistan’s cultivated area is under barani (rainfed) agriculture, mostly in Punjab and North-West Frontier provinces. Barani farms are generally small, undercapitalized, high-risk, and labor-short subsistence enterprises. Success in barani agriculture depends on integrating crop production, livestock development and social forestry.
2. Initial Asian Development Bank (ADB) assistance helped to appraise and administer the first barani project financed by the International Fund for Agricultural Development (IFAD).1 In 1985, the Government requested ADB for technical assistance (TA) to prepare the Master Plan for Barani Area Development in Punjab.2 The master plan has formed the basis of a series of investment projects in the Potohar region of Punjab. The first one was the Second Barani Area Development Project financed by ADB, IFAD, and the United Nations Development Programme (UNDP). IFAD recently commenced a Barani Village Development Project, while ADB has included a TA project for 2002 in its country assistance program for a third barani area development project.3
3. The objective of the Project was to increase farm household production, generate employment, and raise incomes. The project area comprised (i) parts of the Sohawa and Shakargarh Subdistricts not included in the IFAD-funded first Barani Area Development Project and (ii) Fatehjang and Chakwal Subdistricts. The Project had five major components: (i) watershed improvement, (ii) crop and livestock development, (iii) rural infrastructure, (iv) rural credit, and (v) institutional strengthening.
II. EVALUATION OF IMPLEMENTATION
4. The Punjab government and the Agricultural Development Bank of Pakistan (ADBP) were the Project’s Executing Agencies. The Punjab government delegated responsibility for coordinating the Project to the Agency for Barani Area Development (ABAD), which is attached to the provincial Planning and Development Board. The midterm review of the Project was conducted in May-June 1994. That did not, however, result in an agreement between the Government and ADB on a revised project scope and costs because further work on the revision of project components was required. A follow-up special project administration mission (SPAM), fielded in September 1994, reached an agreement with the Government on revised targets prepared by ABAD and the Implementing Agencies. The revised targets were to be met subject to the availability of funds under the Project. SPAM considered the changes to be minor and subsequent review missions judged project performance against the revised targets. A summary of the major appraised and revised targets, and actual achievements, is contained in Appendix 1.
1 Loan 48-PA(IFAD): Barani Area Development Project, for $12.8 million approved on 3 December 1980, and closed on 31 December 1990. 2 TA 708-PAK: Master Plan for Barani Area Development, for $1.3 million approved on 15 October 1985, and financed by the United Nations Development Programme (UNDP). 3 ADB and IFAD also support development activities in the barani areas of North-West Frontier province. ADB’s on- going Loan 1179-PAK(SF): North-West Frontier Province Barani Area Development Project, for $32.8 million, commenced in 1993 and is due to be completed in 2000. A technical assistance to prepare a follow-up project has been completed (TA 3151-PAK: North-West Frontier Province Barani Area Development Project – Phase II, for $500,000, approved on 31 December 1998). IFAD is assisting the Mansehra Village Support Project with a loan (319-PA) of $14.5 million, approved in 1992. 2
A. Project Components
1. Watershed Improvement
5. The watershed improvement component comprised three integrated subcomponents: (i) soil and water conservation, (ii) rangeland and forestry development, and (iii) harvesting water resources.
a. Soil and Water Conservation
6. The Project built infrastructure and used biological techniques to help beneficiaries, on a cost-sharing basis, to conserve soil and water. The physical achievements are summarized in Appendix 1. The Project Completion Mission (PCM) noted that these interventions would have had greater impact with better targeting. Project beneficiaries included some farmers with large landholdings, who had the financial resources to make these improvements on their own.
b. Rangeland and Forestry Development
7. Noncultivable land in the watershed areas was to be treated in two ways: (i) in public protected forests in the upper reaches of catchment areas, 5,899 ha was to be reforested and protected from grazing to allow regeneration; and (ii) on private noncultivable farmlands about 10,338 ha was to be planted with species that provide fodder, fuelwood, and timber and can control erosion. Against these targets, 5,027 ha have been planted on state-owned land, and 10,026 ha on private lands. Fences were built around state-owned forest areas to check grazing. Trenches, troughs, and pits were dug in these areas to trap rain water and moisture. Other soil and moisture conservation measures included ridging. The Project provided saplings for two types of social forestry schemes on private land. The silvo-pastoral model, aimed at farms with large numbers of livestock, provided fodder production as the main benefit and fuelwood as a secondary benefit. The second model, termed agrisilvicultural, was aimed at general forestry production for both fuelwood and fodder production. Against a target of 1,832 ha under the silvo-pastoral model, 1,558 ha were planted. Under the agrisilvicultural model, against a target of 8,506 ha, 8,468 ha were planted.
8. The social forestry component almost came to an end on project completion. This was mainly due to project design, which required distribution of saplings, free of cost, to the farmers during the life of the project. On project completion, the beneficiaries were required to purchase the saplings at a nominal cost. However, the beneficiaries, were not willing to incur this cost. In retrospect, the practice of providing free saplings did not encourage a sense of investment and ownership in the recipients. Beneficiaries also complained that lack of access to a commercial wood industry was a disincentive to planting the species provided under the Project. ABAD informed the PCM that under a forestry project for Punjab, supported by another funding agency, the social forestry component has been reactivated in the project area, and 17 plant nurseries are now in operation.
c. Water Harvesting
9. The Project included the construction of ponds, weirs, mini dams, and storage tanks to provide water for irrigation and livestock. Small-scale supplementary irrigation schemes, water- lifting devices, and dugwells were also provided. Achievements under this component are summarized in Appendix 1. The Project met the demand for the construction of dugwells and small ponds. The PCM noted that dugwells, all of which were constructed with a 25 percent 3 beneficiary contribution, were being well maintained by beneficiaries. In many cases, they had enabled beneficiaries to bring additional land under cultivation.
2. Crop and Animal Husbandry Component
a. Crop Husbandry Subcomponent
10. As envisaged at appraisal, the crop and animal husbandry subcomponent comprised (i) support to basic research, (ii) assistance to adaptive research, (iii) agricultural extension, and (iv) the establishment of training facilities to train a cadre of women extension field assistants.
i. Basic Agricultural Research
11. This component was to support basic agriculture research at the Barani Agriculture Research Institute (BARI) at Chakwal. During implementation, BARI’s research program focused on developing drought-resistant, high-yielding varieties of wheat, suitable for rainfed areas. In addition, it conducted research on groundnut, legumes, pulses, fodder and oilseed crops. BARI introduced several new varieties of these crops and several additional varieties are in various stages of development. The latest variety of wheat approved by the Government’s seed certification department, Chakwal-97, was developed at BARI. On farmers’ fields, the average yield of this variety is 20 percent higher than earlier varieties. Land preparation techniques tested at BARI suggest that deep cultivation with a moldboard plough results in 27 and 37 percent increases in the yield of wheat and groundnuts, respectively, compared with the conventional tillage practices of rainfed areas.
12. In 1989, the Punjab government established the Soil and Water Conservation Research Institute (SAWCRI) at Chakwal with the principal task of developing a system to monitor surface runoff and soil losses for different land uses, soil types, and rainfall patterns. Against a target of 276 experiments for reducing water and soil erosion, SAWCRI conducted 220 experiments on moisture conservation, 18 on soil and water loss monitoring, and 38 on soil erosion control. These included experiments to measure the effectiveness of erosion control through the use of stop wash barriers; staggered planting of eucalyptus, peach, and citrus plants; and infiltration ditches. Preliminary results show that the incidence of erosion can be halved. Experiments being conducted on farms show that natural means of controlling soil and water losses can be low cost, environmentally friendly, and very effective.
ii. Adaptive Agricultural Research
13. It was envisaged at the time of project appraisal that, in collaboration with BARI, basic research findings would be tested on fields within the project area. The Adaptive Research Station at Bhaun in Chakwal Subdistrict conducted 354 trials, against a target of 307. These trials pertained to wheat, groundnut, mustard, gram, maize, and sorghum, and indicated the optimal inter-row spacing, fertilizer application ratio, soil treatment, and the appropriate use of insecticides and pesticides. Feedback from the farming community suggests that there is need for wider dissemination of the research findings, and conducting more trials on farmer’s fields.
iii. Agricultural Extension
14. Project support to agricultural extension services was to focus on techniques of moisture conservation, and appropriate crop mixes, rotation, and fallows. The measures were to be 4 demonstrated in 44 demonstration and observation villages (DOVs),4 which formed the geographical nucleus of the extension services. The major achievements under this component are summarized in Appendix 1. Performance under this component was satisfactory.
iv. Women’s Agricultural Extension Program
15. The Project was to support a program to recruit and train women to provide agricultural extension services in the project area. Women field assistants were to have been trained for a year at the Barani Agricultural College (BAC). However, ABAD and BAC could not agree on the sequencing of the training program. ABAD shifted the venue to the Barani Agricultural Training Institute (BATI) at Dagal. The proposed construction of a women’s hostel at BAC was thus not undertaken. Instead, the existing hostel facilities at the BATI premises were used. ADB agreed to the new training arrangement. During implementation, 4 women agricultural officers, 8 women field assistants, and 72 village motivators were recruited. The position of field assistant was changed to that of extension worker. The 4 women agricultural officers attended a 6-month training course in farming systems research and methodology, and adaptive research at the Asian Institute of Technology in Bangkok, Thailand. During implementation, the salaries of the female extension staff were paid by the Project. However, on project completion, with the exception of one women agricultural officer, their services were dispensed with. The Extension Wing of the Department of Agriculture (DOA) believes that the training imparted by the female extension staff during the Project has succeeded in generating a self-sustaining momentum and thus a formal female extension cadre is not required. The PCM is, however, of the opinion that given the pivotal role played by women in rainfed agriculture, there is a need to maintain a formal women’s extension service in the project area.
16. During implementation, the emphasis of the training activities was on kitchen gardening, bakery preparation, fruit and vegetable preservation, and the establishment of seed clubs and small-scale enterprises. The Project trained 2,951 women in fruit preservation, and 6,843 in making bakery products. It established 46 seed clubs, 2 short of the target of 48.
b. Livestock Husbandry Subcomponent
17. This subcomponent comprised programs for livestock production extension, animal health, and livestock nutrition research.
i. Livestock Production Extension
18. The Project was to support the establishment of an intensive livestock production area under the reorganized provincial Department of Livestock and Dairy Development (DLDD),5 construction of eight livestock production extension centers, and provision of additional staff for these centers. Major accomplishments under this component are summarized in Appendix 1. On project completion, this component had still not been evaluated by the evaluation wing of Punjab’s Planning and Development (P&D) Board, with the result that it could not be transferred to the Punjab government’s recurrent budget. The P&D Board, however, has now evaluated this component and recommended that it be retroactively transferred to the government’s recurrent
4 The 44 DOVs were selected principally on the basis of farmers’ willingness to participate in an intensive extension program covering soil and water conservation, social forestry, livestock development, and agriculture. Prior to the Project, these 44 DOVs were covered under the World Bank-assisted Punjab and Sindh Agricultural Extension and Adaptive Research Project (IDA credit 1762-PAK, for SDR25.5 million approved in February 1987). 5 A similar approached was envisaged under Loan 973-PAK(SF): Livestock Development Project, for $43 million approved in September 1989. 5 budget with effect from the project closing date, and DLDD be given permission to hire additional professional staff to operate the centers. Pending approval of this recommendation, the eight centers are being run by deputing some of the existing staff.
ii. Animal Health
19. Under this subcomponent, the Project provided vaccines for locally endemic diseases that affect farm animals. Achievements included the drenching and spraying of 75,934 cattle and buffaloes, and 114,175 sheep and goats, against a target of 72,890, and 110,349, respectively.
iii. Livestock Nutrition Research
20. An applied research program was established at the Barani Livestock Production Research Institute (BLPRI) at Kherimurat, in Fatehjang Subdistrict to determine the most appropriate livestock feeding regimes under existing farming systems. Institutional strengthening activities carried out under the Project included the construction of a feedmill, purchase of machinery, equipment, and vehicles. The feedmill had produced 125 tons of mixed feed by March 2000, catering to the needs of BLPRI’s research animals. As envisaged at appraisal, BLPRI continued operating its ongoing one-week villager/farmer training courses throughout the Project period. Against a target of 847, BLPRI trained 814 farmers. On conclusion of the training course, participants were given veterinary kits provided by the Project.
3. Rural Infrastructure
a. Farm-to-Market Roads
21. The Project provided for the upgrading of 160 kilometers (km) of earthen access roads to farm-to-market roads (FMRs) linking villages to major arteries in the four project subdistricts. The September 1994 SPAM approved the upgrading of an additional 140 km of roads. The list of roads is contained in Appendix 2. Against the target of 300 km, 312 km of roads were upgraded. All of the project roads were constructed on land donated by the beneficiaries and are 3.1 meters wide with 2.1 meters shoulders on either side. The quality of roads is satisfactory. Where needed, culverts and other water disposal structures have been constructed. All of the roads have been formally included in the inventory of the provincial Department of Communication and Works (DCW), and its overall annual road maintenance program.
b. Village Water Supply
22. At appraisal, the Project provided for the construction of 16 village water supply schemes (4 in each subdistrict). Subsequently, ADB and ABAD agreed to raise the target to 18 schemes. These schemes are listed in Appendix 3. With the exception of those constructed in Shakargarh Subdistrict, all schemes have the water intakes set in riverbed alluvium. In Shakargarh Subdistrict, the water source is a tubewell. With the exception of the civil works and the pump, all other elements of the water supply network were financed under the Project. Currently, 17 schemes are operational, benefiting a population of some 40,000. Of these, 10 schemes have been taken over by community organizations. The Punjab government’s Department of Public Health Engineering (DPHE), the Implementing Agency for this component, estimates that the provincial average break-even point of water supply schemes is PRs75 per household per month. Against this, the average user cost being collected under the 7 schemes 6 being maintained by DPHE was PRs40 per household per month. Thus, for these 7 schemes, DPHE bears about 50 percent of the operations and maintenance (O&M) cost. It was stipulated at appraisal that two years after their completion, DPHE would hand over the schemes to the respective district councils. Currently, however, the district council mechanism does not exist. The non-operational scheme at Dewal village in Fatehjang Subdistrict was damaged in the 1994 floods. According to DPHE, PRs150,000 is required to make the scheme functional. The PCM observed that this amount could easily have been accommodated under the Project, but the problem was not brought to ADB’s attention. Despite DPHE’s request, the Punjab government did not sanction this amount. As a result, a population of some 2,600 is being denied access to safe drinking water.
4. Rural Credit
23. The aim of the credit program was to focus on the credit needs of poor rural men and women, offering them loans that were to be secured by pledges, and immovable and movable assets. The eligibility criteria specified a 10 percent equity contribution by the borrower. PRs283 million was disbursed, against a target of PRs153 million, benefiting 6,878 borrowers (Appendix 4). The recovery rate under this component has been 63 percent, about the same as that for ADBP’s overall operations. The annual mark-up charged by ADBP was 14 percent per annum, 2 percent higher than the rate stipulated at appraisal. The distribution of credit was as follows: (i) 64 percent for small-scale agriculture, against a target of 67 percent; (ii) 9 percent for small- scale irrigation, against a target of 8 percent; and (iii) 12 percent for cottage industries, against a target of 24 percent. The remaining 15 percent disbursements were made for production loans, i.e., for agricultural inputs such as seeds and fertilizers, which were not envisaged at appraisal. Reasons for the low lending for cottage industries included (i) a failure to develop independent agriculture marketing links due to the distances of the villages from the market places, (ii) cultural restrictions on women traveling and marketing their cottage industry products, (iii) the failure of the consultants for small enterprise development to identify viable marketing links, and (iv) the reluctance of the potential borrowers to borrow money out of fear that they would not be able to repay it, given the inherent high risk of cottage industries in barani areas. The majority of the loans provided on pledges were made to women as they had no independent collateral. Almost all such loans approved for women were used for dairy farming or the purchase of sewing machines to support small, home-based enterprises. Loans to women, in value terms, amounted to only 6 percent.
5. Institutional Strengthening
a. Consulting Services
24. The appraisal Mission envisaged a combined input of 36 person-months of consulting services from two nongovernment organizations (NGOs) for (i) community mobilization and training in agricultural services, and (ii) small enterprise development. The appraisal also provided for consulting services of 12 person-months for production of audiovisual material, and 72 person-months for pre-and post-project evaluation. Given the then limited role of NGOs in the project area, ABAD and ADB agreed to allow consulting firms to bid for community mobilization and enterprise development components. Following a competitive selection process, the selection committee, with representation from ADB, recommended hiring two consulting firms. One consulting firm was engaged for 24 person-months to form community beneficiary organizations (CBO) and provide training in agricultural services to beneficiaries. Against a target of 100 CBOs, a total of 107 CBOs were formed. No quantitative targets were defined for the following activities, but (i) 109 master trainers were trained to conduct adult 7 literacy classes; (ii) 133 farmers received training in livestock management, and (iii) 80 women farmers were trained in the preparation, plantation, and caring of fruit trees. For small-scale enterprise development, another consulting firm was engaged for 18 person-months. Major achievements were as follows: (i) against a target of 190, marketing training was provided to 395 farmers; and (ii) against a target of 60 new enterprises, none were established, but assistance was provided for strengthening 87 existing microenterprises. A local audiovisual consultant was engaged for 4 person-months to document project achievements and lessons learned. Four sets of videocassettes detailing project activities under each component have been prepared. The Punjab Economic Research Institute (PERI) was engaged for 168 person- months to conduct a baseline survey and prepare the government’s project completion report. Both activities have been satisfactorily completed.
b. Training
25. The training component has been fully implemented. The objectives of the training component were to strengthen the Implementing Agencies and train the beneficiaries. Twenty- five provincial staff members of the DOA’s Directorate of Soil and Water Conservation received in-service training in biological techniques suitable for soil and water conservation, 12 livestock production extension officers of DLDD attended refresher courses, and 40 staff members of the extension wing of the DOA received in-service training in small enterprise development. About 20 person-months of overseas training was arranged in different disciplines.6 In addition, four study tours were organized for project beneficiaries. Under the crop and animal husbandry component, 72 women village motivators, 206 women farmers and 814 livestock farmers were trained. Beside the formal training, 2,009 farmers’ days were held with film shows on crop production and 126 with film shows on livestock production. The consultants on village mobilization and training held adult literacy classes for beneficiaries and disseminated information on family planning. The consultants on small enterprises trained 600 potential entrepreneurs in various types of cottage industries and small-scale enterprises.
c. Project Coordination Unit
26. The Project strengthened the project coordination unit (PCU) established under the IFAD-funded first Barani Area Development Project by providing office equipment and vehicles, and financing some staff salaries and operating expenses. A list of major equipment and vehicles procured is contained at Appendix 5.
6 Four DOA staff members attended a course in farming systems methodology and adaptive research at the Asian Institute of Technology in Bangkok, Thailand. The Director-General, ABAD, and 10 other people from the five implementing agencies attended a two-week course in crop production, range management, irrigation, and soil and water conservation at the International Agro-Hydrological Research and Training Center, Izmir, Turkey. An agrometeorologist from BARI received six months training at the World Meteorology Organization at Puna, India. Another staff member from BARI received two weeks training in computer application of statistical methods at the Centre for International Agricultural Research in Dry Areas (ICARDA), Syria. The Director-General, ABAD; Director, SAWCRI; Deputy Director, Directorate of Soil Conservation; and Deputy Director, Agriculture Extension participated in a two-week training course on soil and water conservation and agricultural extension practices at the University of Australia, Western Australia. 8
B. Implementation Arrangements
27. In general, the Project followed the implementation arrangements envisaged at the time of appraisal. The Project had two Executing Agencies and five Implementing Agencies. ADBP was the Executing Agency for the agricultural credit component, and the government of Punjab for the other components. DOA was responsible through its Directorate of Soil Conservation for the program of soil and water conservation treatment, through its Directorate of Adaptive Research for all research activities, and through its Directorate of Agricultural Extension for the provision of extension services. DOA’s Directorates of Agricultural Engineering and On-farm Water Management were responsible for the water harvesting component. The Punjab Department of Forestry (DOF) was responsible for the afforestation of public forest lands and social forestry activities; DCW for investigation, design, and supervision of the upgrading of rural roads; and DPHE for investigation, design, and supervision of contracts for village water supplies. The implementation arrangements were complex mainly due to the inherent project design that required simultaneous multiple interventions under a whole-farm, integrated approach. Under the Project, ABAD had a coordination responsibility at two levels: (i) the interagency level, through a project coordination committee (PCC), and (ii) as secretariat to a project steering committee (PSC), chaired by the Punjab P&D Board. Field-level coordination among line departments was the responsibility of the PCU, answerable directly to ABAD and indirectly to the P&D Board. In consultation with the PSC, ABAD was also responsible for the selection and engagement of consultants, and the coordination of training activities.
C. Project Costs
28. The Project’s appraised and actual costs are summarized in Appendix 6. At the time of appraisal, the total cost was estimated at $59.9 million equivalent, (inclusive of taxes and duties and service charge on the ADB loan and interest on the IFAD loan during construction) of which $21.5 million would be in foreign currency and $38.4 million equivalent in local currency. The ADB loan of $25.0 million and the IFAD loan of $19.4 million were equivalent to 42 percent and 32 percent, respectively, of the appraised project cost. The UNDP grant of $0.6 million was equivalent to 1.1 percent of the total project cost. On project completion, ADB’s financing stood at $22.8 million, and IFAD’s at $15.5 million, representing 44 percent and 30 percent, respectively, of the completed project cost of $51.3 million. The UNDP grant was fully disbursed. The Government contributed 16 percent and the beneficiaries 5 percent of the completed project cost. As agreed by the Government and ADB, a partial cancellation of SDR2.3 million ($3.0 million) was effected on 30 June 1998, and SDR0.5 million ($0.7 million) was canceled on loan closure in December 1998. The IFAD loan was used to finance the social forestry, crop and livestock development, rural credit, and institutional strengthening components. UNDP’s grant financing was used for consulting services and training. ADB financed the other project components, with counterpart funds being provided by the Government. ADBP provided part of the financing for the rural credit component. In proportionate terms, beneficiary contributions (5.3 percent) met the targets set at the time of appraisal.
D. Project Schedule
29. Although the Project started late due to a six-month delay in loan effectiveness, virtually all project activities were completed by loan closing (Appendix 7). Activities under the Project’s five main components commenced soon after the effectivity of the ADB loan in December 1990 and IFAD’s loan in February 1991. However, the engagement of consulting firms for community mobilization and small enterprise development was delayed (para. 30). Two FMRs with a total 9 length of eight km could not be completed by loan closing. The Punjab government financed their completion after the closing date. The ADB loan account was closed on 24 December 1998 after reconciliation of project accounts.
E. Engagement of Consultants and Procurement of Goods and Services
1. Engagement of Consultants
30. Consulting services for both community mobilization and small enterprise development were financed by the UNDP grant, which was approved in November 1992 and became effective in April 1993, some two-and-half years after the effectivity of the ADB loan. Following a competitive selection procedure, both the consultants commenced work in April 1994, i.e., four years after the commencement of Project activities. As a result, formation of CBOs, which should have preceded project implementation, actually followed project interventions with a lag of some four years. Some six months prior to loan closing, ADB approved ABAD’s request for hiring a consultant to develop audiovisual material to be used for information dissemination. This activity was completed close to the loan closing date, but ABAD now intends to use the material under the IFAD-financed Barani Village Development Project. This activity should have been completed at an early stage so that the Implementing Agencies and beneficiaries could have fully benefited from it. Appraisal provided for consultants to conduct a baseline survey and impact analysis. The services of PERI were used for these activities.
2. Procurement
31. Goods and services were procured in accordance with ADB’s Guidelines for Procurement. DCW used prequalified contractors selected through local competitive bidding to upgrade FMRs and construct buildings. With the exception of the eight veterinary centers, the construction quality of FMRs and the buildings was satisfactory. The local competitive bidding procedure used on the Project was in conformity with ADB procedures.
F. Performance of Consultants, Contractors, and Suppliers
1. Consultants
32. The consulting firm for community mobilization was initially engaged for 24 months, but this period was later extended by another 6 months. The task of the firm was to offer a rural education and adult literacy program to local communities as an incentive to forming CBOs. At the commencement of the services, the consultant complained that the 44 DOVs forming the geographical nucleus of the Project’s extension services, constituted too large an area and, with the concurrence of ABAD, started their activities in villages other than the DOVs. Services begun by conducting a reconnaissance survey to identify suitable clusters of 8-10 villages. The firm subcontracted the activities relating to the functional literacy component to an NGO, which trained 109 master trainers in the villages identified by the firm. Contrary to project design, which had envisaged the organization of the communities around the focal point of functional literacy, the reality turned out to be the other way around. The selection of villages in clusters was contrary to the provisions of the consulting services contract, which clearly stated that the consultant would not concentrate its activities in geographic pockets. The four-year delay in the commencement of these services was too big a handicap to overcome. There was no apparent rationale for allowing the formation of CBOs in villages other than the DOVs. A representative of the consulting firm informed the PCM that the firm’s inability to compete with government 10
Implementing Agencies in providing project-related facilities was a major limitation in their community mobilization efforts.
33. The consulting firm for small enterprise development initiated its activities by carrying out a market survey, which showed that the project-supported small-scale enterprises could compete only in livestock products. The firm engaged a subcontractor to provide training in marketing and quality control, and also arranged low-cost training in several cottage industries. The firm was unable to persuade the target beneficiaries to borrow funds from ADBP for the expansion of their cottage industries and only 49 referrals were received by ADBP. Instead of focusing on establishing new enterprises, the consultant concentrated on existing small-scale enterprises. Although the terms of reference required all loan applications to be referred to ADBP, the firm also provided cash grants upto PRs6,000 from a special grant fund allocated from the Project’s budget. ADB’s de facto approval was obtained by ABAD for this unusual and unsustainable arrangement. Beneficiaries interviewed by the PCM stated that they used these cash grants for personal consumption purposes rather than to expand their small-scale enterprises. Improved marketing was to have been the most important aspect of this package, but it turned out to be the one most ignored. The firm’s contract stated that it was to develop and transfer marketing and business skills to the target groups. The objective was to formulate, plan and develop viable small-scale enterprises and to increase the awareness of the target groups of marketing opportunities for their products. In reality this was not achieved.
34. The performance of the audiovisual consultant was satisfactory. Four sets of videocassettes have been prepared detailing project activities. The performance of PERI has also been satisfactory in conducting the baseline survey and impact analysis.
2. Contractors
35. The performance of contractors was generally satisfactory and there were no contractual delays in the completion of works. The quality of the upgraded roads is satisfactory and where necessary, water drainage structures have been constructed. The performance of contractors in the construction of buildings and for the water supply schemes was also satisfactory. The quality of civil works of the eight vetinerary centers was, however, substandard.
G. Conditions and Covenants
36. Most loan conditions and covenants were met (Appendix 8). The entire share of counterpart funds, over the life of the Project, was provided to ABAD at the beginning of project implementation by the government of Punjab.7 Audited project accounts were submitted as scheduled. With the exception of the audited statement for 1997/98, all audited statements received by ADB were unqualified, with no adverse remarks by the auditor general's office. Major covenants partially or not complied with relate to staffing of livestock extension centers, O&M budgets for FMRs, and the functioning of a formal women’s extension service in the project areas. For these project components, the PCM believes that remedial measures are required to prevent weakening the qualitative benefits of the project interventions. Inadequate O&M funds, a perennial problem in the roads sector, will over time lead to a deterioration of the FMRs.
7 Under its special development program that existed in the 1980s for barani areas, the federal Government provided the Punjab government the entire life-of-the project counterpart funds at project commencement. 11
H. Disbursements
37. Contract awards and disbursements remained low during the first two years of the Project, owing to delays in start-up activities, but gradually accelerated and peaked in 1996 and 1997 (Appendix 9). The final cumulative disbursements from ADB of SDR16.3 million ($22.8 million) were equivalent to 86 percent of the approved loan amount of SDR19 million ($25 million). The UNDP grant of $0.65 million was fully disbursed. Of the IFAD loan of $19.4 million, cumulative disbursements8 were $15.5 million.
I. Environmental and Social Impacts
38. The Project had a positive environmental effect. It promoted the use of environmental- friendly measures for water and soil conservation. Since the criterion for interventions was a farm size of 5 ha or less, most of the beneficiaries were the rural poor.9 The assured availability of irrigation water is an incentive for farmers to switch to commercially lucrative cultivation of vegetables. The development of new drought resistant, yet high-yielding varieties of wheat, and demonstrated benefits from timely vaccination of livestock have also helped raise agricultural productivity and milk yields. The training of women in poultry rearing and cottage industry skills was also beneficial. The upgrading of earthen roads to FMRs has enabled people to take their agricultural produce to nearby towns where it fetches a better price.
J. Performance of the Borrower and the Executing Agencies
39. The performance of the Punjab government, through the P&D Board, as the EA for the Project’s non-credit components was generally satisfactory. ABAD’s inter-agency coordination, integration and monitoring activities were also satisfactory, as was the operation of the Project’s imprest account and overall financial management by the PCU. However, in the absence of technical expertise, the PCU was not in a position to critically analyze the interventions proposed by the line agencies and it should have sought greater technical assistance from ABAD. Implementation deficiencies such as the poor construction quality and inadequate staffing of the livestock extension centers could have been addressed in a more proactive manner. Deviations from project design, such as the consultants on small enterprise development providing cash grants to existing small enterprises instead of helping potential entrepreneurs secure loans from the Project’s rural credit component, also affected project impact. To coordinate, integrate, and monitor the Project activities, monthly coordination meetings were held by the PCU with the Implementing Agencies at subdistricts and project levels. While ADBP, the Executing Agency for the Project’s credit component, exceeded the disbursement target set at appraisal, it was not generally successful in developing women clientele and in posting the required number of female credit officers. The share of credit disbursed to women remained low, at 6 percent.
K. Performance of the Asian Development Bank
40. ADB supervision seems to have been strong for the watershed improvement, rural infrastructure, and rural credit components, but less rigorous for the crop and livestock development, and institutional strengthening components. For example, given the delay in the engagement of the two consulting firms, the ADB should have critically reviewed their terms of
8 On a provisional basis. 9 However, targeting was not always consistent with this criterion. In some cases, large farmers, influential in local politics, benefited from project interventions 12 reference at the time of recruitment and made appropriate adjustments to reflect the current status of the project. Frequent turnover of ADB project staff10 had an adverse effect on project administration. Project targets were frequently revised by ABAD and their post facto endorsement by ADB encouraged ABAD to continue this practice. The Project had a considerable number of civil works, but there was no in-built mechanism for independent supervision of these works. In the absence of construction supervision services, ABAD itself monitored the progress of physical works on an ongoing basis. Given staff constraints and lack of required expertise, ABAD could not adequately undertake such supervision. ADB should have realized this oversight and taken measures to address the issue.
41. Project implementation was delegated to ADB’s Pakistan Resident Mission (PRM) on 1 January 1997. By this time, however, most activities were nearing completion and there was little room for making adjustments in implementation. At the wrap–up meeting of the PCM, actions required to be undertaken by the Punjab government were highlighted. The ADBP has fulfilled its commitment to the PCM to revamp its Credit to Women Department and post the female credit officers, as set at the time of appraisal, in the project area. The agreements reached with the provincial government at the wrap–up meeting of the PCM are summarized in the Action Plan (Appendix 10).
III. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS
A. Financial Performance
42. Financial returns to selected enterprises are presented in Tables 7-9 of Appendix 11. The models for crop and livestock production are based on the same assumptions as the ones for the economic analysis (para. 43). The results indicate that for an average farm of 5.9 ha, the increase in income from crop production between the baseline and post-project surveys was 8.2 percent on non-project farms, and 51.7 percent on project farms. The increase in returns from livestock development on an average farm was 20 percent on non -project farms, and 40 percent on project farms.
B. Economic Performance
43. The main quantifiable benefits from the Project are increased crop, livestock, and forestry production. Assumptions used in the economic analysis (Appendix 11) are the same as those used at appraisal. The analysis indicates an economic internal rate of return (EIRR) of 10.1 percent, which is less than half the rate of return estimated at appraisal. The Project’s sensitivity with respect to reduction in prices of the major outputs, as well as less than required spending on O&M have been examined and the results are summarized in Table 6 of Appendix 11.
C. Attainment of Benefits
44. The mix of interventions under the Project has led to a positive impact on agricultural practices in the project area. The cultivated area of beneficiary farmers has increased by 28 percent, while land use intensity and cropping intensities have increased by 23 percent and 21 percent, respectively. The water outlet structures constructed under the watershed improvement component are operating satisfactorily, although a few of them, constructed early in the project life cycle, require minor brick and masonry repair work by the beneficiaries. With the exception
10 From commencement to completion, seven different ADB staff were responsible for project administration. 13 of one nonoperational scheme, the village water supply schemes are operating satisfactorily. With greater effort by DPHE, more schemes can be transferred to community organizations. The FMRs are in good condition although there are lingering sectoral concerns about the adequacy of the O&M budget for the roads sector in general. The research initiatives started by BARI and SAWCRI have the potential of making rainfed agriculture more sustainable than before the Project. The social forestry component, which suffered a setback at project completion, is now doing well as manifested by the operation of 17 plant nurseries in the project area. An impact evaluation study11 conducted by PERI noted that, as a result of the watershed improvement interventions, the proportion of irrigated area to cultivated area increased by 59 percent, and the proportion of farmers who adopted soil conservation practices advocated under the Project increased by 29 percent. Further, the Project has changed cropping patterns from the traditional subsistence-level cereal production to short-gestation cash crops, primarily vegetables. This has increased farmers’ incomes.
45. The performance of the Project’s livestock extension component however, needs improvement. The beneficiaries in Sohawa Subdistrict complained that after they had contributed land for the construction of the livestock centers, they found no staff or medicines were available at the two centers constructed in their subdistrict. They felt this component had done little to improve the condition of their livestock. Overall, under the livestock development component, the focus of activities was on animal health while other equally important activities, such as livestock production extension and improvements in nutritional balance, were marginalized. One of the main extension activities was the week-long training imparted to interested members of the community. However, often the recipients of this training were not actively involved in livestock rearing. Feedback mechanisms from the field staff to the BLPRI were poor and need to be strengthened. Some of the packages put forward by nutrition research had negative side effects in the field, but the feedback was not communicated to the research centers. With the expected transfer of this component to the provincial government’s recurrent budget, the performance of this component is expected to show considerable improvement.
IV. CONCLUSIONS AND RECOMMENDATIONS
A. Conclusions
46. The Project’s principal objectives of increasing the level of farm production and income and improving the overall standard of living in the project areas have generally been achieved. The secondary project objective of reducing migration to urban areas was not cast in any specific terms, and in the absence of hard data, it is not possible to determine whether this has been achieved. The Project has had a positive impact in terms of soil and water conservation; strengthening of agriculture research in rainfed areas; upgrading of FMRs, and construction of village water supply schemes. The mix of Project interventions has enhanced agricultural productivity and facilitated a change in cropping pattern from the traditional cereal production to planting of short-gestation, commercially lucrative vegetables and fruits. The beneficiary farmers are responsible for the maintenance of the on-farm soil and water conservation works. During its field visit, the PCM observed that beneficiaries generally maintain these assets, assuring their sustainability. BARI and SAWCRI, the two agricultural research institutions, and the Baun Adaptive Research Station were strengthened under the Project. The expenses of three
11 Evaluation of the Second Barani Area Development Project, Punjab Economic Research Institute (PERI), May 1999. 14 institutions have been transferred to the provincial government’s recurrent budget, thus assuring their financial sustainability.
47. Due to implementation lapses by Implementing Agencies, project interventions in livestock production extension, agricultural extension services for women, and social forestry have had less than the desired impact. Although the Project’s reevaluated EIRR of 10 percent meets the threshold of a generally satisfactory rating, it is, however, less than half the appraisal estimate of 24 percent. Given the less than satisfactory performance of the three aforementioned project components, and concerns about their sustainability due to delays in implementing the agreed remedial actions as listed in the Action Plan (Appendix 10), the PCM, at this time, considers the Project to be partially successful. If selected for a performance audit, the PCM recommends that this rating be reviewed, as by that time more of the benefits would be quantifiable and additional information available on the actual release of funds for O&M purposes.
B. Lessons Learned
48. An evaluation of the Project’s implementation shows that the site selection criteria for watershed development could have been used more judiciously, resulting in project benefits reaching a higher number of beneficiaries. A better balance could have been found between physical structures and biological measures (e.g., vetiver grasses) under the soil and water conservation component. Where economies of scale necessitated the construction of assets of a size that was greater than the need of a single farmer, a CBO should have been formed with the owners of adjacent plots. This would have resulted in a greater number of people benefiting from the same investment. This would have lowered the beneficiary to cost ratio, while increasing the beneficiary to return ratio.
49. In terms of ownership and sustainability, farmers who had benefited from the construction of a dugwell and had contributed 30 percent of the construction cost, showed the greatest enthusiasm for the Project. On these schemes, the maintenance was good and sense of ownership was high.
50. A high degree of recurrent cost financing by external financiers during implementation adversely affected the sustainability of some of the Project’s components such as social forestry and women’s extension services. To foster greater ownership, recurrent costs should be financed on a declining basis, and should preferably end a couple of years before loan closure.
51. In a beneficiary-driven rural development project, the formation of CBOs must precede project interventions rather than follow them. In this Project, formation of CBOs was delayed by about four years. In the interim, the Implementing Agencies approached the potential beneficiaries in their individual capacity thereby negating the basic project approach. Thus, instead of being community-or demand-driven, the Project was generally supply-driven by ABAD and the staff of various project Implementing Agencies.
52. The Project had a large civil works component to be undertaken by independent contractors. In the absence of independent construction supervision services, construction quality of the 8 livestock centers was adversely affected. Future rural development projects with a large civil works component should consider the inclusion of construction supervision services 15 in project design, as have been provided in the ADB-assisted Bahawalpur Rural Development Project.12
53. In addition to the subsidy element, another major reason for the less than satisfactory performance of the social forestry component was that not enough attention was paid to planting species that, on maturity, would have value other than for fuelwood. The absence of any downstream wood processing industries also served as a disincentive.
54. ADBP’s operating culture has a strong preference for large-scale lending. In other rural development projects in Pakistan, approved in the past few years, ADB has made a conscious effort to find and develop alternative channels for providing credit to small farmers. The experience of this Project confirms that these new initiatives are needed.
55. This Project shows that project interventions should be carefully assessed to ensure proper focus and beneficiary targeting. Future projects should consider limiting interventions to a few, community-driven, high need areas in order to foster greater beneficiary ownership and minimize the supply-driven approach of the Implementing Agencies. In fact, the formation of community organizations must be considered a prerequisite for project interventions. Such an approach would also minimize the demands for O&M purposes on the government’s budget.
C. Recommendations
1. Project Related
56. To consolidate the gains made under the Project, ABAD, in coordination with the Implementing Agencies, should continue to monitor project progress on a annual basis. Such monitoring should include consultation with beneficiaries to ensure an institutionalized feedback mechanism.
57. The outreach programs of adaptive agriculture research and livestock and dairy development should be expanded to ensure a wider geographic coverage.
58. The requirement of agricultural credit in rainfed areas should be carefully assessed. Nonsubsidized credit programs should be developed to cater to the need of small farmers, who often are bypassed by the traditional collateral-based lending mechanism.
59. For maintenance of the Project FMRs, the government of Punjab should significantly increase the financial allocation for O&M.
60. If selected for postevaluation, a project performance audit report should be prepared by 2003. Provided that the Implementing Agencies continue to provide technical support to the beneficiaries, sustainable improvements in rainfed agriculture in the project area will be quantifiable by that time.
2. General
61. The water rights of downstream users needs to be addressed when undertaking works under a watershed improvement component. For example, under this Project, in Fatehjang
12 Loan1467-PAK(SF): Bahawalpur Rural Development, for $38 million, approved in September 1996. 16
Subdistrict, the construction of mini dams to store the runoff water and small perennial flows deprived the downstream users of the perennial flow of water.
62. The experience of this Project suggests the need for greater interaction and coordination among the Implementing Agencies, community organizations, and nongovernment organizations. If project interventions are provided directly through the Implementing Agencies, there is little incentive left for the formation of CBOs. Thus, the preferred sequential approach would be the formation of CBOs, followed by project intervention.
63. For future rainfed area development projects in Punjab, the integrated whole-farm approach of this Project should be reviewed. Such an approach can lead to a concentration of project interventions in favor of a limited number of beneficiaries.
64. To ensure effective monitoring, covenants pertaining to O&M need to be spelled out in specific per unit terms. For example, for the roads component, O&M requirements per kilometer of road length should be included in the loan covenants, as has been done for the ADB-assisted Rural Access Roads Project.13
65. Delegation of project implementation toward the closing stages of a project does not leave much room for Resident Mission staff to make an impact on implementation performance. Thus, if projects are to be delegated, this must be done early in the project implementation cycle.
13 Loan 1401-PAK(SF): Rural Access Roads, for $144 million, approved in November 1995. 17
APPENDIXES
Cited on Number Title Page (page, para.)
1. Targets and Achievements 18 1, 4
2. Farm-to-Market Roads Completed under the Project 20 5, 21
3. Rural Water Supply Schemes Completed under the Project 22 5, 22
4. Rural Credit: Loan Sizes, Category and Number of Loans 23 6, 23
5. Major Procurements under the Project 24 7, 26
6. Appraised and Actual Costs 27 8, 28
7. Project Implementation Schedule 28 8, 29
8. Compliance with Loan Covenants 29 10, 36
9. Annual Contract Awards and Disbursements 35 11, 37
10. Action Plan 36 12, 41
11. Socioeconomic Reevaluation of the Project 38 12, 43 18 Appendix 1, page1 TARGETS AND ACHIEVEMENTS
Project Components Unit Appraisal Revised Actual Target Target Achievement A. Watershed Improvement 1. Soil and Water Conservation Improved Cultivation ha 70,549 37,282 33,282 Deep Ploughing/Chiselling ha 43,908 28,836 26,522 Terracing and Levelling ha 56,111 31,668 22,444 Land Reclamation ha 4,865 6,117 6,110 Gully Plugging ha 9,065 8,786 8,786 Water Disposal Outlets ha 21,901 8,786 8,786 Demonstration of Vetiver Grass ha 162 400 400 Establishment of Nurseries no. 8 6 6
2. Rangeland and Forestry Development a. Public Forest Dry Afforestation/seeding ha 4,047 5,889 5,027 Anti-erosion Works ha 4,047 5,597 4,853 Fencing ha 4,047 1,403 1,164 b. Private Lands Silvo Pastoral ha 2,800 1,832 1,558 Agri-silvicultural ha 2,800 8,506 8,468 Demonstration Plots ha _ 2,000 1,767 Soil Conservation Works ha _ 1,332 1,332
3. Water Resources Development Turbines no. 14 5 5 Mini-dams no. 54 296 323 Ponds/Weirs no. 120 690 693 Dugwells no. 150 1,140 1,140 Tubewells no. 36 93 92 Liftpumps no. _ 967 965 Nakkas no. _ 2,636 3,923 Water StorageTanks no. _ 91 92 Water Conveyance Network ha _ 54 59 Culverts no. _ 24 49 Handpumps no. _ 1,077 727 Drop Syphons no. _ 622 847 Drip Irrigation System ha _ 132 44
B. Crop and Animal Husbandry 1. Basic Agricultural Research BARI no. of trials _ 299 284 SAWCRI no. of trials _ 276 276
Appendix 1, page 2 19 Project Components Unit Appraisal Revised Actual Target Target Achievement
2. Adaptive Research no. of trials – 307 354 Demonstration Plots no. – 2,078 1,237 Farmer Days no. – 141 135 Model Farms no. – 116 104 Distribution of Technical Literature no. – 4,676 4,526
3. Agricultural Extension Demonstration Plots no. – 2,184 2,173 Farmer Days no. – 1,678 1,874 Distribution of Technical Literature no. – 19,708 25,454 Pre and Post Harvest Training no. – 4,896 5,053 Field Assistants no. 44 8 8 Women Agricultural Officers no. 8 4 4 Women Field Assistants no. 72 48 8 Women Extension Workers no. 72 72 72
4. Livestock Husbandry Livestock Production Extension poultry units 15,000 48,389 48,389 Training in Livestock Development no. of farmers 700 847 814 Distribution of Kits no. 700 770 719 Outreach Training no. of farmers – 9,600 8,932 Artificial Insemination no. of animals – 21,285 20,495 Vaccination no. of animals – 4,080,000 4,970,000 Farmer Days no. 96 126
C. Rural Infrastructure 1. Farm-to-Market Roads km 160 297 312
2. Village Water Supply no. of schemes 16 18 17
D. Rural Credit 1. Disbursements PRs million 153.3 282 2. Borrowers no. – 6,878 BARI = Barani Agriculture Research Institute, SAWCRI = Soil and Water Conservation Research Institute. – = Zero. Source: Agency for Barani Area Development. 20 Appendix 2, page 1
FARM-TO-MARKET ROADS COMPLETED UNDER THE PROJECT
S. Name of Name of Road Length No. Tehsil (kilometers) 1. Chakwal Khokharzer to Khokharbala 10.00 2. Bhagwal Warwal to Mathrala 4.62 3. Karooli to Toba 19.30 4. Jhik Mandi Jhore to Mulhai Mughlan 1.20 5. Chua Ganj Ali Shah to Lehri Shah Nawaz 2.00 6. Boolay Hajial Dheedwal Rabai 3.62 7. Tooti Bun to Balkassar Rest House 5.50 8. Oudherwal Nilla to Warayo 2.00 9. Oudherwal Nilla to Warrah 3.50 10. Oudherwal Nilla to Dhaku 1.00 11. Roopwal to Ranja Road 5.50 12. Tooti Bun to Mulwal 15.50 13. Khajoola to Dumial 10.00 14. BHU Sardhi to Water Supply Scheme Buchal 2.50 Khurd 15. Missing Link on Road Warwal to Mathrala 0.33 16. Malhawala to Hasil Remaining Portion 4.10 17. Jamalwal Road to Uthwal 1.50 18. Khushab Chakwal Road to Ratta 6.00 19. Jamalwal Road to Shahpur 3.75 Sub-Total 101.92 20. Sohawa Dhani Dehra to Padri via Duddi 9.70 21. Adrana to Bogi Chak via Jang Chak 7.00 22. Daila to Kehala Link 1.70 23. Chandar to Choke Rajwal 0.70 24. Access G.T. Road to Bakrala 1.46 25. Panchore to Dherian 5.00 26. Lubana Hail Tarning to Ghannu Mera 3.50 27. Tatrot to Bhatti 3.00 28. Sikandarpur School Stop to Dhoke Dodal 2.00 29. Domeli to Hayal via Dhera 4.00 30. BHU Gura Utaam Sing to Samaha 1.50 31. Gannu Mera to Adda Paniola 3.69 32. Bhangala to Karunta 4.00 33. Dhok Awan to Chapper Syedan – 9 Km 3.72 34. Dhoki Mughalan to Taruta 4.25 35. Kakrala to Fore Poth 7.00 36. Bara Gowa to Salhai 5.00 Sub-Total 67.22 37. Shakargarh Shakargarh to Lesser Kalan 14.00 38. Darman to Delra 5.00 39. Chak Qazian to Gumtala 3.00 40. Bastan to Gorala 3.00 41. Sarwal to Chaura 5.00 42. Kanfrar to Azizpur Bhori 3.50 21 Appendix 2, page 2
S. Name of Name of Road Length No. Tehsil (kilometers) 43. Bhu Shahgharib to Gona 5.00 44. Malik Bagh to Bebelwali 3.00 45. Tarapur to Badala Gujranan 6.50 46. Faathwal Road to Sathiala 0.55 47. Shahgharib Gona Road to Kikowali 1.37 48. Bustan Gole via Mandilali 5.00 49. Gorala Zahidpur Bua Road 3.00 50. Kanjror Tattar via Nawan Pind 4.00 51. Thikrian to Shakargarh Lessar Road 1.59 52. Dehlra to Harar Khurd 4.00 53. Kanjrur Aziz Pur Bohri to Cheema Kaler 3.00 Sub-Total 70.51 54. Fateh Jang Maqam to Bahtar via Langer 7.75 55. Pindi Soba Khan to Dharek 6.68 56. Dhurnal to Qulial 9.50 57. Gali Jaagir to Dhari Riadittoo Rawalpindi District 8.45 58. Sikhwal Sidherial 7.00 59. Bangoo to Datrian via Daltpur Kak Mian Rashida 12.50 Pind Manhuwal 60. Road from Village Sikwal 1.00 61. Dhok Paracha to Groot 1.00 62. Hatar to Namdar 4.30 63. Ward No. 2 Fatehjang from F.D. Road 0.64 64. Kharala Kalan Link Road 1.00 65. Dhok Nathian Link Road 1.50 66. Kharala Khurd Link Road 1.00 67. Village Maqam to Maqam Bahtar 1.00 68. Village Sabbo to Pari 1.00 69. Kothera from 4 km to Gaggan Mahura 0.58 70. Dheri Ria Ditta to Royan Mughlan 2.00 71. Burj to Gadda 3.00 72. Km 38 of Attock-Fateh Jang Road to Cherat 3.00 Sub-Total 72.90 Grand Total 312.55 Source: Agency for Barani Area Development. 22
RURAL WATER SUPPLY SCHEMES COMPLETED UNDER THE PROJECT
Subdistrict Name of Scheme
1. Chakwal Rehna Sadat
2. Chakwal Mian Mair
3. Chakwal Potaki
4. Chakwal Chakral
5. Sohawa Thapla
6. Sohawa Kumba Karbak
7. Sohawa Gorisian
8. Sohawa Dhangri Mirza
9. Shakargarh Bua
10. Shakargarh Hamral
11. Shakargarh Mohlen
12. Shakargarh Chora
13. Fatehjang Dharake
14. Fatehjang Dewal
15. Fatehjang Rai Assadullah
16. Fatehjang Bhalot
17. Fatehjang Ajjuwala
18. Fatehjang Amir Khan
Source: Agency for Barani Area Development. 23 Appendix 4
RURAL CREDIT: LOAN SIZES, CATEGORIES, AND NUMBER OF LOANS
During During Since Inception Purpose Apr-Jun 1998 Jan-Mar 1998 of the Project Number Amount a Number Amount a Number Amount a A. Small-Scale Agriculture Milk Production 177 8.90 548 26.53 4,129 165.68 Sheep/Goat 143 7.26 6 0.10 331 12.07 Poultry Farming – – 2 0.38 11 0.86 Fish Farming – – – – – – Fruit/Vegetable – – – – 48 2.81 Subtotal (A) 320 16.16 556 27.01 4,519 181.42
B. Production Loans Seed 51 2.22 19 0.58 1,042 23.77 Fertilizer 19 0.92 15 0.65 278 14.30 Others 37 1.66 30 1.08 182 7.50 Subtotal (B) 107 4.79 64 2.30 1,502 45.56
C. Small-Scale Irrigation Water Charges – – – – 32 2.85 Installation Of Tube- Wells/turbine/Submursible Pumps 17 2.61 8 1.25 186 18.65 Minor Dams – – – – 2 0.12 Wells 15 0.75 – – 35 1.45 Lift Pumps – – – – 6 0.14 Subtotal (C) 32 3.35 8 1.25 261 23.20
D. Cottage Industries Carpet Manufacturing 63 3.89 – – 162 8.79 Tailoring _ _ – – 32 0.66 Weaving _ _ – – 8 0.17 Shoe Making _ _ – – 2 0.07 Leather Good Prod. 2 0.07 – – 4 0.15 Stone Crafts – – – – – 0.00 Small Agri Business 68 6.85 33 3.32 113 10.52 Electrical Welding Shop 2 0.10 – – 12 0.50 Gas Welding – – – – – 0.00 Auto Repair Shop – – – – 1 0.03 Motor Winding 1 0.04 – – 1 0.04 Electric Wiring – – – – – – Radio/Television Repair – – – – – – Electric Wiring – – – – 4 0.08 Wood Working 6 0.36 – – 12 0.52 Subtotal (D) 142 11.29 33 3.32 351 21.50
E. Small-Scale Enterprises Garment Making 5 0.12 5 0.12 80 2.04 Paddy Processing – – – – 2 0.05 Sweet Shops 9 0.37 1 0.05 15 0.61 Sugarcane Crushing – – – – 1 0.01 Private Tutoring – – – – 2 0.09 Azarband Making – – – – 7 0.16 Textile Clothing 9 1.07 – – 22 2.00 Grain Processing 2 0.10 – – 114 5.95 Steel Work – – – – 1 0.02 Book Binding – – – – 1 0.02 Subtotal (E) 25 1.65 6 0.17 245 10.93
Total 626 37.25 667 34.05 6,878 282.61 a PRs million. – = Zero. Source: Agency for Barani Area Development. MAJOR PROCUREMENTS UNDER THE PROJECT
Item Unit DOA DOF DLDD DCW ADBP PCU Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual
Field Equipment Tractors No. 93 47 8 4 ______Tractor Implements Set 53 _ 4 ______Front Blade 38 ______Rear Blade 21 ______M.B. Plough 30 ______Chisel Plough 11 ______Bar Harrow 1 ______Disk Harrow 9 ______Cultivator 4 ______Reaper 1 ______Groundnut/grader 1 ______Seed Drill 3 ______Post Hol Digger 1 ______Leveller 9 ______24 Rotavator 2 ______Pully 1 ______Hook 1 ______Jib Crane 1 ______Trolly 1 ______Misc Field Equipment Set 5 14 ___5 _____7 Mobile Water Tank No. 1 2 ______Misc Lab Equipment Set 1 9 ______Agro-Meteorological Equipment Set 5 5 ______Hand Sprayer No. 212 82 ______Power Sprayer No. 4 4 ______Sprinkler/Drip Irrigation Set 4 4 ______Plot Thresher No. 4 3 ______Groundnut Decortioator No. 4 1 ______Soil Auger Set 4 3 ______Balance (Field) No. 4 1 ______Measuring Tapes No. 4 4 ______
Farm Demonstration Equipment Set 6 6 37 37 Appendix 5,page1 Store Tools Set __11______Nursery Tools Set __112______Compaction Roller No. ______10 ______Kitchen Tools Set _ 5 ______Cooking Range No. _ 1 ______Item Unit DOA DOF DLDD DCW ADBP PCU Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual
Gas Heater/Lawn Mover No. _ 21 ______Sound System No. _ 1 ___1 ______Bee Hive & Accessories Set _ 4 ______Public Address System Set ___1 ______
Materials Angle Iron Meter __300 120 ______Fencing Barbed Wire Meter __84 26 ______Artificial lnsemination Set ____296 286 ______Vaccine Btoh ____420 600 ______Veterinary Demonstration Matis Set ____68______Artificial Breeding Set ____31 31 ______Poultry Units 100 ____150 239 ______Extension/Training Materials Set ____18 18 ______Veterinary Kits Kit ____700 770 ______Nutrition Equipment Set ____111______Sewing/Knitting Machines No. _ 22 ______25 Embriodery/Leathers Machines No. _ 6 ______Hatchery Unit No. _____6 ______
Office Equipment Office Furniture Set 7 7 22 22 9 9 ______Office Equipment Set 12 12 __11______Photocopier No. 4 6 7 4 _ 2 ____12 Duplicator No. 4 1 ___1 ____4 _ Fax Machine No. ______1 Olizit Machine No. 1 1 ______Typewriter No. 13 15 10 5 _ 2 ____12 1 Computer w/Printer No. 2 8 ___2 ____26 Air Conditioner No. 2 5 ___1 ______Still Camera No. 1 1 ___1 ______Audio-Visual Equipment Set 2 _ 5412____11 Hostel Equipment/Furniture Set 1 1 ______Appendix 5,page2 Telephone/Intercom No. 1 ______11 Desk Calculator No. 8 1 ______10 8 Overhead Projectors No. _ 7 ______Deep Freezers/Refrigerators No. _ 4 ___15 ______Video Cameras/TVs/VCRs No. _ 7 ___8 ______Generators No. _ 2 ______Item Unit DOA DOF DLDD DCW ADBP PCU Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual
Vehicles Staff Sedan Car No. _ 1 ______21 4wd Lt. Duty No. 16 14 __42__4444 4wd D/Cab Pick Up No. 14 11 8 4 _ 1 ______Light Duty Pick Up No. 12 __ _ _ 4 _____1 Truck No. 2 1 ______4wd Heavy Duty No. _ 12 __ _71__34 Van/Minibus No. 1 3 __31______Cinema Van No. _ 1 ______Coaster No. 1 1 ______1 _ Motorcycle No. 63 28 11 8 _ 20 __2212 Bicycle No. 1 6 __60 1 ____10 _ ADBP = Agriculture Development Bank of Pakistan, DCW = Department of Communication and Works, DLDD = Department of Livestock and Dairy Development, DOA = Department of Agriculture, DOF = Department of Forestry, PCU = Project Coordination Unit, _ = Zero. Source: Agency for Barani Area Development. 26 Appendix 5,page3 27 Appendix 6
APPRAISAL AND ACTUAL COSTS ($ million)
Appraisal EstimateActual Item Foreign Local Total Foreign Local Total
A. Watershed Improvement 1. Soil and Water Conservation a 4.25 6.46 10.72 2.50 5.70 8.20 2. Rangeland and Forestry Development 0.46 3.42 3.88 0.00 3.45 3.45 3. Water Resources Development a 2.27 1.34 3.61 5.50 4.00 9.50
B. Crop and Livestock Development 1. Basic Agricultural Research 0.13 0.46 0.59 0.12 0.48 0.60 2. Adaptive Agricultural Research 0.21 0.98 1.18 0.20 1.11 1.31 3. Agricultural Extension 0.31 2.08 2.39 0.30 2.19 2.49 4. Livestock Husbandry a 0.69 1.87 2.56 1.00 2.15 3.15
C. Rural Infrastructure (Roads and Water) 4.12 3.03 7.15 7.50 5.30 12.80
D. Rural Credit b 0.11 7.54 7.65 0.29 3.90 4.19
E. Institutional Strengthening c 1. Consulting Services 0.89 0.10 0.99 0.50 0.30 0.80 2. Training d 0.08 0.00 0.08 0.20 0.00 0.20 3. Project Coordination 0.12 1.11 1.23 0.29 1.82 2.11
Subtotal (A-E) 13.64 28.39 42.03 18.40 30.40 48.80
F. Contingencies 1 Physical Contingencies e 1.65 2.21 3.86 0.00 0.00 0.00 2 Price Escalation f 2.03 7.82 9.85 0.00 0.00 0.00
G. Service Charge on ADB Loan 0.98 0.00 0.98 0.80 0.00 0.80
H. Interest on IFAD Loan 3.17 0.00 3.17 1.70 0.00 1.70
Total 21.47 38.42 59.89 20.90 30.40 51.30 ADB = Asian Development Bank, IFAD = International Fund for Agricultural Development. a Including farmer's contribution. b Including borrowers contribution. c Including United Nations Development Programme technical assistance grant for consulting services, nongovernment organization support, overseas training and study tours. d In-service training and beneficiary training under components A and B. e On items A to E at variable rates ranging from 5 to 15 per cent. f On items A to F.1 using standard escalation factors. Source: ADB's Loan Financial Information System, Agency for Barani Area Development and Agricultural Development Bank of Pakistan. PROJECT IMPLEMENTATION SCHEDULE
TASK 1990 1991 1992 1993 1994 1995 1996 1997 1998
Civil Works Soil Conservation
Agricultural Engineering
On-Farm Water Management
Farm-to-Market Roads 28
Public Health Engineering (Water Supply Schemes)
Agriculture Credit
Consulting Services
Training Appendix 7
Procurement of Equipment/ Vehicles
Recruitment and Task Implementation. Actual 29 Appendix 8, page 1
COMPLIANCE WITH LOAN COVENANTS
Reference in Loan Covenant Status of Loan Compliance Agreement Schedule 6, a. Beneficiary farmers under Part 1(a) and (c) of the Project Complied with. Part 1, shall be required to provide labor, or otherwise assist, in Para. 7 the undertaking of works, and shall be organized for this purpose as necessary.
b. Beneficiary farmers shall, in consultation with Complied with. Department of Forest (DOF) staff, undertake planting of seedlings provided by DOF under Part 1(b) of the Project. Prior to planting on private lands and before DOF extends assistance, beneficiary farmers must agree on all matters related to grazing rights, animal control, and uncultivable lands to be afforested.
Schedule 6, a. The Project Coordination Unit (PCU), with the assistance Partially Part 2, of the Nongovernment Organizations (NGOs), shall, complied with. Para. 8 under Part 2 of the Project, ensure the participation of DOVs were beneficiaries and selection of villages under Punjab’s selected by the program of demonstration and observation villages Project Steering (DOV). Committee.
b. Under Part 2(c) of the Project, the Borrower and Punjab Partially shall cause to be established at Barani Agricultural complied with. College (BAC) a facility for the training of women The training extension agents in crop production and inputs, animal venue was health and maintenance, and operation of small-scale changed from agricultural enterprises. The establishment of such BAC to Barani facility shall include the provision of hostel, classroom, Agriculture library, laboratory and audiovisual facilities and Training Institute equipment, and development of courses and materials. (BATI). On The Borrower and Punjab shall ensure that recipients of project such training are employed by Department of Agriculture completion, the (DOA) at appropriate levels as agricultural field services of assistants, are adequately supervised by extension female extension agents, are provided appropriate facilities, including workers were transportation, to carry out their work, and are terminated. appropriately remunerated.
Schedule 6, Under Part 3 of the Project, Department of Communication Complied with. Part 3, and Works (DCW) and Department of Public Health and Para. 9 Engineering (DPHE) respectively shall upgrade such roads and construct such water-supply schemes as are selected by the Project Coordination Committee (PCC) and approved by the Project Steering Committee (PSC) in consultation with the Bank. 30 Appendix 8, page 2
Reference in Loan Covenant Status of Loan Compliance Agreement Schedule 6, a. the Borrower shall cause Agriculture Development Bank Generally Part 4, of Pakistan (ADBP), under Part 4 of the Project, to make complied with; Para. 10 available on a timely basis the credit to beneficiaries, credit to female both during Project implementation and after Project beneficiaries completion, to meet short-term, medium-term and long- was only six per term investment requirements for small-scale farming cent of the total and water-resources development and for cottage credit amount industries. The Borrower shall cause ADBP to provide approved under adequate facilities and staff in the Project area to meet the Project. No the credit requirements of beneficiaries, including about female MCO five couple mobile credit officers (MCOs) and about five was posted in individual MCOs. Sohawa subdistrict.
b. The terms and conditions of the credit shall include an Complied with. annual markup of 12 per cent with repayment The markup rate determined on the basis of such factors as type or nature charged by of the equipment and materials financed and period of ADBP was 14 time required for the investment to generate benefits. per cent per annum.
The criteria for eligibility for the credit shall include Complied with. contribution by a sub-borrower in cash of 10 per cent of the cost of the enterprise for which the credit is requested.
Schedule 6, Agency for Barani Area Development (ABAD) shall engage Delayed Para. 11 the NGOs to assist in the formation and operation of village compliance. organization, including women’s organizations, under Part 2 Instead of of the Project. Such activities shall include (a) determining NGOs, services needs of beneficiaries and related village-level plans and of consulting assist in implementing them; (b) identifying beneficiaries for firms were hired the credit; (c) advising beneficiaries on appropriate small- with the scale farming enterprises, marketing and financial concurrence of management; and (d) training, including literacy training. ADB.
Schedule 6, a. Punjab shall initially provide through DOA equipment, Complied with. Para. 14 materials and technical support to beneficiary farmers for the construction of soil-conservation works and field operations on farmers’ fields under Part 1(a) and water- resources development under Part 1(c) of the Project. Such beneficiary farmers shall share the cost of such items to the extent of 10 per cent of the cost of the soil conservation works and 25 per cent of the cost of the field operations and of the water-resources development, either in cash or through provision of labor. To this end, DOA shall prepare an executive plan 31 Appendix 8, page 3
Reference in Loan Covenant Status of Loan Compliance Agreement through Director Soil Conservation for the soil- conservation works and an executive plan through Agricultural Engineering for the water-resources development, providing for the location, physical requirements and cost estimates of such works.
b. Punjab shall initially provide poultry units through Partially Department of Livestock and Dairy Development (DLDD) complied with. to the beneficiary farmers under Part 2(b) of the Project. The share of the Such beneficiary farmers shall share the cost of the cost to poultry units to the extent of 75 percent of the cost of beneficiaries such units. was reduced to 50 per cent.
Schedule 6, a. To assist beneficiaries, Punjab shall ensure that DOA Complied with. Para 15 provides appropriate and timely extension services in the Project area, especially under Parts 1 and 2 of the Project, both during Project implementation and after Project completion.
b. Punjab shall also ensure that DOA recruits on a timely Partial basis a sufficient number of women extension agents compliance. The and field assistants who graduated from the women’s training venue training facility at BAC, referred to in paragraph 8 of the was changed to Loan Agreement, to provide extension services to BATI. On women in the Project area in crop and animal project husbandry, farming systems and management, completion, the development and management of small-scale services of agriculture, vegetable and fruit gardening, and use of women credit. extension workers were terminated.
Schedule 6, Punjab shall make sites available at Barani Agriculture Complied with. Para. 16 Research Institute (BARI) in Chakwal and elsewhere in the Project area for Director Adaptive Research, assisted by BARI, to carry out adaptive research under the Project.
Schedule 6, Local Training: ABAD, through the PCU, shall oversee the Complied with. Para. 17 training of staff of the Project Executing and Implementing Agencies, ABAD and the PCU (hereinafter, all such staff referred to as Project staff), and beneficiaries in watershed management, soil conservation, social forestry, farming systems, livestock development, rainfed agriculture, rural credit, women’s extension and village literacy. 32 Appendix 8, page 4
Reference in Loan Covenant Status of Loan Compliance Agreement Schedule 6, Local Training: ABAD, through the PCU, shall oversee the Complied with. Para. 17 training of staff of the Project Executing and Implementing Agencies, ABAD and the PCU (hereinafter, all such staff referred to as Project staff), and beneficiaries in watershed management, soil conservation, social forestry, farming systems, livestock development, rainfed agriculture, rural credit, women’s extension and village literacy.
Schedule 6, ABAD shall also oversee the provision of overseas training Complied with. Para. 18 and overseas tours by Project staff to visit similar projects in member countries of the Bank.
Schedule 6, Physical Monitoring: Punjab shall cause Director Soil Complied with. Para. 20 Conservation, with the assistance of the consultants referred to in Schedule 5 of the Loan Agreement, to design and implement a physical monitoring plan, acceptable to the Bank and International Fund for Agriculture Development (IFAD), for monitoring the impact of the soil-conservation activities under Part 1 of the Project, including the assessment of soil and water loss before and after watershed improvement in the Project area.
Schedule 6, Project Benefit Monitoring and Evaluation: Except as Complied with. Para. 21 provided in the previous paragraph, ABAD, with the assistance of the consultants referred to in Schedule 5 to this Loan Agreement, shall undertake, or cause to be undertaken, Project benefit monitoring and evaluation (PBME) in accordance with the Bank’s Guidelines for PBME for Agriculture, Irrigation and Rural Development Projects and IFAD’s guidelines referred to in section 6.04 of the IFAD Loan Agreement.
Schedule 6, Operation and maintenance of the Project facilities will be Para. 23 carried out as follows: Part 1 – (i) on-farm soil-conservation works, including Complied with. water-resources facilities, by beneficiaries with appropriate assistance and technical guidance from Director Soil Conservation, Agricultural Engineering and Director On-Farm Water Management, and (ii) facilities related torangeland and forestry on public lands by DOF;
Part 2 – (i) on-farm facilities by beneficiaries and facilities Partial related to extension services, training and research by compliance. DOA and DLDD, as appropriate, and (ii) women’s DLDD is yet to training facility at BAC by BAC in consultation with DOA; undertake remedial construction 33 Appendix 8, page 5
Reference in Loan Covenant Status of Loan Compliance Agreement works at the 8 livestock centers constructed under the Project.
Part 3 – Farm-to-market roads by DCW and facilities Partial related to village water supply by DPHE for two years compliance. after completion of the water-supply facilities and Inadequate O&M thereafter by the district councils of Punjab. for FMR roads, and seven water supply schemes yet to be handed over to district councils.
Punjab shall cause Director Soil Conservation, to prepare a Complied with. simplified manual for operation and maintenance for use by beneficiaries under Part 1 of the Project.
Schedule 6, Incremental Recurrent Costs: The level of counterpart Complied with. Para 24 contributions to be provided by Punjab towards the recurrent Training operating costs of the women’s training facility at BAC under conducted at Part 2(c) of the Project shall be increased so as to meet the BATI instead of following proportions of the total annual operating costs of BAC. following proportions of the total annual operating costs of the training facility: first to third year of Project implementation – zero per cent (0%), fourth to sixth year – 50 per cent, and thereafter – 100 per cent. Punjab shall take appropriate measures to ensure continuous operation of the training facility by complementary funding of incremental recurrent costs during Project implementation and full funding upon Project completion.
Project a. Punjab shall furnish to the Bank all such reports and Complied with. Agreement, information as the Bank shall reasonably request Article II, concerning (i) the Loan and the expenditure of the Section 2.08 proceeds thereof; (ii) the goods and services and other items of expenditure financed out of such proceeds; (iii) the subprojects; (iv) to the extent relevant to the Project, the administration, operations and financial condition of the concerned Implementing Agency; and (v) any other matters relating to the purposes of the Loan.
b. Without limiting the generality of the foregoing, Punjab Complied with. shall furnish to the Bank quarterly reports on the execution of the Project and on the operation and management of the Project facilities. 34 Appendix 8, page 6
Reference in Loan Covenant Status of Project Compliance Agreement c. Without limiting the generality of the foregoing, Punjab Complied with. shall furnish to the Bank quarterly reports on the execution of the Project and on the operation and management of the Project facilities.
Promptly after physical completion of the Project, but in any Complied with. event not later than four (4) months thereafter or such later date as the Bank may agree for this purpose, Punjab shall prepare and furnish to the Bank a report, in such form and in such detail as the Bank shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by Punjab of its obligations under this Project Agreement and the Loan Agreement and the accomplishment of the purposes of the Loan.
Article II, Punjab shall cause their concerned Implementation Partially Section Agencies to (i) maintain separate accounts for the Project complied with. 2.09(a) reflecting the accounts for each subproject financed out of Audited report the proceeds of the Loan; (ii) have such accounts and for 1997/98 related financial statements audited annually, in accordance requires the with sound auditing standards by auditors acceptable to the Executing Bank; and (iii) furnish to the Bank, promptly after their Agency/ preparation but in any event not later than nine (9) months Implementing after the close of the fiscal year to which they relate, certified Agencies to copies of such audited accounts and financial statements respond to the and the report of the auditors relating thereto, all in the queries raised English language. Punjab shall furnish to the Bank such by the Auditor- further information concerning such accounts and financial General’s office. statements and the audit thereof as the Bank shall from time to time reasonably request. 35 Appendix 9 ANNUAL CONTRACTS AWARDS AND DISBURSEMENTS ($ million)
Year Contract Awards Disbursements Year Cumulative Year Cumulative
1990 0.00 0.00 0.00 0.00
1991 0.07 0.07 3.47 3.47
1992 5.20 5.28 3.62 7.10
1993 5.21 10.49 4.02 11.12
1994 1.73 12.23 3.02 14.15
1995 3.63 15.87 4.08 18.24
1996 7.45 23.33 7.83 26.08
1997 7.66 31.00 7.50 33.58
1998 6.19 37.20 3.64 37.23
1999 0.22 37.42 0.00 37.23 Source: ADB's Loan Financial Information System. 36 Appendix 10, page 1 ACTION PLAN
Action/Component Compliance Status and Responsibility A. Soil and Water Conservation and Water Resources Development
The implementing agencies (IA) will prepare/update the inventory of Ongoing: Directorates of Soil assets created under the Project. Staff from these Implementing Conservation, On- Farm Water Agencies will visit each such asset site at least twice a year to Management, and Agriculture examine the status of the asset and provide technical guidance to the Engineering of the provincial beneficiaries, who are responsible for the operation and maintenance Department of Agriculture. of the facilities.
Submission to ADB of a physical monitoring plan for monitoring the Completed: Agency for Barani soil conservation activities under the Project. Area Development (ABAD)
Preparation and distribution to the beneficiaries of a simplified manual Completed: Directorate of Soil for Operation and Maintenance of on-farm soil conservation works Conservation completed under the Project.
B. Rangeland and Forestry Development
Public forests will continue to be maintained and protected from Ongoing: Department of Forests general access. (DOF).
A detailed plan will be developed by DOF or sustainable social Partially Completed. Forestry forestry in the rainfed tract of Punjab and forwarded to ADB and the sector issues in Punjab are Punjab Planning and Development (P&D) Board. being addressed under the World Bank’s ongoing Forestry Sector Development Program [Credit 2747 for SDR 16 million]. For ADB’s project, the social forestry component has been reactivated in the project area with 17 operational plant nurseries.
C. Crop and Livestock Development
A detailed review will be undertaken on the need for women’s Partially Completed: Women’s extension service, in the project area in particular, and the Punjab extension service has been rainfed tract in general. activated covering areas under the International Fund for Agricultural Development financed Barani Village Development Project.
Evaluation of the eight livestock production extension centres by the Pending: Evaluation has been P&D Board staff in order to transfer them to the recurrent budget, and conducted but recommendations appointment of 10 livestock production officers and four vertinary about staffing and transfer to doctors for staffing of these Centers. recurrent budget are awaiting approval of the Punjab Finance Department. 37 Appendix 10, page 2
Action/Component Compliance Status and Responsibility An inquiry to be conducted regarding structural flaws in the Completed. The Department of construction of the eight Livestock Production Extension Centers Communication and Works including suggestions for remedial measures. Outcome to be (DCW) has conducted an inquiry communicated to ADB. and remedial works are to be undertaken by Department of Livestock and Dairy Development (DLDD) on transfer of the component to the recurrent budget
Power connection to be provided to the Sohawa Livestock Center. Pending: DLDD.
D. IV. Rural Infrastructure
Maintenance of the Farm-to-Market Roads (FMRs) for which Ongoing: Allocations for O&M monetary resources would be provided at the rate of PRs32,500 per are significantly below the kilometer (km) (which is the standard current maintenance requirements. DCW is requirement of FMR roads in Punjab) and per annual increases conducting site visits on an on- approved by the provincial Finance Department. Regular site visits going basis. Further dialogue on would be conducted to prevent encroachment of road shoulders. the O&M issue would be conducted under on-going ADB- financed road sector projects in Punjab.
PRs150,000 to be spent to make the water supply scheme located at Pending: Department of Public village Dewal in Fatehjang Subdistrict operational. Health Engineering (DPHE) to undertake remedial works.
DPHE to hand-over water supply schemes still maintained by it to Partially Completed: Of the 17 beneficiaries. schemes, 10 have been handed over to the community organizations. Further dialogue on the issue would be conducted under the ongoing ADB-financed Punjab Rural Water Supply and Sanitation (Sector) Project.
E. Rural Credit
Placement of four female mobile credit officers, one in each of the Complied with. Project subdistricts. 38 Appendix 11, page 1
SOCIOECONOMIC REEVALUATION OF THE PROJECT
A. Socioeconomic Impact Assessment
1. The initial socioeconomic impact of selected project interventions was assessed. Where possible, the perceptions of direct beneficiaries were obtained. The overall assessment was limited to the post-project physical conditions and performance of project facilities and schemes. The assessment, nonetheless, provides reasonable feedback on the perceived project impacts.
1. Mini Ponds, Fatehjang Subdistrict
2. Eight beneficiaries belonging to the same family own the mini pond and the adjoining 10 hectares (ha). Project intervention provided technical guidance and a financial subsidy of 75 percent for the construction of four water outlet structures. The beneficiaries at their own expense constructed four additional structures. Through lift and gravity irrigation, the beneficiary farmers have been able to bring 10 ha under the cultivation of high value crops including vegetables and fruits. Besides irrigation, the beneficiaries are also using the ponds to provide drinking water for their livestock and raise fish. The structures were well-maintained and the expansion of the irrigation network beyond the project interventions suggests that the beneficiary farmers realize the importance of the interventions and are not only maintaining the facilities but also building on these.
2. Mailu Gully Rehabilitation, Shakargarh Subdistrict
3. This scheme, completed in 1994, consists of 10 water outlet structures. Before the Project, the gully passed through the fields and during heavy rains would flood the fields and cause damage to the standing crops. To control the flooding, and to reclaim the land from the gully, water outlet structures were built along the length of the gully. Since its completion, the structures have reclaimed land from the gully, and have controlled flood damage on 12 ha and reduced erosion on another 18 ha. This has helped the farmers to obtain two crops in a year, instead of the previous one crop per year.
3. Qutbal State Forest, Fatehjang, Fatehjang Subdistrict
4. During 1991-1997, some 377 ha were planted under the Project. The plant species included acacia modesta, acacia nilotica, eucalyptus, and wild olive. The survival rate of about 80 percent is above average for similar plantations. The newly planted trees still have not been harvested, but the plantation has successfully checked the rill erosion from developing into gully erosion. The newly planted area has been closed for grazing, but alternative grazing areas have been allowed to the community. Control on grazing has helped the resurgence of grass and shrubs. The community is issued permits to cut the dry grass, which is a fire hazard, up to a specified level.
4. Bhains Qaim Nursery and Social Forest, Sohawa Subdistrict
5. The Project helped establish a private nursery to supply the farmers in the area with eucalyptus saplings. The beneficiary farmer was given technical guidance and access to the project tractor, free of cost, to help him develop the nursery plots. The beneficiary farmer managed the nursery in the last two years of the Project, during which time he supplied over 100,000 saplings from the Department of Forests (DOF) to other farmers in the area. On his own farm, the farmer planted 80,000 saplings in five ha of hillside and on the field boundaries. 39 Appendix 11, page 2
He still has not harvested his eight-year-old trees and expressed concern on the lack of a market for the eucalyptus wood, as there is no wood processing industry in the region. After project completion, the farmer has had to close down his nursery, as farmers, having become used to getting free saplings during the Project, are not willing to pay even a nominal price.
5. Dugwell and Conveyance System, Fatehjang Subdistrict
6. The dugwell and conveyance system is owned by five brothers living in a joint family and commands slightly over two ha. Project intervention comprised financial subsidy covering 70 percent of the cost for the dugwell. The dugwell has helped the family move from a cropping pattern dominated by cereals and rainfed oil seeds to short-gestation, commercially lucrative vegetables. Water from the dugwell is also used as drinking water for humans and livestock, and for domestic use.
6. Farm-to-Market Road, Domali, Sohawa Subdistrict
7. The 4.5 kilometers (km) Domali farm-to-market road was completed in 1998. The road links Domali, a village with 150 to 200 households, with a section of the main national highway called the Grand Trunk Road. The road conformed to the standard farm-to-market road specification for the Project. The community provided the land for the road on a voluntary basis. Traffic volume is low and mainly comprises light vehicles and school buses. The quality of the road was satisfactory. The maintenance of the road has been taken over by the Department of Communication and Works (DCW). Due to the construction of the FMR, the farmers are able to take their produce to the market place, thus realizing a higher price compared to selling their produce locally.
7. Village Water Supply Scheme, Aujwala, Fatehjang Subdistrict
8. The water supply scheme, completed in 1993, was designed to provide water to a population of 1,400 living in 80 households. Due to the community’s lack of access to electricity, the scheme could not become operational till about a year after its completion. The scheme consists of an 80-meter dugwell, a pump station, an overhead storage tank, and a 6-km distribution pipeline network. The pump runs for two hours in the morning during which time the overhead storage tank is filled, and then the water is supplied to the households through gravity flow. At present, the scheme directly supplies water to 50 households while another 30, not connected to the supply network, fetch water from those 50 households. Direct users of the scheme pay a monthly usage charge of PRs50 per household. The staff of the Department of Public Health Engineering (DPHE) estimates that the breakeven level of this scheme, inclusive of the staff salaries of three operators, is PRs130 per household, which is significantly more than the provincial average of PRs75 to PRs80 per household. DPHE staff stated that efforts are being made to transfer the scheme to the community, but with the relatively large subsidy provided by DPHE, it is unlikely that the community would be willing to take over the scheme.
8. Village Water Supply, Thappla, Sohawa Subdistrict
9. This water supply scheme completed in 1996, was designed to provide water to a population of around 1,200 living in 100 households. The scheme consists of a dugwell, pump station an overhead storage tank, a pipeline linking the pump station and the overhead storage tank, and the distribution network. The scheme runs for an hour and a half in a day with half of the beneficiaries getting water from direct pumping while the remainder gets the water from the overhead storage tank. The scheme was handed over to the community in December 1998, and 40 Appendix 11, page 3 since then, it is being fully managed by the community without any outside funding. On a monthly basis, water users contribute PRs30/household. This is less than half the provincial break even rate of PRs75/household and has been made possible by employing the two operators on a part time basis, thus lowering the overhead costs.
9. Village Water Supply, Mian Miar, Chakwal Subdistrict
10. The water supply scheme, completed in 1995, was designed to provide water to a population of about 1,900. The scheme consists of a dugwell, pump station, a pipeline linking the pump station, and the distribution network. The pump runs for two hours a day and provides water to 113 households. The scheme was handed over to the community in December 1997 and has been managed by the community since then. Water users contribute PRs50 per household, which covers the electric bill and the salaries of two part-time operators.
10. Livestock Production Extension and Artificial Insemination Center, Bhloat, Fatehjang Subdistrict
11. The livestock production and artificial insemination center, completed in 1995, was aimed at providing services to 10 villages with an approximate population of 20,000. The center was established in response to the demands of the community, which provided the land for it. The quality of civil works was unsatisfactory. At the end of the Project, the incremental staff was laid off, and since then the center has been partially run by staff borrowed from neighboring centers. With the livestock production extension center having been staffed by veterinary staff, the focus of the activities seemed to have been on animal health and not on livestock production extension. The records of the center indicate a large number of vaccinations carried out in each year of project implementation, but provide very little information on the extension activities. The activities of the artificial insemination center also seem to be limited. With the exception of a small semen container and the insemination gun, most of the equipment meant for the artificial insemination center is being used in Rawalpindi. In a month, the center is provided with enough semen for only 80 to 100 inseminations. While the community’s demand is for the semen of foreign cattle species the semen that is mostly delivered is of the local cattle breed.
11. Livestock Production Extension and Artificial Insemination Center, Shah Gharib, Shakargarh Subdistrict
12. The livestock production and artificial insemination center, completed in 1995, was aimed at providing services to nine union councils. The quality of civil works of this center was unsatisfactory. During project implementation, a husband and wife veterinarian team was posted at the center so that both men and women could be reached. Following project completion, the coverage has been reduced to three union councils. With the livestock production extension center staffed by the veterinarian staff, the focus had been on animal health but some work was also carried out on improving the nutritional balance. The records of the center show a large number of vaccinations in each year of project implementation, but indicate that only in one year were measures taken to introduce improved fodder varieties. These activities comprised establishing demonstration plots of hybrid sorghum and were discontinued afterwards. The staff of the implementing agency explained that the target of the demonstration plots was achieved in a single year and hence the activity was not continued.The focus of extension activities for women was primarily on poultry. The woman veterinarian trained women in poultry management and preventive care. Women in the community were provided poultry flocks at a 50 percent subsidy. Women who had been trained by the veterinarian stated 41 Appendix 11, page 4 that the training was beneficial, but was not comprehensive enough to save flocks that were recently wiped out by disease.
B. Economic Analysis
1. Approach
13. For the economic analysis the same approach has been used as adopted for the appraisal of the Project. The methodology used in the analysis follows ADB’s guidelines on economic analysis.
2. Major Assumptions
14. The following major assumptions have been made:
(i) All costs and benefits are expressed in constant 1999 Pakistan rupees. Actual costs were converted to constant 1999 prices using the consumer price index. (ii) A world price numeraire is used for the analysis. Economic prices for the internationally traded commodities are based on projections as reported in Commodity Markets and the Developing Countries (World Bank 1999). The 1990 constant prices were converted to 1999 prices by using the Manufacturer’s Unit Value (MUV) index. The financial prices of the non-traded commodities, net of transfer payments, were adjusted by employing a standard conversion factor of 0.9. (iii) Keeping in view the overall underemployment in the country and the seasonal unemployment of rural labor, the economic price of labor was calculated using a shadow exchange rate of 0.75. (iv) Seeds are priced at 120 percent of output values to allow for the costs incurred in carrying stocks over previous years. The economic and financial prices of inputs and outputs used in the analysis are given in Table 1. (v) Consistent with the economic analysis carried out at appraisal, the assumed economic life of the Project is 20 years.
3. Project Economic Benefits
15. The main quantifiable benefits from the Project are in the form of increased agricultural, livestock, and forestry production. In the case of forestry, the analysis in the appraisal excluded the benefits resulting from public forests. For the purpose of reevaluation of the benefits, the same assumption has been made. The Project area is roughly 0.6 million ha of which in the pre- Project conditions roughly 75 percent was being cropped. The impact evaluation1 shows that 21.2 percent of the cultivated area benefited from the Project.
16. The findings of the PERI study on crop and livestock yields are summarized in Table 2. Crop yield increases in the project area net of the crop yield increases in the non-project area ranged from 24 percent for wheat to 2 percent for kharif (summer cropping season) fodder. The
1 Evaluation of Second Barani Area Development Project, Punjab Economic Research Institute (PERI), May 1999. Both the baseline and evaluation studies were conducted under the Project. 42 Appendix 11, page 5
increase in milk yield in the project area net of the yield increase in the non-project areas was 8 percent. Table 3 summarizes the changes in cropping intensities and the cropping patterns in both project and the non-project areas. While in the non-project areas the cropping intensity rose by 11 percent, the increase in the project areas was 20 percent. The area under wheat increased in both project and non-project areas while the area under gram increased in the project and decreased in the non-project areas. Table 4 summarizes the production and input use for crop production, and Table 5 summarizes these for the livestock production.
17. For incremental agricultural production, the assessment of the benefits in both with and without the project scenarios is based on the yields, input usage, cropping patterns, cropping intensities, cropped areas, and the project coverage reported by the PERI study.
18. The assessment of the incremental livestock production is based on the detailed livestock models, herd composition, herd sizes, and project coverage reported in the PERI study. It has been assumed that in the years following the Project, the activities of the livestock centers would be shifted to the government’s recurrent budget. But given the department’s continued emphasis on animal health, the production levels are maintained at the levels that prevailed at the time of the PERI study.
19. Benefits from social forestry are based on the information on afforested areas, tree density, survival rates, planting costs, and returns provided to the Project Completion Mission (PCM) by the farmers and the Punjab department of forest (DOF).
4. Project Investment and Recurrent Costs
20. Project costs include the costs financed by ADB, IFAD, UNDP grant, Government of Pakistan, and farmers. However, as was the case for economic analysis carried out at appraisal, the costs relating to the rural credit component have been excluded from the analysis. All relevant project investment and operation and maintenance (O&M) costs are shown in Table 5. The Project costs are in 1999 prices and exclude sunk costs.
21. The local content of the project costs net of transfer payments was adjusted by employing a standard conversion factor of 0.9 to bring these to border price equivalent levels.
5. Economic Worth
22. The Project gives an overall economic internal rate of return (EIRR) of 10.1 percent, which is less than half the rate of return estimated at appraisal. At a 12 percent opportunity cost of capital, the Project generates a net negative present value of PRs148.8 million. The Project’s less than expected performance is mainly the result of the below-par performance of components such as social forestry and livestock development.
6. Sensitivity Analysis
23. The Project’s sensitivity to a reduction in prices of the major outputs and the low spending on O&M costs have been examined and the results are summarized in Table 5.
24. Price reductions in wheat, milk, and fuelwood were examined separately and in a combined case. A ten percent reduction in the prices of wheat reduced the EIRR to 9.6 percent, while reductions of the same magnitude in the prices of milk and fuelwood, respectively, 43 Appendix 11, page 6
reduced the EIRR to 8.2 percent and 9.7 percent. A simultaneous drop in the prices of wheat, milk and fuelwood prices reduced the EIRR to 7.1 percent.
25. To examine the impact of inadequate spending on the O&M of the structures to conserve soil and water, and the structures and equipment to maximize the use of water resources in the area, it was assumed that a reduction of 25 percent in the maintenance would reduce the life of the structures by five years. The resulting EIRR dropped to 6.2 per cent.
7. Assessment of Financial Returns to Selected Enterprises
26. Financial returns to the selected enterprises are presented in Tables 7-9. The models for the crop production on an average farm, and for the average livestock farm, are based on the same assumptions as used at the time of appraisal.
27. For an average farm of 5.9 ha, the increase in income from crop production between the baseline and post project surveys was 8.2 percent on non-project farms and 51.7 percent in the project area. The reported average investment by the beneficiary family was PRs9,771, which is roughly half of the revenue from the crop production in the first year. Returns from livestock development to an average farm increased in non-project areas by 20 percent and on Project areas by 40 percent.
28. PERI’s study shows that a large number of loans for small enterprises were taken to set- up tailoring businesses. In order to look at the financial viability of such an enterprise, a financial model has been constructed and is presented in Table 9. The model is based on the assumption that it is a new enterprise established with a startup investment of PRs40,000. It is further assumed that 90 percent of the investment costs are financed by a loan at a markup of 14 percent, payable in five years, while the rest of the costs are borne by the borrower. The model shows that the enterprise is financially viable and the borrower would be able to pay back the principal and the interest. 44 Appendix 11, page 7
Table A-11.1: Financial and Economic Prices (In PRs) Financial Economic Conversion Unit Prices Prices Factor Outputs Wheat kg 7.00 9.94 1.42 Maize kg 7.00 6.30 0.90 Wheat Straw kg 1.00 0.90 0.90 Gram kg 10.00 9.00 0.90 Groundnuts kg 12.00 10.80 0.90 Kharif Fodder kg 0.75 0.68 0.90 Oilseeds kg 12.00 10.92 0.91 Milk kg 9.50 14.16 1.49 Cull Buffalo/Cattle head 9,000.00 8,100.00 0.90 Male Calf (12 month) head 2,000.00 1,800.00 0.90 Female Calf (12 month) head 4,000.00 3,600.00 0.90 Dung kg 0.20 0.18 0.90 Inputs Seeds Wheat Seed kg 8.40 7.56 0.90 Maize Seed kg 8.40 7.56 0.90 Groundnut Seed kg 15.00 13.50 0.90 Gram Seed kg 20.00 18.00 0.90 Basmati Rice Seed kg 10.80 9.72 0.90 Oilseed Seed kg 16.80 15.12 0.90 Kharif Fodder Seed kg 10.00 9.00 0.90 Fertilisers Urea kg 7.30 8.10 1.11 DAP kg 14.10 14.24 1.01 Machinery Tubewell Irrigation no 400.00 360.00 0.90 Ploughing no 150.00 135.00 0.90 Planking no 150.00 135.00 0.90 Deep Ploughing no 800.00 720.00 0.90 Threshing kg 7.00 6.30 0.90 Livestock Livestock Concentrate kg 9.50 8.55 0.90 Fodder ha 17,000.00 15,300.00 0.90 Wheat Straw kg 1.00 0.90 0.90 Milk for Calf kg 9.50 14.16 1.49 Replacement head 20,000.00 18,000.00 0.90 Labor Labour day 80.00 60.00 0.75 Harvest (Wheat) kg 7.00 6.30 0.90 DAP = Diammonium Phosphate, ha = hectare, kg = kilogram, no = number. Source: Financial prices are based on the reported data while the economic prices are estimated using World Bank and FAO commodity price projections. Table A-11.2: Crop and Livestock Yields
Control With Project Impact Impact Unit Baseline Assessment Change Baseline Assessment Change Wheat kg/ha1,453 1,473 1% 1,315 1,641 25% Maize kg/ha 1,186 1,210 2% 1,186 1,305 10% Gram kg/ha 610 720 18% 720 960 33% Groundnuts kg/ha 603 504 -16% 870 929 7% Kharif Fodder kg/ha 11,505 11,732 2% 11,189 11,663 4% Oilseeds kg/ha 983 983 0% 983 1,032 5% Milk kg/hd/year 1,074 1,142 6% 1,074 1,227 14% ha = hectare, hd = head, kg = kilogram. Source: Based on published and unpublished project monitoring data. 45 Appendix 11,page8 Table A-11.3: Cropping Patterns and Intensities (In units)
Without Projecta With Projecta Unit 12 3 to 20 1 2 3 4 5 10 to 20 Cropping Intensity %54 60 65 55 60 65 66 65 75 Cropping Pattern Existing Technology Wheat ha 28,503 31,738 34,974 27,151 28,749 30,211 28,865 20,466 — Groundnuts ha 7,858 7,472 7,087 7,485 6,769 6,122 5,849 4,147 — Gram ha 770 770 770 734 698 665 636 451 — Maize ha 2,003 2,234 2,465 1,908 2,024 2,129 2,035 1,443 — 46 Kharif Fodder ha 8,166 10,323 12,326 7,778 9,351 10,647 10,173 7,213 — Mustard ha 1,849 1,387 924 1,761 1,256 799 763 541 — Sub-total Existing Technology 49,148 53,925 58,547 46,816 48,846 50,574 48,321 34,261 — New Technology Wheat ha — — — 1,564 3,295 5,057 6,681 14,922 40,983 Groundnuts ha — — — 256 501 712 906 2,189 5,084 Gram ha — — — 7 95 268 432 612 3,698 Maize ha — — — 124 236 324 404 1,015 2,157
Kharif Fodder ha — — — 585 1,168 1,700 2,188 5,161 12,634 Appendix 11,page9 Mustard ha — — — 110 232 358 475 1,054 2,927 Sub-total New Technology — — — 2,646 5,527 8,420 11,087 24,952 67,483 Total Cropped Area 49,148 53,925 58,547 49,463 54,373 58,995 59,408 59,213 67,483 ha = hectare, – = Zero a Years 1 to 8 refer to the years of project implementation and correspond to years 91 to 98. The cost and benefit data for the years 1 to 9 (corresponding to years 91 to 98) is based on actual and for the years thereafter is projected. Source: Estimated using published and unpublished project monitoring data. Table A-11.4: Crop Production and Inputs
Without Project With Projecta Unit 1 2 3 to 20 1 2 3 45678910 to 20
Main Production Wheat kg 41,414,786 46,433,308 51,516,540 41,506,929 46,679,469 52,067,002 52,816,118 51,820,445 52,710,395 58,672,674 60,383,576 63,840,368 67,252,479 Maize kg 2,375,451 2,676,350 2,982,795 2,410,130 2,710,641 2,979,678 2,971,431 2,989,322 2,986,667 2,914,991 2,898,873 2,858,373 2,814,859 Gram kg 469,914 512,283 554,652 452,881 542,906 724,781 861,574 894,370 1,192,061 2,065,370 2,555,467 3,009,082 3,549,773 Groundnuts kg 4,738,115 4,139,707 3,571,959 4,735,900 4,192,764 3,726,993 3,771,461 4,041,561 4,364,029 4,408,059 4,714,410 4,720,946 4,723,324 Kharif Fodder kg 93,946,494 119,939,335 144,603,939 96,032,439 121,854,005 144,359,055 144,520,246 143,292,819 142,707,420 144,961,605 144,641,838 146,059,830 147,347,310 Oilseeds kg 1,817,410 1,363,057 908,705 1,838,967 1,466,115 1,147,079 1,232,810 1,590,321 2,078,911 2,317,636 2,806,082 2,917,873 3,021,005 By Products Wheat Straw kg 62,136,431 69,665,832 77,292,297 62,274,751 70,034,348 78,117,273 79,241,174 77,747,650 79,079,122 88,022,767 90,594,124 95,775,494 100,899,210 Operating Purchased Inputs 47 Wheat Seed kg 2,707,780 2,983,411 3,252,572 2,727,919 3,011,975 3,278,848 3,300,671 3,295,777 3,346,563 3,499,246 3,558,527 3,650,735 3,729,418 Maize Seed kg 128,687 143,535 158,384 130,566 145,162 157,629 156,693 157,875 156,537 149,085 147,097 142,607 138,586 Groundnut Seed kg 236,513 226,787 216,869 232,813 219,672 206,878 203,352 188,181 167,653 158,255 137,928 133,551 129,650 Gram Seed kg 37,747 37,747 37,747 36,314 38,843 45,754 52,313 52,062 66,952 111,237 131,304 156,655 181,186 Oilseed Seed kg 9,244 6,933 4,622 9,354 7,442 5,784 6,188 7,977 10,367 11,392 13,754 14,219 14,637 Kharif Fodder Seed kg 524,647 667,052 801,041 537,328 679,430 801,640 802,442 801,297 802,344 808,852 810,461 814,396 817,908 Urea kg 1,909,698 2,898,095 3,986,869 1,935,049 2,899,580 3,912,860 3,940,167 3,648,251 3,475,054 3,934,254 3,833,544 4,118,231 4,393,614 DAP kg 1,228,862 1,893,520 2,643,533 1,254,659 1,912,741 2,620,157 2,647,672 2,493,846 2,430,439 2,759,795 2,749,755 2,947,418 3,144,106 Tubewell Irrigation no 10,677 12,729 13,811 10,602 12,932 14,345 14,738 14,132 15,632 19,208 18,860 22,031 22,573 Ploughing no 98,297 107,849 117,093 98,925 108,745 117,989 118,815 118,426 120,089 126,031 128,249 131,753 134,965 Planking no 49,148 53,925 58,547 49,463 54,373 58,995 59,408 59,213 60,045 63,015 64,124 65,876 67,483 Deep Ploughing no 7,704 9,244 9,244 7,806 9,697 10,112 10,485 10,953 13,125 15,498 15,927 18,180 18,180 Appendix 11,page10 Threshing kg 4,141,479 4,643,331 5,151,654 4,151,475 4,669,068 5,207,544 5,282,171 5,185,730 5,276,762 5,868,180 6,040,196 6,383,051 6,721,150 Labor Labour day 1,053,531 1,179,098 1,298,810 1,062,990 1,190,865 1,307,098 1,314,498 1,311,786 1,327,223 1,379,682 1,400,130 1,430,940 1,459,351 Harvest (Wheat) kg 4,141,479 4,643,331 5,151,654 4,151,475 4,669,068 5,207,544 5,282,171 5,185,730 5,276,762 5,868,180 6,040,196 6,383,051 6,721,150 kg = kilogram, no = number. a Years 1 to 8 refer to the years of Project implementation and correspond to years 91 to 98. The cost and benefit data for the years 1 to 9 (corresponding to years 91 to 98) is based on actual and for the years thereafter is projected. Source: Estimated using published and unpublished project monitoring data. Table A-11.5: Livestock Production and Inputs
Without Projecta With Project Unit 1 2 3 to 20 1 5 10 12 to 20 Main Production Milk kg 38,058,371 43,530,938 49,265,423 38,215,390 49,139,031 61,987,524 62,384,484 Cull Buffalo/Cattle head 3,544 3,929 4,314 3,558 4,314 5,084 5,084 Male Calf (12 month) head 9,568 10,608 11,648 9,607 11,719 14,210 14,236 Female Calf (12 month) head 9,568 10,608 11,648 9,607 11,719 14,210 14,236 Dung kg 170,093,280 188,581,680 207,070,080 170,795,040 207,061,920 244,046,880 244,046,880 Operating 48 Purchased Inputs Livestock Concentrate kg 7,795,942 9,429,084 11,216,296 7,828,106 10,928,077 14,080,032 14,236,068 Fodder ha 9,922 11,786 13,805 9,963 13,588 17,613 17,795 Wheat Straw kg 38,979,710 43,216,635 47,453,560 39,140,530 47,451,690 55,927,410 55,927,410 Milk for Calf kg 4,429,513 4,910,981 5,392,450 4,447,788 5,392,238 6,355,388 6,355,388 Replacement head 7,087 7,858 8,628 7,116 8,628 10,169 10,169 Repairs and Maintenance PRs 14,174,440 15,715,140 17,255,840 14,232,920 17,968,405 25,161,490 25,421,550 Appendix 11,page11 Veterinary Treatment PRs 3,543,610 3,928,785 4,313,960 3,558,230 4,670,413 7,496,435 7,626,465
Labor day 885,903 982,196 1,078,490 889,558 1,114,110 1,512,290 1,525,293 kg = kilogram, no = number, PRs = Pakistan rupees. a Years 1 to 8 refer to the years of Project implementation and correspond to years 91 to 98. The cost and benefit data for the years 1 to 9 (corresponding to years 91 to 98) is based on actual and for the years thereafter is projected. Source: Estimated using published and unpublished project monitoring data. Table A-11. 6: Assessment of Project's Economic Worth (PRs million)
Base CostsBenefits Cash Flow Sensitivity Analysis Wheat, Milk Existing New New Output Wheat Fuelwood Lack of Proper Existing New Output and Project Project Incremental Output from Output from Price Milk Price Price O&M Leads to Output from from Social Cash Flow Fuelwood Yeara Costs O&M Livestock from Crop Livestock Drops by Drops by 10% Drops by Reduced Life of Crop Dev. Forestry Prices Drop Dev. Dev. Dev. 10% 10% Works by 10% 1 249.46 — - - - - — (249.46) (249.46) (249.46) (249.46) (249.46) (249.46) 2 155.28 3.16 - - - - - (158.44) (158.44) (158.44) (167.22) (167.22) (157.65) 3 217.89 5.43 - - - - - (223.32) (223.32) (223.32) (231.60) (231.60) (221.96) 4 127.79 8.71 - - - - - (136.50) (136.50) (136.50) (144.71) (144.71) (134.33) 5 243.72 10.22 - - - - - (253.94) (253.94) (253.94) (263.84) (263.84) (251.38) 6 405.62 13.61 - - - - - (419.24) (419.24) (419.24) (429.52) (429.52) (415.83) 7 36.68 20.36 - - - - - (57.05) (57.05) (57.05) (74.80) (74.80) (51.96) 8 328.23 20.94 - - - - - (349.17) (349.17) (349.17) (360.95) (360.95) (343.94) 49 9 26.16 - - - - - (26.16) (26.16) (26.16) (28.39) (28.39) (19.62) 10 26.16 - - - - - (26.16) (26.16) (26.16) (28.39) (28.39) (19.62) 11 32.26 - - - - - (32.26) (32.26) (32.26) 130.70 130.70 (24.19) 12 32.26 - - - - - (32.26) (32.26) (32.26) 116.23 116.23 (24.19) 13 32.26 - - - - - (32.26) (32.26) (32.26) 110.35 110.35 (23.04) 14 32.26 - - - - - (32.26) (32.26) (32.26) 137.84 137.84 (20.87) 15 32.26 - - - - - (32.26) (32.26) (32.26) 139.76 139.76 (18.03) 16 32.26 - - - - - (32.26) (32.26) (32.26) 274.90 274.90 (14.88) Appendix 11,page12 17 32.26 - - - - - (32.26) ( 32.26) ( 32.26) 153.07 153.07 ( 8.71) 18 32.26 - - - - — (32.26) (32.26) (32.26) (32.26) (32.26) (2.63) 19 32.26 - - - - — (32.26) (32.26) (32.26) (32.26) (32.26) (0.71) 20 32.26 - - - - — (32.26) (32.26) (32.26) (32.26) (32.26) —
Economic Internal Rate of Return (EIRR) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! Economic Net Present Value (ENPV) -1,194.60 -1,194.60 -1,194.60 -976.88 -976.88 -1,151.01 O&M = Operation and Maintenance, – = Zero. a Years 1 to 8 refer to the years of Project implementation and correspond to years 91 to 98. The cost and benefit data for the years 1 to 9 (corresponding to years 91 to 98) is based on a actual and for the years thereafter is projected. Source: Estimated using published and unpublished project monitoring data. 50 Appendix 11, page 13
Table A–11.7 - Financial Returns from Crop Production on an Average Farm (Farm Size 5.87 ha) (In PRs)
Without Project With Project 120120 A. Main Production 1. Wheat 18,816.3523,405.97 19,698.70 30,555.42 2. Maize 1,079.26 1,355.20 1,411.34 1,278.90 3. Gram 305.00 360.00 72.00 2,304.00 4. Groundnuts 3,690.36 2,782.08 3,654.00 3,678.84 5. Kharif Fodder 4,573.24 7,039.20 6,713.40 7,172.75 6. Oilseeds 1,415.52 707.76 1,769.40 2,352.96 Sub-total Main Production 29,879.73 35,650.21 33,318.84 47,342.87 B. By-Products Wheat Straw 4,033.00 5,016.70 4,222.22 6,548.92 C. Gross Value Of Production 33,912.73 40,666.91 37,541.06 53,891.79 D. Production Cost 1. Purchased Inputs b. Wheat Seed 1,476.30 1,773.32 1,707.72 2,033.30 c. Maize Seed 70.16 86.35 91.75 75.56 d. Groundnut Seed 230.27 211.14 154.35 126.23 e. Gram Seed 49.00 49.00 9.80 235.20 f. Oilseed Seed 10.08 5.04 12.60 15.96 g. Kharif Fodder Seed 340.53 519.92 514.00 530.87 h. Urea 904.84 1,889.02 1,158.00 2,081.74 I. DAP 1,124.62 2,419.28 1,622.21 2,877.39 j. Tubewell Irrigation 277.20 358.56 236.16 586.04 k. Ploughing 957.00 1,140.00 1,086.00 1,314.00 l. Planking 478.50 570.00 543.00 657.00 m. Deep Ploughing 400.00 480.00 512.00 944.00 n. Threshing 1,881.64 2,340.60 1,977.36 3,053.68 Sub-Total Purchased Inputs 8,200.12 11,842.23 9,624.94 14,530.96 2. Hired Labor Labour 5,470.40 6,744.00 6,505.60 7,577.60 Harvest (Wheat) 1,881.64 2,340.60 1,977.36 3,053.68 Sub-Total Hired Labor 7,352.04 9,084.60 8,482.96 10,631.28 Sub-Total Production Cost 15,552.15 20,926.83 18,107.90 25,162.24 E. Investment Costs - - 9,771.00 F. Agricultural Taxes 1,450.48 1,450.48 1,450.48 1,450.48 G. Cash Flow 16,910.10 18,289.60 8,211.68 27,279.07 DAP = Diammonium Phosphate, ha = hectare. Source: Based on published and unpublished project monitoring data and the interviews with benefficaries. 51 Appendix 11, page 14
Table A-11.8 - Financial Returns from Livestock Development on an Average Farm (In PRs)
Without Project With Project 120120 A. Main Production 1. Milk 23,466.90 30,377.20 25,507.50 38,466.45 2. Cull Buffalo/Cattle 2,070.00 2,520.00 2,250.00 2,970.00 3. Male Calf (12 month) 1,242.00 1,512.00 1,350.00 1,848.00 4. Female Calf (12 month) 2,484.00 3,024.00 2,700.00 3,696.00 5. Dung 2,208.00 2,688.00 2,400.00 3,168.00 Sub-total Main Production 31,470.90 40,121.20 34,207.50 50,148.45 B. Production Cost 1. Purchased Inputs a. Livestock Concentrate 4,807.00 6,916.00 5,225.00 8,778.00 b. Fodder 5,152.00 7,168.00 5,600.00 9,240.00 c. Wheat Straw 2,530.00 3,080.00 2,750.00 3,630.00 d. Milk for Calf e. Replacement 9,200.00 11,200.00 10,000.00 13,200.00 f. Repairs and Maintenance 920.00 1,120.00 1,000.00 1,650.00 g. Veterinary Treatment 230.00 280.00 250.00 495.00 Sub-Total Purchased Inputs 22,839.00 29,764.00 24,825.00 36,993.00 2. Hired Labor Labour — — — — Sub-Total Production Cost 22,839.00 29,764.00 24,825.00 36,993.00 Cash Flow Before Financing 8,631.90 10,357.20 9,382.50 13,155.45 — = Zero . Table A–11.9 - Financial Returns to Small Scale Tailoring Business (In PRs)
12345678910 Cash Flow Revenue 39,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000 Loan 36,000 Borrower's Contribution 4,000 52 Total Inflow 79,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000 78,000
Cash Outflow Investment 40,000 Appendix11,page1 Operating Cost 19,500 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 Interest Repayment 5,040 4,032 3,024 2,016 1,008 Prinicipal Repayment 7,200 7,200 7,200 7,200 7,200 Total outflow 71,740 50,232 49,224 48,216 47,208 39,000 39,000 39,000 39,000 39,000
Net Cash Inflow 7,260 27,768 28,776 29,784 30,792 39,000 39,000 39,000 39,000 39,000
Source: Based on published and unpublished project monitoring data and the interviews with benefficaries. 5 Table A–11.10: Economic Prices at 1999 Prices Mustard (Import Parity) (Per ton)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Soybean Oil, Dutch, Crude FOB ex milla US$ 480.00 490.00 500.00 506.25 512.50 518.75 525.00 550.00 575.00 600.00 625.00 650.00 Constant 1990 US Dollars US$ 405.59 401.94 399.41 394.09 389.03 384.22 379.64 387.51 394.99 402.10 408.88 415.34 Adjusted to 1999 Levelsb US$ 480 476 473 466 460 455 449 459 467 476 484 492 Quality Adjustment for Mustard Oil (at 105%) US$ 504 499 496 490 483 477 472 482 491 500 508 516 Freight to Karachi US$ 30 30 30 30 30 30 30 30 30 30 30 30 Insurance US$ 10 10 10 10 10 10 10 10 10 10 10 10 CIF Karachi US$ 544 539 536 530 523 517 512 522 531 540 548 556 CIF Karachi PRs. 27,908 27,675 27,514 27,175 26,852 26,546 26,254 26,755 27,232 27,686 28,118 28,529
Port charges, Storage and Handling (5% of CIF Value at SCF of 0. PRs. 1,256 1,245 1,238 1,223 1,208 1,195 1,181 1,204 1,225 1,246 1,265 1,284 53 Transport to Rawalpindi PRs. 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 2,160 Value at Plant PRs. 31,324 31,080 30,912 30,557 30,221 29,900 29,595 30,119 30,618 31,092 31,543 31,973
Oil Value (at 34% Oil Content) PRs. 10,650 10,567 10,510 10,390 10,275 10,166 10,062 10,241 10,410 10,571 10,725 10,871 By Products (at Local Price Adjusted by SCF 0f 0.9) Meal (at 42.5% Milling Share) PRs. 1,913 1,913 1,913 1,913 1,913 1,913 1,913 1,913 1,913 1,913 1,913 1,913 Hull (at 16% Milling Share) PRs. 120 120 120 120 120 120 120 120 120 120 120 120 Dirt Oil (at 2% Milling Share) PRs. 120 120 120 120 120 120 120 120 120 120 120 120 Appendix 11,page16 Oil Extraction Costs PRs. (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) (1,300) Procurement, Local Transport, Handling and Financial Charge PRs. (585) (585) (585) (585) (585) (585) (585) (585) (585) (585) (585) (585) Farmgate Price, Mustard (economic) PRs. 10,918 10,835 10,778 10,657 10,543 10,434 10,330 10,508 10,677 10,839 10,992 11,138
Farm gate price (financial) PRs. 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Correction Factor 0.91 0.90 0.90 0.89 0.88 0.87 0.86 0.88 0.89 0.90 0.92 0.93 CIF = cost, insurance, freight; FOB = Free on board; SCF = standard conversion factor. a Global commodity markets, World Bank, April 1999. b Adjusted using G5–MUV index. Source: Estimated by using World Bank's commodity price projections. Table A–11.11: Economic Prices at 1999 Prices Wheat (Import Parity) (Per ton)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 US No1 Hard red winter, ordinary protein, Gulfa US$ 128.00 133.00 145.00 149.25 153.50 157.75 162.00 164.06 166.12 168.18 170.24 172.30 Constant 1990 US Dollars US$ 108.16 109.10 115.83 116.18 116.52 116.84 117.15 115.59 114.11 112.71 111.37 110.10 Adjust to 1999 prices /barrel US$ 128.01 129.12 137.08 137.50 137.90 138.28 138.64 136.80 135.05 133.39 131.81 130.30 Freight US$ 22.00 22.00 22.00 22.00 22.00 22.00 22.00 22.00 22.00 22.00 22.00 22.00 Insurance US$ 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 CIF Karachi US$ 155.01 156.12 164.08 164.50 164.90 165.28 165.64 163.80 162.05 160.39 158.81 157.30 CIF Karachi PRs. 7,952 8,009 8,417 8,439 8,459 8,479 8,497 8,403 8,313 8,228 8,147 8,069 54
Port Charges PRs. 300 300 300 300 300 300 300 300 300 300 300 300 Losses (5%) PRs. 398 400 421 422 423 424 425 420 416 411 407 403 Transport to Rawalpindi PRs. 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620 1,620
Less Local Agent's Commission PRs. (205) (207) (215) (216) (216) (216) (217) (215) (213) (211) (209) (208) Appendix 11,page18 Local transport & Handling PRs. (120) (120) (120) (120) (120) (120) (120) (120) (120) (120) (120) (120) Farmgate Price, Wheat (economic) PRs. 9,944 10,003 10,423 10,445 10,466 10,486 10,505 10,408 10,316 10,228 10,145 10,065
Farm gate price (financial) PRs. 7,000 7,000 7,000 #### 7,000 #### 7,000 7,000 7,000 7,000 7,000 7,000 Correction Factor 1.42 1.43 1.49 1.49 1.50 1.50 1.50 1.49 1.47 1.46 1.45 1.44 CIF = cost, insurance, freight; PRs = Pakistan rupees. a Export price delivered at the Gulf port for prompt, or 30 days shipment. Source: Estimated by using World Bank's commodity price projections. Table A–11.12: Economic Prices at 1999 Prices Milk (Import Parity) (Per 1000 Liters)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Whole Milk Powder - CIF Karachi (per tonne) US$ 1800.00 1800.00 ###### 1800.00 1800.00 1800.00 1800.00 1800.00 1800.00 1800.00 1800.00 1800.00 CIF Karachi PRs. 92,340 92,340 92,340 92,340 92,340 92,340 92,340 92,340 92,340 92,340 92,340 92,340
Local transport & Handling Cost PRs. 2,565 2,565 2,565 2,565 2,565 2,565 2,565 2,565 2,565 2,565 2,565 2,565 55 Landed Cost, Factory PRs. 94,905 94,905 94,905 94,905 94,905 94,905 94,905 94,905 94,905 94,905 94,905 94,905 Reconstitution Costs for one liter of Milk 125 kg of WMP per 1000 liters PRs. 11,863 11,863 11,863 11,863 11,863 11,863 11,863 11,863 11,863 11,863 11,863 11,863 Reconstituion Costs PRs. 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 1,710 Economic Price of Reconstituted Milk, Factory Gate PRs. 13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 13,573 Buffalo Milk Adjustment for butterfat (PRs. 140/kg) Add 3% butterfat per liter of milk PRs. 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 3,780 Economic Price of Fresh Buffalo Milk, Factory Gate PRs. 17,353 17,353 17,353 17,353 17,353 17,353 17,353 17,353 17,353 17,353 17,353 17,353 Collection and Chilling Cost PRs. (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) (2,250) Farmgate Economic Price Buffalo Milk (/1000 liters) PRs. 15,103 15,103 15,103 15,103 15,103 15,103 15,103 15,103 15,103 15,103 15,103 15,103 Appendix 11,page18 Farmgate Economic Price Cattle Milk (/1000 liter) PRs. 11,323 11,323 11,323 11,323 11,323 11,323 11,323 11,323 11,323 11,323 11,323 11,323 Average Farmgate Economic Price Milk (/1000 liter) PRs. 14,158 14,158 14,158 14,158 14,158 14,158 14,158 14,158 14,158 14,158 14,158 14,158 (75 percent for Buffalo, 25 percent for Cattle)
Farm gate price (financial) PRs. 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 Correction Factor 1.49 1.49 1.49 1.49 1.49 1.49 1.49 1.49 1.49 1.49 1.49 1.49 CIF = cost, insurance, freight; kg = kilogram; PRs = Pakistan rupees. Source: Food Outlook, Food and Agricultural Organization, April 1999. Table A–11.13: Economic Prices at 1999 Prices Urea (Import Parity) (Per ton)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Urea, Bulk, Spot, FOB NW Europe/a 85.00 95.00 105.00 112.50 120.00 127.50 135.00 140.00 145.00 150.00 155.00 160.00 Constant 1990 US Dollars US$ 71.82 77.93 83.88 87.57 91.09 94.43 97.62 98.64 99.61 100.53 101.40 102.24 Adjust to 1999 prices /barrel US$ 85.00 92.23 99.27 103.64 107.80 111.76 115.53 116.74 117.88 118.97 120.01 121.00 Freight US$ 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 Insurance US$ 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 CIF Karachi US$ 105.00 112.23 119.27 123.64 127.80 131.76 135.53 136.74 137.88 138.97 140.01 141.00 56 CIF Karachi PRs. 5,387 5,757 6,118 6,343 6,556 6,759 6,953 7,015 7,073 7,129 7,182 7,233
Port Charges PRs. 250 250 250 250 250 250 250 250 250 250 250 250 Losses (5%) PRs. 269 288 306 317 328 338 348 351 354 356 359 362 Packing PRs. 350 350 350 350 350 350 350 350 350 350 350 350 Transport to Rawalpindi PRs. 1710 1710 1710 1710 1710 1710 1710 1710 1710 1710 1710 1710 Transport to Farm PRs. 110 110 110 110 110 110 110 110 110 110 110 110 Appendix 11,page20
Farmgate Price, Urea (economic) PRs. 8,076 8,465 8,844 9,080 9,304 9,517 9,721 9,785 9,847 9,906 9,962 10,015
Farm gate price (financial) PRs. 7300 7300 7300 7300 7300 7300 7300 7300 7300 7300 7300 7300 Correction Factor PRs. 1.11 1.16 1.21 1.24 1.27 1.30 1.33 1.34 1.35 1.36 1.36 1.37 CIF = cost, insurance, freight; FOB = Free on board; NW = North West. Source: Estimated using World Bank's commodity price projections. Table A–11.14: Economic Prices at 1999 Prices DAP (Import Parity) (Per ton)
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 DAP, Bulk, Spot, FOB US Gulf/a US$ 200.00 198.00 200.00 201.25 202.50 203.75 205.00 206.00 207.00 208.00 209.00 210.00 Constant 1990 US Dollars US$ 169.00 162.41 159.76 156.66 153.71 150.91 148.24 145.14 142.20 139.40 136.73 134.19 Adjusted to 1999 Levels/barrel US$ 200 192 189 185 182 179 175 172 168 165 162 159 Freight to Karachi US$ 15 15 15 15 15 15 15 15 15 15 15 15 Insurance US$ 5 5 5 5 5 5 5 5 5 5 5 5 CIF Karachi US$ 220 212 209 205 202 199 195 192 188 185 182 179 CIF Karachi PRs. 11,286 10,887 10,726 10,537 10,359 10,188 10,026 9,838 9,659 9,489 9,327 9,173 57
Port charges PRs. 360 360 360 360 360 360 360 360 360 360 360 360 Losses (2%) PRs. 226 218 215 211 207 204 201 197 193 190 187 183 Storage & Handling PRs. 72 72 72 72 72 72 72 72 72 72 72 72 Packing Charges (50 kg Sack) PRs. 360 360 360 360 360 360 360 360 360 360 360 360 Transport to Rawalpindi PRs. 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 Appendix11,page20 Local Transport PRs. 140 140 140 140 140 140 140 140 140 140 140 140 Farmgate Price, DAP (economic) PRs. 14,244 13,836 13,672 13,480 13,297 13,124 12,958 12,766 12,584 12,410 12,245 12,088
Farm gate price (financial) PRs. 14,100 14,100 14,100 14,100 14,100 14,100 14,100 14,100 14,100 14,100 14,100 14,100 Correction Factor 1.01 0.98 0.97 0.96 0.94 0.93 0.92 0.91 0.89 0.88 0.87 0.86
CIF = cost, insurance; freight, DAP = Diammonium Phosphate; FOB = Free on board; kg = kilogram. Source: Estimated using World Bank's commodity price projections.