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World Bank Document ReportNo. 1468a-IND FILECOPY Indonesia Appraisalof IrrigationVill Public Disclosure Authorized May 5, 1977 ProjectsDepartment EastAsia and Pacific RegionalOffice FOR OFFICIALUSE ONLY Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Documentof the WorldBank Thdocumet hasa resbtted dstrioton andmay be ued by recipents 'ny inthe perfrmanceof thei ofial dutt0s.Its contentsmay not otherwvise'b iclsed without Vortd Bankauthorzation. CURRENCY EQUIVALENTS US$1.00 = Rupiahs (Rp) 415 Rp 100 = US$0.241 Rp 1 million = US$2,409.64 WEIGHTS AND MEASURES - METRIC SYSTEM 1 millimeter (mm) = 0.039 inches 1 meter (m) = 39.37 inches 1 kilometer (km) = 0.62 miles 1 square kilometer (sq km) = 0.386 square miles 1 hectare (ha) = 2.47 acres 1 cubic meter (cu m) = 35.31 cubic feet 1 liter (1) = 0.264 gallons (USA) 1 liter/second (1/sec) = 0.035 cubic feet per second 1 kilogram (kg) = 2.2 pounds 1 metric ton (ton) = 2,205 pounds CONVERSION FACTORS FOR RICE 1 ton "dry stalk paddy" = 800 kg paddy ("paddy gabah") = 500 kg milled rice 1 ton paddy (gabah) = 630 kg milled rice INDONESIA FISCAL YEAR April 1 - March 31 FOR OFFICIAL USE ONLY ABBREVIATIONS ARD - Agency for Research and Development AV - Audio-visual BIMAS - Bimbingan Hassal Swa Sembada Bahan Makanan - "Mass Guidance for Self-Sufficiency in Foodstuffs" a farm input-credit package program BRI - Bank Rakyat Indonesia - People's Bank of Indonesia BULOG/DOLOG - Badan Urusan Logistik - "National Logistics Body" rice procurement agency/Depo Logistik - provincial branch of BULOG BUUD - Badan Usaha Unit Desa - Forerunner of KUD as Village Unit Cooperative DGC - Directorate General of Cooperatives DGFC - Directorate General of Food Crops DGWRD - Directcr(ate)-General of Water Resources Development DIP - Project Implementation Budget DP - Irrigation Service Unit ELC-NK - Electro Consult - Nippon Koei GOI - Government of Indonesia HYV - High-Yielding Variety INPRES - Instruksi Presiden - "Presidential Instruction" - a rural public works program IPEDA - Iuran Penbangunan Dearah - Land Tax KUD - Koperasi Unit Desa - Village Unit Cooperative MIHA - Ministry of Home Affairs 140A - Ministry of Agriculture NFCE - National Food Crops Extension Project O&M - Operation and maintenance PPL - Lower Level Extension Worker PPM - Senior Level Extension Worker PPS - Subject Matter Specialist P2AT - Proyek Pengembangan Air Tanah - an executive body within DGWRD responsible for nationwide groundwater investi- gations and development PROSIDA - Proyek Irigasi IDA - Agency of DGWRD created to execute IDA-assisted projects REC - Rural Extension Center SEDEKU - Semarang-Demak-Kudus Irrigation System in Central Java This document has a restrited distribution and may be ued by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. INDONESIA APPRAISAL OF IRRIGATION VIII TABLE OF CONTENTS Page No. SUNMARY AND CONCLUSIONS i-iii 1. INTRODUCTION ......................... 1 2. BACKGROUND ...... 1 The Economy ...................... 1 Agricultural Production . Project Formulation . 3. THE PROJECT AREA . s Climate ... 4 Soils and Topography ................... Population, Farm Size and Land Tenure . 4 Agricultural Production ................. 5 Storage, Processing and Marketing . 6 Agricultural Support Program .............. .... 7 Transportation . 7 Operation and Maintenance ................. .. 7 4. THE PROJECT .......................... 8 Project Works . 9 Technical Assistance . 11 Consulting Services . 12 Water Supply, Demand and Quality . 13 Status of Engineering . 14 Implementation Schedule ................... 15 Cost Estimates ....................... 15 Financing . 16 Procurement ......................... 16 Disbursements . 18 Accounts and Audits ..................... 18 Environmental Effects . 18 Page No. 5 . ORGANIZATION AND MANAGEIENT . 19 Organization . 19 Agricultural Support Services . 20 Monitoring Benefits . 21 Operation and Maintenanc,e . 21 Cost and Rent Recovery ....... ........... 23 6. PRODUCTION MARKET PROSPECTS, PRICES AND FARM INCOME . 25 Production . 25 Market Prospects ..................... 26 Prices . .. .. .. 26 Farm Income . 27 7. BENEFITS, JUSTIFICATION AND RISKS . 28 8. AGREEMENTS REACHED AND RECOMMENDATION . 29 ANNEXES 1. Climatological Data 2. Agricultural Production 3. Agricultural Supporting Services 4. The Project Works 5. Water Supply, Demand and Quality 6. Consulting Services 7. Cost Estimate 8. Schedule of Expenditures 9. Training 10. Operation and Maintenance 11. Commodity and Fertilizer Prices 12. Crop and Farm Budgets 13. Farm Labor Analysis 14. Economic Analysis 15. Cost and Rent Recovery CHARTS 8964 PROSIDA Subproject Organization 16008 PROSIDA Management Organization 16017 Water Resources Organization Chart 16940 Estimated Opportunity Cost for Farm Labor: Ciujung 16941 Estimated Opportunity Cost for Farm Labor: Madiun 16987 Madiun Rehabilitation, Projected Crop Calendar Madiun Groundwater Pilot Project, Water Balance Charts 16988 Balong Scheme - Area A 16989 Balong Scheme - Area B 16990 Tanon Scheme 17144 Caruban Scheme 16991 Mtadiun Groundwater Pilot Project, Implementation Schedule 16997 Madiun Rehabilitation Implementation Schedule 16998 Ciujung Drainage Implementation Schedule 17135 P2AT Organization, Madiun Groundwater Pilot Project MAPS 12631 Location Map 12633 Ciujung Drainage 12634 Madiun Rehabilitation and Groundwater Pilot Project PROSIDA Mapping 12636 Credit 127-IND 12637 Credit 220-IND 12638 Credit 289-IND 12640 Loan 1100-IND 12641 Loan 1268-IND INDONESIA APPRAISAL OF IRRIGATION VIII SUMMARY AND CONCLUSIONS 1. Agriculture accounts for over 40% of Indonesia's GDP, about 66% of its employment and nearly 80% of its non-oil exports. Rice, which accounts for 30% of agricultural production, is the staple food and, throughout the First Five-Year Plan period (1969-74), Government programs concentrated on expanding its production. Despite these programs, rice imports continue at a rate in excess of 1.0 million tons per year, and self-sufficiency in rice has remained a priority goal of the Government's Second Five-Year Plan (1974-79). 2. The Government of Indonesia (GOI) has requested Bank assistance to carry out the proposed project, the eighth Bank-assisted project aimed at increasing domestic rice production. With the exception of one project that is assisting in the extension of an existing system (Credit 514-IND) and another (Loan 1268-IND) that is introducing tertiary systems on part of the areas covered by the first four credits, all the ongoing projects, including one that was completed in March 1976 (Credit 127-IND), have concentrated on restoring major engineering works of existing irrigation systems to their original design capacities in the shortest possible time. Construction works on the six ongoing projects is progressing well, although rising costs due to inflation have created budgetary constraints, resulting in delays in the projects' completion. Operation and maintenance (OS&) services on the com- pleted systems, which have been unsatisfactory in the past because of the insufficiency and untimely availability of O&M funds, have improved following the allocation by the Central Government of substantially higher levels (30% over 1975/76 levels) of O&M funds in its 1976/77 budget. To upgrade O&M services to acceptable standards, however, there is further need for even higher levels of O&M funds, timely release of these funds, and an increase in the number of qualified O&M personnel to effectively utilize the available funds. To this end, GOI has agreed to allocate to the Bank-assisted irriga- tion systems, in FY77/78, O&M funds totaling about Rp 3,350 million, of which about Rp 2,900 million would be for about 783,000 ha of rehabilitated systems and the balance of Rp 450 million for about 330,000 ha to be rehabilitated in the projects' remaining construction period. Although the above O&M funds are only 10% higher than FY76/77 levels, substantial improvements in O&M services are expected due to GOI's agreement to take the necessary steps to ensure that at least half of the budgeted O&M funds would be released to the subprojects by August 15 of each year and the balance, in equal quarterly installments thereafter, until the total budgeted amounts are fully released; and to progressively increase the number of qualified 0&M personnel in the Bank-assisted projects until the additional numbers to be established by GOI in consultation with the Bank are employed. 3. The proposed project would initiate the rehabilitation and improve- ment of the 140,000 ha Madiun irrigation system, the last major system in Java that is in need of rehabilitation. Because of GOI budgetary constraints and the long construction period required to complete rehabilitation of the - ii - entire system, the works under the project would be initially limited to 75,000 ha within the oldest and most severely deteriorated systems, including tertiary development /1 on 30,000 ha of these systems. Planning and design would continue on the remaining 65,000 ha, which would be rehabilitated at a later stage when GOI budgetary capability permits. The proposed project would also assist in: (a) establishment of a 2,800 ha groundwater pilot project at three separate locations in the Madiun-Solo area, which would be used to identify and evaluate technical and management alternatives for conjunctive surface and groundwater development in the area; (b) construction of a drainage and flood control scheme
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