Document of The World Bank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No. 5061

PROJFrT PERFORMANCE AUDIT REPORT Public Disclosure Authorized

YEMEN ARAB REPUBLIC SOUTHERN UPIANDS RURAL DEVELOPMENT PROJECT

(CREDIT 545-YAR) Public Disclosure Authorized

APRIL 26, 1984

Public Disclosure Authorized Operations Evaluation Department

This document has a restricted distribution and my be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. WEIGHTS AND MEASURES (metric systems)

1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles I hectare (ha) = 2.47 acres 1 metric ton (ton) = 2,205 pounds

ABBREVIATIONS

YAR - Yemen Arab Republic ACB - Agricultural Credit Bank ACF - Agricultural Credit Fund ADB - Abu Dhabi Fund CARS - Central Agriculture Research Station CPO - Central Planning Organization CYDA - Confederation of Yemeni Development Associations ECWA - (United Nations) Economic Commission for West Africa ERR - economic rate of return FAO/CP - Food and Agriculture Organization (FAO)-IBRD Cooperative Program GCC - Governorates Coordinating Council GDP - Gross Domestic Product GNP - Gross National Product IBRD - International Bank for Reconstruction and Development ICB - International Competitive Bidding IDA - International Development Association IFAD - International Fund for Agricultural Development LDA - Local Development Association M&E - Monitoring and Evaluation MOH - Ministry of Health OED - Operations Evaluation Department PCO - Project Completion Overview PCR - Project Completion Report SURDPI - First Southern Uplands Rural Development Project SURDPII - Second Uplands Rural Development Project SURDU - Southern Uplands Rural Development Unit TDA - Tihama Development Authority UNDP - United Nations Development Programme VDC - Village Development Committee VWS - Village Water Supply Systems WHO - World Health Organization YAR - Yemen Arab Republic YBAEP - Yemeni-British Agriculture Engineering Project FOR OFFICIAL USE ONLY

PROJECT PERLORMANCE AUDIT REPORT

YEMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL DEVELOPMENT PROJECT (CREDIT 545-YAR)

TABLE OF CONTENTS

Page No.

Preface ...... i Basic Data Sheet ...... ii Highlights ...... iii

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. SUMMARY ...... 1

II. ISSUES ...... 5

A. Institution-Building, Project Staff and Training 5 B. Measurement of Project Benefits ...... 6

IDA OVERVIEW OF THE PROJECT COMPLETION REPORT ...... 9

PROJECT COMPLETION REPORT

I. SumDmary ...... o...... o...... 21 II. Background .... o...... o... .. o...... 23 III. Formulation...... 24 IV. Implementation...... 26 V. Project Impact ...... o...... 42 VI. Institutional Performance and Development ...... o...57 VII. Project Benefits...... 70 VIII. Economic Analysis ...... 89 IX. Constraints and Issues ...... 93 X. Conclusions ...... 97

Annexes

1. Number of Villages in Project Area ...... 98 2. Summary of Farm Survey ...... 99 3. Summary Results of ECWA Study on Land Tenure...... 101 4. List of Contracts ...... 104 5. Village Water Supply Schemes...... 110 6. Development of Health and Education ...... 112 7. Economic Analysis ...... 114 8. Main Results of the Agriculture Census ...... 116

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. TABLE OF CONTENTS (cat'd.)

Page No.

Annexes (Cont'd.)

9. Plant Protection ...... 117 10. Horticulture 118U......

IaRD 17511 (PPA) - 1 -

PROJECT PERFORMANCE AUDIT REPORT

YEMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL DEVELOPMENT PROJECT (CREDIT 545-YAR)

PREFACE

This is a performance audit of the Yemen Arab Republic Southern Uplands Rural Development Project, for which Credit 545-YAR in the amount of US$10.0 million was approved on May 6, 1975 under the special procedure. The Credit was fully disbursed and closed on March 31, 1982, without delay. The final disbursement was made on June 10, 1982. The Project was followed by Southern Uplands Rural Development Project II, which was partially financed by Credit 1067-YAR in the amount oi US$17.0 million, and was approved on September 16, 1980.

This audit consists of a memorandum prepared by the Operations Evaluation Department (OED), a Project Completion Overview (PCO), and a Project Completion Report (PCR). The PCO, of June 30, 1983, was prepared by the Europe, Middle East and North Africa Regional Office and the PCR, dated December 1982, was prepared by Southern Uplands Rural Development Unit (SURDU) of the Ministry of Agriculture and Fisheries. The audit memorandum is based on a review of the Appraisal Report (No. 617-YAR) dated April 4, 1975, the President's Report (P-1497-YAR) of April 17, 1975, and the Development Credit Agreement dated May 13, 1975, together with information obtained from a review of project issues as contained in relevant Bank files and interviews with Bank staff who have been associated with the project.

An OED mission which visited Yemen Arab Republic in July-August 1983 held discussions with Government and project officials and beneficiaries and reviewed project investments and programs. These interviews and observations also contributed to the conclusions of the audit as contained in the audit memorandum.

The audit suggested some technical changes in the PCO and PCR which were accepted and have been included therein. On the basis of the above procedure, the audit concludes that the PCO and PCR together generally provide an adequate accounting of the project's background, implementation and impact. However, the audit elaborates on the problems of institution- building and measurement of project benefits which are important for current or possible future rural development projects to be supported by Bank/IDA financing in the Yemen Arab Republic as well as other countries.

Copies of the draft version of this report were sent to the Borrower and cofinancier on January 4, 1984 for comments; however, none were received.

OED acknowledges the valuable assistance and information provided to the audit mission by Government and project officials and beneficiaries which contributed significantly to the compilation and conclusions of this report. PROJECT PERPDRANCE AUDIT REPORT

EMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL EELDPMENT PROJECT (CREDIT 545-TAR)

BASIC DATA SHERT

KEY PROJECT DATA Appraisal Actual or Actual as Z of Item Estimate Estimated Actual Appraisal Estimate

Total Project Costs (USS million) 23.2 24.1 104 Credit Amount (US$ million) 10.0 10.0 100 Cofinancing (Abu Dhabi Fund) (US$ million) 10.0 10.4 104 Date Board Approval - 05/06/75 - Date Effectiveness 12/31/75 01/27/76 Date Physical Components to be Completed 09/30/81 12/30/61 - Months to Physical Completion 75 78 104 Closing Date 03/31/62 03/31/62 - Economic Rate of Return (M) 19 15 a - Institutional Performance - Satisfactory - Financial Performance Satisfactory - Beneficiaries 21,000 farm families 50,000 farm families

CUMULATIVE DISBURSEMENTS FT76 FT77 FM78 FY79 FY80 161 FT82

Appraisal estimate (US$ million) 0.55 1.95 4.20 6.25 8.05 9.65 10.00 Actual (US$ million) - 0.27 2.45 4.33 6.44 8.80 10.00 Actual as Z of estimate - 14 58 69 60 91 100 Date of Final Disbursement: March 31, 1982

MISSION DATA

Month/ No. of Mandays Performance Specialization Types of Mission Year Persons in Field Rating /b Represented /c Trend Id Problems Is

Identification 05/73 3 36 If - - - Preparation 09/73 5 112 7- - - - Appraisal 04/74 5 150 - a.c,d.e,f - Subtotal 9 298

Supervision 1 10/75 3 18 1 a,c.f 2 u Supervision II 06/76 3 39 3 a,c,f 3 a.f.o Supervision III 10/76 4 52 3 a.c.d.f 2 a.f,o Supervision 1 03/77 3 27 3 c.e,f 1 a.,o Supervision V 06/77 3 21 2 c,e 1 3sf Supervision VI 11/77 2 9 2 c.e 1 3sf Supervision VII 06/78 3 6 2 c.d,f 1 s.f Supervision VIII 12/78 2 10 2 c.d.f 1 a.f Supervision IX 10/79 5 26 2 b,c,d,f 3 X,f Supervision 1 06/80 3 15 2 c.e.f 1 .f Supervision UI 02/81 4 13 2 a,c.d.f 1 f Supervision II 10/81 2 7 2 d,e 1 f Subtotal 37 245

Total 46 543

OTHER PROJECT DATA

Borrower Yemen Arab Republic Executing Agency Ministry of Agriculture/Soutbrn Uplands Rural Development Unit (SURDU) Fiscal Year July 1-June 30, changed to January 1-December 30 on January 1. 1961

Same of Currency (abbreviation) Yemeni Sals (Yrla) Currency Exchange Rates: Appraisal Year Average 1975 US$1.00 - Yrls 4.50 Intervening Years Average 1976-1981 US$1.00 - Trls 4.50 Completion Year Average 1982 USS1.00 - Yrls 4.50

Follow-on Project Name Second Southern Uplands Rural Development Project Credit Number 1067-TAR. Credit Amount (US$ million) 17.0 Date Board Approval November 4, 1980

la See PPAM, para. 18. T 1 - Problem-free or Minor problems; 2 - Moderate problems TF a - Credit Specialist; b - Livestock Specialist; c - Agriculturist; 4 - Engineer; e - Agr. Econ.; f - Other. /d 1 - Improving; 2 - Stationary; 3 - Deteroratig To- a - managerial; f - financial; t - technical; o - other /f The project s identified and prepared with the assistance of two FAD/IBRD (CP) missions; these figures are the Region's estimates. - iii -

PROJECT PERFORMANCE AUDIT REPORT

YEMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL DEVELOPMENT PROJECT (CREDIT 545-YAR)

HIGHLIGHTS

The project's main objectives were to raise agricultural produc- tivity on 50,000 ha of land in the Southern Uplands of the Yemen Arab Republic, which encompassed major parts of the Governorates of Ibb and Taiz, and to improve the condition of rural life of about 21,000 farm families. Major components of the project were: provision of agricultural credit, establishment and training of an extension service which would promote the use of improved inputs for crop production, a program to control bilharzia and to improve livestock production through disease control, improvement of existing small gravity irrigation systems, construction of feeder roads, installation of village water supply systems, and reafforestation in selected areas.

Project costs were expected to total US$23.2 million. Of this total, US$10.0 million was to be financed by Credit 545-YAR, an equal amount by the Abu Dhabi Fund, and the remainder by the Government, the Agricultural Credit Fund, and project beneficiaries. At completion there was a slight cost overrun of 4%, the net result of rising wages and other costs and the scaling down or elimination of some project components, e.g., the construc- tion of feeder roads was dropped from the project, and this activity was taken over by the Local Development Associations.

The project was, in general, implemented successfully and achieved most of its objectives. The reestimated rate of return to the project is 15% compared with 19% estimated at appraisal.

Implementation of the project suffered from staffing problems. Because of higher wages and salaries available to workers and project staff in alternative employment, it was difficult to retain adequately trained per- sonnel. The project suffered, especially in the early years, from ineffec- tive record keeping, accounting, and management. There were some difficul- ties in completing some of the wells due to civil unrest and in procuring vehicles and drilling equipment. Partly because of these problems, there was a 4% time overrun.

The project unit, SURDU, has developed into a reasonably effective organization capable of sustaining development momentum. It is the executing agency for a follow-on project, SURDPII, Credit 1067-YAR. However, SURDU is still facing staff development problems and continues to rely on a large com- plement of expatriate staff to carry out its program. SURDPII incorporates a number of lessons that were learned from SURDPI. These include: adjustments for labor availability, emphasis on production of high unit value crops, and encouragement of an innovative farm population. - iv -

Other points of interest are:

- the training program was not fully directed toward project needs (PPAM, para. 16);

- there was no concerted program to train counterpart staff (PEAM, paras. 14 and 15);

- benefits of complex rural development projects are difficult to measure, especially in an environment that includes other related development projects (PPAM, paras. 18 and 19; PCO, paras. 38 and 39); and

- repayment of subloans by farmers has been relatively good, averag- ing about 76% during the implementation period (PPAM, para. 9; PCO, para. 19).

Lessons to be learned from this project are that staff development (training) programs need to be designed to meet management and technical needs, and trainees must be required to remain with a project for an adequate period of time (PPAM, para. 17) and difficulties can be encountered when pro- jects are managed by expatriates because of local opposition (PCR, Secs. VI. A.1 and IX.1.a). - 1 -

PROJECT PERFORMANCE AUDIT MEMORANDUM

YEMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL DEVELOPMENT PROJECT (CREDIT 545-YAR)

I. SUMMARY 1/

1. One of the main aims of the development strategy of the Government of the Yemen Arab Republic (YAR) is to increase food production to substitute for imported cereals and meat. In pursuance of this goal, the Government has emphasized agricultural development. At the same time, it seeks to improve the standard of living through the provision of potable water supply, reduc- tion of diseases, and increased educational facilities. The Southern Uplands Rural Development Project addressed both of these objectives. The Southern Uplands, within the Governorates of Ibb and Taiz, was chosen as the site for the first such rural development project because it is the most agricul- turally-developed region in the country and has significant development potential.

2. The Southern Uplands Rural Development Project (SURDP) represented YAR's first integrated rural development effort. It sought to raise agricul- tural productivity of approximately 50,000 ha and to improve the conditions of rural life of about 21,000 farm families living in selected areas of Ibb and Taiz in the Southern Uplands. As appraised, the project consisted of the construction of feeder roads, installation of village water supply systems (VWS), construction of bank protection and drop structures in wadis, reaf- forestation, expansion and improvement of existing small gravity irrigation schemes, construction and purchase of project facilities and equipment, provision of agricultural credit, establishment and training of an extension service which would promote the use of improved inputs for crop production, a program to control bilharzia and the improvement of livestock production through disease control. At appraisal, total cost of the project was esti- mated at US$23.2 million which included physical and price contingencies of 7.6% and 39.0%, respectively; indicating a large degree of uncertainty about the final cost of the project. This is understandable since the project was appraised during a period of very high price inflation. Of the total cost, Credit 545-YAR would finance US$10.0 million, the Abu Dhabi Fund (ADF), US$10.0 million, the Government, US$1.1 million (equivalent), the Agricul- tural Credit Fund (ACF), US$0.4 million, and about US$1.7 million would be provided by cash and in-kind contributions of the beneficiaries.

3. The project was implemented by the Southern Uplands Rural Develop- ment Unit (SURDU), a semi-autonomous unit established under the Ministry of Agriculture (Section 3.02(a) of the Development Credit Agreement). Due to an

1/ Adapted from PCO and PCR. - 2 - acute shortage of qualified nationals at the time, SURDU was expected to be staffed with nine senior expatriate experts (including the Project Manager) and ten associate-level expatriate experts, all of whom would have local counterparts. These experts were to be responsible for both project imple- mentation and the training of their counterparts. A coordinating committee was set up to facilitate cooperation among SURDU and various ministries concerned with the project. It was chaired by the Ministry of Agriculture and included senior officials representing the Central Planning Organization and the Ministry of Finance.

4. Start-up of the project was slow because of the difficulties of making a new agency operational and because of staff recruitment problems. Labor migration to neighboring oil-rich sites led to an acute labor shortage, thereby resulting in a considerable increase in wages. This coupled with the high rate of inflation escalated the costs of civil works, drilling and construction materials much faster than anticipated. Consequently, project costs increased substantially above appraisal estimates and this necessitated the scaling-down of the scope of the project components to stay within the limits of available funds. The number of WS schemes was reduced from 90 to 66, and extension centers were reduced from 60 to 28 and the project road funds were reallocated to the VWS schemes. Originally, the project intended to provide 184 km of rural roads in the project area linking isolated villages to the main road network. Since Local Development Associations (LDAs) were carrying out an extensive and low-cost access roads program in the project area (partly financed by the National Development Cooperative Bank), the responsibility and financing for the construction of the rural roads was transferred from SURDU to the LDAs, but remained under technical guidance of SURDU staff. Other major achievements of the project include: (a) the provision of credit (in kind) for annual farm inputs and regular credit for medium- and long-term investments; (b) the construction of minor irrigation and land protection works; (c) the establishment of an agricul- tural extension service and provision of plant protection and veterinary services in the project area; (d) the establishment of a rural development unit together with the -necessary operating facilities; (e) the eventual recruitment of capable expatriate and counterpart technical staff, and the training for the latter; (f) the establishment of a modest bilharzia monitor- ing and control program; and (g) the establishment of a home economics extension unit. Although not included in the original project, this unit provided training for rural women in home health practices, sanitary food preparation, sewing, and literacy.

5. Estimated project costs at completion totaled Yrls 109 million (US$24.1 million equivalent), representing a modest cost overrun of 4%. Of total loan disbursements of US$20.41 million, IDA contributed US$10.0 mil- lion and ADF, US$10.41 million. The higher contribution by ADF resulted from an appreciation of the UAE dirham in relation to the US dollar. The Govern- ment contributed an estimated Yrls 16 million (US$3.7 million equivalent). Cumulative arrears in Government contributions to the project's annual budget, and delays in the quarterly advances by the Government, adversely - 3 - affected project implementation. There are no estimates available of contri- butions by ACF or beneficiaries; hence, total project cost may be underesti- mated. The Project Unit (SURDU) encountered numerous financial accounting problems during the early years of the project.

6. As already noted, the project had difficulties in recruiting the required number of expatriate and local staff; for example, only 6 of the 18 budgeted senior and associate experts (including the project manager) were in post by June 1976 (six months after the project became effective). Counter- part recruiting also lagged badly, partly because civil servants had dif- ficulty securing releases from their Government agencies. These recruitment difficulties led to a major weakness of project management, especially in organizational and financial matters, thereby limiting performance of project activities. Project implementation was further affected by friction and dissension between Yemeni and expatriate management staff. The performance of the first project manager was unsatisfactory because of his inability to organize his team of experts and associates and his lack of understanding of project goals. Efforts to attract qualified Yemenis from abroad and to retain the ones on the staff were further hampered by Government salaries. New salary scales were effected in April 1977 which were 20% to 301 above previous levels, but they were too low to attract qualified Yemenis for counterpart and other positions.

7. Although the Central Agricultural Research Station (CARS) provided training in extension for about 150 prospective agents (210 were expected to be trained), just 115 joined the project and only 76 remained on in 1981. However, some 20 management personnel received short-term training abroad, mainly in Egypt, in modern extension methods.

8. Procurement was to be by local competitive bidding, and Yemenis to have a were seven and one-half percent preference on contracts for civil works, as was IDA's practice at time of appraisal. Despite local advertis- ing, SURDU often was unable to obtain bids for supply of vehicles and drill- ing of deep wells. Because of remittances of Yemenis working outside the country, demand for skilled labor, vehicles and buildings in the country-- particular-ly in the project area--far exceeded the supply. This situation was at the root of SURDU's procurements problems. In order to alleviate some of the procurement problems, the Government permitted foreign contractors to import skilled labor to fulfill their contractural obligations. A revolving fund also was established through modification of the Credit Agreement to facilitate procurement of vehicles as local dealers required payment on deli- very of goods.

9. The project instituted a successful credit program through the Agricultural Credit Fund (ACF - later merged with the Agricultural Credit Bank, ACB). Through ACF (under supervision of SURDU), a total of US$8.4 million equivalent in credit was granted during the project period for purchase of annual farm inputs, and medium- and long-range investments in such things as farm equipment, irrigation, village water supply systems, - 4- orchards, and forests. Of this total, US$3.5 million was supplied jointly by Credit 545-YAR and the Abu Dhabi Fund Credit. The remainder of the funds apparently came from roll-over of short-term credit, the ACB, and the Govern- Zent. Records are not available to separate ACB general activities from project-related activities. The recovery rate of ACE has been good, consid- ering it was making loans to a large number of smallholders. The repayment rate, although declining in recent years, averaged 76% between 1976 and 1981.

10. All covenants, except those related to record-keeping and reports, were fully complied with. Project accounting was weak until a financial expert was hired in July 1981. After that, project accounts, financial statements and audited reports were received regularly by IDA.

11. Because there was no formal provision in the project for monitoring and evaluation, the impact of the project is not precisely known (see PCR, Sec. IX.l.d). General impressions and some results observed on pilot farms and farms of "leader farmers" indicate that the project has had considerable impact on agricultural production in the Southern Uplands and that the popu- lation's health has been improved by provision of pure drinking water and the control of bilharzia and other parasitic diseases. An estimated 50,000 farm families benefited from the project compared with 21,000 anticipated at appraisal; either through higher income, improved nutrition, or the use of pure water. On the basis of some rough estimates of increases in production and cost, the re-estimated rate of return to the project is, excluding health components, 15Z (however, see following Sec. II.B).

12. While the First Southern Uplands Rural Development Project (SURDPI) made an important impact on the development of agriculture and infrastructure in Ibb and Taiz, its program (development of 30,000 ha) remained small in relation to the needs and potential of the cultivated areas of the highlands in Taiz and Ibb Governorates. With the completion of SURDPI, the conditions existed for replicating and expanding the efforts that were started under this project, and a second-phase project (SURDPII) was launched in 1981 (at an estimated total project cost of US$81.6 million) to extend the agricul- tural services to about 86,000 ha, mainly in the high- and medium-intensity cultivated areas in the Southern Highlands.

13. SURDU has developed into a reasonably-effective organization capable of sustaining development momentum. It provided a needed institu- tional framework for public sector investment in agriculture in the Southern Uplands and has served as a model in organization and investment for other agriculture and rural development projects in the country. SURDPI has demon- strated that even under adverse managerial and financial conditions and with shortages of trained national staff, it is possible to execute a relatively complex rural development project intended to provide development services which were previously lacking. Some of the problems of the delayed execution (labor shortages, wage escalation, high rate of inflation and low salaries for local staff) were attributed to country situations and were not project specific. The lessons learned from this project have been incorporated in - 5 - the design of the SURDPII project, as well as other subsequent projects in "AR. In contrast to SURDPI, subsequent projects have been designed for conditions of labor shortage, rapidly expanding markets for high value crops, high rural financial liquidity, and a positive attitude to innovation among farmers with a resultant increased growth in the demand for technical services and input distribution. Organizationally, the complementarity between the project unit and the Local Development Association activities has been taken into account in SURDPII.

II. ISSUES

A. Institution-Building, Project Staffing, and Training

14. Because it was known at appraisal that a shortage of qualified nationals likely would be encountered in filling senior staff positions, the project provided for hiring nine senior expatriate experts and ten associate-level experts (Appraisal Report, para. 5.04). The project also was expected to employ Yemenis as counterparts to the expatriate experts. The Appraisal Report goes on to note (para. 5.05) "After a six year training period that would include on-the-job training and further studies abroad under project fellowships, most of them should be qualified to take over project management. Care wust be taken in choice of trainable counterparts, since this is one of the most critical aspects of the project.- About 20 nationals were expected to be hired for supervisory positions.

15. At the completion of SURDPI, the positions of Project Manager, two Assistant Project Managers, and the Director of Finance were filled by nationals. Eighteen expatriate experts were still employed in the project. Four of these were in top management advisory positions. The Appraisal Report for SURDPII notes that in view of the acute shortage of Yemeni technicians to direct field activities and the need for on-the-job training of newly-hired staff, expatriates would be needed for the first two to three years in field positions, or until counterparts could assume responsibility, i.e., three years in most instances. Thus, the expectation under SURDPI that nationals would be able to take over management and technical positions toward completion of the project has not been realized. To help ensure that present counterparts will attain an adequate level of proficiency for assuming responsibilities for agricultural and rural development in the Southern Region, SURDPII stipulates that formal on-the-job training will be carried out and further provides for 72 man-months of short-term overseas training in extension agronomy.

16. There appear to be two reasons for the lack of management and technical personnel development under SURDPI. First, from the fragmentary evidence available, it appears that the training program carried out was not sufficiently integrated with the personnel development needs of the project. Only several of the counterparts employed by the project received training in - 6 - management-related subjects. Second, and perhaps more importantly, there was considerable staff turnover, largely due to levels of salaries offered in contrast to rapid inflation and other more remunerative employment opportuni- ties. As noted in paragraph 6, salary scales were raised in April 1977, but were too low to attract qualified Yemenis. However, recently, salaries to staff working in externally-funded projects, including SURDPII, have been raised above those of- regular Ministry staff and now appear to be sufficiently attractive to retain staff.

17. Under the project, management development seems to have required a three-pronged approach:

(a) a training program that was consistent with management and technical needs of the project;

(b) all trainees would be required to sign a contract to remain with the project for a minimum number of years; and

(c) a commitment by the Borrower to pay competitive salaries and provide funds to do so.

At appraisal, the follow-on project did not directly address the management development problem in this way. However, under recent developments in its training program, SURDPII now addresses the management development problem identified above. Also, Government has tightened the rules for retaining trainees on their return. While there is no legal basis for assigning them to a specific project, the terms of their contract oblige them to work for five years in Government service. This action is a move in the direction of item (b) above.

B. Measurement of Project Benefits

18. The re-estimated economic rate of return (ERR) to the project has been estimated by SURDU and project staff at 15% (PCR, para. 8.3 and PCO, para. 37). The PCO notes (paras. 38 and 39) some limitations of this ERR estimate which relate to inadequate information on the costs and benefits of the rural roads, village water supply and veterinary services components of the project and concludes, on balance, if these costs and benefits could be taken into account, the rate of return might be higher. The audit has no basis for refuting this judgment. However, in the audit's view, the prices of tradable commodities--maize and sorghum--used to value the incremental output of the project are about 20% too high. Lowering of these prices accordingly reduces the ERR, but by just one percentage point. More impor- tantly, it needs to be noted that the ERR is based on partial information, mostly related to production, obtained from field test plots. Part of the tenuousness of this estimate is due to the fact that there was no project monitoring and evaluation (M&E) carried out under the project. A formal project M&E unit was only set up under SURDPII and first staffed in mid- 1981. Another part is due to the fact that SURDPI is a relatively complex rural development project. Using even the most sophisticated M&E techniques, it would have been difficult to measure the project benefits. Good baseline - 7 - and follow-on data are difficult to obtain from project beneficiaries because of their remoteness and dispersion. Furthermore, the project is interrelated with other activities on-going in the region: the Seed Production Project, the Yemeni-British Agricultural Engineering Project, the activities of the Swiss and Dutch Governments, and most of all, the Central Agricultural Research Station at Taiz. The latter has provided much of the technical package that is promoted by the extension units and has provided training for the extension staff. The Research station was established by FAO and UNDP in 1970 and has received further support from IDA's Credits 805 and 1259-YAR.

19. These measurement problems point up the need to improve monitoring and evaluation of complex rural development projects such as SURDPI in order that their costs and benefits can be more precisely measured. A prerequisite for improved M&E is that the system be set up early in the project cycle. Further, some means need to be developed to separately measure the effects of other development investment activities that are taking place at the same time as the project in question. However, even with the best efforts and procedures, such estimates are likely to remain imprecise due to measurement problems involved. 一 才 一 才必 ／夕〞二 多為 斤 -9-

YEMEN ARAB REPUBLIC SOUTHERN UPLANDS RURAL DEVELOPMENT PROJECT (CR. 545-YAR)

IDA OVERVIEW OF THE PROJECT CDMPLETION REPORT

1. Under the First-Five Year Plan (1976/77-1980/81), the resources allocated to agriculture amounted to YRls. 2.6 billion (US $587 million) or 14% of the total investment outlays envisaged in the plan. The general goals and strategy of the FFYP were to increase agricultural output by concentrating development efforts in areas of greatest agricultural potential. This resulted in a concentration of projects in the Tihama and Southern Uplands region, which accounts for about one-third of the area of Yemen and one-half of the cropped area.

2. Following IDA economic mission to YAR in September 1972, SURDP was identified and prepared with the assistance of two FAO/I M Cooperative Program missions in May and September 1973. It was then appraised in March/April 1974 by IDA. Negotiations were held in Washington from February 18-21, 1975. As some of the conditions for credit effectiveness were not met in time, the terminal date was postponed to December 31, 1975. The project actually became effective on January 27, 1976.

3. The project was implemented by the Southern Uplands Rural Development Unit (SURDU), a semi-autonomous unit established under the Ministry of Agriculture (Section 3.02 (a) of the Development Credit Agreement). Due to an acute shortage of qualified nationals at the time, SURDU was staffed with several senior expatriate experts (including the Project Manager) and associate-level expatriate experts, all of whom had local counterparts. These experts were responsible both for project implementation and the training of their counterparts.

4. This project constitutes YAR's first integrated rural development effort which sought to raise agricultural productivity over approximately 50,000 ha and improve the conditions of rural life of about 21,000 farms living in selected areas of the Southern Uplands in Ibb and Taiz Governorates. It was also envisaged to construct 180 km of feeder roads, 90 village supply schemes (WS), irrigation improvement for 600 ha , 60 extension centers, two veterinary centers, three block centers, six extension oifices and one sub-headquarters at Ibb. The total cost of the project was estimated at US$ 23.2 million, partially financed by IDA (US$ 10 million) and Abu Dhabi Fund (US$ 10 million).

Prepared by the EMENA Projects Department. -10-

Issues During Project Implementation

5. Staff and Organization: The project has been unable to recruit the required number of expatriate and local staff. For instance, only 6 out of 18 budgeted senior and associate experts (including the project manager) had assumed their posts by June 10, 1976 (six months after the project became effective). The rest were civil servants who had difficulty securing releases from their governments. Counterpart recruiting also lagged badly. This has led to a major weakness of project management, particularly in organizational and financial matters thereby limiting the performance of project activities.

6. Efforts to attract educated Yemenis from abroad and retain the ones already on board were hampered by government salary regulations. There was dissatisfaction expressed repeatedly by SURDU counterparts regarding their salaries. IDA emphasized (letter of April 14, 1983) the importance of improving working conditions (salaries, allowances, benefits) for experts, associate experts and counterparts in order to retain and attract the most qualified individuals for the project. Project management submitted to the MDA suggestions for alleviating these problems. Upon revision of senior and associate experts salaries, the MOA approved increases in cost of living and other allowances. A new salary scale for government employees was effected from April 1, 1977. The new salary scales, which were 20-30% above previous salaries, were insufficient to attract qualified Yemeni counterparts.

7. Project implementation was affected by friction and dissension between the Yemenis and the expatriate management staff. The dissension was not only from frustration with salaries, working conditions and limited training and management opportunities, but also due to lack of clear delegation of authority and definition of responsibilities.

8. Furthermore, performance of the project manager was unsatisfactory, mainly because of his inability to organize his team of experts and associates coupled with his lack of comprehension regarding project goals. In view of this, IDA recommended the removal of the project manager. It also decided to send supervision missions to SURDU quarterly until major defects in implementation were remedied. The project manager resigned in May 1978 and the senior civil engineer was appointed by the MA as project manager.

9. Almost all the expatriate staff were Arabic-speaking. Their ability to communicate with extension agents and farmers had a positive impact on project implementation. Although this limited the scope of recruitment areas, it was crucial in enabling the project to achieve its objectives.

10. Training: Following nine months of training by the UNDP/FAD-assisted Central Agricultural Research Station (CARS) in Taiz, the first group of trainees (24) graduated and arrangements were made for their employment by the MOA as extension agents in the project area. Availability of trainees was much lower than anticipated at appraisal (in 1977, 22 instead of 60); the drop -11-

out rate reached 40% mainly due to the recruitment of individuals from cities who could not cope with village living conditions. This problem was partly alleviated by recruiting primary school graduates from villages in the project area.

11. The Central Agricultural Research Station (CARS) was instrumental in providing training to the extension agents of the project unit through its one-year training program. It also supplied project with technical backstopping and developed research recommendations in the project area. Cooperation between SURDU and the CARS was very helpful in ensuring successful implementation. Still, a much stronger relationship needs to be developed between research and extension, and steps have been taken in the new agricultural research project (Credit 1259 YAR) to strengthen this relationship through feedback between farmers and research workers.

12. Since 1978, 46 Yemenis have been sent abroad for training for periods from 1 month up to 2 years in engineering, extension, credit, finance and administration. They have included 26 to Egypt, 12 to Sudan, 4 to the U.S.A., 2 to the U.K. and 1 each to Italy and Canada. Extension agents, accountants, draftsmen and audio-visual technicians have been trained at the Egyptian Center for Agriculture (EICA) in Cairo. Upon completion of their training, they have returned to SURDU to participate in project implementation. Some have actually assumed responsible positions in the project.

13. Extension Activities: Agricultural extension has been most satisfactory mainly due to simple and practical packages which emphasized demonstration, timely availability of farm inputs at fair prices and responsive farmers. The number of extension agents and supervisors were less than anticipated at appraisal. This project has demonstrated the technical potential for raising yields of staple crops without major investment in hydraulic works. At the start, lack of transport vehicles, poor supervision of extension agents, lack of adequate housing and agents' dissatisfaction with salaries reduced the effectiveness of extension services.

14. While SURDP I has concentrated its activities mainly in the area defined by the appraisal report, during implementation it has responded to local pressures and opportunities to extend the agricultural services and to a lesser extent, its rural infrastructural works program to some communities lying beyond the original boundaries. The project area for SURDP II would include and extend the area served by SURDP I to include the whole of the Governorates of Taiz and Ibb.

15. In spite of the shortage of extension agents, project achievements in agriculture have reached appraisal estimates and exceeded them for agricultural inputs and credits. Extension agents worked with pilot farmers and contact farmers and provided them with information on cropping, seeds, fertilizers and credit. The same information reached other farmers in the villages with the assistance of the WDAs. -12-

16. The use of inputs appears to have had dramatic effects on yields in the high-rainfall area. According to a 1978 monitoring survey, wheat and sorghum yields of "pilot farmers" supervised by extension agents were about 100% and 50% greater, respectively, than those of control groups in the same area.

17. In 1977, an infestation with army worm was epidemic in the project area, and extension staff, with the assistance of LDAs and the German-Yemeni Plant Protection Project, responded in a timely fashion in curbing the infestation. Moreover, the project has been able to mount a large-scale campaign to combat Rinderpeat outbreaks (300,000 head of cattle have been vaccinated). This experience was instrumental in strengthening farmers' confidence in the extension and veterinary staff.

18. Credit Activities: The failure in the first year to establish the Agricultural Credit Fund (ACF) operations in the project area delayed the credit component by an entire crop season. After a slow start up, ACF begun to distribute farm inputs in the project area through village merchants. The ACF, which merged with the Agricultural Credit Bank (ACB) .1 in 1980, has become a major source of inputs for farmers in the project area. Their merger did not pose any major problem since they applied unified lending terms. It also served as a channel for ACB lending to finance farm investments (machinery, poultry and feed) for which demand had not been contemplated at appraisal. SURDU's technical appraisal and approval was required for medium- and long-term loans. The number and amount of loans, and sales of inputs (mainly fertilizer and seeds) have exceeded appraisal estimates. Refer (Table 5.9 of Main Report). This has been possible because of (a) excellent coordination and mutual support between ACF and extension agents, and (b) increased demand for credit by farmers, due to effective extension advice.

19. In 1978, the Government decided to decrease the interest rates from 9% to 7% for short-term loans and from 8% to 6% for medium-term loans. In view of the prevailing inflation rate in YAR, the justification for reducing, the interest rate was questioned by IDA. The effect of reduced interest rates on ACB activities was not apparent in subsequent years. Repayments of loans by borrowers was high, only 2Z delinquency on short-term and 1Z on medium-term loans with no loans overdue more than three months. After the merger of ACF with ACB, delays in repayments of short-term loans became more frequent and the high repayment rate experienced under ACF deteriorated and delinquencies became greater.

20. The sale of inputs, for cash and credit, through village merchants attests to the effectiveness of the credit and extension programs. The supply of inputs may be more important than the simple provision of credit. (Some 65% of fertilizer and 90% of vegetable seed sales were paid for in cash).

1/ Since then, ACB has merged with the National Cooperatives Development Bank to form the Cooperatives and Agricultural Credit Bank (CACB). -13-

has stimulated demand for at least an equal amount of inputs and supplies in the private sector. The availability of inputs and supplies in the private sector at relatively accessible locations, at prices which have clearly beeninfluenced by prices set at ACF outlets, is an unexpected indirect benefit of the project. IDA has discouraged ACB from continuing physically the handling of inputs distribution.

21. Irrigation, Drainage and Land Protection; Sixty percent of medium-term loans (about YR1s 20 million) granted by ACF from project funds were for irrigation (e.g., well cleaning and deepening, engines and pumps, etc.) and land reclamation. While it is difficult to determine the exact area which benefited from these improvements, it is likely to have exceeded the project target of 400 ha. On land protection, the appraisal aims were to provide afforestation to 350 ha and to build some wadi control works to protect cultivated lands from erosion along the wadi banks. The works were of a piecemeal type and, if any, would scatter widely and would be rather costly since each would protect few hectares of land. The situation became even worse when farmers refused to cooperate with varying degrees of social reasons. Consequently, it was proposed that the Forestry Department use the funds allocated for afforestation (about YRl 1.1 million -- appraisal estimate) to finance its nursery and plantation program. The funds allocated for land protection (about YRls 0.5 million -- original appraisal estimate) was spent on works designed to protect government lands of coffee nursery and research stations from wadi floodings.

22. Civil Works; Of the.28 extension centers contemplated, 26 have been completed and are now fully utilized with work on 2 centers delayed due to security problems. Veterinary offices and 6 extension offices have been completed on time and are in operation. Due to lack of living quarters, extension offices which are in isolated places have not proved a success and this type of office has been discontinued under SURDP II.

23. Originally it was envisaged that the office building for the project headquarters would be constructed in Ibb and a sub-office in Taiz. Because of disputes between SURDU and the contractor, work on the construction of the project unit's proposed headquarters at Ibb ceased in 1978. As it became apparent that rented housing facilities in Ibb were either inadequate or unavailable for office and living accommodation for the expatriate and local staff, the project headquarters was moved to Taiz which provided better facilities and infrastructure (hospital, schools). The Ibb building was later completed by Government prior to effectiveness of SURDP II.

24. Rural Works: Mainly through the efforts of LDAs and with some assistance from SURDP, very substantial improvements in rural infrastructure have been made in the project area. The main problems facing this component relate to high cost overruns and the difficulty of ensuring that LDAs complete their share of the work when completed. On several occasions, specifications were prepared and calls for tenders were issued but without response frnm -14- contractors. This prompted MOA (i.e., SURDU) to sign a contract with the Ministry of Public Works (MN) in which they agreed that the latter will undertake implementing the rural roads component (67 km) and rehabilitation of village wells. The MOA advanced YR1 400,000 to the MPW for mobilization to start well rehabilitation. However, the MPW failed to accomplish any progress and the MOA decided to cancel contracts with the MPW and revert the funds already disbursed to MPW to .SURDU's account so that it could utilize them for drilling new wells and rehabilitating old ones.

25. a. Roads: None of the 184 km of feeder roads included in the project were constructed by SURDP, mainly because of the inability of the Highway Authority to meet its contractual obligations to carry out the works. Many villages in the project area had no connection to the main roads. The LDAs, using mainly resources contributed by the beneficiary communities, constructed approximately 3,000 km of access roads in and outraide the project area.

26. These roads have provided access for inputs and extension activities and outlets for marketable surplus from the inaccessible productive portions of the project area. Most of the roads seen are in the form of earth tracks 2-3 meters wide made by graders. Only basic earthwork has been carried out and the lack of adequate drainage is a common source of road deterioration and once they are constructed, the roads receive little maintenance. Since the LDAs did not have technical expertise available to do engineering job properly, it was decided under SURDP II to have a qualified road engineer to provide technical assistance to the LDAs for rural roads construction.

27. b. Water Supplies: IDA funds originally allocated to road construction have been transferred to water supplies. Although the project unit completed construction of 65 village water supply schemes, 12 have not been completed because the LDAs have not provided the necessary pumps. Consequently, SURDU decided that no additional water supply schemes would be started in those areas under SURDP II until pumps have been installed. The arrangement on a "half-completed" basis whereby the project unit will only drill the wells and another agency which is outside the project control (in this case LDAs) will do the rest of the work (i.e., procurement of pumps and diesels, installation of pipe system to supply well water to villagers) was not a successful workable arrangement. The completed schemes are being operated and maintained by the Village Development Boards under the supervision of local mechanics. This arrangement has produced satisfactory results.

28. About 40% of the project area has low rainfall and a drought every third year, on the average. Safe drinking water is a scarce commodity in rural YAR, especially in the upland regions where people have to travel long distances to get their drinking water from open wells and springs. As a result, very high priority has been attached by villagers, LDAs, and the Government to increase the number of villages served with safe and adequate sources of water. The VWS component was instrumentalin providing clean drinking water to many villagers in the project area. -15-

Government Performance

29. Project implementation was adversely affected by the cumulative arrears in Government contributions to the projects' annual budget for local expenditures. Considerable delays in payment of the quarterly advances were encountered which further aggravated the financial situation as costs of contemplated works and services increased over time.

30. The 39% contingency for local costs, estimated at appraisal, was exceeded by the rate of domestic inflation within one year after effectiveness. For example, during 1975-1980 domestic construction costs rose four to six times and salaries of project staff three to five times. Consequently, most of the increase in local costs have required a larger contribution from both the Government and beneficiaries, while reducing the purchasing power of the local cost commitment of IDA and the Abu Dhabi Fund.

31. The effects of inflation on the project were compounded further by delays in securing co-financing and recruiting both expatriates and counterpart staff. Government had taken some steps toward salary adjustment which eased the recruitment of the project staff to some extent. Although there were delays in appointing project management and technicians which slowed and often interrupted project implementation, full government commitment was a decisive factor for the ultimately timely completion of the project.

Procurement

32. Under this project, procurement of goods and services was done by Local Competitive Bidding (LCB). The demand for goods and services in YAR in general and project area in particular was drastically in excess of supply. This demand was created by the ready availability of cash from remittances of Yemeni migrant workers. The most dramatic increase was in expenditures for motor vehicles and buildings. Despite public advertising, SURDU was unable to obtain any bid for supply of vehicles and drilling of deep wells. In order to alleviate some of the problems the Government permitted foreign contractors to import labor to fulfill their contractual obligations.

33. The absence of a revolving fund or imprest account hindered procurement of locally purchased vehicles as dealers require payment upon delivery of goods. In view of this, the local procedure stipulated in the Credit Agreement was adjusted to better suit the prevailing circumstances in YAR. The ceiling for procurement of equipment through negotiated purchases was raised from US$20,000 to $100,000. An imprest account was also established with the MOA. Abu Dhabi Fund contributed US$100,000 to supplement the US$100,000 contributed by the MOA. These adjustments helped overcome some of the problems.

34. Accounts and Reports: At the end of December 1981 (three months before closing date), 100% of funds allocated by IDA (US10.0 million) was fully disbursed. At completion, the total cost of the project reached -16-

US$24.1 million (4% higher than appraisal estimates of US$23.2 million). Because of the late recruitment of the financial expert and the project accounts section was very weak and incapable of handling the projects' accounts. At times, the projects accounts have not been audited for two years. With the recruitment of a financial expert (he transferred from the Tihama Project in July 1981), SURDU succeeded in bringing the accounts up to date. The projects' accounts and the financial statements and auditors' reports have been regularly received by IDA.

35. Quarterly reports prepared by the project management did not differentiate between SURDP I and SURDP II but rather considered the second as an extension of the first. For some time, this practice has led to some confusion particularly for purposes of monitoring and evaluation and the preparation of a completion report for SURDP I. The above matter was brought to the attention of the management of SURDU which was advised that for accounting purposes project costs must be carefully separated. Accordingly, the progress reports that followed and the completion report made a clear distinction between the two phases.

36. Timely reimbursement of project funds was a major problem in maintaining project obligations for financing components. This was mainly due to delay in processing withdrawal applications by the Central Bank of Yemen coupled with time lags by IDA and hence Abu Dhabi Fund in paying their share. This issue was raised with responsible officials at the time and rectified.

Rates of Return

37. Labor shortages and increased purchasing powers in rural areas have led to escalation in wages and crop prices. Cost overruns and delays in project implementation were balanced by higher cropping intensities and higher yields achieved under the project. This coupled with higher farm gate prices for agricultural outputs resulted in an estimated ERR of 15%, (Appraisal estimate was 19%).

38. At appraisal the cost of constructing and upgrading 180 km of support roads was included. The LDA's constructed approximately 3000 kms of tracks in and outside the project area, with limited technical and financial resources relying mainly on voluntary labor from the beneficiary communities. In principle the cost of the roads should be charged against the project. However, since we do not know the length and cost of the road that lies in the project area, the cost of the road has not been charged against the project. However, if we decide to make a rought estimate of the length and its cost, then considering these roads were constructed mainly through force account, the economic cost which is primarily the cost of operating a grader remains very small and should not affect the ERR significantly.

39. It should also be noted that farmers have benefitted from the livestock (primarily veterinary services) and water supply components of the project. However, while the costs incurred under these components have been charged against the project, the benefits attributable to these components have not been included mainly again because of the difficulty in quantifying such benefits. The re-estimated ERR of 15% should be commented upon in view of some of the limitations in quantifying benefits and costs. In fact, benefit is clearly more under-estimated than cost and the ERR of 15% may be a little under-estimated. -17-

Conclusion

39. The major achievements of the project include: (a) the provision of short- and medium-term credit to farmers for farm inputs and investments, respectively; (b) the construction of 66 Village Water Supply Schemes; (c) minor irrigation and land protection works; (d) the establishment of agricultural extension, plant protection and veterinary services in the project area, including (e) the establishment of a rural development unit with the necessary operating facilities, the recruitment of capable expatriate and counterpart technical staff, and the training for the latter; and (f) the establishment of a modest bilharzia monitoring and control program. In general terms, the project may be considered successful. Start-up, however, was slow because of the difficulties of making a new agency operational and because of staff recruitment problems. Moreover, the effects of inflation on project costs has prevented the project from achieving all of its original goals as envisaged at appraisal.

40. Labor migration to neighboring oil-rich sites led to an acute labor shortage, thereby resulting in a considerable increase in wages. This coupled with the high rate of inflation escalated the costs of civil works, drilling and construction materials much faster than anticipated. Consequently, project cost estimates as originally appraised increased substantially and this necessitated the scaling down of the scope of the project components to meet available funds. The number of VWS schemes was reduced from 90 to 66, and extension centers were reduced from 60 to 28 and the project road funds have been reallocated to the VWS schemes instead. Originally, the project intended to provide 184 km of rural roads in the project area linking isolated villages to the main road network. Since LDAs were carrying out an extensive and low cost access roads program in the project area, the responsibility and financing for the construction of the rural roads was transferred from SURDU to the LDAs, but under technical guidance of SURDU staff.

41. While SURDP I made an important impact on the development of agriculture and infrastructure in Ibb and Taiz, its program (development of 30,000 ha) remained small in relation to the needs and potential of the cultivated areas of the highlands in Taiz and Ibb Governorates. With the completion of SURDP I the necessary conditions existed for replicating and expanding the efforts that started under SURDP I, and a second-phase project (SURDP II) was launched in 1981 (at a total project cost of US081.6 million) to extend the agricultural services to about 86,000 ha mainly in the high- and medium-intensity cultivated areas in the Highlands.

42. SURDU has developed into a reasonably effective organization capable of sustaining the development momentum. It provided the needed institutional framework for public sector investment in agriculture in the Southern Uplands and has served as a model in organization and investment in other agriculture and rural development projects in the country. SURDP I has demonstrated that even under adverse managerial and financial conditions and with shortages of trained national staff, it is possible to execute in only a few years a -I8-

relatively simple rural development project intended to provide services which previously were totally lacking. Some of the problems of delayed execution (labor shortages, wage escalation, high rate of inflation and low salaries for local staff) were attributed to country situations and were not project specific. The lessons learned from this project have been incorporated in the design of the SURDP II project as well as other subsequent projects in TAR. In contrast to SURDP I, subsequent projects have been designed for conditions of labor shortage, rapidly expanding markets for high value crops, high rural financial liquidity and a positive attitude to innovation among farmers with a resultant greater growth in the demand for technical services and input distribution. Organizationally, the complementarity between project unit and LDA activities has been taken into account.

43. In sum, despite its many problems which necessitated the scaling-down of the scope of project components, generally the project had achieved its major objectives. Sound design of the project, and continued support by the Government and farmers' receptivity to extension advice were the main factors for project success. The project has been successful in meeting Government strategy objectives by tailoring services and launching development in the most productive agricultural area in YAR where environmental conditions and farmers' receptively was optimal. The project also fulfilled IDA's objectives of contributing to the agricultural development in YAR through institution building and filling the financial resource gap. -19-

MINISTRY OF AGRICULTURE AND FISHERIES

YEMEN ARAB REPUBLIC

SOUTHERN UPLANDS RURAL DEVEIPMENT PROJECT - PHASE I

COMPLETION REPORT

EVALUATION AND MONITORING SECTION SOUTHERN UPLANDS RURAL DEVELOPMENT UNIT TAIZ, YEMEN ARAB REPUBLIC

December 1982 2k -21-

I. SUMMARY

One of the main aims of the development strategy of the government of the Yemen Arab Republic is to increase food production to substitute for imported cereals and meat. In pursuance of this goal, the government has emphasized agricultural development. At the same time, improvement of the standard of living through the provision of potable water supply, reduction of disease and increased educational facilities has been a goal of the government.

The Southern Uplands Rural Development Project contains both of these elements. It emphasizes agricultural development, and at the same time improves living conditions through the provision of village water supply, control of bilharzia and the education of women through home economics classes.

The Southern Uplands, within the governorates of Ibb and Taiz, was chosen as the site for the first such rural development project because it is the most agricultural region. Following a request by the Government to the World Bank, a mission from IDA visited the project area in September 1972 and identified the Southern Uplands Rural Development Project (SURDP). The government of YAR accerted the findings and requested IDA to help finance the project in selected ai_t.es of the Southern Uplands within the Ibb and Taiz Governorates. Following the completion of studies and surveys carried out in the Highlands and Midlands under the auspices of FAO/UNDP technical assistance, a preparation mission report was issued by FAD/IBRD Cooperative Program on 11 December 1973. Thereafter, an IDA mission appraised the project in April 1974 and their report was issued in April 1975. Upon the concurrence of the Government with the appraisal report, loan negotiations between the Government and IDA resulted in a credit agreement for USt1O million, which was signed on May 13, 1975.

The Government of YAR also approached the Abu Dhabi Fund for Arab Economic Development and requested a loan to cover the remaining funds needed for the project. The Abu Dhabi Fund agreed to extend the necessary loan and a credit agreement for UAE dirhams 40 million (About US$ 10 million) was signed on October 29, 1975.

The project, subsequently identified as Phase I, consisted of the construction of 180 km of feeder roads, installation of 90 village water supply systems, construction of bank protection and drop structures in wadis, reafforestation of 350 hectares, expansion and improvement of existing small gravity irrigation schemes, construction and purchase of project facilities and equipment, provisior of agricultural credit, establishment and training of an extension service and the promotion of the use of improved inputs for crop production, control of bilharzia and the improvement of livestock. -22-

The project area initially selected for improvement was about 50,000 ha, but during implementation an area of at least 30,000 ha were served directly and 70,000 indirectly. The project provided extension service on crops to 1,115 villages, with a population of 700,000. The work on livestock production and protection and on bilharzia control also far exceeded the area envisaged at appraisal, and covered nearly the whole of the two Governorates. In the provision of village water supply systems, the target had to be reduced from 90 to 66 due to cost escalation, and 65 systems had been installed by the end of the project period. The number of beneficiaries from the 66 projects was expected to be 73,000, but when the projects were completed the number of beneficiaries was actually 166,000.

The feeder road component had to be dropped altogether because of very high cost escalation and the inability of the Highway Authority to execute the roads entrusted to it in time. Most of the allocation for feeder roads was transferred to the village water supply component, with the agreement of the Local Development Associations, who had undertaken to construct the necessary feeder roads. Due to necessary change and cost escalation in other items, a complete revision of project cost allocations was requested in December 1978 and approved in December 1979.

Through a system of credits managed by the Agriculture Credit Fund, and later by the Agriculture Credit Bank, one hundred irrigation wells were expected to be drilled. The achievement was far in excess, with an estimated 457 production wells having been put into operation.

The project costs have totaled YR 109 million (equivalent US$ 24 million), with a government contribution of YR 16 million (equivalent US$ 3 million). Of the total loan disbursement of US$ 20.43 million, IDA contribution was exactly US$ 10.0 million and Abu Dhabi Fund contribution was US$ 10.43 million. The higher contribution by ADF resulted from an appreciation of the UAE dirham in relation to the US dollar.

The production goals of the project were to increase yields and production of crops in an area of 50,000 ha. During implementation, the project was able to fully assist 30,000 ha and partially assist another 70,000 ha. All the production targets were exceeded. The highest gains were recorded in vegetable and fruit production. At appraisal no targets were set for wheat and barley. The project, however, assisted in increasing the production of these two cereals also.

Due to the impressive achievements of the crop extension service, the net value of crops in the project area (30,000 ha) rose from YR 129 million before the project (1975) to YR 208 million at the end of the project period (1981).

The internal rate of return for the project (Phase I), using 1981 economic prices over a 20-year life of the project is calculated to be 23 percent. -23-

The results achieved to date are only a portion of the results projected for full development. It must therefore be stressed that research, extension services and input supply have to be maintained at a sufficient level for the projected full development results to be achieved.

II. BACKGROUND

1. Location and Importance

The Southern Uplands Rural Development Project is situated in the Southern Uplands region of the Yemen Arab Republic, and comprises of the two governorates of Thiz and Ibb. The total cultivable area of the region is estimated at 559,000 ha, which is equivalent to 36 percent of the whole country's cultivable land. This region has a population of over 2 million.

The project (SURDU I) was designed to cover 50,000 ha of cultivable land, comprising 29,000 farms with a farm population of 170,000, living mainly in 500 villages. During implementation, the project actually covered 30,000 ha. directly and 70,000 ha indirectly of cultivable land in an area covering 1,115 villages (Annex 1) with a farm population of 190,000.

The area actually covered by the project is the major agricultural region of the country. It is estimated that the project area (actual) produces 29% of the sorghum and millet, 73% of the maize, 21% of the wheat, 15% of the barley, 45% of the vegetables, 93% of the potatoes, 68% of the legumes and 33% of the fruits of the total production of YAR.

2. Physical Characteristics

The project area comprises mountainous terrain with valleys and wadis of varying sizes. The three wide valleys of Ibb, Gibbla and Sahul have fertile loose soils. A large number of smaller valleys and re-entrants have less fertile colluvial soils. The nine main wadis have relatively fertile soils. The project area can be divided into two parts along the line of the Sayyani Pass, which separates Taiz and Ibb Governorates. The southern part, in Taiz, has 400-600 mm rainfall per annum with the probability of drought once every three years. The northern part, in Ibb governorate, has relatively higher rainfall, 800-1,000 mm p.a., with a lower frequency of drought. In the valleys, temperatures vary from an average maximum of 370C in summer to an average minimum of 100 C in winter, and therefore cultivation can be carried on throughout the year, provided water is available.

Cultivation is, however, almost entirely rainfed, with only 6,500 ha irrigated from periodic wadi floods (spate irrigation), or permanent springs, dug wells and tubewells. Efficiency of irrigation from springs and wells is low because conveyance losses are high and overirrigation is widely practiced. -24-

3. Socioeconomic Characteristics

At the time the project was formulated, the project area had a very low level of agricultural technology and infrastructure, such as agricultural feeder roads and rural electrification and complementary agro-industrial facilities. This has changed to a great extent during the six years of the project, mainly because of the flow of remittances of workers who emigrated to the oil producing countries. Very considerable progress has been made in rural feeder roads and electrification of villages.

The flow of funds has completely changed the liquidity situation of the land-owning farmers, and this has had an impact on credit demand. However, the land tenure arrangements were, and remain, not too favorable to the full development of the whole project area. Tenant farmers have to pay the entire cost of inputs but this is not deductible from the share to be paid to the landowners. As a result, tenant farmers are reluctant to use modern inputs. This problem affects the better agricultural area, since 30% of the farmers in Ibb Governorate are tenants, as against 15% in Taiz Governorate.

The Government's present development strategy centers on the development of (a) increased food production for substitution of import of cereals and meat, and (b) increased production of the main export commodities -- cotton and coffee. This project is one of the most important measures taken by the government in pursuance of the first goal of reducing imports of cereals and meat.

III. FORMULATION

1. Origin

In the Yemen Arab Republic, where over 80% of the population is essentially in farming communities living in the countryside, it is clear that any economic development policy must be aimed at getting them more involved in the overall process of development, and this can only be achieved through policies that directly and indirectly affect their socioeconomic environment. Rural development with emphasis on the agricultural sector is one such, if not the only, way to achieve this.

The development strategy of the Government of Yemen was therefore geared toward this end, and Southern Uplands region was selected for a pilot rural development project because it has considerable agricultural development potential and is the most populous area of the country.

Following a request by the Government to the World Bank, a mission from IDA visited YAR in September 1972, and identified the Southern Uplands Rural Development Project. The Government of YAR accepted the findings and -25-

requested IDA to help finance the project in selected areas of the Southern Uplands within Taiz and Ibb Governorates.

2. Preparation, Appraisal, Negotiation and Approval

Following the completion of studies and surveys carried out in the Highlands and Midlands under the auspices of FAO/UNDP technical assistance, a preparation report was issued by FAO/IBRD Cooperative Program on December 11, 1973. Thereafter, a mission composed of representatives of IDA and two consultants appraised the project in April 1974. Their appraisal report was issued on April 4, 1975.

Upon the concurrence of the Government of YAR with the contents of the appraisal report, loan negotiations between the Government and IDA commenced and were held in Washington, D.C. Agreement on the credit of US9 10 million, which constitutes part of the financial resources earmarked for the implementation of the project, was concluded and signed on May 13, 1975 in Washington, D.C.

The Government also approached Abu Dhabi Fund for Arab Economic Development and requested a loan to cover the remaining funds needed for the project. The Abu Dhabi Fund agreed to extend the necessary loan to the Government and the loan agreement for UAE dirham 40 million was signed on October 29, 1975.

3. Project Description

The Southern Uplands Rural Development Project was described in the Appraisal Report as an integrated rural development project involving agricultural extension services, credit facilities to farmers, infrastructure improvements and bilharzia control.

The project consisted of the following parts;

Part A: Rural Works

(i) Construction and upgrading of 180 km of feeder roads;

(ii) Installation of 90 village water supply systems;

(iii) Expansion and improvement of existing small gravity irrigation schemes;

(iv) Reafforestation of about 350 hectares;

(v) Installation of gabion protection of about 20 km of wadi banks- and

(vi) Construction of drop structures of gabions on about 25 km across the wadis. -26-

Part B% Project Facilities and Equipment

(i) Construction of offices;

(ii) Buffer storage facilities for SURDU in Ibb and Taiz;

(iii) Staff housing; and

(iv) Purchase of vehicles, office and field staff equipment and equipment for surveying and for a veterinary team.

Part C: Agricultural Credit

A program of short-term loans to small farmers for the purchase of fertilizer and other farm inputs, and of medium- and long-term loans to farmers for building of production wells, nurseries, orchards and packaging and handling facilities for vegetables and fruits. Part D: Establishment and training of an extension service force and local counterpart staff, and a program of overseas fellowships. Part E: Promotion of application of seed dressings and other plant protection techniques through a project extension service, and multiplication and distribution of high yielding seeds developed by the CARS.

Part F: Purchase and utilization of molluscicides and equipment for the control of bilharzia.

Part G: Studies and preparation of a second phase project in Wadi Bana, El-Gened, Eryan and suitable adjacent areas.

The project was expected to be completed by September 30, 1981.

IV. IMPLEMENTATION

1. Effectiveness and Start-Up

The conditions for the effectiveness of IDA Credit included the conclusion of an agreement between the Government and Abu Dhabi Fund for a loan equivalent to ten million dollars ($10,000,000) to assist in financing part of the project, the establishment of the Southern Uplands Rural Development Unit (SURDU) within the Ministry of Agriculture and the appointment of a Project Manager.

Abu-Dhabi Fund agreed to finance part of the project and the loan agreement was concluded and signed on October 29, 1975. Hence both IDA and Abu Dhabi Fund loans became effective in January 1976. -27-

During the start-up, difficulties were encountered in recruiting expatriate experts with appropriate qualifications and experience to fill the key posts at the right time. The main reason was the lengthy administrative procedures that prevailed in most of the countries of the candidates in order to obtain approval for their release from their Ministries/Organizations. On the other hand, recruitment of a sufficient number of Yemeni counterparts was not achieved due to the limited number of qualified Yemenis available who were offered higher salaries and fringe benefits by various organizations and agencies.

2. Revisions

The physical targets and their financial allocation prescribed in the Credit Agreement had to be revised because of rapid cost escalation due to an unanticipated double-digit inflation rate during the first few years of the project. The cost of feeder road construction rose more than four times between 1975 and 1978, and moreover the Local Development Associations clearly indicated that they were able to construct access roads with SURDP assistance but had a greater need for technical assistance and funding from the project for water supplies. Since the Highway Authority of the Ministry of Public Works was unable to execute any of the proposed feeder roads by early 1978, the contract with them was cancelled, and a request was made to IDA for reallocation of the funds.

Consequently, the first major revision was made in May 1978, when the allocation for feeder roads was transferred to the Village Water Supply component. Towards the end of 1978, SURDU management examined the status of completed disbursements and of its commitments under the project, and proposed reallocation of funds between categories. A proposal for revision was submitted to financing agencies in December 1979. The appraisal estimate, the proposal for revision and the approved revision are shown in Table 4 .1. Actual disbursements, as against revised allocations, can be seen in Table 4.6.

3.(a) Physical Progress

In Table 4.2, the physical progress achieved by the project is compared to the targets set during appraisal and after revision. There have been varying degrees of success in the multifarious activities in which the project was engaged.

In agricultural extension the area covered was twice the area envisaged at appraisal. There was pressure from the local development associations, village leaders and individual farmers to extend advice and inputs into an ever increasing area. It was not possible to restrict extension work just to a 10 km wide belt along the Turba-Taiz-Ibb road. Though recruitment and training of extension staff fell well below the targets, the project provided extension service to 1,115 villages (Annex 1), which covers a total cultivable area of some 100,000 ha. Since 61.5% of the -28-

Table 4.1

PROJECT COST ALLOCATIONS (USD.000)

APPRAISAL REVISION APPROVED ITEM ESTIMATES PROPOSALS REVISION (Apr. 75) (Dec. 78) (Dec. 79)

Category I Rural Works

A. Village Water Supply 1,780 8,930 5,828 B. Feeder Road 2,800 - 156 C. Irrigation and Land Protection 860 860 860 Subtotal 5,440 9,790 6,844

Category II Project Facilities & Equipment

A. Staff Housing and Offices 820 4,450 1,961 B. Vehicles and Equipment 960 1,020 960 C. Operation and Maintenance 660 1,335 878 Subtotal 2,440 6,805 3,799

Category III Technical Services

A. Technical Assistance 3,050 1,495 1,816 B. National Staff 1,900 1,510 3,093 Subtotal 4,950 3,005 4,909

Category IV Miscellaneous Costs

A. Fellowships 120 120 375 B. Other Studies 150 150 150 C. Rural Health 80 80 80 Subtotal 350 350 605

Category V Agricultural Credit

Inputs and Credit 2,610 2,875 4,182

Category VI Contingencies 7,410 375 2,861

TOTAL 23,200 23,200 23,200 -29-

Table 4.2

PHYSICAL PROGRESS OF SURDP DURING 1976-1981

ACHIEVEMENT ACTIVITIES APPRAISAL REVISED ACHIEVED PERCENTAGE (3/2)

I. Agricultural Extension

A. Extension Training No. of trainees 252 252 150 60

B. Extension Service No. of agents 176 176 86 49 No. of supervisors 19 19 14 74

C. Total Farms/Ha Covered No. of Farms 14,000 14,000 12,000 85.7 Hectares 35,000 35,000 30,000 85.7

II. Rural Works

A. Construction of Feeder Roads 180 nil nil -

B. i) Construction of village water supply systems 90 66 65 98 ii) Number of beneficiaries 100,000 73,000 166,000 227

C. Drilling of Production Wells 100 100 457 457

D. Additional Irrigated Area Through Canal Lining (ha) 600 600 65 11

E. i) Afforestation 350 350 373 107 ii) Wadi bank protection (km) 20 20 3 15 iii) Drop structures (km) 25 25 1 4

F. i) Extension centers 60 26 26 100 ii) Block centers 3 3 3 100

G. i) Extension room offices 6 6 6 100 ii) Suboffice IBB 1 1 1 100

H. Veterinary Centers 2 2 2 100

I. Meteo-Stations 8 8 4 50 -30-

farmers utilized fertilizers as a result of this extension work it is estimated that project work benefited about 100,000 ha in these villages (30,000 ha directly and 70,000 ha indirectly).

The target set for the village water supply systems was almost entirely achieved, as far as the project components are concerned. In 15 systems, however, the villages could not raise funds for the pump and engine. Therefore, by the completion date of the project (31.3.81) only 50 systems were fully functioning.

The drilling of production wells for irrigation made dramatic progress. ACF/ACB made loans to the tune of 19.14 million YR for irrigation, from which approximately 457 wells were made productive. This has increased irrigated area by an estimated 3,600 ha, of which 1,000 ha are in the Yarim plain. Another 900 ha were brought under irrigation from gravity irrigation schemes and wells financed without ACF/ACB loan. Total irrigated area has therefore increased from 2,000 ha at appraisal to 6,500 ha at the end of SURDP I. The achievement of a 300% increase in irrigated area is very largely due to project activities.

A total of 483,850 seedlings were distributed for afforestation and land protection purposes. Assuming 75% of seedlings survived, this would mean 280 ha of afforestation. However, this could not be verified due to lack of statistical data.

The low achievement of wadi bank protection and construction of drop structures was due to two factors. The major factor was cost escalation going up three or four fold, and with no increase in allocation, physical implementation had to be reduced proportionately. The other factor was the failure in some cases in getting the agreement of all the farmers affected.

Targets were fully met with regard to the construction of extension and block centers, extension room offices, veterinary centers, and the sizeable project suboffice in Ibb. As for the meteorological stations, it was cost escalation again that inhibited full achievement of the target.

3.(b) Progress of Studies and Other Components

As may be seen from Table 4.3, a total of 57 man-months were spent on groundwater study instead of 13 man-months budgeted in the revision. The Land Tenure Study was not taken up because ECWA was requested by the Government to make a study of land tenure of the whole country. It was considered premature to take up the marketing/agroindustries study before the project had made a substantial impact. Moteover, the private sector had proven capable of handling the initial problems in marketing. The Seed Potato Multiplication Project was not required because the Netherlands- financed Seed Potato Project at Dhamar was able to meet all the demand. The project Monitoring and Evaluation Expert visited the project twice in 1981. The Animal Production and Health Department conducted a survey and study of -31-

Table 4.3

PROGRESS OF STUDIES AND OTHER PROJECT COMPONENTS

ACHIEVEMENT ACTIVITIES APPRAISAL REVISED ACHIEVED PERCENTAGE (3/2)

Ground Water Study (man-months) 13 13 57 438

Land Tenure/Ag-Census (man-months) 15 15 -

Marketing/Agro-Industries (man-months) 15 15

Seed Potato Multiplication (man-months) 8 8 -

Project Monitoring 7 7 2 28

Livestock Study (man-months) 36 36 23 64

Rural Health (US$ 000) 80 80 42.5 5.3

Extension of Project Concept (man-months) 24 24 24 100

Fellowships; (number) 20 20 44 220 (uS$ 000) 120 375 281 75 -32-

livestock with their own staff over a period of three years. A total of 23 man-months out of the projected 36 man-months was thereby fulfilled.

The Rural Health component is almost exclusively concerned with the control of bilharzia. Work began on this component only in 1980 and by the end of 1981 a survey was made on the location of bilharzia foci, the types of infection and the incidence of the disease. Actual expenditure on this essential baseline survey is not available since the salaries and travel expenses of the staff engaged in this work were accounted under different heads. However, since the baseline survey was successfully carried out, the target for this component can be taken to have been achieved.

No time was spent directly by SURDU staff an "extension of project concept" since FAO and World Bank staff visited the project to identify and appraise phase II of the project. The SURDU project staff did, however, spend at least 24 man-months of their time with the visiting missions and thereby contributed to this component.

As regards fellowships, 44 persons were sent for overseas training and thereby twice the target was achieved. Expenditure on this component is underestimated because in many cases the travel expenditure was recorded under a different head of account.

4. Procurement

Planned and actual procurement of machinery, equipment and vehicles is shown in Table 4.4. A further breakdown for vehicles and motor cycles is given in Table 4.5. It may be seen that actual expenditure exceeded the cost estimated at appraisal by five percent. Given the continuous escalation of machinery and equipment prices during this period, it is obvious that procurement was made at terms very favorable to the project.

There was no procurement for civil works, except very small amounts for the maintenance of the project office in Taiz. All civil works were contracted out through competitive tendering to private contractors who did their own procurement. A list of all contracts with the name of the contractor and the amounts involved is given in Annex 4. -33-

Table 4.4

PLANNED AND ACTUAL PROCUREMENT OF MACHINERY AND EQUIPMENT 1976-1981 (includes vehicles and motorcycles)

APPRAISAL ESTIMATED ACTUAL COS'.. ACTUAL AS PERCENTAGE YEAR COST (USt ,000) OF PLANNED (Ust ,000) (Z)

1976 274 88 32 1977 47 227 464 1978 158 274 173 1979 254 233 92 1980 83 43 51 1981 149 125 84

TOTAL COST 965 1,013 105

Table 4.5

VEHICLES AND MOTORCYCLES PURCHASED 1976-1981

TYPE NUMBER COST (,000 YR)

Vehicles

Volvo (car) 2 88 Mazda (car) 2 65 Toyota (car) 5 162 Toyota (single) 5 112 Toyota (lorry) 1 51 Toyota (pickup) 15 565 Toyota (hard top) 3 102 Toyota (caravan top) 12 598 Toyota (saloon) 8 344 Toyota (mini bus) 1 55 Landrover (mobile clinic) 1 166

Subtotal 55 2,308

Motorcycles 49 350

TOTAL COST 2,658

(Equivalent (US$ 582,088) Table 4.6

PROJECT COST AND FINANCING FOR 1976-1981

ACTUAL APPRAISAL REVISED EXPENDI- ACHIEVEMENT CATEGORY ITEMS ESTIMATES ESTIMATES TURES PERCENTAGE (3)/(2) x 100 Rural Works Village water supply 1,780 5,828 5,157.35 88.5 Feeder roads 2,800 156 - - Irrigation, land protection 860 860 1,070.94 124.5 Subtotal 5,440 6,844 6,228.29 91.0

Project Facilities Staff housing, offices 820 1,961 2,592.51 132.5 6 Equipment Vehicles and equipment 960 960 1,022.33 106.5 Operation and maintenance 660 878 2,043.83 232.7 Subtotal 2,440 2,799 5,657.97 148.9 Technical Services Technical assistance 3,050 1,816 2,201.07 121.2 National staff 1,900 3,093 6,083.28 196.6 Miscellaneous Fellowship 120 375 305.12 81.3 Other studies 150 150 - - Rural health 80 80 42.47 53.0 Subtotal 350 605 347.59 57.4 AgriculturaL Credit Inputs and credits 2,610 4,182 3,543.57 84.7 Unallocated 7,410 2,861 - GRAND TOTAL 23,200 23,200 24,061.77 103.7 Source: Finance Division, SURDP

SOTE% Exchange rate US$ 1 - 4.55 YR -35-

5. Cost and Disbursements

The completion dates for the IDA and ADF loan were March 31, 1982 and August 31, 1982, respectively. By these dates, loans from both sources had all Feea iisbursed. Table 4.6 shows the position as of January 31, 1982 by major heads of expenditure. The distribution of expenditures by project categories and financial sources as of January 31, 1982 is given in Table 4.7.

The final disbursement figures by IDA financial years are shown in Table 4.8. A slight adjustment was required to balance the books. As may be seen, total project costs amounted to YR 109,481,068 (equivalent to US$ 24,061,773.19 at an exchange rate of US$ 1.00 = YR 4.55 -- according to IDA expenditure oa project categories received on November 11, 1982).

In Tabl: 4.9, the annual actual disbursements are compared to the schedule estimate in the Appraisal Report. The acceleration of project works and, therefore, disbursements toward the end of the project period is not noticeable. Table 4.7

DISTRIBUTION OF EXPENDITURES TO PROJECT CATEGORIES AND FINANCIAL SOURCE (US$ 000)

TOTAL LOANS % OF TOTAL GOVERNMENT X OF TOTAL CATEGORIEb EXPENDITURES CONTRIBUTION EXPENDITURES CONTRIBUTION EXPENDITURES

Village water supply 5,157.35 5,157.35 100 Feeder roads - - - - Irrigation and land protection 1,070.94 1,070.94 100 - Buildings 2,592.41 2,592.41 100 - - Vehicles and equipment 1,022.33 1,022.33 100 - 0 Operation and maintenance 2,043.23 1,918.57 94 124.6 6 W Technical assistance 2,201.07 2,201.07 100 - 0 National staff 6,083.28 2,581.02 43 3,502.26 57 Fellowships 305.12 305.12 100 - Studies - - - Rural health 42.47 42.47 100 Agricultural credit 3,543.57 3,543.57 100 - -

GRAND TOTAL EXPENDITURES 24,061.77 20,434.85 84.9 3,626.92 15.07 Table 4.8

DISBURSEMENT FOR EACH CATEGORY AND BY SOURCE OF FINANCING (YR1)

RURAL VORKS PROJECT PACILITIES TECHNICAL SERVICES HISCELLANEOUS CRARCEABLE SOICE MANA ACRICULTURS YLAA V.W.S. IRkICATION CIVIL VENICLES & OPERATION 6 EXPATRIATE LOCAL CREDIT TO TA IACN VAORK EQUIPMENT NAINTEINANCI STAFF STAFF IRAINING DII.HARZIA FUD DIsaURSEEN I.D.A. A.DM. COVERNME2NT lb7 Loans 398,667 402,552 1399,667 1,245,375 569.446 - - 1,111,277 4,126,984 1,234,456 1,234,456 Uuverrment - - - - 1,234,456 379,630 - - - 379,630 - - 379,630 77/78 Loans 1.787,435 a - 1,263,617 1,034,410 847,153 2,534,173 1,105,733 134.503 - 11,094,494 Government 19,801,518 9,900,759 9,900,759 - - - - . - * 737,154 - * - 737,154 - - 734,154 78/79 Loans 6,247,468 - 1.455.978 1.247,182 1,297,182 1,999,511 2,577,250 379,664 - 1,808,887 17,013,072 8,506,536 8,506,536 - Government ------1,718,166 - - - 1,715,166 - - 1,718,166 79/80 Loans 6,283,264 1,940,821 982,335 1,061.145 1,046.903 1,746,793 3,376,051 460,026 31,558 2,250,000 19,162,786 9,591,393 9,591.393 Government - - - - 436.,610 - 1,661,93, - - * * 2,098,541 - - 2,09B,541 6/8A Loans 5.056,246 2,415,302 2,215,754 309,207 3,917,642 2,516,289 4,687.810 198,127 140,634 - 21,455,011 Covern2ent - 10,727,505 10,727,505 - - - .130,577 - 1,244,197 - - - 1,374,774 - - 1,374,774 81/82 Loans 4,091,525 516,671, 5,475,136 597,169 1,224,990 (22,265)* (572,651)& 215,942 21,141 (141,392)* 11,399,246 4,699,429 6,668,932 Covernment - - - * - - 10.194,186 - - - 10.194,186 - * 10,196,186

TOTAL 23,465,938 4,872,794 11,795,407 4,651,595 9,246,724 10,014,856 27,675,903 '1.388,282 193,223 16,123,266 104,481,068 45,500,000 47,478,617 16,502,451

71 betd an wxpLanaion here. buurc. Fanance OLvislon. SURDP -38-

Table 4.9

ACTUAL AND APPRAISAL SCHEDULE OF DISBURSEMENTS (in million YR)

IDA Loan Disbursements Abu Dhabi Fund Appraisal Loan Disbursement IDA Fiscal Year 1/ Estimate 2/ Actual Actual 3/

1976 1.82 - - 1977 7.05 2.06 2.06 1978 10.23 9.90 9.90 1979 9.33 8.51 8.51 1980 8.19 5.59 9.59 1981 7.28 10.73 10.73 1982 1.60 4.30 6.28 Adjustment - 0.41 0.40

TOTAL 45.50 45.50 47.47

1/ IDA fiscal year is from July 1 to June 30. Note that these years cut across calendar years so that, for example, 1976 refers to the second half of 1975 and first half of 1976.

2/ Appraisal estimate from IDA Appraisal Report, Annex 3, Table 10, by converting US Dollars at the rate of US$ 1.00 = 4.55 Yemeni Rials.

3/ Scheduled disbursements for ADF loan were expected to be similar to that for IDA. Due to favorable exchange rates ADf loarf actually amounted to YR 47,478,617 (equivalent US$ 10,434,861) and the closing date was extended to August 31, 1982. Table 4.10

COVENANTS (The convenants of the Development bredit Agrisent, Credit 545 YAR, are presented in abstract form with remarks showing how well they were attaine.d.)

COVENANT REMARKS

Article I - General Conditions: * Definitions 1.01 General Conditions Accepted 1.02 Definition of Terms Accepted

Article II - The Credit 2.01 A loan of $20 million Full amount leaned 2.02 Withdrawals from credit according to Schedule 1 of the agreement to meet cost of goods and services. Complied with 2.03 Procurement of goods and contracts for works or services in accordance with Schedule 3 of the agreement. Complied with

2.04 Closing date shall be March 31, 1982 or such later date as .the association shall establish. The closing date for IDA loan March 31,1982 fulfilled. Closing date for the Fund loan was extended to Auzgust 31, 1982

2.05 Borrover to pay service charge 3/4 of 1%on withdrawn and outstanding principala. Not yet applicable 2.06 Service charge payment on February 15 and August 15 in each year. Not yet applicable

2.07 Repayment of principals commences on August 15, 1985. Not yet applicable 2.08 USA currency specified for the purpose of section 4.02 of the general conditions. Accepted Article III - Execution of the Project 3.01 (a) Borrower shall carry out the credit facilities (part C) through ACF and other parts of the project by SURDU. Accomplished (b)Borrower concludes a subsidiary loan agreement with its Central Bank to provide the latter with funds al-located in category (5) for carrying out part (c). Accomplished (c) Exercise of the borrower rights stated in the subsidiary loan agreemiet and maintenance of said agreement intact without alteration. Complied with Table 4.10 *

COVENANTS (continued)

COVENANT REHARKS

() Borrows transformation of funds allocated under category (5).(a) of schedule I into equity contribution to ACF if ACF established as inUependent institution. Complied with

(e) Credit for construction of farm productprocesuing or storage facilities exceeding $50,000 requires association approval if ACF established as independent institution. Complied with

3.02 (a) Establishment and maintenance of SURDU headed by Manager acceptable to IDA vested with power. and responsibilities set forth in schedule 5. Complied with

(b) A committee for overall coordination headed by the Minister of Agriculture established and maintained.

3.03 Employment of experts to the satisfaction of Association with respect to their qualifications, experience and employment terms. Complied with Complied with 3.04 (a) Borrowers insurance of imported goods.

(b) Borrowers obligation for exclusive usage of all goods and services financed out of the proceeds of the credit. Complied with

3.05 (a) Borrower furnishing Association with plans, specifications, contracts and procurement schedules. Complied with

(b) Maintenance of records and furnishing IDA with all information concerning the project, expenditure goods and services catered for by the credit. Enabling Association representatives inspection of facilities, construction sites, goods, records and documents. Complied with Accomplished 3.06 Acquisition ot land and rights in respect of land required for the project works. of beneficiaries 30% of local cost of village water supply systems 3.07 Contribution and achieved with and gravity irrigation schemes. Applied the exception of pumping equipment

3.08 Furnishing SURDU proposals for location and construction standards of village water supplies, irrigation improvements and land protection schemes to Association for Complied with approval. Table 4.10

COVENANTS (continued)

COVENANT REMARKS

Article IV - Other Covenants

4.01 (a) Maintenance of adequate records reflecting accounting practices and operation the resources and expenditures of SURDU and ACF. Complied with

(b) Auditing accounts and financial statements of SURDU and ACF each fiscal year and furnishing Association with relevant information. Complied with

4.02 Assumption of entire cost of operations and maintenance for village water supply systems by beneficiaries. Applied

4.03 75% of loans for the development of ground water will be extended to owner cultivators after consultation with the hydrogeological expert of Surdu. Complied with

4.04 Interest rates to be not less than 9% per annum for short-term loans and 8% for medium- and long-term loans. Applied

4.05 Action for introduction a system for sharing of cost of farm inputs between made W landlords and tenants Comprehensive study as a first step toward a way ouL Article V - Remedies of the Association

5.01 - 5.02 Need for application of the remedies has not arisen

Article VI - Effective Date% Termination

6.01-6.03 Effective date: termination Complied with

Article VIII

7.01-7.02 Representative of the borrower addressee Acknowledged -42-

V. PROJECT IMPACT

This section consists of the following four parts:

A. Agriculture B. Livestock C. Public Health D. Technological

The s-iurces used for information are as follows:

1. Comprehensive farm survey conducted by SURDU Project in October 1981 for information on the impact of project activities during 1976-81 (summary of the results of that survey is in Annex 2).

2. The study of land tenure and crop sharing conducted by Economic Commission for West Asia (ECWA) which was presented to YAR Government in July 1980 (summary of the Southern Uplands region) portion of that study is given in Annex 3.

3. Result of agricultural census conducted by Ministry of Agriculture and Fisheries in 1980 (summary of that census is at Annex 8).

4. Various studies, research papers and reports prepared by Extension Section, Animal Health and Production Section, C.A.R.S. and A.C.B.

5. Statistical abstract for 1981, Central Planning Office, Government of Yemen Arab Republic.

6. Appraisal report of SURDP Phase I (IDA, 1975).

7. Preparation mission report, SURDP II, chapter IV and Annex 4 (FAO, 1979).

A. Agriculture - Crops

Major gains in productivity were made under SURDP I. The yield levels of all major crops increased substantially. In the case of sorghum and maize, the productivity increase was foreseen in the appraisal. However, in the case of fruits, mainly banana and citrus, the big rise in average yield was not anticipated. During the project period large yield increases have been obtained with wheat, barley, pulses, potato and vegetables. The widespread use of Sonalike variety, coupled with fertilizers, has nearly doubled the average wheat yields. With barley, there has been some impact of better seed and fertilizers. Sorghum yields have increased due mainly to fertilizer use. Maize yields have gone up due to the use of Tihama I and Khomaltar varieties and fertilizers. Pulses have benefited from some fertilizer use. With potato the main factors for yields increment were improved seed from the Seed Potato Project Dhamar, the use of fertilizers and more timely irrigation. -43-

Due mainly to yield increases, the total production of major crops increased substantially during the period 1976-81. The area under sorghum and maize remained steady during this period, but that of wheat and barley decreased, mainly due to an increase in vegetable and fruit cultivation. Relatively large increases in area were recorded for fruits, vegetables and potato. This is explained by rapid increase in demand, coupled with increased production due to increased use of fertilizers and irrigation. It should be noted, however, that some increase in production of pulses, potato, vegetables and fruits would have been achieved even without the project.

Very large incremental production was achieved for sorghum, maize, potato, vegetables and fruit (Table 5.). Much of this is consumed within Taiz and Ibb Governorates, since there has been an increase both in incomes and in population (20% in the project period). Due to taste preference, the demand for sorghum did not decrease.

The work done by the Plant Protection and Horticulture Sections of the Agriculture Extension and Services Division has made a positive contribution to crop productivity. Their contributions are detailed in Annexes 9 and 10.

B. Livestock

A comprehensive approach was adopted from the very beginning to preserve and develop livestock. The two components of the livestock division, Veterinary Service and Animal Production, worked together to realize those goals. The activities of the Veterinary Services consisted of control of diseases, securing safe meat for human consumption, rendering technical assistance and performing advisory work.

Project work started with a preliminary survey which collected information about the prevalent diseases, distribution, movement and performance of animals and the husbandry practices being followed.

Veterinary Services. The nature of the work and problems being encountered entailed not only having comprehensive plans for the project area but also working joint programs of action with the Yemeni/British Veterinary Service Project (Ministry of Agriculture) and other regional projects in order to control diseases effectively.

The Veterinary Service extended its activities far beyond the project boundaries. In fact, it almost encompassed the whole of the two Governorates, especially in the case of contagious diseases, which used to wipe out the animals. The project staff assisted Tihama and Radaa Project in campaigns against epidemic diseases.

Vaccination. Two teams moved about Ibb and Taiz Governorates for vaccinating animals and fowls against contagious diseases. These campaigns were waged whenever outbreaks occurred. Efforts for checking epidemic diseases by vaccination during the period 1976-81 are shown in Table 5.2. -44-

Table 5.2 VACCINATION OF ANIMALS (number of animals)

Rinderpest Anthrax HS Sheep Pox

1976 76020 1977 109283 1978 106662 1979 62531 34881 4813 3699 1980 28501 2823 328 7817 1981 62034 554 580 13749

TOTAL 445031 38258 5721 25265

Table 5.3 TREATMENT OF ANIMALS (number of animals)

External Parasites Internal Parasites Others

1976 1977 1978 - - - 1979 1503 68897 39167 1980 18592 10591 22791 1981 4257 4885 10381

TOTAL 24352 84373 72339

Table 5.'

MEAT INSPECTION (number of animals)

Cattle Sheep Goats Camels

1976 - - - - 1977 5021 728 753 22 1978 6351 1132 778 63 1979 12128 2384 21011 514 1980 19392 3335 29632 1546 1981 22983 3944 25504 595

TOTAL 65875 11523 77678 2740 -45-

Treatment. Diseased animals were taken care of in veterinary centers. The mobile clinic and teams extended services to isolated areas. The cases handled in 1976-81 are summarized in Table 5.2.

Slaughterhouses and Meat Inspection. The veterinary expert worked out the design and plans for the rehabilitation of Ibb and Taiz town slaughterhouses. Specifications for small village abattoirs, meat markets and shops were made for WAs and mur'.cipalities and military cooperatives. The veterinarians trained the municipality staff who were in charge of slaughter houses, examined live animals, and inspected their meat (Table 5.4).

Advisory Work. Advisory work was mainly concerned with the improvement of animal health through sanication and safeguarding against diseases. Visits were made to herds, dairy and poultry farms. A joint program with the Extension Service was carried out throughout the project life span whereby these topics were discussed in meetings with farmers. Broadcasting programs were made, leaflets distributed and posters displayed.

Quarantine. It was necessary to impose restrictions on the movements of animals, especially those imported, because material evidence dispelled doubts about the sources of outbreaks. Efforts were directed initially to the major markets of Ibb and Taiz, were animals were examined, vaccinated and branded before any transactions and transportation took place. The service had been extended to Dubab and Mawzaa access sea outlets to Taiz and Ibb. The Yemeni/British team took over after the third year. The table below shows the number of animals underwent quarantine measures.

Table 5.5

ANIMALS QUARANTINED (number of animals)

Cattle Sheep Goats

1976 1977 139 11,319 3,830 1978 - 2,288 -

TOTAL 139 13,607 3,830

Animal Production

Advisory Work. The working program of Animal Production was integrated with that of the Extension Service and included visits, meetings, demonstrations and radio programs. The advice and service extended were related to management, housing, fodder production and preservation, poultry raising and beekeeping. Leaflets and charts were prepared and distributed to farmers and agents. A model apiary with five hives was established for -46-

demonstration purposes. Seeds of lucerne were distributed to encourage farmers to grow forage crops. Improvement of poultry was initiated by distribution of 109 cockerels of improved breeds. Efforts were made for improving livestock diet by supplementing roughages with concentrates, mainly cotton seed cakes mixed with common salt.

Technical Assistance. Designs were made for dairy farm housing for several farms. Feasibility studies were made for 58 poultry farms which had a total of 577,320 birds. Assistance was extended for establishing those farms and continued in the form of vaccination, treatment and advisory work.

C. Public Health

Bilharzia Control. Efforts at the very beginning were directed toward defining the magnitude of the problem. Surveys were conducted to collect baseline data about snails and their habitat, types of bilharzia and degree of infection. Four species of snails were identified in association with topography and water sources. Table 5.6 summarizes the findings.

Table 5.6

DISTRIBUTION OF SNAILS

SNAIL (Spp) LOCATION WATER SOURCES

Biomophlaria P all over pilot project area streams Bulinus tracatus all over pilot project area stream, cisterns, canals Bulinus riticulatus Al Turba and Al Shuraiga rain cisterns Bulinus beccari Al Barh and Al Akhlood streams

Bilmophlaria P is the intermediate host for intestinal bilharzia (schistosomiasis mansoni), whereas the other three species of Bulinus are for urinary bilharzia (schistosomiasis haematobium). Examination of people revealed infection by both types of bilharzia. The prevalence for both types ranged from zero to 100% (average 50%). Females in the age group 20-40 years were found to be the most exposed people to infection due to behavior aspect. Table 5.7 shows the degree of prevalence of the two types of bilharzia in some of the schools and villages examined.

A plan of action with definite goals was adopted. The national goals, which aimed at reduction of prevalence and incidence (% of new infections) to 50% were adopted. A team of workers was trained on all aspects of snail control and treatment of bilharzia cases. Activities were confined in accordance with WHO recommendations, to a pilot area of 2,000 kml with about 542,000 persons in Taiz Governorate. -47-

Table 5.7

TYPE AND INCIDENCE OF BILHARZIA

Type of No. of No. of No. No. Prevalence Bilharzia Locations Persons Examined Infected Range Average

Urinary 7 villages 1001 680 357 6-97 49.5 5 schools 789 721 319 24-78 44.0

Intestinal 9 villages 660 523 342 39-98 65.5 4 schools 828 744 526 34-100 71.0

Malacological and epidemiological activities were carried out together. Water sources were surveyed to detect snails, their density and invasion by parasites (cercaria). Bayluscide 70Z wettable powder proved to be an effective molluscicide. Focal spraying and the dripping method were used for de-mollusciciding stagnant and flowing water, respectively. Treated water sources were kept under check time and again (surveillance) to safeguard against reinfestation and thus reducing the probability of new infections.

Patients were treated by praziquantal (Billaroil) tablets (600 mg/tablet). Praziquantal was found advantageous over other medicines because it could be used for both types of bilharzia, was easily administered, and had relatively few side effects. Amount of medicine was worked out on the basis of 400 mg/kg bodyweight. Youngsters had one single oral dose, whereas for elders the dose was split into two halves with six hours interval. Treated patients were examined 1, 3, 6 and 12 months later for assessing the side effects of the medicine and the cure rate. Those who proved negative would be checked after one year for measuring the effect of the medication. Table 5.8 gives the number of persons treated in the pilot project area and by health institutions in Taiz.

Table 5.8

TREATMENT OF BILHARZIA (number of persons treated)

Intestinal Urinary Total

SURDP 868 676 1544 Health Institutions 1543 101 1644

TOTAL 2411 777 3188 -48-

D. Technological

1. Inputs

The growth of fertilizer use during the project period was impressive, rising from 100 tons in 1975 to 6,678 tons in 1981. Sales through ACB credit accounted for more than 65% of the sales (Table 5.9). Most of the fertilizer was used for vegetables and potatoes, with a small quantity being used for fruits, maize and sorghum under irrigation.

The use of pesticides also recorded a rapid growth, from 3,000 kg before the project to 10,476 kg in 1981. Much larger quantities were used in 1979 and 1980 because of serious outbreaks of "armyworm." As may be seen from Table 5.9, though SURDU did give out pesticides in years of serious outbreaks, it did not do so in normal years.

From a very small beginning, the supply of improved seeds assumed a fair dimension by 1981. It may be noticed that improved maize seeds were first distributed on a large scale in 1981. Improved varieties had, however, been tried out earlier in farmers' fields.

The number of fruit and coffee seedlings distributed reached two peaks in 1978 and 1981, with a drop in between. As for afforestation seedlings, the numbers fell off after 1979.

2. Machinery and Equipment

It may be seen from Table 5.10 that the quantity of machinery and equipment being sold to farmers in the project area grew from only 50 tractors and 50 pumps at the beginning of the project to 600 tractors, 400 pumps and 913 sprayers in 1980-81. There was further growth in 1981-82 but due to the overlap with Phase II in the same area, the sales could not be differentiated. By the end of the project, over 1,500 tractors and 1,000 pumps and nearly 3,595 sprayers were being used in the project area.

3. Credits

Agricultural Credit Fund (ACF). Branches were established in Taiz and Ibb in September 1976 to provide farm credit in the form of short-, medium- and long-term loans to farmers in the project area. On July 1, 1980, ACF was merge-! with the Agricultural Credit Bank (ACB). The funds originally allocated for this component were US$ 2.61 million. During the implementation process it was realized that this provision cannot meet the increasing demand for loans from farmers due to cost escalation caused by double-digit inflation that prevailed in YAR. The Government of Yemen then requested from the financiers augmentation of the amount fixed for this component. Reallocation of an extra amount of USD 1,010,850 was approved by IDA and Abu Dhabi Fund, and thus the total amount for credit was increased by US9 3,610,850. Table 5.9

GROWTH OF AGRICULTURAL INPUTS USED BY THE FARMERS IN THE PROJECT AREA DURING 1975-81

1 9 7 5197619771978 BEFORE PROJECT 1976 1977 1978

Quantity Value Quantity Value Quantity Value Quantity Value Fertilizer (sacks of 50kg each)

ACB - - 2,000 160,000 30,038 2,403,040 39,884 3,190,720 Private Sector 2,000 160,000 2,000 160,000 15,000 1,200,000 20,000 1,600,000

Subtotal 2,000 160,000 4,000 320,000 45,038 3,603,040 59,884 4,790,720 Pesticides (kg)

SURDU - - 960 52,800 5,450 299,750 - - ACB - - - - 3,435 188,925 3,651 200,805 Private Sector 3,000 165,000 3,000 165,000 6,000 330,000 6,000 300,000 Subtotal 3,000 165,000 3,960 217,800 14,885 818,675 9,651 530,805 Improved Seeds (kg) Vegetables

ACB - - 50 3,750 190 1,425 1,351 101,325 Private - - 100 7,500 380 2,850 2,701 202,650

Potatoes ------. Wheat - - - - 2,100 4,200 11,200 22,400 Maize ------Seedling (NOS) Fruits ------11,200 168,000 Coffee - - 1,973 5,919 10,000 Afforestation 30,000 14,059 42,177 - - 90,415 271,248 90,415 271,248 117,463 352,389

TOTAL - 325,000 - 826,217 - 4,731,438 - 6,210,466 Table 5.9 (continued)

GROWTH OF AGRICULTURAL INPUTS USED BY THE FARMERS IN THE PROJECT AREA DURING 1975-1981

1 0 1981T 0 TAL 1 9 7 9 9 8 AT PRESENT

Quantity Value Quantity Value Quantity Value Quantity Value

Fertilizer (sacks of 50kg each)

ACB 99,180 4,814,400 82,843 6,627,440 83,560 6,684,800 298,505 23,880,400 Private Sector 30,000 2,400,000 40,000 3,200,000 50,000 4,000,000 159,000 12,720,000

Subtotal 99,180 7,214,400 122,430 9,827,440 133,560 10,684,800 457,505 36,600,400

Pesticides (kg) 4.n' SURDU 7,880 433,400 9,108 500,940 - - 23,398 1,286,890 ACB 3,597 197,835 4,012 220,660 3,976 218,680 18,671 1,026,205 Private Sector 9,000 495,000 20,000 1,100,000 6,500 357,500 53,500 2,942,500

Subtotal 20,477 1,126,235 33,120 1,821,600 10,476 576,180 95,569 5,256,295

Improved Seeds (kg) Vegetables

ACB 1,352 101,400 4,348 326,100 3,609 270,675 10,900 804,675 Private 2,704 202,800 8,696 552,200 7,218 541,350 21,799 1,634,925

Potatoes - - 15,000 5,250 39,600 138,600 41,100 143,850 Wheat 16,100 32,200 30,250 60,500 113,500 227,000 173,140 346,280 Maize - - - 74,300 185,750 74,300 185,750

Seedling (NOS) Fruits 4,077 61,155 8,057 120,855 14,563 218,445 37,897 568,455 Coffee 8,959 26,877 12,055 36,165 22,772 68,337 69,825 209,475 Afforestation 122,250 366,750 13,305 39,915 50,000 150,000 483,850 1,451,550

TOTAL - 9,131,817 - 12o895,025 - 12,817,527 - 46,612,490 Table 5.10

MACHINERY AND EQUIPMENT - ANNUAL SALES TO FARMERS IN PROJECT AREA

(Value in 000 YRLS)

TYPE 1976-1977 1977-1978 1978-1979 1979-1980 1980-1981 Cumulative Total No. Value No. Value No. Value No. Value No. Value No. Value

Tractors 50 5,000 150 15,000 200 20,000 500 50,000 600 60,000 1,500 150,000 Pumps 50 1,500 50 1,500 200 6,000 300 9,000 400 12,000 1,000 30,000 Sprayers - - 986 145.8 487 146.7 1,709 512.7 913 273.9 3,595 1,078.5

TOTAL - 6,500 - 16,645.8 - 26,146.7 - 59,512.7 - 72,273.9 - 181,078.5

Sourcess 1. ACF/ACB reports 2. Extension section information 3. AEP studies -52-

The credit provided by ACF/ACB to farmers is shown in Table 5.11.

Table 5.11

LOANS APPROVED AND DISBURSED BY ACF/ACB (1976-1981)

Type of Loan No. of Beneficiaries Total Amount (Y.Rials)

Short term 6873 6,311,300

Medium and long term 927 25,400,084

TOTAL 7800 31,711,384

Interest rates on these loans were as follows;

YEAR SHORT TERM MEDIUM AND LONG TERM

1.7.79 to 26.4.79 9% 8% 27.4.79 to 30.11.79 7% 6% 1.12.79 to 13.2.80 11% 10% 14.2.79 to 10.4.80 10.5% 9.5% 17.7.80 to 30.6.81 9% 8%

An additional 2% was charged as penalty for late repayment of loans up to February 1, 1980 and was thereafter raised to 4%. Type and amount of loan by purpose is shown in Table 5.12. Annual disbursement and recovery by year and type of loan are shown in Tables 5.13 and 5.14. Average repayment rates have been 76% from 1977 through June 30, 1981, but there was a declining trend from 1979. Loans not recovered within due date were mostly paid within a year thereafter. There were no write-offs for bad debts even though there was a provision for bad debt write-off. The special drought fund was not required as no loss claims due to drought were made. -53-

Table 5.12

INPUTS SOLD ON CREDIT BASIS FROM 1976 TO 1.7.1981 (in Y.Rials)

APPROXIMATE LOAN TYPE IBB TAIZ TOTAL SHARE (%)

SHORT TERM

Fertilizers 1,913,265 194,561 2,107,826 38

Improved Seeds Wheat 89,707 - 89,707 ) Potatoes 130,881 - 130,881 ) 5 Others 34,396 13,607 48,003 )

Insecticides 3,835 80 3,915 .07

Fodder 1,334,800 130,500 1,465,300 26

Sprayers 4,615 7,060 11,675 2

Operations 1,656,607 54,100 1,710,707 31

Afforestation 5,000 300 5,300 1

TOTAL 5,173,106 400,208 5,573,314 -

MEDIUM TERM

Agricultural Machinery 5,392,963 4,398,000 9,790,963 30.66 Irrigation schemes 8,245,949 10,892,334 19,138,283 59.94 Poultry 776,200 165,000 941,200 2.95 Afforestation - 8,000 8,000 0.25 Transportation 18,500 - 18,500 .05 Land Protection 1,843,200 190,250 2,033,450 6.37

TOTAL 16,276,812 15,653,584 31,930,396 -

LONG TERM

Orchard Plantation and Land Rehabilitation 128,000 - 128,000 100Z Table 5.13 LOANS EXECUTED BY ACF/ACB DURING SURDU I (in YR1s)

IBB BRANCH TAIZ BRANCH GRAND TOTAL Short Medium Long Short Medium Long Short Medium Long Term Term Term Term Term Term Term Term Term

1976 ------

1977 524,358 7,840,136 68,000 11,186 3,332,150 - 535,544 11,172,286 68,000

1978 1,284,381 4,086,436 - 50,406 4,509,050 - 1,334,787 8,595,486 -

1979 1,657,590 1,911,550 - 48,978 3,740,495 - 1,706,568 5,652,045 - 1980 1,268,158 717,850 - 100,063 2,888,689 - 1,368,221 3,606,539 - 1.1.81 to 30.b.81 438,619 1,720,840 60,000 189,575 1,088,700 - 628,194 2,809,540 60,000

TOTAL 5,173,106 16,276,812 128,000 400,208 15,653,584 - 5,573,314 31,930,396 128,000 -55-

Table 5,14

RECOVERY OF ACF LOANS (in YRIs)

YEAR TYPE OF LOAN AMOUNTS DUE AMOUNTS RECOVERED RATE Z

76/77 Short term 7,120.00 Medium term - 20,500.00 77/78 Short term 495,158.74 485,081.74 97.96 Medium term 1,807,445.6 1,690,747.6 93.54 Long term 6,800.00 6,800.00 100 Subtotal 2,309,404.34 2,182,629.34 94.5 78/79 Short term 1,145,598.71 1,093,075.03 95.4 Medium term 3,963,822.87 3,437,505.35 86.7 Long term 6,800.00 6,800.00 88.7 Subtotal 5,116,221.58 4,537,380.38 88.7 79/80 Short term 2,050,401.62 1,771,020.25 86.37 Medium term 6,046,652.86 4,582,973.08 75.79 Subtotal 8,097,054.48 6,353,994.14 78.5 80/81 Short term 1,494,130.52 996,733.2 66.7 Medium term 8,947,391.96 5,703,616.66 63.74 Long term 27,309.5 20,451.00 74.8 Subtotal 10,468,831.98 6,720,800.86 64.19

GRAND TOTAL 25,991,512.38 19,794,804.72 76.26 -56-

4. Rome Economics

It was found appropriate and logical for an integrated rural development project to cater for women, who besides their home responsibilities play a very important role in agriculture. They provide between 40 to 70% of the farm family labor. Two years after the project began, the Home Economics section was set up. Subject matters dealt with in the program are health and hygiene, nutrition, cooking, child care, sewing, rural industries, poultry raising and vegetable growing.

The program was carried out regularly only in some areas of Taiz. The number of centers, attendance and subject matters varied because of difficulties in securing permanent centers, peak labor demand periods during the harvesting season, dependence on volunteers and the pressing circumstances which forced the project to give more attention to other aspects of its activities. Table 5.15 shows the average number of centers, average attendance and the number of those who completed successfully one or more aspects of the program.

Table 5.15

HOME ECONOMICS CLASSES AND ATTENDANCE

YEAR CLASSES ATTENDANCE NUMBER COMPLETED COURSE

1978 5 500 160 1979 15 547 210 1980 13 470 230 1981 10 275 120

TOTAL 1792 720

A syllabus was devised for each subject matter and some criteria were applied at the end of the course to identify those who had successfully completed the course and could be transferred to an advanced class.

The Swedish Home Economics team, whose activities were confined to the Governorate-of Taiz, worked jointly with SURDU to make the Home Economics program for rural women a success. -57-

5. Employment

In addition to nationals who have been hired directly under SURDU, an estimated 600 man-years of employment were generated annually through the construction of rural works (Extension Centers, Blocks, etc.), village water supplies and buildings. Due to employment opportunities in OPEC countries, there was a shortage of labor through the project period. This was partly met by increasing women in the labor force. Significant hired labor were generated in the project due to project activities.

Additional employment was also generated indirectly through packaging and handling facilities and increased trade and transport resulting from the widespread use of agricultural inputs and more marketable surpluses.

It should be noted that the construction of village water supplies has assisted in making more family labor available for agricultural work. Before the availability of water near at hand, women had to work 2 to 4 hours every day to fetch water. This left them very little time to help with the harvest and other operations. The saving of time and energy made possible by the village water supply schemes enabled women to contribute very significantly to the required additional labor supply.

VI. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT

A. Organization

1. Management

The Southern Uplands Rural Development Unit (SURDU) was established under the Ministry of Agriculture in 1976 with the specific purpose of implementing the project. SURDU's responsibilities were defined to include the following;

a. organization and management of an agricultural extension service covering the project area, composed of about 200 extension agents and field supervisors;

b. distribution of agricultural inputs and organization of a supporting credit scheme in coordination with ACF;

c. survey, design and supervision of construction of support roads, village water supply systems, irrigation canal lining, land protection schemes, office buildings and staff housing, as well as provision of technical support to ACF for loans relating to production wells, orchards and the like; and

d. initiation and supervision of supplementary studies that would extend the project concept beyond the present area, and coordination with other bilateral and multilateral aid agencies whenever necessary. -58-

It was envisaged that at the end of the six-year project implementation period, SURDU's coverage would be broadened to include agricultural development of the whole Southern Uplands region. To facilitate coordination between SURDU and various ministries concerned, a coordinating committee was set up, chaired by the Ministry of Agriculture and including senior officials representing the Central Planning Organization and the Ministry of Finance.

At the appraisal stage, it was planned that SURDU would be staffed up to the sixth year with nine senior expatriate experts and ten associate level expatriate experts, all of whom would have local counterparts (see Table 6.1). The full complement was not achieved because of the delays in recruitment and replacement by local experts earlier than anticipated at appraisal stage. Due to the inherent difficulties in managing the projects with an expatriate Project Manager and a local Co-Project Director, the latter post was abolished in 1980 and a local official took over as General Director and Project Manager (Charts 1, 2 and 3). The key post of Administration and Finance Officer could not be filled lor two years, which in many ways effectively reduced project duration to four years. The achievements of the project must be seen in the light of these initial organizational problems.

2. Technical Services

Agricultural extension is the key function of the project. At appraisal it was planned that an extension force of 19 field supervisors and 176 extension agents would carry out the desired work. As seen in Table 6.3, the targets were not fully achieved. The main difficulty was, and remains, the salary level. There are more attractive opportunities elsewhere and it is difficult to either attract, or subsequently retain suitably qualified persons. This was forcefully brought out in the report of the preparation mission for SURDP II (March 1979), which is in the nature of a mid-term review of SURDP I. This report said "although the job security, challenging work and prospects of scholarships for further studies have helped the project to retain staff, it is believed that SURDU will face increasing difficulties in recruitment and staff retention unless central government agreement is soon given to an increase in remuneration." This agreement was not given right up to the end of Phase I.

Despite these difficulties, a reasonable extension network was built up and kept functioning through very hard work on the part of the two expatriate extension experts for Taiz and Ibb Governorates. Table 6.1

EXPATRIATE EXPERTS AND ASSOCIATE EXPERTS

1976 1977 1978 1979 1980 1981 P A P A P A P A P A P A

EXPERTS Project Manager 1 1 1. 1 1 -(mid-year) 1 1(+ChiefEng) 1 1(mid-year) 1 - Admin. and Finance I - 1 1(mid-year) 1 1 1 1 1 1 1 1 Credit Officef 1 1 1 1 1 1 1 1 1 1 1 1 Senior Extension (Tais) 1 1 1 1 1 -(mid-year) 1 - 1 1 1 1 Senior Extension (Ibb) 1 1 1 1 1 - 1 -(mid-year) 1 - 1 1 Plant Protection 1 - 1 - 1 1 - 1 1 1 Veterinary Expert 1 1 1 1 1 1 1 - 1 1 1 1

Livestock Expert - 1 - 1 1 -(mid-year) 1 - 1 - - - Senior Civil Engineer 1 1 1 1 1 1 1 (acting P.M.) 1 1 1 1 Horticulture Associate ------1 - 1 Extension Agronomist * 2 1 2 2 2 2 2 4 2 4 2 3 Extension (Water Kgmt) I - 1 - 1 - 1 - 1 - - Horticulture 1 1 1 1 - 1 - 1 - Livestock 1 1 1 1 1 1 1 1 1 - 1 1 Veterinarian I - 1 1 1 1 1 1 1 1 1 1 CivLl Engineers 3 1 3 2 3 1 3 2 3 2 3 2 Maintenance Sup. 1 - 1 1 1 -(mid-year) I - 1 - I - CONSULTANTS Hydrogeologist I - 1 1 1 1 1 1 1 - 1 - Agricultural Economist 1 - 1 - I - 1 - 1 - 1 - Seed Potato Specialist - - I * 1 - 1 * 1 - - NOTE% P w Planned A w Actual －閣 － む目網て」

・！ ・）

-- &!，斗 ． CHART .3

110ORMATION FLOW CHART

Abu Ohabi later Ministerial fund Comittes I CYOA we

SUROU Governors MANAGER JBBATAIZ ARS TAIZ Other MaE Institutions Unit

Apia. Ellf Won Animal Husbandry Administration Rural Infra- ACS Forestry and and and structure a Tals and too Social Ser:1406 Producti3n Finance Engineering

Nurseries Wara son Ilk a] lee

Cantrell In-Marvis In-charge I Exit. Hydrogeolosist] TAI Z lee

v 6smanstrafloo Field Owners Pilot$ Contact Farmers field D41o -63-

Table 6.2

NATIONAL STAFF SURDU I

1976 1977 1978 1979 1980 1981 P A P A P A P A P A P A

Project Manager ------1* - 1 Co-Manager 1 1 1 1 1 1 1 1 1 1**1 - Admin. Officer 1 - 1 1 1 1 1 1 1 1 1 1 Personnel Officer ------1 - 1 Purchasing Officer - - - - - 1 - 1 - 1 - 1 Senior Credit Officer I - 1 - 1 - 1 1 1 1 1 1 Field Credit Officer 2 2 2 2 2 3 2 3 2 3 2 3 Accountant - - - - - 2 - 2 - 2 - 2 Storesman - - - 2 - 2 - 3 - 3 - 3 Clerk - 3 - 6 - 10 - 10 - 10 - 10 Sr. Extension Officer 3 2 3 2 3 2 3 2 3 2 3 2 Sr. Livestock Officer - 1 - 1 - 1 - 1 - 1 - 2 Sr. Horticulture Officer - - - 1 - 1 - 1 - 1 - 1 Project Accountant 1 1 1 1 1 2 1 2 1 2 1 4 Senior Engineer 2 1 2 1 2 2 2 3 2 3 2 3 Junior Engineer 3 - 3 - 3 - 3 - 3 3 3 3 Surveyor - 1 - 3 - 2 - 3 - 4 - 4 Draftsman 3 1 3 1 3 2 3 3 3 3 3 3 Technician 6 3 6 3 6 4 6 8 6 8 6 8 Language Instructor 1 - 1 - 1 - 1 - - - - - Interpreter 3 - 3 - 3 - 3 - 3 1 3 1 Warehouse Manager 2 1 2 1 2 1 2 1 2 1 2 1 Warehouse Helper 2 1 2 1 2 2 2 3 2 3 2 3 Maintenance Supervisor 2 - 2 - 2 1 2 1 2 1 2 1 Mechanics 2 2 2 3 2 4 2 4 2 5 2 5 Clerk/Secretary 7 6 7 9 7 21 7 21 7 21 7 35 Veterinary Supervisor - 1 - 2 - 2 - 2 - 2 - 2 Veterinary Assistant 4 6 4 8 4 16 4 20 4 20 4 20 Extension Supervisor 2 2 7 7 11 10 15 12 19 14 19 14 Extension Agent 27 38 67 34 108 50 149 61 17b 68 176 76 Home Economics Agent - - - - - 12 - 20 - 14 - 11 Driver 22 6 22 10 22 10 22 32 22 32 22. 40 Janitor/Messenger 6 5 6 8 6 10 6 10 6 10 6 10 Bilharzia Control ------3 - 6 Sr. Forestry Officer - 1 - 1 - 1 - 1 - 1 - 1 Forestry Technician - - - 1 - 1 - 1 - 1 - 1 Horticulture Technician - 2 - 2 - 2 - 2 - 2 - 2

NOTE: P = Planned, A = Actual

* from mid-year, ** to mid-year -64-

Table 6.3

EXTENSION STAFF IN 1981 (SURDP I)

STAFF TAIZ IBB OTHER 1/ TOTAL

Expatriate

Extension Expert 1 1 2 Assistant to E.E. 2 2 4 Agricultural Engineer 1 1 2

Local

Senior Extension Officer 1 1 2 Block Center In-Charge 3 3 6 Supervisors 6 8 14 Extension Agents 32 31 13 76

TOTAL 46 47 13 106

1/ Horticulture, plant protection and food for work.

B. Training

Pre-Service. It was planned at project appraisal that the Central Agricultural Research Station (CARS) would be responsible for pre-service training of extension agents in courses lasting from six to nine months, and conducted by its own staff. The timetable called for the training of 30 extension agents in 1975 and.60 agents in each of the following three years. At first, only those with a secondary education certificate were accepted, but by the second year, this condition had to be relaxed due to the non-availability of trainees with this level of qualifications. The number planned and actually trained in the seven years, 1975 to 1981, is shown in Table 6.4. A total of 148 persons had pre-service training during this period, but only 115 of them joined the project, while the rest were attached to other services.

Table 6.4

PRE-SERVICE TRAINING

1975 1976 1977 1978 1979 1980 1981 Total

Planned 30 60 60 60 - - - 210

Actual 24 23 20 20 15 23 23 148 -65-

In-Service. As envisaged at appraisal, SURDU carried out a number of in-service courses and seminars during Phase I. As may be seen in Table 6.5, a total of 467 participants were trained.

Table 6.5

IN-SERVICE COURSES

TYPE NO. OF COURSES NO. OF PARTICIPANTS

Extension 10 231 Agricultural Production/Plant Protection 6 118 Animal Production/Veterinary Care 6 106 Bilharzia Control 3 12

TOTAL 25 467

Overseas Training. A total of 46 persons were sent for training overseas, for periods ranging from 2 months to 2 years, as may be seen from Table 6.6.

C. Supporting Institution

Research. The Central Agricultural Research Service (CARS) played an important role in the implementation of the project. Before the project started, CARS conducted pre-service training for 30 extension agents. This enabled the project to disseminate some of the research findings of CARS from the very first year (1976) of the project. During Phase I of the project, 148 extension agents were given pre-service training by CARS (section B above). In addition, the staff of CARS had a major role in the short refresher sessions held annually by SURDP extension service.

Though no verification trials were developed jointly with CARS, their research recommendations played an important part in making the extension work of SURDU effective. From the very beginning of the project, the fertilizer dosages recommended for sorghum, wheat and maize were disseminated by the extension agents and this had a major effect on production. By 1980, they had recommended fertilizer dosages for vegetables also and this information in turn was disseminated and led to big increments in vegetable production.

CARS was also responsible for testing and recommending improved seeds such as Sonalika for wheat, Khomaltar for maize and dwarf varieties of sorghum. The recommendations for wheat and maize were notable successes. Though the sorghum varieties yielded very well, the farmers did not adopt them because they need large amounts of stover and therefore prefer the Table 6.6

OVERSEAS TRAINING

TRAINEES POSITION COUNTRY FIELD DURATION OF STUDY (months)

1 Co-Manager USA Integrated Rural Development Mgmt 4 1 Counterpart USA Entomology 24 1 Counterpart USA Animal Husbandry 4 1 Credit Officer Egypt Agro-economist 24 1 Counterpart USA Irrigation 12 1 Counterpart UK Public Administration 12 1 Counterpart UK Roads Engineering 12 1 Counterpart Egypt Extension Service 6 7 Extension Supervisors & Agents Sudan Extension Service 28 10 Extension Supervisors & Agents Egypt Extension Service 40 1 Audio Visual Technician Italy/Egypt Audio Visual Techniques 7 I Horticulture Technician Egypt Horticulture & Nursery 4 1 Surveyor Egypt Geological Survey 4 2 Accounts Officers Egypt Accounting System 8 1 Sur. Draftsman Egypt Draftsmanship 3 1 Surveyor Egypt Survey 3 1 Surv. Forestry Officer Egypt Forestry & Nursery 2 5 Extension Supervisors & Agents Egypt Extension Service 15 1 Plant Protection Supervisor Egypt Plant Protection Techniques 3 5 Veterinary Assistants Sudan Animal Health 15 2 Credit Officers Egypt Credit 8

46 238 -67-

taller varieties. From the Tihama Regional Research Station (TRRS), the project received seed of Tihama I, an outstanding maize variety that has done very well in the warmer parts of Taiz Governorate.

Projects. a. During 1979 and 1980, the Yemet&British Agricultural Engineering Project (YBAEP) assisted the extension service with training and instructions regarding the use of tractors. In 1981, however, this collaboration ceased. There remains the need to develop appropriate agricultural machinery to reduce production costs. Without a reduction in production and marketing costs, it will not be possible to develop an export market, especially for potatoes, vegetables and fruits.

b. The Seed Multiplication Project has been a very great help to the extension work done by SURDU. Up to early 1978, CARS supplied small quantities of seed, mainly of wheat, for extension work. From that year, the Seed Multiplication Project supplied all the maize and wheat seed required by the extension service, and this greatly increased their effectiveness.

c. The Veterinary Services Project financed bilaterally by the United Kingdom, assisted SURDU up to mid-1978, when it terminated.

d. The Plant Protection Project, carried out the plant protection campaigns during the first three years of the rural development project. From 1979, this project ceased and SURDP alone has been responsible for plant protection work.

e. The Potato Seed Production Project, based in Dhamar, has beei successful in fully meeting the demand for seed potato. However, the farmers have complained about the price. Though there were no supply constraints, potato cultivation did not increase as fast as anticipated at appraisal because of higher profits in vegetables and fruit cultivation. Nevertheless, the amount of seed potato sold in the project area increased from 30 tons in 1979-80 to 350 tons in 1980-81.

Local Develooment Associations. The emergence of Local Development Associations (LDAs) in the recent past has been a profound development. Though the first formalization of LDAs was made in 1963, this movement really emerged as a powerful force in 1973 with the formation of the Confederation of Yemeni Development Associations (CYDA). No provision was made at appraisal stage for LDA SURDU coordination. Subsequently, however, there was constant interaction between different LDAs and the project. Close cooperation developed during the 1976 and 1977 campaigns against armyworm outbreaks. During these years, the Veterinary Service also developed close coordination with IDAs for rinderpest control. Since there was no formal mechanism for coordination, the contacts have subsequently been sporadic. A major effect of the LDAs was their request for increasing the village water supply component, while they would take care of the feeder roads. By doing this, more has been accomplished in both components than would have been possible otherwise. In the last two years of Phase I, the LDAs were particularly helpful in encouraging home economics courses. The role of the LDAs has, therefore, been complementary to that of the project in achieving rural development. -68-

D. Accounts and Reporting

Southern Uplands Rural D.velopment Project. Introduction of modern accounting system for SURDU I did not take place in the early days of the project due to the late arrival of the expatriate expert who was selected to fill the post of Administrative and Financial Officer. The cause of his delay was exclusively attributed to the lengthy process required to obtain his Government's permission for his release, as was the case for several other expatriate candidates in various fields.

Double entry bookkeeping was introduced only after the arrival of the Administrative and Financial Officer in June 1977. Since then, heads of separate accounts have been maintained for the project funds. Moreover, a contract was concluded with Abdel Latif El Tayeb and Co. on January 15, 1978 for auditing the project's accounts. Audits were conducted during the periods shown in Table 6 .7. Sets of the audit report were sent regularly to the MOA, financing agencies and other concerned organizations.

Table 6.7

AUDIT PERIODS AND DATES

Period Audited By Date of Audit Report

1.1.1976 - 30.6.1977 Abdel Latif El Tayeb & Co. October 30, 1978 Kher"..,.am, Sudan 1.7.1977 - 30.6.1978 " September 1979 1.7.1978 - 30.6.1979 " January 22, 1980 1.7.1979 - 31.12.1980 " June 2, 1981 1.1.1981 - 31.12.1981 " March 1982

Reporting. Project progress reports were disseminated regularly to the Ministry of Agriculture, financing agencies, and other concerned parties. Annual reports in Arabic and English were prepared up to the end of 1979 (see Table 6.8). Quarterly reports in Arabic and English were prepared up to the end of 1979, and thereafter in English only. They were distributed to:

(i) Ministry of Agriculture and Fisheries

(ii) IDA

(iii) Abu Dhabi Fund

(iv) Other institutions which have linkage with agricultural activiLies in the project area. -69-

Table 6.8

ANNUAL REPORTS

PERIOD DATE ISSUED

1976 January 1977 1977 January 1978 1978 January 1979 1979 January 1980

Table 6.9 shows the periods covered and the months when the quarterly reports were distributed.

Table 6.9

QUARTERLY REPORTS

PERIOD DATE ISSUED

1.7.76 - 30.9.76 October 1976 1.10.76 - 31.12.76 January 1977 1.1.77 - 31.3.77 April 1977 1.4.77 - 30.6.77 July 1977 1.7.77 - 30.9.77 October 1977 1.10.77 - 31.12.77 January 1978 1.1.78 - 31.3.78 April 1978 1.4.78 - 30.6.78 July 1978 1.7.78 - 30.9.78 October 1978 1.10.78 - 31.12.78 January 1979 1.1.79 - 31.3.79 April 1979 1.4.79 - 30.6.79 July 1979 1.7.79 - 30.9.79 October 1979 1.10.79 - 31.12.79 January 1980 1.1.80 - 31.3.80 April 1980 1.4.80 - 30.6.80 July 1980 1.7.80 - 30.9.80 October 1980 1.10.80 - 31.12.80 January 1981 1.1.81 - 31.3.81 April 1981 1.4.81 - 30.6.81 July 1981 1.7.81 - 30.9.81 October 1981 1.10.81 - 31.12.81 January 1981 1.1.82 - 31.3.82 April 1982 1.4.82 - 30.6.82 July 1982 1.7.82 - 30.9.82 October 1982 -70-

E. General Comments

The development of new institutions is a difficult process. SURDU suffered considerably from problems unforeseen at appraisal and full effectiveness was delayed by almost two years. Another two years was taken to sort out internal inconsistencies (see Chapter IX) and establish linkages with other institutions. Therefore, it was only in the last two years that the project functioned smoothly. This is evident in the physical and institutional achievement, which made their most significant progress in the last two years.

Of all projects and institutions which assisted SURDU, the most useful was CARS, mainly on pre-service training of extension agents and delivery of recommendations available. In the initial stage their assistance was absolutely vital. Though training targets were not met due to the initial establishment difficulties and low salaries (see chapter IX), a sufficient cadre has been trained and the institutional framework for further progress in rural development has been laid.

The conversion of the ACF to ACB was a significant advance in institutionalizing the credit system. It is testimony to the success of the extension service, and the village water supply component. The credit syscem is now firmly established and capable of supervising a much larger credit project.

VII. PROJECT BENEFITS

Crops

The benefits from incremental crop production have been considerable. As may be seen comparing Table 7.1 with Table 7.2, the net value of crop production increased by YR 79 million (at 1981 financial prices) during the period 1976-81. Some development would have taken place because of farmers exposition to agriculture inputs (fertilizer, etc.). The net value of production at present from directly quantifiable benefits is estimated at YR 208 million.

Farm Incomes

In part C, farm incomes from five farm models have been compared as may be seen from Table 7.4 to Table 7.8 the income increment have been considered. The models apply only to those farmers who have adopted the necessary improved techniques and inputs.

khen the farm models given in the appraisal report are compared with the farm models at the end of the project period, it can be seen that in all Table 7.1

CROP AREA, VIELD, PRODUCTION AND VALUE - BEFORE PROJECT (using 1981 financial farm-sate prices)

GROSS VALUE TOTAL COST MET VALUE AREA VIELD PRODUCTION OF PRODUCTION OF PRODUCTION OF PRODUCTION C R 0 P (000 H.A) (T/H.A) (000 TON) ('000 YR) (000 Y.R.) (000 Y.3.) Sorghuma Low Rainfall 10.5 grain 0.7 7.4 13.320 11,770 7,220 stover 1.8 18.9 5,670 High Rainfall 17.4 grain 1.5 26.1 46.980 20,636 57.664 stover 6.0 104.4 31,320

Haises High Rainfall 0.6 grain 1.0 0.6 1,080 696 1,104 stover 4.0 2.4 720

Irrigated 1.5 grain 2.0 3.0 5,400 1.755 6,345 stover 6.0 9.0 2,700

Pulsest (intercropping) (Beans) 1.5 0.7 1.1 5.500 600 4,900 I-

Potatoess High Rainfall 0.5 8.0 4.0 8,000 3,970 4,030 Irrigated 1.0 10.0 10.0 20,000 8.130 11,670 Vegetable (anions) 0.5 8.0 4.0 12,000 1,170 10,830

Fruits (banana) 0.5 8.0 4.0 12,000 399 11,601

Alfalfa 0.5 40.0 20.0 10,000 900 9,100

TOTAL 34.5 - - 174,690 50,026 124,664 Table 7.2

CROP AREA, YIELD, PRODUCTION AND VALUE - WITH PROJECT (using 1981 economic prices)

CROSS VALUE TOTAL DST MET VALUE CR 0 P AREA VIEW PRODUCTION OF PRODUCTION OF PRODUCTION OF PADDUCTION (000 B.A.) (T/H.A.) (000 TO") ('000 VB) (000 Y.3.) (000 T.3.)

Sorghum: Lo Rainfall 9.3 grain 0.8 7.4 13,320 11,011 7,889 stover 2.0 18.6 5,580

High Rainfall 14.0 grain 2.1 29.4 52,920 18,452 63,868 stover 7.0 98.0 29,400

Maise: High Rainfall 2.7 grain 2.0 5.4 9,720 3,583 10,667 stover 5.6 15.1 4,530

Irrigated 2.3 grain 2.9 6.7 12,060 3,031 13,799 atover 6.9 15.9 4,770

Pulsess (intercropping) (Beans) 16.7 1.0 16.7 83,500 7,983 58.817

Potatoess High Rainfall 0.7 11.0 7.7 15,400 6.888 8,512 Irrigated 0.3 14.0 4.2 8.400 2,681 5,719

Vegetable (anions) 0.3 22.0 6.6 19,800 786 19,014 Fruits (banana) 0.3 14.0 4.2 12,600 226 12,374

Alfalfa 0.2 71.0 14.2 7,100 374 6.726

TOTAL 46.8 - - 282,100 55,015 224,085

* Production without the project is assumed to remain unchanged. Table 7.3

AMNUAL CST OF CROP PRODUCTION FOR 1981 (1981 prices)

Animal Hired Family Total Total 1/ C R o P Hire * leeds Fertilizers Pesticides Labor Labor Misc. w/F.L. w/o F.L. (yrt/ha) (yrt/ha) (yrl/ha) (yrl/ha) (yrl/ha) (yri/ha) (yri/ha) (yrl/ha) (yrl/ha)

Before Project Low Rainfall sorghum 900 90 11.8 - 120 1,080 - 2,201 1,121

High Rainfall Soruhua 900 50 56 - 180 1,620 - 2,806 1,186 Maize 900 £0 - - 180 1,620 - 2,780 1,160 Pulses - 400 - - - 600 - 1,000 400 Potatoes 900 6,000 - - 900 2.700 240 10.640 7,940

Irrigated Naise 900 90 - - 160 1,620 - 2,790 1,170 Potataes 900 6,000 - - 900 2,700 330 10,830 8,130 Onions 900 240 - - 900 2,700 300 5,040 2,340 Alfalfa 600 1,200 - - - 6,000 - 7,600 1,800 Banana 300 7,500 - - 180 1,620 - 9,600* 7,980k

With Proiect

Low Rainfall sorghum 900 72 74 18 120 1,080 - 2,264 1,184

High Rainfall Sorghum 900 72 198 18 180 1,620 - 2,938 1,318 Maize 900 81 148 18 180 1,620 - 2,947 1.327 Pulses - 400 60 18 - 600 - 1,078 478 Potatoes 900 7,500 180 30 900 2,700 330 12,540 9,840 Irrigated Maise 900 72 148 18 180 1,620 2,938 1,318 Potatoes 900 7,500 180 30 900 2,700 420 12,630 9,930 Onions 900 240 180 30 900 2,700 660 5,610 2,910 Alfalfa 600 1,200 152 15 - 1,200 - 3,167 1,967 Banana 300 7,500 182 30 360 3,240 - 11,610* 8,370*

* Banana cost has to be divided on ten years. I/ Cost per hetere without cost attributed to family labor used. -74-

Table 7.4(a)

FARM MODEL 1, RAINFED - LOW RAINFALL (TAIZ REGION) 2.6 ha, 50% owned, 50% rented, one draft animal (appraisal estimates)

PRE PRODUCTION PATTERN UNIT PROJECT YEAR 1 YEAR 2 YEAR 3

Output

Sorghum Yield ton/ha 900 1.400 1.500 1.700 Volume ton/ha 2.340 3.640 3.900 4.420 Less production tax 10% ton/ha 0.234 0.364 0.390 0.442 Less landlord's share at 25% of rental portion ton/ha 0.292 0.455 0.487 0.552 Less family consumption (six members) ton/ha 1.140 1.140 1.200 1.320 Net volume ton/ha 0.674 1.681 1.823 2,106

Total marketable output YR 1200 ton YRL(1,000) 0.809 2,017 2,188 2,527

Inputs

Seed 50kg/ha at YR 1.2 YRL 156 156 Fertilizer YRL - 286 286 390 Chemicals YRL 18/ha from Y2 YRL - - 47 47 Hired labor YRL 50/ha YRL 130 130 130 130 Bags YRL 20 to 30/ha YRL 52 78 78 78

Total inputs YRL 471 1,367 1,491 1,726

NET CASH SURPLUS YRL 471 1,367 1,491 1,726 Table 7.4(b) FARM MODEL 1, RAINFED - LOW RAINFALL (TAIZ REGION) 2.6 ha, 50% owned, 50% rented, one draft animal (actual obtained)

PRODUCTION PATTERN PR YEARS UNIT' PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 10-20

Output Sorghum Viela (grain) ton/ha 0.70 0.70 0.70 0.75 0.75 0.00 0.80 0.85 0.85 0.90 0.90 Volume ton/ha 1.82 1.82 1.82 1.95 1.95 2.08 2.08 2.21 2.21 2.34 2.34 Less production tax 10% ton/ha 0.18 0.18 0.18 0.19 0.19 0.21 0.21 0.22 0.22 0.23 0.23 Less landlord's share at 25% of rental portion ton/ha 0.45 0.45 0.45 0.49 0.49 0.52 0.52 0.55 0.55 0.58 0.58 Less family consumption (6memLers) ton/ha 0.81 0.85 0.90 0.94 0.99 1.03 1.08 1.08 1.03 1.08 1.08 Net volume ton/ha 0.38 0.34 0.29 0.33 0.28 0.32 0.27 0.36 0.36 0.45 0.45 Output grain at YR1800 ton (grain) YRLS 684 612 522 594 504 576 486 648 648 810 810 Output straw at YRL300/ton ton/ha 1.80 1.80 1.80 1.90 1.90 2.00 2.00 2.10 2.10 2.10 2.10

GRAND TOTAL OUTPUT YRLS 1,224 1.152 1,062 1,164 1,074 1,176 1,086 1,278 1,278 1,440 1,440

Inputs

Seed use kg/ha kgs 50 50 45 45 40 40 40 40 40 40 40 Actual seed use 130 130 117 117 104 104 104 104 104 104 104 Cost at 1.8 YRL/kg YRLS 234 234 211 211 187 187 197 187 187 -187 187 Fertiliser use YR 1.6kg 20kg compound/ha * YR 1.4kg 30 kg urea (YR 74/ha) YRLS go 42 42 192 192 192 192 192 192 192 192 Chemicals YR (18) from Y/2 YRLS - - 47 47 47 '47 47 47 47 47 47 Labor i,equirement 20 md/ha hired (2 md/h harvesting) YRLS 312 312 312 312 312 312 312 312 312 312 312 Family (18 md/ha at 60 YR/md 2,808 2,808 2,808 2,808 2,808 2,808 2,808 2,808 2,808 2,808 2,808 Operation cost w/o family labor YRLS 574 588 612 762 738 738 733 738 738 738 738 Oparation cost with family labor YRLS 3,382 3,396 3,420 3,570 3,546 3,546 3,546 i,546 3,546 3,546 3,546

NET INCOME w/e FAKILY LABOR YRLS 650 564 450 402 336 438 348 540 540 702 702 - -76-

Table 7.5(a)

FARM MODEL 2, RAINFED - HIGH RAINFALL (13 REGION) 1.5 ha, 100% rented, one draft animal (appraisal estimates)

PRODUCTION PATTERN PRE- (OUTPUT) UNIT PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4

Sorghum Area ha 1.5 1.5 1.5 1.5 1.0 Yield kg/ha 1,400 1,800 1,900 2,100 2,100 Volume kg 2,100 2,700 2,850 3,150 2,100 Less production tax at 10% of volume kg 210 270 285 315 210 Less landlord's share at 25% of volume kg 525 675 712 787 525 Less family consumption (six members) kg 960 1,140 1,200 1,320 1,320 Net volume kg 405 615 653 728 45 Net value at YR 1.2 kg YRL 486 738 784 874 54

Beans (intercropped with Sorghum and Maize) Area ha - 1.5 '1.5 1.5 1.25 Yield kg/ha - 600 650 700 700 Volume kg - 900 975 1,050 875 Less production tax at 10% of volume kg - 90 98 105 87 Less family consumption kg - 120 120 120 120 Net volume - kg - 690 757 825 668 Net value at YRL 1.5 kg YRL - 1,035 1,135 1,237 1,002

Potatoes Area ha - - - - 0.25 Yield kg/ha - - - - 10.00 ? Volume kg/ha - - - - 2.500 ? Less production tax 10% of volume kg - - - - 250. Less landlord's share at 25% of volume kg - - - - 625 Less family consumption kg - - - - 150 Net volume kg - - - - .1,475 Net value at YR 1.1 kg YRL - - - - 1,622

Maize Area ha - - - - 0.25 Yield kg - - - - 2,500 Volume kg - - - -. 625 Less production ta.: 10% of volum- kg - - - - 63 Less landlord's share at 25% of value kg - - - - 156 Net volume kg - - - - . 407 Net value at YR 1/kg YRL - - - - 407

TOTAL MARKETABLE OUTPUT YRL 486 1,773 1,919 2,111 3,085 -77-

Table 7.5(a) (continued)

PRODUCTION PATTERN PRE- (INPUTS) UNIT PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4

Sorghum Seeds 50kg/ha at YR 1.2 kg YRL 90 90 90 90 60 Fertilizers YRL 105 241 241 363 242 Chemicals YRL 18/ha from Y2 YRL - - 27 27 18 Hired labor YRL 50/ha YRL - 75 75 75 50 Bags YRL 20-40 ha YRL 30 45 60 60 60

Total inputs, Sorghum 225 451 493 615 410

Beans Seeds 80kg/ha at YR 1.2 kg YRL - 120 120 120 100 Fertilizers YRL - 76 76 76 63 Chemicals YRL 20/ha YRL - - 30 30 25 Bags YRL 10/ha YRL - 15 15 15 13

Total inputs, Beans - 211 241 241 201

Potatoes Seeds 1200kg/ha at YR1.5 kg YRL - - - - 450 Fertilizer YRL - - - - 59 Chemicals at YR 30/ha YRL - - - - 7 Bags at YRL 100/ha YRL - - - - 25 Transport 1.5/mt at YR 10 mt YRL - - - - 15

Total inputs, Potatoes - - - - 606

Maize Seeds 50kg at YR 1.5 kg YRL - - - - 19 Fertilizers YRL - - - - 75 Chemicals YR 18/ha YRL - - - - 5 Hired labor at YR 50/ha YRL - - - - 12 Bags at YR 50/ha YRL - - - - 12

TOTAL INPUTS YRL 225 662 734 856 1,340

NET CASH SURPLUS YRL 261 1,111 1,185 1,255 1,745 -78-

Table 7.5(b) FARM MODEL 2, RAINFED - RIGE RAINFALL (IBB REGION) 1.5 ha, .100 rented. one draft anin l (actual obta:ned)

PNUINucTXOU 1ATZERN PR- TEA88 (OUPUT) WIIT PIOJECT T=AR 1 YE 2 TEAR 3 TEA~4 mEAR 5 EA 6 1A" 7 M=AR8 1EA 9 10-20

Arga ha 1.5 1.3 1.5 1.5 1.0 1.0 1.0 1.0 1.0 1.d 1.0 tiald tom/ha 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 Volumm to. 2.3 • 2.4 2.6 2.7 1.9 2.0 2.1 2.2 2.3 2.4 2.5 Production ta 10 ton 0.23 0.24 0.26 0.27 0.19 0.20 0.21 0.22 0.73 0.24 0.25 Logo lardlord's ohare 25% to. 0.58 0.60 0.65 0.67 0.48 0.50 0.53 0.55 0.57 0.60 0.6U Fm~ily conamption (6 m~mbero) tom 0.81 0.85 0.90 0.94 0.99 1.03 -1.08 1.08 1.01 1.08 1." mot voluma ton 0.68 0.71 0.79 0.82 0.24 0.27 0.28 0.35 0.42 0.48 0.55 Net value at 1800 tL/eom YIL 1,224 1.278 1,421 1,476 432 486 506 630 756 864 990 Stover yield tom/ha 6.0 6.1 6.3 6.5 6.7 6.9 7.0 7.2 7.3 7.4 7.5 Stover volum ton 9.0 9.15 9.45 9.75 6.7 6.9 7.0 7.2 7.3 7.4 7.5 mot stover value at 300MRL/tan TmL 2,700 2,745 2,935 2.925 1,010 1,070 1,100 2,160 2.190 2,220 2,250

GROBS Ia TIL. 3.924 4.023 4,257 4,401 1,441 2,556 2.604 2.790 2.96 3,084 3.240

oas (intercropped). Area ha 0.15 0.30 0.45 0.60 0.45 0.65 0.70 0.75 0.85 1.0 1.25 ield tom/ba 0.70 0.75 0.80 0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20 Volum con 0.11 0.23 0.36 0.51 0.59 0.62 0.7 0.79 0.94 1.15 1.50 Les: production tan 10 tom 0.01 0.02 0.04 0.05 0.06 0.06 0.07 0.08 0.09- 0.12 0.15 Less landlord'o ahare 251 ton 0.93 0.06 0.09 0.13 0.13 0.16 0.18 0.20 0.24 0.29 0.38 Lass family confumption ZoD 0.07 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 Nec volmsø tol - 0.03 0.11 0.20 0.26 0.28 0.33 0.39 0.49 0.62 0.85

n! VALUE AZ lkL 5,00o/TOM TAL - 150 550 1,000 1,300 1.400 1,650 1,950 2.450 3,100 4,250

Potatoes· Area ha - - - - 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Tjeld tom/ba - - - - 10.0 10.5, 11.0 11.5 12.0 12.5 13.0 Voluma tom - - - - 2.50 2.63 2.75 2.88 3.0 3.13 3.25 Leg production tm 10 to. - - - 0.25 0.26 0.28 0.29 0.30 0.31 0.33 Lego landlord'ø &hare 25Z to - - - - 0.63 0.66 0.69 0.72 0.75 0.78 0.81 Lese family consuptiom ton - - - 0.15 0.16 0.17 0.18 0.19 0.20 0.20 bet volum ton - - - - 1.47 1.55 1.61 1.69 1.76 1.Pn 1.91

NET VALD AT 2.000 Y/TOM TL - - - - 2.940 3.100 3.220 3,380 3,520 3.680 3,820

Meire IV Area • ha - - - - 0.25 0.25 0.25 0.25 0.25 0.25' 0.235 Tjeld tom/ha - - - - 1.60 1.80 2.00 2.20 2.40 2.60 2.80 Volum tom - - - - 0.40 0.45 0.50 0.55 0.60 0.65 0.70 Le prodution tax 10% toa - - - - 0.04 0.05 0.05 0.06 0.06 0.07 0.07 I.s landlord'o ahara 25Z tom - - - - 0.10 0.11 0.13 0.14 0.15 0.16 0.18 nec volum eom - - - - 0.26 0.29 0.32 0.35 0.39 0.42 0.45 Net value at YbL1.600/ton TIL - - - - 416 464 512 560 624 672 720 Stover yiaLd tom/ha - - . - 5.00 5.30 5.60 5.90 6.20 6.40 6.50 Stowar voluma tom/ha - - - - 1.25 1.32 1.40 1.48 1.55 1.60 1.63 mer stover value at YT200/M RRL - - - - 50 264 280 296 310 320 326

GROSS URN TIL - - - - 864 728 792 856 934 992 1,046

T~raL cOSS aU~ TIL 3.924 4,173 4,807 5.401 7.546 7,704 8.266 8.976 9,850 10,56 12,356 f Intereroppad hean with aorghum. mja og foll~o. y/0-10% and iarema~t of 102 ore ydarly up to year 5. year 6-55%, year 740X, year C7M, 7ear 9-8UZ. year* 10-20.100X.

2- Fmily con~umptiom ia not anumed. -79-

Table 7.5(b) (contlamed)

PRODUCTION PAITERM PXZ- .TWARS (IPUTES) UNIT PROJECT TEAR I TEAR 2 TEAR 3 TEAR 4 TEAR 5 YKAR 6 TEAR 7 TAR 8 TAR 9 10-20

Seed use k/ba 50 50 45 45 40 40 40 40 40 40 40 Actual seed used kg 75 75 68 68 40 40 40 40 40 40 40 Cost YR 1.6/kg T1. 135 135 122 122 72 72 72 72 72 72 72 Fertiiseir used I T1L 84 222 222 222 148 148 148 148 148 148 .148 TR 1.6kg a 40kg compound) TR I.4kg a 60kg rea ) be - TR. 148/ha ) Chemicals T 18/h from T/2 - - 27 27 18 18 18 18 18 18 18 Labor requirement 30md/ba -hired 3 md/h 10Z on threshing. harwesting TEL 270 270 270 270 180 180 160 280 180 180 180 -family 27mdlb all aspects at 60 Tiad TRL 219 627 641 641 418 418 418 418 418 418 operating cost; w/o family YRL 219 627 641 641 418 418 428 418 418 418 418 with family labor 13L 2.649 3.057 3.071 3.071 2.038 2,038 2,038 2,038 2,038 2.038 2.038

NET INCOE w/o FAMILY LABOR TNL 2.211 3.396 3.616 3.760 2.024 2.138 2.186 2.372 2.528 2.666 2.822

Sam Seed use 80kg/ba Actual seed used kg 12 24 36 48 52 52 56 60 68 so 100 Cost at 5 TR/kg TEL 60 120 180 240 260 260 280 300 340 400 500 Fartiliser used TR TR 1.6kS a 20kg compound ) na 1.4kg 20 kg urea ) r3 - 18 27 36 39 39 42 45 51 60 75 Wft0/ba Labor requirement 10 a YJL60 -family labor 101U Til. 90 180 270 360 390 390 420 450 510 600 750 Operation cost: vo family labor TEL 60 138 207 276 299 299 322 345 391 460 575 wich family lab;r WEL 150 31B 477 636 689 689 742 795 901 1.060. 1.325

NET INCOME w/o FAMILY LABOR TE. (-)60 12 323 84 1.001 1.101 1.328 1,605 2,059 2.640 3,675

Potatoes Ploughing at TR 900/he Tal - - - - 225 225 225 225 225 225 225 Seeds at 2.5 tonslba. seed costs at TR 3.0001ton TRL - - - - 1.875 1.875 1.875 1,875 1,875 1,875 1.875 Fertilizers at TR 180/ba Tal. - - - - 45 45 45 45 45 45 45 Chemicals at YR 30/ha RL 3 8 8 8 8 8 8 Labor requirements 6Omd/ha -hired at 60 TE (15me/ba) TX. - - - - 225 225 225 225 225 225 225 -family (45 md/ha) TRL - - - - 675 675. 675 675 675 675 675 Bagging cost TR 30/ton TAL - - - - 4 47 48 51 53 55 57 Transport cast TR 50/ton Tal - - - 74 78 81 85 88 92 96 Operation cost: w/o family labor YXL 2,496 2,503 2.507 2,514 2.519 2.525 2,531 w/family labor I3L 3,171 3.178 3.182 3.189 3.194 * 3.200 3.206

BE INCOME w/e FAMII.LLABOR TL - 444 597 713 866 1,001 1,155 1,289

Ploughies Tl 225 225 225 225 225 225 225 Seed use 45 kg/ba 45 40 40 40 40 40 40 At L.8 TY/ka TL - - - * 20 is i 13 - 18 18. 18 Fertilizers at YR 148/ba T,L - - - - 37 37 37 37 37 37 37 Chemicals at n 8/ha . TEiL - - -* - 5 5 5 5 5 5 5 labor requirements 30mdJha -ired 3d-10Z Tal - - - - 45 45 45 45 45 45 45 -family 27md-90 (TR 60md) TI. - - - - 405 405 405 405 405 405 405 operations cost: w/o family labor TIL - - - - 332 330 330 330 330 330 330 v/lamily labor 1al. - - - - 737 735 735 735 735 735 735

BET INCOME v/o FAMILY LABOR R. - - - - 532 398 462 526 604 662 716

TOIAL NE2 INCOME w/o FAMILY L.ABOR i,. 2.421 3.408 3.939 4,644 4.001 4.634 4,689 5.369 6.192 7.123 8.502 - -80-

Table 7.6(a) FARK MODEL 3, IRRIGATED (TAIZ/IBB) 1 ha rented, no draft animals (appraisal estimates)

PRODUCTION PATTERN PRE- (OUTPUT) UNIT PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4

Maize Area ha 1.8 1.8 1.8 1.1 0.7 Yield ton/ha 2.2 3.00 3.1 3.50 3.50 Volume ton 3.96 5.40 5.58 3.85 2.45 Less production tax 1OZ ton 0.396 0.54 0.558 0.385 0.245 Leas landlord's share 30Z ton 1.188 1.620 1.674 1.155. 0.735 Less family consumption (6 members) ton 1.140 1.140 1.200 1.320 1.320 Net volume ton 1.236 2.100 2.148 0.990 0.150 Net value at YR 1/kg YRL 1,236 2,100 2,148 990 150

Potatoes Area ha 0.1 0.i 0.1 0.35 0.35 Yield ton/ha 10 14 15 20 20 Volume ton 1 0.4 0.5 0.7 7 Less production tax 10% of volume ton 0.1 0.14 0.15 0.70 0.70 Less landlord's.hare 30% ton 0.30 0.42 0.45 21. 2.1 Less family consumption ton 0.15 0.15 0.15 0.15 0.15 Net volume ton 0.45 0.69 0.75 4.05 4.05 Net value at YRL 1.1 kg YRL 495 759 825 4,455 4,455

Onions Area ha 0.1 0.i 0.1 0.35 0.35 Yield ton/ha 10 14 15 20 20 Volume ton 1 1.4 1.5 7 7 Less production tax 101 ton 0.1 0.14 0.15 0.7 0.7 Less landlord's share 30% ton 0.3 0.42 0.45 2.1 2.1 Less family consumption ton 0.06 0.06 0.06 0.06 0.06 Net volume ton 0.54 0.78 0.84 4.14 4.14 Net value at YRLS 2 kg YRL 1.80. 1,560 1,680 8,280 8,280

Alfalfa Area ha - - - 0.1 0.1 Yield green fodder ton/ha - - - 4 *8 Less landlord's share 30% ton - - - 1.2 2.4 Net volume ton - - - 2.8 5.6 Net value at YR 0.2 kg YRL - - - 560 1,120

Bananas Area ha - - - - 0.2 Yield ton/ha - - - - 10 Volume ton - - - - 2 Less production tax 101 ton - - - - 0.2 Less landlord's share 301 ton - - - - 0.6 Less family consumption too - - - - 0.3 Net volume ton - - - - 0.9 Net value at YR 1/kg YRL - - - - 900

TOTAL MARKETABLE OUTPUT YRLS 2,811 4,419 4,653 14a285 14,905 -81-

Table 7.6(a) (continued)

PRODUCTION PATTERN PRE- (INPUTS) UNIT PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4

Maize Ploughing YR LS 150/ha YRL 270 270 270 165 105 Seeds 50kg/ha at YRL 1.5 kg YRL 135 135 135 82 52 Fertilizers YRL YRL - 401 401 373 237 Chemicals 18/ha YR1 - - 32 20 13 Hired labor 50/ha YRL 90 90 90 55 35 Bagging cost YRL 90 108 108 77 49 Transport YRL 12 21 21 - - Total inputs 597 1,025 1,057 772 491

Potatoes Ploughing 200/ha YRL 20 20 20 70 70 Seeds YRL 180 180 180 630 630 Fertilizers YRL - 35 35 186 186 Chemicals YRL - 3 3 10 10 Hired labor YRL 20 20 20 70 70 Bagging cost YRL 10 14 15 70 70 Transport YRL - - - 40 40 Total inputs YRL 230 272 273 1,076 1,076

Onions Ploughing YRL 20 20 20 70 70 Seeds YRL - - - 420 420 Fertilizers YRL - 35 35 186 186 Chemicals YRL - 3 3 10 10 Bagging cost YRL 10 14 15 70 70 Hired labor YRL 20 20 20 70 70 Transport YRL - - - 40 40 Total inputs YRL 50 92 93 866 866

Alfalfa Ploughing YRL - - - 20 - Seeds YRL - - - 90 - Fertilizers YRL - - - 29 12 Chemicals YRL - - - 2 2 Total inputs YRL - - - 141 14

Bananas Hole digging YRL - - - 100 - Plants YRL - - - 125 Planting days YRL - - - 60 - Fertilizers YRL - - - 63 126 Chemicals YRL - - - 3 9 Transport YRL - - - - 15 Total inputs YRL - - - 351 150 -82-

Table 7.6(b) FARM MODEL 3, IRRIGATED (TAIZ/IBB) 1 ha rented, no draft animals (actual obtained)

PRODUCTION PATTERN PRE- TEARS (OUTPUT) UNIT PROJECT TEAR 1 TEAR 2 YEAR 3 YEAR 4 YEAR 5 TEAR 6 YEAR 7 TEAR 8 YEAR 9 10-20

Sorghum Area ha 1.8 1.8 1.8 1.1 0.7 0.7 0.7 0.7 0.7 0.7 0.7 Yield tan/ha 2.0 2.1 2.2 2.3 2.5 2.7 2.9 3.1 3.3 3.6 3.6 Volume ton 3.60 3.78 3.96 2.53 1.75 1.89 2.03 2.17 2.31 2.52 2.52 Less production tax lO con 0.36 0.38 0.40 0.25 0.18 0.19 0.20 0.22 0.23 0.25 0.25 Less landlord's share 30% ton 1.08 1.13 1.19 0.76 0.53 0.57 0.61 0.65 0.69 0.76 0.76 Family consumption tan 1.14 1.14 1.20 1.32 1.32 1.50 1.50 1.60 1.60 1.70 1.70 Met volume ton 1.02 1.13 1.17 0.20 C-)0.28 (-)0.37 (-)0.28 (-)0.30 C-)0.21 (-)0.19 (-)0.19 met value at 1600 YRL/ton YRL 1,632 1,808 1.872 320 C-) 448 (-) 592 (-) 448 C-) 480 (-) 33(6 (-) 304 (-) 304 Stover yield ton/ha 6.0 6.1 6.2 6.3 6.5 6.7 6.9 7.1 7.3 7.5 7.5 Scaver volume ton 10.80 10.98 11.16 6.93 4.55 4.69 4.83 4.97 5.11 5.25 5.25 Met stover value at Y 200/toa YRL. 2.160 2,196 2.232 1,386 910 938 966 994 1,022 1,050 1.050

NBT VALUE (stover + grain) YRL 3,792 4,004 4.104 1,706 462 346 518 514 686 76 746

Potatoes Area ha 0.1 0.1 0.1 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 Yield ton/ha 10 10.5 11 11.5 12 13 14 15 16 18 20 Volume ton 1.0 1.05 1.1 4.03 0.20 4.55 4.90 5.25 5.60 6.30 7.0 Less production tax 10Z ton 0.10 0.11 0.11 0.40 0.42 0.46 0.49 0.53 0.56 0.63 0.7 Leas landlord's share 30% ton 0.30 0.33 0.33 1.20 1.26 1.38 1.47 1.59 1.68 1.59 2.1 Less family consumption ton 0.15 0.15 0.15 0.15 0.20 0.20 0.20 0.25 0.25 0.25 0.25 Net volume con 0.45 0.46 0.51 0.28 2.32 2.51 2.74 2.88 3.11 3.53 3.95

NET VALUE AT 2,000 YR/TON YRL 900 920 1,020 4,560 4,640 5.020 5,480 5,760 6,220 7.060 7,900

Opions Area ha 0.1 0.1 0.1 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 Yield tan/ha 10 14 15 20 20 22 22 24 24 25 25 Volume ton 1.0 1.4 1.5 7.0 7.0 7.70 7.70 8.40 8.40 8.7. 8.75 Leas production tax 101 ton 0.10 0.14 0.15 0.70 0.70 0.77 0.77 0.84 0.84 0.88 0.88 Less landlord's share 302 ton 0.30 0.42 0.45 2.10 2.10 2.31 2.31 2.52 2.52 2.64 2.66 Loas family consumption ton 0.06 0.06 *0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 met volume tan 0.54 0.78 0.84 4.14 4.14 4.56 4.56 4.98 4.98 5.17 5.17

YET VALUE YR 2.000/TON TRL 1,080 1,560 1,680 8,280 8,280 9,120 9,120 9,960 9,960 10,340 10,340

Alfalfa Area ha - - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Yield greenfodder ton/ha - - - 64 6, 68 71 74 77 79 80 Volume con - - - 6.40 6.60 6.80 7.10 7.40 7.70 7.90 8.00 Less landlord's share 30Z ton - - - 1.92 1.98 2.04 2.13 2.22 2.31 2.37 2.40 Met volume tan - - - 4.48 4.62 4.76 4.97 5.18 5.39 5.53 5.60

NET VALUE AT YR 500ToN Ill - - - 1,240 2,310 2,380 2,485 2,590 2,695 2,765 2,800

Banana Area ba - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Yield ton/ha - - - - 12.00 12.00 14.00 16.00 18.00 20.00 20.00 Volume ton - - - - 2.40 2.40 2.80 3.20 3.60 4.00 4.00 Leass production tax 101 con - - - 0.24 0.24 0.28 0.32 0.36 0.40 0.40 Leas landlord's share 30Z tan - - - - 0.72 0.72 0.84 0.96 1.08 1.20 1.20 Les family consumption ton - - - - 0.30 0.30 0.30 0.30 0.30 0.30 0.30 Net volume tan - - - - 0.14 1.14 1.38 1.62 1.86 2.10 2.10

NET VALUE YX 3,000/TON YRL - * 3,420 3,420 4.140 4,860 5,580 6,300 6,300 -83- Tale 7.6(b) Icaatiurd)

"EOIUCTI0U PATTEN PU- yr^Am L~EuIsTU> UNIT PIJCT YER 1 YXAR 2 TEA 3 YEAR 4 TEA 3 YXAN 6 YXAR 7 tMM 6 YEAI 9 10-20

Mais. Plaghang Ta 9um/ha TEL 1.620 1.620 1,620 990 630 630 630 630 630 630 630 kae use kg/ha 50 50 45 45 40 &0 40 40 40 40 d0 Sedcgt at I .8/kg TEL 162 162 146 89 50 y0 30 50 50 50 50 1ertiliar ufad TA 148/he TAL 101 266 163 104 106 106 106 106 106 104 104 Chemicaa at Te IS/ha Y/2 TML - - 32 20 13 13 13 13 13 13 13 Lalar requaremmt 30md -irad 3 .d/ha 101 TEL - 324 324 190 126 126 126 126 126 126 15 -taily 13.d/ha tE 60/ud TEL 2,916 2,916 2.916 1,782 1.134 1,136 1,134 1,134 1,134 1.134 1.134 Opratatg COt: via family TRL 1.883 2,372 2.388 1,460 923 923 923 923 923 923 923 with family talar TAL 4,799 5,288 5,306 3,242 2.057 2,07 2,057 2,057 2.057 2,057 2,057 E ICON Wo FAMILY LANON T~L 1,909 1.632 1,716 246 (-> 461 (-) 577 (-) 405 (-) 409 (-) 237 <-3 177 (-) 177 latatoau Plauhang TEL 900/ha TL 90 90 90 315 315 315 315 315 315 315 315 Seed urn ta/ha 2.0 2.0 2.0 2.0 . 2.5 2.5 2.5 2.5 2.5 2.3 2.5 äa~ comt at TE 300/tom TKL 600 600 600 2.100 2,625 2,625 2,625 2,623 2.625 2,625 2,625 Fortilixer 60kg copaud YP. 1.4 kg 60 kg urea Ta8moma TAL - 18 18 63 63 .63 63 63 63 63 63 ca.ica- g y30/ha TEL - 3 3 10 10 10 10 10 10 10 10 Labor requircmfnt: -laren 15 .d at 60 YR 252 VL 90 90 90 315 315 315 315 315 315 313 315 -7.L. 45md at 60 TR 75% TRIL. 270 270 270 945 965 963 945 945 945 , 945 965 Iagging cot TE 30/ts TEl 16 14 13 69 70 75 81 87 93 105 120 Tramnport TE 30/tom T&L 25 25 25 114 114 125 137 144 156 168 200 Oparatia cagt: mig family lar YRL 840 . 861 862 2.986 3.312 3,321 3.546 3,559 3.577 3.601 3,68 with family tlar TEL 1,110 1,131 1,132 3.931 4,457 4.473 4.491 4,506 4.522 4,546 4.593 mr NCUE Wo FAMILY LANM TRL 60 39 158 1,664 1,138 1,492 -1,934 2.201 2.643 3,439 4,232 Omiffim pleaghang at TE 900/ha. TEL 90 90 90 315 315 315 313 315 315 315 315 Sagda at TE 240/ha (8kg z 30Ta YRL 26 24 24 84 84 86 84 84 84 84 84 ertilizraatT YR180/h TKL - 18 18 63 63 63 63 63 63 63 63 Cheicala at Y 30/ha TEL - 3 3 10 10 10 10 10 10 10 10 Lakor reqirementa 60d/ha -hkred Ih5d. 6UTR/md 252 TRL 90 90 90 315 313 315 313 315 315 315 313 -tamill 45md,6f/md 752 TR 270 270 270 965 . 965 943 945 945 965 945 945 Bagging comt YR 30/ton TEL 16 21 26 124. 124 137 13? 250 150 155 135 Tramport coat TE S0tOn TEL 27 39 42 207 207 228 228 249 249 259 259 Operation coat: w/o family labor TEL 247 215 293 1.118 1,118 1,132 1,152 1.186 1.186 1.201 1,201 Wifamily labor YL 517 555 563 2,063 2.063 2,097 2,097 2,131 2,131 2,146 2,16

3ET UL Wo FAMILY LAWE TEL 833 1,275 1,387 7.162 7,162 7,968 7,968 8.774 8.774 9.139 9.139

Alfalfa - Plang -g TE 600/h TmL - - - 60 - - - - - 60 - ea.d J0kg/ha at 40 YR/kg TEL - - 120 - - - - - 120 - Secd cot TE 1.200/ha TRL - - - rertilizera at Y 152/ha TEL - - - 15 15 15 15 15 13 15 13 C.icala at..T 1S/ka TL - - - 2 2 2 2 2 2 2 . 2 Laebor requirmta 200md/ba -lired ma. needad -family 1002 at Y60/md TEL - - - 120 120 120 120 120 120 120 120 Transport T too/ta TEL - - - 448 462 476 497 318 339 353 560 Oparataons coat: W/o family labor TRL - - - 665 479 493 514 535 736 370 377 w/family labor m - - - 763 599 613 634 655 .856 ' 690 697

UT 1cME via FAMILY 1AMU~TRL - - - 1.595 1,831 1,887 1,971 2,055 1.939 2,195 2.223 Panama. Plughing YR 300/la TL - - - 60 ------hola dagging Y 3.000/ha for 2,500 hola YRL - - - 600 ------Planta 2,500/ha at Y 3 TEL - - - 1,500 ------Plaatang day. 6(md at R 60/mad T 3.600/ha TRL - - - 720 ------Vartilierg (60~60kg compamd, ura at Yt l/ba) TL. - - - 36 36 36 36 36 36 36 36 Chemicala at YR JO/ha EL - - 6 9 12 15 15 15 15 13 Lebor requarmmt 6U~d/ha at E 60/me -har~d 6d 10Z TRL - - - 72 72 73 72 72 72 72 72 -family 54d 901 YL - - - 648 648 648 648 648 668 648 648 Tranepurm YR 5U/to. TEL - - - - 57 57 69 81 93 105 105 Operatina cot: s/o famaly tlar TEL 2.996 174 177 192 204 216 228 228 Wtamaly labör TEL 3.642 822 828 840 852 864 876 876

DET lh~ME v/a FAMILY LAnuE TEL - - - <-) 2.994 3.246 3,243 3,948 4,656 5,364 6,072 6.072

U LAINLY IL TEL 2.812 2,966 3.261 7,673 12.906 l'.113 15,416 17,277 18,503 20,688 21,00 -84-

Table 7.7 (a) FARM MODEL 3b: LOW RAINFALL, RAINFED TO IRRIGATED FROM SPRING (TAIZ REGIC 1 ha rented, no draft animals (appraisal estimate)

PRE- PRODUCTION PATTER UNIT PROJECT YEAR 1 YEAR 2 YEAR 3 YEAR 4

Output

Sorghum Area ha 1 - - - - Volume kg 900 - - - - Less production tax (Zakat) kg 90 - - - - Less landlord's share at 25Z of volume kg 225 - - - - Less family consumption (six members) k& 912 - - - - Family grain deficit kg -312 - - - - Total value of family grain deficit at YR 1.2/kg YRL -3921/ - - - - Net value from farm model 3a: Maize TEL - 2,100 2,148 990 150 Potatoes YRL - 759 825 4,455 4,455 Onions TRL - 1,560 1,680 8,28C 8,280 Alfalfa TRL - - - 560 1,120 Bananas YRL - - - 900

TOTAL MARKETABLE OUTPUT YRL 3921/ 4,419 4,653 14,285 14,905

Inputs

Sorghum Ploughing YRL 150 - - - - Seeds 50kg/ha at YR1.2/kg YRL 60 - - - - Fertilizer YRL - - - - - Bags YR 20/ha YRL 20 - - - -

Total inputs, sorghum YEL 230 - - - -

From farm model 3a: Maize . TEL - 1,025 L,057 772 491 Potatoes TEL - 272 273 1,076 1,076 Onions YRL - 92 93 872 866 Alfalfa TEL - - - 141 14 Bananas TEL - - - 351 150

Cash expenses for annual repairs TEL - 50 50 50 50

TOTAL !NPUTS TEL 230 1,439 1,473 3,262 2,647

MET CASH SURPLUS TRL -622 2,983 3,180 11,023 12,258

NOTE: Cash expenses for canal lining are borne by the project. Labor for canal lining vill be supplied by all farmers.

I/ Farmer is obligpd to seek additional income outside the farm.

Source: Based on assumptions presented in Table 5. -85-

Table 7.7(b) FARM MODEL 3b: LOW RAINFALL, RAINFED TO IRRIGATED FROM SPRING (TAIZ REGION) 1 ha rented, no draft animals (actual obtained)

PRUPCTION PRTERU PRE- YEARS UNIT PROJECT YEAR 1 TEAR 2 YEAR 3 TEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 10-20

Sorghum Area ha 1 ------Yield tom/ha 0.7 Volume too 0.7 Production tax 10% can 0.07 Leas landlord's share 25Z ton 0.18 Family consumption ton 0.81 Net volume (grain) ton (-)0.36 ut value at 1600 TRL/ton IRL (-) 648 Straw ton 1.8 At TR 300/ton TR. 540

aD TOrAL OUTPUT YaX (-) 108 (grain + straw)!'

Potatoes Area be 0.1 0.1 0.1 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 Yield ton/ha 10 10.5 11 11.5 12 13 14 15 16 18 20 Volume ton 1.0 1.05 1.1 4.03 0.20 4.55 4.90 5.25 5.60 6.30 7.0 Less production tax 10 ton 0.10 0.11 0.11 0.40 0.42 0.46 0.49 0.53 0.56 0.63 0.7 Less landlord's share 30Z ton 0.30 0.33 0.33 1.20 1.26 1.38 1.47 1.59 1.68 1.89 2.1 Less family consumption ton 0.15 0.15 0.15 0.15 0.20 0.20 0.20 0.25 0.25 0.25 0.25 Net volume ton 0.45 0.46 0.51 0.28 2.32 2.51 2.74 2.88 3.11 3.53 3.95

MET VALUE AT 2.000 YR/T0N YRL 900 920 1,020 4.560 4,640 5.020 5,480 5.760 6,220 7.060 7,900

Met Value from Farm Model 3a Maize TRI. - 4,004 4.104 1,706 462 346 518 514 o86 746 746 Potatoe &L. - 920 1.020 4.560 4.640 5.020 5.450 5.760 6,220 7.060 7,900 onion TEL - 1,560 1,680 8,220 8.280 9.120 9,120 9.960 9.960 10,340 10.340 Alfalfa TRL - - . - 2.240 2,310 2.380 2,485 2,590 2.695 2.705 2,800 Banana TIL - - - - 3,420 3.420 4,140 4.860 5.580 6,300 6.300

TOTAL MARKETABLE OUTPUT TR. C-) 108 6,484 6,804 16,726 19.112 20,286 21,713 23,t44 25.141 27.151 28,086

1nputes Sorghum (from Farm Model 1) Operation cost v/o F.L. TEL 221 ------w/F.L. TRL 1.301 ------Maise (Model 3a) Operation cost Wo F.L. 11L - 2,372 2,388 1 f46f 923 923 923 923 923 923 923 v/F.L. TRL - 5,288 5,304 3.242 2.057 2,057 2.057 2.057 2,057 2,057 2,057 Potato Operation cost v/o F.L. TRI. - 861 862 2,986 3.512 3,528 3,546 3.559 3,577 3,601 3,648 w/F.L. TR. - 1,131 1,132 3,931 4,457 4,473 4,491 4,504 4,522 4,546 4,593 Onion Operation cost v/a F.L. Y&L - 285 293 1,118 1,118 1,122 1.152 1,186 1,186 1.201 1,201 . v/F.L. TRL - 555 563 2,063 2,063 2.097 2.097 2.131 2.131 2,146 2,146 Alfalfa Operation cost v/o F.L. 1RL - - - 645 479 493 514 535 736 570 577 w/F.L. TR. - - - 765 599 613 634 655 856 690 697 Baana Operation cost v/o F.L. 11L - - - 2,994 174 177 192 204 216 228 228 w/F.L. 1RI. - - - 3,642 822 828 840 852 864 876 876 Cash expenses fram annual repairs YEL - 200 200 200 200 200 200 200 200 200 200

TOTAL IMPUTS w/o FAMILY LABOR TRL 221 3,715 3.743 9,403 6,406 6,473 6,527 6.607 6.838 6,723 6,777 w/FAMILY LABOR Tp. 1.301 7.174 7.199 13,643 10,198 10.268 10.319 10,399 10,630 10,515 10.569 TOTAL MET INCOME w/o FAMILY LABOR 1RL (-) 329 2,766 3,061 7,323 12,706 13,813 15,186 17.077 18.303 20,428 21,309

1? Farmer is obliged to seek additlonal income outside the far. . -86- Table 7.8(a) FARM MODEL 3c: RAINFED TO PUMP IRRIGATED (TAIZ REGION) 1 ha, 100% owned, no draft animals (appraisal estimate)

PRE- TBARS PRODUCTION PATZN UNIT PROJCT TEAR 1 TEAR 2 TEAR 3 TEAR 4 & 6

output

So6rghum Area ha 1 1 - - - - Volume ton 900 900 - - - - Less production tax (Eakat) ks 90 90 - - - - Less family consumption (six member@) - tan 810 810 - - - met volume kg 0 0 - - * - Met value at TRL 1.2/kg TRL 0 0 - - - -

MaiLe Met value at YR 1/kg with landlord's share added TEL - - 3,720 3,822 2,145 885

Potatoes not value at YR 1.1/kg with landlord's share added TEL - - 1,221 1.320 6,765 6,765

Onions Net value at TR 2/kg with landlord's share added TEL - - 2,400 2,580 12,480 12,480

Alfalfa Net value at TR 0.2/kg with landlord's share a4ded YRL - - - - 800 1,600

sansas Net value at TR 1/kg with landlord's share added TEL - - - - - 1.500

TOTAL MARKEIABLE OUTPUT TRL - - 7.341 7,722 22,190 23.230

Inputs

Total 1 ha Sorghum (from Model 1) TRL 130 130 - - - -

Total 1 he irrigated (from Model 3a) TEL - - 1.389 1,423 3,206 2,597

Capital investment/

Wall construction YEL - 3,750 *- - - PUmp TRL - 2,000 - - - - Engine TRL - 1,750 - - - - Piping and foundations YRL - 1,250 * - * -

Operation (8 montha 6 maintenancel/

Puel, oil, grasa TEL - 1.200 1,200 1,200 1,200 1,200 Operator TEL - 400 4600 400 400 400 Repair@ TIL - 125 125 125 125 125

TOTAL CASE OUTIMH * TAL -130 -10,605 3,114 3,168 4,931 4,322

NET CAh SURPLUS TEL -130 -10,605 4,277 4,574 17,259 18,908

/ our farmers share one pump, therefore 1/6 of total investment, operations and maintenance costs is charged to each farmer. Pump life - 10 years; engine life * 6 years. 2/ From year 5 onward, output figures do not charge.

Source% Based on assumptions presented in Table 5. -87- Table 7.8(b) FARM MDDEL 3c: RAINFED TO PUMP IRRIGATED (TAIZ REGION) 1 ha, 100% owned, no draft animals (actual obtained)

9M;T K 1NOVJC1KA IA 2 TZAR 3 YZAR 4 TZAR 5 TZA3 6 13M1R0 18 1TR 9 15-20 Oset

Area he 1 1 yield (grain) to/ha 0.7 0.7 Velume tao 0.7 0.7 Lze production tax 10 too 0.07 0.07 Le.family consumption to 0.61 0.81 bet volume tom (-)0.l1 (-)0.18 net output (grain at Ya 1.600/to) VIL (-3 324 C-) 326 Straw toe 1.8 L.1 At VK 3tk!com 131. 540 540

. RANDTOTAL OUTPUT Tl. 216 216 (grain * scrw) T

ht value at TR 1.600/toe with landlord's share TL - - 6.008 2.922 1,310 1,258 .1,494 1.554 1,790 1.962 1.96I

Potatoes Net value at TI 2.000/ton with landlord'sareOha L - - 1.680 6,960 7.160 7,780 8.420 3,940 9,56D 10.560 12.100 Osioa Nat value at TR 2,000/too with madlord's share TML - - 2.50 12,480 12.450 13,740 13.740 15.000 15,000 15,620 15,620

Alfalfa het value at TX 500/ton with laodlord's shre TL - - - 3.200 3.300 3.400 3.550 3.700 3.850 3.890 4.000 "anamas set value at YX 3.000/ton T3L - - - - 5.80 5.380 6,660 7,740 I.820 9.900 9.900

TOYAL HARKETABLE OUTPUT MAL 216 216 10.268 25,562 29.830 31,758 33.864 36.934 39.040 42.212 42.582

Inputs

Total 1 he sorghum (from Nodal 1) - w/o fauily labor TAL 221 226 * ------w/family labor 131. 1.301 1.306 - * - - - - - * -

Tetal 1 he irrigated (from Nodel 3a, 3b) . - We family labor TEL - - 3.743 1.403 6,406 6.473 6.527 6.607 6,838 6.723 6.777 - v/family labor TEL - - 7.199 13,B43 10.198 10.268 10.319 10.399 10.630 10.515 10.569

Capital investmenti/

Well construction at 40.000 TR for 40/m dept TRL - - 5.000 - * ------Pump at 16,000 TR TRL - - 2,000 ------2,0002/ Engine at TR 24.000 TRL - - 3,000 - - -. - - 3,00011 - Piping and foundation at TR 12.000 TRL - - 1.300 ------LO Itotal capital investment TEL 11,500 3.000 3.500 Operatio (b months) & maintenance

Fuel. oil, grease TEL - - 1,500 1,5 o003 1,300 1.0 1.300 1,500 1,500 1,500 Operator (TR SOld) TEL - - 1.500 1.500 1.30D 1.5 1,500 1.5 500 1.500 1.500 aepairs VIL - - 200 500 300 500 300 300 300 3e0 300

oAL LABO~TEL 221 226 18,443 12,903 1,906 9,973 10,027 10.107 13,038 10.223 13,677

KEY CASMSURPLUS TRL (-) 5 (-) 10 (-)8.175 12,09 19.924 21,783 23.637 26,37 26,827 26.002 29.905

I/ Eght farmers share one pump, therefore 1/8 of total investment, operation and maintenmace coets is charged to each farmer. .ump late - 10 years. engane life - 6 years. 2i Pump has to be chaged true year 11. 3/ Enane has to be chan_rd from year a. 6/ Piping and foundation has to be replaced from year 11. -88-

cases the farmers who adopted extension advice equalled or exceeded the planned income (Tables 7.4-7.8). To make comparisons between the appraisal farm models with those at the end of the project period meaningful, the prices prevailing in 1981 were used for both sets. The main differences between the appraisal (planned) and present situation (actual) are in yields, prices, labor use and home consumption. In all farm models the yields achieved by farmers who have accepted improved seed, fertilizer, pesticides and better farm practices are higher than those planned at appraisal. Prices in 1981 were much higher than anticipated at appraisal. The sharpest rise was in labor cost. Instead of YR 5 per day for hired labor, the actual cost rose to 45 YR per day. As a result, farmers with average or below average holdings use more family labor and hire sparingly. This has made a big difference in anticipated input costs. Some difference has also been made by the use of lesser amounts of seed for sorghum and maize cultivation as a result of extension advice. Instead of 50 kg/ha, the better farmers now use 40 kg/ha.

In all cases, home consumption of cereals, beans, potatoes and onions are higher than planned at appraisal. This should be taken into account when assessing the full benefit derived from extension work. Model 1 farmers are earning 24% more net cash income than was planned, and eating slightly better. Model 2 farmers are much better off than anticipated, with net cash income 90% above what was planned. They are also able to eat more sorghum, beans and potatoes. A big difference with the pre-project situation is that now they have 183% cropping intensity. Farmers with irrigation facilities are, of course, doing very well. Model 3a farmers obtain 67% more cash income than was planned and also consume more maize, potatoes and onion. Their earnings would be much higher but for the payment of high rent for land. It should be noted that alfalfa has not been accepted by the farmers into their cropping pat .ern. Further work is required to adjust this farm model to the present demand and supply situation.

Under Model 3b, the farmers are earning 70% more than was planned at appraisal. As in Model 3a, their earnings could be much higher if the land was owned rather than rented. As with other models, the value of incremental consumption under actual situation should be added to the cash income to derive the full benefits from the project.

Under farm Model 3c, the high cost of pump irrigation reduces the potential cash income. During the project period, actual cost of an irrigation tube well went up from YR 140,000 in year one to YR 300,000 in year six. At appraisaLl, the cost was estimated at only YR 35,000. Despite this, the Model 3c farmer earns 39% more than planned. If he had to rent land, this would, of course, be greatly reduced.

In every case, the farmers are earning very much more, in real terms, than before the project. It may be noted that the prices and costs for the pre-project situation are of 1981. Without the production possibilities brought about by the project, many of the farmers renting land would have been forced off the land, because of the fourteen-fold increase in the cost of hiring plough, bullocks and labor. -89-

VIII. EODNOINIC ANALYSIS

8.1.A. Direct Benefits

The direct benefits of the project are:

a. increased crop production that has raised the incomes and nutritional standards of at least 50,000 farm families covering an area of approximately 30,000 ha in the Southern Uplands;

b. increased numbers of cattle and poultry due to veterinary services which helped in increasing incomes and nutritional standards;

c. increased labor produ:tivity arising from a decrease in waterborne diseases in 251 villages that were provided with water supply systems;

d. increased regional employment arising from the civil works component and more intensive farm cultivation.

8.2.B. Indirect Benefits

The indirect benefits of the project are:

a. greater participation of women in the labor force and consequent greater willingness to attend home economics classes;

b. creation of viable institutions and manpower trained in the fields of agricultural extension and credit;

c. creation of manpower trained in groundwater extraction and -7illage water supply systems;

d. greater willingness to accept extension advice after seeing the visible benefits of the village water supply systems;

e. increased availability of transport due to greater volumes being marketed;

f. greater willingness to accept modern techniques due to the successes of the campaigns to control armyworm and rinderpest outbreaks-this reflects itself also in the attitudes of school children;

g. improved health in 251 villages due to the availability of clean water.

8.3 The economic rate of return on the project's directly productive components is 15% with family labor cost shadow priced to zero. However, there was a much higher proportion of hired labor estimated at appraisal than -90-

actually obtained. The appraisal rate of return for all costs (except family labor) was 19%. The very favorable actual rate of return is primarily due to high yield response to even relatively small doses of fertilizer, the unexpected growth of pump irrigation and the greater shift to vegetable and fruit cultivation. Table 8.1 CROP AREA, YIELD, PRODUCTION AND VALUE - WITH PROJECT (using 1981 economic prices)

GROSS VALUE TOTAL COST NET VALU0 AREA YIELD PRODUCTION Of PRODUCTION OF PRODUCTION OF PRODUCTION c (000 H.A.) (T/HeA.) (000 TON) ('000 VR) (000 Y.1.) (000 Y.R.) sorghual Low Rainfall 9.3 grain 0.8 7.4 9,620 11,011 4,189 stover 2.0 18.6 5.580 High Rainfall 14.0 grain 2.1 29.4 38,220 16,452 49,168 stover 7.0 98.0 29,400 Haies High Rainfall 2.7 grain 2.0 5.4 7,560 3,583 8,507 scover 5.6 15.1 4,S30 Irrigated 2.3 grain 2.9 6.7 9,380 3,031 11,119 staover 6.9 15.9 4,770 Pulseas (intercropping) (Beans) 16.7 1.0 16.7 65,130 7,983 57,147 %0 Potatosesa High Rainfall 0.7 11.0 7.7 12,012 6,888 5,124 I-1 Irrigated 0.3 14.0 4.2 6,552 2,979 3,573 Vegetable (onions) 0.3 22.0 6.6 15,444 873 14,571 Fruits (banana) 0.3 14.0 4.2 9,828 251 9,577 Alfalfa 0.2 71.0 14.2 5,538 393 5,145

TOTAL 46.8 - - 223,564 55,444 168,120 Table 8.2

INCREMENTAL COSTS 1/ AND BENEFITS (in million YR)

BLDG 6 VEH. & VWS AGR. PROD. TOTAL FURN. EQUIP. SURD LDA IRRIG. O&M SALARIES TRAINING MISC. COST BENEFIT

1 0.80 0.80 - - - 0.80 5.02 - - 0.15 - 2 2.20 1.80 3.13 0.40 - 1.49 7.65 0.23 - 1.55 - 3 2.22 1.90 9.50 2.86 - 1.98 9.73 0.58 - 3.33 1.21 4 1.30 1.40 8.30 2.50 2.57 1.98 8.98 0.61 0.06 5.11 3.40 5 2.55 0.36 5.82 1.75 3.39 4.66 9.80 0.23 0.17 7.13 8.59 6 6.03 0.66 4.50 0.25 0.57 1.34 12.24 0.24 0.02 8.10 12.82 7 - 0.40 - 0.80 - 0.93 8.70 - - 8.70 22.14 8 - 1.03 - 0.80 - 0.93 8.70 - - 9.10 30.49 9 - 1.25 - 0.80 - 0.93 8.70 - - 8.30 39.64 10 - 1.06 - 0.80 - 0.93 8.70 - - 9.10 49.28 11 - 0.31 - 0.80 - 0.93 8.70 - - 9.90 59.75 12 - 0.40 - 0.80 - 0.93 8.70 - - 10.20 66.71 13 - 1.03 - 0.80 - 0.93 8.70 - - 10.30 72.69 14 - 1.25 - 0.80 0.04 0.93 8.70 - - 11.00 76.20 15 - 1.06 - 0.80 0.02 0.93 8.70 - - 11.30 77.69 16 - 0.31 - 0.80 - 0.93 8.70 - - 11.90 78.77 17 - 0.40 - 0.80 - 0.93 8.70 - - 11.90 79.70 18 - 1.03 - 0.80 - 0.93 8.70 - - 12.00 80.38 19 - 1.25 - 0.80 - 0.93 8.70 - - 12.30 80.60 20 - 1.06 - 0.80 - 0.93 8.70 - - 12.30 80.60

1/ Cost figures are adjusted 152 per annum on all components (during the period 1976-81) to reflect inflation and are expressed in 1981 values. -93-

IX. CONSTRAINTS AND ISSUES

1. Managerial

a. The project was designed to have an expatriate Project Manager and a local Co-Manager. This arrangement was found to be unworkable, with overlap of jurisdiction, many misunderstandings and the deepening of the division between expatriate and local staff. Moreover, since the Project Manager was initially an expatriate, the project was looked upon as foreign managed, rather than as an integral part of the Ministry of Agriculture. This led to restrictions on the autonomy of the unit, which posed a serious threat to the continued ability of the project to operate efficiently and with flexibility.

Since the management of the project was seriously jeopardized, the Government and the financing agencies agreed that the National Director would be solely responsible for the project. Therefore, in the middle of 1980. a National Director was given full responsibility and authority to lead the project, and the post of Co-Director was abolished. This brought about a welcome change in coordination wit1 ia the project and has not been an issue since then.

b. There was considerable difficulty in recruiting and retaining counterpart staff because of a lack of qualified candidates and very strong competition with other entities. This problem persisted until the very end of Phase I (and indeed continues in Phase II) because of the unattractive salary levels. This was commented upon in the Preparation Mission Report for SURDP II (March 1979) which was in a way a mid-term review of Phase I. Some means of paying allowances would have attracted more staff.

c. Delay of nearly two years in the arrival of the Administrative and Financial Officer led to an accummulation of serious accounting and administrative problems at the initiation of the project. Uhen there is such a key post in *roject, the physical presence of the person in the project could be made a condition of effectiveness.

d. During the first four years of the project there was no methodical monitoring and evaluation of the projects' field programmes. A Monitoring and Evaluation section was set up in 1980 and this has streamlined the reporting system and has also carried out a preliminary farm survey. However, the lack of internal evaluation through much of the project period did hamper the management.

e. The project has prepared draft internal administrative regulations which define the responsibilities and authority of the project Manager and responsibilities vested with various divisions of the project. Conditions of service have been defined and clarified therein. Sufficient number of copies of the draft regulations have been sent to the Ministry of Agriculture and Fisheries for review and approval, but such approval has not been obtained as yet. -94-

2. Technical

a. The non-availability of local contractors with the capability of carrying out the necessary well drilling and civil works was a serious constraint for several years. The project had to assist them in various manners to achieve the set targets. In course of time many local contractors acquired sufficient expertise to be able to deliver on time. At the same time, the project management got to know the facilities and expertuoe available to each contractor and thus was in a better position to pre-qualify them. By the last year of the project, this was no longer a constraint.

b. Due to the start-up difficulties the project was not able to integrate the workings of its various sections toward a common goal. Each section worked fairly independently and there was the lack of an integrated approach toward rural development. This was partly due to the manner in which the project was conceived during preparation and appraisal. The preparation mission report on SURDP II did comment on this (annex 4, page 6) and urged greater interdepartmental collaboration. The project could have increased its impact by avolving an integrated approach.

c. The appraisal and the review by SURDP II preparation mission envisaged greater attention to the mapping unit. Maps are not available to the extension department and much of the spatial aspects of field work is based on guesstimates. The output of the mapping unit necds t0lbe increased.

d. There is a lack of information on soils. Though extension work was done on as much as 30,000 ha of farmlandjknowledge of the soils is very limited. Development to full potential would require more accurate extension advice based on better knowledge of the soils. A semi-detailed soil survey would assist future extension work.

3. Financial

a. The most serious financial constraint for the project was the limited size of its imprest account. Although no provision was made for an imprest account in the design of the project, the Abu Dhabi Fund did advance a sum of US$ 100,000 to improve the project's liquidity. Throughout the project period, reimbursement of expenses took a long time and there was the constant worrying problem of liquidity. Since average quarterly investment level was about US$ 500,000, the size of the imprest account was clearly inadequate. This problem was not satisfactorily solved, and in fact, continues in Phase II.

b. The unforeseen inflation during the early years of the project made the original allocations quite inadequate. Fortunately, the allocation for feeder roads could be transferred to the highly successful village water supply component. Even then, most of the rural works were limited by funds. The reallocation of project funds between categories was agreed to only in 1980, and this led to substantial progress in the last two years of the project. -95-

4. Procedural

In the first four years of the project there were increasing restrictions on the autonomy of the Project Unit in the absence of a clear definition of the role of SURDU within the Ministry of Agriculture. As a result, approval of the release of Government funds for the project were often several months overdue, and an excessive amount of senior management time had to be spent in Sanaa. After the appointment of a national to the post of Project Manager, the situation improved. His efforts to reach an understanding with the Ministry of Agriculture, the Central Planning Organization and the Ministry of Finance were successful, and in the last two years of the project the restrictions were eased.

5. Sociopolitical

a. The present system of land tenure is not conducive to agricultural development. About one-fourth of the farmers in the project area are tenants who have to give up half their produce just for land rent. Unless such high rents are reduced, agricultural development will remain very limited on these farms.

b. There are many disputes regarding ownership of land, since sale of land is often made verbally. Even where sales were made by ordinary registration (Baseerah), the absence of an office of Land registration led to dispute between successors after the death of the cultivator. Considerable land is apparently left fallow because of these disputes. An office of Land Registration was finally established in 1982, and will possibly ease this problem during Phase II.

6. Institutional

a. During the first few years of the project, the LDAs and VDCs did not collaborate closely with SURDU. There was, in fact, no formal link between them. However, at field level close collaboration did develop with the project personnel. The situation again improved after the appointment of a national as Project Manager, but the involvement of the LDAs and VDCs remained limited in the absence of a formal linkage with them, and integration of the project components.

b. At appraisal it was expected that SURDU's relations with other agencies would be the responsibility of a coordinating committee under the chairmanship of the Minister of Agriculture. Though this committee was set up, it never met. The feeling within the project and the Ministry was that such a high-level committee was not required for coordination with other agencies. Most issues were resolved at the technical and local levels. The one area where further coordination would have led to better results was the link between SURDU and CARS. The idea of SURDU-CARS technical committee, especially as regards extension work, did not develop into working arrangements. -96-

7. Marketing

Marketing of agricultural products has not been a constraint during the project period. However, toward the end of the project, it could be anticipated that marketing of vegetables and fruit, especially the former, would become a problem shortly. Since 1981, efforts are being made to develop marketing cooperatives. This aspect needs greater attention in the future.

8. Environmental

The works carried out by the project have been generally beneficial to the environment. Rural health conditions have improved and will continue to do so. The one area of concern is soil erosion. Afforestation was a small component of the project. Though this component was fulfilled, there was no systematic effort at either watershed or village afforestation. Despite 500 to 1200 am rainfall over most of the project area, the hill slopes are virtually bare. Due to the high price of firewood even the small amounts of tree cover are being cut down rapidly. Wind and water erosion is considerable and there is the ever-present danger of desertification. Afforestation should be an integral and important part of any future project.

9. Groundwater Abstraction

W%rk on groundwater abstraction has gone on without any proper survey of groundwater resources. Wells have been drilled not only by the project, but also by LDAs for village water supply and by farmers for irrigation. No drilling logs are available. There have been reports of aquifer mining in the Yarim plain. There is no restriction on abstraction and users in the upper reaches of an aquifer can be affecied by new developments lower down. As groundwater development proceeds there may be serious recharge problems and conflict between users. Though Phase I did not come up against any such problems there has to be a more systematic approach in the future. Further development should be properly monitored by a hydrogeologist.

10. Cost Recovery

Cost recovery has been through the Zakat system, and repayment of ACF/ACB loans. The recovery rates for the loans have been over 76%, and there has been no need to write off any loan. In view of the low standard of living of the farm families and the large social component the recovery of project costs has been at a reasonable rate, Table 5.14 shows amount due, amounts recovered and recovery rates to each type of loan.

I -97-

X. CDNCLUSIONS

Phase I of the Southern Uplands Rural Development Project had set a number of targets to achieve in various fields. Some of these it did not fully achieve due to unforeseen price escalation or unanticipated administrative or institutional problems. On the other hand, some of the more significant achievements far exceeded the set targets. In the area covered, production increment and the number of beneficiaries of the WS system, the project has been a success.

Given the results achieved to date, the project will have an internal rate of return of 15% in its 20-year life, provided the extension service continues to be strengthened. Most of the direct benefits of the project are derived from crop production increases, and therefore it is the work of the extension wing which enables the project to provide social services and still be an economically viable proposition. To achieve full benefits from the project agricultural research and extension service must continue their work, not only with the farmers already reached but also those who are not yet using improved inputs.

The spread of irrigation has been impressive, but there is the danger of mining aquifers, and conflicts over water rights. The future success of the project requires more systematic work on groundwater hydrology.

The last year of Phase I has overlapped the first year of Phase II. At the time of the formulation and appraisal of Phase II, the general conclusion about Phase I was that it had been a success. This evaluation shows that the project has had greater success than anticipated particularly due to the achievements of the last two years of the projects. The task now is to continue the work that has been done in the Phase I area and dovetail it with the work being done in the Second Southern Uplands Rural Development Project. -98-

ANNEX 1

NURBER OF VILLAGES COVERED BY SURDP I

Province Extension Block Center Number of Villages

Taiz Taiz 192 Turba 152 Al Barh 168

Subtotal 513

Ibb Ibb 297 Yarim 229 Odain 41 Qaida 41

Subtotal 602

TOTAL 1115

Source: Registration of the names of villages, Nahyas and Ozlas covered by SURDP I activities till the end of 1981; Monitoring and Evaluation section, SURDU, Taiz. -99-

ANNEX 2

SUMMARY OF THE FARM SURVEY CONDUCTED BY SURDP TO ASCERTAIN THE IMPACT OF PROJECT ACTIVITIES DURING 1976-1981

The farm survey conducted in October 1981 covered 400 agricultural holdings divided into 150 holdings in Taiz and Ibb. These holdings were selected from 43 villages in Taiz and 51 villages in Ibb. The method of survey was by questionnaires filled in by interview. The following are the main results of the farm survey.

1. The percentage of farmers that increased their production:

CROP PERCENTAGE OF FARMERS

Sorghum 27 Maize 9.5 W%eat 2 Barley 0 Tomatoes 4 Potatoes 10 Grapes 1 Coffee 2

2. The percentage of farmers that increased or decreased their livestock:

KIND OF ANIMAL PERCENTAGE OF FARMERS

Sheep 0.5 Goat - 4.5 Cattle - 6.5 Donkey - 3 Poultry - 3.5

3. a. The percentage of farmers that benefited from ACB services - 9%

b. The percentage of farmers suffering from problems with ACB - 23%

4. The percentage of farmers who utilized agricultural inputs:

KIND OF INPUT PERCENTAGE OF USERS

Fertilizer 61.5 Pesticides 61 Seedlings 9 Certified seeds 21 Agricultural machinery 2.5 -100-

ANNEX 2 page 2

5. a. The percentage of farm facilities that benefited from the home economics program - 3%

b. 7he percentage of farmers who wanted to send their womenfolk to home economic centers - 46.5

6. The percentage of farmers that benefited from extension programs;

Demonstration fields 30% Training courses 22.5% Farmers meetings 50%

7. The percentage of farmers who benefited from water supply schemes - 17%

8. The percentage of farmers who utilized concentrated fodder - 2.5%

9. The percentage of farmers who benefited from veterinary services - 12.5% -101-

ANNEX 3

ECWA SIUDY SUMMARY RESULTS

Summary results of the study by the Economic Commission for West Asia (ECWA) on land tenure and the rules of sharing lands in the Southern Uplands of YAR in July 1980.

1. Agricultural ownership in the Uplands area and the percentage of each kind.

Kind Percentage of the Total Area

A. Complete ownership 65 B. Partial Ownership 14 C. Complete Tenency 5 D. Partial Tenancy 10

2. Kinds of renter of lands and percentage of each.

Kind Percentage

A. Farmers 44 B. Waqf 24 C. Sheikhs 16 D. Government employees 6 E. Government 6 F. Merchants 5

3. Reasons for renting lands.

A. Shortage of land labors 39 B. Scattered lands 30 C. Work in non-agricultural fields 12 D. Extra space of lands 11 E. Need for money 8

4. Means of making rent contracts.

A. Verbal rent 9 B. Requested rent 60 C. Mixed rent 31 -102-

ANNEX 3 page 2

5. Kinds of shared contracts.

The outlet is divided between the owner and the investor of the land after deduction of Zakat as follows:

Non-Irrigated Irrigated by Springs Irrigated by Tube Wells Investor Owner Investor Owner Investor Owner

50% 50% 50% 50% 50% 50% 66% 34% 66% 34% 75% 25% 80% 20%

The production cost is fully paid by the investor, and the owner provides only the land in the case of non-irrigated or spring irrigated land. On land irrigated by tube wells, the cash variable cost is shared equally by both, the investor and the owner while the non-variable cost is paid by the investor only.

6. Reasons for renting land.

Percentage of Tenants

A. Without own cultivable land 50 B. Increasing farm to economic size 18 C. Investment of surplus cash 14 D. Non-agriculturists wanting additional income 9 E. Utilization of nearby fallow fields 9

7. The average percentage of inputs to output per ha, according to irrigation system and tenue sharing.

Non-Irrigated Irrigated Springs Irrigated by Pipes Wells

Owner 51.1% 57.5% 48.9% Renter 48.5% 52.7% 45.2%

TOTAL 49.8% 55.1% 47.1%

8. Most land owners in Uplands area are working full time on their own land.

9. The main problems for investments in agriculture area:

A. Shortage of manual labor and its high cost. B. Shortage of drinking and irrigation water. -103-

ANNEX 3 page 3

C. Shortage of insecticides. D. Scattered parcels of agricultural land. E. Depletion of fertility due to absence of rotation. F. High rent.

10. The recommendations of the study were as follows:

a. To establish a multipurpose and specialized agricultural cooperations in order to improve agricultural production and provide agricultural resources under supervision by the Ministry of Agriculture and Fisheries, with the coordination of the local development associations and the Agricultural Credit Bank.

b. To establish a central department for land registration.

c. to ammend the Agricultural Credit Bank's system to serve rural farmers.

d. To cancel the system of verbal rent.

e. To support agricultural establishments with qualified technical cadre.

f. To increase the number of agricultural centers.

g. To replace present local varieties with improved varieties through the work of the agricultural Research Center.

h. To eliminate the Plantation of Qaat, which consumes 50Z to 75% of the farmers' income.

i. To control the importation of crops and agricultural products which are locally produced. -104-

ANNEX 4

SURDU I CAT 1-A CONTRACTS AWARDED

VILLAGE WATER SUPPLY - CIVIL WORKS/TAIZ GOVERNORATE

S. No. Scheme Contractor Amount in Y.R.

1. Misrakh Lutif Ali Abdulla 229,210 2. Majdah " 149,896 3. Al Ramadah Jaafar Al Mobdar 123.390 4. Al Hussain Abdul Tavab Abdullah 129.980 5. Mogar Bani Omer Jaafar Al Mohdar 132,162 6. Sharab Al Rona " 132,010 7. Dugmul Gurab Mohamed Abdo Shamsan 97,720 8. Al Azaiz " 497,522 9. Al Nashama Baggash Raider 155,411 10. Al Sinah Ahmed Abdullah 586,807 11. Yufrus Baggash Raider 391,136 12. Al Amakir ) 13. Al Amaqi ) Jaafar Al Mohdar 553,975 14. Al Manzil ) 15. Mamsa Ahmed Qaid 1,033,370 16. Al Zavaqir Qasim Ahmed Al Haj 535,500 17. Al Ahad Lutf Ali Abdulla 236,257 18. Qadas Mohamed Abdo Shamsan 521,551 19. Al Janad Abdul Tavab Abdulla 287,620 20. Al Wajad Mohamed Moqbil Abdulla 221,205 21. Al Borehi Lutf Ali Abdulla 160,563 22. Al Mikhlaf Hassan Aglan 128,185 23. Al Garaneh Abdul Tawab Abdulla 223,945 24. Al Noveiha Jaffar Al Mohdar 154,120 25. Mosta Bani Omer Mohamed Moqbil Abdulla 132,153 26. Al Massaina Mohamed Mokred 93,660 27. Al Aalom Ismail Shamsan 480,000 28. Al Zailai Ahmed Al Sobari 94,603 29. Haifan Mohamed Abdo Shamsan 357,620 30. Dubhan 521,891 31. Sharjab 521,891 32. Bani Gazi 521,892 33. Masagid Adeem Abdul Rageeb Saeed 175,042 34. Adeem Al Hadarim Abdulla Ahmed 193,820 35. Dub Al Kharig Farooq Abdul Razzak 237,600 36. Al Ahkoom Mohamed Shaif Kaleeb 123,269

10,135,316*

* Amounts indicated as reflected in original contracts discrepancies are due to cost escalation. -105-

ANNEX 4 page 2

SURDU I CAT 1-C

IRRIGATION AND LAND PROTECTION

S.No. Location Contractor Amount Y.R.

1. 5 meteorological stations Lutf Ali Abdulla 20,000 2. 3 " " Jaafar Al Mohdar 12,000 3. Land Protection at Aussaifara Amin Saeed Saggaf 198,245 4. Irrig.Imp. & Land Protection at Warazan Hassan Aglan 334,205 5. Land Protection at Warazan " " 26,200 6. Land Protection at Salabat Arwa Ali Qaid Al Ashabi 2,336,033 7. Land Protection at Aussaifara Hassan Aglan 829,769 8. Irrigation works at Hasban Asfal Ahmed Qaid 918,473 9. Irrigation work at Aussaifara Abbas Saggaf 457,772 10. Improvement of Ibb Nursery Mohamed Mokred 219,790 11. Construction of Tank in Warazan Abdul Rageeb Saeed 277,970 12. Construction of hand dug well of Warazan Nursery " " 72,781

TOTAL 5,703,238

B. Import of Gabions 252,000

TOTAL CAT 1-C 5,955,238 -106-

ARNE 4 page 3

SURDU I CAT 1-A

VILLAGE WATER SUPPLY CIVIL -WOKS/IBB GVERMRATE

S.No. Scheme Contractor Amount T.R.

1. Al Najd Al Ahmer Abdul Tavab Abdulla 260,040 2. Al Saraila 195,900 3. AL Gerf 125,540 4. Roqami Abdulla Hassan Mohaumed Al Badani 174,201 5. Disbraq ) Nagi Farhan 267,260 6. D-imnat Nakhlan ) 7. Al Hakhadir Baggash Baider 201,960 8. Sefa Bani Seif Mohamed Ali Al Salehi 226,976 9. Al Safanah Jaafar Al Mohdar' 122,850 10. Sayani Abdul Tavab Abdulla 296,724 11. Aden Al Ashloh 12. Mamsah Jabbana Ali Mohamed AIl Ward 152,822 13. Al Qutta Badan Mohamed Galib Rajih 303,294 14. Al Dira Abdul Karim Mchamed Hassan 340,200 15. Al Dahtat ) 16. Mahadib ) 17. Al- Lahaj ) Abdul -Tavab Abdulla 680,470 18. Eyad ) 19. Akmat Al Safani 20. Aiqurah 274,064 21. Al Sobol ) 90,825 22. Jobla Abdul Tavab Abdulla

23. Al Kadahi -l 64,990 24. Dalmat Hobeish Abdul Karim Muslih 926,472 25. Al Hamual Yasin Ai Asbahi 166,591 26. Rehab Abdul Karim Muslih 209,685 27. Manwaz Hassan AIL Gadi 591,211 28. Al Hasan Bani Nafeh Abdul Karim Mohamed Hassan 215,780 29. Habeel Al Kour Hassan Aglan 183,207 Import of pipes 1,118,000 7,441,895 -107-

ANNEX 4 page 4

SURDU I CAT 1-A

VILLAGE WATER SUPPLY - DRILLING

S.No. Contractor Amount Y.R.

1. Taiz Water Authority (drilling) 188,660 2. George Stow & Co. (drilling and studies) 4,784,301 3. George Stow & Co. (studies) 271,908 4. Atamco Drilling Co. (drilling) 1,453,311

TOTAL 6,698,180

Summary Cat 1-A

Civil Works 16,459,211 Y. Rials

Pipes 1,118,000 Y. Rials

Drilling 6,698,180 Y. Rials

TOTAL 24,275,391 Y. Rials -108-

ANNEX 4 page 5

SURDU I CAT 1-A

BUILDING

S.No. Location Contractor Amount Y.R.

Extension Centers

1. Al Samsara Mohamed Abdo Shamsan 112,500 2. Al Sinah Ahmed Abdulla Faria 112,500 3. Al Misrakh Lutf Ali Abdulla 112,500 4. Hajda "9 133,306 5. Hubeish Abdul Karim Muslih 112,500 6. Al Kalaiba Baggash Haider 112,500 7. Dimnat Khadir Mohamed Seif Haider 112,500 8. Disufal " 112,500 9. Ibb Salaba " 112,500 10. Majad Al Ahmer " 112,500 11. Al Makhadir " 112,500 12. Al Hoban 112,500 13. Al Qaida 112,500 14. Al Sayani 112,500 15. Jibla 112,500 16. Rehab Abdul Karim Mohamed 104,335 17. Hamire (W. Uraig) Mohamed Seif Haider 112,500 18. Shurman " 112,500 19. Rahida Mohamed Abdo Shamsan 105,525 20. Al Mikhlaf Hassan Aglan 120,000 21. Al Ain Ismail Shamsan 120,000 22. Al Zailai Mohamed Seif Haider 112,500 23. Badan Abdul Karim Mohamed Hassan 100,500 24. Sadda " 127,500 25. Suq Maytem Nagi Saleh Utwan 120,000 26. Al Udain Baggash Haider 127,500 27. Kitab o 120,000

Veterinary Centers

1. Ibb Salaba Mohamed Seif Haider 151,920 2. Taiz (Hoban) I 255,360

Block Centers

1. Yarim Mohamed Abdo Shamsan 740,693 2. Turba Ali Qaid Al Asbahi 643,376 3. Al Barh Ali Qaid Al Asbahi 607,895 -109-

ANNEX 4 page 6

SURDU I CAT 1-A

BUILDING (continued)

S.No. Location Contractor Amount Y.R.

Ibb Building

1. First contractor (Ministry of Education) Abdul Wadood Thabit 683,663 2. Completion of main building Abdul Kadir Al Adeemi 3,271,036 3. Water Tank Mohamed Mukred 30,000 4. Pumping equipment Al Sunaidar Co. 58,400

One Room Office

1. Ramada Lutf Ali Abdulla 12,000 2. Nashama " 12,000 3. Yufrus " 12,000 4. Al Dabab 12,000 5. Al Hoban Abdul Tawab Abdulla 34,560 6. Al Noweiha Lutf Ali Abdulla 12,000

Extension at Taiz Read Office

1. Addition of offices Abdul Tawab Abdulla 268,784

TOTAL CAT 2-A 9,896,853 -110-

ANNEX 5

Table A

VILLAGE WATER SUPPLY SCHEMES

TAIZ GOVERNORATE

NO. OF VILLAGES NO. OF BENE- S.N. NAME OF SCHEME BENEFITING FICIARIES WATER SOURCE

1. Hajda 3 3,000 new dug well 2. Al Ramada 4 3,500 new dug well 3. Bani Omer 1 3,500 old dug well 4. Al Sina 6 9,000 new dug well 5. Al Aziaz 6 4,000 spring 6. Al Amakir 5 5,000 new dug well 7. Al Umaqi 1 1,000 extension 8. Al Zailai 12 3,000 new dug well 9. Al Manzil 1 1,000 extension 10. Al Zavakir 6 5,000 hand dug well 11. Al Ahkoom 13 1,500 hand dug well 12. Dubhan 15 6,000 new dug well 13. Bani Ghazi 5 2,500 new dug well 14. Sharjeb 50 12,000 new dug well 15. Mawasid Bani Omer 2 2,000 new dug well 16. Haifan 23 10,000 new dug well 17. Al Masajid Adeem 3 4,000 old dug well 18. Al Hatarim Adeem 3 3,000 old dug well 19. Al Nashama 2 2,000 hand dug well 20. Al Ahad 2 2,000 old dug well 21. Al Garanei 2 2,500 hand dug well 22. Yufrus 1 2,000 spring 23. Al Husein 3 2,500 new dug well 24. Shraeb Al Rouna 1 3,000 old dug well 25. Al Misrakh 1 3,000 old dug well 26. Dukem-el Ghurab 5 2,500 old dug well 27. Dubaa Al Kharej 5 6,000 old dug well 28. Al Wajd 5 3,500 new dug well 29. Qadas 7 6,000 new dug well 30. Al Museyna'a 1 1,500 extension

TOTAL 194 116,500

The average number of inhabitants served through these 30 schemes is approximately 3,900 while in the appraisal it was planned to serve about 1,900 persons per scheme. -111-

ANNEX 5 page 2

Table B

VILLAGE WATER SUPPLY SCHEMES

IBB GOVERNORATE

NO. OF VILLAGES NO. OF BENE- S.N. NAME OF SCHEME BENEFITING FICIARIES WATER SOURCE

1. Al Safnah 6 5,000 new dug well 2. Dar-El-Sharaf 5 3,000 new dug well 3. Mamsa el Jabana 5 3,000 new dug well 4. Al Siyani 2 3,000 new dug well 5. Safa Bani Saif 1 2,500 spring 6. Ablan 5 3,000 new dug well 7. Al Makhadir 5 2,500 old dug well 8. Di Shraq 2 2,000 new dug well 9. Dimnat Nakhlan 2 2,000 extension 10. Al Najd Al Ahmar 4 3,000 new dug well 11. Rukami Abdalla 3 1,600 spring 12. Al Sarayem 3 2,500 new dug well 13. Aden Ashloob 1 1,500 extension 14. Al Hamami Wa Al Nusha 3 3,500 new dug well 15. Al Qatta Basdan 5 3,000 spring 16. Al Aiqarab 1 3,000 new dug well 17. Al Kadah 1 1,500 extension 18. Jibla 1 1,500 extension 19. Al Sabal 1 1,000 extension 20. Akamat Safani 1 1,500 new dug well

TOTAL 57 49,600 -112-

ANNEX 6

Table A

DEVELOPMENT OF HEALTH LEVEL IN PROJECT AREA 1976 AND 1980

S TA TEMENT1976 1980 TAIZ IBB TOTAL TAIZ IBB TOTAL

Hospitals 7 4 11 7 4 11 Number of beds 970 232 1,202 11.6 193 1,299

Health Centers 7 3 10 22 11 33 Number of beds n.a. n.a. n.a. 1,206 253 1,359

Rural Health Units 16 8 24 23 11 44

Pharmacies n.a. n.a. n.a. 12 2 89

Drinking Water Projects n.a. n.a. n.a. 176 596 772

Total Number of Institutional Health 125 56 181 ANNEX 6 page 2

Table B

DEVELOPMENT OF EDUCATIONAL LEVEL IN PROJECT AREA 1976 AND 1980

STATEMENT 1976 1980 TAIZ IBB TOTAL TAIZ IBB TOTAL

Elementary

Number of schools 316 119 435 412 275 687 Number of students 72,885 20,291 93,176 93,693 44,791 138,484

Intermediate

Number of schools 34 11 45 86 18 104 Number of students 3,207 392 3,599 8,733 1,785 10,518

Secondary

Number of schools 9 5 14 22 6 28 Number of ecudents n.a. n.a. n.a. 3,376 467 4,843

Literacy centers

Number of centers - - - 11 5 16 Number of students - - - 1,402 895 2,297

TOTAL

Number of institutions 364 139 503 536 308 844 Number of students 76,823 20,892 97,715 107,707 48,157 155,864 -114-

ANNEX 7

ECDNOMIC ANALYSIS

1. The economic rate of return of the project is 15% on the assumptions listed below. The very favorable rate of return is due to the following:

i) high yield response to fertilizers since most of the soils are nutritionally depleted;

ii) the spread of improved seeds;

iii) the growth of pump irrigation allowing for double cropping;

iv) a greater shift to vegetable and fruit cultivation than was foreseen at appraisal.

2. The calculations were based on the following assumptions:

a. Output Prices. All crops and livestock products would be consumed within the country. The cereals were not treated as tradeables because of the very high demand for stover and straw. This is a peculiarity of semi-arid regions with a relatively high livestock dependence. The value of cereals is not only their grain but their plants also. In fact, in many cases, the value of the stover or straw exceeds the value of the grain. Prices used for financial and economic analysis is given below.

Table I

FARGATE PRICES (1981) (YR/ton)

Financial Economic 1/

Sorghum (grain only) 1,800 1,100 Maize " 1,800 1,100 Pulses 4,000 3,100 Potatoe 2,000 1,560 Vegetables(onions) 3,000 2,340 Fruits 3,000 2,340 Stover/straw 300 230 Alfalfa 500 390

1/ Sorghum and maize were treated as tradables and accordingly their economic price was based on 1981 boarder prices. For all other commodities, the Standard Conversion Factor (SCF) of 0.78 was applied. -115-

ANNEX 7 page 2

b. Labor. Hired labor was valued at the wage rate prevailing in 1981 (YRL 45/man-day). Due to emigration, there is a dearth of labor and more women now participate in harvesting and threshing. It has been conservatively estimated that 40% of the labor input is by women and children who have zero opportunity cost.

c. Exchange Rate. The exchange rate of YR 4.55 to US$ 1.00 was used. This has been a fairly stable, market-determined exchange rate.

d. Rural Works, Project Facilities and Equipment. All these costs were included in the ERR calculations. At appraisal the cost of construction and upgrading of 180 km of support roads was included. However, as these roads were ultimately not built with project funds, their cost har not been included.

e. Technical Services. All the costs of technical services were included. From year 9 onward, only half the payments to the project staff are included. It is assumed that from hen on at least half their time will be devoted to SURDP II areas outside the actual area of SURDP I.

f. Fellowships and Other Studies. Studies outside the project area were not undertaken. All fellowship costs were included.

g. Time Period. The project was assumed to have a 20-year life, beginning in 1976. -116-

ANNEX 8

THE MAIN RESULTS OF AGRICULTURAL CENSUS CONDUCTED BY THE MINISTRY OF AGRICULTURE DATA FOR TAIZ AND IBB 1979/80

GOVERNORATE TAIZ IBB

Total farm area (ha) 122,820 102,269 225,089 Field crops (ha) 102,169 90,955 193,124 Perennial crops (ha) 1,832 5,860 10,692 Fallow 70 844 914

Unused area (ha) 12,624 1,911 14,535 Buildings, yards, etc. (ha) 3,125 2,699 5,824 Non-cultivable farmland (ha) 15,819 5,454 21,273

Rainfed area (ha) 88,607 85,515 184,122

Irrigated area 12,349 3,842 16,191 Spate irrigated (ha) 799 2,211 3,010 Pump irrigated (ha) 11,550 1,631 13,181

Total area using fertilizer 135,47o 163,464 298,940 Manure (ha) 106,633 87,708 194,341 Chemical (ha) 28,843 75,756 104,599

Total area using pesticides (ha) 1,579 6,764 8,343

Total number of agricultural holdings 104,389 117,787 222,176

Average size of agricultural holdings (ha) 1.2 0.9 - -117-

ANNEX 9

PLANT PROTECTION

Plant protection service of the project has played a major role in controlling pest infestation which used to reduce crop yields up to 25%. The dreaded armyworm (Spodeptra exe.upta) posed a threat to cereal crops every May, June and July. It used to cause very considerable losses. Precautionary measures had to be taken every year prior to that time to safeguard against any outbreaks. A network of pheomone capsule traps were installed in April to signal early alarms about the pest incidence. Control measures were taken in case of outbreaks. During the period 1976-81, four outbreaks took place and the campaigns were impressively successful in checking the armyworm and thus minimizing the damage. Table 1 illustrates the efforts made by the plant protection service.

Table 1

AREA PROTECTED, CHEMICALS USED AND NUMBER OF FARMS BENEFITED DURING ARMYWORM CAMPAIGNS

YEAR AREA/HA CHEMICALS KG/L FARMS BENEFITED

1976 2,173 957 3,115 1977 8,786 5,450 11,961 1978 no infestation -- 1979 6,543 7,880 10,189 1980 10,248 11,341 12,289 1981 no infestation - -

Table 2

CHEMICALS AND SPRAYERS SOLD BY ACF/ACB

YEAR CHEMICALS KG/L SPRAYERS

1976-77 3,425 - 1977-78 3,651 486 1978-79 3,597 487 1979-80 4,012 1,709 1980-81 3,976 913

TOTAL 18,671 3,595

Chemicals and sprayers sold directly by private firms have not been recorded, but it is assumed that the amount is higher than sold through ACF credit. -118-

ANNEX 10

HORTICULTURE

Three specialized nurseries were in operation for propagating seedlings of fruits, coffee and forest trees. Ibb nursery produced seedlings mainly of deciduous mediterranean and temporate fruits, whereas the nursery at Al-Haima (Thiz) was for the evergreen tropical and subtropical types. Coffee seedlings were multiplied exclusively at Warazan (Taiz) nursery. The three nurseries also propaghated seedlings for forest plantations. During the project, land for six distribution nurseries was acquired and some progress was made in fully establishing them. The number of seedlings provided to farmers by the project is shown in Table 1.

Table 1

DISTRIBUTION OF SEEDLINGS BY THE HORTICULTURE SECTION

FRUITS COFFEE AFFORESTATION

1976 1,979 90,416 1977 - 10,000 90,416 1978 11,200 14,059 117,463 1979 4,077 12,055 129,150 1980 8,057 12,055 13,305 1981 14,563 22,779 50,000

37,897 89,831 400,434

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