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The World Bank Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 3065a-114D Public Disclosure Authorized INDONESIA SWAMPRECLAMAITON PROJECT STAFF APPRAISAL REPORT Public Disclosure Authorized February 23, 1981 Public Disclosure Authorized Projects Department East Asia and.Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS US$1.0U = Rupiahs (Rp) 6Z5 Rp 1.00 = US$0.0016 Rp 1 oillion = US$1,600 WEIGHTS AND MEASURES- 1ETRIC SYST&1,1 1 millimeter (mm) = 0.039 inches I meter (i) = 39.37 inches 1 kilometer (km) 0.62 miles 1 square kilometer (sq km) = 0.386 square miles 1 hectare (ha) 2.47 -acres 1 cubic meter (cu m) 35.31 cubic feet I million cubic meters (NCM) = 811 acre feet 1 liter (1) 0.264 gallons (USA) 1 liter/second (1/sec) = 0.035 cubic feet per second I kilogram (kg) = 2.2 pounds 1 metric ton (ton) 2,205 pounds INDONESIAN FISCAL YEAR April 1 - tiarch 31 ABbREVIATIOi.S A.RD - Agency for Agricultural Research and Development BI%AS - Bimbingan 4assal Swa Sembada haihan Liakanan - ;lass Guidance for Self-Sufficiency in Foodstuffs, a farm input-credit package program BRI - iank Rakyat Indonesia - People½s Bank of Indonesia BULOG - National Food Procurement and iistribution Agency DGA - Directorate General of Agrarian Affairs (Cadastral Office) DGCK - Directorate General of Cipta karya, (hIousing,Urbani and Regional Development) DGT - Directorate General of Transuigration DGWRD - Directorate General of lWaterResources Development DPU - Departemen Pekerjaan Umur Dan Tenaga Listrik - Public Works Ministry GOI - Government of Indonesia IPB - Institut Pertanian Bogor - bogor Agricultural University IPEDA - Land Tax IRRI - International Rice ResearclhInstitute ITE - Institut Teknologi Bandung - band&ng Institute of Technology JMT - Junior Minister (~Iinistry)for Transmigration KUD - Village Unit Cooperative FOR COFICLIL USE ONLY MOA - Ministry of Agriculture MOH - Ministry of Health O&M - Operation and Maintenance P4S - Proyek Peibukaan Persawahan Pasang.Surut - Proiect Unit for Tidal Swamp Reclamation PTPT - Penyapatan Tanah Pemukimnn Transmigrasi - Directorate of land preparation for transmigration settlement (in charge of land clearing) REPELITA - Rencana Pembangunan Lima Tahun - Five Year Development Plan SAE - Survey Agro Economi-Agroeconoiaic Survey SID - Surveys, investigations and designs UGM - University of Gajah Mada GLOSSARY Alang-alang - (Imperata cylindrica) a coarse grass which establishes itself after slash and burn operations Hak Pakai - Individual right of use or exploitation of assigned land Hak Milik - Right to full ownership of land KabuDaten - District Kecamatan - Subdistrict Marga - A community grouping under traditional (Adat) law PUSKESMAS - Community health center This documenthas a restricteddistribution and may be ued by recipients only in the performance of their officialduties. Its contents may not othenris be disclosed without World Bank authorization. INDONESIA SWAMPRECLAMATION PROJECT I Table of Contents Page No. 1. BACKGROUND . I General . I The Agricultural and Rural Sector . .1 Development Strategies . 2 Swamp Reclamation and Development . 5 Project Formulation . 8 2. THE PROJECT AREA . 10 Location . 10 Climate . 10 topography and Soils . 10 Hydrology and Hydrometry ..... 12 Water Supply, Demand and Quality . 14 Drinking Water . 14 Population . 15 Land Tenure .......... 16 Access, Serv;-4- and Existing Development . 17 Existing Agric-u.~:ure . .. 18 3. THE PROJECT . 19 Project DT-h iption . 119 Project WorKs . 19 Agricultural Development . 21 Physical Development . 21 Settlement . 23 Community Development . 24 Status of Field Data, Planning and Design . 26 Implementation Schedule . 27 Consulting Services . 27 Cost Estimates . 29 Financing . 29 Procurement . 29 Disbursements . 33 Accounts and Audits .................... 33 Environmental Effects . 33 - ii - Page No. 4. ORGANIZATIONOA MANAGEEEJD . N.T................... 34 General . 34 Agricultural Support Services . , . .. 36 Operation and Maintenance*..*.*. .... .... 38 Monitoring and Evaluation . .... 39 5. AGRICULTURAL PRODUCTION .. 40 Cropping Patterns ... .... 40 Cropping Calendar . .. ... 42 Yields . .. 42 Production . 43 Drying, Storage and Processing . 43 Livestock and Fisheries . 44 6. MARKETPROSPECTS, PRICES, FARUMINCOMES AND PROJECT CHARGES . 44 Market Prosp2cts . 44 Prices . .4.. 45 Farm Incomes . .. 46 Project Charges . .. 47 7. BENEFITS, JUSTIFICATION AND RISKS . 48 Benefits . .. 48 Labor Costs and ienefits . .. 49 Investment Costs ... ..... 51 Economic Rate of Return . 51 Sensitivity AnAlysis . ... 51 Risks . 53 8. AGREEMENTSREACHED AND RECOMMENDATIONS.. 53 LIST OF TABLES IN MAIN REPORT 1.1. Reclaimed Areas and Settled Families in Tide-Affected Swamps 7 2.1 Meteorological Data . 11 2.2 Spring Tide Ranges ... ..... 13 2.3 Salinity Iitrusion . 13 2.4 Water Balance for Rainfed Household Consumptive Use . 15 3.1 Consulting Services . 30 3.2 Pro4ect Cost Summary . 31 4.1 Initial Seeds and Agrochemical Package . 37 5.1 Projected Agricultural Yields . 42 5.2 Agricultural Production . 43 7.1 Sensitivity Analysis . 52 - iii - LIST OF ANNEXES - TABLES ANNEX 1 Il. Cost Estimate 2. Schedule of Expenditures 3. Cost Estimate by Category of works 4. Proposed Allocation of Loan Proceeds 5. Estimated Schedule of Disbursements 6. Bill of Quantities and Costs 7. Village Facilities E.. Consulting Services: Categories and Estimated Schedule 9. Consulting Services - Cost Breakdown 10. List of Equipment and Supplies AIMNEX 2 1. Price Structures for Agricultural Outputs 2. Price Structures for Agricultural Inputs 3. Net Economic Benefits from Rice (Paddy) Production 4. Net Economic Benefits from Soybean and Corn Production 5. Coconut Prodction Volumes and Values C. Banana Production Volumes and Values 7. Assumed Labor Inputs per Cropped Hectare &. Development of Typical Transmigrant Family Labor Force 9. Economic Value of Family Labor in Areas of Origin and Settlement 10. EcoPomic Rate of Return Calculation I 1. Representative Farm Nodel 1 2. Representati-ve Settler Family income Analysis 13. Rent and Cost Recovery Calculation Summary AJNNEX 3 Schedule of Early E'vents ANNEX 4 Studies and Investigations, Terms of Reference ANNEX 5 List of References LIST OF FIGURES 3.1 Implementation Schedule (21825) 4.1 Organization of the Directorate General of Water Resources Development (18765) 4.2 P45 Organization Chart (21493) 4.3 P4S Provincial Office Organization (21491) 5.1 Proposed Field-lot Cropping Calendar (21085) LIST OF MAPS IBRD 14919, 14920 I)DNESIA APPRAISAL OF SWAMPRECLAMATION PROJECT I 1. BACKGROUND General 1.01 The Government of Indonesia (COI) has requested Bank Group assis- tance in reclaiming and developing about 9,000 ha (gross) of swampland at Karang Agung in South Sumatra, and in settling approximately 3,200 families. GOl also requested a number of related studies including an inventory of reclaimable swamplands; upgrading of existing swamp developments; ecologic impacts; and the availability of groundwater for drinking purposes at Karang Agung. The proposed project would provide for drainage, clearing and development of the land; housing and public facilities; selection, transport, settling and subsistence of settled families; and agricultural support services and studies. 1.02 Tne potential reclamation and development of 200,000 ha at Karang Agung has been studied by P4S /1 and consultants (under Irrigation Project VII, Loan 1268-IND) and subsequently an area of about 9,000 ha was idertified with the assistance of Bank missions as a first stage develcpment. This report is based on the findings of an appraisal mission composed of Messrs. I. Naor, J. Goldberg, W.P. Ting and J.K. Coiilter which visited Indonesia in November 1979. The Agricultural and Rural Sector 1.03 Objectives. The Government-s major objectives for the agricultural and rural sector are to: (a) create productive employment to raise incomes of the rural poor; (b) increase domestic food supply to keep pace with rising demand; (c) expand agricultural exporrs particularly of smallholder tree crops; and (d) ensure productive, su n__nable use of Indonesia-s varied land, water and other natural resources. 1.04 Despite a 4% average annual growth of production, agriculture's share of GDP has declined from 40% to 30% since 1968, while its share of exports dropped from 45% to 33% due mainly to the markedly increased value of oil exports. Nevertheless, the agricultural and rural sector remains of overwhelming importance to the great majority of Indonesians; nearly 80% of the population lives in rural areas, and agriculture is the major source of income for about two-thirds of rural households and /1 P4S - Proyek Peinbukaan Persawahan Pasang Surut - Project Unit for Tidal Swamp Reclamation, in the Directorate of S-oampDevelopment, Directorate General of Water Resources Development, (DGWRD), Ministry of Public Works. -2- one-tenth of urban households. Some 15.6 million smallholder families produce subsistence and cash crops on 15.8 million ha, while 1,800 estates occupying 2.2 million ha produce mainly rubber, sugar, tea, palm oil, and tobacco. Development Strategies 1.05 Employment. Agriculture-s share of total employment decreased from 69% in 1961 to 64% in September 1971, while in 1976 it ranged between 66% in March and 60% in October./1 Nevertheless, agriculture remained
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