Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 4154a-YU
Public Disclosure Authorized STAFF APPRAISALREPORT
YUGOSLAVIA
KOSOVO REGIONAL DEVELOPMENTPROJECT Public Disclosure Authorized
March 30, 1983
Public Disclosure Authorized Agriculture III Division Europe, Middle East and North Africa Region
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 EQUIVALENT*
usl Dinars (Din) 63.51 Din 1 US$0.0157
WEIGHTS AND MEASURES
1 kilogram (kg) 2.20 pounds 1 metric ton (m ton) 1,000 kilograms 1 centimeter (cm) 0.39 inches 1 meter (m) 1.09 yards 1 kilometer (km) 0.62 miles 1 hectare (ha) 2.47 acres 1 square meter (m2 ) 10.76 square feet 1 square kilometer (km 2) 0.384 square mile 1 liter (1) 0.264 gallons 1 hectoliter (hl) 100 liters I cubic meter (m 3 ) 1.31 cubic yards
ABBREVIATIONS
ACO - Agricultural Credit Officer AEA - Agricultural Extension Advisor Al - Artificial Insemination AIK - Agro-Industrial Kombinat B - Billion BB - Basic Bank BCO - Basic Cooperative Organization BOAL - Basic Organization of Associated Labor CCC - Commune Coordinating Committee COAL - Composite Organization of Associated Labor EA - Extension Agent ERR - Economic Rate of Return FA - Faculty of Agriculture FAO/WB - Food and Agricultural Organization of the United Nations/ World Batik FC - Federation of Cooperatives PCC - Project Coordinating Committee FNP - Federal Fund for the Development of Less Developed Regions FRR - Financial Rate of Return GMP - Gross Material Product GNP - Gross National Product ICB - International Competitive Bidding IED - Institute of Economic Development IS - Individual Sector KBP - Kosovska Banka, Pristina M - Million
* The currency equivalents given above are those effective in October 1982. FOR OFFICIALUSE ONLY
MSC - Media Strategy Committee NPV - Net Present Value OA - Organization of Agriculturalists OCC - Opportunity Cost of Capital PCC - Project Coordinating Committee SAPK - Socialist Autonomous Province of Kosovo RCS - Rural Communications Specialist RTV - Radio Television SDK - Social Accounting Service SFRY - Socialist Federal Republic of Yugoslavia SMA - Self-Management Agreement SMS - Subject Matter Specialist SV - Switching Value WO - Work Organization
FISCAL YEAR
January 1 - December 31
| This document has a restricteddistribution and may be used by recipientsonly in the performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization. APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Table of Contents Page No.
AGRICULTURE SECTOR 1
A. Project Background 1 B. Agriculture in Yugoslavia 1 C. Bank Strategy in Yugoslavia's Agricultural Sector 3 D. The Agricultural Sector and Development Issues in Kosovo 4 E. Constraints to Increasing Agricultural Production 4 F. Kosovo 1981-1985 Development Plan 5 G. Performance under Previous World Bank Financed Agricultural Credit and Irrigation Projects 5
II. THE PROJECT AREA 6
III. KOSOVSKA BANKA (KBP) - The Borrower 10
A. Resource Mobilization 10 B. Financial Performance 11 C. Arrears 12
IV. THE PROJECT 12
A. Objectives 12 B. Description 13 C. Status of Design and Project Implementation 19 D. Cost Estimates 19 E. Financing 21 F. Retroactive Financing 21 G. Disbursements 22 H. Procurement 23 I. Environmental Effect 24 J. Role of Women 24
This report is based on the findings of an Appraisal Mission to Yugoslavia during June/July 1982, consisting of consisting of Messrs. V. Ashworth (Mission Leader), E. Hunting, J.K. Ingram, A. Schumacher, V. Wickrema and Ms. K. Gavrilovic (Bank), and Messrs. C. Konteatis, T. Stockley and R. Noronha (Consultants). Mr. F. Wright (Bank) assisted with appraisal analysis. A post-appraisal mission comprising Mr. Schumacher, Mr. Carapetis and Ms. Lichtenstein (Bank) took place in October 1982. Table of Contents (Cont'd) Page No.
V. PROJECT ORGANIZATION AND MANAGEMENT 24
A. Institutional Arrangements 24 B. Project Coordinating Committee (PCC) 25 C. Federation of Cooperatives (FC) 26 D. Kosovska Banka Pristina (KBP) 26 E. Commune Governments 30 F. Organizations of Agriculturalists (OA's) 30 G. Other Participating Organizations ana Supporting Services 31 H. Training and Supervision 33 I. Accounts and Audit 34 J. Reporting, Monitoring and Evaluation 34 K. Cost Recovery 34
VI. PRODUCTION, PRICES, MARKETS AND FINANCIAL ANALYSIS 35
A. Production 35 B. Market Prospects and Channels 35 C. Prices 39 D. Financial Analysis 40
VII. BENEFITS AND JUSTIFICATION 40
A. Benefits 40 B. Economic Evaluation 42 C. Risk and Uncertainty 45 D. Fiscal Impact 46
VIII. RECOMMENDATIONS 46
TABLES
I Project Area Cultivated Land Use 8 2 Project Cost Summary 20 3 Project Financing Plan 21
ANNEXES
Annex la Glossary of Terms 49
Annex lb Project Cost and Phasing
Table 1 Project Costs and Phasing - US$ Million (International Price Contingencies) 53 2 Project Costs and Phasing - Din. Million (International Price Contingencies) 54 3 Project Cost and Phasing - Dinar Million (Local Price Contingency) 55 4 Project Cost Summary - Dinar Million (Local Price Contingency) 56 5 Project Phasing 57 Table of Contents (Cont'd) Page No. Annex 2 Schedule of Disbursements 58
Annex 3 Financial and Economic Data
Table 1 Summary Physical Quantities - Main Production 59 2 Yugoslavia Trade in Major Agricultural Commodities 60 3 SAPK Estimated Increase in Requirements for Agricultural Products 61 4 Farmgate Prices for the Financial and Economic Analyses 62 5 Investment Models - Yield and Production Coefficient Assumptions 66 6 Summary Results of the Financial Analyses 67 7 Projected Economic Border Price Structure for Tradeable Input and Output Commodities 68 8 World Market Indicator Prices for the Economic Analyses 69 9 Summary Economic Results 70 10 Summary Results of the Economic Sensitivity Analyses 71 11 Socio-Economic Indicators 72 12 Agricultural Production Indicators 73 13 Land Use 74 14 Agricultural Sector Performance 1970-1980 75
Annex 4 KBP Data
Table I Balance Sheets 76 2 Key Financial Ratios 77 3 Statement of Income and Expenses 78 4 Loan Portfolio Analysis 79 5 Sources and Uses of Funds 80 6 Analysis of Loan Approvals 81
Chart 1 KBP Organization Chart 82
Annex 5
Chart 1 Project Organization 83 Chart 2 Kosovo Water Economy Organization 84 Charts 3 and 4 Typical Road Construction Cross Sections 85/86
Annex 6 Key Indicators 87
Annex 7 Selected Documents and Data Available in the Project File 88
Map: IBRD 16606 STAFF APPRAISAL REPORT
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
I. THE AGRICULTURE SECTOR
A. Project Background
1.01 The Socialist Autonomous Province of Kosovo (SAPK) is located in southern Yugoslavia. It is bordered in the west by Albania; in the south by Macedonia, in the East by Serbia, and in the northwest by Montenegro (IBRD Map 16606). The total land surface is 10.9 million ha (4% of Yugoslavia) and the population 1.6 million (7% of Yugoslavia). Kosovo is Yugoslavia's least developed region; with 1979 per capita income about US$780 in 1982 prices. The proposed Project would follow an earlier project for agricultural and agro-inaustrial development: the Kosovo Agricultural Development Project (Loan 1993-YU, 1981). It would also support investments made under the Second (Loan 1477-YU) and Third (Loan 1801-YU) Agricultural Credit Projects, in which Kosovo has participated along with other Republics and Provinces.
1.02 The project was identified in February 1980 by a Bank mission and prepared by the Institute of Economic Development (a Basic Organization of Associated Labor (BOAL) of AgroKosovo) with the assistance of the FAO/WB Cooperative Program. Bank follow-up missions visited Kosovo July 1980, October 1981 and March 1982. The appraisal mission followed in June 1982 consisting of Messrs. V. Ashworth (Mission Leader), E. Hunting, J.K. Ingram, A. Schumacher, V. Wickrema and Ms. K. Gavrilovic (Bank), and Messrs. C. Konteatis, T. Stockley and R. Noronha (Consultants). F. Wright (Bank) assisted with appraisal analysis. A post-appraisal mission comprising Mr. Schumacher, Mr. Carapetis and Ms. Lichtenstein (Bank) took place in October 1982.
B. Agriculture in Yugoslavia
1.03 In Yugoslavia, the share of agriculture in social product and employment has declined steadily in the post-war period. However, the agri- cultural sector remains important in the overall development of the economy, contributing about 14% of social product, and engaging about 30% of the country's active population. The agricultural sector accounts for the income of one-third of the population--a group which is largely rural, under- employed, and in the relative poverty target group with per capita income under US$850 per annum. In addition, the agricultural sector makes an important contribution to reducing Yugoslavia's trade deficit. The country has a large agricultural resource base, and its favorable climatic conditions have fostered the growth of a well-diversified agricultural sector with a significant potential for future development.
1.04 Yugoslavia has a unique framework of economic management and decision-making based on a system of workers' self-management, a system characterized by social ownership and workers' control of the means of production. In agriculture this has led to the co-existence of social and individual (private) sectors. About 83% of agricultural land is owned and -2- operated by nearly 2.6 million individual farmers making it the only predominantly privately-owned sector of the economy. With an average family holding of around 3.2 ha and possessing about 95% of the total agricultural labor force, the individual sector accounts for about 85% of maize production, 60O of wheat, 75% of vegetables, and owns 90% of all livestock. A considerable portion of production in the individual sector is, however, retained for home consumption and contributions to marketed output are low. The share of the individual sector in the marketed output of cereals is about 45%, with a similar situation prevailing in vegetables and fruits. In livestock, however, a much higher proportion of individual sector output is m.arketed. In an effort to increase income and overcome under-employment, an increasing number of individual households are moving out of purely agri- cultural occupations into part-time agriculture supported by non-farm sector income.
1.05 The potential inherent in agriculture in the individual sector received scant attention until the early 70's. Since then, the individual sector has received support through various forms of cooperation and association with the social sector. The linkage between the two sectors is provided through agricultural cooperatives (Zadrugas). Cooperation with individual farmers is achieved through snort- or long-term production contracts. Cooperatives sell agricultural inputs and buy agricultural outputs from all farmers cooperating in their area of operation and provide farm machinery services, technical advice, and credit to member farmers. The repayment of the credit is ensured through the sale of the produce. A farmer can have several contracts for production of different commodities. About half of Yugoslav farmers are involved in some form of cooperation with the social sector.
1.06 The Yugoslav food production system relies on integration of primary agricultural production, food processing, marketing and distribution of food products in agroindustrial complexes called agrokombinats (integrated factory farms). The social sector controls about 17% of the total agricultural land in the country and produces 28% of total agricultural output. Social sector agricultural production grew 5.4% annually during 1970-1980, compared to 1.2% for the individual sector. While social sector growth has been impressive in absolute terms, production efficiency needs improving. Overall, about 85% of total investment funds in agriculture still flow to the social sector.
1981-1985 Social Plan
1.07 The Federal 1981-1985 Social Plan calls for improved primary production to satisfy domestic demand; generation ot surplus production to promote agricultural exports; modernization and reconstruction of existing agroindustry facilities; and utilization of currently unused and abandoned lands through land reclamation and social sector purchase. The growth of agricultural output has been targeted at 4.5% per year, with the social sector planned to grow at 6% and the individual sector at 4% per year. Agriculture is expected to play an important role in reducing the deficit in the balance of payments. Agricultural exports are expected to grow at an annual rate of 10% by the end of the Plan, and agricultural imports to be reduced by 5% per year. To achieve these objectives, the Plan provides for investments of Din 152 billion in 1982 prices, representing 9.6% of total investment in the economy. Overall, the Plan represents a relatively optimistic view of agricultural production possibilities. Policy and organizational changes well beyond those currently set out in the Plan will be needed to achieve the objectives. - 3 -
1.08 The individual sector constitutes Yugoslavia's largest agricultural resource but its modernization and reduction of the disparity between individual farm incomes and those in the non-farm sector will be difficult to achieve, until a satisfactory policy framework is devised to progressively overcome the structural problems afflicting the agricultural sector. Agricultural issues constraining development include:
(a) inadequately developed institutional arrangements and services for the large individual sector, including restricted credit access for individual farmers; (b) insufficient sector investments with the individual sector and an imbalance towards capital intensive social sector agro- processing; (c) the small size and fragmentation of individual sector holdings, and (d) weakly developed extension services for the individual sector.
C. Bank Strategy in Yugoslavia's Agricultural Sector
1.09 In recent years, the Bank's lending strategy in Yugoslavia has given increasing importance to the agricultural sector. To accelerate agricultural growth, the Bank assisted in formulating the 1973 'Green Plan', a compre- hensive framework for agricultural development which, for the first time, emphasized the need to support the individual farm sector. The Bank has made 15 agricultural sector loans totalling about US$942.6 million, about 26% of total Yugoslav loans. The strategy has been to support the development of primary production in the individual sector in recognition of the fact that the major output increases can be expected to come from the largest resource block. Investments in agroindustries in the social sector which serve as the marketing channels for farm production have also been financed under Bank loans. This strategy has recognized the need to use investment to promote a more equitable income distribution by raising the incomes of the rural poor, and alleviating rural-urban migration. An agricultural sector review, terms of reference for which have been agreed with the Government, is expected to be completed by mid-1983. The review will be jointly financed by the Bank and the Government and would include participation of staff from the Bank and selected Yugoslav institutes. Future Bank lending and sector activities which would draw on the conclusions of this report are expected to assist in the reorientation of investment, promote institutional development and training, and the evolution of a satisfactory policy framework. The Bank's project investments are expected to focus on:
(a) primary production (particularly cereals and industrial crops) in the social sector, in which it has a comparative advantage; (b) labor intensive production (livestock, vegetables, fruits) largely in the individual sector; (c) agroindustry investments limited to reconstruction and modernization; (d) export-oriented production; (e) research and extension services and agricultural inputs accessible to all farmers; (f) development-oriented banking institutions exclusively for agriculture which would provide credit to all farmers; and (g) training of farmers, and staff engaged in research, extension and cooperative work, and (h) training of banking institution staff. 1.10 The proposed loan would be the fourth Bank loan in Kosovo in the agricultural sector and the sixteenth Bank loan for Yugoslav agriculture and agroindustries. The project objectives are consistent with Yugoslav ana Bank development strategy.
D. The Agricultural Sector and Development Issues in Kosovo
Background
1.11 Kosovo is Yugoslavia's most agrarian region: it has the greatest share of Gross Material Product (GMP) generated from agriculture (20%), the highest agricultural (43%) and rural population (66%), and has overall performance well below, and income levels some 50% of, the national average. Household incomes in the target area are themselves only half of Kosovo's average. This results in income levels of the target population of less than a third of the national average. Kosovo's population growth of around 2.4% annually is nearly treble, and population density (145 persons/km2) almost double, the national average. Notwithstanding levels of food consumption below the Yugoslav average, Kosovo is in net deficit for all agricultural products except wine. Socio-economic indicators comparing Yugoslavia and Kosovo are given in Annex 3, Table 11.
1.12 During 1970-1980, Kosovo agricultural production grew annually by around 3.3% compared to the national average of 2.5%. Growth in 1970-1975 was around 6% but dropped to l/. in 1975-1980, due partly to adverse weather conditions, but also to inappropriate development policies affecting tne IS. Throughout the decade, agricultural crop production performance was disappointing. Livestock production growth, however, has been above the Yugoslav average. Comparative agricultural sector performance for Yugoslavia and Kosovo during 1970-1980 is given in Annex 3, Table 12.
1.13 In Kosovo, the social sector operates about 524,000 ha of the land (48% of total) of which about 55% comprises comparatively unproductive pastures and forest lands. The remaining 565,000 ha are held by about 96,600 individual farmers, with an average farm size of about 4 ha including 2.8 ha of arable land, or only 0.4 ha per household member. Nearly 50% of agricultural land owners hold less than 2 ha and over 75% have less than 4 ha. The social sector has benefitted from better access to investment capital, agricultural extension, input supply and credit services.
E. Constraints to Increasing Agricultural Production
1.14 The factors constraining increased Yugoslav and Kosovo agricultural production are similar (para. 1.06). In Kosovo, they are exacerbated by (a) development policies which have favored the capital intensive social sector rather than the IS where the greatest production potential remains; (b) comparatively weakly developed IS services; (c) fragmented farms and (d) inadequate rural road and transport systems.
1.15 The rural population is conservative, and IS production largely traditional. Farmers have been slower in adopting modern technology than in most other parts of Yugoslavia. Compared to the social sector, IS use of improved seeds, agro-chemicals, and fertilizer is low. Individual sector development potential, however, is large since it includes most of the arable - 5 - land. Moreover, (a) small farms have under-utilized labor reserves; (b) proven social sector agricultural technology can, in many cases, be applied on these farms; and (c) when given technical assistance, access to credit and markets, and adequate supply of modern farm inputs, individual farmers have demonstrated their ability to achieve good yields.
1.16 Rural Roads The inadequacy of rural road transport is a constraint on further agricultural development in the project area. The network of existing Category 4 and 5 roads is limited to a rudimentary system of unimproved earth tracks, many of which provide only limited horse and cart access. Drainage is a general problem. In cases where drainage structures are inadequate, roads are often impassable because of severe deterioration of the road formation. At the present time, limited access to and within the project area prevents the efficient execution of extension and marketing activities, and slows delivery of harvested output, especially perishables, from farms to marketing depots and processing factories. The social welfare of the rural population is also constrained by inadequate access to schools, health, ana administrative facilities. Field observations by the mission in each commune verified that improvement in transport services and particularly of the road network is a necessary and integral part of a program to increase economic activity.
F. Kosovo 1981-1985 Development Plan
1.17 The 1981-1985 Social Plan for Kosovo projects an annual 5.7% agricultural growth rate, 10.8% in the social sector and around 4.8% in the IS. Based on past performance, these growth rates seem optimistic. The plan strategy is essentially based on increasing cooperation between the individual and social sectors. Increased productivity is to be achieved by increasing the use of inputs such as fertilizer, improved breeds, and improved seeds. Individual sector plans correctly stress livestock production and more intensive crops such as vegetables and fruit. Specialized services are to be strengthened and farmers are to benefit from special tax and credit policy incentives. Total primary agricultural production investments over 5 years are expected to be about Dinars 13,650 M (US$297 M), about 56% for the social sector and 44% for the individual sector.
G. Performance Under Previous World Bank Financed Agricultural Credit and Irrigation Projects
1.18 Since 1973, Kosovo has directly received three World Bank loans for agriculture totalling $189 M; $99 M for two multipurpose irrigation projects and $90 M for agro-industry and agricultural development. A further $22.9 M was Kosovo's share under the three Yugoslav Agricultural Credit Projects (Loans 1129, 1477, 1801-YU). Of the US$211.9 M borrowed for agricultural development, US$84.4 M (40%) was disbursed at March 31, 1983. The Ibar-Lepenac Multipurpose Project (Loan 777-YU, $45 M, 1972) is fully disbursed. Metohija Multipurpose Project (Loan 1360-YU, US$54 M, 1977) disbursements amount to USt22.3M (39%). Due to engineering and management problems, implementation is about 2 years behind schedule, but the position is improving and disbursements should now accelerate. Kosovo's share under Agricultural Credit I project ($2.4 M) is fully disbursed. The Kosovo Agricultural Development Project (Loan 1993-YU) disbursements amount to US$3.2M. Implementation is slower than expected due primarily to slow processing of sub-loans by KBP. Disbursements under Agricultural Credits 11 and III, however, have been slow. Although funds have been nearly fully committed, disbursements at January 31, 1983 were only t4.9 M (55%) and $2.4 M (19%) respectively. The reasons for this are complex and include: (a) in some cases, implementation aifficulties in disbursing loans to individual producers; (b) inadequate follow up and sub-project supervision by Kosovska Banka (KBP) and Basic Banks; (c) staff constraints and unsatisfactory administrative and operational procedures within KBP, (d) and inadequate management procedures within KBP.
1.19 While performance under previous Bank agricultural projects in Kosovo is good compared to many other countries, it is still not satisfactory, particularly in relation to several other sectors in Yugoslavia. Procurement continues to be difficult, and serious problems arising from inefficient administrative and management procedures within KBP cause delays in submission of IBRD withdrawal applications. The government is seriously concerned about the slow disbursement of World Bank funds. During appraisal discussions, Government and KBP agreed to take steps to accelerate commitments and disbursements and to strengthen KBP operational and management procedures.
1.20 While no PPAR's have as yet been prepared for agricultural projects in Yugoslavia, lessons learned so far from Bank agricultural lending operations in Kosovo include, inter alia, the need for: (a) project preparation to be well advanced; (b) reducing individual sector loan processing times; (c) stressing balanced development between primary agricultural production and agro- processing; (d) strengthening sub-project appraisal and supervision and improving farmer access to credit; (e) strengthening supporting services for the IS; (f) improving staff training; and (g) improving management and stressing the development role of the banks. The proposed project design embodies these lessons of experience.
II. THE PROJECT AREA
2.01 Within Kosovo, 12 of the 22 Communes (see map) were selected by the Government for regional development as they have; (a) comparatively low per capita incomes; (b) low social sector employment; and (c) considerable agricultural potential and limited alternative development possibilities. They cover an area of 485,000 ha, about 44% of the provincial total including about 49% of the total Kosovo agricultural land. Population, Agricultural Land and Per Capita Income by Commune is given in Annex 3, Table 11.
Population
2.02 Total project area population is 637,000 (1981) in 79,600 households averaging 8 members each. About 30% of households are non-agricultural, 50% are entirely agricultural, and 20% are mixed, deriving income from both farm and non-farm sectors. The population is largely rural. Population projections for 1985 and 1990 suggest 0.7 and 0.8 million people in the project area with consequent implications for fooa and employment demandsi.
Employment and Incomes
2.03 The social sector (mostly non-farm employment) provides work for 30,000 persons from the total economically active population of around 160,000. Kosovo social sector employment averages 100 per 1,000 inhabitants, but in the project area, such employment averages only 50, ranging from 29 in Dragas to 75 in Lipljan. -7-
Climate
2.04 The climate is continental except for the Metohija area where it is largely Mediterranian. Annual precipitation ranges between 580 mm and 800 mm in the main agricultural areas. Precipitation peaks in October through December, with monthly totals ranging between 60 and 100 mm, and is lowest in July through September, the principal growing period. Temperatures are lowest in January, averaging below zero in most areas other than Metohija. Frost free days number about 190 annually in Kosovo and about 216 in Metohija. In this climate, winter cereals predominate and double cropping is not generally possible. Supplemental irrigation can give substantial yield increases.
Topography and Soils
2.05 The generally rolling to hilly area is disected by four rivers and surrounded by mountains reaching as high as 2,800 m. The major agricultural areas are the river valleys ranging in altitude from 300 to 700 m above sea level. Only Dragas, a mountainous commune with a small area of valley soil, is outside the river systems, the plains ot which cover 1,500 km2 (30%) within tne 12 communes. Rolling and hilly areas occupy a further 2,000 km2 (40%) and the mountains account for the remaining 1,354 km2 (30%). Alluvial soil areas vary from poorly drained clays to silts, in some cases, overlying gravels. They are generally moderately acid, deficient in nitrogen and phosphorus, but with adequate potassium. If adequately drained and fertilized, these could produce satisfactory annual and perennial crop yields. Soils in the rolling areas are mostly suited to annual crop production. Steeper areas, where cultivation is constrained by steepness, shallow soils or rock outcrops, are best suited to pasture and meadows for livestock production.
Water Resources
2.06 Both surface and groundwater resources are generally adequate for agricultural needs, although availability is seasonal and summer shortages occur. The five main river systems, Metohija, Beli Drim, Ibar-Sitnica, Lepenac, and Morava, have an average flow of 100 to 150 m 3/sec. Groundwater resources, not yet fully explored, include three main types of aquifers. These resources are being studied under a program financed in Loan 1993-YU.
Land Use
2.07 The project area has about 175,000 ha under cultivation distributed by sector and crop as shown in Table 1 below: - 8 -
Table 1: Project Area Cultivated Land Use
Sector Total Crop Individual Social ------'(000 ha------
Cereals 109.U 75 11.0 38 120.0 69 Industrial crops 2.5 2 4.3 15 6.8 4 Vegetables and potatoes 10.5 7 0.1 - 10.6 6 Fodder crops 16.4 11 1.5 5 17.9 10 Orchards 4.5 3 6.0 20 10.5 6 Vineyards 3.0 2 6.4 22! 9.4 5
Total 145.9 100 29.3 100 175.2 100
7% 83 17 100
2.08 Current land use in Kosovo and the project area by sector is shown in Annex 3, Table 13. Crop yields by sector vary considerably according to soil and elevation.
Livestock
2.09 About 95% of farm households own cattle, 18% own sheep and, in certain areas, about 14% have pigs. Since the total livestock population consists of about 190,000 cattle, 170,000 sheep, and 20,000 pigs, most cattle and'sheep units comprise less than 50 head and are integrated mixed cropping livestock farms. Pig production is based on two or three sows fed on household food wastes and crop by-products. The only specialized livestock units are the larger sheep flocks on pasture lands, and mini dairy farms developed under World Bank agricultural credit projects. During the last 5 years cattle numbers have declined slightly; sheep and pigs declined up to around 1979 but have since increased.
Fertilizer, Agro-Chemicals, and Farm Inputs
2.10 Fertilizer consumption on cropped land probably averages about 300 kg/ha which is less than the Kosovo average (about 330 kg/ha). Little or no fertilizer is used on meadows and pastures. Fertilizer and seed distribution during the last five years in the project area was as follows:
1977 1978 1979 1980 1981 …------…tons------Fertilizer 25,700 29,323 27,689 34,775 42,243 Seed - Wheat 1,690 2,760 *l,960 1,872 n.a. Maize 930 1,630 2,030 233 n.a.
Fertilizer and agro-chemicals are distributed through 73 cooperative depots (average 8.8 settlements and 2,000 ha of cultivation per depot). Quantities available vary, and although average consumption is low, areas exist where fertilizer consumption is high. Deliveries tend to be irregular as factory and cooperative storage space is restricted. The peak usage periods are during the wheat planting in October-November, and maize planting in May-June. Most fertilizer stores are poor quality and too small. Farmers travel up to 25 km to collect supplies. Agro-chemicals, herbicides, veterinary medicines, and livestock concentrate feed are also sold through cooperative retail outlets. All farmers may purchase from these outlets. Seasonal credit, however, is available only to those formally "associated" with the cooperative. "Associated"!! tarmers, who account for only 13% of farmer households, agree to sell their basic crops only through the cooperatives which in turn resell to the Agro-Kombinats, especially Zitopromet. Furthermore, the density of cooperative depots is not sufficient to provide most farmers with reasonable access to these input supplies. An additional constraint is rural access roads, which, in too many cases, are anything but all-weather, even for horse-drawn transport. Seed supplies are obtained from other parts of Yugoslavia, tested in Kosovo by the Bio-technical Institute, and multiplied on social sector farms for distribution. A new seed preparation and cleaning plant in Klina with 20,000 tons annual capacity is expected to become operational in 1982 and to supply most of the Kosovo seed needs.
Rural Roads
2.11 Kosovo has an institutional structure for the construction and maintenance of roads similar to arrangements in other Republics. National highways and regional roads are the responsibility of the Provincial Self Management Community of Interest (SIZ) for Roads. Local roads are the responsibility of the Commune Governments which have their own SIZ for Roads. Village and farm roads are the responsibility of the local communities.
2.12 The Provincial SIZ in Kosovo is well staffed with engineers and other professionals for the performance of its organizational, management and supervisory role. It does not have any direct implementing or operational responsibilities as its work, both maintenance and construction, is carried out under contract by other organizations. The Commune SIZ's are less well staffed, although most do employ or have access to professional staff, either from a provincial organization such as the Provincial SIZ, from special professional advisory enterprises set up by a Province or Republic, or from consultants. Kosovo Province also has a Work Organization for roads (PUT) which carries out under contract the maintenance work for the SIZ on the highway and regional roads. In addition it bids for, and frequently wins, construction or improvement contracts let by SIZ for this same road network. Most communes have parallel arrangements for the carrying out of the construction and maintenance work on their roads.
/1 'Associated' farmers are those who have formerly pledged, on a long-term basis, their land and labor to associate with an Organization of Agriculturalists (OA); 'cooperants' are regarded as all other farmers who cooperate in various ways with an OA or social sector organization, such as hiring machinery, growing a particular crop on an annual contract basis, purchasing fertilizer, and so on. - 10 -
2.13 Finances for works on local roads are raised from a number of sources including (i) allocations from the commune's budget; (ii) taxes on salaried employment; (iii) contributions from cooperatives and social sector enterprises; (iv) taxes levied on farmers and other self-employed persons; (v) registration fees for vehicles, and (vi) contributions by villagers. These funds are distributed among construction and maintenance road programs by the commune governments. However, in the past, the tendency has been to concentrate on construction of new roads or upgrading existing roads and tc, neglect the maintenance needs of the rest of the road system. This has resulted in a significant back-log of maintenance work and in many cases caused roads to deteriorate to a stage where they are only passable during dry seasons or they are extremely rough and, accordingly, result in high transport costs and appreciable crop losses at times. For transport services to rural areas to be improved and made more reliable, it is imperative that more attention and resources are allocated to the maintenance of existing roads
III. KOSOVSKABANKA, PRISTINA
(The Borrower)
3.01 Kosovska Bank, Pristina (KBP) is the major lender for agriculture and industry in Kosovo; about 90% of all institutional financing is being channelled through KBP.
3.02 KBP is an Associated Bank comprising 7 Basic Banks (BB) throughout Kosovo (3 are in the project area) and the headquarters (KBP) in Pristina. The Banking Law limits the Associated Bank's banking functions to those mainly involving foreign borrowing and exchange transactions. The BBs, however, carry out all other banking functions. KBP is the borrower under the Agricultural Development Project (Loan 1993-YU, US$90 M), is a participating bank in the first, second and third agricultural credit projects (Loans 1129, 1477, 1801-YU, US$29.2 M), is the channel for funds disbursed under the Ibar-Lepenac (Loan 777-YU, US$45 M) and the Metohija Multipurpose projects (Loan 1360-YU, US$54 M) and the Industrial Credit lines. Within the framework of the Kosovo social plan, KBP is the major lender for agricultural and industrial projects; about 90% of all Kosovo institutional financing is being channelled through KBP. An organization chart is given in Annex 4, Chart 1.
A. Resource Mobilization
3.03 Like most Associated Banks throughout Yugoslavia, KBP dominates the mobilization and allocation of financial resources in the Province. KBP is the primary channel for disbursing the proceeds of the "Federal Fund for the development of the Least Developed Regions" which is the source of about 60% of the funds invested in Kosovo. In addition KBP is solely responsible for mobilizing financial resources from foreign sources and handling of foreign exchange portions of investment projects. During the plan period 1976-80, KBP was responsible for financing investment projects amounting to Dinar 68.4 billion ($3.6B). The investments planned in the Medium Term Plan for 1981-85 for the Province amounts to Dinar 137.3B ($3.9B) in 1981 prices. The main source of finance will continue to be FNP which will provide Dinar 86B (63%) of the investments planned. Foreign funding including IBRD is expected to provide Dinar 23B (17%). KBP will be associated with the authorization, financing and implementation of no less than 90% of the 1981-85 Kosovo investment plan. - 11 -
B. Financial Performance
3.04 KBP's financial policy is not to generate maximum profits, but to provide services, especially to the 'founding investors', at the lowest cost consistent with maintaining equity and covering operating expenses. in its role as the Associated Bank of Kosovo, it also has the responsibility for allocating financial resources in the Province, particularly the FNP funds. KBP's financial and operational performance is considered below with reference to those policy objectives. Key financial and operating data for the period 1979-81 are given in Annex 4, Tables 1 - b.
3.05 Loan Operations. KBP has maintained a satisfactory record in the provision of financial resources to its members. KBP's total loan portfolio (Annex 4, Table 4) increased from Din 50 B in 1979 to Din 97 B in 1981 (95%). However, the real increase was just over 1%. Within this total, short-term loans, which provide working capital needs of enterprises, increased from Din 13.b B in 1979 to Din 21.6 B in 1981 (59%)(real decrease of 20%) and long-term loans, wnich provide mainly long-term capital investment needs of enterprises more than doubled from Din 36 B to Din 75 B (real increase of 9%). During 1979-81 loan approvals for agriculture and agro-industry (Annex 4, Table 6) increased nearly five-fold from Din 1.5 B to Din 7.1 B representing a real increase of 59% annually. The agricultural loan commitments were made predominantly to the social sector with only about 11% of the 1981 total allocated to the individual sector.
3.06 Resource Position. The growth in the loan portfolio was financed from long-term borrowing which increased by Din 31.7 B (98%) from 1979-1981. Federal and Republic funds remained the largest sources of finance and accounted for about 65% of the long-term borrowings in 1981 (80% in 1979). KBP's foreign currency borrowings and deposits increased five-fold from Din 4.5 B in 1979 to Din 21.5 B in 1961 (118% annually).
3.07 Profit Performance. Income and Expense Statements for 1978 through 1981 are presented in Annex 4, Table 3. Given KBP's stated objectives, profit performance has been satisfactory, although 1981 registered a down-turn compared to 1980, net income declining from Din. 1,474 M (1980) to Din. 688 X (1981), due mainly to an increase in borrowing costs. In real terms, however, net income declined by 66%. As a percentage of interest earned, 1981 interest paid amounted to 78% compared with about 45% for 1979-1980, indicating a narrower interest spread. This could be due to a management decision to curb rising profit trends, or a result of a sharp up-turn in borrowing costs. Interest earnings accounted for some 88% of operating income in 1981. Interest earned as a percentage of the total loan portfolio, however, shows a declining trend from 6% in 1979 to just under 5% in 1981. Consistent with their objective of providing banking services at the lowest cost, KBP has managed to keep its administrative expenses as a percentage of operating income -- just under 12% in 1981 -- fairly constant over the past years.
3.08 Financial Position. KBP's audited Balance Sheets for 1979-1981 are given in Annex 4, Table 1 and key financial ratios and growth indicators in Annex 4, Table 2. Yugoslav banks do not have formal financial policies concerning their operations such as exposure limits and maximum debt to equity ratio. The bank, however, generally follows prudent banking practices. KBP has maintained its key financial ratios although some of its foreign obligations have been serviced by the National Bank of Yugoslavia and some of the Dinar debt to the Federal Fund has been rescheduled. KBP's total assets - 12 -
reached Din 113.4 B by the end of 1981 with long-term loan investments accounting for 67% of total assets. KBP's liquidity position is acceptable, with a current ratio at the end of 1981 near 1.1. KBP's debt/equity ratio was around 9 in 1979-80, and registered an increase to 11.5 in 1981. Given the proportion of Federal and Republic funds (which have more the character of managed funds) included in the total debt, the ratio remains satisfactory.
C. Arrears
3.09 The portfolio affected by arrears increased from Din 20.2 B to 30 B (50%) from 1979-1981. The maturities in arrears over 3 months at December 1981 amounted to Din 3.2B or 4.3% of the total long-term loans outstanding. As a result of mutual unlimited responsibility of members, overdue loans will be either rescheduled or enterprises which experience loss or financial difficulties will be rehabilitated with no loss to the bank. Due to this practice, the actual loan write-offs have been negligible in the past. Nevertheless, KBP needs to pay more attention to improving the quality of its portfolio and maintaining the arrears within a reasonable level (about 2%) of outstanding long term portfolio. Improving KBP's practices, performance and orientation are major objectives of the proposed project.
IV. THE PROJECT
A. Objectives
4.01 The proposed Project would be the first Bank financed program aimed exclusively at promoting individual agricultural sector development in Yugoslavia. This represents the first integrated approach to rural regional development in the Province. It specifically addresses the low productivily of the individual sector, a factor that has contributed significantly to thle chronic underdevelopment of the region. The Project's objective is to focuas on the 12 least developed Communes, to: (a) increase agricultural production; (b) improve rural incomes and employment opportunities; (c) increase capacity utilization of existing agro-processing facilities; (d) increase individuaL farm sector incomes; and (e) reduce income disparity between less developed and more developed Communes, and between the individual and social sectors. The strategy would be to use an integrated regional development approach to:
(i) increase IS on-farm investments for livestock, crop, fruit and vegetable production;
(ii) finance cooperative incremental fertilizer purchases for sale to small farmers;
(iii) strengthen and improve provincial services including marketing opportunities for IS farmers;
(iv) upgrade farm access roads and provide for their improved maintenance;
(v) support tne Kosovo land consolidation program by providing additional equipment for the Geodetic Bureau and technical assistance in land consolidation to 2 communes;
(vi) improve rural communications by providing equipment and staff training for the Kosovo radio stations; and - 13 -
(vii) contribute to institution building within KBP, the Federation of Cooperatives (FC), and IED, as well as other provincial services including agricultural extension, veterinary, and cooperatives.
B. Description
4.02 The project would consist of an investment and agricultural credit program, extending over 5 years. Sub-project commitments would be concluded in 4 years and disbursements within 5 years (Annex 2).
1. Primary Production Investments
(a) Irrigation and Drainage
4.03 Irrigation development would entail the reconstruction and expansion of an antiquated 4,UO0 ha irrigation scheme consisting entirely of earth canals and a temporary weir which has to be reconstructed annually. Considering the type of system, past maintenance has been satisfactory. The current system is probably over a century old, involving the diversion of water from the Decani-Bistrica river into earth canals with inefficient flood systems of water application. The project would enable existing water to be more efficiently used and would significantly expand the area to be irrigated. It would include: construction of a diversion weir including 7 hours night storage capacity on the Decani-Bistrica river with spillway and shute; the laying of primary (23.2 km), secondary (69.8 km), and tertiary (400 km) conduits to deliver 1 liter/second/ha for sprinkler irrigation with a pressure of 3.5 atm at the nozzle; drainage on about 600 ha and soil improvement on about 1,000 ha; construction of the necessary service roads to support the agricultural development; and provision of staff for the BOAL Bistrica for construction, supervision, and scheme management. About 1,200 individual farmers in the irrigation sub-project area, each with an average farm size of about 3.0 hectares, would be supplied with mobile sprinklers and other irrigation equipment on credit. The base investment cost including a 15% physical contingency but excluding price contingencies, is estimated at 24,000/ha (December, 1982 prices). Strengthening of the planning and advisory capacity of the SOUR Water Economy-Pristina (Annex 5, Chart 1) would include tne local financing of three additional professional posts for three years (para. 5.24).
4.04 Drainage and flood control development would involve drainage works on a selected area of about 1,140 ha, and related watershed flood control and anti-erosion works in Vitina Commune. The main outlet drain is already completed, and project investments would be secondary canals, underground drainage and watershed erosion control, together with land consolidation. About 560 families would benefit directly. PIRO Agro-Morava would be the implementing entity. The drainage work with land consolidation, is estimated to cost about $2,120/ha including a 15% physical contingency.
4.05 Maintenance. Improvement of maintenance capabilities is also an important objective of this sub-component of the project. Under this sub-loan, the BOAL Bistrica would be required to ensure that its BOAL - Hydroeconomy - would employ suitable staff in adequate numbers for operation and maintenance of the investment project to ensure the continued availability of future water supplies. - 14 -
(b) On-Farm Development Credit
4.06 Development credit would be limited to IS farmers. It would be a continuation of similar investments made under previous Kosovan agricultural projects including the three national agricultural credit projects. The project would provide for investments in labor intensive activities designed to increase production of meat, milk, fruit, grapes, honey and vegetables. Investments would include improved livestock (sheep, dairy, pigs, beef, bees), animal housing and respective equipment, pasture and meadow improvement, orchard and vineyard establishment, and agricultural machinery. Loans for some 300 farmers from villages deficient in tractors and attachments would be provided with contracting units comprising a 40-h.p. tractor and attachments at a total cost of about $20,000 per set.
4.07 An additional 400 farmers in other areas would purchase supplementary equipment for existing tractors to lengthen the contracting season and provide services to neighbors. The equipment would include fertilizer distributors, ploughs, harrows, mowers, side-rakes, trailers, sprayers, potato diggers, and hay balers. In selected areas where groundwater resources are adequate, about 400 farmers would receive credit to construct wells or a pumping platform with water access, to install diesel powered pumps and delivery pipes and sprinklers.
4.08 The total number of loans is expected to be about 5,000. Also, about 11,600 individual sector farm families would benefit from increased fertilizer use, agro-chemicals and other modern technological inputs which would assist them to diversify crop production and increase incomes. The actual number of investments for each farm type would be kept flexible according to market conditions and individual demands. Project appraisal, however, has been based on sub-loan numbers as follows: dairy 1,500, sheep 700; small-scale irrigation 400; orchards 1,800; mechanization 700; and 12,600 rainfed crop farms involving annual inputs and technological changes only. Key assumptions used for preparation of farm models are given in Annex 3, Table 5.
(c) Incremental Credit for Fertilizer
4.09 The project would help finance incremental fertilizer inputs targeted at the individual sector farmers. Current consumption in Kosovo is about 116,000 tons per year, about 197 kg per ha of agricultural land. About 70% of fertilizer use is in the individual sector. To encourage increased fertilizer solely for use by the individual sector, the project would finance an estimated incremental 36,000 tons over the five year period of the project. Fertilizer financed under the project would be made available to all the Organizations of Agriculturalists (OA's)i/ in Kosovo. Fertilizer prices in Yugoslavia to farmers are 15% higher than current world prices. Currently, there is no direct subsidy of fertilizer prices to farmers by the Government. Kosovo, however, provides a grant of 10% to Provincial fertilizer factories to defray the manufacturing costs for that portion of fertilizer they make which is distributed and sold in Kosovo.
1/ Organizations of Agriculturalists are associations of individual farmers grouped into agricultural cooperatives, basic cooperative organizations or basic organizations of cooperants, all of which are associated legally with the Federation of Cooperatives. - 15 -
2. Farm Service and Marketing Investments
(a) Cooperative Agri-service Centers
4.10 To improve input availability, market access and the range of services provided by cooperatives, about 36 Agri-service Centers, one run by each OA in the project area, and about 60 smaller depots would be constructed or rehabilitated. Each would include fertilizer and grain storage capacity; offices for managers and agricultural extension agents; dangerous goods storage; fuel pumps and space for pharmaceutical and veterinary supply storage. Where applicable, the centers and depots would include a milk collection center. About 30 such milk collection centers would be included. Each OA would have a headquarters maxicenter of some 400 m2. In addition, where population and production within a 5 km radius are sufficient, midi- and mini-depots of about 150 m 2 or 50 m2 would be built. The services provided from these locations would vary according to local requirements. Location would also be determined by the improved rural road program, the objective being that over 85% of farmers would travel no more than 5 km to a depot. Final center and depot locations for construction and rehabilitation would be subject to FC approval. The depots would be administered from the Agri-service Center, with an average ratio of 2 - 3 depots per center. Overall these Agri-service Centers are expected to play an important role in promoting individual sector modernization.
(b) Veterinary and Artificial Insemination (AI)
4.11 Investment to improve access to animal health and Al services would include construction of 5 new veterinary stations, rehabilitation of about 20 existing stations and 10 depots, and the construction of around 20 simple shelters for Al. Investments would include veterinary equipment and, to increase staff mobility, 24 small cars. Close coordination between the cooperative and veterinary organizations would ensure the most convenient siting of Agri-service Centers, veterinary and related stations.
(c) Agricultural Extension
4.12 Kosovo individual sector agricultural extension services are provided by OA's, of which 36 currently operate in the project area. Agricultural extension throughout Kosovo is inadequate, characterized by staff shortages, lack of training, absence of clear definition of functions, and inadequate management. Although the existing project area ratio of staff to farm households, 1 to 700, appears favorable, these numbers include managers and non-extension personnel. Furthermore, the 30 staff who are primarily extension workers are multi-purpose personnel who also prepare credit applications, do survey and planning work, sometimes sell inputs, and do cooperative administrative work. Consequently, contact between extension staff and farmers is limited mainly to associated farmers. IS links with research are ad hoc and the few demonstration plots are confined to hybrid maize.
4.13 Under the project, FC would take steps to strengthen extension services by: (a) introducing a division of functions and responsibility between Subject Matter Specialists (SMS) and Extension Agents (EAs) at the commune level; (b) upgrading skills of SMS, EAs, and Cooperative Managers, by providing both initial and in-service training; (c) strengthening FC through the employment of a range of specialists (para 4.17); (d) dividing FC - 16 -
functions between administrative and development divisions; (e) regular reporting, staff supervision, and feed-back; (f) promoting employment of female SMS and EAs. Assurances that these organizational reforms would proceed were obtained from FC during negotiations.
4.14 The criteria used for determining the numbers of SMS and EA would be based on: (a) the level of agricultural practices and needs; (b) the commune agricultural area; (c) the number, size, and dispersion of settlements; (d) the percentage of commune population dependent on agriculture; and (e) project components and phasing. Depending on these factors, eacn OA would ultimately have between 2 - 3 SMS, and 2 - 3 EAs who would be stationed at cooperative depots. Special efforts are being made to recruit women SMS and EAs so that, after 5 years, at least 10% of SMS and 20% of EAs would be women. This is important as women undertake a significant part of the farm work in Yugoslavia. The salary cost of SMS and EA would be met by the Provincial Government, Commune, and OA in the ratio of 50:30:20. Short-term international consultants to conduct special training in agricultural extension and cooperative management would also be employed by FC for a total of 15 man-months, estimatea to cost $10,000/month. International training would be provided for the Extension Director and Rural Communications Specialist. Assurances that FC would employ these consultants in accordance with Bank Guidelines were obtained during negotiations.
4.15 Investment costs over 5 years would include vehicles (160), office furniture and equipment, visual aid equipment, and international technical assistance and training. All SMS, EA and Coop managers would attend annuaL in-service training courses--minimum 2 weeks--conducted in conjunction with FA, FC specialists, and other research institutes. The number of on-farm demonstration plots would be greatly expanded to around 2,000.
Rural Communications
4.16 Including Radio Pristina, 6 Kosovo radio stations currently operale and a seventh is planned. To improve their effectiveness, the quantity and quality of agricultural radio programs, especially for IS farmers, would bea improved. FC, with the assistance of RTV, would conduct an attitude survey throughout Kosovo to provide a basis for producing programs both acceptable to and effective with individual farm families. A rural communications specialist (RCS) would be employed by FC (para 4.17), trained abroad, and would be responsible for advising FC and Radio-TV Pristina (RTV) on rural communications. The RCS would also be a member of the Media Strategy Committee established under the project to advise the radio stations on agricultural programming, and to effectively coordinate project activities and mass media extension. In addition to the international consultant, project investments would include new equipment and vehicles for the six radio stations.
Federation of Cooperatives (FC)
4.17 The Federation, established in 1977, is responsible for promoting cooperative development in the individual sector agriculture. Under the project, FC would coordinate day-to-day project implementation (Annex 5, Chart 1,). Strengthening the effectiveness of FC as a development institution would be a major project objective. Assurances were obtained that by December 30, 1983, FC would appoint 13 specialists--extension, credit, field crops, - 17 - horticulture, livestock, agricultural economics, civil engineering, pasture/meadow, training, statisticians, translators, and rural communications. Investments financed under the project would include 10 vehicles, office furniture and equipment, and a 500 m2 office building. Salaries and operating costs of the above Development Division's thirteen staff would be paid from the Provincial Budget.
Credit Service Improvement - KBP
4.18 To enhance the effectiveness of KBP as a development institution, the project would support a comprehensive program of increased staffing, advisory services and training. A proposal was drafted by KBP management on "Measures to be Undertaken for Improvement of the Management of KBP with the World Bank" (October 18, 1982) and submitted to the World Bank. Many of the improvements suggested by the World Bank have been included as recommendations in this submission. To advise KBP on procedures necessary to strengthen management, improve loan processing and development-oriented services, KBP would appoint, as a condition of effectiveness, a suitably qualified development banking advisor under terms of reference satisfactory to the IBRD.
4.19 KBP's present loan application and disbursement procedures and supervision practices would also be improved under the Project. KBP would analyze the procedures for loans to the individual sector (from farmer through BB, KBP and Credit Board to farmer) and simplify and shorten the appraisal process. Specific improvements proposed were submitted to the IBRD (para 5.12). Assurances that the agreed recommendations would be implemented, were obtained during negotiations. A similar review of disbursement procedures would be undertaken, particularly regarding withdrawal applications for funds from the IBRD.
4.20 KBP's project supervision capacity would also be improved under the Project. Currently, social sector investments are supervised on an ad-hoc basis. Since, however, contact between KBP staff and the Working Organizations and Enterprises throughout Kosovo is regular, individual KBP staff do have some knowledge of sub-project implementation status. No formal procedure exists, however, by which KBP staff regularly visit sub-projects, prepare reports, analyze issues and bring these to management's attention. Especially in the IS, KBP management has little current knowledge of sub-project implementation status. Supervision of IS sub-loans is done largely by OA's, but OA staff are not trained in agricultural credit, appraisal, and supervision. Assurances were obtained during negotiations that KBP would prepare a program for regularly supervising all agricultural sub-projects to be submitted to IBRD for review and comment by August 31, 1983, and that an agreed program would be implemented.
Rural Roads
4.21 The project includes a program of improvements for existing local roads to support the economic and social development of the area. This component is a vital and integral part of the overall development program. A total of about 700 km of existing roads have been selected in twelve communes on the basis of (i) area of agricultural land served and cropping intensity; (ii) numbers of households and population served; (iii) estimated input tonnages; (iv) estimated output tonnages; (v) siting of existing and proposed agri-service centers; (vi) social factors, and (vii) the resulting estimated traffic volumes and types. This information is included in the Project File. The works to be undertaken will be rehabilitation and upgrading to minimal - 18 - standards sufficient to ensure year-round trafficability. The standards to be used will be four meter wide gravel pavement on a six meter wide formation, with side drainage channels, cut-off drains and culverts to provide good drainage. A few short bridges are also included to provide all-weather crossings of permanently flowing streams. As traffic develops in future and available local resources permit, some of these roads may be upgraded to paved (asphalt) standard. During the course of project implementation, as traffic projections, detailed engineering and accurate cost estimates are prepared for the second and subsequent year programs, a few of the project roads--perhaps up to 20%--may be economically justifiable at paved standard initially. In that case, provided the additional funds to meet the increased cost are provided from local resources, these roads will be built to paved standard. The project will also provide a grader for the maintenance of its class 4 and 5 roads for each of the 12 communes to be included in the project.
4.22 The estimated unit costs of road construction to gravel standard, including drainage and culverts is $35,400 per kilometer, including 15% physical contingency and excluding bridges and price contingencies (December 1982). The project cost estimates also include about $2.5M for bridge construction. Villagers and their communes usually contribute 20% for upgrading roads, sometimes in cash but mostly in labor. It is expected that 20% of the cost of the road construction and upgrading under this project will be contributed by the communes.
4.23 Regarding the maintenance of the commune's local road networks, provisions under this project will ensure the availability of the required funds for adequate maintenance and of a suitable organization to carry out the maintenance work. The Government has agreed to provide for each commune, annual estimates of funds needed for the adequate maintenance of the local road networks and the sources and annual estimates of funds to be provided for commune road maintenance. Assurances were obtained during negotiations that KBP will not enter into sub-loans with any participating commune under this component until an agreement is obtained with that commune to (i) designate suitble organizations to be the sub-borrowers for the construction and equipment sub-loans, respectively; (ii) establish or nominate a particular, suitable organization to carry out the road maintenance program; (iii) establish and maintain a Commune Road Fund with separate accounts for construction and maintenance, and (iv) provide evidence of adequate sources of funds for road maintenance; and that the first such agreement between the Borrower and a commune would be made available to the World Bank for review and comment before it is finalized and used as a model for future such agreements.
Land Consolidation
4.24 During the 1981-85 Social Plan, Kosovo proposes to consolidate land holdings on about 30,000 ha of irrigated land and some 5,000 ha of rain-fed land, most of which is individually owned, as a first phase of a long-term consolidation program. Priority is to be given to land within two World Bank assisted irrigation projects (Ibar-Lepenac, Loan 777-YU, Metohija Multipurpose, Loan 1360-YU) on a net area of about 40,000 ha. Each Commune establishes a Consolidation Commission responsible for obtaining agreement from the majority of farmers (minimum 51%), completing initial cadastral - 19 - surveys, classifying and valuing the land, allocating new holdings, overseeing physical works such as boundary clearing and road consTruction, completing final surveys, hearing appeals and issuing new titles- . The Kosovo Bureau for Geodetic and Photogrammetric Work is responsible for all cadastral survey work. To complete the proposed program in an efficient and timely manner, it requires new and additional equipment which would be financed under the project. During 1982-86 it is expected that about 35,000 ha in the 4 Communes affected by the Ibar-Lepenac scheme will be finally consolidated. The project would also finance part of the survey, clearing, boundary marking, and road construction program on about 11,400 ha involving about 3,800 farm families in the project area Communes of Vucitrn and Glogovac. The land consolidation feasibility studies prepared for these two Communes would be submitted to IBRD by October 31, 1983. An assurance to this effect was obtained from Kosovo during negotiations.
C. Status of Design and Project Implementation
4.25 Project implementation began in late 1982. Disbursements are expected to begin shortly after loan effectiveness. Social sector projects (agri-service centers, rural roads, drainage and irrigation, etc.) are in an advanced stage of final design and tendering. The FC's have begun to recruit specialist staff to undertake the program of developing loan applications from the individual sector for processing by KBP.
4.26 Draft tender documentation for the subprojects subject to International Competitive Bidding were submitted at negotiations. Following suggested revisions, final drafts will be submitted for IBRD approval in early April 1983. Detailed designs for typical rural roads and agri-service centers were reviewed at negotiations and, with some amendments agreed with the Borrower, found to be acceptable. At negotiations, the Bank approved the Borrower's recommendations for the lowest evaluated bidder to undertake the final engineering designs for the Decane Irrigation subproject, which are expected to be completed and ready for contract tendering in late 1983.
D. Cost Estimates
4.27 Total project cost, including permanent working capital, physical and price contingencies, including interest during construction and front-end fee, is estimated at US$170.7M (Dinars 10,819.4M) of which 51.8% or $88.5M would be the foreign exchange component. Taxes and duties estimated at US$2.9 are included in the project cost. Unit costs have been based on June 1982 Dinar estimates, and updated to December 1982 to reflect the effects of international price escalation of 3.9% for that period. Foreign exchange costs have also been updated to reflect the impact of the Dinar devaluation in October 1982. A summary of project cost estimates are shown in Table 2. Average physical contingencies of 9Z of base cost (range 5-25%), and price contingencies for 1982 to 198b, which are 21% of base cost plus physical contingencies, have been included. International price contingencies have been computed annually at 8.0% for 1983, 7.5% for 1984, 7.0% for 1985 and 6.0% for 1986-87. Cost estimates are made in USt, since the Government has decided to maintain the competitiveness of exports by adjusting the value of the Dinar to compensate for differences in domestic and international price movements. Detailed project cost and phasing tables are given in Annex lb, Tables 1 and 2;
/1 More background and detail on the land consolidation process is given in Working Paper C-9. - 20 -
project cost and phasing (in Dinars) using local price contingencies is given in Annex lb, Table 3; a project cost summary using local price contingencies is given in Annex lb, Table 4. Details of individual investment models are given in Working Paper C-1 and the FAO/WB Cooperative Program preparation report dated July, 1982 (Project File).
Table 2: Project Cost Summary 1/
Z of Foreign I of Total Local Foreign Total Local Foreign Total Exchange Base Costs ----- Din Mil------U5 Mi
A. On-farm investmenits 1,563.2 1,166.5 2,729.7 24.6 18.4 43.0 43 38.5 B. Rural roads 878.5 641.3 1,519.8 13.8 10.1 23.9 42 21.4 C. Agricultural cooperative centers 194.1 148.8 342.9 3.1 2.3 5.4 43 4.8 D. Land consolidation 75.8 101.0 176.8 1.2 1.6 2.8 57 2.5 E. Irrigation rehabilitation 321.9 696.0 1,017.9 5.1 11.0 16.0 68 14.4 F. Drainage and flood control 88.3 67.3 155.6 1.4 1.1 2.5 43 2.2 G. Radio - rural communications - 46.0 46.0 - 0.7 0.7 100 0.6 H. Institute of Economic Development 0.5 3.6 4.1 - 0.1 0.1 87 0.1 J. Fertilizer credit 89.1 436.2 525.3 1.4 6.9 8.3 83 7.4 J. Federation of cooperatives 12.2 29.5 41.7 0.2 0.5 0.7 71 0.6 K. Animal health 16.2 15.3 31.6 0.3 0.2 0.5 49 0.4 L. KBP - credit service improvement 1.8 15.3 17.1 - 0.2 0.3 90 0.2 M. Extension service 34.3 32.3 66.6 0.5 0.5 1.0 49 0.9 N. Incremental working capital 413.7 - 413.7 6.5 - 6.5 - 5.8 Total baseline costs 3,689.6 3,399.2 7,088.8 55.5 53.5 111.6 48 100.0 Physical contingencies 327.1 313.4 640.5 5.2 4.9 10.1 50 9.0 Price contingencies 788.3 675.5 1,463.8 12.4 10.6 23.0 46 20.6
Total project costs 4,805.0 4,388.1 9,193.2 75.7 69.1 144.8 48 129.7
Interest during construction 2/ 409.5 1,184.4 1,593.9 6.5 18.8 25.3 - -
Front end fee on the Bank loan - 37.0 37.0 - 0.59 0.59 100
Total project financial requirements 5,211.7, 5,607.6 10,819.4 82.2 88.5 170.7 52
/1 Costs at December, 1982. based on Annex 1B, Tables 1 and 2 (exchange rate Din 63 - US$1.00) 2/ International price contingencies were used as follows 1983 - 8%, 1984 - 7.5X. 1985 - 7Z, 1986 - 6%, 1987 - 6%. - 21 -
E. Financing
4.28 The loan would be made to KBP for 15 years including 3 years grace. KBP would on-lend the proceeds to the sub-borrowers in accordance with the terms in paras. 5.18 and 5.19. The financing plan is shown in Table 3 below. The proposed Bank loan of US$79.0 million would finance 89% of foreign exchange costs including interest during construction, and 46% of total financing requirements. Financing of interest during construction for the infrastructure components of the project for up to five years is justified by the financial requirements of the sub-borrowers. Project investments in irrigation, drainage, agri-service centers, and rural roads have long gestation periods and slow build up of cash flows. Without the inclusion of this provision, the cash flow positions of these sub-borrowers during the construction period would be imprudently stretched. The addition of the front-end fee on the Bank loan would make total IBRD financing of $79.0. By November 30, 1983 and thereafter each year, the Borrower would submit to IBRD for review a financing plan for the Program to be financed in the subsequent year. An assurance to this effect was obtained during negotiations. This annual review of future financing would take account of prevailing inflation. Most of the Bank loan would be repaid on the basis of an adjustable repayment schedule, reflecting the composite repayments of subloans by the sub-borrowers. Since IS loans are grouped together and made through cooperatives, an adjustable repayment schedule can be used for these subloans. The remaining balance of this loan would be repaid on the basis of a fixed amortization schedule.
Table 3. Project Financing Plan
Interest Total Total During Front End Project % Share Project Construc- Fee on Financial in Funds Cost tion Bank Loan Requirements Required ------SM~K------
Funds required 144.8 25.3 0.59 170.7 100 Funding sources IBRD 69.0 9.4 0.59 79.0 46 KBP (Federal Fund) 42.8 15.9 - 58.7 35 Provincial Budget 4.0 - - 4.0 2 Sub-borrowers 29.0 - - 29.0 17
F. Retroactive Financing
4.29 Preparation and identification of a number of sub-projects is advanced. So that the momentum generated during preparation and appraisal could be maintained, costly implementation delays and the loss of one growing season avoided, and project implementation speeded up, some preliminary project work (roads, service centers and detailed engineering works) began in late 1982. Expenditures undertaken are made in conformity with Bank criteria. Financing of these expenditures for roads, agri-service centers, and detailed engineering work from July 1, 1982 (appraisal mission departure) up to an amount of US$6.0 million would be eligible for retroactive financing. - 22 -
G. Disbursements
4.30 The disbursement of the proposed Bank loan of US$79.0M would extend over 5.0 years and be made as follows;
(a) subloans for irrigation, drainage and erosion control, extension, cooperative depots, veterinary centers, rural roads and equipment, land consolidation, geodetic bureau and radio station equipment and consultancy services, civil works, vehicles, equipment (US$36.OM), and overseas training and equipment for FC ($1.2M) : (100% of foreign expenditure; 48% of local expenditures);
(b) individual sector subloans for livestock, horticulture, small scale irrigation farm mechanization (US$23.0M): (100% of foreign expenditure; 48% of local expenditures);
(c) 90% of amounts disbursed by KBP for sub-loans for incremental fertilizer purchases;
(d) consultancy services, vehicles and equipment for KBP (100% of expenditures) and for the FC (100% of foreign and 48% of local) totalling together US$1.3M);
(e) interest during construction ($9.4M) 100% of IBRD interest and other charges on the infrastructure components.
All sub-loans would be committed by the borrower by June 30, 1986 except for commitments for individual sector components which would be committed by December 31, 1987 and for short-term fertilizer loans. Disbursements woulcl be supported by full documentation in the case of foreign expenditures. For local expenditures, the Bank would disburse against Statements of Expenditure (SOE), since they would involve on-lending largely for comparatively small borrowers, and would finance small and numerous expenditures. KBP has been using SOE procedures under previous Bank-financed projects. The documentation supporting SOEs would be subject to SDK audit (para. 5.35) and would be retained by KBP for inspection by supervision missions during project implementation. Disbursements totalling about US$68 M (40%) for sub-projects costing more than US$l M equivalent each would be subject to presentation lo IBRD of a satisfactory appraisal report. Annex 2 gives an estimated disbursement schedule summarized as follows:
Bank Fiscal Year 84 85 86 87 88 ---- US$M------Annual 7.2 14.9 24.9 19.7 12.3 Cumulative 7.2 22.1 47.0 66.7 79.0
In preparing the disbursement schedule, account has been taken of the proposed project phasing and past Yugoslav agricultural project disbursement profiles (Annex .2).
4.31 Revolving Fund: A revolving fund would be utilized through the establishment of a special account as a condition of loan effectiveness. The initial deposit would be $2.5 million which would be drawn from the Bank loan. The fund would cover estimated Bank disbursements for 75 days plus about 20% of that amount as a cushion. Establishment of such a fund - 23 - would expedite the processing of withdrawal requsts and would also avoid tying up foreign exchange resources for eligible disbursements while being processed by the Bank. The fund would be established as a separate account with KBP and disbursements from all categories of the loan amount would be eligible for inclusion. H. Procurement
Works
4.32 The construction of buildings, irrigation and drainage civil works, and roads, totalling US$52.7M including contingencies, would be procured by local competitive bidding (LCB) procedures which, at appraisal, were found satisfactory to the Bank. Construction to be financed consists, except for the irrigation civil works, of comparatively minor works and buildings of estimated contract size under $1.0 M throughout the project area. Foreign contractors are permitted to bid, although in the past foreign firms have shown little interest in such civil works contracts.
Goods and Equipment
4.33 Equipment for the irrigation sub-project (pipes and sprinklers) estimated including contingencies, to cost US$17.2M, geodetic bureau equipment, and road maintenance equipment ($3.3M), would be procured by international competitive bidding (ICB) in accordance with IBRD guidelines. Qualified domestic manufacturers would receive a preference in bid evaluation of 15%, or the import duty, whichever is the lower. Due to its specialized nature and the need for compatibility with existing equipment, radio station equipment, estimated to cost $0.8M including contingencies, would be purchased through limited international procurement procedures under which quotations would be obtained from three qualified suppliers. Total ICB procurement would be about $20.5 million. Tractors and related farm machinery estimated to cost about $8 M including contingencies, would be procured over five years using LCB procedures, satisfactory to the Bank, in which foreign bidders would have the opportunity to participate. The market for tractors and farm machinery in Yugoslavia is competitive with both Yugoslav (Zetor, Famos, and others) and principal foreign (John Deere, Fiat, and others) manufacturers maintaining market positions. Service facilities for tractors, combines and equipment are established. These diversified pieces of locally manufactured tractors and equipment would be required gradually over five years and in small quantities. Adequate competition is available among local suppliers (including foreign suppliers' local agencies) to ensure competitive prices. Fertilizer and other goods and services procured for I.S. on-farm development would be purchased in accordance with local procurement practices. Contract Review: Procurement documentation for equipment estimated to cost US$21.3 million would be subject to the Bank's prior review. The contracts for civil works construction and the balance of goods to be procured would be subject to selective post review by the Bank during supervision.
4.34 Consultant Services. Under the project, some 18 man/months of internationally recruited consultancy services would be required (development banking advisor, cooperative management advisor, senior extension training officer, etc.). These staff are expected to cost $10,000 per man month. Their total cost, including salaries, travel, overhead, and related fees would amount to about US$180,000 equivalent. - 24 -
I. Environmental Effect
4.35 The project would have no negative environmental effect in the project area. The agricultural and irrigation sub-projects, through soil erosion and water run-off control, would have a positive effect.
J. Role of Women
4.36 Yugoslavia has made considerable progress with respect to ensuring equal opportunities for women. In Kosovo, women play an important part in the agricultural system of Kosovo. They are responsible for much of the planting and harvesting, as well as being heavily involved in the dairy cow and sheep milk operations, especially on the cheese making side. Under the Project, the extension staff would be expanded with women professionals.
V. Project Organization and Management
A. Institutional Arrangements
5.01 KBP would be the borrower under the Project, and would have primary responsibility for implementing the farm credit program and administering sub-loans to sub-borrowers responsible for the other project components. It will share responsibility for supervision and monitoring of sub-project implementation with the Project Unit (PU), established in the FC.
5.02 The PU located in the FC will have day-to-day responsibility for coordination of project implementation. It will assist sub-borrowers in preparing loan applications, procurement documents and annual implementation schedules and programs. It would act as professional secretariat to the Project Coordinating Committee (PCC). The PU would be staffed with well-qualified professionals in the fields of agricultural economics, statistics, translation, agricultural extension, agricultural credit, field crops, perennial crops, livestock production and civil engineering. The FC secretary, a person of extensive IS experience, was, with IBRD agreement, selected as the Project Director. An assurance was obtained that any new appointment would be satisfactory to the Bank.
5.03 The major function of the PU would be to act as coordinator of all Project related activities of PCCs at the regional and commune levels and all implementing agencies regarding, inter alia, such matters as: (a) preparation and implementation of annual programmes for each component; (b) preparing terms of reference for feasibility studies and designs, and reviewing same; (c) organizing training programmes in each commune and overseeing staff selection for, and implementation of, same; (d) monitoring of extension programmes and farm development plans at commune level; (e) review of physical, financial and institutional performance of the Project in relation to annual programmes and targets and providing quarterly reports on same; and (f) alerting the PCC to questions concerning the Project requiring urgent decision and action.
5.04 Implementation of specific components will be the responsibility of about 50 sub-borrowers, including the communal governments (roads), BOALs (irrigation), BCO's (agri-service centers), the Veterinary Service Organization, Radio-TV Pristina and the Geodetic Bureau for land consolidation in the communes of Glogovac and Vucitrn. - 25 -
B. Project Coordinating Committee (PCC)
5.05 The organizations involved in project implementation will be linked through a Project Coordination Committee (PCC) at the Provincial level and Commune Committees at the Commune level. The creation of this (PCC) highlights the regional focus of this Project. The PCC is the first of its kind in Yugoslavia. It will be an important instrument for sectoral integration as the program proceeds into the implementation phase. It also has an important role to play in facilitating spatial integration: fragmentation is also a problem within Kosovo. This committee will provide an opportunity for airing inter-communal issues that relate to rural development.
5.06 Specifically, the PCC would provide regional coordination and policy guidance, approve annual implementation plans, and resolve major issues. PCC would be the link between Government and the Project. It would be chaired by the President of the Provincial Committee for Agriculture and comprised of representatives of the Secretariat for Finance, the National Bank of Kosovo, the Geodetic Bureau, SIZ for Water Economy, SIZ for Roads, the Economic Chamber, FC, KBP, Agrokosovo, Faculty of Agriculture, Veterinakos, and R-TV Pristina. Also, Commune Executive Council Presidents are invited to attend PCC meetings when matters concerning their particular Commune would be discussed. PCC would report directly to the Kosovo Executive Council; its decisions would be passed to the Project Director in FC, and through him, to similarly constituted commune Project Coordinating Committees and, as necessary, to the participating implementing agencies. The relationship between the coordinating committees at regional and commune levels, the member organizations, FC and KBP are shown in Annex 5, Chart I. Assurances that the PCC and the Commune Committees would be maintained during the project implementation period were obtained from Kosovo during negotiations.
5.07 To spell out their mutual obligations in detail, the sub-borrowers and implementing organizations involved in the Project would sign a self-management agreement (SMA). Receipt of a final, signed SMA satisfactory to the Bank would be a condition of effectiveness.
5.08 The principal agencies involved in project implementation are described below. Project implementation commenced in late 1982 and would continue over 5 years. Provision would be made for a mid-term review by April 30, 1985 of project progress by the Bank, Borrower and FC including a re-estimate of project costs. An assurance to this effect was obtained during negotiations. - 26 -
C. Federation of Cooperatives!/
5.09 The 1981-85 Kosovo Social Plan stresses IS development through intensified association with the social sector and expansion of cooperative organizations. The agency entrusted with this task is the Federation of Cooperatives (FC), whose functions also include advising the Provincial Committee for Agriculture on IS policy issues, playing an important role in IS credit administration and administering the Provincial Fund for Development of Production in the IS (about Din. 60 M annually). FC also assists in the administration of subsidies and premiums at the provincial and commune levels. FC is financed by its constituent members and from the Government: budget.
5.10 Consequently, FC was seen as the institution which, after appropriate strengthening, would be the most suitable agency for the day-to-day coordination of project implementation. Accordingly, the Project Unit was located in FC. One of the chief objectives of the Kosovo Regional Development Project is to strengthen the organizational, staffing and managerial capabilities of FC to make it capable of carrying out the task of promoting and coordinating agricultural development in the IS.
D. Kosovska Banka Pristina (KBP)
5.11 As the borrower, KBP would sign the Loan Agreement with the World Bank, under the guarantee of the Federal Government. It would implement the farm credit program through its three BB's in the project area. On-lending procedures, terms and conditions are described below.
Loan Processing
5.12 Investors first submit applications to the BB which, after an initial appraisal and ensuring that all documents are complete, forward them to KBP. The KBP appraisal process includes the technical, financial, and, in some cases, economic viability of the sub-project, and in many cases includes a field inspection. Appraised applications are submitted to the Credit Board, or, for loans exceeding Din. 50M, the Executive Board, for approval. If positive (few loans are refused), the investor completes a contract with both
/1 The Federation of Cooperatives has undergone significant changes since it was appointed as the project implementing entity. The Federation was originally established as a coordinating body for its constituent members, Basic Cooperative Organizations. Basic Cooperative Organizations are "sub-cooperatives" within larger quasi-social sector agricultural cooperatives called Zadrugas (See glossary in Annex la). Until 1977, there were 24 Commune-sized Zadrugas in Kosovo. Many encompassed up to 75 villages. Administration of the outlying regions was nearly impossible under such circumstances. The legislation that allowed for the formation of Basic Cooperative Organizations in 1977 provided the necessary administrative decentralization of the Zadrugas. Large Zadrugas are now comprised of several Basic Cooperative Organizations. - 27 - the BB and KBP. The legal documentation includes insurance cover, submission of promissory notes to cover the debt service installments, and for individual farmers, 2 personal loan guarantees. For 1SII loans, farmers first apply to an OA, which assists with investment plan preparation, and appraises the applicant's credit worthiness. IS applications are grouped together (minimum 20) before being forwarded to the BB. For IS loans, OA's are the borrowers and on-lend to farmers, who make debt service payments to the OA's. Loan processing usually takes around 6 months, although in exceptional cases, applications can be completed within about 30 days, but may take up to one year. KBP would, under the project, analyse the procedures for IS loans (from farmer through BB, KBP and Credit Board to farmer) and simplify and shorten the appraisal process.
Credit Service Improvement
5.13 KBP is potentially the most important development institution in Kosovo, but it lacks a strong development orientation, particularly in agriculture. KBP has not as yet developed a strategy that promotes agricultural development in Kosovo. It needs to evolve more development oriented policies and related operating and management procedures. KBP would, be assisted in this task by employing a suitably qualified development banking advisor. The advisor's role would be to advise KBP management on procedures necessary to: (a) strengthen management; (b) improve loan application processing and disbursement procedures; and (c) increase the development orientation of the staff and management.
5.14 Agricultural Credit Officers To speed-up the IS loan application process, increase KBP and BB awareness of IS issues, and promote a more development oriented approach towards the IS, KBP would establish a cadre of trained Agricultural Credit Officers (AGO) to be employed by the Basic Banks in order to improve farmer access to credit, shorten sub-project preparation and appraisal and promote supervision of IS sub-loans. An ACO would be stationed in each participating commune (12) and be responsible for individual farm sector loan applications, field appraisal and supervision. Subsequently, the system would be extended to include all 22 Kosovo Communes. The initial training in agricultural credit, sub-project identification, appraisal, and supervision, agricultural banking, rural communications and farm management would be done by an international agricultural credit consultant to be recruited for at least 3 months who would prepare and implement a three month training program.. ACO's would work closely with the cooperative extension service. AGO's would be responsible for the identification, preparation, field appraisal, and supervision of all IS sub-loans. They would prepare for the BB and KBP an initial report on the technical and financial viability of the sub-loan and the applicant's credit worthiness which would be forwarded through the Organization of Agriculturalists. During negotiations, assurances were obtained that KBP would, by October 1, 1983 (a) employ the international agricultural credit consultant under terms of reference acceptable to IBRD; and (b) by September 1, 1983 recruit 12 suitably qualified agricultural credit officers and equip them with vehicles and adequate equipment.
/1 IS agricultural loans involve IBRD and FNP funds only; both resources are first disbursed by KBP. - 28 -
5.15 Access to Credit To increase access to institutional credit for IS agriculturalists, KBP would, in cooperation with FC, review by October 31, 1983 all current constraints on access to creait with a view to increasing the number of potential applicants. KBP would also, under the project, introduce the concept of "package development credits". This would involve first examining all factors affecting an individual farm production system, and then preparing a total farm development plan. The loan would be a "package development credit" including all the parts required to modernize farm operations and increase production including buildings, livestock, machinery, improved seeds and adequate fertilizers. The improved seeds for the first year, and two-year's fertilizer requirements, and the initial seeding for improved meadows, would be capitalized as part of a long-term development credit. KBP would also, in consultation with FC, reduce the number of farmer applications initially to ten, to first be grouped before an OA can apply for investment credit with further reductions as ACOs gain experience. Furthermore, IS farmers who obtain credit would be required to sell through the OA only the commodity concerned with the credit, or alternatively, the amount of produce sufficient to cover the debt service requirements. Assurances that these measures would be reviewed by October 31, 1983 were obtained during negotiations.
5.16 Staff Training While a majority of KBP staff, including those in BBs, have received at least higher school education, and many have university qualifications, no formal and regular system for in-service training exists. This is a major deticiency. KBP would, therefore, employ, by October 31, 1983, a qualified full-time training officer. The training officer would prepare a comprehensive staff training program for submission to IBRD for review by December 31, 1983. The training officer would then be responsible for implementing the agreed training program, which would be revised annually, and cover both KBP and BB staff. Assurances to this effect were obtained during negotiations.
Loan Disbursement
5.17 Disbursements are handled by BB's except for foreign exchange funds which are first handled by KBP. BB's first disburse Dinars on the basis of the invoices submitted by the investor. A reimbursement request is then sent to KBP. On receipt of these forms, KBP reimburses the full amount disbursed by BBs which, in the case of IBRD financed loans, also includes the funds disbursed on behalf of IBRD. The BB is expected to send relevant documentation to the IBRD unit of KBP for processing reimbursements from IBRD. Disbursement procedures between KBP, BB and investors are generally satisfactory with regard to disbursement of Dinar funds. With regard to IBRD loans, however, there is considerable delay in KBP requesting reimbursements from IBRD, notwithstanding that KBP and BB have already disbursed the funds. This is mainly due to BBs, having received full reimbursement of their disbursements from KBP, and having no incentive to send documentation to the KBP-IBRD unit for processing applications. The problem is, generally, not one of loan commitments, but of inadequate internal procedures and management control within KBP. An assurance was obtained that by September 30, 1983, KBP would review with the Basic Banks the process of disbursement of funds by the Basic Banks, the borrower and the Bank for expenditures financed out of the proceeds of the loan, and recommend and implement adequate measures to reduce disbursement delays at all three stages. - 29 -
On-lending Procedures
5.18 In approving sub-loans to OA's involving IBRD funds, KBP would ensure that: (a) sub-projects are technically feasible, have a minimum 12% financial rate of return, and would generate sufficient cash flow to cover the debt service; (b) continuing technical assistance and market outlets are ensured; (c) OA individual farmer cooperation agreements are satisfactory; (d) adequate organizational and staff arrangements are made for implementing sub-projects; (e) adequate seasonal credit is available for sub-borrowers; and (f) appropriate attention is given to the economic impact of sub-projects, including employment, income, and import-export effects. In addition KBP would ensure, for irrigation and drainage sub-projects, that: (i) a cost recovery analysis would be undertaken by the relevant managing organization to set user charges that would be sufficient to recover operation and maintenance costs, and a reasonable proportion of debt service based on an 'ability to pay' criteria; and (ii) arrangements for the use of the irrigated and drained land and on-farm development, would include adequate measures, including provision of technical services and market outlets, to maximise production and user benefits. All sub-project appraisal reports would be available for inspection by IBRD at request, or during project supervision, to ensure that agreed methodologies are followed. In particular, KBP will retain the simplified economic methodologies used to appraise the rural road components for examination and review by Bank supervision missions. In addition, prior to making sub-loans for the subsequent year's rural road programs, KBP will assemble and forward to the World Bank for approval the proposed rural road work program. The results of the economic evaluations, together with the detailed engineering cost estimates and related information, will be taken into account at the time of this annual Bank review. All sub-loan approvals would be reported to IBRD in the semi-annual progress report. Sub-loan appraisals for the Decani Irrigation Sub-project and the Vitina Drainage Project, and any other project where total cost exceeds $1 million would first be submitted to IBRD for review and approval.
On-lending Terms and Conditions
5.19 Project sub-loans would be based on cash flow projections for each investment. Repayment of IS sub-loans would not exceed 15 years, including a grace period of up to 6 years. For investments in agri-service centers, veterinary stations, roads, road maintenance equipment, and RTV, FC, IED, and Geodetic Bureau equipment, repayments would not exceed 15 years including up to 4 years grace. All sub-borrowers would contribute not less than 20% of total investment costs in either cash, kind, or labor. For IS sub-borrowers, the minimum contribution is normally 20% of total investment costs; as cash, materials or individual labor. KBP would, for IS loans, first assess the total sub-project cost including the value of the borrower's labor and material. Should the value of the borrower's labor and materials equal 20% of the total investment cost, including where applicable, buildings, machinerv, equipment and improved livestock, then the sub-borrower would not have to contribute cash. Only FNP and IBRD funds would be used by KBP for sub-project investments. On-lending interest rates in Kosovo for FNP funds, fixed by Yugoslav law, are currently 4.5%. For Bank funds to be on-lent to the social sector, the prevailing IBRD variable interest rate would be charged. KBP charges between 1.25 and 2.75% spread, giving a rate between 12.22 and 13.72% on the basis of the current Bank rate of 10.97%. Because the individual - 30 - sector investors are among those with the lowest per capita incomes in Yugoslavia, the foreign exchange and variable interest rate risk for individual sector borrowers will be carried by the Government of Kosovo. The on-lending rate for Bank funds for these sub-borrowers would be a minimum of 18%. An undertaking has also been reached with the Federal Government for periodic reviews of interest rates on loans to the agricultural sector in order to achieve positive real interest rates over the next three years. These rates compare to projected estimates of inflation in Yugoslavia of 20% in 1983, 15% in 1984 and 15% thereafter. The foreign exchange and variable interest rate risk on loans to social sector would be borne by the sub-borrowers.
Repayment Sources of Funds Contribution Interest Rate Period Years Remarks
IBRD 47% 18% 15 Estimated rate including on- lending margin
FNP 30% 4.5% 15
Investors 20% - - Average contribution
Provincial 3% - Budgetary Government allocation
E. Commune Governments
5.20 Each of the 12 Communal governments participating in the Project would be responsible for selecting and financing the rural roads to be built under the project in their communes. They would also be responsible for ensuring road maintenance and for ensuring that the location and construction of rural roads and agri-service centers are integrated. Project Coordinating Committees at the Commune level would be organized to carry out this planning and coordination task.
F. Organizations of Agriculturalists
5.21 The OA in each Commune will be responsible for planning, building and staffing the Agri-Service Centers to be constructed under the Project. They will also be responsible for recruiting, training and supervising, under guidance from the Federation of Cooperatives, the technical staff responsible for implementing the extension component of the Project. The OA would aLso be responsible for providing fertilizer for cash and on credit to IS farmers in its area.
5.22 Incremental Fertilizer Finance. To ensure the projected improvements in individual on-farm productivity, the project would provide financing for the purchase of fertilizer by the Organizations of Agriculturalists servicing the Communes in Kosovo. KBP would make sub-loans to the OA's for annual incremental fertilizer purchases at a rate no less than 18%. By March 30 of each project year, the Federation of Cooperatives would submit to KBP and the - 31 -
World Bank a statement of the previous calendar year's fertilizer tonnage handled by its OA members. In applying for annual reimbursement from the World Bank for the value of the incremental amount of fertilizer used in the project area, KBP would submit statements of expenditure indicating the volume and value of the incremental fertilizer financed in that year over the previous year to the OA's. The World Bank would refinance 90% of the value of this incremental credit from KBP to the OA's.
5.23 All OA's would be eligible to obtain seasonal fertilizer credit from KBP through the BB's. Annual credit provided by OA's to IS farmers for fertilizer purchases would be on-lent at not less than 18%, with a spread of 2%. In consultation with the research organizations and the Faculty of Agriculture, SMS's and EA's would establish fertilizer norms for various crops according to local climate and soil conditions. The farmer would submit an application to the OA on a standard form, stating intended type and area of crops. The individual would undertake to sell through the OA sufficient produce, agreed upon at the time the credit is granted, to ensure repayment of his debt together with interest. All farmers would have access to fertilizer purchases either by cash or credit, irrespective of whether or not they are formally associated in cooperatives. Loans would be repayable within 12 months. Should an individual sector farmer not repay his loan, he would not be eligible for credit under this project in future years. Assurances that the fertilizer credit would be provided in this manner were obtained from the Federation and KBP during negotiations.
G. Other Participating Organizations and Supporting Servicesl/
Irrigation and Drainage
5.24 Implementation of the irrigation and drainage component would be the responsibility of Bistrica (Decane) and PIRO-Agro-Morava (Vitina) respectively. Three main, closely linked, central organizations have different responsibilities over water development and management (Annex 5, Chart 2). The Kosovo Management for Water Economy, a Government agency, is mostly concerned with policy, water laws, rights and allocation, permits, approval of projects, and financing beyond the scope of self-management organizations. The Provincial SIZ for Water Economy represents the interest of water users of all sectors. Its function is to promote water development projects, to propose water policy, and finance both studies and projects. It is self-financed from taxes and is managed by a Board of 65 members representing all sectors. The Complex Organization of Associated Labor (SOUR), coordinates the activities of 8 Regional Organizations of Associated Labor. To strengthen its ability to implement its role, SOUR would employ for a minimum period of 3 years a suitably qualified and experienced hydrologist, civil engineer, and project economist. The Bistrica Organization of Associated Labor at Decane, would be responsible for implementation and management, of the Decane irrigation sub-project. Bistrica includes 2 Basic Organizations, one for civil engineering construction and the other for hydroeconomy. The irrigation organization employs 21 persons including: 2 civil engineers (one irrigation engineer and one hydraulic engineer), 4 technical assistants for maintenance purposes, and 14 skilled technicians for maintenance. During construction, the Water Economy BOAL would provide overall supervision, while consultants would have technical responsibility.
/1 Further details on supporting organizations and services are given in Annex 7. - 32 -
Operation and maintenance would be done by the Water Economy BOAL suitably strengthened to include a qualified experienced manager, 1 secretary-legal advisor, 1 agronomist/planner, 3 technical assistants, 3 maintenance plumbers, 3 accountants/administrators, and 5 support staff. The Vitina drainage sub-project borrower and manager would be PIRO Agro-Morava, a social sector agricultural Kombinat of Vitina which employs 270 workers including 2 agronomists, 13 high school agronomists, 12 agricultural technicians, and one economist, and farms 800 ha of agricultural land and 12 ha of greenhouse flowers.
5.25 Construction, operation and maintenance of the irrigation scheme will be the responsibility of OUR Bistrica. Responsibility for construction of the drainage system will be vested in PIRO-Agro-Morava.
Geodetic Bureau
5.26 The Kosovo Bureau for Geodetic and Photogrammetric work would undertake the cadastral survey work included in the Project.
Veterinakos
5.27 Veterinakos is the institution responsible in Kosovo for providing veterinary services to the IS. It would be responsible for designing, siting and construction supervision of the veterinary stations and A.I. shelters to be constructed under the Project. It would coordinate closely with the FC and the OA's in each commune.
Rural Communications
5.28 A Media Strategy Committee (MSC) comprised of representatives from IED, Faculty of Agriculture, PCC, local radio stations, target audience (IS farmer), and the FC Rural Communications specialist, and chaired by the Representative of RTV Pristina, would be established by September 30, 1983. An assurance to this effect was obtained from Kosovo during negotiations. MSC would advise radio stations on farm program content, and develop appropriate strategies for improving the impact of mass media IS farmer education.
Rural Road Work Organization
5.29 Road working organizations (PUT WO) can and do bid for works outside the geographic boundaries of their base of operations whether it be a commune, province or republic. These organizations, together with other civil works contract enterprises throughout the country, provide a pool of construction enterprises which is adequate to ensure a competitive environment for road investment contracts. Detailed engineering, cost estimates, bidding documents and contracts are prepared for the SIZ's, provincial and commune, by consultants. These are available in number and expertise adequate to carry out the necessary engineering and other professional consultancy required for this project. In Kosovo, the SIZ for Roads will have a representative on the Project Coordination Committee and has agreed to provide technical advice and supervision to the communes included in this project. - 33 -
Faculty of Agriculture (FA)
5.30 The Faculty of Agriculture (FA) was established in 1974. The Faculty is an autonomous body established by self-management agreement and linked to other organizations both inside and outside the University of Pristina by similar agreements. It is financed partly from public funds (about 70%) and partly by commercial type contracts with other Basic Organizations. Constitutionallv, FA has three functions: (a) basic scientific research, (b) adaptive research, (c) and higher agricultural education. FA contracts out staff for planning and supervising agricultural development projects of various kinds. The Faculty is currently producing about 110 agricultural graduates annually. No courses are provided in agricultural extension or agricultural credit. FA would, under the project, implement special training programs for EAs, SMSs, cooperative managers, and for farmers. FA would also assist with agricultural credit officer training. Assurances that FA would carry out these activities will be included in the SMA.
The Institute of Economic Development (IED)
5.31 lED was established in 1976 and in 1982, became a working organization (RO) within Agrokosovo in order to fill the need for an organization to prepare regional agricultural development programs. IED is self-financed by payments for services provided.
5.32 Under the Project, FC through IED, would annually evaluate the economic, financial and social impact of project investments and programs. IED would report to KBP and PCC using key indicators agreed between KBP, FC and IBRD and outlined in Annex 6. IED would also, under contract to FC and in conjunction with the Provincial Statistics Institute and the Kosovo Price SIZ, monitor and evaluate the effects of Government guaranteed producer prices and other Government subsidies and premiums as they relate to the individual agricultural sector. Assurances that FC would cause these activities to be carried out were obtained at negotiations.
H. Training and Supervision
5.33 The Faculty of Agriculture would, under the project, be the major training resource. The Faculty would develop under-graduate courses in agricultural extension, conduct in-service refresher courses for EAs and SMAs, assist in developing farmer field training, and liaise with FC and KBP in developing training for cooperative management and agricultural credit staff. Priority would be given to training agricultural extension personnel (EAs). Since, however, no EA training is available in Kosovo, the project would provide funds for the appointment of an internationally recruited agricultural extension advisor (AEA) for about 10 man-months. The AEA would prepare extension courses and training materials, help train agricultural extension teachers, and train the initial group of project extension agents to be employed. He would also liaise with the Faculty of Agriculture, the rural communications specialist and RTV Pristina to prepare topics for radio and television programs. The initial EA training would be for about three months.
5.34 No special training is available for cooperative managers. The Project would, therefore, through an international cooperative management advisor (CMA), initiate cooperative manager training, including business - 34 - management and planning techniques,budgeting, human relations and interview techniques. The course would cover about two months. Subject matter specialists,especially those initiallyappointed, would need their skills upgraded. They would complete special training of about 3 months offered by FA. In-servicetraining each year would be provided for SMS, EAs and cooperativemanagers who would attend courses of about 2 weeks duration, to update their skills and knowledge.
I. Accounts and Audit
5.35 KBP would maintain separate project accounts for sub-loan disbursements. FC would also maintain separate project accounts. Assurances were obtained during negotiations,that: (a) KBP and FC would have their accounts audited to internationallyaccepted standards;and (b) would submit the audited accounts to IBRD within 6 months of the close of each fiscal year. Assuranceswere obtained that the auditors would give a separate opinion as to the adequacy of the accountingsystem and internal controls, and whether satisfactoryprocedures are in operation to ensure that SOE supported withdrawals (para. 4.27) have been used for Project purposes. These accounting,financial reportingand auditing procedureswould provide adequate and timely informationto IBRD for project supervision. Past compliancewith similar accountingand auditing requirementsunder other IBRD loans has been satisfactory.
J. Reporting,Monitoring and Evaluation
5.36 KBP would monitor project implementationthrough field supervisionof sub-projectsand through key indicatorsgiven in Annex 6. KBP would make semi-annualprogress reports, similar to those made in other bank-financed Yugoslav and Kosovo projects. The progress report format would be adapted to accommodateany special features of the proposed project. KBP would also implementa program of internalmanagement reportingwhich would indicate to management the status of KBP's overall financial position, sub-loan approvals, loan portfoliostatus, arrears, loan rescheduling,and loan repayment status. Assurances were obtained at negotiationsthat KBP would provide reports and implementmonitoring systems acceptable to the Bank.
5.37 KBP would continuouslyevaluate the impact of investmentsunder the project and would collect and analyze data on costs, benefits, and financial viability of investmentson the basis of suitable sampling.
5.38 Annual progress and evaluation reports would be submittedto IBRD by FC. Furthermore,FC would prepare a project completion report not later than 6 months after the closing date. Assuranceswere obtained during negotiations that FC would produce annual evaluationreports, and prepare a project completionreport in accordancewith the outline to be agreed upon between IBRD and FC.
K. Cost Recovery
5.38 The irrigationand drainage sub-projectswould be financed by 20% equity contributionsand 80% borrowed funds. Irrigationand drainage debt service and replacementcosts would be recovered from water users through charges levied by the implementingagencies. Operation and maintenancecosts associatedwith the irrigationand drainage systems would be recovered through - 35 - an appropriate annual per hectare charge collected by the local fiscal agency of the communes Decane and Vitina. These charges would be gradually increased to full development in order to alleviate the financial burden of farmers during the early years of operations. Deficits incurred would be covered by the Province of Kosovo. The charges would, as with other Bank-financed irrigation and drainage project in Yugoslavia, be based on 'an ability to pay" and are expected to cover operation and maintenance costs, and debt service amortization.
VI. PRODUCTION, PRICES, MARKETS AND FINANCIAL ANALYSIS
A. Production
6.01 By intensifying cropping patterns, increasing use of modern technology, reducing harvest losses, and expanding livestock operations, project farm production would, over ten years, nearly double. Improved supply of inputs, stronger support services and increased area under improved soil and water supply conditions would enable farmers to realize major increases in production of industrial crops (oilseeds and sugarbeet), fruits, meat, milk, and vegetables. Rainfed farms, which cover most of the Project area, are expected to shift about 10% of cultivation from cereals and low yield protato production to higher value crops such as oilseeds and to establish improved meadows to raise fodder production. Farmers receiving new or additional water supply would shift up to 25% of current cultivation into irrigated crops such as vegetables, potatoes and sugarbeet. The Project also would enable farmers to shift 5% to 10% of their land from cereals into high value fruit production. The projected annual incremental production, and its contribution at full development in relation to current Kosovo production is summarized in Annex 3, Table 3.
6.02 The project impact on crop production--especially rain-fed--in the project area would be greater than its impact on livestock production, although an increase in fodder production for livestock feed comprises a large part of the production increment. Also, IS livestock development in the project area is being supported through three nationwide Bank financed credit projects and a portion of the Bank financed Kosovo Agricultural Development Project (para. 1.18).
B. Market Prospects and Channels
6.03 Incremental output from Project farms is expected to be marketed within Kosovo to help meet rising per capita consumption requirements and to reduce meat, cereal, fruit and other food imports into the Province from other parts of Yugoslavia and abroad. Yugoslavia has established export markets and good future prospects for additional exports of many commodities produced on Project farms (Annex 3, Table 2). An estimated 27% population increase over the next decade and rising personal incomes, however, are expected to generate substantial incremental demand within Kosovo which, together with current production deficits, would be in excess of the anticipated production increases under the Project. Although none of the output is expected to be - 36 -
exported, much of it would contributeindirectly to Yugoslavia's foreign exchange earnings or savings (para 7.01) by reducing import requirementsand enabling additionalexports from other Republics. The productionincrement and projected increase in local requirementsare compared in Annex 3, Table 3. The market prospects for specific products and assumptions in the analysis are discussedbelow.
6.04 Per Capita Consumption. Estimates based on household surveys conducted in 1973 and in 1978 show that current Kosovo consumption levels are low relative to other parts of Yugoslaviaand Europe:
Average Per Capita Consumption
Meat 1/ Sugar Fruit (kg) (kg) (kg)
SAPK 1973 13.8 14.3 22.5 1980 (est) 20.6 16.2 27.0 1985 23.6 17.9 30.9 1990 27.0 19.8 35.9
SFRY (1978) 50.0 33.0 51.0
Europe (1978) 75.2 32.0 119.0
1/ Deadweight
The projected levels on which the estimates of future Kosovo requirementsare based, are thus modest in relation to current average levels in Yugoslaviaand Europe.
6.05 Cereals.- Yugoslaviaconsumes domesticallyits entire cereal productionor equivalent,and since 1979, has been a net cereal importer (Annex 3, Table 2). Wheat is used mainly for human consumptionand maize for livestockfeed. Recently,however, especiallyin Kosovo, a substantial portion of the wheat and rye harvests (40,000 tons in 1980) has been used to supplementanimal feed needs. Kosovo currently imports nearly 200,000 tons of cereals annually. Although per capita consumptionis expected to decrease (the 1973 household survey shows Kosovo per capita consumption at about 132% of the national average), due to populationincrease Kosovo is likely to remain a net cereal importer over the next decade. Although 1985 projected animal feed production (270,000 tons) is substantial,recently established large poultry units and other planned livestockdevelopment will increase demand faster than production,even when incrementalareas of irrigatedmaize are considered.
6.06 Vegetables. Currently,Kosovo imports vegetables from Macedonia in order to partially satisfy the requirementsfor the vegetable processingplant in Prizren, and to supply local markets with out-of-seasonvegetables (about 10,000 tons annually). During the next decade, Kosovo production (116,000 tons in 1980) is expected to increase sharply (6.6% annually) following expansion of irrigatedareas. However, per capita consumptionin Kosovo (only - 37 -
81% of national average in 1973) is projected to increase at nearly the same rate, assuming consumption expenditure growth at 3% annually and expenditure elasticity of demand of 0.69. Taking into account a current annual deficit of about 24,000 tons and future needs for the existing processing plant (10,800 tons annually), 1990 requirements in Kosovo will still exceed local production.
6.07 Fruits. Kosovo is currently a net fruit importer. Recent and planned plantings, including those under the proposed Project, are expected to fulfill Kosovo's requirements after 1990, based on consumption expenditure growth at 3% annually, expenditure elasticity of demand of 0.9%, and estimated future requirements for the existing processing plant (11,200 tons annually) in Pec. Yugoslavia has good export market channels for fruit, and although incremental project production would be consumed domestically, it would indirectly contribute to Yugoslavia's foreign exchange earnings by reducing consumption of exportable fruit trucked in from Macedonia and adjacent regions.
6.08 Potatoes. Current potato supply and demand are balanced. Due to population growth, requirements in 1990 are expected to exceed Kosovo production by 5- to 10,000 tons annually, based on expenditure growth at 3% annually and elasticity of demand of 0.60. Incremental Project production, therefore, would be consumed locally, but indirectly would contribute to Yugoslavia's export earnings by enabling other parts of Yugoslavia to increase their potato exports.
6.09 Oilseeds. Incremental oilseed production (sunflower, rapeseed and flax) in the Project area would help to offset Yugoslav imports. Future Kosovo demand is expected to continue exceeding local production. All of the incremental output wcduld, therefore, contribute directly towards foreign exchange savings.
6.10 Sugar. Project area incremental production would be consumed entirely within Kosovo. The existing sugar processing plant at Pec is currently operating at less than 50% capacity, due to raw material shortages. Project sugarbeet output would be produced on contract with this plant by nearby farms which would receive improved water supplies from the rehabilitated Decane irrigation system. Thus, the market and marketing channels for the incremental output already exist. Despite relatively low per capita consumption levels, Yugoslavia recently began exporting sugar, mostly to the USSR and mid-eastern countries, to improve a worsening balance of trade position. In 1980, when the ISO quotas were temporarily lifted, Yugoslavia exported about 300,000 tons. However, in 1981, Yugoslavia again imported sugar. Thus, including sugar refined from incremental Project production at full development (360 tons sugar equivalent), future Yugoslav exports would not exceed the ISO quota for Yugoslavia of 70,000 tons sugar.
6.11 Meat. Per capita consumption is low (21% of the national average), and Kosovo imports about 12,000 tons annually, much of which could otherwise be exported (para 6.12). Incremental project output, therefore, would be marketed within Kosovo to help offset the local production deficit, but would contribute indirectly to foreign exchange earnings. Projected Kosovo meat consumption requirements, based on per capita consumption estimates by the Kosovo Institute of Agriculture and Economics, expenditure elasticity of demand derived from the 1973 survey data, and estimated requirements for the existing processing plant (anticipated capacity of 15,800 tons in 1990), indicate that major deficits are expected in beef and mutton production as shown below: - 38 -
Estimated Estimated Deficit Production Total Demand (Surplus) (1990) (1990) (1990) ------tons------
Beef 21,000 31,500 10,500 Mutton 9,200 9,900 700 Pork 8,500 14,400 5,900 Poultry 14,000 12,400 (1,600)
6.12 Milk. Kosovo per capita consumption (77% of the national average) exceeds local production, and, in spite of ambitious milk production development programs, Kosovo is expected to continue as a net importer during the next decade. Production is expected to increase at about 5.5% annually between 1981 and 1985, and 4.3% between 1986 and 1990. Based on consumption expenditure growth at 3% annually, expenditure elasticity of demand of 0.7%, and population growth at a rate of 2.45% annually, total milk demand is expected to increase by about 4.6% annually during the next decade and to exceed Kosovo production.
6.13 Export Markets. Incremental production of most items, particularly meat and fruits, could augment exports, if domestic requirements are met, through existing well established markets. Yugoslavia has major export markets for meat in the Middle East, Europe and North Africa. Yugoslavia's meat quality in these markets is well-established and competitive and demand in these countries for this quality of meat is expected to remain strong. Currently, principal markets for Yugoslavia's fresh fruits are EEC and East Europe. Increasing demand in East Europe and USSR, and Yugoslavia's close relationship with these countries, indicate that East Europe and the USSRt are expected to become Yugoslavia's major fruit export market. In the long term, it is expected that meat and fruit exports will continue. In the short term, however, priority is expected to be given to meeting domestic demand.
6.14 Marketing Channels. The main channels for marketing produce from -small farmers exist in relation to the market centers established in the small towns throughout the Project area. Most of the marketable surplus of fresh vegetables, a substantial part of the meat, and the domestically consumed portion of fresh fruit (50% to 60%), is marketed in locally maintained markets not subject to price controls. The upgrading of rural roads is expected to significantly improve market quality and increase the marketed volume through the existing channels. Industrial crops (oilseeds, sugarbeet), cereals, vegetables, fruit, meat and milk for processing and marketing to areas outside of local centers are handled through facilities managed by social sector organizations which are members of Agro-Commerce, the marketing organization within Agro-kosovo. Agro-commerce is responsible for coordinating and channelling the marketing of products from member organizations and is a member of a larger regional distribution organization--the United Trade of Kosovo. It comprises the 23 major provincial retailers, over 2,300 shops, 70% of the total retail outlets, and 90% of the total floor space in Kosovo. Agro-commerce is improving and expanding its marketing channels in other regions in Yugoslavia. It would also be responsible for marketing the project's exportable output. The social sector processing facilities, which also are members of Agro-kosovo, purchase raw materials on contract or on - 39 - short term agreement at prices set by the Government (para 6.16). Farmer cooperatives provide intermediate organizations which also purchase farm products on contract or on short term agreement at controlled prices. The marketing channels, therefore, are established and with the proposed improvements to roads and communal cooperative depots and collection centers, facilities would be adequate to handle the incremental production.
6.14 Processing facilities. Existing processing capacity and new plant or extensions for which finance has already been secured are;
Raw Material Processing Capacity ('000 tons)
Capacity (000 tons/year)
Grain storage 143 Flour milling 140 Slaughter ruminants 1/ 15.4 liveweight Slaughter poultry 11.5 Meat processing 82 Cold storage 18 Milk processing 36.5 Vegetable processing 11.2 Fruit processing 11.4 Sugar processing 150 Oil seeds 18 Grape processing 104 Potato processing 21.5 Livestock feeds (grains) 52.2 Maize mills 29.0
1/ Not including commune slaughterhouses.
In conjunction with increasing demand for fresh consumption, the above processing capacity would satisfy projections of provincial production beyond the year 1985. The area also has 20 livestock markets and 21 green markets operated by the Communes.
C. Prices
6.16 Financial prices used for appraisal are based on farmgate prices for primary products prevailing at June 1982 and are shown in Annex 3, Table 4. Investment costs are based on Dinar prices at June 1982, converted to U.S. dollars at the then exchange rate (US$1=Din. 46), and adjusted upwards to reflect both estimated movements in prices--using international inflation rates--to December 31, 1982 and the devaluation of October, 1982. Prices for main agricultural products are administered at the Federal, Provincial and communal levels. Floor prices are established for producer prices; ceilings are set for consumer prices. All are based on a cost plus formula. Farmgate prices move above but not below Government administered floor prices. In Kosovo, guaranteed producer prices are in effect for industrial crops, wheat, and milk. Social sector processing organizations set floor prices for - 40 - butchered meat, potatoes and certain fruits and vegetables. Producers in the IS who are not associated with a cooperative or who have not contracted their output with a cooperative or social sector processing plant, may sell at prices established by market forces in neighboring village "green" markets. Over time farmgate prices have increased marginally faster than retail prices, but short-term negative distortions do occur. Sensitivity analysis has been applied to all financial rates of return to determine the effects of possible changes in key indicators. Details of these are shown in Annex 3, Table 6. Each investment would, prior to implementation, be subject to financial analysis based on prevailing input-output prices.
D. Financial Analysis
Primary Production Investments.
6.16 Financial analysis of primary production investments had been made through representative models for each major investment type to be financed. Actual investments may differ from the models since: (a) they may be of different sizes and local conditions vary; and (b) the investment mix would vary according to market conditions and sub-borrower demand, which itself would be influenced by prevailing financial and economic conditions. The underlying assumptions for changes in cropping patterns, yields, and input requirements are presented in Annex 3, Table 5, and are based on interviews with farmers, operational experience under similar Bank-financed agricultural projects in Kosovo, and from KBP records. The financial rates of return (FRR) vary from 13.6% to 79% (Annex 3, Table 6). All incremental benefits have been phased to adequately reflect the time lag between making investments and receiving benefits. Details of investment models and the technical assumptions made, are shown in Document B-1, preparation report FAO/World Bank Cooperative Program, Report No. 13/82 YUG 18, July 30, 1982. During appraisal, most technical assumptions were found to be conservative, with prices changed to reflect up-dated movements in prices and investment costs.
Irrigation and Drainage
6.17 Financial analysis of the Decane Irrigation subproject and the Vitina Drainage and Flood Control subproject have been based on consultants' feasibility studies prepared and reviewed by the appraisal mission. Key assumptions relating to technical features and cropping patterns are given in Working Paper C-6. The consultants' feasibility studies are also available in the project file documents B-2 and B-3. The financial rates of return of the irrigation subproject is estimated at 18.6% and for the Vitina subproject 16.6%.
VII. BENEFITS AND JUSTIFICATION
A. Benefits
Production, Foreign Exchange, and Institutional Development
7.01 Project investments would accelerate Kosovo economic growth through the development of the IS agricultural sector which includes over .83% of the cultivated land, but which is the poorest and least developed. Project benefits would derive from: improved productivity and incomes of individual farmers through investments in livestock, intensive horticulture, and crop - 41 - production in which small farmers have a comparative advantage due to the labor intensity of the operations; the consolidation of fragmented farmholdings; and increased farmer awareness of new technology through the improvement of farm radio programs and contact with extension services. The Kosovo and Yugoslav economies would benefit directly from (a) increased production of meat, milk, industrial crops, fruit and vegetables to meet growing consumer demand (para. 6.01); (b) indirect foreign exchange earnings and reduction of agricultural imports (para. 7.02); and (c) strengthening of the development institutions in Kosovo.
7.02 The equivalent annual foreign exchange earnings and savings from incremental Project production at full development, if equivalent production was exported or substituted for imports, would amount to the following:
Average Export/ Foreign Incremental Import Price at Exchange Production Port Value (000 tons) (US$iKg) (USt M.)
Meat 2.3 3.71 8.5 Milk and Cheese 1' 16.41/ 0.361/ 5.8 Fruit 41.6 0.29 12.1 Oilseeds 34.7 0.33 11.5 Cereals 35.8 0.17 6.1 Vegetables 12.3 0.14 1.7 Total 45.7
l/ Milk and cheese quantity in million liters milk equivalent, price in US$/liter milk equivalent.
The project's non-quantifiable benefits would include; (a) the improved institutional development of KBP, FC, IED, and other participating organizations through training and through experience gained in preparing, implementing, and evaluating development projects; and (b) fostering of increased cooperation between the individual and social sectors through the individual sector credit program and the expanded agricultural extension service.
7.03 Beneficiaries. About 5,000 individual farm families (40,000 persons), would benefit directly from sub-loans for livestock, horticulture, machinery, and farm inputs, and from the irrigation, drainage, and erosion control sub-projects. 12,600 farm families would benefit from technological changes due to the impact of the improved and expanded agricultural extension service. Moreover, 11,600 farmers would benefit from the impact of increased use of fertilizer provided by the project through short-term credit. Although not quantified, a substantial number of farm families would benefit from the improved access provided by the upgraded rural roads (700 km) which would improve access to markets and input supplies. About 75% of direct beneficiaries are expected to belong to a target group with per capita incomes below US$500. After full development, the average participating farmer's income is expected to rise from US$1,500 per farm family annually to US$2,700 annually. - 42 -
7.04 Employment The project's contribution to expanding employment opportunities in the project area would be significant. Most of the employment created (about 1,100 man/years) would be through more intensified agricultural operations developed under the project, principally derived from more intensive farming practices in dairying ana in fruit and vegetable production. In addition, the project would create some 200 permanent jobs in the incremental staffing of agri-service centers and milk collection stations, as well as substantial temporary employment during the construction period of the project's infrastructure component, especially rural roads.
B. Economic Evaluation
Analytic Assumptions
7.05 Over 60% of the increment in farm incomes at full development would derive from sale of cash crops, meat and milk products which are internationally tradeable and valuea in the analysis in border equivalent prices, adjusted for transport and handling differentials between border and farmgate (Annex 3, Table 7). Farm chemical fertilizer inputs also are vaLued on the basis of adjusted border price equivalents. Farm labor costs are adjusted to reflect the opportunity cost of unskilled labor in Kosovo (para 7.10).
7.06 Domestic transfer payments (taxes, subsidies, and debt services) and price contingencies are excluded from the investment and operating costs. The benefits quantified include the gross value of farm sales and farm consumption of incremental production less investment costs, incremental operating costs, and the net value of farm operations without the proposed investments. Internal Economic Rate of Return (ERR) and Net Present Value (NPV) estimations are done for each of the typical farm models, the Decane irrigation and the Vitina drainage systems, and the Project as a whole.
Technical Assumptions
7.07 The Project would have an anticipated life of 20 years, year one corresponding to the first year of construction. Project implementation would require five years for construction and about five years after construction and installation for production to reach full development. The anticipated phasing of benefit streams and the farm yield and input levels are given in the financial models for each type of investment (Project File B-5). In addition, the following assumptions are made for the economic analyses: (a) for the sheep and dairy livestock analyses, fodder production is not valued and its production cost is treated as input for the meat, milk, and wool, production; (b) for the Vitina drainage system, the investment cost excludes the watershed erosion control costs which would give additional, indirect benefits over a wider area (the erosion control costs, however, are taken into account in the overall project analysis); (c) the Project investment costs exclude the costs for the fertilizer credit component, since the costs of fertilizer have been taken into account in the farm budgets in determining the net value of farm production; (d) the land consolidation costs without - 43 - associatedbenefits are taken into account in the overall project base analysis; (e) all other project related investmentsand costs, including internationaltechnical assistance,training, roads, agri-servicecenters, veterinary facilities,vehicles and equipment, and incrementaloperating costs, have been included in the overall project cost streams (Annex 3, Table 9).
Prices
7.08 Constant 1982 farmgate prices used in the analysis for tradeable commoditiesare derived using World Bank projectionsfor 1995 or recent average unit value of Yugoslav foreign trade (Annex 3, Tables 7 and 8). For other goods, domestic producer prices, adjusted by the standard conversion factor, are used. The export price for milk reflects depressed European market prices largely for manufacturingmilk during seasonal production surpluses. The average value in Yugoslaviain real terms is higher because of the high proportionof drinking quality milk and infrequentoccurrence of production surpluses. Kosovo, in particular,is a production deficit area (para. 6.11). In the analysis, therefore,the local milk producer price adjusted by the standard conversion factor is used. Economic prices used in the analysis are listed in Annex 3, Table 4.
Exchange Rate Adjustment
7.09 A standard conversion factor (SCF) is used to adjust the relationship between prices of traded and non-traded goods for distortion introducedby the tariff regime. Yugoslavia'simport tariff levels in the past have been uniformly low, except with respect to equipmentand machinery, where tariffs are somewhat higher; and Yugoslavia has encouraged exports through moderate rebates on raw material imports. The recent stabilizationmeasures, however, have tightened this regime somewhat and increasedthe rationing of imports. The impact is estimated to have generated a current SCF value in the range between 0.7 and 0.8. In the economic analyses, an SCF of 0.75 is applied to non-traded componentsin the cost and benefit streams.
Shadow Wage for UnskilledLabor
7.10 The main source of surplus unskilled labor is in the less developed rural areas where incomes, productivity,and employment levels are still well below those in the urban areas and in the modern social sector economy. Because of differencesin the economic structuresand the relatively low degree of labor mobility between regions in Yugoslavia, employmentand income levels in Kosovo have remained behind those of other parts of the country. The income of unskilled labor (wages and social contributions)in the Kosovo social sector (Din. 500/day) does not reflect the opportunitycost of IS unskilled labor. The opportunitycost or marginal productivityof rural labor is approximatedby the income per worker in the lower ten percent of agriculturehouseholds. Although agriculturalsector productivityand incomes are increasing in the medium term, average income in the lower 10% of Kosovan households is expected to be less than half of the social sector labor cost over the next decade. A shadow wage rate of 40% of the average social sector net personal income for Kosovo is estimated to represent the economic cost of IS unskilled labor. This rate is expected to increase by 2-3 percent annually in real terms over the project life. Accordingly,a labor conversion factor of 0.40 in year one increasing to 0.55 in year ten is applied to the value of family and hired farm labor in the economic analysis. - 44 -
Economic Rate of Return and Net Present Value
7.11 The economy of Yugoslavia would realize an overall economic rate of return (ERR) from the proposed investments of about 23% (Annex 3, Table 10). The net present value (NPV) of the Project would amount to Din. 3,176M, discounted at 12% the estimated opportunity cost of investment capital in Yugoslavia. The ERRs and NPVs for the representative farm models are given in Annex 3, Table 10 and summarized below:
Economic Economic Net Present Rate of Value at 12% Return on On Base Case Base Case -- (Din M)---
Hill Sheep Farms 1/ 72.2 16 Dairy Farms 1/ -25.1 12 Orchards I/ 31.5 14 Rainfed Farms 3,747.7 51 Small Scale Irrigated Farms 1/ 21.4 18 Decane Irrigation System 2.6 12 Vitina Drainage System 3.7 16
Project Whole 3/ 3,176.8 23
1/ ERR and NPV analyses of on-farm costs and benefits only. 2/ ERR and NPV for rainfed farms component (involve on-farm operating costs but no on-farm investment costs.) and includes investment and operating costs of the agri-service centers, radio, rural roads, and farm machinery/components. 3/ ERR and NPV for the whole project after taking into account the project costs of common elements with NPV amounting to Dinars which are not incorporated in the analyses of farm and system models.
A separate analysis was undertaken for the rural road component, using methodologies developed by the transport C.P.S. department. Based on representative roads, the economic return on this component falls between 14% and 15%. The evaluation procedure to be done for the remaining roads by the Borrower was discussed and agreed during negotiations. This is a simplified version of the above procedure.
Sensitivity Analysis
7.12 The impact of variations in the incremental cost and benefit stream estimates on project and major sub-project viability is indicated by the switch over value estimates summarized in Annex 3, Table 10. These show the percentage change in the element of cost or benefit estimate which would have to occur to cause the ERR to be 12% (NPV at 12% to be zero). The results demonstrate that the Project could retain economic viability even with unexpected changes in cost or benefits. For example, investment costs would have to be 90% above the appraisal estimates to lower the ERR to 12%, or the net operating margin would have to be 23% below estimates to lower the ERR to - 45 -
12%. A year delay in implementation and cost overrun of 10% would lower the ERR to 16%. Tne viability of the investments are most sensitive to changes in either the farm benefits (output prices and yields) or farm operating costs (input prices) which determine farm operating margins. A long-term change in the operating margin of more than 5% is unlikely. Changes of market prices for outputs in the long term are normally followed by parallel movements in prices for raw materials and other operating costs. Usually, only small changes in the operating margins result. The Decane sub-project has a very high unquantified social value, since without rehabilitation of the irrigation system, agricultural and economic development in the densely populated Commune would be severely constrained. The sensitivity analysis (Annex 3, Table 10) indicates that all sub-projects to be financed would still be satisfactory should changes within reasonable likelihood occur.
C. Risk and Uncertainty
7.13 In comparison with other projects in Kosovo and Yugoslavia, this project carries a somewhat higher degree of risk, given its complexity. It is the first project to deal primarily with IS investments and services. On the other hand, the benefits expected are commensurately high since the project touches the key constraints to agricultural development in a neglected region of Yugoslavia. The thoroughness of preparation, and the dialogue established with Government and implementing agencies during appraisal, will help to minimize the risk. A strong commitment to ensure successful project implementation exists, not only with the Kosovo Government, but with the other central authorities including KBP, FC and CA, and the local communes which would have direct reponsibility for implementation. The coordination established during preparation and appraisal between the central authorities and the communes, moreover, has improved the local commitment to the project.
7.14 During appraisal, specific recommendations were made to strengthen the borrower, KBP, and improve credit delivery and operational procedures for which KBP would be responsible. The large number of separate implementing agencies involves a higher degree of risk as they would require close coordination, first at the regional and political level by PCC, and secondly at the commune level by the CCCs. Institutionally, FC would, under the Project, be considerably strengthened to enable it to satisfactorily carry out its role.
7.15 Restrained farmer response for some types of investments may occur due to uncertainty about input availability and changes in input/output ratios. The risk would be substantially reduced by strong Government support to ensure adequate and timely supply of production inputs and supporting equipment and spare parts. The provision, under the project, of credit for purchase of chemical fertilizers also is expected to reduce this risk. The situation has been discussed with the Yugoslav authorities who have provided assurances that adequate resources for carrying out the project would be provided. The strengthening of the agricultural extension and other services for IS farmers, including the farm radio broadcasts, would be evidence of the necessary government support needed to substantially reduce this risk and to increase the rate of farmer adoption of new technology. Government's high priority for this project also would bear on adequate investment funds. Current financial and economic problems throughout Kosovo and in Yugoslavia in general have increased the risk that implementation would be slowed due to shortage of - 46 - local funds. The taechanism unuer this project by which aninual financing plans are to be prepared by the Kosovan authorities and to be reviewed by the World Bank should help to reduce this risk. The impact of price policy on farners incomes and output decisions should be monitored by the Federation of Cooperatives as a policy input to the price control agency (SIZ for Prices).
7.16 Achievement of the projected increases in agricultural and livestock production would be subject to the normal climatic variations which oftena cause harvest losses and affect overall yield levels. A major objective for the irrigation and drainage facilities and the farm machinery to be provided under the project is to help stabilize water supply and soil conditions, and to improve the timeliness of cultivation and application of inputs which would lessen the impact of the occurrence of unfavorable weather conditions.
7.17 Changes in market prices due to external market adjustments or international and domestic inflationary pressures are expected to result, in the long term, in parallel movements in prices of output commodities, raw materials, and operating cost, and thus have minor impact on net operating margins. Considering potential benefits to the economy and individuals in Kosovo, the risks described are acceptable.
D. Fiscal Impact
7.18 The fiscal impact on the Kosovo Government would be minimal, limited initially to Din 252 million (US$4 million) during the development period. The remainder of the project would be financed by loans and borrower contributions. Kosovo Provincial Government does have contingent fiscal liabilities as the risk bearer to KBP of the foreign exchange and variable interest rate risks on KBP loans directed via the OA's to individual farmers.
VIII. RECOMMENDATIONS
General Conditions
8.01 During negotiations assurances were obtained that:
(a) KBP would, by November 30, each year, submit to IBRD a financing plan for those investments to be financed in the following year (para. 4.27);
(b) Kosovo Government would cause the Media Strategy Committee as described in para. 5.28 to be established by September 30, 1983.
(c) FC would carry out organizational reforms and employ the specialists and consultants described in paras 4.12, 4.13 and 4.16;
(d) KBP would implement agreed recommendations on loan processing procedures (para 4.18);
(e) FC would implement the short-term fertilizer program under the conditions described in paras. 5.22 and 5.23; - 47 -
(i) KBP would review by September 30, 1983 its loan disbursement procedures and implement necessary improvements to reduce delays (para 5.17);
(g) KBP and FC would follow the accounting and auditing procedures outlined in para. 5.35;
(h) KBP would implement by October 31, 1983 the measures described in para. 5.15 designed to improve individual sector farmer access to credit;
(i) KBP would employ the agricultural credit officers by September 1, 1983 and the international agricultural credit consultant by October 1, 1983 in accordance with the outline given in para. 5.14;
(j) KBP would employ by October 31, 1983 a qualified full-time training officer, who would prepare a comprehensive staff training program for submission to IBRD by December 31, 1983 for review (para. 5.16);
(k) the Kosovo Government would meet the cost, including salaries and operating costs, of the thirteen additional experts to be employed by FC as described in para. 4.16 and the cost of having IED implement tnis price monitoring system (para. 5.38);
(1) a KBP supervision program would be submitted by August 31, 1983 (para 4.19);
(m) KBP would follow the reporting and monitoring procedures outlined in para. 5.36; and would implement monitoring and evaluation systems satisfactory to IBRD (para. 5.37); and FC would follow the reporting and evaluation requirements outlined in para 5.38;
(n) FC would monitor and evaluate the effects of Government administered guarantee and protective producer prices, and other Government subsidies and premiums as they relate to the individual agricultural sector (para 5.32);
(o) By April 30, 1985, two years after the expected date of loan signing, KBP and FC in cooperation with IBRD would formally review project implementation and projected future costs and policies (5.08).
(p) Kosovo would cause the Geoditic Bureau to submit the land consolidation feasibility studies for the Communes of Glogovac and Vucitrn to IBRD, for review and comment, by October 31, 1983 (para. 4.23).
(q) Kosovo would maintain the Project Coordination Committee and Commune Coordination Committees (para 5.06) and FC would maintain the Project Unit with a director acceptable to the Bank (para 5.02); - 48 -
Conditions of Effectiveness
8.02 (a) appointment of a development banking advisor whose qualifications, experience and Terms of Reference are accept-able to the Bank (para 4.17);
(b) receipt of a signed self-management agreement (SMA) satisfactory to the Bank (para 5.07); and
(c) establishment of the Special Account (para 4.31)
8.03 Subject to the above assurances and conditions the project would be suitable for a Bank loan of US$79.0 million equivalent for a term of 15 years including a 3-year grace period. - 49 -
Annex la
GLOSSARY OF TERMS
AGROKOMBINAT: (AIK) The agrokombinat is a large social sector agri-business which encompasses all aspects of the food system: input manufacture, primary production, processing, marketing, distribution and retailing.
AGROKOSOVO: An umbrella AIK for all 18 agrokombinats in Kosovo. In this case, Agrokosova is a COAL comprised of 18 WOs (the 18 smaller agrokombinats), 101 BOALs, 75 BASIC COOPERATIVE ORGANIZATIONS, an Agro Commerce WO, and the research WO, IED.
ASSOCIATED AGRICULTURALIST: Any INDIVIDUAL SECTOR farmer that has agreed (through a Self-management agreement) to cooperate in some manner with the social sector. This includes membership in ZADRUGAs, long-term production contracts for sale of crops and livestock to the social sector, and similar short-term agreements that are arranged annually.
*ASSOCIATION OF LABOR: A Yugoslav term used in two overlapping meanings: as a broad, generic term synonymous with SELF-MANAGEMENT socialism; in a narrow sense to characterize the relations of workers within a BOAL.
BASIC COOPERATIVE ORGANZIATION (BCO) The basic production unit within large Commune-sized ZADRUGAs. A "sub-cooperative", the BCO is organized on the same principle as the parent organization: BCOs' delegates represent the organization in Assemblies of the ZADRUGAS and also in the FEDERATION OF COOPERATIVES.
BASIC ORGANIZATION OF ASSOCIATED LABOR (BOAL) The BOAL is the basic unit in which the ASSOCIATION OF LABOR takes place. The locus of all economic decisionmaking, the BOAL is an autonomous legal entity having its own income statement and balance sheet. Within an ENTERPRISE the BOAL is the smallest distinguishable technological entity producing a marketed or marketable output.
CHAMBEROF THE ECONOMY: All associations of a province, republic, or the federation constitute a chamber of the economy. It is not only a consultative body; it also has certain quasi-legislative functions, insofar as it prepares and signs SOCIAL COMPACTS with SOCIOPOLTICAL COMMUNITIES and trade unions on behalf of consenting members (ENTERPRISES). - 50 -
COMMUNAL COORDINATING COMMITTEE: (See PROJECT COORDINATING COMMITTEE)
*COMMUNE: The basic unit of decisionmaking in the sociopolitical sphere; its counterpart in the economic sphere is the BOAL.
*COMPOSITE ORGANIZATION OF ASSOCIATED LABOR (COAL): Sometimes called a Complex Organization of Associated Labor. The Yugoslav term for an organization in which several ENTERPRISES have agreed to collaborate in accord with a SELF-MANAGEMENT AGREEMENT. That agreement generally covers the POOLING OF LABOR AND/OR RESOURCES. An ENTERPRISE can be a member of several COALs.
COOPERANT: An INDIVIDUAL SECTOR farmer who chooses to enter into a production agreement with the social sector on a per annum basis.
*DECENTRALIZATION: Under the prevailing Yugoslav usage, the term applies to the process of rearranging political and general economic decisionmaking power to the lowest level of SOCIOPOLITICAL COMMUNITY in whicn such decisions can reasonably be made. The term is also used in a broader sense that encompasses destatization and is close to the use of the term common in other socialist countries.
*DELEGATE SYSTEM: The Yugoslav term to denote the particular form of citizen or worker participation under SELF-MANAGEMENT. Delegates are elected at the level of the smallest unit within a COMMUNE or BOAL and in turn elect delegates at the next broader level, and so on. Delegates have strictly limited terms. They do not give up their prior status as workers; they must solicit the views of their constituency on any important issues on which they will vote; they can be recalled at any time if the constituency decides that its views or interests are not being adequately represented.
*ENTERPRISE: The direct translation from Serbo-Croatian would be "work organization" (WO). Most enterprises comprise several BOALs as their principle units; an enterprise is constituted by a SELF-MANAGEMENT AGREEMENT between BOALs. The stronger and more permanent identity of BOALs is evidenced by the right of BOALs to seperate from the enterprise under certain conditions and either constitute themselves as individual enterprises or join another one.
FEDERATION OF COOPERATIVES; (FC) The Federation of Cooperatives in Kosovo is comprised of representatives from 83 cooperatives (Zadrugas), BOALs, and BCOs. (Approximately 30 of the BOALs are also members of Agrokosova.) A coordinating and planning organization for these agricultural organizations, the FC has decisionmaking power on matters crucial to the sector as a whole. FC's main role is to promote the association of agriculturalists and, through the BCOs, INDIVIDUAL SECTOR development. The FC is governed by a general assembly comprised of two
GMP - Gross Material Product, a measure of total output excluding all "nonproductive activities"; health, education, administration, defense, banking and housing. - 51 -
delegates from each BCO, BOAL, and Cooperative. The Presidency of the assembly (which consists of a President and Secretary) is nominated by the Provincial Government.
HARMONIZATION: The Yugoslav term for the process of compromise that is undertaken to coordinate and achieve consensus on all economic and sociopolitical plans.
INSTITUTE OF ECONOMIC DEVELOPMENT: (!ED) A WO within Agrokosova whose function is primarily research, analysis and planning. Recently, IED has been given responsibility for the preparation of regional agricultural development projects within Kosovo.
INDIVIDUAL SECTOR: Agriculture in Yugoslavia is characterized by the parallel existence of two sectors: the social and individual. The social sector is comprised of AGROKOMBINATS, ZADRUGAS, and other organizations such as veterinary and research stations which operate under principles of social ownership of means of production. The individual sector refers to the large, private sector that dominates primary production agriculture in Yugoslavia. The individual sector owns 84% of all arable land in Yugloslavia, but accounts for only 72% of total agricultural production. Individual sector farms average 2-4 ha. and are usually fragmented into 7-10 tiny plots. Fragmentation and small farm size coupled with low, stagnant productivity and employment opportunities have contributed to making the individual sector the major determinant of overall low productivity in Yugoslavia's agricultural sector.
*ORGANIZATION OF ASSOCIATED LABOR (OAL): The Yugoslav generic term for all legal entities that function by the Association of Labor. This includes such entities as BOALs, ENTERPRISES, and COALs.
*POOLING OF LABOR AND RESOURCES: Financial links between BOALs and ENTERPRISES are established by SELF-MANAGEMENT AGREEMENTS on the pooling of resources. Such agreements regulate the conditions under which one organization temporarily makes financial resources available to another. The arrangement can be a traditional mediunr-term or long-term credit arrangement. It more frequently and increasingly implies the sharing of income and risk under joint pooling.
*PRIORITY ACTIVITY: An economic activity singled out in the SOCIAL PLAN of a SOCIOPOLTICAL COMMUNITY as being of special importance. Through SOCIAL COMPACTS, priority activities have a higher degree of coordination and stronger commitments for implementation in the planning of affected ENTERPRISES than nonpriority activities. They also have the first claim to resources in the financing of investment programs and projects. - 52 -
PROJECT COORDINATING COMMITTEE (PCC): A regional organization set up to be the main link between the Kosovo Regional Development project and the Provincial Government. More specifically, the Committee will provide regional coordination and policy guidance, approve annual plans and resolve major issues. It will meet quarterly, be chaired by the President of the Committee for Agriculture, and report directly to the Provincial Executive Council. PCC decisions are passea to the projecit director in the FC and through him to similarily constituted Communal Coordinating Committees. Delegates from all implementing and legislative organizations involved in the project are represented on the PCC. The duties of the COMMUNAL COORDINATING COMMITTEE are comparable to those of the PCC, but at the Commune level. The CCC is chaired by the President of the Commiune.
*SELF-MANAGEMENT: The Yugoslav term, akin to direct democracy, indicating that decisionmaking power is the exclusive prerogative of individuals who have to carry out decisions or are directly affected by them. Self-management excludes decisionmaking by elected representatives who are legally autonomous throughout their term.
*SELF-MANAGEMENT AGREEMENTS (SMA): A specific form of contract concluded among individuals- for example, on the ASSOCIATION OF LABOR within a BOAL- or among social sector organizations- for example the POOLING OF LABOR AND RESOURCES among BOALs within an ENTERPRISE. The time horizon of such agreements extends over a five-year plan period or longer. Although reversible, tney are normally expected to establish a permanent relationship.
*SOCIAL PLANNING: The Yugoslav term for planning by SOCIOPOLITICAL COMMUNITIES.
*SOCIOPOLITICAL COMMUNITY; The Yugoslav term for a territorial unit having political and administrative functions. Sociopolitical communities comprise the federation, the republics and provinces, and the communes.
*SOCIOPOLITICAL ORGANIZATION: The Yugoslav term embracing the following organizations: The League of Communists of Yugoslavia (LCY), the Socialist Alliance, the Confederation of Trade Unions, the Veterans Federation, and the Union of Socialist Youth.
WORK ORGANIZATION (WO): gee ENTERPRISE.
ZADRUGA (Agricultural Cooperative): The Yugoslav term for agricultural cooperative. In Yugoslavia, there are two types: (a) A cooperative closely associated with the social sector (often part of an AIK) where the farmers are formally associated - that is all labor and resources (i.e. land) are pooled. (b) The second sort is more loosely associated with the social sector. Member farmers share all inputs, but retain private ownership of their land. Zadrugas can be comprised of several OA's. Base costs Totals Iricludiog CootonBeinie
¶ 2 3 4 5 6 Total 0 2 3 4 5 6 Total RoateEsA.
1,INVESTMENTCOSTS
A. ON-FART INVESTTMENTS
DAIRY 1,775,93,242.3 33,T9O.0 4,340.3 119.5 - 13,662,0 1.93903 3.614,6 3.034.2 8,100.0 170.2 - 17,058.3 0.05 0.38 SNOEP 632.2 2,132,6 3,067.4 4,339.0 1,177,1 - 17,149.1 60913 2,509.1 4,879.6 5,830.5 1,676.4 - 15,15.0~0,05 0.29 tROLLSCALE IRRIGATION 161.8 745.8 529,0 008,2 44.5 - 1,470.0 176.6 408.8 680.4 521lo 63.4 - 1,836.00,55 0.62 ORCNAROO 1,010.7 1,704.9 2.253.' 2,319.7 1.809,1 9,854.2 8,110.3 2,005.9 2,883,5 3,116,6 2.047,6 - 11,723.8 0,01 0.32 NECNAWI2ATISN 1,200.92,000.7 2,165,T 8,208,9 - - 6,529.2 1,020.1 2,424.5 2,000.0 1,029.1 - - 7,900.80,0501.63
Sob-Total IN- FOANMINUESSNENTS 4,705.4 9,486.4 12,701.0 12,796,9 3,200.2 - 42,980.55,236.6 11,161.0 16,025.8 17,192.8 4,557,5 - 54,173.7 B. NRORLRADSN
RATDS 2,259.25,116,6 5,933.3 4,300.0 2,859,3 - 20,469.42,202.5 6,093.2 0,199.16,127.3 4,459.8 - 20,201.40.15 0.52 BR1DGES 187,2 422.1 488.2 308,0 231.2 - 1,604.7 223.9 543,9 674,6 523.9 360.7 - 2.327,0 0.02 0.32 NAINTENANCEEQUIPMENT 1,111.5 1,111.31,329.1 - - - 1329,1 0.10 1 1E0109AND DSLPRVOiSION 73.9 107. 19l2.7 139,5 93.0 - 06.2 07.0 215.2 260.3 205.2 140.0 920.5 0.15 0.32
Sob-TotalRURAL 90005 3,631.U1,700.0 6,014.2 4,795.5 3,184.1 - 23,910.04,342,7 7.312,3 9,140.0 7,056.44,960.5 - 32.817,9 C. OARICOI.TURALCOOPERATIVE CENSERS
1. DEPOTS- 1111TONS 440.5 000.7 440.5 440.5 440.5 - 2,422.0 526.0 850.0 618,7 640,1 627.0 - ,021.90.15 1.03 2. DEPOTS- 300 TINS 431.3 431,3 431.3 431.3 431.3 - 2,156.4 510.0 555.7 596.0 634.6 672.7 - 2,974.00.15 0.32 3. NILECOLLECTION CNERTSA
OFFICEF62011URE AND EQUIPMFENT 39.9 39.8 47.8 41.8 19.8 - 199,1 15.7 51.0 66.0 60.5 62.1 - 27b.7 0.15 0.57 NILI,COLLECTION EUIOIFENT 301, 51.0 01.6 81.6 61.2 - 306.1 76.6 05.7 112.0 120.1 95.5 - 420.0 0,85 0.65 FOOLFONPS AND TONES 4, 40.8 40. 8 40,8 4 4.811 - 204.1 40.0 52.6 56.4 60.1 63.7 - 21,5 6.15 0.85
Sub-TotalNILK COLLECTION CENTERS 101.7 131.7 170.2 164.3 141.9 - 709.3 171.1 169,6 235,2 241.7 221.3 - 999, 4. FNAAMNARKETS - 22.1 94.0 22.0 22.0 - 110.1 - 20,4 60,9 02.4 34,9 156.00.15 0.32
Sot-Total NARIC10LTERALCOOPERATIVE CENTERS 973.0 1.240,6 1.096.0 1,000.0 1,035.6 5,290.5 1,162.7 1,695.1 1,500.7 1,556.0 1,615.3 - 7,441.7 D. LANDCDSNOLlIOTI0N
EQUIPMENTi4lCL 0PA9E PARTS 091.2 407,0 - - - - 1,179.0 718.0 546.7 - - - - 1,261.5 5 1 LOADCO.40SLIOATISN 40 SURVEYF 367.9 447.2 456.0 167,2 107.2 - 1.605,6 470.3 626.3 684.9 267.0 203.6 - 2,340.6 0.25 0,2
Sub-Total LANDCINSSLIIATION 1,059,1 935.0 456.0 167.2 183.2 - 2,784.8 1,197.1 1,173.0 624.9 267.5 283.6 - 3,606.1 E. IRRIATINONREIOABILATATION
CIVIL WORKS 165,4 480.4 488.4 - - - 1,172.1 223.6 629.3 674.9 - - - 1,527.9 0.15 0.51 PRIMARYAND SECONDNRY NETW0ORK 3,491.7 3,673,3 408.1 - - 7.573.2 - 4.4993 5,078.1 000.6 - - 10,170.0 0.15 0.65 TERTIARYNETWORK -1,753.1 1,617.6 404.4 - - 3,775,2 -2,259,0 2,235.4 595.1 - - 5,009.5 0.05 0.62 FOARMOPRI44LARO - 1,260.4 - - - 1,260.4 - -1,741.7 - - - 1,741.70.15 1 DRAINAGEAND SOIL IMPROVEMENTS - 51.1 744.1 - - - 1,295.1 828, 1,028.2 - - - 1,867.1 0.15 0.36 0E1008 ANDSUIPERVISION 539.6 165.2 146.8 - 51.6 095.3 212.8 202.9 - - - 1,U 1,1 0.15 0.22
lab-Total IRRIGATIINRENABOLATATISN 734.9 6,549.4 7,930.6 812.6 - - 16,037.5 979.0 8,439,4 10,959.1 1,195.2 - 1,47L22 F. DRAINAGE94D FLOODCONTRIL
1. INFRAOT9UCTOAE
CIVIL 80000 - 30.0 484.1 - - - 785.9 - 380,9 809.0 - - - 1,057.9 0.15 0.50. SOILINPROVEMENT - - 81O.5 ---012 - - 112.6 - - - 112.6 1.15 0.28 -tt FOARMROADS - 110.1 110.1 - - - 220.2 - 141,9 152.2 - - - 294.1 0.15 0.32 t COMPENOTATION - 13.1 22.9 - - - 36.0 - 10.9 21.0 40.5 0.10 t DE00109940SUFERVISION 30,7 36.7 34,9 108.3 93.9 47,3 40.2 - - - 139,4 1.150.2 - o 0 LANDCOI81OLISATIDN - 72.7 53.2 35.5 - - 161.2 - 93.2 73.5 52.2 - - 219,3 0.15 0.2~2
lob-Total INFRASTRUCTURE 36.7 524.4 786,6 35,5 - 1,393.2 43.9 680,6 1,087,0 52.2 - - 1,071,0t.8~,t 2.CR00116 CONSNDL - ~~~~~~~~~~546.0110.4 -- 1,D57.2 - 704.6 705.3 1,409.90.15 0.3 ~ ------
Sab-TotalDR61NAGE AND FLOOD CONTROL 36.7 1,081.21.297,0 25.5 - - 2,450.4 43.9 1,393,31,792.3 52.2 - - 3,201.7 o 1 , 2
EOOIPFNN 073.1 - - - - - 673.1 7710,-0- 770,0 1.1 I1 TECHNICALASSISTANCE 52.0 - - - - - 52.0 5A.4 - - - - - 59.4 0.1 I1
Su-Total 89010 - RURALCOAN0NICATINSO 725.0 - - - 725.0 829.4 - - - - 829,4 H. INSTITUTEOF ECONOMICDEVELOPKEMT
VEHICLES, EDOOFOENT AND FURNITURE 24.5 6.1 - - - - 30.6 28.0 7,5 - - 35.6 0.1 0.65 00E00091TRAINING 11.3 11.3 11.3 - - - 33.9 12.9 13.9 14.9 41,80 S.O I
Sub-TotalINSTITUTE IF ECONOMICDEVELOPMFENT 35.0 17.4 11,3 - - - 64.5 40.9 21.5 14.9 - - 77,3 I. FERTILIZERCREDIT 1.374,9 1,374.9 1,623,2 2,062.3 1,833.1 - ,270.4It429,F 0,340.5 1,952.9 2,039.9 3,486.3 - 10,040.4 0 0.70 J. FEDERATIONIF COOPERATIVES
BUILDIONS 127,6 137.6 - - - - 275,3 160.3 172.2-7 333,1 0.12 0.32 VEHICLES 2.2.3 20.3 - - - - 42.6 26.0 25.5 - - - 51,4 0.12 0.63 0'v EQUIPMENTAND0 OFFICE FUR4INISHIO 25.9 10.0 - - - 30.0 30.1 12.5 - - - 42.6 0.12 0.57 1 COHNSULTANTSAND OVERSEAS TRAINING 144.6 67.0 61.b 29.4 - - 303.7 168.4 85.0 02.1 42.1 - - 377,6 0,12 0
lob-Total FEDERATIONOF COOPERATIVES 330.4 235.6 61.0 29.4 - - 656,4 384.8 295.7 82.1 42.1 - - 094.7 0. ANMANLHEALTN
BUILDINGS 75.2 86.3 0.0. 50,7 45.9 - 346.9 90.0 111,1 011.,6 88.4 70.6 470.7 0.15 0.32 VEHICLES 50.37 53.7 - - - - 103,4 60.0 65.3 - - - - 128,6 0.15 0.63 EQUIPMENT 24. 22.2 - - - - 46.5 29,0 28.7 - - - - 57.7 0.15 0.02
Oub-Total ANIMALHEALTH 150.2 061.2 00,1 51.7 43.9 - 496,0 179.7 207,8 111.6 86.4 71,6 - 657,0 L. KBF- CREDITSERVICE IMPRSSENENT
VENICLES 64.9 - - - - - 64.9 74.3 - - - - - 74,3 0.1 0.02 OFFICEFURNISAING AND EQUIPMENT 07.0 - - - - - 17.0 19.4 - - - - - 19.4 0.1 0,4 CONSULTANTS 107,1 10.3 9.0 - - - 187.5 191.2 13,9 11.9 - - - 217,1 0.1 I0
lab-Total KAP- CREDITSEASlCE INPOVYEMET 249.0 11.3 90 - - - 269.3 284.9 12.0 11,9 - 10,7 9. EXTENSOINSERVICE
TRA1NING 326.1 56.0 13.6 - -- 395.7 373.0 69,1 18,0 -46- 00. 0.1 0.1 VEHI1CLES 300.2 100.3 48.7 18.3 - - 533.4 343.4 205.0 04.3 25.2 630.4 D.1 0.63 EQUIPMENT- OFFICE 46.2 26.1 80. - - - 80,4 52.9 32.2 1006 - - - 95.7 0.0 0,0 EIIIPENET- DEAl 38.A - - - 38.8 44.4 - - - - 44.4 0.1 0.85
lab-Total 0E70E01098SERUICE 701.2 248.5 70,3 18.3 - - 1,040.3 812.7 356.3 92,9 25.7 - - 1,250.8 A. INCREMENTALMOAKING CAPITOL 1076,5 1,228.061,324.3 1,503,4 1,321.7 - 6,514.41,019. 10,376.7 1,051.31,923.7 1.800,2 - 7,077.4 0 0
Total INSESTMENTCOITI 05.003,3 28,201.1 30,317,2 21,337.7 10,797.0 -111,t17.1 07.945,9 94,086,4 44,020,6 32,039.1 15,706,9 -144,677,8
TotalBASELINE COSTS 50332,8. 3=3~,3=7,223,2327,7 1=0=,7~97.09 116, 1_7=,9451.93=4=,86.42 4Z4,020, 2081 5769 - 4,7
- - …------…-…------…-…------…------Na-e ID, 1983 111D2 NB Lacolttoto S$; SrLotod In UO$ ------ss------o------Totals------t-- --- i------
A. ON-'A88M1N0E8TM89TT
SNALL0018CALE 878 12.0 25.8 39.5 28.7 3.3 - 1088.7 14.4 39,3 7335 64.7 8.8 - 233. 8.582 9A6R5T7, 2. I 166,7 131.8 187.81 II771 8.19 3.8II& 311.9 II3,4 37,8 1,385.4 05.3 832 E80849170T128 8, 152. 152. 49.1 8. 08.0 234.1 288.1 281,4 - B29, 8.85 3.83
STbotoal84- 7888 INVESTMENTS 254.7 731,8 939.4 946.5 2328.7 -3,878.9 428.30,077.3 1,783.3 2,131,7 639,7 6-04.848 B. 814.9L98858
ROADS 187.1 338,4 419.8 818.0 211.5 1,32. 321.0 838. 982,1 784.3 836.0 - 8.lT2,18.15 2.32 RI218 188 31.2 36.1 28. 7. 348 193 525 74.2 83.0 38.8 288.8 0.15 5.32
1E3288098 5o4888ER3 3,45. 12,4 14.3 18.3 6.9 - 48.8 7. 250.9 29.3 35.4 20.5 - 153.2 8.15 3.32
8-Ttl 82 8. 4UA22,0 489.23584.7 285.5 -1,771.8 855.2 708.61,183.8 874,9 697,1 - 3,642,8 1. A89IL70URALCOOPERATIVE 0888888
1.884878-2 10208T80 3131 319 1. 31.8 31. - 158.3 832 3. 8.8 7. 940 - 345 2.05 32.3
'7781 PUMPS088 78488 3.5 3.0 3.0 3.5 3.0 - 1.8 4.00 5.1 0.3 7,4 8.7 3 1.7 0.13 5.83
o-Tot~alK C137LECT018088CENTER 7.5 87 22. 12:1A 10. - 52, 9.9 18.9 25.9 30.0 8. 1. 8 4844:'"ARt 858E87 - 18 3.5 1. 0.I808 - 2.7 6.7 4.0 4.8 - 18. 3.10 0,32
I L-TotDl 50RT011LT0RAL20040887800F C887899 72,5 92.8 680.3 78.3 78.8 - 99.3 85.2 155.5 185.1 193.0 22,7 - 335.7
1890 SOID I0981870AN5089287Y 27.2 33.1 33.7 83.4 12.4 - 1I I8 39.8 88. 75.4 23.2 88.8 - 280.8 8.0231 3.2
Oo,o-Tats8LAND 208381188T138 78.7 88.2 33.7 12,4 13.84 - 3080 97.0 083.0 75.4 28.2 39.8 - 358.5
818880 998 00088388 8878098K 259.8' 27:1. 38.2 - 0, I 438. 558. 745 - ,1067, 0.850 8.8 TER0889Y987888 129.7 119"I 39.8 - 279,3 2 18.1 42. ? 73.9B 537.68 0.15 0.82
48998 R A914918ILIMRVEET-4. 432 - 3. - 088 198.8 0.15 0.3 5980980 998SUPRII ON85809 -?, 192 1, .22 - 0. 87 8. 9.1 0.85 8.38 885888895 8489088104 3.8. 1.2.. 15. ------83, --52. 20.3--22.------9-.83.138.2
3u8-Total8R880908D8 08E8A87LATATI39 54.9 484,8 388.8 88.1 - - 1,005,9 78.8 889.71,305.8 088.2 - - 2,740.8
1. 1848937TR0789U 0
ClUI 8L9 -OK 22,3 35.:8 --- 8, -_87.5 73.8 - - - 0, 0.85 2.31
8.a-ooO 891281780 .7 395 8. 28 - o0, 7.8788.2 819. 8.5 861 0 98
882888207900- ----422 --- 3.0- 82 78 ------4--- 082-.3--
8u8-T:tal D9884988A98 4LO88C087411 3.7 90.0 95.9 2.8 - 8812 8.8 134.5 807.5 6.5 - - 3149 G. RAD30- 80881 COMMUNICAT1IONS
3,O-oT,Il 88888 - RURALC88829108T1O48 53.8-6. 8.8.8
VEHICLES, 810199E87 882URIUE 4891708 :.8 .5 … … …… 8 0.7… … …… … 5. 8.85,6 77808 78194 8.8a868- - - . . . . - - - 40 .0 1 Sb-ToaL 89807078240034480838184997 2. ---- 3 2.8------4.8-- 3.3------1
I,F PT901.18ER4ERE 808.0 8087 820.2 1852.0 175.8 - 6885.7 18.9 188.7 2814.8 327.2 348. 118,0 87 J. 4E08898700877 080488871880
FUKLDISO 82.2 10. - -- 3 .4 3. 18.~7-89 0.:12 0.33 8
07498178978898 2888799 14848TAIIN 88.7 5.8 4.5 2.32 22.4 13.9 8.2 8.0 5.2 836 2.1 1
8ub-Tata2 4E88047129OF 222PERA718AS 28.4 17.4 4.5 2.2 - - 48.5 31.3 38.5 9.0 3.2 - - 74.3
90829235.8 8.4 8.8 4.3 3.4 - 25.7 74 18.7 12,3 107.7 12.8 51.81 8.885 3.3 08EH±8 3.E39S - -I. 5.3 8 …… … 0.1 2.80 1.8 8201488NT 1.8 1. ---- 3 4 2.4 2.8 - - - - 5.8 2.15 5-.862
0.1-Tootl 98198L '0408 11.1 11.7 6.2 4,3 3.4 - 38.7 14.7 38.1 12.2 18.7 18,2 - 7.8 1. 889 - 090287T88808C8 88498889897
04488------090--J-----1. … … … … … 13-18 - - -- -I----8. CE987911.4 08 891. 15.:.6. - - 0. .
9.~~~~~~ 08788882 389870
88007489-ANT8012.4 10, 8.8 543 43 .1 8.5 . . .
3a8-Total3895808-52. 881090139 18.9-- 5.5-- - 1.4 ------7-5 88.5-- 29.8------3.3------18---.-
Oso9883T8t 9 02070EITSKIC IPOQMN 1,174. 7.281 2842176. 79.8 - 9,23, 2348733 16. 463313,934221. -1,8.3
YEoHI2C80 an.=000. .2 0,3228.020038, 3.2080.1 16 BaseCosts Totals Includms Contlos,.oooes Phu. ----~~------~------Cont. For. I 2 3 4 5 t Total 0 2 3 4 5 6 Total Rate Et h,
1. 1N0ESTMENTTOUTS
A. ON-FARM I1EST8ENTS
DAIRY 1128. 205.8 253.4 2S8.4 7.6 - 868.1 123.2 242.3 319.7 387.4 10.6 - 1,83.4 O.85 0.28 SHEEP 40,1 135.4 245.6 275.6 748 - 771,6 43.8 159.4 309.9 370.3 106.5 - 989.9 0,05 0.29 SMALLSCALE IRROIATIDA 10.3 22.8 33.6 24,7 2.8 - 93.4 11.2 25.8 42.5 33.1 4.0 - 116.7 8.85 0,62 ORCHARDS 64,6 108.3 143.1 147.3 118.1 581,4 70.5 127.4 180.6 197.9 168.1 - 744.6 0.85 0.32 HECHAN1IZTION 76.B 130.9 130,9 76,8 - - 415.3 R3.B 154.b 165.1 103.1 - - 506.1 O.O5 0.63
Sub-Total ON-FARh INVESTMENTS 304.6 602.5 806.7 812,7 203.2 - 2,729.7 332.6 708.8 1,017.8 1,091,9 289.4 - 3,440.6 P. RURALROADS
ROADS 143.5 325.0 376.8 273.1 180.6 -1,299.9 071,6 418.7 520.7 401.8 283.2 - I.796.1 0.15 0.02 BRI80ES 11.9 26.8 31.0 22.6 14.7 107.0 14.2 34.5 42.8 33.3 22.9 147.8 1.15 0.32 HAINTENANCEEQUIPAENT 70.6… … - - 70.6 84.4 - - - - 84.4 0.15 8 0ESI8NAND SUPERVISION 4.7 10.6 12.2 B.9 5.9 - 42.3 5.6 13.7 16.9 13.0 9.3 - 58.5 0.15 0.32
Sub-Tstal RURALR080S 230.6 362.4 420.1 304.6 202.2 -1,519.8 275.8 466.9 5BO.5 443.2 315.4 - 2,086,B C. AGRICULTURALCOOPER5TIVE CENTERS
1. DEPOTS- 1000 TONS 28.0 42.0 28.0 23.0 23.0 - 153,9 33.5 54.1 38.7 41.2 43.6 - 211.0 0.15 0.32 2. DEPOTS- 300 TONS 27.4 27.4 27.4 27.4 27.4 - 137.0 32.8 35.3 37.9 40.3 42.7 - I0S.9 O.15 0.32 3. NIL COLLECTIONCENTERS
OFFICEFURNITURE AND EDUIPMENT 1.9 2.5 3.0 2.7 2.5 - 12.0 2,3 3.3 4.2 3.9 3.9 - 17.6 8.15 0.57 NILK COLLECTIONEUJIPMENT 1,9 3.2 2.2 5.2 23.9 - 19.4 2.3 4.2 7.2 7.6 6.1 - 27.4 0.15 6.65 FUELPU90S AND TANKS 2.6 2.6 2.6 2.6 2.6 - 13.0 3.1 0.3 3.6 3.8 4.0 - 17.9 0.15 0.65
Sub-Total MILKCOLLECTION CENTERS 6.4 0.4 10.8 10.4 9.0 - 45.0 7.7 10.8 14,9 15.3 14.1 - 62,8 4, PARNM4ARETS - 1.4 2.8 1.4 1.4 - 7.0 - I.s 3.9 2.2 2.2 - 9,9 9.15 0.32
Sub-Tutal AGRICULTURAL[BOPERATIVE CENTERS 61.8 79.1 69.0 67.2 65.8 - 342.8 73,9 101.9 95.3 98,9 102.6 - 472,6 D. LANDCONSOLIDATION
EOUIPMENTINCL SPARE PARTS 43.9 31.0 - - - - 74.9 45.7 34.7 - - _ - 80.4 0 1 LANDCONSOLIDATION ANDSUR0 ET 23.4 2B.4 29.0 10,6 10.6 - 102.0 30.4 39,8 43.5 17.0 18.0 148.7 0.25 0.2
Sub-Total LANDCDN5OLIDATION 67.3 59,4 29.0 10.6 10.6 - 176.9 76.0 74.5 43.5 17.0 18.0 - 229.D E. IRRIORTODNREHABILAT4TIDN
CIVIL LORKS 12,4 31.0 31.0 - - - 74.4 14.8 40.0 42.9 - - - 97.7 0.15 0.51 PRIH4RYAND SECONDARY NETWORK - 221.8 233.3 25.9 - - 481.0 - 28.8 322.4 38.1 - - 646.3 0.10 0.65 TERT1ARYNET49RK - 111.3 102.7 25.7 - - 239.B - 143.5 142.0 37.8 - - 323.2 0.15 0.62 FARMSPRINKLERS - - 80.0 - _ - 80.0 - - 110.6 - - - 110.6 0.12 I 0RAINAE4AND SOILIKPPNEHENTS - 41.3 47.3 - - - 88.6 - 53.3 85.3 - - - 11086 0.15 8.36 DESI0 ANDSUPERVISIDN 34.3 00.0 9.3 - - - 54.1 41.0 10.5 12.9 - 67.4 0.12 0.32
lub-Total IRRIGATIONREKABILATATION 46.7 416.0 503.7 51.6 - - 1,017.9 55.8 536.0 696.0 75.9 - - 1,363.8 F. DRAINARE4ND FLOOD CONTROL
1. INFRASTRUCTURE
CIVIL WVRES - 19.2 30.7 - - - 49.9 - 24.7 42.5 - - - 67,2 O.15 0.51 SOILIMPROVEMENT - - .2 - - - 5.2 - - 7.1 - - - 7.1 0.15 0.28 r FARMROADS - 7.0 7.0 - - - 14.0 - 9.0 9.7 - - - 1B.7 0.15 0.32 0 0 COMPE6STATIDN - 0.8 1.5 - 2.3 - 11 2.0 - - - 3.1 0.15 0 - 0ESINAND SUPEPVISION 2.3 2.3 2.2 - - - 6.9 2.8 3.0 3.1 - _ - 0.15 0.32 c0 LANDCONSOLIDATION - 4.6 3.4 2.3 - - 10.2 - 5.9 4.7 3.3 - - 13.9 0.05 0.22
Sub-Total INFRASTRUCTURE 2.3 33.9 50.5 2.3 - - 88.5 2.8 43.7 69.0 3.3 - - I18.7 - h o g 2. EROSIONCONTROL - 34.7 32.4 - - - 67.1 - 44.B 44.8 - - - 89.0 0.15 0.3 2- 'aH > H t
Sub-Total DRAINAGEA4N FLOOD CONTROL 2.3 68.7 82.4 2.3 - - 155.6 2.8 88.5 113.8 3.3 - - 208.4 r 8. RADIO- RURALCOMMUNICATIONS P t 3 DO
ESUIPMENT 42.7 42.7 48.9 48.9 .1 1I TECANICALASSISTANCE 3,3 3.3 3.8 3.8 0.1 1E ,I
Sub-Total RADIO- RURALCSHHUNICATIONS 46.0 46.0 52,7 52.7 Ea 04 H. INSTITUTEIF ECOSONICDEVELOPHENT 0 n
VEHICLES, E8UIP8ENTAN4 FURNITURE 1.6 0,4 - _ _ - 1.9 1.8 0,5 - _ _ - 2.3 0.1 0.65 OVERSEASTRAININS 0.7 0.7 0.7 2.2 8.8 0.9 0.9 - - - 2.7 0.1 1
Sub-ToSalINSTITUTE OF ECOOMMICSEVELOPhENT 2.3 1,0 0.7 - - - 4.1 2.6 1.4 0D9 - - - 4.9 I.FERTILIZER CREDIT 87.3 S7.3 103.2 131.0 116.4 - 525.3 90.6 97.8 124.0 167.6 157.9 - 638.2 0 0.78 3. FEDERATIONOF COOPERATIVES
BUILDIN 87 8.7 - - - 17.5 10.2 11.0 - - - - 21.2 0.12 0.32 VEHICLES 1.4 1.3 - - - - 2,7 1.7 1.6 - _ _ 3.3 0.12 0.63 ., EQUIPMENTAND OFFICE FUEIEHIN6b 1.6 U6 2.3 0.9 0.9 - - _ - 2.7 0.12 0.57 F 2 CONSULTANTSANDOERSEAS TRAINING 9.2 4.3 3.9 1.9 - - 19.2 10.7 5.4 5.2 2.7 - - 24.0 0.12 1 0o >'
Dub-Total FEDERATIONOF COOPERATIVES 21.0 15.0 3.9 1.9 - - 41.7 24.4 18.8 5.2 2.7 - - 51.1 cr K. ANINALHEALTH
BUILDINGS 4A 5.5 5.1 3.7 2.9 - 22.0 .57 7.1 7.1 5.5 4.5 - 29.7 0.15 0.32 VEA6ICLES 2.2 3.3 - - - - 6.6 DR? 4.3 - - - - 8.2 0.15 0.63 E08IPME4T 1.5 1.4 - - -- 3.0 1.8 1,8 - - - - .7 0.15 0.62
Sub-Total ANIMALHEALTH 9.5 10.2 5.1 3.7 2.9 - 31.6 11.4 13.2 7.1 2.5 4,5 41.7 L. KBP- CREDITSERVICE IMPROVEMENT
VEHICLES 4.1… … … … … … 4.1 4.7… … … … … … 41.70 81 0.63 OFFICEFURNISHING AND EQUIPHENT 1…1 - -. 4 1 1.2… 2 01 04. CONSELTA4TS 10.6 0.7 0.6 - - - 11.9 12.1 0.9 O', - - - 13.8 8.l I
Sub-Total KbP - CREDITSERVICE IKPROVMEHHT 15.8 0.7 0.6 - - - 17.1 18.1 0.9 0.8 - - 19,7 A. EXTENSIONSERVICE
TRAINI40 20.7 3. 08.9 - - 25,1 23.7 4.4 1.1 - 29.2 0.I 0.1 VEHICLES 19.1 10,6 3.1 1.2 3-3.9 21.8 13.0 4,1 1.6 - 40.5 0.1 0.63 E9UIPMENT- OFFICE 2.9 1.7 0.5 - 5.1 3.4 2.0 0.7 - 6.1 0.1 0.6 EQUIPMENT-0E8O 2.5 …25 2.8… 2 2.8 0.1 0.65
Sub-Total EXTENSIO8SERVICE 45.2 15.8 4.5 1.2 - - 66.6 51.7 19.5 5,9 1.6 - 7- .7 N. INCREMENTALWORKINAO CAPITAL 60.4 78.0 87.3 95.5 84.6 - 413.7 71.1 87.4 184.9 122.2 114.7 - 080.3 0 0
Total INVESTMENTCOSTS 1,008.7 1.796.1 2,116,0 1,482.2 685.8 - 7,088.8 1,039.7 2,215.6 2.795.7 2,034.7 18002,6 - 9,188.S
Total DASELINECOSTS 1,088.7 1.796.1 2,116.0 1,482.2 685.8 7,0B.8 1,139.7 2.215,6 2,795,7 2,034.7 1,002.6 - 9,180.5
Fobruars24, 1983 13114 Calcu- ated in US$: Printed in DLnars - 56- ANNEXlb Table 4 APPRAISAL OF
KOSOVOREGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
PROJECT COST SUMMARY
(Dn,Million) % of …______Foreign% of Total Local ForeignTotal ExchangeBase Costs
A. ON-FARM INVESTHENTS 1,820.51,358.4 3,178.9 42,7 38.5 B. RURALROADS 1,023.1 746.? 1,770.0 42.2 21.4 C. A6RICULTURALCOOPERATIVE CENTERS 226.0 173.3 399.3 43.4 4.8 B, LANDCONSOLIDATION 88.3 117.7 206.0 57.1 2.5 E. IRRIGATIONREHABILATATION 374.8 810.6 1,185.4 68.4 14.4 F. DRAINAGEAND FLOOD CONTROL 102.9 78.4 181.2 43.2 2.2 G. RADIO- RURALCOMMUNICATIONS - 53.6 53,6 100.0 0.6 H. INSTITUTEOF ECONOMICDEVELOPMENT 0.6 4.1 4.8 86.7 0,1 I. FERTILIZERCREDIT 103.8 507.9 611.7 83.0 7.4 J. FEDERATIONOF COOPERATIVES 14.2 34.3 48.5 70.? 0.6 K. ANIMALHEALTH 18.9 17.9 36.7 48.6 0.4 L. KBP- CREDITSERVICE IMPROVEMENT 2.1 17.8 19.9 89.5 0.2 M. EXTENSIONSERVICE 39.9 37.6 77,5 48.6 O. N. INCREMENTALWORKING CAPITAL 481.8 - 481.8 - 5.8 =------TotalBASELINE COSTS 4,296.9 3,958.6 8Y255.5 48.0 100.0 Physical Coritingencies 380.9 365.0 745.9 48.9 9.0 Price Contingencies 30707.7 3158.0 6,86508 46.0 83.2
Total PRGJECTCOSTS B,385.6 7Y481.6 15,867.2 47.2 192.2
March22, 1983 17:07 Calculated in Dinars; Printed in linars - 57 - ANNEX lb Table 5 APPRAISAL OF KOSOVO REGIONAL DEVELOPMENTPROJECT YUGOSLAVIA
Project Phasing
…------…Project Year------1 2 3 4 5 Total
Dairy - units jI 200 360 440 500 - 1,500
Sheep - units 1' 50 150 250 250 - 700
Orchard - units(0.5 ha)1 / 340 460 550 450 - 1,800
Small scale irrigation Units 50 100 150 100 - 400
Mechanization - Tractor sets 50 100 100 50 - 300 - Implement sets 100 100 100 100 - 400
Fertilizer ('000 tons)./ 6 6 7 9 8 36
Decane irrigation (4000 ha) - 1 - - - 1
Vitina drainage (1143 ha) - 1 - - - 1
Rural roads (km) - Upgrade 28 63 73 53 35 252 - Rehab. 33 75 87 63 42 300 - Repair 16 37 43 31 21 148
Land consolidation (ha) - - - 5,640 5,640 11,280 Agri-service Centers 400 sq.m 5 7 9 8 7 36 150 sq.m & 50 sq.m 12 12 12 12 12 60 Milk Coll. Centers 3 5 8 8 6 30
Agric. Extension 3/ SMA - 63 12 - - - 75 EA - 26 17 7 - - 50 Farmers 4/ 11,100 12,450 14,160 13,656 - 51,300
Veterinary - New Stations 1 1 1 1 1 5 - Station Rehab. - 1 2 2 1 6 - Post Rehab. 2 3 3 1 - 9 - AI Small 6 6 - - - 12 - AI Large 4 4 4 - - 12
1/ Project appraised on basis of these models; actual investments, which would all be subject to KBP appraisal, would include bees (275), pig fattening (155), beef fattening (235), apples (800), pears (100), walnut (100), hazelnut (200), strawberry (300), vineyards (300). 2/ Incremental '000 tons/Annum. 3/ Incremental staff. 4/ New farmers contacted annually; includes all sub-borrowers and rainfed crop farms; project area only. - 58 - ANNEX 2
APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENTPROJECT
YUGOSLAVIA
Schedule of Disbursements (US$ M)
Cumulative IBRD Disbursement Disbursement Fiscal Period Disbursement at end of Cumulative Profile 1/ Year Ending During Period Period Disbursement Agriculture _-%------% ------
1984 12/31/83 2.9 2.9 4 2.5 06/30/84 4.3 7.2 9 8.6 1985 12/31/84 7.4 14.2 19 19.1 06/30/85 7.5 22.1 28 32.2 1986 12/31/85 12.4 34.5 44 46.3 06/30/86 12.5 47.0 60 60.0 1987 12/31/86 9.8 56.8 72 72.2 06/30/87 9.9 66.7 84 82.2 1988 12/31/87 8.6 75.3 95 90.0 06/30/88 3.7 79.0 100 95.9 1989 12/31/88 - - - 100.0
1/ March 12, 1983 A.NNEX 3 59 Table I APPRAISALOF
KOSOVOREGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
S0900Y PHYSICALQUJANTITIES- TOTAL PROJECT
MAIM.PRODUfCTION
I 2 3 4 5 6 7 0 9 10 11 12 13 14-20
WITHTHE PROJECT!
WHEAT(TONS) 04966.00 32400.00 55354,70 00542,80 101739.30 106626.40110969.50 110659.00 000059.00 000659.00 110659.00110659,00 11065900 100659.00 MAIZE(TONS) i0925.00 26574,50 44294.50 63799.50 02203.00806716.00 03836,00 87836.00 87036.00 07836.00 98736.00 87036,00 07836,00 70736.00 SUNFLOTWER(TONS) 2117.00 7280.80 13568,00 20679,50 28550,80 33663.00 34783.00 34783,00 34783.00 34783.00 34703.00 34703,00 34703.00 34783.00 PBtAT0ES(TONSi 5486,00 12952.00 22670.00 3300500 43357,50 45707,50 46007.50 463117.50 46317.50 46317.50 46317.50 46307.50 46317.50 46317.50 SIJOARBEETS(TONS) 0.00 4200.00 11120,00 17000.00 23000,00 21800,00 25B00,00 25000.00 25800.00 25800.00 258000.0025000.00 25800T,0025000.00 APPLESISPEARS (TONS) 0.00 0.00 0,00 0,00 2720,00 9040,00 17880.00 26220.00 31000.00 35690.00 38590.00 40950,00 41950,00 42400,00 VEGETABLES(TNS 0.00 5674.00 12102,00 05072.00 17036,00 00036.00 10036.00 00036.00 10036.00 10036,00 18036,00 18036,00 10036,00 18036,00 ALFALFAHAO (TONS) 0460.00 23521.00 44910,00 68720,00 92140,00 103700,00 000100.00 108180.00 108100.00 180180,00 108180,00 108180,00 108010.00 1081000,0 MEADO0WHAY (TONS) 10995.50 29783.00 5S1150,S 73509.00 98364.00 110924.000176444,00 117644,00 117644,00117644.00 117644.00117644,00 117644,00 117644,00 90111SILAOE (TONS) 0.00 0,00 56000,00 15200,00 22240.00 21200.00 252800.00 25280.00 232090.0025200.00 25200,00 25200,00 25200.00 25200.00 WNEATSTRAW (TONS) 14460.80 310Q1,O0 52921,50 76945,00 98259.30 103206.40107549.50 107239.00 107239.00 107239,00107239,00 107239,00 107239,00107739.00 90111STOVER (TONS, 14805.00 34409.50 56373.50 80136,50 102069.00105064.00 106904.00 106904.00100984.00 106984.00 106984,00106984.00 100904.00 106984,00 BEETTOPS i7oAs) 0.00 1400.00 3940.00 6000000 7040.00 0640.00 0640.00 0640.00 0640,00 0040.00 0040.00 0040.00 0640.00 0640.00 BEEFMEAT ~T0NS,LIVE)50.00 200.32 401,62 657,80 829,00 070,40 960.50 982.30 982.20 982.20 982,20 982,20 902.20 982.20 -DWUSMIL) 1~00LIT.) 459.20 27308.56 5311,84 9358.40 13104.00 14530.00 15900.00 16320.00 16320.00 16320.00 16320.00 16320,00 10320.00 16320,00 SHEEPAT ~TGONSLIVE 109007.00 320.00 I037.53 1546.36 1083.96 2095.56 2097,06 2093.06 2097.06 209i7.06 2097.06 2097.06 2097.06 SHEEPmILS 000 LIT) 60.00 360.00 1079,05 2192.15 3195,25 3670.25 3850.00 3850.00 3805.00 3810.00 3050.00 38500,00 3850,00 3050.00 WOOL TONS ~ 3.04 17.13 48,51 92,64 124.60 132.41 133.90 133.90 133.98 133.90 133,98 133,98 133.98 133,98
600H000THE PROJECT:
WHEAT(TONSi 15170.00 32770.00 52273.00 74960.00 92000,00 92000,00 920880.0092000.00 92800,00 92000.00 92800000 92080.00 ?92800.0092888.00 MAIZE(T045, 01390.00 25413.00 40120,.0056208,00 70768,00 70760,00 70768.00 70760,00 70768.00 70768.00 70701,00 70708,00 70768.00 70760,00 SENFLOAER(TONS) 0.00 35.20 70.40 70,40 70.40 70,40 70.40 70.40 70.40 70.40 70,40 70.40 70,40 70.40 POTATOEsTOlNsO 4300.00 101030.0016555,00 24005.00 29705.00 29705.00 29705.00 29205.00 29705.00 29705.00 29705,00 29705,00 29705.00 29705.00 SUOARBEETS-(TONS) 0.00 1000.00 2000,00 2000.00 2000,00 2000.00 2000.00 2000.00 2000.00 2000.00 2000,00 2000,00 2000.00 2000.00 APPLES& PEARS'TONS; 0.00 400.00 800.00 00.0,0 0olo 00.000 00.00 000.00 800.000 00.000 00.000 00,00 0000 00.00 000,00 VEU0LETAS (TONS) 50.00 4059.00 6057,00 6957.00 0957,00 6957.00 6917.00 6957.00 0957.00 6957.00 6957,00 6937,00 6957.00 0957.00 ALFALFAHAY (TONS) 0460.00 18004.00 20690.00 40290.00 51498,00 51498.00 51490.00 51490.00 51490.00 51498.00 51498.00 31490.00 51498.00 51498.00 MEADOWHAT (TONS) 0083.00 22993.00 36810,50 48990,50 60750.50 60750.50 60750.50 60750.50 00750.50 6075050 60750,50 60750.50 60750,50 60750,50 MAIZESILAGE (TONS)
WHEATSTRAW (TONS) 14664.00 31302.00 40043.00 71165.00 89085,00 09085.00 89005,00 09085.00 89005.00 09085.00 89085,00 09005.00 09085.00 09085.00 MAIZE020010 (TONS) 10432.00 36244.00 56001.50 79291.50 101131.10 101131.50001131.50 101131.10 101131.10101131.50 101131.50 101131.10 101131.50 101131.50 BEETTO0'S (TONS) 3.00 400.00 800,00 800.00 000.00 000.00 800.00 000.00 8008.00 8000.00 800.00H 008.00 800.00 800.00 BEEFNE00 (TONS,LIVYE) 49.60 130.00 240.00 372,00 372,00 372,00 372.00 372.00 372.00 372.00 372.00 372,00 372,00 372,00 Loo'sMILK (000 LIT.) 393.60 1102.00 0968.00 2932.00 2952.00 2912.00 2952.00 2952.00 2952.00 2952.00 2952,80 2952,00 2952.00 2952.00 SHEEPMEAT tTONS,LIVE( 32.48 129.90 292,28 45465 414.61 454.65 454.65 454.65 454.65 434.65 454,65 454,65 454,65 454.61 SHEEPMILK (000 LIT) 60.00 240.00 540,00 040,00 840.00 040.00 840.00 840.00 040.00 840.00 840,00 040.00 040.00 040.00 WOOL(TONS) 2.54 10.16 22.86 315.10 35.56 35.56 31.16 35.56 35.56 35.56 35,56 35.56 35.56 35.56
PRO303CTIONINCREMENT:
WHEAT(TINS) -203.20 -297,08 2981.70 15082.00 0859.30 13746.40 10089.10 17779.00 17779.00 17779,00 17779,00 17779.00 17779.00 17779.00 MAIZE(IONS) -473.00 0061.50 4166.50 7591.50 11515.00 11940.00 17060.00 17868.00 17060.00 17000.00 17068,00 17086.00 17068.00 17008.00 SUNFLOWER(TONS) 2117.00 7241.60 13497,60 20609.10 20480.40 33592,60 34712.60 34712.60 34712.60 34702.60 34712.60 34712.60 34712.60 34712.60 POTATOES(TONS) 900.00 2022.00 6115.00 97800,00 13652,50 16002.10 16612.50 16412.10 16012.50 06612,50 16612.50 16612.50 16612.50 16612.10 SOOAROEETS(TINS) 0.00 32QO.00 9120,00 11000,00 21000,00 23800,00 23800.00 23800.00 238000.00 23000.00 23800.00 23800.00 23000.00 23800.00 APPLESI PEARS 0.00 -400.00 -800,00 -000.00 1920.80 0240.00 17080.00 25420.00 31080.00 34090,00 37790,00 40150.00 41.150,00 41660,00 AEOETAOLES(TONS) 0.00 0015,00 5245,00 0915,00 10079,09 11079.00 11079.00 11079.00 11079.00 11079.00 11079,00 11079.00 11.079.00 11079.00 ALFALFANAI (TONS) 0.00 1117.00 16212.00 28422,00 40642.00 52202.00 56602.00 36002.88 56682.00 56602.00 16682,00 56682,80 56602.00 56682.08 MEADOWHAY (10NS) 2112.50 6790,00 15001,00 24590,50 37613,50 50173.30 56093.50 56B93.50 56093.10 56093.30 56093,10 56893,58 36893.50 56093.10 MAIZESILAGE (TONI) 0.00 0.00 5600.0,0 15200,00 22240,00 25280.00 23200.00 25200.00 25280.00 25280,00 25280.00 25280,00 21200.00 25280.00 WHEAT0T066 (TONS) -70.20 3580,0 4705.10 0633.00 02604.30 17401.40 21824.18 21114.00 21514.00 21504.00 21514.00 21514.00 21514,00 21514.00 MAIZESTONER (TONS) -1627.00 -1754.50 -428,00 845.00 1737.50 4732.50 5852.50 5812.50 5812.50 5852.50 5852.50 5852,50 5852.50 5052.50 BEETTOPS (TONS) 0.00 1000.00 3140,00 52800,00 7040.00 7840,00 7040.00 7040.00 7040.00 7040.00 7840.00 7840.00 7840.00 7040.00 DEEPHEAT (TONS,LIVE( 1.29 61.44 153,62 285.00 457.00 490.40 100.30 610.20 610.20 610.20 610,20 600,20 610.20 610-28 COW'SMILE (000 LIT.) 65.60 1236,4B 3343,84 6406.40 10152,00 11570.80 03028.00 13360.00 13368.60 13360,00 13368.00 13368.00 13360.00 13360.00 SHEEPMEAT (TONS,LIVE( 2.50 57.10 236.52 602.00 1091,71 1429.31 1648.91 1642.41 1642.40 1642.40 1642,41 1642.41 0642.41 1642.41 SHEEPMILK (080 LIT) 0.00 120.00 539.05 1352.15 2355.25 2020.25 3010.00 3000.08 3018.00 3010,00 3010,00 3010.00 3018.00 3010.00 WOOL (TONS) 0.49 6.97 25,65 57.00 09.12 96.05 90.42 98.42 90.42 98.42 90,42 98.42 98.42 90.42 - 60 - APPRAISAL OF ANNEX 3 Table 2 KOSOVO AGRICULTURALDEVELOPMENT PROJECT
YUGOSLAVIA
Recent Yugoslav Trade in Major Agricultural Colmodities
1978 1979 1980
000 M 000 M 000 M YUGOSLAVIA Tons Din $/Kg Tons Din $/Kg Tons Din $/Kg
1. Live Animals
Imports 6.07 258.09 1.56 3.85 277.05 2.64 4.50 299.05 2.44 Exports 59.55 2142.06 1.32 64.00 2770.08 1.59 49.22 2554.05 1.90 Net Exports 53T.53.7 Tg 7 T29 TO 24933 T.52 44.72 2255.00 185
2. Meat & Meat Prep.
Imports 39.15 1163.00 1.09 55.13 1930.09 1.28 70.42 2565.7 1.33 Exports 108.47 6393.03 2.16 80.90 5413.07 2.45 99.71 7065.7 2.60 Net Exports 69.32 25.77 29.28
3. Dairy Prod. & Eggs Imports 0.62 37.09 2.24 9.55 253.09 0.97 10.33 259.00 0.92 Exports 10.88 179.02 0.60 27.08 259.00 0.34 7.78 113.01 0.53 Net Exports 10.26 18.25 -255
4. Cereals & Cereal Prep. Imports 140.15 535.09 .14 1745.81 7390.03 .16 1422.14 8255.04 .21 Exports 256.07 2179.03 .31 31.04 624.51 .74 219.54 2953.01 .49 Net Exports 115.92 1643.04 -1714.77 -6765.08 -1202.06 -5302 03
5. Animal Feed Imports 360.85 2756.02 .28 263.89 2417.09 .34 243.09 2704.03 0.41 Exports 75.90 321.06 .16 62.62 327.00 .19 86.57 442.00 0.19 Net Exports -284.95 -201.27 156.52
6. Fruits & Vegetables Imports 310.48 3476.03 .41 323.20 4290.09 .49 227.94 3690.00 .59 Exports 124.27 2888.09 .85 111.87 3778.34 1.24 151.26 4262.00 1.03 Net Exports -186.21 -211.33 -76.68
7. Sugar, Sugar Prep. & Honey - Imports 17.76 169.06 0.35 27.62 285.03 0.38 5.99 195.08 1.20 Exports 3.43 83.09 0.90 69.29 501.04 0.27 297.04 3948.01 0.49 Net Exports -14.33 41.67 291.41
S. Oilseeds Tmports 238.69 2083.09 0.32 266.31 2529.06 0.35 237.46 2036.01 0.31 Exports 5.74 170.04 1.09 74.65 758.02 0.37 12.20 287.03 0.86 Net Exports -232.95 -191.66 -225.26
9. Vegetable Oils (Fixed) Imports 17.69 348.03 0.72 10.93 317.08 1.07 98.18 1921.08 0.72 Exports 14.09 276.06 0.72 40.53 928.07 0.84 16.81 388.09 0.85 Net Exports -3.06 29.60 -81.37
10. Animal Oils & Fats Imports 7.41 134.01 0.66 3.09 86.06 1.03 6.30 176.04 1.03 Exports 8.26 76.01 0.34 19.56 243.05 0.46 6.15 58.70 0.35 Net Exports -75 16.47 -
11. Processed Oils, Animal and Veg. Imports 15.26 409.06 0.98 14.27 505.76 1.30 13.99 499.08 1.31 Exports 10.30 97,00 0.34 11.72 160.09 0.50 10.26 102.04 0.37 Net Exports -4.96 -2.55 -3.73
12. Tobacco & Tobacco Manufacturers Imports 3.03 266.07 3.22 4.55 443.7 3.57 7.36 638.03 3.18 Exports 28.17 2077.03 2.70 26.85 2235.2 3.05 29.22 2591.01 3.25 Net Exports 25.14 22.30 21.86
13. Beverages imports 9.07 150.02 0.61 79.00 290.02 0.13 26.50 175.07 0.24 Exports 135.16 1273.08 0.35 3256.33 1797.04 .02 3083.17 2117.06 0.03 Net Exports 126.09 3177.03 3056.07
14. Fertilizers Manuf. Imports 798.20 1873.04 0.09 717.20 1985.09 0.10 909.84 3312.03 0.13 Exports 417.17 1299.00 0.11 464.64 2002.04 0.16 693.03 3827.02 0.20 Net Exports -381.00 -252.06 -216.81
15. Crude Fertilizers & Minerals Imports 2139.04 2955.06 0.05 2375.03 3693.00 0.06 2746.02 5879.00 0.08 Exports 299.02 458.02 0.06 239.03 420.09 0.06 244.08 538.00 0.08 Net Exports -1840.02 -2136.00 -2501.04 APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
SAPK Estimated Increase in Requirements for Agricultuiral Products
Annual Total SAPK Consumption 1980 Project Increment Per Capita Human Animal Feed, Export, Incremental Production Required Project As % of Consumption Consumptionrl Seed and Losses Total Annual Deficit Production Production Renuired 197 3 1980 1990 1980 1990 1980 1990 1980 1990 Consumption (Im orts) Increment Increment Increment --- (Kg per year)… … ……------(000 tons) … ……… -- 000-----opotons) …… (000 tons) 3
WHEAT 238.0 210 190 325.0 374.0 70 32 395.0 406.0 11.0 170.0 181.0 17.8 10
MAIZE 39.0 32 24 50.0 47.0 142 302 192.0 349.0 157.0 8.0 165.0 18.0 11
OILSEEDS 2/ 6.4 6.9 7.7 44.5 63.2 - - 44.5 63.2 18.7 28.5 47.2 34.7 74
SUGARBEET 3/ 14.3 16.2 19.8 167.0 260.0 - - 167.0 260.0 93.0 126.0 219.0 23.8 11
POTATOES 26.0 30.0 36.0 46.4 70.9 22.0 44.0 68.4 114.9 46.5 - 46.5 16.1 35
VEGETABLES 75.1 85.5 106.2 136.0 218.0- 3.6 10.8 139.6 228.8 89.2 23.6 112.8 12.3 11 >
FRUIT 22.5 27.0 35.9 41.8 70.8 4.5 11.2 46.3 82.0 35.7 15.2 86.6 41.6 48
MEAT 13.8 20.6 27.0 31.9 53.1 8.4 15.8 40.3 68.9 28.6 12.2 40.8 2.2 5
MILK (Liters)4/ 131.0 149.0 183.0 230.0 361.0 - - 230.0 361.0 131.0 17.0 148.0 16.4 11
Source:. Institute for Social Planning and Institute for Economic Development, Pristina.
1/ Based on population estimates of 1.58 million persons in 1980 and 1.97 million in 1990. 2/ Per Capita consumption in Kg oil equivalent,annual SAPK consuption in 000 tons seed, assuming averagp seed crusshing yield of 25%. 31 Per Capita consumption in Kg refined sugar equivalent,annual SAPK consumption in 000 tons stigarheets, assuming average extraction rate of 15%. o Z 4/ Per Capita consumption in liters, annual SAPK cbnsumption in Uuu liters. -62 - ANNEX 3 Table 4 Page 1 APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Farmgate Prices For The Financial & Economic Analyses
FARM PRODUCTS (Per Kg) Financial Price Economic Price (Dinar) (Dinar) Wheat (grain) 14.0 10.6 (straw) 2.0 1.5
Barley (grain) 11.0 8.3 (straw) 2.5 1.9
Maize (grain) 13.0 5.2 (stover) 3.0 2.2
Sunflower 20.5 15.9 Rapeseed 20.5 15.9 Sugarbeet (beet) 2.5 1.9 (sugarbeet tops) 0.5 0.4
Potatoes 11.0 5.3 Peppers (paprika) 11.5 8.2 Tomatoes 9.5 7.1 Cabbage 7.5 5.6 Beans 85.0 63.7 Apples (table quality) 2/ 16.0 11.9 Apples (processing quality) 2/ 8.0 6.0 Pears (table quality) 2/ 13.0 12.9 Hazelnuts (in shells) 90.0 67.5 Walnuts 100.0 75.0 Strawberries 31.0 23.2 Raspberries 43.0 32.3 Cow Milk (per liter) 15.0 11.25 Sheep Milk (per liter) 24.0 23.0
Cattle (Liveweight) - calves 120.0 80.7 - young cattle (250 kg) 110.0 69.0 - mature cattle (450 kg) 100.0 62.7 - culled cows 85.0 55.7
Sheep (Liveweight) - lambs (4 months) 120.0 84.4 - lambs (8 months) 115.0 84.4 - ewes and rams 92.0 64.7 - culled ewes and rams 70.0 49.2
1/ Prices for commodities not internationally traded are adjusted by the Standard Conversion Factor (SCF = 0.75). 2/ Table quality is expected to comprise about 60% of the apple and pear harvests, processing quality about 40%. -63 - ANNEX 3 Table 4 Page 2
Pigs (Liveweight) - piglets (12 kg) 120.0 90.0 - fattened pigs (110 kg) 80.0 60.0 - culled sows and boars 70.0 52.5
Wool 150.0 125.1 Honey 95.0 71.3
Farm Inputs (per kg)
Fertilizers NPK 7-22-14 12.3 1! 14-14-14 11.6 1/ 10-20-30 12.5 T/ 10-30-20 15.1 T/ 10-10-10 9.0 1/ 8-16-24 11.1 T/ 14-13-09 6.5 f/ 15-15-15 12.0 T/ KAN 27% 7.0 T/ TSP 43% 9.0 T/
MANURE 1.0 0.7
Chemicals (per liter) Folidol Oil 81.0 60.8 Bayleton Special 631.0 473.2 Sistemin 115.0 86.3 Orthocide 218.0 163.5 Phosphamid 133.0 99.8 Ultracid-40 344.0 258.0 Gramaxone 240.0 180.0 Dithene M-45 129.0 96.8 Enovit M 565.0 423.8 Cimeb ES-5 16.0 12.0 Dimet 36.0 27.0 Etazin-3585 538.0 403.5 Ronit 438.0 328.5 Sevin 38.0 28.5
1/ Economic prices evaluated in terms of active substance as follows: N 26.7 Dinar/kg P 18.6 Dinar/kg K 11.3 Dinar/kg ANNEX 3 64 - Table 4 Page 3
SEEDS Wheat - local 13.0 9.8 - certified 19.0 14.3 Barley - local 18.0 13.5 - certified 25.0 18.8 Maize grain - local 29.0 21.8 - certified 50.0 37.5 Maize silage - certified 68.0 51.0 Sunflower - certified 21.0 15.8 Rapeseed - certified 69.0 51.8 Sugarbeet - certified 313.0 234.8 Alfalfa - certified 275.0 206.3 Vetches - certified 35.0 26.3 Oats - certified 19.0 14.3 Meadow - certified 175.0 131.3 Potatoes - local 25.0 18.8 - certified 38.0 28.5 Tomatoes - certified 1875.0 1406.0 Peppers (Paprika - certified 1250.0 937.5 Cabbage - certified 1250.0 937.5
LIVESTOCKFEED Concentrate for - milking cow 16.0 12.0 - heifer 15.8 11.9 - calf up to 3 months 15.6 11.7 - calf over 3 months 15.0 11.3 - sheep 18.1 13.6 - sow and boar 13.8 10.4 - piglet to weaning 20.6 15.5 - piglet to fat 16.8 12.6
Hay - alfalfa 4.4 3.3 - meadow 3.8 2.9 - vetches, oats 3.8 2.9 Straw - wheat 1.9 1.4 - barley 2.5 1.9 Stover - maize 3.2 2.4 Maize - silage 1.9 1.4 Sugarbeet tops 0.6 0.5 Cabbage leaves 0.6 0.5 Legumes (grain) 18.8 14.1
BAGS AND BOXES Jute bags 50.0 37.5 Plastic boxes - 20 to 25 kg 181.3 136.0 - 8 kg 81.0 60.8 - 2 kg 17.5 13.1 - 65 - ANNEX 3 Table 4 Page 4
MECHANIZATIONHire Rates (per hour) Tractor 40 h.p - field crop 375.0 281.3 - fodder crop 425.0 318.8 - orchards 468.8 351.6
FARM WAGES (per hours) Unskilled labor 62.5 25.0-34-4 1/ Skilled labor 75.0 56.3
l/ Adjusted by a labor conversion factor which is 0.40 in year one of implementationincreasing to 0.55 by year ten. - 66 - 3 Table 5
APPRAISALOF
KOSOVOREGIONAL DEVELOPMENT PROJECT
YUGOsLAVIA
Table T-3 - Investment Models /1 - Yield and Production Coefficient Assumptions
Without With Pertilieer kg/ha 2/ Model Project Project Without Project With Project …---tone/ha----
1. Rain-fed crop farn
Wheat 2.3 3.8 250 450 Maize 2.0 3.2 200 400 Oilseed - 2.3 300 600 Potato 10.0 15.0 400 1,300 Vegetables 10.0 10.0 175 800 Meadow 3.5 8.0 - 450 Pasture 0.5 0.5 200 600 Alfalfa - - -
2. Irrigation rehabilitation
Maize and vegetables 3/ 3.0 5.5 200 600 Wheat 2.2 3.6 250 400 Barley 2.5 3.6 180 400 Sugarbeet 25.0 45.0 400 1,200 Sunflower - 2.6 200 500 Tobacco 1.8 3.0 - Vegetables 15.0 20.0 275 800 Alfalfa 6.0 12.8 200 600 Maize silage - 45.0 300 500
3. Small-scale irrigation
Wheat 2.3 3.8 250 400 Maize 2.5 3.2 200 60 Oilseed 1.8 2.3 200 500 P.otto 10.0 - - _ Vegetablea 10.0° - Meadow 3.5 8.0 - 750 Forage 5.0 10.0 200 600
4. Drainage and flood control sub-project Maise and vegetables 3/ 2.5 3.5 - Wheat 2.5 4.0 - Sugarbeet - 35.0 - Qilseed - 2.3 - Potatnes and vegetables 10.0 16.0 - M.eadow 5.0 - Forage - 8.0 -
5. Livestock
a. Dairy famn: 4 ha - 3-5 cows
- Calving rate 82% 85% - Mortality rate - calves 6% 5% - Mortality rate - adiults 4% 3% - Culling rate - cows 192 18% - Milk production - row/year 1,200.1 3,200.1 - Cull cow - weight 340 kg 480 kg - Cattle breed Local Friesian - Concentrate feed - cow/year 500 kg 900 kg - Maize silage - 0.6 ha - Alfalfa 0.3 ha 0.5 ha - Improved meadow 0.2 ha 0.6 ha
b. Sheep fans. 8.5 ha - 75 ewes
- Lahb weights - 4 inh 16 kg 20 kg - 8 mth 25 kg 34 kg - Lambing rate 90% 95% - Lanbing ratio 100% 110% - Mortality rate - lambs 12% 6% - Mortality rate - adults 5% 3% - Culling rate - ewes 27% 29% - Milk production - ewe/year 40 150 1 - Cull ewe - weight 36 kg 40 kg - Wood production - ewe/year 1.4 kg 1.6 kg - Sheep breed Local Wuettemberg/local cross - Concentrate feed - ewe/year 25 kg 40 kg
/I Details of models are given in FAO/World Sank draft preparation report 13/82 YUG. 18, July 13, 1982. For appraisal purposes sodela indicated above were used; prices were updated to June, 1982. 2/ Bulk meounts, of which active substance averages 34% 3/ Vegetables intercropped with mai.e. Yields shown are for Vaice.Vegetable yields are 502 nf yields for vegetables grows separately.
August, 1982. APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Suimmary Resujltq of the Financia.1 Analvses
Percentage change in Component Cost or Value FRR for Indicated Change Financial Which wouild cauise FRR to be 12% In Component Cost or Value Rate of (Switch Over Values) Returnr Farm Syctem One vear delay in Farm System Net Investment (FRR) Operating Operating impleisentation & on Investment Operating Operating Operating Benefits Cost Cost Cost invest. cost up Base Case Benefits Cost Cost Cost Margin -10% +10% +10% +10% * (z~~F/) (Q) Mz (Z)() OX +1I% (%) (7M (%) M) ~(/) - Hill Sheep Farms/I 18.2 -8.9 +42.0 23.8 - -14.5 11.3 16.2 15.4 Dairy Farms/! 13.6 - 12.A 11.7 1 -2.5 +11.1 +5.5 - -4.6 Orchards/ 6.7 12.1 10.6 - 9.F 8.R 14.1 -7.4 +21.6 +17.2 - -13.1 Rainfed 11.2 13.0 12.9 - 12.0 Farms/! 79.0 -12.1 n.a. +29.0 11.1 Small - -?0.8 20.9 n.a. 46.S - ?0.5 Scale Irrigation/I 23.9 -9.S +17P.5 +19.? 20.5 - -lq.? 11.4 ?2.4 17.S - Decane Irrigation System 18.6 -Q.R +40.2 IS*.7 14.5 7. n +666.0 -17.1 11.8 16.* 15.6 Vitina Drainage System 18.5 13.5 1?. ' 16.6 -3.3 +26.s +7.4 +94.9 -6.7 3.7 14.& 10.9 16.1 0.8FA.A
I/ FRR and NPV analyses for on-farm costq and benefits onlv (rainfed farms involve nn-farm operating costs buit no on-farm inveqtment cost'). Y GOSLAVIA KOSOVO REGIONAL DEVELOPMENT PROJECT Projected Economic Border Price Structure for Tradeable Input and Output Commodities (1982 Constant Prices)
1995 International Domestic Projected Transport & Yugoslav Yugoslav Quality Transport, Domestic Physical Farmgate Indicator Handling Trade Border Adjustment Handling,& Processing Conversion Border Price Price 1/ Adiustment Parity Price Factor Losses 2/ & Packasing 2/ Ratio Equivalent C / (US /ns on) ()Sf/ton) (USton) () (US$/ton) (Din/Kg)
WHEAT 198 +17 Import 215 100 +15 230 10.6 Grain MAIZE 148 -20 Export 128 100 -15 - 113 5.2 Grain SUNFLOWER SEED 315 3/ +17 Import 332 100 +13 - - 345 15.9 Seed SUGAR 387 4/ -47 Export 340 100 -20 -24 4/ 14 5/ 41 1.9 Sugarbeet BEEF 2,704 - Export 3,380 6/ 125 6/ -102 +95 7/ 52 1,754 80.7 Liveweight LAMB 3,830 8/ - Export 3,830 8/ 100 -102 +95 7/ 48 1,835 84.4 Liveweight COW's MILK, FRESH 290 - Export 290 100 -35 -20 -235 108 Fresh Milk SHEEP's CHEESE 3,980 9/ -105 Export 3,875 100 -58 -750 16.7 512 23.0 Fresh Milk WOOL, GREASY 49! 3,900 - Import 3,900 70 +50 - - 2,780 125.1 Wool, Greasy POTATOES 140 - Export 140 100 -25 - - 115 5.3 Potatoes GRAPES 600 - Export 600 100 -30 - - 570 26.2 Table Grapes m APPLES 290 - Export 290 100 -30 - - 260 11.9 Table apples UREA, 46% N 286 -6 Export 280 100 -13 - - 267 12.3 50 Kg bags 46 580 26.7 Kg active (N) +12 +10 - 242 11.1 50 Kg bags TSP, 60% P2 0 5 203 +17 Import 220 100 60 403 18.6 Kg active (P2 05) KCL, 60% K 114 +13 Import 127 100 +10 +10 - 147 6.8 50 Kg bags 60 245 11.3 Kg active (K)
USl = Din 46 1/ Indicative ports and commodity descriptions given on Table T-2, page 2. 2/ Domestic costs adjusted by the SCF = 0.75. _3 3/ Derived in relation to projected indicator prices for soyabean oil and meal, assuming sunflower to soyabean price ratios of 0.99 and 0.74 for oil and meal, respectively, crushing margin of 10% and sunflower crushing yields of 0.35 for oil and 0.55 for meal. m X 4/ World Market price is bulk rate. Adjustment for farmgate price includes cost of collection and processing exclusive of packaging. -'i; 5/ Weighted average of extraction rates reported at the plant in Pec for sugar beets from Kosovo (15%) and from Macedonia (12.5%) 6/ Yugoslav export prices for beef (mainly bull calf, dressed carcass) in 1979 and 1980 averaged 25% above the respective World Bank indicator prices. 7/ Net processing value comprises the value of by-products (320 $/ton) less costs of slaughtering and export packing (225 $/ton), dressed carcass weight. 8/ Average of export prices F.O.B. Hungary, Yugoslavia, and Bulgaria (70% lamb and 30% mutton, dressed carcass, 1980), adjusted for price escalation and increased in relation to the World Bank projection for Beef price in 1995. 9/ Export price (1981) C.I.F. France for cheese, adjusted for price escalation. 10/Merino Wool, greasy, C.I.F. Yugoslavia. Local wool quality is valued at about 70% of Merino wool quality. - 69 - APPRAISAL OF ANNEX 3 Table 8 KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
World Market Indicator Prices (1982 Constant Dollars)
Commodity 1982 1990 and Indicative Port (1982 US$/mton) (1982 US$/mton)
WHEAT, CWRS (FOB Thunder Bay Canada) 1/ 180 198 MAIZE, U.S. No. 2 Yellow (FOB U.S. Gulf) 1/ 116 148 SOYABEAN Oil, Crude (FOB Holland) 1/ 480 672 SOYABEAN Meal (C.I.F. Rotter/am) 17 240 291 SUGAR, ISA (FOB Carribean) 1 250 387 BEEF, frozen (Argentine, Australia) 1/ 2402 2704 LAMB, dressed carcass (FOB Eastern Europe)4/ 3404 3830 UREA, 46% N, bagged (FOB Europe) A/ 246 286 TSP, 60% P205 (FOB US Gulf) 1/ 160 203 POTASSIUM CHLORIDE, 60% K (FOB Vancouver) 1, 90 114 POTATOS (FOB) 2/ 140 140 GRAPES (FOB) 2/ 600 600 APPLES (FOB) 2/ 270 290 BEEF (FOB) 2/ 2860 2900 LAMB (FOB) 2/ 3900 COW'S MILK (Fresh) (FOB) 3/ 290 290 WHITE CHEESE (FOB) 2/ 2800 2800 WOOL, GREASY (CIF) 2/ 3900 3900
1/ World Bank Economic Analysis and Projections Department, July 1982.
21 Statistics of Foreign Trade of the SFR Yugoslavia, published in 1981; three year average, 1978-1980 prices.
3/ FAO Trade Yearbook, published in 1981, three year average, 1978-1980.
4/ Carcass equivalent with bone, 70% lamb and 30% mutton. Average of prices FOB Hungary, Yugoslavia, and Bulgaria. 1990 price projected in relation to World Bank indicator price for beef. APPRAISALOF
KOSOVOREGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
SUMMARYECONOMIC RESULTS BY COMPONENT
(MILLIONDINAR)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
NETFARM BENEFITS: 99 99 99 HILLSHEEPFARMS -28 -93 -160 -159 15 90 102 99 99 99 99 99 99 99 99 99 99 89 89 DAIRYFARMS -79 -136 -158 -164 57 72 87 91 91 91 91 90 90 90 90 89 89 89 1056 1056 RAINFEDFARMS -33 37 211 386 605 89B 1052 1056 1056 1056 1056 1056 1056 1056 1056 1056 1056 1056 16 16 SMALLSCALE IRRIG. FARM -8 -17 -24 -14 9 Il 16 16 16 16 16 16 16 16 16 16 16 16 120 120 DECANEIRRIGATION SYSTE 0 -47 -48 25 60 76 92 106 115 120 120 120 120 120 120 120 120 120 15 15 VITINADRAINAGE SYSTEM 0 -6 4 10 12 15 15 15 15 15 15 15 15 15 15 15 15 15 178 178 178 ORCHARDS -59 -99 -133 -142 -72 -36 5 54 97 119 143 166 174 178 178 178 178 1573 1573 TOTAL -207 -361 -309 -57 686 1132 1368 1437 1489 1516 1539 1561 1569 1573 1573 1573 1573 1573
PROJECTCOST STREAMS
2 2 2 2 RURALROADS 97 260 266 199 140 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 AGRI-SERVICECENTERS 47 60 54 55 53 2 2 2 2 2 2 2 2 2 2 2 6 6 6 DECANEIRRIG. SYSTEM 40 326 393 46 6 6 6 6 6 6 6 6 6 6 6 6 6 3 3 3 3 3 VITINADRAINAGE SYSTEM 2 28 37 4 3 3 3 3 3 3 3 3 3 3 3 2 2 2 RADIOEXTENSION SYSTEM 35 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 0 0 0 0 0 LANDCONSOLIDATION 45 431 26 10 0 0 0 0 0 0 0 0 0 0 0 1 1 1 ECONOMICINSTITUTE 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 7 7 COOPERATIVEFEDERATION 20 18 9 8 7 7 7 7 7 7 7 7 7 7 7 7 7 14 14 14 14 14 KOSOYSKABANKA 21 14 12 12 14 14 14 14 14 14 14 14 14 14 14 0 0 0 0 0 FARMMACHINERY 16 16 16 16 0 0 0 0 0 0 0 0 0 0 0 37 37 37 TOTAL 326 1156 816 352 226 37 37 37 37 37 37 37 37 37 37 37 37
1536 1536 1536 NETPROJECT BENEFITS -532 -1517 -1124 -410 461 1095 1332 1400 1452 1479 1503 1525 1532 1537 1536 1536 1536
014 tDe %ow
NETPRESENT VALUE AT 12.0Z = 3019707185. INTERNALRATE OF RETURN = 22.9% APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENTPROJECT
YUGOSLAVIA
Suwmary Results of the Economic Sensitivity Analyses
Percentage change in Component Cost or Value ERR for Indicated Change Economic Net which would cause ERR to be 12% In Component Cost or Value Rate of Present (Switch Over Values) Farm System One year delay in Return (NPV) at Farm System Net Investment Operating Operating Implementation f, (ERR) on 12% on Investment Operating Operating Operating Benefits Costs Cost Cost Investent Costs up Base Case Base Case Benefits Cost Cost Cost Margin -10% +10% +10% +10% 0% 10% (%) (000 Din) (1) (%) (x) (X) (X) (%) (Z) (%) (%)
Hill Sheep Farms 1, 15.5 72,239 -5.5 +24.4 +10.4 - -11.5 8.9 13.9 12.1 - 11.8 10.7 Dairy Farmal/ 11.6 -25,136 +0.6 -2.6 +0.9 - +1.7 4.8 10.1 7.4 - 9.3 8.2 Orchards m2 13.5 31,496 -4.9 +15.5 +9.7 - -9.7 10.3 12.5 12.0 - 11.5 10.6 Rainfed Farms!! 51.2 3,747,000 -17.2 n.a. 32.5 - -36.5 27.1 n.a. 37.0 - 27.4 27.4 Small Scale Irrigationl/ 18.1 21,429 -4.7 +57.3 +6.6 - -16.5 4.5 16.8 8.8 13.3 12.4 Decane Irrigation System 11.9 -2,600 1.3 -7.1 -0.6 -18.6 +0.7 7.2 10.5 9.3 11.8 9.6 8.5 Vitina Drainage System 16.1 3,696 -3.3 +26.2 +7.1 +94.4 -6.5 3.5 14.4 10.4 15.7 9.5 8.5 Project Whole 2/ 23.5 3,176,800 -11.1 95.1 +20.4 +133.6 -24.6 13.1 21.6 17.8 23.4 16.5 16.0
/1 - ERR and NPV analyses for on-farm costs and benefits only (rainfed farms involve on-farm operating costs hut no on-farm investment costs). /2 Rainfed farms component includes full allocation of investment and operating costs for the (I) agri-service centers, (2) radio, (3) rural roads, (4)farm machinery having PV of sensitivity tests relate only to on-farm henefits and operating costs. /3 ERR and NPV for the project whole after taking into account the project costs of common elements (roads, agri-service centers, etc., with NPV amounting to Dinar -1592 million) which are not incorporated in the farm analyses.
o z
o >: - 72 - ANNEX 3 APPRAISAL OF Table 1
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Socio-Economic Indicators (1980)
SAPK SFRY SAPK % of SFRJ Land ('000 ha)
Total Area 25,580 1,089 4 Agricultural Land 14,371 589 4 Arable Land 7,153 304 4 Grains 4,324 226 5 Industrial Crops 439 13 3 Vegetables 642 22 3 Forage Crops 946 34 3 Orchards 484 11 4 Vineyards 226 8 4 Meadows 2,055 76 4 Pastures 4,346 188 11 Forest 10,300 445 4
Demography
Total Population, 1981 ('000) 22,354 1,585 7 No. of Households ('000) 6,209 230 4 Average Household Size 3.6 6.9 192 2 Population Density Per km 87 145 167 Agriculture Population ('000) 7,844 641 8 Agriculture Population as % of Total 29 43 - Employment
Total Labor Force ('000) 9,500 433 5 Agriculture Labor Force 4,208 183 4 No. of Individual Farmers 2,600 108 4
Livestock
Cattle 5,474 398 7 Horses 199 7 4 Sheep 7,384 352 5 Pigs 7,867 55 1 Poultry 65,690 2,117 3 Economic
GIIP (MI.Dinar) Per Capita GMP 16,801 4,738 Agriculture Share of GNP %. 13 20 Agriculture Share of Export % 18 14 Investment in Agriculture as % of Total 6 6
Source: Statistical Yearbook, 1981 - 73 - APPRAISAL OF Table 12
KuSOVU tntGIuNAL DEVELOPMENT PROJICT
YUGOSLAVIA
Agricultural Production Indicators (1980)
SAPK as SFRJ SAPK % of SFRJ Crop Production ('000)
Maize 9,317 184 2 Wheat 5,019 216 4 Potato 2,440 61 3 Sugar Beet 5,213 35 1 Grape 1,573 56 4 Apples 483 20 4
Livestock Production cow Milk (Mil. liters) 4,211 205 5 Beef ('000 tons) 351 11 3, Pork ('000 tons) 738 6 1 Poultry ('000 tons) 276 7 3 Eggs (Mil.) 4,393 157 4 Mutton ('000 tons) 58 4 7
Crop Yields
Maize (ton/ha) 4.2 1.8 43 Wheat (ton/ha) 3.4 2.5 74 Sugar Beet (ton/ha) 41 22 54 Potato (ton/ha) 8.4 7.2 86 Apples (kg/tree) 2.1 19 90 Grapes (kg/vine) 1.2 1.9 158
Livestock Yields
Milk/cow/kg 1,576 1,203 76 Wool/sheep/kg 1.5 1.4 93 Eggs/hen 126 103 82
Fertilizer /1
Total Consumption ('000 tons) 2,131 101 5 Agricultural Land kg/ha 148 171 116 Arable Land kg/ha- 298 332 111
/1 Gross fertilizer; estimate average 39% NPK active ingredient.
Source: Statistical Yearbook, 1981 -74 - ANNEX 3 Table 13 APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Land Use
SAP Kosovo Project Area is SS Total IS SS Total … ------000o…o- - - --
Annual crops 270 34 304 142 18 160 Orchards and vineyards 7 13 20 7 13 20 Meadows 71 5 76 32 2 34 Pastures 40 148 188 17 65 82 Forests 160 285 445 96 85 181 Barren 12 45 57 5 15 20 Total - '000 ha 566 524 1090 299 198 497 -% 52 48 100 60 40 100
Source: Statistical Yearbook -75 - ANNEX 3 " - Table 14 APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENTPROJECT
YUGOSLAVIA
AgriculturalSector Performance 1979-1980
Annual Growth Ra -
1970-1980 1970-1975 1975-1980 SFRJ SAPK SFRJ SAPK SFRJ SAPK
Total sector 2.5 3.3 2.8 6.0 2.2 1.0 Maize 3.0 (2.6) 6.2 (1.0) (0.1) (4.2) Wheat 2.8 0.7 3.0 4.9 2.7 (3.3) Sugar beet 5.9 (4.6) 7.5 (0.4) 4.3 (8.6) Grapes 3.6 3.4 (1.3) 1.5 8.9 5.6 Apples 5.7 4.4 6.0 (7.1) 5.5 17.3 Sour cherries 4.1 11.6 1.9 5.3 6.3 18.3 Cow milk 5.4 11.5 7.3 17.4 3.5 5.9 Beef 3.7 8.2 7.1 17.1 0.5 0 Poultry 6.9 8.8 5.8 5.9 8.0 11.8 - 76 - ANNE2 4 Table 1 APPRAISAL OF
KOSOVO REGIONAL DZVELOPKLMNTPROJECT YUGOSLAVIA
Kosovska Banka - Consolidated Balance Sheets - 1979-1981 (Din Million)
Avg. Annual Assets 1979 1980 1981 1/ Growth
Cash and due from banks 1,394 1,691 1,688 10 Depositswith NationalBank 1,111 1,240 1,245 6 Securitiesand discountedbills 1,173 1,430 2,055 33 3,678 4,361 4,988 17 Short-termloans up to one year and currentmaturities of long term loans 13,632 16,608 21,594 26 Accrued interestand other assets 2,932 5,448 10,316 87 20,242 26,417 36,898 35 Long term loans and investments over one year less currentmaturities 36,310 53,678 75,618 44 Propertyand equipment 470 635 767 28 Deferred foreignexchange losses 223 442 163 (16) Total Assets 57,245 81,172 113,446 t
Liabilitiesand Funds Employed
Demand deposits 8,455 11,681 14,255 30 Savingsand short term depositsup to one year 2,988 4,911 5,105 31 Short term borrowingsand current maturitiesof long-termborrowings 3,033 4,370 9,387 76 Accrued interestand other liabilities 961 1,240 4,940 126 15,437 22,202 33,687 48 Savingsand long-termdeposits over one year 6,084 8,373 10,315 30 Long-termborrowings less currentmaturities 32,228 45,757 63,900 41 53,749 76,332 107,902 T Funds Employed Propertyand equipmentfund 618 725 946 24 Reserve Fund 489 537 570 8 Joint liability fund 801 863 911 7 Funds of Banks working communities 75 91 - - 1,983 2,216 2,427 11 Unappropriated income not allocated 1,513 2,624 3,117 44 Total Liabilities and Funds Employed 57,245 81,172 113,446 41
Funds managed on behalf of legal entities and citizens 4,538 7,636 7883 32 I=5555 ===c== 55s=== ==
1/ Draft accounts only. - 77 - ANNEX 4 APPRAISAL OF Table 2 iROSOVO aEGIONAL DEVELOP1'ENT PBOJECT
Yjc;OSLA'TTA
KBP .ey Financial Ratios and Grcwth Indicators
1979 1980 1981 (Dinar millions) Balance Sheet Ratios Total Assets 57,245 51,172 113,446 X Increase 37 42 40 Short Term Assets 20,242 26,417 36,898 % Increase 28 31 40 Demand Deposits 8,455 11,681 14,255 x Increase 36 38 22 % Total Deposits 48 47 48 Savings and Deposits (short-term 9,072 13,284 15,420 and long-term) % Increase 57 46 16 Total Deposits & Savings 17,527 24,965 29,675 Z Increase 17 42 19 Short Term Liabilities 15,437 22,202 33,687 % Increase 33 44 52 Long Term Borrowing 32,228 45,757 63,900 % Increase 33 42 40 Z Total Borrowing 92 91 87 Long Term Loans 36,310 53,678 75,618 % Increase 42 48 41 % Total Loan PortFolio 73 76 78 Capital to Assets Ratio 1/ Net worth 3,496 4,840 5,544 Total assets 57,245 81,172 113,446 Ratio 6.1 6.0 4.9 Banking Assets Structure Ratio 2/ Short Term Risk Assets 17,310 20,969 26,582 Total Banking Assets 56,552 80,095 112,516 Ratio 31 26 24 Current Ratio 3/ Short Term Liabilities 14,476 20,962 28,747 Short Term Risk Assets 17,310 20,969 26,582 Funds Borrowed short and lent long (2,834) - 2,165 Ratio N/A - 7.5 Deposit Run - Off Ratio 4/ Cash and due from Banks 1,394 1,691 1,688 Short Term deposits and borrowing 14,476 20,962 28,747 Less: Deposits with National Bank 1,111 1,240 1,245 -13,165 19,7227 27,0 Ratio 10.4 8.6 6.1
1/ Capital to Assets : expresses a bank's net worth as a percentage of of total assets. It is a rough measure of the cushion to creditors which is provided by a bank's net worth, or the extent of losses expressed as a percentage of assets which a bank could absorb without being technically insolvent.
2/ Banking Assets Structure Ratio: compares short term risk assets (i.e., cash and deposits with other banks, statutory deposits and short term loans) with total banking assets. This measure indicates the composition of total banking assets in terms of length of maturities, using the arbitrary division between short and long term assets for classification purposes.
3/ Current Ratio: compares short term liabilities with short term risk assets, and expresses the size of the difference as a percentage of short term liabilities. This difference represents funds which the bank borrows on a short term basis and uses for some purpose other than short term lending. These funds are in effect borrowed short and loaned long, which is an important function of financial intermediation by commercial banks. However, this activity involves the risk of illiquidity, and the ratio is a very rough indicator of the extent of this risk.
4/ Deposit Run-Off Ratio: indicates the percentage by which a decline in deposits could be met from a bank's holdings of cash, its accounts with other banks, and by the release of statutory reserves occasioned by the decline in deposits. This ratio is an indication of bank's liquidity. - 78 - ANNEX 4 APPRAISAL OF Table 3 KOSOVO REGIONAL DEV1ELOPMENTPROJECT YUGOSLAVIA
Kosovoska Bank - Statement of Income and Expenses 1979-1981 (Dinars Million)
Income Ave. Annual 1979 1980 1981 1/ Growth
Interest on loans 2,958 3,540 4,042 17 Interest on Bank deposits 71 648 812 Fees, Commissions and Charges 44 41 33 (14) Foreign Exchange Gains 421 84 293 (17) Other 51 34 340 158 3,474 3,770 5,356 25 Expenses
Interest on deposits and borrowings 1,427 1,635 3,687 61 Operating expenses 321 430 640 41 Foreign exchange losses 591 239 311 (28) Provisions for doubtful debts 8 12 - - Statutory obligations 16 17 30 37 2,363 2,333 4,668 Net Income 1,111 1,437 688 (21)
Appropriation of Net Income
Proposed distribution to members 214 298 195 Unappropriated income-interest not collected 873 1,111 493 Allocation to funds of Bank's working communities 24 28 - 1,111 1,437 688
1/ Draft accounts only. -79-- ANNEX 4 Tabl~ APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENT PROJECT YUGOSLAVIA .-
Kosovoska Banka Loan Portfolio Analysis - 1979-81
Ave. Annual 1979 z 1980 Z 1981 2 Growth Short-Term Loans (Minarmillion.) _ S
Consumer loans up to one year 19 - 126 - 41 - 47 Loan to enterprises 6,556 13 9,633 14 13,257 14 42 Loans to Banks 2,783 6 1,151 2 872 1 (44) Loans to local authorities and other 154 - 161 - 152 - - organizations Doubtful loans 59 - 122 - 300 - 125 Less: provision for possible loan losses (2) - (2) - (2) - _ 9,56 9 91 11,191 16 14,620 15 24 Add: Currentmaturities of long-termloans 4,063 8 5417 8 6,974 7 31
13,632 27 16,608 24 21,594 22 26
Long Ters Loans
Conuser loans ovar one year 612 1 787 1 745 1 11 L-oansto enterprisesfor capital investments 26,131 53 39,401 57 59,380 61 51 Loans to enterprisesfor other purposes 9,703 20 12,613 18 14,469 15 22 Loans to Banks 316 1 525 1 618 1 40 Loans to local authorities and other org. 236 - 229 - 256 4 Loans for housing and commercial construction 3 071 6 5161 7 6606 7 48 '46069 lrr Tg-,7-i9 Vf 82,074 8S 43 Less: Current maturities 4,063 8 5,417 8 6974 7 31
36,006 73 53,299 76 75,100 78 44
Total loan portfolio 49,638 100 69,907 100 96,694 100 40 _ h_ . | .ini mm - 80 - ANNEX 4 APPIAISAL OF Table 5 KOSOVO REGIONAL DEVELOPMENT PROJECT
YUGOSLAVIA
Kosovoska Banka - Sources and Uses of Funds - 1979-81 (Din Million) 1979 1980 1981 Sources of Funds Operations
Net Income 1,111 1,437 688 Depreciation 17 24 25 1,128 1,461 713
Increase (Decrease) in Liabilities
Demand deposits 2,221 3,226 2,574 Savings & short term deposits 737 1,923 194 Accrued interest and other liabilities 151 279 3,700 Savings & long-term deposits 2,577 2,289 1,942 Borrowings 8,774 14,866 23,160 New Funds Invested 145 151 130 15,733 24,195 32,413
Uses of Funds
Increase (Decreases) in Assets
Cash & due from Banks 53 297 (3) Deposits with national bank (82) 129 5 Securities & discounted bills (27) 257 625 Short-term loans 3,677 2,976 4,986 Accrued interest and other assets 1,060 2,516 4,901 Deferred foreign exchange losses - 219 (279) Long term loans 10,525 17,293 21,801 Long term investments 268 75 182 Additions to property 28 118 - Proposed distribution 214 298 195 Funds withdrawn by member 5 5 - Charges for workers amenities 12 12 - 15,733 24,195 32,413 - 81 - APPRAISAL OF ANNEX 4 KOSOVo REGIONAL vViLOP1* NT PROJECT Table 6
YUGOSLAVIA
KOSOVOSKA BANK - ANALYSIS OF LOAN APPROVALS FOR AGRICULTURE AND AGRO INDUSTRY BY NUMBER AND AMOUNT 1979-1981
Ave. 1979 1980 1981 Annual Number Amount Z Number Amount % Number Amount % Growth (A) Social Sector Din.Mil Oin.Mil Din.Mil
Agro Industry 20 653 57 28 576 36 31 3699 59 138 Irrigation 3 19 2 1 13 1 3 1491 24 786 Vineyard 4 34 3 14 521 33 10 776 12 378 Dairy 2 35 3 2 75 5 12 171 3 121 Broilers 2 232 20 ------Sheep - - - 1 77 5 - - Mechanization 16 73 6 23 210 13 24 135 2 36 Other 7 105 9 31 114 7 - - - - -5-4 -1 5T1 100 TG0 1586 100 80 6272 100 T33 Percent of Total Loan Approvals 79 - 8970
(B) Individual Sector
Dairy 9 140 45 5 74 11 12 61 8 (34) Sheep - - - 3 31 5 8 96 12 210 Broilers 2 51 16 - - - 7 236 30 115 Mechanization 5 42 13 16 64 10 13 94 12 50 Vineyards 1 11 4 6 239 35 1 2 - (57) Other 14 68 22 44 265 39 56 305 38 112 31 312 T00 7i4 -67-3 10-0 -99 79-4 i0-0 -59 Percent of Total Loan Approvals - 21 - -Tr
Total 85 1463 174 2259 179 7066 120
Sources of Financing
Federal funds 983 68 1449 64 3411 48 86 IBRD 149 10 235 10 1448 21 212 Foreign commercial credits 101 7 170 8 74 1 (29) Domestic commercial credits 93 6 117 5 97 1 2 Investor equity 94 6 163 7 228 3 56 Pooled funds - - - - 1626 23 - Other 45 3 126 6 183 3 102 1463 Th0 2259 100 7066 -00 - 82 -
APPRAISAL OF
KOSOVO REGIONAL DEVELOPMENTPROJECT
YUGOSLAVIA ANNEX 4 Chart I
KosovskaBanka, Pristina, Organization Chart
n U.n.1 ~~~~~~~~~~~~~~~Funds,Pl.n Lega AfWa- nd AcnMig Onelpren R.I.b..~ ~ ~ ~~~Pbli Reintins G.ne...I Actmiwbnisrn n Copters Auetblo 10 n obec 1G
H~~~~~~ 00
F.,.ign ua o u a F- gn *
3 >
WooddBomk 24127 X h
>c 4
LP~~~~~~~
-K-Xi I~~~~~~~~~~~~~~~~~~~~~~~ III~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ m00 ...... , , Ii,. . _." - 84 - - 84 - ~ ~~~~~~~~ANNEX5 Char t 2 YUGOSLAVIA KOSOVOREGIONAL DEVELOPMENTPROJECT Kosovo HydroeconomyInstitutional Organization
|KOSOVO IIANAGEMENTFOR WATER ECONOMY1
C.mpl. |gn~toSelf management Federationol of AssociatedLabour * Assmiat os for Cooperatives SOUR SIZ
Organizationsof Assoiated Labour - OUR
snb [ Beli Dri,, risti,a Gniiane Priz... Bi;trica
Pristina Gnjilane Metohija Decane Podujevo Vitina Prizren Dakovica Pec Vucitrn Kos. Kamenica Orahovac Kli-a Glogovac SuvaReka Lipolan Dragas Orasecac
. [ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Regaioa b Cooperatives n Self-managemer WreltAsciations
World Bank-24113 ANNEX5 Chart 3 - 85 -
YUGOSLAVIA KOSOVO: REGIONAL DEVELOPMENT PROJECT Road Improvements
3700 . 6000 mm ,3700 11000 -1500- -2200 4000mm 2200 -1500_
gravel pavement 2 50 mm ..
Typical CrossSection. Flat or RollingTopography
World 13ank-24147 ANNEX5 -86- Chart 4
YUGOSLAVIA KOSOVO: REGIONALDEVELOPMENT PROJECT RoadImprovements
6000
9100 400025 1 1000 I(= ;
200 300
30030
Typical Cross Section: Hilly or Mountainous Topography
World Bank-24146 - 87 - Anru 6
APPJaAL Cr
YZ FaL P r YUGISAVIA Selectd ndicatorn for Monitoring and Evalurtinq Project nts
Prol.ct nopnnt Mior Ciectivs_ Ke tnoctrs
1 xcane Irrigation Sb-poject -irow reliability of water sply to abut 1200 smal farmrs - opletion detailed agi ring desigs - prov irrigatimo watr aequate for around 4000 ha - peparatiol bid douents. callIng rder, evaluation buds, - icrease agricultural producito and _11 fmr ix_ - status of auntewe - cot rosery by Ag-ava - mlation of cadastral survey - before and after - nubr of holding. and area onsolidated and n-rbar of parcels before and after - ha of roe ostrnuted - t of land onsolidation pogr including surveying by hetare aid beaeficiary 3. Cn-Farm veste,t - ip agricultural production and famer inc - nubr of borrowars by loan s, type of loan, new loan, and reptar loans - mer of borrowers by fair size - loan osng ti - farr thorcgh Basic Bank, XBP, and back to farmer - chan in agricultural and livetok Protucton dad real faos incom - diwiges in lor iets by famdly and other 4. Veterinary Services - ige arol health orntrol and livestock pioation - unit cost of building ostruction and rehabilitation - aul nru of vainations by type prot.geV- coverag of livetock popnulatiozn - nuer of auiml treatmets bY jor typn - mr of unsaratucs anmually - cdhnges in brnd population - rn of oeratioal stations, pests, and Al shelters - nu r of vaterinaria and vet tedrarcans by sr: - ratio of vets and vet tdrucians to ani-l pgulation and nsrs of fat hamvehlda 5 tnson Services - i- agricultural Production ad fa i nw - - nr of SW. ad Ea by see. ratio to nv r of farm hoeaolds, - incram far coserap by aitensian maieZ cultivable lad, and agricultural land - icms n r of fal e extin agents - anal and mnthly r of farm visita to new ard rp_eatar fara, - Ui staff training total nd by each - c- in crpping pa , agricultural ad li2ve k prcduticss, ad real inc by fazs, pr cWuta, and pr ha - training n-days aurally by SE and ER - anual nunrr farmer field days and training das by type - arnuel operating Oat includng salary and adinstrative overhed by ER (inclidng SE). - fertilizer use per Os by type of crop - chares in anmal prcsdution coefficients 6. Cerative Agri-Service Cnter. - irove farmer acces to iruts and markets - nur of centers, depots, and Pest ozrtructed or rehabilitated and DOtY - rede grain storage lses and unut coat - ratio of orative faclitu to farm housholds and cultivable land -arsenal coher of Sa iput sold by type and value - anl volue of sin products recved by type and unit value 7. Short T5en Fertilizer Credit - ice agricultural prdctior - anul fetilizer coneumpti by Province, Casmuneproject area, aris of cultivable land S. Lad Ciisoludation promote ossoludation of fa holdings - number of land onsolidatcon sisres forned - area of land by sector, and number of fare famuilies pre and pest Csnsolidation surveyed - '=bt of hold,nge consolidated -changes i n raer of fragments - omt per ha of land ronsolidate by pha e.g. pre-srvey, pest survey, toundary and road clearing, nsewcoed coet, land MprFrQ- sent, compensation, etc. - changes n agricultural prodUcti0o 9. Radio - iproved -ass radia estension and information pwgr - attitude survey results for individual farners - number and tuning of fare radio progrss - ranw s.,ple ,easuring of individual fairer resp-se 1)1. Mral ed Improvemnt - re farmer acs to earketa and services ad to - chage i Lrit ad prouct tonnage individual farn holdinge - change in n'alue of private lands attributable to rural roeds - shortos nsrketng tiue for perishables, espially sul, - change in type of vehicles (horre/cart to bes and Cars) vegetables, and fruits - inpre accss for e-tensiom workers to project arms and v-llapo - shorten tice for villager access to health cliics 11. MLk Collection Centers - reo access to cooled lk storage - redurcton n spoilage - re losses due to spoilage - change in fluid ilk sarketed n liters - change in ratio of cheese to fluid nilk narketed - number of ndividual s'pplles - seasonal dstruthiso of supply by oenter - 88 - ANNEX 7 APPRAISAL OF KOSOVO REGIONAL DEVELOPMENTPROJECT YUGOSLAVIA Selected Documents and Data Available in the Project File A. Selected Reports on Kosovo and the Agricultural Sector A-1 'Socialist Autonomous Province of Kosovo Rural Sector Study, World Bank Report 2332a-YU, March 7, 1979. A-2 'Yugoslavia: Adjustment Policies and Development Perspectives' (3 volumes), World Bank Report 3954-YU, May 27, 1982. B. Selected Reports and Studies Relating to the Project B-1 'Kosovo Regional Development Project Identification Report', FAO/World Bank Report No. 57/80 YUG 16, December 22, 1980. B-2 'Feasibility Study - Hydro-System Decane', Kosovo Project Consultants Report, 1982. B-3 'Feasibility Study - Drainage of Vitina Area', Cerni Institute Consultants Report, 1982. B-4 'Draft Annex Outline', FAO/World Bank Report W.P. 1/81, January 15, 1981. B-5 'Draft Preparation Report', FAO/World Bank Report (2 volumes) 13/82 YUG 18, July 13, 1982. B-6 'Land Consolidation and its Importance to Modern Agricultural Production in SAP Kosovo', Baskim Kabasi and Dusan Filipovic, 1982. B-7 Social Plan of Kosovo for 1981-85 C. Appraisal Working Paper C-1 Details of Project Investment Costs C-2 Economic Analysis - Prices and Background Data C-3 Marketing C-4 Kosovska Banka, Pristina C-5 Rural Communications C-6 Irrigation and Drainage Sub-projects - 89 - Annex 7 Page 2 C-7 AgrLcultural Extension C-8 FertilLzer C-9 Land Tenure C-10 Rural Roads C-l1 Milk Collection Centers C-12 Agri-service Centers C-13 Regional Development in Kosovo IBRD 16606 AUSTRIA / / 21-C0 2130 SEPTEMBER 1982 ~-,~1\ .~ HJNGARY TnRs 2 21230 'TALYS.O5 *<,,o cVEN,Arne Be a Z-A~~~A ~~~'~~~ \ ~ROMANIA~ , -1111 X \,-1F* OVINA\ \ R- E 5 R f f r z t fGEC- MAONTEN {. : rahovac; 5 < to {:) ~~~< \ KloT Rt Bssr z v Mitclrok De/ ani Vo 'o Kiev rz < Loplgqie eol e \ .. 02 CE ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~43000- < S .rannovik\ ^ > B ; / \ ~ ~~~~~~~~~~~~~~D.Kormiljane ______Secor dor ods -42'30 a A S OJ 20' urO PEC IE erno\ I noI bonoar Polje.-\ 1 2 3 40 >~~~ ~~~ 7rz -.------. i ksoyJ s\ i Cl wayCai ganov noa ._ ._.. Republicboundurnkovi srz 3 2'~~ ~ 0 15 25235 0 , SL AV A KILOMETERSG r KOSOVO) REGIONAL DEVE~~~~~~~~KLOPMENTS 20s30~ ~~OSV REIOA DEVELOPMENT