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Project Paer UNITED STATES A(ENCY FOR INTERNATIOt AL DWVBUIPW1NT Jakarta, Indonesia PROJECT PAER Secondary Food Crops Development Project No. 497-0304 April 1983 UNITED STATES GOVERNMENT memorandum DM, 05/04/83 RW% .V TO PO ATTNOF Dennis C. Zvinakist PR GUSJUT, Project Authorization TO, William P. Fuller, DIR THRU: Jonathan L. Sperling, PRO0p Your approval is requested for a loan of $6,400,000 from Section 103 of the Foreign Assistance Act of 1961 as amended, appropriation to Inuonesia for the Secondary Food Crops Development Project, Project Number 497-0304. of Discussion: At a meeting at BAPPENAS on 28 April a number were made to the project which are now incorporated clarifications Loan in the Amplified Project Description attached to the Project a wider Agreement. They include a limited budget revision, to the Project Coordinating Coumittee and a number participation of the of editorial changes which clarified the responsibilities Indonesian participating agencies. Waivers: None. Justification to the Congress: FY 83 Congressional Notification (see JtXARTA 15463 and STATE 080058 for (2 and notification of expiration of CN). Clearances Obtained: The Project Identification Document was approved in AID/W on September 14, 1981. Mission Director has the authority to approve this project. The Project Paper has been reviewed and cleared by AGR, RLA, PRO, and FIN. The supporting Loan Agreement h.s been draft.d by RLA and cleared by PRO, FIN, AGR and DD. Action Requested: That you sign the attached Project Authorization and the Project Data Sheet indicating your approval of the Project Paper. DCZ/cb OFT.ONL FORlM NO. IS (REV I-") G9A PMR (41CFR) 141-11.0 *u.s. lle.,wm,.l puglwq Oow..' ,,l .s-sa',eISISIS pROJECT AUTNOR! SATION Secondary Food Crops Development INDONESIA Project Project No.t 497-0304 7 5 Loan No.: 497-T-0 Act of 1961# as 1. Pursuant to Section 103 of the Foreign Assistance Food Crops Development project amended, I hereby authorize the Secondary not to exceed $6,400,000 for Indonesia involving planned obligations of date of authorization, subject in loan funds over a five year period from the A.I.D. OYB/allotment to the availability of funds in accordance with and local currency costs process, to help in financing foreign exchange for the project. General of Food Crope, 2. The project will assist the Director the production and improve the Department of Agriculture, to increame also known in Indonesit, as marketinl of corn, cassava, soybean and peanut secondarl' crops or "palawija". negotiated and executed by the 3. The Project Agreement which may be in accordance with A.I.D. officer to whom such authority is delegated shall be subject to the regulations and Delegations of Authority and major conditions, together following essential terms and covenants as A.I.D. may deem appropriate. with such other terms and conditions ftpayment 4. a. Interest Rate and Terms of Loan to A.X.D. in U.S. The Cooperating Country shall repay the the date of first disbursement of Dollars within forty (40) years from not to exceed ten (10) years. The the loan, including a grace period of in U.S. Dollars interest from the Cooperating Country shall pay to A.I.D. at the rate of (a) two percent date of first disbursement of the Loe (10 years), and (b) three percent (20) per annum during the first ten outstanding balance of the loan and on (3%) per annum thereafter, on the any due and unpaid interest accrued therein. Services b. Source and Origin of Goods ond shipping, financed by A.I.D. Goods and services, except for ocean the Cooperating shall have their source and origin in under the project as A.I.D. Geographic Code 941 except Country or in countries included in Ocean shipping financed by A.I.D. A.I.D. may otherwise agree in writing. A.I.D. may otherwise agree in writing, under the project shall, except as the United States, or Indonesial or be financed only on flag registry of or operated by Indonesian Code 941 countries as long as chartered shipping companies. b. Conditions Precedent to Disbursement Prior to any disbursement, or the issuance ot any commitment documents under the Project Agreement, the Cooperating Country shall furnish in form and substance satisfactory to A. .D., evidence that: 1. a mutually agreed upon plan for the allocation, schedule and method of disbursement nf funds to participating agencies namely, the National Logistics Agency (BULOG), Department of Cooperatives, the Agency for Agricultural Extension, Training and Education (AAETE), and Batik Rakyat Indonesia (BRI). 2. evidence that creation of a Steering Committee consisting of the Director, Bureau of Production, DGFC (hairman)l Director, Research and Development, BUL'33; and Secretary tu the Ministry of Cooperatives has been created to oversee the project. 5. I hereby authorize the use of loan tunds prov~ded by A.I.D. under the Project Agreement for international travel of participants. Director Dat6 DrattedsRLAeLChilest04/13/83, Mai Clearances: AGRiELucast FIN:RClarki PROOJSperling: aRSimpson: Distributions DD-l, RLA-l, AGR-I# FIN-I# PRO-It C&R-3 AGENCY FOR |NTENNAT|Ok&hAL 0UVULOPMUINT I. TRANSACTION CODE ", A - Add Amendment Number LA1.L PROJECT DATA SHEET a C haW D - )elgt_ 2. OO"'rRY/INTrrY S. IROC1 NUMBER INDONESIA 497-0304 ] ___ 4. BUREAUIOFFICE A. PROJECT TLS (mwmItm 40 chwa eirs) ASIA _4--__ _ffecondary Food CroDs Development f. PROJECT ASSISTANCE COMPLETION DATE (PACD) 7. ESI IMATED DATE OF OBLI GA71ON (Unde 'i." beiow. tne, 1, 2, 3. o 4) _JA41 L5 8181 A.,o,,,., .yL" . ., c., F, 8 ___________________3 A. (1iaivva.t,~n 3 C. inal FYLL~J 8. COSTS (1000 OR EQUIVALENT $I ­ FUNDING. SOURCE F FY _ _83 LIFE OF PROJECT a. FX C. LtC D. Total L FX F. L/C G. Total AU) Appreprasd Toai .3643 2,757 40 3. 43- -,576AO0 (Grant) ( - ) ( - )( ) ( - ) ( - )( I (L n) 3,-435 6400 3643 . -7)_ Othr I. U.S. 2. Host County _ - 6.291 6.291 - fi.2g fil?2 Other Dono t) 3 ,643 9_ _4 _ 12 ,_91 1 'A ,_6__ _ TOTAL S m, ,4 .4 "qfi" -2.i9qndn i 9. SCHEDULE OF AID FUNDING (1000) .B"... C PRIMARY L AMOUNT APPROVED A. APPR PRIMARY TECILCODE D. OBLIGATIONS TO DATE AMnION F. LIFE OF PROJECT PRIATION PI.'R"OSE - CODE. THIS ACTION CODE I.Granl 21.Loan I. GraM 2. Loan i. Gre 2. LAAn 1.Grim 2. Loan (1)FN 130D 140 6,400 i.40 o (2) (4) ------------ TOTALS --- ,6,400 6.400 a0. SECONDARY TECIINICAL CODES (miamnum 6 codes of3 pontou och) I)I . SECONDARY PURPOSE CODE 019 29 1l o31 . 1 1 1 12. SPECLAL CONCE kNS CODES (maAaumqo 7 codes of 4 posItea u ech) __A. Cckk BR BF _ _ __ _ _ __ _ _ _ __ _ _ __ _ _ __ _ _ _ I$. PROJECT PURPOSE (.ns,,msm 480 clavu~irvg) To incroase production and consumption and to improve the marketing system of secondary crops in Indonesia. 4. iSCIIEDULED LVN.UATIONS IS.SOURtI/0OKIGIN OF GOODS AND SERVICES MM YY MM VY MM 1 Y Ieim d6ikjI I I I I lrinal () 0al61 [3) 0141 [3 Local El OiIhev(SPecoh)____ lb. AMENDMENTSlNATURE OF ClIANGE PROPOSED (TAa h pq# J of a pe PP Aumient) TSI' inatuse $l.DATE DOCUMENT PJ.CEIVWD I1 liam P. FulleroIND/D/o, OR FOR AID/W DOCU 17. APPR'IOVED MINTS. DATE OF D)151 IUTION Diractor, USAID/Indonosin m54wo4DOY fynd 1 Il YY AND 1304 18-70) Table of Contents Page Part I: Summary and Recomendations A. Recommendations 1 B. Summary, Descripticn and Findings 1 C. Policy Issues 5 1. Subsidies and Pricing Policies 5 2. Public vs Private Marketing 6 Part II: Project Background and Detailed Description A. Background 7 1. Agricultural Development in Indonesia 7 a. Role and Performance of Agriculture 7 b. Trends in Agricultural Production 8 2. Secondary Food Crops Development Strategies 9 a. Rationale for National Program 9 b. Potential for Development 10 c. Constraints and Strategy 10 B. Detailed Project Description 10 1. The Project Area 10 2. The Project 11 a. Goals 11 b. Purposes 13 c. Outputs 13 d. Inputs 15 3. Project Related Activities 15 Part III: Project Analysis A. Technical Analysis 16 1. Institutional Structure 16 a. Directorate General for Food Crops 16 b. Supporting Institutions 17 2. Production Feasibility 21 a. Cropping Systems 21 3. Supply and Distribution of Inputs 21 a. Fertilizer 21 b. Pesticides 23 c. Seeds 23 d. Rhyzobium Inoculum 24 4. Marketing 24 a. Supply and Demand 24 b. Market Structure for Secondary Crops 25 c. Poet Harvest Technolo3Y 27 d. Recommended Action 27 5. Nutritional Concerns 28 B. Economic Analysis 28 1. Estimate of Production 29 2. Estimate of Benefits 30 3. Estimate of Costs 30 4. Cost Penefit Analysis 31 C. Social Soundness Analysis 32 1. Soclo-cultural Feasibility 32 2. Beneficiaries and Spread Effects 34 3. Social Consequences and Benefit Incidence 35 Part IV: FINANCIAL PLAN A. Project Cost Summary 36 B. Recurrent Cost Implications 37 Part V: IHPLEKENTATION PLAN A. Administrative Arrangement 40 B. Implementation Schedule 44 C. Evaluation Plan 45 D. Negotiation Status 45 List of Tables Table No. Title Page 1 Price Structure for Urea and Superphosphate 23 2 Summary of Projected Supply and Demand for Food Crops, 1985 and 1990 26 3 Estimate of Present Area, yield and Production of Selected Secondary Crops in Project Area 29 4 Incremental Area, Yield and Production in Project Area 24 S Projected Revenue at Domestic and World Market 30 Prices for Selected Secondary Crops 6 Estimated Cost Components by Crops 30 7 Benefit/Cost Ratios by Commodities and by Project 31 8 Summary of Cost Estimates by Allocation of Funds 38 9 Projection of Expendit'res by U.S.
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