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. FY 39
Annexes
A. Detailed Profile of Project Sites 43 B. Detailed Budget 52 C. Logical Framework Matrix 65 D. Environmental Assessment 71 E. Crop Protection 80 F. Cropping Systems 91 G. Fertilizer Crop Prices 95 H. Organizational Charts 101 I. PID Approval Message 105 J. Statutory Checklist 110 K. GOI Request for Assistance 119 PART I: SUMMARY AND RECOMMENDATIONS
A. Recommendations
A loan of USt6,400,000 from the USG to the GOI is recommended to support the Secondary Food Crops Development Project. The total project cost is estimated at UStl2,691,000 of which the COI will contribute US$6,291,000 in rupiah equivalent. Life of project is five years, beginning in January 1983 to January 1988.
The above recommendation is contingent upon the availability of USAID loan funds in US FY 1983. The loan will be fully funded at the beginning of the project.
B. Summ. ry, Description and Findings
This project will assist the Directorate General of Food Crops, Department of AgriCulture, to increase production and improve the marketing system of "secondary crops" known in Indonesia as "palawija". to For purposes of this project, the secondary crops will be limited peanut, soybean, corn, and cassava. and This project ib fundamentally an experimental, trial, demonstration Intensification project --- experimenting and testing new cropping over systems, demonstrating the superiority of improved cropping systems the traditional, improving post harvest operations, and developing the market for secondary crops. The project will be concentrated on three project sites representing various agronomic conditions under which be at secondary crops are grown in Indonesia. Greatest attention will the local levels but other studies will also address regional and national policy issues relating to domestic and foreign demand for secondary crops.
The objecLives of the project are:
(1) To bring about rapid adoption of recommended production technology using improved varieties, commercial inputs (e.g. fertilizers, lime, seeds, inoculum, pesticides) improved agronomic practices, and appropriate cropping systems.
(2) To improve the quality, storeability, and market acceptance of secondary crops by adoption of recommended pre and post harvest technology that includes harvesting, threshing, drying, storing and processing at the f€rm lcvwl and at various stages of the marketing chain.
(3) To evaluate result" of cxperiments, trials, demonstrations and related studies as hrqes for planning expanion of the project or an a bases for the formulation of appropriate policies regarditng prices, subsidies, production, consumption and market development.
(4) To identify possible extension, marketing and behavioral change models for maximizing the contribution of secondary food crops to imp- ved nutrition. This project is original in that for the first time, most of the agronomic, economic and social constraints will be addressed simultaneously. In addition, the impact to highly vulnerable target groups of changes in staple food consumption pat.erns in project areas will receive major emphasis. Current or traditional technology will be compared with improved technology that ha- been developed through cropping systems research. Trials will be conducted as a means of developing site and climate specific technology in areas of potential expansion. Also, the impact of changes in staple food consumption resulting from increased production and Improved marketing will be evaluated. This is an intermediate step necessary for the planning of a regional and national program of secondary crops development in Indonesia.
Bone, South Sulawesi; North Lampung, Lampung; and Ponorogo, East Java have been selected as pilot sites because (1) they are predomintntly secondary crops producing areas with tremendous potential for ei:pansion and increased production, (2) they represent different agro-climoatic conditions, (3) their population e3t secondary crops as supplement or substitute to rice, and (4) improvei cropping systems have already been tested with some degree of success in these areis.
All together, the project will directly affect 144,000 hectares operated by 72,000 farm families supporting approximately 360,000 people. It is anticipated thpt the introduction of the new cropping system will inc ease cropping intensity by 60% for peanut and soybean and 30% for corn and ca.isava thus bringing into effective productioi in incremental area of 54,000 hectares. Moreover, it is anticipated 'hat productivity in the incremental ireas will increase by at least 50Z through improved agronomic practices and judicious use of commercial inputs.
There are five components of the projects, namely, (a) provision of production and marketing inputs, (b) extension, (c) demonstration, (d) field trials, (e) training and (f) nutritional considerations, (g) credit.
Timely and adequate supply of production and marketing Inputs is critical to the success of the project. These production inputs Include fertilizer, lime, needs, insecticides, waedicides, herbicides, rlyzobium inoculum, small tillage equipment and draft animals for Lampung and Bone. Marketing inputs include drying sheds, simple mechanical dryers, storage facilities, simple harvesting and processing facilities, and quality control equipment.
The use and proper application of the above inputs will be accompanied by field level insLruction and demonstratiln to be conducted by six Field Teams, each one consisting of Cropping Systems Agronomist, Marketing and Post lirv a. Specinlist and Agricultural lconomist working with the regular extension workers (PPS, PPH, PPL) in the project sites. The.y will encourage the farmers to adopt cropping systems appropriate to the area, assist procure the inputs, and teach farrmera the recommended agronomic and post harvest management practice. (harvesting, milling, processing, storing, grading warehouse management). Also, they will encourage public marketing 4g8ncies (KUDDOO/Uw,5 aduriatwdalr to procure secondary crops on a regular and contractual basis and offer premium prices for products of superior quality# As a companion measure to the above extension works the Yield Teams will also supervise farmers groups manage one one hundred eighty trials and demonstration farms where the new cropping systems, Improved agronomic ~prae tices j.-proper,-use,,, f -Inputssn& e0aqu ipment _will1be demonstrated. The___ project will provide for the commercial inputs, the farmers will proie__'_ the land and labor and the Field Teams will provide the management and technical know-how# The Field Teams will also work inareas outside of the demonstration farms. These are called intensification areas. The field teams and cooperating farmer groups, will develop an annual farm plan that specifies the cropping systems to be followed, the types and amounts of Inputs to be used and the agronomic practices to be followed# The farm plan, approved by the field Team and certified by the Head of the Kabupaten Extension Office will be the basis for approval of non-secured production loan from SRI. The terms of the loan will follow present 311 requirement, Similar procedure will be used to obtain credit for participating KUDs private dealers In Intensification areas. The field Teams and RI and : ;' . .,', , u ' -% : '? .. :; ' : :< -4 : ,J? i ?L-.? _":;-KWD:' or private, ?/L dealers develop an Investment-- , " : ' plan staff will assist the i q : C " / , . " 4;;}i U .: i .: . , i"$$2 will specify 4: for physical facilities Improvement or expansion. This plan -- !i'the'' .), kind - ii' -and,,- ; ...amount- :. .of investment needed, economic feasibility analysis",,, of Investment, and repayment schedule. The Investment plan, approved by [ the SI staff, Yield Teams, and certified by the Kabupaten Chief, Ministry of Cooperatives or other cooperative officials acting Insimilar capacity will be the basis for applying unsecured business loan from SRI. There will be several types of experiments and trials In this project. Data for agoweconomic research on cropping systems, costs and returns, production functions, fertiliser-yield response, and variety trials will be obtained from the demonstration farms and intensification farms* Trials on posit harvest operation will be done at the BULOO Research and Training Center and at cooperating ZJD/DOWO/BULOO facilities. Trials on * cropping systems will be done In potential areas of expansion outside of * project sites. Special studies on national policy Issues relating to pricing, subeidies, import and export, market development, baseline evaluation and monitoring surveys will be done by selected Indonesian or U.S. Institutions., Technical workshops and coordinating meetings will be organised as necessary. All of the training under this proiject are short term, designed to provide specific management and technical skills to COX officials, extension workers# public and private marketing agents and farmers. Training given to 001 officials will consist of visitation travels or attendance to professional conferences related to upland agriculture. Three months training on production and marketing of secondary crops will be given to the Yield Teams In Jakarta organized by IILPP assisted by the technical agencies such as CR10 DGFC0 BULOO and AMRD bef ore they are posted in the project sites. On-sit- two weeks training on production andIpost harvest management organized by the Field Teams will be given to contact farmers, extension workers, public marketing agents as well as private dealers. The Secondary Food Crops Development Project providos an excellent .vehicle-faorAntearation-of-fo&. prod vct ipn,_,consump~o n urto Specifically# the concern here to forth: dnutrI tion - f ... beneficiariesactivities* and formulation of production andaketingiaetivitleI..f that provide maximum nutritional Impact on the target population. As an initial step towards this end, a market basket type study will be Included In the baseline survey. This study will establish the present consumption and nutritional status of the beneficiaries. It will also ostablish a basis from which nutritional Interventions will be formulated as the need arises. All of the above activities will be under the overall administration of the Directorate Genernl of Food Crops. Under It is the Directorate of Production where an office called the Palavlja Project Office (P10) will be created to administer the project. The -PO will be staffed by technical advisers consisting of an Agricultural Economist, a Cropping Systems Agronomist, a Marketing and Pbst Harvest Specialist# Food Policy Library Development Specialist. These technical advisers will be counterparted by similar experts from the Directorate General of Food * Crops and BULOG and together they will provide the managerial, adminitrative, supervisory and technical backstop to the Field Teams. There will be six field Teams (Fn) two In each project site. Like the 10,Ieach FT will consist of an Agricultural conomist, a Cropping Systems Specialist and a Marketing Specialist. They will be drawn from existing DOFO staff or recruited from outside. They will serve as the main extension arm of the project, working directly with the extension staff at the kabupaten level. They will be responsible for procurement of Inputs, organize on site training for extension worker (PPL), contact far-ers, and marketing agents. With the help of the FPS and PM, they will organize and supervise farmer groups working on demonstration and Intensification farms. They will assist farmers groups and KUD develop farm plans and Investment plans as basis for obtaining unsecured production and Investment loans.' They will also slit researchers S..collect farm level data and assist them conduct baseline and evaluation surveys in their respective areas. They will report to the P1O In Jakarta, through the Kabupaten and provincial extension service. Operational support services will be provided by various agencies of the government. For example, ,PiL wvill conduct training to the Tield Teams In cooperation with the DOFC, CRC and BULO. CRIYC will be contracted to conduct Cropping Systems Research in areas of potential expansion* Regional univerIties will be contracted to conduct baseline, monitoring -5
and evaluation studies and other special studies as required. Gad"ja* Had& University will be contracted to provide rhysobum inoculum. P.T. P21lTANI and P.T. PUShR will be contracted to provide agricultural Inputs while the Provincial Seed Centers will be contracted to provide the seeds for the demonstration farm#- This project will use the existing IMAS coordinating committee as a vehicle for coordination with other agencies Involved in food crops production,-.Thae.--otJect Diractor will become a member of the national BIW Coordinating Council while the Team Leader# of the field Teams will become members of the provincial BIMAS Coordinating Comittee. To ensure closer coordination among the participating agencies, a Palavwja Project Coordinating Committee vill be formed consisting of (l) the Director, Bureau of Production, DOFC, (2) Director, Research and Development, 3ULOG,. (3)Secretary to the Minister, Department of Cooperatives, (4)Project Director, Secondary Food Crops Development Project and (5)USAID Project Officar. The Project Director will serve as Secretary to the Committee, prepares the agenda, and keeps records of all actions and decisions taken by the Coordinating Committee. The Committee will eet at least ones a month but special meetings can be arranged by theChalrmmn as the need arises. Chairmunship of the Committee will be rotated among the members. These members of the Steering Committee may be changed any time at the request of their aespctive Director General. The Poject Design Tea has analysed the tchnicalt, economie, soeial, financial and administrative feasibility of the project. The members of the Team unanimously recommend approval of this project, The Team he identified features of the project which are critical to Its success* First Is the choice of qualified technical advisors. Second Is the administrative arrangements among partieipatigl agencies. The Team is convinced that thie project comes at a time when the policy environment Is favorable, when serious commituent towards food crops self-sufficiency is a matter of national goal. C, Policy Issues The principal policy issues are (1)subsidies to producers and consumers of scondary crops and (2) role of private ve public sectors in the marketing of secondary crops. 1. Subsidies and Pricing Ptlicles Altough there Is a considerable volume of private trade, the Ieconomy operates within a system of goverTment managed prices,for a broad range of commodities. The principal tools of priee management include subsidies on inputs, establlhment of floor and ceiling prices, control of Imports and exports and open market operation. -6 for example, the support prices for peanut and soybean are slightly above the CIF price of Importing these commLitIes but le than the actual price In Indonesia. Tor corn, the CI and actual prices are slightly le than the support price, which imply that if Indonesia is to become a surplus producer rather than a net Importer, It would find It difficult to compete In the world market. In the case of cassaval, as lon& as the dfod market for gaplek In the KUC holds# this market appears assured In the foressable future.
S Thekey question Is whet the government plans to do about subsidies. The . cono.c.alylls 'shows, that peanut and-soybsnwillcontinue to-besound development prospects even In competition with Imports. Corn and cassava have favorable bnfit/cost ratios overall. for corn this statemnt is true If some improvemnt in post-harvest handling will Improve the quality and prices In the domestic markt. Incresed export of cassava will require some Improvements in post harvest operations and continued concessional access to the 910. The subsidized prices of rice and wheat to the consumers have stimulated demand for these crops and depressed the demand for secondary crops. If plans to reduce these subsidies materialize there io within the lover Income groups, substitution of rice/flour diet to secondary crops, thus stimulating the demand for and prices of the secondary crops. 2. Pulblic vs Private Marketing Indonesia has developed en efficient buffer stock operation for rice de#lgod to contain price fluctuations in the maert. This is supported by establishment of a floor price that assur*s reasonable profit to producers and a celling that is affordable by consuiers. Because the difference between the ceiling price and the floor price Is narrow and because spatial and temporal price fluctuations are nslated by periodic market operation, there Is no Incentive for private dealers to participate in the marketing of rico
There o a simillar support price for selected secondary crope. HUsiver, the ectual arkeMt prices for peanut, soybean and munsbeas exceeds the support price by 462. 972 and 123X respectively indicating profitability of private dealership to let Involved In the marketing of these ecomodities. This also explains why govement procurement of these crops has not been successful since the market prices have always bon higher than goverment support prices.
While this project will address marketing Improvemnts i both private and public (IULO-supportid) operatlon it can be expected that private traders will continue to be the principal markting outlet for secondary crops. It to unclear as to what degee BUWO desires or io preopud to undertake public procuroent for secondary crops. A key premise of this project wMh has been verified at the local ad relonal levels Is that mrktlnrkpr exists and can be developed and Improved to handle secondary crop production If a sufficient supply at acceptable standards
<'9 ,, ' u .43 ,+2?:: :, : + :C : + + + 1 . J
+ ++5++ +++ + + ++ + : + : • .. . +; • : ++ + + +i + is available with certain assurance of regularity. Quality improvement and more reliable supply appear to be the necessary pre-requisites for private market participation, along with continuation of the present price structure hat allows investment in drying, storing and processing facilities ,
PART TT! PROJECT BACKSKOUND AND DETAILED DESCRIPTION
A. Backgrouna
I. Agricultural Development in Indonesia
Indonesia is a country over 3,000 miles long, located between South Asia and Australia. It consists of 13,600 islands located on bott. sides of the equator along the Java, Molucca and Banda seas. rorasts and swamps cover 60% of the total land area of 191 million hectares, of which approximately 75 million hectares are potential agricultural lands. About 18 million hectares are presently cultivated, one-fourth of which is irrigated. Some 15.6 million subsistence farmers produce food and cash crops on 15.8 million hectares of land, while 1,800 large estates occupy 2.2 million hectares for tree crop production.
Although Indonesia is rich in natural resources, it is a developing country in many respects. With per capita GNP of $520 in 1981, Indonesia remains the least devc.loped among the ASEAN countries. Recent estimates and other data indicate that perhrps 76 million or 52% of its 153 million people live at or below poverty levels, wJth some 50 million people having per capita incomes of less than $90 a year.
Poverty in Indonesia is predominantly rtral. The lack of employment is a major contributing factor. Under-employment is becoming the leading manifestation of poverty. Given an under-employment rate of 30-40%, the creation of productive employment and improvement in agricultural productivity are the main avenues to eradicate wide-spread rural poverty a ,d to bring about more equity in income distribution.
a. Role aind Performance of Agriculture in the Economy
Indonesla'ti agriculture is characterized by a large proportion of subsistence farming. About six million farmers own less than a quarter of a h ctare of land and another five million own between a quarter to half a hectare of land. The average farm size in Indonesia is about 1.0 hectare.
Although the contribution of agriculture to GDP and exports han declined during the. lant deci .d, the agricultural nector remains the pr!n.cipal nource of employment ond Income. Agriculture accounted for 26% of the GDI1 in 1980 and provided 60% of employment. Agricultural output has Increaned durin the parL decade at an annual average growth rate of 4% per year, making Indonenia among the developing worlds better performers in thid area. b. Trends in Agricultural Production
Of the total vslue of agricultural production, food crops and constitute 58%; tree crops, 18%; fisheries, 9%; forestry, 5%; livestock 10%.
Rice which represents 47% of all the value of agricultural products is the first the preferred staple in most of Indonesia. Production during two Five-Year Development Plans (Repelita I and 1"2 has made impressive by about gains. Annual rice production for the period 1976-81 increased was due 48%, from 15.8 million tons to 22.2 million tons. This increase to the introduction of high-yielding, pest and disease resistant of irrigation varieties; increased use of fertilizer; an expanded progran to construction and rehabilitation; and short-term production credit time, in farmers accompanied by intensive extension work. For the first 1982, Indonesia has attained its long sought goal of rice that it self-sufficiency. Consequently, the Government has announced does not intend to import rice in 1982. casava, sweet The major secondary food crops are soybean, peanut, corn, secondary crops potatoes and mungbean. Overall, the annual production of and it was either stagnated or decreased during the period 1974-1977, Secondary food only recently that an upward trend has been observed. rate of only crops production as a group experienced a composite growth production 1.6% from 1968 to 1977, compared to an aggregate agricultural that these rate of 4%. Results of cropping systems research suggests in production crops offer promising prospects for substantial increases and farmers income particularly in the upland rainfed areas. pepper, tea, oil The main tree crops are coconut, rubber, coffee, cloves, arable land and palm and cacao. Tree crops occupy about a third of total There are are Indonesia's second largest source of foreign exchange. some five million smallholders, many of whom are in the poverty group, their livelihood. who depend partially cr entirely on perennial crops for 833 million in 1976 The anntial value of livestock output increased from to this trend with to only $881 million in 1980. An important exception has expanded implications to this project is poultry. Poultry production in the future Rs rapidly in recent years and is expected to continue a strong demand for income increases. Continued expansion will sustain production of soybean and corn for feed purposes. value of agricultural Although fisheries account for only 9% of the total agricultural production it constitutes one of the more important years at an exports. Fish production increased during the past ten are the average growth rate of 4.5%. Indonesia's forest resources annual as forest largest in Asia. About 120 million hectares are clcified production. This lands of which 45 million hectares are presently in production. subsector accounts for about 5% of total agrirultural 2. Secondary Food Crops Development Strategies anO Policy Options
a. Rationale for a National Program of Secondary Food Crops Developmen.
Indonesia Indonesia has been a major food deficit country. In 1981 wheat, 100,000 imported 1.5 million tons of rice, 1.6 million tons of 1982 the rice tons of corn and 250,000 tons of soybean. Previous to in the import in any one year constituted about 20-23% of the supply A major domestic market or about 10% of supply in the world market. major rice drought, pest or disease infestation or natural calamity in exporting countries has serious consequences for Indonesia. Revoluti)n" Dramatic increases in rice production similar to the "Green By 1990 an in the 1970s are not likely to be repeated in the 1980s. to feed a additional 9 million tons of basic staple food will be required Recognizing population increasing by about 3 million personzs per year. II policy of rice these facts, the GOI departed from its Repelita I and Repelita III. self-sufficiency to one of food crops self-sufficiency in and This policy supports diversification of food crops production crops. consumption to include not only rice but also secondary the poor at a Secondary crops have potential for improving the diet of for relatively low cost. These crops can be used directly as substitutes recognized that rice, or in processed forms as bakery products. It is crops that the best way to improve the diet of the poor is to grow those easy to grow are labor intensive, relatively cheap but rich in nutrients, and eaten by the poor.
secondary As shown in the Technical Analysis, increased production of food crops is feasible within rice-based cropping systems. Through and cropping systems employment can be expanded, productivity improved, areas that farm incomes increased. It was demonstrated in some upland rice. farm income from secondary food crops exceeds income from where Moreover, secondary food crops can be grown in soils and climares of soil and rice cannot grow. They are adaptable to a greater variety climate and their growing requirements are less technologically demanding than that of rice. d verse than The domestic and export markets for secondary crops are more food those for rice. Aside from direct human consumption, secondary alcohol, oils crops can be processed for animal feeds, manufactured into and syrups or made into noodle and bakery products. Food technology and research and market promotion should enchance long-term demand acceptance of a wide range of new products. not only in the In summary, development of secondary food crops is seen food context of increasing food production but also of diversifying from rice consumption and production with the goal towards relief and water, dependency, improvement in nutrition, conservation of soil income and more of employment opportunities, increase in farm generation are guiding even distribution of income to the farmers, all of which principles stated in Repelita III. b. Potentials for Development
There is room for improvement in yield through research, support services. adoption of improved technology and increased expansion in the outer Similarly, there is a tremendous scope for area needed to realize these islands. Some of the more important factors potential are already in place. in the outer islands, for There is sufficient land area, particularly The World Bank estimated extensive cultivation of secondary food crops. that could be utilized for food potential lands of 22.7 million hectares crops cultivation in the outer islands. agro-climatic conditions Secondary crops grow well under different of these crops on experimental and throughout most of Indonesia. Yields and CRIFC have e~ceeded demonstration trials conducted by FAO, IRRI by farmers. substantially the yields attained generally
c. Constraints and Strategy addressed if secondary Several constraints must be simultanously in Indonesia. Research must are to assume a more significant place crops already showing promise for receive continued support. Research results and demonstration in different adoption need to be extended through trial Effective and cost-efficient models agro-climatic zones of the country. need to be explored. for improving research and extension linkage and demand issues require closer Marketing constraints and related supply problems of low, fluctuating and examination. Marketing concerns include of harvects anJ the requirements by uncertain prices; the seasonal nature good quality; limited services processors of a more reliable supply of the strong preference for rice for proce-sing, drying, and storing, and among Indonesian consumers. both cautious and ambitious. The approach chosen in this project is to limited project areas where Caution argues for a narrowing of focus possible expansion on a larger lessons can be learned and digested before serve the GOI and cooperating scale. In this way the project should precisely the conditions for donor organizations in determining more successful promotion of secondary crops.
B. Detailed Project Description
1. The Project Area agricultural extension The project will focus initially on six Penyuluhan Pertanian) located at the zones (WKBPP or Wilayah Kerja Balai district (kabupaten) levels in three provinces. These are as follows:
WKBPP Kabupaten Province Abung Timur North Lampung Lampung Banjid North Lampung Lampung Selli Bone South Sulawesi Palattae Bone South Sulawesi Sokorojo Ponorogo East Java Pulung Ponorogo East Java
Together, the six WKBPPs include an agricultural land area of 410,500 hectares cultivated by about 168,000 families with a total population of 897,000. These sites were selected because (a) they represent different agro-climatic zones and ethnic characteristics, (b) secondary crops are eaten as regular staples of the population, (c) there is potentil 1 for on increased production, and (d) preliminary research has been completed improved production technology and cropping systems which are ready for demon.:tration and dissemination to farmers.
The average farm sizes differ from one aree to another, ranging from less in than 0.50 hectares in Sokorejo, East Java to more than 2.50 hectares Bone, South Sulawesi. Details on the agronomic. economic, institutional and social profiles of each project site are founa in Annex A.
The project is designed for intensive trial and demonstration of production and marketing systems. However, expansion to an additional six WKBPPs is plann2d at the end of the third year, contingetit upon results of comprehensive evaluation of the six original sites. Choice of the second set of WKBPPs will be based on the same criLeria followed in this project.
2. The Project
a. Goals
The goals of the project are (a) to increase the production of secondary crops by about 15%-30%, (b) to improve the marketing system of secondary crops, (c) to increase household consumption by 10%-15%, and improve nutritional status of target groups, (d) Lo increase employment by 20%-30%, (e) to increase farm income by 20%.
The goal of increased production will be attained through a cropping systems approach where technologically and economically appropriate food crops are grown in sequence or in combination, supported by adequate amounts of input and intensive extension. This cropping systems approach may alter the existing sequence and combination of crops presently grown in the project sites, revise the cropping calendar, require additional investment in inputs and more intensive use of labor, land, and capital.
The increase in production assumes that recommended cropping systems for each site will be adopted by the farmers and that inputs and technical assistance are available whenever needed and that incentive procurement or market prices continue to prevail. Achievement of this goal will be verified by an impact evaluation study at the third and fifth year of the project.
The second goal is improvement in the marketing system. This will be attained through improved methods of harvesting, threshing, milling, storage and grading. To attain this goal, farmers will be trained by extension workers in the latest techniques of post harvest management; storage and warehouse operation and post harvest losses will be minimized in through fumigation and insect control procedures. Quality control acrordance with standards of procurement established by BULOG will be followed. Indicators of goal achievement will be through impact evaluation study showing increased volume of marketed crops of higher and quality. This will be reflected by higher prices, reduced spoilage generally increased demand for household consumption and market demand for industrial and commercial uses. This goal assumes that there is a latent demand for secondary crops if there is adequate and regular supply of high quality.
The third goal is to increase household consumption of secondary crops. income This will come about through income and substitution effects. As increases consumption of fresh cassava, peanut, and soybean will increase while consumption of corn will decrease. As production of secondary the crops increase causing secondary crops prices to derline relative to price of rice, there will be a substitution of rice for secondary crops in the diet. Achievement of this goal will be indicated through baseline survey and impact evaluation studies. This goal of increased consumption assumes that rice is substitutable for secondary crops and that income continues t. increase during the life of the project. will The fourth goal is to increase employment. Achievement of this goal fuller come about through increased cropping intensity, resulting from effect utilization of land, labor and capital throughout the year. The than in will probably bu more in the reduction of under-employment rather indicated in creating additional jobs. Achievement of this goal will be in the impact evaluation survey showing increased labor use, increases capital investment and fL.ler utilization of land and other farm resources. This goal assumes that there is substantial under-employment in the on the farm due to the seasonal nature of production inherent traditional cropping patterns. of The fifth goal of the project is to increase farm income. This is goal course a result of increased production and higher prices. This farmers and assumes that the production technology will be adopted by the that procurement and market prices continue to increase at a level provides profit to secondary crops enterprises. show less High-income households generally tend to consume more food and quantity or under-nutrition than poor ones. When diets are inadequate in have quality because of lack of income, increased incomes should higher beneficial nutritional effects by shifting these households to a nutrition consumption group. Iowever, it cannot be asumed that Improved increases. will automatically follow from production increasen or income b. Purposes
The purposes of the project are (a) to introduce improved cropping systems consistent with the agronomic and market conditions of (c) to the project sites, (b) to increase the use of commercial inputs, improve the system of post harvest management, and (d) to maximize the contribution of secondary food crops to improved nutrition.
in the six In the first purpose, it is expected that about 50% of farmers WKBPPs and about 30% of farmers in kabupaten Bone, Ponorogo, and North Lampung will adopt the improved cropping systems. To achieve this purpose, 54 demonstration farms will be located at each project sitc. These oemonstration farms will be used as models. Experiments will also be conducted in areas of potential expansion. The demonstration farms, of experiments trained PPLs, use of commercial inputs and the adoption improved agronomic practices will be the principal components of an effective extension system. Indicators of achievement of this purpose will be the rate at which improved agronomic practices have been adopted and the magnitude of increased use of commercial inputs.
For the second purpose, it is expected that 50-75% of farmers in the in project will increase their use of commercial inputs. This increase is the use of fertilizer, insecticide, pesticide and rhyzobium inoculum inherent in the adoption of new cropping systems and improved agronomic practices. An efficient input distribution system is already in place through the BIMAS Palawija program. Farm records and accounLs will show the magnitude of increase in the use of inputs.
The third purpose is to improve the system of post harvest management. To achieve this purpose training in post-harvest operations will be given to KUD and BULOG staff, private dealers and contact farmers. Also, post harvest facilities such as small scale dryers, and storage facilities will be provided. Harvest and threshing equipment will be provided and quality standards will be adhered to in procurement centers.
The fourth purpose is to maximize the contribution of secondary food crops to improved nutrition. To achieve this, emphasis will be given to benef'ciaries of the extension services and related assistance, how families use the increased production, and to whom the crops are sold. A simple baseline nutrition status survey and regular monitoring of nutrition consequences will allow for appropriate interventions as needed.
Achievement of the above purpose will be indicated by improved quality of products, reduced spoilage, increased consumer and market acceptance and increased prices and improved nutritional status..
c. Outputs
There are six outputs of the project. They are (a) the Palawija and Project Office, (b) six Field Teams, (c) trials demonstration farms intensification farms, (d) trained extension and KUD staff, private dealers and contact farmers, (e) special studies, (f) commodities, and (g) experimentr nnd trials. - The Palawija Project Office (PPO) is the implementing office of the project. It will be staffed by three technical advisors with specialties in cropping systems, agronomy, agricultural economics, post harvest management and marketing. GOI counterpart personnel with similar specialties will complement the three technical advisers and together they will provide technical and management advisory services to the DGFC, the executing agency for this project.
- The six Field Teams to be located in Bone, Ponorogo and North Lampung are the field implementing u.1 ts of the project. Each Team will consist of one cropping systems agronomist, one agricultural economist and one marketing and post harvest specialist. Together they will work with the PPS, PPM, PPLs and farmers at the provincial, kabupaten and WKBPP levels. They will also assist research workerr collect data for special studies, facilitate the provision of inputs, plan for design and construction of trials and demonstration farms, and assist farmers, KUD and private dealers develop farm plans, and investment plans for credit purposes.
- There will be 162 demonstratioi '.rms of 5 hectares each and 18 experiments of one hectare each. The demonstration farms will be used to demonstrate the improved cropping systems and the trials will be used to try new cropping systems in areas of potential expansion. All commercial inputs will be given free to the experiments, demonstration farms with close supervision on their use by the Field Teams and extension workers. Land and labor will be provided by the farmers.
- Similarly there will be intensification farms who will receive the services of the Field Teams but will procure their inputs through BRI loans.
- A cadre of trained PPL, PPM, PPS, KUD manap rs, contact farmers and private dealers will complement the Palawijd Project Office and the Field Teams. Together, they will teach the farmers recommended cropping systems and appropriate post harvest management practices.
- Special studies on agronomic, economic, social and policy aspects of food crops in Indonesia will be zonducted. The Project Director will establish an ad hoc panel of experts to establish areas of researchable tcpics, establish criteria for determining priorities, and guideline for proposal selection. Research proposals will be solicited from local or foreign universities, private individuals and institutions or from government agencies. These special studies will include baseline and evaluation surveys and feasibility studies. These special studies will be complemented by technical workshops conducted to support the various activities of the project. be delivered - Various types of commodities needed in the project will in each project site. These include operational support facilities such as motor vehicles, office equipment, production facilities such as seeds, draft animals, fertilizers, insecticides and rhyzobium inoculum; and post harvest facilities such as sprayers, dryers, and on farm storage. These commodities will be provided by the project. Production, marketing and post-harvest facilities and inputs in the intensification areas will be provided through loans from BRI.
Increased number of acquisition and improved library and information services at the BULOG Food Policy Library and the Research and Training Library at Tambun.
d. Inputs
There are five categories of inputs in this project. These are (a) technical assistance, (b) training, (c) personnel, (d) other operational support, and (e) commodities.
- The technical assistance will consist of 171 men-months of management and technical advisory services of which 156 men-months will be for long-term advisors and 15 men-months for short term consultants to work on specific components of the project.
- There will be 678 men-months of training consisting of 98 man-months of overseas training and 580 man-months of in-country training for Field Teams, extension workers, private dealers, contact farmers, and KUD officials.
- Personnel will consist of 1200 men-months of (a) three senior GOI officials that will counterpart the technical advisors in the Palawija Project Office, (b) eighteen GOI officials to staff the Field Teams, and (c) eight support personnel.
- Inputs in the form of operational support will be given by cooperating agencies through contractual arrangcment with the PPO/DGFC. For example, Cropping Systems Research will be conducted by CRIFC. Special studies, baseline and evaluation surveys and monitoring will be conducted by the universities. Credit will be administered by BRI, and inpuLs will be provided by Gadjah Mada University for rhyzobium inoculum, P.T. PUSRI for fertilizer, P.T. PERTANI for other agricultural inputs and Sang Hyang Seri for seeds.
3. Project Related Activities
This project conplements existing projects of USAID and other donor agencies. For example, results of research on secondary crops under the AID funded Sumatra Agricultural Research and Applied Agricultural Research and the World Bank's National Agricultural Research Projecta will be the bases for developing on farm trials and demonstrations. Demonstration farms on cropping systems and fertilizer yield response funded by FAO will also complement the project. it The World Bank's National Food Crops Extension II Project in so far as project. The addresses secondary crops will also be complementary to the institutions seed development component of this project will also use the established under the World Banks Seeds II project. indirectly affect Agricultural education projects supported by USAID will will be this project as the expertise developed under these projects and various called upon occasionally to conduct baseline, evaluation socio-economic studies.
PART III: PROJECT ANALYSIS
A. Technical Analysis
i. Institutional Structure
a. Directorate General for Food Crops
The Directorate General for Food Crops (DGFC) in the Department managing the of Agriculture will have primary responsibility fur line agencies within project. The DGFC is one of five commodity oriented by the Chief of the the DOA. It is represented at the provincial level directly to the Food Crops Agriculture Extension Service, who reports to Governor of the province for administrative matters relating matters agriculture, and to the Director General, DGFC for technical programs. relating to the implementation of national food crops Development, The DGFC, through its Directorate of Food Crops Production the national agricultural extension system for rice and operates branches food crops and horticultural crops. Provinclel DGFC secondary which they have offices at the district (Kabupaten) levels through On the average, operate a network of Rural Extension Centers (WIBPPs). Center serves there are 4-6 WKBPPs per K~bupaten. Each Rural Extension to a one field approximately 10 extension areas (WKPPs), each assigned with 1600 farmers extension worker (PPL). The PPL works indirectly progressive farmers. One through farmer groups (Kelompok Tanis) of 15-25 farmer group is headed PPL handles approximately 16 farmer groups, each the principal contact with by a Contact Farmer (Kontak Tani) serving as farmers (Tani Haju) the PPL. Each Kontak Tani supervises 20 progressive five additional who are responsible for extending advice to about farmers in each WKPP. farmers. Thus each PPL reaches about 1600 (16x2Ox5) by an extension supervisor The field extension workers (PPL) are managed by a staff of subject (PPM) at the Rural Extension Center and supported levels. This matter specialists (PPS) at the provincial and district staffed with trained extension network is now well established and adopted the "Training and personnel in Post of the provinces. It has success in carrying Visit" method of extension and achieved impressive of rice production. out the government's programs for intensification b. Supporting Institutions
While the DGFC will be the lead agency for the project, success training, demands participation of other agencies Itivolved in research, of inputs. credit, marketing, post harvest operations and the provision These include other agencies within the Department of Agriculture, of the especially the Central Research Institute for Food Crops (CRIFC) Agency Agency for Agricultural Research and Development (AARD) and the Other for Agricultural Education, Training and Extension (AAETE). (BULOC), the participating agencies will be the National Logistics Agency the Directorate General of Cooperatives (DGC), the rural banks, and successfully with regional universities, all or which have coordinated programs. the DGFC in the BIMAS, INMAS and INSUS rice intensification in that Expansion to secondary crops will require no itaportant change relationship.
Research - Extension Linkages
The AARD is responsible for implementing the national agricultural research cesearch program. It consists of six commodity oriented central main institutes and six supporting research centers. The CRIFC, the Research center for food crops research manages eight regional Food Crops serving Institutes, each with its network of experiment stations, location-specific needs for food crops research in their regions.
The need for close linkage between research and extension is assigned o AARD recognized---resiarch subject matter specialists (RSMS) for use are responsible for compiling and interpreting research results by the extension subject matter speciall3ts (PPS) of the DGFC departments directly at provincial ,and district levels and are expected to interact To further with research teams at research institutes and stations. strengthen the linkages, regional technical committees, with the DGFC representatives from AARD, AAETE, the regional universities and have already been formed to coordinate support programs and training activities for extension workers.
Regional Agricultural Univernities
Indonesia has es;tablished forty public universities throughout the the country under the Directorate General for Higher Education in Ministry of IklucatLion. Twe.nty seven of these have faculties of agricultural ac fences. DOA, In addition to their role in training pers~onnel for staffing the these regionail univirtti en constitute another network of agricul.ural to research instituLionn. Wlile the univertiMetIe are not formally linked advi sory boards the research .ystem of AAHD, faculty tuembers sit on the made available to of provincitil retiearch statilonn where facilities are trials. Cooperation univernity students and faculty to conduct research it; generally among CRIFC, research stat ions and the regional unlersitlen very good. Participation of the regional agricultural universities in this project will include assistance on socio-economic research, marketing assessments, baseline and evaluations surveys, monitoring, and training activities.
The National Logistics Agency (BULOG)
BULOG is a government agency established in 1967 to ensure that prices and consumers are provided an adequate food supply at reasonable that farmers receive stable prices offering adequate production by incentives. Basic policies of pricing and procurement are determined a technical group iith representation from the National Development Planning Agency (BAPPENAS), the Department of Agriculture, the Department of Finance, the Directorate General for Cooperatives and BULOG. and Initially BULOG was concerned only with stabilizing rice supplies prices. LateT it was given responsibility for other commodities, including sugar, wheat and cotton. It is the sole importer of rice, corn and eugar and administers all fnod aid programs in the country. Since and more 1978 it has been charged with maintaining floor prices for corn recently peanut, soybean and mungbean have been added to the list. at BULOG also operates a food Technology Research and Training Center harvest Tambun near Jakarta, which provides technical support on post at Tambun drying, milling and storage of food crops. Much of the program Institute, benefits from a long-term agreement with the Tropical Products a branch of the United Kingdom's Overseas Development Assistance research program. Other international agencies involved in post-harvest and the South are the International Development Research Center (Canada) East Asia Research Center for Agriculture (SEARCA).
BULOG's participation in the project will be primarily in act',ities training related tG drying and storage technology for food crops and in harvest of project personnel including DGFC extensiro agents on post storage. operations such as harvesting, drying, mill: W., processing and the In this connection, BULOG's Food Policy Library in Jakarta and this Research and Training Library at Tambum through assistance from pertaining project will become the reposicory and sources of information commodity to post harvest operation and management, and agricultural procurement and marketing.
Cooperatives
The village unit cooperatives (KUD) are responsible to the and are Department of Cooperatives. The KUDs numbered about 600 in 1972 Development expected to increane to about 5,000 by the end of the Third is to Plan in 1984. A goal announced by government decree in 1.978 country. eventually establish one KUD in each village throughout the This underscores the official commitment to cooperatives. The KUDs are expected to function as channels for distribution of production inputs to farmers and to participate In BULOG's food procurement program. The government has provided substantial technical support and financial subsidies to the Kilds to enable them to carry out these kictivitiet.
In this. prJet:t the ildt s will be ,,n Import .int source of production input -, such as fertilizer and pesticides, pr vided through supply channels operated by P.T. Pertani. The KtIl)s are not nowa significantly involved In ptirchatse, processing or storage of any of the secondary crops. These crops now move almost entirt'ly thrumgl private market channels. iowever, when ard if market prices fall below support prices for these crops the KRDs could be involved In procurement, assuming they are able to purchas- or process commodities meeting BULOG', quality standards.
Wherever KUDs are functioning and have potential for pro idi ,g input supply and/or marketing services the project will Involve and assist them in improving their capability. The project will also examine and assist other cooleratives or farmer group associations.
Credit
The Government has tried to meet credit needs at interest rates generally lower than those obtainable from private sector sources. The B:nk Rakyat Indonesia (BRl) began setting up brdnch banks at the village unit level (BRI Unit Dsi) in 1969 to handle the large volume ot BIKAS production loans. Thece banking units ire now dispersed throughout Indone sia.
In addition to the need for credit to finance production inputs any farmers need to borrow for consumption purposes. The BIHMAS program loans include from Rp.5,000 to Rp.16,000 per hectare to cover consumption needs. Another formal source of constu..ption loan.- Is the Lumbunkj lksa located in many villages which supply rice for consumption and seed. Ticir loans are for up to 6 months at Interest rates of 30 per cent or more per annum. Other sourceti of consunmpt ion 1 nna are pawn shops and village banks (Bank LNess). Of the Informinl sources, the high interest iJon system Isa cont Idered vry important. Other Important sourcra are neighbors, friends, traders and landlords.
For medium a:nd long-term credit need, of farmern the KIK (small investment credit) program is avalale to finance such capital items as tractors, irrigation pumpu and btiffdiloec.
Short-term fluancing I: roquired for mi: ket ing crops as stocks pa ns along distribution chantnels Irom f7arm to ronum.rti. Thi Includes fillnarcing for off-farm storage bt tween harvest-i a nd for processing at various points In the marketir g chain. Large who lete traderts in majaor cente.t may provide credit for etach trader In tihe ,iupply chair.. For rit,.ck s that may move through ,overnment channels each party in the dist ribution (11.1a n financing government have to negotiate separately for credit. Credit for provided by the Bank of stocks held by BULOG and for procurement is for stock Indonesia. The fRI finances the credit needs of the KUDs hand I I ng, sector traders. There are several formal sources of credit for private small traders. The KCK (Small Traders Credit) is available for very at 12 per cent Loans are for a maximum of Rp.1OO00 for up to 3 months available for till to 36 interest per annum. The DRI Kredit Hini loan is long-term credit is available months for up to Rp. 200,000. Medium and equipment, storage to KUDs from 1t0LOG iand BRI for rice mills, drying facilities and miacellaneous equipment. available in intensification In thits project, unsecured credit will be terms of inttrest. areas through village branceg of BRI at prevailing certified farm plan will be Instead of collateral, a duly approved and and certifted required for production inputs, and a duly approved and equipment. An approved investment plan for post-harvest facilities of the cropping pattern to and certified tarm plan includ-u specification the agrot )mic be followed, the amount of production inputs needed, revenue. The farm plan practices required and expected production end and fisrvers group, certified will be developed jointly by the Field Tears , t l Extension and by the Chief of the Kabtpa ten Office of Arri-.ultur approved 1,y the BRI M.tng-r of the villal e. Joint ly by the The Invetment plan for cooperatives will be developed spec ifei the purpose Field Teatis , KUD ini.,iger and BRI staff. Thiu plan tichedule. An economic of te loan, the anount of the loan, the re paymen': the propout- 1 "nvestment is teasibility analyt i Isa needed to .ssure that lt met on time. The economically viab'e and that the repayment tichedule anti a& proved by the investment plan t, st be certified by ti.- !.UD MInager Kanager of the DR, Unit :)v.,,a.
The Private S.ector rice, most Des ite the import ant role of BULOG And KUD, in rirketing , crops move of the rice marketed and virtuaily all of the other f crol. are consumed through private comnmercial channels. "tince mo-t much of t' Ir Wi.hin a ahort distance of wh e the produiced at the vil lage level marketing involvem prtty traders and lector,: "cottage I udutry" proceusors buying directly from the fa rter tintt am.,Il conr.uptil ini the local preparing a varne , if products for sale and of tr.ecotniary cropu that move tO community. The relatively nmall portion private fir .s 'rtr thr village larger m.arkets po through a ri" twork of to large wht.lem ler, proceisorn colle tor to tiub-dititrict uhuilesalers or exporters. t m; ]r provitnial centertr.
the ilinttllb tlon i . production Private dealers ae .tlti- attiye in ir. vu!l .ii itt i,.T. l'ertAni havo 4 inputs. While pul it, ti enciewir 4,chC nn pentilelder dw?. 1o the monopoly ill dintriluit tol of fertilizers -and ors auh'4'ltribt und ri-tnl lenr are -,till tile kabupaten level, private ew level tarehoses to the major utppli ura of thene materiala fr.thupat farmera. A few large private firms have made investments for processing and/ok exporting some of the secondary crops. In Lampung severcl large-scale modern factories are now in operation making starch. Othir firms have made large investments in chipping and pelletizing facilities for processing dried cassava (gaplek) for export as cattle feed.
As production of secondary crops expands beyond the needs for local consumption, the private sec.ur is expected to have major responsibility for processing and marketing the extra output.
2. Production Feasibility
Cropping Systems
In the lowland, padi is transplanted to puddled soil soon after the soil is prepar2d at the beginning of the rainy season. If rainfall or irrigation water is sufficient padi will follow padi. If moisture i insufficient for two crops of rice, t,,n soybean, peanut or corn will follow padi. be In the uplands, rice is planted at least once a year. Corn may planted two weeks after the rice. Cassava may also be planted in the rice-corn intercrop. A legume often follows the corn crop. In South Sulawesi and East Java, soybean is often planted in monoculture. A with the rainy season is frqralizedcor cassava/legume cropping pattern beginring
Sequential cropping is urged. Part of the farm could be dry seeded (gogoranca) and part transplinted in order to spread the work load at planting time. An early mat ring rice will leave sufficient moisture for the following legt,e. The legume can be planted before the preceding rice crop is harvested.
In the uplands, ir~ercropplng in urged. Planting dates can often be adjusted to fit the desired moisture pattern. Some combination and sequence of rice, corn, cassava and legume is recommended for maximum calorie and protein yield per acre. Fertilizers are economic on some red, yellow podzolic solls even with the low yielding varieties. Hinimum tillage planting for legumes in recommended.
Several cropping ny-item de.nigns have been tented based on rainfall patterns, soil types, renponue to fertilizers and lime, and crop varieties for the regionn in Lampung and South Sulaweui.
3. S!pply and Distribution of Injuitfa
a. Fertilizer
Prior to 19Wl, practically all fertilizers ware timed on plantation crops. Fertilizer dintribution syptem for food crops was not atablinhed. Later, uhen fertilizer urne was expanded to for the include food c, ps, P.N. Pertani, the supply agency extension Department of i riculture used the cooperatives and for distribution. It soon found that it could not networks producing efficiently distribute fertilizer t3 all the food crops and row the areas. Therefore, In 1967/1968 P.T. PUSRI the first given che largest government fertilizer producing company was system that has responsibility for distribution. The distribution dealers to developed combines both government agencies and private distribute fertilizer down to the village level. with expansion in P.T. PUSRI's expanded role has tended to coincide produLtion capacity. In 1980 it was assigned essentially domestic This control from port or plant to Level III (Kabupaten). monopoly consumption came after domestic production of urea had exceeded during the period 1977 to 1980. insufficieuL to The margins allowed private retailers have been 1981 the price to encourage carrying of local level stocks. In Level IV at Rp. farmers was fixed at Rp. 70,OO0/HT and to the zetail marein was 66,000/MT for both urea and TSP. Thus the total price was fixed at about Rp 4,000 or $6.50/MT. The port or factory to the Rp. 41,000/MT and the margin for import and distribution t40). At that village level averaged about Rp. 25,000/MT (about about Rp. 130.000/MT time the CIF price of urea was estimated to be was made up by a (t210). The difference of Rp. 89.000/MT (t144) Baak estimar s of government subsidy payment. Table 1 shows World costs and margins. told that urea at the In February 1982 the Project design team was an exchange rate of factory was billed at Rp. 170,000/M.T. ($265 at Rp.640 to the US dollar). Table 1
Price Structure For Urea and Triple Superphosphate
1981 IBRD Fertilizers Price (USt/ton) Rp/Kg Urea 239 149 World export price, f.o.b. Europe 254 159 Ex-factory price, Palembang /I 22 distribution to retail level + 35 Handling and + 4 - Transport to farm 183 Farm-gate price (economic price) 293 (112) (70) (Financial farm-gate price)
Triple Super Phosphate (TSP) 208 130 World Export price, f.o.b. Florida + 56 35 Ocean freight and insurance + 35 Handling and distribution to retail level + 4 Trrnsport to farm 303 189 Farm-gate price (economic price) (112) (70) (Financial farm-gate pric')
IBRD world market /1 Urea is valued at ex PUSRI factory, Palembang; have been adjusted price projections for bagged urea, f.o.b. Europe for S.E. Asia markets with a US$15 transport premium.
b. Pesticides pesticide P.T. Pertani, a government corporation is the major branches in every major and Insecticide distributor in Indonesia. It has in smaller city with private dealer and cooperative distributionship delivery of towns. Assurance has been made by DGFC that direct made to the project fertilizer, insecticides, and pesticides will be sites on cash and delivery basis.
c. Seeds same The Department of Agriculture proposes to follow the has been used for organizational scheme for secondary crops seed as of rice. Commercial production and distribution of improved -ieties cooperatives or seed is marketed through private dealert illage programs are directly by the growers. Certificition i grading published standards. controlled by the government according to In this project, it was determined that minimum funds to support specific seed processing and storage centers at Kabupaten levels in the three project areas would be needed to supplement other funds potentially available through the World Eank Seeds II. It will be incumbent on the DGFC to insure that secondary crop seed passes through the phases from foundation seed to extension and other regulated seed grades down to the farmers involved in field demonstrations.
The system of seed multiplication and distribution in Indone3ia has moved toward private enterprise within the last five years. Seed production costs were about 20% higher on state operated farms than on contract grower seed fnrms. Traders sell an appreciable portion of planting seed in the nation. Indication are that private industry will continue to the enter every role in the seed system that is profitable. However, experiences of the U.S. and other nations indicate that the Indonesian government will need to occupy a vital role in seed development.
d. Rhyzobium Inoculum
This project proposes support for a developmeat and production an program for rhizobia inoculum in Indonesia. In order to guarantee adequate supply of inoculum for the project, support to .GajahMada on University is needed to ensure adequate supply and continued research promising rhyzobium strains of soybean and peanuts.
4. Marketing
a. Supply and Demand
The marketing problems which the project addresses must be accounts considered in rhe context of an available supply of rice. Rice for the largest part of total resources devoted for food production. total During the period 1968-1977, rice accounted for 65 to 74% of have starchy calories and about 53% of total calories. Maize and cassava about 3% each contributed about 10% of starchy calories, sweet potatoes from and wheat 2-3%. Cassava and corn have tended to vary considerably consumption year to year. Among the other important food staples soybean 2.3 to increased from about 3.1. to 6.2 kg per capita and peanuts from 3.3 kg during the same period (see Table 2). on Where secondary crops production goes from here will depend heavily An price incentives, available technology and market acceptance. be important aspect in reducing costs and increasing productivity will and development of integrated cropping systems particularly for corn also cassava within the dominant rice economy. Improvement in qualit to compete will be very important for these new commodities if they are with other foods. growth in Peanut and soybean face favorable propects with respect to both face demand and the prices consumers are willing to pay. They formidable tnchnical production problems In competing with foreign to capitalize on imports. Until now no meaningful effort has been made as a means of reducing the ability of soybean and peanuts to fix nitrogen yields. their costs of production, and greatly increasing soybean. Given the Currently Indonesia is importing about 40% of its soybean, it is rise in incomes and the strong demand for peanut and levels could likely that substantial increase in the current production in price. Peanut be absorbed in the next few years with little reduction food crops prices have been particularly strong relative to other including soybean. prices less than The increase in soybean imports has affected peanut an adequate soybean prices. Soybean evidently is not considered was 75% of soybean substitute for peanut. In 1969 when the peanut supply price. However, by supply, soybean prices were about 75% of the peanut to about 50% of late 1979 and 1980-81 when peanut supply had fallen under 50% of the soybean supply per capita, soybean prices were well supply of peanut price of peanut. During the 1969-1980 period per capita increased by about aO% and soybean by about 100%. demand for major Table 2 shows recent World Bank estimates of supply and of the recent food crops. Though these data do not reflect the latest for other rice production, they are indications of the likely balance for corn. crops, that is, a surplus of cassava and potatoes and deficit See Table 2.
b. Market Structure for Secondary Crops
Indonesia was once an exporter of corn but now it is a net Indonesia started importer. As corn exports shifted to imports in 1976, EEC where price to export large quantities of cassava mainly to the In general, exports of policies favored cassava over corn for feed use. traders have been cassava are handled by private traders. Also, private under allowed to import soybean, corn and other feed ingredients government controls. In Domestically, private trading is permitted in all food commodities. heavily on its food procurement and distribution operations BULOG depends level link between private traders and cooperatives to provide the lowest supports were it and producers and consumers. Beginning in 1978, price corn and extended to secondary crops including soybean, peanut, provide support mungbean. However, BULOG's ability and willingness to these crops have prices has not yet been tested since market prices of generally been above the support level. have from time to Corn is an exception. Market prices at the farm level More importantly, BULOG time fallen below the announced support levels. support program has set standards for each of the crops in the price cent of broken based on moisture content, insect infestation and per Surveys by kernels - qualities which greatly affect their storability. for all of these BULOG and the Department of Agriculture indicate that crops except rice, much of what moves through market channels, fail to meet BULOG's minimum standards. BULOG has assisted the KUDs to improve the quality of rice by providing dryers and drying floors. They have up to now provided no similar assistance for the other supported crops.
Table 2
Summary of Projected Supply and Demand for Food Crops in 1985 and 1990 (MMT a/)
1985 1990 Surplus/ Crop Supply Demand Surplus Supply Demand deficit deficit
-2.0 Rice 21.5 23.8 -2.3 26.1 28.1 0.3 Corn 3.9 4.2 -0.3 4.7 4.4 17.7 16.4/a 1.3 21.3 19.4 1.9 Cassava 1.5 Sweet Potatoes 3.5 2.4 1.1 4.2 2.7 n.a Peanuts 0.5 n.a n.a 0.7 n.a n.a Soybeans 0.9 n.a n.a 1.1 n.a
/a. Includes 0.6 million ton for used, losses and feed /-. Includes 0.4 million ton for losses and feed. major Source: World Bank, Indonesia Policy Options and Strategies for Food Crops, November, 1981.
For corn, cassava, soybean, peanut, marketing is almost exclusively the private. The cooperatives (KUDs) operate largely as an arm of or government and have been most active with rice. Private collectors For traders buy crops either directly at the farm or at local markets. is followed. some crops and areas the practice of buying in the field The collector or processor buys the entire crop, e.g. peanuts or cassava, and does the harvesting, hauling, drying, etc. Small local collectors sell directly to consumers or small local The retailers or they may sell to processors or to large collectors. larger latter may sell locally but more likely will move the commodity to consumption or processing centers after which it goes through a distribution system to reach small retailers and then consLuners. depending Obviously the margins between farmer and consumer vary greatly on the intermediaries and distance involved.
c. Post Harvest Technology
Any generalization about harvest and post-harvest technology is methods are likely to apply only in very limited situations. Traditional product typical but vary greatly from place to place and of course irom deals to product. The major problem for the crops with which the project down - cassava, corn, peanut, soybean - is bringing moisture levels general quickly enough to prevent serious product deterioration. In in terms of fumigation is non-existent and storage is very inadequate Drying sanitation, aeration and moistu:e, insect and rodent protection. from the is almost totally dependent on the sun with little protection cleaning, rain except incomplete coverage or movement indoors. Good important to control of Insects, is difficult with available technology and mostly done by winnowing and poisibly coarse screening. Humidity, and other continuous warm weather contribute to the build-up of insects pests of various types with pose serious problems.
d. Recommended Actions
The above analysis indicates several actions needed under the following project to increase the probability of marketing success. The support activities will be undertaken directly or provided with financial under the project: review of 1. Support for analysis along with periodic high-level crops included the local and world supply, demand and price situation for on under this project. This should provide a basis for decisions relative intensity of promotion of the various crops.
2. 3tudy of different low-cost methods of harvesting, processing similar crops and storing crops in Indonesia and in other countries where are important and conditions similar. and 3. Systematic introduction and testing of facilities, equipment methods which appear to offer promise for reducing harvest and form. This will post-harvest losses or provide a more acceptable product prospects be followed by demonstrations of systems and equipment where appear favorable. for 4. Systematic study of costs and returns to alternative methods carrying out various harvest and post-harvest functions. to 5. Surveys of marketing channels and their costs ind benefits would identify points where well-designed technological interventions yield high returns. affect harvest 6. Analysis of alternative cropping systems as they and marketing and post-harvest processing (especially drying), storage problems. and financial 7. Cooperation with and support of private industry promotion and institutions to introduce and support manufacture, harvest and post-harvest financing of improved equipment and methods for operations. to identify 8. Study of the system for di tribution of inputs constraints to achievement of project objectives. technicians and 9. Training both in-country and abroad of marketing who will work economists at various levels and of extension personnel with farm families and directly with local traders and processors and farm groups. Field Teams 10. Technical assistance, including the kabupate-level and long and short-term xpatriate specialists. as appropriate. 11. Holding of technical and coordinating workshops
5. Nutritional Concerns the following For nutritional purposes, the project will include components: in all project areas. 1. Collection of baseline data on nutrition of the areas, and how 2. Assessment of food and nutrition problems and problems. they are related to social and economic structures
selection of 3. Inclusion of nutrition criteria in the increases or income beneficiaries to assure that production or food deficit changes benefit those malnourished housholds communities.
of individual 4. Conduct of in-depth consumption studies commodities. extension workers 5. Training of secondary food crops agriculture to nutritional objectives and concerns.
B. Economic Analysis as incremental benefit The procedure used in this section is known in evaluating the economic cost analysis. This is a method used package such as the one viability of a newly introduced technology has been used in evaluating the proposed in this project. This methiod program of the government. successful BIMAS/IIAS rice intensification This analysis proceeds on two levels: (a) using subsidized and unsubsidized input prices and (b) using domestic and world prices of outputs.
1. Estimate of Production
In 1980/1981, the area, yield and production of selected secondary crops within the project sites are shown below:
Table 3
Estimate of Present Area, Yield and Production of Selected Secondary Crops in Project Area.
Area in Yield in Production in Crops Ha Tons/Ha Tons
Peanut 15,000 .53 7950 Soybean 23,000 .56 12880 Cassava 32,000 11.12 355840 Corn 74,000 .77 56980
As a result of the project, it is expected that the above cropped area for peanut and soybean will increase by 60% and cassava and corn by 30%. These increases are due primarily to increased cropping intensity, areal expansion and changes in land use brought about by the new technology. Moreover, it is anticipated that productivity will increase by 50% as a result of improved cropping systems, use of better varieties, improved agronomic practices and increased use of Lijmmercial inputs. Given the above, and anticipated spread effects of rhyzobium inoculum outside of the project site, the incremental area, yield potential and production potential are estimated as follows:
Table 4
Incremenetal Area, Yield and Production in Project Area
Incremental Yield Potential Production Potential in Tons crop Area in Ha in Tons/Ha
Peanut 9000 .795 120000 a/ .200 b/ 31,155 Soybean 13800 .840 - 120000 a/ .200 b/ 35,592 Cassava 9600 16.680 160,128 Corn 22000 1.155 25,641
a/ Spread effect of inoculum outside project site S/ Incremental yield 2. Estimate of Benefits
The revenues derived from the above production are based on current domestic prices and world market prices. The use of world market prices is necessary to determine the viability of the project if in the future Indonesia will enter the export market. Table 5 shows the revenues derived from each crop based on the above production potential and world and market prices.
Table 5
Projected Revenue at Domestic and World Market Prices for Secondary Crops
Prices Per Ton in S Value in $1000 Prod'n Crops Potential Domestic World Domestic World
Peanut 31,155 1.1,015 $500 5.31,622 $15,577 Soybean 35,592 $. 508 $295 5. 18,080 $10,500 Cassava 160,128 $. 50 $ 50 5. 8,006 $ 8,006 Corn 25,641 $. 156 $150 5. 4,006 t 3,846
Total 5. 61,714 37,928
3. Estimate of Costs
The internal project cost is *12,691,000 shared by USAID and GOI on approximately 50:50 basis. However, total program cost which is the basis for estimating the benefit/cost ratios must include farmers' cost for investing on additional inputs and the GOI cost for subsizided inputs. See Table 6. Table 6
Estimated Cost Components by Crops in $1000 Total Cost Total Cost Crops Project Cost Farmers Cost Su idy w/o subsidy w/subsidy
Peanut 5,537 1,602 1,495 8,634 7,139 Soybean 5,764 1,955 2,061 9,780 7,719 Cassava 412 210 174 796 622 Corn 957 350 618 1,925 1,307
Total $ 12,691 5 4,117 $ 4,348 5 21,156 $.16,808 4. Cost Benefit Analysis
Based on the estimated benefits and cost presented above, the the project as benefit/cost ratios can be computed for each crop and for a whole. These are shown in Table 7.
Table 7
Benefit Cost Ratios by Commodities
Crop World Domestic Market Market Prices Prices
Pean-t: Without Subsidy 1.80 3.66 With Subsidy 2.19 4.43 Soybean: Withoiit Subsidy 1.07 1.85 With Subsidy 1.36 2.34 Cassava: Without Sulbsidy 10.05 10.05 With Subsiiy 12.87 12.87 2.08 Corn: Without Subsidy 2.00 WiLt Subsidy 2.94 3.06 2.92 Project: Without Subsidy 1.79 With Subsidy 2.26 3.67
On the basis of the above results, the project appears economically domestic viable. The B/C ratio for the projcct in both the world and markets with or without subsidy are favorable. input to Cassava has the highest B/C ratio because it takes very little in this increase production. Moreover, the price of cassava used when the EEC analysis reflects historical prices over the last few years to export market was wide open. It is possible for the B/C ratio decrease with reduction in domestic and world market prices resulting from the EEC established import quota.
Peanut and soybean have high B/C ratios in the export market but and relatively low in the world market. The reason is that peanut market. In are higher in Indonesia than in the world soybean prices in the tun, this implies that Indonesia will have difficulty competing for export. world market if and when it will produce sufficient quantity shows a Corn is also an economically viable enterprise. Although it very well favorable B/C ratio, a subntnntial increase in production can demand decrease the price particularly because of its inelastic this characteristics and negative income elasticity. To overcome and diverse situation, ways should be explored to develop the various for the industrial and commercial uses of corn. The potential for direct human development of corn rests primarily on uses other than consumption.
C. Social Soundness Analy is an The social soundnesf analysis for this project requireb project assessment of the socio-cultural feasibility of the proposed potential spread of activities on each site, the social factors affecting probable social the new technology beyond the project sites, and the of the project. consequences to the direct and indirect beneficiaries
1. Socio-cultural Feasibility components of This section examines the appropriateness of the major attitudes, the project with respect to social characteristics, The organizations and institutions of the expected beneff,.iaries. Javanese in beneficiaries are the Buginese in Bane, South Sulawesi, Balinese in North Ponorogo, East Java, and the Javanese, Bataks and will attempt to Lampung, Lampung province. The following discussions package appropriate answer such questions as: Is the proposcd technology Is this proposed to the educational level of the expected beneficiaries? institutions, technological package suitable to existing organizations, technically attitudes and culture, and is the technology package of the project appropriate to the agro-climatic and economic conditions sites. is not new to the The cropping systems approach to upland agriculture but perhaps new to Buginese in Bone nor to the Bataks of North Lampung, The Buginese in Balinese and Javanese transmigrants in North Lampung. of North the interior of Bone and the Bataks in the upland regions by necessity. Lampung have for years been growing secondary crops and the difficulty of Because of the upland conditions of their farms developed a system impounding run-off water from the mountains, they have season and other of agriculture where rice is planted during the rainy not produce foodcrops during the dry saason. Because they could their rice rice for themselves they have had to supplement sufficient As observed in the diet with other staples such as cassava and corn. production and course of interviews, they are familiar with the utilization of secondary crops. in Lampung do not Although the Javanese and the Balinese transmigrants having been have similar upland agricultural experience and background, over the years by raised in lowland agriculture, they have adjusted sites. Following the necessity to upland farming in transmigration Javanese and the examples set by the Buginese and the Bataks, the to upland conditions Balinese plant only those crops that are suitable Rice, corn, and and those that command high prices in the market. and peanut, soybean and cassava are grown primarily for home consumption, mungbean are grown for market. It is clear therefore that the expected beneficiaries are familiar with the production and use of secondary crops. Whether they would accept a new package of technology that would increase production is another question. Examination of their attitudes and ability to change suggests that they will. The Javanese, Buginese, Bataks and Balinese, like most farmers, are known to rLspond to economic incentives. On the other hand, being subsistence farmers, they are also known to avoid risks preferring the traditional methods to newly introduced technology unless they are convinced through demonstration that the technology works. In thin project, the new package of technology to be introduced should offer the potential beneficiaries sufficient economic incentives and security to induce rapid adoption. The economic incentives come in the form of increased production of corn and cassava for home consumption and higher market prices for soybean, peanut and mungbean. Trend analysis of prices for the latter commodities show that their prices have increased faster than the rate of inflation. As Lfor Lorn and cassava, analysis demonstrates that these products are typically consumed in combination with rice in an effort to minimize risk of hunger, with the proportion of each depending upon the relative prices of these commodities. Moreover the combination of crops to be grown under the proposed cropping systems minimizes risk in that it allows for spreading both the biological and economic risk over several crops and over two to three cropping seasons of the year.
Examination of the beneficiaries' age structure, education, pattern of land ownership and sharing arrangements also suggests a motivation and ability for rapid adoption of technology. First, a majority of the younger farmers have completed at least primary education. This indicates that they are less tradition-bound and more likely to accept improved methods of faiming especially when endorsed by community leadership and extension workers. Second, a very high percentage of the farmers own their land which Implies that the increased benefits from the new technology will accrue to them as owners of land, labor and capital. This should notivate them to take r sks and invest in production-increasing Inputs. Similarly current share-holding arratigements suggest that the gains will be shared equitably by the landlord who owns the land and the laborer who supplies the manpower.
Two common characterintics among the different ethnic groups are (a) respect for leadership and authority and (b) deference to civil servants. New technology will be adopted only if community leadership understands and endorses the project. This requirin educating contact farmers, progressive farmers, village chiefs, the Camats and the Bupatis. A9 soon as they are convinced of the benefits tnd advantages of the ne,- technology, there is n high degree of assurance that farmers generally will adopt the new technology. Thin in further re-inforced by the loyalty of farmers to government extension agents already. known to them. In the preparation and deritgn of this project, cooperation anti assiutanco of kabupaten and local officials as well as selected farmers in all project locatlonn wits excellent. There in already an expectation that the project will bring potential banefito. for rapid adoption of improved A final indication suggesting feasibility efforts carried out in the technology are the results of two earlier South Sulawesi, project areas. One was the LAPO-ASI in Kabupaten Bone, Lampung Uttara. Both and U.e other the iknur Tani program In Kabupaten areas to increase rice were intensification programs using upland in demonstrating production. These intensification programs succeeded cai equal that in sawsah if proper that rice production in ralnfed areas levels are followed. The management practices and recommended fertilizer to intensified extension success of these projects were due primarily oL course, good weather. work, delivery of inputs at the proper time and,
2. Beneficiaries and Spread Etfect! through tihe project It is intended that new technology introduced project areas, (b) will spread (a) within tho target groups in the or within the province, outside of the project tsites within the ktiupaitten ant (c) within Indonesia generally. will he some 500 farmer The most direct beneficiaries of the project 900 hectares of trial, and cooperators cultivating approximately very snall (less than one demonstration areas. These will vary from 5 hectares. Through the hectare) Plots to units as larg' as + will instruct tarmers in the demontitrations the field extension agents syt tt.ris aind pi)st-harv( s t operations. use of improvd technology, cropping be to farmiern in the The next immediate Itipread efiect will to alfect approxitmately 69,300 intensification aretat. This Is expected farm titre 'i the ,roject is total hectares ti Year 5. I average mplies t di -([Ixilcviryt population calculated at 2.0 hectaret, thilu 3),(000 people (5 Individuals per of about 72,000 farm faniliv.- and ibout firm family). a driton-tratiion ,reaS will dep-nd on Spread to other Intenraiitcation and Year I. It this exponision occurs thorough evaltiation of re!sults (Itirig t tIn area sift.crled would bring an planned, a polsl lie PA increasr 26,00)0 f ail 1a:iliru and 130,000 additional direct heneficlarea tit about people by Year ' to it Imulat e spread e fect the nhe meehani m but It Into the projct kabupat1Ii level. Tere will 1e placement oI the FIeld "reama at the "van ail the P'P:; and P'Nt working conastant Inter-aCtloti : :r ield t, a ttenitlou moonig l, in thlir way. . project will .aitt at this le t ie ,)ouiI I " f r, ttle . i tllitloutp. stalf and vxtr tetilol. woi kera rer c WNTII piroje! ttr. kabupatren an:d iot finite,!. !o Ine ri cItLii will elA-eil lafgely oll (a) Last ly. Iiidsteit aiend ail ,Ightu t Izidotierba t tChislogy tor0 -C on auccerti ul I,1trotduc tIon of rhy.ohbul om I nwuultit coltr Ivat vely t o 1'e[le it lt of Moybea anti peanut which Is eat ita.ted ( 1) I)MA/GO itr It3 Ila oI total area p at ed t o thre Cts a1 l alter Yeat 'j. roplicatlon and expanaloui of the p uolct 3. Social Consequences and Benefit Incidence
The direct beneficiaries of the project will be the farmers and cultivating principally upland areas where production, income Other employment will increase with the adoption of the new technology. more regular indirect beneficiarie, will be consumers who will obtain a various supply of good quality food, processors 3nd traders providing move services (e.g. grading, transporting, packaging) as the products from farm to consumer. At the national level and over the long term, its foreign exchange costs should be reduced as the country reduces imports of corn, soybean and peanut. cropping Total employment in project areas should increase as year-round even systems lead to more intensive land use. Moreover, a more adoption distribution of demand for labor is anticipated with increased of the new cropping systems. increase. In Employmenc in agro-processing industries is also likely to increased East Java and Lampung, for example, there Is potential for will processing of corn and cassava for feeds and for alcohol. There of also be increases in home processing industries such as manufacture soybean cakes, peanut sauce, catsup and other forms of confectionery. farm Employment may also be generated from the manufacture of simple storage machines such corn shellers, dryers, grinders and farm ievel labor bins. Because of the simple nature of thils farm equipment, increase displacement is not anticipated; rr.ther, these implements will and the the productivity of farm labor. The nature of these implements size of the average farms suggest that they will be labor enhancing demand and rather than labor saving. Clearly, increase in labor the project. employment will ne a potentially major indirect beiefit of crops It is generally claimed thot there is little market for secondary the fact that outside of home consumption at the present time, despite total marketed surplus of corn and cassava is about 1/2 - 2/3 of - 4/5 of total production, and for peanut, soybean aad aungbean about 3/4 there is a production. Private trader: and members of KUDs ,:laim that and for potential markit for local and regional trade, for processing is export if a sufficient and regular supply of acceptable quality assured. market and This project taken the position that there exists a latent that middlewaen, such ai local traders and KUDs, and institutional processor, such an tapioca factorlen, gaplek factories, and corn of procesning mills will develop with the assurance of sufficient supply to procure acceptable quality. Even if government policy mandates BULOG thebe commoditles through KUDa given certain standards of moisture trade than content and purity, then project will depend more on private on govertment procurement operations. the A dealreable consequenc of the project in therefore to stimulate and their conditiona for a more active private market in secondary crops related products. The project, if successful, will likely cause some positive redistribution of income. Most upland farmers have incomes lower than those of lowland farmers mainly because of higher production and prices of rice compared to cassava or corn. However, with appropriate cropping patterns of corn or cassava intercropped with soybean, peanut, mungbean or cowpea, revw nue from these crops are comparable to revenues derived from lowland rice. Perhaps as cropping patterns become more firmly establiahed, and as markets for secondary crops are developed, the differences in the values of luwland and upland areas and the revenues derived from them will be narrowed.
New cropping systems when introduced into the project sites may, over the long run, cause greater concentrarion of land held by relatively well-off farmers. Small farmers who cannot buy the necessary inputs will not be able Lo realize the potential of the new technology packages as much as the relatively richer farmers. As the income differentials between rich and poor continue, the smaller farmers tend to sell off their lands. Marginal farmers who will sell off their lands will become tenants or fzrm laborers. If agricultural wages are high and if the landowner wishes to share the risk of farming, he will opt for a share- cropping arrangement. If the agricultural wages are low and the farmer wishes to assume all the risks he will manage his farm himself and hire farm laborers on daily or seasonal basis.
One trend is clear: as new technology is adopted and farming becomes commercialized, the age-old tradition of "gotong-royong" will decline. Hired laborers will take the place of community planting and harvesting and monetized wages will replace the practice of exchanging labors among farmers in the community.
PART IV: FINANCIAL PLAN
A. Project Cost S-immary
Total project cost is estimated at *12.691 million. The USAID contribution is 16.4 million in loan funds, GOI counterpart funds is $6.291 million, or a USAID/GOI ratio of 50.4% to 49.6%.
Summaries of foreign exchange (dollar) and local currency (rupiah) cost estimates are shown in Table 8. Details for each category are provided in Anne B. Table 9 is a projection of expenditures during the life of the project, 1983-1987.
The Secondary Foou Crops Development Project is a five year project, of starting at the beginning of IFY 1983/1984 and terminating at the end AID IFY 1987/1988. The total cost is *12,691,000 of which $6,400,000 is this Loan and $6,291,000 is in the form of GOI counterpart fund. Of amount, $3,643,000 or 29% is for foreign exchange cost and the remaining 71% or $9,048,000 is for local cost. The loan fund will pay for technical assistance and operational support GOI estimated respectively as J1756 (13.8%) and t2772 (21.8%). and counterpart fund will pay for personnel estimated at $582 (.46%) commodities (except vehicles) estimated at $4036 (31.8%). In-country overseas training will be paid from GOI funds estimated at $641 (5%) and training estimated at 742 (5.8%) will be paid from loan fund. the Contingency and inflation estimated at $2092 represents 16.4% of total project cost. follows: The loan fund will be allocated to participating agencies as loan tht Direct'rate General of Food Crops will get13099 or 48.4% of the to CRIFC, and fund. This amount include among others, contractual cost universities for experiments, trials and special studies. BULOG and the and Department of Cooperatives will get 3301 or 51.6% for marketing post-harvest activities. The GOI fund amounting to $6291 will be and distributed as follows: DGFC will get $2151 or 16.9% for personnel get cost of production inputs for the demonstration farm. METE will 767 or 6% for organizing in-country training for Field Teams and other to extension workers. The BRI will get t3373 or 26.6% use for credit farmers, KUD and private dealers in intensification areas.
B. Recurrent Cost Implications
This project is designed to demonstrate a model for increased Indonesia. If production and improved marketing of basic food crops in decide at the model or adaptations thereof proves viable, the GOI will to other parts what rate and with what resources to replicate the model additional of Indonesia. While this project calls for only limited could personnel, a deL.iicn to expand the program on a large scale for icquire substantial new staff commitments, plus continued support seed development, agronomic research, equipment for demonstration and purposes, socio-economic surveys, project operational support Such a decision would in fact be one of the primary evaluation. to indicators of success of the project. Given the GOI's commitment allocating promotion of secondary crops, there should be no difficulty in the necessary resources at the time they are required. Table 8:
Summary of Cost Estimates by Allocation of Funds in $OOO
AID GOI TOTAL Inputs FX TOTAL aOS
Tech. Assistance 1756 - 1756 - 1756
Training 343 399 742 641 1383
Personnel - - - 582 582
Cperational Support 864 1908 2772 - 2772
commodit ies - - - 4036 4036
Contingency & Inflation 680 450 1130 1032 2162
TOTAL 3643 2757 6400 6291 12691 Table 9: PRWVr FINAMMAL PLAN, 1983-1987 IN $ 000
1966 1987 Total 1983 1984 1965 AMD GUI AID --- = AL MDI AID (DI AI 01 FX LA LC -FX C Allocatian of-AID LC FX LC IC F' IC Lw Funds FX wC tc FX LC - 1756 - - 425 - - 304 - 362 - - 424 - - Technical Assistance 241 - - 641 - - .- 343 399 117 120 236 109 219 Training 117 60 405 - - 116 - - 582 - - 117 - - 117 Persenel - - 116 - - 116 - 700 - 208 318 - 864 1908 122 297 - 206 445 - 123 Operaticnal Supct 2C5 148 - - 4036 - 1161 - - 1538 - - - 432 - - 794 - 0ocdities - - 111 251 108 63' 324 680 450 1032 83 154 160 124 179 115 139 Infl. and Qbnt. 172 41 124 125
620 381 1978 3643 2757 6291 938 899 788 1090 663 839 1529 Toal 735 249 756 726 500 PART V: IMPLEMENTATION PLAN
A Administrative Arrangements
1. The GOI
The Directorate General for Food Crops in the Department of Agriculture will be the implementing agency. The DGFC has had considerable experience in the implementation of development projects with AID, IBRD and other donors. It has had major responsibility for implementing Indonesia's successful "intensification" programs for rice (BIMAS and INMAS). It has in place an extension system that is well suited for implementation of this project.
The present organizational structure of the Department of Agriculture and, within it, the Directorate General of Foodcrops are shown in Annex H, Figures 1 and 2. Figure 2 also shows how the project will fit into the present organizational structure. No basic changes in structure or extension methodology are needed except for some training and strengthening of existing staff with the project Field Team to cope with the added Pmphasis on secondary crops. Maintaining the present structure and operational procedures is necessary for DGFC to carry on or expand the project after its termination in 1988.
In general, extension personne. are better prepared to provide assistance in rice production than in secondary crops. The infrastructure needed to provide extension services on secondary crops is the same as for rice.
Lack of information on agronomic practices for secondary crops is the biggest weakness in the extension service. The site specific field trials on varieties, fertilizers, rhizobium inoculum and cropping systems should generate the needed technology for all extension agents such as PPS, PPM and PPL. By these educational meins, the extension capability should improve at the same rate as the project demonstrations move from one WKBPP to the next.
2. Palawija Project Off .e and Field Teams
At the national level Palawija Project Office will be established in Jakarta within the Directorate of Production in the DGFC. This will be staffed by a Cropping Systems Specialist who will also serve as the Project Director and Secretary of the National Steering Committee. As a Project Director, he will approve all project expenditures allocated for other participating agencies. Other members of the PPO are on Agricultural Economist, a Marketing and Post Harvest Specialibt plus clerical personnel that will be assignmd to the project.
The Palawija Project Office will provide technical and administrative supervision and support to all project staff including the Ficld Teams. It will determine what demonstrations will be carried out at each project site, establish priorities among various socir,-economic studies, specify equipment needs, and trials to be underta.en. The office will also plan The Palawija Project Office in cooperation with the Steering Committee will be respoasible for arranging the roles and the partipation of other agencies including AARD, CRIFC, AAETE and regional universities, including formulating of contractual arrangements and allocation of project funds.
Two Field Teams will be assigned in each of the project site in North Lampung in Lampung province, Ponorogo in East Java and Bone in South Sulawesi.
Each Field Team wi. , onsist of three members: one agronomist/cropping systems specialist with expertise in palawija crops, one specialist in marketing and post harvest management and one agricultural economist. Other personnel may be recruited from within or outside the DGFC and assigned to work on various project activities.
The Field Team members in each project site will work with and assist the PPS at the kabupaten level in training and supporting the PPLs in the two WKBPPs (Rural Extension Centers) selected as project areas in each kabupaten. A partial list of job functions follows:
The agronomist/cropping systems specialist will work with regional research stations in arranging for approved agronomic field trials and experimencs and assist research staff in monitoring field trials and demonstration farms. He will work with the PPS in selecting appropriate locations for trials and it.arranging for PPL and farmer participation. He will also assist the PPS In planning programs for training PPLs in the package of technology to be demonstrated in the project areas. He will assist the farmers groups in intensification areas develop farm plan required for obtaining unsecured supervised credit £rom the BRI Unit Desa. The farm plan will be developed with the assistance of the agricultural economist. The agricultural economist will also work with the agronomist cropping systems specialist and the marketing post harvest specialist members of the Field Teams to develop farm plan and investment plan for farmer groups and KUDs in the intensification areas.
The specialist in marketing/post harvest management will assist the PPS in the development of procedures on harvesting and post harvest handling of secondary crops at the farm level. He will arrange with the Directorate General of Cooperatives at the kabupaten level in cooperation with local KUDs, trials and demonstrations of various methods and equipment for drying, processing and storage of secondary crops. lie will assist in the development of training materials and programs for training of KUD management and technical staff. He will also help identify specific local marketing constraints which will be considered for special study or analysis in the project. ie will assist, in cooperation of the agricultural economist, and BRI staff develop an investment plan for the KUD as a basis for obtaining unsecured supervised credit for facilities, supply and equipment. and The agricultural economist will be responsible for (a) recording out under analyzing costs and returns of the various activities carried relevant to the the project, (b) identifying socio-economic factor issues in project, and (c) designiig appropriate studies for addressing He will work with the economics of food crops production and mnrketing. of all the PPS and the other two field teams members, for coordination in the project area. baseline studies, progress reports and evaluations Office will be Communications among the Field Teams and the Project of implementation assured by establishing a system of periodic reporting the offices of the progress and problems to the Project Office through visits to the kabupaten and provincial extension services, and frequent planned for all Field Field Teams by project office staff. It is also to exchange Teams to meet regularly at one of the project locations months. information and discuss progress once every six
2. USAID project The USAID Project Officer will assist the PPO in studies and implementation, participate in baseline and evaluation monitoring role. He perform functions generally associated with USAID's Committee. USAID will also will also serve as a member of the Steering terms of reference provide four long term technical advisors. Proposed B. The Senior for the long term advisors are presented in Annex counterparts at the PPO Technical Advisors will work directly with their of the DGFC and provide and with the provincial and kabupaten staffs One of these advisors will direct techrical support to the Field Teams. in Jakarta and Teluk be located in Surabaya. The others will be located in South Sulawesi. Betung in Lampung province, or Ujung Pandang
3. Coordination the success of the Participation of other agencies is crucial to for coordination between the project. Various mechanisms already exist universities. The BIHAS DFGC AARD, BULOG, DGC, BRI, IPB and the regional all of the project areas, program, for instance, which is operative in through the BIMAS provides for coordination of all above agencies district (kabupaten) Coordination Committees at the national, provincial, mechanism will serve to aud sub-district (kecamatan) levels. The same crops. coordinate participants for the secondary is the National Committee Another coordination mechanism already In place DOA. This committee will on Pont larvest Activities, chaired by the programs on harvesting, facilitate participation of BULOG in training crops. There are precedents handling, drying and storage of secondary and BULOG, AARD, IPB, etc. for contractual arrangements between DGFC which Indicate no serious problems in cooperation. agencies, a To ensure closer coordination among the participating be formed consisting of (1) Palawija Project Coordinating Committee will (2) Director, Research and the Director, Bureau of Production, DGFC, of Development, BULOG, (3) Secretary to the Minister, Department Crops Development Cooperatives, (4) Project Director, Secondary Food Director will serve Project and (5) USAID Project Officer. The Project and keeps records of as Secretary to the Committee, prepares the agenda, Committee. The all e.cions and decisions taken by the Coordinating meetings can be Cowmittee will meet at least ones a month but special Chairmanship of the arranged by the Chairman as the need arises. members of the Committee will be rotated among the members. These of their Steering Committee may be changed any tim- aL the request respective Director General.
Replicability of Model model A key concern is the appropriateness of the administrative analyzed. In the end, that has been designed. Several alternatives were this model was chosen because: staff and a. It provides a minimum numbar of full-time project USAID advisors necessary for project implementation. staff at all b. It is designed to strengthen existing permanent levels in addressing constraints on secondary crops. a single c. Project staff is recruited and assigned from whithin and management agency, the DGFC, clearly invested with responsibility cottrol for the project. staff units, d. The Field Teams are to be temporary, or "portable" adoption of reassignable to other locations as progress towards technology is confirmed by evaluation studies.
e. It complements the existing lines of authority. conveniently f. The size and organization of the project can be of DGFC after integrated in the regular functions and personnel completion of the project. by replicability can be achieved in the first instance If successful, Office of Field Teama to new kabupatens, while the Project reassignment are while new in place; or, Field Teams could continue where they remains would imply Field Teams are recruited and trained. Either alternative still relatively small staff and resource commitments. is also possible but Replicability on a broader, even a national scale, budgets and staff. would clearly involve much larger commitments of technical and social Whether such an effort is justified, on economic, to answer after the third grounds, is a question this project will help year of project performace. B. Implementation Schedule start-up A five-year nroject is planned. Year 1 will tnvolve key assistance, activities including contracting of USAID technical Teams, completion of recruitment and initial training of project Field for DGFC baseline surveys, establishing the operational mechanisms and other agencies. coordination with CRIFC, BULOG, the universities the six project sites Full-scale project activity should be underway in 4 pending evaluation from Year 2, and in a second six sites from Year results.
Recommended Schedule
6/2/82 - Project Paper technical review. to negotiate Loan 4/15/83 - Project approval with authorizaLlon Agreement. GOI. 4/30/83 - Loan Agreement signed by USAID and 5/15/83 - RFP closing date. 5/30/83 - Bids evaluated, contractor selected.
Year 1
5/15/83 - Initial CPs met Project Office established. Project Director, technical staff assigned. each project site. 6/1/83 Field Teams members identified in training contracted. 6/30/83 - Baseline survey contracted, Field Teams 6/1/83 Contract for USAID advisors signed. 8/1/83 - Senior Technical advisor arrives. (organizational session). 9/1/83 First semi-annual seminar conducted components 10/15/83 - Operational plan for Year 2 for all project reviewed, revised, and established.
Year 2
11/15/83 -Remaining two USAID advisors arrive. - Semi-annual seminar, progress reports on 3/1/84 of trials/demonstrations/experiements/studies, revision priorities, scheduling for next 6 months. 9/1/84 - Semi-annual seminar/etc.
Year 3 for Semi-annual seminar/etc. - to include planning 3/1/85 3. comprehensive evaluation during last part of Year 9/1/85 - Comprehensive evaluation completed. 10/15/85 - Start-up completed for second six WKBPPs (if indicated by evaluation).
Ye~r 4
3/1/86 - Semi-annual seminar/etc. 6/1/86 - Semi-annual seminar/etc. Year 5
3/1/87 - Semi-annual seminar/etc. 9/15/87 - Comprehensive evaluation completed. The Note: Detailed planning for each project component will be needed. be above schedule established a framework within which this can accomplished.
C. Evaluation Plan
The project is f ndamentallv a learning experience since it is the of first project dealing simultaneously with production and marketing secondary crops. Any number of experiments, trials, demonstrations, with the view experiments, and socio-economic studies will be carried out useful towards that the experience and the technology developed will be project the design of a national program. Setting priorities, managing agencies, funds, working out appropriate contracts with cooperating planning and designing a mix of training programs, and conducting of findings comprehensive reviews all are aimed ultimately at evaluation useful to decision-makers. a project of Management skills to organize and successfully carry out end the this nature are key qualifications of the DGFC Project Director planned USAID advisors. They will be called upon especially during the evaluations semi-annual progress reviews and the comprehensive project for outside scheduled in Year 3 and 5. Funds are budgeted specifically is anticipated assistance in carrying out these evaluation functions. It that local and foreign consultants will be valuable resources.
Evaluation will include not only analysis of results from individual i.e. activities but will also address the success of the model itself, arrangements whether the organizational, staffing, contracting and budget will be of the project are adequate to the task. The latter concern the resource especially relevant to decision-makers who need to consider and cost implications of replication of the model on a broader scale.
The baseline surveys to be completed in Year 1 constitute clear ctarting point for much of the evaluation work.
D. Negotiation Status
The Project Design Team has developed the proposed project in close key collaboration with the Directorate Cneral of Food Crops. Other coordinating agencies are AARD, CRIFC and BULOG. All are in agreement to with the basic purpose and design of the project and are prepared cooperate. The DGFC The target dat. for the Project Loan Agreement is April 1983. funding in has indicated already that the project ii eligible for initial the the IFY 1983-84 budget with later funding scheduled annually until termination of the project. loan disbursement In addition to the standard conditions precedent to that the Project another condition is recommended to provide assurances following loan Office is established within the first three months and at least three signature, staffed by a senior-level Project Director later if necessary). technical specialists (the latter to be named will commit Nc covenants are proposed. On its side, the GOI/DGFC budgets during IFY approximately $6.291 million in rupiah equivalent items, all project 1983-84 through IFY 1)87-88 to cover, among other inputs. operational costs including required agriculture in Indonesia A waiver will be needed for procurement of vehicles incorporated in the following the current procedures and should bit Project Authorization. ANNEX A
DETAILED PROFILE OF PROJECT SITES
The Secondary Food Crops Development Project is located in the These provinces provinces of Lampung, South Sulawesi, and East Java. crops were selected because (1) they are principal secondary food population in these producing areas with potential for expansion, (2) they differ provinces use secondary crops as staples along with rice, (3) and (4) in agro-climatic characteristics and ethnic population, stage of production technology and cropping systems have reached a to farmers. development ready for dissemination and demonstration (WI'BPP) Two extension zones or Wilayah Kerja Balai Penyuluhan Pertanian These include from each province have been selected as project areas. Sulawesi; WKBPP WKBPP Palattae and WKBPP Selli in Kabupaten Bone, South Abung Timur and WKBPP Banjid in Kabupaten North Lampung, Lampung Ponorogo, Province; and WKBPP Sokorojo and WKBPP Pulong in Kabupaten or East Java. Together, the six WKBPPS include twenty-three kecamatans cultivated towns covering an agricultural land area of 410,510 hectares about 896,840. by about 168,170 farm families and a total population of institutional, The following profiles detail the agronomic, economic and Although the and social characteristics of each of the project sites. to specific discussions are focused at the kabupaten level, reference WKBPPs will be noted.
Agronomic Profile
1. North Lampung, Lampung Province
k1KBPP Abung Timur which includes kecamatans Abung Timur, Abung kecamatans Selatan and Tulang Bawang Udik and WKBPP Banjid which includes in Baradata, Kasung and Banjid were selected as project sites Bahuga, present and Kabupaten North Lampung. Together, these t'vo WKBPPs cover by about potential agricultural area of 232,100 hectires-cultivated average 49,000 families with a total population of about 261,000. The farm size is 2 hectares.
The land brea is general hilly. The soil types nre brown, yellow potassium, poor podzolic and latosols. They are generally acidic, low in and low in physical and cLemical properties, high exchangeable alumi,,um it in organic matter content. The surface readily slakes making susceptible to erosion. considered wet Rainfall is between 2500-3000 mm per year. Nine months is is season and three months dry season. The i.verage daily temperature 0 0 two of between 22 C- 33 C. Five rivers converge in the kabupaten, which have the potential to irrigate 20,000 hectares. The cropping pattern is different for each WKBPP for WKBPP Abung Timur, the most widely used cropping pattern is .sobea +corn rice/- +acorw while for WKH1PP Banjid the cropping pattern is rice/ ansava . Yields, on demonstration farmer using FAO-recommended fertilizer dosages and yields achieved by farmers using their usual practices i- shown below.
Farmer's Crops N P __ Expt 1 (kg of nutrients ha Yiel I Yield used in experiments) (KI1!a) (Kg/Hta. 135 Padi Cogo 90 9() JO 400 Corn 45 45 30 300 130 Peanut 45 145 30 120 50 60 Soybean 23 141) 30 120 1500 Cassava 90 45 30 2400 64% homestead About 1 of the cultivated area i: sawah, 3% rainfed ind coconut, pepper and and alang-alang. Other important crops are coffee, compete with food crops horticultural xop;-. They provide employment and in the use of the land and tamily labor.
2. Bone, South Sulawesi of IJKBPP Palattae The project site in Bone, South Sulawetl consists Libureng and Pone, which Includes Krcamatans Kahu, hlonto Cant, Salamekko, Ulaweng and and WKBPP Selli which includes kecamatans Laparaja, Lanuru, Palaka. Together they cover an agricultoral area df 116,860 hectares, of about cultivated by lbout 4,1'i00 families and a total population 281,740. The average sitre (if nrm is 2.5 hectares. potasnsun and The soil is low in nitrogen, high in phomporous .,nd generally lacking In organic matter content. last. for six There are three district seasona. The dry season which from July to months startler' from Decrmber to June, and the wet season November. to The rost widely uuaed cropping pa*ttern for WhUlP' Plattae The average rice/-ennut /corn and for WKflPP .ll, rice/corn/unbean. production per hectare is shown below: In I/11A Crap Product ion
ice 7O00 Corn 600 Peanut 6 00 Soybean 00 Puniban 300 Cass1va 5000 Corn and rice are usually grown for househuld consumption while l.tgumes are grown as cash crops.
The 'and use by cropped area is shown below:
Crop Land Use in Percent
Rice 28 Corn 48 Peanut 10 Soybean 7 Hungb-an 6 Cassava 1
rainfed. About 15% of the land area in WKBPP Selli is sawah, about 60% and homestead and alang-alang about is 25%.
3. Ponorogo, East Java Sokurejo The project site in Ponorogo, East Java consists of WKBPP and WKBPP Pulung which inrludes kecamatans Sokorejo, Badegan and Sampang, which includes kecamatan Pulung, Sooko and Ngebel. hectares The project covers an agricultural land area of 61,551 of about cultivated by about 72,210 farm families with a population 354,100. The present cultivat-d area per farm is .65 hectare. Mediterranean, Ponogoro is hilly and fertile, with soil mostly of the months of the year, granusols and lithosol types. It rains for about 8 rice and two crops with an average rainfall of 2500 mm, enough co support rice/corn/soybean of palawija. The most widely used cropping patt-irn is The averare in WKBPP Sokorojo and rice/corn/peanut in WKBPP Pulung. productivity is shown below:
Crops Production (K/a)
Rice 3000 - 4000 Corn 900 - 1200 Peanut 600 - 1000 Soybean 700 - 1200 Mungbean 600 - 1200 Cassava 7000 - 9000
corn, 31% in Of the total agricultural land, about 25% is in rice, 21% in About 30% is peanut and soybean, 19Z in cassava and 4% in mungbean. important sawah, 46% is rainfed and 24% is homestead. Sugar is also an the cormunities crop and sugar mills provide off-farm employment around where they are located. Economic and Institutional Profile
Income and Employment
Agriculture is the primary source of employment in each of the of project sites. lucome from agriculture depends on the productivity in the land and the prices of the commodities produced. For example, following 1979, an average farm income in the project site in East Java with peanut as the traditional cropping pattern was, Rp. 331,188 ($517) rice and the major income earner, followed by soybean, cassava, upland corn. was Rp. The averae farm income in the project site in South Sulawesi principal 468,480 (732) with corn, peanut, soybean and cassava as the was Rp. income eacners. In Lampung province the average farm income and peanut as 222,720 ($348) again with corn, rice, cassava, soybean on the traditional major income earners. These income levels are based cropping patterns followed by farmers in 1979. and Rp. 1000 for The average daily agricultural wage is Rp. 700 for women are paid Rp. men plus three meals. Laborers with their own draft animals 1500 per day. project There are limited non-farm employment opportunities in the and Bone and sites. For examp e there are sugar mills in Ponorogo In addition tapioca and gaplek factorics in Ponorogo and Lampung. rubber, coconut farmers in Lampung produce estate cropf. suc. as pepper, not included the and coffee. Off-farm income from various sources were income estimates cited above.
Transportation the project The transportation system is well developed in each of Pandang, a sites. Bone is only four hours by paved roads from Ujung network within major seaport in the eastern part of Indonesia. The Road kabupatens of Kabupaten Bone and highways connecting it to the surounding roads connecting the Wajo, Sanjai and Maros are asphalted. Most of the heavy motor different kecamatans are hard surfaced and can service vehicles as well as busses and other forms of motor transport. highway provide an The railroad system in Lampung and the Trans-Sumatra cities of the eight efficient means of transportation among the capital primarily made of provinces of Sumitra. Other roads in Sumatra are the rainy hard-surfaced dirt roads that are often impassable during accessible to two season. The project site in Kabupaten North Lampung is in Lampung and major metropolitan areas, Tanjusr Karang/Telukbetung Palembang in South Sumatra. East Java. It The transportation nyste is well developed In Ponorogo, port city in Indonesia. Is four hours from ;urabayn, the necond b1 gest a major It is also easily accessible by highway to Jogyakarta, metropolitan city in Java. The project site has approximately twenty and from which market towns to which agricultural produce can be marketed agricultural inputs can be obtained. In addition, there are several village markets surrounding the project site.
Extension Research & Demonstration
The extension system is well-developed in each of the project sites. Each WKBPP has 2 PPMs, 19-24 PPLs, with each PPL indirectly supervising about 1600 farmers farmers). On the average, PPLs visit 16 farmer groups headed by kontak tanis at least once every two weeks. Because most PPLs do not have motorcycles, their effective area of coverage and frecuency of visits are actually less than what is called for in their job descriptions. These PPLs are assisted by agricultural radio programs and various agricultural publications from the Agricultural Information Service of the province.
Research and demonstration in cropping systems, variety trials, and fertilizer yield response have been conducted in all of the project sites. For example, CRIFC has conducted cropping systems trials in Way-Abung, North Lampung and in Wajo, South Sulawesi. The Ministry of Agriculture and FAO have similar trials and demonstrations in East Java. Results of these work will be the basis for initial recommendation of cropping systems and agronomic practices in the project. Farmers are generally receptive to new agricultural technology if it promises increases in income, accompanied by appropriate inputs and technical assistance, and is supported by local leadership. For example the Lapo-asi program in Bone, South Sulawesi and the Tani-akmur program in Lampung have demonstrated that farmers can produce upland rice yields equal to sawah yields provided sufficient inputs and intensive extension services are provided.
Credit
Private dealers, government owned companies such as the P.T. Pertani, P.T. PUSRI, and KUDs are the principal sources of agricultural inputs. Farmers obtain credit from various agricultural programs such as BIMAS and INAS, usually through the BRI village unit banks.
Markets
Marketing is assumed to be a major constraint to increased secondary crops production. Although there are private traders and agents of wholesule dealers in project sites, prices offered are generally inadequate because of limited competition and low qual.ty of produce. Procurement operations of the government for secondary crops are not fully operational because procurement prices are lower than market prices.
There are factories in Lampung and East Java for cassava and corn servicing the export and local markets for processed foods. The cassava export market is well developed in Lampung and the tapioca factories and corn processing plants in East Java serve the domeptic market. An alcohol manufacturing plant using cassava is under construction in Lampung. Social Profile
The Each project site is populated by different ethnic groups. the Javanese in East primary groups are the Buginese in South Sulawesi, transmigration areas of Java, and Javanese, Bataks and Balinese in the Lampung.
I. Buginese agriculture and Buginese are familiar with both lowland (sawah) as 1969, they are known swidden (slash and burn) agriculture. As early of rice with guidance of to have used fertilizer and improved varieties husbandry for meat and extension workers. They also practice animal draft power. A number of families tend to The basic kin group is the nuclear family. and powerful family, based on a cluster aroind one important, successful is fostered by bilateral kin relationship. This cohesiveness cousinL. intermarriage among first, second or third element in the higher Formal education has always been an important a means to gain status, power classes of Buginese society. Education is are expected to be and prestige. Those who have gained status the subordinates are expected to authoritative and generous and in turn with their emphasis on education, be submissive and obedient. Consistent law, literature and culture the Buginese have great respect for religion, culture. Buginese are adaptable which are the unifying elements in their with fishermen on the co&st, to all types of ecological environments, in the interior. They also farmers in the lowland and swiden agriculture excel in trade and shipping.
2. Javanese in irrigated agriculture. Javenese are primarily farmers who excel under the leadership of the lurah Rural life is ;entered around a village as building and repairing (village herJ). Community activities such harvesting or planting known as irrigation canals nnd roads and community Strife is avoided as much as gotong royong are generally practiced. rather than by vote. possible and decisions are made by consensus finances. Women pay the bills Javanese wives are in charge of household the family. Along with the men and and give allowances to all members of manage the finances of the family. grown children, women earn as well as culture. If educated, a Seniority and title are important in Javanese Javanese is addressed by hin academic title. upland crops such as corn and Although rice is the most important crop, in the mountain areas of Java. cassava are also important especially because of the nature of irrigated Agriculture is labor intensive, partly high population intensity of the rice production and partly due to the land. are done The heavy farm activities such as land clearing and preparation planting seeding by men. Women also participate in seedbed preparation, and harvesting. Those who Social stratification is based mainly on land ownership. as high a social status become wealthy by commerce and trade do not gain occupy high as land owners. White collar jobs and civil servants also higher esteem status in the Javanese society. They are regarded with trade. than those in the professions and in business and cultural and societies are tradition bound, resisting economic, Javanese in their social influences unless these changes demonstrate improvement finally accepted, economic and social status. Once a new technology is royong" it is often implemented through community self-help or "goting among persons is indicating mutual concern for others. While equality is accorded to emphasized, elaborate expression of respect and defference elders. Class leaders such as village heads, government officials and differcnces stratification is minimal because of the narrow economic have patron like among the farmers. Those who own large tracts of land who do not own responsiDility providing wage work or share crop to those lands.
3. Bataks
Bataks, particularly those who came from the uplands of North and crop Sumatra are familiar with upland agriculture. Double cropping and boys do rotation practiced by the Javanese are not new to them. Men canals, clearing most of the farm work, building and repairing irrigation and and preparing the land. Women and girls take care of planting and store the seeding while all members of the family harvest, transport crops. of them occupy Bataks are aggressive, adventurous and ambitious. Hany They are high positions in government, business and retail trade. are to mtgrate to more economically progressive areas. They willing as found in 1l levels in the civil service, blue-collared occupations and the well As in business. They are not as concerned as the Buginese of etiquette. the Javanese with ranis and titles and the complexities 4. Balinese and The Balinese are very much like the Javanese before colonization of a mild western influences were introduced in Java. There is a trace related caste system with emphasis on titles that are not necessarily with power, respect or wealth. aspect of In agriculture, the irrigation society is a very important use of water. economic nr social life which organized for the efficient are organization conscious people, forming all kind of Balinese sense, each representing different Interest groups. In this associations modern the Balinese society is more flexible and stable, allowing the basic agricultural technology to be introduced without disrupting society can structure of the group. Unlike the Javanese, an agricultural exist independent of the village. Other Social Characteristics
1. Consumption as basic staple People in the project sites eat secondary crops rice/gaplek, rice/corn along with rice. The most popular combination is crop combination depends on the and corn/gaplek. The proportion of each in turn depend on the season. relative prices of these commodities which while cassava Rice, soybean, and peanuts show positive income elasticity at the lowest income group. and corn show positive income elasticity Indonesia, exception are found While this pattern is generally true, in secondary crops are consumed in secondary crops producing provinces where of their income levels. as a natural part of their diet regardless to two-third of rice production is In the project sites, about one-half for cassava, about two third for consumed, about one-fourth to one-half peanut and mungbean are consumed in corn and about one-tenth of soybean, an important source of income the household. Sale of secondary crops is agricultural inputs and as a and usually used to finance purchase of source of cash for daily household expenses.
2. Age Distribution and Level of Education and North Lampung are shown The age distribution for kabupaten Bone below in Percent Age Group Distribution Bone North Lampung
16 - 4 15 0 16 - 9 18 5 12 10 - 14 13 19 15 - 24 16 79 - 49 28 25 8 50 ani above 10
non-institutional population If one takes the labor force to be the in U.S., it i3 evident that about betweer the ages of 16 to 65 as defined labor force. This definition of 55% of the total opulation are in the ratio is derived is not appropriate the labor force from which dependency of rural Indonesia because children in the project sites and perhaps most citizens as old as 75-80 years as young as seven yeatrs old, or senior Aluost every member of the family has old continue to work in the farms. household regardless of his age. In certain responsibilities in the farm of farmers have attained at terms of education, the younger generation about 68% and in North Lampung about least primary education. In Bone, old group are in the process or 80% of the children in the 7-12 years rest have never been or have dropped have completed primary school. The out of primary school. These data suggest that the younger farmers are becoming more literate and perhaps more receptive to technological changes. More importantly, increased literacy among farmers improves their access to printed extension materials and they can follow instrucions more accurately than those who are unable to read and write.
3. Land Ownership, Sharing Arrangement and Size Distribution Land
Between 65% - 87% of the lands are owned by farmers, between 8% 12% are rented and the rest are farmed on own/lease arrangement. Tenancy problems of the type occuring in the Philippines are rarely encountered in Indonesia probably because of the absence of large tracts of iands owned by fcw families. Moreoever, the sharing arrangement between tenants and landlords which is 50:50 for rice and 60:40 for secondary crops is generally accepted by both parties.
The sharing arrangement cited above is true for a small proportion of the farmers because of the low percentage of lands under tenancy and becauRte "gotong royong" is generally practiced. This is an arrangement where farmers exchange labor in planting, harvesting and in land preparation. Gotong Royong is generally practiced in both sites in Lampung, and WKBPP Selli in Bone, South Sulawesi and WKBPP Pulong in East Java. i - ., , ±-
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Illustrate One Year Budget: Long Term Technical Assistance
1. Posting $ 14,000 International Travel for Family of Four $ 5600 Un-accompanied Baggage $ 2400 Household Effects $ 6000
2. Housing and Utilities $ 23,000 3. School Allowance$ 9,000 4. In-Cuuntry Travel and Per Diem $ 5,000 4,000 5. R & R and Home Leave $ 6. Fringe Benefits (25% of Base Salary) $ 11,376 7. Post Differential (15% of Base Salary) $ 6,750 8. Salary and Wages $ 45,000 2,250 9. Insurance (4% of Salary and Fringe Be:aefits) $ Sub Total: One Year $ 121,076 Sub Total: Thirteen Men Year (lxS+2x3+lx2) $1,574,000
Annex B.2
Illustrative One Month Budget: Short Term Consultant
1. International Travel $ 2,500 2. Per Diem (30 days at $77/day) $ 2,310 600 3. In-Country Travel $ 4. Consulting Fee (26 days at $250/day) $ 6,500 220 5. Miscellaneous $ Sub Total: One Month $ 12,310 Sub Total: Fifteen Months $ 182,000 Annex B.3
Illustrative Summary for Technical Assistance Costs
1. Long Term Technical Assistance (B.1) $1,574,000 2. Short Term Consultants (B.2) $ 182,000
Total $1,756,000 Annex B.4
Illustrative Budget for Training
1. Overseas Training on Cropping 117,000 Systems(30 MM at t3900/MO) t Harvest Training Abroad and attendance 2. Post 265,000 to prof. conferences (68 MM at $3900/MO) 3. In-Country Field Team Training 189,000 at t2100/MO) $ (54 MM 452,000 4. PPS, PPM, PPL Troining (250 MM at $1800/MO) Farmers, KUD, Dealer Training 5. 210,000 MM at t2100/MO) $ (100 150,000 6. Operational Cost and Fee of Training Agencies $1,383,000 Total
Annex B.5
Illustrative Budget for Operational Support
Experiments and Trials in Cropping Systems 1. 859,000 (180 units at t5300 each) 303,000 Harvest Laboratory (B.5.1) 2. Post 626,000 Harvest Demonstration at (118 X $5.3) $ 3. Post 460,000 and Evaluation Monitoring Survey 4. Baseline 348,000 Studies (5 at $70 each) $ 5. Special 56,000 Library Equipment and Facilities 6. $ 120,000 7. Workshop/Seminar $2,772,000 Total
Annex B.5.1 List of Equipment for Post Harvest Operations
Systems (3 at $36,000 each) $ 108,000 1. Processing/Storage 30,000 Dryers (15 at $2000) $ 2. IRRI $ 96,000 3. Drying Floors (12 at $8000) Equipment 4. Miscellaneous $ 69,000 (Bags, Sheets, Shellers, Etc.) 303,000 Total Annex B.6 Illustrative Budget for Personnel 144,000 Counterparts (5 x 12 x 3 x $800) $ 1. GOI 378,000 ( 5 x 12 x 18 x $350) 2. Field Teams $ 60,000 3. Support Personnel (5 x 12 x 3 x $350) $ 582,000 Total Table B.7 Illustrative Budget for Commodities
1. Production Equipment and Draft Animals $ 120,000 JB.7.1) (B.7.2) 686,000 2. Equipment foi Seed Production and Supply (104 tons at $2,300) $ 240,000 3. Pesticide/Insecticide 877,000 4. Fertilizer (6000 tons at $2300) 5. Office Supplies and Equipment 250,000 at $625 00 ) * (4 offices $ 1,253,000 (1600 tons at $7800) 6. Lime 160,000 (2.6 tons at $62,000) s 7. Rhyzcbium $ 450,000 8. Post Harvest Equipment (B.7.3) * 4,036,000 Total
Table B.7.1 Production Equipment 60,000 at $600 each $ 1. 100 Draft Animals $ 20,000 and Harrcws at $100 each 2. 200 Plcws $ 30,000 Tractor Power at $3000 each 3. 10 Small $ 0,000 4. Miscellaneous Cultivators and Sprayers $ 120,000 Total
Table B.7.2 (3) in Project Kabupatens Equiprent for Seed Processing/Storage Centers Estimated Cost Unit Cost Total Item No. Description Quantity Total $ 8,000 $ 96,000 1. Drying floors 12 Drying sheets (no and size 2. 60,000 to be determined) _ 1,500 27,000 3. Dryers (IRRI type) 18 18 800 14,400 4. Corn shellers 14,400 shellers 18 800 5. Peanut 7,200 Cleaners 18 400 6. 1000 5 5,000 7. Gunny bags 12,800 76,800 8. Godowns 6 9. Other: Furniture, generation, storage 60,000 equipment. 3 20,000 of Seed 10. Rehabilitation 326,20 Centers 3 108,000 $606,000 GRAND TOTAL Table B.7.3 Post Harvest Equipment Estimated Cost Units Cost Total Item No. Description Quantity
Farmer Level $ 3,60 1 Drying sheets 180 t 20 blowers for 2. Mannual 6,000 drying, cleaning 60 100 4 2,400 3. Corn sheller 600 4 480 4. Cassava slicer/chippers 120 100 6,000 5. Peanut shellers 60 6. Processing and storage 36000 equipment to be determined - -
Farmer Group Level 9,600 1. Power thresher/shellers 12 $ 800 250 6,OOU 2. Cassava chippers 24 9,600 3. Cassava cube machine 12 800 14,400 4. Peanut shellers 18 800 Drying systems to be 5. -54000 determined Total
Village Level (60% private) (40Z KUDs) 12,000 1. Threshers 12 5 100 $ 9,600 Cleavers 24 600 2. 48,000 Corn grinders 12 4,000 3. 28,000 4. Peanut shellers 36 800 5. Ne/l=proved cassava 21,000 processing systems - 6. Drying systems to be 96,000 determined " 7. Now system$ to be designed/ for post introduced 36.000 harverst h4ndlin- -
IJXBPP/K~bupaten Le ve I Soo 5 9,600 1. Moisture testers 12 36000 2. Quall'y control equipment
$450,000 GRAND TOTAL V. -63-
Term of Reference for Technical Advisors Three long-term experts are scheduled for the project. All should PhD) be agricultural scientists with strong academic credentials (KS or broad experience with production programs for some or all of the and corn, principal crops involved in the project ( soybean, peanut, cassava, and mungbean)• The three experts vill be assigned to the Secondary Food Crops Project provincial Office in Jakarta but vill travel to and work closely with the in and kabupaten agricultural services in support of project activities the six selected sites. These include a wide range of activities from field trials and demonstrations to post-harvest handling and agronomic is studies to socio-economic studies and evaluations. While it marketing all the not expected that each expert will have depth of expertise in disciplines involved, each should have broad knowledge of agricultural out production problems and experience in planning and carrying multi-disciplinary production prolrems. be a Special expertise ia post harvest-hasndling of food crops may desirable additional qualification for one of the experts. Requirements the project for other special qualifications may best be determined after at least a year gets underway. Since two of the experts will be assigned after the start of the project, more precise and detailed job and required qualifications for then may be deferred until descriptions the it can be determined what professional skills will beat complement Indonesian staff assigned to the project. This of the experts will be designated as Senior Technical Advisor. One with strong should be a person of stature as an agricultural scientist Project administrative skills. He will serve as counterpart to the responsibilities. Director and will have major liaison and coordination Specifically, he will: project tea experts. - provide leadership and supervision of the 001 on matters Involving - be principal spokesa interacting with the project team. - be principal liaison with USAIDiJakarta. responsible for - be principal liaison with the U.S. contractor activities in the U.S, -0 be responsible for planning, coordinating and supervision of all the period of short-term technical consultants required during the. project. participate with project staff in planning in-country training programs and selection of candidates for training. in the - coordinate training programs to be conducted overseas tnite4 States and third countries. equipment - In conjunction vith Project Director coordinate procurement, delivery and Installation at project sites. all studies, analyses, reports and evaluations of the - coordinate USAID r project and make periodic presentations to 001 officials, * staff, and other interested parties on project progress. AWI
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ENVIRON4ENTAL ASSESSMENT OF THE USE OF PESTICIDES IN THE "SECONDARY FOOD CROPS DEVELOPMENT" PROJECT - INDONESIA
1. SUMMARY
The Secondary Food Crops Development Project, with emphasis on crops, improved cropping and marketing systems for the secondary food the use of should have beneficial environmental effects except for mainly pesticides. Pesticide use will be kept to a minimum, with The option USEPA-approved pesticides being recommended for the project. and pesticides is left open for the use of USEPA-restricted pesticides, on a case by not registered by USEPA, after approval by USAID Washington inclute case basis. Mitigating measures incorporated into the project training of (i) the stimulation of pest management research, (ii) and (iv) pesticide users, (tit) provision for storage of pesticides, If these monitoring of pesticide use as the project develops. recommendations are followed, there should be minimum adverse environmental effects.
2. PURPOSE
The Secondary Food Crops Development Project increase The Secondary Food Crops Development Project is intended to PalawiJa Is the production and improve the marketing system of palawija. most signiicant collective name for secondary crops in Indonesia. Th e and sweet potato. of these are corn, cassava, peanut, soybean, mungbean, are generally agreed Low productivity and an inefficient marketing system crops in to be the principal constraints to development of secondary Low productivity is due to several factors: poor sol Indonesia. cropping conditions, extreme climate and season patterns, and traditional government has pr.ctices. Since independence, the Indonesian the national concentrated its efforts in agricultural development on Government has staple, rice. 7n concentrating on rice production, the Because palawija purposely neglect.ed development of palawiJa crops. new varieties and cropn have been re.latively neglected, Introduction of The majority of improved agronomic practices has been very slow. traditional Indonesi.'n !armers still grow traditional varieties, u~ing production tochniqtien.
Now, however, that Indonesia has achieved virtual self-sufficiency Secondary rico production, attention i being turned to Ralawija. The In Cropping Food Crops Development Project embodies that new interest. Lampung and systems research in upland areas conducted by IRRI in in South Sulawesi have fertilizer-yield response trials conducted by FAO levels of inputs are achieved significant yield increases when optimum agronomic practices. provided and used in conjunction with appropriate demonstrate this The Secondary Food Crops Development Project will regions of Indonesia. potential to a wide audience of farmers in three a suitable model on It is also expected that the project will establish efforts in the future to which the Govarnment of Indonesia can base its extend palawija development throughout Indonesia.
3. ALTERNATIVES
Food Crops The proposed action represented by the Secondary support activities. These Development Project involves a wide variety of This Environmental are described in detail in the Project Paper. pertaining to Evaluation addresses only those aspects of the project pesticides. selection of the The major issue to be addressed at this stage is Five alternatives are pesticides to be utilized under the project. identified: use by the Hinistry of 1. Use any pesticide that is registered for This would make a broad Agriculture of the Government of Indonesia. array of pesticides available for the project. through 2. Use those materials that are approved for distribution still would include a P.T. Pertani fL- the BIAS/IN4AS program. This large number of pesticides. registered) with 3. Use mainly USAID approved pesticides (USEPA and restricted materials the option of using a few non-USEPA registered and are approved safe that fit into an integrated pest management program proposed pesticides for on a case by case basis by USAID Washington. All of Indonesia. No the project are already approved by the Government prior approval of the additional materials would be approved without the Indonesian Government. paper has been written This is the proposed alternative and the project for use are registered in this manner. All of the insecticides suggeeted of corn is included that by USEPA, except a fungicide for seed treatment because it seems not yet registered by USEPA. It is included ti beriously rhreaten the essential for control of mildew, which could pesticide has been success of the project. A single USEPA restricted because there are no suggested for use in the project. It is included and seeds. unrestricted alternatives for fumigating grains approved pesticides 4. Use only government of Indonesia and USAID included in the project. with no restricted or unregistered materials much research on rice atrd This would be a desirable alternative, but outside of the United States, tropical crop post management is being done valuable selective and sate and such an option might exclude some very the U.S. A complete ban on materials just because they are not used in project without any all USEPA restricted materials would leave the pests in grain storage. effective method for controling serious insect at all in the 5. The last alternative would be to use no pesticides pesticides are currently being project. Although very limited amounts of for pesticides at critical times, used on palawia crops, there is a need true to protect the newly on each of the crops. This is particularly and pods as they begin to emerged seedlings and to protect the grains and are placed in storage. mature and after they have been harvested the various crops there Without insecticides and fungicides to protect the confidence of would be serious crop losses that would undermine project aims to develop a model growers in the program. Furthe-ore, the Pesticides will inevitably for palawija expansion on a national basis. as the project can set a be utilized by Indonesian farmers. Insofar use of pesticides on standard of judicious selection and careful efforts to insure the Government of Indonesia's palawiJa, it will support and human impact. effective crop protection with minimal environmental
4. AFFECTED ENVIRONMENT
South Project sites will be locatr-d in three Provinces:Lampung, areas the project will cover Sulawesi, and East Java. In each of these of which about one two WKBPPs. Each WKBPP averages 33,000 farmers, project through adoption of quarter are expected to participate in the t q on the region, technology including pestici Le . Depending recommended hectares; the total area size of the farms varies from 0.5 - 2.5 average 48,000 ha. Since affected by the project will be approximately directly grower is essentially a demonstration for widespread the project substantially larger. The acceptance, the long term impact should be to an additional six WKBPPs project design calls for posssible expansion would be adopted as a model for in Year 4 and if successful the project more widespread replication in the future. of the Equator. The three project Aites are located within 5-70 sie, although annual amountsa vary Rainfall is heavy and !ivaional at each in South Sulaweiii. Seasonal from 2,400 mm in Lamptin, to 1,500 mm and East Java receive moat of distribution of rain alio varies; Limpung a relatively dry period in their rain from December to Mairch and have Sulawei peak rainfall comes in August, while In Yibupliten hone of South October. Hay and June with th. dry period in recent volcanic lo I-int Java to The soil in the project ,reari vary from area. The rod ye llow podzti Ic red yellow podzolic in mo,;t of the other acid (ph 4.5 - ')). Thin can be soils are characterCied by being highly and crop reeidurrn. Acidic "oils neutralized with the addition of lim, they will ntill be exponed to slow the breikdown of peticides, hut biological degradation. with most of All of the project sites have been disturbed by agriculture of agriculturally the area presently tinder cultivation. Invasion poses n serious disturbed land by alang-alang (Imperata cylindrica) Slash-burn farming is threat to efficient farming in some of the areas. weed. sometimes practiced in efforts to control this with moderately sloping Palawija are grown mainly in rainfed upland areas are grown in the dry to rolling topography. Ordinarily, palawija crops after harvest of the main season utilizing residual moisture remaining of palawija are higher in crop, rice. However, the harvested products than rice. content and therefore are more difficult to dry moisture storing, and marketing These characteris.ics cause problems in grading, processing and storage. and contribute to pest and disease attack during
5. ENVIRONMENTAL CONSEQUENCES
5.A GENERAL DISCUSSION OF ENVIRONMENTAL IMPACTS
Fertilizer Use and Soil Quality project will be the The only environmentally sensitive aspect of the the project, however, use of pesticides. During the course of assessing fertilirers were examined. the possible problems associated with use of for fertilizers and A brief discussion of the project's implications preservation of soil quality is in order here. interplanting, The proposed cropping systems -- which incorporate -- should have a alternation of crops and mulching of crop residues cropping and mulching beneficial effect on the environment. Continuous erosion. Mulching will of all crop residues will help to prevent soil will be a need to use also help soil fertility. However, there to maximize the productivity commercial fertilizers and soil nmmendments of the cropping with the proper strains of Crop rotation with leguminous crops inoculated Anticipated requirements Rhizobitm should reduce the need for nitrogen. and potash should of chtmcal fert ilizers ,tich as nitrogen, phosphnte, !ioiln in some of the not have &iverse environmenta'l effects. Be'cause will he neceqsary in those project areas ,ire highly acidic (pH 4-5), it In coastal regions of to add lime (1-2 tons/ha) ro the soil. areas reefs. However, lime Is frequently mined from inshote coral Indonesia, in all of th" project there are advquate terrestrial sources of lime areas.
Peat iciden used on palawija Very small quantities o pert icides are presontly tse at a minimum. The reasons crops. This project shntld keep pesticide margin of profit of thome to keep peaticide Inputs low include: low pest problems and their contrul, crops, lack of knowledge and training on are interplinted and harvested difficulties of crop residues where cro-Vs management information for at different times and lack of good pest there is strong evidence that efficient and nondisruptive use. However, can contribute to higher judicious and intelligent use of pesticides catastrophic losses by some yields and are needed to insure against in the whole program. farmers which could undermine confidence project will reduce pest problems The cropping systems proposed in this alternation of crops will help but not eliminate them. Interplanting and and mulching of all crop in the control of many insects and diseases weeds. On the other hand, the residues wlll help reduce competition from will probably make the use of higher yielding varieties and fertilizers crops more susceptible to pest atLack. emphasis in Indonesia, pest Because rice has received strong research on irrigated rice, sawah. As management is relatively well advanced sophisticated at the higher everywhere, pest management theory is more by the farmer. Resistant levels of administration than that practiced alternation of crops and varieties are heavily relied upon and reduce pest problems. Good simultaneous planting are stressed to of pects or incidence of disease information is available on the number sawah. The relatively large that jusLifies the uJe of pesticides on been devoted to sawah is paying amount of pest control research that has helathy production of rice. In off in sound control procedures and the to pest control on the contrast, little research has been devoted little is known about the secondary food crops, and as a consequence, of damage caused by various most appropriate varieties and the degree populations of pests and diseases. is not oriented toward The Secondary Food Crops Development Project with the but is designed to show what can be accomplished research, there is going to be an urgent present day state-of-knowledge. However, information on jalawija need for impreved integrated pest management potential. All levels of crops if this project is to meet its full trials to more sophisticated research will be needed from simple field ecology and cpidemiology of pest research on varietal resistance, the justify chemical controls. Thie outbreaks, and the pest populations that of Food Crop Protection within cooperation of AARD and the Directorate of this program. As the DGFC will be essential for proper success pest manageiaent reseach palnwj crops increase in economic importance. Certainly any integrated peat is going to have to be directed to them. information on palawiJa should be managmeent projects that would provide supported heavily. is the topic of natural An example of the kind of Information needed j crop ecosyntems- i. Te uniform biological control mechanisms. in ifawli systems to he used in thi n project climate of Indone;I n and thoe cropping predators that are very are both very conducive to parinites and pests on p. Inwlja. However, if important in helping to control insect we munt know more about them, these natural ,nemies aire to be conservnd, and what pesticides will give what levels of pests can be tolerated other pests becaune of control of target penst without aggravating intense disruption o! ntitural biological controls. will control a number Granular systemic insecticides such an carbofuran we'l as on rice. They should be of important pests on palawija crops as have several distinct advantages given preference for use because they advantages include: over liquid pesticide formulations. These
- granules are safer to handle by both experienced and nonexperienced farmers; specific with minimal - granules are to a large extent target pest ddverse effect on natural enemies; shakers and dispensers that - granules can be applied with simple available than expensive sprayers; and are more they are used to - small farmers readily accept granules because are least error applying granular insecticidei and granules prone of all the pesticide formulations. the one disadvantage is no doubt that all these advantages outweigh There costs. Within cost because of formulation and transportation -- higher the use of granules and seed this project it would be wise to maximize be wise for the government to treatments. To further this cause it would to stimulate their use. subsidize the use of granular fonnulations
5.B. ENVIROINENTAL IMP.-CTS OF TIlE ALTERNATIVES
Alternatives 1 and 2 for use by the Government Use any of the 286 pesticides reistered the BIAS/1JN?* or made available through P.T. ERTANI for of Indonesia I-cause within not be an acceptable course of action RL2 -r__a- This would such as are a number of highly toxic Insecticides the list oral 15-23) that (monocrotophos- acute oral 18-21 and phonphmmidon-acute trained applicators with restricted for use in the United States by are These may he appropriate sophisticated and well kept ground equipment. and government employees who have for use by some sophitt icated fa rers such pesticidt, but this will the equipment and training to safely handle areas. Since many of the not be true of the farmers in the 1roject and do not onderatand the farmers In the project areats cannot read it would not be realistic to hazards of dermal exposure to pesticides, education. The other overcome these difficulties with training and nhould not be used it the compelling reason that highly toxic pesticides aprayers that are ued by program If hanecd on the unsophisticated hand for the application of the farmers. Such sprayers are not adequate be-t of trained workera. highly toxic penticide" by even the
Alternative 3 of using few. aproved penticides with the option Use larjill U-AM A by materials that ... l! I-a Oi non-re.tat-red or rentricted une Ily low- to moderately toxic case basin.-Tinoption will Inatire that pro ract and will Insure that there posticidn are tuned by f.. riern in thL the titme of harvest. Since are not harmful or Illegal reaiduestat fimall number of trained personnel restricted penticilden will be used by a option. there should tiot be undue rink with thia Alternative 4, restriction in the Use only pesticides that are registered without relatively safe pesticides U.S. This alternative would insure that only illegal pesticide are used In the project and there should not be contamination at the time of harvest.
Alternative 5 This option Use no pesticides on the crops In the project. effects from the theoretically would remove all detrimental environmental the confidence of the project, but in reality would probably undermine This could jeopardize farmers because of crop damage and yield losses. loss of the projects the success of the project Pn' result in the fore- farmers to obtain benefict..l environmental effects. It also would of: much more pesticides outside of the project with the potential dangerous materials being In the project. UNDER THE PROJECT 5.C. DISCUSSION OF PESTICIDES SELECTED FOR USE in the program The pesticides that have been selected for use cyanofenphos. dJazinon, include granular carbofuran, .prays of carbaryl, tested for efficacy by the endosulfan, and fenitrothion. They have been in their latest Indonesian Hinistry of Agriculture and are included have been selected because (1981) pest control recommendations. They and they are not on the they are registered for siLlar use by USEPA, diazinon, and fenitrothion restricted material or RPAR list. Carbaryl, with no known long-term &re of moderately low acute toxicity (66-300) are registered for toxicological hazards. Both etazinon and carbaryl Carbof'Jran has a high acute oral home garden use In t' e United States. (10,000 mg/kg). By toxicity (8-14 mg/kg) but a very low dermal taxicity formulation there should be restricting ito use to the 3 percent grarular Is the only no undue storage or applicatirn h-vards. !ndosulfan list. It does not accumulate in chlorins .d hydrocarbon .ncluded on the It is of high toxicity the soil and doos not persist in the environment. Its use is restricted to to fish, but this should not be a problem If of ponds that are upland rice. It should not be used in the vicinity of moderate acute bein used for fish culture. This insecticide because certain bugs toxicity (80-110 mg/kg) is included In the list to control with phosphate as the rice bog are difficult (Ifemiptera' t.uch oral 1000 mg/kg) is aK-ir'U"ate ini#Ltic'des. Cyanofenphos (acute control for these bugs in included because It appe re to be a potential areas where endosulfan cannot be used safely. un under the project that is kidomil to the only pesticide proposed for no toler.anc e l si been not listed lot iplpruved u&e 1y USAID. AlthuJghi grain Ri loll on corn, there should be no problema with est .. lished f. (I of the small ammont ued on the 'wed Cont aMI fl4t 101 Ivrvest because toxicity of P1domil (1,656 gm/ k) At plaotIRig time. The low mimmalinn but the treated need mg/kg) mkres It safe for ue as A seed treatment, to be stored before use. should be given a warning color If it is mildew, Sclri'spor maydi. Ridomil is included on the lst bocause downy In Indonels. Kelistant remains a constant threat to corn production the main method of control relied varieties and crop rotation should be because of the difficulty of upon, but fungicides will be needed - To with constant cross pollinat on. maintaining resistant corn lines the resista.it varieties and slow prevent mildew strains adapting to and early and simultaneous planting resistance to Ridomil, crop rotation control program. should be incorporated into the that is the only restricted use pesticide Phostoxin (aluminum phosphide) is a serious need to be able to included in the project. There is Phostoxin is a much safer seeds and grains in storage, and fumigate be handled in pellet than methyl bromide because it can alternative experts to safely work with BULOG has the equipment and trained form. but this will not be the bromide in th, ir large storage sheds, methyl With proper training, Phostoxin case in the rural areas of the project. but this probably would not be the car, be safely used in the progrom, case with methyl bromide.
5.D RECOMHENDED MITIGATION MEASURES the do everything possible to enlist I. The project managers ahoul of Food Crop Protection within the aid of the AARD and the Directorate pest management for the palawija DGFC to develop more sophisticated be crop intensification is going to crops. There is little doubt that future, and it is essential to have directed toward these crops in the as incrcasing amounts of fertilizer better pest management information on these crops. and pesticides start to be used assurance that pesticides are 2. The project managers should make on a per farmer or per hectare allocated along with fertilizers not instill the philosophy that It is essential that the project basis. yields, but when used used when needed can help maximize pesticides side effects that can reduce without cauqe can have serious detrimental yields. will be used on the only moderatelY toxic pesticides 3. Although built into the to be a resticide training program project, there needs worker and of the project will be extension project. A major component taught safe use of pesticides should be farmer training. Effectivw and training. Properly labelled pesticide along with the cropping systems cannot be r*l.ed upon because of the containers are esencial but farmers The only realistic means of training illiteracy of many farmers. will be granular and liqu'd pesticides on the proper atnd tiae use of through extnrioti trnining. special used as a seed and grain fumigant, Since 'lPostoxin will he of people glven to tho relatively small ntmber training will have to be under the suggested that this activity be involved In fumigation. It is teams who csin he moe readily trained direct supervision of the field because of their terinlcal background. storage in the will have to be made for pesticide 4. Some provision Is It is clearly evident that there lfoCal areon of the project. Even or around the homes of the farmers. ,nadequnte storage on the farms are of moderate toX i y, though the pesticides to be used in the project get into the hands of could cause serious illness if they were to they about the dangers of children or other individuals who do not know pesticides. production 5. Field trials with the different components of crop will undoubtedly include will be an important part of this project and only be carried out with trials with pesticides. Such trials should Indonesia and have been pesticides that have been approved for use in safe by the shown to be toxicologically and environmentally without tolerances, mantfacturers. When such trials involve pesticides or animal consumption, and the reatLd crops should not be used for human the farmers for their loss of crops. provision should be made to reimburse closely with 6. Since the Field Tems and PPLs will be working rates, it should be farmers on cropping systems, varieties and fertilizer It would be very to monitor pesticide use quILe easily. possible use at the beginning of the desirable to get baseline data on pesticide the program progresses. progrum so that comparisons can be made as level and also through Pesticide use should be monitored at the farmer the sources of distribution. ANNEX E
CROP PROTECTiON
Corn (Maize)
The seedling fly, Antherigona exigua (lalat bibit), causes serious losses of corn seedlings. This can be minimized by alternation of crops or spray of carbofuran granules at the time of planting. Such treatment will also control Phyllophaga helleri, which attacks corn in some areas. The stalk borers, Ostrinia furnacalis and Sesamin Inferens, as well as Downy mildew, Sclerospora maydis, remains a constant threat to corn production in Indonesia. The best means of control is use of the resistant varieties, Arjuna, Harpan or H-6. In areas with severe mildew problems, the seed can be treated with a systemic fungicide such as Ridomil. Although no tolerance has been established for Ridomil on corn, small there should be no problems with grain contamination because of the amount uscd on the seed at planting time. To prevent biotypes adapting to the restraint varieties and slow resistance to Ridomil, crop rotation and early and simultaneovs planting should be incorporated into the control program.
Soybean
The most oftey, mentioned pest is the bean fly, Ophioyia phaseoli, which mines the leaves and stems causing the death of the seedlings. This pest can be cottrolled most effectively with systemic insecticide granules applied at the time of planting. Carbofuran granules are presently giving goot' control and would also help against the white grub, Phyllophaga (uret). If granules are not used and high populations a:e days after encountered, sprays ot diazinon or carbaryl should be used 5-8 planting. However, sprays will be less effective and could even of stimulate later leafminer, Agromyza dolchostigma populations because tan adverse affect of the sprays on natural enemies.
The soybean leaf beetle, Phiesdonia inclusa, can cause serious defoliation but should be suppressed by alternation of crops and early and simultaneous planting of soybean. Diatinon or carbaryl sprays should 4ays give control If populations are causing serious damage at 45-65 after planting. Include Three other pests can cause serioun defoliation of soybean. They the leafworm, Spodopters litura, the leaf roller, Lamprosema indicate, pests can be and the leafminer, Biloba (Stomopteryx) subsicivells. These controlled with either carbaryl or diazinon.
Poor pod set appears to be a serious problem with soybean in Indonesia. caused by This can raoult from weak and unthrifty plants, but also can be soybean insects that attack the developing seeds. Such pests include the and the bug, Riptortus linearus, the green stink bug, Netira viridula, the lina bean pod borer, t-i ella tinckenella. These pests attack controlled with developing pods from Z -6-3dysafter planting and can $be give fenitrothion. Another material, cyanofenphos (Surecide) should Damaging populIAluiud control and has USAID approval for use on soybean but one or two per plant would ht ? not been determined for these pests, probably warrant control.
Peanu t peanut. and the alternatCion to Di HeaiLe are a tierious problem with to alleviate crops proposed by this project should greatly non-legumne solanacearum; rust, many of those problems. la-terial wilt, Pseudomonas broom virus can be reduced Puccinia irachides; mottle ,Irus and witches be controlled further by the use by crop rotation. The mottle virus can and controlling Aphis of virus-free seed, rogulirg of infected plants present in a field. The other crassivora, when virus infected plantr are the resistant varieties v'rus, witches broom, can be reduced by planting Urouius, when Hacan, GaJah and Kijang and controllinp the leafhopper, Cercospora personata can be symptoms are noticed in a field. Leaf spot, but controls should only be suppressed with fungicides such as maneb, the biweekly sprays necessary used when leaf loss is substantial because input. to obtain control can be a very expensive B!1oba (Stomoptiryx) The insects on peanut include the leafminer, chalsites, and the subsicivella, the caterpillar, Chrysodaixib Tetranychus urticae, _Fpoa~ca. Since the two spotted mite, leafhopper, particularly is a serious potential peat of peanut, insecticides, possible because of their carbaryl, should be used as little as It should be possible to stimulative effect on the two-spotted mite. caterpillars and Empoasca control and leafminer with diazinon and the are a problem in some with carbaryl. If white grubs, Phyllophaga (Uret), give control. areas, diazinon granules at planting time should
Cassavih
diseases reported on There are conuiderible number of pests and pests seem to be a minor cassava around the world, but in Inionesia (scales, meslybugs, thrips, constraint on production. Many of the pests by selectior, of clean planting white flies) and diseases can be avoided taken from unhealthy fields. stock. Cuttings certainly should not be be the main way to avoid Crop rotation and resistant varieties will used In this project should disease proDlu.mn. The cropping systems to be If planting material could help greatly to alleviate disease problems. in the area, it would help be selected from the most vigorous plantings in the area. It also will obtain the best planting ,tck for all farmurs and corn rows do not reoccur be an advantage to assure that the cousava in the same place year after year.
Weed Control ja. This is Iherbicides are Uuit'd very little on ri re and palowii misusi could cause trious proper iild should remain that way because are A poor trade-off where damage to crops And igh herbicide inputs labor needs employment. is to be brought under If slang-alanr infested land (Imperata cylindrica) herbicides. Paraquat cultivation, it might be advantageous to use not be used because of serious tramoxone) although effective, shoul more expensive, the use of glyphosate hazard to Lhe itpplicator. Although Since they should be used before (Roundup and Dalapon) is recommended. be no crop injury. Drift to any crops are planted, there should surrounding crops ihould be guarded.
Storage Problems used varieties and storage of The project streeses the use of better be plagued with srurage pests). for improved marketing (both can grain from insects drying will help reduce quality losses Rapid and thorough climates. must be anticipated in warm tropical and fungi, hut problems Tight constructed with peat control in mind. Grain storage should be to exclude rodents and insects and also construction is essential to help is essential. Insecticides can be facilitate fumigation. Sanitation in storage areas and the grains used to treat cracks and crevasses must be exercised to prevent themselves. However, extreme caution grain for human consumption. or dangerous contamination of the illegal but expert technical probably be an acceptable insecticide Kalathion will of can be treated with a wider array guidance may Lt necessary. Seeds colored at the saere time to indicate insecti'cies but should be brightly they are not for human consumption. will be found in Indonesia are given The wide array of storage pests that of the pests because of their in Annex E. Rats are the most recognized pouie an even bigger threat but there is little doubt that insect3 size, rodenticides are also tropical storage. The USAID approval to long-term anticoagulant baits It must be kept in mind thait these given in Annex E. be so a continuous source of b..t must are dependant on multiple feedings eliminated. On the other hand, these provided until rat populations are because the rats do not develop relatively safe baits are advantageous bait shyness. of both saia for future Because the project will be dealing with storage there will be an urgent need planting and grains for human Lonstumption, sanitation. The only .,ractical for some sort of insect control beyond or under -s.etic. The will be fumigation of tight structures approach Since wor,.ng with methyl is between methyl bromide or Phostoxin. choice and form requires considerable 1uipment bromide in the gaseous desirai'e comes in polleted form is the most expert ise, lPhostoxin which the for use by trained personnel in alternative. PIhostoxin is restricted personnel on the project. U.S., and should only be used by trained
Racommended Actions several actions to be taken to The foregoing analysis indicates The following activities should be contribute to a successful project. the projecti supportad or funded directly hrcugh storing. I, Seed ihirr,vor'ntL selection, processilR, of rhytobis inoculum. 2. Research ni1seloction and production variety adaptation, and 3. Fieea trial research on fertilizer and line, cropping patterns 4. Demonstration of results of field trials. by Year 4. 5. Inoculum supply: imported initially, production extension agents, 6. Training: short-term in country for Field Teams, and other personnel. Teams, long-term USAID 7. Technical assistance: project sites Field actions to meet specialists and short-term consultants. Recommended below: each of those need are briefly described field trials in the Seed improvement activities will include research are to be province or kabupaten in which field demonstrations have been developed at Bogor establiahed. New cultivar.i (varieties) that un.ur the soil, climate, or other plant breeding centers will be tested at project sites. The pest pressure, and growing season conditions will be used in the superior cultivars for each crop at each location drying, and storage demonstration fields. Seed harvesting, cleaning, in the research and including pest treatment will be included Personnel and equipment will demonstratan aspects of seed improvement. research activity will be be required. Where possible, project-related However to guarantee available without iecourse to project funds. In thu project sites, development of seed of good varieties and quality arranjements with provincial funds have bean allocated for contractual adaptation trials. CRIFC research institutes to carry out varietal contracts with AARD, IPB or The project will support this process through to conduct the following other agencies with qualified scientists research and development work on rhizobia: of Philobiul japonicum 1. Selection of effective N-fixation strains for soybeans, peAtiuts, and mungbean.
soils, ci ltivrs, 2. Testing the adaptation of these strains to the test sites. and climate conditions of the three project carrier for the 3. Selecting a suitable and readily available bacteria, s uch as peat. production unit. 4. Development of a f(nctional roiel for rhyzobium requl, ed for 5. Determining the storage and handling techniqte' distrihutiott of the Inoculum to farmers. years at eacb project Field Trials tahould be condurted for three and rroppin pattern site on crop varietie . tartiliyri and lime rates, in potential are&s for and 3equence. ield trials will alr, bhe co ducted he contracted to a unit of expansion. This nitce-peific risearOi will will ocrupv about CRIFC in the provInces Involved. F at,' trials ty in the project. one-tenth of the field space used direc the croppitr pattermns r[monstrai ion fields will b4 antahliihed for $ecommenaj-J from prev ous research arid from field plot research in this at kabupaten levels and project. Agronomist* on the Field Team assigned the demonstrations MeLs assigned In the six WlAPPs will help direct carried out in farmers' fields. in the field Inoculum for legume crops will be imported for use is developed in the nation. demonstrations until a production capability section on input supply This requirement is discussed in the following and distribution. ultimate achievement Training is a vital part of the project. The the expertise of the of project goals will depend in large part on of the permanent project. Field Teams at each site and on the skills Team members will have extension utaff in the kabupatens affected. Field initiating a minimum of three months Intensive training before sites. Training will demonstrations and other activities at the project be integrated within also be designed for PPS, PPM and PPL staff and Short-term on-goinR training schedules established by the IXFC. farmers, progressive observation tours and prograrmn, training for contact planned. Short-term farmers, private dealers and KUD staff are also such as IRRI, observation tours available nt international inatittitions IITA, and CIAT will he utilized. stationed at the Technical assistance will include three Field Teams advisors at the project kabupatens, three long-term USAID technical as required, plus province level and in Jakarta, short-term specialists technical assistance will be senior DGFC project staff in Jakarta. This DGFC extension work. carefully integrated into the existing structure L: CROP PROTECTION TABLES
Table E.l. Major Posts of Upland Rice and PalawiJa Crops in Indonesia
UPLAND RICE (PADI GOGIO)
White grubs, Phyllophaga helleri
Rice Seedling Fly, Antherigona exigua
Rice Bug, Leptocorixa oratorius
Rice Blast, Pyricularia oryza',
CORN
Rice Seedling Fly, Antherigona exillus
White Grubs. Phylloph^Rs helleri
Purple Stem Borer, Sessminferene
Kaise Borer, Ostrinia furnacalis
Corn EArworm, lieliothis iatiera
Soybean L"afroller, LAmpross indicate
Army Worms, Soodoptera litura and exempts
Downy Mildew, Sclerospora mydis
SOYBEAN
Bean Fly, Ophomyis pheseoli
White Grubs, Inyhla haI heller i
Leaf hitters, a L a Ollchost-Lu- and Biloba (Stouo rYx uteecivell
Soybean l.&f batle, Phaedoniss Inclusa.
Armyworm, Spodot r _Iiturs
Looper, Chtysodsis Plusia) chalites Loaf Roller, Lamprosema indicata
Flea Beetle, Longitaraus suterelines
Pod Borer, Etiella zinckenalla
Soybean Bug, Riptortus linesris
Giten Stink Bug, Nezara viridula
KUNGBUAN
Very similar to soybeans
PEANUT
leafminer, Biloba (Stomopteryx) subsecivella
Looper, ChQryodeixis (Plusia) chalcites
Leafhopper, Empoasca SP.
Aphid, Aphis crnccivorl
Two spotted mite, Tetranychus urticas
Leafspot, Carcospora personate
Rust, Puccinln arachidis
Wilt. Pseudomonas solanascarum
Mottle Virus
Witches Broom Virus
in Indonesia." 1981. Source: Names based on "The pests of crops P.T. Ichtiar Klashoven, L.G.E.; Revised by ?.A. van der Laan. baru - van doers, Jakarta. Table E.2. Pesticides Registered by the Government of Indonesia and USAID suggested Use Patterns on Rice and palavija Crops. A/ (After r.R. WARD and C.W. CO'.LIER,1981)
Soybean Peanut Pesticide Rice Corn
Insecticides Y y Bacillus thuringiensis Y y (Dipel)
y y Carbaryl (Sevin) Y y y y T Carbofuran (Furadan) y
Chlorphyrifos (Dursban) T y y Cyanofe nphos (Surecide) y Y y tk/ Diazinon (Banudin) Y T Endosuliati (Thi odan) y y Fenitrothion (Ajsrothion) y y T alathion (Gluonthion) y T
Fung' cidr_ T benomyl (II nlate) Y Y Oloroth~llnol (Daconlil) T
Copper oxyh loride (Cobox)
Edintenphos ( Ilnsan)
lancotob (D.thano) T
T' Kntiel (MIAnyate)
tierblu Ides
T Artrxm - (Casaprin) TT bent a= (ro.=4artn) y T
Ienth orr, 1
2, 4-D (WeOdAinf) V T Peaticide Rice Corn Soybean Peanut
Dalapon (Dowpon) T T iUnuron (Afalon) T Y
HCPA (Weedone) Y
Oxadiazon (Ronstar) Y
Propanil (Stam) y
Glyphosate (Round-up) Registered for use before planting
"Y" indicates USAID approved use. "T" indicates tolerance
eftablished and use approvable.
Residue data required if used close to harvest. Table E.3. Pests That Will Be Found in Stored Grains and Legumes
Common Name Scientific Name
Rice Weevils, Sitophilus zeamais and oryzae
Kapra Beetle, Trogoderma granarium
Saw Toothed Grain Beetle, Oryzaephilus surinamensis and mercator
Tropical Warehouse Moth, Ephestia cautella
Indian Meal Moth, Plodia interpunctella
Rice Moth, Coricyra cephalonia
Emerald Green Cereal Moth, Doloessa viridis
Lesser Grain Borer, Rhizopertha dominica
Corn Sap Beetle, Carpophilus dimiatus
Rust Red Flour Beetle, Tribolium castaneum
Tobacco Beetle, Lasioderma serricorne
Drug Store Beetle, Stegobium paniceum
Cowpea Bruchli, Callosobruchus chinensis
Rat, Rattus arentiventer Table E.4. Rodenticides Registered by the Government of Indonesia and Approved by USAID for Use in and around Building and Storage Structures (After C.R. WARD and C.W. COLLI R, 1981).
Common Name Trade Name
Brodifacoum Talon
C'umafuryl Ratlin
Diphacinon Diphacin ANNEX F
CROPPING SYSTEMS
Rainfall (mm) 400. Way Abung 1976-'77 300 2W0
10a
0 Oct Nov. Dec Jdn.Feb. Mor.Apr. May Jun. Jul. Aug. Sep.
INTRODUCED Corn PATERN / Upland Rice i/ onuo
Figure Monthly rainfall distribution and year around cropping pattern commonly tested on red-yellow podzolic soils (Lampung)
Source: A CROPPING SYSTEMS TO PRESERVE FERTILITY OF RED-YELLOW PODZOLIC SOILS IN INDONESIA by: J.L. Mcintosh, Int Condana Ismoll, Suryoalo Efterodl and M. Sudjatl pland PEANTS or PADIO O0RANCAH COWPEAc r SOYBEAN or SE SAM E or I (125- 135dayi ) SOYBEAN SESAME CORN + Coin Intercmp + Corn Irytocmp ( 3-4m rows) CASAVAC ASSAVA i (dwarf; 3-4m. row]
PEANUTS or jCOWPEA or or PEANUTS SESAME or SESAME jSOYBEANSI Rainfall ISOYBEANS mm. 500 + Corn Intercrop +CORN
400- CAMMING (12 yr. aug.) PALLATAE ( 27yr. aug.) \ 300-
200 $ N
100
'I
A 5 0 O N D FFM A M J J
Lowland 0-TI LI. MUNG9EANS PEANUTS OR IDI GOGORANCAH SOYSEANROR it-I1Z0DAYS1 ICOWPEA I SESAME Soerms "CORN 4NTRCRIOP OLTILi-OR RE LAY TR MUNSIEANS. PEANUTS OR COWPEA SOYSEAN't OR 05 - S DAYS SESAME___ SOYSEANS4(u01 4 top" MIECROP SUUSMIRONCE TOLERANCE FOR LOW AM"A Figure F2: Monthly rainfall distribution and year around cropping pattern In FPILLATAE, BONE, S.SULAWESI Source: Dr. JIM HOOPIER, IRRI-CRIFC Up land - 93 K PAMPANUA jBONE (35yr.) OPENEKI WAJO (13yr.) O-TILL OR RELAY CROP' AS BEFoREJ'] !DI 05O:ANCH=clp I._MU.~O a f7 ~JROJN 1
CAAVA CON __SAV
Rainfoll mm. 500
0
400. 300. A7
200
00
0 00 0 &
I I I I I 0 , I I I I I I A S O 0 N D J F M A M J J
Lowland RELAY OR0-TILL O/ PEANUT SESAME#NIUGBEN.CWI:.AJ OIOOOA 'J "''1MC f"4 MUNGc wPEA AN'
PI.Au'rs.SEArIw _NI MUNGBEAN ~uuE~w.n3M "_ TJPR 115 CoWPFA
Figure F3.Monthly rainfall distribution and cropping pattern In WAJO and BONE, S.SULAWESI. Source: Dr. JIM HOOPERI RRI-CRIFC, Maros Station Rainfall 400MM. KAHU PALLATAE (27year aug.)
300. CAMMING (12 year aug.) x 200 x ×x
100. -X x x x 0 0 N JF MT ~ T
IR 42 LOW AREA TRANSPLANTED RICE FARMERS FATERN TRA TICE WET YEAR PPEAN1 UT \ LOW and 105-20das 'FARMERS PATTERN HIGH AREA TRANSPLANTEDN O~idaDRY, RICE YEAR
ITRAN SM NTERICE -TILLOR LOW AREA 1700-I75d s TRANWSPLANm RICE RELAY!MUng Soon !ITOUEINTRODUCED 115-135doys 7das PATTERN 70 days I IR 36-115 IR52- 125 WET YEAR IR 50-112 IR42- 135days
LO EA POGORANCAH I 0-TILL OR LOW AREA t±2 rIs75' [I RELAY II NSPLANTEW OR IMungBon INTRODUCED Im5wIGOG0RANCAH or powsoI PATTERN IR 36or30 (llOdays mulch) WET YEAR O-TILL MUNG HH AGGONCAH MUNGBEAN INTRODUCED HIH RE iIF'R36 or 52(Idoyl . COWPEAN PATTERN
FIQuI e F.4. MONTHLY RAINFALL DISTRIBUTION AND YEAR AROUND CROPPING PATTERNS IN PALLATAE AND CAMMING Bone,S.Sulowesi Source by: Dr. JIM HOOPER IRRI - CRIFC ANNEX G
Fertilizer - Crop Prices
The price ratio between crops and fertilizer is a key and factor in decisions of farmers to adopt improved varieties varieties and to buy and use expensive fertilizer once improved actual price fertilizer become available. It is not just the expectations ratio at any time which is important but farmers' in a decline and degree of certainty. Large harvest@ resulting Stability in prices discourage purchase of expensive inputs. even at and reduced risk achieved by an effective floor price, but a somewhat low level, may be more important than a higher crop fluctuating price in stimulating fertilizer use and production. policy seems From 1963 to 1968 inflation was rampant and price of rice and to have be quite erratic. Table G.I shows prices urea and the ratio of rice to urea prices. A well known profitable to authority to have said that farmers would find it paddy rice use urea only with a ratio above 1.0 (Price of divided by price of urea/kg). to 0.5 The ratio was 6.7 in May 1963, but steadily thereafter of N in May 1967. It was only 0.6 in Oct. 1966. Off take lowast and appears to have bottomed in 1967 when the ra o was recovered as the ratio increased beyond 0.6.11_ However, when fertilizer consumption had begun to fall off in 1963/64 the ratio was between 3.0 and 4.0. Apparently price uncertainty and fertilizer supply and destribution constraints were critical factors. of By 1968/69 the government had established a policy constant. supporting rice paddy prices and holding urea proces and urea For five years rice paddy was supported at Rp. 20.9 1977 the sold at Rp. 26/kg for a ratio of 0.8. From then to price ratio fluctuated between 0.7 and 0.98 with sharp by 1977. increases in both urea (Rp. 70) and rice (Rp. 67.5) probably as Nitrogen consumption increased by several fold - by supply, much as was feasible given other constraints imposed Most of distribution, credit, improved seed and extension. the food that increase went on Food Crops (Tab. G.2) and within crops it went mostly on rice.
2/1 Data from the June 1968 USAID Fertilizer Report, Chapter IV. It is not clear but it appears that the rice price used was the floor price of dry stalk paddy. while the Since 1976/77 the price of urea has ben held constant in 1982. This rice support was raised reaching Rp. 135 per K& the ratio brought the ratio for 1982 to 1.93, more than twice consumption during the period of excellent growth in nitrogen (1968-73). 1.13 kg The 1980 price ratio would mean that It would take only of paddy rice to buy a kg of nitrogen in urea form. 10 kg of Considering that farmers should be able to get at paddy with a margibnal application of 1 kg of N additional Rp. use averaged, this would imply a return of almost national 3.0 to one is 7 for each Rp. 1 spent for urea. A return of use of N especially considered adequate to stimulate increased risk. The with effective support prices to reduce price ratio but with problem from 1974 to 1976 was not much the price supply and the sharpness of price increase and probably distribution. STWL are more For other crops. price stability and price risk for serious problems since the official support commitment really been corn, peanut, soybean and mungbean have not about 1.5 kg of tested. At current farm prices it will require of cassava, about corn to but a kg of N or P205 , about 5 kg of these ratios 0.25 kg of peanut about 0.5 kg of soybean. All Illustratively, appear to be very favorable at the farm level. must pay in for corn this is only 25% of what U.S. farmers it is 20-25% of terms of product for a kg of N. For soybean and for peanut 25-30./2 Of what U.S. farmers must pay out, fixing inoculum for course U.S. farmers have available nitrogen to produce use on soybean and peanut which makes it possible Usually in the heavy yields with no other nitrogen supplied. peanut. The project U.S. only P and K are used for soybean and low-cost, has as one of its objectives to provide this farmers. high-energy conserving technology for Indonesian are very It seems evident that the current price rarioa for all crops and fertilizer consumtpion is limited attractive of by fertilizer supply and distribution and availability only technical other parts of package; that is, good seed, suitable the crop for know-how, pocsibly credit and ability to prbpare and market good market acceptance. Uncertainty c! price acceptance factors, of course.
about Rp. 100/kg, /2 The Indonesian farm price of corn is soybean Rp. 325; and peanuts Rp. 700/kg Table Gel: Fertilizer and Rice Prices
in Rp/kg and Price Ratio
Urea Paddy Floor Ratio of N to Paddy
1968 26 20.9 0.8 69 26 20.9 0.8 70 26 20.9 0.8 71 26 20.9 0.8 72 26 20.9 0.8 73 40 30.4 0.76 74 60 41.8 0.70 75 80 58.5 0.73 76 70 68.5 0.98 77 70 70 1.01 78 70 75 1.07 79 70 85 1.21 80 70 105 1.50 81 70 120 1.71 82 135 1.93 Table G.2 Food Crop Bass Pricesl/, 1977 -1982 and Jakarta wholesale prices 1978-81 (Rupiah per Kg)
1982 Crop 1977 1978 1979 1980 1981
Base Support prices
Rough rice /2 71 75 95 105 120 135/4
Corn /3 - 40 42.5 67 95 105
Soybean /3 - - 210 240 270
Hungbean /3 - 260 290 310
Peanut /3 - - 300 390 425
Jakarta wholesale prices
Peanut 360 584 663 780/5
Soybean - 190 272 309 355/5
/1 Prices to be paid to the farmer by government-sponsored cooperative (KUDs) for crops of standard quality and moisture levels.
/2 Base price effctive on February 1 for years 1977-1981; ef.*ective on January 1 for 1982.
/3 Base price effective November 1 of the previous calendar year.
/4 Purchases from farmer groups participating in the government's INSUS program received a premium of 3 rupiah/kS in 1981, and will receive atleast this premium in 1982.
/5 First 4 months
Note: US$ I - Rp. 635 (November 1, 1981) Source: BULOG and Agriculture Attache/Jakarta for Food Crops Table G.3 Government Subsidies (Rp million)
1978/79 1979/80 1980/81 Crop 1974/75 1975/76 1976/77 1977/78
7,190 59,530 87,200 Rice 118,700 27,110 7,450 - 25,120 21,080 62,700 Wheat 18,400 22,890 16,380 - - 19,800 Sugar 6,400 15,280 - - - 6,700 1,380 Coconut - - oil - - 4,400 - Rice for - - - Timor
43,480 81,990 169,700 Total 143,500 50,000 19,110 -
World Bank, Nov. 1981 Source: Ministry of Finance as reported by CIF, Support and Actual Prices of Selected Secondary Crops, 1981 in Rp/Kg.
Crops CIF Price Support Price Actual Price 214 Hilled Rice 225 214 100 Corn 100 105 325 425 700 Peanut 325 Soybean 200 220 700 Hungbean " 310
Costs of Fertilizer and Pesticide In relation to Farmers' Price, 1981, in Rp/Kg.
Distribution Total Price Cost to Farmers Input Base Cost
Urea Cl 160 40 200 70 70 14cil 111 35 146
TSP CIF 154 40 194 70 275 70 Local 240 35 5000 1250 Pesticide A%,NEX H
MISCELLNEOUS CHARTS
INDONESIA SECONDARY FOOD CROPS PROJECT MINISTRY OF AGRICULTURE ORGANIZATEC
MI NISTER
DP STAFF WSPECTO GENnA
SECRETARAT GENERAL
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L _AL -R AL COOROf, PROVINCIAL TOR - REPRESE IATI VES OF ThEIi mi tsn R OFAGRICLTURE
OFTHE SIMAS SECREAR THE DIRECTOR GENERAL O FOOD CROPS IS CURRENTY ALSO HEAD INDONESIA SECONDARY FOOD CROPS GENERAL FOOD CROPS ORGANIZATION OF DIRECTORATE
NATIONAL LEVEL DIRC--' GCNERAL
DIREMCtUg DLRECMRATE PROE)UCT ON AGRICUL'UTLI ' ~ h~ TECHNIQUE FipANN4 ING ECONOMICS
PROVINCIAL LEVEL iS FO
BUREAU BUREAU 'AGRILURIAIoOUCTION UREAU BUREAU BUREAU ICS L ABCoTYCN TECHNIQUES EXTENSION rLANNING ECONOM -. - - -
LEVEL ICT DISTRICT AGRICTURAL OFFCER~
AGRICUTU ECONO' PRODCTON RALTECHN. PLANNING ond SECTION EXTENSION SECTION SECTION SECTION STATISTICS TEAM SECiON FELD
SUB-DISTRICT LEVEL WKB PP RURAL EXTEN TiON
AGRICULTURAL OFFICER (Montri)
VILLAGE EL EXTENSIONVEVE1LLAG UNIT-w Oh'fEft (PPLl.) )
ICONTACT FARMER - FARMER GROUPJ FARMERSJ az S
aimcc *I*LOSe' 01 ZOno111100 LL.
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II IL
all Figure t, INDONESIA SECONDARY FOOD CROPS PROJECT FOOD CROPS IN INDONESIA DISTRIBUTION CHANNEL OF FERTILIZER FOR 1980
D)OMESTIC I M POR T S MANUFACTURE]RS
PU SRI (Pup uk Srtwljoyo
WAREHOUSE LINE III
DISTR I DUTOR
S EUB-DISTRIBUTOR
DI A S INMAS] LOTHEfFRMR - 105 - UNCLASS IF Ir STATE 256570 1/
ANlNEX I OrKAViCZ'JAOE54 PP PuF-J.A ' PU-HC .5"/m 1 2681341 ZNR UUUUU ZZH 2 SEP 81 P 251,2237 SE 91 TOP: 1412 TOP: 1412 FM FF(CSTATT VAFHDC r '10 AMEmBASST JAAPTA PRIORITY 1597 CHRGE:CN: 39 9irAH .T INFO: AmP ADCM 9 r' UF'CLAS STt.Tr e-,7Z3Ar.M CFRON 14/GD AIDAC
E.O. 12365: N/A
TAGS: PID SUBJ: APAC - SECONDARY FOOD CROPS DEVELOPMENT PROJECT KO. 47-03.34 REFS: JATAPTA 13e~e ASIP PFOJECT'ADVISOPY COMMITTEE (APAC) APPROVED THE 'lFE CAVEATS SUBJECT pir ON SEPTEMBER 14 WITH THE .OLLOWIKG At COMMENTS: I IN PRItCIPLE, 1. GENFPAL CONCLUSIONS: THE APAC _NDORSES, P STRITEGY TO PLACE GREATER EMPHASIS IN USAID/INLONESIA ASSISTANCE ON SECONDARY CROPS. THE DIVER- A.GPICULITURfL I.E. SIFIC)TION OF EFFOP.T THAT THIS WILL IMPLY, BUIrING UPON PRIOR EXPEPIENCE IN PR.OJECTS FOCUSED PPEPOMINANTLT ON ?ICE, OFFERS LONG-TERM OPPORTU'ITIES IN AN AREA WHICH IS 3ECOMIN3 A HIGH PRIORIT FOR INNOVATION DIRECTLY BEtNEFI FOR Hr GOT )RID WHICH HAS THE POTENTIAL TO RUR.AI POOR. TEE REVISED PID WAS A SUPSTANTIAL IMPROV. TPE ROWFVER, MENT OVFR 'IlF EARLIER PID SUBMISSION IN 1933. AS TVF PP IS PRPPAREt, THE USAID VILL NEED TO SATISFY SFVEPtL CONCFPNS, AS DESCRIBE-r BELOW: FOP. 2. PUDGYT LIMITATIONS: PROJECTED BUDGET LEVELS INrOK:SIA WILL REQUIRE CAREFUL PLANNING 'ITH SPECIAL TO I NrPE'/ENTALLT FUNDI- PROJECTS AND MRTGAGrjS ATT?'TION PROJCT FU'I'JPE FUDS. AT PRESENT, THE SECONDAPT CROPS ON WHILE IS NOT INrLUrEp IN THE ASIA BUREAU ABS FOR FY emo. VF WILL S':PPOPT TEZ PREPARATION OF A PP AS RECOMMENDED IN ITrM, NO. P, BELOW, THE USAID WILL NEED TO REE.AVINE PROJFCT-D BUDGET LEVELS FOR FY 82 Af'D 83 TO DETERMICE ITS IN FOY SOON TPIS P.OJECT CAN BE FUNDED. TO P" INCLUrED FY 833 CP, TF.3 MISSION WILL NEED TO REDUCE PLANNED TFE AtNOI'F7-R FUNrii, fOP. OTUER PROJECTS OR POSSIPLY ELIMINATE PROJCT. 3. MACRO P ',MFN1/MARFTING ANALYSIS FOP SECONDAPY CROPS: ANr THER. ARE FItNAMENTl.L OUESTIONS RELATED TO CURREtY' POTENTIAL DEMAf'D AS WLL AS MARKVTING OUTL%.TS TOR SFCON AbY CROPS IN INDONESIA WHICH SHOULD BE ADDRESSED UNCLASSITIE STATY, mv5"5 i/Z STAT, ?95?? ... . UNCLASSIFIED HAVE ?ANr STUDIES, IN P)PTICULAR, IN T.r PP. $'ODLD NOT rErP PACE THAT EXPFCTEP CONSUMPTION FAT INPICATEr THAT INCOME ELASTICITIES 17TH IfCPASrS IN PRODUCTION, CROPS, AND NVGATIVE FOR SOME SECONDARY Oy ElMPND PrF HUMAN COKSUPTION DTMANr, FITHEP FOP EIRECT TIAT OVERALL EXPORT, IS NOT PROMISING. TOP INDUSTRIAL USE ANt OR VIABILITY OF PROMOTING INCREASED THEPEFORE, THE TM,OG-TERM AND SUSTAINA.LE WILLI DEPEVOIVTZRPRENGT.ENED PROJUCTION IS MOST IMMEDI.IELY WHILE T POJECT, ITSELF ;MpN. P4ODUCTION POTENTIAL CONC.PNEr VITH rEMONSTRATING lOCALLY, PBUPATFNS AND HOW IT CAN TE MARKETED IN A VEW ?ROGRAMS AND Pr:OGPAM WILL HAVE TO INCLUDE A NATIONAL DEMAND, INSURE PRICE IN- POLICIES NTEDED TO STIMULATE AND TO PRODUCERS AND MARKETERS, CI'NTIVFS AITPACTIVE ANr EXPORT. THE PP COVMRCIAL/INDUSTRIAL USES PO'OTE CONTEXT IN MIND, PERVAPS E pRrPARED VITH TEIS STUDIES TO EFOULD ADDITIONAL MACRO-ECONOMIC INCLUDI'G FUNDS FOR STRUCTURES THr. NATIONAL DEMAND/MARKETING r.rTE VIN! SIGNIFICANTLY IFCPrASEr TO .CONOMICALLY APSOR? p.FOUIVED CROPS. SUCH STUDIES AND SUPPLY OY SELECTED SECCJIART TO ANY DFCISION RECOIMrNDATIONS VILL BE ESSENTIAL THEIR SCALE TEN RESULTS AID LESSONS TO PDOPT 0' A NATIONAL KAIUPATENS. LTAFNEr IN TH PILOT OF PROPOSED PROJECT/IMPLEMENTATION 4. COMPLTYI T ATTENTION SHOULD FOR PP PREPARATION, SPECIAL ON STRATYT: SCOPE, (?) THE DUAL FOCUS BE GIVEN TO (A) GEOGRAPHIC CROPS TO BE MARgETING, (C) NUMBER OF PROrUCTION AND AND MANPO'ER AN' (ir) THE GOI INSTITUTIONAL IiCJ,UrED, FOR PROJECT SUCCESS: RYOUIREMENTS FSSFNTIAL T.E EXPERIMENTAL N;ATURE A. GEOGRAPPIC SCOPE: GIVEN SECTION 4. ALLUDED TO IN THE ISSUES OF TEF PROJECT, AND AS BE REDUCED TO J TY, PROJECT MIGET OF T V PID , TP; SCOPE OF THE' KABUBATENS WITHOUT COMPROMISI:G TERFE OP VOUR PILOT PROJECT THIS WOULD HLP SIMPLIFY PROJ,('TS PITPPOSE. TOTAL PROJECT COST, AND PFRHAPS REDUCE PROPOSED MP!AGEMENT WITH A REDUCTION IN ThE IF COMBINED TO IE DIRECTLY PAPTICULARLT AND FARM.R BENEFICIARIES NUMPER OF FFCTARES ON TE LATTER POINT, IN EACR PILOT KABUPATEN. AFFECTE" 70,000 HECTARES AND 3e,00 PID CITTS AN AV-RAGE OF EMPANSION TEE AREA. ASSUMING A GRADUAL FARMEPS IN EACY PILOT BY THE LAST TIAR COVEREr IN EACH KABIlPATEN, ON OF FTCTARFS PE MORE REALISTIC TO PLAN OF THE PROJIECT IT WOULD A CORP.ESPONDINGL' OF 01030 HECTARES AND P.R".A.PS A TOTAt TO BE INCLUrED:' PER NvIMPFR OF DIOECT BENEFICIARIES ON LOWFR EXPANSION VOULD THFN PELT PILOT XABSUPATEN. ADDITIONAL AREAS EFFECTS TO FARMERS IN NEIGHBORING ImIRYCT SPREAD ARE- ADOPTED OUTSIDE THE AS PROV'N pRODUCTION TECHNOLOGIES IMMEDIATE PROJECT AREAS. AND MARtETING THE INTERRELATIO1,S.IP 4. P. PRorUCTION TO ULTIMAIE PROJECI TWO ELEMENTS WILL BE INTEGRAL OF 710TST Y IN ITEM NO. 39 AEOVE, SUCCrSS. PS Al.,READ HIGHLISHTED SIAT! 2-e579 1/7 UNCLASSIFIED UNCLASSIFIED -;107 STATE 25e57 2/3
CONCERNS RELATED TO FACRO-LEVEL TH[RE ARE EPOAr WILL DEMANW/MARKFTMNG ANALYSIS FOR SECONDARY CROPS WHICH FAVE A DIRFCT .FFECT ON PROJECT VIABILITY AND SHOULD BE THE PP. AT TIE MICRO OR FIELD LEVEL IN THE ATDPFSSED IK ANALYTI- PILOT KABUPATFNS, THER1E MUST 07 COURSE ?E AN rAL BASIS IN THE PP THAT EXPECTED LOCAL PRODUCTION INCPRASES WIT.L BE MARKETED AT REMUNERATIVE PRICES YEARS OF TO GRONERS. WHILE PRIMAPY EMPHASIS IN THE EARLY THE PROJECT WILL LOGICALLY BE FOCUSED ON PRODUCTION pROFI"MS, THROUGH TEE INTRODUCTION OF SUCCESSFUL PRODUCTION T-CHNOLOGY APPROPRIATE TO LOCAL CONDITIONS, ATTENTION MUST BE GIVEN TO LOCAL DEMAND, SUFFICIENT PRODUCT PRICE,POST-HARVEST STORAGE, TRANSPORTATION, ANT OTHER MARKETING CONSTRAINTS WHICH WILL OUALITY THAT AFFECT INCENTIVES AND PROFIT. THE AAC THOUGHT INITIAL PROJECT PREFERENCE SHOULD BE GIVEN TO SECONDARY CROPS ALREADY HAVING ESTABLISHED VARFETING CHANNELS OF GOI AND THAT GPEAT CARE IS NEEDED IN THE AREA THAT A STEP- PRICE SUPPORTS AND SUBSIDIES. TO THE DEGREE APPROACH TO PRODUCTION AND MARKETING PROBLEMS CAN BY-STYP SIMUL- IS DESIGNED (RATHRER THAN WORKING ON ALL PROBLEMS TANEOUSLY), THIS MAY HELP SIMPLIFY PROJECT MANAGEMENT AET SHOULD BE SPELLED OUT IN THE PP. 4.C. NUMBFR OF CROPS: IN OUR JUDGEMENT TEE CROPS/CROPPING SYSTEMS SELECTED FOR EMPHASIS SHOULD FOCUS ON THOSE MOST FAVORABLE COST/BENEFIT PAYOFFS FOR PARTICI- WITH THF THE PATING FARMEES. WHILE IT IS UNDERSTOOD THAT LIMITING NUV'PTR OF CROPS MAT NOT BE PRACTICAL, THIS SHOULP BE COKSIPENED AS THE PP IS DEVELOPED. THE PP 4. r. INSTITU.TIONAL AND MANPOWER REOUIREMENTS: SHOULD INSURE THAT OPERATIONAL RFSPONSIBILITY FOR TEAM WITH THE PROJECT VILL REST AS COMPLETELY AS POSSIBLE CROPS A SINGLE AGEN'CT, THE DIRECTORATE GENERAL OF FOOD AS TESCRIBED IN THE PID, THE PALAWIJA PROJECT (TGFC). PROJECT OFFICE WITHIN THE DGFC IN JAKARTA WIILL MANAGE THE PPOVIDF TECHNICAL SUPPORT THROUGH A TEAM OF INDO- AND OF NESIAN ANI U.S. CONTRACT ADVISORS. WHILE THE ROLES OTHER PARTICIPATING AGE ,IES JUSTIFY THE NEEDFOR THE ADVISORY BOARD, ALSO DESCRIBED IN THE PID, IT PROJECT THE SHOULD BE CLEAR THAT DIRECT RESPONSIBILITY IS WITH TGFC. Al THE FIELD LEVEL, THE SUPERVISORY LINE OF RESPONSIBILITY BETWEEN EGFC IN JAKARTA AND THE VIELD EXTEFSION T7AMS, AND HOW THIS FITS WITH THE COORDINATING .ND ADMINISTRATIVE ROLE OF THE BUPATI, SHOULD BE FULLY FXPIAINED IN THE PP. REGARTING MANPOWER REOUIREMENTS, THF PPOJECT WILL BE MORE MANAGEABLE TO THE DEGREE THE 3P FIELD EXTENSION TEAMS MENTIONED IN THE THAT POSSIBLE PID CAN BE REDUCED TO FEWER TEAMS, IN LINE WITH FECTAPES MEFUCTION IN THE NUMBER OF PILOT KABUPATENS AND BY ThE PROJECT. APPROPRIATE CP'S OR COVENANTS COVERED OF SHOULD RE RECOMMENDED AS NEEDED TO ASSURE PROVISION SUFFICIENT OUALIFIED MANPOWER TO CARRY OUT THE PROJECT.
UNCLASSFIED STATE 25e57o 2/3 - 108 - UNCLASSIFIED STATE 25e570 f. STEr C.NTER DEVELOPMENT: THE APAC MAXIMUM PARTICIPATION IS CONCERNEP THAT AND INCENTIVES BE GIVEN TO PRIVATE SECTOR SEED THE INrUSTRT IN MEETING THE SEED RE- QUIRTEMNTS O THE PROJECT. INDUSTPT rOR CORN HAS A VERT STRONG COMPARATIVE AD- SUPSACTOR TO A PRIVATE ENTERPRISE MODE PLUS FOR THF WOULD PE A STRONG PPOJECT. THIS SHOULD BE FULLY ANi IF POSSIFLT DISCUSSED INCORPORATED IN THE PP. 6. COORDINATION WITH OTHER PROJECTS: SPECIFICALLY THE PP SHOULD CITE HO SECONDARY CROP RESEARCH CAPACITIES SUPPORTED THROUGH THE CURRENT SUMATRA AG. 0263) AND APPLIFD RESEARCH (497 AG. RESEARCH (497-0302) PROJECTS E COORLINATED WITH RESEARCH WILL CROP PLANNED FOR THE SECONtARY PROJECT, AS WELL AS AREAS OF OTHER COMPLEMENTARITT WITH EXISTIN'G AID P.OJECTS. A SUMMARY FINANCED ?T OTHER DONORS OF PROJECTS AFFECTING SECONDARY CROPS SHOULD ALSO BE PROVIDED. 7. IE: TECAUSE PESTICIrES ARE AMONG THE REOUIPED FOR CROP PRODUCTION, INPUTS THE THE APAC COULD NOT ACCEPT NEGATIVe DETERMINATION AS RECOMMENDED EN'IRONMENTAL PSSESSMENT IN THE PID. AN SHOULD BE PREPARED ,AS PART TEE PP PRESENTATION. OF 8. TITLE XII: THE PROPOSED PROJECT MAY BE RESFRVED IPPLEMINTATION THROUGH FOR A TITLE XII INSTITUTION PENrING RECOMMENDATIONS IN THE PP AND THE SU.SEOUENT APAC REVIEW. 9. PP TEAM: SUBJECT TO THE CAVEATS FOLLOWING PPELIMIN'ART IN ITEM NO. 2, AND DISCUSSION' BY ASIA/TR AND ASIA/PD WITH ERNESTO LUCAS, THERE IS SHOULD CONSENSUS THAT THE MISSION CONSI'ER FORMATION OF A PP ISSUES RAISED TEAM TO ADDRESS ALL PY APAC AND PREPARE A COMPREHENSIVE SUGGESTED TEAM PP. WOUlD CONSIST OF FIVE CORE INDIvIrUALS TOLLOWS: TEAM AS LEADER FROM ASIA/PD; AN AGRICULTURAL ECONOMIST COFCEPNED WITH MICRO-LEVEL PROrUCTION/MARVETING/ ECONOMIC ANALYSIS ON CONSUMPTION WITHIN THE PILOT AREAS; AN AGRONOMIST SELFCTED SEcONTART SKILLED IN A VARIETY OF KEY CROPS GROWN IN TROPICAL ENVIRONMENTS; SPECIALIST SVIT.LED IN A SENIOR AGRICULTURAL ORGANIZATIO. AND UNCLASSIFIED STATE 25f570 2/3 UNCLASSIFIED ; iU) STATE'?5e70 3/ul
MA ' TMENT OF RESEaRCh/EXTENSION SYSTEMS; AND AN VNTOMOLOGIST RFSPONSIBLE FOR PREPARING THE ENVIRONMENTAL ASSESSMENT. THEY WOULD WORK CLOSELY WITH MISSIOP STAFF INCLUrING LUCAS AND STEPANFK. STEPANEK WOULD BE -ESPECIALLY VALUAMLE IN ASSISTING MACRO-ECONOMIC ANALYSIS PS STATED IN 7TEM NO. 3. (NOTE: REGARDING ENVIRONMENTAL ASSFSSMNT, rR. CHARLES WARr, WHO DID EA ON PESTICIDES UST IN LUWU, HAS BEEN RECOMMENDED TO DO EA FOR PRE AND POST HARVEST LOSS CONTROL PROJECT. WE PROPOSE TEAT DR. WARD, DURING HIS TDY FOR ABOVE PROJECT, ASSESS WORT REQUIREMENTS FOR EA FOR SECONDARY CROPS TO SEE IT HE COULD UNDERTAKE BOTH EA'S SIMULTANEOUSLY. 10. WORK SCHEDULE: PLEASE ADVISE WHEN AND IF USAID rECIE!S TO PROCEED WITH THIS PROJECT. EARLIEST FEASIBLE DATES FOR PP TEAM UOULD BE JANUARY 1981. HAIG BT #6570
NNNN UNCLASSIFIED STATE 25E570 3/Z ANNEX J STATUTORY CHECKLIST
5C(2) PROJECT CHECKLIST
Listed below are statutory criteria applicable generally to projects under the FAA and project criteria applicable to individual funding sources: Developmer. Assistance (with a subcategory for criteria applicable only to loans); and Economic Support Funds.
CROSS REFERENCES: IS COUNTRY CHECKLIST UP TO DATE? HAS STANDARD ITEM CHECKLIST BEEN REVIEWED FOR THIS PROJECT?
A. GENERAL CRITERIA FOR PROJECT 1. FY 1982 Appropriatlon Act Sec. 523; FAA Sec. 634AI Sec. 53T(.
(a) Describe how The Comittees in appropri authorizing and ation of Senate and House appropriation, committees were notified of the project of Senate and House have through the FY 83 Congres or will be notified sional Presentation (ASIA been ) and concerning the proJec'; Prog:am, page 74 Congressional (b) is assistance within through,# (Operational Year Budget) Notifio.t~on. country or international organization allocation reported to Congress (or not more than S1 million over that amount)?
2. FAA Sec. 611(a)(l). Prior Yes. to obligation in excess of $i00,00, will there be (a) engineering, financial or other plans necessary to carry out the assistance and (b) a reasonably firm estimate of the cost to the U.S. of the assistance? legislative action 3. FAA Sec. 611(a)(2). If No further further legislative is required. action is required within recipient country, what is.basis for reasonable expectation that such action will be completed in time to permit orderly accomplishment of purpose of the assistance?
4. FAA Sec. 611(b); FY 1982 N.A. Aprooriation Act Sec. --If for water or -''er-related land resource construction, has project met the stanArds and criteria as set forth in the Principles and Standards for planning Water and Related Land Resources, dated October 25, 1973?
5. FAA Sec. 11(e). If H.A. pjo)ect is capital assistance (e.g., construction), and all U.S. assistance for it will exceed Sl million, has Hission Director certified and RegioRpal Assistant Administrator taken into consideration the country's capability effectively to maintain and utilize the project?
6. FAA Sec. 209. Is project No. susceptible to execution as part of regional or multilateral project? If so, why is project rot so executed? Information and conclusion whether assistance will encourage regional development programs. 7. FAA Sec. 601(a). Information and This project should directly z ----c..wiiether encourage (c).and (e). project will ea= r.= efforts of the country to: (a) increase the flow of international trade; (b) foster private initiative and competition; and (c) encourage development and use of cooperatives, and credit unions, and savings and loan associations; (d) discourage monopolistic practices; (e) improve technical efficiency of industry, agriculture and commerce; and (f) strengthen free labor unions. 8. FAA Sec. 601(b). Information and N.A. conclusions on how project will encourage u.s. private trade and investment abroad and encourage private U.S. participation in foreign assistance programs (including use of p'rivate trade channels and the services of U.S. private enterprise).
9. FAA Sec. 612(b), 636(h); Fy 1982 Appropriation Describe Normal project disbursement Act Sec. 507. assure this. steps taken to assure procedureq that, to the maximum extent possible, the country is contributing local currencies to meet the cost of contractual and other services, and foreign currencies owned by the U.S. are utilized in lieu of dollars. No. 10. FAA Sec. 612(d). Does tre U.S. own excess foreign currency of the coventry and, if so, what arrangements have been made for its release?
11. FAA Sec. 601(e). Will Yes. the project utilize competitive selection procedures for the awarding of contracts, except where applicable procurement rules allow otherwise? Act 12. FY 1982 Approriation Sec. 521. If assistance N.A. is for the production of any commodity for export, is the commodity likely to be in surplus on world markets at the time the resulting productive capacity becomes operative, and is such assistance likely to cause substantial injury to U.S..producers of the same, similar or competing commodity?
13. FAA 18(c) and (d). limited effect. pro)ect take This project Does the on the envirnment. Insofar into account the impact set a standard and as the projeat can and care onnatural the environmentresources? If of judicious §election of agricul ful use of all types crops, ntua prjestorcesogrf tural inputs for secondary project or program the GOI's efforts the affect it will support will significantly effective crop protection or the to insure impact. the global commons ith minimal environmental e.S.environmental environment, impact has an statement been prepared? If the project or program will significantly affect the environment of a foreign country, has an environmental assessment been prepared? Does the project or program take into consideration the problem of the destruction of tropical forests? 14. FAA 121(d). If a Sahel N,A, project, nas a determination been made that the host government has an adequate system for accounting for and controlling receipt and expenditure of project funds (dollars or local currency generated therefrom)?
B. FUNDING CRITERIA FOR PROJECT
1. Development Assistance Project Criteria a. FAA Sec. 102(b), 111, 113, 281(a). Extent to This project is designed to which activity will (a) benefit the rural poor. effectively involve the poor in development, by extending access to.. economy at local level, increasing labor-intensive production and the use of appropriate technology, spreading investment out from cities to small towns and rural areas, and insuring wide participation of the poor in the benefits of developmer.t on a sustained basis, using the appropriate U.S. institutions; (b) help develop cooperatives, especially by technical assistance, to assist rural and urban poor to help themselves toward better life, and otherwise encourage democratic private and local governmental institutions; (c) support the self-help efforts of developing countries; (d) promote the participation of women in the national economies of developing countries and the improvement of women's status; and (e) utilize 'nd encourage regional cooperation by developing countries? b. FAA Sec. 103, 103A, 104, 105, 106. Does the Yes. project fit the criteria for the type of funds (functional account) being used? c. FAA Sec. 107. isYe. emphasis on use of appropriate technology (relatively smaller, cost-saying, labor-using technologies that are generally most appropriate for the small farms, small businesses, and small incomes of the poor)? d. FAA Sec. 110(a). Will Yes. the recipient country provide at least 25% of the costs of the program, project, or activitiy with respect to which the assistance is to be furnished (or is the latter cost-sharing requirement being waived for a relatively least developed' country)? e. FAA Sec. 110(b). Will grant capital N.A. assistance be disbursed for project over more than 3 years? If so, has justification satisfactory to Congress been made, and efforts for other financing, or is the recipient country ,relatively least developed*? f. FAA Sec. 122(b). Does Yes. the activity give reasonable promise of contributing to the development of economic resources, or to the increase of productive capacities and self-sustaining economic growth? g. FAA Sec. 2.81(b). Describe extent to which This project supports GOIeff6rts program recognizes the to Improve quality of secondary particular needs, crops products.,. redur- spoilage, desires, and capaci'ies increase consumer & market of the people of the acceptance and increase prices. country; utilizes the and im: :ove nutritional status. country's intellectual resources to encourage institutional development; and supports civil education and training in skills required for effective parti;pation in governmental processes esential to self-government.
2. Development Assistance Project Criteria (Loans only) a. FAA Sec. 122(b,. GOI is able to repay the loan, conclusioncnformation onand capacity of the country to repay the loan, at a reasonable rate of interest.
b. FAA Sec. 620(d). If N.A.. assis~anlce is for any productive enterprise which will compete with U.S. enterprises, is there an agreement by the recipient country to prevent export to the U.S. of more than 20% of the enterprise's annual production during the life of the loan?. of 1981, Sec. 724 c. ISDCA(c) and (d). if for N.A. Nicaragua, does the loan agreement require that the funds be used to the maximum extent possible for the private sectorO Does the project provide for monitoring under FAA Sec. 624(g)?
for 3. Project Criteria Solely Economic support Fund a. FAA Sec. 531(a). %;ilI N.A. this assistance promote economic or political stability? To the extent possible, does it reflect the policy directions of FAA Section 102?
b. FAA Sec. 531(c). Will N.A. -- ssxstance under this chapter be used for military, or paramilitary activities? C. FAA Sec. 534. Will ESF N.A. eed to finance t~he construction of the - 118
of, or the supplying of fuel for, a nuclear facility? If so, has the President certified that such use of funds is indispensable to nonproliferation objectives? d. FAA Sec. 609. If N.A. cojuLoadties are to be granted so that sale proceeds wil: accrue to the recipient country, 'have Special Account (counterpart) arrangements been made? e. R . 133. Notwithstanding N.A. any te provision of this joint resolution, r'one of the funds appropriated under section 101(b) of thi!.Joint resolution may be available for any country during anX 3 month period beginning on or after October 1. 1982, inmnedi ately following the certification of the President to the Congress that such country Inm not taking adequate steps to cooper.ate with the United State. to prevent narcotic drugs and other controlled substances (as listed in the schedules in section 202 of the Compre hensive Drug Abuse and Prevention Control Act of 1971 (21 U.S.C. 812) which are produced, processed, or transported in nu.j co.try from entering the United States unlawfully. 119 ANNEX K
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REPUBLIC OF INDONESIA NATIONAL DEVELOPMENT PLANNING AGENCY JAKARTA. INDONESIA
No. :6V /B.V/4/1983 Jakarta, April 12..1983
U.S. Agency for InternationaL De-elopment c/o American Embassy Jakarta Attn : Mr. Jonathan L. Sperling Secondary Food Crops Re : Dvelopent ------
Dear Sir, with Direc- Having discussed the Secondary Food Crops Development Project and the torate General cf Food Crops, Directorate General of Cooperatives up to six National Logistics Agency (BULOG), we herewith request a loan of for the following million four hundred United States dollars (US$ 6.4 million) purpose and subject to the provisions hereinafter stated : and to improve 1. The purpose of this project i. tu ncrease the production peanut and the market system of secondary crops such ap corn, soybean, cassava in three provinces, Lampung, East Java and South Sui:avsi. (Kabupaten) In the first three years, the project covers three districts Kerja Pe and each district consists of two Rural Extension Areas (Wilaysh (Kecamatan). nyuluhan Pertani anWPP) covering twenty-one sub-districts sub In the next tvo years the project will cover the whole potential districts of the three provinces mentioned above. the Village Unit It is expected that through the developtnent of the project entity both as Cooperatives (KUD) could be developed as a viable econnmic of the project it production as well as a marketing unit. At the completion utilizing the is expected that all activities can be carried out by KUD period. existing facilities developed throughout the implementation
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REPCBLIC OF INDONESIA NATIONAL DEVELOPMENT PLANNING AGENCY JAKARTA. INDONESIA
of Food Crops assisted 2. The project will be implemented by Directorate General Directorate General of by Central Research Institute for Food Crops, BULOG, and Extension, Bank Cooperatives, Agency for Agricultural Education,Training Rakyat Indonesia (BRI) and the Agricultural Universities/Faculties. of US$ 12,691 million 3. It is estimated that the total coat of the project is is broken down as for five years starting from 1983/84. The cost approximated US$ 6,291 million follows : US$ 6,h million from proceeds of the loan and of the existing provided by the Goverrnent of Indonesia which mostly consists programs. facilities and other: being developed under the on-going use to finance counter- I. The proceed of USAID loan of IS$ 6,4 million will be part activities as tentatuely estimated as follows : line & evaluation, moni - Agricultural Universities (speclal studies base toring and policy and market development) US$ 968,000. and cropping sys - Directorate General of Food Crops : Technical Assistance tem/post harvest training : US$ 2,131,000. equipments - BULOG : Technical Assiathnce, training and post harvest (chanelled through BRI's Credit) : US$ 2,075,000. : Technical Assistance and training • - Directorate General of Cooperatives/KUD US$ 1,226,000.
Looking forward to your favourable consideration.
Sincerely yours,
01 F. . tsier Head of Bureau for Foreign Economic Cooperation