I~T I RETUJ1I TO l _-t DOCUMENT OF INTERNATIONAL BANK FOR R]ECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized Not For PublicUse Report No. PA-148A Public Disclosure Authorized YAQUE DEL NORTE IRRIGATION PROJECT DOMINICAN REPUBLIC Public Disclosure Authorized December 22, 1972 Public Disclosure Authorized Latin America and The Caribbean Projects Department Agriculture Projects Division This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. Currency Equivalents Except where otherwise stated all figures are quoted in U.S. dollars (US$) US$1 = RD$1 Weights and Measures 1 kilometer (km) = 0.62 miles 1 millimeter (mm) - 0.039 inch 1 meter (m) = 3.28 feet 1 hectare (ha) - 10,000 square meters - 2.47 acres 1 square kilometer (km2) _ 100 ha - 0.386 square miles 1 cubic meter (m3) - 1.31 cubic yards 1 million cubic meters 3 (Mfm) - 810 acre feet 1 metric ton (ton) - 2,205 lb 1 kilogram (kg) - 2.2 lb 1 ton paddy - 650 kg rice (white) Principal Abbreviations and Acronyms Used INDRHI - National Institute for Hydraulic Resources - Instituto Nacional de Recursos Hidraulicos IAD - Dominican Institute for Agrarian Reform - Instituto Agrario Dominicano CDE - Dominican Corporation for Electric Power - Corporaccion Dominicana de Electricidad BNA - National Agricultural Bank - Banco Nacional Agricola FETAB - Cooperative Union of Tobacco Producers - Federacion de Tabacalero INSPRE - National Price Stabilization Institute - Instituto Nacional de Stabilizacionde Precios ICO - InternationalCoffee Organization SOGREAH- Societe Grenobloise d'Etudes et d'Applications Hydrauliques, France CIEPS - Ingenieros,ConsF.tores y Proyectistas, Mexico Fiscal Year Jano4ry 1 - December 31 DOMINICAN REPUBLIC AN APPRAISAL OF THE YAQUE DEL NORTE IRRIGATION PROJECT TABLE OF CONTENTS Page No. SUMnARY AND CONCLUSIONS ........................ i-ii I. INTRODUCTION ......... .......................... 1 II. BACKGROUND....................... I II. THE PROJECT AREA ........................ , 2 General ................................... 2 Topography ................................ 2 Climate ................................... 2 Soils ........ ............................. 3 Land Tenure ............................... 3 Irrigation Facilities ..... ................ 4 Agricultural Production and Research ...... 4 Transportation and Marketing ..... .......... 4 Enviroinment and health ..... ............... 5 IV. THE PROJECT ........ .............................5 Description ......... .----------------- 5 Project Works ........... ................. 6 Water Supply, Demand, Quality and Rights .. 7 Engineering Design ........................ 9 Cost Estimates .......................... 9 Financing ............................... 10 Procurement ....... .........................10 Disbursements ............................. 10 Accounts and Audits ........................ 10 V. ORGA4IZATION AND MANAGEMENT..... ............... 10 Implementation of Project Works .... ....... 10 Agricultural Development ..... ............. 11 Project Coordination .... ............. 11 Extension Services ..... .............. 12 Agricultural Credit ..... ............. 12 Land Acquisition and Redistribution .. 13 Consulting Services ..... ............. 14 Training ...... ....................... 14 Operation and Maintenance .... ........ 14 Recovery of Costs ......................... 15 This report is based on the findings of an appraisal mission consisting of Messrs. A. Otten, M. Fireman, W. A. Lucas (IDA) and H. Nelson (Consultant). -2- Pa8e No. VI. PRODUCTION,MARKET PROSPECTS,PRICES AND FARM INCOME .. ........ I... 16 ProduCtion ................ .,........... 16 Market Prospects . ................. ,,. 17 Prices ...... ... *..... 17 Farm Income ....... ....................... 18 VII. BENEFITS AND JUSTIFICATION ..................... 18 VIII, RECOMM4NDATIONS..................... , . .... 19 ANNEXES 1. Soils 2. Existing Irrlgation Development 3. Selection and Formulationof the Project and Project Works A. Selection and Formulation B. Proposed Project Works 4. Water Supply, Demnd, Quality and Rights 5, Coat Estimates 6. Estimated Schedule of Expenditures and Disbursements 7. Consultant Services 8. Operation and Maintenance 9. Present and Projected Cropping Patterns 10. Marketing 11. Farm Budgets 12. Economic Analysis Chart Number 7217 - Construction Schedule Chart NMuber 6892 - Organization Map DOMINICAN REPUBLIC YAQUE DEL NORTE IRRIGATIONPROJECT SUMMARY AND CONCLUSIONS i. This report appraisesa project for irrigationdevelopment in the Yaque del Norte River valley, for which IDA assistanceof US$13.0 million is proposed. The Inter-AmericanDevelopment Bank (IDB) would provide an addi- tional US$13.0 million under a parallel financingagreement. The total loan would be US$26.0 million. The projectwould increase agriculturalproduction in the valley by replacingor improvingthe existingbut inadequateirriga- tion systems,which serve about 15,000 ha, and by bringing 13,500 ha of new land under irrigation. It would be the Bank Group's first irrigationde- velopment project in the DominicanRepublic and its second operation in the agriculturalsector. In 1971 IDA extended a credit of US$5.0 million for a livestockdevelopment project (Credit245-DO), which is underway at the present time and making satisfactoryprogress. ii. During recent years the increase in agriculturalproduction has barely kept pace with the growth in population. Demand for importedagricul- tural products has been increasingat a rate of 20% per annum since 1967, as productionhad dropped considerablyfollowing the 1965/66 disturbances, and Government is giving strong support to agricultureand irrigationdevel- opment in an effort to diversifyand increasedomestic food production. It is also striving to maintain continuedgrowth in the export of agricultural products,which constitutemore than 90% of total exports. Diversification of food crops, which is greatly aided by irrigation,is also urgently needed to improvenutritional standards in the country. iii. The valley of the Rio Yaque del Norte, in the northwesternpart of the country, is one of the Republic'smost importantareas for agriculture. With relatively good soils and an adequatewater supply, irrigationhas been practiced in the valley since 1920 but existing systems in the project area are inadequateand command only about one half of the potentiallyproductive land. Furthermore,the lack of suitabledrainage systemshas created saline conditionsin an area of about 8,000 ha which have seriouslyreduced the productivecapacity of these lands. The proposed project would provide a modern irrigationand drainage system for 23,000 ha on the right bank of the river and an improvedwater supply to 4,500 ha under an existing system on the left bank. Works would include a diversionand desilting structure, irrigationand drainage systems, and on-farm development. The project would also includesupport for agriculturalextension, research and credit and provide equipmentand facilitiesfor operationand maintenance. Concurrently with implementationof the project, Governmentwould carry out an agrarian reform program for acquisitionand redistributionof land according to a plan to be submittedto IDA. Under recentlyapproved legislationit is estimated that between 7,000 to 10,000 ha in the project area would be expropriated and divided into small holdings whereby about 2,000 to 2,500 presently landless familieswould receive land titles. - ii - iv. The estimatedproject cost is US$39.0 million, with an estimated foreign exchange component of US$23.0 million, or 59% of the total. IDA anc' IDB financingwould cover all foreign exchange expendituresand US$3.0 mil- lion of local currency costs on civil works. The balance of local costs would be financed by Government. The total cost of civil works, on-farm works and equipment to be put out to internationalcompetitive bidding would be US$26.0 million. Land acquisition and settlement (US$3.2 million), build- ings (US$0.2 million), consultant services (US$3.1 million) and contingencies (US$6.5million) account for the balance of project costs. v. The Instituto Nacional de Recursos Hidraulicos (INDRHI) would be responsiblefor implementingthe project and for operation and maintenance. Due to limitationsof staff, INDREI plans to engage a consultantfirm to take responsibilityfor engineeringand supervisionof constructionbut it would retain authority for final approval of tender documents and construction contractsand for managementof funds. The Ministry of Agriculturewould have primary responsibility for coordinating the extension, research, and credit activitieswhich would be expanded to meet the project needs. T1'ls would be accomplishedthrough a coordinatingcommittee that would include representatives from Banco Nacional Agricola (BNA), INDRHI, and the Instituto Agrario Dominicano (IAD). Technical assistance for this phase would be provided by a consultantfirm specializingin agriculture. The Tobacco Institute,the Rice Growers Associationand commercialprocessing compani.es in the area would also participatein providingresearch and extension assistance. vi. At full development in 1985, the net annual value of producLioz,, primarily from rice, sugarcane and tobacco, is expected to reach RD$ 10., million, compared with an expected level of RD$ 2.8 million without the project.