World Bank Documentdocuments.worldbank.org/curated/en/295231467995361420/pdf/multi... · indebtedness and fundamental land reform and by acting in a ... From 1968/69 to 1975/76 agricultural

Document of

The World Bank

FOR OFFICIAL USE ( 6

Report No. 2297-AF

STAFF APPRAISAL REPORT

AGRICULTURAL AND RURAL DEVELOPMENT PROJECI

DEMOCRATIC REPUBLIC OF AFGHANISTAN

May 8, 1979

Projects DepartmentEurope, Middle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Afghanis (AF) 40 = US$1

AF1 = US$0.025

WEIGHTS AND MEASURES

1 hectare (ha) = 10,000 m2= 2.47 acres = 5 jeribs

1 jerib = 2,000 m2 = 0.2 ha = 0.49 acres

I kilometer (km) = 0.624 miles

1 sq. kilometer (km2) = 0.386 sq. miles = 100 ha

1 kilogram (kg) = :2.2046 pounds

I metric ton (ton) = 1,000 kg = 2,204.6 pounds

1 liter = 1.057 US quarts

1 million cubic meters 1 Mm3

FOR OFFICIAL USE ONLYABBREVIATIONS

ACCSI Afghan Cartographic and Cadastral Survey Institute

ADT Average Daily Traffic

AFC Afghan Fertilizer Company

AgBank Agricultural Development Bank of Afghanistan

DCD Department of Cooperative Development

DRA Democratic Republic of Afghanistan

EC Executive Council of PRDC

EHD Environment Health Department

ERIC Experimental Range Improvement Center

FAO Food and Agricultural Organization of the United Nations

HLDC Herat Livestock Development Corporation

IDA International Development Association

IFAD International Fund for Agricultural Development

MA Ministry of Agriculture

MET Monitoring and Evaluation Unit

PACU- Program for Agricultural Cooperatives and Credit in Afghanistan

PRDC Provincial Rural Development Council

RDD Rural Development Department

PCCRD President's Council for Coordination of Rural Development

RPIU Regional Planning and Implementation Unit

SIDA Swedish International Development Agency

UNDP United Nations Development Program

UNICEF United Nations Children's Fund

USAID United States Agency for International Development

WAPM Ministry of Water and Power

WFP World Food Program

WHO World Health Organization

| This document has a restricted distribution and may be used by recipients only in the performanceIof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

TABLE OF CONTENTS

Page No.

I. THE SECTOR ............................................. 1

A. Introduction ....................................... 1B. Agricultural and Rural Sector ...................... IC. Issues in Agriculture .............................. 3D. Previous Bank Group Assistance ..................... 5

II. THE PROJECT AREA ....................................... 6

A. Physical Environment ................................ 6B. Population ......................................... 8C. Economy ............................................ 9

III. DEVELOPMENT INSTITUTIONS ..... ................ 11

A. Provincial Administration ......................... 11B. Ministry of Agriculture (MA) ....................... 12C. Rural Development Department (RDD) .... ............. 12D. Agricultural Development Bank of Afghanistan

(AgBank) ........................................... 13E. Afghan Fertilizer Company (AFC) .................... 15F. Ministry of Water and Power (WAPM) .... ............. 15G. Environmental Health Department (EHD) ............... 15H. Afghan Cartographic and Cadastral Survey

Institute (ACCSI) .................................. 16I. Department of Cooperative Development (DCD) ........ 16

IV. THE PROJECT ............................................ 17

A. Introduction ....................................... 17B. Project Objectives ................................. 18C. Brief Description .................................. 18D. Project Detailed Features .......................... 20E. Cost Estimates ..................................... 30F. Financing .......................................... 31G. Procurement ........................................ 33H. Disbursements ...................................... 33I. Accounts and Audit ................................. 34

This report is based on the findings of an IDA Appraisal Mission toAfghanistan in June/July 1978 comprising Messrs. V.A. Ashworth, P. Aklilu,H. von Pogrell (IDA), and M. Rahman, and P. Ryan (consultants) and a follow-up mission in January/February 1979, comprising Messrs. V.A. Ashworth andP. Aklilu.

Table of Contents (Continued) Page No.

V. ORGANIZATION AND MANAGEMENT ............................ 35

A. Introduction ....................................... 35B. Rural Development Department - Regional Planning

and Implementation Unit (R])D-RPIU) .... ............. 36C. Provincial Rural Developmenlt Councils .... .......... 38D. Project Implementation ............................. 38E. Training ........................................... 40F. Monitoring and Evaluation .......................... 41

VI. BENEFITS AND JUSTIFICATION ............................. 42

A. Targeted Beneficiaries and Financial Analysis ....... 42B. Production .......................................... 44C. Marketing ........................................... 46D. Prices .............................................. 48E. Economic Analysis .......... ......................... 48F. Cost Recovery and Fiscal Irmpact .................... 50G. Risk ....... ......................................... 52H. Environmental Impact ....... ......................... 53

VII. RECOMMENDATIONS ................ ......................... 53

ANNEX 1: Supporting Tables and Charts

TABLES1. Investment and Operating Costs by Component and Year ....... 61

Appendix 1, Project Cost by Year and Category .... .......... 62Appendix 2, Project Cost by Component and Category -Base Cost, Prices Contingency and Total .................. 63

2. Project Financing Table by Component ........................ 643. Project Financing Table by Category . ........................ 654. Technical Assistance - Consultant Services ................. 665. Financial and Economic Prices .............................. 676. Summary of Selected Financial Models for Project

Investments ................................................ 687. Incremental Staff Housing, Buildings, and Vehicles

to be Project Financed ..................................... 698. Estimated Schedule of Disbursements ........................ 709. Economic Benefit and Cost Streams .......................... 71-74

CHARTS1. Selected Indicators for Monitoring and Evaluating

Agricultural Development Projects .......................... 75-772. Present Government Organization ............................ 783. Rural Development Department Regional Planning and

Implementation Unit. Proposed Organization Chart .......... 794. Rural Development Department - Organization Chart .......... 805. Project Implementation Schedule ............................ 81

Table of Contents (Continued) Page No.

ANNEX 2: Statements of Expenditure .............................. 82-83ANNEX 3: Selected Documents and Data Available in the Project

File ..... 84-85.

MAPS IBRD 14011RIBRD 13204R1

I. THE SECTOR 1/

A. Introduction

1.01 Project appraisal was undertaken shortly after the recent Governmentchange. The two-year old Seven-year Development Plan has been suspended andThe Democratic Republic of Afghanistan (DRA) is currently re-examining sectoralpolicies and investment priorities, including the preparation of a new Five-year Development Plan which is expected to be finalized during 1979 and whichis expected to give the agricultural sector high priority. The Government hasdemonstrated the importance it attaches to agriculture and the alleviationof rural poverty by passing important Decrees on the alleviation of peasantindebtedness and fundamental land reform and by acting in a forthright mannerto implement them.

B. Agricultural and Rural Sector

1.02 Role in the Economy. Afghanistan has an estimated population ofabout 14-15 2/ million of which about 85% including about 1.5 million nomadsis rural, and 15% urban. Agriculture accounts for about 60% of export earn-ings and employs about 53% of the total labor force estimated at 4.7 million.From 1968/69 to 1975/76 agricultural production grew at an annual compoundrate of about 1.9%, less than the annual population increase of about 2.2%.Agriculture's contribution to total GNP in 1975/76 constant prices has droppedfrom 65% in 1968/69 to 57% of GNP (1975/76). Whilst this trend of gradualstructural change is consistent with growth patterns in other developingeconomies, in Afghanistan it is due largely to sluggish agricultural develop-ment rather than dynamic growth of other sectors. Consequently, over 6 mil-lion rural people (about 40% of total population) continue to live in absolutepoverty with a per capita income of about $85 or less.

1.03 Crop Production and Cropping Pattern. Agriculture is largelysubsistence, with wheat the predominant crop occupying about 70% of totalcereal crop land and some 60% of total cultivated area (4 million ha). Othercrops include maize, barley, and rice, and a wide variety of fruits andvegetables and industrial crops, including cotton and sugar beet. Averageyields for selected agricultural products compared with "better farmer"performance are roughly as follows:

1/ For detailed discussion on the Agricultural Sector see IBRD reportslisted as Nos. 1, 2, 3, and 4, Annex 3, Section A.

2/ Source: 'Journey to Economic Development', IBRD No. 1777a-AF, March1978.

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Average Yield for Selected Crops

(tons per hectare-irrigated)

1968/69 1975/76 Better Farmer

Wheat 1.3 1.7 3.0Maize 1.5 1.6 4.0Rice 2.0 2.1 5.0Seed Cotton 1.3 1.4 4.0Potato 10.0 11.4 16.0Grape 5.5 6.0 14.0

Livestock

Milk (1 per/cow/yr) 540 540 1,500

Afghanistan is presently pursuing a policy of wheat self-sufficiency asopposed to 'food security'. 1/ It is virtually wheat self-sufficient in yearsof 'normal' precipitation at current per capita consumption levels (155 kg)and with present population. From 1972/73 to 1976/77 recorded wheat importsaveraged 43,000 tons annually, ranging from 2,500 to 138,000 tons. Crop andlivestock yields have increased very slowly due largely to traditional farmingsystems and cultural practices including animal husbandry which, although welladapted to local conditions have not given way to modern techniques. Althoughgrowth in fertilizer use has been impressive, no more than 15% of the totalcropped area receives fertilizer, with total usage in 1977/78 amounting to100,000 tons, representing about 26 kg per ha cropped which is very lowcompared to neighboring developing countries.

1.04 Until 1978 Government policies had not substantially altered theskewed income distribution which is strongly influenced by land ownership,access to credit, support services, and irrigation water availability. Therural population dispersed among 20,000 viLlages includes an estimated 1.2million farm families with holdings varying from 0.5 to 6 ha of cultivableland and averaging about 3.5 ha. Available data suggest that about 80% ofland-owners owned less than 3.9 ha while some 2% held about 40% of totalcultivable land. Perhaps 30 to 40% of land cultivated was farmed by land-less sharecroppers who probably constitute a high proportion of rural poor.Equally important is the water rights issue. By tradition, those at the headof irrigation canals are entitled a water share usually much in excess oftheir needs, thus depriving farmers on the lower reaches.

1/ Wheat 'self-sufficiency' implies satisfying national demand, even in pooryears, from local production. 'Food security' would envisage meetingdemand from local production plus storage accumulated in surplus yearsand from strategic imports. A Wheat Production Project presently being

appraised would assist Afghanistan to achieve food self-sufficiency.

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C. Issues in Agriculture

1.05 Land and Water Utilization. Afghanistan is a land locked countrywith about 85% of the total land area of 65 million hectares unsuitable forcultivation. Arable land accounts for about 8 million hectares, but due towater shortage only about 4 million hectares are annually cultivated and ofthis only some 2.8 million hectares (70%) are irrigated. The arid, conti-nental climate poses a major obstacle to agricultural development. Agricul-tural production relies heavily on irrigation from river flows, snow melts,springs, karezes 1/ and groundwater. Although rainfed land accounts forabout 37% of total area cultivated, its contribution to total agriculturalcrop production is less than 20%. While the potential for increased agricul-tural production is high, the present inefficient use of water remains asevere constraint. The issue of water distribution, which has massive socialand economic dimensions, must be faced if Afghanistan is to fully exploit thelatent potential of its land and people. DRA recognizes this and DecreeNo. 8 provides a legislative basis for more equitable water distribution byrequiring that in future, water be distributed in accordance with land ownedand crops grown. Implementation however is presently impractical and willrequire detailed research and analysis before forward movement can be made.Furthermore while crop yield per hectare is an important efficiency indicator,the critical coefficient is yield per water unit used. High priority shouldbe accorded farm systems research in this field.

1.06 Land Distribution and Tenure. Rural income and poverty are closelyrelated to irrigated land ownership. In Ghazni per capita irrigated land isthought to be about 1.07 jerib 2/ with at least 60% of rural population inabsolute poverty. By comparison, per capita irrigated land in Kunduz is 2.54jerib with about 20% of rural population living in poverty. The land tenuresystem has, in the past, been fundamentally feudal, with distribution skewedin favor of some 20% of landowners owning about 70% of total irrigated land,and 60% less than one hectare. Landlord/tenant relationships are tradition-ally defined in the former's favor. In 1978 DRA introduced Decree No. 8 whichwill abolish the skewed land distribution. The Decree places a ceiling of30 jeribs (6 ha) of first grade irrigated land (orchard and vineyard) withappropriate adjustments for lower grades, which can be owned by each person.All land in excess of the prescribed area is confiscated without compensationand is to be distributed free to landless farmers and 'petty landowners 3/' onthe basis of a maximum of 5 jeribs (1 ha) of 1st grade land each. DRA expectsin excess of 3 million jeribs (600,000 ha) 4/ 1st grade land equivalent to be

1/ An ancient system of tunnels which tap groundwater in mountain fans.

2/ 1 Jerib = 0.2 ha.

3/ A 'petty landowner' is a farmer who owns less than 5 jeribs (1 ha) of 1stgrade land.

4/ Landless farmers are to receive not less than 5 jeribs of 1st grade land;'petty farmers' may receive something less so as to make the area owned5 jeribs of 1st grade land equivalent.

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distributed to about 680,000 'agricultural households', and has proceeded tospeedily implement the law, expecting to complete land distribution by mid1980. DRA is aware of the need to provide support services (credit, exten-sion, production inputs) to new settlers, and has taken steps to coordinatedepartmental and agency activities and mobilize personnel resources to anextent never before seen in Afghanistan. However administrative weaknessesand the operational capacity of many departments may prove a severe bottle-neck. Without prompt adequate support to settlers, the bold land reformprogram could result initially in lower agricultural production and muchpersonal hardship. The land issue also includes the rangelands which involvesthe nomads and transhumants in a delicately balanced complex of social, eco-logical, and economic factors; and embraces the fundamental issue which hasso far defied solution, of community ownership and use of land and individualownership of livestock.

1.07 Agricultural Extension. The present ratio of extension agent tofarmers is inadequate, varying between about 1:400 to over 2,000. Totalextension staff number about 3,300 and while the basic extension servicestructure exists, its performance has been unsatisfactory. Contributingfactors include cumbersome, highly centralized administrative procedures,inadequate operating program and training, weak research backup, and poorstaff facilities (housing, transport, equipment) in rural areas. Furthermore,whilst the extension service contains a number of well trained, qualified andcapable people, these are underutilized to an extent which the country canill-afford. Extension and research are separated into different departmentsand development and dissemination of new technologies is weak. Coordinationwith other agricultural agencies (Agricultural Development Bank of Afghanistan(AgBank), Afghan Fertilizer Company (AFC)) could be greatly improved. Theabsence of a dynamic extension service is probably reducing the effectivenessand hence the economic returns of other major investment programs in creditand irrigation. DRA recently requested IDA assistance for establishing a moreeffective service.

1.08 Credit. 1/ Informal credit markets are still predominant, butrecent growth of institutional credit facilities and use through AgBank andcommercial banks has been encouraging. AgBank has 13 branches and 4 sub-branches and with UNDP/IDA/DRA assistance has evolved as one of the strongestand best managed institutions in Afghanistan. The number of loans disbursedhas grown from 44 in 1969/70 to 81,000 in 1976/77. Recently loans to coopera-tives has been a major growth area but AgBank is still probably assisting nomore than about 8% of total farmers. Security requirements are still weightedin favor of registered land owners although some progress towards relaxationhas been made recently. A recently issued Decree (Number 6) has the effectof reducing private land mortgages held on 2 ha or less, and in the case of

1/ For a detailed discussion on AgBank see IBRD report 1490-AF 'Appraisal ofThird Agricultural Credit Project', and Project Performance Report 'FirstAgricultural Credit Project' (Credlt 202-AF) - Report No. 2111, June 24,1978.

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tenants and sharecroppers waiving all debts to landowners. 1/ It is too earlyto judge the effects of this measure, but an attempt by AgBank or commercialbanks to fill any gap resulting from a downturn in traditional money lendingactivities would require resources beyond those presently available to theformer. In an endeavor to meet the situation DRA is establishing village'farmers unions' which will mobilize savings and lend to individuals forpersonal use. The major issue is access to credit. Cooperative lending willimprove this but AgBank needs to appreciate that the best security is soundappraisal, good loan supervision, and satisfied customers, while liberaliza-tion advocates need to understand that institutional credit discipline amongfarmers is essential if AgBank is to survive as a viable financial institutionand provide the credit services the nation needs.

1.09 Commitment to Rural Development. The key to alleviating povertylies with devising and successfully implementing integrated rural developmentprograms which attack the problem of providing adequate basic human needs. Inthe past too much emphasis has been placed by Government on 'visible' projects.The technology is available with some local adaptation, which could substan-tially increase most agricultural crop production thereby raising familyincomes and providing basic food security. But the technology and essentialsupport services must be extended to the farmers through decentralized agri-cultural and rural development programs. Rural Afghanistan desperately needsa deep Government commitment to attacking the basic elements of poverty,devising programs relevant to village life and needs, and a will to buildmutual trust and respect with the people. The new Government has indicated abetter understanding of these needs and the proposed project would be a firststep towards application.

1.10 Institutional Issues. Agricultural and rural development is con-strained by a number of complex interrelating factors, but the overridingissue in the past has been Government's inability to establish a satisfactorypolicy framework and to provide effective supporting services. The operatingframework including administration, financial and staff management has beeninadequate to meet the needs of dynamic agricultural development programs.Staff morale and motivation has been low and underutilization common. Ageneral staff reluctance to take field assignments is understandable as thereare few material rewards where facilities and transport are poor, good housingdifficult to obtain, and where support and interest from the center is lessthan desirable.

D. Previous Bank Group Assistance

1.11 IDA's assistance to agriculture with credits totalling US$109 mil-lion, has hithertho concentrated on provision of credit for farm inputs,promotion of livestock and fruit and vegetable production and constructingnew irrigation systems. Since 1969 IBRD has been the executing agency for a

1/ Government has indicated that the Decree has no similar effect on insti-tutional credit.

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UNDP financed technical assistance project to AgBank. The First AgriculturalCredit Project (202-AF, US$5 million 1970) was successfully completed in 1976with the exception of the minor irrigation rehabilitation component. Underthe Second Project (1975, 539-AF, US$13 million), AgBank has successfullyexpanded its short term lending program, improved staff quality, and furtherstrengthened institutional aspects. A Third Project (721-AF US$12 million 1/)commenced in 1977, will expand on existing operations. Performance underthese projects has generally been satisfactory. In livestock, IDA has fi-nanced Livestock I (1973) and II (1976) Projects (375-AF, US$9 million and649-AF, US$15 million) designed to capitalize on Afghanistan's quality sheepand develop an export meat industry with supporting production and ruralinfrastructural components. The projects which include assistance to nomadicgroups were seen as offering the opportunity to initiate 'self-sustaining'rural development. Due to unsatisfactory administrative procedures, inexperi-enced management, and absence of a commercial approach performance has beenbehind schedule. A joint IDA/DRA review recently confirmed the Project'sviability but recent developments have slowed project implementation. Inirrigation IDA is financing Khanabad I (1971) including a supplementary credit(1976), and II (1978) Projects (Credit 248--AF, US$5 million plus US$10 millionsupplementary and 778-AF, US$22 million) and designed to modernize irrigationof 30,000 hectares. Khanabad I is nearing completion, while Khanabad II isjust starting. A fruit and vegetable export project (Credit 779-AF, US$18million) has just become effective and a wheat production project is currentlyunder appraisal. The Second Education Project (Credit 674-AF, US$6 million)provides assistance for expanding agricultural high school education; a ThirdProject (Credit 893-AF, US$21 million) incLudes a preinvestment design forextension training and resource development facilities; and a Fourth Projectabout to be appraised would expand extension and farmer training facilities.

II. THE PROJECCT AREA 2/

A. Physical Environment 3/

2.01 Ghazni and Wardak were selected from a group of provinces includingSamangan, Bamyan, Zabul, Uruzgan and Ghor with a total population of about3.3 million and cultivated area of roughly 780,000 ha. Selection criteria

1/ Plus C$5 million from the Canadian International Development Agency.

2/ During negotiations the Afghan Delegation advised that the provincialorganization had recently changed; Wardak province has been absorbedinto Kabul; a new province Paktika, has absorbed part of SouthernGhazni; the project area remains unchanged.

3/ See page 10, Table 1: 'Socio-Economic Data and Indicators', for projectarea.

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included: (a) access from Kabul which permits utilization of existing infra-structure, (b) financial constraints in meeting the entire regional require-ments, (c) organization and management limitations, (d) potential for agri-cultural and livestock production, and (f) a high percentage of populationliving in absolute poverty. The provinces include about 10% of national popu-lation, 6% of total land area, 6% of total land cultivated, 5% of nationalirrigable land, 5% of the nation's sheep and goat population, 1% of totalavailable grazing land and only 2% of national registered motor vehicles.Three agro-ecological zones are represented in the two provinces. A north-west zone (48%) includes mountains up to more than 4,500 meters with narrow,intensively irrigated, heavily populated valleys among vast grazing lands.The central zone (27%) includes largely flat semi-arid areas with lesssevere winters, moderate elevation of 1,900 to 2,300 meters, less precipita-tion (220 to 350 mm) and insufficient water resources for irrigating thelarger areas of comparatively good soils. The southern zone (25%) is morearid with low population density and is used extensively by migrating nomadicpastoralists and transhumants 1/ for livestock grazing. Climate is semi-aridcontinental with long cold winters, dry summers, and precipitation whichvaries considerably from year to year and is strongly influenced by altitude.About 92% of precipitation occurs from December to June and a high proportionfalls as snow. At Ghazni town (elevation 2,200 meters) precigitation is 290mm and some 145 days annually experience temperatures below 0 C. The severeclimatic conditions limit crop rotations and production. However, where watersupply is adequate climatic conditions favor seed potato production andtemperate fruits and vegetables. The total land area of Ghazni and Wardakprovinces is estimated at 4.3 million hectares of which 227,000 ha (5%) iscultivated, 464,000 ha (11%) is designated pasture, 29,000 ha (0.7%) forest,and the balance of 3.5 million ha (83%) mountains and desert. Soils aremainly of alluvial origin, light textured with generally good external andinternal drainage. The main differences occur according to the localintensity of irrigation and inspite of soil and topography limitations,about 350,000 hectares have been classified as Class 2 and 3 lands.

2.02 No reliable statistics are available on farm size distribution andaverage holding size, but the number of large holdings appears to be lessconcentrated than in some other provinces. The average-sized holding isabout 1.6 hectares; but is probably a little higher in Ghazni. Land ownershippattern and landlord-tenant relationships are traditional. About 53% ofcultivated land in Ghazni is owner-operated, 37% share cropped, and about 10%farmed by large landlords. Most holdings are highly fragmented. Sharecropping comprises two forms, "Buzgar" and "Keshtegar". Under the latter thesharecropper provides all inputs except land and water, and receives 50% ofthe crop, while the 'Buzgar' provides only labor and receives 20%. Irrigationwater is the most scarce resource. Traditionally agriculture depends onnumerous small irrigation systems comprising mainly river diversions and

1/ Nomads are defined as people who live permanently in tents with nofixed abode. Transhumants include those who have a permanent residencebut who spend some months in tents migrating with their flocks.

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karezes. Total irrigable land area is estimated at about 143,000 hectares;63% by river diversion, 18% from karezes, 16% from springs, and about 3% fromgroundwater exploitation including wells. Irrigation system characteristicsinclude considerable water and labor wastage due to frequent damage to the

farmer-constructed diversion structures and upstream canal sections close toriver banks; canals not having gated controls at their intakes and thus being

subject to frequent high siltation during floods; and wild flooding irrigationwith low efficiency (less than 40%). Also the high cost of kareze maintenancetogether with their year-long uncontrolled discharge results in high waterwastage.

2.03 One asphalt road, about 230 km long and linking Kabul to Maidan andGhazni and continuing south to Kandahar, exists in the project area. Unpavedroads link the two provincial capitals with about 31 district centers and themost important villages. About 366 km of Secondary and tertiary roads inWardak and 2,550 km in Ghazni exist, some :in reasonbly good condition, butothers, mostly in mountainous sections, are little more than tracks. Manyroads cross canals without culverts. Including Ghazni town, reticulated watersupplies do not exist; as a result, the same surface water sources are usedfor drinking, stock watering and irrigation, and are usually heavily polluted.There is no electricity supply to the two provinces except for Ghazni town,which is served from the power grid. Kerosene is widely used for lightingand operating pumpsets. Wheat mills are either water powered, or operate bydiesel engines. The most common cooking and heating fuels are dried animalmanure and brushwood; a critical shortage of domestic fuel wood exists.

B. Population

2.04 The population of Ghazni and Wardak provinces is estimated respec-tively at about I million and 370,000, of which the rural population is about1.2 million (86%), and consists of 142,000 families inhabiting about 3,000villages. Population density is closely related to water availability butaverages about 33/km2, which is 50% higher than the national average of about22/km2. Although largely illiterate, farmers are capable, hard working, andrespond to innovations provided risks are minimized and the technology isproven. Nomadic pastoralists whose number is not known are important to thearea's economy. The mountains to the north and west are important summergrazing areas while large numbers of transhumants also spend the summer inKatawaz. Many nomads and transhumants migrate outside of the project area forthe winter. National annual population growth rate is estimated at 2.2% andis probably about the same in the project area. With increasing population,fragmentation of holdings is continuing and forced migration to urban areas orinto limited non-farm employment opportunities is also increasing. Except forthe narrow valleys of mountainous regions the problem is shortage or scarcityof water but not land. With available water supplies and traditional wastefulwater use practices, production in the irrigated areas has already reachedlevels that are nearly maximum within the limits of technology known or avail-able to these farmers. Increasing population, therefore, results in eitherurban migration or greater poverty. More recently, many unemployed have

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migrated seasonally to oil rich neighboring countries but this cannot berelied on as a permanent source of employment. Thus, an improvement in pro-ductivity and utilization of irrigation water is a vital necessity if evenmeager rural living standards are to be maintained.

2.05 The population is almost entirely Muslim and the two dominantlanguages Pashtu and Dari are spoken by most. The basic unit of Afghan lifeis the village, which may range in size from as few as 10 families to as manyas 500. Perhaps the largest number of villages falls into the range of 40to 80 families. Villagers are linked by ties of marriage and kinship. Inthe past larger landowners have been very influential. Village life centersaround agriculture, which is at the mercy of precipitation. In dry years thewheat crop is only one-half of that in the average year, and in good yearsit doubles. Health of most inhabitants is poor as at least 80% of householdsdrink polluted water. Common ailments include anaemia, major digestiveproblems, respiratory problems, and a high incidence, particularly amongchildren, of conjunctivitis. While the project area includes about 10% ofthe national population, basic health centers and related facilities includingpharmacies and hospitals are proportionately less; there are only 4 hospitalsand 9 basic health clinics. Few villagers are literate; only about 6% of thetotal national primary school enrollments (654,000) are recorded in the proj-ect area. Similarly, middle school enrollments amount to about 6% of thenational total. Of the 7 to 12-year age group, only about 40% attend primaryschool in Wardak, and 10% in Ghazni. No education facilities are availablefor nomads. Motor vehicle registration including cars, trucks, buses, andofficial vehicles total only 1,028 or 2% of the national total.

C. Economy

2.06 Population of the two provinces represents about 10% of the nationaltotal and land about 6%. Similarly, the total land area cultivated (227,000hectares) represents about 6% of the total land cultivated in Afghanistan (4million hectares). Total irrigable land (143,000 hectares) constitutes about5% of the land area which again is comparable to the national figure of about4%. Of this irrigable land, about 80% is actually irrigated, of which no morethan 75% would be irrigated in any one year. Wheat is the predominant cropwith a total area of about 134,000 hectares representing about 6% of the totalannual national area. At 1.3 tons per hectare, yields are low in Ghazni but at1.6 tons are better in Wardak, where water supply is more reliable. Potatoesare an important crop constituting about 15,000 hectares or 75% of the totalannual area sown to potatoes in Afghanistan. Potato yields of 10-12 tons perhectare are low and reflect poor seed quality and low fertilizer use. Othercereals including maize and barley are relatively unimportant, constitutingonly 1% of the national total at about 7,400 hectares. Fruits (apricots,almonds, apples, grapes) are important. Total area under fruits, vegetables,and forage is said to be about 20,000 hectares or about 5% of the nationaltotal of 373,000 hectares. Wheat production does not meet consumption plusseed demand in the Project Area. Probably about 30-40% of the annual wheatproduction of around 180-190,000 tons is traded annually. Potato production

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Table 1: Socio-Economic Data and Indicators/l

Ghazni Wardak Ghazni-Wardak

National Actual % of National Actual 2 of National Actual % of National

A. DEMOGRAPHIC

1. Total Population('000) 14,000 1,010 7 372 3 1,382 10

2. Population Density(pop/km

2) 22 31 - 38 - 33 -

3. Rural Population 11,500 848 7 316 3 1,162 104. Rural Population as

% of total 82 84 - 85 - 84 -

5. Number of Villages 20,000 2,040 10 972 5 3,012 156. Total Labor Force 4,710 n.a. n.a. n.a. -

7. % in Agriculture 53 n.a. n.a. n.a. -

B. ECONOMIC

1. Per Capita Income US$180 n.a. n.a. n.a. -

2. Per Capita RuralIncome US$120 n.a n.a. n.a. -

3. Rural Povertyincome level US$ 85 n.a. n.a. n.a. -

4. Total land area(ha '000) 65,000 3,280 5 970 1.5 4,250 6

5. Total land cultivated 4,010 191 5 36 1 227 6

(ha '000)% of total 30 - 40 - 32 -

6. Total irrigable land 3,300 118 4 26 1 144 5(ha '000)

7. Total land irrigated 2,50C 97 18 115(ha '000) % oftotal irrigable 76 82 69 80

8. Average farm size (ha) 3.5 - - 1.b

9. Total Sheep and goats('000 head) 22,400 940 4 230 1 1,170 5

10. TItal Cattle('000 head) 3,400 300 9 60 2 360 11

11. Total Poultry('000 head) 6,000 400 7 300 5 700 12

12. Total Other Live-stock ('000 head) 2,000 82 4 41 2 123 6

13. Total Grazing Land(ha '000) 54,700 411 1 53 - 464 1

14. Total Forest area(ha '000) 1,900 29 2 - - 29 2

15 Total NumberExtension Agents 3,000 71 2.4 41 1.4 112 4

16. Total Roads - km 29,000 1,550 5 366 1 1,916 717. Road meters per km

244 50 113 38 86 45 100

C. PRODUCTION ('000 ha)

1. Wheat 2,350 115 5 19 1 134 62. Potatoes 20 9.2 46 5.8 29 15 753. Other Cerals 1,008 6.2 1 1.2 - 7.4 14. Fruits, vegetables

forage 373 14.2 4 5.8 1 20 55. Yields-tons/ha

Wheat 1.21 1.3 107 1.6 132 1.45 119Potatoes 11.5 10.0 12.0

D. SOCIAL

1. Basic Health Clinics 107 7 7 2 2 9 82. Maternal and Child Health

and Afghan FamilyGuidance AssociationClinics 37 1 3 1 3 2 5

3. Pharmacies 595 37 6 2 - 39 74. Hospitals 58 2 3 2 3 4 75. Primary School

Enrollments ('000) 654 29 4 13 2 42 6% of National Total 100 4 - 2 - 6 -

6. Middle SchoolEnrollment ('000) 112 3 3 3 3 6 5

% of National Total 100 3 3 3 3 6 67, Motor Vehicle Registration

Car 33,632 369 1 5 - 373 1Truck 11,018 386 4 31 - 417 4

Bus 6,214 206 3 31 1 237 4

Total 50,864 961 2 67 - 1,028 2

/1 These data collected from various official Afghan sources ar.dIBRD reports should be regarded as rough indicators only.

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probably totals around 178,000 tons annually with perhaps 40-50,000 tons beingtraded. As with potatoes and fruit, Kabul is the most important market forproject area livestock products particularly sheep and goats, wool, hides andskins. Livestock production is important with few village households owningno animals. Sheep and goats constitute 5% of the national flock, cattle 11%,poultry 12% and other livestock (camels, donkeys, horses) 6%. Productivity islow but the potential for improvement is substantial. Poplar tree productionis marketed in both Kabul and Kandahar. Average per capita income in Ghazniis probably lower than the national 1976/77 rural figure of US$120. Nationalrural absolute poverty income level is US$85 (1976/77). In Ghazni and Wardakit would be about the same. About 800,000 persons (60% of population) prob-ably live in or near a state of absolute poverty. Greatest concentration ofthese poor would be in the mountain regions and areas where irrigation wateris insufficient. Women do not usually work outside of the family homes.Occasionally they help in the fields, but social custom confines them tofamily and home. In some areas they are engaged in handicraft production,particularly rugs and carpets. In the project area, however, except for themountainous parts of Ghazni and Wardak, village handicraft production is notwidespread.

III. DEVELOPMENT INSTITUTIONS

A. Provincial Administration I/

3.01 The provincial administrations of Ghazni and Wardak are each headedby an appointed Governor responsible to the Ministry of Interior, and holdinga rank equivalent to a Deputy Minister. The Governor is responsible foradministration including law and order, defence, education, health, agricul-ture and rural development. He is assisted by a number of sub-governors(Woleswalis). Each sub-governorate is further divided into districts(Alaqadaris). In Ghazni there are 24 districts and in Wardak 9. The Governoris also chairman of the Provincial Rural Development Committee which includessubgovernors, representatives of various ministries and departments andGovernment appointed people's representatives. Representatives of variousdepartments are responsible administratively to the Governor and technicallyto their ministries in Kabul. Annual budget is prepared by the centralministries in Kabul, approved by the Planning and Finance ministries and theCabinet, and channeled through respective ministries. Provincial adminis-tration is highly centralized with the Governor exercising considerableinfluence and authority.

1/ Outline of present Government Organization is given in Annex 1, Chart 2;following recent administrative changes, the Project area will nowinvolve the 'Governorates' of Kabul, Ghazni and Paktika.

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B. Ministry of Agriculture (MA) 1/

3.02 The Director General of Extension and Agriculture Development inGhazni is responsible for the administration and coordination of all MAprovincial activities. Senior staff include a Veterinary Services Director

with 9 supporting professionals; Extension Director with 73 extension agents;Forestry Director including 20 supporting professionals; Cooperative Director

with 9 cooperative agents; and a Plant Protection Director. Each Directorhas access to one 4-wheel drive vehicle and many supporting staff have motor-cycles, which due to maintenance problems and administrative procedures arenot always mobile. Housing is not generally provided but recently ten houses

have been constructed in Ghazni and a further ten are under construction.Provincial staff motivation is reasonable but could be improved by better

operating programs, more support with adequate vehicles, equipment and housing,and intensified inservice training. No agricultural research station operatesin Ghazni or Wardak. For transportation the majority of professional staffhave to rely on public buses which are slow, and often unreliable. In WardakMA has a similar structure. The Director General of Extension and AgriculturalDevelopment is supported by Directors of veterinary services, extension, plant

protection, forestry and range management and cooperatives. The number ofstaff operating in Wardak is correspondingly less. The vehicle situation isprobably worse than in Ghazni and no houses are provided.

C. Rural Development D)epartment (RDD) 2/

3.03 The present RDD was established in 1972 as a part of the Prime

Minister's office. It was provided with a charter to undertake rural socialand economic development including responsibilities for minor irrigationschemes, most secondary and tertiary roads, and integrated rural developmentincluding health, agricultural and social activities in specially designatedareas. RDD was previously responsible to a group of ministers, the 'HighCouncil of Rural Development', which was recently abolished. RDD remainswithin the Prime Minister's office and for Project implementation purposes,coordination, planning and policy guidance will now be given by the Presidents'Council for Coordination of Rural Development (PCCRD) chaired by the RDDPresident and comprising the Presidents of concerned departments and agenciesincluding Agricultural Extension, Veterinary, Cooperatives, Planning andAgBank.

1/ Outline of present Government Organization is given in Annex 1, Chart 2;following recent administrative changes, the Project area will nowinvolve the Governorates of Kabul, Ghazni and Paktika.

2/ Annex 1, Chart 4 presents existing R)D Organization.

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3.04 RDD has two forms of provincial organization. A typical provincialDirectorate comprises a Director and up to about 15 lesser rank staff, whichusually does not include an engineer. The office assists RDD teams fromKabul, makes prefeasibility studies, and implements certain small schemes onits own. The provincial Director is also secretary of the Provincial RuralDevelopment Committee. The other organization involves a project committeefor those areas where Integrated Rural Development (IRD) projects have beenproposed. These regions may well be within a province as in Ghazni, whereKatawaz Loi Woleswali is a designated IRD region with a Director General ashead and a large number of supporting staff including health, agriculturalextension, research, animal husbandry, and education. The Central Kabuloffice performs three basic functions; coordination through the President'scommittee, planning of projects and programs, and execution. Ghazni andWardak each have an RDD Directorate with a Director and supporting staff.Project construction is the responsibility of RDD Central office through 10construction teams each composed of one civil engineer, one administrationofficer, 4 technicians, a technical supervisor, and support staff. Duringconstruction beneficiaries usually provide labor which is paid for by WFP foodrations while RDD provides technical guidance, equipment and materials. Fieldoffices identify the needs of rural people, prepare project requests forpresentation to the provincial committee, and their transmission to headoffice, mobilize local resources to assist construction teams, and procurelocally available materials.

3.05 By the end of March 1978 Ghazni RDD had completed construction ofsix bridges and designed a further 12. In Wardak eleven had been completedand a further two designed. Fifteen irrigation projects had been completedin Ghazni and a further five designed. In Wardak only one wash-crossing hadbeen completed, another is under construction, and an additional one in thedesign stage. Throughout the whole of Afghanistan the RDD 1978 summer programincluded 59 irrigation structures, five roads, 29 bridges, 3 foot bridges,and 8 other construction programs. In addition, it is expected that about 40culverts would be constructed in each province plus a number of minor projects.Total 1977-78 budget amounted to AF 101.2 mil. (US$2.5 mil.) of which an esti-mated AF 92.7 mil. or 92% was spent. Budget for 1978-79 is AF 110 mil. (US$2.8mil.). Permanent RDD staff include about 230 'professionals', 380 generalservice, and 415 non-permanent contractors. Professionals include about 30engineers, 17 agronomists, 5 economists, 5 education specialists and 4 doctors;the remaining are sub-professionals. RDD currently receives technical assis-tance from an 8 man UN team and two Indian Government community developmentexperts. WFP assists through food incentives to villagers to participate inself-help schemes and as a supplement to cash wages under Government schemes.Since 1974 USAID has been providing financial and technical assistance with asecond phase project (1976) including construction on a fixed cost reimburse-ment basis of rural works projects which directly benefit the rural poor. TwoUSAID technicians presently work part-time with RDD.

D. Agricultural Development Bank of Afghanistan (AgBank)

3.06 AgBank was reorganized in 1969 and a revised charter adopted in1970. Since then it has undergone a remarkable transformation from a poorly

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organized channel for disbursement of state budget funds to an operationallyautonomous, efficiently managed revenue generating institution. It hasbecome the premier financial institution for agriculture with an effectiveand functional organization. It is now 100% Government owned and is generallyunder Central Bank supervision. AgBank's Board of Directors establishespolicies and makes major decisions, while an executive board directs day today operations. AgBank makes short-, medium and long-term loans for anexpanding range of agricultural investments including farm mechanization,on-farm development, production inputs, livestock, agrobusiness and marketing.Its loan portfolio has nearly tripled in four years to over AF 1.7 billion(US$42.5 million) as of March 1978. Following the advent of the new Govern-ment, AgBank Senior staffing was largely changed. Despite this the institu-tion has shown stability and the new leadership is proving satisfactory.Implementation of Land Reform is currently affecting activities and causingsecurity and repayment problems. Future demands on AgBank's resources arelikely to be very strong and will test the institution's strength.

3.07 Given farmers' unfamiliarity with institutional credit discipline,AgBank has been conservative in securing loans, and requires mortgage of landor in some cases Promissory Notes guaranteed by landowners, as security formedium and long-term loans. These land-related security requirements haverestricted the availability of credit since mortgaging land is complicatedand costly. AgBank's short-term lending for fertilizer and other inputs isan effective operation with loans secured by joint and several guarantees ofgroups of five to ten farmers. Presently these loans are not individuallyappraised or supervised and first year collection rates are low. AgBankhas plans to introduce a pass book system to facilitate individual borrowingand selective individual appraisal. Interest rates (8% for medium and long-term, 10% for short term) are positive in real terms 1/ and cover presentcapital and operating costs and generate profit margins, although AgBank stillrelies on a Government guarantee of the short term lending program and doesnot write off bad debts. The Supply Depart:ment of AgBank imports tractors andwater pumps and related farm machinery for sale on credit to farmers. It alsoprovides a backup after sales service which is presently undergoing reorganiza-tion and strengthening with a UNDP/FAO technical assistance project in support.

3.08 AgBank has a branch in Ghazni with 4 field inspectors (appraisers)under a branch Director responsible for loan evaluation and supervision. Adeputy branch Director is in charge of 10 fertilizer agents who are respon-sible for administering the short-term lending and loan collection program.In 1976/77 medium-term loans granted included tractors (6), water pumps (8),flour mills (1), establishment of vineyards (7), and purchase of livestock(10). Total volume of financing was AF 3.8 million in 1976/77. Short-termloans for fertilizer, plant protection and improved seed totalled to 384 witha total loan amount of AF 1.5 million. Wardak is presently served fromAgBank's Kabul office but credit activities could be expanded by opening localoffices.

1/ Inflation in 1976-78 averaged about 6-8%. For the period 1979 through1981, the inflation rate is unlikely to average more than 8% (World Bank

projections).

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E. Afghan Fertilizer Company (AFC)

3.09 AFC established in 1973 as a wholly independent subsidiary of AgBank,is responsible for fertilizer procurement, storage and distribution. Morerecently its activities have included the purchase and distribu-t-ion--af imiprovedseeds produced by Afghan Seed Company (ASC) and monopoly purchase and sale ofagro-chemicals, including veterinary medicines. It has expanded its activitiesrapidly, distributing 100,000 tons of fertilizer during 1977-78, and has builtup a satisfactory organization including a wide distribution system, withabout 600 retailers who sell on a commission basis. All urea is supplied froma local plant while diammonium phosphate and other fertilizers are imported.Government-determined fertilizer prices presently are AF 10,000/ton (US$250)for urea and for diammonium phosphate AF 11,400 (US$285). Compared to currentworld prices, urea is not subsidized but diammonium phosphate and other fertil-izers presently are. AFC maintains a supply depot in Ghazni with three ware-houses (capacity 2,400 tons) constructed with IDA assistance under the SecondAgricultural Credit Project (549-AF). Wardak province is served from AFC'sKabul head office, while Ghazni has a regional office with a staff of five.Private retail outlets total 26 in Ghazni and 15 in Wardak, with three AFCagro-chemical shops. There is close cooperation between AgBank and AFC.About 70% of fertilizer sales are financed by AgBank credit and about 30% arecash sales; the percentage of cash sales is increasing.

F. Ministry of Water and Power (WAPM)

3.10 Since 1974 responsibility for water, irrigation (excluding minorschemes) and power development has been under the control of WAPM. It isresponsible for the implementation of all major irrigation projects includingSardeh Dam (assisted by Soviet aid) in Ghazni province. Sardeh was completedin 1967 and, when the command area is fully developed, will irrigate 15,000hectares. Government is planning to establish large state farms, which willbe irrigated from this Dam. These would include the ASC seed farm, a sheepand poultry production complex, and an applied agricultural research station.The Ministry is also officially responsible for the management of Bande Serajdam above Ghazni town, but its operation is directed by the Governor usingunqualified personnel. WAPM does not maintain a regular office in Ghaznitown.

G. Environmental Health Department (EHD) I/

3.11 The Ministry of Public Health has a Department of EnvironmentalHealth, whose responsibilities include the improvement of rural and urban

1/ Para. 3.11 describes the position at appraisal time; during negotiationsthe Afghan delegation advised that EHD's water supply responsibilitieshad been transferred to a new Department in the Public Works Ministry.

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water supplies, urban sewage and waste disposal and, with UNICEF and WHOassistance, the implementation of a recently introduced village healthworker scheme. Its prime activities include the implementation of a UNICEF/WHO supported rural water supply scheme. Only about 5% of rural populationis presently provided with reasonably safe drinking water. EHD has estab-lished five Zonal Centers (ZC) to strengthen its administrative and implemen-tation capacity including Kabul and Kandahar which service Ghazni and Wardak.ZC's are headed by engineers and staffed with other skilled personnel requiredfor carrying out the program. Presently, a planning engineer, hydrogeologist,and drilling engineer are included in the UNICEF technical assistance teamand a WHO sanitary engineer also assists. UNICEF also supplies equipmentand operating materials including pipes. EHD has 8 light drilling rigs witha heavy drilling rig operated on its behalf by WAPM Groundwater Departmentand a further 2 heavy rigs expected soon. Present EHD capacity is installationof about 25 rural water schemes annually. EHD's program in the two provinceshas so far identified about 120 village water supply schemes largely orientedtowards schools, health centers and hospitals. Operations have not yetstarted and probably only 5 or 6 would be completed annually. This is inaddition to about 50 UNICEF/RDD schemes to be completed during the next fiveyears. A backup maintenance unit has not operated at maximum efficiency.Within the rural water supply scheme EHD endeavors to implement a villagehealth worker training scheme under which literate villagers are trained toundertake basic health first aid, sell certain approved medicines and educatepeople in the advantages of using pollution free water. ZC's are responsiblefor preparation and implementation of the annual work programs, surveys,construction, maintenance, data compilation, disinfection of water sources andhealth education. Close cooperation exists between RDD, EHD, and UNICEF/WHOin the planning and implementation of rural water supply schemes.

H. Afghan Cartographic and Cadastral Survey Institute (ACCSI)

3.12 ACCSI was formed in 1973 with the merger of the cadastral surveyand the cartographic institutes. The Institute with headquarters in Kabul isdivided into 5 departments including administration, geodetic, photogrammetric,cartographic and reproduction, and engineering surveys. Technical and equip-ment assistance is presently given by a 5-man UNDP team. ACCSI maintains aGhazni office with 56 staff including 50 technicians, responsible for 4provinces including Ghazni and Wardak. Presently, about 24% of cultivatedland in Wardak has been surveyed and about 13% in Ghazni. Until recently thecadastral survey methods used were slow and not entirely accurate. Morerecently aerial survey and orthophoto plan production has been introduced.Orthophoto plans can be produced in less time and with greater accuracy thanthat needed for normal ground survey.

I. Department of Cooperative Development (DCD)

3.13 DCD was established within the 14inistry of Agriculture in 1973.The cooperative law enacted in 1974 was recently amended to exclude farmers

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owning more than 30 jeribs (6 ha) from membership. Furthermore, memberhsipfees are now related to size of holding and in emergency cases the coopera-tive may extend loans to individuals at 4% for a period of one year up to80% of the applicants membership fee deposited. DCD grew out of the success-ful experience of the Project on Agricultural Credit and Cooperatives inAfghanistan (PACCA) which commenced in 1968 and was financed by the SwedishInternational Development Authority (SIDA) and executed by FAO. In 1973,Government decided upon cooperative development in several provinces withessential support services being provided by other relevant departments andagencies. DCD has responsibility to promote the establishment and registra-tion of cooperatives, audit accounts, draft regulations, and provide assis-tance and advice on organization and management. It currently has a totalstaff of about 430 of whom 293 (67%) are stationed in 12 provincial fieldoffices including Ghazni. The national total of primary societies has grownfrom 11 in 1974 (2 registered) to 135 including 2 unions and about 13,000members in June 1978. No cooperatives are registered in Wardak, and only 4with about 300 members in Ghazni. In the past cooperative field staff havetoo often been arbitrarily assigned with inadequate preparation or orientationtowards small farmer needs and unclear definition of their work responsibili-ties. In addition, most cooperatives which are largely service and marketingoriented, have tended to be seen rather as Government agencies and few havebeen self-reliant. Moreover, the cooperative law has been interpreted byGovernment officials as excluding tenants and sharecroppers as potentialmembers. DRA considers the development of sound multipurpose agriculturalcooperatives as an important means of accelerating agricultural developmentand to be an integral part of the land reform program. The new Five-YearPlan is expected to include provision for a rapid increase in cooperativenumbers and a major reorganization of DCD including training is presentlybeing planned. Organized at local, regional and national level they are seenas a means of providing farmers with greater access to production inputs,institutional credit, the marketing system and improved technology. Currentlyan intensified system of supervision of cooperative agents and cooperativeactivities is being implemented by DCD. Cooperative annual accounts audit is,with one or two minor exceptions up to schedule. Following the completion ofthe SIDA financed FAO executed technical assistance project in December 1978,UNDP has undertaken to finance a phase 3 project with 4 experts and 5 asso-ciate experts. DRA has recently requested IDA assistance to implement itscooperative development program.

IV. THE PROJECT

A. Introduction

4.01 The proposed project was prepared in October 1976 by an FAO/IBRDCooperative Program Mission and a report submitted to GOA and IDA in January1977. IDA missions in 1977 assisted with final project preparation. Theproject would represent the first IDA assisted effort aimed specifically atthe Afghan rural poor. It is Government's intention to replicate similarprojects in neighboring provinces based upon lessons learnt from the proposedproject.

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B. Project Objecztives

4.02 The Project would aim at directly increasing the income and standardof living of about 40% of the Ghazni-Wardak rural population, including moreequitable income distribution, improved distribution of Government services,and satisfying poorest farmers' basic needs. The proposed strategy includesimproving small farm production and income through improvement in irrigationwater supply; increasing use of fertilizer and improved seed; improvingaccess to credit; increasing the efficiency of and farmer access to veterinary,extension and cooperative services; improving rural roads; and providingpollution free water supplies in a limited number of villages. The Projectwould strengthen Government Provincial services including capability in sub-project design and implementation procedures and systematic evaluation ofProject impact. It would represent the first step in the Government's policyof concentrating resources for agricultural and rural development into a fewselected areas.

C. Brief Description

4.03 The proposed Project would constitute a first stage in a long-termdevelopment program designed to improve the social and economic well being ofthe Ghazni-Wardak rural population. It would focus on arresting the dete-rioration of, and emphasizing the proper use of the region's natural resourcebase, including soils, vegetative cover and water. It would mobilize vil-lagers to participate in the planning and implementation of the infrastructureand the services to be established; and would concentrate on strengthening theconcerned Government institutions thereby helping to ensure effective projectimplementation and enhancing the capacity of these institutions to undertakesubsequent development schemes.

4.04 The Project would consist of the following activities in varioussectors; the proportionate costs of these activities as compared to totalproject costs including contingencies are indicated below, whereas the costestimate is on page 32.

(a) Agricultural Investments (56%). Minor irrigation rehabili-tation (17%), including improving the reliability of watersupply in traditional main canals, increasing efficiency ofwater use, and reduction of crop yield losses; agriculturalextension (7%), including increasing and upgrading thequality and number of extension agents and rapidly extendingexisting and new technology to as large a number of farmersas possible; applied agricultural research (2%), includingthe development of improved technology adapted to theproject area and the target group and designed to yield themaximum economic returns from each unit of land and water onboth irrigated and rainfed land; agricultural cooperatives(3%), including the establishment of viable, self-sufficient,multi-purpose service cooperatives and the efficient supervi-sion and training of cooperative office bearers and members;

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range management and survey (1%), including assistance tonomads and survey work designed to increase knowledge of theecology, sociology, and economy of the project area range-lands and leading ultimately to the preparation of a pilotrange management project; agricultural credit (17%), includ-ing improved access to and use of credit for short-termseasonal inputs and medium- and long-term productive invest-ments both to individuals and cooperatives and for privatevillage workshop owners; veterinary and livestock (8%),including the establishment of a village veterinary service,improving the efficiency and operation of a mobile veterinaryservice and improving animal production extension to farmers;and cadastral survey (1%), including accelerating progress ofreliable cadastral survey and the registration of most irri-gated land in the two provinces.

(b) Rural Infrastructure (24%). Minor road improvement (20%),including the establishment of a unit capable of upgradingand maintaining to reasonable all-weather status about400 km of feeder and tertiary roads; and village watersupplies (4%), including the installation of pollution freereliable domestic water supply in about one hundred villageswith a supporting education program.

(c) Project Planning, Coordination and Evaluation, and TechnicalAssistance (20%), including the establishment of a regionalplanning and implementation unit (8%) responsible for planning,administration and coordination, building construction, procure-ment, operation of workshops, public relations and monitoringand evaluation; technical assistance (9%), including providingguidance and advice on the establishment and effective opera-tion of all aspects of the regional planning and implementationunit and preparing specific training programs for concernedGovernment agencies; and feasibility studies (3%) for damstorage expansion and a new moderate sized irrigation dam;and the preparation of a second rural development project.

4.05 The Ministry of Agriculture and RDD would play the major roles inproject implementation. The Provincial Government departments and agencieswould be responsible for implementing the Project, over a five year period,within their respective jurisdictions. These departments would at the provin-cial level, come under the direction of the Provincial Rural DevelopmentCouncil (PRDC) to which the RDD's Regional Planning and Implementation Unit(RPIU) would act as secretariat. RDD RPIU would act as the planning andcoordinating body through PRDCs. The project activities would not commencein Wardak until project year three, following the establishment of effectiveimplementation programs in Ghazni, and would ultimately cover most districtsin the two provinces. In order to strengthen Government's ability to provideservices in more remote villages the Project would improve the implementationcapacity of participating Government services at district level through train-ing and institution building. Furthermore, technical staff would be upgradedand provided with the transport, equipment, program and supervision necessaryto allow them to perform their tasks effectively.

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D. Project Detailed Features

(i) Agricultural Investments

4.06 Minor Irrigation Rehabilitation (US$6.7 mil.). 1/ The Project wouldfinance the equipment, transport facilities and staff required for the con-struction of about 100 medium and 50 small permanent diversion weirs and in-takes, and about 40 medium and 30 small wash crossings. The objective wouldbe to improve the reliability of irrigation water supply in traditional maincanals, and reduce water and crop yield losses due to inadequate intakes andwash crossings being destroyed during spring floods. Canal maintenance timeand costs would be reduced, thus allowing farmers time to improve irrigationefficiency, crop weeding and general farm husbandry. Rehabilitation costswould be met by the Project but DRA would initiate a study to be completed byMarch 31, 1981, which would examine inter alia the sociological, economic andfinancial implications of introducing a recommended cost recovery system forminor irrigation rehabilitation to be implemented not later than March 31,1982. The traditional system consists of a river diversion weir formed bydumping stones and covering with brush, wood and clay. Canals have uncon-trolled open heads, and cross minor valleys by throwing mud walls across thefloor on the downstream side. These structures are extensively damaged duringspring floods with consequent adverse affects on crop growth. Farmers spendten to fifteen days each season repairing damage, involving up to 3,000 mandays for an average canal commanding about 150 hectares.

4.07 Four construction units, including a pile driving unit with adequateequipment, and a small precast concrete-making unit, would be establishedwithin RDD-RPIU to carry out the works (Arnex 1, Chart 3). At full develop-ment, in project year six, the proposed rehabilitation works would improvespring and early summer irrigation reliability, with consequential reductionof canal maintenance costs, on an estimated 17,000 hectares. Special atten-tion would be paid to management of Bande Seraj Dam situated about 40 kmupstream of Ghazni town with a storage capacity of about 25 Mm. Existingcapacity, coupled with the average annual riverflow, is capable of adequatelyirrigating about 3,000 hectares, but the actual area irrigated is estimatedat no more than 2,000 hectares. Under the Project, the dam operation wouldremain under WAPM technical control, but would be managed on the basis ofa policy agreed upon by PRDC, WAPM and RDD-RPIU, including supervision byqualified engineers. Even with moderate efficiency, an additional 1,000hectares could be effectively brought under irrigation through improved waterstorage management.

4.08 As specific intakes and canals for rehabilitation have not beenidentified, each improvement program would be subject to appraisal includinga satisfactory cost benefit analysis carried out by the RPIU minor irrigationrehabilitation unit. The first three appraisals including details of pro-posed structural designs, would be sent to IDA for review and comment before

1/ Figures in parentheses are total costs including physical and price con-tingencies.

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actual work commenced and others would be reviewed by IDA supervision missions.Beneficiaries would continue to be responsible for normal canal maintenanceusing existing satisfactory organizations and systems. Heavy engineeringsupport would be provided by RDD-RPIU which would continue operations aftercompletion of project implementation. Criterion for selection of canals forrehabilitation would include a minimum financial rate of return over a ten-year time horizon of 15%; at least 50% of beneficiaries would own no more than4 hectares (20 jeribs); canal intake size would not be increased to the detri-ment of downstream users on the river; command area farmers would agree to meetall maintenance costs and where practicable, provide unskilled labor requiredfor work construction on a basis agreed upon among themselves; and they wouldagree to come within the improved extension and veterinary services influencezone. More detailed appraisal criteria are shown in the Project File WorkingPaper C9. Assurances were obtained during negotiations that these detailedselection criteria would be followed during project implementation.

4.09 Agricultural Extension (US$2.7 mil.). The agricultural extensionservice in the project area would be reorganized, intensified and strengthened,using a system successfully proven in India and other developing countries.The Project would provide farmers, on a regular systematic basis, with up-to-date advice on the demonstration of farming practices best suited to theirconditions and capable of having an immediate impact on production and income.This would be achieved by strictly programmed visits from regularly trainedfield staff, supported by professional advice from within the extensionservice, from research, and from foreign technical experts. Extension staffwould not be involved with other regulatory and administrative Ministryof Agriculture functions and there would be close cooperation with AgBankand AFC.

4.10 Based on an effective ratio of one Village Extension Worker (VEW)to about every 270 adopting farm families, VEW's would cover in year 7, about48,000 farm families in the project area or about one-third of total popula-tion. 1/ Actual number of farms covered by each VEW would be varied from about200 to 400, depending on population density and communication net work. Eachextension unit would be divided into eight smaller groups of 25 to 50 farmers,each to be visited regularly on a given day of the week. VEW's would workprimarily through about 8 to 10 contact farmers selected by the villagers.The message communicated would be simple, concentrating on the most importantcrops and initially on improved cultural practices of immediate relevance andin most cases not involving increased expenditure. VEW's could receive theextension message at training sessions held one to two days every two weeks bysupervisors (ES) supported by Subject Matter Specialists (SMS). Of theremaining twelve days in the two-week period two would be devoted to demon-strations, field trials, making up missed visits and administrative work, twodays to holidays, and eight days to visiting farmers. Fortnightly training of

1/ Ratio of extension agents to total farm families of both provinces wouldbe 1:800; it is assumed that about 1/3 of these would be effectivelycovered by this project; many communities are so isolated that providingan effective service is impractical; see details in Project File workingpaper C-6.

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VEW's would be a major feature. Supervisors and SMS's would be trained fortwo days each month at district level by district staff, backed up by researchstation staff, head headquarters, and technical assistance experts. Adequateequipment and extension aids would be provided for staff training. In addi-tion to existing project area extension staff, 8 SMS, 7 ES, and 65 VEW wouldbe required to implement the Project over 5 years. This would give a totalin the two provinces of 8 SMS, 23 ES, and 177 VEW. SMS in agronomy, plantprotection, irrigation and water management, and training would be providedto strengthen technical backup. Foreign technical expertise would includefarm management-extension, training, range management, and livestock produc-tion. Project File working paper C-6 provides further details, including thetechnical packages involved.

4.11 As the proposed extension methodology is based on regular andfrequent farm visits by VEW's, field staff and supervisors should live neartheir work and be sufficiently mobile to function effectively. Housingavailable in rural areas is limited, and the Project would provide moderatehousing, designed and constructed by RDD-RPIU, for all extension servicestaff including VEW, SMS, ES, and district staff. The Project would alsoprovide additional equipment, vehicles, including motorcycles for supervisorsand bicycles for VEW. Motorcycles and bicycles would be sold to staff oncredit, similar to that outlined for the veterinary component (para. 4.18).The Project provides for fellowships for district directors and supervisorsto make short intensive studies of similar extension services in neighboringdeveloping countries. The extension service would, in conjunction withother Government service agencies (AgBank, AFC, Cooperatives) establish anumber of Farm Service Centers, which would serve as a focal point for farmerinformation and training and improvement of farmer access to Governmentagricultural services.

4.12 Agricultural Research (US$747,000). The Project would establish a20 hectare applied agricultural station. 1/ Prime objectives would includedeveloping improved technology, adapted to the project area climate, soils,and water availability, and to the target group, and designed to yield maximumeconomic returns by both unit of land and water. The research unit would pro-vide backup training and specialist advice for the extension service subjectmatter specialists and supervisors. It would ensure rapid analysis and earlypublication of trial data, and initiate research designed to develop effectiveeconomic soil conservation techniques, on both rainfed and irrigated land, andcooperate with other relevant agencies to develop improved water utilizationwithin traditional irrigation systems. Sufficient technical packages arepresently available for key crops but work would have to be accelerated toensure a continuing flow of new technology within 2 or 3 years for use by theexpanded extension service. In order to cover as broad a range of soil typesand environments as possible, some research would be conducted on farmers'fields under practical conditions and the supervision of extension agentssupported by research specialists, and on small outstations. Research would

l/ This could be part of a proposed 100 hectare research station which maybe established on the Sardeh irrigation command area in Ghazni.

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also cooperate closely with the Forestry Department and the Range ManagementERIC. Visits to the research station by farmers and extension agents would bea regular activity.

4.13 Cooperatives (US$1.2 mil). Through the Ministry of AgricultureDepartment of Cooperative Development (DCD) the Project would promote theestablishment of at least 150 viable, self-sufficient multi-purpose servicecooperatives, including cooperatives among nomads, in the project area wherepresently 4 cooperatives are registered with 40 applications under processing.The cooperative movement is a corner stone of the Government's new agricul-tural and rural development policy. In addition to providing credit throughAgBank for construction of offices, storage facilities and meeting rooms forgroups of 3-4 cooperatives the Project would provide, as part of Farm ServiceCenters, offices for DCD staff as well as housing, vehicles and equipment.The 2 provincial center staffs would include in each case 1 Director andDirectors of Audit, services and training with appropriate support staff. Ineach district 3 cooperative officers would be responsible for organizing,training, auditing and providing general support to about 8-12 Coops. CenterDirectors would be equipped with 4x4 vehicles and district staff motorcycles.The Project would train cooperative office bearers and members to efficientlydischarge their duties and responsibilities, and in the objectives and opera-tion of cooperatives. A cooperative specialist would be appointed as part ofthe foreign technical team with the main objective of training DCD agents.Supervision of cooperatives and cooperative agents would be on a training andvisit system similar to that outlined for agricultural extension with whichclose cooperation would be developed.

4.14 Rangeland Management and Survey - Experimental Range ImprovementCenter (ERIC) (US$521,000). ERIC would be part of the Forestry and RangeManagement Department. Objectives would include increasing knowledge of theecology, sociology, and economy of the project area rangelands; finding pro-ductive species which could be established under prevailing conditions, anddevising appropriate management systems which would lead to increased rangeproductivity, reduced soil erosion, and improvement in the standard of livingof rangeland users; training staff on the role of the rangeland pastoralsystem including its place in the total economy and relationship with andeffects on sedentary farming; and the preparation of a pilot range management- rural development project suitable for donor financing and involving projectarea rangeland users. A major objective would be, after appropriate surveywork, to establish one or more pilot nomad service centers which would providea focal point for nomad cooperative development and the provision of basicservices including veterinary, credit, marketing, extension, water, educationand health. The detailed plan of establishment would be reviewed by IDAbefore implementation began. Specific rangeland areas would be selected fordetailed survey including identification of the numbers and types of livestockand people using the area, collecting data on livestock productivity andmonitoring changes overtime. Other activities would include random samplemeasurement of annual dry matter production by total and months of mainspecies; establishing a monthly profile of main species consumed by types oflivestock; and measuring the effects of fire brush collection on rangelandproductivity and desertification. Buildings would include housing for senior

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technicians, and a suitable office store and laboratory established on about20 hectares where special adaption trials and production measurements couldbe made. Staff would include two agronomists, a range management and live-stock production expert and sociologist together with technicians and othersupporting staff. A foreign range management expert's main task would be toestablish an ERIC work program, train local specialists, advise on the continu-ing program and assist with survey and trial data analysis and publication.Local staff would undertake an initial one month training period with the IDAassisted livestock development project based in Herat where the experimentalrange improvement center has successfully illustrated the value of competentrange management staff.

4.15 Agricultural Credit (US$6.7 mil.). Through the Agricutural Develop-ment Bank (AgBank), the Project would improve access to and the use of creditamong farmers and cooperatives and non-farm rural enterprises, for short-termproductive inputs, and medium and long-tern for on-farm development, farmmachinery, water pumps, and livestock. Ag'Bank would also introduce loansto cooperatives, on terms and conditions satisfactory to DRA and IDA, forfinancing purchase of members produce and for construction of offices andstorage facilities. AgBank would open a branch office in Maidan, the centerof Wardak province, and, progressively, about five sub-branches in projectarea main centers. Each sub-branch would be staffed with a qualified fieldinspector together with necessary support staff. AgBank would upgrade itsGhazni branch to a Type One which would initially give the branch Directorauthority to approve loans of up to AF 50,000 (US$1,250) without prior headoffice approval, and the loan approval authority of its Ghazni and Maidanbranch directors would be progressively increased. For short-term loans(fertilizer and improved seed) a "pass book" system which allows firstly,for individual short-term loans as opposed to groups of 5-10 with jointand several liability and secondly, automatic eligibility for repeater loansprovided the pass book shows that the previous loan has been repaid, wouldbe introduced. Loan payment flexibility would be increased; farmers whocould show genuine reasons for non-payment would still be eligible for newloans. Such loan recycling would be based upon AgBank staff appraisals.

4.16 AgBank, through its Supply Department, would expand and upgrade itsworkshop and spare parts depot in Ghazni so as to offer satisfactory repairand spare parts services to tractor and water pump owners. Spare parts forwater pumps presently owned by farmers, but which were not purchased throughAgBank Supply Department would also be stocked. AgBank would improve itsafter-sales farm machinery service through the stationing in Ghazni of atleast 3 mobile workshops. Furthermore, as an innovative development, AgBankwould provide, during winter months, training courses for private villagerepair workshop owners, to whom it would also provide on a wholesale basis, aspare parts supply service. Credit would also be provided for private villageworkshops for tools and spare parts inventory on terms and conditions satis-factory to DRA and IDA. Total loans over five years, would include about 100shallow wells and pumpsets, 13,000 on-farm development, 80 non-farm ruralactivities, and about 100 to cooperatives for working capital, offices andstorage facilities. Interest rates, loan repayments and security requirementswould be the same as for existing AgBank loans under the Third Agricultural

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Credit Project (Credit 721-AF), except that cooperatives would qualify for a1% per annum interest rebate for prompt loan payment. 1/ Investment costswould include staff housing, a substantial workshop in Ghazni, and smallsub-branch offices which would be built by RDD-RPIU and transferred withoutcharge to AgBank.

4.17 Veterinary Services (US$2.9 mil.). The veterinary component wouldaim to extend services to village farmers and nomadic and transhumant pasto-ralists through the establishment of a village veterinary service and thestrengthening of mobile vaccination teams. Control of major animal diseasesand parasites among participating flocks and herds including poultry, would beexpected to improve animal production, decrease mortality and increase annualofftake. 2/ The Agricultural Extension Service supported by an animal produc-tion specialist would give supporting advice on nutrition and husbandry, andin order to provide reliable market outlets, the Herat Livestock DevelopmentCorporation (HLDC) now engaged in mutton exporting, would establish a numberof buying points in the Project area. A fully equipped veterinary clinic nowbeing built in Ghazni town would be supported by about 5 sub-clinics estab-lished in larger district farm service centers.

4.18 In order to reach out to the villages, a 'barefoot veterinarian'approach would be adopted. The scheme would utilize the skills, knowledge,and experience of villagers who would be trained as Village Veterinary Workers(VVW), and as such would effectively extend the influence of the limited numberof trained personnel available. Three fully qualified veterinarians 3/ wouldbe appointed to supervise the service; two would be responsible for supervis-ing about 16 Animal Health Assistants (AHA) stationed in sub-clinics; eachAHA would supervise about 8 VVW's; one VVW would cover six-eight villages orroughly 3-400 families. 4/ One veterinarian would supervise the Ghazni clinicand the mobile vaccinating teams. Regular in-service training would be afeature. VVW's would undergo an initial one-month training in simple veter-inary first aid including vaccination; be regularly supervised in the field atleast one day in each two weeks by the AHA; and would spend a minimum of oneday each month at an in-service training seminar conducted by the AHA and hissupervising veterinarian. At full development, about 30,000 families wouldbenefit, with annual livestock numbers treated of about 180,000 sheep, 60,000goats, 60,000 cattle and 150,000 poultry. 4/ An important VVW task would beeducating farmer families in the advantages of preventive animal healthcontrol, and relating the advantages of improved animal health, nutrition,

1/ Under existing AgBank loan conditions cooperatives pay 1% per annumless than individual borrowers for all types of loans.

2/ Diseases involved include anthrax, clostridial group, pasteurellosis,rinderpest, foot and mouth disease, fowl pox, new castle disease, sheeppox, caprine pleuropneumonia, lice, ticks, liver fluke, and a range ofstomach worms.

3/ In addition to the specialist (provided under bilateral aid) presentlystationed in Ghazni.

4/ Project File, working paper C-3; Table 4 provides details.

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and hygiene to the human situation. Thus the service could slowly become aninstrument for affecting change in attitudes towards these areas, particularlyamong women and young children. Each sub-clinic would be equipped with a setof simple veterinary equipment including a kerosene refrigerator. Each AHAwould have a motorcycle and each VVW a bicycle; DRA would examine the feasi-bility of selling these vehicles to employees on a credit basis, with operat-ing costs met by payment of a kilometer allowance sufficient to cover bothoperating and maintenance costs and replacement. Veterinarians would beprovided with a 4-wheel drive vehicle. All senior staff down to the AHA levelwould be provided with housing built by the project unit using local materialsand artisans, and designs which could be readily adapted to village use.

4.19 The costs of drugs and vaccines is estimated to cost about US$1.5mil. or 75% of operating costs, thus illustrating the high cost of maintainingan effective animal health program. Under the Project the full cost of drugsand medicines , about $640,000, 1/ would be recovered. Presently vaccinesare provided free and if an effective national animal health control serviceis eventually to be established, then the vaccine cost should be borne bythe users and not be a heavy drain on Government finances. DRA recognizesthis but feels that charging for vaccinations is presently impractical. ByMarch 31, 1980 DRA would complete a study undertaken by the Ministry ofAgriculture, assisted where applicable by project staff, which would incluiderecommendations for the introduction of vaccination and clinical service costrecovery to be implemented not later than March 31, 1981.

4.20 Cadastral Survey (US$218,000). The Project would assist the Carto-graphic and Cadastral Survey Institute by supplying modern photogrammetricequipment and operating materials, which would accelerate the progress ofreliable cadastral survey and registration of titles on irrigated land in theproject area. With the provision of one further orthophoto processing instru-ment together with necessary operating materials the balance of the inten-sively irrigated areas would be largely completed within five years. TheInstitute has adequate trained staff to carry out the necessary orthophotosurvey and to operate the equipment, and will complete the survey of mainirrigated areas in the Project area by June 30, 1983.

(ii) Rural Infrastructure

4.21 Minor Road Improvement (US$7.6 million). The Project would establishwithin RDD-RPIU two road construction teams equipped with equipment necessaryto upgrade minor roads (Annex 1, Chart 3). Over five years about 400 km ofminor roads would be upgraded to reasonable all-weather standard. Apart fromthe main highway and a few more important secondary roads, many project arearoads are closed for up to five months each year due to effects of floods,snow, and inadequate maintenance. Traffic counts indicate average dailytraffic (ADT) of between 10 to 50 although much uncertainty is attached to

1/ Includes price contingency.

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these conservative figures. Traffic composition includes 40% trucks, 30%buses, and the balance taxis and private cars. Trucks are generally 6-toncapacity and buses have seating capacity of between 20 and 30. Trade ismainly directed to Ghazni or Kabul, the business, marketing and administrativecenters.

4.22 Present road horizontal and vertical alignment is generally poor.Earth works are provided only in very difficult topographic conditions androads usually run at the same level of surrounding terrain, thus being sub-ject to water logging during rains or melting snow. Culverts and permanentcrossings of dry washes are lacking and bridges are provided only on permanentrivers. In cultivated areas, roads frequently cross irrigation canals withoutculverts or bridges. Project works would raise embankments in poorly drainedareas excavate drainage ditches and construct culverts; vertical and horizontalalignment would be improved; and bridges for river crossings would be providedonly where major floods are expected to occur. Where floods occur only a fewdays each year Irish bridges would be constructed. The design standards tobe followed correspond to those established by Ministry of Public Works forCategory C (secondary road) and Category D (tertiary roads). Where ADT isless than 50, design speed would be 45 km/hr, carriage way 7.5 meters, andgravel surface 5.5 meters. For ADT less than 25, design speed would be 30km/hr, carriage way 5 meters, and gravel surface 3.5 meters. Present averagetraffic speed on most unimproved roads would be 10-20 km/hr.

4.23 Roads have not yet been identified and would be subject to detailedsurvey and design before being selected for upgrading. The first threeappraisals by RDD-RPIU would be sent to IDA for comment and review prior towork commencing. Selection criteria would include ADT, land area and popula-tion served for each kilometer, estimated changes in traffic volume as aconsequence of upgrading, and the socio-economic impact of road improvementin the influence zone. Detailed appraisal and selection methodology are shownin Project File working paper C-10. Road selection would also take intoaccount the main Government administrative centers (Woleswalis) and reinforce-ment of those roads which would give the shortest connections between popula-tion and administrative centers, the main Kabul-Kandahar road and Provincialcapitals. Full account would be taken of Project phasing including the needfor access to cultivated areas in order to extend services such as veterinary,extension, credit and cooperatives. Every endeavour would be made to ensurethat the work brought benefits to the maximum number of people particularlythose in more remote poorer areas. Linking of villages to better qualityexisting roads would be a particular concern. In many cases villages areisolated from more important roads for much of the year. Improvement coststo tertiary road standard have been roughly estimated to about Af 400,000(US$10,000) per kilometer. This cost includes a substantial labor input.Construction is expected to commence in project year two with year one beingused mainly for equipment procurement, training of construction units andsurvey and design leading to identification of road priority. Road main-tenance would be the continuing responsibility of RDD-RPIU or the Ministry ofPublic Works Road Construction and Maintenance Department (secondary roads)both during and following project implementation. An innovative maintenancemeasure to be introduced by RDD-RPIU would be the employment of local 'road-men', each equipped with a wheelbarrow, shovel and bicycle and who would beresponsible for continuing minor maintenance of between 4 and 6 km each.

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4.24 Village Water Supplies (US$1.5 million). About 100 villages wouldbenefit from the installation of pollution free reliable domestic watersupply. Some 5-8,000 families including 50--60,000 persons would come withinthe resulting influence zone. Domestic water use by the majority of villagesis polluted to varying degrees, either at the source or during distribution.The Project water supply program would be in addition to a UNICEF supportedEnvironmental Health Department (EHD) 1/ program in the two provinces whichhas identified about 120 village water supply schemes largely oriented towardsschools, health centers, and hospitals. A UNICEF/RDD program includes afurther 50 schemes to be implemented in Katawaz Loi Woleswali of Ghazni prov-ince. During the next five years the RDD program is expected to be completedand about twenty of the UNICEF/EHD projects. About 100 potential additionalschemes have already been identified but these would be subject to individualappraisal, survey and design by RDD-RPIU before final selection. Actualsiting of the distribution system, including community taps, would be done bythe RDD-RPIU design team in conjunction with the appropriate village authori-ties. The first three appraisals including design details, would be sent toIDA for review and comment prior to work commencing.

4.25 The systems to be installed would include hand dug wells, shallowtube wells, and springs. Factors to be considered in system selection wouldinclude replicability in terms of construction methods and the availabilityof materials, pollution prevention, amount of supervision required, ease ofmaintenance and resistance to damage, and convenience of use. Criteriafor village selection would include the degree of pollution and access toexisting water supply sources; the potential number and economic and healthstatus of beneficiaries; the agreement of the Village Development Council tobe responsible for operation and maintenance cost and where practicable, toprovide the unskilled labor required for installation; and agreement of thevillage to nominate at least two persons with adequate qualifications toundergo EHD Village Health Worker training. An outline of appraisal informa-tion required for selection is shown in Project File working paper C-11. Thisappraisal procedure would be followed and the first three such appraisalswould first be submitted to IDA for reviewt and comment before work commenced.In most cases, the pollution free water supply would be less convenient tofamilies than existing supplies and without a supporting eduction program,benefits would not be maximized. As a condition of sub-project approval thevillage would agree to establish an instit:ution, with a person such as a waterbailiff in charge, for supervising operation and maintenance. 2/ Technicaladvice and maintenance training would be provided through RPIU. The Projectwould establish within RPIU a Village water supply unit with adequate equip-ment including a drilling rig and transport, to enable it to adequately survey,

1/ Responsibility for village water supply installations, other than thoseundertaken by RDD and under the Project, is now to be undertaken by anew Department in the Ministry of Public Works.

2/ Presently all villages have such 'institutions' to handle irrigation net-

works; the system could be easily adapted for domestic water supply.

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design, and install satisfactory water supply systems (Annex 1, Chart 3).Technical advice and cooperation would be available from EHD and UNICEF withwhich organizations RDD already has a close and functional relationship. Eachsystem is expected to cost in the vicinity of Af 6,000 (US$1,500).

(iii) Project Planning, Coordination and Evaluationand Technical Assistance

4.26 Regional Planning and Implemention Unit (RPIU) (US$3.2 million).A Rural Development Department (RDD) RPIU would be established with head-quarters in Ghazni. RPIU would advise the Provincial Rural DevelopmentCouncils (PRDCs) 1/ on agricultural and rural development programs and proj-ects, including preparation of annual cost estimates; act as a secretariatto PRDC; monitor program and project implementation and advise PRDC on itscurrent status; strengthen and improve local administrative and managementprocedures; and so as to ensure the people's participation in and understand-ing of the development programs, assist with the formation of village devel-opment councils. RPIU would implement the Rural Development Departmentsexisting functions namely road construction, minor irrigation rehabilitation,and village water supply improvement. It would be equipped with adequateworkshops, equipment, offices, and staff, to undertake all project buildingconstruction including staff housing, repair and maintenance of all projectvehicles and equipment, and buildings. An important function would be to testnew design and construction techniques particularly for housing, adapted tolocal conditions and functions, and suitable for use by local artisans usinglocal materials. RPIU would also be responsible for procurement both localand international, of all vehicles, equipment, spares, buildings and operat-ing stores and materials. It would maintain adequate stores under inventorycontrol systems adapted to local procedures which provided for prompt andtimely delivery to operational units. A public relations unit would stimu-late public interest and participation in the development process in generaland the Project in particular. RPIU would establish systems for evaluatingproject impact on crop yields, animal production, area cultivated, croppingpattern, irrigation, water utilization, farmer income and standard of living,human health, and social changes; and on staff quality, operational efficiency,and institutional development.

2/4.27 Technical Assistance and Overseas Training (US$4.9- million). TheProject would employ 12 foreign experts for 324 manmonths, including 32 man-months of unspecified short-term consultants. Except for the project leader,

1/ Due to very recent changes PRDC's would be formed for Ghazni and theProject areas of Kabul and Paktika provinces.

2/ Includes Technical Assistance and Fellowship Training (US$3.6 million)(Annex 1, Table 4), and Feasibility Study costs (US$1.3 million).

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accountant administrator, and senior engineer, who would each serve for threeto five years, experts would be employed for an initial 12 to 24 month termfollowing which additional responsibilities would be entrusted to their Afghancounterparts who would have been suitably trained in this period; thereafterthe experts would pay only short term visits as required. In view of thenumber of experts required and the need to ensure their prompt availabilityand continuity, their recruitment would be made through an international con-sulting firm. Their prime tasks would include training, the preparation ofwork programs, advising on technology, and preparing job specification andresponsibilities. The technical assistance team would include a trainingofficer who would coordinate training for all project components includingfarmer training. In addition to suitable ecluipment provided under eachcomponent, training would be assisted by the establishment under the FourthIDA assisted Education Project of a regional extension training center inGhazni and about 25 village farmer training centers throughout the two prov-inces. The Project would also provide 205 rnanmonths of overseas fellowshiptraining. Emphasis would be on short-term three to four month fellowshipsincluding both professional and technical training. Wherever possible fellow-ships would be in developing countries where the technology and conditions aremore appropriate. Consulting service costs include salaries, travel, familybenefits, firm overhead, management fee, and the backup support. The cost offeasibility studies for irrigation dams on the Ghazni river is estimated atUS$932,000; 1/ and consulting services to assist with preparation of a secondrural development project US$409,000. 1/ Consultant service costs, includingsalary, travel, allowances, firm overhead and management have been estimatedto average about US$8,000 per man month (base cost).

E. Cost Estimates

4.28 Project cost estimates are based on prices prevailing duringappraisal (June/July 1978) updated in January 1979 and are net of duties andtaxes, since no taxes are levied on IDA-assisted projects. The total projectcost, including physical and price contingencies is estimated at Af 1,561million (US$39 million) of which 45% would be the foreign exchange. Physicalcontingency of 20% on civil works and 10% on buildings and average pricecontingencies of 20% 2/ on base cost plus physical contingencies have beenincluded in the total cost estimate. Actual works for minor irrigation

1/ Consultants (local and international) would be recruited separately fromthose hired to provide technical assistance.

2/ The following annual inflation rates (%) were applied for price contin-gencies:

1979 1980-1983

Local cost 10 10Foreign exchangeCivil works 9.0 7.0Vehicles, Equipment

and services 10.0 6.0

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rehabilitation, road improvement and village water supplies would be identi-fied and appraised as project implementation proceeds. Costs have been basedon estimates of typical civil works, many of which are being undertaken byRDD or other Departments on an on-going basis, and what might be reasonablyimplemented within the five years, given much expanded resources in staff,equipment and vehicles, and finance. Summary of cost estimates is given inTable 2 page 32. Detailed costs for individual components are presented inthe Project File.

F. Financing

4.29 Financing of total project costs of Af 1,561 million (US$39.0million) would be provided in the following proportions:

US$ Mil. %

IDA 16.5 42IFAD 13.0 33UNDP 1.0 3DRA 5.8 15AgBank 1.1 3Beneficiaries /1 1.6 4

Total 39.0 100

/1 Includes AgBank sub-borrowers $0.9 mil. andveterinary beneficiaries (drug costs) $0.7.

Further details are shown in Annex 1, Tables 2-3. The proposed IDA credit ofUS$16.5 million would be made to DRA on standard terms. The IFAD loan ofUS$13 million would be on standard terms except that US$0.5 million would bea grant for technical assistance in project implementation. UNDP would coverpart of the cost of technical assistance and overseas fellowships under aUNDP/DRA/IDA project for which IBRD would be the executing agency for UNDP.Completion of a satisfactory project document would be a condition of projecteffectiveness. AgBank's contribution of US$1.1 million would cover 16% ofthe estimated credit component cost. Farmers and cooperatives receving mediumand long-term loans would contribute cash representing 20% of the investmentcosts. The balance of the project cost would be financed by DRA. The Govern-ment would be the Borrower, and bear the foreign exchange risk. It wouldon-lend to AgBank about US$4.5 million, representing about 66% of the totalcredit component cost 1/ (total US$6.7 million) at 4.5% interest repayable

1/ Of total component cost of US$6.7 million (including price contingencies)AgBank would contribute US$1.1 million, sub-borrowers US$0.9 million,IDA and IFAD US$4.7 million.

APPRAISAL OF

AGRICULTRUAL AND RURAL DEVELOPMPNT PROJECT

AFGIIANISTAN

Project Cost

Percent ofLocal Foreign Total Local Foreign Total Percernt of Baseline Total Foreign Exchange---- OO-- A 00 - _us$000 --

Minor irrigation rehabilitation 80,832 121,247 202,079 2,020.8 3,031.2 5,052.0 17 13.0 58

Village water supply 11,627 37,353 48,980 290.7 933.7 1,224.4 4 3.0 76

Minior road improvement 109,646 I17,838 227,484 2,741.2 2,946.o 5,687.2 19 15.0 49

Agricultural credit 161,919 48,366 210,285 4,o48.o 1,209.1 5,257.1 17 13.0 23

Extension service 69,432 11,523 80,955 1,735.8 288.1 2,023.9 7 5.0 14

Research 14,835 9,093 23,928 370.9 227.3 598.2 2 1.5 38

Cooperative 26,706 9,318 36,024 667.6 233.0 900.6 3 2.0 25

Veterinary service 57,678 31,380 89,058 1,442.0 784.5 2,226.5 7 6.0 35

garige managecment 13,536 2,729 16,265 338.3 68.2 4o6.5 1 1.0 16

Cadastral survey 416 7,904) 8,320 10.4 197.6 208.0 1 0.5 95

Project unit 61,320 44,838 106,158 1,533.0 1,121.0 2,654.o 9 7.0 43

Technical assistance 27,360 91,920 119,280 684.0 2,298.0 2,982.0 l0 7.5 77

Feasibility study (Khwajagen Dam) 2,700 24,300 27,000 67.5 607.5 675.0 2 2.0 90

Feasibility study (Rural Development IT) 1,200 10,800 12,000 30.0 270.0 300.0 1 0.5 90

Total base cost 639,207 568,609 1,201,816 15,980.2 14,215.2 30,195.4 100 48

Physical Contingency 36,292 10,741 47,033 907.3 268.5 1,175.8 3.0 24

Price Contingency 186,916 118,837 305,753 4,672.9 2,970.9 7,643.8 20.0 39

Total Project Cost 862,415 698,187 1,560,602 21,560.4 17,1154.6 39,015.0 45

/1 Detailed cost estimTiates including where appropriate lists if' equipment adti cinachinery arc shown in respective component workTing papers C-1 through C-l1, Annex 3.

May 1979

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over 15 years including five years grace. These terms and conditions would bereflected in a subsidiary agreement between DRA and AgBank, and are the sameas those used in the Third Agricultural Credit Project (721-AF). Completionof a subsidiary agreement satisfactory to IDA would be a condition of projecteffectiveness.

G. Procurement

4.30 Contracts of US$100,000 or more for purchase of vehicles and equip-ment (US$6.1 1/ million) would be awarded on the basis of International Com-petitive Bidding (ICB), in accordance with the Bank's Guidelines. Domesticmanufacturers would be granted a preferential margin in bid evaluation equalto the prevailing tariff, or 15% of the c.i.f. cost of imports, whicheveris the lower. All other purchases would be made in accordance with localprocurement procedures which would result in reasonable prices. The RDD-RPIU President would be authorized to approve contracts of up to Af 500,000(US$12,500) without first having to obtain further approval and to makepurchases of up to Af 20,000 ($500) without the use of a purchasing committee;local purchases made by bidding would be sealed and in writing only and oncebids have been satisfactorily evaluated they would not be readvertised. Withthese modifications local procurement procedures would be satisfactory to IDAand appropriate assurances that authorization for such procedures would beincluded in the RPIU empowering charter were obtained during negotiations.Contracts for building construction and civil works (total US$9.3 mil) wouldbe generally for small works, of varied design and geographically scattered.Thus they would not be appropriate for procurement under ICB. Such construc-tion would be carried out by contractors selected through local competitivebidding or by construction units of RDD-RPIU. All investment procurementinvolving project funds would be undertaken by the RDD RPIU. Appropriatestaffing and storage facilities would be provided so as to allow adequatestorage of spare parts, building materials and operating stores.

H. Disbursements

4.31 The IDA/IFAD credits would be disbursed, net of taxes as follows:

(a) 100% of total expenditures for civil works and buildings(US$9.3 million);

(b) 100% of c.i.f. value of directly imported vehicles andequipment (US$5.8 million);

(c) 85% of cost of locally purchased imported vehicles,equipment and materials and 100% of ex-factory cost oflocally manufactured vehicles, equipment and materials(US$0.3 million);

1/ Staff housing, buildings, vehicles, and equipment to be Project financedare shown in Table 7, Annex 1.

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(d) 100% of expenditure for dam feasibility study ((US$0.9million) IDA only);

(e) 100% of expenditure for feasibility study for RuralDevelopment II ((US$0.4 million) IDA only);

(f) 80% of sub-loans for wells and pumlps, cooperative storage,village workshops and on-farm development disbursed byAgBank (US$2.7 million);

(g) 70% of sub-loans for fertilizer and seeds disbursed by AgBankduring the first year of the project and thereafter 70% ofthe annual incremental disbursemenits (US$1.8 million);

(h) 72% 1/ of total expenditure of technical assistance andtraining (US$2.6 million); and

(i) 60% of (i) local staff salaries incremental to those committedon March 21, 1979 (US$4.1 million); (ii) vehicle operation andmaintenance (US$3.3 million); and (iii) RPIU operating andmaintenance costs (US$2.7 million).

The estimated schedule of disbursements (Annex 1, Table 8) indicates comple-tion over six years. For categories (f), (g) and (i) disbursements would bemade against statements of expenditures, and supporting documents would beretained by AgBank for inspection by IDA Project Review Missions. Assuranceshave been obtained that AgBank would keep separate accounts fo the creditcomponent for various types of loans made under the project.

I. Accounts andl Audit

4.32 Funds for project investments, all project vehicle operating costs,RDD-RPIU operating costs and for that proportion of local staff salaries to befinanced by IDA/IFAD (para 4.31(i)) would be channelled from the Ministry ofFinance to an account already established with the Da Afghanistan Bank. RDD-RPIU President would operate the account. Except for the credit component,RDD-RPIU would maintain accounts of project funds handled by it in accordancewith appropriate accounting practices. Funds for operating costs, exceptingvehicle and equipment and RPIU operation and maintenance, but including thatproportion of local staff salaries funded by DRA would be channelled throughthe Ministry of Finance to the respective ministry in the normal manner. Eachconcerned Government ministry and agency receive annual budgets and maintain

1/ The remaining 28% would be financed by UNDP; US$2.6 million includes anIFAD grant (US$0.5 million) to be disbursed for the foreign exchangecosts of specialists in monitoring arnd evaluation, cooperatives, andextension, and training fellowships for extension workers.

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proper accounts which are then audited. However the auditing program isusually well behind schedule, a factor contributing to administrative bottle-necks. Furthermore, in order to improve project implementation capacityrelating to local financial procedures the RDD-RPIU annual budgets would beprepared on both a program basis (i.e. by cost of project) and the presentline item system. RPIU would be responsible for operation and maintenanceof all vehicles, equipment and buildings including issuing of fuel, and wouldmaintain separate appropriate cost accounts. The Bank account has initiallybeen funded more than three months in advance of RPIU's requirements and theRDD-RPIU President would have authority to operate on this account withoutfurther reference to higher authority and within the limits only of thealready approved budget. The Bank account would then be reimbursed on a threemonthly basis by the Ministry of Finance. Assurances to this effect wereobtained during negotiations. RDD-RPIU would have financial records pertain-ing to project funds for which they would keep separate accounts, auditedannually by qualified independent auditors acceptable to IDA and submit suchaudited records to IDA and IFAD for review and comment within five months ofthe close of each Afghan fiscal year. The auditors report would include anopinion on whether or not the funds have been used for the purpose for whichthey are provided. AgBank would be responsible for the disbursement andimplementation of the credit component. AgBank would maintain separateaccounts for subloans under the project and (a) have such records for eachfiscal year audited in accordance with appropriate auditing principles byindependent auditors acceptable to IDA; (b) furnish to IDA within five monthsof the end of each fiscal year: (i) certified copies of audited financialstatements and (ii) the auditors report; and (c) furnish to IDA such otherinformation concerning the accounts, financial statements and the audit as IDAmay request. Accounting procedures to enable satisfactory use of Statement ofExpenditure procedures are either now operational or would be established.Further details are shown in Annex 2.

V. ORGANIZATION AND MANAGEMENT 1/

A. Introduction

5.01 The proposals for organization and management have been made on thebasis that DRA wishes to decentralize and ultimately regionalize, agriculturaland rural development, concentrate resources for this development in a fewselected regions, avoid duplication by agencies and departments, improve imple-mentation capacity at the regional/provincial level, and give RDD a majorrole in regional development planning, coordination and implementation. Theproject would largely maintain existing organizational structures of various

1/ Chart I page 37, illustrates the proposed organization and managementoutline; Chart 2, Annex 1, sets out the existing Government Organization.

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departments (mainly Agriculture and RDD) in the concerned provincial adminis-trations, and would strengthen the concerned departments to enable them toimplement the project and, in future, other agricultural and rural develop-ment programs. The project would utilize existing staff and endow them withactive and meaningful roles and sufficient resources and additional staff,thus rendering productive an important but presently underutilized resource.As an innovative measure designed to strengthen planning, implementation andcoordination at the provincial level, the project would establish within RDD aregional planning and implementation unit in Ghazni which would also providethe critical liaison and coordination between the provincial administrations.By focusing on the institutional limitations and opportunities of provincialadministrations, the project would help to improve the Government's capacityto implement development programs both present and future in the provincesconcerned. Furthermore the organization and management proposed would be seenas a pilot operation with the objective of deriving lessons which could beused in future regional and rural development programs in other provinces ofAfghanistan.

B. Rural Development Department - Regional Planning andImplementation Unit (RDD-RPIU)

5.02 In Ghazni a RDD-RPIU with a President, two Vice-Presidents, threeGeneral Directorates (Engineering Survey and Design, Construction, Administra-tion) and relevant technical staff would be established (Annex 1, Chart 3).RPIU would have both a staff and line function. The President would alsoact as Chairman of the Provincial Rural Development Councils (PRDC) ofGhazni, Kabul and Paktika. In planning, administration and management, RPIUwould advise PRDCs on regional agricultural and rural development programsand projects, including preparation of annual cost estimates and work plans.Additional objectives would include strengthening and improving local adminis-trative and management procedures and assisting PRDC with the formation ofappropriate village organizations so as to ensure the people's fullestparticipation in the Project.

5.03 Line functions would include completion of the proposed projectbuilding program including staff houses for all project components and allother project civil works. As Government procedures for building and civilworks construction are time consuming and in the long run probably verycostly, RPIU would have full authority to employ contractors to undertakesuch work. In order to improve operational procedures, implementing capacity,and provide ultimately for improved monitoring of project cost, RDD-RPIU wouldbe empowered to introduce a number of innovative administrative proceduresincluding recruitment of local personnel, fixing local wage rates, introducingimproved warehouse inventory control systems, and administering amended localprocurement regulations. Assurances to this effect were obtained duringnegotiations. Through a public relations directorate, RPIU would stimulatepublic interest in the project. A key function would be monitoring projectimplementation and establishing systems for evaluating project impact on

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APPRAISAL OFAGRICULTURAL AND RURAL DEVELOPMENT PROJECT

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- 38 -

agricultural and livestock production, social changes, staff quality, andinstitutional development. Monitoring and evaluation would be used as amanagement tool and as a basis for development planning. RPIU President wouldnot have direct authority over other Government Department officers, but wouldadvise PRDC on project implementation status and where appropriate recommendsteps necessary to bring about changes or performance improvement.

C. Provincial Rural Development Councils

5.04 The existing Provincial Rural Development Committees would beformally constituted Provincial Rural Development Councils (PRDC). 1/ PRDCresponsibilities, satisfactory to IDA, would be established. Overall agricul-tural and rural development policy would be rmade by the Presidents Council forCoordination of Rural Development (PCCRD) in Kabul within the framework ofoverall DRA agricultural sector policy. PCCRD would also approve annual workprograms before final recommendation to Cabinet through the Ministries ofPlanning and Finance. Kabul, Paktika and Ghazni PRDCs would each be Chairedby the President of RDD-RPIU. Other members, each with equal voting powerwould include the respective Governors, representatives of Government depart-ments and agencies 2/, including the Planning Ministry, and the people. Theprovincial Director General of Agriculture would be Vice-Chairman. Each PRDCwould have a small Executive Council responsible for day-to-day decisionmaking. PRDC would be linked to districts through District DevelopmentCommittees (DDC) chaired by the sub-Governor concerned. DDCs would havedirect linkage with Village Development Councils, the chairmen of whom wouldbe members of each concerned DDC. Cooperative chairmen would also be members.PRDCs would be responsible for approving annual development projects, programsand budgets (prepared by RDD-RPIU) to be sent to RDD and PCCRD and ultimatelythe Planning and Finance Ministries; providing the body through which thepeople's development wishes can be reflected in these approved programs; andproviding the executive authority, at the provincial level, for ensuringproject implementation by the participating agencies and departments. Estab-lishment of the Ghazni PRDC would be a condition of credit effectiveness.

D. Project Implementation

5.05 The Project would be implemented largely by the Ministry of Agricul-ture, RDD, and AgBank, through existing Provincial organizations and agencieswhich would be strengthened with additional resources and funding as required.Apart from the range management, research and the proposed RPIU planning,

1/ Chart I page 37. Chart 2, Annex 1 illustrates present Governmentorganization.

2/ These would include the 2 RDD-RPIU vice-presidents, Director General ofAgBank, Agriculture, AgBank Director and others as required.

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monitoring, public relations, and workshop activities, all project componentswould be an expansion of ongoing programs. Chart 5, Annex 1 indicates anEstimated Schedule of Project Implementation. As the project has importantimplications for future Rural Development Programs and a number of innovativeorganization and management features, DRA and IDA/IFAD would jointly undertakea mid-term review of the progress made by the project and the lessons learntby not later than 3 years after the proposed credit signature date. Assur-ances to this effect were obtained during negotiations.

5.06 Organizational arrangements to implement each component would be asfollows: Minor Irrigation Rehabilitation, Minor Road Improvement and VillageWater Supply would be implemented by RDD through units established withinRDD-RPIU (Chart 3, Annex 1). These activities would be a major expansion ofongoing RDD programs in the project area. EHD or RDD would implement theappropriate village education programs in both health (EHD) and pump operationand maintenance (RDD). In addition to finalizing appraisals, RDD-RPIU wouldcarry out construction works including light drilling, and provide backuptechnical support to villages where improved supplies are installed. WAPMwould provide technical guidance, undertake drilling and well testing anddevelopment in cases where deep drilling is considered the most appropriate.The village water supply component would be a major expansion of RDD ongoingor proposed activities in the project area. AgBank would implement the creditactivities, provide after sales service for farm machinery and water pumps,establish training programs for farmers and village workshop artisans.

5.07 The Ministry of Agriculture Departments of Veterinary Services andAnimal Production, Agricultural Extension and Development, Forestry and RangeManagement, Research, and Cooperative Development would implement the veteri-nary, extension, range management, research, and cooperative components,respectively. The provincial staff would be administratively responsible totheir respective PRDC and technically responsible, as at present, to theirrespective head offices in Kabul. Provincial staff would be required toreport on project implementation progress to RDD-RPIU which would be respon-sible for project monitoring. They would also submit annual provincialdevelopment proposals in their respective fields, to RDD-RPIU for inclusionin the annual Provincial Development Budget and work program submitted toPRDC for approval. Cadastral survey implementation would represent anexpansion of ACCSI's ongoing activities in the two provinces. WAPM wouldrecruit and supervise in consultation with RDD-RPIU, under terms of referenceagreed upon by DRA and IDA, consultants to undertake feasibility studies forstorage increase of Bande Seraj Dam and the construction of a new dam upstreamof Bande Seraj. WAPM would continue to be responsible for the management ofBande Seraj water storage management which under the Project, would be done inaccordance with a policy agreement between WAPM, PRDC, and RDD-RPIU. RDD-RPIUwould recruit and supervise, under terms of reference agreed upon by DRA andIDA, consultants for preparing a second Rural Development Project in an areayet to be selected.

5.08 Government Department and Agency head offices in Kabul wouldcontinue to play an important role in project implementation through the

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Presidents Council for Coordination of Rural Development (PCCRD) 1/ (Annex I,Chart 2) and through the technical supervision of their provincial subor-dinates. PCCRD would be required to meet on a regular quarterly basis, suchmeetings coinciding with the production of RDD-RPIU's quarterly progressreports, which would form the basis of discussion. The powers and respon-sibilities of PCCRD would be satisfactory to IDA and IFAD. The establishmentof the PCCRD would be a condition of credit effectiveness.

5.09 Staffing Equipment, Vehicles and Housing. Total incremental staff 2/to be appointed under the project would include 8 senior staff above the Rankof III, 77 professionals in the Rank III - V, and 192 including 65 extensionagents in the Rank VI - IX. Clerks, drivers and laboratory assistants wouldtotal 97, minor operating staff 150, and village veterinary workers 130. Theproject would provide housing for most of the existing and incremental stafffree of charge. Table 7, Annex I summarizes the staff housing, vehicles andequipment to be financed under the project.

E. Training

5.10 A key project function would include professional, technical andfarmer training. A prime responsibility of foreign experts would be train-ing of Afghan staff in their respective technical fields as well as prepara-tion of appropriate programs, job descriptions and responsibilities. Aminimum of 24 mandays of annual in-service training would be provided to eachextension agent and his supervisor. Similar training would be provided forveterinary staff including animal health assistants and village veterinaryworkers and vaccinators, and Cooperative agents and supervisors. The RDD-RPIUwould be assisted by a project leader, who would be a suitably qualifiedagriculturalist and would be experienced in organization and management ofsimilar multi-sectoral development projects, an accountant-administrator, anda senior engineer for a total of 11.3 manyears. RPIU would also be supportedfor 20 manmonths by an automotive engineer the responsibility of whom wouldinclude organizing intensive in-service training and job specifications forAfghan staff. In order to coordinate training activities and to ensure propertraining of Afghan trainers a specialist training officer would be appointedfor a period of 12 months. Annex 1, Table 4 shows details of Technical Assis-tance cost estimates, and Annex 1 Chart 5 the Project Implementation Schedule.

1/ PCCRD would be Chaired by RDD President; membership would include thePresidents of Extension, Veterinary, Cooperatives, Planning (MinistryPlanning) RDD-RPIU (Ghazni-Wardak) and others as required.

2/ For appraisal purposes, including the preparation of all componentcosts only incremental staff considered necessary to implement the Projecthave been included; staff on station at March 21, 1979 in all concerneddepartments and agencies operating in the Project area would be absorbedinto the Project; IDA/IFAD would disburse for 60% of incremental staffcosts (para 4.31(i)).

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5.11 In technical fields related to irrigation including operation andmaintenance of equipment, irrigation works and concrete production, 20 man-months of overseas training would be provided. Similarly 58 manmonths ofoverseas training including 1 postgraduate study period is included forveterinary services. Each village veterinary worker would undergo a four-week introductory program before being admitted to the village veterinaryservice. Animal health assistants would also undergo similar introductorytraining. Initially such training would be conducted at the RDD-RPIU head-quarters, but later at the Ghazni Regional Training Center to be constructedunder the forthcoming Fourth IDA-assisted Education Project. Range managementand survey Experimental Range Improvement Center (ERIC) staff would receive28 manmonths of overseas training including one 18-month postgraduate fellow-ship. Technicians and professionals attached to ERIC would undergo a 4-weekintroductory training period with the IDA assisted HLDC Experimental RangeImprovement Center where a small cadre of competent range management staff hasbeen built up. Ten manmonths of technical type overseas training would beprovided for technicians in the village water supply component. Agriculturalextension would include 40 manmonths of overseas training for Directors,Supervisors and Subject Matter Specialists. Overseas training totaling 205manmonths (US$0.4 mil.) would focus upon visits to appropriate and relevantinstitutions and projects largely in developing countries.

5.12 Training would be assisted by the construction in Ghazni of aregional extension training center under the proposed IDA assisted FourthEducation Project. The Education Project would establish 25 farmer villagetraining centers in the two provinces. These training centers would be usedextensively for both project staff and farmer training, which would includenot only relevant agricultural technology but education in health, pump, andfarm machinery maintenance. Due to climatic conditions activities in most ofthe Project area must be curtailed during winter. During these four monthsproject management would ensure that a maximum amount of training and retrain-ing was undertaken at all levels.

F. Monitoring and Evaluation

5.13 Monitoring project implementation progress and evaluating its impacton institutions and rural society would be an important function of the RDD-RPIU. A Monitoring and Evaluation Unit (MEU) adequately staffed and equippedwould be set up under the Vice-President of Planning and Coordination. 1/ Aninternationally recruited expert would initially assist MEU to establish a

1/ Annex 1, Chart 3.

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program for data gathering including base line survey work, and subsequentlywith data evaluation. The MEU objective would be firstly to evaluate theproject's progress towards achieving its objectives, secondly to assist withsolving implementation problems, and thirdly to ensure against high risks byestablishing a unit with capability to analyze problems and help managementfind solutions on an ongoing basis. Having established a satisfactory datagathering system which would be as simple as possible, the MEU would evaluatethe project impact not only on agricultural productivity, but on the standardof living and well being of rural society in affected zones. An attempt wouldbe made to use monitoring and evaluation as a management tool. The informa-tion would be used not only by RPIU but by PRDC and ultimately by DRA and IDA/IFAD. Early establishment and successful operation of the proposed unit wouldbe essential in providing sufficient data so as to ensure a proper evaluationof project progress and impact at the time of the project's mid-term review.RPIU would be required to report to DRA through the RDD President and to IDA/IFAD on a quarterly basis on the progress of project implementation and theresulting impact. A set of project key objectives and indicators which wouldform the basis of quarterly reports is set out in Chart 1, Annex 1. The proj-ect provides for the staff, office facilit-ies, equipment and back-up consult-ing services for MEU as part of RDD-RPIU. MEU would be responsible forcompletion, not later than six months from the project completion date, of aProject Completion report which would include an overall evaluation of projectimpact on the rural economy, farmers incomtes and living standards, socialchanges, and institution building. Excluding separate AgBank monitoring andevaluation, the cost of MEU over 5 years is estimated at AF 6.0 million(US$150,000) excluding technical assistance costs.

VI. BENEFITS AND JUSTIFICATION

A. Targeted Beneficiaries and Financial Analysis

6.01 The proposed project would benefit one of the least developedregions of Afghanistan. An estimated 60% of the project area population livesin absolute poverty with income levels of AF 3,400 (US$85) or less. With theproject the average income of the beneficiaries would increase by about 70%,but 52% of the project participants owning an average farm size of 0.8 hawould still remain below the absolute poverty income level, thus highlightingthe rural poverty problem and the need for land consolidation and reform andgeneration of non-farm rural employment opportunities. I/ The project wouldimprove family income and standards of living, by increasing crop and live-stock production throughout most of the two provinces basically through (a)improvement and rehabilitation of minor irrigation schemes serving about

1/ Land Reform is planned for completion by mid 1980; many holders of 0.8 haof 1st grade land would be increased to 1.0 ha particularly in Ghazni;in Wardak the shortage of irrigable land will result in many farms remain-ing below 1.0 ha in area.

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17,000 ha; (b) provision of agricultural extension services over most of theirrigated (90,000 ha) areas, which would be backed up by adaptative researchin the fields of land and water use for crops grown in the project area; and(c) provision of veterinary services and extension of animal production tech-nology. All other project components contribute towards this goal either ina minor way or indirectly.

6.02 Quantifiable benefits from the proposed project would accrueto about 62,000 farm families; about 40% of the Project area population.Families participating in the village veterinary program would total about30,000 of whom perhaps 10,000 would be incremental to those served by agri-cultural credit and extension programs (48,000) under the Project. In addi-tion, about 3,000 to 4,000 nomad and transhumant families would benefitfrom the veterinary program. At least an additional 100,000 people would

indirectly benefit from the village water supply and road components andthe general economic activity generated by the Project. About 13,000 farmfamilies, of whom about 63% are estimated to be below the poverty income levelwould be the direct primary beneficiaries from the total agricultural packageincluding rehabilitation of irrigation systems, development of shallow wells,

agricultural credit, and extension. About 54% of the incremental net bene-fits would accrue to the target group. To demonstrate the projected finan-cial benefits, the following farm models have been selected as typicallyrepresentative; these are based on expected cropping patterns and adoption ofa technical input package 1/ (Annex 1 Table 6).

6.03 Model: Fertilizer and Seed (0.8 ha). In the river valley upperreaches and side valleys, farms are highly fragmented and average size isabout 0.8 ha. The impact of using fertilizer and improved seed combined witha secured water supply for wheat, would result in average net operating percapita income increasing from the present AF 1,120 (US$28) to AF 1720 (US$43)including on-farm wheat consumption, which would increase from about 72 kg to118 kg per capita over four years. About 6,750 farm families (average familysize of 9) would be represented by this farm model. Additional labor require-ments would be met by family labor which is currently under employed due tofamily size relative to land farmed. The financial rate of return (FRR) ofthis model is over 100% after allowing for a 1-1/2% per annum increase inwheat and potatoes for four years 'without' the Project.

6.04 Model: Oxen and Farm Implements (2 ha.). The model illustrates theimpact of fertilizers, improved seed and investment in oxen and implements ona 2 ha farm. Net per capita income, including on-farm consumption, wouldincrease over four years from AF 4,560 (US$114) to AF 5,600 (US$140). Due toshortage of family labor during peak periods on this larger farm, about 52 mandays would be hired for weeding, harvesting and threshing. The FRR, afterallowing for 'without' project increases in wheat and potato production overfour years, is estimated at 45%.

1/ Details of the technical package are shown in Project File WorkingPaper C-6. 1

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6.05 Model: Orchard and Farm Improvements (3 ha). In the lower reachesof Ghazni river water scarcity becomes more acute and about 25% of farm landsare annually left fallow. Project beneficiaries under this category wouldreceive credit for orchard, oxen and farm implement investments, and throughproper regulation of Bande Seraj Dam and construction of permanent diversionweirs and intakes, 0.9 hectare presently fallowed annually, would become fullyproductive. Consequently, net per capita income including on-farm consumption,would increase from AF 2,100 (US$53) to AF 5,000 (US$125) in year five and AF9,700 (US$243) in the year ten when the apple trees reach full production.The estimated FRR, after allowing for four years 'without' project increasesis over 100%.

6.06 Model: Shallow Well (4.0 ha). This model represents a joint ventureof four farm families each owning 4 ha. Cost of shallow well and pumpset (AF48,000 (US$1,200)) is financed 80% by AgBank and 20% by the beneficiaries.Present 4 hectare farm income is estimated at about AF 18,000 (AF 2,000 orUS$50 per capita) including on-farm consumption. With the project, net familyincome would increase by 85% over 5 years to AF 33,400 (Af 3,700 or US$93 percapita) inclusive of wheat and by-products consumed on-farm. The FRR, afterallowing for 'without' project wheat production increases for five years, isestimated at 20%. Summary of financial results of the four representativemodels is shown in Annex 1, Table 6. Details on technical assumptions, yieldincreases, cropping pattern are given Working Paper C-6 of the Project File.

6.07 For livestock, benefits have been estimated on the likely changesin key productive coefficients resulting from adoption of a prescribed programinvolving control of the most serious diseases and parasites. One hundredhead of sheep, cattle and poultry have been taken in each case to illustrateincome changes. The estimated annual income improvement per head at fulldevelopment, three years from first adoption, is estimated at AF 308 (US$7.7)for sheep; AF 246 (US$6.16) for goats; AF 1,003 (US$25) for cattle; andpoultry AF 45 (US$1.13) per head after 2 years. To allow for uncertaintiessurrounding projections of this nature, technical contingencies of 40% forsheep and goats and 50% for cattle and poultry, have reduced these per capitabenefits to AF 180 for sheep, AF 144 for goats, AF 500 for cattle, and AF 22for poultry for sedentary livestock owning families. Benefits for nomad live-stock have been assumed at 50% of these. Each sedentary family is assumedto own 6 sheep, 2 goats, 2 cows, and 5 poultry and would, on adopting the fullveterinary program increase annual income in year 4 by AF 2,478 (US$62) orabout US$7 per capita. In year 7, about 30,000 farm families and some 3,000-4,000 nomad groups would be fully participating. Details of these estimatesmay be seen in Project File Working Paper C-3.

B. Production

6.08 At full development, in year 9 resulting annual production levelsfrom project participating farms are estimated as follows:

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Without With IncrementalProject Project Output

CerealsWheat (tons) 149,000 166,400 17,400Rice (tons) 2,600 4,000 1,400

VegetablesPotato (tons) 241,600 282,800 41,200Mung Beans (tons) - 240 240Onions (tons) 400 400

FruitsApples (tons) - 3,200 3,200

LivestockMeat (carcass dressed wt) /1(tons) 1,750 2,520 770

Milk /2 ('000 liters) 18,230 24,450 6,220Wool (tons) 520 650 130Eggs (kg) 180 930 750

OtherFodder Crops /3 (tons) 2,700 7,700 5,000Straw 1 (tons) 224,300 250,000 25,700

/1 Includes beef, mutton, goat meat and poultry products.X7 Composed of cow and sheep milk./3 Alfalfa and clover./4 Wheat and mung bean.

Incremental output for all crops has been arrived at after allowing for'without project' increases of 1-1/2% per annum during the first 4 projectyears. This increase is roughly in line with trends in national productionduring the past decade. For livestock no similar trend can be shown and no'without project' production increases have been assumed. Except for 1,000 hawhich presently are fallowed each year, but which as a consequence of improvedmanagement of Bande Seraj Dam would be irrigated with the project, total areaunder crops remains unaltered. Project area wheat yields currently range from1.3 to 1.8 tons per hectare. With the project, it is assumed that projectbeneficiaries (13,000 families full impact) would adopt the proposed croppingpattern and technical input package in full including credit financed invest-ments and consequently increase wheat yields, over 4 years, to 2.1 tons perhectare. The extension service component would assist a further 35,000farmers who would increase wheat yields from 1.3 to 1.6 tons per hectare overfour years. Project area potato production presently accounts for about 77%of national production. With the project full technical and credit package(13,000 families) potato yields would increase from 11 tons to 17 tons per

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hectare at full development in year 4. Corresponding yield increase attri-buted to extension service (35,000 families) would be from 11 tons to 12 tonsper hectare over 6 years. The cropping pattern also includes rice, beans,onions and fruits (apple). Incremental output of fruits, beans and onionswould be marginal.

6.09 In the livestock sub-sector, the project would initiate a majoranimal health control program at both the village level and among nomadicflocks and herds. Improved animal health combined with animal nutrition andhusbandry extension would, at full production in about year 11 increase annualofftake for sheep and goats from about 21% to 41%, and for cattle from about9% to 20%. Annual incremental meat production would amount to about 770 tons,milk about 6,200 tons and wool about 126 tons. These estimates are based onannual treatment of 540,000 sheep and goats, 80,000 cattle, and 190,000poultry among about 34,000 families.

C. Marketing

6.10 Cereals. Projected wheat production at full development wouldrepresent less than 1% of national wheat output. 1/ Owing to recurrentdeficits in staple grain (wheat, but also rice, barley, and maize) suppliesin Afghanistan, the incremental wheat production would serve largely as importsubstitute. Due to the predominance of subsistence farm families, the addi-tional output would be mostly consumed on the farms and any marketable surpluswould be easily absorbed by the principal population centers, of Ghazni andMaidan towns, and nearby Kabul. Although the present food balance is notknown exactly, wheat 2/ is transferred from other regions particularly toGhazni where yields are lower. Although t:he proposed project would not makethe two provinces self-sufficient, it would nevertheless ease the food problemand improve the diet of the rural poor.

6.11 Marketed wheat production is estimated at 30-40% of national pro-duction. The primary outlet channels for food crops are the local marketsalthough project area farmers rely heavily on traders for marketing since theGovernment owned Food Procurement Department (FPD) provides only limitedservices. Although available transportation is adequate for marketing allsurplus produce, lack of current market information often benefits traders atproducers expense. Moreover, poor on-farn storage facilities force producersto sell during periods of heavy supply and often at lower than Government

1/ Assuming wheat production continues to grow at the current optimisticannual growth rate of 2.9% from 1982/83 (end of the Seven-Year Plan),total output would reach 4.0 million tons by 1987/88.

2/ The project area population is estimated at 10% of national population.However, wheat output of the project area is only 6% of total nationalproduction.

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minimum prices. To remedy this, the proposed project would stimulate forma-tion of producers' cooperatives which would establish marketing channelsdirectly with wholesalers, or FPD which currently has plans to expand activi-ties in the project area. Furthermore, cooperatives would have access toAgBank credit for financing small storage facilities and working capital, thusenabling them to assist members by purchasing during peak supply periods andselling under more favorable market conditions.

6.12 Fruits and Vegetables. With the Project, the project area wouldmaintain its share of national potato production (77%). In addition to thedomestic market, Afghanistan's proximity to Iran and the Soviet Union offerspotentially wide markets for potatoes and other temperate vegetables. Iran's1975/76 potato consumption estimated at 400,000 tons (10% imported), isprojected to grow at an annual rate of 9% up to 1985. Similarly, the SovietUnion's potato and vegetable projected imports for the same period, is about150,000 tons annually. Provided strict quality control measures are intro-duced, Afghanistan should if necessary, have little difficulty in expandingits fruit and vegetable exports in these markets, due to competitive trans-port costs and existing cultural and trade relationships. The primary objec-tives of the on-going IDA-assisted Fruit and Vegetables Export Project(Credit 779-AF) include strengthening and establishing appropriate institu-tions to monitor the standard and quality of exportable fruits and vegetables(potatoes and onions initially) and stimulating exports of these commodities.Afghanistan has succeeded in capturing a considerable share of grape andraisin markets in Pakistan, India and the Soviet Union. In recent yearsexports of these fruits have accounted for 25% of Afghanistan's foreignexchange earnings. The ongoing fruit and vegetable project will make aspecial effort to increase vegetable exports, particularly to Iran.

6.13 Under the proposed project, incremental annual apple productionwould reach 3,200 tons. At present fruits from the Project are transportedto Kabul or consumed on the farms. Since the incremental apple productionrepresents less than 1% of total Afghan output, marketing problems are notanticipated.

6.14 Livestock. Per capita meat consumption in the project area remainsvery low (10-11 kg) and the annual incremental production of 770 tons by year10 would be easily absorbed by meeting part of increasing local demand.Furthermore, HLDC is expected to sign a long-term export mutton contract soon.The potential export demand for mutton in the Middle East, including the GulfStates, and the Soviet Union, is such that with domestic consumption growth,the incremental project output would have outlets at current prices in almostunlimited markets. Finally, the incremental milk output at full developmentestimated at 6.2 million liters (equivalent to 1% of total projected Afghanproduction) would be consumed on the farms as fresh milk or as traditionalmilk products such as ghee, cheese, butter and curds.

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D. Prices

6.15 Two sets of prices, financial and economic have been used invaluing costs and benefits for project beneficiaries and the economy (Table 5Annex 1). Despite Government's intervention in the marketing system, producerprices particularly for wheat continually fluctuate in response to supply anddemand. Annually, the Government decrees floor prices for selected agricul-tural products (wheat, cotton, sugar beet). Cotton and beet prices are effec-tively controlled but, due to organizational and financial weaknesses, FPDhas not been effective in stabilizing wheat prices for both consumers andproducers; this is likely to happen in the near future when the Wheat Produc-tion Project currently under IDA's active consideration is approved forimplementation. Farmgate prices used in farm budget analysis are lower thanthe official Government wheat prices by a margin of 10-15%. It is assumedthat the project area incremental output would largely be consumed on-farmand would not induce farmgate price reductions. For the economic analysis,all tradeable commodities are valued at international prices adjusted fortransport costs and using shadow foreign exchange rates (Af 46 to US$).International price projections issued by the Bank's Commodities Division(June 1978) have been used for wheat, rice, beef and fertilizers. For muttonthe price recently negotiated for export from Afghanistan has been used. Forwheat, the economic farmgate prices are higher than the financial farmgateprices by about 20%. The current Afghan average financial price has beenused in both financial and economic calculations for both cow and sheep milk.Border equivalent prices of fertilizers however are 15% lower than the corres-ponding actual domestic prices.

E. Economic Analysis

6.16 The proposed project is consistent with DRA rural sector objectivesto increase food production and improve the quality of life of the rural poor.Project generated production would save foreign exchange through importsubstitution (wheat) and increase export earnings (fruits, vegetables andmutton), but it would have much wider economic, financial and social benefits.Although quantifiable benefits vary, the Project as proposed, represents anintegrated package in which each componen,t is an equally important part.

6.17 Economic Rate of Return. Economic rates of return have been computedfor those components for which benefits can be reasonably quantified includingcrop production, veterinary services, and the total project. Benefits havenot been quantified for village water supplies. The following assumptionshave been made in the economic analysis:

(a) The shadow exchange rate is assumed to be AF 46 instead ofAF 34 which is the current exchange rate. 1/ Hence all tradeableitems have been converted at t'he shadow exchange rate.

1/ At July 1978; the exchange rate in May 1978 was reportedly Af 45 = US$1.0.

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(b) Due to mobility of labor in Afghanistan and occasionalshortages, the going market wage rate of AF 80 per dayfor unskilled and family labor has been adopted.

(c) Taxes and import subsidies have been excluded.

(d) The project life is assumed to be 20 years.

(e) Provision has been made for vehicles replacement cost,and where applicable other equipment; no residualvalues have been incorporated into the analysis.

The resulting rates of return and sensitivity analyses, which are based on theestimated benefits to be derived from the proposed investments and capitalizedoperations costs (5 years) are given below:

Summary of Economic Rates of Return (%)

ProjectWheat & Wheat & BenefitsPotato Potato Delayed % of

Base Cost Benefits Prices Yields By 2 ProjectRun (+10%) (-10%) -10% -10% Years Cost

Crop Produc-tion /1 17 15 15 14 13 12 85Livestock /2 24 22 22 - - 16 8Total Project /3 18 16 16 15 14 12 93

/1 Minor Irrigation Rehabilitation, Agriculture Credit, Agriculture Exten-sion, Research, Cooperatives, Technical Assistance and Training, ProjectImplementation Unit and Minor Road Improvement and cadastral survey.

/2 Veterinary Services, and Range Management./3 Includes all project components and cost (Table 1, page 32) except the

cost of Irrigation Dam and Project Preparation Feasibility Studies(US$1.1 million).

Calculation of benefits from the Minor Road Improvement Component was basedon road users savings in operating costs. An average daily traffic (ADT) ofabout 30 vehicles (15 trucks, 10 buses and 5 cars) is assumed; no increaseover the life of the project has been included. The road component estimatedbenefits are considered conservative and do not include long run, unquantifi-able but important real benefits, including increased marketing activity,easier access to administrative centers, improved opportunities for increasingbadly needed Government services both production orientated and social, prob-able higher tax collection, and improved wider educational activities forrural people. The condition of most rural roads in Afghanistan and in theproject area, is such that no rural development project as proposed, could besuccessfully implemented without the inclusion of a road upgrading component.

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The long run economic, financial and social benefits far exceed those whichcan be reasonably estimated. Economic rates of return for the remainingproject components have not been separately computed because of interdependency(irrigation, extension, research, cooperatives, credit) or difficulties inquantifying benefits (cadastral survey, range management, and village watersupply). The overall project generates an economic rate of return of 22%which is satisfactory. Project benefit and cost streams are presented inAnnex 1, Table 9.

6.18 Employment. A primary source of employment in the project areais agriculture, whilst an unknown proportion of the labor force is presentlyemployed in neighboring oil rich countries. With a gradual slowdown in laborabsorptive economic activities in neighboring countries many migrant workersare likely to return to the agricultural sector. With the project, on-farmlabor requirements would increase by about 500,000 man days annually whichwould be mostly balanced by utilization of presently underemployed labor.Moreover, during project implementation a total of 700 permanent jobs and 200man years of employment would be generated. Additional unquantifiable employ-ment opportunities would be created through the expected increases in market-ing, commercial and transport activities.

F. Cost Recovery and Fiscal Impact

6.19 Cost recovery of public agricultural investments is an unresolvedissue in Afghanistan. Beneficiaries tend to view Government sponsored proj-ects as 'public goods' and in the past have not been receptive to projectrelated payments, particularly for irrigation water. Water is regarded bytraditional right as a free resource despite it being the nation's mostvaluable and scarce resource. Under IDA-financed Khanabad II IrrigationProject (Credit 778-AF), DRA has agreed to review the overall socio-economicimplications and applicability of levying water charges on direct beneficia-ries of Government financed investments and to implement an agreed system.In the proposed rural development project, cost recovery could be groupedinto 4 categories. First, all agricultural credit financed investments wouldpursue normal credit practices thus recovering full costs. Second, veterinaryservice beneficiaries would pay the actual cost of veterinary medicines (AF4-52 per head). On this basis and assuming the number of animals treated asdescribed in para. 6.09 about AF 12.2 million (US$306,000 1/) could be recoveredfrom year seven onwards. Total recovery from year 1 through 5 could amountto AF 18 million (US$450,000 1/) or about 51 percent of total component cost.Collection would be the responsibility of the village veterinary workers (VVW)and at full development could amount to some 66% of vaccine and drug costs.An effective veterinary service could make a significant contribution toimproving livestock production and improving the standard of living of ruralfamilies, but the cost of providing such a service is presently beyond Govern-ments financial capability. Livestock owners have demonstrated their willing-ness to pay for drugs and medicines under the IDA-assisted second livestock

1/ Based on 1978 constant prices.

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project (Credit 649-AF), under which Credit agreement charges for veterinaryservices sufficient to cover full costs, are to be introduced in 1982. Witha view to introducing some charges in the project area not later than March31, 1981, DRA would study the issue of recovering the cost of vaccines andclinical services by March 31, 1980. Third, for minor irrigation rehabilita-tion, social custom presently prevents direct cost recovery through watercharges and as experienced under the First Agricultural Credit Project (Credit202 AF), credit financing of works, due to both social and land ownershipproblems, is not practical at present. Decree No. 8 makes provision forcredit financing of minor irrigation works but DRA agrees that implementationprocedures require more careful study. Under terms of reference satisfactoryto DRA and IDA, RDD-RPIU in conjunction with Ministry of Agriculture, Ministryof Water and Power and AgBank would, by March 31, 1981 assess the feasibilityof recovering investment costs of minor irrigation works to be implementedunder the Project. The ensuing report would be made available to IDA/IFADfor review and comment and, if cost recovery is found feasible, would includespecific recommendations for the introduction of cost recovery on minor irri-gation rehabilitation works commencing not later than March 31, 1982. Assur-ances to this effect were obtained during negotiations. In the farm budgetanalyses (Annex 3, C-6), farmers' ability to pay existing land tax at the rateof AF200 per hectare (which provides some small indirect cost recovery) andsocial tax at AF 400 has been demonstrated. However, beneficiaries with lessthan 1 hectare should not be required to pay project fees due to their incomebeing below the absolute poverty income level. For both irrigation works andvillage water supplies, the beneficiaries would be expected to meet, exceptfor technical advice, full operation and maintenance costs; which have notbeen included in the project cost. Where road improvement applied directlyto specific villages, beneficiaries would be required to contribute unskilledlabor to original investment costs. Fourth, for the remaining project com-ponents, no specific formula would be designed to collect project charges.Cadastral survey, range management, research and extension costs would beborne totally by Government. However, DRA is vigorously pursuing the collec-tion of land taxes, which, as a result of project activities in cadastralsurvey and roads, should increase in the project area in future.

6.20 The proposed project is not expected to create a major fiscal bur-den on the DRA. Incremental operating and maintenance costs would averageAF 76.8 1/ million (US$1.5 million) annually during the five year projectimplementation period, increasing from Af 24 million in year 1 to Af 108million in year 5 (Annex 1, Table 1) in current Afghanis. This amount wouldconstitute 0.3% of the 1977/78 total expenditure for Afghanistan or 0.6% ofthe estimated 1977/78 domestic revenue. After project completion, DRA wouldfinance the recurrent and replacement costs which relate to continuing projectactivities for the remaining period of the project life averaging about AF 107mil (US$ 2.7 mil) annually, before veterinary service cost recovery of aboutAf 12 million.

1/ Of which IDA/IFAD would finance an average of Af 37.8 million (49%)annually.

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G. Risk

6.21 Afghan farmers have repeatedly dlemonstrated their willingness toadopt new and improved technology provided it is thoroughly proven andminimizes risks. By concentrating initiaLly on improving crop husbandryand water utilization and management techniques which do not involve undueexpense or radical crop pattern change it is expected that with the exten-sion, veterinary and cooperative services, farmers are likely to adopt theproposed technology and achieve the estimated increases in productivity andincome. The greatest risk lies in Govermnent's implementation of the pro-posals for project organization and management and for coordination amongstall concerned departments. The project would require close cooperationbetween participating Government departments, ministries and agencies, thelack of which has been prominent in the past in the Afghan development scene.In addition to the major expansion of the provincial RDD, organization andmanagement proposals would build, expand and strengthen existing departmentsand their agencies. At the provincial level good cooperation is likely todevelop under the new Government but this represents a major risk area. Aheavy responsibility would be placed upon senior Afghan staff to accept thechallenge of making the maximum use of the comparatively short periods duringwhich international consultants would be available to assist them in theirimplementation efforts. In the past, too much expatriate input has resultedin insufficient acceptance of responsibility by Afghan counterparts.

6.22 A further risk is involved in the minor irrigation rehabilitationcomponent where the sociological dimensions involved are not entirely under-stood. Getting farmers to agree to undertake to assist and accept the pro-posed works program and to maintain it adequately is always a risk. A problemcould arise with those farmers near the canal head whose water supply isusually more adequate and who are usually the wealthiest and most influential.Having derived the maximum benefit from the proposed works first, they may notbe particularly interested in assisting their poorer counterparts on the lowerreaches. Decree 8 however provides a legislative basis for minimizing thisrisk.

6.23 Additional risks surround Government policy on land reform andcooperatives which appear as the cornerstone of its agricultural policy. DRAis acting decisively in implementing the land reform and cooperative programsbut the physical, social and administrative complexity in the hands of com-paratively weak Departments and Agencies may prove an overriding constraintto Government's intentions. Without good coordination of support services,production and rural income may suffer a severe, although hopefully temporary,setback.

6.24 The new Afghan Government has so far displayed decisiveness andsincerity in endeavoring to bring about rapid fundamental changes in thestructure of society in general and the alleviation of rural poverty inparticular. Given this and the potential importance of the proposed project,the judgment is that the risks described, although serious, are worth taking.

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H. Environmental Impact

6.25 The proposed project would not have any detrimental impact onthe natural environment of the Project area. On the other hand, projectactivities in the fields of irrigation, agricultural production, forestry,veterinary and range management should contribute to general ecologicalstability in the area, protect water sheds and check soil erosion. The watersupply component would improve not only the accessibility but also the qualityof domestic water for participating villages and lead to an improvement inhuman health in the appropriate influence zones. The veterinary componentwould improve the health of livestock and poultry in the project area, butin order to ensure the livestock numbers do not increase without a parallelincrease in the feed base which could result in further range degradation, itwill be essential for offtake to be increased.

VII. RECOMMENDATIONS

7.01 During negotiations assurances were obtained that DRA would:

(i) Make part of the Credit and Fund Loan proceeds availableto AgBank under a subsidiary loan agreement to be enteredinto between DRA and AgBank under terms and conditionssatisfactory to DRA and IDA including, inter alia, thatDRA would relend to AgBank amounts in various currenciesequivalent to $4.5 million for a term of fifteen years,including five years of grace calculated from the dateof signing of the Subsidiary Loan Agreement, and at aninterest rate of 4-1/2% per annum on amounts withdrawnand outstanding from time to time.

(ii) Transfer to AgBank, title in, and ownership of, the buil-dings to be constructed for AgBank by RDD-RPIU under theProject and the value of such buildings would constitutean equity contribution by DRA to AgBank.

(iii) Cause its Ministry of Water and Power, to employ in con-sultation with RDD-RPIU, not later than June 30, 1980,under terms of reference satisfactory to DRA and IDA,qualified and experienced agricultural and engineeringconsultants to assist with the feasibility studies forrehabilitation and enlargement of Bande Seraj Dam andthe construction of a new dam up-river from Bande Seraj.

(iv) Cause RDD-RPIU to employ, not later than November 30,1980, under terms of reference satisfactory to DRA andIDA, qualified and experienced consultants to assist inthe preparation of a Second Rural Development Project.

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(v) Not later than six months after the Project Closing Datecause RPIU to prepare and furnish to IDA and IFAD a report,based on the work of the Monitoring and Evaluation Unit,to be established within RDD-RPIU on the Project execu-tion and initial operation, its cost and benefits andthe accomplishment of the purposes of the Credit and theFund Loan.

(vi) Take all such action as would be necessary to acquire asand when needed all such land as would be required forcarrying out the Project.

(vii) Cause the Monitoring and Evaluation Unit in RDD-RPIU toprepare in accordance with criteria satisfactory to DRA,IDA and IFAD and furnish, within 45 days of the end ofeach quarter, to IDA and IFAD, a quarterlv report relatingto its program and the progress of project implementation.

(viii) Establish and thereafter maintain in existence a Presidents'Council for Coordination of Rural Development with powers,functions, organization, policies and procedures satisfactoryto DRA and IDA to, inter alia, coordinate the activities ofthe Borrower's ministries and agencies in respect of theProject.

(ix) (a) ensure that owners of livestock pay the full costs ofdrugs and veterinary medicines provided to them as part ofveterinary service; (b) not later than March 31, 1980,carry out a study to examine inter alia, the feasibility ofrecovering from livestock owners the full cost of vaccines,except in times of national epidemic; and (c) not later thanMarch 31, 1981, commence the implementation, on a continuingbasis, of all such recommendations included in the feasibilityreport as may be satisfactory to DRA and IDA.

(x) Cause RDD-RPIU to: (a) carry out and complete a study underterms of reference satisfactory to DRA and IDA, with theassistance of MA and WAPM, not later than March 31, 1981, toassess the feasibility of recovering the costs of investmentson minor irrigation works from the beneficiaries; (b) if suchcost recovery shall be found feasible, to recommend an imple-mentation scheme for the cost recovery; and (c) to commence,not later than March 31, 1982, the implementation, on a con-tinuing basis, of such cost recovery recommendations as shallbe satisfactory to DRA and IDA.

(xi) Recover the full cost of operation and maintenance of MinorIrrigation and Village Water Supply works and facilities fromthe beneficiaries and, not later than six months from theEffective Date (a) carry out and complete a study of the

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appropriate mechanism for the recovery of such costs; and(b) furnish its proposals to IDA for review and comment.

(xii) Not later than October 31, 1981, prepare a program ofimplementation for the establishment of service centersfor nomads and furnish to IDA such program for review andcomment.

(xiii) Cause RDD-RPIU to (a) establish and maintain, in accordancewith consistently maintained appropriate accounting prac-tices, a separate account to record all amounts disbursedor received for, or in connection with, the Project (exceptthe Agricultural Credit component); (b) have the RDD-RPIUaccounts and financial statements (balance sheets, statementsof income and expenses and related statements) and all recordssupporting certificates of expenditure for each fiscal yearaudited, in accordance with appropriate auditing principles,by independent auditors acceptable to IDA: (c) furnish toIDA not later than five months after the end of each suchyear, certified copies of its financial statements for suchyear as so audited and the auditors' report, including aseparate opinion showing whether the proceeds of the Creditand the Fund Loan withdrawn on the basis of certificates ofexpenditure have been used for the purpose for which they wereprovided.

7.02 Procurement

(i) Except for contracts for vehicles, equipment and materialsestimated to cost less than $100,000, goods would be pro-cured under contracts awarded in accordance with proceduresconsistent with the "Guidelines for Procurement under WorldBank Loans and IDA Credits" published by the Bank in March1977 on the basis of international competitive bidding.

(ii) Contracts for vehicles, equipment and materials estimated tocost less than $100,000 equivalent per contract would beprocured after inviting quotations from at least three sup-pliers; such procurement would not in the aggregate exceed$2,000,000 equivalent; and civil works would be procuredin accordance with DRA's competitive bidding procedures orcarried out by RDD-RPIU on force account.

7.03 Project operating procedures and policies would include:

(i) Minor Irrigation Rehabilitation

Four units including two construction units, a pile drivingunit and a small concrete-making facility would be estab-lished within RDD-RPIU to carry out the construction. During

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implementation, three fully qualified engineers would beappointed. Special attention would be given to improvingthe management of Bande Seraj Dam which would be operatedin accordance with policies and procedures satisfactory toPRDC, WAPM, RDD-RPIU and IDA. RDD-RPIU would prepare andfurnish to DRA and IDA, not later than January 31, 1980,the proposed policies and procedures for review and comment.RDD-RPIU would prepare and furnish to IDA for its reviewand comment the first three appraisals, to be made inaccordance with criteria satisfactory to the DRA, IDA andIFAD, for medium and small permarnent diversion weirs andintakes prior to the commencement of work in each case.

(ii) Agricultural Extension

The agricultural extension service in the Project Area wouldbe strengthened in accordance with a program satisfactory toDRA and IDA. All housing would be designed and constructedby RDD-RPIU. During project implementation about 8 fullyqualified subject matter specialists, 7 supervisors, and65 village extension workers would be added to the existingextension staff.

(iii) Applied Agricultural Research

An agricultural research station would be established withabout 20 hectares of suitable land in Ghazni to develop farmtechnology suited to the area and the farmers therein.

(iv) Cooperatives

Special efforts would be made to establish through DCD, atleast 150 multi-purpose service cooperatives in the ProjectArea, including pilot cooperatives for nomads. During projectimplementation, three fully qualified Directors (Rank 4) and19 District Directors (Rank 5) would be added to the existingDCD staff.

(v) Range Management

The Forestry and Range Management Department would establishan experimental range improvement center (ERIC) not laterthan March 31, 1980, to undertake a work program, satisfactoryto DRA, IDA and IFAD.

(vi) Credit

AgBank would: (a) make short-t:erm loans for fertilizers andimproved seeds, and medium- ancd long-term loans for on-farmdevelopment, farm machinery, water pumps, livestock, co-operative storage facilities and offices, and for non-farm

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rural enterprises; such loans being made through cooperativesor directly to individuals; (b) make loans to cooperatives forfinancing the purchase of members' produce and for construc-tion of offices and storage facilities in accordance with apolicy satisfactory to the DRA, IDA, and IFAD and AgBank; andnot later than October 31, 1979 furnish proposals for ade-quately securing loans to cooperatives to IDA for its reviewand comment; (c) make short-term loans in accordance with apassbook system enabling such initial loans to be made toindividuals without joint and several liability and sub-sequent loans to be made on the basis of loan repayment record;(d) establish a branch office in Maidan and progressively,about five sub-branches in main centers in the Project area;(e) authorize the Director of its Ghazni branch to approveloans to individuals of up to Af 50,000 and to cooperativesof up to Af 200,000 without prior approval of the head office;(f) progressively increase loan approval authority of theDirectors of Ghazni and Maidan branches; (g) expand andupgrade its repair workshop and spare parts depot in Ghazni;increase its stock of water pumps and their spare partspresently used by farmers, and improve its after-salesservice for farm machinery by maintaining qualified staffin adequate numbers at the workshop and by stationing 3mobile workshops in Ghazni; (h) give training courses tovillage repair workshop owners and supply spare parts tothem on a wholesale basis; (i) make medium- and long-termloans to village repair workshop owners for tools and spareparts inventory on terms and conditions satisfactory to DRAand IDA, and furnish its proposals for such loans to IDAfor its review and comment, not later than October 31, 1979.

(vii) Veterinary Services

A village veterinary service would be established and theexisting mobile vaccination teams strengthened; HLDC would,in consultation with MA and RDD-RPIU, establish a number ofbuying points in the Project Area. Five fully equippedveterinary sub-clinics would be established in larger dis-trict farm service centers; selected villagers would betrained as village veterinary workers and would work underthe supervision of 4 qualified veterinarians and 16 qualifiedanimal health assistants; and DRA would ensure that adequatesupplies of vaccines, veterinary medicines and drugs areavailable at all times.

(viii) Cadastral Survey

DRA would cause ACCSI to complete, in consultation with RDD-RPIU, by June 30, 1983 the cadastral survey in the main irri-gated areas in the Project Area.

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(ix) Roads

(a) Two fully equipped and staffed (including 2 fully quali-fied road engineers) road construction teams would be estab-lished within RDD-RPIU to upgrade about 400 km of minor roads;(b) the design standards to be followed would be satisfactoryto DRA and IDA; (c) appraisals, detailed survey and design ofroads, prior to upgrading, would be carried out in accordancewith criteria satisfactory to DRAi and IDA. The first threeappraisals of roads to be upgraded would be prepared and fur-nished by RDD-RPIU to IDA for its review and comment prior tothe commencement of upgrading in each case; and (d) DRA wouldcause RDD-RPIU or MPW to maintain roads to be upgraded underthe Project in accordance with appropriate road maintenancepractices.

(x) Village Water Supply

Potable water supply systems would be established in about100 villages in accordance with a plan prepared jointly bythe RDD-RPIU and the appropriate department of the MPW; and(a) each water supply system shall be individually surveyedand designed by RDD-RPIU; (b) the selection of the watersupply system and of the site of installation would be madein accordance with criteria satisfactory to IDA and IFAD; and(c) the first three appraisals of water supply systems wouldbe prepared and furnished by RDD-RPIU to IDA for its review

and comment prior to the commencement of work in each case.

(xi) RDD-RPIU

There would be established, and thereafter maintained, aRegional Planning and Implementation Unit within RDD at Ghazni,with funds, facilities, organizations, powers and policies andprocedures satisfactory to DRA and IDA; and (a) the Presidentof RDD-RPIU would, inter alia, be given full authority, forpurposes of the Project to: (i) authorize purchases of upto Af 500,000 without any further approval or authorization;(ii) make purchases of up to Af 20,000 without the use of apurchasing committee; and (iii) enter into contracts withfirms or contractors for carrying out civil works; (b) alllocal personnel would be employed by RDD-RPIU which wouldalso fix the wages; (c) with the exception o` vehicles ofAgBank and AFC, fuel for all vehicles to be provided underthe Project would be provided by RDD-RPIU in accordance withprocedures to be established by RDD-RPIU; (d) RDD-RPIU wouldset up within its organization and fill the positions of thePresident, two Vice Presidents, three Director-Generals andabout nine Directors with duly qualified and experiencedpersons; and (e) annual and recurrent budgets of RDD-RPIU

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would be prepared on a program and line item basis ("programbasis" means the system of budgeting based on the costs ofthe project or projects on which monies are to be expanded).

(xii) A team of consultants would be employed and maintainedpursuant to the UNDP Project Document which would providefor IBRD to be the executing agency.

(xiii) Provision of Motorcycles and Bicycles

With reference to the obligation of DRA to provide motor-cycles and bicycles for project staff, DRA would examine thefeasibility of enabling the staff to purchase motorcycles andbicycles through credit under the Project. Such examinationwould be completed by March 21, 1980. Upon its completion,DRA would submit its recommendations to IDA for its reviewand comment. Such recommendations would include, inter alia,details of (a) the mechanism by which each purchaser wouldpay for the motorcycle or bicycle to be purchased (throughcredit to be obtained from AgBank or salary deduction); and(b) details of the method and amounts by which staff would bereimbursed for operation, maintenance and depreciation costs.

70.4 AgBank would (a) maintain records and procedures adequate to recordand monitor the progress of the Project Credit component and not later thansix months after the Project Closing Date prepare and furnish to DRA, IDA andIFAD a report, on the execution and initial operation of the Credit Component,including its cost and the benefits derived from it, and the accomplishmentof the purposes of the Credit and the Fund Loan; (b) (i) have its accounts andfinancial statements (balance sheets, statements of income and expenses andrelated statements) and its records supporting certificates of expenditure foreach fiscal year audited, in accordance with appropriate auditing principlesby independent auditors acceptable to IDA; (ii) furnish to IDA and the Fund assoon as available, but in any case not later than four months after the end ofeach such year, (A) certified copies of its financial statements for such yearas so audited and (B) the report of such audit by said auditors, of scope andin such detail as IDA shall have reasonably requested including a separateopinion by said auditors in respect of such certificates of expenditure show-ing whether the proceeds of the Credit and Fund Loan withdrawn by AgBank onthe basis of certificates of expenditure have been used for the purpose forwhich they were provided.

7.05 Effectiveness. The following events are specified as conditions tothe effectiveness of the Development Credit; (a) the execution and delivery onbehalf of DRA of the Fund Loan Agreement have been duly authorized or ratifiedby all necessary governmental action; and the Fund has appointed IDA as coop-erating institution to administer the Fund Loan and the Fund Grant on termsand conditions satisfactory to IDA; (b) the Subsidiary Loan Agreement has beenexecuted on behalf of DRA and AgBank; (c) a Regional Planning and Implementa-tion Unit has been duly established within RDD (with adequate land for its

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offices and depot free of any cost to such Unit), (d) the President, two VicePresidents and three Director Generals for RDD-RPIU have been appointed; (e)the PRDC at Ghazni with membership, powers, responsibilities and functionssatisfactory to DRA and IDA has been duly established; (f) the UNDP TechnicalAssistance Project Document has been signed by all parties thereto; (g) PCCRDhas been duly established; (h) and the appropriate legislative instrument orinstruments establishing RDD-RPIU, PCCRD, PRDC at Ghazni, and making provisionfor the establishment of other required PRDCs has entered into full force andeffect.

7.06 With these assurances the Project would be suitable for an IDAcredit of US$16.5 million and an IFAD Loan of US$13.0 million.

_6i ANE I

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Investment and Operating Costs by Component and YearAf 000

-- - - - - - - -- - - - - - -Year…-- - - - - - -- - - - - - -1 2 3 4 5 Total

A. InvestmentMinor Irrigation 15,796 66,525 19,656 23,916 25.452 151,345Village Water Supply 4,431 18,316 1,800 1,800 1,800 28,147Minor Foad Improvement 14,020 72,367 24,155 26,555 28,955 166,052Agricultural Credit 11,632 46,980 47,800 49,450 49,850 205,712Aericultural Extension 6,798 8,918 10,242 9,604 7,579 43,141Agricultural Research 6,494 4,976 1,790 - - 13,260Co-operatives 4,074 3,192 5,012 2,554 1,931 16,763Veterinary Service 3,320 2,598 2,055 914 - 8,887Range Management - 2,239 9,548 492 - 12,279Project Unit 22,247 29,552 - - - 51,799Cadastral Survey 8,320 - - - - 8,320Technical Assistance 32,640, 37,840 22,640 15,280 10,880 119,280Feasibility Study (Dam) - 32,400 - - - 32,400Feasibility Study (R.D. II) - - 13,200 - - 13,200

Investment Sub-total 129,772 325,903 157,898 130,565 126,447 870,585

B. Operating CostMinor Irrigation 2,969 15,358 15,393 15,393 15,393 64,506Village Water Supply 792 4,888 5,474 5,474 5,474 22,102Minor Road Improvement 3,015 15,510 17,227- 19,627 22,267 77,646Agricultural Credit 320 855 1,178 1,306 1,306 4,965Agricultural Extension 4,910 6,891 8,514 10,331 10,519 41,165Atricultural Research 1,263 2,378 2,757 2,757 2,757 11,912Cooperatives 2,118 4,019 4,323 4,915 4,966 20,341Veterinary Service 2,803 8,884 14,795 23,475 30,602 80,559Range Management - 518 1,094 1.373 1.383 4,368Project Unit 5,725 12,518 12,819 12,819 12,819 56,700

Operating Sub-total 23,915 71,819 83,574 97.470 1070486 384,264

Total (A & B) 153,687 397,722 241,472 228,035 233,933 1,254.849

Price Contingency 7,683 59,658 57,952 77,530 102,930 305,753

C. Total Project Cost 161,370 457,380 299,424 305,565 336,863 1,560,602

May 1979

- 62 -ANNEX 1Table 1Appendix 1

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Project Cost by Year and Category

----------------------- Year ------------------------1 2 3 4 5 Total

----------------------------- Af '000----------------------------- US$ '000

Civil works and buildings 21,732 67,995 70,960 65,376 65,562 291,625 7,290.6

Vehicles and equipment 65,900 145,968 4,098 459 155 216,580 5,414.5

Local staff salaries 11,632 25,647 29,058 31,263 31,263 128,863 3,221.6

Operation and maintenance 1,783 6,575 12,080 20,747 28,123 69,308 1,732.7

Agricultural credit 9,500 41,700 47,000 49,450 49,850 197,500 4,937.5

Technical assistance and overseas 32,640 37,840 22,640 15,280 10,880 119,280 2,981.9training

Feasibility studies - 32,400 13,200 - - 45,600 1,140.0

Vehicle operating and maintenance 6,414 23,289 24,063 24,687 24,687 103,140 2,578.5

Project unit operating and 4,086 16,308 18,373 20,773 23,413 82,953 2,073.8maintenance

Subtotal 153,687 397,722 241,472 228,035 233,933 1,254,849 31,371,1

Price Contingency 7,683 59,658 57,952 77,530 102,930 305,753 7,643.9/

Total Project Cost 161,370 457,380 299,424 305,565 336,863 1,560,602 39,015.0

/1 Includes Af 56,757 (US$1,418.9) for Ag Credit sub-loans.

Mav 1979

-63 - A.NEX 1Table 1Appendix 2

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Project Cost by Component and Category - Base Cost, Price Contingency, and Total

Base Cost Price Contingency Total Cost-------------------- Af'000 --------------------…--

A. Component

Minor irrigation rehabilitation 215,851 52,969 268,820Village water supply 50,249 11,160 61,4(0Minor road improvement 243,698 62,205 305,903Agricultural credit 210,677 59,294 2b9,9-11Agricultural extension 84,306 22,198 106,504Agricultural research 25,172 4,732 29,904Cooperatives 37,104 9,206 46,310Veterinary service 89,446 27,829 117,275Range management 16,647 4,210 20,857Cadastral survey 8,320 416 8,736Project unit 108,499 20,783 129,282Technical assistance 119,280 22,723 142.003Feasibilitv studies 45,600 8,028 53,628

Total 1,254,849 305,753 1,560,602

B. Category

Civil works and buildings 291,625 79,390 371,015Vehicles and equipment 216,580 26,397 242,977Local staff salaries 128,863 35,786 164,649Agricultural credit 197,500 56,757 254,257Technical assistance 119,280 22,723 142,003Feasibilitv studies 45,600 8,029 53,629Vehicle operation and maintenance 103,140 28.844 131,984Project unit operating and maintenance/l 82,953 Z4,425 107,378Operation Amdijmaintenance/l 69,308 23.402 92,710

Total 1,254,349 305,753 l53,.

Percent of Total 80 20 100

/1 Excludes salaries and vehicle operation and maintenance.

May 1979

APPRATSAI. OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Project Financing Plan - by Componant

Benaficiaries AgBank DRA UNDPI IDA IFAD Total

Sub -borrowers------------------------------------------------- Af r0oo ------- -- --------- -

A. Af '000

Minor irrigation rehabilitation 35,779 129,642 103,399 268,820 17

Village water supply 11,959 - 27,509 21,941 61,409 4

Minor road improvement - - 43,352 146,059 116,492 305,903 20

Agricultural credit 36,644 45,332 - 83,940 io4,055 269,971 17

Agricultural extension - - 23,363 _ 46,253 36,888 106,504 7

Agricultural remearch 7,-74 _ 12,309 9,821 29,904 2

Cooperatives - 11,208 - 19,526 15,576 46,310 3

Veterinary sareine 25,576 66,555 13,987 11,157 117,275 7

Range management - 3,128 - 9,863 7,866 20,857 1

Cadastral survey - - - 4,891 3,845 8,736 1

Project unit - 29,932 - 55,269 44,o8o 129,282 9

Technical assistance - - 40,000 57,123 44,880 142,003 9

reasibility studies - - - 53,629 _ 53,628 3

Total - Af '000 62,220 45,332 233,050 40,ooo 66o,ooo 520,000 1,56o,6o2 100

B. us$ '000- -- -- us$ 000 -

Minor irrigation rehabilitation 894.4 _ 3,241.1 2,585.0 6,720.5 17

Village water supply 299.0 _ 687.7 548.4 1,535.4 4

Minor road improvement - - 1,083.8 _ 3,651.5 2,912.3 7,647.6 20

Agricultural credit 916.1 1,133.3 - - 2,098.5 2,601.3 6,749.2 17

Agricultural extension _ _ 584.1 - 1,156.3 922.2 2,662.6 7

Agricultural research - 194.4 - 307.7 245.5 747.6 2

Cooperatives - 280.2 - 488.2 389.4 1,157.7 3

veterinary services 639.4 1,663.8 - 349.6 278.9 2,931.9 8

Range management - _ 78.2 - 246.6 196.7 521.4 1

Cadastral survey - -- - 122.3 96.1 218.4 1

Project unit - 748.3 1,381.7 1,102.0 3,232.0 8

Technical assistance - -_ 1,000 1,428.1 1,122.0 3,550.0 9

Feasibility studies - _ - 1.340.7 - 1,340.7 3

Total - US$ *000 1,555.5 1,133.3 5,826.2 11000 16,500.0 13,000.0 39,015.0 100

Percent of Total 4 3 15 3 42 33 100 '4

4/ Total component costs including price and physical contingency.

APPRAISAL OF

AGRICULTURAL AND RURAL DEVEL0PMENT PROJECT

AFGHANISTAN

Projiect Financing Plan - By Category

Beneficiaries AgBank DRA UFDP IDA IOAD TotalSub-borrowers b1

------_______-_-_-_--__------ --------------- ------------- Af ' 000 --- -- ----- --- ------------ ----------------

A. Af '000

Civil works and builsings - - - 163,310 128,315 291,625 IY

Vehicles and equipment 121,284 95,296 216,580 14

Local staff salaries 571 50,972 43,29( 34,023 128,863 8

Agricultural credit /1 36,644 40,0(0 79,304 98,30) 254,257 16

Technical assistance 33,345 48,123 37,812 119,280 8

Feasibility studies 45,600 - 45,600 3

Vehicle operation 41,255 34,655 27,230 103,140 (

RPIU - Operation 33,180 - 27,871 21,902 82,953 5

Operation and maintenance 18,758 3,537 47,013 - - 69,308 4

Unallocated 6818 1,224 60,63 6,655 96,556 77,113 248,996 16

Total-Af '000 62,22, 45,332 233,050 4o,000 660,000 52000 560602 100

B. S$ ' 000' --------------------------- ----------------------- tS' 000 ----------------------------- _--------_-

Civil works anid baildings 4,082.8 3,207.8 7,2e90.6 19

Vehicles and equipmnent 3,032.1 2,382.4 5,414.5 14

Local staff' salaries 14.3 1,274.3 1,082.4 850.6 3,221.6 8

Agricultusr5,l credit 916.1 1,000,0 1,982.6 2,457.7 6,356.4 16

Technical assistance 833.6 1,203.0 945.3 2,981.9 8

Feasibility studies 1,140.0 - 1,140.0 3

Vehicle operation 1,031.3 866.4 680.8 2,578.5 7

RPIU - Operation 829.5 696.8 547.5 2,073.8 5

Operation and aaintenance 469.0 88.4 1,175.3 - - 1,732.7 4

Unallocated 170.4 30.6 1,515.8 166.4 2,413.9 y927 6,225.0 16

'Ibtel-US$ '000 1,555.5 1,133.3 5,826.2 1,000 16,50 13,000 39,015.0 100

% of Total 4 3 15 3 42 33 100 100

Li Includes price contingency for all sub-loans.

-Rao F

APPRAISAL OF

AGRICULTURAI ASND RURAL I)RVELOPRFFIf PROJECT

AFGILANISTR_

Technical Asniotanee - Consltant Servics1

No, of Uolto, UnIit Coot Forign F-rigo Foreign Foreign Foreign Foreign Foreign Forsig

Unit _____________ Foehango Total OŽ,oisohge ToteS locng Total E-,h-sg Tota oeh-ngs Total boo iohng Tta Local Ooh-sgs Tetal &b,9

ProJoet Loader n. tt 60 333 3,000 4,00U 3,080 4,000 3,00() 4,0UU 3,000 4,ooo 3,000 1,000 5,000 15,000 20,000 125 375 500 75

ARc...ot.nt-Adaioiotrstor n.tt. 48 310 2,880 3,840 2,880 3,84o U,88o 3,840 UL,4io 1,920 i,44R t,9ORS 3,8400 11,530 15,360 96 2(38 38½ 7

Senior Roglose T li. 36 320 2,880 3,6460 2,880 3,8114 ,9 1,92 CR 90 70 90 595 86o L R

Sc-igatiun Eginer-. t 320 ,8 3,S ½'o 1,920 - - - -6 bOO 4,~320 3,

Thote-st Opeoiatist t.hb. 24 320 2,000 3,860( 1,920 2,560 490 640 485 64o0 1,920 5,760 7,680 48 146 192 75

T-oiniog OfMino nInth. 12 320 2,880 3i,61BW- - - - 960 S,880 3,860 Rh 72 96 75

Songe Natnene-t Opevialint 1. 6 320 - - 2,800 3,84U 480 hio 26o 320 2460 320 I,O80 3,840 5,120 32 96 128 75

ivotook ProUntion Sp~eottisto. 16 320 - - ,44o 1,920 1,660 1,920 400 66o 460 665 1,280 3,8611 5,120 32 96 128 75

Cooperative Ueetaltt o.tch. 24 320 2,880 3,840 1,44o 1,920 600 66o 18o 66o 48o 640 1,920 5,76o 7,680 68 166 192 75 -

Automtive Egibe*'l onth. 00 2650 2,130 2,880 U,OOU 1, 440 160 260 i6o 240 - - 1,200 0,600 4,8o0 30 90 120 75

-Roinrn ouU20rsln0tiun20 5,7600 Th 6644

spenialSot a.ah. 16 320 (20 260 2 c0- 8! AOo 320 MO 320 TOo4 32 ,6 ,2o 570 3

U-sp-eified Shoert-Thm a.tnh. 32 320 i,44o 1,920 1,920 2,56o 1680 2,260 1,44o 1,920 1,20 t,608 2,90 7,6881 1003962 256 75

Ceosflltants

Ron-total W).35LiI _1700) L28,8 25,2000 33,600 13,740 i8,20 8,yoo 11,80 7.800 oo,400 25,720 77,180 iO,8 643 1,929 2,570

th. 205 80 3-312 3_816_ ____ ______ _36 i 90

CroOning a. nit. 285 8o 3,360 ,,~~~~~~~~~~~~~~~~ , 18 ~~ 260~ 8_6 .1±2 3323 2 3,880 632 68o o 660 L4_60'O 16,680 61 369_

SuN-ntalt0,03 32,660 25,016 37,860 117,628 p2,64o) 12,012 15,280 8,232 10,680 27,360 91,930 119,200 6886 2,298 29377

Price PontisgeNoy 1,251 l~~~~~~~~~~~ ~~~~~~~~,63 ,352 5678 4,230 _0,633 2,0 ," ,22 4,787 6,386 18337 22,723 159.6 4o8.4 568 72

Tmtn1 bet 66.83 36272 3~283 _43.oi6 21.858 28,073 16,894 20.67 11,856 15,~667 33,746 10803 l62.4ooa 863.6 2.706,4 3,5- 77

Cost b ..od on eplopys-t of --nsItata throoh afiro us$6-10,ORS per -- moth i-Ulditg salary, trovel, f-nilY b-efits, PAean -neh-nds, .angennt ee andtc-o-P support.

Actual tining of ...noltsntre-e-Ito-t -,ead bo nuijeet to progress of project iapl-netation, p-lina- of eqolp-st, vehil-e, Noos.ing and other facul-ties, Sad suld he

agree.d eRas by Project Leader a8 President RD-RPlU. j

Detnilsneerd n trsistog progran bp proj-ct ~ocpene.t is preseted to Tails 2, lasrlatg Rapes 1-2.

May 1979

- 67 -ANNEX 1

Table 5

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Financial and Economice Prices /1(AF per ton)

Financial Economic

Wheat 7,140 8,510 - 10,304 /2

Rice 8,570 9,154 - 11,960 /3

Potato 3,570 3,570

Onion 5,000 5,000

Mung Beans 6,500 6,500

Apple 6,430 6,430

Beef (Carcass) 42,000 45,000 - 51,500 /2

Mutton (Carcass) 70,000 95,220 /3

Goat Meat (Carcass) 60,000 81,620

Chicken (Dressed) 110,000 110,000

Cow Milk 7,000 7,000

Sheep Milk 8,750 8,750

Eggs 45,000 45,000

Alfalfa 2,140 2,140

Clover 2,140 2,140

Wheat Straw 1,100 1,100

Mung Straw 1,100 1,100

Wool 25,400 25,400

/1 In constant 1978 prices./2 The range of economic prices shown are for 1978 and 1985 based on price

forecasts by the Commodities Division, June 1978. (1978 base prices)13 Based on export price to Iran.

APPRAISAL OF

AGRICU1TURAI, AIND RURAL DEVELOPMENT PROJECT

AFGHLANISTAN

Summary of Selected Financial Models for Project Investments

iD MiDor Irrigotion Rehabilation and Agricultural Credit /1

---------------------------------------------------------------- Models --------------------------------------------------- ~------------1 2 3 4

Fertilizer and Seed (0.8 ha) ox and Farm Implements (2 ha) Orchard and Farm Implements 3 ha) Shallow Wells (4 ha)Without With Without With Without With Without With

Pre-Project Project Project Pre-Project Project Project Pre-Project Project Project Pre-Project rkroject Prolect

_______--------------_____------------------------------------------AF ----------------------------------------- _--------__------------_-_ CD

Reventue12,360 13,300 18,407 52,743 56,800 64,916 31,810 34,270 111,120 34,285 36,930 70,595

Operating Costs 128,535 8,535 13,344 28,329 28,329 31,760 28,935 28,935 43,956 34,021 34,021 54,910

Net Operating Revenue3,825 4,765 5,063 24,414 28,471 33,156 2,875 5,335 67,164 264 2,909 15,685

Net Revenue Per Capita /3425 529 562 2,712 3,163 3,684 319 593 7,463 29 323 1,742

Financial Rate of ReturnX10X4X0% 0100% 45% 100% 20%

1/ Detailed Technical Coefficiellts and assumptions are presented in Working Paper C-,6.2/ Includes provision for on-farm consui*ption.3/ Assuming a family size of 9.

May 1979 ' e

APPRAISAL OF

Amrj; CULURAhl. A0D 3URAI, blYELOPI"IS FPROJSCT

AFGEAIU13I6A

incnrnnentai Staff Banning. Buildngs , an eice o ePolc inne

…Lcl SSaf …Sodig-----------------iL-1 St-ff------------------------- -…---------st…ff Uing------------------ -------- buildings---------- _____ -_-___----------------Vhicles--------------------ickabatney Villags FTar

Sesior Asslutnnt/ Minsa Veterinary Shed/ 4-Whnsl TracksStaff B.ak 3-5 Bank 6-9 Clskn/SDt-u Staff WBrbark Bank 1-2 RBak 3-5 Bask 6-9 2,-tc Offic- kha Starag Drive Pick-ups M arclS BicycIes & Bus Tractore

(100 m2) (5I m2) (53 m2) (53 m2)

Res.arch 1 5 10 2 _ _ 1 5 12 _ 1 1 1 6 - -I _ 1

Agr. Credit - 3 3 - - - 5 5 2 1 - 2 _ 6 _ _

BVtla..icn - 15 65 7 7 - - 5 200 _ 5 - - 7 , 25 180

cnspsrnti-nn 1 1t 23 6 15 - 2 - 39 - 6 - 5 6 - 40 -

Peciact ImplesentaticnUnit (PIP)(Including Technical

As_isiasca) B 17 34 25 2B - 14 20 32 - 34 1 1 24 _ _ - 7 -a

Villags Baser Bupply - 5 10 - 20 - - - 5- - -_ 2 3

Miner IrrigationWorks 3 P5 27 - - - 4 15 - _ _ - 7 2 - 6

Cndatenal Snr.ey 2

VOraisar'y Service 3 4 26 1B 130 - 3 1B - 1 Clinic - - 1S 130

BangeM ..nagmcnt - 5 2 4 12 - 4 4 _ 1 - 1 3

Ru-alIcad- 2 1- - -5 2 54 - _ _ 4 1 _ i2 4

Total _ 77 192 97 10 130 17 51 3L4 - 58 3 8 64 10 89 310 26 7

l1 DetViled eampanent east estiuto.s sre Thuan in Prajeet File WBukIng Plprsn Cl.11.

Mty 1979

- 70 - ANNEX 1Tab le 8

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Estimated Schedule of Disbursement

Annual Cumulative Balance------ (US$ Million)------------

IBRD FISCAL YEAR AND QUARTER IDA IFAD IDA IFAD IDA IFAD

FY 1980

September 30, 1979 1/ 0.2 - - - 16.3 13.0June 20, 1980 1.5 1.3 1.7 1.3 14.8 11.7

FY 1981

December 31, 1980 2.0 1.6 3.7 2.9 12.8 10.1June 30, 1981 2.8 2.2 6.5 5.1 10.0 7.9

FY 1982

December 31, 1981 1.5 1.2 8.0 6.3 8.5 6.7June 30, 1982 1.6 1.3 9.6 7.6 6.9 5.4

FY 1983

December 31, 1982 1.5 1.2 11.1 8.8 5.4 4.2June 30, 1983 1.7 1.4 12.8 10.2 3.7 2.8

FY 1984

December 31, 1983 1.7 1.2 14.5 11.4 2.0 1.6June 30, 1984 2/ 2.0 1.6 16.5 13.0 - -

FY 1985

December 31, 1984 3/ - - - - - -

1/ Estimated effectiveness date. Amount shown for disbursement under PPF.2/ Estimated completion date

APPRAISAL OF

AGRICULTURAL AND RURAL DETELOPMENT PFDJECT

AFGHANISTAN

ECONOMIC BENEFIT AND COST STREAMSTOTAL PROJECT AREA

…------------------------------------------------------------------------------ CALENDAR YEARS ---------1978 1979 1983 1981 1982 1983 1984 1985 1986 1987

IBASE YR) ______________________________________ AP 000---=- =_------__------------------

WITHOUT PROJECT_ET FAR_ _NE 0 1_48 49,00 9 0 1_ 1 8 2 6 2 9 2 6 2

NET FART TENEFIT 0 16,478 49,020 95,800 155,939 199,948 206,226 213,179 218,106 221,442

NET BENEFIT STRE44 0 16,47B 49,020 95,800 1 55,939 199,948 206,226 213,179 218,106 221,442

WITH PROJECT

BENEFIT STREAM,BENEFITS-MINCR ROADS 0 0 0 2,480 7,440 12,440 18,600 24,800 24,800 24,800 H

VETERINARY SERVICES 0 0 0 2,573 12,463 25,391 48,234 72,234 95,740 108,5963ENEtITS-EXTENSION 0 0 0 5,669 16,718 42,489 57,731 97.179 125,696 152,211

NET FARM RENEFIT 0 16,834 49,011 99,S02 174,628 267,238 293,795 326,048 342,453 350,789

COST STREAMMliNJR ROADS IMPROVEMENT 0 19,300 97,400 43,400 48,220 53,300 24,650 25,550 24,000 24,000VETERINARY SERVICES 0 6,590 12,100 17,S20 25,630 32,Z50 30,850 29,330 28,385 28,240EXTE NSI CN 0 12,380 16,190 IS,050 20,170 18,300 6,560 3,690 2,700 2,240COOPERATIVLS .0 6,690.0 7,325.0 9,733.0 7,670.0 7,100.0 8,640.0 5,190.0 7,200.0 5,150.0CADASTRAL SURVEY .0 8,592.0 .0 .0 .0 .0 .0 .0 .0 .0PROJECT U,NI T 0 36,111 19,109 9,346 9,346 9,346 10,653 540 18,708 11,873VILLAGE WATER SJPPLY 0 5,930 26,160 7,960 7,960 7,960 6,884 7,340 5,970 5,970RESEARCH .0 8,360.0 7,830.0 4,720.0 2,850.0 2,850.0 7,040.0 5,810.0 2,850.0 2,850.0AGRIC'JLTURAL CREDIT 0 2,452 14,450 13,680 16,380 16,850 2,110 3,965 1,415 1,415RANGE MANAoEMiENT .0 .0 2,9ao.0 2,280.0 1,750.0 1,270.0 1,270.0 2,905.0 1,27O.0 1,270.8TECHNiCAL ASSISTANCE 0 38,660 40,690 24.220 20,050 16,800 0 0 0.4INOR IRRIoATION REHAB. 0 19,845 91,380 37,225 41,600 43,200 20,120 16,980 16,980 16,980

NET BENEFIT STREAM 0 -148,076 -286,603 -78,807 9,623 138,332 309,583 418,961 479,211 536,408

H(DHD

APPRAISAL OF

AGRICULTURAL AND RUTAL DEVELOP1IENT PROJECT

AFGHANISTAN

ECONOMIC BENEFIT AND COST STREAMSTOTAL PROJECT AREA

…---------R E-RS…---…-------- ------------------------------------------------ CALENDAR YEARS -----------------1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

---- ----- --- ------------- -------- ------------ --- AF'000------------ ------ ------- _- -_ _ ___- ___-_-- _- _

ITHOUT PROJECT

NET FARM BENEFIT 223,631 224,712 224,655 224,890 224,590 2Z40819 224,783 224,748 224,712 224,6ff 224,890

ET BENEFIT STRFAM 223,631 224,712 224,655 224,890 224,890 224,819 224,783 224,748 224,712 224,455 224,890

ITH PROJECT

ENEF-IT STREAMbENEFITS-MINOR ROADS 24,800 24,800 Z4,800 24,800 24,800 24,800 24,800 24,800 24.800 24,660 24,800

VETERINARY SERVICES 113,699 114,979 115,137 115,137 115,137 115,137 115,137 115,137 115,137 115,137 115,137BENEFITS-EXTENSION 165,344 177,337 181,582 182,833 182,833 182,833 182,833 182,833 182,833 182,633 182,833

NET FARM BENEFIT 351,213 351,701 352,629 353,853 355,999 358,436 361,187 364,160 366,959 369,354 371,009

LIST STREAMMINOR RCACS IMPROVEMENT 24,0C0 24,000 27,550 25,550 24,000 74.008 249000 24.000 24,000 24,06 24,000VtTERINARY SERVICES 28,120 28,120 30,845 29,330 28,400 28,240 28,120 28,120 28.120 28,120 28,12UEXTENSIiJN 2,020.0 2,020.0 6,560.0 3,690.0 2,700.0 2,240.0 2,020.0 2,020.0 2,020.0 2,020.0 2,020.0CCOPERATIVLS 5,150.0 5,150.0 8,640.0 5,190.0 7,200.0 5,150.0 5,150.0 5,150.0 5,150.0 5150.0 5,150.0PROJELT UNIT 6,540 6,540 6,540 10,653 6.540 6,540 6,540 6 ,540 6,540 6,540 6,540.0VILLAGE WATER SUPPLY 6,884.0 5,970.0 6,884.0 7,340.0 5,970.0 5,970.0 5,970.0 5,970.0 5,970.0 5,076.0 5,570.0RESEARCH 2,850.0 2,850.0 7,040.0 5,810.0 2,850.0 2,850.0 2,850.0 2, 950.0 2,850.0 2,v9.0 2,850.0AGRICOLTURAL CREDIT 1,415.0 5,530.0 8,240.0 9,065.0 6,520.0 1,415.0 1,415.0 1,41. 0 1,415.0 1,415.6 1,415.0RANGE MANAGEMENT 1,270. 0 1,270.0 1,270.0 2,905.0 1 ,273.0 1,270.0 1,270.0 1, 270.'. 1,270.0 li2?*.# 1,270.0MINOR IRRIGATIUN REHAB. 16,980 16,980 20,120 16,980 16,980 16,980 16,980 16,980 16,980 16,9"5 16,980

ET 8ENEFIT STREAM 559,827 570,417 550,459 560,110 576,339 586,551 589,642 592,615 595,414 597,66M 559,464

My 1979

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

FCONLMMIC BtiNEFI T ANqD COST STREAMSTUTAL PROJECT AREA

---------------------------------------------------------------------------- CALENDAR YEARS -1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

ii3ASE YP) ----------------- __------------------AF'OOO ---------------------------------------------------

INCiRE'iENT AL

BENEF I STkEAM13ENEf IT -MVNCR RoAJS - 0 0 2,480 7t440 12,440 18,690 24,800 24,800 24,800Vi8TE RIN,8Y SEKVICES 0 0 0 2,673 12,463 25,391 48,234 72,234 95,740 108,596bCNEF ItS-EXTENSIdN J 0 5,S.69 16,718 42,489 67,731 97,179 1259,696 152,211

NET FAkR HENEi IT 0 356 -9 3,802 18,690 67#289 87 568 112,870 124,347 129,347

ClUST STCEAAt'tNGt RCAtGS IMPRUVEF'ENT C 15,300 97,400 43,400 48,220 53,300 24,b50 25,550 24,000 24,000VETERINAkR zERVICES 0 6.590 12,100 17,620 25,630 32t250 30,850 29,330 28,385 28,240EXT-NiS iq 0 12,383 lo 119 19,350 20,170 18,300 6,560 3,690 2,700 2.240CUUPERATIlVES .0 6,b~90.0 7,325.0 9,730.0 7,670.0 7,100.0 B,640.0 5,190.0 7,200.0 5t150.0CADASTRAL 8URVFY .0 8,592.0 .0 .0 .0 .0 ,0 .0 .0 .0 a;P(CJL-T ULT O 36,111 19,109 9,346 9 346 9,346 10,653 540 18,708 11,873VILLAGE yAl ER SUPPLY 0 5,930 26,160 7,960 7,960 7,960 6,884 7,340 5,970 5,970RE SEAR LH .0 83,j60.0 7,o30.0 4,723.0 2,853.0 2,850.0 7,040.0 5,810.0 2,850.0 2,850.0AGRICULTUPAL LAEUIT J 2,452 14,450 13,680 15,380 16,853 2,110 3,965 1,415 1,415kANiGE tlAiA(,EY+NT .0 .0 2,980.0 2,280.0 1,750.0 1,270.0 1,270.0 2,905.0 1,270.0 1,270.0T ECHI ICAL ASSI STANCE 3 38,660 4d ,690 24,223 23 350 16,800 0 0 0 0MINUR IRR16ATIULJ REHA6. O 19, 84 91,380 37,225 41,600 43,200 20,120 16,980 16,980 16.980

NET bENEFIT STRLAAi 0 -164,554 -33 ,623 -174,607 -146,315 -61,617 103,356 205,783 261,105 314.966

0

May 197947

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

ECONOMIC 8ENEFIT AND CQ;T STREAMSTOTAL PROJECT AREA

*…CALENDAR---YEAR--…---------…--------…---…----------------------------------- CALENOAR YEARS ----------------- -------------- ---…

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998---------------------------------- ___-__--___-----AF' 00 -------------------------------------------------------------

NCREMENfAL

IENEFI I STREAMBENEFITS-MINOR $0ADS 24,8C0 24,800 24,800 24,800 24,800 24,800 24,800 24,800 24,800 24,800 24,800VETERINARY SERVICES 113,6SS 114,979 115,137 115,137 115,137 115,137 115,137 115,137 115,137 115,137 115,1378ENEFITI-EXTENSION 165,344 177,337 181,582 182,833 182,833 182,833 1828,33 182,833 182,833 182,833 182,833

N8T FARM BENEFIT 127,582 126,989 127,974 128,963 131,110 133,618 136,404 139,412 142,247 144,699 146,119

;USt SThEAMMINUR ROADS IMPROVEMENT 24,000 24,000 27,550 25,550 Z4,000 24,000 24,000 24,000 24,000 24,003 24,000VETERINARY SERVICES 28,120 28,120 30,845 29,330 28,400 28,240 2i,120 28,120 28,120 28,120 28,120EXTENSIO3N 2,020.0 2,020.0 6,560.0 3,690.0 2,700.0 2,240.0 2,020.0 2,020.0 2,020.0 2,C20.0 2,020.0COOPERATIVLS 5,150.0 5,150.0 8,640.0 5,190.3 7,200.0 5,150.0 5,150.0 5,150.0 5,150.0 5,150. 0 P,150.0PROJECT UNIT 6,540 6,540 6,540 10,653 6,540 6,540 6,540 6,540 6,540 6,540 h,540.0 -

VILLA8E WAIER SUPPLY 6,884.0 5,970.0 6,884.0 7,340.0 5,970.0 5,970.0 5,970.0 5,970.0 5,970.0 5,970.0 '1,970.0RES EARCH 2, 850. 0 2,850.0 7,040.0 5,810.0 2,850.0 2,850.0 2,850.0 2,850.0 2,850.0 2,850.0 2,850.0AGRiCULTURAL CNEDIT 1,415.0 5,500.0 8,240.0 9,065.0 6,520.0 1,415.0 1,415.0 1,415.0 1,415.0 1,415.0 1,415.0RANGE MANAGEMENT 1,270.0 1,Z70.0 1,270.0 2,9J5.0 1,272.0 1,270.0 1i270_O 1.270.0 1,270.0 1,270.0 1,270.0MINUR IRRIGATION RUHAB. 16,980 16,980 20,120 16,980 16,980 16,980 16,980 16,980 16,980 16,980 16,980

4ET BENEFIT STREAM 336,196 345,705 325,804 335,Z20 351,450 361,733 364,859 367,867 370,702 373,15. 314,574

NTERNAL RATE CF RETURN 18%

o o

0

may 1979

ANNEx I

APPRAISAL OF Chart 1

AGRICUITURAL AND RURAN DFVIELOPUENT PROJECT

AFGHANISTAN

Selected Indicators fio M-nitorins and Eval-atins Aericultural Developsment Pojects

Pro-e.t Consonent JMei.r Obiectives Key Indicators

Vetermiary services and animal - Etend veterisary services to villages and n dic and - Aninal nucbers vaccinated and treatedproduction aspect of extension transhomant pastoralints - Changes in production co-efficients for ynrticipalrtigservice _ Control major aninal diseases ameng participating flocks and herds and flocks

herds - Clinic numbers operating- Improve animal production, decrease nortality, increase MA's and VVWa traind and operating

annual offtake - Numbers of villages serviced- Use inproved veterinary service as a force for social - Nbers of participating farmers and percentage adoption rates

change through increasing appreciation of the value of - Training sessions condocted for AhA's, VVw's, and fanrimproved hygiene, nutrition, and general health control groupsamong fe=ales and young children r Actsal cost recovery and percentage of cost of all drgs,

- Recovery of actsal cost of drugs and nedicines and partial and vaccines usedcost of vaccines

Range management and survey _ Increase knowledge of the ecology, sociology, and economy - Selection of specific areas for survey and studyof the project area rangelands - Identification of numbers and types of people using each

_ FiPd productive species which -ould be established under area, and how regularly tbey do soconditions prevailing and devise appropriate management - Identification at numbers and types of livestock usingsystems which would lead to increased range productivity, each areareduced soil erosion, and improvement in the standard of _ Establishment of age and sex distribution end productivityliving of rangeland users of flacks and herds, and msnitoring changes over tins

_ Prepare a pilot range management,rural development project - Number of species collected and identified in ERICfor all or part of the project area end which would be herbariumsuitable far donor financing - Random plot masurements of annual dry matter production

- Training and educating staff on the total role of the total, by month, and by main specyrangelandjpaetoral system, including its place in the - Anneal profile of main species cosnsmed by livestocktotal economy and relationship with the effects on R Eandom plot measurements of effects of fire brushsedentary farming, and the approach to bringing about collection and recovery ratesan improvemest in range and livestock pruductivity _ Numbers of training sessions for entension agents, ERIC

technicians, and other relevant Government Dept. dtaff- Determine which areas arc regarded as belonging to

identified ge spa by traditional right of usage

3. Cadastral survey _ Accelerate progress of reliable cadastral survey and the _ Nunber of survey teams operatingregistration of all irrigated land in Ghazni and Werdak - Area surveyed per tlooprovinces _ Numbers of farms surveyed and registered titles issued

4. Agricultural credit - Improve access to and use of credit including that for - Number of borrowers by loan nice, type of credit, new Ians,non-farm rural enterprises, short term seasonal inputs, and repeater loansmedium and long term for os-farm development, farm r-eker of borrors by far emachinery, water pumps and livestock, and to cooperative _ Changes in security requirementssocieties - Sice of loan approval delegated to Branch Managers

- Speeding-up the loan application procedures and the - Time of loan processing fron application to completiondecision making authority of local Agricultural Development of securitiesBank Branch Managers - Numbers of Field Staff employed

- Loan applications processed by each Field Appraiser- Number of times each medium and long term borrower

supervised- Changes in productivity and income consequentiat to use of

credit- ices collections as a percentage of loans fallen due by

total and type of loan- Loans outstanding as a percentage of total loan portfolio- Number of branch and sub-branch offices operating

1iny 1979

-76- ANNE 1Chart IPage 2

APPRAISAL OF

GhAZNI-IJARDA( AGRICULTURAL AND RURAL DEVELOPMER' PROJECT

APFHANSTAN

Selected Indicators io- tonitorine and Evaluating Anricultural Development Projects

?ro%res Cnorronentc Maoir Obiectives Key Indicators

5. Tochnical assintance and training - Provide advisory services in technology and where - NSober of specialists on stationrelevant management and adninistration - Number and types of trainiog programs prepared sod

- Establish specific training programs for concerned imple-mnteddeparttento and staff - Roober and grades of personnel completing training

- Provide guidance and advice for the establishment coursesand effective operation of all aspects of RPIU - Number of job specifications completed

- Prepare job descriptions including objectives and F Farsi language technical publications produced furresponsibilities far Afghan technical and senior staff useclerical staff

- istablish effective farmer training prograsa- Assist with and advise on establishment of an

effective nonitoring and evaluation system

6. Agricultural extension - Progresuively increase and upgrade the quality and - Extension agents, supervisors and subject matternumber of extension agents specialists appointed and completing introductory

- Diffuse as rapidly as possible existiog and sew ba=ic trainingtechnology through extension agents to as Large a - NRober of training sessions completed and numbernumber of farmers as possible completed by each technical extension staff member

- Encourag. farmers to improve water managemont and - NSmber of participating contaat fa-rmesutilization and to divernify cropping patterns so as N-mber of visits by EA per contact farmerto achieve maximum physical output and finachial - Changes in cropping pattern, crop production andreturn per unit of water u.ed yield, and income of participating farmers

- Provide feedback to research workher on farmer and - Ratio of extension agents to number of farmers andtechnical problems requiring research irrigated land area in 'eone of influence'

- Establish a number of 'Farm Service Centers' - NSmber of service centers established; record ofas a focal point for farter information amd training activities and farmer use of each center andand improvement of farmer access to Government participating agencyServicen including credit, extemnion, cooperatives,veterinary, fertilizer aod agro-chemical=. ruraldovelopunit, wheat procurement

- Provide office space and working facilities forGoveroment agricultural service departments andagencies in rnral area=

7. AgricIultural research - Develop improved technology adapted to the project - Number of trials both on station and at farm levelarea (climate, soils, waterl and target group, and undertakendesigned to yield maximom economic retrns by unit - NRober and type of improved techniques by cropof land (both raimfed and irrigated) and water reno-mnnded, on basis of analysed trial data

- Provide back-up training and specialist advice fur - Nvmber of farm surveys (fact finding) completedextension sorvice subject matter specialists and - NSmber of training sessions undertaken at stationsupervisors and in field and numbers attending, including

- Ensure rapid analysis of trial data and early farmerspublication in a form suitable for use by exte.nionagents

- Initiate research designed to develop effectiveeconomic soil conservation techniques on both rainfedand irrigated land

- Initiate ressarch and cooperate with other relevantagencies to develop improved water utili:ationtechniques within traditional irrigation =ystem=

8. Agr;cultural cooperatives - Promote the establishment of viable, selIf-=fficient - Numbers of primary cooperatives registered andmulti-purpoue ucoperatives number of financial members

- Through efficient supervision and extension train - Number of financial statements audited and time elapsedcooperative office-bearers and nembers to efficiently between completion tf financial year, presentation ofdischarge their dutie= and responsibilitie= financial statements, and audit completion

- Analysis of annual financial outcome by cooperativeand member

- NSmber of loans made to cooperatives by loam size andtype of en-edit

- Loan repayments as a percentage of loans fallen due- Number of training sessions completed - total, and

for each cooperative- Somber of extension/supervision visits by cooperative

and cooperative agent- NSmber of training sessions for cooperative agents- Nm_ber of coperative agents appointed

Mly 1979

- 77 - ANNEX IChart I

APPRAISAL OF Page 3

AGRICULTURAL AdND RURAL D)VEIIPMs'dT PROECT

AFGHbANISTAN

Selected Indicators for .onitorso and E-luarti- Asrrulrural Dev-loront Projeata

Proiect Cotponest Malor Obiectives Key Indicators

9. Minor road i=provenent - Establish a unit capable of opgradiog to reasonable all-weather - Length of road upgradedstatus about 400 kl of feeder and tertiary roads - Land area, and population served per ko of road improved

- Critical naintenanos of rural roads not covered by activities - Chnsge in traffic volum- over tiee on roads opgreded ufingof Public Workb RBod Construction and Mainteoance Department 'without project' traffic flow an bass

- Scio-scan.. ic fipsot of road inprove.eet- Invost,sent coot by total, kilometer and beonficiany

10. Village water supply - Installation of pollution free reliable water supply for - Nu-ber of water supplies installedd-netic use Is, about 100 vilgs-Bober ci ViIlagas, and population aenviced

- In each concerned village establish a progran designed to - Percentage of total population actually sing isproved watereducate villagers so the value of using unpolluted water - Changes in health and social attitude

- Reduce wnterborne and water related diseases - Investmnnt cost by total, per well and beneficiary

11. Minor irrigation rehabilitation - Improve reliability of water supply in traditional n-in - Rumber of canals and coosand areas surveyedcanals and reduction of water and crop yield losees - Nuaber and type of rehbilitation works completedR Reduce canal taintenanne costa - Investment coat per canal by total, omit of land urea

- Improve regulation and management of water discharge frum serviced, and beneficiaryBnndi Seraj storage dam - Nuaber of beneficiaries by total and land are cultivated

- Increase area effectively irrigated undec Bande Seraj dam - Changes in weater flow reliability, crop yields, areccos-and by up to 1,000 ha irrigated, and maintenance custs.

12. Regional planning and i=plementa-tion unita. Planning, adnlsistration, - Advise PRDC on regional agricultural med rural deelopment - Bomber, rask, designation of staff appointmets

management progra=s and projects, including preparation of annual .n.t - Bomber of Job descriptions and responsibilities completedesttimtes and approved

- Act as secreteriat to PRDC - Annual development and operating budget- CIordinate prograc and project implementation and advise - Anuasl andited financial stateemots

PRDC os crrent status - Compariso of actual implementation with budget and plan- Strengthen and improve local administrative and managemn.t proposals

procedures - Staff training programs tmplsmentsd and number of staff- Assist PRDC with the formation of and liaison with apprupriate omplectisg

village orgasisatioss so as to ensure the psoplee participation - Type uf and number of village organizations eatablichedin and understanding of the development programs and effectively operating

b. Building csmatroction - Complete or supervise propoaed building construction programs, N-sbers and cost of buildings completed by constructionincluding staff houses, for all project no=ponentn -nit and local comtraetor/a/rtisans.

- Teat new design med constr-ction techniques adapted to local - oNmbers of now designs and tochniques recemneoded and costconditions and functions and suitable for use by local artisans effectiveness in comparisun with PWD designsusing local .mterials

- Maintenance of all project .c.structed bhildings

c. Workhhops R Repair and maintenance of all project vehicles and equipment - Repo and maintena.ce cost by total, kiloreter, and unit- Percentage of vehicles sffentively operating by type and month

d. Procurme.sn - Timely procurement both local snd international of all - NSober of specifications approved aed bide invited by typevehicles, equipment, spares, buiiding and uperating utores of equipment and staresand materials N Bomber end value of bids evaluated and costracts awarded

- Maintenance of adequate stores under inventory costrol systems - Tir elapsed betwemn issuing of bid documents to finaladapted to local procedu-es whici provide for prompt and ev-luation completion, contract completion, and deliverytimely delivery to operational units of goads

- Inventories of key goods and materials And reconciledchanges fos appropriate time spans

e. Public relations - Stimulate public interest and participation in the development - baer of radio brhcd.a.ts and newspaper articlen completedprocess in general and the projoct in particular - Bumber and type of publicity brochures produced

- NBmber of public gatherings addressed, field days organized

f. MPnitcring and evaluation - itor actual project i=plemestation against planned progress - Comparison of project impact in all concerned areas to- Establish systems for evaluating proiect impaot on crop yields, changes, progressive or otherwise in a 'without project'

animal production co-efficienco, area cultivated, cropping situationpattern, irrigation water utilization, farmer income and - Synsute established to effectively achieve key objectivesstandard of living, h.ome health, asd social changes

- Evalsate project impact on staff quality, operatiosalefficiency, and institrtiseal developmtet

- Us. menitoring mnd evaiustion as a management tool mnd an abasis for development plannisg

May 1979

APPRAISAL OF

AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHAMISTAN

Present Government Organization

Public |Education Mnistry Ministry Ministry Minstry Ministry Ministry eputyHeath Agri- Public Water & Interior Planning Finance Prime

| | culture |Works Power Minister

|of RDD

President s

_ _ CoordinatingCommittee

Rural DevelopmentDeparm

oz

-1 FProvincial Governorate .,Police - (Provincial RuralDfec

Law ~Development Committee)

Agi R| ED 1| | ACSCI 2 I | AgBank |AFC ublic Water and ProvincialWorks Rural DevelopPent

l . i ~~~~~~~~~~~~~~~Departmen

Veter Forest Extension Research Coops Tertiary Minor Integrated Rural

|inary| LRage ieed Irrigation| Development

|Exens E Heath | oop| |Education| |

/ Environmental Health Department.2 Afghan Cadastral Survey and Cartographic Institute.

May 1979

APPRAISAL OFAGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTANRural Development Department

Regional Planning and Implementation Unit (RPIU)Proposed Organization Chart

Vice Pnes'.rie Vico President

| Engin..r,ng Panng and Coordination

Drector DrctoGeneral Dect Generalt Constructoon d C Admirnstration

Di rector C.neral |_ Engqm.riring Sur,ey and

_

lretar at ndsrontoto-,, a-

Workshops~FTZaeropi7OtbChief Co

tcres |

I Road Construction | :

Teams r

I l;iq3tIon Constructin | A Teams

I Village Water Suppl

oct.b.,~~ Teams World Bank -19674

0*~~~~~~~~~~~~~~~~~~~~> ~ ~ ~ ~ ~ ~

S t- - - - w--"-- …------------s

Li1 17

X S i T-.g

o Z

E xsmmv . _t XSN2 V

ANNEX I~SChart 5

AFGHANISTANAGRICULTURAL AND RURAL DEVELOPMENT PROJECT

Project mrplementation Schedulel!

Afghan Yea 1358 1359 1360 1361 1362

Pmj~t Year 1979 1980 1981 1982 1983 1904

Proe.t C`onponen ~ M-AJM,J-A S-0 N-D jFM-Am-jJJA S-0N-D JFM-A M- J-A S0ND J-FM-FM-J J-A S0N-DJ-FMA M J JA SC0ND JPM-AIM-J.J-A S

Rande-Maa. em.t.-y

ann Survey .. ..~~~~~~~~~~~ ........ ..

Veterinary

....... ....... ..... .. ~

Minnr lrrigatietr Rehabilitat,an ~ ::I iiii Iiiii i...-village Wvaner SoPppy T .

IMline Read Tmrcnen - '~..__ 22 . .. +. t~~~~~~~~~~~~~~~~~~~........ ....

Reguna. Planning and- -I

- 'raoasot loina- n - -

1 Prolect Leaner 1~~~~~~~~~~~~~~~~~~~~..... ........ ... .....

A~counan As am-nstatr ...

Canpeat-n N8..i

I9 .. It Latdon ..n.e..e..... .....

6 R.ng~~~ M.oq-eot ~ .s....g.Constaot.o

7 Lv.m~~~k P,.d-t- 7 ....Satl Tainin

8 C . aw- 8~- S.r.ey. .ein. adAeria

11. NI olto,mg .,d EBoardmPrIsec..c... Jun and... Effctsnos Seggemhe 199 SoI ak

12 Sh.,t T.- C1 Tntme Sheot-It-;Prjec s1h reriedi.a.t. ndanaltmn at..add..anai ....i....u[..arts...

deene t o cafflyo R-. hicet,eip ntacoalsl.

-82- ANNEX 2

Page 1

APPRAISAL OF

GHAZNI-WARDAK AGRICULTURAL RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Statements of Expenditure

1.0 Force Account

1.01 Under the proposed Project, force account procedures would beemployed by RDD-RPIU for minor road improvement, minor irrigation rehabilita-tion, village water supplies and the building construction program. Whereforce account procedures are adopted, RDD-RPIU through its Accounting Depart-ment would establish systems satisfactory to IDA to monitor the cost in eachcase and produce adequate data to support Statements of Expenditure forIDA/IFAD withdrawal applications. An experienced international accountant-administrator would be employed in the early stages of project implementation(for a total period of at least 3 years) and his responsibility would includethe establishment of satisfactory accounting procedures. In all cases, dis-bursements would be made in local currency. Supervision missions would berequired to spot check civil works undertaken under force account procedures,and make inspections to satisfy itself that the work has been completed andthat the expenditure claim is reasonable.

2.0 Operating Costs

2.01 The project would disperse funds to finance 60% of incremental localstaff salaries, vehicle operating costs and RDD-RPIU operating costs andrespective withdrawal applications would involve Statement of Expenditureprocedures. The participating Government departments each have their ownaccounting departments both at head office and the provincial level. Theaccounting procedures are satisfactory to allow identification of both indi-vidual and total salaries paid. Each Department would submit withdrawalapplications to RDD-RPIU on a monthly basis. The RDD-RPIU Accounting andAdministration Department would satisfy itself that the expenditure claimedwas in line with total budget estimates and for the purposes stated and wouldreimburse the department concerned for that percentage of salaries to befinanced by IDA/IFAD. RDD-RPIU would make the withdrawal application throughAgBank supported with the necessary Statement of Expenditure. Spot checksof the withdrawal applications would be made by supervision missions. AllDepartment accounts are audited by Government Auditors while under the ProjectRDD-RPIU accounts would be audited by independent Auditors under terms ofreference satisfactory to the Association.

3.0 On Lending by Financial Intermediaries

3.01 Under the project credit component, the Agricultural DevelopmentBank would disperse for some 13,000 on-farm development loans which includeshort-term loans for fertilizer, improved seed, and medium and long-term loans

- 83 - ANNEX 2

Page 2

for purchase of oxen, orchard establishment, small farm locally made imple-

ments, water pumps and other on-farm development. Presently, IDA accepts from

the Agricultural Development Bank under the Second and Third Agricultural

Credit projects (Credits 539-AF and 721-AF), and under the Livestock Develop-

ment projects (Credits 375-AF and 6479-AF), Statements of Expenditure to cover

that proportion of short-term lending (seeds and fertilizer) and on-farm

development which is to be IDA financed under the respective credits. AgBank

is experienced with this type of application and its accounting and adminis-

trative procedures are satisfactory. Supervision missions make spot checks of

the data retained by AgBank and this would continue for the proposed Ghazni-

Wardak Rural Development Project. As with all ongoing Credit Projects, AgBank

would have its accounts pertaining to the Project independently audited underterms of reference satisfactory to the Association.

-84- ANNEX 3

Page 1

APPRAISAL OF

GHAZNI-WARDAK AGRICULTURAL AND RURAL DEVELOPMENT PROJECT

AFGHANISTAN

Selected Documents and Data Available in the Project File

TABLE OF CONTENTS

A. Selected Reports on the Sector

A-1 'Journey to Economic Development', Basic Economic Report, Vols. I and II,World Bank Report 1777a AF, March 17, 1978.

A-2 Afghanistan, 'Opportunities for Agricultural and Rural Development',Sector Report Vols. I and II, World Bank Report No. B48a - AF, Nov. 20,1975.

A-3 Horticultural Sub-Sector Survey - Afghanistan, Vols. I and II, World BankReport No. 1324-AF, May 5, 1977.

A-4 'Livestock - the Development Challenge', a Sub-Sector Survey, Afghanistan,Preliminary Draft, May 19, 1978.

B. Selected Reports and Studies Relating to the Project

B-1 Appraisal of a Third Agricultural Credit Project Afghanistan, World BankReport 1490-AF, May 12, 1977.

B-2 Draft Report of the Preparation Mission to Afghanistan on the Agriculturaland Rural Development Project, FAO/World Bank Cooperative Program ReportNo. 1/77 AFG 11, Vols. I, II, III, January 28, 1977.

B-3 Draft Report of the Afghanistan Agricultural and Rural DevelopmentProject. Reconnaisance Mission, FAO/World Bank Cooperative ProgramReport No. 6/76, AFG 9, Feb. 6, 1976.

B-4 Afghanistan FAO/Government Cooperative Program Plan of Operation, ProjectTF/AFG 6, March 1975.

B-5 Final Report to Government of Afghanistan on Agricultural CooperativeMarketing Based on Work of A. K. Tayeh, PACCA Project, FAO Rome 1978.

B-6 Water Resources Development Prospects for the Water Supply of the RuralPopulation in Ghazni Province, UNICEF, Kabul, 1978.

- 85 -ANNEX 3Page 2

B-7 UNICEF, Five-Year Program of Assistance to RDD, 1978-1982.

B-8 A Preliminary Report on Rural Community Development Program in Afghanistan,R. R. Menta,UN/OTC Civil Engineer, March 1974.

B-9 Afghanistan Drinking Water Potential Development Technology, S. Radojicic,Kabul, 1977 UNICEF/WHO Assisted Rural Water Supply Project.

B-10 Democratic Republic of Afghanistan, UNICEF/WHO Assisted Water SupplyProject, Wardak Province, Water Supply Schemes Proposed to be implementedwithin the Rural Water Supply Project, May 3, 1978.

B-11 Ghazni Irrigation System Study for Rehabilitation of Sultan Dam IrrigationSystem; Alexander Vassilev, April, 1969.

C. Working Papers

C-1 Organization and Management

C-2 Technical Assistance and Training

C-3 Veterinary Services and Animal Production

C-4 Range Management and Survey - Experimental Range Improvement Centre

C-5 Agricultural Credit and Farm Model Projected Financial Results

C-6 Agricultural Extension

C-7 Agricultural Cooperatives

C-8 Agricultural Research

C-9 Minor Irrigation Rehabilitation

C-10 Rural Road Improvement

C-11 Village Water Supplies

IBRD 14011R67° - 63°. 69° MAY 1979

DEMOCRATIC REPUBLIC OF AFGHANISTAN35° \N°5s j GHAZNI-WARDAK AGRICULTURAL

,- \ AND RURAL DEVELOPMENT PROJECT1

B A M I Y A N r " / POSSIBLE LOCATIONS OF)e rna5~\ j ( / -FARM SERVICE CENTERS

To ~~~OQ~7 ~~N A ~ R ____RESEARCH STATION

-X j--k S , O - wr S ROADS tDENTIFIED FORR POSSIBLE IMPROVEMENT

"j ~~PAVED ROADS

-- n k V / f ---- GRAVEL ROADS

-c~ RIVERS

/ 2\- SALT LAKES

0 TOWNS OR VILLAGES

\ /fX1$>( Waghatu i) PROVINCIAL CAPITALS

34~~~~~~~~~~~~~~~~~~~~~~ ~~~SiakPROVINCIAL BOUNDARIES

4 - - INTERNATIONAL BOUNDARIES

< gDras^re < L / X LOGARU ROZGAN

D , ~ ~ \r 20, 40 60

/ / , 3, t Ghczni V KILOMETERS

This tnap has been prepared by the/ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~World Bank's staff exclusstely for

the convenience of the readers of

/\Bande / the report to which it is attached.And Th, deotninat,ons osed and theS2 b< < C )ara / And/erarBe h boundartes shown on this map

lit -" do not imply, o, the part of thejag A B UWLo\/,d (akhoandmanits a\ffilPiAaWrBsaitaiasa~~~ u-~~~~~9-- /~~~~~~~~ Joghiori is~~~~~~~~~~~~~jdgnment on the legal status of

I q-KZ. ~~~~~~~~~~~~iany territory or any endorsementI. ~~~~~~~~~~Lumcon or acceptance of such boundaries

33~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~33'-

/ //.) Abdo

/ <' tG H' A Z 4

X ~ ~~ ~ ~~~~~~~~~~ osh maaik dn P A K Monaray

32° ---(-- 4 \Woza Khwa

3 / 32 -

Crtsp-arn U.SSR of } ssU.SS 1 ) \ Sct-P" ~ _ A-" \ nrs,ste\s

'' DEI RESP Oy(g,)-AFGHnAANISTAN ' _Dwacher/ C

IRAN > ot#ncwK' Ist \C /

PAKISTAN J LNeA{

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LU.A.E./ I N D I A THIS MAP DOES NOT REFLECT PROVINCIAL BOUNDARY CHANGES MADE

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