World Bank Document...2000/02/24 · Document of The World Bank FOR OFFICIAL USE ONLY Report No. A317-IN STAFF APPRAISAL REPORT INDIA HIMALAYAN WATERSHED MANAGEMENT PROJECT UTTAR

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. A317-IN

STAFF APPRAISAL REPORT

INDIA

HIMALAYAN WATERSHED MANAGEMENT PROJECT

UTTAR PRADESH

May 10, 1983

General Agriculture DivisionSouth Asia Projects Department

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

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CURRENCY EQUIVALENTS

US$ 1 Rupees (Rs) 9.5

FISCAL YEAR

Indian Fiscal Year = April 1 to March 31

WEIGHTS AND MEASURES

Metric System

PRINCIPAL ABBREVIATIONS AND ACRONYMS IJSED

ADO - Agricultura:L Development OfficerAEO - Agricultural Extension OfficerBDO - Block Development OfficerDDPO - District Development and Panchayal OfficerDOA - Department of AgricultureGBPUAT - Govind Ballab Pant University of Agriculture

and TechnologyGOI - Government of IndiaGOUP - Government of Uttar PradeshIBRD - International Bank for Reconstruction and DevelopmentMOA - Ministry of AgricultureNARP - National Agricultural Research ProjectNLRCDC - National Larnd Resources Conservation and

Development CommissionNWDPC - National Watershed Development Policy CommitteePC - Project Coordinator

SC - State Level Steering CommitteeSDM - Sub Divisional MagistrateSW - Subwatershed

SWMC - State Watershed Management CellT&V - Training and Visit

UP - Uttar PradeshVDO - Village Development OfficerVEW - Village Extension WorkerVLW - Village Level Worker

WDC - Watershed Development Council

Watershed implies a drainage area containing a few thousand or a fewhundred thousand hectares from which water drains towards a single chan-nel. It is a social and economic unit for development and conservation ofwater, soil, forests and related resouces.

FOR OFFICIAL USE ONLY

INDIA


Table of Contents

Page No.

I. BACKGROUND ................................ 1A. Introduction ..................... ................... 1B. Erosion and Flood Damage in India ..... 1.............. C. Project Objectives ....... .............. 6

Project Rationale and Strategy for Development ...... 6

II. THE PROJECT AREA.. 8General. 8Topography. 8Climate .............................................. 9Geology and Soil. 9Socio Economic Aspects .10Administration .............. . . ........ 10Hill Development Organizations .11Livestock .11Pasture Land .12Agriculture ......................................... 13Forestry .14Land and Soil Conservation Programs .15Agricultural Support Services .16Minor Irrigation .17

III. THE PROJECT .. 18A. General Description .18B. Criteria for Preparation of Subwatershed Projects 19C. Detailed Features .22

Forest and Pasture Developulent .22Soil Conservation Measures .23Livestock Development .24Agricultural Development ............................. 25Horticultural Development .28Minor Irrigation ..................................... 28Research .29

IV. COST ESTIMATES AND FINANCING .. 30A. Cost Estimates .30B. Proposed Financing ................................... 32C. Procurement .34

D. Disbursement and Audit ... ........................... 34

V. ORGANIZATION AND MANAGEMENT .............................. 36Central Organization ................................. 36State Level Organization .39Project Implementation ... , .......................... 40Monitoring and Evaluation ., 42

This document has a restricted distribution and nmay 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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VI. PRODUCTION, MARKETING, FINANCIAL RESULTS AND COSTRECOVERY ............................................ 44Yield and Production ................................ 44

Marketing of Produce ................................ 45Farm Incomes ........................................ 46

VII. BENEFITS, JUSTIFICATION AND RISKS ................. ...... 47A. Benefits ............................................ 47B. Economic Analysis ................................... 48C. Risks ............ ................................... 50

VIII. AGREEMENTS TO BE SOUGHT AND RECOMMENDATIONS ............ 51

ANNEXES

1. Cost TablesTable 1 - Subwatershed project Costs: Uttar PradeshTable 2 - GOI Watershed Development Cell

2. Project AreaTable 1 - Watersheds, Subwatersheds and MicrowatershedsTable 2 - Phasing of Subwatersheds and Microwatersheds

3. Table 1 - Cropping Pattern for 1 ha Farm : UPTable 2 - Farm Budget for 1 ha Farm (Irrigated) : UP

Table 2(a) - Farm Budget for 1 ha Farm (Unirrigated) : UPTable 3 - Yield per Hectare (Kgs) and Cost per MTTable 4 - Per Hectare Labor RequirementsTable 5 - Horticultural Budget : I haTable 6 - Horticultural Budget : 0.4 haTable 7 - Price Build-up for Economic AnalysisTable 8 - Financial and Economic Price AssumptionsTable 9 - Yield Projections

Table 10 - Incremental Project ProductionTable 11 - Economic Costs and Benefits StreamsTable 12(a)&(b) Graphs

4. Table 1 - Physical Implementation ScheduleTable 2 - Estimated IDA Disbursements

5. Project Cycle and Responsibilities

6. Related Documents Available in Project File

Chart - 24839 - Project Organization : GOI24584 - Project Organization : State

Map - IBRD 16811R

- IBRD 16813

INDIA


UTTAR PRADESH

STAFF APPRAISAL REPORT

I. BACKGROUND

A. Introduction

1.01 Immediately after the worst ever floods hit northern India inAugust 1978, the Government of India (GOI) appointed a Working Group toformulate an action plan for flood control in the Indo-Gangetic Basin.The working group presented its action plan to GOI in December 1978.Resulting from the plan, GOI in June 1979 decided to select the UpperGanga catchment for treatment, and from which a number of important riversin Uttar Pradesh (UP) originate. GOI also decided that a first phasefive-year project would focus on measures to rehabilitate a number ofsubwatersheds/microwatersheds in each of the two major watersheds.

1.02 Responsibility for project preparation rested with GOI and UPgovernment and to assist in this, GOI appointed a part time expert team toprovide assistance to the states. A team of officials from the UP ForestDepartment prepared an overall development plan for the Nayar Watershed(266,000 ha) in the Upper Ganga catchment and a detailed plan for theMachiad subwatershed (16,700 ha) which is a part of the Nayar Watershed.

1.03 These reports were ready by November 1981 and in November/December1981 a Bank/GOI preappraisal mission 1/ visited UP and prepared detailedsubwatershed/microwatershed plans for the Machiad subwatershed. Thisplan, which would be used as a model for subwatershed plans to be preparedsubsequently, has been revised in consultation with UP government and GOIduring follow-up missions from January-May 1982.

B. Erosion and Flood Damage in India

1.04 On average, floods annually affect an area of about 8.0 million haof the Gangetic plains, including some 3.5 million ha of cropped land.The value alone of crops lost is over US$250 million a year. Damage is

1/ Messrs. L. Ljungman, R.V. Ramakrishna (Bank), R. Noronha, H.L. Teller,K.G. Tejwani and S.N. Bakshi (Consultants). Mr. H. Stier(Bank) completed the project analysis.

caused by the combined effect of excess run-off of rain failing both inthe plains and in the Himalayan range 1/ but no attempts have, so far,been made to differentiate the damage caused by rain falling on the plainor that falling in the Himalayan range. This project seeks only to deal

with measures designed to ameliorate the deterioration of the Hill areasof the Himalayan ecosystem, leading to reductions in rapid and excessiverunoff of rainfall and in silt loads of rivers descending from the range.

1.05 Given below are statistics, from 1953 to 1981, showing the value

and area affected by floods, the population involved, loss of crops andhouses, deaths of both cattle and humans, and damage to public utilities.

Total Maximum in Average/Unit 1953-81 one year year

Total area affected M ha 235.6 19 (1978) 8.1Population involved M 795.0 70 (1978) 27.4

Damage to crops M ha 104.0 10 (1978) 3.6.US$ M 7,200.0 1,030 (1978) 248.3

Cattle lost thousand 2,826.0 618 (1979) 97.4Human lives lost thousand 40.0 11 (1977) 1.4Damage to public

utilities US$ M 3,200.0 582 (1981) 110.3Total damage to crops,

houses and publicutilities US$ M 11,800.0 1,700 (1978) 406.9 a/

a/ These figures do not include the indirect damage caused bydisruption of communications, loss of subsequent production orexpenditure on relief and rehabilitation.

1/ For descriptive purposes within this report, the Himalayan range hasbeen classified into the Shiwalik Range--low foothills adjacent to theGangetic Plain and with altitudes of up to 1,000 m.a.s.1.; theHills--with altitudes ranging to 2,500 m.a.s.1. and in which agricul-ture is generally practiced and the Himalayan range proper including

the alpine region.

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1.06 It can be seen that during the past five years, damage appears tohave been at its greatest. Some of this increase can be attributed toprice escalations but, nevertheless, increasing ecological degradationcoupled with larger human and cattle populations make each new flood moredevastating than its predecessor. The fact remains, however, that theseverity of flooding is increasing although the trend of total annualrainfall remains substantially the same. According to the Central WaterCommission, the area prone to floods in India is about 34 million ha ofwhich 24 million ha (70%) fall within the Indo-Gangetic basin states ofPunjab, Haryana, Rajasthan, Uttar Pradesh, Bihar, West Bengal and the

Union Territory of Delhi. Rivers rising in the Himalayan range in thestates of Jammur and Kashmir, Himachal Pradesh, Uttar Pradesh, and theKingdom of Nepal, all affect flooding in these states.

1.07 The average value of damage to crops, houses and public utilities

over the period 1974-1979 comes to about US$1,020 million annually whereasthe outlay on flood control works during the same period amounted to lessthan US$90 million yearly. These control works have been confined mostlyto embankments and engineering structures alongside rivers in the plains;however, some but limited preventive measures have been carried out in theupper watersheds of selected rivers.

1.08 Many recommendations have been made by various committees since1954 concerning measures that should be taken to control floods, butneither the Central nor State Governments gave the matter the attention itdeserved until 1978, when GOI appointed a Working Group to formulate anaction plan for flood control in the Indo-Gangetic basin. It wasenvisaged that the program should integrate engineering works downstreamwith soil conservation, reforestation and other watershed treatmentmeasures upstream of the flood-prone rivers and their tributaries.

1.09 The action plan presented by the Working Group identified 18 majorcatchments in the Ganga basin covering some 50 million ha as requiringaction. In the short term, the report proposed two separate but coor-dinated five-year programs:

(a) construction of downstream flood control engineering works,costing some US$1,230 million and protecting an estimated 5.5million ha; and

(b) upstream watershed treatment covering some 2.8 million ha andcosting an estimated US$870 million. 1/

1/ The 20-year upstream program was estimated to cost some US$3,400million and treat about 14 million ha.

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With the inclusion of a flood forecasting/warning system and developmentof a program of flood plan zoning, total program costs for the five yearswere estimated at US$2,160 million. GOI earmarked over US$112 million(50% Central and 50% State budget) for upper watershed treatment and some

US$1,000 million (70% Central, 30% State budget) for downstream engineer-ing works in the draft Sixth Plan.

1.10 Deforestation caused by the need for domestic fuel and timbersupplies and livestock fodder, overgrazing of natural grasslands, indis-criminate cultivation on steep slopes combined with poor agriculturalpractices and badly designed roads all contribute to the general ecologi-cal decline observed in many parts of the Himalayas. The outcome of theseactivities is increasing soil erosion which threatens the productivecapacity of the habitable areas of the Himalayan range (the Hills). Atthe same time, it (erosion) increases flash flooding and sedimentationlevels in rivers and which contribute to generalized flooding and earlyreservoir siltation, a reduction in the life of downstream dams,diminished quantities of irrigation water and finally a smaller commandarea.

1.11 The technical solutions to improved land use in the Hills arefairly well known and have been developed through research carried out atthe Forest Research Institute and the Central Soil Conservation and Train-ing Institute (both located in Dehra Dun) and at leading agriculturaluniversities in each of the Himalayan States. The overall approach tosolving these problems is therefore! known, but, so far, little experiencehas been gained in large scale implementation of the detaLiled technicalrecommendations, particularly when involving local populations in thesedevelopment efforts.

1.12 As has been clearly demonstrated in the Sukhna catchment (inPunjab State), reforestation, reduction in livestock numbers and otherrehabilitation measures, such as construction of check dams and carefuldesign of access roads, have already reduced the sediment loads in streamsby half and, when 100% vegetational cover is achieved, siltation will bereduced even further.

1.13 Under the centrally sponsored scheme for conservation in catchmentareas under the River Valley Project, which was started during the ThirdPlan Period, some 300 small watersheds have so far been treated in about30 river valleys of India. The scheme-s main objective has been toprevent premature siltation of multi-purpose dams located on these riversand to ensure sustained amounts of irrigation water for command areas.Unfortunately results have been less than satisfactory largely because amulti-disciplinary and integrated approach to the planning and implementa-tion of watershed rehabilitation and development has not been taken. Linedepartments of State Governments have operated more or less independentlyof one another, frequently with different subsidy levels for the same

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operation (e.g. horticultural development) and with limited involvement of

the local people. This has resulted in scattered patches of project worksin non-contiguous watersheds and which have not achieved the scheme'soverall objectives.

1.14 The most recent and relevant soil conservation and watershedmanagement experiences in the Himalayan range include the IDA supportedKandi Watershed Project (Loan 1897-IN) in Punjab State, and a West GermanTechnical Assistance Project at Dhauladhar in Himachal Pradesh State. TheKandi Project, although its main emphasis is on engineering solutions towatershed development, has contributed substantially to knowledge of theeffects of controlled grazing and redluction of numbers of free grazingcattle through cattle exchange programs and introduction of stall-feeding.

Initially, it was thought that it would be necessary for the rehabilita-tion of upper catchments to construct numbers of small and medium sizedanti-erosion structures to reduce run-off and erosion from the Shiwalik

Hills. Furthermore, it was anticipated that it would be necessary tocanalise water leaving the Shiwalik Hiills to prevent damage to arable landlying below the Hills. In practice, these assumptions have proved to bewrong. Land closure, afforestation ,and removal of free-grazing cattle andother domestic livestock have proved to be the single greatest factors inrestoration of ground cover and reduction in run-off of rainwater. Sinceproject inception, and with the introduction of the livestock exchangeprogram, the distribution of livestock is as follows:

1981 as % of

Type of Livestock 1977 1981 1977

Goats 7,450 2,000 27%Camels 90 not recorded -Cattle 5,990 3,500 58%Buffaloes 2,290 3,200 140%Sheep 180 not recorded -

In addition, incomes of those farmers stall-feeding buffaloes hasincreased substantially. The afforestation program is on target, with anoverall survival rate in the 1980/81 planting season of 90% (60% in pre-vious season) brought about by improved establishment practices and bettercontrol of livestock. The Dhauladhar Project, which has just completedits final exploratory phase with substantial foreign technical assistance,has developed techniques, farm systems and support services for watershedmanagement projects in areas similar to the proposed project area. Inaddition to these specialized efforts, line departments in the HimalayanStates, have planted considerable areas of forest and orchards, as well ascovering substantial areas with various types of soil conservation works.However, few efforts have been made so far to integrate these actions intoa coordinated program for watershed rehabilitation.

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C. Project Objectives

1.15 The primary objective of the project would be to attempt to mini-mize in selected areas the further deterioration of the Himalayan ecosys-tem caused by depletion of forest cover, overgrazing, bad land use andcareless road construction, all of which has resulted in increasing ero-sion in these areas.

1.16 Project concept is such that the components selected for develop-ment would be acceptable to local populations and are so designed thatthe great majority of persons living within areas selected for rehabilita-tion would perceive themselves as direct beneficiaries of project actions.Furthermore, some of the benefits would be immediate in effect (i.e.,cattle exchange program), whilst others (forest plantations) would requirelong gestation periods. Besides addressing the problems of erosion and inview of the low standard of living generally prevailing throughout theHimalayan region, efforts would be made to improve agricultural produc-tivity and enhance incomes.

1.17 Since cost is a significant factor in determining thereplicability of project proposals, and learning from the experiencegained in the Kandi Watershed Project, greater emphasis would be givento low cost agricultural/silvicultural solutions rather than to expensiveengineering works for conserving soil and reducing excess run-off fromrainfall.

Project Rationale and Strategy for Development

1.18 Degradation of the Himalayan ecosystem is essentially caused byincreasing pressures on the vegetative cover by ever increasing human andlivestock numbers. Besides poor agricultural practices, one of the mainobstacles to solution of the problem is the present livestock managementsystem. In the Hills, livestock are kept mainly for draught purposes andmanure. As a result of declining aimounts of fodder from crop residues,natural pasture, and trees, cattle are kept in stalls only during thenight for collection of manure and allowed to wander freely by day. Fur-thermore, natural forest areas are being systematically over-exploited assources of household fuel and timber.

1.19 To help overcome the fodder shortage, project strategy would beto close areas to grazing in the upper (particularly on ridges) catchmentfor reforestation, thereby increasing the production of fodder, both fromgrass and from planted fodder tree species, for stall-feeding of cattle.Such a practice, would also improve the opportunities for milk productionand help increase self-sufficiency of farmers. In addition, and as ademonstration, a cattle exchange program would be introduced on a limitedscale as experience from the Kandi W;atershed Project in Punjab shows that

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where two local cattle of indifferent genetic potential for milk produc-tion are exchanged for one buffalo, a positive impact on reduction ofoverall cattle numbers and closure of grazing has resulted. In recogni-tion of the fact that all farmers would not accept the stall-feeding of

cattle simultaneously, it has been estimated by forestry and other offi-cials that about one third to one half of the presently degraded forestand pasture lands could be closed for treatment without causing unduehardship to cattle keepers. Whilst the afforestation efforts would beprimarily designed to meet the needs for fodder, the future requirementsfor fuelwood and construction timber would also be accommodated. Inaddition, with a longer term perspective in view, planting of suitabletimber species would take place and which would provide a basis for estab-lishment of commercial forestry. The returns to farmers from forestrywould eventually be considerably more rewarding than from subsistencelevel agriculture; the returns from which are largely dictated by thesmall amounts of arable land available for cultivation.

1.20 Strategy for soil conservationl would be directed towards reducingsoil loss and erosion by low cost methods principally by land closure andby introducing better cultivation practices. Construction of permanentand generally expensive soil conservation structures would be confined tothe protection of blocks of good arable farm land, and infrastructure suchas villages and towns or where ill conceived past road construction hascreated substantial erosion.

1.21 Land closure, in the first instance, could bring hardship toresidents and in order to gain acceptance and support for these land usechanges, it would be necessary to include components that assist in rais-ing food and income levels. Such components would be directed to increas-ing crop yields (through improved extension, better seeds), improvementsto minor irrigation and upgrading of livestock breeding and health serv-ices. In addition, horticultural development (especially fruit trees)would play an important role in increasing incomes.

1.22 Previous experience elsewhere has shown that the approach todevelopment of special problem areas should be comprehensive rather thanpiecemeal. Whatever the magnitude of the comprehensive approach may be,it will only be possible to fully achieve its objectives by consideringall lands, their potential capabilities for development and reclamation,their possible contribution to food, fuel and timber production, theirhydrology, irrigation, water supply, susceptibility to floods, droughtsand other natural hazards such as erosion and siltation.

1.23 Most of these factors are related to the nature of the drainagebasin and the extent to which improvement activities are coordinatedwithin its boundaries. Planning of physical improvements, infrastructureor the mobilization of human resources will suffer serious restrictionsunless carried out within natural boundaries - a large watershed or its

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independent tributaries (sub-watersheds) and the minor streams servingthose tributaries (micro-watersheds). It is also important to note thatarea development plans can be executed gradually, micro-watershed bymicro-watershed, dependent on the availability of finance and trainedmanpower.

1.24 Wherever comprehensive watershed development activities areplanned, it is essential to establish full knowledge of the existingconditions and the potential for development in the given location. Thiskind of development requires a multi-disciplinary approach and only byclose cooperation between specialists in the various disciplines can it besuccessfully planned and implemented. The vertical administrativeorganization prevailing in India makes this cooperation difficult. Theproject, however, seeks solutions to these difficulties.

1.25 Under the project, the above planning principles would be incor-porated into watershed development procedures. The disciplines involvedwould include forestry, agriculture, soil conservation, animal husbandry,minor irrigation and sociology. Thiese would be provided from existingline departments of state governments, from agricultural universities andother research institutions.

TI. THE PROJECT AREA

General

2.01 The proposed project would be located in the state of UttarPradesh (UP). The State is bounded by the Vindhyan Hills and plateau tothe south, with the Gangetic Plain, lying between the Himalayan range andthe Vindhyan Hills, and covering the major portion of the State (see Maps16811 and 16813). The project area covers 2 watersheds, including 9subwatersheds and 83 microwatersheds involving an area of 312,000 ha.Details are given in Annex 2, Table 1.

Topography

2.02 The Himalayan and Shiwalik region of UP extends over 58,000 km2.Elevations vary from about 300 m.a.s.l. on the plains to above 7,000m.a.s.l. on the higher peaks. About 60% of the land area lies in thealtitude range 2,200 to 2,600 m.a.s.l.

2.03 The state gives rise to many rivers which drain onto theIndo-Gangetic Plain with the Tons, Yamuna, Bhagirathi, Mandakani, andPundar being the most important.

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Climate

2.04 There is wide variation of climate which is further accentuated bymicroclimatic changes due to complicated relief and land form. The mainclimatic zones are:

(a) Alpine Zone. Lies above 3,350 m.a.s.l. Annual precipitationis less than 250 mm and falls mostly during winter as snow.

(b) Montane Temperate Zone. Lies between 1,000 and 2,000 m.a.s.l.Precipitation varies from 250 to 1,000 mm. about 30% of whichfalls as snow during winter and the rest as rain during themonsoon (June-September). The winters are long and ratherpronounced and summers are generally mild.

(c) Sub-tropical zone - The low level valleys extending into theinterior lie in this zone. Annual precipitation varies con-siderably with local topography, 15% being received as snow and75% during the monsoon. The southern spurs of the main rangesreceive the heaviest precipitation (2,000 mm or more) whereas inthe inner sheltered valleys rainfall is about 1,000 mm. Summertemperatures are high.

(d) Moist tropical zone - The Sub-Himalayan part has annual rainfallof 1,000 mm or more and all falling during the monsoon. Summertemperatures are very high and, in parts, hot dessicating windsprevail.

2.05 Generally, all slopes with northern aspects receive higher rain-fall than southern facing slopes. Consequently, the former are denselyforested at higher elevation and receive heavy snowfalls during the wintermonths, while the southern exposures have various amounts of deciduousgrowth and grassy cover.

Geology and Soil.

2.06 The Himalayan-Siwalik tract originated in Eocene orogeny. In theinner ranges of the Himalayan massif, granites and quarzites predominate.Gneiss, biotites, schists and phyllites are found in the outer Himalayasand from which have derived red loams, brown forest soils, podsols andmeadow soils and their numerous variations. Except for valleys, the soildepth is generally shallow and rocky outcrops are common. The soils aregenerally poor but respond well to farm yard manure and artificial fer-tilizers.

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Socio-Economic Aspects

2.07 With a population of 111 M in 1981 and a per capilta annual incomeof about Rs 994 or US$123 in 1979-80, UP is the most populous and one ofthe poorest States in India. The statewide population density isextremely high at 377/km2, with an average annual growth rate of 2.3%.The population of UP hill districts was estimated in 1981 to be 4.1 mil-lion with women outnumbering men in Chamoli, Tehri, and Garhwal Districts.Population density in valleys may be as high as 250 persons/sq.km. Thereare nearly 1,500 villages wherein 93% of the hill people live. Over 85%of rural people are cultivators but holdings are small and fragmented andreturns from agriculture are diminishing. Most able bodied men migrate tothe plains in search of a living and women are left behind to carry outall farming operations except ploughing. Women also care for the live-stock, collect fuelwood and water, gather grass, cook meals and raise thechildren.

2.08 People in the hills are well aware of the consequences of humanpopulation growth and excessive livestock numbers. Furthermore, there isconsiderable recognition of the need for closure of grazing lands lyingwithin village boundaries and there are a few examples of such closures(both under supervision of the Forest Department and through privatearrangements).

Administration

2.09 Panchayat Administration. The three tier Panchayati Raj Systemoperates in the State. At the lower level is the gram panchayat, a com-mittee of 7-11 members elected by the gram sabha (village assembly), abody corporate comprising the adult members of a group of villages. Atthe next level is the panchayat samiti which covers a Development Blockand comprises 20 members elected by constituent gram panchayats. At thedistrict level there is a zilla parishad comprising one elected memberfrom each panchayat samiti, chairmen of constituent panchayat samitis,local members of the Lok and Rajya Sabhas, local members of the StateLegislature and the Deputy Commissioner of the district.

2.10 The responsibilities of a gram panchayat cover hea:Lth, water,agriculture, forestry and communications. In addition, government cantransfer to it the management and maintenance of a forest and governmentwaste lands within and near the boundaries of its jurisdiction; theprotection of any irrigation works and the extension and regulation of thedistribution of water from these works. The income of a gram panchayatderives from grants, donations, income from common lands arid 20% of thetotal amount of the land revenue collected in its jurisdiction. In addi-tion, gram panchayats can raise funds through levying of fees and taxes.

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2.11 The functions of a panchayat samiti are somewhat wider and coveragriculture (including forestry, animal husbandry, and fisheries), healthand rural sanitation, communications, social education and cooperation.In addition, samitis are entrusted with the supervision and control ofconstituent gram panchayats to whom they can also delegate any matterwhich is under the direct administrative control of the samiti. Sourcesof operating funds are the same as those of a gram panchayat.

2.12 The zilla parishad (district committee) functions mainly as anexamining, advisory and coordinating body. Its sources of funds aresimilar to those of a gram panchayat, but it can also levy contributionsfrom constituent samitis with prior government approval.

2.13 Government assists and supervises panchayats through the provisionof staff, funds and audits. The staffing pattern is the same for everyBlock and does not take into account variations in population or differen-ces in topography or distances between villages. At the district level,the Deputy Commissioner supervises all panchayats, and is also an appel-late authority. He is assisted by the District Development and PanchayatOfficer (DDPO) who is the ex-officio secretary of the Zilla Parishad. Ata lower level is the Subdivisional Magistrate (SDM) who usually supervisesthe Block Development Officer (BDO) who is in charge of a Block, thelowest administration unit and covering a number of villages. BDO is alsothe Executive Officer and ex-officio secretary of the panchayat samitiand is assisted by a number of lower level functionaries who act as sub-ject matter specialists--some of these are from the same governmentdepartment as the BDO (the Rural Integrated Development Department);others (Panchayats, Cooperatives, Agriculture, Horticulture, and RuralIndustries) are from a pool of officers provided at the Block level bytheir respective line department.

Hill Development Organizations

2.14 The Hill Area Development Department is responsible for coordina-tion of all development work carried out by different line departmentsoperating in Hill areas. As a consequence, all budgetary allocations andstaff appointments are coordinated and approved by the Secretary, HillArea Development.

Livestock

2.15 Every household maintains livestock mainly for draught purposesand production of manure. Cattle, buffalo, goat, and sheep are commonthroughout the project area. Cattle are small with an average body weightof 220 kg for males and 180 kg for females. The small size of bullocks iswell suited to plowing of the narrow terraced fields. Milk yield of cowsis low (150-300 litres per lactation). Buffaloes are mostly nondescriptand are kept essentially for milk production. Because of the difficult

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terrain, the males are not used for agricultural purposes. Goats are keptfor home-consumption whilst sheep are maintained to produce wool for homeuse.

2.16 Husbandry Practices. Only those cattle in milk are fully

stall-fed and all others allowed to wander freely by day. Buffaloes, onthe other hand, are stall-fed as they cannot free graze because of thehilly terrain. Village women now spend upto 8-10 hours daily collectingfodder for stall-feeding of household animals. This entails making anumber of trips to areas often 2-5 km away from the homestead as foddersupplies near at hand are exhausted.

2.17 Animal Health and Veterinary Facilities. Rinderpest, Foot andMouth Disease, Anthrax, Black Quarter and Haemorrhagic septicaemia are allendemic throughout project areas and a major cause of cattle losses. TheAnimal Husbandry Department keeps a check on contagious diseases andmounts vaccination programs when outbreaks occur. To improve animalhealth services, state governments presently have a program to set up aveterinary hospital at the headquarters of each Development Block and 3-5smaller dispensaries in interior areas. While all hospitals have beenestablished, there is a shortfall in the number of dispensaries.

Pasture land

2.18 In UP there are three broad categories of pasture lands; (a) areasunder the control of the government; (b) unclassed forest; and (c) privateforests (para 2.30).

2.19 Grassland. The predominant perennial species in natural pastures

are Chrysopogan sps and which are desirable and nutritious as grazingspecies. Under conditions of heavy grazing, however, and when accompaniedby annual burning, the natural grasslands deteriorate and the moredesirable species are replaced by Heteropogan contortus (a perennialspecies of low nutritive and productive value). Growth of grass commenceswith the onset of the monsoon (June) and under ideal conditions reachespeak production and flowering in September. By the end of October,thegrass matures and, if left ungrazed, becomes the equivalent of standinghay. Presently about 45% of all grassland is subjected to communal grazingby numbers of animals in excess of its carrying capacity. Hence thesegrasslands are under constant stress and result in low productivity (about2-3 MT of dry matter per hectare). Furthermore, present grazing practicespermit little chance for species to flower and set seed. lUltimately thesepastures deteriorate further to the level of containing only pioneerspecies (normally annuals) and at this stage, due to the slparsity ofcover, run-off increases and erosion sets in.

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2.20 In a number of places within the project area in UP, unclassedforest lands have been enclosed by villagers with stonewall fencing. Avillage guard is engaged by the people to keep grazing animals out of thearea. In such areas regeneration is rapid and results in a good growth ofgrass. The villagers have evolved a system for equitable distribution ofgrass. Areas distant from the homestead and only marginally suitable toagriculture are often closed by individuals for hay making.

2.21 Scattered throughout the grazing lands are fodder trees, usuallylocated around the edges of crop lands and along water courses. Loppingsfrom these trees (mainly leaves) help to supplement the poor quality ofgrass and crop residues. The main fodder trees found are Greviaopositifolia, Bauhinia sps., Albizzia sps. and Morus alba. Unlike thegrasses, the foliage of fodder trees maintains its nutrient value at afairly uniform level throughout the year.

2.22 Fodder Balance. It has been estimated that the annual requirementfor maintenance and production is about 2.35 T of dry matter per animalunit. Under present conditions, however, there is a deficit of about15-25% of total requirement. This situation in large part accounts forthe overgrazed condition of communal grasslands and over exploitation offodder tree areas.

2.23 Farmers are generally reluctant to do away with unproductive andaged animals due to religious beliefs concerning slaughter and continuingdependence on these animals for production of manure. The State Govern-ment has established a Gosadan (Cattle Sanctuary) in the Hills whereunproductive cattle collected from villagers are being housed and which ismore frequently being used by farmers for disposal of unproductiveanimals.

Agriculture

2.24 Holding Size. About 70% of holdings are less than one hectare inextent, about 16% range from one to two hectares with the remaining 14%more than two hectares in size. Farms normally comprise more than oneparcel of land, often separated by considerable distances.

2.25 Cropping Pattern. The main cereal crops are rice grown in khariffollowed by wheat in rabi. Ragi (finger millet) grown where irrigation islacking is also an important kharif crop. In every period of two years(four seasons) farmers usually take three crops, leaving land to liefallow in one crop season. Poor land with bad or degenerated terraces,which is usually at a distance from the household, is cultivated once in 3or 4 years, and then for only one season. The main reasons for this arethat the land is of inherently poor quality and farm women do not have the

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time to visit these usually distant fields regularly as they are preoc-cupied in cultivating better land near their homes, and in fetching fod-der, fuel and drinking water for their day to day needs.

2.26 Crop Yields. Crop yields are generally low. Present averageyields are given below:

Crop Average Yield per Ha.MT

Paddy 1.0

Millet 1.0Wheat 0.9

2.27 Manures and Fertilizers. Most farmers use only organic manures,

but little attempt is made to prepare good, well rotted manure and allmaterial is generally left in uncovered heaps, stacked in the open.

2.28 Seed. Little seed of improved varieties has been planted in theproject area. No efforts have been made to organize a widespread seedmultiplication program. Poor on-farrm storage arrangements and constantuse of the same seed lead to the quality of farmers' seed being low.

2.29 Horticultural Crops. A range of subtropical and temperate fruitsand vegetables are cultivated in the project area. Citrus, guava andmango are typical subtropical fruits and are grown in valleys. Temperatefruits grown at higher altitudes are apple, pear, apricots and the stonefruits (peaches, plums, etc.). Pear, fig and peach grow wild in compactareas and in woodlands. Wild pear comprises some 10-20% of the fruit

trees grown in the area. There is considerable scope for improving yieldsof these trees by "top working" (grafting) with improved varieties. Thiswork has been initiated in a small way by the Horticultural Department andthe produce will be marketed by the panchayats. In addition, the Hor-ticultural Department has programs to develop community and privateorchards. One demonstration orchard is in operation at Chamauli (Pauridistrict) but, however, needs improvement.

Forestry

2.30 Forests, according to their legal status and ownership, are class-ified into four important categories: reserved forests, protected forests,unclassed forests and private forests. In reserved forests villagers areonly allowed to graze cattle and cut and carry grass on payment of a smallfee. In demarcated protected forests, the villagers have a right to graze

cattle, cut and carry grass, lop tree branches, gather dead wood andfallen timber and cut wood for domestic purposes and for implements (at anominal fee). Unclassed forests are those remaining forest areas (otherthan private forests) and wastelands which have been classified under the

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Indian Forest Act and are under the control of the Revenue Department.Private forests are areas which belong to individuals and considered unfitfor cultivation by them and which, in the course of time, have acquiredsome vegetative growth. Generally speaking, private forests havedeteriorated and are now largely unproductive as a result of failure toreplant after exploitation. Protected forests and unclassed forests havealso deteriorated on account of continuous felling and uncontrolled graz-ing and vegetation in such areas is now sparse and covered in bush growth.

2.31 Supply of Wood Material. People living in the project arearequire tree products for firewood, livestock fodder, farming implementsand house construction. These demands have led to degradation of much ofthe nearby forests and are now largely met from areas remote from thevillages and from burning of agricultural waste. In some areas, and inrecognition of the need to conserve resources, villagers have voluntarilyagreed to protect nearby reserved forests. The result has been a numberof good demonstration plantations of pine and regenerated oak forests.

2.32 The essential problems facing any afforestation program are: (a)non-agricultural land is subject to heavy grazing pressure and successfulafforestation efforts are dependent upon effective grazing control; (b)non-agricultural land is normally steep with shallow soils and only por-tions of this land are suitable for afforestation; (c) the daily needs offuelwood during the development period would have to be met outside thoseareas being afforested so as to ensure successful establisment and growth;(d) present techniques of establishing forest plantations have not givensatisfactory survival rates partly because efforts and funds have beenspread over large areas and with little attention to good silviculturalpractices; and (e) few efforts have been made to plant the best speciesfor fuelwood and fodder.

Land and Soil Conservation Programs

2.33 Soil conservation in the Hills has traditionally been carried outby both the Forest Department and the Agriculture Department. Works bythe former are mainly concentrated in forest reserves and community ownedforests and those of the Agriculture Department generally limited toprivately owned agricultural land.

2.34 Programs implemented by the Forest Department largely compriseafforestation with construction of physical structures to control gullyerosion and protect downstream structures. Afforestation, however, hasbeen carried out unsystematically and in a dispersed manner giving rise tosmall patches of trees wherever land could be made available. Physicalstructures are often constructed without due consideration to final objec-tives and cost.

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2.35 Soil conservation on agricultural land consists of bunding, landlevelling and terracing of private lands. Such works are normally carriedout by the Soil Conservation Department and are subsidized at levelsbetween 30 and 50% of cost.

2.36 The effectiveness of present activities are limited because of (a)a tendency to direct remedial measures towards the effect rather than thecause of erosion; (b) a lack of appreciation of factors which determinerate of soil erosion, such as interaction between erosivity, erodibility,topography and management; (c) inadequate appreciation of the role ofsound land husbandry in leading to good ground cover; and (d) introductionof expensive remedial measures instead of low cost methods which wouldhave wider application.

Agricultural Support Services

2.37 Agriculture Research. The G.B. Pant University of Agriculture andTechnology (GBPUAT), Pantnagar is responsible for agricultural research inthe Hill districts of UP. GBPUAT maintains a hill campus at Ranichauri(Tehri Garhwal district) where research facilities are being developed. Aprivate research institution Vivekananda Anusandhanshala is located atAlmora and is supported by the Indian Council of Agricultural Research.

2.38 Present work carried out at these research stations has littlerelevance to problems of the area and there is little contact betweenresearch workers, farmers and staff of the Agricultural Department.GBPUAT is now eligible for assistance under the Bank supported NationalAgricultural Research Project (NARP) and is being strengthened to meet thefuture needs of the project areas.

2.39 Agricultural Extension. Each district in the project area isdivided into a number of Development Blocks, and headed by a BDO. In eachDevelopment Block, there are 15-18 Village Development Officers (VDO) l/and three Agricultural Development Officers (ADO) 2/ one each acting asSubject Matter Specialist for annual crops, crop protection and horticul-ture. The VDO are multipurpose extension workers, working directly underBDO. Their agricultural activity is largely confined to collectingdemands for seed and fertilizer and most farmers have had little or nocontact with them. The ADO are generally not available for extension workin view of other responsibilities. As a result little or no agriculturaladvice reaches farmers.

1/ Same as Village Extension Worker (VEW).

2/ Same as Agricultural Extension Officer (AEO).

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2.40 Agricultual Credit. Credit is provided by cooperatives and com-mercial banks. Short term credit is made available for purchase ofagricultural inputs and medium term loans for bunding and purchase ofbullocks. Long term loans are available for horticultural development.The overdue position of short term credit varies between 50-60%, largelydue to holding size and absence of a marketable surplus. Marginalfarmers, small farmers, farmers belonging to Scheduled Castes and Tribesand others identified under the Integrated Rural Development Program areentitled to subsidies, ranging from 33-50%, for different activities.

2.41 Agricultural Marketing. Due to small holding size and low yields,there is little marketable surplus of food crops and consequently market-ing does not present a problem as any surplus is bought by traders locatedthroughout the project area.

2.42 Constraints to Increased Agricultural Production. The main con-

straints to increasing agricultural production are: (a) the lack of anorganized extension system with the present extension staff performingvaried tasks which are target oriented and having relevance to a smallnumber of farmers only; (b) absence of a systematic program for seedmultiplication and distribution resu:Lting in farmers using their own seedwhich is low yielding and of poor quality; and (c) research activities arenot planned to meet local needs.

Minor Irrigation

2.43 Present irrigation practices consist of construction of smallstorage tanks designed to collect spring water from small perennial flowsand the distribution of this water to fields by gravity flow through smallopen channels. Storage tanks are usually constructed with governmentassistance whereas irrigation channels are built by farmers and areunlined. The present irrigation efficiency is about 20% in the unlinedchannels as there is considerable wastage of water.

2.44 On average, one tank irrigates about 0.8 to 1.0 ha. Given thevolumes of water available and low efficiency, the present system providesfor protective irrigation only during lean periods of rainfall in kharifand one to three irrigations for wheat in winter. The latter is dependenton available water as there is a gradual reduction in perennial flowsafter mid-February. No irrigation charges are levied as farmers are fullyresponsible for maintaining the irrigation system.

2.45 There is considerable scope for increasing the area under irriga-tion by (a) improving the existing system through lining of irrigationchannels; and (b) constructing new storage tanks and irrigation channels.

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III. THE PROJECT

A. General Description

3.01 The project would focus on development of watersheds in theouter Himalayas and in the Siwalik Range. It is in these areas where themost serious denudation and soil erosion is taking place. The lessseriously affected middle and inner Himalayas, and which are more prone togeological erosion, would not be included in this first phase project.

3.02 The proposed seven-year project would develop nine subwatershedscovering 312,000 ha in the state of Uttar Pradesh. Detailed plans for thedevelopment of one subwatershed (comprising four microwatersheds), hasbeen prepared by the State Government and reviewed by the IDA appraisalmission and would be implemented in the first project year. Developmentplans for the remaining eight subwatersheds would be prepared and imple-mented throughout the course of project life. As the start-up of develop-ment activities in subwatersheds would be phased over the first fiveproject years and in order to ensure that these activities would be sub-stantially completed under the project, it would be necessary that theproject be of seven years duration. Details of phasing are shown in Annex2, Table 2.

3.03 The development of the proposed subwatersheds would include:

(a) establishment of some 59,000 ha of mixed species plantations(for fuel and timber), 27,800 ha of fodder tree plantations ongovernment and panchayat-owned land and fuel and.fodder treeson some 81,000 ha of privately owned wastelands which are notregularly cultivated and on field boundaries;

(b) construction of soil conservation structures (by the ForestDepartment) designed to protect existing infrastructure such asroads and villages and including some 1,650 brushwood/stonecheck dams, 1,300 crate wire dams and 700 simple drop struc-tures. Terraces would be constructed (by the AgricultureDepartment) on 6,000 ha of arable farming land;

(c) livestock development, including a cattle exchange program inwhich 10,500 buffaloes would be exchanged for local cattle andprovision of better livestock services through improvements to40 existing livestock dispensaries;

(d) improvement of agricultural extension services through provisionof staff, equipment, housing, and staff training;

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(e) horticultural development, including top working with improvedmaterial of some 3,900 ha of existing, but wild, orchards andestablishment of some 1,500 ha of new fruit orchards;

(f) irrigation development (by soil conservation staff), includingimprovement, construction and lining of some 250 km of smallchannels and construction of 650 small water tanks;

(g) development of research and training activities connected withwatershed development;

(h) project administration at State, Watershed and Subwatershedlevel; and

(i) establishment of a National Watershed Developmert Policy Commit-tee at national level, assisted by a Watershed DevelopmentCouncil for appraisal of subprojects and monitoring and evalua-tion of project progress.

B. Criteria for Preparation of Subwatershed Projects

3.04 Prior to the preparation of detailed plans for development, abaseline survey would be carried out in each microwatershed. This surveywould provide details of present land use, land ownership, population,livestock numbers, present and potential for forestry, irrigation,agricultural and horticultural production and extent and nature of soilerosion. Once baseline data is available and acting throughMicrowatershed Management Committees (para 5.15), staff of the StateWatershed Management Cell (para 5.10) would decide on the amounts andphasing of land to be closed to grazing and the type of afforestation thatthese areas would receive. In addition, details of requirements for soilconservation, cattle exchange, minor irrigation and horticultural andagricultural development would also be considered. Based on the detailedappraisal of Machiad subwatershed development plan and from discussionswith state officials certain technical and financial criteria have beenestablished for the subsequent preparation and appraisal of subwatershedprojects. These are given below (paras 3.05-3.12). Additional projectdetails are given in paras 3.13-3.48.

3.05 Forest and Pasture Development

Technical Criteria

(a) Following a baseline survey, an assessment of supply anddemand of fuelwood and fodder would be made (3.6 T of drywood per family and 2.37 T of dry matter per animal per unityear);

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(b) Establishment of temporary nurseries rather than permanentones to ensure a least-cost approach;

(c) Plantations established in degraded forests would containabout 1,600 trees per ha and those planted in civil soyumforests would contain about 2,500 trees per ha; and wheregrass and tree leaf fodder is required this would be producedunder a regime of about 200 fodder trees per ha;

(d) Fodder and fuelwood development would include (i) phasedclosure of only 50% of panchayat and government owned land toallow natural grasses to regenerate and to permit planting offodder trees and leguminous pasture plants, (ii) over sowinggrazing lands with self generating annual legumes, and (iii)planting fodder trees, pasture grasses and legumes on bunds,raisers of terraced farm lands and privately owned wasteland.

Financial Criteria

Per hectare average costs would be as shown below:

Activity Cost per Hectare (in Rs)

Fuelwood Plantation (government) 2,600Fuelwood Plantation (civil soyam) 3,600Fodder Plantation (civil soyam) 1,500Fodder Plantation (private) 110

Soil Conservation

3.06 Engineering works for soil conservation in upper catchment areaswould be limited to protection of b:Locks of arable land, forest land andexisting infrastructure (e.g. roads, villages, etc.).

Technical Criteria

(a) In areas where vegetative cover can be established, controlmeasures would consist of planting suitable plant speciestogether with small check-dams constructed from localmaterial; and

(b) Engineering structures would be constructed only where (i)gully formation is threatening productive agricultural land,forest land, villages, small towns, and roads, and (ii)larger structures would be constructed only after a detailedsurvey.

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Financial Criteria

The average unit cost for structures would be (i) Rs 100 forbrushwood and stone check-dams, (ii) Rs 3,000 per Crate Wire Dam,and (iii) Rs 10,000 per stone/cement Drop Structure.

Cattle Exchange Program

3.07 One buffalo would be exchanged for two unproductive cattle. Theprinciples involved would be:

(a) Exchange program would take place in compact geographicareas;

(b) Buffaloes purchased would be test milked according to exist-ing practices;

(c) Imposing restrictions on free grazing of remaining animals ofbeneficiaries through stall-feeding; and

(d) Branding of exchanged and remaining animals of beneficiaries.

3.08 The average cost of a buffalo would be about Rs 3,500.

Minor Irrigation

3.09 Activities would be confined to improvement and construction ofsmall scale irrigation structures, i.e. channels and water storage tanks.A pre-condition to construction/improvement would be the setting up ofwater users groups to ensure suitable distribution procedures, and main-tainance of works.

3.10 The average unit cost for irrigation works would be as follows:

Construction and Liningof Channels Rs 50,000 per km

Storage Tank Rs 7,600 each

Overall Cost

3.11 The overall cost (excluding the costs of project staff and theiroperation) of proposed treatments would be about Rs 1,340 per ha (US$141).

3.12 Assurances were obtained during negotiations that the agreedcriteria would form the basis of the preparation, appraisal and sanctionof subwatershed projects (para 4.06).

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C. Detailed Features

Forest and Pasture Development

3.13 As a general rule, about 50% of the panchayat and government ownedland now open for unrestricted grazing would be closed over a five-yearperiod. In deciding future treatment of closed areas, first prioritywould be given to satisfying local needs for fodder and fuel. Adequateamounts of the former are essential to ensure that cattle debarred fromexisting grazing areas are adequately fed and therefore would not encroachon recently closed and planted areas. When calculating the area requiredfor fodder production, it has been assumed that the annual consumptionrequirement of an adult animal unit is 2.35 T of dry matter. In addition

the calculations assume that during the six dry months of the year, live-stock would obtain 50% of their feed requirements from grass and 50% inthe form of leaf fodder.

3.14 Calculation of areas required for fuelwood would be based on theestimated deficit between present wood production and consumption needs 10years hence. Requirements would assume a need of 3.6 T of dry wood perfamily per year. In many cases the land available for fuelwood planta-tions would more than satisfy future demands. In such cases, the residualland would be planted as commercial plantations. The area required tosatisfy the needs of timber would be based on an annual consumption of 0.1m3 of sawn timber per family. In most of the microwatersheds concernedthis amount of timber is already available from standing plantations.

3.15 Multi-purpose plantations would not be established and fuelwoodand fodder plantations would contain different species and spacing between

trees depending on intended end use. Those plantations established forfuelwood alone would contain some 2,500 trees per ha. This would ensurehigh volume production and at the same time early closure of the treecanopy. Grass production in such plantations would, after some fiveyears, decrease due to competition f-rom the trees. Grass and tree-leaffodder would be produced under a regime of about 200 fodder trees per ha.This spacing would ensure sufficient light for good grass production.

3.16 In steep areas with little vegetative cover, the land would beprotected from grazing a year or two before planting Lo ensure betterground cover and thus higher survival rates of tree seedlings as a resultof decreased erosion.

3.17 Species to be used for fuelwood and fodder plantation are avail-able and would be selected according to ecological conditions and inconsultation with the local population so as to meet their needs.Suitable species are Robinia pseudoacacia, Eucalyptus spp, Alnus nepalen-sis, Acacia spp, Pinus roxburghii, etc. Fodder species include Bauhiniavariagata, Robinia pseudoacacia, Grewia oppositifolia, and Leucaenaleucocephala. Further details are available in Project File.

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3.18 To reduce transportation costs, temporary tree nurseries would beestablished in each microwatershed and operated by the Forest Department(FD). Planting material from these nurseries and technical advice wouldbe made available at no cost to farmers for planting on privately ownedwaste land and on field boundaries. These would be maintained by owners.Such private plantations would, to the extent possible, be planned so thatneighboring farmers cooperate in the protection of saplings either throughfencing or by a local arrangement to guard them. This practice is alreadyprevalent in the project area. Planting and maintenance of governmentForest Reserves and panchayat plantations would be done by FD who wouldalso provide for protection, either by construction of stone or post andwire fencing.

Soil Conservation Measures

3.19 Upper Catchment Areas. Work in these areas would iargely beconfined to afforestation and improvement of grazing through land closure.Where gully formation is threatening productive agricultural land, vil-lages, small towns, buildings and roads, construction of the appropriateanti-erosion structures would be undertaken. In areas where an effectivevegetative cover can be established, minor erosion would be controlled bythe planting of suitable plant species together with construction of smallcheck-dams constructed from sticks and other local but readily availablematerial.

3.20 In areas requiring larger protective works detailed surveyswould be undertaken to determine the location, size and type of eachstructure. Such structures would take the form of check dams--both usingvegetative material or loose stones; crate wire dams; stone and concretedrop structures; and constructed drainage structures. The purpose, designcriteria, average unit cost, and an estimate of numbers required arecontained in the Project File.

3.21 Agricultural Land. Data on water run-off and soil loss as aresult of outward sloping bench terraces are not available. No attemptshave been made to quantify the extent and effects of such erosion and itscontrol under heavy intensity rainfall conditions prevailing in theHimalayas. In the absence of conclusive data, the project would include aresearch component to assess (a) run-off and soil loss from cultivatedterraces; (b) the cost of controlling erosion on terraces by variousmeasures; (c) a study to determine if farmers using their own labor andequipment and adopting new tillage practices could bring about the reshap-ing of their land over a two to three year period so that the terracesbecome inward sloping; and (d) studies to assess expected increases infarm production as a result of the land shaping proposed in (c) above.

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3.22 Assuming that the research work proposed above would be completedby the end of the third project year, a lump sum provision of Rs 30.00 M(US$3.16 M) for land shaping of about 6,000 ha of terraced land has beenincluded in project costs. This component would be implemented by theAgricultural Department and assurances were obtained at negotiations thatland reshaping would not be undertaken until the outcome of the proposedresearch had been discussed with the Bank and approval of the Bank givento implement the program.

Livestock Development.

3.23 Under the project, progressive closure of grazing areas wouldoccur. This would have the two fold effect of forcing livestock owners topay greater attention to stall-feeding of animals and, due to a general-ized shortage of fodder in the early years following closure, lead todisposal of old and unproductive animals. To encourage stall-feeding,help the overall reduction in stock numbers and demonstrate the economicbenefits of keeping productive animials, the project would provide for alimited cattle exchange program--two unproductive cattle for one improvedbuffalo and would involve a total of 10,500 buffaloes. The buffalo wouldbe test milked before purchase to ensure satisfactory performance. Duringthe first two years the owner would be provided with concentrate feed forthe buffalo. The cattle exchanged would be sent to an existing cattlesanctuary located in UP Hills. During negotiation assurances wereobtained that only buffaloes would be used for cattle exchange and that asa condition of disbursement against the component the Government of UPwould prepare detailed rules governing the cattle exchange program andwhich would include selection of compact areas for exchange, arrangementsfor stall-feeding and control of grazing, and identification of exchangedanimals.

3.24 Other livestock development activities would include improvementsto some 40 existing dispensaries, and provision for natural breeding ofbuffaloes (Murrah Buffalo Bulls).

3.25 Extension support would be provided by the Veterinary Departmentto assist farmers in the feeding and management of productive animals,calf rearing and disease control. In addition, extension staff would helpintroduce rotational and deferred grazing systems on newly closed grazingareas.

3.26 Training. The project would provide funds for training of farmersand staff. Farmer training would cover the benefits of reforestation,soil conservation, grass production and improved animal husbandry methods.Staff training would include in-service training of Forest Rangers,Foresters, and Forest Guards, and provision of special courses for ForestOfficers, Rangers, and soil conservation staff on soil and water conserva-tion practices to be adopted in project areas. These special courses

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would be held at the Central Soil Conservation Institute, Dehra Dun andin-service training would be arranged in the project area by the Forestand Veterinary Departments.

Agricultural Development

3.27 The project area is presently not covered by an effective agricul-

tural extension service capable of assisting farmers to adopt betterfarming practices. Present income levels of farmers are such that they

are not in a position to invest in purchased agricultural inputs. Fur-thermore, most farmers do not have access to improved seed. To help

remedy this position, the project would:

(a) provide for an effective agricultural extension service inwatersheds with a single line of command between the VillageExtension Worker (VEW) 1/ and the District Agricultural Officer;

(b) Engage women "motivators" to reenforce the activities of VEW;

(c) reorganize the present activities of VEW in such a manner thatthey are able to devote more time to agricultural extensionwork;

(d) incorporate regular in-service training and fixed schedules for

visits by VEW to farmers fields as an integral part of exten-sion activities;

(e) develop a seed improvement program to overcome the problems

presently constraining the wider use of improved varieties; and

(f) provide additional staff, equipment, operating expenses, train-ing facilities and rural housing for staff.

The main emphasis of extension activities would be directed towardsincreasing productivity of the better arable lands and encouraging farmersto put marginal, poor and steep land to other productive uses such as

horticulture or fodder production (tree fodder).

3.28 Extension Methodology. As most agricultural operations, except

plowing of land, are carried out by women, the project would direct exten-sion activity mainly towards village women. In each village a woman, who

is engaged full time in farming, would be selected as Motivator and wouldwork with the VEW as a part-time extension agent. Each Motivator would beidentified and selected for her potential influence in the village andwillingness to collaborate in following the agricultural practices recom-mended.

1/ VDO is the term used UP.

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3.29 Motivators would be encouraged to adopt improved practices recom-mended to them, introduce some of them on at least part of their land andlet other farmers visit their fields to observe the practices and results.Motivators would also explain to farmers the operations involved in carry-ing out the recommended practice and play an active role in promoting themfurther. Each Motivator would be paid an amount of Rs 50 per month.

3.30 Each VEW would cover about 270 farm families (about 10 villages)in his area of operation. He would visit each village on a fixed day,once every month in a four week cycle. During the visit he would spendthe whole day in the village and with the Motivator, visit farmers-fields, and explain the specific recommendations and practices that wouldbe followed during the next four week pe'riod. In addition, VEW would haveinformal discussions with groups of farmers. One day in each month wouldbe devoted to in-service training where the VEW would learn the recom-mended practices to be given to farmers during the next four week periodand would bring farmers' problems to the attention of trainers. Thus, theVEW would be occupied with extension activities for about 12 days. Duringthe remaining days of the month, VE'W would undertake other developmentactivities, but in the course of carrying out these and should the oppor-tunity arise would, if the VEW happens to visit any of his villages, makea point of contacting the Motivator for a short review of progress andproblems.

3.31 VEW would concentrate on the most important crops, focusing onpractices which bring the best and quickest economic resuLts. Initiallyconcentration would be on improving cultural practices and which wouldinclude better land and seed bed preparation, making of better farm yardmanure, use of good seed and seed treatment. In adopting such recommenda-tions, farmers face few risks, litt:Le financial outlay buit would berequired to provide more of their own labor. Since most farmers havelittle cash, this fits their financ:ial status well.

3.32 VEW would be guided and supervised by the three AgriculturalExtension Officers (AEO) 1/ at the Block level--one each f-or Agriculture,Plant Protection, and Horticulture. AEOs would arrange their tourprograms in such a manner that they are able to spend as mnuch time aspossible with VEW during their scheduled field visits. For regular train-ing of extension staff (both VEW and AEO) and for providing overall tech-nical guidance, two Subject Matter Specialists (SMS), one each in Agronomyand Plant Protection, would be provided at Project Headquarters. SMSwould spend about one-third of their time in field visits providing tech-nical support and guidance to extension workers, and the remainder inbuilding up their own stock of knowledge through a regular dialogue with

1/ ADO is the term used in UP.

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research workers, and in carrying out simple field trials on farmers'fields

3.33 The District Agricultural Officer would have overall respon-sibility for coordinating extension operations.

3.34 Civil Works. The project would provide funds for construction of

small input godowns.

3.35 Equipment. The project would provide simple audio-visual equip-

ment to support training and field extension operations. Emphasis would beon low cost aids such as flipcharts which extension staff could design

themselves and modify to fit local conditions.

3.36 Linkages Between Extension and Research. As neither research norextension can function without close cooperation it would be necessary toformalize the responsibilities of both organizations. A clear definition

of these responsibilities is emerging as part of the National AgriculturalResearch Project wherein GBPUAT would be made fully responsible for

development of suitable new technology while the Department of Agriculturewould assume responsibility for transfer of this technology to farmers,including widespread testing of research recommendations on farmers'fields. The commodity research programs of GBPUAT and of ICAR wouldcontinue to identify and select improved varieties of important crops andto identify economically appropriate practices. Selected crop varietiesand production practices would then be tested at the Zonal Research Sta-tion, Ranichauri. Extension staff would work with research workers todecide on the field trial program and would have responsibility for carry-ing out this program on farmers' fields. The project would provide for

the cost of inputs needed for field trials.

3.37 Crop Seed Improvement. Substantial improvements in production are

possible through wider use of improved crop varieties. Present seedproduction and distribution programs are inadequate and farmers plant oldseed which has low viability, is full of impurities and of poor geneticpotential. Under the project, emphasis would be given to replacing exist-ing seed. A seed exchange and multiplication program would be introducedso that at the end of the project period most of the cultivated area wouldbe planted to improved varieties.

3.38 Each season small packets of certified seed of paddy and wheat,sufficient to plant two nali (1 ha = 50 nali in JJP) of land, would bedistributed to selected farmers in each village in exchange for an equiv-alent amount of their own seed. Suitable varieties of paddy are availablewith the Department of Agriculture (I)OA) and would be a most suitablereplacement for local varieties presently cultivated over a large area.Similarly late sown wheat varieties are available. Farmers would thenbulk these improved varieties to supply their own needs and those ofneighbouring cultivators.

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Horticultural Development

3.39 Horticultural development programs would include: (a) improvementof wild fruit groves; (b) development of private and community orchards;and (c) increase in the number of nurseries to supply fruit tree seedlingsto the project area.

3.40 Development of Wild Fruit Groves. There are substantial numbers

of fruit trees (mainly pear) growing wild on Civil Soyam land and inReserved Forest areas. In many places such groves are to be found growingin compact blocks. In such areas, which are often located near villages,"top working" would be done through grafting with improved varieties bystaff of the Horticultural Department. Wherever necessary gap fillingwould be carried out to ensure economic stands. Wild fruit species needlittle care and maintenance as they are well adapted to the ecologicalconditions, very hardy and drought resistant. About 3,900 ha of compactgroves would be treated throughout the project area by the HorticulturalDepartment. According to the prevailing practice, the panchayats wouldcollect and market the produce from such orchards.

3.41 Development of Private Orchards. Privately owned land near vil-lages and which is normally marginally or not suitable for growing cerealcrops would be converted into fruit orchards. Such a program is alreadyin operation in the project area and is popular with farmers. About 1,500ha of marginal land has already been identified for development under theproject.

3.42 Development of Nurseries. The project would provide for develop-ment of some 8 additional nurseries throughout the project area to supplyfree material for top working of wild groves and to provide farmers withfruit tree seedlings.

Minor Irrigation

3.43 The area presently under irrigation would be increased by moreeffectively utilizing existing perennial flows of water from smallstreams. This would be accomplished by: (a) lining of existing irrigationchannels; and (b) construction of irrigation channels and water storagetanks. According to the present po:Licy in UP, minor irrigation workswould be executed by soil conservatiLon staff.

3.44 Lining of Existing Channels. Some 100 small irrigation channels(measuring about 250 km overall) would be constructed or lined over theproject period. Additional structures at the intake and for safe disposalof excess water would also be provicled.

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3.45 Water Storage Tanks. Where possible, small storage tanks (650)would be constructed to collect overnight water from existing perennial

flows to further extend the area irrigated or provide additional water toexisting irrigated lands. The structures proposed would include thetanks, water distribution system and a small investment in land develop-

ment, usually land levelling.

3.46 Water Management and Maintenance. Water management for equitable

and timely distribution would be the responsibility of water user groupsconsisting of the beneficiaries. These groups would also be made respon-sible for all maintenance of works. Soil Conservation staff would devotepart of their time to forming these groups and training farmers in simple

maintenance techniques and effective water utilization.

Research

3.47 A key issue in a pilot scale lproject of this type is that of

clearly identifying which particular components of a watershed improvementprogram (e.g. soil conservation, restoration of vegetative cover in thehills, construction of check dams, careful road alignment and appropriate

culvert design or reduction in livestock numbers and closure of certainareas to cultivation or grazing) have the most effective impact at thelowest possible costs. Secondly, the extent to which improved upland

catchment area land use could make a significant impact on downstreamflooding and sedimentation when compared with the alternative of damconstruction and improved irrigation and drainage in the foothills andplains. This issue is central to all watershed rehabilitation work in the

Himalayas and the project would include research and ongoing evaluationcomponents for technical, sociological and economic studies which would

examine the evidence already collected on this issue, not only from theproject area, but also from other experimental catchment improvement

programs in the Himalayas and overseas.

3.48 Project research would support the following activities related to

forestry including soil conservation and fodder development, and include:

(a) runoff and soil loss studies from different types of ter-races used for cultivation, cost of rehabilitation andbenefits as a result of such improvements;

(b) monitoring of runoff and sediment yields in paired miniwater-sheds; measurements would be made through automatic recordingof rainfall and streamflow;

(c) measurements of damage, land depreciation and volume of

sediment produced by gu:Lly erosion under varying conditions;

(d) species and provenance trials of both trees and grasses;

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(e) fertilizer and spacing, trials for various tree species;

(f) growth rate studies and yield data of different species oftrees and grasses;

(g) biological studies to determine changes in the overallHimalayan ecosystem; and

(h) remote sensing application to determine changes in land use.

Funds would be provided for incremental research staff, a smalllaboratory, staff quarters, equipment, transport and operational costs tocarry out the program. Research trials would cover no more than 30 hascattered in various project microwatersheds. Assurances were obtainedduring negotiations that: (a) research work would be carried out incooperation with institutions acceptable to the Bank; and (b) the outlineand work plan for project research actions would be ready by September 30,1983.

IV. COST ESTInATES AND FINANCING

A. Cost Estimates

4.01 The costs of the seven-year project would comprise (a) full costof development of subwatershed projects initiated in the first threeproject years, (b) partial costs of subwatersheds taken up for developmentin the fourth and fifth project yea,rs, and (c) cost of the WatershedDevelopment Council (para 5.03).

4.02 Total Project costs are estimated at Rs 656.39 M (US$69.12 M) ofwhich US$0.8 M would involve foreign exchange expenditures. Duties andtaxes included in total cost are estimated at US$3.12 M. Details ofcosts, summarized below, are given in Annex 1, Tables 1 and 2.

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Summary of Project Cost by Components

% ofComponent Local Foreign Total Local Foreign Total Base Cost

-- Rs M USS M --

Uttar PradeshForestry 220.80 2.00 222.80 23.20 0.20 23.40 52Soil Conservation 35.50 0.50 36.00 3.70 0.10 3.80 8Livestock 58.60 - 58.60 6.20 - 6.20 14

Agriculture 7.40 - 7.40 0.80 - 0.80 2Horticulture 16.70 - 16.70 1.80 - 1.80 4

Minor Irrigation 18.20 - 18.20 1.90 - 1.90 4Administration 63.00 1.00 64.00 6.60 0.10 6.70 15Research 1.60 - 1.60 0.20 - 0.20 1

Total Base Cost 421.80 3.50 425.30 44.40 0.40 44.80 100Physical Contingencies 7.70 0.80 8.50 0.80 0.10 0.90Price Contingencies 200.00 1.91 201.91 21.06 0.18 21.24

Sub Total 629.50 6.21 635.71 66.26 0.68 66.94

Central Administration 11.93 - 11.93 1.25 - 1.25

Physical Contingencies 1.60 - 1.60 0.17 - 0.17Price Contingencies 6.06 - 6.06 0.64 - 0.64

Sub Total 19.59 - 19.59 2.06 - 2.06

Total Base Cost 433.73 3.50 437.23 45.65 0.40 46.05

Physical Contingencies 9.30 0.80 10.10 0.97 0.10 1.07Price Contingencies 206.06 1.91 207.97 21.70 0.18 21.88

FRONT END FEE - 1.09 1.09 - 0.12 0.12

TOTAL PROJECT COSTS 649.09 7.30 656.39 68.32 0.80 69.12

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Summary of Project Cost by Expenditure

% ofLocal Foreign Total Local Foreign Total Base Cost------- Rs M -------- ------- US$ M -------

Staff Costs 42.24 - 42.24 4.45 - 4.45 10Operating Costs 35.92 1.00 36.92 3.79 0.10 3.89 8Vehicles and Equipment 6.10 - 6.10 0.64 - 0.64 1Civil Works 18.20 - 18.20 1.92 - 1.92 4Forest Plantation 216.35 2.00 218.35 22.79 0.20 22.99 50Horticulture Plantation 4.23 - 4.23 0.45 - 0.45 1Cattle Exchange Program 52.12 - 52.12 5.49 - 5.49 12Soil Conservation 35.57 0.50 36.07 3.70 0.10 3.80 8Minor Irrigation Works 17.88 - 17.88 1.88 - 1.88 4Research 1.60 - 1.60 0.17 - 0.17 1Monitoring and Evaluation 3.52 - 3.52 0.37 - 0.37 1

Total Base Cost 433.73 3.50 437.23 45.65 0.40 46.05 100Physical Contingencies 9.30 0.80 10.10 0.97 0.1.0 1.07Price Contingencies 206.06 1.91 207.97 21.70 0.1.8 21.88

FRONT END FEE - 1.09 1.09 - 0.1.2 0.12

TOTAL PROJECT COSTS 649.09 7.30 656.39 68.32 0.80 69.12

4.03 Cost estimates are based on actual costs for similar work carriedout in the last few years in the prcject area. Physical contingencieshave been added at 10% of costs on soil conservation, mincr irrigation andproject administration. Price contingencies (local and foreign) have beencalculated in accordance with Bank estimates of future price movements(1983: 8.5%; 1984.: 8%; 1985: 7.5%; 1986: 7% and 1987-89: 6%).

B. Proposed Financing

4.04 Finance to cover total project cost of US$66.00 M, includingcontingencies, but net of duties and taxes, would be provided as follows:

IBRD GOUP/GOI GOI TOTAL------------- US$ M -------------

46.20 18.80 1.00 66.00

The proposed IBRD loan of US$46.2 M would finance about 70% of totalproject costs, including all foreign exchange costs (US$0.8 M). The Bank

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loan would be made to GOI at standard IBRD interest terms over 20 years

including a five-year grace period and with a front end fee of 0.25%.

Bank funds would be channeled by GOI through the Ministry of Agriculture(MOA) to the Government of Uttar Pradesh (GOUP) on GOI standard terms andarrangements for financing of state development projects. The balance of

financing would come from GOI/GOUP. GOUP has confirmed that the projecthas been included in its already approved State Development Plan with

sufficient funds to cover the cost of the Project. In order to ensure anearly start to project actions and speedy and effective implementationthereafter, retroactive financing not exceeding US$300,000 would beprovided from April 1, 1983 to the date of credit signing for estab-lishment of forest nurseries and advance work on land preparation and

plantation protection necessary for the 1983 planting season. Retroactive

financing would also cover additional staff who need to be in position by

the start of the planting season and for purchase of a limited amount ofequipment and vehicles.

4.05 Since the National Watershed Development Policy Committee (NWDPC,para 5.04) would be required to approve subwatershed projects over thefirst five project years, the completion of those approved in the fourthand fifth project years would extend beyond the seven-year project period.

Consequently, an understanding was reached at negotiations that GOUP wouldcomplete the development of all nine subwatershed projects approved and

started under the project.

Preparation and Approval of Subwatershed Plans

4.06 Prior to project appraisal, one detailed subwatershed plar, was

prepared. This was found satisfactory. Subwatersheds to be taken up

progressively over the project period would be identified by GOUP and

project preparation initiated by the State Watershed Management Cell (para

5.10) following the general criteria set out in paras 3.05-3.12. These

plans would be reviewed and approved by the State Level Steering Committee

(para 5.09) and would then be submitted to NWDPC. The Watershed Develop-ment Council (IWDC-para 5.04), acting on behalf of NWDPC, would appraisethese sub-projects and on the basis of which NWDPC would release funds to

the State Government for implementation of development proposals. Sub-watershed projects have been phased (para 3.02) and advance action is

necessary to ensure appraisal well ahead of budget preparation in order toensure satisfactory implementation. In the event that subwatershedprojects do not meet both technical and financial criteria, these would be

returned by NWDPC to the States for revision. Assurances were obtainedduring negotiations that all subwatershed projects appraised by WDC priorto the Mid-term Review (para 5.30) would be sent to the Bank for comment

and approval before sanction by NWDPC and release of funds. Thereaftercopies of appraisal reports would be retained by NWDPC for review by the

Bank in the course of project supervision.

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C. Procurement

4.07 Direct plantation works (US$23.44 M) including nursery expendi-ture, pre-planting preparation, tree establishment and subsequent main-tenance and top working of orchards would be scattered over a wide areaand would be carried out over different periods of time. Most of theseactivities, including land preparation and planting and maintenance ofvillage woodlots would be done by the implementing departments (as perexisting practice) with participation from village panchayats. Similarlysoil conservation (US$3.80 M) and minor irrigation (US$1.88 M) works wouldalso be scattered and would be carried out by force account of implement-ing agencies and with local participation. Therefore, contracts followingcompetitive bidding would not be practical. Purchase of buffaloes (US$5.49M) for the cattle exchange program would be carried out by State AnimalHusbandry Department following State Government procedures which aresatisfactory. Contracts for civil works (US$1.92 M) would be small andwidely dispersed in time and location and, therefore, would not besuitable for international competitive bidding (ICB) and would be letfollowing local bidding procedures (LCB), advertised locally, or by forceaccount and in accordance with established GOUP procedures that are satis-factory to the Bank. Vehicles and equipment (US$0.64 M) would be pur-chased over the first few project years and as adequate maintenance andavailability of spare parts would be of paramount importarnce, this wouldnecessitate purchase of locally made vehicles and equipment already in useby government departments. Thus, procurement would be by LCB under exist-ing government procedures which are acceptable to the Bank.

4.08 Assurances were obtained during negotiations that procurementprocedures set out above would be followed.

D. Disbursements and Audit

4.09 Disbursements under the loan for approved subwatershed projectswould be made as follows:

(a) Civil works - 70% of expenditures;

(b) Vehicles and Equipment - 100% of local expenditures(ex-factory) and 75% of other local expenditure;

(c) Direct cost of forestry and horticulture plantations - 80% ofexpenditure;

(d) Soil Conservation - 70% of expenditure;

(e) Cattle Exchange Program - 70% of expenditure;

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(f) Minor Irrigation Works - 70% of expenditure;

(g) Incremental Operating Costs (excluding salaries) - 70% ofexpenditure; and

(h) Research - 100% of expenditure.

4.10 Disbursements to MOA for the Watershed Development Council wouldbe made as follows:

(a) Vehicles and Equipment - 100% of local expenditure(ex-factory) and 75% of other local expenditure;

(b) Incremental Staff and Operating Costs - 30% of expenditure;and

(c) Project Evaluation Costs - 100% of expenditure.

Bank disbursements would be made against MOA certified statements ofexpenditure incurred by participating states and by WDC. Such certifiedstatements would include a statement to the effect that all expendituresincurred were in accordance with the technical and financial criteria forwatershed development agreed with the Bank and were in conformity with theagreed amounts specified in the subwatershed plan. Disbursements for allforce account work, salaries, local training, and civil works contractscosting less than Rs 300,000 and other procurement involving expenditureof less than Rs 150,000 for vehicles and equipment, for which it would notbe practical to submit documents would be retained by MOA and participat-ing States and would be made available for inspection by Bank projectreview missions. Disbursement againslt all other items would be fullydocumented. Certificates of expenditures would be audited at least onceevery year and a report submitted to tLhe Bank promptly thereafter. Alldisbursement applications would be forwarded and processed through theDepartment of Economic Affairs (DEA). The project is of seven years dura-tion and estimated disbursements in the first five years would be low(32%) compared to the Bank wide disbursement profile for the same period(66.5%) for Bank assisted agriculturaL projects. Disbursements would,however, pick up in the sixth and seventh project years. Reasons forlower disbursement rates in the first five years are (a) phased coverageof subwatersheds and the need to prepare, appraise and sanction sub-watershed projects in the first five years, and (b) that soil conservation(land levelling) on agricultural lands would be taken up only in thefourth project year. GOUP would be able to substantially speed up projectexpenditure from the fourth year onward and achieve the proposed disburse-ment targets. Schedules for project implementation and disbursements arepresented in Annex 4, Tables 1 and 2.

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4.11 GOT, through MOA, would cause GOUP to maintain separate accountsfor each subwatershed project. Separate accounts would also be maintainedby WDC. These would be audited annually for each fiscal year, in accord-ance with sound auditing principles consistently applied and audit reportssubmitted to the Bank as soon as available. In addition GOI would cause,through MOA, GOUP and WDC to submit certified copies of project accountsto the Bank within nine months of the end of the fiscal year, and suchreports would show, inter alia, that the funds withdrawn were used for thepurpose intended, that goods have been received or work performed, andthat payments have been made. All reports would be submitted by MOA toDEA (GOI) for onward transmission to the Bank.

4.12 Assurances were obtained during negotiations that the disbursementand audit procedures set out above (paras 4.09 - 4.11) would be followed.

V. ORGANIZATION AND MANAGEMENT

Central Organization

5.01 By recent Gazette Notification, GOI has established a NationalLand Board to approve the national policy for management, conservation anddevelopment of land resources. Headed by the Union Minister of Agricul-ture, the Board would comprise the lJnion Ministers for Irrigation, Worksand Housing, and Environment, one Minister from each of the States andUnion Territories, and the Member Agriculture of the National PlanningCommission. An officer of the statuas of Joint Secretary/WatershedDevelopment Commissioner (GOI) (para 5.03) would be the member-secretaryof the Board.

5.02 As part of the same Gazette Notification, GOI has also establisheda National Land Resources Conservation and Development Commission (NLRCDC)to formulate national policy and perspective plans for conservation,management and development of land resources in the country taking intoaccount appropriate land use, soil capability and other relevant factors.NLRCDC is also expected to review the progress of implementation ofprograms concerned with conservation of soils, integrated land managementin catchments of river valleys, ravine reclamation, flood control, socialforestry, etc. NLRCDC would be headed by the Member Agriculture in theNational Planning Commission and would comprise Secretaries from theMinistries of Agriculture, Irrigation, Rural Development, Works and Hous-ing, and Environment, other Central Government agencies, and experts andrepresentatives from five states. The member-secretary oE the NationalLand Board (para 5.01) would also be the member-secretary of NLRCDC.

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5.03 NLRCDC would be provided a Secretariat, located within MOA andwith responsibility for coordinating the planning and implementation ofprograms related to land resource management, conservation and develop-ment. The Secretariat would be headed by the member-secretary of NLRCDCand of the status of Joint Secretary/Watershed Development CommissionerGOI (paras 5.01 and 5.02) and who, for administrative purposes would beresponsible to the Secretary for Agriculture. The Secretariat wouldcontain a Watershed Development Council (WDC) which would have overallresponsibility for execution of the proposed Project and the proposedRainfed Farming Project (currently under appraisal).

5.04 Overall responsibility for coordination and execution of theproject would thus be with MOA. WDC (para 5.03), acting under the direc-tion of the Joint Secretary/Watershed Development Commissioner (para5.03), would appraise subwatershed projects submitted by the participatingStates and in accordance with the general criteria set out in paras3.04-3.12. Appraisal reports would then be submitted to a NationalWatershed Development Policy Committee (NWDPC), chaired by the Secretary,Ministry of Agriculture (GOI) and comprising the Agricultural Commissioner(GOI), Animal Husbandry Commissioner (GOI), Inspector General of Forests(GOI), a representative of the Mlinistry of Finance (GOI), Chief of theAgriculture Division, Planning Commission, concerned Secretaries from theparticipating States and the Director., Soil and Water ConservationInstitute, Dehra Dun. The Joint Secretary/Watershed Development Commis-sioner would act as member-secretary of NWDPC. NWDPC would have thepowers to approve or reject subwatershed projects and would have overallsupervisory responsibility for execution of the Project. These latterfunctions, on a day to day basis, would be carried out by WDC (para 5.06).The proposed national level organization is illustrated in a chart (WorldBank 24839).

5.05 While the National Land Board and NLRCDC will have a wide range ofresponsibilities relating to land resources management, conservation anddevelopment and will be concerned with various ministries of GOI, NWDPC,chaired by the Secretary, Ministry of Agriculture (GOI) and WDC will havespecific responsibility for Watershed Management in the Himalayas andrainfed farming development which might be located throughout India.Initially, both NWDPC and WDC will only be responsible for the proposedproject in UP, but this responsibility will shortly be augmented with theaddition of the Rainfed Farming Project (covering four states) and cur-rently under appraisal. Furthermore, it is expected that additionalprojects would be added as and when the outcome of the presently proposedpilot projects is known.

5.06 WDC would comprise specialists in Forestry, Soil Conservation,Agriculture, Economics and Sociology, and include research staff to coor-dinate the increased needs for applied and adaptive research. The regularstaff would be supplemented by hiring of local consultants for appraisal

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and supervision of subprojects. WDC would be provided with administrativesupport staff and a monitoring unit. Details of staffing and cost of WDCare given at Annex 1, page 2. WDC would have the following functions:

(a) Appraisal of the technical and economic feasibility of sub-

watershed plans that would be progressively prepared by GOUPand submission of these plans for approval of NWDPC;

(b) Release of funds to GOUP for project implementation;

(c) Assist with and monitor implementation of subwatershed

projects by:

(i) reviewing periodic progress reports on project achieve-ment and, subsequently, project completion reports;

(ii) reviewing six monthly State reports on physicalimplementation in order to prepare a summary report forthe Bank;

(iii) reviewing statements of expenditure to ensure authen-ticity, keeping project accounts, claiming reimbursementfrom the Bank, processing budget requests and reviewing

annual statements of audited accounts;

(iv) visiting subwatershed projects on a regular basis,reporting on progress and problems in implementation andproviding advice on suitable remedial measures; and

(v) organizing training programs for State staff at NationalInstitutes; and

(e) Arranging for the interim evaluation of project actions so asto enable appropriate feedback to project management at alllevels.

5.07 As a condition of invitation to negotiations, GOI had issuedorders setting up National Watershed Development Policy Committee andWatershed Development Council. Assurances were obtained during nego-tiations that:

(a) GOI would create the required staff positions for WDC;

(b) Appoint the Joint Secretary/Watershed Development Commis-sioner by September 30, 1983; and

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(c) GOI would ensure that a Project Completion Report, would be

prepared and submitted to the Bank within six months of theProject Closing Date.

5.08 An understanding was reached during negotiations that:

(a) Representatives of WDC would make on-site supervision visits,at least twice na each fiscal year, to each subwatershedproject under implementation and communicate to the Bank, ina form to be agreed, the results of such visits; and

(b) The Joint Secretary/Watetshed Development Conmissioner,heading the Secretariat of NLRCDC, would by 31st of Marcheach year furnish the Bank with the annual wo^k program ofWDC.

State Level Organization

5.09 State Level Steering Committee (SC). In Uttar Pradesh, a SC would

be established and chaired by the Chief Secretary or delegated by him tothe Secretary of the Ministry substantially responsible for projectimplementation (Secretary, Hill Area Development Department). The SCwould comprise Secretaries of Finance and other relevant ministries, headsof participating Departments, Deputy Commissioners from concerned dis-tricts and Vice Chancellor of GBPUAT. SC would be responsible for formalapproval of subwatershed projects before presentation to GOI, ensuringa coordinated approach to project implementation and adequate staffdeployment, reviewing progress of implementation and resolving problems ofexecution. A Project Coordinator (PC), of appropriate status (Addl. Chief

Conservator of Forests) and working under the concerned ministry theState, would be responsible for coord:inating and implementing all project

actions and also act as Member/Secretary of SC.

5.10 The PC would be assisted by a State Watershed Management Cell(SWMC) and which would comprise specialists in forestry, soil conserva-tion, agriculture, livestock development, forest economics, sociology andinclude relevant support staff. The Cell would have the following respon-sibilities:

(a) Preparation of subwatershed/microwatershed developmentproposals with assistance from field staff;

(b) Release of funds for project implementation;

(c) Assist and monitor project implementation by:

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(i) visiting project areas on a regular basis, reporting on

progress and problems in implementation and suggestingremedial measures;

(ii) processing annual development plans and work plans for

microwatersheds for approval of SC;

(iii) reviewing seasonal technical reports on progress ofdifferent project components;

(iv) reviewing and comp:iling six monthly progress reports onphysical implementation for presentation to SC and GOI;and

(v) reviewing statements of expenditure, keeping accounts,forwarding reimbursement proposals to GOI, processingbudget requests and reviewing annual statements of

audited accounts.

(d) Assessing training requirements for staff locally and at

National Institutions; and

(e) Coordinating Project research (studies) activities.

5.11 Prior to negotiations, the Government of Uttar Pradesh had (a)issued formal orders setting up SC, (b) created the necessary staff posi-tions for SWMC, and (c) made adequate budget provision for the above. Asa condition of invitation to negotiations, the Government of Uttar Pradeshhad appointed a Project Coordinator.

Project Implementation

5.12 A new W4atershed Development Department under the Secretary, HillArea Development Department has been formed and is responsible foractivities of all Departments working in Hill districts of UP.

5.13 District Level. A district would cover a number of subwatershedareas. The heads of line departments located at the district level wouldcoordinate subwatershed development activities concerning their depart-ments. In addition, it would be necessary to ensure concerted efforts toidentify and resolve problems of implementation in each subwatershed.Inter-departmental coordination at the district level would be ensuredthrough a District Coordination Committee chaired by the District Commis-sioner and consisting of district heads of concerned departments andelected representatives of the District Panchayat. The Committee wouldcoordinate project work with other ongoing development activities in thedistrict.

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5.14 Subwatershed Level (SW). Each SW would consists of 3-20microwatersheds (10,000-60,000 ha). A Subwatershed Management Unit would

be set up in each SW and would comprise a Project Manager with technicalstaff from concerned departments, and assisted by clerical and accounting

staff. This Unit would be responsible for project implementation -preparation of annual plans of action and detailed work plans, executingthese plans and assisting in preparation of new projects for furthersubwatershed development.

5.15 Microwatershed Level. Success of the project would depend on theextent of involvement of local people in planning and implementation ofvarious project activities. To ensure this, a Management Committee would

be set up in each microwatershed chaired by the Project Manager (SW) andcomprising Panchayat Chairmen, the Block Development Officer, localrevenue staff and concerned project staff. The Committee would agree onthe annual plan of action and detailed work plan for each microwatershed,help project staff obtain people's participation in different activitiesespecially closure of common grazing areas, establishment of plantationsthrough communal effort and support for farm forestry programs, and execu-tion of minor irrigation schemes. The Committee would also organizeaction groups at the village level to assist in project execution. Theannual work plan would include (a) identification of areas of projectaction, (b) a calendar of operations, and (c) nature and extent of localpeople's participation.

5.16 The proposed state level organization is illustrated in a chart(World Bank 24584).

5.17 Prior to negotiations, GOUP had (a) issued formal orders setting up

District Coordination Committees, (b) created the necessary staff posi-tions for the Subwatershed Management Unit, and (c) made adequate budgetprovision for the above to cover the first project year. Assurances wereobtained during negotiations that Microwatershed Management Committees(one for each microwatershed) would be set up.

Peoples Particpation

5.18 Each microwatershed usually covers more than one villagepanchayat. As the project affects all the residents within themicrowatershed, agreement to resolve common issues would have to bearrived at by more than one panchayat. This would be ensured through theMicrowatershed Management Committee (para 5.15). To incorporate peoples'

participation in planning, determining priorities, implementation ofdifferent activities and in protection/maintenance of structures, theManagement Committee would maintain constant contact with the residents ofthe microwatershed. The sequence of actions involved would be:

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(a) discussion of proposed project activities with the residentsin each village, explaining reasons for different componentsand the purpose of each. The formation of village action

groups would then follow;

(b) explaining the role of people in making a success of each

project component and deciding on priorities;

(c) preparation of an action plan based on agreed priorities;

(d) discussion of the action plan in each village and obtainingagreement on (i) locations where project actions are to be

carried out, (ii) extent of peoples participation required inexecution, and (iii) people&s responsibility for protectionof project works; and

(e) provide guidance to establish water users groups for equi-table distribution of water and maintenance of irrigationstructures.

5.19 The main stages of the Project Cycle and responsibilities of

different institutions are given in Annex 5.

Monitoring and Evaluation

5.20 An essential feature of the project would be the monitoring and

evaluation of project progress and its impact. The system would generatedata with which to measure output, effects and impact of project actionsthus providing management guidance to those responsible for projectimplementation and permit in-depth studies enabling a realistic assessmentof longer term effects brought about by the project.

5.21 Project Monitoring. Monitoring would ensure continuous gatheringof information on project inputs and activities, and on conditions andcomplementary activities that are critical to the success of the project.It would utilize basic information prepared during project design/preparation phase and data generated by the baseline survey (para 3.04)and continue throughout the project-s lifetime comparing the data col-lected against the original objectives and standards. Monitoring would

thus help in alerting project management and policy makers to implementa-tion problems requiring corrective action and also provide information forproject evaluation.

5.22 The project would be monitored at three levels. Firstly at the

subwatershed, then at State and GOI levels. Prior to preparation of anaction plan for development of individual microwatersheds, a baselinesurvey would be prepared by the State Watershed Management Cell (para3.04). Details of survey design, questionnaires to be used, sample

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methodology and reporting format would be mutually agreed upon betweenGOI/GOUP. Equally, it would be necessary for the Project Manager tocontinue to collect data on a continuous basis on various project inputsand activities, and physical and financial achievements.

5.23 Monitoring at the State level would be the responsibility of theWatershed Management Cell and would include: (a) a comparative examinationof watershed performance withiin the State; (b) recommendation on areasthat should be intensively monitored and proposed changes in the monitor-ing system; (c) provide assistance to Project Managers in identifying andimproving weak areas; and (d) collation of monitoring reports and forward-ing the collated report with comments to the State Steering Committee andWatershed Development Council (GOI).

5.24 At GOI level, project monitoring would be the function of theWatershed Development Council, especially the Economist. This Councilwould perform, with appropriate modification, the same functions as thoseof the State Cell except, that it would be responsible for coordination ofreports from all project States and forwarding of these to the Bank atprescribed intervals. An understanding was reached at negotiations thatGOI would submit to the Bank six monthly progress reports, each June andDecember, giving details of staff position, a summary of activities under-taken in the past six months, and physical and financial targets achievedand problems encountered during project implementation.

5.25 Project Evaluation. Evaluation would ensure a continual analysis,during project implementation, of project outputs, effects and overalldevelopmental impact. This would provide project management and policymakers with analytical support that may be necessary to enable them toassess and, if required, adjust policies, objectives and institutionalarrangements and resources affecting project implementation. Evaluationstudies would also provide feed-back for preparation of new projects.

5.26 Two categories of evaluation would be undertaken during theproject period; (a) ongoing evaluation, and (b) a mid-term review.

5.27 Ongoing evaluation would cover two main aspects: technical andbehavioral evaluation. Technical evaluation would involve an examinationof the success, or failure and of the modifications necessary to thetechnical packages applied in project implementation. Behavioral evalua-tion would be primarily concerned with people's response to and percep-tions of project input delivery systems and institutions. The data socollected would provide an additional dimension to the informationgathered under the monitoring system. The areas covered by such evalua-tion would include: success of peoples participation efforts in planningand implementation, reasons for adoption or non adoption of forestry andpasture management practices, cattle exchange program and stall-feeding,and access to various inputs.

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5.28 Both technical and behavioral evaluation would lead to the needfor special studies which would be short term in nature (covering a periodof not more than three months) on subjects directly related to projectdesign and performance.

5.29 An approved agency would, under a long term contract, be respon-sible for project evaluation under the overall direction of WDC (GOI),especially the Sociologist. The project would provide separate funds for

this purpose. All proposed ongoing evaluation and special studies wouldrequire the approval of WDC. Assurances were obtained during negotiations

that GOI and GOUP would (a) identif'y, by September 30, 1983, and to theBank's satisfaction, institutions competent to undertake ongoing evalua-

tion and special studies, and (b) forward to the Bank, for review,relevant evaluation reports and special studies.

5.30 Mid-Term Review. Given the innovative nature of the project, itwas agreed during negotiations, that a mid-term review of the projectwould be undertaken by a joint teamL from GOI/GOUP/Bank and within thefirst quarter after the completion of the third project year. This exer-cise would be in the nature of a re-appraisal wherein the project con-cepts, design, allocation of funds, staffing patterns, and componentswould be re-assessed in the light of performance. This could result insubstantial modifications to the project and approach originally approved.

VI. PRODUCTION, MARKETING, FINANCIAL RESULTS AND COST RECOVERY

Yields and Production

6.01 The project would, in addition to benefits derived from erosionand flood control, increase production of fuelwood, timber, fodder, fruitand agricultural products from the watersheds developed. Fuelwood hasbeen assumed to be harvested in years 10 and 20 after planting, yielding23, 48, 18, 5 tons per ha in Forest Reserves, Private Forests, FodderPlantations and Farm Forestry respectively. Timber would only be har-vested after the end of the 20-year period assumed in the calculations andis therefore not included in the benefits. Grass production for cattlefeed is based on yields gradually increasing from 0.5 to 3 tons per ha infuelwood plantations years 1-8 after plantation establishment and infodder plantations yields will reach 4 tons per ha in the third year afterplanting. Leaf fodder yields have 'been assumed gradually to increase from0.1 to 0.5 tons/ha years 3 to 10 after planting in fuelwood plantationsand from 1 to 5 tons per ha over the same period in fodder plantations(Annex 3, Table 9). In agriculture, in addition to yield increases due toirrigation and extension services provided under the project, additionalproduction would also result from an increased cropping intensity and ashift from local to improved varieties. Yield assumptions are given inAnnex 3, Table 3 and summarized below:

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TABLE 6.1: AGRICULTURE YIELD ASSUMPTIONS

(quintals per ha)

IncrementW due Project

P W Irrig Unirrig Irrig Unirrig

PaddyLocal 9 9 10 10 1 1HYV 12 12 20 14 8 2

WheatLocal 8 8 10 10 2 2HYVUnirrigated 11 11 - 12 - 1

Irrigated 12 13 20 - 7

Barley 12 12 12 12 - -

Millet (Ragi)Local 9 9 9 9 -

Improved - 12 12 12 - -

Pulses 8 8 10 8 2 -

Soyabean - - 5 5 5 -

Oilseed 6 6 9 6 3 -

Fruit - - 70 - 70 -

P = presentW = future without projectW = future with project

6.02 On the assumptions given in para 6.01 above, during the 20-yearlifetime of the project, an additional 3.2 million tons of fuelwood, 3.2million tons of grass, 1.5 million tons of tree fodder, 0.3 million tonsof mixed fruit, and cash and food crops of a net incremental value of someUS$ 360 million would be produced.

Marketing of Produce

6.03 Most of the incremental agricultural production resulting from theproject would be consumed by the local population and would, therefore,not create any marketing problem. Fuelwood balance studies, in the sub-watershed where detailed planning is completed, show that the fuelwoodproduced would satisfy local demand. Marginal amounts available for sale

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to neighboring areas would be sold through local traders. The estimated 5%increase in milk production would be consumed in the project area.Increased horticultural production would be marketed through existingfruit marketing organizations.

Farm Incomes

6.04 The impact of the proposed project on farm incomes was analyzedon the basis of one ha farm models (Annex 3, Tables 1-4), The results,summarized in Table 6.2 below, indicate that farmers' net cash incomeswould increase by almost 60% when provided with irrigation and by about30% without irrigation. From this analysis, it appears that the returnsto farmers are substantial enough to ensure adequate participation.

TABLE 6.2: PROJECT IMPACT ON FARM INCOMES(-0C0 Rs/ha)

IncrementalWith Project due to Project

P W Irrig Unirrig Irrig Unirrig

Uttar Pradesh

Gross Value of Production 1.9 2.0 3.2 2.6 1.2 0.6Cash Costs 0.2 0.3 0.5 0.4 0.2 0.1Net Cash Income 1.7 1.7 2.7 2.2 1.0 0.5

P = PresentW Future without project

6.05 Cost Recovery. In UP, marginal farmers, small farmers, farmersbelonging to Scheduled Castes and Tribes and others identified under theIntegrated Rural Development Program are entitled to subsidies, rangingfrom 33-50%, for different development activities. The project would notintroduce any new subsidy except for the provision of buffaloes inexchange for unproductive local cows. This component is seen as an essen-tial part in the process of changing the livestock husban,dry pattern fromfree grazing to stall-feeding. Suclh an exchange program would not bepossible without the subsidy.

6.06 Given that hill areas are generally food deficient it has beenState policy to fully subsidize minor irrigation development. As such, nocost recovery is proposed. Maintenance of irrigation works would,however, be done by beneficiaries. Horticulture loans are provided bycredit institutions as government Taccavi loan (from budgetary sources)and would be recovered according to existing procedures. Loans for soilconservation (land levelling) are provided by government budgetary sourcesand would also be recovered under existing procedures.

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VII. BENEFITS, JUSTIFICATION AND RISKS

A. Benefits

7.01 Incremental Production. The direct quantifiable benefits from theproject would be increases in production of fuelwood, timber, fodder,fruit, and agricultural products amounting to Rs 1.4 B over the 20-yearlife of the project. These increases would directly benefit local popula-tions living in upper catchment areas.

7.02 Employment Creation. Project works would generate a total of 46 Mmandays employment over its 20-year lifetime. On the basis of 225 work-days a year, this would be equivalent to providing 10,000 workers withfull time jobs over the same period, each receiving an annual income ofover Rs 1,800 (US$190). This employment would mainly benefit the poor andunemployed living in the project area. An estimated 16 M mandays would besaved in collecting fuelwood due to the project plantations. This laborwould be more productively employed in agriculture which through theincreased activities is estimated to require an additional I M mandaysannually at full project developmenit or a total of about 16 M mandays overthe 20-year project life.

7.03 Environmental Effect. The direct production effects generated byproject actions provide sufficient economic justification for the project.The project is a pilot scheme leading to a long term program for controlof erosion within upper watersheds of the Himalayas, aimed at reducingrun-off and decreasing the silt load of rivers. Little data is, however,at present available to evaluate the economic effects of controllingerosion and flooding. The project would, nevertheless, contribute toimproving the data base for the evaluation of such effects.

7.04 In support of the nature of benefits to be derived from erosionand flood control, experimental results elsewhere in India have shown thatsoil conservation measures similar to those proposed under the projectreduce soil losses from 30-40 tons/ha/year to 1-3 tons/ha/year. A reducedsoil loss of only 10 tons/ha/year would, over the project area, leads toannual reductions of 3.4 million tons of silt in rivers leaving theproject area. Reductions in siltation would lead to better preservationof fertile top soils on both agricultural and forest lands, prolonged lifeof downstream dams, reduced flooding as a result of smaller flows of waterand absence of siltation causing reductions in size of streams and riverbeds.

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B. Economic Analysis

7.05 Economic Rate of Return. The overall economic rate of return ofthe project is 23%, based on the direct measurable production benefits andtotal project costs. The rates of return of the project½s major subcom-ponents are summarized in Table 7.1 below. Of the individual projectcomponents, the rate of return for forestry, although it includes bothwood and fodder production, is mainly a reflexion of the high opportunitycost - particularly due to the transport factor - of supplying a sub-stitute source of energy for house-hold purposes. The high return to theextension and seed distribution components is typical of such programmes,which usually yield high benefits at. relatively little cost. Horticul-tural development gives a high rate of return and is included as an essen-tial part of a package providing farmers with incentives to bring aboutchanges in land use. Investements in minor irrigation under the project,yield high returns.

TABLE 7.1: ECONOMIC RATE OF RETURN (%)

Forestry 24Extension over 100Horticulture 35Irrigation 64

Total 23

7.06 All values are expressed in constant mid-1982 prices. Theeconomic analysis has been made in border Rupees with international pricesconverted to Rupees at the exchange rate of US$ 1 = Rs 9.5.. Local costshave been converted to border Rupees by applying a standard conversionfactor of 0.8. In addition to the standard conversion factor, the finan-cial cost of labor has been adjusted by a factor of 0.8 during peakagricultural seasons and 0.6 at other times to reflect the real value oflabor given high rates of unemployment and under-employment:. Traded goodsand services have been valued on the basis of their c.i.f. import prices.Non-traded goods and services have been adjusted by appropriate conversionfactors (Annex 3 Table 8). The economic value of fuelwood has been calcu-lated both on the basis of the long-term marginal economic cost of supply-ing a substitute source of energy (soft coke) for house-hold use and onthe basis of labor savings in its collection. Both calculaLtions yieldedsimilar results.

7.07 Sensitivity Analysis. The switching values show that a reductionin benefits by 47% or an increase in costs by 87% would bring the economicrate of return down to the opportunity cost of capital, assumed to be 12%.The high rate of return of the project and its relative insensitivity to

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changes in costs and benefits is largely a reflexion of the high level ofbenefits derived from the extension and seed programs. In addition,investments in forestry, due to the long gestation period, tend to beinsensitive to moderate changes in benefits. However, as may be seen inTable 7.2 below, the project shows a certain degree of sensitivity todelays In the flow of benefits. Should these be delayed by more thanthree years, then the rate of return would be equivalent to the oppor-tunity cost of capital. Such a delay, however, would be unlikely. Itshould also be noted that no benefits have been included for improvementsto the downstream agricultural areas resulting from improved watershedmanagement and soil conservation measures. These benefits, are likely tobe considerable although difficult to quantify as explained in para 7.03.Although no benefits from soil conservation measures have been included incalculating the rate of return of the project - due to the speculativenature of quantifying such benefits - certain calculations have been madeof the benefits required to justify such investments. These calculations,based on farm budgets (Annex 3, Tables 1-4) and using economic values showthat, on average, terracing works are justifiable if without the invest-

ment farmers incomes would have decreased by at least 5% per annum due tosoil erosion. These calculations would be refined in the research com-

ponent of the project (paras 3.47 and 3.48) and taken account of in theselection of areas to be treated.

TABLE 7.2: SENSITIVITY ANALYSIS

Switching Values

Total benefits, output pricesor yields -47%

Total costs 87%

Economic Rate of Return

Base Case 23%

Total benefits, output pricesor yields

down 10% 21%down 20% 19%lagged one year 20%lagged three years 15%

Total costs

up 10% 21%up 20% 20%

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7.08 In the case of the cattle-exchange program, no benefits fromincreased milk production have been included in the raLte of return cal-culations for the project. There are two reasons for this, firstly thereis the risk of double-counting of benefits with those derived fromincreased fodder production and secondly it is difficult to establish towhat extent this milk would not have been produced anyway, elsewhere inthe economy, since the animals are alreay of milking age when transferredto project areas. Calculations of the benefits derived from the veteri-nary program, however, show that such investments are economic and thatthe rate of return exceeds 12% if, as a result, total milk productionincreases by about 1% in the projectL area. These results should not bedifficult to obtain with the improved veterinary services to be provided.

C. Risks

7.09 The proposed project would be the first attempt to implement, inan integrated manner and on a more meaningful scale, a number of inter-dependent and interacting components designed to minimize the furtherdeterioration of the Himalayan ecosystem caused by depletion of forestcover, overgrazing and bad land use, all of which have resulted inincreasing erosion and which in turn exacerbates flooding in the GangeticPlain. Hence, it would be subject to the risks and uncertainities thatare usually associated with any project of a pilot nature. Some of themajor risks are summarized below: (EL) inadequate people½s participation -the components selected for development such as land closure, stallfeedingof livestock, cattle exchange and forest plantations are such that theycannot succeed unless the people perceive themselves as directbeneficiaries and fully involve themselves in planning and execution ofproject components. As part of project strategy, farmers are likely tohave to forego production of crops from presently cultivated (once in 3-4years) marginal land, stop free grazing of cattle and participate incontrolled extraction of fodder and fuel. However, such risks would beminimized because of people½s awareness of the deteriorating situation inwhich they live, intensive extension activities to increase productivityof good land, and provision of minor irrigation and horticultural develop-ment activities, all of which would enhance incomes. Furthermore, theproject organization is so designed (paras 5.15 and 5.18) that localpeople would have full opportunities in planning and executing programs atmicrowatershed and village levels; (b) increase in human and cattlepopulation - the degradation of the Himalayan ecosystem has, to a largeextent, been caused by increased human and cattle populations. Thisproject would change land use practices so as to improve the generalwelfare and living of the existing population. However, if the project isto have long lasting effects on the IHimalayan ecosystem, it is importantthat the inevitable increase in popu:Lation will not lead to a regressionto old practices. There are reasons why such a regression would be aminimum: (i) in the Nayar subwatershed, in a situation with high cattle

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and human density and severely degraded land, families have already madeadjustments by sending able bodied men to the plains to work as wageearners and about 60% of present subsistence comes from remittances, and(ii) the fundamental change from free grazing to stallfed cattle is cru-cial to preservation of the biological cover and would be beneficial tothe people and as such it is unlikely that this practice, which will beenforced by the community, would be changed even if population pressure isincreased as it is beneficial to all; (c) technical risks: since thereplicability of project activities is a significant factor, greateremphasis would be given to low cost agricultural and silvicultural solu-tions, rather than to expensive engineering works, for conserving soil andreducing excess run-off from rainfall. Technical packages are availablefor these approaches and would be reinforced and supplemented by researchactivities which have been included in the project; (d) non-availabilityof labor: labor shortages due to migration of men to the plains in UP andin areas in close proximity to towns may hamper project implementation andsubsequent maintenance. It is, however, expected that any increases ineffective demand for labor will result in increases in wage levels thatwill be adequate to attract sufficient labor to the project area; and (e)organizational and management risks: the project would be implemented by anumber of line agencies and would require a degree of coordination amongthese agencies. This could be an important constraint to the timely andefficient implementation of the project. However, the establishment ofsuitable coordination mechanism at GOI and State levels, as well as plan-ning and implementation committees at district and microwatershed levels(paras 5.13-5.15), continuous monitoring and evaluation of projectactivities (paras 5.20-5.28), and the local enthusiasm to implement theproject, programs would help minimize such risks.

7.10 It is apparent from the above that the proposed project faces nounusual implementation risks and that the project design includes adequatesafeguards to minimize the effects of the factors that could possiblyaffect its viability.

VIII. AGREEMENTS OBTAINED AND RECOMMENDATIONS

8.01 The following conditions were met by GOI and GOUP before loannegotiations:

(a) GOI issued orders setting, up the National Watershed Develop-ment Policy Committee and the Watershed Development Council(para 5.07); and

(b) GOUP had appointed a Project Coordinator (para 5.10).

8.02 During negotiations, assurances were obtained from GOI on thefollowing matters:

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(a) That the criteria agreed with the Bank would form the basisof the preparation, appraisal and sanction of subwatershedprojects (para 3.12)

(b) Land reshaping on agricultural land would not: be undertakenuntil the outcome of thie proposed research haLs been discussedwith the Bank and apprcval of the Bank given to implement theprogram (para 3.22);

(c) Only buffaloes would be used for cattle exchange and that asa condition of disbursetment against this component theGovernment of UP would prepare detailed rules governing thecattle exchange program (para 3.23);

(d) Research work would be carried out in cooperation withinstitutions acceptable to the Bank and that the outline andwork plan for project research actions would be ready bySeptember 30, 1983 (para 3.48);

(e) That all subwatershed projects appraised by INIDC prior to theMid-term Review would be sent to the Bank for comment andapproval prior to sanction by GOI and release of funds (para4.06);

(f) GOI and GOUP would follow the procurement procedures set outin para 4.07 and disbursement and audit procedures set out inpara 4.09 to 4.11 (paras 4.08 and 4.12);

(g) That GOT would (i) create the required staff positions forWDC, (ii) appoint the Joint Secretary/Watershed DevelopmentCommissioner by September 30, 1983, and (iii) ensure that aProject Completion Report would be prepared and submitted tothe Bank within six months of the project Closing Date (para5.07);

(h) That Microwatershed Management Committees (one for eachmicrowatershed) would be set up (para 5.17);

(i) GOI and GOUP would: (i) identify by September 30, 1983, andto the Bank's satisfaction, institutions competent to under-take ongoing evaluation and special studies, and (ii) forwardto the Bank for review relevant evaluation reports andspecial studies (para 5.29); and

(j) A mid-term review of the project would be undertaken by ajoint team from GOI/GOUP/Bank within the first quarter afterthe completion of the third project year (para 5.30).

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8.03 The following points were also discussed and an understandingreached:

(a) That the criteria agreed with the Bank would form the basisof the preparation, appra-isal and sanction of subwatershedprojects (para 3.12);

(b) GOUP would complete the development of all nine watersheds

approved and started under the project (para 4.05);

(c) Representatives of WDC would make on-site supervision visits,at least twice in each fiscal year, to each subswatershedproject under implementation and communicate to the Bank in aform to be agreed, the results of such visits (para 5.08);

(d) GOI would, by 31st March each year, furnish the Bank with anannual work program (para 5.08);

(e) GOI would submit to the Bank six monthly progress reports,each June and December, giving details of staff position, asummary of activities undertaken in the last six months, andphysical and financial targets achieved and problemsencountered during project implementation (para 5.24).

8.04 With these conditions and assurances, the project would besuitable for a loan of US$46.20 M to GOI on standard Bank terms.

5 4 - 24792 1Table I

INDIA

HIMhALAN WATERSHED MANAG8NENT PROJECT

UTTAR PRADESH

Sobataterahad Project CoasC

Year 1 2 3 4 5 6 7 1-7 8 9 1-9

Forteetry

SwI 1,073 2,891 3,434 3,928 3,971 - - 15,297 - - 15,297SW2 (2.19) - 2,350 6,331 7,520 8,602 8,696 - 33,499 - - 33,499SW3 (2.48) - - 2,661 7,17C 8,516 9,741 9,848 37,936 - - 379360W4 (4.55) - _ - 4,882 13,154 15,625 17,872 51,533 1068 - 69,601SW5 (5.68) . - - - - 6,095 16,421 19,505 42,021 22,311 22,555 86,887SW6 (2.78) _ - 2,983 8,032 9,546 10,920 11,039 42,525 - - 42,525

Forettry Total 1,073 5,241 15,409 31,537 49,884 61,403 58,264 222_ 81_ 40,379 22,555 285,745

Soil Caoar.otltin Wor-k (SCW)

SWI 49 172 255 991 i1loi - - 2,568 - - 2,5680W2 - 98 343 1,261 1,382 1,502 - 4,586 - - 4,586SW3 - - 221 1,298 1,460 1,540 1,532 6,051 - - 6,051

00W4 --9 75 2,022 2,655 2,810 8,432 2,854 - 11,336W15 - - 1,770 2,465 2,8949 7,184 3,652 3,713 14,549

SW6 (S.ray.) - - 147 1,193 1,722 2,071 2,096 7,229 - - 7,229

SCW Total 49 270 966 5,713 9,457 10,228 9,387 36,070 6,506 3,713 46,289

Liveato-k Develop=ent (LI)

SW0 225 678 973 1,077 1,127 - - 4,080 - - 4,380SW2 - 493 1,485 2,131 2,359 2,468 - 8,936 - - 8,936SU3 - - 558 1,691 2,415 2,671 2,793 15,118 - - 10,118SW4 - - - 1,024 3,085 4,427 4,900 13,436 5,128 - 18,564SW5 - - - - 1,278 3,851 5,527 10,656 6,117 6,401 23,174SW6 (Soraye) - - 626 1,885 2,705 2,994 3,133 11,343 _- - 11,343

LD Totol 225 1,171 3,642 7,798 12,967 16,411 16,355 58,569 11,245 6,401 76,215

Agrlcolt-rol Develop..nt (Al)

SWI 68 107 112 102 61 - - 450 - - 450SW2 - 136 214 224 204 122 - 90C - - 900S03 _ - 175 274 286 261 152 1,148 - - 1,148SW4 - - - 320 501 522 477 1,824 274 - 2,094SW5 - - - - 408 642 672 1,722 612 366 2,700SW6 (SOroyo) - - 204 321 336 306 183 1,354 - 1,350

AD Total 68 243 705 1,241 1,796 1

83

53 1,484 7,390 886 366 8 ,642

Horticultoral De-elop-rnt (HD)

9111 58 208 293 293 298 - - 1,142 - - 2,4428W2 - 129 458 642 642 631 - 2,502 - - 2,502SW3 _ - 146 518 727 725 714 2,832 - - 2,832S04 - - - 268 951 1,333 1,333 3,885 1,310 - 5,195S05 - - - - 335 1,187 1,664 3,186 1,664 1,636 6,486s86 (Sorayo. - - 164 581 815 815 801 3,176 - - 3,176

HI Total 59 338 1,061 2,302 3,758 4,693 4,512 16,723 2,974 1,636 21,333

Minor Irrication (MI)

SWI 66 177 265 391 479 - - 1,378 - - 1,378082 - 132 354 530 782 958 - 2,756 - - 2,756W3 - - 165 442 663 978 1,197 3,445 - - 3,445

8W4 - - - 297 797 1,193 1,760 4,047 2.155 - 6,202SW5 - - - - 330 973 1,458 2,761 2,150 2,635 7,546SW6 (Sra-ya) - - 185 496 742 1,095 1,341 3,859 - - 3,859

MI Totol 66 309 969 2,156 3,793 5,197 5,756 18,246 4,305 2,635 25,186

sobwtatrthtd Adm.

Incr-t. Staff S88 713 794 863 747 551 - - 3,668 - - 3,66882 2.19 - 1,561 1,739 1,890 1,636 1,207 - 8,033 - - 8,033SW3 2.48 - - 1,768 1 969 2 140 1,853 1,366 9 096 - - 9,0960W4 4.55 - - - 3,244 3,613 3,927 3,399 14,183 2,507 - 16 690SW5 5.68 - - - - 4,050 4,510 4,902 13,462 4,243 3,130 20,835SW6 2.78 _ - 1,982 2,207 2,399 2,077 1,532 10,197 _- - 10,197

SA Tota1 713 2,355 6,352 10,057 14,389 13,574 11,199 58,639 61750 3,130 68,519

S-oty Sob.t-atrahed

Poreacry 1,073 5,241 15,409 31,537 49,884 61,403 58,264 222,811 40,379 22,555 285,745Soilctosttvatlao 49 270 966 5,713 9,457 10,228 9,387 36,070 6,506 3,713 46,289Live-co-k 225 1,171 3,642 7,798 12,967 16,411 16,355 58,569 11,245 6,401 76,215Agrftaltora 68 243 705 1,241 1,796 1,853 1,484 7,390 886 366 8,642Hortticltort 59 338 1,061 2,302 3,758 4,693 4,512 16,723 2,974 1,636 21,333Minor Irigation 66 309 969 2,156 3,793 5,197 5,756 18,246 4,305 2,635 25,186Sobaterahed Adm. 713 2,355 6,352 10,057 14,389 13,574 11,199 58,639 6L,

7 5 03,130 68,519

Total 23253 9,927 29,104 60,804 96,044 113,359 106,957 418,448 73,045 40,436 531,929

Snrsary Pr)jeot Sopport Ueit

W.terahed Ad.. 424 321 398 278 298 513 298 2,530 298 298 3,126Stat. Project UTit 505 459 550 326 326 326 326 2,818 326 326 3,470R..eacoh 307 342 237 187 187 187 187 1,634 _187 187 2,008

Total 1,236 1,122 1,185 791 811 1,026 811 6,982 811 811 8,604

Total B.ae Cast UP 3,489 11,049 30,289 61,595 96,855 114,385 107,768 425,430 73,856 41,247 540,533

Phyalcol Contige-tias /1 70 221 606 1,232 1,936 2,288 2,155 8,508 _L,477 825 O1,81D

Total Intl. Physic. Cont. 3,559 11,270 30 895 62,827 98,791 116,673 109,923 433,938 75,333 42,072 551,343Yrita £acalatitn /2 303 1,936 8,022 213985 42Ž 555 60,323 66,306 201 910 _82857 33 815 286,582

GRAND TOTAL 3,862 13,206 38,917 84,812 141,346 176,996 176,709 635,848 128,190 75,887 839,925

11 At I10 on Sollcne. ert. tioo, Mioor Icrigatioa and Adnlntitrativ- .c.t rqaally 2% on total coda./2 At year 1 - 8.5!, Year 2 - 8.0%, Year 3 - 7.5Z, Year 4 - 7.0Z, Ytar 5-9 - 6.0%.

ANNEX I

Table 2

INDIA


WATERSHED DEVELOPMENT COUNCIL - COST ESTIMATES

(Rs 000)

Nos. Unit Cost Year I Year II Year III Year IV Year V Year VI Year VII TOTAL

1. STAFF SALARIES

Watershed Development 1/ 1 54.00 54.00 54.00 54.00 54.00 54.00 54.00 54.00 378.00

Commissioner

Technical Cell

Forestry 1 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 210.00Soft Conservation 1 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 210.00Agriculturvi 1 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 210.00Economics 1 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 210.00Sociology 1 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 210.00

Research Coordinator 2/ 1 30.00 30.00 30.00 30.J0 30.00 30.00 30.00 30.00 210.00Research Scientists 27 3 24.00 72.00 72.00 72.00 72.00 72.00 72.00 72.00 504.00

Deputy Directors 3/ 3 24.00 72.00 72.00 72.00 72.00 72.00 72.00 72.00 504.00

Administrative & Support

Staff

Administrative Officer 1 24.00 24.00 24.00 24.00 24.00 24.00 24.00 24.00 168.00

Accounts Officer 1 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 140.00Support Staff 4/ 15 15.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 1,575.00

Drivers 3 8.00 24.00 24.00 24.00 24.00 24.00 24.00 24.00 168.00

Monitoring Cell

Statistician 1 24.00 24.00 24.00 24.00 24.00 24.00 24.00 24.00 168.00

Support Staff 6 90.00 90.00 90.00 90.00 90.00 90.00 90.00 90.00 630.00

Sub Total: Salaries 785.00 785.00 785.00 785.00 785.00 785.00 785.00 785.00 5,495.00

2. OPERATING COSTS

Vehicles 3 30.00 90.00 90.00 90.00 90.00 90.00 90.00 90.00 630.00

Travel 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 490.00Office 25.00 25.00 25.00 25.00 25.00 25.00 25.00 25.00 175.00Consultants 5/ 100.00 100.00 100.00 100.00 100.00 100.00 100.00 700.00Project Evaluation 6/ 160.00 320.00 480.00 640.00 800.00 640.00 480.00 3,520.00

Remote Sensing 7/ 100.00 200.00 200.00 - - - - 500.00

Sub Total: Operating Costs 545.00 805.00 965.00 925.00 1,085.00 925.00 765.00 6,015.00

3. CAPITAL COSTS

Vehicles (Cars) 3 90.00 270.00 - - - - 170.00

Furniture & Office

Equipment 8/ 100.00 50.00 - _ - - - 150.00

Sub Total: Capital Cost 370.00 50.00 - - - - - 420.00

TOTAL 1,600.00 1,440.00 1,550.00 1,710.00 1,870.00 1,710.00 1,550.00 11,930.00

1/ Equivalent to Joint Secretary, GOI.

2/ Research Coordinator assisted by three Research Scientists would ensure that rainfed farminig and agriculturalimplements research conducted at concerned National institutions and States meet the needs of the project area.The Research Coodinator will be located in the Center and Research Scientists at relevant National institutions.

In addition to research the group would organize and conduct trainiing for Watershed Managers and SMS.3/ Three Deputy Directors to assist senior scientists in project unit.

4/ Would include seven steno-typists and other clerical staff.

5/ Consultants would be used to assist in the appraisal of subprojects and as technical advisors.

6/ Project evaluation would be assigned to suitable institutions witin the country.7/ Cost of remote sensing studies to determine changes in land use.

8/ Includes furniture, photocopying unit, typewriters, tc.

-56-

ANNEX 2Table 1

INDIA


PROJECT AREA

Watersheds, Subwatersheds and Microwatersheds

Watershed Subwatershed Microwatersheds Area '000 haNos.

Nayar 1. Randigad 4 16.12. Nayar Right 2 10.13. Paschimi Nayar 22 76.04. Machiad 4 16.85. Purvi Nayar 19 69.56. Nayar Left 8 25.37. Rudraprayag 4 15.28. Srinagar 11 36.6

Saryu 9. Panar 9 46.4

83 312.0

-57-

ANNEX 2Table 2

INDIA


Phasing of Subwatersheds and Microwatersheds

Year Subwatershed Microwatershed Area '000 haNOs

1 (1) Machiad 4 16.82 (2) Srinagar 11 36.63 (3) Randigad 4

(4) Nayar Right 2 87.8(5) Rudraprayag 4(6) Panar 9

4 (7) Paschimi Nayar 22 76.05 (8) Purvi Nayar 19

(9) Nayar Left 8 94.8

83 312.0

-58- ANNEX 3Table 1

INDIA


UTTAR PRADESH

Cropping Pattern for 1 ha Farm(Ha)

Future FutureCrops Present Without Project With Project

KHARIF

PaddyLocal 0.35 0.35 0.05HYV 0.05 0.05 0.35

MilletLocal 0.40 0.30 0.10Improved - 0.10 0.25

Pulses 0.04 0.04 0.04

Soyabean - - 0.10

RABI

WheatLocal 0.45 0.40 0.05HYV

Unirrigated 0.05 0.05 0.20Irrigated - 0.05 0.25

Barley 0.10 0.10 0.05

Oilseeds (mustard) 0.02 0.02 0.10

Pulses 0.04 0.04 0.06

Total Cropped Area 1.50 1.50 1.60

ANNEX 359- Table 2

INDIA


UTTAR PRADESH

Farm Budget for 1 ha Farm(Rs.)

Future Future FutureCropping Pattern Present Without: Project With Project Net Mil. Proj.

Irrigated

KHARIF

PaddyLocal 441.00 441.00 70.00 (371.00)HYV 84.00 84.00 980.00 896.00

MilletLocal Ragi 396.00 297.00 99.00 (198.00)Improved - 132.00 330.00 198.00

Pulses 96.00 96.00 120.00 24.00

Soyabean - - 66.00 66.00

RABI

WheatLocal 540.00 480.00 75.00 (405.00)HYVUnirrigated 83.00 8.3.00 332.00 249.00Irrigated - 90.00 600.00 510.00

Barley 132.00 132.00 66.00 (66.00)

Oilseeds (mustard) 36.00 36.00 270.00 234.00

Pulses 96.00 96.00 180.00 84.00

Gross Value ofProduction 1,904.00 1,967.00 3,188.00 1,221.00

Cost of Production

Labor 480.00 480.00 600.00 120.00Bullock Labor 375.00 375.00 375.00 -Seed 120.00 120.00 120.00 -Manure/Fetilizer 100.00 120.00 350.00 230.00Pesticides 10.00 20.00 35.00 15.00

1,085.00 1,115.00 1,480.00 365.00

NET INCOME 819.00 852.00 1,708.00 856.00

-60-. ANNEX 3Table 2(a)

INDIA


UTTAR PRADESH

Farm Budget for 1 ha Farm : Unirrigated(Rs.)

Future Future Future

Cropping Pattern Present Without Project With Project Net Mil. Proj.

KHARIF

PaddyLocal 441.00 441.00 70.00 (371.00)

HYV 84.00 84.00 686.00 602.00

MilletLocal 396.00 297.00 99.00 (198.00)Improved - 132.00 330.00 198.00

Pulses 96.00 96.00 96.00 -

Soyabean - - 32.50 32.50

RABI

WheatLocal 540.00 480.00 75.00 (405.00)HYV 83.00 166.00 877 .50 711.50

Barley 132.00 132.00 156.00 24.00

Oilseeds (mustard) 36.00 36.00 40,.00 4.00

Pulses 96.00 96.00 96.00 -

Gross Value ofProduction 1,904.00 1,960.00 2,558.00 598.00

Cost of Production

Labor 480.00 480.00 600.00 120.00

Bullock Labor 375.00 375.00 375.00 -Seed 120.00 120.00 150.00 30.00Manure/Fetilizer 100.00 100.00 220.00 120.00Pesticides 10.00 20.00 15.00 5.00

1,085.00 1,085.00 1,360.00 275.00

NET INCOME 819.00 875.00 1,198.00 323.00

-61- ANNEX 3

Table 3

INDIA


UTTAR PRADESH

Yield per Hectare (in Kgs) and Cost per MT

Future Future Cost per

Crop Present Without Project With Project M.T. (Rs)Unirrigated Irrigated

Paddy 1,400

Local 900 900 1,000 1,000

HYV 1,200 1,200 1,400 2,000

Maize 1,200

Local 800 800 800 800HYV 1,100 1,100 1,400 2,000

Millet (Ragi) 1,100Local 900 900 900 900

Improved - 1,200 1,200 1,200

Ginger 4,000 4,000 4,000 5,000 2,000

Pulses 800 800 800 1,000 3,000

Soyabean - - 500 500 1,300

Wheat 1,500Local 800 800 1,000 1,000

IHYVUnirrigated 1,100 1,100 1,200 1,200

Irrigated 1,200 1,300 - 2,000

Barley 1,200 1,200 1,200 1,200 1,300

Peas - - - 1,000 2,000

Oilseeds (Mustard) 600 600 600 900 3,000

INDIA


Per Hectare Labor Requirements (Mandays)

Crop Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total

1. WHEAT

W 7 7 15 25 30 15 99

W 7 7 15 30 - - - - - - 30 20 109

2. PADDY

W - - - - 20 20 30 10 10 25 10 - 125

W - - _ _ 20 20 30 iO i0 25 15 - 130

3. MAIZE

W - - - - 20 10 13 20 10 10 - - 83

W - - - - 20 10 13 20 10 15 - - 88

4. GINGER

W - - - - 15 15 15 20 15 20 10 - 110

W - - - - 15 15 20 20 15 20 15 - 120

5. PULSES

W - - - - 15 10 10 15 10 10 - - 70

W - - - - 15 10 10 15 10 10 - - 70

-63--

ANNEX 3Table 5

INDIA


Fruit Orchard 1 ha

400 PlaTnts/ha(Rs)

Year 1 2 3 4 5 6 7 8 9 1U-20

Production Costs

Lay- Out and Pegging 75.00 - - - - _ _ _ _ _

Digging, Filling 1,200.00 - - - - - - -

'aim Yard Manure & 600.00 900.00 1,200.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.0U 2,00O.U0Fertlizer

Plant Material 600.00 - - - - - - -

Pesticides 100.00 200.00 400.00 600.00 800.00 800.00 800.00 800.00 8U0.00 800.00

Other Labor Costs - 200.00 400.00 400.00 800.00 800.00 1,000.00 1,000.00 1,000.00 1,000.00

2,575.00 1,300.00 1,800.00 3,000.00 3,600.00 3,600.00 3,800.00 3,800.00 3,800.00 3,800.OU

Incoes

Rs.a 100/quintal - - - - 1,200.00 2,500.00 4,000.00 6,000.00 7,000.00 7,000.00

-64-ANNEX 3Table 6

INDIA

HIMALAYAN WATERSHED M.NAGEMENT PROJECT

Horticultural Budget

For 20 Trees Farm Plantation: 20 m2/Plant or 400 ms

2or 0.04 ha

(Rs)

Year 1 2 3 4 5 6 7 8 9 11-2U

Costs

Digging, Filling 50.00 - - - - - -

Pits 1/

Farm Yard Manure & 20.00 40.00 60.00 80.00 60.00 80.00 60.00 80.OC 65. 1) 80..C 7U.U.Fertlizer

Plant Material 18.00 - - - - - - - - -

Pesticides 8.00 10.00 15.00 15.00 25.00 25.00 25.0l. 25.00 25.60 25.u0 25.5U

Other Operations 12.00 12.00 18.00 24.00 30.00 30.00 30.00 30.o0 35.51u 3l(vC 30. UJ

('abor) 2/

108.00 52.00 93.00 119.00 115.00 135.00 115.00 35.00 115.0G 1335. 2

Benefits

Fruit Yield @ - - - - - 100.00 100.00 150DO 250.00 250.0U 25U.UJ

Rs. 100/quintal

1/ Digging pits & filling will be done by family labor q Rs. 2.50 per pit.2/ Other labor for cultural operations would be provided by family labor.

-65- ANNEX 3Table 7

INDIA

HItALAYAN WATERSlIED M4ANAGEMENT PROJECT

Price Build-up for Economic Analysis

Rice/Paddy Wheat Urea TSP .KCI

1. Projected Average World MarketPrice 1985-90 (US $/t) a/ 371 175 240 185 105

2. Adjustment for quality differentials(factor) and bags (US$/t) 0.7 b/ 1.0 - 30 30

3. Adjusted Projected Price 260 175 240 215 135

4. Freight to India port (US$/t) 25 30 15 65 65

5. CIF price at port (US$/t) 285 205 255 280 200

6. Handling and transport cost between

port and local store (US$/t) c/ 15 15 15 15 15

7. Price in local store (US$/t) 300 220 270 295 215

8. Processing, handling and transportcost between local store and farm gate(US$/t) d/ e/ -23 -10 10 10 IC

9. Sub-Total 277 210 280 305 225

10. Processing Ratio 0.65 1.0 1.0 1.0

11. Farm gate price (US$/t) 180 210 280 305 225

12e Farm gate price (Rs/t) 1710 2000 2660 2900 2140

a/ Source: IBRD Price forecasts dated December 21, 1982.

Pricing Basis: Rice: Thai, milled 5% broken, FOB Bangkok

Wheat: Canadian No. 1 Western Red Spring (CWRS), in store Thunder BayUrea: FOB Europe, baggedTSP: FOB US Gulf, in bulkKC1: FOB Vancouver, in bulk

b/ For 25-35% broken

c/ 1500 km at Rs 180/t adjusted by SCF 0.8 = Rs 144 plus 3 handlings @ Rs 2 adjusted

by SWR 0.6 and SCF 0.8 = Rs 3; Total Rs 147 = US$ 15

d/ Basis headload of 20 kg, 4 km to market, 2 km/hr gives Rs 200/t adjusted by STR 0.8

and SCF 0.8 = Rs 96/t = US$ 10/t (US$ 15/t rice)

e/ Rice milling and handling Rs 65 per t paddy or Rs 100 per t rice adJusted by

SCF 0.8 = Rs 80/t = US$ 8/t

- 66-ANNEX 3Table 8

INDIA

HIMALAYAN WATERSHED YKANAGEMENT PROECTa/

Financial and Economic Price Assumptions,

Financial -rices Economi c PricesOutputs 1982 1985/90 1982 1985/90

Paddy 1135 139fl 1395 1710

Wheat 1300 1360 1910 2000

Millet 900 1010 1215 1360

Barley 1100 1230 1485 1660

Pulses 2800 2800 3780 3780

S-'joyabean lD1 1100 1485 1485

Oilseeds (mustard) 2800 2800 3780 3780

Fruit b/ 13003 1300 1000 1000

Fuelwood c/ 200 200 250 250

Tree fodder/grass 26 26 26 26

a/ Economic prices of wheat and paddy passed on IBRD commodity forecastsfor 1985-90 dated December 21, L982e Other non-traded and minor foodcrops have been adjusted by a Foodcrop Conversion Factor (FCF)estimated on the basis of wheat and paddy production valued at econ-omic prices divded by their fi-lancial prices (FCF = 1.355

b/ Adjusted by SCF = O 38

c/ Economic price estimated through two approaches both yielding the samesame result: (i) labor saved in collectisng wood and (ii) as thelong-term marginal economic cost to supply soft coke as a substitutefor firewood.

-6 7-ANNEX 3Table 9

INDIA


YIELD PROJECTIONS

Incremental Yield Periodton/ha

Grass

Fuelwood plantation 0.5 - 3 Year 1-8, 11-18Fodder plantation 2 - 4 Year 1-20

Fuelwood

Fuelwood plantation 23 - 48 Year 10, 20Fodder plantation 18 Year 10, 20Farm Forestry 5 Year 10, 20

Fodder

Fuelwood plantation 0.1 - 0.5 Year 3-20Fodder plantation 1 - 5 Year 3-20

HIAAYAN 41A2ER021.I MANAGEMENT 1R00.10(7 Table 10)

1 2 312 1 137 17 1 19 20 TOTALS

Foret Reseve 200.00 1338.00 4023.00 1)438%.0 24730.30 400424.42. s5333.5c 15972QQO 47958.00 37650.00 26861.50 08222.50 1.3475. 56 o2-.00 I 24)9. 52 40624.50 55333.50 55972.00o 40938.00 37186.00 616323.600Civil Soya 4(0.00 2470.00 1900.00 22463.00 4431000 7092l.50 96007.00 95271.00 01301.00 62964.06 65256.00 30607.50 25222.00 27110.00 60510.00 70926.50 96807.00 90221.00 81361.00 62864.00 1059735.5lFode Fle 0.0 500 5128 05 14232.00 51230.00 56700.00 86962.00 101116.00 111272, 00 11120207 2.00 .00 110152.00 100584.00 202668.00 90108.00 89350.00 86967.50 103116.00 111270.00 111272.00 1550756.00

Toool Grass 800.00 0154.00 6039.704 40141707~~~~~~~~1 1,650.50 1t'3.0 306.5 04470 2805 71D.04 2-1 173200 46005 T05.0140.3 1N10 16-4-970.50 200010.0500 230716)8 50 254315 7 .00 340571.06 2:11316.001 3226610.00loose Raserve 0.00 6.00 0.00 co .oo 5,. 00 .00 0.00 2300.00 11957.00 36 109 .00 01070.00 110151.00 1393127.00 12964.00 co .oo 0.00 7300.00 500388.00121000 loya 0.00 0.00 0.0 0.00 0.00 0.00 0.00 0.00 0.0 0600.00 45024,00 101856,00 261092.00 80009.00 001920.00 446112.00 0.00 0.00 0.00 9600,00 1592992.00ladde- Flat 0.00 0.00 0.00 0.00 0.00 0.00) 0.00 0.00 0.0 1800.00 9060.00 08012.00 65080.00 107156.00 165892.00 166800.00 0.00 O( 0.00 180.00 5soo 02524.00lore Farearey 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3000.00 11570.00 31750,00MO 59600.000 89600.00,0107020.00 101975.000 0.0070.90lf0.005.ooo.oo9086609.00

_________ -_________ __________ _________ 226207.00 454447.00 714400.00 871964.00 824375.00 0.50 0.00 0.00 16700.00 3202029.8800 0.00 000 670.00 322579.0Fodd-r(osla.est lares0.00 0.00 10,0 01.90 782.10t 000.50 1799.20 3392,00 5945.70 7451.06 904,7.00 9955.70 9787.00 8-103.90 6120.60 3610.30 1799,20 5992.00 9695.70 0651.10 84271.50(tel .oY.. 0.00 0.0 2v 0.00 133.80 02230 1056720 5258.20 6004.20 9605.80 12932,7 10604.20 17078.60 16654.50 14C41.30 10189.30 6105.70 3229,20 6004.20 9605.80 12932.70 165375.20

Fode -Fet o.o 0.00 10.6 7000 264.0 630.4~0 20O3U4.m411 39066.20 60041,.03 92a083o 1J4280.110 020032.00 i26i70.00 2112:40.00 836,00 4,9420.00 2080400 5064.80 1.7062.00 900676.00 1066828.00Illar oety00 .0 00 00 9.0 980 258540 479.0 025.6 1u320Q4.0 171.0 2633 353o0 02315.00 19108.90 11185.50 2399.45 4879.80 879.60 13200.40 075669.10

Total ladder o.oo~~~~0-0 0.0- O _ 132 _02 45.70 401_.04 1161.0 20776.60 541390,0 93642.91' 1)6304,26 ,8060.60 1249617130 5043.2 49 1 45.900 -72350T. 00 07726.00 54139.70 064.0 25020132.0OorticaAooroAOt..24, uaa~~a 0.00 3.06 0.1100 1.1 r2.2,,2 74.1, 4300 24o83 S/.j6 *lo.6U 9Ao9-Un5-3.9 00 2i0,7.l 26001.00 2932910 .a8.s 3208 15.00 JZ.W0) 31A/3 .0 31205.171( 3i1015.0 006258.00

-69-

ANNEX 3Table 11

INDIA


Economic Cost and Benefit Streams

(Rs Million)

Year Forestry Soil Conser- Livestock Extension andl Horticulture Minor Irriga- Project Ad- Total Total Net

Program vation Works Program Seed Program Developmnent 1/ tion Works 1/ ministrative Costs Benefits Benefits

1 0.55 0.03 0.00 0.05 0.04 0.04 2.84 3.55 0.00 -3.55

2 2.67 0.15 0.14 0.19 0.21 0.21 3.91 7.48 0.13 -7.35

3 7.86 0.52 0.47 0.56 0.65 0.65 7.27 17.98 0.79 -17.184 16.08 3.09 1.11 0.99 1.40 1.44 10.05 34.17 2.92 -31.25

5 25.44 5.11 1.54 1.44 2.29 2.54 13.66 52.02 7.67 -44.34

6 31.32 5.52 1.68 1.53 2.86 3.48 13.49 59.89 15.89 -44.00

7 29.71 5.07 1.10 1.33 2.75 3.86 12.26 56.08 26.98 -29.10

8 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 38.85 28.13

9 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 41.25 30.5310 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 44.15 33.43

11 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 51.58 40.8612 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 69.88 59.16

13 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 107.31 96.5914 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 162.18 151.46

15 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 223.52 212.8016 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 264.21 253.49

17 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 251.97 241.2618 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 45.72 35.00

19 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 46.85 36.1320 1.14 0.15 0.19 0.78 0.00 0.00 8.46 10.72 47.44 36.72

1/ Operating and maintenance costs beyond project investment period (year 7)

have been deducted directly from the Gross Revenues for these items.

ANNEX 3Table 12 (a)

I N[) I RHIMRLRYR WRTERSHED MRNRGEMENT PROJECT

X104

L30.0 _a:Lii

25.0

°20.0Lii

: 15. 0 L

LOi

x104 1 1 12 13 14 15 16 17 18 19 20 21 22 2'3 24

DISCOUNT RRTE

LEGEND= 12.00% - OPPORTUNITY COST OF CRPITRL

- = B.ETOT- -____________ - C.ETOT

_ 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.

-71- ANNEX 3Table 12 (b)

I N D I RHIMRLRYR WRTERSHED MRNRGEMENT PROJECT

~90

580

z 70

z 60

>40

bc30 30

-20

10-

0 5 10 15 20 25 30 35 40 45

PERCENTRGE SHORTFRLL IN BENEFITS

LEGEND= MAXIMlJM EXPECTED FRLL IN BENEFITS IS 20.0%= MAXIMUJM EXPECTED RISE IN COSTS IS 30.0%

-____________ - = TARGET YIELD IS 0.0%BENEFIT SWITCHING POINT IS -46.6%COST SWITCHING POINT IS 87.t1

INDIA

HIMALAYAN WATERSHED MANAGEMENT RPOJECT

Physical Implementation Schedule

Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total

Fuelwood Plantations ha 300 1,457 4,230 8,544 13,468 16,179 14,922 59,000Fodder Plantations ha 100 520 1,584 3,510 5,952 7,994 8,140 27,800Farm Forestry ha 600 2,314 6,346 11,680 17,995 21,605 20,460 81,000Brushwood/Check dams no - 20 84 234 390 507 415 1,650

Crate Wire Dams no - 20 64 180 253 400 383 1,300Drop Structures no - 5 26 74 150 208 237 700

Improved Terraces ha - - - i,326 i,780 1,580 1,314 6,000

Cattle Exchange no 50 210 682 1,392 2,429 2,768 2,969 10,500Dispensaries (improvement) no 3 6 8 12 11 - - 40

Top Working of Fruit Trees ha 10 72 243 564 960 1,034 1,017 3,900Fruit Orchards ha 5 31 95 209 335 415 410 1,500

Living of Channels km 2 9 20 31 50 68 70 250Storage Tanks no 1 5 21 63 129 197 235 650

m

-73-

ANNEX 4Table 2

INDIA


SCHEDULE OF ESTIMATED IBRD DISBURSEMENTS

US$ M

-- Disbursement ---------------------IDA FiscalYear and UP Center TotalSemester Semester Cumulative Semester Cumulative Cumulative

FY 84lst - - -

2nid 0.10 0.10 0.12 - 0.22 1/

FY 85lst 0.40 0.50 0.05 0.17 0.672nd 0.50 1.00 0.05 0.22 1.22

FY 86lst 0.80 1.80 0.05 0.27 2.072nd 1.30 3.10 0.05 0.32 3.42

FY 87lst 1.70 4.80 0.10 0.42 5.222nd 2.20 7.00 0.10 0.52 7.52

FY 881st 2.80 9.80 0.10 0.62 10.422nd 4.30 14.10 0.,10 0.72 14.82

FY 891st 6.40 20.50 0.10 0.82 21.322nd 6.40 26.90 0,,10 0.92 27.82

FY 901st 6.10 33.00 0.10 1.02 34.022nd 6.00 39.00 0.05 1.07 40.07

FY 911st 6.08 45.08 0,.05 1.12 46.20

1/ Estimated effective date August 15, 1983

-74- ANNEX 5Page 1

INDIA


Project Cycle and Responsibilities

Activity Responsibility Action Content

1. Preparation of Subwatershed State Watershed - Preparation of subwatershed - Detailed plan and costProjects Management Cell reports including details estimates for each com-

for each microwatershed. ponent as per appraisalcriteria.

- Discussion of proposed opera- - Details of operationstions with people in project under each component.area.

- Clear with concerned depart- - Tentative implementationments at district and state plan.level.

- Planning to prepare project - Analysis of economicreports 12 months in advance. benefits.

- Map of project area.

Submit proposals to State - Detailed estimates forLevel Steering Committee. proposed works (soil con-

servation, civil works,etc.)

- A note on results of dis-cussions with people,their response to projectproposals, and willingnessto participate in projectactivities.

2. Approval of Subwatershed State Level - Review if appraisal criteria - While making recommenda-Projects Steering have been met. tions for approval by

Committee NWDPC confirm availability- Review of cost estimates. of budget provision, and

incremental staff, and- Obtain formal approval of action taken to set up

Secretaries of concerned implementation committees.departments.

- Budget provision and clearingwith finance.

-75- ANNEX 5Page 2

A c ti_v __ _ Responsibility Action Content

- Pass on to National WatershedDevelopment Policy Committee(NWDPC), GOI.

3. Appraisal Watershed - Designate Appraisal team com- - In case of rejection ofDevelopment prising experts of WDC and proposals give detailedCouncil (GOI) consultants. reasons and suggestions for

improvement.

- During appraisal check (a) - Suggestions (if any) onwhether appraisal criteria minor modifications, projecthas been followed, (b) ade- implementation, etc.quacy of detailed designsproposed, (c) cost estimates,(d) technical soundness andeconomic viability of propo-sals.

- Obtain approval/comments of - Recommendations.IDA.

- Submit to NWDPC with recom-menidations for approval orrejection.

4. Sanction National Watershed - Review recommendation of WDC. - Sanction letter would con-Development Policy tain detailed instructionsCommittee - Approve or reject proposals. and directions on procedures

for releasing of funds,- Simultaneous actions on proj- reporting procedures, and

sanction and release of funds other project implementationto States. matters.

5. Implementation (a) Subwatershed - Discussion of project acti- - Obtain agreement on loca-Management vities with residents of tions for differentCommittee microwatershed and formation project actions. Prepare

(b) Microwatershed of village action groups. calendar of operations andManagement define responsibilities ofCommittee - Fix priorities and prepare village action groups for

action plan based on agreed different activities.priorities.

- Discuss action plan in eachvillage.

- Formation of water users groups.

-76- ANNEX 5Page 3

Activity Responsibility Action Content

District Discussion of action plan andCoordination fixing responsibilities.Committee

State Level Approve Action Plan and releaseSteering funds.Committee

6. Supervision State Watershed Visit Project Area on a regular Suggestion for resolvingManagement Cell basis, discuss problems and take technical, administrative

remedial action. and coordination problems.

Watershed Designate supervision team Progress of each projectDevelopment comprising experts of WDC and component, peoples partici-Council (GOI) consultants and carry out detailed pation, adherence to agreed

supervision of project activities criteria and coordinationin each state. arrangements. Suggestion

for improvement.

7. Monitoring and Evaluation Subwatershed - Preparation of six monthly - Physical progress of eachManagement Unit progress reports and send to project component and pro-

State WMC. gress of expenditure.

State Watershed - Compilation of six monthly - Review and reasons forManagement Unit reports of subwatersheds and slow progress and remedial

submit to State Level Steering action needed.Committee for considerationand also to MOA (GOI).

- Prepare and forward reimburse-ment proposals to GOI.

Water Development - Review six monthly progress -- Suggest remedial actionCouncil (GOI) reports and statements of to states.

expenditures received fromStates.

- Process requests for reimburse-ment.

- Arrange for periodic evaluationof project components.

-77--

ANNEX 6

INDIA


Related Documents Available in Project File

1. Preparation Reports - Uttar Pradesh

(a) Integrated Watershed Rehabilitation and Development Project - UPHimalayas and Siwaliks

(b) Nayar Watershed Zone

(c) Machiad Subwatershed

2. Subwatershed Plans Prepared by IDA

(a) Machiad Subwatershed (UP)

3. Supporting Tables for Economic Analysis

-78-

INDIAHIMALAYAN WATERSHED MANAGEMENT PROJECT

GOI Project Organization

NATIONAL LAND BOARDChairman: Union Minister for Agriculture

NATIONAL LAND RESOURCES_- - - -- - - - _- COSERVATION AND DEVELOPMENT COMMISSION

Chairman: Member Agriculture, Planning Commission

NATIONAL WATERSHED DEVELOPMENTPOLICY COMMITTEE

Chairman: Secretary, Ministry of Agriculture

SECRETARIATNATIONAL LAND RESOURCES CONSERVATION & DEVELOPMENT COMMISSION

WATERSHED DEVELOPMENT COMMISSIONER

IL , &WATERSHED DEVELOPMENT COUNCIL

ADMINISTRATIVE TECHNICAL & TRAINING MONITORING & EVALUATION- UNIT UNIT UNIT

L….1

World Bank-24839

-79-

INDIAHIMALAYAN WATERSHED MANAGEMENT PROJECT

State Project Organization

CHAIRMAN S SERINGCEF SECRETARY -- COMMITTEE

I I

SECRETARV

SECRETARY | PROJECT ___A|

HILL DEVELOPMENT DEPMTMENT (UP) COORDINATOR S I--STATE

I ; I ~~~~~~~~~~I IWATERSHEDi

MANAGEMENT CELLl l

DISTRICT COMMISSIONERDISTRICT COORDINATION

COMMITTEE --- DISTRICT

L L PROJECT MANAGER l l-- | SUBWATERSHED L - …-- …----

MANAGEMENT UNITBWATERSHED

MICROWATERSHED

MANAGEMENT COMMITTEE -- - MICROWATERSHEDChairnan: Project Manager

World Bank -24584

IBRD 16811R820 | S \ . APRIL 1983

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