world bank document€¦ · currency equivalents currency unit yereni dinar (yd) yd 1.000 5...

Document of

The World Bank

FOR OFFICIAL USF ONLY

Rewrt No. 7678-YDR

STAFF APPRAISAL REPORT

PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN

THIRD WADI HADRAMAWT ACRILULTURAL PROJECT

MAY 31, 1989

Country Department IIIEurope, Middle East and North Africa RegionAgriculture Operations Division

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

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CURRENCY EQUIVALENTS

Currency Unit Yereni Dinar (YD)YD 1.000 5 US$2.941US$ 1.00 YD 0.340

(As of February 1989)

WEIGHTS AND MEASURES1 millimeter (m) * 0.039 inch1 meter (m) = 3.281 ft.1 feddan (fd) X 1.038 acres1 kilometer (km) a 0.621 miles1 hectare (ha) 10,000 square meters = 2.47 acres1 square kilometer (km2) - 100 ha a 0.386 square miles1 million cubic meters (Mm3 ) = 810.7'00 acre foot1 kilogram (kg) = 2.20 pounds1 metric ton (t) = 0.98 long tons = 2,205 pounds1 liter (1) 0.264 gallons1 liter per second (1/sec) = 0.0353 cubic foot/second1 Megawatt (MW) = 1,000 kilowattsrnmhos/cm measure of electric conductivity (EC)

PRINCIPAL ABBREVIATIONS AND ACRONYMS USED

AFESD Arab Fund for Economic and Social DevelopmentAPG Agricultural Production GroupAPU Agricultural Production UnitCBA Central Board of AuditingCCSC Central Coordination and SLe* 'g CommitteeDOI Department of Irrigatior.FAO/CP Food and Agricultural Organization /World Bank

Cooperative ProgramFEA Field Extension AgentGDP Gross Domestic ProductHTC Home Trade CorporationIDA International Development AssociationIMU Irrigation Maintenatu:e UnitKFAED Kuwait Fund for Arab Economic DevelopmentLAC Local Advisory CommitteeMAAR Ministry of Agriculture and Agrarian ReformM&E Monitoring and EvaluationMRS Machinery Rental ServiceNBY National Bank of YemenO&M Operation and MaintenancePCAS Public Corporation for Agricultural ServicesPCEP Public Corporation for Electricity and PowerPCMFV Public Corporation for Marketing Fruits and VegetablesPDRY Peopie's Democratic Republic of YemenPMU Project Management UnitPPAR Project Performance Audit ReportR&E Research and ExtensionSMS Subject Matter SpecialistT&V Training and VisitWHAP I/Phase I Wadi Hadramawt Agricultural Project Phase IWHAP II/Phase II Wadi Hadramawt Agricultural Project Phase IIWHAP IlI/Phase III Wadi Hadramawt Agricultural Project Phase IIIWMU Water Monitoring Unit

GOVERNMENT OF PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN

FISCAL YEARJanuary 1 - Decembez 31

El., ,tLr, m.LL L , L



THIRD WADI HADRAMAWT AGRICULTURAL DEVELOPMENT PROJECT

Table of Contents

Chapter Page No.

CREDIT AND PROJECT SUMMARY . . . . . .

I. INTRODUCTION ................ 1

II. THE AGRICULTURAL SECTOR . . . . . . . . . . . . . . . . . 2

A. Resource Base. 2B. Sectoral Context. 2

- An Overview of the Economy . . . . . . . . . . . . 2- The Agriculture Sector . . . . . . . . . . . . . . 2- National Institutions . . . . . . . . . . . . . . 4- Public Invest.nent in the Sector. . . . . . . . . 6

C. IDA Involvement in the Sector . . . . . . . . . . . . 7

TII. THE PROJECT AREA . . . . . . . . . . . . . . . . . . . . . 9

A. Physical Features . . . . . . . . . . . . . . . . . . 9B. Population and Land Tenure . . . . . . . . . . . . . . 10C. Rural Infrastructure . . . . . . . . . . . . . . . . . 10D. Land Use, Agricultural Production and Services . . . . 11

- Land Use and Agricultural Production . . . . . . . 11- Agricultural Cooperatives and Credit . . . . . . . 13- Agricultural Supporting Services . . . . . . . . . 13

IV. THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . 15

A. Project Origin .... . . . . . . . . . . . . . . . . 15B. Project Objectives .... . . . . . . . . . . . . . . 15C. Detailed Project Features . .. . . . . . . . . . . . 16

- Irrigation Development . . . . . . . . . . . . . . 16- Agricultural Development . . . . . . . . . . . . . 18- Project Management ... . . . . . . . . . . . . . 20- Irrigation Maintenance Unit . . . . . . . . . . . 21

This Report is based on two FAO/CP missions to People's Democratic Republic ofYemen, which assisted Government in the identification (October 1987) andpreparation (February 1988) of the project, and evaluation by an IDApreappraisal mission (July 1988) of the FAO/CP Project Preparation Report(44/88 CP-PDY 27 of June 5, 1988). The final appraisal mission (Februlary1989) consisted of: Messrs. Michael A. Nightingale, Agricultural Economist(Leader); Oscar Honisch, Agriculturalist; Luis Moscoso, Irrigation Engineer;and Colin Bruce, Economist.

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

Chapter Pae No.

D. Other Features of the Project . . . . . . . . . . . . 21E. Cost Estimates .......... . ......... 21F. Financing Plan ........ . 22G. Procurement . . .......... .......... 24H. Disbursements . . . . . . . . . . . . . . . . . . . . 25I. Auditing and Accounts . . . ....... .... . 27

V. PROJECT ORGANIZATION AND IMPLEMENTATTON . . . . . . . . . 27

A. Project Management ....... .. .. .. .. .. . 27B. Project Implementation . . . . . . . . . . . . . . . . 30C. Operation and Maintenance . . . . . . . . . . . . . . 30D. Monitoring, Evaluation and Reporting . . . . . . . . . 31

VI. PROJECT BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . 32

A. Agricultural Development . . . . . . . . . . . . . . . 32B. Market Prospects and Prices . . . . . . . . . . . . . 36C. Subsidies, Farm Incomes and Cost Recovery . . . . . . 37D. Benefits and Justification . . . . . . . . . . . . . . 39E. Project Risks . . . . . . . . . . . . . . . . . . . 42

VII. CONDITIONS TO BE MET, ASSURANCES OBTAINEDAND RECOMMENDATION . . . . . . . . . . . . . . . . . . 43

A. Conditions . . . . . . . . . . . . . . . . . . . . . 43B. Assurances.. ............... 43C. Reconmendation ................. . 44

Tables in Text

3.1 Land Use, Crop Yields and Production by District . 124.1 Project Cost Summary by Component . . . . . . . . . . 234.2 Project Financing Plan .234.3 Summary of Proposed Procurement Arrangements . . . . . 254.4 Disbursement Procedures . . . . . . . . . . . . . . . 264.5 Estimated Disbursement Schedule . . . . . . . . . . . 266.1 Net Crop Returns at Full Development (YD) . . . . . . 336.2 Present and Future Land Use . . . . . . . . . . . . . 346.3 Present and Future Crop Production . . . . . . . . . . 356.4 Present and Future Farm Income (YD) . . . . . . . . . 38

ANNEX I

Supporting Tables1. Basic Data on Wadi Hadramawt Cooperatives . . . . . . 452. Financial Statement of Project-Related

Cooperatives . . . . . . . . . . . . . . . . . . . . 46

1 ' 6 ' C I:

ChaDter Pate No.

ANNEX 2

Sipporting Tables1. Sumary of New Irrigation Developments . . . . . . . . 472. Tubewells and Pu.psets Characteristics . . . . . . . . 483. Sumary of iorks for Spate Improvement . . . . . . . . 49

ANNEX 3

Supporting Tables1. Susmary of Farm Machinery . . . . . . . . . . . . . . 502. Incremental Input Supplies for Project . . . . . . . . 513. Summary of Vehicles and Equipment for the

Irrieation Maintenance Unit . . . . . . . . . . . . 52

ANNEX 4

Supporting Tables1. Breakdown of Summary Accounts . . . . . . . . . . . . 532. Summary Accounts by Project Component. . . . . . . . . 543. Summary Accounts by Year . . . . . . . . . . . . . . 554. Estimated Schedule of Disbursements of IDA Credit . . 56

ANNEX 5

Supporting Tables1. Staff for the Project Management Unit . . . . . . . . 572. Implementation Schedule for Groundwater

Irrigation Development . . . . . . . . . . . . . . . 58

ANNEX 6

Supporting Tables1. Sources and Applications of Funds . . . . . . . . . . 592. Economic Analysis of Total Project Investments . . . . 61

ANNEX 7

Selected Documents and Data Available inProject File.. ........ 63

CHARTS

1. Project Organization Chart . . . . . . . . . . . . . . 642. Implementation Schedule . . . . . . . . . . . . . . . 66

MAP

IBRD No. 21479 Wadi Hadramawt Agricultural ProjectDevelopment Plan

3167C49'5 3; 89


THIRD WADI HADRAMAWT AGRICULTURAL PROJECT


Credit and Proiect Summary

Borrower: People's Democratic Republic of Yemen (PDRY)

Amount: SDRs 9.3 million (US$12.0 million equivalent)

Terms: Standard IDA with 40 Years Maturity

ImplementingAgeXeY Department of Irrigation, Ministry of Agriculture and

Agrarian Reform

Project ObjectiveS The proposed project would provide a program for conso-and Desription: lidating, expanding and ensuri.ng sustained development of

lano and water resources in the Wadi Hadramawt servedarea. In addition to completing physical construction,developing organization and management, and intensifyingagricultural production, the project would support policyadjustments for long-term lease agreements over land andpumps, greater autonomy by farm units on cropping patterns,machinery and marketing, improved planning and utilizationof water resources and expanded agricultural supportservices. Financing would be included for:(a) construction of 59 tubewells and irrigationinfrastructure for 3,025 ha; (b) rehabilitatinig spateirrigation works on 2,700 ha; (c) establishib'p anIrrigation Maintenance Unit (IMU) in Wadi Hadramawt;(d) increasing cropping intensity and consolidatingagricultural services on some 6,25C ha of groundwatetirrigated land (3,225 ha existing/3,025 ha under proposedproject); (e) strengthening cooperatives' management tostreamline inputs supply and marketing of vegetables andfruit; (f) project operating expenditures and (g) trainingand technical assistance personnel for developing irriga-tion systems and for improving agricultural productivity.Project organization would be assured by the existing PMUand extension services and backup research would continueto be supplied through tl.e Agriculture Research andExtension Department of the Ministry of Agriculture atdAgrarian Reform.

Benefits and Risks: Immediate benefits would be sustainable increase in cropreturns and higher standards of living for some 1,250 farmfamilies as well as increased food supplies and improvedservices for irrigation and agriculture in the WadiHadramawt area. At full development (PYIO), estimatedforeign exchange savings from import substitution wouldreach US$6.5 million p.a. The project would also help toensure optimu;n utilization and conservation of land andwater resources. rhe estimated economic rate of return

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is 13.11. Cost overrun is unlikely because projectinvestments were derived from ongoing project experience.As the existing PMU will provide continuity for projectdevelopments, delays in implementation would be avoided.Sensitivity tests show that 20% decline in projectedbenefits wottld reduce IRR to 101. The main risk concernssustaining projected cropping intensities, which aretechnically and organizationally feasible given adequateinputs supplies and further liberalization of controls.Government has alread initiated significant policy changeswhich will minimize these risks, and additional assuranceswere obtained at negotiations.

Costs. Financing and Disbursement Summay

Estated Project Costs: 1 '2 Total

Local Foreign Total Base Cost--------------- (US$ million) --------------

Project Management 0.9 3.0 3.9 11Irrigation Development

& Maintenance 7.0 14.3 21.3 62Agriculture, Research& Nurseries Development 1.1 2.9 4.0 12

Farm Machinery Development 0.3 4.7 5.0 15

Total Baseline Costs 9.3 24.9 34.2 100

Physical Contingencies 0.8 1.9 2.7 8Price Contingencies 1.1 3.8 4.9 14

Total Project Costs 11.2 30.6 41.8 122

l/ Exclusive of taxes and duties from which the project would be exempt.

Financing Plan:Local Foreign Total(--------- US$ million -----

Government 9 - 9.4IDA - 12.0 12.0KFAED 1. 10.1 11.9AFESD _ 8.5 8.5

Total Financing Plan 11.2 30.6 41.8

Estimated Completion Date: June 30, 1996

Estimated Disbursements:IDA Fiscal Year

1990 1991 1992 1993 1994 1995 1996---------------- (US$ million) ---------------

Annual - 0.4 2.1 2.5 4.2 1.8 1.0Cumulative - 0.4 2.5 5.0 9.2 11.0 12.0

Economic Rate of Return: 13.1Z


THIRD WADI HADRAMAWI AGRICULTURAL PROJECT


I. INTRODUCTION

1.01 The People's Democratic Republic of Yemen (PDRY) has a geographicarea of 333,000 square kilometers (km') and a population of nearly2.3 million, with an estimated growth rate of 2.5X per annum. Average percapita Gross Domestic Product (GDP) for 1987 is estimated at US$420. Some 60Sof the country's total population, iiving in widely scattered rural locations,depends on agriculture and fisheries.

1.02 Scant natural resources and a harsh climate severely limit thecountry's agricultural potential, and food accounts for about one-third of thetotal import bill. In order to reduce dependence on food imports, Governmenthas placed highest priority on intensifying the use of agriculturalresources. In addition to limited land and water resources, the mainconstraints affecting agricultural production are: shortages of trainedpersonnel, inadequate supply of inputs, and inappropriate institutional,produ'ction and pricing policies which obstruct sustainable development.Government is now introducing a series of policy changes aimed at overcomingthese constraints, by partially liberalizing the agriculture sector,stimulating private sector activities and expanding agricultural productivity.

1.03 Wadi Hadramawt, a key area for agricultural production, is located inthe center of PDRY and physically isolated by mountains and desert. The firstIDA agricultural project in this area, First Wadi Hadramawat AgriculturalProject (WHAP I), was initiated in 1976 (Cr. 615-YDR, US$7.0 million),focussing on infrastructure, pilot developments and instiLution building, andwas completed in 1982. The second phase project (WHAP II, Cr. 1346-YDR,US$9.0 million) has initiated modern agricultural development and will becompleted in 1990. IDA's involvement in this project helped attractcofinancing of US$22.6 million from Arab Fund for Economic and SocialDevelopment (AFESD) and Kuwait Fund for Arab Economic Development (KFAED).Associated axpert studies made since 1980 (para. 3.03), including groundwatermodelling and reassessment of water resources of the Wadi Hadramawt catchmentarea, indicate that planning assumptions for WHAP II (based on lack ofknowledge of wadi source potential) were too cautious. From predictions ofwater levels and salinity, the studies concluded that 65 additional wellscould be constructed with annual potential for pumping 47 Mm'3 of water toexpand irrigation by at least 3,000 ha (giving a total potential developmentarea of 6,500 ha) with annual cropping intensity of up to 150X.

1.04 WHAP II has achieved significant impact on irrigation improvements,institution building and agricultural developments. However, there is needfor a coordinated development program; agricultural production is suboptimal,0&M of ir-igation structures is inadequate and Gover-ament policies arehindering sustainability of development. The proposed project would fucus r nthese aspects.

3 1 67C

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1.05 The Government of PDRY has requested further IDA assistance to helpfinance priority development of the Third Wadi Hadramawt Agricultural Project(WHAP III or Phase III). Based on the water resources study (para. 3.03), anFAO/CP mission visited PDRY in October 1987 and again in February 1988 toassist the Government in the identification and preparation of a Phase 'IIproject. An Tna mission visited PDRY in July 1988 for preappraisal, based onan FAO/CP Project Preparation Report (44/88 CP-PDY 27 of June 5, 1988), andthe final appraisal mission was in February 1989.

II. THE AGRICULTURAL SECTOR

A. Resource BaSe

2.01 PDRY is mostly desert or arid scrub land, with about 120,000 haclassified as potentially cultivable. The annual cropped area ranges from50,000 to 70,000 ha and is concentrated in small areas which depend onseasonal, variable spate flows from some twelve widely separated Wadisystems. The more reliable crop production areas are those irrigated bypumping groundwater; these are limited to approximately 25,000 ha, of whichWadi Hadramawt is the most important.

2.02 The climate is arid-tropical with moderate winter temperatures andhot and humid summers. Rainfall is highly erratic, occurring mostly in thewinter and spring seasons and nationwide averages less than 200 mm annually.These conditions, scarce groundwater resources and the absence of anysignificant perennial wadi flow control agricultural development.

B. Sectoral Context

An Overview of the Economy

2.03 Since its creation as a sovereign state in 1967, PDRY's economy hasbeen besed on centralized planning and collective ownership of productionresources. Economic growth, which previously averaged 62 per annum, sloweddown considerably during ;978-87 due to mounting pressures caused by:rehabilitation of the country's infrastructure damaged by 1982 floods,drought--extending from mid-1983 to 1986, civil hostilities in 1986, and asharp decline in workers' remittances (which previously contributed about 50%to Gross National Product) from US$427 million in 1985 to US$288 million in1986 and to US$304 million in 1987. GDP, whirh declined in 1982, grew byabout 2Z during 1983-84, was stagnant in 1985 and declined again by about 122in 1986 as a result of import restrictions and reduced investment activity.There was a slight recovery in 1987, but production 1.evels achieved in themid-1970s are not likely to reco-er before 1990 when the situation shouldimprove as newly exploited oil revenues start to flow.

The Agriculture Sector

2.04 Agriculture in the Economy. While output from crops, livestock andfishing accounts for only 16% of GDP, some 41Z of the country's economicallyactive labor force is employed in the agriculture sector. Although someimportation of food is inevitable due o the limited agricultural resourcebase, the share of imports has increased to 30% in recent years, including 902of cereal requirements, 502 of livestock products and 252 of vegetables and

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fruit. Government's priority for the Third Five-Year Plan is to reverse thistrend by raising productivity from traditional crops and livestock and byattaining self-sufficiency in vegetables and fruit.

2.05 Of the 60,000 ha cultivated annually, it is estimated that 802 is infield crops (cereals, 30,030 ha; forage, 15,000 ha; and cotton and pulses,3,000 ha), 12S is in permanent crops (dates, 5,400 ha; fruit trees, 1,200 ha;and coffee, 600 ha), and 81 (4,800 ha) is in vegetables and soft fruits.National livestock resources are estimated at 1.25 million goats, 800,000sheep, 80,000 camels, 75,000 cattle and 820,000 poultry.

2.06 Sectoral Performance. During the period 1973-80, the performance ofthe agricultural sector was low, with GDP increasing at some 1.8% per annum atconstant prices. In the 1980s, the growth rate has expanded to average 2.7%p.a. However, this includes relatively good years (1985: 8.51) which aremasked by declines caused by massive flooding in 1982 and subsequent drought.Growth was also obstructed in 1986 by severe restrictions in imports. As aresult, sector performance during the second five-year plan period (1981-85)was substantially below the 9% target average annual growth rate.

2.07 Sector Organization. About 902 of cultivation is by individuals,and, of this, alout two-thirds is farmed by the cooperatives, about 251belongs to private farmers, and another 10% is utilized by 42 state farms.Although Government control in the sector has, traditionally, been pervasive,affecting investment, production and marketing of strategic crops, inpractice, national production plans are now being based on farmers' choice ofcrops.

2.08 Cooperatives play a key role in implementing agricultural policies.They supply farm inputs, pumps, agricultural machinery and spare parts, notonly to members but also to private farmers. They coordinate crop productionacreages and targets, collect agricultural production taxes and assist in theprovision of credit and the marketir.g of agricultural produce.

2.09 Historically, prices for farm inputs and farmgate prices of majorcrops have been controlled by the Government. In recent years, however,farmers have been permitted to sell up to 401 of some crops--especially fruitsand vegetables--in local markets. Animal fodder and livestock are the mostimportant agricultural output for which prices are not controlled and wheremarketing is handled exclusively by the private sector. State marketingagencies handle most of major crops, like: wheat, maize, sorghum, sesame andtobacco, plus some 401 of fruits and vegetables. Individual farmers havetraditionally paid production taxes to Government averaging 101 on all majorcrops except fodder, while state farms are subject to 85% tax on profits.

2.10 Prices for most agricultural commodities are laid down by Governmentsupposedly at a level to allow reasonable margins for producers. However,there is no routine mechanism for monitoring producer returns or dounstreammarketing costs, and most prices have remained static since the mid-1970s. In1987, MAAR introduced s-easonal differentials on producer prices for onions; asa result, production expanded in 1988 and imports were eliminated. Thisexperience has spurred Government on to reduce marketing controls. Fertilizerprices have been constant since 1980 and farmers are paying twice as much asthe total costs. Labor costs have increased in line with scarcity of supplyand expanding demand.

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2.11 Constraints on ARricultural Production. Apart from scant naturalresources and the periodic hazards of floods and droughts, agriculturalproduction has been constrained by inappropriate policies and weak supportservices. These included: (i) uneertainties over cultivation rights, whichdiscouraged long-term developments and routine maintenance; (ii) centrallyplanned and inflexible crop production programs, which tried to specifyfarmers' cropping patterns; (iii) shortages of crop production inputs, whichobstructed optimum and timely planting; and (iv) inadequate incentivesregarding input/output prices and produce marketing, which reducedprodactivity.

2.12 Government has recognized the problems caused by these policies andstrategies and, in 1989, started to introduce measures to reverse theireffect. These include: (.) issuance of documents specifying ownership offruit trees and date palms, which is now ongoing, and agreement to issuedocuments specifying cultivation/ownership rights on farmland for existingfarmers and their families, as soon as legislation is enacted (para. 4.03);(ii) acceptance of production planning for each governorate based on farmers'choices; (iii) review of the role of parastatal organizations (paras. 2.18,2.19 and 3.22), revision of procurement and pricing procedures, and increasein foreign exchange allocation for crop production inputs (para. 5.13); and(iv) acceptance of role for private traders in wholesale/retail marketing offruit and vegetables, and corresponding deregulation of prices (para. 2.20).Introduction of these measures is proceeding in phases and IDA is assistingthe process through continuing sector discussions.

National Institutions

2.13 The Ministry of Agriculture and Agrarian Reform (MAAR) is theprincipal agency responsible for agriculture and i3 structured alongfunctional and regional lines. The Ministry has eight main Departments:Administration and Finance, Planning, Irrigation (DOI), Plant Production(previously called State Farms), Cooperatives (DOC), Research and Extension(R&E), Animal Wealth (DAW), and Machinery Rental Service (MRS). TheseDepartments implement and supervise MAAR policies and projects. In all sevenGovernorates, there is a Department of Agriculture which is divided intosections corresponding to central line-departments.

2.14 The line-departments suffer from shortages of trained and experiencedstaff and, at governorate level, some of the line-departments are not evenrepresented. At the central level, there is particular need for:(a) strengthening survey, analytical and Monitoring and Evaluation (M&E)capability; (b) restructuring DAW to be production oriented; (c) establishinga suitable agency in the Department of Irrigation (DOI) for coordinating andsupervising the operation and maintenance (O&M) of irrigation developments;and (d) developing an effective planning capacity for policy and sectoranalyses and project preparation.

2.15 Cooperatives. Since the Agrarian Reform of 1969, 56 cooperativeshave been formed, including 35 which are service and 21 production-cum-servicecooperatives. Total membership is reported to be approximately 54,000, ofwhich 46,000 are individual members and 8,000 are in production groups. Poormanagement and central controls have prevented effective development ofcooperatives. Cooperatives make substantial deductions from farmers' sales,including 5% commission both for supply of inputs and for marketing and 3%

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social security charge. Despite the level of deductions, most cooperatives inthe country are unprofitable because of low financial turnover, untrainedmanagement, high overhead and personnel costs and financial weakness.However, the four cooperatives in the proposed project area are relativelyefficient and financially stable. In 1988, the Department cf Cooperativesmade a nationwide study with a view to improving cooperative services. Thishas led to proposals for granting more autonomy, reducing Government controlsover organization and wages, anid strengthening operation efficiency. Thesechanges are beirAg enacted as part of Government's moves for liberalizing theagriculture sector. These proposals have been reviewed by IDA and areacceptable. At negotiations, an assurance was obtained that MAAR would ensurethat training is provided for strengthening management of each of the fourcooperatives in the project area and that trends in their long-term debt toequity ratios and total liability situations are monitored annually so as toensure theih continued financial viability [para. 7.02(a)].

2.16 Agriculture Research and Extension Services (R&E). The Department ofAgricultural Research and Extension was established in 1980. Two researchstations, one located at El Kod close to Aden and the other at Seiyun in theproject area, are the major research facilities in the country. Agriculturalextension services operate in each governorate. They were initiated in WadiHadramawt under WHAP I and are being strengthened under WHAP II. The Trainingand Visit (T&V) approach has been introduced through the ongoing AgriculturalR&E Project (Credit 1557-YDR) in Hadramawt, Lahej and Abyan Governorates, andincludes effective coordination between research and field extensionoperations.

2.17 Field extension services are operating well and are appreciated byfarmers. With continued support and improved facilities, this service wouldevolve into a problem-oriented practical advice and demonstration service.There is urgent need for field extension services to provide more intensiveproduction systems and improved production recommenidations to the farmers, inparticular for groundwater based agricultural areas. In research, particularattention is needed for technological work on irrigation agronomy, farmmechanization, appropriate farming systems, in-field trials, crop rotations,fertilizer application, cultural techniques, screening and selection of cropand forage varieties, and evaluation of indigenous livestock species.

2.18 Machinery Rental Service (MRS). Sixteen field stations nationwideprovide heavy earth-moving equipment and land cultivation services for farmerson a rental basis and machinery maintenance services for other agencies. Theefficiency of MRS units varies. Their main problems are lack cf foreig.aexchange allocation for purchasing spare parts, unreliable and inadequateoperating funds, weak management and inadequate coordination with cooperativesand farmers and acutely seasonal demand. Machinery rental charges have beenfixed since 1983, and now cover only cash operating costs. However, thisresults more from poor work organization and low productivity due toinadequate incentives for operators, than to low unit charges. The MRS inSeiyun, with good maintenance facilities and active engineering staff,operates with reasonable technical efficiency and could be adapted to providesustainable backup and servicing facilities for farmers (para. 3.22). Intime, when Agricultural Production Units (APU) are operating commercially,there would be scope for private sector involvement in farm machinery services(para. 2.12).

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2.19 The Public Corporation for Agricultural Services (PCAS) has monopolycontrol over inputs supplies; it fixes prices a. ually (July-June) for farminputs, pumps, agricultural machinery and spares. At current rates, farmersare charged double the actual costs for importation and distribution offertilizers and chemicals. This results from inefficient management in PCASand inadequate review procedures, both of which are now being examined in thecontext of Government's liberalization moves. This is expected to involverationalizing its staffing, streamlining its organization and improving linkswith cooperatives (para. 2.12).

2.20 Marketing Channels. The Public Corporation for Marketing Fruits andVegetables (PCMFV) and Home Trade Corporation (HTC) buy, store and marketfruits and vegetables, and cereals, respectively. Purchases havetraditionally been made through cooperatives. The main problems associatedwith marketing by these corporations are poor cor lination, and the lack ofproper transport and spoilage in handling of vegetables and fruit, whichresult in excessive losses. Government's libeialization moves for theagriculture sector include policy and institutional reforms for the operationof private traders and the adjustment in PCMFV operations to provide wholesaleservices and to develop modern retail outlets (para. 2.12). As a result,since early 1989, private traders have bee l enabled to freely operate in themarketing of farm produce.

2.21 Agricultural Credit. The National Bank of Yemen (NBY) is the solecommercial bank. It has 28 branches, amongst which, all agricultural creditis coordinated by one branch in Aden. NBY's net assets in 1987 wereequivalent to US$392.6 million, with an assets/liabilities ratio of 1.5.Total advances (1982-1987) averaged US$307 million p.a., of whichUS$26.4 million (8.6X) was for agriculture and fisheries. Agricultural loansare mostly made to cooperatives who on-lend to individuals or farmers' groupsfor short-term (1 year) or medium-term (7 years) periods. The interest rate,set by the Ministries of Finance and Planning, together with the Bank of Yemen(Central Bankl and in consultation with MAAR, is currently set at 5-1/22 p.a.,which is positive in real terms. NBY operates reasonably efficiently,although its management systems are antiquated. NBY is providing medium-termloans to WHAP II beneficiaries for irrigation pumps and farm machinery(para. 4.23). Farmers in Wadi Hadramawt have a good record of loan repayment.

2.22 Training. The Nasser College of Agricultural Sciences is part ofAden University and offers a Bachelor's degree program in agriculture. Anagricultural training institute located at Lahej provides training tointermediate technicians. The Giar Training Center offers short-term,in-service training courses for the staff from extension, cooperatives andstate farms. The Dar Sa'ad Cooperative Training Institute offers trainingcourses in management skills to state farms and cooperatives' employees.These institutions generally receive insufficient operating funds and, as aresult, the practical field-oriented aspects offered and training courses forfarmers are insufficient. WHAP II and the research and extension services arestaffed mostly by personnel with initial training from the Nasser College orthe technical institutes. This basic training would be supplemented byin-service training through the project.

Public Investment in the Sector

2.23 The Government's Third Five-Year Plan (1986-1990) provides for totalinvestment of YD 612.3 million. This includes YD 89.9 million, or 14.72, for

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agriculture, which represents an increase of nearly 30% over the provisions ofthe Second Plan. Actual investment expenditures for agriculture in 1986 and1987 totalled YD 34.3 million, and estimated expenditures for agriculture andfisheries totalled YD 16.9 million f-r 1988.

2.24 The Third Plan is targeted on: (i) expanding crop production by 361(especially from sorghum, cotton, fruits and vegetables) through improvementsin irrigation, farm machinery utilization, and inputs supplies; and(ii) expanding livestock production by 21X through improvements in selectionof indigenous stock and forage supplies. These objectives reflect sectorpriorities and significant achievements have already been realized invegetables, fruit and forage production. However, they are unlikely to befully realized due to the combined effect of drought (1986), foreign exchangerestrictions (1987/88) and the disincentive of agriculture policies. Whilelittle can be done to directly counter natural hazards, strategies fordiversifying cropping patterns and improving resource conservation shouldcontribute indirectly. Revised allocations should improve the foreignexchange situation for the short term and oil revenues should give greateralleviation in the medium term. The incentives from policy revisions nowunderway are likely to have significant impact on production. Due todevelopments under WHAP II, incremental output in Wadi Hadramaawt is expectedto be close to Third Plan objectives; and this trend is likely to accelerateunder the proposed project.

C. IDA Involvement in the Sector

2.25 IDA Operations. IDA has financed three fisheries (US$19.5 million)and five agricultural (US$34.2 million) projects. Of the latter, fourprojects have been for the development of irrigated agriculture in WadisTuban, Hadramawt (2) and Beihan, while the fifth concerns the strengthening ofnational agricultural research and extension (R&E). In addition to support byKFAED and AFESD for WHAP II, cofinancing of US$6.1 million has been providedby AFESD for the Wadi Tuban Project (completed 6/30/84), and US$6.0 million bythe International Fund for Agricultural Development (IFAD) for the Wadi BeihanProject (completed 12/88).

2.26 The Wadi Tuban Project (Cr. 768-YDR), which was closed one yearbehind schedule, sought to improve agricultural production on cooperative andstate farms totalling 8,500 ha through increased use of inputs, improvedpractices and the construction of a groundwater irrigation network. The WadiBeihan Project (Credit 1145-YDR), which was extended by one year, has exceededits objective of increasing agricultural production on about 4,000 ha of mixedspate- and well-irrigated lands. The ongoing R&E Project (Cr. 1557-YDR)started in 1986 and is progressing well in its objectives to strengthen thenational agricultural research program and to develop an extension service fortransmitting the research findings to the farm level.

2.27 Wadi Hiadramawt Developments. The objective of WHAP I (Cr. 615-YDR -1976 to 1982) was to stimulate increases in agricultural production on about8,000 ha of irrigated land through the provision of extension units, inputs,and feeder roads. Finance was included for a feasibility study on groundwaterresources and capacity for increasing irri_ated agriculture in WadiHadramawt. The Project Performance Audit Report (PPAR - February 16, 1984)concluded that "full benefits of the project would not be realized until thecompletion of the Second Wadi Hadramawt Project." Progress of WHAP II

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(Cr. 1346-YDR - effective date December 30, 1983) is generally good. Physicaldevelopments are largely completed, with quantities and qualities at or betterthan SAR plans: equipped tubewells, 56 (55 target); intensive irrigationconstructions for 3,360 ha (3,225 ha); spate renovation, 200 ha (200 ha);established Agricultural Production Units (APU), 70 (55); and sprinklerirrigation being installed, 62 ha (75 ha). Field extension services aredeveloping effectively and, although agricultural production is lagging (dueto delayed construction start-up, procurement of machinery and inadequateinputs supplies), fa-.mers are participating enthusiastically and initialproduction targets cf 93S cropping intensity are expected to be surpassed,rising to 1101 within the period to prnject maturity. This credit is expectedto close on June 30, 1990.

2.28 In addition to direct project involvement, IDA has since 1975developed an effective sector dialogue with Government. This sector workfocussed on evaluating past achievements, analyzing subsectors for which PDRYhas comparative advantages, and identifying physical and organizationaldevelopments for better exploiting agricultural resources. This work includeddetailed discussions on adjustments to policies and strategies to helpstimulate improved productivity while respecting the objectives on whichsuccessive Five-Year Development Plans have been founded. An AgricultureSector Memorandum will be finalized in 1989.

2.29 Lessons Learned. IDA's lending for agriculture has focussed ondeveloping approaches for harnessing irrigation resources, initiating researchand extension operations for expanding crop production and liftingproductivity, improving the supply and utilization of inputs, developinginstitutions and training personnel. In most cases, developments arecontinuing; however, the important lessons learned to date reflect the needfor: (a) security of tenure to encourage farmers to make long-terminvestments in development and maintenance; (b) greater emphasis is requiredfor planning, operation and maintenance of irrigation works and for recoveryof costs from beneficiaries so as to ensure sustainability; (c) diversi-fication and intensification of agricultural production is necessary forjustifying costs of irrigation and other inputs; (d) systematic reviews ofinput/output prices and supports should be introduced in order to ensureeffective production incentives; (e) specific provisions are necessary forminimizing bureaucratic d:lays in project start-up and procurement procedures;and (f) progress monitoring for key aspects of development should be gi;enpriority. An action plan has been agreed with MAAR to rectify theseweaknesses prior to initiation of the proposed project.

2.30 In March 1989, floods (estimated probability occurrence of 1 in 50years) hit the project area, damaging flood bunds (5,000 m), canals (4,500 m)and land leveling. Subsequent inspection (5/89) by WHAP II cofinanciersagreed on an action plan covering an engineering review of flood protectionworks and rehabilitation for damaged structures. This work, which should becompleted by December 1989, will be executed jy the existing consultant andcontractor and will be financed from savings under KFAED/AFESD loans. Thisexperience showed that damage to crop production areas was less extensive thanwould have occurred under the traditional irrigation system, therebyvalidating the designs of project constructions. The further engineeringreview will include proposals for structural adjustments and additionalfortifications to be incorporated into the proposed project, therebyminimizing the risk of damage from future floods.

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III. THE PROJECT AREA

A. Physical Features

3.01 Location. The project area is located in Wadi Hadramawt which liesin the central part of PDRY in the Hadramawt Governorate (Map, IBRD 21479).Flanked by 200 to 300 m high limestone cliffs 2 to 10 km apart, the Wadi'iulley runs for about 120 km. The areas to be developed by the project aredistributed throughout the Wadi in the districts of Al Qat'n, Shibam, Seiyunand Tarim. Seiyun, the project headquarters, is situated 500 km northeast ofAden, and 200 km north of Mukalla, the port city and capital of theGovernorate.

3.02 The Climate of the project area is hot and dry, with mean monthlydaily temperature varying between 34°C in July to 20°C in December. Meanannual pan evaporation measured at Seiyun is 3,000 mm/year. Relative humidityranges between 61% in January to 35X in June. Annual rainfall averages around50 mm. Occasional dust storms and infrequent local hail storms occur.

3.03 Water resources mostly depend on groundwater; there are no perennialrivers and the Wadi flows are erratic and unreliable. Assessment of surfacewater resources, refined through a series of studies-L since 1980, provide aclear picture of the regional water balance and recharge to the aquifers.Groundwater supplies depend on three main aquifers. The most shallow aquiferis saline to very saline in nature (EC 1.5 to 7.5 mmhos/cm). The secondaquifer rests in a rather compact ccnglomerate layer, is low yielding and oflittle economic importance. The third aquifer is in Mukalla sandstone, whichis 300-400 m deep and has acceptable water quality (EC < 1.7 mmhos/cm). Waterabstraction from the collection area has risen from about 20 Mm3/year in1952 to an estimated 159 Mm3 in 1985 (Project Working Papers) and isgenerally utilized inefficiently. An estimated 111 Mm3 of water is pumpedannually from the shallow aquifer, including 21 Mm3 in the project area andthe saline water from this source has deleteriously affected soils in the area.

3.04 The final master water plan (4/88) resulting from the cumulativeinvestigations concluded that the total inflow to the aquifer (recharge,boundary inflow and storage change) is 357 Mm3/year. The precise assessmentof groundwater resources of the Wadi Hadramawt area from the various studies,including model predictions for both water levels and salinity forecasts,showed that the interim planning assumptions for WHAP II development to beovercautious and demonstrated that there is ample recharge capacity forconstructing additional deep wells to irrigate at least 3,000 ha. Theestimated drawdown in tie development areas after L0 years will average 15 mfor Phase II developments, allowing for an additional 3 to 6 m from annualpumping of some 52 Mm3 for further developments included under the proposedproject. The quality of the sandstone aquifer is predicted to remain high.

3.05 Topography and Soils. The topography of the valley plain slopes1:1,000 north and 1:500 east. The micro relief is irregular with up to

1/ Coordinated reports issued by: SOGREAH (1981), USSR/Yemeni Project(1981 & 1984), Binnie and Partners (1987), and Sir M. MacDonald & Partners(1988).

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2-3 m vertical intervals within 10 ha blocks. Consequently, land levelling isnecessary for furrow and basin irrigation. Soils are alluvial and range fromcoarse-textured sandy soils to fine silt loams. In common with most hot aridzones, these soils contain low organic matter and are calcareous with alkalinereaction. Water holding and cation exchange capacities are also low and willrequire more frequent irrigation and fertilization than higher clay contentsoils. Overall drainage characteristics are good, while limiting factors aremicro relief and salinity. The saline soils can be reclaimed by leachingwithout serious difficulty at initial water application rates of 2,500 m /hato 15,000 m3/ha.

B. Population and Land Tenure

3.06 The population in Wadi Hadramawt is estimated at 225,000, or 22,000families of about 10 persons. Some 560 families are benefitting from Phase IIdevelopments and an estimated 620 farm units exist in the 17 areas pro2osedfor new groundwater-based development under the project. Together thedevelopment would involve some 12,000 persons. Labor shortages are decliningin the Wadi Hadramawt area as Yemeni workers are returning from the Gulfcountries.

3.07 Land tenure in Wadi Hadramawt includes privately owned lands, thecooperative-owned lands and state farms. The main land users are fiveservice-cum-production type cooperatives with a total cultivable area of16,600 ha and nine state farms with a total area of 1,700 ha. The state farmshave a responsibility for producing selecteu crop seeds, but presently areonly producing some onion and wheat seed. Part of the Suwayri State Farm isutilized for trials by the Seiyun Research Station. About 74Z of the area tobe affected by the project is covered by Al Qat'n (1,220 ha) and Seiyun(1,040 ha) cooperatives, the remainder being part of the Shibam (605 ha) andTarim (160 ha) cooperatives.

3.08 Cooperative members are either beneficiaries of land reforms ororiginal small holders whose land was incorporated in the cooperatives ofwhich they became members. Both categories collaborate in AgriculturalProduction Units (APU) which currently include an average of three familieswho jointly operate a well and pump (about 10 1/sec) and associated irrigationnet-orks. On a family holding of 5.0 ha, only 2.5 ha is farmed annuallybecause of poor utilization of soils and water, shortage of inputs and laborconstraints in the absence of farm machinery. Farm work is divided within thefamily. Women are generally involved with planting, weeding and harvestingfood crops and forage, as well as tending livestock, while men do landcultivation, irrigation and crop treatment.

C. Rural Infrastructure

3.09 Communications. Air transportation is maintained between Seiyun andthe rest of the country by flights most days to Aden and Mukalla. Goodoverland transportation is by a blacktop paved road linking Seiyun to Mukalla(220 km) and thence to Aden (600 km). Within the Hadramawt Valley, a similarmain road links most urban centers from Tarim, in the east, and to Al Qat'n,in the west. in addition, an 85 km network of feeder roads was built underWHAP I and this network has beeii extended under WRAP II through the completionof 27 km of farm roads.

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3.10 Electric Power and Water Supplies. Electric power supply source isthe central power plant of 4 x 4 MW capacity in Qaraw, constructed with IDAsupport (Credit 829-YDR). Four substations of 33/11 KV and some 95 km of33 KV and 647 km of 11 KV electric power lines serve settlemen-s and waterwells. Peak loads have increased to slightly more than 10 MW. The PublicCorporation for Electricity and Power (PCEP) is currently installing a fifth6 MW generator. This will bring the operating capacity, with one stand-byunit, to 16 MW. Allowing for future domestic demand increases at some 5X perannum, it is estimated that this installed capacity will be adequate to meetthe power requirements of the total irrigation requirements under WHAP II andthe proposed Phase III developments, until 1991. Under its power developmentplan, Government is comitted to add two further 6 MW-capacity generators *n1991 and 1994; this would ensure the power demand for the project. Anassurance was obtained from Government at negotiations that PCEP wouldcontinue to provide adequate power supply to operate the pumps on thetubewells constructed under these projects throughout their life[para. 7.02(b)].

3.11 At present 200 tubewells, about 2,000 open wells, 53 springs and anumber of small water reservoirs are used for the water supply in WadiHadramawt. About 60% of the population has piped drinking water supply.WHAP I assisted the Public Water Corporation with improvements of the watersupply systems at Shibam, Al Qat'n and 22 adjacent villages and, morerecently, a fiest-stage water supply scheme has been undertaken at Seiyun.

3.12 Education and Health. The Wadi Hadramawt Valley has a good systemof primary schools. Education at the secondary and post-secondary level isprovided only at Seiyun. A .eacher's training college and a farm machinerytraining institute are located at Seiyun (IDA Cr. 494-YDR). Schooling outsidethe main wadi is less developed. There is a public hospital at Seiyun, withhealth clinics located in the outer areas. A hospital has recently been builtat Al Arsamah in Wadi Duan with private funds. The available grains (wheat,rice, sorghum), dates, sugar, fish, dairy products, fruit and vegetablesprovide sufficient levels of calories; while it is estimated that intake ofanimal proteins and vitamins are insufficient. This situation woulld improveas a result of project developments due to the diversified production patterns.

D. Land Use, Agricultural Production and Services

Land Use and Agricultural Production

3.13 Land use follows two general patterns depending upon the source ofwater. The first depends on seasonal rains and spate irrigation where sorghumis grown, generally for forage but, when soil water suffices, for grain. Theonly perennial crops grown under spate conditions are dates. Stone masonarysills or dry rubble weirs have been constructed in most wadis, which raise thewater level and permit flooding or flow by channels to fields. Inside WadisIdim, Ain, Duan and Amd, which are lateral extensions cf Wadi Hadramawt, thereis an estimated 2,700 ha where reliable irrigation from spate di-rersions ispracticed every two or three years.

3.14 The second land use pattern depends on grourdwater pumping, mostlyshallow hand-dug wells equipped with electric and diesel-pumped verticalturbines and centrifugal pumps. Approximately 75 deep boreholes exist in theproject area, of which 63 have been constructed under WHAP II. Developments

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under WHAP II involve deeper boreholes (140-180 m) equipped with submersibleelectric pumps. The extent of groundwater irrigation resources in the WadiHadramawt area presently could command some 8,000 ha, of which about 6,250 halie in the project area. Traditionally, water pumped from shallow wells isconveyed to cultivated basins through earthen ditches. This involves up to70% water losses due to poor layout and construction and inefficient watermanagement. Nearly half of the land remains fallow due to poor irrigationtechnology, inadeqtate pumps and farm machinery, labor shortages, and lack ofincentives for farmers. The proposed project aims to rectify theseinefficiencies (paras. 4.12 and 4.16).

3.15 Agricultural production. In addition to cereals, pulses andvegetables, dates are an important traditional crop, and about 91 (275 ha) ofthe area served by wells is in date palms. In the areas selected forgroundwater irrigation development, there are three major farming systems:two based on cereal cultivation and the third involving extensive date palmplantations. The two cereals systems, which occupy almost 80Z of the totalarea, typically utilize about 50% of the cropped area for wheat, 20%-30% forsorghum and the balance for alfalfa, sesame, and vegetables. Vegetableproduction is mostly tomato, onion and garlic; and, in addition, potatoes havebeen introduced recently. These two systems differ in cropping intensities(ranging from 38% to 651) and in the relative proportions of thelabor-intensive, high-value crops. In the third system, which has arelatively high cropping intensity (651), dates occupy some 172 of farmareas. Land use patterns and yields and production of the main crops assurveyed during project preparation are given in Table 3.1:

Table 3.1: LAND USE, CROP YIELDS AND PRODUCTION BY DISTRICT

Al Oat'n and Shiba Sectors Seivues and Tarim Sectors Total Area to be DevelopedArea Yield Production Area Yield Production Area Production

Fallow & Crops (ha) tkol (tons) (ha) (kal (tons) (ha) itonsl

Fallow 848 0 0 700 0 0 1,548 0

CropsWheat H.Y.V. 207 2,050 424 72 1,850 133 279 557w'heat (Local) 213 1,269 270 120 1,150 138 333 408Sorghum (Sumter) 212 1,143 242 76 1,080 82 288 324Sorghum (winter) 0 0 0 28 962 27 28 27Alfalfa 62 61,000 3,782 49 61,000 2,989 11I 6,771Garlic 15 6,204 93 4 3,024 12 19 105Onions 22 15,000 330 24 12,000 288 46 618Sesame 8 733 6 4 405 2 12 8Tomatoes 1 13,595 231 5 13.935 70 22 301Potatoes 14 15,5'S 218 11 14,300 157 25 375Melons 20 9,523 190 7 9,523 61 27 257Coriander 12 645 7 0 0 12 7

Crop Total 802 400 1,202 0

Date Palm 175 900 158 1u0 900 90 275 248

Total Area 1.825 1.200 3,025

Source: Indicative crop distribution and yields based on consultant samplesurvey, February 1988.

3.16 Typical agricultural practices in the project area are: (a) hiring ofMRS for plowing and harrowing; (b) levelling and plotting of basins by hand

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tool; and (c) manual sowing, planting, weeding and harvesting of all crops.Farmers mainly tse their own seeds except for high-yielding wheat varietiea;(Ahgat and Kalyansona, first introduced in mid-1970s and increasing steadilyin production area), and vegetables and seed potatoes which are mostlyimported from Europe by PCAS. Fertilizer applications of 100 kg urea plus50 kg triple superphosphate per ha are reco mended for the project area.However, these applications are not generally being achieved in WHAP II areasdue to shortage of supplies. Pest control, although uncommon, is increasing.Under the proposed project, crop production technologies would be modernizedand intensified (para. 6.04).

3.17 A sample survey in the project area indicates that a typical familyowns 11 sheep and 17 goats, while the total livestock population of the areaincludes some 30,000 sheep and goats together with some donkeys and a smallnumber of cattle and camels. Livestock normally graze crop residues (mostlysorghum stover and straw) or rough grazing supplemented with green alfalfa.Underfeeding was traditionally common due to the shortage of supply andprohibitive.y high prices for alfalfa; but this situation is now improving asa result of expansion in forage production.

Ariculturl Cooperatives and Credit

3.18 There are four district-based production and services cooperativesserving the project area (Al Qat'n, Shibam, Seiyun and Tarim). Particulars ofeach cooperative and its financial position are given in Annex 1, Tables 1 and2, respectively. They have a total membership of 3,187 and are typicallyoperated by a manager with four administrative sections involving a staff ofbetween 30 and 50. Each cooperative has an elected management committeeincluding farmers' representatives. The physical facilities of eachcooperative include office buildings, storage, vehicles and limited quantitiesof farm machinery. In addition to production and marketing services, thesecooperatives obtain seasonal and long-term credit on behalf of farmers fromNBY. The cooperatives operate suboptimaliy due to untrained managers, poorbusiness organization and overstaffing. Nonetheless, all four are profitable(profit to income averaging 27% in 1986 and 1987) and financially sound(estimated total asset value and liquidity equivalent to US$1.0 million andUS$1.5 million, respectively). Training provisions under the proposed projectwould help to strengthen standards of operation and management (para. 5.11);this would be important in view of increasing demand for services andorganizational support and possible decline in earnings which may arise as aresult of liberalization of produce marketing (para. 6.12).

Agricultural Supporting Services

3.19 There are five main agricultural institutions in Wadi Hadramawt,Seiyun Agriculture Research Certer, Seiyun Agriculture Extension and TrainingService, Seiyun Machine Rental Service, Seivun PCAS branch, and Seiyun branchof the PCMFV. The first two work directly together to investigate,demonstrate and extend appropriate crop production technologies. The secondtwo supply inputs and land preparation services to farmers through theirdistrict cooperative. The fifth is responsible for buying fruit andvegetables from cooperatives and for wholesale/retail onselling.

3.20 Agriculture Research. The Seiyun Agriculture Research Stationincludes seven sections: agronomy, plant protection, soils, horticulture,

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forestry, production economics and mechanization. The station's 20 haexperimental farm is located at Suwayri, 30 km from Seiyun. Under cheIDA-assisted Agricultural Research & Extension (R&E) Project, the researchprogram has been reorganized with multidisciplinary research teams andextension-research coordinators (outreach). Research programs are designed bythe station's research council in collaboration with the extension service andare approved at regional level. Research efforts have mainly focussed onvariety screening and breeding work for wheat, sorghum, onions, tomatoes,potatoes and cowpeas; weed control, mainly in wheat, potatoes and onions;investigations into the economics of land preparation; and agronomy of wheat,onions and potatoes. The station also produces basic seeds, mainly of wheatand onions. Research priorities which need to be introduced urgently are:irrigation agronomy, farm mechanization and fruit crop production. On-farmverification trials of different kinds are being run in collaboration with thefield extension service.

3.21 Agricultural Extension. The present extension unit at Seiyunconsists of one head, two deputy heads (one for extension and the other forcommunication and training), three subject-matter specialists, twenty fieldextension agents/technical assistants (FEA/TA), of whcm 16 operate in thegeneral project area and two are supervisory posts (currently vacant). EachFEA and TA is attached to & specific cooperative and covers about 340farmers. A T&V system is being develuped for extension operations and,although its implementation and R&E outreach need further strengthening,particularly through provision of Subject Matter Specialists (SMSs) inspecific enterprises, field extension work is having a positive impact.Vehicles and equipment pro'iided under WIiAP II are contributing significantlyto this development. Both research and extension operations for the newdevelopment areas would be enhanced under the proposed project.

3.22 The Machinery Rental Service in Wadi Hadramawt employs 339 personnel,including 145 tractor drivers, and operates 35 bulldozers and 90, wheeltractors, of which some 18 are under control of the individual cooperatives.The wheel tractors are up to 16 years old and reportedly function 1800hours/year. Land preparation in the project area is protracted hecause oflimited tractor capacity and poor scheduling of operations. This is now beingremedied under WHAP II by purchasing tractors and assigning farm equipmentdirectly to APUs, improving cultivation techniques, e.g., using some largertractors and more shallow tillage, extending cropping patterns, and arrangingbetter coordination by cooperatives. Sixty-seven tractors ond equipment havebeen imported under WHAP II, thereby creating the basis for decentralized farmmechanization (para. 2.18).

3.23 The PCAS branch in Seiyun was opened in 1983. Present storagecapacity is only 100 tons and a new structure is beir.g built. However, thedelays encountered in transporting inputs directly from Aden to thecooperatives immediately prior to the cultivEtion season would best beovercome by decentralizing storage to the cooperatives (para. 5.13). PCMFVhas a 500-ton cold storage facility at Seiyun which, properly organized, canprovide adequate facilities for storing perishables in the area for theforeseeable future (para. 6.12). DAW. There is a livestock department andveterinary center located at Seiyun and four veterinary sections in theproject area. However, eespite being adequately staffed, livestock servicesare restricted by lack of budget resources for equipment and drugs. A sheepand goat development project, which is being funded by the UNCDF and UNDP,

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will help to rectify this situation by piloting sheep and goat development,related research, extension training, animal health and nutrition in WadiHadramawt.

IV. THE PROJECT

A. Project

4.01 The Third Development Plan focusses on expanding production andimproving food self-sufficiency through better utilization of scarce na;uralresources. In this context, Wadi Hadramawt, which has good soils base andsignificant untapped water, can make a major cnntribution. Tha existingcropping intensity of 50X, in the traditional areas dependent on the shallowaquifer, can only be improved through access to the more reliable and goodquality water from the deep, sandstone aquifer. Furthermore, these farmersrisk salinizing soils and depressing crop yields by continued utilization ofwater from the shallow aquifer.

4.02 The proposed project would, therefore, provide a vehicle fordeveloping and expanding production on some 3,025 ha of traditionallyirrigated lands and for consolidating development on 3,225 ha included inWHAP II. In addition, it would support adjustments in agriculture policiesand strategies which would further enhance sustainable development in WadiHadramawt.

4.03 The approach to the new irrigation development would be based on thetraditional experience of APUs centered on sharing of water wells. However,in order to inteasify land use, the project would follow the innovative designwhich has been successfully .mplemented under WHAP II, and which involves the

; drilling of one tubewell with 50 1/sec (50 ha) capacity and the associatedconstructior, of a canal or pipe distributio. network. Thus, APUs ofapproximately 50 ha would UR developed to form the organizational unit withinthe cooperative Doth for water management and farm machinery operations. Theirrigation layout would be designed to divide a farm unit into two equalareas, each to be farmed by an Agricultural Production Group (APG). Theagricultural research and extension operations, already in place, would bestrengthened and expanded to develop and transfer farm level technology neededto achieve the project's agricultural production objectives. Details ofrevised regulations contained in the final legislative proposals pertaining tothe long-term use or ownership of land and trees by farmers in the projectarea and the associated formal certification (para. 2.12) were scrutinized atnegotiations and found satisfactory; ,he certificates are expected to bedistributed to farmers by January 1990.

B. Project Objectives

4.04 Project Objectives. The main objectives of the project would be toconsolidate and expand developments in Wadi Hadramawt so as to ensuresustainable agricultural production and to improve the income and livingstandards of project beneficiaries, while paying attention to conserving theenvironment. This would be achieved through: (a) consolidating developmentsin the Phase II areas; (b) providing dependable irrigation water suppliesthrough tube-ll development to about 3,025 ha in 17 additional areas whichare mostly contiguous with areas developed under Phase II; (c) improving works

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for spate irrigation for 2,700 ha; (d) providing incremental inputs requiredto raise the level of crop production in the total project area (6,250 ha) to1301; (e) expanding agricultural research and extension services; (f) estab-lishing an Irrigation Maintenance Unit (IMU) in Wadi Hadramaw*; and (g) provid-ing training and technical assistance personnel for developing irrigationsystems and for improving agricultural productivity.

4.05 Simmary Description of Proiect Components. lhe project would includethe following components:

(a) developing groundwater irrigation on about 3,025 ha throughconstruction of deep wells, development of irrigation networks andon-farm works, including land levelling;

(b) rehabilitating traditional spaLe irrigation works and provision offlood protection works;

(c) expanding and consolidating agricultural production oni about 6,250 hathrough supply of farm machinery, provision of improved inputs,development of seed production, support for expanding orchard andhoney production, and strengthening of research and extensionservices;

(d) providing engineering and administrative support by maintaining andstrengthening the existing Project Management Unit (PMU) andproviding technical assistance and training; and

(e) establishing and equipping an Irrigation Maintenance Unit (IMU).

C. Detaied Project Features

Irrigation Development (Base Cost US$18.85 million)

4.06 Design Aspects. Seventeen new development areas have been selectedon the basis of availability of suitable soils, proximity to potentialtubewell sites and electric power lines, and for the interest of loc 1 farmersfor participating in project developments. The basic design unit would be the50 ha APU as successfully tested under WHAP II. The proposed project woulddiffer from the Phase II project appraisal design in five main respects:(a) the design cropping intensity would be increased to about 130% instead oE93X; (b) the provision of a pipe distribution system with no land levellinginstead of an open canal system in areas subject to flooding (450 ha); (c) thereduction in the size of irrigation basins; (d) the provision of a moreappropriate tractor and set of implements for each APU; and (e) theimplementation of an IMU. These modifications aim at containing projectcosts, ensurinig long-term sustainability of irrigation infrastructure,inducing greater autonomy of agricultural operations, and raising farmprofitability in the project area.

4.07 The calibrated mathematical model developed to evaluate groundwaterresources in the area confirmed the optimum number of tubewells to bedeveloped and indicated their location. The nominal design discharge oftubewells would be 50 1/sec, compared to the wells of 20 to 30 1/sec capacityinstalled prior to 1983. This has resulted from the experience in Phase II,where well yields were higher than expected, with the result that most new

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wells drilled and completed have an average discharge of 55 1/sec. Theincrease in design capacity is also supported on economic grounds. Tubewellswould be locate4 as near to the edge of the valley as possible, so as tominimize depth to the sandstone aquifer and to better ensure acceptable waterquality (EC < 2 mmhos/cm).

4.08 The design of the proposed new irrigation works has evolved from theexperience gained under Wadi Hadramawt II and is more economical than thedesign used for the WRAP I demonstration areas and the Soviet-Yemeni designfor state farms. Possibilities for achieving cost reduction in Phase IIdesigns have been considered and, in general, the use of alternativeirrigation methods, such as sprinkler or drip, are not feasible on a largescale at the current stage of development in the valley (although they mightprove the optimum solution on APUs where large volumes of soil would requireto be moved). Generally, a PVC conveyance pipeline would connect eachtubewell to the head of a 50 ha unit. A division box would share thedischarge equally between two subunits (APG) of 25 ha each, leading to anetwork of lined and unlined canals or pipelines. The design of irrigationnetworks would generally follow the criteria established for WHAP II.

4.09 Irrigation Water Supply (Base Cost US$7.24 million). To provideirrigation wrter supply, the project would install 59 new tubewells as shownby area in Annex 2, Table 1. This includes replacing 14 dilapidated boreholesby 7 fully equipped units, for which three have already established adequatedistribution structures. The new tubewells would have an average depth of170 m (range 155 m to 205 m). Boreholes of up to 17-3/8 inches would bedrilled using drilling method approved by the project consultants. As thesandstone aquifer has good water quality, mild steel casing and scieen wouldbe installed; this would also facilitate maintenance. A graded gravel packwould be placed around screens and the boreholes would be equipped withsubmerged vertical electropumping units suitable for continuous operation andranging in size from 30 kw to 45 kw, a total of 66 units, including standbysets (Annex 2, Table 2). Power supply to tubewells would be provided by PCEPthrough a total of 31 km of 11 kv cables, tapping on to the high voltage linesalready existing in the area. Each well would also have a pumphouse.

4.10 The design and construction of tubewells and the technicalspecifications for pumpsets, including testing and installation, would begenerally consistent with the standards established under WHAP II. Theseworks would be carried out by competent design consultants and engineeringcontractors (para. 4.37).

4.11 Irrigation Networks (Base Lost US$7.39 million). Provision would bemade for the construction of some 65 km of conveyance pipelines, 59 km oflined and 116 km of unlined canals, 22 km of pipe distributior networks and(3,525 No.) associated structures. These quantities have been assessed fromthe 1:10,000 scale semi-detailed designs prepared by the WHAP II study teams.The lined canals would be built by forming a compacted embankment from whichthe channel shape would be cut. The design and construction standards forirrigation works would generally follow the criteria and specificationsestablished for WHAP II. Exceptions to this would be: (a) the designs ofstructures would be specifically reviewed by the engineering consultants todetermine the validity for replacing open canals by pipe networks, so as toeconomize on costs wherever possible; and (b) the technical specificationswould be more flexible, so as to ailow potential contractors to tender for

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both lined canals or equivalent capacity buried pipes, and also for linedcanals to be made from 2 m or 3 m wide compacted embankments.

4.12 On-farm Improvements (Base Cost US$3.00 million). The project wouldfinance 2,125 ha of land improvement works, comprising: land levelling,rearrangement of field sizes to permit efficient mechanization, at the sametime as economizing on earth movement and increasing irrigation efficiency.To improve water management and irrigation scheduling, a small number ofneutron probes and, on a trial basis, infrared thermometers, would beprovided. These instruments would be used by the extension service in.armers' fields to continually monitor soil moisture content during thegrowing seasons. Training and back-up service would be provided by equipmentsuppliers and through collaboration with ICAADA's Farm Resource ManagementProgram. In addition, the project would provide for construction of 60 farmsheds and 24 km of gravel-surfaced farm roads which would connect most of theproject locations with the Al Qat'n - Tarim road. The latter would facilitatemovement of inputs and produce, and O&M activities.

4.13 Other Works (Base Costs US$0.31 million). The project would finance16 km of flood bunds to protect a limited number of project areas from spateflows in the main Wadi. Design and construction of these works would beconsistent with existing criteria and specifications of MAAR, which aresatisfactory to IDA.

4.14 Spate Improvement Works (Base Cost US$0.91 million). This componentwould aim at keeping operational, at a minimum cost, an irrigation techniquethat has the advantage of providing additional water for crops, recharging theaquifer and stabilizing the beds of the wadis. Some of the sills and weirsdamaged by floodls in 1982 have been rehabilitated under WHAP II. Preparationstudies have covered the rehabilitation requirements of some 26 additionalstructures in the tributary wadis of Idim, Duan, Ain and Amd, together withtwo small flood protection works in the main valley near population centers.In view of the possilYlity that exact requirements of rehabilitation maychange during the project implementation, a flexible program approach would bemore suitable for this component.

4.15 Seven spate schemes are planned for rehabilitation to provideimproved irrigation for some 2,700 ha. Quantities of works, as shown inAnnex 2, Table 3, are based on experience under Phase II and model designsalready prepared in detail. All civil works designs and construction would bein accordance with existing criteria and specifications of MAAR for suchworks, which are satisfactory to IDA.

Agricultural Development (Base Cost of US$9.04 million)

4.16 Research and Extension (Base Cost US$1.28 million). Existingresearch and extension services would be ougmented under the project tosupport the increases in crcpping intensity, production and the expansion indevelopment area. For research, additional scientists would be recruited toinitiate trials on irrigation agronomy, farm mechanization and fruit cropproduction. For extension, additional SMSs would be recruited to evolveprograms for important aspects of production in the project area (irrigationagronomy, livestock production, date production, women's extension, and farmmechanization). Six additional FEAs would be recruited to serve the newdevelopment areas. Some 120 man-months (mm) of training would be provided for

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R&E personnel, half being overseas. Staff mobility and effectiveness for thetwo services would be improved through the provision of 5 4-WD vehicles orpickups and 20 motorcycles. Office furniture and equipment would be providedfor research and field extension activities, as well as expendable researchmaterials and scientific publications. Special provision would be made forexpanding research in potato seed and for production of onion seed for projectfarmers.

4.17 Rehabilitation of the date palms, covering approximately 275 ha,would be an integral part of the field extension service, especially in Seiyunarea. This would involve demonstrating technology for the removal ofnonproductive suckers from palms, the thinning and rearrangement of palm treesin rows, varietal improvement for new plantings and improved irrigation andfertilization. Farmers' reception to date rehabilitation during WHAP II hasbeen slow; but, now that the ownership issue is resolved, interest is expectedto be revived and the project would provide extension advice, inputs andequipment, like ladders and hand tools, for date producers.

4.18 Tree Nursery (Base Cost US$0.55 million). The Project would expandthe promotion of fruit orchards commenced under WHAP II. In particular, itwould provide for the further development of a fruit tree and date palmnursery to be established under WHAP II at Shuhuh some 4 km west of Seiyun.It is expected that the WHAP II staff would commence operations of plantinglocal rootstock for subsequent grafting of local budwood stock (andpossibility of further improvement from imported resistant rootstock infuture). Seedlings of Zizyphus spina-christi, a xerophytic shrub which is thesource for the nectar for the famous honey produced in Wadi Hadramawt, wouldalso be propagated. Annual sales from the nursery would expand to 15,000grafted seedlings in the second year of project iwplementation (PY2), whichwould be sufficient for 60 ha of orchard, plus 10,000 Zizyphus seedlings.

4.19 The project would provide a replacement lorry, a station wagon, 2motorcycles, a standby electric pump of 12-15 hp size, and shading material.A technical assistant horticulturalist, to be recruited for 18 months, wouldhave special experience in nursery management. Recurrent Losts would ir ludestaff salaries (one graduate staff, one technician and 4 pump operators/labor,each for six years) and consumable supplies.

4.20 Agricultural Machinery' and Machinery Rental Service (Base CostsUS$5.00 million). Farm mechanization under the project would cover allaspects of crop production, including primary tillage, precision operationsfor planting or sowing, fertilizing and spraying, and threshing and winnowing,potato lifting, forage cutt.ng, and haulage. Agricultural machinery would beprovided for project farmers to improve farming efficiency to about 1302cropping intensity. Investments would include 60 medium power (65 hp)tractors and 4 of larger capacity (92 hp) for heavier land work. Theagricultural machinery and equipment proposed for the project areas arepresented in Annex 3, Table 1. Specific organization and operationarrangements would apply to all farm machinery (para. 5.15).

4.21 MRS would play an important role in modernizing cultivation practicesin the project area to intensive mechanization systems. MRS activities wouldhe adjusted from provision of cultivation services to provision, throughcooperatives, of back-up assistance for training and machinery maintenance andrepairs. In order to support this transition, project financing would be

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provided to MRS for modernizing and stresmlining its servicing and storagefacilities and for establishing a mobile workshop unit. At negotiations,terms of reference were discussed and assurances were obtained from Governmentthat review and reorganization of MRS would be implemented by June 30, 1990,after consultation with IDA [para. 7.02(c)].

4.22 Input Supboly (Base Cost US$ 2.21 million). The Project would providethe incremental production inputs required for expanding the development areaand increasing cropping intensities in Wadi Hadramawt. Supply of inputs wouldbe made for the project years 3 to 5. It would also provide the estimatedincremental requirements of inputs for increasing cropping intensities inWRAP II areas. Estimated quantities are summarized in Annex 3, Table 2.

4.23 The arrangements agreed upon under Phase II whereby farmers would becharged an interest rate of 7-1/2% per annum on all inputs to be madeavailable on credit under the project have not functioned in practice.Farmers' reluctance has led the concerned cooperatives to refuse to payinterest at this level and, therefore, no inputs have been procured throughthe project. In late 1988, Ministries of Planning and Finance and MAARfinally agreed to charge interest on credit supplied to Wadi Hadramawt farmersat 5-1/21 per annum. Although lower than originally agreed, in the light ofcurrent inflation rates (estimated 21 per annum), this rate is positive inreal terms and is consistent with the prevailing interest rate in thecountry. Furthermore, NBY reports that there is no default on loans paidthrough the project cooperatives, and NBY's administrative costs are fullycovered by 2-1/2% equivalent interest charge. The project would provide nodirect assistance for credit. However, at negotiations, assurances wereobtained from Government that interest rates for agricultural credit will bereviewed, by December 1, annually to ensure that they continue to be positivein real terms [para. 7.02(d)].

Project Management (Base Cost US$3.91 million)

4.24 Project Management Unit (US$1.09 million). The existing PMU isefficiently implementing WHAP II and there is no need to change its structureor organization (Chart 1, pages 1-2). Project costs would provide for thecontinuation of the PMU throughout the project implementation period, relatedoffice management and O&M of vehicles for performing various projectimplementation functions. The project would also finance procurement of four4-WD station wagons, two 4-WD double cabin pickups, six motor cycles and someitems of office equipment.

4.25 Technical Assistance and Training (US$2.82 million). The followingtechnical assistance would be provided to the PM¶U: one irrigation engineer toassist PM in coordination of civil works construction, the evolution ofprocedures for O&M and cost recovery and for procurement of goods, plus oneirrigation agronomist and one horticulturalist to assist in evolvingappropriate technological packages for intensifying agricultural productionand in developing sustainable research/extension and training procedures.Specialist technical consultancies would include farm machinery, monitoringand evaluation, integrated pest management, animal production and agriculturaleconomics. A total of 156 man-months of short-term overseas/local trainingwould be included for the project staff and project-related studies. Inaddition, and following the practice adhered to for WHAP II, the project wouldfinance consulting engineers' services for the final planning, and design andthe construction supervision of tubewells, irrigation networks and on-farmdevelopment works.

3 1 67CZ0 5 30 8 9

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ITigation Maintenance ULit (Base Cost US$2.37 million)

4.26 The project would help establish an Irrigation Maintenance Unit(IMU)at Seiyun within PMU for coordinating and supervising the O&M of bothtraditional spate and modern irrigation systems. It would be a functionalunit responsible for planning, monitoring and budgeting and for advisingfarmers/cooperatives on normal maintenance. In addition, it would executespecial or emergency repairs. The IMU would arrange execution of earthworksin collabora.ion with MRS, and other works through force account with farmers'participation and, ideally, for the long term, with 1,cal contractors.

4.27 The project would finance a complete range of earthmoving equipment,vehicles, instruments and office equipment, as well as necessary materials,equipment, 24 man-months of overseas train4ng and minimum necessarymaintenance equipment. A list of maintenance equipment and vehicles to bepurchased under the project for the IMU is given in Annex 3, Table 3. Inaddition, financing would be provided (PY2 through PY6) for a complete team ofpersonnel for establishing IMU, including surveyors, engineers andadministrators, as well as support staff. The IMU would be financed frommaintenance charges supplemented by the fiscal budget.

D. Other Features of the Project

4.28 Status of Project Preparation. Existing studies consisted of:(a) semi-detailed designs at 1:10,000 scale of the project groundwaterdevelopment areas; (b) preparation of detailed bills of quantities for each ofthe 17 new development areas; (c) detailed design of spate rehabilitationworks commanding some 2,700 ha and identification of some 20 other sites; and(d) review and updating of cost estimates for civil works. In order to ensurea rapid take-off, timely preparatory work and early implementation, MAARintends to extend the services of the existing irrigation engineering advisor,while the preparation of final tender designs should be arranged throughconsulting engineers. Government intends to finance these start-up activitiesthrough credit funds for studies remaining under WHAP II. Tender documentsestablished under WHAP II for tubewell drilling, pump units and other civilworks have been modified by PMU to obtain proposals and to enable award ofcontracts during PYI (para. 5.12).

4.29 The draft tender documents were approved at negotiations for both thedesign engineering consultants and for the contractors. Similarly, terms ofreference for technical assistance personnel and project studies were reviewedand agreed upon at negotiations (para. 4.37).

4.30 Environmental Impact. Proposed project developments would have nodirect or indirect detrimental effect on known archaeological or historicalsites. The site of Shibam town, a UNESCO-designated World Heritage Site, issituated five miles from the closest area of project activity. The irrigationflood bunds and spate irrigation structures would have a conservation eflectby reducing erosion, controlling floods and helping to recharge the aquifers.The incidence of saline water being pumped from some shallow wells would bereversed by replacing these facilities by deep wells from the 200 m aquiferwhich provides good quality water. In addition, the existing water monitoringunit (WMU) in PMU would be enlarged to ensure thorough quantitative andqualitative measurements on groundwater abstraction and recharge and spateflows. The new development would involve 2,125 ha of land leveling which,together with precise technical messages by the extension service, would help

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to prevent over-irrigation and avoid any salinity hazard. As all waterresources in the project area involve seasonal spate Lioods or groundwater,the incidence of schistosomiasis or other water borne ailments isinsignificant. Furthermore, the design and operation of irrigation system(axiuum 21 hours a day) would prevent vector habitat for schistosomiasis.

4.31 The Seiyun Research Station would provide improved technologypackages for crop production which would limit the application levels ofinorganic chemicals, combined with organic manure and compost. Followingexisting practice, technical packages to be transferred to farmers byextension agents would emphasize appropriate application rates for allfertilizers, pesticides or other chemicals. Furthermore, project investmentswould provide for the construction of store sheds on all APUs, which wouldenable the secure storage of all agricultural chemicals. The development ofmore diversified cropping rotations would serve to improve soil structure andprevent build-up of disease and pests, while encouraging improvements innutrient levels. Project actions would lead to improvements in human healthand nutrition as a result of better quality drinking water and improved dietsinvolving more diverse crops and a more continuous supply throughout the year,particularly for vegetables and fruits.

4.32 A list of admissible agricultural chemicals was approved atnegotiations and will be reviewed annually as part of the work program/budgetreview throughout project implementation, to ensure that only low toxicity andadequately degradable chemicals are applied. A short-term consultant would beemployed to deve,op a plan for crop protection research and to prepare for thegradual introduction of a strategy for integrated pest management. Inaddition, all agricultural chemicals proposed for procurement under theproject would be reviewed by IDA environmental staff.

4.33 On the negative side, with increased mechanization, there would beincreasing risk of injury from farm machinery. Safeguards against accidentswould be provided by the appointment of an SMS for farm mechanization andspecial training for personnei of FEAs and cooperatives. Hazards associatedwith pesticides would also be avDided by ensuring that trained extensionworkers would supervise the spraving of insecticides and herbicides.

E. Cost Estimates

4.34 Total project costs are estimated at about US$41.8 million(YD 14.3 million), including US$2.7 million (YD 0.9 million) for physicalcontingencies and US$4.9 million (YD 1.7 million) for price contingencies.Goods and services procured under IDA-assisted projects in PDRY are exemptedfrom import taxes and duties. Total foreign exchange costs are estimated atUS$30.6 million (YD 10.5 million) or 73Z of total cost. The foreign exchangeestimate assumes that foreign contractors would win contracts for irrigationdevelopment works and for furnishing the associated equipment. The costestimates for civil works, equipment, vehicles and inputs are based on unitprices experienced under WHAP II or from recent contracts issued for similaritems in PDRY, and on quotations from suppliers, appropriately adjusted tomid-1989 baseline price levels. The costs for technical assistancespecialists, consultants services and local and overseas training are based onthe prevailing rates in the country. Physical contingencies have been allowedon the baseline costs, equivalent to 152 for spate and road developments, 102for irrigation works and 52 for all other expenditures excepting studies.Price contingencies are based orn increases in local costs of 3% per annum in

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PYI and 2, rising to 3.5S per annum thereafter, and in foreign exchange costsof 4.21 in PYI and 4.41 per annum thereafter. Cost estimates for the proposedproject are summarized in Table 4.1 and detailed in Annex 4, Tables 1 to 3.

Table 4.1: PROJECT COST SUMMARY BY COMPONENT

(VD '0001 WS$ 'Omt S total* * ----------- - --- --- -- - ---- --- --- -- -- -- X orion *Wss

Local F.etip Total Local Foe"s Total Eacha Cost$- - l:. :s:- ;.:.. zz- *...... a.......... :.:.: .... a .... sagas... :3

A. PIECT NAMMiENT A Aol NINISItIION 302.2 1 035.2 1 337. 3 U3.5 3.29.! 3,9110.3 7 11I. IKIGATION KVELOPNENT 1. 937. * 4. 197. A 6. 135. 4 5. M.5 12. 274.2 17.939. 1 a 52C. SPATE INNPONEET HOsS 101.4 203.1 312.5 311.5 593.9 113.1 65 30. IRSIATION fAINTENANCE UNIT 367.4 443.9 811.3 1.014.3 1.2U.0 2,372.3 55 7E. GRICULTRUAL O(VELOPNT 37. I 717.9 755.? 110.5 2. 9.2 2.20".7 I F. RESEARCN A DEVELOPMENT 247.2 5U. 9 435. 1 722. 8 552.3 1. 275. 1 43 4G. FRUIT TREE NURSERV 93.2 5. 15tU. 2 272. 6 277.7 550.3 50 2H. FAIN NCINERY 84. 6 . 607. 0 1 691. 6 247.3 4, 69. 4 946. 1 95 141 IPOS FACILITIES 5.0 14. 5 19. 5 14. ? 42.3 57.0 74 0

-- - - - - - - - - - - . . ... ... . . ... . . ... ... . . .

totla BASELINE COSTS 3.154.4 5.503.2 11,657.6 9.311.0 24,863.2 34. 174.2 73 100Physical Contingericies 273.3 634.4 907.7 799. i 1,55.0 2.654.1 70 5Pricg Conltgo soli 3719 91.315. 81,695 7 . 110. 3.847 4 4.958.2 74 t5

----- - ------- ------- ........ ... . . . . .. . . . . . . .

total PiO.ECT COSTS 3.837.5 10.453.5 14.291.0 11.220.9 30.565.7 41. 786.5 73 122- ==: . -:::: . .. :....

F. Financing Plan

4.35 Financing. An IDA credit of US$12.0 million equivalent(YD 4.1 million), on standard terms, would finance about 391 of the project'sforeign exchange, or 291 of total project costs. AFESD and KFAED wouldjointly finance the remainder of the foreign exchange costs, amounting toabout US$18.6 million (YD 6.3 million), and specific items of incrementallocal expenditures amounting to about US$1.8 million (YD 0.6 million). AtGovernment's request, these organizations are expected to complete their ownappraisal by September 1989. Table 4.2 summarizes the financing plan for theproject. Cofinancing would be by parallel arrangements and a detailed plan byagency as well as by component was finalized at negotiations. A conditionfor declaring credit effectiveness would be the signing of loan/creditagreements with cofinanciers for the project [para. 7.01(a)].

Table 4.2: PROJECT FINANCING PLAN

Percentage of ProjectLocal Foreign Total Project Costs F. Exch. Costs…_____--…(us$ M)…---------- ------------(-…)-----

Government 9.4 - 9.4 22 -IDA - 12.0 12.0 29 39KFAED 1.8 10.1 11.9 29 33AFESD - 8.5 8.5 20 28

Total FinancingPlan 11.2 30.6 41.8 100 100

3 . 6 'C _ i - 3: '.

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4.36 The Borrower of the IDA Credit would be PDRY which, through MAAR andDOI, will utilize the funds in accordance with the terms and conditions setforth in the Development Credit Agreement.

G. Procurement

4.37 Procurement for all items under the project, except farm inputs,would be carried out by the PMU through the DOI. Farm inputs would beprocured as part of PCAS's bulk purchase, in accordance with IDA guidelines.The required civil works for tubewell irrigation and spate development, aswell as some machinery, totalling US$19.3 million, would be financed by KFAEDand AFESD using international competitive bidding (ICB) and other procurementprocedures similar to those of IDA. Vehicles, machinery, equipment, and farminputs totalling US$8.5 million would be financed by IDA and procured throughICB procedures according to IDA guidelines. Local manufacturers would beallowed a 15Z preference margin, or the actual customs duty to nonexemptimporters, whichever is lower, on ICB goods contracts financed by IDA. Duringthe project implementation period, spare parts amounting to about US$1.6million (of which, IDA: US$1.0 million) would be required for repair andmaintenance of vehicles, machinery and equipment and would be procured fromthe original manufacturers by direct contracting. At negotiations, PDRYconfirmed that: (i) the agricultural specialists and overseas training(para. 4.25) to be financed by IDA (US$1.9 million) would be procured, as inthe ongoing project, probably through a contract with the FAO Trust Fund,satisfactory to IDA [para. 7.02(e)]; (ii) vehicles, machinery and equipmentwould be procured on a timely schedule and in accordance with IDA ProcurementGuidelines [para. 7.02(f)]; and (iii) consulting engineering services(para. 4.10) to be financed by the other donors, would be retained underterms, conditions and schedules satisfactory to IDA Lpara. 7.02(g)].

4.38 Minor items of equipment and materials (cement, pipes, etc.) forfield operations are not suited for ICB. These items, estimated to cost lessthan US$50,000 each contract, and amounting to not more than US$0.6 million,would be procured following prudent shopping procedures based on comparingprice quotations from at least three suppliers.

4.39 All bidding packages for goods estimated to cost the equivalent ofUS$100,000 or more would be subject to prior IDA review of procurementdocumentation, as would the final award of the related contracts. Thesearrangements would result in a coverage of about 85Z value of the contracts.The balance of contracts would be subject to random postreview by IDApersonnel during supervision missions.

4.40 During negotiations, assurances were obtained from Government on theoverall procurement procedures for the project, and agreements were reached onthe draft terms of reference for consulting engineers and technical assistancepersonnel, and on the draft bid documents for civil works, vehicles, machineryand equipment. The procurement arrangements to be followed for the project,including components to be financed by IDA, are summarized in Table 4.3.

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Table 4.3: SUbMARY OF PROPOSED PROCUREMENT ARRANGEMENTS

Not TotalProject Component ICBA' Otherk' Applicable.' Costs6'

------------- (US$ million) …Civil Works(i) Irrigation Developments 22.1 - - 22.1(ii) Spate Improvement Works 1.3 - 1.3

Vehicles, Machinery,Equipment, Spare Parts& Materials 7.3 2.2 - 9.5

(5.8) (1.6) - (7.4)

Inputs Supply 2.7 - - 2.7(2.7) (2.7)

Technical Assistance - 3.4 0.3 3.7Training and Studies (1.9) (1.9)

Recurrent Expenditures - 2.5 2.5

Total Expenditures 33.4 5.6 2.8 41.8(8.5) (3.5) (12.0)

a/ IDA financ-ng US$8.5 million through standard ICB procedures. Other itemswould be financed by KFAED and AFESD (jointly US$19.3 million) andGovernment (local cost portion equivalent to US$5.6 million), followingprocurement procedures equivalent to ICB.

b/ Includes foreign costs of spare parts (IDA: US$1.0 million), small itemsof equipment (IDA: US$0.6 million) and technical assistance personnel andoverseas training (IDA: US$1.9 million).

c/ Includes local training, salaries of local personnel and recurrent C&Mcosts.

d/ Brackets denote IDA financing.

4.41 The PDRY central procurement procedures have caused delays inimplementing ongoing IDA-financed projects. In order to avoid delays underthe proposed project, a detailed schedule of procurement for works, goods andservices has been prepared for the proposed project and IDA, MAAR and theCentral Coordination and Steering Committee (CCSC) (para. 5.06) would closelymonitor procurements. To aid this process, a MAAR administrator is beingassigned and would be trained by an IDA expert to take specific responsibilityfor ensuring that procurements from the IDA credit comply with the Guidelines.

H. Disbursements

4.42 Disbursement categories, credit amounts to be allocated and the shareof expenditures to be financed by IDA would be as summarized in Table 4.4:

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Table 4.4: DISBURSEMENT PROCEDURES

Amount ofthe Credit X of Expenditure

Category Allocated to be Financed(US$ M)

1. Vehicles, farm machinery,equipment, spare partsand materials 6.9 1002 of foreign expenditures

2. Farm inputs 2.6 100%

3. Technical assistance 1.8 100%personnel & overseastraining

4. Unallocated 0.7

Total IDA Financing 12.0

4.43 The proposed IDA credit has been estimated to be disbursed over sevenyears. This is shorter than the country historical sectoral average of eightyears but is in line with the achievements of and benefits from the experienceunder WHAP II and was confirmed at negotiations. Disbursements would be madeafter receipt of full documentation, except in the case of goods and servicesprovided under contracts of a value of less than US$100,000 equivalent forwhich disbursements would be made against Statements of Expenditures (SOEs)certified by MAAP. The latter would retain the supporting documentation andmake it available for inspection during IDA review missions and by externalauditors. The estimated schedule of disbursements is summarized in Table 4.5below (detailed in Annex 4, Table 4).

Table 4.5: ESTIMATED DISBURSEMENT SCHEDULE

IDA Fiscal YearDisbursements 1990 1991 1992 1993 1994 1995 1996

S ------------------------(us M)…--------------------

Annual - 0.4 2.1 2.5 4.2 1.8 1.0Cumulative - 0.4 2.5 5.0 9.2 11.0 12.0

4.44 Special Account. Provision has been made ror PDRY to open andmaintain a US$0.7 million Special Account for funding the items to be financedby IDA. The IDA financing would be channelled through NBY. Deposits into anidpayments out of the Special Account would be made on terms and conditionssatisfactory to IDA. While withdrawals from the proceeds of the proposedcredit may be handled through the Special Account, IDA would continue toaccept, in appropriate cases, withdrawal applications in amounts exceeding

3 ' 6 ' C t i I .. 9

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US$50,000 for direct payment and agreements to reimburse. A similar accounthas been efficiently operated under WHAP II and, at negotiations, assurancewas obtained from Government concerning the operation of the Special Account(para. 7.02(h)].

L Auditing and Accounts

4.45 All organizations involved in project implementation would be subjectto Government of PDRY expenditure control and auditing procedures, which areconsidered satisfactory. Project accounts would be maintained separately, andin a readily identifiable form, by the PMU, PCAS, R&E Department and theCooperatives. Project accounts will be consolidated by the PermanentSecretariat of the CCSC to reflect, in accordance with sound accountingpractices, the operations, resources and expenditures related to the project.The Central Board of Auditing (CBA)--an independent auditing agency--wouldcontinue to audit project accounts of concerned organizations on a timelybasis. The recent audit reports prepared by CBA with respect to the ongoingIDA-financed agricultural projects (Cr. 1145-YDR, 1346-YDR and i557-YAR) havebeen favorably received by IDA. At negotiations, assurances were obtainedfrom Government and MAAR on the above accounting and auditing procedures, andthat: (a) certified copies of the audited accounts of the project and SpecialAccount for each fiscal year audited, and of the auditors' report would befurnished to IDA not later than six months after the end of each fiscal year,and (b) the auditors' report would be of such scope and in such detail as IDAshall reasonably request, including, inter alia, a statement that the fundsadvanced by IDA for the Special Account and disbursed against SOEs had beenused for the purposes for which they were provided [para. 7.02(i)(ii)].

V. PROJECT ORGANIZATION AND IMPLEMENTATION

A. Project Management

5.01 General. The proposed project would be implemented through existinginstitutions, so as to profit from experience under past projects and tostrengthen their performance and collaborat'un and, thereby, to ensureefficient project execution. Following the arrangements for WHAP II, MAARwould have overall responsibility for project implementation through its DOI.The Ministries of Planning and Finance would participate in the scrutiny andapproval of the project's annual work programs and budgets. The existingnational staff of the Phase II PMU, as well as the office and housingfacilities, would be maintained. Government has confirmed that the existingcompetent PMU would continue under the proposed project, with fullresponsibility for planning, coordinating and supervising operations. The PMUwould be responsible for preparing annual work programs and budgets,coordinating all aspects of project implementat;an and monitoring progress.At n_gotiations, assurances were obtained that, after review and confirmationby the CCSC, a copy of the annual work program, budget and finance plan forthe project would be forwarded to IDA by November 15 of the preceding year forreview and comment (para. 7.02(i)(i)].

5.02 Continuing the practice of WHAP II, the PMU would be headed by anational Project Manager (PM) who would be responsible to the Deputy MinisterMAAR through the Director General, DOI. The selection of the PM and thetechnical assistance experts would be done in consultation with IDA; it isintended that the PM for WHAPII, who is fully satisfactory, will be retained

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in post. The PMU is organized in six sections: administration and finance;planning; design and construction supervision; agricultural development; M&E;and Water Monitoring Unit (WMU) for hydrological/hydrogeological monitoring(para. 5.23). The TA specialists would all be responsible to the PM.Proposed staffing for the PMU is shown in Annex 5, Table l. Terms ofreference for key posts in PMU were agreed upon at negotiations wherassurances were obtained from Government concerning the recruitment andmaintenance in posts of qualified personnel for the PMU [para. 7.02(j)].

5.03 The PMU would also be responsible for the preparation of technicalspecifications and contract documents for civil engineering works to beexecuted and for all items (except inputs) to be procured by the project. Thedesign consultai.ts would assist with the former as well as being responsiblefor advising on contractor pre-selection and bid adjudication, and forsupervision of the internationally-recruited contractors who would execute thetubewell drilling and construction of irrigation and on-farm development works.

5.04 Training and Extension in the project area would continue to beorganized under the T&V system, and the regional Office of Agriculture(Department of Extension) in Seiyun would be responsible for recruiting theadditional staff to be financed by the project from the University ortechnical college. The extension agents would work in coordination with theresearch staff in Seiyun and would be assigned between the four projectcooperatives. The R&E staff would place emphasis on the assembly andverification of production packages technologically better-suited to theirrigated developments, particularly for crop rotations, fertilization, watermanagement and plant protection. Particular emphasis would be placed ontraining farmers in the operation of improved irrigation systems, theefficient use of farm machinery, and the diversification and intensificationof crop production. This would include 3pecific provisions for training womenfarmers. At negotiations: (i) the detailed training program tor the projectwas agreed upon; and (ii) assurances were obtained regarding the provision ofregular training programs for project personnel and men and women farmers[para. 7.02(k)(i) and (ii)].

5.05 Inputs Supply. The Seiyun branch of PCAS would be responsible forthe supply of inputs, such as seed, fertilizers and chemicals, through theproject cooperatives. Other inputs, e.g. packing materials and spare partsfor pumps, would be procured directly by PMU or by the Research Station. Onreceiving annual orders from the cooperatives, the PMU would arrange for therequired inputs to be delivered directly to farm units or to the cooperativedepots. The PMU would ensure that equivalent amounts of inputs procured withproject funds are utilized by farmers in the project area (para. 5.13).

5.06 The Central Coordinating and Steering Committee (CCSC), establishedfor the implementation of WHAP II, would be maintained at c-ntral level forthe new project, under the chairmanship of the M,iiister of MAAR or hisdeputy. The membership consists of the Project Manager, Director ofAgriculture of Hadramawt Governorate, the Directors of the MAAR Departments ofIrrigation, Planning, Cooperatives and R&E and representatives from theMinistries of Planning and Finance and NBY. As necessary, other departmentheads--PCAS, PCMFV, HTC, PCEP--would be invited to attend the meetings. Thefunctions of the CCSC, effectively executed in WHAP II, include policy andprogram guidance, review and approval of annual work and financial plans andsupervision of procurement procedures, interagency coordination, review of

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progress, and financial control of the project. The Committee would meetquarterly and it would be served by its existing secretariat in MAAR.

5.07 The existing Local Advisory Comnittee (LAC) would be maintained withmembership including represenitatives of the Governor, the Party, theCooperatives and relevant departments of MAAR, the PCAS and the PCEP stationedin Seiyun. The committee would continue to advise PMU on priorities relatingto project developments, make recommendations on annual work programs andassist in periodic reviews of project progress. The PM acts as secretary tothe LAC.

5.08 In addition to their functions mentioned above, both CCSC and LACwould closely monitor and coordinate the progress of the procurement of civilworks, goods and services, so as to avoid delays which could adversely affectthe project's progress. An assurance has been obtained from MAAR that boththe CCSC and LAC would continue to function during the period of projectimplementation [para. 7.02(1)].

5.09 Fai-m machinery would be procured by PMU on behalf of the cooperativeswho would finance the purchase through credit agreements with NBY. Thisarrangement is already operating satisfactorily for irrigation pumps underWHAP II and is being applied to newly acquired tractors and implements. Atnegotiations, assurance was obtained from Government concerning the signing ofa supplementary credit agreement by December 31, 1989 between Government andNBY for investments in electric irrigation pumps, farm machinery and cropproduction inputs [para. 7.02(m)].

5.10 By agreement, cooperative managers would distribute a tractor andspecific implements to each APU. While tractors and frequent use implementswould be for the exclusive use of each APU, in the interest of economy andefficiency, certain implements, e.g. sprayers and grain threshers, would beshared between several neighboring APUs. Sharing arrangements would bespecified in agreements and would be supervised by the cooperatives. SomeAPUs have indicated preference to own their farm machinery, while others haveopted for a rental arrangement. In both cases, the cooperatives would makecharges on each APU sufficient to cover interest and reimbursement ofprinciple to NBY plus administrative charges. Detailed manuals for farmmachinery maintenance (para. 5.15) would specify the relative responsibilitiesof APUs, cooperatives and MRS. Log books would be provided for each APU; and,together with investment payments, charges for spares and maintenance workwould be paid by individual APUs through their cooperative (para. 6.18).

5.11 The cooperatives would strengthen their inputs supply and marketingservices to farmers and APUs uithin the project area. The project would notbe directly involved with credit since this function is already bein, carriedout satisfactorily between the cooperatives and NBY in the Wadi Hadramawtarea. The four project cooperatives have adequate financial reserves toprovide any incremental short-term credit required for financing inputs forproject farmers. With the adjustments in marketing arrangements, the centralrole of cooperatives for marketing produce is expected to decline. However,they would continue to purchase scheduled crops. Cooperatives' operatingcosts would continue to be met from the handling charges (5X) on inputs andproduce. In view of their important role in project implementation, it hasbeen agreed that MAAR will provide management training for key personnel inthe four project cooperatives as part of the PMU training program (para. 3.18).

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B. Project Implementation

5.12 Project implementation is planned for six years as shown in Chart 2.An early start to proposed groundwater based irrigation development workswould be ensured through the outline for tender designs agreed upon duringappraisal. It is anticipated that the early engagement of services forengineering consultants and for contractors (para.. 4.40) would enable welldrilling, pump installation and pump house constructions to be mostlycompleted by PY3. Flood protection works would be undertaken during PYs 3 and4, while land levelling and construction of the irrigation distributionnetworks would be completed in PY3. The schedule for construction ofgroundwater-based irrigation development works is shown in Annex 5, Table 2.The spate irrigation works would be implemented throughout the projectperiod. Most of the procurement of equipment and vehicles for project staffand for agricultural development components would be completed by PY4, whilemaintenance equipment and some vehicles for Engineering and Administration andthe IMU would be purchased in PY2.

5.13 In order to further encourage agricultural development in thePhase II areas, additional farm machinery would be provided in PY2 forincreasing the cropping intensity. Agriculture development in the new areasis planned to commence in Al Qat'n and Shibam cooperatives and move to Seiyltnand Tarim cooperatives. Consequently, machinery purchases would be phaseddelivering to farmers in Al Qat'n and Shibam in PY3 and, to farmers in Seiyunand Tarim cooperatives by PY4. The incremental crop production inputs ForPhase II areas would be uniformly spread over the 5-year project period,while, for the new project areas, they would be utilized during the last threeyears of the project. However, in view of the relatively small quantitiesinvolved (1,300 tons), procurement of inputs would be completed, through ?CAS,in PY3 and PDRY would ensure adequate allocation of foreign exchar.ge fundseach year (para. 2.12) so as to guarantee timely and sufficient supplies ofinputs to project farmers through their cooperatives (paras. 3.2, and 5.05)and in line with IDA qualitative guidelines. Assurances on these points wereobtained at negotiations [para. 7.02(n)].

5.14 Based on the estimated disbursement schedule (Annex 4, Table 4), thedate estimated for (i) physical completion is June 30, 1996, and (ii) creditclosing is June 30, 1997.

C. Operation and Maintenance

5.15 Each 50 ha farm unit would be operated independently and theAPUs/APGs would be responsible for organizing the operation and generalmaintenance of its own pump irrigation distribution systems and farm machinery(paras. 4.20 and 5.10). The forms of agreement, which are being issued tocooperatives and APUs and which specify ownership rights over irrigation pumpsand farm machinery, were scrutinized during negotiations and are acceptable toIDA. Technical advice for the operation of these equipments will be providedby the cooperatives, IMU and MRS. Major maintenance works, involving concreteor large volumes of earthworks requiring the use of civil engineeringequipment or specialist advice, will be planned and executed by the IMU incollaboration with MRS (or, eventually, private contractors). Government isacting to establish an IMU for Wadi Hadramawt, to be responsible formonitoring abstraction of groundwater and for planning and coordinatingroutine preventative maintenance and remedial repairs of irrigationi structures

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and pumps in collaboration with MRS. The establishment of IMU is a conditionfo. credit effectiveness [para. 7.01(b)).

5.16 In coordination with the cooperatives and MRS, PMU has preparedorganization guides and operation and maintenance manuals for on-farm works,irrigation pumps and farm machinery. These were agreed upon at negotiationsand formal statements specifying responsibilities of all APUs, cooperativesand MRS are being issued. Each cooperative will supervise machineryoperations by its APUs and basic maintenance will be done by designatedtractor operators in each APU in line with the manual. Schedules are beingestablished for routine preventive maintenance and remedial repairs which willbe coordinated by the cooperative and undertaken by MRS.

5.17 In areas benefiting from spate rehabilitation, the beneficiarycommunities would assume responsibility for routine O&M of the structures.The rehabilitation of flood damages and special repair works beyond thecapacity of the beneficiary communities would be planned and supervised by theIMU and funded by Government through the DOI. Beneficiary farmers wouldparticipate through labor contribution.

5.18 The PMU would be responsible for planning, coordinating andsupervising maintenance work on farm roads, tubewells, farm machinery,irrigation networks and spate irrigation works provided under the project andaccording to above arrangements, and shall provide, or cause to provide,sufficient funds, services and other resources to execute this work. Forthese purposes the vehicles and machinery of the IMU shall be replacedpromptly at the end of their economic life (para. 6.30).

D. Monitoring, Evaluation and Reporting

5.19 The PMU would have overall responsibility for M&E and for periodicreporting. Three types of monitoring would be followed: (a) project input,requiring M&E of activities such as civil works, procurement, staffing andimplementation of crop development programs; (b) project output, involving M&Eof increased production and project impact; and (c) M&E of hydrological/hydrogeological aspects, soil salinity and groundwater quality. All of thesefunctions would be performed by the existing Units within the PMU.

5.20 Input Monitoring would be done by the project M&E Unit, and wouldcover: (a) administration and finance unit for progress of financial andstaffing affairs; (b) engineering unit for progress with civil works andprocurement; and (c) agricultural unit regarding crop production programs.Technical assistance specialists and consulting engineers would assist in themonitoring programs and in the preparation of progress reports. For projectinput monitoring, the PMU would submit periodic reports using formatsestablished for WHAP II and indicating both financial and physical progresstoward annual plan targets.

5.21 Output Monitoring for agricultural developments would be measured inboth the Phase II and the new development areas. Monitored outputs wouldinclude: (a) farmers' adoption of R&E recommendations; (b) changes incropping intensities; (c) crop yields; and (d) net farm incomes. Inconjunction with the R&E staff, the M&E unit in the PMU would be responsiblefor this work. The PMU would report annually to the LAC and, through theDirectov of DOI,. to the CCSC and IDA on key indicators relating to projectimpact. These indicators, outlined at negotiations, will be implemented by

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MAAR Planning Department, in consultations with IDA, prior to projectinitiation.

5.22 Evaluation. Continuous management analysis would be done by PMU withassistance from technical assistance specialists and, for longer termagricultural development planning, in cooperation as necessary with the MAARPlanning Department. This evaluation function provides the key to continuedimproved performance under the project and the degree to which researchresults are used to make adjustmerts in the agricultural practices and the useof inputs. The CCSC would also .aluate the program periodically and specialstudies would be arranged through the annual work program, as required.

5.23 Water Resource Monitoring. The flood, rainfall and groundwatermonitoring systen. has been reorganized and substantially extended underPhase II. WMU/PMU (para. 5.02) would extend wadi gauge network to furtherimprove the knowledge of flood frequency and magnitude, longer-term rainfalland runoff. The results of this monitoring are essential for environmentalaspects, particularly for groundwater quality and soil salinity, as well asfor further improving estimates of water balance components. The groundwatermoritoring would be extended by further calibrating the existing model and thed, . collected would, in conjunction with the surface water observationpr,ram, form the basis for refining the long-term estimates of aquiferrecharge and storage. The measurements of groundwater levels would alsoprovide essential information for assessment of the efficiency of increasedgroundwater development. The record of observations would be included inperiodic project progress reports.

5.24 Reporting Requirements. Assurances were obtained at negotiationsthat: (a) PMU would be responsible for preparing and submitting to IDA:(i) quarterly progress reports on the project focused on key indicators andtelexed to IDA immediately after the end of the first three quarters; and(ii) annual reports for project developments in a format satisfactory to IDAnot later than three months after the end of the crop year (January); and(b) not later than six months after completion of the project, MAAR willfurnish to IDA a completion report on the execution and preliminary operationsof the project, the benefits derived and to be derived from it, theperformance of project management and IDA of their respective obligationsunder the proposed credit agreement, and the accomplishments of the purposesof the proposed credit [para. 7.02(i)(ii)].

VI. PROJECT BENEFITS, JUSTIFICATION AND RISKS

A. Agricultural Development

6.01 Future Cropping Patterns & Intensities. Cropping patterns for theproject have been established on the basis of the present farming practices inthe Wadi Hadramawt area and on the experience gained on the pilot farmsestablished under WHAP I, farmers' initial experience under WHAP II, andresults from verification trials by the Seiyun Research Center. The projectedcropping patterns are in line with the Government's long-term aim of reachingself-sufficiency in vegetable and fruit production and of sustaining minimumlevels of cereal production. These cropping patterns are centered on wateravailability, soil capability, farmers' choices, market limitations, laboravailability and the scope for more efficient mechanization of farmingoperations. On balance, these factors are expected to lead to a gradual shift

3 . s7Ir - s 3

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to higher return crops while maintaining significant areas in wheat, sorghumand other traditional staple crops. A ranking in financial terms of the cropsbest suited to growing conditions in Wadi Hadramawt, by return to land andwater resources, as calculated by the appraisal mission, is given in Table 6.1:

Table 6.1: NET CROP RETURNS AT FULL DEVELOPMENT (YD)

Per Ha Per m3 of Water

Sesame 208 0.016Sorghum 209 0.016Pulses 445 0.050Dates &' 910 0.060Alfalfa b' 2,350 0.065Wheat Local 735 0.077Wheat H.Y.V. 1,066 0.125Potatoes 1,253 0.131Tomatoes 2,735 0.173Onions 2,083 0.178Summer Vegetables 2,009 0.183Coriander 1,452 0.183Garlic 5,314 0.330

a/ Dates: irrigated from tubewell but generally outside arable area.b/ Alfalfa: 12 months production and 14 cuts.

6.02 Annual crop rotations would vary between farmers and APGs dependingupon their choice of enterprises and available family labor. An importantfactor in the selection of crops grown would be the intensive laborrequirements for high-return crops. In the traditional rotation, summersorghum immediately follows winter wheat. The growing of vegetables in thehot summer months of high water requirements would be restricted to the localdemand. Alfalfa and legumes would be maintained in the rotations both for thehigh financial returns and for their value for soil nitrogen fixation. Othertypes of forages, with lower water demand, would also be introduced under theproject, with a view to further improving productivity and encouraging waterconservation. Monoculture of the highest return crops would not be feasiblebecause of the need for a balanced rotation and restrictions on water andlabor supply and limited market demand.

6.03 In order to reflect existing variations in cropping patterns, theareas in the Al Qat'n and Shibam districts have been grouped separately fromthose in the Seiyun and Tarim districts when making projections fir projectbenefits (Project Working Papers). Within a given cropping pattern, variousproduction intensities are feasible. Since agricultural developm,ent inWHAP II has started to expand, farmers are readily adopting new' technologiesfor intensifying production. As with the agricultural insti.utions concerned,farmers are confident of achieving the 130% cropping intensity proposed underthe project, provided that: (a) standards of demonstration and extensionsupport are maintained; (b) installation, opo~ration and maintenance ofirrigation water supply is assured; and (c) inputs supplies are improved. For

: .b I C '

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the project area as a whole, the estimated 1989 projections of land usepatterns in the new development areas at project maturity (PY10) are given inTable 6.2. It is estimated that, without project developments, productionlevels would remain equivalenc to the present situation.

Table 6.2: PRESENT AND FUTTURE LAND USE

Without Proiect With Project(Present Situation) (Project Maturity-PY10)

(ha) X (ha) X

Wheat, H.Y.V. 290 10 1,118 37Wheat, local 336 11 262 9Sorghum (Summer) 278 9 878 29Sorghum (Winter) 21 1 0 0Alfalfa 109 4 190 6Sesame 14 0 98 3Garlic 20 1 60 2Onions 45 1 142 5Tomatoes 25 1 98 3Potatoes 24 1 202 7Summer Vegetables 28 1 120 4Coriander 19 0 82 3Pulses/legumes 0 0 180 6Fruits 0 0 150 5

Total Crop Area 1,209 40 3,580 119

Physical Area 2,025 - 3,025 -of which, Fallow 1,816 - 0 -

Cropping Ir.tensity " 1,318 44 3,920 130

Date Palms 275 - 275 -

a/ Including alfalfa and fruits twice and excluding dates.

6.04 Counting alfalfa and fruits twice, the cropping intensity in the newdevelopment areas is currently estimated at 44Z; and after full projectdevelopment, the crop intensity is expected to be about 130X. No reduction inthe area of dates is anticipated and approximately 150 ha of fruit orchardsare expected to be established under the project. For evaluation purposes,such areas are considered as replacement for the date palms that are senescingand beyond economic rehabilitation. The main changes in crop productionduring the period up to project maturity (PY10) include: (i) fallow orpresently unused land would be eliminated; (ii) winter sorghum would bereplaced by (the more profitable) winter wheat; (iii) pulses and legumes, bothof which would be valuable for raising the quality of nutrition and forbroadening the -ropping pattern, would be introduced; and (iv) potato andvegetable production would be increased suLbstantially within the capacities oflabor availability and market demands (para. 3.16).

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6.05 Crop Production. Preser.t crop yields are low and for some controlledcrops give no return for farmer's labor. Local wheat yields range from about1 to 1.3 tons/ha, high yielding variety wheat about 1.9 to 2.1 tons/ha, andsorghum about 1.0 ton/ha. Yield increases expected under the project arebased on levels actually being achieved by the better farmers in irrigatedareas, and on yields obtained in research verification trials. The project'simpact on crop production would result from a combination of actions,including: improvements in the quality and application of irrigation water,dependable supply, distribution and operation of appropriate farm machinery,reliable supply and more appropriate use of fertilizers, adoption of cropprotection techniques, better tillage practices, and crop rotations withhigher returns.

6.06 Comparison of crop yields and incremental production in the Projectarea, before project and at maturity (PY10), detailed in Project WorkingPapers, are summarized for the major crops in Table 6.3:

Table 6.3: PRESENT AND FUTURE CROP PRODUCTION

Without Project With Project(Present Situation) (Project Maturity-PY10) IncrementalYield Production Yield Production Production(t/ha) (tons) (t/ha) (tons) (tons)

Wheat, HYV 2.0 588 3.5 3,926 3,338Wheat, local 1.2 414 2.3 584 170Sorghum 1.1 332 2,1 1,854 1,522Alfalfa 50.0 5,482 86.0 15,480 9,998Sesame 0.6 7 1.2 86 79Tomatoes 13.2 332 21.0 2,058 1,726Onions 12.1 546 20.0 2,906 2,360Potatoes 12.8 300 22.0 4,356 4,056

In addition, there would be incremental production, from increasing croppingintensity from 110% to 130% in the Phase II areas, of about 1,180 tons ofwheat, 540 tons of sorghum, 2,900 tons of alfalfa, 35 tons of sesame, 780 tonsof onions, 600 tons of tomatoes and 1,380 tons of potatoes.

6.07 Date and Fruit Production. The present area of date palms (about275 ha) is expected to remain constant with the rehabilitation continuingunder the project. With rehabilitation, date production is expected toincrease from the present yield of about 8 kg per tree (1,040 kg per ha) toabout 30 kg per tree (3,900 kg per ha). Evidence from well managed orchardsindicates that production of 40 kg of dates per palm is readily achievable.The demand for establishing fruit orchards is very buoyant. In order to havesome return during the seven-year establishment period for the (fruit) trees,farmers would be encouraged to interplant with alfalfa, vegetables or otherhigh-value seasonal crops. This practice is already being successfully triedout under WHAP II.

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6.08 Livestock Production. Livestock production is one of the mostprofitable farming enterprises in the region and involves an importanteconomic integration between the nomad grazing of the range lands and thesettled farmers in the Wadi Hadramawt. The farmers purchase yearling goats orsheep from the nomads and, with their fodder, surplus coarse grain and somelocally available feed concentrates, fatten the animals for sale after 4-5months. In the existing free market situation, in the past decade, farmershave doubled forage production in response to demands for expanding livestocknumbers.

6.09 The increased fodder production and crop residues resulting from theProject, would enable further intensification of livestock production. Theestimated 1,060 farm families now engaged in livestock in the project areacould readily increase production by about 25Z. In evaluating increased cropproduction, sorghum stover is included at its feed value, while it is assumedthat the traditional value of wheat straw for brick making would bemaintained. Benefits from the increased livestock values or productivityresulting from the project have not been quantified.

B. Market Prospects and Prices

6.10 No major difficulties are foreseen in marketing the iriereasedproduction from the project. Most of these crops are currently imported, andsupply is the main constraint to increased consumption. The incrementalproduction of wheat, sesame and fruit and vegetables would find a ready marketin Wadi Hadramawt. Any increase in excess of local needs of potatoes andother less-perishable vegetable production could be marketed in the otherparts of the Governorate, especially Mukalla, or in Aden.

6.11 All crop production inputs are supplied by PCAS through cooperatives;and, for inorganic fertilizers and crop protection chemicals, farmers pay auniform national price (fixed since 1985) which, at current prices, includesnearly 1001 surcharge over actual costs delivered to Seiyun. Locally producedseeds are sold at cost and imported seeds (especially potatoes) are sold atsubsidized prices. Under its ongoing review of agricultural publiccorporations, Government is examining pricing procedures for inputs, andprices are likely to decrease during project implementation. Nonetheless, theprices used for project financial analyses are maintained at the currentlevels.

6.12 Except for seasonal price variations in vegetables, the Governmenthas maintained producer and consumer prices at the level established in 1982.However, the relaxation in marketing controls proposed by Government wouldallow for a larger role for the private sector, with prices relating to thefree market (para. 3.18). The bulk of the wheat and sorghum produced underthe project would be marketed through the Home Trade Corporation (HTC) atofficial prices. Up to 60% of fruit and vegetables produced would be marketedin the private sector, while the remaining 40% would be marketed at officialprices through PCMFV, which would reduce its retail operations tohigh-quality, modern outlets, as well as providing wholesale services toprivate retailers. On average, farmers now obtain prices up to 70X higher forvegetables in the open market than they receive when selling through theGovernment channels. Since there are no controls on fodder, the entireproduction not used to feed the farmer's own livestock would be sold in theopen market. As part of Government's marketing adjustments, it is agreed

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that, when space permits, private traders would be able to rent PCMFV's Seiyunstorage or transport facilities at rates to be agreed with IDA (para. 3.23).

6.13 Increased production of some perishable vegetables could depress thefree open market prices during normal peak production seasons. However, asproject farmers would have a dependable year-round supply of irrigation water,extension messages would be oriented to encouraging staggered plantings, withemphasis for vegetable production in the off-season periods, so as to takeadvantage of high market prices. Nonetheless, the project analysis hasassumed that crop prices would decline in response to increased suppliesduring the period to maturity (PY10) to a level equivalent to the projectedeconomic prices.

C. Subsidies, Farm Incomes and Cost Recovery

6.14 There is no coordinated policy for agricultural subsidies and taxesand, in some instances, Government is, unbeknowingly, subsidizing orovercharging. Agricultural extension services are provided free.Subsidization of electricity supply (30Z) and MRS soil cultivation (331)result fron inefficiencies in the supply services and levels of payments madeby farmers are in line with commercial rates experienced in similar situationsin other countries. Subsidies on submersible pumps (252) are intended as atemporary measure while farmers adopt the new technology; while those onimported potato seeds (50Z) were adopted to expand production and substitutefor imported potatoes. Overall, these subsidies are outweighed by theexcessive charges on inputs. In the context of ongoing sector work, IDA isassisting MAAR to define clearer strategies for deciding input/output prices,where necessary.

Farm Incomes

6.15 By helping to remove constraints on farm operation, projectdevelopments would enable a typical farm family to increase the intensity ofannual crop production from 2.5 ha (502) at present to 6.5 ha (130Z) atproject maturity (PY10). As a result, it is estimated that the gross value ofcrop production would increase to YD 10,600, giving a net income of YD 7,750after deduction of variable costs and a net profit of YD 5,455 per familyafter payments for servicing pump and machinery loans, maintenance andoperating costs, and for overhead charges covering depreciation (over 25years) and maintenance of irrigation earthworks. Table 6.4 provides acomparison of costs and returns for a typical farm with and without theproject.

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Table 6.4: PRESENT AND FUTURE FARM INCOME (YD)

Present ',tuation Project Maturity (PYIO)Withoutc Project With Project

Gross Value ofCrop Production 1,800 10,600

Variable Costs

Production Inputs 247 (261) 855 (30S)Machinery 123 (131) 598 (211)Irrigation 228 (241) 485 (17S)Hired Labor 209 (22S) 342 (121)Marketing 48 (5%) 285 (101)Cooperatives' Charges 95 (101) 285 (101)

Total Variable Costs 950 (100%) 2,850 (1001)

Net Margin 850 7,750

Less Capital Recovery

Irrigation Pumps - 700Farm Machinery - 1,170

Net Income 850 5,880

Less Taxes

Production Tax 60 -Land Betterment Tax - 425 a/

Net Family Income 790 5,455

Cropped Area (ha) 2.5 6.5Cropping Intensity (1) 50 130

a/ Sufficient to fully recover depreciation on irrigation earthworks pluscosts of IMU; at YD 85/ha.

6.16 The incremental net income would result from improved efficiency inresource utilization. Specifically: (a) land and water resources would bebetter utilized as a result of irrigation engineering works, better waterquality, improved irrigation techniques and precision crop cultivation;(b) production resources would be better utilized as a result of improvedsupply, timing and application of inputs; and (c) human resources would bebetter utilized as a result of training and extension services and reductionof heavy manual work. The implications of intensified crop production is thatfarmers would incur significantly highet investment and maintenance costs formachinery and irrigation works than in the past. However, the incremental

3 1 6IC38/5 3 L $ 9

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benefits would be sufficient to ensure full financing and 0&M of theinvestments at project maturity.

6.17 Cost Recovery. For traditional farming in Wadi Hadramawt, farmersfinanced diesel pumps through credit or from their own resources and landleveling was by rudimentary hand tools or by MRS machines (for cash). Until1989, Government charged 10S tax on the value of produce marketed throughcooperatives and public corporations. Effective collection rates variedbetween 50S and 751. No other form of taxes have been levied on farmers. Inpreparation for the introduction of land betterment tax, the production taxrate was decreased in January 1989 to 5S on the value of produce sold.Government's policy is to recover project investment and maintenance, chargesfrom the direct beneficiaries. Farmers in WHAP II areas are already payingfor machinery costs directly. Because of the traditional and social attitudesto water rights, Government has decided that water users' charges would beunacceptable. Furthermore, in view of the current stage of development in theproject area, it was decided that, at this point in time, the installation ofwater meters for each APU would be impracticable. Recovery of depreciationand maintenance costs for irrigation earthworks will, therefore, be madethrough land betterment tax, for which draft legislation has been finalizedand enactment is expected by January 1990.

6.18 Under WHAP II, agreements for the purchase, maintenance and operationof irrigation pumps and a tractor/implements machinery "package" include:(a) provision of credit by NBY through cooperatives for individual APUs, withrepayment period of seven years. Agreements stipulate that, on completion ofcredit payments, APUs will receive title deeds on these items;(b) undertaking of: (i) routine maintenance by nominated and trainedoperator(s) in each APU; and (ii) periodic overhauls and remedial repairs bycooperatives/MRS, in accordance with manuals and work programs specified byPMU. Each APU pays through its cooperative for spare parts and servicesreceived; and (c) each APU pays directly for electricity and fuel consumed.Agreement was reached with Government at negotiations on the cost recoveryprocedures to be applied to APUs benefiting under the proposed project. Inview of the substantial pump and machinery charges being incurred by projectfarmers, Government intends to introduce land betterment tax in phases, withan initial annual charge of YD 10.5/feddan (US$73.5/ha) being applied twoyears after the development of each APU. This level of payment is estimatedto be sufficient to fully cover IMU costs plus approximately 102 ofdepreciation costs for irrigation earthworks (over 25 years), while a taxlevel of YD 36/feddan (US$250/ha) p.a. would be necessary to cover the costsfully. At negotiations, Government indicated its intention to reach thislevel of payment through phased increases up to project maturity (PYIO). Theindicative Government cash flow for the project (Sources and Applications ofFunds) is shown in Annex 6, Table 1.

D. Benefits and Justification

6.19 Anticipated Overall Effects. The sustainable higher crop returnsunder the project would lead to improved standards of living for farmfamilies. The major benefits would derive from the increase in production ofcereals and other field crops, vegetables, and fruits, which would substitutefor imports of these commodities, and of fodder which would contribute toincreased meat production or cash income. As a result of import substitution,foreign exchange savings would amount to an estimated YD 2.2 million (US$6.5million) per annum at full development.

3 6 7 C I 4' 99

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6.20 New developments under the project would directly benefit about 620families including some 6,000 people, and it is estimated that their percapita on-farm incremental income from crop production would increase from thecurrent estimated level of YD 79 to about YD 550 per annum by year 10 in areasdeveloped wholly for groundwater irrigation. A further 6,000 people wouldbenefit from WHAP II areas.

6.21 Non-quantified additional benefits would accrue from rehabilitationof traditional spate irrigation works serving about 2,700 ha in tributary wadivalleys. Direct benefits would result from the improved reliability of flooddiversion, while significant indirect benefits would result from erosioncontrol and increased recharge of the aquifers. The wadi tributaries selectedfor spate improvement works are those where floods occur most frequently, thusassuring the greatest possible benefits for this component. These wadis alsohave a high density of date palms (about 1/4 of the area) which would continueto degenerate in the absence of rehabilitation works. An estimated 1,400 farmfamilies would benefit directly from the spate irrigation and flood protectionworks.

6.22 Other indirect benefits would include increased employment and morestable incomes. The population in Wadi Hadramawt in general would benefitfrom the availability of additional locally produced food and better waterquality. The strengthening of a number of the agricultural support servicesby the Project would brnefit all farmers of the Wadi Hadramawt. These,together with benefits to be derived from the establishment of the proposedIMU at the Governorate level, would be critically important for ensurirgsustainability of developments after the project and, particularly, thefunctioning of all irrigation works under both spate and tubewell irrigation.

6.23 Employment Effects. At maturity (PY10), the project would create anestimated incremental demand for 200 man-years of hired seasonal labor (mainlyfor planting and harvesting), particularly where farmers increase the area inintensive crops. However, these additional requirements are not expected torpsult in a labor shortage. Continued population growth (2.51 p.a.) in WadiHadramawt, together with emigres returning from work assignments abroad, areexpected to make up for any increased labor demands created by the project.Moreover, the mechanization to be provided under the project wouldsignificantly raise labor productivity.

6.24 Income Distribution. On average, the 1,200 families now farming inthe project area would have an average of 4.8 ha of newly developed land withassured year-round irrigation water supplies. Present farm incomes from cropreturns alone are quite low, somewhat better in the Al Qat'n and Shibamcooperative areas than in the Seiyun and Tarim areas.

6.25 Economic Evaluation and Justification. The principal direct benefitsat full project development would result from incremental crop production,covering mainly wheat, sorghum, vegetables, potatoes, fodder crops, fruits anddates. The only new crop production is expected to be from pulses and legumes.

6.26 The economic rate of return (ERR) has been calculated on the basis ofthe anticipated crop intensities and yields and farmers' costs of productionunder improved cultivation practices. The total cost of all project-relatedservices have been included. No quantified benefits have been estimated forthe provision of the training and research component, from aquifer recharge orfrom erosion and flood protection from improvements in spate controls. Theeconomic analysis is baseJ on the following assumptions:

3 S67C40 S 3 . 8 9

-41-

(a) all benefits and costs have been calculated in constant 1989values, adjusted to represent benefits or costs at farm level inthe project area, as appropriate. Benefits and costs, whereapplicable, have been adjusted for transfer payments such astaxes and subsidies;

(b) border prices of wheat and sorghum have been derived fromestablished commodity price data. Economic prices of tomatoesand other vegetables are based on financial prices in the openmarket weighted for seasonal and variety variations. Economicprices of fodder and sorghum stover have been based onseasonally adjusted feed values in the project area. Wheatstraw has been priced at its current value for brick manufacture;

(c) all imported i.iputs, such as, fertilizer, chemicals and fuelhave been valued at actual or estimated 1989 border prices.Family labor input was costed at the prevailing wage rate forwomen (YD I/day) and, in view of limited alternative sources ofemployment, at 50% of the going farm labor rates for men(YD 5/day). The going farm labor rates have been used for allhired labor;

(d) in view of their application to the entire Wadi Hadramawt area,it is assumed that only 50Z of the recurrent costs for the IMUand the tree nursery would be directly attributable to theproject;

(e) all incremental production and farm inputs utilization have beenphased in accordance with the anticipated buildup of the areascultivated and the projected yield increases. It has beenassumed that, for annual crops, benefits would be lagged by oneyear and that the full anticipated yield levels would beattained by PYlO; and

(f) a project life has been assumed at 25 years and costs have beenincluded for the replacement of investment items at the end oftheir economic life. The without-project situation wasconsidered to be equivalent to the static present situation,although the continued use of saline water from the shallowaquifer would, inevitably, depress crop production.

6.27 Using these criteria and the data shown in Annex 6, Table 2, thebasic ERR for the consolidated project as described in Chapter 4, includingestimated incremental income from the Phase II, where cropping intensity isassumed to rise to 110% through currert operations, and the new developmentareas set against actual costs incur:ed during WHAP II plus estimatedincremental costs for WHAP III, is i3.1%. When the two phases aredisaggregated, the estimated ERR varies as follows:

(a) Base Calculation: Overall Cropping intensity 1302,Total Phase II actual total costs Phase IIplus Total and total costs 13.1%Phase III under Phase III.

-42-

(b) Phase II Alone Cropping intensity increasingto 1101 and actual total costs. 6.61

(c) Phase III alone Overall cropping intensity 130Sand total incremental costs 18.61under Phase III.

6.28 Sensitivity. Analysis for deviations from the base calculation(consolidated Phase II plus Phase III value estimate) shows the followingvariations in ERR:

Benefits down 201 10.01Costs up 201 10.51Benefits lag 2 years 10.31

Switching Values (at 101 opportunitv cost of capital):

- Costs must increase by 21%.- Benefits must decrease by 201.

These analyses indicate that the project is mildly sensitive to variations inbenefits. For example, achieving overall cropping intensity of 1101, asanticipated from the ongoing project, instead of 1301, would be equivalent toa 0% decline in benefits, while a 401 reduction in the wheat straw price,approximating to fodder value, would be equivalent to a 10% decline inbenefits.

E. Project Risks

6.29 As cost estimates are largely based on actual experiences duringWHAP II, the possibility of a cost overrun i.s minimal. Also, due to theprocedures being established for more rapid procurement, it is unlikely thatthe project implementation would experience time overruns. An importantfactor which supports the production targets and implementation schedule andreduces the risk of time overrun is the existence of a proven PMU alreadystaffed with qualified personnel and having extensive experience ofconstruction and agricultural development under WHAP II. Government's currentactions to establish farmers' rights, including provision of long-term leasesand machinery ownership, greater freedom of choice, and introduction of O&Mcharges, should serve to minimize risks and help ensure sustainabledevelopment.

6.30 There are three main risks to the project: (i) possible exceptionalflood damage to investments would be countered through design emphasis onflood bunds and maximum feasible use of underground pipelines (para. 2.30);(ii) non-implementation of policy changes relating to tenancy and liberalizedcrop production; based on legislative changes already underway and discussionsand assurance at negotiations, this is not a high risk; and (iii) shortfall inprojected crop intensities and yields; this is unlikely in view of: 130%cropping intensities are already being exceeded in verification trials, theenthusiastic participation by WRAP II participants, and the conservativetargets adopted for crop yields. The weakest link in the implementation ofthe Project is likely to be the provision of adequate recurrent funds toensure the sustainability of support services to farmers, including O&Mservices and the ready availability of production inputs at required levels.However, for past IDA agriculture projects, Government has fully met its local

3 1 6 7 C 4 2 ' 5 31 8 9

-43-

funds obligations for recurrent costs and future oil revenues are likely toenable Government to substantiate its assurances on provision of foreignexchange for recurrent expenditures (para. 5.18). Furthermore, the policy forcost recovery being adopted by Government would ensure a high level ofautonomy and sustainability for the developments in Wadi Hadramawt.

Vll. CONDITIONS TO BE MET, ASSURANCES OBTAINED AND RECOMMENDATION

A. Conditions

7.01 Prior to credit effectiveness, the following would be required:

(a) Signing of formal loan/credit agreements for the project withother cofinancing organizations (para. 4.35).

(b) Establishing an Irrigation Maintenance Unit (IMU) under PMU,with responsibility for monitoring abstraction and utilizationof groundwater and planning and coordinating the routinepreventative maintenance and remedial repairs of irrigationstructures and pumps, in collaboration with the Machinery RentalService (MRS), throughout the project area (para. 5.15).

B. Assurances

7.02 Assurances were obtained from the Government of PDRY at creditnegotiations to the effect that it would:

(a) annually monitor trends in the long-term debt to equity ratiosand total liabilities of the four cooperatives in the projectarea, so as to ensure their continued viability (para. 2.15).

(b) ensure that electricity generating capacity of PCEP will beprovided at sufficient level to enable project operations to bemaintained (para. 3.10).

(c) undertake and complete a review of operations of MachineryRental Service (MRS) in Seiyun to adjust its land cultivationoperations, expand its servicing capacity and develop acollaboratory role with the new Irrigation Maintenance Unit(IMU), and to implement changes, after consultation with IDA, byJune 30, 1990 (paras. 4.21 and 4.26).

(d) review annually, by December 1, the level of interest ratescharged by NBY to farmers, to ensure that they continue to bepositive in real terms (para. 4.23).

(e) engage agricultural specialists for the various projectactivities, as well as overseas training, in accordance witharrangements and under terms, conditions and s-hedulessatisfactory to IDA (Para. 4.37).

(f) ensure that procurement of vehicles, machinery and equipment iscompleted on timely schedule and in line with IDA ProcurementGuidelines (para. 4.37).

-44-

(g) ensure recruitment of: (i) a suitably experienced firm ofconsulting engineers for design and supervision of projectconstructions; and (ii) proven contractors for executingconstruction works, under terms, conditions and schedulessatisfactory to IDA (para. 4.37).

(h) open and maintain a Special Account for project operations onterms and conditions satisfactory to IDA (para. 4.44).

(i) ensure: (i) preparation of annual work program, budget andfinancing plan for the project by PMU, and its submission to IDAfor review and comment by November 15 of the preceding year(para. 5.01); and (ii) maintenance of project accounts andrecords and the timely submission of periodic audit, annual andcompletion reports satisfactory to IDA (paras. 4.45 and 5.24).

(j) ensure recruitment and maintenance in posts throughout projectimplementation period of qualified and experienced pe-sonnel forthe PMU (para. 5.02).

(k) ensure the implementation of training progtams for:(i) technical, professional and managerial personnel in theproject; and (ii) farmers in the project area (para. 5.04).

(1) maintain activities of CCSC and LACs during projectimplementation (para. 5.08).

(m) sign an agreement with NBY by December 31, 1989 for provision ofloans to four cooperatives in project area for purchase ofelectric irrigation pumps, farm machinery and crop productioninputs. This supplementary agreement would specify conditionsand duration of loans and the associated interest rates to bepaid by cooperatives and farmers (para. 5.09).

(n) ensure the procurement of fertilizers, chemicals and seeds forall farmers in project area be made in adequate quantities andby required timetable to ensure targeted production of crops,a.ad all chemicals purchased for the project will be in line withIDA guidelines (para. 5.13).

C. Recommendation

7.03 Subject to the conditions set out above being met, the project wouldbe suitable for an IDA Credit of SDR 9.3 million (US$12.0 million equivalent)on standard terms with 40 years maturity. The Borrower would be the People'sDemocratic Republic of Yemen.

-45-

ANIIEX ITable

PEOPLE'S OEMCRATIC REPiLIC Of YEINE

THIRDO WAaI HADIAIUT AGlcUTItAL p"ECt

Rasic Data on Wadi 4adr &mawt. Coop 9ratives

Al Oat'n Shib Sei nn Tarim

Founding Year 1972 1973 1972 .1972Members 1o.+031 S0O 801 845Location of Office Al Qat'n Shibam Seiyun TarimAgricultural area (ha):

-Total area l/ 33.810 6.827 4,683 9,710-Cultivable Area 7,014 1.793 3.970 3.900-Average Cultivated Area 2.940 656 1,003 2,765

Staff 54 2/ 32 l/ 29 _/ 42Physical Facilities

-Storage 3 small stores 6 stores i/ 6 stores 6/ 8 buildings forfertilizerts,seeds. etc.

Irrigation 87 boreholes 29 boreholes 23 boreholes 36 boreholes274 shallow wells 547 shallow wells 4Q1 shallow wells

Machinery and Vehicles 8 tractors 4 tractors and 4 tractors and 4 tractors4 motorcycles I S-ton truck trailers I bulldozer3 4-WD pickups 2 4-wd st. wagons S ton truck 2 trucks1 6-ton truck 3 4 WO st wagons 12 motorcycles

2 motorcycles 2 4 i.JO pickups

Problems Inadequate fertili Lack of spare parts Lack of spare parts Lack of harvet ingzer supply. Inadequate fertili Storage required at machinery.

zer supply. sector level.Inadequate fertillzer supply.

Sources: Cooperatives, Hadramawt, PORY.

J/ Reported as potentially cultivable land in total area.2/ Including 10 mechanics.J/ Inclduig 7 mechanics._/ Includinge mechanic.J/ Each 100 ton._/ Each 50-70 ton.

31 63C/P64

3 I 63C64

-46- ANNEX 1Table 2

PU'S KIKUTIC WUUC O Yr

THNIF Ml NAN~U *IRCILTLWI PIOWE

Financi&l Statuut of Proectt-Rilated C Wrative

: :

:9 1/ i M1 1/ 1" U: : - - -- ----------.-------- : -- :

:Expudibrs, Incoa ; Profit Expenditure lncog Profit Eapindittn I luco ProfitCooWratire I () (YD) (VI) (VI) 1Yv) (TI) (I) (10)

: : : … - …-- -- - - - - -- -I - - -

: :. I I * *

ii ate 106,553 I" 560 92,005 110,43. 1U1,1 i 70,554 40,07 141,495 a89,414

: : : .- …--------

: : : S I : I :

Sliba 47, 1m 82,538 15,372 64,213 94,9 1 30,374 70.53 74,474 3,fl4

: : . . . :~~~~~~~~~~~~~~~~~~~~~~~~~~ -- ------ :--:

*eir I ,2,9" 86 52 23,333 49 I53 O9 3 1 20, la 2 S 71 1 21117

: :--I----- …----… ------------- _:-------- _ -------- - …__ __

Tarim 1 7,990 ,i5 .31 17,33 84 ,553 92,834 9,53 97,399 1 71,937 !,417

--- - -- - -- - - -- - -- - -- -- - - --- -- -- - ------- ---- w-- -- ---- ----- ----- -- - - ------------___ s_ __ _ b_i__ ___

Saurcn: D uatmt of Cooperatives, Seci,,n, nd Cooperativ", Hadra aut, PDItY

I/ Audited figures. Includn deproclit- n xpditI n o trading ccount, plant protection I incoo fros other2/ Prcliinury unaudited figuorn liy not No coourablo withw 1986 i IM3 data.

-47-

ANEX 2Table I

PEOPLE'S DEMOCRATIC REPt,xC OF YEMEN

THIRD WAD I HAORAMT AGRICLnTURAL PROJECT

_rX of Mt Irrtgatin Develomnts

Areas (ha)Areas by Net Net 1/ met 1/ Tubewells 2/ NetCoop. No. of Tubewells Gross Palo Pipe Systems Open Canals Only Agric.

A1 Oat'n Cooe.

Ghuseys 3 165 - - 150 - 150Sahat Al Qat'n 7 390 - 350 350Al Kharabah 11 635 20 - 550 - 570Al Jawadah 2 120 100 100Jabhoodh I LA NLA --- 51so

Sub-total 41.310 Q 1.050 1 .220

Shibam Cooo.

Wadi Bin Ali 5 297 250 - 250Khomoosah 1 N/A N/A - - 50 50Al Garah 1 54 - 30 20 50Buheirah 3 170 10 - 145 155Al Hauta _2A 420 5 50 - 100

Sub total i I6Z 50Q

Seiyun COOD,

Al Ghurfah 4 240 140 70 210Al Heimrat 3 170 20 135 5SSMadudah 2 113 S 95 100Maryamah 4 250 30 180 210Boor 1 N/A N/A 50 50Tarba 330 -

Sub-total 1f I.103 22L 770 104

Tarim COOp.

Sharyuf 3200 70 90

Total i2 3.S14 4 LaZi 130

Coop. = CooperativeN/A = Not AvailableAgric. = Agricultural

1/ To be provided with pipe distribution systems without land levellingbecause the areas are prone to spate flows.

Z/ Lined and unlined canal systems with land levelling,1/ Areas for replacement tubewells only (distribution systems already adequate)

31 63C/PG2

3 163C62



Tubewells and Pumosets Characteristics

Tubewells Charaterictics PLulsets Characteristics 3/Estimated Z/ AverageAverage Oesian Total Head

No. of Tubewells Drilling Phase I Phases Total No. -Existing 1/ New Total Depth alone II & III 30kW 35kW 45kW of Puwpsets co

Ghuseys - 3 3 179 35 40 3 - - 3Sahat Qat'n - 7 7 173 37 47 - 7 _ 7Al Kharabah 2 9 11 165 38 48 - I1 - 11Al Jawadah - 2 2 162 45 48 - 2 - 2Jabhoodh - 1 1 162 S0 53 - - 1 1Wadi Bin Ali 1 4 5 162 53 56 - - S 5Khomoosah - 1 1 162 60 60 - - 1 1Al Garah - 1 1 152 40 44 - 1 _ 1Buheira - 3 3 1S2 50 55 - - 3 3Al Hauta - 2 2 170 35 40 2 - - 2Al Ghurfah - 4 4 207 35 4C 4 - - 4Al Heimrat - 3 3 170 35 40 3 - - 3Madudah - 2 2 152 50 55 - - 2 2Maryamah - 4 4 160 35 39 4 - - 4Boor - 1 1 160 45 49 - 1 - 1Tarba 2 4 6 152 40 44 - 6 - 6Sharyuf 1 2 3 180 45 48 - 3 - 3

Total 6 53 59 167.3 40.5 46.4 16 :1 12 59

Spare Sets 2 3 2 7

Totals 18 34 14 66

1/ Existing (14) dilapidated boreholes to be replaced.Z/ Total estimated drilling depth for 59 new tubewells is about 9900 m.1/ Details in project wtrking paper.

-49-

Annex 2Table 3

PEOPLE'S DEOCRATIC REPUBLIt OF YEMEN

THIRD WADI HADRAHAWT AGRICULTLUAL PROJECT

Sumary of Works forSpate Inrovment

No. by Year

Un1 190 1991 12 I9 IM M Total

EXCAVATION FOR STRUCTURES M3 - 400 2,100 2,800 450 450 6.200EVCAVATE FARM EMBANKMANTS M3 - 3,200 4.700 4,700 1,600 1.600 15.800EXCAVATE OH STONY SOILS M3 - 600 8,000 800 300 300 10,000GABION BASKETS 3XlX1 M3 - 190 870 890 295 295 2,540GABION BASKETS 6X2X.3 M3 70 430 650 300 300 1.750GABION BASKETS 2XlX.S M3 - 30 460 530 200 200 1,420FILTER FABRIC M3 - 570 2,700 2,810 950 9S0 7.980CEMENT MASONRY M3 - - v 70 280 100 100 550CEMENT CONCRETE M3 - - SO 255 100 100 50SMISC ITEMS SUM H- - - - -BACKFILL TO STRUCTURES M3 330 680 140 140 1,290

3163C/p66

3 163C68

-so-

ANNEX 3Table 1



Suma ry of Fa Machinery

Quantities by Year

Unit 1990 1991 1992 1993 1994 1995 Total

FARM MACHINERY

1. PHASE III

TRACTOR 65 HP No. - - 60 - - - 60

TRACTOR 92 HP NO. - - 4 - - - 4

MOULDBOARD PLOW 3 BOTTOM NO. - - 15 - - - 15

MOULDBOARD PLOW 2 BOTTOM NO. - - 45 - - - 45

REAR GR.DER BLADE NO. - - 4 - - - 4

RIDGER NO. - - 20 - - - 20

INTERROW CULTIVATOR NO. - - 30 - - - 30

FERTILIZER SPREADER NO. - - 15 - - _ 15

DITCHER NO. - - 20 - - - 20

DISC HARROW NO. - - 60 - - - 60

SEED DRILL NO. - - 15 - - - 15

TRANSPLANTER NO. - - 10 - - - 10

LAND LEVELER NO. - - 20 - - - 20

TIPPER TRAILER NO. - - 60 - - 60

TINE CULTIVATOR NO. - - 60 - - 60

MULTIPURPOSE MOWER NO - - 60 - - 60

SPRAYER WITH TANK NO. - - 12 - - - 12

STATIONARY THRESHER (5T/H) NO. - - 20 - - - 20

POTATO LIFTER - 2 ROW NO. - - 6 - - - 6

BORDER FORMER NO. - - 60 - - - 60

KNAPSACK SPRAYER NO. - - 120 - - - 120

SPARE PARTS YD '000 - - 840.8 - - - 840.8

SUB-TOTAL PHASE III

2. PHASE II

FARM SHEDS (100M2/AUP) NO. - 30 30 - - - 60

SEED DRILL NO. - 4 - - - - 4

TRANSPLANTER NO. - 4 - - - - 4

LAND LEVELLER NO. - 15 - - - - 15

TIPPING TRAILER NO. 30 - - - 30

STATIONERY THRESHER NO. - 12 - - - - 12

MULTIPURPOSE MOWER NO. - 60 - - - - 60

BORDER FORMERS NO. - 30 - - - - 30

SPARE PARTS YD '000 168.E - - - - 168.i

31 6 3C69

-5A1-

Table 2

PEOPLE'S DEPECIATIC REPUBLIC OF YEMEN


Incrmontal InDut Suoalies for Protect

Ouantities by Yearun1t 19 19 19 19 19 ma Toa

Input Suoolies Phase III 1/

Urea Ton - - 100 200 235 535TSP Ton - - 90 180 19S 465Pesticides Kg - - 1,140 2,280 2,590 - 6.010Imported Seeds Ton - - 53 107 121 - 281Bags No. 51,000 103,000 116.000 - 270.000Boxes No. - - 19,000 39,300 43.000 - 101,000

Input Supplies Phase II l/

Urea Ton 160 - - - 160TSP Ton - 140 - - 140Pesticides Kg 1,800 - - 1.800Imported Seeds Ton - 84 - - 84Bags No. - 81,000 - 81.000Boxes No. - 31,000 - - - 31.000

I/ Estimate for Phase III erea takes into account completion of groundwater-based irrigation works and development of cropping inter.sities.

2/ For Phase II area, estimated quantities represent incremental requirementsfor increasing cropping intensities from 93X to 130X.

3163C70

-52-

ANNEX 3Table 3



Suumary of Vehicles andEquipment for the Irrigation Maintenance Unit

Quantity

Unit 1990 1991 1992 1993 1994 1995 Total

CONSTRUCTION EQUIPMENT

BULL DOZER D-6 NO. - 1 - - - - 1BULL DOZER D-4 NO. - 1 - - - - 1MOTOR GRADER 125 ;tP NO. - 1 - - - - 1LOADER/BACKHOE 90 HP NO. - 2 - - - - 2WATER BOWSER 1,200 GALLON NO. - 1 - - - - 1ROLLER COMPACTOR NO. - 1 - - - - 1TRUCK 7-TON NO. - 1 - - - - 1

CONCRETE MIXER 7/5 NO. - I - - - - 1COMPRESSOR JACK HAMMER NO. - 1 - - - - 1TIPPER TRUCK 6-TON/3.5 M3 NO. - 4 - - - - 4FRONT LOADER NO. - 1 - - - - 1SPARE PARTS YD '000 - 61.4 - - - - 61.4MISC. TOOLS NO. - 1 - - - - 1

OTHER EQUIPMENT

SURVEY INSTRUMENTS SET - 1 - - - - 1DRAWING OFFICE EQUIPMENT LOT - 1 - - - - IOFFICE EQUIPMENT & FURNITURE LOT - 1 - - - - 1CANAL FLOW METERS REGULAR NO. - 2 - - - - 2CANAL FLOW METERS SMALL NO. - 10 - - - - 10WATER LEVEL RECORDERS NO. - 4 - - - - 4WELL DIPPING TAPE NO. - 4 - - - - 4RAIN GAUGE NO. - 10 - - - - 10FLOOD GAUGE NO. - 8 - - - - 8EC MEASURING METERS NO. - 4 - - - - 4COMPUTER NO. - 2 - - - - 2AGROMETEOROLOGICAL STATION NO. - 2 - - - - 2

VEHICLES

PICK-UP DOUBLE CABIN 4-WD NO. - 6 - - - - 6STATION WAGON 4-WD NO. - 2 - - - - 2MOTORCYCLES 125 NO. - 4 - - - - 4

3 1 6 3C7 1

PIOPLES DI1,wI.llC IfPU1t11IC Of *ENEt

ITHIRO WADI UDAN* MT AGAIOlUBIA OitCEl hAP III)BRtNBOSS OF SUKIA#Y ACCOUUTS

Ito ' Ooe

Base Costs Physical Cotiinrgncias Price Conlinpnc ies lotal Il. Cont Physical

Local tocal Local Local Price Cant.

hicl Duties a For (xci. Duie s A lEnd. Duties A (tacl. Duties A an Phyical

For. E.ch lTxasi ls.s loal tch fa.isl la.es losta For. (xch. Tnesil laxes Total for. Each. faseal lawn Total Cont

I. IWESTNINI CosTs

A iORIaSItia MOIIKS 3.240 6 1. 45 0 4.9- 6 324 1 174 5 - 4f5 4 4s5.1 7a I1 - 112.6 4.e5O.! 2 ON.5 s- 5 ISS.5 a SW1

* SP6IE a ROADS 504 1 271 O 176 5 75 7 40* -116S 9 3 354 - 131 3 19 1. 35 1. - 1.0)0.3 134.4

C VEHICLES 170 2 90 - l79 2 a 5 04 - s O a OI - 23.1 Ul.s so.J - 211. 1o I

* E(IIPIEUT7 2.604 A 1370 2.241 9 1302 63 1 1 33.3 141 - 321.3 3J,. i- In. 3 - I2. II 1s5. s

tSTUDIES 14 a 12 - 20 - - 5. t 06 - O.1 12. 1.o - 30" 1

F lOCAt ItAINIG Oa l4 - Is G 00 07 - ao 0.1 12 - 2.1 1.0 Ws - 14 0 3

6 FMIIGN TRAINING 106.5 3 1S I s 3 05 - a3 20.3 13 - 21.6 132.1 11.0 143.2 6a

B CICIuCat ASSIST. 13 5 7lOB - 701 7 31 A 3S - 35. 4 DO a 65 - 60. 7506 01.1 - B1t.4 31t I

I INPJI StPptl 7603 310 - 1401 7 32 19 -7 1 1433 5s - 14.8t a 2. 2 46.4 - 32r 6 4 1

a teusu OI"CY 17 3 Is7 tillO I e a - O3 9 22 3 Ia - 240 2M. 4 225 - 20 ol e

I PIRSOUNEt - 1326 - 132 66.6 - 6 - Is4 15-4 t 5465 -. 54G 14

fatal INVESINSNT COSIS 8.210 S 2.454.2 - 10.64 6 619 A 236 A - 151. 1,256 S 213.4 - 520. le 1.0".0 1 2364.4 13-,01.5 03 .S

I It EcusElK COSIS

L PERSONNEL - 3131 - 313 7 - IS - s1 - 43.4 4.4 - 76? - 376.1 le.0

l WIEIICLZS OPEAIIUm a N6I5IEMANCE 130 lls a 245 3 6 5 s 3 - 12 . 271 5 11 -a5.4 164.6 In. - 304. 4

C. mKAeIat 74. 3 222 - 2 o10 31 1 t. - 14 12. 4 210 - 2 .4 3.4 2.3 - 35.3 Is I

I OfFICE OPInATIOuS. EQUIPMIENT 111 13.0 166 0 4 4 3 9 - 3 1t 0 12 2 31. 2 Ill 2 4 .2 - M2055 3a

total 3ECURP(mI COSIS 232 A 1303 - 1.023 0 14 6 316 - 51. I M 3 100 4 - 165. 4 3 3 $73. 1 - 1.239.5 3.01

fetal * 503 2 3.144 4 11 ,616 634 4 213 - "01 1 .315. 13.1 - M.65 1 1 40 .5 3.3 3. S - 423.0 1. 011. S

riwrl le. O383 11.53

I.-:4'

Pti llS KNOCRAIIC REPUIIL .; VININR15D M1D1 NiANNAI I Au cutUR I PJECT 3P 131)

S..ry Account by Project Cto.osotITO 10003

Phs Ica IP0046C7 SPATE INICATIOU coCoat intc em

313&IUI A 1IUillT IP0OVEKEUT rAINhIMCE URIWCiCliUAOKSI HSEA A fWluIKE lUK - ----------AU4IIIS ilU 0VEILOPEUUT NOOS U3ill OEkV!OPEU KVELOPNEUI UMSti1 UB tIK? FtAILITIES lotU ol I Amt

I 3IVIESINET COSTS

* IN1UTION NOOKS 4.- 6 * - - - - 4.0- 3 0.0 43 aSPATE S M0DS - 450 5 312 s - - - - 33.5 ?1` s I5.0 l65

C VEHICLES U4.6 444 - 350 is2 - ITO I .t0D (W1PEKT I.0 u s 3 282 7 is e 30.4 .0 e . I.a 6.0 2,741.1 S.0 Ii? 1E STUDIES 72 a - - - - - - 720 0.0 00ILOAt 7M I*IUG 5 4 - - 7 2 - - - Is 5 5.0 0ac GFEIGU TRAINING - - 30 a 54 a 5l0 I Is. a-5 S 0 5. w1(EC3I1CA1 ASSIST. 1077 - - - - - - 10 ? 5-. 5 41I NPUT Supply - 740 7 - - - - 4.I ? .0 37 0.1COOSUETMCIT 3070 -- to?10 S50 0Iit Ff5501361 132 5 1 3206 S.0 a 01 PtesT4FE W ~~~~~~~~-- - - - - - - - -- -- ----- - - - - ----- - - -- -- -- ----- --- - --- -- - --- ------- ------- - - -- -- - -- --- ---- -- --- ------ -- ^- - -------

lotal INVESTEUI COSTS 1 211. 3 B 13 4 312 5 337 9 7ss 7 126 B 74 2 3.601.6 6I.1 I0.3"6 A 5. IIa *

11 H KE.V U lN Cos I s

a PERSUfE[ - - 1617 - S10 170 - - 313.1 5.0 s7 Ia TEI1CIES oPEiUAtIO a NAIUTEI CEt 120 o - S a 77 5 3l 0 246.3 s .0 o IC UTESIAL - I SO00 - 132 3 Is. - - 2a70 S.0 3 4D OFICE OPtEUAIIOOS. TOUIPIEUT 6 0 - IS2 0 - 1 0 3 0 J3. 0 0.3Jo

lotal 5LCUKOLI COSTS 326 0 473 300 - 114 0 - - 3.023.0 s0 5* ITotal USEEIUE COSTS 1.327 3 6.135 4 332 5 al 3 755 7 4361 33.2 3 ,"I. 6 It.S II.44. T 18 0I 7

Physical Con-,lgoneses 13 3 60I 1 46 0 40 6 37 A 238 9.4 54. 2.3 90 7 0.0 00Pric Contisgmc ss i7_ . 633_3 69 0 o 11 - 0 IS - 72 5 2 -2 2S3.7 ------- 4.0 - .? -. --3205

lotel M0JECT COSIS 3.572 1 7.68 . 428 3 067 0 044 0 530 4 225.8 2,027. 26.3 34.200 0 7 2 3. 0 5

.. . . ........ . . . . .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ..... ...... .... .. ... zForeign f.chas0. 1.221 3 5.223. 6 263 3 525 0 age a 234 7 335.3 3,020.0 30.2 1410.43S 6.0 725 0

April It 189 16 52

iRp.ll z Xsss E sx~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'.

it,I

PEOPLES DENOCRAIIC REPUBLIC O YElIENTHIRDO NADI UARANANT AGRICULTUR*L PROJECI (IHAP 1111

Sumry Atcounts by T"r

Totals Including Continggocies Totals including Conti -nselsIlY '0001 1US$ 000O

19g0 t12l 1992 193 1904 5195 Total 1000 loll 1;92 1293 ;9004 10N5 Total

1. INVESIIIE1 COSIS

A. IR1GATION1 IWORKS - 2.496.7 3. 632.22 5.S - - 6 156.6 - 7.130. 1 10O.620. 5 75.7 - - M 00.3

*. SPATE a ROADS - 210.0 SO.0 172.6 66.0 70.J 1 030.3 - 613.9 1 4U.2 504.6 19R.S 20C. 3. 012.4C. VEHICLES 12.13 Il.3 62.0 20.2 - - 211.U 35.8 343.0 181.4 50.2 - - 619.3

0. EOUIPNENT 4.5 1.211. 1 1 90.8 0.8 - - 3 266.9 13.0 3. 716.6 5.20.4 2.2 - - 0552.3E. STUDIES 12.7 26.5 415 - - - 80.7 37.2 71.5 121.2 - - - 235.0

F. LOCAt TRAINING - 2.7 7. 8.6 - - 18.4 - 7.9 22.2 23. * - 53.0

G. FOREIG TRAINING 11.4 II.J 45.0 40.2 34.8 - 143.2 33.2 34.6 131.7 117 4 101.7 - 418.6M. IFCIICAt ASSIST. 176.0 303.3 265.9 l. 6 4.6 - 131.4 514. 6 8a6.? 777.6 235.? 13. 5 - 2. 431. 11. INPUT SUPPtY - 200.3 130.0 275.6 320.6 - 926.6 5 s5.8 380.2 S 9317.5 - 2. 70. 3O1. CONSULTAUCY 54. 6 79. 4 78. 6 IJ. 3 - - 230.2 IS9. 5 232. 3 229. 3. 5 - - 675 2

K, PERSOILE 32.4 33. 4 34.4 28.60 15 0 7.4 154.6 04.7 97. 5 100.7 2. 0 55.6 21. 6 452.0

Total INVESTIENT COSIS 303.7 4. 754.5 6. 796.9 671.3 447.0 78. 1 13. 053. 5 SU. 13. 901. 1;. 574. 0 1. 9862. 5 . 301.0 22R.5 36. 162. 3

II. RECURRENI COSIS

A. PERSONNEL 18.2 55.7 72.3 74.9 77 5 80.2 378.7 53.3 162.8 211.5 21U.9 226.5 234.5 1. 107.4B. VENICtES OPERAI ION A MAINTENANCE 32. I 37. 3 47. 7 57. 8 53. 3 65. 8 304. 0 93. 9 100. 1 130 4 IU. 9 IS. I 192. 5 S. a

C. NATERIAL 9.9 126.4 89.6 90.5 IS.0 IS.8 351.3 29.0 369.6 22. 0 264.6 55.6 46. 2 1.027. 1O. OFFICE OPERATIONS. ECUIPIENYT l.J 4.1 63.9 65.2 67 8 2.7 205.5 5.2 12.1 188.6 190.7 190.3 7.8 600.9

Total RECURRENT COSIS 62.0 223.S 273.5 28. 3 227.8 164.5 1.239 s5 tJ. 3 6S3.6 799.6 843. I 685.5 480.9 3.624. 2zz:*==.==-z=z=zz~=zzz z__ _zz= z=x . ... ===== = ... z ::::: .....: x=:t .- : . .......

Total PROJECI COSTS 365.7 4.S78 0 7.070.4 0SS.6 874 6 242 6 14.291. 0 I. 060. 4 14. 555.5 20.673.6 2. 805.9 1. 972.6 709.4 41.7U.5:.=- ==::-=. _zm =zz : ==, .=z -=-== - =::=== ===-z .=:.* ==. mz....: :.. a.-::--:

April 1I. 1889 16:52

*1.4lb

-56-

Annex 4Table 4



Estimated Schedule of Disbursements of IDA Credit(US$ million)

IDAFiscal Semester Semiannual Cumulative Percentage ofYear Ending Disbursements Disbursements Total Credit

1990 06/30/90

1991 12/31/90 - - -06/30/91 0.4 0.4 3

1992 12/31/91 0.8 1.2 1006/30/92 1.3 2.5 21

1993 12/31/92 1.2 3.7 3106/30/93 1.3 5.0 42

1994 12/31/93 2.8 7.8 65C6/30/94 1.4 9.2 77

1995 12/31/94 1.0 10.2 8506/30/95 0.8 11.0 92

1996 12/31/95 0.6 11.6 9706/30/96 0.4 12.0 100

Closing Date: June 30, 1997

316 3C6 S

-57-

AINEX 5Table 1

POPLE'S DEMOCRATIC REPUBLIC OF YEMEN

THIRD WADI HADRAM4AWT AGRICULTUi:AL PROJECT

Staff for the Praieet Mnaaint Unit

No by Year

ULU 19 19 19 1993 19 19 Total

LOCAL STAFF

PROJECT MANAGER H-Y 1 1 1 1 1 1 6MAN./SENIOR ENG. H-Y 1 1 1 1 1 1 6JUNIOR ENGINEER (CIVIL MECH) H-Y 4 4 4 4 3 2 21HYDROLOGIST/HYROGEOLOGIST M-Y 1 1 1 - - - 3SECT HD (AMIN. AGR, M&E. ACCTS) H-Y 3 4 4 4 4 2 21STATISTICIAN M-Y 4 4 4 4 4 4 24AGRONOMIST M-Y 1 1 1 1 1 1 6SURVEYOR H-Y 5 S 5 3 3 1 22TECHNICIAN H-Y 7 7 7 7 5 2 35STORE KEEPER H-Y 2 2 2 2 2 2 12DRAFTSMAN H-Y 2 2 2 2 1 - 9ASSISTANT H-Y 3 3 3 3 3 2 17TYPIST M Y 2 2 2 2 1 1 10SURVEY HELPER M Y 4 4 4 4 4 1 21DRIVER H Y 7 7 7 7 7 4 39ATTENDANT/WATCHMAN M Y 7 7 7 6 5 3 35OFFICE MAN (FOR CONSULTING ENG) M Y 1 1 1 1 - - 4TYPIST (FOR CONSULTING ENG) H Y 1 1 1 1 - - 4DRIVER (FOR CONSULTING ENG) M Y 3 3 3 3 - - 12LOADERS (FOR CONSUL1 INC ENG) M Y 2 2 2 2 - - 8

TECHNICAL ASSISTANCE SPECIALISTS

PMK

IRRIGATION ENGINEER HH 12 12 12 - - 36IRRIGATION AGRONOMIST mm 6 12 6 - - 24HORTICULTURIST 41 6 6 6 - - - 18

CONSULTANT ENGINEERS

CONSTRUCTION ENGINEER mm 8 12 12 12 - - 44HYDROGEOLOGIST mm 4 12 8 - - - 24SURVEY/DESIGN ENGINEER M1 8 12 8 - - - 28DESIGN ENGINEER MH - 6 6 6 - - 18INSPECTOR OF WORKS m9 6 12 12 - - - 30TECHNICAL SUPPORT (PERIODIC) Mm 1 1 1 1 1 1 6

CONSULTANT ASSIGNMENTS

GROUNDWATER MODELLER MM - 1 - I - - 2MONITORING AND EVALUATION SPECIALIST mm 3 3 3 3 - - 12VETERINARIAN/LIVESTOCK SPECIALIST Mm - 6 6 - - - 12FARM MACHINERY SPECIALIST HM 6 6 6 - - - 18AGRICULTURAL ECONOMIST mm 0 0 6 6 - - 12

3163C/p65

3 163C66

-58-

ANNEX STable 2


THIRN WADI NADRAHIWT AGRICULTURAL PROJECT

Inlementation Schedule for Groundwater Irrioation Develonwent

Ouantities by YearCgmponent UniA 1990 1991 192f I9 IBM 1J9 Total

Tubewell Construction m - 6,000 3,900 - - - 9,900Supply of Pumpsets No. - 33 33 - - - 66Pump Houses No. - 30 29 - - - 59Conveyance Pipelines km - 22 43 - - - 65Lined Canals km 20 39 - - 59Unlined Canals km - 40 76 - 116Pipe Network km - - 22 - - 22Network Structures No. 1.2 1,200 2,325 - - - 3,525Farm Roads km - 3 17 4 - - 24Flood Bunds km - 6 7 3 - 16Land Levelling '000m3 - 400 737 - - 1,137Irrigated Land ha - 700 1,425 - - - 2,125

31 63C/P70

31 63C 72

PWLEI NICIAIIC 3F9I3C J YEFW

IIII TUd AuWNtT ISt CE IEIt PWECI 1P lit 1WI wmmw W weucanuinm u u !im 1

(Ltenzt 151002

-- ..-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - - -- -- - -- -___- -- - - -- - -- __-- - -- - .- - - -- - -----

PlUECt lEU I 2 3 4 5 * I t o 1 It 12 U 1 11 1 1 16n.... .... .. n .,.......-- -- -- -- -- - -- -- --d3 - --3- -- - -33-33----- ----- ------- ------- -- 3 - --- - -- - -- - -- -

~--~------- opluotati Perni -----------

SoURms I(TrO o

Frm Proict 1eoefliiarije a la Cost FfAVerWy hlgySiS

Cost Recovery: 0 1,236 2,575 2,518 2,N13 2, US 216 2,1W 2,61 2,1W 2,4W , 2,S1 t 2,4W 2.4 2,4" 2,6W

tLed Sttermet Tla 123 VD/ha) 0 0 0 I19 127 134 142 151 133 IS 15 3 3 in 133 133 3 IS 1 J13 15

Motwr Chargn: Total 6rns Cammpt I M 9133 I I I 3 51 155 512 S in 411 * 11 117 41 41I 4S1 U 17 "1 451

Lou bpaymts hvr Fare hachmery 0 * S 319 1,423 1,421 1,421 1,42 ,421 1,4 1,421 1,42 1,421 1,415 1,421 1,421 1,421 1,421

teo ayu ots fer tPs I Wres 0 0 t 227 4US 4U1 41 41 41 441 41 4*1 41 4S1 4US 443. 441 441

[sternal Sourc2…

IN Creit 252 1,1W 7 US 44 l * * a * * * * Arab Fad 757 a59 791 * 0 0 0 I I

waiut Food 0 731 250 744 131 1 S S 6 I I6 1

Total E[tefual arcn 232 3,143 2,441 2,0U 2,075 ii I * 0 0 * I I I * 0

latal Shrn 232 l,s3 7.4. 3,2W 4,30 2,13 2,103 2,44 2 2,4 2,4w 2I4W 2,"W 2,4W I.4 2,48 2,4" 2,4W 2,4.. 3. . .. . ....... * , .3 5 _ . _ a 3333.. 3_ _ _ _*_ _ _ _

ltails Abut Extoral Surces I S'Ml

Proe. lavestet & Oper. IlSfiaKedtl IS0 3,450 2,400 1,300 1,400 So0 I I I 0 S I I 0 S I I

ParchIl Op. of e. - 00 10 100 1t 1N - - - - - - - - - -

Parch I op. of Fare Eip. - 2,000 2,0400 H 4 00ON - - - - - - - - - - -

Porch a op. of Equip. for II - 1,30 -

C£s.t. agimer 130 155Traiia - 45 - - - --Crop Prod. Igots - 10 300 no 16 - -

lndicativt Praj. lawnt. I pr. 1rab-fionaicedl 0 2,725 2,725 2,723 2,123 5 * , * I I I S I 0 0 *

Itao to be Scidod - 2,721 2,725 2,725 2,M 0 - - -

llOiCative Proj. Invest. I SOW. loit-fli Woil * 2,213 2,275 2,215 2,211 0 0 0 2 I I a 0 I

Iti tto b hciud - 2,213 2,M , 2,21 - - - - - - - - - - - - -

0

Total Frn Doors hfPrFnjct 750 10,63 1,4W 6,300 6,4W S w S I S 0 S 0 0 * *

Lft ICIIIOeS ii3 om

1Tta Preojct Iavntgets 363 4,"4 7,236 1,266 9I 531 I 6 6 0 6 6 S 5 0 0 0 S

Lug-lw. kbSt Serice

(36 crditr

Lophpaft..s 0 9 0 0 S O O e O 123 122 121 12 fi9 113 fly 316lfterest Elpeew I 9 It 23 26 23 29 2 n 2e 73 70 64 61 u s5 52Couitb t Charge 0 S 5 0 5 5 5 0 5 3 I I e 0 S 0 *

Totall lAbtl Srvice I I i9 23 26 2 29 33 2 21 9 392 IN I" 1to 176 32 I"

Arab Fad

Leo kpay.mets 0 e 0 0 141 W 139 In 137 135 134 133 332 131 13 la 3 IV 126Inert t Expense 0 14 U 67 91 9 n 4 94 is 65 63 56 52 46 44Ceataeet Charg 1 16 11 7 2 0 I * 0 * * I * * 0 S S 0

Tetal IKait Fund lbt Service II 29 52 14 234 2 233 227 22e 215 29 23 197 392 Is m In I

Kuwait Fad ?

too e Repaymets O O 0 3N4 364 SW4 4 3U 364 364 364 Su 364 364 364 364 364leternit Espese * 23 6U 114 1U [1i 1 117 149 142 I" 127 12 Its 1I 9 91 *Cemoltmt Chrg 46 *0 2 137 6 a I I * 0 0 * I I I I * I

fatal Arab FV. ebt Service 46 63 97 13t 525 535 528 521 13 36 499 "I 4 477 416 462 45 446

roimt EKI SERVICE 4 101 1U 221 7 02 16 175 1u2 N1 90 6 369 652 335 Us 12 16…-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - -- - - - - - ------- - --…-…-…

lecreas (Deress ian Cash) (1953 (1,4613 (4,9621 3,364 2,933 1,421 1,314 J,364 1,946 1,950 1,195 1,112 1,629 1,46 1,6U 1,NI 1,396 1,913

lotal Applications 252 3,543 2,441 3,293 4,636 2,739 2,663 2,646 2,676 2,6U9 2,691 2,693 2,693 2,6" 2,6H 2,693 2,693 2,693S...... ....... .t.St.s .t..... . ....ls S. ss.: _ _a . s s s. S5SSSS ......5 .5 .55 sSass .5_5D .55.5..

Cvuliative Itcreast (lcrCeul is Cash 11453 1,656) 1(6,63 (4,7541 11,3221 (3943 1,420 3,264 5,192 1,142 1,937 16,736 12,579 34,43 16,3 33,36 25,465 21,973

60V1. ILL TCMI llUlOE63JSTO FILI .1CAN TLL 195 1,461 4,962 5 I I A I I 0 0 * I 0 * * S S

Loop-terer kt Srwvice Coer. Ratio 5.4 3.3 3.2 3.3 3.4 3.5 3.6 3.0 3.6 3.1 Li 3.2 3.3 3.4 3.4

-0%0

i mime ma imaza am1sa11111i

1114 tm sue its m am Il ts s11 ass19 alm mm iwi ins am it" s1 as ums ns am mu as - 3. 2m7 ale a ass m mal 213 all 3114

maL Nom - - - - 4.6. IaJe. UW.0 341.4 3U?. 369t.0 £3U 433.147.4 49..*Mp. *7.4 MM7.0 643.4 gi.0 837.4 qo37.t WA3 9a1 8A.-3 W.B- GWJ. 41d..

nasi M tin U.S 263.84U..45 4 4PS.6 aisle JJAsi 1742.e 3312.4 ua.I Wums MsA Su1 M.. em.. e36.4 .e Am.$ ems sues M$ SM.* i2fJ i=J. AIM# eM. .M ; &Ae 6

a63MALa Uri

lijea iisn CM M II- 2m.e uea., som .s m.i u.s - -

imsuu MIIs amu it 1a).e 1334.0 41., 144.1 au7.8 MI.e due --s - - - - -. . . . . .

46At*631 AM 31 .- . . . M 14.s a.e 214.4 aRC# 12. . . . 15. 14.0 MA 199.9 n24 - - M. 24.6 in04 146. 775A

uKMas mion ua -. - e4a.s eea.s at.. eeA. Mae esal. at1., al.s 6s.1 i. gas sA. AU.e as.4 &"a. 601. 6 4.8 iAm 61645 16 3. 4. 5. 644.4 A. AI

ERinI call Pa4 li - itO IL 13.4 a WJ 335 alS W A W.e 12. I" MIA 21e eac is., a. iss 231.4 aiLs INA "

seiatA mam111IKSM E II ta .. 11.9 33.5 467.2 1.I.l J 113tI.. . . .. . .. . .

MAi, cmi 344.5133 I Si4- 40. *4474 :444 sa MI SIM. 3131.3 1417. a3s.4 13116.3 .3 56.1 .15a 3.1 tm.l 973.1 a4..a Ieaa.a MIs. Ui.: mf.a tie. 70.1 ui.a W.a a1.m. 1m734i in.a. a30.a lIa

MiUIE is mill

Mo. IwoNfIa II) 1--13 .4 27A.6 121.6

wetami m..3 a0.. 1ei.7 63. 67.4

M&t Ml £3368 MA 2. 239. 441.3 ML? e7.4 -

Mt cmi a117.# 133..4 141.4 3147. 1467.4 MlA. Wat 494.3 61,11., a02.1 %9a,4 NUs 11s.. M.a m.a In.a 17a.1 1nse1 161e.1 aa ELI sea 9311 769 p1$M .1 *1a maaeaaJ.: 97J. ama. 1t6.

St 4669:1 -a5e7.8 1249.1 3041. I1.4 -6.J -2464.4 631.9 -3754.3 -27.1. 649.9 181. 2109. 517. 430.1. 474.4126.9 A 33. 4M.1Ut134.9 =3 24439. MAMA44. Mt533.lImt 9 53.34.349 3. 7. 4972. 1411,.9

M x

0

rUID VALUES V NE S113 AT A 3IICIT RATE D 102

P. TOTA ta tip zr: 'rs: =4 m= : I 3 a2 A2 WA502 LAS 1 ELM 2 YELM3TESS lat s hI dtmi d I M

C.TOTIL 41232.1 b,3,0.3 3,53.5 123.34 ,C014.0 -44.2 ,423.3 2M1.3 521.2 1,035.2 S.T I3].

up 1a 2,517.2 4,J55.3 6,773.5 13,2W.1 37n.0 -1.-P.2 JP1731. 573.4 1tI23.7 2t300.2

U 2U 802.2 2,140.4 5,07.6 M1,4M.1 33I.s -3.474.2 -33.?7 -I.141.6 291.7 42315.1

UP 5t1 tWOWL7 2.2345 6t.3 .3412 ow.?U 1611S I tIM . *235 -6033I 2451*

211 5i147.1 3,03.3 10,223.5 16P633.0 3.6.9 170.7 -4,74.3 46003.3 2.23U.2 69.3 W1 = WM a in

1CIII 20t 7462.1 s.30o2 11.1334 13.52.? 5.523.1 3.3S.7 332031. 53713.3 3.1,2 24344."

DWA X; I,-.KC7O 141745.1 17,08W.3 2.417.1 MM.3 15,:3.6 2,16.1 10363.2 .096-1 7,41.6

LUC I YEAR - -- - - 3,-47.4 29M11.3 473.9 AFMSL lIaO FUENATE

LO 2 IYEAS 31497.6 1U11.2 SITEm WIUE IUE a

LAB3 TEMS - - - - - - - - 3179.7 ....* .. ...... m.m8in8in8

3.131221 lltC11.9117A 3 .44 -2s.n °3.1011 *93-0 62274.42 -33.4n3

INT1MAL 16S- RETIU Or ME STlEM CCI. 4,66.4 735.91 67.3

S:= :t:X*.... d.fl.*.3:..... ... .zz.. 9.u102 322,46 11,431-.92 a-1

c.WmI M.$5 3.U.u et2-.

1.121:. Ur M : :: u s ^ : ;14. 1; : 1 DU : 3N1 LS I AR WLA 2 TEALM 3LA S IC.ECII 2.0.97 5.96.43 114.312C.-E 465.9 35374." 711.361

C.tOTU. 13.046 14.441 13.13 17.501 1 1.;60 t .7U. 4.040 21.310 0.321 9.366 .VT 745.29 3914.75 425-.

UI 12 11.6?; 13.046 14.323 I.=7 120.215 3.713 2.c7I 10.356 *.305 *.4;5 cC 394.64 3U564.13 *3U-:2Z

ur 2Z 13.411 11.314 13.046 I6.431 ?.117 7.60e 2.101 9.323 3.315 7.636 c.ruu 273. 76 344.22 1.157-M

U 5;; 7.605 8.825 9.966 13.046 6.33 4.C31 -1.035 6.no 6.11C 5.S74 is 9.44 3,n22.9 .3m.

W1A0 i0 14.57? 16.073 17.4U3 21.451 13.046 11.5CS 5.= 12.826 11.471 o1.3M2 c.sw1 164.14 3,133.60 l.93

M1 202 16.431 27.979 I2.303 23.77 14.7 11.046 6.793 14.353 12.773 12.33

mm 502 25.172 27.1311 21.474 35X03 22.7t6 20.6C 13.04 21.253 1-i .36 T01T.L EFITS 21,331.77 212.31 -14.3

LAS I TL - - - - 13.04 11.51t 10.321 TOlAL CODTS 13212.31 21.31177 17.U

L66 2116 - - - - - - - - 13.04 11.5U1- -- ---------------------- ---------------------

LOJ 3 lAS - - - - - - - - - 13.046 Vt lionel V1l& at OCC I * 3.16.-laimal Rte or wl a n .n2

0, UI,t's re ..t rSubtile !.TRAL altaclwdl Comm E1Aval.t bLt Sd e * U22

h3

-63-

Annex 7



Selected Documents and Data Available in Project File

A. Reports Relating to the Project

(i) "The Underground Water Resources in the Wadi Hadramawt", D. Gear,FAO (1970).

(ii) Ministry of Agriculture and Agrarian Reform Wadi HadramawtFeasibility Study, SOGREAH, Consulting Engineers, Grenoble (1981).

(iii) "Scheme of Water and Land Resources Development in HadramawtValley", U.S.S.R./Yemeni Project (1981 & 1984).

(iv) WHAP II: Feasibility Study for Long-term Wadi Rehabilitation",Binnie and Partners (1987).

(v) WHAP II: Borehole Construction Supervision and Groundwater Studies,Sir M. MacDonald and Partners (1988).

(vi) "WHAP III: Irrigation Development - Groundwater. PreparationStudies", Sir M. MacDonald and Partners (1988).

(vii) PDRY. "Wadi Hadramawt Agricultural Project - Phase III".Preparation Report FAO/CP, June 1988.

(viii) "Staff Preappraisal Report, PDRY Third Wadi Hadramawt AgriculturalProject", IDA, November 21, 1988.

B. Working Documents

(a) Technical Analysis of Irrigation Component(b) Technical Analyses Relating to Crop Production(c) Financial Cost Tables(d) Crop Production Costs and Farm Models(e) Financial and Economic Data

3 1 6 3C67

PEOPLES DEMOCRATIC REPUBUC OF YEMENTHIRD WADI HADRAMAWT AGRICULTURAL PROJECT

Project Organization Chart

MAAR E Irrla~~~~~tion PlanningMAA

DEPARTMENTS | DCPnion D rovinc_a (DRE) iul

Agn uiture 3,______1r__

f finiml I L…_____ Yl ]|Extension | | W lt l : Il

SERVICSTN =n saw Stalon I | xtnion Veterinary D r L |IN WADI Product|on Selyun Service Services (P)HADRAMAWT I

PROJECT MANAGEMENT UNIT (PMU)

Monitoring & Evaluation _ U"N A=bomy Enenng E%l n _ _ _ng

Adminrstratlon, Co nsutat Moiora MnanaIL ance I I ~~~~~~~~~~Contrwtors WUWI __--- _ -- r---

I AL OAT'N SHIBAM SEIYUN T O IDoCoopraiv

~~~~~ z~~~~~~ c SOCmS forOperational Control C e DCIaPflID

AdministrativefTechnical -

* Menbership Listedover page AGRICULTURE PRODUCTION UNITS (60) APU_

-65-

CHART IPage 2



Project Organization

a) Composition of Central Coordinating Steering Committee (CCSC), Aden

Deputy Minister, MAAR - ChairmanDirector General of Irrigation Department, MAARDirector General of Cooperatives Department, MAARDirector General, Plant Production Department, MAARDirector General, Research and Extension Department, MAARDirector, Agriculture Department, Ministry of PlanningManager, Agricultural Credit Branch, National Bank of YemenDirector of Agriculture, Hadramawt Governorate

b) Composition of Local Advisory Committee (LAC) Seiyun

Director of Agriculture, Hadramawt Governorate - ChairmanProject Director (PM) - SecretaryDirector of Cooperatives, Hadramawt GevernorateDeputy Director of Agriculture, SeiyunManager PCMFV, SeiyunManager PCEP, SeiyunManager MRS, SeiyunFarmers' RepresentativePolitical Representative

316 3 C7

-66-

PDRY IART 2THIRD WADI HWDRA ABRICiLTU DEWT PROECT

IILEfNTTION SMoEmLE

I~~~~~~~ ~ tlPRE- t1 PROJECT YEStRPRWoECPOT UOPhECT 1 2 3 1 4 5 6 IREMI$ O

I II - PROEC I I1-TUEEELL IRRIOATION DEV. 5 o I O t t

(a) TLBEIELL.a O aa fiL I O ITEES ND AiW :1,, 30000 1 1/ and 2/ 1t tOILIZATION 11 1 3 n2nthsDRILLING,LININ6 &TESTItl ID t 159 Mb. I

I SUWLY OF RlUSM :10 3M 1 llltJU t01 116 ND. :STtLL UMSETS t OO IIss:sn159 N :

R OP UJSES t55 ND.O MINTBI BY DN RACTUR O 1 Year

I(b) fAWRlRI$ 11 I a a I a a a 3/1I SEYM ND DESI1 -Il8 lt*ttStil1 a a aa2875 h 2/

T M M AwR 1i I MlJ#llta#IM a 1/ aa NDBILIZATION s a aaana 3 nths

ama a*T a10ha 'I IONVEYANII PIPELINES I 8 ttltltit I 1 65 (lbS I

O llENDWlLS NEIIIOKS a *##69#a9*##9444#ltt :21Zih PIPE tETIORS I#1 1a450 haLAa D LLVELLIN6 i a a a 12}25h ha

a ~~f FARMAS Ra a 124a 1KaII auu aL9 BD : tJtttit#tI16K.

a IAINTE BY CNTRP[ a a I 11 Yer I2-RATE I 1R T N INM ,sIB$u:g s*,,$* ti : $flm u*IB-AGW1CULTURA L T D a a : a a a

MY OFINPUTS IWM SE 1 If :s#Utses #tnn slesmUmlu and 4/VSPPLY F IWUTS PMH III: ;fi lIStt *I:$UWUIt*#$lUt*I**fUflti/ and 41

I FARN tHINERY PWMSE 11 8 a a a 11/an 51/FAFMtIIWif PHASE IlIl 01 1 ts5U tttI 'I Iand 5/tFRUIT IND DATE DEV. I I #IwsE$$*U tt*t*W$I1s#i*uf:

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14-E1NEERN5 AM ADNINISTRTION 1 a a a a O It TECCAL ASSISTANCE 2/

PROJECT IT STAFF 8 :ns**t m:itsmm*w:s*n*m t s*sssww:sssnsswu:timmi:EGUIPET AND VEIICLES I I *t$*$ttIMMU$tI$8, I

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EGUIPIfNT AND U01ICLE 8 I a a a

11 In acrrdanre with cofinanciers procedures siuilsr to ICB.2/ Pre-project technical assistance under MM4DP 11.3! On-farm works to be executed tnrough a single contractU Prourent and supply of inputs to farmers51 Procureent and supply of fam machinery

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SAUDI ARABIA PEOPLE'S DEMOCRATIC REPUBLIC Of YEMEN

_A. ,< // ^WADI HADRAMAWT AGRICULTURAL PROJECT/ C AD RAM ACK J I AA.

-4 ARAB i P' R. YUtEN DEVELOPMENT PLAN A 3 ' r'U BLIC / I/ - s. Y- D

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